MARCI-I 1:3. 1996 COUNTERPUNCH/1

MARCH 15, 1996 Ken Silverstein & Alexander Cockburn VOL. 3, NO. 6

• IN THIS ISSUE Is Hillary a Crook?

ome time later this year a situation The most thorough survey of the Clin­ The Simple Report on · unique in American history may tons ' dealings undertaken by a journalist Whitewater You've Sarise: the criminal indictment of a - James B. Stewan , in his Bloodsport: president 's wife, Hillary Rodham Clin­ The President and His Adversaries - has Been Waiting for ton. Since 1994 a federal grand jury has elicited precisely this reaction. Discus&­ • The Pinocchio Complex: been sitting in Little Rock, Arkansas, re­ ing Stewart's 500-page book , Maureen the First Lady's problems viewing the Clintons' financial dealings Dowd concluded in her New fork Times with the truth from 1978 through 1992. The episodes column that there was nothing new, no submitted to their scrutiny by inde­ smoking gun . • Dialing for Dollars : pend ent counsel Kenneth Starr include With the details furnished by Stewart. Hillary's phone calls to the Clintons' involvement in the White­ and the 1000-page Pillsbury, Madison , & James McDougal water Development Corp.; HRC's legal Sutro report to the Resolution Trust Cor­ • The Gerth Miasma: representation of James McDougal 's fail­ poration, submitted on December 28, how the Clintons ing Madison Guaranty Savings & Loan; 1995 , it is possible to lay out a simple survived in '92 Madison's possible financing of Clin­ narrative which is devastating to the Clin­ ton's campaigns; HRC's role in illegal tons. In an earlier issue of Counter­ • Vince Foster: did HRC real estate transactions in the Castle Punch we discussed Whitewater in tne drive him to Fort Marcy? Grande development ; the Clintons' context of Bill Clinton's relationship to fraudulent financial statements submit­ the big timber companies . Let us concen­ ted in loan applications in the 1980s; trate now on HRC's performance, which The Clinton Family and, more generally, the politi cal crony­ - aside from the unflattering light it Investment Guide ism and favoritism exercised by the Clin­ sheds on the First Couple - may have a • Borrow Money and don't ton s during their sojourn in the very serious impact on her husband's pay it back governors mansion in Little Rock. chances for re-election. Meanwhile , a separate federal grand • Trade favors for cash jury in Washington, DC is listening to hitewater exposes a pervasive Starr's presentation of other episodes, character trait of the Clintons: including: Travelgate , the removal of Wthe exchange of money for po­ Exporting Poisons Wbitewater documents from Vince Fos­ litical favors . It also exposes a trait that from North to South ters office; and the reappearance of caused an uproar when William Safir e • Al Gore's idea of HRC's billing records involving her work drew attention to itlastyear : namely HR C's a balanced environment on the Castle Grande project while at the untrammeled propensity to tell lies. Rose law firm . Whit ewater began with a frantic ap­ Pending the explosive impact of an peal from the Clintons to their friend Plus: actual indictment , the public view of McDougal for money, when Bill Clinton Whitewater and related matters seems to was running for governor in 1978. • Windows behind bars: derive from the consensus of the press McDougal duly located the Whitewater Microsoft 's prison laborers (outside of committed foes of the Clinton property outside the town of Flippen in • Arms and the Men: administration such as the Wall Street the Ozarks and got the investment off the the American-Turkish .foumal editorial pag e). On this view, ground. Payback for McDougal was not Council's beltway bash Whitewater constitutes a cover-up with­ long postponed . When he was elected out a crime. Hitched to this comfort.able governor three months later , Clinton ap­ • He did what? sentiment is the proposition that what­ pointed McDougal chief financial advi­ The Man from Hope's ever the peccadilloes, they occurred in sor in the new administration. With even veto on product liability the alien subculture of Arkansas , before greater speed the Clintons and the McDou­ the Clintons stepped onto the stage of gals reneged on commitments to make a national history (continued on p. 4) 2/COUNTERPUNCH MARCH 15, 1996

