It's A Jungle Out There

By GEORGE J. CHURCH

It seemed at times like a week out of the early 1992 campaign. Once again Bill Clinton was stumping New Hampshire in the winter (as well as Boston and Detroit). Just as he did two years ago, he sought to take the offensive against attacks on his character and credibility -- and in some of the same places; as the President strode through the lobby of the Sheraton Tara in Nashua, New Hampshire, aides reminded him of a 1992 press conference in the same hotel at which he confronted charges that he had dodged the draft. Now, of course, the questions are about Whitewater, but Clinton's strategy is pretty much the same as it was two years ago: accusing his accusers of trying to distract the public's attention from far more important issues like health care and crime. At a Democratic dinner in Boston, a red-faced Clinton shouted that instead of engaging in "honest political debate," the Republican Party "just stands up and says no, no, no, no . . ." Reporters counted nine noes, each punctuated by a slam of the presidential fist against the lectern.

This time, though, the strategy is not working quite so well. Clinton did draw sympathetic responses from the crowds he worked; at a "town meeting" in Nashua, a woman remarked that she thought Whitewater was for rafting and canoeing. But back in Washington the Administration was in a worsening bind, facing congressional hearings about Whitewater and the near-certainty of further revelations and unable to stop either. Special prosecutor Robert Fiske subpoenaed a 10th Administration official, senior adviser George Stephanopoulos, possibly to ask him what he may have said about Whitewater in phone conversations with Deputy Treasury Secretary Roger Altman. As for congressional hearings, Clinton knows they will become a highly partisan circus. But the prospect nonetheless puts him in a dilemma pithily summarized by his chief Republican congressional tormentor, Iowa Representative Jim Leach: "If ((Democrats)) provide me a hearing, their President is likely to be embarrassed. If they don't, they look like they have been complicitous in working with the Executive Branch to block full disclosure."

At week's end Senate majority leader George Mitchell and Republican chief Bob Dole struck a deal that enabled the upper chamber to approve the idea of a probe, 98 to 0. The resolution, however, left in doubt "the appropriate timetable, procedures and forum"; Mitchell and Dole are to work those out. The Senate also specified that the hearings must not interfere with Fiske's probe. That means witnesses will not be given immunity. Also, each phase of ^ the hearings will begin only after Fiske has completed the relevant part of his investigation. Thus even the first hearings -- into contacts between the White House and Treasury officials that have prompted suspicions of a cover-up -- will not begin for weeks or months. Any hearings into Whitewater proper -- that is, the Clintons' land deals in Arkansas -- would come much later.

In any case, Clinton probably has less to fear from the Senate than the House. His Republican critics in the upper chamber are led by Alfonse D'Amato of New York, whose qualifications to be a judge of ethics are, to put it mildly, dubious; D'Amato's ethics have often been publicly questioned. In the House, the Republican charge is being led by Leach, a far more moderate and responsible figure -- though he too is beginning to rumble darkly about unspecified bombshells. But in contrast to D'Amato's charges, which mainly feed off headlines, Leach's rumblings are based on some independent investigative work done by the staff he commands as ranking minority member of the House Banking Committee.

The committee has already scheduled a routine hearing, to be held on Thursday, to examine how well the Resolution Trust Corporation, an agency subject to congressional oversight, is doing its job of cleaning up the affairs of failed savings and loans. Leach wants to focus on the RTC's investigation into the affairs of Madison Guaranty Savings & Loan, which was once owned by James McDougal, a partner of Bill and Hillary Rodham Clinton in Whitewater Development Corp. To that end, Leach asked Banking Committee chairman Henry Gonzalez to summon 43 witnesses, including McDougal and his former wife Susan, another Whitewater partner, but Gonzalez has not done so. Instead, last week Gonzalez wrote the four witnesses he had invited that they need not answer any questions about Madison. The Democrats may thus frustrate Leach initially, but only at the price of triggering more accusations of stonewalling.

