WASHINGTON -- This week could bring the stormiest Whitewater weather the Clinton administration has encountered so far.
Hearings before the Senate Whitewater Committee will heat up with the long-awaited testimony of Bernard W. Nussbaum, the former White House counsel who is the key figure in the events that followed the 1993 suicide of deputy counsel Vincent W. Foster Jr. and who will likely be roughed up by Republicans on the committee.
At the same time, the House enters the fray. The Banking Committee will examine the tangle of Arkansas money and politics that is at the heart of the expanding Whitewater controversy and that has already led to numerous indictments.
Led by Rep. Jim Leach, an Iowa Republican, the House hearings will examine the failure in the late 1980s of an Arkansas thrift, Madison Guaranty Savings and Loan, with ties to President Clinton and Hillary Rodham Clinton. Madison's owner, James B. McDougal, and his former wife, Susan, were the Clintons' partners in the failed Whitewater real estate venture.
The central question is whether money from Madison was used illegally to prop up the couples' real estate deal, and whether the failure of Whitewater contributed to the collapse of Madison.
Also at issue is whether money from Madison, whose failure left taxpayers holding a $60 million bill, was funneled to Mr. Clinton's 1984 Arkansas gubernatorial campaign or used in other improper ways.
Mr. Leach, who said last year that Whitewater was about the "arrogance of power," will try to prove that Madison was used as a private piggybank for Mr. McDougal and his buddies, including Mr. Clinton, who, as Arkansas governor, was in a position to do favors for the businessman.
House Republicans have 330,000 pages of documents that were unavailable to them last year when they were the minority party ** and that, according to a Banking Committee aide, "give us a lot more idea of what was going on. It may show a motive for what the White House did later on in trying to prevent everything from coming out."
In an attempt to contain any potentially embarrassing revelations in the House hearings, the White House late last week released a stack of previously confidential documents.
The papers include the Clintons' answers to questions by federal investigators in which they state flatly that they were "passive investors" in Whitewater and did not benefit from it or from Madison.
But the documents also cast doubt on the Clintons' claim, made during the 1992 presidential campaign, that improper deductions their 1984 and 1985 tax returns were the result of simple error.
The Clintons deducted $5,133 in loan interest payments made by the Whitewater company, not them personally.
While they said they had been confused about who made the payments, the documents show they were clearly advised that the payments were made by Whitewater.
Democrats on the committee have protested what they have called "rigged" hearings, saying that only witnesses supporting GOP claims have been scheduled to testify.
Mr. Leach, who says Democrats will be allowed a separate day of hearings, plans to open his session today with bank examiners who will be questioned about the operation and failure of Madison.
At the request of Kenneth W. Starr -- the Whitewater independent counsel who has filed 21 charges against a dozen people, including Gov. Jim Guy Tucker of Arkansas -- the McDougals will not be called as witnesses.
Later, the committee will question investigators for the Resolution Trust Corp., the agency charged with the S&L cleanup, about criminal referrals it made that named the Clintons as "possible beneficiaries" of or "possible witnesses" to an alleged check-kiting scheme by Madison.
Republicans hope to prove that top RTC officials in Washington, acting on behalf of the Clinton administration, tried to impede an investigation by pressuring regional regulators to alter their conclusion that the Whitewater deal had caused losses at Madison.
But Democrats, in defending the administration, plan to introduce a letter in which a Republican U.S. attorney tells the FBI field office he does not believe there is a "prosecutable case" to be brought against the Clintons and perhaps not even against the McDougals.
Meanwhile, across Capitol Hill, the Senate's inquiry into the handling of Mr. Foster's office and papers after his suicide enters its fourth week, with Mr. Nussbaum expected to testify around midweek.
Mr. Nussbaum, the former White House counsel, has emerged as the pivotal player -- or as Sen. Paul Simon, an Illinois Democrat, has said, "the heavy" -- in the events surrounding Mr. Foster's death. He is likely to be grilled about why he was so determined to keep investigators away from Mr. Foster's files, and how he could have overlooked the torn-up note in Mr. Foster's briefcase that lamented political life in Washington.
