AS USUAL WITH WHITEWATER, THE known facts could be looked at two different ways. There was the benign image of President Bill Clinton, Griever in Chief, sharing the pain of his friend Arkansas Gov. Jim Guy Tucker in a consoling phone call to Little Rock just hours after Tucker had been convicted for conspiracy and fraud. ""I've known Jim Tucker for years, and on a personal level I'm sad for him and his family,'' the president told reporters in a calm but mournful voice. Then there was the more jaundiced view from the ""war room,'' a drab and windowless bunker in downtown Little Rock where the Arkansas staff of the Whitewater independent counsel plotted strategy. The prosecutors there wondered just exactly what, aside from sympathy, the president might have offered his old buddy and successor as governor. Tucker, after all, faces up to 10 years in prison, not to mention another criminal trial for tax evasion. He could avoid serious time by agreeing to testify for the Feds in future Whitewater cases. Unless, that is, he wants to remain silent out of loyalty, or because he doesn't know that much. Or there is the possibility -- suggested by the more cynical prosecutors -- that Tucker hopes to hold out for a pardon from the only man with the power to grant it: President Clinton.
Whitewater never goes away; it just keeps branching out, like cracks in a poorly laid foundation. Old woes, from Paula Jones to Vincent Foster, will threaten the Clintons through a potential summer of scandal and for months, if not years, of legal wrangling to come. Taken together, these problems suggest anew that the Clintons brought troubling habits from Little Rock to Washington. Until now, the image of Clinton as charming dissembler suited his good-ole-boy shtik, and Mrs. Clinton's persona as a tough lawyer and protective mother made her a feminist role model. But a special prosecutor poking into their world can only see grist for subpoenas -- or worse.
The convictions of Tucker and the Clintons' Whitewater partners, James and Susan McDougal, gave new life to a story that had grown stale. According to the new NEWSWEEK Poll, most people think the Clintons did something wrong -- but, for now, most voters don't care. That could change. Later this month, Sen. Al D'Amato is expected to reveal an FBI report about new fingerprints found on Mrs. Clinton's long-subpoenaed law-firm billing records, the Whitewater road map that had disappeared for two years before surfacing in the family quarters of the White House. D'Amato told NEWSWEEK that he is likely to urge special prosecutor Kenneth Starr to investigate whether Hillary confidante Susan Thomases -- and possibly others -- committed perjury before his committee. Meanwhile, in Little Rock, another pair of the president's cronies will go on trial for illegally diverting bank funds into Clinton's 1990 race for governor. And in Washington, the investigation into Travelgate and possible cover-ups by the First Lady and her staff is, according to Starr, ""very active.''
The White House adamantly points out that there is still no evidence of criminality by the president or the First Lady. In videotaped testimony in the McDougal-Tucker case, Clinton denied he had urged the prosecution's chief witness, David Hale, to make an illegal loan to Susan McDougal. The jurors generally found Clinton credible. Their verdict, they said, was based on documentary evidence that never mentioned Clinton.
All true, but such defenses overlook a crucial point. In a complex case like Whitewater, prosecutors work deliberately. By winning convictions and threatening prison, they seek to ""flip'' low-level defendants and ""turn'' them as witnesses for the prosecution. The case is like ""climbing a pyramid with the Clintons on top,'' says James B. Stewart, author of ""Blood Sport,'' the best-selling chronicle of the early days of Whitewater. ""I'd say the prosecutors are about halfway up.''
Little wonder, then, that Starr had to work to suppress his glee at last week's verdicts. His four prosecutors had resented insinuations that they were merely fronting for the GOP. ""Strong and bitter words indicate a weak cause,'' read a placard on the wall of the independent counsel's war room. On the eve of the McDougal-Tucker trial, NEWSWEEK has learned, some prosecution team members had discussed naming the president as an unindicted co-conspirator. They didn't, and morale reached a low point last month when Clinton handled himself masterfully under oath. Realizing that an acquittal in their first major trial would spell the end of Whitewater, some lawyers on the staff were planning to go home. The convictions changed everything.
