Whitewater Weekly
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James McDougal 1941 - 1998
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James McDougal, President Clinton's former business partner in the Whitewater land development project, died Sunday at a Fort Worth hospital. He was 57. McDougal died in a federal medical prison. He had suffered a variety of ailments, including heart disease and blocked arteries, but the medical examiner did not immediately state the cause of death. He was serving a three-year prison sentence for fraud. |
| Although the Whitewater probe, and McDougal's subsequent fraud conviction,
killed their friendship, the president said he was sorry to hear his old
friend had died.
"I am saddened to learn about Jim McDougal's death today," Clinton said. "I have good memories of the years we worked together in Arkansas, and I extend my condolences to his family." McDougal died at 12:01 p.m., according to the Tarrant County Medical Examiner's Office. McDougal has been an invaluable witness in the Whitewater investigation for the past year and a half. Since 1996 after his conviction on 18 felonies, McDougal has been the most important cooperating witness in Whitewater prosecutor Kenneth Starr's investigation. When he began cooperating with Starr, McDougal changed his testimony and began corroborating the story of Whitewater figure David Hale that the two men had met with Clinton in 1986 and planned a taxpayer-backed loan that has never been repaid. Some $50,000 of the loan proceeds were used to bolster the Clintons' failing Whitewater real estate development. McDougal also was a key witness as prosecutors investigated the fraudulent Castle Grande real estate development south of Little Rock on which Hillary Rodham Clinton conducted work as a partner in the Rose Law Firm. And last spring, Whitewater prosecutors came across evidence that provided some support for an allegation by McDougal that Bill Clinton in the early 1980s took out a loan from McDougal's savings and loan to support Whitewater. In his videotaped testimony in 1996 at McDougal's trial, the president denied ever having taken out a loan from the S&L. In an interview last year, McDougal said that he and Clinton agreed to get the loan off the S&L's books by shifting the loan to an Arkansas businessman to pay off instead of Clinton. In a bizarre discovery, a canceled cashier's check for $27,000 from McDougal's S&L to Clinton was found in the trunk of an abandoned car in 1997 by a garage mechanic and turned over to Starr's office. The cashier's check tracked the story that McDougal had been telling prosecutors about a loan to Clinton, who denies knowing anything about it. The cashier's check was not endorsed. |
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