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The road to Hale
KEY WHITEWATER WITNESS DAVID HALE RECEIVED SECRET CASH PAYMENTS FROM ANTI-CLINTON BILLIONAIRE RICHARD MELLON SCAIFE.
BY JONATHAN BRODER AND MURRAY WAAS
BENTONVILLE, Ark. -- David Hale, the key witness against President Clinton in Kenneth Starr's Whitewater investigation, received numerous cash payments from a clandestine anti-Clinton campaign funded by conservative billionaire Richard Mellon Scaife, two eyewitnesses told Salon.
It is not known exactly how much money Hale received, but the eyewitnesses, Caryn Mann and her son, Joshua Rand, said the payments occurred regularly over a two-year period, from l994 to l996, after Hale became a federal witness in Starr's Whitewater investigation. The payments ranged from as little as $40 to as much as $500, according to Mann and Rand.
Two other sources familiar with Scaife's campaign independently confirmed the effort to funnel money to Hale. These sources spoke to Salon on condition of anonymity.
Hale is considered crucial to the Whitewater investigation because he has alleged that Clinton, while governor of Arkansas, pressured him to provide an illegal $300,000 loan to Susan McDougal, a partner of the Clintons in the Whitewater land deal.
Indeed, it was Hale's sensational allegations in November 1993 that helped prompt the appointment of the Whitewater independent counsel in January 1994. Clinton denies he pressured Hale to approve the loan. Hale already had pleaded guilty to two felonies and secured from prosecutors a reduction of his sentence in exchange for his testimony against Clinton.
Hale's payments came from representatives of the so-called Arkansas Project, a $2.4 million campaign to investigate Clinton and his associates between 1993 and 1997, according to sources familiar with the arrangement. These sources told Salon that Scaife, who has underwritten a wide variety of anti-Clinton legal and media efforts, funded the Arkansas Project through several tax-exempt foundations he controls.
Under the scheme, two of Scaife's charitable foundations transferred as much as $600,000 a year to a third charitable foundation, which owns the conservative American Spectator magazine, knowledgeable sources at the magazine said. The American Spectator then transferred most of the funds to Stephen S. Boynton, an attorney and conservative political activist with long-standing ties to Scaife. Boynton then used the money to pay private investigators to unearth damaging details about the president, Hillary Rodham Clinton and their associates.
A portion of the funds went to Parker Dozhier, a 56-year-old sportsman and fur trapper who then made the cash payments to Hale, according to Caryn Mann, Dozhier's former live-in girlfriend, and her 17-year-old son, Joshua Rand. Mann and Rand told Salon they witnessed the payments while Hale, then cooperating with prosecutors, was staying at Dozhier's fishing cabin complex in Hot Springs, Ark., between 1994 and 1996.
Hale, a former Arkansas municipal court judge and head of a lending operation licensed by the federal Small Business Administration, was financially pressed at the time. As the result of his federal fraud conviction, Hale faced a $2 million fine.
"Parker would receive money from Boynton," Rand told Salon. "He would essentially put that in his right pocket, and then he'd pull money out of his left pocket and give it to David Hale." Rand said that on several occasions, Dozhier instructed him to take money out of the bait shop cash register for Hale.
Contacted by telephone, Dozhier called the allegations that he had given money to Hale "bullshit," adding, "I never made any payments to David Hale in my life ... Not a dime." Dozhier then abruptly hung up.
Rand, however, provided eyewitness details of the payments. "I saw him give money to David Hale," Rand said. "A couple of times, Parker asked me to go out to the bait shop and get $120 in 20s, 10s, usually small bills. I'd bring it in to the house, and Parker and David Hale would be sitting there, and I'd see Parker give it to David Hale.
"Sometime it was only $40, $60 or $80 at a time, but other times it was $120 or $240 or $500," Rand said. "If Hale needed to pay a $200 bill, Parker would give him the money, plus an extra $100 or $120 for his pocket. It depended on how many times he came to town."
Contacted a second time by telephone, Dozhier said Rand was "destined to be a chalk outline somewhere."
Hale could not be reached for comment. His Little Rock attorney, David Bowden, did not return several telephone calls.
Rand, who often minded the bait shop for Dozhier, said he recorded how much money the shop had earned and spent each day and placed a written record of those transactions in a bank bag at closing time. "Sometimes, it just wouldn't add up," he said. "Sometimes, my little pieces of paper would be missing, or the amounts written on them would be changed. It would always be different from the amount I put in the bag."
