Whitewater was a scandal stemming from allegations of impropriety surrounding an investment by Bill Clinton and his wife, Hillary Clinton, in the Whitewater Development Corp., an Arkansas real-estate company throughout theirs years in the Governors mansion. Whitewater-related inquiries by Congress, legal authorities, and news organizations continued throughout the Clinton presidency.
Madison Guaranty Savings
The partnership between the Clintons and two of their associates in the venture, James McDougal and his then wife, Susan MacDougal, was formed in 1978 while Bill Clinton was Attorney General of Arkansas and continued after he became governor; Hillary Clinton and her law firm also handled some of McDougal's legal business. During the 1980s, when McDougal used his ownership of the Madison Guaranty Savings and Loan for speculative real-estate ventures, insider loans, and other questionable practices, concern was raised that money may have been used improperly for the failing Whitewater Corp., and that Bill Clinton may have used his influence to help the savings and loan. In 1989 the insolvent institution closed, and the federal government had to finance a $60 million bailout.
When the Whitewater partnership was dissolved in 1992, the Clintons claimed a net loss of more than $40,000. Nevertheless, Whitewater-related inquiries followed them to the White House in 1993, in part because the new administration gave prominent positions to several of Hillary Clinton's former law partners, including Vincent Foster, who was named deputy White House counsel, and Webster L. Hubbell, who became associate attorney general. Foster, who was handling Whitewater-related matters and other politically sensitive issues, committed suicide in July 1993.
Hale was a Clinton appointed municipal judge who stated that James McDougal and Gov. Clinton forced him to give fraudulent SBA loans to Clinton's friends. This included $300,000 to a company connected to Madison Guaranty and run by McDougal's wife, $100,000 of which later ended up in a Whitewater Development Corporation's account.
Criminal indictments considered against Hillary Clinton
An April 10, 1998 memo in the Whitewater Office of Independent Counsel (OIC) summarized Hillary Clinton's “crimes under consideration” for prosecution.
Between January 1994 and February 1996 both Hillary Clinton and [Webster] Hubbell made numerous sworn statements to the [Resolution Trust Corporstion], the FDIC, the Senate and the House of Representatives, and to the OIC. Each of these reflected and embodied materially inaccurate stories relating to: how RLF [Rose Law Firm] came to be retained by MGSL [Madison Guaranty Savings & Loan]; Hillary Clinton’s role in the IDC/Castle Grande venture; Hillary Clinton’s role in representing MGSL; Hillary Clinton’s role in representing MGSL before state agencies’; Hubbell’s representations to the RTC [Resolution Trust Corporation] and FDIC regarding Hillary Clinton’s role in the IDC/Castle Grande venture; and the removal of records from the [Rose Law Firm].
According to prosecutors, Hillary drafted an option agreement that concealed from federal bank examiners a fraudulent $300,000 cross-loan in the Castle Grande transaction. Her concealment of her role in this fraudulent transaction, including the hiding of her Rose Law Firm billing records concerning her legal work for Madison, were the subject of an OIC obstruction of justice probe.
The memo included substantial evidence depicting Hillary, Hubbell, and Vincent Foster, as complicit in activities that “facilitated crimes.” Hubbell was convicted of fraudulent billing practices and sentenced to twenty-one months in prison and fined $135,000. The memo noted that Hillary “destroyed” her personal records of her work for Madison Guaranty. The evidence covers:
Castle Grande. “The Castle Grande transactions were crimes.” The statement is followed by an explicit six-paragraph dissection of the land-flipping scheme.
Madison Guaranty S&L. Hillary minimized the role she played in seeking state regulatory assistance for the corrupt savings and loan, headed by key Clinton financial and political supporter James McDougal. At the time, Bill Clinton was governor of Arkansas.
Vincent Foster and the Missing Rose Law Firm Billing Records. The Rose billing records were a key piece of evidence in the probe. They were missing for years. After Foster’s death, the OIC memo notes "evidence supports the inference that personal documents which Hillary Clinton did not want disclosed were located in Foster’s office at the time of his death and then removed.”
