Whitewater Defendants Acquitted On Four Counts


Background	Clinton's Testimony
Timeline	What's Next
The Democratic Whitewater Report	The Republican Whitewater Report

LITTLE ROCK, Ark. (AllPolitics, Aug. 1) -- Jurors in the Whitewater trial found two longtime political supporters of President Bill Clinton not guilty on four counts, but the panel deadlocked on seven other counts.

Arkansas businessmen Herby Branscum Jr. and Robert Hill, owners of Perry County Bank, faced 180 years in prison and $6.5 million in fines, if convicted on 11 counts of using bank deposits to reimburse themselves for contributions to Clinton's 1990 gubernatorial campaign and allegedly hiding $52,000 worth of campaign funds from tax authorities.

But the jury, handing Independent Counsel Kenneth Starr the first defeat of his Whitewater investigation, found Hill and Branscum not guilty of conspiring to conceal the cash withdrawals. The trial lasted five weeks.

Starr must still decide whether to retry the two on the seven counts on which the jury deadlocked.

The courtroom was silent as jurors filed in after deliberating since last Thursday. U.S. District Judge G. Thomas Eisele read a note saying: "We, the jury, have reached a verdict on some counts of the indictment and reached an impasse on the other counts."

He then asked the jury, "Are you hopelessly deadlocked" on the other counts, and the eight men and four women all said "yes."

The counts on which the jury acquitted the two were:

Conspiring to hide from the Internal Revenue Service cash withdrawals of $30,000 and $22,500 by the Clinton for Governor campaign in 1990.
Creation of a false entry in the bank's books to cover a $3,000 check made out to Branscum in October 1991. The government contended the money was used to reimburse political contributions; the defendants said it was payment for legitimate business expenses.
Misapplying the money from the $3,000 check to Branscum.
Causing the president of their bank to certify incorrectly to the IRS that the bank had properly documented all cash transactions of more than $10,000, as required by law.

Clinton testified for the defense by videotape. While not a defendant in the case, a guilty verdict would likely have been politically damaging to him, as were the sweeping guilty verdicts against former Arkansas Gov. Jim Guy Tucker and Clinton's former Whitewater real estate partners, Jim and Susan McDougal, in the first Whitewater trial. That trial ended May 28.

Clinton campaign officials were happy about the latest news from Little Rock.

"It takes one more issue off the table for Republicans, who think this is an important matter," campaign spokesman Joe Lockhart said.

The prosecution also named longtime Clinton associate and top White House aide Bruce Lindsey as an unindicted co-conspirator. Lead attorney W. Hickman Ewing Jr. said Lindsey had urged Hill and Branscum to hide funds from the IRS, and thus was part of "a conspiracy to violate the law." Lindsey denied any wrongdoing.

As in the first trial, explosive testimony came from a star prosecution witness also in trouble with the law. Last May, convicted businessman David Hale testified that Clinton was part of a conspiracy to defraud Madison bank. This time, former Perry Bank President Neal T. Ainley, who pled guilty to two misdemeanors last year, told jurors he saw documents revealing Hill and Branscum's reimbursements to themselves.

Defense attorneys called the prosecution's case "preposterous" and dismissed Ainley as a scoundrel simply trying to cut a deal to get a lighter sentence for his own crimes.

"Mr. Ainley, while searching his soul to keep from going to jail, remembered those checks and fabricated that story," Hill attorney Jack Lassiter.

Though a setback for Starr, the acquittals do not end his investigation, which now spans the Clintons' financial and political dealings in Arkansas, the firing of seven White House travel workers, and the improper requests of about 700 FBI files by the White House security office.

Whitewater Defendants Acquitted On Four Counts

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