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James McDougal On CNN's Larry King Live

Transcript April 21, 1997

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James McDougal, former business partner of President and Mrs. Clinton, discusses the Whitewater investigation on CNN's Larry King Live in Washington, D.C.

LARRY KING, HOST (voice-over): Tonight, he was once a close friend and business partner of Bill and Hillary Clinton, and now he's appealing a prison sentence relating to the Whitewater scandal. James McDougal is our guest for the full hour, with your phone calls. Next on LARRY KING LIVE.

ANNOUNCER: Now, live in Washington, here is Larry King.

KING: Good evening from the nation's capital, this is LARRY KING LIVE. Our guest is James McDougal, convicted in the Whitewater trial. He will begin serving a 3-year sentence in the, I guess, what? A medical prison?


KING: What is that called, a medical facility?

MCDOUGAL: A medical facility, I believe, it -- Fort Worth, Texas.

KING: In June?

MCDOUGAL: Yes, sir.

KING: What is the condition that requires you be put in medical facility?

MCDOUGAL: Well, I have a complete, I have had a stroke, which completely blocked the right carotid artery, which furnishes blood to the brain. It's inoperable, the other side's been operated on. It's partially blocked. I have had about a 3-foot incision running from my aorta to my knees to correct blockage there. I have heart -- a serious heart condition. I have to take nitroglycerin daily.

KING: Do you get angina, you get pain?

MCDOUGAL: Yes. To stop the pain I had a major episode during the trial and I've now been put on long-acting nitroglycerin that I take twice a day.

KING: You -- have you found out how the, that the, if in this federal facility the medical accoutrements are good. I mean, are they, do they have top doctors, modern equipment? Are you worried?

MCDOUGAL: No, I'm not worried. I think that I'll probably get much better care than I get now. I don't have anybody to take me to the doctor. None of my family is living, I have no children, I'm divorced. So actually, I probably will get more attention than I can get now.

KING: Are you poor?

MCDOUGAL: Yes. I'm poor, and I owe $4.5 million, I think in a -- in judgment.

KING: Someone said if you owe 4.5 million, you can't be poor. Do you live in a, you have a big house? I mean, your life has changed.

MCDOUGAL: No, I live in a (inaudible) house trailer that I rent for a nominal sum, from a friend of mine.

KING: Do you live in a trailer park?

MCDOUGAL: Yeah -- no not a park. It is just a trailer in somebody's side yard, in a small town of about 10,000.

KING: Are there ever days you walk around say, "I was a business partner of the president of United States, and I'm going to prison and I'm in a trailer?"

MCDOUGAL: I'm not very good at self-pity. I have been...

KING: How about a little self-anger? How about just -- mad?

MCDOUGAL: Well, I think when do you bad things, bad things happen, and for whatever reasons, I did a lot of bad things, and I don't have any complaint. I have no right to complain.

KING: You know you did wrong?


KING: Last time were you here, though, you were pretty vehement in saying you did wrong -- although you thought it was a technicality and thought you should you not have been found guilty.

But you absolved the president. What happened?

MCDOUGAL: Well, we were involved in a great deal of lying then, on all sides.

KING: You lied on this program?

MCDOUGAL: I lied to you, and for that I apologize. And I lied to the American people through your program by denying vehemently the story that David Hale was telling about a meeting with the president and Mr. Hale and I had concerning a loan, made to Susan McDougal.

KING: Your wife, at the time.

MCDOUGAL: Yes, sir.

KING: This would be a loan made to her in -- and he was governor, right?

MCDOUGAL: Yes, sir.

KING: Briefly. What was that about?

MCDOUGAL: It was $300,000 loan made through SBIC, which is a government-funded loan operation designed to loan to women and to minorities.

KING: Why can't a governor be involved in that?

MCDOUGAL: Well, I don't think there is anything illegal about the meeting. It was just embarrassing. And when we started covering it up I had no idea that it was going to go beyond denying it on the Larry King show. It just went on and on.

