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LIVE FROM THE HEADLINES

Interview With Susan McDougal

Aired July 15, 2003 - 20:18   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

PAULA ZAHN, CNN ANCHOR: A federal appeals court says former President Clinton and his wife, Senator Hillary Clinton, will have to pay almost all of the legal fees that came from the probe into their Arkansas land deal. For work on the Whitewater scandal, lawyers charged the couple $3.5 million. The government will pick up about 2 percent. That comes to about $85,000.
Susan McDougal and her late ex-husband were the Clintons' partners in the 1978 Whitewater land investment. The McDougals were convicted of fraud in 1996. And Susan spent nearly two years in jail on a contempt of court charge for refusing to testify against the Clintons before a grand jury. President Clinton pardoned her before leaving office.

Susan McDougal joins us now by phone from Camden, Arkansas.

Susan, good of you to join us.

First off, your reaction to this decision by the federal appeals court.

SUSAN MCDOUGAL, FRIEND OF CLINTONS: Well, I have several feelings about it.

After reading it -- and I read it off the Internet -- it is an amazing thing to me that it is the same judges who appointed Kenneth Starr who rendered this opinion. And I think that is really telling, because we had an independent counsel that was investigating Whitewater and all of us and the Clintons named Robert Fiske, who had just ended his investigation, with no wrongdoing on the part of the Clintons, when these same judges fired him and appointed Kenneth Starr, who then came in, with all of this political background, to get the Clintons.

Even at the very first meeting I had with him,I was so sure that they knew that what they were trying to get me to say was a lie. It was evident from the beginning that it was an out-to-get-Bill-and- Hillary-Clinton investigation. And I don't think many people in America even doubt that.

ZAHN: Well, Susan, let me ask you this. If you think this decision was so politically motivated, what do you say to the folks out there that say: Wait a minute, Susan. This case led to 24 indictments, at least convictions. Why should the American taxpayer pick up the tab on this one?

MCDOUGAL: Well, I think there are a lot of people who suffered from this worse than the Clintons suffered from it.

There were innocent people who were never indicted, who were never convicted of anything who really suffered enormous legal fees and who will never rebound from it. And I would say, one of the big things about our criminal justice system now is that, in America, being charged, even if you win, you can be ruined. And this decision just emphasizes that. We will get you either way.

If these judges decide that they can't get you in the court of law, they can ruin you financially. You don't know how many people I meet in the course of the work that I do that say, even though I won, I lost every cent I had. My family was ruined. I lost my home. Look at Julie Hiatt Steele, who was never convicted of anything and who was just a witness in a proceeding with Kenneth Starr, who lost her home and almost lost her children. You can be ruined with decisions like this one.

(CROSSTALK)

ZAHN: So you strongly feel that the American taxpayer should be footing part of this tab or a greater part of this tab?

(CROSSTALK)

MCDOUGAL: If we had had -- Chuck Banks, who was the U.S. attorney here in Arkansas who testified at my trial, said that he looked at all this evidence. And he said, you know what? I didn't find any truth in it.

And he refused to even go forward with this investigation. But these same judges went forth and got Kenneth Starr, who continued and continued this investigation. I really think, if you want to know the truth of it, that Kenneth Starr ought to be filed against for a prosecution that was absolutely wrong from the beginning and untruthful. And I think he ought to pay for it. And he's got plenty of money to do it.

ZAHN: Let me ask you this, Susan. What did your legal bills come to and have the Clintons ever offered to help you out in that regard?

MCDOUGAL: I have never -- I have spoken to them one time since I've been out of jail, when Bill Clinton called me and said that he had read my book that I had written about it. And he said that he was sorry that all of those things happened to me. And I have never been offered money from anybody.

And let me tell you who really suffered from this. And that is Mark Geragos, who gave a year and a half of his life to fight a multimillion dollar investigation, because he knew I had no money. And if Mark Geragos is turned down on this same thing, it will be a travesty, because Mark successfully defended me against Kenneth Starr and won in every single court he went to with that man.

(CROSSTALK) MCDOUGAL: And I think it will be horrible if he's not reimbursed. But I really think that, because it was a malicious prosecution, that Kenneth Starr ought to foot the bill.

ZAHN: And the Clintons you don't think owe you anything. Of course, there are people out there saying, Hillary Clinton is going to make a fortune off of this book.

MCDOUGAL: There are people who were hurt a lot worse. And Mark Geragos can't afford to shut his office down for a year and a half. He's got his family-run legal practice during that time. And that's an awful thing, to have someone who's absolutely innocent be hurt by it. And these judges should be ashamed of themselves, not only for first appointing Starr in a political appointment, but for then refusing to bear up to what they caused in the first place.

ZAHN: Well, we appreciate your coming on to react to this late- breaking news.

MCDOUGAL: I appreciate you letting me talk about it.

ZAHN: And we did made an attempt to get ahold of Mr. Starr. And maybe some time later this week, we will able to bring him on.

(CROSSTALK)

MCDOUGAL: Oh, I'd love to talk with him, too.

ZAHN: I'd love to get the two of you together on the air. We'll try that, too.

Thanks again.

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