Witness Enters Not Guilty Plea in Willey Case

A woman who undercut Kathleen Willey’s claim of an unwanted sexual advance by President Clinton pleaded not guilty Tuesday to three counts of obstruction of justice and one of making a false statement.

Vowing to fight the charges with “every last breath in my body,” Julie Hiatt Steele said Tuesday that the case should be thrown out because independent counsel Kenneth W. Starr has a conflict of interest.

Her attorney, Nancy Luque, said Starr had obtained a grand jury indictment in Virginia to avoid the federal courts in Washington, where he suffered a setback in prosecuting Clinton friend Webster L. Hubbell.

In Washington, Starr is appealing the decision of a federal judge who threw out a tax evasion case against Hubbell. Luque said she will move to dismiss the Virginia indictment against Steele on the grounds that it should have been brought in the District of Columbia.

Outside the federal courthouse in Alexandria, Steele said she “could not imagine being caught in a political storm” for “crimes I did not commit.”

Steele acknowledged that she has received offers of significant financial help. She did not give any details.

The indictment against Steele details events which raise the possibility that someone persuaded her to give a phony story last February that was helpful to Clinton in the Paula Corbin Jones sexual harassment lawsuit.

Steele, in an affidavit, denied that Willey told her about the president’s sexual advance and asserted that Willey asked Steele to lie to a Newsweek magazine reporter.