SysOp's Arsenal/SysOp's Arsenal 1 (Arsenal Computer).ISO/govwatch/si092194.txt

Text File | 1994-10-02 | 16.3 KB | 338 lines

Strategic Investment 9/21/94
Agora Inc, Publishers
824 E. Baltimore St.
Baltimore, MD 21202-4799



"Few stories could be juicier than the Whitewater saga. It has
everything- -dead bodies and death threats, allegations of drug
smuggling, crooked speculation, looting of a federally guaranteed
depository institution, sweet-heart land deals, abuse of municipal
bond issuance and, of course, sex." --Christopher Wood,

The Wall Street Journal, September 2, 1994

Chris Wood was New York bureau chief of The Economist when he wrote
the passage quoted above from "No Juicy Clinton Stories Please, We're
American." His topic was "the genteel distance" that the American
press has kept from "much of this Arkansas material." Chris is a
first-rate reporter and financial analyst, with whom I have spent
many hours in lively conversation. He is now off to London to begin a
new career evaluating emerging markets for a leading investment bank.

The half-told story

He leaves behind one of the great half-told stories of the century.
Nonetheless, he believes, as I do, that too much is already known
about the strange goings on in Arkansas for their unhappy
implications to remain covered up for long. The President of the
United States and his wife came too close to some unsavory activities
over the past 15 years-- activities that would be in no way
unthinkable in Italy but which somehow seem unthinkable in the United
States.

"It can't happen here"

Indeed, it is this very fact that has delayed the full public
disclosure I believe is coming. Most of the American media have
assumed that the more serious charges raised against the Clintons
could not possibly be true. Therefore, they have been slow to
investigate stories that have been picked up by British publications
like The Economist, The Telegraph, and The Times of London.

Witnesses are talking

The responsible British press has been so far ahead of the
establishment media in America in reporting the darkside of Clinton's
Arkansas, that their head start on the story has begun to feed on
itself. We've been told that a number of witnesses from Arkansas have
sought out British reporters and revealed startling details of
criminal activity involving some of the best-known people in
Arkansas. It is only a matter of weeks or months until some large
American news organization undertakes a concerted effort to tie
together the bits and pieces that have already been exposed, and are
soon be amplified in London.

I am not hallucinating when I say this. Although major American news
outlets have yet to figure out how to handle accusations of illegal
behavior by the President, they are aware of them--starting with the
apparently well-documented charges reported in London that Bill
Clinton was a heavy user of cocaine.

It is an illusion to suppose that editorial restraint by the leading
news organizations will keep these stories from becoming common
knowledge.  They are on the Internet now. You can hear details almost
any time you tune into talk radio. Millions of Americans already
understand that the Clintons ran Arkansas in the 1980s the same way
that Marion Barry ran the city government of Washington, D.C.

Lord Rees-Mogg, a fascinated observer from afar, has been keeping his
own list of the charges raised against the Clintons. He counts only
those he feels are supported by sufficient evidence to merit serious
investigation. His tally had swollen to 16 separate categories of
offense, including many charges never leveled at any previous
president.


"Relentless Clinton Bashers will stop at nothing."
-headline of special report
Washington Times, September 1, 1994


The fact that some of the stories now swirling around the Clintons
are unprecedented gives rise to what is known in pyscho-babble as
"cognitive dissonance." Another way of saying the same thing is that
it is hard for some people to think clearly. Any evidence that
conflicts with their core assumptions causes a short circuit in their
reasoning and then full-blown denial. Hence the tendency to label all
who treat the allegations of misdeeds in Arkansas seriously as
"relentless Clinton bashers," rather than merely observers responding
to the evidence.

As Christopher Wood wrote upon his departure from the U.S., many in
the press are "quick to attack the motives of those trying to delve
more deeply into the story. Accusations fly of using 'biased sources'
or of being in bed with the 'Christian Right.' This is bizarre....
The issue that should count is whether the information is accurate."

"Through a glass, darkly"

Sadly, I have come to believe that some of what is alleged by "the
relentless Clinton bashers" is true. I did not set out to believe
this. To the contrary, as longtime subscribers know, I was
unreasonably optimistic about Bill Clinton before he actually took
office. In the settings in which I had known him, he was unfailingly
gregarious and attentive to ideas. I was impressed with his intellect
and his formidable political talents. I dared to hope that he would
double-cross the grasping constituency groups that have come to
comprise so much of the Democratic Party today.

