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History > 2006 > USA > Federal justice (I)

 

 

 

Jack Abramoff

David Burnett        NYT        April 28, 2005

  A Lobbyist in Full        NYT        1.5.2005
http://www.nytimes.com/2005/05/01/magazine/01ABRAMOFF.html

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Overview

Tough Justice for Executives in Enron Era

 

May 27, 2006
The New York Times
By KURT EICHENWALD and ALEXEI BARRIONUEVO

 

There was a time in the not-too-distant past when white-collar criminal prosecutions were delicate affairs, where prosecutors worked hard not to treat wealthy and powerful defendants as anything as distasteful as, well, criminals.

No more.

The tactics and strategies used in the successful prosecution of the former Enron chief executives, Jeffrey K. Skilling and Kenneth L. Lay, highlight the transformation that has occurred in recent years in the investigation and prosecution of white-collar crime, a change that has brought many of the techniques applied to drug cases and mob prosecutions into the once-genteel legal world of corporate wrongdoers.

No longer are defendants allowed to surrender themselves quietly, outside the view of the press. Now, as Mr. Skilling and Mr. Lay learned firsthand, there are "perp walks" where the handcuffed defendant is brought in by law enforcement for booking. Cases are not resolved with a fine or a short stay in a "country club" prison; now defendants face decades of real jail time, sentences that can preclude them from being considered for minimum-security prisons.

Witnesses are squeezed, with threats against family members and stints in solitary confinement. Those who fail to cooperate are indicted, or deemed unindicted co-conspirators, a designation that places potential witnesses in a state of indefinite legal limbo. And companies that want to settle a criminal case can often do so only by taking the once unusual step of waiving their right to protect the confidentiality of their communications with their lawyers.

"Our prosecutors will use the tools legally available to us to solve these crimes and bring the perpetrators to justice," said Bryan Sierra, a Justice Department spokesman.

Legal experts yesterday heralded such aggressive approaches as crucial to the government's securing convictions of Mr. Lay and Mr. Skilling. "Prosecutors in white-collar cases are looking at the range of legal tactics that are available to them that they have used for years in other kinds of cases, and they are not just ruling out those tactics because it is a white-collar case," said Christopher Wray, the former head of the Justice Department's criminal division and now head of the government investigations practice at the law firm of King & Spalding.

The expressions of approval, however, were accompanied by concern about whether such tactics can go too far.

"It is hard to take issue with the means they have used to achieve their success, in light of the outcome yesterday," said Robert A. Mintz, a former federal prosecutor who is now a white-collar criminal defense attorney with McCarter & English. "But there are people that feel that the government has built many of these cases with a sledgehammer, pounding potential defendants into cooperating as a means to achieve their ends — in this case the conviction of Lay and Skilling."

But if a sledgehammer is used in the investigation and preparation for trial, prosecutors now wield a scalpel in discerning whether a corporate executive can be deemed to have violated the law.

As the case against Mr. Lay and Mr. Skilling showed, the laws for corporate conduct are being interpreted strictly, requiring honesty in all actions and statements to avoid prosecution. Failure to be forthright, even in subtle ways, can result in a criminal trial. The convictions could set a precedent that haunts other executives. In the past, some of the charges, particularly those against Mr. Lay, might not have survived in a civil trial. Today, subtle dishonesties can be part of a broader effort to construct a huge — and successful — criminal case.

In the Enron case, defense lawyers tried to portray the use of the government's hardball tactics as reason to disbelieve witnesses that pleaded guilty and agreed to testify against their bosses, Mr. Skilling and Mr. Lay.

When the former chief financial officer of Enron, Andrew S. Fastow, balked at cutting a deal with the government, prosecutors started putting pressure on his wife, Lea. She eventually pleaded guilty to income tax evasion for not reporting tens of thousands of dollars in kickback checks from one of Mr. Fastow's off-the-books schemes. Ms. Fastow went to prison for a year.

Defense lawyers also elicited testimony that the government may have "hot boxed" Ben F. Glisan Jr., the former treasurer of Enron, after he pleaded guilty to fraud and agreed to a five-year prison sentence. Mr. Glisan was put in solitary confinement for the first 11 days of his sentence and was later moved into a low-security facility for about six months, where he shared a cell with two other inmates. He said he feared for his physical safety.

Later, Mr. Glisan agreed to testify before the grand jury and was granted a series of furloughs, or time away from prison, by the government. Then, in February 2004, he was brought into the federal courthouse in shackles. He was led onto an elevator. There was Mr. Skilling, in handcuffs; he had been arrested and was entering a plea of not guilty to 35 criminal charges.

A prosecutor, Kathryn H. Ruemmler, later tried to portray Mr. Glisan's treatment in the prison system as out of her hands, suggesting that the Bureau of Prisons made decisions completely independently of the Justice Department.

Mr. Glisan said he did not necessarily buy that, especially when it came to his remarkably coincidental run-in with Mr. Skilling on the elevator.

"Did you believe for one second, sir, that that was a coincidence?" Daniel Petrocelli, Mr. Skilling's lead lawyer, asked Mr. Glisan on the stand.

"I didn't believe that, no" Mr. Glisan said.

Other, more subtle tactics were used that some outside defense lawyers were surprised to see applied. For example, the government agreed to cut some deals with cooperating witnesses that left them with substantial sums of money. Mark Koenig, the former director of investor relations, for example, said he was left with $5 million, which acted almost like an upfront bonus for his continued cooperation, legal experts said.

Federal prosecutors have been accused of trying to gain cooperation from companies by suggesting that the government would allow a company to stay in business if it sacrifices certain executives or pushes them to fire certain lawyers.

The tactic is an issue in the prosecution of accounting firm KPMG, where the government told the firm that, if it continued to pay for outside lawyers for its executives, the government would look on that as an "act of treason or noncooperation," said Joel Androphy, a criminal defense lawyer in Houston. "This has been an effective but controversial tool."

The waiver of so-called attorney-client privilege was one of the government's conditions for deferment of criminal charges it was planning to bring against the class-action law firm Milberg Weiss. When the firm refused to go along this month, an indictment was issued.

The neutralizing of certain crucial witnesses by the government's use of a threat of prosecution has prevented defense lawyers from pursuing more corroboration for accused top executives. It was an issue in both the WorldCom case involving the chief executive Bernard J. Ebbers and in the Enron case, where several executives said they would plead the Fifth Amendment if called to the stand.

Prosecutors have even begun using hidden microphones— a tactic more common in political corruption cases — to try to gather evidence against corporate executives. In the case of Richard M. Scrushy, the former chief executive of HealthSouth, investigators wired a former chief financial officer's necktie to covertly record conversations with his boss. It did not ultimately work: Mr. Scrushy was acquitted last year of all fraud and conspiracy charges.

Some criminal lawyers bristle at the new tactics. "They're despicable," said Jamie Wareham, the chairman of the global litigation practice at Paul, Hastings, Janofsky & Walker. "The government doesn't need to do many of these things. In most cases, they are over-egging on a victory they are going to get anyway."

However the tactics are viewed, they are working much of the time. In the Enron case, jurors said they rejected strident defense arguments that the government had coerced witnesses into pleading guilty to crimes they did not commit and had coached them to accuse Mr. Skilling and Mr. Lay of crimes. "I didn't think they seemed rehearsed," a juror, Donald Martin, an electrical designer, said yesterday in an interview. The government "had the documentation to back up what they were saying."

Kyle Whitmire contributed reporting for this article.

    Tough Justice for Executives in Enron Era, NYT, 27.5.2006, http://www.nytimes.com/2006/05/27/business/businessspecial3/27enron.html?hp&ex=1148788800&en=dffbd1221a4ce0ad&ei=5094&partner=homepage

 

 

 

 

 

News Analysis

Executives' Downfall: The 'Managing' of Numbers Turned Into Manipulating Them

 

May 27, 2006
The New York Times
By FLOYD NORRIS

 

For corporate America, the most important fact about the Enron verdict returned by a Houston jury on Thursday may be that Kenneth L. Lay and Jeffrey K. Skilling were convicted even though they were not charged with being the masterminds of the Enron fraud.

Instead, several counts of the case were based on charges that the two men misled employees and investors in comments they made during the final months of Enron's existence. Those comments made the company's earnings and financial situation seem better than it was, or left out negative news that the prosecution deemed material.

For example, one count against Mr. Skilling was based on what the prosecution saw as a direction to underlings to find a way to beat Wall Street estimates for quarterly earnings.

"Abracadabra, just like that. A penny to meet the consensus estimates," said Kathryn H. Ruemmler, a prosecutor, in closing arguments. "That's fraud. It's wrong."

Many companies do their best to meet earnings estimates, and it is far from unusual for managements to change estimates in ways that make the company look good. The defense argued that estimates were within reasonable ranges, and so were legal. The jury agreed with the prosecution.

"The question here," said David S. Ruder, a law professor at Northwestern University and a former chairman of the Securities and Exchange Commission, "is what level of earnings management will cause the government, either the S.E.C. or the Justice Department, to bring action. There is a danger for management that if they step over the line, they may be prosecuted."

Another count dealt with the way Enron reported performance of various sectors of the company. The prosecution said the company shifted one line of business from one sector to another to hide a loss. Under accounting rules, the company had every right to change its sector breakdown, so long as that was the way top executives measured its business, as a defense expert testified. The prosecution did not contend that accounting rules were violated. Instead, it told the jury that Enron owed it to investors to explain why it was making the change.

"They didn't disclose these problems to the marketplace, and the investor didn't know and didn't understand what was going on," Sean M. Berkowitz, another prosecutor, told the jury. "It is a crime to omit material information about your business, and that's what happened, ladies and gentlemen."

The prosecution argued that even things that were not part of formal S.E.C. filings could be part of a fraud. Enron had long used something it called "total contract value" to measure the success of a part of its business, known as Enron Energy Services, or E.E.S.

That measure was subject to abuse, as it depended on easily manipulated estimates about the future, but that was not what bothered the prosecution. It was that Mr. Lay stopped using that yardstick, or "metric" in business jargon, when it became clear that the goal for it would not be met.

"He tells people that the metric has been abandoned, not because they were going to miss, but because it's no longer relevant," Ms. Ruemmler told the jury, referring to a conference call with analysts on Oct. 16, 2001. "And in fact, he then says, in answer to a specific question, 'We would have hit our numbers in E.E.S. on every metric.' That was just a flat lie."

She went on to explain to the jury: "The point of this is that this is all just smoke and mirrors. They can make the numbers say whatever they want to say."

There was no charge that accounting rules were violated in that statement. "Total contract value" is not a term used in generally accepted accounting principles. The argument of the prosecution, which the jury accepted, was that simply misleading investors was a crime.

Many other companies use the numbers to make themselves look as good as possible, and they have been known to change the preferred measurement in what they sometimes call pro forma earnings, much as a baseball player seeking a raise may point to home runs one year and to batting average the next, depending on how he did.

Of course, the baseball team management knows all the statistics, so no one is misled. But in business, investors cannot know everything about a company and depend on the measurements corporations are forced to use — by accounting rules — or choose to use.

In essence, the prosecutors were bringing back the word "fairly," which appears in every annual report. As Arthur Andersen certified in Enron's final annual report, the company's financial statements "present fairly, in all material respects" the company's financial condition.

In 1970, the United States Court of Appeals for the Second Circuit held that an auditing firm violated the law if it certified financial statements that conformed with accounting rules but did not provide a fair picture. It is a decision that companies have long disliked.

Enron's financial statements did not conform to the rules. But the convictions of Mr. Lay and Mr. Skilling were based in part on determinations that they failed to give a fair picture, even when they did not violate the rules. That is a precedent that could come back to haunt other executives.

    Executives' Downfall: The 'Managing' of Numbers Turned Into Manipulating Them, NYT, 27.5.2006, http://www.nytimes.com/2006/05/27/business/businessspecial3/27fair.html?_r=1&oref=slogin

 

 

 

 

 

The Decision

Jurors Bonded as a Family From the Start of the Trial

 

May 27, 2006
The New York Times
By KYLE WHITMIRE

 

HOUSTON, May 26 — When Deborah Smith was called to jury duty, she tried to get out of it. Her father in Alabama had just died, she told Federal District Judge Simeon T. Lake III, and a trial might prevent her from revisiting her childhood home to settle his estate.

The judge did not buy it. Sure, the trial of former Enron chiefs Kenneth L. Lay and Jeffrey K. Skilling on fraud and conspiracy charges would last for many weeks, he told the potential jurors, but Fridays would be a day off. That would give Ms. Smith time to tend to family matters, he told her.

Five months later her fellow jurors chose her to be their forewoman. "Whenever we hit a wall, she would move us through it," Donald Martin, a fellow juror, said in an interview Friday, roughly 24 hours after the trial ended with both men convicted of most of the charges against them.

Described by the other jurors as a strong woman with a guiding voice, Ms. Smith, 54, works in human resources at Schlumberger, the worldwide oil field services company. In her home of Sugar Land, a suburb of Houston, she is the mother of two grown sons and a volunteer at the citizens' police academy. Her interpersonal skills, jurors said, were crucial.

"I told them that we had to make fair judgments based on fact," Ms. Smith said in a telephone interview Friday. "I did not want one juror who had the tiniest amount of doubt that might grow and haunt them years from now."

Ms. Smith said she was proud of the way that the jury conducted itself and bristled at some assertions from commentators that the eight women and four men on the panel came to a decision too quickly.

"I will protect my jurors," she said. "The system guarantees the defendants a trial by a jury of their peers, not a panel of legal experts."

Mr. Martin, an electrical designer, described the jury deliberations as resembling a family discussion around a dinner table, with Ms. Smith as a sort of gentle matriarch.

"We got frustrated at times," he said, "but nobody got mad or yelled or anything like that."

But like many families, this one still has its secrets. Some jurors have given hints of what went on behind closed doors, though.

Douglas Baggett said on Thursday that the first jury discussions were about how each of them felt about the case and the defendants. That discussion, Dana Fernandez said, began with an awkward pause, which Ms. Smith eventually broke.

"In the back of our minds, we know what the Lay and Skilling families are going through," Ms. Smith said. "But that was not what we were there to decide. We were there to look at the evidence."

Indeed, during the deliberations, jurors said, they frequently referred to the documents presented in the case. Even more than the testimony from former Enron employees, those thousands of exhibits in large binders were the supporting structure of the government's case, they said.

As the pace of the deliberations began to quicken, one juror suffered a family crisis. Ms. Fernandez learned Wednesday morning that her grandmother had died the night before, but she was not even sure whether she should tell her colleagues. On her way to the courthouse that morning, she tried to deal with her emotions before returning to the jury room.

But as soon as she arrived at the jury room, others already there immediately realized that something was wrong.

"I walked into the jury room and one of the jurors looked at me," Ms. Fernandez said. "And, because I'm always smiling, she said, 'Are you O.K.?' "

Ms. Fernandez shook her head, no, and began to cry.

"I was trying not to go in there that way," she said.

As more jurors entered the room and learned the news, many asked her why she was still there. She said she had spoken with her father, who told her she had a job to do.

"I got my little crying spell out before we went into deliberations," she said. "I had to clear my head and get my thoughts on my job."

While the jury delivered its verdict, Ms. Fernandez's family buried her grandmother.

The jurors bonded into a surrogate family, gaining support from each other in an experience that some say they will never forget. But it was a trial in more ways than one. Because they were supposed to avoid all outside influences, Mr. Baggett said that it was his wife's job to cut out the Enron articles from the newspaper before giving it to him.

"When she was done," he said, "there was almost nothing left."

After months of not talking to anyone about the case, the jurors can now discuss it.

"Everyone wants to know something about it," Mr. Martin said. "It's important, I guess. It feels good to talk through it."

Several jurors ate lunch together after the verdict. There, they said their goodbyes and promised to keep in touch.

"High school graduates tell everyone that they are going to stay in touch," Ms. Smith said. "And sometimes I tell my brothers and sisters that, too, but I still have to remind myself to call them."

    Jurors Bonded as a Family From the Start of the Trial, NYT, 27.5.2006, http://www.nytimes.com/2006/05/27/business/businessspecial3/27jury.html

 

 

 

 

 

The Decision

Ignorance Claim Did Not Sway Enron Jury

 

May 26, 2006
The New York Times
By VIKAS BAJAJ and KYLE WHITMIRE

 

HOUSTON, May 25 — One after another, the jurors spoke and, in different voices, it all added up to the same thing.

They simply could not believe, the eight women and four men of the jury explained in an extraordinary joint news conference after rendering their verdict, that Kenneth L. Lay and Jeffrey K. Skilling were telling the truth when they claimed they didn't realize that something was rotten at Enron.

How, they repeatedly wondered, could Enron's former chief executives not have known what was going on?

The jurors said they found the testimony by Mr. Lay and Mr. Skilling in their own defense — which many legal experts had warned could prove to be their undoing — both revealing and damning.

Freddy Delgado, an elementary-school principal, questioned how the two men could testify that they "had their hands firmly on the wheel" at Enron and then say that they did not know about the improper accounting and the intensifying financial problems?

After all, parents hold him accountable for their children's welfare and safety. "I can't say that I don't know what my teachers were doing in the classroom," Mr. Delgado said. "I am still responsible if a child gets lost."

"So I would say that to say that you didn't know what was going on in your own company," Mr. Delgado added, "was not the right thing."

After sitting through a 16-week trial and listening to 56 witnesses, the jurors finally had a chance to speak. And gathering together in a sixth-floor room at the federal courthouse here, several blocks from Enron's former headquarters, that's exactly what they did.

In other high-profile cases, many jurors quickly dispersed to avoid reporters. But all of the Enron jurors, including the three alternates, attended the hourlong session. Facing dozens of reporters and TV cameramen, they calmly and patiently answered questions, appearing unburdened and frequently cracking jokes. If they had any doubt or hesitation about the verdict they had reached in the biggest corporate corruption case in recent American history, they didn't show it.

The jury included people of widely different backgrounds — a dairy farmer, payroll manager, two engineers, a ship inspector, county court clerk, personnel manager, retired sales assistant and dental hygienist — but they drew on their own life experiences, making clear that they thought of themselves as responsible for knowing everything about their jobs. Certainly, richly paid corporate executives should, too?

They respected Mr. Lay's charitable, civic and political standing in Houston and Washington, they said, but ultimately concluded that he put his own financial welfare ahead of his duties to shareholders and employees.

As for Mr. Skilling, jurors said they found his professed memory lapses and unfamiliarity with certain details incredible for someone who prided himself on having command over every area of Enron's operations.

"It is hard to believe," said Deborah Smith, the jury forewoman, "that someone, such a hands-on individual, could not possibly know the things that were going on within the company."

When the verdict was announced, Mr. Lay tried to console his sobbing wife while Mr. Skilling looked expressionless at the judge, turning briefly to search the faces of the audience.

But Nancy Thomas, who is retired and whose police officer husband is recovering from a stroke, shed a few tears as the verdict was read. Later, she said: "This is an emotional thing, there are too many people involved in it. There are human beings; there are families."

Before the trial, defense lawyers doubted they could ever find an untainted jury in Houston. Federal District Judge Simeon T. Lake III chose the jury in one day after the jurors filled out 14-page questionnaires. Some jurors expressed doubt about the innocence of Mr. Skilling and Mr. Lay, yet were allowed on the panel.

Mr. Lay and Mr. Skilling were "greedy people" and that's what helped cause Enron's demise, Ms. Smith wrote on her jury questionnaire.

Jill Ford, another juror who made the panel, wrote: "I think they probably knew they were breaking the law."

Throughout the trial, the jurors showed a remarkable solidarity. On Valentine's Day, most of them wore red; during Mardi Gras they came to court donning colorful beads.

But throughout, as Judge Lake proudly told them on Thursday, they did not show up late a single day in the 56-day trial. One woman, an alternate who called in sick, was immediately booted from the jury by the judge.

For the jurors, the four months were an extraordinary period of personal sacrifice. Mr. Delgado said he struggled to keep his focus on school matters with only one day a week — Fridays — to be at school when the case was not in session.

"We've cried together, we've laughed together and we really, really became more than just friends," he said. "I believe that we are a family and we supported each other with all the different things that happened in our lives within these four months."

The jurors took two days to organize themselves, but by the third day of deliberations they began working through the counts one by one, according to Douglas Baggett, an administrator for a corporate legal department, who described the mood in the jury room in an interview at his home.

"After not being able to discuss the trial this whole time, the biggest thing we did in deliberations was to talk about how everybody felt," he said. "There were differing opinions."

The jurors said that they found it appalling that Mr. Lay had mismanaged his own finances and was selling his own Enron shares even as he assured employees and shareholders that the company was fiscally sound.

"I thought that was a disgrace," Donald Martin, an electrical designer, said.

A moment later Mr. Delgado echoed that thought. "That was very much the character of the person that he was. He cashed out before the employees did."

For Mr. Lay the decision came as a heavy blow that he went out of his way to prepare himself for. Just before the jury returned to the courtroom, Mr. Lay told his lead lawyer, Michael Ramsey, that he would like to sit with his wife in the first bench of the visitors section.

"It's just never been done before," Mr. Ramsey told him.

"Why not?" Mr. Lay responded. "It's just as much her life as it is mine."

To Wendy Vaughan, Mr. Lay "very much wanted to be in control when he spoke."

"He kind of commanded the room, I thought," Ms. Vaughan, who owns a gym and a roofing business, added. "He answered questions. He just seemed very focused, a little bit of a chip on his shoulder."

Some added that they would have still found the men guilty had they not taken the stand, though they would have been disappointed. "I would have always had questions if they had not taken the stand," said Kathy Harrison, an elementary-school teacher.

Judge Lake commended and thanked the jurors for sitting through often obtuse and conflicting testimony. During the trial, they were shown thousands of pages of corporate documents and spreadsheets; they took 27 boxes worth of evidence with them into the jury room where they deliberated.

One juror contrasted their determination with Mr. Lay's and Mr. Skilling's approach to their top positions at Enron.

"Those of us that have full-time jobs, we did our jobs at night when we went home so tired we hardly knew who we were," said Carolyn Kuchera, a payroll manager. "We were responsible, we were always accountable and we always found a way to circle back around to tie up the loose ends."

"And I think those employees," she said about Enron workers, "were entitled to the same thing."

The jurors said they had become like a family and planned to drive in different directions at the end of the news conference and meet at an undisclosed location to celebrate the end of the trial.

Mr. Baggett said he and his wife planned to go out of town on Friday to celebrate their anniversary.

When asked what they had learned, several said they better understood corporations and the legal system.

Mr. Delgado, the principal, said he realized that "if I ever had to be defended, I would go with Mr. Petrocelli," he said, referring to Daniel Petrocelli, the well-regarded Los Angeles-based lawyer who defended Mr. Skilling. "If I had the money."

The jurors said they vacillated during the trial as prosecutors and defense lawyers offered competing explanations of the events going on at the company.

"Through 16 weeks of testimony, I would go home one night swayed in one direction," Mr. Baggett said. "The next day, when cross or direct began, it would go the other direction. And I think we all felt that — you felt like a Ping-Pong ball."

There did not appear to have been one inflection point when the jury became convinced of the defendants' guilt. Rather, they gradually made up their minds as they went over the voluminous evidence and the testimony by former Enron officials like Ben F. Glisan, a company treasurer who pleaded guilty and has already served the bulk of a five-year sentence. He was granted immunity from further prosecution to testify.

"I don't think I had made up my mind one way or the other until we entered into deliberations, and it all came together," Mr. Delgado said.

The jurors said they had at least some concern about the credibility of virtually every witness who took the stand, but decided that the sum total of the testimony and the evidence was enough to convict Mr. Lay and Mr. Skilling.

"We turned to the evidence," said Ms. Smith, a human resources manager. "We put our own timeline in place and we thrashed it out."

Ms. Vaughan, the entrepreneur, said she wanted to believe the defendants but in the end could not square their version of events with the evidence and the testimony of other Enron executives.

"Early during the trial, I had an admiration for both men — just what they had accomplished in their careers," she said. "And it was sad to see that in the end it wasn't accomplished in a respectful manner, having to hurt so many people to get there."

Maureen Balleza and Alexei Barrionuevo contributed reporting for this article.

    Ignorance Claim Did Not Sway Enron Jury, NYT, 26.5.2006, http://www.nytimes.com/2006/05/26/business/businessspecial3/26jury.html?hp&ex=1148702400&en=f9f7a276c89ed548&ei=5094&partner=homepage

 

 

 

 

 

Two Enron Chiefs Are Convicted in Fraud and Conspiracy Trial
 

 

May 26, 2006
The New York Times
By ALEXEI BARRIONUEVO

 

HOUSTON, May 25 — Kenneth L. Lay and Jeffrey K. Skilling, the chief executives who guided Enron through its spectacular rise and even more stunning fall, were found guilty Thursday of fraud and conspiracy. They are among the most prominent corporate leaders convicted in the parade of scandals that marked the get-rich-quick excesses and management failures of the 1990's.

The eight women and four men on the jury reached the verdicts after a little more than five days of deliberations. Mr. Skilling was convicted of 18 counts of fraud and conspiracy and one count of insider trading. He was acquitted on nine counts of insider trading. Mr. Lay was found guilty on six counts of fraud and conspiracy and four counts of bank fraud.

The conspiracy and fraud convictions each carry a sentence of 5 to 10 years in prison. The insider trading charge against Mr. Skilling carries a maximum of 10 years.

Both men are expected to appeal. Judge Simeon T. Lake III, the judge in the case, set sentencing for Sept. 11. Until then, the two men are free on bail. If they lose their appeals, Mr. Skilling and Mr. Lay face potential sentences that experts say they believe will keep them in prison for the rest of their lives. Mr. Skilling, who had few family members in attendance, reacted with little emotion as the verdict was read, briefly searching the audience's faces and later striding confidently alone out of the courtroom ahead of his lead lawyer, Daniel Petrocelli.

"Obviously, I'm disappointed," Mr. Skilling said as he left the courthouse, "but that's the way the system works."

Once jurors and the judge cleared out of the courtroom, Mr. Lay's family members huddled around him. Elizabeth Vittor, Mr. Lay's daughter and a lawyer who had worked on his defense team, sobbed uncontrollably. Two local ministers also leaned in and hugged Mr. Lay, whose family members soon formed a circle in the courtroom, with arms over shoulders, and cried together. "I know, I know," Mr. Lay said in a soothing voice to several of them, as they clutched at his suit coat.

After he emerged from court, Mr. Lay said, "I firmly believe I'm innocent of the charges against me."

In televised remarks he said, "We believe that God in fact is in control and indeed he does work all things for good for those who love the Lord."

For a company that once seemed so complex that almost no one could understand how it actually made its money, the cases ended up being simpler than most people envisioned. Mr. Lay, 64, and Mr. Skilling, 52, were found guilty of lying — to investors, employees and regulators — in an effort to disguise the crumbling fortunes of their energy empire.

The 12 jurors and 3 alternates, who all agreed to talk to about 100 reporters at a news conference after the verdict, said they were persuaded — by the volume of evidence the government presented and by Mr. Skilling's and Mr. Lay's own appearances on the stand — that the men had perpetuated a far-reaching fraud by lying to investors and employees about Enron's performance.

The panel rejected the former chief executives' insistence that no fraud occurred at Enron other than that committed by a few underlings who stole millions in secret side deals. And the jurors said they did not believe that negative press and failing market confidence combined to sink the company.

"The jury has spoken and they have sent an unmistakable message to boardrooms across the country that you can't lie to shareholders, you can't put yourself in front of your employees' interests, and no matter how rich and powerful you are you have to play by the rules," Sean M. Berkowitz, the director of the Justice Department Enron Task Force, said outside the courthouse.

For years, Enron's gravity-defying stock price made it a Wall Street darling and an icon of the "New Economy" of the 1990's. But its sudden collapse at the end of 2001 and revelation as little more than a house of cards left Enron, with its crooked E logo, the premier public symbol of corporate ignominy. Investors and employees lost billions when Enron shares became worthless.

Enron's fall had a far greater impact than on just the energy industry by heightening nervousness among average investors about the transparency of American companies. "The Enron case and all the other scandals and cases that trailed after it may have finally punctured that romance with Wall Street that has been true of American culture for a while now," said Steve Fraser, a historian and author of "Every Man a Speculator: A History of Wall Street in American Life."

At Enron, Mr. Skilling was the visionary from the world of management consulting who spearheaded the company's rapid ascent by fastening on new ways to turn commodities, like natural gas and electricity, into lucrative financial instruments.

Mr. Lay, the company's founder, was the public face of Enron. Known for his close ties to President Bush's family, he built Enron into a symbol of civic pride and envy here in its hometown of Houston and throughout the financial world.

The verdicts are a vindication for federal prosecutors, who had produced mixed results from their four-year investigation of wrongdoing at the company. The investigation resulted in 16 guilty pleas by Enron executives, and four convictions of Merrill Lynch bankers in a case involving the bogus sale of Nigerian barges to the Wall Street firm.

Last year, however, the Supreme Court, blaming flawed jury instructions, overturned the obstruction-of-justice verdict that sounded the death knell for the accounting firm Arthur Andersen, Enron's outside auditor. And a jury either acquitted or failed to agree on charges in the fraud trial of former managers of Enron's failed broadband division.

In the 56-day trial, defense lawyers repeatedly criticized prosecutors for bringing criminal charges against Mr. Skilling and Mr. Lay, saying the government had set out to punish the company's top officers regardless of what the facts might be. The lawyers said the government was criminalizing normal business practices and accused prosecutors of pressuring critical witnesses to plead guilty to crimes they did not commit.

The defense lawyers also complained about a lack of access to witnesses who they contended could have corroborated their clients' versions of events. Several jurors said they would have liked to hear from more witnesses, in particular Richard A. Causey, the chief accounting officer, whom neither side called. "To me, he was a missing link," said a juror, Douglas Baggett, an administrative manager for a corporate legal department at Shell.

The Enron trial, more than any other, punctuates the era of corporate corruption defined by the failure of WorldCom, the telecommunications giant whose bankruptcy following revelations of $11 billion in accounting fraud exceeded even Enron's in size; the prosecution of Frank P. Quattrone, the technology industry banker; and scandals at Tyco, Adelphia and HealthSouth.

Mr. Lay was forced to remain in the courthouse for more than three hours after the verdict was announced for a hearing on securing a $5 million bond, which will come from a mix of financial pledges from his children, and to surrender his passport.

Judge Lake will have broad discretion in determining the former executives' sentences.

He is not known for his leniency. Two years ago he sentenced Jamie Olis, a former midlevel executive at Dynegy, an Enron competitor, to 24 years for his role in a scheme to disguise the company's finances. An appeals court last year ordered the judge to revise the sentence. A hearing is set for June 9. The guilty verdicts could have limited impact on a spate of civil cases. "They are not the ones who are going to pay the billions of dollars in additional recoveries that we hope to obtain on top of the $7.2 billion we already have from banks in our previous settlements," said William S. Lerach, the lead lawyer in the largest civil case, set to go to trial in October.

From the beginning, the Enron leaders' trial was not what many people expected after revelations of secret off-the-books schemes that earned a small fortune for Andrew S. Fastow, Enron's former chief financial officer, and his cadre of co-conspirators. Some of those transactions were used by Mr. Fastow without approval by anyone to enrich himself at Enron's expense; others were used to manipulate Enron's financial reports with what Mr. Fastow testified was the full knowledge of his bosses.

Rather than delve into those intricate structures, prosecutors focused on what they cited as the false statements Mr. Skilling and Mr. Lay made to employees and outside investors.

The "lies and choices" theme transformed the case into a test of credibility between the former chief executives and the more than half a dozen witnesses from inside Enron who testified for the government.

During the trial, the government called 25 witnesses and the defense called 31, including Mr. Skilling and Mr. Lay. Government witnesses, including the former Enron treasurer, Ben F. Glisan Jr., testified that the executives had sanctioned or encouraged manipulative accounting practices and then crossed the line from cheerleading into outright misrepresentations of financial performance.

Mr. Fastow's emotional turn on the stand offered some of the most devastating evidence against Mr. Skilling, and to a lesser extent, Mr. Lay. He said he had struck "bear hug" side deals with Mr. Skilling guaranteeing that his off-the-books partnerships, called LJM, would not lose money in their dealings with Enron. Mr. Fastow also described how Mr. Skilling had bought into using the LJM's to bolster earnings.

But Mr. Fastow's own admitted history of extensive crimes at Enron was dissected by Mr. Petrocelli, and jurors said they did not find Mr. Fastow particularly persuasive. "Fastow was Fastow," said a juror, Donald Martin, shaking his head. "We knew where he was coming from."

The jurors said they were moved, in contrast, by the testimony of Mr. Glisan. "We kept on going back to that testimony to corroborate things," said one juror, Freddy Delgado, a school principal.

The surprise testimony of David W. Delainey, the former chief of a retail unit called Energy Services, also helped pave the way for Mr. Skilling's conviction. Mr. Delainey, who pleaded guilty to fraud, said that Mr. Skilling took part in a decision to shift some $200 million in losses from Energy Services to the more profitable wholesale energy division to avoid having to admit to investors that Energy Services was failing.

On the stand, Mr. Skilling offered differing and confusing explanations for the shift. He proved evasive and sometimes forgetful, and he revealed a highly emotional demeanor rarely seen among the stoic class of chief executives.

His resignation in August 2001, after only six months as chief executive, led to a bout of heavy drinking as a depressed Mr. Skilling watched in horror as the company he helped build edged closer to the brink.

For Mr. Lay, a turning point came when Sherron S. Watkins, the former Enron vice president, took the stand to describe how she confronted him with concerns about Enron's accounting. Ms. Watkins suggested that the subsequent investigation Mr. Lay ordered was intentionally limited in scope to conclude that there were no problems.

Other issues plagued Mr. Lay's defense, most notably his own testiness on the stand and the sudden illness of his lead lawyer, Michael W. Ramsey, a well-regarded criminal defense lawyer who was forced to miss more than a month of the trial because of coronary disease that required two operations. Mr. Lay, in part because of his own strained finances, decided to carry on without Mr. Ramsey rather than seek to delay the trial and fight another day.

Vikas Bajaj and Kyle Whitmire contributed reporting for this article.

    Two Enron Chiefs Are Convicted in Fraud and Conspiracy Trial, NYT, 26.5.2006, http://www.nytimes.com/2006/05/26/business/businessspecial3/26enron.html?_r=1&oref=slogin

 

 

 

 

 

A City's Thoughts

A Lingering Resentment and a Desire to Move Beyond Rueful Memories

 

May 26, 2006
The New York Times
By SIMON ROMERO

 

HOUSTON, May 25 — It's finally over.

For nearly five years, this city has been trying to focus on something other than the collapse and messy aftermath of Enron.

So as news of the guilty verdict against Enron's former chief executives raced through the city on Thursday, many Houstonians expressed relief, satisfaction and even joy.

"I feel like justice was served," said Lois Kidd during her lunch break from her job at a pipeline company, adding that she was thrilled with the verdicts.

"The jury saw that Jeff Skilling and Ken Lay lied, cheated and stole and ruined a lot of lives and a wonderful company," Ms. Kidd said. "It was a golden company."

Sherron S. Watkins, the former Enron vice president known for her prescient letter calling attention to shaky deals at the company, said the verdicts brought into sharp relief the lesson about leadership that she has taken away from the episode.

"The verdict sends a message that those who have the privilege of running corporations have a corresponding responsibility," she said in a statement through her lawyer. "The verdict sends a message of accountability."

For others, the day's news was not enough to erase their resentment.

"I'm not about revenge," said Lois Black, a former legal secretary at Azurix, a water concern controlled by Enron. "But we need to think of more creative punishment for these two men, like liquidating their assets and dividing that up among everyone who lost money from Enron, even if it's a dollar."

Still, Ms. Black, 65, said she was trying to move on. After losing her job, she started Tea Parties to Go, a company that organizes parties for girls. Because her retirement savings were largely depleted by Enron's collapse, Ms. Black said she was trying to sell her house and buy a rental property that could provide some retirement income.

Her bad memories of Enron? "You just can't hang on to that stuff," she said.

Houston, the nation's fourth-largest city, is trying to move on, too, even though Enron will continue to generate national headlines with sentencings, appeals and civil lawsuits.

Enron's fall hurt the city in myriad ways, the inevitable fallout from the implosion of what was once the country's seventh-largest corporation, employing more than 4,000 people here at its peak.

Many Houston residents have tried to focus on the future. Occasionally former Enron employees and curious residents peeked into the courtroom during the four-month trial, but many of the seats reserved for the public remained empty.

"Five years ago is a long time for Houston, which is a city that prefers to focus on striding forward," said Stephen L. Klineberg, a professor of sociology at Rice University, describing how Houston's economy grew for 130 years until the bust of the 1980's.

Professor Klineberg said that even the Great Depression largely passed Houston by in the 1930's, without a single bank being forced to close, as if aw-shucks optimism was a cornerstone for success.

"This was an ugly chapter for us, and there was a motivation to get this behind us," he said.

Enron, when it was thriving, was seen as a way to carry the city into a new era, freeing it from the booms and busts that paralleled the price of oil.

That post-oil economy never fully emerged in Houston, however. And now, for better or worse, the city finds its fortunes tied once again to petroleum.

Back in 2001, when Enron was collapsing and Kenneth L. Lay and Jeffrey K. Skilling were carrying out their crimes, oil was just $25 a barrel. But now oil costs more than $70 a barrel, part of a commodity boom that has lifted the fortunes of Houston's energy companies and their employees.

The city's economy has grown for 40 consecutive months, driven not just by rising energy prices, but also by inexpensive real estate and a fast-growing population.

But that sharp jump in the price of oil has hurt others in a diversifying local economy. One of Houston's largest employers, the Methodist Hospital System, said this week that it was distributing 10,000 gift cards, worth $250 each, to employees to help provide relief from rising fuel costs.

There remains an unease here about what will fuel Houston's next boom when this one peters out, particularly as the price of oil has focused the nation's attention on developing alternative energy solutions.

Despite its current prosperity, Houston seems somewhat staid, in sharp contrast to the freewheeling business culture that grew out of Enron in the late 1990's, or the wildcatting days of the 1970's, when Houston solidified its status as a global energy capital.

"Ken Lay had a sickening lifestyle when put in today's context," said Amy Myers Jaffe, associate director of the energy program at Rice. Ms. Jaffe said today's Houston differed from the city of the 1970's, when "everyone felt they could get rich."

"Now we've gone through traumatic events like Hurricane Katrina," Ms. Jaffe added, referring to Houston's efforts to absorb 150,000 new residents from New Orleans. "It's clear that the trickle-down effect of today's oil boom is minimal."

Even though Enron will no longer play a big role in Houston's economy, it is likely to remain a big part of its image, said David Thompson.

Mr. Thompson is an owner of Ttweak, a marketing company that developed a campaign that humorously trumpets life in Houston by listing its drawbacks, like flying cockroaches, sprawl and its array of refineries.

"This has dredged up a morbid time," he said. "Houston will keep rolling on, but its image is another matter. Enron is still right up there with our overwhelming heat and humidity."

Maureen Balleza contributed reporting for this article.

    A Lingering Resentment and a Desire to Move Beyond Rueful Memories, NYT, 25.5.2006, http://www.nytimes.com/2006/05/26/business/businessspecial3/26houston.html

 

 

 

 

 

News Analysis

Verdict on an Era: Arrogance and Recklessness at Enron

 

May 26, 2006
The New York Times
By KURT EICHENWALD

 

Guilty of crimes — and a whole lot more.

Regardless of whether the jury verdict against Kenneth L. Lay and Jeffrey K. Skilling is upheld, testimony from 56 days of trial has sealed what is sure to be history's judgment — one that is unlikely to be vulnerable to appeal.

The Enron case will forever stand as the ultimate reflection of an era of near madness in finance, a time in the late 1990's when self-certitude and spin became a substitute for financial analysis and coherent business models. Controls broke down and management deteriorated as arrogance overrode careful judgment, allowing senior executives to blithely push aside their critics.

Indeed, it could be argued that the most significant lesson from the trial had nothing to do with whether the defendants, both former Enron chief executives, committed the crimes charged in their indictments. Instead, the testimony and the documents admitted during the case painted a broad and disturbing portrait of a corporate culture poisoned by hubris, leading ultimately to a recklessness that placed the business's survival at risk.

"Enron is one of the great frauds in American business history," said James Post, a professor of management at Boston University. "But it is also a symbol of a particular era of management practice. The excesses of Enron point pretty clearly to what was going on in mainstream companies across the business landscape in the 1990's."

That may go a long way toward explaining how corporate America became infused in the late 1990's by what appeared to be a near endless amount of greed and criminality, leading to scandal at an array of corporate giants, from Enron to WorldCom, from Adelphia to HealthSouth.

It was not simply that the ethics of the corporate world changed overnight; the ever-rising bubble of market prices created a sense of invincibility among corporate executives, who read market delusions as proof of their own genius. Arrogance gave way to recklessness, which in turn opened the door to criminality.

That message was repeated throughout the trial of Mr. Skilling and Mr. Lay. Paula Rieker, an executive with the company's investor relations group, testified to her fear of correcting Mr. Skilling when he made what she considered to be false statements to investors. Vince Kaminski, a top risk analyst, spoke of how Mr. Skilling became increasingly difficult to contradict as Enron won plaudits from the marketplace. And Ben F. Glisan Jr., the treasurer, portrayed an "Emperor's New Clothes" culture, where no one was willing to challenge the rule-bending and recklessness as the company's executives charged into one ill-considered business line after another.

"I would think that most observers of this trial would be shocked and surprised that Enron was such a poorly run company for so long," said Stephen Meagher, a former federal prosecutor who now represents corporate whistle-blowers. "But as long as the checks kept coming in and the stock price kept going up, it was easy to look the other way and ignore the obvious clues that there were deep problems there."

Attention to the mundane details of business — debt maturity schedules, available cash, companywide risk — appeared to be almost second thoughts among the senior ranks of the company, if thought about at all. Instead, the focus was centered on marketing the image, not only of the company, but of its senior executives. It was an approach that met widespread success and was emulated throughout corporate America.

"This was the era of the story, the shtick, the celebrity," said Mr. Post of Boston University. "Lay and Skilling delighted in that, they loved becoming business and civic celebrities. They created the model for that kind of superexecutive C.E.O. in the 1990's. Meanwhile, they left all the details to people who were being driven by a troubled culture."

In the end, although many in the public seem to believe this was a case about the collapse of Enron, that had little to do with the criminal charges. In the closing arguments, the government made sure to separate allegations of criminality from responsibility for Enron's collapse.

The testimony suggested that the bankruptcy was much more about a company gone out of control, with executives pushing to the financial edge on deals that received little attention and supervision once the transactions closed. But as that recklessness rotted the company from the inside, the jury found, Mr. Skilling and Mr. Lay falsely portrayed a corporate ship where everything remained steady.

The testimony and evidence suggested that Enron executives could not even agree on what the company's business was. There was no doubt that Enron made the bulk of its profits from trading natural gas contracts. But trading companies rarely win stratospheric stock prices; the risks and requirements for credit in such businesses temper potential market enthusiasm. So some executives argued that Enron was not a trading company, but a logistics business — one involved in every step of the production and delivery of commodities — and therefore deserved its once-lofty stock price.

Putting new labels on the old wine didn't change the financial underpinnings of the business. Most trading companies, because of the knowledge that a sudden market bump can cause available cash to disappear maintain credit ratings of A and above to protect them in the downdrafts. Enron chose instead to maintain a credit rating just notches above junk, apparently in the belief that a bad day would never arrive.

That freed capital and allowed for borrowings that otherwise would not have been available, driving Enron's supposed "growth" strategy into new business lines, which almost all proved to be debacles. Throughout the trial, there was repeated testimony about Enron's disastrous forays into international power plants and water operations, which led to the company's acquiring billions of dollars in assets that lost huge value, becoming a financial albatross.

A result, when Enron finally faced a crisis, was that it was financially unable to weather the storm. Credit lines were largely tapped out, few assets had the equity necessary for additional borrowings and the liquidity needed for the trading business rapidly dried up. Those factors combined to push Enron toward collapse.

The trial underscores that neither defendant fully accepted what happened at the company. Mr. Lay testified that the collapse was largely caused by short sellers, critical articles in The Wall Street Journal, and a resulting panic in the marketplace.

But short selling, negative press and market concerns are issues that scores of companies deal with every year, without collapsing. Indeed, to some degree, Mr. Lay's argument was a bit like blaming a match for igniting a basement filled with gasoline. In this case, the accelerant was the poor condition of Enron's financial structure.

Those lessons about the importance of quality management and strong finances in avoiding scandal, experts said, have not been lost on the audiences that perhaps matter most: the managers of corporate America and the government regulators who keep an eye on them.

"Some people say this is the end of an era, but I don't think it is," said George A. Stamboulidis, a partner with Baker & Hostetler who was appointed a monitor at Merrill Lynch as part of that firm's settlement of an Enron-related case. "This fuels the government and boards and investors to continue to push for more accountability, more transparency and better management."

Those continued efforts, coupled with the changes of the past, should mean that the kind of troubles that emerged at Enron are less likely to appear on the corporate landscape.

"Hopefully," Mr. Stamboulidis said, "the ways businesses are run in 2006 are very different from the ways the businesses were run in the 1990's."

But others expressed fear that as long as huge sums of money can be earned by executives for cutting corners and being dishonest, collapses and scandals like Enron will continue to be part of corporate America.

"One of the things we know from social psychology is that incentives and greed really blind" corporate executives, said Arthur P. Brief, a professor at the A. B. Freeman School of Business at Tulane University. "And those incentives are still with us."

    Verdict on an Era: Arrogance and Recklessness at Enron, NYT, 26.5.2006, http://www.nytimes.com/2006/05/26/business/businessspecial3/26verdict.html?hp&ex=1148702400&en=c4bd5c66575b9929&ei=5094&partner=homepage

 

 

 

 

 

Guilty Verdict in Plot to Bomb Subway Station

 

May 25, 2006
The New York Times
By WILLIAM K. RASHBAUM

 

A federal jury in Brooklyn convicted a Pakistani immigrant yesterday in the plot to blow up the Herald Square subway station in 2004. The jurors rejected his defense that a paid police informer had entrapped him by stoking his rage with images of Muslims abused at the hands of Americans.

The man, Shahawar Matin Siraj, who will turn 24 tomorrow, appeared pallid and downcast as the jury forewoman delivered the verdict. He tilted his head forward slightly and closed his eyes for a moment as she repeated the word guilty four times, once for each of the bombing conspiracy counts against him. The jurors had deliberated for 10 hours over two days after a four-week trial in United States District Court in Brooklyn.

The most serious charge, plotting to bomb a public transportation system, can carry a life sentence, although lawyers and prosecutors said Mr. Siraj would most likely face a term of 20 to 30 years under federal guidelines. He turned down a plea deal that would have given him a 10-year sentence.

While the case was a victory for federal prosecutors in Brooklyn, it was also one for the New York Police Department, which has retooled since the Sept. 11 attacks, with the aim of preventing new ones. The trial was the first time that a federal terrorism investigation was largely conducted by the department's Intelligence Division, rather than the F.B.I. The testimony provided a glimpse of how the police have used informers and deep undercover officers within the city's Muslim communities since 2001.

"The verdict is an important milestone in safeguarding New York against terrorist plotters, whether homegrown or foreign," Police Commissioner Raymond W. Kelly said in a statement. He singled out the officers, saying they "stopped the worst from happening," and the prosecutors, saying they "made certain justice was pursued."

The United States attorney in Brooklyn, Roslynn R. Mauskopf, whose office prosecuted the case, said: "Siraj conspired to plant a bomb in one of the most active transportation hubs in America. Thanks to the diligent work of law enforcement, the plot never developed beyond the planning stage, and the public was never at risk."

The defense in the case argued that Mr. Siraj had been entrapped by the paid informer, Osama Eldawoody, a 50-year-old Egyptian-born nuclear engineer who, Mr. Siraj's lawyers contended, sought to draw their client into the plot for the money. Evidence showed he was paid about $100,000 over two years and nine months — $25,000 during the 13 months he worked as an informer and the rest in relocation and living expenses over the 20 months between the arrests and the trial.

Mr. Siraj's lead lawyer, Martin R. Stolar, had sought to portray his client as a hapless dullard ripe for manipulation. He said Mr. Eldawoody, posing as a father figure and religious guide, had cajoled and inflamed the younger man, in part by showing him images of abuses, some of them at Abu Ghraib prison in Iraq. Mr. Stolar said the government had manufactured the crime, noting that the informer had told Mr. Siraj and another man that he was part of a terrorist group that did not exist and that he would supply the explosives, though there never was a bomb.

But the prosecutors, Todd Harrison and Marshall L. Miller, played hours of digital recordings Mr. Eldawoody had secretly made of his conversations with Mr. Siraj. And when the young man testified in his own defense, they attacked any credibility he might have had by bringing to light violent statements from long before he met Mr. Eldawoody.

"Obviously, he's disappointed," Mr. Stolar said outside the courthouse, adding that he would appeal. He said that he was unsure if his client "gets all the consequences of what this means for him, other than the fact that he remains in jail."

But Mr. Stolar praised the jury system and said that, based on notes jurors sent out, he felt it had worked. "They did not convict my client merely because he's a Muslim accused of terrorism," he said. "They believed that the evidence did not make out the defense of entrapment, and they followed the law."

In fact, two jurors said that nearly half the panel credited the entrapment defense as they began weighing the case, but as they sifted through the evidence there was not enough to support it, and by yesterday, the final holdout had been convinced that Mr. Siraj was guilty.

Judge Nina Gershon announced at 3:30 p.m. that the jury had sent out a note indicating that they had reached a verdict. Mr. Siraj, his family, the lawyers in the case and spectators in the crowded courtroom gallery sat quietly through a tense 15 minutes until the panel members, with solemn faces, filed into the jury box. During the brief wait, Mr. Siraj, who appeared shaken and was dressed in a zippered sweatshirt, waved to his mother, who sat in the back row next to his uncle, clutching a white tissue in both hands.

After the verdict, Mr. Siraj's mother, Shahina Parveen, 52, who testified in her son's defense and sat in the courtroom hallway throughout the trial, often praying and reading the Koran, appeared upset. She declined to speak to reporters.

Khurrum B. Wahid, who defended Mr. Siraj along with Mr. Stolar and Sean M. Maher, said that before the verdict his client asked if he would be required to say anything. Afterward, he said, Mr. Siraj asked him to "look after his mother."

Mr. Stolar had harsh words for the Police Department and the tactics that led to the conviction of his client. Referring to him by the name Mr. Siraj uses, Matin, the lawyer said he wanted to specifically address "any claims that are made by the Police Department that they have made the citizens of the city of New York safer by convicting Shahawar Matin — they have not."

"This was a manufactured crime," he said. "What we should worry about are sleeper cells, not somebody like Matin who they can send a confidential informant out to whip up and convince him, as predisposed or non-predisposed as he was, that he should commit a crime."

Mr. Eldawoody was the prosecution's central witness in the four-week trial and was on the stand for eight days, an unusually long stretch for a cooperating witness in a criminal trial in federal court.

His rambling discourse at times appeared to frustrate even the prosecutor who called him, and his disjointed, heavily accented English also seemed to wear on the jury. He often turned in the witness chair to address his answers directly to the jurors, frequently gesturing with his hands, or stabbing the air in front of him with a ballpoint pen to emphasize a point.

He testified that he volunteered to troll the city's mosques and Muslim communities out of patriotism and a desire to show that violent extremists are the exception rather than the rule in Islam.

Before the trial, Mr. Stolar said several times that he would seek to put the police tactics on trial, and during his cross-examination of Mr. Eldawoody, he sought to raise questions about the propriety of the department's insertion of informers into mosques around the city. But government lawyers complained to Judge Gershon that he was seeking to use the trial to build a civil case against the department.

Mr. Stolar argued that some of Mr. Eldawoody's conduct was "presumptively violative" of a 1985 consent decree governing the department's Intelligence Division, where the detective overseeing the informer was assigned. Mr. Stolar was one of the lawyers who brought the original civil case in 1971.

Judge Gershon shut down Mr. Stolar's efforts to focus on the department a day into his four-day cross-examination. "The issue here, as the defense itself has framed it, is whether the defendant was entrapped," the judge ruled on May 3. It was not, she said, about "the legality or illegality of police conduct" but whether the police caused Mr. Siraj to commit a crime.

In the end, the defense case rested squarely on the shoulders of Mr. Siraj himself. He testified for two and a half days in an effort to persuade the jury that he would never have even considered plotting violence, let alone a terrorist act, if he had not had the ideas planted in his head.

But prosecutors called a surprise witness to rebut his testimony, an undercover detective who had had frequent conversations with Mr. Siraj long before he met Mr. Eldawoody. The conversations, the detective said, were filled with Mr. Siraj's approval of suicide bombings and Osama bin Laden.

Mr. Siraj, and another man, James Elshafay, who later pleaded guilty and testified against him, were arrested several days before the 2004 Republican National Convention on charges they plotted to blow up the Herald Square subway station, the third busiest hub in the city's transit system, serving 110,000 riders a day

After the sentencing date was set for Oct. 5, a quiet Mr. Stolar carefully folded some of the clothes his client had worn in court during the trial — a pinstriped suit, the zippered sweatshirt in which he was sentenced, and several other garments — and packed them into a black garbage bag he had rested on a courtroom bench.

Michael Wilson contributed reporting for this article.

    Guilty Verdict in Plot to Bomb Subway Station, NYT, 25.5.2006, http://www.nytimes.com/2006/05/25/nyregion/25herald.html?hp&ex=1148616000&en=1b568b80501c0e4a&ei=5094&partner=homepage

 

 

 

 

 

Attorney pleads guilty in Milberg case

 

Mon May 22, 2006 10:04 PM ET
Reuters
By Gina Keating

 

LOS ANGELES (Reuters) - A Los Angeles attorney has admitted to passing illegal kickbacks from Milberg Weiss Bershad Hynes & Lerach, the nation's No. 1 class action law firm, to a plaintiff as part of a widening federal probe, according to court documents filed on Monday.

The firm, now known as Milberg Weiss Bershad & Schulman, and two senior partners, David Bershad and Steven Schulman, were indicted last week by a federal grand jury in Los Angeles for orchestrating a kickback scheme in which it paid clients for acting as plaintiffs in its lawsuits.

Bershad and Schulman, who managed the firm's finances, denied the allegations last week and vowed to exonerate themselves.

A spokeswoman for Milberg Weiss, which also has denied wrongdoing, could not be reached late on Monday for comment on the latest allegations.

On Monday, attorney Richard Purtich became the second person to plead guilty to charges stemming from the alleged scheme, and to agree to cooperate with prosecutors, according to a plea agreement filed in federal court in Los Angeles.

His lawyer could not be reached for comment.

Purtich, 53, faces up to three years in prison if convicted of the single tax fraud charge against him. He is scheduled to be arraigned next month.

According to the plea agreement, Purtich said he and law firms he was associated with received checks totaling $3.5 million from Milberg Weiss between 1992 and 1996 and passed them on to Beverly Hills eye surgeon Steven Cooperman.

Cooperman and his relatives acted as plaintiffs in dozens of Milberg Weiss cases between 1981 and 2004, according to the indictment against the firm.

Purtich reported the kickback payments to the IRS as his own income or that of the law firms, and in doing so, concealed income that Cooperman received from Milberg Weiss, according to the plea. That is the basis of the single tax fraud charge against him.

Purtich admitted in the plea that neither he nor the law firms that received the checks made any referrals or performed any work to earn the payments from Milberg Weiss.

Another Milberg client, Howard Vogel, pleaded guilty last month to taking $2.5 million in kickbacks from Milberg Weiss and lying about it in sworn court documents.

Vogel, a retired mortgage broker, was the first to plead guilty in the six-year-old federal probe against Milberg Weiss.

In addition to Bershad and Lerach, two other people have been indicted in the case.

    Attorney pleads guilty in Milberg case, R, 22.5.2006,http://today.reuters.com/news/newsArticle.aspx?type=domesticNews&storyID=2006-05-23T020422Z_01_N22418359_RTRUKOC_0_US-CRIME-MILBERG.xml

 

 

 

 

 

4 Are Indicted on Arson Charges in 1998 Fires at a Resort in Vail

 

May 20, 2006
The New York Times
By KIRK JOHNSON

 

DENVER, May 19 — A federal grand jury has indicted four people on arson charges for the devastating fires at the Vail Mountain resort in 1998 that shocked the tourism industry and drew attention to the shadowy terrain of environmental extremism.

The Earth Liberation Front, a group active in the Pacific Northwest, claimed responsibility for the fires, which caused about $12 million in damage to buildings and chairlifts but no injuries. For nearly eight years the crime was never solved.

The indictment announced on Friday by the United States attorney for Colorado, William J. Leone, includes two people who are already in federal custody in Oregon on arson and eco-terrorism-related charges — Chelsea D. Gerlach, 29, and Stanislas G. Meyerhoff, 28.

The whereabouts of the other two people, Josephine S. Overaker, 31, and Rebecca J. Rubin, 33, are unknown, but a spokesman for Mr. Leone said both were believed to be outside the United States.

"We are a nation of laws," Mr. Leone said in a statement. "We simply cannot capitulate to the use of violence as a means of political discourse."

The four suspects, along with seven other people, were indicted on federal charges in January in Oregon on a broad accusation of conspiracy to commit arson or other acts of ideologically driven destruction around the country and with specific crimes in the Northwest.

The new indictment is as specific and narrow as a police blotter, with no mention of motive or belief. Eight fires were set on or about the night of Oct. 19, 1998, at Vail, about 100 miles west of Denver — including at a ski lodge, two restaurants and the ski patrol headquarters — and the four people named in the indictment, the grand jury said, were responsible.

The defendants face 5 to 20 years on each of the eight counts in the new indictment. The lawyer for Ms. Gerlach in Oregon did not return phone calls. Mr. Meyerhoff's lawyer, Richard Fredericks, said Mr. Meyerhoff had previously acknowledged his responsibility in connection with the Vail fires, adding, "He is remorseful and apologetic."

Vail's expansion in 1998 was opposed by many environmentalists and residents of the area, who said the new buildings and ski lifts would harm potential habitat for Canada lynx, which had largely disappeared in the Colorado Rockies and were about to be reintroduced. The Earth Liberation Front said after the fires that protecting lynx habitat was the goal of the attack.

But the ferocity of the fires probably caused as much damage to the environmentalist cause as it did to Vail, which went on to complete its expansion of what was called the Blue Sky basin in 2000. The lynx reintroduction, meanwhile, has gone well, state officials say. Since the program started in 1999, the Division of Wildlife has released 204 lynx, and in the most recent survey last year counted the highest number of new lynx kittens yet — at least 46 born in one year.

A spokeswoman for Vail Mountain, Jen Brown, said: "We're pleased that the authorities continue to work so diligently on this case and will watch with interest as the case continues through the justice process."

    4 Are Indicted on Arson Charges in 1998 Fires at a Resort in Vail, NYT, 20.5.2006, http://www.nytimes.com/2006/05/20/us/20vail.html

 

 

 

 

 

Federal Judge Dismisses Lawsuit by Man Held in Terror Program

 

May 19, 2006
The New York Times
By NEIL A. LEWIS

 

WASHINGTON, May 18 — A federal judge on Thursday dismissed a lawsuit brought by a man who says he was an innocent victim of the United States government's program transferring terrorism suspects secretly to other countries for detention and interrogation.

Judge T. S. Ellis 3d ruled in favor of the Bush administration, which had argued that the "state secrets" privilege provided an absolute bar to the lawsuit against a former C.I.A. director and transportation companies. Judge Ellis said the suit's going forward, even if the government denied the contentions, would risk an exposure of state secrets.

The case involves Khaled el-Masri, a Kuwaiti-born German, who was arrested on Dec. 31, 2003, in Macedonia, where he had gone for a vacation. From there, he was flown to a prison in Kabul, Afghanistan, where he was held for five months before being released. During his incarceration in Kabul, he has said, he was shackled, beaten and injected with drugs.

United States officials have acknowledged the principal elements of Mr. Masri's account, saying intelligence authorities may have confused him with an operative of Al Qaeda with a similar name. The officials also said he was released in May 2004 on the direct orders of Condoleezza Rice, then the national security adviser, after she learned he had been mistakenly identified as a terrorism suspect.

Judge Ellis said Mr. Masri's claim involved the clandestine program of transferring terrorism suspects known as "extraordinary rendition" and "the means and methods the foreign intelligence service of this and other countries used to carry out the program."

Citing an affidavit by Porter J. Goss, who will leave as director of the Central Intelligence Agency next week, Judge Ellis added, "Any admission or denial of these allegations by defendants in this case would reveal the means and methods employed pursuant to this clandestine program and such a revelation would present a grave risk of injury to national security."

Mr. Masri's lawyers from the American Civil Liberties Union had argued that there were no state secrets to protect as his story has been widely reported and officials had even acknowledged the existence of the rendition program. But Judge Ellis said there was an important distinction between "a general admission the program exists and the admission or denial of the specific facts at issue in this case."

Ben Wizner, an A.C.L.U. lawyer for Mr. Masri, said, "The idea that the court must close its eyes and ears to common sense and protect the nation from disclosure of information that the whole world knows is absurd." He said an appeal would be considered.

Judge Ellis said Mr. Masri's interests in having his rights vindicated in court must yield to "the national interest in preserving state secrets." But he noted that if Mr. Masri's account were true, he "suffered injuries as a result of our country's mistake and deserves a remedy." He said only the legislative or executive branches could provide such a remedy, presumably in the form of compensation or apology.

    Federal Judge Dismisses Lawsuit by Man Held in Terror Program, NYT, 19.5.2006, http://www.nytimes.com/2006/05/19/washington/19rendition.html

 

 

 

 

 

U.S. Indictment for Big Law Firm in Class Actions

 

May 19, 2006
The New York Times
By JULIE CRESWELL

 

The nation's leading class-action securities law firm, Milberg Weiss Bershad & Schulman, and two of its partners were charged yesterday with making more than $11 million in secret payments to three individuals who served as plaintiffs in more than 150 lawsuits.

The indictment is the first instance of a law firm with national reach facing criminal charges, and it could prove to be a fatal blow for the firm. The lawsuits cited in the indictment spanned two decades, occurring as recently as 2005, and generated some $216 million in legal fees for the firm.

Its lucrative business made Milberg Weiss a target for political critics who saw the firm as a symbol of a national litigation industry that had gone out of control. These critics said that many of the firm's lawsuits against corporations were frivolous, raising the cost of doing business.

The critics contended that investors, for the most part, saw only pennies on the dollar from any recoveries won by the firm. In the 1990's, Congress raised the legal hurdle for such lawsuits in large part in response to Milberg Weiss. Even so, the firm continued to thrive.

"There's never been a firm of their prominence that has been indicted," said Ralph C. Ferrara, a former general counsel with the Securities and Exchange Commission who is now a lawyer with the law firm of LeBoeuf, Lamb, Greene & MacRae. "This is a regrettable and remarkable thing."

In the 20-count indictment by a federal grand jury in Los Angeles yesterday, Milberg Weiss and two of its prominent partners, David J. Bershad and Steven G. Schulman, are accused of racketeering conspiracy, mail fraud, money laundering conspiracy and obstruction of justice.

The prosecutors are asking for the return of the fees earned by the firm and those named in the indictment. In addition, there is the possibility of prison for the two partners — up to 20 years for racketeering conspiracy, for example.

To disguise some of the secret payments to plaintiffs, which prosecutors referred to as kickbacks, the law firm moved cash through casinos and kept money in a credenza in Mr. Bershad's office, the indictment said.

"This case is about protecting the integrity of the justice system in America," said Debra Wong Yang, the United States attorney in Los Angeles. The firm and lawyers for Mr. Bershad, 66, and Mr. Schulman, 54, said they would fight the charges.

Feared and loathed inside boardrooms across the country, Milberg Weiss made hay out of the numerous accounting and management scandals that caused stocks to collapse in recent years. Sometimes bullying, sometimes screaming, sometimes speaking very softly, the firm's lawyers coaxed and cajoled what it has estimated to be $45 billion in recoveries from companies.

"The people who are going to be happy about this indictment are the hundreds and hundreds of companies that Milberg Weiss successfully sued and the political demagogues who rail about 'trial lawyers' running up the price of eggs," said William W. Taylor, a lawyer at Zuckerman Spaeder who represents Milberg Weiss.

"You could hear the cheering all the way from Wall Street to Pennsylvania Avenue, and it feeds right into the hands of people who want to prevent victims from being able to get the justice from big companies that they deserve," Mr. Taylor said.

Legal experts said the criminal case could sharply change the landscape of securities class-action litigation as one of its dominant participants struggles to survive. While Milberg Weiss lawyers can still legally represent clients, the indictment is likely to set off a race among competitors to unseat the firm from several high-profile lawsuits.

The indictment could also open the door to the prospect of settlements made decades ago being reopened or of lawsuits against the firm itself by shareholders contending they did not receive enough in a settlement or by a law firm that was jostled out of representing a lead plaintiff.

"Could there be a class-action lawsuit against Milberg over this? It can happen," said George M. Cohen, a law professor with the University of Virginia. Mr. Cohen and others, however, noted that given the firm's partnership structure, the personal assets of the partners would most likely be protected and the firm itself probably does not have much cash.

Shortly after the indictment was announced, the firm denied wrongdoing in a posting on a Web site it started, www.milbergweissjustice.com.

"We will not allow the indictment today to deter us from our watchdog role," one of the firm's co-founders, Melvyn I. Weiss, said in a statement. "We will vigorously defend ourselves and our partners against these charges and we will be vindicated."

Mr. Weiss was not named in the indictment. The man behind the firm's other top name, Lawrence Milberg, died in 1989.

Andrew M. Lawler, a lawyer for Mr. Bershad, said, "David Bershad categorically denies the allegations of the indictment."

Herbert Stern, a lawyer for Mr. Schulman, said his client "will plead not guilty because he is not guilty, and we look forward to his ultimate vindication."

Prosecutors have so far been stymied in efforts to charge the two primary targets of the investigation, Mr. Weiss and his former partner, William S. Lerach. In 2004, Mr. Lerach started his own firm on the West Coast. Both men were told in February that they would not be indicted at this time, although people involved in the talks say they remain targets of prosecutors.

Negotiations to avert an indictment of the firm stalled in recent days. In a last-ditch effort to stave off prosecutors, Mr. Bershad and Mr. Schulman agreed to take leaves of absence. Additionally, the firm said it hired Bart M. Schwartz, a former chief of the criminal division for the United States attorney in Manhattan, to monitor its procedures regarding payment of referral fees.

Companies that have been targets of criminal investigations in recent years, like the accounting firm KPMG and the drug maker Bristol-Myers Squibb, reached deferred-prosecution agreements.

Milberg Weiss, however, refused to sign such an agreement, which would have required it to waive attorney-client privileges. On its Web site, the firm called that condition a "derogation of one of the bedrock principles of American law."

Others said they were disturbed that the entire law firm had been indicted, especially as the Justice Department has been reluctant to take such an action since the 2002 indictment of the accounting firm Arthur Andersen. The firm went out of business, although its conviction was overturned by the Supreme Court.

"I don't understand what the harm was to the members of the class-action lawsuit," said Lawrence W. Fox, a lawyer at Drinker Biddle & Reath and a former chairman of the American Bar Association's ethics committee. "Milberg Weiss itself had every incentive to maximize the recovery as, to some extent, their fee was dependent on that. There was never any incentive for them to settle on the cheap."

Ms. Yang, the United States attorney, said: "We really had a situation where the firm was not accepting responsibility, was not making any substantial changes to the firm itself. We really were in a situation where we had no choice but to indict."

The charges against the firm and the two partners were included in a revised indictment against a retired California lawyer and former Milberg client, Seymour M. Lazar, who was originally charged last summer.

From 1981 through about 2004, Mr. Lazar, 78, or members of his family served as plaintiffs in about 70 lawsuits for Milberg Weiss and got about $2.4 million in "secret and illegal kickback payments," the new indictment said.

According to the charges, the scheme involving Mr. Lazar and two other paid plaintiffs worked like this: Plaintiffs would buy securities anticipating that they would decline in value, hence positioning themselves to be named plaintiffs in the class actions.

After the court in a lawsuit awarded lawyers' fees, the firm and Mr. Bershad and Mr. Schulman gave cash directly to the plaintiffs or to intermediary lawyers.

The firm also falsely accounted for the payments as referral fees or professional fees, the indictment said.

Under New York law, it is illegal for a lawyer to promise or give anything to induce a person to bring a lawsuit or to reward a person for having done so, the indictment said.

Furthermore, the payments created a conflict because the paid plaintiffs had a "greater interest in maximizing the amount of attorneys' fees awarded to Milberg Weiss than in maximizing the net recovery" to others in the class, the indictment said.

One figure named as an unindicted co-conspirator in the indictment is a Beverly Hills ophthalmologist, Dr. Steven G. Cooperman. Dr. Cooperman or members of his family acted as plaintiffs in nearly 70 lawsuits, receiving approximately $6.5 million in payments, the indictment said.

