Q: What did you see in Jim McDougal?

A: Well, I met him through the man that I was working for, who was a big hero of mine, Jim Rankino. And he thought a lot of Jim McDougal. And I knew that McDougal had worked for Fulbright, and he was a big hero of mine. So, really, everyone on campus looked up to Jim, because of his association with Fulbright and his association with this very favorite professor on campus.

And Jim was very colorful, you know? He wore Bally shoes in a state where they didn't sell Bally shoes, you know, and he wore wild clothes and he spoke like a book, you know? I never heard anyone talk like he did. And just going down the road and talking with him in the car, I would think, "You know, this man talks like a book." I just love the way he talked. And, his political beliefs were so in line with mine. You know, I just found him very interesting.

Jim just wanted to get married. He wanted to get married and he wanted to do it very quickly. It was entirely planned by Jim McDougal. It was out in the country, and he wanted his friends to come, and I had a few friends from school who came. But, really, the wedding was not really discussed that much.

Q: When you look back, what do you think Jim thought he wanted and was getting in you? A prize?

A: I really loved the things about him that were real. When I met him, he had holes in his shoes. I remember, he crossed his feet at the desk, and he had big holes on the bottom of his shoes. And sometimes, you know, his shirts would be frayed. And he looked like the absent-minded professor, you know? I was very drawn to the fact that this was a man who spent his life in scholarly pursuits, I thought, you know, and in political ends that, to help people. And I saw him as a very studious, serious, caring person. And I loved him for that.

But what he saw in me I think was someone who had a lot of energy and a lot of enthusiasm. And, in fact, he told me, he said, "You know, I'm pretty successful now"--he was doing some real estate transactions, some things with Fulbright and with Jim Guy Tucker and with other people--and he would say, "It really doesn't mean anything, but when I talk to you about it, you know, it means something." Because I always thought that everything he did was wonderful.

Q: A couple of things about that-- He was, almost from the time he could walk and talk, a very political creature.

A: Yes.

Q: But also, there was Jim McDougal, the businessman, which was, which was what became manifest. Where do you think his heart was? Where was the real Jim McDougal? The politician or the businessman?

A: Well, Jim grew up in a tiny little town, very small. One main street. And he would listen to FDR records over and over and over again, of his speeches, and learn them, and learn the phrases. And he loved FDR. So, I think his very first love was politics. And he wanted to always be involved. He hitchhiked, I think, at 12 or 13 years of age, down to see Adlai Stevenson give a speech at Little Rock, from a town that's this size. And so, I know his first love was politics, but I think that underneath all that Jim knew that without money he would never be successful. He does not like people. He is not a social character. He's not going to win on his personality. And he's not going to go forward just because of his beliefs. And I think he always felt to move forward, where he wanted to go, in terms of women, in terms of politics, in terms of anything, the bottom line with Jim was always, "I've got to have the money to do that."

.... It was the only way he knew to interact. He had no friends. No one ever came to our house. We never had social events. We had no friends. His only life was his business, and politics, and so the two came together. It was really Jim's way of being a friend or socially interacting with you. You know, he couldn't sit down over a meal and just enjoy it. You know, we would always, always have a business meeting with our friends. And it was the only way, really, that Jim knew, maybe to control the situation, you know, or to be on top of the situation, you know?

And it sort of made him the guru, the man to go to, you know? It made him important to his friends. And that was the only way he knew to do it. He just wasn't a social person.

Q: That's actually an interesting idea. So, it was sort of like his psychic language was the business deal? That was the way he related to folks?

A: Yes, in the only way, really, that he knew. When we would go on trips together, and I was a young woman at the time, newly married, we would go away for the weekend, and we would stop at every real estate office along the road, on the way to wherever we were going. And that was his fun. That was Jim's way of having a good time, was looking for land and talking about land and doing a deal. The deal, to Jim, was more important than anything else--more important than the money, more important than the success, just doing the deal. And it was a constant thing, everyday, of trying to stop him from just continuing the dealing, because it was the only satisfaction, really, that he got, was consummating the deal.

