A Vast Conspiracy (14 page)

4

“I Love This Man”

I
t’s not easy to make this kind of call, Cliff Jackson said.

Jackson was agonizing once again about whether to supply a reporter with another damaging tale about Bill Clinton. But just as he had with the draft stories, the trooper stories, the Paula Jones stories, and his journeys to New Hampshire to campaign against his former Oxford schoolmate, Cliff Jackson said he had suffered through more purported sleepless nights. Then he decided that, well, yes, he would continue his campaign to destroy the president.

“Bill,” Jackson said, “there’s someone on my dock who wants to talk about Whitewater.”

That was how Jackson greeted the
Los Angeles Times
’s Rempel in a telephone call in the fall of 1993. At the time, the two men were in touch almost daily, because Rempel was working on Jackson’s tip about the troopers and Clinton’s sex life. Now Cliff had something else for Rempel. He had Whitewater.

The story—Whitewater—had existed on the periphery of the political world since March 8, 1992, just after the New Hampshire primary, when
The New York Times
’s Jeff Gerth published the first story about it.
CLINTON JOINED S&L OPERATOR IN OZARK REAL ESTATE VENTURE
, the headline read. The
lead to Gerth’s story matched the neutral tone of the headline: “Bill Clinton and his wife were business partners with the owner of a failing savings and loan association that was subject to state regulation early in his tenure as Governor of Arkansas, records show.

“The partnership, a real estate joint venture that was developing land in the Ozarks, involved the Clintons and James B. McDougal, a former Clinton aide turned developer. It started in 1978, and at times money from Mr. McDougal’s savings and loan was used to subsidize it. The corporation continues to this day, but does not appear to be active.” Gerth’s story was as notable for what it didn’t say as for what it did: there was no allegation of illegal conduct on the part of the then governor.

While Gerth was working on his article for the
Times
, the Clintons’ side of the story was presented by an old friend of theirs named Susan Thomases, a New York lawyer who was quoted extensively in the piece. According to James B. Stewart’s book on Whitewater,
Blood Sport
, when, at long last, Gerth’s piece was published, “Thomases was thrilled. She thought it was incomprehensible.”

Thomases had a lot of company in that view. The same phrases would reappear in the continuing coverage of the Whitewater story—“conflicts of interest,” “failed savings and loan,” “subject to state regulation”—yet no one could ever say with precision, much less with the specificity required for a criminal case, what Bill and Hillary Clinton had done wrong. Many of the stories invoked two familiar phrases of this accusatory era, words that had in common both their ubiquity and their meaninglessness: “appearance of impropriety” and “unanswered questions.” Indeed, with an almost comic circularity of reasoning, the very existence of the inquiries about Whitewater was seen as proof that they were justified. The
New York Times
editorial page often spoke this way. “Much as President Clinton might wish,” the editors wrote in a typical passage, “the curious saga of his and his wife’s dealings with the owner of a failed Arkansas savings and loan association just won’t go away. It keeps popping up in Congressional inquiries and newspaper accounts.…” Or on another occasion, the eve of one of the many congressional hearings on Whitewater, the paper intoned: “Mr. Clinton came to Washington promising to end the casual conflicts, favoritism and insider deals of the Reagan-Bush years. The very existence of these hearings attests that he has done little to honor that commitment.”

One thing, however, was clear from the start. The Whitewater development itself, about two hundred acres located in a remote and inaccessible
region of north Arkansas, had been a failure. Bill Clinton had not even been elected governor yet when, on an evening in early 1978, he and Hillary first discussed the purchase of the property with Jim and Susan McDougal, over dinner at a restaurant in Little Rock called the Black-eyed Pea. Later that year, the Clintons began investing in the project, and they eventually sank about $70,000 into the venture, although the precise amount was in dispute. At one point, in a rather pathetic attempt to generate interest in the area, Hillary Clinton paid for a small model house to be built on the property. The idea succeeded only in drawing a horde of photographers to the doorstep of the luckless souls who lived there at the time Clinton became president. Eventually, the homesteaders grew so fed up with serving as backdrops for the endless Whitewater stories that they hung a large banner that said,
GO HOME, IDIOTS!
(To this day, the Clintons have never visited the Whitewater property.)

Still, the story never exactly went away. It received a smattering of attention in the press, and investigators in various bureaucracies of the federal government kept an eye on Whitewater as well. After Clinton was elected, the Whitewater case (if it was a case) remained in the same sort of limbo, the subject of occasional attention in the press but little sustained interest by law enforcement. In the Clinton White House, the Whitewater investigation belonged in the bailiwick of a lawyer named Vincent W. Foster, Jr., a former partner of Hillary Clinton’s in the Rose Law Firm. Foster actually spent most of his first months on the job as deputy White House counsel dealing with inquiries about another so-called scandal—the firing of several workers in the White House travel office in May 1993. Alerted to possible improprieties in the operation of that office, the White House had moved swiftly to replace the career officials who worked there. But the Clinton administration figures who handled the matter, including Foster, blundered. Based on the way the story was covered in the press, it looked as if the Clinton people had mistreated the long-serving incumbents, who had close ties to many White House reporters; worse, it seemed that the Clinton people were trying to replace the travel office with individuals with personal and financial ties to the first family. (Years of investigation of “Travelgate” produced no criminal charges against any Clinton appointees.)

