Whatever Happened to Whitewater?

In a television interview four years ago, the late Ann Devroy, who covered the White House for The Washington Post, had this revealing insight into the mind of the modern reporter:

Whitewater is a classic example of a story that you start pulling strings on and trying to unravel bits and pieces of it to see what’s there. You can’t know what’s there until you cover it. And it’s one of the things about what the press does that people sometimes misunderstand. They believe that in covering something, you’re suggesting there is something big there at the end of what you’re covering, and in fact, you’re just reporting.

Just because we spend six years and write hundreds of thousands of words about convoluted financial transactions in Arkansas and then put them on the front page day after day doesn’t mean we think there’s something actually wrong. On the contrary, four-thousand-word investigative stories frequently mean only that a team of reporters has been at work on a preconceived notion for a couple of months, and the fruits of their labors, meaningful or not, must be inflicted on the readers. Often, but not always, there is a weaseling paragraph: “While there is no evidence of actual wrongdoing, the sequence of events uncovered by our investigative team raises the appearance of possible conflicts of interest.” Or, “offers a rare glimpse into the dark underside of…” Or, “raises disturbing questions about the appearance of possible improprieties.”

In translation: the reporters came up with dots of information, but without a narrative line to connect them, and they hope that their “appearances of possible conflicts,” “rare glimpses,” and “disturbing questions” will make more sense to other people than they do to them. Investigative reporters run the risk of becoming confidence men, forever promising to their editors that a payoff for their time and investment is just around the corner. And only the boldest editor is willing to junk a three- or four-month project that has come tantalizingly close to its goal. At best, investigative reporters do useful work and expose misdeeds in high places. At worst, as in the charge that the CIA introduced crack cocaine to Los Angeles neighborhoods or the CNN-Time fiasco over the alleged use of sarin gas to kill US defectors in Vietnam, they fall in love with a theory, twist facts and even quotations to fit it, and suppress all contrary evidence. And in the middle, you get the kind of reporting Ms. Devroy described, a work in progress that, just by its length and detail, implies that it is worth reading even though it actually proves nothing at all.

The Whitewater scandal, insofar as it relates to President and Mrs. Clinton, has been, as Devroy said, an example of the latter. The first accounts appeared to charge that Clinton, as governor of Arkansas, pressured state regulators not to close down a failing bank run by his business partner, James McDougal. Then it was suggested, among other things, that the Clintons had somehow diverted a federal investigation into the bank’s $60 million failure; that Clinton had coaxed McDougal into hiring Hillary Clinton to do legal work; that Clinton pressured a crooked judge to make an illegal loan to Mrs. Susan McDougal; that James McDougal funneled money to Mrs. Clinton; that she concealed her billing records and colluded with McDougal in a stock-floating scheme; that their friend, Vince Foster, may have been murdered; and, finally, that Clinton and his cronies covered up all their misdeeds by paying hush money to their longtime friend, Webster Hubbell.

None of this has proven true. In six years of investigations by reporters, House and Senate committees, bank regulators, outside consultants, and two successive independent prosecutors, there has been no credible charge of any wrongdoing by the Clintons. McDougal’s bank was chartered by the federal government; the state of Arkansas tried to close it down but could not. Every one of the other charges has been answered, insofar as they are clear enough to be answerable. Yet, except for the official verdict that Foster indeed committed suicide, there has been no public exoneration, either. For every question that is answered, a new allegation is made. Kenneth Starr has now shut down his Little Rock, Arkansas, grand jury, which heard virtually all of the Whitewater evidence, and brought no charges against the Clintons, and is concentrating instead on Monica Lewinsky’s taped boasts that she had some kind of sexual relationship with the President and on the possibility that she was asked to lie about it.

Whitewater itself is dead, but it has always been a travesty of a scandal investigation, a cargo-cult version of Watergate. Reporters, congressional investigators, political operatives, and independent counsels, remembering the bonanza that Watergate brought to their counterparts in the 1970s, have squatted like those hopeful New Guinea tribesmen at the end of their miniature runways, waiting for the gods to send them C-47s full of guns and Coca-Cola. Surely if we go through the same magic motions, the same dimly remembered, half-understood mumbo jumbo, the gods will deliver again. Every so often, we chant the words that worked so well in the past: hush money, cover-up, executive privilege. Why doesn’t it work?

