JUDGE ORDERS CLINTON SUBPOENA.

Byline: Angie Cannon and Aaron Epstein Knight-Ridder Tribune News Wire

A federal judge ordered a subpoena Monday for President Clinton to testify next month - possibly on videotape - in the Whitewater trial of Susan and James McDougal, his partners in the failed Arkansas real estate venture.

U.S. District Judge George Howard Jr. ordered court officials to prepare a subpoena for the president in the McDougals' fraud and conspiracy jury trial, which will begin March 4 in Little Rock.

Susan McDougal's attorney, Bobby McDaniel, has said Clinton could impeach the credibility of the government's star witness, former Municipal Judge David L. Hale, who also owned a government-backed finance company.

Hale has accused Clinton and James McDougal of pressuring him into making a fraudulent $300,000 Small Business Administration-backed loan to an advertising company owned by Susan McDougal in 1986. Hale has said that Clinton was trying to help McDougal bail out his failing thrift, Madison Guaranty Savings and Loan. Clinton has denied pressuring Hale into making the loan.

Last August, the McDougals and Arkansas Gov. Jim Guy Tucker were indicted on fraud and conspiracy charges, accused of defrauding the government with bogus loans through Madison Guaranty and Capital Management Services Inc., Hale's company. Hale has pleaded guilty to using his company to defraud the SBA.

The subpoena is bad political news for the president as Whitewater continues to haunt him as the 1996 presidential campaign begins.

Last month, Hillary Rodham Clinton gave four hours of subpoenaed testimony before the Whitewater grand jury about her legal billing records. They suddenly showed up in the White House about two years after they had been subpoenaed. Those Rose Law Firm records showed how frequently she worked on land deals for Madison Guaranty, which cost taxpayers $65 million when it collapsed in 1989.

White House officials were quick to say Monday that the president is being subpoenaed as a "friendly witness" and that his testimony likely will be videotaped.

The order of Howard, a Jimmy Carter appointee, allows that option, by saying: "If, however, it is concluded that the president's personal appearance is not tenable, counsel are directed to consider other options for presenting the president's testimony, for example, via videotape or satellite."

A White House source said: "People shouldn't be confused about what is going on. The McDougals think he can provide credible information that will undermine their accusers."

Clifford E. Fishman, a law professor at Catholic University of America in Washington, suggested that Clinton's testimony could help the defense even if, as expected, he denies exerting pressure to advance a loan.

"Simply by bringing a president into the trial, the defense could create the impression that the defendant is a very small flea on a much larger dog, that the prosecutor ought to be ashamed of himself for bothering with such a small target and ought to go after the big shots," Fishman said.

"It's not uncommon for people accused of corruption to invoke the names of the mayor, the police chief, the president, the secretary of state or whatever."

"We are aware of reports that Judge Howard has approved the request of the McDougals that the president provide testimony in their upcoming trial," the president's personal attorney, David E. Kendall, said in a statement. "We have received Judge Howard's order and we will review it carefully. The president's intention is to cooperate in an appropriate fashion."