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, Ja ...

, and his wife, Susan McDougal (the former Susan Carol Henley), were financial partners with

Bill Clinton William Jefferson Clinton ( né Blythe III; born August 19, 1946) is an American politician who served as the 42nd president of the United States from 1993 to 2001. He previously served as governor of Arkansas from 1979 to 1981 and agai ...

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 sen ...

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 general ...

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 ...

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 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 Arka ...

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, Henderso ...

. 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 ...

against the

Republican Republican can refer to: Political ideology * An advocate of a republic, a type of government that is not a monarchy or dictatorship, and is usually associated with the rule of law. ** Republicanism, the ideology in support of republics or agains ...

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-ele ...

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 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 resu ...

counts of fraud and conspiracy charges. The counts had to do with bad loans made by Madison in the late 1980s. As his savings and loan was federally insured, the $68 million was paid by taxpayers. During the case, special prosecutor Ken Starr 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 port ...

for vacation homes. 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 ...

, which had

as a partner, to defend him. McDougal held a fundraiser, which paid off

'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 resp ...

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. Accord ...

, 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