In Little Rock his political influence seemed stronger than ever. By the mid-1980s Lasater and Company had its own ties to Madison Guaranty, what one account called "significant dealings." A decade later the Whitewater special prosecutor would reportedly be moved by the record of these dealings to investigate whether Lasater used the thrift to funnel money to the Clinton campaigns in 1984 and 1986.Whatever happened with the swirling accounts at Madison, Lasater continued to be a fund-raiser for the governor as well as a major public contributor. Like the employees of Madison Guaranty, brokers at Lasater and Company were urged to contribute to Clinton, with the boss offering higher commission to compensate for the donations -- thus "bundling" the Lasater donations to exceed the individual or family limits. But the relationship between Lasater and Clinton now also went beyond the discreet but constant contacts at the brokerage and the mansion, the social occasions, or the funneling of state business. The two men came to share patronage of an intimate adviser -- a link that would last all the way to the White House.
Lasater had given jobs to the children of a Clinton campaign official, and in 1984 he hired as his chief assistant a longtime Clinton associate, Patsy Thomasson, who had begun as an aide to Congressman Wilbur Mills in the 1970s and later became a close friend of state legislator and Lasater partner George "Butch" Locke. She had been named to the Arkansas Highway Commission by Governor Pryor and kept on by Clinton, and she reportedly continued to serve on that notoriously powerful body even as she worked for Dan Lasater. A self-described "yellow dog Democrat," Thomasson was a discreet, almost cryptic figure and was never to be charged in any of the crimes surrounding her employer. Thomasson was a frequent companion on Lasater's business and social flights, including a 1984 flight to Belize that came under investigation by the FBI, which was probing Lasater's attempted purchase of a suspected marijuana farm in that country. She ultimately became president or board member of various Lasater properties and subsidiaries, including Angel Fire, and in 1987 Lasater would give her an extraordinary seven-page durable power of attorney, granting her sweeping authority over his financial affairs after his conviction for drug distribution.
Again, even as she held positions with a convicted Lasater, Thomasson would go on to succeed Betsey Wright as executive director of the Arkansas Democratic Party. In 1993 Clinton quickly named her special assistant to the president and director of the Office of Administration in the White House, where she was one of the more obscure yet most powerful members of the Arkansas circle. It would be Patsy Thomasson who was among the first to enter the office of White House deputy counsel Vince Foster following his controversial death in July 1993 -- "in the middle of a 'cats and dogs' scramble," reported the Wall Street Journal, "to find the combination of Vince Foster's safe the night of his death." At the time her presence in the Foster affair seemed odd to many, but "only if you didn't know where she came from, and how," said an Arkansas politician.
In the meanwhile, the luck of her former employer, Dan Lasater, was to run out, in a sense, with his criminal indictment on federal drug charges in 1986. Up until then, though, the company's intriguing transactions seem to have been going full swing. In the summer of 1985 a county official named Dennis Patrick from a small town in Kentucky was contacted by a Lasater broker, an old school friend, who proposed to open an account for Patrick that would require no money from him yet would yield $20,000 a week at no risk. Seeming to make money at first, as Patrick told his story later, he duly followed instructions and arranged to deposit his profits automatically at a Little Rock bank. Meanwhile he enjoyed cordial, even warm relations with the brokerage. The trading volume in his account appeared to reach as high as $23.5 million in one transaction, though he never received the profits personally. After several weeks he grew suspicious when he was asked to sign several documents, and he asked his friend to stop trading. There followed a hiatus of months, and then Lasater and Company brought a lawsuit against him, claiming that he and the salesman, who had since been fired, had conspired to defraud the brokerage of some $86,000. But the suit was soon dropped -- according to the company because Patrick had no money to justify the litigation, according to Patrick because he threatened a public airing.
In the welter of accusations, including ones about Patrick's own troubled business dealings in Kentucky, the episode remained murky, though some elements were telling. Before his falling-out with the brokerage, Patrick told a writer, he had been flown at Lasater's expense from London, Kentucky, to Angel Fire and had even gone dove hunting on the same Arkansas farm alleged to have been used for cash drops by Barry Seal. Examined by another bond broker, Patrick's trading records with Lasater and Company showed a total of some $50 million run through the account in less than six months, vast amounts of cash of unaccountable origin, the very definition of money laundering. Not least, the flush trades stopped early in 1986, just after Barry Seal was murdered.
