Related topics

After 33 Witnesses, It’s Defense’s Turn

May 5, 1996

LITTLE ROCK, Ark. (AP) _ After 33 government witnesses and more than 1,000 documents were paraded in front of a federal jury, three Whitewater defendants this week have a chance to present their versions of old financial dealings.

But they may not do it. An attorney for James McDougal, President Clinton’s former partner in the Whitewater land development, said asking the jury to decide the case on the information it has already received would not be out of the question.

The defense could rest its case quickly because it doesn’t believe the special prosecutors proved their case beyond a reasonable doubt, McDougal attorney Sam Heuer hinted.

When the Office of the Independent Counsel wrapped up its case Friday after nine weeks of testimony, broad smiles went up from the defense table.

Heuer muttered ``yes″ under his breath, loud enough for the jury the hear. Bobby McDaniel, attorney for McDougal’s ex-wife Susan McDougal, pumped his fist, ever so slightly.

McDaniel, too, said giving the case to the jury quickly could be an option. W.H. ``Buddy″ Sutton, representing the third defendant, Gov. Jim Guy Tucker, said he couldn’t think of a witness who scored big points for the million-dollar-a-month Whitewater prosecution.

``It’s a very expensive, unconnected collection″ of stories, Sutton said.

Lead prosecutor W. Ray Jahn said he was pleased with the effort.

``I feel confident. The case went very well,″ Jahn said. ``We believe that we’ve presented ample evidence that will permit the jury to draw the same inference that we have.″

A special grand jury handed up a 21-count fraud and conspiracy indictment against Tucker and the McDougals in August 1995 alleging misuse of $3 million in federally backed loans. McDougal is named in 19 counts, Tucker 11 and Mrs. McDougal eight.

The common thread of the charges is that they involved David Hale, who ran Capital Management Services Inc., a federally backed lender.

Hale testified he and the defendants arranged deals to benefit themselves, their associates and members of what Hale said McDougal called Arkansas’ ``political family.″ Hale said Clinton, then Arkansas governor, benefited from one of the deals.

But the defense said Hale’s motives were clear _ he was telling prosecutors what they wanted to hear because he faced nearly five years in a federal prison on two unrelated fraud charges. If he could hand over Clinton, the defense lawyers said, he could win a shorter sentence.

Hale got his shorter sentence _ 28 months _ but the prosecution didn’t get Clinton. No one backed up Hale’s story that Clinton directly benefited from any of the deals.

The prosecution’s final witness testified that $50,000 of the proceeds from a $300,000 loan to Mrs. McDougal _ a loan that prosecutors say was illegally spent _ went into a pair of Whitewater Development Corp. purchases.

But at the time McDougal was calling the shots, not Clinton, even though the president and Hillary Rodham Clinton were 50-50 owners with the McDougals in the company that developed land in northern Arkansas.

``Everything they do is calculated to leave a bad impression,″ Heuer said. ``Let’s create bad images because we don’t have the evidence.″

In the prosecution scenario, the defendants plotted an elaborate scheme to make fraudulent loans, spend the money illegally and repay the notes without alerting federal regulators.

The prosecution included extensive documentation that posed serious questions about whether loans were used for their stated purpose.

Prosecutors also put on witnesses who said that, yes, they did conduct some of the transactions mentioned in the indictment. For example, Lorita King, Tucker’s secretary at his Little Rock law firm, said she wasn’t aware Tucker listed her as an official in some of his companies until the investigation began.

With the government’s accounting of all 21 counts now done, the defense gets to trot out its own paperwork, witnesses and theories, if it chooses to do so.

Handwriting experts could come forward to say some of the government’s evidence was created by forgers, Hale in particular, trying to hide their own trails.

Defense attorneys also haven’t ruled out recalling some government witnesses and others to discredit Hale and further their theory of a politically motivated prosecution intended to embarrass Clinton.

Among them could be Bob Leslie, a prominent Republican who prepared documents for some illegal transactions to which Hale pleaded guilty. Leslie was not charged.

Update hourly