The '''Whitewater controversy''' (also called the '''Whitewater scandal''', or simply '''Whitewater''') began with investigations into the [[real estate]] investments of [[Bill Clinton|Bill]] and [[Hillary Rodham Clinton|Hillary Clinton]] and their associates, [[Jim McDougal|Jim]] and [[Susan McDougal]] in the [[Whitewater Development Corporation]], a failed business venture in the 1970s and 1980s.

A ''[[New York Times]]'' article written in March 1992, during the 1992 U.S. presidential campaign, reported that the Clintons had invested and lost money in the Whitewater development project"Clintons Joined S.& L. Operator In an Ozark Real-Estate Venture"], March 8, 1992. Accessed April 30, 2007.</ref> The article stimulated the interest of [[L. Jean Lewis]], a [[Resolution Trust Corporation]] investigator who was looking into the failure of [[Madison Guaranty]] [[Savings and loan association|Savings and Loan]], owned by McDougal. She looked for connections between the savings and loan company and the Clintons, and on September 2, 1992, she submitted a criminal referral to the FBI naming Bill and Hillary Clinton as witnesses in the Madison Guaranty case. Little Rock U.S. Attorney Charles A. Banks and the FBI determined that the referral lacked merit, but she continued to pursue it. Between 1992 and 1994 she issued several additional referrals against the Clintons and repeatedly called the [[U.S. Attorney]]'s Office in Little Rock and the [[United States Department of Justice|Justice Department]] about the caseHer referrals eventually became public knowledge, and she testified before the [[Senate Whitewater Committee]] in 1994.

[[David Hale (Whitewater)|David Hale]], the source of criminal allegations against President Clinton in the Whitewater affair, claimed in November 1993 that Clinton, while governor of Arkansas, pressured him to provide an illegal $300,000 loan to Susan McDougal, the partner of the Clintons in the Whitewater land deal"The road to Hale"], [[Salon.com]], March 17, 1998. Accessed November 28, 2012.</ref> Clinton supporters regarded Hale's allegations as questionable, as Hale had not mentioned Clinton in reference to this loan during the original FBI investigation of [[Madison Guaranty]] in 1989. Only after coming under indictment for this in 1993 did Hale make allegations against the Clintons.<ref name="salon081798">Murray Waas, [http://www.salon.com/news/1998/08/cov_17news.html "The story Starr did not want to hear"], [[Salon.com]], August 17, 1998. Accessed August 25, 2007.</ref>

A [[U.S. Securities and Exchange Commission]] investigation did result in convictions against the McDougals for their role in the Whitewater project, but the Clintons themselves were never prosecuted, as three separate inquiries found insufficient evidence linking them with the criminal conduct of others related to the land deal.<ref name="cnn092000">[http://archives.cnn.com/2000/ALLPOLITICS/stories/09/20/whitewater/ "Ray: Insufficient evidence to prosecute Clintons in Whitewater probe"], [[CNN]], September 20, 2000. Accessed April 30, 2007.</ref> Bill Clinton's successor as Arkansas Governor, [[Jim Guy Tucker]], was also convicted and served time in prison for his role in the fraud. Susan McDougal later served 18 months in prison for contempt of court for [[Susan McDougal#Whitewater grand jury and civil contempt of court|refusing to answer any questions]] relating to Whitewater, and was later granted a pardon by President Clinton just before leaving office.

The term '''Whitewater''' is also sometimes used to include other controversies from the [[Presidency of Bill Clinton|Bill Clinton administration]], especially those such as [[Travelgate]], [[Filegate]], and the circumstances surrounding [[Vince Foster]]'s death, that were investigated by the Whitewater [[Independent Counsel]].<ref>{{cite news | url=http://www.washingtonpost.com/wp-srv/politics/special/whitewater/timeline.htm | title=Whitewater Time Line | publisher=''[[The Washington Post]]'' | accessdate=2008-01-28 | date=August 26, 1999}}</ref>

==History==
===Origins of Whitewater Development Corporation===
[[Image:HillaryRodhamBillClintonLittleRockHouse1.jpg|thumb|right|223px|Hillary Rodham and Bill Clinton lived in this {{convert|980|sqft|m2|sigfig=2}} house in the [[Hillcrest, Little Rock, Arkansas|Hillcrest neighborhood]] of [[Little Rock]] from 1977 to 1979 while he was [[Arkansas Attorney General]].<ref>{{cite book | last=Clinton | first=Bill | authorlink=Bill Clinton | title=[[My Life (Bill Clinton autobiography)|My Life]] | publisher=[[Alfred A. Knopf|Knopf Publishing Group]] | year=2004 | isbn=0-375-41457-6}} p. 244.</ref> The couple's modest circumstances led them to seek outside investment income.]]
[[Bill Clinton]] had known Arkansas businessman and political figure [[Jim McDougal]] since 1968,<ref name="lh"/> and had made a previous small real estate investment with him in 1977.<ref name="lh">[[Hillary Rodham Clinton]]. ''[[Living History]]''. Simon & Schuster, 2003. ISBN 0-7432-2224-5. pp. 86-88.</ref> Clinton and [[Hillary Rodham]] were seeking ways of supplementing his salary of $26,500 as [[Arkansas Attorney General]] (which would rise to $35,000 if his campaign for [[Governor of Arkansas]] succeeded) and hers of $24,500 as [[Rose Law Firm]] associate.<ref name="time-stewart">{{cite news | url=http://www.time.com/time/magazine/article/0,9171,984261-2,00.html | title=A Deal Gone Bad | author=[[James B. Stewart]] | publisher=''[[Time (magazine)|Time]]'' | date=1996-03-18}}</ref><ref name="cnn070497"/> It was around this time that Rodham also began [[Hillary Rodham cattle futures controversy|her cattle futures trading]].<ref name="lh"/>

