PJ 102
CHAPTER 1
REC #1 HATONN
FRI., JUL. 8, 1994 10:34 A.M. YEAR 7, DAY 326
FRI., JUL. 8, 1994
TRANSCRIPTION OF THE CLINTON
CHRONICLES TAPE
[QUOTING:]

On January 20, 1993 William Jefferson Clinton became the 42nd President of the United States. At the time, most Americans were not aware of the extent of Clinton's criminal background, nor were they aware of the media blackout which kept the information from the public.

As State Attorney General and later Governor, Bill Clinton, in 12 years, achieved absolute control over the political, legal, and financial system of Arkansas. As President he would attempt to do the same to the nation by bringing members of his inner circle with him to Washington.

The HIJACKING of America was underway. The impact on future generations would be incalculable.

Judge Jim Johnson, former Arkansas State Senator and former Supreme Court Justice (Arkansas): "Bill Clinton was born in Hope and, of course, raised in Hot Springs (Arkansas). They had open bawdy houses over there at the time and they had open gambling at the time. Clinton grew up in that atmosphere, that different atmosphere, of Hot Springs--‘if it felt good you did it'.

"He was selected to go to the ‘Nationals' from Arkansas Boy's State to be a delegate to the National Boy's State. While he was there he was able to meet John Kennedy and I'm sure that sparked an ambition in this young man.

"He has always had an exceptionally keen mind, a keen intellect. And he evidently early had tremendous ambition. He was gifted in so many ways. The truth is, he is one of the most charming men that I have ever met in my life. He has more energy than any ten people I have ever known. He was able to network himself into running for Attorney General virtually unopposed. And then he was able to take that position and catapult himself into the Governor's office two years later and started building his foundation."

Nora Waye, former partner of Bill's step-father: "When you think about Bill Clinton's aversion to the truth you wonder if this is because of the lackadaisical background that he has had in this area. He lied about being a Rhodes Scholar. He never completed that and yet still said he was a Rhodes Scholar. He went to Moscow and DID BUSINESS WITH THEM--against the United States Government--and he was never challenged by the Press about that. In Arkansas, while he was Governor, he said he balanced the budget 11 times, but he never did it once. Also, he said he didn't raise taxes, and he raised taxes 126 times."

Judge Johnson: "He can accommodate any situation that comes up because he's not hemmed-in by the truth. I've never felt that Clinton consciously or unconsciously was hemmed-in with morality."

Larry Nichols: Head of Marketing for Arkansas Development Finance Authority (ADFA): "I first met Bill Clinton in the late ‘70s. He was an up-and-coming politician. There was a group of us. There was Jim Guy Tucker, Bill Clinton, Sheffield Nelson and myself. And we kind of ran around and palled around with each other. It was from that point that I did a lot of projects for Bill from a marketing perspective.

"In 1988 I went to Bill and said, ‘Bill, I need a job to kind of relax and mellow-out.' Bill Clinton and Betsy Wright suggested that I go to work for a place they called the Arkansas Development Finance Authority and they said my talents could really be used there. It was the best kept secret in Arkansas. The fact that I was brought in by Bill Clinton meant that there was something about me that everybody had to be careful with.

"After about two weeks I went to Wooten Epes and said, ‘Wooten, I think I've got enough background on this to really start marketing, what is the criteria for loans?' He said, ‘Whoever Bill wants to get a loan.'

"To go back, though, to that moment in time--I had been there about a month and I realized that I was in the epicenter of what I'd always heard about all my life and what most people have heard about is--the machine. I was literally working, sitting in the middle of Bill Clinton's POLITICAL MACHINE. It is where he made payoffs, where he repaid favors to people for campaign support--I was in an interesting seat and I knew it.

"We had a board meeting and in that board meeting I was sitting at the end of the table. James Brandon, who was chairman of the board at that time, was sitting at the head of the table. James Brandon stood up, in a public restaurant, and he hollered at the Beverly Enterprises guy, Bobby Stephens, and said, ‘Did you get the $50,000 campaign contribution from the client that you're introducing the loan for?' Bobby said, ‘Not yet.' James then said, ‘Then hold up the loan ‘till we get it.' I stood up and went up to James and said, ‘James, don't yell stuff like that. You don't need to be yelling it in a restaurant; that sounds real bad.' He was just burly and arrogant and said, ‘Who cares?'"

