Counsel Asks Congress to Avoid Whitewater Hearings : Ethics: Fiske argues that such sessions would pose a risk to his inquiry. Democrats use his plea to blunt GOP calls for investigations on the Hill.

With pressure mounting for congressional hearings into the Whitewater controversy, special counsel Robert B. Fiske Jr. Monday implored the legislative leadership to avoid such sessions because they would “pose a severe risk to the integrity” of his inquiry.

Fiske argued that Congress would want to interview the same witnesses, running the risk of “premature disclosures” and “tailored testimony.” He also said that congressional grants of immunity to witnesses would seriously undermine his efforts to conduct a full and impartial investigation.

Democrats immediately cited the Fiske plea as protection from the rising tide of Republican calls for open-ended congressional hearings into the legal and financial dealings of President Clinton and First Lady Hillary Rodham Clinton in Arkansas and the behavior of the Administration during the current investigation.

As Congress sparred over the Whitewater investigation, officials at the White House narrowed their list of candidates for White House counsel, with Lloyd N. Cutler, former counsel to president Jimmy Carter, and Harry C. McPherson Jr., who served as counsel to Lyndon B. Johnson, viewed as the leading contenders. A final decision is expected as early as today.

The appointee would replace Bernard Nussbaum, who submitted his resignation Saturday after a series of missteps on Whitewater and other matters.

In another day of furious fallout from the spiraling Whitewater controversy, aides throughout the White House complex combed through overflowing trash receptacles and computer files in search of material that might be covered under a Fiske subpoena.

Late last week Fiske subpoenaed nine current and one former Administration official to produce testimony and records related to several meetings between White House and Treasury officials about Whitewater. Acting White House general counsel Joel Klein instructed all White House officials to search for papers that might fall under the special counsel’s order.

Clinton acknowledged Monday that he was informed last October that he and his wife were under scrutiny in a federal investigation into the failure of an Arkansas savings and loan owned by James B. McDougal, a former business partner.

But he said he knew nothing of meetings between regulators and White House aides to discuss the status of the investigation into the failed thrift, Madison Guaranty Savings & Loan.

At an East Room appearance with Georgian leader Eduard A. Shevardnadze that was dominated by questions about Whitewater, Clinton insisted that he and Mrs. Clinton had done no wrong and repeatedly stressed his intention to cooperate fully with the special counsel’s investigation.

“We are not covering up or anything; we are opening up. We are disclosing,” Clinton said. “No one has accused me of any abuse of authority in office. . . . There is no credible evidence and no credible charge that I violated any criminal or civil federal law.”

He said that comparisons to the Watergate scandal that drove Richard Nixon from office are “hysteria” from partisan Republicans. And he pleaded with reporters to reduce the intensity of coverage of the spreading scandal.

The special counsel, in a move that at least indirectly benefits the White House, expressed in a letter to congressional leaders his “strong concern” about the possibility of hearings on the Whitewater scandal.

On Capitol Hill, Democratic leaders used the Fiske letter to rebuff increasingly strident Republican calls for congressional hearings.

Sen. Donald W. Riegle Jr. (D-Mich.), chairman of the Senate Banking, Housing and Urban Affairs Committee, quickly responded to Fiske’s letter, saying that his panel would “defer to your investigation” and conduct no hearings on the Whitewater scandal while it is under criminal investigation. House Banking, Finance and Urban Affairs Chairman Henry B. Gonzalez (D-Tex.) gave a similar response.

Republican lawmakers expressed outrage at what they called Democratic efforts to stonewall their attempts to conduct their own investigation. Senate Minority Leader Bob Dole (R-Kan.) threatened that Republicans would hold up the confirmation of Ricki Tigert, Clinton’s nominee to head the Federal Deposit Insurance Commission, until Riegle’s committee agrees to conduct hearings.

Rep. Jim Leach (R-Iowa), ranking minority member of the House Banking Committee, said in an interview that, while Fiske’s letter “looks thoroughly reasonable, its implications are chilling for the constitutionally mandated oversight responsibility of Congress and for free speech.”

Later, in a scathing speech on the House floor, Leach questioned Clinton’s ethical fitness.

“Whitewater is about the arrogance of power, political conflicts of interest that are self-evidently unseemly,” Leach said, adding that the White House handling of the scandal proved that “cover-ups can be as troubling as the crime.”

Leach said that the subpoenas issued by Fiske over the weekend showed that the focus of the investigation has shifted “from possible illegal acts committed by a President prior to taking office to possible illegal actions committed in office” and that “obstruction of justice is now clearly at issue.”

Times staff writer Paul Richter in Washington contributed to this story.