Whitewater land deal a dry hole for Starr Probe allegedly found no impeachable offenses tied to Clinton investment


WASHINGTON -- The report to Congress from the independent counsel -- whose inquiry began four years ago with an examination of a complicated land deal called Whitewater -- finds no offense by President Clinton in that area that would merit impeachment, lawyers with knowledge of the report's content said yesterday.

Investigations involving the White House travel office and the administration's use of FBI files also found no impeachable offenses, the lawyers said.

Parallels in conduct

But the report draws parallels between the president's conduct in the investigation of his relationship with Monica Lewinsky and the Arkansas aspects of the inquiry.

It was that argument eight months ago that gained independent counsel Kenneth W. Starr jurisdiction to investigate a possible cover-up of Clinton's relationship with the White House intern.

The report's section on impeachment charges -- obstruction of justice, perjury, witness tampering and abuse of power -- is grounded solely in Clinton's relationship to Lewinsky and his response to questions about it raised in a civil lawsuit, the lawyers said.

"It's fair to conclude that those other areas do not rise to the threshold of an impeachable offense," said John Bates, a former deputy independent counsel in the Whitewater inquiry.

Allies of the independent counsel said yesterday that the fact that the report will be largely silent on the first three years of the inquiry meant only that the prosecutors had discovered no impeachable offenses in the many areas long under investigation by both Starr and his predecessor as the Whitewater independent counsel, Robert B. Fiske Jr.

While Starr is required to submit a final report on all aspects of his inquiry to a special court, the filing of the impeachment report signals that after years of examination, those avenues of inquiry may soon close.

Investigators have spent four years examining whether the efforts by the President and Mrs. Clinton to suppress embarrassing details of their old financial dealings with the owners of a corrupt savings and loan association -- in particular, their investment in the Whitewater real estate development -- amounted to a criminal cover-up.

A federal grand jury in Arkansas completed a 30-month review of the matter in May by filing a criminal contempt indictment against Susan H. McDougal, one of the Clintons' business partners in the Whitewater land venture and an operator of the bank, the Madison Guaranty Savings and Loan of Little Rock.

The Arkansas phase of the investigation resulted in several criminal convictions, including those of McDougal and her husband, James; Jim Guy Tucker, the governor who succeeded Clinton; and David Hale, a former local judge, on fraud and other charges.

The convictions forced some recalcitrant defendants to

cooperate and provide new information about the Clintons, but now the testimony would come from convicted felons.

Starr has faced other hurdles. Susan McDougal refused to answer questions. James McDougal died in jail. Hale has come under a new inquiry for his finances. Tucker's cooperation was described as only moderately helpful.

Clinton and his supporters have long criticized Starr and his investigators for straying too far from his original jurisdiction.

The fact that the impeachment report will rely almost exclusively on the Lewinsky inquiry is almost certain to be seized upon by some Clinton supporters as evidence the independent counsel had no real case to make.

But supporters of Starr pointed to the focused nature of the report as a strong sign that Starr had conducted a fair investigation.

The inquiry was begun in January 1994 by Fiske. In August, a court panel refused to reappoint him, naming Starr, a former solicitor general under President George Bush, in his place.

On Aug. 5, 1994, the court instructed Starr to investigate whether crimes were committed "relating in any way to James B. McDougal's, President William Jefferson Clinton's or Mrs. Hillary Rodham Clinton's relationship with Madison Guaranty Savings and Loan Association, Whitewater Development Corp., or Capital Management Services," a firm controlled by Hale.

Hale had said Clinton asked him to make an improper federally backed loan, some of which wound up in a Whitewater account. The president has denied Hale's accusation.

Wide jurisdiction

The court order included a clause that said Starr also had jurisdiction to investigate serious crimes that may have been committed "by any person or entity developed during the independent counsel's investigation referred to above and connected with or arising out of that investigation."

Fiske had already expanded the inquiry to Webster L. Hubbell, a close friend of the president's and a former Arkansas law partner Mrs. Clinton's, on suspicion of stealing money from his former law firm and clients. Hubbell ultimately pleaded guilty to two felony counts of fraud and tax evasion.

In seeking jurisdiction to investigate the president's relationship with Lewinsky, Starr argued that efforts by Clinton's friend Vernon Jordan to find the former intern a job paralleled earlier efforts by the president's allies, including Jordan, to help Hubbell in exchange for silence.

Pub Date: 9/11/98

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