Clinton accused of blocking inquiry

A federal bank official yesterday accused the Clinton administration of systematically trying to block her investigation of the failed Arkansas savings and loan bank run by Bill and Hillary Clinton's partner in the Whitewater real-estate venture.

In perhaps the most damaging testimony so far in the two Congressional investigations of Whitewater, Jean Lewis, a senior investigator with the government agency in charge of cleaning up the savings and loan mess, told the House Banking Committee of a "concerted effort to obstruct, hamper and manipulate" her inquiry into Madison Guaranty bank.

Those who had interfered included her own agency, the Resolution Trust Corporation, the Treasury, the Justice Department and the office of federal prosecutor Paula Casey - a Clinton administration appointee - in Little Rock.

Even so, the investigation had unearthed "substantial evidence" of wrongdoing by Madison, which collapsed in 1989 at a cost to taxpayers of up to $60m. Ms Lewis said Madison funds were diverted to Mr Clinton's campaigns to be elected governor of Arkansas in 1984 and 1986, and to the Whitewater venture.

The Clintons insist they were passive partners in Whitewater; Republican critics say the venture was a conduit channelling Madison money to meet Mr Clinton's campaign debts.