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McDougal Acquitted in Embezzlement Case

McDougal Whitewater figure Susan McDougal and fiancee Pat Harris are all smiles Monday, after McDougal was acquitted of embezzlement charges in Santa Monica, Calif. (AP)

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  • By William Booth
    Washington Post Staff Writer
    Tuesday, November 24, 1998; Page A2

    SANTA MONICA, Calif., Nov. 23—Susan McDougal, the reluctant witness and enigmatic partner of the Clintons in the failed Whitewater development, was acquitted today of unrelated charges that she fleeced famed musical conductor Zubin Mehta and his wife, Nancy, of $50,000 in a credit card and check fraud scheme.

    As McDougal beamed a broad smile and her eyes brimmed with tears of relief, the jury pronounced her not guilty of nine counts of grand theft, forgery and failure to file state income tax returns. The verdicts ended a 10-week trial that shed as much light on the wild shopping sprees and exorbitant spending of Los Angeles's rich and famous as on McDougal's sloppy accounting practices when she worked as a personal assistant and bookkeeper for the Mehtas in the early 1990s.

    The five-year-old case provided a resounding vindication for McDougal, 43, who has often portrayed herself as a martyr of overzealous prosecutors here in California and in Washington.

    "It's over!" McDougal yipped after the verdicts.

    But not exactly. For her part in the Whitewater escapades, McDougal was found guilty of fraud and conspiracy charges. She was sentenced to two years in prison, but was released early because of chronic back pain. In addition, she has served 18 months for refusing to answer questions put to her by independent counsel Kenneth W. Starr's prosecutors, accusing them of being biased and out to do whatever they could to destroy the Clintons.

    McDougal still faces criminal contempt charges for refusing to answer questions about the Clintons before the Whitewater grand jury.

    "There is a God," shouted her longtime fiance, Pat Harris, in the crowded hallway after today's verdicts. "Tell Ken Starr we're coming home [to Arkansas] and this time we're fighting back."

    "Everything that's happened to me in recent years has been about Bill Clinton," McDougal said later. "They want me to say things against Bill and Hillary Clinton. People say to me: 'Are you scared of Ken Starr?' He better be scared of me because I'm on my way back."

    The fraud and embezzlement case that ended today has largely been a sideshow in the Whitewater case and impeachment hearings -- but one filled with titillating details about how the wealthy Mehtas spent their money jetting plumbers from California to Italian villas and throwing around hundreds of thousands of dollars for koi ponds, wedding gazebos and dinners for their dog.

    In interviews after their verdicts, the jurors described McDougal as a sympathetic and mostly credible defendant who they felt suffered at the hands of overreaching Los Angeles prosecutors, wasting their time and taxpayers' money.

    Several jurors questioned why this matter ever went to trial, and described L.A. Deputy District Attorney Jeffrey Semow's case as weak, disjointed and without solid foundation.

    "The whole case fell apart," said jury foreman Rufus Gifford, a young actor. "It didn't make any sense." Asked if it should have been presented at all, Gifford said no.

    Another juror, college professor Nancy Nieman, said, "I don't know how this got through the system." Asked if she thought Starr's office had anything to do with encouraging the Los Angeles prosecutors to pursue the case, as McDougal has claimed, Nieman said, "In retrospect, you do have to ask yourself that question."

    McDougal moved to Los Angeles in the late 1980s with her boyfriend, Harris, who worked briefly for the Mehtas before McDougal took over, serving as a glorified go-fer and later as bookkeeper for the family's accounts and Nancy Mehta's side business renting a handful of exclusive Los Angeles homes to actors and others.

    The prosecution contended that McDougal was a wily con artist who, after her life as a relatively well-to-do wife and partner of the now-deceased James B. McDougal back in Arkansas, could not readjust to living within more modest means in Los Angeles. As a result, they alleged, she began to dip into the Mehtas' money, forging checks and using the Mehtas' credit cards to buy herself and Harris plush vacations and luxury items.

    But as much as anything, the trial hinged on the unusual relationship between Nancy Mehta and Susan McDougal, who were, by all accounts, extremely close until their falling out. The pair lunched, shopped and traveled together often; McDougal moved for a time into the Mehtas' Brentwood home; she dyed her hair blond like Nancy Mehta and wore Mehta's clothes.

    McDougal maintained the entire case came about because she tried to pull away from Nancy Mehta, whom she described as a controlling and manipulative friend and employer who used her money to keep friends and family dependent upon her.

    Reached at home after the verdicts, Mehta had no comment, except to say that "I thought that the evidence was very clear, and if you were there and paying attention then you should have some comments of your own."


    © Copyright 1998 The Washington Post Company

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