Bid to Extend Whitewater Probe Blocked

Democratic senators Thursday won a tactical victory in their efforts to rein in the long-running Senate Whitewater investigation, blocking an immediate extension as the inquiry expired and forcing a Republican to concede that a time limit might have to be set if future operations are authorized.

Senate Minority Leader Tom Daschle (D-S.D.) employed a little-used parliamentary maneuver to keep the Senate Whitewater Committee from obtaining $600,000 more to continue an open-ended inquiry without a deadline.

With his panel officially running out of money by day’s end, Sen. Alfonse M. D’Amato (R-N.Y.), the chairman, said that he would attempt next week to have the investigation extended. But D’Amato suggested that a time limit for the committee’s work might be set, along with a smaller funding request.

Meanwhile, in another development favorable for Democrats, a two-year civil inquiry conducted for the Federal Deposit Insurance Corp. found insufficient evidence of fraud on the part of First Lady Hillary Rodham Clinton or her former law firm in their legal representation of a Little Rock, Ark., savings and loan at the heart of the Whitewater controversy.

Daschle and other Democratic senators, as well as the White House, hailed the finding in an FDIC study as demonstrating the futility of continuing Whitewater hearings for any great length of time. The hearings are investigating charges that the Clintons illegally benefited from an investment they made in an Arkansas land development called Whitewater.

While Republicans have sought to portray Mrs. Clinton as encouraging or ignoring the fraudulent practices of Madison Guaranty Savings & Loan in representing the failing thrift in the mid-1980s, the report said that it found no proof that would allow the government to sue the Rose Law Firm.

Senate hearings have shown that Mrs. Clinton drafted at least one document related to a fraudulent land purchase by Madison Guaranty known as Castle Grande. But the report concludes that “nothing proves she did so knowing it to be wrong.”

The 164-page report does take note of discrepancies in the recollections of Mrs. Clinton and Richard Massey, a former law firm associate, about how Madison Guaranty came to be a client. The first lady initially had said that she thought Massey brought in the client, but Massey told a Senate hearing in January that he had not.

However, in her most recent interrogation by the FDIC two weeks ago, Mrs. Clinton said for the first time that she thought it was the late Vincent Foster who approached her about legal work for Madison Guaranty, which was owned by James B. McDougal, the Clintons’ investment partner in the Ozark Mountains Whitewater project. Foster joined the White House as a lawyer. His 1993 death has been ruled a suicide.

The FDIC report concludes that such discrepancies are not significant because “there is no hint of fraud or intentional misconduct in either version.”

The Senate showdown occurred when D’Amato asked his colleagues to approve additional funding for the special committee that was created last May and has conducted 47 days of hearings over nine months. To bring the resolution to a quick vote, D’Amato needed unanimous consent for the matter to be considered.

But when D’Amato tried to start debate without any objections, three Democrats backing Daschle immediately objected and debate leading to a vote was barred.

D’Amato said later that it might be prudent to propose ending hearings about six to eight weeks after an upcoming criminal trial involving Whitewater figures that starts Monday. This would enable some trial witnesses to appear before the committee, he said.

Times staff writer Elizabeth Shogren contributed to this story.