Relaxed Clinton stems the tide of Whitewater: Congressman refutes President's claim that he lost money

SHOWING that he is at his most effective under pressure, President Bill Clinton appeared yesterday to have succeeded in answering, for the moment, some of the more damaging questions about his involvement in the Whitewater affair.

Nevertheless the Clintons' tax returns for 1977-79, released yesterday, showed that during his first three years in public life the joint family income went from dollars 42,000 ( pounds 28,000) to dollars 158,000 mainly as a result of successful commodity speculation by Hillary Clinton.

At only his second prime time press conference since he took office, Mr Clinton was relaxed but combative. Specifically denying Republican charges that he made a profit out of Whitewater, he repeated that it was a 16-year business venture which lost money, though he adjusted downwards the money lost by dollars 22,000, saying he had forgotten about money he had used to help his mother buy a cabin.

Avoiding a strident counter-attack against his accusers, which might have given the impression he was rattled, Mr Clinton did effectively suggest that he was successfully managing the affairs of the nation although 'many people around America must believe that Washington is overwhelmingly preoccupied with the Whitewater matter'. Out of 15 questions asked at the press conference only three were on topics other than Whitewater.

No surprises emerged in the tax returns, which Mr Clinton promised to release during his press conference, except to confirm that Hillary Clinton made dollars 28,000 in 1978 and dollars 72,000 in 1979 from forward dealing in cattle, a highly risky investment carried out on credit. A wish to conceal the successful speculation, undertaken with the guidance of the chief lawyer of Tyson Foods, the largest employer in Arkansas, probably explains why the White House had earlier refused to release the tax returns.

Republican leaders sniped at Mr Clinton after his speech yesterday but admitted that the President had probably done himself some good. Newt Gingrich, a senior Republican in the House of Representatives, said acidly that if he had loaned somebody dollars 20,000 he would probably have remembered it. Democrats, fearing that Mr Clinton's slide in the polls will damage their re-election chances in November, were all relieved by Mr Clinton's forthright performance.

The most dangerous and specific charges against Mr Clinton came just hours before his press conference from Jim Leach - a widely respected Iowa congressman whose voting record makes him one of the six most liberal Republicans in the House - who claimed that the Clintons had made money out of Whitewater. As the senior Republican on the House Banking Committee, Mr Leach, for the first time in a widely covered speech, laid out the charges against Mr Clinton and said he had evidence to back them up.

At the heart of Mr Leach's attack is the allegation that Whitewater did indeed make money for the Clintons, not through their real estate investment but because it was used by their business partner Jim McDougal to 'skim' money out of the federally insured Madison Guaranty savings and loan and syphon it into the pockets of Mr McDougal's friends. He also produced evidence that a Treasury Department official tried to persuade an investigator earlier this year that Mr Clinton got no money from Madison Guaranty.

Mr Leach's known moderation and clean record - in contrast to Senator Al D'Amato of New York and Phil Gramm from Texas, who have been raising eyebrows all over Washington by their sudden enthusiasm for ethical behaviour - makes his attack the most serious Mr Clinton has faced. The President has complained that the lack of a definite charge against him makes it difficult for him to defend himself. Mr Leach has now enabled him to specify what he did not do. Mr Leach's evidence of Treasury officials soft-peddling investigations to protect the Clintons was looking shaky yesterday.

Mr Clinton has stopped a haemorrhage of political support. A Times Mirror poll, released before he spoke, showed two-thirds of Americans - 73 per cent Republicans, 67 per cent independents and 59 per cent Democrats - believe the Clintons have done something wrong. Only 15 per cent say they are guilty of serious wrongdoing.

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