Nobody was more astonished by the vaulting ascent of Patsy Thomasson than Dennis Patrick, a truck driver in Florida. He was listening to the Rush Limbaugh radio show just before Christmas 1993 when suddenly her name cropped up in the midday commentary. "Rush made some comments about Patsy Thomasson removing some documents from Vince Foster's office," he said. "Then he started talking about Dan Lasater, and I thought 'My God."' [41]
The names brought back a flood of confused memories. Dennis went rummaging through boxes of documents at home and unearthed a wad of trading receipts from a brokerage account in his name at Lasater & Company. He had looked at them years before but the documents were hard to interpret, and anyway his life had been in such a shambles that he had somehow missed their full significance. This time he looked closer.
The trading tickets showed that "his" account had been buying bonds worth tens of millions of dollars in late 1985 and early 1986. In a single trade on July 31, 1985, Patrick & Associates bought a block of Federal Home Loan Mortgage Corporation bonds for $6,763,373. On September 18 it bought a block for $9,492,216. It was constantly buying and selling Treasury Bills in blocks of$1 million or $2 million at a time, and GNMA pools for $5 million. [42]
Dennis took the slips to a friend from church, a stockbroker, who told him that these trades were not options trades -- where a small sum of money can control large amounts of stock. These were actual buys and sells, face-value transactions by a man who could write a check for $ 10 million. Lasater & Company had been running huge sums of money through a "straw" account in his name.
Dennis was living in hiding with his wife and two young children in Coral Gables, Florida, when I first went to see him in early 1994. A gentle man with a tense, quivering voice and tired eyes, he seemed older than 42, but then he had a good excuse for premature aging. If a Hollywood screenwriter concocted his story, it would fail the test of plausibility.
He had once been a rising star in the Appalachian coal town of Williamsburg, Kentucky. He came from a respected local family. His father had been Sheriff of Whitley County. His mother had been Circuit Court Clerk, and he stepped in to succeed her after her death. The youngest Circuit Court Clerk in the country, aged 24, he did a good job. "He had integrity," said Marlyn Arnold, chief deputy clerk. "He saw that everything was run right. It seemed like everybody loved him."
"I was asked to run for state office by the Kentucky State Republican Committee," recalled Dennis, shaking his head with melancholy regret. "My goal was to be governor. I thought that one day I might really lead the state of Kentucky."
But if Dennis had a failing, it was a willingness to go along to get along. In the summer of 1985 he was contacted by an old college friend, Steve Love, who was making a fortune trading bonds at Lasater & Company in Little Rock. Love drove up in his Lamborghini, flush and exuberant, and began to lure Dennis into Lasater's flashy, vulgar world. In July 1985 he invited Dennis to stay at one of Lasater's luxurious beachfront condominiums in Destin, on the Gulf of Mexico. Out fishing, Dennis caught a Wahu, which Lasater & Company mounted at exorbitant expense and shipped back to Kentucky.
"When I look back now I realize that I was just a clay pigeon. I was being set up from the beginning," said Dennis. "We were out on a fishing boat and Steve turned and said 'I've got the inside on this. I can make you a great deal of money, Dennis, and it won't cost you anything.''' It wasn't something that Dennis wanted to get mixed up in. His income as Circuit Court Clerk was less than $25,000. His total assets were only $60,000, including the value of his house. He was in no position to play with the big boys on the bond market. "I should have just said no, but they were being so generous I felt obligated. I told Steve to send me something so I could read up and see what I was getting into. He changed the subject."
A few days later Steve Love called up and said: "I've just earned you $20,000, but I need you to come down to Little Rock and open an account." Dennis was ecstatic. He jumped into his pickup truck and raced to Arkansas. "My God, I would have ridden rollerblades to Little Rock for $20,000 dollars." At the Capitol Hotel he was treated like royalty and given the best suite. He was escorted to the First American Bank and $21,932 was deposited in his newly opened account. [43] The money went through Dennis's fingers like water. "I spent the lot," he said, sheepishly. "My fear was that they were going to ask for it back."
Years later Dennis was interrogated about this by FBI agents working for the Whitewater investigation. Why did he take the money? "Hell," he replied. "Hillary Clinton took a hundred thousand dollars without asking any questions, didn't she? And she's supposed to be one of the best lawyers in America." This caused considerable mirth at the Office of the Independent Counsel. Indeed, the FBI agents interviewing him had to leave the room until they could control their laughter.
After a grueling cross-examination, FBI Agent Mike Smith told Dennis that he was "a vital witness in the overall investigation of Whitewater." But Dennis was never contacted again. Dennis's trip to Little Rock was a whirl of high-life extravagance, ending at a nightclub where Roger Clinton was playing in the band. "Good to have you aboard," said Lasater, patting Dennis on the back and promising him that the firm would make him a rich man. Lasater's senior vice president, Billy McCord, told Dennis that $20,000 was nothing. Dennis was going to make that much every week.
