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Whitewater Prosecution Witness Testifies to Aiding 'Political Family'

By Michael Haddigan
The Washington Post

The government's main witness in the fraud and conspiracy trial of Gov. Jim Guy Tucker (D) and President Clinton's former Whitewater partners yesterday surprised defense attorneys - and the prosecution - when he strayed from testimony he gave last week on an alleged financial scheme to benefit the state's Democratic "political family."

Former municipal judge David Hale said last week that he, Tucker and James McDougal hatched a plan over Tucker's kitchen table in October 1985 to "clean up some members of a political family." But during cross-examination Monday by a Tucker attorney, Hale testified that he's not certain when defendant James McDougal made the remarks.

"It could have been (at that meeting)," Hale said, "But it could have been at the next one. We had a lot of meetings during that time." Under questioning by defense attorney George Collins, Hale also said he didn't remember if Tucker was present at the meeting where he says the topic of the "political family" was mentioned.

Hale, who operated a Little Rock small-business investment company in the mid-1980s, is testifying as a government witness under a plea agreement with Whitewater Independent Counsel Kenneth W. Starr. Hale has pleaded guilty to two felony fraud charges.

Tucker and former Madison Guaranty Savings & Loan owners James McDougal and his former wife, Susan McDougal, are on trial on charges of conspiring with Hale to get $3 million in illegal federally backed small-business loans to finance a variety of real estate deals.

Prosecutor W. Ray Jahn said outside the federal courthouse later that Hale's testimony Monday differed from what Hale has been telling Starr's office for the last two years.

"We'll go back and try to explore with him in front of the jury what his memory is concerning those events," Jahn said.

Hale also was unclear on details of a trip he says he took earlier on that October day to see some land south of Little Rock that Tucker was going to buy from Madison. Hale also has alleged that then-governor Bill Clinton pressured him to make a $300,000 loan illegally to Susan McDougal.

Hale's is the only direct allegation of wrongdoing against the president, who is to testify by videotape in late April. The defense has argued that Hale has fabricated the story to make a deal with federal prosecutors.