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McDougal Testifies to Little

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  • Coverage of the McDougal Trial

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  • By Michael Haddigan
    Special to The Washington Post
    Friday, March 26, 1999; Page A4

    LITTLE ROCK, March 25 – Susan McDougal shrugged off a prosecutor's questions today about 1980s real estate and financial dealings with her ex-husband James B. McDougal, portraying herself as having little of value to offer lawyers for independent counsel Kenneth W. Starr in their investigation of President Clinton.

    In her third day on the stand and her second under cross-examination by Starr's prosecutors, McDougal continued to maintain she had little knowledge of the financial arrangements made by her former husband, who died last year.

    Confronted with information she provided to accountants in 1986 about McDougal's failed savings and loan, Madison Guaranty, McDougal said she was merely passing along information about Madison and its subsidiaries after her husband suffered a crippling stroke.

    "I was talking to Jim" and repeating what he said to the accountants, she explained. Her testimony often consisted of saying "I don't recall" and "I don't remember" about the couple's complicated business dealings.

    Susan McDougal is charged with criminal contempt and obstruction of justice for her repeated refusal to answer questions before the Little Rock grand jury investigating Whitewater. She has said that she would not testify because she feared Starr would indict her for perjury if he did not like her answers. Prosecutors are trying to show Susan McDougal had enough information to justify the grand jury's need to question her.

    The McDougals, who were divorced in 1990, were once partners with Bill and Hillary Rodham Clinton in the failed Whitewater real estate development on northern Arkansas's White River. The McDougals and former Arkansas governor Jim Guy Tucker were convicted in 1996 on federal fraud charges related to millions of dollars in small business loans.

    Prosecutors today began to show McDougal's 1996 interview with ABC. In her first question, interviewer Diane Sawyer asked McDougal what message she wanted to deliver on the program. After several awkward false starts, McDougal laughed and said: "That I hate the independent counsel and I want them dead and their children dead? That one?" The comment was never broadcast.

    Outside the courthouse, defense attorney Mark Geragos said McDougal will later explain the remark to the jury. "That was out of context in the outtake and you have to know what happened before she went on camera. And she'll explain that," Geragos said.

    U.S. District Judge George W. Howard Jr. dismissed jurors for the day at mid-afternoon after prosecutors encountered technical difficulties while screening the three-hour unedited tape.

    © Copyright 1999 The Washington Post Company

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