Prosecutor Seeks to Link Loan to Favor by Clinton

A federal prosecutor Wednesday sought to show that two bankers gave thousands of dollars to help pay off Bill Clinton’s Arkansas gubernatorial campaign debt on the same day that one of them met with Clinton to discuss appointment to a state post.

Senior White House aide Bruce Lindsey, a longtime confidant of President Clinton, testified about the contributions under cross-examination as he finished his second day of testimony at the trial of Perry County bankers Robert M. Hill and Herby Branscum Jr., who are accused of misapplying bank funds and deceiving the Internal Revenue Service.

Under intense questioning by prosecutor W. Hickman Ewing Jr., who works for Whitewater independent counsel Kenneth W. Starr, Lindsey acknowledged that Hill and Branscum also allowed Clinton and his wife, Hillary Rodham Clinton, to delay repayment of a $100,000 personal loan for two years.

“Can you think of anything you asked that they [Hill and Branscum] ever said no to?” Ewing asked at one point. Lindsey, after a long pause, replied that he could not.

However, Lindsey, who was treasurer of Clinton’s 1990 gubernatorial campaign, added that $285,000 loaned to the Clintons for the campaign was provided at 12% interest, the highest allowable in Arkansas at that time. This sum included the $100,000 that was not paid off until a month before the 1992 presidential election, when the debt was retired after a nationwide fund-raising effort.

Lindsey, reading from campaign reports he had filed publicly at the time, acknowledged that Hill and Branscum and their family members contributed thousands of dollars to Clinton’s successful primary and general election campaigns in 1990--much of it logged in on Dec. 14, 1990, a month after the election, as Clinton was trying to retire a large campaign debt.

He also acknowledged that Dec. 14, 1990, was the date that Hill met with Clinton to urge the appointment of Branscum to a post on the powerful but unsalaried state highway commission.

Branscum received the appointment a month later, and Hill was reappointed to the state banking commission.

Lindsey denied that the appointments were linked to financial favors by the bankers for Clinton. A native of Little Rock, Lindsey said it was “not unusual” for political candidates to open campaign bank accounts at institutions owned by their supporters, as Clinton had done at the Perry County Bank about 80 miles outside Little Rock.

Hill and Branscum are charged with conspiring to misuse $13,000 of their bank’s money to reimburse themselves for contributions made to Clinton and other candidates in their names and the names of family members and friends.

They also are charged with concealing from the IRS two large cash withdrawals totaling $52,500 by the Clinton campaign in 1990. The bank failed to comply with a federal law requiring cash deposits and withdrawals of $10,000 or more to be reported to the IRS.

Lindsey, in his direct testimony a day earlier, staunchly denied accusations from a prosecution witness that he had asked the bank to omit filing the required reports.