The Whitewater Development Corporation was founded before the Madison Guaranty S&L.
I can’t believe I just learned that. Did you know that ? Do you care ? I will try to convince you that you should have known and that you should care at least a tiny little bit (probably not enough to waste your time reading this). My ignorance is probably partly explained by the fact that I moved to Italy in 1989 and only began surfing the web compulsively much more recently. However, I am a news junky and thought I knew more about Whitewater than most. I learned about the relative ages of Whitewater and Madison Guaranty from 'The Clinton Wars': An Exchange By Sidney Blumenthal, Reply by Joseph Lelyveld in the New York Review of Books http://www.nybooks.com/articles/16431.
Blumenthal claims and Lelyveld concedes that the headline to the March 8 1992 NYT story by Jeff Gerth which started the story/scandal "Clintons Joined S&L Operator in an Ozark Real-Estate Venture," is inaccurate, since, at the time of the joining James McDougal was non an S&L operator. Lelyveld concedes the point writing “the fact that the Whitewater deal antedated the founding of Madison Guaranty S&L.” and “The headline confused the time line; the article itself did not.”
The last claim is true, the references to the time line in the article are not confused and were clearly made with great care. However, the article seems to have confused the person who wrote the headling. Its opening sentence was "Bill Clinton and his wife were business partners with the owner of a failing savings and loan association that was subject to state regulation early in his tenure as Governor of Arkansas, records show." which is true (as noted by Lelyveld) and compounds the error in the headline (as noted by Blumenthal and denied without any coherent counter-argument by Lelyveld). Why didn’t Gerth write “Bill Clinton and his wife became business partners of James McDougal, who later founded a savings and loan association that was subject to state regulation early in his tenure as Governor of Arkansas, records show." This is clear and is 35 words in the place of 34 (and if it weren’t for the use of “partner” for you know like Clinton and Lewinsky it would be 34).
I assume that, conceding that a front page headline made a false claim the Times published a correction. Something along the line of “the March 8 headline of a story by Jeff Gerth incorrectly described the business activities of James McDougal at the time the Whitewater Development Corporation was founded. He was a real estate developer.” This is actually a toughy, since the Times refers to Stories by their headline and corrections are not supposed to repeat errors. I am puzzled as to why Lelyveld does not mention the correction. I wouldn’t want to imagine that the Times left uncorrected a substantive error made in large type of the front page.
I don’t write good enough to criticize every sentence everyone writes, but I think that Gerth’s article was deliberately misleading. In fact, I think that Lelyveld is still trying to pull the same trick 12 years later after conceding the point.
The timing is central to the accusations made by Gerth (followed by many many others). Lelyveld writes “The central premise was declared in the first paragraph. It was that the governor was a business partner of a banker ‘subject to state regulation.’” Now, why would such a premise be of any public interest. It is not either Clinton’s fault that they were business partners of a banker subject to state regulation. When they became McDougal’s partners, he wasn’t such a banker. Then he became one. Lelyveld also writes “attempts to make fast money with minimal investment and effort, involving in each case the support of good friends who needed access to state government.” I think this statement is actually false. Lelyveld presents no evidence that McDougal needed access to state government at the time of the Clintons’ attempt, and the omission of any reference to timing can not be accidental.
Now what exactly should the Clintons have done when McDougal decided to found Morgan Guarantee ? They could have demanded that he dissolve Whitewater, but that really would have been an ethical lapse. The dissolution of a partnership whose main asset is real estate is an excellent opportunity to transfer wealth. For example, if they had demanded their original investment back, they would have been saying that their keen ethical senses required them to extort $ 65,000 from him now that he needed access to state government.
Given the timing, unless they are pre-cognitive, the Clintons couldn’t have known that entering the Whitewater partnership could later be seen as an ethical lapse. Perhaps Mr Lelyveld thinks that Hillary Clinton is precognitive. This would explain why he mentions “Mrs. Clinton's spectacular success in speculative cattle futures” which has no other logical connection to Blumenthal’s assertions.