The Justice Department and IRS announced that over 14,700 taxpayers have come forward to report previously-undisclosed foreign bank accounts under the voluntary disclosure program the IRS implemented following the settlement. This figure represents almost double the initial numbers the IRS announced in October and dwarfs the number of voluntary disclosures received in 2008.

“The Department of Justice is pleased with the extraordinary results achieved from this landmark settlement,” said Deputy Attorney General Ogden. “The message to American taxpayers is clear: the era of bank secrecy and hidden assets is over. We will continue to work closely with the IRS and our international partners to ensure that our tax laws are enforced fully and fairly, and that the rule of law is vindicated. We congratulate the IRS and the Department’s Tax Division, as well as our partners in the Swiss government, for this achievement.”

These voluntary disclosures, while extremely significant, are but one more step in the IRS and the Department’s efforts to hold those U.S. taxpayers who have undisclosed foreign accounts responsible for their actions. These efforts began in February 2009, with UBS AG’s agreement to enter into a groundbreaking deferred prosecution agreement, admitting guilt on charges of conspiring to defraud the United States by impeding the IRS. As part of the agreement, UBS immediately provided the United States with the identities of, and account information for, a number of U.S. UBS customers and paid $780 million in fines, penalties, interest, and restitution. The Department’s Tax Division worked hand-in-hand with the U.S. Attorney’s office in the Southern District of Florida to obtain these unprecedented results.

To date, the Justice Department has successfully prosecuted six U.S. customers of UBS whose information was provided pursuant to the Deferred Prosecution Agreement, and is conducting investigations of dozens of other UBS customers.

In addition to the deferred prosecution agreement, in August of this year, the IRS, the Justice Department, UBS and the Swiss Government, entered into a similarly landmark agreement, in the John Doe summons action, whereby the IRS was to receive thousands of additional undisclosed UBS accounts.

These criminal and civil efforts have, for the first time, breached Swiss bank secrecy and prevented taxpayers from hiding from the IRS regardless of the cross border nature of their accounts.  Within the United States, there has been an unprecedented increase in the number of taxpayers who have come forward to voluntarily disclose the existence of their foreign bank accounts and agree to pay tens of millions of dollars to the treasury.

The Department of Justice and IRS also made public the criteria set out in the settlement reached in the civil John Doe summons suit against UBS, which governed the selection of account holders to be identified as part of the settlement. The criteria cover accounts of various amounts and types, including bank-only accounts, custody accounts in which securities or other investment assets were held and offshore company nominee accounts through which an individual indirectly held beneficial ownership.  These criteria allow the IRS and the Justice Department to target the most egregious foreign account holders.

Amir Meshal

On the heels of a federal appeals court ruling that only Congress and the executive branch of government – not the courts — can interfere with government-sponsored “extraordinary rendition,” a U.S. citizen from New Jersey is asking another court to tell the government it wasn’t OK to secretly imprison and abuse him in three different African countries over a period of four months.

The citizen is Amir Meshal, 24, the son of Muslim immigrants from Egypt.

According to the American Civil Liberties Union (ACLU), which filed the lawsuit in Meshal’s behalf, after fleeing hostilities in Somalia in 2006, Meshal was arrested, secretly imprisoned in inhumane conditions and subjected to harsh interrogations by U.S. officials over 30 times in three different countries before ultimately being released four months later without charge,

“This case challenges the US government’s effort to evade accountability for illegal detention and interrogations in counter-terrorism operations by masking and hiding its involvement,” Jonathan Hafetz, a staff attorney with the ACLU National Security Project, told us.

According to the ACLU, Meshal was studying Islam in Mogadishu, Somalia, in December 2006, when hostilities broke out. With the airport disabled by bombing, Meshal fled to neighboring Kenya, where he wandered in the forest for three weeks seeking shelter and assistance before being arrested. Following his arrest, he was detained and repeatedly interrogated by U.S. officials who threatened to harm him, denied him access to counsel and accused him of receiving training from al-Qaeda, which Meshal denied.

Following his arrest and detention in Kenya, the suit says Meshal was illegally rendered to Somalia and then to Ethiopia where he was imprisoned in secret for over three months. There, U.S. officials subjected him to harsh interrogations while denying him due process and access to a lawyer, his family or anyone else in the outside world.

“The harsh treatment and mental anguish this individual suffered should never be experienced by anyone, let alone an American citizen at the hands of his own government,” said Hafetz. “This violation of basic constitutional rights must be remedied.”

Court filings say that during his detention, Meshal was kept in “filthy, crowded conditions in cells infested with cockroaches and given inadequate access to food, water and toilets. While in Kenya, the Americans who interrogated him repeatedly threatened him with torture. The interrogators warned Meshal that he could be sent to Somalia or Egypt, where the Egyptians ‘had ways of making him talk’, if he refused to answer questions or agree to the interrogators’ allegations. Meshal was also threatened with being sent to Israel, where, the interrogators said, the Israelis would “make him disappear.”

At least one consular affairs official from the U.S. Embassy in Nairobi met with Meshal and was aware of his detention, but later claimed he lost contact with Meshal following his rendition to Ethiopia. Meshal was finally released in May 2007 with no additional explanation.

“This is a U.S. citizen who was caught in hostilities abroad, and instead of

helping him return, U.S. officials abused him and mistreated him and never

charged him with a crime,” said Nusrat Choudhury, one of the lead lawyers from the ACLU representing Meshal. “Should they be allowed to do that without helping a U.S. citizen get home, and instead, denying him access to lawyers?”

The complaint was filed in the U.S. District Court for the District of Columbia against two agents of the Federal Bureau of Investigation (FBI) and two other unnamed U.S. government officials.

Last week, another Federal court ruled that the courts have no jurisdiction over matters relating to the practice known as “extraordinary rendition” – kidnapping a person in U.S. custody and sending him/her to a prison in another country.