KING: Had the president said, "I was at the meeting and the loan, she qualified for the loan, I said if she qualifies give it to her" --what's the big deal?

MCDOUGAL: Nothing would have happened. Like most...

KING: So, it's in the lie then?

MCDOUGAL: Yes. Most times, like most things when you start lying, it gets worse and worse and worse.

KING: Why did you lie?

MCDOUGAL: It invaded -- I don't know. Just -- I, it was just a character defect that I couldn't stand up and say no, I don't want to lie.

KING: Were you protecting your president consciously?

MCDOUGAL: Well I was protect my president...

KING: And your friend.

MCDOUGAL: And my friend. And myself.

KING: You were (OFF-MIKE)?

MCDOUGAL: Yes, sir.

KING: What did the prosecutor say to you, to get you -- or was it the conviction itself that got to you say, "I'm going to, I don't want to do 25 years?" What happened?

MCDOUGAL: Well , I think it was 81 years that I was facing, possibly. However the medical testimony was that my life expectancy is about 5 years. Nobody contested that, including the prosecution, so I think I have in effect come out with a life sentence anyway.

KING: You would have died in prison.

MCDOUGAL: So I didn't want to do that. First of all, anyone in my position who cooperates with the prosecution should say up front, "I'm trying to save my own skin."

KING: Don't lie again.

MCDOUGAL: Yes there are other factors.

KING: Did you go to Mr. Starr?


KING: What did he say to you?

MCDOUGAL: I've only had two conversations with him, and he said very little. We discussed a store in Arkadelphia that sells bargain Cole Hahn shoes, and made some pleasantries the first time. Then the next time I saw him was in court the other day.

KING: Oh, so he was not part of talking to you?

MCDOUGAL: No, sir. I talked with Hickman Ewing, his chief deputy, and FBI agents and other...

KING: Did they come to you after the conviction and say, "listen Jim, talk to us, and we will go easy on you." -- the old thing we have seen in 100 movies?

MCDOUGAL: They, at the 11th hour, I was convicted and right before my sentencing, I received a letters from them, saying we know you are not able to come up here and travel back and forth to work with us. If you want to cooperate, we will come down to Arkadelphia, we'll meet with you and we will see if something can be worked out. And I agreed to do that.

KING: What, you called them and said OK?


KING: Was that a tough call to make?

MCDOUGAL: Oh, yeah because you know, I -- they are the other side, I mean, politically, you have to go back in my life.

KING: You are a Big "D" Democrat.

MCDOUGAL: I'm a big Democrat as an article of faith. I'm a Roosevelt man and...

KING: And a Clinton man.


KING: We will come right back with Jim McDougal on LARRY KING LIVE. We will be including your phone calls. He is with us for the full hour. Don't go away.


KING: We are back with James McDougal. What did you want from the president he didn't give you? Did you want a pardon? What should he have done so that you didn't do what you did?

MCDOUGAL: I don't think -- well he could have pardoned Susan McDougal. That would have probably...

KING: Your ex-wife who you still are friends with.


KING: You didn't want anything for yourself?

MCDOUGAL: I don't think he could have pardoned me. I mean they would have impeached him if he had pardoned me. It was totally out of the question.

KING: Aside from telling the truth and not wanting to go to prison, why -- to quote the proverbial -- take him down with you?

MCDOUGAL: I think that I started cooperating, as I said, to save my own skin, and then concurrent with my cooperation there were certain things I felt were destructive to the Democratic Party: Web Hubbell, these Chinese plutocrats buying the party of Jefferson. And I'd say that I went from the bear minimum of cooperation to fairly enthusiastic cooperation.

KING: Because you were annoyed with the president?


KING: Disappointed?

MCDOUGAL: Disappointed, yes.

KING: Surprised?

MCDOUGAL: I'm astounded.

