Missing Whitewater Documents Found In Junked Car -- Check To Clinton Included, But His Lawyer Questions Papers' Authenticity

LITTLE ROCK, Ark. - Coming into a treasure-trove of documents that included a cashier's check payable to Bill Clinton, Whitewater prosecutors have pieced together previously unknown transactions at an Arkansas savings and loan, people familiar with the probe say.

Thousands of pages of documents pulled from a tornado-damaged car last March have taken the investigation in "new and interesting directions," said one source, a grand jury witness who spoke only on condition of anonymity.

A featured exhibit at several grand jury sessions was a cashier's check for almost $30,000 to Clinton, several witnesses say.

The discovery of the 1982 Clinton check and other documents missing for a decade has opened a new line of inquiry by prosecutors into whether Clinton testified accurately about his relationship with James and Susan McDougal and their failed Arkansas savings and loan, the witnesses said.

The president swore under oath last year that he "never borrowed any money" from the McDougals' failing Madison Guaranty S&L.

The president's Whitewater lawyer, David Kendall, questioned the authenticity of the documents yesterday, saying they may have the credibility of a "freshly written Elvis autobiography," and that it's time for "a wrap-up" of the "interminable, leak-ridden" investigation being conducted by independent counsel Kenneth Starr.

Deborah Gershman, a spokeswoman for Starr's office, declined to comment.

Kendall said that "if authentic," the check appears likely to have been one issued in the amount of $27,600 to pay off a loan at a bank owned by McDougal - a $30,000 loan he said McDougal took out in August 1981 to provide capital at the Whitewater real-estate venture jointly owned by the Clintons and the McDougals. "Neither the president nor Mrs. Clinton had signed for this loan," Kendall said.

Kendall was unavailable to discuss why, in that case, Madison would have issued a check to Clinton or how that squares with the president's statement that he never borrowed money from McDougal's savings and loan.

Witnesses said markings on the cashier's check, which bore no Clinton endorsement, suggested that the proceeds may have been deposited in one of two Arkansas institutions where Clinton and his wife, Hillary, did business - Madison Bank & Trust, owned by the McDougals, or Union National Bank.

The loan that Kendall cited as the possible reason for the check payable to Clinton also came from Madison Bank & Trust.

The documents were found by a car-repair-shop operator in the trunk of an old Mercury Marquis - its paint peeled and windows blown out - that was damaged when tornadoes swept across Arkansas in March.

The documents had been given a decade ago to Madison Guaranty S&L employee Henry Floyd to be delivered to a warehouse for storage, but Floyd's car broke down.

Floyd wrote two checks for the repair work that bounced, and ultimately abandoned the car altogether.

"I just forgot the Madison documents were in the trunk," Floyd said in an interview.

The vehicle sat unnoticed in a storage yard for old cars until the garage owner's stunning discovery.

"The first person I told was my accountant. He said, `You got something here,' and his eyes got big," recalled the garage owner, speaking on condition of anonymity.

"There were cashier's checks just lying there. I come to one that has Bill Clinton's name on it; I saw McDougal's name, Jim Guy Tucker's name, and I thought this might be something they (prosecutors) are looking for," the owner added.

Tucker, who succeeded Clinton as Arkansas governor, resigned last year after being convicted of fraud and conspiracy in the Whitewater case.

The garage operator said he talked to one of his relatives, who contacted the FBI.

Material from the Washington Post is included in this report.