MR. JAHN: All right. Now, you, in exchange, or after having this meeting with Mr. McDougal, you personally, sir, set up a meeting, then, with representatives from the State Health Department, did you not, sir?
MR. CLINTON: Well, that's - what I did was, I first had my staff look into it, give me a report, and then they arranged to have this meeting set up.
MR. JAHN: Sir, back to the question. You personally, though, took a role in setting up that meeting; is that correct?
MR. CLINTON: I don't believe I called the Director of the Department of Health to meet with him, but I - it's conceivable, but I don't believe I did.
MR. JAHN: Do you know Tom Butler, sir?
MR. CLINTON: I do know Tom Butler.
MR. JAHN: Mr. President, you called Tom Butler and you specifically asked him, if he would, to come to the meeting, sir, and at that particular time, you told Mr. Butler that you were doing this because Mr. McDougal is a supporter. Do you remember that, sir?
MR. CLINTON: Have you got some documentation that would help me with that? That was a long time ago.
MR. JAHN: Sure. I'm going to show you a report of interview with Mr. Butler, if you would, sir, dated March 8th, 1995.
MR. COLLINS: May we have a copy of that?
MR. JAHN: That's the only copy I've got.
MR. COLLINS: Will we get one?
MR. JAHN: Sure.
MR. JAHN: And I highlighted the particular portions, sir.
MR. KENDALL (attorney for Bill Clinton): May the witness be allowed to read the entire document?
MR. JAHN: Sure. Whatever. I just highlighted to try to speed things up.
(Clinton reviews document.)
MR. JAHN: Have you finished it, sir?
MR. CLINTON: Almost.
MR. JAHN: OK.
MR. CLINTON: I have now read the whole thing.
MR. JAHN: OK. You personally set up that meeting, or took a role in setting up that meeting with a conversation with Mr. Butler, did you not, sir?
MR. CLINTON: Well, according to this interview. First, let's talk about this. You have given me an interview done by the Office of Independent Counsel with Tom Butler, who was the number two person at the Department of Health when I was governor, and that was done in - last month, on March the 9th, in 1995. And Mr. Butler says that I called him and asked him to give Mr. McDougal an interview about his septic tank problems, and I stated to him that he had been a supporter of mine for years and had never before asked for anything from the state. And that might well have happened.
MR. JAHN: OK.
MR. CLINTON: I don't dispute that. Let me just say this, I remember very well the meeting that was held in the governor's office about this.
MR. JAHN: OK. So, you don't dispute, then, that you could have even - because of your respect for Mr. McDougal and your relationship with Mr. McDougal, you could have even personally undertaken to set up that particular meeting; is that correct?
MR. CLINTON: Yes, sir.
MR. JAHN: OK. And Mr. Butler, in fact, here - I want to show you now Government's Exhibit 93. Do you see Government's Exhibit 93, sir?
MR. CLINTON: Yes, sir.
MR. JAHN: In order to speed things up, I'm going to do a little leading of you, if I could. That's your schedule for the date of March 4th, 1986; is that correct?
MR. CLINTON: Yes, sir.
MR. JAHN: And it reflects that you did, in fact, have such a meeting with Mr. McDougal and Mr. Butler at 2 o'clock on that day; is that correct?
MR. CLINTON: Yes, sir.
MR. JAHN: Your Honor, we would move the introduction of Government's Exhibit 93.
THE COURT: All right. Received.
MR. JAHN: At that meeting, sir, did Mr. McDougal tell you that on that very day, or effective that very day, he had signed a contract to purchase 200 acres of land from International Paper Corporation, sir?
MR. CLINTON: No, sir, he did not. He was - as this report that you have given me points out and refreshes my memory, that day all he could talk about, according to this report that you have given me, and it is certainly consistent with my memory, was how upset he was about the Health Department on the land there. He never said anything about any purchase of the land.
