May 20, 1996 in Nation/World

Whitewater Trial Labeled ‘Political War’ Defendant Says His Acquittal Won’t Stop Probe

Associated Press
 
Tags:ethics

A defendant in the Whitewater trial said an acquittal for him isn’t likely to sidetrack the 2-year-old, $1 million-a-month investigation of President Clinton’s ex-business partners.

“Oh no, not in a political year, and not while there are wild men like Al D’Amato around,” James McDougal said Friday, referring to the New York Republican whose special Senate Whitewater Committee has been renewed through June.

“This is a political war,” he said. “I’m either going to be a hero or a martyr.”

Jury deliberations resume today in the fraud and conspiracy trial of McDougal, his ex-wife Susan McDougal and Gov. Jim Guy Tucker.

Regarding the investigation’s fate, no one in independent counsel Kenneth Starr’s office would go beyond its repeated response that the investigation is “active and ongoing.”

A judge last month authorized a new special grand jury for the Arkansas portion of the Whitewater investigation, replacing the panel that ended service in March after two years on the case.

In court papers, Starr said he had more work to do.

Bobby McDaniel, a lawyer representing Susan McDougal, argues that the 11-week trial was a referendum on Starr’s probe, so acquittals should shut it down.

If jurors acquit, it means they reject the testimony of David Hale, a former banker whose claims are central to the trial and much of Starr’s work, he said.

Convictions wouldn’t necessarily harm the president though, because little of the current case directly involves Clinton, McDaniel said.

The McDougals - former partners with the Clintons in the Whitewater land development - are accused along with Tucker of lying to obtain loans benefiting themselves and others between 1985 and 1987, and using the money for purposes other than stated.

Of the 16 people charged so far, the McDougals are closest to the investigation of the president’s financial dealings while he was Arkansas governor. Tucker succeeded Clinton as governor.

The defendants had close financial ties to Hale, a small-time investment lender whose claim that the president pressured him to make a $300,000 loan to Susan McDougal helped fuel Starr’s investigation.

Clinton denied Hale’s claims in testimony videotaped in Washington and played in court.

The defense portrayed Hale as a con man so greedy that he stole from his own lending company, then lied to federal authorities to hide his crimes.

When he got caught, he concocted an intriguing tale of financial corruption involving Clinton to force appointment of an independent counsel with whom he could trade information for leniency, the defense said.

Lead prosecutor W. Ray Jahn acknowledged in closing arguments that Hale’s testimony yielded nothing to incriminate the president.

MEMO: This sidebar appeared with the story: WHAT’S NEXT? Jury deliberations resume today in the fraud and conspiracy trial.

This sidebar appeared with the story: WHAT’S NEXT? Jury deliberations resume today in the fraud and conspiracy trial.

© Copyright 1996 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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