Narrator: Bill Clinton sold the concept of ADFA to the people of Arkansas as a vehicle for creating jobs and assisting churches and schools. In reality, millions of taxpayer-guaranteed dollars were being channeled to Clinton's election campaigns, to his inner circle of friends and to his wife, Hillary's law firm. This may explain why ADFA had been drafted in such a manner as to keep its decision-making procedures secret.

Nichols: "If you needed a million dollars, you had to get your application handled by the Rose Law Firm and pay them $50,000 on it. There were five other companies in the State of Arkansas that were actually more qualified in bond structuring and applications but Rose Law Firm got them all.

"I started checking around and kept asking, ‘Well, one thing that is bothering me,' to the comptroller of Bill Clinton, ‘is, you know, how do people make payments on these loans?' He looked at me and said: ‘They don't.' He thought I knew. Well, that blew my mind. It was about two months in and it was getting tough then.

"So I started gathering the documents. After everybody left I would stick around as though I was working on the annual report and that would give me access to all the documents. I made copies of them all. For about two months I watched accounts accumulate money and then in a month they'd zero balanced. I didn't understand, totally, what that meant but I thought I'd go ahead and steal the records anyway. I did.

"Soon after that I met a man named Bill Duncan. Bill Duncan took the zero balance and told me what that meant. He said, ‘Do you know what that means?' I said, ‘uh-uh.' He said, ‘They're laundering drug money--over a $100 million a month in cocaine coming in and out of Mena, Arkansas.'

"They had a problem: they were doing so much money in cocaine ($100 million)--and this creates a problem in a little state like Arkansas. How do you clean $100 million dollars a month? ADFA, up until 1989, never banked in Arkansas. What they'd do was to ship the money down to Florida--a bank in Florida, which later would be connected to BCCI. They would ship money to a bank in Atlanta, Georgia which, by the way, was later connected to BCCI. They'd ship to CitiCorp in New York, which would send the money overseas. And here is an interesting one: a bank in Chicago--and THAT BANK, BY THE WAY, IS PARTIALLY OWNED BY DAN ROSTENKOWSKI. [H: Still with me, Ronn?] Dan Lasater would get the bonds. He would become the broker for the bonds. He would transfer money back to ADFA. He never SOLD a bond. The money would then leave ADFA and go into one of the various banks for the specific bond loan and they would zero it out. When they would zero it out they were giving it back to Lasater--less their handling fees."

Doc DeLaughter, Arkansas Police Detective attached to the Lasater affair: "During the Lasater investigation we had numerous witnesses for the Federal Grand Jury. We had extensive testimony from people connected with Lasater and drug use and everything else. Cocaine became used as a tool for sexual favors and also for business deals and to influence people. That's when we caught one boy with his cocaine use and ultimately led to his arrest and conviction."

Nichols: "Dan Lasater, who was the best friend of Bill Clinton and who went to jail with Roger Clinton for cocaine--and by the way, let me explain something: He didn't SELL cocaine--they were giving it away.

"There were huge piles of cocaine in his office. Ashtray upon ashtray full, at the parties. They would give it to young girls. That's sick! They were giving a highly addictive drug to young girls."

Doc DeLaughter: "Do you wonder what comes across the minds of a fourteen-year-old? Once there was involved a fourteen-year-old cheerleader out of North Little Rock. She was a virgin and ultimately he ended up sending her to a physician of his. The physician put her on birth control pills. He used cocaine with her and ultimately she lost her virginity and she got addicted to cocaine. The last I heard of her, when we had her subpoenaed back to the Grand Jury, she was a hooker at Lake Tahoe."

Nichols: "Dan Lasater laundered the money and, in addition to his contract to launder the money in the system he and Bill Clinton had set up to do it, he took advantage of some of the cocaine. That's why he could give it away. If you each have a $100 million a month in cocaine, they don't care if you took a bucket-full a day."

Doc DeLaughter: "After Lasater was indicted, I started to receive quite a bit of harassment from my own department, the Arkansas State Police. I knew the reason behind it because of the affiliation with the State Police and the Governor's office with Dan Lasater and his business associates."

