June 1, 1997 in Nation/World

Jail Provides ‘Some Relaxation’ From Troubles, Mcdougal Says

New York Daily News

Susan McDougal says that going to prison - rather than testifying against President Clinton in the politically charged Whitewater investigation - has set her free.

“I do not feel desperate,” McDougal said in a jailhouse interview with the New York Daily News. “Since I came to jail, I have never felt less desperate.

“In some ways I have found it to be good for me because I had been living in a whirlwind. Here, day after day of nothingness and the routine - in jail everything is a routine - has provided some relaxation.”

It’s also given her perspective.

“My mother and I talked about this. … You can’t feel sorry for yourself here,” she said. “Most women here are facing life or death, most have been in jail for years. The circumstances are hard on everyone.”

And circumstances certainly have not been easy on McDougal, the former Whitewater land deal investment partner of President Clinton and first lady Hillary Rodham Clinton.

The one-time honor student from Camden, Ark., who starred in her high school production of “You Can’t Take It With You,” is now serving an 18-month contempt sentence for refusing to answer questions on Whitewater from independent counsel Kenneth Starr.

Her refusal to talk has made McDougal the ultimate heroine to some and the ultimate chump to others, depending on their views of Whitewater.

Her home since September has been a 6-by-9-foot concrete cell in the Sybil Brand Institute for Women in Los Angeles, in the facility’s 4200 block, where high-profile inmates are housed.

McDougal, 42, said she often has to contend with rats and cockroaches in her cell. “They beat me to my breakfast,” she said.

“Our jail is a jail,” responded Los Angeles County Sheriff’s Department spokesman Sgt. Bob Stoneman. “If there was vermin, we have an ongoing process to keep the facility as clean as possible.”

McDougal says she won’t talk because Whitewater prosecutors want her to lie - to implicate the Clintons in wrongdoing when she knows of none. “They don’t want the truth,” she insists. “They want the Clintons.”

Reared a Baptist, the fourth of seven kids born to an Army sergeant who fought in two wars, McDougal attributes her resolve to family honor.

When Whitewater prosecutors indicted her brothers Jim and David Henley, and FBI agents repeatedly pestered her elderly parents in a bid to crack her resolve, all bets were off, she says.

“My father lost his hearing in the shelling in Korea. He is 83 years old. When I saw them badger and threaten my parents … when they went after my brothers … this all served to make me very leery of these people,” McDougal said.

Those who’ve helped McDougal through five months in Sybil Brand include her brother Bill Henley, 48; her fiance, Pat Harris, 37; and former inmate Lorraine Overbaugh, 34.

They say she has emerged as a jailhouse leader, sticking her neck out for underdogs in the joint.

When jail officials moved an 18-year-old inmate, allegedly involved in a gang-related shooting, to the less-secure general population, McDougal feared the teen would be hurt by rival gang forces. So she went to bat with the jail brass and helped win her transfer back to the 4200 block.

And with Bill Henley’s help on the outside, McDougal has obtained eyeglasses, court clothes, books and paper for other inmates with no money.

McDougal’s high-security rating bars her from physical contact with other inmates. Her prison frock is red, not orange. She is locked down except to shower, use the phone or see visitors through a double-pane Plexiglas shield.

Given the complexities of her legal affairs, she may be in for a long stay: Her bid to vacate the contempt charge is unlikely to succeed.

Last year, she was convicted of obtaining an illegal $300,000 loan linked to Whitewater and sentenced to two years in federal prison. The penalty remains on hold, pending appeal.

And next month, in an unrelated case in Los Angeles, she faces trial on charges she embezzled $150,000 from Nancy Mehta, the wife of former Los Angeles Philharmonic conductor Zubin Mehta, for whom she worked as an aide and bookkeeper from 1989 to 1992. She faces up to eight more years if convicted.

McDougal says she’s innocent of the loan charges but admits she unwittingly signed a stack of documents that her ex-husband, Jim McDougal, gave her - and he agrees.

“I did the loan application. She is not guilty, and I’ve said that in court,” Jim McDougal said.

On the contempt charge, however, Jim McDougal said he thinks his wife is covering up for the president.

“My advice to her would be, ‘Just go ahead and tell the truth and let the Clintons hang,”’ said McDougal, 56, who offered to cooperate with Whitewater investigators after being convicted of 18 felonies that carried up to 84 years in prison. After implicating the president in the illegal loan scheme, he is now facing a three-year sentence.

Susan McDougal also denies she bilked Mehta, contending her ex-boss authorized her to make credit card charges and sign checks in her absence.

Mehta has told prosecutors she never authorized the spending and that she fired McDougal in July 1992. McDougal says she quit.

McDougal’s brother Bill Henley, a Huntington Beach, Calif., businessman, blames Jim McDougal for Susan’s troubles.

“Her only crime was trusting Jim McDougal. Now he’s trying to save himself like a drowning man,” said Henley.

When 20-year-old Susan Henley and Jim McDougal married in 1975, former Arkansas Gov. Bob Riley performed the outdoor ceremony and Bill and Hillary Clinton were among the guests. Susan, it seemed, was destined for great things.

For the next 10 years, she worked with her husband on banking and real estate ventures, including the Whitewater land development - even appearing in TV ads touting his projects.

As business boomed, her three brothers came onboard, doing land development work for Jim McDougal’s Madison Guaranty Savings & Loan.

Also joining the gang was Pat Harris, a young Arkansan hired to help run Jim McDougal’s failed congressional campaign in 1982. Harris says he and Susan “hit it off right away,” but did not begin a romantic relationship until 1985, after the McDougals’ marriage and business ventures bottomed out.

By 1988, with the Whitewater land deal in financial ruins and Madison belly up, Susan and Harris headed for Los Angeles, where she filed for divorce from Jim McDougal, who had suffered a stroke.

Bill Henley says his sister will prevail.

“No matter how long they lock her up, they will not break her,” Henley said. “She’ll be the last person standing in the end.”

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