McDougal maintains Whitewater innocence

May 7, 1996
Web posted at: 3:40 p.m. EDT

LITTLE ROCK, Arkansas (CNN) -- Whitewater defendant James McDougal took the stand Tuesday and denied that he and his co-defendants had committed crimes in the ill-fated Arkansas real estate venture.

The businessman and former close friend of President Clinton then blasted prosecutors for making "no case whatsoever." (225K AIFF sound or 225 WAV sound)

At one point, he asked the court to clear his former wife, Susan, of any possible wrongdoing. McDougal also said Gov. Jim Guy Tucker is innocent of all the charges against him.

"Susan McDougal has not ever done anything illegal, immoral or unethical in her life," McDougal said, maintaining he still loves her. "If the jury believes she's done anything wrong, charge it to me."

The McDougals and Tucker, who were partners with the president and Hillary Rodham Clinton in the Whitewater land development, were indicted last August on fraud and conspiracy charges.

They are accused of misusing $3 million in federally backed loans obtained before Tucker became governor in 1992.

Assumes blame

McDougal said he was responsible for the paperwork on a $300,000 loan made to Susan McDougal's company, Master Marketing.

The government says the money should have gone toward business expenses but that part of it was used for personal and business debts and land purchases, including $50,000 in payments for Whitewater property.

Late Monday, U.S. District Judge George Howard Jr. threw out four charges against Tucker and Susan McDougal. But Howard let stand all 19 counts against James McDougal.

Susan McDougal still faces four felony charges and Tucker seven, including a conspiracy charge. Howard concluded a jury would not be able to convict Mrs. McDougal of conspiracy.

Hale a 'liar'

Much of the prosecution's case revolves around the testimony of former banker David Hale. Hale testified earlier in the trial that James McDougal and Tucker colluded with him to generate loans to benefit themselves and their business partners.

Hale also has accused then-governor Clinton of pressuring him to make illegal loans to McDougal.

When McDougal was asked on the stand about Hale, he called the prosecution's star witness a "liar." He added that the president never met with Hale. (255K AIFF sound or 255K WAV sound)

"If I had been willing to support Mr. Hale's story, I would not be here. My refusal to testify against Clinton is why I'm here," McDougal said.

The president, subpoenaed by the McDougals, testified by videotape April 28. The tape is expected to be played in the trial Wednesday.

Related stories:

• Judge drops some Whitewater charges against Tucker, Susan McDougal - May 6, 1996
• Whitewater background - May 6, 1996
• AllPolitics - Whitewater prosecutors rest their case - May 3, 1996
• AllPolitics - Hillary Clinton's Sworn Statements Questioned - May 1, 1996

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