House opens new Whitewater front against Clinton

The House Banking Committee yesterday began hearings in which it aims to show that, contrary to White House denials, President Bill Clinton received "substantial benefits" from the Whitewater property concern and from the failed Arkansas savings bank owned by his partner in the venture.

Opening the latest round of the controversy which has dogged Mr Clinton for more than three years, the committee's Republican chairman, Jim Leach, said Whitewater was a conduit for money to reduce Mr Clinton's personal debt and liabilities run up during his gubernatorial election campaigns in the 1980s. At bottom, he declared, the affair was about "the arrogance of power". It was an arrangement in which Jim McDougal, owner of the Madison Guaranty Bank, "provided virtually all the money, and Mr Clinton his name".

Unlike the separate Senate hearings, which entered a fourth week yesterday, Mr Leach is focusing not on the aftermath of the July 1993 suicide of Vince Foster, the deputy White House counsel who handled many of the Clintons' personal affairs, but on the tangled relationship between Madison and Whitewater, which lies at the origin of the controversy.

Republicans are insisting that Whitewater is a matter of political graft, in which Mr Clinton shielded Madison Guaranty from collapse in return for financial help, in good measure channelled through Whitewater's account at Madison. Democrats echo Mr Clinton's own insistence that not a shred of proof has emerged that he did anything wrong.

Mr Leach's efforts are unlikely to be more successful than previous efforts to elucidate the mysteries of Whitewater. But as the acknowledged Capitol Hill expert on the subject, he commands considerable respect. Yesterday he contended that despite assertions to the contrary, Mr Clinton did not lose money on the venture. Meanwhile, Mr Leach asserts, documents prove that "at least $88,000 [pounds 56,000] was siphoned from Madison to Whitewater".

While the House panel probes for financial irregularities, the Senate Whitewater Committee will produce more witnesses, including the former White House counsel Bernard Nussbaum, to substantiate its charges that aides removed key Whitewater documents from Mr Foster's office immediately after his death, possibly on the direct orders of Hillary Clinton.

Testimony thus far leaves little doubt that papers were taken from the office. The Clintons, however, deny any intent to interfere with the investigations. If mistakes were made, they were caused by the confusion of the moment, their aides say.