February 10, 1997 in Nation/World

Clinton’s Ex-Partner Changes His Story Mcdougal Now Says President At Meeting About Illegal Loan

Los Angeles Times

In a bid to avoid prison, President Clinton’s former Whitewater business partner has changed his story and told prosecutors that Clinton attended a 1986 meeting in which an illegal loan was discussed, according to the New Yorker magazine.

James B. McDougal, Clinton’s former partner, told the New Yorker he had told Whitewater prosecutors that Clinton was present at a 1986 meeting in which an illegal $300,000 loan to McDougal’s wife was discussed with David Hale, a businessman who specialized in brokering loans involving the Small Business Administration.

In the past, McDougal has repeatedly denied that Clinton attended any such meeting.

Hale has testified that Clinton pressured him to make the loan during the meeting and warned him not to speak about it.

In videotaped testimony last year in the fraud and conspiracy trial of James McDougal and his former wife, Susan, Clinton denied that he was at the meeting with Hale and also denied that he ever sought to pressure Hale into making the loan. McDougal testified the meeting with Clinton and Hale never took place.

Hale’s allegation that Clinton pressured him to make the loan has long been one of the most explosive charges in the entire Whitewater affair. Whitewater independent counsel Kenneth Starr’s office has never been able to take the allegation very far because Clinton and the McDougals have denied it for years.

But James and Susan McDougal were convicted in last year’s trial, and James McDougal is now trying to cut a deal with the Whitewater prosecutors to avoid prison in exchange for his testimony against the president.

Susan McDougal, in jail for her refusal to answer questions before the Whitewater grand jury, told the New Yorker that she mistrusted the Whitewater independent counsel. She said she felt like a pawn in a political crusade to get the Clintons.

In the New Yorker article, James McDougal suggested that his ex-wife might have had another reason not to testify against Clinton. The two, he alleged, had had an affair.

McDougal claimed that in 1982, he called his home to see if Susan had arrived safely from a trip to Europe with her mother. The phone didn’t ring; instead, he said, he found himself listening to a phone conversation already in progress between Susan and Bill Clinton.

“How should I say this? They were intimate,” McDougal told the magazine. “There was no doubt in my mind.” McDougal said he later asked Susan if she was having an affair with Clinton, and she acknowledged that she was.

In the same article, Susan McDougal denied her ex-husband’s charge.

She told the New Yorker instead that her husband had wanted her to have an affair with Clinton.

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