The reality is seen in places like the Bharat Zinc plant in Bhopal, India , the The Poison Trade subject of a rece nt Greenpeace video, "Slow- Motion Bhopal: Toxic Waste Ex- aneuvering for advantage in the Last September, in an historic agree- · ports to lndia ". There , Dutch and Ger- upcoming ca mpaign against ment almost entirely ignored by the US man car batteries , along with zinc ash MBob Dole, some officials in the press, representatives of 84 countries sent by an American firm, Ruby Metals, Clinton Administration have been mur­ gathered at the Basel Convention in Ge- , are melted down and remolded into met­ muring timidly about "corporate respon ­ neva and took a bold step in this dire c- ; al containers and other products sold to sibility". The gap between rhetoric and tion, ratifying an amendment which i Indian consumers . In the process Bharat r~ality here is cruelly illustrated by the gives legal status in the United Nations to I Zinc workers , some of them children, Administration's posture towards toxic a ban on toxic shipments from rich to wade barefoot without masks or gloves waste transfers from rich to poor countries. poor countries. How such a ban will con- 1 through a toxic dump yard, inhaling lead For the past several years, the vast flict with free trade agreements like at 100 times the level tolerated in the majority of the countries in the world West. Tests of soil near the site disclose have been organizing to pass an interna­ severe lead contamination and poisons tional ban on all toxic waste exports to The US stands virtually ' leached into surrounding surface and the rest of the world from the 24 nations alone in believing that ground water. in the Organization for Economic Coop­ As the Nixon crowd used to say, Watch eration and Development. These rich na­ corporations have the what we do, not what we say. In 1994, tions generate 98 percent of the 400 right to dump poisons on President Clinton issued a rousing state­ million tons of toxic waste produced each ment of support for a ban on hazardous year, most of that coming from European the poorest countries. waste exports . Vice Preside nt Al Gore re­ and American corporations that eagerly peated this pledge at a dinner for the ship their hazardous by-products to Af­ CATT remains to be seen . But there is no Global Legislators for a Balanced Envi- rica, Asia, Latin America and the Carib­ doubt about the position of the Clinton ' ronment, a group of parliamentarians bean, thus saving money otherwise spent Administration, which stands virtually from 42 countries which Core himself on treatment and recycling . alone in the world in believing that cor­ helped found and which has long sup­ porations should have unfettered free­ ported a ban . dom to dump their poisons on the poorest But the threat of an actuaJ ban pro­ Editors countries in the world. voked roars of protest from industry and KEN SILVERSTEIN The US is the only OECD country that the Administration duly shifted course. A ALExANDER COCKBURN refuses to be party to the Basel Conven­ May 1994 pap er by the US Chamber of tion, an international body formed to Commerce (which weighed in heavily Co-writers monitor the disposal of hazardous waste. against the ban at last year's Geneva con- EYALPRESS Even so, the Clinton Administration has ' ference) urged that "the US. government JEFFREYST. CLAIR sent representatives to Convention meet­ and affected industries visit with eco- ings in order to lobby against a ban . nomic and trade ministries of affected Production Last year in Geneva was no exception . non-OECD countries" to pressure them TERRYALLEN 'The US spoke only to industry," Marcelo to support free trade in toxins. The State Furtado, a Greenpeace campaigner , says, Departm ent was soon lobbying the Euro­ Counselor "and noticeably annoyed representatives pean Union, India , Malaysia , Indonesia BENSONNENBERG from the other countries, who wondered and other countries. It also blackmailed why a non-party to the Convention was the Basel