ROANOKE TIMES 

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

DATE: TUESDAY, February 1, 1994                   TAG: 9402010173
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A-6   EDITION: METRO 
SOURCE: 
DATELINE: LITTLE ROCK, ARK.                                LENGTH: Medium

CLINTON FUND FOR CAMPAIGN QUESTIONED

Two employees at a savings and loan owned by Bill Clinton's partner in a real-estate deal told The Wall Street Journal there was an unusual incentive for them to pay off Clinton's gubernatorial campaign debt: a promise they would be reimbursed.

The newspaper reported the arrangement Monday, quoting one employee as saying he was reimbursed for a $500 contribution. Another employee, the newspaper said, was offered reimbursement by one of the savings and loan's executives - but rejected the offer.

"It wasn't something I wanted to get involved in," Davis Fitzhugh told the Journal.

H. Don Denton made the $500 contribution for an April 1985 fund-raiser for Clinton held by Madison Guaranty Savings & Loan, the institution's former senior vice president told the Journal. Denton refused to tell the newspaper who reimbursed him, saying "It could be incriminating."

If Madison funds were used, it could be an illegal use of federally insured deposits. If the S&L operator used his own money, it could be an evasion of contribution limits under state law.

Clinton's ex-partner - the S&L's former owner, James McDougal - told The Associated Press: "I didn't reimburse anybody, not that I remember." Nor did he promise reimbursement to anybody, he said.

Denton and Fitzhugh were government witnesses against McDougal in a 1990 trial in which McDougal was acquitted on eight federal fraud counts. McDougal said they were asked on the witness stand if they knew of anything he had done that was illegal, and responded they knew of nothing illegal that he had done.

In Washington on Monday, Sen. Donald Riegle Jr., D-Mich., chairman of the Senate Banking Committee, said the committee would not investigate Clinton's Arkansas business investments until a special counsel finishes his probe.

- Associated Press 


 by CNB