Black Crawling Systems Archive Release 1.0/Black Crawling Systems Archive Release 1.0 (L0pht Heavy Industries, Inc.)(1997).ISO/tezcat/Clinton/Davis_Interview.txt

Internet Message Format | 1996-07-08 | 49KB

From the Radio Free Michigan archives

ftp://141.209.3.26/pub/patriot

If you have any other files you'd like to contribute, e-mail them to
[e-mail].
------------------------------------------------


L.J. DAVIS INTERVIEW

L.J. Davis, author of an article offering a good look beneath the
surface of Arkansas politics ("The Name of Rose", *The New
Republic*, April 4, 1994), was interviewed by phone by David Inge
of the local PBS-connected radio station on August 4, 1994. What
follows is my transcription of that interview.

 +  +  +  +  +  +  +  +  +  +  +  +  +  +  +  +  +  +  +  +  +  +

DAVID INGE:
..Arkansas. Recently, in Washington, D.C., the people there on
the hill have been consumed with this matter that has come to be
called "Whitewater". But their investigations are largely limited
to what has happened *in* Washington, after the Clintons *came*
to Washington. What it sort of leaves out, and a big hole, we
think, in the story, is getting a sort of a better understanding
about how things worked in Arkansas before President Clinton
became President.

We'll be talking with a guy, his name is L.J. Davis, who is a
contributing editor to *Harpers* magazine, about politics in
Arkansas, and some serious issues that are raised by an article
that he wrote for *The New Republic*.

So that'll be in hour number 1. And in hour number 2 we'll be
talking about a book entitled *Who Owns Information?* Our guest
is Ann Branscom, a scholar in residence at Harvard University.
That'll be in hour 2 [CN -- not covered here], after news. Stay
with us.

[...]

Good morning, and welcome to this first hour of "Focus 580". This
is our telephone talk program. My name's David Inge. Glad to have
you listening.

In this part of "Focus 580", we will be talking about Arkansas
politics, and about the matter that has come to be called
"Whitewater". Last week and this, in Washington, members of
Congress have been holding hearings into the Whitewater matter.
What they are doing in their hearings is trying to determine
whether or not the White House tried to influence the
investigation of the failure of a savings and loan in Arkansas,
Madison Guaranty. It went "belly up" in 1989.

The former owner of Madison was a man named James McDougal, who
was a partner with the Clintons in the Whitewater development, an
unsuccessful vacation home development in Arkansas, in northern
Arkansas, along the White River.

And the focus of the hearings, and a lot of the discussion in
Washington, has been: what happened after the Clintons came to
Washington. And whether they, and people in the White House,
tried to influence this investigation. There has not, so far,
been very much discussion about what happened back in Arkansas --
either surrounding Whitewater or, in a more general sense, what
politics are like in Arkansas. And knowing that may, indeed, shed
some light into the conduct of the administration and some people
who worked in the White House.

So, we have been casting around to find someone to talk a little
bit about, to get this whole business with, and to get some more
background on, Whitewater and Arkansas. And based on a suggestion
from a listener, we set up the interview that we're doing this
morning. And we're going to be talking with a journalist named
L.J. Davis. He's a contributing editor to *Harpers* magazine. And
much of our conversation this morning, here, will be based on an
article that he wrote, that was published this past spring, in
April [1994], in *The New Republic*, which takes a look at the
influence of one particular, prominent, wealthy family in
Arkansas, their connection with the Rose Law Firm (for which
Hillary Clinton worked). And then, also, their ability of, the
ability of a *number* of people, to influence policy to their
benefit... largely to their *financial* benefit.

As we talk, you certainly should feel free to call in and be part
of this conversation. Our number here in Champaign-Urbana: 333-
9455. We also have a toll free line (it's good anywhere you can
hear us), and that is: 800-222-9455. 333-WILL and 800-222-WILL.
Those are the numbers.

Mr. Davis, hello!


L.J. DAVIS:
Hey! Glad to be here.


INGE:
Well, we appreciate you talking with us. It's good to have you
with us.


DAVIS:
Well, it beats workin'.


INGE:
Uh well that's what I think. But I do try to maintain *some*
semblance that this in fact *is* work. But, you know, I think
most of the people that, at least, I work with see right through
it [CN -- good example here of thigh-slapping Midwestern humor].
So far the audience hasn't.

Anyway, I appreciate your being here.

Um, in many ways this is obvious why this is a good story.
Because it *is* a good story. And because it involves the
President and it involves power and money and so forth. And at
the same time, it seems that there hasn't been very much, very
good, in-depth coverage, really, of the whole business. As much
coverage as it's gotten, it's been rather superficial. Uh, aside
from things... There has been some stuff written by reporters
from the *L.A. Times*, from the *New York Times* [CN -- also
*Wall Street Journal* and *Washington Times*]. You did this piece
for *New Republic*.

How is it that you got interested in writing about this whole
business?

            -+- "Colleagues" Avoid Arkansas -+-

DAVIS:
Well, I was puzzled by something back in 19-aught, '91, '92: the
fact that we seem to be electing a man President of the United
States who we didn't know the first useful thing about him. And I
kept waiting for my colleagues -- and the *L.A. Times* was the
honorable exception here -- to go to Arkansas and find out what
kind of a place Arkansas was, and what kind of a political milieu
it had, and what forces might have shaped William Jefferson
Clinton. After all, he was a long-serving Governor. He was
Governor for 12 years!

