once upon a time in arkansas
interview: bill henley
The brother of Susan McDougal, Bill Henley was an Arkansas State Senator and sold real estate for Jim McDougal, through a subsidiary of Madison Guaranty.

Q: What did your sister see in Jim McDougal do you think?

A: On the surface, I think you could say that he was not appealing, he was not attractive. You would, if you just looked at him, you wouldn't believe that there was anything there. But after you got to know Jim McDougal just a short while, this man had a great depth to him. He he had vision. He pulled people to him. He made people trust him. He had a gift for, for giving new vision each individual that he met. Obviously I did not think it was the right thing for my sister. In fact, I told her so. I told her why are you going to throw your life away on this old man?

Q: What was the nature of his charisma? Was it spiritual? Was it political? Was it intellectual?

A: It was a depth that we were not accustomed to. He had been all over the world, he had worked with Fulbright, Senator Fulbright in Washington as his chief aid. He was a great friend of Bill Clinton's, he was a great friend of Jim Guy Tucker's. He had been all over the world and done a lot of things. And not spiritual, but a depth that attracted you to him because he was very verbal. And as Susan has said in the past, he spoke like a book.

Q: It was 1973...Had your family, by the way, been very political?

A: Absolutely not. We may have known who was the governor and who was the attorney general of the state. We may have known our congressman at the time and maybe our two senators of the state of Arkansas. But to know who was in the the Congress in the, northwest part of the state was not something that any of us would have known. So Bill Clinton was just another name to me.

When we went to their wedding, for instance, it's a very interesting story. Jim was developing some property outside of Little Rock, in a little small, community. And it was just kind of a very small house. I think it was about two or three rooms and he had fixed it up to live close to the property. And, they erected this archway that was, I thought, hastily developed and not many flowers and we'd drive up to this-- And we'd get the directions, we'd drive up to this cabin, this place.

And there are a lot of people standing in the front yard. There wasn't really very much grass in the front yard. It was Bill Clinton and Hillary and Jim Guy Tucker and his wife and the lieutenant governor, a former lieutenant governor, Bob Riley and, and Claudia Riley. And he's the one actually performed the service.

Q: And what was it that Jim McDougal brought to the table for those folks, for the movers and shakers politically? He, he himself held no direct political power. What did he offer them?

A: Jim had a gift for seeing the things that no one else there saw. In my opinion, and later on in this story, I got to know Bill Clinton fairly well. And I got to know the Rileys really well. But Jim McDougal had a gift of seeing things that none of those people ever saw. And they were attracted to him because of his gift for seeing those things. He was, he was not one to tell a joke, but he could find humor in the smallest things and he was so quick witted. This man had a genuine gift for drawing people to him.

Q: As someone who has had to contemplate Jim McDougal from various different perspectives, what was he like? Politically.

A: Jim McDougal was a barn burner.

I've never seen someone who could make a speech like Jim McDougal. He could captivate a crowd. He knew enough about the history to where he could fall on his, on his knowledge of history and bring people to a fever pitch about labor about the things that the Democrats had done over the years for this country. And, like no one else.

And I saw Bill Clinton and I saw many other people who are good speakers, had a great command of maybe statistics and those kind of things. Jim McDougal knew the history of the Democratic Party. Knew the heart and soul of the people and he was able to draw that out in a crowd.

Q: And he was able to convey it. Do you think it was because he really passionately felt?

A: I absolutely did at that time. I believed and I don't think anyone ever doubted that Jim McDougal felt it. And that's the reason he was running. I don't believe Jim McDougal had a passion for money. Money was not what he was after.

Q: What was he after?

A: I think he was a master of the art of the deal. He wanted to make deals and he wanted them to work. And he was willing to include anyone and everyone that was close to him in his deals that he felt like would work.

Q: And he saw it as including his friends in a good thing....?

A: Exactly. He wanted the association. He felt that the association with Bill Clinton, the association with Jim Guy Tucker, the association he had with Fulbright. And he loved Fulbright and he would go visit him. When Fulbright would come to Arkansas, he would come and visit and Jim would bring him to visit with us.

Q: Describe to me what Jim McDougal was in young Susan McDougal's eyes.

