Jay Rogers
Director:
Jay Rogers

Recent Posts

The Forerunner

Whitewater Explained - Part 1

By Editorial Staff
Published May 2, 2008

- or –

How to make $2 million developing a worthless tract of land without selling one square foot of it

By Nicholas A. Guarino

When the media folk told you about Whitewater, they left out a few amusing details. So in a spirit of altruistic service and public education, I’m going to let you in on the secrets. Pay attention, because you’ve never heard this before.

A. Real estate developing is more fun when you can borrow all your capital without having to pay it back … or even sell any land. So to get started, you need two friends: one an appraiser, one a banker.

B. Next, you find some dirt-cheap dirt. Anywhere in the boondocks will do. In the Whitewater case, it was 230 acres of land along the White River for about $90,000. (Some housing tract! It was fifty miles to the nearest grocery store.)

C. Then you get your appraiser friend to do a bloated appraisal. Hey, what are friends for? Let’s say he pegs it at $150,000.

D. You go to the bank and get the usual 80% loan (e.g., 80% of $150,000 with the land as collateral). You now have $120,000, so you pay off the land ($90,000), and you still have $30,000 in your pocket. You’re on a roll.

E. You pay $5,000 to subdivide it and bulldoze in a few roads. (Or if you know the ropes, you get the state to do it, as Bill did to get a $150,000, two-mile access road.)

F. Voila! You now are the proud owner of a partly-developed luxury estate community. So you call up your appraiser friend again, and he re-evaluates it at a cool $400,000.

G. You hustle back to the bank (run by your friend McDougal) and get a new 80% loan based on the new value. (Nothing out of line so far. An 80% loan is standard, right?)

H. You draw up plans for some fine houses (which will never be built.)

I. You get a new appraisal.

J. You get a new loan.

K. You make two or three phony homesite sales to friends. You shuffle the funds around among your shell corporations and bounce it back to your friends – plus a little extra for their help.

L. You get a new appraisal.

M. You get a new loan.

N. You do a “land flip,” selling the whole thing to Company X for $800,000, which sells it to Company Y for a million, which sells it back to you for $1.25 million. (All these companies are your friends.) And yes, this kind of thing did happen in Whitewater and Madison. In fact, Whitewater figures David Hale and Dean Paul once flipped Castle Grande back and forth from $200,000 to $825,000 in one day!

O. You get a new appraisal.

P. You get a new loan.

Q. Finally, your development corporation declares bankruptcy, and the bank has to eat your loans because the money is all gone, and since the record-keeping is so poor, nobody knows where it went.

But weep not for the bankers. You pay them nicely – perhaps a third of the $2 to $3 million you skim off. Weep for the taxpayer who bails out their banks. Which is to say, in the case of Whitewater, weep for yourself.

Does This Actually Work?

Whitewater was just the first of a series, like a pilot for a sitcom. Using Whitewater as a prop, Bill and his partner Jim McDougal milked – by my rough estimate – several million dollars from the SBA (Small Business Administration) and at least five or six banks and S&Ls, starting with the Bank of Kingston.

But their later ventures, bringing in Steve Smith and now-Gov. Jim Guy Tucker, did even better. Campobello started with about $150,000 in property and squeezed over $4 million in loans from banks in about two years. Castle Grande began with $75,000 worth of swamp land and cleared over $3 million. It never built anything. The only human artifacts on it today are a few old refrigerators and mattresses.

Why do I have information you haven’t seen before? Because my firm had $10 million in Madison Guaranty S&L, and I was thinking of buying the Bank of Kingston. (I was already worth millions by that time.) When I saw Kingston’s financial statement, however, I ran like a scalded cat.

And Madison was worse. You didn’t have to be a Philadelphia CPA to spot their money laundering, dead real estate liabilities proudly listed as assets, huge amounts of 24-hour deposits from brokers, and $17 million in insider loans. It was a nightmare.

Whitewater Development Corp. had at least an appearance of sincerity. It even had TV commercials, starring Jim McDougal’s striking young wife, Susan, in hot pants, riding a horse. Another one showed her behind the wheel of Bill’s restored ’67 Mustang.

But after Whitewater, the deals began dropping their frills. The RTC criminal referral that Bill suppressed during his presidential campaign cites such later corporations as Tucker-Smith-McDougal, Smith-Tucker-McDougal, and Smith-McDougal. Catchy, eh? If it were me, I would have called them Son of Whitewater, Whitewatergate, and Whitewater & Ponzi, L.P.

Short Report

On their 1979 income tax, Hillary valued Bill’s used undershorts – donated to charity at the end of their action-studded tour of duty – at two dollars a pair. Plainly, we are dealing here with a couple that gives loving attention to detail in matters of deductions.

As you may recall, however, Clinton has proclaimed over and over that he simply “forgot” to deduct the $68,900 he claims he lost on Whitewater. Commentators have been mystified by the paradox. But it’s no mystery to me. The reason is obvious: Bill didn’t deduct the $68,900 because he didn’t lose a dime on Whitewater, and he didn’t want to do time for tax fraud. Period.

Jim McDougal put up all the money except for $500 – and Bill borrowed even that. But weep not for Jim. Not only was he Bill’s partner in Whitewater, but he owned Madison Guaranty S&L, which was the designated milk cow that provided most of the inflated loans. Weep instead for the taxpayers – like you and me -who picked up the $66 million tab when Madison folded.


Forerunner - Home » Pass The Word » Pass The Word - March/April 1996

Your comments are welcome!

Textile Help

Dr. Francis Schaeffer - A Christian Manifesto (DVD)

That Swiss Hermit Strikes Again!