For those too young to remember, Watergate involved a burglary of Democratic offices by a security force that had been set up within President Richard Nixon’s White House. When the burglars were caught, Nixon discussed paying them hush money and tried to use the CIA to block an FBI investigation. A Nixon aide, John Dean, explained the attempted cover-up. An FBI official, L. Patrick Gray, testified that Nixon had personally known of it. And a former White House official, Alexander Butterfield, disclosed the existence of secret tapes that provided conclusive evidence.

From start to finish-the 1972 burglary to Nixon’s resignation in August 1974-Watergate lasted just over two years. Whitewater, by contrast, ultimately depends on the unsupported and contradictory ramblings of James McDougal and, more recently, David Hale, the judge who says Clinton urged him to lend $300,000 to Susan McDougal. There is no documentary evidence to support any charge of wrongdoing by the Clintons, and no credible witness has come forward to make an accusation that even a Clinton enemy would dare bring into a court of law. This six-year nightmare for the Clintons all comes back to James McDougal.

According to several of the jurors at his second trial, McDougal was headed for acquittal when Starr prosecuted him for fraud in 1996. Then, with victory in sight, McDougal made the mistake of taking the stand in his own defense. The jurors saw and heard him-heard the evasions, the contradictory responses, the wily denials—and found him guilty. The judge sent him to prison, where he died this year. McDougal’s autobiography, Arkansas Mischief, written with Curtis Wilkie, has precisely the same effect as his courtroom testimony. When seen from afar, or described by others, McDougal seems a harmless, colorful Southern wheeler-dealer in his Panama hat and ice-cream suits, spouting quotations from Winston Churchill and the classics. But when portrayed in his own words, he is a self-serving, self-pitying conniver who preyed on others and yet sees himself as a victim.

In 1978, he invited the young Clintons-Bill was thirty-one and headed for a spectacular if low-paying political career in Arkansas-to join him in what he described as a sure-thing real estate venture involving wilderness lots in Northern Arkansas. It lost money, entangled the Clintons in years of controversy, and, in the end, not only blighted Clinton’s presidency but started a series of investigations that have cost the Clintons several million dollars in legal bills. Yet, in his book, McDougal is hurt that the Clintons were not grateful to their old friend. Even though he was receiving Social Security disability payments as a manic-depressive, he is angry that the Clintons did not give him a government job. He regards himself as one more poor, innocent Arkansan wrecked by the Clinton tornado as it swept to success, and believes he is entitled to revenge for his mistreatment. This is enough to make one gag. What is worse is the wide assortment of presumably intelligent people, from Starr to the journalists whom McDougal used in his vendetta, who took his word and followed his leads to nowhere.

According to McDougal’s book and Hubbell’s Friends in High Places, Arkansas-the land in which Bill Clinton grew up-is inhabited by people named Frog Henson, Mutt Goad, and Finus Shellnut (who may survive in memory as the answer to the trivia question “Name the man who was both Webster Hubbell’s brother-in-law and Gennifer Flowers’s boyfriend”). Arkansas was for more than a century a one-party state, which meant that political differences were largely personal rather than ideological. Penetrating these hatreds, often carried through generations, is next to impossible. The rich, power-brokering Stephens clan-investors Jack and Witt Stephens, known by the acronym JAWS-supported or opposed politicians based on their own quirky grudges. They didn’t like Clinton, but they disliked one of his opponents, Sheffield Nelson, even more. They hated former Governor Jim Guy Tucker because Tucker had once beaten Ray Thornton, who was blood kin to them. Arkansas’s Democratic Senator John McClellan at one point told McDougal to try to defeat a candidate for attorney general on the grounds that McClellan had once lent the man a book and couldn’t get it back for four years.

Lobbyists walked freely through legislative meetings, buying votes. “We ate breakfast in the coffee shop,” McDougal writes of one legislative session, “and a Cotton Belt railroad lobbyist with the euphonious name of Charles Coalburner walked through the room every morning, passing each table and picking up checks.” This was not unique to Arkansas. McDougal writes that Senator McClellan rarely paid for anything in Washington: “Members of Congress made it a point to walk around without money. When a bill came for dinner or drinks, the politicians didn’t even bother to fumble for their empty billfold; an obliging lobbyist was always there to pick up the check.” Similarly, politicians were steered to sure-thing investments, so they would not have to worry about making a pile even as they served the public interest. Even Senator J. William Fulbright, who employed McDougal as an aide, took a piece of his real estate schemes.