It was testimony by Mr. Cooperman that led to the original investigation six years ago. His value as a potential witness, however, is tempered by the fact that he offered to provide evidence to prosecutors in hopes of receiving a reduced sentence on his conviction of art fraud.

In addition to Mr. Cooperman, another paid plaintiff, Howard J. Vogel, a retired mortgage broker, reached a plea agreement with prosecutors last month. He admitted to accepting $2.5 million in secret payments.

    U.S. Indictment for Big Law Firm in Class Actions, NYT, 19.5.2006, http://www.nytimes.com/2006/05/19/business/19legal.html?hp&ex=1148097600&en=287e588955b4940c&ei=5094&partner=homepage


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fiery Plea by Defense in Houston        NYT        17.5.2006
http://www.nytimes.com/2006/05/17/business/businessspecial3/17enron.html

 

 

 

 

 

 

 

 

 

 

 

 


 

 

Fiery Plea by Defense in Houston

 

May 17, 2006
The New York Times
By ALEXEI BARRIONUEVO and SIMON ROMERO

 

HOUSTON, May 16 — For 16 weeks, government lawyers sought to portray Kenneth L. Lay and Jeffrey K. Skilling as leaders of a criminal enterprise who propped up Enron with accounting tricks and lied to investors and employees about the company's financial problems.

Lawyers for the former chief executives defended their clients as passionate men who are ultimately guilty of no more than their supreme belief that they could turn Enron into an energy colossus and keep it afloat, even in difficult times.

Those two visions clashed once again this week in a federal courtroom here. Now, it is the jury's turn to decide which side is telling the truth. Closing arguments in the trial are expected to conclude Wednesday with a government rebuttal by Sean Berkowitz, the director of the Enron Task Force of the Justice Department, and then the case goes to the jury for a verdict.

In their closing arguments on Tuesday, defense lawyers ripped into the government's case, accusing prosecutors of pushing at all costs to punish Enron's top two officers for the failure of a company that became synonymous with corporate malfeasance.

Speaking to a courtroom packed with the defendants' families, lawyers and local residents, the defense lawyers gave spirited arguments to the eight-woman, four-man jury.

Some of the wildest moments came at the end of a long day filled with oratorical flourishes. At one point, Chip Lewis, a tall, burly lawyer with a goatee who represents Mr. Lay, turned to John C. Hueston, a prosecutor, and accused him of misleading the jury about Mr. Lay's potential conflict of interest in a photo-sharing company.

"Don't come to Houston, Texas, and lie to us!" Mr. Lewis shouted at Mr. Hueston, who barely flinched and never returned the stare. "I cannot think of a more despicable act, when a man's life is at stake, than to tell a premeditated lie." Mr. Lay's wife, Linda, and her daughter, Robin, briefly clapped from the front row of the courtroom.

And Michael W. Ramsey, who is Mr. Lay's lead lawyer but missed more than a month of the 55-day trial because of heart problems, closed out the defense's six hours of arguments with an impassioned 12 minutes.

"There may be a jury that yields to unpopularity, but it's not this jury," said Mr. Ramsey, arguing vigorously despite two heart operations since March. "There may come a day when an American jury yields to a media mob, but it's not this day."

A beaming Mr. Lay, 64, later told reporters outside the courthouse that he was pleased with the "powerful" performance by his team, noting that it was "very emotional" to have Mr. Ramsey back on Tuesday.

Much of the day belonged to Daniel Petrocelli, the Los Angeles-based civil lawyer in his first criminal trial, who hammered at the government's case for more than three hours, insisting prosecutors were trying to secure guilty verdicts against Mr. Skilling and Mr. Lay by painting Enron as a thoroughly criminal operation.

"Their approach to this case was that Enron was a mob organization," Mr. Petrocelli said.

The lawyer described his client as a troubled man — prone to depression and burdened with a weakness for drink but ultimately innocent — but said Mr. Skilling's personal flaws did not make him guilty of defrauding Enron.

"He's a tortured soul now, for the rest of his life," Mr. Petrocelli said of Mr. Skilling. "That's his legacy; he can't do anything about it. He deserves to go home with the rest of us when this case is over. I'm going to ask you to send him home."

Throughout the day, Mr. Petrocelli and the four lawyers for Mr. Lay emphasized the theme that the government had sought to criminalize normal business practices, squeezing former managers to cooperate as witnesses, all with the goal of laying the ultimate blame for Enron at the feet of Mr. Skilling and Mr. Lay, the only chief executives in the company's 16-year-history.

"They are trying to reverse-engineer this case," Mr. Petrocelli said. He later added: "They kept their eye on the prize, and the prize was Jeff Skilling and Ken Lay. That's why we are here. They have conducted an autopsy of Enron."

Mr. Skilling, 52, who looked pained during Monday's closing arguments when a prosecutor accused him and Mr. Lay of "extraordinary arrogance," was more relaxed on Tuesday. Sometimes he laughed at Mr. Petrocelli's remarks, and he frequently searched the faces of more than half a dozen family members who watched the defense lawyers' final bid to save him and Mr. Lay from what could be decades in prison.

Mr. Skilling faces 28 charges of fraud, conspiracy and insider trading, while Mr. Lay faces 6 charges of fraud and conspiracy. Both men served as chief executive of Enron in 2001, as the company slid toward bankruptcy that December. The defense lawyers repeatedly accused the government of pushing witnesses to, in effect, concoct testimony against their top bosses, reinterpreting statements made at crucial meetings if necessary. The defense team also said that the prosecution was purposely playing down documents blessed by Enron's accountants and lawyers that approved financial transactions that helped Enron meet its quarterly goals.

But throughout, the defense lawyers also sought to recast the case as separate from the company's collapse and the subsequent lawsuits, investigations and negative publicity. Enron's bankruptcy set off a wave of inquiries into accounting fraud and new regulations requiring more financial disclosures and attention to detail by corporate managers, directors and auditors.

"Culture is not a crime," Mr. Petrocelli said. "Bankruptcy is not a crime. Failure is not a crime."

Bruce Collins, one of Mr. Lay's lawyers, later said: "When did bankruptcy become a crime? What's great about our system is we don't punish those who take the risk."

As he has throughout the trial, Mr. Petrocelli directed his comments toward the jury, frequently raising his voice and gesticulating with both arms outstretched, as he accused government prosecutors of bullying former Enron officials into cooperating in their case against Mr. Skilling in exchange for potentially lenient sentences. At other moments, he lowered his voice to a mere whisper.

Mr. Petrocelli's impassioned style contrasted starkly with the calm, methodical approach adopted on Monday by Kathryn H. Ruemmler, the prosecutor who delivered the government's initial closing argument. Ms. Ruemmler accused Mr. Skilling and Mr. Lay of concocting a series of fabrications as they signaled to investors and employees that the company was in fine shape despite clear signs of distress from within.

Mr. Petrocelli proceeded with a defense strategy adopted since the start of the trial four months ago, contending that Mr. Skilling and Mr. Lay did nothing illegal before Enron's collapse, but instead are victims of a government effort to find and assign blame at almost any cost. While stopping short of accusing prosecutors of criminal wrongdoing, Mr. Petrocelli said, "They'll do anything, and they have."

"They mock me and they mock my client, because he had the audacity to get up on that witness stand and say, 'I'm innocent,' " Mr. Petrocelli said. "They can't back up what they put in that indictment, and they're scrambling."

Mr. Petrocelli reserved scorn not just for the prosecutors but also for Enron's former chief financial officer, Andrew S. Fastow, who is cooperating with the government after acknowledging his role in accounting fraud and the theft of tens of millions of dollars. Defense lawyers have tried to portray Mr. Fastow as a lieutenant who deceived his superiors about an elaborate scheme for personal enrichment through off-balance-sheet investments.

Mr. Skilling was hurt by Mr. Fastow's deceptions, Mr. Petrocelli said, and has also been burdened by mistakes he made at Enron's helm that were not criminally negligent.

The lawyers argued that the government failed to prove its underlying charge: that the former executives participated in an overarching criminal conspiracy. Mr. Petrocelli said that many of the counts against Mr. Skilling flowed from the conspiracy charge, accusing the government of "piling on" charges to his indictment. He presented the jury's choice as an all-or-nothing proposition.

"There is no compromising back there," Mr. Petrocelli said, raising his voice to a near shout. "You won't compromise with my client's life. You either decide he did this or he didn't."

Mr. Lay's lawyers sought to stress that Mr. Lay should not be punished simply for being at the helm of a business failure. Mr. Collins evoked the words of Theodore Roosevelt: "The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood."

Mr. Lay's lawyers also sought to humanize him, describing him as someone who was raised as "a poor farm boy in Missouri" and highlighting the preachers and top Houston business leaders who testified to Mr. Lay's character in the trial. On Monday, Ms. Ruemmler had underscored how that view of Mr. Lay contrasted sharply with the man who took the stand and struggled to show humility and admit to making mistakes while at Enron.

Mr. Collins also portrayed Mr. Lay, once one of Houston's most prominent businessmen, as a corporate leader who tied his own finances to the fate of Enron and ultimately suffered a steep decline in his net worth when the value of Enron's shares evaporated.

Only when the jurors enter the courtroom with a verdict in hand will it be clear if the defense's message of government overreaching resonated with them. "When the spear of government starts to touch living flesh, we are proud of our liberty," Mr. Ramsey said.

    Fiery Plea by Defense in Houston, NYT, 17.5.2006, http://www.nytimes.com/2006/05/17/business/businessspecial3/17enron.html

 

 

 

 

 

Moussaoui appeals life sentence

 

Sat May 13, 2006 3:01 AM ET
Reuters
By Joanne Morrison

 

WASHINGTON (Reuters) - Convicted September 11 conspirator Zacarias Moussaoui on Friday appealed the life sentence he received earlier this month and a federal judge's denial of his request for a new trial.

In a one-paragraph statement, Moussaoui's court-appointed lawyers said he wanted the 4th U.S. Circuit Court of Appeals to review the final judgment and sentence issued on May 4 and a court ruling denying his request to withdraw his guilty plea and set a new trial.

Earlier this week, U.S. District Judge Leonie Brinkema denied Moussaoui's request based on a federal rule that prohibits a defendant from withdrawing a guilty plea after he is sentenced.

Moussaoui, 37, last week was sentenced to life in prison for conspiracy in connection with the September 11 attacks. After that, he asked the federal judge to allow him to withdraw his guilty plea in that case, saying he lied when he testified he was meant to be part of the hijacking plot.

The French citizen of Moroccan descent was in jail on September 11, 2001, after raising suspicions at a flight school.

When Moussaoui pleaded guilty to six counts of conspiracy in April 2005, he said he was an al Qaeda operative and was supposed to be a part of a second wave of hijackings.

But in an affidavit with a motion for a new trial filed after his sentencing, Moussaoui denied having any connection with the September 11 attacks.

Last week, a jury of nine men and three women decided that Moussaoui, the only person charged in a U.S. court for the hijacked airliner attacks against the World Trade Center and the Pentagon, should go to prison for life rather than be executed.

    Moussaoui appeals life sentence, R, 13.5.2006, http://today.reuters.com/News/newsArticle.aspx?type=topNews&storyID=2006-05-13T070109Z_01_N12220705_RTRUKOC_0_US-SECURITY-MOUSSAOUI.xml

 

 

 

 

 

Quirky Details Are Revealed in Mob Killing at S.I. Mansion

 

May 12, 2006
The New York Times
By WILLIAM K. RASHBAUM

 

In some respects, a racketeering indictment unsealed yesterday in federal court in Brooklyn is a classic in the mob canon. A Mafia soldier and four associates stand charged with killing one of their own. There are accusations of loan-sharking. There is arson. There is assault.

And among the court papers prosecutors filed in the case are several sensational details that depict the murder for hire as a grisly and awkward affair. The victim was lured to a secluded landmark, a Victorian mansion on a hilltop on Staten Island, but he proved hard to kill. When an effort to strangle him failed, he was stabbed, then dragged to a nearby pond and drowned. His body was dismembered with hacksaws and incinerated in the mansion's furnace.

The charges reveal another interesting aspect to the case: The mob associate and former marine who prosecutors say was paid $8,000 by a Bonanno crime family soldier to carry out the hit is black. And one of his accomplices disposing of the body that day is Hispanic. Both are something of a rarity in the Mafia, not an enterprise known for its commitment to diversity.

Prosecutors contend that the soldier who ordered the murder, Gino Galestro, oversaw a crew of several associates, including the former marine, Joseph Young, 27, and the three other men charged in the indictment. Law enforcement officials said that the victim, Robert McKelvey, 39, had committed crimes with the men and had run afoul of Mr. Galestro, a former newspaper delivery driver for The New York Post and The Daily News and an official of the drivers' union.

Mr. McKelvey, one of the officials said, owed Mr. Galestro money and had angered him. "He had a big mouth," the official said of Mr. McKelvey, who lived on Staten Island.

A fourth associate, who took part in the murder and several other crimes with the defendants, recently began cooperating with F.B.I. agents and prosecutors and told them about the April 2005 killing, according to a letter asking a federal judge to hold three of the men without bail. The letter, by an assistant United States attorney, Joey Lipton, did not identify the witness.

The cooperating witness told F.B.I. agents and prosecutors that the murder had occurred at the hilltop landmark known as the Kreischer Mansion, at 4500 Arthur Kill Road in the Charleston section, which neighborhood residents have long said was haunted.

Last month, F.B.I. agents searched the home and conducted forensic tests in an effort to find traces of blood, but are still awaiting the results.

They learned that the mansion's owners, who had no knowledge of the crime and are developing the property as an assisted living center for older people, had replaced the furnace as part of their renovations.

A lawyer for Mr. Young, who was living at the mansion at the time of the murder as its caretaker, said his client had no criminal record.

"We intend to enter a plea of not guilty and proceed to trial on these matters," said the lawyer, Felix T. Gilroy.

Prosecutors said Mr. Young served seven months in the Marine Corps before going AWOL and getting an other-than-honorable discharge.

Mr. Young was arrested in January on the arson charges that are part of the racketeering conspiracy. He was charged with murder for hire last week in the killing of Mr. McKelvey, and held without bail on Wednesday.

Mr. Galestro, 37, who was convicted of loan-sharking conspiracy on April 22, 2005, was sentenced to a year and a day in prison and is expected to be released on June 8. Prosecutors said he sought and won a lighter-than-usual sentence in that case, citing among several reasons his wife's pregnancy. He will be arraigned on the new charges in several weeks. His lawyer, Richard Ware Levitt, declined to comment.

Both Mr. Galestro and Mr. Young — who also face charges of murder in aid of racketeering and murder for hire — could face the death penalty if convicted of the most serious charges.

The three other men charged, John Tufarelli, 25, Jose Garcia, 34, and Stefan Cicale, 32, were arrested yesterday morning.

They pleaded not guilty at their arraignments and were held without bail at a hearing in front of Ramon E. Reyes Jr., a United States magistrate judge. Lawyers for the three men declined to comment.

Prosecutors believe Mr. McKelvey was murdered in late April 2005, sometime around Mr. Galestro's sentencing. Several days later, his sister filed a missing persons report, which described him as 5-foot-8, 170 pounds, with brown hair and brown eyes and a tattoo of a bird and a skull on his right forearm. The report said he was last seen wearing a black sweatshirt and black sweat pants.

The accusation of a black man serving as a mob associate is rare, but not extraordinary. Blacks and Hispanics are barred from becoming full members of organized crime by Mafia protocol, which requires members to be full-blooded Italians.

"It certainly is not unprecedented — it's unusual," said Jerry Capeci, a newspaper reporter, author and organized crime expert who runs the ganglandnews.com Web site. "But when it comes to making money, the mob will go into business with blacks, Latinos, Asians — anyone who they think will put money in their pockets."

In fact, while Jewish and Irish criminals have served as high-level mob associates, black criminals in similar roles are rare, though there have been significant figures.

They include Leroy Barnes, known as Nicky, a Harlem heroin merchant in the 1960's and 70's associated with the Bonanno family, and Ellsworth Johnson, known as Bumpy, who was involved in gambling and narcotics in Harlem in the 1930's, 40's and 50's.

More recently, black criminals associated with the Genovese and Gambino families have been involved with groups that extorted money from construction contractors under the guise of seeking more jobs for minorities at particular construction sites.

While Mr. McKelvey had been missing for more than a year, his neighbors had few fond memories.

Marcella Liotta, 49, a homemaker across the street from the small bungalow at 413 Hunter Avenue on Staten Island where he lived until he disappeared, called him a "shady type of guy," and said the police were often called to his home regarding complaints that he beat his girlfriend.

"We're not sorry to see him go," she said.

A man at a relative's home on Staten Island — who said he was Mr. McKelvey's brother-in-law but would not identify himself further — said the family did not know why he was killed.

"He was a guy who didn't deserve that," he said.

Ann Farmer contributed reporting for this article.

    Quirky Details Are Revealed in Mob Killing at S.I. Mansion, NYT, 12.5.2006, http://www.nytimes.com/2006/05/12/nyregion/12mob.html

 

 

 

 

 

Ex-Aide With Abramoff Ties Pleads Guilty to Conspiracy

 

May 9, 2006
The New York Times
By PHILIP SHENON

 

WASHINGTON, May 8 — A former top aide to Representative Bob Ney, Republican of Ohio, pleaded guilty on Monday to conspiring with the lobbyist Jack Abramoff to corrupt public officials and said gifts had been "corruptly offered to and accepted by" Mr. Ney.

In court papers, the former aide, Neil G. Volz, said the gifts included a 2002 trip to Scotland by private jet that included rounds of golf at the fabled course at St. Andrews.

The plea agreement made it clear that Mr. Ney, a six-term House member who is facing a re-election fight this year because of his ties to Mr. Abramoff, remains a central focus of the Justice Department's influence-peddling investigation.

Mr. Volz, 35, who was Mr. Ney's chief of staff from 1998 to 2002, faces up to five years in prison and a $250,000 fine as a result of his guilty plea to one count of criminal conspiracy. Mr. Abramoff, who was once among the most powerful Republican lobbyists in Washington and who recruited Mr. Volz to join his firm in 2002, pleaded guilty to broader corruption charges in January.

Mr. Ney was not identified by name in Mr. Volz's plea agreement, which was filed in Federal District Court in Washington.

But lawyers for Mr. Ney acknowledged that he was the House member identified in the plea agreement as "Representative No. 1." He is accused with other members of his staff of accepting gifts from Mr. Abramoff's lobbying firm, including the trip to Scotland and trips to New Orleans and the 2003 Fiesta Bowl in Tempe, Ariz., as well as free meals and drinks at Washington restaurants and use of Mr. Abramoff's box suites at the MCI Center in Washington and Camden Yards stadium, home of the Baltimore Orioles.

The plea agreement charged that "Representative No. 1 and others performed official acts at the behest of Abramoff and others, which were motivated in part by the things of value received," suggesting bribery.

The court papers offered a long list of actions taken by Mr. Ney to help Mr. Abramoff, including meeting with his Indian tribe clients and promising to introduce legislation to benefit their gambling operations.

Mr. Volz acknowledged in the plea agreement that he began accepting illegal gifts from Mr. Abramoff while he was working in the House and that as a result he did several official favors for the lobbyist, including having Mr. Ney place statements into The Congressional Record that were helpful to Mr. Abramoff in pursuing his purchase of a fleet of casino boats in Florida.

In a statement released by his House office, Mr. Ney said, "I have always considered Neil Volz my friend," and "I am very saddened to see what happened today."

Mr. Ney's spokesman, Brian Walsh, said in a separate statement that the plea deal with Mr. Volz was "thin at best" and that "the congressman is more confident than ever that he will be vindicated in this matter." Mr. Walsh said that "if Neil crossed an ethical line, he did so without Congressman Ney's knowledge."

Ohio Democrats have seized on Mr. Ney's relationship with Mr. Abramoff in seeking the lawmaker's defeat, and he is considered one of the most vulnerable Republicans in Congressional elections this year. A former Ohio state senator who was elected to Congress in 1995, Mr. Ney had previously won re-election to his House seat from the 18th District of Ohio by a comfortable margin.

A lawyer for Mr. Ney, Mark Tuohey, said in a phone call with reporters on Monday that Mr. Ney's legal team had spoken with federal prosecutors in recent months and offered to make the lawmaker available "to answer any and all questions."

Mr. Tuohey suggested a defense strategy if Mr. Ney was indicted, saying the Justice Department would be wrong to pursue criminal charges based on testimony from Mr. Abramoff. The lobbyist, he said, was "singing for his supper" and making false charges to win leniency from the government.

Mr. Ney is one of several members of Congress who are under scrutiny by the Justice Department because of their ties to Mr. Abramoff and other lobbyists and business executives.

Last week, a Kentucky businessman pleaded guilty to trying to bribe an unnamed House member for help in securing contracts from West African governments. Court papers in that case made it clear that the lawmaker was Representative William J. Jefferson, Democrat of Louisiana, who has denied wrongdoing.

    Ex-Aide With Abramoff Ties Pleads Guilty to Conspiracy, NYT, 9.5.2006, http://www.nytimes.com/2006/05/09/washington/09inquire.html?hp&ex=1147233600&en=365656ea462068b1&ei=5094&partner=homepage

 

 

 

 

 

Defense rests in Enron trial

 

Mon May 8, 2006 11:14 PM ET
Reuters
By Matt Daily

 

HOUSTON (Reuters) - The criminal trial of former Enron Corp. chiefs Ken Lay and Jeffrey Skilling neared its end on Monday, when both defense and prosecution rested in the high-profile corporate corruption case.

The end of testimony came suddenly. The defense announced it had concluded its presentation. Prosecutors put on three rebuttal witnesses and then they too said they were finished.

U.S. District Judge Sim Lake sent the jury home until May 15, when closing arguments will begin.

Prosecutors used one rebuttal witness to attack Lay's character and counter testimony from Lay's witnesses, which included two prominent Houston religious leaders, a former Houston Mayor and the owner of the city's baseball team.

"Under business exigencies, I have known Mr. Lay to not tell the truth," former Enron executive Michael Muckleroy told the jury.

Lay and Skilling, who together built Enron from a quiet pipeline company into an international energy giant, are accused of lying to investors to cover up financial problems at Enron, once the nation's seventh-largest company.

Lay, 64, faces six counts of conspiracy and fraud, and Skilling, 52, faces 28 charges of conspiracy, fraud and insider trading. Both men have denied the charges, and both face decades in prison if convicted.

Lay also faces a second trial that is scheduled to start May 18 before Lake, on four charges that he illegally used bank loans to buy stock on margin.

Enron collapsed into what was then the largest-ever U.S. bankruptcy in December 2001, just four months after Lay reassumed the CEO position that Skilling had held for only six months.

Lay, who grew up in poverty in rural Missouri, had been Enron's lone CEO and chairman since its creation in 1985, until he handed the CEO spot over to Skilling.

The revelation that Enron had hidden billions of dollars in debt in off-balance-sheet partnerships and inflated its profits pushed the company over the edge in a few short weeks, putting thousands of employees out of work and wiping out billions of dollars in retirement pensions.

 

DEFENDANTS PLEASED

Lay said he was pleased with the defense case, and said he expected the jury to rule in his favor.

"We feel real good about where we are right now," he told reporters outside the courthouse. "We think in the end we are going to prevail."

Defense lawyers said they had presented the stronger case, but complained again they believed the government had prevented other former top Enron executives from testifying at the trial by threatening to indict them.

"We wanted these people to come testify. The government just would not let them," Skilling's lawyer Dan Petrocelli said.

Lay's lead lawyer, Michael Ramsey, who returned to the court on Monday after missing several weeks of the trial because of health problems, said Lay had done a good job defending himself on the stand.

"I think that was a battle he won," Ramsey said.

Many legal observers said Lay, long known for his affable and folksy demeanor, appeared surly while testifying, possibly damaging his own defense in the eyes of the jury.

Prosecutors contended Lay and Skilling knew Enron's finances were weak and they approved the use of dubious deals to prop up the books even as they lied to investors.

The two former executives countered that Enron was a healthy company posting strong profits even in its final months, but was brought down by revelations that Chief Financial Officer Andrew Fastow had skimmed millions of dollars from the company.

The defendants said Fastow's actions -- which will send him to jail for 10 years under a plea agreement with prosecutors -- as well as unfair media coverage and weak market conditions all contributed to a "run on the bank" that sapped Enron's liquidity.

Fastow was one of several former Enron executives who struck deals for short prison sentences with the government and testified at the trial against Lay and Skilling.

    Defense rests in Enron trial, R, 8.5.2006, http://today.reuters.com/news/newsArticle.aspx?type=newsOne&storyID=2006-05-09T031437Z_01_N08353899_RTRUKOC_0_US-ENRON-TRIAL.xml

 

 

 

 

 

Moussaoui says he lied about 9/11 involvement, asks to withdraw guilty plea

 

Posted 5/8/2006 4:04 PM ET
USA Today

 

ALEXANDRIA, Va. (AP) — Convicted Sept. 11 conspirator Zacarias Moussaoui says he lied on the witness stand about being involved in the plot and wants to withdraw his guilty plea because he now believes he can get a fair trial.

In a motion filed Friday but released Monday, Moussaoui said he testified March 27 he was supposed to hijack a fifth plane on Sept. 11, 2001, and fly it into the White House "even though I knew that was a complete fabrication."

A federal court jury spared the 37-year-old Frenchman the death penalty last Wednesday. On Thursday, U.S. District Judge Leonie Brinkema gave him six life sentences, to run as two consecutive life terms, in the federal supermax prison at Florence, Colo.

At sentencing, she told Moussaoui: "You do not have a right to appeal your convictions, as was explained to you when you plead guilty" in April 2005. "You waived that right."

She said he could appeal his sentence but added, "I believe it would be an act of futility."

Moussaoui's court-appointed lawyers told the court they filed the motion even though a federal rule "prohibits a defendant from withdrawing a guilty plea after imposition of sentence." They did so anyway because of their "problematic relationship with Moussaoui" and the fact that new lawyers have yet to be appointed to replace them.

    Moussaoui says he lied about 9/11 involvement, asks to withdraw guilty plea, UT, 8.5.2006, http://www.usatoday.com/news/nation/2006-05-08-moussaoui_x.htm

 

 

 

 

 

U.S. Government Will Retry Terror Case in California

 

May 6, 2006
The New York Times
By CAROLYN MARSHALL

 

SAN FRANCISCO, May 5 — Federal prosecutors said Friday that they would retry a California man on charges that he lied to F.B.I. agents about his son's stay at a terrorist training camp in Pakistan.

The man, Umer Hayat, a naturalized American citizen, has been free on bail since Monday after a federal jury in Sacramento deadlocked on the charges against him. A mistrial was declared on April 25, the same day a separate jury convicted his son, Hamid Hayat, of lying to federal agents and providing material support to terrorists by attending a camp of Al Qaeda in 2003.

McGregor W. Scott, a United States attorney in Sacramento, said in a statement on Friday that the severity of the charges against the elder Mr. Hayat, and evidence that included a videotaped confession, warranted a second trial.

"In the post-9/11 environment in which we live, lying to the F.B.I. in the course of a terrorism investigation is serious misconduct," Mr. Scott said. "False information may result in agents losing valuable time to foil a deadly plot, or perhaps bringing the wrong person or persons under suspicion."

The new trial is set to begin June 5 in federal court in Sacramento.

Mr. Hayat's defense lawyer, Johnny Griffin III, said the government's decision to retry his client, who initially volunteered to speak with F.B.I. agents, would not advance its war on terror. "In pursuing this fight, the government needs information, eyes and ears in the community," Mr. Griffin said. "But people will be less apt to talk now."

Mr. Griffin said the government had alienated the Muslim community in its handling of Mr. Hayat's case. "To now go back and retry it sends a message," he said. "If you cooperate and we don't like what you are saying or we don't believe you, we will prosecute."

The jury in the elder Mr. Hayat's trial, which lasted nine weeks, deadlocked 7 to 5 and 6 to 6 on the two counts against him. Umer Hayat, 48, an ice cream vendor, and his son, Hamid, 23, live in Lodi, Calif., a small farming town south of Sacramento.

    U.S. Government Will Retry Terror Case in California, NYT, 6.5.2006, http://www.nytimes.com/2006/05/06/us/06lodi.html

 

 

 

 

 

Former Marine Admits Passing Secret Documents

 

May 5, 2006
The New York Times
By RONALD SMOTHERS

 

NEWARK, May 4 — A former Marine security attachι who worked in the White House in the Clinton and George W. Bush administrations pleaded guilty in federal court to passing top-secret information and documents to political opponents of the current Philippine government.

The former marine, Leandro Aragoncillo, 47, a naturalized American citizen who came to the United States from his native Philippines in 1983, also confessed that he had continued mining top-secret and classified material after leaving the Office of the Vice President in the White House in 2003. He took a job as an intelligence analyst for the Federal Bureau of Investigation in 2004.

Mr. Aragoncillo's illegal activities were uncovered in an audit of his computer use at the bureau after he appealed in March 2005 to immigration officials on behalf of a former Filipino police official who had been detained in New York for overstaying his visa.

He was arrested in September along with the former police official, Michael Ray Aquino, whom the indictment accused of being Mr. Aragoncillo's go-between in the espionage case. Mr. Aragoncillo faces 15 to 24 years in prison when sentenced on Aug. 14.

Mr. Aragoncillo admitted passing documents from White House briefing books, situation reports and other top-secret documents from the F.B.I. computer that contained information like the names of confidential informants in the Philippines.

Other documents provided to unnamed opponents of President Gloria Macapagal Arroyo of the Philippines were described by Mr. Aragoncillo as a "blueprint" of how to stage a military coup that the United States government might support.

"His betrayal is profound and a disservice to his country and all the men and women in military and security positions," said Christopher J. Christie, the United States attorney who prosecuted the case.

Chester Keller, the federal public defender representing Mr. Aragoncillo, said his client never intended to harm the American people and sought only to help the Philippine people.

    Former Marine Admits Passing Secret Documents, NYT, 5.5.2006, http://www.nytimes.com/2006/05/05/washington/05spy.html

 

 

 

 

 

News Analysis

Verdict Highlights Where Juries Fear to Tread

 

May 5, 2006
The New York Times
By ADAM LIPTAK

 

The terrorism trial of Zacarias Moussaoui, built on a novel legal theory, was marked by prosecutorial stumbles and involved a defendant whose conduct throughout seemed a determined effort to dig his own grave.

Yet the case ultimately followed the pattern of most federal capital cases, which usually involve less spectacular crimes and more rational defendants. In those cases, too, juries are reluctant to impose death sentences.

In the 136 capital cases the federal government has brought in the last two decades, 122 convictions have been obtained, according to the Federal Death Penalty Resource Counsel Project, a group that assists lawyers defending federal capital cases. But the juries in those cases imposed death sentences only 49 times.

"Obtaining the death penalty is not easy," said Michael Greenberger, a law professor at the University of Maryland and a terrorism expert who served in the Clinton administration. "If politics had been taken out of this and they weren't looking for a trophy case, they never would have taken this case to the jury."

Mr. Moussaoui is the only person to be tried in an American courtroom in connection with the Sept. 11 attacks. Other men said to be responsible for the attacks are in American custody abroad, and the verdict in the Moussaoui case may make their criminal prosecution less likely.

The Moussaoui jury acted as capital juries typically do. It accepted the government's argument in the abstract, but, when push came to shove, it stopped short of sending the defendant to his death. That pattern may help explain a seeming inconsistency in the jurors' decisions.

The jury first found Mr. Moussaoui, who had already pleaded guilty, eligible for the death penalty on the theory that he had concealed his knowledge of Al Qaeda's plans to use suicide hijackers to fly planes into buildings.

"There has never been a case," said David I. Bruck, a federal capital defense lawyer, "where the connection between the defendant and the killing was anywhere near as weak as here. If this had not been 9/11, the government's theory of liability would not have passed the laugh test."

Having answered the eligibility question, the jury weighed the factors for and against execution. Given the gravity of the crime, that might have seemed the simpler task.

But three of the jurors seemed to contradict their earlier finding, saying in a note they added to the form they handed in on Wednesday that Mr. Moussaoui had only limited knowledge of the Sept. 11 plot.

"Three of the jurors, at least, had buyer's remorse," said Andrew C. McCarthy, a former federal prosecutor who handled terrorism cases in New York in the 1990's.

A jury that actually holds a defendant's life in its hands often flinches, said Robert Weisberg, a law professor at Stanford.

"The nullifying effect of lingering doubt came in, as it does in a lot of capital cases," Professor Weisberg said. "That is the only way to read consistency into an otherwise inconsistent vote by some of them."

State prosecutors who seek the death penalty obtain it about half the time, and federal prosecutors about a third of the time, said Richard C. Dieter, executive director of the Death Penalty Information Center, a research group the opposes capital punishment. That may be a consequence of greater selectivity in the capital cases that state prosecutors choose to bring, of the better financing that federal defense lawyers tend to enjoy and of procedural requirements in the federal system.

Eric M. Freedman, a law professor at Hofstra University who has consulted with Mr. Moussaoui's defense lawyers, cautioned that the case was far from over and predicted a series of appeals.

"There will be a vigorous challenge to the validity of the guilty plea," Professor Freedman said, based on what he called Mr. Moussaoui's lack of mental competence.

He said the defense would also challenge rulings denying a request to call as witnesses the planners of the Sept. 11 attacks who are in United States custody, including Khalid Sheikh Mohammed.

"That's a square violation of the Sixth Amendment," Professor Freedman said, alluding to a criminal defendant's guarantee to "compulsory process for obtaining witness in his favor."

Professor Greenberger said the court that would hear an appeal, the United States Court of Appeals for the Fourth Circuit, in Richmond, Va., would be "completely unsympathetic."

Mr. McCarthy, the former federal prosecutor, said the outcome in the Moussaoui case had demonstrated the inadequacy of the criminal justice system.

"The post-9/11 template, from which this is a departure, is sound," Mr. McCarthy said. "It is a preventive rather than prosecutorial paradigm. It means that the people who are centrally involved in the emergency, or I would say war, you have to treat them as the enemy, not as a criminal."

That would suggest that Mr. Mohammed, for instance, will be held indefinitely rather than tried for his role in the attacks.

Mary Jo White, who co-signed the Moussaoui indictment as United States attorney in Manhattan, said she was disappointed in the jury's actions but "totally respectful" of them. Ms. White added that the jury had shown the justice system in a positive light.

"It sends a very helpful message to the rest of the world about the American judicial system," Ms. White said. "Fairness is paramount. It shows that in a highly charged case such as this, an American jury could reach this verdict."

    Verdict Highlights Where Juries Fear to Tread, NYT, 5.5.2006, http://www.nytimes.com/2006/05/05/us/05assess.html?_r=1&hp&ex=1146801600&en=2c706cc2b24de557&ei=5094&partner=homepage&oref=slogin

 

 

 

 

 

A Last Moment in the Spotlight for Moussaoui

 

May 5, 2006
The New York Times
By NEIL A. LEWIS

 

ALEXANDRIA, Va., May 4 — Judge Leonie M. Brinkema sentenced Zacarias Moussaoui to prison for the rest of his life on Thursday, saying he would be denied his wish to die in a blaze of glory and instead would "die with a whimper."

The courtroom, held under a tight rein during the two-month trial, became a stage for an unexpected outpouring of emotion Thursday as Mr. Moussaoui exchanged barbs with the judge, and family members who lost loved ones excoriated him to his face.

Mr. Moussaoui, in his last chance to be heard in public, delivered a political speech about his hate for America, concluding: "God curse America and save Osama bin Laden. You'll never get him."

Judge Brinkema was clearly angered that when the jury spared Mr. Moussaoui's life on Wednesday, he exulted, "America, you lost," and said he had won.

"Well, Mr. Moussaoui, if you look around this courtroom today, every person in this room when this proceeding is over will leave this courtroom, and they are free to go anyplace they want," she said. "They can go outside, they can feel the sun, they smell fresh air."

But she said that when he walked out of the courtroom: "You will spend the rest of your life in a super-maximum security facility. In terms of winners and losers, it's quite clear who won and who lost."

Mr. Moussaoui shot back, "That was my choice."

"It was hardly your choice," Judge Brinkema retorted.

Judge Brinkema, who had been scrupulous about maintaining a neutral stance during the trial, concluded by saying, "As for you, Mr. Moussaoui, you came here to be a martyr and to die in a great big bang of glory, but to paraphrase the poet T. S. Eliot, instead you will die with a whimper."

Mr. Moussaoui tried to interject again, and Judge Brinkema spoke over him, saying, "You will never again get a chance to speak, and that is an appropriate and fair ending."

Because Judge Brinkema was required to sentence Mr. Moussaoui to life in prison after the jury's decision on Wednesday, there was little suspense, but an abundance of drama. It began when Judge Brinkema asked whether there were any family members of victims of the Sept. 11, 2001, terrorist attacks in the audience who wanted to be heard.

No one responded initially. As the judge prepared to move on, Rosemary Dillard, whose husband died on American Airlines Flight 77 when it crashed into the Pentagon, rose from the audience.

Walking to a lectern a few feet from Mr. Moussaoui, Mrs. Dillard looked at him and said: "I want you, Mr. Moussaoui, to know how you wrecked my life. You wrecked my career. You took the most important person in my life from me."

As Mr. Moussaoui stared back impassively, she continued, "I hope that you sit in that jail without seeing the sky, without seeing the sun, without any contact with the world and that your name never comes up in any newspaper again during the rest of my life."

She then thanked the judge for "what you did," thanked the prosecutors "for what you tried to do," and the court-appointed defense lawyers for "what you had to do."

She was followed to the lectern by Abraham Scott, who lost his wife at the Pentagon on Sept. 11. Mr. Scott told Mr. Moussaoui that "you and all the rest of your colleagues will not deter this country from continuing to enjoy the freedom that it has for the past 200 years." He added that he was confident Mr. bin Laden would eventually be captured and face justice.

Finally, Lisa Dolan told the court that her husband, a naval officer who died at the Pentagon, had served his country to ensure that it maintained the freedom to conduct fair and open trials like the one just concluded. "There is still one final judgment day," Ms. Dolan concluded, staring at Mr. Moussaoui.

Mr. Moussaoui then took the witness stand after Judge Brinkema invited him to speak before he was sentenced. He said he wanted to respond to the family members who had just spoken.

"The first one say that I destroy her life and she lost her husband," said Mr. Moussaoui, whose native language is French. "Maybe one day she can think how many people the C.I.A. have destroyed their life."

He said Americans had "an amount of hypocrisy which is beyond any belief," adding, "Your humanity is a very selected humanity — only you suffer, only you feel."

When Robert A. Spencer, the chief prosecutor, objected that it was inappropriate for Mr. Moussaoui to make a political speech, Judge Brinkema agreed.

Mr. Moussaoui continued, nonetheless, saying, "You have branded me a terrorist or criminal." In fact, he said, he was a soldier in the Islamic cause, and "I fight for my belief."

He said Americans had forfeited an opportunity to use the trial to discover why people like himself and Mohamed Atta, the pilot of one of the hijacked planes of Sept. 11, "have so much hatred for you." Mr. Moussaoui, who was arrested on immigration charges three weeks before Sept. 11, pleaded guilty last year to conspiracy in the attacks.

As he left the courtroom, Mr. Moussaoui repeated his earlier claim that he would be released by President Bush before he left the White House.

"In your dreams!" Lisa Beilke shouted from the spectator section. Mrs. Beilke's husband died in the Pentagon.

Officials said Mr. Moussaoui would soon be transferred to the federal prison in Florence, Colo., used to house the inmates requiring the greatest security. A prison expert testifying for the defense during the trial said that at the prison Mr. Moussaoui would have no contact with others and would be spoken to only sporadically by guards, probably causing him to deteriorate quickly.

    A Last Moment in the Spotlight for Moussaoui, NYT, 5.5.2006,http://www.nytimes.com/2006/05/05/us/05moussaoui.html

 

 

 

 

 

Moussaoui Given Life Term by Jury Over Link to 9/11

 

May 4, 2006
The New York Times
By NEIL A. LEWIS

 

ALEXANDRIA, Va. May 3 — A federal jury rejected the death penalty for Zacarias Moussaoui on Wednesday, with some jurors concluding that he played only a minor role in the Sept. 11, 2001, terrorist attacks.

The verdict, calling for life in prison, seemed to surprise most people in the courtroom, notably Justice Department prosecutors who had relentlessly urged the jurors that Mr. Moussaoui should be executed for his role in the attacks.

Jurors left the courthouse without speaking about their reasoning. But the verdict form they filled out indicated what factors they had considered as they decided Mr. Moussaoui's fate, including his troubled upbringing in a dysfunctional immigrant Moroccan family in France, and extended periods in orphanages.

The decision means that the sole individual charged in a United States courtroom in connection with the worst attack on American soil will spend the rest of his life in solitary confinement in a federal prison in Colorado with no possibility of release.

Mr. Moussaoui, 37, seemed to go numb when Judge Leonie M. Brinkema received the verdict from the jury forewoman, a public school mathematics teacher, and read aloud the part that said, "We the jury, do not unanimously find that a sentence of death should be imposed on the defendant."

Minutes later, however, after the judge and jury had left, Mr. Moussaoui thrust his fists in the air and shouted: "America, you lost, you lost! Novak, I won!"

David J. Novak was one of the three prosecutors who argued the government's case.

Victims' family members reacted with disappointment. [Page A28.]

President Bush expressed sympathy for them and said Mr. Moussaoui had received a fair trial.

Under the federal death penalty law, Judge Brinkema is obliged to impose the sentence chosen by the jury, and she said she would formally sentence Mr. Moussaoui on Thursday morning.

In delivering their sentence, the jurors provided partial clues as to how they came to spare Mr. Moussaoui's life against the expectations of many courtroom spectators, the prosecutors and even some of his court-appointed defense lawyers.

In the complicated 42-page verdict given to Judge Brinkema, the jurors listed how many agreed with each of the more than two dozen mitigating factors put forward by the defense. The form said two mitigating factors drew the greatest agreement, with nine jurors finding that they were valid issues to be weighed in the decision.

The first was that Mr. Moussaoui suffered an "unstable early childhood and dysfunctional family" life, and a hostile relationship with his mother that led to his being placed in French orphanages.

The second factor was that his father "had a violent temper and physically and emotionally abused his family."

Three jurors found that another valid mitigating factor to be weighed against the death and destruction of the Sept. 11 attacks was that Mr. Moussaoui had been subjected to racism in France as a Muslim youth.

Few members of the jury of nine men and three women seemed to have been persuaded by defense lawyers' other major arguments. No one agreed to spare Mr. Moussaoui's life in order to give him the martyrdom that he sometimes suggested he craved, and no one thought that he had schizophrenia, a contested topic in the trial.

Three jurors added their own mitigating factor, writing on the jury form that they believed that Mr. Moussaoui had limited knowledge of the Sept. 11 plot. That meant that they had rejected an important argument of the prosecutors, that Mr. Moussaoui should be held responsible for Sept. 11, even though he was in jail at the time.

Prosecutors repeatedly said that if Mr. Moussaoui had told what he knew to investigators who had arrested him three weeks earlier in Minnesota on immigration charges, the government would have moved swiftly to foil the plot.

"The end of this trial represents the end of this case, but not an end to the fight against terror," Mr. Bush said in a White House statement.

Al Qaeda leaders believed to have planned the attacks were captured overseas and are held by the government in secret prisons. There has been no indication that they will be put on trial.

The general expectation that the jury would sentence Mr. Moussaoui to death arose from the structure of the trial. The same jury ruled unanimously last month in the first phase of the trial that Mr. Moussaoui bore responsibility for the consequences of the Sept. 11 attacks, in essence saying his silence made him guilty.

In the penalty phase, the jury had what seemed a more mathematical calculation, weighing the impact of the crime against the mitigating factors. Before they began deliberations, the jurors heard two weeks of emotional testimony in which victims of the attacks and family members of people killed spoke of their continuing pain and grief.

Because Mr. Moussaoui was in jail on Sept. 11, lawyers and death penalty experts regarded the first phase as the more vexing decision for the jury, while the balancing calculation of the second phase was thought to be more straightforward.

Richard C. Dieter of the Death Penalty Information Center, a research group in Washington that has been critical of the application of the death penalty, said the penalty phase might have been more difficult because the jurors had to face the issue squarely of ordering an execution.

Mr. Moussaoui's lawyers, with whom he does not speak, offered their own explanation for the verdict. In a statement read by one lawyer, Edward B. MacMahon Jr., they attributed the verdict in part to the fact that the family members' testimony came from witnesses called by both sides.

After prosecutors presented some 35 witnesses who often testified through tears, the defense presented 24 witnesses who also offered similar accounts of grief.

Neither group was allowed to testify on their preferences for Mr. Moussaoui's fate. But defense lawyers said they believed that the jurors inferred from their witnesses that some victims were not seeking the death penalty.

"The testimony of family members was immensely personal and also displayed the deep divisions that mark the issue of capital punishment in this country," Mr. MacMahon said. "This is, to our knowledge, the only capital case where victims have testified as witnesses called by the defense. This testimony demonstrated resilience and the possibility of renewal."

He said he had never expected anything but a death sentence.

Robin Theurkauf, who lost her husband in the World Trade Center and testified for the defense , said in an interview she was surprised but gratified by the verdict.

Ms. Theurkauf, a divinity student at Yale, said that by showing the jury that some family members were not seeking Mr. Moussaoui's death, "We may have given them permission to free themselves from a obligation to respond to the massive grief with vengeance. We allowed them to view the case dispassionately."

Carrie Lemack, whose mother, Judy Larocque, was a passenger on a plane that crashed into the World Trade Center, said: "He's going to be in jail for the rest of his life, which is exactly what this man deserves. He deserves to rot in jail."

That the decision was a defeat of sorts for the government was unintentionally underlined by Judge Brinkema, who praised the prosecutors and counseled them not to be disheartened.

"The government wins when justice is done," she said, before lauding the defense lawyers as well.

Paul J. McNulty, the deputy attorney general who supervised the initial case when he was the chief federal prosecutor in northern Virginia, told reporters at the courthouse, "The jury has spoken, and we respect and accept this verdict and we thank them for their service."

The mixed feelings of Jay S. Winuk, whose brother Glenn died at the trade center, seemed to capture many family members' reactions to the jury's decision.

"My brother died, and almost 3,000 other people died, and you just want to scream for justice," Mr. Winuk said.

He said he did not know what the right verdict would have been.

Rosemary Cain, who lost her son George, a New York firefighter, said she heard the verdict on her car radio. "I had a kind of sinking feeling in my stomach," Ms. Cain said. "I was absolutely hoping they would put him to death."

"He is just an empty, empty person," she said. "There are just some people who cannot be rehabilitated."

    Moussaoui Given Life Term by Jury Over Link to 9/11, NYT, 4.5.2006, http://www.nytimes.com/2006/05/04/us/04moussaoui.html?_r=1&hp&ex=1146715200&en=6cb3ee3e04c75d8b&ei=5094&partner=homepage&oref=slogin

 

 

 

 

 

Some 9/11 Families Side With Jury on Moussaoui, but Most Express Regrets

 

May 4, 2006
The New York Times
By MARC SANTORA

 

For the families of those killed on Sept. 11, there are many things they agree on when it comes to Zacarias Moussaoui.

That he is an unrepentant horror of a person is not much in question. They are quick to call his behavior during his trial and sentencing hearing abominable and painful. And most find the fact that he is the only person to be brought to trial after 3,000 people were killed on Sept. 11 a shame.

But should Mr. Moussaoui have been sentenced to death?

On that question, there is no consensus. Even those who agreed with the jury's verdict to spare his life differed as to their reasons.

For some, life in a cell seemed a worse fate than a quick death; others simply do not believe in the death penalty in any case.

Yet others, like Debra Burlingame, whose brother, Charles, was the pilot of the plane that hit the Pentagon, said they were terribly disappointed that Mr. Moussaoui would go on living.

"I totally accept and respect the jury's verdict," Ms. Burlingame said. "But I think it is very dangerous to show compassion to the cruel because they will bring cruelty to the compassionate."

She said she worried that in prison Mr. Moussaoui could provide inspiration for extremists who might stage attacks and demand his release.

"My brother had his throat slit with the very kind of knives that Moussaoui secreted on his person," she said. "It is ridiculous to say that because he was sitting in jail that he was somehow not responsible."

Like many other family members of the victims, Ms. Burlingame followed the case closely, even traveling three times to the Virginia courtroom where the trial was held to watch in person. Although she had not been an avid supporter of the death penalty in the past, fearing that a mistake could be made, she said there was no danger of that happening in this case.

"This guy was absolutely a hard-core terrorist," Ms. Burlingame said.

Mr. Moussaoui testified that he was proud to be a member of Al Qaeda, and he openly mocked the pain of the victims' families.

This behavior hardened the opinion of people like Rosemary Cain, whose son George, a firefighter, was killed that day.

"He would shout to the families, 'Burn in the U.S.A.,' " Ms. Cain said, referring to a courtroom outburst. "I don't think he is worthy to breath free American air."

No doubt, the trial and sentencing hearing were intensely emotional, with the prosecution relying heavily on the testimony of family members of those killed to persuade the jury of the heinousness of Mr. Moussaoui's crimes. For instance, the jury heard about C. Lee Hanson's painful last conversation with his son, who was aboard one of the hijacked planes. And jurors even heard the voices of those doomed to die in the towers as they called 911 asking for help.

But the defense also called family members who opposed the death penalty.

Marian Fontana, whose husband, Dave, a firefighter, died that day, did not testify, but she said she thought the verdict was correct.

"I think if I indulged in hate, I would be similar to him," Ms. Fontana said. "I do not believe in the death penalty. I am just glad he will be spending the rest of his life in jail."

Echoing comments made by many other families, she said she was disappointed that Mr. Moussaoui had been the only person brought to trial.

"I was hoping they would be further along in tracking down lots of terrorists," she said. "Particularly bin Laden."

Alexander Santora, who lost his son Christopher, a firefighter, agreed that there were more important matters to deal with than deciding the fate of Mr. Moussaoui. But he said he believed that Mr. Moussaoui should not have been allowed to live.

"He's going to have the best life he ever had, with three square meals and exercise every day," Mr. Santora said. "He doesn't deserve any compassion. It would be better to pay the 28 cents and put a round in his head."

Still, in a reflection of the range of emotion prompted by the jury's verdict, Mr. Santora's wife, Maureen, was more conflicted.

"I really don't want him to be a martyr," she said of Mr. Moussaoui. "I want him to be forgotten. I want his name to be forgotten in prison, surrounded by the very people he hates and despises."

Sarah Garland and Andrew Jacobs contributed reporting for this article.

    Some 9/11 Families Side With Jury on Moussaoui, but Most Express Regrets, NYT, 4.5.2006, http://www.nytimes.com/2006/05/04/us/04react.html

 

 

 

 

 

Transcript

Announcement of the Verdict

 

May 3, 2006
The New York Times

 

The following is the announcement of the verdict by Edwards Adams, the court public information officer, as provided by CQ Transcriptions, Inc.


Good afternoon. My name is Edward Adams. I'm the court's public information officer.

In the case of United States v. Zacarias Moussaoui, as to count one, conspiracy to commit acts of terrorism transcending national boundaries; and count three, conspiracy to destroy aircraft; and count four, conspiracy to use weapons of mass destruction: The jury has found the defendant should be sentenced to life in prison without the possibility of release.

The jury verdict form does not indicate the number of jurors who voted for a sentence of life or the number of jurors, if any, who voted for a sentence of death. All that the jury was required to report was that they were not unanimous in favor of a sentence of death.

On each of the three counts, the jurors were asked to make findings about aggravating factors, which tend to support a sentence of death, and mitigating factors, which tend to support a sentence of life in prison. Aggravating and mitigating factors which the jurors found to be proven were then weighed by them, assigned whatever weight they deemed appropriate before they determined their sentence.

The aggravating and mitigating factors were identical on all three counts. The jurors' findings on each particular factor were not identical.

I will be reading to you from their findings on the aggravating and mitigating factors on count one. The remainder of their findings will be posted on the court's Web site within the next hour.

The prosecutors put before the jury 10 aggravating factors. For an aggravating factor to be considered by the jury, they had to unanimously find that factor had been proven beyond a reasonable doubt.

These are their findings on the aggravating factors. The jury unanimously found the defendant knowingly created a grave risk of death to one or more persons in addition to the victims of the offense.

The jury unanimously found the defendant committed the offense -- excuse me, let me start again -- the jury did not unanimously find that the defendant committed the offense in an especially heinous, cruel or depraved manner, in that it involved torture or serious physical abuse to the victim or victims.

The jury unanimously found that the defendant committed the offense after substantial planning and premeditation to cause the death of a person or to commit an act of terrorism.

The jury unanimously found that the defendant entered the United States for the purpose of gaining specialized knowledge in flying an aircraft in order to kill as many American citizens as possible.

The jury did not unanimously find that the actions of the defendant resulted in the deaths of approximately 3,000 people.

The jury unanimously found that the actions of the defendant resulted in serious physical and emotional injuries, including maiming, disfigurement and permanent disability to numerous individuals who survived the offense.

The jury unanimously found that as demonstrated by the victims personal characteristics as individual human beings and the impact of their deaths upon their family, friends and coworkers, the defendant caused injury, harm and loss to the victims, their families, their friends and their coworkers.

The jury unanimously found that the government had proven beyond a reasonable doubt that the actions of the defendant were intended to cause -- and, in fact, did cause -- tremendous disruption to the function of the city of New York and its economy.

The jury unanimously found that the actions of the defendant were intended to cause and in fact did cause tremendous disruption to the function of the Pentagon.

The jury unanimously found that the defendant has demonstrated a lack of remorse for his criminal conduct.

Those are the jury's findings on the aggravating factors as to count one.

Defense counsel put before the jury 23 mitigating factors. For the jury to consider a mitigating factor, it had to be proven by a preponderance of the evidence, which is the lower standard than beyond a reasonable doubt, which was used on the aggravating factors.

Also, the jury need not unanimously find that the mitigating factor had been proven. If only one or more jurors found the factor had been proven, they could consider it when determining the sentence.

These are the findings on the 23 mitigating factors. For each, the jury reports the number of jurors who so found it proven.

Five jurors found that if he is not sentenced to death, the defendant will be incarcerated in prison for the rest of his life without the possibility of release.

One juror found that the defendant has maintained a nonviolent record for the past four years while incarcerated in the Alexandria detention center with minimal rules violations.

One juror found that the Federal Bureau of Prisons found has the authority and ability to maintain the defendant under highly secure conditions.

Three jurors found that, given his conduct and the likely conditions of his maximum security confinement, the defendant will not present a substantial risk to prison officials or other inmates if he is sentenced to life in prison without the possibility of release.

No jurors found that a sentence of life in prison without the possibility of release under strict conditions the Bureau of Prisons is likely to impose will be a more severe punishment for the defendant than a sentence of death.

No jurors found that the defendant believes that his execution will be part of his jihad and will provide him with the rewards attendant to a martyr's death.

No jurors found that the execution of the defendant will create a martyr for radical Muslim fundamentalists and to Al Qaida in particular.

Nine jurors found that the defendant's unstable early childhood and dysfunctional family resulted in his being placed in orphanages and having a home life without structure and emotional and financial support, eventually resulting in his leaving home due to his hostile relationship with his mother.

Nine jurors found the defendant's father had a violent temper and physically and emotionally abused his family.

Two jurors found the defendant's father abandoned him and his siblings, leaving his mother to support and raise their children on her own.

Three jurors found that the defendant was subject to racism as a youngster because of his Moroccan background, which affected him deeply.

No jurors found the defendant's mother had a violent uncle or men unrelated to the family living in the home with the family.

Four jurors found the defendant's two sisters and his father all suffered from psychotic illnesses.

No jurors found that, even though the defendant arrived in England with no money and lived in a homeless shelter, he endured the hardship and through perseverance graduated with a Master's degree from South Bank University.

No jurors found that the defendant's mother's failure to provide her children with any meaningful religious training or practice left the defendant without theological or intellectual basis to resist the preachings and propaganda of radical Muslim fundamentalists in London who provided him with a sense of group identity he never had.

No jurors found the defendant suffers from a psychotic disorder, most likely schizophrenia, paranoid subtype.

No jurors found the defendant's role in Al Qaida while in Afghanistan was as a security clerk at a guest house and as a driver for persons staying at the guest house.

No jurors found the defendant's testimony about his plan to fly a plane into the White House is unreliable and is contradicted by his statements about other plots he was involved in.

Three jurors found that the defendant's role in the 9/11 operation, if any, was minor.

One juror found that the defendant was incarcerated on the day of the 9/11 attacks.

No jurors found the defendant was an ineffectual Al Qaida operative.

No jurors found that other persons who were equally culpable in the offense, whether indicted or not, will not be punished by death and/or have not been subject of capital prosecution.

No jurors found that other factors in the background or character of the defendant suggests that life without the possibility of release is the most appropriate punishment.

Under the law, the jurors may also write in mitigating factors they believe have been proven by the evidence but were not suggested to them by defense counsel.

On count one, the jurors wrote in one such factor. They wrote that the defendant had limited knowledge of the 9/11 attack plans. Three jurors found that mitigating factor to have been proven.

The jury's recommendation of a sentence of life in prison without the possibility of release is binding on the judge, who will sentence the defendant at 10 a.m. tomorrow.

    Announcement of the Verdict, NYT, 3.5.2006, http://www.nytimes.com/2006/05/03/us/02text-mouss.html

 

 

 

 

 

Judge doesn't believe Moussaoui

 

Updated 5/3/2006 9:19 AM ET
USA Today

 

ALEXANDRIA, Va. (AP) — The judge presiding over Zacarias Moussaoui's sentencing told trial lawyers that she doesn't believe Moussaoui's claims on the witness stand that he knew advance details of the Sept. 11 plot.

"I still think that Moussaoui was not accurate in a lot of what he said about how much he knew about what was going to happen with which particular buildings and when," U.S. District Judge Leonie Brinkema said during a closed hearing on April 21 outside the jury's presence. Transcripts of the hearing were released Tuesday.

Moussaoui's bombshell testimony on March 27, in which he took the stand against the advice of his court-appointed lawyers and claimed a direct role in the 9/11 plot after years of denial, revived a moribund prosecution case. Defense attorneys have argued that Moussaoui lied on the stand either to inflate his role in history or antagonize the jury into making him a martyr through execution.

Specifically, Moussaoui claimed that he and would-be shoe bomber Richard Reid were to have flown a fifth plane on 9/11 into the White House, and that he also knew the World Trade Center towers were targeted.

Brinkema made her comment during a debate over jury instructions. She defended a technical ruling in favor of the defense as a way of "evening the playing field" in response to her concerns about Moussaoui's testimony.

Even though jurors have no way of knowing about Brinkema's editorial comment presuming they obey rules against following news coverage, prosecutor David Novak objected to her remark.

"With all due respect, that's the jury's decision to decide whether they found him to be credible or not," Novak told Brinkema.

A separate transcript released Tuesday revealed that defense attorneys tried unsuccessfully to remove a juror from the panel after she expressed fears that the media would harass her after the trial concludes.

The unidentified female juror said that a coworker had deduced she was on the panel even though the jury is anonymous. She also said during the April 17 hearing — before deliberations began — that she fears losing her privacy.

Defense lawyers said she should be replaced because her fears might influence her decision, but Brinkema kept the juror on the panel after she said her concerns would not affect her decision.

Meanwhile, the jury began a seventh day of deliberations Wednesday to decide whether the Sept. 11 conspirator should be sentenced to death or life in prison.

The nine men and three women have so far deliberated more than 35 hours. The jury does not plan to deliberate on Thursday afternoon and Friday so that one juror can attend his parents' 50th wedding anniversary and another can attend a school ceremony for his daughter.

Moussaoui is the only person charged in this country in the Sept. 11 attacks. The jury previously found Moussaoui eligible for execution after more than 16 hours of deliberations in late March and early April.

Although he was in jail on immigration violations on Sept. 11, the jury ruled that lies he told federal agents the month before the attacks kept them from identifying and stopping some of the hijackers.

    Judge doesn't believe Moussaoui, UT, 3.5.2006, http://www.usatoday.com/news/nation/2006-05-03-moussaoui_x.htm

 

 

 

 

 

19 Months More in Prison for Professor in Terror Case

 

May 2, 2006
The New York Times
By JENNIFER STEINHAUER

 

TAMPA, Fla., May 1 — Although the United States government lost most of its case last year against Sami Al-Arian, the former computer science professor it once identified as the linchpin in a terrorist organization, a federal judge sentenced him on Monday to an additional 19 months in prison before he is deported.

The case against Mr. Al-Arian, a Palestinian born in Kuwait, stemmed from a decade-long investigation that resulted in a 2003 indictment, charging him with being the leader of a domestic cell of the Palestinian Islamic Jihad, a group that claims responsibility for terrorist acts. He has remained in jail since his indictment.

Mr. Al-Arian, who had been under surveillance by American intelligence officials since 1991, was accused of raising money for suicide bombings in and around Israel.

The six-month trial, a centerpiece of the Bush administration's antiterrorism efforts that attracted the intense interest of legal experts, ended in December when the anonymous jury acquitted Mr. Al-Arian of 8 of the 17 federal charges against him, deadlocking on the rest.

Rather than face a retrial, the two sides agreed last month to a plea bargain in which Mr. Al-Arian pleaded guilty to a lesser charge of aiding members of the militant Palestinian group and agreed to be deported.

But any hope Mr. Al-Arian might have had of being deported quickly evaporated on Monday in the courtroom of Judge James S. Moody Jr. of Federal District Court. In a surprise move, Judge Moody sentenced Mr. Al-Arian to the maximum allowed under the sentencing guidelines, more than even the prosecution requested, and chided him for acts even the jury had rejected as Mr. Al-Arian's. The government had asked for the low end of the guidelines.

The judge continued to upbraid Mr. Al-Arian, whom he called a "master manipulator" for his connections to the Palestinian group, leading Mr. Al-Arian's wife to leave in tears.

Describing horrific bombings in Israel, Judge Moody said: "Anyone with even the slightest bit of human compassion would be sickened. Not you. You saw it as an opportunity to solicit more money to carry out more bombings."

He added, "The only connection to widows and orphans is that you create them."

Paul Perez, the United States attorney for the Middle District of Florida, called Mr. Al-Arian a "dangerous human being" and said he had no regrets about the way the case was prosecuted.

Mr. Perez's court appearance on Monday was his first in the case in four years. He painted the outcome as a victory for the government because it "identified and dismantled a cell that Al-Arian helped establish."

Nonetheless, the jury verdict, which embarrassed prosecutors who had devoted considerable resources to the case, underscored the complexities of obtaining convictions under the USA Patriot Act and other recent laws that criminalized aiding organizations that the United States has deemed to be based on terror.

For example, in the 30 previous efforts to convict a defendant of conspiring to contribute money to a terrorist organization — one of the charges against Mr. Al-Arian — 28 were dismissed, according to the Terrorism Research Center at the University of Arkansas.

"This case almost reached the level of seditious conspiracy," Brent Smith, director of the center, said. "And historically, we have been very unsuccessful at trying those cases."

Indeed the outcome of the case against Mr. Al-Arian did little to resolve the conflicting portraits of his life. His supporters described Mr. Al-Arian, 48, as a political scapegoat who merely aided women and children who had been harmed in the Middle East. They said he was a thoughtful advocate for Palestinians who were unaware of or unwilling to accept the violent acts of organizations he assumed were simply providing aid to countrymen.

Former Attorney General John Ashcroft and local officials described Mr. Al-Arian as a supporter of terror whose motives and beliefs were elucidated through his own words and deeds. Prosecutors said he helped finance activities like a suicide bombing at an Israeli bus stop in 1995 that killed 19 people.

In brief remarks before the court, Mr. Al-Arian painted himself on Monday as a patriot who was pleased to have raised five children in the United States, and grateful to its legal system.

"This process affirmed my belief in the true meaning of the democratic society," he said, as his wife, dabbing her eyes, looked on from the courtroom.

After the sentencing, Mr. Al-Arian's supporters, who had lined up for a space in the courtroom, denounced the judge's action. They included clergy members from Christian and Muslim groups, family members and advocates for Islamic causes.

"I have been visiting with Sami Al-Arian every week in the jail for the last 14 months," said the Rev. Warren Clark, the pastor of the First United Church of Tampa. "I will tell you that the Sami Al-Arian that I know is very different from the Sami Al-Arian the judge described."

It is unclear what country will agree to take Mr. Al-Arian when he is deported. He was reared in Egypt, but has spent the last 30 years in the United States.

    19 Months More in Prison for Professor in Terror Case, NYT, 2.5.2006, http://www.nytimes.com/2006/05/02/us/02islamic.html

 

 

 

 

 

Father Charged in U.S. Terror Probe Freed

 

May 1, 2006
By THE ASSOCIATED PRESS
Filed at 11:50 p.m. ET
The New York Times

 

SACRAMENTO, Calif. (AP) -- A man whose son was convicted of supporting terrorism by attending an al-Qaida camp in Pakistan was released Monday after nearly a year in federal custody.

Umer Hayat, a 48-year-old ice cream vendor, had been held since he and his son, Hamid, were arrested last June.

Umer Hayat was charged with two counts of lying to the FBI about his son's attendance at the training camp, but his case ended in a mistrial last week after the jury said it was deadlocked.

Prosecutors and defense lawyers will return to court Friday to determine whether he should face a new trial.

Last week, a U.S. district judge lowered Umer Hayat's bail from $1.2 million to $390,000, paving the way for his release.

Hayat, a naturalized U.S. citizen, walked out of the federal courthouse with his lawyer, Johnny Griffin III. Shortly before his release, he learned that his father had died Saturday afternoon.

''We stand here with a very heavy heart right now,'' Griffin said. ''It's a bittersweet moment right now. His father tried to hang on.''

Griffin declined to let his client speak to reporters.

Umer Hayat will be under house arrest in the agricultural town of Lodi and was fitted with an electronic monitoring device.

A separate jury last week convicted Hamid Hayat, 23, of one count of providing material support to terrorists and three counts of lying to the FBI.

He faces a maximum of 39 years in prison when he is sentenced July 14. His attorney, Wazhma Mojaddidi, is seeking a new trial.

Both men had given videotaped confessions to FBI agents that were played to jurors. Defense lawyers said their clients gave the confessions after they were worn down by hours of questioning and were merely responding to leading questions by FBI agents.

    Father Charged in U.S. Terror Probe Freed, NYT, 1.5.2006, http://www.nytimes.com/aponline/us/AP-Terror-Probe.html?_r=1&oref=slogin

 

 

 

 

 

Prosecutors: Suspects Shot 'Casing Videos'

 

April 29, 2006
By THE ASSOCIATED PRESS
Filed at 1:24 a.m. ET
The New York Times

 

NEW YORK (AP) -- Two men charged last week in a terrorism case traveled to Washington to shoot ''casing videos'' of the Capitol building and other potential targets, a prosecutor said.

Prosecutors leveled the new allegations against Ehsanul Islam Sadequee and Syed Haris Ahmed at a bail hearing Friday. They also challenged a Brooklyn magistrate's earlier decision to release Sadequee to house arrest at his mother's residence in Roswell, Ga., on $250,000 bail.

U.S. District Judge Sandra Townes reversed that ruling and ordered Sadequee, 19, held without bail after citing a pretrial report detailing the defendant's ties to Bangladesh, where he lived for the past several months and has a new bride.

''I feel that the risk of flight is just too great,'' Townes said.

Sadequee, 19, a U.S. citizen who grew up near Atlanta, is accused of lying to federal authorities amid an ongoing FBI terrorism investigation. He was jailed in Brooklyn on Saturday following his extradition from Bangladesh.

An FBI agent's affidavit accuses Sadequee and Ahmed, a 21-year-old Georgia Tech student, of meeting with at least three other targets of the FBI probe during a trip to Canada in March 2005. The men discussed attacks against oil refineries and military bases and planned to travel to Pakistan to get military training at a terrorist camp, investigators allege.

About a month after the men returned from Canada, they ''went to Washington D.C. for the purpose of making a series of videos -- we call them 'casing videos,''' prosecutor Colleen Kavanagh alleged Friday.

The pair made tapes of the Capitol, the World Bank, the Masonic Temple and a fuel depot in the Washington D.C. area that were to be shipped to ''overseas brothers,'' the prosecutor said.

Defense attorney Doug Morris argued that Sadequee, though charged with making false statements, is technically not facing terrorism charges. He also labels his client's capture and extradition from Bangladesh ''reverse rendition'' -- a spin on ''extraordinary rendition,'' or the strategy of transferring terrorism suspects to third countries for interrogations.

Ahmed, who was indicted on suspicion of giving material support of terrorism, was being held at an undisclosed location. His court-appointed lawyer could not be reached for comment Friday evening.

    Prosecutors: Suspects Shot 'Casing Videos', NYT, 29.4.2006, http://www.nytimes.com/aponline/us/AP-Terrorism-Arrests.html

 

 

 

 

 

Lay Loses His Cool on Stand

 

April 27, 2006
The New York Times
By ALEXEI BARRIONUEVO and SIMON ROMERO

 

HOUSTON, April 26 — After waiting 13 weeks to respond to his accusers, Kenneth L. Lay lost his legendary cool on the witness stand Wednesday.

