Spending of Nancy Mehta Described

Nancy Mehta didn’t bat an eye at flying a favorite plumber from Los Angeles to Europe to fix leaks at her Italian villa. Or at picking up the tab, said to be $100,000 complete with gazebo and koi ponds, for a cousin’s wedding.

And, when her husband, famed conductor Zubin Mehta, told her he wanted a divorce, she immediately dispatched an intermediary to New York, paying $1,800 for a first-class seat, so, she said, the man could “talk to Zubin and listen to him” on her behalf. It paid off: The couple reconciled.

Described by other witnesses as generous to a fault, Nancy Mehta brought her dog-walker’s 12-year-old niece, Darla Motley, into her home to raise as her own. It was an upbringing that included expensive boarding schools and summer camps and even a personal shopper to help pick out shoes.

So, it wasn’t at all out of character that when Susan McDougal came to work for her, Mehta treated her to a fancy lunch and bought her classy business clothes.

Yet despite her vast wealth, or perhaps because of it, the picture of Mehta that emerges from her seven days on the witness stand is that of a woman who befriended the help and had no idea--much less, control--of what was happening with her money.

The prosecutor, Jeffrey Semow, says that made Mehta a perfect mark for McDougal’s alleged pilfering. But defense attorney Mark Geragos contends that Mehta made McDougal a scapegoat for her own financial mismanagement after the two women, who were for a time close friends, had a falling-out.

McDougal’s Fiance Worked for Mehtas

McDougal, a former business partner of Bill and Hillary Rodham Clinton who became famous because of her refusal to cooperate with Whitewater investigators, is on trial in Santa Monica for embezzlement. She stands accused of forging Mehta’s name on a credit card application, racking up about $90,000 in unauthorized charges on that card, and of forging checks for $60,000 more in personal expenses.

The embezzlement case has nothing to do with Whitewater, the 20-year-old land deal that launched the independent counsel’s probe of President Clinton. Whitewater resulted in a two-year sentence for a wire fraud conviction against McDougal, who also was jailed for 18 months for refusing to talk to a grand jury about her business dealings with the Clintons.

The court proceedings in Santa Monica have focused instead on McDougal’s life with the Mehtas. She was introduced to them while standing in line at a Westwood movie theater with her fiance, Eugene “Pat” Harris, who worked for the couple.

Her marriage to James McDougal was over, and the couple’s Arkansas real estate and banking dealings in ruins when she accompanied Harris to California in 1988 to start over. The Mehtas found Harris through an employment agency. McDougal, meanwhile, entered the celebrity food chain as an assistant to Armand Hammer’s grandson at Occidental Petroleum.

When Harris headed off to law school, his fiance took his place as an assistant at Nancy Mehta’s property management company. Mehta was impressed that she had worked at Occidental and for someone of Hammer’s stature.

“Oh, I was sure she could work for me because I felt, being able to work at this level with this company, she was very competent,” Mehta testified.

She handled household expenses and her own business, she said, adding that Zubin Mehta was far too busy, and was abroad most of the time. “Mr. Mehta doesn’t have a minute in his day to think about anything but his work,” she told the jury.

Before she married Zubin Mehta about 29 years ago, Nancy Kovack was an actress. She appeared on the television sitcom “Bewitched,” where she played Darrin Stephens’ former girlfriend.

By the time she hired McDougal, Mehta was trying her hand at the real estate business. From a potting shed behind the couple’s Brentwood mansion, she ran a property management company called Ambience that dealt with the couple’s five Westside investment properties. Among her former tenants, according to published reports, was actor Tom Hanks and his family.

Paid for Cousin’s Education, Wedding

She was social, appearing regularly at fashion shows and other charity fund-raisers, where she sat cheek-to-jowl with members of Hollywood’s social elite--Betsy Bloomingdale and the Frank Sinatras, the Kirk Douglases and the Gregory Pecks.

