LITTLE ROCK, Ark. - White House Deputy Counsel Bruce Lindsey, President Clinton's closest adviser, has been named as an unindicted co-conspirator in the trial of two Arkansas bankers accused of illegally diverting cash to Mr. Clinton's 1990 gubernatorial campaign.
The surprise designation, which comes as a blow to a White House already reeling from successive scandals, means that Whitewater prosecutors - who brought the charges against the bankers - can focus on whether Mr. Lindsey was involved in criminal wrongdoing in the diversion of cash contributions to the Clinton campaign without filing formal charges or risk of successful objections of hearsay by defense lawyers.
In Washington, Mr. Lindsey vigorously denied any wrongdoing and said he would continue to work for Mr. Clinton. "I did not offer to resign. I did nothing wrong," he told a crowd of reporters in a White House driveway. "There was no purpose or reason for me to resign."
Mr. Clinton maintained his confidence in Mr. Lindsey. "He was thoroughly investigated and not charged, with ample opportunities," the president said. "I have got lots of confidence in him. I'm confident he didn't do anything wrong."
And the White House noted that Mr. Lindsey was not formally charged with any wrong-doing. "What is significant is that in many long months of inquiry he was not indicted," Press Secretary Michael McCurry said.
Mr. Lindsey's being named as a co-conspirator was confirmed yesterday by attorneys for the two bankers on trial here. "This is just another effort by the independent counsel's office to go out of its way to put the Clinton 1990 campaign on trial," said Dan Guthrie, who represents defendant Herbert Branscum Jr.
Naming Mr. Lindsey in the case means that the lawyer, a member of an old and prominent Little Rock law firm, a confidant and friend of Mr. Clinton's for more than 20 years, is expected to surface as a major player in the trial here of Mr. Branscum and his partner, Robert M. Hill, for which a jury is now being chosen. Mr. Lindsey last year was identified as a "target" of the Whitewater probe.
Mr. Branscum and Mr. Hill, who owned the Perry County Bank in Perryville, Ark., west of Little Rock, were indicted in February by a federal grand jury on fraud and conspiracy charges sought by Whitewater independent counsel Kenneth W. Starr.
The two men, along with the bank's president, Neil T. Ainley, are accused of taking illegally reimbursement for more than $13,200 in contributions they made to political campaigns between May 1990 and November 1993, including $7,000 that went to Mr. Clinton's gubernatorial re-election campaign in December 1990.
The indictment says Mr. Branscum and Mr. Hill raised the cash through false expense vouchers submitted to the bank for reimbursement and through a $3,000 cashier's check directly from bank funds.
Mr. Ainley was sentenced in January in a plea agreement with Mr. Starr to two years' probation and fined $1,000 for failing to …