McDougal saw himself as the financial protector of the Clintons-and no doubt hoped to gain accordingly. But in the high-interest days of the late 1970s and early 1980s, their joint Whitewater investment was doomed. It never made any money, and McDougal handled-or mishandled-all of the paperwork. He even neglected to tell Clinton that he had sold all of the lots. At one point, he accuses Clinton of suggesting that Whitewater lots be used as collateral for a loan to Susan McDougal, and then says: “I remember thinking: But, Bill, all the lots at Whitewater have been sold. Then I remembered that he was never on top of the situation there.”

McDougal makes two accusations against Hillary: that she took Whitewater tax deductions for expenses that were in fact paid by his corporation and that, at Bill Clinton’s request, he funneled her $2,000 a month in legal fees. The latter charge, at least, is false. An investigation by the law firm of Pillsbury Madison & Sutro discovered that McDougal’s legal fees went to the Rose Law Firm, where Mrs. Clinton was a partner, and that her share would have been a small fraction of the $2,000, perhaps $20 a month. McDougal also charges that he previously slipped $2,000 a month in cash to Bill Clinton through intermediary Henry Hamilton. He offers no evidence to support this, and Hamilton is dead. On the basis of one overheard, flirty telephone call, McDougal further concluded that Clinton was having an affair with his wife, Susan, an accusation that Susan denies.

With these grievances, McDougal decided that he deserved revenge on Bill Clinton. “The Whitewater case unfolded because I wanted Bill Clinton to feel my pain. Bill, and especially Hil-lary, surely caused me pain,” he writes. He took his complaints to Arkansas Republican politician Sheffield Nelson, the former Democrat whom Clinton had beaten for governor in 1990.

It was Nelson who passed the information on to Jeff Gerth, an investigative reporter for the New York Times. It was Gerth’s story that first described the troubles of the Whitewater development and raised questions about the propriety of the Clintons’ involvement in the project…. Nelson and I had another thing in common. We had both been humiliated by Bill Clinton.

Gerth’s first article, based on these two grudge-bearing sources, appeared on Sunday, March 8, 1992, as Clinton appeared to be the front-runner for the Democratic presidential nomination. “It was a long and sometimes incomprehensible piece,” McDougal writes. Even he could not follow the labyrinthine charges described in the Times account. But when the Gerth article, which certainly implied wrongdoing by the Clintons, provoked the inevitable follow-up questions, McDougal told the Associated Press, “I’ve never done anything illegal, and as far as I know Bill Clinton has never done anything illegal or unethical.” As he says in Arkansas Mischief, “That was the truth, as far as the Whitewater story was concerned. At that point, neither the Clintons nor I had done anything illegal at Whitewater.” McDougal has apparently forgotten his previous charges that he was slipping Governor Clinton, his Whitewater partner, $2,000 a month and that Hillary had falsely claimed income-tax deductions.

In parallel with McDougal’s enlistment of Sheffield Nelson, David Hale, who had made the $300,000 loan to Susan McDougal, sought strategic advice from a longtime Clinton hater named “Justice” Jim Johnson, a segregationist who once ran against Governor Orval Faubus on the grounds that Faubus, who fought integration of the public schools, was too accommodating on race. Johnson is yet another example of the proposition that one of Clinton’s best assets is the kind of enemy he attracts. In 1992, Johnson had turned up Clinton’s 1969 letter to an ROTC commander, thanking him for keeping Clinton out of the draft, and during the presidential campaign he appeared at a conservative rally in Washington to denounce the candidate from his home state as a “queer-mongering, whore-hopping adulterer.” Johnson brought Hale’s charges to the attention of national conservatives, McDougal writes, and “soon stories of the president’s involvement in an illegal loan were appearing in the press.”

