Just the truth would have made life easier for all of us. And a much better tale as well. Updated January 2001 and periodically thereafter 1950s When Bill Clinton is 7, his family moves from Hope, Arkansas, to the long-time mob resort of Hot Springs, AR. Here Al Capone is said to have had permanent rights to suite 443 of the Arlington Hotel. Clinton's stepfather is a gun-brandishing alcoholic who loses his Buick franchise through mismanagement and his own pilfering. He physically abuses his family, including the young Bill. His mother is a heavy gambler with mob ties. According to FBI and local police officials, his Uncle Raymond -- to whom young Bill turns for wisdom and support -- is a colorful car dealer, slot machine owner and gambling operator, who thrives (except when his house is firebombed) on the fault line of criminality. PAUL BOSSON, Hot Springs Prosecutor - In Hot Springs, growing up here, you were living a lie. You lived a lie because you knew that all of these activities were illegal. I mean, as soon as you got old enough to be able to read a newspaper, you knew that gambling in Arkansas was illegal, prostitution was illegal. And so you lived this lie, so you have to find some way to justify that to yourself and, you know, you justify it by saying, "Well," you know, "it's okay here." VIRGINIA KELLY, Clinton's mother (1923-1994)
- Hot Springs was so different. We had wide-open gambling, for
one thing, and it was so wide open that it never occurred to
me that it was illegal - it really didn't - until it came to
a vote about whether we were going to legalize gambling or not.
I never was so shocked.
1960s A federal investigation concludes that Hot Springs has the largest illegal gambling operations in the United States. Clinton goes to Georgetown University where he finds a mentor in Professor Carroll Quigley. Quigley writes: "That the two political parties should represent opposed ideals and policies. . . is a foolish idea. Instead, the two parties should be almost identical . . .The policies that are vital and necessary for America are no longer subjects of significant disagreement, but are disputable only in detail, procedure, priority, or method. " Bill Clinton, according to several agency sources interviewed by biographer Roger Morris, works as a CIA informer while briefly and erratically a Rhodes Scholar in England. Although without visible means of support, he travels around Europe and the Soviet Union, staying at the ritziest hotel in Moscow. During this period the US government is using well educated assets such as Clinton as part of Operation Chaos, a major attempt to break student resistance to the war and the draft. According to former White House FBI agent Gary Aldrich Clinton is told by Oxford officials that he is no longer welcome there. Bill Clinton and his friend Jim McDougal get a job in the office of Senator J. William Fulbright. The Washington Post will later write, "McDougal was interested in making money while Clinton was obsessed with political stature." After becoming involved in politics, Wellesley graduate Hillary Rodham orders her senior thesis sealed from public view. 1969 Bill Clinton fails to report to his duty station at the University of Arkansas ROTC. Reclassified 1-A on October 30, 1969, as enlistment with Army Reserves is revoked by Colonel E. Holmes. 1974 27 year old Clinton, only months out of Yale Law School, is back in Arkansas eager to run for Congress. Roger Morris writes later, "A relative unknown, he faces an imposing field of rivals in the Democratic primary, and beyond, in the general election, a powerful Republican incumbent. Yet as soon as he enters the race, Mr. Clinton enjoys a decisive seven-to-one advantage in campaign funds over the nearest Democratic competitor, and will spend twice as much as his well-supported GOP opponent. It begins with a quiet meeting at his mother's house in Hot Springs. Around the kitchen table, as Virginia Clinton will describe the scene, avid young Billy meets with two of his most crucial early backers -- uncle Raymond G. Clinton, a prosperous local Buick dealer, and family friend and wealthy businessman Gabe Crawford. As they talk, Mr. Crawford offers the candidate unlimited use of his private plane, and Uncle Raymond not only provides several houses around the district to serve as campaign headquarters, but will secure a $10,000 loan to Bill from the First National Bank of Hot Springs - an amount then equal to the yearly income of many Arkansas families. Together, the money and aircraft and other gifts, including thousands more in secret donations, will launch Mr. Clinton in the most richly financed race in the annals of Arkansas -- and ultimately onto the most richly financed political career in American history. Though he loses narrowly , his showing is so impressive, especially in his capacity to attract such money and favours, that he rises rapidly to become state attorney-general, then governor, and eventually, with much the same backing and advantage, president of the United States . . . No mere businessman with a spare plane, Gabe Crawford presided over a backroom bookie operation that was one of Hot Springs' most lucrative criminal enterprises. [And the] inimitable Uncle Raymond - who had also played a pivotal behind-the-scenes role in keeping young Bill out of the Vietnam draft - was far more than an auto dealer. In the nationally prominent fount of vice and corruption that was Hot Springs from the 1920s to the 1980s (its barely concealed casinos generated more income than Las Vegas well into the 1960s), the uncle's Buick agency and other businesses and real estate were widely thought to be facades for illegal gambling, drug money laundering and other ventures, in which Raymond was a partner. He was a minion of the organized crime overlord who controlled the American Middle South for decades, New Orleans boss Carlos Marcello or "Mafia Kingfish" as his biographer John Davis called him." 1976 Bill Clinton is elected attorney general of Arkansas. Two Indonesian billionaires come to Arkansas. Mochtar Riady and Liem Sioe Liong are close to Suharto. Riady is looking for an American bank to buy. Finds Jackson Stephens with whom he forms Stephens Finance. Stephens will broker the arrival of BCCI to this country and steer BCCI's founder, Hassan Abedi, to Bert Lance. Riady's teen-age son is taken on as an intern by Stephens Inc. He later says he was "sponsored" by Bill Clinton. 