President Bill Clinton's Whitewater TestimonyBy The Associated Press -- Page 2 of 7
May 9, 1996
Q: Or Jim Guy Tucker?
Q: Did you ever have any conversation with Jim McDougal wherein you were led to believe that you and Mr. McDougal could obtain financing or money from David Hale at any time?
Q: Did you ever have any meetings with Jim McDougal at the governor's mansion in January of 1986?
Q: And what was the topic of that meeting?
Q: In that meeting, Mr. President, did there ever come a point where a discussion was had with you and Mr. McDougal about any plans involving David Hale providing financing in any shape, form, or fashion?
MR. HEUER: Your Honor, I would pass the witness at this time.
EXAMINATION ON BEHALF OF GOV. JIM GUY TUCKER BY MR. BROWN:
Q: I will try to be as brief as I can and as precise as I can in asking you these questions. If I am unclear, please ask me to repeat the question.
Mr. President, do you know Jim Guy Tucker?
Q: And when did you first meet Jim Guy Tucker, Governor Tucker?
Q: All right. Can you describe your relationship with Governor Tucker over the years?
Q: All right. I'll get you to tell us about that?
And in 1978, when he ran for the United States Senate after the death of Senator McClellan, along with Senator Pryor and Congressman Thornton, I ran for the governorship, and I was elected governor. He lost the Senate race, and he basically devoted himself after that, nearly as I could tell, to his own business interests and his law practice. So, I didn't see him so much then, but we were still friendly.
Then in 1982, after I was defeated for governor in 1980, I ran for re-election in '82 in a very crowded Democratic primary field which included Governor Tucker. So, we ran against each other for the first and, thank goodness, the only time in our careers. It was a very difficult, very heated race, and it left some hard feelings. I was lucky enough to win it. But we were sort of estranged after that.
Although I always respected the way he handled it, he continued to support the Democratic Party, he continued to stand up for the things that I believed in, and from time to time, he even made contributions to my campaign. But we weren't really close. It got a little better as time went on, you know, time often heals some of those wounds, it got a little better.
Q: I understand.
Q: Now, Mr. President, understanding your relationship
historically with Governor Tucker, particularly as it related to
the political aspects of it, have you ever had any business
relationships with Governor Tucker?
Q: Now, let me focus, if you will, in the year 1985 and 1986.
Were you ever aware that David Hale, in fact, had a company called
Capital Management Systems? Were you ever made aware of that,
Capital Management System --
MR. HEUER: Services.
BY MR. BROWN:
Q: Services, excuse me, I'm sorry, Services.
Q: All right.
Q: Well, apparently I had some problems repeating the name of
that company, too. But it is Capital Management Services. Let me
ask you this question: Did you ever request David Hale or any of
his companies to make a loan to or for the benefit of Governor
Tucker, to the best of your knowledge?
Q: Are you aware of whether or not there was ever any agreement
of any kind involving Governor Tucker, David Hale and Jim McDougal
which concerned the making of loans for the mutual benefit of these
persons or other persons?
Q: Are you aware of whether or not there was ever any agreement
of any kind involving Governor Tucker and David Hale through any of
his companies which had the intent of increasing the capital of
David Hale's small business investment company or any company that
he might have been associated with?
Q: Did Governor Tucker ever ask you to do anything at any time
to help him obtain loans from David Hale or any of his companies?
Q: Did he ever ask you to do anything at any time to help obtain
loans for any of Governor Tucker's companies?
Q: All right. And I guess this question has been asked, but since we represent different individuals, I need to ask you this question as it relates to Governor Tucker.
Q: Did you ever pressure David Hale to do anything at any time to benefit - or for the benefit of Governor Jim Guy Tucker?
Q: In late 1985 and early 1986, were you aware of whether or not there was ever any agreement involving Governor Tucker and David Hale and Jim McDougal involving Madison Guaranty loans in exchange for loans from David Hale's company, CMS, that we have referred to?
Q: Did you ever have - excuse me.
Q: All right.
