A transcript of President Clinton's videotaped testimony for the Tucker/McDougal trial in Little Rock, as shown on May 8, 1996
- Cross-Examination by the Prosecutor, Mr. Jahn (continued), with Introduction of Exhibits 73, 87, 89 and 91:

MR. JAHN: Now, let's just jump ahead. You indicated in 1981 there was a representation made to you by Mr. McDougal that the bank, in and of itself - I mean, the land, in and of itself, was now generating enough income to become self-sufficient. Do you remember that, sir?

MR. CLINTON: I believe, to be specific, Mr. Jahn, I believe that the representation was that enough lots had been sold so that the cash flow on the lots would at least cover the bank notes when they came up.

MR. JAHN: Okay.

MR. CLINTON: And I think that that's - by then, I had already invested some money, I didn't think I would ever get it back because of the changes in the economy, and I was simply relieved to know that the bank note would be able to be paid as it came up. And so, I remember being very relieved about it.

MR. JAHN: Did there come a time, sir, where you were called upon, though, to execute another note, a note that was what has been referred to as the interest refinancing note? Did there come an occasion in which you were required or requested to execute another note to pay for interest payments that had not been made on the initial purchase loan?

MR. CLINTON: Can you refresh my memory, do you have some specific evidence here?

MR. JAHN: Do we have the document, itself?

Counsel, do you want to look at it first? I'm just going to show it to him for memory recollection.

If you would, Mr. President, I'm going to show you only for the purpose of refreshing your recollection, Government's Exhibit 91.

(Clinton reviews document.)

MR. JAHN: Mr. President, have you had a chance, sir, to look at the document?

MR. CLINTON: Yes, I have.

MR. JAHN: Does it refresh your recollection, sir, concerning the date in which a loan was made to refinance the interest on the bank in Flippin's note?

MR. CLINTON: No, it does not.

MR. JAHN: Let me ask you this final question, sir. Is that your signature at the bottom of the document, sir?

MR. CLINTON: Mr. Jahn, as has been pointed out, it is a little smudged, and I can't be sure. It might - it might or might not be, and it might well be my wife's signature there, I just can't tell. I think I ought to point out for the benefit of the Court and the jury that this - that this date is November 1st, 1982, that was just a couple of days before the general election for governor, and that it would be the last thing on my mind to be involved in this. I do not have any recollection of it. But I cannot say for sure that the signatures at the bottom are not mine or Hillary's. I'm confident the others weren't, I'm not so confident on these. It might be mine and it certainly might be hers, I'm just not sure.

MR. JAHN: Okay. Mr. President, if we could, sir, let's move on to the time frame of 1985 and 1986. And at that particular time, I believe you testified that Mr. McDougal had, in fact, moved back into town and had opened a savings and loan within Little Rock; is that correct?

MR. CLINTON: That's correct, sir.

MR. JAHN: Okay. Do you recall at this time, sir, the financial obligations which you and Ms. Clinton had toward the Whitewater Development Corporation's investments and its obligations financial institution - obligations at other financial institutions?

MR. CLINTON: Well, the bank note in Flippin was still outstanding at some level, I don't know that I knew what level, and we may or may not have paid off the loan for - that we took out to pay for the house. I don't remember whether it had been paid off by then or not. It was -

MR. JAHN: Okay. If you would, sir, I'm going to show you what has been first marked for identification as Government's Exhibit 89, and then I'm also going to show you Government's Exhibit 87. Ms. Nance, if you could provide those.

(Clinton reviews document.)

MR. JAHN: Counsel, are we ready?

MR. McDANIEL: Yes.

MR. JAHN: Government's Exhibit 87, sir, I would like to ask you, do you have that before you?

MR. CLINTON: Yes, sir, I do.

MR. JAHN: The signature which appears on the bottom of Government's Exhibit 87, can you identify that, sir, as being your signature?

MR. CLINTON: Yes, it is mine.

MR. JAHN: All right. And can - well, can you tell us as far as the type of document, what is the document itself, sir?

MR. CLINTON: This appears to be a loan extension agreement with the Security Bank of Paragould with the amount extended, $13,800.

MR. JAHN: Did there come an occasion, sir, in which the bank loan that we discussed previously, the Bank of Kingston, later Madison Bank and Trust, did there come an occasion, sir, when that loan was moved out of that financial institution to another financial institution?

MR. CLINTON: Yes, sir.

MR. JAHN: Okay.

MR. CLINTON: It did.

MR. JAHN: And at the time that that was moved, did you execute a note, then, at the other institution?

MR. CLINTON: I believe I did.

MR. JAHN: All right. And that was the Security Bank of Paragould; is that correct?

MR. CLINTON: That's correct, yes, sir.

MR. JAHN: Now, did you make the arrangements as far as that particular note is concerned as far as negotiating for that particular loan?

MR. CLINTON: Mr. Jahn, I honestly don't remember, it was a long time ago. I don't remember.

MR. JAHN: All right. But as far as the loan itself was concerned, it was the loan you made in connection with the Whitewater Development Corporation?