KING: What happened, in your opinion, to him?

MCDOUGAL: Apparently it is just that -- money overrode everything. Anything for a dollar.

KING: But not personal money...You told me he wouldn't know his personal worth.

MCDOUGAL: No he couldn't balance a checkbook, as I told you. Nobody is more honest than Bill Clinton when it comes to just personal money. I'm talking about this insane desire to accumulate millions and millions and millions of dollars from the very kind of people that we old-time Democrats thought were the plutocrats, the Wall Street boys, the enemy.

KING: He's a traitor to what you feel is your cause.

MCDOUGAL: I think he has sold out the cause of Jefferson.

KING: But that day, in that office, wasn't he helping your wife? When he said give her the help with the loan, wasn't he doing you a favor?

MCDOUGAL: Well he wasn't doing it because I asked him do. I don't know who sent him there.

KING: No matter what the reason, wasn't he doing something nice for your wife?

MCDOUGAL: Well, yes. Which would also profit, be somewhat to his advantage.

KING: But that gives you no less feeling about turning the tide?

MCDOUGAL: That is not the turn point, really.

KING: What is?

MCDOUGAL: The turning point is that I feel that he led Susan to believe she would be pardoned. She is now in jail. She is in jail because she wouldn't answer a question before the grand jury, not for anything we were convicted of. The grand jury put to her the question "Did Bill Clinton lie to at your trial?" She refused to answer. She is in contempt of court.

KING: There she is, going -- she was on our program the night before she went to jail.

And she said she knows that the prosecutor is out to get her, that the prosecutor is out to get President Clinton, that whatever she answers he's going to distort, that he runs the grand jury -- which prosecutors generally do. And she is in there on principle. So her ex-husband, who cares about her, is turning on the president who she's standing up for while in prison -- this sounds like a comedy script.

MCDOUGAL: Or soap opera.

KING: Yeah. Explain it.

KING: Why is she standing for him?

MCDOUGAL: I can't. I am mystified. I just want her out of jail.

KING: Have you talked to her?


KING: Can you? Could you...

MCDOUGAL: I can't.

KING: Why?

MCDOUGAL: You can't call people. They have to call out.

KING: You can't call in to prison, right?


KING: She could call you if you she wanted.


KING: Do you think she is mad at you now?

MCDOUGAL: I don't know, her brother said the other day they weren't mad at me to the press. I don't know. Susan can call me collect; she knows the number. I would love to talk with her.

KING: Do you respect the principle she is standing for? She doesn't have to be in jail.

MCDOUGAL: I respect her enormously. We could go all day, I mean, and I'm not going say anything bad about Susan McDougal.

KING: I'm not expecting you to. The amazing thing is she is standing up for someone who you are no longer friends with our standing up for.

MCDOUGAL: And for somebody who is doing nothing to help her.

KING: So how do explain that? Explain her loyalty to him.

MCDOUGAL: It's inexplicable.

KING: There were tabloid reports, sometime back, about a relationship. Did you ever buy that -- between Susan McDougal and the president?

MCDOUGAL: I think that is entirely possible. But as I told the producer, I just don't want to discuss that, if we could avoid it.

KING: I'm not going to -- no...

MCDOUGAL: I think there could be a personal and a financial relationship.

KING: In other words, you wouldn't be shocked to learn if there were personal?


KING: But you don't know it for a fact?

MCDOUGAL: I do not.

KING: But you suspect it?


KING: Would that add to the reason for your turning on him?

MCDOUGAL: Oh, I'm sure it would. I tried to think it doesn't, but of course, it is human nature.

KING: Sure, you've got racked up there, right?


KING: How are the people in Arkadelphia treating you, by the way? How are they doing you back home?

MCDOUGAL: I'm sure would like to wring my neck. I've brought them a lot of embarrassment, but it is probably a greater excess of Christian charity in Arkadelphia, Arkansas than anywhere else on earth. People just treat me wonderfully. Every day people come up to me, more than one person, says they are praying for me, good luck.

