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James B. McDougal (August 25, 1940 – March 8, 1998) was a native of
White County, Arkansas White County is a county located in the U.S. state of Arkansas. As of the 2010 census, the population was 77,076. The county seat is Searcy. White County is Arkansas's 31st county, formed on October 23, 1835, from portions of Independence, ...
, and his wife,
Susan McDougal Susan Carol McDougal (née Henley; born 1955) is a real estate investor who served prison time as a result of the Whitewater controversy. Her refusal to answer "three questions" for a grand jury, on whether President Bill Clinton lied in his tes ...
(the former Susan Carol Henley), were financial partners with Bill Clinton and
Hillary Clinton Hillary Diane Rodham Clinton ( Rodham; born October 26, 1947) is an American politician, diplomat, and former lawyer who served as the 67th United States Secretary of State for President Barack Obama from 2009 to 2013, as a United States senat ...
in the
real estate Real estate is property consisting of land and the buildings on it, along with its natural resources such as crops, minerals or water; immovable property of this nature; an interest vested in this (also) an item of real property, (more genera ...
venture that led to the
Whitewater Whitewater forms in a rapid context, in particular, when a river's gradient changes enough to generate so much turbulence that air is trapped within the water. This forms an unstable current that froths, making the water appear opaque and w ...
political scandal of the 1990s. Starting in 1982, McDougal operated Madison Guaranty Savings and Loan Association.


Political career

McDougal was a Democrat and a former aide to the late
U.S. Senator The United States Senate is the upper chamber of the United States Congress, with the House of Representatives being the lower chamber. Together they compose the national bicameral legislature of the United States. The composition and power ...
James William Fulbright. He later was a
political science Political science is the scientific study of politics. It is a social science dealing with systems of governance and power, and the analysis of political activities, political thought, political behavior, and associated constitutions and la ...
professor at
Ouachita Baptist University Ouachita Baptist University (OBU) is a private Baptist university in Arkadelphia, Arkansas. The university's name is taken from the Ouachita (pronounced WAH-shi-tah) River, which forms the eastern campus boundary. It is affiliated with the Ark ...
in
Arkadelphia Arkadelphia is a city in Clark County, Arkansas, United States. As of the 2010 census, the population was 10,714. The city is the county seat of Clark County. It is situated at the foothills of the Ouachita Mountains. Two universities, Henderson ...
. In 1982, McDougal made a failed bid for the
United States House of Representatives The United States House of Representatives, often referred to as the House of Representatives, the U.S. House, or simply the House, is the lower chamber of the United States Congress, with the Senate being the upper chamber. Together they c ...
against the Republican
incumbent The incumbent is the current holder of an office or position, usually in relation to an election. In an election for president, the incumbent is the person holding or acting in the office of president before the election, whether seeking re-el ...
John Paul Hammerschmidt John Paul Hammerschmidt (May 4, 1922 – April 1, 2015) was an American politician from the state of Arkansas. A Republican, Hammerschmidt served thirteen terms in the United States House of Representatives for Arkansas's 3rd congressional ...
in Arkansas's northwesterly Third Congressional District. Hammerschmidt polled 133,909 votes (66 percent) to McDougal's 69,089 (34 percent). Clinton himself had been defeated by Hammerschmidt in the same district in 1974. McDougal entered the political arena again at the height of the Whitewater controversy, running in the 1994 Democratic Primary in Arkansas' Fourth Congressional District, in South Arkansas. McDougal ran last in a three-man race, getting 23% of the vote in a primary won by State Senator Jay Bradford of Pine Bluff, who, in turn, lost the general election to a first-term representative, Republican
Jay Dickey Jay Woodson Dickey Jr. (December 14, 1939 – April 20, 2017), was a Republican U.S. Representative for Arkansas's 4th congressional district from 1993 to 2001. The amendment known as the Dickey Amendment (1996) blocks the Centers for Disease ...
in 1994's "Battle of the Jays".


