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President Bill Clinton's Whitewater Testimony

By The Associated Press -- Page 1 of 7

May 9, 1996

The transcript from President Clinton's videotaped testimony at the fraud and conspiracy trial of James and Susan McDougal and Gov. Jim Guy Tucker in Little Rock, Ark.:

James McDougal attorney Sam Heuer: Please state your name.
A: Bill Clinton.

Q: What is your occupation at this time?
A: President of the United States.

Q: President Clinton, please tell the jury about your career leading up to the point in time that you became President of the United States.
A: Well, I graduated from law school in 1973 and I went home to Arkansas, and I found a position teaching at the university. And I was there from 1973 until I assumed office as Attorney General in 1977, January. During that time, I ran for Congress and lost, I married my wife, and then made a successful race for attorney general. In 1978, I was elected governor; in 1980, our daughter was born and I was defeated for governor. And I practiced law for a time, and then in 1982, I was re-elected governor. I served as governor from 1982 until I was elected president in 1992. Shortly after I was elected president, I resigned the office and the lieutenant governor, now Governor Tucker, became governor. And you know the rest.

Q: Mr. President, do you know defendant James McDougal?
A: I do.

Q: Please tell the jury when and how you got to know Mr. McDougal.
A: We met, oh, about 30 years ago when he was running Senator Fulbright's office in Little Rock and I was a student at Georgetown working for Senator Fulbright part-time on the staff of the Senate Foreign Relations Committee here in Washington.

Q: Was there ever a time when Mr. McDougal worked for you while you served as governor of the state of Arkansas?
A: Yes, there was. In my first term, he was my economic development liaison. He had a lot of important responsibilities. He worked with the Arkansas Industrial Development Commission, he worked with other agencies that dealt with economic matters. He was kind of a troubleshooter on projects designed to advance our economy and get more jobs for our people. And he worked for - not the entire first term, not the whole two years, but for most of the two-year period between '79 and '80 he was working in the Governor's office.

Q: Have you ever been engaged in a business relationship with Mr. McDougal?
A: Yes. We had two.

Q: Would you please tell the jury about those?
A: In 1977, Mr. McDougal, who was - at that time had been, I think, for some time, engaged in various real estate development projects, asked me if I wanted to invest a small amount of money in one in Pulaski County. And I did, I invested, as I recall, about $2,800 for about a year and a half, and I liquidated the investment and made about $5,000. So I had a profit of $2,100, it was a nice profit. Then after that, Mr. McDougal invited Hillary and I to invest with Jim and Susan in 230 acres of land in Marion County which was unimproved land near the White River, and is now called Whitewater land. And we did that. And we invested in that in 1978, and I was in that investment until 1992.

Q: Were you aware of Mr. McDougal's purchase and ownership of a savings and loan in Little Rock, Arkansas in the 1980s?
A: Yes. I became aware at some point that he bought a savings and loan, I think it was maybe in Woodruff County, and then got permission to move it down to Little Rock in the early 1980s.

Q: Mr. President, did you ever have any loan relationship with Mr. McDougal's savings and loan known as Madison Guaranty concerning your investments?
A: No, sir, I did not, I never borrowed any money from Madison Guaranty.

Q: Did you ever cause anybody to borrow any money for your benefit, Mr. President?
A: No, I did not.

Q: Did you ever have any personal loan with Madison Guaranty at any time, Mr. President?
A: No, sir, I didn't.

Q: Did you ever campaign with or for Jim McDougal?
A: I did once. Mr. McDougal had, as I said, worked for Senator Fulbright, that's what he was doing when I met him 30 years ago, and had supported others who ran, but in 1982, he, himself, ran for Congress in the third congressional district, the same district where I had run eight years earlier in 1974. And it was also in that year that, as I said previously, I ran for governor. Having been defeated in 1980, I was trying to get back in office. He won the Democratic primary, and after a very difficult battle, so did I. And so, in the general election, from time to time we would be together when the Democratic Party would sponsor rallies in that part of the state, I would be there, he would be there, we would be campaigning together, we would be endorsing each other, and it was an interesting campaign. But I remember that, I think - I think that's the only time.

Q: Are you familiar with a former judge of Arkansas who now lives in Conway called Jim Johnson?
A: Yes, I am.

