Doctor Says McDougal Has Memory Loss

James B. McDougal, President Clinton’s former investment partner and the central figure in the Whitewater saga, suffers from severe mental problems and no longer has a reliable memory of pivotal events in the complex scandal involving the President and First Lady Hillary Rodham Clinton, a psychiatrist testified Wednesday.

Robert Gale, who has frequently examined McDougal over the past five years, said the former savings and loan owner is bipolar--also known as manic-depressive--and has a blocked carotid artery that deprives him of the normal flow of blood to the brain.

He said these difficulties, combined with the aging process and the effects of medication, have left McDougal, 55, with a memory loss about 50% greater than a normal man his age and has prevented him from remembering most important details of events at issue in his upcoming trial.

“It makes him unreliable,” declared the psychiatrist as he finished two days of testimony at a federal district court hearing leading up to the first criminal trial on charges brought by Whitewater independent counsel Kenneth W. Starr.

Gale’s testimony, which he offered on behalf of a defense motion to drop fraud charges against McDougal, came as no surprise to McDougal’s friends or others who have questioned him about his joint investment with the Clintons in the Whitewater real estate venture.

McDougal has never made a secret of his emotional problems, which are treated with lithium and Prozac.

While it is unlikely that his problems will prevent him from standing trial in early March, along with his former wife, Susan, and Arkansas Gov. Jim Guy Tucker, the testimony does call into question many public statements McDougal has made about Whitewater.

Indeed, when the prosecution played videotapes of early McDougal interviews on the subject, Gale noted how McDougal often tried to mask his lack of memory with bluster and sweeping conclusions.

Yet Gale indicated that McDougal’s memory loss does not necessarily impeach his account of events specifically involving Clinton. He said McDougal has a better memory of events involving people with whom he has emotional ties, such as his mother, the president and Tucker.

In fact, the psychiatrist said he has reason to believe McDougal’s story about how the then-governor asked him in 1985 to pay a $2,000-a-month retainer to Mrs. Clinton. Gale noted that McDougal remembers that Clinton had jogged to his office to make the request and left perspiration stains on the thrift owner’s new leather chair.

“It shows you the nature of this man’s memory,” Gale said. “The stain on his new chair was an insult to him. He remembers that on an emotional level. . . . When it affects him on an emotional level, he’ll [remember] a little bit more.”

Clinton has denied any recollection of such a meeting, and Mrs. Clinton has suggested that her law firm won McDougal’s business primarily on the basis of the efforts of a junior associate, not because of her or her husband.

Using the same reasoning, Gale cast doubt on another central allegation in the Whitewater affair. He noted that McDougal has no memory of a 1986 meeting in which he and Clinton allegedly asked Municipal Court Judge David Hale, now the government’s star witness, to make an improper loan from Hale’s government-backed small business investment firm.

Some of the $300,000 loan, which Hale gave to McDougal’s wife, ended up in the account of the Whitewater real estate development owned by the McDougals and the Clintons. This loan is the basis of allegations that the Clintons benefited from McDougal’s improper financial dealings.

McDougal also denies that he or Clinton ever put pressure on Hale to make the loan. Because McDougal usually remembers events involving Clinton, Gale indicated that he doubts Hale’s story.

It was also disclosed in court Wednesday that Starr has spent at least $56,000 over the past two years to keep Hale in protective custody before he testifies.

Gale bolstered his diagnosis by referring to a 1993 conversation between McDougal and Hale that was tape-recorded by Hale without McDougal’s knowledge. Under prodding from Hale during the taped conversation, McDougal could not recall any of the financial transactions.

Gale said the only thing McDougal now remembers about that interview was that his now-deceased mother was upset when she learned that Hale had taped him without his knowledge.

In an effort to refute Gale, the prosecution played the tape of a conversation in 1992 between McDougal and Sheffield Nelson, a Republican who later lost a challenge to Tucker for the governorship. The prosecution noted that McDougal remembered in that conversation the precise terms of a loan he had made to Tucker.

But Gale argued that McDougal remembered it only because he thought he had been cheated by Tucker, and thus he had an emotional stake in remembering the details of the transaction.

Only once during Gale’s lengthy testimony did McDougal, who was present in the courtroom, show signs of being upset by this discussion of his mental capacities. For several minutes, he held his face in his hands.

Outside the courtroom, McDougal was asked if he could shed any light on the controversy over the extent of legal work that Mrs. Clinton did for his savings and loan. He said he never talked to her after she was hired and had no knowledge of her work.

Meanwhile, a new poll indicates that the continued allegations about Whitewater and the White House travel office firings have taken a toll on the popularity of at least Mrs. Clinton. A record 54% of Americans now regard her unfavorably. That rating is 5 percentage points worse than the president’s lowest rating, recorded last February when 49% of Americans viewed him unfavorably.

Yet Mrs. Clinton’s problems have so far not rubbed off on the president, according to the poll by the Pew Center for the People & the Press. As her popularity declined, the president’s rose, and he now has a relatively healthy 56% to 42% favorable rating, the poll found. The phone survey of 1,200 adults was conducted Jan. 11-14. It has a margin of error of plus or minus 3 percentage points.