November 15, 1998

NEWS ANALYSIS

Starr Returns to Issue That Started Inquiry -- Whitewater

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By DON VAN NATTA Jr.

ASHINGTON -- Less than a week before he is scheduled to testify before the House Judiciary Committee, Independent Counsel Kenneth Starr has apparently abandoned his inquiry into President Clinton's sex life, the portion of his investigation that repulsed most Americans.

But Starr has refused to give up. He has aggressively returned to his original mission, the Clintons' failed real-estate venture named Whitewater, whose complexities baffled and bored most Americans.

Friday afternoon, Starr sent some remnants of his sex-and-cover-up inquiry to the Judiciary Committee. The evidence, contained in two boxes, related to Clinton's dealings with former White House volunteer Kathleen Willey, who accused the president of groping her just outside the Oval Office in 1993.

But this time Starr did not argue, as he had in his September referral regarding the president's affair with Monica Lewinsky, that Clinton's actions involving Ms. Willey constituted impeachable offenses. He left that question up to the Judiciary Committee. But Democratic members and critics of Starr chided his silence as an acknowledgment that his sex-and-lies inquiry had run out of gas.

In a sign that he was not retreating, within an hour after the boxes were sent to Capitol Hill, Starr forged ahead on his Whitewater inquiry, which was his mandate when he was appointed in August 1994.

A federal grand jury here returned a 15-count indictment against Webster Hubbell, a longtime friend of Clinton and Hillary Rodham Clinton. In a case headed by Starr's prosecutors, the grand jury charged Hubbell with fraud, perjury and impeding the inquiries of federal banking regulators who had investigated many of the original Whitewater accusations. Until then, it had appeared that the Whitewater inquiry was winding down.

But Starr remains especially interested in the role that Hubbell and Mrs. Clinton played in a land transaction that helped lead to the collapse of a savings and loan institution in Arkansas. Mrs. Clinton is referred to in the indictment only as Hubbell's "billing partner" for work she had done on the land deal while at the Rose law firm. In 1996, Mrs. Clinton appeared before Starr's grand jury to answer questions about her work at the firm.

Mrs. Clinton's spokeswoman, Marsha Berry, said Saturday that the first lady would not comment on Starr's actions.

The two maneuvers Friday surprised and confounded Starr's allies and adversaries on Capitol Hill and at the White House. Both sides had spent much of the week preparing for his appearance before the Judiciary Committee on Thursday.

When told that the Willey matter had been sent to Congress without an impeachment referral, one of Starr's most outspoken allies expressed astonishment. "How can they do that?" the ally finally said. "That's crazy."

A Democratic strategist gloated over Starr's most recent decisions, predicting that they would further alienate him from a majority of Americans, who have expressed distaste for the impeachment inquiry in polls and the Nov. 3 midterm congressional elections, in which Democrats did surprisingly well.

"This is Starr telling the world: 'I'm alive. I'm still here. I'm still important,"' the strategist said. "It seems to mean that he is not going anywhere for a long time."

If last week was a guide, Starr's testimony will provide a portrait of the divided and partisan Judiciary Committee. Republicans hope to keep the proceedings focused on the accusations of misdeeds by Clinton, while Democrats hope to portray Starr as overzealous and politically motivated.

In a preview of the partisanship, a Republican committee aide said that the chairman, Rep. Henry Hyde, R-Ill., planned to limit questions by Democrats to the president's conduct and block all efforts to attack Starr.

"If that happens," one Democratic strategist said, "I think there will be nuclear warfare."

Starr's decision to send documents regarding Ms. Willey to the House without a referral was a departure from the September referral on the Lewinsky matter. In that 445-page referral, Starr argued that the president had committed 11 impeachable offenses of perjury, obstruction of justice, witness tampering and abuse of authority. But many Americans criticized the Starr report as unnecessarily lurid in its details of the president's affair with Ms. Lewinsky.

Several opponents of Starr said they believed that some of his prosecutors were angry that the report did not persuade a majority of Americans that Clinton should be impeached.

When Starr is sworn in Thursday to testify as the Judiciary Committee's first -- and perhaps only -- witness, he will undoubtedly be asked to explain his office's recent moves and its plans. Although Starr's allies say he looks forward to the opportunity to explain and defend himself, they also say he will not reveal any information about his office's continuing criminal inquiries.

Starr huddled in his office last week with senior aides, drafting an opening statement.

His testimony, which will be televised, and the public's reaction to it, could have as lasting an impact on Congress' handling of the impeachment question as Clinton's Aug. 17 grand jury testimony.

And Thursday, Starr will switch roles when he is confronted with hostile questions from Democratic committee members who intend to challenge his office's methods and motives.

More likely, Starr's appearance will have a limited impact on the impeachment process, which has been nearly crippled by polls and the Democrats' surprisingly strong showing in the midterm elections.

Committee Republicans are divided on what they want to hear from Starr.

Rep. Lindsey Graham, R-S.C., a committee member, said: "It's going to be a good forum for him to explain his actions, and how did he start in Whitewater and end up in the Paula Jones case."

But Rep. Charles Canady, R-Fla., a committee member, said it would be a "wild goose chase" to review how Starr ended up pursuing the Lewinsky matter.

"I hope his presentation will focus on the central issues concerning whether the president obstructed justice and lied under oath," Canady said.

Some Republican committee members hope that Starr's performance re-energizes the impeachment proceedings, which many lawmakers believe are doomed to fail when the full House votes on articles of impeachment. To help the members, Republican staff members distributed a memorandum of "positive points" about Starr.

Aides said last week that committee members also planned to quiz Starr about other aspects of his four-year-old investigation.

Despite the indictment of Hubbell on Friday, Starr has not provided his conclusions in his examination of the ties between the Clintons and the corrupt savings and loan association in Arkansas that was owned and operated by James and Susan McDougal, the Clintons' business partners in the Whitewater land deal in the 1980s.

Hubbell has accused Starr of prosecuting him in an effort to get him to lie about the president and Mrs. Clinton. Friday, Hubbell told reporters, "I don't know of any wrongdoing on behalf of the first lady or the president, and nothing the independent counsel can do to me is going to make me lie about that."

Earlier this month, Julie Hiatt Steele, a former friend of Ms. Willey, was informed that she was a target of Starr's inquiry. Ms. Steele had initially confirmed aspects of Ms. Willey's account but later disavowed it and has testified that Ms. Willey asked her to lie about the incident involving Clinton.

Nancy Luque, Ms. Steele's lawyer, said Friday that prosecutors had tried to pressure Ms. Steele to change her story. "They thought they could terrorize her to go along with the program," Ms. Luque said.

One issue likely to be raised with Starr is the accusation that Starr's office received, through intermediaries, a tip about Linda R. Tripp before she officially contacted the independent counsel's office on Jan. 12 to disclose Ms. Lewinsky's involvement with the president.

At a hearing last month before a U.S. Court of Appeals, Starr bristled at criticism of his office. He appeared uncharacteristically combative as he defended its handling of the Hubbell tax case.

"I'm doing exactly now what I did in 1994 and not a peep was raised," Starr told the three-judge panel. "I shouldn't say me. I'm getting personal. The independent counsel."