Whitewater Rafting
by Doug Ireland
Blood Sport: The President and His Adversaries.
By James Stewart.
Simon & Schuster. 479 pp. $25.
One of the central themes in the campaign that brought Bill and Hillary Clinton to the White House was, as the candidate proclaimed in a high-profile speech at the Wharton School, to "bring an end to the something-for-nothing ethic of the 1980s." Hillary, too, echoed these neo-populist flailings against the Decade of Greed, moralizing with fervor that "the 1980s were about acquiring -- acquiring wealth, power, privilege."
In the light of James Stewart's new book, Hillary's statement seems ironically autobiographical. The deal to develop the piece of land in the Ozarks that became known as Whitewater, in which the Clintons became partners with their friends Jim and Susan McDougal, was clearly a get-rich-quick scheme. Hillary acknowledged as much in a 1981 letter to Jim McDougal: "If Reagonomics works at all, Whitewater could become the western hemisphere's mecca." But just one year later, in the first of a series of federal investigations of McDougal-owned banks, the Federal Deposit Insurance Corporation characterized a loan from one of the banks to the Whitewater partnership as "unsound."
Blood Sport: The President and His Adversaries begins with that failed land deal, and goes on to encompass the whole range of scandals swirling around the Clintons: Hillary's role in representing Madison Guaranty (the failed McDougal S&L), her windfall commodities trading, Vince Foster's suicide, White House back-channel meddlings in federal investigations of these and other matters, Travelgate, Troopergate and more. In addition, chunks of the book examine media coverage of these events and how certain conservative political operatives tried to encourage and influence that coverage.
Stewart is an able and energetic financial reporter. With two assistants he conducted hundreds of interviews. But no list is provided of those interviewed, and while there are a few asterisked notes at the bottom of some pages, there are no real footnotes. Most of the book is not explicitly sourced. In a brief afterword, Stewart explains his technique:
Many of the interviews were conducted on a not-for-quotation basis, but with the understanding that the text would reflect the states of mind and conversations recalled by those being interviewed. States of mind come from the person interviewed, either directly, in an interview, or from sworn testimony or notes taken by lawyers. Quotations come from the speaker, someone who heard the remark, or from transcripts and notes of conversations.
While Stewart mashes all this into a good read, filled with a ton of detail and insider gossip of the sort the French call la petite histoire, the careful reader cannot know how to evaluate much of the material. For example, a sworn statement given under penalty of perjury obviously has more weight than an interview with a journalist, let alone a lawyer's notes.
This is all the more confusing because Stewart has chosen to recount various parts of the chronology solely through the eyes of different participants. Given the studied neutrality of Stewart's reportorial tone -- dare one call it value-free? -- and the gentility with which he treats those who talked to him, the result is often misleading.
Take the self-serving way in which David Gergen and Roger Altman, two of the most assiduous climbers of the greasy pole ever to hit Washington, are allowed to portray themselves. In violation of the strict confidentiality of Resolution Trust Corporation investigations, in September 1993 Altman was first briefed by Treasury counsel Jean Hanson on the nine criminal referrals arising out of its investigation of Madison Guaranty -- referrals in which the Clintons were referred to as, at minimum, "potential witnesses." Stewart writes flatly that "the conversation made little impression on Altman...[who'd] never given Madison, McDougal, or the Whitewater affair much thought." Altman was a skilled and hungry inside player who held Treasury's number-two job and was slated to take over the department on Lloyd Bentsen's retirement. Yet we are supposed to believe that criminal referrals involving the President who could give him the Cabinet post he coveted "made little impression" on him -- especially when the R.T.C. read the referrals as hinting that, with a little more work, the Clintons could be "something more" than simple witnesses. Altman, of course, was later forced to resign for having lied to Congress about his contacts with the White House on these very same criminal referrals. As for that relentless self-promoter David Gergen, Stewart writes that he joined the Clinton White House because he "didn't think a failed presidency was in the country's interest." Gergen might be able to get away with this self-portrayal on The NewsHour With Jim Lehrer, but even though politics is not his forte, Stewart should know better than to leave his readers with such an unchallenged Boy Scout impression.
