COURT UPHOLDS EXPANSION OF WHITEWATER PROBE.

Byline: The New York Times

In an affirmation of the sweeping power of independent counsels, a federal appeals court Friday concluded that the legal team investigating accusations of misconduct by President Clinton and his wife did not overstep their authority by broadening the inquiry to indict the current governor of Arkansas.

A three-judge panel of the 8th Circuit U.S. Court of Appeals found that the prosecutor, Kenneth Starr, had not exceeded his authority and that "the prosecutions at issue fall within the broad grant of original prosecutorial jurisdiction."

Starr, whose investigation of the Clintons is continuing, said in a statement that he was gratified by the ruling and would proceed with the additional prosecution of Gov. Jim Guy Tucker.

The ruling is likely to blunt some of the criticism that has surrounded Starr's work and that of other independent counsels. In the case of Starr, some critics had accused him of wandering far afield from his original purpose.

The court wrote that the law governing independent counsels was "open-ended" and "expansive" in that it also allowed the special prosecutor to investigate any "other allegations or evidence of violation of any federal criminal law" growing out of the initial investigation.

Ultimately, the judges said that the prosecutor had the power to pursue issues that show connections among the Clintons and a variety of other entities, including Whitewater Development Co., the failed Madison Guaranty Savings & Loan Association, and a small-business lending concern that may have lent money to one or more of the people in these other businesses.

The ruling comes even as Tucker defended himself in a trial in another case.

While reinstating the indictment, the appeals panel also took the unusual step of granting Starr's request that U.S. District Court Judge Henry Woods, who originally threw out the indictment last September, be removed from the case and another judge assigned.

The ruling cited newspaper reports, magazine articles and television interviews in which Woods, an appointee of President Jimmy Carter, talked of his admiration for Hillary Clinton, and acknowledged that he had spent the night at the White House as the Clintons' guest in November 1994.