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Cisneros Prosecutor Alleges Coverup

A decade on, the probe of Clinton's Housing secretary closes with a question mark. Officials deny hindering the independent counsel.

January 20, 2006|David G. Savage | Times Staff Writer

WASHINGTON — After about 10 years and $21 million spent investigating former Housing Secretary Henry G. Cisneros, the last independent counsel from the Clinton era officially ended his probe Thursday, complaining he needed more time to unravel what might have been a massive "coverup at high levels of our government."

David M. Barrett, a former Republican lawyer and lobbyist who was appointed in 1995 to investigate the Democrat, issued a 474-page "Final Report of the Independent Counsel." With it, he released a one-page statement to the media that alleged a coverup. "An accurate title for the report could be 'What We Were Prevented From Investigating,' " Barrett said in his statement.

"It would not be unreasonable to conclude as I have that there was a coverup ... and it appears to have been substantial and coordinated," Barrett said. "The question is, why? And that question regrettably will go unanswered."

His report offered no evidence of a coverup. It did say that numerous officials at the Justice Department and the Internal Revenue Service were not impressed by his allegations that the former San Antonio mayor might have cheated on his federal income taxes prior to 1992. When the Bush administration came into office in 2001, its top officials also refused to give Barrett permission to dig into old tax files.

In 1999, Cisneros pleaded guilty to a misdemeanor charge of lying to the FBI about how much money he had given to a former mistress. For at least four years afterward, Barrett continued to spend $2 million a year pursuing his theory that his probe had been thwarted.

Several officials who had dealt with Barrett reacted angrily to his final report.

It "is a fitting conclusion to one of the most embarrassingly incompetent and wasteful episodes in the history of American law enforcement," said Robert S. Litt, a Washington lawyer and a former Justice Department official during the Clinton administration. Barrett wasted millions in tax dollars "in the pursuit of his hallucinatory obstruction investigation," Litt said.

Barry Finkelstein, a veteran tax lawyer at the IRS, said he "was hauled into the grand jury on approximately 30 occasions" by Barrett to answer questions as to why no tax investigation was launched against Cisneros.

"Let me set the record straight," Finkelstein wrote in an attachment to Barrett's report. "I am not political, and I resent the independent counsel for implying as much. The reason the independent counsel uncovered no evidence of obstruction of justice over the last eight years is ... because there was no obstruction of justice to unearth."

Barrett's probe was not the most expensive investigation by an independent counsel. Kenneth W. Starr and his successors spent about $71.5 million in what began as the Whitewater investigation. In second place is Lawrence Walsh's $48-million probe of the Iran-Contra affair during the Reagan administration.

But Barrett has long held the unofficial title for having spent the most to accomplish the least. The case also helped to bring an end to the system of independent counsels. Both Republicans and Democrats came to believe that these open-ended investigations were unwise, and the law authorizing them was allowed to lapse.

At its start, his inquiry was seen as a minor matter that could be wrapped up in months.

Cisneros was not alleged to have abused his power in office nor of having misspent public money. The charges grew out of a pre-employment interview by the FBI.

Cisneros had stepped down as San Antonio's mayor in 1989 after admitting an affair with one of his aides, Linda Medlar Jones. When incoming President Clinton nominated him to be secretary of Housing and Urban Development, Cisneros told FBI agents doing a background check that he had given his former mistress about $10,000 a year to help her restart her life.

In fact, the amounts were much larger. In 1991, for example, the payments came to $73,000.

Jones secretly taped her phone calls with Cisneros. And after her relationship with Cisneros soured, she sold the tapes for $15,000 to a tabloid TV program. She also accused the HUD secretary of having lied to the FBI.

Her revelations launched the investigation of Cisneros -- and eventually led to her own imprisonment. When Barrett's staff realized that Jones had doctored the tapes, they turned on their chief witness and indicted her for lying and obstruction of justice.

Barrett also brought indictments in Lubbock, Texas, against Jones' sister and brother-in-law for alleged bank fraud. The couple had signed a mortgage loan so that Jones and her daughter could have a house to live in. Barrett alleged this was a fraud because the house was not for the sister and brother-in-law. The couple pleaded guilty to one count of making a false statement. All other charges were dropped, and they were put on probation.

Barrett also brought charges against two aides to Cisneros, but those charges were dropped.

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