Whitewater looks to be all washed up

FROM RUPERT CORNWELL

in Washington

This week's indictment of a former head of a small Arkansas bank is another fragment in the sprawling mosaic called Whitewater. But although the development could embarrass one of President Bill Clinton's top advisers, signs are growing that the controversy which has dogged his presidency, may be running out of steam.

Neil Ainley, until last March president of the Perry County Bank of Perryville, is the fourth person to be charged in the Whitewater investigation now headed by independent counsel Kenneth Starr. He is accused of concealing $52,000 (£33,700) of cash withdrawals by Mr Clinton's re-election campaign in 1990, when he was seeking a fourth term as Arkansas Governor. Treasurer of that campaign was Bruce Lindsey, now a senior White House official and one of the President's closest confidants. Mr Lindsey is not indicted and denies all wrongdoing. But he may have some awkward questions to answer.

So too in all likelihood will Mr Clinton when he and his wife give sworn testimony to the persistent Mr Starr, some time in the next few weeks. It is speculated that if not the President then the First Lady may be summoned before the Senate or House Banking Committee at resumed Whitewater hearings later this year.

But Whitewater - shorthand for sins, real or imagined, relating to Mr Clinton's political campaigns, his finances, sex life, and alleged involvement in drug trafficking in Arkansas - is in serious need of fresh sensation.

One sign of boredom was the lack of reaction to a new biography of the President last month, despite more titillating nuggets about his reputed womanizing and efforts to avoid the Vietnam draft. Meanwhile Whitewater's weirdest offshoots, beloved of conspiracy theorists and featuring the mysterious murder of Vince Foster, White House deputy counsel and keeper of the darkest Clinton secrets, hitmen eliminating potentially dangerous witnesses against the President, and secret cocaine smuggling operation run from a remote Arkansas airstrip in the 1980s, remain unsubstantiated, unproven and implausible.

Most telling was a front page feature in the Wall Street Journal last week. Its pursuit of Whitewater has arguably been more aggressive than any US newspaper, barring the conservative, highly partisan Washington Times. All the more surprising were the tentative conclusions offered to readers.

"The biggest Whitewater headlines appear to be heading towards the cutting- room floor," it wrote. Few believe the affair will lead to criminal charges against the Clintons; rather, it was turning into a garden variety savings- and-loan case, featuring less than household names. That isn't to say nobody will go to jail; several lesser figures may, probably on white- collar charges of bank and wire fraud. But the juiciest allegations, such as those stemming from the First Lady's commodities profits and the shredding of mysterious documents, have been all but discarded by criminal investigators."

The crux of Whitewater remains what it was when the ill-fated real-estate venture first hit the headlines in 1992: Did then Governor Clinton shield a tottering savings bank called Madison Guaranty from federal investigators in return for financial favours to himself or his campaign from Madison, owned by Jim McDougal, partner of the Clintons in Whitewater ?

But Mr McDougal isn't talking, and the only other key source, former banker and judge David Hale is not a perfect witness, having pleaded guilty himself to charges of fraud.