On April 7, 1986, Madison Guaranty senior loan officer Don Denton has telephone conference with Rose Law Firm attorney Hillary Clinton. According to Denton, the two discuss transactions intended to provide commissions to Seth Ward for his role in Castle Grande deal. Hillary Clinton and her Rose law partners, Vincent Foster and Webster Hubbell, worked on Worthen legal contracts.
In May, An option agreement is drafted providing Ward with compensation for the future sale of property to Madison. According to Rose Law Firm billing records, the agreement is prepared by Hillary Clinton. Federal investigators would later determine that the option agreement was used by Madison to further conceal the sham Castle Grande deal.
In July 1986 Federal Home Loan Bank Board meets in Dallas to review Madison Guaranty examination. Jim and Susan McDougal are forced to resign from the institution.