In Spring 1978, McDougal approached Clinton and Rodham with a new proposal: to join with him and his wife [[Susan McDougal|Susan]] to buy {{convert|230|acre|km2}} of undeveloped land along the south bank of the [[White River (Arkansas)|White River]] near [[Flippin, Arkansas]], in the [[Ozark Mountains]].<ref name="lh"/> The goal was to [[Subdivision (land)|subdivide]] the site into lots for [[vacation home]]s, intended for the many people coming south from [[Chicago]] and [[Detroit]] who were interested in low [[property tax]]es, [[fishing]], [[rafting]], and [[mountain scenery]].<ref name="lh"/> The plan was to hold the property for a few years and then sell the lots at a profit.<ref name="lh"/>

The four borrowed $203,000 to buy land, and subsequently transferred ownership of the land to the newly created [[Whitewater Development Corporation]], in which all four participants had equal shares;<ref name="lh"/> Susan McDougal chose<ref name="encyclo-ic">Gerald S. Greenberg, ''Historical Encyclopedia of U.S. Independent Counsel Investigations'', Greenwood Press, 2000. ISBN 0-313-30735-0. pp. 362-364.</ref> the name "Whitewater Estates";<ref name="ray-ww-part-a">[[Robert Ray (prosecutor)|Robert Ray]], [http://a255.g.akamaitech.net/7/255/2422/18may20041514/icreport.access.gpo.gov/final/v2a.pdf "Final Report of the Independent Counsel In Re: Madison Guaranty Savings & Loan Association" - "The Clintons, The McDougals, and the Whitewater Development Company"], [[United States Government Printing Office]], January 5, 2001.</ref> their sales pitch was, "One weekend here and you'll never want to live anywhere else."<ref name="cnn070497">[http://www.cnn.com/ALLPOLITICS/1997/gen/resources/infocus/whitewater/ak.roots.html "Arkansas Roots"], [[CNN.com]], July 4, 1997. Accessed August 26, 2007.</ref> The business was incorporated on June 18, 1979.

===Failure of Whitewater Development Corporation===
[[Economic history of the United States|This period]] featured high [[interest rates]] in general, and by the time these lots were [[Surveying|surveyed]] and thus available for sale at the end of 1979, rates had climbed to near 20 percent.<ref name="lh"/> Prospective buyers could no longer afford to buy vacation homes. Rather than take a loss on the venture, the four decided to hold on, building a [[model home]] and hoping for better economic conditions.<ref name="lh"/>

[[Image:White River Arkansas-1.jpg|right|thumb|223px|The [[White River (Arkansas)|White River]], near [[Flippin, Arkansas]] and the intended site of the [[Whitewater Development Corporation]]'s vacation homes.]]
During the next several years, Jim McDougal asked the Clintons for checks for various interest payments on the loan or other expenses; the Clintons later claimed to have no knowledge of the uses of these contributions.<ref name="lh"/><ref name="nyt042394">[[Gwen Ifill]], [http://query.nytimes.com/gst/fullpage.html?res=9F03E1DB1131F930A15757C0A962958260 "Hillary Clinton Takes Questions on Whitewater"], April 23, 1994. Accessed July 15, 2007.</ref> Concurrently, Jim McDougal had lost his job as the governor's economic aide when Bill Clinton failed to win re-election in 1980.<ref name="cnn070497"/> McDougal decided to go into banking instead,<ref name="cnn070497"/> and then acquired the Bank of Kingston in 1980 and the Woodruff Savings & Loan in 1982<ref>[http://www.pbs.org/wgbh/pages/frontline/shows/arkansas/etc/chron.html "frontline: Once Upon a Time in Arkansas: chronology", PBS]</ref> renaming them the Madison Bank & Trust and the [[Madison Guaranty Savings & Loan]], respectively.<ref name="encyclo-ic"/>

In spring 1985, McDougal held a fundraiser at Madison's office in Little Rock that paid off Clinton's remaining 1984 gubernatorial campaign debt of $50,000.<ref name="nyt121593">{{cite news | url=http://query.nytimes.com/gst/fullpage.html?res=9F0CE2D9123DF936A25751C1A965958260 | title= Head of Failing S.& L. Helped Clinton Pay a $50,000 Personal Debt in 1985 | author=[[Jeff Gerth]] with Stephen Engelberg | publisher=The New York Times | date=1993-12-15 | accessdate=2007-10-25}}</ref><ref name="nyt031394">{{cite news | url=http://query.nytimes.com/gst/fullpage.html?res=9800E4D7123DF930A25750C0A962958260 | title=Untangling the Threads Of the Whitewater Affair | author= Stephen Engelberg | publisher=The New York Times | date=1994-03-13 | accessdate=2007-10-25}}</ref> McDougal raised $35,000, and of that Madison cashier's checks accounted for $12,000.<ref name="nyt121593"/><ref name="nyt031394"/>

In 1985, Jim McDougal set his sights on investment into local residential construction, labeling the project [[Castle Grande]]. The 1,000 acres (4&nbsp;km²), located south of [[Little Rock, Arkansas]],<ref name="encyclo-ic"/> were priced at about $1.75 million, more than McDougal could afford on his own: due to financial laws, McDougal could borrow at most $600,000 from his own [[savings and loan]], Madison Guaranty. McDougal subsequently involved several others to produce the additional funds. Among these was Seth Ward, an employee of the bank, who helped funnel the additional $1.15 million required. To avoid potential investigations, the money was moved back and forth among several other [[investors]] and intermediaries. Hillary Clinton, then an attorney with the Little Rock-based Rose Law Firm, provided legal services to Castle Grande.

