But last week, almost nine months after he resigned from the department’s No. 3 job, Webster Hubbell became another of Clinton’s Arkansas liabilities. Hubbell tentatively agreed with Whitewater independent counsel Kenneth Starr to plead guilty to one count each of mail fraud and tax evasion. The charges, both felonies, stemmed from allegations that Hubbell billed more than $200,000 in improper expenses to the Rose Law Firm. Among the clients overcharged were the Federal Deposit Insurance Corp. and the Resolution Trust Corp. Hubbell once dismissed the allegations as inconsequential. But the independent counsel threatened to indict Hubbell on more charges, and Hubbell finally gave in. The details of his plea bargain were still being negotiated last week, but a source said Hubbell could get about two years in prison. ““This has left people in a state of utter amazement,’’ said one Clinton associate.
Although the charges against Hubbell were only marginally related to the Whitewater affair, he will be required to cooperate on the broader investigation. He is almost certain to be questioned about politically sensitive business at the Rose Law Firm, where his partners included Vincent Foster, the White House lawyer who committed suicide in 1993. Webb Hubbell will also be asked about his 13 months at the Justice Department and whether he or anyone else tried to impede the department’s handling of RTC allegations against James McDougal, the Arkansas savings and loan operator who was Bill and Hillary’s partner in Whitewater. Hubbell has steadily maintained that he knew nothing about the McDougal case, and a source close to the president said Hubbell’s testimony would ““have no legal impact on the Clintons at all.''
Still, Hubbell’s problems are powerful evidence that the Whitewater affair isn’t going away. Republican Sen. Alfonse D’Amato of New York, the new chairman of the Senate Banking Committee, is already spreading the word that he will reopen the Whitewater hearings as early as next month. Starr is moving ahead with an investigation of Arkansas Gov. Jim Guy Tucker’s financial dealings with McDougal and David Hale, a former Little Rock judge who has made damaging accusations against Bill Clinton. And Newsweek has learned that another independent counsel, Donald Smaltz, has widened his probe looking into allegations that former Agriculture secretary Mike Espy received illegal gifts from Tyson Foods, the giant Arkansas-based chicken-processing firm. Sources familiar with the investigation say that Smaltz has been compiling a database of disgruntled Tyson workers who are being asked detailed questions about company practices and the personal life of company chairman Don Tyson, a major political backer of the president. A Tyson official complained that the investigation is spiraling out of control.
Last January, one of Hillary Clinton’s aides reportedly said that the First Lady ““doesn’t want [a special prosecutor] poking into 20 years of public life in Arkansas.’’ Now Starr is doing just that – and the shocking news about Hubbell’s plea suggests the probe has barely begun.