Convention, swearing that the Design saying so much ." While Ritt Bjerregard, US would never become a party or pay DEBORAH THOMAS Environment Commissioner of the Euro­ dues should a ban be adopted. pean . Union, expressed strong support ' For int ellectual underpinning to this Published twice monthly except determination to dump poisons on poor August, 22 issues a year: for the ban, Rafe Pomerance , US Deputy people the US government can turn to $40 individuals, Assistant Secretary of State , explained $100 institutions, that a ban on toxic trade "would discour­ the No. 2 man at the Treasury Depart• $25 student/low-income age recycling". ment, the wunderkind Larry Summers. CounterPunch. The ludicrous "recycling" argument is In a notorious memo he wrote in his All rights reserved. routinely advanced by the scrap metal previous incarnation as chief economist CounterPunch welcomes all tips, industry, which argues that Third World · at the World Bank, Summers remarked information and suggestions . countries should be given an "opportu­ casually that it was quite sensible to lo­ Please call or write our offices . nity" to import, process and repackage cate toxic operations in the Third World, CounterPunch hazardous waste produced by First because a lower life expectancy in those P.O. Box 18675, World corporations. Pomerance de­ countries kills off the workers before can­ Washingtqn, DC 20036 scribes such freeloading as "environ­ cers caused by the toxins have time to 202/986-3665 (phone/fax) mentally friendly" . kick in. • MARCH 15, 1996 COUNTEll PUN< :1l f,l Bill Gates's Chain Gang Turkey Moot 4, s it tortures prisoners and .ft.bombs Kurds , the Turkish s1111.1: n promoting Windows '95, Microsoft ing use of inmate labo r in Washin1,rton has never lacked for friends in Wnbh­ Imounted one of the most expensive state include telecommunications giant ington . To celebrate the harm oniouti advertising campaigns in American his­ US West and Redwood Outdoors , Inc., ties between the two countries, the tory. Microsoft understandably failed to which produces clothing for Eddie Bauer . American-Turkish Counci l held a mention that at least some of the com­ Washington is a pioneer in the use of tw(Klay conference in Washington pany's new software was packed by prison labor , a true boom industry in the earlier this month , when : partici­ US . ln 1993, the state legis latur e passed prison labor. This news comes to us from pants gathered l:O hear ar.:ndf:rnics , Pa11l Wrigl1t and Dan Pens , two inmat es a bill t.o in crease th e number of prison think tank c~perts and govern111e11t from Washington state who edit. Priso11 labo rers by 300 per year until I.he year officials hold forth . The Turkey 111001 Legal News. It was Wright:who last year 2000. The nextyeart:hest.ate lmilta 56,()()0- certain ly wasn ' t:worth the price of ad­ al erted us to th e use of prison labor by squar(:)-fectfactory near the Monroe prison . mission - $395 - but we haw : her.11 Hep. Jack Mewalf , a fierce crime buster Companies employing prison ers pay studying t:he conference schedu le. wl10sc 1994 campaign telemarketing $4 .90 an hour , the minimum wage in Wash­ . • The "Cha.irrna.n's T.,ect un :", fon­ operations were partly staffed by pris­ ir\,oton,of which somewhe re between $1.80 l:IJTing Secretary of Defense Wil­ on ers. and $2 .80ends up in the prisoners' pocket. liam Perry , was sponsored hy According to people incarcerat ed at. The rest is deducted for the "cost of correc­ Sikorsky Aircraft; a seminar on the Twin River s Correctional Center in tions", a vic1:ims'compensation fund, and "C urrent: Defens e and Ted1nol ­ Monroe, Washington , Microsoft hired a IO pay state and federal t.axes. The compa­ ogy Prioritie s" by Loral Vought Sys­ packaging company, Ex.mark to ship Win­ nies don't offer benefits to the inmat e/ tems; and a foreign affairs panel dows '95. Exmark used prisoners for at workers - though Pens, who has written which discussed "regional secu­ least part of the job and also had inmates ahout the story in Prison Legal News, notes rity issues" by Lockheed Martin . pa ckage tens of thousands of units of that WashifihTtollis one of