The billing records raise new questions about whether Mrs. Clinton misled investigators about her legal work for James McDougal, the Clinton ally and business partner who ran Madison into the ground. The thrift’s collapse cost the taxpayers $60 million; McDougal goes on trial in March on related fraud charges. One big issue is a Madison land deal with Arkansas businessman Seth Ward, father-in-law of Webster Hubbell, the former Rose Law Firm partner who was convicted last year of bilking clients. Federal investigators say the land deal, part of a project called Castle Grande, was a “sham” that contributed to Madison’s demise. The billing records show that Mrs. Clinton talked to Ward 14 times while the deal was being put together. Last year Mrs. Clinton, under oath, told federal regulators she couldn’t recall anything about the project. The notes in Foster’s handwriting are suggestive, too: congressional investigators speculate that the printouts may have been among papers they believe were removed from Foster’s office shortly after his death. White House aides were unable to explain how the billing records wound up in Huber’s office.
To the obvious delight of congressional Republicans, the strange discovery of the Rose Law Firm records was not the only In April ‘94 Hillary took Whitewater questions–but new ones are surfacing In ‘96 embarrassment to the First Lady last week. A day earlier White House officials released a memo written by David Watkins, a former Little Rock adman who until 1994 served as the White House’s administrative chief. The memo was devastating. It charged that Mrs. Clinton was the driving force in Travelgate, the abrupt firing of seven career employees in the White House Travel Office in 1998. Watkins wrote that he and Thomas F. (Mack) McLarty, the former White House chief of staff, “both knew there would be hell to pay if. . . we failed to take swift and decisive action in conformity with the First Lady’s wishes.” What were those wishes? Notes taken by another aide show that Susan Thomases, Hillary Clinton’s friend and lawyer, bluntly warned that “Hillary wants these people fired.” As the news media reported at the time, a Clinton friend named Harry Thomason was part owner of an air-charter company that coveted the White House travel business. “Once this made it onto the First Lady’s agenda, Vince Foster became involved, and he and Harry Thomason regularly informed me of her attention to the Travel Office situation,” Watkins wrote.
McDougal, Ward, Watkins, Thomason-and, tragically, Vince Foster. The ever-expanding cast of characters in what Republicans now call “the Clinton scandals” may be hard to follow, but the theme is increasingly obvious: year after year, her friends seem to have been working overtime to protect the First Lady. Watkins’s memo suggests that White House staffers were less than accurate when they told Congress Mrs. Clinton played “no role” in Travelgate. The Rose Law Firm records reopen the issue of whether Mrs. Clinton was entirely candid when she said, in a sworn response to federal regulators, that her work for Madison had been “minimal.”
Though no one accuses Mrs. Clinton of wrongdoing – and while White House officials still insist there are no credible charges against her staff-the legal morass is getting deeper. The Senate Whitewater committee is considering asking for perjury charges against Susan Thomases and Maggie Williams, Mrs. Clinton’s chief of staff, in connection with their testimony about the re-moral of documents from Foster’s office. A House committee has subpoenaed Watkins. NEWSWEEK has learned that Waltkins told the FBI in 1993 about a phone call concerning the Travel Office in which Mrs. Clinton said “action needed to be taken immediately to be certain that those not friendly to the administration were removed and replaced with trustworthy individuals.”
And White House lawyers failed to mention Mrs. Clinton’s peripheral involvement even when, in the panicky attempt at damage control after Foster’s suicide, she seemed to do the proper thing. That happened when his torn-up suicide note was belatedly discovered by former White House counsel Bernard Nussbaum and two aides. Nussbaum tried to show Mrs. Clinton the note–but according to sworn testimony, she responded that “she did not understand why she had been brought into the room” and left without looking at it. Nussbaum and the others omitted that fact in subsequent interviews with the FBI.
In her NEWSWEEK interview, Mrs. Clinton denied directing any cover-up after Foster’s death. She insisted the White House has cooperated fully with Whitewater investigators and again said her work for Madison Guaranty was not “significant.” The newly discovered billing records broadly support her statements about the amount of time she spent–though not necessarily the implication that the results were minor. David Kendall, the Clintons’ lawyer, was asked by NEWSWEEK whether Mrs. Clinton needed to supplement her previous testimony about her work for Madison. Kendall said he was reviewing her sworn statements and would amend them if necessary. The odds are he will have to do so-and that Hillary Clinton faces tougher questions ahead.
PHOTO (COLOR): In April ‘94, Hillary took Whitewater questions–but new ones are surfacing in ‘96
THE FIRST FAMILY’S TROUBLED CIRCLE
Though Mrs. Clinton has long said she was only a peripheral figure in Whitewater and the Travel Office firings, new evidence undermines her claims. Congress and the special prosecutor are investigating. A guide to the east of characters.
James McDougal Madison’s owner and Clinton Whitewater partner has said he gave Hillary legal work at Bill’s request. Newly released records cast doubt on her claim that the work was “minimal.”
Susan McDougal An indicted ex-Arkansas judge, David Hale, claims Bill Clinton pressured him to make a small-business loan to McDougal’s wife. A portion of this money ended up in the Whitewater account.
Beverly Bassett Schaffer Investigators are interested in just how much contact Mrs. Clinton had with this Arkansas regulator – and appointee of Governor Clinton. Both women say it was insignificant.
James Blair Hillary’s adviser in her cattle-futures killing, Blair also loaned McDougal $1,000 to buy the Clintons’ share of Whitewater after the 1992 electio – and told him to shut up about the land deal.
Harry Thomason This old Arkansas friend urged Hillary to clean out the office that handles presidential press travel– and his air-charter firm then bid for the travel business.
David Watkins The former Clinton aide took the fall for Travelgate but wrote a memo, discovered last week, claiming the firings conformed with “the First Lady’s wishes.”
Vincent Foster Hillary’s closest friend at Rose and a White House lawyer, Foster helped tidy up Whitewater for the Clintons. His suicide note suggests he was agonizing over Travel-gate on the day of his death.
William Kennedy His note at a meeting of Clinton lawyers-“Vacuum Rose law files”–is intriguing investigators. The former White House attorney says he was referring to a gap in the files, not a pending cover-up.
Maggie Williams Chief of staff to Mrs. Clinton, Williams’s recollections about what happened to Foster’s files after his death don’t square with what others have testified. Investigators are pursuing the discrepancies.
Susan Thomases Hillary’s pal helped prepare the response to the first reports about Whitewater in ‘92. Her notes show that Mrs. Clinton’s connections to McDougal were played down from the start.
