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Mrs. Clinton declined to answer 2 questions

As a grand jury in Arkansas watched first lady Hillary Rodham Clinton's videotaped testimony Wednesday, her attorney confirmed she had refused to answer two questions in the Whitewater inquiry on grounds of marital privilege.

Questions in Saturday's five-hour White House session that she declined to respond to dealt with "conversations that plainly fell under the long-standing common law privilege for marital communications," lawyer David Kendall said in a statement.

After the grand jury gathered at the courthouse in Little Rock, Ark., Whitewater prosecutor Kenneth Starr spent about 45 minutes in the area of the building where the grand jury meets.

Deputy Whitewater prosecutor W. Hickman Ewing Jr., who conducted most of the questioning of Mrs. Clinton, declined to comment as he entered the building.

The first lady was in the Chicago area Wednesday for a tour of a school construction project and a lunch hosted by the Family Resource Coalition of America.

Mrs. Clinton's invoking the marital privilege is the latest instance of Whitewater prosecutors being unable to get answers to questions in the investigation.

The Little Rock grand jury, which is focusing on the actions of Mrs. Clinton and her former law partner Webster Hubbell, will expire May 7. A grand jury in Washington is investigating possible tax violations stemming from payments totaling more than $700,000 in 1994 and 1995 after Hubbell's resignation from the Justice Department. Many of the payments were arranged by friends of the president and first lady.

President Clinton has invoked executive privilege to protect the confidentiality of some conversations with top aides in the investigation involving former White House intern Monica Lewinsky.

The Justice and Treasury departments argue that Starr can be barred from questioning Secret Service officers about Clinton's relationship with Lewinsky.

The Whitewater probe "is a great investigation for the law of evidence," said New York University law professor Stephen Gillers. "We've got executive privilege, attorney-client privilege, spousal privilege, a brand-new Secret Service persons' privilege, and all that's left" that hasn't been invoked "are clergyman's privilege, physician-patient privilege and the privilege against self-incrimination."

Gillers said Mrs. Clinton's answering the questions would have risked loss of the marital privilege covering all other conversations with her husband.

Starr was pressing into an area where he should have expected to be rebuffed, said Bruce Yannett, a white-collar criminal defense lawyer.

"It is pretty unusual for a prosecutor to ask a married spouse about confidential conversations with the other spouse and expect to get an answer," said Yannett, a former federal prosecutor who was on the staff of Iran-Contra prosecutor Lawrence Walsh. "I don't think anyone should be particularly surprised or offended" by Mrs. Clinton invoking the privilege.

The videotaped questioning focused on Mrs. Clinton's work while at the Rose Law Firm in Little Rock for the failing savings and loan owned by the Clintons' Whitewater partners, Jim and Susan McDougal.

Kendall declined to specify the questions that prompted the refusals.

Mrs. Clinton and her law firm terminated a retainer agreement with McDougal's S&L on July 14, 1986, three days after federal regulators removed McDougal from control of the thrift. But Mrs. Clinton has given no indication she was aware of the serious action taken days before by regulators. She said the retainer was ended because the Rose Law Firm was doing more work for federal regulators and wanted to phase out its work for S&Ls.

A document from July 14, 1986, however, indicates that Clinton, who was governor at the time, was well aware of McDougal's troubles.

Staff aide Betsy Wright wrote the governor a note asking whether he still had stock in Whitewater in light of McDougal's "current problems." "No _ Do not have any more," Clinton scribbled back to Wright.