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The trials and tribulations of Susan McDougal

April 8, 1999
Web posted at: 4:50 p.m. EST (2150 GMT)

WASHINGTON (AllPolitics, April 8) -- Whitewater figure Susan McDougal has been consistently in-and-out of the courtroom and in-and-out of jail for more than three years. With all her legal woes, it's become difficult to keep track of the many charges she has faced. So, here's our guide:

Overview


Focus on McDougal's woes:

Whitewater trial
Contempt citation
Embezzlement trial
Criminal contempt and obstruction of justice

Legally, McDougal's troubles break into four proceedings: First, she was tried and convicted in May 1996 on Whitewater-related fraud charges. She was sentenced to two years. But before she could serve any of that time, McDougal was slapped by the judge with an additional 18 months in jail on civil contempt charges when she refused to answer further questions from the Whitewater prosecutors. In July 1998, she was released from jail early, after serving the entire contempt sentence and four months of the Whitewater sentence.

Next, McDougal was acquitted of embezzlement charges unrelated to her Whitewater activity, though her defense accused Independent Counsel Ken Starr of engineering McDougal's prosecution to force her to testify against President Bill Clinton.

McDougal's fate is once again in a jury's hands, as she faces criminal contempt and obstruction of justice charges brought by Starr's office.

Whitewater trial

Charges

Four counts of fraud and conspiracy. Susan McDougal was tried with her ex-husband Jim McDougal and then-Arkansas Gov. Jim Guy Tucker.

Background

Prosecutors accused the defendants of defrauding the Small Business Administration and essentially using the McDougals' Madison Guaranty Savings & Loan as a private cookie jar, dipping into it for some $3 million in bogus loans to bankroll their many business schemes.

Trial highlights

During the nine-week trial, the government's star witness, Arkansas banker and former municipal judge David Hale, made the sensational claim that then-Gov. Bill Clinton had discussed an illegal $300,000 loan with himself and McDougal.

Though not a defendant, Clinton denied the charge in videotaped testimony taken at the White House April 28, 1996. Clinton also told reporters Hale's account was "a bunch of bull." Following the trial most jurors said they believed his videotaped testimony but found it tangential. Nevertheless, the guilty verdicts were a blow for the White House.

Verdict and sentence

Susan McDougal was convicted on May 28, 1996 of all the charges and sentenced in September 1996 to three 24-month prison terms to run concurrently, plus three years' probation on the fourth felony charge. She could have received as much as 17 years in prison and $1 million in fines, and the leniency of the sentence came as a surprise to some trial-watchers.

Tucker was convicted on May 28, 1996 of two of the seven fraud charges against him and in August 1996 received four years' probation, after the judge took into account the former governor's chronic liver disease and need for a liver transplant. Tucker could have received up to 10 years in prison and $500,000 in fines.

Jim McDougal was convicted on May 28, 1996 of 18 the 19 charges against him. Facing up to 84 years in prison and $4.5 million in fines, McDougal agreed to cooperate with Starr's office. His cooperation netted a reduced sentence, and in April 1997 he was sentenced to three years in prison and a year of house arrest, three years of probation and a $10,000 fine.

Fallout

The accusations by Hale prompted Whitewater prosecutors to want further testimony from Susan McDougal. She refused leading to a civil, and later criminal, contempt charge against her. (See below for more details)

Tucker resigned from office within hours of the verdict.

Jim McDougal, who had a history of heart trouble, died of a heart attack in jail in March 1998. The impact of his post-trial cooperation with Starr's Whitewater probe is still unknown, but at the least he would be unable to give testimony in any further proceedings against the Clintons.

Related stories

Whitewater figure James McDougal dies in prison (3-8-98)

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

Whitewater jury convicts defendants (5-28-96)

 

Contempt citation

Charges

Civil contempt of court.

Background

Susan McDougal refused to answer three questions from Whitewater prosecutors before the grand jury empaneled by Independent Counsel Ken Starr to investigate Whitewater in September 1996, citing concerns about possible perjury charges down the road.

U.S. District Court Judge Susan Webber Wright ordered McDougal to answer, threatening to hold her in contempt if she did not. McDougal continued to refuse, and Judge Wright made good on her threat.

Highlights

The questions prosecutors asked McDougal included whether President Bill Clinton lied in his testimony during her Whitewater trial, particularly when he denied any knowledge of the illegal $300,000 loan.

Verdict and sentence

The judge held McDougal in contempt of court and sentenced her to 18 months in jail.

Fallout

McDougal served her full 18 month sentence, maintaining her silence before the grand jury, though certainly not before the media. When her contempt term ran out in March 1998, McDougal began serving her two year fraud sentence.

Due to a medical problem in July 1998 judge released her from prison early, reducing her Whitewater sentence to time served.

