Over the years, the company received infusions of cash from the S&L as well as from a small business investment corporation which diverted, allegedly at the Governor's request, federally-guaranteed funds from a program designed for socially and economically disadvantaged people to the Governor's partners and thence, in part, to Whitewater.
Some of these funds were used to pay off personal and campaign liabilities of the Governor; some to purchase a tract of land from a company to which the State had just given a significant tax break. Whitewater records have apparently been largely lost. A review of the numerous land transactions, however, raises questions of what happened to the money that came into the company and a review of the President's tax records raises questions about tax deductions that were taken and income that may not have been declared.
Under the governorship of Bill Clinton, Jim McDougal was named a Gubernatorial aide to serve principally liaison to the Economic Development, Commerce, and Highway and Transportation Departments; the first lady of Arkansas was hired to represent the S&L before State regulators; the president of the S&L was placed on the State S&L commission; an attorney who represented the S&L was named the State S&L regulator; the S&L received rent from State agencies; Whitewater had roads constructed using a State agency program and State funds; and the S&L was allowed to operate, despite being insolvent for an extended period, providing millions in loans and investment dollars to insiders and the Arkansas political establishment.
Under the governorship of Bill Clinton, the S&L was allowed to grow 25-fold until Federal regulators forced its closing, at which time taxpayers picked up the tab for losses that amounted to approximately 50 percent of the institutions's deposit base.
Under the governorship of Bill Clinton, the total number of State-chartered savings associations declined dramatically. Over the period December 1979 to December 1992, the number of stock State-chartered thrifts in Arkansas declined from the 33, with assets of $961,002,000 to 3, with assets of $146,072,000. Viewed another way, the amount of assets available to support home mortgage lending for the people of Arkansas declined.
The story of Whitewater is thus part and parcel the story of the greatest domestic policy mistake of the century - the quarter-trillion dollar S&L debacle. It is the story of a company which in one sense was a simple real estate development venture, but in another was a vehicle used to spirit federally insured deposits from an S&L and compromise a significant political figure.
This document is an unofficial version of the Congressional Record. The printed Congressional Record produced by the Government Printing Office is the only official version.