Nichols: "Once he was convicted he and Roger went to a minimum security prison. Holiday Hotel we call them. He spent, I think, up to 6 or 8 months and then got out. Unbeknownst to anybody, Bill Clinton, the day after he got out, granted him a full and complete PARDON.

"So, if you think he is tough on crime, think about a man that pardons a man that GIVES COCAINE TO KIDS."

Bill Clinton in excerpt from TV ad: "Fear of violence is robbing our children of their future. We must take away that fear and give them hope. We must give Alicia and all our children back their childhood. Working together we can. Do something now, call 1-800 WE PREVENT [part of the ad in point]."

Nichols: "Your President of the United States not only was a part of the system that was laundering millions of cocaine dollars--your President signed off on it and he can't deny that he did. You see, because of that, there's one little catch: every loan at that bank--BILL CLINTON HIMSELF HAD TO SIGN-OFF ON IT.

"More than Bill Clinton, you can identify the people who laundered the drug money, you better identify the people in the loop for money laundering. What you'll find there are those people who went straight to Washington.

"Act 1062, if you look at it, says that ADFA was developed and created to provide low-interest bond loans for churches, schools, colleges. So look what happened to our legislature: they voted on the bill, creating this havoc, thinking they were voting on a bill giving money to colleges and schools to buy books, etc. What better way to run thousands and tens of millions of dollars-launder, clean it up--and use the cover of a state agency to do it.

"The first loan made at ADFA was made to Park O'Meter (POM). Seth Ward was the owner. As I started looking I found out that the State Treasurer was Webb Hubbell. Then I found out that Webb Hubbell was Seth Ward's son-in-law. Guess who drafted the legislation creating Act 1062, which created the Arkansas Development Financing Authority? Webb Hubbell. Guess who introduced the legislation to our legislators and got it passed through our House? Webb Hubbell. Guess who got the FIRST loan? Webb Hubbell. And imagine this: guess who did the audit and the evaluation of the applications? Rose Law Firm! You guessed it! Who signed it? Webb Hubbell and Hillary Clinton. You see, that's against the LAW in Arkansas--you can't investigate yourself when the good faith and credit of the State of Arkansas is involved in a bond issue. HE BROKE THE LAW! If the Good Lord's willing and the creek don't rise, Hubbell will be serving some time in the Pen for that one!"

Narrator: Ironically, Webb Hubbell, a senior partner of the Rose Law Firm was CHAIRMAN of the Conflict of Interests Committee at Rose (Law Firm). In 1988 he successfully advanced the Ethics in Government ACT which required Arkansas legislators to report governmental conflicts of interest. Incredibly, this law SPECIFICALLY EXEMPTED GOVERNOR BILL CLINTON, HIS APPOINTEES AND HIS RELATIVES. Clinton's appointment of Hubbell to the U.S. Justice Department exemplified the Administration's total disregard for LEGAL ETHICS. Hubbell's hasty resignation in March 1994, supposed to be over billing of Rose clients, was merely a ploy to remove Hubbell from the limelight before extensive criminal charges could be brought against him.

Nichols: "Let me tell you about Park O'Meter. The first loan was $3.85 million dollars. Never was a penny of that paid back--it was all a scam. They had, let's say, 100 employees when they started. They got 3.85 million dollars and do you know how many employees they had AFTER they got that influx of cash? 100. There's not a new building on the property--they didn't even remodel a bathroom.

"As the newspaper people started inquiring about the Park O'Meter loans, what they found was that, instead of making parking meters, POM was actually building retrofit nosecone compartments--THEY WERE BEING SHIPPED TO MENA. WE FOUND OUT THAT THE NOSECONES WERE ACTUALLY BEING USED TO SMUGGLE DOPE BACK INTO THE COUNTRY. WHAT IS SCARY--WHAT IS SO SCARY, IS THAT IT IS THE SAME CAST OF CHARACTERS. Webb Hubbell and The Rose Law Firm, I say to you, are guilty of conspiring to defraud the State of Arkansas, the Federal Government and conspired to solicit the sale (of drugs) and the laundering of money for illegal drugs. THIS IS YOUR PRESIDENT! THIS IS HIS CIRCLE OF POWER! THESE ARE THE PEOPLE THAT, WHEN HE GOT ELECTED PRESIDENT, DID NOT PASS GO--HE TOOK THEM STRAIGHT TO WASHINGTON WITH HIM.

