NEWS ANALYSIS : First Lady’s Papers Fuel Talk of a Cover-Up

Until now, the Whitewater affair has meant wildly different things to different people--most of it murky and confusing.

Depending on the moment, it has been a questionable land deal, a savings and loan failure, a case of Arkansas influence-peddling or a darkly mysterious conspiracy surrounding the suicide of a top White House aide.

But suddenly, with the release by the White House of two seemingly unrelated documents, President Clinton’s critics have found the word they have been searching for to sum up the allegations swirling around Whitewater. It is “cover-up”--a word reminiscent of the Watergate scandal that now easily flows from the lips of Sen. Alfonse M. D’Amato (R-N.Y.), chairman of the Whitewater investigating committee, and other congressional Republicans.

Furthermore, the events of the past week have enabled those same rivals to focus public attention more sharply on a single potential culprit: First Lady Hillary Rodham Clinton.

That she has become their clear and favorite target was evident Sunday when D’Amato’s chief investigator, Michael Chertoff, borrowed a familiar line from the Watergate era to describe the thrust of the current probe: “What did Mrs. Clinton know and when did she know it?”

Indeed, the newly released materials have one thing in common: They give some credence to the Republicans’ already palpable suspicions that Mrs. Clinton and her advisors are not telling the whole truth about potentially embarrassing events in the life of the first family--including the Clintons’ investment in the Arkansas land deal known as Whitewater, the financial benefits they received from a failed savings and loan and their decision to dismiss employees of the White House travel office, an act that led to the indictment--but ultimately the acquittal--of one.

Renewed attention on Whitewater and on Mrs. Clinton could not have come at a worse time for the White House. The president’s popularity has been on a steady rise in recent months, with an election less than a year away, and the first lady is about to embark on a national book tour aimed at helping restore her image.

To be sure, Republicans have been trying without success for the better part of three years to establish proof of a White House cover-up. And they remain a long way from being able to demonstrate that Mrs. Clinton obstructed justice or committed any other illegal act.

But the discovery of the long-lost documents is likely to resonate with the public in a way no evidence has so far. On Sunday, former GOP Labor Secretary Ann McLaughlin expressed the sort of sentiment White House officials are loath to hear: “Those of us who didn’t care about Whitewater have had our interest piqued. Suddenly, this becomes something we can relate to.”

Now, White House officials who once took pleasure in the somnambulant nature of Republican-inspired investigations fear they may no longer be able to keep the threat of Whitewater at bay. Indeed, White House lawyers are known to be apprehensive about a number of upcoming events, including the book promotion tour, which will require Mrs. Clinton to give numerous interviews.

In the coming week, Mrs. Clinton’s personal secretary, Carolyn Huber, will be called to testify, along with ex-White House aide and Clinton friend David Watkins and Richard Massey, a onetime law associate who helped Mrs. Clinton do legal work for her Whitewater partner, James B. McDougal.

D’Amato is threatening to bring perjury charges against two of Mrs. Clinton’s confidants, Chief of Staff Margaret Williams and New York lawyer Susan Thomases. D’Amato is known to believe that as a result of that pressure, some witnesses who had claimed memory loss in response to questions from Whitewater investigators might soon be more forthcoming.

“Some people are beginning to come apart at the seams,” he said.

In addition, there is the growing possibility that Mrs. Clinton herself may be called before Congress to answer questions. Both D’Amato and Rep. William F. Clinger Jr. (R-Pa.), chairman of the House Oversight Committee probing the White House travel office scandal, said they will summon the first lady to testify if their questions are not answered by other witnesses.

Meanwhile, McDougal and his former wife are scheduled to go on trial in Little Rock, Ark., in March, along with Arkansas Gov. Jim Guy Tucker, on Whitewater-related charges brought by independent counsel Kenneth W. Starr.

The two documents made public last week--the billing records for legal work Mrs. Clinton did for McDougal in the mid-1980s and a memo drafted by Watkins in 1993 blaming the first lady for the travel office scandal--have created a political stir, primarily because they contradict her previous statements.

When asked by officials of the Resolution Trust Corp. whether she had any involvement as a lawyer in helping McDougal with an Arkansas real estate deal known as Castle Grande, Mrs. Clinton replied: “I don’t believe I knew anything about any of these real estate projects.”

But the billing records show she worked on several matters related to Castle Grande and had at least 14 meetings or telephone conversations with one of McDougal’s co-conspirators, Seth Ward, father-in-law of former Associate Atty. Gen. Webster L. Hubbell.

“It would appear that her statements are at variance with the truth,” said D’Amato. “It’s not the truth.”

Until the White House documents were made public, D’Amato had studiously avoided using the word “cover-up” to describe the Whitewater case, fearing he would be accused of grandstanding. But the documents have now enabled him to define the case in those terms.

Understandably, this turn of events has put the White House on the defensive, forcing aides to answer not only for the first lady but also for their failure to deal effectively with the inquiry.

“I’ve never known a more mishandled scandal,” remarked House Banking Committee Chairman Jim Leach (R-Iowa), referring to the White House strategy.

Leach and other critics say the first lady, responding more like a lawyer than a politician, made the same fatal mistake that President Nixon committed in the wake of the break-in at the Watergate: By trying to mask the embarrassing truth, she may have turned what would have been little more than an uncomfortable situation into a far more serious one.

But Mrs. Clinton’s defenders strongly assert that none of the facts that may have been obscured about her past activities involved any illegality.