Q: During the time that you served as governor of Arkansas, Mr. President, was Mr. Johnson a supporter of yours?
A: Oh, no.

Q: Mr. President, please characterize your relationship with Justice Jim Johnson while you were in politics in the state of Arkansas, sir.
A: I think a fair characterization would be that it was one of opposition, both his opposition to me and my opposition to him. The first campaign I worked in, I supported a candidate for governor who was running against Justice Johnson, that was 1966. In 1968, Justice Johnson ran against Senator Fulbright, and I, along with Mr. McDougal, worked against him then, in that we had severe differences of opinion, and I vividly remember his characterization of Senator Fulbright was soft on communism, for example, it was that sort of emotional aspect to the campaign. Then at some point in the 1980s, after I became governor, Justice Jim Johnson became a Republican, and therefore, more explicitly opposed to me. Now, if you would see him on the street, he would be just as friendly as could be, you know, and you would have a cordial conversation, but I was never under any illusions that - he and I were basically polar opposites in terms of what we thought was good for our state, good for our people, and good for our future. And then when I ran for president, he was exceedingly active with some of the extremist groups that were stirring up negative stories about me, my record as governor, and indeed trying to create an impression of our state that was unfavorable. So, there is almost an unbroken strand of opposition between me and Jim Johnson that starts in 1966 and ends in 1992. And I don't suppose it has ended, but at least that was the last dramatic chapter in his vigorous involvement in the machine, that sort of publicity machine against my candidacy for president in 1992.

Q: Has he continued to criticize you since you have obtained the office of president of the United States?
A: I think he has, but to be honest, I haven't paid a lot of attention to it.

Q: Okay. If you would, please, describe your relationship with Jim McDougal in the 1980s.
A: Well, in the early '80s, I didn't see Jim much in the first couple of years, because he didn't live in Little Rock. But sometime after his race for Congress, which was 1982, sometime after that, maybe 1983, he moved to Little Rock, he had purchased the savings and loan, he had moved the S&L to Little Rock, he set it up in downtown Little Rock, less than a mile from the Governor's mansion. So, after he moved there and began to get active in trying to rebuild that neighborhood and establish relationships in the community, I would see him more frequently.

Q: Are you familiar with a former municipal judge by the name of David Hale?
A: Yes, I am.

Q: Please tell the jury when you became acquainted with him.
A: I think I met David Hale sometime in the mid-1970s, and I believe it had something to do with the Jaycees. He had - at some time in that period, he was the national president for the Jaycees, he was from Arkansas. I was a member of the chapter at Fayetteville, and as a candidate for office, I would, from time to time, go to the conventions of the Jaycees. So, I believe I met him at one of those, somehow in connection with his Jaycee activities.

Q: Did you ever have a business relationship with Mr. Hale, either personally or through his company, known as Capital Management Services?
A: No.

Q: Did you ever receive any loan from Mr. Hale personally or from his business known as Capital Management Services?
A: No, I didn't.

Q: You said earlier that you ran for political office in Arkansas in 1976, I believe; is that correct?
A: Yes, 1976, I was a candidate for attorney general. I won the Democratic primary, and the only time in my life I had no Republican opposition, so I was elected.

Q: Did you ever ask Mr. Hale at that time to serve as your campaign manager?
A: No, I didn't do that. Now, let me say, Mr. Heuer, to make a full disclosure, if, in fact, I saw David Hale in 1976, I knew that he was an active Jaycee, I'm certain that I asked him for his support if I saw him. I asked every person I saw in the first half of 1976 to support me and do whatever they could for me. So, I'm certain - I'm sure if I did see him, I asked him to help me, but I didn't ask him to be my campaign manager.

Q: Was your opponent George Jernigan at that time?
A: Yes, George Jernigan was one of my opponents. George Jernigan and Clarence Cash were my opponents.

Q: Okay. In late '85 or 1986, were you aware of any plans that Mr. Hale had to increase a capital base in his business known as Capital Management Services?
A: No, I wasn't.

Q: Are you familiar with an office that Jim McDougal established sometime in 1986 in the south part of Pulaski County on property that was commonly referred to as Castle Grande Estates?
A: I know Mr. McDougal in 1986 had an office on 145th Street -

Q: That's the same.
A: - at south Pulaski County. I don't know if that's the same place, but I know he had an office out there.

