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THE WHITEWATER VERDICTS
MAY 28, 1996
TRANSCRIPT
Following eight days of deliberation, the jury in the Whitewater criminal case returned 24 guilty verdicts against the three defendents. James and Susan McDougal, as well as current Arkansas Governor Jim Guy Tucker, all face prison terms for defrauding $3 million from two federally-backed financial institutions. Elizabeth Farnsworth discusses the verdicts and what they mean with Los Angeles Times reporter Sara Fritz.
ELIZABETH FARNSWORTH: The Little Rock jury deliberated for six full days before returning today's guilty verdicts. Afterwards, Whitewater prosecutor Kenneth Starr spoke to reporters in Washington and praised the jury for its hard work.
KENNETH STARR, Independent Counsel: For the jurors to set aside whatever may be happening in the public domain and to try as best they can to do their duty as God gives them the light to see their duty and to act on that duty, this really is a vindication of a justice system that ultimately depends upon what the jurors, themselves, describe as integrity.
ELIZABETH FARNSWORTH: Defendant James McDougal was a partner with President and Mrs. Clinton in the failed Whitewater Land Development Project in Northern Arkansas. He was asked if the President's videotaped testimony had failed to register with the jury.
JAMES McDOUGAL: Well, I don't if they didn't believe the President. Maybe they didn't believe me. I don't know. Uh, I don't want to cast dispersions any way or blame on anyone. I, uh, came in here to face it. We didn't put on a defense. That was our best judgment. Perhaps we were wrong there. Again, let me say to everybody in the press, thanks for treating me so well. I'll miss you.
ELIZABETH FARNSWORTH: We get more on the verdicts now from Sara Fritz. She has been in Little Rock covering the trial for the Los Angeles Times. Thanks for being with us, Sara. Summarize for us the charges--the charges against the three defendants and the verdicts.
SARA FRITZ, Los Angeles Times: (Little Rock) Well, the verdict was guilty on virtually every count, and what they were found guilty of was conspiracy and fraud primarily. They were accused of being involved in a scheme that was worth about $3 million to defraud both two federally-backed institutions, umm, Madison Savings & Loan, which was owned by Jim McDougal, and a small business investment company which, from which loans were federally insured.
ELIZABETH FARNSWORTH: What was the reaction in the courtroom? Set the scene for us.
MS. FRITZ: Stunned silence. I think it's fair to say that no one in that, in that courtroom, not even the prosecution, expected such a sweeping verdict, so many guilty counts, so many counts to be declared guilty. We could not see from our vantage point the, the look on Jim and Susan McDougal's faces, later on they made statements of resignation but there was a real strong grimace on the face of Governor Jim Guy Tucker, who not only risks going to jail but also if his conviction is held up on appeal will have to resign his office.
ELIZABETH FARNSWORTH: What did you mean when you said statements of resignation?
MS. FRITZ: They said that they were angry about the verdict but they accepted it and they understood that the jury had worked hard on this.
ELIZABETH FARNSWORTH: I think there were 24 guilty counts--guilty verdicts on 30 counts, right?
MS. FRITZ: On 30 counts.
ELIZABETH FARNSWORTH: So this is quite a victory for the prosecution.
MS. FRITZ: Quite a victory. I think there's no question that political partisans everywhere will see this as a vindication of Kenneth Starr, the independent counsel, who's been somewhat embattled of late, and see it as a repudiation of the President, who was the star defense witness on behalf of these three defendants.
ELIZABETH FARNSWORTH: Do you think it was a repudiation? I know that President Clinton testified for the McDougals to counter-statements by prosecution witness David Hale. Does this mean that the jury believed David Hale and not the President, or is that a misinterpretation?
MS. FRITZ: I don't think that would be misinterpretation. The President was, in essence, the whole defense for these three people, his statement that this didn't happen, and clearly the jury did not agree with that. Whether, whether it was a vindication of David Hale I don't know. Certainly it should be noted that the President was not charged in this case and was only a defense witness, and in the closing argument, the prosecution made it clear that they did not believe the President was actually involved in this conspiracy.
