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Witness Interviews Might Clear Up Mystery, Report Says

June 30, 1995

WASHINGTON (AP) _ A report to a government agency trying to track the money trail in the Whitewater affair was unable to answer a key question: whether funds from a failing savings and loan owned by a business partner of Bill Clinton went to his gubernatorial campaign.

Little can be established from the documents alone and only interviews with witnesses might clear up the matter, says the report, according to a person familiar with its contents. The report was compiled by the law firm Pillsbury Madison & Sutro for the Resolution Trust Corp. The RTC is handling the cleanup of the thrift industry.

Earlier inquiries by RTC investigators had suggested that Madison owner James McDougal conspired with another businessman in using the S&L to make illegal contributions to the Clinton campaign.

But the report by Pillsbury reached no such conclusion in an analysis of $23,500 in contributions dating to an April 1985 fund-raiser held at the S&L owned by McDougal, the source, speaking on condition of anonymity, said Friday.

One of the checks was for $3,000 check and was written on an overdrawn account from James and Susan McDougal to a Clinton campaign committee.

Although it has been suggested that the payment on the overdrawn account was made on McDougal’s authority, no document has been discovered that shows McDougal approved it, says the report, according to the source.

In another instance, the report was unable to conclude that the S&L provided the funds for a cashier’s check listed for former Sen. William Fulbright. The report says evidence suggests that someone other than Fulbright might have gotten the money, but there is no finding in the report that the cashier’s check, purchased by McDougal, came from Madison.

The report found that the S&L had been tapped for $88,000 to keep Whitewater afloat during a four-year period, though it uncovered no evidence that the Clintons knew about the transfers.

McDougal has criticized the Pillsbury report, saying there were no illegal transfers to Whitewater.

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