April 5, 1999
Web posted at: 5:58 p.m. EST (2258 GMT)

LITTLE ROCK, Arkansas (AllPolitics, April 5) -- After presenting a brief rebuttal, the prosecution in the criminal contempt and obstruction of justice trial of Susan McDougal rested its case Monday. Closing arguments are set for Wednesday.

Before resting, Independent Counsel Ken Starr's prosecutors called Ray Jahn, a former member of Starr's team, to give a point-by-point rebuttal to McDougal's sworn testimony that prosecutors tried to get her to tell lies about her former business partners, Bill and Hillary Rodham Clinton.

McDougal is on trial for charges stemming from her refusal to answer questions before Starr's Whitewater grand juries in 1996 and again in 1998. McDougal said she did so because she was afraid Starr would charge her with perjury if she didn't say what he wanted.

Jahn testified that Starr's prosecutors told McDougal that if there came a point where there was a question about possibly perjury charges, an independent prosecutor could have been named to decided how to proceed, but McDougal still refused to testify before the grand jury.

Jahn also denied ever having said he could make McDougal's legal problems in California go away if she cooperated with Starr, as the defense alleges. He also refuted McDougal's claim that he colluded with McDougal's late ex-husband, Jim, to convince her to testify that she had a sexual affair with Clinton.

Although on cross-examination, Jahn, who won convictions against the McDougals and then-Gov. Jim Guy Tucker in a 1996 Whitewater trial, conceded there's always a possibility that "today's defendant is tomorrow's witness," he said Starr's office simply wanted the "total and complete truth" and did not plan to "roll" McDougal over to tell lies against the Clintons.

The former special prosecutor also admitted that when he went to work for the Office of the Independent Counsel he originally told Starr "that it was my hope that we would be able to clear the president."

McDougal's defense team finished presenting its case Friday by calling controversial witness Julie Hiatt Steel to testify about her dealings with and alleged mistreatment by Starr.

Steele told the jury Friday that she felt pressured to back up the story of a presidential accuser and was indicted when she refused to lie.

Steele said that she was indicted on charges of obstruction of justice and making false statements after she challenged part of the story of her onetime friend, former White House volunteer Kathleen Willey.

Willey has been a focus of the Monica Lewinsky portion of Starr's investigation, looking into whether there was an attempt to illegally cover up Willey's allegation that Clinton made an unwanted sexual advance toward her in the White House in 1993. Steele claims that Willey asked her to lie by saying that Willey told her previously about the alleged encounter with Clinton.

Steele, who goes on trial in early May, insisted she told the truth regarding Willey in her sworn testimony before two federal grand juries. She said she could have saved herself $500,000 in legal bills "by changing my story" to support Willey's version of events.

The only time she has lied about the case, Steele said, was to a Newsweek reporter investigating the Willey matter and that she "felt horribly guilty" afterwards.

"I'm not going to lie anymore," Steele said under questioning by a defense lawyer. She was composed and assertive during her two hours on the witness stand.

McDougal's lawyers were trying to prove McDougal was justified in not speaking to the grand jury because of prosecutorial abuse. Steele's testimony, they believe, supports their case.

But prosecutors said they have evidence that Steele was indeed told by Willey about the alleged encounter with the president and that Steele repeated the information to others.

Steele's testimony was allowed by U.S. District Judge George Howard in a surprise decision that threw the prosecution for a loop. After hearing a preview of Steele's story, the judge ruled Tuesday that she could testify regarding what he called the "modus operandi" of Starr and his deputies.

Prosecutors fought against Steele's appearance, saying it would set a "dangerous precedent" making it easier for the defense to put the independent counsel on trial instead of McDougal.

Steele is the only witness known to be under indictment by Starr's grand juries looking into the Lewinsky matter.

CNN's Bob Franken and the Associated Press contributed to this report.

Monday, April 5, 1999

• Prosecution rests in McDougal trial
• China denies Chung's claim it gave money to influence U.S. presidential campaign
• Clinton Administration criticized for China policy
• Giuliani: Mrs. Clinton is outsider
• Supreme Court decisions in brief
• White House holds Easter egg roll
• Missouri prepares for controversial proposition on concealed weapons
• Medicare reform uncertain this year
• E-mail flood inconvenient for government
• GOP to run ads attacking Gore's Internet claim

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