"I was already thinking of buying farms up in Kentucky," confessed Dennis. He was hooked. When the firm offered to send a Lear jet to London, Kentucky, to fly him to Angel Fire for an elk hunt, he accepted eagerly. He asked whether he could invite his girlfriend Karen (later his wife), who was in the little town of Paducah. The aircraft was put completely at his disposal. So he called Karen from the air phone, and the Lear jet collected her off the tarmac.
During the flight Steve Love repeatedly tried to get Dennis to sign a set of papers that would formalize his relationship as a client of Lasater & Company, and Dennis kept trying to put it off. "I began to get a queasy feeling in my stomach, even then. I don't know why," said Dennis.
Then the music stopped, as abruptly as it had begun. After the trip to Angel Fire, Dennis never heard another word from Lasater & Company.
His life began to fall apart a few weeks later. In October 1985 the ATF contacted Dennis and told him that an armed criminal by the name of Patrick Henry Talley, who had recently been granted early parole from a federal penitentiary in Oklahoma, had been apprehended in Alabama. "They told me that Talley had been 'dispatched to murder' me." Apparently Tally had been arrested after a fight in a bar. Among Talley's possessions police discovered a picture of Dennis, a hand-drawn map of his house, a picture of his Blazer jeep and its license tags, as well as $30,000 in cash and an Uzi submachine gun with a silencer. Talley was driving a motorbike with no serial numbers on it -- a classic "drop bike." Though Talley confessed to the ATF that his intent was to murder Dennis Patrick, the U.S. Attorney's Office in Alabama declined to investigate the apparent contract hit and allowed Talley to plead guilty to a minor firearms violation. [44]
When Dennis met with an ATF officer, he found himself accused of high level involvement in narcotics smuggling. "You'd better start talking because those bastards are going to kill you, and we're going to hang you out to dry," warned the officer. [45]
If that was shocking, what happened next was bizarre. Sex ads with his name and address were published in magazines. "White, Bi, male seeks satisfaction, Anytime, Anywhere, with Anyone. Nothing too kinky for me to enjoy," was one that appeared in Modern Publications. Rolls of film with pornographic pictures were dropped off at the photo shop. Dennis's name and address were on the cover envelopes. "I wouldn't pick up the pictures, but it didn't make any difference, it started spreading like wildfire," he said. The mystery of who placed the sex ads and pictures was eventually solved -- as we shall see -- but not before even more harmful rumors spread.
A woman he had chosen to work in his office as a deputy clerk came to him, highly distraught, to say that she could not take the job. The minister of the First Baptist Church, Dennis's own church, had told her to stay away from him, because he was "heavily into drugs."
"That just busted my chops," said Dennis. "For a while people stick with you, but when it keeps coming they pull away, and you're all alone .... It reached a point where people would walk out of the barber shop when I came in .... And I still didn't know why it was happening."
"It was all out war. I was getting sued left, right, and center, fictitious lawsuits, draining me of every penny I had." Then his house was firebombed. On October 15, 1985, a gas grenade canister was hurled through the window, setting the curtains and walls on fire. Dennis was not there. After the ATF warned him about the attempted contract hit on his life he had been sleeping in barns, or in his jeep, always watching his back.
Terrified, he now began to take exceptional precautions. He bought a bullet-proof vest, and turned his house into an electrified fortress with live wires activated at night. Inside he had seven guns carefully placed in different spots. One was a shotgun mounted in the kitchen with a triggering mechanism attached by string to the kitchen door. He even linked a copper wire from his Chevy Blazer to an electric cable under the ground so that anybody trying to plant a detonating device in his car would be blown up in the process.
"There are a lot of animal instincts in a human being that you don't know about until something like this happens," he said. Perhaps it was animal instinct that led him back to his house on Friday, December 13, 1985. He was standing by the kitchen window getting a drink of water when an old Bonneville with Tennessee tags drove up. "I knew at once that this was it .... A man got out with a package and started walking up toward the door. The next thing I know he'd hurled a bomb at the window, but it hit the corner and exploded outside. It was a military CS gas grenade that he'd covered with candle wax and shotgun pellets."
What happened next was something straight out of a Charles Bronson movie -- with this difference, it is attested to in sworn depositions before the U.S. District Court of the Eastern District of Tennessee.
The would-be assassin sprinted back to his car with Dennis, barefoot, running after him in the snow. His assailant raced off the wrong way up a blind alley, giving Dennis enough time to jump into his Blazer and go careening down 1-75 in hot pursuit. As they wove through the mountains at 100 mph, dodging in and out of heavy trucks, the assailant fired a .38 Smith & Wesson out his window. Dennis rammed the assailant's truck, but the impact sent Dennis's own Blazer spinning out of control, finally bouncing back on the tarmac.