In a 7-4 decision in the celebrated case known as Arar v. Ashcroft,  the appeals court for the second circuit in New York wrote, “If a civil remedy in damages is to be created for harms suffered in the context of extraordinary rendition, it must be created by Congress, which alone has the institutional competence to set parameters, delineate safe harbors, and specify relief. If Congress chooses to legislate on this subject, then judicial review of such legislation would be available.”

Some legal authorities believe Meshal may have a better chance of influencing the court because he is a U.S. citizen. The only other U.S. citizen whose lawsuit against a U.S. official has not been dismissed is Jose Padilla. Deemed an “enemy combatant” and currently serving a prison sentence for providing material support to terrorists, he is suing John Yoo, the former lawyer at the Justice Department who justified torture and Padilla says personally helped to devise his illegal treatment. A federal court in California refused to dismiss his case, in part because there was no other way for a U.S. citizen to hold U.S. officials accountable.

The ACLU also believes its case is stronger because the FBI agents named in the suit were not acting in a high-level supervisory role but were actually in the room, participated, and threatened him, while Meshal was being interrogated.

The Arar case involves a Canadian citizen, Maher Arar, who was detained by U.S. government officials at Kennedy International Airport in 2002 while enroute to his home in Canada following a vacation in Africa. He was held incommunicado for two weeks, then flown to Jordan and finally to Syria, where he was imprisoned in a coffin-size cell and tortured for ten months before being released by the Syrians without charges or explanation.

A two-year-long Canadian Government inquiry established that Canada had provided the US with incorrect information about Arar, and that he was guilty of nothing. He received an apology from the Canadian government and a cash award of $10 million.

The U.S., far from apologizing to Arar, has barely acknowledged that an error was committed. Condoleezza Rice, who was secretary of state at the time, has said only that the matter was not handled as well as it should have been.

The opinion by a majority of the New York appeal judges said, “For decades the United States and other countries have used ‘renditions’ to transport terrorist suspects from the country where they were captured to their home country or to other countries where they can be questioned, held, or brought to justice.”

It ruled that “Congress has not prohibited the practice, imposed limits on its use, or created a cause of action for those who allege they have suffered constitutional injury as a consequence.”

Four judges issued dissenting opinions. One of them, Judge Guido Calabresi, wrote, “I believe that when the history of this distinguished court is written, today’s majority decision will be viewed with dismay.”

Arar’s attorney, David Cole, indicated that the decision would be appealed to the Supreme Court.

He told us, “If the rule of law means anything, it must mean that courts can hear the claim of an innocent man subjected to torture that violates our most basic constitutional commitments.”

There is at least one other major case involving rendition pending before  U.S. appeals courts. In California, four men who claim they were “rendered” to secret prisons where they were tortured are suing a Boeing subsidiary company they say knowingly handled the logistics of their rendition flights for the Central Intelligence Agency (CIA).

The unsealing of the indictment against Cabelly was announced today by David Kris, Assistant Attorney General for National Security; Channing D. Phillips, Acting U.S. Attorney for the District of Columbia; Joseph Persichini, Jr., Assistant Director for the FBI’s Washington Field Office, and Adam J. Szubin, Director of the Treasury Department’s Office of Foreign Assets Control.

Cabelly, who was the principal and managing director of a Washington, D.C. consulting firm and a former State Department employee, is scheduled to appear in federal court today in the District of Columbia at 1:30 p.m. before U.S. Magistrate Judge Deborah Robinson. If convicted, he faces up 20 years in prison on each of the substantive Sudanese Sanctions Regulations counts, 20 years for the money laundering count, 10 years for the passport fraud, and five years each for the conspiracy and false statement counts.

According to the indictment, between early 2005 and mid-2007, Cabelly performed work on behalf of the Republic of Sudan, a country currently on the State Department’s State Sponsors of Terrorism list, without the approval of the U.S. government as is required by law under the Sudanese sanctions regulations. In an effort to make money, Cabelly brokered business contracts and transactions benefiting Sudan. He also provided Sudan with U.S. government information that was sensitive and controlled. All the while, Cabelly affirmatively misrepresented to U.S. officials the nature of his relationship with Sudan, as well as his relationship with the foreign entities doing business in Sudan.

Among other acts alleged in the indictment, Cabelly engaged in illicit contractual relationships with the oil industry in Sudan, operating as an intermediary between Sudanese government officials and oil company executives and a foreign oil company, and sought additional investors on behalf of that foreign oil company so that it could do business in the Sudan. He also allegedly provided strategic advice and counsel to Sudanese officials, including in the areas of economic development and trade, especially as it pertained to the development of the country’s petroleum natural resource and its government controlled airline industry.

According to the indictment, Cabelly was paid for these services by Sudanese government officials as well as by a foreign oil company. Cabelly allegedly directed a foreign oil company to deposit over $180,000 of the fees he received in an offshore account he maintained in the Cook Islands, an account he used to launder the funds in order to conceal the fact that it was proceeds obtained in violation of the sanctions. Cabelly also concealed his travel to the Sudan from U.S. authorities by misusing U.S. passports.

“The conduct alleged in this indictment is broad in scope and very serious,” said David Kris, Assistant Attorney General for National Security. “We will continue to pursue anyone who seeks to violate U.S. sanctions.”

“Those who pursue their own personal gain at the expense of our nation’s trade embargoes can expect to be aggressively prosecuted,” said Acting U.S. Attorney Channing Phillips. “Our national security depends on strict enforcement of U.S. export laws such as the Sudanese Sanctions Regulations.”

“The FBI is committed to enforcing all laws pertaining to U.S. persons and the representations of foreign governments to ensure those relationships aren’t counterproductive to our fight against terrorism,” said Joseph Persichini, Jr., Assistant Director for the FBI’s Washington Field Office.

“The activities detailed in this indictment – including facilitation of Sudanese oil transactions – would represent serious violations of U.S. sanctions law. We commend our federal law enforcement colleagues for their dedicated and collaborative efforts,” said Adam J. Szubin, Director of the Treasury Department’s Office of Foreign Assets Control.

