Judge Dismisses an Indictment of Gov. Tucker

In a far-reaching decision that could narrow the duties of all independent counsels, a U.S. District judge Tuesday quashed an indictment by Whitewater independent counsel Kenneth W. Starr against Arkansas Gov. Jim Guy Tucker.

The ruling by U.S. Judge Henry Woods in Little Rock, Ark., marked the first time that a defendant has ever successfully challenged the scope of an independent counsel inquiry, even though politicians have debated the issue since the position was first created in response to the Watergate scandal more than 20 years ago.

Tucker, a Democrat, who succeeded Bill Clinton as governor of Arkansas in January, 1993, hailed the ruling as a major victory in his bitter legal wrangle with Starr. But in reality, the ruling may mean more for the Clinton Administration than it does for Tucker, who still must answer a second indictment brought against him by Starr.

Currently, there are four independent counsels investigating President Clinton and his appointees, and the Administration often has complained that the independent counsels were conducting unfettered, wide-ranging inquiries. If the ruling causes the courts to more narrowly define the jurisdiction of the independent counsel--as Woods ruled--it could have an impact on all of these investigations.

Nevertheless, White House officials declined to comment.

Starr, who was appointed by the courts to investigate the President’s controversial investment in a real estate deal known as Whitewater, announced that he would immediately appeal the ruling and request an expedited review.

“We disagree with Judge Woods’ decision,” Starr said.

The position of independent counsel has undergone several revisions since it was created to investigate the Watergate scandal that led to the resignation in 1974 of President Richard Nixon. Under current law, independent counsels are appointed by the U.S. district court in the District of Columbia in response to a request from the attorney general.

Attorneys for Tucker argued that Starr exceeded his authority by bringing an indictment on June 7 against the governor and two co-defendants on charges of fraudulently obtaining a $300,000 government-guaranteed loan for a cable television venture. They asserted that Starr’s jurisdiction extends only to matters directly related to the President’s Whitewater investment.

William H. Sutton, one of Tucker’s attorneys, told Woods during oral arguments earlier in the day that the law authorizing the appointment of independent counsels limited their authority to matters “demonstrably related” to the case outlined by the courts against federal appointees.

Sutton added that the case against Tucker is “not only not demonstrably related, it’s not related at all.” His argument was supported by attorneys for Tucker’s two co-defendants, John Haley of Little Rock and William J. Marks Sr. of San Francisco.

Starr, on the other hand, noted that he was given broad latitude by the court to prosecute all cases that he encountered during his investigation. Furthermore, he argued that Woods had no authority to restrict the scope of his investigation. His position was supported by U.S. Atty. Gen. Janet Reno.

To bolster his argument, Starr noted that the scope of independent counsel investigations has gone unchallenged for more than 20 years.

But Woods bluntly rejected Starr’s assertion, saying that the indictment brought against Tucker “bears no relation whatsoever” to the matters the independent counsel was appointed to investigate.

While the other indictment pending against Tucker is also not directly related to the Clintons’ investment in the Whitewater resort development, it is nevertheless more closely linked.

In the second indictment, handed down by a grand jury on Aug. 13, the governor is accused along with others of falsifying documents to inflate values of property involved in other loans. His co-defendants in that case are James B. McDougal, former owner of the now-defunct Madison Guaranty Savings & loan, and McDougal’s ex-wife, Susan, who were also partners with the Clintons in the Whitewater deal.

The indictment quashed by Woods involves a loan obtained by Tucker and his co-defendants from a federally backed small business development fund run by former Judge David Hale, one of the President’s accusers.

Hale claims that he illegally loaned money to Susan McDougal under pressure from Clinton. Some of the loan found its way into the Whitewater Development Corp. bank account.

Although neither the President nor First Lady Hillary Rodham Clinton is expected to be charged with any wrongdoing by Starr, the White House has been critical of the way he has prosecuted the case. And Clinton has publicly defended Tucker.

In addition, White House Counsel Abner J. Mikva spoke out in recent months against the unlimited jurisdiction enjoyed by Starr and the independent counsels appointed to investigate three other Clinton appointees, former Agriculture Secretary Mike Espy, Commerce Secretary Ronald H. Brown and Housing and Urban Development Secretary Henry G. Cisneros.

In the Espy case, independent counsel Donald Smaltz, a Los Angeles lawyer, was denied his request by the Justice Department for wider jurisdiction. The scope of the Smaltz inquiry also has been challenged in court by attorneys for Tyson Foods of Springdale, Ark., which is accused of illegally rewarding Espy with travel and sports tickets.