MR. CLINTON: Yes, sir, that's right.

MR. JAHN: Your Honor, we would move the introduction of Government's Exhibit 87.

And if you would, sir, Government's Exhibit 89, do you have that in front of you, as well?

MR. CLINTON: Yes, sir, I do.

MR. JAHN: And we are back to the bank in Flippin; is that correct?

MR. CLINTON: That's correct.

MR. JAHN: Now, this particular document, does it have a date in the upper right-hand corner, sir, as far as the date that the document was executed?

MR. CLINTON: Yes, it says, "November 26th, 1984."

MR. JAHN: And does it have underneath a maturity date as far as how long this note was good for?

MR. CLINTON: December 3rd, 1986.

MR. JAHN: Okay. And as far as the document itself, the borrowers on the left-hand, upper left-hand portion, can you tell us who was the obligors under the document in the upper left-hand corner?

MR. CLINTON: Whitewater Development, Inc., James B. McDougal, Susan H. McDougal, Bill Clinton, Hillary Rodham Clinton.

MR. JAHN: Your Honor, we would move the introduction of Government's Exhibit 89.

Mr. President, if you would, going back to Government's Exhibit 87, can you tell us what the amount was - at the renewal executed on September 30th, 1985, what was the amount of that renewal?

MR. CLINTON: The amount extended was $13,800.

MR. JAHN: Okay. And as far as Government's Exhibit 89, as far as the renewal in November of 1986 due on December 3rd, 1986, what was the loan amount in that particular instance?

MR. CLINTON: $100,121.

MR. JAHN: Okay. And these were both Whitewater Development Corporation obligations; is that correct?

MR. CLINTON: Well -

MR. JAHN: I mean, from your state of mind, from your point of view, these were both Whitewater Development Corporation obligations; is that correct, sir?

MR. CLINTON: They were Whitewater Development obligations if Whitewater Development had the money to pay them. Otherwise, they were our obligations, personally. The four of us were jointly and individually obligated on the big bank note, and I was obligated on the small one.

MR. JAHN: And it was your expectations and hopes and dreams and visions, though, that Whitewater Development Corporation would still be the entity that would be responsible for paying this note; is that correct?

MR. CLINTON: I hoped eventually we could at least break even, that's right.

MR. JAHN: All right. Now, in 1985 and 1986, sir, you still had - I believe you indicated Mr. McDougal had moved back into town. Did you have fairly frequent contact with him during the year 1985, for instance?

MR. CLINTON: I'm not sure. I'm sure I saw him a few times. I don't know how - I hate to use the word "frequent," because I don't know how many times. But I had some contact with him in 1985 over various things.

MR. JAHN: Okay. You talked about your jogging, and if you can, I think it is on the record, but how far was Madison Guaranty Savings and Loan from the mansion at that particular time?

MR. CLINTON: It was less than a mile from the Governor's mansion.

MR. JAHN: All right. And there would be occasions, then, on which you would go out jogging on the streets of Little Rock; isn't that correct?

MR. CLINTON: That's correct.

MR. JAHN: And when you would go jogging on the streets of Little Rock, quite often, unlike today, sir, you had a lot more personal freedom, did you not, as far as being able to move without the necessary requirements of security?

MR. CLINTON: Yes. And particularly if I was downtown in daylight, I would run sometimes on Main Street, that was one of the streets I regularly ran on.

MR. JAHN: Okay. And you were free to run on your own and to go out and run and go by and visit people and talk to people and the like?

MR. CLINTON: That's correct.

MR. JAHN: And did you, in fact, on occasion jog past or jog to Madison Guaranty Savings and Loan?

MR. CLINTON: On occasion, I did jog past it, yes.

MR. JAHN: Okay. And on occasions, did you actually jog to it and go inside and stop and visit with people, sir?

MR. CLINTON: I believe that once or twice I actually went in, yes.

MR. JAHN: Okay. Now, during, again, the year 1985, were there occasions, sir, in which you, as governor of the State of Arkansas, would seek out advice from Mr. McDougal?

MR. CLINTON: It's possible. Could you refresh my memory? Have you got a specific issue you want to raise?

MR. JAHN: Yes, sir, I've got one. If you would, I want to -

MR. JAHN: Could we have Government's Exhibit 73?

May I approach the witness, Your Honor?

THE COURT: You may.

MR. JAHN: I want to show you what has been marked for identification purposes as Government's Exhibit 73.

(Clinton reviews document.)

MR. JAHN: Mr. President, I was showing you Government's Exhibit 73. And perhaps to speed things up a little bit, sir, I will try a little leading questions. That's a memo directed to you dated February 7th, 1985; is that correct, sir?

MR. CLINTON: That's what it says, yes, sir.

MR. JAHN: All right. And it is from Jim McDougal; is that correct?

MR. CLINTON: Yes, it is all typed, there is no signatures on it, but it is typed, it says, "To Governor Bill Clinton from Jim McDougal."

