Whitewater Trials and Impeachment of
a President: 1994-99

THE WHITEWATER TRIALS

Defendants: Webster L. Hubbell, James B. McDougal, Susan McDougal, and Jim Guy Tucker
Crimes Charged: McDougals and Tucker: Bank fraud and conspiracy; Susan McDougal: Mail fraud, making false financial statements and entries, civil contempt of court, criminal contempt of court, and obstruction of justice; Hubbell: Tax evasion, mail fraud, and perjury
Chief Defense Lawyers: McDougals: Mark J. Geragos and Bobby McDaniel; Hubbell: John Nields and Charles Owen
Chief Prosecutors: Charles Bakaly, Mark J. Barrett, W. Hickman Ewing, Jr., Robert B. Fiske, Jr., W. Ray Jahn, Julie Myers, and Kenneth W. Starr
Judges: McDougals and Tucker: George Howard, Jr.; Hubbell: James Robertson
Places: Little Rock, Arkansas, and Washington, D.C.
Dates of Trials: McDougals and Tucker (bank fraud and conspiracy trial): March 4-May 29, 1996; Susan McDougal (criminal conspiracy and obstruction of justice trial): March
8—April 13, 1999; Hubbell: December 1994; July 1, 1998; June 30, 1999
Verdicts: McDougals and Tucker: Guilty of bank fraud and conspiracy; Susan McDougal: Guilty of civil contempt, not guilty of obstructing justice, mistrial on criminal contempt; Hubbell: Pleaded guilty 1994, pleaded guilty with plea bargain 1999
Sentences: James McDougal: 3 years imprisonment, $4.2 million restitution, $10,000 fine, 3 years probation; Susan McDougal: For bank fraud and conspiracy, 2 years imprisonment, 3-year probation with 300 hours of community service, $300,000 restitution, $5,000 fine; for contempt of court and obstruction of justice: 18 months imprisonment; Tucker: 4 years imprisonment (suspended because of ill health), 18 months home detention, $25,000 fine, $294,000 restitution and interest; Hubbell: 18 months imprisonment

THE IMPEACHMENT

Defendant: William Jefferson Clinton, President of the United States
Crimes Charged: High crimes and misdemeanors: Perjury and obstruction of justice (i.e., suborning a witness to lie)
Chief Defense Lawyers: Gregory Craig, David Kendall, Cheryl Mills, and Charles Ruff
Chief Prosecutors: Members of the Judiciary Committee of the U.S. House of Representatives: Henry Hyde (R-lllinois), chairman; and Bob Barr (R-Georgia), Ed Bryant (R-Tennessee), Steve Buyer (R-lndiana), Charles Canady (R-Florida), Chris Cannon (R-Utah), Steve Chabot (R-Ohio), George Gekas (R-Pennsylvania), Lindsey Graham (R-South Carolina), Asa Hutchinson (R-Arkansas), Bill McCollum (R-Florida), James Rogan (R-California), and James Sensenbrenner (R-Wisconsin)
Judge: William Rehnquist, chief justice of the Supreme Court
Place: Washington, D.C.
Dates of Trial: January 7-February 12, 1999
Verdict: Not guilty

SIGNIFICANCE: The Whitewater trials and the impeachment and Senate trial of the president pose a number of significant, if perplexing, questions: Can an independent counsel stretch his power as prosecutor to try to bring down a single target? What happens if that target is the president of the United States? Can our criminal justice system work if a witness can ignore the rules? Can criminal contempt be used to further punish a witness who has already served time for civil contempt for the same offense? When does helping someone obtain a lucrative job cross the line to become obstruction of justice? Can a plea bargain end the investigation that raises such questions? The complex history of Whitewater is significant because only two U.S. presidents have ever been impeached. The first was Andrew Johnson, who was tried in 1868 on a charge of conspiring against Congress and the Constitution. He was acquitted by one vote. The second was William Jefferson Clinton. It should be remembered that impeachment is an accusation, not a verdict. The House of Representatives can impeach for conduct unbecoming the office; a simple majority vote is required. The Senate then functions as the trial court. Conviction requires an affirmative vote by two-thirds of the Senate.

In 1978, Arkansas Attorney General Bill Clinton and his wife, Hillary Rodham Clinton, organized the Whitewater Development Corporation with the intention of building vacation homes in the Ozark Mountains of Arkansas. Along with James B. and Susan McDougal, they borrowed $203,000 to buy 220 acres of land. That year, Clinton was elected governor of Arkansas.

Two years later, Bill Clinton lost his reelection bid. James McDougal, who had been Clinton's economic development director, bought a small bank and loaned $30,000 to Hillary Clinton to build a model house on land owned by Whitewater Development. In 1982, Clinton was reelected governor and Mc-Dougal bought a small savings-and-loan association: Madison Guaranty.

Regulators In, McDougal Out

In 1984, federal regulators questioning Madison Guaranty's financial stability and lending practices found insider lending, speculative land deals, and sizable commissions paid to the McDougals and others. That year, the voters returned Clinton to the governor's mansion. And in 1985, to help the governor pay off a $50,000 campaign debt, James McDougal hosted a fund-raiser at Madison Guaranty. He also hired the Rose Law Firm, where Mrs. Clinton was a partner, to do his S&L's legal work.

In 1986 McDougal borrowed $300,000 from a company, owned by former Little Rock judge David Hale, that provided federal money on behalf of the Small Business Administration (SBA). Federal regulators, saying McDougal's practices were improper, had McDougal removed as Madison's president but let him keep the ownership. By 1989, the feds had shut down the S&L. Bailing it out cost American taxpayers $60 million.

In addition, McDougal's mismanagement of a real estate subsidiary of Madison Guaranty brought his indictment on federal fraud charges. He was acquitted in a 1990 trial. Investigations continued, however, and in 1992, when Clinton was running for president, the Federal Resolution Trust Corp. (RTC) told the Justice Department that the Clintons were "potential beneficiaries" of Madison Guaranty's illegal activities.

