From the Radio Free Michigan archives ftp://141.209.3.26/pub/patriot If you have any other files you'd like to contribute, e-mail them to bj496@Cleveland.Freenet.Edu. ------------------------------------------------ Why Whitewater may drown Clinton by William Rees-Mogg The Times (London), 5 December 1994 Like the Watergate scandal which forced President Nixon to resign, President Clinton's Whitewater scandal, or group of scandals, has been slow to gather momentum. Now the pace is accelerating. Webster Hubbell, a key witness, is pleading guilty to two felony charges, tax evasion and mail fraud, brought by Kenneth Starr, the Special Prosecutor. He will now be co-operating with the inquiry, and will presumably have to give evidence both to the Senate and House committees. Now that the Republicans control both Houses, those inquiries will be tough. These are only the first of Mr Starr's indictments. He is also expected this month to indict Jim Guy Tucker, President Clinton's successor as Governor of Arkansas, on charges that he had a Whitewater type of land deal of his own. The President's partners in the Whitewater deal, Jim and Susan MacDougal, are also expected to be indicted. A number of other past or present Clinton advisers are under investigation, Bruce Lindsey and Betsey Wright for allegedly settling campaign bills with money through Whitewater, and George Stephanopoulos and Harold Ickes for allegedly lying to Congress during the earlier hearings. Those who remember the Watergate inquiry will recall the same pattern of development, as witnesses were investigated and indicted, and, often reluctantly, started to tell what they knew. Hubbell, widely known as Webb, is a particularly important witness. Apart from Vincent Foster, he probably knows more about more aspects of the Whitewater affair than anyone except the Clintons themselves; Vincent Foster, of course, is dead. Webb was for many years a close friend of the Clintons and Bill Clinton's regular golfing partner. Along with Hillary Clinton and Foster, he was a partner in the Rose law firm, from whose clients he is alleged to have stolen large sums of money by false billing. He was at one time the legal adviser to the failed Madison Guaranty Savings and Loan, MacDougal's bank which helped to finance Whitewater; he was also a central figure in the group of cronies, the ``friends of Bill'', who dominated Arkansas politics in the 1980s. When Bill Clinton became President, he made Hubbell Assistant Attorney-General in effect he became the President's man at the Department of Justice, until he had to resign in March 1994 as the scandal gathered. Webb is a smart lawyer. At the Department of Justice many people thought that he was smarter than his boss, Janet Reno; he was certainly better connected politically. In Arkansas he had worked on drafting legislation. Ironically, he wrote Arkansas' Ethics in Government law in 1988. He also drafted Act 1062, the 1985 Arkansas statute which created the Arkansas Development Finance Agency (ADFA). This agency was established during Bill Clinton's governership, and was entirely controlled by him. He appointed the board and the senior staff. He signed off every loan that was made. It was his funding agency. If there was anything wrong with ADFA it goes straight back to Clinton. The ADFA statute was drafted by Hubbell when the agency was founded in 1985. Its first offices were in Jim MacDougal's Madison Guaranty building; its first loan, for $2.75 million, was to a company called Park-O-Meter. Hubbell was an officer of that company and drafted the application. The company was owned by his brother-in-law, Seth Ward. Clinton signed the loan approval. So ADFA started in a state of ethical confusion or at least of acute cronyism. Earlier this year the New Republic, a liberal magazine with no political bias against the President, published an article by A.J. Davis, who went to Little Rock to examine ADFA's books. He believed that the agency made between 65 and 75 loans between 1985 and 1992. These loans totalled $719 million. The statutory function of ADFA was to make loans to charitable and other bodies to help the poor of Arkansas itself a very poor state. Loans were, in fact, sometimes made to profitable companies connected to ``friends of Bill''. Davis says he asked the staff at ADFA for the documentation of the loans that had been made. They were able, or willing, to produce only 25 files, though a 26th was produced and hastily withdrawn. Some 40 of the files were missing, unavailable or perhaps destroyed. In a separate investigation the Los Angeles Times, a newspaper which is also not hostile to Clinton, claims it discovered that companies which had received loans from ADFA had made campaign contributions of $400,000 to his 1990 re-election campaign as Governor. This pattern of using ADFA to make loans to friends, without keeping adequate documentation, and accepting their contributions to campaign funds, seems to be established by not un-friendly witnesses. A definitely unfriendly witness, Larry Nichols, a former friend of Clinton, was briefly the marketing director of ADFA in 1988. He alleges that loans were made without the least attempt at due diligence and that they were often subject to the payment of fees of $50,000 to the Rose law firm, in which Hillary Clinton was a partner, and another $50,000 to Clinton's campaign funds. He further alleges that ``no one was paying interest on these loans''. His even more serious allegation is that ADFA bonds were extensively used to launder drug money by another ``friend of Bill'', Dan Lasater, who went to prison for cocaine offences and was later pardoned by Clinton. ``Bill Duncan, the former Inland Revenue Service investigator of Mena (the Arkansas airport through which large quantities of illegal drugs were imported in the 1980s) explained how some of the money trails out of Mena led to Lasater... Lasater was indeed using that agency to launder his drug money.'' Nichols should be regarded as a hostile witness, but there is no question of the close relationship between Clinton and Lasater. The ADFA story is only a part of the tangled web of conspiracies which are connected to Whitewater. However, that was Bill Clinton's own funding agency; if it was used improperly he was responsible. He created it, he appointed its officers, he signed the loan approvals, his friends got some of the loans and underwrote most of the bonds, his campaign funds received benefits. The sums involved are very large and they continued to be paid out in 1992 when he was having to finance his presidential campaign. Some of the other Whitewater allegations seem small and stale; the ADFA allegations are big and fresh. Can Clinton survive? The Republicans won the mid-term elections by a landslide. Damaging character allegations against the President, including his uncontrolled sexual habits, are already widely believed in the United States. The Hubbell, Tucker and MacDougal indictments are very damaging. The circumstances of Vincent Foster's death and its aftermath, and the removal of papers from his White House office, are still under investigation. A separate special inquiry is being held into the Administration's relations with Don Tyson, the chicken billionaire. ADFA alone could destroy any President unless the missing documents can be found and are clean. As the momentum builds, it seems unlikely that Clinton can be renominated, let alone re-elected; he is not even certain to reach the end of his term of office unindicted. [This article is a little old, but I only came across it a couple of days ago. It also contains some interesting facts you might not have seen yet.] ------------------------------------------------ (This file was found elsewhere on the Internet and uploaded to the Radio Free Michigan archives by the archive maintainer. All files are ZIP archives for fast download. E-mail bj496@Cleveland.Freenet.Edu)