many states that • The "]:>resid ent's Reception" , to Microsoft Office , another software pro­ offers what he calls the "Three Strikes re­ which Commerce Secreuiry Bon gram, as well as hundr eds of thou sa nds tirement plan" -and pay little or nothing Brown was t.he invited speaker, of Microsoft mice. Other companies mak- for factory and office space. • was paid for by th e FMC cnrp11- rntio11. It. was.FMC whi ch i11 199:i turned to Brown when ;;cvern I Co rn mcr ce Dep artmen 1 1.1nd, -:r­ Unwonted Stiffness in lin gs raised pesky questions 11bn111 the company's plans to drench the upp er reach es of th e Salmon Presidellt's Spine Hivcr wit.h cyanide, part of it.s ivcn his usual hasty capitu lation ln promoting "reform" , APCO and its operations at th e B e a rt.ra c k before the forces of darkness, funders have loudly exclaimed about the Mine . After some pleasant. 1:x­ G.President Clinton caused much role of trial lawyers in opposing the meas­ changes with company ,~xecut.ives, surprise with his promise to veto the ure. Trial lawyers do ind eed make a juicy Brown quickly and illega lly gave produ cts li ability bill I.hat Congress targ et. Just a few weeks ago US District t.hegrec11 lightt.o FIVJC\; progrn111. passed ear lier this month . We dis cuss ed in Judg e John Nangle reduced from $33 • The "Cultural Symposium" was om last issue how the bill - secretly million to $10 million t.hc fees of the sponsored by Fh :ish1111111-Hil­ ,·.raft ed and lobbied for by APCO Associ­ 1tltorneys who sued on behalf of t.hc vic­ lard , which has made millions a1t,s, a belt.way public relations company tims of Pfizer 's Bjork-Shiley I-kart. Valve. flacking for Ankara. Th1: pr11- that represents a host . of Forh .me 500 Nonf: the less, t.hc real c11c111yof t.he Turkey 111111.t:rials t.hc fin11 clis­ fir111s- scc~kst.o pn :ve11t peopl, -, fn,111su­ cnrpora1<: campaign i:;t.he p11blic. APCO t.ribut.c an : 011 fil1·: al the .l11st.i<'.i: i 11/! corp1lfllt .iow; 11111rk1:t:i11g prod11cl.s would prcfor that. p1~nµlcforg1 ~t.about. thf: Depart111c;111.and i11ch1dc, i11 ad­ thnt maim ,rnd kill (11111ch oft.hi-: 11u1.terial heart. valve itself, which was introduced dition t.o tlw pr firm',:; uw11 h.,­ w,: revealed about. APCO was turned into by Pfizer in 1979 and taken off t.h,: 111ar­ gus reports , severa l coh .111111s by 'l'lw Ne/I) l'ork '/ ',:11ies's Tli<'1111as ii frn11t-paw: Slory i1177w New York Times kct in 1986, but. not. before killing 750 Fricd111an . So faithfully d111:s ,.111/V I II rch 19). people . Pfizer fo1111dthe valv1.:had prob­ The veto pledge should 11nt bP-int.er- lems 11ot.long afrer it wt:nt. on the market. Fri,:d ma II n :ci l.e t.hc 11fficin I Ii m, - Turkey is a 111iglit.y b1ilwark 1•n:ted as n sign of populistinfla111111ation hul sought. to keep its dcfocts hidden . It ,:;h11ri11g up NATO's s1111ll11:r11 011 1:he pMt orthe M.-111from Hopt :. The 1:v1:11wmlc t.o I.he Forni and DrngAd111i11i­ flank , ct.i.:.-1.hnt Flcisl1111a11-I I ii­ Assnciat.ion of Trinf Lawyers of America s1.ra1icrn t.o urge t.hc:agc11cy "1101. 10 notify i,:;rlw fnre111ostoppnm,11t of 1.lieproducts t.lw p11blic". By t.he time t.hc FDA onkn:d lard quit<: s1;11sihl y u,:;1:s hi111 as a11 unpaid prpp.iga11dis1 111 li11l,ili1yhill. It is nlso 111w nf the biggest. t.lw co111p11nyt.o halt. sa l1:s, Pfizer had Ankara 's c11us1:. • 1:rn11.rih111nrsIn 1.lie Dc:11101:rnt.ic Party. racked 11p $100 111illioni11 profits . • 4/CoUNTERPUNCH MAHCII I:,. 1•1•11,

(co11t.i11uedfrom p. 1) 10 percent cash payment w a Flippen How Jeff Gerth Saved the Clintons hank, against 90 percent financing of ne of the many salvations for the Clintons back in 1992 was that Jeff CerdL their Whitewater purchase, then got an­ Owho broke the first big story on Whitewater, can't write English. He ca11 other below-market-rate loan from a Lit­ certainly find his way round financial docum ents but he has never master ed the art tle Rock bank, again in exchange for a of explaining succinctly to the general reader what on earth he is talking about 1-1is marker against political favors. prose is thick with verbal litter : "documents obtained "," sources alleging", and t.hc A.JIthese