Suicide, Special Counsel, Hearings

Clinton took office as president of the United States. Over the next two and one-half years:

Clinton's deputy counsel Vincent Foster committed suicide after filing three years of delinquent Whitewater corporate tax returns;

the White House agreed to release Whitewater documents to the Justice Department;

Attorney General Janet Reno appointed Robert B. Fiske, Jr., as special counsel to examine the Clintons' involvement in Whitewater;

Webster L. Hubbell, facing allegations over his activities during his earlier partnership at the Rose Law Firm, resigned abruptly (in March 1994) as Clinton's associate attorney general;

the U.S. Court of Appeals refused to reappoint Fiske, citing a conflict of interest in his appointment by Reno, and Kenneth W. Starr, who had been both a federal appeals court judge and a U.S. solicitor general (in the Reagan and Bush administrations) succeeded him;

Whitewater hearings by House and Senate Banking Committees cleared 29 administration officials of any wrongdoing;

a special Senate Whitewater committee, headed by Republican Alfonse D'Amato, conducted hearings that lasted 11 months without significant results;

Hubbell pleaded guilty (in December 1994) to two felony charges of tax evasion and mail fraud for bilking his law firm and clients out of more than $480,000 (six months later, on June 28, 1995, he was sentenced to 18 months imprisonment); and

a grand jury investigating questionable loans charged James and Susan McDougal (who by then had divorced) and Arkansas Governor Jim Guy Tucker with bank fraud on August 17, 1995.

The following January, Hillary Clinton's billing records from the Rose Law Firm, which RTC investigators had sought for two years, turned up on a table in the White House living quarters. Starr subpoenaed Mrs. Clinton, and she testified before a grand jury on the discovery and content of the records.

A Woman Named Paula

An article in the January 1994 issue of The American Spectator —a conservative magazine backed by a strongly anti-Clinton billionaire, Richard Mellon Scaife—reported that on May 8, 1991, an Arkansas state trooper on duty at the Excelsior Hotel in Little Rock had arranged, at Governor Clinton's request, for him to meet a woman named Paula. The state policeman had escorted her to Clinton's suite. As she was leaving, the trooper said, she told him "she was available to be Clinton's regular girlfriend if he so desired."

The article was brought to the attention of Paula Corbin Jones. She was furious. She had worked at the Governor's Quality Management Conference going on that day at the hotel and (she later said) had naively gone to the governor's suite when state troopers said Clinton wanted to meet her. There the governor, putting his hand on her leg, had tried to kiss her, then exposed himself and asked for oral sex. Rejecting the proposition, she had departed as Clinton said, "You are smart. Let's keep this between ourselves."

The Paula Jones Lawsuit

Reading the magazine piece three years later and resolving to clear her name, Ms. Jones filed a federal civil lawsuit in May 1994. She claimed $700,000 in damages for sexual harassment and said what she really wanted was an apology and an admission by Clinton that he had done what she said he had done.

Clinton's lawyer, Robert Bennett, offered a settlement but no apology. Jones refused it. In December 1994, to delay the suit, Bennett invoked presidential immunity. The U.S. District Court agreed, but the U.S. Court of Appeals ordered the case to proceed. On May 27, 1997, the Supreme Court upheld that opinion, ruling unanimously that a sitting president has no temporary immunity from a civil lawsuit related to an unofficial act.

Hubbell: Allegations and Facts

While the Paula Jones lawsuit was threading its way through the appeals courts in 1995 and 1996, a number of allegations and suspicions began to surface concerning Webster Hubbell, who President Clinton had once described as his closest friend. News reports asserted that the long-missing Rose Law Firm billing records had somehow made their way from Arkansas to the basement of the Hubbell home in Washington before they were found in the White House. Other stories claimed that Clinton friends—among them top administration officials Thomas F. "Mack" McLarty (then White House chief of staff), Erskine Bowles (former White House chief of staff and former SBA chairman), Mickey Kantor (former U.S. Trade Representative), and Washington attorney Vernon Jordan—had tried to get legal business for Hubbell and had helped his family with donations and jobs.

Some reports were more alarming. In 1994, in the nine months between his resignation as number 3 in the Justice Department and his guilty plea, Hubbell had received more than $400,000 in legal retainers and consulting fees. Included were $100,000 from a subsidiary of an Indonesian conglomerate, the Lippo Group, which was controlled by Clinton supporter James Riady; $18,000 from Clinton backer Bernard Rapoport's American Income Life Insurance Company; and an undisclosed amount from Texas oilman and devoted Clinton backer Truman Arnold. Neither Hubbell nor the people paying him could or would disclose what services Hubbell had provided in exchange for these payments. To some, it looked like "hush money" had been paid to keep Hubbell from implicating Clinton or his wife in illegal acts.

One Governor and Two McDougals Convicted

As their trial began on March 4, 1996, Governor Tucker and the Mc-Dougals were charged with scheming to obtain $3 million in illegal loans through David Hale's small-business investment company. Hale himself testified that pressure from then governor Bill Clinton to help the Democratic "political family" in Arkansas had prompted his fraudulent loan of $300,000 to Susan McDougal, and that Clinton had asked him to keep his name out of the deal. On April 28, during four hours of videotaped testimony, Clinton (the sole defense witness other than James McDougal) denied the charge. The Whitewater jury watched the tape on May 9 and heard 33 prosecution witnesses over nine weeks. On the 28th, it found Tucker guilty on one count of conspiracy and one of mail fraud but not guilty on five other counts. James McDougal was found guilty on 18 of 19 counts of fraud and conspiracy; Susan McDougal was found guilty of illegally benefiting from a $300,000 loan.