"In all things holy, I think he was planning to set up and do the same thing in Washington."

Narrator: In 1982 cocaine trafficker, Barry Seal, set up one of the largest drug smuggling operations in the United States--IN MENA, ARKANSAS, UNDER THE APPROVING EYE OF GOVERNOR BILL CLINTON.

Nichols: "Barry Seal had a bunch of planes and supposedly had pilots. Barry Seal was a drug smuggler. He tried to set it up in his home state of Louisiana but they wouldn't let him. He had to come to a state who had a sleazy governor--HOOKED ON COCAINE--and everybody knew it! Yes, Bill Clinton was "hooked" on cocaine."

Bill Duncan, Investigator in the Mena affair: "In 1983 I was made aware that Sheriff Hadaway and one of his auxillary deputies, Terry K. Park, were investigating the smuggling operation going on at the Mena airport. They had an inside source of information. "Mr. Seal, our understanding was, the one who had brought the operation into the Mena airport and that had initiated the beginning of the money laundering and the illegal activity."

Russell Welch: "He (Seal) said that 1983 was the most profitable cocaine smuggling period--ever. The airplanes that he had placed at the Mena airport, a couple of Senecas and a couple of Panthers and another few stragglers here and there--he said they were purchased solely for the purpose of cocaine smuggling."

Winston Bryant, Arkansas State Attorney General: "There was, in my opinion, more than enough evidence to prosecute a number of people for crimes regarding the Barry Seal case at Mena."

Nichols: "I snuck around and crawled through the bushes thinking that I'd have to hide to catch them unloading the dope. I didn't have to. You could walk right up to the airport and they unloaded it right in front of me. They would just offload it--they didn't care."

Duncan: "A certain degree of money laundering had taken place among these people associated with Barry Seal."

Nichols: "What had not been done was to connect the dotted lines to ADFA, because once you had connected the dotted lines to ADFA you had actually connected the dotted line to Clinton."

Narrator: In addition to the operations at Mena, small clearings at other parts of the state were used as drop points for money and cocaine.

Winston Bryant: "They had special compartments installed in the side, without FAA permission, so that the door could be opened in flight and then cocaine could be dropped out of the side of the plane, in flight."

Nichols: "When you have a public which is aware of an ongoing criminal enterprise in which you have an international cocaine smuggler who is high profile; a lot of people knew that they were operating in a small area. A lot of people knew about the money laundering. It was common gossip on the street because it was so blatant. And when they see investigations ongoing for several years and they keep watching for indictments and they know grand juries are convening and they know witnesses are supposed to be providing evidence to a grand jury--yet year after year after year no indictments are returned--people lose confidence in the system."

Narrator: Clinton had integrated a number of corrupt cops, judges and politicians into high level positions to insure the continued success of the drug smuggling-money laundering operations. All was going well until on the fateful night in the Fall of 1987.

[Continued next chapter]


CHAPTER 2
REC #2 HATONN
FRI., JUL. 8, 1994 10:34 A.M. YEAR 7, DAY 326
Linda Ives, mother of Kevin: "On August 22, 1987, Kevin spent the night with his friend, Don Henry (young teens). They left Don's home around 12:30 or quarter-to-one (A.M. 23rd Aug.) in the early hours and the next thing we knew they had been run over by a train.

"There seems to be a small air strip in the area where there had been sightings and reports of small airplanes flying very low, with lights off, in the area. I believe they (the boys) saw something they shouldn't have seen. Three weeks later their deaths were ruled ‘accidental', by the State.

"The Medical Examiner, Fahmy Malak, made the ruling. We disagreed with that ruling because we thought all the evidence pointed to homicide. At that point we had a lot of questions and no answers, and the facts didn't add up to what he was telling us. So we decided to get a second opinion. We met with resistance from all fronts, with the local law enforcement, the crime lab, with everybody that we turned to. We obtained court orders requesting samples of everything that the crime lab had, for second opinion, and Fahmy Malak resisted court orders and refused to obey them."