1977 Hillary Clinton joins the Rose Law Firm. Apparently because of pressure from Indonesia, Riady withdraws his bid to buy Lance's 30% share of the National Bank of Georgia. Instead, a BCCI front man buys the shares and Abedi moves to secretly take over Financial General - later First American Bankshares -- later the subject of the only BCCI-connected scandal to be prosecuted in the US. 1978 Clinton is elected governor. The Clintons and McDougals buy land in the Ozarks for $203,000 with mostly borrowed funds. The Clintons get 50% interest with no cash down. The 203 acre plot, known as Whitewater, is fifty miles from the nearest grocery store. The Washington Post will report later that some purchasers of lots, many of them retirees, "put up houses or cabins, others slept in vans or tents, hoping to be able to live off the land." More than half of the purchasers will lose their plots thanks to the sleazy form of financing used. Two months after commencing the Whitewater scam, Hillary Clinton invests $1,000 in cattle futures. Within a few days she has a $5,000 profit. Before bailing out she earns nearly $100,000 on her investment. Many years later, several economists will calculate that the chances of earning such returns legally were one in 250 million. Governor Clinton appoints Jim McDougal an economic development advisor. Bill Clinton's mother hangs out at the race track with mobsters and other local figures, including Dan Lasater who breeds race horses in Kentucky and Florida and has a box at the track next to hers. Mrs. Clinton introduces Lasater to Roger Clinton. More than a few Little Rock insiders believe Hillary Clinton is having an affair with Vince Foster. Roger Clinton develops a four-gram a day cocaine habit, getting his stuff from New York and Medellin suppliers, based (as one middleman will later testify) on "who his brother was." Sharlene Wilson is one of his dealers. Dan Lasater will give Roger work and loan him $8,000 to pay off a drug debt. According to her later allegations, Juanita Broaddrick, a volunteer in Clinton's gubernatorial campaign, claims she is attacked by by Clinton and her lip almost bitten off. According to Roger Morris in Partners in Power, a young woman lawyer in Little Rock will later claim that she was accosted by Clinton this year and that when she recoiled he forced himself on her, biting and bruising her. "Deeply affected by the assault, the woman decided to keep it all quiet for the sake of her own hard-won career and that of her husband. When the husband later saw Clinton at the 1980 Democratic Convention, he delivered a warning. 'If you ever approach her,' he told the governor, 'I'll kill you.' Not even seeing fit to deny the incident, Bill Clinton sheepishly apologized and duly promised never to bother her again." Paula Grober, Clinton's speech interpreter for the deaf is killed in a high-speed, no witness, one-car crash. Has traveled extensively with Clinton since 1978 1979 Sharlene Wilson will testify in a 1990 federal drug probe that she began selling cocaine to Roger Clinton as early as this year. She will also tell reporters that she sold two grams of cocaine to Clinton's brother at the Little Rock nightclub Le Bistro, then witnessed Bill Clinton consume the drug. "I watched Bill Clinton lean up against a brick wall," Wilson reveals to the London Telegraph's Ambrose Evans-Pritchard in 1995. "He was so messed up that night, he slid down the wall into a garbage can and just sat there like a complete idiot." Wilson also describes gatherings at Little Rock's Coachman's Inn between 1979 and 1981, where she saw Clinton using cocaine "quite avidly" with friends. Drug prosecutor Jean Duffey will say that she has no doubt that Wilson was telling the truth. The Clintons and McDougals form Whitewater Development Company. 1980s According to later sworn testimony by Arkansas trooper Larry Patterson, Governor Clinton has oral sex with a woman in a car parked outside Chelsea Clinton's elementary school. Governor Clinton appoints Web Hubbell to head a new state ethics commission. First task: to weaken ethics legislation currently under consideration by exempting the governor from some of its most rigorous provisions. Arkansas becomes a major center of gun-running, drugs and money laundering. The IRS warns other law enforcement agencies of the state's "enticing climate." According to Clinton biographer Roger Morris, operatives go into banks with duffel bags full of cash, which bank officers then distribute to tellers in sums under $10,000 so they don't have to report the transaction. Sharlene Wilson, according to investigative reporter Ambrose Evans-Pritchard, flies cocaine from to a pickup point in Texas. Other drugs, she and others say, are stuffed into chickens for shipping around the country. Wilson also serves as "the lady with the snow" at "toga parties" attended, she reports, by Bill Clinton. According to Wilson,"I lived in Little Rock, Arkansas, O.K.? And I worked at a club called Le Bistro's, and I met Roger Clinton there, Governor Bill Clinton, a couple of his state troopers that went with him wherever he went. Roger Clinton had come up to me and he had asked me could I give him some coke, you know, and asked for my one-hitter, which a one-hitter is a very small silver device,O.K., that you stick up into your nose and you just squeeze it and a snort of cocaine will go up in there.And I watched Roger hand what I had given him to Governor Clinton, and he just kind of turned around and walked off." Investor's Business Daily would later write, "Sally Perdue, a former Miss Arkansas and Little Rock talk show host who said she had an affair with then-Gov. Clinton in 1983, told the London Sunday Telegraph that he once came over to her house with a bag full of cocaine. ''He had all the equipment laid out, like a real pro.'' In the 1990s, Genifer Flowers tells Sean Hannity's WABC talk radio show: "He smoked marijuana in my presence and and offered me the opportunity to snort cocaine if I wanted to. I wasn't into that. Bill clearly let me know that he did cocaine. And I know people that knew he did cocaine. He did tell me that when he would use a substantial amount of cocaine that his head would itch so badly that he would become self conscious at parties where he was doing this. Because all he wanted to do while people were talking to him is stand around and scratch his head. ...." Two Arkansas state troopers will swear under oath that they have seen Clinton ''under the influence'' of drugs when he was governor. Sharlene Wilson is a bartender who ended up serving time on drug crimes and cooperating with drug investigators. She told a federal grand jury she saw Clinton and his younger brother ''snort'' cocaine together in 1979. Jack McCoy, a Democratic state representative and Clinton supporter, told the Sunday Telegraph that he could ''remember going into the governor's conference room once and it reeked of marijuana.'' Historian Roger Morris, in his book ''Partners in Power,'' quotes several law enforcement officials who say they had seen and knew of Clinton's drug use. One-time apartment manager Jane Parks claims that in 1984 she could listen through the wall as Bill and Roger Clinton, in a room adjoining hers, discussed the quality of the drugs they were taking. Hillary Clinton makes a $44,000 profit on a $2,000 investment in a cellular phone franchise deal that involves taking advantage of the FCC's preference for locals, minorities and women. The franchise is almost immediately flipped to the cellular giant, McCaw. A drug pilot brings a Cessna 210 full of cocaine into eastern Arkansas where he is met by his pick-up: a state trooper in a marked police car. "Arkansas," the pilot will recall years later, "was a very good place to load and unload."
