No one who has worked with or against Mrs. Clinton doubts that she has the ability to be a truly skilled corporate or courtroom lawyer. What she lacked was time. “We’re all very proud of Hillary,” William Kennedy III, the chief lawyer in the Rose firm, told the American Lawyer in 1992. Tellingly, he added: “And if she had ever quit having two lives and concentrated on her law practice, she would have been a superb lawyer.” Her colleagues quietly scoff at the idea that she was one of the top 100 lawyers in the United States, as she was ranked by the National Law Journal in 1991. Some doubt she was one of the top 100 lawyers in Little Rock.
A new report by the Federal Deposit Insurance Corp. is intriguing. After months of embarrassing news about suddenly discovered billing records and contradictory testimony from her intimates, the report seemed to buttress Mrs. Clinton’s claims of innocence. (The White House got another break last week when Democrats at least temporarily curtailed the Senate’s Whitewater probe.) The FDIC found no evidence she played a role in any scheme to defraud Madison Guaranty, the savings and loan at the heart of Whitewater. Mrs. Clinton did draft one document that was part of a suspicious real-estate deal called Castle Grande, but the FDIC found that she was unaware of any wrongdoing. Almost in passing, however, the report points out that the document was badly drafted and had to be redone. Mrs. Clinton had either written it in haste or lacked the necessary expertise.
When Mrs. Clinton chose the Rose Law Firm, the most respected in Little Rock, she had little interest in handling real-estate deals. She hoped to practice the specialty she learned at Yale Law School – family law. But custody cases are not big moneymakers, and the firm’s partners pressed her to get into more lucrative commercial litigation. Because she was the governor’s wife and sat on several corporate boards, the firm hoped she would snare big clients. Her partners were disappointed. She did not want to put in the time courting executives, explained a Rose lawyer. Because of her high profile, she was also an easy target for conflict-of-interest charges. During her husband’s 1986 campaign, she was criticized for representing the state public-service commission in a dispute with a power plant. Eventually, she had to be walled off from any state work.
Mrs. Clinton did bring in a few clients, like the Southern Development Corp., set up by private charities to provide business loans for the poor. But Southern’s total billings – between $100,000 and $150,000 over six years–were barely enough to pay for Mrs. Clinton’s secretary. A perfume manufacturer called Aromatique hired Mrs. Clinton in 1988 to sue another company. She won the case. But in 1994 an appeals court reversed the decision, accusing a Rose lawyer (not Mrs. Clinton) of de-ceptive actions “beyond the pale of acceptable behavior.” One judge even wanted to make Rose pay the other side’s attorneys’ fees, a harsh and unusual punishment.
In the 1980s, any regional law firm hoping to make money could hardly avoid savings and loans. This was where the deals were. Mrs. Clinton denies she brought in Madison, whose owners, Jim and Susan McDougal, go on trial for fraud this week. But Susan McDougal told author David Maraniss in 1992 that “Hillary came in and was telling us the problem was finances and she was not bringing enough to her law firm. I remember Jim laughing and saying, “Well, one lawyer’s as good as another, we might as well help Hillary’.”
Mrs. Clinton’s friends speculate she tried to cover up her association with the McDougals not because she had done anything wrong, but simply because she didn’t want to advertise her involvement with an S&L whose failure ultimately cost taxpayers $60 million. “Jim McDougal may not be Ivan Boesky,” said a lawyer who is friendly with the Clintons, “but he’s certainly not the kind of client Hillary wanted to brag about at American Bar Association meetings.” Or on the presidential campaign trail. In 1988 she ordered the destruction of most of her legal files dealing with Madison, and in the 1992 campaign her billing records disappeared as well, surfacing only after they had been under subpoena for two years. Now, instead of the ABA–or even the national press–her audience is the Whitewater grand jury.
