In late 1992, the Resolution Trust Corporation (RTC) sent the justice Department a 21-page “criminal referral” on the collapse of Madison Guaranty Savings and Loan, the Arkansas thrift run by James McDougal, the Clintons’ partner in Whitewater. The document recommended an investigation by justice. It named Bill and Hillary Clinton as possible beneficiaries of alleged financial misdeeds by McDougal, but not as targets of the criminal investigation.
After Clinton took office, career officials at the justice Department decided not to act on the referral. The RTC had a reputation for bureaucratic fumbling and badly drafted referrals; that may explain the decision not to follow up. But last September, RTC investigators drafted another, broader referral, again naming the Clintons. By then, political appointees at the Treasury Department tightly controlled the leaderless RTC. According to agency sources, Roger Altman, the second in command at Treasury, sent word that he wanted to be informed about politically sensitive cases. Altman denied that last week. But Treasury sources conceded that at least five other top departmental officials rode herd on the RTC. Another, general counsel Jean Hanson, briefed the White House on the second criminal referral. A few weeks later, the chief RTC investigator, Jean Lewis, was abruptly taken off the case.
Another veteran investigator, Brian McCormally of the Office of Thrift Supervision (OTS), also pushed unsuccessfully last year for an investigation of Madison. McCormally “was told an investigation of Madison was just politically too hot to handle, and was told not to press for one,” a knowledgeable source close to the OTS told NEWSWEEK. Now special counsel Robert Fiske is investigating, and some Clinton supporters have a vague sense of dread. “Bill and Hillary Clinton are hiding something,” says an administration official who has been subpoenaed by Fiske. “I don’t know what it is, or how bad it is.” All that seems clear now is that the initial investigations were either botched-or squelched.
