By Jake Rossen
By Jesse Marx
By Michelle LeBow
By Alleen Brown
By Maggie LaMaack
By CP Staff
By Jesse Marx
From 1982 forward, Clinton argued that compliance to environmental standards could best be achieved on a voluntary basis, rather than by the imposition of exigent (and politically perilous) rules and regulations. To this end Governor Clinton stacked his pollution control board with members friendly to industry. In 1985 he promoted and then signed into law a huge tax break for industrial corporations of his state, including the big timber companies. This easing of the corporate fiscal burden was offset by a regressive sales tax on the citizenry.
Clinton's big offering to the timber companies was the Manufacturers' Investment Sales and Use Tax Credit, known by critics as the "IP bailout law" in honor of International Paper. Under this program state tax breaks were approved for more than $400 million in projects by International Paper and three other paper mills that then-state Senator Ben Allen of Little Rock called "the worst corporate citizens in Arkansas"--all this in a state with one of the lowest per capita incomes in the nation and where 29 percent of the children and half the state's black residents lived in poverty.
A few years later state officials tried to keep International Paper and two Georgia-Pacific mills off a toxic waterways list, despite evidence they were contaminating rivers with dioxin. Meanwhile, International Paper, while taking repeated advantage of the manufacturers' sales tax credit, was ladling out money to candidate Clinton.
It was around this time that Clinton supervised another land deal highly favorable to the timber giants. In later years, taunted with the fact that his state ranked 48th in environmental quality, Clinton would make much of the fact that as governor he had acquired thousands of acres for state-owned forests. Two types of deals were involved here. In one, Clinton swapped state-owned lands mantled with valuable trees for corporate parcels which had been recently cut over. In the other type, the state simply acquired at inflated prices land which the timber companies had recently logged.
Nourished by these benefices, the timber companies, along with Tyson, began to urge Governor Clinton--now nearing the end of his third term--to consider challenging Dale Bumpers for the Senate seat he had held since the early 1970s. The companies had no love for Bumpers. He had led the charge to reform forest policies on federal lands, culminating in the passage of the National Forest Management Act. Bumpers was also, as already noted, a spirited critic of the clearcutting and pesticide practices of the big timber companies in Arkansas. But Clinton was then contemplating a run for the White House. And so the timber companies, along with other corporate interests, funded the Democratic Leadership Council--Clinton's launching pad.
The kindly deeds President Clinton has performed for the timber giants are well known. But for International Paper in particular, Clinton wrought two spectacular favors. First, he refused to take any action to stem the flow of raw log exports from the Pacific Northwest, where International Paper holds about half a million acres. Second, the generous Habitat Conservation Plans tirelessly promoted by Interior Secretary and fellow DLC member Bruce Babbitt allowed International Paper and Georgia-Pacific to continue to cut trees on land occupied by endangered species such as the red-cockaded woodpecker.
But the funds that helped to establish the DLC may not have been IP's only big favor to Clinton. In the mid-1980s, when the Whitewater Development Corporation was foundering on the verge of bankruptcy, it was International Paper that sold 500 acres to McDougal and Clinton at the generous price of $1,000 an acre. WDC put little money down and later defaulted on the loan. Finally, when the McDougal/Clinton partnership defaulted on their land purchase from International Paper in 1987, the timber company kept the Clintons off the ensuing lawsuit.
Incidentally, the 500-acre parcel, known as Lowrance Heights, was located near the Castle Grande development to which Hillary devoted the notorious "missing" 60 hours of billed time on behalf of Madison Guaranty. And therein lies yet another possible accommodation between the Clintons and the paper companies: According to Arkansas press accounts, when the Castle Grande deal began to fall apart and threaten Madison's financial health, McDougal and Clinton pressured timber executive Dean Paul into taking out an $825,000 loan to rescue Castle Grande. Nearly $100,000 of that "loan" ended up in Whitewater accounts, and some of it may also have found its way into Clinton's campaign chest.
Yet another Clinton/timber thread: Although Hillary's incredible success in commodities trading has been widely advertised as an exercise in cattle futures, in fact part of her conversion of $1,000 into $98,000 came in trades on timber futures.
The Clintons never so much as visited Whitewater Estates or the International Paper land. But the only person who appears to have made any money in any of the Whitewater real estate deals (aside from the sellers) was Hillary. She "bought"--there's no evidence she put any of her own money down--a model home on a lot that promptly sold, netting her $30,000.
The linkages between the Clintons and the paper companies actually do not end there. When the Whitewater scandal finally exploded, Attorney General Janet Reno hired as special prosecutor Robert Fiske of Davis, Polk and Wardwell--the New York law firm that also represented International Paper.