In 1986, their scheme was unveiled by federal regulators who realized that all of the necessary funds for this real estate venture had come entirely from Madison Guaranty; regulators called Castle Grande a sham.<ref name="time041398"/> In July of that year, McDougal resigned from Madison Guaranty. Seth Ward fell under investigation, along with the lawyer who helped him draft the agreement.
Castle Grande earned $2 million in commissions and fees for McDougal's business associates,<ref name="time041398"/> as well as an unknown amount of legal fees by Hillary Clinton's law firm, but in 1989 it collapsed, at a cost to the government of $4 million.<ref name="time041398"/> This in turn helped trigger the 1989 collapse of Madison Guaranty,<ref name="time041398"/> which federal regulators then had to take over. Taking place in the midst of the nationwide [[Savings and Loan crisis]], the failure of Madison Guaranty cost the United States $73 million.<ref name="nyt092100">{{cite news | url=http://query.nytimes.com/gst/fullpage.html?res=9E01E6DF103BF932A1575AC0A9669C8B63 | title= Statement by Independent Counsel on Conclusions in Whitewater Investigation | publisher=The New York Times | date=2000-09-21 | accessdate=2007-10-25}}</ref>

The Clintons lost between $37,000 and $69,000 on their Whitewater investment,<ref name="nyrob071907">[[Michael Tomasky]], [http://www.nybooks.com/articles/20374 "Can We Know Her?"], ''[[The New York Review of Books]]'', July 19, 2007. Accessed July 28, 2007.</ref> a lesser amount than the McDougals lost, for reasons unclear in the media reports.<ref name="nyt042394"/> The White House and the President's supporters claimed that they were exonerated by the Pillsbury Report, a $3 million study done for the Resolution Trust Corporation by the Pillsbury, Madison & Sutro law firm at the time that Madison Guaranty Savings & Loan was dissolved. In this report it was shown that James McDougal, who had set up the deal, was the managing partner, and Clinton was a passive investor in the venture.<ref name="salon09Feature">[[Gene Lyons]], [http://www.salon.com/09/features/whitewater.html#link "Time's Empty Whitewater Exclusive"], Accessed July 28, 2007.</ref> Charles Patterson, lead attorney from Pillsbury, Madison & Sutro on the investigation, refuted the White House's claim, stating that "It was not our purpose to vindicate, castigate, exculpate". The President's critics cited the unequal capital contributions by the Clintons and McDougals as evidence that then-Governor Clinton was to contribute in other ways.

===Clinton's first run for president===
During Bill Clinton's first bid for the presidency in 1992, he was asked by reporters from ''[[The New York Times]]'' about the failure of the Whitewater development, which Bill Clinton and Jim McDougal had originally purchased in 1978.<ref name="rayreport">[[Robert W. Ray]], [http://icreport.access.gpo.gov/final/ "Final Report of the Independent Counsel In Re: Madison Guaranty Savings & Loan Association"], January 5, 2001. Accessed April 30, 2007.</ref> The subsequent ''New York Times'' article, by reporter [[Jeff Gerth]], appeared on March 8, 1992.<ref name="nyt030892"/>

===Removal of documents===
Within hours of the [[death of Vince Foster]] in July 1993, chief White House counsel [[Bernard W. Nussbaum|Bernard Nussbaum]] removed documents, some of them concerning the [[Whitewater Development Corporation]], from Foster's office and gave them to Margaret Williams, Chief of Staff to the First Lady. According to the ''New York Times'', Williams placed them in a safe in the [[White House]]<ref name="nyt080394">[[Michael Wines]], [http://query.nytimes.com/gst/fullpage.html?sec=health&res=9800E4DD1231F930A3575BC0A962958260 "New Misstatements Admitted In Handling of Foster's Files"], ''The New York Times'', August 3, 1994. Accessed April 30, 2007.</ref> for five days before turning them over to their personal lawyer.