Susan McDougal Jailed for Contempt

On August 20, 1996, Susan McDougal was sentenced to two years in prison for obtaining the illegal loan. Within two weeks, however, after saying she didn't trust her prosecutors because "they always wanted something on the Clintons," she was jailed for civil contempt of court for refusing to testify before yet another grand jury. For seven months, she languished 23 hours a day in a windowless cell. Then, after the American Civil Liberties Union (ACLU) filed suit alleging that Starr's office was keeping her in barbaric conditions to coerce her testimony, she was moved to a federal detention facility.

Meanwhile, on April 14, 1997, James McDougal was sentenced to three years in prison for his conviction on 18 counts of fraud and conspiracy. While the sentence could have been as many as 84 years, Starr had requested a reduced sentence because McDougal had helped the prosecution by offering information "on a wide range of matters, including matters previously unknown to us," leading to additional witnesses and documents. Starr also told the press that he had given Judge George Howard, Jr., under seal, information that influenced the judge's decision to reduce the sentence. The independent counsel refused to disclose what the evidence was. Less than a year later, McDougal died in prison of a heart attack.

Anonymous Phone Calls

By October 1997, the Paula Jones case was getting funding from the Rutherford Institute, a nonprofit organization dedicated to defending civil liberties. That month, Rutherford received three anonymous phone calls from a woman who said President Clinton might have had an affair with a woman named Monica Lewinsky. The Rutherford lawyers realized that such a person could be a valuable witness for Jones regarding Clinton's character and behavior.

The Linda Tripp tapes

Shortly thereafter, on November 24, attorneys for Paula Jones subpoenaed a Pentagon employee named Linda Tripp, and two weeks later they named Monica Lewinsky as a potential witness and served her with a subpoena. A Pentagon public affairs staffer since April, the 24-year-old Lewinsky had been transferred there from the White House Office of Legislative Affairs (where she had worked since November 1995, following a five-month internship) because her superiors thought she spent too much time around the president. During two years at the Pentagon, Lewinsky and Tripp had become confidants.

On December 15, 1997, Jones's lawyers requested that Clinton "produce documents related to communications between the president and Monica Lewinsky." The following January 12, Linda Tripp presented independent counsel Kenneth Starr—who was continuing his investigation of the Whitewater Development Corporation and Madison Guaranty Savings & Loan—some 17 audiotapes she had recorded during telephone conversations with Monica Lewinsky. The tapes were purported to include Monica's graphic descriptions of her sexual affair with the president, as well as implications that she, the president, and Clinton's friend Vernon Jordan had discussed denying the affair.

Meanwhile, in the Jones case, Lewinsky signed an affidavit on January 7, 1998, saying she "never had a sexual relationship with the president." Over the next two weeks, the FBI supplied Tripp with a hidden microphone to record face-to-face conversations with Lewinsky; Tripp received a "talking points" paper from Lewinsky (presumably to guide her in making fraudulent testimony in the Jones case); Starr obtained Justice Department authority to look into the allegations about Lewinsky; and, in a deposition in the Jones suit, Clinton denied having sexual relations with Lewinsky. None of this information, of course, was made public at the time.

The Astounding News Breaks

On January 21, 1998, the Washington Post reported that Starr had expanded his Whitewater investigation into an examination of whether the president and his friend Vernon Jordan had encouraged Lewinsky to hide from Paula Jones's lawyers the truth about whether she had had an affair with Clinton. Starr's objective, said pundits, was to learn whether the president had conspired to suborn perjury, make false statements, and obstruct justice.

On January 26, Clinton faced the TV cameras. "I want you to listen to me," he said. "I did not have sexual relations with that woman, Miss Lewinsky. I never told anybody to lie, not a single time—never. These allegations are false."

McDougal Indicted Again

In April 1998 Susan McDougal completed her 18-month sentence for civil contempt of court and started to serve her two-year sentence for fraud. And once more she refused to testify before the Starr grand jury. On May 4, 1998, she was indicted on two charges of criminal contempt and one of obstruction of justice.

Hubbell "performed little or no work"

Just before McDougal's indictment, on April 30, Webster Hubbell—out of prison after serving 16 months of his three-year sentence and in home confinement since January 7, 1997—faced a new barrage of fraud and tax evasion charges by Kenneth Starr. In a 10-count indictment of Hubbell; his wife, Suzanna; his lawyer, Charles C. Owen; and his accountant, Michael C. Schaufele, the independent counsel alleged that Hubbell "performed little or no work" for the legal and consulting fees he was paid in 1994 by friends of the president—a time during which Hubbell was being investigated. The indictment also charged that all four defendants attempted "to evade and defeat the payment of back taxes, interest, and penalties amounting to more than $894,000 for 1989-1992, 1994, and 1995.

District Judge James Robertson, dismissing the charges on July 1, observed that Starr had been on "the quintessential fishing expedition." The judge noted that Hubbell had given Starr his financial records under an immunity agreement and Starr had then used those records as evidence against him. He also ruled that Starr had overstepped his authority in going after Hubbell without first obtaining approval from Attorney General Janet Reno. Starr filed an appeal to the U.S. Circuit Court of Appeals for the District of Columbia.

Clinton Admits Relationship

During the first seven months of 1998, President Clinton continually denied having a sexual relationship with Monica Lewinsky. On August 17, during four hours of testimony to Starr's grand jury via closed-circuit TV, the president denied perjuring himself in his deposition to the Jones attorneys. But that evening, he appeared on national television. "I did have a relationship with Miss Lewinsky that was not appropriate," he said. "In fact, it was wrong. It constituted a critical lapse in judgment and a personal failure on my part, for which I am solely and completely responsible."