According to his wife, security operative Jerry Parks delivers large sums of money from Mena airport to Vince Foster at a K-Mart parking lot. Mrs. Parks discovers this when she opens her car trunk one day and finds so much cash that she has to sit on the trunk to close it again. She asks her husband whether he is dealing drugs, and he allegedly explains that Foster paid him $1,000 for each trip he took to Mena. Parks said he didn't "know what they were doing, and he didn't care to know. He told me to forget what I'd seen.". . . .Later Evans-Pritchard will write, "Foster was using him as a kind of operative to collect sensitive information on things and do sensitive jobs. Some of this appears to have been done on behalf of Hillary Clinton. . . Foster told him that Hillary wanted it done. Now, my understanding . . . is that she wanted to know how vulnerable he would be in a presidential race on the question of -- how shall I put it? -- his appetites." Hillary Clinton quietly lobbies on behalf of the Contras and against groups and individuals opposing them. Dan Lasater's parties become known around Little Rock for the availability of cocaine and women. Judy Gibbs, a model and call girl who appeared in Penthouse magazine, runs a powerful house of prostitution in Fordyce with her sister Sharon. They also blackmail some of their more powerful clients. Both her family and one of Clinton's bodyguards will later link Judy Gibbs to the governor. She decides to cooperate with police in an investigation of Arkansas cocaine trafficking, but is burned to death inside her home from a fire of undetermined origin. In 1999, Newsmax will report, "[Former Clinton bodyguard Barry] Spivey had become something of a mystery man, who insisted on meeting [Paula Jones investigator] Rick Lambert on a deserted road nestled deep in the Arkansas backwoods. The Jones investigator admitted he was none too comfortable with the situation. Spivey shared a story about a conversation he had with Clinton while on a flight over southeast Arkansas. The trooper noticed a blackened patch amidst the greenery below that, surprisingly, Clinton recognized. That patch was all that was left of an estate that had burned to the ground in the mid-80s. According to the trooper, Clinton began reminiscing about rumors of his involvement with the woman of the house, a onetime "Penthouse pet." Her husband, Spivey said, was involved in a pornography ring. Clinton explained to Spivey, 'You know that mansion just burned down right on top of them.' Years later, Spivey remains struck by one thing: the eerie expression that crossed Clinton's face as he spoke those words. ...."
1980 The husband of a Little Rock attorney warns Clinton at the Democratic Convention that if he approaches his wife again, he'll kill him. Clinton apologizes and agrees to leave the woman alone. Bill Clinton loses re-election as governor. He will win two years later. Larry Nichols will tell the George Putman Show in 1998 that he had met with Clinton and Jackson Stephen's brother Witt and that Witt had told Clinton that the Stephens were ready to back him for another run at the governorship but that he had to "dry out on the white stuff." There are reports that following his loss, Clinton ended up in the hospital for a drug overdose. Journalist R. Emmett Tyrrell later asked emergency room workers at the University of Arkansas Medical Center if they could confirm the incident. He didn't get a flat ''no'' from the hospital staff. One nurse said, ''I can't talk about that.'' Another said she feared for her life if she spoke of the matter. Newsmax will report: "Dr. Sam Houston, a respected Little Rock physician and once a doctor for Hillary's cantankerous father, Hugh Rodham, says it is well known in Little Rock medical circles that Clinton was brought to a Little Rock hospital for emergency treatment for an apparent cocaine overdose. According to Houston, who told us he spoke to someone intimately familiar with the details of what happened that night, Clinton arrived at the hospital with the aid of a state trooper. Hillary Clinton had been notified by phone and had instructed the hospital staff that Clinton's personal physician would be arriving soon. When Mrs. Clinton arrived, she told both of the resident physicians on duty that night that they would never practice medicine in the United States if word leaked out about Clinton's drug problem. Reportedly, she pinned one of the doctors up against the wall, both hands pressed against his shoulders, as she gave her dire warning." According to Jim McDougal's later account,
he and Henry Hamilton, ``developed a system to pass money to
Clinton,'' then governor of Arkansas. ``I considered it just
another way of helping to take care of Bill. A contractor agreed
to pad my monthly construction bill by $2,000. The contractor
put the figure on his invoice as a cost for gravel or culvert
work. After I paid the full amount ... the contractor reimbursed
me the $2,000. I turned the money over to Henry to give to Clinton.
