Clintons’ Whitewater Partners, Arkansas Governor Indicted

A federal grand jury Thursday indicted the Clintons’ business partners in the Whitewater land venture and the governor of Arkansas on 21 counts of fraud, conspiracy and making false statements in obtaining millions of dollars of federally backed loans in the 1980s.

The indictment, handed up by a federal grand jury in Little Rock, Ark., charged that the two partners, James B. McDougal and his former wife, Susan, concocted a series of fraudulent loans from Madison Guaranty Savings & Loan, an Arkansas savings association at the center of the Whitewater investigation. Madison, which had been owned and operated by the McDougals, collapsed in 1989 at a cost to taxpayers of more than $60 million.

Gov. Jim Guy Tucker of Arkansas, who was indicted in June on separate charges, was named in 11 new counts Thursday. In the 1980s, Tucker was a lawyer and a businessman who both did legal work for Madison and borrowed money from it.

Neither President Clinton nor his wife, Hillary, were named in the indictment, and in a statement issued in Little Rock by the independent counsel in the Whitewater inquiry, Kenneth W. Starr, he noted that the indictment “does not charge criminal wrongdoing by President William Jefferson Clinton or First Lady Hillary Rodham Clinton.”

Prosecutors in the counsel’s office declined to say whether there would be any further indictments, noting the investigation is continuing.

But part of Thursday’s indictment involves a $300,000 federally backed loan made by a former municipal judge who has accused Clinton of improperly pressuring him twice into making the 1986 loan to Susan McDougal.

The judge, David L. Hale, has already pleaded guilty to two felony counts in the case and has been cooperating with investigators. Hale is expected to be one of the government’s most important witnesses against the McDougals and Tucker, and his account that Clinton pressed him to make the loan is likely to arise at any trial.

Clinton has disputed Hale’s version of events.

The White House issued a statement after the indictment was released noting what Starr said concerning the Clintons and adding, “We continue to cooperate fully and hope that the independent counsel will conclude his inquiry expeditiously.”

The Clintons sold their interest in Whitewater to McDougal in 1992, and in recently concluded House of Representatives hearings on the subject, Republicans said the couple were the beneficiary of a corrupt scheme run by Arkansas insiders at taxpayers’ expense.

Whatever the outcome of his investigation, Starr is expected to write a report to the special court that appointed him that would reveal what was discovered about the Clintons’ financial dealings in Arkansas.