The investigation was conducted through the collaborative efforts of the FBI’s Washington Field Office, the State Department’s Bureau of Diplomatic Security, the Naval Criminal Investigative Service (NCIS) and the U.S. Customs and Border Protection. The Department of Treasury’s Office of Foreign Assets Control (OFAC) also provided substantial assistance and cooperation throughout the course of the investigation.

The prosecution is being handled by Assistant U.S. Attorney Michael C. DiLorenzo from the U.S. Attorney’s Office for the District of Columbia, and Trial Attorney Patrick T. Murphy from the Counterespionage Section of the Justice Department’s National Security Division.

The public is reminded that a criminal indictment contains mere allegations and is not evidence of guilt. A defendant is presumed innocent unless and until proven guilty.

Attorney General Eric Holder today announced formal guidelines for federal prosecutors in states that have enacted laws authorizing the use of marijuana for medical purposes.

The guidelines make clear that the focus of federal resources should not be on individuals whose actions are in compliance with existing state laws, while underscoring that the Department will continue to prosecute people whose claims of compliance with state and local law conceal operations inconsistent with the terms, conditions, or purposes of those laws.

“It will not be a priority to use federal resources to prosecute patients with serious illnesses or their caregivers who are complying with state laws on medical marijuana, but we will not tolerate drug traffickers who hide behind claims of compliance with state law to mask activities that are clearly illegal,” Holder said. “This balanced policy formalizes a sensible approach that the Department has been following since January: effectively focus our resources on serious drug traffickers while taking into account state and local laws.”

The guidelines set forth examples of conduct that would show when individuals are not in clear and unambiguous compliance with applicable state law and may indicate illegal drug trafficking activity of potential federal interest, including unlawful use of firearms, violence, sales to minors, money laundering, amounts of marijuana inconsistent with purported compliance with state or local law, marketing or excessive financial gains similarly inconsistent with state or local law, illegal possession or sale of other controlled substances, and ties to criminal enterprises.

Fourteen states have enacted laws in some form addressing the use of marijuana for medical purposes. Here’s a copy of the memo from Deputy Attorney General David W. Ogden to United States Attorneys:

October 19,2009

MEMORANDUM FOR SELECTED UNITED STATES ATTORNEYS

FROM: David W. Ogden, Deputy Attorney General

SUBJECT: Investigations and Prosecutions in States Authorizing the Medical Use of Marijuana

This memorandum provides clarification and guidance to federal prosecutors in States that have enacted laws authorizing the medical use of marijuana. These laws vary in their substantive provisions and in the extent of state regulatory oversight, both among the enacting States and among local jurisdictions within those States. Rather than developing different guidelines for every possible variant of state and local law, this memorandum provides uniform guidance to focus federal investigations and prosecutions in these States on core federal enforcement priorities.

The Department of Justice is committed to the enforcement of the Controlled Substances Act in all States. Congress has determined that marijuana is a dangerous drug, and the illegal distribution and sale of marijuana is a serious crime and provides a significant source of revenue to large-scale criminal enterprises, gangs, and cartels. One timely example underscores the importance of our efforts to prosecute significant marijuana traffickers: marijuana distribution in the United States remains the single largest source of revenue for the Mexican cartels.

The Department is also committed to making efficient and rational use of its limited investigative and prosecutorial resources. In general, United States Attorneys are vested with “plenary authority with regard to federal criminal matters” within their districts. USAM 9-2.001. In exercising this authority, United States Attorneys are “invested by statute and delegation from the Attorney General with the broadest discretion in the exercise of such authority.” Id. This authority should, of course, be exercised consistent with Department priorities and guidance.

The prosecution of significant traffickers of illegal drugs, including marijuana, and the disruption of illegal drug manufacturing and trafficking networks continues to be a core priority in the Department’s efforts against narcotics and dangerous drugs, and the Department’s investigative and prosecutorial resources should be directed towards these objectives. As a general matter, pursuit of these priorities should not focus federal resources in your States on individuals whose actions are in clear and unambiguous compliance with existing state laws providing for the medical use of marijuana. For example, prosecution of individuals with cancer or other serious illnesses who use marijuana as part of a recommended treatment regimen consistent with applicable state law, or those caregivers in clear and unambiguous compliance with existing state law who provide such individuals with marijuana, is unlikely to be an efficient use of limited federal resources. On the other hand, prosecution of commercial enterprises that unlawfully market and sell marijuana for profit continues to be an enforcement priority of the Department. To be sure, claims of compliance with state or local law may mask operations inconsistent with the terms, conditions, or purposes of those laws, and federal law enforcement should not be deterred by such assertions when otherwise pursuing the Department’s core enforcement priorities.

Typically, when any of the following characteristics is present, the conduct will not be in clear and unambiguous compliance with applicable state law and may indicate illegal drug trafficking activity of potential federal interest:

• unlawful possession or unlawful use of firearms;
• violence;
• sales to minors;
• financial and marketing activities inconsistent with the terms, conditions, or purposes of state law, including evidence of money laundering activity and/or financial gains or excessive amounts of cash inconsistent with purported compliance with state or local law;
• amounts of marijuana inconsistent with purported compliance with state or local law;
• illegal possession or sale of other controlled substances; or
• ties to other criminal enterprises.

Of course, no State can authorize violations of federal law, and the list of factors above is not intended to describe exhaustively when a federal prosecution may be warranted. Accordingly, in prosecutions under the Controlled Substances Act, federal prosecutors are not expected to charge, prove, or otherwise establish any state law violations. Indeed, this memorandum does not alter in any way the Department’s authority to enforce federal law, including laws prohibiting the manufacture, production, distribution, possession, or use of marijuana on federal property. This guidance regarding resource allocation does not “legalize” marijuana or provide a legal defense to a violation of federal law, nor is it intended to create any privileges, benefits, or rights, substantive or procedural, enforceable by any individual, party or witness in any administrative, civil, or criminal matter. Nor does clear and unambiguous compliance with state law or the absence of one or all of the above factors create a legal defense to a violation of the Controlled Substances Act. Rather, this memorandum is intended solely as a guide to the exercise of investigative and prosecutorial discretion.

