Clinton stories the media forgets to tell you

The Clintons were close business partners with the McDougals. The major media largely ignored this story as it developed and seems now to have forgotten it completely

1960s - Bill Clinton and his friend Jim McDougal get a job in the office of Senator J. William Fulbright. The Washington Post will later write, "McDougal was interested in making money while Clinton was obsessed with political stature."

1974 - Clinton is elected governor.

The Clintons and McDougals buy land in the Ozarks for $203,000 with mostly borrowed funds. The Clintons get 50% interest with no cash down. The 203 acre plot, known as Whitewater, is fifty miles from the nearest grocery store. The Washington Post will report later that some purchasers of lots, many of them retirees, "put up houses or cabins, others slept in vans or tents, hoping to be able to live off the land." More than half of the purchasers will lose their plots thanks to the sleazy form of financing used.

Two months after commencing the Whitewater scam, Hillary Clinton invests $1,000 in cattle futures. Within a few days she has a $5,000 profit. Before bailing out she earns nearly $100,000 on her investment. Many years later, several economists will calculate that the chances of earning such returns legally were one in 250 million.

Governor Clinton appoints Jim McDougal an economic development advisor.

1980 - According to Jim McDougal's later account, he and Henry Hamilton, ``developed a system to pass money to Clinton,'' then governor of Arkansas. ``I considered it just another way of helping to take care of Bill. A contractor agreed to pad my monthly construction bill by $2,000. The contractor put the figure on his invoice as a cost for gravel or culvert work. After I paid the full amount ... the contractor reimbursed me the $2,000. I turned the money over to Henry to give to Clinton. Once, after I handed Henry his latest consignment of 20 hundred-dollar bills to relay to the governor's office, he turned the bills over and over in one hand, like a magician. Henry grinned. `You know,' he said, `Caesar had his Brutus, Charles the First had Cromwell. Clinton could profit from these examples if he crosses us.'"

1981 - Hillary Clinton writes Jim McDougal: "If Reagonomics works at all, Whitewater could become the Western Hemisphere's Mecca."

1982 - Jim McDougal purchases Madison Guaranty Savings & Loan.

1983 - State regulators warn Jim McDougal's Madison Guarantee S&L to stop making imprudent loans. Gov. Clinton is also warned of the problem but takes no action.

Judge David Hale's Capital Management Services starts making loans to state figures. According to Wikipedia, "David Hale is a former Arkansas municipal judge and former Arkansas banker. He worked with Jim McDougal on $3 million in loans from a lending company he ran. He pled guilty and went to jail for conspiring to defraud the Small Business Administration in looting the funds from a dummy business he established. As part of his guilty plea in looting money from an insurance company, he provided the allegations for the Whitewater scandal, and testimony for its investigators. ... Hale testified in U.S. District Court that Gov. Bill Clinton pressured him to make a fraudulent $300,000 loan and that he not be named in the loan.”

1984 - The Federal Home Loan Bank Board issues a negative report on Madison Guaranty, questioning both its lending practices and its financial stability. The Arkansas Securities Department begins to take steps to close it down. Wikipedia: "Starting in 1982 and operated by Jim McDougal-Susan McDougal, Madison Guaranty Savings and Loan failed in the late 1980s. On April 14, 1997, Jim McDougal was convicted of 18 felony counts of fraud conspiracy charges. The counts had to do with bad loans made by Madison S&L. This S&L was partnered with Whitewater Development Corporation, the subject of Whitewater probe and owned, in part, by Bill and Hillary Clinton." 

Madison Guaranty and McDougal hired Rose Law Firm where the Mrs. Clinton worked as a defense attorney. Mrs. Clinton's Rose Law Firm billing records on Madison Guaranty and McDougal's Castle Grande project that Hillary called IDC - Industrial Development Corporation. How much work she actually did on Madison and Castle Grande was the subject of the missing billing records. McDougal also held a fundraiser at Madison Guaranty that paid off Clinton's campaign debt of $50,000. Madison cashier's checks accounted for $12,000 of the funds raised.
The Washington Times will later quote an unnamed Clinton business associate who claims the governor used to "jog over to McDougal's office about once a month to pick up the [retainer] check for his wife." Jim McDougal will claim later that Clinton on one of his jogs had asked that Madison steer business to Hillary Clinton.

