Key figure in Whitewater affair faces new round of charges four decks here

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The Independent Online
SUSAN MCDOUGAL, a central figure in the Whitewater affair, was indicted yesterday on three charges relating to her refusal to testify in the case. The indictment was announced almost two years after Mrs McDougal first refused to co-operate with the investigation and four days before the grand jury investigating the complex Arkansas land deal reaches the end of its mandate.

The chief targets of the investigation are Bill and Hillary Clinton, who invested in the Whitewater project and occupied the Arkansas governor's mansion in the mid-Eighties when the deal went sour. So far, though, the four-year-old inquiry has failed to uncover criminal wrongdoing on their part.

Mrs McDougal, who was a partner in the failed project, was subpoenaed by the grand jury to give evidence, but preferred to go prison than reveal what she knew. An articulate and forceful woman, she served the maximum 18-month sentence for civil contempt and indicated in numerous interviews that she was quite prepared for new charges if they were brought.

She is still in prison, this time on fraud charges connected with the failed local bank, the Madison Savings and Loan company which was owned by her then husband, Jim McDougal, and backed the Whitewater project.

The new charges facing Mrs McDougal are two counts of criminal contempt of court and one count of obstruction of justice; all derive from her refusal to testify. She is seen by the independent prosecutor, Kenneth Starr, as a key to the investigation because she may know details of the legal work done for the bank by Mrs Clinton. Her testimony has become crucial since the death of Jim McDougal in prison.

Jim McDougal, who was by then divorced from Susan, reportedly offered evidence against the Clintons in return for a lighter sentence, but died before he could complete it.