Narrator: It was later proven that Don Henry had been stabbed in the back and Kevin Ives' skull had been crushed PRIOR to the placement of their bodies on the railroad tracks. However, Malak stood by his ruling that the boys had "simply fallen asleep on the tracks". Malak had been kept in office at the insistence of Governor Clinton for a number of years despite vigorous public outcry to have him removed. Clinton's mother, Virginia Kelly, an anesthesiologist, had allegedly caused the deaths of two patients, due to her negligence. She was sued, yet Malak's rulings resulted in her being cleared.

Ives: "Malak had covered up for Bill Clinton's mother, Virginia Kelly, in some deaths there in Hot Springs. I do know that there were some damages that were settled out of court and Virginia Kelly was forced into retirement. And it appears that perhaps Clinton was protecting Malak on behalf of his mother."

Narrator: As long as Malak's rulings pleased the Governor's office or State Police, they were left to stand no matter how implausible. Malak's obvious lack of medical knowledge reached a pinnacle when he ruled that James Milum, who had been decapitated, had died of natural causes. Yet Clinton, who had the power to remove Malak from office, insisted he stay.

Ives: "It didn't seem to matter what Malak did, Clinton protected him. He made excuses such as ‘he's overworked,' ‘he's just stressed out,' ‘he's underpaid,' etc. They gave him a $14,000 raise which was an insult to my family as well as to a lot of others in the state who, to this day, are struggling with asinine rulings in the deaths of children and other loved ones. I was outraged that [he was more interested in] protecting a political crony than that two young boys had been murdered. It didn't matter what Malak did. There were allegations of tampering with evidence in murder cases; there were allegations of perjury in different cases; there were allegations of incompetence--anything that could be alleged, has been alleged--against him. But it didn't matter what he did, ‘they' protected him."

Narrator: A number of people approached the police about Don and Kevin's murders and consequently were MURDERED THEMSELVES.

Ives: "July 14th, Keith McKaskle was murdered. He knew that he was ‘fixing' to be murdered. He told his family goodbye, told his friends goodbye and the night of the elections in 1988 he took two pennies out of his pocket and threw them on the bar where he was and said, ‘If Jim Siegler loses this election my life isn't worth two cents.' He was murdered that night. Jeff Rhodes was a young man from Benton who was murdered in 1989. Shortly before his death he made a telephone call to his Dad in Texas and told him he needed to get out of Benton, Arkansas, that he felt he knew too much about the boys killed on the railroad tracks and the death of Keith McKaskle. A couple of weeks later Jeff was found dead. He had been shot in the head. ‘They' had attempted to cut off his head, his hands and his feet, then set him on fire in the dump."

Narrator: A total of six people with information about the boys' murders were eventually murdered as well.

This woman (a woman with blanked-out features was shown in the film), a former head of the Saline County Drug Task Force, had uncovered evidence of the Arkansas Police Department's participation in the drug smuggling operation and the cover-up of the boys' murders. She was forced into hiding.

Woman: "There are no words in the English language that can describe how it makes you feel as a parent or as a citizen of Arkansas--to see what our officials are capable of doing. I think we were just kind of naive. Common ordinary people got up and went to work every day and came home and went to bed and assumed that everybody else did the same thing and tried to do what was right. I think Kevin's death has been the greatest awakening that anybody could ever have, to see what really goes on. And to see what is important to elected and public officials."

Nichols: "When Fahmy Malak finally became a liability in the campaign for President, he was forced to resign. But guess what--Bill Clinton created a $74,000 a year job, doing--nothing--just for him."

Ives: "I would like an answer from Bill Clinton as to why the main conspirators in the murder of my son, and the cover-up, have been elevated in status by creating cushy jobs for them."

Narrator: Meanwhile, Welsh and Duncan's investigation into the operation at Mena was about to derail.

Welch: We had been so busy investigating, just concentrating and focusing, that it took a while to register that nothing was going to happen."

Duncan: "We could not understand what was happening. Neither Mr. Welch nor I were ever subpoenaed to testify before the Grand Jury to present massive amounts of evidence of wrongdoing by associates of Barry Seal. No indictments were ever returned against any of the individuals. I can tell you: there was extensive evidence."

Charles Black: "There definitely was suppression of evidence and definitely a cover-up of an investigation. Somebody should be held accountable as to why that happened."

Nichols: "Not one major cocaine bust was ever made in Arkansas, out of Mena, Arkansas. Now imagine that--nearly ten years in its running and never even one truckload ever got caught."

