Sunday, August 05, 2007

ARKANSAS CONNECTIONS

[Since the Democrats seem determined to nominate Hillary Clinton, we thought we would offer a little historical context from our time line of Arkansas and the Clintons, with particular emphasis on those things the mainstream media forgot to tell you]

1985

Roger Clinton pleads guilty to cocaine distribution but cops a plea on more serious charges with a promise to cooperate. He will serve a short prison term.

Mrs. Clinton is put on a $2,000 a month retainer by Madison Guaranty. Jim McDougal will later write in his book that the payments were in lieu of his earlier system of passing money to Bill Clinton. Ms. Clinton will later claim not to have received any retainer nor to have been deeply involved with Madison. Subsequent records show, however, that she represented Madison before the state securities department. After the revelation, she says, "For goodness sakes, you can't be a lawyer if you don't represent banks."

Bill Clinton establishes the Arkansas Development Finance Authority that will be used, in the words of one well-connected Arkansan as "his own political piggy bank." Though millions of dollars are funneled to Clinton allies, records of repayments will be hazy or non-existent. AFDA brags to prospective out-of-state corporations of Arkansas' anti-union climate. Dan Lasater is a major underwriter and gets a $30 million bond deal for state police radios even as the governor's stepbrother Roger is making a bargain with the US attorney to testify against Lasater in a drug case.

The New Jersey securities firm Bevill, Bresler & Schulman files for bankruptcy amid fraud charges and an estimated $240 million in losses; one of the biggest apparent losers is Stephens-dominated Worthen Bank, which holds with Bevill $52 million of Arkansas state funds in uncollateralized repurchase agreements.

Arkansas state pension funds -- deposited in Worthen by Governor Bill Clinton -- suddenly lose 15% of their value because of the failure of high risk, short-term investments and the brokerage firm that bought them. The $52 million loss is covered by a Worthen check written by Jack Stephens in the middle of the night, an insurance policy and the subsequent purchase over the next few months of 40% of the bank by Mochtar Riady. Clinton and Worthen escape a major scandal.

Lippo executive and Chinese native John Huang becomes active in Lippo's operations in Arkansas. China Resources pays for a Lippo-organized trip to Asia by Governor Clinton, according to a later FBI interview with John Huang.

Mochtar and James Riady engineer the takeover of the First National Bank of Mena in a town of 5,000 with few major assets beyond a Contra supply base, drug running and money-laundering operations.

Terry Reed is asked to take part in Operation Donation, under which planes and boats needed by the Contras "disappear," allowing owners to claim insurance. Reed has been a Contra operative and CIA asset working with Felix Rodriguez, the Contra link to the CIA and then-Vice President Bush's office. Reed later claims he refused, but that his plane was removed while he was away.

Park on Meter, a parking meter manufacturer in Russellville, Arkansas, receives the first industrial development loan from the Arkansas Development Finance Authority in 1985. Some suspect that POM is doing a lot more than making parking meters -- specifically that it has secret federal contracts to make components of chemical and biological weapons and devices to carry them on C-130s for the Contras. The company later denies the Contra connection although it will admit having secret military contracts. Web Hubbell is the company's lawyer. Right next to POM, on land previously owned by it, is an Army reserve chemical warfare company.

A series of checks to Clinton and his campaign are endorsed and deposited in Madison S&L. One of the checks -- a cashiers check in the amount of $3,000 -- has the name of a 24-year-old college student on it. When informed of this in 1993, the then-student, Ken Peacock, will deny having made any such donation.
Whitewater fails to file corporate tax returns for this year.

Asa Hutchinson leaves the US Attorney's office to make an unsuccessful bid for US Senate. According to police sources, Hutchinson had been aware of what was happening at Mena and the investigation into it, but did nothing. Hutchinson is replaced by Mike Fitzhugh who is reluctant to let investigators Russell Welch of the state police and William Duncan of the IRS present evidence of money-laundering to a grand jury.

Jim McDougal sets up a late controversial land deal called Castle Grande.

According to Ambrose Evans-Prichard, on June 4, 1985, the diary of Arkansas State police lieutenant Russell Welch says that an agent from the DEA "informed me in strictest confidence that it was believed, within his department, that [major drug transporter] Barry Seal is flying weapons to Central and South America. In return he is allowed to smuggle what he wanted back into the United States".

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