Related stories

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

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

 

Embezzlement trial

Charges

Nine counts of embezzlement and failure to file tax returns

Background

A California jury considered allegations that Susan McDougal stole $50,000 from conductor Zubin Mehta and his wife, Nancy, while working as their bookkeeper and personal assistant between 1989 and 1992. The original indictment filed 12 counts against McDougal, but Superior Court Judge Leslie Light threw out three of the counts ruling that the prosecution had failed to prove McDougal could have embezzled any more than $50,000.

Highlights

Judge Light barred any mention of Whitewater or Independent Counsel Ken Starr during McDougal's embezzlement trial, saying he could see no logical connection between Whitewater and the current case.

The defense had suggested that Starr engineered McDougal's prosecution on embezzlement charges to put pressure on her to testify against President Bill Clinton in the Whitewater case. The prosecution denies the charge.

Verdict and sentence

McDougal was acquitted of all nine charges on November 24, 1998.

Fallout

Though the case was unrelated to the Whitewater matter, McDougal called the verdict a victory in all her legal problems and reiterated her contention that she is being pressured by Starr to change her testimony about Clinton's Whitewater involvement.

Related stories

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

McDougal fiance scolded over Whitewater testimony (10-27-98)

 

Criminal contempt and obstruction of justice trial

Charges

Two counts of criminal contempt and one count of obstruction of justice.

Background

On April 23, 1998 Susan McDougal was once again called before the Little Rock Whitewater grand jury. Like before, McDougal refused to answer certain questions posed by prosecutors. The grand jury indicted her in May 1998 of obstruction of justice and dual criminal contempt charges for her refusal to testify before the panel in September 1996 and April 1998.

Highlights

From the beginning of the proceeding McDougal called the trial a "personal vendetta" by Independent Counsel Ken Starr. McDougal's defense tried to put Ken Starr's investigation on trial, calling Deputy Independent Counsel Hickman Ewing to the stand.

In a surprise move, U.S. District Judge George Howard also allowed Julie Hiatt Steele to be called as a witness, as the defense tried to bolster their charge of prosecutorial mistreatment. Steele testified that she was pressured to back up the story of onetime friend Kathleen Willey -- who accused President Bill Clinton of making an unwanted sexual advance -- before Starr's grand jury investigating the Monica Lewinsky matter. She said she indicted on charges of obstructing justice and making false statements when she refused to lie.

McDougal also took the stand in her defense, finally answering the questions that cost her 18 months in jail. She testified that Clinton, as far as she knows, testified truthfully in 1996 about the Whitewater land deal. She also said that she never spoke with Clinton about the fraudulent $300,000 Small Business Administration loan taken out by McDougals that David Hale alleged Clinton pressured Hale to make. She also accused her former ex-husband of lying to Whitewater prosecutors when he agreed to cooperate with their investigation.

During the prosecution's case, FBI agent Mike Patkus traced a complicated moneytrail that he said was the first link between the $300,000 loan. The alleged link was a $27,600 check made out to then-Arkansas Governor and Whitewater partner Bill Clinton. Patkus testified that the check was paid in a complicated series of financial transactions that led to the illegal loan that sent McDougal to prison in the earlier Whitewater trial.

Verdict and sentence

The jury is deliberating.

Fallout

If acquitted, Susan McDougal's current legal troubles should be over. If convicted she faces as much as 10 years in prison and a $750,000 fine.

Related stories

Grand Jury Indicts Susan McDougal For Contempt (5-4-98)

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

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

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

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

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

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

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

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

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

Steele allowed to testify (3-30-99)

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

McDougal trial: Steele says she was punished for telling the truth (4-2-99)

Prosecution rests in McDougal trial (4-5-99)

Jury begins deliberating McDougal case (4-8-99)


THE VERDICT

McDougal not guilty on one count; mistrial declared on other two charges

The trials and tribulations of Susan McDougal


whitewater
WHITEWATER

Introduction

Cast of Characters

Arkansas roots

The first trial

The second trial

The RTC investigation


whitewater
SUSAN MCDOUGAL

Judge allows juror to remain; deliberations to resume monday

McDougal jurors ask judge about 'innocent reason' (4-8-99)

McDougal trial likely go to jury Thursday (4-7-99)

Prosecution rests in McDougal trial (4-5-99)

McDougal trial: Steele says she was punished for telling the truth (4-2-99)

McDougal attorneys given day off to prep for Steele testimony (4-1-99)

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)


BACKGROUND

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)


TRANSCRIPTS

President Bill Clinton's Whitewater Testimony - First Trial (5-9-96)

Whitewater jury convicts defendants (5-28-96)

President Bill Clinton's Whitewater Testimony - Second Trial (7-18-96)

James McDougal on CNN's Larry King Live (4-21-97)

Starr, Jahn, McDougal Transcript (4-15-97)


MESSAGE BOARD

The Independent Counsel



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Thursday, April 8, 1999

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