transactions breached Ar­ rest of the leaden equipage of the journalistic flatfoot . kansas law, represented insider dealings In the case of Whitewater these deficits turned out to be a godsend for the beyond the reach of ordinary mortals and Clintons . The Whitewater imbroglio was scarcely a secret in Arkansas . Jackson constituted one more straw on .the caving Stephens had confided that three factors would probably doom Clinton's nm for spine of the Savings and Loan industry. the White House: cocaine, women and Madison Guaranty. · Frank Burge, loan officer at the Citizens By the end of 1991, Gerth was picking at the Whitewater case. As the New York Bank and Trust Co. of Flippen, told Ste­ primary loomed , the Clintons grew increasingly apprehensive . On March 8, 1992 , wart that when he presented the McDou­ Gerth ran his first story. The Clinton crowd greeted it with enormous relief. James gal/ Clinton deal to his board he made the B. Stewart quotes New York lawyer Susan Thomases, who had tried to bamboozle assumption - accepted by all present - Gerth, exulting that Gerth's story was incompr ehensib le. And so it:was. Whin-:walcr that the plan was to have wealthy backers promptly died for the rest of the campaign. • of Clinton buy the lots at highly inflated prices as a clandestine means of funnel­ to buy the Clintons out of the deal. On well the S&L was on the rocks. It was only i 11g money into the governor 's pocket, four separate occasions HRC adamantly because HRC made the call to her that thereby gaining influence. refused, presumably because Whitewater Bassett gave the official thumbs up for .-1 As it turned out, a survey of the White­ was useful as a· tax shelter, under her preferred stock issue. Fortunately for any water property was delayed and then Gov­ generous estimate of what constituted a possible investors , Madison Guaranty ernor Clinton lost the 1980 election. legitimate deduction. was taken over by the feds and McDougal Interest rates soared, killing the housing McDougal bought Madi son Guaranty kicked out. before the offering was made. market. Th e balloon payments on both Savings and Loan in 1981. Four years In 1994 HRC swore in a deposition to sets of loans began to wipe them out. later Governor Bill jogged into McDou­ government investigators at. the RTC gal's office one morning and implored that, (a) she never solicited any work from RC began her notorious trading him to send some act.ion HRC's way. She McDougal , (b) h.id no role in du-, prosp ec­ in the commodities futures mar­ was under pressure at the Hose law firm tive pr efe rred stock matter and (c) did 1101 H ket at the same time as the for not bringing in enough business. attempt to influence Beverly BassdL Whitewater purchase, made her McDougal duly put HRC on a $2,000 per Though her testimony has not. hee11p11h­ $100,000 courtesy of Tyson Foods execu­ month reta iner as adviser to his S&L. By lish ed she prcsu111ably i,;won, tlw ,;a11u, tives a11d looked to Whitewater as a tax the mid-1980s Madison Guaranty was in thing tot.he grand jurors and in her d1:p11- ,:;hdu,r for her ill-gotten gains . ln their poor shape and 1111derpressure from fed­ sition to St.arr. If the i ndcpi:nd, -,nt cn1111,:;cl fi-,dera l incm1w tax rehtrns for the years eral regulators to tighten up and increase persuades tht~ grand jurors that perjury N73, 1979, and 1980, the Clintons de­ its cash reserves. McDougal had run out or obstruct.ion of justice occurred, th, , ducted not merely interest payments on of banks to borrow mon ey from and so preferred stock offering is om: sou n:.: of a their Whitewater mortgages but also prin­ HRC came up with the idea, unprece­ possible: indict.1111;111.of HHC. cipal -$20,000 was the illegal portion of dented in Arkansas, of a preferred stock A similar indict:111entcould ste m fro111 the dedu ction - thus helping offset her issue. Permission was duly obtained for HRC's work on the Castle Grande d,-:al. w,in on the commodities scam. This was this unusual financing from the releva nt. In 1985, McDougal gazed gratefully upon the reason the Clintons refused to release state regulator, Beverly Bassett, a friend Castle Grande as salvation for his belea­ 1fo,ir tax returns for 1978 and 1979 dur­ of the governor's who had, before ad­ guered bank. The: Castle Grande property ing the presidential campaign and be­ vancement. as Arkansas Securities Co111- was a tract of several hundr t>.d acres .. just ynml, until 1994. 