And so I went to Arkansas, in part, to discover what kind of a
Governor Bill Clinton had been. And what kind of politics the
state was dominated by.


INGE:
One of the questions that...


DAVIS:
Or characterized by.


INGE:
..you raise in this piece that you wrote, and I think comes into
a lot of people's minds as one tries to weigh what Whitewater was
all about, who did what, and just how serious it is: the... In
Washington, the Democrats (obviously), it is their interest to
try to protect the President, because he is a Democrat. And the
Republicans are doing what they can to try to make the President
look bad. And that's clearly partisan politics.

Now there *are* also some serious issues involved here. And so we
wouldn't want to belittle *that*. But as one is trying to puzzle
out just what happened and how serious it all is, and one seems
to sort of be leaning in the direction of thinking that, well,
relatively speaking it's not terribly serious -- the question
that *does* come up (and you raise it and I think other people
have raised it) is: If, indeed, it's not such a big deal, why is
it that the Clinton administration has worked so hard to try to
keep the lid screwed on so tightly?

               -+- A "Flexible Attitude" -+-

DAVIS:
I can't give a definitive answer to that, because I don't know
the President's thinking. On the other hand, he has consistently,
throughout his career, shown a -- I'm going to choose my words
very carefully here, because I neither like nor dislike Clinton.
I don't know the man. -- but uh, shown a somewhat "flexible
attitude" toward the truth. And the "book" on him in Arkansas is
that Bill Clinton absolutely believes anything that he's saying
at any given moment. Even if it contradicts what he said about 10
minutes ago. And this is coming from friends and enemies alike.

Arkansas is a rather peculiar place, but you're right to put this
into some kind of perspective. Let's have a brief look at, or try
to do a brief overview here: Look who's investigating this um,
"small mess". (I again choose my words carefully.)

                -+- Honor Among Thieves -+-

Whitewater appears to me to be, after a long study of the
situation, a fairly minor -- yeah, highly questionable -- but a
fairly typical S&L deal from the rogue years of the 1980s. If you
shift your sights across the country to Arizona, Governor Fife
Symington(sp?) was involved in a highly questionable S&L deal
that netted him millions of dollars. And then, amongst the
inquisitors of course, we forget that Senator Riegle was one of
the "Keating 5"! The people outside New York may not be aware
that Senator D'Amato is widely known as one of the greatest
practitioners of "pecksniffery" in the United States Senate. And
Senator Gramm got *himself* messed up in a sweetheart deal with a
cratered S&L in his own state of Texas, where he ended up with --
oh, let's see -- Bill Clinton claims to have lost $60,000 in
Whitewater. Senator Gramm got himself $50,000 worth of free
cabinet work out of a cratering S&L owned by a former political
associate friend of his. {1}.


DAVID INGE:
There is this question -- and perhaps eventually it will be
resolved -- about whether or not federal money that was earmarked
to help bail out the S&Ls somehow managed to go into the Clinton
campaign fund. Is that something that you have any insight on, or
you think at some point there will, indeed, be an answer to that
question?


L.J. DAVIS:
I think that there probably already exists an answer to that
question in the examination reports in the RTC [Resolution Trust
Corporation]. In order to find this out, however, the senators
and congressmen are going to have to stop posturing and start
asking the right sorts of questions.

               -+- Charles Keating Did It -+-

Federal money (to the tune of, according to one very reliable
estimate) that was poured down the ratholes of the S&Ls in the
1980s, may have eventually cost the country 2 trillion bucks, or
approximately the cost of World War II. So remember, they are
federally insured funds that we're dealing with.

And then there was also the possibility of a bank like, of an
S&L, like Whitewater, drawing upon its regional home loan bank
for additional emergency funds to shore itself up. The thing was
cratering almost from day one. It had *all* the signs of an S&L
going out of control -- for one thing, it was *growing*
exponentially. Now this might be *real* good news if we were
talking about General Motors, say, or IBM, were growing at this
rate. But when a financial institution begins to grow at this
rate, it's a sure danger sign.

The question is: Why wasn't it stopped earlier? The answer is:
Why weren't *all* of them stopped earlier? We have *hundreds*
across the country that were doing exactly the same thing.


INGE:
Let me re-introduce our guest: We're talking this morning with
L.J. Davis. He's a contributing editor to *Harpers* magazine. He
is also the author of an article that appeared this past spring,
in April, in *The New Republic*, about Arkansas politics. And we
will get into that in a moment, and also will invite people who
are listening -- if you have questions, comments, we will involve
as many people as we can. All we ask is that people try to be
brief so that we can accomodate as many different callers as
possible. But, in any case, your questions are welcome -- 333-
WILL; 800-222-WILL.

Well, talking about Arkansas here: In the article you make a
point that while Arkansas is one of the poorest states in the
country, it has, indeed, some of the richest families in the
country. And if you're gonna understand Arkansas politics, you
need to know one name -- and that is the name of Stephens. The
Stephens family, that has made a lot of money in various kinds of
business and has a lot of important friends in politics in
Arkansas.

