Spotlight falls on Elizabeth Dole over business dealings

REPUBLICAN critics of Mrs Hillary Rodham Clinton are learning the hard way that people in glass houses shouldn't throw stones…

REPUBLICAN critics of Mrs Hillary Rodham Clinton are learning the hard way that people in glass houses shouldn't throw stones.

As a congressional hearing dissects the First Lady's past financial dealings, questions have been raised about business transactions which benefited Mrs Elizabeth Dole, wife of Senator Bob Dole of Kansas, the Republican front runner for the presidential nomination.

Mrs Dole, president of the American Red Cross, is said to have reaped large financial gains in Kansas in the 1980s by having her personal finances handled by an investment adviser who had close knowledge of her husband's political activities.

The adviser, Mr David Owen, once head of the Kansas Republican Party, recently served a year in prison for income tax fraud and has cut his ties with the Doles. He talked about the alleged insider dealing to The New Yorker magazine.

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In one instance Mr Owen, who managed a blind trust for Mrs Dole, allegedly purchased several thousand shares for her in an insurance company which shortly afterwards made huge gains from a loophole in the 1986 Tax Reform Act, of which Senator Dole was a principal framer.

Mr Owen may also have provided Mrs Dole with a financial safety net unavailable to "less well connected clients", the magazine claimed.

In 1983 he set up a company called Golfun with the help $250,000 from Mrs Doles count. It went under, but where other investors lost money, Mrs Dole get hers back, with $71,000 interest. The trust was activated when Mrs Dole, who held two cabinet posts in the Reagan and Bush administrations, needed to avoid a conflict of interests.

If Mr Dole is elected president, Mrs Dole (59), would become the first president's wife to follow her career outside the White House.

She has taken a year off to help her husband's campaign, but said she would resume her duties at the Red Cross once the campaign ended. Her long political career, including spells as Secretary for Transportation and Secretary for Labour, is likely to come under scrutiny along with her financial affairs, because of the concentrated attacks on Mrs Clinton's past.

Mrs Dole, who broke her arm, on Saturday when she slipped on ice in Washington while walking her dog, told The Ned Yorker she had no recollection of any specific financial dealings with Mr Owen.

The role of Mr Owen in Mrs Dole's financial life appears to parallel that of Mr James McDougal in Mrs Clinton's career as a lawyer in Arkansas. Mr McDougal was head of the corrupt Madison savings and loan company in Arkansas for which Mrs Clinton did legal work and from which her husband's election campaigns may have benefited.

Mrs Clinton was in Little Rock yesterday at the start of a tour to promote her book about rearing children, It Takes A Village. She said she was prepared to testify before a congressional hearing on Whitewater. She added she had no reason to apologise and she expected the American people to believe her.