First Lady Misled Public, Senators Charge : Ethics: Republicans say law firm’s billings show Mrs. Clinton downplayed legal work that she did for her Whitewater partner’s troubled savings and loan.

First Lady Hillary Rodham Clinton was accused Friday by Senate Republicans of making misleading public statements that minimized the extent of the legal work she did for the now-defunct Arkansas savings and loan owned by James B. McDougal, her partner in the Whitewater real estate deal.

Republicans on the Senate Whitewater investigating committee made public a summary of bills that the Rose Law Firm of Little Rock, Ark., submitted to Madison Guaranty Savings & Loan for legal services rendered to the thrift between 1985 and 1987. It included $7,583.75 in charges specifically attributed to work done by Mrs. Clinton, then a Rose partner.

These billings, the Republicans charged, contradict public statements by the First Lady that she was not deeply involved in representing Madison, which cost taxpayers $60 million when it eventually went bankrupt.

Speaking for the Republican majority on the committee, Sen. Robert F. Bennett (R-Utah) said he was particularly disturbed by a contradictory statement Mrs. Clinton made to government investigators who reviewed allegations of conflict of interest involving the Rose firm. The firm eventually was cleared of wrongdoing.

In her official statement to government investigators, according to Bennett, Mrs. Clinton said that she was “not involved in the day-to-day work” done by the Rose firm for Madison, even though she was designated as the partner in charge of the account.

“I find that statement misleading,” said Bennett. “The strong impression given to the public [by Mrs. Clinton] is that her relationship with Madison was very peripheral. The strong impression I get by looking at the recap of bills is that Mrs. Clinton . . . was very heavily involved in handling the Madison account.”

The billing summary had never previously been made public but it was known that Madison paid a $2,000 retainer to the Rose Law Firm during those years.

Republicans raised the issue while Mrs. Clinton’s former law partner, Webster L. Hubbell, was on the witness stand. Hubbell, the former No. 3 official at the Justice Department, is currently serving a prison sentence for submitting fraudulent expense accounts to the Rose firm--some of them relating to expenses incurred in work he did as a private attorney for the government in a 1989 suit against an accounting firm employed by Madison.

Hubbell took exception to Bennett’s remarks about Mrs. Clinton.

He said that Mrs. Clinton’s statements about her work for Madison referred specifically to an effort by the thrift in 1985 to win state approval to issue non-voting stock to shore up the institution’s finances. At the time she made the statement, he noted, Mrs. Clinton was being criticized for having represented Madison in its effort to win approval of the stock transaction from a state official appointed by her husband.

Hubbell said most of the work the law firm did on that matter was handled by Richard Massey, an associate lawyer, even though Mrs. Clinton signed the official letter that was sent to Beverly Bassett, head of the Arkansas Securities Department and an appointee of then-Gov. Bill Clinton.

In response, Sen. Alfonse M. D’Amato (R-N.Y.), chairman of the committee, vowed to summon Massey before the committee next week for questioning. D’Amato also harshly criticized the Rose firm for assisting Madison in an allegedly illegal land transaction involving Hubbell’s father-in-law, Seth Ward.

Also Friday, Paula Casey, who was appointed U.S. attorney in Little Rock by Clinton in 1993, testified publicly for the first time about her handling of legal cases stemming from the Whitewater scandal. She denied trying to impede prosecution of the cases and insisted that she was never contacted about these matters by anyone in the Clinton Administration.

Republicans criticized Casey for failing to recuse herself immediately from working on Whitewater-related cases. At the time, she said, she was unaware that the President, the First Lady and Arkansas Gov. Jim Guy Tucker could be implicated in the cases.

It was not until November, 1993, that Casey recused herself from Whitewater cases. She said she did so then because she was advised by the Justice Department that it would pose a conflict of interest for her, as a Clinton appointee, to participate in prosecuting cases in which the President might ultimately be implicated.

Nevertheless, Fletcher Jackson, one of Casey’s assistants, told the committee that he knew as early as August, 1993, that the Whitewater-related cases were politically sensitive and could embarrass the President.

To avoid any conflict for Casey and other attorneys in her office, Atty. Gen. Janet Reno later appointed an independent counsel to investigate and prosecute the cases involving Madison and Whitewater. Earlier this year, independent counsel Kenneth W. Starr indicted Tucker in connection with the case. No charges have been filed against Clinton or his wife.