Objections to Whitewater Hearings Eased

With political pressures mounting on Capitol Hill, special counsel Robert B. Fiske Jr. told lawmakers Wednesday that he would not object to congressional hearings on the Whitewater controversy provided they are limited to the question of possibly improper contacts between White House aides and federal banking regulators.

Fiske went to Capitol Hill to ask Republican lawmakers to hold off on their calls for public hearings that he again said would interfere with his investigation. His plea came one day before senior White House aides were to go before a grand jury to answer questions about possible meddling in the Whitewater investigation.

The White House, Fiske said, was being “very responsive and cooperative” in handing over documents subpoenaed by his investigators. But he said that he remains deeply concerned about congressional hearings interfering with possible prosecutions stemming from his investigation.

In his first public comments on the case since his appointment as special counsel Jan. 20, Fiske also indicated after a meeting with two Republican senators that he had modified his objections to their demands.

While he would still “prefer that there be no congressional hearings,” Fiske said, he would not object to hearings on one narrow aspect--the meetings and other contacts in recent months between White House officials and regulators investigating the failure of Madison Guaranty Savings & Loan, a Little Rock, Ark., thrift that was owned by the Clintons’ partner in the Whitewater Development Corp.

Disclosure of those discussions raised the possibility that White House officials had tried to interfere with the investigation by regulators, and led to the forced resignation of White House Counsel Bernard Nussbaum.

Like Madison Guaranty, Whitewater--a real estate investment company--also failed, costing the Clintons $69,000, according to the White House. Fiske is looking into allegations that President Clinton may have benefited improperly from his association with James B. McDougal, owner of Madison Guaranty and a partner with the Clintons in Whitewater.

Fiske met for more than an hour Wednesday with Sens. William S. Cohen (R-Me.) and Alfonse M. D’Amato (R-N.Y.). D’Amato is the ranking Republican on the Senate Banking, Housing and Urban Affairs Committee. Afterward, Fiske told reporters that he expects to finish his review of the White House contacts within a few weeks and would have no objections after that to public hearings about those discussions as long as lawmakers did not take testimony or disclose evidence related to other aspects of his investigation.

The two senators said after the meeting that they are optimistic a compromise can be reached with Democratic leaders and that the hearings could go forward without interfering with Fiske’s investigation.

“We have assured the counsel we can conduct our oversight hearings in a manner which will not deter or preclude him from carrying out his responsibilities,” D’Amato said.

“We looked for a middle ground,” added Cohen, who said that Republicans were willing to cooperate with Fiske by giving him a “reasonable time frame . . . in which to conduct his investigation before there are open, public congressional hearings.”

Both he and D’Amato also reiterated that the Republicans would not seek to compel testimony with grants of immunity--a factor that helped result in the reversal of several convictions during congressional hearings on the Ronald Reagan Administration’s Iran-Contra scandal.

It is not clear how many Republicans would be satisfied with the prospect of Whitewater hearings focused as narrowly as Fiske wants.

Quoting from a letter that Fiske sent to congressional leaders Tuesday, Senate Majority Leader George J. Mitchell (D-Me.) said that public hearings of any type risk doing fatal damage to the investigation by disclosing information currently before the grand jury.

“We need to allow Mr. Fiske to do his job,” Mitchell said. He argued that the “demand for immediate hearings is clear evidence that the purpose is purely political . . . partisan politics at its worst.”

The Republicans, he added in an angry speech on the Senate floor, are trying to “seize upon Whitewater in a blatantly partisan effort to embarrass and weaken the President.”

But GOP lawmakers, noting that the Democrats turned aside similar arguments by Republicans as they launched numerous investigations of scandals during the years that Presidents Reagan and George Bush occupied the White House, confidently predicted that public pressure would eventually force the Democrats to give in.

“Obviously the majority does not want to have hearings now,” Cohen said. “But they are under pressure because of the double standard that is being applied to Republican and Democratic administrations.”

Cohen predicted that, as the “revelations start tumbling out, the Democrats will find . . . it politically impossible” not to agree to public hearings.

Republicans, he contended, “do not want to pillory the President or Hillary Clinton.” But he said that only full public disclosure can dispel “a cloud (that) is forming over the presidency.”

While Democrats in the Senate stood firm against any hearings, House Speaker Thomas S. Foley (D-Wash.) and other Democratic leaders met with their Republican counterparts to discuss a possible compromise. Republicans afterward sounded optimistic.

“We are not at an impasse right now,” said House Minority Whip Newt Gingrich (R-Ga.). “We made a little ground today with the Democratic leadership.”

“I’m optimistic,” said Rep. Henry J. Hyde (R-Ill.), chairman of the House GOP Policy Committee. “We don’t think they slammed the door in our face.”

Taking advantage of a House rule that gives the minority the right to call its own witnesses at committee hearings, the Republicans hope to take testimony from some 40 Whitewater-related witnesses at a Resolution Trust Corp. oversight hearing of the House Banking Committee March 24.

But Fiske indicated Wednesday that he would object to some of the witnesses appearing at that hearing. Democratic sources said it is doubtful that Committee Chairman Henry B. Gonzalez (D-Tex.) would call all of the witnesses requested by the Republicans. Even if he does, many of them are unlikely to appear because the Democrats on the committee have refused to agree to subpoena them.

In the meantime, as the White House continued to collect and turn over stacks of documents to investigators, Clinton told reporters that he has instructed the 10 Administration officials summoned to appear before a grand jury today to cooperate fully, “answer all the questions” and “be very open.”

Among the officials to testify are Nussbaum, the former White House counsel; Communications Director Mark D. Gearan; Margaret Williams, chief of staff to Mrs. Clinton, and Lisa Caputo, Mrs. Clinton’s press secretary.

The appearances of at least two other of Clinton’s senior aides, Bruce Lindsey and Harold M. Ickes, were postponed until later in the week, sources close to them said.

In a related development Wednesday, a second courier at the Rose Law Firm said that he believes a box of documents bearing the initials of the late White House Deputy Counsel Vincent Foster was shredded at the firm after Fiske’s appointment was announced on Jan. 20.

The courier, Clayton Lindsey, said last week that he could not recall whether he and fellow courier Jeremy Hedges destroyed the box of files before or after Fiske was appointed. The date could be important because Fiske’s investigation includes reviewing the circumstances of Foster’s apparent suicide last July.

Hedges told the New York Times on Tuesday that he and Lindsey were ordered to shred the documents after Fiske’s appointment. Lindsey, a roommate of Hedges, said in an interview with the Los Angeles Times on Wednesday that “to the best of our knowledge” the shredding took place after Jan. 20.

The Rose firm has denied that any documents belonging to Foster have been destroyed since Fiske’s appointment and says four witnesses at the firm are prepared to testify to that effect under oath. The couriers claim the box and files inside it contained Foster’s initials and documents they saw bore his signature.

Times staff writers William J. Eaton and David Lauter contributed to this story.

* CLINTON STRATEGY: His efforts to control debate do not succeed with ethical questions like Whitewater. A18