A: He was a mentor. He was bigger than life. She had never, I think, experienced this kind of this level of thought, this unusual thought patterns that this man had. I think she was totally attracted to him and enamored with him. And I think in a way loved him.

Q: What was the nature of the dream, if you will, that he held out for the two of them, for their lives together?

A: I'm not sure that there was ever a long range vision ever portrayed. And for Susan, that was not even the attraction. They would remodel a house in a great neighborhood and the next thing you know that Jim would decide that he wanted to move and they would sell the house and everything they had done for months and years and sell the house and move somewhere else and start all over again. It was never a matter of a long range plan. It was a never a matter of achieving any great places. It was a matter of living life everyday and living it to its fullest. And that's what Jim McDougal made, not just Susan, but most of the people around him feel at that time.

Q: He promised it would be interesting.

A: It was interesting.

Q: When she became his sort of business partner, What was her role?

A: I don't think anyone had equal status with Jim McDougal on any business deal, any deal that he put together. Everyone played second fiddle or maybe mentioned some things that they saw or may think that should have been done. But, but not too much. Because Jim McDougal was obviously the one that came up with the deal, he was the one that always made the deal work, he was the one that had the experience. She was being tutored by Jim McDougal. To take care of advertising, to care of other things like building a house and the decoration and the colors and those kinds of things.

And she was very careful not to step over into his domain because he was very protective of certain elements of that.

Q: He did make a deal a minute and he was constantly in search of his next quest and having accomplished that, moving on to the next one or two or three. Many of them did work out didn't they?

A: Everything he did was always finished. Everything he did was always done well. Everything he did, everybody was always paid. There were no losers. Up until he got into the S&L business and Susan had no reason to doubt it. And she had no responsibility in the S&L. She was not a director, she was not a paid employee. She simply did the advertising for the institution. And your question about did she have an inkling? Jim McDougal started, about the time that we was running for Congress.....he began to have major mood swings.

Even his campaign workers remarked on how vast his mood swings would be from one day to the next. I don't think she could tell anything was any different because of the mood swings were always so far down and so high up.

Q: And if on the good days he was the world beating Jim, the charismatic Jim, the knowing and achieving Jim McDougal what was he on his down days, the deep despair?

A: Total seclusion. He would sit in his apartment. In the final days, sit in his apartment in the dark. One chair in the middle of the room. Much like a Howard Hughes type story. One table on one side and one cigarettes in on one side and his favorite candy on the other and he would watch television. And he would not move and he would not open the door. And he wouldn't answer the telephone. And he would brood.

Q: It must have been frightening for Susan.

A: She's a very strong woman. And she kept thinking that something would happen that would level everything out and she kept hoping and trying and wanting it to work. Because her basic motivation in life is for everybody to be okay. She took care of my brothers and sisters when my mother became a nurse and started going to work at six o'clock in the morning. Susan would actually get up and help get the kids. She had three kids under her. Paula and David and John. And she would help them get dressed and get them off to school.

Q: Susan -- did she pretty early on recognize it as an illness with Jim?

A: He kept everyone at arm's length from the actual numbers with the business. Myself, I owned 12% of the stock in the S&L. I never asked and I was never told other than to see the S&L growing leaps and bounds and see the land projects selling on, on a rapid basis. And understanding and believing that this was a great opportunity. And not only that, but we were providing a great deal of opportunity to people who would not normally be able to afford land to build a house or to pull a mobile home on.

In Arkansas, the land is all owned by the timber companies. And, and so there's not a lot of parcels of land out there for individuals to buy. The working man. Jim was always trying to put a subdivision together for working people. Where they could afford it, where they could move their mobile home on it.

Q: Jim McDougal was something of a populist, right?

A: He saw himself as a Franklin Delano Roosevelt. In fact, I think he took on his traits. He even took on his accent from time to time. And, he saw himself as someone who loved people and he wanted the best for people. And he felt like that if he could provide that, then he was doing not only good business, but he was also doing something for the state of Arkansas.

Q: And was there such a vision involved in, for example, Castle Grande?

