ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, August 21, 1996 TAG: 9608210073
SECTION: NATL/INTL PAGE: A-4 EDITION: METRO
DATELINE: LITTLE ROCK, ARK.
SOURCE: Associated Press
Susan McDougal was sentenced to two years in prison Tuesday in a fraud case her attorney denounced as bait to ensnare her former Whitewater business partners, President and Hillary Rodham Clinton.
A tearful McDougal pleaded for leniency like that shown to former Gov. Jim Guy Tucker, who was spared prison Monday because he suffers from chronic liver disease. She claimed that she blindly left all financial details to her then-husband, James McDougal.
But U.S. District Judge George Howard Jr. rejected claims that Susan McDougal naively received an illegal $300,000 loan - $25,000 of which prosecutors say was used to buy land for the Whitewater real estate venture.
The prison term ``will take Mrs. McDougal out of circulation for a reasonable amount of time,'' the judge said.
While Whitewater prosecutor Kenneth Starr said McDougal's sentence was ``fair and just,'' her attorney, Bobby McDaniel, said it was disproportionate because McDougal wouldn't offer testimony damaging to the president or his wife.
``To my knowledge, my client does not have any incriminating information on Bill or Hillary Clinton,'' he said. ``If she had caved in, she wouldn't be looking at any prison time.''
The McDougals were partners with the Clintons from 1978 to 1992 in the Whitewater real estate development in northern Arkansas. The McDougals also owned the Madison Guaranty Savings and Loan.
Susan McDougal, 42, was convicted May 28 along with Tucker and her ex-husband on charges they fraudulently obtained and used federally backed loans. She could have gotten 17 years in prison.
McDougal was given until Sept. 30 to report to prison. She also was ordered to repay the loan with interest and pay a $5,000 fine. After her prison term, she will be on probation three years.
Her 55-year-old former husband could get up to 84 years behind bars, but his sentencing was postponed until Nov. 18 in a sign that he is cutting a deal with prosecutors, who want his testimony against other figures in the Whitewater case.
After Susan McDougal's conviction, McDaniel said, prosecutor W. Ray Jahn offered to recommend probation for McDougal, get a theft charge dropped, and get a tax liability forgiven if she cooperated.
``He said, `You know the focus of our investigation is Bill and Hillary Clinton. That's what we're looking for,''' McDaniel said. ``The story today is, if you don't cooperate with independent counsel and do their bidding, they will crush you.''
Starr's office had no immediate comment.
LENGTH: Medium: 56 linesby CNB