Tell us about the Stephens family.

                   -+- Real Rich Guys -+-

DAVIS:
Well, you know, we've been talking a lot -- not just now, but the
country's been talking a lot -- about all the back scratching
that seems to go on in Arkansas. It's fairly typical of virtually
any state. But Arkansas is unique amongst states, because thanks
to the Stephens family it possesses the only major investment
bank in the country that is not headquartered on Wall Street,
called *Stephens, Inc.*, in downtown Little Rock. In Wall Street
terms, it would be a mid-tier to lower-bracket firm, but in a
place like Arkansas it has, apparently, *enormous* economic
clout. Thanks to the Stephenses, for example -- or if it hadn't
been for the Stephenses, for example -- Sam Walton might be known
locally as the "most inventive retailer in Bentonville,
Arkansas". But they handled his original stock offering that
enabled him to go national and has been instrumental in, of
course, the fortunes of Tyson Foods and the other companies that
are located in Arkansas. (Which I also pointed out in the
article, is a state that has no reason to be poor. It is
*abundantly* endowed with natural resources.)

The story of *Stephens, Inc.* is in some ways a saga of American
capitalism, a true rags to riches story. Witt Stephens, the elder
of the two brothers that came to dominate the place, started his
career by selling Bibles, belt buckles, and municipal securities
out of a buckboard during the Depression. And eventually [he]
realized, of course, that municipal securities were going to be a
bonanza when their values revived after the Depression was over.
And that was the foundation for the fortune. They were heavily
into bonds throughout much of their professional career, but then
moved on to a whole spectrum of investment banking activities --
underwriting stocks, participating in deals, that sort of thing.
In addition to which, the Stephens family itself privately owns a
bewildering variety of, or has shares of a bewildering variety
of investments.

In other words, they're real rich guys.


INGE:
Huh, yeah. Real rich guys.

Let's talk about how Worthen Banking Corporation came to be. This
was a bank holding company that was set up by, I guess, Jack,
Jack Stephens, who is now the, sort of the head of the family.
Witt, the older brother, is dead now. But Jack is the one who is
now running things.


DAVIS:
Yeah. "Mr. Witt" has now passed on to his reward.


INGE:
And so they became involved with an Indonesian investor,
apparently a very wealthy man, who wanted to get into American
banking. And the Stephenses, Jack Stephens, set up this deal
involving this Indonesian man, the Stephens company, and also the
man who is the head of the prominent Rose Law Firm, in Little
Rock, where (incidentally) also Mrs. Clinton worked as an
attorney. And everybody got rich on the deal. And also, another
sort of interesting side feature is that, to make this happen, a
couple of laws needed to be changed. And that required the
signature of the Governor, who happened to be married to this
woman who was an important employee of the Rose Law Firm.

And so everybody seemed to get rich on the deal; the laws got
changed. And it starts one thinking about, you know, whether
there aren't some rather glaring conflicts of interest going on
here.


DAVIS:
Well it didn't quite work out to the satisfaction of everybody
involved. Yes, a good deal of money was made. But they had a lot
of trouble with that bank.

Now the fact that the Indonesian, Mochtar Riady, an Indonesian
investor named Mochtar Riady, was there, occurred at a very
interesting moment in the history of the Stephens investment
bank. Bert Lance had come to them with a... Remember him?


INGE:
Was director of OMB [Office of Management and Budget] under Jimmy
Carter until he got himself into some trouble and, with his bank
dealings in Georgia, and then had to resign.

              -+- "Follow the Bouncing Ball" -+-

DAVIS:
Absolutely beautiful trouble. And as a matter of fact, he was
virtually bankrupt and his fortune was facing the [unclear] yard,
back in 1979. His principle asset was a bunch of stock in the
National Bank of Georgia. But the stock had been hammered in the
market and if he sold it he couldn't possibly get himself out of
his problem.

So it was to the Stephens family of Little Rock that he turned to
solve this problem -- which attracted the attention of both the
Indonesians, and a bunch of Pakistanis who ran an institution
called BCCI [Bank of Credit and Commerce International].

When the smoke had cleared, the Pakistanis had been effectively,
and in defiance of the very clear instructions of the comptroller
of the currency, inserted into the American banking system by
means of Bert Lance's stock and some other stock the Stephenses
were disposing of in a snit, um, in Financial General that later
became First American Bank Corporation, with results that we all
know.

As for the Indonesians, they went into business with them, in the
Worthen Bank Holding Company, which, depending on any, the state
of banking in Arkansas at any given moment, is either the largest
bank holding company in the state or the second largest bank
holding company in the state.

It didn't require the signature of Bill Clinton exactly, but it
required his passivity to allow this to come into existence
despite the fact that his wife's boss, C. Joseph Giroir, had
joined with his clients, the Stephens family -- the Rose Law Firm
was one of the principle outside firms for the Stephenses -- in
forming this bank holding company. And *he* [Giroir] is one of
the one's, of course, who initially "made out like a bandit". I
can't remember the exact figures, but he received several million
dollars worth of forgiven debt, stock, and cash. That *does* look
a little like a conflict of interest, if you're goin' into
business with your client. And furthermore, your law firm now has
a whole new client: a large bank holding company that you happen
to own a hunk of.

