THE SPECIAL PROSECUTOR appointed to scrutinize the business
dealings of Bill and Hillary Rodham Clinton will focus on their
role in an Ozark land development called Whitewater.
But another case buried deep in court records could prove
equally troubling to them - particularly if special prosecutor
Robert Fiske makes good on his pledge to publish a report on the
Clintons' political and business relationships when he was governor
of Arkansas in the 1980s.
The matter involves a court case that Mrs. Clinton helped
settle when she was a high-powered lawyer in Little Rock, and the
government was trying to sort out the problems of a bankrupt
Illinois savings and loan.
The case suggests that she, as a private lawyer, had a glaring
conflict of interest. As an attorney for the Federal Deposit
Insurance Corp., she helped negotiate an out-of-court settlement
that ended the government's suit against a family friend and an
influential benefactor of her husband.
But the political problems the case could pose for the
president and his wife may go far beyond the narrow questions about
Mrs. Clinton's conduct as a lawyer.
As in Whitewater, the Illinois case places the Clintons once
again in an association with a wheeler-dealer who had strong
personal ties to the Clintons and even stronger financial ties to
the Clinton administration in Little Rock.
In Whitewater, the trouble stems from the Clintons' business
relationship with James McDougal, the guiding force behind Madison
Guaranty, an Arkansas savings and loan that went broke and cost
taxpayers more than $80 million. Special prosecutor Fiske will
examine whether Clinton or his gubernatorial campaign benefited
from McDougal's favorable treatment by a state agency in Arkansas
when Clinton was governor.
In the Illinois case, the problem stems from the Clintons'
friendship with Dan Lasater, a convicted felon whose high-flying
bond trading firm played a hand in the troubles of several savings
and loans, including First American Savings and Loan Association.
The S&L in Oak Brook, Ill., was headed by another politician, Dan
Walker, who was governor of Illinois from 1973 to 1977.
The case begins in 1979 at the Oaklawn Park race track in Hot
Springs, Ark. Clinton's c mother, Virginia Kelley, had a passion
for thoroughbred horse racing, and her box at the track was next to
He met Kelley and Clinton's half-brother, Roger Clinton, at the
racetrack. The racetrack friendship soon blossomed into an
introduction to Bill Clinton, who was trying to regain the
governor's mansion after losing an election in 1980.
By early 1983, Lasater had given Roger Clinton a job at his
Florida horse farm; Bill Clinton had reclaimed the governor's
mansion; and Lasater's bond firm had been added to a list of
brokerage firms eligible to underwrite state bond issues, a
classification that generated millions of dollars in business for
his firm, according to published reports.
Over the next two years, the ties between Lasater and the
Clintons grew stronger. The Clintons benefited from the
relationship, as Lasater:
Contributed money to the governor's campaign.
Lent Roger Clinton $8,000 to pay off a drug debt.
Sponsored fund-raising parties at his offices.
Made his private plane available to the governor for campaign
Encouraged his staff to donate to the governor's campaign,
promising higher commissions to compensate for the donations,
according to published reports.
At one point in 1985, Lasater also made his plane available to
squire celebrities to a charity function organized by Hillary
He benefited from the closer ties, too. In the summer of 1985,
Bill Clinton successfully lobbied the Arkansas Legislature to
approve a contract for Lasater to sell $30.2 million in bonds for
the new state police radio system. …