HUBBELL LIED TO CLINTON AFTER QUITTING : DISGRACED JUSTICE OFFICIAL TOLD PRESIDENT HE DIDN'T BILK LAW FIRM.

Byline: Ron Fournier Associated Press 

Four months after resigning from the Justice Department under an ethical cloud, Webster Hubbell drove to Camp David and assured President Clinton he didn't bilk his former law firm. ``I never told him the truth,'' Hubbell said Thursday.

On a walk through the woodsy presidential retreat in July 1994, Clinton and Hubbell discussed the allegations. ``He believed me, and I was wrong,'' Hubbell said in an interview with the Associated Press.

The invitation from the Clintons, which included a game of golf and an overnight stay, came shortly after White House aides had begun an effort to secure Hubbell financial help. Aides say they were unaware that the future Whitewater figure was under criminal investigation.

But Whitewater investigators, frustrated by Hubbell's memory lapses since he became a cooperating witness, are delving deeper into whether presidential friends tried to buy Hubbell's silence. Among the signs Thursday:

Sources confirmed that White House counselor Mack McLarty, who helped arrange employment for Hubbell while serving as Clinton's chief of staff, received a subpoena from independent counsel Kenneth Starr. Current Chief of Staff Erskine Bowles, another aide who helped Hubbell, was also expected to get a subpoena soon. Both intend to cooperate, officials said.

A Texas businessman who hired Hubbell was summoned before a Little Rock, Ark., grand jury by Starr. The grand jury also heard testimony from James McDougal, the convicted former Whitewater business partner of the Clintons.

A House investigatory committee prepared another round of subpoenas, including one to an attorney who arranged to hire Hubbell.

Hubbell said he knew at the time of the July 1994 meeting at Camp David, Md., that he had bilked his former law firm but lied to Clinton about it. Months later, he reversed course and pleaded guilty.

``The president asked me if I'd done something wrong,'' Hubbell said in a telephone interview from Little Rock. ``And I didn't tell him the truth.''

Hubbell's soft voice cracked as he added, ``I never told him the truth.''

A key question for prosecutors is when White House officials assisting Hubbell first knew he was under criminal investigation. Hubbell said he could not remember exactly when he realized he was under investigation, saying he was in a state of denial that lasted long after his resignation.

``I hoped I could work it out,'' he said.

Hubbell, one of the president's closest confidants, abruptly resigned from the No. 3 job at the Justice Department in March 1994 amid reports of a billing dispute with the Little Rock law firm where he and Hillary Rodham Clinton had been partners.

At least three top administration officials, including McLarty and Bowles, made calls to find Hubbell work in the days that followed, and Hubbell reportedly landed several hundreds of thousands of dollars' worth of work.

Hubbell and the White House both deny that the jobs were a payoff.

Expressing deep regret for misleading Clinton and other friends, Hubbell said they had no reason to believe he was guilty or needed to be silenced.

On Thursday, Clinton said McLarty and Bowles had acted ``just out of human compassion'' and that what they did was entirely proper because they believed Hubbell had done nothing wrong.

``At the time that was done, no one had any idea about what the nature of the allegations were against Mr. Hubbell or whether they were true,'' Clinton said. ``Everybody thought there was some sort of billing dispute with his law firm, and that's all anybody knew about it, so no, I do not think they did anything improper.''