Hoping for something better

This hope proved to be misplaced. But it was not as stupid as it now
seems. It is easier for a political party of the underprivileged" to
cut entitlements than a party known to "favor the rich." Sir Roger
Douglas, who engineered the early stages of the dynamic reform in New
Zealand, was a Finance Minister in the Labour Party. Carlos Menem,
certainly the best president of Argentina since before World War I,
began his political career, like Clinton, as a big spending governor
of a backward province.

To repeat and update my account of Menem's successes, he was elected
President of Argentina on a platform of doing more of all the wrong
things. He lied. As soon as he took office, Menem double-crossed his
supporters and began to do the right things.

Privatizing social security...

He became a success beyond anyone's imaginings. I could only dream of
a President of the United States willing to try let alone succeed in
what Menem has accomplished. It would be quite enough if he had
merely stopped printing money and balanced the budget. No American
president has done that for a quarter of a century. But fiscal
restraint amounts to little compared to some of Menem's other
accomplishments, such as privatizing social security. Ronald Reagan
was unwilling to touch even a hair on social security's white head.
Menem lopped it off.

And the post office

Reagan was considered a pillar of strength for firing a few air
traffic controllers. But he didn't privatize the air traffic system
or sell National Airport. All of Argentina's airports will be
privatized by the end of next year. Menem even changed the Argentine
constitution to privatize the post office and the federal mint. Both
are to be sold within 15 months.

We give you honest judgment

My early hope that Clinton would be a politician of the future like
Menem was overtaken by the evidence. It should be clear, however,
that the fact that Clinton is just another disappointing politician
with a dated platform is not the reason that we are warning you of
scandals about to engulf his administration. We are warning you
because that is our job. You and other subscribers paid us to give
you our best judgment about coming developments that could affect
your business and investments. The coming collapse of the Clinton
presidency is certainly high on that list. That would be true even if
Clinton had turned out to be another Menem, the greatest American
president of the century.

We try to tell you the truth as we understand it. Not that we are
always right. But are forthright. We have worked hard to develop some
of the best intelligence sources in the investment business. Lord
Rees-Mogg and I regularly review what they tell us, and update our
views accordingly.

Sometimes this points us to conclusions we are sorry to reach. This
is the case now. But we are not afraid to think the unthinkable if
that is where the evidence and plain logic point us.


Many thought we were crazy in the mid-80s when we began to warn our
subscribers of the coming fall of Communism and the collapse of the
Soviet Union. Just a few short years ago, that message was
unthinkable.  But it happened. Now we are warning you of another
shocking development. This time it will happen not in Moscow but in
Washington.  The twisted trail of scandal from Arkansas leads to the
White House door.

When the prosecutors finally come knocking, it will reverberate on
Wall Street. Indeed, we have already seen a benign effect in the
stock market of the growing perception that Clinton's troubles will
drag large numbers of Democrats to defeat in November.

The stock market rallied robustly in August, led by the medical
stocks as money managers concluded that Clinton's health plan will
not pass this Congress, and therefore certainly will not pass the
next one. The November elections could bring the first Republican
majority in the House of Representatives in more than 40 years.

What if?

This raises possibilities that you should begin to think about now.
If Republicans sweep the November elections, or Clinton's legal
troubles deepen to the extent that he is ousted from office, would
the stock market rally? Should you buy on that news? Or in
anticipation of it?

Several shrewd investors to whom I have spoken do see the prospect of
Clinton's ouster as bullish. They may be right, temporarily,
especially if the market sells off sharply as the story unfolds. But
I would rather be a seller than a buyer of any rally precipitated by
a deepening of the President's legal troubles.

I doubt that America will be in a party mood when the Clinton Capers
displace the O.J. Simpson trial as the staple of discussion on Larry
King Live. Many people will see it as a betrayal of trust as they
gradually and grudgingly recognize that the President of the United
States, like major league baseball has let them down.

What the silence says

There is more than a trivial prospect, in fact, that disillusionment
with the Clintons will precipitate a crisis of confidence in the
welfare state. This could lead to an institutional trauma for the
Democratic Party. Much as long-ruling, scandal-ridden Christian
Democrats in Italy and Liberal Democrats in Japan were swept from
office, so the Democratic Party in the United States could be
repudiated.

The fact that the major media have not delved more deeply into ADFA
and the Clintons' connections to the "Redneck Mafia" implies that the
arbiters of opinion are uneasy. They may sense the historic change of
mood that is already evident in increasing disillusionment among
middle class voters with rampant crime, and in the defeat of the
Clinton health plan. They may feel that disillusioning revelations
about the President would undermine support for the system. They may
be right, but that is not a reason to turn the other way.