Dr. Schaeffer, who was one of the most influential Christian thinkers in the twentieth century, shows that secular humanism has displaced the Judeo-Christian consensus that once defined our nation’s moral boundaries. Law, education, and medicine have all been reshaped for the worse as a consequence. America’s dominant worldview changed, Schaeffer charges, when Christians weren’t looking.

Schaeffer lists two reasons for evangelical indifference: a false concept of spirituality and fear. He calls on believers to stand against the tyranny and moral chaos that come when humanism reigns-and warns that believers may, at some point, be forced to make the hard choice between obeying God or Caesar. A Christian Manifesto is a thought-provoking and bracing Christian analysis of American culture and the obligation Christians have to engage the culture with the claims of Christ.

$19.95 — ORDER NOW!

(We accept all major credit cards and PayPal.)

Click here for more information


In the Days of These Kings (Book)

Perfect-bound Paperback — 740 pages

The Book of Daniel in Preterist Perspective

“And in the days of these kings shall the God of heaven set up a kingdom, which shall never be destroyed: and the kingdom shall not be left to other people, but it shall break in pieces and consume all these kingdoms, and it shall stand for ever” (Daniel 2:44).

The overarching message of Daniel is that Jesus the Messiah is even now ruling over the nations. He is the King of kings. Daniel tells us that Messiah’s kingdom will advance in the whole world from “generation to generation” (Daniel 4:4,34). Christ’s dominion is “given to the people of the saints of the most High” (Daniel 7:22). Our purpose then is to see “all people, nations, and languages … serve and obey him” (Daniel 7:14,27).

This comprehensive work offers a fascinating look at the book of Daniel in preterist perspective. Great attention is paid to the writings of ancient and modern historians and scholars to connect the dots and demonstrate the continuity of Daniel’s prophecy with all of Scripture.

$19.95 — ORDER NOW!

(We accept all major credit cards and PayPal.)

Click here for more information


The Silent Scream (DVD) Eight Languages

“When the lives of the unborn are snuffed out, they often feel pain, pain that is long and agonizing.” – President Ronald Reagan to National Religious Broadcasters Convention, January 1981

Ronald Reagan became convinced of this as a result of watching The Silent Scream – a movie he considered so powerful and convicting that he screened it at the White House.

The modern technology of real-time ultrasound now reveals the actual responses of a 12-week old fetus to being aborted. As the unborn child attempts to escape the abortionist’s suction curette, her motions can be seen to become desperately agitated and her heart rate doubles. Her mouth opens – as if to scream – but no sound can come out. Her scream doesn’t have to remain silent, however … not if you will become her voice. This newly re-mastered version features eight language tracks and two bonus videos.

“… a high technology “Uncle Tom’s Cabin” arousing public opinion just as Harriet Beecher Stowe’s 1852 antislavery novel ignited the abolitionist movement.” – Sen. Gordon Humphrey, Time Magazine

Languages: English, Spanish, French, South Korean, Chinese, Russian, Portuguese, Japanese

Running Time: 28 minutes

$17.95 — ORDER NOW!

(We accept all major credit cards and PayPal.)

Click here for more information


The Four Keys to the Millennium (Book)

Foundations in Biblical Eschatology

By Jay Rogers, Larry Waugh, Rodney Stortz, Joseph Meiring. High quality paperback, 167 pages.

All Christians believe that their great God and Savior, Jesus Christ, will one day return. Although we cannot know the exact time of His return, what exactly did Jesus mean when he spoke of the signs of His coming (Mat. 24)? How are we to interpret the prophecies in Isaiah regarding the time when “the earth will be full of the knowledge of the LORD as the waters cover the sea” (Isa. 11:19)? Should we expect a time of great tribulation and apostasy or revival and reformation before the Lord returns? Is the devil bound now, and are the saints reigning with Christ? Did you know that there are four hermeneutical approaches to the book of Daniel and Revelation?

These and many more questions are dealt with by four authors as they present the four views on the millennium. Each view is then critiqued by the other three authors.

$12.95 — ORDER NOW!

(We accept all major credit cards and PayPal.)

Click here for more information


Why Creeds and Confessions? (Book)

High Quality Paperback — 219 pages

Foundations in Biblical Orthodoxy

Driving down a country road sometime, you might see a church with a sign proudly proclaiming: “No book but the Bible — No creed but Christ.” The problem with this statement is that the word creed (from the Latin: credo) simply means “belief.” All Christians have beliefs, regardless of whether they are written.

Yet a single book containing the actual texts of the most important creeds of the early Church will not often be found. Out of the multitude of works on the evangelical Christian book market today, those dealing with the creeds of the Church are scarce.

Why Creeds and Confessions? provides a foundation of biblical orthodoxy as a defense against the false and truly heretical doctrines advanced by the spirit of this age.

$14.95 — ORDER NOW!

(We accept all major credit cards and PayPal.)

Click here for more information

Share |

View CCNow Cart/Checkout
View CCNow Cart/Checkout

RSS
Subscribe to
The Forerunner

Have The Forerunner blog sent straight to your inbox!

Enter your email address:

YouTube
The Forerunner Channel on YouTube


Promote Your Page Too

Featured Product
If you like the articles on this website, you may also be interested in:

Featured Articles

Live Seminar!

Real Jesus
The Abortion Matrix DVD: Update

The Abortion Matrix:
Defeating Child Sacrifice and the Culture of Death

is a 195-minute presentation that traces the biblical roots of child sacrifice and then delves into the social, political and cultural fall-out that this sin against God has produced. You can order this series on DVD, read the complete script and view clips on-line...
continued ...


View My Stats