In other words, it's not just the Republicans who pursue corrupt activities, try to cover them up with sabotage and then retaliate against anyone who talks about it.

Independent Counsel David Barrett, Esq.: Final Report

January 19, 2006
Inquiry on Clinton Official Ends With Accusations of Cover-Up
By DAVID JOHNSTON and NEIL A. LEWIS, NY TIMES

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WASHINGTON, Jan. 18 - After the longest independent counsel investigation in history, the prosecutor in the case of former Housing Secretary Henry G. Cisneros is finally closing his operation with a scathing report accusing Clinton administration officials of thwarting an inquiry into whether Mr. Cisneros evaded paying income taxes.

The legal inquiry by the prosecutor, David M. Barrett, lasted more than a decade, consumed some $21 million and came to be a symbol of the flawed effort to prosecute high-level corruption through the use of independent prosecutors.

Mr. Barrett began his investigation with the narrower issue of whether Mr. Cisneros lied to the Federal Bureau of Investigation when he was being considered for the cabinet position. He ended his inquiry accusing the Clinton administration of a possible cover-up.

His report says Justice Department officials refused to grant him the broad jurisdiction he wanted; for example, Attorney General Janet Reno said he could look at only one tax year. And after Internal Revenue Service officials in Washington took a Cisneros investigation out of the hands of district-level officials in Texas, the agency deemed the evidence too weak to merit a criminal inquiry, a conclusion strongly disputed by one Texas investigator.

Former officials of the Justice Department and the I.R.S. dismissed Mr. Barrett's conclusions in appendices attached to the report, saying the findings were the product of an inquiry that was incompetently managed from the start.

After being indicted on 18 felony counts, Mr. Cisneros pleaded guilty in 1999 to a misdemeanor charge of lying to investigators. He was later pardoned by President Bill Clinton.

Mr. Barrett kept his office open more than six years after the law that created the independent counsel system was allowed to die. Lawmakers in both parties had wearied of the many inquiries that had failed to achieve the goal of removing political influence from criminal investigations of administration officials.

Some Republicans long contended that efforts to close down Mr. Barrett's operation were motivated by an effort to suppress information about the Cisneros investigation that could reflect badly on Mr. Clinton and his wife, Senator Hillary Rodham Clinton.

But to Democrats and other critics of independent counsels, Mr. Barrett's inquiry has stood as a prime example what went wrong with an important post-Watergate law. That legislation allowed prosecutors, outside the Justice Department's traditional criminal justice bureaucracy, and armed with virtually unlimited time and money, to pursue their subjects into areas few federal prosecutors were likely to venture.

The final report, scheduled to be made public on Thursday, discusses in detail why the office remained in operation for so long: an intense behind-the-scenes clash between senior Justice Department officials and Mr. Barrett, who was trying to explore possible obstruction of justice within the Justice Department and the I.R.S.

A copy of the report was obtained by The New York Times from someone sympathetic to the Barrett investigation who wanted his criticism of the Clinton administration to be known. On Wednesday, Mr. Barrett declined to discuss the report, saying he would not talk about it until it was officially made public.

The report reveals little new about the accusations that led to Mr. Barrett's appointment - that Mr. Cisneros misled investigators about payments to a former mistress. Those issues were the subject of news accounts during the 1990's.

But it was not widely known that Mr. Barrett believed that Mr. Cisneros's handling of the payments to the former mistress might have violated tax laws or that he suspected Justice Department and I.R.S. officials of criminal obstruction to help Mr. Cisneros avoid scrutiny. The New York Daily News reported on Wednesday that Mr. Barrett would issue a report alleging a Clinton administration cover-up of Mr. Cisneros's tax problems.

The report included statements, in appendices, from former Justice Department and I.R.S. officials sharply disputing Mr. Barrett's assertions. In addition, Barry S. Simon, a lawyer for Mr. Cisneros, said in a letter dated Nov. 8, 2005, and included in the report, "Materials that are now being publicly released are simply an effort to 'try' the case that" Mr. Barrett's office could not win in court.

Mr. Barrett's 746-page report said that the tax and obstruction phase of the inquiry ended without a definitive conclusion, but it declared: "These agencies' treatment of possible charges against Cisneros was at best questionable and at worst represented serious wrongdoing. There seems to be no question that Cisneros was given special consideration and more limited scrutiny because of who he was - an important political appointee."

