Season 3 of American Crime Story primarily focuses on the sexual harassment and misconduct that led to President Bill Clinton’s impeachment, but it also discusses one of his other most significant presidential allegations in dealing with the Whitewater scandal. American Crime Story: Impeachment tackles the perspectives of the women that were key players in the lead-up to Bill Clinton’s 1998 impeachment, largely exposing the widespread sexism that was apparent in the ensuing media frenzy, trials, and overall investigation.
For the early years of Bill Clinton’s presidency, the baggage he couldn’t get rid of from his time as Arkansas’s governor was his involvement in the shady deals of the Whitewater Development Corporation. Although his sexual misconduct allegations and the infamous Clinton-Lewinsky scandal would come to define his second term in office, Clinton was already under deep federal investigation when such news came to light. Because the Lewinsky affair was much more of a gossipy ordeal that became one of the most significant events in American history over the past few decades, the Whitewater scandal is largely forgotten as a point of contention in Clinton’s overall presidency.
In setting up the drama of American Crime Story: Impeachment, episode 1 largely underscores the Whitewater scandal that was the precursor to the frenzy that follows. As White House employees shuffle files out of a deceased staff member’s office, aides are transferred out of the White House, and mentions of the scandal are silenced, Impeachment reveals that Clinton was no stranger to scandal before the sexual harassment lawsuits and Lewinsky affair. Here’s a breakdown of what happened during the Whitewater scandal and how it affected Clinton’s impeachment.
Before becoming governor of Arkansas and president, Bill Clinton was acquainted with Jim McDougal, an Arkansas businessman with whom he made various real estate investments. The Clintons were looking to increase their income during Bill’s first run for governor when McDougal suggested they purchase 230 acres of undeveloped land on the White River in Arkansas’ Ozark Mountains, turning the land into vacation homes for visitors of the area. Bill and Hillary Clinton borrowed $203,000 and transferred ownership to the new Whitewater Development Corporation of which they each had equal shares.
Later on, McDougal decided to invest in the Castle Grande construction project, though he needed an additional $1.15 million to the $600,000 he already borrowed. In order to raise more money, McDougal recruited other individuals including a bank employee who helped shuffle around the extra money to avoid an investigation. Federal regulators caught on, realizing all of the funds were borrowed from Madison Guaranty Savings & Loan out of Little Rock. They discovered that Castle Grande made $2 million in commissions and fees for those involved, but when it collapsed in 1989 it cost the U.S. government $4 million. In the same year, Madison Guaranty collapsed, which in turn cost the U.S. $79 million. This led to federal investigations on McDougal, his attorney, and co-conspirators.
At this time of McDougal investing in Castle Grande, future presidential-nominee Hillary Clinton provided legal services for the construction project through Rose Law Firm. Additionally, McDougal held a fundraiser through Madison Guaranty that helped Clinton’s gubernatorial campaign debt in 1984. When Castle Grande and Whitewater failed, the Clintons lost between $37,000 and $69,000 of their investment, which was much less than the McDougals’. The Clintons were accused of being involved in the Castle Grande scheme, though the White House claimed they were exonerated due to a report that labeled them as passive investors whereas McDougal was the mastermind. The Clintons continued to claim that they were passive in the investment and committed no wrongdoing, but in 1993, hours after Deputy White House Counsel Vince Foster’s death, other White House Counsel officials began removing documents from his office – a frantic scene depicted in the divisively reviewed ACS: Impeachment episode 1. According to The New York Times, the documents were given to Hillary’s Chief of Staff, who placed them in a White House safe before giving them to the Clinton family lawyers.
Contributing to the suspicion surrounding the Clintons’ involvement in Whitewater’s failure, a 1992 exposé on the situation by The New York Times sparked a controversy that led to the Justice Department opening an investigation on the deal. In 1994, Clinton requested the attorney general assign a prosecutor to look into the Whitewater deal’s legality, to which he found: Clinton exerted pressure on an Arkansas business to make a loan that would benefit Madison Guaranty and that an Arkansas bank concealed transactions dealing with President Bill Clinton’s 1990 gubernatorial campaign. The Clintons were then subpoenaed to give all documents relating to Madison Guaranty, whereafter they claimed all the reports had gone missing.
Republican Independent Counsel Kenneth Starr was then appointed to the investigation by the Office of Special Counsel. Starr’s investigations in Arkansas found David Hale as his star witness, the businessman who claimed Governor Clinton pressured him into giving Susan McDougal an illegal loan. Clinton denied he pressured Hale, and it was later discovered that Hale originally had no mention of the Clintons in his statements and was also accused of receiving cash payments from the project designed to fund Hale’s defense. Three other potential witnesses refused to cooperate with Starr, leaving his case with no hard evidence. The Clintons were never convicted for their connection to Whitewater, though 15 others were convicted of over 40 crimes.
The Whitewater investigation coincided with the Paula Jones (portrayed by ACS‘s returning actor Annaleigh Ashford) sexual harassment lawsuit that began in 1994. The Jones case gained significant media attention, as many conservative leaders who had an interest in getting Clinton out of office contributed to her defense. The Jones case’s notoriety gave Kenneth Starr more traction in looking into Clinton’s financial dealings prior to his presidency. All the while, Bill Clinton’s affair with Monica Lewinsky was becoming known by certain parties, with Linda Tripp finally bringing forth tapes proving their relationship to Starr’s office in 1998. Tripp, U.S. attorneys, and FBI agents working with Starr brought Lewinsky to a hotel room where she was questioned and offered immunity for cooperation.
The news of their affair was soon made public, whereafter Clinton testified before a grand jury about conduct. A month later, Starr submitted a case against Clinton to incite impeachment on 11 grounds that dealt with perjury, witness tampering, and abuse of power during the Monica Lewinsky-Clinton scandal. American Crime Story: Impeachment focuses much more on the Lewinsky/Jones side of Clinton’s impeachment, but the background of the Whitewater scandal is important to understand in how it contributed to the questions of misconduct already posed against the president.