A: Castle Grande came in the final days and I think it was an attempt, by Jim to bolster the institution. See, at that point in time without our knowledge, without my family's knowledge, without Susan's knowledge, he had known that the examiners had been in that institution for a year. He knew that they had asked him questions that he couldn't answer. He knew there were problems with the a lot of the documents. He shared that only with the president of the S&L.

And Castle Grande, I believe, was a deal to bolster the financial corporation quickly bring profits into that and by means of that, making the S&L, the savings and loan, the parent institution more solid.

Q: Susan was oblivious to that?

A: Susan-- Let me just give you an example. When my two brothers, David and Jim, who were indicted for signing false documents in the final days of Madison before they took over Susan was present for that signing. She saw my brothers signing documents for a long range development, on a commercial property adjacent to the Castle Grande. I submit to you that my sister couldn't have known anything about the immediate taking over of the S&L and had my brothers sign those documents.

Q: She would never have let her brothers expose themselves.

A: Never.

Q: Maple Creek Farms. I've got to hear about that.

A: It was the flag ship. It was the thing that brought the S&L from the outskirts of Little Rock and these small farming communities and actually allowed us to branch in this old laundry building on a deserted part of town close to the Governor's Mansion. The only people that inhabited this place was the winos and the hookers. And Jim saw a place to remodel a laundry building and opening a branch of the S&L there and start this development south of Little Rock about 15 miles. And it was just like the biggest success that we could ever hope for.

In the initial days of Maple Creek Farms, we were selling more property than all of the rest of the developments around Little Rock put together in my opinion.

It was like a stampede, a land stampede. He had a vision. He knew what people were looking for in most cases. And he knew that they would drive south instead of where the whole town was moving west, Jim McDougal chose south. It was like a revelation and it worked.

Q: What was Jim's thought when he said, "I'm going to get an S&L. What was the rationale there?

A: The rationale was very simple. He had bought a bank in Kingston hoping to branch it to Harrison, Arkansas. And that had not panned out because of the strict banking rules. Reagan was in office, deregulation was happening. He found a small S&L in McCrory, Arkansas [Clears Throat] that was needing an owner. Only weeks away from bankruptcy simply because it was located in an area where there were no loans to be had or to be given out. He made his pitch to the powers that be. They decided to let him buy the institution and he finally had an institution by which he could form a subsidiary called Madison Financial Corporation and use a part of the assets of the S&L to buy that property. And that's what he did.

Q: And while that property itself was not necessarily a going enterprise and a great asset, it, it was a door opener.

A: It was the vehicle.

Q: Yeah.

A: It's the vehicle that he long awaited for. It was completely legal, absolutely up and up. It did exactly what he wanted to do and what he knew best was land and developing it. And this allowed him to put his money into an S&L, buy the majority of the stock branch it to Little Rock because the rules were so less stringent and start development property. It was a stroke of genius.

Q: So, very quickly on, he had at Little Rock one of the biggest S&L's in Little Rock without having to build and buy a Little Rock S&L.

A: Well, it didn't start off being the biggest. When he first got there he chose a spot that no one else would ever choose and that was what I was talking about a moment okay with the hookers and the dope addicts. In a place called down Main Street close to the Quapaw(sp?) area of Little Rock by which the Governor's Mansion is a couple of blocks away. But it's been taken-- It had been taken over by the slum area of Little Rock.

And Jim decided that was a place to be and so he was going to help develop or put an enterprise zone in between the location where he decided to put the S&L and downtown area. Because it was just a short jaunt and he knew that it wouldn't take much to develop that property. And if you go there today and you drive from downtown down Main Street, you will see nothing but thriving businesses all the way to the S&L. And that is a Jim McDougal, thought and he put together and he put the whole thing together. It was absolutely brilliant.

Q: And, from the moment you met him and the moment he came into ya'll lives, you must have felt individually, and perhaps even collectively, like this is a pretty interesting and quick ride you were on...

A: I went to visit them in Kingston, the little small town where he bought the bank and he had moved a modular home up there and put it on the side of a hill. And to make it look bigger, he had mirrored one whole side, one whole wall. And that little gravel driveway that overlooked this very lazy creek running through Kingston. And we were sitting there one day and he looked at me and said "Have you ever thought about running for office?" And I said "No, I-- That's the most ridiculous thing I've ever heard of. I don't think I'd ever even consider it. Far too busy raising a family and trying to make a business go."