There really is no such thing as an Indonesian multi-millionaire
who is not, in some way, connected with General Suharto and --
the dictator of the country. As I pointed out in the article: As
dictators go, General Suharto is a fairly decent chap. He hasn't
felt obliged to slaughter too many of his citizens since he came
to power in a massacre of 200,000 of them! (With the possible
exception of the [unclear] war, that the world is not paying any
attention to.)

But didn't anybody bother to question whether this was a real
good idea? That the boss of the wife of the -- you know, it's
like "The House That Jack Built", you've got to "follow the
bouncing ball" here -- of the Governor of the state happens to be
in partnership with his own client and an associate of the
dictator of Indonesia?

It gets even *more* interesting when the Worthen Bank Corporation
then proceeded -- very early in its career -- to gamble away $52
million of the Arkansas state treasury in a blatantly fraudulent
bond scheme!


DAVID INGE:
And that's... It's interesting also, because it [Worthen Bank]
very narrowly went under. And...


L.J. DAVIS:
Very nearly. And if the Stephenses hadn't written a rather large
check, it would've gone under.


INGE:
And so you also wonder why it is that no one... It seems that no
one was ever really called to account for this, for that
happening. And you know, there was sort of a similar event in
Ohio that resulted in federal intervention and a serious run on
the banks. In fact, the Governor had to declare a bank holiday,
and it was the first time that that had happened in, I don't
know, "x hundred" number of years?

               -+- The Great Non Reaction -+-

DAVIS:
And uh... Since the Great Depression.

And furthermore, Jimmy Carter's former ambassador to Switzerland,
Marvin Warner, who was deeply involved in it, went to the "pokey"
[i.e., prison]. *Lengthy* prison sentences were doled out in Ohio
to the people that had caused this. No such thing occurred in
Arkansas, as a matter of fact. In part, well, as somebody said
when I was asking that question about "Why wasn't there any
reaction?" (and Arkansas is the place of "the great non reaction"
to a *bunch* of stuff, as I documented in my article). And the
answer was, "Well, maybe there was no reaction because the
Stephens family wrote that check." In other words, Worthen [Bank]
didn't go down.


INGE:
I suppose, you know, someone might say... particularly, not so
much about *that* particular matter: the loss of $52 million in
state, Arkansas state tax receipts. But the formation of Worthen
in the first place: I guess one might say, in *any* state, the
people who are in power, the influential people in politics and
in banking and in business, know each other very well, there are
close associations. Now Arkansas, being a small state, this is a
small group of people. They *all* know each other. They *all*
live in Little Rock. So maybe it's a smaller circle than in other
states. But in any state, this kind of activity is going to go
on. And further, I suppose people might say, "Well, you know, the
*appearance* of conflict of interest and impropriety is not
necessarily the genuine article." I mean, we can *infer* a lot of
things, but is this really any worse than what we can see in
probably any other state, including this one?


DAVIS:
Well, as I pointed out earlier, a certain amount of back
scratching goes on in any state. And certainly, a lot of very
interesting things happen in Illinois! But I mentioned "the great
non reaction" to events in Arkansas.

What would happen, locally, in Champaign-Urbana, if Pakistanis
and Indonesians with a lot of money began getting off of the
planes at the local airport? Wouldn't somebody notice?


INGE:
I would like to think so.

                -+- A Teeny Bit Unusual -+-

DAVIS:
I mean, wouldn't Champaign-Urbana be a rather odd place for a
bunch of Pakistanis and Indonesians to suddenly start showing up?

And similarly, Illinois is a sophisticated, large and populous
state. And you're quite right: everybody in Little Rock knows
everybody else. Why wasn't there a heck of a lot of commentary on
the fact that they were getting off the plane at Little Rock? As
a matter of fact, one standing joke in Arkansas is, "Just who
*would* have to get off a plane at Adams Field before the
attorney general and long-time Governor would notice that
something a teeny bit unusual was going on?"


INGE:
Particularly if they seemed to be interested in buying into the
local banks. Not just that they showed up, but that obviously
they were interested in, having an interest in, some of the
state's most important financial institutions.

        -+- Yet *Another* Strange Person Shows Up -+-

DAVIS:
Well I... BCCI [Bank of Credit and Commerce International]:
possibly the largest banking scandal in modern world history, if
not world history, was materially abetted in Little Rock. At the
same time, of course, the Riady family had an idea that they
could turn Worthen into a major international banking presence.
Well this is a really good idea and seems like kind of an odd
place to do it.

But yet again, *another* strange person shows up, effecting the
introductions between the Riady's and the Stephenses -- and
that's Robert Anderson, President Eisenhower's former secretary
of the treasury.

Well nobody seems to have done a thing called "due diligence",
that is to say, find out just *who* everybody is *now*, not who
they were or who they *say* they are. Mr. Anderson was later
sentenced by a compassionate judge to not very long in prison for
running an illegal offshore bank in the Caribbean, that catered to
money launderers and tax evaders, that he nonetheless managed to
crater. And he also had some interesting, if not highly
questionable (the judge seemed to feel that they were highly
questionable), relations with Reverend Moon's Unification Church.
Is this really the guy you want introducing an Indonesian of
doubtful provenance to the largest investment bank in the state?
And then allowing him to begin to use it as a major investment
vehicle?

