Pittsburgh Post-Gazette

What was once an almost indecipherable set of weird financial shenanigans involving the tiny elite of a small Southern state is now a full-blown White House story involving, most recently, long-missing billing records suddenly found in a drawer in the first lady’s office.

Those bills completed Whitewater’s journey north from the Ozarks to Washington, its transition from an impossible-to-follow land deal to an inside-the Beltway scandal. And this is extremely bad news for Mr. and Mrs. Clinton. After all, the very Arkansasness of Whitewater has been of immense help to them. The Gordian knot of financial transactions involving a large cast of characters and an array of institutions centering on Little Rock during the Decade of Greed has proved as complicated as the plot of the movie ”Chinatown,” and almost as hard to follow.

And just like the friendly cop at the climax who tells the morally shattered Jack Nicholson to ignore the depravity he sees around him with the words ”Forget it, Jake, it’s Chinatown,” so the sophisticated, pragmatic political view around Washington has been to say ”Forget it, Jake, it’s Arkansas” whenever the word ”Whitewater” is mentioned.

That view can be summed up as follows: Maybe the Clintons were in some proximity to some sleazy business practices. Who cares? Grow up, this is politics. And, for God’s sake, what does any of this admittedly regrettable stuff, much of it dating back 15 years, have to do with Washington? Those who are harping on this ancient history are transparently doing so for partisan political reasons. Sure, we can fault the First Couple for their lack of total candor and lapses of judgment, but let us just say ”mistakes were made” — and leave it at that.

As with many other self-consciously moderate, worldly assessments that exude a distinct air of self-congratulation, however, this one seems to tilt not toward the worldly middle, but distinctly toward the Clintons. White House counsel Mark Fabiani, the spin doctor on the Clinton scandals, loves it, since it assumes his conclusion about Whitewater: There’s no there there.

The evidence, such as it is, adduced in support of this position is that when you come right down to it, what’s come out so far isn’t really that bad — nothing more than a little political embarrassment. How can you say the Clintons or their pals obstructed justice when you’ve got an independent counsel investigating Whitewater to death, as well as a number of regulatory agencies and the hounds of Congress? And when you look at all the details that have emerged, they haven’t exactly brought down the administration. The Clinton problem, then, is supposedly aesthetic: Whitewater looks bad because the Clintons themselves are overly cautious, overly concerned with damage control. If they had only told all, released all, sooner, they could have put this matter to rest.

Maybe so. On the other hand, the revelations and disclosures of Whitewater, which have come in dribs and drabs over the three-year period since Bill Clinton began his 1992 election campaign, look like this:

— The Clintons’ 1978 tax returns show a $ 100,000 profit on trades of cattle futures on the commodities exchange — a profit that occurred on an investment of a mere $ 1,000. In addition, there was an unusually consistent pattern to the trades — the purchase of a contract came at or near the day’s low, a sale came at or near the day’s high. And, as it happens, Mrs. Clinton didn’t really make the trades herself. She relied heavily on lawyer James Blair, counsel to Tyson Foods, the Arkansas poultry giant. The tax returns also show that the Clintons failed to report some $ 6,000 in commodities-trade gains on their 1980 income taxes — equivalent to about one-sixth of the governor’s salary at the time.

— The Whitewater partnership was an investment in which the Clintons put up little cash, and a number of loans for which they were responsible were repaid entirely by their supposedly equal partner, James McDougal. Also, the Clintons improperly deducted on tax returns interest they did not pay.

— Hillary Clinton had an ongoing relationship with McDougal’s Madison Guaranty Savings and Loan, whose failure cost the federal government $ 50 million. There was a $ 2,000-a-month retainer for the Rose law firm. She received $ 6,000 in fees (at $ 125 an hour), while the firm received $ 21,000 in all. There were some 50 meetings and phone calls she participated in concerning Madison, including an hour-long call to the state’s chief S&L regulator, who had been appointed by her husband.

Had the feds or the state shut down Madison when they first found it insolvent — before Hillary Clinton’s representation of it began — it would have cost taxpayers $ 10 million or so, but when the shutdown she delayed finally did occur, Madison racked up an additional $ 40 million in losses.

— Then there is the matter of Hillary’s participation in the legal work for Castle Grande, a trailer-park development that was the project of James McDougal and Seth Ward, the father-in-law of Hillary’s law partner Webster Hubbell — a project whose financing, federal investigators believe, was a sham designed to allow Madison to circumvent rules against S&Ls investing in real estate.

— Then there is the fact that the Rose law firm failed to disclose to the federal government its potential conflicts of interest when it undertook action against bank deadbeats on behalf of Madison’s new owner, Uncle Sam. One of those deadbeats from whom the feds hoped to recover was Set Ward — yes, the father-in-law of the currently jailed Hubbell who was also Hillary’s phone buddy on the Castle Grande project.

— There are the possibly irregular unsecured personal loans Bill Clinton was able to take out at
Arkansas financial institutions and the uncertain terms under which they were repaid. Also, the maximum-level campaign contributions garnered at a Madison fund-raiser from people who deny having made them.

The relatively bare recitation of facts here fails to do justice to the shifts in various story lines followed by the Clintons and their friends. Thus the billing records at first did not exist, then were missing, then were found — with the White House, the president, and the First Lady insisting all along the way that they had cooperated fully.

The larger picture here is not an Ozarks landscape with the White river running through it. It is, instead, an intimate West Wing interior, wherein are gathered the Clintons’ closest friends, lawyers, fixers and aides-de-camp. What are they doing? Well, they’re sitting around a table talking intently among themselves. Some have sheets of paper and file folders in front of them. Some are talking on telephones. Maybe they’re just talking political strategy. On the other hand, what would a picture of a group of people straightening out their stories look like?

This activity goes well beyond the realm of political damage control. Any rational person can see that. How much further? Well, in the case of a sworn statement about ”minimal” legal work then contradicted by records showing some five hours of billing, the question of what the word ”minimal” can be construed to mean is the question of whether perjury charges are in order for Hillary Clinton. It is difficult to imagine that a first lady could be indicted — but it is a measure of how serious this has become that it is no longer irresponsible to mention the words ”indictment” and ”Hillary Clinton” in the same sentence.

All cover-ups seek to work their mystery through the agency of boredom and obscurity. What happened between Hillary Clinton, the Rose law firm, and Madison Guaranty Savings and Loan happened in the state of Arkansas several years ago. But the word ”minimal” was spoken in Washington. The missing billing records were found, in 1996, in Washington. Papers disappeared, and then reappeared, in Washington. Whitewater is not an Arkansas affair any longer, an outgrowth of a small state and its crony elite. It’s a Washington story now, and for that reason alone no longer boring and obscure.