When the assassin pulled off the freeway, Dennis fired a Belgian Browning 270 deer rifle with an eight power scope at the assassin's car. "I shot his tire out, and then just started to dismantle the car shot by shot .... I blew out the windscreen, the gas tank .... I was going to make sure that this one never got away."
The Jellicoe Police arrived, followed in quick succession by the Tennessee State Police and the ATF. The assassin was arrested. He was a Texan named Danny Starr Burson. In a deposition given a year later he admitted that he had been contracted for "$20,000 plus expenses" to kill Dennis Patrick and his wife with a KG-9 machine gun. [46] He described how he bought a "drop car" under a false name, how he found a spot in some foliage where he sat at night, wearing camouflage, his face painted, and watched Dennis's house with a set of night binoculars.
"Was it your instructions at the time to kill Mr. Patrick and his wife, or to only put him under surveillance?"
"No, it was to kill 'em."
"Why didn't you do it?"
"Couldn't find him."
He admitted that he had put Dennis on a pornographic mailing list. It was one of the tricks in a harassment manual he had picked up at a gunshow. He referred in opaque terms to the organization that contracted him as a multi-million dollar outfit with military ties. As a case of conspiracy to murder that crossed state lines, the federal authorities had jurisdiction, but the ATF left it to the local authorities. Burson pleaded guilty to "wanton endangerment" and "criminal mischief." He was sentenced to five years, but was immediately released on probation. Omitted from the deposition was a crucial piece of testimony. In an examination under oath shortly after the attack he had said:
"This guy called me named Steve and I met him in Little Rock, at a McDonald's near downtown and he told me he wanted to harass this guy Patrick."
"Steve who? Do you know?"
"No, sir." [47]
There was one last plot to murder Dennis Patrick. A group in Texas -- penetrated by an ATF informant wearing a body microphone -- planned to blow up his Chevy Blazer, and if that failed to kill him, to attack his house with an "M-72 anti-tank weapon" (sic). Thanks to the informant, the group was charged with conspiracy to commit murder, and sent to prison. But the ATF investigator in charge of the case, John Simms, could not fathom why anybody would go to such lengths to eliminate a Circuit Court Clerk of modest means in Williamsburg, Kentucky. "Somebody, somewhere, was really determined to kill this guy," he said. "But I never was able to get to the bottom of it." [48]
"I think John Simms felt sorry for me," said Dennis. "He came to my house one day and sat down in the kitchen. My wife was there, six months pregnant, and he looked up and said 'Dennis, I don't know what I can do for you .... This thing is too big.'"
The local newspapers attributed the attacks to a dispute between Dennis and his business partners in a wildcat drilling venture in Kentucky. One of the conspirators from Texas, James Josey, was involved with civil litigation against Dennis over some marginal oil and gas leases.
"If you added up the whole company I was involved in it wasn't worth $25,000," said Dennis. James Josey later phoned Dennis from prison to confess that the conspiracy was much bigger than he imagined. "There are a whole lot of people who want you dead," he said, in a taped exchange. "There are a lot of things I can't disclose right now .... We're in very thin shoes." Josey intimated that he had been exploited by a powerful organization and used as a patsy. The murder attempts, he said, had nothing to do with the oil leases. [49]
Dennis had been warned long before by a disenchanted broker at Lasater & Company called Linda Nesheim that people with ties to the firm were trying to kill him. "Linda kept talking about Patsy Thomasson," recalled Dennis. "She told me that Patsy was the one in charge, that she was the one who could put an end to my whole nightmare." [50]
But at the time it didn't make much sense to him. "I couldn't figure out why Lasater would do this to me. I didn't know back then that he'd run $100 million, or $150 million, or whatever it was, through my account."
Eight years later, Dennis managed to speak to Nesheim again, if only for a few minutes. This time she was more circumspect. "They're bigger than we are, they're larger than you can imagine. I know you have a son, and I know you love him. I have a daughter, and I love her too," said Nesheim. "Just leave this alone, Dennis." [51]
Dennis limped through to the end of his term as Circuit Court Clerk, then left town with his pregnant wife, Karen, and his infant child, Robert.
"We drove, and drove, and drove, always going South, to get as far as possible from Kentucky," he said. "We ended up here In Florida, living in a motel with roaches. Here I was with a college degree, working a dump truck ... but that's all I was fit for. I couldn't think, I couldn't focus, I was a burned out husk of a man .... I still am."
His friends did not know whether he was dead or alive. "How could I face them when I'd been stripped of my whole life, my name, my integrity, everything I had?" Too proud to return to Williamsburg in disgrace, he preferred to build a new identity as a working man in Coral Gables, Florida. And that is how he was living when two British reporters, Chris Wood from The Economist and I from The Sunday Telegraph, invaded his refuge in the spring of 1994.
