When an Ethical Compass Goes Awry : The growing sense that Clinton may be his own worst enemy
Last New Year’s Day, President Clinton asked an old college friend for legal advice on how he should deal with the evolving controversy over the connections that Bill and Hillary Clinton had with the failed Madison Guaranty Saving & Loan in Arkansas. There would have been nothing wrong with that request if the friend, Eugene A. Ludwig, was not comptroller of the currency, which makes him the official in charge of regulating federally chartered commercial banks. Ludwig is also one of three members of the board of the Federal Deposit Insurance Corp., which is involved with claims arising out of Madison’s collapse.
Within a very short time, Ludwig, as he noted in a subsequent memo, concluded what Clinton himself should have recognized, that it would be “impermissible” for someone in his position to discuss anything having to do with Madison with the President or the First Lady. Ludwig says that conclusion was reinforced after conversations with lawyers at the Treasury Department and the White House. It goes without saying that Clinton could have availed himself of the same legal advice before he approached the man he had appointed as comptroller.
Ludwig has already talked to Robert E. Fiske Jr., the special counsel looking into the tangled business involving Madison and the Whitewater Development Co., a real-estate investment the Clintons took part in while he was still Arkansas’ governor. Next week Ludwig may also talk to the House and Senate Banking committees which, after long partisan hassling, will finally hold hearings on the Whitewater affair.
Ludwig told Fiske that Clinton stressed he felt he had done nothing wrong in the Whitewater matter, but was sounding out Ludwig because of his expertise in banking laws. White House Counsel Lloyd Cutler says Clinton was seeking only the names of experts in real-estate transactions who might help explain to the public what the controversy is about.
And, who knows, maybe the approach to Ludwig was as innocent as all that. The fact remains that the President, a lawyer and once his state’s attorney general, has no excuse for not knowing what a conflict of interest is. Forearmed with that knowledge, he has no excuse for inviting even the appearance of one. The fact remains that the President, who promised that his Administration would adhere to the highest ethical standards, is now again seen as having behaved in a way that prompts questions about the reliability of his own ethical compass. Once more, by this needless lapse, Clinton has given an impression of being his own worst political enemy.
