Clinton's Whitewater Partner Recants

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WASHINGTON, D.C.: One of the Whitewater scandal's most flamboyant characters has added a new twist to the story by changing his story, again. President Clinton's former friend and business partner Jim McDougal tells federal investigators that Clinton knew about an illegal loan issued to his then-wife Susan. According to the New Yorker magazine, McDougal now backs David Hale's story that Clinton pressured him to make a $300,000 loan to Susan McDougal. That's a departure from what both McDougal and Clinton testified under oath last year, when McDougal and former Arkansas governor Jim Guy Tucker were convicted of fraud and conspiracy charges stemming from the Whitewater investigation. In videotaped testimony, Clinton denied any memory of making such a loan, and White House spokesman Mike McCurry says the President stands by his testimony. Why did the Arkansas businessman recant and open himself up to perjury charges? According to ex-wife Susan, who is in jail for refusing to testify on Whitewater, he is lying to avoid an 84-year prison term. But McDougal, who has a history of mental illness and is facing pressure from prosecutors, is far from the ideal witness. "If I were Kenneth Starr, I wouldn't be happy to rely on McDougal," TIME's Jeff McAllister says. "He has changed his story several times. Most Whitewater reporters don't believe him." What Starr hopes to get out of McDougal is a list of other people who might be able to corroborate his story. "We're entering the decisive final phase," McAllister says. "In the next 2 to 3 months, Starr will either write his report and go home, or he will be getting ready for prosecution."