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McDougal Refuses to Testify Before Whitewater Grand

By Sara Fritz
Los Angeles Times
LITTLE ROCK, Ark.

Susan McDougal, a former Whitewater investment partner of President Clinton and first lady Hillary Rodham Clinton, refused to testify before a federal grand jury Wednesday about the Clintons' role in the celebrated case.

McDougal was promptly found in contempt of court and faces a sentence of 18 months. She already has been sentenced to serve two years in prison for her conviction earlier this summer in a Whitewater related case.

Afterward, McDougal said she was asked three questions in front of the grand jury before being ushered out for refusing to answer.

One question, she said, was: "Did William Jefferson Clinton testify truthfully at your trial?" She said the other two dealt with whether Clinton knew about a loan and property in which the Whitewater corporation had an interest.

Although in an interview broadcast nationally Wednesday night McDougal said that she believes the Clintons have not lied about Whitewater, her refusal to answer the question about Clinton's truthfulness is likely to be cited by his Republican critics as evidence that Democrats have been covering up details of the Whitewater saga. So far, however, Whitewater has not been an issue in the presidential campaign.

McDougal's lawyer, Bobby McDaniel, said that his client is being pressured by Whitewater Independent Counsel Kenneth W. Starr to "lie for leniency." She received the grand jury subpoena Aug. 20 - the day she was sentenced to two years in prison.

The president was a defense witness earlier this year at the trial of McDougal, her ex-husband, James B. McDougal, and then-Gov. of Arkansas, Jim Guy Tucker. All were convicted in connection with a conspiracy to bilk two federally backed financial institutions.

James McDougal recently agreed to cooperate with Starr and, as a result, his sentencing has been delayed until November.

Both McDougals have said repeatedly over the last few years that they had no information to offer that would incriminate the Clintons. They also have expressed feelings of contempt for Starr, whom they have accused of conducting a politically inspired witch hunt.

The McDougals were joint investors with the Clintons in an Ozarks resort development known as Whitewater. Investigators have long suspected - but never proved - that Whitewater was intended by the McDougals as a way to compensate Clinton for political favors.

U.S. District Judge Susan Webber Wright, who on Tuesday refused McDougal's request to quash the grand jury subpoena, found her in contempt of court shortly after her appearance before the grand jury. The judge decreed that she would begin her sentence for contempt next Monday.

Copyright 19,95, The Tech. All rights reserved.
This story was published on 9/6/96.
Volume 116, Number 39.
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