Around the Nation

Around the Nation

Grand juror says Starr used the facts

One of three ex-grand jurors appearing in Susan McDougal's criminal contempt trial, Jennifer Castleberry, testified that when McDougal appeared before the grand jury in 1996, "We wanted to hear what she had to say."

But the Clintons' former Whitewater partner "wouldn't talk."

"She wanted to give a statement," Castleberry said. "She would not allow us to read the statement. She refused to answer the questions."

Did Castleberry believe the attorneys in Starr's office "were out to get the Clintons?" prosecutor Julie Myers asked.

"No," Castleberry replied.

Later, she added: "They wanted to give us the facts to determine whether any crimes were committed."

Federal grand jurors, who meet in secrecy to weigh whether to bring criminal charges, are seldom named publicly, much less called as witnesses. Starr deputy Hickman Ewing, a federal prosecutor for 25 years, said he had never seen it done before.

McDougal's lawyer, Mark Geragos, said grand jurors are almost never called, the exceptions usually being cases alleging an improper effort to influence a grand jury.

In this case, prosecutor Mark Barrett said he needed the testimony to show corrupt intent by McDougal in avoiding questions before the grand jurors, who had come from around Arkansas to gather facts.

McDougal's lawyer, Geragos, argued that his client didn't want to answer questions because overzealous prosecutors were trying to force her to give false testimony against the president and first lady Hillary Rodham Clinton.

The Whitewater grand jury was "only fed a certain amount of information; the most important things were left out," Geragos said outside the courthouse.

Mrs. McDougal, facing criminal contempt and obstruction charges, does plan to testify at her trial, Geragos has said.

The McDougal jurors appeared to listen more attentively to the testimony of the grand jurors - in a sense, their peers - than they had to some other witnesses, such as FBI agents describing complex financial transactions.

The grand jurors met four days a month for two years, beginning in May 1996, to hear testimony in Starr's investigation of the Clintons' business dealings.

Mrs. Castleberry is from Mayflower, a tiny town 20 miles north of Little Rock. Foreman John Washam, from Jonesboro, also testified, as did Marsha High, who lives in Biggers, 140 miles northeast of Little Rock.

"I thought she had evidence we needed," Mrs. High said of Mrs. McDougal. "I still think she has answers we don't know about."

Prosecutors wanted to ask Mrs. McDougal about her Whitewater business partnership with the Clintons, including a $27,600 loan for the land development taken out in Bill Clinton's name from the McDougals' savings and loan. The president has testified he never borrowed money from the S&L.

Geragos said testimony from Mrs. Castleberry proved the panel of 23 citizens who investigated the Clintons had a "cozy relationship" with Starr's office.

He asked her whether she had "warm feelings" toward the prosecutors.

"Yes," replied the mother of three, who had to quit the grand jury in 1997 when she was pregnant. Her husband sat in the back row, watching intently.

Did the grand jury meet in "close quarters" so that the prosecutors and grand jurors were "almost co-workers?" Geragos asked.

"Sort of," Mrs. Castleberry replied in a soft voice.

Geragos elicited from Mrs. Castleberry the fact that prosecutors hadn't told the grand jury about financial assistance by Starr's office to their two chief witnesses, James McDougal and David Hale. Hale got at least $60,000 for living expenses. Prosecutors helped arrange housing for McDougal until he went to prison, where he died.

What basis did she have for concluding that Starr's prosecutors weren't out to get the Clintons? "Their conduct," Mrs. Castleberry answered.

Intel does not admit to monopoly status

Under the settlement, approved 3 to 0 by the Federal Trade Commission, Intel promised to share important technical details with other companies about its computer chips, but allowed for exceptions in rare circumstances. In return, Intel was not required to admit it has monopoly power.

"We are going to be watching," warned FTC Commissioner Robert Pitofsky. "I believe Intel is a company that will follow the rules, but like any order, we'll be keeping an eye on whether they're trying to get around it in any way."