Justice Department officials who disputed Mr. Barrett's findings portrayed his investigation as deeply misguided and said the tax case against Mr. Cisneros had little merit. They suggested that the prosecutor had turned his disappointment in his inability to prove the obstruction allegations into unprovable theories.

Robert S. Litt, one of the Justice Department officials involved, wrote in a comment letter on May 31, 2005, that he was allowed to read only edited parts of the report but that he concluded that the report was "a fitting conclusion to one of the most embarrassingly incompetent and wasteful episodes in the history of American law enforcement."

Mr. Litt defended his evaluation of Mr. Cisneros's tax case, asserting that every Justice Department lawyer who had reviewed the case agreed with the conclusion. He said in his letter that Mr. Barrett's accusations of obstruction were "a scurrilous falsehood."

In his effort to explain his time-consuming inquiry, Mr. Barrett asserted that he was slowed by reluctant witnesses and impeded by Justice Department officials. He suggested that those officials had grown resistant to referring issues to outside prosecutors because of the number of cabinet officers already being investigated by special prosecutors at the request of Ms. Reno.

In the case of Mr. Cisneros, Ms. Reno agreed to expand the scope of Mr. Barrett's inquiry to possible tax violations but limited the investigation to a single tax-reporting year, a move that the report suggests effectively killed the investigation.

Mr. Barrett concluded that "in the end enough high-ranking officials with enough power were able to blunt any effort to bring about a full and independent examination of Cisneros' possible tax offenses in the face of what seemed to many to be obvious grounds for such an inquiry."

Mr. Barrett said I.R.S. officials in Washington took over a district-level inquiry in Texas into Mr. Cisneros's taxes and concluded that there was insufficient evidence to go ahead with a criminal investigation. But in a 1997 memorandum protesting the decision, an I.R.S. investigator in Texas said there was evidence that Mr. Cisneros had diverted substantial parts of his speaking fees in the early 1990's to the former mistress, without the knowledge of co-workers.

But other I.R.S. and Justice Department officials said that a fairly complete listing of Mr. Cisneros's income from various sources was available to his accountants, whom he relied on to prepare his tax returns. That would have made it impossible to sustain a prosecution, they said.

The prolonged investigation and the Barrett report have been the subjects of intense partisan battles. Democrats have asserted that the investigation was kept alive in hopes of developing and propagating accusations about the Clinton administration, while Republicans have said that supporters of Mr. Clinton and Senator Clinton were eager to suppress Mr. Barrett's inquiries. Mrs. Clinton, a potential presidential contender in 2008, is up for re-election this year.

Initially, the panel of three judges that oversees the lingering issues involving the independent counsel law agreed in October to the public release of Mr. Barrett's report but said the section with accusations about Clinton officials must be deleted.

But after Congressional Republicans attached a rider to a Department of Housing and Urban Development spending bill requiring publication of the full report, the judicial panel in November ordered a full disclosure.

Cisneros Pleads Guilty to Lying to FBI Agents
By Bill Miller
Washington Post Staff Writer
Wednesday, September 8, 1999; Page A1

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Former housing secretary Henry G. Cisneros pleaded guilty yesterday to a single misdemeanor charge of lying to the FBI about money he paid to a former mistress, ending a wide-ranging independent counsel investigation that lasted more than four years and cost more than $9 million.
Cisneros, 52, is the first Cabinet member of the Clinton administration to plead guilty in a case brought by an independent counsel, though the consequences of the plea proved relatively mild: Cisneros agreed to a $10,000 fine and a $25 court assessment, but he will serve no time either in prison or on probation and he will be free to seek elected office.

As part of the plea agreement, Cisneros was required to admit that he had knowingly given false information to FBI investigators. He told U.S. District Judge Stanley Sporkin that he regretted his "lack of candor" and added, "It is my hope that other people who aspire to and follow in public service will also perhaps learn . . . that truth and candor are important in the process of selecting people for governmental positions."

The resolution marked a less-than-triumphant end to the work of independent counsel David M. Barrett, one of 20 independent counsels appointed to investigate allegations concerning high-level officials since the law creating the position was enacted in 1978. Support for the statute wavered in recent years, largely as a result of the five-year investigation by independent counsel Kenneth W. Starr that led to President Clinton's impeachment, and over the summer Congress declined to renew the law.

