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Aides Conclude Clintons Must Disclose Whitewater Dealings

By David Lauter
and John M. Broder

Los Angeles Times

WASHINGTON

Senior White House officials have concluded that President Clinton and first lady Hillary Rodham Clinton must abandon their insistence on withholding documents related to their involvement in the Whitewater real estate project and begin disclosure promptly after the president's return from Europe, aides said Tuesday.

In a sign that Clinton may be ready to heed his aides' advice, the president noted, in a televised interview Tuesday night, that he had agreed earlier to cooperate with Justice Department investigators. But "people said that's not enough, so I think we have to evaluate that and see where we are,'' he said.

The aides, frustrated over the pounding the White House has taken on the issue, also said they increasingly believe Attorney General Janet Reno should appoint an independent prosecutor to look into allegations about Whitewater and the failure of the related Madison Guaranty Savings & Loan in Arkansas. Reno has opposed such a move so far, but it has been advocated by a growing number of senior Democrats in Congress.

Mrs. Clinton and members of the senior staff have met several times to discuss the issue in recent days, according to officials who say the first lady has modified her insistence that the papers are private and should not be released.

Some White House officials continue to argue that the president should resist calls to release the papers, saying the demands are politically motivated and that yielding would weaken him and the prerogatives of the presidency. But that camp appears to have dwindled in recent days as administration officials have watched steady criticism wear away Clinton's support within the capital.

The perception that the White House is trying to hide something has driven a raft of stories about Whitewater ever since the disclosure, shortly before Christmas, that a file relating to the investment had been in the office of White House lawyer Vincent Foster on the day he committed suicide and had been taken out of his office subsequently by White House counsel Bernard Nussbaum.

After some initial delay, the president agreed to turn over that file and related papers to Justice Department investigators but has refused to make them public. David Kendall, Clinton's personal lawyer, negotiated with the Justice Department to deliver the documents under a subpoena, a move aimed at preventing leaks.

Whitewater was a real estate development company in which the Clintons invested with a friend, James B. McDougal, and his wife, Susan, in 1979. McDougal owned the Madison Guaranty thrift, which was seized by federal regulators in 1989 at a cost to taxpayers of at least $47.6 million. The real estate deal went sour as well, and the Clintons have said they lost $68,900.