Just minutes into his cross-examination by a prosecutor, John Hueston, Mr. Lay, Enron's founder and former chief executive, testily accused Mr. Hueston of personally preventing him from repaying a company credit line Mr. Lay had used to shore up his personal finances.

"Mr. Hueston, you know you blocked it," Mr. Lay said, his voice booming. "It's a simple answer."

Mr. Lay also struggled Wednesday to restrain his agitation when Mr. Hueston suggested that Mr. Lay had tried to tamper with potential government witnesses.

Before he took the stand, a number of legal experts had predicted that Mr. Lay would use the same folksy charm he employed during his heyday as the public face of Enron to seek to win over the 12 jurors deciding his fate in the criminal fraud trial here. But during his three days so far as a witness, Mr. Lay has found it harder and harder to maintain a kindly grandfatherly image.

Instead, Mr. Lay, 64, has become increasingly agitated, at times reacting impatiently even to his own lawyer, George McCall Secrest Jr., and lashing out at what Mr. Lay portrayed as a cabal of former Enron executives, investors and journalists whom he repeatedly blamed for the company's downfall in late 2001.

The contrast to his fellow defendant, Jeffrey K. Skilling, was particularly striking. Despite a much harsher reputation for arrogance, Mr. Skilling, in his two weeks on the stand, generally maintained his composure with only a few exceptions.

In the first 90 minutes of a cross-examination that is expected to continue at least to Monday, Mr. Lay also found himself on the defensive over a matter that tripped up Mr. Skilling as well. Mr. Lay acknowledged that he had violated Enron's code of ethics by investing $120,000 in Photofκte, the same photo-sharing company that Mr. Skilling had supported, in part because it was run by Mr. Skilling's girlfriend at the time.

In testimony critical to his defense, Mr. Lay also insisted on Wednesday that he borrowed $77.5 million from Enron in the months before it collapsed to pay personal bank debts, not because he knew that the company was about to implode. Mr. Lay was under pressure to repay the loans from banks, which were issuing margin calls because of Enron's falling stock price. The margin calls required Mr. Lay to pay his debt in cash or face the prospect that the banks would sell the Enron shares he was using as collateral. He was seeking to counter government suggestions that his stock sales showed he knew Enron had serious problems.

Mr. Lay said Wednesday that he was "fighting off bankruptcy myself" at the time.

Mr. Lay boiled over even before Mr. Hueston began his cross-examination Wednesday. In a long discussion of his deteriorating personal financial situation, Mr. Lay lashed out when questioned by Mr. Secrest about efforts Mr. Lay said he had made to repay several million dollars owed on an Enron credit line.

Mr. Lay testified that he used the final $1 million he borrowed from the line, which was backed by his Enron shares, to pay the mortgage on his $4 million Houston condominium. At the time plaintiffs' lawyers were seeking to freeze the assets of Enron executives and, Mr. Lay said, he was concerned that he would be "left without a place to live." Mr. Lay said he tried to work out a deal with Enron's creditors after the company declared bankruptcy. When asked by Mr. Secrest why a deal was not consummated, Mr. Lay nearly jumped out of the witness box.

"It was not finished because John Hueston blocked that deal," he said loudly as he pointed with an outstretched arm at Mr. Hueston.

When Mr. Hueston took over, he challenged Mr. Lay over whether he had ever repaid the last $7.5 million he owed on the Enron credit line, evoking a response that it was the prosecutor himself who had prevented him from paying the debt.

When Mr. Hueston pressed, Mr. Lay retorted: "Mr. Hueston, when I was sworn in here it was to tell the whole truth, not just in part."

Mr. Hueston then drew Mr. Lay's ire by asking him about efforts to reach out to potential government witnesses and what the prosecutor described as "character assassination" of government witnesses.

Mr. Lay, his voice rising, responded, "Are you considering yourself?"

Mr. Hueston questioned Mr. Lay about comments by Mr. Lay's lawyers, who described the former Enron treasurer, Ben F. Glisan Jr., as a "monkey" and a "liar" to reporters after Mr. Glisan testified last month about fraudulent activities at Enron. "I can't take full responsibility for what my attorneys do," Mr. Lay said.

Mr. Lay acknowledged that he had tried to meet with some of the witnesses against him, including Vincent J. Kaminski, the former Enron risk management specialist. Under questioning, Mr. Lay said he sought Mr. Kaminski out in a bid to arrange a private chat over coffee just nine days before he testified in the government's case.

Mr. Hueston also suggested that Mr. Lay was trying to tamper with a witness when he spoke with an executive and longtime friend in the Houston office of Goldman Sachs, which was one of Enron's most prominent former investment banks. Mr. Hueston asked whether Mr. Lay was trying to "recruit people" at the bank to convey Mr. Lay's version of events in the trial, a suggestion that Mr. Lay angrily denied.

Earlier Wednesday, Mr. Lay described the deterioration of his personal finances, saying his net worth had dwindled to "about a quarter of a million dollars negative." Mr. Lay earned $223 million in total compensation from 1999 to 2001 but was $100 million in debt by early 2001, he said.

"Where does $100 million go?" Mr. Secrest asked.

Mr. Lay said he was forced to sell his three homes in Aspen, Colo., and three others in Galveston, Tex., to pay legal fees and other debts. What remains are his Houston condominium and three cars. But he acknowledged that he had lived very well for a long time.

"Happily," he said, "we achieved the American dream."

That comment drew a muffled laugh from a spectator in the courtroom, which was packed with ordinary Houston citizens on Wednesday.

Mr. Lay said his investment advisers and his wife had urged him to diversify his holdings — roughly 80 percent of his net worth was tied up in Enron shares or stock options. "But very simply," he testified, "I had great confidence in Enron and Enron stock."

    Lay Loses His Cool on Stand, NYT, 27.4.2006, http://www.nytimes.com/2006/04/27/business/businessspecial3/27enron.html

 

 

 

 

 

Guilty Verdicts in New Jersey Worker-Safety Trial

 

April 27, 2006
The New York Times
By DAVID BARSTOW

 

A federal jury found a New Jersey pipe foundry and four of its managers guilty yesterday of conspiring to evade workplace safety and environmental laws by lying to regulators, tampering with evidence and bullying employees into silence about dangerous working conditions. One manager was acquitted.

The foundry, Atlantic States Cast Iron Pipe Company, is owned by McWane Inc., an Alabama-based conglomerate with an extensive record of safety and environmental violations. Yesterday's verdict marks the fifth time a McWane plant has been found guilty of federal crimes since The New York Times published a series of articles in 2003 about McWane's safety and environmental record.

In the four previous cases, McWane was ordered to pay a total of $19 million in fines and restitution, and several current or former managers were fined or sentenced to probation. The Atlantic States verdict is likely to bring many millions more in criminal fines; Atlantic States was found guilty on 32 of 34 counts. The four managers, all found guilty of multiple felony charges, face possible prison terms.

In a written statement, the company predicted "ultimate vindication" on appeal. "This was a case where the sheer number of accusations by the prosecutors trumped the lack of evidence," the statement said.

The trial marks the first test of a new federal effort to prosecute employers who repeatedly put workers at risk by violating safety and environmental laws. Such prosecutions are a rarity, in part because workplace safety laws carry relatively weak criminal sanctions. But the new approach, which combines the resources of the Occupational Safety and Health Administration, the Environmental Protection Agency and the Justice Department, seeks to marshal a spectrum of existing laws with stiffer penalties.

"Today's sweeping verdicts demonstrate beyond any reasonable doubt that McWane is one of the worst and most persistent violators of our nation's environmental and worker safety laws," David M. Uhlmann, chief of the Justice Department's environmental crimes section, said in an interview. The case represented the most serious confrontation yet between McWane and the Justice Department.

Prosecution witnesses, including several former foundry supervisors, depicted a brutal and dangerous workplace at Atlantic States, in Phillipsburg, N.J. They told of rigged smokestack tests, of polluted wastewater dumped under cover of night, of regulators stalled at the front gate while flagrant safety violations were hidden. Workers, they said, were blamed for accidents even when shoddy equipment or inadequate training was the real cause. Prosecutors called it "the McWane way."

"Welcome to Atlantic States, a division of McWane, where production is priority number one — everything else is incidental," Norv McAndrew, an assistant United States attorney.

Defense lawyers were no less critical of the Justice Department, contending that a sloppy and overzealous prosecution had used trickery and intimidation to squeeze false testimony from unreliable witnesses. One prosecution witness, they said, repeatedly used false identification, to the point of lying about his name in a prior court case. Another prosecution witness, they argued, lied about the date of his father's death to make the company seem more heartless in denying him time off work.

"When they took the oath in the courtroom, you could almost see the Bible trying to crawl out from underneath their hands," John C. Whipple, a defense lawyer, said.

Two incidents framed much of the trial testimony. The first concerned the foundry's response when environmental officials showed up one weekend day in 1999 to investigate the cause of an 8.5-mile oil slick on the Delaware River. The second focused on the actions of foundry managers after an employee was run over by a forklift and killed in 2000.

In both cases, prosecutors said, top foundry managers conspired to obstruct official investigations. "There was an implicit agreement between all of them," Mr. McAndrew said, "to work together for the common goal, and that goal was to deceive. That goal was to lie."

    Guilty Verdicts in New Jersey Worker-Safety Trial, NYT, 27.4.2006, http://www.nytimes.com/2006/04/27/us/27mcwane.html

 

 

 

 

 

Grand Jury Gets Rove Testimony Over C.I.A. Leak

 

April 27, 2006
The New York Times
By ANNE E. KORNBLUT

 

WASHINGTON, April 26 — Karl Rove, the senior counselor to President Bush, testified for several hours on Wednesday before the federal grand jury in the C.I.A. leak case, in an appearance that was a sign of renewed attention by the special prosecutor in a matter that has lingered unresolved for months.

It was the fifth time Mr. Rove has appeared before a federal grand jury in the case. The appearance came at a politically sensitive time for Mr. Rove, who was relieved of his policy portfolio at the White House in a staff reshuffling earlier this month and now faces the challenge of helping Republicans maintain their primacy in the midterm elections this fall.

Mr. Rove last appeared before the grand jury in October, and his lawyer has said he is not a major figure in the leak inquiry and will ultimately be exonerated.

To date, the only criminal charges in the case, which involves the exposure of a C.I.A. operative's identity, have been brought against I. Lewis Libby Jr., the former chief of staff to Vice President Dick Cheney, who was charged with lying and obstruction last November and is preparing for trial. The prosecutor, Patrick J. Fitzgerald, has declined to comment on Mr. Rove's status, saying publicly only that he is continuing to explore outstanding issues in the case.

The White House declined to comment on Wednesday about Mr. Rove's appearance. White House officials have said the recent personnel moves inside the West Wing have been unrelated to Mr. Rove's legal status. It was unclear on Wednesday whether the decision by the new chief of staff, Joshua B. Bolten, to remove domestic policy from Mr. Rove's portfolio preceded the scheduling of his latest grand jury testimony.

On Wednesday, Mr. Rove spent about four hours inside the federal courthouse after entering through a side door shortly before 12:30 p.m. He emerged beaming as usual at the end of his testimony. He declined to comment, but his lawyer, Robert D. Luskin, issued a statement declaring that Mr. Rove had testified "voluntarily and unconditionally" about "a matter" that had arisen since Mr. Rove's last grand jury appearance.

The unresolved matter appears to involve the testimony of Viveca Novak, a former reporter at Time magazine, who told Mr. Fitzgerald last fall that she may have unwittingly helped Mr. Rove by telling Mr. Luskin he had played a bigger role in the case than he had initially admitted. Since Mr. Libby's indictment, Mr. Fitzgerald has summoned both Ms. Novak and Mr. Luskin to provide grand jury testimony about their conversations, and he also summoned Bob Woodward of The Washington Post to discuss conversations related to the C.I.A. leak matter with an administration official who has still not been publicly identified.

Mr. Rove's appearance suggests that Mr. Fitzgerald remains interested in learning more about why, in his initial testimony to the grand jury, in February 2004, Mr. Rove failed to disclose that he had ever discussed the issue of Valerie Wilson, the C.I.A. operative, with any reporters. Mr. Rove came forward months later to change his story, acknowledging that he had a phone conversation with Matthew Cooper of Time magazine in the summer of 2003 that eventually turned to the subject of Ambassador Joseph C. Wilson IV, the C.I.A. operative's husband. Mr. Rove said he had forgotten the call, one of hundreds he participates in each day.

Lawyers for Mr. Rove have maintained that he will be exonerated in the case, in part because he volunteered details of his conversation with Mr. Cooper.

Since then, however, Ms. Novak, who worked alongside Mr. Cooper at the magazine, has said that she told Mr. Rove's lawyer, in several conversations in early 2004, that she believed his client had been a source for Mr. Cooper.

Ms. Novak said the lawyer, Mr. Luskin, appeared surprised to hear of Mr. Rove's involvement, raising questions about whether Ms. Novak effectively tipped off Mr. Rove to come forward with evidence about himself.

In a telephone interview on Wednesday, Ms. Novak, who no longer works for Time, said she had not had any contact with Mr. Fitzgerald since her deposition in December. She left the magazine after a dispute over her role in the case, taking a buyout package last month. Mr. Cooper also recently moved from his position as a White House correspondent to become the political editor of the magazine's Web site.

Mr. Fitzgerald, continuing to conduct the case in the utmost secrecy, did not comment about calling Mr. Rove to testify, and no one involved in the case said they clearly understood its status. It did not appear that there would be any immediate resolution for Mr. Rove, who has spent months defending himself against assertions that his legal troubles are distracting him from his White House duties.

Potentially complicating the case further still is the criminal trial of Mr. Libby, scheduled to begin early next year. The pretrial activity by Mr. Libby and Mr. Fitzgerald has raised several significant political and substantive questions, including whether Mr. Bush may have played a role in authorizing the leak of classified material.

Mr. Libby has pleaded not guilty and is expected to call Mr. Rove, among other witnesses.

According to court documents filed by the prosecutor, Mr. Libby has testified that Mr. Cheney told him the president had authorized the release of some information contained in a classified National Intelligence Estimate chronicling the efforts of Saddam Hussein to purchase uranium from Niger. That revelation has thrust both the president and vice president into the center of the leak case, which had otherwise simmered at lower levels of the administration since 2003.

Even before Mr. Rove arrived at the courthouse, Democrats pounced on the turn of events, one of several controversies they hope to capitalize on in the fall elections.

"This additional Rove visit clearly shows that the Plame investigation is far from over and that Patrick Fitzgerald is living up to his reputation as an impartial, dedicated prosecutor determined to turn over every stone," Senator Charles E. Schumer said in a statement.

No one has been charged with the underlying crime of revealing classified material. Mr. Fitzgerald is seeking to establish whether any crimes were committed with the disclosure of Mrs. Wilson's identity, which first appeared in a column by Robert D. Novak — no relation to Ms. Novak — in July 2003. The identity of Mr. Novak's original source for the column that triggered the entire case is still unknown, at least to the public. Mr. Novak has testified to the grand jury since Mr. Rove's last appearance in October 2005.

    Grand Jury Gets Rove Testimony Over C.I.A. Leak, NYT, 27.4.2006, http://www.nytimes.com/2006/04/27/washington/27inquire.html?hp&ex=1146196800&en=ccda672cc3200db7&ei=5094&partner=homepage

 

 

 

 

 

Federal Victory in Terror Case May Prove Brief, Experts Say

 

April 27, 2006
The New York Times
By JOHN M. BRODER

 

LOS ANGELES, April 26 — Despite predictions that their victory might not hold up on appeal, federal prosecutors on Wednesday savored their victory in a Sacramento courtroom, where a jury a day earlier convicted an American born in Pakistan of providing support to a terrorist group and lying to investigators.

McGregor W. Scott, the United States attorney who oversaw the prosecution, said in a telephone interview Wednesday that the conviction of the man, Hamid Hayat, 23, showed that the government was capable of winning a jury trial on terrorism charges after a number of high-profile failures elsewhere.

"In this post-9/11 context, those of us in law enforcement have been tasked with preventing new acts of terrorism, trying to stop something from happening, rather than after the fact trying to establish what happened," Mr. Scott said. "This is a difficult task and a new mission. We have shown in this case and this trial and conviction that we can succeed in that mission."

But legal experts said the prosecution's celebration might be short-lived because a federal appeals court had twice ruled unconstitutional some aspects of the law on which Mr. Hayat was convicted. They also said Mr. Hayat's reported confessions to F.B.I. agents could be challenged on the ground they were coerced from a frightened suspect with a limited command of English.

Mr. Hayat's lawyer, Wazhma Mojaddidi, told reporters after the verdict on Tuesday that she would appeal, citing unspecified "outside influences" that affected the jury. She did not return telephone calls on Wednesday seeking comment.

Eric M. Freedman, a constitutional law expert at Hofstra University who has consulted with defense lawyers in terrorism cases, said the government's record of prosecuting terror cases since the attacks of Sept. 11, 2001, had been mixed, in part because several cases hinged on confessions rather than hard evidence.

"This conviction bears all the hallmarks of one that is eventually overturned as being unsupported," Professor Freedman said.

A potentially greater threat to the conviction lies in the statute on which Mr. Hayat was charged, which makes it a crime to provide "material support" for a terrorist group.

The government charged that Mr. Hayat attended a terrorist training camp in Pakistan in 2003 or 2004, returning to the United States in the spring of 2005 with the intent of waging religious war. Upon his return, he was arrested and questioned. The government said he lied repeatedly to the F.B.I. about his training and intentions before confessing to plotting against the United States.

The government never presented evidence that Mr. Hayat had participated in or planned any terrorist act. His crime, apart from lying to investigators, was providing support to violent extremist groups by attending their training camp.

That law has helped win convictions in the so-called Lackawanna Six terrorism case and the prosecution of John Walker Lindh, the American who fought alongside the Taliban in Afghanistan. But prosecutions based on the law collapsed in Tampa, Fla., where a jury last year acquitted a former professor charged with supporting extremist Palestinian groups, and in Idaho, where a college student was acquitted two years ago after being accused of aiding terrorists in Chechnya and Israel.

David Cole, a Georgetown University law professor and critic of the administration's application of antiterrorism laws, said that charging people under the material-support provision of a federal law was a "thin reed" on which to base prosecution.

"It's a conviction," Professor Cole said of the Hayat case, "and to that extent it's a victory for the government. But has this made the United States one iota safer? I don't see any evidence of it. This is very likely to be overturned on appeal."

Professor Cole said the United States Court of Appeals for the Ninth Circuit, which sits in San Francisco and covers the Sacramento federal court district, had twice ruled the material-support law unconstitutionally vague because it did not require proof of any overt act.

The government also charged Mr. Hayat's father, Umer Hayat, 48, an ice-cream truck driver in Lodi, Calif., of lying to investigators to conceal his son's activities. A separate jury deadlocked on two charges against the father, and the judge declared a mistrial. Mr. Scott said he had not decided on a new trial.

    Federal Victory in Terror Case May Prove Brief, Experts Say, 27.4.2006, http://www.nytimes.com/2006/04/27/us/27verdict.html?_r=1&oref=slogin

 

 

 

 

 

A Mistrial for a Father, but a Son Is Guilty

 

April 26, 2006
The New York Times
By RANDAL C. ARCHIBOLD and JEFF KEARNS

 

SACRAMENTO, April 25 — A federal jury on Tuesday convicted a 23-year-old Pakistani-American on terrorism charges hours after a mistrial was declared in the case of his father, who had been charged with lying to investigators to conceal his son's activities.

The younger defendant, Hamid Hayat, showed no emotion as Judge Garland E. Burrell Jr. of Federal District Court read the jury's verdict after nine days of deliberation. Mr. Hayat was arrested in June 2005 and charged with providing material support of terrorism and lying about it after investigators said he attended a camp run by terrorists in Pakistan sometime between October 2003 and November 2004.

A separate jury reported that it was deadlocked after eight days of considering the case against his father, Umer Hayat, 48, an ice cream truck driver. Judge Burrell dismissed the jurors, and prosecutors said they had not decided whether to retry him.

The case arose from an investigation of the small Muslim community in the nearby farming town of Lodi, where, after the Sept. 11 attacks, investigators suspected men were financing terrorist groups abroad and recruiting members.

But the Hayats, both United States citizens of Pakistani descent, were the only people charged, and the government never revealed what, if any, was the specific plot. Instead, it portrayed the arrests as a preventive measure so that Hamid Hayat, who prosecutors said was committed to jihad, or holy war, could not carry out any orders.

"Today's verdict makes clear that we can prevent acts of terrorism by winning convictions against those who would plot to commit violence against our citizenry in the name of an extremist cause," McGregor W. Scott, the United States attorney here, said in a statement.

The conviction of the younger Hayat surely relieved prosecutors, who found their case criticized by defense lawyers and some legal analysts as built on troubled evidence, even though it was heralded after the Hayats were arrested as an important step in averting a possible attack.

The case relied heavily on a paid informant for the Federal Bureau of Investigation whose credibility came under question during the trial and videotaped interrogations of the Hayats without their lawyers present and in English, which both speak with difficulty. The men confessed in those interviews, but defense lawyers attacked them as filled with leading questions and said they were done under duress.

"It seems the government is somewhat vindicated," said Carl W. Tobias, a University of Richmond law professor who had tracked terrorism cases and had expressed concern about some of the evidence in the Hayat cases.

Attorney General Alberto R. Gonzales issued a statement that said, in part, "the country is a safer place" because of the conviction. He did not address the mistrial of the father.

Wazhma Mojaddidi, Hamid Hayat's lawyer, said she would seek a new trial. "I do believe there were issues with this jury, that there were outside influences that affected their decision," Ms. Mojaddidi told reporters.

Johnny L. Griffin, Umer Hayat's lawyer, urged prosecutors to drop the case against his client.

"The government, in my opinion, put its best foot forward and slipped and fell," Mr. Griffin told reporters.

Jury members left the courthouse without speaking to reporters. Mr. Tobias suggested that in the Hamid Hayat case the videotaped confession, which jurors had asked to review again during deliberations, probably played a greater role than the testimony of the informant, Naseem Khan, who recorded hundreds of hours of conversations with Hamid Hayat but proved troublesome at trial.

Mr. Khan revealed on the stand that he had been hired after claiming Osama bin Laden's top deputy had been in Lodi, an assertion the government itself refuted. And just as the defense was winding up its case, he disclosed that he had found another recording of a conversation with Hamid Hayat, leading Ms. Mojaddidi to say he was unreliable.

Throughout the trial the question for jurors was whether Hamid Hayat was a trained terrorist awaiting orders to commit mayhem or, as his lawyer asserted, a young man adrift who simply went to Pakistan to attend religious school, get married and upon his return made incriminating admissions to investigators out of intimidation and a wild storytelling streak.

They also had to decide if Umer Hayat had lied to agents about his son's activities or changed his story about his son's plans in a bid for leniency.

Robert Tice-Raskin, the assistant United States attorney, said in his closing statements that Hamid Hayat had a "jihadi heart and jihadi mind," referring to an inclination for holy war. Those stirrings led him to train at a terrorist camp in northwest Pakistan, he said.

The government never presented evidence that Mr. Hayat had been in Pakistan, instead relying on the disputed admissions he made to agents.

But another government attorney, David Deitch, of the Justice Department's counterterrorism section, made clear the case was largely about thwarting any plans.

Mr. Deitch asked jurors how it would look if the government ignored the information and then Mr. Hayat "went over to the local shopping mall and blew himself up?"

Defense lawyers said the Hayats' incriminating statements to agents resulted from parroting leading F.B.I. questions and being overly cooperative in a misguided effort to please investigators and avoid jail.

Umer Hayat, who remains in custody, smiled briefly as he conferred with his legal team after the judge dismissed the jurors.

"He wasn't guilty," Mr. Hayat's son, Arslan, 17, told reporters. "The jury didn't find him guilty, and he's going to be home. We want him back."

Before reaching the verdict, Hamid Hayat's jury asked for clarification of legal points, a review of the testimony of an F.B.I. agent and, on Tuesday, the use of a dictionary, which was denied as a prohibited outside source of information.

They asked the judge whether money transfers among Hamid Hayat; Naseem Khan, the F.B.I. informant; and Hayat's uncle in Pakistan, constituted the "material support" of terrorism. The judge directed jurors that it would include personnel and training related to terror groups, not financing.

Jeff Kearns reported from Sacramento for this article, and Randal C. Archibald from San Diego.

    A Mistrial for a Father, but a Son Is Guilty, NYT, 26.4.2006, http://www.nytimes.com/2006/04/26/us/26mistrial.html

 

 

 

 

 

Prosecutors Play Tapes in Terrorism Trial

 

April 26, 2006
The New York Times
By WILLIAM K. RASHBAUM

 

The two men speak over the steady rhythmic pulse of the tan Toyota's tires passing over seams in the pavement along the Brooklyn-Queens Expressway. The younger man, a Pakistani immigrant sitting in the passenger seat, does most of the talking during the conversations on a series of summer nights in 2004.

He is unaware, as he sometimes angrily sputters in disjointed, heavily accented English about his hatred for America, that his driver, Osama Eldawoody, a naturalized American citizen, is a police informer, secretly recording their discussions.

On one hot and humid July night, the younger man, Shahawar Matin Siraj, who was then 22, seems to gloat as the two men drive from Bay Ridge, Brooklyn, to Jackson Heights, Queens: "See two twin towers are already gone, you cannot see no more." He laughs. "They killed a lot of our brothers, now they want us to fight," he says, adding, "These are bad people."

Speaking to his driver, he derides a passing policeman: "Hello, pig. Hi, pig. Bye, pig. Pig, you have a problem?" Then, "You, pig, will learn the lesson someday." And also sings — apparently mimicking a song. "Brooklyn Bridge is falling down. Falling down. Falling down. The black guys used to sing this song, remember?"

The conversation was one of roughly a dozen played yesterday in Federal District Court in Brooklyn, where Mr. Siraj is on trial, charged with conspiring to blow up the subway station beneath Herald Square in Manhattan. They ranged from the sinister to the more fantastical.

Among the topics: a discussion on the possibility of attacking the United States Army with nuclear weapons; killing Bill Gates, the co-founder of Microsoft, in order to damage the American economy; stealing nuclear material from reactors or, apparently, from the once top-secret base in Nevada known to U.F.O. buffs as Area 51 (although Mr. Siraj referred to it as Area 52).

The government has introduced portions of more than 30 hours of taped conversations in an effort to portray Mr. Siraj as a dangerous man intent on wreaking havoc. Mr. Siraj, who came from Karachi in 1999 to join his parents in Queens, met the informer at an Islamic bookstore, where Mr. Siraj worked, next to a mosque. The New York Police Department's Intelligence Division had dispatched Mr. Eldawoody, who was born in Egypt, to the mosque and the bookstore to determine whether potentially violent radicals frequented either place.

Mr. Siraj's lawyers have argued that when a fuller picture is presented — and a more extensive release of the tapes is made — it will be clear that the plot was orchestrated by the informer. The lawyers have argued that the informer was interested in the nearly $100,000 he earned from the police over the nearly three years he worked on the case, and that Mr. Siraj was little more than a foolish dupe.

James Elshafay, who was arrested along with Mr. Siraj on Aug. 27, 2004, has pleaded guilty in the case, and is expected to testify against his onetime friend, Mr. Siraj.

Yesterday, over the course of several hours, an assistant United States attorney, Todd Harrison, alternately played the tapes and then questioned a fidgeting Mr. Eldawoody about the conversations. The jurors in the case listened to the recordings through wireless headsets and followed them with transcripts prepared by the government. The witness, Mr. Siraj, the judge, lawyers, the court clerks, the defendant's family, spectators and news reporters also listened through headsets.

An expressionless Mr. Siraj, pallid and clad in a loose-fitting dark suit with a white open-collared shirt, sat between two of his three lawyers at the defense table. He spent much of the day hunched over, his face just inches from a pad. He sometimes leaned back and looked into the gallery, where his parents were sitting.

On occasions, he seemed to shake his head while Mr. Eldawoody spoke.

One night in July, a recording captured the two men talking about a plan to blow up the Verrazano-Narrows Bridge and three other bridges linking Staten Island with New Jersey, which prosecutors said Mr. Siraj ultimately abandoned for the Herald Square subway plot.

Mr. Siraj talked about the economic damage that would be caused by stranding Staten Island without the bridges, and seemed pleased that he had recruited Mr. Elshafay, who he indicated was the actual author of the alleged plan.

During another conversation, this one in June, Mr. Siraj sounded upset when he talked about a picture he said he had seen that purported to show an American soldier setting a dog upon a handcuffed 13-year-old Iraqi girl and the dog raping the child. Mr. Siraj recounts a conversation he said he had with an American woman who said such attacks were commonplace against American women in jail cells.

"That was enough for me," he said. "I'm ready to do anything. I don't care about my life."

Mr. Siraj's lawyers have argued that he was incited to all his talk about violent acts — no material for any attack was ever sought or obtained by Mr. Siraj — by the informer. They have said he regularly spoke to Mr. Siraj of alleged injustices perpetrated by the American authorities against Muslims.

The tapes also capture conversations about nuclear weapons — Mr. Eldawoody has a bachelor's degree in nuclear engineering — and about obtaining nuclear materials from the Russian mafia.

Mr. Siraj wondered if they could create a bomb and use it against the United States Army.

"But can we do it over here, something like that, a big explosion that can take over the, like, army, army of America, that can kill the army of America?" he asked, saying he hoped to "take out the majority of them with one punch."

Mr. Eldawoody responded by talking about the problems involved, and without explanation, referred to the burning point of uranium 235.

    Prosecutors Play Tapes in Terrorism Trial, NYT, 26.4.2006, http://www.nytimes.com/2006/04/26/nyregion/26herald.html

 

 

 

 

 

Life or death justice by multiple choice

 

April 26, 2006
The Times
From Tom Baldwin in Washington

 

EVEN the most important exams are not usually a matter of life and death. But jurors in the sentencing trial of Zacarias Moussaoui have been presented with a 42-page multiple choice paper that they must complete in deciding whether the confessed 9/11 conspirator is executed.

After a six-week trial of often harrowing evidence in Alexandria, Virginia, about the murder of innocents, this “verdict form” would seem mundanely familiar to anyone who had sat GCSEs or A levels. There are three counts, five sections for each and endless aggravating or mitigating factors to be weighed.

Jurors must first decide if the “cruel and heinous” nature of the crime merits the death sentence. “If you have answered ‘YES’ with respect to any one of the above Statutory Aggravating Factors, go to Section II,” the form says. This turns out to be a list of seven non-statutory aggravating factors that cover the specifics of that day, including the claim that Moussaoui contributed to the deaths of nearly 3,000 people on September 11, 2001. Then there is a Section III, a list compiled by the defence of 23 mitigating factors, such as his apparently horrible childhood or the view that, if executed, he would become a martyr.

Each one must be voted upon. Then the jury is told: “List on the lines below any additional mitigating factors found by at least one juror . . . if you need additional space, ask for more paper.”

Yesterday, in the middle of their first full day of deliberations, the jury asked Judge Leonie Brinkema for a dictionary. She refused.

“If there are terms you are having trouble with, you can ask a specific question,” she told them. After she and the jury left, Moussaoui said: “747 fly to London.” This was an apparent reference to his dream that President Bush would release him and he would fly to his former home in Britain.

Judge Brinkema has told the jury that their decision on the death penalty must be unanimous or the court will automatically sentence Moussaoui to life imprisonment.

Section IV makes this grimly clear. It asks the jury to sign individually on a form showing their collective determination for the death penalty.

“Instructions: Answer either B(1) or B(2) but not both. Then go directly to Section V to certify your decision.” B(1) means he dies by lethal injection. B(2) means he lives.

Moussaoui, 37, was already in jail at the time of the September 11, 2001, terrorist attacks. But the jury ruled last month that the lies he told federal agents when he was arrested had allowed the plot to proceed.

 

QUESTIONS FOR THE JURY

Has the Government proven beyond reasonable doubt:

That the actions of the defendant resulted in the deaths of approximately 3,000 people?

That the actions of the defendant were intended to cause, and in fact did cause, tremendous disruption to the function of the City of New York and its economy?

That the defendant has demonstrated a lack of remorse for criminal conduct?

That on February 23, 2001, the defendant entered the United States for the purpose of gaining specialised knowledge in flying an aircraft in order to kill as many American citizens as possible?

    Life or death justice by multiple choice, Ts, 26.4.2006, http://www.timesonline.co.uk/article/0,,3-2152000,00.html

 

 

 

 

 

US seeks death penalty for Moussaoui

 

Mon Apr 24, 2006 8:52 PM ET
Reuters
By Deborah Charles

 

ALEXANDRIA, Virginia (Reuters) - A U.S. jury began deliberating Zacarias Moussaoui's fate on Monday after prosecutors requested the death penalty for the September 11 conspirator and the defense implored jurors to send him to prison for life so he would not become a martyr.

The jury did not reach a verdict after three hours of deliberations and were to return on Tuesday.

The only U.S. case related to the deadly hijacked airliner attacks went to the jury after District Judge Leonie Brinkema gave them roughly an hour of instructions.

In closing arguments, Assistant U.S. Attorney David Raskin asked the jury to decide to execute Moussaoui, who said he would have participated in the September 11 attacks if he had not been arrested the previous month on immigration charges.

"Let me be blunt, ladies and gentlemen," said Raskin. "There is no place on this good Earth for Zacarias Moussaoui."

But one of the court-appointed defense lawyers, Gerald Zerkin, urged the jury to instead make a decision that "requires some courage" and sentence Moussaoui to life in prison.

"He wants you to sentence him to death. He came to America to die in jihad and you are his last chance," Zerkin said. "He clearly sees that as his last way to martyrdom."

The jury will just decide the sentence since Moussaoui has pleaded guilty to six conspiracy counts relating the September 11 plot.

Moussaoui, 37, sat in the courtroom staring at the 12-member jury during most of closing proceedings. But as he left for a morning break, Moussaoui said, "You'll never get me, America. Never ever."

After the jury left to begin deliberating, Brinkema lauded the attorneys and noted that the defense lawyers -- with whom Moussaoui will not speak -- had an "impossible client."

"There never has been a defendant as difficult as this one," said Brinkema.

 

'SACRIFICIAL LAMB'

Prosecutors earlier dismissed defense claims that Moussaoui was mentally ill and that he sought martyrdom.

Raskin said Moussaoui was "elated that al Qaeda murdered 2,972 innocent people on September 11."

"Enough is enough," Raskin said. "It is time to put an end to his hatred and venom. It is time to sentence Zacarias Moussaoui to death."

The panel of nine men and three women must be unanimous in order to sentence Moussaoui to death. The same jury already decided Moussaoui was eligible for the death penalty.

Zerkin said the U.S. government was offering up Moussaoui as a "sacrificial lamb."

"The government opts for retribution against the only person it has brought to trial in relation to 9/11," the lawyer said in describing Moussaoui as an inept al Qaeda operative.

The jury is considering evidence presented during two weeks of testimony by survivors and family members of victims of the deadly hijackings that killed about 3,000 people in New York, Pennsylvania and at the Pentagon outside Washington not far from the federal courthouse.

Prosecutors showed gruesome pictures of charred bodies and a video clip of people jumping from New York's World Trade Center during their closing arguments.

Zerkin said the government was trying to assuage the families' pain with Moussaoui.

"If the people who testified ... need the death of Mr. Moussaoui to recover, it can only be because the government has held that out for them," he said. "The government has held out the prospect of Mr. Moussaoui's execution as being the cure."

Moussaoui testified twice in the trial. He contradicted previous statements by saying he was meant to pilot a fifth plane into the White House as part of the hijacking plot, though the government offered nothing to support that claim.

The 37-year-old French citizen also said he wished more Americans could have suffered in the attacks.

    US seeks death penalty for Moussaoui, R, 24.4.2006, http://today.reuters.com/news/articlenews.aspx?type=newsOne&storyID=2006-04-25T005235Z_01_N24291556_RTRUKOC_0_US-SECURITY-MOUSSAOUI.xml

 

 

 

 

 

Defense Urges Jury to Deny Moussaoui Martyrdom

 

April 24, 2006
The New York Times
By NEIL A. LEWIS and DAVID STOUT

 

ALEXANDRIA, Va., April 24 — A prosecutor told jurors today that there is "no place on earth" for Zacarias Moussaoui, and that he should be put to death for the vast suffering he helped to cause in the Sept. 11 attacks.

But a defense lawyer urged the jurors to spare Mr. Moussaoui's life and deny him the martyrdom he craves. The sentencing trial that is nearing its end is "more about us than about him," the defense lawyer said.

The jury of nine men and three women are expected to begin weighing Mr. Moussaoui's fate this afternoon, following instructions from Federal District Judge Leonie M. Brinkema. The judge must pronounce the sentence the jurors agree upon — death by injection, or life in prison without parole.

Displaying photographs of some of the nearly 3,000 victims, many of them children, the prosecutor, David Raskin, said Mr. Moussaoui had shown again and again that he "rejoiced" in the accounts of people being burned, crushed or vaporized on Sept. 11, 2001, and delighted also in hearing from victims' relatives about their own emotional pain.

"The defendant loved every minute of it," Mr. Raskin said, reminding the panel that Mr. Moussaoui had testified that "we want to inflict pain on your country." Even as Mr. Raskin was making his statement, the defendant smiled and nodded in agreement.

"There is no place on earth for Zacarias Moussaoui," Mr. Raskin said, imploring the jurors to "put an end to his hatred and venom."

"It's time to hold Zacarias Moussaoui responsible," Mr. Raskin said. "It's time to sentence Zacarias Moussaoui to death."

One of the court-appointed defense lawyers, Gerald T. Zerkin, countered by arguing that the government was seeking to make "a sacrificial lamb" of the 37-year-old Frenchman of Moroccan descent.

The lawyer said the government has declined to prosecute those far more culpable in the 9/11 attacks, like Khalid Sheikh Mohammed and Ramzi Binalshibh, both closely associated with the 19 plane hijackers and both in United States custody after being arrested in Pakistan. Instead, Mr. Zerkin said, the government has focused on Mr. Moussaoui, "a veritable caricature of an Al Qaeda operative, the operative who could not shoot straight."

Mr. Zerkin noted that the defendant had never really learned how to fly, and that he was such a bungler as a terrorist that he could not avoid arrest in Minnesota on immigration charges about three weeks before the attacks.

Mr. Zerkin urged the jurors to resist the temptation to make Mr. Moussaoui a martyr, to show "the courage not to order his death."

"He is baiting you into it," Mr. Zerkin said. "He came to America to die, and you are his last chance." Choosing life in prison rather than death on the gurney would not be mercy, the lawyer argued, but would subject Mr. Moussaoui to "the long, slow death of a common criminal."

Mr. Moussaoui has already pleaded guilty to conspiracy charges in connection with the attacks on the World Trade Center and the Pentagon and the crash of United Flight 93 in Pennsylvania. In an earlier phase of the sentencing trial, the jury found that, although he did not participate directly in the attacks, Mr. Moussaoui was responsible for at least some of the deaths because during his three weeks in jail he concealed what he knew about Al Qaeda plans to crash airplanes into buildings.

In this final phase of deliberations, the jurors must decide how the aggravating factors of Mr. Moussaoui's crimes, like whether victims died in an unusually heinous, cruel or depraved manner, balance against mitigating factors, like possible mental instability or emotional problems spawned by a sometimes violent and deprived childhood.

Mr. Moussaoui has not communicated with his own lawyers throughout the trial, instead sitting several feet away from them. He has usually looked bored and, occasionally, amused or contemptuous.

In arguing that Mr. Moussaoui's crimes were heinous enough to warrant the ultimate penalty, Mr. Raskin reminded the jurors of a telephone call a woman made from one of the Twin Towers. "I'm going to die," the woman is heard to tell an emergency operator. "I'm burning up."

Mr. Raskin also replayed a videotape showing people jumping to their deaths from the towers. "It is still hard to believe," he said. "It is still difficult to watch these images."

As for Al Qaeda members now in American custody, Mr. Raskin said they would get their justice once they no longer have any information to give.

    Defense Urges Jury to Deny Moussaoui Martyrdom, NYT, 24.4.2006, http://www.nytimes.com/2006/04/24/us/24cnd-moussaoui.html?hp&ex=1145937600&en=d325605fd3cf191a&ei=5094&partner=homepage

 

 

 

 

 

Prosecutors Concede Doubts About Moussaoui's Story

 

April 21, 2006
The New York Times
By NEIL A. LEWIS

 

ALEXANDRIA, Va., April 20 — The prosecution acknowledged on Thursday that even the government's chief investigators did not believe the claim of Zacarias Moussaoui that Richard C. Reid, known as the shoe bomber, was to help him fly a jetliner into the White House on Sept. 11, 2001.

The jury, which is considering whether to order either the death penalty or life imprisonment for Mr. Moussaoui, was presented with a document saying Federal Bureau of Investigation analysts had agreed that Mr. Reid was never meant to be part of the Sept. 11 attacks.

The document, read to jurors by one of Mr. Moussaoui's court-appointed lawyers, was a "substitution" agreed to by prosecutors rather than having Mr. Reid brought from prison in Colorado, where he is serving a life sentence for trying to ignite a bomb in his shoe on an American Airlines flight on Dec. 22, 2001.

The significance of the document is that the Justice Department has now acknowledged that the government's principal investigators on the case are highly skeptical of an important part of Mr. Moussaoui's statement, made on the witness stand last month, about his role in the Sept. 11 plot.

In their summation to the jury last month in the first phase of the sentencing trial, prosecutors repeatedly cited Mr. Moussaoui's testimony that he was to fly a fifth hijacked plane into the White House on Sept. 11 and that Mr. Reid was to have been one of the hijackers.

Defense lawyers had asserted that Mr. Moussaoui concocted the claim to make himself appear a far more important player in Al Qaeda than he really was.

Mr. Moussaoui's statement was widely viewed as an important element in persuading the jury to find him eligible for the death penalty.

The defense lawyers had sought to bring Mr. Reid to court this week to debunk the story, but complications, including objections from his lawyer, made that difficult. Instead, they introduced the substitution, which said the government agreed that "to date, there is no information available that Richard Reid had preknowledge of the 9/11 attacks and was instructed by Al Qaeda leadership to conduct an operation with Moussaoui."

The statement read to the jury said Mr. Reid had left documents before boarding the American Airlines flight showing that he had no intention to take part in a martyrdom operation with Mr. Moussaoui. They included a letter to his mother and a will in which he was to leave his belongings to Mr. Moussaoui.

In addition, Mr. Reid was traveling throughout the world when the Sept. 11 hijackers were assembling in the United States.

Based on that, the document said two F.B.I. analysts had agreed that "it is highly unlikely that Reid was part of this operation."

Mr. Moussaoui's court-appointed lawyers, with whom he does not speak, ended their case with the Reid statement.

Mr. Moussaoui, the only person to stand trial in the United States for the Sept. 11 attacks, has pleaded guilty to conspiracy. The jury ruled last month that he was eligible for the death penalty, even though he was in jail at the time of the attacks, because he had concealed his knowledge of Qaeda plans to fly planes into buildings.

The only remaining question for the jury, which will begin deliberations on Monday, is whether to order his execution or allow him to spend the rest of his life in prison.

Prosecutors ended their case Thursday with testimony by Dr. Raymond Patterson, a forensic psychiatrist who has examined Mr. Moussaoui. Dr. Patterson said Mr. Moussaoui suffered from a personality disorder but not from schizophrenia or other major mental disease.

The jury heard testimony earlier from a psychologist and a psychiatrist for the defense who had diagnosed Mr. Moussaoui's condition as a schizophrenia of the paranoid variety.

Dr. Patterson disputed much of their conclusions.

    Prosecutors Concede Doubts About Moussaoui's Story, NYT, 21.4.2006, http://www.nytimes.com/2006/04/21/us/21moussaoui.html

 

 

 

 

 

Which Picture of Skilling Will Enron Jurors Believe?

 

April 21, 2006
The New York Times
By ALEXEI BARRIONUEVO

 

HOUSTON, April 20 — In eight days on the witness stand Jeffrey K. Skilling accomplished much of what he needed to do in front of the jury hearing his criminal case, avoiding any major gaffes while staunchly maintaining his innocence.

But in the end, the performance by Enron's former chief executive was far from perfect, and may have revealed to the jury more than he and his lawyer wanted.

The portrait of Mr. Skilling that emerged in his criminal fraud trial here was more complex than the caricature frequently drawn of him as the greedy, arrogant executive with a Darwinian view of the world who transformed Enron from a humdrum pipeline company into a renowned energy-trading colossus.

Instead, Mr. Skilling showed himself to be a vulnerable, emotional, even affable character who saves his hostility, these days, for the government that charged him with defrauding Enron's investors.

But jurors in the federal trial also saw a side of him that had increasingly bothered managers at Enron. This was a man who did not like to be questioned, to be told he was wrong, to be asked, even, just to listen.

And whether Mr. Skilling helped himself on the stand more than he hurt his defense will ultimately depend on how the jury weighs those two sides of his personality.

"At the end of the day a trial like this is a morality play," said Mark C. Zauderer, a white-collar criminal lawyer with Flemming Zulack Williamson Zauderer in New York. "It is not just what happened, and who said what to whom, but who is an honest person."

The joint defense team for Mr. Skilling and the former Enron chairman, Kenneth L. Lay, Mr. Skilling's co-defendant, is counting on the more human portrait of Mr. Skilling that emerged in his testimony to persuade jurors that he is not a criminal. Instead, his lawyers are hoping, Mr. Skilling showed that he was a flawed figure who loved Enron too much to have risked its failure by doing anything illegal.

At the same time, the issues raised during an often sarcastic but skilled cross-examination by the prosecutor, Sean M. Berkowitz, legal experts said, could sow doubts in jurors' minds about whether they should trust Mr. Skilling's blanket insistence that he never took part in any schemes to manipulate Enron's earnings or cover up losses.

Mr. Skilling testified that despite having his hands firmly on the wheel at Enron, he could not remember some crucial meetings, and his recollections of others were starkly different from those of prosecution witnesses who testified earlier.

Mr. Berkowitz chipped away at Mr. Skilling's credibility during four days of often testy exchanges. On Thursday, his final day of testimony, Mr. Skilling once again found himself on the defensive.

Mr. Berkowitz suggested that Mr. Skilling had backdated a $10,000 check to a former girlfriend to avoid paying income taxes in 1998. Mr. Skilling bristled at the suggestion that he had violated any tax laws; there are no tax accusations in his 28-count indictment. "I never shirk from my duty to pay taxes to the United States of America," he said.

But Mr. Skilling admitted he probably violated Enron's code of ethics by not disclosing to his board an investment of at least $30,000 in a small company run by a woman he dated.

When Mr. Berkowitz pushed him to acknowledge that he had dated the woman, Jennifer Binder, for longer than he had said earlier in the week, Mr. Skilling snapped, "What does this have to do with fraud at Enron Corporation, just out of curiosity?"

Moments later, Mr. Berkowitz responded. "You would agree that the most important thing the jury has to rely on is your word, sir?" he asked.

"Yes," Mr. Skilling said quietly.

During his testimony, Mr. Skilling admitted his surprise when two former Enron managers testified that he had become increasingly difficult to deal with.

Paula H. Rieker said she did not correct Mr. Skilling when he gave analysts incorrect information because she was afraid of his reaction. "My prior interactions with him had just conditioned me that he didn't want to be corrected," she testified.

And Vince Kaminski, the former quantitative-risk guru whom Mr. Skilling said he admired greatly, told jurors that his interactions with Mr. Skilling became less frequent because Mr. Kaminski "found out it wasn't very useful trying to argue with him."

Mr. Skilling's testimony revealed that he increasingly sought validation for what he believed, rather than listening carefully when he was told about problems at the company.

In June 2001, one day before he flew to San Francisco to give a speech, Mr. Skilling sought assurances that everything happening in California's newly deregulated electricity market was on the up and up.

Enron has to be "absolutely pure as the driven snow," Mr. Skilling told Richard Sanders, then an Enron lawyer. "So one more time," he said. "We're pure as the driven snow, right?"

A lawyer then told Mr. Skilling about the strategies that traders had used, many of them later found to have contributed to manipulating the market. Mr. Skilling felt comforted that the problems had been handled, he testified this week. Mr. Sanders assured Mr. Skilling that the lawyers had ordered the tactics stopped as soon as they were discovered.

"O.K.," Mr. Skilling said. "So we're as pure as the driven snow?"

At another point, Mr. Berkowitz seized on an opening to try to show Mr. Skilling's sense of his own rightness that irritated California politicians during that state's energy crisis, when Enron was making huge profits selling wholesale power and natural gas to the state. Mr. Skilling joked publicly in June 2001 that the only difference between the Titanic and California was that "at least the lights were on when the Titanic went down."

When Mr. Skilling compared the energy regulatory environment in California to that of developing countries, Mr. Berkowitz asked: "Do you think that's funny? You were smiling. What happened out there, do you think that's funny?"

Mr. Skilling, after some hesitation, finally conceded to Mr. Berkowitz that he regretted making the joke.

Mr. Skilling also flashed his trademark arrogance. After noting that Mr. Kaminski "was one of the top thinkers" on hedging commodity risk in the world at the time, Mr. Skilling said he nevertheless disagreed with Mr. Kaminski in 1999. Writing on butcher paper set on an easel, Mr. Skilling explained to jurors why a move to use Enron shares to hedge an Internet stock — something Mr. Kaminski considered nonsensical and too risky — had been acceptable in Mr. Skilling's eyes.

Whatever the risks, some outside lawyers praised Mr. Skilling for taking the stand. "He only has to convince one person that the government is overbearing and has been able to cut deals with people," said Joel Androphy, a while-collar defense lawyer with Berg & Androphy in Houston. "Those sympathizers will admire him, because he fought."

Mr. Skilling showed he was a man obsessed with Enron's success and terrified of its failure. When he realized in October 2001 that Enron was heading toward bankruptcy and he was powerless to stop that, Mr. Skilling said he turned to drink, sobbing in a Florida hotel room.

When bankruptcy seemed inevitable, he said, "I had trouble getting up in the morning." When it became official, in December 2001, "I wanted to die," he testified.

While he made millions at Enron, becoming rich beyond his "wildest dreams," Mr. Skilling showed he was less ostentatious than other Enron executives, who spent freely on race cars, yachts and strippers. Mr. Skilling owned few big-ticket items outside of his Houston home, worth about $5 million. He never bought the "rusty frigate" he wanted to buy to sail around the world after he left Enron, he told Kenneth D. Rice, the former chief of the broadband unit.

Instead, for most of his decade at Enron, Mr. Skilling said, he obsessed about the business. Enron's success became wrapped up in his: the vanity plates on his Mercedes read "WLEC," for "World's Leading Energy Company." Mr. Skilling was most composed and at ease discussing the business he built, adopting the same confident salesman persona that he employed with Wall Street analysts.

On a handful of occasions he stepped out of the witness box and used slick visual aids set on an easel to instruct the jurors on everything from the "gas bank" he created at Enron to the basics of energy trading. Some jurors stood up to get a better look.

When Mr. Skilling denied certain charges, he did it with an emphatic "absolutely not," which he used 29 times through Wednesday, according to trial transcripts.

If Mr. Skilling appeared at times to be a raw, unhealed wound, it was at least partly by design. Daniel Petrocelli, his lawyer from Los Angeles known for winning the wrongful death suit against the football star O. J. Simpson, insisted that he would not bring in outside consultants to try a makeover of Mr. Skilling.

"I want Jeff to be Jeff," he said days before the trial. In Mr. Petrocelli's calculation, the real Mr. Skilling, however flawed and vulnerable to emotional outbursts, was his own best defense.

At times, Mr. Petrocelli encouraged Mr. Skilling to express his pent-up anger, in particular when it was aimed at the government and its four-year Enron investigation.

"Is it difficult to contain how upset you are?" Mr. Petrocelli asked last week.

"It is at times, yes," Mr. Skilling replied.

"And why is that?" Mr. Petrocelli said.

"This is a total misrepresentation, in my view, of the state of events that was occurring at the time," Mr. Skilling replied.

The lawyer and client forged an unusually close bond that has become evident at trial. After Mr. Skilling finished his first week on the stand, Mr. Petrocelli answered reporters' questions outside the courthouse with a puffy-eyed Mr. Skilling at his side. Mr. Skilling mumbled how proud he was to be standing trial "in a country that allows freedom," while Mr. Petrocelli reassuringly stroked his client's back.

And just before Wednesday morning's session, Mr. Petrocelli turned to Mr. Skilling in a courthouse elevator, with the kind of remark that went beyond the usual lawyer-client relationship. "I want you," he said, "to swing for the fences today." Mr. Skilling nodded attentively.

Vikas Bajaj and Kurt Eichenwald contributed reporting from New York for this article.

    Which Picture of Skilling Will Enron Jurors Believe?, NYT, 21.4.2006, http://www.nytimes.com/2006/04/21/business/businessspecial3/21skilling.html

 

 

 

 

 

Ex-Chief of Enron Continues Testimony

 

April 20, 2006
By THE ASSOCIATED PRESS
The New York Times

 

HOUSTON - Former Chief Executive Jeffrey Skilling, back in the hands of his own lawyer after three days of cross-examination by the prosecution, reiterated his innocence Thursday on charges related to Enron Corp.'s collapse.

The government says Skilling knew Enron wrongly dipped into reserves to pad earnings when business units failed to meet income targets through regular operations.

"Did you think of reserves as a place you could just pull out money for earnings?" Skilling attorney Daniel Petrocelli asked.

"You couldn't," Skilling replied. He repeated a phrase he'd used before — that once a reserve was set aside, it was in a "lock box" and couldn't be tapped.

Several prosecution witnesses testified that they felt pressure from Skilling to use reserves to pad earnings when such funds are supposed to be used for specific expenses, like litigation costs.

During cross-examination Tuesday, prosecutor Sean Berkowitz displayed a chart for jurors that showed more than $1 billion in reserves were "available for earnings" in the spring of 2001. Skilling bristled and insisted the prosecutor misinterpreted the document.

On Thursday, Skilling explained that the $1 billion reserve increased to $1.3 billion by the end of the first quarter of 2001 — reducing reported earnings — to prepare for risks and contingencies.

"The whole characterization of reserves as a cookie jar is demonstratively untrue," the ex-CEO said.

Skilling appeared refreshed Thursday after a grueling three days of cross-examination, from which he emerged looking tired. Skilling often simmered with tension as Berkowitz repeatedly challenged his truthfulness. He could face Berkowitz again Thursday after Petrocelli finishes questioning him a second time.

That tension dissipated when Skilling was back in his own lawyer's hands.

"Do you think you're so smart that you can fool this jury?" Petrocelli asked late Wednesday.

"Of course not," Skilling replied.

Skilling's testimony is expected to wrap up Thursday, and his co-defendant, Enron founder Kenneth Lay, is expected to begin testifying as early as Monday, said George Secrest, one of Lay's lawyers.

"He's waited a long time," Secrest said after court recessed for the day.

Skilling is charged with 28 counts of fraud, conspiracy, insider trading and lying to auditors from 1999 through 2001. Lay faces six counts of fraud and conspiracy that focus on his actions after Skilling abruptly resigned from Enron in mid-August 2001 through the company's descent into bankruptcy protection four months later.

Petrocelli said up to 10 other defense witnesses are slated for brief testimony between Skilling and Lay. Next up was Carol Baxter, the widow of former Enron vice chairman and close Skilling friend Cliff Baxter, who fatally shot himself in January 2002.

Prosecutors allege Skilling and Lay repeatedly lied to investors and employees about Enron's health when they knew that their optimism hid weak business ventures and that accounting tricks obscured debt and inflated profits.

The two defendants say no fraud occurred at Enron, and that bad publicity and vanishing market confidence sank the company.

At times throughout Berkowitz's cross-examination, Skilling was prickly but held his temper. On Wednesday he bristled when Berkowitz challenged whether he mischaracterized Enron's true nature as a risky trading company, then blocked the ex-CEO from giving detailed denials.

"We're going to be here all day," a frustrated Skilling said after Berkowitz refused to let him elaborate on the nature of Enron's business and how it managed risk. "We're on fundamentally different planes here."

Several jurors smiled during the dustups, as though amused at the sparring.

The government's specific allegations include that Skilling and Lay pointedly characterized Enron as a stable company with predictable growth rather than a trading company vulnerable to market volatility because Wall Street would be more bullish on the former.

Skilling maintained Wednesday his oft-repeated stance that Enron was indifferent to wild swings in commodity prices because it was an intermediary that packaged services for commodity buyers and sellers.

"I didn't think 'trading company' reflected, in my view, what Enron was," Skilling said.

"And you were communicating that to the marketplace, correct?" Berkowitz asked.

"That's correct," the ex-CEO replied.

Berkowitz asked if investors were concerned about whether Enron made the bulk of its profits from speculative trading in markets "going crazy" in California. "Yes or no," the prosecutor demanded.

"Mr. Berkowitz, I think we tried very hard, very hard to communicate specifically the risk positions that were being taken with our business," Skilling replied.

Kenneth Rice, once a top trader and former CEO of Enron's failed broadband unit, testified in February that Skilling told him Enron's stock would get "whacked" if the market perceived Enron as a trading company.

And Timothy Belden, a former top trader who ran the company's Western power trading desk, told jurors Enron was primarily a trader and profited heavily from power prices that skyrocketed during California's energy crunch in 2000-2001.

    Ex-Chief of Enron Continues Testimony, NYT, 20.4.2006, http://www.nytimes.com/2006/04/20/business/20wire-enron.html?hp&ex=1145592000&en=8d6fcbbdabdad6f4&ei=5094&partner=homepage

 

 

 

 

 

Prosecutor Suggests Skilling Lied About Why He Quit

 

April 20, 2006
The New York Times
By ALEXEI BARRIONUEVO and VIKAS BAJAJ

 

HOUSTON, April 19 — A prosecutor wrapped up his cross-examination of Jeffrey K. Skilling in the Enron fraud trial on Wednesday by suggesting that Mr. Skilling had lied about the reason he resigned as Enron's chief executive.

The prosecutor, Sean M. Berkowitz, asked Mr. Skilling if he had been considering taking a job as chief executive of Lucent Technologies shortly after he resigned from Enron, despite having asserted that he left primarily to spend more time with his family.

Wednesday's questioning wrapped up three days of often testy exchanges between Mr. Berkowitz, the director of the Justice Department's Enron Task Force, and Mr. Skilling, who is charged with conspiring to defraud Enron's investors and with committing insider trading before the company collapsed into bankruptcy in late 2001. Mr. Skilling will remain on the stand today. His lead lawyer, Daniel Petrocelli, said he expected to finish by midday.

Mr. Skilling's co-defendant in the case, Kenneth L. Lay, the former Enron chairman, could testify as early as Monday, Mr. Petrocelli said. Mr. Lay also faces fraud and conspiracy charges.

For three days, Mr. Berkowitz, a 38-year-old prosecutor from Chicago, sparred with Mr. Skilling, picking away at his credibility while trying to control the former chief executive's attempts to extend his answers. Mr. Skilling kept his emotions largely under control.

Mr. Berkowitz's latest attempt to challenge Mr. Skilling's credibility came late Wednesday when the prosecutor asked Mr. Skilling why he left Enron. Mr. Berkowitz showed jurors a list of 11 varying reasons Mr. Skilling has given in trial and elsewhere for his departure in August 2001, after six months as chief executive.

They included his claims that he was weary from work and wanted to spend more time with his family.

Prosecutors have suggested that Mr. Skilling left because he knew that Enron had serious undisclosed accounting problems and losses.

Mr. Berkowitz asked Mr. Skilling on Wednesday whether he had told a friend, Dick Foster, that he was considering a chief executive opening at Lucent.

Mr. Skilling said he had been asked about the position at Lucent by an executive recruiter but did not express an interest in pursuing it.

Mr. Skilling and Mr. Foster, who previously had worked together at McKinsey & Company, met for beers in New York in October 2001, two months before Enron declared bankruptcy.

"Did Mr. Foster get upset at you and say, 'Jeff, I thought this was all about your family?' " Mr. Berkowitz asked.

"No," Mr. Skilling responded, appearing to be slightly taken aback by the question.

Under redirect questioning, Mr. Petrocelli sought to clarify that conversation by suggesting that Mr. Foster was taken aback when Mr. Skilling mentioned he was considering returning to Enron, not because he was considering other jobs.

Earlier in the day, Mr. Skilling denied Mr. Berkowitz's contention that the company was increasingly vulnerable in its last year because of its reliance on speculative trading. He also continued to dispute a government contention that Enron carried out an accounting change in the spring of 2001 to hide $200 million in losses.

Mr. Berkowitz and Mr. Skilling continued their battle for control on Wednesday, with Mr. Skilling protesting that the prosecutor was not giving him enough opportunity to answer questions fully and the prosecutor suggesting that Mr. Skilling was being evasive by refusing to answer yes or no.

Speaking to reporters outside the courtroom during a break in the trial, Mr. Petrocelli railed against Mr. Berkowitz, saying he was limiting Mr. Skilling to incomplete answers. "He is absolutely terrified to let him answer any questions," Mr. Petrocelli said.

Mr. Berkowitz challenged Mr. Skilling about whether Enron had been forthright with investors concerning the risks it faced from volatile commodity prices. Mr. Berkowitz suggested that Mr. Skilling had not clearly disclosed trading risks to investors, analysts, employees and board members. Mr. Skilling confirmed that management kept asking the board to raise the limit on how much risk traders could take daily — from $75 million in June 2000 to $150 million by the summer of 2001.

Mr. Berkowitz also asked Mr. Skilling about a meeting in April 2001 when he was informed that Enron could face trading losses as high as $1 billion and that those losses could set off a series of events that would send its stock reeling, unwind off-the-books partnerships where the company had transferred some assets and lead to Enron's bankruptcy.

Mr. Skilling said he did not remember whether he was told about the potential impact on the partnerships, but he said the presentation was based on the worst possible case.

"I can't reinforce this enough, we published exactly the statistic that investors would need to calculate the risk of this happening," Mr. Skilling said in an exasperated tone.

Government witnesses, including David W. Delainey, the former chief executive of the retail energy unit, have testified that Enron was increasingly generating earnings from speculative trading, which made the earnings potentially more volatile.

In another exchange Wednesday, Mr. Berkowitz pressed Mr. Skilling over why Enron transferred portions of its retail energy business to its wholesale division in the spring of 2001. Mr. Delainey testified that it was done to hide $200 million in losses that the division would suffer in the first quarter of 2001 primarily because of a change in energy regulations in California.

Mr. Skilling has maintained and said again Wednesday that the change was not done to hide losses but was meant to make the company more efficient. He said the retail business would have been profitable had the transfer not occurred.

Mr. Berkowitz challenged Mr. Skilling's claims that a meeting in his office on March 29, 2001, at which executives discussed shifting components of the retail energy unit to the wholesale division, had been planned earlier. Mr. Skilling said he and Mr. Delainey had planned to meet at the end of the quarter to discuss how to "draw the line" between the retail and wholesale divisions.

Mr. Delainey suggested that the meeting was hastily organized to respond to a decision made two days earlier by the California Public Utility Commission to assess a tariff on electricity. He testified that executives, including Mr. Skilling, decided at the meeting to transfer the contracts to avoid recording the losses in the retail unit, which was an important part of the growth strategy Enron presented to Wall Street.

Mr. Berkowitz showed jurors evidence that despite Mr. Skilling's claims that the meeting had been planned earlier, the four main participants, including Mr. Skilling, all posted the meeting on their computer calendars within one day of March 29.

    Prosecutor Suggests Skilling Lied About Why He Quit, NYT, 20.4.2006, http://www.nytimes.com/2006/04/20/business/20enron.html

 

 

 

 

 

U.S. Sees No Evidence of Moussaoui's Plot Claim

 

April 20, 2006
The New York Times
By NEIL A. LEWIS

 

ALEXANDRIA, Va. April 18 — The prosecution agreed today that there was no evidence to back up Zaracias Moussaoui's claim that Richard Reid, the so-called shoe bomber, was to help Mr. Moussaoui fly a jetliner into the White House on Sept. 11, 2001.

The jury that is considering whether to order the death penalty or life imprisonment for Mr. Moussaoui was read a document by one of his court-appointed lawyers that said F.B.I. analysts agreed Mr. Reid was not ever meant to be part of the Sept. 11 terror attacks.

The document introduced into evidence in Federal Court here was a "substitution" agreed to by prosecutors in place of having Mr. Reid brought from prison in Colorado, where he is serving a life sentence for his attempt to ignite a bomb in his shoe on American Airlines flight 63 on Dec. 22, 2001.

The significance of the document is that the Justice Department has acknowledged that the government's principal investigators in the case against Mr. Moussaoui are highly skeptical of an important part of his statement that he planned to be part of the Sept. 11 plot.

Mr. Moussaoui stunned the courtroom when he first took the witness stand on March 27 by saying he was supposed to participate directly in the Sept. 11 attacks by flying a plane into the White House. That statement was widely viewed as an important element that enabled prosecutors to persuade the jury last month to find him eligible for the death penalty. Mr. Moussaoui pleaded guilty last year to conspiracy charges in connection with the Sept. 11 attacks,

In their summation to the jury, prosecutors repeatedly cited Mr. Moussaoui's assertion from the witness stand that he was to fly a fifth hijacked plane into the White House on that day and that Mr. Reid was to have been one of his crew members.

Defense lawyers had sought to bring Mr. Reid to court this week to rebut the story, but complications — including objections from Mr. Reid's lawyer — made that difficult. Instead, they introduced the substitution, which said that the government agreed that, "To date, there is no information available that Richard Reid had preknowledge of the 9-11 attacks and was instructed by Al Qaeda leadership to conduct an operation with Mr. Moussaoui."

The document went on to say Mr. Reid had left three documents before he boarded American flight 63 that showed he had other intentions. The documents included a letter to his mother and a will to leave his belongings to Mr. Moussaoui. In addition, Mr. Reid was traveling elsewhere in the world when the Sept. 11 hijackers were assembling in the United States.

Based on that, the document said two F.B.I. analysts agree that "it is highly unlikely that Reid was part of this operation."

The case is expected to go to jury on Monday afternoon.

    U.S. Sees No Evidence of Moussaoui's Plot Claim, NYT, 20.4. 2006, http://www.nytimes.com/2006/04/20/us/20cnd-moussaoui.html?hp&ex=1145592000&en=3138a3abb145868c&ei=5094&partner=homepage

 

 

 

 

 

Victims' Kin Testify for Moussaoui's Life

 

April 20, 2006
By THE ASSOCIATED PRESS
Filed at 2:18 a.m. ET
The New York Times

 

ALEXANDRIA, Va. (AP) -- In a trial where role reversals have been commonplace, family members of 9/11 victims testified in support of the man who has taken glee in their relatives' death and sounded a common theme: We don't want to succumb to feelings of revenge.

Six family members took the witness stand in Zacarias Moussaoui's defense on Wednesday, and more were expected to testify Thursday. Moussaoui's lawyers hope the testimony will counter the emotional impact of nearly four dozen witnesses who gave heartbreaking testimony for prosecutors about the impact of the Sept. 11, 2001, attacks that killed nearly 3,000 people.

Court rules prohibited witnesses on either side from opining on the choice jurors will face when deliberations begin next week -- whether Moussaoui should get the death penalty or life in prison.

But the defense witnesses left an unmistakable message about their view.

Marilynn Rosenthal, a medical professor from Ann Arbor, Mich., who lost her son Josh in the attack on the World Trade Center, said her family does not want to ''get caught in a whirlpool of sadness and anger.''

Outside the courthouse, she said she testified for the defense ''because I thought it was the right thing to do.'' Asked why she opposed a death penalty, she said, ''Moussaoui is the wrong person to be on trial. There are people in the custody of the U.S. government who were central planners.'' She called Moussaoui's role in 9/11 ''marginal.''

Anthony Aversano of Troy, N.Y., testified about how he had reconciled with his father in 1999 after years of anger toward him. When his father died in the Sept. 11 attacks, he said feelings of anger and revenge surfaced again toward the hijackers.

''I felt the same kind of stuff. But I realized I actually have a choice ... in who I want to be in this world, and how I want to focus my energy,'' he said.

Some 9/11 families disapproved of the defense testimony.

Debra Burlingame, whose brother Charles was pilot of the hijacked plane crashed into the Pentagon, said she found it ''deeply disturbing ... to hear that any 9/11 family member would take the witness stand on behalf of Zacarias Moussaoui. ... The fear that execution at our hands will martyr Moussaoui shows a misunderstanding of the jihadi cult of death.''

But outside the courthouse, Rosenthal said, ''Nobody speaks for all the 9/11 families.''

The testimony of victims on behalf of the defendant is just one of many through-the-looking-glass aspects of the trial. Defense lawyers who believe their client is mentally ill have sought to undermine Moussaoui's credibility. Moussaoui says he is fighting against the death penalty but has twice taken the stand and gloated about the 9/11 attacks. Prosecutors have been Moussaoui's biggest ally in supporting his contention that he is mentally sound.

Moussaoui is the only person charged in this country in connection with the Sept. 11 attacks. The jury deciding his fate has already declared him eligible for the death penalty by determining that his actions caused at least one death on 9/11.

