Clinton Aide in Late ‘70s Pleads Guilty to Misusing an SBA Loan

A former aide to Bill Clinton when he was governor of Arkansas pleaded guilty Thursday to charges of misusing a $65,000 federally backed small-business loan.

Stephen A. Smith, a 46-year-old college professor and business partner of current Gov. Jim Guy Tucker, could get up to a year in prison and a $1,000 fine in connection with the charges, which stemmed from the government’s Whitewater investigation.

Although the misdemeanor charges were brought by the Whitewater special prosecutor, the transaction had nothing to do with Clinton or the land development venture for which the investigation is named.

Smith was Clinton’s executive assistant during Clinton’s first term as governor in 1979 and 1980. He also was Clinton’s chief of staff when Clinton was attorney general the previous two years.

Smith admitted lying to a lending company, Capital Management Services Inc., about how he would spend the Small Business Administration loan he received in 1986.

Smith said the money would finance his communications company, when in fact it helped pay off a $165,000 real estate loan taken out by him, his father, Tucker and James B. McDougal, who was Clinton’s Whitewater partner.

On Wednesday, Tucker, a Democrat who became governor after Clinton was elected President, was indicted by the Whitewater grand jury on charges of lying to obtain a $300,000 SBA loan from Capital Management and trying to dodge taxes. A federal judge on Thursday set a June 22 arraignment for Tucker.

Meanwhile, McDougal was subpoenaed by the Whitewater grand jury Thursday and was told to bring handwriting samples on June 20.