Once, after I handed Henry his latest consignment of 20 hundred-dollar
bills to relay to the governor's office, he turned the bills
over and over in one hand, like a magician. Henry grinned. `You
know,' he said, `Caesar had his Brutus, Charles the First had
Cromwell. Clinton could profit from these examples if he crosses
us.'" 1981 Hillary Clinton writes Jim McDougal: "If Reagonomics works at all, Whitewater could become the Western Hemisphere's Mecca."
ROGER MORRIS & SALLY DENTON, PENTHOUSE MAGAZINE - Seal's legacy includes more than 2,000 newly discovered documents that now verify and quantify much of what previously had been only suspicion, conjecture, and legend. The documents confirm that from 1981 to his brutal death in 1986, Barry Seal carried on one of the most lucrative, extensive, and brazen operations in the history of the international drug trade, and that he did it with the evident complicity, if not collusion, of elements of the United States government, apparently with the acquiescence of Ronald Reagan's administration, impunity from any subsequent exposure by George Bush's administration, and under the usually acute political nose of then Arkansas governor Bill Clinton. . . Mena state police investigator Russell
Welch will later describe the airport, pointing to one hanger
he says is owned by a man who "doesn't exist in history
back past a safe house in Baltimore in 1972." Another is
owned by someone who "smuggled heroin through Laos back
in the seventies." Still another is "owned by a guy
who just went bankrupt. So what's he do? Flies to Europe for
more money." Welch points to a half dozen Fokker aircraft
parked on an apron, noting that "the DEA's been tracking
those planes back and forth to Columbia for a while now."
1982 A DEA report uncovered by Ambrose Evans-Pritchard will cite an informant claiming that a key Arkansas figure and backer of Clinton "smuggles cocaine from Colombia, South America, inside race horses to Hot Springs." The London Telegraph's Ambrose Evans-Prichard writes, "Basil Abbott, a convicted drug pilot, says that he flew a Cessna 210 full of cocaine into Marianna, in eastern Arkansas, in the spring of 1982. The aircraft was welcomed by an Arkansas State Trooper in a marked police car. 'Arkansas was a very good place to load and unload' he said." IRS agent William Duncan and an Arkansas State Police investigator take their evidence concerning drug trafficking in Mena to US Attorney Asa Hutchinson. They ask for 20 witnesses to be subpoenaed before the grand jury. Hutchinson chooses only three. According to reporter Mara Leveritt, "The three appeared before the grand jury, but afterwards, two of them also expressed surprise at how their questioning was handled. One, a secretary at Rich Mountain Aviation, had given Duncan sworn statements about money laundering at the company, transcripts of which Duncan had provided to Hutchinson. But when the woman left the jury room, she complained that Hutchinson had asked her nothing about the crime or the sworn statements she'd given to Duncan. As Duncan later testified, 'She basically said that she was allowed to give her name, address, position, and not much else.' The other angry witness was a banker who had, in Duncan's words, 'provided a significant amount of evidence relating to the money-laundering operation.' According to Duncan, he, too, emerged from the jury room complaining 'that he was not allowed to provide the evidence that he wanted to provide to the grand jury.'" ROGER MORRIS & SALLY DENTON, PENTHOUSE - According to l.R.S. criminal investigator Duncan, secretaries at the Mena Airport told him that when Seal flew into Mena, I'there would be stacks of cash to be taken to the bank and laundered." One secretary told him that she was ordered to obtain numerous cashier's checks, each in an amount just under $10,000, at various banks in Mena and surrounding communities, to avoid filing the federal Currency Transaction Reports required for all bank transactions that exceed that limit. Bank tellers testified before a federal grand jury that in November 1982, a Mena airport employee carried a suitcase containing more than $70,000 into a bank. "The bank officer went down the teller lines handing out the stacks of $1,000 bills and got the cashier's checks." Law-enforcement sources confirmed that hundreds of thousands of dollars were laundered from 1981 to 1983 just in a few small banks near Mena, and that millions more from Seal's operation were laundered elsewhere in Arkansas and the nation. Bill Clinton wins back the governorship. Financial General changes its name to First American and Clark Clifford is appointed chairman. BCCI fronts begin acquiring controlling interest in banks and other American financial institutions. In Arkansas, Jim McDougal purchases Madison Guaranty Savings & Loan. I 1983 Mochtar Riady forms Lippo Finance & Investment in Little Rock. A non-citizen, Riady hires Carter's former SBA director, Vernon Weaver, to chair the firm. The launch is accomplished with the aid of a $2 million loan guaranteed by the SBA. Weaver uses Governor Clinton as a character reference to help get the loan guarantee. First loan goes to Little Rock Chinese restaurant owner Charlie Trie. State regulators warn McDougal's Madison Guarantee S&L to stop making imprudent loans. Gov. Clinton is also warned of the problem but takes no action. According to a later account in the Tampa Tribune, planes flying drugs into Mena in coolers marked "medical supplies." are met by several people close to then-Governor Bill Clinton. Although he is under investigation for drug activities, Dan Lasater's firm is given a piece of 14 state bond issues. Judge David Hale's Capital Management Services starts making loans to state figures. Jackson Stephens forms United Pacific Trading
