Key Prosecutors in Whitewater Probe May Quit

Despite concerted efforts by new Whitewater independent counsel Kenneth W. Starr to prevent internal turmoil, key prosecutors who have been directing the investigation of President Clinton’s financial affairs are troubled by the recent court-ordered change of counsels and intend to quit after the transition.

The departures, if they occur as expected, would include some of the investigative team’s top prosecution attorneys. Such resignations could disrupt an investigation that was believed to be nearing its first criminal indictments.

Coupled with the change at the top, the departures can be expected to push back completion of the investigative phase to the threshold of the 1996 presidential campaign, a concern when the Whitewater inquiry was initiated.

Already, there is concern that nervous witnesses will be alarmed by the changes and that some parts of the investigation may have to be repeated. “There are a number of practical implications that the court (which named Starr) completely ignored,” one source close to the investigation charged.

Starr, a Republican and former solicitor general in the George Bush Administration, was appointed on Aug. 5 by a three-judge federal panel to replace Robert B. Fiske Jr., who had led the investigation since its inception seven months ago. The panel said it was wary of retaining a special counsel who had been put on the case by a member of the Clinton Administration, Atty. Gen. Janet Reno.

But since then Starr himself has come under fire for his Republican ties and activities. His critics cite his personal and financial support of GOP candidates in Virginia and his televised statements opposing the President’s claim to immunity from a sexual-harassment suit. He also helped draft a related legal brief for a conservative women’s organization.

Some Democratic lawmakers and some newspaper editorial pages have called on Starr to resign, saying he will taint the independent investigation’s outcome with suspicions of political partiality.

Trying to keep the investigation on track and forestall wholesale staff defections, Starr asked the entire unit to remain on the case and give him a chance to prove that he is bringing no political agenda to the probe.

So far, according to sources close to the investigation, Starr’s appeals seem to have had only limited success--and for reasons largely beyond his control.

First, the current team regarded Fiske with great loyalty, making his abrupt replacement a source of disillusionment and resentment. The attorneys are known to regard themselves not so much as members of the Whitewater team but as members of Fiske’s team. Half of the 10-member attorney group were recruited from the New York law offices of Davis, Polk & Wardwell, where Fiske is a partner.

Further, there are concerns that continuing political attacks on Starr threaten the investigation’s credibility and mean that its final conclusions might not be judged on their legal merits.

Also, the possibility that some investigative work may have to be repeated for the new leadership--some of it for the fourth time, following earlier aborted probes by the local U.S. attorney and the Justice Department--raises practical problems that could undermine the confidence of witnesses and work to the advantage of future defense lawyers.

Starr is to meet this week with Fiske and his team in Little Rock, Ark., where one phase of the investigation is under way. Sources say he has offered to “go on bended knee” to ask the attorneys to stay beyond an anticipated two-month transition period.

Associates of Starr say he can be very persuasive, and he apparently hopes that time will help his cause with members of the Fiske team. He reportedly has deflected early attempts by some members of the team to meet and declare their intentions.

Preventing staff turbulence may be additionally important because Starr has not been able to immediately detach himself from his private law firm and may still have some legal work to complete for clients. Fiske severed his law firm ties after appointment.

Reached at his Washington law firm Friday after returning from three days in Little Rock, Starr declined comment on the expected departures.

However, a Starr associate who declined to be identified said their resignations “will hurt only if they leave prior to an orderly transition.” He said Fiske had assembled a “first-flight investigative team.”

Fiske has pledged to “do everything I can to help” Starr take over the reins of the Whitewater inquiry. In an interview before leaving to celebrate his 40th wedding anniversary last week, Fiske said he has encouraged his team to “stay long enough to assure minimal disruption” of the case. He said “long-term commitments are up to each individual.”

Two decades ago, a similar dilemma faced members of the Watergate special prosecution force after President Richard Nixon ordered the firing of special prosecutor Archibald Cox in the infamous “Saturday Night Massacre.”

