ROANOKE TIMES 
                      Copyright (c) 1995, Roanoke Times

DATE: Sunday, December 31, 1995              TAG: 9601020173
SECTION: NATIONAL/INTERNATIONAL   PAGE: A-5  EDITION: METRO 
DATELINE: WASHINGTON
SOURCE: Associated Press 

FRIEND TRIED TO BUY OUT WHITEWATER INVESTMENT ADVISER FORESAW DIFFICULTY

A close friend of Bill and Hillary Rodham Clinton confirmed that he lent ousted savings and loan executive James McDougal money to buy out the Clintons' shares in his failing Whitewater land development deal, according to a published report.

``I didn't think the Clintons should go to Washington tied to Whitewater,'' James Blair told Newsweek.

Blair is general counsel for Tyson Foods, one of the biggest companies in Arkansas. In 1979, he helped Hillary Clinton make a large profit trading cattle futures.

In the Jan. 8 edition of Newsweek, on newsstands Monday, Blair confirmed that he lent McDougal $1,000 to buy out the Clintons' shares in the Whitewater land development deal.

The transaction took place Dec. 22, 1992 - before the Clintons left Arkansas to live in the White House, Newsweek said.

By then, the Whitewater venture had attracted the interest of reporters and federal regulators and become a political liability.

The transaction was handled by the Clintons' late attorney, Vincent Foster, Newsweek reported.

Before becoming deputy White House counsel, a post he had when he committed suicide in 1993, Foster worked with Hillary Clinton in Arkansas at the Rose Law Firm. McDougal's failed thrift, Madison Guaranty Savings and Loan, was one of Hillary Clinton's clients.

Blair told Newsweek that he never told the Clintons about the loan and that McDougal never paid him back.

An aide to Sen. Alfonse D'Amato, R-N.Y., who spearheaded a congressional investigation into Whitewater, told Newsweek that the Clintons may have violated financial disclosure laws by not reporting Blair's $1,000 loan as a gift.

But the Clintons' attorney, David Kendall, disagreed. ``The money came from McDougal,'' Kendall told Newsweek. ``Legally, here's no issue.'' He said the Clintons disclosed the sale of their shares in Whitewater as required by disclosure laws.

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