Whitewater Probe Targets Clinton Advisor

President Clinton’s closest advisor, Bruce Lindsey, said Wednesday that he will be named as an unindicted co-conspirator by Whitewater independent counsel Kenneth W. Starr in the case of two Arkansas men charged with making illegal contributions to Clinton’s 1990 gubernatorial campaign.

By formally implicating Lindsey, Starr not only strengthens his case against the two Clinton contributors, but he brings the legal fallout from the Whitewater affair precariously close to the president. Lindsey, a deputy White House counsel, has been Clinton’s most trusted advisor for nearly two decades.

The announcement of the accusation against Lindsey comes at a particularly sensitive time for the president, coming on the heels of a highly critical report by the Senate Whitewater Committee as well as revelations that the White House improperly obtained FBI files on visitors and former officials, some of them political opponents.

Nevertheless, the president greeted the news with equanimity. “I am confident he didn’t do anything wrong,” said Clinton, who will testify at the trial by videotape. “He was thoroughly investigated and not charged, with ample opportunities.”

Lindsey is expected to be accused formally later this week or early next week by W. Hickman Ewing, Starr’s deputy, who is trying the case before U.S. District Judge Susan Webber Wright.

The prosecution contends he conspired to hide from the Internal Revenue Service large cash withdrawals made by the 1990 Clinton campaign for governor.

Lindsey, a lawyer who served as Clinton’s campaign treasurer in 1990, said he is being named as an unindicted co-conspirator so prosecution witnesses can testify about their conversations with him without running afoul of rules of evidence governing the use of hearsay.

“Conversations between alleged conspirators are admissible in such a case, even if the person being quoted does not take the witness stand,” explained E. Lawrence Barcella, a Washington defense attorney. “This prosecution technique is very common in cases like this.”

In one sense, being named as an unindicted co-conspirator is good news for Lindsey because it means he will not be charged as a participant in this case. But if testimony in the trial persuasively contradicts testimony Lindsey has given to the grand jury investigating Whitewater, the president’s advisor could face perjury charges.

Although Lindsey has been designated as a possible defense witness in this trial by one of the defendants, it is not yet certain he will be called to the stand. Jury selection, which began Monday, is expected to continue at least through today.

Although Ewing has declined to confirm reports that prosecutors were planning to name Lindsey as an unindicted co-conspirator, Lindsey himself confirmed the development Wednesday after it was disclosed earlier in the day in Little Rock, Ark., by Dan Guthrie, attorney for defendant Herby Branscum.

Lindsey, who normally shies away from publicity, rushed from his office to the front lawn to make a statement to reporters.

“I did nothing wrong,” Lindsey said.

Guthrie said prosecutors told him the president will not be designated as an unindicted co-conspirator.

Branscum and his co-defendant, Robert M. Hill, both directors of the Perry County Bank, are being accused of improperly converting $13,217 in bank funds into contributions to Clinton and other candidates. At least $7,000 of the money was allegedly contributed to Clinton in the names of friends and relatives in an effort to circumvent the $1,000 annual limit on individual donations.

Shortly after making the contribution to the campaign, Branscum was appointed by then-Gov. Clinton to the state highway commission and Hill was named to the state banking board.

In this case, naming Lindsey will permit Ewing to question the prosecution’s chief witness, Neal Ainley, former president of the Perry County Bank, about conversations he had with Lindsey regarding the reporting to the government of a campaign committee withdrawal from the bank.

Lindsey figures prominently in charges that Branscum and Hill conspired to hide $30,000 in withdrawals by the Clinton campaign from the Perry County Bank shortly before the 1990 election. The money, withdrawn on four separate checks signed by Lindsey, was used for get-out-the-vote activities.

Ainley is expected to testify that he was instructed not to report the transactions to the government. Federal law requires all transactions in excess of $10,000 to be reported.

Lindsey says he wrote four separate checks in an effort to escape the attention of bank employees, who he feared might gossip about the withdrawal to political opponents. But he insists he had no desire to prevent the transactions from being reported to the federal government.

“Any suggestion that my writing four checks was intended to mislead bank regulators is simply false,” Lindsey said Wednesday. He noted that he promptly listed the withdrawals on post-election reports that are made public in Arkansas, and added: “It just doesn’t make sense that I would want to keep secret from the IRS what I disclosed publicly.”