Investigators to seek files on land deal

December 22, 1993|By New York Times News Service

WASHINGTON -- Federal law-enforcement officials said yesterday that they would seek to examine files, removed from ** the office of White House aide Vincent W. Foster Jr. shortly after he killed himself last summer, on Arkansas land dealings of President Clinton and his wife, Hillary Rodham Clinton.

These officials, speaking on condition that they not be identified, said they were studying how best to proceed in a highly charged political atmosphere in which the White House, citing lawyer-client privilege, has suggested that the Clintons will try to keep the documents to themselves.

It is not yet clear how far the investigators are prepared to go in their quest for the files -- whether, for instance, they will rely on persuasion and political pressure on the White House or might try to vanquish the argument of lawyer-client privilege by seeking a subpoena.

Because the Justice Department has had no official comment on the matter, it is not even clear that the department's chief, Attorney General Janet Reno, has approved the effort to obtain the files.

Aside from the issue of whether the files should be turned over to the federal investigators -- who would presumably be under legal obligation to keep them secret, as is the norm in criminal inquiries -- Mrs. Clinton said yesterday that she saw no reason to make their contents public in response to requests of news organizations.

Investigators said the documents -- discovered in the office of Mr. Foster, the deputy White House counsel, after his suicide and subsequently removed at the direction of his superior, White House counsel Bernard W. Nussbaum -- could be relevant to two inquiries under way at the Justice Department.

One involves the circumstances of Mr. Foster's suicide, the other the collapse of a savings and loan association that was owned by James McDougal, the Clintons' partner in a money-losing real estate venture in Arkansas. But the precise nature of the documents has not been made public, and the investigators acknowledged yesterday that they had no way of knowing the files' exact contents.

The real estate venture was Whitewater Development Corp., in which the Clintons were equal partners with Mr. McDougal and his wife, Susan, although the McDougals put up a disproportionate share of the capital: $92,000, as against the Clintons' $68,000.

Federal investigators have turned up evidence that Mr. McDougal diverted money from his collapsing savings and loan, Madison Guaranty, to several of his real estate ventures, including Whitewater Development.

The savings and loan was seized by the government in 1989, at a cost to taxpayers of more than $60 million, and among the issues that investigators are examining is whether Madison Guaranty received favorable state regulatory treatment in the years beforehand, when Mr. Clinton was governor.

The White House confirmed in a statement issued Monday evening that presidential aides had removed records relating to the Clintons' investment in Whitewater after Mr. Foster's suicide on July 20 without telling federal authorities who were then investigating Mr. Foster's death.

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