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Starr Aide Testifies at McDougal Trial

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  • Clinton Accused Special Report

  • By Pete Yost
    Associated Press
    Friday, March 19, 1999; Page A10

    LITTLE ROCK, March 18 – Kenneth W. Starr's deputy testified today that he had questioned the truthfulness of President Clinton and the first lady inside the prosecutor's office and had even drafted an indictment of Hillary Rodham Clinton.

    Asked if he had ever referred to the Clintons as "crooks and liars," W. Hickman Ewing Jr. said, "I believe I made that statement in-house . . . [but] I don't believe I used the L-word or the C-word. I certainly expressed internally that I had problems with some of their answers."

    Subpoenaed as the leadoff defense witness at the trial of Susan McDougal, one of the Clintons' former Whitewater partners, Ewing revealed some of the inner workings of Starr's office.

    McDougal, on trial for refusing to answer grand jury questions, is trying to demonstrate that prosecutors wanted to use her to get to the Clintons, whether or not there was sufficient evidence to charge them.

    She is charged with criminal contempt and obstruction of justice.

    While McDougal's lawyers called Ewing to the stand in an effort to focus on the conduct of the independent counsel's office, his testimony is the type of attention the first lady would like to avoid as she tests the waters for a possible Senate bid in New York in 2000.

    Ewing said that at dinner one evening with other Starr staff members, he graded the president and first lady on their responses to questioning by Whitewater investigators.

    "I said the president [got] about a 'C' and Mrs. Clinton about an 'F,' " Ewing testified. He said his remark followed his observing her during a July 1995 deposition, in which she said " 'I don't recall' about 50 times."

    He said he drafted the proposed indictment against the first lady sometime after September 1996. Early that year, her long-sought billing records from the Rose Law Firm mysteriously surfaced in the White House, revealing that she had worked on a failed land development that James B. McDougal, then married to Susan, was trying to use to prop up his failing Madison Guaranty Savings & Loan.

    Ewing said it is not unusual for a federal prosecutor to draft an indictment even if a charge is not brought. "You're always thinking about . . . what possible crime could it be," he said. He did not say what charge the draft included, but said he showed it to "a couple of people in the office."

    [The Clintons' private lawyer, David E. Kendall, said in a statement that Starr's office had "illegally leaked this information" much earlier, adding: "The mere fact that this prosecutor's office drafted a frivolous indictment three years ago has no significance whatsoever, except as a possible violation of the Paperwork Reduction Act of 1995."]

    Until the emergence of the billing records -- which had vanished after the 1992 presidential campaign -- Hillary Clinton never revealed that she had done any work on the McDougals' Castle Grande development, which federal regulators said was riddled with fraud.

    Once the billing records were turned over, the inspector general's office at the Federal Deposit Insurance Corp. concluded that Hillary Clinton created a real estate document that was used to deceive federal regulators. Castle Grande cost McDougal's S&L nearly $4 million.

    In April 1995 interviews with Starr's prosecutors, Hillary Clinton was questioned under oath about her firm's work for the S&L. "She was in conflict with interviews we had already done with several people in the Rose Law Firm," Ewing said.

    He also noted the president's changing responses to questions about whether he had asked James McDougal, the Clintons' other partner in the Whitewater land development, to hire the Rose firm to represent Madison Guaranty in the mid-1980s. Clinton was Arkansas governor at the time.

    James McDougal said Clinton made the request; during the 1992 presidential campaign, Clinton had denied it. But in sworn testimony to Starr's investigators in 1995, Clinton said "I don't recall" whether McDougal's account was accurate.

    Ewing made a number of concessions under questioning by Susan McDougal's attorney, Mark J. Geragos. For example, he acknowledged that prosecutors had not told grand jurors that James McDougal kept changing parts of his story as Starr's office zeroed in on Whitewater.

    And Geragos focused on the fact that even though prosecutors knew McDougal had changed his story, Starr told U.S. District Judge George Howard on the day McDougal was sentenced for his 1996 fraud conviction that he had testified "truthfully" and had "substantially aided our search for the truth." McDougal died in prison last March.

    © Copyright 1999 The Washington Post Company

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