Jury Told How Funds Went to '90 Campaign

By Seper, Jerry | The Washington Times (Washington, DC), June 21, 1996 | Go to article overview

Jury Told How Funds Went to '90 Campaign


Seper, Jerry, The Washington Times (Washington, DC)


LITTLE ROCK, Ark. - Whitewater prosecutors yesterday portrayed Gov. Bill Clinton as the beneficiary of an elaborate scheme in which bank funds were diverted illegally to his 1990 gubernatorial campaign.

Nevertheless, deputy independent counsel W. Hickman Ewing Jr. reminded jurors in the second Whitewater criminal trial that Mr. Clinton is not charged in the fraud and conspiracy case of bankers Herbert Branscum Jr. and Robert M. Hill.

In his opening statement in U.S. District Court, Mr. Ewing carefully described the illegal diversion of thousands of dollars of Perry County Bank funds by the defendants to Mr. Clinton's 1990 gubernatorial re-election campaign.

"What was the motive, why would they break the banking laws?" the veteran prosecutor asked during his 75-minute statement. "They were motivated by their desire to be more politically influential, to ingratiate themselves with the powers to be.

"These are people who violated the banking laws of the United States," he told the eight-man, four-woman jury. "They abused their positions of trust as the owners of a federally insured bank."

Defense attorneys argued in their own opening statements that the government cannot prove Mr. Branscum and Mr. Hill intended to break the law. They vigorously charged that the prosecution's expected chief witness, Neil T. Ainley, is not credible.

"You've got to keep your eye on the ball," said Dan Guthrie, attorney for Mr. Branscum. "You will see there is no motive when the evidence is laid out. Ainley got himself into a big jam, and his story started changing. The more he talked, the more the story changed. He simply is not a believable witness."

The second Whitewater trial touches closer to the president, with accusations that $7,000 was diverted from the bank by the defendants personally to Mr. Clinton. The president will testify on videotape, scheduled for Sunday.

Also, Bruce Lindsey, the president's closest adviser, has been named as an unindicted co-conspirator. Mr. Lindsey was the 1990 campaign treasurer.

Mr. Branscum and Mr. Hill, who owned the bank in Perryville, Ark., were charged in a Feb. 20 indictment sought by Whitewater independent counsel Kenneth W. Starr of being illegally reimbursed 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 in December 1990.

The indictment said the defendants 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.

They were accused of conspiring with Mr. Ainley, the bank's president, of defrauding the government, making false reports and misapplying bank funds.

Mr. Ainley is scheduled to testify next week. He was sentenced in January in a misdemeanor plea agreement with Mr. Starr to two years' probation and fined $1,000 for failing to report cash transactions during the 1990 campaign.

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