By Susan Schmidt
The late James B. McDougal, in a posthumous attack on his former Whitewater business partner President Clinton, charged in a memoir released yesterday that Clinton lied under oath during McDougal's 1996 bank fraud trial and agreed mid-trial to pardon Susan McDougal "if you all hang with me."
In what amount to accusations from the grave, McDougal claimed in his book "Arkansas Mischief" that he paid Clinton $2,000 a month in cash early in his second term as governor of Arkansas and asserted that a fraudulent federally backed loan from convicted businessman David Hale went to the benefit of the Whitewater venture jointly owned by the McDougals and Clintons.
McDougal, who suffered from artery disease, died two months ago in prison. His book, published by Henry Holt & Co. and coauthored by Boston Globe reporter Curtis Wilkie, chronicles his long association with Bill and Hillary Rodham Clinton from their earliest days in Arkansas politics to their eventual falling-out. A bitter McDougal charged in the book that the Clintons "pitched aside" their old friends and "diminished themselves through a string of lies."
The book's most sensational allegations flatly denied by the Clintons' lawyer David E. Kendall center on the president's videotaped testimony of April 28, 1996, when he was called as a witness for McDougal in the trial that ended with McDougal's conviction. Clinton testified that he had not discussed the fraudulent $300,000 Hale loan to Susan McDougal. But, repeating a charge he made to the grand jury before his death, McDougal wrote in the book that Clinton had in fact done so. And, wrote McDougal, Clinton borrowed $25,000 from McDougal's Little Rock savings and loan, though the president denied in his testimony ever taking a loan from the thrift, Madison Guaranty.
Clinton provided the taped testimony during a White House session attended by lawyers and the McDougals. Afterward, wrote McDougal, as participants milled out of the Map Room, Clinton tapped his shoulder. "He wanted to talk privately. We moved out of earshot of others," wrote McDougal.
The president asked how his old friend and his former wife, Susan McDougal, were holding up through the ordeal of the trial, in which McDougal maintained that Clinton had no involvement in improper loan deals. McDougal said he replied: "'I'm willing to stick with it, but if it doesn't work out, or whatever, can you pardon Susan?' . . .
"'You can depend on that,' Clinton said quietly.
"I injected a bit of humor. 'Like I say with all lawyers, I mean promptly?'
"He grinned and nodded. 'If you all hang with me I'll do it.'"
The McDougals were subsequently convicted. But soon after, James McDougal became a cooperating witness in independent counsel Kenneth W. Starr's Whitewater investigation. Susan McDougal, who remains in jail and has not received a pardon, has refused to testify about the Clintons before a grand jury. McDougal said he never told Starr's office about the pardon offer. "No one asked me," he wrote.
Kendall, who was present at the White House along with Starr's prosecutors when Clinton testified, said yesterday that McDougal's story "is absolutely false."
"I was with the president every nanosecond he was in the presence of Mr. McDougal precisely to assure that no one could ever credibly make an outlandish allegation like this. It did not happen," Kendall said.
Kendall added, "There's no point in responding to each of the other scurrilous falsehoods in Mr. McDougal's book, however much they may hype sales. Many of them (for example, the statement that the president knew about the David Hale loan to Susan McDougal) are directly contrary to Mr. McDougal's sworn testimony at his 1996 trial. The others (such as the $2,000 a month cash payments) are simply made up out of whole cloth."
In the book, McDougal recalled Clinton unexpectedly appearing at McDougal's real estate office outside Little Rock one evening in 1986, where he encountered McDougal, Hale and Susan McDougal's brother Jim Henley. McDougal said Clinton asked Hale: "Did you discuss Susan's loan? . . . There's some land up in Marion County that can be used as collateral" a reference to the Whitewater property.
Hale, according to the book, replied: "That's been taken care of."
McDougal also alleged in the book that Susan McDougal admitted to him she had an affair with Clinton in the early 1980s. That, McDougal wrote, led him to a realization that hit like a "thunderbolt."
"How did Bill know about Susan's loan? Why did he care about the loan? . . . There could be only one conclusion: Susan and Bill had resumed their affair."
Susan McDougal has denied any sexual relationship with Clinton.
© Copyright 1998 The Washington Post Company