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President Subpoenaed To Testify Former Whitewater Partner Calls Clinton As Defense Witness

A federal judge ordered President Clinton on Monday to testify next month as a defense witness in the bank fraud and conspiracy trial of his former Whitewater business partners.

Ruling on a request by Susan McDougal, a former partner of the president and Hillary Rodham Clinton in the Whitewater land venture, U.S. District Judge George Howard Jr. ruled in Little Rock, Ark., that the president’s testimony “is vital” to allowing the defendants “a fair trial and an adequate defense.”

David E. Kendall, the Clintons’ private lawyer, said Monday night that he had received the order and “will review it carefully.”

“The president’s intention is to cooperate in an appropriate fashion,” Kendall said, but he declined to spell out what arrangement Clinton would seek.

The judge instructed defense lawyers and attorneys for Clinton to coordinate a schedule for the president’s appearance. Howard added that if “it is concluded that the president’s personal appearance is not tenable,” the lawyers should “consider other options for presenting the president’s testimony, for example, via videotape or satellite.”

Under federal law, Clinton could challenge the request for his testimony if he chose.

But Monday’s ruling by Howard once again moves Whitewater-related matters to center stage as Clinton’s presidential campaign is moving into gear. Late last month in Washington, Hillary Clinton testified before a federal grand jury in a separate investigation into whether there had been any obstruction of justice in the White House in the handling of records from the first lady’s former law firm.

There are precedents for presidents to provide testimony and information for criminal trials, although in modern times this has been done through the use of videotape. Presidents Jimmy Carter and Gerald R. Ford both provided videotaped testimony in criminal trials concerning matters unrelated to their actions as president. And President Ronald Reagan gave a videotaped deposition after he left office in the Iran-Contra prosecution of a former national security adviser, John M. Poindexter.

Susan McDougal; her former husband, James, and Gov. Jim Guy Tucker of Arkansas are scheduled to stand trial for fraud on March 4 in Federal District Court in Little Rock. The three were indicted last year by a federal grand jury in a case brought by Kenneth W. Starr, the independent counsel in charge of the Whitewater investigation.

Last week, a lawyer for Susan McDougal said Clinton’s testimony would be crucial to the defendants’ effort to impeach the credibility of David L. Hale, a government witness.

Hale, a former judge who once ran an investment company backed by the Small Business Administration, has said Clinton pressured him to make an improper federally backed loan of $300,000 to Susan McDougal. Clinton has said that he does not recall meeting with Hale and that he did not put any pressure on Hale.

A lawyer for Susan McDougal, Jennifer Horan, has said she wants the president to testify in person.

Sam Heuer, the lawyer for McDougal, said on Monday night that he had also sought Clinton’s testimony on behalf of his client in a motion filed under seal last week. “It would seem to be that a trip to Little Rock on Air Force One and with an army of Secret Service agents in the courtroom would be a little much,” Heuer said. “I want to work with the president to get his testimony. I think we can obtain it through satellite and other means.”

He added, “The important thing is that it come after Hale testifies.”

Tucker and the McDougals have been accused of violating fraud and conspiracy laws and making false statements in getting millions of dollars in federally backed loans in the 1980s. Prosecutors have said the three concocted a series of fraudulent loans that contributed to the collapse of Madison Guaranty Savings and Loan, which cost the taxpayers more than $60 million.

The indictment covers the loan Hale made to Susan McDougal. Neither Clinton nor his wife, Hillary, who did legal work for Madison, has been named in the indictment.

Hale has pleaded guilty on two felony counts related to making improper federally backed loans. He has not been sentenced.



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