The government's June lawsuit accused Intel of having monopoly power and using it to illegally withhold from three companies advanced technical details about new chips to "extort" valuable technology that the companies had developed independently.

The company acknowledged it did most of what the FTC alleged but said its practices did not violate federal antitrust laws.

settlement did not require Intel to admit it holds monopoly power over the microprocessor market.

"It was critical to settlement," said Tom Dunlap, Intel's general counsel. "We absolutely would not agree we have market power or anything else."

Intel products run roughly 85 percent of the world's personal computers. The company had sales of $26.2 billion last year.

Any concession about its influence over the market could have been used against Intel in future lawsuits, because antitrust laws require monopolists to adhere to a tougher set of business standards than other companies.

"It's important not to make that admission," said Warren Grimes, a former FTC staff attorney who now teaches antitrust law at Southwestern University in Los Angeles. "It would make it easier for private parties to bring private lawsuits against them."

But Richard Parker, the lead lawyer in the case for the FTC's Bureau of Competition, argued that the settlement puts limits on Intel that clearly signal its power, even without any admission by the company that it is a monopolist.

"While they're not agreeing to it, those kinds of obligations wouldn't apply to anybody without market power," Parker said. "We're setting rules for what a dominant firm has to do."

The FTC's decision to settle the Intel case - and the Justice Department's ongoing antitrust trial against Microsoft Corp. - illustrate the aggressive role Washington is carving for itself within the nation's burgeoning high-tech industry.

Although most FTC consent decrees remain in force for 20 years, the agency agreed in Intel's case to make its agreement valid for only half as long, reflecting what the government said was its understanding about the industry's pace of change.

Pitofsky called it "very important to appreciate that high-tech is different."

Intel and the government announced the settlement last week, on the eve of the first day of trial, but details initially were closely guarded.

A single commissioner, Orson Swindle, did not vote, for health reasons. The settlement becomes final after a 60-day public comment period.

Craig Barrett, Intel's chief executive officer, said he was "very gratified" that the company could reach agreement with the government, adding that the settlement "provides a framework for resolving future intellectual property disputes with our customers."

Under the settlement, Intel agrees to share important information about upcoming processors with other companies unless those firms don't pay Intel as agreed or unless they sue Intel and ask a judge to enjoin it from manufacturing its chips - a threat Parker described as "a 10.0 earthquake for Intel."

"The threat of an injunction would seem an extremely drastic threat to Intel, so the logic is, this gives them the ability to fight back," said William Kovacic, a George Washington University antitrust expert.

Intel also will not have to continue sharing information about its chips with businesses that break promises to keep the details confidential, or with businesses that use the information to design rival microprocessors.

The settlement does not affect another FTC investigation of Intel widely believed to be looking into its business relating to computer motherboards and graphics technology.

Gender segregation in military opposed

Emboldened by a series of sexual scandals in boot camps, congressional conservatives pushed hard in the past two years for greater segregation, and last fall set up a study panel they hoped would further advance their case.

Contrary to expectations, however, the panel voted 6 to 2, in favor of recent moves toward integration.

In its report, the Commission on Military Training and Gender Issues said each service should be allowed "to continue to conduct basic training in accordance with its current policies. This includes the manner in which basic trainees are housed and organized into units."

The conclusions were in accord with the views of the leadership of the Army, Navy, and Air Force, who believe it would be disruptive and counter-productive to reverse integration policies that have gained momentum since the early 1980s. Senior military leaders point out, among other things, that with enlistments flagging, the services badly need the women who now make up about 14 percent of the military.

But the recommendations run counter to those of another study panel, headed by former Sen. Nancy Kassebaum Baker (R-Kansas), which last year urged that men and women be separated in basic

training units to allow them to more quickly adapt to military life. Gender integration "is resulting in less discipline, less unit cohesion, and more distractions from the training program," that panel said in a report that was carried by an 11-0 vote.

The members of the new panel were chosen by Republican committee chairmen and by ranking Democratic members of the committees dealing with the military. And expectations were that there would be at least an even split.

03-18-99