Cox, like Starr a former solicitor general, was replaced by Leon Jaworski, widely regarded as a political crony of ex-President Lyndon B. Johnson and a Democratic political activist in Texas.

But in that case, Jaworski soon won over the team that revered Cox, and it remained intact. Their inquiry led to the “smoking gun” tape that incriminated Nixon in the cover-up and forced his resignation.

Today, Houston trial lawyer Rusty Hardin, a part-time member of the Fiske team, is one who may stay.

After talking with Starr privately on a trip from Little Rock to Texas following their first staff meeting, Hardin immediately telephoned his colleagues on the Fiske team to reassure them about Starr.

“In my view he does not have a (political) agenda,” Hardin said he told them. “I believe he will be driven by the law and what’s right and that he’ll be honest with us.”

Hardin confirmed that the unit was “within weeks” of deciding on the first round of indictments in the Little Rock phase of the investigation. He said the changes have already caused delays, but he was optimistic that important decisions could still be made before the end of September. He would not discuss the investigations.

Hardin also defended Fiske, who he said was unfairly criticized.

“Those who feared that Fiske wasn’t being aggressive enough are dead wrong,” he said.

He minimized the effects of additional delays on possible future legal cases. “Ultimately, the results are going to be the same because all you need is a bright, independent type running the case and a good staff of prosecutors. Starr inherits a hard-working staff that did great work for Fiske, and he can build on what they’ve done.”

During its first seven months, the Fiske investigation operated in two arenas--Washington and Little Rock. The Washington phase looked into the suicide of White House aide and longtime Clinton associate Vincent Foster and a series of questionable contacts between the White House and federal regulators investigating Madison Guaranty Savings & Loan, the failed Arkansas thrift owned by a business partner of the Clintons.

In Little Rock, meanwhile, the investigation developed thousands of pages of statements from witnesses, grand jury testimony and subpoenaed documents related to the broad question of whether Madison Guaranty was manipulated to benefit the Clintons’ investment in the Whitewater real estate development and/or then-Gov. Clinton’s state political campaigns.

Soon after his arrival in Arkansas, Fiske accepted a plea agreement with former Municipal Judge David Hale, who operated his own loan company and is accused of defrauding the federal Small Business Administration. Hale, who said he made improper loans to “members of the political family” of Arkansas at Clinton’s urging, agreed to cooperate with investigators.

The first round of Little Rock indictments were expected to spring from the testimony and documents provided by Hale.

The team directing the Whitewater investigation includes three former federal prosecutors, Denis McInerny, Julie O’Sullivan and Mark Stein. Each served for at least four years as assistant U.S. attorneys in New York, where Fiske himself had been a U.S. attorney during the Gerald R. Ford and Jimmy Carter administrations.

The three, along with attorneys Pat Smith and Tim White, also worked for Fiske’s New York law firm. Other attorneys on the team are William Duffey of Atlanta; Roderick Lankler of New York, who worked on the Washington phase of the inquiry; Carl Stich of Cincinnati, and Gabrielle Wolohojian of Boston.

Hardin is a trial lawyer who met regularly with the team but did not participate in the day-to-day aspects of the investigation.

Pressure on Starr to step down continued even as he is trying to get the investigation restarted.

Sen. Carl Levin (D-Mich.), leader of the drive to restore the independent counsel law and chairman of the Senate subcommittee with jurisdiction over the legislation, said Friday that he was “exploring options” after the three-judge panel that appointed Starr rejected his request to inquire into Starr’s partisan activities.

“The issue here is the credibility of this statute and the confidence the public will have in the results of these investigations,” he said.

In accepting the appointment, Starr pledged to conduct a fair and thorough probe. “The nation has a compelling interest in the fair, just, thorough and prompt disposition of these matters pursuant to the Constitution and the laws of the United States,” Starr said. “That is my sole loyalty.”