Death of American Virtue - Ken Gormley [33]
With his physical and mental health deteriorating from the stress, Jim McDougal would increasingly see his misfortunes through a lens of paranoia. For one, he came to believe (according to his own later account) that Susan and Bill Clinton were having an affair. He directly confronted Susan about his suspicions, disbelieving her denial. Second, the bank examiners continued to hound him, and he assumed the worst in their motives. They were going to “close the Savings and Loan,” and “keep me from filing as a candidate for Congress.”
By spring of 1985, Susan McDougal had begun a relationship with a Madison employee, Pat Harris, to whom she had confided about the dysfunctional state of her marriage. Now she decided to spend the summer with Harris in Dallas to sort out her life. As Susan recalled with an uncomfortable laugh, “Jim helped me pack my things into the car and gleefully sent me off. He said I had become.… a downer. I wasn’t fun anymore.” By this point, she recalled, Jim McDougal was in “full manic bloom.”
In November 1985, the Yellville Mountain Echo, a local newspaper near Flippin, published a list of delinquent taxpayers. The list included Whitewater Development Corporation. Governor Clinton personally called Jim and Susan (the latter of whom had returned from Dallas and had rented her own apartment) and told them this was unacceptable—the press was insinuating that the governor hadn’t paid his taxes. What were they going to do to rectify the situation? Jim replied sarcastically, “If it’s not going to work, why don’t you guys just get out of it?” To this, Bill replied, “Sounds good to me. Why don’t you run it past Hillary?”
Jim McDougal secretly hoped to get the Clintons out of the Whitewater deal. He wanted to take the tax losses from this belly-up corporation and offset profits from a new $550,000 investment in property he had just purchased from International Paper to stop some of the hemorrhaging. As he looked at it, the Clintons hadn’t paid a nickel out of their own pockets. They didn’t need the losses. “By God,” McDougal later said, “this needed to get done.”
So Jim asked Susan to “run the papers” over to Hillary. Susan dutifully drove to the Rose Law Firm, thinking this was a simple, amicable parting among business partners. When Susan handed over the document to Hillary for her signature, the First Lady of Arkansas “looked at the document as if it were a snake.” As Susan interpreted the body language, Mrs. Clinton “had a great deal of respect for people who were highly educated and she could be quite charming and effervescent with them, but she didn’t waste herself on fools, and I pretty much believe that’s how she had me tagged.” Hillary threw the document on the desk. Susan retrieved it, feeling sick to her stomach. It was evident that Jim had not called in advance; Hillary still didn’t believe that Whitewater was going broke. “I mean, to have been sent off by McDougal on this fool’s errand, I was just stunned.”
As soon as Susan returned to the Madison Guaranty office, Jim ranted, “All these years of our paying for them … and now Hillary is annoyed with me?” His face turned beet red as he spat out the words: “Well, f——them.”
Hillary may not have been convinced that Whitewater had gone bust, but she had deduced for the first time that McDougal’s business empire was on shaky footing. So in July 1986, Mrs. Clinton took a step toward extricating herself and Bill from the morass by returning a batch of files and Madison’s monthly retainer check of two thousand dollars to McDougal. In a cover note designed to protect her flank, Mrs. Clinton stated that the Rose Law Firm’s representation “has been for isolated matters and has not been continuous or significant.” She now declined to accept any further prepayment of legal fees.
Hillary Clinton also sent a blind carbon copy of that letter to Vince Foster, a close friend and partner at the firm, whom she had enlisted to help