And people talk about an incivility. I think down where I happen to live, it is the most gentle and decent race of people on the face of the earth. They've been wonderful to me -- far better than they should be.

KING: You really are saying you are getting what you deserve here.


KING: Why are you appealing?

MCDOUGAL: Well -- there was one of the charges I didn't do. I'd like to get that thrown out.

KING: Which was?

MCDOUGAL: The conspiracy.

KING: It was never conspiracy to defraud?

MCDOUGAL: There was not a conspiracy under the charge, no. Listen, let's not confuse people now.

KING: Let's not.

MCDOUGAL: The president is, there was never anything about the president involved in a conspiracy charge against...

KING: The president had nothing to do with illegalities here.

MCDOUGAL: Nothing, that is right.

KING: You're just saying he is lying about that meeting.


KING: He was at the meeting, and saying he wasn't is lying.


KING: But he didn't do anything illegal at the meeting?

MCDOUGAL: That's right.

KING: A governor can say...

MCDOUGAL: Anything he wants to.

KING: And he could also say this woman is entitled, give her a loan, if she's entitled. Right? It's not illegal.


KING: He didn't say hey, take care of her, I will take care of you.


KING: Are you a friend of David Hail's?

MCDOUGAL: No. I never was a friend of David's. I knew him, briefly, at the University of Arkansas, when we were students and I had not seen him probably for 20 years, until we did this business, with the loan.

KING: So in truth, James, had you been found not guilty, we never would have learned this.

MCDOUGAL: That is true.

KING: As you said, it was out to save your own skin.


KING: Will that be taken into consideration in any future possible indictments here, because they are going to say you're going to be a tainted witness. Let's say the -- worst comes to worse, the president's indicted. You're a witness. You're a tainted witness. They could show the tape of your first appearance on this show, right?

MCDOUGAL: Sure. And while that's the thing that I really want to emphasize, I'm not asking anyone to believe me one way or the other. My viability as a witness is the prosecution's worry, not mine.

KING: You think, from what you are talked to and in talking to prosecutors, there could be indictment of a high office?

MCDOUGAL: As another political science teacher, could I give you my opinion on it?

KING: Sure can.

MCDOUGAL: I don't you think can indict the president. I think it would have to be a bill of impeachment brought by the House, and he has to be tried by the Senate. I don't think you can drag the president down to Circuit Court, charge him with a felony.

KING: The prosecutors who you dealt with when were you talking to them -- did they seem fair-minded, or did they seem as ex-wife seems to think, Republicans zealots?

MCDOUGAL: Well, she is talking about Mr. Starr, primarily, and I haven't talked...

KING: How about the other people working with him?

MCDOUGAL: Actually, two of them are liberal Democrats, and they're the people I talked with all during the trial. So we were already on an amiable basis.

KING: Thinking that Starr only has people of a political persuasion working for him are wrong?

MCDOUGAL: No, he has at least two liberal Democrats, I know. One from Texas and one from Illinois.

KING: Clinton has made no, the president has made no attempt to contact you.


KING: I mean since all this.

MCDOUGAL: No, sir.

KING: When was last time you spoke to the president?

MCDOUGAL: At the deposition at the White House. About a year ago, I think.

Larry: You were friends then?


KING: Did he treat you friendly?

MCDOUGAL: Oh, yes, we had we have a fairly long conversation there.

KING: How do you think he feels now?

MCDOUGAL: I have no idea.

KING: Is Hillary in trouble?

MCDOUGAL: Well, she should try to keep available good counsel.

KING: You are implying she might be?

MCDOUGAL: She might be.

KING: We will be back with James McDougal. We'll be including your phone calls. Tomorrow night, the Dalai Lama will be with us, plus Richard Gere. This is LARRY KING LIVE, we'll be right back.


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