The Special Committee's Whitewater Report

PHASE 3 THE ARKANSAS PHASE

CONTENTS

CONCLUSIONS OF THE SPECIAL COMMITTEE 560

1. Mrs. Clinton's legal work on Castle Grande related to an effort to conceal the true nature of the activities at Madison Guaranty 563
2. Webster Hubbell was significantly more involved in Castle Grande than he admitted in his Senate testimony 568
3. In 1985, Mr. McDougal retained Hillary Clinton to represent Madison Guaranty; the work was not brought in by a young associate 571
4. Mrs. Clinton had a substantive contact with Beverly Bassett Schaffer about Madison Guaranty's proposal to issue preferred stock 574
5. Governor Clinton's official and personal dealings with James McDougal raised an apparent, if not an actual, improper conflict of interest 575
6. The Clintons took an active role in obtaining and extending Whitewater-related loans; they were not "passive" investors in Whitewater 576
7. Governor Clinton's office steered state bond work to Dan Lasater 578
8. The Clintons took a series of erroneous tax deductions related to Whitewater 580

SUMMARY OF THE EVIDENCE 582

PART I: WHITEWATER DEVELOPMENT CORPORATION 582

I. Whitewater: The Early Years 585

A. The Clintons' Previously Undisclosed Land Deal with James McDougal 585
B. Whitewater: A "No Cash" Deal 588
C. Lot 13: Irregularities in Madison Bank's loan to Mrs. Clinton 591

II. The Clintons' Continued Involvement in Whitewater: 1987 - 1992 595

A. The Clintons' Active Involvement in the Management of Whitewater After 1986 595
B. Governor Clinton's Approval of Special Legislation Benefitting his Whitewater Banker 597

III. The Clintons' Handling of Whitewater During the 1992 Presidential Campaign 606

A. The Focus on Whitewater During the 1992 Campaign 606
B. The Lyons Report 609
C. The Clintons Finally Get Out of Whitewater 614

IV. The Clintons' Questionable Tax Treatment of Whitewater: A History of Unreportable Income and Improper Deductions 618

A. 1978: The Clintons' Unreported Income of $5,405 from 15-Acre Installment Sale 619
B. 1979: The Clintons' Improper Interest Deduction of $2,400 621
C. 1980: The Clintons' Improper Interest Deduction of $9,000 623
D. 1980: The Clintons' Unreported Income of $10,000 from Whitewater payment of the $20,000 Union Bank Note 625
E. 1982: The Clintons' Unreported Income of $5,691 for Whitewater Payment of Citizens Bank of Jonesboro Note 628
F. 1984: The Clintons' Improper Deduction of $144 for Real Estate Taxes 630
G. 1984 and 1985: The Clintons' Improper Interest Deductions of $2,811 and $2,322 630
H. 1987: The Clintons' Improper Interest Deduction of $2,561 631
I. 1988: The Clintons' Improper Deduction of $1,275 for Real Estate Taxes 632
J. 1988: The Clintons' Unreported Income of $1,673 from the Sale of Lot 13 633

PART II: GOVERNOR CLINTON'S QUESTIONABLE RELATIONSHIP WITH JAMES MCDOUGAL 634

I. James McDougal's Madison Guaranty: A Corrupt Savings & Loan 634

A. Madison's Fraudulent Land Deals 636
B. Madison's Phony Books and Records 637
C. Federal Regulators Oust Mr. McDougal from Madison 638

II. Governor Clinton Provides Benefits to James McDougal and Madison S&L 641

A. Governor Clinton Steers Valuable State Leases to Madison 642
B. McDougal Holds a Questionable 1985 Fundraiser for Clinton 644
C. Governor Clinton Vetoes Legislation For McDougal Business Partners 651
D. Clinton's Promises to McDougal on Brewery Legislation 656
E. McDougal Asks Governor Clinton to Fire Tough State Regulators 659
F. McDougal Helps Select S&L Regulators 662
G. McDougal Hires Mrs. Clinton and Her Law Firm 664

1. The Questionable Retention of the Rose Law Firm 664
2. Mrs. Clinton Asks the Arkansas S&L Regulator to Approve a Novel Stock Issue 669

III. The Castle Grande Land Deal: A Series of Fraudulent Loans 672

A. Structuring of the Acquisition of the Castle Grande Property to Evade State Regulations 674
B. The Fraudulent Nature of the Castle Grande Purchase 676
C. The September 24, 1985 Letters 682
D. The May 1 Option Disguises the Questionable Payments to Seth Ward 683
E. Mrs. Clinton's Previously Unknown Legal Work for Questionable Castle Grande Transactions 687
F. Webster Hubbell's Mysterious Role in Structuring Questionable Castle Grande Transactions 691

PART III: GOVERNOR CLINTON'S QUESTIONABLE RELATIONSHIP WITH DAN LASATER 697

I. Governor Clinton's Close Personal Relationship With Dan Lasater 697

II. Governor Clinton Provides Favors to Dan Lasater 700

A. Dan Lasater's Special Access to Governor Clinton 700
B. The Governor's Office Steers Valuable State Bond Business to Dan Lasater 702

PART IV: DAVID HALE AND CAPITAL MANAGEMENT SERVICES, INC. 716

I. The Special Committee's Attempts To Obtain Hale Testimony 716

II. Mr. Hale's Testimony in the McDougal Trial: What was Governor Clinton's Role in the Making of the $300,000 Master Marketing Loan? 717

PART V: THE LENDING ACTIVITIES OF PERRY COUNTY BANK IN THE 1990 CLINTON GUBERNATORIAL CAMPAIGN 724


Next Part
Return


Mail to:

drupal statistics