Q: From the beginning it was that way?

A: Always. And I'm talking about in every facet of our life. When he asked me to marry him, I told him no at first, I was too young and I needed some time. I was still in college. And I asked him to wait. And he said no, that either, you know, I was going to do it or he was going to never see me again. So I said, yes, and, you know, could I have a little time before we got married? And he said no, you know, that either we got married or it was all over. And so, he immediately called my parents when I agreed, and closed the deal. I mean, after you tell your parents, what are you going to do, you know?

I remember sitting there thinking, "Don't call my mother," you know? And, after that, it was-- It had a life of its own. And he always knew, "close the deal," because that was what was important.

Q: ... (inaudible) proposals and negotiations?

A: It was always a negotiation. Everything in Jim's life, from the moment he meets you, is closing the deal, and winning the deal.

.... We had no friends. We literally had no friends. On a Sunday, we would sit at home and look at each other, and we would say, "You want to go to a movie?" "No." "Um, well, let's go see Jim Guy," you know, and we'd go by Jim Guy's house and have lunch, and then we'd pop over to Bill Clinton's house, because it was the only friends that Jim had. And I say that because, in terms of friends, Jim had to be on top somehow. He had to be in control. And to control that friendship had to be the business deal involved. You know, he had to provide them with some, something to talk about, something that was working. So, always the entre was, "Boy, it's really going good. This is really working."

You know, we did a condominium project with Jim Guy Tucker, which just led endless hours of wonderful dinners and wonderful times together, because we had a deal to talk about, and to go forward with. It was truly his only way of interacting and being valued. Within himself, he had no value. It was only the deal....

SUSAN MCDOUGAL TALKS ABOUT HILLARY CLINTON...

Q: Try to imagine for me, if you will, what it must have been like for young Hillary Rodham, coming into Arkansas, the heart throb of Bill Clinton plainly, but suddenly being cast into that Arkansas milieu.

A: She was uncomfortable, and people were uncomfortable, you know? It was a hard thing for her. I know that it was. She dressed differently, she looked very different. Her accent was different. Her ideas were even, I think, from where she was from, I think she was a forward-thinking person. So, it was a different mindset. It was a hard transition.

Q: I get the impression that she rubbed people the wrong way, that she rubbed Jim the wrong way?

A: Oh, no. Oh, absolutely not. Jim and Hillary were very close, and she relied on his advice and on his, um, counseling. In fact, when the four of us would get together, Jim and Hillary are the ones that bonded. I was always very surprised at that. And Jim always encouraged me to be friends with her. He would say, "Why don't you call her and invite her to go shopping?" or, "Why don't you call her and invite her to a movie?" He felt very protective to Hillary.

Q: And did you ever?

A: Oh, yes. Oh, yes.

Q: Tell me a little bit about that. Tell me about the friendship between the Clintons and the McDougals, the four of you.

A: Bill loved Jim. Now, in my time together with the four of us, he loved him. I mean, it was almost like a big brother, always glad to see him, a smile would come on his face, and he would always put his arm around Jim and sort of hover and ask Jim questions. From the very first time I met Bill, which was at a fund-raiser when I was in college, Jim and Bill always were close. When Hillary came in, Jim felt very protective of her. He could see that Hillary also had none of the social skills that Bill had, you know? And Jim felt very protective of that, because he had-- He didn't have them, either.

And he always liked her. And she always liked him. "She's very bright, Susan. She's going to be an asset to him." And he always was-- Whenever anything was said, if people said something about, you know, "I can't believe this is who Bill married or this is who Bill brought back," he would always defend her. In the beginning, I think they were very attracted to each other.

Q: So, when you think of, when you consider that friendship, the four of you--Jim and Susan and Bill and Hillary--as a social unit, what was the dynamic of that little group?

