How did Deputy Treasury Secretary Roger Altman, an all-star during Bill Clinton's first season, find himself struggling to preserve his job and reputation as he prepared to testify before Congress on the Whitewater affair this week? The answer is a tangled Washington tale of political intrigue, personal flaws and the ancient impulse to sacrifice a victim to the gods of scandal.
The single biggest mistake Altman and the White House made was to confuse the roles of regulator and politician. Altman was a highly successful Wall Street banker when he joined the inner circle of economic advisers to candidate Clinton. They knew each other at Georgetown University but weren't nearly as close as some have made out. Altman, though, became not just another subcabinet official but a trusted confidant who was often at the White House three times a day. His political acumen was so admired that he helped command passage of Clinton's economic plan through Congress a year ago.
But Altman was also named acting head of the Resolution Trust Corp., the regulatory agency that supervises the cleanup from the savings and loan scandal. And in that job he let his political instinct to protect the president from unfavorable publicity color his regulatory responsibility. In March 1993, Altman sent two news stories to White House counsel Bernard Nussbaum about the Clintons' Whitewater land deal and its complicated ties to Madison Guaranty, a failed Arkansas thrift. That fall, Treasury counsel Jean Hanson alerted White House aides about possible criminal charges that were being considered against Madison that could embarrass the Clintons. Hanson says Altman directed her to do it -- an account Altman denies. Whatever the case, political sensitivities were clearly at work at some level of the regulatory process.
Last February 2, Altman briefed White House colleagues on a developing problem: The statute of limitations on criminal charges involving Whitewater was about to expire. He was clearly uncomfortable about his dual role and mused about recusing himself from any decisions involving Whitewater. But those White House officials, who wanted him in place as an early warning system, persuaded him to stay. Republican Sen. Alfonse D'Amato of New York argues that evidence suggests the meeting was aimed at thwarting the RTC probe. But Altman apparently never used his power to do that. In fact, he worked with Congress to pass a bill extending the statute of limitations. But it now seems clear he was too concerned about Clinton's political vulnerability and his own future as a possible successor to Treasury Secretary Lloyd Bentsen to offend influential friends by ending his fuzzy status.
Later that month, on February 24, Altman testified on Capitol Hill and was asked about his involvement in Whitewater. He mentioned the February 2 briefing but never disclosed that he had discussed recusing himself. And he never mentioned other conversations he had on the issue with White House personnel, claiming they were not "substantive" enough to be worth recalling. In retrospect, says Massachusetts Rep. Barney Frank, a leading administration defender, Altman was trying to be "too cute." Says Frank: "He was so nervous about how things would look that he made himself vulnerable." His concern about "how things would look" came into play again the next day, when Altman finally did decide to recuse himself from Whitewater matters -- but only after learning that the New York Times was about to attack him.
Altman has been cleared of legal wrongdoing. The question is whether he violated any ethical precepts, and that is hard to determine. The line between proper and improper behavior is constantly shifting. In fact, Altman probably wouldn't be facing such a serious problem except for these outside forces:
Republican retribution. Republicans suffered for 12 years while Democrats sniped at the ethical lapses of their appointees, from John Sununu to Edwin Meese. Now, it is payback time.
Bad timing. The current Whitewater hearings cover only a tiny slice of the story -- how the White House handled the emerging scandal -- and it is Altman's misfortune to be a major figure in that small episode. There is also a common tendency by the press and politicians alike to personalize a scandal in order to make it more understandable.
Democratic credibility. Clinton defenders, such as White House counsel Lloyd Cutler, have to preserve their own credibility by admitting some mistakes. And criticizing Altman is the most convenient way to do that.
Washington ritual. One way to quell bad publicity, and gain some breathing room, is to pitch somebody overboard. Rep. Marge Roukema, a New Jersey Republican, in effect offered the White House just that deal, saying that dumping Altman would "re- establish its credibility and integrity."
Are Altman's ethical sins and misjudgments grievous enough to justify his departure? The answer is probably no, but it will be no surprise if it happens.
