Whitewater Probe Targets Ex-S&L; Chief

A lawyer for James B. McDougal, President Clinton’s former business partner, said Wednesday he has been notified that his client is a target of the Whitewater investigation and that he believes independent counsel Kenneth W. Starr is nearing an indictment of the former owner of the failed Madison Guaranty Savings & Loan.

In an interview Wednesday, McDougal’s attorney, Sam Heuer, said McDougal, the Clinton family’s former partner in the Whitewater real estate venture, was notified Tuesday in a three-paragraph letter that he is now officially a target of Starr’s probe. Such letters are commonly sent by prosecutors preparing to seek a grand jury indictment.

Heuer said prosecutors invited McDougal to come in for an interview, but the lawyer added he is doubtful that McDougal, who was cleared in an earlier case involving a Madison Guaranty real estate deal, would bargain with Starr’s office.

The independent counsel would likely try to use McDougal’s explanations of Madison Guaranty real estate deals to expand his investigation, not clear his client, Heuer said.

“I think they’d love to make a deal with McDougal,” Heuer said. But he said that even if McDougal knew of any criminal activity, “I’m not sure it would be significant enough for their needs. It looks to me as if we’re heading toward a trial.”

Meanwhile, Gov. Jim Guy Tucker, Clinton’s successor in Arkansas, on Wednesday reacted angrily to press speculation that he is on the verge of indictment in the Whitewater matter. He said he has not been informed he is a target.