Finally, nothing herein precludes investigation or prosecution where there is a reasonable basis to believe that compliance with state law is being invoked as a pretext for the production or distribution of marijuana for purposes not authorized by state law. Nor does this guidance preclude investigation or prosecution, even when there is clear and unambiguous compliance with existing state law, in particular circumstances where investigation or prosecution otherwise serves important federal interests.

Your offices should continue to review marijuana cases for prosecution on a case-by-case basis, consistent with the guidance on resource allocation and federal priorities set forth herein, the consideration of requests for federal assistance from state and local law enforcement authorities, and the Principles of Federal Prosecution.

cc: All United States Attorneys

Lanny A. Breuer
Assistant Attorney General Criminal Division

B. Todd Jones
United States Attorney
District of Minnesota
Chair, Attorney General’s Advisory Committee

Michele M. Leonhart
Acting Administrator
Drug Enforcement Administration

H. Marshall Jarrett
Director
Executive Office for United States Attorneys

Kevin L. Perkins
Assistant Director
Criminal Investigative Division
Federal Bureau of Investigation

This story was originally published on Truthout.org

The Obama administration indicated in court papers it may appeal a federal judge’s ruling ordering the Justice Department to release portions of the transcribed interview between former Vice President Dick Cheney and Patrick Fitzgerald, the special prosecutor appointed to probe the roles Bush administration officials played in the leak of covert CIA operative Valerie Plame Wilson six years ago.

Last week, Jeffrey M. Smith, an attorney in the Justice Department’s civil division, filed an emergency motion in US District Court in Washington, DC, requesting a 30-day stay of the court’s Oct. 1, order that called for the parts of the Cheney interview to be released by Oct. 9.

Smith said the stay, which US District Court Judge Emmet Sullivan granted, was needed “in order to allow the Solicitor General [Elena Kagan] sufficient time in which to exercise her statutory authority to determine whether the [Department of Justice] will file an appeal in this action.”

“This case involves an important issue that will require consultations at high levels of Government,” Smith said, adding that the stay “is necessary to avoid the irreparable harm that would result if the Government is forced to disclose its documents to the public before it has the opportunity to consider whether to pursue its appellate rights.”

The case stems from a Freedom of Information Act lawsuit filed last year by the public interest group Citizens for Responsibility and Ethics in Washington (CREW). The organization has been trying to gain access to Cheney’s interview transcript and has found its efforts thwarted first by Justice Department attorneys in the Bush administration, who had said the interview transcript was being withheld on national security grounds, and now by the Obama administration, whose attorneys said the material, if released, could become “fodder for The Daily Show.”

The resistance from the Obama administration has left some of its supporters shaking their heads. Not only does the obstruction go against President Obama’s pledge of government openness, but it is protecting the reputation of Cheney, one of Obama’s most vocal critics.

It was Smith who argued in July that the transcript of Cheney’s 2004 interview with Fitzgerald about the CIA leak should remain secret for as long as ten more years to protect Cheney from any political embarrassment that would result from the transcript being released.

As previously reported by Truthout, Sullivan rejected Smith’s argument as well as others that claimed releasing the contents of the transcript would derail law enforcement efforts to obtain the cooperation of sitting vice presidents in future criminal probes.

“Any attempt to predict the harm that disclosure of these records could have … is therefore inherently, incurably speculative,” Sullivan wrote in his ruling. “Accordingly, the Court concludes that DOJ has failed to meet its burden of demonstrating that the records were properly withheld.”

Sullivan, however, did agree that the Justice Department can keep under wraps, on national security grounds, statements Cheney had made to Fitzgerald about declassification discussions he had with George W. Bush, conversations Cheney had with former CIA Director George Tenet about Ambassador Joseph Wilson’s February 2002 trip to Niger to investigate allegations that Iraq was seeking to purchase yellowcake uranium, discussions surrounding the 16 words in Bush’s January 2003 State of the Union address that asserted Iraq had attempted to purchase the uranium, talks between Cheney and then National Security Adviser Condoleezza Rice and conversations between Cheney and other Bush officials about how to respond to media inquiries about the Plame Wilson leak.

Senior Bush administration officials disclosed Plame Wilson’s identity to several journalists in June and July of 2003 amid White House efforts to discredit her husband, Ambassador Joseph Wilson, for challenging Bush’s use of bogus intelligence to justify invading Iraq.

Plame Wilson’s CIA employment was revealed in a July 14, 2003, article by the late right-wing columnist Robert Novak, effectively destroying her career. Two months later, a CIA complaint to the Justice Department sparked a criminal probe into the identity of the leakers.

Initially, Bush professed not to know anything about the matter, and several of his senior aides, including political adviser Karl Rove and the vice president’s chief of staff I. Lewis Libby, followed suit.

However, it later became clear that Rove and Libby had a hand in the Plame leak and that Bush and Cheney had helped organize a campaign to disparage Wilson by giving critical information to friendly journalists.

On June 24, 2004, Bush was interviewed by Fitzgerald for 70 minutes about the Plame leak. The only other member of the Bush team in the room during the meeting was Jim Sharp, the private lawyer that Bush hired, according to a press briefing by then press secretary Scott McClellan.

“The President … was pleased to do his part to help the investigation move forward,” McClellan said. “No one wants to get to the bottom of this matter more than the President of the United States.”

A couple of weeks earlier, Cheney was interviewed by Fitzgerald. Cheney retained a private attorney, Terrence O’Donnell, to represent him in the matter.

Fitzgerald’s criminal investigation led to Libby’s indictment in October 2005 and his subsequent conviction in March 2007 on four counts of perjury and obstruction of justice, which Bush later commuted.

