A high-spending wife pours oil on Whitewater: Susan McDougal, once married to a former Arkansas business partner of the Clintons, refuses to point finger at 'First Couple'

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A sobbing Susan McDougal, former wife of the Clintons' business partner James McDougal, emerged from hiding this week to deny that the Clintons did anything wrong in the Whitewater affair. 'Susan does not want to address the Clinton question,' her lawyer told a room full of disappointed journalists who had hoped for juicy memories of the business life of Little Rock in the mid-eighties.

Mrs McDougal's main role in her husband's rocky business was to spend the money he made as owner of the Madison Guaranty bank and other enterprises. It was she who spent dollars 600,000 ( pounds 400,000) converting an old laundry into the art deco headquarters of Madison. Her husband, even at the height of his success, lived in a modest apartment, but she managed to spend dollars 1m in renovations on the dollars 200,000 house she lived in.

Divorced but still on friendly terms with her former husband, she is now in even deeper trouble than him after being indicted in California for stealing dollars 200,000 from Zubin Mehta, the conductor, for whom she was book-keeper.

Both the McDougals have tried, with intermittent success, to avoid the press. She went to ground with her boyfriend in Nashville, Tennessee. Jim disappeared after journalists staked out his mobile home in Caddo Valley, Arkansas.

Mr McDougal did make one of his rare appearances on television at the weekend to complain the Clintons had broken their promise to return documents relating to Whitewater, the real estate company he jointly owned with them, which he needs for his 1993 tax returns. 'I wish they'd send them on down to me,' he said. Otherwise he believed Bill and Hillary Clinton were 'guilty of no crime'.

His fame is presumably making him some money so he no longer has to rely on the dollars 560 a month social security he has received since he was forced out of Madison in 1986. At his trial for fraud in 1990, of which he was acquitted, he asked the court to appoint a lawyer because he had no assets.

It is a long way from the days when Jim McDougal was a rising star in the intertwined political and business worlds of Arkansas. At the beginning, in 1961, his career seemed poised to take off like Bill Clinton's. Born in 1940 on the Ozark plateau in northern Arkansas, on the banks of the White River, which his real estate deal with the Clintons was to make famous, Jim McDougal directed his first local Democratic campaign at the age of 18.

By the age of 21 he had moved to Washington to work for a Democratic senator. Three years later he was back in Arkansas, combining an active political life with his first efforts to make a lot of money. In 1968, returning to politics full-time, he was put in charge of the Little Rock office of Senator William Fulbright, who was also a mentor of Bill Clinton's.

Mr McDougal did business deals on the side, joining Senator Fulbright in buying dollars 70,000-worth of land in 1973. A year later Fulbright, one of the Senate's most powerful men, was surprisingly defeated in a primary and Jim McDougal briefly took an academic job before returning to Little Rock two years later to start the final phase of his business career and to renew his friendship with the 30-year old Arkansas Attorney-General, Bill Clinton.

In 1978, the year Mr Clinton was first elected governor, he and Hillary joined with Mr McDougal to set up the Whitewater Development Co, buying 230 acres of land for dollars 220,000. Mr McDougal also bought and rapidly expanded Madison Guaranty.

He has not held a job since he left Madison in 1986. A recovering alcoholic, he has partially lost his eyesight. Some crumbs may come his way from journalists seeking interviews but otherwise he says: 'You become a pariah. Friends say encouraging things to you, but there's just that feeling of helplessness.'

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