This minor flap turned into a tragedy on July 20, 1993, six months into Clinton’s presidency, when Vince Foster was found dead of a self-inflicted gunshot wound in a park outside Washington. In an apparent suicide note that was found torn in pieces at the bottom of Foster’s briefcase in his
White House office, the lawyer wrote, “I made mistakes from ignorance, inexperience and overwork.… No one in the White House, to my knowledge, violated any law or standard of conduct, including any action in the travel office. There was no intent to benefit any individual or specific group.… The public will never believe the innocence of the Clintons or their loyal staff.…” In the aftermath of the suicide, many reporters decided to take a fresh look at all the subjects that had been within Foster’s jurisdiction, including Whitewater. Still, the problem remained: there wasn’t a witness who could say that the Clintons had done anything illegal in connection with Whitewater.

Then, at last, there was a witness. His name was David Hale, and he was sitting on the dock outside Cliff Jackson’s house.

In the Ozark Mountains of north Arkansas, not far from the Booger Hollow Trading Post and the seven-story-tall statue of Jesus Christ in Eureka Springs, the biggest summertime crowds used to gather at Dogpatch U.S.A., the amusement park based on the Al Capp comic strip. Visitors sipping Kickapoo Joy Juice strolled past the statue of General Jubilation T. Cornpone among actors dressed as Li’l Abner and Daisy Mae. The hillbilly theme even extended to the food signs. “Onbelievublee delishus Fish Vittles Kooked fo’ Sail,” boasted one offering. The park opened in 1968 and at one point drew as many as a million visitors a year, but once Capp stopped drawing the cartoon in 1977, the appeal of Dogpatch waned. In 1993, it went out of business for good.

The closing represented more bad news for David Hale that year. He had helped to found the park, but it represented just one of his many business interests. In some respects, David Hale was the consummate small-state wheeler-dealer who dabbled in politics, law, and finance, the kind of enthusiastic booster who would wind up (as Hale did) as national president of the Jaycees. He was the chief judge on the small claims court of Little Rock and a friend to virtually all of the state’s political establishment. (As the journalist Murray Waas has pointed out, Hale was also a devout Baptist who frequently noted that one of his businesses manufactured church pews.) Hale even ran a bank of sorts, a company called Capital Management Services, which was authorized by the federal Small Business Administration to make loans to disadvantaged and minority borrowers. Among his many obligations, Hale also found time to be a professional thief.

In 1986, Hale’s friends Jim and Susan McDougal came to him with a business proposition. (As it happened, this conversation also took place at Little Rock’s Black-eyed Pea.) As operators of Madison Guaranty Savings & Loan, they wanted Hale’s company to lend $300,000 to Susan McDougal for the husband-and-wife team to use in their various business ventures. Hale did make the loan, and it was never repaid. What happened to the money has always been something of a mystery. Jim McDougal said that $110,000 of it went to the Whitewater investment that he shared with Bill and Hillary Clinton. (Madison went bankrupt in 1989, costing taxpayers more than $49 million, which made it a rather modest failure by the standards of the S&L era.)

It was the story of this $300,000 loan that was at the heart of what David Hale told the
Los Angeles Times
’s Bill Rempel after Cliff Jackson introduced them, and one part of Hale’s tale was especially significant. Hale told the reporter that Bill Clinton had personally asked him to make the loan to Susan McDougal. In that conversation, according to Hale, the then governor said that his name could not appear on any of the loan documents. To the extent that there has ever been an accusation of criminal wrongdoing against Clinton on Whitewater, this was—and is—it. Hale suggested that Clinton urged him to make a loan under false pretenses; according to Hale (though this was never entirely clear), Clinton knew that the money for the McDougals was really going to their shared Whitewater investment, even though Susan was ostensibly borrowing it for her marketing business. It was something less than an earth-shaking crime, and even if Hale’s story was true, Clinton’s actions may not have been a crime at all. But virtually the entire long investigation of Whitewater flows from this single purported conversation between Hale and Clinton in February 1986. (From the beginning, Clinton denied that any such conversation ever took place.)

Though Jackson peddled the trooper story only to Rempel and David Brock, he shared David Hale more widely. In the fall of 1993, Jackson arranged for Hale to talk to
The Washington Post
and
The New York Times
as well as to Rempel, and the stories in all the various outlets dribbled out throughout the fall. “Clinton told reporters last week that he and his wife had done nothing improper,” Rempel and Frantz wrote in one such story. “But such allegations, raising questions of possible conflicts of interest and abuse of office by the then-Governor of Arkansas, continue to be nettlesome.” All of the reports in all the papers contained some version of this
disclaimer. There’s no proof Clinton did anything wrong—but the existence of the inquiries remained a problem.

One thing that wasn’t entirely clear in these stories was David Hale’s motivation in coming forward. Hale had one goal—to see an independent counsel appointed in the case. Throughout the fall of 1993, Hale was being investigated by the United States attorney in Little Rock in connection with a variety of fraud charges, most particularly the theft of $3.4 million from the Small Business Administration—a case that had nothing to do with Clinton. Hale’s lawyer was trying without success to negotiate a plea bargain with the United States attorney in Little Rock that would allow Hale to avoid jail time. (Hale had other problems as well, including investigations of his involvement with a burial insurance fraud and a kickback scheme with suppliers at his own courthouse.) Hale did not succeed in avoiding indictment. The grand jury in Little Rock charged him in the SBA case on September 23. But his hopes of lenient treatment still rested in getting a new, independent prosecutor placed in charge of the case. Hale had been caught stealing thousands of dollars; his tale about Bill Clinton was, he hoped, his ticket to leniency.