The Starr Report

On September 9, 1998, Starr's 453-page report was turned over to the House of Representatives. It accused Clinton of "abundant and calculating" lies about his relationship with Lewinsky. The document used explicit language and graphic descriptions from the Tripp-Lewinsky recorded phone conversations to describe sexual escapades in and near the Oval Office. It cited nine instances of oral sex, including one during which Clinton spoke on the telephone with certain congressmen. It revealed that DNA in a semen stain on a blue dress—one that Tripp had advised Lewinsky not to have cleaned—matched Clinton's DNA. It itemized gifts from Lewinsky to Clinton and vice versa, with Clinton's secretary Bettie Currie often the deliverer. It detailed phone calls to Clinton by Vernon Jordan timed closely with chats between him and Lewinsky about job interviews, culminating in Lewinsky taking a job at Revlon in New York and Clinton saying "Thank you very much" when Jordan told him about it. It reported Clinton discussing with Currie her memory of interactions with Lewinsky.

Clinton's lawyers immediately wrote a 78-page rebuttal. "This private mistake does not amount to an impeachable action," they said, adding that the report was "nothing but the details of a private sexual relationship told in graphic details with the intent to embarrass."

The Castle Grande Trailer Park

In November, with the appeal pending on the "fishing expedition" ruling against him, Starr obtained a third indictment against Webster Hubbell. This time, citing 15 counts of fraud and perjury, Starr alleged that the lawyer had lied to Congress and to federal banking regulators about a complex real estate deal called Castle Grande and the role he and Mrs. Clinton had played in it. According to the indictment, Hubbell helped the Rose Law Firm obtain profitable legal work from the federal government. It also alleged that he helped conceal from regulators the fact that Castle Grande—an industrial and trailer park development built on 1,100 acres near Little Rock—was created from illegal sales of land and phony loans aimed at enriching the insiders at Madison Guaranty. According to the indictment, Hubbell committed perjury in telling regulators that he had not worked on Castle Grande business and in testifying before a hearing of the House Banking Committee on August 10, 1995, that he didn't know what work the Rose Law Firm did for Madison Guaranty. Said Hubbell to reporters, "I do not know of any wrongdoing on behalf of the First Lady and President, and nothing the independent counsel can do to me is going to make me lie about them."

Jones Settlement

On November 13, 1998, the Clinton legal team reached a settlement with Paula Corbin Jones: the president would pay her $850,000 but would not admit wrongdoing or apologize. Clinton made the payment on January 13, 1999, taking $375,000 out of his and Hillary Rodham Clinton's blind trust, and $475,000 from a personal liability insurance policy. Jones then had to deal with paying her attorneys. Her current law firm held an agreement for at least one-third of the case's proceeds, while a former firm had an $800,000 lien on the case. And the Rutherford Institute was entitled to $400,000 to repay expenses.

Meanwhile, in December 1998, the House Judiciary Committee, led by its chairman, Henry Hyde, went to work. Its task: to determine whether to recommend, to the full House of Representatives, the impeachment of the president of the United States. For seven days, the 37 members of the committee debated and wrangled, with television networks transmitting every histrionic word to every corner of the earth.

Articles of Impeachment Approved

Finally, on December 11 and 12, 1998, the committee approved four articles of impeachment. In brief, they stated:

Article I. Clinton lied to the Starr grand jury on August 17, 1998, concerning his relationship with Lewinsky, his earlier testimony in the Jones suit, false statements he permitted his lawyer to make during the Jones case, and his "corrupt efforts" to influence Lewinsky's testimony.

Article II. Clinton committed perjury in his Jones-case deposition in denying having had sexual relations with Lewinsky.

Article III. Clinton committed obstruction of justice in both the Jones case and the Starr probe, by encouraging Lewinsky to give false testimony and hide gifts that Jones's lawyers had subpoenaed, by permitting his lawyer to introduce Lewinsky's false affidavit during his deposition, and by trying to lead his secretary, Bettie Currie, to give false testimony.

Article IV. Clinton abused the power of his high office by "frivolously and corruptly" asserting executive privilege.

On Saturday, December 19, Chairman Hyde delivered the articles of impeachment to the U.S. House of Representatives. The House voted, mostly along party lines, to approve the first two articles, but Articles III and IV were rejected. For only the second time in American history, a president had been impeached. Speaking on the White House lawn and surrounded by loyal Democrats, Clinton vowed to stay in office.

The Senate Trial Begins

The world watched on television as Henry Hyde and the 12 other House "managers" of the prosecution opened the trial in the Senate chamber on Thursday, January 7, 1999. U.S. Chief Justice William Rehnquist, attired in a judge's robe of his own design that observers likened to a Gilbert-and-Sullivan operetta costume, presided. Hyde read the two articles of impeachment.

The managers set out to prove a web of deceit woven by the president. After presentations by Hyde and others, Representative Asa Hutchinson detailed how phone calls between Clinton, Lewinsky, and Jordan "became a frenzied and concerted effort to keep the holes plugged in the dike" of obstruction of justice.

The next day, Representative Bill McCollum urged the Senate to call witnesses, including Monica Lewinsky. Senate Democrats argued that the evidence brought in by the House could stand as the official record, without other witnesses. Meanwhile, the major TV networks, which had carried the first day's session, reverted to soap operas and talk shows, and the Senate gallery, jampacked the day before, found one-quarter of its seats empty.

On Saturday, January 9, Representative Steve Buyer reminded the Senate that, in 1997, 182 Americans were convicted of perjury and 144 were convicted of obstruction of justice. "Where is the fairness for these Americans," he asked, "if they stay in jail and the president stays in the Oval Office?"

Representative Lindsey Graham, striding back and forth on the Senate floor as he spoke without notes, asked whether it was worth it to risk political chaos over lies about sex. "If we can do nothing else for this country," he said, "let's say this behavior is unacceptable. Remove him."

The Clinton Defense

White House Council Charles Ruff opened for the defense on Tuesday, January 19. "We are not here to defend William Clinton the man," he said. "He, like all of us, will find his judges elsewhere. We are here to defend William Clinton, the president of the United States, for whom you are the only judges." Ruff said that in their "rush to judgement" the managers had become "convinced by their own rhetoric."

