Whitewater close to engulfing First Lady

A president coasts towards re-election, his country unmoved by the scandal which dogs him. Defensive and resentful, he accuses the special prosecutor probing the affair of being "out to get him." But controversy refuses to die, and almost every week, it seems, brings a new embarrassing development. That is what happened in 1972. And, even some Democrats now fear, history may be repeating itself in 1996.

Whitewater of course is not Watergate, neither in terms of immediacy (the original offences were allegedly committed in distant Arkansas, 10 or more years ago) nor of gravity (Bill and Hillary Clinton are not suspected of a dirty-tricks campaign to subvert the constitution of the United States). But the parallels have become impossible to ignore.

In the eye of the storm, as she has been for months, is the First Lady, whom a report by a government regulatory body this week accuses of drafting a document used to "deceive" federal authorities over a fraudulent land deal in 1986 involving the failed Madison Guaranty bank, a client of the Rose Law Firm where she was a partner.

Mrs Clinton insists she cannot even remember the transaction, but the report's conclusions make that assertion even less credible than it was after Rose billing records - showing she worked extensively for Madison and its owner James McDougal, the Clintons' partner in the Whitewater real estate venture - mysteriously came to light in the White House private quarters in late 1995.

All is now under intense investigation by a small army of lawyers assembled in Washington and Little Rock by the special prosecutor, Kenneth Starr.

And just as Richard Nixon took aim at his tormentor Archibald Cox, Mr Clinton on Monday claimed Mr Starr was "out to get" him and his wife, and even seemed to hint he might grant a presidential pardon to Susan McDougal, the wife of James McDougal who is now in prison for contempt of court after refusing to testify before a grand jury.

Ms McDougal claims she is being hounded by Mr Starr, with threats of a long jail term if she does not incriminate one or other Clinton. And indeed, she has won a measure of public sympathy after being photographed shackled hand and foot as she was led off to prison earlier this month.

Others however suspect she has reached a tacit deal with the Clinton camp, of refusing to incriminate the President and his wife in return for a pardon once the election is over.

Every sign is that such a step would be as big a political disaster for Mr Clinton as it was for Gerald Ford when he pardoned his disgraced predecessor Richard Nixon.

But when asked in a TV interview about the possibility, Mr Clinton was pointedly non-committal, saying merely he would review any request after an evaluation from the Justice Department: "That's how I think it should be handled."

The betting remains that Mr Starr will avoid any dramatic step, such as an indictment of Mrs Clinton for perjury or obstruction of justice, until after November 5.

But last week's recall before the Whitewater grand jury of Carolyn Huber, the aide who found the billing records, suggests that Mrs Clinton again is squarely in the prosecutor's sights. Indeed the First Lady could herself be summoned before the grand jury for a third time.

What is certain is that even if Bob Dole crashes to defeat like George McGovern in 1972, Whitewater will dog Bill Clinton well into his second term. At the least, that means continuing huge legal bills for those embroiled in the affair. At worst, it could see indictment of his wife, and a repeat of what Mr Ford once called "the national nightmare" of Watergate.