Death of American Virtue - Ken Gormley [23]
Jim McDougal also surprised his bride by announcing that they were going into the real estate business together.
THE drive north from Little Rock, along Highway 65, where Jim McDougal would discover the property that would later land him in jail, provided unsurpassed scenic beauty. After leaving the modest skyscrapers of the city behind and crossing the banks of the Arkansas River, a traveler would enter the foothills of the Ozarks, climbing up through Conway, Bee Branch, and then the town of Clinton. The Ozarks, because they are older than the Rockies, are much gentler in slope, providing ample opportunities for spectacular views. Scattered thickets of ponderosa pines rise up in patches. At higher altitudes, the road is flanked by majestic oaks, sycamores, ash, maples, sweet gums, and hickories. In the spring, Queen Anne’s lace and other wildflowers form a colorful carpet along the two-lane highway. An occasional chicken house (for brooding) or strawberry farm occupies a niche in the rocky terrain. Hogs can be spotted on the hillsides, rooting for food. For the most part, however, God created this stretch to remain unsullied by human hands. That was the attraction for James B. McDougal. He planned to construct an elite politicians’ getaway in this remote yet beautiful piece of his home state.
Bill Clinton, when he was first approached by McDougal in 1978 about investing in a piece of property whose name would one day become synonymous with scandal, viewed it as a nonevent. When Clinton first moved to Little Rock and won the election for state attorney general, he and Hillary had invested in a small real estate project that McDougal had put together. “I made a little money,” remembered the former president of the initial land deal, “not much money, because I didn’t have much to invest. And it seems that it was a pittance now by today’s standards, but it was nice, you know, because I was only making twenty-six thousand dollars a year as attorney general.”
At this time in the 1970s, investors were raking in money hand over fist in Arkansas land development. Interest rates were kept under control by Arkansas law, land was cheap, and population growth in the cities spurred a huge demand. Clinton explained the lure of the Ozarks: “In the mountains, you had all these retirees who wanted to come down from the Middle West, who wanted a warmer place to retire but still a place with four seasons.” Unless economic conditions changed abruptly, Clinton believed, “it seemed as if it was almost impossible to lose money doing it.”
So when Jim McDougal came to Bill and Hillary Clinton and asked them to become partners in the Whitewater venture, it seemed like a no-lose venture. “He expected, Jim did, that when we subdivided the land and, you know, put in the roads and did all the things that were necessary and sold the lots, that installment payments on the lots would more than cover our note at the bank and eventually we’d turn quite a profit,” said Clinton. “And I think that it would have happened, but for what happened in the late seventies in America, when there was this explosion of interest rates.” All of a sudden, it was near impossible for average folks to afford “an extra lot in the Ozark Mountains.” Within several years, Whitewater and everything else McDougal touched had gone belly-up.
Then-Governor Clinton never imagined that this investment would turn into a scandal that would imperil his political existence. Indeed, he found such a scenario “inherently improbable,” since his dealings with the McDougals were minimal and both he and Hillary eventually “lost money on the land deal.”
Even after he was elected president, Clinton viewed the reincarnated Whitewater controversy, and the appointment of a special prosecutor