Jury Investigates Payments Made To Whitewater Figure

Whitewater prosecutors are looking into payments to former Associate Attorney General Webster Hubbell from an Indonesian family that helped bankroll the Democratic Party, informed sources say.

The prosecutors also are asking questions about the firing of another key witness who testified against then-Arkansas Gov. Jim Guy Tucker and the Whitewater investment partners of President Clinton and his wife Hillary.

Hubbell - who pleaded guilty to bilking his law firm clients in Arkansas - spent Tuesday morning before a federal grand jury testifying about money he has received from business interests of Mochtar Riady. The Indonesian billionaire’s business empire is at center of the controversy over foreign-linked contributions to the Democratic Party.

Hubbell’s grand jury appearance was followed Tuesday afternoon by Don Denton, who last spring testified against Tucker and Jim and Susan McDougal. Tucker and the McDougals were convicted on fraud charges and Denton was fired as assistant manager at the Little Rock airport shortly afterwards.

Mrs. McDougal was moved Thursday from a county jail in Arkansas to a federal prison in Texas. She has been behind bars since Sept. 9 after a federal judge cited her for contempt for refusing to answer prosecutors’ questions about Clinton.

The grand jury appearances of Hubbell and Denton were described by lawyers and others who work outside the prosecutors’ office.

The U.S. affiliate of the Riady-controlled Lippo group hired Hubbell for five months in 1994 - while Hubbell was under investigation by Whitewater prosecutors but before he admitted to tax evasion and mail fraud.

Whitewater prosecutors also obtained records of Hubbell’s lobbying work for the city of Los Angeles before he went to prison. He was released to a halfway house this week.

Hubbell’s repeated memory lapses have been an obstacle to prosecutors investigating Whitewater. Hubbell has said that he is trying his best to recall details of his involvement in Whitewater-related matters, but is having difficulty doing so because 10 years have passed since many of the events.

Denton spent 3-1/2 hours before the grand jury.

The five political appointees overseeing the airport where Denton lost his job include Democratic National Committee vice chair Lottie Shackelford.

Airport manager Deborah Ledwell testified recently to the Whitewater grand jury about Denton’s dismissal.

Airport commission member Les Hollingsworth says Denton wasn’t fired because of the Whitewater investigation, but refuses to discuss the reasons, saying the commission cannot discuss personnel matters.

In Washington, meanwhile, former White House staffer Lisa Wetzel appeared Thursday at the federal courthouse where another grand jury is investigating the Clinton White House’s acquisition of FBI files on hundreds of former Republican officials.

Wetzl worked for Craig Livingstone, the former head of White House personnel security under whose watch FBI files were gathered on high-level officials from the Bush and Reagan administrations.

Livingston has testified that he didn’t know the files were being collected. Wetzl told congressional investigators in June that she may have informed Livingstone about the file-gathering. She declined to comment Thursday.