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Clinton aide quits over Whitewater

The White House counsel quit Saturday, the first victim of the Whitewater affair that intensified last week with FBI subpoenas of 10 administration officials.

What had been for months a steady trickle of allegations concerning the Arkansas financial dealings of President Clinton and his wife, Hillary Rodham Clinton, turned into a deluge, with new questions raised almost daily.

Saturday, White House counsel Bernard Nussbaum, a longtime friend of the Clintons, agreed to resign. Until then, he had survived a year of criticism for bad decisions and poor political judgment.

But what sealed his fate was the recent revelation that he and other top White House aides had conferred privately with Treasury Department officials last fall about one segment of the Whitewater investigation.

His resignation came a day after he and the nine White House and Treasury officials were subpoenaed by the grand jury that is investigating whether there was any improper financial relationship between the failed thrift, Madison Guaranty Savings and Loan, and Whitewater Development Co., an Arkansas real estate venture in which the Clintons were partners.

The subpoenas brought by the special prosecutor, Robert Fiske Jr., and Nussbaum's departure shifted the focus from business dealings in Arkansas to the behavior of top administration officials since the investigation began.

In forcing Nussbaum's resignation, White House aides hoped to take another step toward the goal that has eluded them for months: to isolate the Whitewater matter and keep it from further tarnishing the president. But no one would hazard a guess Saturday that this had been accomplished.

Nussbaum's resignation is effective April 5. In his resignation letter Saturday, he insisted he had done nothing legally or ethically wrong.

"Unfortunately, as a result of controversy generated by those who do not understand, nor wish to understand, the role and obligations of a lawyer, even one acting as White House counsel, I now believe I can best serve you by returning to private life," wrote Nussbaum, 57.

Last week, Clinton acknowledged the Treasury-White House meetings were wrong, and issued firm orders that nothing of the kind should again occur.

Nussbaum's letter was drafted after he met with the president for more than an hour Friday evening. Clinton, who had told Nussbaum then he could no longer stay on, immediately accepted the resignation Saturday with what he said was "deep regret," and praised Nussbaum's service.

"It has been said that the best a man can give is his living spirit to a service that is not easy," Clinton wrote. "And we have worked together in Washington at a time when serving is hard."

Nussbaum came to the White House as its top attorney from the high-power New York law firm of Wachtell, Lipton, Rosen & Katz.

He first met Mrs. Clinton two decades ago when she worked for him during a stint as counsel to the Senate Watergate committee that laid out the case for impeaching President Richard Nixon.

Nussbaum and Mrs. Clinton remained especially close. Some officials said, however, that his loyalty to the Clintons became a liability as he appeared to step in repeatedly to shield them from embarrassment on matters involving the growing Whitewater investigation.

Along with Mrs. Clinton, Nussbaum had resisted appointing a special counsel to look into the Whitewater matter, creating a delay that gave congressional Democrats pause and Republicans fodder to charge that a coverup was under way.

Sen. Alfonse D'Amato, R-N.Y., issued a statement Saturday calling it inconceivable that the Clintons were unaware that Nussbaum and other White House aides were meeting with Treasury officials to discuss the case.

Nussbaum also was involved in several other embarrassing incidents during the Clintons' first year: the fitful search for an attorney general; the decision to drop the nomination of Lani Guinier to the Justice Department's chief civil rights post; the dismissals of several travel office employees; and the hasty removal of papers from the office of his deputy, Vincent Foster Jr., who died last July in an apparent suicide.

Among the papers were documents relating to the Clintons' partnership in Whitewater.

It was those matters, and the White House-Treasury meetings, that drew the issuance of FBI subpoenas to the 10 officials Friday night.

Nussbaum, Deputy Treasury Secretary Robert Altman and other officials acknowledged they had discussed the federal investigation of Madison Guaranty, which was headed by James McDougal, Clinton's partner in the Whitewater company.

Altman is the acting head of the Resolution Trust Corp., the government agency that is charged with disposing of failed savings and loans associations and that is conducting the investigation.

Ordered to appear before a federal grand jury were Nussbaum; Altman; White House communications director Mark Gearan; senior presidential adviser Bruce Lindsey; Deputy White House Chief of Staff Harold Ickes; Mrs. Clinton's press secretary, Lisa Caputo; Mrs. Clinton's chief of staff, Maggie Williams; Treasury Department chief of staff Josh Steiner; Treasury general counsel Jean Hanson; and Jack DeVore, who was previously Treasury Secretary Lloyd Bentsen's chief spokesman.

None of the nine have been accused of any wrongdoing in the Whitewater affair itself.

There was no indication that the subpoenas were issued for anything other than information-gathering purposes.

The Clintons have denied any wrongdoing in the Whitewater affair. They have said they welcome the inquiry as a chance to redeem themselves and that they would testify before a grand jury if called.

But administration critics seized on the subpoenas as evidence that the Whitewater matter has taken on an ominous tone.

"It's a very profound step," said Rep. Jim Leach, R-Iowa, who has taken the lead in pushing for a deeper inquiry into Whitewater issue. "Obstruction of justice is now clearly the issue."

_ Information from the New York Times and Scripps Howard News Service was used in this report.