Clintons 'profited from Whitewater'

Republicans yesterday accused President Bill Clinton and his wife of making a profit out of the Whitewater Development Company, directly contradicting their claim that they had always lost money on their real-estate deal. Jim Leach, the ranking Republican on the House Banking Committee, said: 'The family of the former governor of Arkansas received value from Whitewater well in excess of their initial investment.'

The allegations came hours before President Clinton was due to give only his second full prime-time press conference since he took office in a bid to reverse a sharp decline in public support. The latest Washington Post-ABC News poll shows his approval rate has dropped to 47 per cent, 11 per cent down from February. Yesterday one of his most senior aides, George Stephanopoulos, went before a grand jury to testify about Whitewater.

If Mr Leach, a moderate Republican, is able to prove that Whitewater was not 'the bad investment' the Clintons have claimed it was it would be a serious blow to the White House. The implication of his charges is that Whitewater was used as a conduit for money that was being syphoned out of the federally-insured Madison Guaranty Savings and Loan.

Although promising a policy of glasnost on Whitewater the White House was still equivocating last night on handing over the Clintons' tax returns for the late 1970s. These are important because they cover the period when they first joined Jim McDougal to set up Whitewater as a land investment company. They would also, presumably, mention a dollars 100,000 ( pounds 67,560) profit made by Hillary Clinton in commodity futures in 1978. Mr Leach attributed the corruption and mutual backscratching between politicians and businessmen in Arkansas to its history as a one-party state dominated by the Democrats. He also accused the Democratic leaders of similarly failing to abide by the constitutional duty to check the executive because the White House was now occupied by one of their own party.

In the face of dwindling public support Mr Clinton has very little option but to try to take control of debate about Whitewater by talking about it himself rather than letting others, mostly his enemies, do the talking. He has said there is 'a presumption of guilt' by the press which makes it difficult for him to defend himself.

How far are Mr Clinton's troubles the result of a media witchhunt, as he alleges? Those arguing that they are say that the precedent of Watergate has created a presumption of presidential wrongdoing. Like McCarthyism in the 1950s, failure to prove innocence carries implications of guilt. No journalist wins a Pulitzer prize for discovering there is no body buried by the Clintons in Arkansas.

Some of the Clintons' problems are clearly their own fault. In 1992, during the presidential election, when their business dealings in Arkansas were first written up in the New York Times, they successfully diverted press attention by the well-tried tactic of launching their own inquiry. Delay and refusal to comment were not so foolish a way to kill a story as they now appear, if the suicide of Vince Foster in July last year had not suddenly dramatised Whitewater and the Rose Law Firm of which he and Hillary were partners.

The Republican party and the right-wing press, notably the Wall Street Journal and the Washington Times, were also out to exact vengeance for Watergate and Iran-Contra, scandals through which Democrats in Congress allied to the liberal press crippled the last three Republican presidents. Reversing their old antipathy for the special prosecutor they have tried to give the Democrats a taste of their own medicine.

In many ways Whitewater has shown the US media at its worst. Although vast resources are deployed to investigate the Clintons' business dealings, the results of journalistic carpet-bombing resemble B-52 raids over Vietnam: they are extraordinarily meagre.