Whitewater, Other Probes Piling Up Legal Bills for Clintons’ Circle

With Whitewater and other investigative problems piling up for the White House, so are the legal expenses not only of President Clinton and Hillary Rodham Clinton but also of more than 40 of the president’s aides and friends.

The Clintons, thrown into debt by legal fees that already have soared above $3 million, can look forward to getting much of the money they owe from a combination of two insurance policies, probable government reimbursement for some expenses and a legal defense fund that is being fed by private contributions.

But others in the Clintons’ circle, who have become witnesses or subjects of investigations by an independent counsel and congressional committees, do not enjoy all these advantages.

At least five of the president’s associates--like the Clintons--have established legal expense trusts and at least 10 others are considering establishing them.

Betsey Wright, a Washington public affairs consultant who served as Clinton’s confidential assistant when he was governor of Arkansas and the latest to establish a fund, confronts a $650,000 bill that she says is well beyond her means.

A senior Clinton aide confirmed that about 45 present or former administration officials have had to hire attorneys because they are subjects or witnesses in Whitewater or related investigations.

The Clintons’ $3-million legal bill is still mounting. The president has to testify in another Little Rock, Ark., trial that began Monday. The sexual harassment charge filed against him by Paula Corbin Jones is pending, and informed sources now say that both of the Clintons are expected to be called for further closed-door testimony by Whitewater independent counsel Kenneth W. Starr.

Shielding the president from even deeper financial trouble are two insurance policies that have paid $880,311 to the law firm representing him in the sexual harassment case. Those expenses were incurred through September 1995 and do not include an additional $156,827 in billing that the insurer has declined to pay. The case has not yet been brought to trial. If it is, it could add substantially to the Clintons’ expenses.

In Whitewater, Clinton figures to be reimbursed for some of his legal defense. The law allows reimbursement to subjects of independent counsel inquiries who are not ultimately indicted as a consequence of the investigations.

But the law provides reimbursement only for “reasonable” legal fees. Fees deemed unreasonable are the responsibility of the government official.

That’s where the legal defense fund comes in. Clinton’s fund had made payments of $741,134 through 1995, according to the latest semiannual public report. At year’s end, there were unpaid legal expenses of $1,360,063, compared to cash on hand of only $170,134.

And by February, the Clintons’ net worth was fast approaching zero, according to an analysis of their finances by Money magazine.

Michael Cardozo, executive director of the Clintons’ legal expense trust, confirmed that contributions had dropped off precipitously in recent months. Cardozo emphasized that fund-raising was hampered by the Clintons’ self-imposed limit of $1,000 on individual contributions and by legal restrictions against contributions from corporations, partnerships, political action committees, labor unions and associations.

“We are not allowed to publicize or promote the trust at all,” Cardozo said. “Contributions have to come in over the transom, unsolicited.”

The president’s aides and friends who are confronting huge legal bills and depending on a legal defense fund face a different problem: Most of them are relatively unknown to the public and therefore not so likely to attract contributions.

Wright, for example, was a longtime Clinton confidante in Arkansas. Her duties included answering press inquiries and trying to limit the damage from allegations against Clinton during the 1992 presidential campaign.

She says that her bills are exceptionally high because she has had to testify so much and because she had custody of voluminous Clinton records that are expensive to reproduce. Most of the records are related to Clinton’s campaigns for governor of Arkansas.

When she first got a bill for legal expenses totaling $100,000,” Wright said, “I was depressed and worried about how I was going to pay it. But after the bill got up to $600,000 I stopped worrying because I knew I couldn’t pay it.”

Other White House aides who have established funds include George Stephanopoulos, a senior advisor; Craig Livingstone, chief of White House personnel security who has asked for administrative leave; Margaret A. Williams, Mrs. Clinton’s chief of staff; and Lisa Caputo, Mrs. Clinton’s press secretary.

Mark D. Gearan, director of the Peace Corps and former White House communications director, said that he also is considering establishing a fund. Lawyers representing several others caught up in Whitewater and related inquiries have sought advice from trustees of the Clintons’ legal expense trust on how to set up similar funds.

Gearan and a number of other young aides entered government service with little in the way of assets and now, because of Whitewater, find themselves facing bills ranging from $50,000 to more than $250,000. Most of them, like Gearan, are witnesses, not subjects of investigations, but they have retained lawyers to protect their interests as they have responded to subpoenas.

“I have no exposure,” Stephanopoulos said in an interview, “but that doesn’t stop a congressional committee from going after you. It is still the greatest privilege in the world to work in the White House but my advice to anyone coming here is to be prepared and have a lawyer on retainer.”

Clinton, whose annual salary is $200,000, has said that, if he stays healthy, he will be able to “earn a pretty good living” and eventually pay his bills. But, he said, he is “far more concerned” about aides and friends who face smaller Whitewater bills but are financially unable to pay them.

Williams has incurred one of the largest legal bills--more than $250,000 at last count--and she set a $10,000 limit on contributions to her legal defense fund. The fund has disbursed about $60,000.