Prosecution Rests in Whitewater Trial

LITTLE ROCK, Ark. — Prosecutors rested their case against Gov. Jim Guy Tucker and President Clinton’s former business partners Friday without showing how Clinton benefited from a $300,000 loan, as another witness had claimed.

David Hale, the Whitewater prosecutor’s chief witness, testified a month ago that James B. McDougal and Clinton benefited from the loan, which was made in the name of an advertising business operated by McDougal’s then-wife, Susan.

But an FBI agent’s testimony Friday made no direct link between the loan proceeds and Clinton, leaving the issue hanging after nine weeks of testimony.

Tucker and the McDougals are accused of fraud and conspiracy. Prosecutors say they illegally obtained nearly $3 million in loans from a pair of federally backed banks.

Clinton has not been charged. He was called to testify as a defense witness by the McDougals, who say that only Clinton could counter claims that Hale made during two years of cooperation with Whitewater prosecutors.

The jury is off until Tuesday. U.S. District Judge George Howard Jr. will hear arguments Monday about defense requests for directed verdicts. Defense attorneys said they would consider not calling any witnesses.

“I don’t think there’s a reasonable doubt about there being a reasonable doubt,” said W.H. “Buddy” Sutton, one of Tucker’s attorneys.

If the defense does put on a case, it is expected to last three to four weeks. The prosecution presented 33 witnesses.

Prosecutor Ray Jahn said it was not important to link Clinton to money from the $300,000 loan, even if the omission might undermine Hale’s credibility.

“We do know it was Mr. McDougal and Mrs. McDougal who controlled how the money was spent,” Jahn said. It was only necessary to prove that it was not spent on Mrs. McDougal’s Master Marketing business, he said.

Hale claimed that Clinton asked him for a $150,000 loan in January 1986 and that James McDougal later asked Hale to increase the loan to $300,000 and write a check payable to Master Marketing.

Jahn said Friday that Hale didn’t know what happened to the money, but under prosecution questioning April 2, Hale testified the money ultimately went to James McDougal and Clinton.

When asked who would pay back the money, Hale said then, “I was looking to Jim McDougal and Bill Clinton.” When asked who benefited from the loan, Hale said, “Jim McDougal and Bill Clinton.”

But FBI Special Agent Michael Patkus’ accounting of the money Friday did not mention the president by name. Of the $300,000, he referred to only two payments, totaling about $50,000, that could have benefited Clinton as a Whitewater partner, and he did not make a direct connection.

Patkus said $25,000 of the loan was used as a down payment on land south of Little Rock that the Whitewater partnership bought. Another $24,455 covered a Whitewater payment to a realty company for land the company owned in northern Arkansas.

While the Clintons and McDougals were joint owners of Whitewater, James McDougal ran it.

Clinton lawyer David E. Kendall said last month that Clinton has unequivocally denied Hale’s claims. Clinton gave videotaped testimony last Sunday. It could be played as early as next week.