First Lady Finds Files Sought by Whitewater Investigators

Under heavy fire from Republicans, First Lady Hillary Rodham Clinton disclosed Friday that a recent White House search turned up long-lost billing records sought by investigators that detail legal work she did for the Little Rock thrift owned by her partner in the Whitewater land venture.

The inch-thick stack of records made public by the White House suggests that despite her denials, Mrs. Clinton was actively involved in representing Madison Guaranty Savings & Loan at a time in the mid-1980s when the thrift was paying her law firm a $2,000-a-month retainer.

The bills were reported found at the moment that Republicans in Congress were intensifying their efforts to portray the first lady as the mastermind of a White House cover-up of wrongdoing related to Whitewater and Madison--an institution that Sen. Alfonse M. D’Amato (R-N.Y.), chairman of the Senate Whitewater investigating committee, contends was “a criminal enterprise.”

David Kendall, Mrs. Clinton’s lawyer, insisted the records would disprove allegations that the first lady had misled investigators about the extent of the work she did for Madison. “Yet another set of baseless allegations about Whitewater can now be laid to rest,” he said.

Whitewater was a failed Arkansas real estate project jointly owned by Bill and Hillary Clinton and James B. and Susan McDougal, who also owned Madison Guaranty. The thrift was seized by federal regulators in 1989. Among other things, investigators are trying to determine whether federally insured deposits from the savings and loan were siphoned off through Whitewater to benefit Bill Clinton’s 1984 gubernatorial campaign.

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Earlier in the day, D’Amato’s committee threatened to bring perjury charges against two of Mrs. Clinton’s closest confidantes, Margaret Williams, her chief of staff, and Susan Thomases, a New York lawyer who serves as an unpaid advisor to the first lady. The two are suspected by GOP committee members of feigning memory loss to protect Mrs. Clinton.

In addition, the House Government Reform and Oversight Committee issued subpoenas for documents and testimony from former White House aide David Watkins and Clinton friend Harry Thomason. D’Amato also announced that he is gearing up for another constitutional face-off with the White House over the panel’s long-ignored request for White House documents and electronic mail.

Watkins will be questioned about a draft memo that the White House found earlier this week in which he admitted misleading law enforcement investigators about the extent of Mrs. Clinton’s role in the 1993 White House travel office scandal. D’Amato and Rep. William F. Clinger Jr. (R-Pa.) cited the memo as further evidence of a White House cover-up of activities involving the first lady.

The travel office troubles began in May 1993, when President Clinton fired seven employees inherited from earlier administrations after hearing complaints of financial mismanagement. An FBI investigation, however, later faulted Clinton aides for acting without sufficient evidence.

D’Amato, who has accused the White House of resisting investigators’ requests for documents, sarcastically described the discovery of the billing records as the “second miraculous discovery within the past 24 hours.”

In response, Kendall said that the billing records, which had been requested long ago from the White House by both D’Amato and independent counsel Kenneth W. Starr, were found in the East Wing office of Carolyn Huber, who is Mrs. Clinton’s director of personal correspondence. Huber previously worked as office manager of the Rose Law Firm in Little Rock, where Mrs. Clinton was a partner.

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The New York senator said that the records were copied from originals at the Rose firm on Feb. 12, 1992, at a time when the Whitewater scandal was beginning to become an issue in Clinton’s campaign for president. These copies have margin notations in red ink in the handwriting of the late Deputy White House Counsel Vincent Foster, who apparently used them to prepare a summary for the campaign staff of the work Mrs. Clinton did for Madison.

Mrs. Clinton’s representation of Madison has become a matter of inquiry, not only because the federally insured thrift eventually collapsed as the result of financial mismanagement, but also because there is evidence that some of the money from the thrift may have been improperly diverted into the Whitewater land deal.