So where is Whitewater heading? There are two main avenues of investigation, one in Arkansas and one in Washington:
Friend of Bill is not Jim or Susan McDougal, a pair of amiable scamsters who would make unreliable witnesses, but Tucker. He has been close to the Clintons, sometimes as a rival, sometimes as an ally, for nearly 20 years. Tucker, who last week announced he will resign as governor, insists he has no damaging information to divulge, but his lawyer has already had talks with Starr about how to ""bring closure'' to Tucker's legal problems. Prosecutors would like to know, for example, why Susan Thomases, in March 1992, wrote a note to herself that said, ""B.C. [Bill Clinton] says call Jim Guy Tucker.'' At the time, Thomases was assigned to handle New York Times reporter Jeff Gerth, who was beginning to ask questions about the Whitewater land deal. Last year Thomases told D'Amato's committee she did not believe she talked to Tucker.
Prosecutors are also curious about Tucker's Oct. 6, 1993, meeting at the White House with Clinton. Aides say the two men discussed nothing more than locating a defense plant in Arkansas, but the session came just a few days after the president had received a secret ""heads up'' that federal regulators had recommended that the Justice Department investigate McDougal's failed S&L for fraud. Tucker, who was a lawyer for the S&L in the mid-1980s, was named as a potential target in the case, and Clinton was identified as a witness.
Tucker may know even seamier secrets about the president. A few weeks after the October '93 meeting, Tucker called in one of the state troopers who had once been assigned to guard Clinton and warned the officer not to go public with stories about Clinton's alleged philandering. When the trooper ignored this advice, he was demoted. There have long been reports that Clinton tried to silence another state trooper by offering him a federal job, but the White House has strongly denied these accounts.
Starr's more immediate concern is to convict -- and then possibly flip -- a pair of old Clinton pals named Herby Branscum and Robert M. Hill, who go on trial on June 17. The two small-town bankers from Perry County are accused of illegally funneling money into Clinton's 1990 gubernatorial campaign. Clinton will have to testify again, this time about a Dec. 14, 1990, meeting in the governor's office at which Hill handed Clinton a $7,000 post-campaign contribution. Prosecutors will argue that at the same meeting Clinton discussed appointing Branscum to the powerful state highway commission. Branscum's lawyer dismissed any suggestion of a quid pro quo as ""absolutely preposterous.'' Indeed, Arkansas observers scoff at the idea that $7,000 could have made the difference. ""Hell, the highway commission costs a lot more than that,'' jokes Max Brantley, the editor of the pro-Clinton Arkansas Times. But sources close to Starr tell NEWSWEEK that the contribution has to be looked at in a broader context: the $180,000 in personal loans that Branscum's bank extended Clinton for the '90 campaign. Clinton himself is not accused of anything in the case, but convictions could lead to more serious problems if the bankers start talking.
Back in Washington, Roger Adelman, a prosecutor hired by Starr to probe Travelgate, is hunting for evidence that Mrs. Clinton covered up her role in the firing of seven employees from the White House Travel Office in 1993. Mrs. Clinton originally told government investigators that she had nothing to do with the dismissals, but a memo written months later by aide David Watkins alleges that the First Lady was very much involved and that ""there would be hell to pay'' if the staffers weren't fired to give the business to Clinton friends. (Mrs. Clinton denies this account.) Watkins is now under intense pressure from prosecutors to talk, though he is ailing: his lawyer says that Watkins suffers from fainting spells and has sought treatment at the Mayo Clinic. (Whitewater can be bad for your health: McDougal has heart trouble, and Tucker needs a liver transplant.)
