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Clinton Calls for Special Counsel to Probe Land Deal : Presidency: Aides say request for Reno to name investigator is designed to end 'barrage of innuendo' that may threaten agenda. First Family denies wrongdoing.

January 13, 1994|JOHN M. BRODER and DAVID LAUTER | TIMES STAFF WRITERS

WASHINGTON — President Clinton, grudgingly capitulating to intense political pressure, asked Atty. Gen. Janet Reno on Wednesday to name a special counsel to investigate the tangled Whitewater real estate and banking affair.

In a letter to Reno from White House Counsel Bernard Nussbaum, Clinton called for appointment of a "respected, impartial and qualified attorney, who is not a member of the Department of Justice or an employee of the federal government, to conduct an appropriate independent investigation of the Whitewater matter and report to the American people." The investigation should be done "as expeditiously as possible," the letter said.

Reno said she had begun compiling a list of candidates for the position and intended to name the special counsel "as soon as possible."

Although she declared that the appointee would be granted substantial authority and should be "ruggedly independent," she left vague the parameters of the forthcoming investigation. She said she would "make sure that the scope of the investigation was sufficient to achieve the purpose that we're trying to secure by seeking an appointment."

The move, designed to end a political nightmare that has consumed vast amounts of White House time and energy, comes after three weeks of public pounding during which Clinton and his wife, Hillary Rodham Clinton, have insisted on their innocence and staunchly resisted an independent inquiry.

White House aides said the Clintons gradually found their position politically untenable. The impression of White House stonewalling "could end up interfering with the President's agenda," senior adviser George Stephanopoulos said in announcing the decision. "We did not want that."

He said the Clintons reluctantly agreed to the naming of a special counsel in hopes of putting an end to what he called "a barrage of innuendo, political posturing and irresponsible accusations."

The White House announcement came hours after Senate Minority Leader Bob Dole (R-Kan.) demanded a congressional investigation of Whitewater events. White House aides, asserting that their decision would thwart such a step, pointed to Dole's own declaration in a letter to Reno last week that if she appointed an special counsel, "there would be no second-guessing" of the investigation.

Under congressional rules, the Republican minority cannot conduct an investigation on its own, and Democratic leaders seem unlikely to permit such an investigation to start now.

"Calls for a select congressional committee are unnecessary and are clearly an attempt to politicize this matter," Senate Majority Leader George J. Mitchell (D-Me.) said in a statement. "As previous experience has shown, an immediate congressional inquiry will complicate and could even undermine the efforts of the special counsel."

For Clinton, this week was supposed to be dominated by high-profile meetings in Europe. But senior White House aides here and in Europe found themselves spending hours on transatlantic phone lines over the last three days and nights, devising a strategy for handling the messy affair involving the Clintons' dealings with an Arkansas real estate investor and savings and loan operator.

Even as he was appearing with Ukrainian President Leonid Kravchuk on Wednesday to announce an agreement for the nuclear disarmament of Ukraine, Clinton was dogged by questions about his Arkansas business dealings.

"I have nothing to say about that on this trip," the President said. "I have nothing else to say about it."

After a day full of meetings on Tuesday, the Clintons and their aides concluded that the appointment of a special counsel, however unpalatable it might be in the short run, would quickly remove Whitewater from the front pages of the nation's newspapers. A key factor in the decision, officials said, was Hillary Clinton's agreement that only the naming of a special counsel could control the political damage caused by the Whitewater story.

Whitewater Development Corp. was an Ozark Mountains vacation resort in which the Clintons invested with a friend, James B. McDougal, and his wife, Susan, in 1978. McDougal owned Madison Guaranty Savings & Loan, which was seized by federal regulators in 1989 at a cost to taxpayers of at least $47.6 million.

The real estate deal went sour as well, with the Clintons, by their account, losing $68,900.

Republican members of Congress and government investigators have raised questions about whether money from the thrift may have found its way into Whitewater's coffers or into Clinton's 1984 campaign for governor. They have also asked whether the thrift may have received favorable treatment from Arkansas authorities while Clinton was governor.

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