Source: http://dc.findacase.com/research/wfrmDocViewer.aspx/xq/fac.19980618_0000108.DDC.htm/qx
Timestamp: 2017-04-28 10:21:48
Document Index: 514202068

Matched Legal Cases: ['§ 592', '§ 592', '§ 371', '§ 1505', '§ 1505', '§ 1001', '§ 5313', '§ 5324', '§ 1001', '§ 1505', '§ 1001', '§ 1001']

MEMORANDUM OPINION This matter comes before the Court on: (1) Defendants Henry G. Cisneros, Linda D. Medlar,
Sylvia Arce-Garcia, and John Rosales' motions for severance; (2) Defendant Cisneros' motion for severance of counts 19-21 of the indictment; (3) Defendant Cisneros' motion to dismiss the indictment for lack of prosecutorial authority; (4) Defendant Cisneros' motion to disqualify certain United States counsel because they are fact witnesses; and (5) Defendant Cisneros' motion for discovery. I. FACTUAL BACKGROUND On December 11, 1997, a grand jury returned a twenty-one count Indictment against Defendants Henry G. Cisneros, Linda D. Medlar, Sylvia Arce-Garcia, and John D. Rosales alleging that the Defendants engaged in a conspiracy to withhold information from, and make false statements to, various governmental entities in an effort to ensure that Cisneros would be nominated and confirmed as the Secretary of Housing and Urban Development ("HUD"). Cisneros is the former Secretary of Housing and Urban Development ("HUD"), who served from January 1993 to January 1997. Medlar is a former campaign fundraiser for Cisneros who allegedly engaged in an extramarital affair with Cisneros and then allegedly blackmailed him in order to keep the details of the affair secret. Arce-Garcia and Rosales are both former employees of Cisneros Communications in San Antonio, Texas, who later became personal assistants to Cisneros during his tenure at HUD. The alleged false statements and acts of concealment relate primarily to payments Cisneros allegedly made to Medlar between 1989 and January 1994. To support the charges brought against the Defendants, the Indictment alleges the following facts: From May 1981 to May 1989, Cisneros served as the Mayor of San Antonio. During that period, he met Linda Medlar, who began working for him as a fundraiser. In March 1987, Cisneros and Medlar, both of whom were married to others, became romantically involved. Beginning in 1989 and continuing through January 1994, Cisneros made numerous payments to Medlar, ranging from approximately $ 2,500 to $ 15,000. The total amount of the payments exceeded $ 250,000. The payments were made in cash, by wire transfer, and by direct deposits into Medlar's bank accounts. On December 17, 1992, President-elect Clinton publicly announced his intention to nominate Cisneros as the Secretary of the United States Department of Housing and Urban Development ("HUD"). Because Cisneros was a potential nominee, the FBI began an investigation of Cisneros pursuant to the Memorandum of Understanding ("MOU") between the FBI and the Clinton-Gore Transition Team. The Clinton-Gore Transition Team screened high-ranking potential nominees of the President-elect in order to ensure that they were suitable to serve in the Clinton Administration. Under the MOU, the FBI was to conduct background investigations of the Clinton Administration's potential nominees at the request of the President-elect. Cisneros allegedly paid Medlar before, during, and after he was nominated and confirmed as Secretary of HUD (from late summer 1992 to early 1994) in order to ensure her public silence about the extramarital affair and his previous payments to her. Cisneros directed Arce-Garcia and Rosales to conceal information from the FBI, the DOJ Security Office, and the United States Senate about his relationship with, and payments to, Medlar. In return, Cisneros promised Arce-Garcia and Rosales jobs on his staff at HUD. On December 7, 1992, Cisneros completed and executed a Questionnaire for Sensitive Positions for National Security, commonly referred to as a Standard Form 86 ("SF-86"). On December 14, 1992, Cisneros executed a supplement to the SF-86. On Question 10S of the supplement, which asked whether there was anything in his personal life that could be used by someone to coerce or blackmail him, Cisneros answered that there was no basis upon which he be subject to coercion or blackmail. On December 30, 1992, a special agent of the FBI interviewed Cisneros in Washington, D.C. as part of the FBI background investigation of him. Cisneros stated that the SF-86 and the supplement were accurate and correct. He declared to the agent that he was unaware of anything that could be used to coerce or compromise him if he were to be nominated and confirmed as Secretary of HUD. According to the Indictment, Cisneros concealed from the FBI the following facts: that Medlar had threatened to go public about their relationship and about his payments to her; that he was, in fact, making payments to Medlar; and that despite making payments to Medlar substantially in excess of $ 10,000 per year since 1990, he had not filed informational Gift Tax Returns with the IRS. On January 7, 1993, special agents of the FBI again interviewed Cisneros in Washington, D.C. because it came to the FBI's attention that Cisneros may have made payments to Medlar. When confronted with this information, Cisneros explained that the payments made to Medlar were not "hush money" payments and that he was no longer making any payments to Medlar. He stated that the highest single payment he made to Medlar was approximately $ 2,500; that the total payments he made to Medlar never exceeded $ 10,000 per year; that Medlar had never blackmailed him; and that he had not engaged in any substantial discussions with Medlar since early 1991. He failed to disclose that he had directed Arce-Garcia and Rosales to conceal information regarding his relationship with and payments to Medlar. On January 13, 1993, Cisneros was formally appointed and confirmed as Secretary of HUD. As Secretary, Cisneros was the senior official in charge of the Department of Housing and Urban Development, a member of President Clinton's Cabinet, and twelfth in line to succeed the President of the United States, should it ever have become necessary. On July 29, 1994, Medlar filed a lawsuit against Cisneros in Lubbock County, Texas, seeking