The First Term - Arkansas revisited



If the Arkansas model failed Clinton in the health care defeat, it was part of a larger pattern of troubles stemming from his past in Little Rock that soon began imposing itself on his administration. Death, scandal, and charges of lawbreaking struck heavily at the Arkansas friends that he brought east with him.

One afternoon in July 1993, Vincent Foster, Jr., the deputy White House counsel, was found dead in a park across the Potomac River in Virginia, a bullet wound in his head. He had committed suicide, an apparent victim, according to a note found in his briefcase, of depression induced by job pressures and the poisonous political atmosphere of Washington. Foster had been a neighbor of Clinton's in Hope, and a close friend of Hillary's at the Rose Law Firm in Little Rock, where they both worked. Though his death was several times investigated and ruled a suicide, right-wing Clinton critics found enough mystery in the circumstances surrounding the case to shroud it with a lingering afterlife of conspiracy theories.

Other Clinton associates who followed him to Washington fell under the shadow. Webster Hubbell, Jr., general partner in the Rose Law Firm, took a post in the Clinton Justice Department, but left in disgrace after a year to face trial and conviction for double-billing Rose clients. A White House aide and a member of the legal counseling staff were forced to resign for relatively minor ethical lapses. And those old Arkansas associates who stayed at home did not all escape, most notably Clinton's successor as governor, Jim Guy Tucker. Tucker and two former aides from Clinton's gubernatorial years were indicted (and Tucker convicted and forced to quit office) in an investigation that might not have begun had not Clinton become president—an investigation that bore the simple label of "Whitewater."

The name was that of a real estate development scheme along Arkansas' White River, and the original investing partners in 1974 had included Bill and Hillary Clinton. By the time the undertaking went broke it had involved questionable dealings that surfaced during Clinton's first term, provoked reactions from the White House that were denounced as presidential wrongdoing, led to congressional hearings, and finally obliged Clinton to ask for a special prosecutor. Whitewater flowed from Bill Clinton's past into Washington and its churn and roar became the incessant background noise of his time in office. After seven years, many individual state and federal trials, millions of words of court testimony and media polemic, and the expense of millions of dollars by the special prosecutor's office, no basis for indicting either the president or the First Lady was found. Yet the questions persisted: Had the Clintons done anything venal? Or were they persecuted by the exaggerated charges of political enemies who simply hated them?

The two major lines of inquiry were concerned with what happened in Arkansas, and what went on inside the Clinton administration when the story broke and federal regulators zeroed in on the various people and institutions involved. The Clintons were brought into the deal by an old friend, James McDougal, who later ran a savings-and-loan company, regulated by a Clinton appointee at the state level, and represented by the Rose Law Firm. McDougal and his wife, Susan, made most of the payments, though the Clintons were equal partners. The Clintons did lose money when the project went sour in the 1980s, but the unresolved question was whether or not they profited indirectly from the cozy relationship with McDougal, who used his Madison Guaranty Savings and Loan firm as a personal piggy bank until it folded in 1989. Did he divert some of its funds into the Whitewater partnership—and into Clinton's 1984 reelection campaign?

Once Madison Savings and Loan was bankrupt, federal regulators began to examine its connections to the Rose Law Firm. The names of both Clintons appeared in referrals sent up to the Treasury and Justice Departments in Washington. Treasury officials disclosed the contents of the referrals to White House aides. Though the Clintons were not targets of the regulatory probe, the disclosures were improper in that they could lead to an illegal cover-up by presidential command. That was what triggered the call for a special prosecutor.

Each time the issue seemed to be receding, it reappeared and confronted the Clintons with new questions. What role, for example, had Hillary Clinton played as a lawyer for the Rose Firm in dealing with Madison Guaranty? Critical billing records were missing—until, one day in August 1995, they were discovered by a file clerk in the residential portion of the White House. How did they get there? When the story became public, Hillary declared that she had no idea. She was subpoenaed before a federal grand jury—a first for a First Lady.

Whatever the ultimate result of the entire Whitewater probe, it left a stain on the Clinton presidency when combined with other ethical questions that hung over his past. There were his sexual indiscretions, both alleged and acknowledged. There were reports that Hillary, with inside advice from a friend, parlayed $1,000 into $100,000 in the commodities market. There was the discovery in the basement of the White House of FBI files on hundreds of Republicans. There were charges of impropriety in the firing of White House travel coordinators. All these, assiduously boomed into the public ear, left a segment of the public doubting the moral rectitude of these two prominent figures who came of age in the 1960s. And they cast shadows on Bill Clinton's better side, his calls for compassion and common ground in American society.



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