At the time I owned a service station there in Camdon, Arkansas. But he planted the thought. He planted the seed. And then it developed from there. And before I knew itI'd [Sigh] I'd signed up to run against an incumbent who had been in the state senate there for 23 years...

But again, Jim McDougal saw something in the whole situation and he knew somehow. And from that grew to the point to where I ran for office and actually won election.

Q: You became an Arkansas state senator.

A: Yes.

Q: When Jim befriended Bill Clinton... What was the mutual attraction there-- Jim McDougal, Bill Clinton?

A: Bill Clinton was a Rhodes Scholar. He had a lot of potential. I think McDougal saw that right away. But I think they had great conversations and I think that they were-- Again, I think it stimulated Jim to talk-- He did not suffer ignorance well. He liked stimulating, intellectual conversation. He liked someone that would show him-- that would talk to him on his level. And I think he found that in Bill Clinton.

Q: Friendship. The four of them; Bill, Hillary, Susan, and Jim were close, they were social friends, they were just business acquaintances, they were? Describe them. Describe that circle for me.

A: Obviously Susan never met a stranger. She would tell a total stranger her entire life story at the drop of a hat. That's who she is. Jim McDougal did not fare well with shaking hands. He liked people, but he didn't like to talk to them. As I've said, he didn't suffer ignorance well and he didn't like long conversations that didn't go anywhere.

And Bill Clinton was a campaigner...To tell you that he was a campaigner is just not even in the ballpark. This man lived, ate, slept, drank, campaigning. And he had a photographic memory and he had a, a wonderful way of making you know that he was paying attention to you and looking into your eyes. And that's something Jim McDougal never had. Hillary, I don't think, it's my opinion, that Hillary probably didn't have much in common with most Arkansans when she first got there. I think she had Bill Clinton's vision. I think she wanted to, she wanted to learn. I think she had the desire to learn about what Arkansans think and how they think and how they do things.

But I think some of it bored her also. I think a lot of the Southern mystique bored her somewhat.

Q: One gets the impression that Hillary Rodham felt just a wee bit superior to Arkansas, Arkansans.

A: If I had to say what I thought I'd have to tell you that came across and I think that's the reason he was not elected after his first term. It was basically her demeanor and her perception by the general public. I don't know if it was a something that was honest. I don't know if she honestly believed she was better than them. But I think the perception was there and I think they felt it.

And I think there's even further evidence by the way she changed almost from night to day over a two year period and they ran again. She changed her name to Clinton and she started dressing more appropriately. At least for the South. And so I don't know if it was just a perception or if it was real.

Q: Was the change a calculated political strategy?

A: I don't think there's any question about that. It made sense. The had a political career left, it was in Arkansas. And it was his only venue. If she was the problem and polls said that she was the problem, then there's no question in my mind that that was going to change. Because her view was his view. Their goals were duplicated.

Q: Okay, they were friends. Why would Jim and Susan McDougal ask Bill and Hillary Clinton to be their business partners?

A: Susan McDougal didn't ask Bill and Hillary to become business partners. Jim McDougal asked Bill and Hillary to become business partners. And again, it goes right back to what I've said is his personality type. He felt that it was not the money. It was never the money. He believed it to be a successful deal. He would buy the property and then he would, as a gift as a memento of his friendship, he would allow people to come into that deal and with very little to say about it, very little to do with it. It was the way Jim McDougal dealt with it. He had it all under control. He had the plan from the beginning to the end.

All they had to do was sign the papers. And that's what Bill and Hillary did. They signed the papers and then the association of friendship, the business relationship is what Jim McDougal wanted from it. And not one other thing. That's what makes the story so hard to understand is that Jim McDougal never expected anything, never really asked for anything. Simply wanted their friendship.

Q: In other words, you're telling me that Jim McDougal didn't go partners on Whitewater with Bill and Hillary because he wanted something from them, but as a gesture of, if anything, beneficence. As a byproduct of this friendship with him.

