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Ex-Boyfriend Is Part of Case Against Steele

Julie Hiatt Steele Julie Hiatt Steele arrives at federal court in Alexandria, Va., Monday. (AP)
By Leef Smith and Patricia Davis
Washington Post Staff Writers
Tuesday, May 4, 1999; Page B2

Contrary to her testimony before two grand juries, Julie Hiatt Steele confided to a boyfriend in 1997 that she had known for years about Kathleen Willey's claim of being fondled by President Clinton in the Oval Office, a federal court jury was told yesterday.

The trial of Steele, 52, a peripheral figure in the White House sex scandal and the only person to be indicted in the matter, opened in U.S. District Court in Alexandria with prosecutors attacking her credibility. Steele is charged with obstruction of justice and making false statements under oath about conversations she had with Willey regarding the president.

Prosecutors said yesterday that Steele denied that Willey told her of the alleged incident when it happened in 1993 because she hoped to somehow profit from the story -- although they did not say how Steele's version would have led to such profit.

"Miss Steele betrayed her friend and betrayed the rules of law -- for money, notoriety and maybe for new-found friends," prosecutor David Barger said in his opening statement to the jury.

But Nancy Luque, Steele's attorney, said the prosecution's case revolves around the "false assumption" that Willey is credible. "There is a woman in this case that is not telling the truth. And it isn't Julie Hiatt Steele," Luque said.

Willey alleges that Clinton groped her in the Oval Office in November 1993, an allegation denied by the White House. Independent counsel Kenneth W. Starr's office contends that Steele lied when she told federal agents and two grand juries that she and Willey had not discussed the alleged incident at the time.

Yesterday, William Poveromo, 48, a Richmond television producer described as Steele's boyfriend at the time, testified that over dinner at her home in April 1997, Steele told him that Willey had confided in her shortly after the alleged sexual advance was supposed to have occurred.

Poveromo testified that Steele then asked him to keep Willey's allegations secret and that Steele was furious when, months later, he contacted Willey and asked for an interview. Poveromo said Willey never returned his call. Rather, he said, Willey called Steele and let her listen to the recorded phone message he had left. Then Steele called him, he said.

"She said, 'How could you tell Kathy this?' " Poveromo testified. "She was ranting and raving that I'd broken this confidence."

According to Steele, she first heard Willey's story in March 1997, when Willey asked her to lie and to corroborate her story to a reporter from Newsweek. Steele said that she agreed to lie to the reporter but that she later recanted when she realized Newsweek was going to print the story and include her name.

With their first witness yesterday, prosecutors began to present their theory that Steele changed her story for personal gain. A freelance photographer from Centreville, Gregory Edward Mathieson, told the jury that he was hired by the National Enquirer in August 1997 to escort Steele and two of her children to Florida, where she sold the tabloid a photograph of Willey and the president for $7,000.

Mathieson testified that Steele hoped to keep profiting from the picture and made a deal with him to try to market it worldwide, adding that she sold the photograph to Time magazine and to CNN. Each contract, he said, was worth several thousand dollars.

"Kathleen Willey's story was getting more noticeable, and [Steele] asked me if I wanted to market the photo around the world and asked me what I could get for it," Mathieson said. "She wanted to get the highest prices out there." One overseas publication had floated a figure of $100,000 for the picture, he said.

Mary Highsmith, once Steele's best friend in Richmond, described to jurors a "volatile" on-again, off-again relationship between Steele and Willey.

Before Highsmith moved to Colorado in the fall of 1996, Highsmith said, the three women gathered for a lunch at which Willey's story was raised in casual conversation. She said Steele did not seem surprised.

In a separate encounter, Highsmith testified, Steele told her that "she was afraid it would be to her detriment if she took a position against the president."

Steele is a divorced mother of three who if convicted could face as much as 35 years in prison. She has said that since she became swept up in Willey's story she has lost two sales and marketing jobs and has been supporting herself on home-equity loans and credit cards.

In the visitor's section of the courtroom yesterday, Steele got some support from Susan McDougal, fresh from her acquittal of obstructing Starr's investigation into the failed Whitewater land development in Arkansas. Steele had testified in Little Rock on McDougal's behalf.

"I came to stare 'em down for you," McDougal told Steele as they embraced. "It's about all I can do."

© Copyright 1999 The Washington Post Company

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