First Lady Accused Of Hiding S&L; Role Republicans Cite Law Firm Bill For Work On Madison Guaranty

Republicans on the Senate Whitewater committee Friday attacked the credibility of Hillary Rodham Clinton, contending that she had repeatedly misrepresented the extent of legal work she performed for an Arkansas savings and loan association that failed in 1989 at a cost of more than $60 million to taxpayers.

The savings and loan, Madison Guaranty, is at the center of several federal investigations, including one by the Whitewater independent counsel. Madison was owned and operated during the 1980s by the Clintons’ partner in the Whitewater land venture, and for the last two years investigators have been examining whether Whitewater or one of Bill Clinton’s campaigns for governor received any improper payments from the institution.

When questions arose during the 1992 presidential race about Hillary Clinton’s work on Madison’s behalf before a state regulator appointed by her husband, she and the Clinton campaign said she had done little or no work for the savings association.

But records have emerged from the savings and loan and from the Little Rock-based Rose Law Firm, where Hillary Clinton was a partner, that suggest she played a greater role in representing Madison.

This week Republicans on the Senate Whitewater committee began examining those records. One is a 1986 bill by the Rose firm that, the Republicans say, shows Hillary Clinton helped structure a land deal that federal examiners later found to have been a “fictitious transaction” intended to evade regulations limiting how much a savings association may invest in speculative real estate.

Because the committee has been reluctant to call Hillary Clinton to testify, her role was left to be defended Friday by a most unusual witness: Webster L. Hubbell. Hubbell was a partner of Hillary Clinton at the Rose firm before moving to Washington with the Clintons to become a senior official at the Justice Department.

He is now serving a 21-month prison sentence for bilking his clients and partners of $500,000.

Hubbell was questioned Friday about Hillary Clinton’s role because the deal the examiners have called a fictitious land transaction involved his father-in-law, Seth Ward, and was part of a larger deal that ultimately cost the savings and loan more than $1 million in losses.

With two federal marshals behind him, Hubbell repeatedly maintained that Hillary Clinton had played a small role in Madison affairs.

But after his testimony, the committee chairman, Sen. Alfonse D’Amato, R-N.Y., said he believed that Hillary Clinton had given “a grossly misleading account” of her work on Madison’s behalf.