McDougal, Tucker guilty of conspiracy in Whitewater trial

May 28, 1996
Web posted at: 5:10 p.m. EDT

LITTLE ROCK, Arkansas (CNN) -- After seven days of deliberations, jurors Tuesday convicted President Clinton's former Whitewater business partners of fraud and conspiracy. (CNN's Bob Franken reports the verdicts - 381K AIFF or WAV sound or 1.3M QuickTime movie)

James McDougal was declared guilty on 18 of 19 charges against him; Susan McDougal was found guilty on all four charges against her; and Arkansas Gov. Jim Guy Tucker was found guilty on two of seven charges against him. Late Tuesday, Tucker said he will resign on or before July 15.

In a 21-count indictment, James McDougal; his former wife, Susan; and Tucker were accused of a $3 million conspiracy to defraud two financial institutions and use fraudulently obtained federal loans for their business projects in Arkansas in the mid-1980s.

During the trial, star prosecution witness and banker David Hale testified that James McDougal and Tucker conspired with him to arrange the transactions.

Hale alleged that Susan McDougal benefited from a $300,000 loan that then Arkansas Gov. Bill Clinton pressured him to make. Hale once owned a federally backed loan company. Now a convicted felon, he was able to plea bargain because of his accusations against Clinton.

Clinton was subpoenaed to testify in the trial in a bid to destroy Hale's credibility. The president has not been charged with any offense, and vehemently denied Hale's allegations.

Prosecutors wrapped up their case May 15 by saying the defendants dragged the president into the case unnecessarily. "The president is not on trial," ssaid Assistant Independent Counsel W. Ray Jahn in a two-hour rebuttal.

The jurors reported "difficulties" sorting through the lengthy indictment and more than 700 exhibits to reach a decision. The trial dealt with a complicated paper trail of financial transactions going back 10 years.

The McDougals and the Clintons were once close friends and partners in the failed 230-acre Whitewater development in northern Arkansas. The project has haunted Clinton since he moved to the White House. The trial began March 4.

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