Investing To Fund College Education
People’s Common Answers
Typically, people don’t think this real estate deal is particularly good for college savings by Bill and his
Wife. However, once committed financially, most people become very reluctant to pull out at any
point, even though they admit to feeling a little anxious at the beginning. They typically regret their
initial investment and blame themselves. Yet, they never decide to sell, reluctant to realize the loss.
By the way, the child in this story did eventually get a fine education at Stanford University. Her name
was Chelsea Clinton. Bill was former President Bill Clinton and his wife Hilary Rodham Clinton. Clear
Lake is Whitewater, and James is the late Jim McDougal. The dollar sums are close to the actual
amounts of this controversial investment scheme.
It appears that President Bill Clinton suffered from a particularly bad case of get-evenitis. Their failed
Whitewater investment eventually became the responsibility of Vincent Foster, a White House aide
who committed suicide. The subsequent uproar led the White House chief counsel at the time, Bernard
Nussbaum, to explain to President Clinton that he had a choice: Either take his financial records from
Whitewater and appear before a Congressional panel, which would involve a personal and political cost
to be borne immediately, or take his chances with the appointment of an independent counsel who
would most likely cast an extremely wide investigation net.
As we all know, President Clinton took his chances with an independent counsel, and eventually ended
up having Kenneth Starr investigate his Whitewater deal and much more. Clinton moved on to similar
choices about the cases with Paula Jones and Monica Lewinsky, each time choosing to delay
immediate embarrassment in favour of denial and postponement of loss. He was very loss averse which
led him to accept dangerous gambles.
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More Background
The Whitewater controversy (also called the Whitewater scandal, Whitewatergate, or most often,
simply Whitewater) was an American political controversy that began with the real estate investments
of Bill and Hillary Clinton and their associates, Jim and Susan McDougal in the Whitewater
Development Corporation, a failed business venture in the 1970s and 1980s.
A New York Times article published during the 1992 U.S. presidential campaign reported that Clinton
and his wife had invested and lost money in the Whitewater development project (Jeff Gerth, New
York Times, Clintons Joined S. & L. Operator In an Ozark Real-Estate Venture, March 8, 1992).
David Hale, the source of criminal allegations against President Bill Clinton in the Whitewater affair,
claimed in November 1992 that Bill 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
(Jonathan Broder and Murray Waas, The road to Hale, March 17, 1998). 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. Hale also had a history of creating dummy
companies, then looting their federal funds, such as SBA loans, and then allowing them to fail. Only
after coming under indictment for this in 1993 did Hale make allegations against the Clintons (Murray
Waas, The story Starr did not want to hear, August 17, 1998).
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.(“Ray: Insufficient evidence to prosecute Clintons in Whitewater probe”, CNN,
September 20, 2000, no longer on the web site). 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 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 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 (Whitewater Time Line.
The Washington Post. August 26, 1999.).
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