Clinton's Arkansas / Cash Voting

...The source says the subject of the bogus cashier' s checks first flared up during the campaign, when a non-contributor called the campaign to complain about a contribution falsely attributed to him...

...He was running a massive check-kiting scheme...

...The source says that the 1984 camDaniel Wattenberg is an investigative writer for The American Spectator...

...This "walking around money," he says, was handled by Betsey Wright, the governor's chief of staff and 1984 campaign manager, and by three political aides who followed Clinton to Washington: Undersecretary of Agriculture Robert Nash, Federal Highway Administrator Rodney Slater, and Democratic National Committee operative Carroll Willis...

...According to published reports, the fundraiser collected at least two Madison cashier's checks of $3,000 each from nominal donors (Ken Peacock, son of Madison board member Charles Peacock III, and former Arkansas Senator J. William Fulbright) who have denied making the donations attributed to them...

...He says candidate Clinton was fully aware that large sums of cash were coming from a federally insured S&L and that somehow the money flow circumvented federal rules on reporting cash transfers...

...The source would in turn release it to Nash, Slater, or Willis for distribution to its intended beneficiaries...

...Clinton's lapse from public virtue, he says, was motivated by his perception of political necessity rather than personal greed...

...Gerth reported that federal investigators suspect the withdrawals might have been structured to circumvent the Bank Secrecy Act...

...He said that he cannot remember who in the campaign disbursed 60 The American Spectator December 1994 the cash that he distributed for legitimate purposes like hiring cars and drivers...

...Then, says the source, "Clinton would bitch to Nash about it: `That motherf---er hasn't spent that money...

...They would take someone who had given the campaign some money and bogus up the amount of the (continued on page 86) The American Spectator December 1994 61 CLINTON'S ARKANSAS (continued from page 61) check," he says...

...It was just a means to an end...

...has previously provided detailed information that I have been able to verify extensively, and was in an excellent position to observe Clinton first-hand...

...During the critical years 1984 and 1985, the source spent as much time by Clinton's side as any staff member, and worked in close proximity to the top staff in the governor's office and the re-election campaign...

...He hasn't spread it around!'" The source recalls that Wright would frequently refer to the campaign's under-the-table payroll...

...In an interview, Carroll Willis denied knowledge of any efforts by the campaign to get around CTR requirements...

...The subject of CTRs came up in conversation between Clinton and the source, who believes that Clinton knew of the campaign's efforts to obtain the cash without filing the reports requiredby law...

...This contretemps, according to the source, prompted Clinton to explain that "that was the way to get money out of Madison...

...On at least one occasion, the source was able to determine that the cash payment far exceeded the permitted $50, because it was doled out in stacks of "banded money" fresh from the bank...

...In an August 1994 New York Times story, reporter Jeff Gerth revealed that the 1990 campaign withdrew $30,000 in cash from the Bank of Perry County (owned by Clinton friend Herbie Branscum) in four tranches of $7,500 each...

...McDougal would make up the difference between the funds actually contributed by the nominal donor and the inflated amount on the checks...

...There have been monies for GetOut-the-Vote activities which is traditional and perfectly legitimate," he said...

...Although the account held less than $300, someone made out a check for $18,000, ostensibly as a loan payment to the Citizens Bank and Trust of Flippin, Arkansas...

...0 86 The American Spectator December 1994...

...The Associated Press later reported that RTC investigators alleged in a criminal referral to the Justice Department in September 1993 that those orphaned cashier's checks and two other donations totaling $12,000 were illegally diverted from Madison?nd that neither the $12,000 nor an additional $2,000 from real estate agent Chris Wade were listed on a May 1986 Clinton campaign finance report detailing campaign fundraising activity in the preceding year...

...But he/she (for the purposes of prose elegance, the source will hereafter be referred to as "he," "him," etc...

...The source remembers having written several small contribution checks during this election cycle and suspects that Wright may have "dummied up" the amount...

...Just three months into 1985, McDougal was bouncing around a check for $30,000, apparently charged initially to his Gold Mine Springs partnership...

...If so, then the campaign not only exceeded contribution limits but also used taxpayer-insured deposits to do so...

...Some investigators believe McDougal cashed out on the scheme on April 4, 1985, when he hosted a fundraiser in his thrift's lobby to retire Clinton's 1984 campaign debt...

...Responding to a Gerth query by letter, Clinton aide Bruce Lindsey wrote that "cash withdrawals" had been made in support of get-out-the-vote efforts...

...The charms of James and Susan McDougal wore thin when they began to tar Clinton with their failing savings and loan...

...I didn't have a thing to do with that campaign," said Smith...

