McDougal Trial Focuses on Starr Methods

Independent counsel Kenneth W. Starr’s tactics came under fire again Friday in the Susan McDougal contempt trial, as a woman indicted in the Monica S. Lewinsky investigation testified that she was pressured to concoct a story damaging to President Clinton.

But prosecutors hit back at witness Julie Hiatt Steele during a grueling cross-examination, suggesting that the Virginia woman “flip-flopped” her story and cashed in on her notoriety to sell a photo to a tabloid.

Steele, 52, acknowledged that she collected $9,000 from the National Enquirer for a photo of Clinton and her onetime friend Kathleen Willey, a former White House volunteer who has alleged that Clinton groped her.

But Steele testified that, after having her life picked apart by Starr’s prosecutors--who asked about her truthfulness, her adoption of a Romanian boy and even whether she had sex with her daughter’s boyfriend--”I would say this has not been a profitable venture here.”

Despite vigorous objections by prosecutors, the judge in McDougal’s federal trial allowed the jury to hear from Steele in an effort by McDougal to show a pattern of intimidation by Starr’s office toward witnesses who refuse to give damaging testimony about Clinton.

“I came here today,” Steele told reporters after her testimony, “because Susan and I both have been relentlessly pursued by the office of the independent counsel. . . . It could happen to any of us.”

McDougal, a key figure in the Whitewater controversy, is being tried on contempt and obstruction charges for refusing to answer questions before a grand jury about her Arkansas business dealings with the Clintons.

Steele, who testified against the advice of her attorney, goes on trial next month in Virginia on felony charges of obstruction of justice and making a false statement in connection with the Clinton-Willey episode. Starr’s prosecutors charge that Steele, who initially told a Newsweek reporter that Willey had told her she was groped in the White House in 1993, was lying when she later retracted that statement in sworn testimony as part of Starr’s investigation.

Mark Geragos, McDougal’s attorney, said he was pleased with Steele’s testimony and that it gives his client momentum as the trial nears an end next week.

If anyone still wonders why McDougal refused to cooperate with Starr’s prosecutors, he said, “today was the answer to that question. The reality is that they don’t want to hear anything but their version of the truth.”

But associate independent counsel Julie Myers told reporters that Starr’s office “acted in complete good faith when it indicted Miss Steele, who has flip-flopped her testimony a number of times, maybe for money or maybe for fear.”

In cross-examination, Myers pressed Steele about her decision to contact several tabloids in 1997 in an effort to sell the Clinton-Willey photo. Steele acknowledged receiving $9,000 from the National Enquirer, plus a trip to Florida with two of her children to deliver the photo. Steele said that she later received thousands of dollars more from other media.

Steele said she was “very embarrassed” at having sold the photo but that she needed the money to send her son to a private school.

But neither money nor fear had anything to do with her testimony, Steele said.

Asked by Myers if she feared the Clinton administration, she answered: “Who am I supposed to be afraid of? . . . I am not afraid of the White House or anyone connected with them.”

Steele said that she backed off her initial statement about Clinton’s alleged groping of Willey because it was not true and she “felt badly” about lying. Willey had urged her to confirm her version for Newsweek, even though she “didn’t know anything,” Steele testified.

But Starr’s investigators seemed unwilling to accept that explanation in several prolonged interviews with her last year, she said.

Steele suggested that she could have avoided an indictment “by changing my story. They said to me: ‘Could it be this? Could it be that?’ But facts are facts. I could not change them because it wouldn’t be the truth.”

She was particularly upset, Steele said, at seeing investigators pore over her financial records and subpoena family members, friends, neighbors and her accountant to discuss her case before the grand jury.

Her brother and daughter were interrogated about the financial arrangements for Steele’s adoption of a small Romanian boy, and her daughter’s boyfriend was even “asked before the grand jury whether he had sex with me,” Steele testified.

Her lawyer complained to Starr’s office last year about the treatment, Steele said. Four days later, she said, investigators sent her a letter informing her that she was the target of a criminal investigation.

*

O’Neill reported from Little Rock and Lichtblau from Washington.