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Report concludes Whitewater inquiry

Bill and Hillary Clinton made "factually inaccurate" statements to federal investigators during the eight-year Whitewater investigation, but there was not enough evidence to prove the Clintons committed perjury or obstructed justice, according to the final report of the independent counsel released Wednesday.

The five-volume, 2,200-page report by former independent counsel Robert Ray is the final legal word on a decade of intrigue involving the former president and first lady. But like Ray's final report on the Monica Lewinsky case, released March 6, it offers few new revelations.

The massive tomes of the Whitewater report detail the intricacies of myriad loans and land swaps made by Madison Guaranty, the Little Rock thrift owned by the Clintons' business partners that failed in 1989 at a cost to taxpayers of $73-million. It reprises the years of investigative efforts into the Clintons' dealings with Madison's owners, James B. and Susan McDougal, including what the report describes as "lack of cooperation" by the White House and "novel privilege claims" by President Clinton intended to thwart the inquiry.

Most pointedly, Ray's report calls into question sworn testimony in 1994 and 1995 by Hillary Clinton, now a U.S. senator from New York, about her billing records while working as a lawyer for Madison Guaranty Savings and Loan. The records were the key to establishing whether Hillary Clinton might have known about fraudulent financial arrangements.

Those records went missing for 18 months in the mid 1990s while Mrs. Clinton was under subpoena to produce them for the federal investigation. They turned up in January 1996 in Room 319A of the White House residence, eight feet from a room from where Mrs. Clinton had been working on her book, It Takes a Village.

The report now says that a White House employee _ identified only as "confidential witness" _ testified to seeing Hillary Clinton in the hall outside the room carrying a box containing what could have been a rolled up sheaf of billing records.

"The independent counsel considered whether Mrs. Clinton's lack of memory (about the missing billing records) was an instance of feigned forgetfulness," Ray said in the report. "A trier of fact could conclude that Mrs. Clinton had the billing records in the White House . . . but the evidence was insufficient to obtain and sustain a conviction beyond a reasonable doubt."

David Kendall, the Clintons' lawyer, said Wednesday that the couple would have no comment on the report, calling it the "most expensive exoneration in history." He said it ended as it began: "With no evidence of any wrongdoing by the Clintons."

House passes GOP budget

The House passed a $2.1-trillion Republican budget plan Wednesday night that would grant President Bush all the money he had sought for the campaign against terrorism but result in a deficit next year despite cutting or freezing many other programs.

The measure was approved on a nearly party line vote of 221-209 after an often-bitter debate in which some Republicans suggested that opposing it was tantamount to undermining the war effort and Democrats asserted that it would drive the nation into a fiscal ditch.

The budget resolution, which is nonbinding but creates the blueprint for the annual spending bills that Congress will take up later in the year, would increase the Pentagon budget next year by $46.3-billion, or 13.3 percent, and nearly double, to $37.7-billion, the money allocated to domestic security programs.

But it would hold the increase in nondefense programs to $4.6-billion, or 1.3 percent, not enough to keep up with inflation.

DEFICIT: The government is running a deficit of $69.4-billion for the first five months of the budget year, a sharp contrast to the $25.9-billion surplus for the same period a year ago, according to a report released Wednesday by the Treasury Department.