Even though Moussaoui was in jail in Minnesota at the time of the attacks, the jury ruled that lies he told federal agents a month before the attacks kept authorities from identifying and stopping some of the hijackers.

Moussaoui has pleaded guilty to conspiring with al-Qaida to fly planes into U.S. buildings, but not on Sept. 11.

Associated Press Writer Michael J. Sniffen contributed to this report.

    Victims' Kin Testify for Moussaoui's Life, NYT, 20.4.2006, http://www.nytimes.com/aponline/us/AP-Moussaoui.html

 

 

 

 

 

News Organizations Try to Block Subpoenas for Notes in Leak Case

 

April 19, 2006
The New York Times
By DAVID JOHNSTON

 

WASHINGTON, April 18 — Lawyers for NBC News, The New York Times and Time magazine filed motions in federal court on Tuesday to quash subpoenas for interview notes, drafts of articles and other records sought by Vice President Dick Cheney's former chief of staff in the C.I.A. leak case.

At the same time, The Washington Post said in a statement that it had received a subpoena last week for notes of the reporter and editor Bob Woodward and had turned material over to lawyers for I. Lewis Libby Jr., the former Cheney aide who has been charged with lying to the grand jury in the leak inquiry.

"In order to comply with the subpoena, The Post produced the complete version of Bob Woodward's memo of his interview with Mr. Libby on June 27, 2003," the paper said Tuesday. "This action did not pose legal or journalistic concerns to The Post or Mr. Woodward."

The three news organizations that are resisting the subpoenas filed separate motions to block the records request, arguing in briefs that sounded similar themes, that the defense has asked for information that is irrelevant to the specific charges of perjury and obstruction brought in the indictment against Mr. Libby.

In addition, the briefs argued that procedural rules that prohibit unreasonable disclosure of information should be strictly applied in a case involving reporters. Lawyers for The New York Times argued that the newspaper "has a substantial First Amendment interest, and common law qualified privilege against compelled production of unpublished information of the kind sought by Libby."

Last month, Mr. Libby sought subpoenas for notes, calendars, records, interoffice messages, drafts of articles, and documents about communications among reporters and between reporters and editors about their knowledge of Valerie Plame Wilson, the Central Intelligence Agency officer at the heart of the leak case.

Mr. Libby told the grand jury that he believed her identity was known within the Washington press corps and that he needed to show her employment was being discussed in journalistic circles in June and July 2003 when he was meeting with reporters. Time's brief said such an assertion did not allow Mr. Libby to conduct a wide-ranging search for potentially helpful evidence.

"Although Mr. Libby has claimed a right to know what information the press corps in general possessed concerning Mrs. Wilson's affiliation with the C.I.A., under that theory he would be entitled to subpoena all reporters in Washington to learn what they knew, and when they knew it," the Time brief said. "There is no stopping point to this approach."

In addition to the news organizations, lawyers for Judith Miller, formerly a reporter for The New York Times, and Matthew Cooper, a Time reporter, filed separate briefs seeking to overturn subpoenas for their records. Each asserted that the request was too broad and sought material that had nothing to do with the charges against Mr. Libby.

Mr. Libby's lawyers had sought several categories of documents from NBC News and two of its well-known Washington journalists, Andrea Mitchell, a correspondent, and Tim Russert, moderator of "Meet the Press" and Washington bureau chief.

NBC News said in its brief that it had no documents that showed that any network employee, including Ms. Mitchell and Mr. Russert, knew that Ms. Wilson was employed by the C.I.A. before her identification in a newspaper column on July 14, 2003.

    News Organizations Try to Block Subpoenas for Notes in Leak Case, NYT, 19.4.2006, http://www.nytimes.com/2006/04/19/washington/19libby.html

 

 

 

 

 

Moussaoui's Mental Health Debated in Court

 

April 18, 2006
By THE ASSOCIATED PRESS
Filed at 11:57 p.m. ET
The  New York Times

 

ALEXANDRIA, Va. (AP) -- The defense portrayed Zacarias Moussaoui as a delusional psychotic Tuesday who reversed tactics and strategy constantly, while a prosecutor pointed out how well the confessed Sept. 11 conspirator has controlled his behavior under the stress of being on trial for his life.

Moussaoui himself best captured the day in one of his shouted comments on leaving court for a break: ''Crazy or not crazy? That is the question.''

Defense attorney Gerald Zerkin set the day on a course few juries have seen: He opened the defense team's files to show how they concluded their own client cannot be believed.

Struggling to save Moussaoui's life, they claim he twice testified falsely to a greater role than he had in the Sept. 11, 2001, al-Qaida attacks in hope of achieving martyrdom through execution or enhancing his role in history.

Moussaoui has claimed the court-appointed defense lawyers are plotting to kill him.

It fell to prosecutor David Novak to try to shore up Moussaoui's reputation with the jury.

The vehicle for both lawyers was the questioning of defense psychologist Xavier Amador, a prickly witness who corrected his questioners repeatedly. Zerkin's zest for detail and Novak's pugnaciousness combined with Amador's quibbling to produce a day of often tedious testimony about abstruse psychological concepts.

The jurors managed to pay attention, even take some notes, but a pair took brief catnaps during bench conferences. And the entire courtroom -- Moussaoui included -- laughed in relief at every lighter exchange, such as when Novak noted that both he and Moussaoui had been warned by the judge about their behavior and Amador replied, ''I won't compare you with Moussaoui.''

Amador diagnosed the 37-year-old Frenchman of Moroccan descent as a paranoid schizophrenic after observing his actions and writings since 2002. Zerkin led him through a listing of Moussaoui's erratic, often contradictory behavior and strongly held paranoid and delusional beliefs. Amador said these included:

--Moussaoui's conviction that President Bush will free him.

--His belief that if he sat with defense lawyers they would pretend he was attacking them so marshals would kill him.

--His claim that the FBI bugged his electric fan before he was arrested and knew all about the plans for the Sept. 11 attack and that he could clear up the mysteries of that attack if only he could tell that story in court.

--His demand for a Muslim lawyer, later dropped and then renewed.

--His insistence that he had nothing to do with 9/11 and his later claim that he was to hijack a fifth jetliner that day and fly it into the White House.

--His early effort to plead guilty and ask for the death penalty and his later vow to fight execution.

--His demand that defense lawyers stop filing motions because filing them violated his religion, followed by the dozens of motions he filed himself.

Amador noted that Moussaoui modified several of these on the stand. Moussaoui testified he really believed the defense lawyers only engaged in ''criminal ineffectiveness'' for not seeking a Muslim lawyer and a change of venue, even though documents demonstrated he knew they had pursued both ideas. Moussaoui also testified he was only concerned his fan was bugged, but a document indicated he was certain.

Amador said Moussaoui was trying to ''normalize'' his paranoid beliefs, a common practice among schizophrenics. In certain circumstances, ''they realize they've got to stop talking crazy,'' Amador said.

After Amador cited disorganized speech as evidence of illness, Novak pressed the psychologist on how Moussaoui was able to maintain the same story in two trips to the witness stand and to curb his abusive courtroom outbursts into the brief epithets he shouts to spectators after judge and jury leave. ''He's a goal-oriented person,'' Novak said.

Amador said Moussaoui's control was limited and he could not control his abusive language enough to remain his own attorney.

At a recess, Moussaoui said with a big smile, ''Beautiful terrorist mind,'' referring to the movie ''A Beautiful Mind,'' about a mathematician with schizophrenia.

Amador said his diagnosis was confirmed during an hourlong visit in June 2004 to Moussaoui's jail cell. When the doctor refused to go away, Moussaoui spat water at him more than a dozen times.

Government doctors with different conclusions will likely appear as rebuttal witnesses.

The jury has found Moussaoui eligible for execution. Although Moussaoui was in jail on Sept. 11, 2001, the jury ruled that lies he told federal agents before 9/11 kept them from identifying and stopping some of the hijackers. The jury must choose between execution and life in prison.

Associated Press writer Matthew Barakat contributed to this report.

    Moussaoui's Mental Health Debated in Court, NYT, 18.4.2006, http://www.nytimes.com/aponline/us/AP-Moussaoui.html?_r=1&oref=slogin

 

 

 

 

 

Psychologist Says Moussaoui Is Schizophrenic

 

April 18, 2006
The New York Times
By NEIL A. LEWIS

 

ALEXANDRIA, Va., April 18 — A defense psychologist told the jury considering whether to sentence Zacarias Moussaoui to death that he is a paranoid schizophrenic who believes that President Bush will soon set him free and that his court-appointed defense lawyers are engaged in a conspiracy to kill him.

Dr. Xavier Amador testified about an encounter with Mr. Moussaoui last April in the holding cell of the courthouse in which the trial is taking place. He said Mr. Moussaoui repeatedly spat water on him and exhibited several classic symptoms of schizophrenia, including sudden shifts in the defendant's views accompanied by denials that he had only moments earlier held the opposite views.

Under questioning by Gerald T. Zerkin, one of the court-appointed defense lawyers, Dr. Amadeor picked apart Mr. Moussaoui's testimony last week in which he seemed to offer rational, if not plausible explanations for his odd behavior over the previous four years. For example, Mr. Moussaoui had regularly charged that his lawyers, whom he reviles, were part of a conspiracy to kill him.

Last week, Mr. Moussaoui seemed to soften that, saying he did not mean that in the literal sense, as if they were communicating with the White House. He meant that they were providing ineffective counsel, had not sought a change of venue from Alexandria, which is near the Pentagon, and refused to find a Muslim lawyer as he had urged.

Mr. Zerkin today used the questioning of Dr. Amador to show that those assertions were false. Dr. Amador read letters and other communications between Mr. Moussaoui and his lawyers that showed they had tried to find a Muslim lawyer to help and that this was a sign of schizophrenia in that he "was not able to process that reality."

The effect of trying to show that Mr. Moussaoui is mentally impaired may be limited, however. The testimony about Mr. Moussaoui's mental state is not part of any effort to use insanity as a defense; he has already pleaded guilty to conspiracy in connection with the Sept. 11, 2001, terrorist attacks and the jury has already ruled unanimously that he is eligible for the death penalty.

The only question now before the jury is whether he should be executed or sentenced to spend the remainder of his life in prison.

Under the complicated federal death penalty law, the jurors are supposed to weigh mitigating factors like Mr. Moussaoui's mental health against aggravating factors that measure the heinousness of the crime.

Prosecutors have already presented a parade of witnesses, including family members of people killed on Sept. 11, to testify about their continuing grief and loss. These have established a set of aggravating factors that will be difficult to overcome by arguments that Mr. Moussaoui was mentally impaired or experienced an unfortunate childhood in France.

The case is expected to go to the jury by the end of this week.

    Psychologist Says Moussaoui Is Schizophrenic, NYT, 18.4.2006, http://www.nytimes.com/2006/04/18/us/18cnd-moussaoui.html?hp&ex=1145419200&en=34e7e27405036539&ei=5094&partner=homepage

 

 

 

 

 

U.S. Takes First Shots at Skilling

 

April 18, 2006
The New York Times
By ALEXEI BARRIONUEVO and VIKAS BAJAJ

 

HOUSTON, April 17 — A prosecutor in the Enron fraud trial bore in on the credibility of Jeffrey K. Skilling on multiple fronts Monday, suggesting that the former chief executive knew the company was in trouble when he tried to sell shares and that he failed to disclose his interest in a small company run by a former girlfriend.

After a week of making strident denials that he conspired to defraud Enron's investors, Mr. Skilling withstood a barrage of questions as the prosecutor, Sean M. Berkowitz, the head of the Justice Department's Enron Task Force, opened his cross-examination. Legal specialists consider Mr. Skilling's cross-examination a crucial phase of the trial, now in its 12th week.

Sensing the importance of the moment, dozens of lawyers and Houston citizens packed the ninth-floor courtroom here, as well as a fourth-floor overflow room where the proceedings were shown on television monitors. In the courtroom, Kenneth L. Lay, Enron's founder and Mr. Skilling's co-defendant in the case, watched impassively as Mr. Berkowitz questioned Mr. Skilling.

Mr. Berkowitz established early on that he would not tread lightly on the former chief executive. Often sarcastic, the Chicago-based prosecutor sought to rein in Mr. Skilling. During an exchange about Mr. Skilling's desire to rid Enron of unprofitable international assets, Mr. Berkowitz cut him off when he tried to further explain himself. "I certainly want you to answer my questions, but I don't want to hear any speeches. Do you understand?" Mr. Berkowitz asked.

When Mr. Skilling again tried to respond more fully, Mr. Berkowitz persisted: "Do you understand?"

"I will try to answer your questions to the best of my ability," Mr. Skilling finally offered.

The cross-examination began shakily for Mr. Skilling. In the opening hours, he acknowledged he had failed to disclose to Enron's board a personal investment in an online photo-sharing company run by a former girlfriend. He recalled investing $60,000 in the company, Photofete, which did $454,000 of business with Enron. Mr. Skilling previously told the Securities and Exchange Commission that he recalled investing about $3,000 in the venture.

But Mr. Berkowitz presented a series of checks Mr. Skilling wrote to Photofete and a photographer, Jennifer Binder, whom he acknowledged having dated, totaling $180,000 and showed that 76 percent of the company's sales came from Enron.

Mr. Skilling recalled telling Mr. Lay about his interest in the company, but conceded that he did not tell the board and did not tell either Mr. Lay or the board about his relationship with Ms. Binder.

He acknowledged in response to a question that it might have been a conflict of interest.

In a telephone interview yesterday, Ms. Binder said she could not recall precisely how much Mr. Skilling invested in her business, but said that it was $30,000 to $200,000 and was a small portion of the $1.8 million she raised for Photofete. She acknowledged that Enron was her biggest client at the time, "but it wasn't through Jeff that I got that business."

Mr. Berkowitz also peppered Mr. Skilling with questions about his sales of Enron stock. Mr. Skilling again denied accusations that he sold shares just weeks after resigning as Enron's chief executive because he had insider knowledge that Enron faced accounting scrutiny and myriad problems with its business units and international assets.

Mr. Skilling told the S.E.C. and he testified last week that he sold shares only because he was worried about the economy after the terrorist attacks on Sept. 11, 2001, and wanted to diversify his stock holdings, which were concentrated in Enron stock.

But Mr. Skilling struggled again on Monday to explain his attempt to sell 200,000 shares on Sept. 6, 2001. The sale did not go through, because his broker sought a letter from Enron confirming that Mr. Skilling was no longer an officer of the company and was not restricted in selling his shares. Later, on Sept. 17, Mr. Skilling called his broker and entered a fresh order to sell 500,000 shares, a sale that did go through.

Mr. Skilling said last week that he did not recall that specific trade, and Mr. Berkowitz sought to highlight those past remarks to raise doubt about Mr. Skilling's motivations for selling stock.

"It's your testimony that you don't have a specific recollection of the Sept. 6 trade and you have gone back and tried to piece it together with evidence?" Mr. Berkowitz asked.

"Yes," Mr. Skilling said.

Mr. Berkowitz also suggested that Mr. Skilling warned close family members about oncoming problems at the company. In the fall of 2000, Mr. Skilling as well as his former wife, Susan, and his girlfriend then, Rebecca Carter, sold millions of dollars worth of Enron stock within weeks of one another.

Mr. Skilling said he was not aware of the sales and did not encourage the women to sell. "You are suggesting there was no relationship?" Mr. Berkowitz said.

"There was no relationship," Mr. Skilling said, adding that he had talked to his brothers Mark and Tom during a break in the trial, "and they said you did not tell us to sell our shares." The response elicited a few laughs in the courtroom.

At another moment, Mr. Berkowitz — seizing on an opportunity when Mr. Skilling compared the regulatory environment in California to that of Brazil — suddenly stopped and stared at Mr. Skilling. "Do you think it was funny what happened in California? You're smiling."

Mr. Skilling seemed to be taken aback by the question. He said he felt the state of California was unfairly taking aim at Enron. Asked if he regretted making light of California's energy crisis, Mr. Skilling acknowledged making a joke and said he regretted it.

Mr. Berkowitz also pressed Mr. Skilling to explain why Mr. Lay's personal calendar recorded a meeting with Mr. Skilling just three hours before Mr. Lay met with Sherron S. Watkins, a former Enron vice president who had written a letter warning that Mr. Skilling's abrupt departure would raise concerns about accounting improprieties and saying she was nervous that the company "would implode in a wave of accounting scandals."

Mr. Skilling said he did not discuss Ms. Watkins's concerns with Mr. Lay that day, just one week after Mr. Skilling resigned on Aug. 14.

"I remember the meeting being upbeat," Mr. Skilling said.

Mr. Skilling is accused of conspiracy, fraud and insider trading. Mr. Lay also faces fraud and conspiracy charges and is expected to take the stand later in the trial, possibly as early as next week. The men face decades in federal prison if convicted.

Mr. Berkowitz suggested yesterday that Mr. Skilling had spent the last four and a half years preparing and "tailoring" his testimony with all the available notes, documents and other evidence in the case.

"I have nothing to hide, Mr. Berkowitz, so I don't think it's a question of tailoring your testimony," Mr. Skilling said. "I will respond to your questions to the best of my ability."

At one point, Mr. Berkowitz asked Mr. Skilling about his use of a jury consultant, Reiko Hasuike, to sharpen his testimony and be more persuasive to jurors. Mr. Berkowitz pointed to Ms. Hasuike, who sits in the courtroom in the front row furthest from the jury, and displayed Ms. Hasuike's Web site to show jurors the kinds of services she specializes in.

Mr. Skilling conceded he had corrected pieces of testimony after consulting with his lawyer, Daniel Petrocelli, during breaks. He said Ms. Hasuike helped him simplify his answers. "I tend to get technical," he said.

In a series of questions about Enron's underperforming international assets, which the company was trying to sell in 2000 and 2001, Mr. Berkowitz tried to demonstrate that Mr. Skilling was not completely forthright about the health of the company.

Mr. Skilling said he had acknowledged that the company's power plants and other assets in developing countries were not profitable, but that he advised against selling them because they would fetch better prices later. He said other American companies faced similar challenges in deciding when to sell assets and began to offer an analogy to General Motors.

Mr. Berkowitz cut him off. "Let's not talk about General Motors," he said. "Enron went bankrupt three months after this."

Mr. Skilling, becoming red-faced, replied: "For reasons that in my view were totally unrelated to this."

    U.S. Takes First Shots at Skilling, NYT, 18.4.2006, http://www.nytimes.com/2006/04/18/business/businessspecial3/18enron.html

 

 

 

 

 

Former Governor of Illinois Guilty of Graft Charges

 

April 18, 2006
The New York Times
By MONICA DAVEY and GRETCHEN RUETHLING

 

CHICAGO, April 17 — George Ryan, the former governor of Illinois who drew international notice by declaring a moratorium on the death penalty in his state, was convicted on Monday in a sweeping federal corruption case.

After more than five months of complex testimony and five weeks of still more tangled deliberations, a jury found Mr. Ryan, a Republican, guilty of all 18 felony charges against him, including racketeering conspiracy, mail fraud, tax fraud and making false statements to the Federal Bureau of Investigation.

Mr. Ryan, 72, who served one term as governor until 2003 and two terms as the secretary of state before that, has been seen as an old-fashioned Illinois politician: more dealmaker (complete with a favored cigar and a cocktail) than ideologue. In some ways, his case put the state's brand of politics on trial, asking jurors to draw a firm line between what was a crime and what was just another day in Springfield, the capital.

In the end, jurors sided with the office of the United States attorney, Patrick J. Fitzgerald, who is also the special prosecutor in the C.I.A. leak case in Washington, in finding that the former governor had granted state business to his associates in exchange for cash and gifts for himself, his family and others. Jurors said they had found no single "smoking gun," just layer upon layer of evidence, all of which, one juror said, added up to a painful education about what had happened at the highest levels of Illinois government.

Mr. Ryan, who calmly greeted court workers as he arrived on Monday, gave no reaction as the verdicts were read. Prosecutors said they had not determined which penalties they would seek, but the counts carry maximum sentences of 3 years to 20. Sentencing is set for August, but as Mr. Ryan left the courthouse for home, he vowed to appeal.

"I believe this decision today is not in accordance with the kind of public service that I provided to the people of Illinois over 40 years," he said, "and needless to say, I am disappointed in the outcome."

Mr. Ryan is the latest governor accused of ethical lapses in recent years. Former Gov. John G. Rowland of Connecticut was found guilty of accepting gifts from state contractors, and Gov. Bob Taft of Ohio pleaded no contest to misdemeanor ethics violations. Both are Republicans.

Until Mr. Ryan left office, Republicans had controlled the Illinois governorship for nearly 30 years. Many Republicans blamed his problems for their recent losses in other state and federal races, and political analysts said those claims were likely to pick up steam.

With the Illinois governor's job up for election this fall, Republicans will have to work to distance themselves from Mr. Ryan. In the Republican primary election in March, one opponent was already using commercials featuring old film of Judy Baar Topinka, the state treasurer and now the Republican Party's nominee, dancing the polka with Mr. Ryan.

Mr. Ryan's conviction comes as investigations continue into the administrations of some leading Democrats as well: Gov. Rod R. Blagojevich, who is seeking re-election, and Mayor Richard M. Daley of Chicago.

"At his core, George Ryan is quintessential Illinois politics: power-oriented, jobs-winning, control kind of politics," said Kent Redfield, a political science professor at the University of Illinois at Springfield. "There is an excess here, but this is not a bad person corrupting a good system."

Outside Illinois, Mr. Ryan is perhaps best known for his finding, in the final 48 hours of his term as governor, that the state's capital punishment system was broken. Once a supporter of the death penalty, he was later nominated for a Nobel Peace Prize for commuting more than 160 death sentences.

But during the trial, witnesses and lawyers were barred from mentioning Mr. Ryan's actions on the death penalty before the jurors.

Prosecutors focused on what they said was Mr. Ryan's method of handling his public offices: putting a "for sale" sign on the door. Mr. Ryan and his family received vacations, money, tickets to events and other items, totaling at least $167,000, and in return offered political favors and state business, the prosecutors said.

"People now know that if you're part of a corrupt conduct, where one hand is taking care of the other and contracts are going to people, you don't have to say the word 'bribe' out loud," Mr. Fitzgerald said. "And I think people need to understand we won't be afraid to take strong circumstantial cases into court."

Although Mr. Ryan held the highest office of those under scrutiny, 79 state workers, business leaders and others have been charged in the federal investigation, which started here eight years ago. In addition to Mr. Ryan, his friend Lawrence E. Warner, 67, a businessman, was also convicted Monday of receiving commissions from leases and contracts with Mr. Ryan's office.

Neither man testified. But throughout the trial, Mr. Ryan's lawyer, Dan K. Webb, a former federal prosecutor, said Mr. Ryan had not broken the law.

On Monday, Mr. Webb expressed dismay with the verdict and raised questions about "unusual developments of the jury" in recent weeks.

After hearing testimony from 83 witnesses and being handed 148 pages of instructions from the court, the jury seemed to struggle. During deliberations, two jurors were removed after The Chicago Tribune revealed arrest records they had failed to disclose. The two were replaced with alternates, and the jury began its deliberations once more.

Shia Kapos contributed reporting for this article.

    Former Governor of Illinois Guilty of Graft Charges, NYT, 18.4.2006, http://www.nytimes.com/2006/04/18/us/18ryan.html?_r=1&oref=slogin

 

 

 

 

 

Witness details Moussaoui's instability

 

Updated 4/17/2006 7:06 PM ET
USA Today

 

ALEXANDRIA, Va. (AP) — After an impoverished childhood afflicted by a violent, alcoholic father, Sept. 11 conspirator Zacarias Moussaoui embraced radical Islam as a young adult when anti-Arab racism and his background thwarted his desire to become an international businessman, defense witnesses testified Monday.

 

Struggling to save Moussaoui from execution, court-appointed defense lawyers called a clinical social worker, Moussaoui's high school friends and his older sisters to try to offset his second damaging appearance on the witness stand last week. Clinical social worker Jan Vogelsang testified it was not her purpose to make excuses for Moussaoui's actions but to understand how he reached that point.

They described a boy who witnessed violence at home and endured five stints in orphanages by age 6, frequent moves and deep poverty but nevertheless became an engaging and fun-loving teenager known for his smile and his ambition.

His Moroccan ancestry and lack of family financial backing, however, helped block his ambitions, first in France and then in London. He withdrew from family and friends in 1995, gained weight, shaved his head and took up Islamic fundamentalism, these witnesses said.

The testimony drew a mixture of reactions. Jurors took notes as copiously as at any point in the trial during Vogelsang's testimony.

But leaving court for a break after the judge and jury had gone, Moussaoui said loudly, "It's a lot of American B.S."

Though slumped in his chair, even Moussaoui couldn't take his eyes off most of the videotaped testimony, taken in France last December, from his sister Jamilla.

She described her younger brother as "a pretty little baby, always smiling. ... He was the little sweetheart of the family."

But she also described the abusive atmosphere caused by their father, Omar, who repeatedly beat Jamilla and his wife, Aicha. "He almost killed me; he tried to kill me," she said. When her mother had money for food, "he ate everything and left us nothing."

As Aicha moved her four children from town to town while struggling to learn French and hold multiple menial jobs, Omar followed them around even after their divorce in 1972, she said. "Each time he reappeared in our lives, it was to traumatize us," she testified. "He poisoned our lives. He left us completely destitute. ... He was a man who never should have had children."

When Moussaoui returned from England for a visit in the mid-1990s, however, "he was very turned inward on himself," she said. "I no longer liked discussions with him."

At that point, Moussaoui turned away from the screen.

Omar is now hospitalized in France for treatment of bipolar disorder. Jamilla has a guardian and is treated for schizophrenia. The oldest sister, Nadia, also has a guardian and is being treated for psychosis with schizophrenic features, records showed.

Vogelsang said Moussaoui's mother provided little supervision and no religious training. The family celebrated Christian and Islamic holidays because Aicha wanted her children to integrate into French culture, the clinical social worker said.

She said that children with childhoods like Moussaoui's fail to develop normal resilience and adaptability to life's setbacks. They make poor choices of role models and fail to deal with feelings of aggression, she testified, and such family conditions "would place someone at risk to wind up in serious circumstances later in life."

On cross-examination, prosecutor David Novak tried to undercut the tone of inevitability that Vogelsang had struck. He got her to acknowledge that Moussaoui's older brother, Abd Samad Moussaoui, emerged from the same family to become an engineering teacher rather than a terrorist.

Novak also stressed that Vogelsang never interviewed Moussaoui herself. Moussaoui wouldn't agree to be interviewed, but she talked with 50 family members, friends, social service workers and teachers and reviewed records.

As a teenager, Moussaoui was rejected as a "dirty Arab" by the family of his longtime girlfriend, Vogelsang said. Although barred from her family's home, he won dance contests with Karine Blocat and lived with her briefly during their long relationship.

Two high school buddies from France, Fabrice Guillen in court and Christophe Marguel on videotape, testified how much Moussaoui liked to have fun, party and play sports. Guillen said Moussaoui's hero was Martin Luther King Jr.

Both said he encountered racism in France. He was barred from clubs because of his skin color, Guillen said. "He said it wasn't a big deal ... but we all knew it bothered him."

Marguel called Moussoaui "lively, a teasing person who liked to have fun." But he added that Moussaoui had "a very hard time" dealing with racism.

Gilles Cohen, who met 18-year-old Moussaoui in 1986, said they became good friends and that his family even put Moussaoui and his brother up for several months in 1990 when they left their mother's home in a dispute over their desire to use all their finances for education.

They talked regularly about the Israeli-Palestinian conflict, Cohen said, and found it "hard to understand why two peoples from the same area are enemies."

"I am a Jew; he is an Arab, and we were best friends," Cohen said. "We were proud we exemplified how two peoples could come together."

But Vogelsang and all the French friends described Moussaoui as struggling to survive economically, with no family support, in England where he went in 1992. He wanted to learn English and study international business and got a master's degree from South Bank University in 1995, but by then he had begun to study Islam and had fallen in with radicals who frequented London mosques.

"He started shaving his head and wearing a beard," Vogelsang said. On visits home, "he was fussing at his sisters for how they dressed," calling one sister a "whore" for dressing in Western clothing.

Moussaoui has been found eligible for execution by the jury. Even though he was in jail in Minnesota at the time of the Sept. 11 attacks, the jury ruled that lies he told federal agents a month before the attacks kept them from identifying and stopping some of the hijackers. The jury must choose between execution and life in prison.

    Witness details Moussaoui's instability, UT, 17.4.2006, http://www.usatoday.com/news/nation/2006-04-17-moussaoui_x.htm

 

 

 

 

 

Moussaoui said mentally ill, mistreated as child

 

Mon Apr 17, 2006 7:28 PM ET
Reuters
By Deborah Charles

 

ALEXANDRIA, Virginia (Reuters) - Defense lawyers trying to save Zacarias Moussaoui's life presented evidence on Monday that the September 11 conspirator was a schizophrenic who had an abusive father and an unsettled childhood.

Witnesses were brought forward to try to blunt the impact of Moussaoui's recent testimony on the first day back in court since he announced that he had no remorse for the September 11 hijackings and said he wished Americans more pain.

Moussaoui has pleaded guilty to six counts of conspiracy in connection with the September 11 attacks and his lawyers are trying to convince the 12-person jury not to sentence him to death.

Dr. Xavier Amador, a witness who is an expert in schizophrenia, said he had diagnosed Moussaoui with the disease and said several other experts had confirmed his opinion.

Several witnesses, including Moussaoui's two sisters, said he had a rough childhood and an abusive father who beat all four siblings and their mother.

"Zacarias ... suffered from not having been loved by his father," said his oldest sister, Nadia, in videotaped testimony. "We were terrorized."

Clinical social worker Jan Vogelsang said Moussaoui was in and out of orphanages for the first six years of his life, as his mother struggled to deal with her four children while trying to separate from her abusive husband.

As he grew up, Moussaoui was seen by his friends as outgoing and fun. Several childhood friends from France said Moussaoui enjoyed parties and going out at night as a teenager.

One friend, Gilles Cohen, said he and Moussaoui had often joked about how they could be friends even though Cohen was Jewish and Moussaoui was of Moroccan descent.

Cohen's testimony came shortly after Moussaoui yelled "death to the Jew" at a break. Moussaoui often yells out curses after the judge and jury leave the room and has frequently targeted Jews, including his lawyer Gerald Zerkin.

Moussaoui's friends said he changed after he went to London in 1992 to study international business and learn English. They said had become much more serious about Islam, had grown a beard and was less outgoing.

An imam at the mosque Moussaoui first attended in London said Moussaoui was initially pleasant and eager to learn about Islam but then got involved with fundamentalists.

In videotaped testimony, Brixton mosque chairman Abdul Haqq Baker said he eventually asked Moussaoui to leave the mosque once he got involved with more extremist Muslims. Baker said Moussaoui became disrespectful and he was concerned he might try to spread extremist views.

    Moussaoui said mentally ill, mistreated as child, R, 17.4.2006, http://today.reuters.com/news/articlenews.aspx?type=topNews&storyid=2006-04-17T232807Z_01_N17299639_RTRUKOC_0_US-SECURITY-MOUSSAOUI.xml

 

 

 

 

 

Reporter's Notebook

Logic Turns Upside-Down During Moussaoui Trial

 

April 17, 2006
The New York Times
By NEIL A. LEWIS

 

ALEXANDRIA, Va., April 14 — The trial of Zacarias Moussaoui has provided opportunities for followers in the courtroom to discuss which moment in the regularly odd proceeding is the oddest. The prize-winning occasion may have occurred when Mr. Moussaoui took the stand for the second time last week.

He quickly became embroiled in an argument with Gerald T. Zerkin, one of his court-appointed lawyers, who, despite Mr. Moussaoui's skepticism, is trying to prevent the Justice Department from executing him. The bizarre moment: the chief prosecutor, Robert A. Spencer, who is without doubt trying to have Mr. Moussaoui executed, rose to Mr. Moussaoui's defense, objecting that Mr. Zerkin was badgering the witness.

Of course, the upside-down nature of Mr. Moussaoui's status as a witness exists because Mr. Zerkin and his team are eager to demonstrate that Mr. Moussaoui is mentally unstable, and they are content to have an argument with him that may demonstrate that to the jury.

Mr. Spencer, on the other hand, is reluctant to have the jury — which will soon decide whether to order Mr. Moussaoui's execution — be shown signs that Mr. Moussaoui may not think in a logical manner.

Judge Leonie M. Brinkema has presided over the trial, now in its seventh week, with the tolerant air of a veteran high school teacher trying to maintain order in the pre-law club. She ruled against Mr. Spencer.

 

Departing Potshots

After each court session, Mr. Moussaoui engages in what has become a familiar ritual. As he leaves the courtroom escorted by marshals, he shouts some imprecation, often, "God curse you, America."

Twice he sang "Burn in the U.S.A.," to the tune of the similar Bruce Springsteen song. Another time, he shouted that the trial was "a cyberlynching," using a phrase reminiscent of the famously evocative claim by Clarence Thomas in his 1991 Supreme Court confirmation hearing that he was being subjected to a "high-tech lynching."

 

Shadow Testimony

Because Mr. Moussaoui pleaded guilty last year to conspiracy charges in connection with the Sept. 11 attacks, the trial has been only to determine if he is to be sentenced to death or sent to prison for the rest of his life. Under the complicated federal death penalty law, the trial has been divided into two phases.

In the first phase, the jury had to consider whether Mr. Moussaoui could be held responsible for some of the deaths of Sept. 11, 2001, even though he was in jail at the time, having been arrested three weeks earlier in Minnesota.

It was a vexing issue, but the jury unanimously agreed with prosecutors that Mr. Moussaoui was responsible and thus eligible for the death penalty because he lied to investigators about his knowledge of Qaeda plans to fly planes into buildings.

The jurors heard, and apparently discounted, the words of two senior Qaeda planners of the Sept. 11 attacks, who said that Mr. Moussaoui had not been part of the plot. Lawyers aiding the defense recited the statements of Khalid Shaikh Mohammed, the chief planner, and Mustafa Ahmed al-Hawsawi, a principal financier, in what resembled a literary reading at a bookstore.

As the jury considered whether Mr. Moussaoui, the only person to be charged in an American courtroom with the Sept. 11 plot, was involved in it enough to serve as a proxy for the 19 hijackers who died that day, no one mentioned an obvious issue. What about the involvement of those who gave testimony about the plot who are in American custody? Why aren't they on trial?

The answer, not shared with the jury, is that those Qaeda officials, who include another financier and the man who was supposed to be the 20th hijacker, are being held overseas in the Central Intelligence Agency's secret prison system and have been subjected to interrogation techniques that would make it difficult to bring them to trial.

 

Courtroom Attire

Mr. Moussaoui enters the courtroom for each session at the same time as Judge Brinkema enters from a different side door and spectators are ordered to stand. The drill seems designed to eliminate a situation that occurred earlier, when he entered the courtroom before the judge, took his seat and refused to stand.

He sits on the side of the courtroom, sometimes seemingly muttering prayers, sometimes paying attention to the proceedings and often looking detached. He is always clad in a green jumpsuit with the word "Prisoner" on the back and a white knit cap. Sometimes he pushes the cap back to reveal a large and nasty bruise on his forehead, apparently from banging his head on the floor.

Underneath the jumpsuit, he is fitted with a stun belt that is controlled by one of the marshals, who could use it should Mr. Moussaoui lunge at a trial participant.

The belt's batteries are changed frequently.

 

Jurors Are Dry-Eyed

In the second phase of the trial, in which the jury is considering whether the heinousness of the crime warrants execution, the government has presented a parade of family members who have testified tearfully about their grief and the enduring impact of the crime on them.

It was a well-planned selection of witnesses that included an assortment of races, accents and backgrounds united in grief. Wives testified movingly about lost husbands, husbands about lost wives, children about lost parents and firefighters about lost buddies.

The jury heard some of the terrible circumstances thrown up that day, like the account of a man whose wife was in the World Trade Center for a meeting. Unbeknownst to him, his brother was also there, as a chef at Windows on the World, having agreed to substitute for a friend so he could take a relative to the doctor.

The jurors have been constantly scanned for their reaction to the emotional testimony. But they have been remarkably stoic, only a couple seeming to show a bit of upset. More reporters and federal agents have been seen red-eyed than jurors.

 

The Defendant's Future

If the jury does not order Mr. Moussaoui's execution, he will be sentenced to life in prison, almost certainly at the maximum security prison in Florence, Colo. A witness testified that his life would be bleak and he would deteriorate under a regime of isolation.

If he were sentenced to death, he would be executed by lethal injection at the federal government's execution chamber at a prison in Terre Haute, Ind. While several defendants have been sentenced to death under the revised federal death penalty law, only three have been executed. The first was Timothy J. McVeigh, the Oklahoma City bomber.

Mr. Moussaoui was asked Thursday by Mr. Spencer if he knew who Mr. McVeigh was. "Yes, sir," he said. "Timothy, the greatest American."

    Logic Turns Upside-Down During Moussaoui Trial, NYT, 17.4.2006, http://www.nytimes.com/2006/04/17/us/nationalspecial3/17moussaoui.html

 

 

 

 

 

Appeals Court Bars Arrests of Homeless in Los Angeles

 

April 15, 2006
The New York Times
By RANDAL C. ARCHIBOLD

 

LOS ANGELES, April 14 — A federal appeals court panel ruled on Friday that arresting homeless people for sleeping, sitting or lying on sidewalks and other public property when other shelter is not available was cruel and unusual punishment.

The 2-to-1 ruling, by the United States Court of Appeals for the Ninth Circuit, in San Francisco, essentially invalidated a 37-year-old ordinance that the police have used to clear homeless people off the streets.

Legal experts said the case, which they believed to be the first involving the rights of homeless people in public spaces to reach the federal appellate level, would be closely followed by cities nationwide.

The Los Angeles ordinance had gone largely unenforced until recent years when the police began cracking down on illicit behavior in the Skid Row area of downtown, which has one of the largest concentrations of homeless people in the country.

The ordinance states "no person shall sit, lie or sleep in or upon any street, sidewalk or public way" under threat of a $1,000 fine and possible jail term of up to six months.

The court, in striking down the convictions of six people charged under the ordinance, called it "one of the most restrictive municipal laws regulating public spaces in the United States" and cited the example of other cities, like Portland, Ore.; Tucson; and Las Vegas, that have enacted similar ordinances but limited enforcement to certain times of day or designated places.

The Eighth Amendment, barring cruel and unusual punishment, prohibits Los Angeles "from punishing involuntary sitting, lying, or sleeping on public sidewalks that is an unavoidable consequence of being human and homeless without shelter," Judge Kim McLane Wardlaw wrote.

The Los Angeles police responded by releasing a statement that said: "The condition of being homeless in and of itself is not a crime and should not be treated as such. But the criminal element that preys upon the homeless and mentally ill will be targeted, arrested and prosecuted to the fullest extent of the law."

It added, "The department will continue to work with the city's political leadership and the courts to find solutions to help keep the homeless safe and off the streets."

A spokeswoman for the city attorney's office, Contessa Mankiewicz, said, "We are disappointed, and we are reviewing our options." She said that the ordinance was not often prosecuted but that statistics were not immediately available.

The police in Los Angeles, which has been wrestling with how to reduce a homeless population that by some counts is the largest in the country, have used the ordinance in an effort to clean up Skid Row, a 50-block area east of downtown that has long been home to the down and out.

There, some 10,000 to 12,000 homeless people live near new condominiums and apartment buildings that have arisen in an explosion of gentrification. The ruling said there was shelter for 9,000 to 10,000 homeless people in that area, leaving about 1,000 people or more without a roof over their heads.

"So long as there are a greater number of homeless individuals in Los Angeles than the number of available beds, the city may not enforce" the ordinance, the judges said.

The case was filed in February 2003 by the American Civil Liberties Union of Southern California and the National Lawyers Guild on behalf of six homeless people who had been ticketed in Skid Row and in some cases jailed briefly or ordered to pay fines. The appeals court's ruling on Friday overturns a district court ruling in favor of the city.

The court sent the case back to the district court to write an injunction barring enforcement of the law.

In a dissent, Judge Pamela Ann Rymer said the ordinance "does not punish people simply because they are homeless," and added, "It targets conduct — sitting, lying or sleeping on city sidewalks — that can be committed by those with homes as well as those without."

She added, "We do not — and should not — immunize from criminal liability those who commit an act as a result of a condition that the government's failure to provide a benefit has left them in."

Legal experts said it was unusual to win a case based on the Eighth Amendment, and even more so because it was directed at regulating the homeless.

Gary Blasi, a professor at the University of California at Los Angeles law school who has studied legal issues involving the homeless, called the ruling significant. "This is one of the very few cases, certainly for this level of the judicial system, that says to government that you can't criminalize the mere fact of being homeless," Mr. Blasi said. "The city can regulate times and places, but you can't forbid people from occupying the face of the earth."

Advocates for the homeless cheered the ruling. "The fact this court has ruled on this law in this way has a message, and our hope is cities will get the point that you can't respond to homelessness by trying to eliminate homeless people," said Maria Foscarinis, executive director of the National Law Center on Homelessness and Poverty, a legal advocacy group in Washington.

    Appeals Court Bars Arrests of Homeless in Los Angeles, NYT, 15.4.2006, http://www.nytimes.com/2006/04/15/us/15homeless.html

 

 

 

 

 

Hurt by Hamas, Americans Sue Banks in U.S.

 

April 15, 2006
The New York Times
By JULIA PRESTON

 

Not one but two Palestinian suicide bombers blew themselves up on a Jerusalem boulevard where an American college student, Jason Kirschenbaum, was strolling one night in December 2001. The blast shattered his left arm and hammered chunks of metal into his leg. But at least, he says, it left him alive.

Five months later, a suicide bomb blast hurled Gloria Kushner, a nurse, against a stand in an outdoor market, wrenching her spine. On a crowded bus, another bomber's shrapnel carved a hole in the shoulder of Sarri Singer, a youth group volunteer. Eugene Goldstein has a bullet lodged near his heart from an ambush. He does not have his son, who was killed at his side.

They are Americans who went to Israel and came home with enduring wounds after they were caught in attacks claimed by Hamas, the militant Islamic organization that took over the Palestinian government last month.

These victims of terrorism in a foreign land seek more than healing; they want justice, but lack a clear remedy. So they are trying a novel strategy: going after banks they say helped to finance Palestinian terrorism.

They are among some 50 Americans — either survivors or relatives of people killed in attacks — who have filed multimillion dollar suits in federal court in Brooklyn against three prominent international banks, Arab Bank, NatWest and Crιdit Lyonnais. The suits charge that the banks helped to channel funds to Hamas, which the United States designated as a terrorist organization in 1997. Some of the suits claim that Arab Bank transferred millions of dollars in life insurance payments from a Saudi charity to families of suicide bombers, providing Hamas with a recruiting tool.

The three banks are vigorously challenging the lawsuits. They say many of the financial transactions were tiny electronic blips in their routine international business and that they were not aware of any links to Hamas or terrorism. In a motion to dismiss one of the cases, a lawyer for NatWest and Crιdit Lyonnais, Lawrence B. Friedman, said the plaintiffs' efforts "to foist responsibility for their tragic circumstances" onto the banks were "misguided" and had no legal basis.

The prospects for the plaintiffs are uncertain. The suits against Arab Bank have survived a motion for dismissal, the first major hurdle in any lawsuit, but the judge in the suits against the other two banks has not yet ruled on dismissal motions.

Anti-terror litigation of this sort has few precedents. The suits are the first to focus on international banks, saying they were a central link in terror finance. In 2004 a federal court in Chicago ordered three Islamic charities and a fund-raiser in the United States to pay $156 million in damages to the parents of David Boim, who was killed by Hamas. But federal suits against Saudi Arabia's royal rulers, charging they financed al Qaeda in advance of Sept. 11, have largely been rejected by the courts.

The plaintiffs in the banking lawsuits have felt a new urgency to their cause since Hamas took over the Palestinian Authority on March 30, after winning elections in January. The United States and the European Union have cut off direct aid to the authority, and Middle Eastern banks are looking warily at handling its business, in part because of the New York suits.

While the lawyers do battle in testy letters and dense briefs, the survivors cope with injuries and memories that leave them feeling isolated.

Mr. Kirschenbaum, 22, who had left his home in New Rochelle, N.Y., for a year of study at an Israeli yeshiva, recalls the easygoing mood on Ben Yehuda pedestrian mall in Jerusalem as young people flocked there on Saturday night, Dec. 1, 2001.

The two bombers detonated themselves at opposite ends of the street within seconds of each other. One was 20 feet away. With blood dripping from his pants cuff and his left arm limp, Mr. Kirschenbaum stumbled up the street. A friend took him to a hospital. Hamas soon claimed responsibility for the bombings.

The bomber near Mr. Kirschenbaum had been wearing a jacket stuffed with nails and other bits of metal. Israeli doctors dug half a dozen nuts out of Mr. Kirschenbaum's arms and legs and repaired his fractured arm. But they could not repair his outlook. He was fearful of staying in Israel, but did not feel entirely right back at home either, eventually leaving college without graduating to join his father's diamond business.

"You get all these questions," he said. "People would ask me, so what happened? How did you take it? All these questions. I would answer them. But I didn't believe anybody understood what I was going through."

Mrs. Kushner, the nurse, had recently left Florida to resettle in Israel when she was caught in the blast at the open-air market in Netanya, on the coast, on May 19, 2002. Now 69, she lives behind a scrim of pain from her damaged spine and a knee that is still painful. She had to give up her life in Israel, returning to Florida for medical care. Her days are migrations from one doctor's office to another. Her nights bring dreams of ambulances and screaming. She hopes the suits will bring financial relief from the costs of the special orthopedic treatment she needs.

For years, Mrs. Kushner said, she felt defeated, though that is changing. "I thank God for every new day. I thank him that I'm a survivor of terrorism," she said.

Ms. Singer, now 32, was in a hurry to meet a friend for a drink after work in Jerusalem on June 11, 2003. Ignoring caution, she jumped on a crowded No. 14A bus. By chance, a seat opened up. Moments later, a Hamas bomber, dressed in a prayer shawl as an orthodox Jew, blew himself up in the aisle, killing 17 people, including everyone between himself and Ms. Singer.

She remembers screaming so long that her throat ached. The shrapnel split her clavicle. That wound healed, but she has a perpetual low hissing in one ear.

Ms. Singer took the attack as a sign that she should live life even more vigorously. "Obviously, my time isn't up yet," she says. "I have more to do here."

The daughter of a New Jersey state senator, Robert W. Singer, a Republican of Jackson, Ms. Singer had been living in Israel as a volunteer for Jewish youth groups. Now she runs an Internet radio program for young American Jews and still travels regularly to Israel. She pushes herself, she said, as a way of defying the Palestinian youth who tried to kill her.

For the survivors, the lawsuits are also a means of defiance. The first was filed in July 2004 against Arab Bank, based in Jordan, which with $27 billion in assets is a leading financial institution in the Middle East. It is accused of moving money from the Saudi Committee in Support of the Intifada al Quds, a private charity in Saudi Arabia, to Hamas front organizations. Based on hundreds of documents of financial transactions, the suit claims that Arab Bank worked with the committee to compile lists of beneficiaries of life insurance payments from Hamas suicide bombers and to open accounts for them.

Arab Bank has responded that it never held accounts for the Saudi Committee or consulted with it. Rather, the bank says, it made routine electronic transfers — about 200,000 payments worth $90 million — to accounts in its Palestinian branches based on instructions from the committee's Saudi banks. The transfers went to groups in good standing with Palestinian banking authorities, according to Arab Bank, which also noted that the Saudi committee was never listed by the United States as a supporter of terrorism.

"Arab Bank never created, managed or had knowledge of any programs to finance terrorism through the Bank," it said in a statement.

But the bank has faced some setbacks. It was forced to scale back its New York operations in February 2005 after Treasury Department officials cited deficient controls against money-laundering. And last August, it agreed to a $24 million fine after Treasury investigators found it gave inadequate scrutiny to transactions with groups later designated as terrorist organizations. Judge Nina Gershon of Federal District Court in Brooklyn denied motions in September to dismiss the Arab Bank suits.

In January, the victims sued National Westminster Bank, or NatWest, which is part of the Royal Bank of Scotland, for maintaining accounts of the Palestinian Relief and Development Fund, a British charity known as Interpal. President Bush designated Interpal as a Hamas fund-raiser in 2003, and barred banks in the United States from doing business with it. NatWest responded in legal papers that United Kingdom charity regulators had twice cleared Interpal of terrorist links.

A third suit targets Crιdit Lyonnais, which held accounts for a French charity known as C.B.S.P. that was designated a terrorist group by the United States in 2003. In court papers, the bank said that French authorities had cleared the charity. The judge in those cases, Charles P. Sifton, has not yet ruled on dismissal motions.

So the survivors wait. Some, like Mr. Goldstein, who is 76, and his wife, Lorraine, 74, also grieve. The day they were attacked, June 20, 2003, had been a joyous one, when they attended the wedding of a grandson. They were on a West Bank highway, with their son Tsvi driving, when two Hamas gunmen opened fire on them. Tsvi was killed instantly. Mr. Goldstein, shot three times, took the wheel and steered for several miles before overturning in a ditch. Doctors decided not to remove the bullet that sits centimeters from his heart.

A bullet ripped through Mrs. Goldstein's jaw, necessitating repeated surgery and taking away much of the motion of her mouth.

They try not to be angry. "If I spent all my energy on being bitter, it takes away from me," Mr. Goldstein said.

That sentiment was echoed by others. "It's not like I hate them," Mr. Kirschenbaum said, measuring his words. "It's just that you ask that question: Why? I don't go over to you and set off a bomb."

About the lawsuits, he said: "If you can win, it's mental, a win upstairs. You can't go over there and attack them or beat them or shoot at them. But you can attack them in this way, and say, look, this is how we want to fight back."

    Hurt by Hamas, Americans Sue Banks in U.S., NYT, 15.4.2006, http://www.nytimes.com/2006/04/15/nyregion/15hamas.html?hp&ex=1145160000&en=6c01bf8bc9517c4f&ei=5094&partner=homepage

 

 

 

 

 

U.S. to Deport Palestinian It Failed to Convict

 

April 15, 2006
The New York Times
By THE ASSOCIATED PRESS

 

WASHINGTON (AP), April 14 — Federal authorities have decided to deport a former Florida professor and advocate for Palestinian rights after failing to convict him on charges that he helped finance terrorist attacks in Israel.

The scholar, Sami al-Arian, who was indicted in 2003, has reached an agreement with prosecutors to plead guilty to a lesser charge and be deported, two lawyers familiar with the case said Friday. The deal requires the approval of a judge.

The lawyers spoke on condition of anonymity, because the agreement has not been made public by the court.

It was not clear where Mr. al-Arian would be sent. He was born in Kuwait.

Mr. al-Arian has remained in jail since he was indicted in 2003, even though a Florida jury acquitted him in December of 8 of the 17 federal charges against him and deadlocked on the rest. Stung by the defeat in the highly publicized case, prosecutors pondered whether to retry him on the remaining charges, including three conspiracy counts, or deport him.

Justice Department and immigration officials would not comment on the deportation agreement, nor would Linda Moreno, a lawyer who represented Mr. al-Arian in his trial. Ms. Moreno and William Moffitt withdrew as Mr. al-Arian's lawyers in March, and it was not clear who currently represents him.

No one answered the phone at the home of Mr. al-Arian's wife, Nahla.

The case against Mr. al-Arian was once hailed as a triumph of the broad antiterrorism law known as the USA Patriot Act, which allowed secret wiretaps and other information gathered by intelligence agents to be used in criminal prosecutions.

Mr. al-Arian and three co-defendants were charged with running a North American cell of the militant group Palestinian Islamic Jihad. Mr. al-Arian had been under surveillance by the Federal Bureau of Investigation since at least the mid-1990's.

At the end of a five-month trial, however, jurors said the mountain of intercepted phone calls and other materials did not link Mr. al-Arian and the others directly to a Palestinian Islamic Jihad truck bomb attack in 1995 that killed seven Israelis and an American, Alisa Flatow.

Ms. Flatow's parents won a judgment of more than $247.5 million in American courts against Iran, which was found to have instigated the attack, but they have been unable to collect most of the money.

Mr. al-Arian has lived in the United States for 30 years and holds permanent residency status. He was reared mostly in Egypt.

He had been a computer engineering professor at the University of South Florida but was fired after his indictment. He has been held without bail for more than three years.

Mr. al-Arian was a nationally known activist who organized voter registration drives, campaigned for candidates and lobbied politicians.

Lawyers who have represented him have said he had been in the White House on four occasions and met Presidents Bill Clinton and Bush. Mr. al-Arian also had contact with almost two dozen political and government leaders, including Senators Hillary Rodham Clinton and Trent Lott and Speaker J. Dennis Hastert and his predecessor, former Representative Newt Gingrich.

The handling of Mr. al-Arian's case became an issue in the 2004 United States Senate election in Florida, won by the Republican candidate, Mel Martinez. Betty Castor, the Democratic candidate, was the president of the University of South Florida when Mr. al-Arian was on the faculty.

    U.S. to Deport Palestinian It Failed to Convict, NYT, 15.4.2006, http://www.nytimes.com/2006/04/15/us/15prof.html

 

 

 

 

 

Moussaoui, Testifying Again, Voices Glee Over Witnesses' Accounts of Sept. 11 Grief

 

April 14, 2006
The New York Times
By NEIL A. LEWIS

 

ALEXANDRIA, Va., April 13 — Zacarias Moussaoui took the stand Thursday for the second time in his sentencing trial and told the jury of the delight he had felt in hearing witnesses testify this week about their pain and grief from losing loved ones in the Sept. 11 attacks.

"It make my day," Mr. Moussaoui said several times when asked about one witness or another.

In his heavy French accent, he ridiculed the tearful testimony of several family members who told the jury how profoundly the attacks had affected their lives.

"I find it disgusting that some people will come here to share their grief," he said. Americans should know, he said, that grief is precisely what he and fellow fighters in Al Qaeda want to achieve. "We want to inflict pain on your country," he testified.

Asked by the prosecution about the account of a witness who had crawled to safety from a Pentagon corridor demolished on Sept. 11, 2001, Mr. Moussaoui replied, "I was sorry that he survived."

The ostensible reason for Mr. Moussaoui's testifying was to persuade the jury to spare his life. But as in his previous appearance on the witness stand, last month, it was apparent Thursday that he did not help himself, leaving his motives unclear.

He did, however, take the opportunity to condemn American support for Israel, predict that the radical Islamic movement would overcome the United States, insist inexplicably that President Bush would pardon him, assert that he was not mentally unstable and rail against his court-appointed lawyers, who are trying to show that he is.

And, again as in his first appearance, he jousted with a defense lawyer but seemed largely agreeable to questions from a prosecutor who is seeking his execution.

Robert A. Spencer, the chief prosecutor, asked Mr. Moussaoui whether he would try to kill Americans, even in prison, if he was allowed to live.

"Any time, anywhere," he replied.

Of flying planes into buildings occupied by American civilians, Mr. Spencer said, "You'd do it again tomorrow, wouldn't you?"

"Today," the witness responded.

But when questioned by Gerald T. Zerkin, a public defender experienced in capital cases, he was often hostile.

"You have put your interest ahead of my life," Mr. Moussaoui told Mr. Zerkin. "For example, from the beginning of this case I asked for a Muslim attorney."

But was it not true, Mr. Zerkin pressed Mr. Moussaoui, that he told his lawyers earlier not to involve any Muslims in the defense, not to file any motions, not to present any evidence that might persuade the jurors to spare him?

"I felt you did not have my best interest at heart," he replied. "First, you are an American. Second, you are Jewish."

Mr. Moussaoui, a 37-year-old Frenchman of Moroccan heritage, is the only person to be charged in an American courtroom in connection with the Sept. 11 attacks, and so in a sense his trial is a proxy for the prosecution of the 19 hijackers killed that day.

The jury of nine men and three women has already found that he is eligible for the death penalty for lying to investigators before the hijackings about his knowledge of Al Qaeda's plans to fly planes into buildings. The only question now before the jury is whether his crimes are heinous enough to warrant his execution.

In his latest testimony, Mr. Moussaoui seemed determined to foil Mr. Zerkin's efforts to portray his bizarre behavior over the last few years, especially his crude and insulting court filings, as evidence of his instability.

He appeared at least for a time Thursday to succeed in explaining his actions rationally. He said some of his extreme statements had been a tactic to irk American officials.

Asked about his assertion two years ago that Judge Leonie M. Brinkema was concealing evidence showing that an electric fan he found on the street had been bugged by federal agents, he demonstrated some cleverness by saying that even good lawyers might make excessive statements, and noted that Judge Brinkema had only an hour earlier admonished one of the prosecutors for doing so.

Mr. Moussaoui said the defense team's idea "to portray me as crazy" would not work. He said the lawyers should instead have presented two other arguments to the jury in their efforts to save his life: that prison would be worse than death for him, and that he would be more valuable as "a bargaining chip" to exchange for American soldiers taken hostage. "This could work on the most revengeful juror," he said.

Mr. Moussaoui, arrested on immigration charges three weeks before the attacks, testified last month that he was to have flown a plane into the White House on Sept. 11 and that one member of his crew was to have been Richard C. Reid, now serving a life sentence for trying to detonate explosives in his shoe on a flight from Paris to Miami.

Mr. Reid, an inmate at the federal government's maximum security prison in Colorado, has been flown to Virginia and is expected to testify for the defense early next week.

    Moussaoui, Testifying Again, Voices Glee Over Witnesses' Accounts of Sept. 11 Grief, NYT, 14.4.2006, http://www.nytimes.com/2006/04/14/us/nationalspecial3/14moussaoui.html

 

 

 

 

 

Jury Hears Indignation of Skilling

 

April 14, 2006
The New York Times
By ALEXEI BARRIONUEVO

 

HOUSTON, April 13 — His emotions spilling over at times, Jeffrey K. Skilling admitted Thursday that he made mistakes at Enron, even as he continued to profess his innocence and blasted the government for charging him with conspiring to defraud Enron investors.

After nine weeks of listening to former colleagues and friends testify in federal court that he lied to Enron's investors and employees, Mr. Skilling, the former chief executive, fought back hard. On Thursday, his fourth day on the stand, he seemed righteously indignant in speeches deploring the fall of Enron, the former high-flying energy company that collapsed into bankruptcy in late 2001.

"There has been a lot of damage to individuals subsequent" to the bankruptcy, he said, "that was not the result of facts or what really happened, but a result of rewriting history to accomplish certain objectives people have that are not consistent with what happened in the company."

Mr. Skilling also denied allegations that he overpromoted the company's broadband venture to maintain Wall Street excitement when he knew it was failing. And he continued to insist he did not misrepresent the success of Enron's retail energy unit or commit insider trading violations.

At day's end, Daniel Petrocelli, Mr. Skilling's lead lawyer, finished his direct questioning, setting the stage for the much-awaited cross-examination by a prosecutor, Sean M. Berkowitz, to begin on Monday. At the end of next week, defense lawyers expect to call three character witnesses for Mr. Skilling before his co-defendant, Kenneth L. Lay, is expected to take the stand.

Mr. Skilling, 52, is charged with conspiracy, fraud and insider trading. Mr. Lay, Enron's founder and former chief executive, faces fraud and conspiracy counts, mostly having to do with the five months after Mr. Skilling's August 2001 resignation. Mr. Lay reassumed the chief executive post during that period.

Mr. Skilling forcefully criticized the government for making the Enron debacle worse through its four-year investigation, which has yielded 16 guilty pleas so far. "Enron is now used as a term for everything wrong," he testified Thursday. "Unless someone takes the stand," former employees who lost their jobs will believe "they were tricked and not part of something good," he said. "And that is not the way it is."

At one point, Mr. Skilling seethed with anger while reading a part of the government's 28-count indictment against him that alleged he overpromoted the performance of Enron Energy Services, the retail energy unit. "I'm sorry," he said. "I have to calm down a little bit."

Mr. Petrocelli urged him on. "Is it difficult to contain how upset you are at times?" he asked.

"Yes," Mr. Skilling said. "This is a total misrepresentation of the state of events at that time. And it would be very easy for someone to confirm that if they had any interest in confirming that."

He said he was "devastated" at the failure of Enron, which he spent a decade transforming from a sleepy natural gas pipeline company into an cutting-edge energy and technology company. "I bled Enron blue," he said, referring to Enron's tilted E logo. "I believed this was a vibrant company that at the time was having some of the best financial performance in the history of the company."

Mr. Skilling admitted to mistakes, though he claimed none were criminal. In particular, he took blame for the failure of the broadband unit. When it was unveiled in 2000, Mr. Skilling dazzled analysts by billing it as a business that could earn billions by streaming video into homes on Enron's broadband network and by trading Internet bandwidth.

But the unit collapsed under the weight of a failing telecom sector in early 2001, forcing Enron to lay off more than half the unit's workers and take a large write-off.

"The buck stops at the top," Mr. Skilling said Thursday. "We had misinterpreted the market opportunity going into broadband. This was my hit. I made a mistake."

Several government witnesses, including the former broadband unit's chief executive, Kenneth D. Rice, had said that Mr. Skilling downplayed the division's problems.

Earlier in the trial, Mark E. Koenig, Enron's former investor relations chief, testified that he lied when Mr. Skilling turned to him to answer an analyst's question about the broadband unit's revenue makeup.

"I'm not sure it occurred to me it was incorrect," Mr. Skilling testified Thursday.Mr. Rice and others had testified for the prosecution that in mid-2000 Mr. Skilling minimized the revenues the unit earned from sales of unused fiber optic cable, so analysts would believe more income came from actual business operations.

Mr. Skilling testified on Wednesday that he mistakenly told analysts such sales brought in $50 million in the second quarter of 2000 when the actual amount was about $150 million, or most of the unit's revenue. But he said such fiber sales "were always part of the business," and were properly disclosed.

He also sought to downplay the importance of Mr. Rice's testimony that he told Mr. Skilling in January 2001 that he was concerned about hitting earnings targets for the unit. "You can always hit the earnings targets," Mr. Skilling testified Thursday. "Just sell more of the business."

Mr. Skilling also admitted that he failed to sell many of Enron's international assets "in a timely way." He told directors days before he resigned that the international portfolio was worth $5.5 billion, about half the value at which Enron carried those assets on its books.

But he sought to help Mr. Lay's defense by insisting that while informing directors of the assets' estimated worth, he was not advising them to sell them at fire-sale prices. "My recommendation was it was not a good time to sell those assets," he said.

Prosecution witnesses, including a former chief financial officer, Andrew S. Fastow, testified earlier that they informed Mr. Lay of the need to write down the international assets and that he did not take steps to do so or disclose that they were overvalued to Wall Street analysts.

Mr. Skilling also sought to clarify Thursday why he tried to sell 200,000 shares of Enron stock on Sept. 6, 2001. He testified Monday that he did not remember the call when he testified to the Securities and Exchange Commission in December 2001.

On Thursday Mr. Petrocelli played the tape of a call, previously unheard at the trial, by Mr. Skilling to his stockbroker on Aug. 21, 2001. Mr. Skilling noted on the call how Enron's stock had just risen 88 cents to $37.18, the first big jump in months, and was a "good buy" at that price. That seemed to be evidence that Mr. Skilling was bullish on Enron's stock just a few days after he resigned, making his bid to sell about 20 percent of his Enron shares two weeks later all the more curious.

Mr. Skilling also detailed his personal finances on Thursday, noting that most of his net worth of some $50 million to $60 million is currently frozen by the government. Mr. Skilling owes his lawyers money, cannot access $47 million tied up in municipal bonds and faces civil liabilities, he testified.

"If you are acquitted, are you scot-free in the civil suits?" Mr. Petrocelli asked.

"Absolutely not," Mr. Skilling replied.

    Jury Hears Indignation of Skilling, NYT, 14.4.2006, http://www.nytimes.com/2006/04/14/business/businessspecial3/14enron.html

 

 

 

 

 

Skilling Denies Perpetuating Enron Ruse

 

April 13, 2006
By THE ASSOCIATED PRESS
Filed at 12:47 a.m. ET
The New York Times

 

HOUSTON (AP) -- Former Enron Corp. Jeffrey Skilling spent nine weeks listening in large part to his former underlings say or imply that he misled investors by saying all was well at the energy giant when accounting tricks and weak ventures fed financial rot. Now he's fighting back, having logged three days testifying in his fraud and conspiracy trial with a fourth on Thursday and more to come next week.

''I was aware of no illegal activity occurring at Enron Corporation,'' he told jurors Wednesday, adding that he and his co-defendant, Enron founder Kenneth Lay, never discussed doing anything they knew was forbidden by law. He acknowledged he was angry at the government because he steadfastly maintains he is falsely accused of wrongdoing.

Lay reiterated Wednesday that he aims to testify later in the biggest corporate fraud trial to emerge from the recent era of business scandals.

Speaking with confidence sometimes accentuated by annoyance when faced with statements made against him, Skilling continued addressing damaging prosecution testimony. On Wednesday, he began addressing issues stemming from Enron's broadband unit, which never made a profit and crashed into bankruptcy protection alongside the parent in December 2001.

Unveiled to Wall Street in 2000, Skilling billed the unit to dazzled Wall Street analysts as a potential multibillion-dollar business that would stream video to homes on Enron's fledgling broadband network and trade Internet bandwidth.

Several government witnesses, including former broadband unit CEO and Skilling ally Kenneth Rice, said Skilling minimized the division's problems to maintain its positive buzz among analysts.

One such instance, Rice and others testified, involved Skilling in mid-2000 minimizing the amount of revenues the unit earned from sales of inoperative fiber optic cable so analysts would believe more income stemmed from actual business operations.

Skilling acknowledged on Wednesday that he mistakenly told analysts such sales brought in $50 million in the second quarter of 2000 when the actual amount was about $150 million -- or most of the unit's revenue.

But he said such inoperative fiber sales ''were always part of the business,'' and regulatory filings in 2000 and 2001 noted those transactions.

Earlier Wednesday, Skilling countered dramatic recollections from David Delainey, also once one of his favorite top managers.

Delainey ran Enron's trading arm, Enron North America, until Skilling asked him to take over the company's retail energy unit, Enron Energy Services, in February 2001. Delainey pleaded guilty to insider trading in October 2003.

Delainey told jurors he gave in to a Skilling-approved plan in March 2001 to move the retail unit's trading arm into the profitable Enron North America to hide $200 million in losses. He also said he felt pressure from Skilling and others in 2000 to wrongly raid the trading unit's reserves to fill earnings gaps when other divisions failed to meet targets.

Delainey said he opposed moving part of retail into Enron North America, but other executives were exasperated with him and Skilling asked him, ''What do you want to do?'' He said he took his boss' question as code to ''get in line'' and go along with it.

Skilling denied the move was made to hide losses, and said it was meant to quell disputes between traders in the two divisions and gain efficiency.

''So I asked Mr. Delainey, 'Are you sure you want to do this?' and he said yes,'' Skilling said.

Regarding reserves, Delainey said he got a hug from a happy Skilling after he told his boss in late 2000 that Enron had racked up $800 million in reserves to ensure healthy earnings reports for ''a couple of quarters.''

Skilling said he hugged Delainey, adding, ''I may have kissed him,'' but only because he thought Delainey had reinstated previously eliminated reserves to protect Enron from losing money in a volatile market.

Petrocelli displayed a document that showed Delainey's unit had set aside $363 million in reserves, not $800 million.

''This shows he's half a billion dollars off?'' Petrocelli asked.

''Yeah, a little off,'' an annoyed Skilling said with a hard voice and a sigh.

The government contends both repeatedly lied to investors and employees by claiming Enron was healthy when they knew their outward optimism hid weak ventures and accounting tricks.

Skilling and Lay contend no fraud occurred at Enron other than former Chief Financial Officer Andrew Fastow and a few others skimming money from secret schemes, and negative publicity and diminished market confidence sank the company.

Skilling is charged with 28 counts of fraud, conspiracy, insider trading and lying to auditors, while Lay faces six counts of fraud and conspiracy.

------

Associated Press Writer Michael Graczyk contributed to this report.

    Skilling Denies Perpetuating Enron Ruse, NYT, 13.4.2006, http://www.nytimes.com/aponline/business/AP-Enron-Trial.html

 

 

 

 

 

Librarians Win as U.S. Relents on Secrecy Law

 

April 13, 2006
The New York Times
By ANAHAD O'CONNOR

 

After fighting ferociously for months, federal prosecutors relented yesterday and agreed to allow a Connecticut library group to identify itself as the recipient of a secret F.B.I. demand for records in a counterterrorism investigation.

The decision ended a dispute over whether the broad provisions for secrecy in the USA Patriot Act, the antiterror law, trumped the free speech rights of library officials. The librarians had gone to federal court to gain permission to identify themselves as the recipients of the secret subpoena, known as a national security letter, ordering them to turn over patron records and e-mail messages.

It was unclear what impact the government's decision would have on the approximately 30,000 other such letters that are issued each year. Changes in the Patriot Act now allow the government discretion over whether to enforce or relax what had been a blanket secrecy requirement concerning the letters.

