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Prosecution Rests in Whitewater Trial

July 9, 1996

LITTLE ROCK, Ark. (AP) _ The prosecution rested in the Whitewater trial of two Arkansas bankers Tuesday after presenting testimony of laundered political contributions to then-Gov. Bill Clinton in 1990 and 1991.

Chief prosecutor W. Hickman Ewing Jr. wrapped up the government’s case after calling 20 witnesses in 11 days of testimony.

Although bankers Herby Branscum Jr. and Robert M. Hill are the defendants, much of the testimony during the trial has concerned the financing of Clinton’s 1990 race for governor and actions of Bruce Lindsey, now a top White House aide.

The next-to-last prosecution witness, former Branscum secretary Debbie Halbrook, testified that she and her husband made $1,000 in political donations to Clinton with checks provided by Branscum in 1990 and 1991 for that purpose.

``He gave them to me and I gave them back,″ she testified, adding, ``I believe he said he had met his contribution limit.″

The Halbrooks contributed $500 in 1990 to Clinton’s gubernatorial campaign and another $500 in 1991 to Clinton’s presidential exploratory committee.

Defense lawyers have complained frequently that the prosecutors, working for Independent Counsel Kenneth Starr, were trying to put Clinton’s 1990 gubernatorial campaign on trial.

The president, whose defense testimony was videotaped Sunday but yet to be played for the jury, is not charged in the 11-count indictment.

Defense lawyers have said Lindsey is an unindicted co-conspirator, while the government _ without using that term _ contended he participated in a conspiracy to hide campaign cash withdrawals from the Internal Revenue Service. Lindsey was Clinton’s campaign treasurer.

U.S. District Judge Susan Webber Wright rejected defense arguments Tuesday

that the indictment should be dismissed because the government failed to prove its case.

Wright and the lawyers were meeting Tuesday to edit a transcript of Clinton’s testimony, and the videotape will be edited in Washington to conform with the changes. Written transcripts will be made publicly available after the tape is played in court.

Branscum attorney Dan Guthrie, whose case will begin Wednesday, said Tuesday he did not expect to play Clinton’s testimony or call Lindsey to the stand this week. Jurors would likely see an edited version of Clinton’s 2 1/2-hour taping, his second in a Whitewater-related trial.

In April, he testified as a defense witness for just over four hours in the Whitewater trial of Arkansas Gov. Jim Guy Tucker and Clinton investment partners James and Susan McDougal, all of whom were subsequently convicted.

The current indictment charges Branscum and Hill, co-owners of Perry County Bank of Perryville, Ark., with conspiring to use their bank’s money to pay for contributions by themselves and others to Clinton and other Arkansas politicians.

They also are charged with concealing from the IRS $52,500 in cash withdrawals by the Clinton campaign: $30,000 on May 25, 1990, and $22,500 on Nov. 2 of that year. Federal law requires that banks report to the IRS all cash deposits and withdrawals of more than $10,000.

Branscum’s former secretary, Debbie Halbrook, testified Tuesday that the banker gave her $1,100: $600 in 1990 and $500 in 1991. She said Branscum asked her to use the money to contribute to Clinton’s gubernatorial campaign and his presidential exploratory committee.

``I believe Mr. Branscum asked me if he would give me these funds, would we write them back out to the Clinton campaign? I agreed to do so,″ Mrs. Halbrook testified. She and her husband contributed $1,000, not accounting for the extra $100.

During the government’s case, the jury of four women and eight men heard:

_Repeated mention of the $285,000 in loans that Perry County Bank made to Bill and Hillary Rodham Clinton to finance the 1990 campaign, although there were no allegations the 12 percent loans were illegal.

_Former Perry County Bank president Neal Ainley testify that Lindsey did not want the IRS forms to be filed. The normally press-shy Lindsey rushed outside the White House to hold a news conference when his name surfaced last month, hotly denying any wrongdoing.

He said he divided the $30,000 withdrawal into four $7,500 increments to hide the transactions from Clinton’s opponent, not from the IRS.

_An accountant friend of defendant Hill describe how the two men handed Clinton about $15,000 in campaign checks in a December 1990 meeting, with Clinton asking at the end whether Branscum would make a good member of the Arkansas Highway Commission.

Prosecutors introduced a memo typed by a Clinton staffer, saying Lindsey set up the meeting and that Hill wanted to both deliver the money and discuss Branscum’s appointment. Branscum was named to the influential but unpaid position five weeks after the meeting, although the indictment does not allege wrongdoing in delivery of the money or in the appointment.

_The accountant who delivered the money with Hill testify that one of the checks handed to Clinton was for $1,500, exceeding the $1,000 limit in effect in December 1990.

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