Cattle Futures in Hillary's Past


As we pointed out in our previous column, troubling questions concerning one chapter from her past are sure to dog First Lady Hillary Rodham Clinton's possible road to the White House. They relate to her astounding foray into the cattle futures market in the late 1970s and her ability to turn a $1,000 investment into a quick $99,537 profit.

As one begins to sort out the various insider schemes that were at work in the cattle futures market in the late 1970s, it becomes abundantly clear that those who reaped hundreds of thousands of dollars in a very short period of time were not the thousands of producers and millions of consumers of meat.

For example, Mrs. Clinton's ability to turn $1000 into nearly $100,000 in 10 months of futures trading, a congressional study would learn, coincided with a period of time that a select group of executives from packing houses, grain companies, feedlot operators and commodity brokers reaped tens of millions of dollars in an "insider" trading scheme in the cattle futures market.

Like so many other business ventures in which the Clintons have been involved in over the years, there is no direct evidence available that Mrs. Clinton actually knew of the scheme in 1978-79, although she most likely profited from it.

Although neither Mrs. Clinton's broker Robert L. "Red" Bone nor her principal advisor and longtime close family friend James Blair were among some 32 identified beneficiaries, it is known that both Blair and Bone at the time made millions in the cattle futures market. It is also unknown whether Clinton at any time had investments in October and December 1979 cattle futures as she quit trading in her REFCO account in July 1979.

USA Today's Bill Montague and Kevin Johnson reported that two Springdale brokers, Bill McCurdy and Steven Johns, testified that they participated in a cover-up of Block trading in the Springdale office on June 27, 1979.

McCurdy and Johns told how they were told to lock the office doors after the market closed, set back the clocks used to time stamp trade orders and prepare phony customer order slips that could be substituted for the block orders actually placed during the day.

June 27 was also the day that Mrs. Clinton opened a trade that initially would lose her $26,640, but within three days would earn her profits of $10,000 and $43,760 -- her single most profitable commodities trade. It is also one of the three days in which the White House claimed it could not locate Clinton's daily trading statements.

This same day, based on Chicago Mercantile Exchange disciplinary records obtained by the Wall Street Journal, Bone and another Springdale office broker exceeded the speculative-position limit in feeder cattle future contracts by selling short a total of 1443 contracts, violating the 300 contract limit. Exchange officials later speculated that the sale was an attempt to manipulate the market.

Although Mrs. Clinton denies knowing about any of these trading abuses, it is clear from court testimony that many other Springdale REFCO clients, including her longtime friend and financial advisor James Blair, knew about such practices and hoped to profit from them.

Additional court testimony has shown that Bone frequently waived margin calls for certain customers, in effect loaning them money to maintain their accounts. Records of Mrs. Clinton's account show she was frequently allowed to avoid posting margin, including her June 27 trading venture.

Testifying later in a Fayetteville, Ark., US District case against REFCO, Blair acknowledged that Bone "convinced me that [REFCO] knew more about the cattle market than anybody alive, and that they had inside information about the cattle market and that there was a great fortune to be made in cattle."

In his book on Bill Clinton, First In His Class, journalist David Maraniss describes Blair's passion for trading.

"Blair could have kept the branch office in business almost by himself. From the time he started buying and selling cattle futures in March, 1978, after determining that REFCO had an inside track on where the cattle market was going, he was trading enough to pay REFCO an average of $50,000 a month in commissions. There is an old Arkansas saying that even a blind hog finds an acorn once in a while, but Blair was counting on anything but blind luck."

Initially Mrs. Clinton took the credit for not only putting up her own money, but also for determining the time to make her own trades by carefully studying the commodity reports in the Wall Street Journal.

Subsequently, she later acknowledged that it was Blair who largely directed her trades. Blair later retired as chief legal counsel for Tyson Foods Inc. Bone, Tyson's former chief commodity trader, became a broker for REFCO Inc. in 1975 and became so successful that, in 1979 alone, he earned profits for his customers estimated between $20 and $30 million.

Don Tyson, then the company's president and CEO, with headquarters in Springdale, Ark., and both Blair and Clinton's longtime personal and political friend, was likewise throughout the years a generous contributor to Clinton's state and national political campaigns.

A longtime confidant of Mrs. Clinton and political operative for her husband, Blair was also a principal financial advisor to the Clintons in the now famous Whitewater real estate land development project.

Tyson Foods, the nation's number one meat and poultry producer, pled guilty in December 1997 to giving former USDA secretary Mike Espy more than $12,000 in illegal gratuities. The Arkansas-based giant and longtime personal and financial FOB (Friend of Bill) agreed to pay a $4 million fine, contribute $2 million to Independent Counsel Donald Smaltz's investigation and cooperate in his probe.

As an aside, the story of Clinton's winnings barely barely got the attention that it so richly deserved from the Public Broadcasting Service and National Public Radio. One only need, however, to delve a little behind the scenes to understand the reasons for this head-in-the-sand approach to the story. Thanks to colleague Sam Smith, we get a much clearer picture as to why the "news of the day," such as the Clinton cattle futures story, is becoming such a rare commodity in our corporatist-ruled "public broadcasting" culture.

At the time, the chairperson of the Corporation for Pubic Broadcasting, which funds NPR and PBS, was one Diane Blair, whose maiden name was Diane Divers Kincaid. The name of the "official" who married Kincaid and James Blair in 1979 was William Jefferson Clinton. The name of James Blair's "best person" at his and Diane Divers Kincaid's wedding was Hillary Rodham Clinton.

In 1972, Bone, Tyson's, Don Tyson and a half-dozen other parties were accused of manipulating the egg futures market. Although the case was settled in 1977 before the Commodity Futures Trading Commission with no admission or denying of guilt, Bone was suspended for a year. A month before Mrs. Clinton entered the commodities market, Bone completed his one-year prohibition.

Lawyer Clinton, according to a senior White House aide, was "unaware" of Bone's problems at the time, although her confidant Blair, Bone's longtime friend and attorney, had been representing the broker in numerous regulatory and other legal proceedings besides having a statewide reputation in Arkansas as a freewheeling inveterate gambler.

This chapter in her life along with the fact that she served on Wal-Mart's board of directors for six years when her husband was governor of Arkansas should provide for some interesting commentary if and when, espousing her own unique form of pretentious populism, she decides to con her way to the presidency.

A.V. Krebs operates the Corporate Agribusiness Research Project, which publishes the online newsletter The Agribusiness Examiner. Email

From The Progressive Populist, May 1, 2006

Home Page

Copyright © 2006 The Progressive Populist