NEWS ANALYSIS : Verdicts Revive Ethics Questions Circling Clinton

The first major Whitewater trial verdicts are in, with only bad portents for President Clinton.

Although the president was not on trial in Little Rock, Ark., jurors resoundingly found his Whitewater business partners and his successor as Arkansas governor guilty of serious financial crimes.

The president’s videotaped testimony, offered by the defendants, appeared to do little to help their case.

While few observers expect any legal action targeting the president or First Lady Hillary Rodham Clinton any time soon, voters will render a verdict on his governance and his character barely five months from now.

“There is absolutely nothing good in this for the White House,” said Joseph E. DiGenova, a former federal prosecutor in Washington and a Republican. While it “presents no personal legal consequences for the president or the first lady, it reinvigorates all the other investigations. It is all bad, legally and politically.”

Richard Ben-Veniste, chief counsel for the minority Democrats on the Senate panel investigating Whitewater, asserted that the decisions in Little Rock are not a judgment on the president’s veracity.

“The verdicts, however, present a great deal of guilt by association that the White House will have to deal with,” Ben-Veniste said.

At this point, Whitewater remains a cloud hanging over the president, darkened by Tuesday’s verdicts but still subject to the outcome of continuing investigations into his conduct in Arkansas and after reaching the White House.

Starr Revivified

While the White House insisted that the judgment in Little Rock is not a verdict on the president’s actions, his character or his credibility, it certainly gives momentum to a variety of Clinton inquiries still underway.

Independent counsel Kenneth W. Starr will attack the remaining parts of his multifaceted investigation with renewed vigor and confidence.

Starr, speaking to reporters outside his Washington office, called the outcome a “vindication” of the nation’s much-criticized system of justice.

Now “we move forward,” Starr said. “The Washington phase of our investigation is very active.” Starr declined to describe the elements of that investigation, saying: “We are doing our talking in court.”

But based on appearances of witnesses before a federal grand jury and on House and Senate investigations of related matters, the most active aspects include whether former White House aide David Watkins lied to cover up Mrs. Clinton’s role in the firings of White House travel office employees and whether others engaged in obstruction of justice or perjury in the matter.

In addition, a defense attorney source who declined to be identified said that investigators are still pursuing the sudden appearance in the White House of the first lady’s Rose Law Firm billing records on her work for the savings and loan run by Clinton friend James B. McDougal, who was convicted of multiple fraud counts in Little Rock on Tuesday. Republicans say the two-year delay in production of the records suggests that someone in the White House wanted to conceal them.

Prosecutors have identified no one, at least publicly, as a target of that investigation. Moreover, Starr is still looking into the suicide of former White House aide Vincent Foster, a close personal friend of the Clintons’, and the hurried disposition of Whitewater-related records in his White House office.

And a number of former Clinton business associates in Arkansas face scrutiny for dealings that reach much closer to the president than the trial just concluded, including a case involving two bankers accused of funneling illegal contributions to Clinton’s 1990 gubernatorial campaign.

Decisive verdicts such as those rendered Tuesday also tend to embolden previously reluctant witnesses to come forward, experienced prosecutors noted.

Rep. Jim Leach (R-Iowa), whose House Banking and Financial Services Committee spent months investigating the tangled Whitewater matter, said that the verdicts hurt the president because they reflect on the ethical climate that prevailed in the Clintons’ business dealings in Arkansas.

“In terms of the ethical aspects of the entire Whitewater affair, it’s going to be very serious for him,” Leach said. John D. Podesta, a former Clinton White House staff secretary who now teaches a course in the politics of scandal at Georgetown University Law School, said the verdicts give life to a series of inquiries that appeared to be expiring.

“It puts breath on the mirror and a pulse in the body, but ultimately things haven’t changed that much. No one has found the president or first lady has done anything wrong. This decision won’t substantially affect his political fortunes, but we’ll have an earache for a day or two as the pundits hash this out,” said Podesta, a firm believer in the president’s innocence.

Washington Probe

Clearly, Tuesday’s verdicts mark the beginning of the legal phase of the Whitewater controversy, not its end.

Starr recently hired two veteran white-collar criminal prosecutors to handle the Washington aspects of the investigation, indicating that the inquiry will continue through the fall presidential campaign and almost certainly beyond.

The new senior counsel for the inquiry is Roger M. Adelman, who prosecuted John W. Hinckley Jr. in the attempted assassination of President Reagan and won the conviction of former Rep. Richard Kelly (R-Fla.) in the Abscam political corruption investigation.

The second seasoned prosecutor to join Starr’s Washington team in April was Eric A. Dubelier, who is experienced in white-collar and transnational criminal investigations.

In Congress, the Senate Whitewater panel led by Sen. Alfonse M. D’Amato (R-N.Y.) will conclude its work next month and issue its final report.

The summary of its findings is likely to attack the credibility of the White House and particularly that of Mrs. Clinton, committee sources said. But its hearings so far have failed to establish any solid potential criminal charges, such as perjury or obstruction of justice, that could be referred to U.S. prosecutors with any expectation of an indictment.

Republicans repeatedly have accused White House aides of concealing documents that have been subpoenaed, or at least slowing down their production to the committee, in an effort to thwart the Senate investigation.

Signaling what is likely to be in his final report, D’Amato charged recently that White House officials engaged in “a continuing pattern, an unacceptable pattern, that borders on the deliberate withholding of information.”

D’Amato’s final report is expected to focus its heaviest fire on the tardy production last January of Mrs. Clinton’s Rose Law Firm billing records. The committee wanted to examine the files to determine the accuracy of Mrs. Clinton’s claim that she had spent little time working for Madison Guaranty Savings & Loan, the now-defunct institution that is at the heart of the Whitewater controversy.

Joe Lockhart, chief spokesman for the Clinton reelection committee, had little to say about the verdicts. “We’re just going to keep talking about the issues the American people want us to address, just as we did yesterday and just as we will tomorrow.”