===Subpoena of the Presidential couple===
[[Image:RoseLawFirmRearCloseup.jpg|thumb|right|upright|173px|Hillary Rodham Clinton worked on the third floor of [[Rose Law Firm]].<ref>{{cite book | last=Maraniss | first=David | authorlink=David Maraniss | title=First in His Class: A Biography of Bill Clinton | publisher=[[Simon & Schuster]] | year=1995 | isbn=0-671-87109-9}} p. 430.</ref> Her billing records from the mid-1980s would become the subject of intrigue during the Whitewater controversy.]]
As a result of the [[exposé (journalism)|exposé]] by the ''New York Times'', the Justice Department opened an investigation into the failed Whitewater deal. Media pressure continued to build, and on April 22, 1994, Hillary Clinton gave an unusual [[press conference]] under a portrait of [[Abraham Lincoln]] in the [[State Dining Room]] of the White House, to address questions on both Whitewater and the [[Hillary Rodham cattle futures controversy|cattle futures controversy]]; it was broadcast live by [[CBS]], [[NBC]], [[American Broadcasting Company|ABC]], and [[CNN]].<ref name="nyt042394"/> In it she claimed that the Clintons had a passive role in the Whitewater venture, and had committed no wrongdoing, but admitted her explanations had been vague and that she no longer opposed appointing a special prosecutor to investigate the matter.<ref name="nyt042394"/> Afterwards she won media praise for the manner in which she conducted herself during this, her first adversarial press conference;<ref name="nyt042394"/> ''[[Time Magazine|Time]]'' called her "open, candid, but above all unflappable ... the real message was her attitude and her poise. The confiding tone and relaxed body language ... immediately drew approving reviews."<ref name="time0494">Michael Duffy, [http://www.time.com/time/magazine/article/0,9171,1101940502-164301,00.html "Open and Unflappable"], ''[[Time magazine]]'', April 1994. Accessed July 16, 2007.</ref> By now there was growing backlash from Democrats and other members of the political left against the press' investigations of Whitewater, with ''The New York Times'' coming in for special criticism by Gene Lyons of Harpers, who felt its reporters were exaggerating the significance and possible impropriety of what they were uncovering.<ref name="harpers1094">[[Gene Lyons]], [http://www.pbs.org/wgbh/pages/frontline/shows/arkansas/whitewater/lyonsarticle.html "Fool for Scandal: How the 'Times' got Whitewater wrong"], ''[[Harper's Magazine]]'', October 1994. Accessed August 27, 2007.</ref>

At Clinton's request, [[United States Attorney General|Attorney General]] [[Janet Reno]] appointed a [[special prosecutor]] [[Robert B. Fiske]] in 1994 to investigate the legality of the Whitewater transactions. Two allegations surfaced: 1) that Clinton had exerted pressure on an Arkansas businessman, David Hale, to make a loan that would benefit him and the owners of [[Madison Guaranty]]; and 2) that an Arkansas bank had concealed transactions involving Clinton's gubernatorial campaign in 1990. In May 1994, [[Independent Counsel]] Robert Fiske issued a grand jury [[subpoena]] to the President and his wife for all documents relating to [[Madison Guaranty]], with a deadline of 30 days. They were reported as missing by the Clintons. Almost two years later, the subpoenaed billing records of the [[Rose Law Firm]], which Hillary Clinton worked for, were discovered in the Clintons' private residence in the White House by a staffer in January 1996.

The Clintons claimed to have been cleared of all wrongdoing in two reports prepared by the [[San Francisco, California|San Francisco]] law firm of [[Pillsbury, Madison & Sutro]] for the [[Resolution Trust Corporation]], which was overseeing the liquidation of Madison Guaranty. Charles Patterson, lead attorney for Pillsbury, Madison refuted that claim, stating that "It was not our purpose to vindicate, castigate, exculpate".

===The Kenneth Starr investigation===
In August 1994, [[Kenneth Starr]] was appointed by a three-judge panel to continue the Whitewater investigation, replacing Robert B. Fiske, who had been specially appointed by the Attorney General, prior to the re-enactment of the Independent Counsel law. Fiske was replaced because he had been chosen and appointed by [[Janet Reno]], Clinton's Attorney General, creating an apparent conflict of interest.

[[David Hale (Whitewater)|David Hale]], the key witness against President Clinton in Starr's Whitewater investigation, alleged in November 1992 that Clinton, while governor of Arkansas, pressured him to provide an illegal $300,000 loan to Susan McDougal, the partner of the Clintons in the Whitewater land deal.<ref name="salon031798"/>

Hale's defense strategy, as proposed by attorney Randy Coleman, was to present himself as the victim of high-powered politicians who forced him to give away all of the money.<ref name="salon03032000">{{cite news |title=Nabbing David Hale |first1=Joe |last1=Conason|authorlink1=Joe Conason|first2=Gene|last2=Lyons|authorlink2=Gene Lyons |url=http://www.salon.com/2000/03/03/hale_2/ |newspaper=[[Salon (website)|Salon]] |date=3 March 2000 |accessdate=8 August 2013}}</ref> This self-caricature was undermined by testimony from November 1989, wherein FBI agents investigating the failure of Madison Guaranty had questioned Hale about his dealings with Jim and Susan McDougal, including the $300,000 loan. According to the agents' official memorandum of that interview, Hale described in some detail his dealings with Jim Guy Tucker (then an attorney in private practice, later Bill Clinton's [[Lieutenant governor (United States)|lieutenant governor]]), both McDougals, and several others, but never mentioned Governor Bill Clinton. Nor did Clinton's name come up when Hale testified at McDougal's 1990 trial, which ended in an acquittal.

