Crimes or misdemeanors? - Whitewater affair

DAVID Hale, a former Arkansas judge and one-time friend of Bill Clinton, accuses Mr. Clinton and others of urging him to defraud the Small Business Administration of $300,000, a felony. Mr. Hale has already pleaded guilty to various crimes, a fact that Mr. Clinton's supporters are quick to point out. But Mr. Hale's allegation is not the only legal problem facing this White House. In fact, Whitewater Independent Counsel Kenneth Starr must soon decide whether to pursue the Clintons and their staff on a host of potentially unlawful activities.

Obstruction of justice. Newsweek reports the FBI found Hillary Clinton's fingerprints on Rose Law Firm billing records discovered in the White House last summer. The records, subpoenaed by federal investigators in 1994, were not turned over until this January. The documents seem to show Mrs. Clinton provided legal advice on the Castle Grande real-estate scam, which cost the taxpayers nearly $4 million. Previously Mrs. Clinton said she had never heard of Castle Grande, she did not recall doing legal work on the project, she did not recall ever seeing the billing records, and she had no idea the records were in the White House.

Selling government jobs. In March we learned from published reports that in 1990, while running for re-election, Governor Clinton was handed a $7,000 campaign contribution from Robert Hill, an Arkansas banker. In response, Mr. Clinton allegedly said something like, "I don't guess you guys would have any problem with my appointing Herby [Branscum] to the highway commission." Mr. Branscum was Mr. Hill's partner. Messrs. Hill and Branscum were both indicted recently by Kenneth Starr for participating in an illegal scheme to help finance Mr. Clinton's 1990 gubernatorial election.

Tax fraud. James Stewart, author of Blood Sport, discloses, in part, the following:

In 1978, the Clintons deducted $10,131 from their taxes as an interest expense on their Whitewater property even though Whitewater paid much less than that amount in total interest that year. In 1979, the Clintons paid $12,490 toward Whitewater, deducting most of it as interest expense when, in fact, $2,900 was not. In 1980, the Clintons paid $4,350 in interest and $9,000 in principal toward Whitewater, yet they deducted the entire amount, including the principal payment, on their tax return.

In addition, John Hartigan, a former general counsel of Solomon, Inc., wrote in the Washington Times recently that the Clintons' 1984 and 1985 tax returns "improperly claimed a total of $5,133 in deductions for interest payments that the Clintons supposedly made themselves but that were actually made by Whitewater."

Bank fraud and mail fraud. Mr. Stewart reports that in 1987, after much delay, Mrs. Clinton produced a financial statement for the bank that was renewing their Whitewater loan. The statement apparently overstated the value of the Whitewater property.

If the seemingly false tax returns and financial statement were delivered by mail, such acts could constitute the additional crime of mail fraud.

Making false statements to federal investigators. The General Accounting Office (GAO) has raised the question whether former presidential aide David Watkins made false statements during the GAO investigation of the White House Travel Office firings. Mr. Watkins's handwritten notes and a draft memorandum reveal he fired the Travel Office staff at Mrs. Clinton's direction. Yet Mr. Watkins apparently gave contrary testimony to GAO investigators. Since Mrs. Clinton also told investigators she had no role in the firings, her testimony also contradicts Watkins's notes and memorandum.

Perjury and contempt of Congress. At issue is the truthfulness of testimony given under oath to the Senate Whitewater Committee by several Clinton officials and friends who seem to remember little about key dates, meetings, and events -- not to mention the failure to comply with congressional subpoenas in a timely fashion.

Misappropriation and fraudulent use of government funds for private gain. The late Deputy White House Counsel Vincent Foster and former Associate White House Counsel William Kennedy, among others, apparently worked on the Clintons' personal legal affairs while on the government payroll. Mr. Foster reportedly helped with the Clintons' Whitewater taxes and Mr. Kennedy participated in Whitewater-related strategy sessions with the Clintons' private counsel.

Government officials may not use government lawyers for private legal work. Nor may they solicit or accept a gift, such as free legal services, from their government lawyers, and those lawyers may not make such a gift of services to them.

The Clintons' supporters insist that they have done nothing illegal. But their criminal-defense lawyers are working overtime --and running up million-dollar legal bills. Why?

COPYRIGHT 1996 National Review, Inc.
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