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Authors: Ann Coulter
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On paper Ward had purchased the lion’s share of Castle Grande for $1.15 million in October 1985. Madison Financial Corporation, the Madison subsidiary, bought the rest for $600,000. In fact, Ward paid nothing for the land. Madison Guaranty paid the entire purchase price with a risk-free loan to Ward, secured only by the land itself. Madison needed to use Ward as a straw man purchaser because rules governing savings and loan institutions prohibited it from buying the entire property itself. But this is exactly what Madison had done.
This raw transfer of money to Ward in the form of an unsecured loan would be difficult to explain to federal bank examiners. To disguise the true nature of the transaction—Madison using Ward as a straw man purchaser—Madison needed to cook up some phony debt it owed Ward. An option agreement dated May 1, 1986, described the cooked-up debt; the agreement gave Madison Financial an option to buy from Ward 22.5 acres of Castle Grande land—a portion of his total share—for $400,000, a grossly inflated price. Madison Financial paid Ward $35,000 for the option.
Again, the details of the option agreement, titled “Option to Purchase Real Estate,” are not particularly important, beyond the fact that it was used to deceive federal regulators.
The federal examiner who reviewed the May 1, 1986, option agreement has expressly found that the option was used to deceive him when he reviewed Madison’s transactions that year. The examiner, Jim Clark, said that the option agreement was “deceptive on its face,”
10
and “was created in order to conceal” the fact that Madison was the real purchaser.
10
and “was created in order to conceal” the fact that Madison was the real purchaser.
But it was not until Mrs. Clinton’s billing records surfaced in the White House residence on January 4, 1996, that the lawyer who drafted the option agreement was conclusively established. The drafter was none other than Hillary Clinton.
Though Mrs. Clinton drafted the option agreement that incontrovertibly was used to deceive federal regulators, it is possible that she did not have the requisite criminal intent to be guilty of any crime herself. The woman who was named one of the nation’s top one hundred lawyers in 1988 and 1991 by
The National Law Journal
may have simply been hornswoggled by Jim McDougal.
MRS. CLINTON ACTS LIKE A GUILTY PERSONThe National Law Journal
may have simply been hornswoggled by Jim McDougal.
A number of odd events
somewhat undermines the theory that Mrs. Clinton was an unwitting cat’s paw for McDougal’s criminality.
somewhat undermines the theory that Mrs. Clinton was an unwitting cat’s paw for McDougal’s criminality.
First, in 1988, Mrs. Clinton directed the Rose Law Firm to destroy her files on Castle Grande. This was not illegal, but it was unusual, especially because of the irregular banking practices engaged in by this particular client. In another year, Madison’s Castle Grande project would itself be the focus of a criminal investigation against James McDougal. The remaining Rose Law Firm records of Mrs. Clinton’s work on Castle Grande vanished from the firm during Clinton’s 1992 presidential campaign, only to materialize in the White House residence four years later.
Also raising questions about the first lady’s self-portrait as an unwitting dupe are her unequivocal denials that she had performed any work on Castle Grande—until her billing records materialized in January 1996.
Until the billing records surfaced, the RTC had been completely in the dark about Mrs. Clinton’s involvement with Castle Grande. One RTC officer testified in 1995, for example: “We have no evidence that [Mrs. Clinton] worked on Castle Grande.”
11
This is hardly surprising. On May 24, 1995, Mrs. Clinton had given a sworn statement to the RTC saying, “I do not believe I knew anything about any of these real estate parcels and projects”—specifically including Castle Grande.
12
Indeed, Mrs Clinton had stated in two separate federal investigations that she had had absolutely nothing to do with Castle Grande.
11
This is hardly surprising. On May 24, 1995, Mrs. Clinton had given a sworn statement to the RTC saying, “I do not believe I knew anything about any of these real estate parcels and projects”—specifically including Castle Grande.
12
Indeed, Mrs Clinton had stated in two separate federal investigations that she had had absolutely nothing to do with Castle Grande.
It was peculiar that she had been unable to recall her work on Castle Grande. Her billing records revealed that she had been the billing partner for Madison Guaranty generally, and on Castle Grande in particular. She had billed the bulk of her work for Madison Guaranty to Castle Grande.
13
In fact, she had billed more time to Castle Grande than had any other partner at the Rose Law Firm for the period of time leading up to the Castle Grande option.
14
Most significantly, of course, she had drafted the sham option agreement used to defraud the federal regulators in Castle Grande, according to her own billing records.
13
In fact, she had billed more time to Castle Grande than had any other partner at the Rose Law Firm for the period of time leading up to the Castle Grande option.
14
Most significantly, of course, she had drafted the sham option agreement used to defraud the federal regulators in Castle Grande, according to her own billing records.
The FBI tested the billing records for fingerprints in early 1996 and found Mrs. Clinton’s fingerprints on two pages: the page summarizing all her work for Madison, and the page giving a detailed account of her work on Castle Grande exclusively.
