Word: mcdougall
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Other than occasional calls and the need to sign papers, the McDougals and the Clintons had little contact once Jim left the Governor's office. The McDougals paid little attention to the 1980 gubernatorial campaign that fall; they assumed Clinton would easily win re-election. The morning after the election, Jim McDougal was in the shower when the phone rang. Susan answered. It was Hillary Clinton, and she was croaking, her voice barely recognizable...
...Clintons' plight. They didn't even own a house, and she knew Whitewater was a strain. But Jim vowed he wasn't going to send the Clintons any money beyond subsidizing them on Whitewater. He thought Clinton had blown it, and deserved to lose. More to the point, the McDougals were strapped for cash themselves. So McDougal decided he had to sell Lot 7 on the Whitewater property, the largest plot along the river and the one reserved for the Clintons' eventual use. It was unlikely that the Clintons ever seriously intended to use the parcel, which they'd never...
...McDougal was happy to get an infusion of cash, nearly all of which was used to pay down the outstanding principal of the Citizens Bank loan. Then, to replace the advance he'd made to finance the construction of the modular home, McDougal arranged for Hillary to borrow $30,000 from Madison Bank and take title to the property. The loan would be repaid, he assured her, using proceeds from the sale of the house. She agreed, and henceforth the modular home on Lot 13 became known as the Hillary house...
...Though McDougal didn't intend this to be the effect, the transaction exposed Hillary to considerable personal liability on the loan, which carried an interest rate of about 20%. The Clintons remained oblivious to Whitewater's true financial picture, as shown in a letter Hillary sent to McDougal in the fall of 1981, along with a signed loan-renewal form: "If Reaganomics works at all, Whitewater could become the western hemisphere's mecca. Give our regards to Susan and we to hope to visit soon...
...that extraordinarily optimistic view of Whitewater's prospects was soon drawn into question. In August 1982, a loan officer at Madison wrote Hillary that she was past due on paying back the loan McDougal had got for her to finance the model home. Eventually Bill Clinton himself borrowed over $20,000 from the Security Bank of Paragould, whose former president, Marlin Jackson, was Clinton's bank commissioner, and applied the proceeds to reduce Hillary's debt. (That amount, however, did not wipe out her debt entirely. It isn't clear who paid off the several thousand dollars remaining, but Madison...