It was only after we started writing about Dennis that the worst details came to light. The Economist was leaked a confidential document dated March 15, 1989, entitled "REPORT FLINTLOCK SCORPIO 000289." It profiled Dennis Patrick as "an associate of the Lamida Family of Long Island, New York .... Subject allegedly has been under suspicion of trafficking in cocaine with the Lamida Family. He has hidden all assets ... under the drug cartel in Florida." [52]
The report called for an urgent investigation. "Need two operatives to proceed immediately for additional information to Cape Coral and Williamsburg, Kentucky." In a supplementary page it stated that "subject is known to carry a 9 mm UZI in his vehicle while traveling. He must be considered armed and dangerous at all times."
The documents included a printout of telephone calls from Dennis's house made between August and September 1988. According to the printout six calls were made to a place called Lehigh Acres, "a swamp with small landing and drop zones." There was a trading receipt from Lasater & Company for a Federal Home Loan Mortgage Corporation bond sale worth $9,492,216 and an asset statement, dated December 13, 1985, that was drawn up by a Memphis accountant named Ron Moore. It listed the net worth of Patrick & Associates (the associate had been Dennis's first wife) as $12,339,850.
The FLINTLOCK SCORPIO document portrays Dennis as a wealthy drug smuggler capable of trading $9,492,216 in bonds in a single block. The question is, who was behind FLINTLOCK SCORPIO? Who had a motive to give a dump truck driver the false identity of a man with this kind of money? The report carries no government identification or letterhead. Its style and lettering look like an amateurish rendition of an FBI document. But similar charges were appearing elsewhere. Dennis was informed that his name appeared on Florida police computers as an associate of Colombian cartels. [53] Moreover, in 1989 an FBI agent in Louisville went to Williamsburg, Kentucky, to inform the Police Department that Dennis Patrick was involved in a Florida drug cartel. [54] Whoever was behind this effort had deep reach into U.S. law enforcement.
For Dennis's erstwhile "broker," Steve Love, life has had its up and downs, too. When I tracked him down in a small town in Pennsylvania, he was a different man. The Lamborghinis were gone. He, too, had been living half-underground for years, frightened that the past would catch up with him. "I find it extremely painful to think of what happened at that time," he said. "I was just a scapegoat. I was used by Lasater, and flushed away, my whole life destroyed .... I finished up sleeping on park benches." [55]
He professed remorse. "Dennis never did anything wrong, and I'm deeply sorry that I got him mixed up in it. The fellow was like a brother to me."
Love swore that he was not responsible for the monster trades of $9 million at a time in the account of Patrick & Associates. His "broker number" was on the transaction slips, he admitted, but the orders had been given by the higher-ups who ran Lasater & Company. "There was an awful lot of money going through that business, that's all I can say, and most of us didn't really know what was going on," he said.
Did Lasater & Company order his murder? I asked outright.
"They certainly didn't want anybody to blow the whistle," he replied.
***
In 1989 the Arkansas Committee, a group of left-wing students at the University of Arkansas, started investigating the alleged nexus of drug-running, money-laundering, and covert activities linked to Mena Airport. The Arkansas Committee's lead advocate, Mark Swaney, came to suspect that Lasater and others were laundering funds through the Arkansas Development and Finance Administration (ADFA), a state-controlled investment bank created by Governor Clinton in 1985 to provide "low interest finance for economic development." [56]
There was no need for Clinton to create ADFA. The state already had the Arkansas Housing Development Agency and the Arkansas Industrial Development Corporation (later made famous by a clerk named Paula Corbin Jones). But these two bodies had semi-independent boards. ADFA gave Clinton a patronage machine that answered to the Governor alone. It was a versatile instrument. As James Ring Adams reported in The American Spectator, it was designed with the help of a Boston consultant named Belden Daniels and allowed Clinton to tap into the huge reserves of the Arkansas Teachers Retirement System. At the same time, Clinton steered bond business to Lasater, and low interest industrial loans to the others in the Arkansas group -- Seth Ward, for instance, the father-in- law of Webster Hubbell -- frequently without due diligence and over the objections of the agency staff. [57] "They were giving money away like candy to the insiders," said Mark Swaney. [58]
Believing that ADFA's records would reveal the story of a national security operation run amok in his home state, Swaney tried to pry open the books. His FOIA requests were stonewalled. He fought a protracted lawsuit that eventually compelled ADFA to let him review some of the archive. It was not exactly full disclosure, but what he found was enough to confirm his suspicion that the agency was engaged in practices that were far outside the scope of a state development agency.
