Whitewater Figure’s Ex-Wife to Be Tried in Embezzlement

Susan McDougal, whose ex-husband put together the failed Whitewater investment deal that has dogged President Clinton, was ordered Monday to stand trial in Santa Monica on charges of embezzling more than $150,000 from conductor Zubin Mehta and his wife, Nancy.

Deputy Dist. Atty. Jeffrey Semow said the seven felony counts stem from forged checks and unauthorized credit card purchases made during three years when McDougal was Nancy Mehta’s personal assistant and bookkeeper.

The irregularities came to light in 1992 when a bank called Mehta for permission to exceed a credit card’s $10,000 limit--a card Mehta said she never knew existed, Semow said.

McDougal and her husband at the time, James McDougal, a failed Arkansas savings and loan owner, were partners of President Clinton and his wife, Hillary Rodham Clinton, in the Whitewater real estate investment.

Whitewater continues to be investigated for alleged improprieties, amid denials that it was anything another more than a money-losing investment for both couples.

McDougal’s attorney in the local embezzlement case said his client is innocent because she had full authority from Nancy Mehta for the disputed expenditures.

“All expenses were for the Mehtas’ benefit and are with their approval,” attorney Leonard Levine said.

Levine said financial records will show that Mehta on occasion used the credit card she says she knew nothing about. He chalks up the charges to a falling-out between the two women after McDougal resigned.

Semow agrees that there was a falling-out, but said it stemmed from Mehta’s discovery of the alleged deception by McDougal, whom she had thought of as a daughter.

While the Mehtas traveled extensively, McDougal ran their household and paid the bills, Semow said. The Mehtas deny granting permission for McDougal to use their credit card for personal expenses, including trips to Arkansas and Texas, and clothing purchases at Saks Fifth Avenue.

On one trip to Dallas, the prosecutor said, McDougal spent $9,000. “She went on one heck of a shopping spree,” Semow said.

McDougal contends that these expenditures were agreed-upon overtime payments for added responsibilities that she took on when she replaced the couple’s bookkeeper.

McDougal is free on $20,000 bail.