Charles Black: "During the 1992 Governor's race in Arkansas I remember personal staff (Clinton's) had approached Mr. Bryant and asked him to stay away from the Mena affair or the Mena matter."

Polk County Prosecuting attorney Bryant: "I've done quite a bit of investigating into the Mena-Barry Seal case myself and, quite frankly, it is a Federal problem."

Welch: "After Winston (Bryant) took office, he told me he was no longer allowed to discuss the Mena airport investigation from the Attorney General's office."

Bryant: "The Attorney General's office is not like most Attorney Generals' offices across the country. We do not have the authority to convene a Grand Jury and initiate criminal prosecutions."

Duncan: "I've always thought it was a wonderful thing to be able to serve your country as a Federal Law Enforcement Agent and for 15 years I did not encounter anything like the corruption I encountered after the Mena Investigations began."

Narrator: President Clinton's verbal commitment to a War on Drugs has been negated by his actions. During his first weeks in office, Clinton revoked random drug testing for White House staff members. He eliminated 121 positions at the Office of National Drug Control. And he appointed Joycelyn Elders as U.S. Surgeon General despite her well-known desire to legalize drugs.

Nichols: "It is important enough that, out of Mena, came certain trails. One of the trails was to the banks down in Florida. One of those trails led to BCCI and guess who started BCCI, helped form it? Jack Stephens!--of Stephens Investment."

Judge Johnson: "Jack is a major stockholder in Worthen Bank. At a crucial period in the campaign the Bank backed Clinton's candidacy $2.8 million dollars. It happened that that's the identical amount that the Stephens' Company had made on a concocted transaction that involved student loan funds under Clinton's control, less than two years before--an identical amount. It's very important."

Nichols: "When Clinton had Lasater he didn't need the Stephenses. All of a sudden in 1988, while I was at the ADFA, in came the Stephenses because Lasater was in jail. ADFA had never even put its money in a state [Arkansas] bank. It had always kept its money in banks in Chicago, Georgia, Florida. When the Stephenses came in they bought Worthen Bank and guess where ADFA assets are this minute? Worthen Bank!

"When Bill and Hillary first took over all they could talk about was how their Health Care Program was going to go after the Pharmaceutical companies. Well, lo and behold, stocks in pharmaceutical companies went down. Who other than Vince Foster and Hillary Clinton took advantage of it? They bought stock. All of a sudden then they went to Tulsa to the Governors' Convention and guess what they say? They are not going to attack the pharmaceuticals. And guess what happened? The stock goes high. I went to Mena and I say, "Guys, come on, doesn't that look a little weird? That's called, you know, insider trading..." But they said "Yeah, but they only made 10 or 12 thousand dollars, just a miniscule amount..." Think about it--that is what SHE made. Has anybody gone to the trouble to look into see how much Stephens Investment made off that?"

Narrator: One of Hillary's investments under the direction of Tyson Foods' counsel, James Blair, netted almost $100,000 on an initial $1,000 investment. A nearly impossible feat using legal methods.

Hillary: "I can't read their minds to speculate, but I had absolutely no reason to believe that I got any favorable treatment."

Narrator: Coincidentally, Governor Clinton enacted a number of State regulations allowing Tyson Foods to grow into the largest industry in Arkansas.

Nichols: "Don Tyson put in $600,000 or $700,000, all told, into all of Bill Clinton's campaigns. Guess what he got out of it? He got 10 MILLION dollars--and guess from where? The Arkansas Development Financing Authority. And he never paid a dime for it."

Doc DeLaughter, Former Nichols' lawyer: "I heard rumors of Don Tyson and his alleged cocaine use and distribution. I went through the intelligence files and came up with enough of what I thought was a sufficient amount of evidence to launch an investigation on Mr. Tyson, simply out of Arkansas State Police intelligence files, which has been accumulating for years."

Nichols: "Don Tyson was in the middle of the cocaine just like Bill Clinton, just like Dan Lasater, just like Roger Clinton and all the others. So you see, all of this incest and all of this drug running, all the trafficking sending it all over the nation--in Mena, Arkansas, right under the nose of little Billy Clinton--Governor Billy Clinton. I went to Bill and I said, "Bill, you got two weeks to tell the truth or I'm gonna tell it. You're breaking the law and I can't be a part of it. You made a mistake. I'm not one of your ‘buds'; at least I'm not THAT big a buddy."

