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McDougal attorneys given day off to prep for Steele testimony

By Terry Frieden/CNN

April 1, 1999
Web posted at: 11:04 a.m. EST (1604 GMT)

LITTLE ROCK, Arkansas (AllPolitics, April 1) -- Lawyers for the Office of Independent Counsel are spending Thursday preparing for Friday's controversial testimony in the Susan McDougal contempt trial by Julie Hiatt Steele, who also is under indictment in Ken Starr's investigation of President Bill Clinton.

The judge in the trial late Wednesday granted a one-day recess to allow attorneys to prepare for Friday's controversial testimony.

U.S. District Court Judge George Howard Jr. rejected a motion by prosecutors to reconsider his highly unusual ruling Tuesday allowing Steele to take the stand as a defense witness in the Little Rock, Arkansas trial.

Steele was indicted by Starr's office in Virginia for obstruction of justice and making false statements in the investigation of allegations Clinton had "groped" her former friend Kathleen Willey in the White House.

Steele initially supported Willey's allegation, but later retracted her statement, claiming Willey had asked her to lie. She faces trial on May 3 in Alexandria, Virginia.

McDougal is on trial on two counts of criminal contempt and one count of obstruction of justice for twice refusing to answer questions about the Clintons before a Little Rock grand jury.

McDougal claims Starr's team was interested only in getting her false testimony to implicate Bill Clinton in illegal financial dealings in the 1980s. She is hoping Steele's testimony will bolster her allegations of misconduct by the independent counsel's office.

Attorneys and courtroom observers in Little Rock could not recall a precedent for an individual facing trial taking the stand in another trial in an effort to criticize the prosecutors' tactics.

Starr's Virginia prosecutors preparing for Steele's trial will huddle in Little Rock Thursday with their Arkansas colleagues who are trying the McDougal case to map strategy. Steele takes the stand Friday.

"We've got to put our heads together to decide what to do. My first impression is that at a minimum we have to establish a good faith basis for bringing a prosecution against Miss Steele," said Little Rock prosecutor Mark Barrett.

McDougal's attorney Mark Geragos says he is putting Steele on the stand in an attempt to demonstrate the Independent Counsel showed a pattern of indicting individuals who refused to tell the story Starr's prosecutors wanted to hear.

"When she wouldn't tell the Kathleen Willey story -- hello, four counts of obstruction of justice and false statements," Geragos told reporters.

Geragos said Steele's testimony will bolster McDougal's case that she refused to testify before a grand jury because McDougal feared being indicted if she told the truth.

Steele, who is the final defense witness, is expected to be on the stand all day Friday. Prosecutors plan to call rebuttal witnesses early next week.

Both sides predict the McDougal case will be in the jury's hands by Wednesday or Thursday of next week.

On Wednesday, Claudia Riley, a longtime friend of the McDougals, testified that McDougal's late ex-husband Jim wanted her in 1996 to cooperate with the special prosecutor's investigation of President Bill Clinton.

Riley said Jim McDougal "grabbed Susan by the arm" and said that if she didn't help Starr's office, "I'll never speak to you again."

Riley also told the court she overheard a conference call during which one of Starr's prosecutors told McDougal he could "get you out of" legal problems in California if she cooperated in the investigation of Clinton and his wife, Hillary Rodham Clinton.

"I remember the words, 'We could get you out of California and get you out of the income tax'" problem, Riley said.

At that time, prosecutors in California were looking into allegations McDougal stole $50,000 from conductor Zubin Mehta and his wife while working as their bookkeeper and personal assistant between 1989 and 1992.

Last November, a jury in California found McDougal not guilty of nine counts of embezzlement and failure to file tax returns, relating to the Mehta's allegations.

Riley also told the jury that during that same conference call, Starr's prosecutors offered to recommend that McDougal be placed on probation for her Whitewater convictions.


Witness: Jim McDougal wanted his ex to cooperate with Starr (3-31-99)

Steele allowed to testify (3-30-99)

Prosecutors play interview outtakes in McDougal trial (3-29-99)

McDougal says her ex-husband lied about Clinton's Whitewater involvement (3-24-99)

McDougal answers questions about Clinton for the first time (3-23-99)

Judge refuses to dismiss juror in McDougal trial (3-22-99)

Deputy independent counsel says he wrote 'rough draft indictment' of Hillary Clinton (3-18-99)

Grand juror testifies Starr's prosecutors were not out to get the Clintons (3-17-99)

Hillary Rodham Clinton testimony played at McDougal trial (3-16-99)

FBI agent traces money trail at McDougal trial (3-11-99)

Opening statements begin in McDougal trial (3-10-99)


McDougal jubilant after jury finds her not guilty (11-24-98)

McDougal 'in shock' after early release from prison (10-27-98)

McDougal likely to answer questions about Clinton during contempt trial (5-12-98)

Grand jury indicts McDougal for contempt (5-4-98)

McDougal blasts "hoodlum" Ken Starr (10-3-96)

McDougal charged with civil contempt (9-4-96)

Susan McDougal gets two years in prison (8-20-96)

Whitewater jury convicts defendants (5-28-96)


Thursday, April 1, 1999

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