White House Counsel Gregory Craig noted that the managers had made "many, many allegations of grand jury perjury that the independent counsel declined to make."

Then Deputy Counsel Cheryl Mills argued that the obstruction-of-justice charge was invalid. "The president's intent," she said, "was to manage a looming media firestorm, which he correctly foresaw." Turning to the allegation that Bettie Currie, the president's secretary, had furtively retrieved gifts that Lewinsky had received from Clinton, attorney Mills observed that "it is an insult to Ms. Currie to suggest that loyalty breeds dishonesty."

Clinton's longtime friend, former senator Dale Bumpers, in a speech charged with emotion, closed the defense by entreating the senators to consider how much personal anguish Clinton's "terrible moral lapse" had caused him. "The American people," he concluded, "are asking for an end to this nightmare."

Starr Wins Appeal in Hubbell Case

January 26, 1999, brought the news that the circuit court of appeals, ruling 2-1, had reinstated the tax evasion case against Hubbell. Starr's theory that he could bring charges based on evidence that the huge payments to Hubbell were hush money, said the court, was sound enough to justify the indictment. But it added that Starr would have to show "reasonable particular knowledge" of Hubbell's financial records before he could subpoena them for any new trial.

Three Witnesses Deposed

On Capitol Hill, after two more days and 16 hours of questions from both Republicans and Democrats, the Senate closed its doors to the public and went into debate. Meanwhile, the House managers interviewed Monica Lewinsky for two hours but, according to her lawyer, learned nothing that was not already on the record. On Wednesday, January 27, after considering 15 potential witnesses and deciding not to risk the political consequences of lengthening so unpopular a trial, the managers said they would call for depositions from only three: Lewinsky, Vernon Jordan, and White House aide Sidney Blumenthal, to whom the president had first denied having the affair with Lewinsky.

On Monday, February 1, Monica Lewinsky was interviewed for six hours by three Democratic and three Republican senators. Lewinsky reiterated her testimony that, while she and the president had discussed cover stories in the Jones case, he had not asked her to lie.

A three-hour interrogation of Vernon Jordan garnered only his insistence that his effort to help find Lewinsky a job was not an attempt to buy her silence. Blumenthal told the senators that he now realized the president had lied in telling him Lewinsky had stalked him and demanded sex and that he had rebuffed her.

Clips of the videotaped testimonies were shown to the Senate on Friday, February 5, with full transcripts.

Closing arguments on both sides reiterated the evidence. The prosecutors urged the senators to put their political courage up front and "let justice roll down" on Clinton. Defense attorneys reminded them that they were participants in a case of partisan politics and retribution.

Clinton Acquitted

The vote on impeachment came on Friday, February 12, 1999. With a twothirds majority of 100 senators needed to convict, they voted 45 guilty and 55 not guilty on the article of perjury—not even a simple majority—with 10 Republicans voting across the aisle for acquittal. On the charge of obstruction of justice, 5 Republicans joined the Democrats to make an even 50-50 split. Then, immediately following the impeachment vote, a Democratic-sponsored motion for censure was blocked. President William Jefferson Clinton was free of all charges.

Another McDougal Trial

As her latest trial began on March 9, 1999, Susan McDougal's attorney Mark Geragos told jurors that independent counsel Starr's prosecutors had told her she could avoid jail by providing damaging information about the Clintons, saying, "You know who we want. You know what we want."

Tracing bank records, FBI agent Mike Patkus told jurors that a 1982 loan of $27,600 to Clinton was reimbursed partly through the $300,000 loan Susan McDougal obtained via the SBA and partly by Whitewater Development real estate salesman Chris Wade with borrowings from Madison Guaranty. Wade was then reimbursed with a Whitewater check, which was covered by money from a bank loan to the McDougals, and the McDougals then paid off the bank by using money from the $300,000 loan to Susan McDougal. The trial jury viewed a grand jury videotape of testimony by Hillary Clinton, declaring that she "never spent any significant time at all" supervising records of the Whitewater land deal and was not aware of the $27,600 loan to her husband.

McDougal continued to contend that the independent counsel just wanted evidence against the president, and that her refusal to testify had been because of her fear that Starr would indict her for perjury if she did not tell the story he wanted. On March 24, she took the witness stand in her own defense and testified that she "did not hear anything untruthful" in President Clinton's videotaped testimony at her 1996 trial and knew of no illegal actions by him. She also said she began to mistrust Starr after he tried to make dubious bargains with witnesses. Her ex-husband, she testified, had urged her to say she had had a sexual affair with Clinton so that Starr could use that information against the president before the 1996 election.

On April 12, the jury acquitted Susan McDougal of obstructing justice. On the two charges of criminal contempt, they were deadlocked. Judge George Howard, Jr. declared a mistrial.

The Denouement: A Plea Bargain

The Castle Grande real estate deal made the headlines again on June 30, 1999, when Webster Hubbell as part of a plea bargain pleaded guilty to felony charges under the first of a 15-count indictment. The plea bargain dismissed the other 14 charges. It also kept Hubbell from returning to jail and, as part of the deal, Starr agreed not to press criminal charges against Hubbell's wife, his accountant, or his lawyer. In addition, by pleading guilty and eliminating the expected trial, saved Hubbell substantial legal fees. And there was still another benefit: the indictment on Castle Grande had included more than 30 references to Hillary Clinton, implying the possibility that she had been as much involved in illegal activities as Hubbell himself. Starr had her on his witness list, with the trial scheduled for August 9—just when she would have been on her "listening tour" of New York State in anticipation of running for a Senate seat. Altogether, observed commentators, the Hubbell plea bargain amounted to surrender by Ken Starr because it signaled that he feared defeat in another Whitewater trial.

—Bernard Ryan, Jr.

Suggestions for Further Reading

Bennett, William J. The Death of Outrage: Bill Clinton and the Assault on American Ideals. New York: Simon & Schuster, 1999.

