* Excerpted from Whitewater: A Journal Briefing (from the editorial pages of the Wall Street Journal).  Edited by Robert L. Bartley. ©1994 *

O Temporal O Mores!

(Wall Street Journal, March 21, 1994) * I was raised to believe the American dream was built on rewarding hard work. But we have seen the folks in Washington turn the American ethic on its head. For too long, those who play by the rules and keep the faith have gotten the shaft. And those who cut corners and cut deals have been rewarded. – Bill Clinton, in his acceptance speech at the Democratic National Convention, August 16,1992. Oh the times! The mores! – Cicero, First Century B.C. * The latest round of Whitewater news reports shows two things that anyone trying to comprehend this story has to understand. First, it wasn’t only Whitewater; the Clintons were involved in at least one other fast-buck deal with other corporate interests heavily dependent on regulation. Second, it wasn’t only Arkansas. The confusing, long-ago arcana from Arkansas’s political backwaters are relevant because there are now signs that the same practices and same inter­ests – the same mores – are spreading through the Washington bureaucracy.

* * *

  Hillary Clinton, it turns out, pocketed $100,000 playing commodity futures between October 1978 and October 1979, with James B. Blair, the powerhouse attorney for food giant Tyson Foods Inc., looking over her shoulder. In a New York Times team report written by Jeff Gerth, Mr. Blair said Mrs. Clinton decided the size of the trade and “We dis­cussed whether she ought to be long or short.”

Hillary Diane Rodham Clinton

Hillary Diane Rodham Clinton

Mrs. Clinton’s attorney says it was her own money at risk, and some of her administration defenders said that in playing commodi­ties she studied up on financial data, including reading The Wall Street Journal. Thanks for the endorsement, but we wouldn’t advise it to other commodities amateurs. Financial cynics would like to know more about the trades, and the market prices at the time, and about the accounts, both hers and Mr. Blair’s. Their principal broker went bankrupt, but says that Mr. Blair “left happy.”   We would also be curious about whatever other money Mrs. Clinton made in 1978 and 1979, years for which the Clinton tax returns have never been released. Correspondents for the Knight-Ridder newspa­pers asked the President about this in a March 12 interview, and pro­voked a tirade against the press. “Mr. Clinton’s face reddened in anger,” they reported, and he “abruptly ended the interview, strode past his visitors without shaking hands and stood behind his Oval Office desk until they were escorted out.”

 “Mr. Clinton’s face reddened in anger,” they reported, and he “abruptly ended the interview, strode past his visitors without shaking hands and stood behind his Oval Office desk until they were escorted out.”


  Tyson also figures in a new SEC investigation, reported Friday by the Journal’s Bruce Ingersoll and Michael K. Frisby. The agency is looking into suspicious 1992 trading in the stock of Arctic Alaska Fisheries Corp. just before the announcement that it was being acquired by Tyson. Several Arkansas investors are under study, including Phoenix Group Inc.; the president of Phoenix was Patsy Thomasson, now director of the White House Office of Administration, former associate of drug convict Dan Lasater in a company that preceded Phoenix, visitor to Vincent Foster’s office the night of his death and point-person in the controversy over White House passes and security clearances. She issued a statement saying she had nothing to do with trades in Arctic. A similar denial was issued by Associate White House Counsel William Kennedy III, who has a relative under investigation in the Arctic deal.


  Mrs. Clinton’s commodity streak started just before Bill Clinton’s election as Governor of Arkansas, and just as he completed his term as Attorney General. The Times story recounts a series of regulatory decisions that favored the Tyson operations, as well as the appointment of Tyson executives to state posts, plus some allegations of Tyson benefits under the Clinton Presidency. A Tyson spokesman says it only took advantage of normal state industrial development programs, and “There is absolutely no evidence that Jim Blair’s rela­tionship with Bill or Hillary Clinton had any impact on our treatment.”   Mr. Blair and his wife, our Mr. Ingersoll reported last week, slept at the White House the night of the Clinton inaugural. He also reported on a controversy about sanitary requirements. The Department of Agriculture has imposed on meatpackers a “zero tolerance” policy on fecal matter, and was considering a similar requirement for poultry. This initiative was stopped by Agriculture Secretary Mike Espy, whose brother had received Tyson contributions in an unsuccessful Congressional race in Mississippi. The AP followed this story, report­ing a quote from Wilson S. Home, who recently retired after being in charge of USDA’s meat and poultry inspectors for six years: “The mes­sage was very, very loud and clear that we were to stop the process.”   Since we’ve been known to express doubts on the merits of envi­ronmental and sanitary regulations, let us detail another matter only briefly touched on in the Times stories. The Pacific Fishery Management Council, a federal commission, issued an order last spring divvying up the $100-million-a-year whiting catch off Oregon, Washington and California. The big argument is always over how much can be taken by large factory-trawler operations and how much by mom-and-pop shore-based fishermen.   The spring ruling gave 63% of the catch to the on-shore operations. The council’s decisions must be ratified by the Commerce Department but normally that’s just a formality. On those rare occa­sions when Commerce has disagreed with a local decision, it has sent the issue back for reconsideration by the fishing council. Not this time. When the Federal Register appeared on April 15, 1993, fisher­men were shocked to discover that factory trawlers had been allocat­ed 70% of the whiting catch.   The largest operator of factory trawlers is Arctic Alaska Fisheries Corp., owned by Tyson (see above).   There have been the usual denials. Douglas Hall, head of the National Marine Fisheries Service, says the trawler take was in line with historical norms, and says that the decision was made in his office, not by Commerce Secretary Ron Brown. Rep. Elizabeth Furse, an Oregon Democrat, called for hearings on the issue, but was rebuffed by the Congressional leadership.


  Tyson’s legal work has long been handled, predictably, by the Rose Law Firm, which brings us to the final citation in the new crop, the cur­rent New Republic cover, “The Poisoned Rose.” L.J. Davis’s superla­tive account is must reading, above all for those who are confused by all the excitement about a two-bit land deal in the Ozarks. What Mr. Davis understands is that the Rose Law Firm, for all its color, is fun­damentally an appendage of the Stephens interests, which use Arkansas as home base for a world-spanning financial empire. It financed Tyson and other successful Arkansas businesses, in addition to handling the brokerage when front men for BCCI bought into First American Bank and installed Clark Clifford to run it.   Arkansas, Mr. Davis writes, “bears a close resemblance to a Third World country, with a ruling oligarchy, a small and relatively power­less middle class and a disfranchised, leaderless populace.” This kind of civic culture, we see in many actual Third World countries, is like­ly to produce a spoils-to-the-victor, above-the-law approach to gov­ernment. That is to say, the kind of careless arrogance we have seen in the handling of Whitewater, in the White House passes, in Webb Hubbell’s law firm billings, in Travelgate, in intervention into an ongoing corruption trial, in the handling of Mr. Foster’s death and in the handling of various individuals including Zoe Baird, Kimba Wood, Lani Guinier, Bobby Inman and Chris Emery, a White House usher dismissed over phone conversations with Barbara Bush with no warn­ing and less than a week’s notice.


  Whitewater is not merely about a land deal, it is about all of these things, and about the place they are bidding to assume in Washington, which God knows is guilty of enough sins of its own. Above all it is about hypocrisy. Say that one after another the expla­nations are innocent. Hillary was lucky in commodities and unlucky in land speculation. Jim Blair and Patsy Thomasson are just friends; James and Susan McDougal and David Hale and Dan Lasater are just former friends. Lay aside all suspicions and accept every cover story. We are now supposed to believe Bill Clinton was elected President to reform the sins of the high-flying 1980s? *

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