Clinton ally quits No. 3 position at Justice Dept.

March 15, 1994|By Lyle Denniston | Lyle Denniston,Washington Bureau of The Sun

WASHINGTON -- The fracturing of the close circle around President Clinton and Hillary Rodham Clinton continued yesterday, ending the short government career of their longtime friend and personal counselor, Webster L. Hubbell.

Mr. Hubbell, who is quitting as the No. 3 official at the Justice Department after 14 months overall in the administration, insisted in a three-page statement that his resignation had "nothing to do with Whitewater" but instead was due to a billing dispute with his former law firm in Arkansas.

Despite his claim that Whitewater was not the reason, he has been engulfed in the public debate over that affair for weeks.

He has been at the center of controversy since he came to town with the Clintons at the time of the inauguration last year. Conservatives have dogged Mr. Hubbell with criticism that continued up to his resignation.

Mr. Hubbell's leaving adds to the atmosphere of crisis at the top of the Clinton administration.

It also deepens the leadership troubles at the Justice Department, which recently lost its No. 2 official, Deputy Attorney General Phillip B. Heymann, amid policy and personality conflicts with Attorney General Janet Reno.

The departing associate attorney general will leave behind a sizable gap in White House influence over the Justice Department and its sometimes rigorously independent leader, Ms. Reno.

With Mr. Hubbell a constantly visible presence in departmental affairs, almost as a delegate from the president's inner circle, the White House policy and political agenda had a clear inside channel.

The Whitewater affair, in which Mr. Hubbell apparently had a role as a private lawyer, involves a long-past episode over a failed savings and loan association, land deals and money transfers involving the Clintons in their home state of Arkansas. He provided services to the federal government in the legal aftermath of the savings and loan association's demise.

The Associated Press said yesterday that the government might have paid twice for those services, with overbilling of about $30,000.

A federal grand jury also is looking into records involving a lawsuit against the savings and loan association by Mr. Hubbell's father-in-law, Seth Ward of Little Rock. That, too, figures in questions of a conflict of interest.

Mr. Hubbell's statement yesterday said it was his own decision to leave, after "a thoughtful weekend" pondering the move.

His stated reason for going was that his continued work at the department "will not be as effective" because of a highly visible squabble with his old law firm over a reported $1 million in fees and expenses.

The White House supported Mr. Hubbell's claim that he decided on his own to leave, thus seeking to dampen speculation that he may have been eased out as part of a White House effort to change the public perception of the Whitewater affair.

The public relations effort is being newly spearheaded by Lloyd N. Cutler, the veteran Washington lawyer and trouble-shooter.

Nussbaum forced out

Ten days ago, another top government lawyer with close ties to Mrs. Clinton -- the White House counsel, Bernard W. Nussbaum -- was forced to resign after revelations that he and other White House aides had been given briefings on an official investigation of the Whitewater affair.

And Vincent W. Foster Jr., a third high-ranking lawyer with professional ties as close to Mrs. Clinton as those of Mr. Hubbell, committed suicide last summer, leaving a note complaining of the pressures of Washington official life. Mr. Foster had been Mr. Nussbaum's deputy.

Mrs. Clinton, Mr. Hubbell and Mr. Foster all had been partners of the Rose Law Firm, a prominent fixture in the legal community of Little Rock, Ark., and now itself a focus of a special prosecutor's investigation of possible criminal wrongdoing in the Whitewater affair.

Mr. Nussbaum was not associated with the Little Rock law firm, but he has known the Clintons for years and had worked with Mrs. Clinton on Capitol Hill years ago.

The president has been as closely associated personally with Mr. Hubbell as Mrs. Clinton has been professionally. The two men often play golf together.

In a letter to Mr. Hubbell yesterday, the president spoke of his "profound sadness and regret" and praised his service at the Justice Department, saying Mr. Hubbell's accomplishments there "will outlast any interest in the private matters that have arisen from your prior law practice."

Reno saddened

Ms. Reno said she was saddened by Mr. Hubbell's departure, declaring that she did not believe the lawyer had done "a thing wrong."

But she said she had no facts and was basing that conclusion on "my judgment of his character."

In Little Rock, a former Whitewater partner of Mr. and Mrs. Clinton passed up an opportunity yesterday to say she thinks the Clintons have done nothing wrong in the Whitewater affair, the Associated Press reported.

Susan McDougal read a brief statement that declared that she and her ex-husband -- failed S&L owner James B. McDougal -- are innocent of any wrongdoing. Ms. McDougal said the investigation of Whitewater special counsel Robert B. Fiske Jr. is politically motivated, and then declined to answer questions at a news conference.

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