Funds had been flowing offshore. ADFA had done at least $250 million worth of business with the Fuji Bank ofjapan. In December 1988, for instance, ADFA raised $50 million for the purpose of building and buying houses for the needy of Arkansas, but instead, ADFA wired the $50 million to the Fuji Bank, Grand Cayman Branch, account number 63119808. [59] It was a nice piece of arbitrage profiteering. ADFA raised the money at 7 percent interest with tax exempt status, and loaned the money to Fuji at an interest rate of 9.37 percent, generating a profit of about $1 million on a ten-month investment. Whether the money -- all of it, plus interest -- came back from Grand Cayman is anybody's guess. ADFA has not provided the wiring documents. When the bonds were remarketed in October 1989 the principal had fallen to $47,915,000. [60]
In 1987 ADFA borrowed $5.04 million from Japan's Sanwa Bank to buy stock in a Barbados company called Coral Reinsurance. [61] With 84 of the 1,000 shares issued, ADFA was in fact the biggest single shareholder. The activities of Coral Reinsurance triggered an investigation by the Delaware Insurance Department in 1992, which cause panic at ADFA. [62] Among the documents obtained by Mark Swaney were a series of memos by Bob Nash, who had taken over as director of ADFA (he is now White House chief of personnel). "Why are they asking about this??!!" scribbled Nash. "Why no other states, only private people? Who was the mover and shaker on this? ... CALL ME."
Swaney believes that ADFA was created by Clinton as an instrument for Dan Lasater. What we know is that Lasater wrote at least eight letters to Bill Clinton recommending people for the board of ADFA. Most of them were appointed. The letter and telephone traffic between Lasater and the Governor's Mansion suggest that ADFA was essentially answering to his instructions. [63]
In 1984 and 1985 there was an explosion of housing bond issues. They spiked to $300 million a year, way above their usual level of between $50 and $100 million. It is exceedingly hard to find an actual bricks-and-mortar house built with all this money. As an experiment, I tried auditing ADFA's $175 million housing issue from July 1985, but the money is impossible to trace. [64] "It just disappears on you, it goes into night and fog," said Mark Swaney.
The finance director, Bill Wilson, admitted to me that ADFA "had trouble getting enough house buyers." [65] If that was the case, why raise the money in the first place? It was a confession that the purpose of the bond issue was to generate commissions -- or soak up money. Wilson was soft-spoken and charming when I paid a visit, but one of his aides destroyed the effect by switching on a tape-recorder as soon as we started chatting about the exploits of Dan Lasater. [66]
Lasater & Company was deeply involved in the demise of thrifts in Illinois. One of them, First American Savings and Loan of Oak Brook, Illinois, fired back with a lawsuit against the firm in October 1985, alleging that Lasater had transferred "unprofitable investments from his personal account to the account of the Plaintiff" after trading was closed. [67] The suit was taken over by the government's Federal Savings and Loan Insurance Corporation in April 1986, after First American was seized by regulators. It hired the Rose Law Firm to handle the case. The attorneys were Hillary Clinton and Vincent Foster. They settled for a modest $200,000 in a sealed agreement that drew a veil over the reasons for the collapse of the S&L. The Chicago Tribune ran a blistering series on Hillary Clinton's role. It accused her of a "glaring conflict of interest" for negotiating "a secret, out-of-court settlement" that ended a suit "against a family friend and an influential benefactor of her husband."
Patsy Thomasson handled the case for Lasater, who was by then in prison. She was more than just an executive vice-president. She was also a "financial and operations principal" of the brokerage firm, with direct liability for criminal misuse of client accounts. According to the Arkansas Securities Commission, she held the key 24,27, and 53 series brokerage licenses (as well as a Masters in Economics from the University of Missouri), making her one of the most highly qualified broking principals in the country. "She's as smart as a whip with these licenses, a very rare find," said a spokesman for the National Association of Securities Dealers. "But she was sitting in front of a howitzer. If any of the brokers had got in trouble, she would have been responsible."
She must have been fully cognizant of the transactions in the account of Patrick & Associates, if not involved herself. Her role was certainly something that seemed to interest the Republicans in the early summer of 1994. After Dennis Patrick went public with his amazing story, he was summoned to Washington and ushered from one office to another on Capitol Hill. Senator D'Amato (R-N.Y.), for one, was in high dudgeon. "This man should be sworn in, he should be deposed. We should have a right and the people should have a right to hear his testimony, and to judge," he thundered on the floor of the Senate. "There are substantial documents to show tens and tens and tens of millions of dollars being funneled through this fellow's account, a person who has absolutely no wealth, and the question is how? And the question is why?"
