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Whitewater scandal

In 1978 Arkansas Attorney-General Bill Clinton and Hillary Rodham Clinton joined a partnership with James and Susan McDougal to buy and develop riverfront land as vacation homes: the Whitewater Development Corporation. The plan failed and the Clintons reported a loss of more than 140,000. McDougal also owned Madison Guaranty Savings and Loan Association, which, like many such institutions, went under in the 1980s partly as a result of fraudulent loans, and Hillary was the lawyer for Madison Guaranty. In addition, many opposed to the Clintons believed they had paid McDougal hush money Following the chronicling of the Whitewater case in The New York Times in 1992, the Republican-led Congress called for a special prosecutor. In August 1994 Kenneth W. Starr was appointed independent counsel (replacing the more moderate Robert Fiske) and he quickly expanded the hearings to encompass the firing of White House travel office clerks (Travelgate), the suicide of the Clinton’s friend/advisor Vince Foster (Filegate), and then the Paula Jones sexual harassment case against Clinton and the Monica Lewinsky affair. Besides mushrooming into the 1999 impeachment case against Clinton, the Starr grand jury investigations achieved few indictments. The McDougals both spent time in prison (James died of heart failure a few months before his scheduled release, while Susan defied the court and was imprisoned for contempt). Clinton’s successor as governor of Arkansas, Jim Guy Tucker, also spent eighteen months in home detention for his involvement in Madison Guaranty.

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