Case against Clinton's 2 banker friends goes to jury Misuse of funds charged in Whitewater trial

July 26, 1996|By LOS ANGELES TIMES

LITTLE ROCK, Ark. -- The criminal case against two Arkansas banker friends of President Clinton went to a jury yesterday after W. Hickman Ewing Jr., an associate Whitewater prosecutor, charged that the pair had misused their institution's funds for political purposes.

Summing up his case in the 6-week-old trial, Ewing told jurors that Perry County Bank co-owners Herby Branscum Jr. and Robert M. Hill curried favor with Clinton as governor in 1990 by misapplying $13,200 in bank funds for campaign contributions.

But defense attorney Dan Guthrie said in his closing argument that "these men did nothing wrong."

Guthrie cited videotaped testimony on their behalf by Clinton and live testimony by White House Deputy Counsel Bruce Lindsey, who was Clinton's campaign treasurer when he was re-elected governor in 1990.

Ewing and Guthrie also took opposing viewpoints on Neal T. Ainley, former president of the bank, who claimed that at the direction of Branscum and Hill he omitted filing federal reports on $52,500 in cash withdrawals by the Clinton campaign from its account at the bank.

Federal law requires banks to submit reports to the Internal Revenue Service, known as currency transaction reports, whenever a customer deposits or withdraws $10,000 or more in cash. The law is aimed at curbing money-laundering and misuse of banks by drug traffickers.

In addition to misapplication, Branscum and Hill are charged with violating the law on the transaction reports, based largely on Ainley's testimony for the prosecution that he acted at their behest.

Late yesterday, U.S. District Judge Susan Webber Wright dismissed jurors for the night and ordered them to resume deliberations this morning. The jurors are not sequestered.

In a plea agreement last year with the office of Whitewater independent counsel Kenneth W. Starr, 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.

Ewing, in defending Ainley, attacked the credibility of Lindsey, Clinton's most trusted aide for nearly two decades.

Lindsey, who testified as a defense witness last week, was classified as an unindicted co-conspirator by the prosecution.

Pub Date: 7/26/96

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