Judge Johnson: "When Larry Nichols made his disclosures and made them public, the Clinton "Spin Doctors" treated him unmercifully. It shocked those of us who had been kept in the dark through the years in Arkansas politics. The Arkansas news media had done little, if anything, to uncover anything derogatory about Bill Clinton. And for the disclosures to come out of the blue was so shocking that the Spin Doctors attacked the messenger rather than trying to answer the charges that Nichols had made. And they did such an efficient job that it caused me and others to look with less than favor on Larry Nichols as an individual, because all we knew about him was what "they" were telling and the press was printing."

Nichols: "One of the neatest things about Bill Clinton is how he handles the media. You see, Bill Clinton is an attorney and when a witness comes against his client, what is the first thing an attorney does? He tries to discredit that witness. They accused me of everything under the sun. Day in and day out, every week--every week, there was some new scandal in the paper--that I was involved in. Six or eight weeks later they would print a retraction that it wasn't me but people to this day in Arkansas think that I am some evil person."

Judge Johnson: "As a result of that, the boy had to pay a high penalty in his credibility and a high penalty in his acceptability. And then when the new evidence came out that supported everything that Larry Nichols had said, he finds himself, I think, probably in the position of knowing that he was exonerated but he has not been exonerated in the minds of the people generally, in my view. And he finds himself, probably, in the position of wondering where he goes now, to get his good name back."

Nichols: "A lot of people wonder how Bill Clinton could control a state the size of Arkansas with the absolute authority that he did. It's not hard, you see; after twelve years, after kissing the people that have the money, Bill Clinton controlled the legal system. He controlled the judges, he controlled the attorneys, he controlled the banks."

Gary Johnson, former Nichols' lawyer: "Its just a small state--a one-party state and what tends to happen in small states like that, I think, is that the longer the person remains Governor that I think the greater the abuses are. And I think the abuses were very widespread under Bill Clinton."

Nichols: "One thing that is very hard for people to understand is that Bill Clinton doesn't care about money. He cares about POWER. All he needed ADFA to do was to channel money to the big players, financially. I got tickled when the reporters during the campaign came here. They were looking and trying to find out where Bill Clinton profited. He didn't. He profited by putting money into his friends' pockets."

Gary Johnson: "The way they were doing these bond issues, the whole political atmosphere was, frankly, a scandal. But that's the way it had been historically done in Arkansas."

Nichols: "Imagine this: imagine the POWER this man has in Washington D.C. Imagine what he can do to this nation if he gets that circle of power going there, as he did here. Nothing I can do and nothing you can do, can stop it! You'll see who has the absolute power and, believe me, he will use it to have you investigated, to have you arrested, to have your company audited and that's what will happen when this circle-of-power is complete.

"When I worked at ADFA it was not uncommon for Bob Nash to call me up and say, ‘Hey Nichols, the Governor needs about five grand transferred to his Travel Account so he can go see his ladies.' And we would, at ADFA, transfer five or ten thousand dollars for him to go see his girlfriends in either L.A. or New York. He had used so much travel money to go see women, out of his regular travel budget, he would even have to borrow money from ADFA, not to mention the fact that ADFA's budget was not as highly scrutinized as the Governor's budget. But he literally used the money, ADFA money--people of Arkansas-taxpayers' money--to conduct liaisons."

Narrator: During the 1990 Gubernatorial race, Larry Nichols, in a last ditch attempt to alert the public, boldly filed a lawsuit against Bill Clinton. As expected the lawsuit was eventually quashed, sealed and illegally dismissed by a Clinton-appointed judge. What Nichols didn't expect was a complete media blackout of the facts he presented.

Nichols: "Back in 1990, after all the damage they had done to me, I did something that most people wouldn't do, in Arkansas. I sued Bill Clinton. It's very important to note that, in that lawsuit, I brought out the names of five women. On October 19th I held the only press conference I'd ever held in my life. It was on the Capitol steps of Arkansas. Every news organization in Arkansas, along with TV and Radio, were there on the steps. I read the names of the five women. I read about and talked about ADFA. No one had ever made such a cold, calloused statement with Bill Clinton when he named the women (as I did). When I got through with the press conference I went through the center door and I walked, with the camera crews with me, walked all the way to the end to the Governor's office and I left the press release right on the Governor's secretary's desk.

