Prosecutors told jurors that President Clinton's Whitewater partners and Gov. Jim Guy Tucker almost pulled off the "perfect crime," obtaining nearly $3 million in loans under false pretenses.
"The fraud is in the lies and truth concealed," assistant independent counsel Ray Jahn said in his opening statement Monday.James McDougal; his ex-wife, Susan; and Tucker are accused of arranging the improper loans from a pair of federally backed lending companies in the mid-1980s.
They then allegedly planned to arrange sales of real estate at inflated prices to pay back a lending company run by financier David Hale, who blew the whistle.
"It was the intention of the defendants to go in, obtain the money, make their profits and sneak the money back," Jahn said. "This was nearly the perfect crime. Until David Hale came forward in 1993, the crime was undiscovered."
Hale contends that Clinton, as Arkansas governor, pressured him to make one $300,000 loan during a conversation at the state Capitol - an encounter McDougal lawyer Sam Heuer told jurors "never, ever, ever took place."
Defense lawyers contend that Hale concocted the meeting and allegations against the defendants in a story intended to spare himself from the full wrath of the law as federal investigators closed in on his fraudulent operation.
Hale, a former municipal judge, pleaded guilty to fraud and is awaiting sentencing as he cooperates with Whitewater investigators.
Clinton, Hillary Rodham Clinton and the McDougals were partners in the Whitewater land development in northern Arkansas. The Clintons say they were only passive investors.
At issue in the trial is a series of transactions between 1985 and 1987 that prosecutors say Tucker and the McDougals - with Hale's help - used to enrich themselves or repay debts for which the money was not intended. Susan McDougal is accused of depositing the $300,000 loan allegedly obtained with Clinton's help into her personal checking account.