It is poetic but costly justice that McDougal’s decision to take revenge on the Clintons led to his own undoing. He had already beaten one bank fraud charge in Arkansas, and if he had not revived the issue by taking it to Sheffield Nelson, he would not have called attention to himself a second time. But Starr reopened his examination of McDougal’s affairs and sent him to prison. McDougal wrote that Clinton promised him he would pardon Susan McDougal, who was also convicted at the second trial. Clinton’s lawyer, David Kendall, who was at the meeting where the alleged promise was made, says McDougal’s account is false.

Webster Hubbell’s Friends in High Places is far friendlier to the Clintons than McDougal’s memoir and Hubbell is a more sympathetic character, a big, easygoing, protective Baloo the Bear to Clinton’s sprightly, talkative, elusive Mowgli and McDougal’s Kaa the Snake. Hubbell readily acknowledges that his misfortune is his own doing. He felt entitled to live in a big expensive house in Little Rock, to travel to St. Lucia on spur-of-the-moment holidays, to entertain lavishly and buy presents for his many friends. On an income of $120,000, he was spending $60,000 for house payments alone. When his personal credit card bills arrived, he paid them with checks from the Rose Law Firm, where he was a partner. Rose discovered the fraud in 1994, and Hubbell, then serving as associate attorney general, pleaded guilty and served a harrowing fifteen months in federal prison.

A life once promising-he was mayor of Little Rock at thirty-one and chief justice of the Arkansas Supreme Court at thirty-six-was shattered. Nevertheless, Starr pursued him again, after his release from prison, on the suspicion that the consulting contracts Clinton friends arranged for him after he quit the Justice Department must have been hush money. Starr could find no evidence to support that accusation but, after issuing a subpoena for all Hubbell’s financial records, filed charges of tax fraud even though the allegedly incriminating documents had been produced under a grant of immunity. This June US District Court Judge James Robertson quickly threw out that ten-count indictment on the grounds that Starr had no authority to wander so far afield from his Whitewater mandate and that the documents had been surrendered under a grant of immunity. It was a rare piece of good news for Hubbell and his wife, Suzy.

As a partner at the Rose Law Firm, Hubbell was closer to Hillary Rodham Clinton, with whom he worked, than he was to her husband. Bill Clinton was Hubbell’s golfing and Christmas-shopping buddy, but even in 1982 Clinton was beyond normal friendships. “I felt that Bill and I had become friends by then-as much as it’s possible to be friends with someone who requires the constant love of an entire state,” Hubbell writes.

The Rose Law Firm, in Hubbell’s portrayal, was a snake pit of greed, rivalry, and conflicts of interest. Partners resented Hillary as a Yankee and a woman (let alone a woman who resisted taking her husband’s name). They asked Hubbell to talk to her about her wearing jeans to the office on Saturday. Their wives made fun of her hair and muttered that Hubbell and Foster would join Hillary for lunch at an out-of-the-way Italian restaurant, where they were less likely to be seen drinking wine. Gossips said she was having affairs with both men and, in a Platonic sense, this appears to have been true.

“We all had relationships with our spouses that, for different reasons, prevented totally frank discussions,” Hubbell writes. “Hillary knew that Bill was more wrapped up in his own career than in her need for a life of her own. Vince couldn’t talk to Lisa [Foster] because she was so insecure and possessive. I couldn’t talk with Suzy about her father [the domineering Seth Ward, a partner of McDougal’s] and the money pressures until it was too late. So Vince and I each shared a part of ourselves with Hillary that we shared with no other woman.” Foster was closer to Hillary than Hubbell was. “They often worked late when I was off doing my civic things,” he says.

This relationship led to more damaging gossip when Foster killed himself in the summer of 1993. There is no evidence of a sexual affair, but Hubbell writes that Foster was hurt that Hillary, as First Lady in charge of a health-care reform project, had grown waspish and demanding; he was now her subordinate, not an equal partner, and their old easy friendship had not survived the transition to national office. In addition, the Wall Street Journal decided to make Foster the target of a series of editorials that speculated on a White House cabal of former Rose Law Firm attorneys who were supposedly manipulating the FBI. Foster, who had never encountered such attacks even in the vicious politics of Arkansas, did not know how to shrug them off. He sank into a depression and, one day in July 1993, drove to Fort Marcy Park, overlooking the Potomac, and shot himself.

