Thursday, 21 September 2017

Whitewater Again

There is a push to unseal the indictment against Hillary Clinton....back on the Whitewater episode.  It's an amusing thing to bring this back up and what might be sitting in the legal paperwork that was never finalized.

All that ever comes out of this Whitewater discussion is a couple of marginally competent political players and wannabe-bank empire into a joint deal to buy some overpriced rural property in Flippin, Arkansas (about 130 miles north of Little Rock). The site was near the Buffalo National River Park, which has thousands come in yearly for camping and recreation.

The concept to the Whitewater project was to break up this 230 acre tract of property near the White River, and sell it as upscale cabin property for visitors (there’s no major airport nearby so you’d have to drive in for the most part).

At this point in the 1975-to-1979 period....folks were starting a recreational phase....where they wanted a little bit of civilization and a bit of the Ozark wilderness.  It could be rough....but only marginally rough.

Flippin?  It's a town in north Arkansas with a population of around 1,300 residents.  Back in 1975, they would have had around 850 folks living in the local area.  There's two US highways that transit the interstate.  The nearness to the national park?  It's about ten miles to the south.  Major urban areas?  Springfield, Missouri is about an hour's drive away.

While the strategy had some was built upon the idea that you needed to buy the property and wait. There’s a variety of talk over the waiting period...some people think they needed at least five years....some would speculate that a dozen years were minimum on what’d it take to turn this property into profit. In this case, two issues popped up.

The first was the timing. In the latter part of 1977...interest rates were at a decent level and people were attracted to long-term investments like this, and the idea of buying an acre of property for vacation properties. Oddly...about 15 months after the purchase by the joint Clinton-McDougal team...interest rates had done a hefty gain, and made the purchase deal into a mess, and no buyers were coming in for the small-tract purchases.

The second issue was the Clinton need to turn a profit in a short period of time. This $203k that the joint team put down on the property...would today be worth around $900k. For Bill and Hillary...this long drawn-out wait with a substantial amount of their savings was a major problem. For McDougal....they really didn’t have the money to keep up interest payments.

On ranking risky investment options...I suspect most people would say that this was a ‘8’ on a scale of one to ten, and would only have worked if they’d sat on the property for twenty-plus years...something that neither party were capable of doing.

As for criminal behavior? Most of this comes from another McDougal project (without Hillary or Bill involved) in the 1985 era (the Casa Grande episode). In this situation...illegal bank loans were worked up and allowed McDougal to run another land speculation scheme....this one being much closer to Little Rock and had a lesser risk factor. The bank audit laid out the illegal loan, and investigators looked back at the Clintons to see if the same pattern had been used then....which for the most part...could not be proven.

The only shocker now if this draft indictment were IF some evidence showed another illegal loan used in some fashion, with Bill or Hillary signing it. Since the property purchase for Whitewater was $203k (the 1979 price) has to wonder if there was some second loan used in the down-payment process with fraudulent data.  No one has ever suggested this occurred, and that the money 'lost'....was purely their money and McDougal's cash.

Bringing this all to an end?  An end to what?  A bad land speculation deal that never paid off?

It would be different if you came up and laid out that these sixty-odd lots were all bought by 'friends-of-Bill' for inflated prices (100-percent over the original purchase price).  It doesn't appear that this really occurred.  Maybe there's something in the draft package which will show a dozen folks came and bought a dozen lots way beyond the $40k for a 2.5-acre lot.  I'll reserve judgement until the smoke clears on this one.

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