Jim McDougal facts for kids

James B. McDougal (August 25, 1940 – March 8, 1998), a native of White County, Arkansas, and his wife, Susan McDougal (the former Susan Carol Henley), were financial partners with Bill Clinton and Hillary Clinton in the real estate venture that led to the Whitewater political scandal of the 1990s. Starting in 1982, McDougal operated Madison Guaranty Savings and Loan Association.

Political career

McDougal was a Democrat and a former aide to the late U.S. Senator James William Fulbright. He later was a political science professor at Ouachita Baptist University in Arkadelphia.

In 1982, McDougal made a failed bid for the United States House of Representatives against the Republican incumbent John Paul Hammerschmidt in Arkansas's northwesterly Third Congressional District. Hammerschmidt polled 133,909 votes (66 percent) to McDougal's 69,089 (34 percent). Clinton himself had been defeated by Hammerschmidt in the same district in 1974. McDougal entered the political arena again at the height of the Whitewater controversy, running in the 1994 Democratic Primary in Arkansas' Fourth Congressional District, in South Arkansas. McDougal ran last in a three-man race, getting 23% of the vote in a primary won by State Senator Jay Bradford of Pine Bluff, who, in turn, lost the general election to a first-term representative, Republican Jay Dickey in 1994's "Battle of the Jays".

Legal issues

On April 14, 1997, he was convicted of 18 felony counts of fraud and conspiracy charges. The counts had to do with bad loans made by Madison in the late 1980s. As his savings and loan was federally insured, the $68 million was paid by taxpayers. During the case, special prosecutor Kenneth Starr requested a reduced sentence because of McDougal's assistance in the investigation.

He joined with his wife, who later divorced him, and the Clintons to borrow $203,000 to buy land in the Ozark Mountains for vacation homes. When the development failed, he attempted to cover the losses with savings-and-loan funds. Prosecuted for fraud in 1984, he hired the Rose Law Firm, which had Hillary Clinton as a partner, to defend him.

McDougal held a fundraiser, which paid off Bill Clinton's campaign debt of $50,000. Madison cashier's checks accounted for $12,000 of the funds that were raised.

McDougal was also found by federal regulators to have made fraudulent loans with regard to his Castle Grande project, a real estate development 10 minutes south of Little Rock. The project was a 1,050-acre (4.2 km²) lot on which he hoped to build microbrewery, shopping center, a trailer park, and other future projects in 1985. The sale price was $1.75 million. Since state regulations prohibited him from investing more than 6% of his savings-and-loan assets in the project, he put in $600,000 of Madison Guaranty money and had Seth Ward put in the difference, which was $1.15 million. Ward lent the money from Madison Guaranty as a non-recourse loan.

Death

McDougal died of a heart attack at the Federal Correctional Facility in Fort Worth, Texas, aged 57.