-Caveat Lector- ISSUE 1563 Sunday 5 September 1999 Critics attack Clintons' mortgage deal By David Wastell PRESIDENT Clinton was engulfed in a fresh financial controversy yesterday over the mortgage arrangements for the $1.7 million (£1.1 million) house which will provide the base for his wife's Senate election challenge. The Clintons, who have legal debts of more than £3 million, were able to buy the 11-room colonial-style house in Chappaqua, north of New York city, only after the President's chief fund-raiser, Terry McAuliffe, personally secured the £840,000 loan. Mr McAuliffe, 42, who rose to prominence raising cash for President Jimmy Carter's 1980 re-election campaign, is seen by many as the personification of the campaign finance system, which critics say is in danger of corrupting United States politics. Although the financier has never been the target of any criminal inquiry, several of his business dealings have come under legal scrutiny. Pressure groups seeking higher ethical standards in public office pounced on the Clintons' arrangement yesterday, referring to Mr McAuliffe as the US First Family's "First Friend". Chuck Lewis, of the Centre for Public Integrity, said the deal meant Mr McAuliffe had become the Clintons' "personal financial backer". He added: "I've never seen a president so personally dependent financially on one person." Ellen Miller, of Public Campaign, said: "Probably no one has more and longer tentacles into the worlds of money and politics than Terry McAuliffe. It's an unhealthy relationship for anyone to have to the President and the First Lady." A spokesman for Democracy 21 said: "It's dangerous." The Clintons' mortgage, which is on an interest-only basis and which must be repaid in full after five years, comes from a bank with which three Clinton administration aides or friends have ties. Although the interest rate will be adjustable, it is currently expected to be set at 6.52 per cent when it is fixed for the first six months on November 1, the closing date for the purchase. Monthly payments will be £4,500, which can be offset against tax. Under the unusual arrangement made with the bank, Bankers' Trust Private Banking, Mr McAuliffe will deposit the full amount he is guaranteeing for the lifetime of the mortgage. By doing so, say mortgage experts, he enables the Clintons to avoid having to endure the full financial scrutiny of the bank. If the Clintons default on the mortgage, the bank will seize Mr McAuliffe's cash. Otherwise he will receive it back, with interest, when the mortgage is repaid. The deal is set up in such a way that, under US government rules, Mr McAuliffe's loan does not constitute a gift. Vernon Jordan, a Washington lawyer and another close friend, is one of three people connected to Mr Clinton with links to the bank, although it is not known whether he played any part in setting up the loan. He is a former director. The bank's current vice-chairman and its former chief executive both previously held junior positions within the administration. A White House spokesman dismissed the criticism, saying: "Terry McAuliffe is a close friend of the President and he's happy to be of some help here." Meanwhile in Chappaqua, Westchester County, there were murmurings of discontent at the prospect of the 11,200-strong community facing large bills for the extra policing required to deal with the traffic and parking problems caused by the Clinton entourage and sightseers. The town supervisor, Clinton Smith, said: "We'd have no qualms about suggesting that it should be the responsibility of the federal government." 3 September 1999: Clintons buy New York home offered at £1m 2 September 1999: Hillary's consort runs gauntlet in enemy territory 30 August 1999: Cash rolls in as Hillary Clinton meets the rich 24 August 1999: Taxpayers foot Hillary's holiday campaign bill 30 July 1999: Clinton told to pay £56,000 costs over Lewinsky 'lies' 15 November 1998: Clinton camp to turn the heat on Starr http://www.telegraph.co.uk/et?ac=001863356114602&rtmo=VZ4Vjj4x&atmo=99999999 &pg=/et/99/9/5/wclin05.html Bard DECLARATION & DISCLAIMER ========== CTRL is a discussion and informational exchange list. Proselyzting propagandic screeds are not allowed. Substance—not soapboxing! 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