“Whitewater” refers to U.S. president William Jefferson Clinton’s alleged financial wrongdoings in a labyrinthine Arkansas land deal during the late 1970s and 1980s. The scandal, which emerged in 1992, also generated various conspiracy theories accusing Clinton and his wife Hillary of going to great lengths, including murder, to cover up incriminating evidence.
The Whitewater controversy originated in 1978, when Clinton, who served as Arkansas attorney general, his wife, and friends James and Susan McDougal created the Whitewater Development Corporation to turn 220 acres of riverfront property into vacation homes.
According to financial filings by the Clintons, they eventually lost $40,000 in this partnership. James McDougal’s other business, the Madison Savings and Loan Association, for which Hillary Clinton did legal work as a partner at the Rose Law Firm in Little Rock, also went bankrupt because of several fraudulent loans.
Both of the McDougals served jail time for illegal loan and land schemes, and a federal grand jury headed by special prosecutor Robert F. Fiske, Jr., then Kenneth W. Starr, then Robert Ray, investigated the Clintons from 1994 to 2000 to determine their involvement in this fraudulent bankruptcy.
On 20 September 2000, Ray eventually concluded that there was insufficient evidence to indict the Clintons, thus ending the six-year Whitewater investigation, but various incidents during the investigation sparked many conspiracy theories according to which the Clintons actively, and successfully, covered up their past illegal activities.
Among other bizarre incidents, Hillary Clinton insisted that she miraculously discovered in January 1996 in her White House private quarters documents regarding her legal work for Madison Savings and Loan. These documents had been subpoenaed by Whitewater investigators two years before and claimed lost.
Bill Clinton insisted that he did not know about a fraudulent $300,000 federally backed loan to Susan McDougal, even though McDougal invested part of the money in the Whitewater Development Corp., and even though Little Rock judge David Hale, who made the loan, testified that he lent money under Clinton’s orders. Susan McDougal, who denied Clinton’s involvement and served eighteen months in jail for contempt of court, allegedly refused to talk because Clinton pressured her to do so.
Friends of Bill Clinton gave more than $700,000 to former associate attorney general and partner in the Rose Law Firm Webster L. Hubbell, whom Whitewater investigators were interrogating, suggesting that they hoped to buy Hubbell’s silence.
Hubbell was sentenced for tax evasion and misleading testimony, but he continually maintained that the Clintons were not involved. The Supreme Court cleared him of the misleading testimony charge because evidence obtained under an immunity agreement was used in the case.
The most ardent conspiracy theorists also argue that White House counsel and Clinton friend Vince Foster, who shot himself on 20 July 1993 in Fort Macy Park, Virginia, under the strain of the Whitewater investigation and other scandals, was in fact murdered on Clinton’s orders. Suspicions arose when documents disappeared from Foster’s office following his death, and when his suicide note was not released for thirty hours.
Evidence remains insufficient to substantiate these conspiracy theories. Various federal investigators, including Starr himself, concluded that Foster killed himself. Republican senators, after months of Whitewater hearings, uncovered no hard evidence that the Clintons had committed illegal wrongdoings.
In 1998, Starr shifted the focus of his investigation to another scandal, investigating whether Clinton and White House intern Monica Lewinsky had had sexual relations, then lied about it.
This investigation proved more fruitful. The day before leaving office, Clinton reached a deal with independent prosecutor Robert Ray under which he confessed to having given false testimony regarding his relationship with Ms. Lewinsky, lost his law license for five years, and paid a $25,000 fine.
Republican congressmen’s eagerness to investigate various scandals, including Whitewater and others involving Lewinsky, Paula Jones, the White House travel office, FBI files of prominent Republicans, and Arkansas state troopers, along with prosecutors’ inability to substantiate many of these charges, pushed Hillary Clinton to declare on 27 January 1998 that there was an ongoing plot, not to cover up Clinton’s misdeeds, but to smear him and his wife as part of a “vast right-wing conspiracy.”