ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Sunday, April 28, 1996 TAG: 9604290118
SECTION: NATIONAL/INTERNATIONAL PAGE: A-9 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: WILLIAM NEIKIRK and DAVID JACKSON CHICAGO TRIBUNE
THE PRESIDENT will provide a videotaped deposition in which he is expected to discuss his role in the Whitewater real estate venture.
The long-running Whitewater drama will play on the imposing stage of the White House today when President Clinton stars in a witness role that could stir up old questions about his character and credibility.
Clinton's testimony is expected to be narrow in his videotaped deposition for the criminal trial of his former Arkansas business partners, Jim and Susan McDougal. Clinton isn't charged with any wrongdoing.
He will deny allegations that he improperly used his influence as Arkansas governor to help obtain government-backed loans for the Whitewater land development scheme. ``A bunch of bull,'' he has called the accusations.
But the question is not so much whether a jury believes him but whether most Americans will be convinced that he's telling the truth.
The McDougals are scheduled to be on hand in the Map Room of the White House this afternoon when Clinton is questioned by the couple's attorneys, and then cross-examined by attorneys representing independent counsel Kenneth Starr.
``Credibility is the larger issue that the White House is worried about,'' said Charles Jones, presidential scholar at the University of Wisconsin. ``The Whitewater thing has gone on for so long and is so mind-numbing that it's lost some of its impact.''
The White House is keenly aware of the broader effect Clinton's testimony could have on attitudes toward the president and on the presidential campaign.
The political importance attached to his testimony is underscored by the fact that Clinton does not want the tape to be released for rebroadcast, lest it be, in his word, ``abused.'' The administration fears it could be used in campaign commercials by Republicans or by Floyd Brown, who was behind the ``Willie Horton'' ads used in the 1988 campaign against Democratic nominee Michael Dukakis.
Nine people have pleaded guilty so far in the Whitewater prosecution, with the McDougals and Arkansas Gov. Jim Guy Tucker on trial. But White House officials emphasize the president's willingness to cooperate and insist that since Whitewater was first disclosed four years ago, nothing has implicated the president or Hillary Rodham Clinton in a crime.
Jones said the White House's effort to control the damage from Whitewater was taking on the aspects of a political campaign.
While Sen. Alfonse D'Amato, R-N.Y., chairman of the Senate Whitewater committee, says the Clintons have dragged their feet in releasing Whitewater material, most Democrats, and even some Republicans, have said the D'Amato probe is running out of steam.
A sideshow to the testimony is mounting criticism over alleged conflicts of interest by Starr, a Republican. He is a $1 million-a-year, Washington-based partner in the Chicago law firm of Kirkland & Ellis. His client list includes many of Clinton's opponents, from tobacco firms to conservative foundations.
In addition, Kirkland & Ellis settled a lawsuit brought against it by the Resolution Trust Corp. at the same time that Starr's Whitewater staff was investigating the RTC's oversight of an Arkansas thrift that has figured in the Whitewater case.
Clinton took a veiled shot at Starr last week. Asked if Starr should step down because of possible conflicts, Clinton said Starr's record spoke for itself.
About 35 attorneys, technicians and court personnel will be in the room during the taping, as will Clinton's former friends and partners in the ill-fated Whitewater real estate development, the McDougals.
U.S. District Judge George Howard Jr. has barred those attending the deposition from revealing ``any aspect'' of it, including what Clinton says. Howard will monitor the proceeding today via a satellite link between the White House and his Little Rock chambers.
Clinton will be questioned by Little Rock attorney Darrell Brown, who also represents Tucker. Attorneys for Tucker and the McDougals have indicated they will limit questions to the allegation from the key prosecution witness, Little Rock loan broker David Hale, that Clinton pressured him to make an illegal loan.
Once Darrell Brown is done, Starr's assistant, W. Ray Jahn, will cross-examine Clinton.
Hale, who pleaded guilty to defrauding the Small Business Administration by funneling hundreds of thousands of dollars in federal loans to himself and his partners, is scheduled to report to prison next month to serve a 28-month sentence.
Hale first detailed his claims against Clinton in dozens of 1993 media interviews and then again during the nine days of testimony he gave this month in the Little Rock fraud trial of Tucker and the McDougals.
The convicted swindler said that one evening in early 1986, he, Clinton and McDougal met in McDougal's makeshift mobile home sales office and conspired to secretly funnel $300,000 into Whitewater Development Co., the investment in which the Clintons and McDougals were 50-50 partners.
Clinton and McDougal said they needed a loan ``as soon as possible,'' Hale testified.
``At one point, the governor [Clinton] said, `My name cannot show up on this,''' Hale said, and then three men agreed to post the loan to a shell corporation controlled by McDougal's wife, Susan.
Bank records and partnership files released so far by federal investigators have yielded no evidence that Clinton took part in a fraudulent loan. Hale did make a $300,000 loan to a shell company controlled by Susan McDougal, records show, and that money was deposited into the McDougals' joint checking account.
Jim McDougal shifted the cash through the accounts of several real estate projects, and bought land that was briefly held in the name of the Whitewater company. But records show that McDougal did not tell the Clintons of his activities and gave them misleading data when he did offer them financial statements about their partnership.
Hale's trial testimony about Clinton's alleged involvement was marred by inconsistencies.
He said the alleged meeting with Clinton occurred in the months before the loan was made on Feb. 28, 1986, for example. The meeting, he said, was held in McDougal's Castle Grande sales office because federal bank examiners had moved into McDougal's Madison Guaranty Savings & Loan.
But the examiners didn't arrive at the bank until March 4, after the loan was made, records show, and testimony has shown that McDougal did not use the Castle Grande office before that.
Hale's credibility is brought into question not only by his guilty plea in the Small Business Administration fraud case, but also by his admission that he lied to federal investigators who were investigating his businesses and misled the judge who accepted his March 1994 guilty plea. Hale is facing a state prosecution for insurance fraud as well.
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