AKRON, Ohio — A federal judge Monday ordered a Cleveland-based grand jury to conduct a criminal investigation into why Justice Department lawyers withheld information about Teamsters Union President Jackie Presser's role as an FBI informant from attorneys defending Presser's uncle on related embezzlement charges.
At the same time, U.S. District Judge Sam H. Bell granted a new trial for Presser's uncle, Allen Friedman, 63, and took the unusual step of declining to automatically grant a subsequent Justice Department motion to dismiss the charges against Friedman. The effect of Bell's decision was to make confidential federal records on Presser's role as an informant vulnerable to discovery proceedings if Friedman decides to subpoena the documents.
The judge suggested that Friedman had the right to learn the nature of Presser's relationship to the FBI. Friedman and his attorneys indicated that they would attempt to learn just that.
Bell also directed federal grand jurors to determine whether government documents were withheld "intentionally or accidentally--and, if intentional, whether it was criminal in nature and a fraud upon this court and the people of this community."
Bell's order launches the fourth investigation into why the Justice Department dropped its proposed prosecution of Presser. The department and the FBI already have an internal inquiry under way, and a Senate Governmental Affairs subcommittee is conducting a wider investigation of the matter.
Friedman, 63, was convicted two years ago of having fraudulently collected $165,000 in pay as a so-called "ghost employee" of Presser's hometown Cleveland local without having done any work.
A federal strike force later recommended that Presser be charged with payroll padding and lined up Friedman as a key witness for the prosecution. But the Justice Department last month dropped the proposed prosecution of the Teamsters leader after his defense attorney, John R. Climaco, argued that Presser had hired such "ghosts" in connection with his role as an FBI informant in organized crime and Teamsters cases.
Sought New Trial
Friedman's lawyers, Jack Levin and his son, Dennis Levin, sought a new trial for Friedman on grounds that Justice Department attorneys, as required by law, never told them that the FBI may have authorized or encouraged Presser to extend money to Friedman.
The government's failure to impart this information kept the Levins from raising an "entrapment" defense, which they now want to do, they told the court.
Bell, who had held a closed-door hearing on the matter Aug. 16, said Monday that he would support a move by Friedman to obtain at least some Presser-related documents that the Justice Department contends are too sensitive to release.
"There will be no shotgun approach (in seeking documents)," Bell said. "We need to define exactly what you want," he told the Levins.
U.S. May Give Up
In moving to dismiss the charges, Justice Department attorney William Bryson said the government would give up on the possibility of winning another conviction of Friedman rather than release "confidential" information about Presser's role as an informant.
But Friedman, who has already served 11 months of the three-year sentence he received upon his fraud conviction and is now free on a personal signature bond, said he wanted a new trial "to clear my name" instead of having the charges dropped.
Bell directed that the same grand jury that charged Friedman--and that was considering potential charges against Presser--should now probe the conduct of the Justice Department. He told Stephen H. Jigger, the Cleveland prosecutor who had recommended Presser's indictment, to provide grand jurors with a transcript of the judge's Aug. 16 hearing on Friedman's request for a new trial.
'Rumor and Innuendo'
"I think it's time we all dispel the shadow of rumor and innuendo and shine the light of truth on the happenings before the last trial," Bell said.
He asked William Edwards, chief of criminal prosecution for the U.S. attorney in Cleveland, "to monitor this investigation and look toward possible indictment if evidence exists."
Justice Department officials said Monday that they will turn over information on their investigation of Presser to the grand jury.
Meanwhile, an attorney for another alleged ghost employee, convicted crime figure Jack Nardi, said he might seek to set aside Nardi's conviction on the same grounds that Friedman is citing.
The attorney, Barry Halpern of Miami, said in a telephone interview that even though Nardi pleaded guilty two years ago to having received $109,000 in fraudulent salary payments, "we may ask that his plea be set aside on grounds of fraud and misrepresentation on the part of the government."
Halpern said that at the time Nardi, 43, pleaded guilty to receiving the money, "no one knew that Jackie Presser, who apparently approved the payments, may have been authorized or encouraged to do so by the FBI."