Understanding Whitewater
What are investigators looking for concerning the President’s earlier involvement with a real estate venture known as Whitewater? How serious are the charges? As the controversy builds, here is a look at the case: Q & A
Q: What is Whitewater?
A: The name comes from Whitewater Development Corp., a real estate venture Bill and Hillary Rodham Clinton and their partners, James B. and Susan McDougal, formed in the late 1970s to build a vacation community in Arkansas.
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Q: What put Whitewater into the news?
A: Last fall the Resolution Trust Corp., the savings-and-loan cleanup agency, referred questions about McDougal’s failed S&L; to the Justice Department for a possible criminal probe. Among the questions were whether funds from McDougal’s Madison Guaranty Savings & Loan Assn. were illegally diverted to pay the personal and political debts of Arkansas politicians and whether funds went to Whitewater or to help retire Clinton’s 1984 gubernatorial campaign debt.
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Q: What does the Rose Law Firm have to do with Whitewater?
A: The Little Rock law firm is where Mrs. Clinton, Associate Atty. Gen. Webster Hubbell and the late White House deputy counsel Vincent Foster worked before coming to Washington. Mrs. Clinton and other Rose lawyers represented Madison S&L; in the mid-1980s. After Madison failed, the government sought damages from an accounting firm it blamed in the failure, and it hired the Rose firm and Hubbell to handle the suit. Questions have been raised whether that constituted a conflict, given Rose’s past work for Madison and the fact that Hubbell had relatives with extensive financial dealings at the S&L.; The government recently cleared Rose of conflicts but that decision is being reviewed.
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Q: How did the Whitewater affair expand to the White House?
A: After Foster’s death last summer, which was ruled a suicide, White House Counsel Bernard Nussbaum screened Foster’s White House papers before allowing police investigators access. That and the delay in sealing Foster’s White House office led critics to question whether documents related to Whitewater and Madison might have been removed. Last fall and again in February, top Treasury Department officials and regulators briefed White House officials on the status of the Whitewater probe, prompting questions about whether the White House was trying to meddle in the investigation. Nussbaum resigned Saturday.
The Critical Questions
Special counsel Robert B. Fiske Jr.’s probe will touch on every aspect of the case, including:
* Madison’s failure and whether any illegal diversions took place that could have benefited the Clintons, Whitewater or other prominent Arkansans.
* The recent contacts between the White House and S&L; regulators regarding the Madison investigation.
* Foster’s death.
* Whether any improper shredding occurred at the Rose firm.
Public Concern Grows
Half the public now believes that Whitewater is a serious matter, an ABC News poll found.
View of Whitewater March Jan. Serious matter, needs 49% 33% full-scale federal investigation Not serious, should be dropped 30% 36% Not serious, but investigate* 11% 13%
* answer volunteered. Poll taken March 7 of 525 adults nationwide. Margin of error is plus or minus 5 percentage points.
A Little Place in the Country
The small, money-losing real estate venture known as Whitewater was located along the White River in the Ozark Mountains. In 1980, seeking to promote the Arkansas vacation development, Hillary Rodham Clinton borrowed $30,000 to finance this model home. The loan came from a bank owned by her partner, James B. McDougal, and the loan payments were made by the Whitewater partnership. The three-bedroom, ranch-style home was built on 2.7 wooded acres. The Clintons say they lost $68,900 on the entire venture.
Key Moments
‘78
Aug. 2: The Clintons form a partnership to develop 230 acres along the White River.
‘85
April: Partner James B. McDougal hosts a party at his Madison Guaranty Savings & Loan that raises $35,000 toward retiring Clinton’s 1984 gubernatorial campaign debt.
‘86
October: Madison Guaranty is seized by federal regulators.
‘92
Nov. 3: Clinton is elected President.
December, 1992: The Clintons sell their interest in Whitewater development to James McDougal for $1,000.
‘93
July 20: Deputy White House counsel Vincent Foster’s body is found in a Virginia park. His death is ruled a suicide.
November, 1993: The Justice Department begins investigating Madison at the suggestion of the Resolution Trust Corp.
‘94
Jan. 20: Atty Gen. Janet Reno appoints former U.S. Atty Robert B. Fiske Jr. as special counsel to take over the Whitewater probe.
Feb. 9, 1994: Press reports say Rose Law Firm, Hillary Rodham Clinton’s former employer, shredded documents relating to Whitewater. The firm issues a denial.
March 4, 1994: Fiske subpoenas 10 Clinton Administration officials.
Researched by D’JAMILA SALEM / Los Angeles Times
Source: Associated Press, Times staff reports
