The Electronic Telegraph   Sunday 6 March 1994   World News

Panic hits scandal-ridden White House
By Ambrose Evans-Pritchard

Clinton crisis deepens as top aide quits

BILL CLINTON was facing the gravest crisis of his 14-month-old presidency yesterday as charges of a full scale cover-up of the Whitewater affair spilled over into accusations of abuses of power by senior White House officials.

Last night, the controversy claimed its first high-level victim. Bernard Nussbaum, the chief legal adviser to the President, resigned after it emerged that he and his staff had held improper meetings with federal officials to ascertain the progress of their investigations into Clinton's business affairs.

In his resignation letter to President Clinton, Nussbaum said he had made his decision "as a result of controversy generated by those who do not understand, nor wish to understand, the role and obligations of a lawyer, even one acting as White House counsel."

Seasoned observers in Washington say that the resignation of Mr Nussbaum - once a lawyer in the House impeachment investigations of President Nixon - indicates a degree of panic in the White House and suggests that there may be a ticking bomb in the Whitewater-Madison affair about the Clinton family's finances.

Washington was already reeling from the decision of the special prosecutor, Robert Fiske, investigating the Clintons' business dealing, to subpoena six top White House aides. They have been ordered to appear before a federal grand jury in Washington next Thursday.

The prosecutor made his dramatic move after it came to light that the aides had met Treasury officials three times to obtain advance briefings on the status of investigation into the Arkansas financial dealings linked to the Clintons - thereby interfering in what should be the wholly independent work of officials. Mr Fiske has now ordered that all White House documents must be preserved - a directive that extends even to the contents of office waste-paper baskets. The meetings have raised a storm in Washington, fuelling accusations that the White House has been engaged in a cover-up that has prejudiced the judicial process.

Mr Clinton this weekend told reporters: "I have told everybody on my staff to bend over backwards to be as co-operative as possible". He said that a rapid and thorough investigation was in everyone's interests to clear up the matter once and for all.

The Republicans have lost no time demanding congressional hearings, claiming that the executive branch is too tainted to regulate itself. "You're asking for big, big trouble and showing some stunningly bad judgment when you start mixing politics with law enforcement," said the Senate Republican leader, Robert Dole.

Another leading Republican, Newt Gingrich, went further: "The President is right on the precipice that Richard Nixon crossed."

The spate of revelations in recent days moves the scandal well beyond Arkansas. The presidency itself is now involved, and it is no longer possible for the White House to dismiss the allegations of wrongdoing as old stories from the 1980s dredged up by political opponents of the Clintons.

In an abrupt about-turn that spells more trouble for the President, the establishment press has begun at last to pursue the affair with vigour. On Friday, The New York Times published a thundering editorial entitled "White House Ethics Meltdown", excoriating a White House "dedicated to short-cutting justice to shield the financial affairs of Mr Clinton, his wife and their friends from scrutiny."

Until recently the prestige papers and television networks had remained aloof from the investigations, allowing themselves to be scooped on hard stories by tabloids, opinion magazines, and even by the foreign press.

Gleeful Republicans have already started offering odds on Al Gore's likely choice to fill his own job as vice-president. Senator Diane Feinstein of California is said to be the favourite.

But although the mainstream press is now catching up on the financial affairs of the Clintons, it is still failing to investigate serious allegations of bribery, sexual harassment, and intimidation. Also unremarked is the disappearance of documents that allegedly show the involvement of Clinton in soliciting a fraudulent loan while he was Governor of Arkansas.

Randy Coleman, a Little Rock lawyer, says that the documents had been sent from New York to help him in the defence of David Hale, who is facing trial later this month for allegedly defrauding an agency of the US federal government in the mid-1980s. Mr Hale claims that Governor Clinton was deeply involved.

"Federal Express told me that the documents had fallen out of the back of a truck in the Holland Tunnel, on the way to the airport," Mr Coleman said.

Electronic Telegraph is a Registered Service Mark of The Telegraph plc