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Text of Susan McDougal Indictment

Monday, May 4, 1998

The following is the full text of the indictments filed by independent counsel Kenneth W. Starr against Susan H. McDougal on charges of criminal contempt and obstructing his investigation. See The Post's May 5 story for more details.

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF ARKANSAS
WESTERN DIVISION

UNITED STATES of AMERICA
v.
SUSAN H. MCDOUGAL

INDICTMENT

The Grand Jury charges:

COUNT 1
[18 U.S.C. 401(3)]
[CRIMINAL CONTEMPT]

1. From about May 7, 1996, to the present, a federal grand jury empaneled in the Eastern District of Arkansas (the "Grand Jury") has conducted an investigation to determine whether any individuals or entities committed a violation of any federal criminal law relating in any way to James B. McDougal's, President William Jefferson Clinton's or Mrs. Hillary Rodham Clinton's relationships with Madison Guaranty Savings & Loan Association ("Madison Guaranty"), Whitewater Development Corporation, or Capital Management Services, Inc., including any federal crimes that arose out of the investigation of the above described matters, such as obstruction of justice and perjury.

2. Defendant SUSAN H. MCDOUGAL was the former wife and business partner of James B. McDougal. From about 1982 to 1987, SUSAN H. MCDOUGAL and James B. McDougal were officers and owners of Madison Guaranty. From about 1979 to 1992, SUSAN H. MCDOUGAL and James B. McDougal were also business partners of William Jefferson Clinton and Hillary Rodham Clinton in the Whitewater Development Corporation.

3. On or about August 20, 1996, SUSAN H. MCDOUGAL was subpoenaed to testify and answer questions before the Grand Jury.

4. On or about September 3, 1996, in the Eastern District of Arkansas, United States District Judge Susan Webber Wright issued an Order granting SUSAN H. MCDOUGAL immunity for any testimony she provided before the Grand Jury, and requiring SUSAN H. MCDOUGAL to testify and answer questions before the Grand Jury. The Order provided in part:

    1. That SUSAN H. MCDOUGAL shall provide testimony and other information as to all matters about which she may be interrogated before the Grand Jury;

    2. That no testimony information or other information compelled under this order (or any directly or indirectly derived from such testimony or other information) may be used against SUSAN H. MCDOUGAL in any criminal case, except a prosecution for perjury, giving a false statement or otherwise failing to comply with this order.

5. On or about September 4, 1996, SUSAN H. MCDOUGAL appeared before the Grand Jury. At that time, SUSAN H. MCDOUGAL knowingly and willfully disobeyed and resisted the lawful order of a court of the United States. More specifically SUSAN H. MCDOUGAL refused to answer questions or provide testimony and other information as to all matters about which she was interrogated before the Grand Jury, in violation of District Judge Wright's September 3, 1996 Order. After being sworn, instead of answering the questions. SUSAN H. MCDOUGAL responded as follows:


    Q. [By MR. JAHN, Associate Independent Counsel] For the record, would you state your full name, please, for the court reporter?

    A. [By MS. MCDOUGAL] Susan Carol Henley McDougal.

    * * *

    Q. Can you tell us, ma'am, where were you born?

    A. I'd like to read a statement before we begin, if that would be okay.

    Q. You can read it at the end of the appearance.

    A. I would like to read it before we begin. I think the foreman can let me do that, if he will. Will the foreman allow me to do that?

    Q. Ma'am, ma'am, ma'am, you will be given ample opportunity--

    A. May I ask the foreman if he'll let me read this statement before I begin?

    Q. No, ma'am. No, ma'am. You are here to answer questions. You will be given ample opportunity--

    A. I'd like to read the statement. The foreman has the right to let me read the statement.

    Q. Ma'am, where were you born?

    A. [No response.]

    Q. Ma'am, where were you born?

    A. [No response.]

    Q. Where do you reside today?

    A. [No response.]

    Q. Are you employed?

    A. [No response.]

    Q. For the record, are you refusing to answer any questions, ma'am?

    A. I'd like to read the statement.

    Q. Yes, ma'am. And you'll be given an opportunity before your appearance is over. But right now, we need to ask you some questions, ma'am.

    A. I need to read it before we begin.

    Q. May I see the statement, please?

    A. No. I would like to read it.

    Q. Then I'm afraid that – well, if you would, we're going to ask you to step outside, ma'am.

    * * *

    DEPUTY GRAND JURY FOREMAN: Ms. McDougal, for the last several minutes in the absence of special counsel and in the absence of the court reporter, the Grand Jury met to consider what we thought was your request that you be permitted to give a statement that you have in your hand there. We saw our chore as two questions.