Lawyers for the group, the Library Connection of Windsor, Conn., argued that their client was eager to participate freely in the debate last year over the reauthorization of the Patriot Act. But federal prosecutors asserted that the Patriot Act required that the group's identity remain secret and that the government would suffer irreparable harm if any information about its investigations became known.

The decision by the Justice Department to drop the case was applauded by the American Civil Liberties Union, which brought the lawsuit on behalf of the librarians. The civil liberties group said it would identify its clients at a news conference once court proceedings in the case are completed in a few weeks.

"We are obviously very much looking forward to the day where they can explain how it felt to be under threat of criminal prosecution for merely identifying themselves," said Ann Beeson, the civil liberties union's associate legal director. "The clients are happy that the fight over this gag is nearing its end."

Kevin J. O'Connor, the United States attorney in Connecticut, said yesterday that the government decided drop its case largely because the Patriot Act's secrecy provisions concerning national security subpoenas were changed to give the Federal Bureau of Investigation discretion in allowing recipients to identify themselves.

The government was also under pressure to drop its fight after mistakenly disclosing in court records the very information it was fighting to keep secret. Government lawyers failed to redact all of their references to the Library Connection in court filings, leading to the disclosure of the group's identity in The New York Times and other newspapers.

"Certainly that was a factor," Mr. O'Connor said. But he said "the legal basis" for the decision was the change in the Patriot Act giving the government the authority to allow recipients of the subpoenas to identify themselves.

"For both practical and legal reasons, we have determined that continuing to pursue this appeal does not make sense," he said.

Mr. O'Connor was in the process of appealing a decision by a federal district judge last September to allow the library to identify itself, saying the nondisclosure provision in the national security letter violated the library's First Amendment rights.

That appeal is pending in the United States Court of Appeals for the Second Circuit in New York.

Mr. O'Connor said that in light of the changes to the Patriot Act, the Justice Department would re-examine whether the secrecy requirements that apply to recipients of past national security letters should continue to be enforced.

He said the government would also make a determination when sending future letters whether the recipient would be prohibited from saying he had received one.

George Christian, the executive director of Library Connection, a cooperative of 26 libraries that share an automated system, has answered "no comment" when asked about the case by reporters. He did not respond to several messages seeking comment last night.

According to court records, the federal government's national security letter to Library Connection last year asked Mr. Christian to "personally" hand over records that might be of use in a counterterrorism investigation and that he not disclose the matter "to any person."

But the group challenged the request in federal court, arguing through its lawyers that it wanted the ban lifted immediately. The group said that time was of the essence in lifting the ban because the Patriot Act was set to be reauthorized by Dec. 31 and, as a party with an interest in the matter, it wanted the right to speak out against the act.

United States District Judge Janet C. Hall agreed with the group, ruling last year that the order of silence should be lifted. But the federal government appealed the decision, ultimately preventing the group from weighing in on how the Patriot Act should be rewritten before the Dec. 31 deadline.

Ms. Beeson said yesterday that she believed the government's decision to drop the appeal was politically timed.

"The issue over whether the government was using its Patriot Act powers to demand library records was one of the hot-button issues in this debate," she said. "And our clients could have been extremely powerful spokespeople in opposing the reauthorization of the act, because they had actually received one of those national security letters."

Now that the debate in Congress is over, she said, "There's no longer any reason to keep our clients quiet."

Mr. O'Connor dismissed that argument and said that the language in the Patriot Act was such that the federal government had no choice but to insist that Library Connection refrain from speaking out.

"I know it's being perceived as a flip-flop, but that is simply not the case," he said.

    Librarians Win as U.S. Relents on Secrecy Law, NYT, 13.4.2006, http://www.nytimes.com/2006/04/13/nyregion/13library.html

 

 

 

 

 

Moussaoui says wants more 9/11s

 

Fri Apr 14, 2006 12:51 AM ET
Reuters
By Deborah Charles

 

ALEXANDRIA, Virginia (Reuters) - September 11 conspirator Zacarias Moussaoui said on Thursday he had no regrets for those who died in the hijacked plane attacks and told jurors in his death penalty trial he wished "there would be more pain."

In comments that brought at least one relative of a victim to tears, Moussaoui mocked survivors of the attacks who had told the court of their pain and said he would like to see similar attacks against Americans every day.

"I find it disgusting that some people would come here to share their grief in order to get the death of someone else," he said.

"We wanted you to have pain in your country," said Moussaoui, an admitted al Qaeda member. "I just wish it would have happened September 12, September 13, September 14 ... there's no remorse for justice."

He was speaking after a week of graphic testimony by guilt-stricken survivors of the deadly attacks and sobbing family members of some of the nearly 3,000 people who died.

Asked during his 2-1/2 hours of testimony whether he had any regret for the suffering caused by the attacks, Moussaoui responded: "None whatsoever."

Moussaoui said he had enjoyed recent images in court showing the Pentagon after it was attacked on September 11 and said reports of all the deaths "make my day."

His comments prompted tears from a distraught family member of one victim who eventually got up and left the courtroom.

Moussaoui, 37, who has pleaded guilty to six counts of conspiracy in connection with the attacks, pulled back from statements made after his indictment that indicated he would welcome a death sentence.

His lawyer Gerald Zerkin showed him a filing he made to the court in August 2002 in which he said the "greatest jihad in Islam is to speak the truth in front of the tyrant and be executed for it."

Moussaoui said he no longer wanted to include the "and be executed" part, because he had consulted Islamic books and decided that violated Muslim religious beliefs.

 

"TRUST IN GOD"

Moussaoui, who was taking the stand for the second time at his sentencing trial against the advice of his lawyers, also criticized his court-appointed defense team. He said their strategy should have included the argument that life in prison was the best punishment since execution would reward him with martyrdom.

Defense lawyers are trying to persuade the jury that Moussaoui is mentally unstable with delusions of importance in al Qaeda and should not be sentenced to death.

Moussaoui said in court last month that he was supposed to fly a fifth plane into the White House as part of the al Qaeda hijacking plot. That contradicted his previous claims that he was not meant to be part of the September 11 hijacking, but was supposed to be in a second wave of attacks.

Moussaoui, dressed in a green prisoner jumpsuit and a white cap, said on Thursday his testimony made little difference.

"I thought about ... the consequences for me saying I was a part of 9/11. I decided to just put my trust in God and tell the truth and time will tell," he said.

"Even without my testimony, taking into account the emotion of the case, there was definitely a chance I would be found eligible for death," he said.

The 12-person jury has already found that Moussaoui is eligible for execution. Jurors are now deciding whether to sentence him to death or life in prison.

The defense should wrap up its case by next week and jurors will then start deliberating.

    Moussaoui says wants more 9/11s, R, 13.4.2006, http://today.reuters.com/news/articlenews.aspx?type=topNews&storyid=2006-04-14T045104Z_01_N13382229_RTRUKOC_0_US-SECURITY-MOUSSAOUI.xml

 

 

 

 

 

Final Struggles on 9/11 Plane Fill Courtroom

 

April 13, 2006
The New York Times
By NEIL A. LEWIS

 

ALEXANDRIA, Va., April 12 — The recorded sounds of struggle and panic on United Airlines Flight 93 filled a federal courtroom here today as jurors in the sentencing trial of Zacarias Moussaoui listened raptly to the Sept. 11 hijackers seizing control of the cockpit and passengers trying to retake control, believing it was their only chance to avoid death.

Long silences in the 31-minute recording were punctuated by the cries of the hijackers at the controls, the passengers who were trying desperately to break down the cockpit door and the crashing of objects around the cabin.

There are also the sounds of what may have been the killing of a flight attendant as the hijackers took control: a woman in the cockpit moaning, "Please, please, don't hurt me." Her voice soon appears again for the last time as she is heard to say, "I don't want to die, I don't want to die" followed by one of the hijackers saying in Arabic: "Everything is fine. I finished."

The recording ends with a three-minute crescendo of noise as a passenger apparently just outside the door shouts: "In the cockpit! If we don't, we'll die!"

On the other side of the door, two hijackers are heard deliberating before deciding to end the flight to avoid being overcome.

"Is that it? I mean, shall we pull it down?" one asks in Arabic and the reply is, "Yes, put it in it and pull it down." They then both scream repeatedly "Allah is the greatest" in Arabic as the planes goes down at 10:03 a.m. into a field in Shanksville, Pa., at more than 500 miles an hour. Aboard were 33 passengers, 5 flight attendants, 2 pilots and the 4 hijackers.

It was the first time the recording, made by cockpit instruments and recovered from the wreckage, had been played in public. And it may be the last, under the trial judge's order allowing it to be heard by jurors deciding whether to order that Mr. Moussaoui be put to death.

Mr. Moussaoui, who was in jail in Minnesota at the time of the attacks, smiled broadly at times during the playing of the recording, once when a hijacker in the cockpit said in Arabic: "In the name of Allah. I bear witness that there is no other God but Allah." Mr. Moussaoui has mostly evinced an air of indifference during the trial. A 37-year-old Frenchman of Moroccan heritage, he is the only person to stand trial in the United States in connection with the Sept. 11 attacks. The jury has already unanimously ruled that he is eligible for the death penalty, finding him responsible for at least some of the deaths that day because he had lied to interrogators at the time of his arrest about his knowledge of plans by Al Qaeda to fly planes into buildings.

Judge Leonie M. Brinkema ruled that the digital recording should not be publicly released, saying that otherwise it would be broadcast repeatedly, something family members of those killed have objected to. Judge Brinkema allowed the release of a nine-page transcript, the first complete account of the recording's contents.

The recording has been heard by some family members as well as by the national commission that issued a report on the attacks and concluded that the hijackers had intended to crash the plane into the Capitol or the White House but were "defeated by the alerted, unarmed passengers of United 93."

Although the general story of Flight 93 based on such official investigations has been known for some time, listening to the audio seemed nonetheless a harrowing experience for the jurors. In this second phase of their sentencing deliberations, they are supposed to weigh the heinousness of the crime against any mitigating factors and then decide whether Mr. Moussaoui should be executed or spend the remainder of his life in prison.

After the recording, the prosecution presented two final witnesses before resting its case. One was Lorne Lyles, the husband of CeeCee Lyles, a flight attendant on Flight 93. Mr. Lyles testified about their last conversation, in which she used an airphone to proclaim her love and ask him to look after their children.

The court-appointed defense lawyers, with whom Mr. Moussaoui does not speak, are supposed to begin their effort to save him on Thursday. They are expected to offer two principal arguments: that although he was a Qaeda member, even the leaders of the organization regarded him as unreliable and had not planned on using him as part of the Sept. 11 plot; and that he has exaggerated his role in a bid for martyrdom.

Mr. Moussaoui is expected to take the stand again as he did in the first phase, in which he seemed eager to bolster the prosecution's case.

As the jurors heard the audio, they could watch on television monitors a synchronized depiction on a map that showed the location of the plane at every moment, its air speed, altitude and attitude. The jurors could see on that video how the hijacker pilot, Ziad Jarrah, tried to foil the counterattack by suddenly rolling the airplane sharply, apparently to throw the passengers off balance.

The release of the transcript comes as Universal Studios is about to release a film about the event called "United 93," the trailer of which some moviegoers found too disturbing. The transcript may provide another template against which to measure the film's accuracy.

The recording shows that Mr. Jarrah tried to calm the passengers by pretending he was conducting a more customary hijacking in which the plane would land somewhere.

"Here's the captain," he says at 9:39:11. "I would like to tell you all to remain seated. We have a bomb aboard, and we are going back to the airport, and we have our demands. So, please remain quiet."

But passengers learned from several cellphone conversations that other planes had already crashed into the World Trade Center. It is on one of those conversations that Todd Beamer, who tells a telephone operator of the plans to overpower the hijackers, is overheard saying to fellow passengers, "Let's roll."

In addition, violence in the cabin had told the passengers that something was different than an ordinary hijacking. In evidence presented Tuesday, jurors heard the phone call of Marion Britton, a passenger, to a friend on the ground. "Don't worry," the friend consoled. "They'll probably take you to another country."

Ms. Britton replied, "Two passengers have had their throats cut."

    Final Struggles on 9/11 Plane Fill Courtroom, NYT, 13.4.2006, http://www.nytimes.com/2006/04/13/us/13moussaoui.html

    Related > http://graphics8.nytimes.com/packages/pdf/national/flight93_document.pdf

 

 

 

 

 

US says accused believes "heart and soul" in jihad

 

Wed Apr 12, 2006 8:15 PM ET
Reuters
By Michael Fitzgerald

 

SACRAMENTO, California (Reuters) - A Pakistani-American on trial on charges of attending a terrorist training camp "believes heart and soul in jihadi violence," a U.S. prosecutor said on Wednesday in closing arguments.

Federal prosecutor Robert Tice-Raskin told the six-man, six-woman jury the government proved during the seven-week trial that Hamid Hayat, 23, went to Pakistan for terrorist training and lied about it to the FBI when he returned to the United States.

"The defendant admitted that he attended the camp and that he actively trained at the camp," Tice-Raskin said. "He believes heart and soul in jihadi violence."

Federal investigators said they uncovered an al-Qaeda cell in Lodi, California, south of Sacramento where Hamid lived with his 48-year-old father, Umer, an ice cream truck driver. Both are U.S. citizens.

But during the trial, no evidence was presented that either of the Hayats had any direct links to the terrorist organization or any plans to launch a terrorist attack.

The two men have been in custody since their arrests last June. Umer Hayat was charged with lying to the FBI about his son's alleged attendance at the camp.

The prosecutor replayed portions of the FBI's videotape and reviewed transcripts of Hayat's June interrogation in which Hayat said he was "awaiting orders."

Prosecutors based much of their case on the videotape of Hayat and testimony of a paid government informant, Naseem Khan, 32, who secretly tape recorded nearly 1,000 hours of conversations beginning in mid-2002, including phone calls when Hayat was in Pakistan.

Tice-Raskin highlighted portions of the recordings including one in which Hayat refers to journalist Daniel Pearl, who was kidnapped and beheaded in Pakistan in 2002. "They cut him into pieces and sent him back. That was a good job they did," Hayat said.

Hayat lived with his grandparents in Pakistan from 1990 to 2000, came back to the United States and then returned to Pakistan in 2003.

In an interrogation videotape, played in its entirety for the jury, an obviously tired Hamid Hayat said he attended the camp, but was unclear about details.

Hayat's attorney, Wazhma Mojaddidi, has argued throughout the trial that during the interrogation her client was tired and eventually told his questioners what they wanted to hear.

She said that Khan initiated the conversations and encouraged Hamid Hayat to make statements. "He is a liar, he is manipulator. Nothing that he testified proves that Hamid Hayat went to a terrorism training camp," she told the jury.

About the video confession, she said: "When he was being arrested he didn't even know what was happening."

Hamid Hayat faces up to 39 years in prison if convicted of all charges. Umer Hayat could be sentenced to 16 years in prison.

    US says accused believes "heart and soul" in jihad, R, 12.4.2006, http://today.reuters.com/news/articlenews.aspx?type=topNews&storyid=2006-04-13T001448Z_01_N12373464_RTRUKOC_0_US-SECURITY-CALIFORNIA.xml

 

 

 

 

 

Jury transfixed by tape of 9/11 plane

 

Wed Apr 12, 2006 9:38 PM ET
Reuters
By Deborah Charles

 

ALEXANDRIA, Virginia (Reuters) - In the last minutes before United Flight 93 crashed into a Pennsylvania field on September 11, a passenger urged others to help storm the cockpit and take on the hijackers because "if we don't we die," a jury heard on Wednesday.

The cockpit recording of the chaotic final 30 minutes of the flight and the futile attempt to take back control of the plane was played for the first time in public to a jury deciding whether September 11 conspirator Zacarias Moussaoui should be executed.

Moussaoui showed little emotion as the courtroom listened spellbound to the hijackers who were believed to be aiming the plane at the U.S. Capitol or the White House in Washington and the passengers who tried to stop them.

They heard the yelling and the crashing, banging sounds of the struggle, and a plea from an unidentified crew member: "Please, please, please don't hurt me. I don't want to die."

Moussaoui sat back in his chair and stared at a screen which showed a visual depiction of the some key gauges in the cockpit and their movement as the plane neared the ground.

Moussaoui, an admitted al Qaeda member and only person charged in the United States in connection with the September 11 attacks, has pleaded guilty to six counts of conspiracy. The jury is deciding whether he should spend his life in prison or be executed.

During the flight some passengers learned via phone calls that three other planes had crashed into the World Trade Center in New York and the Pentagon. Believing they were part of a similar plot, some of them agreed to fight the hijackers.

U.S. District Judge Leonie Brinkema ruled that the recording would only be played in court and not publicly released, though a transcript was made available. Federal prosecutors, who had requested it be heard, finished presenting evidence later in the day. The defense will begin on Thursday.

 

SPELLBINDING TAPE

The tape began with a man believed to be Ziad Jarrah, the hijacker who became the plane's pilot, announcing "Here the captain, please sit down ... We have a bomb on board, so sit."

After the announcement, the hijackers appeared to be struggling with pilots, and a female flight attendant.

The hijackers yelled "sit, sit, sit down, sit down" and "In the name of Allah, the most merciful, the most compassionate."

Unidentified crew members shouted "No, no, no, no" and "Please, please, please don't hurt me. I don't want to die."

Nearly six minutes after the cockpit struggle began, one of the hijackers said, "Everything is fine. I've finished."

Then the Boeing 757, which was en route to San Francisco from Newark, New Jersey, with 33 passengers, seven crew and four hijackers on board was turned around to head east.

The recorded struggle to take back the cockpit began when the passengers apparently rolled food carts down the aisle to try to force open the door.

At about 9:58, the hijackers realized that the passengers were starting to revolt.

In Arabic someone says, "Is there something? A fight?" Another hijacker responds, "Yeah.

"Roll it," a person outside the cockpit yelled, apparently referring to the cart. "In the cockpit. If we don't we die," a voice said.

The hijacker pilot began rocking the plane violently from side to side, while a hijacker chanted in Arabic "Allah is greatest."

Crashing and banging noises could be heard, interspersed with "ugh" sounds and the sound of breaking glass or dishes.

"They want to get in there," a hijacker said. "Hold, hold from the inside, hold from the inside."

The hijackers conferred about whether it was time to crash the plane then said "Allah is the greatest" several times before the plane plowed into the field around 10:03 a.m.

The tape was played in 2002 for families of the victims aboard the doomed plane, but the families were ordered not to reveal the contents.

    Jury transfixed by tape of 9/11 plane, R, 12.4.2006, http://today.reuters.com/news/articlenews.aspx?type=newsOne&storyid=2006-04-13T013807Z_01_N12309321_RTRUKOC_0_US-SECURITY-MOUSSAOUI.xml

 

 

 

 

 

Government rests after Moussaoui jurors hear Flight 93 cockpit tape

 

Updated 4/12/2006 11:46 AM ET
USA Today

 

ALEXANDRIA, Va. (AP) — In the final minutes of doomed United Air Lines Flight 93, on Sept. 11, 2001, hijackers try to shake off passengers trying to take control of the plane as it flies over Pennsylvania. Amid groans and sounds of a struggle, a voice says, "I am injured." A hijacker asks, "Shall we finish it off?"

Moments later, the plane hurtles out of control to the ground, according to a cockpit voice recording played for a jury on Wednesday by federal prosecutors seeking the execution of Zacarias Moussaoui. The prosecutors figuratively placed the jury aboard the flight for its last heart-wrenching moments.

The government rested its case just before 11:30 a.m. ET after the judge rejected prosecutors' request to display a running presentation of the names and photos of all of the nearly 3,000 victims of Sept. 11. Prosecutors were instead allowed to show one large poster with the pictures of all but 92 of the victims.

There were three victim-impact witnesses who gave testimony following the broadcast of the Flight 93 tape in the courtroom.

The judge sent the jury home for the day and the defense will begin its case on Thursday. Just after that, Moussaoui shouted, "God curse you all!"

During the government's playing of the recording, a voice is heard from the cockpit, possibly that of a flight crewmember, saying, "Please don't hurt me. Oh God!" A few seconds later, somebody says, three times, "I don't want to die."

But then, amid sounds of a struggle, a hijacker asks, "There is something, a fight?" The response is, "Yeah."

The last sound heard as the plane nears the ground: "Allah is the greatest." Then silence.

The flight, one of four hijacked on Sept. 11, 2001, crashed in a Pennsylvania field as passengers tried to retake it. The cockpit voice recording had not been played publicly before. It was played to culminate the prosecution's case before the jury that will weigh whether to recommend the death sentence for Moussaoui, an admitted terrorist conspirator.

The recording began at 9:31 a.m. with the hijackers' voice clearly stating "ladies and gentlemen, this is the captain ... we have a bomb on board, so sit." For the next few minutes, passengers are repeatedly told, in English, "Don't move," "Shut up" "Sit," and "down down down."

The hijackers alternated between Arabic and English.

As the tape proceeded, it was clear that passengers were gaining the upper hand.

A voice of a hijacker, presumably inside the cockpit, says, "They want to get in." The voice continues, "Hold from within." At 10 a.m., there is a voice that says, "I am injured."

Sounds of a struggle can be heard. At that point, the plane appears to go out of control. There are sounds of the hijackers trying to shake off the passengers. The plane pitches back and forth.

As the jury heard the recording, prosecutors played a video presentation that simultaneously showed the flight path, speed and heading in a mockup similar to a flight simulator.

At 10:02 a.m., a hijacker says, "Give it to me. Give it to me." At 10:03 a.m. the plane dives amid crashing sounds and the tape stops.

The plane had been headed for the U.S. Capitol, according to Sept. 11 mastermind Khalid Shaikh Mohammed.

Moussaoui is the only person charged in this country in connection with the Sept. 11 attacks. The jury deciding his fate has already declared him eligible for the death penalty by determining that his actions caused at least one death on 9/11.

Even though he was in jail in Minnesota at the time of the attacks, the jury ruled that lies told by Moussaoui to federal agents a month before the attacks kept them from identifying and stopping some of the hijackers.

Now they must decide whether Moussaoui deserves execution or life in prison.

Defense lawyers say the jury should spare Moussaoui's life because of his limited role in the attacks, evidence that he is mentally ill and because his execution would only play into his dream of martyrdom.

After several days of testimony related to the attacks on the World Trade Center in New York, the focus had shifted Tuesday to the Pentagon, where the jury saw some of the most gruesome evidence in the trial.

Several photos showed badly burned bodies, facial features still discernible. Defense lawyers objected unsuccessfully to their display.

Also on Tuesday, the judge issued an order requiring an unidentified individual to be produced for testimony. The order apparently applied to would-be shoe bomber Richard Reid — defense lawyers issued a subpoena last week seeking his testimony. Prosecutors had opposed the subpoena.

Moussaoui testified previously that he and Reid were going to hijack a fifth plane on Sept. 11 and fly it into the White House. The defense lawyers, who have tried to discredit their client's credibility, have said Moussaoui is exaggerating his role in Sept. 11 to inflate his role in history.

    Government rests after Moussaoui jurors hear Flight 93 cockpit tape, UT, 12.4.2006, http://www.usatoday.com/news/nation/2006-04-12-moussaoui_x.htm

 

 

 

 

 

Flight 93 Tape Is Played for Moussaoui Jury

 

April 12, 2006
The New York Times
By DAVID STOUT

 

ALEXANDRIA, Va., April 12 — Sounds of panic, chaos and violence filled a courtroom today as the last minutes of United Airlines Flight 93 were relived through the jetliner's cockpit voice recorder.

"This is the captain," a heavily accented voice says over a constant crackle. "We have a bomb on board, so sit down."

The 31-minute recording follows the route of the doomed plane from its hijacking over Ohio to the hills of southwestern Pennsylvania, where it crashed on the morning of Sept. 11, 2001, after passengers made a heroic but futile attempt to retake it.

The recording, played before a rapt federal court jury that will decide whether the terrorist Zacarias Moussaoui should be put to death or spend the rest of his days in prison, offered a partial but still harrowing picture of what went on between 9:31 a.m. and a few minutes past 10, when it went down near Shanksville, Pa.

"No more! No more! No more!" someone says in the background. "No, no, no, no..."

In some instances, it is hard to tell if a speaker is American or Arab, man or woman. In some cases, the hijackers' words in Arabic are accompanied by printed English translations.

But despite the confusion, and despite what is already known about the fate of Flight 93 from the dozens of calls from people on board to relatives and friends, the recording heard today reawakened the pain of a September morning.

"Go ahead, the door..."

"Lie down..."

"Down, down, down, down..."

"No, no, no, no..."

"Down, down, down, down..."

"No more..."

"Please, please, please, please..."

Near the end, as some of the passengers are trying to break into the cockpit, the chant "Allah is the greatest!" is uttered repeatedly in Arabic. Moments later, the jet crashed, with such force that there was little left but ashes.

The long-awaited playing of the cockpit recorder, which has never been heard in public before, came as the prosecution neared the end of its case. On Thursday, the jury and Federal District Judge Leonie M. Brinkema are to begin hearing the defense's case as Mr. Moussaoui's lawyers try to portray him as a pathetic, unstable figure who should spend the rest of his life in prison rather than be put to death.

Mr. Moussaoui, 37, has pleaded guilty to conspiracy in connection with the Sept. 11 attacks. Prosecutors are trying to show that, even though he was in jail by that day, he deserves to be put to death because he concealed his knowledge about Al Qaeda's plans.

Defense lawyers hope to show that Mr. Moussaoui was a terrorist hanger-on whose mental instability makes him deserving of life in prison, not execution. Judge Brinkema must pronounce whatever punishment the jurors decide upon.

On Tuesday, the jurors were told of the fire, smoke and horror that filled a section of the Pentagon as it was struck by a jetliner carrying 36,000 pounds of fuel and diving at 530 miles an hour.

Sgt. Jose Rojas Jr. of the Pentagon police force told the federal jury of watching news coverage of the World Trade Center burning and thinking, "We're next."

Not long afterward, at 9:39 a.m., American Airlines Flight 77 slammed into the southwest side of the Pentagon.

"And the whole building just shook," said Sergeant Rojas, who happened to be working at the delivery building just outside the Pentagon, a vantage point that let him see "a mushroom cloud of fire."

The attack on the Pentagon, in Arlington, Va., killed 125 people in the building and 59 in the plane, not including the five hijackers. It also left lifelong scars on the survivors.

Sergeant Rojas, 43, recalled how he and several fellow officers got as near as they could to the flaming gash. "You could hear people inside," he said, "moaning, groaning, screaming."

The sergeant, a big muscular man with an incongruously soft voice, began to lose his composure as he told what happened next. A man inside was pleading for help in getting out a window. The sergeant grasped him and tried to pull him over the sill.

"He slipped back because his skin came off in my hands," Sergeant Rojas said. So Sergeant Rojas dug his fingers into the man, causing him to scream but knowing it was the only way to pull him free. Then he shook the man's skin off his own hands.

The sergeant said he and the other officers pulled nine people to safety that day. Eight lived, but a woman did not. "I knew she wasn't going to make it," he said quietly. "Too many burns."

The jury was shown several photographs of victims, some charred and grotesquely shrunken, others hardly recognizable as human.

    Flight 93 Tape Is Played for Moussaoui Jury, NYT, 12.4.2006, http://www.nytimes.com/2006/04/12/us/12cnd-moussaoui.html?hp&ex=1144900800&en=f6fc83f83a632d06&ei=5094&partner=homepage

 

 

 

 

 

Skilling, on the Stand, Implies Fraud Was Hardly Necessary

 

April 11, 2006
The New York Times
By ALEXEI BARRIONUEVO and KURT EICHENWALD

 

HOUSTON, April 10 — Jeffrey K. Skilling, the former Enron chief executive, took the stand in his own defense on Monday and declared that he was "absolutely innocent" of charges that he conspired to defraud Enron. He vowed that he would fight the charges "until the day I die."

With his fellow defendant, the Enron founder Kenneth L. Lay, looking on and nodding and smiling, Mr. Skilling began his risky attempt to rebut charges that he orchestrated a scheme to deceive Enron's investors, while making millions of dollars from selling company stock when he knew the company was in deep financial straits.

Mr. Lay is also accused of conspiring to defraud investors, mostly during the five months in which took over as chief executive after Mr. Skilling's abrupt resignation in August 2001.

While on the stand, Mr. Skilling began to head down what could prove to be a critical path in his defense: arguing that Enron's underlying financial performance was strong enough that there was no need for anyone to even consider committing fraud. Standing like a weatherman next to charts and graphs showing Enron's explosive growth in the energy markets, he was trying to persuade the jury that pursuing a conspiracy to falsify Enron's financial performance would be nonsensical.

Mr. Skilling, the 10th defense witness, took the stand in the 11th week of the Enron trial. The government called 22 witnesses in its case but none of those might matter once Mr. Skilling is done testifying. He is expected to remain on the stand for at least five days.

The day began tentatively for Mr. Skilling, who admitted in the opening moments that he was nervous. When his lead lawyer, Daniel Petrocelli, asked him why, Mr. Skilling replied, "I guess in some ways my life is on the line."

With his wife, ex-wife and three children looking on, Mr. Skilling said, in a voice cracking with emotion, that he abruptly left Enron because he was emotionally exhausted. He said he fell into a deep depression as Enron faced a sudden and deep liquidity crisis just weeks after he left the company. "Some would say I was obsessed with Enron," he said. "It takes a very personal toll."

Throughout his testimony, Mr. Skilling portrayed himself as a man who was dedicated to his business and who was left devastated and stunned when it collapsed.

For all his impassioned defense of his actions, though, Mr. Skilling had no answer for one of the allegations against him: that he sold Enron stock in September 2001 based on insider information that the company was troubled.

Mr. Skilling's stockbroker testified earlier in the trial about a taped phone call in which Mr. Skilling called in early September intending to sell 200,000 shares of Enron stock. On Sept. 17 he increased the order to 500,000 shares.

The issue is potentially problematic for him because he told the Securities and Exchange Commission in December 2001 that the only reason he sold Enron stock was because of the plummeting stock market after the Sept. 11 attacks.

"I guess so," he said when asked by Mr. Petrocelli if he intended to sell before Sept. 11, acknowledging the call to his broker. "I just don't recall that."

Prosecutors are sure to question Mr. Skilling about testimony on Monday where he described Enron's international assets as "outstanding." During his time at Enron, Mr. Skilling was a frequent critic of the company's international strategy and said internally that its international assets had lost significant value, government witnesses have testified.

In his testimony Monday, Mr. Skilling sought to underscore one of the defense's major themes: that the cooperating witnesses in the trial were compelled to plead guilty to crimes they did not commit. "I think the vast majority that have testified here are not guilty," he said of the government's witnesses.

But Mr. Skilling said that he felt betrayed by Andrew S. Fastow, the former chief financial officer, who has admitted stealing tens of millions of dollars from the company through his illicit scams with Michael Kopper, a former Enron vice president. He said in the last year, while preparing for his testimony, he saw copies of kickback checks Mr. Kopper wrote as well as a "computer program where they were splitting up the proceeds" from their schemes. "I was almost physically sick when I saw that," Mr. Skilling said Monday.

He described how he attempted to assemble a consortium of investors to put more than $700 million into the company, to help steady its finances in what proved to be its final weeks. As part of that, Mr. Skilling testified that he had planned to invest as much as $70 million of his own cash.

Born in Pittsburgh and raised outside of Chicago, Mr. Skilling joined Enron in 1990 after a successful career as partner at McKinsey & Company, the management consulting firm. His simple idea to create a "gas bank," where Enron would serve as a financial intermediary between natural gas producers and industrial customers, transformed Enron at a time when the company was searching for a way to grow, he testified. He used the idea to create a wholesale energy trading operation for gas and electricity that became the engine for Enron's growth.

Mr. Skilling said he had thought of leaving Enron on a number of occasions, as far back as 1994 when he was heading the wholesale business. By 2000, he testified, he was emotionally exhausted and had concluded that the balance in his life was "totally out of whack."

That summer he became more convinced after he went on a three-week African safari with his brother Mark and his son Jeffrey, his longest vacation in years. "I didn't want to come back," he said. "I was ready to move on." The final push, he said, came in the summer of 2001 when a transformer exploded at Enron's Teeside, England, power plant, killing three workers and badly burning another. The incident shook him, he said. After visiting with the workers' families, he realized "that life was short," he testified.

In early 2001, he became Enron's chief executive, and by mid-July, with news reports swirling about Enron's off-the-books-partnerships run by Mr. Fastow, Mr. Skilling said he wanted to leave again. He told Mr. Lay that he had become a "lightning rod" for charges aimed by California politicians that Enron was contributing to that state's energy crisis and had "lost credibility" with Wall Street. Mr. Skilling also said on Monday that he left because he had an issue with one of his children that he wanted to address.

Mr. Skilling said Monday that short sellers and The Wall Street Journal had an organized campaign to damage the company. He said that after he left Enron he was "thrilled with the operating performance" of the company. But in October, The Wall Street Journal began writing articles questioning Mr. Fastow's LJM partnerships.

The articles, Mr. Skilling said, "looked organized" to him. He said at that point he urged Mr. Lay to "open the kimono" and "get the information out" about Enron. He also said he called Mr. Fastow, urging him to "get Enron's story out."

Mr. Skilling said he became irate and concerned enough to offer to return as chief executive. But after considering it, Enron's management committee rejected the idea.

While Mr. Skilling said he respected the decision, he was also "devastated" by it, he testified.

The day he heard his offer had been rejected, he said, he was on his way to Florida for a weekend away with his then-girlfriend Rebecca Carter, who later became his wife. At that time, he said, he realized that by drawing down $3 billion in credit lines, Enron had doomed its wholesale energy business.

"All of a sudden it dawned on me: my company was struggling for its life," he said. Mr. Skilling began drinking heavily that weekend, he said. "We went back to the hotel," he said, "and I cried."

    Skilling, on the Stand, Implies Fraud Was Hardly Necessary, NYT, 11.4.2006, http://www.nytimes.com/2006/04/11/business/11enron.html

 

 

 

 

 

Moussaoui Jury Hears From Grieving Families, and From Victims Themselves

 

April 11, 2006
The New York Times
By NEIL A. LEWIS

 

ALEXANDRIA, Va., April 10 — The jurors who will soon decide whether Zacarias Moussaoui is to be executed or spend the remainder of his life in prison were confronted on Monday with a steady stream of anguished testimony from surviving family members of those killed on Sept. 11, 2001.

The prosecutors, who are seeking the death penalty, presented 15 witnesses, nearly all of whom testified at some point through sobs and tears. By the time the Justice Department ends its case Wednesday, some three dozen such witnesses will have testified as part of an effort to impress on the jurors the enduring pain and grief the terror attacks produced.

Among them was C. Lee Hanson of Connecticut, who spoke about the loss of his son, Peter; his daughter-in-law, Sue Kim; and his granddaughter, Cristine Lee, 2, the youngest casualty of Sept. 11.

Mr. Hanson described talking with his son, who was using his cellphone on one of the hijacked planes, and simultaneously watching events unfold on television. Mr. Hanson said his son told him that he believed the hijackers were "trying to crash the plane into a building," and that he added, "Don't worry, Dad. If it happens, it will be quick."

Mr. Hanson testified that he then heard his son say "Oh my God" three times, and that a moment later, he saw the plane, United Airlines Flight 175, crash into the World Trade Center on his television. He described his anguish when investigators were able to return to him only a small bone fragment of his son.

While the testimony throughout the day produced sadness among the spectators and some jurors, prosecutors presented additional evidence that produced a more chilling effect: the audiotapes of two doomed people trapped in the towers as they pleaded with 911 operators to send help.

Unlike the tape recordings recently released by the New York City authorities, the two samples played Monday included the voices of the callers, not just those of the operators.

In one tape, Kevin Cosgrove, 46 and the father of three, who called 911 from the 105th floor of the south tower, said, "We're not ready to die, but it's getting bad." A moment later, he said, "Oh, please hurry; I've got young kids."

The tape was played for the jury as a photograph of Mr. Cosgrove was displayed on screens in the courtroom, along with scenes of the burning towers synchronized to the time of his call. In the final snippet of conversation, Mr. Cosgrove said, "Oh my God, ohhh," as the tower started to collapse at 9:58 a.m.

The other audiotape was of Melissa C. Doi, 32, a financial manager who worked on the 83rd floor of the south tower. Ms. Doi told the operator that she was with five others and repeatedly said, "It's so hot; it's very, very hot."

At one point, she told the operator, "All I see is smoke; I'm going to die." The operator replied: "No, no, no. Say your prayers."

Unlike what happened in the earlier stages of the tragedy, when 911 operators were rushed and tried to take other calls, in this instance, the operator remained on the phone with Ms. Doi for four minutes.

Prosecutors later this week will play the cockpit tapes from United Flight 93, which crashed in a Pennsylvania field after passengers overwhelmed the hijackers. Judge Leonie M. Brinkema ruled Monday that the transcript of the recordings would be made public, but that the audiotapes would not be, as some family members had filed objections with her.

Mr. Moussaoui has pleaded guilty to conspiracy in connection with the Sept. 11 attacks. Although he was in jail when they occurred, this jury has already found that he was responsible for at least some of the deaths that day because he concealed his knowledge about Al Qaeda's plans to fly planes into buildings.

In the current phase of Mr. Moussaoui's sentencing trial, the prosecution is presenting evidence and testimony meant to show that the heinous nature of the crimes of Sept. 11 makes him deserving of execution.

During Monday's testimony, Mr. Moussaoui sat silently and appeared to shed his usual posture of indifference. He paid close attention to many of the witnesses, particularly to Sharif Chowdhury, who could barely be heard as he testified that his faith in Islam had helped him deal with the deaths of his son and daughter-in-law in the World Trade Center. Mr. Chowdhury was the only witness who seemed to make a point of glaring at Mr. Moussaoui when he walked by him.

Defense lawyers had objected in a sealed motion to the prosecution's presentation last week, arguing that some of it was overdramatized, both in the questions to the witnesses and in the parade of photographs of the victims, including children.

Judge Brinkema, referring to the sealed pleading, said that the defense had raised "significant issues" about the appropriateness of the presentation, especially as Mr. Moussaoui was facing a death sentence. She said that prosecutors had not yet behaved improperly, but she asked that they limit themselves to five photographs for each witness.

She also said that last Thursday, a prosecutor should not have asked the brother of a woman who hanged herself after her husband died in the attacks about the fate of their uncle. The uncle died of a heart attack on his way back to India, and Judge Brinkema said there was no way to know why his heart had failed.

Court-appointed defense lawyers, with whom Mr. Moussaoui does not speak, are likely to begin their case on Thursday. They are expected to say he should not be sentenced to death because he is mentally unbalanced and is seeking the martyrdom that execution would provide.

The jury is supposed to weigh the aggravating factors like those presented by the prosecution's witnesses against the defense's mitigating factors, and to choose between death or life in prison. Judge Brinkema is obliged to impose a death sentence if that is the unanimous decision of the jury.

Jim Dwyer and Kevin Flynn contributed reporting from New York for this article.

    Moussaoui Jury Hears From Grieving Families, and From Victims Themselves, NYT, 11.4.2006, http://www.nytimes.com/2006/04/11/us/11moussaoui.html

 

 

 

 

 

Prosecution Sees Setback at Terror Trial in California

 

April 10, 2006
The New York Times
By RANDAL C. ARCHIBOLD

 

SACRAMENTO, April 6 — The federal terrorism trial that has been going on here for the past several weeks has not lacked for surprises. Its shockers have included word of a sighting of one of the world's most sought-after terror suspects in a town not far away and the last-minute discovery of a surreptitiously recorded tape.

Unfortunately for the prosecution, which is trying a father and son — the son on charges of attending a terrorist training camp in Pakistan and lying about it, the father on charges of lying about the son's activities — the twists have come at its expense.

The prosecution agreed to allow a statement to be read to jurors that it could not substantiate the claim by its chief witness in the case, Naseem Khan, a paid informant, that the Federal Bureau of Investigation hired him after he told agents that he had seen Osama bin Laden's top lieutenant in 1998 or 1999 at a mosque in Lodi, the farming town just south of Sacramento where the men on trial lived.

Terrorism experts say the bin Laden lieutenant, Ayman al-Zawahiri, an Egyptian, last visited America in 1995.

Mr. Khan, 32, is a former fast-food worker from Pakistan by way of Bend, Ore., who was paid about $225,000 to spy on Muslims the government suspected of involvement in terrorism from late 2001 to 2005. Last weekend, he made a Hollywood-esque call to his handlers: he told them he had just found one more tape of his secretly recorded conversations with one of the suspects while rearranging his CD collection.

Defense lawyers said they took it as another sign of unreliability in Mr. Khan, who they said had badgered and cajoled the younger man into aspiring to attend the training camp.

The defense has had its stumbles, too, but as the trial of the son, Hamid Hayat, 23, and the father, Umer Hayat, 47, an ice cream truck driver, draws to a close, the government's case has not been as clear-cut as originally promoted.

During the debate over whether to renew the USA Patriot Act, the antiterror law, prosecutors last June heralded the arrest of the Hayats, American citizens of Pakistani descent, as an important milestone in the fight against terrorism.

"I was very impressed by the use of intelligence and the follow-up," President Bush said at the time of the arrests. "And that's what the American people need to know, that when we find any hint about any possible wrongdoing or a possible cell, that we'll follow up."

In September, the United States attorney in Sacramento, McGregor W. Scott, said, "We have detected, we have disrupted and we have deterred, and whatever was taking shape in Lodi isn't going to happen now."

But the government rested its case at the end of March without shedding much additional light on what exactly prosecutors said had been taking shape in Lodi. And as defense lawyers eagerly point out, it presented no evidence that Mr. Hayat was at the camp in Pakistan, beyond statements to Mr. Khan that he planned to go and a fiercely disputed confession Mr. Hayat made to F.B.I. interrogators in halting English and without a lawyer present.

Mr. Hayat's lawyer, Wazhma Mojaddidi, said Mr. Hayat was a wayward young man with a sixth-grade education, and that he was prone to boasting and storytelling, making outrageous statements to please Mr. Khan and, later, government interrogators.

One juror who was dismissed two weeks ago because she had not revealed a relationship with a law enforcement officer said she found the government's case unpersuasive. According to The Associated Press, the former juror, Andrea Clabaugh, said that Mr. Hayat might have been "interested in acting against America" but that she did not see evidence he had trained as a terrorist.

Prosecutors have declined to comment.

While the defense clearly believes that Mr. Khan has damaged the prosecution case, it remains to be seen how jurors will react. They are drawn from a relatively conservative region where people are often sympathetic to the police and prosecutors. And Mr. Hayat did make incriminating statements in the F.B.I. interview about going to a camp for jihad, or holy war.

The case may go to the jurors as soon as Thursday.

Should the government fail, the case will probably be compared to other terrorism prosecutions that did not live up to advance billing.

While the Justice Department has claimed dozens of trial victories in terrorism cases, it has lost or secured victories on lesser charges in some cases announced with great fanfare.

Last week, a former federal prosecutor was indicted on charges that he concealed critical evidence in a Detroit terrorism case in 2003, among the largest since the Sept. 11 attacks. In that case, four Muslim men were accused of being in a sleeper cell plotting attacks against Americans overseas, but the government, after winning two convictions, dropped the charges as accusations of concealed evidence and prosecutorial misconduct surfaced.

"There are a number of instances in which the government at the outset has seemed to overstate the nature of what the accused person has done and then, when put to the proof, it has been less successful," said Carl W. Tobias, a law professor at the University of Richmond who studies terrorism trials.

"There is a tendency to overstate," Mr. Tobias said, "because of the perceived stakes and American people's concern about another terrorist attack."

Still, the defense has had its rough moments.

The judge, Garland E. Burrell Jr., refused its requests for information from National Security Agency wiretaps and declined to allow the defense's chief investigator, a retired 35-year veteran of the F.B.I., Jim Wedick, to testify on what he called lapses in interviewing and investigative techniques.

As the defense prepares to end its case, Judge Burrell has shown impatience and flickers of anger at technical and tactical problems with the questioning of witnesses by Ms. Mojaddidi and the lawyer for Umer Hayat, Johnny L. Griffin.

The case turns on the work of Mr. Khan, who befriended the Hayats at Lodi's mosque, and the F.B.I.'s videotaped interrogations after the Hayats were picked up in June 2005.

Trial testimony has shown that the F.B.I. had a particular interest in the two imams at the mosque, Muhammad Adil Khan, 47, and Shabbir Ahmed, 38, who agreed to return to Pakistan under threat of deportation on immigration violations after the Hayats were arrested. They were not charged in the case, though the authorities say they suspected they were recruiting young men for terrorist training.

Mr. Khan recorded hundreds of hours of conversations with Mr. Hayat, steering the conversation to jihad, and eliciting Mr. Hayat's aspiration to attend a training camp in Pakistan, though prosecutors and defense lawyers have disputed whether he was talking about religious training or terrorist training.

Hamid Hayat was in Pakistan from 2003 to 2005, to marry, attend to family business and attend a religious school, Ms. Mojaddidi said, though prosecutors say he was also trying to join Qaeda fighters there.

While Mr. Hayat was in Pakistan, Mr. Khan at times pressed Mr. Hayat in telephone conversations. "You told me: 'I'm going to a camp. I'll do this, I'll do that,' " he said in one 2003 conversation. "You're sitting idle. You're wasting time."

But Mr. Khan testified that Mr. Hayat did not tell him he had attended any camp.

After they were arrested, both Hayats agreed to answer questions by the F.B.I. in the agency's Sacramento office. In shaky English, they gave clipped, sometimes ambiguous answers, often simply agreeing with agents. Mr. Hayat concurred, for instance, when an agent said the camp he was accused of attending was for training jihadists to kill Americans.

"What they're doing is teaching people how to kill American troops," an F.B.I. agent said.

"Of course," Mr. Hayat replied.

Jeff Kearns contributed reporting for this article.

    Prosecution Sees Setback at Terror Trial in California, NYT, 10.4.2006, http://www.nytimes.com/2006/04/10/us/nationalspecial3/10lodi.html

 

 

 

 

 

Giuliani Takes the Stand at Moussaoui Trial

 

April 6, 2006
The New York Times
By NEIL A. LEWIS and DAVID STOUT

 

ALEXANDRIA, Va., April 6 — With the smiling Al Qaeda member Zacarias Moussaoui sitting only 10 feet from him, former Mayor Rudolph Giuliani of New York recalled today how the sight of people jumping from the burning World Trade Center will stay with him all his life.

Mr. Giuliani, testifying in the trial that will determine whether Mr. Moussaoui is put to death or spends the rest of his days in prison, told of seeing a man plunge 100 stories to his death from the center's North Tower. But horrible as the sight was, it was only the beginning.

Moments later, the former mayor said, he saw several more people jump, including two who held hands all the way down. "That image comes back to me every day," Mr. Giuliani told a jury in United States District Court here.

The former mayor, whose cool presence on Sept. 11, 2001, was seen by many as the defining moment of his time in office, did not look at Mr. Moussaoui. Instead, Mr. Giuliani used a pointer and a three-and-a-half-foot scale model of the Twin Towers to depict what he saw that blue-sky morning.

His day had begun routinely, with breakfast at the Peninsula Hotel at 55th Street and Fifth Avenue, Mr. Giuliani related. Then an aide told him that an airplane had struck the World Trade Center, and Mr. Giuliani rushed downtown.

"By the time the second plane hit, we knew it was a terrorist attack," Mr. Giuliani told the jurors, who listened raptly.

As the former mayor testified, Mr. Moussaoui stared at him. Then, when prosecutors played videotapes of the Twin Towers' destruction, Mr. Moussaoui smiled.

Judge Leonie M. Brinkema told the jurors the decision on whether Mr. Moussaoui should be executed is theirs alone. The jurors concluded on Monday that death could at least be considered for Mr. Moussaoui because he was responsible for some of the Sept. 11 deaths.

This phase of the trial, in which jurors will weigh aggravating circumstances against mitigating ones, is expected to last several weeks.

Prosecutors have argued that Mr. Moussaoui, a 37-year-old Frenchman of Morroccan heritage, could have prevented the carnage of Sept. 11, if only he had told investigators what he knew after he was arrested on immigration charges in Minnesota a few weeks before the attacks.

The chief prosecutor, Robert Spencer, told the jurors today that they would hear relatives of victims describe their own anguish. And, he said, they will hear the last words of some victims on "the darkest day in recent American history."

"It will be painful and emotional to hear, but it will be necessary," Mr. Spencer said. "Those voices will be all you need to hear," he went on. He told the jurors that what they hear will make them sad, but make Zacarias Moussoui "very, very happy" because he was "proud to have done his part."

"The only punishment that fits this crime is the death penalty," Mr. Spencer said.

But Gerald Zerkin, a court-appointed lawyer for Mr. Moussaoui, asked the jurors to at least "open yourselves to the possibility of a sentence other than death."

Mr. Zerkin said no one could dispute the scale of the horrors of Sept. 11. The prosecution's evidence, he said, "will surely overwhelm you. It will overwhelm all of us."

The lawyer portrayed his client as a pathetic figure — an Al Qaeda hanger-on sliding in and out of mental illness and easily influenced by radical Islamic propagandists. Mr. Zerkin said his client is so unbalanced that he expects President Bush to order his release — and that he believes his own lawyers are conspiring to kill him.

    Giuliani Takes the Stand at Moussaoui Trial, NYT, 6.4.2006,http://www.nytimes.com/2006/04/06/us/06cnd-moussaoui.html?hp&ex=1144382400&en=b6699364bbdbda57&ei=5094&partner=homepage

 

 

 

 

 

9/11 cockpit recording allowed in Moussaoui trial

 

Wed Apr 5, 2006 7:43 PM ET
Reuters

 

WASHINGTON (Reuters) - The cockpit voice recording from one of the airplanes hijacked on September 11 can be played for the jury in Zacarias Moussaoui's sentencing trial, a federal judge ruled on Wednesday.

U.S. District Judge Leonie Brinkema said the government could introduce into evidence the transcripts and cockpit recording from United Flight 93, which is believed to have been targeted at the Capitol in Washington but crashed into a Pennsylvania field.

The tape was played in 2002 for families of the victims aboard the doomed plane. Passengers apparently struggled with the hijackers before the aircraft crashed.

Prosecutors want to use the recording to help show what happened on September 11, including how passengers were treated by the hijackers.

Brinkema said she was waiting to hear from family members of the passengers and crew on Flight 93 before deciding whether to allow the transcript and recording to be made public.

If any family member objects, the judge will order the transcript and recording sealed after they are presented in court.

Moussaoui, an admitted al Qaeda member, has pleaded guilty to six counts of conspiracy in connection with the September 11 attacks. During testimony in the first phase of his sentencing trial, Moussaoui said he was meant to fly a fifth plane into the White House on September 11.

The second phase of Moussaoui's sentencing trial begins on Thursday when the jury will begin hearing evidence before deciding whether the Frenchman of Moroccan descent should be executed for his crimes.

On Monday the jury found Moussaoui was eligible for the death penalty.

    9/11 cockpit recording allowed in Moussaoui trial, R, 5.4.2006, http://today.reuters.com/news/newsArticle.aspx?type=newsOne&storyID=2006-04-05T234324Z_01_N05315182_RTRUKOC_0_US-SECURITY-MOUSSAOUI.xml

 

 

 

 

 

Moussaoui Defiant After Jury's Verdict

 

April 4, 2006
By THE ASSOCIATED PRESS
Filed at 2:13 a.m. ET
The New York Times

 

ALEXANDRIA, Va. (AP) -- A federal jury found al-Qaida conspirator Zacarias Moussaoui eligible Monday to be executed, linking him directly to the horrific Sept. 11, 2001, terrorist attacks and concluding that his lies to FBI agents led to at least one death on that day.

A defiant Moussaoui said, ''You'll never get my blood, God curse you all.''

After months of hearings and trial testimony -- punctuated by Moussaoui's occasional outbursts -- he now faces a second phase of the sentencing trial to determine if he actually will be put to death.

That phase begins Thursday morning for the only person to face charges in this country in connection with the nation's worst terrorist assault, the attacks that killed nearly 3,000 people as jetliners crashed into the World Trade Center, the Pentagon and a Pennsylvania field.

Moussaoui sat in his chair and prayed silently as the verdict was read, refusing to join his defense team in standing. His comment came after the hearing.

The jury now will hear testimony on whether the 37-year-old Frenchman, who was in jail at the time of the attacks, should be executed for his role.

Those testifying will include families of 9/11 victims who will describe the human impact of the al-Qaida mission. Court-appointed defense lawyers, whom Moussaoui has tried to reject, will summon experts to suggest he is schizophrenic after an impoverished childhood during which he faced racism in France over his Moroccan ancestry.

The trial's first phase, which focused strictly on legal arguments, had seemed Moussaoui's best chance to avoid execution. The jury deciding his fate will now be weighing the emotional impact of nearly 3,000 deaths against Moussaoui's rough childhood and possible evidence of mental illness.

On the key question before the jurors in phase one, they answered yes that at least one victim died Sept. 11 as a direct result of Moussaoui's actions.

Had the jury voted against his eligibility for the death penalty, Moussaoui would have been sentenced to life in prison.

Rosemary Dillard, whose husband Eddie died in the attacks, said she felt a sense of vindication from the verdict.

''This man has no soul, has no conscience,'' she said of Moussaoui. ''What else could we ask for but this?''

Abraham Scott, who lost his wife Janice Marie on 9/11, said he actually felt sorry for Moussaoui ''But not enough to drop the possibility of him getting the death penalty.

''I describe him like a dog with rabies, one that cannot be cured. The only cure is to put him or her to death, Scott said.

But Scott said he also blamed the government ''for not acting on certain indicators that could have prevented 9/11 happening.''

The jury began weighing Moussaoui's fate last Wednesday. During its deliberations, jurors asked only one question publicly, seeking a definition of ''weapon of mass destruction.'' One of the three convictions for which Moussaoui could be executed is conspiracy to use weapons of mass destruction.

The jurors were told that a plane used as a missile -- the tactic employed on Sept. 11 -- qualifies as a weapon of mass destruction.

Moussaoui pleaded guilty last April to conspiring with al-Qaida to hijack aircraft and other crimes. At the time, he denied being part of the 9/11 plot, saying he was being trained for a separate attack, but he changed his story when he took the stand and claimed he was to have flown a hijacked airliner into the White House that day. The defense suggested Moussaoui would say anything to derail his own defense so he could achieve martyrdom through execution.

Moussaoui was in jail at the time of the attacks, but prosecutors argue federal agents would have been able to thwart or at least minimize the attacks if he had revealed his al-Qaida membership and his terrorist plans when he was arrested and questioned by federal agents.

The defense argued that a confession from Moussaoui would have changed nothing because the FBI and other federal agencies were inept in processing terror threats in the time before Sept. 11.

The judge said the jury was unanimous on all four aspects of each of the three counts against Moussaoui. Those counts were conspiracy to commit international terrorism, to destroy aircraft and to use weapons of mass destruction.

On each count, the jurors found the defendant was 18 or older at the time of the offense, intentionally lied to federal agents on Aug. 16-18, 2001, and did so ''contemplating the life of a person would be taken or intending that lethal force would be used.'' Further, they determined at least one person died Sept. 11 as a direct result of the lies.

The judge asked the jurors if their verdicts were all unanimous, and all nodded affirmatively.

------

Associated Press writers Michael J. Sniffen and Pete Yost contributed to this report.

    Moussaoui Defiant After Jury's Verdict, NYT, 4.4.2006, http://www.nytimes.com/aponline/us/AP-Moussaoui.html?_r=1&oref=slogin

 

 

 

 

 

Jurors Permit Death Penalty for Moussaoui

 

April 4, 2006
The New York Times
By NEIL A. LEWIS

 

ALEXANDRIA, Va., April 3 — A federal jury on Monday found that Zacarias Moussaoui was responsible for some of the deaths that occurred on Sept. 11, 2001, and was thus eligible to be executed. The unanimous verdict removes the greatest hurdle to the government's obtaining a death sentence.

The jury of nine men and three women will move into the next phase of the sentencing trial beginning Thursday in which they will decide whether Mr. Moussaoui, the only person to be tried in an American courtroom in connection with the Sept. 11 attacks, should be executed or spend the rest of his life in prison.

Mr. Moussaoui sat silently as the verdict was read, seemingly mouthing prayers to himself. The jury was stoic as were most of the handful of relatives of Sept. 11 victims in the courtroom, although two quietly wiped away tears.

It was the first phase of the trial that ended Monday and that was viewed by lawyers and death penalty experts as the one in which Mr. Moussaoui had the greater chance to escape execution.

At the time of the attacks on New York and the Pentagon, Mr. Moussaoui was in jail in Minnesota, having been arrested three weeks earlier on immigration charges.

The Justice Department argued that even though he did not take part in the attacks, he deserved to die because at the time of his arrest he willfully concealed detailed knowledge of Al Qaeda's plans to use suicide hijackers to fly planes into buildings.

His lies, a prosecutor told the jury, "made him just as guilty as if he were at the controls of one of those planes."

His court-appointed defense lawyers, whose help he spurned, countered that even though he was an Islamic extremist, he was only a minor player in Al Qaeda whose senior officials found him unreliable and had not planned on using him for the Sept. 11 plot.

The defense lawyers seemed to be building a solid case until Mr. Moussaoui took the stand last week and proceeded to acknowledge unreservedly every element of the prosecution's case. He asserted he was set to be part of the Sept. 11 plot by flying a fifth airplane into the White House.

His testimony was startling in that he had earlier said that he was to have participated in a separate Qaeda plot, had nothing to do with Sept. 11 and would fight the death penalty with all his strength.

Mr. Moussaoui, a 37-year-old Frenchman of Moroccan heritage, has through his courtroom outbursts and bizarre notes to the judge over the last few years, seemed at times indisputably irrational, and his decision to testify against the advice of his lawyers was initially seen as another ill-considered move.

But the testimony that vaulted him closer to a death sentence was delivered in a calm and deliberate manner. It may have been provoked by his anger at the defense lawyers' efforts to portray his role as trivial and suggested that what he wanted most of all was to be seen as a full-fledged member of Al Qaeda's Sept. 11 conspiracy. He even acknowledged how delighted he had been to hear the panicked tape-recorded voice of a flight attendant pleading for her life.

The jury, after about 16 hours of deliberation, was unanimous that the government had proved beyond a reasonable doubt four elements that make Mr. Moussaoui eligible for the death penalty: that he was over 18 at the time; that he had deliberately taken some action (lying to investigators); that he had done so contemplating that deaths would occur; and that at least one death had occurred because of his lies.

The prosecution's case nearly fell apart from several missteps, the most serious being the disclosure that a government transportation lawyer had improperly coached some aviation security witnesses. Moreover, in their cross-examination of Federal Bureau of Investigation witnesses, defense lawyers were able to build a portrait of serial misjudgments and missed opportunities by government investigators.

But when the time came for closing arguments, the prosecutors relied largely on Mr. Moussaoui's admissions in his testimony.

Rosemary Dillard, whose husband died on American Airlines Flight 77, which crashed into the Pentagon, and who has watched most of the trial, said she was celebrating. "That man has no soul, no conscience," she told reporters.

But Abraham Scott, who lost his wife in the Pentagon and who had sat through much of the trial, told reporters that while he was satisfied to some degree over the verdict, some testimony raised anew questions about the government.

"I don't think Moussaoui is totally to blame," Mr. Scott told reporters. "I also blame the government by not acting on certain information."

The second phase of the trial does not favor Mr. Moussaoui's chances to escape execution.

In the last few weeks, his lawyers emphasized that the argument that had he told the truth the plot might have been thwarted was only speculation and an insufficient basis to execute someone. But the second phase of the complicated federal death penalty law is more mathematical. The jury will be asked first to consider whether the aggravating factors of his crime outweighed any mitigating factors. Prosecutors have prepared as many as 45 family members of Sept. 11 victims to testify about the impact the crimes had on them and their families.

As for mitigating factors, Mr. Moussaoui's lawyers have suggested in court papers that they may introduce testimony from a psychologist showing that Mr. Moussaoui suffers mental impairment as a result of anti-Muslim bigotry he faced growing up in France.

But that may well be outweighed by the deaths of Sept. 11. The jurors' verdict Monday on three counts of conspiracy to use airplanes to kill people suggests they have deemed him responsible not for just one death, the minimum requirement for their finding, but all of the nearly 3,000 deaths that day.

As Mr. Moussaoui left the courtroom, he shouted, "You will never get my blood."

If the jurors are unanimous in finding that the aggravating factors outweighed any mitigating factors, they will move to decide whether to recommend the death penalty. If they are unanimous in favor of the death penalty, Judge Leonie M. Brinkema would be obliged to impose that sentence.

All 12 jurors have declared that they are not opposed to imposing the death penalty of lethal injection at the federal prison in Terre Haute, Ind.

Since the revision of federal death penalty laws, several defendants have been sentenced to death in federal court while only three have been executed, beginning with Timothy J. McVeigh, the Oklahoma City bomber, in June 2001.

    Jurors Permit Death Penalty for Moussaoui, NYT, 4.4.2006, http://www.nytimes.com/2006/04/04/us/04moussaoui.html?hp&ex=1144209600&en=971c21ea6cf88945&ei=5094&partner=homepage

 

 

 

 

 

Analysis: Moussaoui case full of twists

 

Updated 4/3/2006 10:18 PM
Associated Press
By Michael J. Sniffen
USA Today

 

ALEXANDRIA, Va. — Thanks largely to Zacarias Moussaoui himself, prosecutors have cleared the highest hurdle in their effort to execute the al-Qaeda conspirator. But the path to the death chamber might still contain some unpleasant surprises for the government.

When the case began more than four years ago, it looked easier. The government at first thought Moussaoui was intended to be a 20th hijacker on Sept. 11, 2001. Once it became clear that wasn't his role, the government dialed back its case.

But it didn't want to drop the death penalty for the only person charged in this country in the nation's most deadly terrorist attack. The biggest problem was that Moussaoui was in jail on 9/11 and had been for almost a month.

The final government theory bore some resemblance to a pretzel: Moussaoui was directly responsible for deaths on 9/11 because he hadn't confessed all he knew when arrested, thus preventing the FBI from moving to block some or all of the four hijackings that day.

Another twist was added when many of the government witnesses for the prosecution gave as much or more comfort to the defense: They acknowledged misstep after misstep in handling leads about Moussaoui and other terrorists in the summer of 2001, raising doubts about what if anything Moussaoui could have said to change things.

Then Moussaoui took the stand over the objections of the court-appointed defense lawyers. He abandoned claims he'd made for three years that his plot to fly a 747 into the White House was unrelated to 9/11. For the first time, he said he had been training to hijack a fifth jetliner on 9/11 and fly it into the White House.

"This stage of the penalty phase was probably harder for the government, but that was before he took the stand and connected all the dots for the jury," said Richard Dieter, executive director of the Death Penalty Information Center, a group that advocates more equitable administration of the death statute.

"Whether this act (lying to agents) fits the federal death penalty law may have been a tougher question without his testimony," Dieter added. "Whether his acts a month or months ahead of time directly caused these deaths is a good question. The fact that the defendant himself says they were directly connected doesn't necessarily prove it, but it was enough for the jury."

Now testimony shifts in the second phase to whether Moussaoui deserves the death penalty for his actions. Prosecutors will introduce evidence of how heinous the crime was, while the defense will try to show mitigating factors.

What do they have: Prosecutors can pick among the personal tragedies of the families of nearly 3,000 people who died in the 9/11 attacks. The defense has indicated it will try to call a doctor to testify Moussaoui was schizophrenic and sociologists to describe his impoverished upbringing in France and the racism he faced there and in England for his Moroccan ancestry.

The testimony of victim families "is going to be a highly emotional, devastating presentation to the jury," said Mary Cheh, a law professor at George Washington University, who thought the eligibility phase could have gone the other way. "I can't imagine his being able to overcome that."

Now defense attorneys "are going uphill all the way," Cheh added. "I have no idea what they will come forward with."

Northwestern University Law Professor Ronald Allen agreed that Moussaoui's team has "a very uphill fight," but he cautions that the first phase is a formal decision while "the second decision is whether to kill somebody. That becomes intensely personal. It's moral and complicated and messy."

Dieter agreed: "It only gets more complicated when a person's life is in the balance."

Another George Washington University law professor, Stephen Saltzburg, also thought prosecutors had gotten past the hard part and their phase two presentation would be pretty straightforward. "You're going to see some powerful testimony from the families," Saltzburg said. "It's going to be a chance for some of them to get closure as best they can."

And Moussaoui could harm his own case again, Saltzburg said. He doubted the 37-year-old Frenchman would cooperate in any effort by his lawyers to portray him as a lunatic, but "he's liable to want to testify again, and do himself even greater harm. I would not be surprised if he doesn't invite them to give him the death penalty."

That would bring on the last step: appeals.

Dieter said the government's unusual case left many questions for an appeal, where anything could happen.

For prosecutors, "the more difficult time is going to be on appeal," said Jesse Chopper, law professor at the University of California at Berkeley. "His appointed lawyers are going to have many, many potential issues to raise. Compared to that, the penalty phase will be a piece of cake."

    Analysis: Moussaoui case full of twists, UT, 3.4.2006, http://www.usatoday.com/news/nation/2006-04-03-moussaoui-analysis_x.htm

 

 

 

 

 

Moussaoui may be executed

 

Mon Apr 3, 2006 6:03 PM ET
Reuters
By Deborah Charles

 

ALEXANDRIA, Virginia (Reuters) - A U.S. jury on Monday found Zacarias Moussaoui eligible for the death penalty, and the convicted September 11 conspirator shouted as he was led out of the court: "You'll never get my blood. God curse you all."

The same 12-person federal panel will return on Thursday to begin a second phase of his sentencing trial and decide whether he will be executed for his role in the hijacked airliner attacks or sentenced to life in prison.

Moussaoui's sensational outburst as he was led out of the courtroom after hearing the verdict concluded the first phase of the proceedings that have been marked by his shouts after the judge and jury have departed.

After about 17 hours of deliberation, the jury found that Moussaoui lied to the FBI following his arrest three weeks before the September 11 attacks and the lies led to deaths in the hijacked airliner attacks that killed nearly 3,000 people.

"Your findings mean we move on to phase two where the jury ... ultimately (has) to make a final decision as to what sentence will be imposed," said U.S. District Judge Leonie Brinkema.

Moussaoui is the only person to be charged in the United States in connection with September 11.

Last year the 37-year-old Frenchman of Moroccan descent pleaded guilty to six counts of conspiracy in connection with the deadly hijackings. Three of the counts carried a possible death sentence.

Dressed in a green prisoner jumpsuit and white cap, Moussaoui refused to stand when the verdict was read, instead remaining seated and gripping his chair. After hearing the verdict he sat still, with his mouth moving, as if in prayer.

 

MIXED REACTION

The verdict sparked smiles, however, from some family members of people who died on September 11, while one woman wiped tears from her eyes.

"I thought I would be elated, but I wasn't. Even though Moussaoui made certain negative comments, I still feel sorry for him," said Abraham Scott, whose wife died at the Pentagon on September 11. "I describe him like a dog with rabies, one that cannot be cured."

Rosemary Dillard, whose husband Eddie was on the plane that crashed into the Pentagon, said Moussaoui deserves the death penalty. "This man has no soul. He has no conscience," she said outside the courthouse.

At the second phase of the trial, which is being held just a few miles from the Pentagon, the jury will hear defense lawyers make the case Moussaoui has a mental disorder like schizophrenia, and a troubled childhood, in their bid to prevent the death penalty.

Federal prosecutors are expected to present testimony from some of the families of victims from the deadly hijackings.

"The defense attorneys in this case will have the almost impossible task of saving someone who does not want to saved. Moussaoui has given the American people an unambiguous target on which to direct our collective need to cast blame for the horror of 9/11," said David Rossman, of Boston University's School of Law.

In the initial phase, Moussaoui said he was meant to fly an airplane into the White House on September 11 -- something he had previously denied. He also said he lied to the FBI to help make sure the operation would go on.

Prosecutors said Moussaoui's lies prevented the September 11 plot from being discovered, thus leading to the deaths.

Moussaoui was in jail on September 11. He was arrested on August 16, 2001, in Minnesota on immigration charges after raising suspicions at a flight school.

(Additional reporting by Andy Sullivan)

    Moussaoui may be executed, NYT, 4.4.2006, http://today.reuters.com/news/newsArticle.aspx?type=newsOne&storyID=2006-04-03T220345Z_01_N03312099_RTRUKOC_0_US-SECURITY-MOUSSAOUI.xml

 

 

 

 

 

FACTBOX: Facts about September 11 conspirator Moussaoui

 

Mon Apr 3, 2006 4:30 PM ET
Reuters

 

(Reuters) - A federal jury found on Monday that September 11 conspirator Zacarias Moussaoui was eligible to receive a death sentence. Following are some facts about him and the case:

* Moussaoui, 37, a French citizen of Moroccan descent, was arrested by U.S. officials in August 2001 on immigration charges after raising suspicions at a flight school in Minnesota. Later, he was indicted in connection with the September 11 attacks, the only person charged in connection with the attacks.

* On April 22, 2005, Moussaoui pleaded guilty to all six counts against him. He was charged with conspiracy to commit acts of terrorism, commit aircraft piracy, destroy aircraft, use weapons of mass destruction, murder U.S. employees and destroy property. Three of the charges carry the death penalty.

