Clinton aide named by prosecutors Lindsey is called an unindicted co-conspirator

'I did nothing wrong'

Issue is concealing of cash withdrawals in '90 Clinton race

June 20, 1996|By Carl M. Cannon | Carl M. Cannon,SUN NATIONAL STAFF

WASHINGTON -- Bruce R. Lindsey, for many years President Clinton's closest adviser, has been named an unindicted co-conspirator by the Whitewater special prosecutor, a step that moves the scandal closer to the Oval Office.

Lindsey, who proclaimed his innocence yesterday, is expected to be accused by prosecutors of conspiring to conceal large cash withdrawals by Clinton's 1990 campaign for re-election as Arkansas governor. The prosecution move, revealed yesterday, puts Lindsey in the midst of the latest Whitewater trial, which began this week in Little Rock.

Prosecutors in that trial, which involves two bankers, will now be able to use testimony about Lindsey's conversations regarding the cash withdrawals. That testimony would otherwise have been deemed hearsay and thus inadmissible.

Lindsey has been one of Clinton's most industrious defenders, usually working behind the scenes to minimize the effects of Whitewater and other potential scandals and trying to keep them away from the president.

But yesterday, it was Clinton who was called upon to defend his longtime aide and fellow Arkansan. A planned photo opportunity turned into a defense of Lindsey's ethics.

Asked whether he still had "complete faith" in Lindsey, Clinton replied, "Absolutely."

"He was thoroughly investigated and not charged," the president added. "I've got lots of confidence in him. I'm confident he didn't do anything wrong."

Lindsey himself, normally taciturn and camera-shy, rushed to a driveway outside the White House after seeing a report of his case on CNN. There, he emphatically told reporters

that he was innocent of any wrongdoing in the latest Whitewater trial.

Lindsey also insisted that he would not leave his White House job. "I didn't offer to resign," he said. "I did nothing wrong. There is no reason or purpose for me to resign."

The latest crisis for the administration comes in a week when the Senate Whitewater Committee's final report questioned the integrity of Hillary Rodham Clinton and a House committee began looking into the White House's mishandling of FBI files. Privately, White House officials fear that the cumulative weight of the various ethical probes is the one variable that could derail their march to re-election and elect Bob Dole.

A labor lawyer and longtime Democratic official from Arkansas, the 48-year-old Lindsey is considered by other White House staffers to be the aide closest personally to the president. He is also, along with Chief of Staff Leon E. Panetta and George Stephanopoulos, one of the two or three most influential advisers on the White House payroll.

Lindsey travels almost everywhere with the president, enjoys the trust of Mrs. Clinton and is a sounding board on every domestic issue dealt with in the Oval Office, from airline safety to the 1994 baseball strike.

Lindsey's reputation for a level head -- and for scrupulous discretion -- is such that earlier in Clinton's administration, he was given responsibility for managing the White House damage-control efforts on a host of "character" issues swirling around this president, including Paula Corbin Jones' sexual harassment suit and some aspects of Whitewater.

Yesterday, however, when Lindsey was galvanized into action, it was to defend his own reputation. Minutes after Wolf Blitzer of CNN broadcast a report from the White House lawn, Lindsey raced down to the spot and began defending himself spiritedly.

The co-conspirator designation arose this week in the trial of Herby Branscum Jr. and Robert M. Hill. Both men have been indicted by the Whitewater grand jury on charges that they filed phony expense accounts to repay themselves and relatives for more than $13,000 in political contributions to Clinton in 1990.

They are also charged with failing to report to federal banking authorities large cash withdrawals by Clinton's campaign, which Lindsey served as treasurer.

According to the case prepared by the special prosecutor's office, $52,000 was withdrawn by Lindsey from the Perry County Bank on two occasions. In one of those instances, according to prosecutors, Lindsey wrote checks for $30,000 in cash, paid to selected Democratic community activists for sometimes shadowy get-out-the-vote efforts. But instead of writing one check, Lindsey wrote checks for $7,500 each.

Kenneth W. Starr, the Whitewater special prosecutor, alleged that the purpose of writing four checks was to skirt federal banking laws that require banks to report to the Internal Revenue Service any transaction of $10,000 or more.

Neil Ainley, former president of the Perry County Bank, has already pleaded guilty to violating this requirement. He is cooperating with Starr and is expected to testify in the latest Whitewater trial that he was told to do this by Lindsey.

That conversation appears to be at the heart of Lindsey's new troubles. Using it against Branscum and Hill would constitute hearsay testimony, a pitfall that can be avoided by naming Lindsey an unindicted co-conspirator.

This was the point Lindsey wanted reporters to understand yesterday -- that part of his troubles hinge on a technicality.

Pointing out that he later included all the expenditures on Clinton's campaign disclosure forms, Lindsey acknowledged that the reason he wrote four separate checks was to minimize the attention this would generate. But he said it wasn't the IRS he wanted to keep the information from, but rather Clinton's political opponents.

It was not clear from his remarks, however, how Lindsey believed Republican officials might have obtained IRS information.

Pub Date: 6/20/96

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