Death of American Virtue - Ken Gormley [31]
On election night, McDougal was trounced by Hammerschmidt. He garnered a paltry 34 percent of the vote, a poor showing for an Arkansas Democrat. At this same time, a big loan went bad at the bank in Kingston, sending McDougal into the first of many depressions that required hospitalization.
McDougal’s personal papers later revealed that during this period, he started to believe that there was a conspiracy by his political rivals to bring him down. After bank examiners appeared to investigate irregularities, he wrote to his lawyer: “In October at the crucial time in the campaign, they arrived [at Madison Bank & Trust in Kingston] but they weren’t the regular examiners. They were a special team of examiners. They stayed the entire month of October making it almost impossible to campaign.” Increasingly, McDougal was coming to believe that the world was out to get him. The bank examiners, for their part, left with note pads recording more questions than answers.
Bill Clinton handily won another term as governor. He still viewed McDougal as a friend, but the two men had only infrequent interaction. Increasingly, it was clear that McDougal was suffering from problems that were hampering his judgment. Sitting in his New York home, President Clinton later described McDougal with a sigh of nostalgia, his voice growing softer: “Oh, I loved [Jim]—we had so much fun in the late sixties and early seventies. Working on politics, debating these issues, you know, trying to help Senator Fulbright until he was defeated.” Clinton remembered candidate McDougal, in the happy time before McDougal’s world collapsed, as a good speechmaker “in an old-fashioned way.” Contrary to later media accounts that portrayed McDougal as a raving lunatic, Clinton remembered a period when McDougal was on top of the world. “He was bright, you know, truly bright,” said Clinton. “He just—he suffered from mental illness.” By the early 1980s, Clinton recalled, it was increasingly evident that McDougal “had delusions of grandeur, I think, which got him into a lot of the financial trouble he was in.”
DETERMINED to return to the central orbit of Arkansas’s business world, McDougal transferred the principal office of his Madison Guaranty S&L to an abandoned laundry building in the Quapaw Quarter section of Little Rock. Located on South Main Street, the building sat in a blighted area filled with abandoned structures in a “derelict” state.
McDougal loved the location, smack in the middle of a poor black population in need of access to banks. The area was filled with “winos and porn houses.” What better place for economic revitalization? McDougal later explained proudly to an Associated Press reporter, in interview notes that survived McDougal’s death: “That’s where they were grinding people down. No other bank would go down to that part of Main Street. Nobody’d go there but the blacks, but I did.” The location was also ideal because it abutted a stately old section of Little Rock filled with grand homes, a few blocks from the governor’s mansion. This put McDougal within striking distance of the political power base of the state. McDougal poured money into renovating the building in a trendy Art Deco style that won design awards for its splendor. He built himself a glass-encased