Senate OKs Panel to Probe Clintons’ Whitewater Role : Inquiry: 42 Democrats cooperate in setting up first such special committee since Iran-Contra. D’Amato, President’s outspoken critic, will serve as chairman.

With the cooperation of 42 Democrats, the Republican-dominated Senate on Wednesday voted to establish a special committee to investigate the complex of issues surrounding the investments of President Clinton and First Lady Hillary Rodham Clinton in the Whitewater real estate venture.

The resulting panel, approved on a 96-3 vote, would be the first such Senate investigative committee since the Senate joined the House to investigate an arms-for-hostages scheme involving Iran and Nicaragua’s Contras during the Ronald Reagan Administration.

The Special Senate Committee will be chaired by Sen. Alfonse M. D’Amato (R-N.Y.), an outspoken critic of the Clinton Administration, and co-chaired by Sen. Paul S. Sarbanes (D-Md.), a lawmaker known for his judicious temperament. Sarbanes served on both the Iran-Contra committee and on the House committee that voted to impeach President Richard Nixon after the Watergate break-in.

“Whitewater is a very serious matter. Some questions raised by Whitewater go to the very heart of our democratic system of government,” D’Amato said on the Senate floor before the vote. “We must ascertain whether purely private interests have been placed above the public trust. . . . The American people have a right and a need to know the answers to these questions.”

The White House on Wednesday responded to the establishment of the committee with confidence, cautioning that the inquiry must not divert either the White House or Congress from more pressing business.

“We are certain that the facts, presented in fair hearings, will continue to show that the amorphous and ever-shifting Whitewater charges are without merit,” said a White House statement released Wednesday.

The White House said that the hearings will take place “at a time when the White House and the Congress must work together on a host of pressing issues,” but insisted that they would not be a distraction.

The absence of significant Democratic opposition to the establishment of the committee underscores the Democrats’ awkward political position: While few are enthusiastic about the prospect of a new round of hearings presided over by the incendiary D’Amato, they cannot be seen as blocking a further look into a matter now under the scrutiny of an independent counsel.

By voting no, said Sen. Paul Simon of Illinois, one of three Democrats who opposed the creation of the panel on Wednesday, many Democrats fear that “it looks like you may be defending abuses.”

“I don’t at all defend abuses,” added Simon, who is retiring at the end of his current term. “I just think we have to show some courage on some of these things. . . . If we had had a secret vote, it would have been much closer,” he added, with many more Democrats in opposition.

Under the terms of its establishment, the Senate special committee would have to complete its inquiry by Feb. 29, 1996. That timetable would bring the investigation several months into the 1996 presidential campaign but cut it off abruptly well before the race moves into its final stages.

Richard Ben-Veniste, the former associate Watergate prosecutor who is Sarbanes’ counsel for the Whitewater inquiry, called the completion date adopted for the panel “very significant.”

“I know that Sen. Sarbanes intends to proceed with the same bipartisan spirit that characterized previous hearings during the past year,” Ben-Veniste said.

Many Democrats clearly hope that D’Amato’s Whitewater hearings will not only help clear the Clintons of wrongdoing but cast the continuing efforts to investigate the First Couple as a waste of taxpayer money motivated by partisan enmity.

Sen. David Pryor (D-Ark.), a close ally of the Clintons, stressed that--in addition to learning about Whitewater--the public has the right to know how costly the Whitewater investigations have become and how willingly the Clintons have cooperated.

“The public also has the right to know that this White House, this President, this First Lady, this Administration has never . . . been accused of a lack of cooperation,” Pryor said.

The resolution approved Wednesday would provide funding of $950,000 to the committee to investigate Whitewater, including Clinton’s finances for his 1990 campaign for governor of Arkansas. That is currently the focus of independent counsel Kenneth W. Starr’s separate investigation.

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BACKGROUND

Whitewater Development Corp. was a failed Arkansas real estate project jointly owned by the Clintons and James B. McDougal, who also owned Madison Guaranty Savings & Loan, an Arkansas thrift that was seized by federal regulators in 1989. Investigators are looking at whether Whitewater caused losses at Madison and whether federally insured deposits from the savings and loan were siphoned off to Clinton’s 1984 gubernatorial campaign.