Loyal to the end

Susan McDougal, on trial in California on non-Whitewater offenses, feels vindicated.

Published September 18, 1998 7:00PM (EDT)

SANTA MONICA, Calif. -- Susan McDougal is too tired to say, "I told you so." She was so drained during the second week of her California trial for allegedly bilking conductor Zubin Mehta's wife, Nancy, that she could take no pleasure when the Starr Report essentially vindicated her Whitewater martyrdom: The $40 million independent counsel's investigation that began with Arkansas real estate, ultimately uncovered nothing but President Clinton with his pants down.

Out of 100,000-plus words, the report mentions Whitewater only once -- in passing.

Kenneth Starr "didn't care whose life he ruined to get Bill Clinton. I knew the report would have to be salacious," McDougal said, pacing the hallways of the oceanside Santa Monica courthouse. "If anyone in the world knows there was no there there to Whitewater, it's got to be me."

McDougal spent 18 months in jail for contempt, rather than answer Starr's secret grand jury questions about the Whitewater land deal. Teetering off, shackled, in high heels and a pleated miniskirt, she always insisted she would talk under oath in a public courtroom, but no one ever asked her to. Many attributed her silence to protecting the president, though McDougal claimed then, as she does now, that she defied Starr because he was out for blood, not truth.

"There was never anything there. They've checked every financial dealing Bill Clinton has ever had," she said. "They've threatened my family to get them [and me] to lie."

Convicted for Whitewater-related loan fraud, McDougal was released this June after serving three months of a two-year sentence. She's now serving home detention in her fianci's Redondo Beach apartment.

While the California criminal charges are not related to real estate in Arkansas, Whitewater is still the mise en schne: Is McDougal guilty of stealing $150,000 as Nancy Mehta's personal assistant/bookkeeper from 1989 to 1992 in a sleight-of-hand reminiscent of dealings that landed her in trouble in Arkansas? Or did California prosecutors trump up the embezzlement charges to squeeze McDougal, just as many people believe Starr concocted the Whitewater case, based on possibly perjured evidence from a corrupt judge, to get at the president?

The embezzlement charges against McDougal center on her West Coast adventures after leaving Arkansas in 1988 seeking a fresh start from her broken marriage to James McDougal and financial ruin connected to their failed savings and loan. Her late ex-husband claimed the blame for involving his wife in questionable financial and real estate dealings, but the California chapter is strictly Susan.

First she worked as an assistant to Armand Hammer's grandson Michael at Occidental Petroleum. A year later, she was hired by Nancy Mehta, who once acted under the name Kovack in an Elvis Presley movie and later as Darrin's ex-girlfriend in the old "Bewitched" TV series.

Soon promoted to bookkeeper, McDougal became a trusted confidante who eventually moved into the Mehtas' sprawling Brentwood home up the hill from O.J. Simpson's old place. Her employment ended in July 1992 under disputed circumstances.

According to Los Angeles Deputy District Attorney Jeffrey Semow -- a Clark Kent look-alike in tightly tailored suits -- Nancy Mehta fired her bookkeeper after discovering that she had forged Mehta's signature on credit card bills and checks. Lanky, mustachioed defense attorney Mark Geragos counters that Mehta only claimed she was robbed because her employee-companion finally tried to break free from her grasping, 24-hour demands.

In the B-movie defense version, the lonely actress-wife actually schemed with her employee to rack up huge bills in revenge against her famous, philandering husband. By spending down their monthly income, ranging from $50,000 to $200,000, Nancy supposedly plotted to keep any extra money out of the hands of Zubin's illegitimate children.

Indeed, during those years, Zubin was back in Israel filing a paternity suit in Haifa District Court seeking more visitation with his then-3-year-old son by a young violinist. Finally, in this defense scenario, lonely, childless Nancy Mehta turned her vengeance on McDougal for pulling away from their too-close relationship.

After parting ways with McDougal, Nancy Mehta waited six months before complaining about the alleged thefts to police. The authorities did nothing at first. But a year later, in October 1993, just as the Whitewater scandal was heating up, California prosecutors finally filed criminal grand theft, check forging and fraud charges. Prosecutors also threw in failing to file California state income taxes and falsifying an apartment rental and credit card application. If found guilty of all counts, McDougal faces up to seven more years in jail.

From the beginning, McDougal charged that Starr offered her "global immunity" from the California charges if she would come up with something on Clinton. In response, California prosecutor Semow has retorted: "I work for the people of the state of California. This case was filed long before Mr. Starr appeared on the scene."

So far, the prosecutor has focused on portraying Nancy Mehta as a clueless, headstrong airhead who repeatedly ignored warnings from others that her bookkeeper was making personal charges on the house accounts. Buried on the state's witness list, Nancy Mehta will likely testify next week, following often-confusing, seemingly aimless testimony from an accountant and several Mehta family members and associates.

The trial hinges on which, if any, of the thousands of dollars in McDougal's "forged" credit card charges and checks went for unauthorized personal use, including designer clothing, trips, stays in expensive hotels and even $1,200 in dental work for her mother. Along those lines, Superior Court Judge Leslie Light warned the prosecutor to stop telling the jury McDougal embezzled funds that were simply unaccounted for.

"This woman is not on trial for not putting on a check what it was for," the judge scolded. Every dollar counts, because defrauding $150,000 in California, as the prosecution has charged, comes with a mandatory three-year sentence in state prison.

The judge, a onetime actor still proud of his 1960s TV gig on "Divorce Court," also periodically chastises the defense for attempting to introduce verboten topics. "Any connection between Whitewater and this trial," the judge yelled, "doesn't exist."

But the jury of seven women and five men know the background. In their voir dire questionnaires, several of them wrote that they admire McDougal for her "courage" and "standing up for her principles" in defying "bully" Starr. At a time when his X-rated sexgate files pervade the airwaves, McDougal cannot expect a more friendly jury.

By Jessica Seigel

Jessica Seigel covered the O.J. Simpson criminal trial as a national correspondent for the Chicago Tribune. Her articles have appeared in Los Angeles magazine, Mirabella, George and Buzz.

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