McDougal Wins Acquittal, Deadlock on Starr Charges

Susan McDougal, the Whitewater figure who cast herself as a symbol of defiance against independent counsel Kenneth W. Starr, was found not guilty of obstruction of justice Monday.

The federal court jury also dealt Starr a second setback when it deadlocked on criminal contempt charges, forcing a mistrial on two remaining counts that prosecutors had considered open and shut.

Several jurors said they believed McDougal was legitimately afraid of Starr’s office, justifying her failure to cooperate with the investigation into the Whitewater real estate transactions of then-Gov. Bill Clinton and his wife, Hillary Rodham Clinton.

The surprising outcome of the five-week trial, during which jurors heard as much about Starr’s tactics as McDougal’s behavior, could mark the end of one of the Whitewater investigation’s longest-running sagas--or it could be only the latest twist.

Disappointed prosecutors said they will consider trying the 44-year-old McDougal again for refusing to answer questions from the Whitewater grand jury. But a jubilant McDougal and her lawyer said the jury’s decision marks a clear repudiation of Starr in an investigation now nearing its sixth year and they all but dared his office to bring new charges.

“They don’t have the guts to retry this case,” said Los Angeles defense attorney Mark Geragos.

“It doesn’t get any better than this,” he said. “If anything should put a stake through the heart of Ken Starr, this should be it. This guy should pack up and get out.”

Georgetown University law professor Paul Rothstein said the verdict represents a “black eye” for Starr. “It would seem like beating a dead horse to retry her on the remaining counts . . . especially when taking her to trial was considered a bit of piling on . . . “ he said. “This verdict amounted to jury nullification, which a jury has every right to do.”

Foreman Donald Thomas, a factory supervisor, said in an interview that many of his fellow jurors believed that McDougal’s apparent fear of cooperating with Starr constituted an “innocent reason” under the law to justify her actions.

“That was a big point for us,” he said. “She said she was afraid of being prosecuted for perjury if she testified, and . . . I don’t think she was blowing smoke.”

Jurors also considered the testimony of several other witnesses, who complained about the overly aggressive, even intimidating, tactics that Starr’s prosecutors allegedly used with them, Thomas said. Although jurors were careful to remember that Starr was not the one on trial, he said, “that other testimony did have some bearing.”

Said juror Michael Nance, a truck driver: “They didn’t convince me that Mrs. McDougal was wrong . . . to not testify. . . . In this one particular case, Mrs. McDougal was right. . . . I believe she did it out of fear, fear of retaliation.”

Already Served 18 Months in Prison

McDougal, who lives in Redondo Beach, faced five years or more in federal prison if she had been convicted on all three criminal counts.

She already had served 18 months in prison for civil contempt for refusing to answer questions from the grand jury in 1996. The image of McDougal, led away in shackles while wearing an orange jail jumpsuit, put a powerful face on the Whitewater case.

A former business partner of the Clintons, McDougal also served several months in prison for her convictions in a 1996 Whitewater trial related to a conspiracy to bilk two federally backed financial institutions.

In a separate matter, McDougal last year was acquitted in a Santa Monica trial on charges that she had embezzled money from conductor Zubin Mehta and his wife Nancy, for whom she had worked.

After Monday’s verdict was read, McDougal gasped and hugged her fiance, while family members cried in celebration. McDougal said later that she was “still a little numb” because it was the first time in so long that she was not under indictment. She celebrated with family and friends at a Little Rock hotel Monday evening.

More important than the verdict, she said, was the fact that “I got my day in court and I got to tell everything I’d wanted to tell for years.”

The White House, in a statement issued before U.S. District Judge Susan Webber Wright cited President Clinton for civil contempt in the Paula Corbin Jones case, said the president was “pleased” by McDougal’s acquittal. “He wished all the best for her and her family,” it said.

