Hillary Clinton in Arkansas
and JEFFREY ST. CLAIR
Second in a three-part series.
In 1990, the National Law Journal ran profiles of "the 100 Most Influential Lawyers in the United States". Hillary Clinton was on the list, and for years she would publicly boast that the Journal had named her one of "the nation’s 100 top lawyers". Finally, the editor of the National Law Journal, Patrick Oster, wrote to Arkansas’ first lady–as she still was in 1991–testily pointing out that the word "influential" is not synonymous with "top" or "best"–the latter two words used by Mrs. Clinton interchangeably.
By "influential" the Journal’s profile writer, Peggy Fisk, had meant a lawyer plentifully endowed with corporate and political connections, which Mrs. Clinton certainly enjoyed in Arkansas where she had become a partner of the Rose Law Firm in 1977, amid the dawn of her husband’s political career as he began his terms as governor of the state. By the late 1980s, Hillary Clinton was sitting on the board of Wal-Mart, with the rest of Arkansas’ business elite crowding her Rolodex. Hillary ignored Oster’s letter of correction, instructing her staff to continue to use the word "best" in invoking the Journal’s profile. She continued to do so for years. Oster was still writing her a decade later about her misuse–including an editorial column in the Journal in 2000, when she was running for the U.S. Senate.
In fact, Mrs. Clinton was not a particularly good lawyer and would have had trouble making any honest list of the 100 best lawyers in Little Rock. In their political biography, Her Way: The Hopes and Ambitions of Hillary Rodham Clinton, Jeff Gerth and Don Van Natta Jr. tell the story about the National Law Journal and also probe her lawyerly skills when she was at Rose Law. She only tried five cases and confided to Vince Foster–another Rose Law partner–that she was terrified of juries. So Foster had to accompany her to court. Because of her lack of prowess in the courtroom, she had to make her way at Rose Law by working her connections as the State’s first lady to bring in clients, and even then her annual partner’s share was mostly below $100,000–the lowest in the firm and very small potatoes for one of the hundred most influential lawyers in America.
The Clintons’ joint income–at least the visible portion–was not substantial: the state paid Bill $20,000 a year, no doubt under the assumption he’d even up the score with kickbacks. So money was on Mrs. Clinton’s mind. Her search for extra income led her into associations that were later to cause endless trouble.
First came the ties with Jim McDougall that were to flower into the Whitewater property speculation and later a huge federal investigation into that deal, unprofitable to the Clintons who had hoped–like many Americans–to make a big score in real estate and solve their money problems at a single stroke.
When things were looking bleak for the Clintons after the Arkansas voters threw Bill out in 1980 after his first term as governor (Arkansas had two-year gubernatorial terms until 1986), she fanned her friendship with James Blair, general counsel of Tyson Foods. Bill Clinton’s Little Rock chief of staff, Betsey Wright, recalled that Hillary "loved Jim Blair. Blair was her money man". It was Blair who set up an account for Hillary Clinton with Refco, a small brokerage firm run by Robert "Red" Bone, Don Tyson’s former bodyguard and a professional poker player. "Red" Bone got her into cattle future trades. She put up $1,000 and left the trading to Mr. Bone who’s often assumed to have arranged the trades with Blair, to Mrs. Clinton’s advantage. Nine months later, the $1,000 had swollen with miraculous speed into a profit for Mrs. Clinton of $99,000.
When Bill Clinton ran for the presidency in 1992, reporters noted a mysterious spike in the couple’s net worth in the early 1980s and quizzed Mrs. Clinton about it. Her first untruthful explanation was that there had been a windfall in the form of an unexpected gift of cash from her parents. But, aware that the questions wouldn’t stop, she issued ferocious order to her staff about any leakage of her tax records. She told them that if they released the tax records showing the commodity trades, they’d "never work in Democratic politics again".
The records were stored in the Clinton Campaign headquarters in Little Rock, in a locked room for which only Hillary, Bill and Betsey Wright had keys. Also in "the Box Room" under lock and key were details of Bill’s sexual capers and Hillary’s dealings at Rose Law. An internal ’92 campaign memo, quoted by Gerth and Van Natta, cited 75 "problem files" in the materials in the Box Room, two-thirds of which related to them as a couple or to Hillary alone. When David Ifshin, the campaign’s legal counsel, asked for the key to the room to assess the likely problems, Bill Clinton told him: "We can’t open our closet, we’ll get crushed by the skeletons".
