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Untangling Whitewater
By Dan Froomkin
It all started with a little real estate deal 20 years ago. In 1978, then-Arkansas Attorney General Bill Clinton and his wife, Hillary, joined a partnership with James and Susan McDougal to buy 220 acres of riverfront land and form the Whitewater Development Corp.
The goal was to sell lots for vacation homes. But the partnership did poorly and finally dissolved in 1992, leaving the Clintons reporting a net loss of more than $40,000.
James McDougal also owned a savings and loan association, for which Hillary Clinton did legal work. Due in part to a series of fraudulent loans, McDougal's Madison Savings and Loan was one of many thrifts that went bust at taxpayer expense in the 1980s.
Some Clinton associates clearly broke the law during the Arkansas years. The McDougals, most notably, were both found guilty of fraud.
Over time, the investigation known as "Whitewater" grew well beyond allegations related to the Clintons' financial and legal dealings in Arkansas. It also encompasses the Clintons' responses to the allegations – and such unrelated events as the firing of White House travel office clerks.
Key Elements
Some of the key kinks in the Whitewater tangle:
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A fraudulent $300,000 federally backed loan to Susan McDougal, some of which went into Whitewater Development Corp. David Hale, a former Little Rock judge whose company issued the loan, told investigators that Bill Clinton pressured him to do so.
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The mysterious disappearance and rediscovery of billing records showing the extent of Hillary Clinton's legal work for McDougal's savings and loan. Missing and under subpoena for two years, they turned up in January 1996 in the Clintons' private quarters at the White House.
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The firing of seven members of the White House travel office in 1993, possibly to make room for Clinton friends – followed by an FBI investigation of the office, allegedly opened under pressure from the White House to justify the firings. Sometimes called "Travelgate."
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The 1993 suicide of White House counsel Vincent Foster, hard on the heels of the travel-office imbroglio and his filing of delinquent Whitewater Corp. tax returns.
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The collection of hundreds of confidential FBI files on prominent Republicans by a minor White House operative in 1993 and 1994. Sometimes called "Filegate."
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The more than $700,000 paid to former associate attorney general Webster L. Hubbell, most of it from friends of President Clinton and Democratic Party supporters, just as the former law partner of Hillary Clinton was coming under intense scrutiny by Whitewater investigators.
Until the Lewinsky matter, the Clintons came through allegation after allegation with their credibility shaken but not destroyed.
The original Whitewater special prosecutor was Robert B. Fiske Jr., a moderate Republican selected in January 1994 by Attorney General Janet Reno, who had the authority to make the appointment because the independent counsel law had expired.
In August 1994, with the law renewed and Fiske under fire from conservatives for being insufficiently aggressive in pursuit of the president, the three-judge panel in charge of appointing independent counsels abruptly replaced him with a conservative activist named Kenneth W. Starr.
Starr had been a top aide in the Reagan Justice Department, a federal appeals court judge and then solicitor general under President George Bush.
Major Questions
Starr's Little Rock grand jury, which was investigating the Arkansas aspects of Whitewater, disbanded in early May 1998, and activity moved to Washington. Among the major non-Lewinsky questions investigated by Starr and his allies:
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Did the White House arrange payments to Hubbell in an effort to buy his silence about things he might have learned while he and Hillary Clinton were partners at the Rose Law Firm?
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Did the White House pressure the McDougals not to talk during their fraud trial?
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Did Hillary Clinton obstruct the investigation by lying or hiding her records?
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Did Bill Clinton lie in sworn testimony in 1996 when he denied any knowledge of the fraudulent $300,000 loan to Susan McDougal?
© Copyright 2000 The Washington Post Company
To Learn More Check Out Our Whitewater Timeline
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