with Mochtar Riady to do business in the U.S. and Asia. 1984 Stevens and Riady buy a banking firm and change its name to Worthern Bank with Riady's 28-year-old son James as president. Other Worthen co-owners will eventually include BCCI investor Abdullah Taha Bakhish. The Federal Home Loan Bank Board issues a negative report on Madison Guaranty, questioning both its lending practices and its financial stability. The Arkansas Securities Department begins to take steps to close it down. The Washington Times will later quote an unnamed Clinton business associate who claims the governor used to "jog over to McDougal's office about once a month to pick up the [retainer] check for his wife." Jim McDougal will claim later that Clinton on one of his jogs had asked that Madison steer business to Hillary Clinton. Foreshadowing future Wall Street interest in Clinton, Goldman Sachs, Payne Webber, Salomon Brothers and Merrill Lynch all show up as financial backers of the governor. Also on the list: future king-maker Pam Harriman. But Bill Clinton's funders include not only some of the biggest corporate names ever to show an interest in the tiny state of Arkansas but some of the most questionable. A former US Attorney will later tell Roger Morris, "That was the election when the mob really came into Arkansas politics. . . It wasn't just Bill Clinton and it went beyond our old Dixie Mafia. . . This was eastern and west coast crime money that noticed the possibilities just like the legitimate corporations did." Dan Lasater buys a ski resort in New Mexico for $20 million and uses Clinton's name (with permission) to promote it. Later, a US Customs investigative report will note that the resort is being used for drug operations and money laundering. Lasater also flies to Belize with his aide Patsy Thomasson to buy a 24,000 acre ranch. Among those present at the negotiations is the US Ambassador. The deal falls through because of the opposition of the Belize government. A private contractor for Arkansas' prison system stops selling prisoners' blood to a Canadian broker and elsewhere overseas after admitting the blood might be contaminated with the AIDS virus or hepatitis. Sales of prisoners' blood in US are already forbidden. Contaminated blood will later become a big scandal in Canada. Tens of thousands of dollars in mysterious checks begin moving through Whitewater's account at Madison Guaranty. Investigators will later suspect that McDougal was operating a check-kiting scheme to drain money from the S&L Hot Springs police record Roger Clinton during a cocaine transaction. Roger says, "Got to get some for my brother. He's got a nose like a vacuum cleaner." Roger is arrested while working at menial jobs for Arkansas "bond daddy" Dan Lasater. Barry Seal estimates that he has earned between $60 and $100 million smuggling cocaine into the US, but with the feds closing in on him, Barry Seal flies from Mena to Washington in his private Lear Jet to meet with two members of Vice President George Bush's drug task force. Following the meeting, Seal rolls over for the DEA, becoming an informant. He collects information on leaders of the Medellin cartel while still dealing in drugs himself. The deal will be kept secret from investigators working in Louisiana and Arkansas. According to reporter Mara Leveritt, "By Seal's own account, his gross income in the year and a half after he became an informant - while he was based at Mena and while Asa Hutchinson was the federal prosecutor in Fort Smith, 82 miles away - was three-quarters of a million dollars. Seal reported that $575,000 of that income had been derived from a single cocaine shipment, which the DEA had allowed him to keep. Pressed further, he testified that, since going to work for the DEA, he had imported 1,500 pounds of cocaine into the U.S. Supposed informant Seal will fly repeatedly to Colombia, Guatemala, and Panama, where he meets with Jorge Ochoa, Fabio Ochoa, Pablo Escobar, and Carlos Lehder - leaders of the cartel that at the time controlled an estimated 80 percent of the cocaine entering the United States." Ronald Reagan wants to send the National Guard to Honduras to help in the war against the Sandanistas. Massachusetts Governor Michael Dukakis goes to the Supreme Court in a futile effort to stop it but Clinton is happy to oblige, even sending his own security chief, Buddy Young, along to keep an eye on things. Winding up its tour, the Arkansas Guard declares large quantities of its weapons "excess" and leaves them behind for the Contras. Clinton bodyguard, state trooper LD Brown, applies for a CIA opening. Clinton gives him help on his application essay including making it more Reaganesque on the topic of the Nicaragua. According to Brown, he meets a CIA recruiter in Dallas whom he later identities as former member of Vice President Bush's staff. On the recruiter's instruction, he meets with notorious drug dealer Barry Seal in a Little Rock restaurant. Joins Seal in flight to Honduras with a purported shipment of M16s and a return load of duffel bags. Brown gets $2,500 in small bills for the flight. Brown, concerned about the mission, consults with Clinton who says, "Oh, you can handle it, don't sweat it." On second flight, Brown finds cocaine in a duffel bag and again he seeks Clinton's counsel. Clinton says to the conservative Brown, "Your buddy, Bush, knows about it" and of the cocaine, "that's Lasater's deal." Clinton wins re-election with 64% of the vote. 1985 Roger Clinton pleads guilty to cocaine distribution but cops a plea on more serious charges with a promise to cooperate. He will serve a short prison term. Mrs. Clinton is put on a $2,000 a month retainer by Madison Guaranty. Jim McDougal will later write in his book that the payments were in lieu of his earlier system of passing money to Bill Clinton. Ms. Clinton will later claim not to have received any retainer nor to have been deeply involved with Madison. Subsequent records show, however, that she represented Madison before the state securities department. After the revelation, she says, "For goodness sakes, you can't be a lawyer if you don't represent banks." Bill Clinton establishes the Arkansas Development Finance Authority that will be used, in the words of one well-connected Arkansan as "his own political piggy bank." Though millions of dollars are funneled to Clinton allies, records of repayments will be hazy or non-existent. AFDA brags to prospective out-of-state corporations of Arkansas' anti-union climate. Dan Lasater is a major underwriter and gets a $30 million bond deal for state police radios even as the governor's stepbrother Roger is making a bargain with the US attorney to testify against Lasater in a drug case. The New Jersey securities firm Bevill, Bresler & Schulman files for bankruptcy amid fraud charges