Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, March 27, 1994 TAG: 9403270084
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
Important questions in the Whitewater affair remain for both a special prosecutor and Congress. But some answers came Friday when, after weeks of political pressure, the White House released the Clintons' 1977-79 tax returns, covering the earliest years of their Whitewater land venture.
They confirmed that the Clintons made a quick $100,000 on the commodities market and deducted $22,000 in interest on a Whitewater-related loan from their personal taxes in the first two years of the land venture.
More important, though, may be what the returns didn't show. After weeks of speculation that the Clintons were trying to hide something - why else withhold the tax documents? - the records seemed to hold no damaging revelations.
Two admissions of error - one by the Clintons, and the other by their former business partner - helped resolve another question: How much did the Clintons really lose on the investment?
Since January, Whitewater business partner James McDougal has publicly disputed the Clintons' estimate of losses. The first family had claimed since the 1992 campaign that they invested and lost $68,900 in Whitewater. McDougal has said he could recall their putting in no more than $13,500.
On Thursday, the Clintons acknowledged they had mistakenly counted some $22,000 in other payments as Whitewater-related, and lowered their estimate of losses to $47,000.
Faced with the tax returns, McDougal admitted Friday that he had "substantially underestimated" their losses.
"My face is red, I have to admit. . . . I'm sorry," McDougal said.
Answers in the Whitewater affair often seem to come in such awkward fashion.
A key question for Whitewater special prosecutor Robert Fiske's probe in Arkansas and congressional hearings in Washington is whether McDougal's now-failed savings and loan illegally diverted depositor funds to Clinton's gubernatorial campaign, his Whitewater venture or other prominent Arkansans.
Regulators alleged Friday that top White House aide George Stephanopoulos called Treasury officials last month to inquire whether a former Republican prosecutor could be removed from a civil investigation related to McDougal's S&L.
Time Magazine reported Saturday that Fiske may be considering one or more obstruction of justice indictments relating to Stephanopoulos' conversation with Treasury.
An investigation by House minority staff into Whitewater produced no "smoking gun," although some of the evidence raised new questions.
The most serious is whether top regulators tried to pressure the lead federal investigator in the Whitewater probe to change a conclusion embarrassing to the first family - that Whitewater may have been used to skim at least $70,000 from McDougal's S&L.
Also, Fiske is investigating the allegation made by former judge David Hale that then-Gov. Clinton pressured him in 1986 to make an improper federally backed loan to McDougal's wife that was to be used to cover past wrongdoing at the S&L.
Fiske secured Hale's cooperation before a grand jury last week in a plea agreement in which the former judge pleaded guilty to two fraoud charges.
by CNB