Clintons flailing in Whitewater flood: First Lady drops out of sight as allegations of document-shredding and obstruction of justice turn a scandal into a crisis

INNOCENT or guilty, Bill Clinton is staring at catastrophe. The torrent that has become the Whitewater affair has swept him into the most perilous phase of his presidency. Before any charges against him and his wife, Hillary, have been proven, he is flailing as his public standing and political momentum show signs of slipping away.

Only the super-charged atmosphere of Washington could generate a tempest of such intensity. It has happened before, when Watergate toppled Richard Nixon and the Iran-Contra imbroglio almost did the same to Ronald Reagan. Journalists seem to write or think about little else. And lofty opprobrium, not untainted by hypocrisy and partisan vindictiveness, is piled daily upon the First Couple.

To be sure, the Whitewater story has become juicier. For months it was a scandal whose main components were obscure, but possibly unethical, business dealings entered into by the Clintons in Arkansas while Bill was state governor. Suddenly it has become a cover-up - the talk is of document-shredding and obstruction of justice - and comparisons with Watergate proliferate. Throw in the mysterious death last July of the White House deputy legal counsel, Vincent Foster, and the mix becomes heady indeed.

The job of determining what fire lies behind the smoke rests with Robert Fiske, the special prosecutor appointed by the President in January. It is now a twin-track inquiry.

From his new offices in Little Rock, he must unravel the history of the Whitewater Development Corporation, a real estate scheme in which the Clintons were equal partners with an old friend, James McDougal, who also owned Madison Guaranty, a small building society. At issue is whether Madison, which failed in 1989, illegally channeled funds into Whitewater and the Clinton campaign funds. The second avenue has led Mr Fiske to Washington - to investigate the suspected cover-up.

It was Mr Fiske who opened the floodgates 10 days ago by issuing subpoenas to 10 administration aides, six from the White House, demanding that they testify to a grand jury. Three did so on Thursday.

Through them, Fiske hopes to get to the bottom of at least three meetings, either improper or illegal, that are alleged to have taken place last autumn and early this year between Clinton aides and federal officials engaged in a criminal investigation of Madison Guaranty. Most serious would be evidence that the aides, perhaps even with the Clintons' knowledge, were seeking to impede those inquiries.

Suspicions of conspiracy have been hardened by such revelations as the testimony of a temporary worker at the Rose Law Firm in Little Rock, where the First Lady and Mr Foster were partners, saying that as recently as January he was told to shred documents that bore Mr Foster's initials. Mrs Clinton is also reported to have delivered several boxes of documents to Rose last summer, for the purpose of shredding.

Protesting his innocence, the President has scrambled to reverse the impression of a cover-up, ordering his staff to unearth all and any documents that may be relevant. For two days no rubbish was allowed to be taken away from the White House. At the Treasury Department, Secretary Lloyd Bentsen was forced to rent a warehouse to store all the papers and other detritus that may contain evidence.

Last weekend, the President attempted to defuse matters by forcing the resignation of his legal counsel, Bernard Nussbaum, who was at all three of the meetings under investigation, and replacing him with Lloyd Cutler, former counsel to Jimmy Carter and the embodiment of gravitas.

The charitable explanation of the White House's earlier conduct is that it was born out of the hubris and navete of a youthful presidential team, as well as consummate incompetence of Mr Nussbaum. But not everyone is convinced.

Robert Bork, acting attorney general to Richard Nixon during the Watergate crisis, expressed the doubts of many: 'If it is true, as Mr Clinton and his defenders insist, that they have attempted no concealment of evidence, it is also the case that they have certainly given a virtuoso imitation of a cover-up. One could easily mistake it for the genuine article.'

The President may also have a Hillary problem. As well as the shredding allegations, she is known to have resisted surrendering records on Whitewater to the end. She was also opposed to the appointment of Mr Fiske. This may have been an over-lawyerly mind taking control. But if she has been the most reluctant to open up, it could be because she has the most to hide. Predictably debate has reopened about the role Mrs Clinton has held as probably the second most powerful person in the land.

The First Lady, moreover, is still giving the impression of defiance. Unlike the President, who answered questions at two press conferences last week, she cancelled most of her public engagements and made no statements. All that we have are excerpts from an upcoming interview with Elle magazine, in which she dismisses the scandal as 'a well-financed, well-organised attempt to undermine my husband and, by extension, myself . . . I know nothing bad happened.'

On Capitol Hill, the Republicans are wallowing in the Clintons' difficulties. Their pleasure is made all the more intense by memories of how Democrats led the assaults against presidents Nixon, Reagan and Bush. They are demanding congressional hearings to run at the same time as the Fiske investigation. Democrats have resisted so far, but some hearings seem inevitable.

It makes no difference that the White House's principal persecutor, Senator Alfonse D'Amato of New York, was rebuked by the Senate ethics committee two years ago for allowing his brother to use his office for private business dealings.

For all their agitation, the Republicans have been wary of evoking the ultimate sanction: impeachment. This is probably wise, despite all the frenzied speculation. On Thursday the latest rumour, that Mr Foster did not kill himself in the Virginia park where he was found but in a secret apartment, actually depressed markets on Wall Street. Yet it remains entirely possible that nothing very incriminating will be uncovered.

It is clear that, while public awareness of Whitewater is growing, outside Washington there is a distinct weariness with the affair. And while the President's approval rating has slipped slightly in most polls to 50 per cent, the inclination seems to be to give him the benefit of the doubt. Only 16 per cent in an NBC/Wall Street Journal survey thought him guilty of wrongdoing.

Until Mr Fiske's inquiries are over - his lease on the Little Rock office runs for 18 months - the real import of Whitewater is likely to remain a mystery. It is possible that the Clintons will be exonerated. It is also possible that it will bring down the presidency. But something in between, messy and inconclusive, seems more likely.

(Photograph omitted)

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