NEWS ANALYSIS : Starr Takes Risk With Indictment of Arkansas Governor : Whitewater: Tucker is popular, and being challenged on home turf. He’s expected to fiercely contest the independent counsel’s right to try him.

When Kenneth W. Starr was named last August as independent counsel to investigate the Whitewater affair, many in the legal community saw it as an easy way for the former GOP solicitor general to burnish his image in anticipation of a future appointment to the Supreme Court.

But today, Starr finds himself in a troublesome situation that few lawyers would envy. A stranger to the ways of Arkansas, he stands on the brink of a high-stakes legal showdown with the state’s most respected lawyer and politician: Gov. Jim Guy Tucker.

Starr, who originally went to Little Rock to investigate allegations of wrongdoing against President Clinton, this week obtained a highly controversial criminal indictment against Tucker.

For Starr, the political dangers inherent in prosecuting Tucker are many. Not only does Tucker promise to sorely test Starr’s untried abilities as a courtroom prosecutor and to play on a growing resentment toward this Little Rock outsider, but many legal scholars are questioning whether Starr, by trying the governor, is exceeding his authority.

Tucker has made it clear that he intends to bolster his defense by challenging Starr’s right under the law that created independent counsels to prosecute cases not directly related to alleged wrongdoing by the President or top Clinton Administration officials.

As the governor asked Starr rhetorically when subpoenaed to testify before a grand jury, “We have reached the point of just saying: ‘Wait a minute. What jurisdiction, what authority, do you have . . . ?’ ”

Experts predict that the outcome of Starr’s prosecution of Tucker may not only have a lasting impact on the reputation of a man who aspires to sit on the highest court in the land, but also could help to define the limits of the highly controversial law that provides for independent counsel investigations of alleged wrongdoing by top federal officials.

Katy Harriger, a Wake Forest University professor and author of a 1992 book on independent counsel investigations, said Starr has erred by failing to focus on the original allegations that Clinton may have profited illegally from his investment in an Ozark land development deal known as Whitewater.

“Once they decided they couldn’t get Clinton, they should have turned this case over to a local prosecutor,” Harriger said. “That ought to have been their first priority--to make a connection to the President. Going after every other fish in the water just to [justify] their existence is not what the law was intended to do.”

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Atty. Gen. Janet Reno, however, defended Starr this week. Asked Thursday if Starr had exceeded his authority, Reno said, “I have no reason to believe that he has.”

Under the charter handed down by a federal court panel in January, 1994, the Whitewater independent counsel was given latitude to look into issues loosely connected to Clinton’s business dealings as governor of Arkansas, the suicide of White House Deputy Counsel Vincent Foster and the federal government’s investigation of both matters.

But after nearly 1 1/2 years of investigation by Starr and his predecessor, Robert B. Fiske Jr., the independent counsel has nabbed only one person even remotely linked to the original focus of the investigation. He is Chris V. Wade, a former real estate agent involved in marketing land in the Whitewater development, who pleaded guilty in March to an unrelated charge of bankruptcy fraud.

Like Tucker, Starr’s only other big-name defendant--former Associate Atty. Gen. Webster L. Hubbell--is charged with a crime not directly connected to Whitewater. Hubbell pleaded guilty to bilking his former law firm out of about $400,000 in personal expenses.

To be sure, the charges against Tucker are by no means frivolous. The governor and his associates are accused of obtaining a $300,000 federally backed loan under false pretenses, using it as collateral for a Florida cable television venture and then lying to the Internal Revenue Service about how much income he made on the deal.

Tucker insists he has done nothing wrong. Moreover, he contends that even if these charges against him were justified, they should have been brought by the local U.S. attorney--not Starr.

“The only purpose of the independent counsel’s office is to investigate matters related to the executive department that would constitute a conflict for the U.S. attorney,” Tucker declared in a recent letter to Starr.

John Haley, a Little Rock attorney who at first represented Tucker in this matter and now is the governor’s co-defendant, insists that Starr has made a “great leap” beyond the proper scope of his Whitewater probe to inquire into the circumstances surrounding the Florida cable television deal.

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Tucker’s new lawyer, George B. Collins of Chicago, has indicated he will use this very same argument in an attempt to persuade the U.S. District Court in Little Rock to throw out the case.

But even if this challenge to Starr’s authority fails to win Tucker a reprieve, legal experts say the independent counsel faces numerous other hurdles to establishing his credibility as prosecutor in this case.

As Harriger notes, an Arkansas jury trying Tucker might be sensitive to insinuations by the defense that Starr, a Republican, is motivated either by partisan politics or by a big-time Washington lawyer’s disdain for the small-town ways of Little Rock.

Ever since Starr was appointed, Democrats have complained that he is too partisan to serve as independent counsel. Not only has he been a Republican activist, but he also previously gave advice to the legal team representing Paula Corbin Jones, who claims she was sexually harassed by Clinton.

Tucker, in his letter to Starr, noted that his unsuccessful GOP opponent in last November’s election, Sheffield Nelson, once claimed to have access to inside information from Starr’s office. He also observed that because the current lieutenant governor is Republican, Starr would succeed in causing political control of Arkansas to shift to the GOP if Tucker is convicted and forced to resign.

“All of this leads us to conclude that the activities of your office are for political purpose,” he wrote.

Furthermore, Tucker alleged that it would constitute a professional conflict of interest for the independent counsel to prosecute him since Starr, in his private practice, has handled cases referred to him by the Atlanta law firm of King & Spalding, which represents tobacco and soft drink manufacturers that claim to have been harmed by the governor’s tax policies.

In a May 13 speech to the graduating class of Duke University Law School, Starr strongly defended himself and his investigative team against critics who claim they have strayed too far afield. He said he and his staff strictly adhere to professional norms.

Times staff writer Robert L. Jackson contributed to this story.