But it was all bluster. "D'Amato's office never called me. When he got into the majority he didn't do anything about it," said Dennis. A year and a half later Dan Lasater was called to testify before the Whitewater Committee. He was not asked a single question about the trading in the Patrick account. (D'Amato told The Wall Street Journal that it was outside the scope of his investigation.) "I think all these investigations of Clinton are red herrings, just trying to divert attention from what really went on," said Dennis in disgust.
"One day I want to go back to the mountains and woods of Kentucky and go squirrel hunting again like I once did. I want my kids to come back with me to a town where nobody questions my integrity," he said one evening, sitting in the garden of my house in Washington.
"When I think what these people have done to me, the living nightmare they've put me through, I don't think death could have been worse. I would never have believed that what happened to me could happen to anybody in the United States of America. I've never been a militant, but you look at the Red, White, and Blue, and you think of the renegades running everything, and it makes you wonder whether we'll have to fight to get our country back."
-- The Secret Life of Bill Clinton: The Unreported Stories, by Ambrose Evans-Pritchard
That autumn Lasater was indicted on federal drug charges. A federal-state narcotics task force had been formed in Arkansas in 1985 after reports of blatant cocaine trafficking and use, especially in the Little Rock bond business, became what one officer called "overwhelming." Lasater was soon implicated by a torrent of informants' reports and formal statements. But almost from the beginning, the investigation followed what agents remembered as "unusual procedures." By his own account the lead state police investigator, J.N. DeLaughter, was ordered to give "only verbal reports on his investigative findings" and only to the state police commandant, Tommy Goodwin, who at least twice took DeLaughter's briefings on the nearly yearlong probe while in Governor Clinton's private office. At the same time, Lasater was receiving reports on the inquiry from a source in the state police to whom he had made loans and given other favors.
Clinton would later claim that he learned of the Lasater probe only at the last moment in the fall of 1986. But not only had Goodwin received earlier briefings in the governor's office, the inquiry itself had been what investigators called "a spinoff of the Roger Clinton investigation," the files and testimony of which the governor and Roger's lawyers had followed closely. In any event, even with the Lasater inquiry at its height, Clinton lobbied heavily and successfully for a bond issue for a new state police communications system, an issue for which Lasater and Company would receive $750,000 in underwriting fees while its owner was under active investigation for multiple federal and state felonies. "Because they backed the right individual in Clinton," Butch Locke would tell the FBI, "Lasater and Company received the contract. "
In mid-October 1986, with two of his lawyers present, Danny Ray Lasater himself was finally interviewed by local US attorney George Proctor, an FBI agent, and a Little Rock police detective, but none of the agents most familiar with the evidence. Recorded in the bureaucratic prose of the FBI, the result was a relatively perfunctory interrogation with no sustained questioning and a seeming lack of curiosity about the broker's dealings beyond his confessed recreational use of cocaine. "It was either a high dive or incredibly unprofessional, take your pick," said one law enforcement officer. With the interview and his indictment only days later, the investigation came to a premature halt. Though it was standard practice in drug cases, agents were enjoined from seizing any monies or property clearly associated with the cocaine, including Lasater's Lear jet. Most important, they never pursued the complex web of financial affairs that trailed off from Little Rock. When members of the powerful bond community in Little Rock grew worried that the Lasater indictments might go beyond the obvious charges of cocaine use to include money laundering, officials were said to have reassured them discreetly. "Somebody went out and told them not to sweat it, that there was no money laundering involved," said an IRS agent familiar with the investigation, "though we had tons of evidence for cases of just that." Inquiries into Lasater elsewhere fared no better. In 1989 a federal investigation into Angel Fire fell apart in an interagency jurisdictional dispute between Customs, the FBI, and the DEA.
Having testified to the Lasater grand jury, Roger Clinton would be named as an unindicted coconspirator in the charges against Danny Ray. Despite pleas by state and federal agents to pursue the leads suggested by the evidence already gathered, the prosecutors were ultimately no more curious about the millionaire's powerful friends than about his far-flung finances.
When a local journalist asked US Attorney George Proctor in October 1986 about any possible connections between Lasater and organized crime, Proctor responded quickly: "None there," he said tersely.
Questioned further by another reporter as to Clinton's "involvement" in the case, Proctor answered almost dismissively about the man who was among Lasater's most intimate associates. "No way," he told the reporter. A Carter appointee kept on by Reagan and Bush, George Proctor would become a ranking official in the Clinton administration, head of the justice Department's Office of International Affairs, responsible for, among other things, narcotics matters.
Law enforcement officers were dismayed and angry at the stunted probe of Lasater. Whatever the limits or extent of Lasater's cocaine trafficking or the nature of his other dealings, most believed that beyond him the larger corruption in Little Rock and elsewhere pointed unmistakably to organized crime, not to mention the vast crimes of Mena -- none of which would be pursued.
