April 12, 1999
Web posted at: 5:51 p.m. EDT (2151 GMT)

LITTLE ROCK, Arkansas (AllPolitics, April 12) -- Whitewater figure Susan McDougal was found not guilty Monday of obstruction of justice but the judge declared a mistrial after jurors said they were "hopelessly deadlocked" on the criminal contempt charges.

U.S. District Judge George Howard Jr. declared the mistrial on two criminal contempt counts just before jurors delivered the innocent verdict in the courtroom.

An ecstatic defense team read the verdict as a repudiation of Independent Counsel Ken Starr.

"If anything should put a stake through the heart of Kenneth Starr, this should be it," said Mark Geragos, McDougal's defense attorney. "This guy should pack up, should get out of here. I'm happy to be the one, along with Susan, to wish him a bon voyage. Get the heck out of Arkansas and do it now."

After the verdict, McDougal hugged her fiance, Pat Harris, and Geragos. "I had a fair trial and my day in court and I thank you for that," she told the judge in court after the jury left the courtroom.

McDougal was charged with one count of obstruction of justice and two counts of criminal contempt charges stemming from her refusal to testify before a federal grand jury in 1996 and 1998. She claimed that Starr was out to "get" the Clintons and that she was afraid that Starr would indict her for perjury if she didn't give testimony implicating the Clintons.

Outside the courtroom, McDougal was happy and relieved but unsure of her future.

"I've been indicted since 1993," she said. "This is the first day that I haven't been indicted in years, so I'm a little numb from it. I don't know what else to do but be a defendant."

McDougal said the verdict was not as important as the fact that she got her day in court. "I got to tell everything that I had been wanting to tell for years," she said.

Nine of 12 jurors said it would be a waste of time to continue deliberating after being polled by the judge.

Prosecutor Mark Barrett said the outcome was "disappointing." A retrial is "obviously an option" and said he hoped prosecutors would decide within a couple of weeks whether to try again. The law requires a retrial to take place within 10 weeks, Barrett said.

Geragos said, he would like nothing better than to "retry Ken Starr again. They don't have the guts to retry this case again because now we know where the bodies are buried."

The White House released a short statement from President Bill Clinton that said he was pleased to learn of the verdict concerning his old business partner.

"He wishes all the best for her and her family," the statement said.

Asked for Starr's reaction, Barrett said "he respects, as we respect, the verdict of the jury on that."

But Barrett denied that the verdict was a repudiation of Starr's independent counsel office: "The United States, the Office of Independent Counsel was not on trial. Whatever larger picture .... it's a free country, (the defense) can make whatever larger picture they want."

Barrett noted that a retrial would not allow testimony concerning Starr's tactics because McDougal was acquitted on the obstruction charge.

Geragos said the obstruction of justice was key to the case because it was the only count where the jury could consider evidence of Starr's tactics and whether he was seeking the truth from McDougal.

"Now you've got 12 Arkansans saying that Ken Starr was seeking anything but the truth," he said.

One of the jurors, Michael Nance, said McDougal's state of mind was the key to the case. "She honestly believed that she could be held for a false statement" and that explained "why didn't she talk," Nance said.

Nance was the juror who on Friday carried a law book into the jury room, throwing the trial into disarray. On Monday, Nance said he brought the law book in an effort to get guidance on the question of state of mind, the very issue he said was crucial to the verdict.

The jury's verdict and mistrial cap a six week trial that saw McDougal finally answer questions that she had declined to answer before the grand juries and a bizarre twist once the case went to the jury.

McDougal was indicted on the charges after twice refusing to answer questions before a grand jury investigating the failed real estate project known as Whitewater. McDougal and her late husband James were partners in Whitewater with President Bill Clinton, while he was still governor of Arkansas, and first lady Hillary Rodham Clinton, while she was a partner in the Rose Law firm in Little Rock, Arkansas.

McDougal claimed that prosecutors from Starr's office were out to get President and Mrs. Clinton and wanted McDougal to falsely implicate them. McDougal said she feared being charged with perjury if her testimony did not suit Starr's team of prosecutors.

Disrupted jury proceedings

On Friday, the proceedings were disrupted when it was discovered that juror Nance had brought an Arkansas state law book into the jury room. Deliberations were halted and the judge ordered an FBI investigation into possible jury tampering.

Howard later rescinded the order for an investigation after questioning Nance, a 47-year-old truck driver from Little Rock.

Howard ruled that Nance was using the law book to "help him deal with certain problems with legal definitions." The judge also said Nance had not communicated with any third parties or considered any extraneous matters in the case.

"The court is not persuaded that there is a justifiable reason for excusing him as a juror in this case," Howard said. "The court is persuaded there is no unfair prejudice to either side at this time."

Jury had questions

The jury began its deliberations last Thursday. After its first three hours of deliberations, the jury sent a note to the judge asking two questions that appear to relate to his jury instructions.

In his instructions to the jury, Howard said McDougal would be guilty of criminal contempt if she "willfully" violated the court order and didn't act "by accident, mistake or other innocent reason."

