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Hillary Clinton's Former Law Firm Cleared of Savings & Loan Charge

By Susan Baer
The Baltimore Sun
WASHINGTON

Federal bank regulators said Thursday that they had found no evidence of conflict of interest by Hillary Rodham Clinton's former law firm in representing the government in a case involving a failed Arkansas savings and loan in 1989.

After conducting an internal review, the Federal Deposit Insurance Corp. said it was unclear whether the Rose Law Firm had revealed to the government that it represented the failed thrift, Madison Guaranty Savings & Loan, before state regulators in the mid-1980s. The regulatory agency said it would have expected a complete written disclosure in light of the firm's previous work for the S&L.

But, finding no violation of federal conflict-of-interest policies -- policies the FDIC concedes were not as strict before 1990 -- it recommended no sanctions against the law firm.

Questions surrounding Rose's hiring by the government, which paid the firm $400,000 in fees and expenses, are among many to come to light in the Whitewater-Madison controversy being investigated by a special counsel, Robert Fiske Jr.

Thursday, President Clinton said that most of the investigation into the Whitewater land deal that he and his wife entered into with a friend, who later became the owner of Madison, "has nothing to do with me."

But he said that decision "is going to cost the taxpayers millions of dollars because what they did was shut down the investigation that was ongoing of the S&L issues down there."

Fiske, who has set up shop in Little Rock, Ark., persuaded a federal judge Wednesday to convene a grand jury solely to investigate the Whitewater matter.

The Rose Law Firm -- where Mrs. Clinton; the late deputy White House counsel, Vincent M. Foster Jr., who committed suicide last summer; and Associate Attorney General Webster Hubbell all worked -- figures prominently in the criminal investigation.

After a report in the Washington Times last week alleged that Rose employees had witnessed the shredding of Whitewater documents -- an allegation that attorneys there denied -- Fiske ordered the law firm not to destroy any printed or computerized material that could pertain to his Whitewater investigation.

And in tangential matter, the FDIC ruled Wednesday that Mrs. Clinton had no conflict of interest when she represented the government in a case against Dan Lasater, a former Clinton supporter. The agency found that Mrs. Clinton had done just two hours of work in the case against Lasater, a bond trader with ties to a failed Illinois S&L.