Both the independent counsel and D'Amato would like to find out how Mrs. Clinton's billing records suddenly turned up last January. Mrs. Clinton's fingerprints have been found on the records; D'Amato hopes the FBI's analysis will present a clear ""chain of custody.'' By finding out who else handled the records, it may be possible to learn how they moved from the Rose Law Firm, where they were kept until the press began asking questions about Whitewater in March '92, to the White House family quarters. Investigators are particularly interested in knowing whether the records were spirited out of Foster's office after the deputy counsel killed himself in July 1993.
At the White House, besieged aides won't be surprised by another grand jury subpoena for Mrs. Clinton, who testified for nearly four hours last January. Starr would not consider indicting the First Lady for false statements or obstruction of justice unless he was absolutely sure he had a very strong case, and he is still a long way from making such a decision. Likewise, there's another long-term case dogging the Clintons -- Paula Jones's sexual-harassment suit against the president. Though it probably won't go to trial until after November, legal arguments about whether a president can be sued while in office will keep the charges in the news.
In a sense, the slow wheels of justice favor the Clintons, probably putting off any real legal crises until after the election. But the prospect of a president enmeshed in scandal as his second term begins has uncomfortable echoes. Whitewater may not be Watergate, but the impact on the country could be just as dispiriting if it turns out the Clintons really do have something to hide. The machinery of the independent counsel is relentless. It now has a charge strong enough to last for a long time. ..MR.-
In the Newsweek Poll, 58% think the administration is knowingly covering up information about Whitewater that could damage the Clintons ..MR0- ..MR.-
69% say allegations that the Clintons or their aides interfered with Whitewater investigations are important in judging Clinton as president ..MR0- ..MR.-
65% of voters say Whitewater, Travelgate and questions about Hillary Clinton have not made them less likely to vote to re-elect Clinton in November ..MR0-
WHITEWATER'S TANGLED WEBS ..MR.-
The convictions in Little Rock were the first jury verdicts in the series of scandals stretching from Arkansas to Washington. The cast of characters-and where the case goes from here: ..MR0-
Convicted of conspiracy and mail fraud, he faces 10 years in jail. He could cut a deal-if he knows anything damaging. When Whitewater reemerged in '93, Clinton met with him and once told an aid to call Tucker about the budding scandal.
The "Little rock phase" moves closer to Clinton with the June 17 trial of _B_Herby Branscum Jr. and Robert Hill_b_. Bother are indicted for funneling funds from their Perry County Bank into Clinton's 199- campaign, then paying themselves back by claiming phony expenses. They also allegedly failed to report large cash withdrawals for Clinton campaign workers to the IRS. After Hill personally handed Clinton $7,000 in contributions, Starr says, partner Branscum was made a highway commissioner.
convicted on 18 of 19 counts, McDougal could get 84 years in prison. The dispute over Hillary's legal work for his freewheeling S&L is at the center of the Washington branch of the scandal, but McDougal is now badly tarnished.
The Little Rock jury believed Clinton, but it will be a difficult summer as D'Amato reports on his Senate inquiry, another trial raises pointed questions about Arkansas sleaze and Paul Jones presses her sexual-harassment suit.
The senate and the special prosecutor are pursuing charges that the First Lady may have misled investigators about Travelgate and Whitewater. And there is the mystery of how her billing records reappeared near her study after two years.
Her lawyer says she's got nothing to say to Starr, but the 42-year-old faces 17 years in prison. A partner whose fraudulent loan ended up in the venture's account, she may know as well as anyone where Whitewater went wrong.
The New York lawyer's repeated phone calls to and from Hillary and White House aides after Vincent Foster died-and her inability to remember what was said-has prompted D'Amato's request for a perjury investigation by Starr.
Hillary also called Williams, her chief of staff, when she heard Foster had died, and Williams was in his office that night. Her memory lapses about what happened in the following hours have twice landed her in front of a grand jury-and could again.
A contemporaneous Watkins memo claims Hillary pressured him to purge the travel office. Hillary has denied this; if the special prosecutor's probe hears Watkins out, the First Lady could find herself in serious legal trouble.