Susan McDougal: At last, Whitewater figure speaks

Wednesday, July 28, 1999 | 11:20 a.m.

Susan McDougal carried herself like a gladiator when she walked to the front of a Caesars Palace ballroom Tuesday afternoon.

The 45-year-old woman who was jailed when she refused to testify in Independent Prosecutor Kenneth Starr's Whitewater investigation after being acquitted of embezzlement in an unrelated case stood calmly before 1,100 fraud investigators.

And she laughed.

"This is a really, big room, and I've been in a lot of small spaces lately," McDougal said, eliciting nervous giggles from the crowd.

"I was still in an isolation cell when they called and asked if I wanted to speak in Las Vegas if I got out in time. And I was like, 'Oh yeah! Let's go!' "

Real laughs followed -- the first of many McDougal inspired among people who make their livings investigating people such as, well, her.

When the Association of Certified Fraud Examiners' convention announcements named McDougal as the luncheon speaker, about a dozen of the group's 25,000 members resigned, Chandra Mills, association spokeswoman, said.

But others saw it as an opportunity to find out what it was like from "the other side."

McDougal saw it as a chance to talk about how she came to be accused of swiping more than $50,000 from orchestra conductor Zubin Mehta and his wife, Nancy, when she worked as their bookkeeper and Nancy Mehta's personal assistant from 1989 to 1992.

She was acquitted of the charges from that case only to face obstruction and criminal contempt charges for refusing to testify before a grand jury in the Whitewater investigation in 1996 and 1998. She was acquitted, but served 18 months in jail for civil contempt charges that also stemmed from her refusal to testify.

In 1996, she served two months of a two-year prison term for felony convictions stemming from an illegal $300,000 loan to Bill and Hillary Clinton in 1992. She was released early because of back problems.

It's not exactly the kind of background that would earn the respect of a roomful of fraud investigators. But McDougal held them spellbound as she described Nancy Mehta as a lonely, spiteful woman and of how those embezzlement accusations were far more disturbing than anything connected to the Whitewater case.

"The only thing I ever woke up in the middle of the night about was my innocence in the Nancy Mehta case," she said. "Whitewater was so political and out of my control. But to be accused of stealing from a friend ... this is the first time I've really talked about it."

McDougal said she refused to testify in the Whitewater case because Starr's investigators didn't want to hear what she had to say. They simply wanted her to agree with the scenario they already had concocted.

"I knew I had not taken $300,000. The more I told them I didn't give any money, the more they said they would prosecute and convict me," McDougal said.

"And after that I decided I wasn't saying a damned thing."

Afterward, the room full of supposed adversaries crowded around McDougal asking for autographs and photographs and offering handshakes and hugs.

After her speech McDougal said she hasn't had any contact with the Clintons in a very long time. She described President Clinton as "the greatest president of this decade" and said she harbors nothing but respect for the couple.

She said if she never again laid eyes on Starr, however, "it would be too soon."

"What he did to this country was wrong. What he did to me was wrong. He was a a right-wing wacko who took over this country," McDougal said.

McDougal now lives in a small Arkansas town with her parents, whom she says she must take care of because her mother suffered a heart attack while she was in jail.

She also is trying to start a foundation to help women who are in jail, as she said she saw many abuses and poor living conditions in her months there.

There have been plenty of offers for book and movie deals, but McDougal says she isn't interested right now.

"I just want to live a quiet life," she said. IN TOWN: SUSAN MCDOUGAL