Page 40


“Arkansas Project,” from page 7 the sitting Arkansas security commissioner and replaced him with a political ally to grant special favors to McDougal’s thrift. Actually, Clinton’s appointee had taken steps to shut down McDougal’s thrift. The official who was allegedly dumped a Republican who had simply resigned to enter private law practice called the Times story “unmitigated horseshit.” Gerth’s story was so poorly written and edited, and so confusing, that it had little immediate impact on whatever might be called the public’s mind. But it was the small noise that dislodged what would become the “Whitewater Scandal” avalanche. The Clinton-hating cabal loved it, because it gave them a way to cry, “Cover-Up!” Enter L. Jean Lewis. Lewis, who had grown up in a military family in Texas and proudly identified herself as a conservative Republican, was hired as an investigator for the federal Resolution Trust Corporation, although she was neither a lawyer nor an accountant, and had no training in law enforcement. The R.T.C. had been set up to hunt down crooks who in the Eighties had caused hundreds of savings and loan organizations to collapse, costing taxpayers an estimated $500 billion. From her office in Tulsa, Lewis sifted through the records of failed Arkansas thrifts looking for evidence of criminal fraud. At the top of her list of suspects were two thrifts that together had cost taxpayers $1.5 billion. At the bottom of her list and properly so was James McDougal’s Madison Guaranty, the failure of which had cost taxpayers one-twentieth as much. That was until Lewis read Gerth’s Times story, when her priorities abruptly and radically altered. Although neither the Whitewater operation nor the Clintons had ever borrowed money from McDougal’s thrift, it now jumped to the top of her list, and she made a criminal referral of tiny Madison Guaranty, naming not only James and Susan McDougal as suspected felons but also every contributor to a 1985 Clinton fundraising event held at Madison Guaranty. Bill and Hillary Clinton were cited as “possible witnesses,” as were former U.S. Senator J. William Fulbright and several other top Democrats. Lewis filed her criminal referral just two months before the 1992 presidential election. The timing was so embarrassingly obvious that it pissed off the Little Rock F.B.I. office and the U.S. attorney. They told their bosses in D.C. that it looked like Lewis was playing politics, and that in their opinion there was “absolutely no factual basis to suggest criminal activity on the part of any of the individuals listed as witnesses,” including the Clintons. But later Lewis tried again, this time charging that deposits in McDougal’s S&L had been illegally diverted to Clinton’s campaign fund. When, once again, her charges fell into a void, friendly reporters, who had been getting loads of leaks from her, began to imply that she was the victim of a bureaucratic cover-up. The cry of Cover-Up, once sounded, reverberates for a long time, and it made Lewis something of a heroine to the right wing. She was duly called to testify at the Senate’s Whitewater hearings, run by Republican Senator Alfonse D’Amato \(also known as “Senator Shakedown,” because of his own ways of began reading the Justice Department’s low opinion of her grasp of the law, she began to tremble, and then fainted dead away. While thousands watching C-SPAN saw her swoon, the Times and Post reporters were apparently looking elsewhere, because neither paper reported it, nor mentioned the Justice Department’s stern judgment. 16; THE TEXAS Let us pause for a moment, to speak once more about the conduct of the press during this period. Not all of the reporters were unfair. But it is certainly true, as the Times’ Anthony Lewis wrote: “On Whitewater, the press too often seems an eager accomplice of the accusers…. Some of the coverage of Whitewater reads as if the reporters or editors were committed to finding something wrong as if they had an investment in the story.” Nowhere was this biased investment more evident than in the press treatment of the “Pillsbury Report.” The Resolution Trust San Francisco law firm of Pillsbury, Madison & Sutro, to investigate thoroughly the allegations made against the Clintons concerning Whitewater. Bear in mind, Pillsbury is a conservative, establishment law firm, right down to its roots, and the White House had good reason to fear it would undertake a partisan investigation. Instead, write Conason and Lyons, “Based on the Clintons’ sworn interrogatories, interviews with 45 other witnesses, and some 200,000 documents, the report concluded that the president and first lady had told the truth about their Whitewater investment,” and that, “There is no basis to charge the Clintons with any kind of primary liability for fraud or intentional misconduct.” Here was major, major development. It was the first long-term, meticulous study several volumes plus appendixes of everything relating to Whitewater, and it had been performed by a law firm of unmatched integrity. So how did the press receive it? The Wall Street Journal was a beautiful exception: though the Journal’s editorial page was a servile conduit for all the scurrilous anti-Clinton gossip, its reporters were straight, and they gave the Pillsbury Report full coverage. The Washington Post, on the other hand, buried the report in a brief mention inside a story on another topic; The New York Times waited two weeks before mentioning it al all, and then did so sketchy summation on page twelve. “The major television networks,” add the authors, “predictably followed the Times and the Post. For the great majority of the Washington press corps, and thus for their national audience, the Pillsbury Report and the facts and conclusions its authors had painstakingly assembled didn’t exist.” The press was more eager to write about mythical cover-ups. It would have yet another chance to do so, and this time the accusation would come from a source much more colorful than L. Jean Lewis. It was a source completely controlled and welcomed as a veritable godsend by leaders of the Arkansas Project. Meet David Hale, another of the Arkansas fraternity of master con men. FROM HALE TO STARR Hale was an apparent pillar of the Little Rock community, a former national president of the Jaycees, and a devout Baptist. But he was an even more devout swindler \(he even swindled his mistress’ he also operated an investment company, which made loans insured by the U.S. Small Business Administration. Hale loaned millions of dollars to more than a dozen dummy companies he secretly owned. One by one, he would kill off the companies and pocket the government’s insurance. \(Hale wasn’t the brightest crook; he listed all 1993, Hale was arrested and charged with cheating the S.B.A. out of JULY 21, 2000