Clinton's name comes up in Whitewater testimony
March 28, 1996
Web posted at: 11:15 a.m. ESTLITTLE ROCK, Arkansas (CNN) -- President Bill Clinton's name was spoken Wednesday for the first time during testimony in the trial of Clinton's former Whitewater partners, Jim and Susan McDougal and Arkansas Gov. Jim Guy Tucker.
Bill Watt, a lawyer who now serves as a Little Rock municipal judge, testified that banker David Hale told him two times in 1986 that then-Gov. Bill Clinton urged Hale to complete a real estate loan that is at the center of the government's case.
Hale, who was sentenced Monday to 28 months in prison for mail fraud and conspiracy following a plea agreement, is the key witness for the prosecution.
Watt said he was a private attorney handling some of Hale's real estate loans when his client told him Clinton was interested in closing an $825,000 loan involving Hale's lending company and Madison Guaranty Savings and Loan
The S&L was then owned by Clinton's Whitewater partner, Jim McDougal. The real estate loan ended up netting Hale's lending company $500,000 through transactions involving the Small Business Administration.
Watt, whose testimony was to resume Thursday, has been granted immunity by Whitewater prosecutors. He is expected to undergo grueling cross examination by attorneys for the McDougals and Tucker.
Watt said Hale kept pushing him to force real estate appraiser Robert Palmer to finish up an appraisal that Palmer was delaying because "the numbers don't work."
At Hale's urging, Palmer was attempting to justify an appraisal for a loan on property in the Little Rock area. Watt testified he had frequently urged Palmer to complete the work at Hale's insistence, and called Palmer again, but took no specific action on the basis of Hale's claim of Clinton's interest in the case.
This was the first time President Clinton's name has come up in testimony. Defense attorneys objected vigorously to allowing the testimony, but were overruled by the trial judge.
When the trial recessed a short time later, prosecutor Ray Jahn issued a terse "no comment" when asked whether the government was trying to link the president to the three alleged conspirators on trial.
"There have been a lot of allegations that David Hale somehow made all this up in 1993. Here is a person who said and testified under oath that in 1986 'this statement was made to me by Mr. Hale,'" said Deputy Whitewater Independent Counsel Hickman Ewing.
Defense lawyers immediately launched another attack on Hale's credibility. Jim McDougal's attorney, Sam Heuer, said, "What I heard from Judge Watt is that all of his instructions were coming from David Hale. Once again we're hearing the Hale story, a unilateral source of information."
Susan McDougal's attorney, Bobby McDaniel, said, "It's an attempt to impugn the president, and there (are) political overtones to this trial and I think that's overwhelming proof of it. It's not an accident that the president's name was mentioned."
The two-month trial is expected to hinge largely on Hale's credibility. He is expected to testify next week, and President Clinton is tentatively scheduled to testify in late April to reject Hale's allegations and assail his truthfulness.
The White House and Clinton have consistently denied Hale's allegations.
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