A guide to Whitewater

By Sam Marcy (Feb. 3, 1994)
Once again, as has happened so many times in U.S. history, the issue of political corruption in the highest echelons of the capitalist government has come to the fore.

It is of no use for Marxists to simply join the cacophony of loud and discordant voices calling for removal of this or that government official accused of criminal misconduct. But it is very important for Marxists to outline an independent working-class approach, which differs fundamentally from that of the ruling class.

The ruling class, above all, is most concerned with hiding its own complicity in the corruption. The ruling class seeks to distance itself from any revelations of corruption. By virtue of its monopoly of the capitalist press and the ownership of the means of production in general, it seeks to completely divest itself of any and all kinds of ties it has with the criminal elements themselves.

This it cannot always do. The really huge criminal groupings in the U.S. must have friendly banks where they can deposit their illegal income.

Our concern at the present time, however, is not so much with the relationship of crime and corruption to capitalism in general. Rather, it is how and why the ruling class may at particular moments not only discredit its own most devoted capitalist politicians, but even attempt to remove them. This includes the president, if he stands in the way of an important objective sought by either the ruling class as a whole or a key section of it.

Presidential scandals

At the present time the Clinton administration is in a somewhat perilous situation. Hanging over its head is the Whitewater matter, in which he and Hillary Rodham Clinton are intimately involved.

Judging by the character of the charges--especially when one considers that it all took place when Clinton was governor and not president--the matter seems small potatoes indeed. This is especially so in comparison with the charges made against previous presidents--Warren Harding with the Teapot Dome scandal, Richard Nixon with Watergate, and others.

One wonders why such a violent attack is opened against him at a time when Clinton is eager to do almost everything the ruling class or any of its factions demands of him. It was not long ago that the head of the Federal Reserve took it on himself to not only meet with Clinton but to publicly and even ostentatiously show solidarity with him in a significant photo session. That's unusual for a chairperson of the Federal Reserve. It could not have escaped the attention of Clinton's critics.

So why this campaign, and why now?

To understand the significance of corruption cases involving the capitalist government itself, it is necessary to go beyond an examination of the charges. One must seek out the fundamental political issues hiding behind them. This is the Marxist approach.

What are the concealed issues?

Merely coming out against corruption, or being a more vigorous, persistent critic, is not enough. It is necessary to carefully search out whether indeed there is any political or economic issue behind it. Does one or another faction of the ruling class have a concealed interest in the corruption struggle?

It is, of course, possible that there may not be any significant political difference or factional strife behind the scandal.

Look at all the hue and cry raised against Reagan and Bush in the Iran-contra affair. Both of them clearly and contemptuously violated a law that specifically forbade the president from dealing with Iran for the release of U.S. prisoners. They went ahead and did it anyway, in open defiance of the law.

The ruling class as a whole, despite clamorous demands made here and there by some capitalist politicians, stood by both Reagan and Bush. This made it impossible for the independent prosecutor, Lawrence Walsh, to charge or convict them of criminal conduct.

A consensus was apparently reached in ruling-class circles: to convict only the underlings of the Reagan administration. This was done in such a way that none of the important figures convicted actually served time.

Walsh himself had to publicly admit that he would not proceed against a president or vice president. That, he claimed, would impinge upon or destroy an important aspect of capitalist politics: to preserve the presidency as a hallowed and above-the-fray institution not unlike a bourgeois monarchy in Europe or Asia. The imperialist governments in the West as well as in Japan make sure to maintain the halo of objectively representing all the people--meaning all the ruling-class factions.

Retaining this symbol of class unity facilitates the oppression of the masses.

Walsh and Iran-contra

The independent prosecutor found himself in a position where he had at all costs to uphold the dignity of the imperialist presidency--especially since the earlier Nixon Watergate situation had already discredited it. Walsh had to find a way to proceed without tarnishing this symbol of capitalist class unity.

Willingly or unwillingly, he had to absolve both Reagan and Bush--despite the patently obvious way they violated the law Congress had just passed and President Reagan himself had signed.