The decision to acquit McDougal of obstruction came quickly on the first day of deliberations last week, jurors said. On the contempt counts, Thomas and Nance said, jurors were leaning 7 to 5 in favor of acquittal when they told U.S. District Judge George Howard Jr. on Monday that they were “hopelessly deadlocked.”

Howard polled the jurors to determine whether there was any hope of a verdict, but he said he did not want to pressure them into a resolution. “That’s about as far as I go. I don’t believe in arm-twisting,” he said.

Several jurors were adamant in pushing for conviction on the contempt counts, said Nance, who nearly triggered a mistrial Friday by bringing a law book into the jury room.

But Nance said some jurors pushed for greater consideration of McDougal’s intent. “All America knows she didn’t answer the questions” from the grand jury, he said. But several jurors wanted to know: “What was her state of mind? Why didn’t she talk?” he said.

The deliberations, which lasted about 10 hours and spread over three days, grew contentious. “There was yelling and screaming,” he said.

Prosecutors said they are anxious to speak with the jurors and plan to file a motion with the court authorizing them to do so. That could influence the decision on whether to retry McDougal for contempt, which prosecutor Mark Barrett said is “definitely an option.”

Barrett said he spoke with Starr by telephone immediately after the verdict and the independent counsel said he respected the jury’s verdict. “That’s what our system is all about,” he quoted Starr as saying.

Barrett said he worried that the verdict might send a message to potential witnesses that they can defy the law without fearing the consequences.

“That’s a concern, and frankly that factored into why we brought this case in the first place,” he said.

As clear cut as the case appeared, it produced no shortage of twists.

Mrs. Clinton was drawn into the trial--first as a surprise witness, then as the subject of testimony.

Prosecutors played portions of a previously secret video deposition that she gave at the White House last year on the Whitewater matter.

Mrs. Clinton revealed few new details, testifying that she had virtually no active involvement in the failed real estate project. But the prosecutors’ point was clear: If the first lady could answer questions under oath about Whitewater, so should McDougal.

The defense also sought to use Mrs. Clinton to its advantage. In an unusual legal maneuver, Geragos subpoenaed W. Hickman Ewing Jr., chief prosecutor in Starr’s Arkansas office, and called him as a defense witness. After prosecutors’ objections were rebuffed, Ewing grudgingly acknowledged that he had drafted an indictment of the first lady several years ago on unspecified charges after he came to doubt her truthfulness.

The disclosure came as a political bombshell, and Geragos used it to help establish a theme that he would return to time and again: Starr’s “out of control” prosecutors were on a vendetta to damage the Clintons and would do anything to hurt those who stood in the way.

Defense Puts Starr on Trial

Geragos vowed from the outset that he would try to put Starr on trial.

He convinced the judge to allow testimony from several witnesses who, like McDougal, claimed that they were harassed by Starr’s office because they would not tell the grand jury what prosecutors wanted to hear. In the end, Geragos urged the jury to “stand up and say ‘enough is enough.’ ”

McDougal attacked Starr’s tactics when she took the witness stand, launching into such extended responses that the judge had to cut off her “speeches” several times.

Her most salacious allegation centered on a comment she said her late ex-husband, James B. McDougal, had made to her several years ago. He purportedly told her that Starr’s prosecutors had indicated she could “write her own ticket” if she acknowledged having had an affair with Clinton.

Prosecutors said the allegation was an “outlandish” lie.

Ironically, when McDougal took the witness stand last month, the questions she had refused to answer for 2 1/2 years seemed almost anticlimactic.

McDougal, once quoted as saying that she “knew where all the bodies were buried,” testified that Clinton had testified truthfully about Whitewater as far as she knew.

And she offered innocent explanations for questions raised about the president’s past business dealings in Arkansas. The note she wrote at the bottom of a $5,081 check--”Payoff Clinton”--may have referred to a payment made on some land the McDougals owned in the town of Clinton, Ark., she testified. There was no payoff to Clinton, she said.

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Times staff writer Robert L. Jackson contributed to this story from Washington.