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Memphis Flyer Jim McDougal's Tell-All

By Ernest Dumas

JUNE 29, 1998:  In the pantheon of American political rogues, the late Jim McDougal was already the most fetching character even before he went to prison and collaborated on a book about how he nearly brought down the 42nd president of the United States.

Would it have occurred to the grim Albert Fall, Harding’s bribe-taking Interior secretary, or to any of the stolid crooks around Richard Nixon to brag, as McDougal did after psychiatrists declared him fit to stand trial for looting his little savings and loan, that he was the only officially sane person in the vast Whitewater controversy?

McDougal’s apologia (Arkansas Mischief: The Birth of a National Scandal, Henry Holt & Co., 316 pages, $25), written from a federal penitentiary with Curtis Wilkie of the Boston Globe and published after McDougal’s death this spring on a prison gurney at Fort Worth, reinforces his standing as the official jester of the Clinton scandals, but it will leave readers in some doubt about his shrinks’ competence.

McDougal’s bipolar disorder was first diagnosed in the 1980s after federal and state regulators chased him out of his thrift at Little Rock and his real estate ventures collapsed. Arkansas Mischief is most poignant in recounting McDougal’s lifelong struggles with alcoholism, manic-depressive cycles, and manifold other illnesses.

Even were it not, the book leaves no doubt what demon dogged the poor man through his ironic life to his perverse end. (He suffered a heart attack in the prison “hole,” where he had been consigned for punishment because his medicines made it impossible for him to pee on demand for the drug testers.) The book rocks back and forth between swagger and paranoia. In the end, the paranoia rules.

Though he writes lovingly through most of the book of his ex-wife Susan, now in jail in California for Whitewater-related felonies, at the end he scorns her bitterly for refusing to collaborate with special prosecutor Kenneth Starr and going to prison.

He repeats the accusation, made last year after Susan went to prison rather than testify before the Whitewater grand jury, that she had an affair with Clinton in the early ’80s. McDougal’s account is that he had discovered it when he telephoned Susan and the lines somehow got crossed so that he could overhear his wife giggling over Bill’s long-distance sexual innuendoes. He was “disappointed” but held no grudge against either of them.

After all, he had already kicked Susan out of bed forever because she had aborted his baby, which broke his heart because he badly wanted children.

Susan, by the way, says neither the affair nor the abortion happened. Indeed, how many of the rich anecdotes are really true? We’ll never know. McDougal had told so many lies, given so many conflicting accounts of Whitewater events to reporters, to the jurors who tried him and, apparently, to Ken Starr and the Grand Jury that he was considered a worthless witness against the president without a squad of corroborating witnesses.

Don’t depend on Arkansas Mischief to strengthen his credibility. Clinton nemesis Sheffield Nelson, for example, is identified, circa 1983, as a leading Republican. Nelson, in fact, was a Democrat and didn’t switch parties until 1990 after Clinton broke what Nelson thought was an implied promise to step aside and let him have the Democratic nomination. McDougal also misplaces events and members of Clinton’s Arkansas team. To be fair, some of the errors could be blamed on McDougal’s sorry mental condition in prison or Wilkie’s hasty research.

Jim McDougal
More amusing are McDougal’s swaggering accounts of masterminding the major political victories in Arkansas over three decades. The publication two years ago of Blood Sport, Pulitzer winner James Stewart’s account of Whitewater as told by Jim and Susan, established McDougal as the Forrest Gump of Arkansas politics. Stewart described him as Arkansas’ indispensable kingfish, though McDougal had been only a low-ranking aide to a governor and two U.S. senators, known among the cognoscenti for his gift for bombast and petty craftiness.

In Arkansas Mischief, Jim tells how he won Arkansas’ critical votes for John F. Kennedy in 1960, although he was only the 18-year-old chair of the youth division of the Arkansas campaign. According to McDougal, the national party wrote off Arkansas because of the virulent anti-Catholic strain in the state, but he masterminded Kennedy’s victory. The final straw was arranging for Baptist deacons on the Democratic committee to threaten their preachers with leaving the church if the preachers harangued against the pope and Kennedy from the pulpit on the Sunday morning before the election. It turned the tide.

Seriously, that’s what McDougal wrote.

The truth is that Kennedy was considered a shoo-in in Arkansas in 1960. In an unbroken string of presidential elections from 1840 until 1972, the state had not dallied with Republicans.

Such reputation as McDougal had in politics and business before he was uncovered for the national audience in 1992 was as a small-time promoter and dirty-tricks artist. He writes about doctoring polls, passing off clever lies and trapping political foes in a hotel elevator to help his outmanned faction win a Young Democrats election.