111issioner, been a lawyer in Jim Guy south of Little Hock and scheduled for a Tit" morning after Bill Clinton 's de­ Tucker's firm. There she had worked 011 mi.x of industrial development, a shop­ r.,a1 in 1980 , McDougal told Stewart he matter., involving Madison Guaranty, thus pi11g center and mobile l10111cc;.There ;!"I a despe:rate call from HHC, saying, making ew,ryt.hing as cozy as could be . was a problem. Underi,;t:aw law the Madi­ " Yl)lt 11e,:d to send us momT \Ve need it. On e of the Clintons' constant. refrains son subsidiary planning l.o lta11dl,: the rigli1 now ..and w,..,n,..,cd nil you ca11send." from 1992 011IJHs hee11 that in lu,r capac­ property cou Id not. ht, i IS ,-;olteow,wr . I 11 M<'.Dt>11galremarked sourly t:o his wife it:y as partner int.he Rose law firm, HRC tlw scam that appan,ndy l.rnnspin :d, ~11,-,111aft,:r I.he 1·.allthat. they had b,..,en stood 1H arms length from any dealings then, wen, four principals : l\k.Do11;.r;tl.. ,:;111,,-;idizi11g the Cli11to11's:;hare of t:lw i11- wit:h state agcnci(:S. In fact , HRC was do­ .IiIll Cuy 1\ickt :r .. 1-mr.ii 11d Seth Ward .. a II v1:,;111w111for the previous two years. The ing something much more lucrative , Arkansas good old hoy and far.lwr-i11-law pi1llt:r11 ,·.n111.i1111cd. As Whitewater's fi­ namely rcpres.:111.ing corporat.inrn; on to Webb Huhhdl, i11d,argc of ti,.,li1iga­ ''" 11ciaI c, ,ndit.ion dch :riornrnd , McDou­ 11rnt:t,:rs pending before slate reguliHors. t.io11,;hnp 11tHost: lmv. g;d, f1,ari11g that a ba11kn1pt.cy might Having work,~d as a lawyer 011 Madison \Vanl was sci up as a fakt·. par1111,r. 1;1r11ish<.:li11to11's political image, offered C11ara11ty lmsi11es:;, Bas.-;tctt.km ..,w v1,ry Madison gave hi111an i11t1:rc,-;1.-fn;1:s·t.1:i MARCH 15, 1996 COUNTER PUNCH/5 million loan, for which he had no liabil­ pri ce for commercial property near Little ity. The loan was used to buy a share in Third-rate Burglary? Rock and subsequent omission of their the Castle Grande property, thus ena­ ne common reaction to White­ names from the foreclosure suit. At ex­ bling the whole transaction. Ward was Owater is that this is Dogpatch actly the same time Governor Clinton handsomely compensated for his role as time , the small change of political-fi­ was signing what became kno~ as the ghost dancer, getting a 10 percent com­ nancial life in a provincial backwa­ IP bailout. This was the Manufacrurers mission on all the sales from that prop­ ter. Madison 's collapse cost the Investment Sales and Use Tax Credit, en:y - in the end totaling $300,000. In taxpayers $40 million . Next to a de­ which yielded the timber companies in addition, Madison magnanimously paid bacle like Lincoln Savings, which cost Arkansas, including International Pa­ Ward $400,000 for a 22-acre parcel in the the taxpayers $3 billion, this is small per, $400 million in tax breaks. property, twice its mark et value. · change. But 90 percent of the S&Ls By 1987 McDougal was a broken man, Jim Guy Tu cker- lieutenant governor that failed in the 1980s were small financially and psychologically. HRC in Clinton's last gubernatorial term and thrifts like Madison and Madison 's sought and was gladly given power of then governor - has recently been re-in­ collapse was typical of the looting attorney over the Whitewater Corpora­ dicted (the first indictment having been and self-dealing which ultimately tion . But from the events that followed, thrown out by a Clinton-appointed judge ). cost $300 billion to fix. HRC was less competent than McDougal For their role in Cas tle Grande and other The Clintons also exposed them­ to handle such matters . Under her stew­ matters the McDougals are now on trial. selves relentlessly to blackmail. In ardship, Whitewater Development Cor­ HRC has professed comp lete igno­ 1979 , with her husband in his first poration failed to file corporate income