McDougal Breaks Silence
Washington Post Staff Writer
Wednesday, March 24, 1999; Page A1
LITTLE ROCK, March 23 Susan McDougal broke her long and stubborn silence today, taking the witness stand for the first time to say she knew of no shady financial dealings by President Clinton and "did not hear anything untruthful" when he testified at her 1996 trial.
McDougal laughed, clutched her heart and dabbed tears from her cheeks as she answered an afternoon's worth of questions to defend herself against charges that she committed a crime by refusing to testify before independent counsel Kenneth W. Starr's grand jury investigation of Clinton's Whitewater land dealings.
Her determined defiance has made her a central figure in the lingering Whitewater saga and prosecutors say her intransigence has prevented investigators from determining whether the president lied under oath about his business ties.
McDougal has already spent 18 months in prison on civil contempt charges for failing to answer Starr's questions. She is now fighting criminal contempt charges arising from her same steadfast refusal to talk.
McDougal did not testify at her own fraud trial in 1996. She was convicted and sentenced to two years in prison, and has been defying Starr's prosecutors ever since, asserting that they do not want to hear the truth but are instead bent on pursuing a vendetta against Clinton.
Although she has given occasional television interviews from her prison cell, only today did she testify under oath, under questioning by her own lawyer. All along, and again in her testimony today, she has maintained that her silence was not intended to protect Clinton but, rather, was motivated by her concerns about the independent counsel's office. The questions by her lawyer, Mark Geragos, were designed to bolster her claim that she wasn't attempting to cover anything up.
The gentle questioning by Geragos, however, opened the door for prosecutors to have their first shot at questioning McDougal when the time comes for them to cross-examine her.
The questions were not remarkable; the fact that she answered them was. Shortly after McDougal took the stand, Geragos cut to the chase. Before delving into her marriage to James B. McDougal, before exploring the vast miasma that is Whitewater, Geragos asked her three straightforward questions -- first posed by Starr's office -- that she has refused to answer for more than two years:
"Did you ever discuss your loan from David Hale with William Jefferson Clinton?" Geragos asked, referring to a $300,000 federally backed loan to a company created by Susan McDougal. The loan, which formed part of the basis for Susan McDougal's fraud conviction, went into the McDougals' joint checking account and some of the proceeds ultimately benefited the Whitewater Development Corp., the failed real estate investment in which the McDougals and Clintons were business partners.
"I never discussed the loan with William Jefferson Clinton," McDougal said. The matter-of-fact answer was of some importance because Hale, who owned a lending company backed by the Small Business Administration, alleged that Clinton urged him to make the loan, something that Clinton has denied.
"Did you ever discuss Lorance Heights with William Jefferson Clinton?" Geragos asked, referring to a real estate venture south of Little Rock. Part of the proceeds of the $300,000 loan went toward a down payment on Lorance Heights. The Clintons have said they knew nothing of the land purchase.
McDougal said she might have mentioned to Clinton "in a social sense that I was working there." But she added that she never discussed "substantive" aspects of the enterprise with Clinton.
"Did William Jefferson Clinton testify truthfully during the course of your trial?" Geragos asked.
"Nothing he said was untrue to me," McDougal responded. In videotaped testimony played at Susan McDougal's fraud trial, Clinton denied any role in pressing Hale to make the fraudulent loan.
McDougal, 44, portrayed her late former husband as bent on getting back at the Clintons. She said the Clintons, and other family friends, abandoned James McDougal when he ran into legal trouble. Later, when he recovered from a stroke, he set out to get even.
She also said that she had become scared and mistrustful of Starr because he had tried to strike questionable bargains with several witnesses. "When a person just can't sit in this chair and tell the truth," she said from the witness stand, "that is a scary day."
Under the implacable gaze of U.S. District Judge George Howard Jr., McDougal not only broke her silence, she often talked on and on. Sometimes she broke down in tears as she remembered her younger days as the energetic and adoring wife of a manic-depressive entrepreneur.
At one point, when prosecutor Mark Barrett objected to a portion of McDougal's testimony, her lawyer played the moment for all it was worth. Geragos folded his arms and pointed out the irony that the government was objecting to the testimony of a witness that it had tried repeatedly to question.
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