sas’s Ozark Mountains. The four borrowed about
$200,000 to buy the land and transferred ownership
to the Whitewater Development Corporation. By the
time the lots were prepared for sale in late 1979, inter-
est rates had reached 20 percent and most prospec-
tive buyers could not afford to buy such lots. Rather
than take an immediate loss, the owners decided to
build a model home and wait for more favorable mar-
ket conditions. Over the next few years, James
McDougal asked the Clintons for various payments
for interest and other expenses that the Clintons did
not question as passive partners. In the end, it is in-
controvertible that the Clintons lost tens of thou-
sands of dollars on their Whitewater investment.
Subsequently, McDougal bought Madison Guar-
anty Savings and Loan and engaged in some ques-
tionable transactions, which resulted in the collapse
of the institution and McDougal’s subsequent con-
viction on federal charges associated with those
transactions. The Resolution Trust Corporation’s
law firm’s federal investigation into the Madison in-
stitution’s collapse found no wrongdoing on the
part of the Clintons. Nonetheless, Attorney General
Janet Reno appointed special prosecutor Robert
Fiske to investigation the Whitewater matter. During
his tenure, he was unable to find any wrongdoing
during his investigation.
In August, 1994, a panel of three federal judges
appointed Kenneth Starr as an independent coun-
sel under the Independent Counsel Reauthoriza-
tion Act of 1994. Charges of hostile partisanship on
the part of the panel and the independent counsel
abounded but did not deter the aggressive prosecu-
tion by Starr, who carried the so-called Whitewater
investigations into a wide variety of alleged wrongdo-
ing on the part of the Clintons that were labeled
Travelgate, Filegate, Vince Fostergate, Troopergate,
and finally the Monica Lewinsky scandal. None of
these investigations produced any evidence of
wrongdoing on the part of the Clintons except for
the Lewinsky matter, which was featured promi-
nently in the Starr Report to Congress on the White-
water investigation and resulted in the perjury and
obstruction of justice charges that were the subject
of the Clinton impeachment effort. After the im-
peachment effort failed to produce a conviction,
Starr resigned as independent counsel. His replace-
ment issued a final report stating that there was no
evidence suitable for indictment in any aspect of the
Whitewater investigation.
Impact The Whitewater investigation and the
other politically motivated allegations consumed a
great deal of media attention during the Clinton
years. Nearly all allegations were determined to be
false. The politically charged atmosphere of the
Clinton years undoubtedly limited the time Presi-
dent Clinton could devote to national problems and
may have significantly limited his ability to make
needed changes in national policy.
Further Reading
Brock, David.Blinded By the Right: The Conscience of an
Ex-Conservative. New York: Three Rivers Press,- Brock, as a reporter for theAmerican Specta-
tor, triggered the events that led to Bill Clinton’s
impeachment trial. Brock was a crucial actor in
the “Arkansas Project” that attempted to find any
allegation, true or not, with which to smear the
Clintons until he became convinced that the
916 Whitewater investigation The Nineties in America
Whitewater independent counsel Kenneth Starr speaks at a news
conference on February 21, 1997, in Washington, D.C. His in-
vestigation began with Whitewater and expanded to the Monica
Lewinsky scandal. (AP/Wide World Photos)