rance. "I don't believe I knew anything term, HRC was in the middle of tax records for three consecutive years. about any of these real estate parcels and trades on the commodities markets These returns were evenrually completed projects," she proclaimed in her deposi­ that could and should have triggered and filed by Vince Foster in the spring of tion to the RTC . The RTC and the inde­ a margin call far greater than the 1993. pendent counsel asked Rose for billing Clinton's net worth . In July of 1979, More serious were HRC's dealings records to buttress HRC 's assertions. her trading account was $117,500 with the banks holding the Whitewater Both th e law firm and the White House short. A call would have wiped her mortgage . Despite repeated pleas from claimed they could not be located. Two and her husband out. It would also the McDougals and Citizens Bank in Flip­ days after the statute of limitations ex­ have destroyed both their careers. pen, the Clintons refused to submit per­ pired on the Castle Grande dealings, the Ten years later, naming of the Clin­ sonal financial statements. When finally records were discovered on a table in an tons by International Paper on the forced to comply or face the calling in of office used by HRC to store papers in foreclosure suit would have been the loan, Hillary prepared a fraudulent their private White House rooms . The profoundly embarrassing. In 1979 , document for the bank that greatly over- record s show she billed Madison for 60 Clinton was doing great favors for hours of work on the Castle Grande deal. Tyson Foods , whose vice-president, SUBSCRIPTION INFO Not far from the Castle Grande prop­ James Blair, was guiding HRC to­ erty was a 500-acre par cel owned ):)yIn­ wards her $100,000. And in 1987 Enter/renew subscription here: ternational Pap er, a timber company and Clinton was handing Int ernational the larg estlandowner in Arkansas. It had Paper a tax credit worth many mil­ D One year individual, $40 been high-graded (i.e., the most valuable lions. This was not chump change . • timber taken out) and was scheduled for D One year institution, $100 c-ubdivisions for low-incom e folk and sen­ D One year 011Jdentflow-income.,$25 ior citizens . Int ernational Paper was of­ through within two days, thus remaking D Please send back issue(s) ______($3/issue) fering the property to Whitewat er - still government. well in advance of the Clin­ ccr-0wned by the McDougals and th e Cli n­ ton-Gore administration . The $300 ,000 D I am enclosing a separate sheet rons - for the very attractive price of from the SBA to the Whitewater Develop­ for gift subscriptions $1,000 per acre. Cas ting about for a loan ment Corporation went in part as down Name.______to finance the purchase , McDougal lit payment for the parcel from Interna­ tional Paper , which accepted a note from upon David Hale , a player in Demo cratic Address,______circles in Little Rock, also a municipal Whitewater Development Corporation for the balance. court judge appointed by Clinton and , by City/State/Zip. ______fortunate concatenation of circum• The sale went through in Mar ch 1986. stances, the owner of Capital Manage­ By October 1987 Whitewater Develop­ ment Services, licensed by the Small ment had defaulted on its payments. In­ Busin ess Administration to dispose of ternational Paper filed a foreclosure Payment must accompany order. low-interest loans. lawsuit, naming only the Whitewater De­ Add $10 for foreign subscriptions . In a plea bargain accompanying the velopment Corp. and the McDougals . Make chedcs payable to : CowiterPunch. indi ctment and convi ction for his role in Conspicuously missing from the suit were Rerum to: CowiterPunch. this affair, Hal e has claimed that Gover­ the names of Bill and Hillary Clinton. P.O. Box 18675 nor Clinton twisted his arm to set up a International Paper was doing the Clin­ Washington , DC 20036 SBA loan to \Vhit:ewate r, which ,;ame tons an e11onno11s favor, wit.h a chl°'ap 6/COUNTERPUNCH MARCH 15. 199h

