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"Hillary should have taken lessons from him with er measly $100,000 stock deals."

The Dixie Mafia
"In light of the Henrickson allegations, and the fact that two investigations into Tyson's alleged drug activities were shut down by the upper echelons of the Arkansas State Police, any commerce that ties Don Tyson to Bill and Hillary Clinton demands close scrutiny. This includes the brokerage account in Hillary Clinton's name that turned $1000 into $99,537 between October 1978 and July 1979. This speculative venture was the initiative of James Blair, the general counsel of Tyson Foods.

Having done a fair amount of trading myself on exotic markets, often with high leverage, the ratios in themselves do not surprise me. These sorts of profits can be made. But they are not made in the way that Hillary Clinton made them. The trades began three weeks before the 1978 elections, when Bill Clinton was riding high in the polls and seemed set to win his first term as Governor of Arkansas. It was shortly after the Clintons had signed up with Jim McDougal in a sweetheart land deal called Whitewater. Perhaps this was coincidence, but I doubt it.

The first transaction was a bet that rising cattle prices were due for a snap correction, a temporary fall in a buoyant market. That is exactly what happened. By the end of the day, October 11, 1978, cattle prices had fallen one and a half cents a pound. Mrs. Clinton netted an instant profit of $5,300. Within a couple of weeks she felt confident enough to start making large cash withdrawals from her account: $5,000 on October23; another $15,000 for Christmas. The money was rolling in.

When New York Times reporter Jeff Gerth first broke the story in 1994, Hillary Clinton claimed that she had conducted the transactions herself after studying the market pages of the Wall Street Journal. This caused a good deal of mirth on the Chicago Mercantile Exchange. "Buying iceskates one day, and entering the Olympics a day later," wrote Mark Powers, editor of The Journal of Futures Markets. The White House subsequently retreated step by step until it was acknowledged that Hillary Clinton's broker had exercised complete discretion in handling the day-to-day trades.

His name was Robert "Red" Bone, a former truck driver and personal bodyguard for Don Tyson. Bone rose to become vice president of Tyson Foods, where he was in charge of the egg division. It was a position he used for lucrative insider trading--both for himself and for the Tyson operation--until regulators suspended him for a year in 1977 for allegedly trying to corner the eggshells futures market. He was later sanctioned by the Chicago Mercantile Exchange for "repeated and serious violations of record keeping functions." When he regained his broker's license he joined the commodity brokerage firm REFCO, which had privileged information about daily movements in cattle prices. Indeed, REFCO chairman Thomas Dittmer had such vast cattle holdings himself that he could flood the market and cause snap changes in futures prices.

In his book Bloodsport, James Stewart offers a detailed account of Bone's modus operandi at REFCO's offices in Springdale. It describes how Bone gleaned his inside tips each day on the hotline to REFCO's headquarters in Chicago. Stewart implies that although Bone was engaging in shady practices, Hillary Clinton's transactions were clean. But in the lightly regulated commodities markets of the late 1970s it was easy to "cherry pick" trades at the end of the day, allocating gains to one account and losses to another. This loophole was well-known in financial circles. It was part of market folklore that the most effective way to carry out the illicit transfer of money from one party to another was through a "straddle." By placing one bet that the market would go up, and an off-setting bet that it would go down, the profitable trade could be allocated to the beneficiary, while the "donor" swallowed the loss. It was absolutely foolproof. "During the late 1970s and early 1980s, straddles were used for all kinds of illegal activities, ranging from tax evasion to money laundering and bribes," wrote David L. Brandon, former chief of the commodities section of the IRS, in an article in The Wall Street Journal.

To make it look plausible, the beneficiary would have to have a few losing trades mixed in with the gains, but in reality there was no risk at all. An investigation by the Chicago Mercantile Exchange in 1978 suspected that REFCO was doing precisely this. One of REFCO's Springdale brokers in fact admitted under oath that the office had been manipulating the futures contracts by "allocating them to customer's after the market closed."

Stewart reports that Hillary found the experience nerve-racking and decided to retire from the market after a fresh windfall of $40,000 in July 1979, which brought her total profits to almost $100,000. But three months later, she was plunging back into the commodities market, this time with a broker at Stephens Inc., in Little Rock. When CBS New's 60 Minutes asked Don Tyson if Hillary Clinton's cattle trades were a "payoff" from him, he vehemently denied it."