McDougal Trial Opens as Lawyers Trade Barbs

The prosecutor opened the long-awaited embezzlement trial of Whitewater figure Susan McDougal on Tuesday by telling jurors in Santa Monica a love story.

It was not a tale of romance between a man and a woman, but of one small-town Arkansas woman’s passion for money and the good life it can buy. “Even when the money ran out,” Deputy Dist. Atty. Jeffrey Semow said, “her passion for it remained.”

McDougal’s defense agreed that what occurred while she was employed by famed conductor Zubin Mehta and his wife, Nancy, was indeed a crime of passion. But, attorney Mark Geragos said without elaboration, the passion was Nancy Mehta’s--and it was directed toward McDougal. He said that Mehta fabricated the charges against his client.

“The crime here is the complete fabrication perpetuated on my client for the past five years,” Geragos told jurors during a 15-minute statement that was abruptly halted when it appeared he was veering toward topics forbidden by the judge, such as the Mehtas’ personal lives and independent counsel Kenneth W. Starr’s Whitewater land development investigation.

As a result, much of the story was spun by the prosecution.

Semow said McDougal and her late ex-husband, James, were flying high in Little Rock, Ark., during the late 1970s and early 1980s.

She lived in an expensive house and drove a late-model Jaguar, and the couple were millionaires twice over. But the bottom fell out of their fortune in 1988, and McDougal came to Los Angeles to start over.

As their marriage of 20 years broke up, Susan McDougal went to work in 1989 at the Brentwood home of Mehta, former conductor of the Los Angeles Philharmonic, and his wife, a retired actress who had appeared in episodes of the “Bewitched” TV series and in an Elvis Presley movie.

The couple became the unwitting victims of McDougal’s “crime of passion”--the theft of some $150,000, the prosecutor alleged. The proof, he added, is in the paper. The trail McDougal left is as good as a fingerprint, the prosecutor said.

Chief among the paper “fingerprints” are forged checks and a MasterCard in Nancy Mehta’s name, Semow said. In 1989-90, he alleged, McDougal charged $38,000 worth of personal items. The next year, she allegedly charged $52,000. Before she was fired in July of the third year, he added, she had charged $35,000.

The attorneys differed sharply on what share of those charges were for the Mehtas’ benefit and how many were for McDougal.

The Mehtas were so unsophisticated about their financial affairs, Semow said, that they presented McDougal, who was hired as their assistant, with a golden opportunity. She stole from them with ease--forging checks and charging personal luxuries to the couple.

“It was like taking candy from a baby,” Semow said--until she was fired in July 1992. And so, five years after the charges were filed, McDougal went on trial Tuesday in Santa Monica on a dozen counts of theft, forgery, credit card fraud and failing to file state tax returns. She breezed into court in a tan linen pantsuit, tossing off cheery “Good mornings” and complimenting court clerk Candace Gillett on the sunflower print on her dress.

As the case opened, mystery surrounded the prosecution’s first intended witness--a South Bay accountant named Kate Bell, who once worked for the Mehtas. Semow disclosed in court that the witness, who always had been reluctant, refused to testify. He and defense attorney Geragos pointed fingers at each other as to who had rattled the witness over the weekend.

“She was disturbed with a conversation she had with Mr. Geragos,” Semow stated.

“She was disturbed with Mr. Semow,” Geragos retorted.

“I guess we agree that she is at least disturbed,” Semow quipped.

With or without Bell, Semow said, the embezzlement trial will focus on McDougal’s spending habits and the rise and fall of her fortunes, first as the wife and business partner of her late ex-husband. With him, Semow said, the defendant ran Madison Guaranty Savings & Loan and various real estate investments. Under orders by Superior Court Judge Leslie W. Light, the prosecutor took care not to mention the most infamous of those land deals--Whitewater--or its most well-known investor, President Clinton.

This case, however, is but the latest of the 43-year-old McDougal’s legal travails, which have made her a martyred folk hero in the eyes of some. She already has a fraud conviction in connection with Whitewater and spent more than a year in jail for contempt rather than testify against the Clintons.

She also faces further court proceedings--including trial for an obstruction of justice charge filed in May when she again refused to testify before the Whitewater grand jury. But the embezzlement case threatens substantial jail time; if convicted, McDougal could face seven years in a California prison.

McDougal is expected to take the witness stand to explain her version of events--that Nancy Mehta was lonely and dependent on her, and that she was authorized to write the checks and charge the luxuries on the credit card.

McDougal’s lawyer, Geragos, claims that the prosecution is a politically motivated payback for his client’s refusal to cooperate with Starr’s investigation of Clinton, an allegation that Starr’s office has denied.

It remains to be seen whether Geragos will get to make his point. Light has declared his courtroom a Whitewater-free zone, ruling that any mention of Starr, Clinton and the infamous land deal are irrelevant to the embezzlement case.