After her billing records mysteriously surfaced in the White House—about two years after they had been subpoenaed by congressional investigators—she had some explaining to do.
Mrs. Clinton clarified her earlier denials by saying she had known Castle Grande by another name—“IDC.” This was the Rose Law Firm’s internal billing code for the matter, referring to the company that sold the property to McDougal. Mrs. Clinton said she believed “Castle Grande” referred exclusively to a trailer park called “Castle Grande Estates” that was to be located on “Castle Grande”—or “IDC,” in her lexicon—and she had done no work on the trailer park.
There would be no reason, however, for federal officers to be asking Mrs. Clinton about “Castle Grande Estates,” the trailer park. That was not a part of any fraudulent transactions. By contrast, Castle Grande the development had been the focus of James McDougal’s first trial in 1990, and would soon form the basis of criminal fraud convictions against the McDougals and Arkansas Governor Jim Guy Tucker. Mrs. Clinton’s explanation for previous denials would be on the order of O.J. attempting to revise earlier responses to investigators about a certain “Nicole,” on the grounds that he had understood “Nicole” to refer exclusively to his manicurist, not his murdered wife whom he called “Honey.”
Moreover, if Mrs. Clinton knew Castle Grande only as “IDC,” she was the only person involved in the project who did.
15
Madison’s senior loan officer said, “[I]t was known as Castle Grande by everyone that was involved within thirty days of the purchase.”
16
The development was referred to as Castle Grande in minutes of a board meeting at Madison. A document prepared in 1986 by government officials from the Federal Home Loan Bank Board described the development as the “Castle Grande project.”
17
15
Madison’s senior loan officer said, “[I]t was known as Castle Grande by everyone that was involved within thirty days of the purchase.”
16
The development was referred to as Castle Grande in minutes of a board meeting at Madison. A document prepared in 1986 by government officials from the Federal Home Loan Bank Board described the development as the “Castle Grande project.”
17
Mrs. Clinton would also have been the only person in all of Little Rock who would not have recognized the Castle Grande development as “Castle Grande.” During Jim McDougal’s first trial for fraud involving Castle Grande in 1990, news accounts of the trial referred to the development only as “Castle Grande.”
18
Even if Mrs. Clinton drew no connection between the trailer park “Castle Grande Estates” and the “Castle Grande” it was located on, it is difficult to understand how she could not have known that others called the entire development Castle Grande, including “everyone… involved,” Arkansas newspapers, and government officials.
18
Even if Mrs. Clinton drew no connection between the trailer park “Castle Grande Estates” and the “Castle Grande” it was located on, it is difficult to understand how she could not have known that others called the entire development Castle Grande, including “everyone… involved,” Arkansas newspapers, and government officials.
Despite the evidence of Mrs. Clinton’s own entries in the long-lost billing records, Mrs. Clinton continued to attempt to minimize her role in Castle Grande. Various witnesses, however, directly contradicted the first lady. Mrs. Clinton testified, for example, that it was not she, but lawyer Richard Massey, who was responsible for bringing Madison in as a client to the Rose Law Firm. Testifying before the Senate Whitewater Committee, Massey denied Mrs. Clinton’s effort to thrust Madison Guaranty at him. At the time Mrs. Clinton claims Massey was the rainmaker on the Madison business, he was a first-year associate.
The third piece of evidence establishing either Mrs. Clinton’s criminal intent or her incompetence as a lawyer is the testimony of H. Don Denton, a senior officer at Madison Guaranty. Denton has testified that he specifically warned Mrs. Clinton about the dubious legality of the option agreement she was drafting.
In a deposition taken by the Federal Deposit Insurance Corporation, Denton said Mrs. Clinton had called him to ask for notes when she was drafting the option agreement. Denton testified that at that time he raised the legal problems of such an option agreement with Mrs. Clinton, noting that the notes “constituted in effect a parent entity fulfilling the obligation of a subsidiary.”
19
Mrs. Clinton “summarily dismissed” his concerns, he told investigators. He recalled that she said something to the effect that “he would take care of savings and loan matters, and she would take care of legal matters.”
20
She was, after all, one of the country’s top one hundred lawyers.
19
Mrs. Clinton “summarily dismissed” his concerns, he told investigators. He recalled that she said something to the effect that “he would take care of savings and loan matters, and she would take care of legal matters.”
20
She was, after all, one of the country’s top one hundred lawyers.
As she had once denied performing any work on Castle Grande, Mrs. Clinton denied having any such conversation with Mr. Denton. Perhaps she knew him by a different name.
The White House immediately questioned Mr. Denton’s motives, fingering him as a political enemy of the White House. But, as the
New York Times
has noted (prominently on page B-9), this “was the first time a figure not under threat of indictment or imprisonment ha[d] given such damaging information” against the Clintons. As such, the article observed, it was a “further dent” in the White House incompetence defense portraying Mrs. Clinton as “a mere technical adviser, not an insider in the deal.”