Walsh had to find a way to absolve Bush and Reagan, to present them as honest people. His task was similar to that of the ancient Greek philosopher Diogenes. Diogenes, lantern in hand, went out on his famous "search for an honest man" in broad daylight. He found none. But Walsh is not exactly a prototype of Diogenes.

Diogenes agitated against the rich, land-holding, slave-holding aristocracy in 4th century B.C.E. Greece. Legend holds that he championed the ascetic life--a form of struggle for a return to primary (primitive) communism. His search for an honest man, in the context of a slave-holding society, could only lead to frustration.

But Diogenes continued his search, lantern in hand in broad daylight. He thereby demonstrated that there were no honest men in the slave-holding aristocracy of that period.

And this is what our independent investigator had to accomplish. He had to show that these two were honest men, despite their criminal conduct.

Clinton and Whitewater

What is it about President Clinton that roils sections of the ruling class?

Is it his and Hillary Clinton's conduct in relation to the Whitewater development company and the Madison Guaranty savings and loan that funded it? Could that really be a significant issue? Could it really warrant calling for a broad congressional inquiry? Even some Democratic senators such as Patrick Moynihan of New York have called for an investigation. But is that what really concerns them?

What is really involved here? What happened to the Whitewater company is really a piddling matter. What is really involved is a course of conduct and ensuing developments of many persons in relation to the several hundred savings-and-loan banks that failed, were put up for sale, and were then sold under circumstances that warrant a great deal of discussion.

The issue is not the depositors in the failed banks. The bulk of the depositors--those with under $100,000--were compensated. The issue is the investors.

Who were they? Were they hundreds of small individual investors? Or were they the big banks? What has been their involvement, up until now, in the struggle to recoup their losses?

It is impossible that only the Clintons were connected with the failed banks. Judging by accounts of their financial situation, their investment, if any, was marginal. But there are enormous interests whose investments went up in smoke.

Any attempt at compensation or resale of the banks' vast properties would necessitate federal intervention. All this would clearly point toward Clinton, as president, taking action if any were contemplated.

The complications involved in this are enormous. Is this what the big banks would want? Whatever may be done, it is clearly a momentous issue in politics and in high finance. It is not possible to open up an initiative to revive interest in the failed banks without involving the president as the chief executive.

Does the issue of compensating the investors who lost money lurk behind the current struggle? Is it possible that the president, by executive order, could call for reopening the issue of the failed banks? Who would be for that, and who would be against it? These are some of the problems.

Billions involved in S&Ls collapse

We must assume that behind the corruption charges against Clinton are other, more fundamental, issues. And the failure of several hundred savings-and-loan banks, with billions of dollars, is a matter that must deeply concern some key monopoly capitalists.

Even if he had never had any connection with the banks at all, the question would still arise: Is it not proper for the president to look into the matter of the several hundred failed savings-and-loan banks?

There is the question of the president's role in retrieving losses sustained as a result of the banks' collapse. Notice how quickly and correctly President Clinton assured residents in the Los Angeles area of support after the earthquake. It would not be unusual for a president to reopen the cases of the failed banks. It all depends upon which ruling-class faction would gain by it and which would lose.

In examining the corruption charges against Clinton, it is these material issues representing the interests of groupings within the capitalist establishment that have to be examined. Of course, the representatives of the banks and the capitalist politicians know a great deal about this.

The duty of Marxists is to tear away the veil of secrecy and factional politics and bring out the real issues regarding the material interests of monopoly groups. If one of the groups is seeking Clinton's resignation or ouster, does that signify it is relying on Vice President Albert Gore? Or is it going to be like the Nixon corruption case? The bourgeoisie disqualified both Nixon and Vice President Spiro Agnew so that they could get the kind of representative they wanted: Gerald Ford.

There are no foreign policy issues involved in this particular case. It is strictly a question of resolving a struggle among conflicting groups in the capitalist establishment. Nor is it possible for any one of the capitalist groupings, however large, to be able to get its way more or less completely, in view of the sharp inner conflicts among themselves.

The best of all developments would be for an independent investigation by the labor movement, by representatives of the working-class and progressive organizations. Their concern would be the interests of the working class, the oppressed nationalities in particular, and how the course of the struggle should be conducted from here on.

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