
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: MONDAY, January 24, 1994                   TAG: 9401240108
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A-1   EDITION: METRO 
SOURCE: Associated Press
DATELINE: LITTLE ROCK, ARK.                                LENGTH: Medium

CLINTONS PAID ON INTEREST

Most of the $68,900 that President and Hillary Clinton say they put into the Whitewater real estate venture appears to involve payments of interest on loans they took out for the company and were subsequently able to deduct from their personal income taxes.

According to tax records and interviews with Clinton advisers, the Clintons deducted at least $41,000 on tax returns from 1978 to 1988 for interest on loans for Whitewater Development Co. Inc.

The Clintons' prime financial role at Whitewater may have been to make interest payments for a money-losing company they co-owned. Like most Americans who make loan or mortgage payments, they took the interest deductions.

The deductions included $19,021 in interest payments itemized on the Clintons' 1980-91 tax returns that they had made public in 1992. They also deducted about $10,000 in Whitewater-related interest in 1978 and about $12,000 in 1979, according to White House senior adviser Bruce Lindsey and Denver lawyer James Lyons, who reviewed Whitewater for the Clinton presidential campaign in 1992.

The Clintons have not released their 1978 and 1979 tax returns, but Lindsey and Lyons confirmed the figures in interviews with The Associated Press last week.

The Clintons began Whitewater in 1978 with James and Susan McDougal to develop a retirement and vacation community.

Now federal authorities are investigating whether funds of the Madison Guaranty Savings and Loan that James McDougal owned in Arkansas were improperly diverted to other entities, or used to pay political or personal debts of prominent Arkansans, including then-Gov. Clinton.

The presidential campaign report found that the Clintons had "invested, loaned or otherwise advanced" $68,900 to the Whitewater venture "for which you have not received any return." In computing the figure, officials said the report counted only payments that came directly from the Clintons. It included the $40,000-plus in interest plus loan principal payments and other costs, Lindsey said.

One result of getting loans as individuals and putting them in the company was that payments on the loans sometimes were made by Whitewater, sometimes by the Clintons, Lindsey said.

by CNB