...The cash withdrawals were unreported, according to the source, to conceal that the cash was being used to pay black political, religious, and community leaders to mobilize their congregations for Clinton...

...McDougal and his Madison Guaranty Savings and Loan were crucial to Clinton, he explains, because they provided a constant flow of cash for the campaign...

...In fact, the source recalls, Clinton would marvel at McDougal's uncanny ability to make "McDollars" materialize: "He would make remarks to the effect that 'McDougal is a goofy SOB, but he can sure raise a lot of money.' " In fact, the source claimed Clinton used to say, "I never had a cash cow like that before...

...Clinton knew that the source carried the cash, as well the governor's briefcase and billfold, explains the source...

...The overdrafts grew larger and larger ashe siphoned more money from his thrift...

...Clinton and I talked about having to report that money," says the source...

...He says that Wright and the 1984 Clinton campaign frequently tapped a compliant McDougal for extra "contributions" in the form of bogus cashier's checks...

...T he source was personally responsible for guarding the cash...

...Nor did they appear on any other campaignfinance report to surface publicly...

...There was nothing in the few cashier's checks that would have raised anybody's suspicions," she told the AP...

...He never thought about lining his pockets," the source comments...

...Clinton would then receive calls, which he would usually take immediately, from irate individuals who had not received their promised cuts...

...Clinton personal lawyer David Kendall described the allegations as "false, anonymous, and scurrilous...

...Wright or Nash would hand paper bags of cash over to the source for safekeeping in the governor's mansion or the official car...

...Now a witness has stepped forward with a good part of the answer...

...I would talk to Bill, and I would say, 'How can we get by with this, because they report these transactions?' And he would say, in gist, 'Not where we get it from' or 'Don't worry about that, there's no problem.'" Problems occasionally cropped up when those at the top of the distribution chain would not "spread it out" as they were supposed to, according to the source...

...Betsey knew all about this," says the source, who adds that the campaign collected many more orphan Madison cashier's checks than the two discovered to date...

...Investigators for the Resolution Trust Corporation have already concluded that this shifting of overdrafts from one account to another explains McDougal's miraculous ability to raise cash...

...The source states unequivocally that Clinton was privy to the financial manipulations that his campaign carried out in conjunction with McDougal...

...The source, in fact, handled paper bags full of the money himself...

...In describing get-out-the-vote activities, Mr...

...But it did say that `cash withdrawals and expenditures were made with respect to these activities' because of 'the small dollar amount of each individual expenditure.'" Although the source was not involved in the 1990 campaign, his account of the doings in 1984 and 1985 match the story that investigators have been extrapolating from Madison Guaranty business records...

...The checkbook for the Whitewater Development Company account shows an unusual spate of activity starting on October 30, 1984, the eve of the election...

...Wright, Nash, and Slater did not return my phone calls...

...T he source reveals a previously undisclosed technique to siphon the thrift's funds while avoiding detection...

...I don't know how we should have known there was a problem...

...Arkansas law says that you cannot make cash payments to individuals for more than $50, and we tried to stay within the realm of the law...

...One of these checks is made out to the Bank of Cherry Valley, which the witness identified as a source of cash withdrawals for the campaign's "walking around money...

...He acknowledged distributing campaign cash as a normal part of his grassroots organizing work in the black community but says that "none of that amounts to anything close to vote buying" and maintains that the campaign scrupulously observed the law governing campaign cash expenditures...

...paign made a series of cash withdrawals of less than $10,000 from Madison and the Bank of Cherry Valley (owned by Clinton friend Maurice Smith) expressly for the purpose of getting around the Bank Secrecy Act, which requires Cash Transaction Reports (CTRs) for cash transactions over $10,000...

...See James Ring Adams's "Beyond Whitewater," TAS, February 1994...

...Betsey would say things like `We'll just have to spread a little money around' or 'That's the real world, that's how things happen,— he remembers...

...Money from other of McDougal's projects flows back into the account over the next few weeks, bringing the balance just barely in the black, but then two more large payments push it back into an overdraft of nearly $10,000...

...Betsey Wright denied to the AP that the campaign had concealed the suspicious donations...

...A fog surrounded the whole affair while Clinton's motives remained unexplained...

...This source has requested anonymity, since he/she is in a delicate legal position...

...They would use a relative's name on the check to disguise that Madison was the source of the money," says the source...

...Lindsey's letter did not specifically say whether any such expenditure had amounted to more than $50," according to Gerth's story...

...McDougal's lawyer, Sam Heuer, didn't return phone calls seeking comment...

...T he source's account is consistent with the reported activity of the 1990 Clinton campaign...