Like McDougal and Whitewater, Lasater popped briefly into view during the 1992 campaign. The Los Angeles Times reported that in 1985 Clinton personally lobbied state legislators for a bond deal in which Lasater’s firm received a $750,000 share–at a time when it had been alleged in court testimony that be was the target of a cocaine investigation. Clinton campaign officials denied that Lasater got any special treatment from Clinton. In the hurly-burly of the election season, both matters were all but forgotten by the press. But, as with Whitewater, important questions remain unanswered. According to state records and interviews with Arkansas officials, the Clinton administration continued to award bond business to Lasater’s firm despite its shaky financial condition and a record of questionable business practices well known inside the securities industry. Moreover, a confidential FBI document says Lasater told federal agents that in the early 1980s Clinton asked him to give his ne’er-do-well half-brother Roger a job. Lasater put him to work in his Florida stables.
Late last week the White House once again denied any impropriety in Clinton’s relationship with Lasater. Presidential aide Bruce Lindsey acknowledged that Lasater was a supporter, but disputed suggestions that Clinton had lobbied state officials to win bond business for him. Betsey Wright, Clinton’s former gubernatorial chief of staff, said it was “outrageous” to suggest that Lasater got state contracts because he’d hired Clinton’s half brother. “Bill trying to help [Roger] get employment wouldn’t raise an alarm to me,” says Wright. Lasater refused to comment.
But his story is clearly one of an ambitious businessman eager to buy access to public officials. He staged fund-raising events for Clinton at his firm’s offices and marshaled thousands of dollars in campaign contributions. Records for Clinton’s 1984 campaign show at least $5,000 from Lasater, his family and associates. Two former Lasater & Co. bond salesmen say he encouraged his staff to donate to Clinton’s campaign, promising to boost their commissions so they could more quickly earn back their contributions. Clinton and Lasater also socialized on occasion. Clinton aides reported two years ago that he’d flown on Lasater’s private plane three or four times between 1982 and 1984. In an interview with FBI agents, Lasater recalled that Clinton had visited his house for a party. and that they had met at two other social functions. In 1985 Clinton lent his name to an ad promoting Arkansas Week at a New Mexico ski resort owned by Lasater. It promised prospective vacationers that Clinton would be there to hobnob with them. But he didn’t show.
Still, Lasater’s brokerage business foundered. Lasater & Co. soon came under scrutiny from state regulators and securities-industry watchdogs. Lasater himself told the FBI that by 1982, his firm was in deep trouble with tax collectors and might be required to inform securities regulators. That same year the company was censured by the state securities commissioner for cheating customers. Later it was censured by the National Association of Securities Dealers. Company documents also show that Lasater wasn’t too picky about whom he hired: some of the firm’s salesmen had drug and bad-check convictions. One bond salesman was censured for cheating on a bond-licensing exam.
Nevertheless, in early 1983, shortly after Clinton returned to office (he lost his 1980 re-election campaign to Republican Frank White), the board of the Arkansas Housing Development Agency added Lasater’s firm to a list of brokerage houses eligible to underwrite state-bond issues. Wooten Epes, appointed by Clinton as agency director shortly after Lasater was put on the underwriters list, says he was unaware of problems involving Lasater’s firm. He believes board members knew that Lasater had been a Clinton supporter during the 1982 campaign. (Epes points out that the list also included firms that did not back Clinton.) Over the next two years, Lasater & Co. got pieces of more than a dozen bond sales set up by the state agency. Officials said they did not know how much money the Lasater firm earned from the deals, but such work is traditionally lucrative–high fees and minimal work, Epes said that had he known about the firm’s record, he might have hesitated to continue using it as an underwriter.
One reputable Little Rock broker says he tried to alert the Clinton administration about Lasater’s dubious credentials. After learning that Lasater had been selected as a state-bond underwriter, he spoke with “someone I knew had the governor’s ear.” The broker says he believes his warning reached Clinton. But both Wright and state officials say they heard nothing.
Little more than a year after Lasater & Co. underwrote its first state-bond deal, state police began to pick up word that Lasater and his bond daddies had become heavily involved with cocaine. According to police files, parties hosted by Lasater sometimes featured lines of cocaine laid out on glass tabletops or silver trays. His circle included Roger Clinton. Lasater told the FBI he first met Roger Clinton in 1981, when Clinton was playing in a band. Lasater took him on as a stable hand at his Florida horse farm after “Gov. Bill Clinton requested Lasater to hire him,” in the words of Lasater’s statement Lo federal agents.
IN 1984, AFTER AN UNDERCOVER STATE-POLICE sting, which Governor Clinton approved, Roger was arrested on cocaine charges. He later pleaded guilty. On the witness stand in a related trial in February 1985, Roger not only confirmed that he had worked at Lasater’s stable, but also said Lasater had once loaned him $8,000 to pay off a drug dealer. (Roger gave the dealer $4,000 and kept the other half for himself) Another witness testified that Roger Clinton had been asked by state police to make Lasater the target of a new drug probe.
Clinton didn’t flinch when it came to his brother’s drug use–he signed off on the sting that led to his arrest. But exactly what Bill Clinton knew at the time about Lasater’s cocaine use is not clear. The evidence shows that Lasater continued to get bond business from state agencies even after he was identified in court testimony as a sting target. In the spring of 1985, Lasater & Co. was one of the firms selected to sell bonds to finance a new statewide radio network for the Arkansas State Police. Lasater partner George Locke told the FBI that “because Lasater & Co. backed the right individual in Governor Clinton, Lasater & Co. received the [bond] contract.” A law-enforcement source says that before the deal went forward, the governor’s office asked Col. Tommy Goodwin, the state-police chief, about Lasater’s drug background. Goodwin was told by his staff that Lasater was a cocaine user but not a dealer. The firm’s statebond business finally dried up a few months before Lasater and his partners were indicted on federal drug-conspiracy charges in October 1986. Lasater Pleaded guilty and served six months in prison. Last week the Naval Criminal Investigative Service disclosed that Lasater is now facing a new investigation in connection with alleged financial irregularities in the operation of the Marine Corps PX system.
It is only fair to point out that Lasater’s career was unexceptional. In virtually every state capital, the underwriting of state bonds is free lunch for the politically well connected. Last year Jim Leach, the Republican congressman from Iowa, who is leading a congressional investigation into Clinton’s involvement in the Whitewater scandal, introduced a bill in Congress to curb the practices of “cities and states [which] are awarding bond business to the securities firms or banks which have provided the most campaign contributions,” Interestingly, Leach’s cosponsor on the bill was Texas Congressman Henry Gonzalez, the Democratic chairman of the House banking committee, whom Leach and other Republicans now accuse of obstructing their investigations into the Clintons’ Whitewater dealings. If congressional investigators expand their probe to include the activities of Lasater and other flamboyant Little Rock bond daddies during the days Clinton was governor, they might find a whole new set of problems for an already beleaguered White House.