Leach has dropped some heavy hints as to what it is he wants to probe. He will try to establish evidence that RTC officials, so far unnamed, attempted to thwart or dilute efforts by Jean Lewis, an investigator in RTC's Kansas City, Missouri, office, to delve into Madison's affairs. If they did, those attempts were not fully successful. It was an RTC investigation of Madison, and a referral of its findings to the Justice Department for possible criminal prosecution, that helped start the Whitewater mess; the referral named the Clintons as possible, though perhaps unwitting, beneficiaries of illegal practices. And it was a series of contacts between Treasury officials and White House aides about that referral that heightened suspicions of interference.

But a separate investigation proposed by Brian McCormally, a veteran prober in the Treasury Department's Office of Thrift Supervision, may have been aborted by higher-ups. Leach has tried to call McCormally as a witness. Leach further wants to look at the records of 11 Arkansas financial institutions, trying to track money flows, some possibly through Whitewater, that might have been designed to deceive regulators about how bad Madison's financial condition was. If the Iowa Congressman cannot raise any of these matters Thursday, he seems sure to get a chance to do so later. More and more Democrats concede that whatever happens in the Banking Committee this week, an eventual broad investigation of Whitewater by House as well as Senate probers looks inevitable.

Meanwhile, an indirect clue surfaced to one of the most tantalizing Whitewater mysteries: why Hillary Rodham Clinton was so anxious to save on federal taxes owed by herself and her husband that she took deductions related to Whitewater that seem at best questionable (and that the White House is finally getting around to admitting may in fact have been excessive). The New York Times reported that beginning three weeks before Bill Clinton was elected Governor in 1978, and continuing through most of 1979, his wife speculated heavily in commodities, mostly betting on future cattle prices. Under the guidance of James Blair, a friend and lawyer for the Tyson poultry interests, Hillary reportedly made a profit of $100,000.

That does not quite fit Mrs. Clinton's carefully cultivated reputation as a preacher of a moralistic "politics of meaning" -- Saint Hillary the Commodity Speculator is an odd image -- but on the face of it there is nothing illegal about it. And though there have been charges that Governor Clinton was excessively favorable to the Tyson company -- for example, by being far less strict about the disposal of chicken wastes than environmentalists would have liked -- that could be explained on the simple ground that the company was the biggest employer in Arkansas. But the $100,000 was the first serious money the couple had ever seen; Hillary was then a struggling young lawyer, and her husband held offices -- as attorney general and Governor -- that in Arkansas paid niggardly salaries. It would be understandable if the Clintons treated their Whitewater investment largely as a much needed tax shelter.

A kind of grace note in this symphony of embarrassment was provided by the abrupt resignation of Webster Hubbell as Associate Attorney General, the No. 3 post in the Justice Department. Hubbell was a partner with Hillary Clinton in the Rose Law Firm of Little Rock and a golfing buddy of Bill Clinton. He is credited with galvanizing Justice lawyers charged with civil rights enforcement. But back in Little Rock he came under suspicion by the remaining Rose partners of having overbilled clients, padded expense accounts and caused Rose to swallow some expenses that should properly have been paid by Hubbell's in-laws, whom he represented in a patent-infringement case. Rose partners reportedly filed a formal complaint with the Arkansas Supreme Court's committee on professional conduct. Hubbell concluded that defending himself against those charges would take so much of his time that he could not do his job in Washington properly.

The charges against Hubbell are only marginally related to Whitewater -- one of the clients he is alleged to have overbilled is the RTC -- and Fiske has not yet decided whether to include them in his investigation. Hubbell's exit prompted some rueful reflections among Rose lawyers who once thought the prominence of many of the firm's alumni in the Clinton Administration could only boost their business. But they never anticipated the suicide of White House counsel and former Rose partner Vincent Foster, the departure of Hubbell and the suspicions of conflict of interest on the part of Hillary Clinton when she represented Madison while her husband was Governor.

Those developments have thrown such a glare of bad publicity on Rose that some of its lawyers have taken to holding briefcases in front of their faces as they enter the firm's Little Rock offices to avoid having their pictures appear on TV. As for Bill and Hillary Clinton, they made no effort to talk Hubbell out of quitting. Much as it must have hurt to see another old friend from Arkansas leave, the last thing they needed amid the Whitewater uproar was to face questioning about the ethics of a friend they had persuaded to stay.

With reporting by Laurence I. Barrett/Washington, Nina Burleigh with Clinton and Suneel Ratan/Little Rock