MR. JAHN: Did he tell you, sir, that he had made that purchase - I'm sorry, 800 acres, I have been corrected - of 800 acres in the name of Whitewater Development Corporation?
MR. CLINTON: Absolutely he didn't. As a matter of fact, we were never even alone there. I had a big meeting there because he wanted a hearing from the Health Department, and he didn't say anything about any of that. Not - he didn't ever say anything about it, and he certainly didn't say anything that day, absolutely not. This was a meeting about, just as Tom Butler reports here in this document you have given me, this was a meeting about the problems he was having getting septic tanks approved.
MR. JAHN: Had you, sir, by March the 4th, 1986, been informed by Mr. McDougal of his sale of other assets of Whitewater Development; that is, that at that day, on that date, Whitewater Development had no other real estate assets for sale? Had he ever told you about that transaction we talked about earlier, the one back in June of 1985?
MR. CLINTON: First of all, Mr. Jahn, those are two different things. The answer to the second question is, no, I don't believe he ever told me about it. I don't believe I ever knew that. The answer to the first question, I don't think is quite accurate. If the lots were sold on escrow contracts, then the deed was withheld and they had to make the payments to Whitewater and then Whitewater would use the payments to pay off the bank notes. So, I don't think - the fact that the land was sold, it was a good thing for Whitewater, not a bad thing, sir.
MR. JAHN: But those were the loans that you were hoping would break you even. As far as making any profit, there were no assets in March of 1986 to make your profit, were there, sir?
MR. CLINTON: Well, I don't know the answer to that. That depends on - I don't know how much was outstanding on all those lots that had been sold. I don't know if they had paid it all off if it would have been enough to pay the bank notes off and more besides. I don't have a clue about that. I can't answer that question.
MR. JAHN: In March of 1986, sir, the only way Whitewater Development Corporation could make money, the money that Mr. McDougal promised you, the profit, was to acquire new assets and make a profit on those assets; isn't that a fact, sir?
MR. CLINTON: Sir, I would have to say no for two reasons. Number one is - no and I don't know. Number one, Mr. McDougal never promised me any money. He asked me if I wanted to take a risk with him, a business venture, an investment. There is no such thing in the free enterprise system as a risk-free investment. We took a chance, we made what I thought was a prudent investment, and it didn't make money. I'm sorry about that, but he didn't violate any promise to me on that.
Number two, whether there was any way to make money or not depends upon a question that I don't know the answer to, which is, what was the total outstanding due on all the contracts that had been sold as of that time, and was that total sufficient to cover the bank note and leave something over besides? I don't know the answer to that, and I don't know that - if you do, I would be glad to hear it, but I don't have a clue whether that is true or not.
MR. JAHN: And you don't know the answer because Mr. McDougal didn't tell you, he didn't sit down and talk to you concerning whether or not there was enough money or enough assets left to make a profit for Whitewater Development Corporation; is that your testimony, sir?
MR. CLINTON: I was a passive investor, he was managing the land, that is my testimony.
MR. JAHN: Exactly. He was managing the land, he was making the decisions; is that correct?
MR. CLINTON: That is correct, he was making the decisions.
MR. JAHN: And it is your testimony then that he never once told you about any great hopes or expectations or visions that he had for property that he was purchasing from International Paper Corporation?
MR. CLINTON: Never once, he never discussed International Paper.
MR. JAHN: Did he ever mention the name "Lorance Heights" to you, sir?
MR. CLINTON: I don't believe so. I have no recollection of that.
MR. JAHN: Did he ever mention the name "Master Marketing" to you, sir?
MR. CLINTON: No, sir.
MR. JAHN: Did he ever ask you to make any more additional contributions to Whitewater Development Corporation in the spring of 1986?
MR. CLINTON: I don't believe he did.
MR. JAHN: Did Mr. McDougal make any statements to you concerning the development of roads on the Lorance Heights property, sir?
MR. CLINTON: No.
MR. JAHN: Did Ms. McDougal make any statements to you concerning the development of roads on the Lorance Heights property?
