Copyright © 1994 The Telegraph plc. All Rights Reserved. Reproduced with permission.
The Electronic Telegraph   Sunday 27 March 1994   World News
[World News]

Why America is turning to an Englishman for answers
By Ambrose Evans-Pritchard

Ambrose Evans-Pritchard reflects on how his investigations into the affairs of Bill and Hillary Clinton have triggered a wave of disclosures

THE radio talk shows have been running at about one a day. I stand by the window of the Telegraph offices at 13th and F Street, telephone in hand, and broadcast out into the hinterland. Texas, Colorado, New England, California: huge audiences of people I know nothing about, all eager for the latest details about Whitewater.

It is an eye-opener. The callers talk about the President in a tone of undisguised contempt, and they want to know the answers to everything: who is sleeping with whom in the White House (no comment); whether it is true that Vince Foster, the deputy White House counsel, was snuffed out with sodium mono-fluoride 10-80 in his office, and then shot later to make it look like a suicide (possible); and whether Bill Clinton really had his own counter-intelligence service in Arkansas (he did: it was called the Arkansas State Police Intelligence Division).

They discuss the minutiae of Whitewater with fluency, and often they tell me things about the affair that I never knew before. Clearly, there is a very effective grapevine out there beyond the capital, a samizdat network of tens of millions of people. In many ways they are better informed than the opinion elite, cut off in the liberal-lawyer ghetto of the Washington Beltway.

But the people who really know what is going on are those involved with day to day trading on the financial markets. As last week went from bad to worse at the White House, I began to get calls from New York Stock Exchange brokers asking how long it would be before the Democrat leadership recognized that Clinton had become a liability and would have to be removed from office.

They said that rumours were already hitting US bond prices and depressing the dollar, adding that Wall Street was on the threshold of a politically-driven bear market that could send stocks into a decline of a thousand points or more on the Dow Index.

But it was a story that appeared in the New York Times on March 18 that really disturbed the brokers. Up until then, the consensus on the "Street" was that the only sin committed by the Clintons was a little corner-cutting from time to time, a few tax liberties, and maybe accepting the odd kick-back as a campaign contribution - in other words, politics as usual. But as traders worked their way through the intricacies of that article, the scales began to fall from their eyes. For it describes how Hillary Clinton made $100,000 on cattle futures in one year, from 1978 to 1979.

It looks bad, of course, for the righteous Hillary, scourge of Republican greed and profiteering, to have acquired the Clinton family's seed capital in such a manner - and $100,000 at that time in Arkansas was real money, enough to buy a big house with plenty to spare.

It looks bad, too, that she was apparently instructed in these highly sophisticated manoeuvres by the chief outside lawyer for a poultry conglomerate, based in Arkansas, just as Bill Clinton was moving into the Governor's mansion. The company, it seems, enjoyed friendly regulatory treatment during the Clinton incumbency and, according to the Wall Street Journal, it has now started to enjoy similar favours on a national level. For instance, the Clinton adminstration has exempted chicken from the stringent federal standards applied to other meats.

But looking bad is not the problem. A woman of Mrs Clinton's single-mindedness can doubtless cope with the accusation of hypocrisy. The problem is that until a criminal prosecutor has combed through the records - if they have not been shredded, or oxidized, in accordance with Arkansas mores - and has subpoenaed the brokers involved, a great number of people will question whether these cattle trades were in fact legitimate transactions.

At the time, the Clintons did not have the capital base necessary to speculate on this scale. In fact they were almost indigent. And when the subject of this windfall arose during the presidential campaign, they claimed that the money came from savings and an inheritance.

Naturally, suspicions are aroused. It is well known in financial circles that the easiest way to disguise the transfer of money from A to B - to launder it, in other words - is to pass it through a commodity hedging account. Since rules for designating customer accounts are lax, the broker can do blank trades in the morning, then "cherry-pick" the profitable ones at lunchtime and allocate them to the intended beneficiary.

So the reputation of the First Lady will now have to bear the added burden of this cattle controversy, or "Bullgate" as it has been dubbed by the New York Post. Her moral plinth was always higher than that of her husband, so her fall has been that much faster, but he too is descending with vertiginous fury.

At best, the President bought himself a little time when he appeared before the nation on Thursday night to account for the excessive tax deductions taken on their Whitewater investments. Claiming that he had forgotten a gesture of generosity towards his mother - a very Clintonesque manoeuvre, especially since she is now dead - he offered up a token $22,200 admission of error, as if he believed it were really possible to weave and bob and suppress the scandal by feeding titbits of disinformation to a gullible court press. In a few weeks, at the most, he will have to go through the gruesome ordeal yet again, and he will find the patience of the Washington establishment wearing thin.

Even as he spoke, stunned Democrats on Capitol Hill were trying to come to terms with the blistering report of Congressman Jim Leach, the usually retiring vice-chairman of the House Banking Committee, who released a flood of documents to substantiate his claim that the Clintons made money on Whitewater - they now claim they lost $46,700 - and that the company "came to be used to skim, directly or indirectly, federally insured deposits from a savings and loan".

Worse, he said that the White House tried to obstruct an investigation of Whitewater, causing the officer in charge of the case at the Resolution Trust Corporation to feel so intimidated that she had to request special "whistle-blower" protection. "The independence of the US government's regulatory system has been flagrantly violated in an effort to protect a single American citizen," thundered Leach. "In a nutshell, Whitewater is about the abuse of power."

How far things have come from the Democratic Convention in August 1992 when Clinton swept the nation to its feet with his moral fervour. "We have seen the folks in Washington turn the American ethic on its head," he said. "For too long, those who play by the rules and keep the faith have gotten the shaft. And those who cut corners and cut deals have been rewarded."

It makes you want to cry.


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