Sense of Relief Felt at White House After Initial Phase of Fiske’s Probe : Whitewater: But feeling may be short-lived. His inquiry is continuing, congressional hearings are scheduled and an internal review is launched.

There was relief but no jubilation in the White House at news Thursday that Whitewater special counsel Robert B. Fiske Jr. would not seek indictments in the Washington phase of his investigation. And even the relief is likely to be short-lived.

The President, his wife and his senior staff still face a protracted investigation into a variety of matters in Arkansas and Washington, as well as congressional hearings that start July 26. Also, White House Counsel Lloyd N. Cutler plans a potentially damaging internal inquiry into the propriety of extensive contacts between the White House and federal regulators over the Clintons’ ties to a failed savings and loan.

Fiske demonstrated in the initial phase of his investigation that he intends to be painstaking in his approach and that he is not likely to be driven by artificial deadlines. In the four-month inquiry into Washington aspects of the case, Fiske and his staff interrogated 188 witnesses--most of them under oath before a grand jury--and reviewed thousands of pages of subpoenaed documents.

The far-more-complicated series of events in Arkansas revolving around the Clintons’ involvement in banking, real estate, investment and political fund-raising activities centered on the Whitewater real estate development is likely to occupy Fiske’s attention for many more months, probably stretching to the middle or end of next year.

And the special counsel signaled that he sees a political as well as legal dimension to his mandate. While clearing top presidential aides of criminal conduct Thursday, he pointedly refused to pass judgment on the propriety or ethics of their actions.

The Fiske investigation eventually could absolve President Clinton and First Lady Hillary Rodham Clinton of any criminal or civil liability in the Whitewater puzzle, though it also could deliver an unfavorable verdict on their behavior over 14 years in public life in Arkansas.

Cutler welcomed as “very good news” Fiske’s announcement that no one would be charged with obstruction of justice for interfering with a federal criminal investigation of Madison Guaranty Savings & Loan in Arkansas. The failed thrift was owned by James B. McDougal, the Clintons’ partner in the Whitewater Development Corp., in which the Clintons invested and lost money.

Cutler also expressed gratification at Fiske’s conclusion that Deputy White House Counsel Vincent Foster had committed suicide and was not murdered.

But Cutler said he would conduct his own investigation of a series of contacts between top White House staff members and Treasury Department officials on the Madison Guaranty inquiry.

Cutler conceded that the White House-Treasury contacts were “inadvisable in hindsight.” He said he intends to discover whether they violated government ethics or conflict-of-interest rules and decide whether any Administration officials should be disciplined or fired.

In line with that inquiry, Treasury Secretary Lloyd Bentsen also announced Thursday that his department’s Office of Inspector General will conduct a review of the conduct of senior Treasury officials who briefed White House officials about the progress of the Madison Guaranty investigation.

Former White House Counsel Bernard Nussbaum already has lost his job as a result of his participation in the meetings. Other top Administration officials--including senior White House adviser George Stephanopoulos; Margaret A. Williams, Mrs. Clinton’s chief of staff, and Deputy Treasury Secretary Roger Altman--also took part in the meetings.

Cutler has added two lawyers to the White House counsel’s office to assist in the inquiry: Sheila Cheston, deputy general counsel of the Air Force, and Jane Sherburne of Cutler’s law firm, Wilmer, Cutler & Pickering. Both are on temporary assignment, Cutler said.

The White House counsel said he intends to complete the internal inquiry before hearings by House and Senate committees begin the last week in July. He said the Administration will cooperate fully in the congressional investigations and that President and Mrs. Clinton will respond to requests for information within “accepted precedents.”

No President has ever appeared before a congressional investigating committee but former President Ronald Reagan answered questions for the Iran-Contra inquiry on videotape.

Cutler suggested that the Clintons, who were interviewed in the White House three weeks ago by Fiske, would be willing to give written answers to questions from the congressional panels.

Democratic leaders in the House and Senate agreed to the hearings on condition that they not interfere with Fiske’s investigation by exploring areas in which his inquiry has not been completed. Thus the congressional hearings are expected to focus on the White House-Treasury contacts and on the handling of documents removed from Foster’s office immediately after his suicide.

Sen. Alfonse M. D’Amato, (R-N.Y.), the ranking Republican on the Senate Banking, Housing and Urban Affairs Committee, which will conduct one of the hearings, said he wants a full investigation of the contacts between the White House and banking regulators, despite Fiske’s conclusion that no laws were broken.

“If the purpose (of the contacts) was not to obstruct justice or influence an ongoing investigation, then what was the purpose?” D’Amato asked. “They were clearly improper. They shouldn’t have taken place. What was discussed at them?”

Rep. Henry B. Gonzalez (D-Tex.)--chairman of the House Banking, Finance and Urban Affairs Committee, which also plans hearings on the matter--said the Fiske report should persuade the public that the Whitewater controversy has been exploited for political purposes.

The Fiske findings “may go a long way toward revealing how much of the Whitewater furor is simply partisan hysteria,” Gonzalez said.

But Rep. Jim Leach (R-Iowa), ranking Republican on the House Banking Committee, asserted that the issues covered by Thursday’s reports amount to “less than 5%” of Fiske’s investigatory mission.

“By far the major part of the independent counsel’s mandate relates to taxpayer losses resulting from the failure of an Arkansas S&L; and analogous conflict of interest problems in the state,” said Leach, who has been the member of Congress most aggressively pursuing Whitewater-related matters. “His report on the larger aspects of his probe is yet to come.”

Excerpts From Fiske Report

Excerpts from special counsel Robert B. Fiske Jr.’s statement and his first report on the Whitewater case.

THE SUICIDE: This report concludes that on July 20, 1993, Mr. Foster committed suicide in Ft. Marcy Park, Fairfax County, Va. The report lists a number of factors that may have contributed to his suicide, and finds no evidence that matters relating to Whitewater, Madison Guaranty or CMS played any role in his death.

PROBE’S GOAL: The purpose of this investigation was to determine whether the evidence established that any of those contacts, viewed individually or collectively, amounted to a violation of law by anyone involved. A total of more than twenty different contacts, either face-to-face meetings or telephone conversations, were investigated. The investigation focused on whether in the course of any of these contacts, any individual obstructed justice, attempted to obstruct justice, or conspired with others to obstruct justice, as defined in Title 18, United States Code, Section 1505.

WHITE HOUSE: After a review of all the evidence, we have concluded that the evidence is insufficient to establish that anyone within the White House or the Department of the Treasury acted with the intent to corruptly influence an RTC investigation. Therefore, the evidence of the events surrounding the contacts between the White House and the Treasury Department does not justify the prosecution of anyone for a violation of Section 1505. We have also concluded that the evidence does not justify a criminal prosecution for violation of any other federal statute.

TRAVEL OFFICE FALLOUT: Those close to Foster have stated that the single greatest source of his distress was the criticism he and others within the counsel’s office received following the firing of seven employees from the White House travel office.

NO SIGN OF DISTRESS: Each of Foster’s co-workers, friends and family whom we questioned was explicitly asked whether Foster had ever mentioned Whitewater or Madison Guaranty related matters as a cause of concern or distress. According to each of these people, Foster had never expressed any concern about these matters.

Source: Associated Press