A: It's a very small state. Limited population. And everybody knows just about everybody else. And especially in that arena, the community is very small. I think Jim McDougal simply felt like it was something that they could communicate about and have meetings about. And develop some money. Obviously it wasn't for the money in the deal. We found that it was a absolute failure. So if it was going to be one of those things that he was going to make a million dollars and give them a half a million for some future something down the line, that certainly didn't happen, did it?

This was a matter of Jim McDougal saying to people that he wanted to be really good friends with and to have association with, "Come and join me in this deal. Sign this document and I'm going to make this deal work."

Q: Obviously in doing so, he wasn't supposing that it wouldn't work out....

A: Jim McDougal faced every deal he made with what he called the worst possible case. And his scenario would be to them, and I can only suppose that this is the presentation. Basically is, well, we have $300 an acre in this property that's that's in this beautiful part of the Ozark Mountains with a, a winding white water stream through it. With so much frontage on the river. And at worst case, we can sell it for what we have in it. And at best case, we can advertise to people who want to retire and let them come down there and buy a piece of property and make a lot of money with it. And that was his presentation.

Q: You mentioned your brothers. In your mind, were they led astray by Jim?

A: My brother David and Jim signed documents that he [Jim McDougal] knew were illegal. And the name of that project-- He got them to sign that on May the 25th of that year. Called it Master Developers. Less than 30 days, he had my sister, Susan, go by and sign documents for Master Marketing at David Hale's office. For $300,000. And he did this with the full knowledge of trying to save himself.

Q: So what are you saying to me here, Bill? That this man who was not merely charismatic, but generous in your words and loving in your words and who had elevated, literally you and your sister and your brothers through his generosity and so on. Deliberately putting his wife and his brothers-in-law in peril?

A: The only way I can explain this is that when a man is desperate and drowning, he will grab onto the people closest to him and pull them under to save himself. He knew that my brothers and he knew that my sister would not ask any questions. He knew that they would be the most likely ones to sign documents that he would put in front of them without even reading them, without even knowing what they said because they trusted him implicitly without question.

He tried to save himself first with my brothers with Master Developers. By trying to bolster the profits so the financial corporation which would maybe cause the accountants that were there to not close the institution. And then with Susan by having her go over and get a Small Business Administration loan because she's a woman. And she came and brought the check to him and he tried to save himself on the people that trusted him the most.

Q: Susan had no inkling at that moment?

A: None.

Q: So what should I take from that?

A: I think you could put her in the same category with women who totally trust their husbands, who have, since the age of 17, had signed every document he had ever put in front of them and they had never been burned. Put them in the same group with people like Senator Fulbright and Governor Clinton and Jim Guy Tucker. He had always dealt honorably with and there was no reason to believe that he was being dishonorable now. I think most of us would have signed those documents if we had been put in that same place.

Q: How did he arrive at that desperate frantic place where he--

A: I think thing that scared him most was that he had lost his position. Not that he had lost the money. Not that the institution was going to be closed. But the fact that his reputation was completely going to be gone with that institution when it closed. That his standing with Clinton, his standing with Tucker, his standing in the community was going to be lost. That hurt him and scared him more than anything else on, on the planet. He may have thought that he could work it all out and everything in the end was going to be okay. He may have deluded himself to the point to where he thought he could salvage it.

Q: I gather the friendship didn't continue to flower between the Clintons and the McDougals. As a matter of fact, it rather went the other way.

A: I think that's the tragic part of this story. When Jim had nothing else to fall back on. When the S&L had closed, they had taken it over, where he was penniless, where only of the few assets he had left was this Whitewater development of which he'd poured his time and effort into and the money. I think iteven shows that he had paid most of the interest on the property. I don't think they found the compassion from their friends that they thought they should find.

Q: Do you believe that either Susan or Jim ever, ever confronted either Bill or Hillary Clinton about that?

A: I think I'd rather let Susan talk to you about that. She's the one that handled it and I don't want to misrepresent anything about those meetings.

Q: Susan, now finds herself in a most unwelcomed circumstance. She faces time on her conviction, the one by the independent counsel before a federal grand jury and a federal trial jury down in Arkansas. She faces charges out here in California. And before she even deals with that, she's doing what I gather is to be pretty hard time for not cooperating with Kenneth Starr. What is her state of mind?

