Reno Begins Hunt for Whitewater Counsel : Inquiry: Attorney general is informally questioning colleagues about candidates. Former U.S. attorney is under ‘serious consideration.’

Atty. Gen. Janet Reno on Thursday launched what aides described as a highly personal search for a special counsel to investigate the role of President Clinton and his wife in the Whitewater real estate and banking affair, asking Justice Department colleagues about possible candidates for the job.

While some officials want a counsel to be selected by the end of the week, Justice Department sources cited the time-consuming inquiries that would have to be conducted for any potential conflicts in a prospect’s legal practice.

“You don’t want to pick the special counsel and then have the individual forced to withdraw because you find out he represented savings and loans in Arkansas,” one source said.

At the same time, one official said he would not rule out the possibility that Reno could make a selection this week.

Among candidates said to be under “serious consideration” are Dan K. Webb, a former Ronald Reagan Administration U.S. attorney. Webb caught attention with his dogged questioning of the ex-President in videotaped testimony during the Iran-Contra investigation.

“There’s also the retired-judge category,” said a department official familiar with the search. “But there’s concern about picking a person who can really hit the ground running and a retired judge may not fit that.”

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“They’ll probably pick a white male Republican over the age of 55, probably some retired judge,” said Victoria Toensing, a former deputy assistant attorney general. “That seems to be the image of what they’re looking for.”

The Clintons invested in the Whitewater Development Corp., an Ozark Mountain vacation resort, with a friend, James B. McDougal, and his wife, Susan, in 1978.

McDougal owned Madison Guaranty Savings & Loan, an Arkansas thrift that was seized by federal regulators in 1989 at a cost to taxpayers of at least $47.6 million. The real estate deal went sour as well and the Clintons, by their account, lost $68,900.

Critics have questioned whether the Clintons may have benefited improperly from the relationship or whether the savings and loan was permitted to operate longer than it should have because of friendship between the Clintons and McDougal.

Justice Department officials insisted Thursday that Reno had no advance knowledge that the White House would ask her to reverse her oft-stated position and name a special counsel, saying that she learned of the decision officially only 10 minutes before it was announced on television. Thus, she had no list of prospects at hand, one official said.

In Moscow, White House Press Secretary Dee Dee Myers said early Thursday that Clinton made the decision to seek a special counsel after conferring Tuesday night with First Lady Hillary Rodham Clinton and senior aides in Washington.

“The President slept on it overnight and decided to go forward,” Myers said.

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Lawyers interested in the job, including a former assistant attorney general during the Gerald R. Ford Administration, sent resumes to Justice Department acquaintances with the expectation that they would be sent on to the attorney general. Those who could cited their Republican credentials on the theory that Reno is unlikely to choose a Democrat.

One prominent Republican proposed the name of a well-known Florida attorney to a department official, but the name was not passed on because the individual was a longtime associate--and a one-time employer--of Reno.

Throughout the day, Reno informally sought information about potential candidates from officials who stopped by her office. In one case, when information she gleaned seemingly met with her approval, she asked the official who supplied it to contact the candidate in question to find out about his availability and interest.

While the search progressed, congressional Republicans on Thursday continued their calls for legislative investigations into the Whitewater affair. But Democrats remained cautiously optimistic that they could maintain enough party unity to quash those demands.

“By and large the members appear pretty satisfied with the special (counsel),” said one House leadership aide. But the aide added that if new revelations surface, “things could change on a dime.”

Appearing on several morning television shows Thursday, Rep. Jim Leach (R-Iowa), the GOP point man on the issue, insisted that congressional hearings are necessary to provide “full disclosure” for the public. “Hearings are a better way of letting the public understand,” he said.

Joe Pinder, an aide to Leach, said the Republican staff on the House Banking, Finance and Urban Affairs Committee would continue its own investigation into the tangled financial affair. He also said Republicans would seek to force a recorded vote on whether to conduct congressional hearings, either through the Banking Committee or a special select committee.

“Somebody will force a vote on this one way or the other, and you tell me who is going to vote against it,” Pinder said.

But aides to several freshman Democrats on the Banking Committee--considered by both the GOP and the House leadership as the most likely to support an independent investigation--said Thursday they will be satisfied with the appointment of a special counsel.

Doug Scofield, an aide to Rep. Luis V. Gutierrez, said the Illinois Democrat believes that “the idea of a special prosecutor is to take politics out of it. So why have a committee get involved?”

Republican strategists said their best chance to change that dynamic would come if further revelations raise new doubts about the Clintons’ behavior in the case.

Times staff writers John Broder and David Lauter contributed to this story.