Anyone with the fortitude to have monitored all the Congressional hearings into Whitewater and Madison Guaranty on C-Span will find little that is surprising in Blood Sport, although it is useful to have the material in one place. One of the book's most satisfactory sections deals with Hillary's commodities deals. Stewart explains clearly how Hillary benefited from insider trading on her behalf by Tyson Foods counsel Jim Blair. For once, Stewart expresses a firm opinion about his findings: "Blair and Hillary Clinton were beneficiaries of a scheme that, on the face of it, came precariously close to collusion to manipulate the market."
Another consequential part of the book examines Castle Grande, a criminal scheme that got the McDougals indicted. The Rose Law Firm billing records that mysteriously appeared in the White House residence last December -- two years after they had been subpoenaed -- flatly contradict Hillary's claims that she did no work on this real estate Ponzi scheme. Hillary's latest explanation for her denial is that she knew the property under the name I.D.C. (Industrial Development Company), its previous owner. But, according to Stewart, "nearly everyone involved appears to have routinely referred to the entire tract as Castle Grande."
One of the book's more fascinating claims comes from Susan McDougal, who says she made repeated attempts to get the Clintons to sell their share of Whitewater back to the McDougals. At one point, the McDougals got Bill to agree, but when Susan contacted Hillary about the necessary paperwork, Hillary refused.
[Susan told Hillary,] "Jim says you're going to get out of Whitewater. Jim talked to Bill. I know you don't want this to become a campaign issue. This is strictly for your and Bill's protection. You and Bill just sign it -- ""No!" Hillary angrily interrupted. Looking intently at Susan, she rose and leaned over her desk. "Jim told me that this was going to pay for college for Chelsea. I still expect it to do that!"
Whether or not one believes this re-created conversation happened depends on whether or not one believes the indicted Susan McDougal. Stewart accepts her version. But there is another plausible explanation for Hillary's stubborn refusal to let go. In 1986, when this conversation supposedly took place, Bill Clinton was cruising to an easy victory for a new four-year term as governor, a victory that was supposed to lay the groundwork for a presidential campaign. (Indeed, Clinton almost announced his presidential candidacy in 1987 but backed down at the last minute.) If the Clintons had gotten out of Whitewater then, they would have lost control over the Whitewater documents, including financial statements that would have revealed Hillary's commodities trading windfall, itself a political liability.
Also new is Stewart's unearthing of the Clintons' financial statement provided to the 1st Ozark Bank of Flippin, Arkansas, in 1985, in furtherance of a renewal of a loan to the Whitewater partnership. "Under assets, it lists cash and securities of $130,000," Stewart writes,
which, if accurate, suggests the Clintons were better off financially than Hillary's oft-cited concerns about money and paying for Chelsea's education would suggest. The form also lists "accounts, loans, notes receivable" of $100,000 and real estate of $100,000. Whitewater isn't listed by name, though it appears to represent the only accounts receivable and real estate the couple owned at the time. If that is the case, the statement values their half interest in Whitewater at a ludicrously high $200,000.
As Stewart points out, "it is a crime to submit a false financial disclosure statement."
Blood Sport revisits Troopergate, in which a squad of Arkansas state troopers who had served as Bill Clinton's bodyguard-gofers in Little Rock decided to disclose how the then-governor used them to arrange and conceal his extramarital affairs. What raised the story from the tawdry to the political were their assertions that President Clinton had offered them federal jobs to keep silent, in both a series of phone calls from Clinton to the troopers and through their former supervisor, whom Clinton had already appointed to a federal job. Troopergate never really developed "legs" as a major media story because it first broke in the right-wing American Spectator. We learn from Stewart that the Los Angeles Times had the story before the Spectator, but the paper's editor, Shelby Coffey, held it up until after the monthly scooped the daily. Coffey's actions so angered veteran investigative reporter Douglas Frantz that he eventually quit the paper, and is now with The New York Times. Stewart says he found the troopers "scrupulously accurate."
