Industrial Development Corporation
Castle Grande was a real estate development in Arkansas about 10 minutes south of Little Rock. It came into National news as a result of the Whitewater investigations. The project was a 1,050-acre (4.2 km2) lot where Jim McDougal hoped to build a microbrewery, shopping center, a trailer park and other future projects in 1985. The land was scrub pine forest that had failed already as an industrial development. The sales price was $1.75 million. State regulations prohibited Jim McDougal from investing more than 6% of his Madison Guaranty S&L assets. So, he put in $600,000 of Madison money and then for the difference had Seth Ward put in the remaining $1.15 million. This money Ward borrowed from Madison Guaranty on non-recourse, no personal obligation to repay. If federal regulators found out, McDougal's S&L could be shut down, since it had already been operating under orders to correct its lending practices.
Seth Ward an Arkansas businessman and Webster Hubbell's father-in-law was hired by Jim McDougal to assist in land acquisition for the Castle Grande project. Hillary Clinton, with the Rose Law Firm, worked with Ward on certain legal details of the project she knew as IDC - Industrial Development Corporation. Webster Hubbell was Hillary Clinton's partner and friend at the Rose Law Firm. The bad loans for the project cost the public $4 million.
Robert W. Palmer was the land appraiser for one of the Castle Grande loans, he later admitted to conspiring with Jim McDougal and others with Madison Guaranty savings association. The conspiracy was to inflate the estimates used for the loans. Kenneth Starr's investigators found that Palmer inflated estimates used to support loans made to Gov. Jim Guy Tucker of Arkansas.
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