and an estimated $240 million in losses; one of the biggest apparent losers is Stephens-dominated Worthen Bank, which holds with Bevill $52 million of Arkansas state funds in uncollateralized repurchase agreements. Arkansas state pension funds -- deposited in Worthen by Governor Bill Clinton -- suddenly lose 15% of their value because of the failure of high risk, short-term investments and the brokerage firm that bought them. The $52 million loss is covered by a Worthen check written by Jack Stephens in the middle of the night, an insurance policy and the subsequent purchase over the next few months of 40% of the bank by Mochtar Riady. Clinton and Worthen escape a major scandal. Lippo executive and Chinese native John Huang becomes active in Lippo's operations in Arkansas. China Resources pays for a Lippo-organized trip to Asia by Governor Clinton, according to a later FBI interview with John Huang. Mochtar and James Riady engineer the takeover of the First National Bank of Mena in a town of 5,000 with few major assets beyond a Contra supply base, drug running and money-laundering operations. Terry Reed is asked to take part in Operation Donation, under which planes and boats needed by the Contras "disappear," allowing owners to claim insurance. Reed has been a Contra operative and CIA asset working with Felix Rodriguez, the Contra link to the CIA and then-Vice President Bush's office. Reed later claims he refused, but that his plane was removed while he was away. Park on Meter, a parking meter manufacturer in Russellville, Arkansas, receives the first industrial development loan from the Arkansas Development Finance Authority in 1985. Some suspect that POM is doing a lot more than making parking meters -- specifically that it has secret federal contracts to make components of chemical and biological weapons and devices to carry them on C-130s for the Contras. The company later denies the Contra connection although it will admit having secret military contracts. Web Hubbell is the company's lawyer. Right next to POM, on land previously owned by it, is an Army reserve chemical warfare company. A series of checks to Clinton and his campaign
are endorsed and deposited in Madison S&L. One of the checks
-- a cashiers check in the amount of $3,000 -- has the name of
a 24-year-old college student on it. When informed of this in
1993, the then-student, Ken Peacock, will deny having made any
such donation. Asa Hutchinson leaves the US Attorney's office to make an unsuccessful bid for US Senate. According to police sources, Hutchinson had been aware of what was happening at Mena and the investigation into it, but did nothing. Hutchinson is replaced by Mike Fitzhugh who is reluctant to let investigators Russell Welch of the state police and William Duncan of the IRS present evidence of money-laundering to a grand jury. Jim McDougal sets up a late controversial land deal called Castle Grande. According to Ambrose Evans-Pritchard, on
June 4, 1985, the diary of Arkansas State police lieutenant Russell
Welch says that an agent from the DEA "informed me in strictest
confidence that it was believed, within his department, that
[major drug transporter] Barry Seal is flying weapons to Central
and South America. In return he is allowed to smuggle what he
wanted back into the United States". 1986 Journalist Evans-Pritchard will describe the Arkansas of this period as a "major point for the transshipment of drugs" and "perilously close to becoming a 'narco-republic' -- a sort of mini-Columbia within the borders of the United States." There is "an epidemic of cocaine, contaminating the political establishment from top to bottom," with parties "at which cocaine would be served like hors d'oeuvres and sex was rampant." Clinton attends some of these events. According to former CIA officials David MacMichael and Ray McGovern, Barry Seal, a former TWA pilot who had trained Nicaraguan Contra pilots in the early eighties, and who is facing a long sentence after a federal drug conviction in Florida, makes his way to the White House's National Security Council to make the following proposition to officials there. He would fly his own plane to Colombia and take delivery of cocaine. He would then make an emergency landing in Nicaragua and make it appear that Sandinista officials were aiding him in drug trafficking. Seal made it clear that he would expect help with his legal problems. The Reagan White House jumps at the offer. Seal's plane is flown to Wright-Patterson Air Force Base, where it was fitted with secret cameras to enable Seal to photograph Nicaraguan officials in the act of assisting him with the boxes of cocaine. On January 17, the U. S. Attorney for the Western District drops a money laundering and narcotics-conspiracy charges against associates of drug smuggler Barry Seal over the protests of investigators Russell Welch of the state police and Bill Duncan of the Internal Revenue. In a letter to U.S. attorney general Edwin Meese the Louisiana attorney general wrote, Barry Seal "smuggled between $3 billion and $5 billion of drugs into the U.S." The operation goes as planned. The photos are delivered to the White House, and a triumphant Ronald Reagan goes on national TV to show that the Sandinistas are not only Communists but also criminals intent on addicting America s youth. A Federal Home Loan Bank Board audit describes Madison as financially reckless, rife with conflicts and on the brink of collapse. It says that the S&L's records are so poor that examiners often could not discover the "real nature" of transactions. In August federal regulators will remove McDougal from the board of Madison. Capital Management Services Inc., owned by David Hale, makes an SBA-approved loan of $300,000 to Susan McDougal, sole owner of an advertising firm called Master Marketing. The loan will never be repaid. Hale will later claim that Clinton and Jim McDougall pressured him into making the loan. Dan Lasater, Arkansas bond don who is close to Clinton, pleads guilty to cocaine distribution charges. The case also involves Clinton step brother Roger, who testifies against Lasater in a plea agreement. Both Lasater and Roger Clinton will serve brief prison terms. While Lasater is in prison his affairs will be run by Patsy Thomasson, who later becomes a White House aide.
