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Clinton Aide May Have Tried to Affect Probe


WASHINGTON — A senior White House official inquired last month about removing a prominent Republican hired by the Resolution Trust Corp. to investigate claims arising from the failure of Madison Guaranty Savings & Loan, according to sources familiar with the discussions.

The sources said senior White House officials George Stephanopoulos and Harold M. Ickes were alarmed and outraged when they discovered in late February that the RTC, an independent regulatory agency, had hired Jay B. Stephens to handle possible civil suits growing out of the Madison Guaranty case. Stephens severely criticized the Clinton Administration after he was fired as U.S. attorney for the District of Columbia in March, 1993.

The White House apparently dropped the subject of reversing the hiring of Stephens after being told by Deputy Treasury Secretary Roger Altman and Treasury Chief of Staff Joshua Steiner that there was nothing to be done.

But the efforts to find out whether Stephens could be replaced represents the first time the White House has been shown to have actively attempted to affect the handling of the politically sensitive investigation. One area of the RTC civil investigation concerns the potential liability of the Rose Law Firm, including former partner Hillary Rodham Clinton, for its representation of Madison Guaranty.

Senior White House officials raised the issue of Stephens' hiring in two conversations with the Treasury Department officials on Feb. 25, just after discovering Stephens had been retained.

Ickes, the deputy chief of staff, and Stephanopoulous, Clinton's senior adviser, called Altman, who was also serving as acting head of the RTC and had just announced he would recuse himself from the RTC's investigation of Madison Guaranty. Stephanopoulous also spoke with Steiner.

Stephanopoulos said Friday he did not "remember exactly what was said" during his conversation with Steiner but that he "asked how Jay Stephens came to be retained by the RTC. I was puzzled and blew off steam over the unfairness of that decision. . . . Once I got the facts from Josh, that ended the matter as far as I was concerned."

Stephanopoulos said he did not remember asking Steiner whether the decision could be reversed or discussing the issue with Altman. Ickes declined to comment.

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