A: Now, in the early days-- It changed over the years, you know, but in the early days, I was very attached to my husband and I looked up to him. And I would say, the four of us, I would listen to every word that came out of Jim's mouth and I just looked up to him unbelievably. And Hillary did and Bill did. Jim was always, in the four of us, the focus, and he always led the discussions and he always chose the topics we discussed and where we would be and how long we would be there. If Jim was ready to go, we went. Jim was always the leader of our foursome, of our friends.

Q: Even Bill?

A: Always. But you have to remember, at that time, Bill was attorney general. He has lost the race for Congress and he has just become attorney general, and he looked up to Jim very much. He had once worked for Jim the Fulbrights' office. We all looked up to him and considered him someone who knew more than we did, you know, who was savvier than we were.

Q: Would you say, then, the same as the case with political giving. For example, Madison used to do fund-raisers for Bill--

A: Oh, it was absolutely. It was absolutely done in order for Jim to once again have a friendship when he had done something for someone. He couldn't ever have a friendship on an equal basis, or where someone had done something for him. You know, it wasn't-- It couldn't happen. He had to be in the position of having done something for you. And that's all it was. It wasn't so he could ask for anything or get anything, because it would never have crossed his mind to do that. He couldn't have had a relationship that was on any other footing except he being in control.

... The fun thing about politics with McDougal was that you never were at the parties or the gatherings or anything; you were in the back room with the guys who are really doing things. You know, and that was fun to me. I met all the old pols in Arkansas, you know, the guys who smoke cigars and sat and talked about, you know, the real things that were going on. No, Jim was not glad-handing or any of those things at political gatherings.

Q: And in that sense he had a really distinct idea of the importance of the banker in Arkansas politics, didn't he?

A: Yes. Money is the most important thing to Jim. Not in terms of what it can do for him, but only in terms of where it can get him. For whatever deal he's trying to close, if it is raising money or whatever it is-- You know, it's funny: Jim and I lived in a small apartment when we had Madison. I think it was $300 and something a month. He drove a really nice car, because he loved cars. But, you know, he had a nice office at the bank. And I couldn't get him to move into it for months. He would stay downstairs in a little cubby hole office, because he was too embarrassed to go into that office. He was not a man who really wanted things, but what it could give, so that he could feel in control of the situation...

THE CONVERSATION TURNS TO SUSAN MCDOUGAL'S TRIAL...

Q: Susan, I have to ask you, to your knowledge, did the President testify truthfully at your trial?

A: I wouldn't answer any questions that might help the independent counsel in his investigation.

Q: You've been given that opportunity, obviously, by Kenneth Starr. Thus, we're here in this place, conducting this interview--

A: Not an opportunity to tell the truth. I asked him, and he wouldn't allow it. .... He never, at any time, gave me the opportunity to just tell him the truth, like you're doing now.

Q: My point precisely. This is an opportunity to tell me the truth, to tell the American public the truth about that. Was the President testifying truthfully at your trial?

A: I would ask you to come back and ask me that question when Kenneth Starr packs his bags and stops this investigation. I won't answer any questions that might aid and continue this investigation that Kenneth Starr is doing.

Q: Is there a venue in which you would answer that question, before that?

A: Yes, yes. In fact, I would. If I could be placed under oath and if the proceeding could be in public, so that the press could be there and the public could be there to gauge for themselves, and to make their own opinions of whether I'm being truthful, and if I felt that it was an even playing field, I absolutely would.

Q: I offer you the most even playing field I can imagine right here, sitting in this room, to tell me whatever the truth is no that subject.

A: This is not under oath. It is not in a court of law. And I would very much like to tell the truth. I offered three times to Kenneth Starr to just please let me tell you what happened, and all three times they denied me that opportunity and told me they wanted something on the Clintons.

Q: To your knowledge, how much did Bill Clinton know about that $300,000 loan that--

A: I'll tell--

Off Camera: I'm sorry, we can't go into this. This is something we talked about before.