During closing arguments at Libby’s trial, Cheney was implicated in the leak, as Fitzgerald acknowledged that Cheney was intimately involved in the scandal and may have told Libby to leak Plame’s status to the media.

Court papers filed by Obama’s Justice Department in July revealed that Bush and Cheney were in contact about the scandal, including what is described as “a confidential conversation” and “an apparent communication between the Vice President and the President.”

That court filing also revealed that Fitzgerald questioned Cheney about his participation in the decision to declassify parts of a 2002 National Intelligence Estimate regarding Iraq’s alleged WMD. It ultimately fell to Bush to clear selected parts of the NIE so they could be leaked as part of the White House campaign to disparage Wilson.

David Safavian

Former General Services Administration (GSA) Chief of Staff David H. Safavian was sentenced Friday to one year in prison on charges of obstruction of justice and making false statements in connection with the investigation into the activities of former Washington lobbyist Jack Abramoff.

In addition to the prison term, Safavian was sentenced today to two years of supervised release by U.S. District Court Judge Paul L. Friedman of the District of Columbia.

Safavian was found guilty by a federal jury in June 2006 of obstruction of justice and making false statements, but the verdicts were later vacated by the Court of Appeals for the D.C. Circuit and remanded for a new trial. A federal jury once again convicted Safavian of one count of obstruction of justice and three counts of making false statements on Dec. 19, 2008.

The jury in the second trial heard evidence that while Safavian assisted Abramoff in connection with the lobbyist’s attempts to acquire GSA-controlled properties, Abramoff took him on a luxury golf trip to Scotland and to London. The jury found that over the span of three years, Safavian made false statements in an attempt to conceal the fact that around the time of the golf trip he aided Abramoff with business before the GSA. The false statements included statements made to a GSA ethics officer and a GSA Office of Inspector General (GSA-OIG) Special Agent as well as falsely certifying a financial disclosure form.

The jury heard evidence at trial that Safavian’s efforts to cover up the assistance he provided Abramoff continued after he left the GSA in November 2004 to become the Administrator for the Office of Federal Procurement Policy at the Office of Management and Budget. The jury found that in May 2005, Safavian made false statements to an FBI Special Agent investigating Abramoff’s lobbying activities. According to evidence introduced at trial, Safavian told the FBI agent that he was unable to assist Abramoff with GSA-related activities around the time of the golf trip because he was a new employee at GSA.

Abramoff pleaded guilty in January 2006 to charges of conspiracy, honest services mail fraud and tax evasion and was sentenced in September 2008 to four years in prison in addition to the 22 months he served prior to the sentencing date.  To date, 20 individuals, including lobbyists and public officials, have pleaded guilty, been convicted at trial, or are awaiting trial in connection with the ongoing investigation into the activities of Abramoff and his associates.

DOJ whistleblower Tamarah Grimes

The U.S. Office of Special Counsel (OSC) long ago proved that it should not be taken seriously, particularly in matters connected to former Alabama Governor Don Siegelman.

OSC did not help its already sullied reputation with a recent finding that whistleblower Tamarah Grimes’ allegations of prosecutorial misconduct in the Siegelman case were “unsubstantiated.”

OSC’s report is dubious on its face. It fails to address perhaps Grimes’ two most serious allegations–that U.S. Attorney Leura Canary remained involved with the case after her supposed recusal and that prosecutors pressured witnesses to remember events a certain way.

It is interesting to note that those two charges can clearly be substantiated–the first with e-mail evidence that Grimes provided to the Department of Justice, the second with similar accounts from a number of other individuals. Is that why OSC did not want to touch those issues? Does that raise questions about the validity of OSC’s entire investigation?

The report becomes even more dubious when you consider OSC’s recent history. Federal agents raided the office of former OSC chief Scott J. Bloch in May 2008 amid allegations of improper political bias and obstruction of justice. The New York Times reported that agents were trying to determine if Bloch, a 2003 George W. Bush appointee, had hired an outside firm to scrub his computer.

Gee, where would a Bush loyalist ever come up with such an idea?

As we reported last November, substantial evidence indicates Bloch and associate deputy attorney general David Margolis did their best to sweep Grimes’ allegations under the rug and protect Leura Canary. And it appears that Bloch, before leaving office with the feds on his tail, removed Grimes’ most serious allegations–making sure investigators would not even look into them.

How bad have things been at OSC in recent years? Consider this article from governmentexecutive.com in May 2009. It provides a searing analysis of the agency’s woes:

The Office of Special Counsel is an independent oversight agency charged with protecting federal employees from prohibited personnel practices, particularly whistleblower retaliation. For an agency that must build a reputation for fairness with federal employees and other agencies, scandals like the ones during Bloch’s tenure can be especially harmful.

“There was a lot of damage done,” says former Deputy Special Counsel Timothy Hannapel, who served under Clinton-appointed Special Counsel Elaine Kaplan. “We’d tried to put the agency on a new path to credibility and . . . it was all just erased and in a drastic way, with the credibility of the agency at rock bottom.”

The agency’s credibility is “at rock bottom,” according to a former insider? And we are supposed to believe that OSC conducted a fair, thorough investigation of Tamarah Grimes’ charges?

Things do not appear to have gotten any better at OSC in recent weeks. With Bloch’s exit, William E. Reukauf became interim special counsel. Reukauf issued the report on Grimes’ allegations, and his biography raises questions about whether he was able to approach the task in an impartial manner.

Reukauf is described in press reports as a career Department of Justice employee. But he was elevated to the role of associate special counsel in 1985, under the Reagan administration. He was appointed interim special counsel by George W. Bush.

A source tells me that Washington, D.C., insiders say Reukauf is a “Bush flunkie” and has been one since at least 1983. Our source also says that Reukauf worked for President George H.W. Bush about the time that Bill Canary worked in the White House as a special assistant for intergovernmental affairs.

