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Hillary Rodham Clinton
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Prosecutors Question First Lady at Length

By Peter Baker and Susan Schmidt
Washington Post Staff Writers
Sunday, April 26, 1998; Page A01

Independent counsel Kenneth W. Starr and his deputies questioned first lady Hillary Rodham Clinton under oath for nearly five hours at the White House yesterday as prosecutors prepare to close the Arkansas phase of their long-running Whitewater investigation and face a decision on whether to pursue charges against her.

The afternoon-long interview, which was videotaped so that it can be shown to a grand jury in Little Rock, centered on Hillary Clinton's legal work when her husband was governor of Arkansas. The four-hour, 40-minute session was the sixth time the first lady has been interviewed by the independent counsel's office, but it was her longest meeting with prosecutors to date and came just two weeks before the grand jury is set to expire.

The fact that Starr would conduct such a lengthy interview at this juncture in his four-year probe -- even as his staff has been consumed with the Monica S. Lewinsky investigation -- suggested he is acting with an eye toward making a decision on whether to seek to indict the first lady before the Little Rock grand jury disbands May 7.

However, the expiration of the grand jury would not rule out future action against Hillary Clinton because a separate Washington grand jury will continue to operate. That panel has heard much of the testimony Starr has gathered that could bear on whether Hillary Clinton misled regulators or tried to conceal documents about the nature of her legal work in the mid-1980s for the failed Madison Guaranty Savings & Loan, which was owned by the Clintons' Whitewater business partners, James B. and Susan McDougal.

Hillary Clinton has denied any wrongdoing and the White House gave no appearance of alarm about her interview yesterday. President Clinton did not even stay at the executive mansion while his wife was questioned, instead escaping for a sunny spring afternoon golf game at the Robert Trent Jones Golf Club in Gainesville with Rep. Vic Fazio (D-Calif.), Robert Trent Jones Jr. and his son. After Starr and his staff left the building, the Clintons dressed in formal wear and headed to the Washington Hilton for the annual White House Correspondents' Association dinner.

As the expiration date nears for the Little Rock grand jury, Starr has ratcheted up pressure on several witnesses, including Susan McDougal, who was called in to testify on Thursday from a California prison and threatened with indictment for criminal contempt if she continues to refuse to answer questions. McDougal, her lawyer has said, may be called again to testify this week.

Prosecutors also are considering whether to bring new charges against Webster L. Hubbell, the former associate attorney general who pleaded guilty to defrauding his partners and clients at Little Rock's Rose Law Firm, where he and Hillary Clinton once worked together. New charges could stem from more than $700,000 in consulting fees paid to Hubbell by Clinton supporters and Democratic benefactors while he was under investigation or in prison.

While lawyers for the first lady had long understood she would have to testify at least once more about Whitewater, they negotiated yesterday's interview quietly in recent weeks, keeping it secret from virtually everyone, including key officials on the first lady's staff and in the White House counsel's office.

Afterward, the White House issued a brief statement saying that the subjects of the interview concerned the legal work done by the Rose Law Firm on behalf of Madison and the first lady's "relationship with related individuals."

"Consistent with past practice, no further statements about the content of the interview will be made at this time," said White House counsel Charles F.C. Ruff.

The questioning came in the wake of new information provided to prosecutors by former Arkansas governor Jim Guy Tucker, who became a cooperating witness for Starr in February and has made numerous appearances before the Little Rock grand jury since then. The McDougals and Tucker were convicted of fraud in 1996.

Starr has been trying to determine whether the first lady has testified truthfully about her business dealings and legal work with Madison and the McDougals, particularly her work involving a large Madison real estate project south of Little Rock known as Castle Grande, in which Hubbell and Tucker were also involved.

Hillary Clinton has said she remembered few details of her work on Castle Grande. However, Rose Law Firm billing records that mysteriously surfaced in the White House more than two years after prosecutors first sought them indicated a deeper involvement than she had acknowledged.

Although she has been interviewed several times by the independent counsel's staff, Hillary Clinton has testified in person just once before Starr's Washington grand jury. He summoned her to testify in January 1996, shortly after the billing records turned up, in a dramatic confrontation that marked the first and only time a president's spouse has been forced to appear before a grand jury.

Other than that occasion, prosecutors have avoided compelling the first lady to show up in person, coming to the White House four times to interview her before yesterday. The most recent time came just days before the Lewinsky probe began in January when they questioned her for 15 minutes about the White House's improper collection of FBI files. Yesterday was the first occasion, however, that prosecutors videotaped a White House session with her, according to sources, leaving them the option of playing the tape in court proceedings.

President Clinton has been interviewed several times by Starr's office as well and his videotaped testimony was played during the 1996 trial of the McDougals and Tucker. However, unlike his wife, the president has never testified before the grand jury.

Yesterday's interview was conducted in the Yellow Room of the White House from about 1:10 p.m. until 4:50 p.m. Starr brought with him four key lieutenants, W. Hickman Ewing Jr. and Patrick M. O'Brien from his Little Rock office and Robert Bittman and Solomon L. Wisenberg from Washington. Accompanying the first lady were Ruff; White House deputy counsel Cheryl D. Mills; her chief private attorney, David E. Kendall; and his associate, Nicole Seligman.

The investigation -- first under special prosecutor Robert B. Fiske Jr. before Starr took over as independent counsel in 1994 -- stemmed from the Clintons' involvement in the failed Whitewater real estate venture in Arkansas while he was governor and the related failure of the Madison Guaranty S&L. Since then, it has expanded dramatically to cover a variety of controversies, including the FBI files, the firing of White House travel office personnel and the death of White House deputy counsel Vincent W. Foster Jr.

Its most recent -- and most sensational -- twist has been the three-month-old probe into whether President Clinton committed perjury or obstruction of justice in the now-dismissed Paula Jones lawsuit by urging Lewinsky to lie about the nature of their relationship. Both Clinton and Lewinsky have denied having sex, although Lewinsky was captured on tape recordings telling a friend of an 18-month intimate relationship with the president.

© Copyright 1998 The Washington Post Company

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