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News Briefs I

Whitewater Bank Involved in Scam

The Washington Post
WASHINGTON

A federal bank examiner told the Senate Whitewater committee Tuesday that the Arkansas savings and loan at the center of the scandal was heavily involved in fraudulent real estate deals that amounted to a "pyramid scheme."

James Clark, whose 1986 examination led to a federal takeover of Madison Guaranty Savings & Loan, described "sham" dealings that he said enriched Madison executives, focusing on the 1,050-acre Castle Grande real estate project south of Little Rock, which cost taxpayers close to $4 million.

The committee and other investigators, including independent counsel Kenneth W. Starr, are looking into what role the Rose Law Firm and then-partner Hillary Rodham Clinton may have had in Castle Grande transactions. Newly discovered records, including legal bills found at the White House early this month, show that Hillary Clinton did some work on the project. She has said she has little recollection of her work.

The Federal Deposit Insurance Corp. said Monday that it has obtained an extension of the statute of limitations until March 1 for bringing civil claims against the Rose firm.

Memo May Threaten Israeli Spy

Los Angeles Times
JERUSALEM

Publication of a Pentagon memo warning that Israel may be using American Jews to spy on military contractors comes at a bad time for the Israeli government's quiet efforts to win the release of Jonathan Jay Pollard, an American Jew who spied for Israel.

The internal memo, asserting that Israel was trying to steal U.S. military and industrial secrets by exploiting "strong ethnic ties" in the United States, raises anew the specter of American Jews with a dual loyalty. And it has prompted some Israelis to suggest the leak may have been a move to stymie efforts to get Pollard a presidential pardon -- even though the memo was publicized by the Anti-Defamation League (ADL) of B'nai B'rith, a prominent Jewish organization.

The ADL said in a letter to Defense Secretary William J. Perry that the Pentagon directive "impugns American Jews and borders on anti-Semitism."

American Jewish leaders also said the memo reflects the mood in the U.S. intelligence community since Pollard's spying for Israel was discovered 10 years ago.

Many Israelis feel their government has allowed Pollard to languish in U.S. prisons rather than fight with the United States over his release. Last year, a sympathetic play called "Pollard" drew huge crowds in Tel Aviv and helped supporters collect tens of thousands of signatures on a petition calling for presidential clemency.

Democrats Take the Offensive In Budget Battle

The Washington Post
WASHINGTON

Less than six months ago, Democratic congressional leaders could not get the time of day from Republicans. But a series of GOP missteps, including decisions to provoke two partial government shutdowns and threatening to force a default by the Treasury, has emboldened Democrats to be more aggressive in their dealings with the majority party.

Senate Democrats last Friday forced Republicans to vote on the START 2 nuclear-arms-reduction treaty with Russia, which some GOP senators wanted to delay, as the price for prompt action on the GOP-drafted defense-authorization bill. After some delays, both measures were approved.

Tuesday, House and Senate Democratic leaders raised strong objections to Speaker Newt Gingrich's plan for a "downpayment" on deficit reduction and tax relief, saying Congress and the White House should continue to work toward a seven-year balanced-budget plan that includes smaller Medicare and Medicaid savings and a smaller, more-targeted tax cut than Republicans are advocating.

Senate Minority Leader Thomas A. Daschle, D-S.D., and House Minority Leader Richard A. Gephardt, D-Mo., also vowed to try to frustrate GOP plans to recess for much of February, saying Congress should remain in session to deal with the debt-ceiling crisis and other pressing issues. "We want to keep the heat on," Daschle said.