* Moussaoui said during the trial that he was meant to fly a plane into the White House on September 11, contradicting what he said last year when he pleaded guilty. Then, he had said he was not part of the September 11 plot but was meant to take part in a second wave of attacks, involving the White House.

* Moussaoui's trial has been delayed repeatedly since 2002 as he appealed to have access to al Qaeda detainees who he said could help bolster his case. He acted as his own lawyer early in the case, but U.S. Judge Leonie Brinkema revoked that permission in 2003 after Moussaoui kept filing pleadings with the court that included inflammatory language about U.S. officials, his lawyers and Brinkema.

* In the sentencing trial, a jury was charged with deciding whether Moussaoui would receive the death penalty or life in prison. Monday's verdict in the first phase of the sentencing trial meant he was eligible for execution, and second phase will be held to determine whether to impose a death sentence.

    FACTBOX: Facts about September 11 conspirator Moussaoui, R, 3.4.2006, http://today.reuters.com/news/NewsArticle.aspx?type=newsOne&storyID=2006-04-03T202950Z_01_N03334964_RTRUKOT_0_TEXT0.xml&related=true

 

 

 

 

 

Judge won't open NSA wiretaps for terror case

 

Mon Apr 3, 2006 10:19 PM ET
Reuters

 

SAN FRANCISCO (Reuters) - A U.S. judge overseeing a case against a Pakistani-American father and son accused of terrorism-related activity denied on Monday a defense request to review related National Security Agency wiretaps.

The legal request on behalf of Hamid Hayat and his father Umer followed the revelation late last year that the United States had monitored some international communications with people in the United States without court order.

Hamid Hayat is on trial on charges of lying to U.S. law enforcement officials and providing material support to terrorists by attending terror training camps in Pakistan. His father is accused of lying to the FBI about those activities.

In January, defense lawyers asked for "any and all documents, records or recording reflecting the use and information obtained throughout National Security Agency wiretaps related to the defendants."

Judge Garland Burrell Jr. of the U.S. District Court for Eastern California said the government most recently conveyed a classified response to the motion, and then without further comment denied the defense motion.

In a separate order, the judge denied another defense motion to produce evidence, but the document was redacted apparently for security reasons and offered no details.

The government last month rested its case in the trial, with their key witness a paid FBI informant who testified that Osama bin Laden's al Qaeda deputy, Ayman al-Zawahri, lived in California in 1998 and 1999.

Experts have said the informant was likely mistaken, potentially hurting his credibility before jurors.

    Judge won't open NSA wiretaps for terror case, R, 3.4.2006, http://today.reuters.com/News/newsArticle.aspx?type=topNews&storyID=2006-04-04T021913Z_01_N03319899_RTRUKOC_0_US-SECURITY-CALIFORNIA.xml

 

 

 

 

 

Another ex-DeLay aide pleads guilty

 

Fri Mar 31, 2006 3:58 PM ET
Reuters
By James Vicini

 

WASHINGTON (Reuters) - A former top aide to Texas Republican Rep. Tom DeLay pleaded guilty in the Jack Abramoff lobbying scandal on Friday, the second ex-aide to the powerful congressman to admit wrongdoing and agree to cooperate.

Tony Rudy, DeLay's former deputy chief of staff, entered the guilty plea to one count of conspiracy in federal court as part of a deal with U.S. Justice Department prosecutors in which he has agreed to testify completely and truthfully.

Abramoff, the lobbyist at the heart of a corruption scandal that has rattled top Republicans, has been cooperating in the investigation into whether Washington politicians gave his clients favorable treatment in exchange for campaign contributions, Super Bowl tickets and other illegal gifts.

Rudy worked for DeLay from 1995 through 2000, while DeLay was a Republican leader in the U.S. House of Representatives. Rudy then joined Abramoff as a lobbyist. They conspired together to influence members of Congress, prosecutors said.

Beginning in 1997 and continuing while he worked for DeLay, Rudy accepted numerous items of value from Abramoff and others while he repeatedly took official action on their behalf, prosecutors said.

Rudy accepted $86,000 from Abramoff while working as a staffer for DeLay, according to the court documents. In return, Rudy asked lawmakers to vote against an Internet-gambling bill that would have harmed one of Abramoff's clients.

Within a year of leaving DeLay's office, Rudy communicated with employees still in the office, seeking to influence official action, prosecutors said.

 

CONSPIRING TO BUY AND SELL INFLUENCE

"The American public loses when officials and lobbyists conspire to buy and sell influence in such a corrupt and brazen manner," said Assistant Attorney General Alice Fisher.

Richard Cullen, a lawyer representing DeLay, told reporters his client was unaware of any of the illegal acts committed by Rudy. "Mr. DeLay is confident that when the investigation is over ... they'll conclude he has done nothing wrong."

Asked by U.S. District Judge Ellen Huvelle how he would plead to the conspiracy count, Rudy replied, "Guilty, your honor."

Rudy, 39 and a lawyer, faces a maximum penalty of five years in prison, a $250,000 fine and mandatory restitution of nearly $100,000. But under the agreement, he was expected to be sentenced to between two and two and a half years in prison.

Rudy's guilty plea also spells more trouble for Ohio Republican Rep. Bob Ney, who took a golf trip to Scotland with Abramoff and Rudy in August 2002.

According to the conspiracy charge, a congressman only identified as Representative No. 1 "agreed to take favorable official action and render other assistance on behalf of the clients of Abramoff and defendant Rudy."

The congressman was not named but law enforcement sources confirmed that it was Ney. Both DeLay and Ney have denied wrongdoing and no criminal charges have been brought against either lawmaker.

A spokesman for Ney said, "He remains absolutely confident that when the full facts of Abramoff's schemes are revealed, fiction will continue to be separated from fact and it will be made clear that he did absolutely nothing wrong."

Abramoff was sentenced this week to nearly six years in prison in a separate fraud case in Florida. Michael Scanlon, a former press secretary to DeLay, pleaded guilty in November and also is cooperating in the investigation.

Rudy left the courthouse, surrounded by his lawyers and refused to comment to reporters.

(Additional reporting by Deborah Charles and Andy Sullivan)

    Another ex-DeLay aide pleads guilty, NYT, 31.3.2006, http://today.reuters.com/News/newsArticle.aspx?type=topNews&storyID=2006-03-31T205756Z_01_WAT005199_RTRUKOC_0_US-CRIME-ABRAMOFF.xml

 

 

 

 

 

At Sept. 11 Trial, Tale of Missteps and Management

 

March 31, 2006
The New York Times
By SCOTT SHANE and NEIL A. LEWIS

 

WASHINGTON, March 30 — Three weeks of testimony and dozens of documents released in the sentencing of Zacarias Moussaoui have offered an eerie parallel view of two organizations, Al Qaeda and the Federal Bureau of Investigation, and how they pursued their missions before the attacks of Sept. 11, 2001.

Al Qaeda, according to a newly revealed account from the chief plotter, Khalid Sheikh Mohammed, took its time in choosing targets — attack the White House or perhaps a nuclear plant in Pennsylvania? Organizers sized up and selected operatives, teaching them how to apply for a visa and how to cut a throat, a skill they practiced on sheep and camels. Despite the mistakes of careless subordinates and an erratic boss, Osama bin Laden, Mr. Mohammed tried to keep the plot on course.

Mr. Mohammed, a Pakistani-born, American-trained engineer, "thought simplicity was the key to success," says the summary of his interrogation by the Central Intelligence Agency. It is all the more chilling for the banal managerial skills it ascribes to the man who devised the simultaneous air attacks.

If Mr. Mohammed's guiding principle was simplicity, the United States government relied on sprawling bureaucracies at feuding agencies to look for myriad potential threats. The C.I.A. had lots of information on two hijackers, Nawaf al-Hazmi and Khalid al-Midhar, but the F.B.I. did not know the men had settled in San Diego, where Mr. Mohammed had instructed them to "spend time visiting museums and amusement parks" so they could masquerade as tourists.

At the F.B.I., a few agents pursued clues that would later prove tantalizingly close to the mark, but they could not draw attention from top counterterrorism officials. A Minnesota F.B.I. agent, Harry M. Samit, warned in a memorandum that Mr. Moussaoui was a dangerous Islamic extremist whose study of how to fly a Boeing 747-400 seemed to be part of a sinister plot.

"As the details of this plan are not yet fully known, it cannot be determined if Moussaoui has sufficient knowledge of the 747-400 to attempt to execute the seizure of such an aircraft," Mr. Samit wrote on Aug. 31, 2001. He had already urged Washington to act quickly, because it was not clear "how far advanced Moussaoui's plan is or how many unidentified co-conspirators exist."

But to high-level officials, the oddball Moroccan-born Frenchman in Minneapolis was only one of scores of possible terrorists who might be worth checking out. An F.B.I. official in Washington edited crucial details out of Mr. Samit's memorandums seeking a search warrant for Mr. Moussaoui's possessions, and said that pressing for it could hurt an agent's career, Mr. Samit testified.

The picture of a large and lumbering bureaucracy trying to defend against a small and flexible enemy is striking, said Timothy J. Roemer, a member of the national Sept. 11 commission.

"It's like the elephant fighting the snake," said Mr. Roemer, a former Democratic congressman from Indiana. "One of the impressions of Al Qaeda and Khalid Sheikh Mohammed is their ability to change course and put new people into their plan and dynamically respond to the challenges day to day."

The United States government, he said, "is almost the opposite."

"We're slow to change," he said, "slow to adjust, and we're building a huge bureaucracy."

The court testimony, Mr. Roemer said, has reinforced his belief that "Moussaoui was an Al Qaeda mistake and a missed opportunity for the F.B.I."

The jury at Mr. Moussaoui's sentencing trial in federal court in Alexandria, Va., began deliberating on Wednesday about whether he qualifies for the death penalty for not telling American officials of the approaching terrorist attacks. If jurors decide he does qualify, they will then have to make a second decision as to whether he should be executed.

The outlines of the events on both sides in the weeks leading to the Sept. 11 attacks are well known. But the voluminous evidence presented at the trial have added details and color to the public history of the plotters and how American counterterrorism officers failed to stop them.

There are snippets of highly classified National Security Agency cables and glimpses of the C.I.A. inspector general's report on the agency's performance before the attacks, which remains secret. There are numerous new F.B.I. e-mail messages and memorandums that fill in the details of agents' suspicions and why they were not heeded.

But the 58-page "Substitution for the Testimony of Khalid Sheikh Mohammed," a detailed account of what Mr. Mohammed has told investigators since his capture in Pakistan in 2003, and an attached two-page statement written by him, give the most direct view to date of the man who conceived and organized the attacks.

"I know that the materialistic Western mind cannot grasp the idea, and it is difficult for them to believe that the high officials in Al Qaeda do not know about operations carried out by its operatives, but this is how it works," Mr. Mohammed wrote in his statement to his interrogators. "We do not submit written reports to our higher ups. I conducted the September 11 operation by submitting only oral reports."

Mr. Mohammed comes across as a hands-on, midlevel manager who sometimes handled details, like perusing a San Diego telephone book he bought at a market in Karachi, Pakistan, for English-language schools and flight schools.

But he delegated what he could to others. He had Abu Turab al Jordani, a Qaeda veteran from Jordan, train the less sophisticated "muscle" hijackers, teaching them to use their knives on animals and how to storm a jetliner cabin. He allowed Mohammed Atta, appointed "emir" of the hijackers, to make final decisions on targets and on the date of the attack.

Mr. bin Laden repeatedly pressed Mr. Mohammed to move ahead with the hijacking plot, the document says. He pushed, for example, to strike on May 12, precisely seven months after the 2000 attack on the U.S.S. Cole. Ever the pragmatist, Mr. Mohammed put him off. In fact, Mr. Mohammed "noted that he disobeyed bin Laden on several occasions by taking operatives assigned to him by bin Laden and using them how he best saw fit."

One restriction on the plot was the small number of Qaeda devotees who had, or could get, visas to enter the United States. Mr. Mohammed used Mr. Midhar and Mr. Hazmi because they had visas — despite his doubts about their minimal English and lack of sophistication.

But he also considered Mr. Moussaoui less reliable because of time he had spent in the West. Mr. Mohammed "stated that Westerners have a different point of view because of their freedom," the summary says.

The sentencing trial made clear the frustration of the Minneapolis F.B.I. office in its repeated efforts to interest bureau headquarters in Mr. Moussaoui.

Gripping testimony came from Mr. Samit, who arrested Mr. Moussaoui on Aug. 16 and quickly became convinced that he was a terrorist who knew about an imminent hijacking plot. Mr. Samit said that he had sent about 70 warning messages about Mr. Moussaoui, but that they had produced no results.

The agent said he had been puzzled at the reluctance of Michael Maltbie, a supervisor with the Radical Fundamentalist Unit at bureau headquarters, to seek a search warrant for Mr. Moussaoui's belongings from a special intelligence court.

Mr. Samit seemed unable to satisfy Mr. Maltbie's demand that he provide a tangible link between Mr. Moussaoui and a foreign power, a requirement for a warrant from the Foreign Intelligence Surveillance Court. He thought he had sufficient evidence from two French intelligence reports showing Mr. Moussaoui had recruited someone to fight in Chechnya for an Islamist group allied with Mr. bin Laden.

But on Aug. 24, 2001, a frustrated Mr. Samit sent an e-mail message to Charles Frahm, a friend and, at the time, an F.B.I. liaison to the C.I.A., asking for information to help make his case. "We're trying to close the wiggle room for F.B.I. headquarters to claim there is no connection to a foreign power," he wrote.

Mr. Moussaoui's lawyers asserted that Mr. Maltbie had undermined the effort to obtain a search warrant by deleting some details from Mr. Samit's requests. Mr. Samit said Mr. Maltbie had told him he was reluctant to press for a warrant because doing so would be risky for his career and "he was not about to let that happen to him."

At the time, the bureau had become wary of applying to the intelligence court because a well-regarded supervisor had angered the court's chief judge in a previous case.

Days later, with the attacks in New York and Washington, the scale of the destruction astonished even Mr. Mohammed. According to the summary, he said he "had no idea that the damage of the first attack would be as catastrophic as it was."

    At Sept. 11 Trial, Tale of Missteps and Management, NYT, 31.3.2006, http://www.nytimes.com/2006/03/31/us/nationalspecial3/31plot.html?hp&ex=1143781200&en=4767bdda2452a2b7&ei=5094&partner=homepage

 

 

 

 

 

Moussaoui jurors adjourn without a verdict

 

Thu Mar 30, 2006 5:58 PM ET
Reuters
By Deborah Charles

 

ALEXANDRIA, Virginia (Reuters) - Jurors in the death penalty trial of Zacarias Moussaoui asked for a definition of weapons of mass destruction on Thursday as they wound up their first full day of deliberations without reaching a verdict in the only U.S. case related to the deadly September 11 hijackings.

In her answer to the jurors, who were due to resume deliberations on Friday, U.S. District Judge Leonie Brinkema said planes, used as missiles, could be considered weapons of mass destruction.

Last year Moussaoui, 37, pleaded guilty to six counts of conspiracy in connection with the attacks. One of the three counts that carries the death penalty is conspiracy to use weapons of mass destruction.

Prosecutors had argued the French citizen of Moroccan descent should be executed because his lies to investigators after he was detained shortly before September 11 led to nearly 3,000 deaths in the hijacked airliner attacks.

The 12 jurors must decide if Moussaoui lied to the FBI in the weeks before the hijackings, and if those lies led to the deaths of at least one person on September 11.

In dramatic testimony on Monday, Moussaoui said he had lied to the FBI after he was arrested on August 16, 2001, to ensure that the plot went forward. He said he knew about the plan and was meant to pilot a fifth plane aimed at the White House.

Moussaoui's testimony contradicted what he said last year when he pleaded guilty. Then, Moussaoui said he was not part of the September 11 plot but was meant to take part in a second wave of attacks.

If the jury decides that Moussaoui's lies did lead to deaths on September 11, a second phase of the sentencing trial will be held to determine finally if he is to be executed or sentenced to life in prison.

(additional reporting by Andy Sullivan)

    Moussaoui jurors adjourn without a verdict, R, 30.3.2006,http://today.reuters.com/news/newsArticle.aspx?type=domesticNews&storyID=2006-03-30T225825Z_01_N28177164_RTRUKOC_0_US-SECURITY-MOUSSAOUI.xml

 

 

 

 

 

Lobbyist in Congress Furor Is Sentenced in Florida Case

 

March 30, 2006
The New York Times
By PHILIP SHENON

 

MIAMI, March 29 — Jack Abramoff, the former superlobbyist at the center of a major corruption investigation in Washington involving members of Congress, was sentenced on Wednesday to 5 years and 10 months in prison on related fraud changes in Florida.

The judge agreed to the prison term, the minimum possible under sentencing guidelines, after prosecutors praised Mr. Abramoff for his cooperation in the Washington inquiry, which centers on accusations that he had tried to bribe public officials, including Republican lawmakers.

In Florida, the case involved charges that Mr. Abramoff and a business partner had defrauded lenders in a gambling cruise-ship line that they bought in 2000 for $147.5 million. Mr. Abramoff still faces sentencing in Washington, where he pleaded guilty to fraud, tax evasion and conspiracy.

"In the past two years, I have started the process of becoming a new man," Mr. Abramoff said in a brief appearance before Judge Paul C. Huck of Federal District Court here. "As you can imagine, this day is incredibly painful for my family, my friends and me."

Wearing a gray double-breasted suit and speaking in a grave tone, Mr. Abramoff said he was "profoundly remorseful" for his crimes.

For several minutes before the hearing, Mr. Abramoff, an Orthodox Jew whose lawyers have suggested that he will seek confinement in a prison where he can maintain a strict kosher diet and observe other religious requirements, closed his eyes and appeared to pray, his upper body moving rhythmically back and forth.

Adam Kidan, his former business partner, was sentenced at the hearing to the same prison term as Mr. Abramoff. The two men have agreed to make a total of $20.7 million in restitution as a result of the fraud here, which involved faking documents to get a $60 million loan to buy the SunCruz fleet of gambling ships.

A lingering mystery in the Florida case is why the former owner of SunCruz, Konstantinos Boulis, also known as Gus, was gunned down in a gangland-style ambush in February 2001 in the midst of an angry post-sale dispute with the company's new buyers.

Three men were charged last year in the killing, including one linked to the Gambino crime family. All three had financial links to Mr. Kidan. Both Mr. Kidan and Mr. Abramoff have denied any involvement in Mr. Boulis's death.

Federal prosecutors offered no details about the cooperation they had received from Mr. Abramoff since the plea agreement with the Justice Department was announced in January. But their comments on Wednesday should deepen the concern in Washington among lawmakers and others who are under scrutiny over their ties to the lobbyist.

"I've spent a lot of time with both men," said Lawrence D. LaVecchio, an assistant United States attorney in Miami in the case, referring to Mr. Abramoff and Mr. Kidan. "They are both trying to atone."

Mr. LaVecchio said he was planning to ask Judge Huck to delay confinement of Mr. Abramoff for at least six months, allowing prosecutors in Washington to continue debriefing him outside of prison. The judge granted only 90 days' delay but suggested that he was open to another postponement at the request of the Justice Department.

Under federal sentencing guidelines, Mr. Abramoff could have received up to seven years and three months in prison for his crimes here. He faces up to 11 years in prison as a result of his plea accord in the Washington case. Under his agreement with the Justice Department, Mr. Abramoff will be allowed to serve any prison terms concurrently. His overall prison time could be cut at the request of prosecutors.

After the hearing Wednesday, Mr. Abramoff's lawyers, Neal R. Sonnett in Miami and Abbe D. Lowell in Washington, said in a joint statement that "today's sentencing is another step in Mr. Abramoff's sincere commitment to accept responsibility for his actions."

"He will continue to work hard to fully cooperate with the Department of Justice and law enforcement agencies and to make restitution to all victims," they said. "This is the course he set out many months ago and the course he intends to follow and complete no matter how long it takes."

In the Washington case, Mr. Abramoff is accused with another former business partner, Michael Scanlon, of conspiring to provide illegal gifts to members of Congress in exchange for legislation and other actions.

There are clear links between the two investigations. In the Florida case, Mr. Abramoff has acknowledged that he asked that Representative Bob Ney, a Ohio Republican who recently stepped down as chairman of the House Administration Committee, to enter statements in the Congressional Record praising Mr. Kidan and condemning Mr. Boulis over the SunCruz sale. Mr. Ney, who went on a lavish golfing holiday in Scotland that was arranged by Mr. Abramoff, has been subpoenaed by the federal grand jury in Washington and has denied wrongdoing, saying he was duped by Mr. Abramoff.

    Lobbyist in Congress Furor Is Sentenced in Florida Case, NYT, 30.3.2006, http://www.nytimes.com/2006/03/30/politics/30abramoff.html?_r=1&oref=slogin

 

 

 

 

 

Jury deliberates Moussaoui's fate

 

Wed Mar 29, 2006 9:25 PM ET
Reuters
By Deborah Charles

 

ALEXANDRIA, Virginia (Reuters) - Zacarias Moussaoui's fate rested with a jury after prosecutors said on Wednesday he should be executed because his lies led to nearly 3,000 deaths in the September 11 attacks, while a defense lawyer said he was only an al Qaeda "hanger-on and a nuisance."

The jury began deliberations late in the day after closing arguments. After about 90 minutes, they went home and will return on Thursday.

Both sides said Moussaoui was a liar in wrapping up the tumultuous and bizarre death penalty trial for the only person charged in the United States in the September 11 hijacking plot.

Moussaoui pleaded guilty last year to all six conspiracy counts against him -- three of which carry the death penalty.

"Zacarias Moussaoui came to this country to kill as many Americans as he could," federal prosecutor David Raskin told the jury. "In this trial, you have learned from the defendant himself that that is exactly what he did."

Raskin said Moussaoui, who was in jail on September 11, killed people that day by lying and concealing plans for the plot.

"They would be alive today if he had told the truth and that is why he is eligible for the death penalty," he said.

Moussaoui provided sensational testimony in the trial, admitting he lied to the FBI and declaring he was meant to fly a plane into the White House on September 11 -- something he previously denied.

But Edward MacMahon, one of the court-appointed defense lawyers, said the 37-year-old French citizen of Moroccan descent had also lied when he said he was supposed to pilot a fifth plane.

"He is now trying to write a role for himself in history while the truth is he is an al Qaeda hanger-on and a nuisance," MacMahon said. "It's all a plethora of lies, one built on top of another to aggrandize himself."

U.S. District Judge Leonie Brinkema told jurors they had to weigh the testimony of each witness -- including Moussaoui.

Moussaoui sat silently during the closing arguments, but after the judge and jury left the courtroom, he yelled: "Victory for al Qaeda and Moussaoui! God curse you all!" He has regularly yelled curses as he has left the courtroom during the trial.

 

DID HE CAUSE DEATHS?

MacMahon told the jury the U.S. government had failed to prove beyond a reasonable doubt "that anything Moussaoui ever did or said" caused a death.

The sentencing trial has two phases. In this first phase, the jury must decide whether Moussaoui, who was arrested in August 2001 after raising suspicions at a flight school, lied to the FBI about his knowledge of the hijacked airliner plot.

If the jury finds he lied, resulting in the death of at least one person on September 11, then another trial phase would be held to consider imposing the death penalty.

The final summations marked the end of proceedings that began on March 6 and were delayed for a week after a government lawyer improperly contacted and was accused of coaching witnesses.

Moussaoui testified at his own request and against the advice of his lawyers. He bolstered the government's argument by saying he had lied to the FBI after his arrest to ensure the hijacking plot was not thwarted.

He also said he was to have piloted the fifth plane into the White House and that he knew the twin towers of New York's World Trade Center were to be targets in the attacks.

Moussaoui's lawyers had presented evidence and testimony that contradicted his statements from detained top al Qaeda officials who planned the September 11 plot.

When he pleaded guilty last year, Moussaoui -- an admitted al Qaeda member -- denied involvement in the September 11 hijackings. He said he was to have been in a second wave of attacks.

    Jury deliberates Moussaoui's fate, R, 29.3.2006, http://today.reuters.com/news/newsArticle.aspx?type=domesticNews&storyID=2006-03-30T022545Z_01_N28177164_RTRUKOC_0_US-SECURITY-MOUSSAOUI.xml

 

 

 

 

 

Prosecutors: Moussaoui Killed With Lies

 

March 29, 2006
The New York Times
By THE ASSOCIATED PRESS
Filed at 9:59 p.m. ET

 

ALEXANDRIA, Va. (AP) -- Prosecutors said al-Qaida conspirator Zacarias Moussaoui killed Americans on Sept. 11, 2001, by lying to federal agents weeks earlier to keep the plot secret. Defense attorneys called him an ''al-Qaida hanger-on'' who only dreamed he had a role in the worst terrorist attack in the nation's history.

Summarizing 10 days of testimony in a tumultuous sentencing trial, lawyers painted sharply divergent views of whether the 37-year-old Frenchman was responsible for any of the nearly 3,000 deaths on Sept. 11. Then a jury of nine men and three women retired to decide whether he should be eligible for the death penalty.

They went home after an hour of deliberations.

Prosecutor David Raskin told the jurors they could be sure of Moussaoui's lethal intent ''because he admitted it right here in this courtroom'' in bombshell testimony Monday. Defense attorney Edward MacMahon countered that Moussaoui had told ''a plethora of lies to aggrandize himself. You can't believe anything this man says.''

MacMahon said FBI headquarters refused to investigate what one ''tremendous'' field agent discovered about Moussaoui after his Aug. 16, 2001, arrest at a Minnesota flight training school. Agents also ignored far better leads about the Sept. 11 plotters during the summer of 2001, he said.

''There's no evidence the government would have behaved any differently than it actually did no matter what Moussaoui said or what he did,'' MacMahon said.

On rebuttal, prosecutor David Novak responded, ''We're not here to tell you FBI headquarters did a good job.'' But he said the verdict form does not ask jurors to ''grade the FBI (or) ... grade the CIA.''

''All Moussaoui had to do is say, 'I'm al-Qaida,''' Novak argued. The prosecutors said they had showed that if Moussaoui had confessed, when he was arrested, to the facts he admitted when pleading guilty four years later, the FBI would have identified 11 of the 19 hijackers within weeks and the Federal Aviation Administration would have kept them off airplanes.

Moussaoui watched the closing arguments impassively but shouted ''Victory to Moussaoui! God curse America!'' after the judge and jury had left for a brief recess.

If this jury unanimously decides Moussaoui is eligible for the death penalty, it will reconvene to hear more testimony about whether he actually deserves to be executed. Their only other choice is life in prison without possibility of release. That second phase would be a forum for aggravating and mitigating evidence about his role, including the testimony of families of Sept. 11 victims.

An unresolved issue is what would happen if the jury is unable to agree on death-penalty eligibility. Defense attorneys say that should lead to an automatic life sentence; prosecutors argue it should result in a mistrial, which would allow them to retry Moussaoui with another jury. Judge Leonie Brinkema has appeared to favor the defense view on this but has not ruled.

Moussaoui's dramatic courtroom testimony Monday -- that he was supposed to hijack a fifth jetliner on Sept. 11 along with would-be shoe bomber Richard Reid and fly it into the White House -- was a major focus of the closing arguments.

MacMahon read the jury what Moussaoui said last April when he pleaded guilty to six conspiracy counts and signed a confession. ''Point out a single paragraph where it says I'm part of 9/11,'' Moussaoui told the court at that time. ''Everybody knows I'm not 9/11 material.'' Moussaoui said then that his plot was different; he was to fly into the White House later if the U.S. did not release radical Egyptian cleric Omar Abdel Rahman, imprisoned for other terrorist crimes.

MacMahon noted that captured Sept. 11 mastermind Khalid Shaikh Mohammed and other top al-Qaida operatives had said in written testimony that Moussaoui had nothing to do with Sept. 11. He called Moussaoui an ''al-Qaida hanger-on and a nuisance'' to al-Qaida leaders who argued over who would pay the bill for sending him away.

Listing missing elements that he said showed Moussaoui was lying about his role in Sept. 11, MacMahon said, ''He doesn't have a team, he doesn't know where they are, he was never told to go to an airport, he has no airplane tickets, nobody's called to try to find him.'' Shaikh Mohammed said the attack date wasn't set until after Moussaoui was arrested, MacMahon said.

Raskin began his closing this way: ''Zacarias Moussaoui came to this country to kill as many Americans as he could. You have learned from the defendant himself that that's exactly what he did.''

''The defendant's lies are as much a part of this plot as anything else. It's terrorist training 101,'' Raskin added. ''Al-Qaida trains its people to lie: Don't give up the plot.''

Raskin tried to deal with a continuing defense argument that the Fifth Amendment protected Moussaoui from having to incriminate himself by confessing upon arrest.

''He had a constitutional right to remain silent,'' Raskin said. ''Once he started talking he had an obligation to tell the truth.''

MacMahon countered that ''the government cannot prove a hypothetical -- what would have happened if Moussaoui had not lied -- and certainly not beyond a reasonable doubt.''

But he stressed that instead of sending agents on a wild goose chase, Moussaoui gave them his correct name, prompting them to learn from French intelligence he was a radical Islamic fundamentalist who had recruited a fighter for Chechen rebels allied with Osama bin Laden. ''That's not a wild goose chase. That's bingo,'' MacMahon said, but the FBI would not open a full investigation.

Likewise, MacMahon argued, no one can know for sure what would have happened if the government had aggressively tried to locate two of the hijackers that it knew 18 months before 9/11 were linked to terrorists and were in the United States.

The arguments followed a disclosure Tuesday that Moussaoui offered last month to testify for prosecutors against himself at his death penalty trial, the firmest evidence he was seeking martyrdom through execution.

Associated Press writers Matthew Barakat and Pete Yost contributed to this report.

    Prosecutors: Moussaoui Killed With Lies, NYT, 29.3.2006, http://www.nytimes.com/aponline/national/AP-Moussaoui.html

 

 

 

 

 

Ex-Prosecutor Accused of Concealing Evidence in Terror Case

 

March 29, 2006
The New York Times
By ERIC LICHTBLAU

 

WASHINGTON, March 29 — A grand jury charged today that a former federal prosecutor in Detroit who led one of the Justice Department's biggest terrorism investigations concealed critical evidence in the case in an effort to bolster the government's theory that a group of local Muslim men were plotting an attack.

The prosecutor, Richard G. Convertino, and a State Department employee who served as a chief government witness were each indicted on charges of conspiracy and obstruction of justice. The grand jury charged that they had conspired to conceal evidence from the jury about photographs of an American military hospital in Jordan that was the supposed target of a terrorist plot concocted by the Detroit defendants.

Mr. Convertino, once a rising star at the Justice Department who fell out of favor with supervisors in Washington, denied that he had ever withheld evidence, and he pledged that he would be vindicated. "These charges are clearly vindictive and retaliatory, and it's an effort to discredit and smear someone who tried to expose the government's mismanagement of the war on terrorism," he said in a telephone interview.

The indictment of the former prosecutor and one of his star witnesses marked a striking turnaround in a case once hailed by President Bush and John Ashcroft, his first attorney general, as a major breakthrough against terrorism plotted on American soil.

After four Muslim men were arrested days after the attacks of Sept. 11, 2001, in a dilapidated Detroit apartment, federal authorities charged that they were part of a "sleeper" terrorist cell plotting attacks against Americans overseas.

Two of the men were convicted on terrorism charges after a high-profile trial in 2003, with Mr. Convertino as the lead prosecutor. But the case soon began to unravel amid allegations of concealed evidence and government misconduct. The Justice Department ultimately repudiated its own case, leading to the dismissal of all terrorism charges against the men in 2004.

"I can't recall a case like this in recent memory where you have not only the collapse of the prosecution's entire case, but now the prosecutor himself indicted," said Brian Levin, a professor at Cal State University at San Bernardino who has written extensively on terrorism prosecutions.

"The government has made clear it's going to do everything it can to go after terrorism, but here you have a case where it appears that hubris might have intoxicated the prosecutor, and he might have taken one step over the line," Mr. Levin said.

Mr. Convertino, 45, who has left the Justice Department and opened his own defense practice in the Detroit area, faces a maximum of 30 years in prison and a $1 million fine if convicted. His co-defendant, Harry R. Smith III, 49, a security officer for the State Department who assisted in the prosecution, faces a maximum of 20 years in prison and a $750,000 fine.

The indictment returned by a grand jury in the eastern district of Michigan lays blame for the collapse of the case against the terrorism suspects at the feet of Mr. Convertino and Mr. Smith. It said the two men conspired "to present false evidence at trial and to conceal inconsistent and potentially damaging evidence from the defendants."

But an investigation by The New York Times published in October 2004 found that senior officials at the Justice Department knew of problems in the case almost from its inception, yet still pushed for an aggressive prosecution.

An internal Justice Department memo prepared in Washington before the 2002 indictments of the men acknowledged that the evidence was "somewhat weak," that the case relied on a single informant with "some baggage," and that there was no clear link to terrorist groups.

"We can charge this case with the hope that the case might get better," a senior counterterrorism official in Washington wrote at the time, "and the certainty that it will not get much worse."

The prosecution exposed deep rifts within the Justice Department over issues of strategy — to the point that some Washington prosecutors assigned to work on the case were barely on speaking terms with Mr. Convertino and his Detroit prosecutors.

The opening of the government's indictment against the terror suspects, drafted by prosecutors in Washington, appeared to have been lifted almost verbatim from a scholarly article on Islamic fundamentalism. And Mr. Ashcroft was rebuked by the Detroit judge hearing the case for publicly asserting — in error — that the defendants were suspected of having advance knowledge of the Sept. 11 attacks.

    Ex-Prosecutor Accused of Concealing Evidence in Terror Case, NYT, 29.3.2006, http://www.nytimes.com/2006/03/29/national/29cnd-prosecutor.html

 

 

 

 

 

Enron Prosecutors Drop Some Charges and Rest Case

 

March 29, 2006
The New York Times
By ALEXEI BARRIONUEVO

 

HOUSTON, March 28 — After more than eight weeks and 22 witnesses, the government rested its case on Tuesday against two former Enron chief executives, Jeffrey K. Skilling and Kenneth L. Lay, setting the stage for the defense to begin its bid to keep them out of prison.

When they present their first witness on Monday, the defense lawyers' burden will be a bit lighter, because the judge in the case, Simeon T. Lake III of Federal District Court, approved a government request to dismiss some of the criminal counts against the two men.

Sean Berkowitz, the director of the Justice Department's Enron Task Force, said prosecutors chose not to present evidence on the dismissed charges "out of economy." Judge Lake said he had been "wondering where the evidence was" on some of the charges, "so now I don't have to ask."

The government rested its case early Tuesday after a former Enron employee testified about the apparent contradiction between Mr. Lay's rapid disposal of tens of millions of dollars in Enron stock and his public pronouncements that Enron shares were "an incredible bargain." The situation alarmed the employee, Joanne Cortez, enough that she told the Federal Bureau of Investigation about the trades.

Mr. Lay and Mr. Skilling are accused of conspiring to defraud Enron's investors while enriching themselves. If convicted, they could spend decades in prison.

The judge closed the case for the rest of the week after Ms. Cortez left the stand, joking to jurors that it was "spring break." Defense lawyers agreed to use the time off to streamline their case, which they said they expected to last about four weeks. A defense lawyer said late Tuesday that Joannie Williamson, a former secretary of Mr. Lay's at Enron, would be their first witness. The much-anticipated testimony of Mr. Skilling and Mr. Lay is expected to take about two weeks. Defense lawyers said Mr. Skilling would take the stand as early as the week of April 10, with Mr. Lay to follow.

The dismissed charges against Mr. Skilling include two counts of securities fraud involving an analyst call and a quarterly filing with the Securities and Exchange Commission, and one count of making false statements to auditors. For Mr. Lay, the judge dismissed one count of securities fraud for a Nov. 12, 2001, analyst conference call. Judge Lake denied a defense motion to dismiss four other counts against Mr. Lay.

Mr. Skilling is now charged with 28 counts of fraud, conspiracy and insider trading, and Mr. Lay with 6 counts of fraud and conspiracy.

Outside the courthouse, defense lawyers blasted the government's case, saying prosecutors had no choice but to drop the charges dismissed by the judge. Daniel Petrocelli, Mr. Skilling's lead lawyer, said the government case was "long on atmospherics and short on actual facts." He said Mr. Skilling was "very anxious to take the stand."

Michael Ramsey, Mr. Lay's lead lawyer, said he was surprised that the prosecutors had called Ms. Cortez when the government months ago failed to bring insider-trading charges against Mr. Lay. "That is unheard of in my experience," Mr. Ramsey said. Mr. Lay is scheduled to go on trial on bank fraud charges immediately after the current case.

Mr. Ramsey and Mr. Petrocelli told reporters that they continued to struggle to persuade potential witnesses, including former managers from Enron and the accounting firm Arthur Andersen, to testify on behalf of Mr. Lay and Mr. Skilling. Mr. Petrocelli said fear of prosecution was the main reason most stayed away.

Mr. Ramsey sought to send a message to potential witnesses. "If you are going to make up your mind to win a case, now is the time to come forward," he said. "We need you down here at this courthouse to tell the truth about Enron."

In her testimony, Ms. Cortez, a former Enron employee who oversaw a line of credit the company had set up for Mr. Lay, said she was shocked to discover in 2001 that Enron's compensation committee had increased Mr. Lay's credit line to $7.5 million, from $4 million. The increase came a week after Enron reported large third-quarter losses in October 2001. By the end of the year, Mr. Lay maxed out the credit line, she said.

Mr. Lay repeatedly drew down the credit line and repaid it almost immediately with Enron shares he owned, Ms. Cortez said. "It made me question whether it was being used as somewhat of a tool to sell shares."

Ms. Cortez became so concerned that Mr. Lay's stock sales were not being disclosed that she hired a lawyer, who turned her records over to the F.B.I. "It's a clear indication of something going on for the C.E.O. to be selling so much stock," she said.

"I thought it was improper, " Ms. Cortez said. She conceded on cross-examination, however, that she had not known that Mr. Lay had used the line of credit to repay bank loans.

During 2001, Mr. Lay made withdrawals totaling $77.5 million and paid back just over $70 million, leaving a balance owed of $7.5 million, Bloomberg News reported.

While Mr. Lay has not been charged with insider trading, prosecutors have asserted that he enriched himself as the company descended into bankruptcy in late 2001.

    Enron Prosecutors Drop Some Charges and Rest Case, NYT, 29.3.2006, http://www.nytimes.com/2006/03/29/business/businessspecial3/29enron.html

 

 

 

 

 

The 9/11 Trial

Defense Tries to Undo Damage Moussaoui Did

 

March 29, 2006
The New York Times
By NEIL A. LEWIS

 

ALEXANDRIA, Va., March 28 — Defense lawyers trying to prevent the government from executing Zacarias Moussaoui for the Sept. 11, 2001, attacks ended their case on Tuesday with last-minute efforts to undo the damage he had inflicted on himself with testimony in which he calmly agreed to the charges against him.

The lawyers presented the accounts of senior Qaeda terrorists who gave statements from captivity to deflate Mr. Moussaoui's surprise claim on Monday that he was to have played a major role in the Sept. 11 attacks. The Qaeda officials, whose testimony was recited in court, portrayed Mr. Moussaoui as an unreliable and unstable colleague who was unconnected to the Sept. 11 plot.

"He had dreams about flying a plane into the White House," a South Asian terrorist known as Hambali, captured in 2003, was quoted as saying. Hambali said Mr. Moussaoui was known to be "not right in the head and having a bad character."

Besides the account of Hambali, the defense on Tuesday offered the recollections of Mustafa al-Hawsawi, a financial and travel planner for Al Qaeda who worked closely with the Sept. 11 hijackers; Mohammed al-Qahtani, who is widely believed to be the real missing "20th hijacker"; and a Qaeda operative known as Khallad, whom investigators have linked to the bombing of two American embassies in Africa in 1998 and the attack on the destroyer Cole in Yemen 2000, as well as to the Sept. 11 plot.

Mr. Al-Qahtani is imprisoned at Guantαnamo Bay, Cuba; the others are being held in the secret detention system of the Central Intelligence Agency, which is believed to house about two dozen senior Qaeda officials.

All provided statements that Mr. Moussaoui was never meant to be part of the Sept. 11 plot.

Mr. Moussaoui's court-appointed lawyers, who did not want him to testify, put on less than two full days of testimony, far less than did prosecutors. The suddenly accelerated pace of the trial means that the jury will begin deliberating Wednesday afternoon.

After the jury departed for the day, Judge Leonie M. Brinkema turned away a defense bid to strike the death penalty, saying, "This case changed dramatically with Mr. Moussaoui's testimony Monday."

In his few hours on the witness stand that day, Mr. Moussaoui appeared to undo much of the defense that his lawyers had built since the beginning of the trial, which is solely to determine whether he will be put to death or spend the rest of his life in jail. Mr. Moussaoui not only agreed with prosecutors that he was in Al Qaeda, he also asserted that he knew most of the hijackers and was to have flown a fifth plane on Sept. 11 into the White House.

Prosecutors have argued that Mr. Moussaoui deserves to be executed because when he was arrested on Aug. 16 on immigration violations, he lied to investigators about his knowledge of Qaeda plans to fly planes into buildings. Had Mr. Moussaoui told the truth, the prosecutors have said, the Federal Bureau of Investigation and the Federal Aviation Administration would have taken quick action to thwart the plot.

Defense lawyers have pressed the idea that any information Mr. Moussaoui may have provided would have become part of the sea of unchecked leads in the days before the attacks. In completing their case Tuesday, the lawyers played a videotape for the jury of the testimony of Thomas J. Pickard, the acting F.B.I. director at the time of the attacks, before the commission investigating the attacks.

Mr. Pickard was asked what he would have done if he had known three facts that became apparent to senior officials only after the attacks: that Mr. Moussaoui was an Islamic extremist taking flying lessons; that two identified Qaeda terrorists were probably in the country in August 2001; and that an F.B.I. agent in Phoenix had drafted a memorandum saying that he noticed an unusual number of young Middle Eastern men were enrolling in American flight schools and might be planning some hijacking plot.

He replied that given the thousands of terrorism leads the bureau was evaluating in the summer of 2001, "I don't know, with all the information the F.B.I. collects, whether we would have had the ability to hone in specifically on those three items."

In addition to the issue of what the F.B.I. may have done if Mr. Moussaoui had not lied, a major question the jury will have to consider is his real stature in Al Qaeda. Under a complicated federal death penalty law, the jury will first have to consider whether Mr. Moussaoui is responsible for any deaths on Sept. 11. Only if jurors are unanimous in deciding that he was do they move to the next phase in which they consider whether he should be executed.

The Sept. 11 commission did not offer firm conclusions about Mr. Moussaoui's role, speculating that he might have been kept in reserve as a substitute pilot. But the commission noted that Al Qaeda had invested heavily in him, providing more than $30,000 for travel and pilot training.

Eleanor J. Hill, the staff director of the joint Congressional investigation of 9/11, said that the planners told participants little in advance about their respective roles, so it is possible that Mr. Moussaoui did not know what his Qaeda superiors would ultimately have ordered him to do.

Ms. Hill said Mr. Moussaoui's dramatic courtroom statements might well be self-aggrandizing exaggerations or outright inventions.

"He clearly wants the world to know he wants to kill Americans," said Ms. Hill, a Washington lawyer. "Why wouldn't he want to exaggerate and glorify his potential role in an attack he considers a huge success? If he's just a bystander, he doesn't get much of a place in history."

Prosecutors, in a brief rebuttal, produced evidence that Mr. Moussaoui had offered to testify for them against himself if they would have agreed to see that he spent his time before execution in a more comfortable jail cell.

Scott Shane contributed reporting for this article.

    Defense Tries to Undo Damage Moussaoui Did, NYT, 29.3.2006, http://www.nytimes.com/2006/03/29/national/29moussaoui.html?hp&ex=1143608400&en=4b8c2fd4700d1b12&ei=5094&partner=homepage

 

 

 

 

 

Moussaoui, Undermining Case, Now Ties Himself to 9/11 Plot

 

March 28, 2006
The New York Times
By NEIL A. LEWIS

 

ALEXANDRIA, Va., March 27 — Zacarias Moussaoui, who is facing the death penalty for the Sept. 11, 2001, terrorist attacks, took the witness stand in his own defense Monday, only to bolster the government's case by unhesitatingly acknowledging the charges in the indictment against him and adding a few new, self-incriminating statements.

Mr. Moussaoui said he knew in advance of Al Qaeda's plans to fly jetliners into the World Trade Center and asserted that his role on that day was to have been to fly another plane into the White House. He said he was to have been accompanied on the suicidal mission by Richard C. Reid, the so-called shoe bomber who was convicted in a separate failed effort to blow up a plane in flight.

Although Mr. Moussaoui had said over the last few years that he was a member of Al Qaeda and was learning to fly a plane to participate in some "second wave" of terrorist attacks, until now he had always insisted that he knew little of the plot for the attacks and vowed to fight the death penalty to the last of his strength.

But when he began his long-awaited testimony on Monday, he offered a lengthy description of a far deeper involvement with Al Qaeda and its plots. Not only was he a member of the terror network, he told the jury, he also said that he knew most of the Sept. 11 hijackers, admitted that he lied to investigators about his knowledge of their plot when he was arrested on immigration violations three weeks before the attacks on New York and the Pentagon, and recounted that he was ecstatic when, behind bars, he heard the news of the attacks on a radio he had bought for that purpose.

Before the day was over, the jury also had the extraordinary experience of hearing a reading of testimony taken in a deposition from Khalid Sheikh Mohammed, who is said to have organized the Sept. 11 attacks and is being held somewhere in the secret overseas detention system of the Central Intelligence Agency.

That deposition, in which Mr. Mohammed answered questions agreed to by prosecutors and defense lawyers, seemed to contradict Mr. Moussaoui's assertion that he was meant to be a pilot on Sept. 11.

Mr. Mohammed portrayed Mr. Moussaoui as a fringe figure who might have been used in a second wave of attacks if needed.

For more than an hour, Michael Nachmanoff, a public defender, recited Mr. Mohammed's answers in what resembled an oddly disembodied literary reading. Mr. Nachmanoff read out testimony that any planning for a second wave of attacks "was only in the most preliminary stages" and that targets had not even been selected.

But while that might seem to contradict Mr. Moussaoui's version of events, the defendant's first-person account, painting his own role in bold brushstrokes, was the day's main event.

When one of Mr. Moussaoui's court-appointed lawyers asked if he was to have been the so-called 20th hijacker — a member of the team on the plane that crashed in Pennsylvania, with only four hijackers aboard, while the planes that hit the Pentagon and the World Trade Center had teams of five — he replied, "No, I was not to be a fifth hijacker."

But, he continued, "I was supposed to fly a plane into the White House."

In addition to the other four planes? asked his lawyer, Gerald T. Zerkin.

"That's correct," Mr. Moussaoui answered.

He also asserted, for the first time, that one of his team members was to have been Mr. Reid, a British convert to Islam who was arrested on Dec. 22, 2001, while trying to detonate an explosive device in his shoe during a flight from Paris to Miami. Previous investigations have provided no evidence of Mr. Reid's involvement in any other plots, or any efforts to enter the United States in the summer of 2001.

When Robert J. Spencer, the chief prosecutor, had his turn, Mr. Moussaoui agreed with just about every incriminating question.

Mr. Spencer asked if the reason Mr. Moussaoui had lied to the F.B.I. agent who questioned him in Minneapolis on Aug. 16 was "so you could allow the operation to go forward."

"That is correct," Mr. Moussaoui replied.

After his arrest, was he looking forward to news of the attacks?

"Yes, you could say that," Mr. Moussaoui said calmly.

He used the phrase "that is correct" dozens of times as the prosecutor led him through the facts presented in the indictment.

It was correct, Mr. Moussaoui said, that he knew hijackers were in the United States for some imminent mission that involved flying planes into buildings.

Was his reason for hoping to fly a plane into the White House to kill Americans?

"That is correct," he said.

Mr. Moussaoui, who has been truculent through proceedings in the past three years and whose outbursts have drawn rebukes from the judge, spoke calmly with a heavy French accent, leaning forward in the witness chair, sometimes casually holding out an empty cup for a marshal to fill with water.

He seemed testy only when being questioned by his own lawyer, who tried with little success to elicit replies that would help his case.

Mr. Moussaoui's testimony even undercut one of the pillars of the defense his lawyers had laid out for him, that he did not know any of the 19 hijackers who died on Sept. 11. As Mr. Spencer showed him their photos, Mr. Moussaoui said he knew 17 of them from the days he helped run a Qaeda guesthouse in Afghanistan.

Mr. Moussaoui, a 37-year-old Frenchman of Moroccan heritage, has already pleaded guilty to six conspiracy counts in connection with the Sept. 11 attacks. The sole question before the jury here is whether he should be executed or spend the rest of his life in jail.

The Justice Department has argued that he should pay with his life because had he not lied, the Federal Bureau of Investigation and the Federal Aviation Administration would have moved swiftly to thwart the plot.

The defense may complete its case by Tuesday, and Judge Leonie M. Brinkema told the jurors they might get to deliberate as early as Wednesday. Under the federal death penalty law, the jury must first consider whether Mr. Moussaoui's actions caused some deaths on Sept. 11. If they decide unanimously that his actions did, they move to another phase to consider whether the death penalty is appropriate.

Mr. Moussaoui's court-appointed lawyers, with whom he does not speak, almost certainly did not want him to testify as he did. But under the law they had no power to prevent him from doing so.

Until Mr. Moussaoui took the stand, the momentum seemed to be with the defense, which had contended that he was a fringe figure in Al Qaeda whose leaders held him in low regard.

Moreover, the government's case had been plagued by problems. After the disclosure that a government transportation lawyer had improperly coached some aviation security witnesses, the testimony of two other witnesses about how the F.B.I. handled investigative leads before Sept. 11 raised as many questions over the government's performance as it did about Mr. Moussaoui's culpability.

In addition to having served as the government's star witness, Mr. Moussaoui acknowledged to Mr. Spencer the depth of his hatred of Americans before a jury that is to decide whether he lives or dies.

He agreed that he rejoiced in the death of nearly 3,000 people on Sept. 11 and that in August 2002, he wrote that he described a tape recording of a female flight attendant pleading for her life aboard one of the planes as "gorgeous."

David Stout and David Johnston contributed reporting for this article.

    Moussaoui, Undermining Case, Now Ties Himself to 9/11 Plot, NYT, 28.3.2006, http://www.nytimes.com/2006/03/28/national/28moussaoui.html?hp&ex=1143522000&en=3a5a471a94dc01da&ei=5094&partner=homepage

    Related http://news.findlaw.com/legalnews/us/terrorism/cases/index.html#moussaoui

 

 

 

 

 

On Stand, Moussaoui Says He Knew of Plan to Attack W.T.C.

 

March 27, 2006
The New York Times
By THE ASSOCIATED PRESS

 

ALEXANDRIA, Va. -- Al-Qaida conspirator Zacarias Moussaoui testified Monday he lied to investigators when arrested in August 2001 because he wanted to let the attacks of Sept. 11 go forward.

"Yes, you can say that," Moussaoui said when the prosecution asked if that was why he misled them. The statement was key to the government's case that the attacks might have been averted if Moussaoui had been more cooperative following his arrest.

He told the court he knew the attacks were coming some time after August 2001 and bought a radio so he could hear them unfold.

Specifically, he said he knew the World Trade Center was going to be attacked, but asserted he was not part of the plot and didn't know the details.

Taking the stand in his own defense in his death-penalty trial, Moussaoui said he declined to become a suicide pilot in some future attack when asked by a senior al-Qaida official in 1999.

Nineteen men pulled off the Sept. 11, 2001, attacks on New York in Washington in the worst act of terrorism ever on U.S. soil.

"I had knowledge that the Twin Towers would be hit," Moussaoui said. "I didn't know the details of this."

Asked by his lawyer why he signed his guilty plea in April as "the 20th hijacker," Moussaoui replied: "Because everybody used to refer to me as the 20th hijacker and it was a bit of fun."

Moussaoui testified calmly in his death penalty trial, but against his lawyers' wishes.

Before he took the stand, his lawyers made a last attempt to stop him from testifying, but failed. Defense attorney Gerald Zerkin argued that his client would not be a competent witness because he has contempt for the court, only recognizes Islamic law and therefore "the affirmation he undertakes would be meaningless."

Asked by Zerkin if he was supposed to be one of the men who would pilot a plane on 9/11, he said no, adding: "I'm sorry, I don't know about the number of planes but I was not the fifth (pilot) hijacker."

The 19 terrorists on Sept. 11 hijacked and crashed four airliners, killing nearly 3,000 people in the World Trade Center, the Pentagon and on the planes.

About his guilty plea, he said: "I took a pen. I signed it."

He said talked with an al-Qaida official in 1999 about why a 1993 bombing at the World Trade Center failed to bring the towers down. He said "was asked in the same period for the first time if I want to be a suicide pilot and I declined."

Yet, he said he was taking flight training for a separate, future attack on the White House, when he was arrested in August 2001 on immigration charges.

He told the court it was "difficult to say" whether he was involved in the planning for 9/11. At some point, he said, he received training on what to do if at the controls of a hijacked plane if a fighter aircraft approached.

Just before Moussaoui took the stand, the court heard testimony that two months before the attacks that a CIA deputy chief waited in vain for permission to tell the FBI about a "very high interest" al-Qaida operative who became one of the hijackers.

The official, a senior figure in the CIA's Osama bin Laden unit, said he sought authorization on July 13, 2001, to send information to the FBI but got no response for 10 days, then asked again.

As it turned out, the information on Khalid al-Mihdhar did not reach the FBI until late August. At the time, CIA officers needed permission from a special unit before passing certain intelligence on to the FBI.

The official was identified only as John. His written testimony was read into the record.

"John's" testimony was part of the defense's case that federal authorities missed multiple opportunities to catch hijackers and perhaps thwart the 9/11 plot.

His testimony included an e-mail sent by FBI supervisor Michael Maltbie discussing Moussaoui but playing down his terrorist connections. Maltbie's e-mail said "there's no indication that (Moussaoui) had plans for any nefarious activity."

He sent that e-mail to the CIA even after receiving a lengthy memo from the FBI agent who arrested Moussaoui and suspected him of being a terrorist with plans to hijack aircraft.

Former FBI agent Erik Rigler, the first defense witness, was questioned about a Justice Department report that he said criticized the CIA for keeping intelligence about two known al-Qaida terrorist operatives in the United States from the FBI for more than a year.

Under cross-examination from the prosecution, he acknowledged the report did not link the pair specifically to a civil aviation plot. But he said the report's thrust was about their preparations for what turned out to be the 9/11 attacks, and their ability to elude federal agents.

"That's why they came here," he said. "They didn't come for Disney."

The two were among the 19 suicide hijackers on 9/11. The report said they had been placed on a watch list in Thailand in January 2000, but not on a U.S. list until August 2001.

Prosecutors argue that Moussaoui, a French citizen, thwarted a prime opportunity to track down the 9/11 hijackers and possibly unravel the plot when he was arrested in August 2001 on immigration violations and lied to the FBI about his al-Qaida membership and plans to hijack a plane.

Had Moussaoui confessed, the FBI could have pursued leads that would have led them to most of the hijackers, government witnesses have testified.

To win the death penalty, prosecutors must first prove that Moussaoui's actions -- specifically, his lies -- were directly responsible for at least one death on Sept. 11.

If they fail, Moussaoui would get life in prison.

Moussaoui pleaded guilty in April to conspiring with al-Qaida to hijack planes and other crimes, but he has denied any role in 9/11. He says he was training for a possible future attack on the White House.

    On Stand, Moussaoui Says He Knew of Plan to Attack W.T.C., NYT, 27.3.2006, http://www.nytimes.com/aponline/national/AP-Moussaoui.html?hp&ex=1143522000&en=e4d42c8afe4a3c04&ei=5094&partner=homepage

 

 

 

 

 

News Analysis

Unwelcome Attention From Moussaoui Trial

 

March 25, 2006
The New York Times
By NEIL A. LEWIS and DAVID JOHNSTON

 

WASHINGTON, March 24 — The sentencing trial of Zacarias Moussaoui was supposed to have been the government's best opportunity to hold someone accountable for the deaths on Sept. 11, 2001.

But after federal prosecutors finished laying out their case this week, even those who strongly supported an aggressive prosecution may wonder whether the trial has shed as much light on Mr. Moussaoui's culpability as it has on the missteps and mistakes by law enforcement agencies.

The testimony of two prosecution witnesses, in particular, has brought renewed and unwelcome attention to how the Federal Bureau of Investigation dealt with early warning signs.

Mr. Moussaoui is the sole person to go to trial in an American courtroom for the attacks, making him a proxy for the 19 hijackers who were killed carrying out the attacks and the chief planners who are being held in secret C.I.A. prisons overseas.

Mr. Moussaoui in jail on Sept. 11, but prosecutors have argued that he deserves to be executed because he lied to investigators about what he knew of Al Qaeda plans to fly planes into buildings when he was arrested three weeks earlier on immigration violations.

On Monday, defense lawyers are expected to offer a set of extraordinary trial exhibits, statements about Mr. Moussaoui by a handful of senior Qaeda officials gathered somewhere in the secret overseas detention centers that the C.I.A. maintains.

The jury will be read the statements from detainees including Khalid Shaik Mohammed, the mastermind of Sept. 11, and Ramzi bin al-Shibh, its paymaster. Officials expect the two to describe Mr. Moussaoui as an unreliable fringe figure in Al Qaeda.

The government presentation, which ended on Thursday, did not go smoothly. First, the prosecution nearly collapsed after the disclosure that a transportation lawyer working with the prosecutors had improperly coached aviation witnesses.

Although that occurred out of the jury's view, other problems surfaced when the prosecutors presented two witnesses supposed to bolster their case that Mr. Moussaoui's lies made him responsible for nearly 3,000 deaths. The two witnesses testified that if he had told the truth on Aug. 16, 2001, the bureau could have moved swiftly to foil the plot.

The first witness, Harry Samit, an F.B.I. agent in Minnesota who questioned Mr. Moussaoui at his arrest, firmly asserted that had he been given the truth "we would have several new leads to investigate," and the plot might have been thwarted. Instead, he said, Mr. Moussaoui's answers sent investigators on "wild goose chases."

Under cross-examination by Edward B. MacMahon Jr., a court-appointed lawyer for Mr. Moussaoui, Mr. Samit acknowledged that after the attacks he had written strongly worded reports saying his superiors had improperly blocked his efforts to investigate Mr. Moussaoui. He added that he was convinced that Mr. Moussaoui was a terrorist involved in an imminent hijacking plot.

That senior bureau officials dragged their feet on investigating Mr. Moussaoui by seeking search warrants from a special intelligence court or a more routine criminal search warrant was not new. But it had never been presented so vividly as a reluctant Mr. Samit was obliged to do under cross-examination.

He offered a devastating comment from a supervisor who said pressing too hard to obtain a warrant for Mr. Moussaoui would hurt his career. Mr. Samit also wrote that his superiors did not act because they were guilty of "criminal negligence" and they were gambling that Mr. Moussaoui had little to offer. The lost wager, Mr. Samit said, was paid in many lives.

Mr. Samit was followed to the witness stand by Michael Rolince, a retired F.B.I. counterterrorism supervisor who similarly recited a list of actions that the bureau could have taken if Mr. Moussaoui had told them about Qaeda plans to take over planes with knives and fly into buildings.

But when Mr. MacMahon began reading from a document detailing many suspicions about Mr. Moussaoui's intentions, Mr. Rolince interrupted, "Can I ask what document that's coming from?"

Mr. MacMahon obliged, noting that it was an urgent memorandum written by Mr. Samit on Aug. 18, 2001, hoping to attract the attention of headquarters. Mr. Rolince had inadvertently underlined that the agent's suspicions had never risen to his attention.

One problem for the bureau is that the backbone of the prosecution case, that the bureau could have disrupted the plot had Mr. Moussaoui admitted all he knew, represents a substantial revision of conventional wisdom at the law enforcement agency.

For years, agents have expressed the view that Mr. Moussaoui knew little about what his Qaeda superiors wanted of him and had said that it was highly speculative whether more information would have deterred the attacks.

A number of bureau officials have contended that even if the bureau had more clues about the hijackers, they might have been able only to put them under surveillance because they had not committed any crime.

Sally Regenhard of the Bronx, whose son, a probationary firefighter, was killed in the collapse of the World Trade Center, said she was upset by the reminders of the failure of law enforcement authorities to heed many leads before the attacks.

"It's dismaying, but there it is," said Ms. Regenhard, who has been one of the dozens of family members of Sept. 11 victims who have visited the Virginia courtroom to observe the trial. "There were discrete warnings known to the government. People don't realize this."

The most pivotal moment may occur next week, however, when Mr. Moussaoui is expected to take the stand. Under the federal death penalty law, the jurors have to consider first whether he is responsible for any of the Sept. 11 deaths before they consider several factors in deciding whether to order his execution. The jury would have to be unanimous in deciding he bore responsibility for the trial to go to the next phase.

In addition to the evidence, the jurors may respond viscerally and decide that Mr. Moussaoui is an odious figure undeserving of sympathy. They have heard some of his outbursts in pretrial proceedings in which he proclaimed in their presence his membership in Al Qaeda. He has said that he was indeed training to fly a plane into a building but that he was not involved in the Sept. 11 plot and should not be executed for it.

His testimony will give the jurors another opportunity to take his measure.

    Unwelcome Attention From Moussaoui Trial, NYT, 25.3.2006, http://www.nytimes.com/2006/03/25/politics/25moussaoui.html

 

 

 

 

 

Prosecution of Moussaoui Finishes Up

 

March 24, 2006
The New York Times
By NEIL A. LEWIS

 

ALEXANDRIA, Va., March 23 — Prosecutors on Thursday finished presenting their case that Zacarias Moussaoui should be executed for the deaths that occurred on Sept. 11, 2001, offering evidence linking him to the paymaster of Al Qaeda who provided money to most of the 19 hijackers who died in the plot.

The trial, which will resume on Monday, offers the possibility of three dramatic moments in short order. First, the court may hear from Carla J. Martin, the Transportation Security Administration lawyer whose improper coaching of witnesses nearly derailed the trial.

Then, as Mr. Moussaoui's lawyers pick up the arguments they began Thursday afternoon, the jury is expected to have the extraordinary experience of hearing testimony gathered in the United States' secret overseas detention system.

Defense lawyers plan to have people recite the testimony of some of the most valuable captives, including Khalid Shaikh Mohammed, the mastermind of the Sept. 11 attacks, and Ramzi bin al-Shibh, the operation's paymaster, who are imprisoned under American supervision. There also might be testimony read from Mohammed Al-Qahtani, a prisoner at Guantαnamo Bay, Cuba, who is believed by many to have been the missing "20th hijacker."

Sometime after the attacks, senior Justice Department officials identified Mr. Moussaoui, a 37-year-old Frenchman of Moroccan heritage, as the 20th hijacker, surmising that he was to have been aboard the plane that crashed in Pennsylvania with four hijackers aboard. The other three planes each had five hijackers.

Government officials have since dropped that assertion, and prosecutors have argued that Mr. Moussaoui should be executed because he hid what he knew about plots to fly airplanes into buildings when he was arrested, before the attacks, on immigration charges in Minnesota, where he was learning to fly jetliners.

The third dramatic event is the testimony of Mr. Moussaoui himself sometime next week. Judge Leonie M. Brinkema first granted permission for him to represent himself but revoked it after he would not heed her instructions and had outbursts.

Now Mr. Moussaoui does not speak to his lawyers and has reviled them in comments to the court.

Mr. Moussaoui, who has sat quietly through the last two weeks of the trial, usually leaves the courtroom with some shouted slogan praising Osama bin Laden or cursing the United States. On Thursday, he offered a new statement, saying, "I will testify whether you want it or not."

The arrangement to get testimony from the high-level detainees who are Qaeda members came after intense negotiations among the defense, the government and the court.

Prosecutors ended their presentation with the testimony of a former F.B.I. agent, Aaron Zebley. Mr. Zebley, now a federal prosecutor, linked Mr. Moussaoui to the hijackers by way of Mr. bin al-Shibh and money he sent from Germany. He acknowledged in cross-examination by Edward B. MacMahon Jr., a lawyer for Mr. Moussaoui, that there was no evidence that Mr. Moussaoui had telephoned or met with any of the hijackers.

    Prosecution of Moussaoui Finishes Up, NYT, 24.3.2006, http://www.nytimes.com/2006/03/24/national/nationalspecial3/24moussaoui.html

 

 

 

 

 

Testimony on Enron Weakened a Day Later

 

March 24, 2006
The New York Times
By ALEXEI BARRIONUEVO

 

HOUSTON, March 23 — Under questioning by defense lawyers, Enron's former treasurer backed away on Thursday from statements that Jeffrey K. Skilling had supported a controversial off-the-books transaction as a way to skirt accounting rules, and admitted to other weaknesses in his earlier testimony.

But Ben F. Glisan Jr., the last high-level manager expected to testify for the government in the criminal trial of Mr. Skilling, a former Enron chief executive, and the company's founder, Kenneth L. Lay, continued to insist that the Raptors financing vehicle he designed had no economic value. Instead, Mr. Glisan said, the Raptors was really an accounting artifice that won plaudits from Mr. Skilling and Mr. Lay for its ability to help Enron avoid reporting hundreds of millions of dollars in losses.

Mr. Glisan told jurors on Wednesday that Mr. Skilling endorsed the use of the Raptors to "circumvent the accounting rules." But on Thursday, under cross-examination by Daniel Petrocelli, Mr. Skilling's lead lawyer, Mr. Glisan said he could not recall the exact words Mr. Skilling used at a May 2000 meeting of the Enron board's finance committee.

"I don't know that he used the word 'circumvent,' " Mr. Glisan said. "The only reason to do it was for an accounting benefit, not an economic benefit. That in itself was improper."

"He didn't say: 'What a great idea, I get to violate accounting rules?' " Mr. Petrocelli asked, pacing the courtroom. Mr. Glisan replied: "He didn't say it in that way."

Mr. Glisan testified for a third day on Thursday. Defense lawyers spent the day trying to poke holes in his earlier testimony, which provided some of the strongest claims yet that the former chief executives had engaged in a criminal conspiracy to defraud Enron investors. He will remain on the stand through Monday, when Bruce Collins, a lawyer for Mr. Lay, is expected to conclude his cross-examination. Prosecutors said late Thursday that they expected to rest their case next week.

Outside the courthouse here, Mr. Petrocelli said Mr. Skilling could take the stand as early as the week of April 10. Mr. Skilling told reporters he was eager to tell his story. "I have spent a long time not being able to say anything, so I am looking forward to testifying," he said.

On Wednesday, Mr. Glisan offered some of the strongest assertions yet that Mr. Lay was aware of serious financial problems before Enron's December 2001 bankruptcy.

He also testified that Mr. Skilling had signed off on the Raptors transactions, and that Andrew S. Fastow, the former chief financial officer, told him Mr. Skilling had approved Mr. Glisan's participation in an off-the-books partnership known as Southampton. The Southampton deal earned Mr. Glisan $1 million for a $5,800 investment in only two months — a sum that Mr. Glisan later concluded was essentially a kickback from Mr. Fastow.

Mr. Glisan also testified that Mr. Fastow and Michael J. Kopper, a Fastow lieutenant, had mentioned the "Global Galactic" document about which Mr. Fastow testified earlier this month. Mr. Fastow said he used that document to keep track of various side deals he had with Mr. Skilling. The deals supposedly guaranteed that yet another off-the-books partnership called LJM would profit from doing deals with Enron. Mr. Fastow ran the partnership while he was chief financial officer, and it was used, Mr. Glisan testified, to help manipulate Enron's earnings.

Under questioning by Mr. Petrocelli on Thursday, Mr. Glisan conceded that he had little proof Mr. Skilling had engaged in any side deals with Mr. Fastow — other than the word of Mr. Fastow and Mr. Kopper, who have both pleaded guilty to stealing from Enron.

Despite several volumes of handwritten notes totaling more than 500 pages, Mr. Glisan conceded that there were only 11 references to Mr. Skilling, none of which suggested wrongdoing. And in 2004 grand jury testimony about off-the-books partnerships, there was no mention of Mr. Skilling, he acknowledged.

Mr. Petrocelli suggested that Mr. Glisan had only recently concluded, under intense government pressure, that widespread fraud had been committed at Enron.

"If Enron hadn't gone bankrupt we wouldn't be here?" Mr. Petrocelli asked.

Mr. Glisan replied: "That's hard to say."

Unlike others who struck deals with the government but are still awaiting sentencing, Mr. Glisan pleaded guilty to one count of a 24-count indictment in September 2003 and chose to go straight to prison to serve a five-year sentence.

Mr. Petrocelli strongly suggested on Thursday that the government squeezed Mr. Glisan at every turn in the course of its Enron investigation. Mr. Glisan initially expected to be placed in a minimum-security camp in Texas. But instead he spent the first 11 days of his sentence in solitary confinement. Then he was moved into a low-security facility for about six months where he shared a cell with two other inmates and feared he would be beaten by other prisoners if they found out he was helping the government.