21
THE GOVERNOR’S ALLEGED PARTICIPATION IN DAVID HALE’S CRIMENew York Times
has noted (prominently on page B-9), this “was the first time a figure not under threat of indictment or imprisonment ha[d] given such damaging information” against the Clintons. As such, the article observed, it was a “further dent” in the White House incompetence defense portraying Mrs. Clinton as “a mere technical adviser, not an insider in the deal.”
21
In May 1996
an Arkansas jury returned a series of guilty verdicts against Jim and Susan McDougal and Governor Jim Guy Tucker
,
finding that they had defrauded not only Madison Guaranty but also the federal SBA. The guilty counts involving the SBA found that the three conspired to get a $300,000 loan for Susan McDougal through a small business investment company owned by David Hale. Some of the money from that fraudulent loan ended up in Whitewater accounts.
an Arkansas jury returned a series of guilty verdicts against Jim and Susan McDougal and Governor Jim Guy Tucker
,
finding that they had defrauded not only Madison Guaranty but also the federal SBA. The guilty counts involving the SBA found that the three conspired to get a $300,000 loan for Susan McDougal through a small business investment company owned by David Hale. Some of the money from that fraudulent loan ended up in Whitewater accounts.
The prosecution’s chief witness at trial was former municipal judge David Hale, who had already pleaded guilty to the loan fraud in 1994. Hale accused Mr. Clinton of pressuring him to make the incontrovertibly fraudulent $300,000 federally-backed loan to Susan McDougal in 1985. The loan was made to Mrs. McDougal’s front company, Master Marketing, in order to comply with SBA requirements that borrowers be “socially or economically disadvantaged.”
Hale testified that Clinton asked him to make the loan “for Jim [Guy Tucker] and the governor,” in Hale’s words.
22
McDougal explained to Hale that the loan was necessary to “clean up some members of the political family,” a reference Hale took to mean that the loan was intended to help Mr. Clinton. (Though the White House would later denounce Hale as an enemy of the Clintons, at the time he was active in Democratic politics in Arkansas.) At the meeting in a trailer at Castle Grande, Hale testified, Clinton explicitly warned him, “My name cannot show up in this,” at which point McDougal assured Clinton that he had “already taken care of that.”
23
22
McDougal explained to Hale that the loan was necessary to “clean up some members of the political family,” a reference Hale took to mean that the loan was intended to help Mr. Clinton. (Though the White House would later denounce Hale as an enemy of the Clintons, at the time he was active in Democratic politics in Arkansas.) At the meeting in a trailer at Castle Grande, Hale testified, Clinton explicitly warned him, “My name cannot show up in this,” at which point McDougal assured Clinton that he had “already taken care of that.”
23
Almost $50,000 of the $300,000 loan made to Susan McDougal’s front company found its way to the ailing Whitewater venture.
24
Most of the rest of the fraudulent loan went to pay for Mrs. McDougal’s personal expenses. The loan was never repaid. (Clinton’s interest in the loan to Susan McDougal may have been unrelated to Whitewater. James McDougal suspected that his wife had had an affair with the governor.)
24
Most of the rest of the fraudulent loan went to pay for Mrs. McDougal’s personal expenses. The loan was never repaid. (Clinton’s interest in the loan to Susan McDougal may have been unrelated to Whitewater. James McDougal suspected that his wife had had an affair with the governor.)
Mrs. McDougal served eighteen months in prison rather than tell a grand jury what she knows about the Clintons’ business dealings. When this civil contempt sanction expired she still wouldn’t talk and was indicted for criminal contempt of the grand jury. Mrs. McDougal simply refuses to state under oath whether the president lied in his testimony about the SBA loan. Of course, if she could answer “no,” there would be no reason for her to refuse to answer. If she ever did stop defying the court, one thing the grand jury might want to know is what she meant when she wrote “Payoff Clinton” as a notation on a check.
In videotaped testimony shown at the trial, Clinton denied ever discussing the loan with Hale. At trial James McDougal supported the president’s denial. McDougal attacked Starr’s prosecutors and said he would never cooperate because they were “Republican gangsters” pursuing a “political prosecution.”
One year after his conviction, however, McDougal changed his tune. He said he lied when he testified that Clinton did not pressure Hale to make the fraudulent loan. In an interview with NBC, McDougal said he had been present when the president met with Hale to discuss the loan, just as Hale had described in his testimony. McDougal explained that he had corroborated the president’s denials at trial because “I was trying my best to protect him.”
McDougal admitted that since he had lied at his trial, people would “have every right to be suspicious” and think that he was lying again. But this time, McDougal said, everything he had to say “was very well documented,” and Clinton “should be deeply concerned” about what McDougal was going to say about the meeting.
If David Hale told the truth at trial, and McDougal told the truth after the trial, the president committed perjury in his testimony for the McDougal-Tucker trial. Admittedly both McDougal and Hale are convicted felons, but that’s just the price of having to call Clinton’s friends and associates to testify.
Chapter Fifteen
BOOK: High Crimes and Misdemeanors: The Case Against Bill Clinton
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