In the Spring of 1994, the Clinton White House faced questions amidst a newly developing story centering on the First Lady’s commodity trading activities as her husband sought the governorship of Arkansas. How did Hillary Clinton, with no related education or experience, happen to turn a $1,000 investment into nearly $100,000 in less than a year?
What role did her broker (previously suspended from traded and later fined heavily by the exchange for multiple violations), and her trading advisor (who represented the state’s largest employer) play in her fantastic success?
As the 2016 presidential race heads into full swing, the events in question are nearly forty years old, occurring in 1978-1979, while Bill Clinton served as the Arkansas Attorney General and Hillary Clinton worked for the Rose Law Firm. Yet the Clintons had also by that time fully embraced public life, so her private business dealings from the time would still seem to be relevant in an evaluation of her fitness for higher office. Furthermore, the couple’s legal credentials (they met at Yale Law School), would certainly preclude any potential wrongdoing as being characterized as simple youthful indiscretion.
I’ve traded commodities – including cattle futures – and in my own initial review of this case, it’s hard to conclude how Hillary Clinton could’ve achieved the returns she did. It seems far more likely that the Clintons accepted the largesse of a major corporate interest, relying on a shady broker and advisor who used accounting gimmicks to book phony profits that Hillary later withdrew as cash. That’s my working theory, anyway.
Two recent articles cover this topic in greater depth and are recommended reading for anyone wishing to explore further details or consider their relevance to the 2016 campaign: a piece by Caroline Baum and Victor Niederhoffer, originally written in 1995 and republished this month in National Review; and another by Marc Joffe earlier this year in the Fiscal Times.