Mrs Dole feels the Whitewater effect

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RUPERT CORNWELL

Washington

As Hillary Clinton ponders whether to submit to a Senate grilling to try to rid herself of the Whitewater affair, oddly similar allegations of financial favouritism and cronyism are being raised against the woman who could replace her as First Lady if the Republicans win the White House in November.

In substance if not style, Elizabeth Hanford Dole, wife of Senator Bob Dole, the only woman to have held different Cabinet posts in separate administrations, is as redoubtable a figure as Mrs Clinton. Currently head of the American Red Cross, she vows to continue in the job if her husband is elected. If so, she will become what even Mrs Clinton has not dared to be: the first First Lady to have combined that job with an outside career. But like Mrs Clinton, she could be dogged by business dealings from the past.

The controversy revolves around David Owen, for 20 years one of Senator Dole's closest political operatives in Kansas before he was convicted of tax fraud. For much of that period he managed Mrs Dole's assets, which had been placed in a blind trust while she served in government.

According to the New Yorker, Mrs Dole may have been given special treatment on several occasions. They involve the recovery with interest of a $250,000 (pounds 160,000) loan to an Owen company whose failure cost other investors dear, the purchase by the trust of shares in an insurance company which benefited from 1986 tax laws of which Senator Dole was a prime instigator, and a real estate deal involving a company that had been awarded a lucrative affirmative-action contract thanks to the Senator.

The Owen case briefly swirled during Mr Dole's last bid for the presidency in 1988. But it disappeared after his decisive defeat by George Bush in the New Hampshire primary that year. This time Mr Dole is a strong favourite, and is perhaps more vulnerable to allegations of influence-peddling and conflict of interest, which echo those against the Clintons in Arkansas in the 1980s.

The charges are denied by Mrs Dole. But Mr Owen, recently freed after serving a 12-month jail term, tells the New Yorker that he was "fed to the wolves" by Senator Dole during the 1988 campaign. He was a "political victim", whose life had been "ruined by politics".

The words could have been uttered by Jim McDougal, the Clintons' partner in the Whitewater land venture and owner of the failed Madison Guaranty Bank who is under indictment in Arkansas, insisting that he did nothing wrong.

Mr McDougal's protestations have only fuelled the Republicans' pursuit of Mrs Clinton. Yesterday, the Senate Whitewater committee began a new round of hearings, while the First Lady made her clearest offer so far to testify in person, if it would clear her name.

"I will do whatever it takes to co-operate," Mrs Clinton said, at the launch of her book on children's welfare, It Takes A Village, although it would be "a bit like having your teeth drilled". If she does undergo the ordeal, Mrs Dole may be an unexpectedly sympathetic spectator.

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