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Starr Eclipses McDougal Trial

In opening testimony Thursday at Susan McDougal's criminal contempt trial, independent counsel Kenneth Starr's prosecutors immediately revisited her business ties to President Clinton and the first lady.

The prosecution presented evidence they say calls into question Mr. Clinton's sworn testimony about a fraudulent loan during a 1996 criminal trial.

But the proceedings were overshadowed by reports that Charles Bakaly, Starr's spokesman throughout the Monica Lewinsky scandal, abruptly resigned Thursday. His resignation came after Starr asked the Justice Department to investigate Bakaly in connection with a news leak of grand jury information in January.

A Jan. 31 article in The New York Times said that Starr had decided his grand jury had the authority to indict President Clinton while he was still in office. Bakaly went on national TV the next day and said the "information did not come from our officeÂ…we did not leak this information."

Starr's referral to Justice came after his office conducted its own inquiry, according to a source familiar with the situation. The inquiry indicated Bakaly may have had some involvement in the leak, but he has denied wrongdoing and has hired a lawyer, said the source, speaking on condition of anonymity.

McDougal is on trial for repeatedly refusing to answer questions of Starr's office on whether President Clinton knew about certain business transactions. Bakaly's resignation will give fuel to her lawyers, who have been trying to shift attention to Starr.

At the trial Thursday, Starr's prosecutors laid out evidence that links a $27,600 Whitewater loan in Mr. Clinton's name to a fraudulent $300,000 loan to McDougal. The link comes through a series of financial transactions involving the savings and loan McDougal owned with her husband, James, reports CBS News Correspondent Russ Mitchell.

FBI agent Mike Patkus told jurors he would have liked to ask her "whether Bill Clinton had any knowledge" about the link between the two loans. McDougal would not answer any of his questions.

Mr. Clinton testified that he never received any money from the failed savings and loan, and knew nothing about the fraudulent $300,000 loan she received in 1996.

Patkus added that McDougal paid off part of that Clinton loan while Whitewater real estate salesman Chris Wade paid off the rest using money he borrowed from Madison Guaranty.

Patkus told prosecutors the Wade loan was then paid off with a check from Whitewater, which had been replenished with money from a bank loan to the McDougals. According to Patkus, McDougal then used money from the $300,000 to pay off the bank.

President Clinton's lawyer, David Kendall, has suggested in the past that James McDougal simply made out the check and that Mr. Clinton didn't know about it.

Outside the courthouse, Starr deputy Hickman Ewing said "the question remains whether Bill Clinton knew about it or not."

Of McDogal, who listened intently to Patkus' testimony, Ewing said, "She smiled in the courtroom like maybe she knows the answers."

Patkus revealed that he and another FBI agent had discovered a handwritten document from Madison Guaranty identifying apparent borrowers. "B. Clinton" is among the names on the paper, Patkus said.

McDougal says she knows of no crimes involving the Clintons and that Starr's office is trying to get her to lie about the first family.

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