Deep Inside the Clintonian Reich: The Corrupt Whitewater Land Deal

Published 20 years ago -  - 20y ago 220

In 1978, Bill Clinton then Attorney General for the state of Arkansas, vied for the office of Governor. A successful bid made Clinton the youngest Governor ever elected. At 32, Clinton was well on his way to full filling his childhood dreams. His tenure was short lived and he was defeated two years later. In 1982 he would run for Governor again and win. He would go on to win re-election three more times.

It was in 1978 that Bill Clinton and Hillary Clinton joined with James B. and Susan McDougal to borrow $203,000 to buy 220 acres of land in the Arkansas’ Ozark Mountains. They soon formed the Whitewater Development Corp., intending to build vacation homes.   In 1982 Jim McDougal bought a savings and loan which he renamed Madison Guaranty. Like many Savings& Loan s in that period, it lent recklessly to insiders, and the owners (the McDougals) skimmed depositors’ money for themselves. In 1985 Madison hired the Rose Law Firm, one of whose partners was Hillary Clinton, to represent it. Also in 1985 the Whitewater land investment of the Clintons and McDougals was in trouble. The individual lots of the land development were not selling. Jim McDougal approached David Hale of Capital Management Services, Inc. Hale’s firm was authorized by the SBA to lend federally guaranteed and subsidized loans to small businesses operated by minorities and the disadvantaged. According to David Hale, McDougal told him that he wanted to clean up some problem loans with some friends in the political family.

Just before Christmas of that year, a state trooper over heard Clinton at the steps of the Capitol building ask Hale, “Are you going to help Jim and me out?”  The trooper, L.D. Brown has confirmed this with Fiske investigators.

In February, 1986, a meeting took place between Hale, Clinton, and McDougal. Hale said he felt pressured into approving an SBA loan for $300,000 to Susan McDougal who was a partner in Whitewater. McDougal and Clinton were not qualified for the loan under SBA guidelines. Clinton, Hale and McDougal thus conspired to defraud  the federal government. The loan was never paid back, and records show that $110,000 of it found its way into the Whitewater account.

In 1988, Hillary Clinton requested the destruction of Madison’s land-contract files. In 1989 Madison collapsed, and had to be liquidated by the Resolution Trust Corporation (RTC), a federal agency established in the late 1980s to dispose of failed S & Ls. The liquidation cost taxpayers more than $60 million.

In 1992 the RTC sent a criminal referral to the Justice Department.  The referral named both Clintons as “potential beneficiaries” of illegal activities at Madison because of the possibility that Madison depositors’ funds went to the Clinton campaign. Indeed, Jim McDougal had withdrawn $30,000 out of the bank to help cover Clinton’s 1984 gubernatorial debts. The money was funneled through a fundraiser for Clinton in 1985. Several of the supposed contributors have denied making any contributions and one named contributor wasn’t even alive at the time.

In June 1993, Deputy White House Counsel Vince Foster files three years’ worth of Whitewater tax returns late. The reader may recall that Foster was a partner in Hillary’s Rose law firm. The law firm that represented Jim McDougal’s Madison Bank.

In July of 1993,  the FBI raided Hale’s office and found documents outlining the illegal loan. Hale was under investigation for unrelated charges and offered to reveal incriminating evidence against Clinton in return for a plea bargain. U.S. Attorney, Paula Casey, a former Clinton campaign worker who had been appointed by Clinton, refused to plea bargain with Hale. But when the special Whitewater prosecutor Robert Fiske came to Little Rock in 1994, he struck a plea bargain with Hale. Since the death of Jim McDougal and Susan McDougal’s silence, Hale is the only key witness that OIC now has in the Whitewater matter. The White House has attempted to destroy Hale as a witness through Salon Magazine. Our in depth article, The Impeachment Of Salon Magazine, the reader will see how Salon used fabricated witness tampering to destroy Hale’s credibility as a witness.

On July 20, 1993, the day Foster committed suicide, White House officials keep the Federal Park Police and FBI from searching his office, and refuse their explicit request to seal the office overnight. White House officials Margaret Williamson, Bernard Nussbaum and Patsy Thomasson remove documents that evening from Foster’s office.

On July 22, 1993, law-enforcement officers were finally able to investigate Foster’s office. Bernard Nussbaum, fails to tell them that documents were removed. Documents that may be relevant to their investigation. It was Nussbaum who shadowed the law-enforcement officers throughout their investigation.

In  November of 1993, Jean Lewis was removed from the still-ongoing probe into McDougal’s Madison Bank She would go on to tell the House Banking Committee the following year of “a concerted effort to obstruct. hamper and manipulate” the probe.

The White House in December acknowledges that documents were removed from Foster’s office.Clinton’s private lawyer, David Kendall, request a Justice Dept. subpoena of the documents. For what purposes did Kendall want them? In any event the Justice Dept. granted him his wish and thus effectively removed them from public scrutiny.

In Jan. 1994 Attorney General Janet Reno selects Robert Fiske as a special investigator for Whitewater. A college student working at the Rose Law Firm  would later tell The New York Times that very soon after Fiske’s appointment, he was told to shred a box of documents with Foster’s initials? Other sources have stated that Hillary Clinton made Rose Law Firm employees shred papers she held at the Governor’s Mansion after the New York Times story on Whitewater broke in 1992.

In February of 1994, the White House feeling the heat attempted to cover up the meeting between Hale and Clinton on the Capitol steps in Arkansas. They sent Skip Rutherford to pressure Trooper Brown not to cooperate with the Whitewater investigators. After the meeting, Rutherford met with White House officials Bruce Lindsey and Betsey Wright. There effort failed and Trooper Brown continued to cooperate.

In March 1994, Webster Hubbell resigned as Associate Attorney General. He was convicted of mail and tax fraud charges dating back to when he and Hillary Clinton were partners at the Rose Law Firm in Little Rock. During his stay in the slammer, Hubbell reportedly had received upwards of $700,000 in consulting fees. Ken Starr who replaced Fiske because of his ties to Janet Reno, has concluded that the payments were made for hush money. Hubbell knows the truth behind Whitewater and what Vince Foster knew. Interestingly, $40,000 came from Revlon, Inc., whose board of director is none other that Vernon Jordan. In addition, $100,000 was received from the Chinese intelligence front, The Lippo Group.

In the spring of 1997, at Johnny’s transmission Mabelville, Arkansas, Johnny Franklin Lawhon Jr, 29 opened up the trunk of a tornado damaged car. He discovered a box of Whitewater records in it, including a copy of a $27,000 cashiers check drawn on McDougal’s Madison Bank and payable to Bill Clinton. Johnny Franklin Lawhon, Jr. realized what he was looking at and turned the box of documents over to the FBI.

In March 1998, according to police, Lawhon and a friend hit a telephone pole at a high rate of speed after their car had become airborne and left the road. They had driven less than 1/4 of a mile at the time of the impact. Lawhon died in the crash.

Published in the November 1, 1998 issue of Ether Zone Online.  Copyright © 1998 Ether Zone Online ( Reposting permitted with this message intact.

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