First Report on the Clinton Whitewater scandal - March 8, 1992

From the opening of This Week with David Brinkley. The New York Times on this day, in the midst of the 1992 Presidential Campaign, published a story from investigative reporter Jeff Gerth, that early in his tenure as Governor of Arkansas, Bill Clinton was involved in a business deal with his wife Hillary Clinton and the owner of an Arkansas Savings and Loan. In 1978, Bill and Hillary Clinton entered into a joint venture to develop a piece of Ozark real estate with the owner of Madison Guaranty Savings and Loan Association, Jim McDougal. McDougall was himself a former Clinton aid and a former aid to Senator James Fulbright. The plan was to borrow $200,000 from Madison Guaranty to buy land in the Ozark Mountains for vacation homes. The name of the corporation they formed to develop the property was called “WhiteWater Development.” This money from the Savings and Loan owned by James McDougal subsidized the corporation. The problem comes in with the 1980s Savings and Loan scandals. Madison Guaranty, used to fund Whitewater, became insolvent and faced possible shutdown by the State of Arkansas during Bill Clinton’s tenure as Governor of that state. McDougall was prosecuted in Arkansas for fraud in 1984, and he hired the Rose Law Firm. The Rose Law Firm employed Hillary Clinton as a partner. Bill Clinton then appointed a new state securities commissioner, who then approved a plan to keep Madison Guaranty Savings and Loan, owned by McDougal, in business. The plan the commissioner approved that outlines how to bail out Madison Guaranty Savings and Loan was written by the Rose Law Firm, where Hillary Clinton worked as an attorney. The issues raises questions on whether or not a governor should be actively involved in a business directly regulated by the state. Clinton was asked about it and he said the lost a lot of money on the deal. Accounts of what happened differ and some records are missing.