But two reporters in particular kept pressing: Gerth of the New York Times and James Stewart of the Wall Street Journal. Gerth finally got evidence of the $99,000 profit on a $1,000 trade and confronted Mrs. Clinton. Shorn of the family gift story, Mrs. Clinton avowed that she’d spent her days poring over cattle prices in the Wall Street Journal, that the $99,000 was the fruit of these studies and that she’d quit commodity trading in 1980, after she’d got pregnant with Chelsea, because the trading "was too nerve-wracking". Unfortunately for this story, details later surfaced amid prosecutor Kenneth Starr’s investigation during the Clinton presidency, showing that in 1981 Hillary had made a trade netting her $6,500 and she hadn’t reported the profit to the IRS.
Amid the Starr probe, the Clintons encouraged the Wall Street Journal’s Stewart to do a book on what they saw as their unfair persecution on the Whitewater deal. As he researched this work, published as Blood Sport, Stewart took a hard look at the commodity trades and pressed Mrs. Clinton for an explanation for all the contradictory stories. Hillary blamed everything on her staff and told Stewart that her own statements should simply be "accepted at face value".
In the mid-1990s, federal special prosecutor Kenneth Starr’s investigative team in Little Rock was headed by a veteran of the courtroom, Hickman Ewing Jr. Grilled by Ewing before a grand jury on July 22, l995, Mrs. Clinton used the words "I can’t recall" in answer to 50 questions. Later, Ewing told Starr that he rated Mrs. Clinton’s testimony as deserving an F Minus, and he wanted to indict the nation’s first lady. He was contemplating a number of counts, headed by two major lines of enquiry. First came her handling of the commodity trades and her failure to report her profits to the IRS. Second came her conduct amid the collapse of Madison Guaranty Savings and Loan, owned by Jim McDougal. Relevant to this affair were Hillary Clinton’s billings as a legal counsel to Madison Guaranty. These were germane to the question of whether Hillary was being truthful in denying she’d done any legal work for the bank. After many adventures, the records finally came into the hands of Starr’s team and showed that Hillary Clinton had billed Madison Guaranty at the rate of $150 an hour, with a total of 60 hours of supposed work on the Castle Grande deal. The prosecutors had the billings but were never able to look at Hillary’s time sheets. Her secretary removed them from the Rose Law Firm in 1992, and it’s generally assumed the first lady destroyed them.
Webb Hubbell, a partner at Rose Law and one of Hillary’s closest friends, fell from his eminence as deputy attorney general in Clinton’s first term and was convicted and imprisoned on charges of padding by $394,000 his legal billings at Rose Law. Ewing was convinced that Hillary had been doing the same thing. He prepared an indictment. It was the most serious brush with disaster that Hillary ever faced. Paradoxically, she was saved by the indiscretions of her faithless mate. Even as Ewing was urging Hillary’s indictment, Starr was delightedly fingering what he conceived to be the object that would doom Bill Clinton, the semen-stained dress retrieved from Monica Lewinsky’s closet by Starr’s team. The only thing the prurient Starr cared about was nailing Clinton for sexual misconduct, and so he told the disappointed Ewing that there would be no indictment of Hillary.
Even as Hillary Clinton was making trouble for herself and Bill in her legal and business dealings, she was reinventing Bill as a politician. Defeat in 1980 after his first two-year gubernatorial term was a cataclysmic event. Bill called it a "near death experience". According to Gerth and Van Natta, it was "the only time anyone has seen Hillary Clinton cry in public". Bill was inclined to throw in the political towel and go back to being a law professor in Fayetteville, where he would doubtless be roosting in tenured bliss to this day, plump and pony-tailed, fragrant with marijuana and still working his way through an endless roster of coeds. But in 1980, over a funereal breakfast of instant grits, Vernon Jordan brokered a deal: Bill Clinton would give up being a southern populist in the mold of Orval Faubus, six-term governor of Arkansas. Southern populism involved offending powerful corporations. Bill lost in 1980 because not only had he taken the un-populist course of hiking the rate on car registration, he’d angered Weyerhaeuser and Tyson Foods. So, for his comeback he would remake himself as a neoliberal. Hillary Rodham would give up insisting on keeping her maiden name and become Hillary Clinton. The man charged with supervising the Clintons’ makeover was selected by Hillary: Dick Morris, a political consultant known for his work for Southern racists like Jesse Helms. Morris ultimately guided President Bill Clinton into the politics of triangulation, outflanking the Republicans from the right on race, crime, morals posturing and deference to corporations. As Hillary said in 1980, "If you want to be in this business, this is the type of person you have to deal with".