In February 2004 he was brought to the federal courthouse here in shackles. He was led onto an elevator. There was Mr. Skilling, in handcuffs, on the very day he was arrested and entering a plea of not guilty to 35 charges of fraud, insider trading and conspiracy.

"Did you believe for one second, sir, that that was a coincidence?" Mr. Petrocelli asked on Thursday.

"No, I didn't believe that," Mr. Glisan said.

    Testimony on Enron Weakened a Day Later, NYT, 24.3.2006, http://www.nytimes.com/2006/03/24/business/businessspecial3/24enron.html

 

 

 

 

 

Jury Told Lay Lied on Enron

 

March 23, 2006
The New York Times
By ALEXEI BARRIONUEVO

 

HOUSTON, March 22 — In seven weeks of court testimony, prosecutors landed only glancing blows against Kenneth L. Lay, a former chief executive of Enron who is on trial for criminal conspiracy and fraud. Mr. Lay's luck may have run out in Week 8.

Ben F. Glisan Jr., Enron's former treasurer, delivered stinging testimony on Wednesday that contradicted Mr. Lay's claims that he had been unaware of the company's crumbling financial picture and had not known about some of the illicit side deals involving top managers.

In a full day of questioning by prosecutors, Mr. Glisan said that Mr. Lay had lied to credit-rating agencies, employees and Wall Street analysts about the company's performance and need for more urgent action, even as he participated in internal discussions with managers about what to do about Enron's "dire" financial situation.

Mr. Glisan offered the strongest testimony yet that there was a criminal conspiracy at Enron involving Mr. Lay; Jeffrey K. Skilling, also a former Enron chief executive; and other top managers to manipulate earnings and mislead investors about mounting problems.

Mr. Glisan described one previously undisclosed meeting in which, he said, Mr. Lay had refused to accept his resignation when he admitted making a $1 million profit in a kickback scheme set up by a former chief financial officer, Andrew S. Fastow. Mr. Lay's response, Mr. Glisan testified, had been that his participation in the scheme, known as the Southampton deal, was "O.K." and that it would be the "worst" time for him to resign.

A few weeks later, Mr. Glisan was fired, along with another Enron employee who had participated in the scheme.

Mr. Glisan first took the stand late Tuesday in a much-anticipated appearance. Mr. Glisan, 40, is the government's last major witness in the trial of Mr. Skilling and Mr. Lay, who are accused of conspiring to defraud Enron while enriching themselves.

Mr. Glisan's appearance was considered critical because, like Mr. Fastow, his former boss, who testified earlier in the trial, Mr. Glisan was in the inner circle of top decision makers at Enron.

Mr. Glisan was also deeply involved in trying to rein in the mounting credit and liquidity crisis that enveloped the company in the four months before it collapsed into bankruptcy.

But unlike Mr. Fastow or any other major witness who has testified, Mr. Glisan could end up being the crucial witness in the trial. That is because Mr. Glisan, the only major Enron figure who has already been sentenced, is under no obligation to testify. He is unlikely to receive any consideration, like a shorter sentence, from the government in return for his testimony. He is on furlough from a minimum-security prison in Beaumont, Tex., while testifying.

He has served more than half of a five-year sentence. He pleaded guilty to conspiring to commit fraud through his work on the Raptors financing vehicles, which he admitted were used to burnish Enron's financial statements by hiding hundreds of millions of dollars of losses.

Mr. Glisan also provided strong testimony on Wednesday against Mr. Skilling. He said Mr. Fastow had told him that Mr. Skilling had signed off on "bear hug" side deals, guarantees that off-the-books partnerships would not lose money by investing in Enron assets — deals that helped Enron meet its earnings targets.

Mr. Glisan also said Mr. Fastow had discussed with him a three-page "Global Galactic" document that supposedly recorded the side deals with Mr. Skilling and others.

Mr. Glisan pleaded guilty to one count of a 26-count indictment and is testifying under an immunity agreement. On Wednesday, he admitted other crimes, including participating in the Southampton partnership. He recounted how Mr. Fastow had turned Mr. Glisan's $5,826 investment into a $1 million profit in just two months. He said Mr. Fastow had assuaged his concerns about the propriety of the deal by saying it had been cleared with Mr. Skilling. Later, when the $1 million check was wired into his account, Mr. Glisan said, he knew the deal "did not make sense."

But Mr. Glisan did not do anything about it, choosing out of greed, he said, to stay silent and consider the payment as compensation for his work on the Raptors transactions, which Mr. Fastow had credited with helping burnish Mr. Fastow's reputation as chief financial officer.

Finally, after Mr. Fastow was forced to resign in large part because of his participation in off-the-books partnerships, Mr. Glisan was concerned enough, he said, to tell Mr. Lay about Southampton and offer to resign. "His response was I shouldn't, that my participation was O.K. and the worst thing I could do is resign."

But lawyers from outside the company continued to look into the deals, and by Nov. 7 Mr. Glisan had been forced to resign.

"I deeply regret" the Southampton deal, he said. But he said he regretted other actions more, actions that "affected Enron investors far more greatly."

Those included the Raptors transactions, which Mr. Glisan said he designed in 2000 to help Enron improve its reported earnings by hiding losses. Mr. Glisan said he fully described the Raptors to Mr. Skilling in two meetings in the spring of 2000. Mr. Skilling then took the idea to the board's finance committee for approval.

Mr. Glisan said he expressed his own reservations that the structures would not survive scrutiny by outside accountants. But, he said, Mr. Skilling said it was not a device he would normally recommend, "except that it would allow us to circumvent accounting rules."

Mr. Glisan said he had told the finance committee that the Raptors had "no economic value." But when Mr. Lay heard of their potential to help Enron meet its earnings, Mr. Glisan said, he giggled "in delight."

Also on Wednesday, Mr. Glisan testified about the many problems facing Enron just as Mr. Skilling was resigning as chief executive in August 2001. By then, Mr. Glisan said, both Mr. Skilling and Mr. Lay knew Enron's international assets contained $1 billion in embedded losses.

Mr. Glisan testified that after Mr. Skilling resigned, Mr. Lay and the new Enron president, Greg Whalley, asked Mr. Glisan to look into how large a write-off of the troubled assets the company could take without affecting its credit rating, critical to Enron's ability to continue to borrow and do business as an energy trader. Mr. Glisan came back with a $1 billion figure, he said.

"It was backward," he said. "We should have taken the charges we needed to take and deal with the consequences with our ratings agencies."

Then, on Sept. 6 and 7, managers met at a retreat just outside Houston. The retreat soon devolved into an agonizing discussion about Enron's deepening problems, including the overvalued international assets, about $1 billion in losses in the broadband unit and another $1 billion in losses in Azurix, a division that had unsuccessfully tried to push the company into the global water business.

A discussion among business unit managers became so depressing that one manager, John Lavorato, who headed the wholesale energy unit, sarcastically said that "he was glad he didn't have a gun or he would shoot himself," Mr. Glisan said.

"It was ugly," Mr. Glisan said. "We were struggling greatly."

The managers also debated the use of "aggressive accounting," Mr. Glisan said. Mr. Lavorato suggested that Enron was using it far too often and that its auditor, Arthur Andersen, "should not be the standard and would agree to anything," Mr. Glisan testified.

Richard A. Causey, the chief accounting officer, grew upset, saying that he, not the accounting firm, was the standard, and that Mr. Lavorato's unit had benefited the most through use of "the most aggressive accounting at the company."

Mr. Lay, also at the retreat, defended the use of structured finance transactions like the LJM partnership and the Raptors, saying, "They are imperative for us to hit our numbers and we will continue to do them."

A month later, in October, Mr. Lay tried to assure employees at a large meeting that Enron would not rely on such transactions anymore, that "plain vanilla is just fine," statements that Mr. Glisan said were misleading.

Also that October, with credit rating agencies threatening to downgrade Enron's bonds, Mr. Lay personally assured Ronald Barone, an analyst at Standard & Poor's, that Enron would not write down any more assets beyond a planned $1 billion write-down. But Mr. Glisan said that Mr. Lay knew that several international assets, including power plants in India and Brazil, still needed to be written down soon.

Mr. Glisan said Mr. Lay had also lied to Mr. Barone about the nature of a $1.2 billion shareholder equity reduction. Mr. Lay had asked Mr. Glisan earlier how the charge should be characterized, and, on advice from Mr. Causey, Mr. Glisan said, they "constructed the story" to report the reduction as an unwinding of the Raptor transactions rather than the truth— that it was a result of an accounting error — to avoid scrutiny in the market.

"I understand, that makes perfect sense," Mr. Lay said, according to Mr. Glisan. "That's why I asked the question."

    Jury Told Lay Lied on Enron, NYT, 23.3.2006, http://www.nytimes.com/2006/03/23/business/businessspecial3/23enron.html

 

 

 

 

 

Moussaoui could have led to 9/11 attackers: FBI

 

Thu Mar 23, 2006 10:11 PM ET
Reuters
By Deborah Charles

 

ALEXANDRIA, Virginia (Reuters) - If Zacarias Moussaoui had told authorities in August 2001 a hijacking plot was brewing in the United States, the FBI could have found records leading them to 11 of the September 11 attackers, a former FBI official said on Thursday.

Aaron Zebley, a former FBI agent who now works as a federal prosecutor, testified in Moussaoui's sentencing trial that a major investigation would have been launched if Moussaoui had told about the plot when he was arrested in August 2001.

Zebley was the final witness for the U.S. government's only case in connection with the September 11 attacks. The prosecution rested its case after the former agent's testimony.

Moussaoui, who has pleaded guilty to conspiracy charges, denied involvement in the September 11 hijackings but said he was to take part in a second wave of attacks on the White House. The trial is to decide if he will be executed for his crimes.

After the judge and jury left the courtroom for a break before the defense began its case, Moussaoui -- who has little contact with his lawyers whom he has tried to fire -- yelled: "I will testify whether you want it or not. I will testify."

Zebley gave a detailed explanation of how the FBI could have gotten names of 11 of the 19 hijackers by searching wire transfer and phone calling-card records and by canvassing flight schools.

"You've got 11 different names. We could have set about finding them, of course, shared information with the intelligence community and ... federal law enforcement," said Zebley, adding the FBI would have specifically warned the Federal Aviation Administration and the Secret Service.

Moussaoui's court-appointed lawyer, Edward MacMahon, disagreed that a major investigation would have been launched, saying other warnings had been ignored by the FBI.

He said the FBI agent who had arrested Moussaoui on August 16, 2001, had sent 70 messages to headquarters warning he thought Moussaoui was a terrorist, but no one listened.

"The FBI needs a confession from a ... terrorist to start an investigation," MacMahon said heatedly, sparking an objection from the prosecution and leading the judge to urge attorneys on both sides to "take a deep breath."

Later, the defense showed evidence the FBI had information in August 2001 that two hijackers -- Khalid al Mihdhar and Nawaf al Hazmi -- were associated with Osama bin Laden, were believed to be terrorists and could be in the United States.

Despite having the information, and the fact Mihdhar and Hazmi used their real names while in the United States for months, the FBI did not find them.

 

STATEMENT OF FACTS

Separately, a Transportation Security Administration lawyer, Carla Martin, who improperly contacted aviation witnesses who were scheduled to testify, was subpoenaed to appear on Monday at a hearing about her conduct, defense sources said.

Martin's actions delayed the trial last week after the judge initially threw out that element of the government's case. Testimony resumed after Judge Leonie Brinkema agreed to allow the government to bring forward new "untainted" witnesses and evidence.

Prosecutors are trying to prove that if Moussaoui, who was arrested in August 2001 after raising suspicions at a flight school, had not lied to the FBI the attacks might have been thwarted by investigative work by the FBI and heightened security efforts by the FAA.

When he pleaded guilty last year, Moussaoui signed a statement of facts that said he knew of al Qaeda's plans to fly airplanes into buildings in the United States.

Zebley's testimony came a day after a senior FAA official said stricter security could have been put in place before September 11 if officials had known of a potential plot to hijack airliners using small knives.

    Moussaoui could have led to 9/11 attackers: FBI, R, 23.3.2006, http://today.reuters.com/news/newsArticle.aspx?type=domesticNews&storyID=2006-03-24T031135Z_01_N22237668_RTRUKOC_0_US-SECURITY-MOUSSAOUI.xml

 

 

 

 

 

U.S. Indicts 50 Leaders of Colombian Rebels in Cocaine Trafficking

 

March 23, 2006
The New York Times
By JUAN FORERO

 

BOGOTΑ, Colombia, March 22 — A federal grand jury in Washington has indicted 50 commanders of Colombia's largest Marxist rebel group, accusing them of running an extensive cocaine trafficking cartel that protects its operations through widespread killings and intimidation, Attorney General Alberto R. Gonzales announced Wednesday.

The indictment accuses the group, the Revolutionary Armed Forces of Colombia, of being behind 50 percent of the world's cocaine trade and 60 percent of the cocaine exported to the United States.

"We believe these men are responsible for not only manufacturing and exporting devastating amounts of cocaine, but enforcing their criminal regime with violence," Mr. Gonzales said.

The practical impact is unclear, since 47 of the 50 commanders remain free in this vast country, leading thousands of fighters in the group's relentless effort to topple President Αlvaro Uribe's government. Three are in Colombian custody, and the United States will seek their extradition, American officials said.

The indictment says rebel commanders ordered their fighters to shoot down crop dusters and to kidnap and kill American citizens, in an effort to dissuade policy makers in Washington from continuing to sponsor a fumigation campaign against the coca plant, from whose leaves cocaine is made.

Some charges in the document may be hard to prove, like those linking commanders to drug operations years ago when the rebel group was believed to be far less involved in the cocaine trade.

But high-ranking Colombian government officials interviewed in Bogotα on Wednesday welcomed the indictment, saying it demonstrated the Bush administration's long-term commitment to Mr. Uribe, the United States' closest ally in Latin America.

"We see this as a recognition of the clear relationship between terrorism and narcotrafficking," said Defense Minister Camilo Ospina. "This shows that a big decision has been made to carry out the final battle against narcotrafficking and terrorism."

The indictment came just days after a coalition of pro-government parties took control of Colombia's 268-member Congress, a decisive political victory for Mr. Uribe. The victory strengthens his chances of winning re-election in May and gives him the political leverage to follow through with his agenda, including aggressively fighting the rebel group with Colombia's Washington-backed army.

With billions of dollars in backing from the United States, Colombia has sprayed much of its drug-crop acreage and carried out army offensives against the rebels. The chief of the national police, Jorge Daniel Castro, said Wednesday in an interview that the group was "in a defensive position" as a result of the military offensives and the fumigation. "We're seeing that they don't have the capacity that they had before," he said.

But the group continues to control wide swaths of territory and has been increasingly active in neighboring Ecuador and Venezuela, where it operates camps for its fighters and traffics cocaine. The group also continues to attack civilians; last month, rebel commandos burst into a meeting in the town of Rivera, southwest of Bogotα, and gunned down nine council members.

Cynthia Arnson, a Colombia expert who is director of the Latin America program at the Woodrow Wilson International Center for Scholars in Washington, noted that it remained difficult to gauge whether the group had suffered big setbacks or had voluntarily withdrawn into the jungle. "This indictment," she said, "could be the beginning of an enormous political and diplomatic offensive to capitalize on whatever military momentum has been achieved."

Mr. Gonzales did not elaborate on what American officials would do to go after individual commanders but said that there were "effective options" and "they all remain on the table." The State Department said it would provide rewards of up to $5 million for information leading to the arrests of members of the rebel group's governing seven-member secretariat.

The leader of the group is Pedro Antonio Marνn — better known by his nom de guerre, Manuel Marulanda — a former chicken farmer who first took up arms in the 1950's during Colombia's internecine political conflict of that era. He later helped found the rebel group, turning a peasant army into the richest, best-equipped Marxist insurgency in Latin America.

The indictment offers a look at how the group went from leveling taxes on farmers who grew coca to operating clandestine airstrips and helping to build an international cocaine distribution network. It also details the brutality used by the group to enforce its dominance of the drug trade. It says commanders ordered the killing of farmworkers who did not comply with the group's rules, in some cases dismembering them or filling their corpses with rocks and sinking them in rivers.

Christine Hauser contributed reporting from New York for this article.

    U.S. Indicts 50 Leaders of Colombian Rebels in Cocaine Trafficking, NYT, 23.3.2006, http://www.nytimes.com/2006/03/23/international/americas/23colombia.html

 

 

 

 

 

Case for Moussaoui Execution Seems Bolstered by 2 Witnesses

 

March 23, 2006
The New York Times
By NEIL A. LEWIS

 

ALEXANDRIA, Va., March 22 — The government's effort to have Zacarias Moussaoui executed for the Sept. 11 terrorist attacks, which has been troubled by serious problems over the last two weeks, appeared to have been bolstered significantly on Wednesday by the testimony of its final two witnesses.

A senior aviation security official at the time of the attacks in 2001 told the jury that several measures could have been put in place that might have foiled the plot if Mr. Moussaoui had disclosed what he knew about Al Qaeda's plans when he was arrested three weeks earlier.

The security official, Robert J. Cammaroto, was followed on the witness stand by Aaron Zebley, an F.B.I. agent at the time of the attacks, whose testimony made similar points about law enforcement.

The detailed testimony of the two witnesses provided the prosecution's strongest presentation to date at the trial, which is being held solely to determine whether Mr. Moussaoui, who has already pleaded guilty, should be executed or remain in jail for the rest of his life. The testimony from the two followed several days of disarray in which the government's case nearly fell apart.

Two F.B.I. officials who testified this week for the prosecution seemed mainly to help the defense by reinforcing the notion that the bureau had dragged its feet in following up leads from agents in the field that Mr. Moussaoui had valuable information about an imminent hijacking plot.

The trial was disrupted last week after the disclosure that a lawyer for the Transportation Security Administration had improperly coached aviation security officials about how to testify. Judge Leonie M. Brinkema ruled that because of the actions of the lawyer, Carla J. Martin, the prosecution would be prohibited from calling those witnesses, a crippling blow to the government's case.

Judge Brinkema relented, however, and allowed prosecutors to try to find another, "untainted" aviation security witness to help make their argument. It was Mr. Cammaroto who appeared on the witness stand Wednesday afternoon as that substitute, and he briskly listed the steps the Federal Aviation Administration could have taken in the middle of August 2001 when Mr. Moussaoui was arrested on immigration charges in Minnesota, where he was learning to fly a jetliner.

At the time, Mr. Cammaroto was the F.A.A.'s official in charge of issuing security directives to United States airlines in response to the latest intelligence reports.

Under questioning by David J. Novak, a prosecutor, Mr. Cammaroto listed a half-dozen ways that airport security could have been increased if he had learned what Mr. Moussaoui acknowledged in his guilty plea last April: that he was an Al Qaeda member and that the group had discussed flying planes into buildings by disabling crews using short-bladed knives that were allowed on planes at the time.

"We could have taken several steps," Mr. Cammaroto said, listing among others the banning of all knives, shifting resources like air marshals to domestic flights, ordering physical "pat-downs" of passengers and making metal detectors more sensitive.

Gerald T. Zerkin, a public defender representing Mr. Moussaoui, suggested in his cross-examination that such security measures could not have been adopted quickly. Mr. Cammaroto acknowledged that the hiring of new air marshals would have taken months. But he said many of the steps could have been put in place within hours, and he cited the foiling of a multiple-plane hijack plot in the Philippines in 1995 as an example.

Mr. Zebley, the former F.B.I. agent, who has not yet been cross-examined, testified that information discovered after the attacks could have provided important leads beforehand. He noted that Mr. Moussaoui had received payments for his flight training from the same person who had sent money to some of the hijackers. He said that had Mr. Moussaoui told investigators at the time of his arrest about his paymaster and his intentions to commit a terrorist act, it would have been easy to trace the other payments made by the same man.

The prosecutors contend that even though Mr. Moussaoui was in jail at the time of the attacks, he is responsible because his lies allowed "his brothers to go forward." Mr. Moussaoui's lawyers, who are to begin making their case next week, have said in papers that the government should not be able to execute someone on the speculative theory that had he provided information, the attacks would not have occurred.

    Case for Moussaoui Execution Seems Bolstered by 2 Witnesses, NYT, 23.3.2006, http://www.nytimes.com/2006/03/23/national/nationalspecial3/23moussaoui.html

 

 

 

 

 

Roommate testifies about Moussaoui's interest in jihad

 

Posted 3/21/2006 11:14 AM Updated 3/21/2006 11:57 AM
USA Today

 

ALEXANDRIA, Va. (AP) — Al-Qaeda conspirator Zacarias Moussaoui tried to enlist an Oklahoma roommate in holy war even as he pressed ahead with his own terrorist training, according to court testimony in his death-penalty trial Tuesday.

Prosecutors showed the jury a videotaped deposition by Hussein al-Attas to try to build their case that Moussaoui was a serious terrorist threat who could have helped investigators head off the Sept. 11, 2001, attacks had he not lied to them.

Al-Attas said in his deposition that Moussaoui talked about holy war every day when they roomed together, taught him martial arts and proposed sending him to Pakistan to learn the Islamic militant justification for jihad.

"Your obligation, like any other Muslim, is to be ready for jihad," he quoted Moussaoui as telling him. Al-Attas also said Moussaoui told him: "This is the only way for me to get to paradise."

Al-Attas is a Saudi-born Yemeni citizen who was attending the University of Oklahoma when he roomed with Moussaoui for more than a month in the summer of 2001. Moussaoui was taking flight training in Norman, Okla.

When federal agents arrested Moussaoui in Minnesota in August 2001, where he wanted to advance his training by learning to fly a commercial airliner, al-Attas was with him. Al-Attas spent more than a year in jail for making false statements to 9/11 investigators.

He said in his deposition, taken in 2002, that Moussaoui told him it was easy to fly a big airplane, except for landing and bad weather. Al-Attas also said he ripped up application papers for a Pakistani visa when he was arrested on immigration charges, because he was scared.

On Monday, FBI agent Harry Samit testified that his belief that Moussaoui was a radical Islamic extremist bent on terrorism was based in part on al-Attas' statements.

Samit also testified Monday that he worked obsessively after arresting Moussaoui on Aug. 16, 2001, to convince FBI headquarters that Moussaoui warranted a full-scale investigation and that a search warrant should be obtained for his belongings.

The agent obtained a search warrant only after the Sept. 11 attacks, and attributed the FBI's failure to launch a timely investigation to "criminal negligence" and careerism by certain agents in FBI headquarters. The bureau's failures thwarted an opportunity to prevent the attacks, he said.

Moussaoui is the only person charged in this country in the Sept. 11 attacks.

He has already pleaded guilty to conspiring with al-Qaeda to hijack aircraft and commit other crimes. But he denies a specific role in 9/11, saying his training was for a future attack. His sentencing trial will determine his punishment: death or life in prison.

The FBI's actions between Moussaoui's arrest and Sept. 11 are crucial to the trial because prosecutors allege that Moussaoui's lies to Samit prevented the FBI from thwarting or at least minimizing the Sept. 11 attacks. Prosecutors must prove that Moussaoui's actions caused the death of at least one person on 9/11 to obtain a death penalty.

The defense argues that nothing Moussaoui said after his arrest would have made any difference to the FBI because its bureaucratic intransigence rendered it incapable of reacting swiftly to Moussaoui's arrest under any circumstances.

    Roommate testifies about Moussaoui's interest in jihad, UT, 21.3.2006, http://www.usatoday.com/news/nation/2006-03-21-moussaoui-trial_x.htm

 

 

 

 

 

Banker Granted Retrial in a Case From 90's Boom

 

March 21, 2006
The New York Times
By ANDREW ROSS SORKIN

 

A federal appeals court yesterday overturned the obstruction-of-justice conviction of Frank P. Quattrone, the investment banker who rose to prominence in the 1990's technology boom, and granted him a new trial.

The ruling, a rare reversal of a jury verdict, is considered a big setback for the Justice Department, which had sought to portray Mr. Quattrone as a symbol of Wall Street excesses during the boom years.

A three-judge panel of the United States Court of Appeals for the Second Circuit in Manhattan unanimously found that the judge's instructions to the jurors had failed to adequately require that they establish that Mr. Quattrone intended to thwart a government investigation.

"We cannot confidently say that if a rational jury was properly instructed," it would have found Mr. Quattrone guilty, the panel wrote.

The ruling, 61 pages long, recalled another prominent defeat in a white-collar case, the decision by the Supreme Court last year to overturn the conviction of the accounting firm Arthur Andersen.

Andersen, which had been Enron's auditor, was likewise found guilty of obstructing justice, but its conviction was overturned because the instructions to the jury were also flawed in the requirement to establish intent.

Mr. Quattrone, who led the initial public offerings of companies like Amazon.com as a banker at Credit Suisse First Boston, had been convicted in May 2004 of obstruction of justice as a result of endorsing a colleague's e-mail message in December 2000 that urged his staff to "clean up those files."

At the time, the Justice Department was investigating whether the investment bank was soliciting kickbacks from preferred investors for hot initial public offerings, but this never led to any criminal charges.

Mr. Quattrone, 50, had faced 18 months in prison; he has remained free pending the outcome of the appeal.

In a statement yesterday, Mr. Quattrone said: "For over three years during this difficult ordeal, I have held my head high knowing I was innocent and never intended to obstruct justice. I am grateful to my family and friends for their steadfast support and to my legal team for their outstanding work."

It is unclear whether prosecutors will pursue a third trial. The United States attorney's office in Manhattan said it would review the appellate decision and consider its options. Mr. Quattrone has already had two trials; the first ended in a mistrial after a jury deadlock.

The panel did find that there was enough evidence to retry Mr. Quattrone. And while deciding that the judge, Richard W. Owen, had given flawed instructions to the jury, it said it agreed with many of his most important rulings in the proceedings, including a decision to restrict the introduction of evidence that defense lawyers contended would have led to an acquittal.

The court also rejected a contention by Mr. Quattrone that prosecutors' highlighting his rich compensation — he made $120 million in 2000 — had prejudiced the jury.

But the panel said that "in the interest of justice," the case should be reassigned to another judge of United States District Court in Manhattan. While the panel said it had found no evidence of bias by Judge Owen, it also said he had made "certain comments" that "could be viewed as rising beyond impatience or annoyance."

The prosecutors in the case, both of whom have since left the United States attorney's office for private practice, were criticized by the appellate panel for trying to prejudice the jury by raising issues outside the scope of the case during their questioning of Mr. Quattrone.

Legal experts said the ruling was not about sending a message to lower courts about how to try future cases, but about the specific failure of the judge in this case to provide necessary instructions for the jury to have found that Mr. Quattrone intended to obstruct justice.

Robert A. Mintz, a former prosecutor and now a partner at the law firm of McCarter & English, said: "In a prosecution in which, by all accounts, the alleged criminal act occurred in a matter of seconds, this was always a case almost entirely about intent: did Quattrone try to destroy documents that he knew the government had already subpoenaed? What this ruling really means is that the jury instructions never asked the right question. By failing to put a finer point on the issue of intent, the facts that could have formed the basis for a conviction were never determined by the jury."

Still, a decision to retry Mr. Quattrone may carry its own risks, other lawyers suggested, adding that prosecutors might be better off seeking a plea arrangement.

"The appellate court said there's a lot of evidence to bring the case again," said Mark C. Zauderer, a partner at the law firm of Flemming Zulack Williamson Zauderer. "But the risk is it appears to look vindictive. And if they lose, it puts in jeopardy the government's theories on obstruction of justice. They've already heightened the public consciousness about the necessity to preserve documents. A loss could communicate the message that it's difficult to prosecute these kinds of cases."

In an interview, Mr. Quattrone's appellate lawyer, Mark F. Pomerantz of the firm of Paul, Weiss, Rifkind, Wharton & Garrison, seemed to suggest that his client would be unlikely to accept a plea deal. "We're not going to rest until this case is dead and buried," he said. "Frank's an innocent man."

When Mr. Quattrone was indicted in April 2003, it was one of a wave of corporate misconduct cases that followed the collapse of Enron and the bursting of the technology bubble. But Mr. Quattrone's case was seen by a number of lawyers as among the weakest of the white-collar cases, as it hinged on a one-line e-mail message.

Like the case against Martha Stewart, who was convicted, the charges were not about questionable financial activities themselves, but about impeding an investigation into those activities. (In 2002, Credit Suisse First Boston agreed to pay $100 million to settle accusations by the Securities and Exchange Commission and NASD that it mishandled the allocation of stock offerings during the technology boom.)

In writing for the appellate panel, Judge Richard C. Wesley said Judge Owen's instructions to jurors were faulty because under them, jurors were not required to determine that Mr. Quattrone knew that the documents he was asking associates to destroy were the ones being sought by investigators. (Judges Peter W. Hall and Frederick J. Scullin Jr. were the other members of the panel.)

The instructions "removed the defendant's specific knowledge of the investigatory proceedings and the subpoenas/document requests from the obstruction equation," Judge Wesley wrote, adding, "It left a bare-bones strict liability case."

Establishing liability is not enough to convict defendants of obstruction of justice or tampering charges, legal experts say. To find them guilty of those crimes, juries must determine that defendants intended to change the course of an investigation or legal proceeding.

"It's very clear for a retrial," said Jonathan Halpern, a former federal prosecutor who is now a litigation partner at Winston & Strawn in New York. "The Second Circuit said it would be sufficient to show that the defendant knew his conduct was likely to affect the proceedings."

Vikas Bajaj and Peter Edmonston contributed reporting for this article.

    Banker Granted Retrial in a Case From 90's Boom, NYT, 21.3.2006, http://www.nytimes.com/2006/03/21/business/21star.html?hp&ex=1142917200&en=551b0e4bce87fcdc&ei=5094&partner=homepage

 

 

 

 

 

Judges Overturn Bush Bid to Ease Pollution Rules

 

March 18, 2006
The New York Times
By MICHAEL JANOFSKY

 

WASHINGTON, March 17 — A federal appeals court on Friday overturned a clean-air regulation issued by the Bush administration that would have let many power plants, refineries and factories avoid installing costly new pollution controls to help offset any increased emissions caused by repairs and replacements of equipment.

Ruling in favor of a coalition of states and environmental advocacy groups, the United States Court of Appeals for the District of Columbia Circuit said the "plain language" of the law required a stricter approach. The court has primary jurisdiction in challenges to federal regulations.

The ruling by a three-judge panel was the court's second decision in less than a year in a pair of closely related cases involving the administration's interpretations of a complex section of the Clean Air Act. Unlike its ruling last summer, when the court largely upheld the E.P.A.'s approach against challenges from industry, state governments and environmental groups, the new ruling was a defeat for the agency and for industry, and a victory for the states and their environmentalist allies.

In the earlier case, a panel including two of the three judges who ruled on Friday decided that the agency had acted reasonably in 2002, when it issued a rule changing how pollution would be measured, effectively loosening the strictures on companies making changes to their equipment and operations.

But on Friday, the court said the agency went too far in 2003 when it issued a separate new rule that opponents said would exempt most equipment changes from environmental reviews — even changes that would result in higher emissions.

With a wry footnote to Lewis Carroll's "Through the Looking Glass," the court said that "only in a Humpty-Dumpty world" could the law be read otherwise.

"We decline such a world view," said their unanimous decision, written by Judge Judith W. Rogers, an appointee of President Bill Clinton. Judges David Tatel, another Clinton appointee, and Janice Rogers Brown, a recent Bush appointee, joined her.

The winners this time —more than a dozen states, including New York and California and a large group of environmental organizations — hailed the decision as one of their most important gains in years of litigation, regulation and legal challenges under the Clean Air Act.

The provision of the law at issue, the "new source review" section, governs the permits required at more than 1,300 coal-fueled power plants around the country and 17,000 factories, refineries and chemical plants that spew millions of tons of pollution into the air each year.

"This is an enormous victory over the concerted efforts by the Bush administration to dismantle the Clean Air Act," Eliot Spitzer, the New York attorney general, whose office led the opposition from the states, said in an interview.

Mr. Spitzer, who is running for governor, said the ruling "shows that the administration's effort to misinterpret and undermine the statute is illegal."

Howard Fox, a lawyer for Earth Justice, which represented six environmental and health groups in the case, called the ruling "a victory for public health," adding, "It makes no sense to allow huge multimillion-dollar projects that drastically increase air pollution without installing up-to-date pollution controls."

The E.P.A. issued only a brief statement, saying: "We are disappointed that the court did not find in favor of the United States. We are reviewing and analyzing the opinion."

The decision is unlikely to be the last word; several circuit courts or appeals courts have considered or decided related cases, and the issue may eventually reach the Supreme Court. Some in Congress say the uncertainty demands an overhaul of the Clean Air Act itself, but there has been no real movement in that direction in recent years.

The new ruling addressed the administration's effort in 2003 to offer relief to energy companies that faced costly settlements of litigation brought by President Clinton's E.P.A. The agency proposed exemptions for companies whenever upgrades to their equipment amounted to less than 20 percent of the replacement cost of the equipment. In effect, that made perennial repairs of old equipment a more attractive alternative in many cases than its outright replacement.

Energy companies said the two rules the administration proposed in 2002 and 2003 would help them expand energy supplies at lower cost to consumers. But environmentalists said the change would result in just the kind of increased pollution that the law was intended to control.

The Clean Air Act calls for companies to build plants with up-to-date control technologies, and the new source provision was a way to ensure that as time goes by, pollution controls must be modernized along with the plants themselves.

Industry groups, which had challenged the first E.P.A. rule last year as not being flexible enough, were aligned with the agency this time. In general, they have been close partners with the Bush administration in environmental matters, pushing for greater economic considerations in the creation of any new policy.

The 20 percent threshold in the overturned rule would have enabled plant operators to make many repairs and upgrades without spending additional tens of millions of dollars for more advanced pollution controls. In settlements under the old rules, some companies faced costs of more than $100 million.

"This is a terrible decision," said Scott Segal, director of the Electric Reliability Coordinating Council, a trade organization, arguing that the "any physical change" definition created financial instability for plant operators who spent as much as $800 million for a new boiler.

He and other industry leaders expressed hope that the court ruling might induce Congress to pass new legislation that would include New Source Review, a step that he said would make it easier for plant operators to plan for their future upgrades and investments.

John Engler, president of the National Association of Manufacturers, called the ruling "a significant setback to business efficiency" and environmental quality.

The government has 45 days to decide whether to seek a review of the ruling by the entire appeals court.

    Judges Overturn Bush Bid to Ease Pollution Rules, NYT, 18.3.2006, http://www.nytimes.com/2006/03/18/politics/18enviro.html?ei=5094&en=881e45691d089a11&hp=&ex=1142744400&adxnnl=1&partner=homepage&adxnnlx=1142658188-h67YunLwPbobFAacRxdZQA

 

 

 

 

 

Google avoids surrendering search requests

 

Posted 3/17/2006 10:59 PM
USA Today

 

SAN FRANCISCO (AP) — A federal judge on Friday ordered Google Inc. to give the Bush administration a peek inside its search engine, but rebuffed the government's demand for a list of people's search requests — potentially sensitive information that the company had fought to protect.

In his 21-page ruling, U.S. District Judge James Ware told Google to provide the U.S. Justice Department with the addresses of 50,000 randomly selected websites indexed by its search engine by April 3.

The government plans to use the data for a study in another case in Pennsylvania, where the Bush administration is trying to revive a law meant to shield children from online pornography.

Ware, though, decided Google won't have to disclose what people have been looking for on its widely used search engine, handing a significant victory to the company and privacy rights advocates.

"This is a clear victory for our users," Nicole Wong, Google's associate general counsel said in a statement Friday.

Attempts to reach a spokesman for the Justice Department late Friday weren't immediately successful.

The government had asked for the contents of 5,000 randomly selected search requests, dramatically scaling back its initial demands after Google's vehement protests gained widespread attention.

When the Justice Department first turned to Ware for help in January, the government wanted an entire week's worth of Google search requests — a list that would encompass queries posed by millions of people.

    Google avoids surrendering search requests, UT, 17.3.2006, http://www.usatoday.com/tech/news/internetprivacy/2006-03-17-google-justice_x.htm

 

 

 

 

 

An Officer Seen as a Hero Faces a Year Behind Bars

 

March 17, 2006
The New York Times
By RALPH BLUMENTHAL and DAN FROSCH

 

CLOUDCROFT, N.M. — Sgt. Billy Anders knew something was terribly wrong. The fresh blood spots outside the roadside cabin, the hatchback with the open rear door in the driveway and the instincts he had honed as a big-city cop in San Antonio gave him reason to be alarmed.

His gut was right.

What happened in the next few minutes on that freezing night in December 2004 would leave two men dead, a community in shock and Sergeant Anders, a beloved local sheriff's officer nearing retirement, charged with killing a handcuffed prisoner. A video camera in the sergeant's own patrol truck was unblinking witness.

That the victim was a white supremacist ex-convict, Earl Flippen, who had just killed his pregnant girlfriend and Sergeant Anders's partner, sprayed gunfire around the girlfriend's 3-year-old daughter and barely missed shooting Sergeant Anders at point-blank range, was beside the point.

Sergeant Anders, who received a minimal one-year prison sentence after pleading guilty to voluntary manslaughter with a firearm, says he has trouble remembering exactly what happened but recalls that he fired to save himself and the little girl.

"I remember he was moving and I considered him a threat," he said in a rambling interview. "I don't remember shooting him when he was handcuffed."

Still, said Sergeant Anders, who was sentenced on March 3, his 63rd birthday: "I'm a reasonable person; I can't argue with the videotape. If I crossed the line, I have to take responsibility."

The sergeant spoke on March 9 while working his way through Cloudcroft's quaint wooden shopping arcade, enveloped in goodbye embraces from supporters. [He began serving his sentence on March 10.]

The case has devastated this close-knit frontier town nearly 9,000 feet above Alamogordo's atomic-testing desert, where drivers say they have no need to use their turn signals: everyone already knows where everyone else is going.

Many see Sergeant Anders as a hero, and supporters have raised the $50,000 that his legal defense cost.

"As far as I'm concerned, Billy did everyone a favor," said Charliss Randall, who works in the Copper Butterfly gift shop. Mr. Flippen had already killed his girlfriend, Ms. Randall noted, adding, "Who else would he kill?"

The emergency workers who rushed to the cabin that night credit Sergeant Anders with saving their lives. "I'm convinced that had he not eliminated the threat, Flippen would have started picking us off," Grady McCright, a former volunteer fire chief of a neighboring community, said outside the sentencing hearing.

But the district attorney, Scot D. Key, said he had had no choice: "It goes without saying that when you have a videotape that clearly shows a police execution, it's just screaming for prosecution."

If Sergeant Anders had not agreed to plead guilty, Mr. Key said, federal prosecutors, concerned about the possibility of acquittal by a state jury, were prepared to try him under a civil rights statute that could have sent him to prison for life. His guilty plea carried a sentence of up to seven years; the one year the judge gave him was the lightest possible term.

In truth, Sergeant Anders said, he should not have been on duty the night of Dec. 18, 2004. It was his 11th wedding anniversary, and he was fighting off a case of stomach flu. But when a call came in to 911 reporting a quarrel and shots fired 10 miles east of Cloudcroft, he insisted on joining his partner and best friend, Deputy Robert Hedman.

The call took them to a cabin rented by Mr. Flippen, a 38-year-old career criminal whose "white pride" tattoos proclaimed his membership in the Aryan Brotherhood.

Shortly before the deputies pulled up, Mr. Flippen had shot to death his 30-year-old girlfriend, Deborah Rhoudes, then eight months pregnant, and rolled her body into a rug for loading into his waiting hatchback. Ms. Rhoudes's 3-year-old daughter, Victoria, was also there.

In the interview on March 9, which began at the cabin, now sealed off, Sergeant Anders said a shirtless Mr. Flippen, barring the two officers from entering, had explained the bloodstains as coming from a deer he had killed, and had then slammed the door. Sergeant Anders radioed for backup, while Deputy Hedman crept to the back of the house.

When he heard a shot from the back, Sergeant Anders rushed the cabin. But Mr. Flippen, who in the darkness had slipped through the front door unseen with Victoria, popped up from behind the hatchback and fired a shot from his .357 Magnum Peacemaker at the startled sergeant, who was just feet away.

"It felt like a Civil War cannon in my face," Sergeant Anders recalled. "I thought the left side of my head was gone." Actually the bullet had torn through his jacket, searing his left arm.

In 31 years as a law enforcement officer, he said, he had never fired his weapon on duty, but now he pulled the trigger of his Glock semiautomatic four times, striking Mr. Flippen in the forehead and left hand and arm.

At this point, the sergeant's recollections and the videotape diverge. Repeating what he had told investigators, he said he recalled having seen Mr. Flippen squirming on the ground with the Magnum nearby and having shot him again in the body. Afterward, he said, he moved the gun out of reach and handcuffed him.

But the videotape and its audio from the sergeant's body microphone tell a different story. After downing Mr. Flippen, Sergeant Anders handcuffs him as Victoria, whom Mr. Flippen was helping to raise, wails nearby, over and over: "Don't shoot my daddy!"

Sergeant Anders says: "I won't, honey. Back up, honey."

He tells Mr. Flippen, "You lay there, buddy," and rushes to the back of the house, shouting: "Bob! Bob!" He finds his partner's body — draped over a railing, a bullet in the head — and gasps, "Oh God, Bob!"

Then he returns to Mr. Flippen, shoos the little girl inside and fires a single shot into his chest.

The next police officer on the scene, Terry Flanigan, said he had found Sergeant Anders all but catatonic, propped up on his truck. He found Ms. Rhoudes's body "stuffed in a closetlike garbage," and the little girl, who had minor wounds from a bullet fragment, crying that her sister was still in the house. Officers later realized she had meant her dead mother's unborn baby.

When investigators played the videotape for Sergeant Anders three days after the shootings, he seemed stunned. He said he had no memory of shooting Mr. Flippen after handcuffing him.

"I remember being afraid," he said, according to transcripts of interviews with the investigators. "I remember being worried for Bob. I remember the little girl screaming and carrying, you know, carrying on, being upset. But, God, I don't remember that."

Later, when Sergeant Anders was indicted and turned himself in, the Otero County sheriff, John Blansett, a mammoth, easygoing man, wept.

Fifteen months after the shooting, the case still bruises Cloudcroft, not simply because of Deputy Hedman's death but also out of concern for Sergeant Anders and an appreciation for the hellish circumstances of that night.

By all accounts at the sentencing hearing, Sergeant Anders was more than a standout officer. He was a model citizen known for a warm demeanor and for using humor to defuse dangerous situations.

"Billy was one of the greatest and most compassionate cops we ever had," said Willie Walker, a former colleague with the San Antonio Police Department, where Sergeant Anders spent 23 years as a patrol officer and SWAT team commander before retiring as a captain and moving to Cloudcroft with his wife in 1998.

As Sergeant Anders made his farewell rounds through Cloudcroft on March 9, residents turned out to wish him well. A man in a cowboy hat clapped him on the shoulder, enfolded him in a crushing embrace and said, "Behind you, brother."

    An Officer Seen as a Hero Faces a Year Behind Bars, NYT, 17.3.2006, http://www.nytimes.com/2006/03/17/national/17deputy.html

 

 

 

 

 

27 Charged in International Online Child Pornography Ring

 

March 16, 2006
The New York Times
By GRETCHEN RUETHLING

 

CHICAGO, March 15 — Federal and international authorities have charged 27 people in nine states and three other countries in connection with an Internet child pornography ring that federal authorities say is one of the worst they have discovered.

Live video images of children being molested were transmitted over the Internet, the authorities said.

"The behavior in these chat rooms and the images many of these defendants sent around the world through peer-to-peer file-sharing programs and private instant messaging services are the worst imaginable forms of child pornography," Attorney General Alberto R. Gonzales said at a news conference in Chicago, where the indictments were announced Wednesday.

Federal and state charges, including the manufacture, possession and distribution of child pornography, have been filed against 13 people in Illinois, Tennessee, Michigan, Nevada, Florida, New York, Arizona, Hawaii and North Carolina. Charges have also been brought against 14 defendants in Canada, Australia and Britain.

"Some of the aspects of this case are truly horrifying," said Julie L. Myers, assistant secretary for United States Immigration and Customs Enforcement, at the news conference. "It's hard to find cases more heinous than those that involve the exploitation of children."

Mr. Gonzales said one of the victims was under 18 months old.

The defendants are accused of trading thousands of images of child pornography over at least the past year in a private Internet chat room called Kiddypics & Kiddyvids. Four of them are also accused of molesting seven children, who are now in protective custody, Mr. Gonzales said.

Ms. Myers said the case reflected three larger trends that are becoming more common in child pornography rings.

One is the increasing prevalence of "home-grown" pornographic images that are produced by predators themselves and include live streaming video images of children being molested, not just the circulation of repeated images, she said.

Another trend is the growing use of sophisticated security measures and of peer-to-peer networking, where participants can share files with one another on their computers rather than downloading them off a Web site, she said. The group used encryption and data destruction software to protect the files and screening measures to ensure only authorized participants could enter the chat room.

A third trend is the increasingly violent and graphic nature of the images involving the molesting of younger children, Ms. Myers said.

The international investigation began in May 2005 with the arrest of a participant in Edmonton, Alberta.

According to indictments returned Tuesday by a grand jury against four defendants in Chicago, participants shared files and used instant messaging to transmit images under screen names like Big_Daddy619, Lord Newbie and A_School_Teacher.

Many of the defendants had "ongoing access" to children, said Deputy Chief Tony Warr of the Toronto Police Service, which was involved in the investigation. He said investigators used software specially developed by Microsoft to track and identify hits on pornographic sites.

The chat room's primary host, Royal Raymond Weller of Clarksville, Tenn., was arrested last week. Mr. Weller, 49, a service repairman whose screen name was G.O.D., used a strict security system and would kick out participants if they used forbidden words like "incest" or "cam" in their messages, said Paul M. O'Brien, an assistant United States attorney in Nashville. Mr. Weller has not entered a plea.

All 27 defendants face child pornography charges in the United States or abroad or have already been prosecuted abroad. One defendant is a fugitive.

Theo Emery contributed reporting from Nashville for this article.

    27 Charged in International Online Child Pornography Ring, NYT, 16.3.2006, http://www.nytimes.com/2006/03/16/national/16porn.html

 

 

 

 

 

In Macabre Detail, Witness Tells of Murders for Mob by Detectives

 

March 16, 2006
The New York Times
By ALAN FEUER

 

The witness was a geriatric pot dealer who, along with smuggling drugs, had illicit fingers in everything from Burkina Faso diamonds to leisure suits.

The two detectives were career policemen who had risen in the ranks — one to an elite investigative team that tracked the mob — before retiring to a subdivision in the Las Vegas desert sands.

Nonetheless, testimony suggested that the unlikely group had formed a partnership, one in which for years gangland cash was swapped for blood. The witness said he served as the crucial link between the lawmen and their patron in the mob, a brutal Brooklyn mobster who, the witness said, employed them as his spies and as executors of his wrath.

Yesterday, the witness, Burton Kaplan, took the stand and in measured tones told jurors of a secret meeting in a Staten Island cemetery, a kidnapped mobster screaming in a trunk and a bullet-laced Mercedes, its driver dead, abandoned on the shoulder of the road. These were a few of the vivid details offered at the racketeering trial of the retired detectives, Louis J. Eppolito and Stephen Caracappa, in Federal District Court in Brooklyn. They stand accused of taking part in at least eight murders for the mob.

For more than six hours, Mr. Kaplan mesmerized the court with his account. He spoke of covert chats at highway rest stops on Long Island. He spoke of dogs gunned down outside gangster bars. He spoke of the bleeding mobster who fled his would-be killers to take refuge in a meat locker in a Brooklyn restaurant called the Golden Ox.

His most gripping testimony, however, was the account in which he told how Mr. Eppolito, 57, and Mr. Caracappa, 64, had taken part in the contract killings of Israel Greenwald, a Long Island diamond dealer, and Edward Lino, a Gambino family captain, and in the kidnapping of James Hydell, a would-be mob assassin. The latter two crimes, he said, were committed for the two men's patron, Anthony Casso, the Luchese family underboss, now in prison, a man whom Mr. Kaplan, his old friend, called a homicidal maniac.

Mr. Kaplan said he served as "the safety spot"— or liaison — between the gangster and the lawmen, ferrying Mr. Casso's orders to the two detectives in secret meetings at his Brooklyn home or at an isolated rest stop near Exit 52 of the Long Island Expressway. In exchange for their services, he said, he gave them cash: as much as $140,000, plus a retainer of $4,000 a month.

It was strange to hear such violent accounts from the 72-year-old Mr. Kaplan, a docile man who suffers from arthritis, poor circulation and high blood pressure. He is serving a 27-year prison term for trafficking in as much as 48,000 pounds of marijuana — and yet he said his only personal experience with drugs was "two puffs" on a joint with a friend in 1981.

In 1986, he said, he hired the two detectives to murder Mr. Greenwald, having learned of them through Mr. Eppolito's cousin Frank Santora Jr., whom he had met in prison. The two detectives stopped their victim on the highway, took him to a parking garage, bound his hands and stuffed a bag over his head, Mr. Kaplan said. Then, the witness added, Mr. Santora put a pair of bullets in his head.

What drew Mr. Casso to the lawmen was a taste for retribution. That fall, a hit team tried to kill him in his Lincoln as he sat outside the Golden Ox on Avenue N.

The gangster survived — but craved revenge.

"I told Casso that my friend Frankie's cousin worked in that precinct and he was a good guy and could probably help us," Mr. Kaplan said. And within weeks, he added, Mr. Casso had a manila envelope of police reports with the names and addresses of almost everyone involved in the unsuccessful hit.

"I opened it and looked inside," Mr. Kaplan said, "and there was a picture of Jimmy Hydell."

Mr. Hydell was a 28-year-old man who lived with his mother in her house on Staten Island, but the two detectives found him in a coin laundry in Brooklyn, Mr. Kaplan said. They put him in their car, he said, and took him to the same garage where Mr. Greenwald had been buried under seven feet of concrete — and then to a Toys 'R' Us on Flatbush Avenue, where Mr. Casso was waiting in the parking lot.

The gangster took the car, said Mr. Kaplan, with his victim — subdued by a beating — stuffed in the trunk. He then proceeded to interrogate and torture James Hydell until he revealed the names of the other would-be killers — one of whom was Edward Lino, Mr. Kaplan said.

Before he died at the hands of Mr. Casso, Mr. Hydell had asked one thing: He begged for his body to be dumped in the street. His mother, Mr. Kaplan said, could collect his insurance policy only if she had the young man's corpse. Mr. Casso, he added, was not so kind as to grant the man's request.

As for Mr. Lino, he was a dapper and respected legend in the mob — a tough Gambino family soldier who had played a role in the killing of Paul Castellano, the family's don, in 1985. But Mr. Casso put a contract on his head — and Mr. Eppolito and Mr. Caracappa took it, Mr. Kaplan said.

In November 1990, they followed his Mercedes in an unmarked car on the Belt Parkway, flipped on their flashing lights and pulled him over to the shoulder of the road, the witness said. He told the jury that as Mr. Lino bent down in his seat, Mr. Caracappa shot him in the head.

A few days later, Mr. Kaplan had eye surgery at the New York Eye and Ear Infirmary on Second Avenue — and at 10 one night, he said, Mr. Eppolito slipped into his room.

"I got good news," he recalled the detective saying. "We got Eddie Lino." Mr. Eppolito filled him in on all the details, and yet, he said, a question still remained.

"I said, 'How come Steve shot him?' And he said, 'Steve's a much better shot.' "

    In Macabre Detail, Witness Tells of Murders for Mob by Detectives, 16.3.2006, http://www.nytimes.com/2006/03/16/nyregion/16cops.html

 

 

 

 

 

Trial Begins for Members of Aryan Prison Gang

 

March 15, 2006
The New York Times
By JOHN M. BRODER

 

SANTA ANA, Calif., March 14 — Federal prosecutors opened a sweeping murder and racketeering case on Tuesday aimed at dismantling what they called one of the nation's most vicious prison gangs, the Aryan Brotherhood.

Michael W. Emmick, the assistant United States attorney, outlined in his opening statement a gruesome series of murders and assaults designed, he said, by four white supremacist gang members to terrorize and control the inmate population at some of the most secure state and federal prisons in the country.

One defendant, Mr. Emmick said, nearly decapitated one of his victims, who was singled out as having cheated another brotherhood member in a drug deal. He said the gang also ordered a hit on an inmate who attacked the mob boss John J. Gotti in an Illinois federal prison, in an effort to curry favor with the Gotti organization.

"The members of the Aryan Brotherhood are particularly violent, disciplined, fearless, and committed to controlling and dominating the prison population through intimidation and murder," Mr. Emmick said. "It is a full-blown criminal organization both inside and outside the prison system."

He described the gang's code as "blood in, blood out," meaning a prospective member had to kill to earn his stripes, and the only way to leave the gang was through death. Defense lawyers said that the government's case was built on lies from other convicts and apostate Aryan Brotherhood members who had become informers in exchange for lighter sentences, protection and other favors.

"They're all snitches and rats," said H. Dean Steward, the court-appointed lawyer for Barry B. Mills, a founder of the brotherhood. "Every single one of them is getting something for their testimony."

Mr. Steward acknowledged that the four defendants were members of the brotherhood, but said it was a protective society formed by white inmates in prisons where they were a minority beset by well-organized Mexican and African-American gangs.

"It's hard to survive in the federal penitentiary system if you're not part of a group," Mr. Steward said. "The primary purpose of this group was self-protection."

The trial in the federal courthouse here is the first in a series growing out of a 2002 indictment of 40 members of the gang, which was formed in the mid-1960's by white inmates in the racially divided California prison system.

Prosecutors said the brotherhood had since adopted the tactics of organized crime families as it expanded to several other states and to a half-dozen federal penitentiaries, particularly the most secure "supermax" prisons at Florence, Colo., and Marion, Ill.

On trial now are four senior members of the brotherhood, including two of its early leaders, Mr. Mills, 57, known as "The Baron," and Tyler D. Bingham, 58, who goes by "T.D." or "The Hulk." Also on trial are Edgar W. Hevle, 54, known as "The Snail," and Christopher O. Gibson, 46.

The four are accused of ordering or participating in 15 murders or attempted murders over the past 25 years. They are being charged under the federal Racketeer Influenced and Corrupt Organization laws, which have been used to prosecute Mafia families and other criminal groups. Federal prosecutors call the Aryan Brotherhood case, the result of four years of investigation by numerous agencies, the biggest federal death penalty case ever brought.

The defendants sat in two tiered rows with their legs shackled to the floor, watched over by a squadron of federal marshals. All wore the long walrus-style mustaches that are a trademark of their association. Their tattoos, which prosecutors said included swastikas, Nazi SS lightning bolts, shamrocks and the "666" mark associated with Satan, were not visible under their neat, open-collared shirts.

All are already serving long prison terms for violent crimes. Mr. Mills and Mr. Bingham face the death penalty on the current charges.

Nineteen of those indicted pleaded guilty, and several of them will testify at this trial. Separate trials are scheduled this year for other groups of defendants. One of the 40 original defendants committed suicide in jail.

Mr. Emmick, the prosecutor who delivered the government's opening statement, said the Aryan Brotherhood was a sophisticated criminal group with its own secret language and signs, an elaborate communications network and a strictly enforced code of conduct with death as the ultimate sanction.

He said members communicated within prisons and across the country through couriers, family members, notes concealed in broom handles and peanut shells, and disappearing ink made from grapefruit juice or urine.

Their weapon of choice, Mr. Emmick said, was the handmade "shank," fashioned from a toothbrush handle or scrap metal scavenged from the prison yard. Strangulation by garrote was a second choice for dispatching their enemies, he said.

Mr. Steward, the defense lawyer, dismissed the government's case as a fantasy fed by informants. He said that at their height, the Aryan Brotherhood numbered no more than 100 "made" members and a few hundred more associates, and that it would be impossible for such a small group to control the federal penal population of 190,000.

He said the purported "blood in, blood out" oath was "a figment of the imagination of the federal government." Mr. Steward also dismissed the government's account of the brotherhood agreeing to carry out a hit for Mr. Gotti. He said that one of the government's star witnesses, a former Aryan Brotherhood member named Kevin Roach, "made up the whole thing."

    Trial Begins for Members of Aryan Prison Gang, NYT, 15.3.2006, http://www.nytimes.com/2006/03/15/national/15aryan.html

 

 

 

 

 

Judge Lets U.S. Have Google Info

 

March 15, 2006
The New York Times
By KATIE HAFNER

 

SAN JOSE, Calif., March 14 — After the Justice Department drastically reduced its request for information from Google, a federal judge said on Tuesday that he intended to approve at least part of that request.

The government first subpoenaed Web data from Google last August, as part of its defense of an online pornography law.

At a hearing in Federal District Court here, Judge James Ware said that in supporting the government's more limited request, he would nonetheless pay attention to Google's concerns about its trade secrets and the privacy of its users.

The government is now requesting a sample of 50,000 Web site addresses in Google's index instead of a million, which it was demanding until recently. And it is asking for just 5,000 search queries, compared with an earlier demand for an entire week of queries, which could amount to billions of search terms.

A Justice Department lawyer said at the hearing that the government would review just 10,000 Web sites and 1,000 search queries out of those turned over.

It intends to use the data in a study to measure the effectiveness of software that filters out pornographic Web sites. The government says it is not seeking information that would "personally identify" individuals.

"It is my intent to grant some relief to the government," Judge Ware said, "given the narrowing that has taken place with the request and its willingness to compensate Google for whatever burden that imposes."

He said, however, that he was well aware that the request for individual search terms from Google had raised privacy concerns. He appeared to be less troubled about the release of Web site addresses.

He said he was particularly concerned about perceptions by the public that Web searches could be subject to government scrutiny, "so I'll pay particular attention to that part of it." The judge said that he would issue a full decision shortly, but did not give a date.

Google stock closed at $351.16, up $14.10, or 4.2 percent.

Three of Google's competitors in Internet search technology — the America Online unit of Time Warner, Yahoo and MSN, Microsoft's online service — have complied with subpoenas in the case. None of those companies have indicated how much data was turned over to the government.

Albert Gidari, a lawyer representing Google at the hearing, said in an interview afterward that he had been surprised by the large reduction in the number of Web site addresses, or U.R.L.'s, and search queries the government was requesting.

The revised request appeared in a footnote to a declaration filed with the court on Feb. 24 by Philip B. Stark, a statistician the Justice Department had hired to study search engine data.

The reduced data request had not come up in direct discussions between Google and the Justice Department. But it appears that Google's well-publicized resistance forced the department to modify its position.

The new request substantially mitigates Google's concerns over trade secrets, Mr. Gidari said, adding that "99.99 percent of Google is unexposed, and this teeny sliver will tell them nothing."

"This would have been a very different case if the government walked in the door and said, 'We need 50,000 U.R.L.'s and a thousand searches,' " Mr. Gidari said. "It's doubtful we would have been in court. We got to where we wanted."

The Web data study is part of a continuing lawsuit in which the government is defending the Child Online Protection Act, a 1998 law under which it is a crime to make "material that is harmful to minors" commercially available on the Web. The lawsuit was brought by the American Civil Liberties Union, among others.

The act has faced repeated legal challenges. Opponents contend that filtering software could protect minors effectively enough to make the law unnecessary.

Two years ago, the Supreme Court upheld an injunction blocking the law's enforcement and returned the case to a district court for further examination of Internet-filtering technology that might be another way to achieve the law's aims. At a trial scheduled to begin in October, the government will try to prove that filters are ineffective.

"Given the slight amount of information now sought by the government, Google's burden arguments seem less persuasive than they might be," said Susan P. Crawford, a professor at the Cardozo School of Law at Yeshiva University.

At one point in the hearing, Judge Ware asked Joel McElvain, the lawyer for the government, why the Justice Department needed the Google data when it already had information from three other companies. Mr. McElvain said that although the government had enough information to do its study, it "would be substantially improved if we had the data from Google" because Google commands nearly half the search market.

Judge Ware appeared to sympathize with Google's concern that it could become entangled in the underlying lawsuit over the Child Online Protection Act, although it is not a party to the suit.

The judge also sought specific assurance from Mr. McElvain that the government would not use information contained in search queries for other investigations.

If a search query appeared to suggest a connection between a particular person and Osama bin Laden, the judge asked him, "are you telling me the government would ignore that and not use it?" Mr. McElvain assured him that the government would not.

Mr. McElvain said at the hearing that the government would pay Google for the effort needed to put the information together.

"We're very encouraged," said Nicole Wong, associate general counsel at Google. "At a minimum we have come a long way from the government's initial subpoena. If it had started this way, it would have been a very different discussion."

Still, Ms. Crawford said that even the relatively small amount of data demanded posed a troubling prospect. "The government has been able to commandeer private parties to assist it in its research, and the next request may be far broader," she said.

Aden J. Fine, a lawyer for the American Civil Liberties Union, was more optimistic.

"The mere fact that Google has stood up to the government is a positive thing," Mr. Fine said. "The government cannot simply demand that third parties give information without providing a sufficient justification for why they need it, and that's the theme that will hopefully resonate from this hearing, whichever way the judge rules."

    Judge Lets U.S. Have Google Info, NYT, 15.3.2006, http://www.nytimes.com/2006/03/15/technology/15google.html

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Zacarias Moussaoui is shown in this undated file photo.
Prosecutors pondered on Wednesday whether to abandon
their quest for the death penalty in the government's only case
connected to the September 11 hijackings, after a federal judge banned crucial testimony.

REUTERS/Sherburne County Sheriffs Office/Handout

Judge asked to reconsider Moussaoui ruling        R        15.3.2006
http://today.reuters.com/News/newsArticle.aspx?type=topNews&storyID=
2006-03-16T005643Z_01_N15406868_RTRUKOC_0_US-SECURITY-MOUSSAOUI.xml

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Judge asked to reconsider Moussaoui ruling

 

Wed Mar 15, 2006 7:57 PM ET
Reuters
By Deborah Charles

 

WASHINGTON (Reuters) - The U.S. government asked a federal judge on Wednesday to reconsider her decision to ban crucial aviation-related testimony and evidence in the sentencing trial for September 11 conspirator Zacarias Moussaoui.

On Tuesday, U.S. District Judge Leonie Brinkema delivered a sharp blow to the government's only case related to the deadly airliner hijackings that killed 3,000 people when she banned the testimony and evidence after a government lawyer improperly communicated with witnesses.

Moussaoui, an al Qaeda member who has pleaded guilty to conspiracy in connection with the September 11 attacks, is on trial to see if he will be executed for his crimes.

In a court filing, federal prosecutors said Brinkema's ruling -- which affects half the government's case against Moussaoui -- was "disproportionate" to the problem caused when Transportation Security Administration lawyer Carla Martin violated a court order against communicating with trial witnesses.

"The sanction is simply too severe, making it impossible for us to present our theory of the case to the jury," the prosecutors wrote.

Brinkema threw out the aviation evidence and testimony after discovering Martin had e-mailed transcripts of part of the trial and attempted to coach aviation witnesses who were due to testify for both the defense and the prosecution.

Prosecutors called Martin's actions "misguided conduct" and said she did not appear to have been taken very seriously by any of the witnesses. The witnesses said on Tuesday their testimony had not been affected by Martin.

After Brinkema ruled on Tuesday, prosecutors requested a delay in the sentencing trial until Monday to decide if they would appeal.

Prosecutors had said they were considering dropping the death sentence case against Moussaoui if Brinkema's ruling held.

"We don't know whether it is worth us proceeding at all, candidly ... and that's why we need to assess it, because without some relief, frankly I think that there's no point for us to go forward," prosecutor Robert Spencer said in a conference call on Tuesday evening with Brinkema and a defense lawyer. The call was transcribed and released as part of the court record.

Brinkema agreed to delay the trial until Monday.

The defense had asked Brinkema to dismiss the death penalty option for Moussaoui since Martin had tainted the witnesses.

Aviation-related testimony was expected to deal with how much information the Federal Aviation Administration had about possible threats to airlines and also discuss pre-September 11 security measures.

Prosecutors said the aviation evidence was crucial.

"The aviation evidence ... is one of the two essential and interconnected components to our case," they wrote.

"As we previewed in our opening statement, had the defendant told the truth, the FBI could have gathered information about the hijackers ... and given it to the FAA, which could have used that information to keep the hijackers off airplanes on September 11," they added.

    Judge asked to reconsider Moussaoui ruling, R, 15.3.2006, http://today.reuters.com/News/newsArticle.aspx?type=topNews&storyID=2006-03-16T005643Z_01_N15406868_RTRUKOC_0_US-SECURITY-MOUSSAOUI.xml

 

 

 

 

 

Lawyer Thrust Into Spotlight After Misstep in Terror Case

 

March 15, 2006
The New York Times
By STEPHEN LABATON and MATTHEW L. WALD

 

WASHINGTON, March 14 — In a city of lawyers, Carla J. Martin has become the most talked-about lawyer in town.

Ms. Martin, an obscure official in the counsel's office at the Transportation Security Administration, now appears to bear responsibility for undercutting the government's long-running effort to execute the only man tried in an American courtroom for involvement in the Sept. 11 attacks.

Known among her peers as an aggressive, largely behind-the-scenes courtroom strategist, she is said by the judge in the case to have committed a potentially devastating blunder of the sort that law students are routinely warned about: coaching witnesses.

Dealing a major setback to the government's prosecution of Zacarias Moussaoui, Judge Leonie M. Brinkema ruled on Tuesday that because of three significant instances of misbehavior by government lawyers during the trial, most notably the missteps by Ms. Martin, she was barring the prosecutors from using any testimony or evidence from a handful of government aviation officials. [Page A24.]

Ms. Martin has declined to explain her actions in court or to reporters, and Judge Brinkema said Ms. Martin's lawyer expected his client to invoke her right against self-incrimination. But e-mail messages made public in the Moussaoui case this week, along with accounts from colleagues and supervisors, paint a picture of a lawyer who was often well regarded but also had a reputation for sometimes pushing too hard.

Ms. Martin, 51, is a former flight attendant at World Airways, where she often flew between the United States and Germany because she spoke German. She began working at the Federal Aviation Administration before she completed law school at American University's Washington College of Law in 1989.

Ms. Martin has almost no experience in criminal prosecutions because most of her work has involved defending the government in civil lawsuits. She moved to the Transportation Security Administration when it was created in 2002.

Some lawyers who have worked with Ms. Martin in other cases said they were stunned by the events in the Moussaoui case.

"She's articulate and forceful and aggressive and smart," said Thomas J. Whalen, an aviation lawyer at Condon & Forsyth who has worked on her side in some cases and against her in others. "I'm really surprised about what's happened. It's more than being tough and aggressive."

In the Moussaoui case, her communications with witnesses, and new evidence that surfaced Tuesday that she told some witnesses not to cooperate with defense lawyers, puts the prosecution in the position of having to investigate and sharply criticize a government lawyer who has worked on the case.

In a different case, in which Ms. Martin tried to keep vital evidence out of the hands of a lawyer on the ground that he had been associated with a civil rights group, she was accused by the other side of overstepping court boundaries and running roughshod over standard courtroom procedure in a zeal to protect national security.

Ms. Martin's mother, Jean Martin Lay, said she spoke to her daughter Monday night.

"She was so devastated," Ms. Lay said in a telephone interview from her home in Knoxville, Tenn. "She said she just didn't hear the judge."

Ms. Lay said her daughter was in the courtroom when Judge Brinkema issued the order on handling witnesses, but was probably concentrating on something else "instead of being mindful."

The judge's written order was issued last month, and Ms. Martin's contact with the witnesses occurred last week, according to e-mail messages made public by the court. The order was meant to sequester witnesses so their testimony would not be corrupted. It barred the witnesses from receiving the testimony of other witnesses or receiving any news accounts of the trial. The e-mail messages and the recent testimony show that Ms. Martin provided testimony and advice to seven witnesses.

Ms. Martin's mother said her impression was that her daughter found her work at the Transportation Security Administration "not the most satisfying or rewarding type job" because it did not involve any big cases. Her current salary, according to a government employee database, is about $120,000 a year.

Others, some speaking for attribution and others not, said they could see why Ms. Martin would find herself in trouble.

Claudio Manno, who at the time of the Sept. 11 attack was the assistant administrator for security at the F.A.A., testified Tuesday that Ms. Martin had taken up too much time second-guessing him and bombarding him with e-mail messages and requests.

"She tended to go off target and wasted our time," Mr. Manno said. "We didn't think it was pertinent."

A. P. Pishevar, a Maryland lawyer who tangled with Ms. Martin in another case, said her conduct in that case "sticks out like a sore thumb."

According to court records, she led an effort on behalf of the government to try to intervene in a defamation, discrimination and malicious prosecution lawsuit brought against Lufthansa by one of Mr. Pishevar's clients. The client was Kamyar Kalantar-Zadeh, an Iranian-born doctor, now an American citizen and associate professor of medicine at U.C.L.A. who was arrested and spent a night in jail after complaining about discriminatory treatment by Lufthansa officials at Dulles International Airport.