ELIZABETH FARNSWORTH: Didn't the prosecution also make it clear that, that you could--they could have made this case even without David Hale, that it was--they could make it on the basis of the documents alone, or am I wrong about that?
MS. FRITZ: Well, that's what they said, but, uh, they chose to have David Hale on the stand, despite the fact that he had a track record as a con man and a liar. And it's easy to say that you could make this case without David Hale, but I seriously doubt whether that would have been the case.
ELIZABETH FARNSWORTH: And as you said, the defense did basically say you have to choose between David Hale and the President, right?
MS. FRITZ: Right.
ELIZABETH FARNSWORTH: So explain again the way that the President is--the way that the Clintons are tied into this, please.
MS. FRITZ: Well, actually, the Whitewater investment in which the President and Mrs. Clinton and the McDougals were involved is only sort of a side issue here, a tangential issue. There is one loan that was obtained from Capital Management Services, the small investment business corporation, which was misused. it was obtained by the McDougals under false pretenses and used for other reasons than were stated in the application. And some of that money went through the Whitewater bank account, and in addition, some of the land that was purchased with that money was held by the Whitewater Corporation for a time, but there was no testimony that the President or the First Lady knew anything about those transactions.
ELIZABETH FARNSWORTH: Nor was there any testimony of any wrongdoing on their part.
MS. FRITZ: Right.
ELIZABETH FARNSWORTH: You seem quite surprised, yourself. You've been watching this very closely, but you seem surprised.
MS. FRITZ: Very much so.
ELIZABETH FARNSWORTH: Sort of in shock.
MS. FRITZ: The, kind of the standard wisdom down here was that it would be a mixed verdict, that both Jim McDougal and the governor would get convicted on a few counts and that perhaps Susan McDougal might even be acquitted. That was sort of the betting that was going on among all the people who had witnessed this trial. And so the sweeping nature of this verdict was just stunning.
ELIZABETH FARNSWORTH: And all three face prison terms, do they not?
MS. FRITZ: They all do.
ELIZABETH FARNSWORTH: What have you heard about what happens next in this case specifically first? And then we'll talk about the wider Whitewater investigation after that.
MS. FRITZ: Well, there are some post-trial motions to be made and the defense will try to get some of the counts swept away by the judge. And then of course, there's the inevitable appeal, and that will take quite a long time, I imagine.
ELIZABETH FARNSWORTH: And what about the wider, the broader investigation by the independent counsel, what are you hearing about that now?
MS. FRITZ: Well, it's interesting. Ken Starr in that statement that you ran said he was encouraged by this verdict. And I can imagine that he was encouraged, that this will encourage him to redouble his investigation. There are several things he has yet ahead of him. One is a trial coming up later in June which has to do with contributors to President Clinton's 1990 gubernatorial campaign, and they are charged with illegally laundering money to give to the President or then-Governor, and then of course, the big thing that Starr has on his plate is the investigation of the Travel Office matter in which the first lady is accused of lying to investigators about her role in the firing of people in the White House Travel Office, and that is probably at this point the liveliest part of the Whitewater controversy.
ELIZABETH FARNSWORTH: So Sara, summarizing, we have just a little bit of time left, what is the significance of this today?
MS. FRITZ: Well, I think it has significance on two levels. One is the political significance. This is an election year, and for the President to--for this case for his investment partners to be convicted in such--in a case in which he testified and testified to their innocence is a big political setback for the President, and this investigation has become very politicized, and so it's seen as a victory for the independent counsel as well. But on, on the legal level, the significance is that there's going to be more Whitewater investigations and more intense Whitewater investigations in the future.
ELIZABETH FARNSWORTH: Thank you for being with us, Sara Fritz.
MS. FRITZ: You're quite welcome.
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