WASHINGTON WATCH: FIRST FAMILY'S TROUBLING FRIENDS: ARKANSAS ASSOCIATES PLEAD GUILTY

Whitewater returned to center stage in Washington this week, only days after Hillary Rodham Clinton labeled it a partisan "sideshow." Her urgings to the media to "ignore" the matter were swept aside by the guilty pleas of two Clinton associates in Arkansas. Information revealed in the pleas drew a spate of withering newspaper editorials, including comment in the New York Times and Washington Post. Following are excerpts from these two papers, which are closely read in Washington.

From The Washington Post

The Hubbell Plea

It is true that Webster Hubbell's admission of tax evasion and mail fraud in a Little Rock court is linked to work performed in private practice in Arkansas before he came to Washington. And it is also true that while Mr. Hubbell faces the possibility of spending some time behind bars for falsely billing clients, including the federal government, for more than $390,000, he is not the central figure in the independent prosecutor's probe of the affair called Whitewater. But there is no way the White House can distance itself from this terrible story and its implications. Mr. Hubbell was no bit player in the Clinton administration or in the political and professional lives of the Clintons. He is a former high administration official in whom the president and First Lady have for years reposed an enormous amount of trust and confidence, with whom they have been associated as co-investors, co-workers and confidants. Now it turns out that Mr. Hubbell -- former head of the Arkansas bar's ethics committee, ethics officer for his law firm, author of his state's ethics laws and vetter of the ethics of prospective administration personnel -- was, by his own account, a thief. Mr. Hubbell was the Rose partner whom then-governor Clinton tapped to become chief justice of the Arkansas supreme court. He was mayor of Little Rock. In Washington he ended up in one of the nation's top law-enforcement jobs, that of associate attorney general. Within the Justice Department and throughout the administration, it was understood that for all policy and political issues involving the White House, Mr. Hubbell was the man. For that reason, and his insight into many issues directly and tangentially related to the Clintons' financial and political dealings in Arkansas, he is now of special interest to independent counsel Kenneth Starr. Mr. Hubbell has pledged to cooperate with Mr. Starr's investigation. . . . Since Whitewater became an issue, administration officials have continually blamed Republicans and the press for Mr. Clinton's problems, charging that he has been relentlessly and unfairly scrutinized. That can't be said about Mr. Hubbell's case. It was his law firm that undertook the inquiry into his billing for expenses that led to his resignation from the administration. No one can look at the confession he made yesterday and conclude that anyone but Mr. Hubbell brought on his disgrace.

From The New York Times

Persisting on Whitewater

Whitewater is back, without televised Senate hearings for the moment. The affair has returned in humbler guise -- the patient prosecutorial efforts of Kenneth Starr, the independent counsel. He has now reached two plea bargains -- from Robert Palmer, a land appraiser whose phony estimates appear to have enriched his associates at great cost to the American taxpayer; and from Webster Hubbell, personally installed by the president as political manager of the Justice Department.

It is important to review what these developments mean and do not mean for Clinton and Hillary Rodham Clinton. The downfall of even so close an associate as Hubbell does not mean that the Clintons have done anything wrong. Similarly, Palmer seems more closely tied to Jim Guy Tucker, the governor of Arkansas. But the Palmer case establishes beyond a doubt that there were serious problems of mismanagement and political favoritism at Madison Guaranty, a savings and loan operated by James McDougal, the Clintons' business partner in the Whitewater Development Corp.

This makes all the more pressing the questions that the Clintons, their campaign aides and the White House have refused to answer for three years. Why would they suffer grave political damage, periods of near-paralysis in the government and the loss of friends to resignation and legal problems rather than answer straightforward questions about their finances? No one save Mr. and Mrs. Clinton knows the answer to that mystery.In any case, questions that were valid in 1992 are more so now that Starr has cast new light onto Madison's tangled affairs. Were depositors' or McDougal's funds used to the Clintons' benefit in the Whitewater real estate venture, in which the Clintons had a 50 percent interest? If neither, why did the Clintons claim losses of $47,000, when McDougal -- on paper an equal partner -- claimed twice that amount? Was someone putting money into Whitewater on the Clintons' behalf, and if so, what did that do to their income tax obligation?

Given McDougal's role as a fund-raiser and banker for the campaign, were Madison funds used to pay off Clinton's 1984 campaign debts? Did McDougal and his savings and loan receive favorable treatment from Clinton-appointed bank regulators, increasing the cost to taxpayers when Madison collapsed?

Compared with the scope of these unanswered questions, Palmer, the appraiser, seems like small fry. But in fact he was the foundation upon which McDougal built his fraudulent savings and loan, creating fictitious values that allowed McDougal to pursue his schemes.

It is unclear what, if anything, Hubbell has to tell about Whitewater, Madison, and Mrs. Clinton's legal work for the savings and loan. But as our colleague William Safire observes, the prosecutor and Congress must review Hubbell's work at Justice in light of what we now know about his standards as an attorney. A key question is whether the department, under his political stewardship, tried to bury criminal referrals made by banking officials about Madison Guaranty's dubious lending practices. These referrals were not acted upon in a timely way and might never have surfaced had not investigators gone public with their frustrations.

Jon K. Rust is a Washington-based writer for the Southeast Missourian.