I mean, forgive me, but I think this is a rather strange sequence
of events. And I find the lack of investigation on the part of
the Arkansas banking authorities to be yet another one of those
omissions that characterizes the state.


INGE:
Well we have several callers here. We want to bring them into the
conversation. We will do that in a moment: continue to talk with
our guest, L.J. Davis. He is a contributing editor to *Harpers*
magazine. And if you're interested in reading the article that we
have been talking about, you'll have to seek it out. But
certainly you can find it. It was published in *The New Republic*
in April of this year.

And questions are welcome, and we'll get to them in just a
moment.

[...tape break...]

DAVID INGE:
Again, our guest is L.J. Davis. He's a contributing editor to
*Harpers* magazine.

We'll go to the phones here, starting with a local caller, in
Urbana, on line 1. Hello.


CALLER #1:
Hello. The rhetorical question you posed about Indonesians and
Pakistanis arriving in Urbana-Champaign probably didn't take a
good location. It probably wouldn't create much excitement here
because if Pakistanis and Indonesians aren't arriving every day,
they are, very, very frequently, along with Taiwanese, Koreans,
and mainland Chinese. So...


L.J. DAVIS:
Carrying bags of money, of course.


CALLER #1:
Uh, sometimes a fair amount, I should expect. At least the
Saudis.

But anyway... The question was good. I think, perhaps, the
location wasn't.

But it seems to me, the case you're making is that there are a
*lot* of muddy feet and not simply in the Clinton administration.
There's more in the previous two administrations and that it's
going to be very difficult to get Congress to come to pointing
fingers.


DAVIS:
Well they're, they're certainly trying. You know, a congressman
or a senator loves nothing more than a television camera, and
they certainly have had a lot of them recently, haven't they?


CALLER #1:
Um-hmm. Yes, they have.

                  -+- A Fat Man in a Fez -+-

DAVIS:
But you know, going back to Little Rock, you know, I mean after
I'd been there for awhile, considering the milieu and considering
the strange people that *did* show up there, I wouldn't have been
surprised if I encountered a fat man in a fez, Peter Lorre, and a
Maltese falcon! It was that sufficiently strange.

We haven't talked about the involvement of many of these same
people, including Hillary Clinton's boss, in the first, billion
dollar S&L failure in the country, which happened to occur in
Pine Bluff, Arkansas, where all the *world* seemed to come
together! You had the corrupt Prudential-Bache branch in Dallas
involved. You had Bob Straus's law firm involved. You had the son
of the mayor of Dallas involved. It was an *incredible* mess.


CALLER #1:
It still sounds to me as though this is a very *pervasive*
condition which doesn't affect a single administration but,
regrettably, sounds as though it affects everything during the
last 25 years!

              -+- For a *Long* Time to Come -+-

DAVIS:
I would say that the world changed rather considerably during our
lifetimes. And [for] our younger listeners, of course, this *has*
been their lifetime. They don't remember that it was ever
different. {2}.

One of the examples that I frequently use is that, before the
regulations were hauled off to the knackers' yards -- starting in
the Carter administration -- from the crash of '29 until the
1980s, there has been precisely *one* major stock scandal (that
everybody forgets), the salad oil scandal, in the 1960s.
Afterwards, *everything* went haywire.

Your point is an excellent one. We're gonna be recovering from
this for a *long* time to come.


CALLER #1:
I agree with you, very much so.

How do we get back to the position of considering regulation not
to be a dirty word?


DAVIS:
Well we have to acknowledge something: It seems to me that on
inaugural day in 1981, the purport of the President's message was
that human nature had just been repealed!


CALLER #1:
This never happens, of course.

             -+- A "Miraculous" Reappearance -+-

DAVIS:
Exactly. Some regulations were foolish, of course. Others were
strangling, yes. But to... Nobody seemed to think, to realize,
that those regulations were put in place by "fiends" like
Franklin Delano Roosevelt because they had a rather cynical view
of human nature: they believed that people, when placed in the
vicinity of a large sum of money, might be tempted to steal it.
And I have repeatedly pointed out, in articles that I've been
writing over the last decade or so, that before you repeal a
regulation you ought to examine the purpose of that regulation
and see just exactly what it was designed to prevent! All too
often, once the regulations were repealed, the very abuses they
were designed to prevent made a "miraculous" reappearance in our
society.


CALLER #1:
I really think we need to re-read the history of the period of
Teddy Roosevelt, and just preceding that, to see what we're
headed back for.


DAVIS:
Well, or a thing that, another period that I would call to our
attention, is the Grant administration.


CALLER #1:
Yes.


DAVIS:
A time that bears an eerie similarity to what we've been going
through for the last 15 to 20 years.


CALLER #1:
Of course that's what set up the conditions that led to the
reforms of the liberal Republicans at the end of the century and
the beginning of this century.


DAVIS:
And then the liberal Republicans turned into liberal Democrats.
In fact it was, you know, two members of the same family that led
the charge! Uh, "Teddy" and Franklin.


CALLER #1:
Yeah. And in my home state, the LaFollettes...


