Columns » Ernest Dumas

Revisiting Whitewater


Let us today revisit the storied days of Whitewater, that land of enchantment, if you have the stomach for it. Actually, it is not such a miserable exercise unless you happen to be one of the principals. To them I apologize. The passage of every year clears away a little more of the detritus and allows us to see past the angry strivings of the people who were involved and perhaps to approach some objective historical perspective. We owe this little lesson to the Arkansas Democrat-Gazette and a few other partisans who raged against the Clinton library for its kind treatment of the president in the exhibit that dealt with Whitewater investigations, which led to his impeachment once they got away from Whitewater and onto sex. The Whitewater exhibit treats the investigations as part of a Republican vendetta to thwart his presidency. This line from the exhibit offended the paper’s editors: “None of these efforts yielded a conviction for public misconduct.” The editorial sneeringly called the “public misconduct” reference a “Clinton clause,” an example of the “specialized vocabulary” he often used to mask his misconduct. It said the Whitewater prosecutions resulted in the convictions of “a dozen or more ... of the president’s friends and associates.” The sentence from the museum exhibit is a statement of indisputable fact. The editorial’s statement that a dozen or more friends and associates of the president were convicted is indisputably false. History’s job, the editorial said, is to separate fact from interpretation. Fair enough. So here are the facts: Not one conviction involved misconduct by anyone in public office. Only one involved a transaction that had even a remote connection to Clinton. The Whitewater prosecutor wanted to establish a connection in another case but produced no evidence. Only four of the 14 people convicted had ever had any personal or political connection to Clinton. Most of them were either Clinton’s political enemies or perfect strangers whose business misdeeds came to light when prosecutors looked into the mid-’80s transactions of David Hale and Jim McDougal. The Democrat-Gazette editorial merely repeats the common reference to those years, that Whitewater prosecutors convicted 14 Clinton cronies but they wouldn’t rat on him. Here are the Whitewater convictions: David Hale Jr. — Defrauding the federal Small Business Administration through his lending company. The Clinton administration turned him in to the U.S. attorney in 1993. Hale’s support for Frank White against Clinton in 1980 got him a judgeship from White, and he laundered SBA money into White’s race against Clinton in 1986. Eugene Fitzhugh and Charles D. Matthews — Two misdemeanors each for helping Hale defraud the SBA. They arranged for a Louisiana man to make a short-term loan to Hale, who listed it as a capital asset so that he could qualify illegally for $900,000 in SBA money. Neither the transactions or the men had anything to do with Clinton. Robert W. Palmer — Filing a false real estate appraisal for Madison Guaranty Savings and Loan Corp. No connection to the Clintons. Chris Wade — Bankruptcy fraud and submitting false applications to a financial institution. A real estate broker at Flippin, Wade hid personal assets from the government when he filed for bankruptcy but was found out when he used the assets to acquire a lot in Whitewater Estates from a Texas man. No connection to the Clintons. Neal T. Ainley — Failing to report to the IRS in 1990 that his bank had made two loans exceeding $10,000 to Clinton’s campaign for governor, the only case related to the Clintons. A law designed to detect drug dealers required the reports. It was not established what benefit there was to not reporting the loans because the Clinton campaign reported them to the Arkansas secretary of state. Steve Smith — Misapplying a business loan from Madison Guaranty. Smith had been an aide to Clinton in the 1970s but left the governor’s office in a dispute with the governor in 1980. Larry Kuca — Misapplying a loan from Hale’s company. No connection with Clinton. Webb Hubbell — Embezzling $400,000 from Hillary Clinton and other partners in the Rose Law Firm. He later was a deputy attorney general under Clinton. Jim McDougal — Fraud and conspiracy in the operation of Madison Guaranty and Hale’s loan company. He and his wife had been partners with Clinton in Whitewater Development Co., formed in 1978, and he was briefly an aide to Clinton in his first term as governor. None of the crimes was related to any activity of the Clintons. Susan McDougal — Misusing SBA loan funds from Hale. Hale maintained that Clinton once asked him if he was going to make the loan. Clinton said he never knew about the loan, had no interest in it and never had a conversation about it. Jim Guy Tucker — Defrauding the IRS in a sham bankruptcy when he sold a cable television company in Texas. The IRS and the Justice Department in 2003 agreed that the law Tucker was convicted of violating had been repealed. Tucker, a longtime political foe of Clinton and his successor as governor, was also convicted of fraud and conspiracy with McDougal in loan transactions with Hale, but the transactions had no connection to Clinton. John Haley and William S. Marks Sr. — Misdemeanor counts of submitting false information to the IRS in Tucker’s behalf on the cable TV bankruptcy. The law they helped him violate had been repealed. Again, no connection to Clinton. Now, which is the fairer historical judgment, the museum’s or the editor’s?

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