Mann said that Dozhier was well-compensated for his role in the scheme. She said she kept Dozhier's books and kept track of regular incoming checks from Boynton and his associate, David Henderson, the vice president of the American Spectator Educational Foundation and a longtime associate of Scaife. Mann, who now lives in the western Arkansas town of Bentonville, said the checks began arriving sporadically in 1994 but that by 1995 checks for $1,000 were arriving monthly. She also said Boynton and Henderson showed up frequently to speak with Hale and Dozhier, and after they left, there was "always an abundance of cash."
After one such visit, she said, she looked inside the safe that Dozhier kept in their bedroom. "There were stacks of money, 100s, 50s and 20s," she told Salon.
Since the cash was not recorded in the bait shop's books, Mann said she could not assess how much money Dozhier received from Boynton and Henderson, but she said it was enough to allow Dozhier to pay off $60,000 in back taxes and to pay his bills on six credit cards, each one totaling $15,000 to $20,000.
Mann said Dozhier first began receiving and disbursing the money in l994. At that time, "There were discussions about giving David cash," she said. "Parker told me that Steve Boynton and Dave Henderson had asked him if he could help David out financially."
After Dozhier agreed to help Hale, Mann said, Dozhier himself began receiving checks and cash from Boynton and Henderson. In addition to passing on the payments to Hale, Mann said, Dozhier spent much of his time investigating Clinton's associates and sending reports to Boynton, Henderson and Republican aides. Mann provided Salon with a copy of one memo concerning the trial of former Arkansas Gov. Jim Guy Tucker that was sent to Jim Highland, an aide to Sen. Lauch Faircloth, R-N.C., on Aug. 28, 1995. She also provided Salon with dozens of pages of Dozhier's handwritten notes, detailing other such contacts.
But Dozhier always complained he wasn't being paid enough for the work he was doing for the Arkansas Project and the risks he was taking, she said.
"Parker was incensed," recalled Mann. "Intermittently he would say, 'I'm the one doing too much. I'm the one in the hot seat. I'm the one who's taking the most risks with this.'"
Mann also said Dozhier and Hale met with Boynton and Henderson twice in 1995, once in Washington, D.C., and a second time at a resort in Biloxi, Miss. In January l996, the four men met again in Washington. At those meetings, Mann said, "They kept saying they weren't getting enough money, and every time they complained to Steve (Boynton) and Dave (Henderson), they got more money."
Dozhier said he could not recall any meetings with Boynton and Henderson in Washington or Biloxi.
Two former executives of the American Spectator, speaking on condition of anonymity, independently corroborated a key portion of Mann's story: that funds from the Arkansas Project went to David Hale. One of the former executives said that Henderson had told him that he was trying to assist Hale in 1995 -- the same time period that Mann and her son said they had seen Dozhier make cash payments to Hale.
"Henderson told me that David Hale's family needed to be taken care of, and they had a way of doing that," the former American Spectator executive said. "There was a mechanism."
In an interview, the second former American Spectator executive, also speaking on condition of anonymity, corroborated this account.
Contacted by telephone, Henderson refused to answer any of Salon's questions. Boynton failed to return several telephone calls seeking comment. In February, Boynton acknowledged meeting with Hale in Arkansas on numerous occasions, but he insisted their meetings were "social."
"We never discussed Whitewater. We never discussed President Clinton," he said. "Those things never came up."
Several sources at the American Spectator said senior executives there were concerned that no one at the conservative magazine seemed to know how the funds were being utilized once they were passed on to Boynton and Henderson.
One of those most concerned was Ronald Burr, then the American Spectator's publisher. Burr ordered an outside audit by the Arthur Anderson accounting firm of how the funds were spent. The magazine's editor in chief, R. Emmett Tyrrell, refused to allow the audit, and when Burr insisted, he was fired.
As part of a legal settlement with the magazine, Burr agreed never to discuss the circumstances of why he left the magazine, including the controversy over the Arkansas Project.
After the New York Observer first disclosed the
existence of the Arkansas Project last month, the American Spectator's
board of directors ordered an internal analysis of how the funds to
Boynton were spent. Terry Eastland, the new publisher of the Spectator,
told Salon that the analysis is ongoing and that he would not comment
until it was completed.
Jonathan Broder is Salon's Washington correspondent. Investigative reporter Murray Waas is a regular contributor to Salon.
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