Whitewater’s Smoking Gun, or Popgun? : Hearing: D’Amato says files were removed from Foster’s office after suicide. But White House says the files never even went to Washington with him.

Sen. Alfonse M. D’Amato (R-N.Y.), chairman of the Senate Whitewater investigating committee, declared Monday that he had found a “smoking gun” that demonstrates wrongdoing by advisors to President Clinton. But the White House quickly dismissed it as a “popgun.”

At the center of this politically charged exchange were three Whitewater-related file folders that once belonged to the late Deputy White House Counsel Vincent Foster, who allegedly used them during the 1992 presidential campaign to answer allegations against the president.

D’Amato, while chairing a hearing of his committee, suggested that the files were slipped out of the White House after Foster’s suicide in July, 1993, as part of an effort to obstruct justice. In response, Democrats insisted that the files in question were handed off by Foster long before he ever went to the White House.

While some questions remain unanswered about the history of the three files, there is no question that the dispute marks an escalation of partisan wrangling among senators designated to investigate the controversy, which grew out of the president’s investment in an Ozark Mountains resort development known as Whitewater.

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Sen. Paul S. Sarbanes of Maryland, ranking Democrat on the Whitewater committee, accused D’Amato of creating “a lot of to-do about nothing.” And White House officials characterized it as one of many hot investigative leads developed by D’Amato that turned out to be “dry holes.”

The three files, which the White House made available to reporters after D’Amato’s hearing, came from the archives of the Rose Law Firm in Little Rock, Ark.

The files contain 350 pages of records that the Rose firm collected while representing Madison Guaranty Savings & Loan in its effort to gain approval of the Arkansas Securities Department for two separate initiatives in the mid-1980s--a proposed stock offering and the thrift’s request to act as a broker-dealer. They make no specific mention of Whitewater, nor do they offer evidence of any illegal activity.

As a Rose partner, now-First Lady Hillary Rodham Clinton was the lead partner representing Madison in both matters before the Securities Department while her husband was governor. During the 1992 campaign, reporters questioned whether her work on this case was a conflict of interest.

Madison was owned by James B. McDougal, the Clintons’ investment partner in Whitewater, and investigators suspect that the Clintons benefited from money diverted from the now-defunct thrift to Whitewater. The Clintons long have insisted that they lost money on the investment.

D’Amato noted that the three file folders were discovered by the committee among documents obtained from the Clintons’ personal lawyer, David Kendall. He made public a letter in which Kendall identified the files as belonging to Foster. And D’Amato noted that the three files were not part of a box of documents removed from Foster’s office shortly after he was found dead.

Based on this evidence, the New York Republican concluded that the files were removed separately from Foster’s White House office in an apparent effort to obstruct an investigation of the Madison-Whitewater matter.

“That is a smoking gun,” D’Amato declared.

In response to D’Amato’s charges, Kendall told the committee that he obtained the files in November 1993 from former Associate Atty. Gen. Webster Hubbell, not from the White House. He was under the impression that Hubbell, also a former Rose partner, took possession of the files from Foster shortly after the 1992 campaign.

Kendall’s explanation, White House attorney Jane C. Shurburne told reporters, turned D’Amato’s smoking gun into “a popgun.” But D’Amato said he was not convinced that Kendall was in a position to know whether Foster had ever taken the files to the White House.

Meanwhile, D’Amato and other Republicans directly accused Margaret Williams, Mrs. Clinton’s chief of staff, of deliberately misleading the committee about events at the White House on July 27, 1993, when the box of files from Foster’s White House office was transported across town to Kendall’s law offices.

In a bitter exchange with Republicans, Williams, who was making her third appearance before the committee, said that she did not recall many of the events of that day. But she strongly denied that she was trying to mislead the panel about her stewardship of Foster’s files.

After removing the box of 24 files from Foster’s office on the day after he died, Williams stored them in a closet in the White House residence. On July 27, the box was picked up by one of Kendall’s law partners and taken to his office.

Because the box included one file labeled “Whitewater,” it has become an important part of the committee’s investigation.