White House inflated minor scandal

March 09, 1994|By Susan Baer | Susan Baer,Washington Bureau of The Sun

WASHINGTON -- Whitewater, the controversy, no longer has much to do with Whitewater, the land deal.

In the past several weeks, the confounding and supremely unglamorous Ozark real estate venture the young Clintons entered into in the 1970s has exploded into a full-scale Washington political crisis that is now focused squarely on the possible abuse of power in the Clinton White House.

Until recently, Clinton supporters had dismissed the Whitewater controversy as inconsequential, arguing that, unlike Watergate and Iran-contra, this investigation focused on actions of a president that took place years before he entered the White House. That is no longer the case.

In fact, it is largely the administration's behavior in the past several months -- from the president's refusal last fall to answer questions about Whitewater to the revelation that Whitewater files had been removed from the office of deputy White House counsel Vincent W. Foster Jr. immediately after he committed suicide last summer -- that has continued to fuel the Whitewater story and suggest that the Clintons have something to hide.

Questions about the original land deal, and its ties to Madison Guaranty Savings & Loan, a failed Arkansas thrift, have all but faded to the inner sanctum of a special prosecutor's investigation in Little Rock. But questions about the administration's handling of the probe, including private meetings with Treasury Department officials and the possible shredding of documents, now loom large.

In fact, it was White House steps, or missteps, that led, late last week, to the most dramatic, damaging and embarrassing events to unfold in the Whitewater saga to date: the issuing of subpoenas to six top White House officials by the special prosecutor, Robert B. Fiske, and the forced resignation of the White House counsel, Bernard W. Nussbaum.

Even the White House, increasingly consumed by the Whitewater imbroglio, has finally caught on to the old Washington truism that a cover-up, or even the appearance of a cover-up, can be more dangerous than the crime.

"I'm cooperating," Mr. Clinton said yesterday. "I'm not doing what some people have done in the past. I am cooperating. I'm being open."

F: But the cloud over the White House has already formed.

Meetings and subpoenas

The Nussbaum departure and White House subpoenas -- a turning point in the Whitewater episode that moved the center of gravity away from Little Rock and straight to the White House -- were precipitated by the discovery that White House officials, including Mr. Nussbaum, held a series of highly unusual meetings with Treasury Department officials to discuss the Whitewater investigation.

At the first, and perhaps most improper, meeting, held in late September, Jean Hanson, general counsel at the Treasury Department, advised Mr. Nussbaum in his office that the Resolution Trust Corp. was referring the Madison/Whitewater matter to the Justice Department for a criminal investigation.

The referral, which was made about a week later, did not charge the Clintons with any wrongdoing or recommend them as targets of the investigation, but named them -- and the 1984 Clinton gubernatorial campaign -- as possible beneficiaries of Madison's misuse of funds.

The meeting was thought to be highly inappropriate since it is standard procedure for the RTC, an independent agency, and the Justice Department to keep a tight lid on requests for criminal investigation.

A second meeting, held last October in Mr. Nussbaum's office, had a much larger cast of characters. Mr. Nussbaum; the White House director of communications, Mark Gearan; and Bruce Lindsey, a senior adviser to Mr. Clinton who had been handling Whitewater questions, met with Ms. Hanson and two chief aides to Treasury Secretary Lloyd M. Bentsen. Mr. Gearan said the group discussed how to respond to press inquiries about Whitewater.

In addition to those gatherings, deputy Treasury Secretary Roger C. Altman, acting head of the RTC, revealed at a recent Senate banking committee hearing that he called a meeting last month with Mr. Nussbaum; Harold M. Ickes, White House deputy chief of staff; and Margaret A. Williams, chief of staff to Hillary Rodham Clinton. Mr. Altman, who has since recused himself from any DTC involvement in the Whitewater investigation, said he wanted to give a "heads up" to the White House on how the RTC would proceed on possible civil claims resulting from Madison's failure.

At a news conference Monday, Mr. Clinton raised the possibility of even further impropriety by admitting that he had been told about the regulators' request for a criminal investigation into Madison "sometime in October," before it was made public. Although Mr. Clinton has asserted that there's been no suggestion that any administration official has tried to influence the course of the investigation, he admitted that the meetings were a mistake.

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