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Steele allowed to testifyMcDougal denies knowledge of two checks
March 30, 1999 LITTLE ROCK, Arkansas (AllPolitics, March 30) -- In a major blow to Independent Counsel Ken Starr's office, a federal judge ruled Tuesday that another woman under indictment by the Office of the Independent Counsel will be allowed to testify in the criminal contempt and obstruction of justice trial of Whitewater figure Susan McDougal. Julie Hiatt Steele will likely take the stand Friday for the defense as they try to establish a pattern of mistreatment by Starr's office. Steele gave testimony to Starr's grand jury that undercut the account of former White House volunteer Kathleen Willey, who accused President Bill Clinton of making an unwanted sexual advance toward her. Initially, Steele backed Willey's allegations but later retracted her story in an affidavit filed in the Paula Jones sexual harassment lawsuit and during testimony before two federal grand juries. She was later indicted by Starr's Virginia office on three counts of obstruction of justice and one count of making a false statement. She has pleaded innocent to the charges. After U.S. District Judge George Howard delivered his ruling, prosecutor Mark Barrett said, "This is mammoth. The prosecutors in Little Rock are not up to speed on the (Steele) case." Barrett asked that the trial be recessed until Monday so that he could familiarize himself with Starr's case against Steele in Alexandria, Virginia. The judge refused, delaying Steele's appearance until Friday but saying the case will continue in the meantime with other witnesses. McDougal's attorney, Mark Geragos said Steele is "the logical extension" of McDougal's defense against criminal contempt and obstruction of justice charges. McDougal has said she refused to answer federal grand jury questions because she feared Starr would charge her with perjury if she did not provide incriminating information about Clinton or his wife, Hillary Rodham Clinton. Howard said Geragos "is simply presenting this to the jury to show modus operandi" by Starr's prosecutors. Howard assured prosecutors he would allow them to present rebuttal witnesses to counter Steele's testimony. The judge said Steele can give "limited testimony." Earlier on Tuesday, McDougal testified that she knew nothing about two checks, including one written by her, that raise questions about President Bill Clinton's testimony in her previous Whitewater trial. In 1996, Clinton testified at McDougal's trial that he never borrowed from the savings and loan owned by McDougal and her late ex-husband, James. The McDougal's were the business partners in the Whitewater real estate venture with the president and Hillary Rodham Clinton. "According to what I know, everything that I know, Bill Clinton answered truthfully ... about all the ... questions he was asked that had anything to do with me," she testified. But investigators from Starr's office later discovered a $27,600 cashier's check that was a loan made payable to "Bill Clinton" from the savings and loan. The investigators also discovered a $5,081 check signed by McDougal that was used to pay off part of the Clinton loan. McDougal acknowledged on the stand that it was her signature on the $5,081 check, but she said she would have written the check on her ex-husband's instructions. She also repeated the answer she gave last week that her impression on seeing the check recently was that it was for land the McDougals had in Clinton, Arkansas. But the money was used to pay off part of the loan made in Clinton's name. The words "payoff Clinton" appear on the $5,081 check in McDougal's handwriting. McDougal said she had no information to contradict Clinton's denials about taking out a loan. She also noted that her ex-husband testified at the 1996 Whitewater trial that Clinton hadn't taken out a loan. James McDougal later cooperated with Starr's office, leading investigators to the loan in Clinton's name. In another ruling, Howard rejected an effort by the defense to introduce into the trial allegations involving funneling of payments to Clinton political enemies from conservative activists funded by Richard Mellon Scaiffe, a multimillionaire and longtime enemy of the president. Geragos said if allowed, McDougal would have testified about details of the purported scheme which is now under investigation by a special investigator for the Justice Department. Howard firmly rejected the effort, saying the matter was under investigation, and that it would also "confuse the jury." He also said it "would extend this case not only weeks, but months." The Associated Press contributed to this report. |
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MORE STORIES:Tuesday, March 30, 1999
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