Sudden Appearance of Clinton Records Called ‘Curious’

Federal banking investigators said Tuesday that they are suspicious about the sudden appearance of First Lady Hillary Rodham Clinton’s long-missing billing records in the White House but that they were quick to concede that they have no evidence of any deliberate wrongdoing.

Testifying to the Senate Whitewater Committee, Patricia Black and Steven Switzer of the Federal Deposit Insurance Corp. said it was “curious” that copies of Mrs. Clinton’s records were found only a few days after completion of their report on her former Little Rock law firm’s links to a failed savings and loan association owned by her partner in the Whitewater Development Corp.

“I was very curious about it,” Black said, referring to the discovery by a White House aide early last August of copies of 116 pages of Mrs. Clinton’s billing records for Madison Guaranty Savings & Loan, which had been under subpoena for two years.

President Clinton and his wife have said that they cannot explain how the documents suddenly appeared on a table in the “book room” next to the first lady’s private office.

Black said that the records, which were not surrendered until five months later, would have been “very relevant” to the government’s conflict-of-interest study on the law firm, which was completed last Aug. 3.

Switzer, agreeing with Black, said, “Curious is a good description.”

But asked by Sen. Richard C. Shelby (R-Ala.) if it seemed that the White House had deliberately withheld the records, Black replied: “I cannot say that, senator. I just can’t speculate.”

Carolyn Huber, a personal aide to Mrs. Clinton, told authorities last month that she first found copies of the long-missing billing records folded over on a table in the White House living quarters last August. But Huber testified that, without realizing their significance, she stored them in a box in her office until rediscovering them last month, when White House lawyers turned them over to authorities and made them public.

The Resolution Trust Corp., to which Black and Switzer were formerly assigned before it became part of the FDIC last month, criticized the Rose Law Firm in the August report for having performed legal work for the RTC related to Madison Guaranty without having disclosed its past connection to the failed thrift.

The newly found billing records have caused this conflict-of-interest study to be reopened, with the possibility that the government could bring a civil claim against the law firm, Black and Switzer testified.

The investigators said that the law firm, before accepting a federal contract to settle a matter arising out of the thrift’s collapse, should have revealed the full extent of its past work for Madison Guaranty, especially work performed by Mrs. Clinton on a series of property transactions on a development known as Castle Grande that federal regulators have termed fraudulent.

Sen. Alfonse M. D’Amato (R-N.Y.), the committee chairman, said that “the work of the law firm [for Madison Guaranty] was far more extensive than previously realized” by the RTC, which had authority to recover assets for the government from federally insured S&Ls; that failed.

Democrats on the panel elicited testimony from Black that the RTC, despite its continued doubts about the law firm’s ethics, nonetheless was satisfied with its work for the agency in obtaining a $1-million settlement for the government from a Madison accountant who bore some responsibility for its collapse.

Despite prodding by Sen. Lauch Faircloth (R-N.C.), Black said she had no evidence that Mrs. Clinton knew her work for Madison on Castle Grande involved fraudulent transactions.

Regulators have described the deals as a complex “pyramid scheme” in which Madison set up “straw parties” to buy up land so that the thrift could evade a state regulation limiting its own acquisition of real estate.