Readers who pick up Arkansas Mischief hoping to unlock the mysteries of Whitewater will find McDougal’s account of the 1978 land development with Bill and Hillary Clinton clearer than six years of opaque news stories, commentaries, and congressional hearings, but they will be no closer to answering the questions, What does it all mean and why should we care?

As all the investigations concluded long ago, “Whitewater” was nothing more than an unwise investment in a scrubby tract of Razorback wilderness by the McDougals and the young political couple they ran into at a Little Rock plate-lunch joint after returning from a tramp over the land.

The accumulating investigations of that unwise venture finally came down to one central question, which is really the linchpin of the book: Eight years later, in 1986, did Gov. Clinton pay a visit to McDougal and a small-time crook and municipal judge named David Hale at a real estate office in the woods south of Little Rock and pressure Hale to give Susan an illegal $300,000 loan from his federally subsidized small-business lending company? The loan papers said Susan would start an advertising agency with the money, but Jim used it for a new land venture.

Hale told the story about Clinton’s arm-twisting after the Clinton administration in the spring of 1993 turned him in to the Justice Department for defrauding the Small Business Administration of millions of dollars through loans to dummy corporations and to the little judge’s Republican cronies.

That charge led to the Whitewater investigation and the appointment of an independent counsel. Clinton denied the meeting. So did McDougal until, according to the book, a friendly ABC News reporter told him that Kenneth Starr would save him from dying in prison if he would help Starr. So he changed the story. But it’s not much help. It differs from Hale’s account and, judging by leaks from the special prosecutor, from the account McDougal gave to the Grand Jury.

If you believe McDougal’s literary version, he and Hale met at one of Jim’s development offices in the woods a few miles south of Little Rock and sealed the deal for the $300,000 loan. As they strolled to their cars, who should sidle up but Gov. Bill Clinton – in a business suit and not the sweaty jogging shorts described by Hale. McDougal says that after some small talk, Clinton asked offhandedly, “Did you discuss Susan’s loan?” and was told that it was taken care of. That was it.

Clinton was not supposed to even know about the loan since it didn’t concern him. McDougal wondered how Clinton knew to show up at the remote site where he and Hale were meeting and ask about the loan. It had to mean, Jim surmised, that Susan had told him and that they were still carrying on.

Anyway, that question, “Did you discuss Susan’s loan?” is the object of the six-year federal investigation of Whitewater.

McDougal (or Wilkie) writes that Hale owed his municipal judgeship to an appointment by Clinton, which repeats a lie told often in the press. McDougal had to know that Hale was a political enemy, not a friend, of Clinton. Hale was appointed judge in 1981 not by Clinton but by Gov. Frank White, Clinton’s Republican nemesis, who faced Clinton in three bitter elections during the decade.

At the time of the loan to Susan, in fact, Hale was laundering thousands of dollars from a SBA-subsidized loan into White’s campaign to unseat Clinton – a little matter ignored by the independent counsel and the national press. How could Clinton influence Hale to make a loan? Hale’s business was regulated by the feds, not the state.

McDougal seems to be as nonplused as the rest of us about why, unless it was to help a sweetie, Clinton would have shown any interest whatever in the loan.

His story ends with a purported exchange with Larry King on TV after his collaboration with Starr and his sentencing. King was puzzled about why Clinton would show an interest in Hale’s making the loan.

Readers looking for Arkansas Mischief to solve that compelling enigma will have to be satisfied with the answer King got.

“Never understood that,” McDougal replied. So it ends.

After federal regulators, with the help of Clinton’s securities commissioner, ousted McDougal from his S & L in 1986, his old friend Clinton had nothing more to do with him. Hillary had treated him like a leper for several years. Broken and despondent despite his acquittal on banking fraud charges in 1990, McDougal got a call from Clinton, who asked him to pay up a little Whitewater debt. He says Clinton later telephoned his sick and broken-hearted mama and promised to find a state job for Jim, but she died asking if Bill had ever called about the job.

Despondent over the Clintons’ heartlessness and embittered with another friend, Gov. Jim Guy Tucker, for cheating him out of $59,000 left from a joint loan repayment scheme in March 1992, McDougal stumbled into the office of Clinton’s and Tucker’s mutual political enemy, Sheffield Nelson, and kicked over the lantern that caused the Whitewater conflagration.

He told Nelson of his friends’ treachery, and Nelson passed it to a friendly reporter at The New York Times. The rest, as they say, is history – or is it fiction?

Ernest Dumas writes a weekly column for The Arkansas Times.

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