2 Whitewater Partners, Gov. Tucker Indicted : Inquiry: Arkansas grand jury charges loan fraud and conspiracy. The Clintons are not named by the panel.

Two of President Clinton’s former business partners and the man who succeeded him as governor of Arkansas were indicted Thursday on multiple fraud and conspiracy charges related to the failures of an Arkansas savings and loan and a small federally backed lending agency.

Named in the 48-page indictment handed up by the special Whitewater grand jury in Little Rock, Ark., were Gov. Jim Guy Tucker, James B. McDougal and his ex-wife, Susan H. McDougal. The McDougals, who controlled the now-defunct Madison Guaranty Savings & Loan Assn., were partners of Bill and Hillary Rodham Clinton in the Ozark resort development known as Whitewater.

The indictment never mentions the Clintons.

Significantly, however, the indictment seems to rely extensively on evidence turned over by former Municipal Judge David Hale, a longtime political insider who claims that Clinton pressured him to make improper loans through his Small Business Administration-backed lending agency to aid “the [Arkansas] political family.”

Clinton has denied those claims.

But Hale figures to be a key witness in a Tucker-McDougal trial, and his allegations could surface again in court.

Hale pleaded guilty to fraud charges last year and has been cooperating since with prosecutors. Though tarnished by his own acknowledged criminal conduct, Hale’s role as a key witness has been enhanced in recent months by plea agreements reached with a number of others who claim to have played roles in an alleged conspiracy to defraud Madison Guaranty and Hale’s company. They have corroborated some of Hale’s allegations about Tucker and the McDougals.

Hale, who has been kept in seclusion outside Arkansas for the past year, also provided prosecutors with voluminous documentary evidence. Much of it he had earlier provided to reporters in the days before a Whitewater special prosecutor was selected.

The latest indictment centers on a series of loans totaling about $3 million made by Madison Guaranty and Hale’s company, Capital Management Services Inc. A portion of one $300,000 loan, made by Hale to Susan McDougal, was diverted into the Whitewater project, according to James McDougal.

It was on that loan that Hale says Clinton personally intervened. The indictment, however, makes no reference to Clinton while charging both of the McDougals with loan fraud in connection with that transaction.

In fact, Whitewater special prosecutor Kenneth W. Starr made a point of stating that none of the counts in the indictment charge Clinton or the First Lady with any criminal wrongdoing.

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And in Washington, Mark D. Fabiani, special White House associate counsel to the President, repeated Starr’s statement and said: “We continue to cooperate fully and hope the independent counsel will conclude his inquiry expeditiously.”

For Gov. Tucker, a longtime rival of Clinton, being swept up in a controversy that originated over questions of Clinton’s conduct seems to be particularly galling. He blasted Starr for conducting what he called a political investigation.

Tucker was charged with 11 counts of loan fraud, including making false statements and concealing his interest in various transactions.

“I have not violated any law. I have not been part of a conspiracy between their captive witness, David Hale, or anyone else. I will continue doing my job as governor,” Tucker said in a press conference in Little Rock.

Tucker had previously been indicted on separate loan fraud charges and of conspiring to avoid taxes by hiding the value of a cable TV venture that he sold for millions of dollars.

Thursday he said he will not be intimidated by “the sheer weight of their indictments.”

James McDougal, who lives on a small disability pension, vowed to act as his own attorney. He said the Whitewater investigation is a Republican attempt to undermine Clinton.

“I look forward to once again having an opportunity to defend myself in court and to again clear my name,” he said. “These are political charges which I will fight vigorously.” He and two of his wife’s relatives were acquitted in 1990 on several bank fraud charges arising from unrelated Madison Guaranty deals.

The Clintons and the McDougals were partners from 1978 to 1992 in the failed Whitewater vacation and retirement development in north Arkansas.

The Clintons say they were passive investors and sold their Whitewater interest in December, 1992, to McDougal for $1,000 just before Clinton became President. The Clintons said they had nothing to do with the management of the S&L.;

Clinton has called claims that he pressured Hale to make loans to help James McDougal “a bunch of bull.” McDougal also denies it.

In 1986, federal regulators ousted James McDougal as owner of Madison Guaranty, citing irregularities in its operations. The S&L; failed three years later, costing taxpayers $65 million to bail out the federally insured depositors.

Hale’s Capital Management Services failed in 1993 after his indictment, leaving the SBA holding about $2 million in bad debts--about $700,000 of it related to the loans Hale made to, or on behalf of, the McDougals.

The 21 counts listed in Thursday’s indictment include wire, mail and bank fraud; fraudulent participation in loans; making or causing a false statement to a financial institution, and misapplying financial institution funds.

Most of the charges are punishable by up to five years in prison and a fine of up to $250,000. One false-statement count against Tucker has a penalty of two years in prison and a $250,000 fine.

The lengthy indictment reads at times like a chapter from Hale’s previously published allegations. In a series of interviews following his own fraud indictment in 1993, Hale said that he had been urged to make a series of loans to aid James McDougal because at the time federal auditors were coming to examine Madison Guaranty’s books.

The indictment charges that the McDougals and Tucker “needed to obtain funds and financing in a manner that did not attract attention of examiners and auditors . . . or appear to violate state and federal regulations.” To do so, the trio “structured transactions and generated fraudulent paperwork. . . . This was of particular concern in late 1985 and early 1986, when defendant James B. McDougal expected that an examination of the affairs of Madison Guaranty would soon be conducted.”

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Among the allegedly fraudulent loan transactions detailed in the indictment are:

* A $65,000 loan made by Hale’s company to a Fayetteville man that was actually intended to pay off a bank loan owed by Tucker and James McDougal.

* A $100,000 loan from Hale to a Little Rock company “structured to conceal” Tucker’s interest.

* An $825,000 mortgage loan from Madison Guaranty to a straw buyer of property owned by Hale. The land value was inflated in a false appraisal, making it appear that Hale had made a profit of $500,000.

That false profit was used to obtain matching funds from the SBA that Hale in turn used to make loans to Tucker and James McDougal, the indictment charges.