Consider this item from Bill Canary’s biography:

A former local elected official, Canary has an extensive background in the public policy and governmental arenas. In 1989, President George H. W. Bush appointed him to serve in the White House as special assistant to the president for intergovernmental affairs.

Canary, now head of the Business Council of Alabama, just happens to be married to . . . Leura Canary. Mr. Reukauf wouldn’t have issued a seriously flawed report in order to save the skin of his buddy’s wife, would he?

Tamarah Grimes was quick to point out the dysfunctional environment from which the OSC report sprang. Says Grimes:

The OSC report dated 9-29-09 is particularly egregious in that its conclusions are based on DOJ’s internal investigation. The gist of the OSC report is: Based upon information obtained from DOJ, in an investigation conducted by DOJ, we conclude that DOJ acted reasonably and within statutory limitations.

No one has been appointed as special counsel since former Special Counsel Scott Bloch resigned under a cloud of controversy late last year. Thus, based upon the OSC reports, it would appear that the Office of Special Counsel is a rudderless organization where no one is willing to stick his or her neck out for fear of reprisal.

After observing my fate and the fate of other whistleblowers, who could blame them? The irony is that the OSC is “the” whistleblower organization!

Grimes notes the high cost she has paid for bringing prosecutorial misconduct to public attention. She says change is desperately needed in the federal government’s whistleblowing procedures:

None of this is likely to change unless the public demands change from the only entity with the authority to investigate–Congress. Congress has oversight authority over DOJ.

Today my life and my career are in shambles for performing my duty as a federal employee, for telling the truth and speaking out. Tomorrow it could be anyone–for without accountability, there is no justice.

Will anyone hold Leura Canary and her henchmen in the Middle District of Alabama accountable? Does anyone in the Barack Obama administration, particularly Attorney General Eric Holder, have a clue what is going on in “The Heart of Dixie”? Will Congress ever carry out its duty and investigate the Bush DOJ?

We still are waiting for answers to those questions.

Roger Shuler, a regular contributor to The Public Record, resides in Birmingham, Alabama. A 1978 graduate of the University of Missouri, Shuler worked 11 years as a reporter and editor for the Birmingham Post-Herald before working 19 years in several editorial positions at the University of Alabama at Birmingham (UAB). He blogs at Legal Schnauzer.

US District Court Judge Emmet Sullivan rejected arguments by Obama Justice Department appointees that releasing the transcript would discourage future vice presidents from cooperating with criminal investigations because their words could become “fodder for The Daily Show.”

At a federal court hearing in July, Jeffrey Smith, an attorney in the Justice Department’s Civil Division, argued that the transcript of Cheney’s 2004 interview with special prosecutor Patrick Fitzgerald about the CIA leak should remain secret for as long as ten more years to protect Cheney from any political embarrassment that would result from the transcript being released.

“Any attempt to predict the harm that disclosure of these records could have … is therefore inherently, incurably speculative,” Sullivan wrote in his ruling. “Accordingly, the Court concludes that DOJ has failed to meet its burden of demonstrating that the records were properly withheld.”

Sullivan, however, did agree that the Justice Department can keep under wraps, on national security grounds, statements Cheney had made to Fitzgerald about declassification discussions he had with George W. Bush, conversations Cheney had with former CIA Director George Tenet about Ambassador Joseph Wilson’s February 2002 trip to Niger to investigate allegations that Iraq was seeking to purchase yellowcake uranium, discussions surrounding the 16 words in Bush’s January 2003 State of the Union address that asserted Iraq had attempted to purchase the uranium, talks between Cheney and then National Security Adviser Condoleezza Rice and conversations between Cheney and other Bush officials about how to respond to media inquiries about the Plame Wilson leak.

Court papers filed by Obama’s Justice Department in July revealed that Bush and Cheney were in contact about the scandal, including what is described as “a confidential conversation” and “an apparent communication between the Vice President and the President.”

That court filing also revealed that Fitzgerald questioned Cheney about his participation in the decision to declassify parts of a 2002 National Intelligence Estimate regarding Iraq’s alleged WMD. It ultimately fell to Bush to clear selected parts of the NIE so they could be leaked as part of the White House campaign to disparage Wilson.

“Judge Sullivan rightly rejected a Justice Department interpretation of the [Freedom of Information Act] that would have allowed the government to withhold virtually any law enforcement record even where an investigation has long since been concluded,” said Melanie Sloan, executive director of the government watchdog group Citizens For Ethics and Responsibility in Washington (CREW). The case stems from a FOIA lawsuit filed last year by CREW.

“We are disappointed, however, that the judge allowed DOJ to withhold portions of some records because the American people deserve to know the truth about the role the vice president played in exposing Mrs. Wilson’s covert identity. High-level government officials should not be permitted to hide their misconduct from public view,” Sloan added.

A Justice Department spokesman said Sullivan’s ruling is under review. Unless the Obama administration decides to appeal, the public may learn additional details about Cheney’s role in the leak of Plame Wilson’s covert identity by October 9, the deadline Sullivan gave the Justice Department to release a redacted version of Cheney’s interview transcript.

Senior Bush administration officials disclosed Plame Wilson’s identity to several journalists in June and July of 2003 amid White House efforts to discredit her husband, Ambassador Joseph Wilson, for challenging Bush’s use of bogus intelligence to justify invading Iraq.

Plame Wilson’s CIA employment was revealed in a July 14, 2003, article by the late right-wing columnist Robert Novak, effectively destroying her career. Two months later, a CIA complaint to the Justice Department sparked a criminal probe into the identity of the leakers.

Initially, Bush professed not to know anything about the matter, and several of his senior aides, including political adviser Karl Rove and the vice president’s chief of staff I. Lewis Libby, followed suit.

However, it later became clear that Rove and Libby had a hand in the Plame leak and that Bush and Cheney had helped organize a campaign to disparage Wilson by giving critical information to friendly journalists.

On June 24, 2004, Bush was interviewed by Fitzgerald for 70 minutes about the Plame leak. The only other member of the Bush team in the room during the meeting was Jim Sharp, the private lawyer that Bush hired, according to a press briefing by then-press secretary Scott McClellan.

