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House OKs Compromise on Whitewater Hearings : Congress: Leaders agree that ‘good faith’ effort will be made to discuss possibility of a probe. Senate passed similar resolution.

TIMES STAFF WRITER

Increasingly concerned about the appearance of a cover-up, House leaders reached an agreement Tuesday to negotiate “an appropriate timetable” for public hearings on the Whitewater affair.

The agreement, identical to a compromise worked out earlier in the Senate, later was ratified by the full House in a 408-15 vote.

The timing, scope and avenue for the hearings were left undecided, however, and senior Democrats said later that the compromise struck with GOP leaders did not necessarily mean that congressional hearings would take place--only that a “good faith” effort would be made in the coming weeks to agree on the terms.

“This is an agreement to discuss the possibility that hearings will be held . . . not a concession that hearings will be held,” House Speaker Thomas S. Foley (D-Wash.) told reporters shortly before the vote.

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However, with concern clearly growing among rank-and-file Democrats that opposition to hearings might be perceived as an attempt to withhold information from the public, many lawmakers said they thought that a congressional probe was inevitable now that the House has joined the Senate in calling for one.

The resolution calls for Congress to investigate “all matters related to the Madison Guaranty Savings & Loan Assn., Whitewater Development Corp. and Capital Management Services Inc.,” a fund operated by David Hale, who claims he made improper loans to then-Gov. Clinton and Mrs. Clinton. The resolution was adopted only hours after Deputy Treasury Secretary Robert Altman became the eighth senior official to testify before a federal grand jury in Washington.

Whitewater special counsel Robert B. Fiske Jr. was expected to question him later on his discussions with White House aides about the Resolution Trust Corp.'s investigation of Madison Guaranty, the now-defunct Arkansas savings and loan owned by James B. McDougal, one of Clinton’s partners in the Whitewater land venture. Altman, in addition to his role as deputy Treasury secretary, also was acting head of the RTC when the meetings occurred.

The grand jury is one of two--the other will be sitting in Little Rock--that Fiske is using to try to unravel a web of financial arrangements linking the bankrupt thrift to the Clintons through their failed real estate investments in the Whitewater venture.

The grand jury in Little Rock will probe allegations that depositors’ funds were transferred improperly from Madison to Whitewater during the 1980s and may also have been used to help retire then-Gov. Clinton’s campaign debts. The jury in Washington is investigating suspicions that Administration officials may have sought to delay or derail the RTC probe.

Leaving the courthouse after his testimony, Altman said he had laid out “all the facts” in the Whitewater case before the grand jury and stood “ready to do the same in any congressional inquiry.”

Earlier Tuesday, the Treasury Department released a letter in which Altman again revised upward the number of contacts he had with the White House about issues related to Madison Guaranty. The revision was the third since Altman first testified on the issue before the Senate Banking Committee on Feb. 24.

Altman said he had more talks about whether to disqualify himself from the case involving Madison than were revealed in a letter released last Friday by Alfonse M. D’Amato of New York, the senior Republican on the Senate Banking Committee.

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According to the latest letter, the talks occurred at an earlier-disclosed Feb. 2 meeting with White House aides. A few days later, Altman also spoke by phone with White House Chief of Staff Thomas (Mack) McLarty about disqualifying himself.

The March 21 letter also shows Altman informed Clinton’s deputy chief of staff, Harold Ickes, about his plans to step down as acting head of the RTC. That occurred on Feb. 23, the night before Altman announced the decision.

About the same time, Altman said: “I literally bumped into” former White House Counsel Bernard Nussbaum, who told the deputy Treasury secretary about the Administration’s plans to nominate a permanent head of the RTC.

“I have done my best to recall every communication with White House staff on anything which could be connected to this matter,” said Altman, who eventually disqualified himself from the Madison Guaranty case on Feb. 25.

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In the wake of the House hearing vote, Foley said that he and House Minority Leader Robert H. Michel (R-Ill.) would meet privately in the coming weeks to try to agree on a framework and timetable for congressional hearings.

But he and other Democrats warned they would not consent to hearings if it looked like they might turn into a partisan show trial at which Republicans will air unproven allegations in order to embarrass the President or stall action on health care and other legislative matters.

“While we cannot and should not ignore Whitewater, neither can we allow it to flood the chamber,” said Majority Leader Richard A. Gephardt (D-Mo.). “We have an obligation to ensure that our three-branch government does not become a three-ring circus.”

However, it was largely to avoid a potentially embarrassing spectacle that the Democrats agreed to enter into negotiations with the Republicans over the terms for the hearings in the first place, lawmakers said privately.

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“This agreement has less to do with any notion that Whitewater hearings are necessary than it has with getting the issue away from Henry,” confided one Democratic source, referring to House Banking Committee Chairman Henry B. Gonzalez (D-Tex.).

Foley acted after Gonzalez abruptly canceled a committee hearing that Republicans had hoped to use to air concerns about Whitewater and sent an abusive and personally insulting letter to the panel’s mild-mannered ranking Republican, Rep. Jim Leach of Iowa.

“We all know that Henry’s behavior is sometimes a bit quirky,” another source said. But this time his behavior was becoming something of an embarrassment for the leadership because it was “creating the misimpression that Democrats were trying to cover something up,” the source added.

“Henry’s tactics . . . put the (Democrats) behind the psychological Eight Ball” and appeared to be one reason why the leadership abruptly turned around and dropped its opposition to hearings, agreed Leach.

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