The Mehtas’ households were run by dozens of employees who came and went. A houseman prepared steaks for Tarras, Nancy Mehta’s pet borzoi, and picked up food for Mehta and her assistants from fancy Westside restaurants.

Zubin Mehta has four children, none of them with Nancy, according to testimony. Defense attorney Geragos contends that Nancy Mehta told McDougal to spend money and empty out the couple’s accounts each month in a scheme to keep it away from her husband’s children.

At one point, according to testimony, Susan dyed her dark hair blond and wore it long and loose like Mehta’s. When Mehta wasn’t around, McDougal wore her clothes. After McDougal admired her boss’ Ralph Lauren jeans, Mehta gave her a pair just like them. On at least one occasion at the upscale Vicente Foods market, where the family bought groceries, a manager mistook her for Nancy. Susan did nothing to correct his mistake.

Grilling Mehta for nearly six days and forcing her to review pages upon pages of documents about her home and business expenses, Geragos worked to undermine her credibility. The result: testimony laced with contradictions large and small.

As she stepped off the witness stand on Friday, Mehta maintained that she never had authorized McDougal to sign her name on credit card receipts, checks or other documents. But she had acknowledged under cross-examination that she did allow others, including her cousin, to sign her name at times. And she reluctantly acknowledged a single incident in which McDougal had signed for her.

According to her testimony, Mehta once mistakenly suspected a former bookkeeper of stealing from her, but never suspected McDougal until a bank fraud officer called her in Europe in mid-1992.

At the meeting where she, her lawyer and accountant confronted McDougal, Nancy Mehta got her a glass of orange juice after McDougal complained she hadn’t eaten breakfast.

Such generosity was not uncommon.

The Mehtas paid to put a favorite cousin of Nancy’s, Lorraine Kovack-Padden through law school. She studied for the bar exam at their home in Brentwood--not far from O.J. Simpson’s former estate. The Mehtas paid for her wedding, which was held at their Brentwood mansion.

In her testimony, Mehta minimized McDougal’s involvement in the wedding plans. She may have helped supervise construction of the gazebo. Did she hire the musicians? No, Mehta said, but she may have let them in.

Leora Gardner, who audited the Mehtas’ books in 1991, remembered Nancy Mehta complaining about McDougal’s freeloading.

“To the best of my recollection, Nancy made the remark to me, ‘I’m always feeding her.’ I remember the raspberries. We would always go and get expensive food. She asked, ‘Is it right?’ ”

Garner explained, “She’s very generous and open. You want to be nice and all of a sudden the person is used to it. I told her, ‘You don’t draw the line. It’s your fault.’ ”

Garner recalled that when she and McDougal threw Nancy an $800 birthday lunch at the Bistro, she had to hound McDougal for her share of the tab.

Couple’s Financial Tension Blamed

The defense is contending that tension between the Mehtas over Zubin’s spending for his children lies at the heart of the accounting mess. But Garner recalled just one controversy over spending. It involved a gift from Zubin for Nancy, a $45,000 tea set he bought her in Israel.

“He just wrote a check for it, and Nancy spoke up,” Garner testified. “She was upset because it was so expensive. We thought he was rooked.”

Darla Motley, who was 12 when she came to live with the Mehtas, is now 21. She disputed purchases that McDougal has written off as “for Darla.”

“Nobody buys clothes for me except Nancy,” Motley testified. “Everything I’ve got on today, down to my underwear, Nancy bought for me.” She wore a powder blue cashmere sweater set.

Motley, who lived in a number of foster homes after her mother’s death, appreciates her life with the Mehtas despite the strict rules during her upbringing--no jeans, no Barbie, no Walkman.

She testified matter of factly about an incident when Nancy Mehta accidentally burned her hair trying to straighten it with an iron.

Still, she savored her good fortune, and that made her a powerful witness because it sharpened her memory.

“Up to the point I stayed at the Mehtas I had a lot of bad experiences,” she said. “A lot of things you take for granted or anybody else does, I cherished. I remember more in detail because I cherished it more. Things you wouldn’t think were important, I did.”