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WHITEWATER REPORT ENDS SIX YEARS OF TURMOIL <br> THE FINAL REPORT IS FINALLY OUT ON THE CLINTONS AND THE COMPLEX REAL ESTATE VENTURE KNOWN AS WHITEWATER. THE LEGACY OF THE INVESTIGATION WILL LINGER LONG.

It led to prosecutions, indictments and dozens of wrecked careers. It soiled the reputations of innocent officials at several federal departments and agencies. Dozens of White House aides are in deep debt after being called before grand juries.

And the agonizing House impeachment and Senate acquittal of President Clinton was the spectacular climactic moment of the six-year saga that ended Wednesday.

A final report issued by Independent Counsel Robert W. Ray cleared President Clinton and his wife, Hillary Rodham Clinton, now the Democratic Senate candidate in New York, of any criminal wrongdoing on Whitewater.

As Ray put it: "The office determined that the evidence was insufficient to prove beyond a reasonable doubt that either President or Mrs. Clinton knowingly participated in any criminal conduct . . . or knew of such conduct" in Whitewater-related financial dealings that resulted in
the convictions of 12 others.

The independent counsel's office also handled a range of inquiries into scandals involving the Clintons, including "Travelgate," "Filegate," the Paula Jones sexual harassment lawsuit and the Monica S. Lewinsky case, which led to the president's impeachment.

Whitewater was the keystone of nearly a dozen other probes launched by Republican officials and private conservative foundations into every aspect of the political and personal lives of the Clintons.

Officials such as Treasury Secretary Lloyd Bentsen and Leon A. Panetta, onetime White House budget director and chief of staff, beat hurried retreats from the capital lest they get dragged down in the whirlpool.

And in the process, the first Democratic president elected to a second term since 1936 became a lame duck three years before his tenure ended.

"This was the essence of the politics of personal destruction," commented Rep. John J. LaFalce, D-Town of Tonawanda. In addition to the individuals hurt in the investigations, LaFalce said, the Democratic Party and the country paid a heavy price.

Lanny Davis, an attorney and friend of the Clintons, said: "Somebody ought to apologize for a series of investigations that went nowhere: prosecutors, Republican members of Congress. Heading this list are a number of talk show hosts such as Rush Limbaugh."

However, the president may still be indicted after he leaves office for lying to a 1998 federal grand jury about his relations with Lewinsky when he was questioned about her in connection with a lawsuit filed against him by Paula Corbin Jones, an Arkansas woman who accused him of sexual misconduct when he was governor.

It was that lawsuit that opened the door for Ray's predecessor, Kenneth W. Starr, using his authority as independent counsel, to pursue a brand-new inquiry into Clinton's behavior with Lewinsky.

"I'm just glad this is finally over," Mrs. Clinton said. "It had the outcome I always knew it would have. It was obvious by anyone's objective look at what the so-called evidence was that this would be the outcome."

Now "everybody can just move on and be focused" on the issues in the Senate race, she said.

The president ignored a question about Whitewater as hestrolled through the White House Rose Garden with Italian Prime Minister Giuliano Amato.

In an interview on "The NewsHour With Jim Lehrer" Ray said he announced his findings now to remove "any lingering cloud that would hover over the first lady's campaign, or over the electoral process as we move now closer to November."

How did the maelstrom begin?

Whitewater was a 1980s real estate development promotion in the Ozarks of Arkansas.

The federal interest arose from the loss of federally insured deposits in an Arkansas bank, Madison Guaranty Savings and Loan. Several people involved in the scheme and later convicted were friends of the Clintons.

Soon after Clinton took office in 1993, Sen. Alfonse M. D'Amato of New York and other Republicans used the Senate banking committee as a platform to demand an investigation of the Clintons' involvement in the complex land dealings.

Attorney General Janet Reno named Robert B. Fiske Jr. as special counsel to investigate.

When Fiske failed to turn up evidence of wrongdoing, D'Amato and Sen. Bob Dole, R-Kan., pressed for the appointment of somebody tougher.

After nudging Fiske out of the job after only seven months, Dole and other Republicans arranged for a federal judicial panel to replace Fiske with Starr, the former solicitor general and second-ranking officer in President George Bush's Justice Department.

It was Starr to whom Sen. Patrick Leahy, D-Vt., referred Wednesday when he said, "No other prosecutor in the country would have spent six years on a wild goose chase like this."

Starr failed to generate any evidence Clinton or his wife was criminally involved in Whitewater, though his team did convict a number of their Arkansas associates.

As Starr's hopes of implicating the Clintons on Whitewater dwindled, Starr deftly grafted the Lewinsky scandal onto the old grand jury probe. It was Reno who gave Starr permission to send Lewinsky's story about her sexual relations with the president to a grand jury.

The bills ran up by Ray, and his predecessors Starr and Fiske Jr. now total $52 million.

But the figure is only a fraction of the cost of the GOP drive to bring down the only two-term Democrat elected president since the New Deal.

The Republican-controlled House Government Operations Committee spent vast sums in two failed attempts to prove that the 1993 death of Vincent Foster, a White House counsel, was not a suicide.

That did not stop a large foundation from subsidizing articles charging that Foster had an affair with the president's wife, and speculating that he was murdered to cover up the Clintons' alleged wrongdoing in Arkansas.

When the Republicans retook the Senate in 1995, D'Amato's banking committee committed huge sums in an attempt to prove a string of Treasury officials committed crimes by giving the Clintons a "heads up" about impending Whitewater investigations.

By a series of unconventional tactics, Starr raised the Clinton sex scandal to the level of a constitutional crisis. Starr secretly got an unusual federal judicial panel to give him a blank check on releasing secret grand jury testimony to Congress and the public without notifying the accused.

Not included in the independent counsel's cost of $52 million were the massive price tags on a half a dozen inquiries by Republican-controlled congressional committees, and the special details of FBI and other federal agents dragooned into investigations into mislaid FBI files and the firing of the White House travel office.

But Ray put much of the blame for the drawn-out Whitewater investigation squarely on the White House, citing delays "involving both the production of relevant evidence and the filing of legal claims that were ultimately rejected by the courts."

These delays in obtaining evidence, he said, included the refusal of Susan McDougal, a former co-investor with the Clintons in Whitewater, to testify under oath despite a court order requiring her to do so.

Ray's six-page report repeatedly used the phrase "the evidence was insufficient to prove to a grand jury beyond a reasonable doubt" to clear the Clintons of a variety of potential charges.

Buffalo attorney Edward C. Cosgrove, former Erie County district attorney, said he is unhappy with the language Ray used.

Ray "should either have no-billed them," Cosgrove said, "or presented the evidence to a grand jury and indicted them. Our personal reputations are too important to us to do anything else.

"This kind of statement by a prosecutor who acts as a policeman conveys guilt."

Among the charges abandoned by Ray's office were that:

President Clinton knowingly gave false testimony about why Madison bank retained the Rose Law Firm of Little Rock, in which Mrs. Clinton was a partner.

That Mrs. Clinton knowingly lied to federal officials in their probe of relationships between her firm and the Madison bank.

That Mrs. Clinton obstructed justice by withholding her firm's billing records.

That employment of former Deputy Attorney General Webster L. Hubbell by the president's friends was an attempt to keep Hubbell from telling what he knew about Whitewater.

News Albany Bureau reporter Tom Precious and Washington Bureau assistant Kim Marselas contributed to this report.

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