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The check McDougal enclosed with his letter to Mr. Campbell
is a Whitewater Development Corporation check dated November
7, 1985. The loan number referenced on the memo portion of
the check is "Note #975-585."
According to the check ledgers for the Whitewater
Development Corporation (WDC), the corporation's checking
account had the following balances: $189.50 on 10-10-85;
and, $12.49 on 10-31-85. However, in order to cover the
payment of $7,322.42 on the Clinton loan, a deposit is
recorded on November 8, 1985 in the amount of $7,500.00.
The deposit is listed as coming from "Madison Marketing."
A 1986 Federal Home Loan Bank Board exam gives the
impression that Madison Marketing was largely a sham
corporation used to divert federally insured resources to
insiders. The exam notes that "Until 1986, Susan McDougal
owned Madison Marketing." The report also states the
following:
"Madison Marketing is paid for doing all the general
advertising for Madison Guaranty and most of the
advertising for Madison Financial's land development
projects. All of Madison Marketing's business is
derived from Madison Guaranty or its subsidiaries.
Since 1983 these payments total $1,532,000."
"Given the evidence of Madison Marketing's invoices, it
is questionable how much of these advertising services
are actually performed by the firm. The actual work
...
appears to be performed by others. It would appear
that Madison Guaranty could have an employee perform
similar work for much less money."
"Mr. Latham [an officer of Madison] stated that Madison
Marketing made no payments to any stockholders. This
statement is false. As part of a test for such
payments, the examiners discovered two remittances from
Madison Marketing to Susan McDougal [a large
stockholder of Madison] which total $50,000. This was
a test, and there may be additional payments."
CONCLUSION
Given the above circumstances, it would appear that federally
insured deposits (i.e., funds from Madison Guaranty through
Madison Marketing), which, with the later failure of Madison
became, in effect, taxpayer obligations, were transferred for the
direct personal benefit of the former Governor.
The above payment also raises the question of whether Whitewater
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"ocrText": "( 2 )\nThe check McDougal enclosed with his letter to Mr. Campbell\nis a Whitewater Development Corporation check dated November\n7, 1985. The loan number referenced on the memo portion of\nthe check is \"Note #975-585.\"\nAccording to the check ledgers for the Whitewater\nDevelopment Corporation (WDC), the corporation's checking\naccount had the following balances: $189.50 on 10-10-85;\nand, $12.49 on 10-31-85. However, in order to cover the\npayment of $7,322.42 on the Clinton loan, a deposit is\nrecorded on November 8, 1985 in the amount of $7,500.00.\nThe deposit is listed as coming from \"Madison Marketing.\"\nA 1986 Federal Home Loan Bank Board exam gives the\nimpression that Madison Marketing was largely a sham\ncorporation used to divert federally insured resources to\ninsiders. The exam notes that \"Until 1986, Susan McDougal\nowned Madison Marketing.\" The report also states the\nfollowing:\n\"Madison Marketing is paid for doing all the general\nadvertising for Madison Guaranty and most of the\nadvertising for Madison Financial's land development\nprojects. All of Madison Marketing's business is\nderived from Madison Guaranty or its subsidiaries.\nSince 1983 these payments total $1,532,000.\"\n\"Given the evidence of Madison Marketing's invoices, it\nis questionable how much of these advertising services\nare actually performed by the firm. The actual work\n...\nappears to be performed by others. It would appear\nthat Madison Guaranty could have an employee perform\nsimilar work for much less money.\"\n\"Mr. Latham [an officer of Madison] stated that Madison\nMarketing made no payments to any stockholders. This\nstatement is false. As part of a test for such\npayments, the examiners discovered two remittances from\nMadison Marketing to Susan McDougal [a large\nstockholder of Madison] which total $50,000. This was\na test, and there may be additional payments.\"\nCONCLUSION\nGiven the above circumstances, it would appear that federally\ninsured deposits (i.e., funds from Madison Guaranty through\nMadison Marketing), which, with the later failure of Madison\nbecame, in effect, taxpayer obligations, were transferred for the\ndirect personal benefit of the former Governor.\nThe above payment also raises the question of whether Whitewater"
}