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Key Whitewater Witness Reportedly Changing Testimony


Jim McDougal: 'No Comment'

WASHINGTON (AllPolitics, Feb. 9) -- Jim McDougal, the former Whitewater partner of Bill and Hillary Clinton, told CNN on Sunday he had "no comment" on reports that he told New Yorker magazine that Bill Clinton was present at a 1986 meeting in which an illegal loan was discussed.


The New Yorker article, in the Feb. 17 issue on newsstands Monday, says McDougal is now telling Whitewater prosecutors that Clinton, then governor of Arkansas, was present at the meeting.

The article, by Jim Stewart, states that McDougal is now "contradicting both the videotaped testimony of the president and his own sworn statements."

White House Declines Comment


The White House offered no official response Sunday night. Clinton's attorneys declined to comment on the article. The president has denied under oath that the alleged meeting occurred.

McDougal, awaiting sentencing for his conviction last summer on Whitewater-related charges, told CNN he is prohibited from discussing his testimony.

But a source with firsthand knowledge of what McDougal has been telling investigators says the article does not "reflect exactly what McDougal has told" investigators.

According to sources close to the investigation, McDougal did tell investigators he was meeting in the winter of 1986 with David Hale "... on another matter when Bill walked in." Clinton, according to the sources' recounting of McDougal's information, "... said something to the effect [of] 'I sure hope you can help us out with this.'"


"This," according to the sources, was a $300,000 loan for Susan McDougal from Hale, acting on behalf of the Small Business Administration. Susan McDougal was convicted of making fraudulent statements to receive that loan.

David Hale is a convicted Whitewater defendant who is Bill Clinton's chief accuser. He testified that in early 1986, in a trailer at the Castle Grande real estate project, he met with McDougal and Clinton where Clinton sought the loan. Hale testified at the first Whitewater trial that "the governor said 'my name should not show up.'"

McDougal's Sworn Testimony

In his testimony on May 8, 1996, McDougal was asked under oath, "Did you ever meet with David Hale at the Castle Grande sales office for the purpose of discussing a loan in the name of Susan McDougal?"

"No sir," McDougal answered. McDougal said in the story that he wasn't lying under oath because the meeting of the three was inadvertent. He argues that he gave "misleading" testimony.

In a deposition, President Clinton said, "I don't recall any conversation with David Hale about loaning money."

Earlier in the week, a source told CNN that McDougal was providing information that was "potentially credible, potentially damaging to the Clintons."

Various sources say McDougal has credibility problems, requiring investigators to document all his assertions. His sentencing for his Whitewater conviction is expected to be delayed a second time, from February to June, to allow independent counsel prosecutors time to check out his information.

At the same time, the independent counsel staff is in the final stages of preparing a memo outlining the evidence concerning charges against the Clintons, which will provide the basis for deciding whether to take any criminal action against either of them.

Susan McDougal, also convicted in the Whitewater trial, is imprisoned in Los Angeles on civil contempt charges for refusing to answer questions of the Whitewater grand jury in Little Rock.

Correspondent Bob Franken contributed to this report.

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