May 30, 1996 in Nation/World

Whitewater Won’t Soon Recede Senate Report Due On Same Day Next Trial Opens In Arkansas In June

Washington Post
 

If President Clinton is wondering how uncomfortable the summer might be following the resounding Whitewater convictions issued here this week, he need only consult his calendar for June 17.

On that Monday, a special Senate committee is scheduled to issue a scathing report on Whitewater and the White House’s handling of the issue. Also that day in this state capital, a trial is to open that is likely to renew questions about improper financial transactions by Clinton associates while Clinton was governor of Arkansas in the 1980s.

For Clinton, the June coincidence is an unhappy one, unhappier still in an atmosphere of heightened attention to Whitewater and its many remaining subplots. Democrats and Republicans from Washington to Little Rock and beyond agreed Wednesday that the convictions of former Clinton business partners James and Susan McDougal will redouble the scrutiny this summer of Whitewater threads that might have been largely ignored had the verdicts gone another way.

“You will have a Chicken Little syndrome, with people scurrying around, not knowing what these charges relate to, and that will send a certain amount of dust up in the air,” said Richard Ben-Veniste, counsel to the Democratic minority on the Senate committee.

Michael Chertoff, his Republican counterpart, said the verdicts will reverberate for weeks. “It sharpens public understanding” of the Whitewater saga, Chertoff said. “The lesson of this jury is that people do understand complicated financial transactions. There was no smoking gun here, but there was a loud bang.”

As the full force of the jury’s 24 guilty verdicts sank in Wednesday, Clinton aides and Republican strategists considered the months until the presidential vote, a time during which the White House will be peppered by the Senate committee’s report, the next Little Rock trial, a fight with the House over White House travel office records, the Paula Jones sexual harassment complaint and a fresh inquiry into the travel office firings by independent counsel Kenneth W. Starr.

By early next week, Starr’s office will turn over to the Senate Whitewater committee information from an FBI fingerprint analysis of billing records that detail Hillary Clinton’s legal work for a savings and loan owned by James McDougal. The committee, like Starr, is attempting to unravel how these records mysteriously appeared on a table in the White House residence, 18 months after they were subpoenaed.

There will be renewed publicity when the McDougals and co-defendent Jim Guy Tucker, the Arkansas governor who is resigning following his conspiracy conviction, are sentenced by U.S. District Court Judge George Howard Jr. Howard is expected issue sentences within two months. He is also expected to rule by the end of June on whether a videotape of Clinton’s testimony in the McDougal-Tucker trial will be released to the public. Only transcripts have been available so far.

Clinton’s testimony was a dramatic punctuation in the first Whitewater trial, and he might testify again for the defense, this time for Herby Branscum Jr. and Robert M. Hill, co-owners of a small-town bank in Arkansas who go on trial in June.

Starr has leveled conspiracy and fraud indictments against Branscum and Hill for allegedly diverting bank funds to Clinton’s 1990 race for governor and then attempting to hide the transactions from federal regulators. Branscum was a long-time Clinton friend and appointee to the powerful state highway commission. Hill was a Clinton appointee to the state banking board.

Dan C. Guthrie Jr., Branscum’s attorney, said Wednesday from his Dallas office that the connections between the defendants and Clinton might be even clearer than they were in the first Whitewater trial.

“It’s not going to be a direct, hard run, but it is my firm belief that (Starr’s team) will put on trial, vicariously, the 1990 campaign and the president himself,” Guthrie said. “To the extent that the public’s interested in the president’s involvement, this clearly has much more factual involvement than Tucker-McDougal.”

While the public “spin” wars continue - the White House Wednesday was trumpeting supportive comments by jurors about Clinton’s credibility as a witness - there will be behind-the-scenes developments that could prove troublesome for the president.

For instance, W. Ray Jahn, who led the prosecution in the first trial, hinted this week that Starr’s office might approach the McDougals or Tucker to win their cooperation in return for possible lighter sentences.

Tucker and Clinton, frequent rivals in Democratic circles here, spoke by telephone Tuesday night after the verdicts. The president called the governor to express his sympathies, the White House said.

Starr and some Senate Republicans are interested in reviewing any communication between the two about the Clintons’ failed Ozarks land venture or related federal inquiries over the past four years. Recently released documents show Clinton instructed then campaign-aide Susan Thomases to call Tucker in 1992 when a New York Times reporter began looking into the Whitewater investment.

In October 1993, Tucker met with Clinton at the White House. Both men said they discussed state government issues.

The meeting occurred several weeks after David Hale publicly said Clinton and Tucker pressured him to make illegal loans from his federally backed lending firm. It was shortly after the White House learned federal investigators wanted the Justice Department to look into real estate deals involving Tucker and the McDougals.

MEMO: Cut in the Spokane edition.

Cut in the Spokane edition.


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