Clinton aide denies hiding cash for '90 campaign No illegal withdrawals, Lindsey testifies

July 17, 1996|By LOS ANGELES TIMES

LITTLE ROCK, Ark. -- Senior White House aide Bruce R. Lindsey took the witness stand yesterday to deny charges that he illegally hid cash withdrawals from President Clinton's 1990 gubernatorial campaign bank account.

"No, sir, I did not," Lindsey, Clinton's trusted aide for nearly two decades, said when asked if he had suggested to Arkansas bank officials that reports required by federal law be withheld from the Internal Revenue Service.

Lindsey leaned forward and peered intently at the jury as he testified for nearly five hours in the latest Whitewater trial.

Although Lindsey has not been charged, prosecutors who are trying Perry County Bank co-owners Herby Branscum Jr. and Robert M. Hill have designated him as an unindicted co-conspirator so that testimony about his alleged conversations could be introduced, according to defense attorneys.

Prosecutor W. Hickman Ewing Jr., who works for independent counsel Kenneth W. Starr, told jurors Lindsey was "a middleman" in the failure of Branscum and Hill to file currency transaction reports with the IRS after Lindsey withdrew $52,500 in cash as Clinton's 1990 campaign treasurer.

The IRS requires banks to file reports on all cash deposits or withdrawals of $10,000 or more.

Lindsey, called as a defense witness, contradicted testimony by former Perry County Bank President Neal T. Ainley, the prosecution's star witness. Ainley has said that he did not file the required IRS reports because he knew, or was told by others, that Lindsey did not want them filed.

In a plea agreement with Starr's office, Ainley won a reduced sentence of two years' probation, a $1,000 fine and 416 hours of community service after pleading guilty to two misdemeanors.

Minutes after taking the witness stand, Lindsey, who is deputy White House counsel, was led through a series of questions by Dan Guthrie, Branscum's attorney. He denied conspiring with Ainley, Branscum and Hill.

Lindsey acknowledged that on May 25, 1990, he withdrew $30,000 in cash from the campaign's account, writing four checks for $7,500 each. He said that he did so out of "paranoia" that a clerk could discover a single $30,000 withdrawal and feed the information to political opponents, inspiring a charge that the Clinton campaign was trying to "buy votes."

Pub Date: 7/17/96

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