Counsel vows to question both Clintons under oath

January 21, 1994|By Lyle Denniston and Susan Baer | Lyle Denniston and Susan Baer,Washington Bureau

WASHINGTON -- Newly named special prosecutor Robert B. Fiske Jr., vowed yesterday to question President Clinton and Hillary Rodham Clinton under oath and look into the suicide of White House lawyer Vincent W. Foster, Jr., as part of a sweeping independent probe of the Clintons' ties to an Arkansas land deal and failed thrift.

Mr. Fiske, a 63-year-old Wall Street lawyer and former GOP federal prosecutor, went to work immediately after his appointment was announced yesterday. "There are no limits on what I can do . . . I think I have free rein to do what I think I have to do," he said.

His self-drafted "charter" is so wide-ranging that it raises significant potential for conflict with White House aides and the president's political advisers, if not with the Clintons themselves -- especially if the probe turns out to be prolonged.

The Clintons have insisted repeatedly that they did nothing wrong and broke no laws in their past dealings with what has come to be known as "the Whitewater matter."

Attorney General Janet Reno told reporters at a news conference to introduce the prosecutor that she was "very comfortable" with the scope of the investigation Mr. Fiske is planning.

"I want him to do everything he thinks proper and appropriate to make sure that he is truly independent . . . I do not expect to monitor him," he said.

The president and the White House were not told of his appointment, she said.

Yesterday, White House officials said the Clintons would cooperate with Mr. Fiske. Asked about his promise to talk to the Clintons under oath, White House press secretary Dee Dee Myers said, "He hasn't done it yet. We'll deal with that when it comes."

Republicans, who had been demanding an investigation by a special prosecutor, greeted the appointment with cautious praise.

Mr. Fiske, promising to "hit the ground running as fast as we can," took over from current Justice Department prosecutors the entire investigation they have been conducting into possible criminal acts of Arkansas companies.

The new prosecutor said he would recruit an entirely new team of "experienced prosecutors," reporting only to him, and would nTC operate with no budget ceiling.

The president asked the attorney general to name an independent prosecutor Jan. 12 but only to handle Whitewater -- the land development deal that first became an issue during the 1992 presidential campaign.

New questions about the deal were raised after Mr. Foster committed suicide in July and previously undisclosed Whitewater files were removed from his office by White House aides.

L Those have since been handed over to the Justice Department.

Mr. Fiske, however, decided -- with the full approval of Ms. Reno -- not to limit himself to Whitewater but instead to make a "complete, thorough and impartial" probe of the Clintons' relationship with these three firms:

* Madison Guaranty Savings & Loan, an Arkansas thrift headed by Clinton friend and associate James B. McDougal. It failed in 1989 after years of high-risk and questionable investments, costing the taxpayers as much as $60 million.

At issue is whether Mr. Clinton, as governor of Arkansas, allowed Madison to duck state banking regulations and continue operating in a shaky condition in exchange for personal financial gain and hefty campaign contributions. As a lawyer with the Rose Law Firm in Little Rock, Ark., Mrs. Clinton represented the thrift before state regulators at times.

* Whitewater Development Corp., the Ozarks land company in which Mr. McDougal, his former wife, Susan, and the Clintons became partners in 1978.

White House officials have said the Clintons lost nearly $69,000 on the deal. There is no evidence of any substantial monetary investment by the Clintons, and there is some suggestion that Whitewater was propped up with depositor funds from Madison.

In late 1992, the Clintons sold their interest in Whitewater to Mr. McDougal in a transaction handled by Mr. Foster.

* Capital Management Services, an investment fund headed by former Little Rock municipal Judge David Hale that made loans guaranteed by the Small Business Administration to socially and economically disadvantaged businesses.

Judge Hale, indicted last year on charges of making improper loans, said he was pressured by then-Governor Clinton and Mr. McDougal to make a $300,000 loan in 1986 to a marketing company owned by Susan McDougal. More than $100,000 of that money ended up in Whitewater's accounts.

In one of the more curious twists of the whole Whitewater matter, Mr. Foster killed himself in July, hours after a federal magistrate in Little Rock signed a search warrant authorizing a raid on Mr. Hale's office.

Mr. Fiske told reporters he will decide whether any crimes were committed and prosecute them if there were. Mr. Hale is already due to go on trial in March, and Mr. Fiske said he was taking that case over, too.

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