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Clinton escapes scrutiny of his financial affairs

JANET RENO, the US Attorney-General, yesterday rejected calls for the appointment of a special prosecutor to investigate President Bill Clinton's financial dealings when he was governor of Arkansas. She denied that the Justice Department was helping the White House keep documents about the affair secret.

The accusations that the Justice Department is aiding the Clintons to escape scrutiny over their relations with Whitewater Development - the property company under investigation - started after it was revealed that documents being turned over by the White House will be covered by a subpoena that will prevent their contents being disclosed to Congress or the press.

White House officials say openly that they requested the subpoena from the Justice Department because it would make it a crime to leak the documents, and preserve 'the privacy of the process'. In December the Clintons said they were voluntarily turning over all records but did not disclose the restrictive terms under which they were doing so.

The lengths to which the White House is going to keep the Whitewater documents away from journalists and congressmen is fuelling speculation that it would only do so if they contain damaging information. The Clintons' original explanation that they had little knowledge of White water's affairs appears ragged under press investigation.

Although the White House has repeated that no illegality is alleged, a series of disclosures - contradicting the Clintons' claim to be passive shareholders - has brought demands for the appointment of a special prosecutor. Newspapers normally supportive of the administration are sceptical about past explantions.

A further twist to the story comes from California where Susan McDougal, former wife of James McDougal who ran Whitewater and the failed Madison Guaranty Savings and Loan, is being charged with embezzling dollars 200,000 (pounds 135,000). Mrs McDougal played an important role in both companies and also received a dollars 300,000 small business loan in 1986 which was never repaid. The owner of the finance company which made the loan says he was pressurised into doing so by then-governor Mr Clinton and Mr McDougal.

Nobody is clear how far the Clintons really have anything to conceal and how far they were trapped by previous cover-stories which pretended that a limited involvement with Mr McDougal was non- existent. The removal of papers from the office of Vince Foster, the White House counsel who committed suicide last July, has also made it appear that Mr Clinton is frightened of what they contain.