“The President … was pleased to do his part to help the investigation move forward,” McClellan said. “No one wants to get to the bottom of this matter more than the President of the United States.”

A couple of weeks earlier, Cheney had been interviewed by Fitzgerald. Cheney retained a private attorney, Terrence O’Donnell, to represent him in the matter.

Fitzgerald’s criminal investigation led to Libby’s indictment in October 2005 and his subsequent conviction in March 2007 on four counts of perjury and obstruction of justice, which Bush later commuted.

During closing arguments at Libby’s trial, Cheney was implicated in the leak, as Fitzgerald acknowledged that Cheney was intimately involved in the scandal and may have told Libby to leak Plame’s status to the media.

Fitzgerald told jurors that his investigation into the true nature of the vice president’s involvement was impeded because Libby obstructed justice.

Libby’s attorney, Theodore Wells, told jurors during his closing arguments that Fitzgerald had been trying to build a case of conspiracy against the vice president and Libby, and that the prosecution believed Libby may have lied to federal investigators and to a grand jury to protect Cheney.

“Now, I think the government, through its questions, really tried to put a cloud over Vice President Cheney,” Wells said.

Rebutting Wells, Fitzgerald told jurors: “You know what? [Wells] said something here that we’re trying to put a cloud on the vice president. We’ll talk straight. There is a cloud over the vice president. He sent Libby off to [meet with New York Times reporter] Judith Miller at the St. Regis Hotel. At that meeting – the two-hour meeting – the defendant talked about the wife [Plame]. We didn’t put that cloud there. That cloud remains because the defendant obstructed justice and lied about what happened.”

Moreover, copies of Cheney’s handwritten notes also appeared to implicate Bush in the leak case.

Cheney’s notes, which were introduced as evidence during Libby’s trial, called into question the truthfulness of Bush’s vehement denials about having prior knowledge of the sub rosa campaign against Wilson.

In an October 2003 note to then-press secretary McClellan, Cheney demanded that the press office add Libby to a list of White House officials being cleared of any role in the Plame leak.

“Not going to protect one staffer + sacrifice the guy that was asked to stick his head in the meat grinder because of incompetence of others,” Cheney wrote. However, the note revealed that Cheney had originally written “this Pres” before crossing that out and using the passive tense “that was.”

In other words, the original version suggested that Bush had asked Libby “to stick his head in the meat grinder,” an apparent reference to dealing with the Washington press corps.

Last year, Congressman Henry Waxman, then the chairman of the House Oversight and Government Reform Committee, revealed in a letter sent to Attorney General Michael Mukasey that, according to FBI transcripts given to Waxman’s committee, Libby told federal investigators that Cheney might have told him to leak Plame’s CIA ties to reporters.

“In his interview with the FBI, Mr. Libby stated that it was ‘possible’ that Vice President Cheney instructed him to disseminate information about Ambassador Wilson’s wife to the press. This is a significant revelation and, if true, a serious matter. It cannot be responsibly investigated without access to the Vice President’s FBI interview,” Waxman wrote.

Enron imploded in a wave of accounting scandals in 2001.

In addition to the prison term, U.S. District Court Judge Vanessa Gilmore ordered Hirko, 53, of Portland, Oregon, to pay about $7 million in restitution to victims through the U.S. Securities and Exchange Commission’s Enron Fair Fund, in accordance with the terms of the plea agreement. Hirko pleaded guilty on Oct. 14, 2008, in U.S. District Court in Houston to one count of wire fraud charged in a superseding indictment.

“I reviewed and approved press releases that contained, among other things, statements that the BOS was complete and I knew it was in development,” Hirko told Gilmore when he entered his guilty plea.

In July 2005, Hirko and four other EBS executives were tried on various charges of conspiracy to commit securities and wire fraud, securities fraud, wire fraud, insider trading and money laundering relating to their employment at Enron. The trial resulted in a mistrial, and Hirko was subsequently charged in a superseding indictment with wire fraud, securities fraud and insider trading.

According to the superseding indictment and the plea agreement, Hirko participated in Enron’s annual analyst conference in Houston at which Enron introduced EBS as one of its “core” units. Enron also announced the development of a broadband operating system or “BOS.” According to the plea agreement, the BOS was purported to be an “intelligent” operating system and was described as, among other things, a standard protocol for accessing real-time bandwidth.

As alleged in the superseding indictment, Enron issued a press release on May 15, 2000, announcing the acquisition of Warpspeed Communications. According to Hirko’s guilty plea, the Warpspeed release falsely represented the status of the BOS and implied that it was already embedded and functioning as a part of Enron’s network.

Specifically, the Warpspeed release stated that the BOS “allows application developers to dynamically provision bandwidth on demand for the end-to-end quality of service necessary to deliver broadband content.” According to the plea agreement, Hirko reviewed and approved this language even though the Warpspeed release contained material inaccurate representations regarding the BOS’s status.

In doing so, Hirko admitted that he acted with reckless indifference to the true facts, including: that the BOS was under development throughout his employment at Enron; that it was never embedded on Enron’s network; and that it could not dynamically provide bandwidth on demand or provide for the end-to-end quality of service necessary to deliver broadband content.

According to the plea agreement, Hirko’s approval of the Warpspeed release, as well as other press releases, assisted in maintaining Enron’s overall stock price, thereby improperly maintaining the value of Hirko’s holdings of Enron stock.

The Houston Chronicle reported last October that Hirko, who joined Enron in 1997, worked closely with former Enron chief executive Jeffrey Skilling and co-CEO Kenneth Rice to make EBS appear profitable when it was actually a money-losing venture.

Former Enron CEO Jeff Skilling embraced the division as a major profit center amid the dot-com boom. However, the unit fizzled despite big plans for video streaming, bandwidth-on-demand and bandwidth trading as the telecom industry cratered in 2000 and 2001.

