The Consortium



By Sam Parry

Though eclipsed recently by the Democratic foreign money story, the Whitewater scandal finally seems to be moving toward some closure. Independent counsel Kenneth Starr has reportedly stepped up the pace of the federal grand jury in Washington. And rumors are flying about the potential indictment of First Lady Hillary Clinton on some kind of obstruction charge. But what will really emerge from the long investigation remains as unclear as the Clintons' murky land deal begun 17 years ago.

Starr, an ambitious Republican who is known to covet a seat on the U.S. Supreme Court, finds himself in a bind, too. If he overreaches with legal actions against Bill and Hillary Clinton, Starr could destroy his reputation. He's already lost the second round of Whitewater trials in Little Rock against bankers with political ties to the Clintons. An even-more-high-profile loss against the First Lady could brand him as an inept partisan.

On the other hand, a failure to prove criminality by the Clintons or at least some of their senior White House aides would disappoint Starr's political constituency among Republican conservatives. He also would open himself to criticism over the length and expense of the investigation.

So far, the probe has won a handful of minor guilty pleas, including one from a former top Justice Department official Webster Hubbell who admitted cheating his former law firm on expenses. There also were three guilty verdicts against past Clinton associates: former Gov. Jim Guy Tucker, and Jim and Susan McDougal, the Clintons' Whitewater business partners. But none of the convictions directly implicated the Clintons.

The Whitewater scandal also suffers under the burden of great expectations. The controversy has been the subject of more than 60 days of Congressional hearings over three years. It has been press fodder for even longer, dating back to March 1992, when Jeff Gerth of The New York Times introduced the public to the issue in a dense front-page story that had only a moderate bounce during the Bush-Clinton presidential race.

Still, will Whitewater ever become Watergate II or will it be relegated to the category of much ado about nothing? Politics has made Whitewater a very tough question to answer.

Partisans Take Sides

Last June, as the two parties were preparing for their national nominating conventions, Sen. Alfonse D'Amato and other Republicans on the special Whitewater committee issued a final report concluding that Bill Clinton ran a White House tarnished by systemic ethical lapses and betrayals of the public trust.

"By July 1993, the Clintons and their associates had established a pattern of concealment with respect to the Clintons' involvement with Whitewater and the Madison S&L," the report declared. But this conclusion was drawn from just three examples -- the best known of which was Hillary Clinton's belatedly discovered Rose Law Firm billing records.

The Republicans also made an issue out of disputed allegations that several administration officials might have removed documents from the office of deputy White House counsel Vincent Foster the night of his death. The officials insisted they had only visited Foster's office to see if he had left behind a suicide note. But a White House guard recalled a box of papers being carried out.

But on the more dramatic question about the circumstances of Foster's death, the Republicans did not dispute the earlier police findings that Foster had committed suicide in Ft. Marcy park in Virginia. The Republicans, however, did suggest that Foster's concerns about the festering Whitewater problems might have provoked his suicide. Robert Fiske, the first Whitewater special counsel, blamed the suicide on Foster's depression about press criticism over his handling of the Travel Office firings.

By mid-1996, the gist of GOP's Whitewater complaint was that the White House had failed to disclose all relevant documents in a timely manner and offered deceptive testimony by some officials. The majority report focused most of its criticism on alleged conflicts of interest by Hillary Clinton while she was a partner in the Rose Law Firm in Little Rock during the 1980s.

In a minority dissent, the Democrats charged that the Republicans had been unable to prove that President Clinton had misused his office, so "the majority turned its attention to Mrs. Clinton's private law practice in Arkansas more than 10 years ago." Rallying to the Clintons' defense, the Democrats declared that "One after another, the partisan conspiracy theories about Whitewater ... have turned into dry holes."

Fools for Scandal?

Arkansas journalist Gene Lyons reached a similar conclusion in his book, Fools for Scandal. But Lyons put more of the blame on the Washington news media. By failing to approach the Whitewater tale with skepticism, the media fell into a frenzy of exaggeration that unfairly damaged the Clintons and misled the American public, Lyons argued.

"'The Clinton Scandals,'" wrote Lyons, are "the result of one of the nastiest and most successful political 'dirty tricks' campaigns in recent American history." The campaign, aided by Arkansas Republicans, has been coordinated "by right-wing organizations such as Floyd Brown's Citizens United, a California outfit called Citizens for Honest Government, Reed Irvine's Accuracy in Media, and evangelists Jerry Falwell and Pat Robertson," Lyons reported. That campaign was eagerly advanced by conservative news outlets, such as The American Spectator, The Washington Times and The Wall Street Journal's editorial page.

But the work of The Washington Post and The New York Times "in creating and sustaining the Whitewater hoax can hardly be overstated," Lyons stated. He cited Gerth's original Whitewater article as exhibit one for bad journalism.

In the article, Gerth implies, for instance, that Beverly Bassett Schaffer, while serving as Arkansas's Securities Commissioner in the mid 1980s, gave preferential treatment to Jim McDougal's Madison Guaranty Savings and Loan. The suggestion was that the favoritism was a way to repay Governor Clinton for her appointment, while she helped out Clinton's struggling business partner.

"After federal regulators found that Mr. McDougal's savings institution, Madison Guaranty, was insolvent, meaning it faced possible closure by the state, Mr. Clinton appointed a new state securities commissioner," Gerth wrote.

But Lyons found no correlation between Bassett Schaffer's appointment in January 1985 and the Federal Home Loan Bank Board report about Madison in January 1984, a year earlier. The reporter also quoted Walter Faulk, who was then director of supervision for the FHLBB in Dallas and denied that Bassett Schaffer or Clinton attempted to subvert normal procedures for coping with a troubled S&L.

"I know that was not the case," Faulk said. "I never saw her take any action that was out of the ordinary. Nor, to be perfectly honest, could she have gotten away with anything if she did. To my knowledge, there is nothing that she or the governor of Arkansas did or could have done that would have delayed the action on this institution."

Lyons argued that Gerth's story "bears almost no relation to reality." The Times article was the first time Bassett Schaffer "learned of Whitewater and the Clinton's business ties with Jim McDougal," according to Lyons. Gerth simply had taken Bassett Schaffer's account of events out of context and had ignored a lengthy explanation that she had supplied.

Because of Gerth's handling of the information, the "accepted" version of Bassett Schaffer's appointment became that Clinton named her as Securities Commissioner in order to conspire to "keep Madison Guaranty afloat regardless of the cost," Lyons noted.

The Republican report echoes Gerth's point of view by concluding that Bassett Schaffer indeed may have given preferential treatment to Madison Guaranty S&L. The evidence given by the Republicans, however, was a single phone call made in 1985 by Hillary Clinton, then representing Madison at Rose Law Firm. The two apparently discussed a Madison stock proposal that was never implemented.

According to Lyons, the Whitewater tale can be compared to the play in Mark Twain's Huckleberry Finn. The "king" and the "duke" dupe an Arkansas audience into attending the play, entitled the Royal Nonesuch, although it has no plot and no substance. They pull in the audience by posting the suggestive sign "Ladies and Children Not Admitted."

To Lyons, Whitewater is a scandal with no plot, only very suggestive teasers. Soon, we should learn whether it will have another run in the federal courthouse in Washington, D.C.

(c) Copyright 1996 -- Please Do Not Re-Post

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