estimated the value of t.he Whitewater investment and the Clintons' net worth. Who Killed Vince Foster? For example, HRC said the Clintons' "I_Tmce Foster most likely killed himself, but HRC certainly helped drive h_imr:o stake in Whitewater was $200,000, when l' it. As deputy White House counsel he had the Whitewater case dumped m his in fact the value of their investment was lap, plus all the other indiscretions of HRC and the Rose law firm. \Vhen Clinton closer to $40,000 . HRC submitted at was about to nominate Webb Hubbell as deputy attorney general, Foster objected least three false financial disclosure docu­ strenuously on the grounds that confirmation hearings would expose HRC. He ments. This is a violation of federal law. had to prepare the corporate tax returns for Whitewater Development Corporation Starr, the independent counsel, has used in the three years when HRC had power of attorney. He handled the ultimate similar violations to get indictments disposition of Whitewater to McDougal in 1993. He had to obey HRC and fire the against other Whitewater players. civil servants in the travel office because the First Lady thoughr , wrongly and verv In the mid-1980s, Citizens Bank in foolishly, that it would create an impression of White House eagerness to root out Flippen was bought by the large Twin inefficienc,1' and waste. Her prime motive here seems to have been her profound Cities Bank of Little Rock. In 1986 the hatred of the press. HRC had already tried to get Foster to demand a new Secret loan managers evaluated the Whitewater Service detail, on the grounds they were indiscreet and she thought that with her ·Development and concluded that the own people in the travel office she would be able to twist the arm of the press corps. balance of the loan far exceeded the value Foster had all relevant business records in his office, including the work sheets of the property. They recommended that HRC had compiled for her Castle Grande operations. He knew about Hubbell's the loan not be renewed. This recommen­ overbilling practices at Rose law - which ultimately sent him to prison - and was dation was over-ruled by the executive aware that the FBI was on to it. It seems the strain simply got too great. officers of the bank . At the time they were Stewart is agnostic on whether Foster and HRC were having an affair. HRC did seeking a favorable ruling from the Clin­ rent a private apartment. in Georgetown after her arrival in Babylon. Meanwhile, ton administration on changes to state Foster prevented his wife from moving to Washington until June , 1993, saying their banking practices . The ruling soon went children had to finish the school year in Little Rock. But by that time his wife Lisa in Twin Cities' favor. Moreover, one of the was eager to join the big-time. She arrived and shortly thereafter he took his final vice-presidents at Twin Cities was Mar­ drive to Fort Marcy. (Final that is, unless you accept the theory - which seems garet Davenport, a close friend of HRC. implausible - that he was murdered by the Mossad in HRC's private apartment On HRC's recommendation, Bill Clinton because he was aboutto expose Israel's role in the shenanigans at the Mena airport . appointed Davenport to the board of the in western Arkansas.) • Arkansas Development and Finance Authority where she steered several large bond issues to her bank . In return, HRC with Watergate are presumably not the the flimsiest of locks. Bill Clinton had a and the Rose law firm were rewarded issue . What they are looking at. is a series magical capacity to come up with politi­ with business from Twin Cities Bank . of unsavory financial transactions and cal funding in a moment of crisis. Even HRC stands exposed to indictment deceptions about HRC's role . It has al­ today the press is forgiving. But now from the grand juries, both for substan­ ways been evident to anyone examining HRC's future and maybe Bill's are in tive crimes and for obstruction of justice . the evolution of the Arkansas Develop­ partial fee to those - the grand jurors of For these grand jurors sitting in Little ment and Finance Authority that there Little Rock-who have known the couple Rock and Washington DC, comparisons were many skeletons in Little Rock under for a long time. •

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