Clinton Legal Fee Debate

The Clinton's secure an unorthodox loan arrangement with "fundraiser extraordinaire" Terry McAuliffe -- a deal in which the Clinton supporter deposits $1.35 million cash into an account on the Clinton's behalf. The White House said that McAuliffe will get the money back, with interest, once the Clintons pay back the mortgage, or, as is more likely, refinance it in five years.

CON 2

The WASHINGTON POST'S Ruth Marcus reported that McAullife, a 42-year-old real estate developer and entrepreneur, reached an arrangement with the Clintons a week after the President played golf with him, and later visited McAullife's ailing mother in a New York hospital after she had hip surgery.

CON 3

The McAuliffe deal was made only after former Clinton Chief of Staff Erskine Bowles refused to guarantee the loan at the last minute.

CON 4

Ellen Miller, executive director of Public Campaign said, "Probably no one has more and longer tentacles into the worlds of money and politics than Terry McAuliffe. It's an unhealthy relationship for anyone to have to the president and first lady. In a way, he has incredible power over them and incredible power through them as well." The paper also reports that "several of his business dealings have come under legal scrutiny."

PRO 5

The White House Counsel's office had ruled that McAuliffe's guarantee did not fall under the provisions of Federal gift reporting laws and thus did not have to be listed on the Clintons' annual disclosure report.

PRO 6

This is not the first time that political supporters have helped secure a home for an outgoing President. In 1988 eighteen friends pitched in $2.5 million to purchase the Reagan's home in Bel Air -- a home the Reagans eventually bought for themselves.

CON 7

A complaint, filed with the Federal Election Commission by the Conservative Campaign Fund, alleges that personal loans and guarantees for personal loans have always been treated the same as campaign contributions and are subject to the same $1,000 limit. Mrs. Clinton is eyeing the U.S. Senate seat in New York that is being vacated in 2001 by retiring Sen. Daniel Patrick Moynihan, a Democrat. "It's clearly illegal," said Peter Flaherty, chairman of the Conservative Campaign Fund.

PRO 7.1

Mrs. Clinton's campaign spokesman, Howard Wolfson, called the loan guarantee "perfectly legal and appropriate." "It's not surprising that a right-wing special interest group would be attacking Hillary Clinton. We expect that will happen quite a bit," Wolfson said.

CON 7.2

Flaherty argued that, because Mrs. Clinton must establish residency in New York to run for a Senate seat, the home loan is campaign related.

FACT 7.3

FEC spokeswoman Kelly Huff said that she could not comment on the complaint itself but that generally the law mandates that loans and loan guarantees for candidates are subject to campaign limits if they are related to the campaign.

FACT 8 9-26-99

President Clinton and First Lady Hillary Rodham Clinton have abandoned plans to accept a friend's loan guarantee and are seeking a conventional mortgage for the $1.7-million home they want to buy in suburban New York, a source said Saturday. The Clintons hope to complete a new financing arrangement by Nov. 1, their original closing date, said the source, who is familiar with the Clintons' financial planning and who spoke on condition of anonymity. They were reported to be considering options from several lending institutions to enable them to purchase the five-bedroom home in Chappaqua, N.Y., about an hour north of New York City. Mrs. Clinton is considering a Senate run from New York in 2000 and must establish residency before election day.

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