Beschloss, Michael R. and Bill Clinton. The Impeachment and Trial of President Clinton: The Official Transcripts, from the House Judiciary Committee Hearings to the Senate Trial. New York: Random House, 1999.

Cohen, Daniel. The Impeachment of William Jefferson Clinton. Brookfield, Conn.: Twenty-First Century Mediacorp, 2000.

Conason, Joe and Gene Lyons. The Hunting of the President: The Ten-Year Campaign to Destroy Bill and Hillary Clinton. New York: St. Martin's, 2000.

Coulter, Ann H. High Crimes and Misdemeanors: The Case against BUI Clinton. Washington, D.C.: Regnery, 1999.

Evans-Pritchard, Ambrose. The Secret Life of Bill Clinton. Washington, D.C.: Regnery, 1997.

Finkelman, Paul. Impeachable Offenses: A Documentary History from 1787 to the Present. Washington, D.C.: Congressional Quarterly, Inc., 1999.

Ginsberg, Benjamin and Martin Sheffer. Politics by Other Means: Politicians, Prosecutors, and the Press from Watergate to Whitewater. New York: Norton, 1999.

Gross, Martin Louis. The Great Whitewater Fiasco: An American Tale of Money, Power, and Politics. New York: Ballantine, 1994.

Lyons, Gene. Fools for Scandal: How the Media Invented Whitewater. New York: Harper's Magazine Foundation, 1996.

McDougal, Jim and Curtis Wilkie. Arkansas Mischief. The Birth of a National Scandal. New York: Henry Holt, 1998.

Meyer, Wayne, ed. Clinton on Clinton: A Portrait of the President in His Own Words. New York: Avon, 1999.

Morris, Roger. Partners in Power: The Clintons and Their America. New York: Henry Holt, 1999.

Roberts, Robert N. and Marion T. Doss. From Watergate to Whitewater: The Public Integrity War. Westport, Conn.: Greenwood, 1997.

Sheehy, Gail. Hillary's Choice. New York: Random House, 1999.

Starr, Kenneth, Monica Lewinsky, and the United States Court of Appeals. The Starr Evidence: The Complete Text of the Grand Jury Testimony of President Clinton and Monica Lewinsky. New York: HarperCollins, 1998.

Stephanopoulos, George. All Too Human: A Political Education. New York: Little, Brown, 1999.

Stewart, James Brewer. Blood Sport: The President and His Adversaries. New York: Simon & Schuster, 1997.

Toobin, Jeffrey. A Vast Conspiracy: The Real Story of the Sex Scandal That Nearly Brought Down a President. New York: Random House, 2000.

WHITEWATER

Whitewater is the name given to the scandal involving President bill clinton, First Lady hillary rodham clinton, members of the Clinton administration, and private individuals and public officials in Arkansas. Though the alleged wrongdoing took place before Clinton was elected president in 1992, investigations by an independent counsel continued into Clinton's second term of office. As with President richard m. nixon's watergate scandal, the focus of the independent counsel's investigation shifted from the underlying event to the question of whether the president and members of his administration participated in a cover up. The role of Hillary Clinton in these events also became a target of investigators. As in Watergate, the Whitewater scandal quickly became politicized. Democrats accused Republicans in Congress as well as the Republican independent counsel of conducting a political witch hunt.

Whitewater is the name of a failed resort development on the White River in the Ozark Mountain region of Arkansas. In 1978 Bill Clinton, then Arkansas attorney general, and Hillary Clinton joined a partnership with James and Susan McDougal to form Whitewater Development Corporation, a real estate development firm that built vacation homes near the White River. When Clinton was elected governor that year, he appointed James McDougal his top aide.

In 1980 Clinton lost his re-election race. McDougal bought the Madison Bank and Trust in 1980 and in 1982 purchased a small savings and loan company and renamed it Madison Guaranty. In 1982 Clinton was again elected governor.

By 1984 Madison Guaranty Savings and Loan was in financial trouble, with federal regulators questioning its lending practices and its financial stability. Under Arkansas law, the state's securities commission could have closed Madison Guaranty. However, in January 1985, Clinton appointed Beverly B. Schaffer to head the commission. She approved two stock sale plans to raise money to keep Madison Guaranty solvent. Madison had retained the Rose Law Firm of Little Rock to help it secure approval of its stock sale applications. Hillary Clinton, the wife of the governor, worked as an attorney at Rose and was also a partner of McDougal in the Whitewater development. In addition, McDougal held a fund-raising event for governor Clinton in 1985 to help pay off a Clinton campaign debt. Investigators later determined some of the money was improperly withdrawn from depositor funds.

Despite the stock sales, the bank failed to raise enough capital, and by 1986, the Resolution Trust Corporation (RTC), the federal agency responsible for handling savings and loan failures, took over the bankrupt thrift. McDougal was charged with bank fraud. Four years later, McDougal was acquitted of the charge, based on an insanity defense. Meanwhile, the Whitewater development proved a financial disappointment, providing the Clintons with losses rather than profits. The Clintons sold their interest in the Whitewater corporation before Bill Clinton was sworn in as president in 1993.

The Whitewater scandal is grounded in these events of the 1970s and 1980s. It appeared that McDougal had been helped by his business partner Hillary Clinton, the wife of the governor. She had appointed the securities commissioner who allowed the failing thrift institution to stay open. By the time Bill Clinton was running for president in 1992, the national news media was investigating whether favors had been granted and conflicts of interest had been overlooked in apparent disregard for Arkansas state law.

The news media and members of Congress pursued Whitewater during the first months of Clinton's presidency. The July 1993 suicide of Deputy White House Counsel Vincent Foster heightened interest in Whitewater, as Foster had several links to it. Foster had worked at the Rose Law Firm with Hillary Clinton, had handled the sale of the Clintons' interest in Whitewater, and had talked to an attorney who had previously prepared a report for the Clintons on the investment just hours before his suicide. Finally, after Foster's death, White House staff removed Whitewater files from Foster's office. Critics suspected that the removal of files was part of a White House cover up, while others speculated that Foster had been murdered to prevent the disclosure of damaging information.

