Clinton’s Counsel Nussbaum Resigns : Staff: President accepts White House lawyer’s letter with ‘deep regret’ as search begins for successor. Talks on Whitewater-related inquiry capped series of political gaffes.

White House Counsel Bernard Nussbaum resigned Saturday, bringing to an end a yearlong tenure marked by controversy and accusations that his zealous advocacy of Bill Clinton’s interests had compromised the President’s political standing.

In a letter released by the White House, Nussbaum defended his performance, saying his critics “do not understand, nor wish to understand, the role and obligations of a lawyer, even one acting as White House counsel.” Because of that, he wrote to Clinton, “I now believe I can best serve you by returning to private life.”

Nussbaum said he will stay on the job through April 5 to allow time for selection of a successor.

The departure of the 57-year-old former New York litigator was precipitated by the controversy surrounding the Clinton Administration’s handling of questions related to the Whitewater land deal in Arkansas.

Late Friday, Nussbaum and eight other Administration officials were subpoenaed at Whitewater special counsel Robert B. Fiske Jr.’s request regarding White House contacts with Treasury Department officials about their investigation into the matter.

Earlier in the week, it had been revealed that Nussbaum and other White House staff members met with Treasury Department officials last fall to discuss the inquiry.

White House officials and associates of the Clintons already have begun a search for Nussbaum’s replacement. Among those believed to be under consideration is James Hamilton, a Washington attorney who represents the family of Vincent Foster, the White House deputy counsel who died in an apparent suicide last summer.

Joel Klein, who followed Foster as deputy counsel, has assumed many of Nussbaum’s duties for now, particularly those involving oversight of White House relations with the Whitewater investigation.

In his letter accepting Nussbaum’s resignation with “deep regret,” Clinton praised his aide, complimenting him for his role in helping select Supreme Court Justice Ruth Bader Ginsburg, Atty. Gen. Janet Reno, FBI Director Louis J. Freeh and the more than 60 judicial nominations the Administration has made so far.

“During your tenure, this Administration named the highest percentage of women and minorities to the federal judiciary in history,” Clinton wrote. “These judges and justices will leave a lasting imprint on our case law, and their places on the federal bench will be clear and abiding signs of encouragement to those long excluded from administering our system of justice.

“They are pioneers, and yours was the lamp that lit their way.”

Despite Clinton’s warm words, many officials within the White House have long believed that Nussbaum’s definition of his job clashed with the culture of Washington in a way that frequently created more problems for the Administration than it resolved.

The triggering incident for Nussbaum’s resignation was the storm of criticism that broke last week over meetings he attended in which White House aides discussed aspects of the Whitewater investigation with officials of the Treasury Department, which is investigating a defunct savings and loan once owned by former Clinton associate James B. McDougal.

McDougal was the Clintons’ partner in the Whitewater real estate deal, and one of the prime questions in the continuing investigation of the matter is whether money from McDougal’s savings and loan was used in any way to benefit then-Gov. Clinton.

The meetings between White House and Treasury Department aides, critics charged, could have been used by the White House to try to interfere with the ongoing investigation by a Treasury division known as the Resolution Trust Corp.

Participants in the meetings deny any such motive, asserting that the sessions were innocent. But even Clinton has conceded they raise a problem of appearances.

And that, in a nutshell, was much of Nussbaum’s problem.

In a city where political appearance can assume greater importance than underlying substance, Nussbaum frequently seemed heedless of both politics and appearances, pursuing his client’s rights with a fixed determination to uphold them to the fullest, regardless of cost.

That determination became most apparent after the death of Foster, when Nussbaum forbade police investigators to examine papers in Foster’s office until he had sorted them and made his own determination of what was relevant and what was not.

That procedure, while legally sound, raised suspicions among Clinton’s critics that Nussbaum was trying to hide something--suspicions that deepened months later when reporters discovered that among the papers Nussbaum did not turn over to police were some relating to the Whitewater matter.

Those papers were subsequently subpoenaed and turned over to Fiske, who is investigating the real estate affair and has indicated his intention to also examine the circumstances of Foster’s death.

At other times, Nussbaum’s disregard of political realities had less to do with his legal judgment. The prime case in point involved the appointment of C. Lani Guinier to head the Justice Department’s civil rights office. Nussbaum had responsibility for reviewing Guinier’s writings--including some controversial ideas on voting rights--but failed to realize the political storm they would cause and did not bring them to Clinton’s attention.

The result was a political disaster in which Clinton, eventually, had to abandon his old friend’s nomination, alienating both her and many of his black supporters.