A federal judge Monday postponed the sentencing of Arkansas businessman James McDougal on fraud charges in the clearest sign so far that McDougal is cutting a deal with Whitewater prosecutors.
A plea bargain between McDougal and prosecutors would be worrisome for the White House because McDougal was closer to President Clinton than anyone else brought to trial so far in the politically charged Whitewater investigation. They were political allies for many years, and Clinton invested money in McDougal's disastrous Whitewater real estate venture.In an order dated Aug. 9 and unsealed on Monday morning, just hours before the sentencing was due to take place, U.S. District Judge George Howard postponed it until Nov. 18. He also slapped a gag order on all involved.
"Defendant James B. McDougal, his counsel and counsel for the government are directed not to discuss the reasons for the continuance," Howard said.
Sources close to McDougal said Sunday he was negotiating with the team of independent counsel Kenneth Starr, who is leading the Whitewater probe into Clinton's personal and political finances, and a deal was in the works.
McDougal, 56, was found guilty on 18 charges of fraud and conspiracy in the first Whitewater trial in May and faces up to 84 years in prison. His ex-wife, Susan, and former Arkansas Gov. Jim Guy Tucker were convicted on four and two charges respectively in that trial.
Tucker was to be sentenced Monday and Susan McDougal Tuesday. Both said they had no intention of trying to cut a deal with Starr's team, although Tucker's lawyers have pleaded for leniency by telling Howard the former governor is seriously ill with a degenerative intestinal condition requiring the surgical removal of his colon.
Susan McDougal's lawyer Bobby McDaniel said Monday he was not surprised by McDougal's bid for a plea bargain deal.
It was not clear what information McDougal might be able to give Starr or how credible a witness he would be. During his trial he bitterly accused Starr of leading a politically motivated probe aimed purely at hurting Clinton's re-election chances and he insisted the president did no wrong.
But, within 48 hours of the convictions, he hinted he might have some information for Starr.