Hirko, Rice and Skilling talked up the division at Enron’s January 2000 analyst conference, and the company’s stock rose $13 a share that day.

Rice pleaded guilty to securities fraud in July 2004. A few weeks later, Kevin Hannon, the former chief operating officer of EBS, pleaded guilty to conspiracy.

Charges against the EBS employees were initially brought in March 2003 by the Enron Task Force, a team of federal prosecutors and agents formed to investigate matters related to the collapse of Enron. All remaining Enron Task Force cases are now being handled by the Criminal Division’s Fraud Section, with the investigatory assistance of the FBI.

DOJ whistleblower Tamarah Grimes

Leura Canary, the U.S. attorney for the Middle District of Alabama, wrote press releases about the prosecution of Gov. Don Siegelman that were distributed under the signature of assistant prosecutor Louis Franklin. Also, Canary regularly had two assistants communicate her suggestions about Siegelman’s case to Franklin.

All of this took place after Canary had announced her recusal from the Siegelman case. And they are two of many stark examples of prosecutorial misconduct outlined in a letter dated June 1, 2009, from whistleblower Tamarah Grimes to U.S. Attorney General Eric Holder.

Eight days after writing the letter, Grimes was fired from her position as a paralegal for the Department of Justice in Montgomery, Alabama. So far, there is no indication that Holder has taken any action in the matter.

The complete Grimes letter can be viewed here.

Grimes tells Holder that Canary’s recusal claims were false regarding the prosecution of Siegelman and former HealthSouth CEO Richard Scrushy in what became known as “The Big Case” in the Montgomery office. Patricia Snyder Watson, the district ethics officer and first assistant U.S. attorney, was a frequent conduit of information to and from Canary. Writes Grimes:

Mrs. Canary publicly stated that she maintained a “firewall” between herself and The Big Case. In reality, there was no “firewall.” Mrs. Canary maintained direct communication with the prosecution team, directed some actions in the case, and monitored the case through members of the prosecution team and Mrs. Watson.

Grimes said she regularly raised concerns with Watson about misconduct among prosecutors on the Siegelman case–to little effect:

Mrs. Watson advised me that The Big Case was the most important case in the office and that U.S. Attorney Leura Canary would grant prosecutors virtually unlimited latitude to obtain a conviction. Mrs. Watson told me that as a paralegal, I did not have standing to question the actions of a federal prosecutor, and that if Mrs. Canary found out that I had done so, I would certainly be disciplined for insubordination.

With the threat of disciplinary action hanging over her head, Grimes tried to ignore the misconduct. But it was hard to ignore overt negotiations of proposed testimony of key cooperating witnesses Nick Bailey and Lanny Young. The lead prosecutor, Assistant U.S. Attorney Stephen P. Feaga, instructed investigators to meet with Bailey and Young frequently. Writes Grimes:

Mr. Feaga instructed the investigators how to approach the cooperating witnesses on a particular subject and specified what he needed the witness to say in order to support his prosecutorial theory. For instance, Mr. Feaga would say, “See if you can get him to say it like this . . . , ” “Ask him if he is comfortable saying it like this . . . ,” or “I need him to say it like this . . . .” The investigators would return from meeting with the cooperating witnesses to report to Mr. Feaga, who would send the investigators back with new instructions.

Grimes said she was not the only person concerned about prosecutors’ creative approach to the facts of the case:

I recall one of the investigators, FBI agent Keith Baker, commented on the conduct by saying, “There is truth, there are facts, and then there are “Feaga facts.”

“Feaga facts” apparently were present in what proved to be the key testimony against Siegelman and Scrushy:

I particularly recall one meeting in which cooperating witness Nick Bailey was persuaded to recall something that he claimed he did not actually recollect. The matter concerned a meeting between Governor Siegelman and Richard Scrushy, a check and supposed conversation, which eventually led to the convictions in The Big Case. Mr. Bailey repeatedly said he did not know and he was not sure. The prosecutors coaxed and pressured Mr. Bailey to “remember” their version of alleged events. Mr. Bailey appeared apprehensive and hesitant to disappoint the prosecutors.

After reading Grimes’ stunning letter to Holder, we are left with numerous questions, but these two jump out at us:

How could convictions possibly stand when the key witness clearly was coaxed into making statements regarding events that he did not actually recall?

Tamarah Grimes was fired eight days after writing this letter to Eric Holder. But the U.S. attorney general, our nation’s chief law-enforcement officer, apparently has done nothing about it. Why is Holder sitting on his hands when a DOJ whistleblower, who went right to the top with her concerns about prosecutorial misconduct, has clearly faced retaliation for speaking out? Does anyone in the Obama administration have a spine when it comes to matters of justice? Will anyone ever take steps to clean up the cesspool in Montgomery, Alabama?

Why has the Obama administration allowed Leura Canary to remain on the job?And here’s a really interesting question. Alabama’s two Republican U.S. senators, Jeff Sessions and Richard Shelby, have objected to two highly-regarded nominees for the Middle District position–Michel Nicrosi and Joseph Van Heest. Why do Sessions and Shelby object so strongly to these nominees? Is it possible that a real federal prosecutor in Montgomery, Alabama, might unearth some unsavory activities related to Sessions and Shelby themselves? Why is Obama allowing Sessions and Shelby to hold the Middle District of Alabama hostage?

As John McCain once said, “Elections have consequences.” Well, Obama was elected president, and he should not allow Sessions and Shelby to hold up the appointment of a new federal prosecutor in Montgomery. He should nominate Nicrosi or Van Heest and move forward, kicking Leura Canary unceremoniously to the curb–where she belongs.

Roger Shuler, a regular contributor to The Public Record, resides in Birmingham, Alabama. A 1978 graduate of the University of Missouri, Shuler worked 11 years as a reporter and editor for the Birmingham Post-Herald before working 19 years in several editorial positions at the University of Alabama at Birmingham (UAB). He blogs at Legal Schnauzer.