A Brief History of the Island, Part One The Whitewater Scandal

I’m not going to try to write this story in chronological order, it would take a long time to get done. Posts about feudal lords, indentured servants, smugglers and United Empire Loyalists, attempted invasions by Fenians etc., will come, but only as I manage to crawl out of various rabbit holes.

I will start where my research journey did, after a throwaway comment uttered by a friend as we were driving one of the backroads on this Island. He pointed to a wall of saplings/undergrowth/old timber and said “That’s part of the Whitewater land thing.”

There was a pause and I replied “Whitewater? You mean as in the whole Clinton Administration/Arkansas land deal scandal Whitewater?”. He just nodded and said “yup”.

I didn’t believe him. I mean I’m a political junkie. I’m one of those who watched all the Nixon hearings and my taste for salacious details about the nefarious doings of the rich and powerful never went away. Now Whitewater was very complicated, and involved a lot of names and it was easy to tune out parts of it. Still, I would have noticed if Canada or Campobello Island was mentioned. It turns out he is right. Although Whitewater had a lot of different legs and arms, this little Island was a key component. The House Banking Chairman at the time said “The indication is that Campobello cost taxpayers $5.5 million”.

I’ve read dozens of articles trying to get a handle on what happened, and how, and where this Island fits in. I’m going to give a brief summary from our perspective in the Bay of Fundy. If you’re unfamiliar with Whitewater it won’t give you a detailed understanding of all the dealings between individuals and banks and and all the other nonsense. Some of the names though, will be familiar to those of you (like me) of a certain age.

Earlier in the 20th Century, when dreams of creating a new rich enclave on this Island had vanished, the Roosevelt and Adam families sold a huge chunk of this Island to a logging company. After harvesting much of the softwood on that land they put it up for sale and, hoping for the best price, they did so in the Wall Street Journal. Jim McDougal, then in charge of the Madison Savings & Loan in Arkansas, saw the ad. He arranged for a flyover of the Island and bought 3,000 acres. This was almost 1/3 of this rock. So we’re talking about a large percentage of this Island.

Not wanting to venture just his (or his bank’s) money, McDougal arranged for two other wealthy investors to shoulder the risk. You might be familiar with one of them, he owns the Dallas Cowboys. They were promised huge returns and wound up suing him. But that’s another story. 🙂

This sleepy little Island was not excited about the prospect of turning into a rich person’s playground. If you think I’m overstating the latter well then know that the original sales material talked about “a marina, shopping centre, a ski slope—despite the fact that Campobello gets only an average of 12 inches of snow annually and its highest hill is only about 400 feet—a water slide and a 4,000-m airstrip.”

Larry Kuca was the point man selling the concept (also one of 15 convicted as a result of the Whitewater investigations). He attended a local Volunteer Firemen’s picnic and gave out 10 acres of land to any couple married within the previous 18 months. Locals didn’t mind that but weren’t going to stop fighting a marina which could interfere with weir fishing or a (*^$% airstrip.

McDougal and Kuca later said they realized they’d come in to the process a little too aggressively. All mentions of marinas and ski slopes etc., disappeared in the sales material. I have a copy of the revised brochure put out by their Campobello Company, Inc. and the Island would look a lot different right now if all those lots had been developed.

Mind you, buying 10 acres of land on a cliff looking over the ocean for $50,000 must have seemed inexpensive to the dozens of people who put down payments on their choice lots. Heck, getting a lot next to the golf course was only $10,500.

One of the many articles I looked at was written in the 80s by a really angry journalist in Arkansas. His biggest beef was that the Wall Street Journal and tv talking heads were making his State sound backward and corrupt. Why, he moaned, couldn’t they focus on the real issues which were in Canada. I think it was because the story was already so complicated that they couldn’t handle a new twist.

The Campobello Company, Inc. became defunct. The land, however, is still there and it’s still parceled in lots. I’ll talk about the organization which replaced the Whitewater era group in a future post and the impact that has had.

I can tell you now that much of the land is owned elsewhere. In fact, the largest landowner on this Island (with the exception of the International Park) is the Government of New Brunswick’s Surplus Property Division. This is what happens when you don’t pay the taxes owing. 🙂

Don’t think for a moment that some development didn’t occur on these properties. One, with two houses on it, went up for sale last summer. Got a spare $400,000?