Cisneros is one of several Clinton Cabinet officials to be targeted by independent counsel investigations. Former agriculture secretary Mike Espy was acquitted of corruption charges after a trial last year, and investigations of Interior Secretary Bruce Babbitt and Labor Secretary Alexis M. Herman are still ongoing.

The Cisneros plea agreement was negotiated during the past week and approved on the day that Cisneros was to begin standing trial on 18 felony charges in federal court. After months of acrimony between the two sides, it turned out that neither was eager to go forward with a lengthy trial that would have played like a soap opera. But the final agreement had even the judge wondering why such a simple outcome took so long.

"The problem with this case is that it took too long to develop and much too long to bring to judgment day," said Sporkin, adding that the matter "should have been resolved a long time ago, perhaps even years ago."

Cisneros was originally indicted in December 1997 on charges of conspiracy, making false statements and obstructing justice. The allegations stemmed from statements he had made to FBI background investigators in late 1992 and early 1993, while he was under consideration to be President Clinton's first secretary of housing and urban development. Cisneros was accused of lying about the amount of money he had provided to former mistress Linda Jones, a political fund-raiser with whom he had an affair beginning in 1987.

Over four years, the Barrett investigation looked into related issues such as whether Cisneros had done anything illegal to raise the money he paid Jones and whether his political allies did favors for her to keep her silent. But in the end, the case wound up back at its starting point, with the question of whether or not Cisneros had lied during his background check.

The case presented difficult issues for both sides. Barrett had to convince a jury in the District that the story he would tell about Cisneros's affair and lies constituted a real crime. That was complicated by the fact that Cisneros had long ago acknowledged the affair, had since reconciled with his wife and had told the FBI that he had aided Jones financially, merely underestimating the amount he had given her.

Cisneros, meanwhile, risked an embarrassing public airing of his private life. Barrett had intended to make his case using not only Jones's testimony but also tape recordings she had made of telephone conversations with Cisneros. In July, Barrett had prevailed in a hearing on the tapes' admissibility at trial, despite defense arguments that they were edited copies rather than originals.

In his guilty plea, Cisneros admitted telling an FBI agent that he had paid Jones roughly $2,500 a month after their relationship ended, when in fact the payments were considerably higher. All told, prosecutors said that Cisneros provided Jones with more than $250,000 from 1990 until 1994.

When the judge asked why he had lied, Cisneros answered, "For one thing, I wasn't sure about the numbers personally. I had never calculated them up. But beyond that, I was trying to protect [Jones], who didn't want the information out, and my own wife, who didn't know precisely what the number was. And in the final analysis I've attributed it to the pressure and confused sort of fog of the moment where I gave an incorrect number."

Cisneros, now the president and chief executive officer of Univision, a Spanish-language television network based in Los Angeles, declined further comment as he left the courthouse but issued a statement noting that none of the allegations concerned work he did for HUD.

Barrett likewise left the courthouse without comment but he issued a statement saying that his agreement to the plea was not a capitulation. "This disposition should in no way be viewed as minimizing the serious ethical breach by Mr. Cisneros. Deception by public officials and those seeking public office erodes trust and must be addressed and sanctioned," Barrett's statement said. "However, a just disposition of any prosecution must include an evaluation of the defendant's overall conduct. In this case, the conduct, while egregious, was committed by a person whose life has been otherwise dedicated to public service, and this fact must season the final decision."

Jones, Barrett's star witness, has fared far worse at his hands. Last year, she pleaded guilty to bank fraud and other charges in a spinoff of the original probe, admitting that she had used Cisneros's money for a down payment on a house. Jones received a 3½-year sentence, which Barrett's office then used as leverage to win her cooperation against Cisneros. During a hearing before Sporkin in June, she said she hoped to get out of prison soon. Her sister and brother-in-law also pleaded guilty to charges of misleading bank officials in the Texas case.

Jones also faced conspiracy and false statements charges in the Washington case; those were dismissed yesterday. In July, Barrett had agreed to dismiss similar charges against two former aides to Cisneros who were accused of helping him deceive the background investigators.

"Some might say the many millions of dollars the independent counsel had to expend is not justified by the seemingly light sanction obtained," declared Sporkin from the bench after the Cisneros plea agreement was entered. "But that is not the true measure of success of one of these proceedings."

