Into the Line of Fire

(2 of 6)

Stephens is in fact still investigating the collapse of Madison Guaranty Savings and Loan for the RTC, the government body that cleans up the affairs of failed S&Ls, in part to look for evidence of fraud that would enable the RTC to file civil claims to recover some of the $47 million that Madison's failure cost taxpayers. That probe would almost inevitably delve into the alleged flow of money between Madison and Whitewater Development Co., in which the Clintons were partners with James McDougal, Madison's former owner. Thus the participants in the vain attempt to get Stephens could try to invoke the basketball rule: no harm, no foul. Or they could claim that when White House aides made remarks merely to express dislike and suspicion of Stephens (the aides make no secret they consider him a "right-wing zealot" out to get the President), those statements were misinterpreted as a demand that Stephens be fired. Still, as a Clinton aide admits, while "the actual words used before the grand jury regarding how we felt about the RTC iring Stephens were 'surprise and shock,' among ourselves the words we use when we discuss it are what they call 'expletives deleted.' "

Stephanopoulos tells TIME he remembers only one conversation about Stephens, with Joshua Steiner, a friend and political colleague who is now Treasury Department chief of staff. In that talk, says Stephanopoulos, he merely "asked how Jay Stephens had come to be retained by the RTC. I was puzzled and blew off steam over the unfairness of that decision because Jay Stephens had accused the President of acting improperly" on another occasion.

The reference is to February 1993 when Clinton fired all 93 U.S. Attorneys who had been appointed by George Bush. One of them was Stephens, who was then U.S. Attorney for the District of Columbia and developing a case against House Ways and Means Committee chairman Dan Rostenkowski -- a pivotal Clinton ally in the battle for health-care reform -- for diverting taxpayers' money to personal and campaign funds. Stephens charged that the mass firing was a way of derailing the Rostenkowski investigation. The RTC, however, chose Stephens precisely because he could be trusted to carry out an investigation that would not back away from information potentially embarrassing to Clinton. Stephanopoulos adds: "Once I got the facts from Josh ((Steiner)), that ended the matter, as far as I was concerned."

But that is not the story Fiske and the grand jury have been hearing from some others. As pieced together by TIME from a review of documents and interviews with many sources -- Administration officials, lawyers for some of the 12 Clinton aides subpoenaed by Fiske and sources involved with the special counsel's probe -- the tale goes like this: