No Major Whitewater Indictments Expected Before Vote

The Whitewater investigations by independent counsel Kenneth W. Starr are far from over but no indictments of top-level figures in the Clinton administration are likely to be returned before the Nov. 5 election, sources said Wednesday.

Some Republicans and conservative commentators have suggested that President Clinton’s chances of reelection might be damaged by an “October surprise” in the form of election-eve indictments or a public report on the investigations. Some Democrats and nonpartisan critics, in turn, have suggested that Starr, a former Bush administration official, is demonstrating partisanship by continuing his inquiries well into the campaign season.

Whatever the eventual outcome of his investigations, the independent counsel apparently is nowhere close to seeking an indictment of major figures or issuing a report that could influence the election.

That does not rule out the possibility of an indictment being returned against a lower-level person. But it appears to preclude release of the report on the death of former White House Deputy Counsel Vincent Foster.

One factor restraining Starr is a Justice Department tradition of taking into account the political effect of filing criminal charges before an election. On several occasions, the independent counsel has indicated that he would be guided by that tradition, calling it “a powerful counsel for restraint.”

While the probable absence of a major indictment before the election is good news for the White House, Starr’s search for evidence of possible criminal conduct by the president and First Lady Hillary Rodham Clinton now appears certain to extend well into 1997 or beyond.

The Clintons have been questioned under oath three times about Whitewater. A White House official acknowledged that another round “is certainly a possibility.”

The Clintons are “ready to cooperate again, if asked,” said the White House official, who declined to be identified.

“We don’t know whether the independent counsel will take any action before the election,” the official said, “but we have to be prepared for an ‘October surprise,’ maybe a well-timed report to inflict damage on the president’s reelection campaign.”

Meanwhile, Starr’s inquiries, instead of narrowing, as the White House had hoped, have continued to expand.

Investigators are still following up information that came to the independent counsel’s office as the result of two Whitewater trials conducted earlier this year in federal court in Little Rock:

* The 12-week trial that ended on May 28 with the conviction of Arkansas Gov. Jim Guy Tucker and James B. McDougal and Susan McDougal, the Clintons’ Whitewater investment partners, for conspiring to defraud two federally backed financial institutions.

* The trial that ended on Aug. 1 when Perry County, Ark., bankers Herby Branscum Jr. and Robert M. Hill were acquitted of four fraud and conspiracy charges stemming from allegations that they improperly used bank funds to help boost Clinton’s political career when he was governor of Arkansas. A mistrial was declared on seven other criminal counts after the jury deadlocked on a verdict. A new trial on those charges is scheduled for Oct. 3 and Starr and his staff are reviewing the case to decide whether to proceed with it.

The Whitewater investigations have gone on for three years, one year under Robert B. Fiske Jr. and two under Starr. The complexities of the inquiries, together with missing records, recalcitrant witnesses and other problems, have caused some phases to drag on much longer than Starr had anticipated.

For example, the independent counsel’s office at one point signaled that a report on the apparent suicide of Foster, a friend of the Clintons from Arkansas, would be ready by the beginning of this year. The target date was later moved back to Labor Day. And now, because another dimension of the case reportedly is still being investigated, the report is not likely to be released until after the election.

Similarly, the principal Whitewater investigation of the failed Madison Guaranty Savings & Loan Assn., involving both Clintons, bogged down after Susan McDougal refused to testify before a federal grand jury in Little Rock. The prosecutors are said to believe that Susan McDougal, on the basis of comments she made in a television interview after her conviction, could offer testimony about Whitewater finances that would contradict sworn testimony by the first lady.

Prosecutors consider Susan McDougal an especially crucial witness. She had intimate knowledge of the Clintons’ involvement in the Whitewater financial transactions. During the first Whitewater trial, her former husband, James McDougal, testified that he was not able to respond to prosecutors’ questions and suggested that they ask Susan McDougal instead. They could not do so because she had invoked her right not to testify at the trial.

Susan McDougal, who was sentenced to two years in prison, refused to testify despite being granted immunity from further prosecution and has been in jail since Monday under an 18-month sentence for contempt. She has steadfastly insisted that she knows of no wrongdoing by the Clintons.

She and her attorney, Bobby McDaniel, have accused the independent counsel’s office of offering her leniency if she would implicate the president and first lady in a criminal offense.

In a prepared statement, Starr vehemently denied any such offer and accused Susan McDougal and McDaniel of “brazenly trying to deceive the public.”

James McDougal also has said publicly that he knows of no wrongdoing by the Clintons, but since his conviction on 18 felony counts he has reached an agreement with the independent counsel and has begun cooperating in the investigation.