Insurance windfall eases Clinton's cash crisis

RUPERT CORNWELL

Washington

President Bill Clinton may not have been quite as comprehensively bankrupted by his various legal misadventures as at first appeared. As the White House acknowledged yesterday, he has already collected $900,000 (pounds 600,000) of insurance covering him against sexual harassment charges.

According to Mike McCurry, Mr Clinton's spokesman, the successful claims were made on two umbrella policies of the kind often taken out by public officials. They apparently do not mention sexual harassment as such, but deal in more general terms with liability arising from character defamation or libel.

If the charges are unproven, then the insurance company has no choice but to provide money to meet the policyholder's costs of defending himself against them. Such is the situation of Mr Clinton, who is currently being sued by Paula Jones, a former Arkansas state employee, on the grounds she was sexually harassed by then Governor Clinton in 1991.

The President denies the accusation, and is appealing against a higher court ruling that the $700,000 lawsuit should go ahead while he is still in office. Almost certainly, the case will go to the US Supreme Court.

Already, however, the overall cost to the Clinton couple of the Paula Jones suit and a variety of allegations arising from the Whitewater affair tops $2m, far exceeding the Clintons' declared net worth of some $700,000 and the $865,000 so far raised by a legal defence fund.

A month ago, Mr Clinton said it was "probably right" he had nearly been bankrupted by legal fees. The $900,000 insurance windfall means that may not after all be so.

Meanwhile, a congressional committee has served 28 White House officials with subpoenas for documents relating to the bitterly controversial White House travel office sackings of spring 1993, which many Republicans believe were ordered by the First Lady herself.

Separately, the special Senate Whitewater committee which is now pursuing the mysterious re-appearance of Ms Clinton's legal billing records from the mid-1980s has unearthed an expletive-laden White House memo of early 1994, showing acute concern about what a former Arkansas bank regulator might testify about Ms Clinton's work with the failed Madison Guaranty bank, at the heart of the Whitewater controversy. In it, a top Clinton aide scribbles that if things are badly handled, "We're done."