    We saw our chore of whether or not you are directed to answer questions from special counsel, and then we saw your question as maybe appealing to our discretion to permit you, outside and completely aside from Judge Wright's order, to give your statement.

    In answer to the first question as we saw, we relied heavily on Judge Wright's order, paragraph number 1, which said that "Susan Henley McDougal shall provide testimony and other information as to all matters about which she may be interrogated before the Grand Jury."

    A. Yes, sir.

    DEPUTY GRAND JURY FOREMAN: And we decided that that order did not give you the right to make a statement.

    A. Yes, Sir.

    DEPUTY GRAND JURY FOREMAN. It required that you answer questions. We proceeded then to consider the – a compromise situation, as we did not want to shut down this Grand Jury proceeding today. And the way that we saw that, we could either let you give your statement and run the risk of not getting any other information or we could let you read your statement and, in anticipation that you would not answer any questions, any further questions, we would only have the information that you chose to give us.

    A. Yes, Sir.

    DEPUTY GRAND JURY FOREMAN: We are not here to get biased information.

    A. Yes, Sir.

    DEPUTY GRAND JURY FOREMAN: We want the whole picture. So we had a plan to ask you, is it your intent to give the statement and then, in preclusion of special counsel's or special prosecutor's questions, but we decided we would not even ask you that because you could still shut down the proceedings by backing up on whatever answer you might give us.

    So we have decided, and I think it was a unanimous decision, to not give you the right to answer – to read your statement and that we would insist that the rules be followed that you answer the questions –

    A. Yes, Sir.

    DEPUTY GRAND JURY FOREMAN: – of special counsel. And then if you choose, at the end of the questioning, to read your statement, we would let you do that.

    A. I appreciate you giving it so much thought. It's very kind of you. I need to read the statement first, and the statement speaks for itself.

    DEPUTY GRAND JURY FOREMAN: No. No. No. You're not going to shut down –

    A. Yes, sir, I understand.

    Q. [By Mr. Jahn] Will you answer questions for us, Mrs. McDougal?

    A. I need to read the statement, sir.

    Q. Ms. McDougal, I am going to ask you a question. Did you ever discuss your loan from David Hale with William Jefferson Clinton?

    A. Will you let me read my statement?

    Q. Ma'am, the question has been posed to you. Will you answer the question?

    A. I need to read the statement.

    Q. Ma'am, did you ever discuss Lorance Heights with William Jefferson Clinton?

    A. Again, my answer would be the same for any questions that you ask me.

    Q. Well, one more question. To your knowledge, did William Jefferson Clinton testify truthfully during the course of your trial?

    A, My answer would be the same for any questions you ask me.

    Q. And you will not answer those questions?

    A. I need to read my statement.

    MR. JAHN: Okay. Thank you. Mr. Foreman, if you would, we'll notify the judge.

    GRAND JURY FOREMAN: We will be in recess.

    MR JAHN: If you will step outside.

    A. Thank you all again for considering it. I appreciate it very much.

All in violation of [18 U.S.C. 4010).

COUNT2
[18 U.S.C. 1491(3)]
[CRIMINAL CONTEMPT]

The United States realleged and incorporates herein by reference paragraphs 1-5 of Count 1 of this indictment.

7. After SUSAN H. MCDOUGAL'S September 1996 appearance before the Grand Jury, the United States located a record of a check dated August 1, 1983 in the amount of $5081.82 drawn on the James B. McDougal Trustee Account, payable to Madison Guaranty, and signed by SUSAN H. MCDOUGAL. The words "Payoff Clinton" are written in the notation section of the check.

8. On or about April 10, 1998, the United States directed SUSAN H. MCDOUGAL to return to Little Rock to testify before the Grand Jury during its April 23, 1998 session.

9. On or about April 22, 1998, in the Eastern District of Arkansas, Judge Susan Webber Wright confirmed that her September 3, 1996, Order compelling SUSAN H. MCDOUGAL to testify before the Grand Jury was still in full force and effect.