"Not one minute of the press release made it into the local TV or the local newspapers--anywhere. It didn't show up anywhere. The reason I tell you that, is because in those days he had the circle-of-power completed in Arkansas."

Narrator: Eventually, every allegation stemming from Nichols' 1990 lawsuit and press conference were proved valid regarding Clinton's taxpayer-financed sexual liaisons, his drug usage, and his criminal activities related to ADFA and Whitewater. Gradually, the women who had carried on adulterous affairs with Clinton began to emerge. The first was Jennifer Flowers who, like all those close to Clinton, was faced with a decision to either keep quiet and receive a government job or go public and face character assassination in the press. Betsy Wright, Clinton's former Chief of Staff, admitted she had been hired to conduct media smear campaigns against anyone planning to tell the truth about the Governor's sexual habits. She was prepared to go after at least 26 women who had the potential of destroying Clinton's chance at the Presidency.

Nichols: "In the 1992 presidential campaign, I was getting bludgeoned by the media because Jennifer Flowers had come out of my lawsuit. A man called me on the phone on a Monday. His name is Gary Johnson. He was an attorney. He told me that he felt bad because I was being bludgeoned and he wanted to talk to me about handling my case. Well, I was craving an attorney, any attorney, to help me."

Gary Johnson: "You know, I saw Larry out there doing battle, so to speak, on his own and I felt like he needed some help."

Nichols: "I met him on a Tuesday. He was a special attorney--I didn't know he lived next door to Jennifer Flowers."

Narrator: For security purposes Gary Johnson had installed a video camera near the front door of his Quapaw Tower condominium.

Gary Johnson: "Looking at someone in front of my door got a perfect shot of anyone in front of Jennifer Flowers' condominium. It wasn't my intention, ever, to take pictures of Bill Clinton going in to see Jennifer Flowers. I couldn't care less who he goes to see. But it just so happened that she lived next door to me and I mounted the camera there."

Nichols: "Guess what he caught on tape? Bill Clinton walking into Jennifer Flowers' apartment on numerous occasions, with a key."

Gary Johnson: "I actually saw him go into her condominium. It wasn't that I was standing there looking out my peephole watching Jennifer Flowers' condominium. It had nothing to do with Bill Clinton. It was just that I had gotten the camera. I had the camera before Jennifer Flowers moved in. When she moved in she just happened to have some very interesting house guests."

Nichols: "Go back to 60 MINUTES when Bill and Hillary were love-and-kisses and we all heard Bill say he had never been to her apartment, that he had only called her ONCE from the kitchen and from his office. That's an absolute lie and these tapes proved it."

Narrator: The 60 MINUTES interview had been designed specifically to save Clinton's campaign, not necessarily to get to the truth.

Don Hewitt, Exec. Producer of 60 MINUTES: "They came to us; we did it because that is what they wanted to do. When I told Tim Weisert that I was persona non-grata at the White House, he said ‘Why?' I said it was because of the Jennifer Flowers interview. He said, ‘You got him the nomination.' I said, ‘I know that.' As far as I know from the conversations I've had, Nussbaum knows that, Kerrigan knew that. Boy, Cutler knows it because Lloyd had a hand in his coming on (the show) that night. You know, it was strong medicine the way I edited it. He was a very sick candidate and he needed very strong medicine. And I'm not in the business of doctoring candidates but he got up out of his sickbed that night and walked to the nomination. And as I said to Mandy, ‘You know, if I had edited it your way, do you know where you'd be today? You would still be in New Hampshire looking for a nomination.' He, Clinton, became THE candidate that night."

Judge Johnson: "When the Jennifer Flowers story broke, that story was a hundred times more credible than the story that literally knocked Gary Hart out of the campaign."

Gary Johnson: "I'd been Jennifer Flowers' neighbor and I knew that Bill Clinton wasn't telling the truth about that. Bill Clinton, I think, would do just about anything to save his political hide. People are really afraid to speak up about the whole situation with her. But, I'm by no means the only one who saw Bill Clinton at Quapaw Towers." [Continued next chapter.]