FDIC Officials Clear Mrs. Clinton in Legal Role No Conflict Found in Suit Involving Friend

Article excerpt

As a private attorney in the 1980s, Hillary Rodham Clinton represented a government agency in a lawsuit against a family friend, but her actions in the case didn't constitute a conflict of interest, federal banking regulators said Tuesday.

The statement by officials of the Federal Deposit Insurance Corp. involved a suit between the now defunct Federal Savings and Loan Insurance Corp. and an Oak Brook, Ill., savings and loan.

The FDIC inquiry was triggered by a report in the Chicago Tribune on Feb. 3 about Mrs. Clinton's role as an attorney for a federal agency that had sued Dan Lasater, a friend and political benefactor of Mrs. Clinton and her husband, Bill, who was governor of Arkansas at the time.

The story reported that Mrs. Clinton represented the government agency in the case against her friend, a potential conflict of interest. The story also said that Mrs. Clinton, as an attorney for the government agency involved, helped settle the suit for $200,000. As filed, the suit sought $3.3 million in damages.

FDIC officials said their inquiry confirmed that Mrs. Clinton was a lawyer representing the FSLIC in the 1980s and that she actively took part in the agency's litigation against Lasater.

But the agency said her involvement in the case was not extensive enough to constitute a conflict of interest under rules governing the federal regulation of savings and loans.

The FDIC said that, under federal rules existing then, Mrs. Clinton didn't have to directly tell the government about her friendship with Lasater. FDIC officials said that their inquiry involved primarily a review of court documents and the billing records submitted by the Rose Law Firm of Little Rock, Ark., of which Mrs. Clinton was a partner.

"Based on what our people found, Mrs. Clinton's involvement was confined to two hours reviewing the amended complaint" against Lasater, said chief FDIC spokesman Alan Whitney. …