March 20, 2002, 11:25PM

Clintons are cleared in Whitewater report
Independent counsel ends 8-year probe
By NEIL A. LEWIS
New York Times
WASHINGTON -- In a final report that puts an end to the wide-ranging Whitewater investigation, the independent counsel's office said on Wednesday that there was insufficient evidence to show that neither President Clinton nor first lady Hillary Rodham Clinton committed any crimes.

The investigation vexed Clinton for most of his two terms, especially when it set off an impeachment battle over the president's relationship with Monica Lewinsky, a White House intern.

Robert Ray, the last occupant of the office of independent counsel for Whitewater matters, said in the 2,090-page report that the Clintons' principal business partner in the Whitewater land development scheme in Arkansas, James McDougal, had committed several acts of fraud, but that there was no credible evidence that the Clintons either knew of or participated in those acts.

The four-volume report ended the long legal melodrama that divided the nation over whether the president was the victim of a politically motivated criminal investigation or had truly committed serious crimes. It also ended, at least for now, the era of the independent prosecutor.

The turmoil engendered by the Clinton investigations proved too much for Congress, which let the law lapse last June.

The report said McDougal and his wife, Susan, partners in the venture, may have committed illegal acts beyond those for which he was convicted. James McDougal died in prison in 1998.

The report questions the accuracy of some of Hillary Clinton's testimony over her role in drafting a legal document relating to a subsidiary land development in Arkansas, which federal investigators deemed a fraud. But while the report disputes Clinton's statements that she did not have anything to do with the document, it says there is no evidence she participated in the scheme.

The report released by a special panel of three federal judges provided the details to conclusions that Ray had essentially announced in September when he said that there was no evidence that the Clintons either participated in criminal acts or purposely misled investigators.

The independent counsel law, enacted after the Watergate scandal in the Nixon administration, was aimed at providing a way around the inherent conflicts that could occur since the Justice Department was obliged to investigate allegations made against senior administration officials.

Every president since Gerald Ford, who succeeded President Nixon in 1974, was troubled by independent counsel inquiries. Ronald Reagan and George Bush were preoccupied with an independent counsel investigation of whether officials illegally shipped arms to Iran to pay for anti-communist guerrillas in Nicaragua.

The release of the Whitewater report means that the main activity of the independent counsel's office is finished. Ray has resigned and is seeking the Republican nomination to run for Senate from New Jersey. The office will remain to deal with housekeeping items like requests for reimbursement for legal costs as required by the now-expired law.

The investigation began in January 1994 when Bill Clinton asked for a special prosecutor to be named to investigate his Whitewater land dealings.