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In the meantime, the Republican-controlled Senate appointed the Special Whitewater Committee to look into all the Whitewater-related matters, and the Banking committees of both the Senate and the House of Representatives undertook extensive hearings on Whitewater and Madison Guaranty Savings and Loan Corp. Numerous officials of the Clinton administration and associates of the Clintons from Arkansas were subpoenaed to testify. The Senate Whitewater hearings and the House Banking Committee hearings on Whitewater lasted more than a year but found no illegalities. Starr, the Whitewater special prosecutor, eventually concluded that Foster had committed suicide and that no laws were broken in the travel office firings or the FBI files case.
But Starr extended the investigation far and wide in Arkansas, delving into the business practices at the Madison Guaranty thrift, Hale’s small-business lending operations, Jim Guy Tucker’s cable television business in the 1980s, and Clinton’s campaigns for governor. Starr and Fiske obtained indictments against seventeen persons in Arkansas, fifteen of whom either pleaded guilty to offenses or were convicted. Most did not go to trial. Only one of the convictions was related by evidence to either of the Clintons: the president of a small bank at Perryville (Perry County) that had loaned money to Clinton’s campaign for governor in 1990 pleaded guilty to misdemeanors for failing to report two campaign bank loans to the U.S. Comptroller of the Currency, as a federal narcotics law required.
Aside from those who were indicted, many other Arkansans were swept up in the investigation—family members (including children) of those who were accused, people who had worked in Clinton’s state capitol office or his 1990 campaign for governor, employees of McDougal’s businesses, and associates in Washington after Clinton became president. Many hired lawyers to advise and represent them in the grand jury proceedings in Little Rock and Washington.
Although none of the investigations ever concluded that the Clintons did anything wrong in these matters, the original issue stayed alive until the independent counsel closed shop in 2001, mainly owing to David Hale’s contention that Clinton—while he was governor in the mid-1980s—had asked him to approve a $300,000 loan to Susan McDougal that proved to be fraudulent because its proceeds were misused by her husband. Clinton testified that he never heard about the loan. While she stubbornly refused to testify before the grand jury and went to prison for it, Susan McDougal publicly maintained that she never apprised Clinton of the loan because it had nothing to do with him.
James McDougal was convicted on eighteen counts of fraud and conspiracy in his dealings with Hale’s company in May 1996 and was sentenced to five years in prison, with two of them suspended. He had insisted upon his innocence, but after his conviction and facing a possible eighty-four-year prison sentence, he agreed to cooperate with Starr in exchange for a shortened sentence, claiming that he had been present when Clinton had brought up the loan in a conversation with Hale, although his and Hale’s accounts differed. He died in a federal prison in Fort Worth, Texas, on March 8, 1998.
Gov. Tucker was convicted of mail fraud and conspiracy in his dealings with Madison Guaranty and Hale, and he also pleaded guilty to filing a sham bankruptcy for a cable television company he owned in Texas. He served no time for either and tried unsuccessfully for years to reverse both convictions, losing finally with the U.S. Supreme Court. His conviction on the bankruptcy charge proved especially perverse for Tucker because the Justice Department and the Internal Revenue Service eventually conceded that the tax law that he was accused of violating had been repealed before the transaction and that rather than owing the government $3.5 million in taxes, his liability was no more than $125,000 and perhaps nothing. Tucker argued before appellate courts that his plea and his conviction should be voided because the prosecutor had pursued him under a non-existent law. The Eighth U.S. Circuit Court of Appeals said in 2005 that he had to abide by his guilty plea, and the U.S. Supreme Court refused to take up his appeal.