10. On or about April 23,1998, SUSAN H. MCDOUGAL appeared before the Grand Jury. At that time, SUSAN H. MCDOUGAL knowingly and willfully disobeyed and resisted the lawful order of a court of the United States. More specifically, SUSAN H. MCDOUGAL refused to answer questions or provide testimony and other information as to all matters about which she was interrogated before the Grand Jury, in violation of District Judge Wright's September 3, 1996, Order. After being sworn, instead of answering the questions, SUSAN H. MCDOUGAL responded as follows:

    Q. [by MS. MYERS, Associate Independent Counsel] Would you please state your full name for the record?

    A. [by MS. MCDOUGAL] Susan Henley McDougal

    * * *

    Q. Ms. McDougal, the last question pending was, do you understand that Judge Wright ordered you to come today and testify before the Grand Jury?

    A. I will not answer any question you make to me because I believe you're conflicted and you have no right to ask me.

    Q. Do you understand that Judge Wright considered that argument yesterday and rejected it?

    A. You do not have any right to ask me questions. You are totally conflicted.

    Q. Do you understand that, Ms. McDougal?

    A. You are conflicted and you should not ask me any questions.

    Q. Ms. McDougal, do you understand my question?

    A. Mr. Starr should resign. That's my only answer to you.

    Q. Ms. McDougal, are you refusing to answer my questions?

    A. I have told you I won't answer your questions.

    Q. Okay. I am going to hand you what's previously been marked as Grand Jury Exhibit 1892. And Ms. McDougal, this appears to be a check dated August 1, 1983, payable to Madison Guaranty from the Jim McDougal Trustee account and signed by Susan Henley McDougal. Since your last appearance before the Grand Jury in September of 1996, we have been able to obtain a copy of this check and confirm that it's your handwriting on the check. You signed this check, correct? Ms. McDougal, you signed this check; is that correct?

    A. May I go out and see my attorney?

    Q. Ms. McDougal, would you please answer the question first?

    A. May I go out and see my attorney sir.

    Q. Yes, Ms. McDougal.

    GRAND JURY FOREMAN: Yes, you may.

    A. May I take that?

    Q. No, you may not.

    A. 5081.82.

    (The witness was excused at 10:37 a.m. and was recalled at 10:44 a.m.)

    GRAND JURY FOREMAN: Ms. McDougal, you are just being reminded that you are still under oath.

    A. Thank you, sir. I won't answer your questions you ask me because I believe your office is conflicted and that you should not be investigating this.

    Q. [By Ms. Myers] Ms. McDougal, what did you mean by the notation "Payoff Clinton," on the check that's been marked as Grand Jury Exhibit 1892?

    A. I don't believe your office has the right to ask me any questions.

    Q. Judge Wright rejected that argument yesterday, Ms. McDougal. You've been ordered to come in here and testify truthfully today. What did you mean by the notation, "Payoff Clinton"?

    A. I think because you are so conflicted, it would be the honorable thing to do is to get someone else to investigate this. It would be honorable and right.

    Q. Ms. McDougal, – Ms. McDougal, I understand --

    A. If you really believe there's a crime, let somebody investigate it who might not be so prejudice.

    MS. MYERS: Okay. Ms. McDougal, let me ask the members of the Grand Jury, is there any member of the Grand Jury that has any questions about Grand Jury Exhibit 1892? Yes.

    GRAND JUROR: Can you tell us exactly what that check was for? It does say, "Pay off for Clinton."

    A. I would love to tell you. I would love to tell you everything I know about it, but not with these people running the investigation. I don't believe they're interested in the truth. I really don't.

    GRAND JUROR: Do you know who makes the ultimate decision of whether this is correct or not correct? Do you think it's Judge Starr or do you think it's the 23 members that are in here?

    A. I went to trial believing that that was true, and I was convicted and I was not guilty. And I can't believe that again because they brought prejudice[d] testimony up at my trial that was untrue. They put on David Hale, who lied at my trial.

    Q. [By Ms. Myers] Ms. McDougal – Ms. McDougal, the point the Grand Juror, I believe, is trying to make is, they make the decision. We won't make any decision about how any of this information is –

    A. But they only tell you what they want you to know. You don't know everything.

    GRAND JUROR: You are the witness. You are going to tell us what we want to know.

    A. But they only show you what they want you to see. That's what I'm afraid of. And they believed David Hale and they believed Jim McDougal, and they both lied to you.

    Q. (By Ms. Myers] Ms. McDougal, so you are refusing to answer the Grand Juror's question regarding what--

    A. They lied to you.

    Q. – the statement, "Pay off Clinton," means?

    A. I want you to know they lied to you.

    Q. Ms. McDougal, so you am refusing to answer the Grand Juror's questions?

    A. I told you I would not answer you. If you want to resign and you want to get an independent counsel to investigate this, I will answer their questions. But not this man. He has, from the first day, decided that he would do this. And it's been a long road for me, and I'm sorry to be so nervous and so scattered in what I'm trying to say to you. But I have to tell you from the first day with these people, all they wanted was something on Clinton.

