Magazine article Newsweek

A Friend in Need: Another Slick Clinton Supporter Goes on Trial

Magazine article Newsweek

A Friend in Need: Another Slick Clinton Supporter Goes on Trial

Article excerpt

BILL CLINTON NEEDED MONEY. IN the fall of 1990, a blistering round of Republican attack ads calling Clinton a "raise and spend" governor had devastated his re-election campaign. With just days to go, Clinton wanted to retaliate--and he knew just where to turn: his old friend Herby Branscum. A former Arkansas Democratic Party chairman, Branscum ran the Perry County Bank in the tiny town of Perryville, about an hour's drive west of Little Rock. That year he provided Clinton with $180,000 in unsecured personal loans; $50,000 went to finance a last-minute TV blitz that pushed Clinton over the top. Branscum helped save Clinton's political life.

The president may soon wish he'd turned to someone else. Those loans are now at the center of the latest Whitewater drama: a bank fraud and conspiracy trial that starts this week in Little Rock. Independent counsel Kenneth Starr charges that Branscum and his business partner Robert Hill used bank funds to make illegal contributions to the 1990 Clinton campaign--and deliberately concealed the Clinton campaign's large cash withdrawals from federal regulators. Although Clinton isn't charged with any wrongdoing, he will again be forced to testify about his Arkansas past. Aides fear that the trial--complete with testimony about money changing hands in the governor's office--could become even more of a political embarrassment than last month's convictions of Whitewater partners James and Susan McDougal.

Though the facts in each case are entirely different, Clinton nonetheless finds himself in a depressingly familiar place: once again attempting to explain a suspicious relationship with a slick operator from back home. And, as usual, the timing couldn't be worse. This week, Sen. Al D'Amato will release a searing three-volume Whitewater report accusing senior White House aides of a "pattern of highly improper conduct" that includes stonewalling investigators and concealing files. The report's chief target: First Lady Hillary Clinton, whom the panel all but accuses of obstructing justice for failing to turn over the Rose Law Firm billing records. Last week D'Amato's staff claimed to have at long last uncovered the First Lady's motive for concealing the documents: that they recorded a 1986 conversation in which she was warned about the propriety of a real-estate deal that she worked on called Castle Grande.

But it's the Branscum trial that has the White House particularly on edge. Short and paunchy, Branscum is the archetype of the small-time Southern pol. Known around Perryville as "Boss Hogg" after the wily political boss on the "Dukes of Hazzard" TV show, he's not only the town banker but also the only full-time lawyer and owns the only real-estate company. …

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