Q: Thank you, Mr. President. Mr. President, did you ever have any conversation with Governor Tucker, in which he informed you that he would be arranging a loan through Madison Guaranty Savings and Loan which would enable David Hale to make loans to various other people?
MR. BROWN: Mr. President, I have no further questions.
EXAMINATION ON BEHALF OF SUSAN McDOUGAL BY MR. McDANIEL:
Q: Good afternoon, Mr. President.
Q: We have been introduced, and I'm Bobby McDaniel, and along with Jennifer Horan, the federal public defender, represent Susan McDougal. And in that regard, I would like to ask you, do you know Susan?
Q: Can you tell us, sir, when and how did you meet Susan?
Q: All right, sir. To get right to the point, Mr. President -
Q: All right, sir.
Q: All right, sir. And as I say, to get right to the point, Mr. President, did you ever request David Hale to make a loan to Susan McDougal?
Q: Mr. President, did you ever in any way try to pressure David Hale directly or indirectly, to make a loan to Susan McDougal?
Q: All right, sir. And I want to focus for a minute on a time frame late 1985, early 1986, and again, we represent separate defendants, and it may be cumulative, but bear with me, I will be brief. Were you aware of any alleged agreement whereby - involving Susan McDougal and David Hale, involving loans that would be made with Madison Guaranty in exchange for loans being made for David Hale's company? Did you have any knowledge of any such agreement, if it existed?
Q: Mr. President, likewise, in reference to that same time frame, early '85 - late '85, early '86, were you aware of any alleged agreement involving Jim Guy Tucker, Jim McDougal, David Hale, or Susan McDougal, involving Madison Guaranty loans in exchange for loans from David Hale's company?
Q: Were you aware in 1986 that on April 3rd, 1986 David Hale's small business investment company, Capital Management Services, made a $300,000 loan to Susan McDougal doing business as Master Marketing? Were you aware of that in 1986?
Q: Mr. President, did you ever discuss a $300,000 loan to Susan McDougal with David Hale in any way?
Q: Mr. President, did you urge David Hale to make any such loan?
Q: Did you ever discuss a $300,000 loan to Susan McDougal from David Hale with Jim McDougal?
Q: Did you ever discuss a $300,000 loan to Susan McDougal from David Hale with Susan McDougal?
Q: Did you receive any of the proceeds from a $300,000 loan made to Susan McDougal by David Hale's company?
Q: When, if you know, did you first become aware that Susan McDougal did receive a $300,000 loan from David Hale's company, if you know?
Q: Mr. President, in 1986, were you aware that Jim and Susan
McDougal were buying land in south Pulaski County from
International Paper Realty Company for a project, real estate
development project, later to be known as Lorance Heights? Were you
aware of that in 1986?
Q: All right, sir. And were you aware in 1986, for a few months'
period of time during that year, that Lorance Heights property was
held in the name of Whitewater Development Company? Were you aware
of that in 1986?
Q: Were you aware, also, in 1986 that later in that year the
Lorance Heights land was transferred out of Whitewater Development
Company into another McDougal company? Were you aware of that, its
Q: All right, sir. And did you know in 1986 how the McDougals
financed the purchase of the land later known as Lorance Heights?
Q: Did you know in 1986 where the McDougals got the funds for
the down payment for this land from International Paper?
Q: Were you aware that in the late 1980s there was litigation
involving the McDougals and International Paper Company whereby
International Paper eventually took back this land?
Q: When did you --
Q: When did you first find out, if you know, that Whitewater
Development Company briefly held title to this land known as
MR. McDANIEL: Your Honor, as has previously occurred, and to Mr.
President a thank you. I have no further questions.
EXAMINATION ON BEHALF OF THE PLAINTIFF BY MR. JAHN:
Q: Mr. President, during the course of your direct examination,
sir, you made a reference to different versions of David Hale's
accounts. Can you tell us, sir, what is your source of information
concerning different versions of David Hale's accounts?
Q: Okay. Are you aware, sir, of what he testified to?
Q: I'm not asking you, sir, what he said. I'm saying, has anyone
related to you a version of what his testimony was under oath?