Tens of thousands of dollars in mysterious checks begin moving through Whitewater's account at Madison Guaranty. Investigators will later suspect that McDougal was operating a check-kiting scheme to drain money from the S&L.

1985 - Mrs. Clinton is put on a $2,000 a month retainer by Madison Guaranty. Jim McDougal will later write in his book that the payments were in lieu of his earlier system of passing money to Bill Clinton. Ms. Clinton will later claim not to have received any retainer nor to have been deeply involved with Madison. 

Subsequent records show, however, that she represented Madison before the state securities department. After the revelation, she says, "For goodness sakes, you can't be a lawyer if you don't represent banks."

1986 - A Federal Home Loan Bank Board audit describes Madison as financially reckless, rife with conflicts and on the brink of collapse. It says that the S&L's records are so poor that examiners often could not discover the "real nature" of transactions. In August federal regulators will remove McDougal from the board of Madison.

Capital Management Services Inc., owned by David Hale, makes an SBA-approved loan of $300,000 to Susan McDougal, sole owner of an advertising firm called Master Marketing. The loan will never be repaid. Hale will later claim that Clinton and Jim McDougall pressured him into making the loan.

1987 - According to the McDougals, the Whitewater files are transferred to the Clintons. In the 1992 campaign, the Clintons will say they can not find the records.

1989 - Madison S&L is closed by federal regulators at an eventual cost to taxpayers of $47 million. Jim McDougal is indicted for bank fraud

1990 - Jim McDougal is acquitted of bank fraud.

1992 - Resolution Trust Corporation field officers forward a criminal referral on Madison Guaranty to Charles Banks, U.S. Attorney for the Eastern District of Arkansas. The referral alleges a check-kiting scheme by Madison owners Jim and Susan McDougal and names the Clintons and Jim Guy Tucker as possible beneficiaries. Banks forwards the referral to Washington.

After the election Vincent Foster meets with James McDougal and arranges for him to buy the Clintons' remaining shares in Whitewater Development Co. for $1,000.

1993 - The RTC and SBA investigate the $300,000 SBA-approved loan to Susan McDougal in 1986, provided by Capital-Management Services Inc. owned by David L. Hale. The FBI obtains a warrant to search Hale's office.

The FBI raids David Hale's Little Rock office and seizes documents including those relating to Capital-Management.

1995 - Governor Jim Guy Tucker and the McDougal are indicted for bank fraud and conspiracy.

1996 - Jim McDougal tells a reporter that he doesn't expect to leave prison alive.

Wikipedia - From September 9, 1996 until March 6, 1998, McDougal spent the maximum possible 18 months imprisonment for civil contempt, including 8 months in solitary confinement, and was subjected to "diesel therapy" (the practice of hauling defendants around the country and placing them in different jails along the way). In her case, Susan was shuffled from Arkansas to "Los Angeles to the Oklahoma City transfer center, and then on to the Pulaski County Jail in Little Rock, Arkansas" 1997 - James McDougal gets a sharply reduced three year prison term for his role in the Madison Guaranty bank case upon the recommendation of special counsel Kenneth Starr.

1998 - Jim McDougal, who once said that the Clintons move through people's lives like a tornado, dies after being placed in solitary confinement again. On 12 medications. There are questions about other drugs given, including Lasix, which is contraindicated for heart patients. In the hours before McDougal died he had complained of dizziness and became ill but was never seen by a doctor. He had also been separated from his heart medication when placed in an isolation cell before his death. An autopsy on McDougal finds "a toxic but non-lethal amount" of Prozac in his body according to the Fort Worth Star-Telegram. The medical examiner declares the death unrelated to the amount of Prozac, which was three times the normal dosage.

