East End, Arkansas: Ground Zero for the Clintons' Whitewater Scandal
An unincorporated Saline County community boomed with land deals in the '90s. Nothing has changed.
The McDougals were 30 years too early to cash in.
That's what old timers around unincorporated East End in Saline County and bordering Grant County say about the land that once captured national attention during the Clinton Administration in the Whitewater scandal.
Bill and Hillary Clinton and Jim and Susan McDougal honed in on the East End’s area land values in the 1980s when Bill Clinton was Arkansas' governor. They realized that the land along US 167 was valuable for its close proximity to Little Rock as a bedroom community for commuters to the capital city.
“We intended to subdivide the property into residential lots,” Jim McDougal wrote in his 1998 book co-authored by Curtis Wilkie Arkansas Mischief: The Birth of a National Scandal. “Within an easy commute of downtown Little Rock, it promised to be our most ambitious undertaking in Arkansas. I decided to call it Castle Grande.”
Other Saline County subdivisions that McDougal developed included Lorance Heights and Maple Creek Farms.
In the 21st century, local developers in the area have mirrored the ambitions of the McDougals and Clintons.
They see opportunity and even hope as in Bill Clinton's infamous presidential campaign mantra, “I believe in a place called Hope.”
That obviously still rings true in Saline County.
An East End subdivision currently under development is called Hope Valley, and it sits a couple of miles as the crow flies from the same property the Clintons and McDougals invested in long ago through a bank McDougal owned called Madison Guaranty Savings and Loan Association in downtown Little Rock.
Another mammoth housing development by Rausch Coleman called Spring Lake Trails sits in the shadows of Whitewater's ghosts. So do other buildings like East End Middle School – a campus in the Sheridan School District – modern churches and even a strip mall with a pizza joint and a real estate office.
All of these money-making land deals would make McDougal, who died in 1998 while awaiting parole, giddy.
As he wrote in his book, “Maple Creek was like a snow-cone franchise on a summer day. We sold the larger tracts and subdivided the rest of the property into smaller lots that were gobbled up. Maple Creek grew into a small, prosperous community.”
Today's East End developments are even a more lucrative snow-cone franchise.
What was Whitewater?
Whitewater was a 1990s political controversy that began when Bill Clinton was president.
It started with an investigation into the real estate investments of the Clintons and their friends, specifically the McDougals. The couples began Whitewater Development Corporation. The investigation was first focused on a land deal in Madison County in northern Arkansas.
But Little Rock was the center of Arkansas' power then because Bill Clinton was the state's governor, and Hillary Rodham Clinton, the state’s first lady, was an attorney at the powerful Rose Law Firm.
It was the perfect setup for them to help their friends like the McDougals make money in banking, land development, and real estate, especially in the overlooked, almost hidden, Saline County's East End, where curiously, the property has Pulaski County addresses. Much more wheeling and dealing occurred in this area than in north Arkansas especially with the Clintons’ friends.
In that way, the Whitewater name was misleading.
Even in books and newspaper articles about Whitewater, East End is seldom mentioned. Instead most articles say 10 to 20 miles south of Little Rock. But deeds from courthouses show most of the property connected to the Whitewater scandal is right at the Pulaski and Saline county lines.
East End was then, and still is, an unincorporated community with little governance.
Back in the 80s, East End was wild and rural with tracts of vacant land. International Paper Company owned thousands of acres in the area at the time.
In Susan McDougal's autobiography The Woman Who Wouldn't Talk, she wrote about the East End area during the '80s: “Madison Guaranty got off to a promising start with the purchase of a twelve-hundred-acre parcel of land located twelve miles south of Little Rock. The land was far from beautiful, as it consisted mostly of scrub pine trees and a nasty tendency to flood whenever the weather even looked like rain. But it had twin advantages of being both centrally located and cheap. Jim envisioned cutting a few roads through the property, slapping down a layer of blacktop, and offering the public the chance to own five unrestricted acres within ten minutes' drive of Little Rock for just $15,000. We decided to call it Maple Creek Farms.”
She added: “The property began selling faster than we could build roads to show it.”
Susan McDougal also talked about the school district that would serve the development. East End was consolidated with the Sheridan School District in 1949, according to a historical article written by Jim Lancaster, a long-time resident of the area, a former state representative and a current Sheridan city council member.
Susan McDougal wrote that one day a nearby landowner who was "a good six-foot-three and about 250 pounds" visited Maple Creek Farms to talk about "school problems" and the McDougals development of the area.
“Of course,” the man said casually, “you realize this is an all-white school district, and we'd hate to see that.”
Jim McDougal said to the man, “If we want to, we'll turn this into Harlem South.”
That was the 1980s, but the area and its school district hasn't come far with its minority population.
According to the Sheridan School District's student demographics, the school shows it has an 86.8% white population and 2.5% African-American population. Statistics also show that 38% of its district is low income.
Friends of Bill's
Complex land developing regardless of the decade requires a tightly woven inner circle, almost like a spider web.
The McDougals with the Clintons' help brought in their powerful buddies who were lawyers, millionaires, politicians along with land experts from Little Rock and surrounding areas. Each one had a role.
For example, take Robert W. Palmer, a former Madison Guaranty land appraiser. He pleaded guilty to federal conspiracy charges related to Whitewater.
Palmer created false appraisals for buyers to get loans from McDougal's bank. Palmer inflated estimates used to support loans made to several people including Jim Guy Tucker who later became Arkansas' governor who was indicted for Whitewater crimes and resigned from office in 1996. His resignation elevated then Lieutenant Governor Mike Huckabee to the governor's office.
Palmer's appraisals – about 90% for Madison – were inflated like the one for Tucker. The Tucker appraisal was for $1.05 million to buy a water and sewer system in the real estate development called Castle Grande near the east Saline County line.
Other Palmer appraisals were backdated.
Palmer also misrepresented his charges to Madison as “a real estate consultant fee” for “market feasibility and economic analysis.”
Bill Clinton pardoned Palmer on his last day in the White House Jan. 20, 2001. Clinton also pardoned Susan McDougal the same day.
Palmer was called a small fish in a big pond during the Whitewater investigation. While many people were involved in Whitewater, the appraiser in a land deal is always the lynch pin regardless of the decade.
Did Whitewater Ever Go Away?
Whitewater was a complex investigation intertwined with good ol' boy land deals, illegal bank loans and shady appraisals to allow developers and their buddies to profit.
The scandal haunted Bill and Hillary Clinton for decades even as late as 2016 when a judge wouldn't release the draft of Hillary’s Whitewater indictment during her failed bid for the White House against Donald Trump.
The Clintons should take a drive down US 167 the next time they visit Arkansas. They will see development expanding from I-530 all the way to the heart of downtown Sheridan.
As Jim McDougal wrote in the epilogue of his book, “And out of Whitewater grew a scandal that not only hounded the Clintons from the day they arrived in Washington, but metastasized into a beast with many heads.”