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. Last Updated: 07/27/2016

First Whitewater Hearing Marked by Partisan Split

WASHINGTON -- Congressional hearings into the Whitewater affair opened Tuesday with an immediate party-line vote barring questions about the suicide of White House aide Vincent Foster.


White House counsel Lloyd Cutler, the leadoff witness, declared that White House aides violated no ethical rules by contacting banking regulators about a failed Arkansas thrift.


The House Banking Committee hearing, which is dealing primarily with contacts between the White House and federal regulators, is the first of several expected to look into the Clinton administration's ethics.


On a 31-19 vote, all Democrats supported committee chairman Henry Gonzalez's motion to bar questions about Foster's death, which has been ruled a suicide by law enforcement authorities and the Whitewater special prosecutor. All Republicans on the committee opposed the motion.


Senior Republican Jim Leach of Iowa chided the Democrats for restricting the hearing to "only about 5 percent of the Whitewater affair."


"Whitewater is about the arrogance of power," he said. "Breaches of the public trust, after all, cannot be long shielded in a democracy."


Foster, whose body was found in a Washington area park last year, was a longtime Clinton friend and handled some Whitewater matters for the president.


The early party-line vote cast a partisan tone to the opening of the hearing into the way aides to Clinton handled the federal investigation into Madison Guaranty Savings and Loan. The institution had ties to investments by Clinton and his wife Hillary into the Whitewater resort in Arkansas.


Cutler told the committee that "no White House staff member made any effort to change any decision" by banking regulators. Republicans planned to challenge that and also to question whether the administration's explanations in the Whitewater affair have been completely forthcoming.


The Whitewater affair has its roots in the early business dealings of the Clintons. It derives its name from Whitewater Development Corp., which lost money for several years and the Clintons sold out their interest in 1992. The Clintons say they invested and lost $68,900 in Whitewater.


Questions about Whitewater arose last year as federal regulators began reviewing the failure of Madison. They questioned whether funds from the savings bank may have been illegally diverted to pay off the political and personal debts of prominent Arkansans, including Clinton.


Accounts of Whitewater-related discussions between the White House and Treasury have been seeping out over the past five months. The first congressional hearings are limited in scope to those contacts, leaving out the bulk of issues in the Whitewater affair, which are under investigation by Whitewater prosecutor Robert Fiske. Fiske already has concluded that the White House-Treasury contacts were not criminal.


Much of what comes out in the hearings, even the Republicans concede, will be material already disclosed.


But one question that remains is exactly what Clinton learned about the Whitewater-related referrals by Treasury to the Justice Department and what, if anything, he did after that.