Clinton denied that he pressured Hale to approve the loan to Susan McDougal. By this time, Hale had already pleaded guilty to two felonies and secured a reduction in his sentence in exchange for his testimony against Clinton from prosecutors. Charges were made by Clinton supporters that Hale had received numerous cash payments from representatives of the so-called [[Arkansas Project]],<ref name="salon031798"/> a $2.4 million campaign established to assist in Hale's defense strategy, and to investigate Clinton and his associates between 1993 and 1997.<ref name="salon031798"/> These charges were subsequently the topic of a separate investigation by former Department of Justice investigator Michael E. Shaheen Jr.<ref name="salon091198">{{cite news |title=Where's Whitewater? |first=Jonathan |last=Broder |url=http://www.salon.com/1998/08/30/newsd_3/ |newspaper=[[Salon (website)|Salon]] |date=30 August 1998 |accessdate=8 August 2013}}</ref> Shaheen filed his report in July 1999 to Starr, who summarized the findings in that there was insufficient evidence of Hale having been paid in hopes of influencing his testimony, with such allegations being "unsubstantiated or, in some cases, untrue", and that no charges would be brought against Hale or Arkansas Project outlet ''[[The American Spectator]]''.<ref name="nyt072999">{{cite news |title=National News Briefs; Whitewater Report Finds No Proof of Tampering |url=http://www.nytimes.com/1999/07/29/us/national-news-briefs-whitewater-report-finds-no-proof-of-tampering.html |newspaper=[[The New York Times]] |date=29 July 1999 |accessdate=8 August 2013}}</ref> Writers from [[Salon (website)|''Salon'']] complained that the full, 168-page, unleaked report had not been made public, a complaint still being reiterated by ''Salon'', as of 2001.<ref name="salon051701">{{cite news |title=Why won't the government release the Shaheen Report? |first1=Joe |last1=Conason|authorlink1=Joe Conason |url=http://www.salon.com/2001/05/17/shaheen_report/ |newspaper=[[Salon (website)|Salon]] |date=17 May 2001 |accessdate=8 August 2013}}</ref>

The state prosecutors went ahead and signed an arrest warrant against Hale in early July 1996. Criminal charges filed by the state prosecutors charged that Hale had made misrepresentations to the state insurance commission regarding the solvency of an insurance company that he had owned, [[National Savings Life]]. The prosecutors also alleged in court papers that Hale had made those misrepresentations to conceal the fact that he had looted the insurance company. Hale said that any infraction was a technicality and that no one lost any money.<ref name="nyt032699">{{cite news |title=National News Briefs; Whitewater Figure Guilty in Insurance Case |url=http://www.nytimes.com/1999/03/26/us/national-news-briefs-whitewater-figure-guilty-in-insurance-case.html |newspaper=[[The New York Times]] |date=26 March 1999 |accessdate=8 August 2013}}</ref> In March 1999, Hale was convicted of the first charge, with the jury recommending a 21-day jail sentence.<ref name="nyt032699"/>

Starr drafted an impeachment referral to the House of Representatives in the fall of 1997, alleging that there was "substantial and credible evidence" that Clinton might have committed perjury regarding Hale's allegations.

[[Theodore B. Olson]], who with several associates, launched the plan that later became known as the "[[Arkansas Project]]", wrote several essays for ''[[The American Spectator]]'', accusing Clinton and many of his associates of wrongdoing. The first of those pieces appeared in February 1994, alleging a wide variety of criminal offenses by the Clintons and others, including [[Webster Hubbell]]. These allegations led to the discovery that Hubbell, a Hillary Clinton friend and former [[Rose Law Firm]] partner, had committed multiple frauds, mostly against his own firm. Hillary Clinton, instead of being complicit in Hubbell's crimes, had been among his victims. In December 1994, one week after Hubbell pleaded guilty to mail fraud and tax evasion, Associate White House Counsel, [[Jane C. Sherburne]], created a "Task List" which included a reference to monitoring Hubbell's cooperation with Starr. Hubbell was later recorded in prison saying "I need to roll over one more time" regarding the Rose Law firm lawsuit. In his next court appearance, he pleaded the [[Fifth Amendment to the United States Constitution|Fifth Amendment]] against self-incrimination (see ''[[United States v. Hubbell]]'').

In February 1997, Starr announced he would leave the investigation to pursue a position at the [[Pepperdine University School of Law]]. However, he "[[Flip-flop (politics)|flip flopped]]" in the face of "intense criticism", and new evidence of sexual misconduct.<ref name="cnnstar">{{cite news |title= Kenneth W. Starr Profile |url=http://www.cnn.com/ALLPOLITICS/1998/01/27/profiles/starr/ |publisher=[[CNN]] |date=27 January 1998 |accessdate=8 August 2013}}</ref>

By April 1998, diverted to some degree by the burgeoning [[Lewinsky scandal]], Starr's investigations in Arkansas were winding down, with his Little Rock [[grand jury]] about to expire in the following month.<ref name="time041398">{{cite news |title=Meanwhile, Back In Arkansas... |first=Eric |last=Pooley |url=http://www.time.com/time/magazine/article/0,9171,988138,00.html |newspaper=[[Time (magazine)|Time]] |date=13 April 1998 |accessdate=8 August 2013}}</ref> [[Webster Hubbell]], [[Jim Guy Tucker]], and [[Susan McDougal]] had all refused to cooperate with Starr.<ref name="time041398"/> Tucker and McDougal were later pardoned by President Clinton. When the Arkansas grand jury did conclude its work in May 1998, after 30 months in panel, it came up with only a contempt indictment against Susan McDougal.<ref name="salon091198"/> Although she refused to testify under oath regarding the Clintons' involvement in Whitewater, Susan McDougal did make the case in the media that the Clintons had been truthful in their account of the loan, and had cast doubt on her former husband's motives for cooperating with Starr. She also claimed that James McDougal felt abandoned by Clinton, and told her "he was going to pay back the Clintons". She also claimed to the press, again not under oath, that her husband had told her that Republican activist and Little Rock lawyer, [[Sheffield Nelson]], was willing to "pay him some money" for talking to ''The New York Times'' about Clinton, and in 1992, he told her that, in fact, one of Clinton's political enemies was paying him to tell ''The New York Times'' about Whitewater.