In October 1993, the RTC asked the justice department to investigate whether Madison's funds had been illegally siphoned into the Whitewater corporation and whether Madison illegally gave money in 1985 to pay off Clinton's campaign debt. Though President Clinton steadfastly denied any wrongdoing by himself or the first lady, Attorney General janet reno came under intense pressure to appoint an independent counsel. She at first refused, noting that the independent counsel law had expired in 1992 (5 U.S.C.A. § 1211). Any counsel appointed by her would appear to be politically tainted.

Nevertheless, in January 1994, Reno appointed Robert B. Fiske Jr., a former U.S. attorney and Wall Street lawyer, special prosecutor to investigate the Clintons' involvement in Whitewater and any potential links between Foster's suicide and his intimate knowledge of the Whitewater scandal.

Fiske surprised the Clinton administration in March 1994 by serving subpoenas on White House and treasury department officials. The investigation had shifted from one solely concerned with past deeds in Arkansas, to one that included current official behavior. Fiske discovered that senior Treasury Department officials, who oversee the work of the RTC, had discussed the Madison Guaranty probe with White House counsel Bernard Nussbaum and other aides. This appeared improper, as it is highly unusual for regulatory agencies to discuss their probes with the parties they are investigating. As a result, the Treasury Department officials resigned.

Despite this embarrassment, the Clinton administration was pleased with Fiske's first report, issued in June 1994. He concluded that Foster's suicide had nothing to do with Whitewater and that the Treasury Department and White House meetings were not illegal. Fiske's report recommended that no criminal charges be filed and generally supported the administration's position on Whitewater.

During the summer of 1995, Senate and House committees held hearings on Whitewater. The hearings were mostly concerned with the propriety of the Treasury-White House meetings. The committee reports that followed cleared administration officials of any wrongdoing.

The course of the special counsel's investigation changed dramatically in August 1994. In July Congress had enacted the Independent Counsel Act (28 U.S.C.A. §§ 591-599), which meant that a three-judge panel of the U.S. court of appeals had to appoint an independent counsel for Whitewater. Attorney General Reno sought to have Fiske appointed, but the three-judge panel refused, citing a possible conflict of interest because he had been appointed by Reno, a member of the Clinton administration. Instead, the panel appointed kenneth w. starr, a george h.w. bush administration solicitor general, a former federal appeals court judge, and a conservative Republican. Starr reopened all aspects of the investigation and reissued a subpoena for the Rose law firm billing records of Hillary Clinton. The first lady informed Starr that the records could not be located. In April 1995, Starr interviewed the Clintons privately.

In January 1996 Hillary Clinton's billing records were found on a table in the White House residence book room after two years of searching. An aide claimed she had found them in August 1995 but did not realize their significance until coming across them again. The discovery of the records was met with skepticism, with Starr subpoenaing Hillary Clinton in a criminal probe to determine if the records were intentionally withheld. The first lady testified before a grand jury about the billing records.

Meanwhile, a Senate Special Whitewater Committee, chaired by New York Senator Alfonse D'Amato, conducted hearings in the last half of 1995, examining Whitewater and Foster's suicide, and the actions of White House staff. In June 1996, the committee divided along party lines in making its final report. Republican senators concluded that White House officials abused their power by trying to monitor and derail investigations of the Clintons and that Hillary Clinton may have obstructed justice by concealing the Rose law firm billing records. Democratic senators dissented, finding no evidence to support the Republican allegations.

In 1996 President Clinton testified on videotape in two Arkansas criminal trials brought by Starr's prosecution team that concerned bank fraud. In the first trial James and Susan McDougal and Arkansas governor Jim Guy Tucker were convicted of fraud and conspiracy in connection with questionable loans made through Madison Guaranty. In the second case bankers Herby Branscom Jr. and Robert Hill were acquitted of illegally using bank funds to reimburse themselves for political contributions, including contributions to Clinton's gubernatorial and presidential campaigns.

Starr continued to investigate Hillary Clinton's role in the Rose law firm's work for Madison Guaranty and the missing billing records. She had stated several times she had done little work on Madison, but at least one associate in the firm disputed her accounts. In 1997 Starr subpoenaed the notes of government attorneys who had met with the first lady prior to her grand jury testimony. The White House refused to comply with the subpoena, arguing that disclosure would violate the confidentiality of the attorney-client relationship. Starr took the matter to court and won court approval to enforce the subpoena from the Eighth Circuit Court of Appeals. In re Grand Jury Subpoenas Duces Tecum, 78 F.3d 1307 (1996). The appeals court agreed with Starr, ruling that the government attorneys were not the first lady's private counsel, but rather administration officials. Therefore, there was no attorney-client relationship and the notes were ordered surrendered. When the Supreme Court refused to hear an appeal from the Clinton Administration on this issue, the notes were given to Starr.

In 1997 Democrats and the Clinton administration escalated their criticisms of Starr and his investigation, arguing that Starr's conservative Republican affiliation had tainted the objectivity of the probe. Starr's credibility was hurt by his announcement in February 1997 that he would leave his position to become dean of the Pepperdine College law school and the head of a new public policy school. The new school was funded by a conservative Republican with ties to persons who had asserted a White House conspiracy concerning the death of Foster and subsequent events. Starr, who was criticized for leaving an unfinished investigation, reversed his decision, announcing he would not take the Pepperdine positions until the probe was concluded. Even Senator D'Amato was critical of this reversal, concluding that Starr's indecision about staying hurt his credibility. In June, news reports circulated claiming Starr's team had been questioning Arkansas state troopers about whether President Clinton had engaged in extramarital affairs while governor. Questions arose as to whether the original investigation had gotten too far off track. That same month, the general accounting office reported that as of March 1997 Starr had spent more than $25 million on his investigations. The only major event in Whitewater for the rest of 1997 was a ruling from Starr's office in July that Vincent Foster's death was definitely a suicide. The Whitewater investigation continued, but with no new revelations public interest declined.

