Whitewater Witness’ Story Questioned

Defense attorneys charged Thursday that the government’s key Whitewater witness has offered a number of differing accounts of a mid-1980s financial conspiracy that allegedly included President Clinton.

Sam Heuer, attorney for Clinton’s former investment partner, James B. McDougal, attacked the credibility of prosecution witness David Hale at the outset of cross-examination in the trial of McDougal, his ex-wife, Susan, and Arkansas Gov. Jim Guy Tucker.

But Heuer’s emotionally charged cross-examination did little to ruffle Hale’s studied composure. Hale strongly resisted the defense’s insinuations that he had fabricated the conspiracy to win leniency from Whitewater independent counsel Kenneth W. Starr.

“You’re slick; you’re good,” Heuer finally conceded in frustration. “I’ve never cross-examined anyone as slick as you.”

Nevertheless, Heuer succeeded in showing that some parts of the story told by Hale from the witness stand over the last three days are not identical to statements he had made in earlier interviews with the FBI and the press.

The case is being tried by Whitewater prosecutors because some of the money involved in the alleged $3-million fraud scheme was funneled through the bank account of the Whitewater resort development that the McDougals owned jointly with Clinton and his wife.

There is no evidence that the Clintons benefited personally from the transactions in question. The president is expected to testify by videotape later in the trial that he was not involved in the scheme.

In his direct testimony, Hale, a former municipal judge, asserted that he conspired with Tucker, the McDougals, then-Gov. Clinton and others to defraud two federally backed institutions--a savings and loan operated by James McDougal and a small business investment corporation run by Hale.

Under cross-examination by Heuer, Hale conceded that he had given an entirely different account of these events when he was interviewed initially by an FBI agent in 1989. But he insisted that he had lied in an attempt to save himself and his alleged co-conspirators from being charged with a crime.

“They would have locked me and Jim Guy up that day and sent a paddy wagon after Jim McDougal. . . ,” he said. “We would have been in this courtroom much earlier.”

Before the FBI interview, he said, he had been warned by Tucker to “be careful what you say, and tell them as little as you can.”

Heuer produced a transcript of an interview that Hale granted to Cable News Network on Nov. 24, 1993, in which he gave a somewhat different account of a kitchen-table meeting with James McDougal and Tucker in late 1985. It was at this meeting that the conspiracy was hatched, according to Hale.

Hale insisted that details of the meeting are unimportant. “An agreement is a meeting of the minds and that’s what we had. . . ,” he told the jury. “We did not discuss any specifics that night.”

Heuer charged that Hale had lied many times to the Small Business Administration, which underwrote the loans he made from his investment company. Hale refused to respond when Heuer asked: “How many hundreds of lies did you tell the SBA?”

Heuer questioned the plausibility of Hale’s testimony that he had jeopardized his own family’s financial security to satisfy a request from Tucker, McDougal and Clinton to help unspecified members of the Arkansas Democratic “political family.”

Hale admitted that he never asked his alleged co-conspirators to identify the people who were to benefit from this deal or to explain why they needed his help.

Hale acknowledged under oath that in exchange for his cooperation with the independent counsel, he has received a total of $63,000 from the government over the last two years to pay for food, shelter and car repairs. He said that he always received the money in cash.

At one point, the courtroom reacted in wild laughter when Hale recalled receiving a telephone call from Tucker in the spring of 1993 after a local newspaper printed a story about one of the deals involved in the case.

He said that Tucker assumed the information had been uncovered by the national media because “the article discloses some facts no member of the Arkansas press has an IQ high enough to dig out.”