Q: Did Kenneth Starr ask you that specific question?

A: They asked me, you know, when I went before the grand jury, several questions, many questions, all having to do with the President--very few having to do with the true facts of any crime that was committed. I have yet to hear of anything like that. But all concerning the President, yes.

Q: This seems to me a question that you can answer, with just a simple yes or no, and that is, to your knowledge, did Governor Clinton in any way participate in the obtaining of that loan, speak to David Hale about it?

A: You know that I'm not going to answer any questions having to do with the investigation of the Whitewater matter, because it would aid Kenneth Starr, who I know to be in an investigation that is just wrong; it's just a wrong thing. And I just won't have anything to do with it...

BACK TO JIM MCDOUGAL...

Q: He had friends in high places. Do you believe that he was counting on Bill Clinton, his friend the governor, to step in and help him out in some way?

A: No one helped him. And, yes, I do think that he thought someone would. He would have. In his mind, I think it was an easy thing that was not done.

Q: I want to ask you a couple of things about that, Susan. Again, he faced a moment he could never have anticipated, and lived through it, which is that trial and the humiliation and losing his marriage and all of that. Did Governor Clinton not call? Did you not speak to Governor Clinton? Was there no contact at all? How did that happen?

A: He did call and ask how Jim was doing, and I told him he was doing better. And I said, you know, "A good thing to do would be to call Jim's mother"--she was very ill, and she loved Bill very much. And he did call Jim's mother. And in a conversation with Jim's mother, said--and I wasn't there, but from what I understand--that he would help Jim. And I think Jim did count on it. And I think all of this bitterness arose from the fact that he had, one, at the trial, he was hoping to regain whatever prominence that he did have, and there just was no one forthcoming. There was no friend; there was no one.

Q: I got the impression that it was very important to him what his mother thought of all this, and she believed, did she not, that Bill Clinton would come through for her son?

A: Yes.

Q: Did she convey that to your knowledge, to Jim?

A: Yes.

Q: How?

A: She told him that she-- She loved Bill Clinton very much. I mean, really idolized him. And she told Jim that she truly believed that Bill would help him. I know that to be true.

Q: So, as someone who has sat front row, center, through this spectacle, this ordeal, called Whitewater, what importance would you assign to Jim's embitterment over that failure by Bill Clinton, that sense of betrayal?

A: The bitterness is, I think, the catalyst for Whitewater.

Q: How so?

A: His bitterness is what led him to meet with the New York Times writer that wrote the first story on Whitewater. This bitterness is what led him to make that call to the Republican lawyer in Little Rock who taped it, that was so vicious about Jim Guy Tucker and about Bill Clinton. It was just his bitterness at his own failure.

All of Jim's relationships were driven by money, and he didn't have any anymore, and so they all failed. He had no relationships anymore.

Q: Do you think he consciously did those things, spoke to Jeff Gerth of the New York Times, and spoke to Sheffield Nelson, the Republican lawyer?

A: Yes, I saw Jim moments--

Q: For the purpose of--?

A: Oh, yes, I saw Jim moments before he met with Jeff Gerth. It was meant.

Q: Same thing with Sheffield Nelson?

A: No. No. I talked with Jim before he did that, and it wasn't meant to be as bad as it turned out to be. He was led, sort of, into that road by Sheffield Nelson. You can tell from the tape, if you listen to it, that Sheffield is leading him sort of down that road. But the Jeff Gerth piece was meant. Jim meant it to be an attack.

Q: How do you believe he-- How do you recollect he calculated the potential harm that might do to Bill Clinton?

A: Oh, I don't think he calculated the harm that it did do. I don't think he, in his wildest dreams, knew that this wold happen. In fact, the people decimated by what he did was himself and me. And the brimstone that rained down from that act rained down on my family, and on Jim. And so, of course, in his usual way of kicking down a door, he never thought about the end result of what was going to happen. But it was bitterly driven, that piece was.

