REX NELSON, Arkansas Democrat-Gazette: (Little Rock) Well, of course, we have a Whitewater grand jury which has been meeting for quite some time here in Little Rock. An indictment came down from that grand jury on August 17th of last year charging Jill McDougal, Susan McDougal, and Bill Clinton’s successor as governor of Arkansas, Jim "Guy" Tucker. They are being tried together on charges that are not directly related to the Whitewater Development Corporation, which, of course, was the President’s partnership with Jim McDougal.

ELIZABETH FARNSWORTH: Now, they have, what, 17 charges in total? They’ve been indicted on 17 charges, or at least Susan McDougal has, right?

MR. NELSON: There are actually nineteen charges against Jim McDougal, eleven charges against Gov. Tucker, and eight charges against Susan McDougal.

ELIZABETH FARNSWORTH: And what–how was President Clinton related to this? Why would the McDougals want him to testify on their behalf?

MR. NELSON: Really, if the linchpin of the prosecution case is a former municipal judge here in Little Rock named David Hale. David Hale claims that a lot of Arkansas political figures back in the ’80’s put pressure on him to make unwise loans. One of those political figures was then Gov. Bill Clinton, and he says that Clinton put pressure on him to make a $300,000 loan to Susan McDougal, and so Susan McDougal says I need the President’s testimony in order to clear me.

ELIZABETH FARNSWORTH: And we should make it clear that the President is not being accused of any wrongdoing here.

MR. NELSON: Absolutely, no wrongdoing whatsoever. Susan McDougal and now James McDougal now, though, say the President can clear us and the federal judge says I am going to give them that latitude, the President needs to testify.

ELIZABETH FARNSWORTH: And yet this charge by Mr. Hale is the most serious charge made involving the President in all of this Whitewater matter, am I right about that?

MR. NELSON: Yes, you are correct about this. I mean, I still see nothing in any of this that would create a legal problem for either President Clinton or First Lady Hillary Rodham Clinton. Obviously, it’s a big political problem right now.

ELIZABETH FARNSWORTH: Stuart Taylor, what are the President’s options here?

STUART TAYLOR, The American Lawyer: Well, I think he’s already made one decision which he’s not going to fight the subpoena. He’s said through his lawyer that he intends to cooperate in the appropriate fashion. What’s the appropriate fashion involves a number of possibilities, going down to Arkansas, showing up at the courthouse. I think that’s unlikely, or at least unlikely that he would volunteer to do that. Most recent Presidents who have given testimony in criminal trials have done so on videotape as sort of, as a matter of convenience to the President, to protect the dignity of the office, and I think that’s what the White House clearly wants here. Whether that will be acceptable to the two McDougals who want his testimony and who might think he’s a more effective witness for them live and in person than having the jurors watch him on television remains to be seen.

ELIZABETH FARNSWORTH: But he could be cross-examined on videotape. There would be a phone hook-up, right?

MR. TAYLOR: Very definitely, and the cross-examination would be the interesting part, I think, because in a way, this puts the prosecutor, Kenneth Starr, or whoever prosecutes this case for him, on the spot more than the President because he’s going to be in a situation where the President presumably will get up and testify for the defense, the David witness, the star witness–David Hale, I’m sorry, the star witness in this case, is a liar, and what’s he’s said is a bunch of bull, to use words the President has already used.

ELIZABETH FARNSWORTH: In other words, the President didn’t pressure him to make a loan to Susan McDougal?

MR. TAYLOR: Exactly. And the prosecution at that point has a star witness who’s just been called a liar by the President of the United States. They have to decide and this bears on the overall Whitewater investigation whether at that point they’re just going to swallow that, or whether they’re going to go on the attack against the President and try and sell the idea that it is the President who’s lying, not David Hale.

ELIZABETH FARNSWORTH: So in some ways, this trial is sort of pivotal in this investigation right now because it tips–will it tip Mr. Starr’s hand?

MR. TAYLOR: I think he may have to, to some extent, at least on this David Hale, $300,000 pressured-loan front. Now, the–as the case was brought, as was just said, the charges against the McDougals and Gov. Tucker really don’t depend on whether President Clinton did what David Hale said or didn’t do. But the defense will bring it up if the prosecution doesn’t for the purpose of discrediting Mr. Hale, and that throws, throws the fat into the fire as far as whether [what] the President’s relationship with the prosecution is.

ELIZABETH FARNSWORTH: Rex Nelson, do you have anything to add to that?

MR. NELSON: Umm, just that again David Hale is the key to all of this. If the defense can say this man is a liar, he was a drowning man and as he drowned he was trying to pull others down with him, they have a very good chance, I think, of being cleared.

ELIZABETH FARNSWORTH: Now, Stuart, back on the question of the President, this is not the first time a President has been asked to testify in a trial while he was in office, am I right about that?

MR. TAYLOR: There have been quite a few Presidents. This one is a first in perhaps a very narrow sense as far as I can tell. I’m not aware of a previous case where a sitting President was asked–testified in a criminal trial conducted by a prosecutor who at that very time is investigating that very President. Prior cases have been a little bit more benign. For example, President Reagan, after he left office, gave testimony for the defense in the trial of his former national security adviser, John Poindexter. President Carter, while he was in office, gave testimony in a couple of cases in which nobody was accusing him of any wrongdoing. Similarly, President Ford, while in office, gave videotaped testimony in a case where a woman had tried to shoot him, and he testified about what he remembered and what he saw. But this cuts a little bit closer to the bone for the President than any of those cases do.

ELIZABETH FARNSWORTH: And Rex Nelson, is this a really big story in Little Rock right now, or is this just one more step in this very long investigation?

MR. NELSON: Well, I think Arkansas people obviously are a bit more interested in it than other people across the country because there are so many Arkansans involved. But like other Americans, they’re very confused. There are so many angles to Whitewater, it’s so complex, you have the legal end that’s based here in Little Rock, but you also have the political end that’s based in Washington with Sen. D’Amato’s hearings there.

ELIZABETH FARNSWORTH: But this step of calling the President is a major move in the whole investigation, is it not?

MR. NELSON: Oh, absolutely. We’ve seen stories every day for almost two years now, but this of course is one of the biggest, and the question now is: Will you have a live satellite hook-up, will you just have videotape, or will you actually have a President here testifying? I don’t think you’ll see the latter.

ELIZABETH FARNSWORTH: Stuart, is, is Mr. Starr likely to come out with some conclusions this year about this long investigation? What are you hearing about that? I mean, this is the year when the campaigning will–you know, the elections, campaigning will begin.

MR. TAYLOR: Starr has apparently made a statement–I didn’t see it but somebody at the White House told me about it–on C-Span, I believe, that the public would get some answers probably before the election, but I don’t think he’s been more clear than that. It’s hard to see all of these matters running their way to their conclusion before the election. For example, even if people are convicted in this upcoming trial, their appeals will go on and on, and so there will still be some evidence out there that possibly could have some bearing on things. But I would think Starr will feel a lot of pressure and already people in the Clinton camp are putting on pressure for him to put up or shut up, in essence, this year. You know, don’t leave this cloud hanging over the President. It didn’t take your predecessor, Bob Fiske, very long to reach some conclusions. What are you waiting for?

ELIZABETH FARNSWORTH: Okay. Well, gentlemen, thank you very much for being with us.

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