DAVIS:
And the LaFollettes.


CALLER #1:
..ultimately migrated to the Democrats.

Very good points! Thank you.


INGE:
Thank you for the call. Let's go to Champaign county on line
number 4. Hello.


CALLER #2:
Yeah. The wider context: I'm wondering whether you're familiar
with the Houston reporter, Peter Brouton's(sp?) book, is that?


DAVIS:
Uh, I know Mr. Brouton. I know him by telephone. We have been
telephone friends over the years.


CALLER #2:
Right. And you've seen some of his clippings and some of his
articles and that sort of stuff?


DAVIS:
I have seen... I at one point leaned, some of my stories leaned,
rather heavily on Mr. Brouton's findings.

His book, unfortunately, is, shall we say, "dense"?


CALLER #2:
Yeah. Yeah, I guess that's... I have not read it. I do know that
it has a title, and in the foreward, he says that he could easily
have put Lloyd Bentsen's name at the end of it, instead of George
Bush's, 'cause he's basically looking at underworld ties to S&L
failures in Texas. And both of those gentlemen are implicated
fairly well, I understand.

               -+- "America's Switzerland" -+-

DAVIS:
Um basically what he... I think that book is mis-titled.
Basically what he's got is a "good 'ol boy" network of the sort
that we all too frequently see in the "Bubba Belt", as I call it,
throughout American... well let's see, the "Gulf Band", as it
were, you know. The most egregious state is probably Louisiana --
"America's Switzerland", you know? I mean, in Louisiana, things
that are against the law everywhere else in the world, including
Switzerland, are perfectly legal. But, you know, you sort of get
the impression after awhile that the telegraph line between those
states and Washington has been down since 1861!


CALLER #2:
Well he [Brouton] does talk about CIA connections. It is in the
title. I forget...


L.J. DAVIS:
He does talk about CIA connections, and about... (sighs) I didn't
want to get on to this, but he *too* discovered some airports
that the CIA was apparently using -- one at Iron Mountain.


CALLER #2:
That's what I wanted to get to, was the Mena situation...


DAVIS:
Ah! The big "M" word.


CALLER #2:
Yeah. Um-hmm [affirmative]. The under-reported story, I think, as
well as some of these details, is the... and one that annoys me
most about this "new Democrat" we have, is his willingness to aid
in the *Contra* war and wink at a lot of stuff that was going on.

Apparently the Gennifer Flowers revelation came from a guy who
was disgruntled because he was "cut loose" and "left to twist in
the wind" because he was in charge of the National Guard liaison
with Oliver North's operation. {3}. Is that your understanding?

                  -+- Larry Nichols -+-

DAVIS:
I think the person who brought out Gennifer Flowers was a guy
named Larry Nichols, who was an official at a rather peculiar
bonding agency, set up by Bill Clinton and Webb Hubbell, called
ADFA [Arkansas Development Finance Authority]. And he was
"sacked" from the job because he made... He tells various stories
on this. He's told me one story; he's told other people other
stories. In fact, I can't quite tell... Mr. Nichols is not
exactly the kind of Arkansan who is such a, has such a fast and
loose way with the truth that he has to hire somebody to call his
dog! But he... He's something of a moving target in terms of his
accusations. Sometimes (and I was cautioned by some highly
reliable people in Arkansas, people whose information and
insights proved to be invaluable), sometimes, however, you'd
better listen to Larry Nichols. Because he knows something. And
then sometimes you shouldn't. {4}. You know they're currently
going off on the mortality rate of the people around Bill
Clinton, which I regard as a completely false line of inquiry.
{5}.

               -+- Another "Good 'Ol Boy" -+-

Now what was goin' on at Mena, basically, was a cocaine operation
being run by a guy, by a fat guy, named Barry Seal. Not the Black
Panther [i.e. Bobby Seale] but another "good 'ol boy" who had
once been one of the most talented pilots in TWA and the youngest
man ever to certify to fly a 747.

And he was operating out of Mena under very considerable
surveillance, interestingly, by the Arkansas State Police and the
County Sheriff! The question we have to ask *there* is,
*whatever* was going on at Mena (and we know that drugs were),
once again -- How could the Governor of the state allow something
like this to occur on his watch?? We've been talking about these
complicated financial peccadillos and suspicious circumstances.
They're a little hard to follow, but that's what I happen to
specialize in. *Here's* a fairly simple and straightforward
situation with C-123 cargo planes flying out at all hours of the
night and bringing in all sorts of strange cargo!


CALLER #2:
And going down with arms, too. Right?


DAVIS:
Well, you remember the plane that Eugene Hasenfus was caught on?


CALLER #2:
Flew out of Mena, right?


DAVIS:
It came out of Mena, yeah.


CALLER #2:
[Unclear] is it my recollection that you were roughed up? Who do
you attribute that to, if that's the case?

               -+- Man Gets Lump On Head -+-

DAVIS:
Uh, well I don't know. We did not... We weren't gonna talk about
that. I mean, let's say the magazine and I weren't gonna talk
about that, largely because -- it sounds self-serving, but --
because when you get knocked on the head by "whatever", as hard
as I got knocked, you sometimes suffer a period of amnesia. And I
just happened to have done so. I don't know what happened. I've
certainly enjoyed the ratcheting that my reputation has taken
ever since that, then. But I can remember goin' into the room,
and the next thing I knew I woke up on the floor with a
concussion over my left ear.

