Clinton aides get subpoenas in S&L probe

March 05, 1994|By New York Times News Service

WASHINGTON -- The FBI served subpoenas on 10 senior White House and Treasury Department officials last night for testimony and documents related to their discussions about an inquiry into a failed Arkansas savings and loan.

Seeking to contain the political damage from the case, President Clinton met with Bernard W. Nussbaum, the White House lawyer, in the Oval Office last night to arrange Mr. Nussbaum's resignation.

In an extraordinary day in which the president and his aides battled a rising tide of bad news, White House officials said Mr. Nussbaum would step down from his post as early as today.

The Oval Office meeting capped a day in which Mr. Clinton and his staff maneuvered to limit the fallout from the disclosures of briefings on the savings and loan probe.

Earlier this week, the White House confirmed that senior Treasury officials had briefed Mr. Nussbaum and others on the status of a federal investigation in the failed savings and loan.

Mr. Clinton said he feared that the meetings had left an impression of impropriety, since they implied that the participants had been given access to sensitive information that would not be disclosed to anyone else connected to a federal investigation.

The subpoenas issued to some of the most senior aides to President Clinton, first lady Hillary Rodham Clinton and Treasury Secretary Lloyd M. Bentsen added a major new embarrassment.

The six White House aides subpoenaed to testify are Mr. Nussbaum; Bruce Lindsey, a senior adviser to Mr. Clinton; Harold M. Ickes, the deputy chief of staff; Mark D. Gearan, the communications director; Maggie Williams, the chief of staff to Mrs. Clinton, and Lisa Caputo, Mrs. Clinton's press secretary.

All were ordered to testify before a federal grand jury in Washington March 10.

A separate subpoena demanded that the White House surrender all documents and communications relating to contacts between the White House and Treasury Department officials about the savings and loan, Madison Guaranty.

In response, Joel I. Klein, deputy White House counsel, issued a memorandum ordering the White House staff not to destroy documents and information stored on their computers.

Howard Schloss, the Treasury Department spokesman, said that Deputy Secretary Roger C. Altman; department counsel Jean Hanson, and Josh Steiner, Mr. Bentsen's chief of staff, had been subpoenaed by the grand jury sitting in Little Rock, Ark.

Jack DeVore, a former Bentsen aide, was also notified that he must appear before the grand jury.

The jury is under the direction of the special prosecutor investigating the bank failure and the Clintons' investment in the Whitewater Co., a failed real estate venture in the Ozarks.

Becoming GOP issue

After poking for months at Whitewater's embers, the Republicans expressed new confidence that the missteps would finally force Congress' Democratic majority to undertake hearings. And, more dangerously for the White House, some Democrats began to echo them privately.

Before the latest round of criticism over his role in the Whitewater affair, Mr. Nussbaum had already been at the center of a series of White House political miscues, including the failed nomination of Lani Guinier to a top Justice Department post, the torturous search for an attorney general and the removal of files from the office of Vincent W. Foster Jr., Mr. Nussbaum's deputy, who committed suicide in July.

Officials said that history, coupled with Mr. Nussbaum's most recent actions, had left his position difficult to defend, especially after administration officials said that the unquestioned support of his political patron, Mrs. Clinton, was in doubt.

"If this was the first time in the barrel for him, maybe we could fight for him," a senior White House official said last night. "But xTC the third time is hard."

Earlier yesterday, Mr. Clinton refused twice to comment about Mr. Nussbaum's fate, a telling symbol in the Washington political lexicon.

Clinton upset

The president was said by aides to be particularly upset that the White House lawyer had not anticipated the sensitivity of his participating in the briefings with senior Treasury Department officials over the status of the federal investigation into the bankrupt Arkansas savings and loan.

That company, Madison Guaranty Savings and Loan Association, is now being scrutinized by Robert B. Fiske Jr., the special counsel who has been appointed to look into the role it played in the Clintons' investment in the Whitewater development.

Mr. Clinton Thursday expressed dismay that the briefings had taken place, but that only led Republicans in Congress yesterday to voice new complaints about the White House's conduct.

Three briefings

In addition to Mr. Nussbaum, only Ms. Hanson, the Treasury Department's general counsel, took part in all three of the briefing sessions. The two were the only participants in what White House officials have described as the most troublesome encounter, on Sept. 29.

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