Hubbell's indictment doesn't name Mrs. Clinton

WASHINGTON -- After years of investigating Hillary Rodham Clinton, Whitewater prosecutors laid out their case in an indictment that never used her name, charged her with no wrongdoing but accused her former law partner of 15 felonies.

Weaved through Independent Counsel Kenneth Starr's latest case, however, is a story line that places the first lady right in the middle of efforts that enabled friend Webster Hubbell's father-in-law, businessman Seth Ward, to receive hundreds of thousands of dollars from a savings and loan that was headed for collapse.

Mrs. Clinton, who is referred to three dozen times in the 40-page indictment of Hubbell, has said she remembers almost nothing about her work in the mid-1980s relating to a failed real estate project called Castle Grande, run by her Whitewater business partner James McDougal.

The 15-count indictment, issued Friday, said Hubbell concealed his and Mrs. Clinton's roles in the transactions starting in 1989 and ending on Dec. 27, 1995. That was nine days before the first lady's long-sought billing records, revealing her work on Ward's behalf, were turned over belatedly to Starr, who subpoenaed them two years earlier.

Legal experts say the new Hubbell case holds potential peril for the first lady.

''It seems to me that there is some risk to Hillary here, that Starr hopes to open up some doors that lead more directly to her,'' Georgetown University law professor Paul Rothstein said. The new case, he said, seems designed ''to put the squeeze on Hubbell.''

Never identified by name in the indictment, Mrs. Clinton is referred to as ''the billing partner.''

''It is conceivable that Hubbell could be guilty of a cover-up and that the 'billing partner' would not have knowledge of the wrongdoing,'' Rothstein said. ''But there is considerable risk that in the course of prosecuting this case, something might be uncovered that points directly to the ''billing partner.'''

The indictment alleged that Mrs. Clinton:

--Spoke to an S&L executive who had prepared loan documents helpful to Ward.

--Drafted a real estate document for Ward and a subsidiary of the S&L that ''deceived'' bank examiners about loans that Ward obtained at the S&L.

--Met with Ward around the time the S&L released him from personal liability on $470,000 in loans from the institution.

The first lady has steadfastly denied any wrongdoing in her former work as a private lawyer in Arkansas.

But even a frequent Starr critic said focusing on Mrs. Clinton may be justified even though she is not charged in the Hubbell indictment.

If evidence regarding Mrs. Clinton ''is relevant and material'' to charges against Hubbell, said former Iran-Contra prosecutor Lawrence Walsh, ''I don't see any problem with'' the indictment's emphasis on the first lady. Walsh has blasted Starr for his pursuit of another aspect of his investigation, the Monica Lewinsky scandal.

According to regulators, Ward was a straw buyer of part of Castle Grande, a development south of Little Rock. Financed by McDougal's financial institution, Castle Grande was rife with ''insider dealing, fictitious sales and land flips'' and eventually cost taxpayers almost $4 million, regulators concluded.

Ward has said he did nothing wrong and was entitled to the money he received from the S&L.

Mrs. Clinton's law firm billing records which revealed her work on Castle Grande turned up in the White House family residence under circumstances that have never been explained. Hubbell, the indictment notes, reviewed the billing records during the 1992 presidential campaign. They dropped from sight after the election.

Hubbell faces up to 110 years in prison and $4 million in fines if convicted on all the charges, which consist of fraud, false statements, perjury and corruptly impeding the functions of two federal regulatory agencies.