Clinton's Embarrassing Real Estate and Savings & Loan Deals: Arkansas Years (1998)
James B. “Jim” McDougal (August 25, 1940 – March 8, 1998), a native of White County, Arkansas, and his wife, Susan McDougal (the former Susan Carol Henley), were financial partners with Bill Clinton and Hillary Rodham Clinton in the real estate venture that led to the Whitewater political scandal of the 1990s. Starting in 1982, McDougal operated Madison Guaranty Savings and Loan.
Custis Wilkie is a journalist, college professor and historian of the American South. He is a Fellow of the Overby Center for Southern Journalism and Politics at the University of Mississippi, and author of numerous books including Dixie: A Personal Odyssey Through Events That Shaped the Modern South. Historian Douglas Brinkley has written that, “Over the past four decades no reporter has critiqued the American South with such evocative sensitivity and bedrock honesty as Curtis Wilkie.”
James “Jim” Guy Tucker, Jr. (born June 13, 1943) is an Arkansas political figure. He served as the 43rd Governor of Arkansas, the 11th Lieutenant Governor of Arkansas, Arkansas Attorney General, and U.S. Representative. Tucker has been married to the former Betty Allen since 1975.
Tucker resigned the governorship and was replaced by Mike Huckabee on July 16, 1996, after his conviction for fraud during the Whitewater affair, although the conviction was not directly related to the investigation of Bill and Hillary Clinton’s real estate and related business dealings.
Susan McDougal (born 1955) is one of the few people who served prison time as a result of the Whitewater controversy although fifteen individuals were convicted of various federal charges. Her refusal to answer “three questions” for a grand jury about whether President Bill Clinton lied in his testimony during her Whitewater trial led her to receive a jail sentence of 18 months for contempt of court. This comprised most of the total 22 months she spent in incarceration. McDougal received a full Presidential pardon from outgoing President Clinton in the final hours of his presidency in 2001.
McDougal was born as Susan Carol Henley in Heidelberg, Germany, the daughter of James B. Henley and Laurette (Mathieu) Henley. Susan McDougal was married from 1976 until 1990 to the late James B. McDougal, also of Little Rock, Arkansas. The McDougals were partners with Bill Clinton and Hillary Rodham Clinton in the failed Whitewater real estate venture in the 1980s.
McDougal separated from Jim McDougal in the late 1980s and moved to Los Angeles, where, from 1989 until 1992, she worked in Los Angeles as a personal assistant to former actress Nancy Kovack, the wife of conductor Zubin Mehta. In late 1993, McDougal was charged with embezzling money from the Mehtas, and began preparing her successful defense against the charges.
On August 5, 1994, Kenneth Starr became Independent Counsel to prosecute Whitewater participants, including Susan McDougal. Federal trial began in 1996. During that trial, the government’s star witness, Arkansas banker and former municipal judge David Hale, claimed that then-Governor Bill Clinton had discussed an illegal $300,000 loan with himself and McDougal. Hale was himself under investigation for having defrauded the Small Business Administration out of $3.2 million. He also unsuccessfully sought to have his brother, Milas Hale corroborate his testimony against Clinton.
McDougal was convicted of her role in Whitewater on May 28, 1996, and sentenced to spend time in prison for four counts of fraud and conspiracy relating to the Whitewater scandal, but her prison term did not begin until March 7, 1998 due to other court proceedings. Following James McDougal’s conviction but prior to his sentencing, he began to cooperate with the Office of Independent Counsel (OIC), trying to persuade his former wife to do likewise in order to avoid a prison sentence. Susan’s defense lawyer, Mark Geragos, stated that her ex-husband told her that deputy independent counsel W. Hickman Ewing Jr. would be able to “get Clinton with a sex charge” before the 1996 election if she agreed to lie and say she had had an affair with Clinton. She denies ever having an affair with Clinton. Ewing told reporters during a break in the proceedings that he never heard of such a plan, saying “I never talked to Jim McDougal about that, and I wouldn’t. I never heard any discussion along those lines in my office ever at the time frame she’s talking about”.
Susan McDougal rejected her ex-husband’s advice, and the sentencing hearing began August 19, 1996. After the judge levied a sentence of two years in federal prison, but before she left the courtroom, Starr had Susan McDougal served with a subpoena for another Whitewater grand jury, to begin two weeks later.