The Whitewater controversy stemmed from an ultimately unsuccessful land-development partnership that the Clintons entered into in 1979, while Mr. Clinton was governor of Arkansas, with the owner of a savings and loan association, James B. McDougal, and his wife, Susan McDougal.
After Mr. Clinton became president, the Clintons’ roles in the venture became a focus of scrutiny and accusations. Among the issues were whether they had been involved in their partners’ illegally channeling money to the financially sinking enterprise and whether Mr. Clinton had personally benefited from those moves. The Clintons denied involvement in the frauds, or any knowledge of them as they were occurring; they said they had lost tens of thousands of dollars in the project.
Mr. Nussbaum was criticized for suggesting that the Clintons resist turning over Whitewater-related documents to investigators. The critics also contended that private meetings that Mr. Nussbaum had with Treasury Department officials during an investigation into the savings and loan amounted to White House interference with the inquiry, out of concern, the critics said, over what investigators might find out about the Clintons’ ties to the S&L.
Mr. Nussbaum said that the meetings were simply intended to learn, for his client, where the inquiry stood. Mr. Clinton publicly said in March 1994 that Mr. Nussbaum had done nothing wrong in the matter, though he allowed that the meetings might have left an impression of impropriety. The next day, he asked Mr. Nussbaum to resign.
Mr. Clinton “asked me to resign in response to media and political pressure,” Mr. Nussbaum told The New York Times in 2001. There had been “lots of innuendo in the press” and “phantom scandals,” he said.
The Whitewater inquiry was pursued initially by a special prosecutor appointed by Attorney General Janet Reno and later primarily by Kenneth W. Starr, a Republican appointed by a three-judge panel. The Clintons were never charged with any crimes, though it was Mr. Starr’s contention that Mr. Clinton had obstructed the investigation.
The McDougals and 12 others were ultimately convicted in the affair. President Clinton pardoned Ms. McDougal before he left office in 2001. Mr. McDougal died in a prison medical facility in 1998.