Whitewater, campaign finance issues will only intensify, observers say President Faces Legal, Ethical Scrutiny in His Second Term

President Clinton and his advisers may have hoped that his re-election with 49 percent of the popular vote would bring a halt to the seeming endless swirl of allegations and innuendoes.

But political observers say that the same legal and ethics questions that dogged the Clinton administration in its first term - Whitewater, Filegate, Travelgate, and Asiagate - will only intensify during its second.

Never before in the history of the White House has a newly elected second-term president faced as many unresolved legal and ethical questions as Mr. Clinton.

Observers cite a potentially embarrassing sexual-harassment case against Clinton and the continuing Whitewater criminal investigation of the president and first lady.

The Whitewater case is likely to be heard by the US Supreme Court in January, and independent counsel Kenneth Starr has said that a grand jury investigating the case is making "very substantial" progress.

In addition, Republican leaders in Congress are vowing to continue their own investigations and launch new ones into suspected illegal campaign contributions to the Democratic Party from foreign firms.

Given all these inquiries, Clinton may be well on his way to a legacy as the nation's most-investigated leader. What remains to be seen is whether the allegations and innuendoes translate into criminal indictments.

White House officials insist there is no substance to what they view as a politically inspired smear campaign. The lingering whiff of scandal has been a source of frustration.

"It has been three years now. Still there have been no [formal] allegations, let alone proof, of wrong doing against the president or the first lady," says Mark Fabiani, an associate counsel at the White House. "But we can't do anything about that. We will just wait until the work ends."

Questions

When the work ends, the key questions that should be answered include:

*Were the Clintons criminally involved in the network of insider deals and financial scams that seem to characterize the interconnection of business and politics in Little Rock in the 1980s?

*Did the president or his wife use the power of the White House to in any way impede or obstruct criminal investigations of the Whitewater real estate deal or other related inquiries?

*Did Hillary Rodham Clinton make false statements to Congress when she said she played no role in firing seven members of the White House travel office?

*Did anyone at the White House seek to use for political purposes the FBI background files of 900 prominent Republicans?

*Were there any quid pro quos between large campaign contributions from foreign companies such as the Indonesia-based Lippo Group and policy decisions or actions by the president and his administration?

"Of second-term presidents there has never been a line-up of ethical and legal problems that comes close to this," says Charles Jones, a presidential scholar at the University of Wisconsin.

Professor Jones says the only comparable case was President Nixon and the start of what became Watergate. But Jones says that case was limited to the burglary of the Democratic campaign headquarters and subsequent White House coverup.

In contrast, he says, the Clinton administration is facing questions in several different areas from several different institutions.

"It isn't only the number of issues but also the variety of sources of involvement," Jones says. "You have involved the Department of Justice as instructing and charging the special counsel, you have congressional committees in both the House and Senate, and the Supreme Court. You have all three branches of government."

Perhaps as early as January, the president's lawyers will appear before the US Supreme Court to argue that the $700,000 sexual-harassment lawsuit filed by Paula Jones should be postponed for four years until after Clinton leaves office.

Clinton argues that, as a sitting president, he should be immune from having to stand trial in a suit related to events that allegedly took place before his becoming president.

If the court disagrees, as many legal experts think it will, the president's lawyers will likely try to delay the case as long as possible to avoid the spectacle of the world's most powerful leader on trial for allegedly soliciting a sexual act from an Arkansas state employee while he was governor.

Meanwhile Mr. Starr, the special prosecutor, is continuing to press a broad $17 million probe of the Clintons and their friends in Arkansas that began in January 1994.

The effort has yielded nine plea agreements and three convictions. James B. McDougal and his ex-wife, Susan, the Clintons' partners in the Whitewater real estate investment, were convicted of fraud and conspiracy charges by an Arkansas jury in May, along with Arkansas Gov. Jim Guy Tucker. The trio, accused of issuing up to $3 million in fraudulent loans through straw corporations, allegedly lied to bank regulators to cover up the scheme.

A former friend

The case is significant to the Clintons because Mr. McDougal is cooperating with prosecutors. McDougal hopes to trim a possible 84-year sentence by testifying against his former friends and colleagues.

McDougal might prove helpful to Starr in the investigation of an alleged $1.1 million sham land deal conducted in 1985 and 1986 between McDougal's Madison Guaranty Savings & Loan Association and one of McDougal's associates. Madison Guaranty's attorney in the deal was Mrs. Clinton.

A recent report on the deal by the inspector general of the Federal Deposit Insurance Corporation says that the future first lady drafted legal documents that were used to "deceive" federal bank examiners about a questionable $300,000 commission to McDougal's associate.

Mrs. Clinton has told investigators that she does not recall working on the deal. But that was before missing billing records from her law firm were found in the White House. The records show that Mrs. Clinton not only worked extensively on the alleged sham deal, but later ordered all billing documents related to her work on the deal be destroyed.