A: Before I go into her state of mind, let me, let me say this. That if you agree with me that Susan McDougal can make one phone call to Kenneth Starr and not spend another day in jail, and I don't think there's anyone that's going to disagree with that. And if she made another phone call and sold her story like so many others have done, then she probably wouldn't have to work another day in her life. Then you have to ask yourself the question, why is this girl spent a year in some of the hardest time on the planet? They put her in this jail because it's the toughest one. It's the hardest one to do time. And put her in solitary confinement.

They kept her away from the other prisoners where she couldn't even develop for, for a large part of this time-- well, she couldn't even develop conversation. You have to ask yourself, what is the motivation? And I submit to you that the only motivation is this is a, an innocent woman who has been wrongly convicted, wrongly accused, and is not going to take part in a-- in a prosection that's sole purpose is to bring the presidency down. Susan McDougal has character beyond anything I've ever witnessed. I've never been so proud of any one person. She has the courage to stand up for her conviction and she will not participate in the bringing down and tearing down of other people's lives.

Q: The independent counsel, though, would say all he wants of your sister is her truthful testimony.

A: That's not what he asked her for when he tried to get her to plea bargain. I have a witness that was in the room in her attorney's room that's separate from her attorney or Susan, who witnessed Mr. Starr's office offering Susan McDougal global immunity if she could come up with something on the Clintons. That was his exact words. Now you can't run from those statements, you can't run from that deal making. They want the Clintons. They didn't want Susan McDougal from Camdon, Arkansas. They really didn't even want Jim McDougal.

This investigation had one focus and one only and that was to get the Clintons. Susan McDougal says, "I will not participate in this, in my belief unlawful prosecution. I will not allow you to use my words to ruin one more person's life in this matter." And many have been ruined because of this investigation. And dishonestly. And, and dishonorably.

Q: To the suggestion that has been forwarded in various quarters that Susan is motivated now by the promise of some future benefit, either a pardon or some financial arrangement or some future employment. Some sort of being taken care of for for not bolting and cooperating in the effort against the President and the First Lady. Your response to that.

A: Susan has been strip searched. Verbally and physically abused. Kept in isolation, sensory deprivation. Has been cavity searched, chained to commodes for hours at a time. Susan has faced the most heinous criminal acts that a, a prosecutor could to do a person who's only charge is and only reason they're in jail today is for contempt of court. There is not enough money on this planet, there is not a job on this planet. There is nothing that Bill Clinton could do for Susan McDougal to force her to go through the atrocities that she's faced nor put her family through.

Q: When we think of her in those terms as someone who is suffering as you put it for a principal, for a cause if you will, it makes me wonder what gesture, what word, she's heard from her friends, Bill and Hillary Clinton?

A: Susan is a realist and she understands the politics of this matter. She understands that Bill and Hillary Clinton can no more have contact with her or try to help her or give her something or give any of her family anything. Susan understands that if they tried to even contact her at this point, that it looks like obstruction of justice...... Again, this is not about Bill and Hillary Clinton. This is about a protest against the illegal independent prosecutor who has overstepped his bounds and ruined people's lives for no other reason but for his own motivation. And that is to get Bill Clinton out of the White House.

Q: Yet it could be suggested that counter to this portrait you hold for your sister as almost a martyr on behalf of a cause and ideal and a principle, a moral conviction, is the fact of her felony conviction. She is a convicted felon. The fact of her very real criminal charges she faces out here in California related to Zubin Mehta and his wife and their financial dealings with her. Damning facts, are they not?

A: Susan McDougal signed documents that her husband asked her to sign and she signed them, she will be the first one to tell you that she made tremendous error in not reading, not knowing what she was signing, and not paying attention to what was going on. There's no question. Susan McDougal will tell you that today. That in itself is her crime. She trusted her husband. More than she should have.

Let me go ahead and finish. I mean, let me take this all the way to its conclusion. She's in contempt of court because she's refusing to take part in this prosecution. From Starr's own office, they have admitted that they have put the pressure on her through the Mehta charges to give them information. Even their own documents filed with Susan Webber right in Little Rock state that because of future events, and they name this event, this Mehta charge, because of this future event, it very well may loosen Susan McDougal's tongue. And I paraphrase.

