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The Whitewater Controversy (also called the '''Whitewater scandal''' or simply '''Whitewater''') was an American political scandal regarding allegedly improper Real Estate dealings by Bill and Hillary Clinton and their associates in the Whitewater Development Agency in the 1970s and 1980s. Widespread public discussion of the subject came after a 's investigation of the matter resulted in criminal charges against principals in the Whitewater investment. However, three separate inquiries into the Whitewater affair determined that the evidence was insufficient to prove to a jury beyond a reasonable doubt that the Clintons knowingly participated in any criminal conduct. PREFACE TO WHITEWATER In 1978 , Bill and Hillary Rodham Clinton created a business named Whitewater Development Corporation with friends and Little Rock , Arkansas residents James B. McDougal and his wife, Susan McDougal . As real estate values began a steep decline, their investment of over $300,000 was lost and the venture failed. (This money was from David Hale to the McDougals. Hale said he was pressured by Clinton to give the McDougals the loan, a charge which Clinton denied under oath). Seven years later, in , Madison Guaranty. McDougal subsequently involved several others to produce the additional funds. Among these was Seth Ward , an employee of the bank, who helped funnel the additional $1.15 million required. To avoid potential investigations, the money was moved back and forth among several other Investors and intermediaries. However, in 1986 , their scheme was unveiled by federal regulators who realized that all of the necessary funds for this real estate venture had come entirely from Madison Guaranty. In July of that year, the McDougals resigned from Madison Guaranty. Seth Ward fell under investigation, along with the lawyer who helped him draft the agreement. THE CONTROVERSY Following Bill Clinton's bid for the presidency, he and his wife were repeatedly questioned by reporters about the Whitewater failure and the Clintons' legal involvement with Castle Grande. On July 20, 1993, at Fort Marcy Park in Virginia, White House deputy counsel and longtime friend of the Clintons Vince Foster was found dead of a gunshot wound (his death was later officially ruled a suicide). It was also disclosed that that chief White House counsel Bernard Nussbaum had removed documents concerning the Whitewater Development Corporation from Foster's office after Foster's death. At Clinton's request, a . The Clintons were cleared of any wrongdoing in two reports subsequently prepared by the San Francisco law firm of Pillsbury Madison And Sutro for the Resolution Trust Corporation , which was overseeing the liquidation of Madison Guaranty. On January 26 , 1996 Hillary Clinton testified before a Grand Jury concerning her investments in Whitewater. The Grand Jury inquired into how Vincent Foster's papers ended up in the White House . Over the course of the investigation, fifteen individuals — including Clinton friends James McDougal and Susan McDougal, White House counsel Webster Hubbell and Arkansas Governor Jim Guy Tucker — were convicted of federal charges unrelated to Whitewater. Four of these were pardoned by Clinton in the final hours of his presidency (see List Of People Pardoned By Bill Clinton ). RAY REPORT Kenneth Starr's successor, Robert Ray , released a report in September of 2000 that stated "This office determined that the evidence was insufficient to prove to a jury beyond a reasonable doubt that either President or Mrs. Clinton knowingly participated in any criminal conduct." Ray's report effectively ended the Whitewater investigation. REFERENCES
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