For his part, Bill Clinton had by now publicly distanced himself from the man to whom he had once been so close. "I feel very sick about it," he said at the time of Lasater's indictment, "and I'm sad about it because a person who supported me, who supported a lot of good causes in Arkansas and made a very great success in three careers has been devastated by getting involved in cocaine." Had he ever used cocaine? a reporter asked the governor at the time. "No," he said casually, ''I'm not sure what it looked like if I saw it." Had he ever asked Dan Lasater about the rumored cocaine parties? "No," Clinton told the Gazette, "I never asked him about it. But I never would have had the occasion to ask him about it in a social setting."
Just before his indictment, Lasater sold his share in Lasater and Company to an associate of John Y. Brown and a partner in the brokerage, William D. McCord, who was later indicted on money laundering and gambling charges. Given "use immunity" in return for cooperation in other cases, Lasater was sentenced to only thirty months in prison, though he apparently never offered testimony in another major case. He served just six months in prison and four in a halfway house and would be pardoned by Clinton immediately after the 1990 gubernatorial election. The pardon allowed him to reacquire state-regulated business licenses and thus, as a prominent Arkansas attorney told the Los Angeles Times, was "worth big bucks to Lasater." By the 1992 race, however, the singular relationship between the two men had been virtually expunged. Bill Clinton and Danny Ray Lasater, the Clinton presidential campaign would claim, "didn't socialize."
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Clinton would continue to hear reports about Mena after 1986, though he apparently never again spoke openly about "Lasater's deal." L.D. Brown was not alone among the bodyguards in witnessing Clinton's reactions to stories of Mena. Joining the security unit in 1987, trooper Larry Patterson would testify later about frequent conversations among state policemen "that there was [sic] large quantities of drugs being flown into the Mena airport, large quantities of money, large quantities of guns, that there was an ongoing operation training foreign people in that area. That it was a CIA operation." At one point the mansion detail and state police headquarters buzzed with a story of how local and federal law enforcement officials had obtained a warrant and were about to conduct an important search at Intermountain Regional when they were called off by the state police commandant, Tommy Goodwin. "Do not under any circumstances execute that search warrant," Goodwin was said to have ordered.
A number of the discussions took place "in the presence of Governor Clinton," Patterson recalled. Yet, whether the subject was drugs, guns, guerrilla training, or an apparent cover-up, the state's chief executive would seem somehow detached and uncharacteristically reticent and uninquisitive. "He was just interested in what was, you know, what was going on. He had very little comment to make," the trooper would say. "He was just listening to what was being said." Patterson would also remember "verbatim," he testified, an intriguing conversation between Clinton and Goodwin as the two men rode in the governor's limousine. It was in 1991, when Attorney General Bryant and Congressman Alexander were speaking out on Mena and Clinton, on the verge of his presidential candidacy, was about to hold his lone press conference on the crimes. "Tommy, I want to know -- what the hell is going on at Mena?" Clinton asked his police chief, using the present tense, as Patterson insisted he heard the dialogue. "Governor," he heard Goodwin answer, "I have been told by Senator Pryor and Senator Bumpers to stay out of Mena, Arkansas." But with that, according to Patterson, neither Clinton nor Goodwin had said another word on the subject -- as if the federal usurpation of state police, the seeming involvement of two United States senators in suppressing investigation of widely discussed drug and arms smuggling, needed no further explanation.
Years later a retired investigator familiar with both the Lasater and the Mena files would reflect on what happened. "You know, I guess I never really knew what we were looking at until I read that part in Clinton's letter to the ROTC fellow. You know, the part about being corrupt and all of us being lost." The passage in Bill Clinton's letter to Colonel Holmes had been, he thought, all too prophetic. "I do not think our system of government is by definition corrupt, however dangerous and inadequate it has been in recent years," Clinton had written as a young man, adding in parenthesis, "The society may be corrupt, but that is not the same thing, and if that is true we are all finished anyway."
In a sequel sadly characteristic of the story, L.D. Brown's testimony under oath about flights with Seal and Clinton's telling response would be known to some in the media in the spring of 1996. In addition, new witnesses close to Seal confirmed that the smuggler spoke of flights with "this Arkansas state trooper." Yet, as for Welch, Duncan, and others, the revelation drew attacks on the unwanted messenger rather than sparking intensified scrutiny of the crimes of Mena. Though Brown had been the last and most reluctant of the bodyguards to tell what he knew, it would be the young police officer and his own scarred record in state police politics, including a Clinton smear, not Mena, that became the issue.