Clintons sink deeper into mire of Whitewater

THE TANGLED Whitewater controversy was poised yesterday to claim its most important victim so far, in the person of White House Counsel Bernard Nussbaum, the President's top lawyer. Mr Nussbaum is blamed for misjudgments and questionable conduct which have deepened the Clintons' difficulties in the affair.

Last night, after the President had twice conspicuously passed up opportunities to defend Mr Nussbaum, his early resignation was considered imminent. Such a step would cap a wretched 24 hours for the Clintons, which brought new reports of document-shredding by Hillary Clinton's old law firm in Little Rock, and threats of Republican mutiny on Capitol Hill unless Congress were permitted to investigate the affair.

The fiercest fire is being directed at Mr Nussbaum, over his role in three secret meetings between Treasury and White House officials in the last six months - all dealing with the current federal investigation into the failed Arkansas savings bank Madison Guaranty whose owner had close personal and financial ties with the Clintons.

Critics of the 57-year old New York lawyer say he had no business involving the White House in the Madison case, which is before a grand jury in Little Rock and being investigated by a special counsel appointed by the Justice Department. 'All these investigations should go ahead unimpeded,' the President was forced to pledge this week, as charges of a cover-up multiplied. But, he added, 'It would be better if those meetings and conversations hadn't occurred.'

After that implicit rebuke, Mr Nussbaum's survival was hanging by a thread. 'I don't think he'll be around much longer,' an official was quoted as saying. Although the White House press secretary Dee Dee Myers earlier insisted Mr Nussbaum still had the President's confidence, Mr Clinton was giving exactly the opposite impression.

Meanwhile, as pressure continued to mount on Mr Nussbaum, who is an old friend of Hillary Clinton, new allegations surfaced in Little Rock of document-shredding by the Rose law firm, where the First Lady was once a partner. The New York Times reported that a courier for the firm had told the grand jury that only two months ago he had shredded a file of papers that had belonging to the late Vince Foster.

Another former Rose partner, Mr Foster was deputy White House counsel before he committed suicide last July, but the special counsel is separately probing the circumstances of his death amid suggestions he may have been murdered. The law firm yesterday denied any of Mr Foster's papers had been destroyed. But other former employees say that since mid-1992, documents belonging to Mrs Clinton had been regularly shredded.

Most ominously for Mr Clinton, Whitewater may be starting to interfere with the business of government. The Deputy Treasury Secretary, Roger Altman, a key member of the administration's economic policy team, is under a cloud for having taken part in the last of the three meetings on Madison Guaranty. Mr Altman is the acting head of the RTC federal agency which is still clearing up the mess left by Madison and other collapsed S&Ls.

On Capitol Hill, 43 of 44 Republican Senators have vowed to block the appointment of a senior banking official nominated by Mr Clinton until hearings are held on Altman affair, and the RTC's handling of the Madison, whose failure cost taxpayers some dollars 60m ( pounds 41m). 'We're not going to let this rest,' said New York's Alphonse D'Amato, hinting that other legislative programmes of Mr Clinton could be affected.

Such is the damage already that the Treasury Secretary, Lloyd Bentsen, has ordered an ethics investigation into what has happened, and told his staff to have no further contact with the White House on the Madison-Whitewater imbroglio. But it may already be too late. Whitewater, named after an obscure real estate venture set up by the Clintons with Madison's owner Jim McDougal in the late 1970s, illustrates the eternal Washington truth that the cover-up is usually worse than the crime itself.