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Lawyer: McDougal Feared Being 'Pawn'

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Justice Dept. Argues Right to Probe Starr (Washington Post, March 9)

By Michael Haddigan
Special to The Washington Post
Thursday, March 11, 1999; Page A11

LITTLE ROCK, March 10 Susan McDougal twice refused to testify before the Whitewater grand jury because she feared independent counsel Kenneth W. Starr planned to use her as a "pawn" in his investigation of President Clinton, her attorney told jurors today.

On the first day of testimony in McDougal's trial on federal criminal contempt and obstruction-of-justice charges, attorney Mark Geragos said that McDougal never intended to obstruct justice and had a good reason for refusing to answer grand jury questions.

"What she had was a resolve that she was not going to be used as a pawn for somebody else to get the president and first lady," Geragos said in his opening statement.

McDougal, 44, one of Clinton's former Whitewater partners, faces two counts of criminal contempt and one count of obstruction of justice for refusing to answer questions in September 1996 and again in April 1998 before the Whitewater grand jury in Little Rock.

McDougal has already served 18 months in jail for civil contempt for defying an earlier judge's order to talk to the Whitewater grand jury. While she was still serving that term, she was indicted for criminal contempt and obstruction of justice for continuing her silence.

Throughout, McDougal has taken an aggressive line against Starr, and her lawyers have said they hope to use this latest case to put Starr's methods on trial.

It remains unclear, however, if U.S. District Judge George W. Howard Jr. will allow testimony from others who have criticized Starr, such as Monica S. Lewinsky and Julie Hiatt Steele.

Howard told jurors today that the trial could last a month. If convicted, McDougal may face an additional prison term to be determined by the judge and a $750,000 fine.

Geragos said today that Starr's prosecutors once told McDougal and her former lawyer in a conference call that she could avoid jail time on her 1996 Whitewater conviction if she supplied damaging information about the Clintons.

"She was told, 'You know who we want. You know what we want,'" Geragos told jurors.

Prosecutor Mark J. Barrett, a deputy in Starr's office, in his opening remarks said that no such statement was ever made by Starr or his aides.

"We vigorously and categorically deny that happened," he said.

Even if McDougal believed Starr was out to get the president, she had no right to defy court orders to testify before the grand jury, Barrett said.

"Not every strongly held belief is a defense for criminal actions," he said.

The indictment against McDougal included a grand jury transcript showing that deputy independent counsel Ray Jahn asked McDougal about business dealings she and her former husband James B. McDougal had with then-Arkansas Gov. Clinton and his wife, Hillary, in the 1980s.

The transcript also shows prosecutors wanted to know about a $5,081.82 check found in the trunk of a car in 1997. The check, payable to McDougal's Madison Guaranty Saving and Loan, bears James McDougal's signature and the words "Clinton payoff." The Clintons and the McDougals were partners in the failed Whitewater land development in northern Arkansas.

McDougal has said she refused to answer questions before the grand jury because she feared Starr's prosecutors would charge her with perjury if she didn't testify the way he wanted. She served time for civil contempt on her refusal to respond to questions in 1996. The criminal contempt and obstruction indictment came after she refused to answer questions a second time in 1998. The grand jury disbanded last May.

Howard presided over the 1996 Whitewater trial that led to convictions against the McDougals and then-Arkansas Gov. Jim Guy Tucker on charges they defrauded McDougal's Madison Guaranty Savings and Loan Association and the federal Small Business Administration.

Prosecutors charged in that trial that the three schemed to get $3 million in illegal loans, including the $300,000 loan for Susan McDougal from a small business investment company owned by David Hale. Hale, who was Starr's main witness, alleged during the three-month trial that Clinton pressured him to make the loan to Susan McDougal.

Susan McDougal served 3 months of a two-year sentence on her conviction on fraud charges stemming from the loan. Howard released her from prison early because of health problems.

James McDougal, who received a three-year prison term after agreeing to cooperate with the government, died in prison. The judge spared Tucker from jail time after doctors testified he would likely die in prison from a life-threatening liver ailment.

Howard said during an in-chambers hearing today that he would not allow Geragos to refer in his opening statement to Susan McDougal's claim that the charges resulted from prosecutorial vindictiveness.

McDougal was charged in California with stealing $50,000 from conductor Zubin Mehta and his wife Nancy while McDougal was a personal assistant to the conductor's wife. McDougal has contended that Starr pushed California prosecutors to file the charges against her, a contention Starr has denied. She was acquitted last November.

The grand jury court reporter testified for the government late today, and jurors heard an audiotape of the grand jury proceedings.

Geragos said that McDougal would testify in her own defense.

And Barrett said he planned to call as witnesses other Starr prosecutors, the grand jury foreman and two other jurors. "Every one of those jurors will tell you they wanted to hear from Susan McDougal," he told the six-man, six-woman jury selected today.

© Copyright 1999 The Washington Post Company

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