Stop Hillary? Not With These Mistakes (Or The Wisdom Of Dick Morris)

Stop Hillary? Not With These Mistakes (Or The Wisdom Of Dick Morris)

Expectations that Hillary Rodham Clinton will run for president in 2016 have, predictably enough, revived a variety of attacks promoted by her political adversaries over the past two decades – in particular, the story of the $50 million prosecutorial fiasco known as “Whitewater.” America Rising, the Republican opposition research SuperPAC, has announced already that it plans to inform voters about the “Clinton scandals” of the 1990s, just as the right-wing propaganda machine did then. And they’re already enjoying assistance from certain thinkers on the left who consider the former Secretary of State too moderate politically, notably in a current Harper’s magazine cover essay headlined “STOP HILLARY!”

Assuming that Hillary Clinton indeed runs for president, I expect to write and say more as the 2016 campaign unfolds.  For now, however, my friend and co-author Gene Lyons and I believe it is worth correcting the flagrant errors and misrepresentations set down by Doug Henwood, author of the Harper’s article. (Clinton’s supporters have posted a painstaking rebuttal of Henwood’s dismissive assessment of her career in the U.S. Senate and the State Department.)

While conceding that Whitewater was never quite the “diabolical conspiracy” imagined by Republicans, Henwood insists “it was not nothing” (his emphasis). Yet he never says precisely what he thinks it was, except to imply that it demonstrates Hillary’s bad character and personal dishonesty. With that mindset, the actual history of the ill-fated real-estate investment eludes him again and again.

Henwood grudgingly acknowledges that the Whitewater investment undertaken by the Clintons with James McDougal — who later acquired a small savings-and-loan institution called Madison Guaranty — “seems to have” lost money for them. But while admitting that they were “never convicted of any criminal behavior,” he neglects to mention that they were never even indicted, and that the Resolution Trust Corporation’s three-volume report on Madison Guaranty Savings & Loan – written by a Republican lawyer who had previously been fired as United States Attorney by Bill Clinton — fully exonerated them both on all aspects of the probe.

Instead, he complains that McDougal hired the Rose Law Firm, where Hillary Clinton was a partner, to represent Madison Guaranty, which he says represented a “farcical round robin” of conflicts of interest, because she was the governor’s wife and the state government regulated the S&L industry. He also suggests that Madison Guaranty—not acquired by McDougal until five years after the Whitewater investment was made—financed the deal. But that’s simply wrong; the Clintons’ investment cost the bank nothing.

To heighten the alleged ethical conflict, Henwood adds that “the Clintons, of course, were also investors in McDougal’s schemes.”  This too is categorically false. The Clintons had no other business ties with Jim McDougal whatsoever. The RTC report states unequivocally that “there is no basis to charge the Clintons with any kind of primary liability for fraud or intentional misconduct.”

Moreover, neither Hillary Clinton nor the state banking department did anything to protect Madison from regulatory authorities. Far from protecting McDougal, the RTC report found that “if anything, Arkansas regulators took a more aggressive position toward Madison Guaranty than the FHLBB [Federal Home Loan Bank Board].” The report also noted that in December 1987, Arkansas securities commissioner Beverly Bassett Schaffer (a Clinton appointee) had written the FSLIC (Federal Savings and Loan Insurance Corporation) urging that it declare Madison Guaranty insolvent and shut the bank down at once. The Feds waited until 1989 to comply.

For all of Henwood’s dark imaginings, his research left him insufficiently aware of well-documented facts. Like many a conspiracy theorist before him, he makes much of the lost-and-found Rose Law Firm billing records, an old red herring.

Ominously, he writes that Hillary “claimed the Rose billing records for the Madison case, which were under multiple subpoenas, had disappeared. Then they suddenly reappeared, discovered by a personal assistant in a room in the residential quarters of the White House. When asked about this mysterious turn of events, Hillary responded as if she, too, were an injured party: ‘I, like everyone else, would like to know the answer about how those documents showed up after all these years.’ The records showed that far from having a trivial role in representing Madison, she had actually billed for sixty hours of work.”

What Henwood seems not to grasp is that the billing records found in the White House on January 5, 1996, were merely photocopies of computer printouts from the Rose Law Firm’s data system. Independent counsel Kenneth Starr and the congressional committees that subpoenaed those records already had all of the same information. The independent counsel’s hope seemed to be that Hillary Clinton’s own printouts would somehow show alterations or inculpatory handwritten marginalia, but those suspicions proved unfounded.

The idea that she would hide those photocopies, only to “find” them at the beginning of her husband’s re-election campaign, makes no sense at all — particularly in view of the fact that the documents vindicated her previous testimony in great detail.

Elsewhere Henwood makes a glancing reference to the Southern Development Bancorp, as if the Rose Law Firm’s representation of that bank was another sinister fact that Hillary Clinton sought to conceal. What he doesn’t mention is that Southern Bancorp began as a development initiative founded by the Winthrop Rockefeller Foundation and the state government under Bill Clinton. Hillary Clinton sat on its board, without compensation. Far from raking in illicit profits, the bank provides much-needed credit and financing for hundreds of worthwhile projects, from low-income housing, home repairs, farms, and small businesses to Boys & Girls clubs in neglected rural Arkansas.  Its first CEO was the late Tom McRae, Bill Clinton’s idealistic rival for the 1990 Arkansas Democratic gubernatorial nomination.

Finally, in a footnote, Henwood hints at guilt by association when he writes that the Clintons somehow “escaped” the “Whitewater morass,” while others went to prison, notably James and Susan McDougal and Jim Guy Tucker, who succeeded Bill Clinton as governor. But again he gets the facts and timeline wrong.

Tucker was not, as Henwood writes, convicted of “Whitewater-related” charges. A longtime political rival, Tucker had no business ties to the Clintons whatsoever. Kenneth Starr prosecuted him on totally unrelated fraud charges, in the apparent hope that Tucker could provide damning testimony against the Clintons. But he could not and did not. With this kind of error, Henwood not only reveals his own ignorance but parrots the misinformation about Whitewater usually offered by Starr and his far-right defenders.

Jim McDougal went to prison for swindling the Clintons, among others, as the prosecutor who convicted the mentally ill banker pointed out in his closing argument. For her part, Susan McDougal was jailed for 18 months for refusing to provide false grand jury testimony against Bill Clinton at Starr’s behest. In a subsequent criminal contempt trial, she testified in open court for several days, and was acquitted. Bill Clinton awarded her a presidential pardon a couple of years after the fact. (Clinton did not pardon Tucker, which many Arkansas observers thought small of him.)

In short, Henwood simply doesn’t know what he’s talking about (and his reliance on former Fox News personality Dick Morris for guidance is mindboggling). What’s most disappointing is that a magazine of Harper’s’ reputation – which first exposed Whitewater as a political hoax — would provide a platform for his baseless speculations.

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