Removal of Records from Vincent Foster’s Office. “ [O]n the afternoon of July 21st Bernard Nussbaum, then White House Counsel, initially agreed to allow two career DOJ employees to review the documents in Foster’s office for evidence that might shed light on the cause of his death. That evening and the next morning Nussbaum, Hillary Clinton, Susan Thomases, and Maggie Williams (Hillary Clinton’s chief of staff) exchanged 10 separate phones calls … That morning, according to the DOJ employees, Nussbaum changed his mind and refused to allow the DOJ prosecutors to review the documents; instead, he reviewed them himself and segregated several as ‘personal’ to the Clintons.”
Hiding the Billing Records. “On the evening of July 22nd, Thomas Castleton … assisted Williams [Maggie Williams, Hillary Clinton chief of staff] in carrying a box of personal documents up to … a closet in Hillary Clinton’s office. The closet is approximately 30 feet from the table in the Book Room, where the billing records were found 2 years later…."Bying the Silence of a Co-Conspirator. Hubbell received several “jobs” from Clinton supporters for which he apparently did little or no work. During a taped conversation in prison, Hubbell appears to acknowledge that he withheld information from the OIC. Several of Hubbell’s job-providers fell most strongly within the hush money allegation.
The National Archives is withholding additional documents critical to understanding Clinton's full role in the Whitewater scandal.
At the president's request, Attorney General Janet Reno named Robert B. Fiske, Jr. as special counsel in January 1994 to investigate Whitewater, including the circumstances surrounding Foster's death. After the Independent counsel statute was reauthorized in June, a three-judge panel appointed Kenneth Starr in August to continue the inquiry, which by 1996 had resulted in the convictions on fraud and other charges of Hubbell, the McDougals, and Jim Guy Tucker, who had succeeded Clinton as Arkansas governor.
The Independent counsel
|“|| declared in September 2000 that the office had closed its inquiry into the original Whitewater/Madison Guaranty allegations without finding evidence sufficient to justify a criminal indictment of either Bill or Hillary Clinton. On January 19, 2001, as part of an agreement with the independent counsel, Bill Clinton formally acknowledged that in early 1998 he had committed perjury; in exchange, the independent counsel agreed not to bring criminal charges against Clinton after he left office. In his final hours as president, Clinton pardoned Susan McDougal, who, in addition to her felony convictions, had gone to prison on contempt charges rather than testify against him.
Final reports by the independent counsel on the Whitewater and Lewinsky investigations were made public in March 2002. On the Whitewater matter, prosecutors concluded that although both Clintons had made "factually inaccurate" statements to federal investigators, the available evidence failed to prove that either of them had committed perjury or obstructed justice. Concerning the Lewinsky probe, the independent counsel believed he had enough evidence to indict and convict the former president, but had declined to prosecute because Clinton had "publicly admitted his wrongdoing" and been punished enough by his impeachment and other disgraces
Mark Tuohey, past President of the D.C. Bar who served as deputy counsel to Ken Starr, has been identified as the person who thwarted both the Whitewater and Foster death investigations internally. When evidence surfaced of collusion between White House Chief of Staff Abner Mikva and the Starr investigation to contain negative publicity and harass witnesses in the Forbes magazine Fostergate episode, Tuohey resigned to join a law firm representing the Rose Law Firm whose chief litigators once included Vince Foster, Hillary Clinton, and Webster Hubbell. According to the Washington Post, Tuohey was leaving to join the law firm of Vinson & Elkins. Kenneth Starr's ethics officer, Sam Dash, ruled there was no conflict of interest.
US Attorney Miguel Rodriguez who was assigned to Starr's office claims when he produced damning evidence of a possible Foster murder coverup, he became a target and was investigated internally. Rodriguez was threatened by FBI investigators and others to "back off" and "back down." Rodriguez stated the result of the investigation was pre-determined by Fiske, and Starr held to the same determination, and that Mark Tuohey was instrumental in enfircing that determination.
- History.com - Whitewater
- A Whitewater Chronology, What really happened during the Clinton years, OpinionJournal, May 28, 2003. Retrieved 15 June 2007.
- Aides Say Mrs. Clinton Erred In Claiming Press Got All Files, By Stephen Lanaton, The New York Times, January 20, 1996.