From the beginning, Susan McDougal charged that Starr offered her "global immunity" from other charges, if she would cooperate with the Whitewater investigation. McDougal told the jury that refusing to answer questions about the Clintons and Whitewater wasn't easy for her, or her family. "It's been a long road, a very long road ... and it was not an easy decision to make", McDougal told the court. McDougal refused to answer [[Susan McDougal#Whitewater grand jury and civil contempt of court|any questions while under oath]], leading to her being imprisoned by the judge for civil [[contempt of court]] for the maximum 18 months, including eight months in isolation. Starr's subsequent indictment of McDougal for ''criminal'' contempt of court charges resulted in a jury hung 7-5, in favor of acquittal. President Clinton later pardoned her, shortly before leaving office.

In September 1998, Independent Counsel Starr released the [[Starr Report]], concerning offenses alleged to have been committed by President Clinton, as part of the [[Lewinsky scandal]]. As it dealt exclusively with the Lewinsky scandal, it mentioned Whitewater only in passing, save for a glancing reference that longtime Clinton friend and advisor, [[Vernon Jordan]], had both tried to find [[Monica Lewinsky]] a job after her removal from the White House internship and tried to help Webster Hubbell financially with "no-show" consulting contracts, while he was under pressure to cooperate with the Whitewater investigations.<ref name="salon091198"/> Indeed, it was on this basis that Starr took on the Lewinsky investigation, under the umbrella of the Whitewater Independent Counsel mandate in the first place.<ref name="salon091198"/>

There was much acrimony from the most fervent critics of the Clintons, after release of the Starr report on the Foster matter and after Starr's departure and return to the case. The death of Foster had been the source of many conspiracy theories. [[Christopher Ruddy]], a reporter for Clinton critic [[Richard Mellon Scaife]]'s ''[[Pittsburgh Tribune-Review]]'', helped fuel much of this speculation with claims that Starr had not pursued this line of inquiry far enough.<ref>{{cite news |title=The Strange Case of Christopher Ruddy |first=Michael |last=Isikoff |authorlink=Michael Isikoff |url=http://www.slate.com/articles/arts/books/1997/10/the_strange_case_of_christopher_ruddy.html |newspaper=[[Slate (magazine)|Slate]] |date=19 October 1997 |accessdate=8 August 2013}}</ref>

===Reaction of the Clintons===
On January 26, 1996, Hillary Clinton testified before a [[grand jury]] concerning her investments in Whitewater. This was the first time in American history that a First Lady had been subpoenaed to testify before a grand jury. She testified that they never borrowed any money from the bank, and denied having caused anyone to borrow money on their behalf. Over the course of the investigation, fifteen individuals — including [[Jim McDougal|Jim]] and [[Susan McDougal]], White House counsel [[Webster Hubbell]] and Arkansas Governor [[Jim Guy Tucker]] — were convicted of federal charges. Except for Jim McDougal, none of the convicted people agreed to cooperate with the Whitewater investigators, and Clinton pardoned four of them in the final hours of his presidency (see [[list of people pardoned by Bill Clinton]]).

===Reaction of Senate and Congress===
Parallel to the Independent Counsel track, both houses of the [[United States Congress]] had been investigating Whitewater and holding hearings on it. The [[United States House Committee on Financial Services|House Committee on Financial Services]] had been scheduled to begin hearings in late March 1994, but they were postponed a couple of days before after an unusually angry written communication from Democratic Banking Committee chair [[Henry B. Gonzalez]] to Republican [[Jim Leach]] in which he called Leach "obstinate", "obdurate", "in willful disregard" of House etiquette, and "premeditatedly" plotting a "judicial adventure".<ref>{{cite news | url=http://query.nytimes.com/gst/fullpage.html?res=980CEEDB153CF931A15750C0A962958260 | title=Senior Democrats Back Full Hearing Into Whitewater | author=Michael Wines | publisher=''The New York Times'' | date=1994-03-22 | accessdate=2008-03-14}}</ref> The House Banking Committee did then begin its hearings in late July 1994.<ref>{{cite news | url=http://query.nytimes.com/gst/fullpage.html?res=9C0DE0D91739F93AA15754C0A962958260 | title= Ex-Aide Explains His Whitewater Role to House Panel | author=Neil A. Lewis | publisher=''The New York Times'' | date=1994-07-29 | accessdate=2008-03-14}}</ref>

