Check to Clinton a Loan, McDougal Says

Imprisoned Whitewater figure James B. McDougal claims that a recently discovered 1982 cashier’s check payable to Bill Clinton was a loan from McDougal’s S&L; and that the two men agreed to conceal the transaction.

Clinton has testified under oath that he never got a loan from the institution. McDougal says the cashier’s check and other newly found documents contradict Clinton and provide a major break for Whitewater prosecutors.

“They’re going to hang them with the documents that they got,” McDougal said in a telephone interview. “It certainly proves the chief executive perjured himself when he said he never obtained a loan from Madison Guaranty.”

President and First Lady Hillary Rodham Clinton’s Whitewater lawyer, David Kendall, said McDougal cannot be believed because he keeps changing his account of Whitewater, a failed real estate venture.

McDougal, who defended President Clinton before deciding to cooperate with Whitewater investigators after his conviction on 18 felony counts, leveled his latest allegations against his old Arkansas friend Monday from a federal prison medical center in Fort Worth.

A 1982 cashier’s check payable to Clinton for $27,600 was among thousands of pages of long-missing documents from McDougal’s savings and loan discovered last March in a tornado-damaged car abandoned about a decade ago near Little Rock, Ark..

The check wasn’t endorsed by Clinton, who testified last year that he never borrowed from McDougal’s thrift.

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McDougal said the cashier’s check represented the proceeds of a loan to Clinton from McDougal’s Madison Guaranty Savings & Loan and was used to pay off a Whitewater debt at the other financial institution McDougal owned, Madison Bank & Trust.

McDougal said that “Clinton and I had gotten worried about having his name on the loan” for $27,600, so the obligation was moved out of Clinton’s name.

According to McDougal, the loan to Clinton was repaid by someone other than him or Clinton. The repayment, said McDougal, was followed by a series of related transactions culminating in a fraudulent, federally backed loan for $300,000 that was the focus of last year’s Whitewater trial. A jury convicted McDougal, his ex-wife, Susan, and then-Gov. Jim Guy Tucker.

“Mr. McDougal has never told this story before, no loan documents support it and it is flatly contradicted by the contemporary bookkeeping entry of his own accountant,” Kendall said. “Given his own previous testimony under oath and his present circumstances, Mr. McDougal is hardly a paragon of credibility.”

Deborah Gershman, a spokeswoman for Whitewater prosecutor Kenneth W. Starr, declined to comment.

Asked about the Clintons’ consistent contention that they were passive investors in the Whitewater land venture, McDougal replied: “I’ve never known the Clintons to be passive about anything.”

McDougal also complained that he had been punished after the documents found in the car trunk were disclosed Thursday.

A prison spokeswoman, Sue Beasley, said McDougal was ordered into “disciplinary segregation” for seven days after refusing to provide a urine sample randomly requested for contraband testing.

McDougal said he was unable to give the sample because of the medications he takes for various health problems.