What more evidence do we need to know that this prosection in California is nothing more than throwing more mud against the wall and just seeing what will stick? The only evidence that the independent counsel could come up with at sentencing against my sister, that this was an ongoing distrustful person, was the fact that she under- estimated her resume when she turned it into Armand Hammer when she found a job here.

Q: You're not suggesting that the Mehta charges are contrived by the independent counsel as a means to--

A: I think they are absolutely working in conjunction. Even the prosector in here in California has said in court, on the record, that the feds thought it was time. They thought it was time to bring Susan out to California. He's made no secret of the fact that he is having communications with him.

Q: What is wrong with the prospect of going in and simply testifying yes, no, this is what I know, and telling the truth and getting out?

A: Susan has for the last year on every venue that she could possibly call in on, has stated that she knows of nothing the Clintons did illegally, knows nothing that they did wrong in this matter. She knows and most of the general public doesn't understand that a grand jury would indict, anyone that the prosecutor decides that they should indict.

Susan McDougal understands that her life was ruined by this whole matter and that many lives were not ruined. She is not going to subject herself to days of questioning without an attorney for her words to be turned into ruining other people's lives. That's how simple the grand jury situation is.

If the American people want to know Susan McDougal's testimony, she will swear it in front of the camera, in front of Congress and let them be the judge of what her testimony is. She's not afraid of testifying. She doesn't want it behind closed doors. She doesn't want it to, to not have an attorney with her when she's answering the questions. She's not hiding anything because they granted her immunity to testify. She simply does not want to become a part of this illegal prosection.

Q: Any questions you suppose that she wouldn't, in such a circumstance answer?

A: I think she'll answer every question posed to her. She fears no answer to any question.

Q: Take me back, if you will, Bill, to that, the moment Bill Clinton becomes president, Hillary becomes, First Lady. They move to to the White House. Everything in Bill and Hillary's past becomes a potential controversy. Jeff Gerth of the New York Times came down and began probing, And it looked like Jim McDougal was, if not helpful-- it looks like he did participate in that a little bit..... Help me to understand that.

A: While Clinton was still running for office. And you have to go back into understanding that Jim McDougal had been found innocent, along with my brothers. He was feeling, number one, invincible that an Arkansas jury, in front of an Arkansas jury. He was also feeling a great deal of anger and animosity toward Bill Clinton.

Q: Why?

A: He had helped Bill Clinton in retiring old campaign debt. He had helped him when he didn't ask anything for it. There was no such thing as a quid pro quo here. It was all done on the up and up. He had never asked Clinton for anything and now he was relegated to living in a mobile home in Arkadelphia, Arkansas. And as I've already told you, Jim, his, his major fear was losing his status. And he had lost everything. He no self-image to maintain. And he was seething in Arkadelphia, Arkansas while he saw this young man that he had so much taken such a part in running for president and not offering any kind of a hand to him.

He called me. I was living in California at the time. And he stated to me that he was going to talk to the New York Times and that Shefield Nelson, a rival Republican in the state, was going to pay him money to talk to Jeff Gerth. And then if I would back up his story, that he would share the money with me. He gave Jeff Gerth my name and number as a source to back up what he was saying to Jeff Gerth about Whitewater and the Clintons. And I never spoke with Jeff Gerth. This young man, running for the presidency of the United States, who grew up 30 miles from my home and had a chance to win and Jim McDougal wanting to do anything he could to sabotage that chance and I was not going to be a part of it.

You have to understand that Jim McDougal felt he had nothing to lose. In fact, Sheffield Nelson has actually played some of the telephone conversations on the air, on the radio during the trial. He taped Jim McDougal's conversations with him.

Q: Is there any evidence that Sheffield Nelson offered money?

A: I think if the $60 million that Starr had spent on investigating Madison Guarantee had been spent on, on Sheffield Nelson's bank accounts and Jim McDougal's deposits in the various places where they might do that kind of thing, it would be very simple to find that money.