Seal is scheduled to testify at the trial of Jorge Ochoa Vasques. But on February 19, shortly before the trial is to begin, Seal is murdered in Baton Rouge gangland style by three Colombian hitmen armed with machine guns who attack while he seated behind the wheel of his white Cadillac in Baton Rouge, La. The Colombians, connected with the Medellin drug cartel, are tried and convicted. Upon hearing of Seal's murder, one DEA agent says, "There was a contract out on him, and everyone knew it. He was to have been a crucial witness in the biggest case in DEA history." According to the London Telegraph's Ambrose Evans-Prichard, "Seal was probably the biggest importer of cocaine in American history. Between 1980 and his assassination in 1986, his team of pilots smuggled in 36 metric tons of cocaine, 104 tons of marijuana and three tons of heroin, according to a close associate of Seal. The sums of money involved were staggering. At his death, Seal left a number of operational bank accounts. One of them, at the Cayman Islands branch of the Fuji Bank, currently has an interest-earning balance of $1,645,433,000. " ROGER MORRIS & SALLY DENTON, PENTHOUSE - Seal himself spent considerable sums to land, base, maintain, and specially equip or refit his aircraft for smuggling. According to personal and business records, he had extensive associations at Mena and in Little Rock, and was in nearly constant telephone contact with Mena when he was not there himself. Phone records indicate Seal made repeated calls to Mena the day before his murder. This was long after Seal, according to his own testimony, was working as an $800,000-a-year informant for the federal government.
ROGER MORRIS & SALLY DENTON, PENTHOUSE - Tax records show that, having assessed Seal posthumously for some $86 million in back taxes on his earnings from Mena and elsewhere between 1981 and 1983, even the l.R.S. forgave the taxes on hundreds of millions in known drug and gun profits over the ensuing two-year period when Seal was officially admitted to be employed by the government. ROGER MORRIS & SALLY DENTON, PENTHOUSE - Arkansas state trooper Larry Patterson [would later testify] under oath, according to *The London Sunday Telegraph*, that he and other officers "discussed repeatedly in Clinton's presence" the "large quantities of drugs being flown into the Mena airport, large quantities of money, large quantities of guns," indicating that Clinton may have known much more about Seal's activities than he has admitted. Whitewater fails to file corporate tax returns for this year. James Riady resigns as president of Worthen Bank. Clinton is reelected governor. Roger Clinton is paroled. 1987 According to the McDougals, the Whitewater files are transferred to the Clintons. In the 1992 campaign, the Clintons will say they can not find the records. Clinton gives Arkansas Traveler awards to Contra operatives Adolpho and Mario Calero and John Singlaub. Accordind to Ambrose Evans Prichard of the London Telegraph, on August 1987 Arkansas police lieutenant Russell Welch receives a secret teletype from the FBI office in Chicago advising him that "a CIA or DEA operation is taking place at the Mena airport". The Sunday Telegraph has a copy of the telex. In late 1987, Welch writes in his diary,. "I feel like I live in Russia, waiting for the secret police to pounce down. A government has gotten out of control. Men find themselves in positions of power and suddenly crimes become legal. National Security?!" Two boys, Kevin Ives and Don Henry, are killed in Saline County and left on a railroad track to be run over by a train The medical examiner will initially rule the deaths accidental, saying that the boys were unconscious and in a deep sleep due to marijuana. The finding will be punctured by dogged investigators whose efforts are repeatedly blocked by law enforcement officials. Ultimately, the bodies will be exhumed and another autopsy will be performed, which finds that Henry had been stabbed in the back and Ives beaten with a rifle butt. Although no one will ever be charged, the trail will lead into the penumbra of the Dixie Mafia and the Arkansas political machine. Some believe the boys died because they accidentally intercepted a drug drop, but other information obtained by the Progressive Review suggests the drop may have dispensed not drugs but cash, gold and platinum -- part of a series of sorties through which those working with US intelligence were being reimbursed. According to one version, the boys were blamed in order to cover up the theft of the drop by persons within the Dixie Mafia and Arkansas political machine. Ives mother will later charge that high state and federal officials participated in a coverup: "I firmly believe my son and Don Henry were killed because they witnessed a drug drop by an airplane connected to the Mena drug smuggling routes." Prosecutor Jean Duffey will later tell talk show host in answer to whether law enforcement people were involved in the train death murders: "I believe the law enforcement agents were connected to some very high political people because they have never been brought to justice and I don't think they ever will be. I think they are protected to avoid exposing the connection...There have been several murders of potential witnesses. Anyone who could have solved this murder many years ago has been systematically eliminated." Nine persons reportedly having information on the Ives-Henry murders will end up dead themselves. Keith McKaskle will express fear for his life because of the "railroad track thing" and tell his parents good-bye before his murder. An inmated will report being offered $4,000 to kill McKaskle. A suspect in the Ives-Henry murders will die in what initially is thought to have been a robbery but turns out to have been a set-up. Boonie Bearden vanishes without a trace. It is rumored he knows