Legal issues

On April 14, 1997, he was convicted of 18
felony A felony is traditionally considered a crime of high seriousness, whereas a misdemeanor is regarded as less serious. The term "felony" originated from English common law (from the French medieval word "félonie") to describe an offense that resul ...
counts of
fraud In law, fraud is intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right. Fraud can violate civil law (e.g., a fraud victim may sue the fraud perpetrator to avoid the fraud or recover monetary compensa ...
and conspiracy charges. The counts had to do with bad loans made by Madison in the late 1980s. As his
savings and loan Wealth is the abundance of valuable financial assets or physical possessions which can be converted into a form that can be used for transactions. This includes the core meaning as held in the originating Old English word , which is from an ...
was federally insured, the $68 million was paid by taxpayers. During the case, special prosecutor
Ken Starr Kenneth Winston Starr (July 21, 1946 – September 13, 2022) was an American lawyer and judge who authored the Starr Report, which led to the impeachment of Bill Clinton. He headed an investigation of members of the Clinton administration, known ...
requested a reduced sentence because of McDougal's assistance in the investigation. He joined with his wife, who later divorced him, and the Clintons to borrow $203,000 to buy land in the
Ozark Mountains The Ozarks, also known as the Ozark Mountains, Ozark Highlands or Ozark Plateau, is a physiographic region in the U.S. states of Missouri, Arkansas, Oklahoma and the extreme southeastern corner of Kansas. The Ozarks cover a significant porti ...
for
vacation home A holiday cottage, holiday home, vacation home, or vacation property is accommodation used for holiday vacations, corporate travel, and temporary housing often for less than 30 days. Such properties are typically small homes, such as cottag ...
s. When the development failed, he attempted to cover the losses with savings-and-loan funds. Prosecuted for fraud in 1984, he hired the
Rose Law Firm Rose Law Firm is an American law firm headquartered in Little Rock, Arkansas. It dates its origins to November 1, 1820, sixteen years before Arkansas statehood, when Robert Crittenden, born 1797, and Chester Ashley, born 1791, entered into an a ...
, which had
Hillary Clinton Hillary Diane Rodham Clinton ( Rodham; born October 26, 1947) is an American politician, diplomat, and former lawyer who served as the 67th United States Secretary of State for President Barack Obama from 2009 to 2013, as a United States senat ...
as a partner, to defend him. McDougal held a fundraiser, which paid off Bill Clinton's campaign debt of $50,000. Madison
cashier's check A cashier's check (or cashier's cheque, cashier's order) is a check guaranteed by a bank, drawn on the bank's own funds and signed by a cashier. Cashier's checks are treated as guaranteed funds because the bank, rather than the purchaser, is respo ...
s accounted for $12,000 of the funds that were raised. McDougal was also found by federal regulators to have made fraudulent loans with regard to his Castle Grande project, a real estate development 10 minutes south of Little Rock. The project was a lot on which he hoped to build microbrewery, shopping center, a trailer park, and other future projects in 1985. The sale price was $1.75 million. Since state regulations prohibited him from investing more than 6% of his savings-and-loan assets in the project, he put in $600,000 of Madison Guaranty money and had Seth Ward put in the difference, which was $1.15 million. Ward lent the money from Madison Guaranty as a non-recourse loan.


Death

McDougal died of a myocardial infarction at the Federal Correctional Facility in
Fort Worth, Texas Fort Worth is the fifth-largest city in the U.S. state of Texas and the 13th-largest city in the United States. It is the county seat of Tarrant County, covering nearly into four other counties: Denton, Johnson, Parker, and Wise. Accordin ...
, aged 57.


References


External links


Washington Post time lineCaught In The Whitewater - CBSCNN Report: McDougal had no access to his heart medication nor doctors just before his death
reduced Jim McDougal's prison sentence in exchange for testimony that Susan McDougal refused to confirm.]
Rose Law Firm Billing Records
PBS, WGBH educational foundation, Frontline *Labaton, Stephen.

, ''New York Times'', December 6, 1994
Snopes.com on Jim McDougal's death
{{DEFAULTSORT:McDougal, Jim 1940 births 1998 deaths American fraudsters American white-collar criminals American real estate businesspeople American people who died in prison custody Arkansas Democrats People from White County, Arkansas Prisoners who died in United States federal government detention American businesspeople convicted of crimes Businesspeople from Arkansas Whitewater controversy Bill Clinton