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Susan McDougal Jailed For Refusing to Testify

By Susan Schmidt
Washington Post Staff Writer
Tuesday, September 10 1996; Page A01

A defiant Susan McDougal reported to jail this morning vowing to keep her silence in the face of prosecutors' questions about the actions of Bill and Hillary Rodham Clinton in the Whitewater affair.

McDougal, a convicted felon who is being held in contempt of court for refusing to testify before a grand jury, presented herself to reporters on the courthouse steps today as a martyr who will not lie in exchange for leniency from independent counsel Kenneth W. Starr. She spent the day in a holding cell before U.S. marshals packed her off to county jail.

How long McDougal's silence will last was the question of the day. McDougal and her lawyers have engaged in a shifting legal and public relations strategy over the past week that has taken as many twists as the Ozarks mountain road up to the Whitewater development.

For the moment, she is resolute.

"I won't answer their questions," McDougal said today. "I don't trust them." Starr and his lawyers "have always wanted something on the Clintons," said McDougal. She fears she'll be charged with perjury if she doesn't tell the grand jury what they want to hear, she said.

This stance was something of a departure from last week, when McDougal was saying publicly that she found cooperation overtures from prosecutors "tempting." She said then that she didn't know of anything illegal done by the Clintons, but that she also did not think they had been "open" in discussing Whitewater matters.

In the past few days, McDougal has adopted the harder line against cooperation advocated by her lawyers. She appeared on "Larry King Live" Friday night, and, along with lawyer Bobby McDaniel, asserted that Starr was offering her a no-jail-time deal in exchange for incriminating information about the Clintons. That drew a sharp response from Starr, who issued a statement saying they were "brazenly trying to deceive the public" about discussions with his office and about McDougal's legal rights before the grand jury as a convicted felon.

McDougal is set to begin serving a two-year sentence Sept. 30 for obtaining a fraudulent $300,000 federally backed loan in the mid-1980s. President Clinton, who was Arkansas governor at that time, has been accused of helping arrange that loan, a charge he has denied.close Little Rock friend of the Clintons' to go to jail rather than provide information about them sought by Starr's office. Former associate attorney general Webster L. Hubbell -- first lady Hillary Clinton's longtime Rose Law Firm partner -- is serving a two-year prison sentence for defrauding his clients. Prosecutors said they were not satisfied that he had been forthcoming about the Clintons and their ties to the failed Madison Guaranty Savings & Loan.

McDougal has said publicly that she knows of nothing illegal done by either of the Clintons, who were partners in the Whitewater land venture with her and her ex-husband, James B. McDougal, onetime owner of Madison and now a convicted felon who is cooperating with Starr's inquiry. But her refusal to answer specific questions about the Clintons -- to the point of going to jail -- has only intensified interest in what she might know.

Making the rounds of the national television interview shows over the past week, McDougal said that at worst she was guilty of being a "frivolous" woman who blithely signed papers her husband put before her. Starr's office was deluged with callers today won over by her seeming sincerity and engaging, wide-eyed manner.

Some of Susan McDougal's $300,000 loan money ended up with the Whitewater Development Corp. Starr's office is trying to determine the truth of accusations that Clinton, while governor, asked businessman David Hale to make the loan to help out James McDougal. Susan McDougal told reporters that she was asked -- and refused to answer -- what Clinton knew about that loan when she briefly appeared before a grand jury last week.

Under the law, Susan McDougal no longer has a constitutional right to remain silent about criminal acts for which she already has been convicted. In demanding her testimony, Starr's office has granted her immunity from further prosecution related to those activities, but she still could face perjury charges if she does not tell the truth.

James McDougal faces up to 84 years in prison for his conviction on bank fraud and conspiracy charges. Susan McDougal's lawyer, Jenniffer Horan, today said prosecutors have set him up in a Little Rock apartment for weeks of debriefing. Susan McDougal, who said her ex-husband has urged her to cooperate, claims McDougal told her he will get his choice of minimum security prisons in which to serve a reduced sentence.

Last week she told ABC's "PrimeTime Live" that the pressure from prosecutors makes it "tempting" to cooperate, though "it would break my heart to have to do that." She said she would "try, with everything in me not to cooperate in the sense of telling them something that would ruin people's lives who I believe haven't done anything wrong."

She has wondered, she said during the interview, why the Clintons couldn't put the facts out "open and honest and simple and easy."

© Copyright 1996 The Washington Post Company

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