exactly what had happened at the tracks. James Milam is found decapitated; nonetheless, the state medical examiner, Fahmy Malak - who also called the Ives-Henry deaths accidental -- will declare the death to be of natural causes. Jeff Rhodes will be shot, burned, and have his hands and feet partially sawed off. Terry Reed's plane is returned but, according to his account, he is asked not to report it because it might have to be "borrowed" again. Reed later says that he had become aware that the Contra operation also involved drug running and had gotten cold feet. He also believed that large sums of drug money were being laundered by leading Arkansas financiers. He went to Felix Rodriguez and told him he was quitting. Reed was subsequently charged with mail fraud for having allegedly claimed insurance on a plane that was in fact hidden in a hanger in Little Rock. The head of Clinton's Swiss Guard, Capt. Buddy Young, will claim to have been walking around the North Little Rock Airport when "by an act of God" a gust of wind blew open the hangar door and revealed the Piper Turbo Arrow. Whitewater fails to file corporate tax returns for this year. Harken Energy, with George W Bush on the board, gets rescued by aid from the BCCI-connected Union Bank of Switzerland in a deal brokered by Jackson Stephens, later to show up as a key supporter of Bill Clinton. The deal was also pushed along by another Clinton friend, David Edwards. Edwards will bring BCCI-linked investors into Harken deals including Abdullah Bakhsh, purchases $10 million in shares of Stephens dominated Worthen Bank. 1988 Conservative Democrats begin a series of nearly 100 meetings held at the home of Pam Harriman to plot strategy for the takeover of the Democratic Party. Donors cough up $1,000 to attend and Harriman eventually raises $12 million for her kind of Democrat. The right-wing Dems will eventually settle on Bill Clinton as their presidential choice. Charles Black, a prosecutor for Polk County, which includes Mena, meets with Governor Clinton and asks for assistance in a probe of illegal activities. "His response," Mr. Black will tell CBS News later, "was that he would get a man on it and get back to me. I never heard back." Following pressure from then-Arkansas Rep. Bill Alexander, the General Accounting Office opens a probe in April 1988; within four months, the inquiry is shut down by the National Security Council, according to a later report by Micah Morrison of the Wall Street Journal. Several congressional subcommittee inquiries sputter and stop. The Senate Committee on Foreign Relations issues a report that describes the seriousness of the Barry Seal disaster. That report says, "Law enforcement officials were furious that their undercover operation was revealed and agents' lives jeopardized because one individual in the U.S. government - Lt. Col. Oliver North- decided to play politics with the issue . . . Associates of Seal, who operated aircraft service businesses at the Mena, Arkansas airport, were also targets of grand jury probes into narcotics trafficking. Despite the availability of evidence sufficient for an indictment on money laundering charges and over the strong protests of state and federal law enforcement officials, the cases were dropped." 1989 Madison S&L is closed by federal regulators at an eventual cost to taxpayers of $47 million. Jim McDougal is indicted for bank fraud Manhattan District Attorney Robert Morgenthau begins a wide-ranging probe of BCCI. . FDIC hires Webster Hubbell of the Rose firm to press its case concerning Madison. Rose law firm, now representing FDIC, sues an accounting firm for $60 million, blaming its audits for causing millions of dollars in losses to the S&L. Although the job earns Rose $400,000 in fees and expenses the accounting firm will eventually settle by paying the government just $1 million. What will later be known as the Vast Right Wing Conspiracy begins on the left as a group of progressive students at the University of Arkansas form the Arkansas Committee to look into Mena, drugs, money laundering, and Arkansas politics. Dan Short, a bank president, is abducted from his home in Benton Co., Arkansas and allegedly forced to open the State Bank in Noel, MO were $71,000 is allegedly taken. Three days before his abduction, he had told friends that he had been laundering drug money and was in trouble.
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VINCE FOSTER
Major drug trafficker
Barry Seal, under pressure from the Louisiana cops, relocates
his operations to Mena, Arkansas. Seal is importing as much as
1,000 pounds of cociane a month from Colombia according to Arkansas
law enforcement officials. He will claim to have made more than
$50 million out of his operations. As an informant, Seal testified
that in 1980-81, before moving his operation to Arkansas, he
made approximately 60 trips to Central America and brought back
18,000 kilograms. In 1996 the Progressive Review will report:
"The London Telegraph has obtained some of the first depositions
in ex-CIA contract flyer Terry Reed's suit against Clinton's
ex-security chief - and now a high- paid FEMA director - Buddy
Young. According to the Telegraph's Ambrose Evans-Pritchard,
"Larry Patterson, an Arkansas state trooper, testified under
oath that there were 'large quantities of drugs being flown into
the Mena airport, large quantities of money, large quantities
of guns.' The subject was discussed repeatedly in Clinton's presence
by state troopers working on his security detail, he alleged.
Patterson said the governor 'had very little comment to make;
he was just listening to what was being said.'"
BARRY
SEAL FOLLOWING HIS MURDER
Eight months after
the murder, Seal's cargo plane is shot down over Nicaragua. It
is carrying ammunition and other supplies for the Contras from
Mena. One crew member, Eugene Hasenfus, survives.