One question asked for a definition of "innocent reason" -- a phrase included in the written instructions for the jury. The other question asked whether there might have been an "innocent reason" for refusing to testify, even if McDougal acted "willfully" in violating a court order directing her to cooperate with Starr's probe.

The jurors' question dealt with the main thrust of her defense -- that she declined to testify because she feared Independent Counsel Ken Starr would charge her with perjury unless she falsely implicated the Clintons in wrongdoing.

The jurors sent a third note on Thursday asking whether they could consider McDougal's state of mind when she declined to testify to grand juries in 1996 and 1998 in deciding whether she is guilty of criminal contempt.

In response, the judge referred the jury back to the instructions he read them earlier Thursday.

McDougal finally answered questions

When she finally took the stand two weeks into the trial, she answered the questions that for 2 1/2 years she had refused to address for Starr's prosecutors. She has already spent 18 months in jail for civil contempt charges for her refusal to answer questions.

McDougal testified she never discussed a fraudulent $300,000 loan with Bill Clinton, and she did not believe Clinton had said "anything untruthful" when he testified at her 1996 trial involving the loan. The loan has been the center of the Starr's Whitewater investigation.

"Nothing he said was untrue to me," McDougal said.

During the often contentious five-week trial, McDougal's defense got a boost when the judge allowed a Virginia woman to testify that she also had been mistreated by Starr prosecutors while involved in the Monica Lewinsky investigation, despite strong protests from prosecutors.

"Susan and I have been relentlessly pursued by the Office of Independent Counsel," testified Julie Hiatt Steele, who claimed she had been indicted because she refused to give false testimony against Clinton.

Steele faces a trial next month on an indictment obtained by Starr's staff that she obstructed justice and lied to a grand jury looking into the Monica Lewinsky affair. Steele's testimony that undercut the account of former White House volunteer Kathleen Willey, who accused the president of making an unwanted sexual advance toward her.

Steele initially backed Willey's allegations but later retracted her story in an affidavit filed in the Paula Jones sexual harassment lawsuit and during testimony before two federal grand juries. She was then indicted and has pleaded innocent to three counts of obstruction of justice and one count of making a false statement.

A 'personal vendetta'

McDougal used her trial to dramatically press her attack on Starr whom she accused of waging a "personal vendetta" against her. "It will be an all-out fight," she predicted as the trial opened March 8.

In closing arguments, McDougal's attorney, Mark Geragos, mocked the Whitewater prosecutors who testified they only wanted the truth from McDougal and were not out to get the president.

"It's something so offensive for them to say with a straight face they wanted to look to see if they could clear the president. How dumb do they think we are?" he said.

But prosecutors portrayed McDougal as a lying, publicity-seeking woman who enjoyed telling a tale of persecution in TV interviews.

"She craved the spotlight. She enjoyed the attention. And that was probably her real reason for not testifying, not those lame excuses," Associate Independent Counsel Julie Myers told jurors.

Ray Jahn, a former Starr prosecutor, testified that McDougal was told in 1996 that if there came a point where there was a question about whether she'd committed perjury, the matter would be turned over to an independent prosecutor -- and not pursued by the Starr team.

Jahn denied prosecutors ever promised her relief from other legal problems if she cooperated or told her ex-husband -- as she claimed -- that she could "write her own ticket" if she said she had a sexual affair with Clinton.

Jahn acknowledged, however, that a state prosecutor in California had indicated an embezzlement case against McDougal might be settled by plea bargain. She still refused to cooperate with Starr and McDougal later was acquitted on the embezzlement charges.

A career federal prosecutor, Jahn insisted Monday that the Starr prosecutors only wanted McDougal to tell the "total and complete truth."

Three grand jurors from the Whitewater grand jury also testified in the trial. They testified that they did not believe that Starr's office was out to "get" Clinton and that they wanted to hear what McDougal had to say.

The Clintons have never been charged with any crime in the Whitewater case. But both McDougals served prison time for fraud, in Mrs. McDougal's case for a $300,000 government-backed loan used to help pay off the original loan taken out jointly by the McDougals and Clinton.

James McDougal died while he was in prison. After his conviction, he cooperated with prosecutors and aided them in their investigation of the failed land deal.

"The only way she was ever going to get out the true story of what happened was to do it in a courtroom," Geragos said, not the grand jury room.

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

Monday, April 12, 1999

• Clinton found in civil contempt for Jones testimony
• House, Senate GOP leaders reach budget compromise
• McDougal not guilty on one count; mistrial declared on other two charges
• The trials and tribulations of Susan McDougal
• Congress returns to talk Kosovo
• Capitol statues may be replaced
• Congress approves disaster aid bill
• As recess ends, Kosovo could overwhelm GOP tax-cut message
• Gore schedules 'house parties' to soften VIP image
• Blockbuster congressional hearings a thing of the past?
• With eyes on Giuliani, Lazio is the other Republican

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