Two of President Clinton’s top political advisers, Erskine B. Bowles and Thomas F. “Mack” McLarty, called business friends to line up financial help for Webster L. Hubbell at a time when he was coming under the scrutiny of Whitewater investigators, the White House said Tuesday.
McLarty, then White House chief of staff, told Clinton and first lady Hillary Rodham Clinton that he intended to be “supportive” and “to try to help” Hubbell at a time when their longtime friend was resigning his job at the Justice Department in March 1994, officials said.
Hubbell left the Justice Department after coming under investigation for defrauding his former law firm of nearly $500,000. He later served an 18-month prison term.
Officials said McLarty’s recollection of his conversation about Hubbell with the president is hazy, but added that he recalls that Hillary Clinton “acknowledged his comments and maybe thanked him” without saying much more.
McLarty and Bowles, Clinton’s current chief of staff, made the phone calls in an effort to find work out of concern for Hubbell, White House spokesman Lanny J. Davis said.
McLarty called Arkansan Truman Arnold, who hired Hubbell for unspecified duties.
Bowles, then chief of the Small Business Administration, called an investment banker and two lawyers on Hubbell’s behalf after a conversation with then-U.S. Trade Representative Mickey Kantor about Hubbell’s financial plight, said Davis.
Officials said those efforts resulted in no payments to Hubbell.
Independent counsel Kenneth W. Starr is investigating the payments made to Hubbell after he left the Justice Department.
Whitewater prosecutors, frustrated by Hubbell’s memory lapses in the probe of the Clintons’ finances, want to know whether any of the payments Clinton associates arranged for Hubbell were intended to buy his silence in the investigation.
To date, investigators have learned of more than $500,000 in payments to Hubbell from a dozen or so entities that year, including $100,000 from the Indonesia-based Lippo Group that is at the center of the campaign financing controversy.
The disclosure that the Clintons knew and perhaps tacitly sanctioned solicitations on Hubbell’s behalf is likely to fuel an investigation into whether the payments constituted hush money, officials said.
Hubbell was a law partner of Hillary Clinton’s at the Rose Law Firm and would have been familiar with work she did with the savings and loan owned by the Clintons’ partners in the Whitewater venture, James and Susan McDougal.
Hubbell is a central figure in several aspects of the Whitewater inquiry.
He and Hillary Clinton had some involvement in Castle Grande, a real-estate project that bank examiners said was founded on sham land sales and phony loans intended to enrich insiders at Madison Guaranty Savings & Loan.
Investigators are trying to determine whether Hillary Clinton deliberately tried to hide her involvement in the project, and whether Hubbell sought to conceal the record of her work on Castle Grande and other matters in removing files on them from the Rose Law Firm.
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