Q: Did you ever visit him on 145th Street?
A: Yes, I did, one time.

Q: And tell me, you were known in Little Rock to enjoy jogging; is that correct?
A: I did, I did then, I do now.

Q: Tell the jury if you've ever jogged from the mansion to Mr. McDougal's office on 145th Street at any time.
A: No, sir, I didn't do that. In fact, I couldn't have done that.

Q: Okay. When you visited Mr. McDougal at his office on this singular occasion, were you wearing jogging shorts?
A: No. I was dressed up, I had a shirt and tie on, coat and tie. I remember the day quite well, because I was going to a Siemens-Allison plant, it is a big German plant, they make electrical motors in Arkansas, and they had announced an expansion of the plant. They were going to hire about 200 more people, as I recall, and they were good jobs, and we needed them, and I had worked hard on that, and I was looking forward to the day. And I had never been out that way before. I thought I had been on every road in the state, but to the best of my knowledge, I had never been out that way before. And Mr. McDougal's office was in a trailer, as I recall, on the way out there. And I stopped there for a few minutes, either going to this event or coming from this event, but I don't remember, to be honest, whether I was going to or coming from, I just know I stopped there.

Q: Do you remember what date that was?
A: I have refreshed my memory by resorting to my own records, and I know now it was in June of 1986.

Q: Okay. What was the weather like, if you recall?
A: Well, as I recall, it was warm. It normally is in Arkansas in June, and I remember it was a sunny day, because we - I remember that from the Siemens-Allison event.

Q: Was anyone with you at that time?
A: I believe Bob Nash was with me, because he was my principal economic development aide, and then the trooper who was assigned to duty that day was driving us.

Q: Did you have any contact in any shape, form, or fashion with David Hale at that visit to -
A: No, I didn't. He wasn't there.

Q: All right. Were you ever present in Mr. McDougal's office on 145th Street when a discussion occurred about financial assistance from David Hale or his Capital Management Services Company involving any other business that you or Mr. McDougal may have had?
A: No, sir, never.

Q: Were you ever present at any time for any meeting between Jim McDougal and David Hale?
A: Never, I never was present at any meeting.

Q: Were you ever present when there was any discussion of getting any kind of loan from David Hale or his SBIC?
A: No.

Q: Did you ever make a statement that your name could not appear on any loan documents or financial documents related to any type of loan from David Hale or his SBIC?
A: Absolutely not.

Q: Did you ever get assurance from Jim McDougal that your name would be secreted from any loan documents pertaining to any loan from David Hale or his SBIC?
A: No, we never had any conversation about it at all.

Q: Did you ever tell David Hale that you had property in Marion County, Arkansas, that you could use as collateral or security for a loan from him?
A: I did not do that, no.

Q: Did you ever ask David Hale to make you a loan?
A: No.

Q: Did you ever ask David Hale to make Jim McDougal a loan?
A: No.

Q: Did you ever ask David Hale to make Susan McDougal a loan?
A: No, I didn't.

Q: Did you ever ask David Hale to make Jim Guy Tucker a loan?
A: No.

Q: Did you ever, in any shape, form or fashion, put any pressure on David Hale for the purpose of obtaining a loan or for the purpose of causing him to make loans through his SBIC?
A: I did not put any pressure on David Hale.

Q: Do you have any idea what he is talking about in regard to these loans that he has come up with?
A: No, sir. I tried to keep - he has told two or three different versions of this, and I've tried to keep up with these different stories, but all I know is that any suggestion that I tried to get any money from him or I tried to keep that a secret or I put any pressure on him, these things are simply not true, they didn't happen.

Q: In late 1985 or early 1986, were you aware or made known of any purported agreement whereby Madison Guaranty Savings and Loan would advance money to Mr. Hale or his company in some shape, form, or fashion as agreed to between Mr. Hale and Jim McDougal whereby Mr. Hale would then make loans to various people?
A: That was a long question, Mr. Heuer.

Q: I understand.
A: It has got a short answer. No, I didn't know anything about Mr. Hale's financial business.

Q: And the same question for Susan McDougal?
A: No, I did not.

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