Shortly before he dies, McDougal completes a book with Curtis Wilkie, staff writer for the Boston Globe. The NY Times writes of the book, "Moments after President Clinton gave videotaped testimony for the criminal trial of James and Susan McDougal, his former Whitewater partners, he privately agreed to give Mrs. McDougal a pardon if she was convicted, a new book by James McDougal says. 'I'm willing to stick with it, but if it doesn't work out, or whatever, can you pardon Susan?" McDougal recalled asking Clinton - shortly after the president had completed his testimony - in the Map Room at the White House two years ago.

'You can depend on that,' Clinton is said to have replied quietly in the private conversation, apparently out of earshot of others. McDougal then asked, 'Like I say with all lawyers, I mean promptly?' The president grinned and nodded, by McDougal's account, and said, 'If you hang with me, I'll do it.'

Curiously, the medical examiner made no mention of having found traces of any of the 12 medications McDougal was taking. There was also a report from an inmate that McDougal had been given Lasix to encourage urination. Lasix must be taken with a potassium supplement -- without it serious heart problems can develop. Wesley Phelan of the Washington Weekly reports that Lasix can cause "excessive diuresis, blood volume reduction, circulatory collapse, and vascular thrombosis." Further, if McDougal was on the heart medication digitalis, the use of Lasix would be even more serious. The ME would not confirm to Phelan whether he had tested for the presence of Lasix.

After only four months of a two-year fraud sentence and after serving 18 months for refusing to talk to a grand jury about Bill Clinton, Susan McDougal is released by a federal judge for medical reasons.

Following her release, McDougal began serving the two-year sentence for her 1996 conviction. Soon after, the OIC indicted McDougal on criminal contempt-of-court charges, and charged her with obstruction of justice. After serving four months on the Whitewater fraud conviction, McDougal was released for medical reasons.

On April 27, 1998, deputy independent counsel Hickman Ewing meets with his prosecutors to decide on whether to indict Hillary Clinton. Here's what happened as reported by Sue Schmidt and Michael Weisskopf in their book, "Truth at Any Cost:"

"[Ewing] paced the room for more than three hours, recalling facts from memory in his distinctive Memphis twang. He spoke passionately, laying out a case that the first lady had obstructed government investigators and made false statements about her legal work for McDougal's S & L, particularly the thrift's notorious multimillion-dollar Castle Grande real estate project. . .The biggest problem was the death a month earlier of Jim McDougal. . . Without him, prosecutors would have a hard time describing the S & L dealings they suspected Hillary Clinton had lied about."

CNN: Deputy independent counsel Hickman Ewing testified at the Susan McDougal trial Thursday that he had written a "rough draft indictment" of first lady Hillary Rodham Clinton after he doubted her truthfulness in a deposition. Ewing, who questioned Mrs. Clinton in a deposition at the White House on April 22, 1995, said, "I had questions about whether what she was saying were accurate. We had no records. She was in conflict with a number of interviews."

Ewing said those interviews by investigators were primarily with other people in the Rose Law Firm. Ewing said he had questioned Mrs. Clinton about her representation of Jim McDougal's Madison Guarantee Savings & Loan when she was at the Rose Law firm in Little Rock. "I don't know if she was telling the truth. I did not circulate the draft. I showed it to one lawyer (in the independent counsel's office) who said he didn't want to see it," Ewing said, under questioning from McDougal attorney Mark Geragos. . .

Ewing also testified that in a later deposition with both the president and first lady on July 22, 1995, he had questions about the truthfulness of both Clintons. McDougal's attorney Mark Geragos asked Ewing: "Did you say the Clintons were liars?" "I don't know if I used the 'L-word' but I expressed internally that I was concerned," Ewing said.

1999 - Susan McDougal refuses to answer questions from a grand jury and is jailed for contempt. She will later be acquitted of obstruction of justice charges and freed of contempt charges by a hung jury.

2001 - A few hours before leaving office, President Clinton issues 140 pardons including to friends including Susan McDougal.