Barrett had to prosecute, Sporkin said, adding, "We cannot permit an individual to lie his way into high public office. . . . The work of the independent counsel in this case reaffirms the importance of telling the truth."

© 1999 The Washington Post Company

The Cisneros Probe: Indictments Announced

A District of Columbia grand jury today returned a Twenty-One Count Indictment against former Secretary of Housing and Urban Development ("HUD") Henry G. Cisneros, and three others. Former Secretary Cisneros is charged with his co-defendants, Linda D. Medlar (now Linda D. Jones), Sylvia Arce-Garcia, and John D. Rosales, to defraud the United States and to commit offenses against the United States, in violation of Title 18, United States Code, Section 371. Mr. Cisneros is also charged with obstructing or endeavoring to obstruct justice, and making material false statements to, and concealing material information from, the Federal Bureau of Investigation (or "FBI"). The charges against Mr. Cisneros and his co-defendants arise from alleged false statements that Mr. Cisneros made to the FBI during the FBI's full-field background investigation of him, which took place shortly after he was nominated for the position of Secretary of HUD.

Count One of the Indictment charges the defendants with conspiring to defraud the United States by impeding, impairing, obstructing, and defeating the lawful government functions of (I) the United States Senate in the proper exercise of its constitutional advise and consent power and responsibility; (II) the federal Bureau of Investigations in the proper exercise of its lawful, authorized, governmental function to conduct full-field background investigations of high-ranking Presidential nominees such as Cabinet Secretaries; and (III) the United States Department of Justice in the proper exercise of its lawful, authorized, governmental function to adjudicate whether to grant top secret national security clearances to high-ranking Presidential nominees such as Cabinet Secretaries.

Count One of the Indictment also charges the defendants with conspiring to commit offenses against the United States in violation of the following criminal statutes: Title 18, United States Code, Section 1505 (Obstructing Inquiries Being Conducted by Congress); Title 18, United States Code, Section 1505 (Obstructing Proceedings Before the Department of Justice); Title 18, United States Code, Section 1001 (Making Material False Statements and Concealing Material Information from Governmental Departments or Agencies); and Title 31, United States Code, Section 5324(3) (Structuring Financial Transactions for the Purpose of Evading Financial Reporting Requirements). If convicted of those charges, the defendants could be sentenced to a maximum of up to five years in prison.

Counts Two through Seventeen charge Mr. Cisneros with violating Title 18, United States Code, Section 1001 by making material false statements and representations to, or engaging in a scheme to conceal -- by trick, scheme, or device -- material facts from, the FBI and the Department of Justice during the FBI's full-field background investigation of Mr. Cisneros. That background investigation took place in late 1992 and early 1993 as a result of Mr. Cisneros's nomination to be Secretary of HUD. If convicted of these charges, Mr. Cisneros could be sentenced to a maximum of up to five years in prison on each count.

Count Eighteen charges Mr. Cisneros with violating Title 18, United States Code, Section 1505 by obstructing or endeavoring to obstruct justice by, among other things, making false statements to the FBI during his background investigation in an effort to obtain a top secret national security clearance from the United States Department of Justice. If convicted of that charge, Mr. Cisneros could be sentenced to a maximum of up to five years in prison.

Counts Nineteen and Twenty charge Mr. Rosales, a former employee of Mr. Cisneros at Cisneros Communications in San Antonio, Texas, with violating Title 18, United States Code, Section 1001 , by, respectively, submitting a material false statement and representation to Special Agents of the Internal Revenue Service, and making a material false statement and representation to Special Agents of the Federal Bureau of Investigation. Both of those statements were made during the course of criminal investigations. If convicted of those charges, Mr. Rosales could be sentenced to a maximum of up to five years in prison.

Count Twenty-One charges Ms. Medlar with violating Title 18, United States Code, Section 1001, by making a material false statement to a Special Agent of the Federal Bureau of Investigation. That statement was made during the course of the Independent Counsel Investigation. If convicted of that charge, Ms. Medlar could be sentenced to a maximum of up to five years in prison.

The charges in the Indictment are merely accusations made by the grand jury, and the defendant is presumed innocent unless and until proven guilty.

The Independent Counsel's investigation is continuing.

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Office of the Independent Counsel In Re Henry Cisneros

The Cisneros Probe Stories

The Cisneros Indictment

Biography of David Barrett, Esq.