Whitewater Runs Deeper, As Lawmakers Expand Probe

AT least for the next several months, Washington veteran Lloyd Cutler will lend the White House the reassurance of a credible voice on law, ethics, and propriety from outside the Clintons' circle of loyalists.

But the controversy over Whitewater will not wither away any time soon, even with Mr. Cutler's appointment as a temporary White House counsel.

Republicans are positioned to get two weeks from now the hearings they have long sought on the Clintons' investment in the Whitewater land development company and its ties to the failed Madison Guaranty Savings and Loan.

The normally mild Rep. Jim Leach of Iowa, the ranking Republican on the House Banking Committee, which has oversight responsibility over the savings and loan depositor insurance bailout, promises ``blockbuster'' revelations. Mr. Leach has submitted a request for 40 witnesses to appear before the committee in late March hearings. The list includes many senior Clinton administration officials, but does not include the Clintons themselves.

Unlike the Democratic chairman of the committee, the Republican members cannot subpoena witnesses to appear. But one of the first items of advice Cutler has offered the White House publicly as special counsel-appointee is for staff to cooperate in the hearings.

The hearings will not be the only hook pulling Whitewater onto the public agenda. The issue has attained a new level of momentum as a major news story in the past couple of weeks that is somewhat self-perpetuating because major media organizations are investing in investigative work of their own.

Yesterday, for example, The New York Times reported that two couriers for the Rose law firm in Little Rock, where Hillary Clinton and the late White House aide Vincent Foster were partners, recall shredding files with Mr. Foster's initials on them. One courier now recalls that the shredding was requested after an independent counsel was appointed to investigate Whitewater. And The New York Post reported that a second set of Whitewater files was removed from a safe in Foster's White House office after his death last summer.

The news that catapulted Whitewater into a major story was the revelation that White House aides had met with Treasury and Resolution Trust Corporation officials to discuss the investigation of Madison Guaranty (RTC) in the fall and winter. This moved the story from one of possible financial irregularities that may have involved the Clintons to one of the appearance of possible obstruction of justice in the White House itself.

``As is always the case, public officials end up legitimizing the story themselves by obfuscating and covering up,'' says Larry Sabato, a University of Virginia political scientist and author of a book on how the press treats scandal. ``This is a middling scandal, but that's up from minor two months ago.''

``I seem to see a real media gear-up now,'' notes Suzanne Garment, a scholar at the American Enterprise Institute and author of a 1991 book on how the culture of scandal-mongering operates in Washington.

PRESIDENT Clinton continues to plead for letting the independent counsel for Whitewater, Robert Fiske, carry out his investigation of the facts of the case without a chorus of speculation. Mr. Fiske himself wrote letters to the chairmen of the House and Senate Banking Committees this week strongly urging them to avoid a congressional inquiry into Whitewater, as it would ``pose a severe risk to the integrity of our investigation.''

The committee chairmen agree and replied to Fiske that they will not risk interfering with his investigation by running parallel congressional hearings.

Many Republicans, including Mr. Leach, are rejecting that argument and have the legal right to call their own witnesses. Apart from the criminal investigation that Fiske is conducting, Congress has a constitutional responsibility to oversee the massive expenditure of taxpayer funds in the bailout of thrift depositors. Questions about the integrity of Madison Guaranty, a failed thrift resolved at taxpayer expense, raise legislative questions beyond any criminal inquiry, Leach argues.

Further, Leach insists that the inquiries he leads need not impede the work of Fiske's grand jury. Unlike the congressional committee that held hearings on the Iran-Contra affair, Leach does not intend to grant any of his witnesses immunity.

Leach also notes that if word of the meetings between White House staff and RTC officials had not emerged from Senate hearings last month, Fiske would not have had a basis for the 10 subpoenas he issued for administration officials last Friday. Watergate hearings 20 years ago revealed the existence of the Watergate tapes, he adds.

There is little evidence yet that the larger American public has a strong interest in Whitewater, although an ABC poll released Tuesday found that 49 percent believe it is serious.