Now we did not report this because (1) we haven't got anything to
report. Uh, "Man Gets Lump On Head. Cannot Remember How It
Happened." That's not news. Somehow it got out anyway, and the
whole situation was complicated when the *Wall Street Journal*
mis-reported that four pages from my notebook were missing. Four
pages from my notebook were not, and are not, missing.


CALLER #2:
At least you don't remember they were.


DAVIS:
No! They're not missing.


CALLER #2:
[Chuckles] Well, if you had amnesia it's hard to say, I suppose
though!


DAVIS:
No I know what's *exactly* in my notebook! Some of the pages are
partially detached, but as I pointed out to the *Wall Street
Journal*, I could've done *that* when I stuffed the damn thing
back in my shoulder bag.


CALLER #2:
Well, I appreciate your work. And do be careful and...

                  -+- A Base Calumny -+-

DAVIS:
Well it *was* regrettable that the incident was made, uh so much
was made of that incident!

I do, I'd like to go on record here in Illinois, however, as
saying that I consider a *base* *calumny* has been uttered
against me: it's been suggested that I can possibly get drunk on
4 drinks. That is to say, so drunk that I would go upstairs and
hit myself over the head!


DAVID INGE:
And you want to deny that, categorically.


DAVIS:
I want to deny categorically that a *mere* *4* *drinks*... Why,
heavens to Betsy! I mean, my reputation has been blackened in
another way here.


INGE:
We have a little bit less than 10 minutes left. Our guest is L.J.
Davis. He's a contributing editor to *Harper's* magazine. And
we're talking about Arkansas politics. And this is something,
again, if you would like to read the article that we have been
talking about -- this appeared in *The New Republic* in April of
this year. So you'll probably have to go down to the library. But
certainly it's something you could find if you wanted to take a
look at.


DAVIS:
You'll *have* to go down to the library! We sold out!


INGE:
All right. Well you'll *have* to go down to the library. But we
found it in the library so I'm sure other people can if they
wanted to read it.

And we have 2 other people here we'll try to get to in the time
that we have remaining. 333-WILL. 800-222-WILL.

Our next caller is on line number 2, in Eureka. Hello.


CALLER #3:
Good morning. Given the fact that politics seems to be an inter-
related web of mutual self-interests and that the media often
times emphasizes such "specks" and small little items -- Could it
be that there is *more* legitimate corruption that Mr. Clinton
(as you were just talking about in that story about Mena) has
engaged in that's not even come to the fore or will never even
get reported?


DAVIS:
Well I'm not suggesting that Mr. Clinton was at all corruptly
*involved* in what was going on in Mena.


CALLER #3:
Well you were talking... Or say, the Stephens family and some of
the other shennanigans going on there.


DAVIS:
Right. Well he's possibly standing by while it's all going on.
And... well yeah. For example, for *Harpers* magazine right now
I'm doing a major piece on (it's by definition "major", it's in
*Harpers* magazine), on medical insurance fraud. And it is
startlingly pervasive. I mean, even I was startled by the... And
I thought I knew something about the subject before I began
researching it.

All of this has been goin' on under everybody's nose, in
Arkansas, and everywhere else, and there's a whole lot of
culpability all over the place -- including culpability on the
part of my colleagues and myself for not having caught it!


CALLER #3:
Uh-huh [understands]. Is that issue not even being addressed in
the medical, the proposed medical health care reform?

               -+- All People Are Good -+-

L.J. DAVIS:
Um, it... The proposed medical health care reform, despite the
interest of the Justice Department in stamping out medical fraud
-- attorney general Reno's number 2 priority, and rightly so...
But the legislation appears to be being written (hasn't been
written yet, so we don't know) as though, once again, "All people
are good". That... No investigator, federal or local, that I have
talked to (and I've been talkin' to a *lot* of them) thinks that
this health care bill is gonna be anything but an invitation to
keep right on looting.

By the way, this goes on to such an extent that on a yearly
basis, according to the most conservative estimates that I've got
from the officials, we could fight between 8 and 13 Gulf Wars
every year!


CALLER #3:
Well the Gulf War cost what? $50 or $60 billion?


DAVIS:
Um, not really. We... George Bush actually did something that
Sergeant Bilko had long wanted to do -- run the war for a slight
profit? A lot of that bill was paid for by our allies, including
the non-participating Japanese.


CALLER #3:
What specific amount are you talking about then?


DAVIS:
I'm talking about, if you factor out how much it cost to keep...


CALLER #3:
I mean, how much would the amount be? For the medical insurance
fraud.


DAVIS:
Oh! Between... going from the conservative to the high? Between
$80 and close to $200 billion a year.


CALLER #3:
And the total national health care bill is estimated at what?
$900 billion?


DAVIS:
It's gonna hit a trillion this year.


CALLER #3:
So you're talking maybe anywhere between 10 and 20 percent...


DAVIS:
That's right.


CALLER #3:
..of all health insurance costs are in the area of fraud?


DAVIS:
That's right.