    Q. Ms. McDougal –

    A. From the very first day.

    Q. Ms. McDougal –

    A. I'm happy to answer your questions. I'm sorry that I can't. But they're the ones who are in the way – not me.

    Q. Okay. Okay. Ms. McDougal, the reason that we're asking you questions about this check, and we have more checks that we could show you if you'd like to see those –

    A. I'll see anything you've got. I won't answer your questions.

    Q. The reason we're asking you these questions is because during the trial of the United States v. McDougal, Tucker, McDougal, the trial that you were just referring to, President Clinton testified via deposition during that trial and gave direct testimony that was to questions asked of him by Sam Heuer – you know Sam Heuer, correct?

    Are you refusing to answer my question?

    A. I am refusing to answer any question that any of the three of you pose to me. I would love to answer the Grand Jury's questions, but they don't have anyone in here that will take this investigation where it should go.

    MR. BARRETT [Associate Independent Counsel]: Mrs. McDougal, excuse me. You were just posed questions by two members of the Grand Jury. And if I –

    A. You know very well what you've done.

    MR. BARRETT: May I please finish?

    A. You know very well what you have done.

    MR. BARRETT: May I please finish? Earlier in the proceedings you said you'll answer questions from you-all, indicating toward the Grand Jury. When Ms. Myers was unsuccessful in getting you to answer any questions, she turned it over to the members of the Grand Jury. Two members of the Grand Jury asked you questions. Are you refusing to answer?

    A. Resign and I'll answer all their questions.

    MR. BARRETT: Are you refusing to answer the questions from –

    A. If Ken Starr will admit he has a conflict –

    THE REPORTER – Ma'am, if you'll just wait until he finishes his question before you answer, so I can write it down.

    A. I shouldn't have to listen to his sermons, though: do you think?

    THE REPORTER: I just have to write down everything.

    A. Please. What?

    GRAND JUROR: We're listening to your sermons and we've got some questions to be answered.

    A. You're right. I'm sorry, You're absolutely right. I'll listen to it.

    GRAND JUROR: This has been going on for two years, too, for us.

    A. It's been since 1985 for me. Okay? You think I don't want it over? You think I don't want to answer your questions? You think it's not serious for me? These people are wrong in what they're doing. They have been on this. And from the very first day when I told them, "Let me just answer – let me tell you what this check is about," they said to me, "Susan, we want a proffer from you. We want something on Bill or Hillary Clinton." That was at my very first meeting with them. And they have done this investigation exactly the way they wanted to do it.

    Q. [By Ms. Myers] Ms. McDougal, we're not –

    A. I won't answer your questions. That's it.

    MR. BARRETT: And we're not going to permit this usurpation of –

    A. No, because you don't want them to hear from me.

    MR. BARRETT: Mrs. McDougal, you have been posed questions by three members of the Grand Jury.

    A. You leave the room. You quit your jobs, and I'll answer – oh, I did it again. And I'll answer them.

    MR. BARRETT: You have been posed questions by three members of the Grand Jury that you refused to answer: is that correct?

    A. [No response.]

    MR. BARRETT: Let the record reflect the witness is not answering the question.

    A. Get another independent counsel and I'll answer every question.

    MR. BARRETT: Mr. Foreman, may this witness be excused?

    GRAND JURY FOREMAN: Yes, you may.

    A. I'm sorry. I'm sorry to all of you, I know you've put I in a lot of time and I have, too. And I'm sorry.

    * * *

    Q. [By Ms. Myers] Ms. McDougal, as you know, Judge Wright entered an order this morning regarding your appearance in the Grand Jury today, and I am going to read the order for the record. The order is encaptioned, "In re: Susan Henley McDougal, No. Grand Jury – GJ-96-3. Order.

    "The Coourt is informed that Susan Henley McDougal has, on this day, refused to testify before the Grand Jury pursuant to a grant of immunity. The Grand Jury has requested the Court to instruct Ms. McDougal of the implications of her refusal to testify, which include the possibility of a charge of criminal contempt.

    "The Court finds that Mrs. McDougal remains in contempt of court and has been in contempt of court since her initial refusal to testify in September 1996. Court's order compelling her testimony remains in full force and effect, and Mrs. McDougal is subject to all laws pertaining to her contempt.

