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First lady says she knew nothing about loan

By Pete Yost, Associated Press, 03/16/99

LITTLE ROCK, Ark. - In a grand jury videotape made public for the first time Tuesday, Hillary Rodham Clinton testified she ``never spent any significant time at all'' monitoring records of the Whitewater land deal she and President Clinton shared with Jim and Susan McDougal.

Mrs. Clinton also said on the tape, played at Mrs. McDougal's trial, that she was unaware of a $27,600 loan for Whitewater taken out in Bill Clinton's name a decade before he became president.

Forty minutes of the first lady's testimony, recorded at the White House last April, were played for the jury in the trial of Mrs. McDougal, who is charged with criminal contempt for refusing to answer Independent Counsel Kenneth Starr's questions about the loan and other aspects of the couples' Whitewater business dealings.

The new attention comes at a sensitive time for Mrs. Clinton, as she is considering a run for the U.S. Senate from New York.

She told the prosecutors repeatedly that she had little information to give.

``I have never seen these documents before and have no information about them,'' she said when asked about a 1982 Clinton loan that prosecutors allege is linked through a series of transactions to a fraudulent $300,000 loan to Mrs. McDougal 3 years later.

Clinton testified at the McDougals' trial in the spring of 1996 that he had never borrowed money from the savings and loan the McDougals owned in the 1980s. Three months later, Jim McDougal told Starr's office that Clinton had signed documents for the transaction. Jim McDougal has since died.

Mrs. Clinton, wearing a yellow suit and serious expression, appeared on two television monitors in the federal court Tuesday. Her deposition was taped at the White House on April 25, 1998, with her lawyers present and played for the Whitewater grand jury four days later.

During the questioning, she often put on reading glasses to review documents shown to her by Starr deputy Hickman Ewing Jr., at one point complaining, ``I can't see anything anymore.''

Mrs. Clinton's clipped, businesslike but polite answers contrasted with the low-key, friendly approach of Ewing, a career federal prosecutor from Memphis, Tenn.

Ewing underscored the seriousness of the occasion by reminding Mrs. Clinton of her constitutional rights: ``You ... have the right to refuse any question if the truthful answer would tend to incriminate you. Do you understand that?''

``Yes I do,'' Mrs. Clinton replied.

When shown a Nov. 15, 1982, cashier's check for $27,600 made payable to ``Bill Clinton,'' Mrs. Clinton answered, ``I'm sorry, Mr. Ewing, I don't know anything about this.''

After another question about the loan, she explained, '' I never spent any significant time at all looking at the books and records of Whitewater.''

Starr's office is using Mrs. Clinton's videotape in an attempt to convict Mrs. McDougal of criminal contempt and obstruction for refusal to cooperate with prosecutors. Given Mrs. Clinton's assertions that she knows little or nothing about the matters in question, prosecutors told U.S. District Judge George Howard that they have nowhere to turn for answers but to Mrs. McDougal, who watched the videotape intently.

After seeing the videotape, Mrs. McDougal's lawyer, Mark Geragos, said if he had known what was on it he would have introduced it himself as evidence.

Prosecutors ``weren't doing anything here but stalking the president and first lady and they were using Mrs. McDougal to get to that,'' Geragos said.

``I don't see that there's anybody that can follow'' the complex financial transactions that Ewing walked Mrs. Clinton through, he said. Prosecutors ``spent and wasted taxpayers' money of $40 million on absolutely nothing,'' he added.

Ewing questioned Mrs. Clinton on several subjects:

-A $5,081.82 check signed by Mrs. McDougal and bearing the notation ``payoff Clinton.'' The check was used to make a payment on the Clinton loan. Mrs. Clinton said ``I do not know'' anything about the check.

-Mrs. Clinton's law firm billing records that indicate she spoke with Mrs. McDougal on July 18, 1985, at a time when the McDougals were desperately trying to save their floundering S&L. Mrs. Clinton said ``I do not'' know anything about the conversation revealed in the billing records, which turned up inside the White House in 1996 two years after prosecutors subpoenaed them.

The president has never been questioned about the $27,600 loan, which wasn't discovered until early December 1996 when FBI agent Mike Patkus, who works for Starr, found a microfilmed copy of the cashier's check. The original of the check turned up in 1997 in the trunk of a tornado-damaged car abandoned at a repair shop a decade earlier by an employee of the McDougals' S&L.

In 1996, Mrs. McDougal was given limited immunity from prosecution by Starr's office in order to compel her testify. She still refused and was jailed for civil contempt. Then she was charged with criminal contempt because Starr deemed her a crucial witness to the Whitewater prosecution.



 


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