Plans Readied for Clinton Legal Defense Fund : White House: Money would help defray cost of attorneys representing the President in the Whitewater case and the sex harassment lawsuit.

White House officials are making plans to establish a legal defense fund to help President Clinton pay potentially ruinous attorneys’ bills arising from the Whitewater controversy and a sexual harassment lawsuit filed last week, officials said Monday.

While the President has not yet authorized creation of the fund, aides are attempting to determine how it might be structured and are exploring ways to insulate Clinton and his wife from the solicitation of money from potential donors.

Clinton faces hundreds of thousands of dollars in bills from two of the nation’s most expensive law firms, Williams & Connolly of Washington and Skadden, Arps, Slate, Meagher & Flom of New York, which have been hired to represent the couple.

Unlike some previous White House occupants, the Clintons do not have extensive private wealth. Their only income last year was Clinton’s presidential salary of $200,000 and about $55,000 in interest and investment earnings.

A top White House aide said that turning to private donors to underwrite the Clintons’ legal costs was probably unavoidable, even before former Arkansas state employee Paula Jones sued Clinton on sexual harassment charges Friday.

Defending that case and responding to the ongoing Whitewater investigation into the Clintons’ finances could push the couples’ legal bills as high as $1 million, according to estimates from some legal experts.

Senior Clinton aide Bruce Lindsey said that White House lawyers had determined that a sitting President may establish a private defense fund. “He has the same rights a citizen would or a member of Congress,” Lindsey said.

The only previous President known to have done so was Richard Nixon during the Watergate years.

Lindsey said the White House would not be involved in raising the money and he suggested that the fund could be structured as a sort of blind trust so the Clintons would not know the names of the contributors.

“I’m not sure if legally you have to do that but clearly that would be an option,” Lindsay told reporters before leaving with Clinton for a health care event in New York.

Another senior official said that White House Counsel Lloyd N. Cutler was trying to find a way to design a fund that would meet with public acceptance. Officials also are concerned about the difficulty of keeping the names of donors secret from the President and the press.

Cutler is expected to present a memo to Clinton on the subject this week.

“There is simply an attempt to try to outline what the various options are that are available to a President for the payment of his legal fees,” Lindsey said.

The Clintons’ primary private lawyer, David E. Kendall of Williams & Connolly, is coordinating their legal representation in all Whitewater-related matters.

Special counsel Robert B. Fiske Jr. is investigating the Clintons’ investment in Whitewater Development Corp., a northern Arkansas real estate project, and its purported links to a failed thrift, Madison Guaranty Savings & Loan.

Last week, Clinton engaged Robert S. Bennett of Skadden, Arps to defend him against Jones’ charges that Clinton made improper sexual advances during a state economic development conference in 1991.

Kendall and his associates have spent hundreds of hours since the first of the year combing through the Clintons’ investment records to ascertain the extent of the couples’ knowledge of Whitewater/Madison matters and in response to subpoenas from Fiske.

Bennett has indicated that he plans a scorched-earth defense against the sex charges, sparing no effort to investigate Jones’ past and her political motivations and testing novel constitutional theories of presidential immunity to civil damage suits. His hope is to get the case dismissed before it proceeds to the discovery phase, where Jones’ attorneys will be able to depose potential witnesses and introduce other evidence supporting their claims.