ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, September 5, 1996 TAG: 9609050098
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
DATELINE: LITTLE ROCK, ARK.
SOURCE: Associated Press
Taking dead aim at President Clinton, Whitewater prosecutors had Susan McDougal held in contempt Wednesday for refusing to say in front of a grand jury whether the president lied at her trial.
If McDougal, the president's former Whitewater partner, does not answer questions by Monday, she could be sent to jail for up to 18 months.
U.S. District Judge Susan Webber Wright held McDougal in contempt after prosecutor W. Ray Jahn called her a ``recalcitrant witness'' and said that she had violated the judge's order to testify.
McDougal said a Whitewater prosecutor had asked her whether Clinton knew anything about a fraudulent $300,000 loan, some of which went toward the purchase of land for the Whitewater venture.
A prosecutor also asked, she said, ``To your knowledge, did William Jefferson Clinton testify truthfully before your trial?''
In a statement McDougal read to the court, she said she didn't want to testify because she could be charged with perjury if her truthful testimony was inconsistent with that of other witnesses or conflicted with prosecutors' perception of the truth.
Also, she argued, she should not be compelled to answer the questions of Whitewater prosecutors in a proceeding closed even to her lawyers. Grand jury proceedings routinely are closed to defense attorneys.
``Some of her arguments are interesting, but they're not the law,'' the judge said.
The White House would have no comment, said Mark Fabiani, a special associate counsel to the president.
McDougal and her former husband, Jim, were partners with Clinton and his wife in the Whitewater development project from 1978 until shortly before Clinton was elected president in 1992.
The McDougals, along with former Gov. Jim Guy Tucker, were convicted May 28 on bank fraud and related charges.
Susan McDougal, 41, was sentenced to two years in prison in connection with a $300,000 loan she received from David Hale, who once accused Clinton of pressuring him to make the loan. The McDougals used $25,000 of the loan as a down payment on land bought for the Whitewater project.
In videotaped testimony played to jurors May 9, Clinton said he knew nothing about the loan or the land deal.
On Wednesday, McDougal and her lawyer, Bobby McDaniel, renewed charges that Whitewater independent counsel Kenneth Starr had targeted her as a means of bringing Clinton down.
``Susan has stood up to them, and she will continue to stand up to them,'' McDaniel said. ``The independent counsel has an agenda. They don't care about Susan McDougal being in jail. They want Bill and Hillary Clinton.''
McDougal must report Sept. 30 to begin serving her Whitewater prison sentence. The judge will decide whether any jail time imposed for contempt will be added to her prison term or served at the same time.
LENGTH: Medium: 63 lines ILLUSTRATION: PHOTO: AP. Susan McDougal (center) with her attorney, Bobbyby CNBMcDaniel, and Jennifer Horan outside federal court Wednesday in
Little Rock, Ark. color.