Ex-Gov. Jim Guy Tucker’s former business partner pleaded guilty Thursday to a Whitewater fraud charge that he and Tucker conducted a sham bankruptcy that saved them $2 million in taxes.
Boston businessman William J. Marks Sr. said Tucker and Tucker’s lawyer - who are scheduled for trial March 9 - used falsified documents to understate the value of cable television systems Marks and the former governor owned in Texas and Florida.
Marks told U.S. District Judge Stephen M. Reasoner he had full knowledge of the plan.
“I am guilty,” Marks said.
The judge accepted the plea bargain, in which Marks admitted taking part in a conspiracy and agreed to “truthfully and fully cooperate” with prosecutors. He will be expected to testify against Tucker and lawyer John Haley of Little Rock.
Other terms of the agreement include recommendations for home detention, probation, payment of back taxes and restitution to other parties, if necessary.
“The fact is, in criminal jurisprudence, the first person to come forward, to cooperate with the government, gets the best terms,” Reasoner said.
He delayed formal sentencing until after the trial of Tucker and Haley, but indicated that Marks would not have to go to federal prison.
Marks could have faced five years and a $250,000 fine on the conspiracy charge to which he pleaded guilty.
Outside court, Independent Counsel Kenneth W. Starr was clearly pleased.
“It’s always helpful when someone who now by his own admission under oath makes it clear that he was a knowing participant and can shed light on what happened in these … transactions,” he said.
In return, prosecutors agreed to drop two charges against Marks that he and Tucker lied to obtain a $300,000 loan from a federally backed lending company. They won’t be dropped formally until Tucker and Haley are tried, prosecutors said.
Tucker, Marks and Haley, who was Tucker’s personal attorney at the time, were accused of conducting a sham bankruptcy so Tucker and Marks could reduce their federal tax liability. Haley received $100,000 for his work, the prosecutors said.
The men held purchase agreements for the cable systems’ sale, but documents filed in bankruptcy court in 1987 made it appear the systems were worth much less. In court, prosecutors said the men avoided $2 million in taxes.
Prosecutors said the $300,000 loan was obtained from a firm run by Whitewater figure David Hale, who testified at Tucker’s federal trial last year that President Clinton benefited from an illegal loan Hale made to Susan McDougal. Clinton denies Hale’s accusation.
Tucker resigned after he was convicted. James and Susan McDougal, partners with President and Hillary Rodham Clinton in the Whitewater development, were convicted in the same case.
The charges against Tucker, Marks and Haley were made by a grand jury working with Starr’s wide-ranging probe into Clinton’s business dealings. They have nothing to do with the Whitewater land development that was at the center of Starr’s investigation, but came into Starr’s view while prosecutors looked in other areas.
Tucker succeeded Clinton as Arkansas governor.