Ethics Panel Looking Into Clinton Funds

The director of the Arkansas Ethics Commission said Monday it has begun an inquiry into whether a state development agency violated campaign ethics and disclosure laws to benefit Gov. Bill Clinton, the Democratic presidential nominee.

Jack Kearney said in a telephone interview from Little Rock that the inquiry is centered on the Arkansas Development Finance Authority. The Times reported five weeks ago that Clinton rewarded the financial elite of Arkansas with agency business and low-interest loans while soliciting them for millions of dollars in political contributions.

Clinton established the agency to issue bonds that fund loans for projects from housing to business development. Its business loans have totaled more than $90 million. By granting them, Clinton created a pool of loan recipients and bankers, bond brokers and attorneys who benefited by handling the deals. They have given and loaned $2.7 million to his 1990 race for governor and to his presidential campaign.

Bob Nash, president of the finance authority, did not respond to a telephone call from The Times. But he told the Arkansas Democrat-Gazette that the ethics commission inquiry was politically motivated. Kearney denied it. “We studiously avoid, or attempt to avoid, any entanglement in political embarrassment,” he told The Times.

Kearney said the Democrat-Gazette was accurate in saying that the commission inquiry was prompted by The Times’ story.