Clinton Testifies In Bankers' Fraud Trial

WASHINGTON (AllPolitics, July 7) -- President Bill Clinton faced another Whitewater hurdle Sunday as he gave his second videotaped testimony since April in a criminal trial.

The president testified for two hours and 20 minutes, according to a White House statement. A transcript of the testimony will be released to the public later.

Before the testimony, independent counsel Kenneth Starr would offer no clues about what was expected.

"It remains to be seen as to what subjects they will go to, and we'll just have to take it one step at a time," Starr said.

He said it has not been determined what parts of the videotaped testimony will be introduced, but indicated it was "unlikely" it would be withheld.

The president is not charged with a crime but has been subpoenaed as a defense witness in the fraud and conspiracy trial of Herby Branscum and Robert Hill, owners of the Perry County Bank in Perryville, Arkansas. Clinton's Sunday questioning was expected to center around why he named the two political allies to state posts in Arkansas.

Hill and Branscum are charged in an 11-count indictment with committing conspiracy, misapplying bank funds and making false statements to regulators about transactions involving Clinton's 1990 race for governor of Arkansas. Clinton's longtime close aide Bruce Lindsey was recently named an unindicted co-conspirator in the bankers' case.

In U.S. law, unindicted co-conspirators are not accused of any crimes, but are placed in a legal category that allows prosecutors to introduce hearsay evidence concerning them that could not otherwise be used.

The bankers, Branscum and Hill, allegedly filed bogus expense reports to reimburse themselves and family members for more than $13,000 in contributions to Clinton's 1990 campaign for governor. After Clinton won the election, he appointed Branscum to the State Highway Commission and re-appointed Hill to the State Bank Board.

The president testified in April by videotape in the trial his former Whitewater business partners James and Susan McDougal and former Arkansas Gov. Jim Guy Tucker, who were convicted on numerous fraud and conspiracy charges.

Article sees probe heading to Clinton

On Sunday, a magazine article in The New Yorker magazine reported that Whitewater prosecutors discussed naming Clinton as an unindicted co-conspirator in the recent trial of his former business partners.

The article by James Stewart, author of a best-selling book about the Whitewater scandal titled "Blood Sport," also said the prosecutors may now be "heading toward" Clinton himself.

Stewart's article in the New Yorker concluded: "It is becoming increasingly clear that (Independent Counsel Kenneth) Starr's investigation, in its pursuit of a number of former Clinton cronies, is heading toward the president himself."

However, Stewart's report yields little new information. Starr has consistently said his investigation will carry beyond the election. And the article doesn't indicate that prosecutors ever considered naming the president as an unindicted co-conspirator, only that they talked with others about whether it was going to happen.

Clinton has denied all allegations connected with the Whitewater affair, a tangled series of business dealings that take their name from a failed Arkansas resort development investment in which the Clintons and McDougals were partners.

AllPolitics home page