PAPERS OF TOP WHITEWATER INVESTIGATION AIDE SUGGEST MAJOR HILLARY CLINTON LYING, POSSIBLE HUSH MONEY FOR WEBSTER HUBBELL

Another scoop from Jerry Seper of the Washington Times, one of the best reporters on the Clinton scandal stories. The papers confirm a number of items reported by the Progressive Review including the apparent hush money for Webster Hubbell

JERRY SEPER, WASHINGTON TIMES A decade before Sen. Hillary Rodham Clinton admitted fudging the truth during the presidential campaign, federal prosecutors quietly assembled hundreds of pages of evidence suggesting she concealed information and misled a federal grand jury about her work for a failing Arkansas savings and loan at the heart of the Whitewater probe, according to once-secret documents that detail the internal debates over whether she should have faced criminal charges.

Ordinarily, such files containing grand jury evidence and prosecutors' deliberations are never made public. But the estate of Sam Dash, a lifelong Democrat who served as the ethics adviser to Whitewater Independent Counsel Kenneth W. Starr, donated his documents from the infamous 1990s investigation to the Library of Congress after his 2004 death, unwittingly injecting into the public domain much of the testimony and evidence gathered against Mrs. Clinton from former law partners, White House aides and other witnesses.

The documents, reviewed by The Washington Times, identify numerous instances in which prosecutors questioned Mrs. Clinton's honesty. . .

For instance, the papers say prosecutors thought Mrs. Clinton first concealed her legal representation of Madison Guaranty Savings and Loan Association - and the money she made doing it - during the 1992 presidential campaign when she and her husband, then-Arkansas Gov. Bill Clinton, came under fire in a questionable Arkansas real estate project known as Whitewater.

Beginning in March 1992 and continuing over the next several years, Mrs. Clinton steadfastly denied that she ever "earned a penny" in representing her Rose Law Firm clients, including the failing thrift's owners, James and Susan McDougal - the Clintons' partners in the Whitewater Development Corp. project.

But the newly discovered records, more than 1,100 pages in 30 separate documents, tell a different story.

A June 1998 draft indictment of Mrs. Clinton's Rose firm partner Webster L. Hubbell, who followed the Clintons to Washington in 1993 as associate attorney general, said Mrs. Clinton did legal work for Madison "continuously" from April 1985 to July 1986. It also said she represented the thrift before the Arkansas Securities Department for approval to issue preferred stock, helped Madison obtain a questionable broker-dealer license to sell the stock and was actively involved in a failed Madison project known as Castle Grande.

The draft indictment clearly asserts that Mrs. Clinton, despite her denials, represented Madison and its projects "in a series of real estate and financial transactions." A separate 183-page report included in the Dash documents said Mr. Hubbell and Mrs. Clinton "concealed from federal investigators the true nature of their work" with Madison and its various entities.

Clinton campaign spokesman Jay Carson disputed the allegations. "This is a baseless accusation which was looked into over a decade ago in an investigation that took $71.5 million and eight years to determine there was no case," he said. . .

In April 1998, Whitewater prosecutors, divided over Mrs. Clinton's truthfulness, argued over whether to indict her on charges of lying under oath about her legal work for Madison. Lawyers and others close to the probe said a draft indictment of the first lady became "a work in progress" after Mrs. Clinton's January 1996 grand jury appearance in U.S. District Court in Washington.

Prosecutors concluded at the time, the sources said, that she had testified falsely in denying doing legal work in the Castle Grande venture.

"There is concern among some about how successful they might be in bringing a criminal indictment against Mrs. Clinton for obvious reasons, but there is no lack of desire to do so," one lawyer familiar with the probe said at the time. The lawyer said the decision rested on two major points: whether there was sufficient evidence to contradict her sworn testimony and, more importantly, whether prosecutors could win the case in court.

No indictment was sought, but Whitewater prosecutors noted at the time, according to the Dash documents, that sworn statements by Mrs. Clinton were contradictory and misleading and that her involvement with Madison"s failed real estate project known as Castle Grande project was only fully detailed with the discovery of her Rose firm billing record summaries in the White House living quarters in January 1996 - two years after they had been subpoenaed.

A week before the summaries were found, the Resolution Trust Corp. said in a Dec. 28, 1995, report it had little information on Mrs. Clinton's ties to Madison or Castle Grande. After their discovery, the agency concluded Mrs. Clinton was more involved with the two entities than was previously known.

The summaries said Mrs. Clinton billed Madison for 60 hours of legal work, spoke with Madison officials about the Castle Grande project on 14 occasions, discussed legal matters with Madison's owners - the McDougals - 16 times, had 28 meetings with Rose firm lawyers on Madison, and met with state regulators about Madison at least twice.

At the time, Madison was seeking help from Mrs. Clinton's Rose Law Firm in Little Rock to fend off state and federal regulators concerned that the thrift was insolvent. Madison also wanted to jump-start a questionable preferred stock deal to pump much-needed cash into the operation and was desperate to keep the government from shutting it down. . .

In a report titled "Hubbell Hush Money Summary," Whitewater investigators said that a day before Mr. Hubbell quit, Mrs. Clinton and other top administration officials met privately at the White House to arrange for him to receive hundreds of thousands of dollars in consulting fees at a time his cooperation in the Whitewater probe could have resulted in charges against the then-first lady.

The records said Mrs. Clinton took an active role in White House efforts to "take care of" Mr. Hubbell financially, helping to locate campaign supporters who divvied up more than $450,000 over the next nine months mostly for consulting work he never did. . .

Mr. Hubbell pleaded guilty in December 1994 to mail fraud and income-tax evasion in the theft of $482,410 from his Rose firm clients and partners and failing to pay $143,747 in taxes. He was sentenced to 21 months in prison, serving 16 before being released.

The Whitewater probe ended on March 21, 2002, when Independent Counsel Robert W. Ray, who succeeded Mr. Starr, concluded in a final report there was "insufficient evidence" to bring charges against the Clintons. But the report also said statements by the Clintons to investigators were "factually inaccurate" and that White House delays in the production of evidence and the "unmeritorious litigation" by its lawyers "severely impeded the investigation's progress."