OF PRIDE AND POWER

As a tactic, humility was clearly not an option. Not for Bernie Nussbaum. In repeated exchanges with Republicans on the special Senate Whitewater committee last week, the former White House counsel defiantly insisted that he had done exactly the right thing in July 1993 when he restricted the ability of federal investigators to review documents in Vince Foster’s office in the days after Foster’s apparent suicide. “I’m proud of my conduct,” Nussbaum declared at one point. To which Alabama’s Richard Shelby, a former Democrat, replied with a convert’s contempt for his old faith: “You’re probably the only person in America who’s proud of your conduct.”

Well, not the only person. Bill Clinton told reporters last week he believed that all his old friends, current aides and former colleagues who trudged up Capitol Hill to testify had “acquitted themselves quite well, and I’ve been proud of them.” Yet the President could not have been completely satisfied. Though they focused on Washington events of just two years ago and featured guaranteed headline-grabbing witnesses like the cantankerous Nussbaum, the Senate deliberations ended a four-week run last Friday pretty much where they had begun: with plenty of suspicious smoke but no apparent fire. The House hearings were different. In a single week, they clearly reinforced the claims by Clinton’s opponents that his Whitewater investment was a sweetheart deal.

Thousands of pages of documents released by House Banking Committee chairman Jim Leach supplied new information about the Clintons’ handling of their Whitewater real estate venture in the mid-1980s as well as their complicated relationship with business partner Jim McDougal. Rumpled and unfailingly polite, Leach claimed that his committee’s investigation had uncovered a pattern of cronyism in which McDougal ponied up most of the money for Whitewater while receiving favors from former Governor Clinton and his wife. “In a nutshell,” said Leach, “Whitewater is about…conflicts of interest that are self-evidently unseemly.”

Ever since Whitewater first surfaced as a potential scandal during the 1992 campaign, the Clintons have insisted on three points: that they were merely passive investors in a company controlled by McDougal and his wife; that they lost on the deal–as much as $68,900; and that they never gave McDougal or his businesses special treatment. The picture drawn by the papers released last week casts doubt on each of those assertions. Amid dozens of the documented contacts between the Clintons and McDougals on Whitewater-related issues, a 1981 letter sent by Hillary Clinton to Jim McDougal was especially ironic. “If Reaganomics works at all,” wrote Mrs. Clinton, “Whitewater could become the western hemisphere’s Mecca.”

As it turned out, Whitewater was a sinkhole of an investment, but far more so for the McDougals than for the Clintons, despite their fifty-fifty partnership. A recent report commissioned by federal investigators found that McDougal and his companies covered more than three-quarters of the nearly $200,000 in losses sustained by Whitewater. And according to an analysis done for committee Republicans–but disputed by both the White House and the President’s personal lawyer–the Clintons underpaid the IRS $13,272 by taking improper deductions for Whitewater expenses.

During the mid-1980s, as McDougal struggled to prop up his sinking S&L, Madison Guaranty, he increasingly turned to Clinton–friend, business partner and Governor of Arkansas–with requests. Once, McDougal complained to a Clinton aide about a state health inspector who was causing him problems with a land development–and who was later reassigned. In a March 1986 memo from the aide, McDougal is quoted as saying “he hadn’t spent $60,000” on Bill Clinton over the years only to lose a battle with a state health inspector. In late 1984, when McDougal was seeking changes in Arkansas law to allow him to build a brewery and sell beer from the same site, he sent Clinton’s chief of staff draft legislation with a note saying he had received the Governor’s “commitment” to help him with the undertaking. No law was passed, but regulatory changes were eventually made that gave McDougal virtually the same result.

Though some Clinton aides are worried that something might still come out of Whitewater that could damage the President’s chances of being re-elected, others take heart in polls showing that the public has largely lost interest. Said a White House official: “The American people are beginning to ask, ‘Is there any there there?'” Despite Leach’s assertion that “the evidence is in” showing a quid pro quo between the Clintons and the McDougals, his House hearings fell short of proving that the Clintons did anything illegal. The President’s former business partner, meanwhile, was not shy in admitting that he and Clinton exchanged favors over the years. “So what?” McDougal said over the phone from Little Rock, Arkansas, last week. “Jim Leach has done a lot of favors for people, and there are a lot of people who have done favors for him. That’s how politics is played.” The question is whether the Clintons and McDougal played by the rules.

–With reporting by Suneel Ratan/Washington