There is a notion in Western civilization that dates back to the
Greeks, that the true man must pursue justice, wherever it leads,
even into his own house. We don't pretend to live up to that high
standard. In fact, we are not pursuing justice at all, we merely
observe that those who should, aren't.

If you still have your copy of last month's issue, save it. "The Dog
That Didn't Bark," has not gone unnoticed. Strategic Investment and I
have been sued for $2 million for questioning the official story of
Vincent Foster's death.

A park policeman claims that we somehow libeled him in the course of
telling you about Christopher Ruddy's analysis of the shortcomings of
the Fiske Report. The same man has also sued the Western Journalism
Center, which placed a full page ad in the Sunday New York Times on
August 28 questioning the suicide verdict on the Foster death.

Intimidation

I may be wrong, but my impression is that the lawsuit is a gesture of
intimidation, orchestrated in the hope that it will discourage
further or investigation of the Foster death. In a "sound-byte"
world, the mere fact that someone has filed such a lawsuit may convey
an impression of credibility to the official story, whatever the
facts of the matter.

The timing of this suit could be important because it is widely
believed in Washington that the new independent counsel, Kenneth W.
Starr, is cur- rently reviewing whether or not to re-open the Foster
investigation. Not incidentally, there has been a barrage of attacks
on Starr, as well as a lawsuit filed by a Democratic Party activist
challenging Starr's ap- pointment. A concerted effort is being made
to intimidate Starr.

Stranger and stranger

Obviously, I have a prejudice in commenting on any lawsuit against
Strategic Investment or against me personally. So take that into
account.  Nonetheless, it strikes me that there is a bit that is odd
in this particular case.

1) Strategic Investment is a private newsletter. It is not obvious
how the park policeman now claiming to have been libeled came to have
a copy of the August 17 issue. He would not have received it as a
subscriber. And it is even less likely that a discarded copy just
happened to blow into his yard, where he picked it up and took
offense. More likely than not, he was contacted by someone who is
monitoring what we publish, whose purposes extend beyond the officer
who filed suit.

2) The typical park policeman does not have a battery of attorneys in
several states who are ready to almost instantly file multimillion
dollar lawsuits The suit was filed on September 1, only two weeks
after the issue appeared.

3) News reports quote the plaintiff's attorneys, who took the unusual
step of issuing a press release, as stating that we "intended to
injure and destroy plaintiff's good name and reputation." If so, we
did a lousy job.  We never even mentioned his name.

4) Another factor that contributes to my suspicion that the suit is
part of a public relations ploy is the fact that we first learned
about it not from the plaintiff or his lawyer, but the Associated
Press.

5) In his full report, Ruddy raises questions about the placement of
Foster's body in Fort Marcy Park. These questions are based upon good
faith efforts to reconstruct the death scene. None of these questions
would have even arisen had it not been for contradictory statements
by key witnesses, and the fact that all the photographs that could
establish the whereabouts of Foster's body within Fort Marcy Park
were mysteriously destroyed during processing. If, as Ruddy implies,
a high-ranking government official has been murdered, this is
obviously a matter of paramount public importance. Under the
circumstances, it would seem unlikely that the plaintiff could
demonstrate malicious intent in discussion of such a public issue.

6) Furthermore, there is a well-established principle of libel law,
backed by Supreme Court decisions, which holds that you cannot libel
a public official without mentioning him. Combine that with the fact
that each issue we publish is reviewed by lawyers before we go to
print. Perhaps not surprisingly, therefore, our lawyers tell us that
the current suit appears to be frivolous. It was probably never
intended to go to trial. The intent may have been merely to raise a
public relations point, then withdraw the suit.

I believe everything I wrote in "The Dog That Didn't Bark." It is
obvious that the investigation of Foster's death did not follow
standard operating procedures and was hampered at many points by
White House interference. Park Police officials practically admitted
as much during recent congressional testimony. U.S. Park Police Capt.
Charles Hume suggested that White House involvement in the
investigation was so pervasive that, "It became a joke."

It is only one of many jokes. The biggest is the utterly craven
coverage of the Foster death cover-up, and the broader story of the
Clintons' connections to the whole range of sinister enterprises,
including drug dealing and money laundering, that flourished during
their tenure in Arkansas. As Chris Wood said," The failure of the
American press to understand this... let alone point it out, is
simply extraordinary." Sincerely,

James Davidson

P.S. Be sure to read Chris Wood's dynamite new book, The End of
Japan, Inc. (Simon and Schuster).