A Starr-Crossed Investigation The three-year, $30 million probe of a small-time Arkansas land deal has taken some troubling turns. (6/30/97)
The Second Trial
Handing Starr his first Whitewater defeat, on Aug. 1, 1996, jurors in the second Whitewater case acquitted two longtime political supporters of Bill Clinton on four charges and deadlocked on the remaining seven. The decision provided a much-needed respite to the White House who saw interest in Whitewater skyrocket following the convictions of the president's former Whitewater partners.
As in the first trial, Clinton was not a defendant but testified for the defense by videotape. A guilty verdict would likely have turned Whitewater into a major campaign issue; instead, it was mostly ignored by GOP nominee Bob Dole and other Republicans.
The defendants, 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 hiding $52,000 worth of campaign funds from tax authorities.
The prosecution also named longtime Clinton associate and top White House aide Bruce Lindsey as an unindicted co-conspirator. During the trial, lead attorney W. Hickman Ewing Jr. said Lindsey had urged Hill and Branscum to hide funds from the IRS to obscure how the funds had been used. Ewing suggested Lindsey had arranged a meeting between Hill and Clinton, and that Clinton has essentially traded plum state jobs for donations. The president denied the charge during in testimony
Explosive testimony came from a star prosecution witness, former Perry Bank President Neal T. Ainley. Ainley, who pleaded guilty to two misdemeanors last year, who 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.
After five weeks of court proceedings, a deeply divided jury found Hill and Branscum not guilty of conspiring to conceal the cash withdrawals, and deadlocked on the remaining seven charges. On Sept. 13, Starr announced he would not retry Hill and Branscum on the unresolved charges.
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