Updated 7-4-97


Arkansas Roots

The RTC Investigation

The Senate Hearings

The First Trial

The Second Trial


Cast of Characters

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A Starr-Crossed Investigation The three-year, $30 million probe of a small-time Arkansas land deal has taken some troubling turns. (6/30/97)


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Clinton's Testimony From The First Whitewater Trial

Clinton's Testimony From The Second Whitewater Trial


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The First Trial


In a fraud and conspiracy trial brought by independent counsel Kenneth Starr, a jury in Little Rock on May 28, 1996, returned 24 guilty verdicts against Arkansas Gov. Jim Guy Tucker and President Clinton's former partners in the Whitewater land deal, Jim and Susan McDougal. After nine weeks of dry courtroom exposition, the jury essentially concluded that the defendants had used McDougal's savings and loan as a private cookie jar, dipping into it for some $3 million in bogus loans to bankroll their many business schemes.

Clinton wasn't a defendant in the case (merely a witness for the defense), and most jurors said they believed his videotaped testimony but found it tangential. Nevertheless their verdict was a blow to the White House.


Instead of giving Clinton the hoped-for acquittal, which could have buried the issue and discredited Starr, the jurors handed the president's critics additional credibility. For one thing, they rejected a central tenet of Clinton's Whitewater theology. By basing their decision on documentary evidence and discounting the testimony of both Clinton and the defendants' chief accuser, David Hale, they undermined the White House argument that the investigation was a baseless, partisan witch hunt.


After the verdict, White House advisors were relieved to see presidential polls register little movement, evidence that voters already had taken the affair into account. But at least one survey, however, taken shortly after the verdicts showed that Americans by a two-to-one margin believed Clinton was hiding something with regard to Whitewater.

Hale alleged that in the mid-1980s, then-Gov. Clinton had participated in a conversation with McDougal pressuring Hale to make an illegal $300,000 loan. Having already told reporters Hale's account was "a bunch of bull," Clinton denied the allegation during his testimony, which was videotaped at the White House April 28.


Susan McDougal was sentenced to two years behind bars, but after refusing to testify before Starr's Little Rock grand jury, a federal judge held her in contempt of court and jailed her an additional 18 months. Meanwhile, Tucker was sentenced to four years' probation, avoiding a prison sentence largely due to liver disease. He faces another trial on charges brought by Starr that he obscured profits from a lucrative cable TV deal.

Jim McDougal's sentencing has been delayed several times, following his August 1996 decision to cooperate with Starr's investigation. Sources say McDougal has reversed earlier testimony, and is now corroborating Hale's charge that Clinton discussed an illegal loan. McDougal is now due to be sentenced April 14.


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