CALLER #3:
They're doing relatively nothing about it.


DAVIS:
Uh, the Justice Department is, as I say, doing its best. But the
Justice Department is dealing with an FBI that was fairly gutted
during the Reagan and Bush years.


CALLER #3:
Uh-huh [understands]. Thank you very much.


DAVID INGE:
One more caller here. Line number 3. This is in Urbana. Hello?


CALLER #4:
Hello!


INGE:
Yeah.


CALLER #4:
Yes. I am Pakistani! And I am a doctor. And you *can* get drunk
on 4 drinks. And...


DAVIS:
Well, yeah. You can! I've...

                 -+- A Racist Alcoholic -+-

CALLER #4:
..To continue: I think that you're probably an alcoholic! And if
anybody notices me when I get off the plane here -- all of the
people who get off the plane, we... some of us... my dear
colleague, Dr. Singh, wears a turban. I hope we don't, don't
cause some kind of a "whatever it is"!! I think you are... I
think your whole *racism* is absolutely *disgusting*!!! And I...


DAVIS:
Doctor, may I point out...


CALLER #4:
..think absolutely ridiculous!

              -+- A Call From A Scotsman -+-

DAVIS:
Doctor, may I point out that these are not *any* of your
countrymen, just any of your countrymen that are getting off the
plane. These are people that the comptroller of the currency of
the United States has specifically stated must never be allowed
to enter the American banking system.

As for the Indonesians getting off, they are not just any
Indonesians. They are known associates of the dictator of the
country.

We're not talking ordinary people. I mean, if a Scotsman who
happened to own a, or be associated with, an immense, corrupt, or
questionable financial institution got off the plane, I suppose
we'd have a call from somebody named "Mr. McLaren" accusing me of
not liking Scotsmen!

I'm talking about a very specific kind of guy!


INGE:
Well we're down to the point here... We have maybe a minute and a
half. And I guess...


DAVIS:
I guess that [unclear] of mine backfired!


INGE:
Well. We'll have to leave that, I guess.

Um. How does... You know, what do you come away with? Maybe I can
just ask you, you know, personally, as you think about President
Clinton and the Clinton administration... I mean, as a result of
what you have done, what (and other people, they can read what
you've written and they can make their own judgement) -- What do
you come away with?

                -+- Very Serious Questions -+-

DAVIS:
What do I come away with. I come away with very serious questions
about the President's character. Very serious questions about his
judgement and the judgement of his wife, in the associations that
they have. We never even got into the family's association with
the state, a prominent investment banker who was also the state's
most flamboyant cocaine addict! Talk about addicts! I mean, a guy
that no Governor in his right mind should be associating with.

And this has been a pattern, throughout the political history of
now-President Clinton. Yes, I'm disturbed and I have questions! I
can't draw conclusions, because, as I say, we do not know the
man's mind. (And the Congress is certainly not helping us work
out his thought processes.)


INGE:
Well, I guess at that we will have to leave it. I want to thank
you very much for talking with us. We appreciate it. And you
know, perhaps sometime in the future we might get a chance to
talk again.


DAVIS:
O.K.!


INGE:
We thank you for your time, very much.


DAVIS:
Listen, thanks so much for having me on!


INGE:
O.K.


DAVIS:
O.K.


--------------------------<< Notes >>----------------------------
{1} Note that all headings (e.g. "Honor Among Thieves") have been
added by me and were not part of the actual broadcast.

{2} "They don't remember that it was ever different." Exactly.
For many, having an obviously corrupt Presidency is *normal*.
They have no memory of what it was like to have a President that
(at least in theory) you could look up to. For those growing up
today, what can they aspire to? To be like George Bush? To be
like Bill Clinton?

{3} Caller #2 seems to have a *composite* of Larry Nichols *and*
Terry Reed (and possibly other(s)) in mind when he makes this
statement. The person he attempts to describe has aspects of Reed
("liaison with Oliver North's operation") and Nichols ("the
Gennifer Flowers revelation"). No blame to caller #2 for being
confused, given the shoddy news coverage of Mena, etc. The fact
that he even *knows* "the 'M' word" speaks well of him.

{4} Regarding Larry Nichols: I personally find him to be quite
credible and have found nothing to make me think otherwise.

{5} With all respect to Mr. Davis, I think he is wrong here when
he doubts the significance of the mortality rate (a.k.a. "body
count") around Clinton. I think, at the least, it is
statistically significant. You may recall a movie called
"Executive Action". That movie, with a similar situation, hired
an actuary to examine the statistical significance of so many
deaths of potential witnesses related to the JFK assassination.
   Note also that Mr. Davis does not tell us *why* he considers
it a false line of inquiry. Is it perhaps because it is an area
that gets a bit *scarey* to consider? With all respect to Mr.
Davis, is he perhaps *afraid* to really look at it?


 Brian Francis Redman    [e-mail]    "The Big C"
--------------------------------------------------------------
"Justice" = "Just us" = "History is written by the assassins."
--------------------------------------------------------------
------------------------------------------------
(This file was found elsewhere on the Internet and uploaded to the
Radio Free Michigan site by the archive maintainer.

 Protection of
Individual Rights and Liberties. E-mail [e-mail])