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Ex-Clinton Confidant Tries to Trace Whitewater Papers

February 08, 1996|ROBERT L. JACKSON | TIMES STAFF WRITER

WASHINGTON — Webster L. Hubbell, the imprisoned former confidant of President Clinton and his wife, suggested Wednesday that long-lost copies of the first lady's law firm billing records may have been at the White House at the time they were subpoenaed two years ago.

Appearing before the Senate Whitewater Committee, the disgraced Justice Department official who was Hillary Rodham Clinton's former law partner, said he believes that the late White House lawyer Vincent Foster may have had possession of the copies from the time they were made during Clinton's 1992 presidential campaign until Foster committed suicide in July 1993.

In the same response he gave to many questions, Hubbell said, "I don't know," when asked if Foster had ever given the copies to the first lady. He added that "they could have been" among files in Foster's office, which White House aides kept Justice Department investigators from examining after his suicide.

Glancing at handwritten notes that Foster made on the copies, Hubbell said he did not know what happened to the documents after he and Foster had used them to answer press inquiries about Hillary Clinton's legal work for a failed savings and loan at the center of the Whitewater controversy.

But Hubbell, remarking about one notation, suggested that Foster might have been preparing to send some of the copies to the first lady. "It looks like it's directed to Mrs. Clinton," he said.

The committee heard testimony last summer that Margaret Williams, the first lady's chief of staff, carried files out of Foster's office immediately after his suicide, at the direction of then-White House Counsel Bernard Nussbaum.

The sudden discovery of the records in the White House living quarters adjacent to the first lady's private office has spurred not only Senate interest but a federal grand jury inquiry into possible obstruction of justice--if evidence is found that anyone deliberately concealed the records for two years.

Hillary Clinton has said she told grand jurors last month she did not know how an aide, Carolyn Huber, happened to find the documents in the White House book room last August. Huber testified that she immediately stored them in her office until she rediscovered them in January, realizing then what they were and arranging to have them turned over to authorities.

Hubbell, who is serving a 21-month prison term for defrauding some of his clients and his former law partners, said he also testified recently about the records to a grand jury directed by Whitewater independent counsel Kenneth W. Starr.

The records had been subpoenaed by federal banking regulators in 1994 and later by Starr to determine what work the Rose Law Firm in Little Rock, Ark., had performed for Madison Guaranty Savings & Loan, once owned by the Clintons' business partner in the Whitewater real estate project.

Investigators are trying to determine whether funds from the failed thrift went into Clinton's 1990 campaign for governor or were used in any other way to benefit the president.

The newly found records show that Hillary Clinton, then a Rose Law Firm partner, billed Madison Guaranty for 60 hours of work over 15 months in the mid-1980s. She had 16 conferences, including telephone calls, with Arkansas businessman Seth Ward on Madison Guaranty's purchase of real estate known as Castle Grande, a deal that federal bank regulators have termed "a sham transaction" that seemed designed to evade a state law limiting the amount of real estate a thrift may own by itself.

Hubbell, who is Ward's son-in-law, said he did not accept this characterization, and Hillary Clinton has said she knew of no improprieties. Hubbell said Ward simply agreed to buy some land for the thrift in his own name if the S&L would advance him the funds.

Ward received a commission of $300,000, according to regulators.

Meanwhile, a House committee announced that it has issued 28 subpoenas to White House aides and Justice Department lawyers for documents related to the administration's firing of White House travel office employees in 1993.

Among those receiving subpoenas were senior presidential aides George Stephanopoulos and Harold M. Ickes; Lisa Caputo, spokeswoman for Hillary Clinton, and former White House lawyers Nussbaum and Neil Eggleston.

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