MR. CLINTON: No.
MR. JAHN: Do you know R.D. Randolph?
MR. CLINTON: I do.
MR. JAHN: OK. Did he ever talk to you about hiring R.D. Randolph to do work out at the Lorance Heights property, sir?
MR. CLINTON: I knew that R.D. Randolph worked with Jim McDougal. I don't believe I knew what he did.
MR. JAHN: I asked you about organizations that you had not heard about. Did you ever hear any reference to a company called Master Marketing, sir?
MR. CLINTON: No.
MR. JAHN: Did you ever discuss a Master Marketing with Jim McDougal?
MR. CLINTON: No.
MR. JAHN: Did you ever discuss Master Marketing with Susan McDougal?
MR. CLINTON: No.
MR. JAHN: On April the 3rd, 1986, Master Marketing received $300,000 from David Hale's corporation, Capital Management Services. Were you told in advance, sir, that such a loan was going to be made?
MR. CLINTON: No.
MR. JAHN: Were you told after such a loan was made that it had been made?
MR. CLINTON: No.
MR. JAHN: Were you told as to how the proceeds of that loan were used?
MR. CLINTON: No, sir.
MR. JAHN: Were you aware, sir, that $25,000 of the proceeds of that loan was used for the down payment in the name of Whitewater Development Corporation of the International Paper Company property?
MR. CLINTON: I was not aware of that.
MR. JAHN: Were you aware, sir, of the need as to when the closing date was to be, as far as the purchase of that particular property?
MR. CLINTON: No, sir, I wasn't.
MR. JAHN: Did you have contact at all, during the year 1986, with either Mr. or Ms. McDougal concerning Whitewater Development Corporation, to your recollection, sir?
MR. CLINTON: Yes, I believe I did, along toward the end of the year.
MR. JAHN: All right. What happened along toward the end of the year, sir, in reference to the Whitewater Development Corporation and Mr. and Ms. McDougal? Who was it, first of all, that contacted you?
MR. CLINTON: I believe it was Mr. McDougal, along toward the end of the year.
MR. JAHN: OK. And he contacted you, did he not, sir, and he wanted you and Ms. Clinton to basically abandon any interest in the property; is that correct - in the corporation; is that correct?
MR. CLINTON: My recollection is he called me and he said to me, "This thing has lost money. We've put a lot of money into it. It's never going to run a profit. I'd like for you to sign your stock over to me and we could use it for," I think, for tax purposes or something. I believe that's the request he made.
MR. JAHN: And what was your response, sir?
MR. CLINTON: Well, I discussed it with Hillary, and in the end we decided not to do it.
MR. JAHN: OK. When he made that request of you, sir, did he tell you that there was, in fact, 800 acres of land in the name of Whitewater Development Corporation?
MR. CLINTON: What 800 acres? You mean, different from the Whitewater land?
MR. JAHN: Yes, sir.
MR. CLINTON: I don't believe he did, no, sir.
MR. JAHN: Did he tell you about any great hopes or expectations - at that time when he asked you to abandon your interest in Whitewater Development Corporation, did he tell you about any great hopes or expectations he had for the development of that property?
MR. CLINTON: Mr. Jahn, my recollection is - and I believe he also wrote me a letter about this time - my recollection is that I had a conversation with him and I had a letter. And my recollection is that what he said was there were - Whitewater had lost money, it still lost money, there were losses on Whitewater that he had sustained, that if he had all the - if he were the sole stockholder, if he and Susan owned all the stock, that he could get some tax advantages from those losses, which means by definition he had some gains somewhere. But I had no idea what those gains were or what the tax considerations were. He didn't discuss it with me, and I didn't ask him.
MR. JAHN: So, he didn't tell you anything at all about the assets that were then in existence of Whitewater Development Corporation?
MR. CLINTON: He did not.
FORWARD: Cross-Examination by the Prosecutor, Ray Jahn (continued), with introduction of Exhibit 80