.... I'll never forget one of the messages he left while he was trying to get me to confirm the Jeff Gerth story that he had given Jeff. He said- and this is Jim McDougal on my answering machine - he said, "You're missing your place in history of destroying this candidacy."

I've always wondered why, why would it have been so easy for then Governor Clinton, after Jim was found innocent, why he wouldn't have reached down and tried to help an old friend. So I offer no excuses for Bill Clinton. And I can almost understand the rage in Jim McDougal. But I refuse to be a part of that assassination.

Q: Did he ever ennunciate what it was he wanted you to confirm?

A: Times, dates, those kinds of issues.

Q: Falsely?

A: To tell you the truth, I had no recollection of the times and dates that he was asking me to confirm.

Q: Wasn't he sad and disappointed and even a little bit angered by something that happened in his personal life? His mother died and he expected some gesture from his old friend, Bill Clinton.

A: I have never understood why more wasn't done. So much could have been done and I think very, very subtly and without much, effort. But it was not done and I think it has caused the President and the First Lady a great deal of headache because it wasn't done.

Q: In retrospect of course, you could have helped him create a bigger snowball at the time. How close did you come to saying, "Yes, I will"?

A: When I got off the phone with him, I spent the next six hours in looking deep inside me about who I was and how I wanted to view myself. And I came to the conclusion that there was no way that I was going to become a Sirhan Sirhan to a fellow Arkansan who had risen from the depths of so much adversity in a small town in Arkansas. Who has a chance to become president of this United States. I would not do that and I made that decision then.

Q: Does Bill Clinton know this story?

A: No.

Q: What did Jim say to you when you refused?

A: We didn't talk for years.

Q: Is that so?

A: It's true.

Q: Do you think that his, I guess, ultimate gesture of separation from Bill Clinton, namely cooperating with, the independent counsel Ken Starr, do you think that is part of this same sense of anger and disappointment and rejection or is that the rather more practical business of dealing with a guy who has the next 80 years of your life in his hands?

A: It's either he began to get practical after his conviction-- He was looking at 80 years, a judge who hated him, from a prosecutor who was going to ask for the maximum and he was going to die in prison. And I know why he did what he did, and I also know that, that he's just as liable next week or next month or whenever he gets out from under this Kenneth Starr umbrella he will probably act much like Steve Smith who, who recently made a, a speech on the courthouse steps in Little Rock and talked about the fact that he just lied. Steve didn't say he lied. Steve said, "I've sworn silence for a year."

I believe that Jim McDougal, if he lives long enough, will get out of prison and will reverse everything he said about about the President.

Q: Really?

A: It fits his personality style, you see. Because he's the best I know at reversing his fields.

Q: Doing whatever you have to do, might be a way of saying I'm even willing to do something that has heretofore been anathema to me, namely cooperate. It doesn't necessarily mean lie. Did he ever specifically say I'm willing to lie?

A: We're trying to decipher the mind of a man that I don't think you and I could, either one of us, understand. And what he meant was that I will do whatever it takes, no matter what it is, to save myself. Just like he did when he had my brothers sign Madison Developers and my sister when she signed Madison Marketing. This man will do whatever it takes at this point, he has no soul. He has no character left. He will save himself.

Q: You'll forgive me asking this, tough question of her brother, but your brother-in-law, former brother-in-law, Jim McDougal, as you know, has suggested - has asserted that Susan and Bill Clinton had a love affair, had a romantic involvement. And that helps to explain the nature of her position.

A: What I find absolutely amazing is that immediately upon his sentencing and cooperation with Kenneth Starr, he went on "Dateline" with Stone Phillips and had nothing to say but great things about how Susan McDougal was being treated wrongly, she was imprisoned incorrectly that something should happen to get her released. Not one negative word. And then two days later when he made this allegation to Larry King Live, something dramatic happened between Dateline and Larry King Live.

And I suggest to you and the general public, that what happened was is that Kenneth Starr said, "Jim, we can no longer give you the deal if you're going to make Susan a martyr. You have to come up and support our suggestion that she knows something and give us a reason why." That's the dramatic reason for the difference in his testimony in front of Stone and his testimony in front of Larry King.

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