Online NewsHour: Susan McDougal - Whitewater -- September 9, 1996

PRINCIPLE OR TACTIC?

SEPTEMBER 9, 1996

TRANSCRIPT

Susan McDougal went to prison. Her refusal to testify about the President's involvement in the tainted Whitewater real-estate deal has led to a contempt charge and a two year jail term. Mrs. McDougal claims it is a political witch hunt. Charles Krause is joined by Los Angeles Times reporter Sara Fritz to weigh the evidence.

JUNE 25: The Arkansas has been shaken by the tendrils of Whitewater. Tom Bearden reports.
JUNE 18: The Senate Whitewater committee issued its final report on their 14 month investigation.
MAY 29: An Arkansas jury returned guilty verdicts in the criminal trials of Arkansas Governor Jim Guy Tucker and Jim and Susan McDougal.
A complete listing of NewsHour segments on Whitewater.

CHARLES KRAUSE: Susan McDougal went to jail today. The former business partner of President and Mrs. Clinton has refused to testify before a federal grand jury about then Gov. Clinton's alleged role in illegal business deals. A judge ruled she was in contempt of court. This morning, McDougal surrendered to U.S. Marshalls in Little Rock.
SUSAN McDOUGAL: I'd like to say first that I don't hold any ill will against Judge Wright for ordering me to jail today. She did say in the hearing the other day that she believed that my reasons for not answering the questions were heartfelt, and she did give me a public hearing, which the Office of Independent Counsel fought tooth and nail to keep secret. And I think that's because they like to do their dealing in secret. They like to do their intimidations behind closed doors, and this is not anything new for them. You remember that they always wanted something on the Clintons. They've always asked that I tell something for any deal that they offered me. They did that with David Hale and they did that with Judge Watt and Don Denton and it's just not something that I can be a part of, and that was my reasoning for not cooperating with them. Finally, I feel that it's just something I decided I have to do for myself. It has nothing to do with anyone else. No one's asked me not to tell this story. It's just the fact that I can't trust them. I trusted them in the past, and I can't trust them. And I won't answer their questions. I know what they've done to me. I know that they've stolen my life, they've destroyed my life, and I just won't be a part of what they're trying to do.
CHARLES KRAUSE: Susan McDougal already faces two years in prison after her conviction last May on fraud and conspiracy charges in the first Whitewater trial. We get an update now from Sara Fritz, a reporter with the Los Angeles Times who's been covering the story. Sara, welcome. Let's begin with today's developments. Why did Susan McDougal choose to go to jail?
SARA FRITZ, Los Angeles Times: Well, Susan portrays it as a matter of principle, but I suspect it has a lot to do with legal tactics as well, especially related to her appeal. She's clearly saying that she's not going to tell her story under the current circumstances, the current offer that the Independent Counsel has made. She's using two tactics: one is a pretty common tactic these days, which is to put the prosecutor on trial. She's alleging that the Independent Counsel, Mr. Starr, offered her leniency only if she were to lie to provide information on the President. And secondly, she's screaming for sympathy. She's been convicted and sentenced to two years in jail. That's only four months less than David Hale got, and he admitted to masterminding a multimillion dollar conspiracy. And so she's saying to all of us, including the appeals judges, uh, this is unfair.
CHARLES KRAUSE: Now, if you boil all of that down, she has, in effect, said repeatedly that she believes that the special prosecutor, Mr. Starr, is engaged in a witch hunt both against her and against the Clintons. Do you see any sign of improper conduct?
MS. FRITZ: Well, obviously, being a Republican and an aggressive prosecutor, Mr. Starr is open to the charge of partisanship, but, no, I have not seen any sign of wrongdoing on his part.
CHARLES KRAUSE: Now, it's pretty clear that he's pretty determined to get her before that grand jury. What might she know that is so important to his case?
MS. FRITZ: Well, I think what he wants to know from her is the answer to the old question what did the President know and when did he know it? The President testified at her trial that he did not know anything about the improper $300,000 loan that she took out, or anything about the land that she bought with that money, even though for a time that land was a part of Whitewater Investment Corporation, which he was a part of. Uh, clearly, Independent Counsel Starr does not believe that he was telling the truth, and he thinks she can shed some light on that.
CHARLES KRAUSE: Now, in--today and over the weekend, both she and her attorney said that the Special Prosecutor's Office has offered her a deal, a lenient sentence, a more lenient sentence, if she will implicate the Clintons. Do you think that a deal, in fact, was offered?
MS. FRITZ: Well, I suspect she's talking about a deal that occurred, an offer that was perhaps made before her sentencing, before she got two years in jail as a sentence. These are always negotiations that go on with a wink and a nod and those sorts of communications in which both sides try to have deniability for what they say. And I suspect that when Mr. Starr says that no such conversation occurred, he can say so with a feeling that he's telling the truth.
CHARLES KRAUSE: Do you think that the Special Prosecutor's interests in--interest in Susan McDougal now signals that this investigation has turned toward the Clintons?
MS. FRITZ: Umm, it has turned toward a different part of the Clinton involvement here. It's clear after two and a half years that if Mr. Starr had any evidence of illegal--of legal or criminal wrongdoing by the President or the First Lady in the underlying case, he would have charged them, but now he's taking the next step, which is to look for a cover-up, and obviously he thinks that the President may have perjured himself in, in his testimony in Susan McDougal's trial, and so the question which he asks which is, uh--asked her that she refused to answer, which was, uh, did William Jefferson Clinton tell the truth, uh, when he testified in your trial, is an indication that they're looking for a cover-up here.
CHARLES KRAUSE: Now--but I must ask you, if she really doesn't know anything that would implicate the President, as she has also said, why doesn't--I mean, I realize you say she's bargaining in a sense but why doesn't she just go in, say that, and get it over with?
MS. FRITZ: Well, the truth is that she doesn't know what she knows because she doesn't know what the Independent Counsel knows, and it could be that some of the things that she could say could fill in some of the holes that he, he could fit it with other information he has. So he clearly wants to talk to her, and, uh, she knows that her testimony is valuable. He has not talked to her and only recently started talking to her ex-husband. And so there's a lot to be learned there.
CHARLES KRAUSE: Would you expect anything to happen before election day?
MS. FRITZ: Well, Mr. Starr has said, uh, plainly that he doesn't intend to do anything that would influence the election, and so even if he had information that he could use to charge the President or First Lady, it's clear we wouldn't see that before November.
CHARLES KRAUSE: And a last quick question: Without McDougal, if she chooses not to testify, where does the investigation go from here?
MS. FRITZ: Well, uh, it's obvious that they're headed toward some kind of cover-up--
CHARLES KRAUSE: Investigation.
MS. FRITZ: Yes, an investigation of the cover-up. Umm, it's--it's not clear that he needs her testimony to pursue what he intends to pursue here.
CHARLES KRAUSE: Sara, we're out of time. Thank you very much.
MS. FRITZ: You're quite welcome.

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