Jim McDougal

James B. "Jim" McDougal (August 25, 1940 – March 8, 1998), a native of White County, Arkansas, and his wife, Susan McDougal (the former Susan Carol Henley), were financial partners with Bill Clinton and Hillary Clinton in the real estate venture that led to the Whitewater political scandal of the 1990s. Starting in 1982, McDougal operated Madison Guaranty Savings and Loan Association.

Biography

Jim McDougal was a Democrat and a former aide to the late U.S. Senator James William Fulbright. He later was a political science professor at Ouachita Baptist University in Arkadelphia. Another Arkansas politician, Bob Cowley Riley, lieutenant governor from 1971 to 1975, also taught political science at OBU, as did the Democrat pollster and political scientist Jim Ranchino, who dropped dead of a massive heart attack on the night of the 1978 general election in which Clinton was initially elected as governor.^[1]

In 1982, McDougal made a failed bid for the United States House of Representatives against the Republican incumbent John Paul Hammerschmidt in Arkansas's northwesterly Third Congressional District. Hammerschmidt polled 133,909 votes (66 percent) to McDougal's 69,089 (34 percent). Coincidentally, Clinton himself had been defeated by Hammerschmidt in this same district in 1974. McDougal entered the political arena again at the height of the Whitewater controversy, running in the 1994 Democratic Primary in Arkansas' Fourth Congressional District in South Arkansas. McDougal ran last in a three-man race, getting twenty-three percent of the vote in a primary won by State Senator Jay Bradford of Pine Bluff, who in turn lost the general election to first-term Republican Congressman Jay Dickey in 1994's "Battle of the Jays".

Controversy

On April 14, 1997, James McDougal was convicted of eighteen felony counts of fraud and conspiracy charges. The counts had to do with bad loans made by Madison in the late 1980s. As his savings and loan was federally insured, the $68 million was paid by taxpayers. During the McDougal case, special prosecutor Kenneth Starr requested a reduced sentence for McDougal because of McDougal's assistance in the investigation.

He joined with his wife, from whom he was later divorced, and the Clintons to borrow $203,000 to buy land in the Ozark Mountains for vacation homes. When the development failed, he attempted to cover the losses with S&L funds. McDougal was prosecuted for fraud in 1984 and hired the Rose Law Firm which Hillary Clinton was a partner of to defend him. McDougal held a fundraiser that paid off Clinton's then campaign debt of $50,000. Madison cashier's checks accounted for $12,000 of the funds raised.

Jim McDougal was also found by federal regulators to have made fraudulent loans with regards to his Castle Grande project that was a real estate development about 10 minutes south of Little Rock. The project was a 1,050-acre (4.2 km²) lot where he hoped to build microbrewery, shopping center, a trailer park and other future projects in 1985. The sale price was $1.75 million. State regulations prohibited McDougal from investing more than 6% of his S&L assets in the project, so he put in $600,000 of Madison Guaranty money and had Seth Ward put in the difference, $1.15 million. The money Ward borrowed from Madison Guaranty was in the form of a "non-recourse loan".

Death

McDougal died of a heart attack at the Federal Correctional Facility in Fort Worth, Texas, aged 57.

References

External links

• Washington Post time line
• CNN whitewater report
• CNN report
• Caught In The Whitewater - CBS
• CNN Report: McDougal had no access to his heart medication nor doctors just before his death
• Hickman Ewing reduced Jim McDougal's prison sentence in exchange for testimony that Susan McDougal refused to confirm.
• Rose Law Firm Billing Records, PBS, WGBH educational foundation, Frontline
• Labaton, Stephen. "Appraiser on Madison Loans in Plea Accord", New York Times, December 6, 1994
• Snopes.com on Jim McDougal's death