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Arkansas Broker Agrees to Aid Whitewater Investigation : Inquiry: Chris Wade is promised a 16-month jail term for pleading guilty to two felonies. He was sales agent for the Clintons' Ozark land venture.

March 22, 1995|SARA FRITZ | TIMES STAFF WRITER

LITTLE ROCK, Ark. — Chris V. Wade, a real estate broker involved in Bill Clinton's Ozark land deal while Clinton was governor of Arkansas, agreed Tuesday to cooperate with the government's Whitewater investigation in exchange for a reduced sentence in a related case against him.

Wade was promised a maximum sentence of 16 months in jail by independent counsel Kenneth W. Starr in exchange for his cooperation and a plea of guilty to two felonies.

Wade, dressed in an open-necked sport shirt and carrying a baseball cap, admitted in court to bankruptcy fraud and making a false application for a bank loan he used to build a house in the ill-fated Whitewater resort community jointly developed by Clinton, savings and loan owner James B. McDougal and their wives.

As real estate agent for Whitewater, Wade, 49, who lives in the Ozark village of Flippin, Ark., was privy to many of the financial transactions involving the Clintons that are under investigation by Starr. He acted as sales agent for lots at Whitewater, collected monthly payments and helped to arrange financing for the project.

In the past, Wade has contradicted the Clintons' contention that they lost money on Whitewater Estates. Starr is investigating allegations that Whitewater was a conduit for McDougal to transfer federally insured money from his Madison Guaranty Savings & Loan to the Clintons.

Both the Clintons and the McDougals have denied these allegations.

On Tuesday, David Kendall, a Washington lawyer who represents the Clintons in the Whitewater matter, issued a statement noting that the Clintons were not involved in the crimes that Wade acknowledged in the plea agreement. "The charge instead arises out of Mr. Wade's private business affairs, including his own personal bankruptcy proceedings."

Starr is said to be particularly interested in Wade's knowledge of transactions involving Lot 13 at Whitewater Estates, where the developers built a model home with money borrowed by Hillary Rodham Clinton from a local bank. Although Mrs. Clinton borrowed the money and took some tax deductions for the payments made on it, there is evidence that the loan was repaid from the Whitewater business account.

Nevertheless, it was transactions involving Lot 7--not 13--that were at issue Tuesday in Wade's plea agreement entered before U.S. District Judge Susan Webber Wright, a Clinton appointee to the bench.

Lot 7, which has one of the most scenic river views in the 230-acre development, is said to be one that the Clintons considered reserving for themselves when they entered into the development deal with McDougal in the mid-1970s.

By the early 1980s, however, when the Whitewater development proved to be less successful than its owners had hoped, Lot 7 was sold to outsiders. Ten years later, Wade, shortly after declaring personal bankruptcy, repurchased Lot 7, built a house on it and resold it to a Texas couple.

According to Wade's plea agreement, he declared bankruptcy in 1989 because four creditors were leaning on him to repay loans totaling $489,120. When Wade totaled his assets at bankruptcy, they added up to $371,213. But he now admits that he concealed about $100,000 worth of land he owned, some of which he later exchanged for Whitewater Lot 7.

Wade concealed his purchase of Lot 7 by using the name of John Lauramoore, a local contractor, as the purchaser. Lauramoore then borrowed money from a local bank on Wade's behalf. He took out two loans, one for $45,000 in June, 1991, and another one for $15,015 the following September.

To assist Lauramoore in borrowing the money, Wade signed a fraudulent appraisal of the lot in which he certified that he had no interest in the property.

Technically, Wade could be sentenced to up to five years and fined up to $250,000 for bankruptcy fraud, and as much as 30 years and $1 million for falsifying the loan application.

But in exchange for his cooperation in the Whitewater case, Starr agreed to recommend to the court that Wade serve no more than 16 months in jail, with the possibility of parole after only eight months.

Wade is the sixth person to plead guilty as a result of negotiations with the independent counsel investigating Whitewater. Unlike the others, however, Wade is the only one with any knowledge of the Clintons' real estate investment in Whitewater.

Wade, who has supplied the independent counsel with his own financial records dating to 1978, contends that he is being charged with crimes that would have gone unnoticed had Republicans not insisted on an investigation of the President's personal investments.

"I've got to go through all this because somebody wants Bill Clinton's job," he recently told the Washington Post.

As a result, Starr's action against Wade is likely to reinforce the prevailing view among Arkansans that the citizens of their state are being forced to suffer humiliation because of a government investigation designed to satisfy the curiosity of Clinton's political foes.

Among the others who are cooperating with Starr as part of plea agreements are former Justice Department official Webster L. Hubbell, a close Clinton friend and former law partner of Mrs. Clinton's who admitted overcharging his law firm $400,000 for expenses; Neal T. Ainley, a banker who said he helped conceal large bank withdrawals by Clinton's 1990 gubernatorial campaign, and David Hale, a former municipal judge who admitted using his small-business investment corporation to defraud the government.

For months, Starr has been expected to obtain indictments against some of the major players in the case, possibly including the McDougals and Arkansas Gov. Jim Guy Tucker. But sources say indictments have been delayed by plea negotiations with lesser figures.

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