Whitewater thrust parried by Cutler

July 27, 1994|By Susan Baer | Susan Baer,Washington Bureau of The Sun

WASHINGTON -- All the stars seemed to line up in the White House's favor yesterday as the curtain went up on Capitol Hill's long-awaited Whitewater hearings.

The administration's avuncular, white-haired trouble-shooter, Washington superlawyer Lloyd N. Cutler -- projecting the picture of moral rectitude and lawyerly precision -- staunchly defended the actions of White House and Treasury officials as they dealt with the unfolding Whitewater controversy last fall.

"There was no violation of any ethical standard," said Mr. Cutler, the first and only witness at yesterday's highly partisan daylong hearing by the House Banking Committee.

Republican lawmakers who had called for the congressional inquiry tried to portray the Whitewater affair as symbolic of the administration's disregard for public candor, accountability and ethics.

"Whitewater is about the arrogance of power," said Rep. Jim Leachof Iowa, the ranking Republican on the committee.

But the Republicans could not mount a concerted attack on th president and his White House staff because the hearing was severely limited by its narrow scope and five-minute rule on questioning by committee members.

The televised hearings, to continue tomorrow, examined only one small portion of the Whitewater affair: the possible interference by White House or Treasury Department officials last fall in a regulatory agency's investigation of a failed Arkansas savings and loan with ties to the Clintons. And there were no fresh revelations damaging to the White House.

Also, the hearing had to compete with other images in Washington that deflected attention from Whitewater. While the Democrats and Republicans engaged in the usual political pyrotechnics, the king of Jordan and the prime minister of Israel were in the majestic House chamber making peace and history.

"In our system, the president and Congress must cooperate on smaller as well as larger matters," said Mr. Cutler, leaving no doubt that he considered the substance of yesterday's House proceedings of comparatively little weight.

AMr. Clinton, the putative target of the Republicans' probe, spent the day basking in the reflected glory of the Middle East peacemakers, appearing indifferent to the Whitewater hearings. There was scarcely a mention of the president or Hillary Rodham Clinton during the proceedings.

Mr. Cutler, employed as White House counsel since March, conducted his own investigation of the contacts between administration and Treasury officials, and yesterday offered an analysis and defense of each of the conversations, saying he found "no evidence of any attempt to cover up anything at all."

He conceded that, in retrospect, it would have been better if many of the meetings had never occurred, and said he had taken steps to ensure that future contacts be beyond ethical question.

"I found there were too many people having too many discussions about too many sensitive matters," he said, "matters which were properly the province of the Office of White House Counsel."

In hindsight, Mr. Cutler said, "We did not meet as high a performance standard as we should have set for ourselves."

Indeed, some of the 20-plus conversations and meetings he described, though not criminal, are embarrassing to the administration, portraying a White House staff maneuvering to control potential damage from Whitewater.

Republicans acknowledged that there was no criminal activity ithe meetings in question but insisted that they were ethically improper and reflected on the administration's lack of candor.

"These hearings are about public ethics, pure and simple," said Mr. Leach, the leader of Congress' Whitewater inquiry. He called Whitewater "a metaphor for privilege, for a government run by a new political class which takes shortcuts to power with end runs of the law."

Cutler's bearing

Composed, confident and at times strident throughout hours of questioning by most of the committee's 51 members, Mr. Cutler stressed that no White House official attempted to influence decisions made by the Resolution Trust Corp., an independent agency under the purview of the Treasury Department, last fall.

The RTC recommended then that the Justice Department conduct a criminal investigation of Madison Guaranty Savings & Loan, a failed Arkansas thrift owned by James McDougal, the Clintons' business partner in the Whitewater land deal. The RTC referral mentioned the Clintons as possible beneficiaries of deals that could have caused Madison's costly collapse.

Mr. Leach said he recognized that, in the context of yesterday' events involving the Middle East, the House probe could appear to some as "much ado about a very small aspect of a very modest scandal."

But he said such questions were "not insignificant. What's at issue is whether or not the government operates with compete candor and whether any individual is above the law."

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