Opening a new round of Whitewater hearings, House Republicans
vowed Monday to show that President Bill Clinton and Hillary Rodham
Clinton benefited from the defrauding of a failed savings and loan
and a separate government lending program.
Appearing before the House Banking Committee, bank examiner
James Clark described what he called an illegal real estate fraud
scheme at the S & L owned by the Clintons' Whitewater business
partner, James McDougal.
But Clark acknowledged that he could not connect Clinton, who
was governor then, to the scheme.
Later, a General Accounting Office investigator, Donald
Fulwider, testified that part of the proceeds from an improper loan
backed by the Small Business Administration went to pay off an
earlier loan that benefited Whitewater and to a real estate
transaction involving Whitewater. The improper $300,000 loan has
not been repaid.
"In this venture called Whitewater," the Clintons' partners
"provided virtually all the money; the governor-in-the-making
provided his name," said committee chairman James Leach, R-Iowa,
Clinton's chief Whitewater critic.
Finally, an SBA officer, Wayne Foren, disclosed a previously
unknown contact with the White House in which a top presidential
adviser, Mack McLarty, was told that a criminal investigation had
begun into the SBA-backed company that made the improper loan.
The owner of that company, disgraced Municipal Judge David
Hale, would later allege that he was pressured by Clinton to make
the $300,000 loan. The loan went to one of the Clintons' business
partners, Susan McDougal, then the wife of James McDougal and part
owner with her husband of the collapsed S & L at the center of the
SBA officer Foren said he had briefed the agency's
administrator, Erskine Bowles, on May 5, 1993, about opening a
criminal investigation of Hale.
That night, Bowles told White House chief of staff McLarty
about the inquiry of Hale, a longtime businessman and municipal
judge involved in Arkansas politics, Foren said.
Bowles does not recall briefing McLarty, and McLarty has no
recollection of ever being told about it, said White House
spokesman Mark Fabiani.
For the first time, details of what happened to the proceeds of
the $300,000 loan by Hale's company were laid out on an official
A total of $111,500 paid off a loan by Stephens Security Bank
to the McDougals, said Rep. J.D. Hayworth, R-Ariz., referring to
canceled checks and other documents in the committee's custody.
And a portion of the $300,000 loan helped the McDougals buy 810
acres south of Little Rock for Whitewater. …