EXCERPTS: Mrs. Clinton Links Problems to ‘Our Inexperience’

Here are excerpts of First Lady Hillary Rodham Clinton’s news conference Friday:

Question: Do you know of any money that could have gone from Madison to the Whitewater project or any of your husband’s political campaigns?

Answer: Absolutely not. I do not.

Q: Actually on the same theme, with your commodities profits, it is difficult . . . to look at the amount of the investment and the size of the profit. I mean, is there any way you can explain how you--

A: . . . Back in 1978 in October, one of our best friends, Jim Blair . . . talked to me about what he thought was a great investment opportunity. He is someone who has been an investor ever since he was a teen-ager, with usually very good results. . . . And when Jim said, “I think there’s going to be a great opportunity to make money,” and explained why and asked me what I thought we could afford to invest, I told him $1,000. So I opened an account at his very strong recommendation and proceeded to trade over the next months until July.

You know, not all my trades made money. Some of them lost money. I talked to Mr. Blair very frequently. In fact, Jim would call me on a regular basis and I would make a decision whether I would or would not trade, and then the trade would be placed. Often he placed it for me. And there was nothing wrong with that. He was on the spot. . . .

I stopped trading in July of 1979, and I did stop trading in large measure because I could not keep up with it. It takes a lot of nerve to be in the commodities trading, and I had just found out I was pregnant.

And so when he called again I said, you know, I just don’t want to do this anymore. . . . And I didn’t, and I’m glad I didn’t because he and other friends of mine who were trading ended up losing money. So it was a good investment offered by somebody who knew a lot, who could provide a lot of good advice, and I was lucky and made the decision to stop when I did. . . .

Q: Do you wonder since then if maybe your broker might have, because of your position or your husband’s, might have given you some kind of unfavorable--or, you know, a favored advantage?

A: There’s really no evidence of that. I didn’t believe it at the time. As I said, I made and lost money in that commodities account. . . . And even Mr. Blair, who ended up losing money, I think would find it very hard to argue that he got any favorable treatment. . . .

Q: There was a second account with the Stephens Co. in which I think you invested $5,000. And at first the White House claimed you lost money on it, but later you put out documents showing you actually made $6,000 on it and didn’t close it until a few months after Chelsea was born.

A: . . . There were two accounts. The first account, the one that I was just talking about, was the Refco account. . . . Now, I closed that account for good in October of ’79 and I took some of the money that I had made and put it into an account at Stephens.

And at that point, I made that a discretionary account. My Refco account was a non-discretionary account, which meant that I had to approve and give the go-ahead for every trade. In the discretionary account at Stephens, my broker made most of the decisions, and I think did a good job for me. He diversified the money that I gave him and put it into money market and stocks and bonds, and $5,000 into some commodities. . . .

In February of 1980, my daughter was born. . . . And I remember talking to my broker some time after that, and I said, “You know, I just want to get out of commodities altogether. I don’t ever want to have to worry about it.” So he got me out of the positions that I had been in so that by May I was no longer doing any kind of commodity trading in the Stephens account.

Now, what happened, though, is that he took the money that I now know I made--I really didn’t think I’d made any money in commodities--and he bought some stock and he did some other things for me. Now in the fall of 1980, my husband lost his election, we moved, so by 1981, when I gathered all my documents together to give to my accountant, I had a year-end statement from Stephens which did not report anything about commodities, I had a year-end statement from the Peavey Brokerage Co., which reported a loss, and I had no year-end statement from either Clayton or the company called ACLI.

So I think what happened is we bundled all of the documents we had because I took all of the reports that I had, gave them to the accountant, and I believed that in the absence of a year-end statement, the accountant and my husband and I missed the fact that we had actually made some money in the Aklee account. . . .

Q: Do you know anything about Mr. Foster’s death? Do you know what he wanted to tell the President that he didn’t get to tell him?

A: You know, I don’t know that he wanted to tell the President anything. That’s the first I’ve heard of that. My memory is that the President actually talked to Vince Monday night before he died . . . and when I talked with the President afterward, he was stunned because the conversation was a very normal kind of a conversation. . . .

Q: . . . There’s been a lot criticism of the papers in Mr. Foster’s office, that some may have been removed.

A: I know there’s been a lot of concern and criticism about that. I cannot speak to that in any detail, but I know the special counsel is looking into the circumstances surrounding Mr. Foster’s death and I assume he will issue a report about that which I hope will put all these matters to rest once and for all.

Q: The Whitewater development was set up, as you say, as a 50-50 partnership between the Clintons and the McDougals, meaning that you were liable for 50% of the losses or 50% of the gains; and yet, by your own accounting, you lost half or even maybe a third of what the McDougals lost. . . . Doesn’t that discrepancy represent some sort of a gift or gratuity?

A: No. And let me say that, yes, the ownership of the corporation was 50-50. The liability on the underlying debt was 100% for each one of us. I mean, there was no gift in that. When my husband and I signed that mortgage and when we re-signed guarantees, we assumed the whole responsibility. I mean, if Jim had gone into bankruptcy early on, if Susan had left, we would not have only 50% of the obligation, we would have 100% of the obligation.

Q: But why was it that the McDougals lost so much more money than you did? I don’t understand.

A: I can’t answer that. I mean, we gave whatever money we were requested to give by Jim McDougal. I mean, he was the one who would say, “Here’s what you owe on interest, here’s what your contribution should be.” We did whatever he asked us. . . .

Q: . . . surprising that, given that you were jointly and severally liable for all the debt and that you and your husband are both lawyers, that you would be so passive about a substantial investment.

A: Well, but we were not real estate developers, and Jim had a track record. And I wasn’t a cattle expert; I trusted Jim Blair and it worked out for me. And I wasn’t a real estate expert and we lost money. Those things happen. . . .

Q: . . . I’m wondering what kind of a toll, if any, this has taken on you and the President’s personal and political lives, and do you ever look in the mirror and wish that you just never got into this?

A: No. Never, never. I mean, some days are better than other days, but you know, I think what has helped me in the last couple of weeks, aside from some good friends who have talked with me and helped me get rezoned, if you will, is my belief that this is really a result of our inexperience in Washington. . . .