Q: Okay. You read how -- to what extent, sir, were they
quotations, were they direct quotations?
Q: So, you did receive, then, direct information concerning what it was that Mr. Hale had apparently testified to under oath; is that correct?
Q: You indicated, sir, that your counsel provided you
information concerning how Mr. Hale had testified. I believe you
indicated there was something along the line of wearing jogging
shorts while you were at the 145th Street. What other information
did you receive, not from the newspapers, but what other
information did you receive concerning the subject matter and the
content of Mr. Hale's testimony?
Q: Were you aware, sir, or are you aware, sir, that the law firm
that was formerly -- Mr. Lindsey was formerly associated with was
buying a transcript of the testimony provided in the court, sir?
Q: Is Mr. Lindsey still associated with the White House, sir?
Q: What is his current association with the White House?
Q: Has he ever related to you, sir, accounts as to what Mr. Hale
allegedly said under oath during the course of this trial?
Q: I believe the question, sir, was whether or not anyone other
than your attorney had related subject matter concerning what Mr.
Hale had allegedly testified during the course of his testimony?
Q: You, sir, in your position, receive extensive briefing and briefing books concerning virtually every item that occurs to you on your daily schedule; is that correct, sir?
Q: Have you received a briefing book concerning your testimony, sir?
Q: Did that briefing book contain any accounts concerning what Mr. Hale had allegedly said under oath during the course of this trial, sir?
Q: Okay. You were asked by Mr. Heuer, sir, concerning whether or not you had ever gone to Mr. McDougal and sought financial aid from Madison Guaranty Savings and Loan concerning your joint business ventures; do you remember that, sir?
Q: You and Ms. Clinton - well, perhaps maybe I'm misphrasing it. There was, in fact, an occasion in which you did go to a financial institution controlled by Mr. McDougal concerning financial assistance to the Whitewater Development, was there not, sir?
Q: All right. Can you tell the jury, sir, what arose, what was the circumstances by which - first of all, who was it that did it?
Q: Okay. And that was the Bank of Kingston; is that correct, sir?
Q: All right. Later became called Madison Bank and Trust, I believe. Were you familiar with the change in name at a later date?
Q: And were you aware at the time, sir, that that was a financial institution owned jointly by Mr. McDougal and Stephen Smith?
Q: Okay. I believe the question was something along the line of, kind of describe for the jury's benefit your knowledge of Stephen Smith and your relationship with Stephen Smith.
Q: And while he worked for you in the governor's office was the same time that Mr. McDougal also worked with you in the governor's office?
Q: And was that also the same time that Mr. McDougal advanced to you or sought you out concerning your investment in what later became Whitewater Development Corporation? Was that also about the same time?
Q: Okay. But in 1978, was Mr. Smith working for you as attorney general, sir?
Q: Okay. Thank you. I'm sorry. Again, if I ask a question that's not a hundred percent within the confines of your memory, please correct me on that particular regard.
Q: So, there did come an occasion then where you were approached, or you and Mr. McDougal discussed obtaining some financing for the benefit of Whitewater Development Corporation, and Mr. McDougal made the arrangements, did he not, sir?
Q: Do you recall you and your wife going to the Bank of Kingston and executing notes and the like?
Q: Okay. And so, at the time that you did it, you knew that it was Mr. McDougal's institution?
Q: Okay. And you knew that he and Mr. Smith were basically in control of that institution?
Q: Now, at the time that it was done, though, is it fair, and I
don't want to put words in your mouth that aren't fair, sir, is it
fair to say that you actually considered that to be a debt of
Whitewater Development Corporation, even though you were
personally, or perhaps your wife was personally responsible, didn't
you really consider that to be part of the Whitewater Development
Corporation Enterprise, itself?
Q: Okay. And that hope, sir, was based upon representations that
Mr. McDougal made to you; is that correct, sir?
Q: And you and your wife had no experience in land development;
is that correct?
Q: But as far as putting in roads and developing tracts --
Q: -- and developing marketing programs and the like, that was
Mr. McDougal's expertise?
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