LITTLE ROCK, Ark. -- Susan McDougal, whose steadfast refusal to answer prosecutors' questions about President Clinton put her in jail for 18 months, crisply and directly answered those very same questions yesterday in federal court, testifying that she had no knowledge of any wrongdoing by Clinton.
McDougal took the witness stand in her own defense at a trial in which prosecutors for Kenneth Starr, the independent counsel, have charged her with criminal contempt and obstruction of justice. The prosecutors contend that McDougal's stubborn refusal to answer questions before a grand jury on two occasions was calculated to obstruct their investigation into the complicated financial dealings of Clinton and his wife, Hillary Rodham Clinton, in Arkansas in the 1980s.
But her answers yesterday did little to illuminate one of the most puzzling aspects of the Whitewater investigation, why she would endure a lengthy prison term if she had nothing to conceal.
Under questioning from her lawyer, Mark Geragos, McDougal answered three of the principal questions that prosecutors had tried to put to her in September 1996 and April 1998.
Did she ever discuss with Clinton a loan of $300,000 made to her in 1986 by an Arkansas businessman who testified he lent the money at the urging of Clinton? Geragos asked.
"I never discussed the loan with William Jefferson Clinton," she replied.
Did she ever discuss a real estate development called Lorance Heights with Clinton? Perhaps in a social setting, she said, but "I certainly never discussed it in any substantive matter."
And finally, did President Clinton testify truthfully at her 1996 trial in which she was convicted of fraud?" As I sat there that day, I did not hear anything untruthful," she said.
Today, when Geragos completes his direct examination of McDougal, he is expected to ask her the fourth question she would not answer for prosecutors: What is the meaning of her handwritten note, "Payoff Clinton," on a 1983 check for $5,081.82?
Why then did McDougal refuse to answer prosecutors' questions if she had so little information to impart?
Because Starr, she said yesterday and has said in the past, was more interested in getting the Clintons than in getting to the truth. Indeed, much of her defense has been devoted to trying to put Starr and his tactics on trial. The transcripts of her grand jury appearances show that McDougal adopted a defiant tone, telling the grand jurors that they were being lied to by the prosecutors who only wanted to get information harmful to the Clintons.
Asked yesterday by Geragos why she chose the road of silence, she replied, "It was not an easy decision." She then began a long and rambling account of her life in Arkansas starting with when she met James McDougal, an Arkansas political fixture and sometime friend of Bill Clinton who eventually became her husband. The McDougals and the Clintons were partners in the failed real estate venture known as Whitewater, which was the initial focus of Starr's investigation before it expanded into numerous other areas, including the Lewinsky scandal.
McDougal listed several examples of what she contended were abuses by Starr's prosecutors that led to her defiance. In one, she said that she had received a telephone call from the wife of Chris Wade, who was a sales manager at Whitewater. McDougal said that Wade's wife told her that she believed Starr's prosecutors had seen to it that his prison conditions were made worse because they were unsatisfied with his testimony.
The prosecutors who tried unsuccessfully to question her in the grand jury may now follow up her answers with further questions. But it is also possible that they will simply concentrate on the straightforward facts of their contempt case: that a federal judge gave McDougal immunity and ordered her to testify and she refused to do so.
Hickman Ewing, a top aide to Starr, suggested in an interview outside the courthouse that McDougal's information was no longer useful or usable. "Unfortunately, the grand jury was not able to hear what she said," he said, noting that the Arkansas-based grand jury that had tried to question her had since disbanded.
Appearing jaunty at times but also tearful when she spoke of her husband, who died in a federal prison last year, Susan McDougal said he had once "loved Bill Clinton very much." But she said that James McDougal became deeply disappointed and angry with Clinton when he felt that Clinton had abandoned him during a bank fraud trial in 1990. After James McDougal was acquitted on those charges, she said, he looked for a way to get back at Clinton.
She testified that during the 1992 presidential campaign, James McDougal, from whom she was by then divorced, told her that he had received a considerable sum of money from Sheffield Nelson, a Little Rock Republican and Clinton political opponent, to talk to a New York Times reporter about the Clintons and Whitewater. She said he told her that he would "go down in history" and that he would "pay back the Clintons." Nelson was turkey hunting, his wife said, and unavailable for comment.
Susan McDougal's refusal to testify earned her a civil contempt citation and 18 months in jail. She was released after Judge George Howard Jr. ruled that her continued imprisonment would not force her to testify. Starr then charged her with criminal contempt. She was also sentenced to two years in jail on a fraud conviction but was set free by Howard, who ruled that keeping her in jail would aggravate a serious spinal condition. The current trial for criminal contempt is before Howard.
Pub Date: 3/24/99