The [[United States Senate Committee on Banking, Housing, and Urban Affairs|Senate Banking, Housing, and Urban Affairs Committee]] also began hearings on Whitewater in July 1994;<ref name="cnn-timeline">[http://www.cnn.com/ALLPOLITICS/1997/gen/resources/infocus/whitewater/timeline2.html "Timeline"], [[CNN.com]]. Accessed June 30, 2007.</ref> these intensified in May 1995, following the Republican gain of control, when the [[United States Senate Whitewater Committee|Special Whitewater Committee]] was formed, with Republican Banking Committee chairman [[Al D'Amato]] also being chairman of the special committee and [[Michael Chertoff]] being chief counsel. The committee's hearings were much more extensive than those held previously by the Democrats, running for 300 hours over 60 sessions across 13 months, taking over 10,000 pages of testimony and 35,000 pages of depositions from almost 250 people; many of these marks were records.<ref name="wapo061996">David Maraniss, [http://www.washingtonpost.com/wp-srv/politics/special/whitewater/stories/wwtr960619.htm "The Hearings End Much as They Began"], ''[[The Washington Post]]'', June 19, 1996. Accessed June 30, 2007.</ref> The hearings' testimony and senatorial lines of investigation mostly followed partisan lines, with Republicans investigating the President and the Democrats defending him.<ref name="wapo061996"/> The Senate Special Whitewater Committee issued an 800-page majority report on June 18, 1996, which only hinted at one possible improper action by President Clinton, but spoke of the Clinton Administration as "an American presidency [of having] misused its power, circumvented the limits on its authority and attempted to manipulate the truth". The First Lady came in for much stronger criticism, as she was "the central figure" in all aspects of the alleged wrongdoings.<ref name="iht061996">Brian Knowlton, [http://www.iht.com/articles/1996/06/19/white.t_2.php "Republican Report Stokes the Partisan Fires : Whitewater Unchained"], ''[[International Herald-Tribune]]'', June 19, 1996. Accessed June 30, 2007.</ref> The Democratic minority on the Committee derided these findings as "a legislative travesty", "a witch hunt", and "a political game".<ref name="iht061996"/>

On November 19, 1998, Independent Counsel Starr testified before the [[United States House Committee on the Judiciary|House Judiciary Committee]] in connection with the [[Impeachment of Bill Clinton]] over charges related to the [[Lewinsky scandal]]. Here, Starr said that in late 1997 he had come close to preparing an impeachment report related to Whitewater, in particular related to the fraudulent $300,000 loan to Susan McDougal, and to whether the President had testified truthfully regarding the loan.<ref name="wapo111998">Ruth Marcus, Peter Baker, [http://www.washingtonpost.com/wp-srv/politics/special/clinton/stories/impeach111998.htm "Clinton 'Thwarted' Probe, Starr to Say"], ''[[The Washington Post]]'', November 19, 1998. Accessed June 12, 2007.</ref> Starr said that he held back the charges due to not being sure of the truthfulness of two major witnesses,<ref name="nyt112098">[[Don Van Natta, Jr.]], [http://query.nytimes.com/gst/fullpage.html?res=980DE7DB1230F933A15752C1A96E958260 "Democrats Challenge Starr on Delayed Exoneration"], ''The New York Times'', November 20, 1998. Accessed June 12, 2007.</ref> but that the investigation was still ongoing. Regarding the reappearance of Hillary Rodham Clinton's Rose Law Firm billing records in the White House residential section, Starr said the investigation had found no explanation for the disappearance or the reappearance: "After a thorough investigation, we have found no explanation how the billing records got where they were or why they were not discovered and produced earlier. It remains a mystery to this day."<ref name="nyt112098"/> Starr also chose this occasion to completely exonerate President Clinton of any wrongdoing in the [[Travelgate]] and [[Filegate]] matters;<ref name="wapo111998"/> Democrats on the committee immediately criticized Starr for withholding these findings, as well as the Whitewater one, until after the [[United States House elections, 1998|1998 Congressional elections]].<ref name="nyt112098"/>

==Convictions==
Ultimately the Clintons were never charged, but 15 other persons were convicted of more than 40 crimes, including Bill Clinton's successor as Governor, who was removed from office.<ref>[http://www.washingtonpost.com/wp-srv/politics/special/whitewater/stories/wwtr950828.htm Washington Post, Caught in the Whitewater Quagmire, August 28, 1995; Page A01]</ref>
* [[Jim Guy Tucker]]: Governor of Arkansas at the time, removed from office ([[fraud]], 3 counts)
* [[John Haley]]: attorney for Jim Guy Tucker ([[tax evasion]])
* [[William J. Marks, Sr.]]: Jim Guy Tucker business partner ([[conspiracy (crime)|conspiracy]])
* [[Stephen Smith (Whitewater)|Stephen Smith]]: former Governor Clinton aide (conspiracy to misapply funds). Bill Clinton [[List of people pardoned by Bill Clinton#Pardons|pardoned]].
* [[Webster Hubbell]]: Clinton political supporter; Rose Law Firm partner ([[embezzlement]], fraud)
* [[Jim McDougal]]: banker, Clinton political supporter: (18 felonies, varied)
* [[Susan McDougal]]: Clinton political supporter (multiple fraud). Bill Clinton [[List of people pardoned by Bill Clinton#Pardons|pardoned]].
* [[David Hale (Whitewater)|David Hale]]: banker, self-proclaimed Clinton political supporter: (conspiracy, fraud)
* Neal Ainley: Perry County Bank president (embezzled bank funds for Clinton campaign)
* [[Chris Wade (real estate broker)|Chris Wade]]: Whitewater real estate broker (multiple loan fraud). Bill Clinton [[List of people pardoned by Bill Clinton#Pardons|pardoned]].
* Larry Kuca: Madison real estate agent (multiple loan fraud)
* [[Robert W. Palmer]]: Madison appraiser (conspiracy). Bill Clinton [[List of people pardoned by Bill Clinton#Pardons|pardoned]].
* [[John Latham (Whitewater)|John Latham]]: Madison Bank CEO ([[bank fraud]])
* [[Eugene Fitzhugh]]: Whitewater defendant (multiple bribery)
* Charles Matthews: Whitewater defendant ([[bribery]])