MR. JAHN: Okay. And it is at the bottom left-hand side, sir, as far as the slug, I believe is what they call it, the initials, it says, JRM/SS on the bottom left-hand corner; is that correct?

MR. CLINTON: That's correct, sir.

MR. JAHN: Your Honor, we would move the introduction of Government's Exhibit 73.

THE COURT: All right. Received.

MR. JAHN: Mr. President, in Government's Exhibit 73, Mr. McDougal is writing to you concerning a request from someone in your office, is that correct, someone named Kathy?

MR. CLINTON: Yes, sir.

MR. JAHN: And who is Kathy, sir?

MR. CLINTON: I'm not sure, but it could be Kathy McNatt, it probably is someone who worked in the - in the appointments section of the governor's office.

MR. JAHN: All right. And in it, it talks about recommendations for two people to fill the vacancies on the State Savings and Loan Board.

MR. CLINTON: Yes.

MR. JAHN: Can you tell the jury, sir, what is the State Savings and Loan Board?

MR. CLINTON: The State Savings and Loan Board is a board - let me say, Arkansas has a lot of these boards, hundreds of them. The legislature at one point in history created a board to advise the person who is in charge of overseeing the state chartered savings and loan. The board, by statute, has to be comprised of people who, themselves, are in the savings and loan business, except there is a consumer position by law and there might or might not be a position for a senior citizen, I just don't remember. But otherwise, the vast majority of the board members have to come out of the state S&Ls, and I think at the time there were just a handful of them left in Arkansas.

MR. JAHN: And were you aware, sir, that Madison Guaranty Savings and Loan was, in fact, a state chartered savings and loan?

MR. CLINTON: Yes, sir, I was.

MR. JAHN: And if you would, sir, second paragraph, in the second paragraph, Mr. McDougal recommends John Latham, who was Chairman of the Board of Madison Guaranty Savings and Loan. Did you know John Latham, sir?

MR. CLINTON: I did.

MR. JAHN: And did you, in fact, appoint Mr. Latham to the Savings and Loan Board based upon Mr. McDougal's recommendation?

MR. CLINTON: Well, first of all, Mr. Jahn, let me say, I'm not sure I ever saw this memo, but we did appoint Mr. Latham, and Mr. McDougal, I believe, did recommend him, and I wouldn't be surprised if he wasn't the only person that wanted to be on the board. It was hard, we had to go scare up people to be on some of these boards by the mid-1980s. So I believe he was appointed.

MR. JAHN: Okay. But you are saying you're not sure you ever saw the memo. If you saw the memo, though, would you follow Mr. McDougal's recommendation?

MR. CLINTON: Well, I might have, might have done it if I hadn't seen it.

MR. JAHN: Okay.

MR. CLINTON: But in this case, I'm not sure that - as I've explained to you, this was a board with relatively little power, that had - the membership requirements included the requirement that people would be involved in the S&L business. We didn't have many state savings and loans left by then, and I wouldn't be surprised if Mr. Latham wasn't the only person that asked to be on this board.

MR. JAHN: Okay. It had limited power, you indicated, but at the same time it did have some power, did it not, as far as branch regulations?

MR. CLINTON: I expect it did.

MR. JAHN: For instance, within the savings and loan institution?

MR. CLINTON: Sure. I believe that's right.

MR. JAHN: And were you familiar, sir, with a limitation that was placed upon savings and loans, or state chartered savings and loans concerning their investment in private businesses or their investment in service corporations limiting their investment to three percent?

MR. CLINTON: I don't believe I was.

MR. JAHN: Okay. Do you know whether or not Mr. McDougal was aware of any such limitation?

MR. CLINTON: I don't know.

MR. JAHN: Do you know whether or not Mr. McDougal was having any difficulty within his institution concerning any such limitation?

MR. CLINTON: I do not.

MR. JAHN: You indicated you know John Latham. Did you know Greg Young at the Madison Guaranty Savings and Loan?

MR. CLINTON: I don't remember him, no, sir.

MR. JAHN: Okay. If you would, sir, can you, for the benefit of the jury, read the last paragraph on Government's Exhibit 73, the memo from Mr. McDougal to yourself.

MR. CLINTON: It says, "Bill, we are down to only about 15 state chartered savings and loan institutions, and I'm about the only one around who has any interest in this board."

MR. JAHN: Now, as far as a memo from Mr. McDougal where it contains a personal sentiment such as this, "Bill," do you feel, sir, that if you probably would have received a memo such as that, your staff probably would have brought that to your attention?

MR. CLINTON: I just don't know, sir. There is no check here. My mail was opened by other people. It is quite possible that I would send an appointment form, a recommendation, with just some note saying, "Jim McDougal recommended him." I just don't know what happened. But I certainly can't tell from this memo that I ever saw it, because when I saw things, I nearly always checked where my name was.


BACK: Cross-Examination by the Prosecutor, Ray Jahn (continued), with introduction of Exhibit 94

FORWARD: Cross-Examination by the Prosecutor, Ray Jahn (continued), with introduction of Exhibits 76 and 83