Q: And there had been no way, Susan, had there, for you to, when you met and married and started out with Jim McDougal, to anticipate--

A: No, Jim thought he could smooth his way through. He thought he could talk his way through. And, actually, on the face of it, he could convince me that it was OK. You know, I could get with Jim for just a day and he would go through each thing with me, and it would be OK with me for a while, until I got back into, you know, a sane moment.

The great thing about mania is, it carries people with you. I don't know if anyone who hasn't been around it can understand it, but when Jim was on one of those manic rolls, he could convince anyone that what he was doing was perfectly sane. It was a great thing to do and we ought to all do it. And you could just get caught up in it. And if he had had a chance with the examiners, I'm sure they would've been out there, helping him buy the next subdivision. He just never had that chance with them...

MORE ON ANSWERING THE KEY QUESTIONS...

Q: Just again, if you answered the question for us, how would it--?

A: Because they would subpoena this tape. They've subpoenaed every tape I've ever done. They went all the way to this--

Q: Actually, we're just trying to understand--

A: They just want to understand-- They went all the way to the Supreme Court for the tape with the Diane Sawyer show, which was so bad, so bad. And they will do anything to get the tapes and say, "Listen, you see here, this is clearly a mistake she's made or something wrong she said, and it clearly shows that the David Hale story is true." I am not, in any way, ready to answer questions-- I mean, if I were going to, I would have to see-- They have rooms full of documents. This investigation has been going on ten years, you know?

Q: In retrospect, had it happened, had that call [from Clinton] come, had that gesture arrived, how would--?

A: It would've changed-- It would've changed Jim's life. And in doing that, this would never have happened.

Q: This?

A: This Whitewater, this entire episode, would never have happened. It would have been a different destiny for Jim McDougal.

Q: You believe that?

A: I absolutely believe that. This was all about Jim's bitterness and Jim's lack of self-esteem, and Jim's wanting to lash out. I remember very well him looking at me one day and saying, "I don't think they're having much fun up there, do you?" Talking about the Clintons having the White House. And especially bitter that they might be having a good time, and happy that they weren't. It would've changed his entire destiny.

Q: So, he harbored, he nursed this bitterness all through the campaign, all through the election, all through the inauguration and the-- While most Arkansans were feeling this sort of moment of Camelot--

A: Jim did not believe he would be elected, in fact. He started working with Sheffield Nelson early in the campaign, and told me that, in fact, they were working with the Republicans early in that campaign, and that Clinton would never be elected after Jim brought out these Whitewater facts and things. He never believed he would be elected.

Q: But as you look back, surely you must have some sympathy with his feelings of bitterness?

A: Oh, I have absolute sympathy. I have absolute sympathy for the man Jim was and the man Jim turned out to be. My heart aches for that. If there is some horrible thing in all of this, something that I wish I could change every day, it is the man Jim was or the man I thought Jim was, and the man he is now. If I could change that, I would.

Q: Susan, you know that he now has asserted, that he believes that you and Governor Clinton had a personal relationship, a personal involvement. Answer that for me.

A: I met Jim McDougal when I was 20 years old. Forty-three years of age, it's the first time I can remember ever telling him no, ever telling him, "I won't have any part of this," ever standing up to him and just telling him, "No." And I think it was such a blow to him that I would not do what he asked me to do, that I would not be a part of this lie that he was telling, that this, in his bitterness, he turned to--

Jim also has said publicly that I am the most moral, upright, innocent woman he has ever known. He has also said he has no knowledge of any such thing. So, I think it's his hurt again and his bitterness, that he saw us as a team going into this thing to testify against the Clintons and to right this terrible wrong that he feels. And I just wouldn't have any part of it. And he is very angry about that.

Q: But, again, this is unrelated to any criminal proceedings, but it's a question that you could, I'll give you the chance to answer truthfully. Did you have a relationship with Bill Clinton?

A: No.

Q: When he was governor?

A: No.

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