Gore Assails ‘Panic’ Over Clinton Ozark Investment

Vice President Al Gore accused Republican leaders Sunday of exhibiting “political panic” by attacking President Clinton over his controversial investment in an ill-fated Ozark Mountain real estate venture.

But even as Gore defended the President, a prominent Senate Democrat joined GOP leaders in calling for the appointment of a special prosecutor to investigate the First Family’s ties to the owner of a failed Arkansas savings and loan.

At issue is whether some of the funds of Madison Guaranty Savings & Loan were used during the 1980s to pay then-Gov. Clinton’s political debts or were diverted to the Whitewater real estate partnership established by the Clintons and Madison Guaranty’s owner, James B. McDougal.

“Presidents can’t be seen to have any hesitation about any matter that concerns their propriety,” said Senate Finance Committee Chairman Daniel Patrick Moynihan (D-N.Y.) on NBC-TV’s “Meet the Press.” “Get it out--no holding back. If there are things that are embarrassing, turn them over even faster.”

Interviewed on CBS-TV’s “Face the Nation,” Gore said Clinton had already delivered “boxes and boxes” of his records on the real estate venture to Justice Department investigators and would turn over “every single shred” within a matter of days.

The Justice Department official in charge of the inquiry, Donald B. Mackay, is a career prosecutor with Republican credentials and unquestioned integrity, Gore said.

Gore insisted that Clinton and First Lady Hillary Rodham Clinton had done nothing wrong, and that no one has made any specific allegations of wrongdoing.

“What there has been is a series of political attacks,” he said, a comment that appeared to be aimed at Senate Minority Leader Bob Dole (R-Kan.) and other GOP leaders who have criticized the Whitewater investigation.

“I think there is a little bit of political panic about the fact that everything is going so well (for Clinton), and so they are unleashing these attacks on him.”

Responding to Gore’s statements, Dole said White House blunders have created much of the controversy over Whitewater, and he renewed his call for appointment of a special prosecutor.

“If the President and Mrs. Clinton have done nothing wrong, which may indeed be the case, they deserve to have their names cleared in a manner in which the public will have complete confidence,” Dole said in a statement.

Moynihan, while agreeing that Clinton is an honorable man, said the danger in withholding information or rejecting requests for a special prosecutor is that the White House will appear to be stonewalling on the issue.

“Why isn’t this all out in the open?” he asked rhetorically. “Do it. Come on. . . . Get some good lawyer working on that issue while we go ahead on other things.”

The conflicting assessments came as McDougal was quoted as saying he does not believe that the Clintons lost as much money on the Whitewater development as they claimed during the 1992 presidential campaign.

While acknowledging that he was relying only on his memory, McDougal told the Associated Press that he believed their loss on the 230-acre project was about $9,000, far short of the $69,000 cited by the Clintons.

McDougal insisted that the Clintons did nothing wrong, and he denied that he received any special benefits from his business dealings with them.

The failure of Madison Guaranty in 1989 cost the federal government $47 million to pay off depositors. McDougal was acquitted in 1990 of federal charges that he mismanaged the thrift and arranged sham transactions to drive up real estate prices.

In another report, the Associated Press said the law firm in which Hillary Clinton was a partner provided state regulators with a rosy picture of the S&L;’s prospects less than a year before federal regulators warned that it was on the verge of going broke.

An audit by the Federal Home Loan Bank Board in March, 1986, said some of the thrift’s assets seemed to have been diverted improperly to McDougal, its owner at the time, the wire service said.

The bank board report did not mention the Clintons or the Whitewater development, but it cautioned that risky land ventures and speculation in securities had brought the thrift to the brink of collapse.

This appraisal contrasted with a more optimistic evaluation of Madison Guaranty’s future provided to state regulators in mid-1985 by the Rose Law Firm. Hillary Clinton had been placed on a $2,000 monthly retainer by McDougal to work on getting state approval for a plan to attract more capital for Madison Guaranty.

The AP said correspondence on the issue indicated that her role was limited, with most of the legal work for the thrift performed by an associate, Richard N. Massey.