While President Bill Clinton has been quaffing Pilsner with Czech President Vaclav Havel in Europe, controversy over his investments in Arkansas in the 1980s has continued to ferment, threatening to damage his credit with the US public. The controversy is over whether a bankrupt Arkansas savings and loan organisation used its funds to prop up Mr and Mrs Clinton's investments in an Ozark mountain property venture known as Whitewater or to pay Mr Clinton's campaign debts from his 1984 race for the state governorship. Mr and Mrs Clinton made the Dollars 68,900 investment in 1978, in partnership with Mr James McDougal, owner of Madison Guaranty, an Arkansas savings and loan entity. The Clintons say they lost all their money. Republican critics want an investigation of whether Mr Clinton as governor intervened to delay the shutdown of Madison, which failed in 1989 at a cost to taxpayers of around Dollars 50m. They also want to examine suggestions that Madison money was improperly channelled to Whitewater and to Mr Clinton's 1984 campaign fund. Mr McDougal denies that the Clintons benefited in any way from his handling of Madison, and notes that he was acquitted in 1990 of fraud charges brought by a Republican-appointed prosecutor. Adding to interest in the case, the Clintons' Whitewater files were handled by Mr Vincent Foster, the deputy White House counsel who committed suicide last year. Despite the intense Republican pressure, neither the Whitewater controversy nor allegations last month by two Arkansas state troopers about Mr Clinton's sex life as governor appear to have damaged his popularity. A Washington Post-ABC poll published yesterday showed that 59 per cent of those questioned approved of the job Mr Clinton is doing as president, with 36 per cent disapproving - a rather better rating than the same survey's finding in December, before both sets of allegations boiled over. Another poll published by USA Today and CNN showed Mr Clinton's approval rating holding steady at 54 per cent, and 72 per cent said Whitewater had had no effect on their opinion. Nevertheless, White House advisers fear a steady erosion of Mr Clinton's credibility, with both polls showing a decline in the number of people believing in his honesty and integrity. The White House strategy for dealing with the Whitewater charges, which were also raised during the 1992 presidential election campaign, had been to stonewall. As Mr Clinton put it: 'I didn't do anything wrong. I made an investment and lost money. I then spent more money to document that we'd lost money. All the federal investigators in the world that have looked into this, not a single soul has alleged that I've done anything wrong.' The White House and attorney-general Janet Reno had tried to deflect calls for the appointment of a special counsel to investigate the matter, arguing that anyone she named would be viewed as no more independent from her than the career justice department official now in charge of the investigation. But the move became inevitable after nine Democratic senators joined a chorus of Republicans in urging the president to ask for a special counsel. Mr Clinton said in a television interview in Prague that he had given all the information he had to the Justice Department, but 'then people said 'Well, that's not enough' . . . So I think we have to evaluate that and see where we are.' Besides reccommending that he ask Ms Reno to appoint an independent counsel some White House officials are understood to be urging Mr Clinton to make public all the documents he has handed over to the justice department. Because they were the object of a subpoena, the documents are currently secret. Ms Reno would have to name the counsel herself, since the law passed in the wake of the Watergate scandal 20 years ago providing for a special counsel to be named by a judicial panel lapsed last year. Whatever Mr Clinton does, he can scarcely win. Keeping the Whitewater documents sealed fuels his political enemies and feeds speculation that he might have something to hide. Publishing them will just create a flurry of further news reports. But with senior members of his own party, such as Senators Pat Moynihan and Bill Bradley, urging him to ask for a special counsel, Mr Clinton can no longer complain that the furore is just partisan politics - an argument that has carried less weight all along because the Republican attack has been led by the eminently moderate Congressman Jim Leach of Iowa, rather than the party's more rabid tub-thumpers.
Controversy over the Clintons' unsuccessful Whitewater venture and the failure of the Madison Savings and Loan goes on. At the root of the problem is whether the Clintons' failing investment was propped up by Madison and whether Clinton, as governor, delayed shutting down Madison so that could be done. The Madison failure cost citizens 50 million dollars. In a recent interview with Fox News, Clinton said he had no knowledge about the deal until after it went through. Neither Clinton nor Janet Reno have yet asked for a Special Counsel to investigate Whitewater, although pressure to do so is building.