The real blood sport: the Whitewater scandal machine - Cover Story

Washington Monthly, May, 1996 by Amy Waldman

Perspective, then, has been missing from much of the coverage of Whitewater. And so has an awareness that the acts committed in the investigation of potential wrongdoing are a story in themselves. In his book Blood Sport, for example, which is subtitled "The President and His Adversaries," James Stewart skewers the former but does little to probe the machinations of the latter; the book's reviewers have followed his lead. Until very recently, the national press has glossed over, or straight out ignored, the story of the scandal machine itself--how it works, and who drives it.

Making Hale White the Sun Shines

As various charges against the Clintons are disproved or dismissed, much of the Republican effort to tar Bill Clinton hinges on David Hale, the only person to accuse Clinton directly of breaking the law. Hale is the backbone of Kenneth Starr's investigation in Little Rock, and of the trial of Jim Guy Tucker and James and Susan McDougal that is currently underway (he provided information on 17 of the 21 counts being tried). Hale will be a star witness before Senator Alfonse D'Amato's Whitewater committee. And the frequent recycling of his charges against the President is, of course, a boon to Clinton's political opponents.

So you would think that Hale would have come under vigorous scrutiny from the press since he began making his unsubstantiated allegations about Clinton in 1993, when he was under investigation by the FBI for loan fraud. Hardly: To read most of the national and Washington press coverage of Hale is to acquire the impression that first, Hale is a victim of a vengeful Arkansas establishment; and second, that he is a soft-spoken Southerner who once had some trouble with the law and the truth but is now trying to "get right." In 1994, for example, The New Yorker's Peter J. Boyer described Hale as a "picture of sad-eyed contrition." Yes, Boyer conceded, Hale was under federal indictment in connection with his Small Business Administration dealings, "but [Hale] feels he is being made the `fall guy' for Arkansas politicians he helped with his investment company, including Clinton."

To read the Arkansas papers, however (both Republican- and Democrat-leaning), and to talk to people who have followed Arkansas politics and Hale's career for years, is to walk away with a somewhat different picture--a picture of a man with a fierce paranoid streak, a history of financial shenanigans, and an unbroken habit of playing fast and loose with the truth.

To start, Hale has had more than his fair share of trouble with the law. Most notable, of course, were Hale's management practices at Capital Management Services, the investment firm through which he loaned money to the McDougals. In return for matching funds from the SBA, Hale was supposed to administer loans to "disadvantaged" businesses. Hale has also admitted that of the 57 companies Capital financed, he secretly owned 13. As the judge who sentenced him to prison noted, "You are not a victim." Indeed. Hale was once sued successfully for swindling a girlfriend's grandparents out of their farm. Currently, he's under investigation on charges that he robbed an insurance company he owns of $150,000--money that poor residents of Pine Bluff, Arkansas, had put aside for their burials.