“I really don’t think Vince killed himself over his relationship with Hillary in any way,” Hubbell writes. “I know he loved her, as I do. I call this workplace intimacy. I think Hillary, like many others of us, questions whether, if she had spent more time with him, she could have affected the outcome. I’m sure she loses sleep over it, as I do…. The truth, I believe, is that there is nothing we could have done. He was suffering from a disease called depression.”

When Clinton was elected president in 1992, he had casually asked Hubbell if he was coming too. Hubbell said sure. Clinton suggested the Justice Department and then proposed two questions for him to pursue: who killed John F. Kennedy and whether UFOs are real. “He was dead serious,” Hubbell says. He found himself installed at the Justice Department, and sweated through the FBI background checks in terror that his credit-card fraud would be discovered. It was not. Hubbell gives a self-accusing account of the Justice Department-FBI decision to use CS gas to end the siege of David Koresh’s Branch Davidian compound at Waco, Texas, which resulted in the deaths of eighty-two people. He and attorney general Janet Reno were new to Washington and all the experts assured them that the gas would work. When the compound went up in flames and gunfire, Hubbell offered Reno his resignation. She rejected it and took the blame herself.

Hubbell offers a reasonably persuasive rebuttal to the suspicion that he was paid hush money after he resigned from the Justice Department to face fraud charges lodged by the Rose Law Firm. “One, I didn’t hush. For three years, I answered every question the independent counsel put to me. Two, no one knew back when I got those consulting contracts that I was going to be indicted and then pressured to say something bad about my friends. Finally, how do you prove a negative?” When Clinton asked him directly whether he had defrauded Rose, Hubbell denied it. In the end, the Clintons cut him off. He has not seen them, he says, since October 11, 1994, at a White House costume party at which the President had his hair slicked back like Elvis Presley’s.

The books by McDougal and Hubbell are both packed with the details of to-and-fro bank loans to finance real estate projects and other ventures cooked up by go-go entrepreneurs from the faraway mists of the Ozarks. A responsible citizen, eager to understand the workings of his political system and the nature of the charges against his president, might feel some duty to study such subjects as the relationships of Joe Giroir, the accounts of the Worthen Bank, the differences between Madison Guaranty, Madison Financial, and Madison Marketing, the question of which portion of the Castle Grande project had the sewer lines, and all the rest of the mind-numbing trivia that has been thrust, incredibly, to national prominence. This would be a mistake. Representative Jim Leach (R-Iowa), chairman of the House Banking Committee, felt such a duty and came up empty. Senator Alfonse D’Amato (R-N.Y.) held detailed hearings on Whitewater and could produce nothing of interest even to himself. The legions of investigative reporters who have pored over old records have never been able to produce a story that a reasonably intelligent person could read and conclude, “Yes, there is a crime.” And Kenneth Starr, after four years and $30 million, is still chasing fancies about Hillary Clinton’s billing records, which, when found, showed nothing incriminating. With his Little Rock grand jury out of business, no indictments are likely.

Yes, Starr remains in business, trying to coax a scandal out of Monica Lewinsky. And Clinton survives, smiling, seemingly impervious to these repeated, petty blows. But in the end, we have to ask, What has James McDougal cost us? Did the investigations he provoked weaken the presidency in any material way? Would we now be enjoying universal health insurance for our children or a reformed campaign finance system or a healthier Medicare program if it were not for the distractions thrust upon us by James McDougal’s resentments? Probably not. Clinton’s social programs have never seemed particularly sweeping. He concentrates on little things like the Family and Medical Leave Act or school uniforms and he chooses not to risk his popularity to fight for big causes. And Clinton has had public-relations problems unrelated to McDougal: his avoidance of the Vietnam draft and Gennifer Flowers’s claims, as well as Paula Jones’s complaint, which, however improbable, was believed by millions of Americans, who regard their president as untrustworthy.

In the end, Whitewater may prove to be only a bad episode for the press that kept it alive-always fanning new suspicions and raising new questions-rather than a tragedy for the country. But what a waste of time, money, and mental energy it has been. Still, there is a lesson. The next time a long and complicated investigative piece appears on page one of a major newspaper, everyone should put it to a personal test: “If this doesn’t make sense to me, it probably doesn’t make sense to anybody.” This will be a correct verdict. Don’t mind us journalists. We’re “just reporting.”