    "It is so ordered this 23rd day of April, 1998," and it's signed by Susan Webber Wright, United States District Court Judge. During the lunch break, did you have an opportunity to discuss this order with your attorney?

    A. I got the order during lunch, and I want to tell you that I really have thought about it a long time. I really have thought about it. I've put myself in your position and I know how much work and how much time and how much of your life you've put into it.

    Have you ever thought about my time that I've put into it, too? I wouldn't do it if I didn't really believe what I was doing. I'm not covering up for anybody. If Bill Clinton is guilty of something, let him protect himself. I wouldn't do that to my family, to my mother and father, if I didn't believe that what I was doing was right. And I think if you people knew, if you – I think you're just like me, that you're good people that would do the same thing I did if you knew.

    * * *

    Q. Right now, I wondered if you could tell me about the things that are highlighted on page 2, what you know about Hillary Clinton's involvement in the Industrial Development Corporation property. Can you tell me what you know about Hillary Clinton's involvement in the Industrial Development Corporation property? Ms. McDougal, are you refusing to answer my question or are you just taking time to look at it?

    A. Can I just have a minute?

    Q. Sure.

    * * *

    Q. Now, let me ask you one more time. You've had a chance to look at the document. What do you know about Hillary Clinton's involvement in the Industrial Development Corporation Property?

    A. I've got to go talk to my lawyer. May I, sir?

    GRAND JURY FOREMAN: Yes.

    Q. (By Ms. Myers) Ms. McDougal--

    A. He said I could go.

    (The witness was excused at 3:03 p.m. and was recalled at 3:10 p.m.)

    GRAND JURY FOREMAN: I just have to remind you again that you are still, under oath. You may be seated.

    Q. [By Ms. Myers] Ms. McDougal, let me ask you one more time. What do you know about Hillary Clinton's involvement in the industrial Development Corporation property?

    A. My lawyer and I talked about it outside. And with your permission, I'd like to think about it overnight and come back tomorrow.

    Q. Ms. McDougal, the Grand Jury is not meeting tomorrow. I'd like you to answer today. Will you answer that today?

    A. No. I'm sorry. I didn't know you were taking a day off.

    Q. We're not done yet. One more. I'd like to show you what's been previously marked as Grand Jury Exhibit 1894.

    A. I'll be here next week, too. I mean, we could do it next week. I don't care. I'll be here whenever you want me to be here.

    Q. This is a copy of a – it's been previously marked as Grand Jury Exhibit 1894, and it's an article in today's Wall Street Journal. The article is titled, "When Susan McDougal Almost Talked" and it's written by Chris Vlasto. Have you ever spoken to Mr. Vlasto? Ms. McDougal, have you ever spoken to Mr. Vlasto?

    A. I am not going to answer your questions today.

    Q. Okay.

    MR BARRETT: May this witness be excused, Mr. Foreman?

    GRAND JURY FOREMAN: If you so desire.

    MR. BARRETT: Before that takes place, are them any questions from the members of the Grand Jury?

    GRAND JUROR: If she's not going to speak to us today, will she speak to us another day?

    MR. BARRETT: Well, you could pose that question to the witness, I suppose.

    A. They didn't go into the sort of detail the last time I was here with me.

    GRAND JUROR: I wasn't here the last time you were here.

    A. You weren't here?

    GRAND JUROR: No, ma'am.

    A. And I hadn't seen anything. And I just talked to Mark about it and he wants to talk to me. And I told him I would ask you if we could have that time.

    But you know how I feel about the office of independent counsel, so I don't want you to have your hopes raised that, you know, I'm going to come back and answer questions. So I don't want to mislead you. But I'm willing to talk to Mark about it tonight, and so that's it. That's all I can tell you.

    Q. [By Ms. Myers] Okay.

    A. I am not willing to answer their questions. I'll tell you that. Thank you very much. I'm sorry

All in violation of 18 U.S.C. 401(3).

COUNT3
[18 U.S.C. 1503]
[OBSTRUCTION OF JUSTICE]

11. The United States realleges and incorporates herein by reference paragraphs 1-5 of Count 1, and paragraphs 6-10 of Count 2 of this indictment.

12. SUSAN H. MCDOUGAL had knowledge of the Grand Jury's investigation.

13. Beginning on or about September 4, 1996, and continuing until the present, SUSAN H. MCDOUGAL has corruptly endeavored to influence, obstruct, and impede the due administration of justice by refusing to answer questions before the Grand Jury and providing evasive testimony to the Grand Jury.

All in violation of 18 U.S.C. 1503

© Copyright 1998 The Washington Post Company

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