Public interest in scandal and the Clintons was revived in 1998, but not the way anyone had planned. Pentagon employee Linda Tripp approached Starr with allegations that President Clinton had had an affair with White House intern Monica Lewinsky. Tripp also alleged that Clinton had told Lewinsky to deny the affair if she was questioned by lawyers for Paula Jones as part of her pending lawsuit against Clinton. Tripp produced audiotapes of her secretly recorded conversations with Lewinsky, which corroborated her story.

Starr received permission to expand the scope of his investigation, to determine whether Clinton had in fact asked Lewinsky to lie under oath. The Lewinsky scandal made headlines for much of 1998, culminating with the president's impeachment trial in the late fall.

Starr had not forgotten Whitewater, however. In February 1998, both James McDougal and former Arkansas governor Jim Guy Tucker agreed to cooperate with the Whitewater investigation. McDougal's cooperation was particularly welcome, but he died in March 1998.

On April 23, 1998, prosecutors called Susan McDougal before a grand jury. Two years earlier, in September 1996, after her conviction for fraud, she was granted immunity from additional charges in return for her testimony against President Clinton. She refused to cooperate, claiming that she did not trust Starr and his investigators. U.S. District Court Judge susan webber wright held McDougal in civil contempt and sentenced her to 18 months in prison. At her April 1998 appearance, she once again refused to answer questions. She said that she was convinced the Starr investigators were determined to convict President Clinton at any cost, and she added that she would only answer questions before the grand jury if Starr and his team resigned and were replaced with what she felt was truly independent counsel. On May 4, 1998, Starr indicted McDougal for criminal contempt and obstruction of justice. The case was tried in a U.S. District Court in Little Rock.

At trial, McDougal testified that Starr and his prosecutors had tried to pressure her into lying about having an affair with President Clinton. She claimed that she was threatened with an embezzlement charge and a possible income tax investigation unless she agreed to cooperate. After months of testimony, the federal grand jury acquitted McDougal on the contempt charge and deadlocked on two counts of obstruction of justice. The judge, George Howard Jr., declared a mistrial on the deadlocked charges. In May 1999, Starr said that he would not seek to retry McDougal on those charges.

In June 1999, Webster Hubbell, another Clinton friend and Whitewater partner, agreed to admit to one of 15 charges against him. In return, the other charges were dropped and he received probation. Hubbell made a point of insisting that Hillary Clinton had committed no crime associated with her Whitewater dealings.

Meanwhile, Starr was going through his own legal difficulties. In February 1999, the White House had filed a criminal complaint against the Office of the Independent Counsel for leaking information to the news media. An article that appeared in the January 31, 1999, issue of The New York Times stated that Starr was considering whether to indict President Clinton for perjury and obstruction of justice. Moreover, Starr had decided that he had the authority to make the indictments. Starr's spokesman, attorney Charles Bakaly III, told the press, "We will not discuss the plans of this office or the plans of the grand jury in any way."

The White House charged that Bakaly had actually discussed so much that he was in violation of Federal Rule of Criminal Procedure 6(e). That rule limits the amount of information attorneys can divulge about grand jury cases.

Bakaly denied that Starr's office had provided any information to the Times. Starr, meanwhile, decided to conduct an internal investigation, assisted by the federal bureau of investigation. In March 1999, Starr forced Bakaly to resign, and the case was referred to the U.S. Justice Department for criminal investigation and possible prosecution.

The District Court issued a preliminary ruling in July that the newspaper article did appear to have information in it that violated Rule 6(e). The court ordered Bakaly and Starr's office to show why they should not be held in civil contempt. Starr's office countered on appeal that the district court had misinterpreted the rule. In September, a three-judge Appellate Court panel of the U.S. Court of Appeals agreed and overturned the lower court. In re Sealed Case No. 99-3091 (Office of Independent Counsel Contempt Proceeding).

As for Bakaly, who still faced his own contempt charges, his case was brought before the U.S. District Court in July 2000. Prosecutors argued that Bakaly had lied about the information he gave to the newspaper, but the defense argued that he had merely provided standard information that gave away no confidential information. The judge, Norma Holloway Johnson, agreed with the defense, and Bakaly was acquitted on all counts on October 6, 2000.

further readings

Bartley, Robert L., with Micah Morrison, et al. 1994. Whitewater: From the Editorial Pages of the Wall Street Journal. New York: Dow Jones & Company.

Gross, Martin L. 1994. The Great Whitewater Fiasco. New York: Ballentine Books.

Ray, Robert R."Final Report of the Independent Counsel (In re Madison Guaranty Savings & Loan Association): In re Anthony Marceca." Available online at <www.icreport.access.gpo.gov/nussbaum.html> (accessed November 10, 2003).

Wald, Patricia M. 2000. "A Whitewater Legacy: Running the Rapids of Constitutional Law." Record of the Association of the Bar of the City of New York 55 (January-February).

Washington Post Whitewater archive. 1997. Available online at <www.washingtonpost.com/wp-srv/politics/special/whitewater/whitewater.htm> (accessed November 10, 2003).

cross-references

Clinton, Hillary Rodham; Clinton, William Jefferson; Impeachment; Starr, Kenneth Winston; Watergate.

white·wa·ter / (h)wītˈwôtər; ˈwä-/ (also white wa·ter) • n. [often as adj.] (also white-wa·ter) fast shallow stretches of water in a river: whitewater rafting.

WHITEWATER SCANDAL

WHITEWATER SCANDAL. SeeClinton Scandals .