==Tax returns==
In March 1992, during his presidential campaign, the Clintons acknowledged that on their 1984 and 1985 tax returns, they had claimed improper [[tax deduction]]s for [[interest]] payments made by the Whitewater Development Company and not them personally.<ref name="nyt080695">[[Jeff Gerth]] and Stephen Labaton, [http://query.nytimes.com/gst/fullpage.html?res=990CE7DB1631F935A3575BC0A963958260 " Whitewater Papers Cast Doubt on Clinton Account of a Tax Underpayment"], ''The New York Times'', August 6, 1995. Accessed April 30, 2007.</ref> Due to the age of mistake, the Clintons were not obligated to make good the error, but Bill Clinton announced that they would nonetheless do so.<ref name="nyt080695"/>

Deputy White House counsel [[Vince Foster]] looked into this matter, but did not take any action before his death.<ref name="nyt080695"/> Almost two years from the original announcement passed before, on December 28, 1993, the Clintons did make this reimbursement payment, for $4,900, to the [[Internal Revenue Service]]. This was done just before Justice Department investigators started seeking the Clintons' Whitewater files. The payment was made without filing an amended return (possibly because the three-year period for amended return filing had passed), but did include full interest on the amount in error, including the additional two-year delay.<ref name="nyt080695"/> The Whitewater files in question, publicly released in August 1995, cast some doubt on the Clintons' assertions in the matter, as they showed that the couple were aware that the interest payments in question were by the Whitewater corporation and not them personally.<ref name="nyt080695"/>

==Ray report==
Kenneth Starr's successor as Independent Counsel, [[Robert Ray (prosecutor)|Robert Ray]], released a report in September 2000 that stated "This office determined that the evidence was insufficient to prove to a jury beyond a reasonable doubt that either President or Mrs. Clinton knowingly participated in any criminal conduct."<ref name="rayreport"/> Ray nonetheless criticized the White House in a statement regarding the release of the report, saying delays in the production of evidence and "unmeritorious litigation" by the president's lawyers severely impeded the investigation's progress, leading to the investigation's nearly $60 million total cost.<ref name="cnn092000"/> Ray's report effectively ended the Whitewater investigation.<ref name="cnn092000"/>

==Epilogue==
[[File:WhitewaterExhibitClintonPresidentialCenter.jpg|thumb|right|The exhibit on the Whitewater controversy at the [[Clinton Presidential Center]] in Little Rock, Arkansas]]
Bill and Hillary Clinton never visited the actual Whitewater property.<ref name="lh2">''Living History'', pp. 195-196.</ref> In May 1985, Jim McDougal had sold the remaining lots of the failed Whitewater Development Corporation to local [[realtor]] Chris Wade.<ref name="lh2"/> By 1993, there were a few occupied houses on the site, but mostly just "For Sale" signs; after swarms of Whitewater reporters made the trek there, one owner hung a sign saying "Go Home, Idiots."<ref name="lh2"/> By 2007, there were about 12 houses in the subdivision, with the last lot up for sale by son Chris Wade, Jr. for $25,000.<ref name="nyt042007">{{cite news |title=Remember Whitewater? The Place Is Still There |first=Paul |last=Schneider |url=http://travel.nytimes.com/2007/04/20/travel/escapes/20american.html?_r=0 |newspaper=The New York Times |date=20 April 2007 |accessdate=8 August 2013}}</ref> In [[Flippin, Arkansas|Flippin]], Jim McDougal's savings and loan bank had been replaced by a variety of small businesses, most recently a [[barber]]shop.<ref name="nyt042007"/>

The length, expense, and results of the greater Whitewater investigations turned much of the public against the [[Independent Counsel]] mechanism.<ref name="encyclo-ic"/> In particular, Democrats portrayed Whitewater as a [[Witch-hunt#Metaphorical usage|political witch-hunt]], much as Republicans had at the end of the 1980s [[Iran-Contra]] investigations.<ref name="encyclo-ic"/> As such, the Independent Counsel law expired in 1999, with critics saying it cost too much with too few results;<ref name="cnn062999">{{cite news |title=From Watergate to Whitewater: History of the independent counsel |url=http://www.cnn.com/ALLPOLITICS/stories/1999/06/30/ic.history/index.html?iref=allsearch |publisher=CNN |date=30 June 1999 |accessdate=8 August 2013}}</ref> even Kenneth Starr favored the law's demise.<ref name="cnn062999"/> Indeed, no one ended up happy with the Whitewater investigation; Democrats felt that the investigation was a political witch-hunt, Republicans were frustrated that both Clintons had escaped formal charges, and people without partisan involvement found press coverage of Whitewater's facts and narratives, which spanned four decades, difficult to understand to the point of bafflement.