Bill Clinton duly pushed aside the Playboy centerfolds and pored over Dick Morris’ polling data, trimming his positions to suit. He recaptured the governorship in 1982 and as a reward appointed his wife to head a special task force charged with reforming Arkansas’ education system, at that time widely regarded as the worst in the country. The plan Mrs. Clinton came up with showcased teacher testing and funding the schools through a sales tax increase, an astoundingly regressive proposal since it imposed new costs on the poor in a very poor state while sparing any levies on big corporations. The plan went through. Arkansas’ educational ranking remained abysmal, but Hillary won national attention as a "realistic Democrat" who could make "hard" choices, like taxing welfare mothers.
While enjoying this limelight, Mrs. Clinton was invited onto the board of Wal-Mart as the first woman director, the only Rose Law partner at that time to have accepted an outside position. She was also asked by Robert Mac Crate, the president of the American Bar Association, to head up a commission on how to implement a resolution by the ABA to increase the profile of women and minorities in the legal profession. Mac Crate told Gerth and Van Natta that Mrs. Clinton declined, saying that she didn’t want gender equity to be linked with race. She prevailed. Two years later, she agreed to head an ABA commission examining the status in the legal profession. Issues of race were not to be scrutinized.
By 1987, Hillary was wearying of life as first lady of Arkansas and began to press her husband on the 20-year plan they had made long before, whose consummation would be a successful run by Bill for the U.S. presidency. Dick Morris was assigned the task of running polls on Bill’s chances. Betsey Wright was charged with sizing up the "problems". Morris’ news was grim. The Democratic Party was not sold on the prospect of the governor of Arkansas as their nominee in l988. Betsey Wright sat down with Bill and Hillary and read out to both of them a list of dozens of women Wright believed Bill had had some kind of fling with during his gubernatorial years. Bill’s head sank into his hands, and he mumbled, "I’m not going to run for president and I don’t want to run for re-election as governor either". As Wright recalled later, Hillary stood up and cried, "If you’re not gonna run for re-election, I’m gonna run". "Okay", said Bill, he’d run again. It was Hillary’s call.
The next four years were spent gearing up for the White House run and trying to bury Bill’s past. Amid these efforts Hillary made two huge mistakes, which haunted the Clintons throughout the 1992 campaign and their White House years. Clinton’s opponent in the 1990 governor’s race was Sheffield Nelson, a Little Rock lawyer. Nelson had accumulated a dirt file on Bill, detailing his sexual escapades and the couple’s Whitewater real estate transactions. But he never used this material in the campaign. Nonetheless, in 1990 Hillary Clinton publicly excoriated Nelson, calling him "a vindictive and very bitter man". The reason for Hillary’s assault was that Nelson, in the climactic weeks of the race, had saturated the airwaves with a series of campaign ads charging Clinton with being a tax-and-spend Democrat. The ads had some effect, and the Clintons had to borrow $100,000 from the Jackson Stephens-controlled Worthen Bank to mount a counteroffensive ad campaign of their own. Nelson, seething at Hillary’s onslaught, duly became bitter and vindictive and, as Clinton’s presidential campaign got under way, he began to leak ripe details from the file he had kept closed in l990.
Her second mistake also came in 1990, when Jim McDougal was facing trial over the collapse of Madison Guaranty Savings and Loan. In his hour of need, he asked Bill to testify as a character witness in his trial. Though Bill was willing to do so, Hillary was adamant that he should avoid any association with McDougal. She successfully persuaded Bill to decline. McDougal was acquitted, but he never forgave the Clintons for their disloyalty. He too began to leak damaging stories about Whitewater to Gerth and other reporters from his rusting trailer in Arkadelphia. Thus, even as she kindled her husband’s presidential bid, Hillary helped spark the fires of financial and sexual scandal that almost destroyed his presidency.
Click here for Part One: The Making of Hillary Clinton.
Click here for Part Two: Hillary and the Arkansas Elite.
ALEXANDER COCKBURN and Jeffrey St. Clair’s latest book is End Times: the Death of the Fourth Estate, published by CounterPunch/AK Press.