This was hardly the only instance of Clinton-coddling by media decision-makers. When New York Timesman Jeff Gerth -- who broke the original Whitewater story -- produced an account detailing indicted judge David Hale's allegations that Bill Clinton had pressured him to make an illegal $300,000 loan of Small Business Administration funds to Susan McDougal, the paper's executive editor, Max Frankel, killed the story. The loan was finally made public by The Washington Post, where Michael Isikoff showed how some of the money went into Whitewater's coffers.
Stewart also probes the role played in breaking the Troopergate and Paula Jones stories by Cliff Jackson, Bill's Oxford classmate and a prominent Arkansas Republican, and by Citizens United, the ultraconservative PAC whose chairman, Floyd Brown, was responsible for the 1988 Willie Horton ads. Page after page is devoted to the activities of Citizens United's David Bossie, who has since become a bête noire for Democratic senators on the special committee investigating Whitewater. (Bossie is now on committee member Lauch Faircloth's personal staff, and Citizens United recently sent out a fundraising letter claiming "their top investigator" was "directing" the Senate Whitewater probe, a palpably false statement.)
As interesting as the misadventures of Messrs. Gerth and Frantz are to us media critics of what Noam Chomsky calls the "business press," and as instructive as the portraits of Messrs. Jackson and Bossie may be on symbiotic relationships between incautious reporters and their sources, these are for the most part distractions from understanding what the Clintons and their cohorts did or did not do.
By comparison, the work of the Congressional investigating committees gets short shrift, though much of what we know about the Clinton scandals became public through it. Important aspects of White House stonewalling, some of them more than arguably criminal, go unexplored or are reduced to a couple of sentences. There is nothing, for example, about the dozens of phone calls between Hillary, her chief of staff, Maggie Williams, and her political Doberman, Susan Thomases, in the thirty-six hours after Vince Foster's suicide -- calls that are at the heart of a cover-up of the handling of documents in Foster's office, and which have brought the First Lady's closest colleagues under investigation for perjury. There has been both high drama and low farce in the hearings -- for example, when R.T.C. lawyer April Breslaw claimed she couldn't recognize her own voice on a tape recording secretly made by L. Jean Lewis, the R.T.C. investigator who drew up the nine criminal referrals. Stewart and his associates interviewed many bankers, yet the illegal funneling of cash to the 1990 Clinton campaign through his closest confidant, Bruce Lindsey, is hardly mentioned. Untouched are the goings-on at Mena airport and the possibility of laundering campaign cash and drug money through manipulation of Arkansas bonds.
Stewart was clearly under pressure from his publishers to get this book finished in time for the election, and the heavy promotion they've arranged has already propelled it to the top of the best-seller lists. But the book is as much a prisoner of its narrative form and its author's centrist politics as it is of an inflexible deadline. Even with its Woodwardian methodological flaws, however, Blood Sport paints a damning portrait of the Clintons -- especially Hillary. In his epilogue, summing up what he found, Stewart writes:
For reasons that seem rooted in their personalities...the Clintons seized what seemed to be opportunities to make easy money, even when that meant accepting favors or special treatment from people in businesses regulated by the state.... The Rose firm's and Hillary's work for Madison, especially their involvement in the dubious Castle Grande transactions, raises serious questions of propriety..... Their handling of the Whitewater investment verges on reckless.... Surely the Clintons could indulge in such a laissez-faire approach to what was their single largest financial asset only because they expected others to take care of them because of their power and prestige as the governor and his wife.
However, Blood Sport is not the definitive book on Whitewater many had hoped for; if, as the cliché has it, journalism is the rough first draft of history, we'll all just have to wait for the second.
Doug Ireland has written frequently about Whitewater for The Village Voice, The Nation and other publications.