damages for breach of contract and fraud, allegedly arising from his promise to support her financially. That same day, Cisneros issued a press release acknowledging that he had once been romantically involved with Medlar and that he had assisted her financially for several years. On September 12, 1994, Medlar appeared on a broadcast of the television program Inside Edition. During the program, Medlar asserted, among other things, that Cisneros had lied to the FBI during the course of its background investigation about the payments that he had made to her. On air, Medlar produced a deposit slip of a payment made by Cisneros to her in the amount of $ 4,500, an amount larger than the $ 2,500 figure that Cisneros had told the FBI was the largest single payment he had ever made to her. Inside Edition also broadcasted excerpts from conversations between Cisneros and Medlar that she had secretly recorded. In September, 1994, as a result of the allegations made by Medlar on Inside Edition, United States Attorney General Janet Reno, as authorized by the Independent Counsel Reauthorization Act of 1994, 28 U.S.C. § 592, et seq. (1998), began an inquiry into whether Cisneros had lied to the FBI. As directed by Reno, special agents of the FBI interviewed Medlar in Lubbock, Texas on September 28 and 29, 1994. The Indictment alleges that during these interviews, Medlar claimed to be turning over to the FBI the original cassette tapes of her conversations with Cisneros and others. The tapes she provided, however, were not the originals. In September 1994, the Internal Revenue Service ("IRS") also initiated an investigation of Cisneros because of the size of the payments he made to Medlar. On October 14, 1994, the Department of Justice ("DOJ") began a preliminary investigation, which concluded on March 13, 1995. That day, Attorney General Reno filed an application under 28 U.S.C. § 592(c)(1) (1998) to a Special Division of the United States Court of Appeals for the District of Columbia Circuit for the appointment of an Independent Counsel to investigate, and, if appropriate, to prosecute allegations concerning, among other things, Cisneros' alleged false statements to the FBI regarding the payments he made to Medlar. On May 24, 1995, the Special Division appointed David M. Barrett as Independent Counsel. On October 31, 1995, a federal grand jury began investigating whether Cisneros committed violations of federal criminal law by making, or conspiring with others to make, false statements to the FBI during the course of its background investigation of him. On November 27 and 28, 1995, Medlar entered into an immunity agreement with the Office of the Independent Counsel. Under the terms of the agreement, Medlar agreed to waive her Fifth Amendment constitutional right against self-incrimination; to provide truthful, full, and complete information to the Independent Counsel and to law enforcement personnel, including the FBI; to answer truthfully and completely all questions concerning the subject matter of the Independent Counsel's investigation; and not to attempt to protect or implicate anyone through false information or omissions. During an interview in the District of Columbia, Medlar violated the terms of this agreement by falsely advising special agents of the FBI that she provided the original tapes of her conversations with Cisneros and others to the IRS on May 31, 1995. On December 11, 1997, the grand jury returned a twenty-one count Indictment against Defendants Cisneros, Medlar, Arce-Garcia, and Rosales. Count 1 of the Indictment charges all four Defendants with conspiracy to defraud the United States and conspiracy to commit offenses against the United States in violation of 18 U.S.C. § 371 (1998). From the summer of 1992 through on or about September 12, 1994, Count 1 alleges that all four Defendants conspired to defraud the United States by impeding the lawful government functions of: (a) the United States Senate in its confirmation process; (b) the FBI in conducting its background check; and (c) the Department of Justice ("DOJ") personnel security office in screening Cisneros for a national security clearance and in vetting him for a cabinet position in President Clinton's administration. Count 1 of the Indictment further alleges that all four Defendants conspired to commit offenses against the United States by obstructing inquiries of the United States Congress in violation of 18 U.S.C. § 1505 (1998); obstructing the proceeding conducted by the DOJ in violation of 18 U.S.C. § 1505 (1998); making false statements and concealing material information from government agencies in violation of 18 U.S.C. § 1001 (1998); and structuring and assisting transactions with a financial institution to evade the financial reporting requirements of 31 U.S.C. § 5313(a) in violation of 31 U.S.C. § 5324 (1998). Counts 2, 3, 4, 5, 10, 11, 12, 14, 15, and 16 allege that Defendant Cisneros made various false, fictitious, and fraudulent statements and representations in violation of 18 U.S.C. § 1001 (1998). Counts 6, 7, 8, 9, 13, and 17 allege that Defendant Cisneros engaged in various attempts to conceal and cover up material facts relating to his payments to Defendant Medlar. Count 18 alleges that Defendant Cisneros engaged in obstruction of justice in violation of 18 U.S.C. § 1505 (1998). Counts 19 and 20 allege that Defendant Rosales made false, fictitious, and fraudulent statements and representations regarding his knowledge of Defendant Cisneros' payments to Defendant Medlar in violation of 18 U.S.C. § 1001 (1998). Finally, Count 21 alleges that Defendant Medlar made false, fictitious, and fraudulent statements and representations in violation of 18 U.S.C. § 1001 (1998) by stating in an FBI interview that she provided the IRS with original tapes of her recorded conversations with Cisneros when, in fact, the tapes were copies. II. ANALYSIS AND DECISION A. Severance Defendants Cisneros, Medlar, Arce-Garcia, and Rosales move this Court to sever their joint trial under Fed. R. Crim. P. 14. Each Defendant requests a separate trial. At the hearing held on June 8, 1998, the Government joined in the motion to sever Medlar from Cisneros. Since it has now been agreed to ...