Lufthansa tried to have the case dismissed by filing a secret motion that said it had detained Mr. Kalantar to follow a secret F.A.A. security directive. According to court records, Ms. Martin urged Lufthansa to withhold the summary judgment motion and the security directive from both Mr. Kalantar and his lawyer, Mr. Pishevar.

Court records show that Ms. Martin said to one Lufthansa lawyer that ordinarily much of the evidence would be available to lawyers for a plaintiff. But she said the government sought to keep all the material from Mr. Pishevar, an American citizen and member of the bar in Washington, Maryland and the United States Supreme Court, because he had worked for an organization that fights discrimination in the United States against Iranians.

Judge Henry H. Kennedy Jr. of the Federal District Court in Washington ultimately denied the effort to dismiss the case and directed the government to turn over the material, which remains under seal, Mr. Pishevar said. The case has not yet been set for trial.

Mr. Pishevar said he still felt numb from his experience with Ms. Martin, who he said was "from behind the scenes, trying to pull many of the strings."

Told about the latest developments in the Moussaoui case, Mr. Pishevar paused, then said, "Res ipsa loquitur," a Latin legal term meaning, "The thing speaks for itself."

Others describe a more positive experience with Ms. Martin.

One of her earliest assignments was to monitor the trial brought by the survivors of those who died when Pan Am Flight 103 exploded over Lockerbie, Scotland. Her main job, according to a news account at the time and a lawyer involved in the case, was to get the judge to close the courtroom any time sensitive information was to come out.

James P. Kreindler, an aviation lawyer representing the survivors, said he could not account for what had happened in the Moussaoui trial. "When one is caught up in a massive bureaucracy, you may lose part of your perspective," Mr. Kreindler said. "She may have lost a proper perspective on the proper role for any attorney involved in either the criminal or the civil justice system."

"Carla is in my experience certainly not a bad person," he added, "and this is a very, very unfortunate thing to see happen."

    Lawyer Thrust Into Spotlight After Misstep in Terror Case, NYT, 15.3.2006, http://www.nytimes.com/2006/03/15/national/15lawyer.html?hp&ex=1142398800&en=6324db0be59a993a&ei=5094&partner=homepage

 

 

 

 

 

Judge Penalizes Moussaoui Prosecutors by Barring Major Witnesses

 

March 15, 2006
The New York Times
By NEIL A. LEWIS

 

WASHINGTON, March 14 — A federal district judge dealt a serious, perhaps crippling, blow on Tuesday to the government's effort to execute Zacarias Moussaoui for the deaths that occurred in the terrorist attacks of Sept. 11, 2001.

The judge, Leonie M. Brinkema, ruled that because of three major instances of misbehavior by government lawyers in the trial, she was barring prosecutors from using any testimony or evidence from a handful of government aviation officials.

The officials were to provide a pillar of the Justice Department's argument as to why Mr. Moussaoui deserved to die: that had he told investigators when he was arrested three weeks before the attacks on immigration violations about Al Qaeda's plans to fly planes into buildings, the Federal Aviation Administration would have put in place security measures that could have prevented the attacks.

Prosecutors seemed dispirited by the ruling and indicated that they might seek an immediate review before a federal circuit court in Richmond, Va. Judge Brinkema granted their request to postpone the trial until at least Monday while they decide what to do.

Judge Brinkema said the prosecution of Mr. Moussaoui was "too riddled with errors" to proceed without some sanction against the government.

She directed her wrath most strongly against Carla J. Martin, a lawyer for the Transportation Security Administration, who was assisting prosecutors in arranging for the testimony of aviation security officials. When Judge Brinkema learned on Monday that Ms. Martin had coached seven witnesses on how to testify and respond during cross-examination, she called it the most striking example of witness tampering by a lawyer she had experienced in her years on the bench.

On Tuesday, Judge Brinkema's anger grew as she learned of another problem apparently created by Ms. Martin. During an extraordinary special hearing in the middle of the trial to determine if the witnesses had been "tainted" by the coaching, Judge Brinkema said it became apparent that Ms. Martin had violated Mr. Moussaoui's constitutional rights to a fair trial by telling prosecutors that four government officials had refused requests by defense lawyers to speak with them.

"That was a bald-faced lie," Judge Brinkema declared after some of the witnesses testified that they had not said that to Ms. Martin.

The third misstep cited by the judge was a question by a prosecutor in front of the jury last Thursday that she ruled improper. But she said the question, by David J. Novak, a prosecutor, was not significant enough by itself to order any sanctions on the government.

"A trial, particularly a death penalty case, simply cannot go forward with this many errors," Judge Brinkema said.

Ms. Martin appeared briefly in court Tuesday after being hurriedly summoned the evening before by the judge. Ms. Martin, dressed all in black, looked as stricken as someone at a funeral as she struggled to maintain her composure.

After Judge Brinkema told her she could face criminal charges, Ms. Martin said she did not want to be questioned without a lawyer. Judge Brinkema said later that she had just concluded a telephone call with Roscoe Brown, a lawyer who said he represented Ms. Martin, and that he had advised her to invoke her constitutional rights against possible self-incrimination and not to testify.

In fashioning a remedy for the violations she cited, the judge stopped short of granting the request of Mr. Moussaoui's lawyers that she rule out the death penalty.

Because Mr. Moussaoui has pleaded guilty to conspiracy charges in connection with the Sept. 11 attacks, the sole question before the jury is whether he is to be executed or spend the rest of his life in prison.

Prosecutors had tried to salvage the case by arguing that Ms. Martin was not really part of the Justice Department team that had worked on the case. "We've worked hard on this case for four and a half years," Robert J. Spencer, the chief prosecutor argued. But Judge Brinkema said that Ms. Martin was "an attorney for the United States and you all represent the United States."

She added, "It's not the Justice Department against Mr. Moussaoui, it's the United States" that is trying to have him executed.

David Raskin, a prosecutor, argued that Ms. Martin's coaching did not affect the witnesses' testimony because they were to talk about aviation security procedures that were fact-based and indisputable. "As egregious as it was," Mr. Raskin said of the coaching, "it simply did not affect those witnesses."

But Judge Brinkema said that even after hearing from six of the government witnesses that they were unaffected by Ms. Martin's suggestions, she still could not be sure that the testimony was untainted.

The order Ms. Martin violated, issued by the judge to prevent potential witnesses from learning of previous testimony, was not unusual. "It's pretty basic," said Peter Margulies, a visiting law professor at St. John's Law School in Queens, N.Y. "Lawyers know you've got to sequester witnesses."

If the elimination of the aviation security witnesses is upheld, prosecutors will have to rely on testimony from investigators about how they may have foiled the plot. Prosecutors described the logic of their case as showing that if Mr. Moussaoui had told the truth, the government would have taken both offensive steps, like having the Federal Bureau of Investigation intensify its investigation of Al Qaeda, and defensive steps, like having the aviation agency increase airport security.

Ms. Martin coached potential witnesses in e-mail messages and personal conversations. In most of the e-mail messages, Ms. Martin included the transcript of the opening trial statements along with her criticism that prosecutors had, in her view, "created a credibility gap that the defense can drive a truck through."

She also included portions of a transcript of the testimony of an F.B.I. agent, who first said last Tuesday that before Sept. 11 the bureau was not looking at the possibility that terrorists might use airplanes as weapons. But the agent, Michael Anticev, acknowledged under cross-examination that the bureau had indeed known of earlier Qaeda plans to fly planes into the C.I.A. headquarters in Langley, Va., and the Eiffel Tower. Ms. Martin suggested ways that the witnesses not repeat that mistake.

    Judge Penalizes Moussaoui Prosecutors by Barring Major Witnesses, NYT, 15.3.2006, http://www.nytimes.com/2006/03/15/national/15moussaoui.html

 

 

 

 

 

Judge Raises Possibility of Mistrial in Moussaoui Sentencing

 

March 13, 2006
The New York Times
By NEIL A. LEWIS

 

ALEXANDRIA, Va., March 13 — The sentencing trial of Zacarias Moussaoui teetered on the brink of a mistrial today, as the judge in the case angrily said she might spare him the death penalty following the disclosure that a government lawyer had improperly coached some witnesses.

"In all my years on the bench, I've never seen a more egregious violation of the rule about witnesses," Judge Leonie M. Brinkema said.

The judge recessed the trial until Wednesday. She said she would rule then on a request from Mr. Moussaoui's court-appointed lawyers that she end the sentencing trial, now in its second week, and order that he be imprisoned for life instead of executed, as the government has urged.

She also scheduled a hearing for Tuesday to look into the improper sharing of information with seven witnesses — some of whom were scheduled to testify for the prosecution and some for the defense. The lawyer involved in the incident was identified by a federal official as Carla J. Martin of the Transportation Security Administration. Judge Brinkema had earlier ordered that people scheduled to testify not be given access to transcripts by prior witnesses, a common order in such cases.

But Ms. Martin gave the witnesses transcripts of opening statements and of testimony last week by an F.B.I. agent, Michael Anticev.

Two of the witnesses scheduled to appear for the government were identified as Lynne A. Osmus and Claudio Manno of the Federal Aviation Administration.

The testimony of aviation officials could be crucial because of the unusual nature of the hearing.

Mr. Moussaoui, a 37-year-old Frenchman of Moroccan heritage, has already pleaded guilty to six felony counts, three of which expose him to the death penalty. The only question before the jury is whether he should be executed or sentenced to life in prison.

When the attacks of Sept. 11, 2001, were carried out, Mr. Moussaoui was in jail, having been arrested three weeks earlier in Minnesota, where he was taking flying lessons. The government has argued that he deserves to be executed because he lied to investigators after his arrest about his knowledge of Al Qaeda plans to fly airplanes into buildings.

The aviation officials were expected to testify as to what steps might have been taken if Mr. Moussaoui had told the truth.

At the time of the Sept. 11 attacks, Ms. Osmus was the deputy associate administrator of the agency's Civil Aviation Security Program, and Mr. Manno was the director of the Office of Intelligence in that office. After the attacks, Congress transferred the job of aviation security to a new agency, the Transportation Security Administration, but Ms. Osmus and Mr. Manno are still with the F.A.A.

Edward J. MacMahon, Mr. Moussaoui's chief defense lawyer, said Ms. Martin had been engaged in "an obvious effort to shape the testimony of the witnesses."

David Novak, a prosecutor, agreed that the disclosures had been wrong. But he argued that the case should go forward and that any problems caused by Ms. Martin's actions could be remedied during cross-examination by Mr. Moussaoui's lawyers.

It was not clear why Ms. Martin had shared materials with defense witnesses, who are expected to testify about earlier warnings about terrorist threats to hijack airplanes. Judge Brinkema said that she would question all the witnesses for both sides on Tuesday before making a decision on the motion for a mistrial.

Judge Brinkema, who said she had been informed of the coaching by the prosecutors, recalled that on Thursday, she had denied a defense motion for a mistrial because of a separate mistake, although she had admonished prosecutors at that time.

"This is the second significant error of the government affecting the constitutional rights of this defendant," she said. "More importantly, it affects the integrity of the criminal justice system in the United States."

David Novak, a prosecutor, argued that the case should go forward and that any problems caused by Ms. Martin's actions could be remedied during cross-examination by Mr. Moussaoui's lawyers.

Last week, the jury heard testimony from the F.B.I. agent who arrested Mr. Moussaoui on immigration charges three weeks before the Sept. 11 attacks.

The agent, Harry Samit, testified that he was convinced that Mr. Moussaoui was an Islamic extremist who knew about some terrorist plan involving airplane hijackings, but that Mr. Moussaoui's lies sent him off on "wild goose chases" up to the day of the attacks.

Mr. Samit testified that he had tried to obtain warrants to search Mr. Moussaoui's belongings but had been hampered because Mr. Moussaoui had concealed that he was a member of Al Qaeda and that the group was plotting to crash planes into buildings.

If Mr. Moussaoui had not concealed that information, Mr. Samit said, that would have led to an intense investigation, but he did not flatly assert that it would have prevented the attacks.

In questioning Mr. Samit, Mr. Novak asked loudly whether Mr. Moussaoui had reached out from the local jail to tell him what he knew about Al Qaeda in the immediate days before the attack. By that time, Mr. Moussaoui had said he would not speak to investigators without a lawyer.

Judge Brinkema, who had warned prosecutors not to go too far in talking of Mr. Moussaoui's responsibility to confess fully, ruled the question improper, but said it did not rise to a mistrial.

Matthew L. Wald contributed reporting from Washington for this article, and John O'Neil from New York.

    Judge Raises Possibility of Mistrial in Moussaoui Sentencing, NYT, 13.3.2006, http://www.nytimes.com/2006/03/13/national/13cnd-moussaoui.html?hp&ex=1142312400&en=7f7190ca88245644&ei=5094&partner=homepage

 

 

 

 

 

Split Verdict Ends Trial of Ex-Mayor of Atlanta

 

March 11, 2006
The New York Times
By BRENDA GOODMAN

 

ATLANTA, March 10 — After a five-year investigation that culminated in a two-month-long trial, it took the jury hearing the federal corruption case against former Mayor William C. Campbell only two days to find him not guilty of perhaps the most serious charges against him: racketeering and bribery.

But Mr. Campbell was found guilty of three counts of tax evasion, and for that he could serve up to nine years in jail and pay up to $300,000 in fines. If he had been convicted of all seven counts against him, he could have spent more than 50 years in prison.

The verdict was a bittersweet ending for both sides. Prosecutors had hoped to end their seven-year crusade against corruption in City Hall by convicting its top official. It was an investigation that ultimately convicted 10 people who were contractors and city officials, many of them close associates of Mr. Campbell.

"Obviously I have great regrets that the jury found me guilty of anything," Mr. Campbell said after the verdict. "But there's no doubt I've been vindicated with regard to any allegations of corruption."

He said sloppy recordkeeping, rather than any desire to hide ill-gotten gains, was behind underreported income on his tax returns.

Mr. Campbell was smiling as he stood beside his wife, Sharon, outside the courthouse. As he answered reporters' questions, people drove by honking and cheering.

"It was a fair trial," Mr. Campbell added. "The judge was fair."

W. Fred Orr II, one of the defense lawyers, said he was disappointed with the outcome of the trial.

"We knew there were some technical violations of the tax code," Mr. Orr said. "They're serious, but we're going to be O.K."

Sally Q. Yates, first assistant United States attorney in Atlanta and lead counsel for the prosecution, echoed Mr. Orr's sentiments.

"I'm personally somewhat disappointed," Ms. Yates said. "I think it would be a little foolish for me to stand out here and try to pretend otherwise. I'm disappointed the jury didn't feel they had enough evidence to find him guilty of the RICO count," she said, referring to the Racketeer Influenced Corrupt Organization Act, which provides for extended punishment for those found guilty of running criminal enterprises.

In a prepared statement, David E. Nahmias, United States attorney for the northern district of Georgia, declared victory, saying, "The jury's verdict today confirms that Mayor Bill Campbell was also a criminal."

Mr. Nahmias also said he fully expected Mr. Campbell to go to prison on the tax evasion convictions.

The 43-page indictment against Mr. Campbell detailed bribes and illegal campaign contributions in excess of $250,000. During the trial, prosecutors painted him as a high-stakes gambler who took frequent trips to places like Las Vegas and Reno, Nev., and Tunica, Miss., often in the company of his mistresses.

The expenses of these lavish vacations, the prosecutors said, were always paid with cash that Mr. Campbell got from the city contractors he used as "human A.T.M.'s." They said he raised money to retire campaign debt after he was elected to a second term, but instead of using the money to pay off his creditors, he used the account as a slush fund for his personal expenses. Prosecutors also sought to prove his extensive use of straw donors to launder illegal campaign contributions.

As federal marshals escorted members of the jury to their cars, one juror said in answer to shouted questions, "It's been a long seven weeks."

    Split Verdict Ends Trial of Ex-Mayor of Atlanta, NYT, 11.3.2006, http://www.nytimes.com/2006/03/11/national/11campbell.html

 

 

 

 

 

Judge Tries Compromise on Briefs Libby Is Seeking

 

March 11, 2006
The New York Times
By NEIL A. LEWIS

 

WASHINGTON, March 10 — A federal judge ruled on Friday that I. Lewis Libby Jr. was entitled to review a limited amount of information from highly classified intelligence documents in order to defend himself against charges that he lied about his role in disclosing the identity of a C.I.A. operative.

Confronted with a legal issue that has the potential to sabotage the prosecution of Mr. Libby, the judge, Reggie B. Walton, sought a compromise to allow the case to go forward.

To accommodate the government's reluctance to turn over sensitive documents as well as Mr. Libby's claim that without them he would be unfairly hampered in mounting a defense, Judge Walton told prosecutors to turn over a listing of the "general topics of the matters" involving intelligence that were given to Mr. Libby when he was chief of staff to Vice President Dick Cheney.

The judge ruled that the documents could be something like the tables of contents of the President's Daily Brief, and that Mr. Libby need not be given those highly classified documents as he had sought.

Moreover, Judge Walton said the government should turn over only 46 days of those topic summaries. Mr. Libby's lawyers had initially requested the full copies of the President's Daily Briefs for nine months.

Mr. Libby has been charged with lying to the F.B.I. and to a grand jury about his role in the disclosure of Valerie Wilson's identity as a Central Intelligence Agency operative. His lawyers have outlined an argument that if he had given false information under oath about his role in disclosing Ms. Wilson's identity, it was unintentional and only because he was busy with weightier matters.

Theodore V. Wells Jr., his chief defense lawyer, argued that Mr. Libby needed the President's Daily Briefs to refresh his memory and to add substance to his argument that he was "so focused on urgent national security matters, it is hardly surprising that he would later confuse, forget or misremember" conversations with reporters about Ms. Wilson.

The ruling does not necessarily mean that Mr. Libby's lawyers can share with the jury all the information they are provided, or otherwise make it public.

Judge Walton said Mr. Libby's defense team did not need the complete copies of the President's Daily Brief, a memorandum of the secret briefings given six days a week in various forms to the president, the vice president and a handful of other officials.

"The defendant does not need the explicit details of the intelligence documents he desires to obtain," Judge Walton wrote. "The general topics of the documents would provide the defendant exactly the information he seeks, listings of the pressing matters presented to him during the times relevant to the case."

Judge Walton also said the government need supply only the summaries from June 7 to July 14, 2003, which is the period in which Mr. Libby spoke to three reporters, and for the two days before and two days after his appearances before the grand jury and his interrogation sessions by the F.B.I. He also ordered that Mr. Libby be given general information about his inquiries to intelligence officials.

The disclosure of Ms. Wilson's role with the C.I.A. in a column by Robert D. Novak on July 14, 2003, produced an investigation by Patrick J. Fitzgerald, who was named a special prosecutor by the Justice Department.

Mr. Libby told investigators and the grand jury that information he might have shared about Ms. Wilson with Judith Miller, then a reporter for The New York Times, and Matthew Cooper of Time magazine had come to him from Tim Russert of NBC News. Mr. Russert has testified that he never discussed Ms. Wilson with Mr. Libby.

Critics of the Bush administration have asserted that the destruction of Ms. Wilson's undercover status was an act of retaliation against her husband, Joseph C. Wilson IV. Mr. Wilson, who had been sent on an official fact-finding mission to Niger, wrote in an Op-Ed article in The New York Times that the Bush White House had lied when it propagated information that Saddam Hussein had been engaged in trying to import uranium from that country.

Mr. Fitzgerald had argued that the request from Mr. Libby's lawyers to obtain months of the President's Daily Brief was "a transparent effort at 'graymail,' " a technique in which defense lawyers demand highly sensitive information from the government to force the prosecution to choose between providing the material or dropping the case.

Mr. Fitzgerald described the President's Daily Brief as the most valuable of government intelligence documents. Tom Blanton, the executive director of the National Security Archive, a private group that challenges secrecy decisions of the government, said in an interview that their sensitivity was often overstated.

Despite government assertions that only one such document has been disclosed, about a dozen have been partially released over the years, Mr. Blanton said.

He said that they were often banal and that the government's desire to keep them secret was less about protecting secrets than maintaining their mystique.

    Judge Tries Compromise on Briefs Libby Is Seeking, NYT, 11.3.2006, http://www.nytimes.com/2006/03/11/politics/11libby.html

 

 

 

 

 

For Second Time, a Jury Fails to Reach a Verdict on Gotti

 

March 11, 2006
The New York Times
By ANEMONA HARTOCOLLIS

 

For the second time in six months, after more than a dozen witnesses, including turncoat mobsters — and despite the efforts of top prosecutors and investigators — a Manhattan jury failed to reach a verdict yesterday in the case of John A. Gotti, the son of the famous Mafia boss.

After just a day and a half of deliberations, a federal judge ruled that the jury was deadlocked and declared a mistrial, and Mr. Gotti went home.

The decision sent prosecutors back to prepare a third case against Mr. Gotti, and left open a straightforward, almost theological question at the heart of both cases: Can a mob boss, one with the last name Gotti, attain a state of redemption?

Over the last three weeks, prosecutors have told a story starring Mr. Gotti as the faithful son of John J. Gotti — or John Senior, as he has been familiarly called at trial — carrying out his father's legacy as head of the Gambino crime family.

In equally operatic fashion, the defense countered that the charges were all a mistake, that although Mr. Gotti, known as Junior, had once been seduced into emulating his father, he had forsaken "the life," as witnesses called it, of organized crime at least eight years ago, when he realized the toll it was taking on his wife and children.

The jury announced it could not reach a verdict in a note liberally spiked with capital letters for emphasis, saying its members had wrestled with their consciences and could neither convict nor acquit. The jury, the note said, was making "ZERO headway," it was "completely DEADLOCKED" and "no juror can find it in their conscience to change their mind, based on our interpretation of the evidence."

With that, Mr. Gotti was approaching the record of his late father, who earned the nickname the Teflon Don after he eluded conviction in three cases between 1986 and 1990, though he ultimately died in prison in 2002 while serving a life sentence.

Formally, the younger Gotti was charged with ordering the botched kidnapping and beating — which ended in the shooting — of Curtis Sliwa, the radio host and founder of the Guardian Angels; with loan-sharking; and with construction industry extortion, all as part of a broad pattern of racketeering dating to the 1980's.

But the bigger issue for the jury was whether Mr. Gotti continued to help run the Gambino family for the last eight years, a period when he was continuously either under house arrest or in jail.

If he did not, then the other charges — especially the best-documented one, the kidnapping and shooting of Mr. Sliwa in 1992 — were too old to prosecute.

From almost the first hour of deliberation, the jury seemed to have focused on whether Mr. Gotti had, as his defense claimed, renounced the life of the Mafia. It was also clear, from the notes to the judge, that that was the element on which the jurors deadlocked, and it was unclear whether they ever considered any of the other more specific charges.

As he left the courtroom in Federal District Court in Manhattan, a subdued Mr. Gotti hugged his waiting sisters, Angel and Victoria, his mother, also named Victoria, and his younger brother, Peter, telling his brother, "We gotta go one more time."

Later, Mr. Gotti added: "I just want to see my children. That's all I want in life." He said he was grateful that "I'm going to sleep in my own bed." He had faced 30 years in prison if convicted.

Outside the courthouse, his mother told waiting reporters: "Your sons are next. That's what they're trying to do, railroad my son." She praised the jurors as fair and said: "People are getting tired of this. It's getting dirty."

Prosecutors had described a corrupt pyramid scheme in which a hierarchy of Mafia underlings made money on the street and at construction sites through loan-sharking and extortion and made sure they gave a share of everything up to the boss. Mr. Gotti, they said, grew so rich that he could afford a mansion on Long Island and a country estate in Milford, Pa., and that he carelessly stashed $358,000 in bundled cash in a broken refrigerator in a cluttered Queens basement.

Adding a dollop of soap to the opera, a turncoat mobster, now living with a secret identity as a protected government witness, threw mistresses and love children into the mix. He said the junior Gotti cheated on his wife with a girlfriend named Mindy; Mr. Gotti denied this. And the witness said that the senior Gotti had fathered an illicit daughter with a secret second family, again without corroboration.

The defense suggested that Mr. Gotti had paid his debt to society in 1999, when he pleaded guilty to previous racketeering charges and was sentenced to six and a half years. That is more prison time than some turncoat mobsters accused of murder, a charge Mr. Gotti has never faced.

Prosecutors said Mr. Gotti had ordered the attack on Mr. Sliwa in retaliation for his using his radio show as a bully pulpit to insult Mr. Gotti's father.

Mr. Sliwa, whose kidnapping and shooting provided the government with its most publicized charges, lashed out outside the courthouse after the verdict at the co-host of his radio show, Ronald L. Kuby, a lawyer who had testified as a defense witness. Mr. Kuby told the jury that in a 1998 conversation, Mr. Gotti told him he was "sick of this life" and wanted to be done with it.

Mr. Kuby's testimony "hurt me more than those three hollow-point bullets and that baseball bat," Mr. Sliwa said, referring to not just the kidnapping in which Mr. Gotti was charged, but a previous attack on Mr. Sliwa with baseball bats that he and prosecutors attributed to Mr. Gotti's underlings. Mr. Gotti was never formally charged, however, in the baseball bat attack.

The jury's final note came at 1:25 p.m. yesterday. It was an hour and a half after the jury sent out a similar note saying it could not come to a unanimous decision as to whether Mr. Gotti had renounced mob life, or withdrawn from the conspiracy, in legal lingo. The jurors had sent a similar note the day before, suggesting that the issue had been on their minds from the beginning.

After the first note yesterday, Judge Shira A. Scheindlin instructed the jurors to keep trying.

The second note was even more emphatic, with a P.S. saying, "We want to leave ASAP." Michael McGovern, the assistant United States attorney, at first tried to persuade the judge to send the jurors home for the weekend to sleep on it.

Judge Scheindlin demurred that she had "never seen a clearer deadlock." The note, the judge added, was "beautifully written," indicating to her that the jurors had clearly understood her earlier charge about consulting their consciences.

What is more, she said, it used plural pronouns like "their" and "our," suggesting to her that the disagreement involved more than a single holdout.

In Mr. Gotti's last trial in September, notations on a verdict sheet indicated that a single holdout juror refused to convict.

After consulting with supervisors, prosecutors consented to a mistrial. No definite date for a retrial was set yesterday. Mr. Gotti's lawyers asked for a delay, citing financial hardship, saying they had not yet been paid for this trial because the government had "tied up" Mr. Gotti's assets.

Mr. Gotti's lead lawyer, Charles Carnesi, said that for a case to be tried three times was not extraordinary, but that more than three trials would be very unusual, "because then you're just playing the law of averages."

Colin Moynihan contributed reporting for this article.

    For Second Time, a Jury Fails to Reach a Verdict on Gotti, NYT, 11.3.2006, http://www.nytimes.com/2006/03/11/nyregion/11gotti.html

 

 

 

 

 

Judge Issues Secret Ruling in Case of 2 at Mosque

 

March 11, 2006
The New York Times
By JULIA PRESTON

 

 federal judge issued a highly unusual classified ruling yesterday, denying a motion for dismissal of a case against two leaders of an Albany mosque who are accused of laundering money in a federal terrorism sting operation.

Because the ruling was classified, the defense lawyers were barred from reading why the judge decided that way.

The defense lawyers had asked the judge to dismiss the case, saying that they believed the government's evidence came from wiretaps obtained without a warrant by the National Security Agency.

The two mosque leaders, Yassin M. Aref, 35, and Mohammed M. Hossain, 50, were charged in August 2004 with conspiring with a government informant to take part in what they believed was a plot to import a shoulder-fired missile and assassinate a Pakistani diplomat.

The classified order by Judge Thomas J. McAvoy of United States District Court for the Northern District of New York came only a few hours after the government filed its own classified documents to the judge. Prosecutors were responding to a motion filed on Jan. 20 by Mr. Aref's lawyer, Terence L. Kindlon.

The prosecutors asked the judge to review their papers in his chambers without making them public or showing them to the defense. At midafternoon the judge issued a document announcing that he had entered the classified order denying Mr. Kindlon's request.

It is common in federal court for judges to place documents and legal discussions under seal, meaning that the judge and the lawyers can be informed of the proceedings, but the public cannot. In this case, Judge McAvoy's order is classified, a higher degree of secrecy. As of late yesterday, Mr. Kindlon, even though he has a federal security clearance to represent Mr. Aref in the trial, had not been able to see the substance of the ruling.

"Frankly, I'm taken aback," Mr. Kindlon said. The ruling "holds out no promise of anything" for him to see the decision, he said.

Christopher Dunn, a lawyer for the New York Civil Liberties Union, which has asked to participate in the case, said such decisions appeared to be rare. Mr. Dunn said his group had no record of a classified decision in a case that it had handled.

In his motion, Mr. Kindlon cited an article in The New York Times on Jan. 17 that reported that "different officials agree" that the security agency's program had "played a role" in the arrest of Mr. Aref and Mr. Hossain. Mr. Hossain's lawyer, Kevin A. Luibrand, joined the request to dismiss the case.

Mr. Kindlon asked that all evidence in the case stemming from N.S.A. wiretaps be given to the defense. He argued that the program was unconstitutional and so the evidence should be suppressed.

"The government engaged in illegal electronic surveillance of thousands of U.S. persons, including Yassin Aref, then instigated a sting operation to attempt to entrap Mr. Aref into supporting a nonexistent terrorist plot, then dared to claim that the illegal N.S.A. operation was justified because it was the only way to catch Mr. Aref," Mr. Kindlon wrote in his brief.

Whether or not the program is constitutional is a matter of intense political and legal debate that has not been resolved by the courts. Since the government classified its motions, there is no way at this point to know what argument persuaded Judge McAvoy.

The arrest of Mr. Aref, an Islamic scholar who is the imam of Masjid As-Salaam in Albany, and Mr. Hossain on Aug. 5, 2004, came after a yearlong sting operation in which the informant posed as a terrorist. They are accused of agreeing to launder $50,000 in payments for a Chinese missile that he showed them.

At first, prosecutors said that both men had ties to a terrorist group known as Ansar-al-Islam. The government soon dropped those claims after it turned out they were based on a bad translation of a piece of evidence by the Defense Department. Mr. Aref was free on bail for 13 months, but he was sent to prison to await trial after the government brought new charges. Mr. Hossain remains free on bail.

Mr. Kindlon said Judge McAvoy's action convinced him that there was N.S.A. wiretap evidence in the case. "If they were not involved, the government would have told me, 'You're delusional,' " he said.

    Judge Issues Secret Ruling in Case of 2 at Mosque, NYT, 11.3.2006, http://www.nytimes.com/2006/03/11/national/11terror.html?_r=1&oref=slogin

 

 

 

 

 

Ex-Enron CFO Fastow admits he lied, cheated

 

Thu Mar 9, 2006 4:59 PM ET
Reuters
By Jeff Franks

 

HOUSTON (Reuters) - Government star witness Andrew Fastow repeatedly admitted during cross-examination on Thursday he was a liar and a cheat as the defense tried to refute his testimony that former Enron Corp. chief executives Jeffrey Skilling and Ken Lay covered up their company's crumbling finances.

He said he had no written documents to back up his allegations against his former bosses, but said they were part of a broad conspiracy among Enron executives to mislead investors while enriching themselves.

"I was suggesting the senior management at Enron, not only Mr. Skilling, engaged in a pattern of actions that painted a picture of Enron that did not comport to what was going on,' he testified in the fraud and conspiracy trial of Lay and Skilling.

"And we all benefited from that with salaries that were larger than they should have been, bonuses that were larger than they should have been."

Houston-based Enron, an energy trader that was once the nation's seventh largest company, declared bankruptcy in December 2001 following disclosures it had inflated profits and hidden billions of dollars in debt in off-the-books deals run by Fastow.

He has admitted looting the partnerships for millions of dollars, pleaded guilty to two counts of conspiracy and agreed to cooperate with prosecutors in exchange for a 10-year sentence.

Lay and Skilling face a combined 35 charges, but have denied any wrongdoing and blamed Enron's collapse on Fastow's criminal activities.

As the highest ranking Enron executive to testify so far in the case and the mastermind of the company's most illicit deals, Fastow is considered the prosecution's key witness.

Skilling attorney Daniel Petrocelli accused him on Thursday of lying to help prosecutors hungry for a conviction in this high-profile case.

"You are very determined to get across to this jury not only what your actions are, but you want to convey to this jury over and over again that Mr. Skilling is guilty of fraud. Is that true, yes or no?" asked Petrocelli.

"I'm here to tell the truth," Fastow said.

Thursday's testimony was at times testy but mostly tedious as Petrocelli and Fastow plowed through details of the financial house of cards Fastow constructed at Enron.

Petrocelli led Fastow through the various side deals he ran, each time eliciting an admission of his misdeeds.

In one deal, Fastow told his partners that a Brazilian power plant they had invested in was worthless when in fact he intended to sell it for millions and pocket the money.

"I was trying to cheat my limited partners," he said matter-of-factly. "I knew the asset would be worth more and I was trying to take advantage of my limited partners."

Of another deal, he said: "I defrauded Enron and Natwest (Bank) of the $19 million, as we discussed."

"Regardless of what all these pretty documents say, the accounting was wrong," he said of another transaction.

"You drive a hard bargain, don't you?" Petrocelli asked.

"I think I said on more than one occasion yesterday that I was greedy," Fastow said.

Fastow said on Wednesday that Lay, despite repeatedly denying it, knew Enron was piling up losses and debt as it spiraled toward bankruptcy, but he lied to investors, analysts and employees to hide the problems.

Skilling, he said, did the same, but also offered Fastow "bear hug" deals, or assurances he would make money, if he would take Enron's troubled assets into the partnerships he ran.

Fastow said he and Enron chief accountant Richard Causey initialed a handwritten agreement called the "Global Galactic Agreement" which assured the partnerships would make money. Skilling, Fastow said, approved it even though his initials are not on it.

"You made no notes of those conversations?" asked Petrocelli, who has said there is no paper trail of illegality leading to his client.

"I don't recall any," Fastow said.

"Do you recall any piece of paper that says you have a 'bear hug,' whatever, from Skilling?' Petrocelli asked.

"I can't recall any specific document," he said.

    Ex-Enron CFO Fastow admits he lied, cheated, R, 9.3.2006, http://today.reuters.com/business/newsarticle.aspx?type=ousiv&storyID=2006-03-09T220011Z_01_N09214063_RTRIDST_0_BUSINESSPRO-ENRON-TRIAL-DC.XML

 

 

 

 

 

Moussaoui had dream to hit W.House: witness

 

Wed Mar 8, 2006 6:28 PM ET
Reuters
By Deborah Charles

 

ALEXANDRIA, Virginia (Reuters) - September 11 conspirator Zacarias Moussaoui talked of his dream to fly an airplane into the White House more than a year before the hijacked aircraft attacks, a witness linked to al Qaeda testified in federal court on Wednesday.

Fazi Bafana, formerly a treasurer of a unit of Jemaah Islamiah, which is linked to al Qaeda, revealed discussion of that dream in videotaped testimony played during Moussaoui's sentencing trial.

Moussaoui, 37, has already pleaded guilty to conspiracy in connection with the September 11 attacks, but said he took no part in those attacks and was to be part of a second wave of attacks. The trial is to determine whether he is to be executed for his crime or will be jailed for life.

Bafana, who said he had been involved in planning possible attacks on U.S. military installations, said he was arrested in Singapore in December 2001 and ordered by Singapore authorities to testify and cooperate in the Moussaoui case.

He described meeting in mid-2000 a man he knew only as "John," but who he later identified as Moussaoui, and whom he said he had allowed to stay at his home in Kuala Lumpur.

"He told me he had a dream. He dreamed to fly an airplane ... into the White House," Bafana said. "He told me he informed (Osama bin Laden) what he dreamed and (bin Laden) said go ahead. He asked me to assist him."

Bafana said Moussaoui spoke of his desire to carry out "jihad," particularly against America, and said he needed help with financing. He was also interested in obtaining ammonium nitrate and aluminum powder -- materials used to make bombs.

Bafana, who was born in Singapore but is a Malaysian citizen, was interviewed by federal prosecutors at an undisclosed facility in Southeast Asia. The deposition was made with Moussaoui and U.S. District Judge Leonie Brinkema through a video hookup to the Alexandria courthouse.

Bafana said Moussaoui had asked Jemaah Islamiah for $10,000 to help him travel to Europe and then finance flight training in the United States. The group's commander, Riduan Isamuddin -- better known as Hambali -- told Bafana to give Moussaoui just S$2,000 ($1,227).

Under cross examination, Bafana said he and Hambali thought Moussaoui was "cuckoo" and they wanted him to leave Malaysia.

The testimony was the first in the trial from a foreigner detained abroad.

Moussaoui, a French citizen of Moroccan descent, has admitted to being a member of al Qaeda and pleaded guilty in April to six charges, including conspiracy to commit terrorism, in connection with the September 11 attacks.

The statement of facts signed by Moussaoui when he pleaded guilty included a paragraph that said bin Laden had personally approved of Moussaoui's plan to attack the White House.

"Bin Laden told Moussaoui: 'Sahrawi, remember your dream,'" it said, using one of Moussaoui's aliases.

To obtain a death sentence the U.S. government must prove Moussaoui's actions led to at least one death even though he was arrested before the attacks in August 2001 after he raised suspicions at a flight school.

Prosecutors have said Moussaoui's lies prevented the FBI from stopping the attacks, in which some 3,000 people were killed. Moussaoui's lawyers have said it was unlikely he could have told the FBI anything that would have thwarted the attacks.

(1S$=US$1.63)

    Moussaoui had dream to hit W.House: witness, R, 8.3.2006, http://today.reuters.com/news/newsArticle.aspx?type=newsOne&storyID=2006-03-08T232840Z_01_N08516742_RTRUKOC_0_US-SECURITY-MOUSSAOUI.xml

 

 

 

 

 

U.S. Told to Allay Detainees' Spy Fears

 

March 8, 2006
The New York Times
By NINA BERNSTEIN

 

A federal magistrate in Brooklyn ordered government lawyers at a hearing yesterday to guarantee in writing that the United States was not secretly monitoring communications between the plaintiffs and their lawyers in a class-action lawsuit against former Attorney General John Ashcroft and other top officials.

The plaintiffs in the case are Muslim immigrants who were swept up in the New York area after Sept. 11, 2001, detained for months and deported after being cleared of any links to terrorism. Several briefly returned to New York from Egypt and Pakistan this year to give depositions at an undisclosed hotel.

Their lawyers have asked if the rooms where they and their clients conferred were bugged or videotaped and if their e-mail messages and telephone calls were intercepted. If so, they ask, on whose authority? But the government has refused to answer, saying the questions were outside the realm of the lawsuit.

Rachel Meeropol, a lawyer for the Center for Constitutional Rights, which represents many of the detainees, wrote the magistrate that the questions were prompted by disclosures that the National Security Agency has intercepted electronic communications inside and outside the United States, without a warrant, under an executive order being challenged in a separate lawsuit.

The magistrate, Steven M. Gold, said that the questions were probably outside the scope of the lawsuit. But, he said, the plaintiffs' lawyers were "at minimum" entitled to assurance that the government litigation team and any potential witnesses — who include Mr. Ashcroft and Robert S. Mueller III, the F.B.I. director, did not know of any spying. Magistrate Gold said he also wanted "a commitment" that no information collected through such eavesdropping would be used in the case.

"They can't be expected to prepare their case if they think someone is listening to them," he told Stephen E. Handler, a Justice Department lawyer. "I don't want them looking over their shoulders and worrying that you're getting phone calls from some N.S.A." agent.

    U.S. Told to Allay Detainees' Spy Fears, NYT, 8.3.2006, http://www.nytimes.com/2006/03/08/nyregion/08detain.html?_r=1&oref=slogin

 

 

 

 

 

Prosecutor Urges Death for Concealing 9/11 Plot

 

March 7, 2006
The New York Times
By NEIL A. LEWIS

 

ALEXANDRIA, Va., March 6 — A federal prosecutor on Monday asked a jury to sentence Zacarias Moussaoui to death, saying his willful decision to conceal his knowledge of the Sept. 11 terrorist plot when he was arrested weeks earlier made him responsible for the thousands of deaths that day.

In response, a court-appointed lawyer for Mr. Moussaoui told jurors they could not order the execution of a man on no more than a supposition: that had he revealed his knowledge of Al Qaeda's interest in flying planes into public buildings, the federal authorities would have prevented the attacks of Sept. 11, 2001.

Mr. Moussaoui, a 37-year-old Frenchman of Moroccan heritage, is the only person to be charged in the United States justice system with direct involvement in the Sept. 11 attacks. He was in jail on that day, having been arrested three weeks earlier in Minnesota on immigration charges while he was taking flight lessons.

He has pleaded guilty to six conspiracy counts and admitted that he was taking flight training to be available for a Qaeda campaign to fly aircraft into buildings. But he has insisted that he was not part of the Sept. 11 plot and that he does not deserve to die.

Because he has pleaded guilty, the trial that got under way on Monday is solely over whether he is to be executed by lethal injection at a federal prison in Indiana or spend his life in prison.

In their opening statements, lawyers for the government and for Mr. Moussaoui presented starkly different portraits of his importance to Al Qaeda's plans to wage war on the United States.

Robert Spencer, an assistant United States attorney, told the jury that Mr. Moussaoui was "in the thick of the plot" but that because he had been arrested, his contribution to the attacks "in the end was to lie so his Al Qaeda brothers could go forward."

Mr. Spencer said that had Mr. Moussaoui told a Federal Bureau of Investigation agent in August 2001 what he knew about Al Qaeda's plans, the bureau and the Federal Aviation Administration would have gone on full alert and taken steps to hunt down the hijackers and increased security at the nation's airports.

He said documents recovered from Mr. Moussaoui's home after Sept. 11 provided valuable clues that would have led directly to many of the 19 hijackers of that day.

"He killed the 9/11 victims as surely as if he had been at the controls in one of those airplanes," Mr. Spencer said.

Edward J. MacMahon, one of the court-appointed lawyers who is conducting the defense over Mr. Moussaoui's objections, said it was true that his client had proudly proclaimed himself a member of Al Qaeda and said he was planning to fly a plane into the White House at the orders of Osama bin Laden.

But Mr. MacMahon attacked the government's argument that had Mr. Moussaoui spoken truthfully of what he knew when he was arrested it would have prevented the attacks. He cited the official commission that investigated the attacks and found the government had several indications of Al Qaeda's plans before that day. The report found that the authorities never fully appreciated the significance of some of the leads.

"You can't judge him to get revenge for 9/11," Mr. MacMahon said. "You can't make him some substitute for Osama bin Laden. And you can't make him a scapegoat for what government officials did not do" to prevent the attacks.

Even if Mr. Moussaoui had not lied, he said, there is no reason to believe that the authorities would have acted quickly on that information any more than they acted on other leads. What officials would have done is speculative, he said, adding that Mr. Moussaoui was regarded as unreliable even by his Qaeda colleagues.

"No one should be executed on such flimsy evidence, not even a member of Al Qaeda," Mr. MacMahon said.

Throughout it all, Mr. Moussaoui sat back quietly in a chair to the side, slowly stroking his beard, often staring intently at spectators, who included about 10 family members of the attack victims.

The jury was whittled down on Monday to 17 people who will hear the case over the next several weeks. When it comes time to deliberate, 12 of that group will decide Mr. Moussaoui's fate. The jurors, 7 women and 10 men, are all from the Northern Virginia area.

Under the federal death penalty law, the jury's first task is to decide whether the crimes to which Mr. Moussaoui has pleaded to resulted in the death of anybody. If the jury is unanimous on that issue, it will consider aggravating factors, like the severity of the crime, as well as mitigating factors. If it finds the aggravating factors outweigh any mitigating factors, it will vote on whether to recommend the death penalty. If it does so, again unanimously, the judge is obliged to impose it.

Because Mr. Moussaoui pleaded guilty, the arguments that would have been at the heart of a jury trial on the question of his guilt will now get an airing before the newly installed jury, which is to decide his sentence. So the proceedings to come will resemble in almost every way the kind of trial that usually determines guilt or innocence in a capital case, and therefore may last for several weeks.

In addition to arguing that Mr. Moussaoui played no part in the Sept. 11 conspiracy, his lawyers are expected to argue that he is mentally unstable, a potentially mitigating factor. The lawyers have arranged for a psychologist to testify that Mr. Moussaoui's behavior, notably his frequent outbursts in the courtroom during the earlier proceedings, show him to be suffering from a mental disorder, "most likely schizophrenia," that began with his experiencing racism as a youth in France.

The government, for its part, plans to emphasize the losses of the Sept. 11 attacks. Prosecutors have prepared more than 40 family members to testify about the devastating impact on their lives.

The trial will include statements from six Qaeda officials in secret United States custody, including Khalid Shaikh Mohammed, the chief planner of the Sept. 11 attacks. But those statements that will be included at the order of Judge Leonie M. Brinkema are likely to be solely about Mr. Moussaoui's role in Al Qaeda and also may not be made public.

Mr. Moussaoui's actual role in the Sept. 11 attacks has remained an intriguing mystery to investigators. The official commission that studied the attacks concluded that Qaeda leaders might have considered using him as "a potential substitute pilot" on Sept. 11 because of friction among other participants, but that his arrest scuttled that possibility. The commission also speculated that he might have been meant to be part of a second wave of attacks and noted that Al Qaeda spent some $50,000 on his training.

    Prosecutor Urges Death for Concealing 9/11 Plot, NYT, 7.3.2006, http://www.nytimes.com/2006/03/07/national/nationalspecial3/07moussaaoui.html?hp&ex=1141707600&en=d45bd65f83572ce5&ei=5094&partner=homepage

 

 

 

 

 

Trial to Determine Punishment for Moussaoui Begins

 

March 6, 2006
By THE ASSOCIATED PRESS
Filed at 12:41 p.m. ET
The New York Times

 

ALEXANDRIA, Va. (AP) -- The sentencing trial of terrorist conspirator Zacarias Moussaoui opened Monday with the selection of a jury that will determine whether he is put to death for conspiring with al-Qaida terrorist to hijack planes and commit other crimes.

U.S. District Judge Leonie Brinkema seated 18 jurors and alternates after a 90-minute process. One was excused for unspecified personal reasons, meaning the trial will proceed with 12 jurors and five alternates instead of six.

Opening statements were expected Monday afternoon, as was testimony from the first witness.

Moussaoui, a 37-year-old French citizen, has acknowledged his loyalty to the al-Qaida terrorist network and his intent to commit acts of terrorism, but denies any prior knowledge of the Sept. 11 plot.

His mother, Aicha el-Wafi, spoke up for her son in a CNN interview. ''All they can have against him is the things that he said, the words that he has used,'' she said, ''but actual acts that he committed, there aren't any.''

But D. Hamilton Peterson of Bethesda, Md., who lost his father Donald and stepmother Jean on hijacked Flight 93, which crashed in Pennsylvania, declared, ''I want accountability.''

''I would like to have accountability after a fair trial for the world to see,'' he said. ''I believe Moussaoui is an excellent candidate for the death penalty. He is nothing less than a mass murderer.''

''Most Muslims and most Christians are God-fearing people who do not believe in slaughtering innocent women and children,'' Peterson said.

After the jurors were seated and sworn in, one asked to speak to the judge and after a bench conference, she was excused without explanation to the courtroom.

Prosecutors and defense lawyers used peremptory strikes, which allow each side to dismiss jurors for any reason they choose except their race or sex, to whittle the pool down to the final jurors and alternates.

Those selected will not know who is a juror and who is an alternate until late in the trial.

The jury pool already had been qualified to serve during a two-week process in which prospects were quizzed individually by Brinkema and filled out 50-page questionnaires asking their views about the death penalty, al-Qaida, the FBI and their reactions to the Sept. 11 attacks.

Arrangements for the trial have been years in the making. Victims of the terrorist attacks and their families can watch the trial on closed-circuit TV at federal courthouses in Boston, Central Islip, N.Y., Newark, N.J., Philadelphia and in Alexandria, thanks to legislation passed in Congress.

Moussaoui pleaded guilty in April to conspiring with al-Qaida to hijack planes and commit other crimes. The trial will determine Moussaoui's punishment, and only two options are available: death or life in prison.

To obtain the death penalty, prosecutors must first prove a direct link between Moussaoui and the Sept. 11 attacks. Moussaoui denies any connection to 9/11, but says he was training for a possible future attack.

Prosecutors will try to link Moussaoui to 9/11 by arguing that the FBI would have prevented the attacks if only Moussaoui had told the truth to the FBI about his terrorist links when he was arrested in August 2001.

The defense argues that the FBI and other agencies knew more about the hijackers' plans before 9/11 than Moussaoui and still failed to stop the attacks.

    Trial to Determine Punishment for Moussaoui Begins, NYT, 6.3.2006, http://www.nytimes.com/aponline/national/AP-Moussaoui.html?hp&ex=1141707600&en=14ab817edc5b5e38&ei=5094&partner=homepage

 

 

 

 

 

From Sidelines to Center Court

 

March 6, 2006
The New York Times
By ANEMONA HARTOCOLLIS

 

Call it the Soprano effect. To spectators at John A. Gotti's racketeering trial, it often seems as if life were imitating television, and that the airing of every intimate detail of the fictional mobster Tony Soprano's life has broken down a social code that once prevented real-life mobsters from exposing their private lives and peccadilloes, from girlfriends to illegitimate children, in public.

One of the prosecutors, Joon Kim, has led two turncoat mobsters, Michael DiLeonardo and Joseph D'Angelo, through recitations of their lives from blood oath to murder, with the calm, hypnotic manner of a psychoanalyst interrogating a patient.

But it is probably the assertive presence of the Gotti women in United States District Court in Manhattan that has marked the biggest departure from Mafia tradition. "Women have always been considered an inferior element in the Mafia," says Selwyn Raab, a retired New York Times reporter who chronicled the lives of the Gottis in his book "Five Families: The Rise, Decline and Resurgence of America's Most Powerful Mafia Empires." "They are not supposed to intrude, not supposed to be involved in any way. One: to protect them. And two: that's the culture; that's the code."

Mr. Gotti's mother, Victoria, has attended every day of her son's trial since it began two weeks ago, and offered a window into the changing social mores of the mob.

Fifty, even 20 years ago, in the era depicted by the classic Godfather movies, Mafia wives and daughters were to be neither seen nor heard. But Mr. Gotti's trial has become more of a soap opera than the soaps, in which the Gotti women — led by Mr. Gotti's mother, but also joined by his sisters, Victoria and Angel, a niece named Victoria after her grandmother, and even the ex-wife of a Gambino captain — have played a central role.

Though the presence of Mafia wives at trials has not been unheard of in recent years, Mr. Raab said, Mrs. Gotti — the widow of John J. Gotti, celebrated as the Dapper Don and the Teflon Don before spending the last years of his life locked up in a maximum security penitentiary — never attended any of her husband's major trials. "He had four trials after he became boss, and she was never there," Mr. Raab said. Partly, he noted, that was because "they were on the outs," and she did not visit him in prison, either.

In this trial, however, which enters its third week today, the Gotti women have waged a public relations war for Mr. Gotti, speaking on his behalf outside of court, while he has focused on what goes on in the courtroom.

Every day, his mother and sister Angel have occupied center aisle seats in the second row, which is reserved for family members (both conventional relatives and the Cosa Nostra kind). Mr. Gotti's more flamboyant sister, Victoria, has appeared most days in the afternoon, drawing stares from tourists both because she resembles Donatella Versace, with hip-length blond tresses and flashy clothes, and because she is recognized as a novelist and hostess of the reality-TV show "Growing Up Gotti." (Mr. Gotti's wife, Kim, who is pregnant with their sixth child, has not attended.)

Lawyers said that in a trial that is something of a morality play, even Mr. Gotti's church-going could have an impact on the perception of the jury, since this jury includes several observant Catholics. On Ash Wednesday, five of the 16 jurors, including alternates, arrived in court for the morning session with their foreheads marked with black smudges. Mr. Gotti returned from lunch with ashes on his forehead.

On a recent day, a federal prosecutor led an F.B.I. agent through the list of people who visited Mr. Gotti while he was in prison.

As the prosecutor ticked off the names, one by one, the agent identified them each as an "associate" of the Gambino crime family, qualifying a couple by adding "and lifelong friend."

The judge called a break, and Mr. Gotti's mother called to his lawyer, Charles Carnesi: "Hey, Charles. Did you tell them that I am an associate, and my daughter, too, and my granddaughter?"

It was a typically acerbic reaction for Mrs. Gotti, whose commentary has not always been appreciated. "Mom, please, I got this under control," Mr. Gotti protested another time, leaning over the rail.

The racketeering charges against Mr. Gotti are so diffuse that much of the court battle has focused not on the charges but on his private life. Besides, the charges against him — loan-sharking, extortion and kidnapping — are not nearly as serious as the murder charges that the two star prosecution witnesses have confessed to as part of their cooperation agreement with the government. In his defense, Mr. Gotti says he left the mob life years ago, when he realized how much it could hurt his wife and children.

The Gotti family has been particularly angered by testimony from Mr. DiLeonardo, the turncoat Gambino captain who said that Mr. Gotti dated a woman named Mindy during his marriage and that his father had a secret second family and a daughter out of wedlock.

Three days after Mr. DiLeonardo's testimony, the Gotti family called in reinforcements. John J. Gotti's oldest granddaughter, Victoria Gotti Albano, 18, arrived at the courthouse, saying, "We always stick together." Wearing a large necklace spelling out the word "princess," which she said her grandfather had given her, she sat between her mother, Angel, and grandmother in the second row for the rest of the week. Ms. Albano, a freshman at U.C.L.A., said she wanted to become a lawyer to avenge the wrongs she said the government had inflicted on her family. Her grandmother volunteered that the teenager's role model was Ron Kuby, a civil rights lawyer. Mrs. Gotti, who is, in the traditional mold, a Queens homemaker, is supportive of her granddaughter's career goals, even confiding in the hallway outside the courtroom one day that the idea of being called "Ms." Gotti appealed to her.

"She's liberated," Mr. Raab said, not sounding 100 percent convinced.

The more traditional "Married to the Mob" role in this courtroom drama has been played by Mr. DiLeonardo's ex-wife, Toni Marie Ricci, who appeared as a defense witness to testify on the distress that her husband's infidelity caused her and their teenage son, Michael. Asked by prosecutors last week whether she knew that her ex-husband, her father, brother, uncle and cousin were all associated with the Gambino crime family, she replied that she was "just a housewife and mother" who did not concern herself with such things.

If Mrs. Gotti doesn't always adhere to type, Mr. Raab said, that may be because her ancestry is Russian on her mother's side. Her mixed antecedents were a problem when it came time for her son to be inducted into the Mafia, Mr. Raab said, because Mafia rules required both parents of a "made" member to be of Italian descent. The senior Gotti solved the problem by changing the rule to require patrilineal descent only, Mr. Raab said.

Mrs. Gotti seemed more outraged by what she saw as the prosecution's sanctimonious attitude than by the suggestion that her husband had had affairs, a rumor that, after all, had been alluded to in books and whispered by government agents. If the government was going to prosecute womanizers, she said, "We should hang all our presidents."

It was another remark worthy of a Soprano, although Mrs. Gotti was coy when asked whether she ever watched the show. "I really would love to because I think it's an entertaining program," she said. "But if there's a really good movie on, or "20-20," or something on the Discovery Channel, I would rather watch that."

    From Sidelines to Center Court, NYT, 6.3.2006, http://www.nytimes.com/2006/03/06/nyregion/06gotti.html

 

 

 

 

 

AP: Thousands of federal cases kept secret

 

Posted 3/5/2006 3:53 AM
By Michael J. Sniffen And John Solomon, Associated Press Writers
USA Today

 

WASHINGTON — Despite the Sixth Amendment's guarantee of public trials, nearly all records are being kept secret for more than 5,000 defendants who completed their journey through the federal courts over the last three years. Instances of such secrecy more than doubled from 2003 to 2005.

An Associated Press investigation found, and court observers agree, that most of these defendants are cooperating government witnesses, but the secrecy surrounding their records prevents the public from knowing details of their plea bargains with the government.

Most of these defendants are involved in drug gangs, though lately a very small number come from terrorism cases.

Some of these cooperating witnesses are among the most unsavory characters in America's courts — multiple murderers and drug dealers — but the public cannot learn whether their testimony against confederates won them drastically reduced prison sentences or even freedom.

In the nation's capital, which has had a serious problem with drug gangs murdering government witnesses, the secrecy has reached another level — the use of secret dockets.

For hundreds of such defendants over the past few years in this city, should someone acquire the actual case number for them and enter it in the U.S. District Court's computerized record system, the computer will falsely reply, "no such case" — rather than acknowledging that it is a sealed case.

At the request of the AP, the Administrative Office of U.S. Courts conducted its first tally of secrecy in federal criminal cases. The nationwide data it provided the AP showed 5,116 defendants whose cases were completed in 2003, 2004 and 2005, but the bulk of their records remain secret.

"The constitutional presumption is for openness in the courts, but we have to ask whether we are really honoring that," said Laurie Levenson, a former federal prosecutor and now law professor at Loyola Law School in Los Angeles. "What are the reasons for so many cases remaining under seal?"

"What makes the American criminal justice system different from so many others in the world is our willingness to cast some sunshine on the process, but if you can't see it, you can't really criticize it," Levenson said.

The courts' administrative office and the Justice Department declined to comment on the numbers.

The data show a sharp increase in secret case files over time as the Bush administration's well-documented reliance on secrecy in the executive branch has crept into the federal courts through the war on drugs, anti-terrorism efforts and other criminal matters.

"This follows the pattern of this administration," said John Wesley Hall, an Arkansas defense attorney and second vice president of the National Association of Criminal Defense Lawyers. "I am astonished and shocked that this many criminal proceedings in federal court escape public scrutiny or become buried."

The percentage of defendants who have reached verdicts and been sentenced but still have most of their records sealed has more than doubled in the last three years, the court office's tally shows.

Of nearly 85,000 defendants whose cases were closed in 2003, the records of 952 or 1.1% remain mostly sealed. Of more than 82,000 defendants with cases closed in 2004, records for 1,774 or 2.2% remain mostly secret. And of more than 87,000 defendants closed out in 2005, court records for 2,390 or 2.7% remain mostly closed to the public.

The court office also found a sharp increase in defendants whose case records were partly sealed for a limited time. Among newly charged defendants, the numbers in this category grew from 9,999 or 10.9% of all defendants charged in 2003 to 11,508 or 12.6% of those charged in 2005.

But the AP investigation found, and court observers agree, that the overwhelming number of these cases sealed for a limited time involve a use of secrecy that draws no criticism: the sealing of an indictment only until the defendant is arrested.

AP's investigation found a large concentration of both kinds of secrecy at the U.S. District Court here: limited sealing of records and extensive sealing that continues even after the courts are done with a defendant.

"When the sentences are sealed, that's a con on the community," said Lexi Christ, a Washington defense lawyer for a man acquitted in a crack cocaine case.

In that case, all the defendants' names became public when the indictment was unsealed. But all other records for six defendants who pleaded guilty remained sealed more than two years after the public trial in which two of the drug dealers were convicted.

One of the cooperating witnesses admitted to seven murders and testified in open court against co-defendants who had committed fewer, Christ said. But like the others who pleaded guilty and cooperated, that witness' plea deal and sentence were sealed.

"Cooperating witnesses are pleading guilty to six or seven murders, and the jury doesn't know they'll be sitting on the Metro (subway) next to them a year later. It's a really, really ugly system," Christ said.

Prosecutors argue that plea agreements must be sealed to protect witnesses and their families from violent retaliation. But Christ said that makes no sense after the trial when the defendants know who testified.

The Reporters Committee for Freedom of the Press found the U.S. District Court here has 469 criminal cases, from 2001-2005, that are listed by this court's electronic docket as "no such case."

An AP survey over a shorter period found similar numbers here and got oral acknowledgment from the clerk's office that the missing electronic docket numbers corresponded to sealed cases. However, these figures include an unknown number of sealed indictments that will be made public if arrests are made.

"That's horrifying," said Loyola's Levenson. "When I was a prosecutor from 1981 to 1989, I never heard of secret dockets."

No matter how few turn out to be almost totally sealed after the defendant's case was completed, "it's still significant," said Lucy Dalglish, executive director of the Reporters Committee and a pioneer in campaigning against court secrecy.

"The Supreme Court has said that criminal proceedings are public," Dalglish added. "In this country, we don't prosecute and lock up convicts and have no public track record of how we got there. That violates the defendants' rights not to mention the public's right to know what it's court system is doing."

Although Justice Department does not keep comprehensive nationwide statistics on secrecy in federal prosecutions, it does track how often prosecutors ask permission from headquarters to hold a secret court proceeding, like an arraignment, hearing, trial or sentencing.

The department estimates it got 100 such requests from October 2000 though October 2004, Justice Department spokesman Bryan Sierra said. Another 100 arrived during the 12 months that ended October 2005, he said.

Sierra said the large recent increase occurred because the department sent a memo to all federal prosecutors in 2004 reminding them they need Washington's approval before requesting or agreeing to secret courtroom proceedings. Filing of secret papers in cases doesn't require such permission.

    AP: Thousands of federal cases kept secret, UT, 5.3.2006, http://www.usatoday.com/news/washington/2006-03-05-secret-justice_x.htm

 

 

 

 

 

Breast Cancer Delays Sentencing of Lawyer Convicted in Terrorism Case

 

March 4, 2006
The New York Times
By JULIA PRESTON

 

More than a year has passed since Lynne F. Stewart, a defense lawyer who proudly calls herself a radical, was convicted of aiding terrorists in a high-profile federal trial in New York. But she still has not been sentenced.

Debate has percolated about the Feb. 10, 2005, verdict against Ms. Stewart, with civil libertarians saying it violated her rights to represent a terrorist client and justice officials promoting it as a blow against terrorism. But the court became strangely quiet about the case, with Judge John G. Koeltl repeatedly postponing the sentencing without explanation.

Yesterday, Ms. Stewart, who remains free on bail, clarified the mystery when her lawyers filed a letter revealing that she is recovering from surgery on Jan. 9 for breast cancer and is about to start a program of radiation therapy. She requested a new delay of her sentencing until after July 31.

Ms. Stewart said that she had alerted Judge Koeltl about her cancer soon after her doctors saw signs of it in November, but the judge agreed to keep any discussion of her illness confidential until now.

"Talk about getting hit over the head with a sledgehammer, oh me," said Ms. Stewart, recalling the day in early December when her doctor, reading the results of a biopsy, confirmed the tumor.

Ms. Stewart, 66, faces a maximum of 30 years in prison, in effect a life sentence, after her conviction on five counts of providing material aid to terrorism and lying to the government. She was found guilty of conspiring with an imprisoned terrorist client, Sheik Omar Abdel Rahman, to defy special federal rules that barred him from communicating with his militant Islamic followers in Egypt.

In May 2000 Ms. Stewart carried a message from the sheik out of federal prison and later read it by telephone to a Reuters reporter in Cairo. The sheik was convicted in 1995 and is serving a life sentence for conspiring in 1993 to bomb the Holland and Lincoln Tunnels and other New York City landmarks.

Ms. Stewart said she had no illusion about much chance of avoiding prison. Judge Koeltl, of Federal District Court in Manhattan, denied her motions for a new trial in a sternly worded Oct. 25 ruling.

In a telephone interview from a country home upstate where she is recuperating, Ms. Stewart said, "The ultimate reality is this sentencing is going to happen." She said she hoped the judge would agree that she should recover from the cancer before going to prison. Her message, she said, is, "You may send me to jail for the rest of my life, but at least I'll go in strong and resistant to whatever happens."

After a Feb. 24 sentencing date was postponed, she was scheduled to be sentenced on March 10.

A letter from Ms. Stewart's oncologist, Dr. Michael L. Grossbard, filed with the court yesterday, reported that surgeons had removed a 2.4-centimeter "invasive ductal carcinoma" from her left breast. Dr. Grossbard, the chief of hematology and oncology at St. Luke's-Roosevelt Hospital Center in Manhattan, said that Ms. Stewart would require radiation treatments every weekday for about six weeks, starting at the end of this month.

"Fatigue can be a severe side effect for some patients and can limit their participation in usual daily activities," Dr. Grossbard wrote.

Ms. Stewart, who appeared sturdy and resolute throughout the trial, said that dealing with illness in the wake of her conviction had been difficult. "I have been totally consumed by this," she said. "I'm fragile enough that I can't just sit down and talk about this sentencing in the abstract."

Prosecutors in the case had no comment yesterday, noting that most of the court record about Ms. Stewart's health was still under seal.

For months after the trial Ms. Stewart, a cause cιlθbre in leftist and civil liberties circles, traveled around the country, speaking to groups of supporters. She stopped when the cancer was diagnosed, she said. She also learned last year that she had high blood pressure.

Ms. Stewart and her lawyers denied that she was seeking any special dispensation from the court. "We're not asking for anything out of the ordinary, beyond what is reasonable for the therapy she is undergoing," said Jill R. Shellow-Lavine, one of Ms. Stewart's lawyers. They are seeking a filing date of July 31 for their sentencing motions, which could lead to a sentencing date as late as September.

Two other defendants in the case are also awaiting sentencing. They are Mohamed Yousry, 49, Ms. Stewart's Arabic translator, and Ahmed Abdel Sattar, 46, a postal worker from Staten Island who was a paralegal in the sheik's case. Mr. Yousry remains free on bail, but Mr. Sattar, who was convicted of conspiring to kidnap and kill in a foreign country, the most serious charge in the trial, is now in maximum security solitary confinement in the federal jail in Manhattan.

A lawyer for Mr. Sattar, Kenneth A. Paul, said his client had been abruptly transferred recently to the most severe isolation unit in the Metropolitan Correctional Center and placed under the same type of restrictions, known as special administrative measures, that were imposed on Mr. Abdel Rahman. Mr. Sattar is confined to his cell 24 hours a day. The one-hour daily recreation time that he had had since he was first incarcerated four years ago has been canceled.

"He's in a complete shutdown right now," Mr. Paul said, "with no phone calls and no visitation, and we don't know why."

Prosecutors declined to comment on Mr. Sattar's situation.

    Breast Cancer Delays Sentencing of Lawyer Convicted in Terrorism Case, NYT, 4.3.2006, http://www.nytimes.com/2006/03/04/nyregion/04stewart.html

 

 

 

 

 

Ex-Congressman Gets 8-Year Term in Bribery Case

 

March 4, 2006
The New York Times
By RANDAL C. ARCHIBOLD

 

SAN DIEGO, March 3 — After acknowledging that he had "made a very wrong turn," former Representative Randy Cunningham was sentenced in federal court here on Friday to eight years and four months in prison for taking $2.4 million in bribes from military contractors in return for smoothing the way for government contracts.

The government, which called the misconduct unprecedented for its "depth, breadth and length," said the sentence was the longest ever handed down for a member or former member of Congress in a federal corruption case.

In a halting, cracking voice before journalists, friends, political associates and others, Mr. Cunningham, 64, stood before the judge and largely read from a statement as he pleaded for leniency and, turning to prosecutors, apologized for his crime.

"I rationalized decisions I knew were wrong," said Mr. Cunningham, a Naval pilot ace in the Vietnam War and "Top Gun" instructor who parlayed those experiences into a powerful political career. "Before there must be forgiveness, there must be redemption. No man has ever been more sorry."

Judge Larry Alan Burns of Federal District Court said the former congressman's conduct, which prosecutors said included keeping a "bribe menu" with the prices of influence, undermined faith in government and wasted tax dollars. In addition to some cash payments, Mr. Cunningham bargained for gifts like a sport utility vehicle, a Tiffany statue, Bijar rugs and candelabras.

Judge Burns said Mr. Cunningham, an eight-term Republican from Rancho Santa Fe who represented the northern suburbs of San Diego, could have retired to business long ago if he wanted to make copious money but instead engaged in bid rigging and badgering officials and other witnesses to help cover his tracks.

"You made a wrong turn and continued for three to five years," Judge Burns said, referring to what prosecutors documented as the period of misconduct. "I wonder how far you would have gone.

"You undermined the opportunity and option for honest politicians to do a good job."

The judge rejected Mr. Cunningham's request to delay his arrival in prison so he could visit his 91-year-old mother, saying Mr. Cunningham had had months to say his goodbyes.

Judge Burns, in recognition of what Mr. Cunningham's lawyers have described as his failing health, recommended sending him first to a prison medical center for evaluation. He also voiced admiration for Mr. Cunningham's war heroism.

Mr. Cunningham's lawyers had asked the judge for a six-year sentence, citing his military service and what they called health so failing that he may have seven years to live. Prosecutors urged the judge to abide by the 10-year sentence that Mr. Cunningham had agreed to after he pleaded guilty in November and resigned from Congress. Judge Burns noted that the sentence could be reduced by 15 months if Mr. Cunningham behaved well in prison.

Prosecutors said they might also seek a reduction if they are satisfied that he was cooperating with their investigation.

Mr. Cunningham was ordered to pay $1,804,031.50 in restitution for back taxes, penalties and interest owed to the government and was ordered to forfeit an additional $1,851,508, based on cash he received in his crimes.

The extent of corruption stunned his constituents and Republican colleagues on Capitol Hill and, along with the scandal centering on the lobbyist Jack Abramoff, sparked calls to change lobbying rules. The two investigations and others involving lawmakers and senior aides have emerged as major election themes.

Given Mr. Cunningham's focus on funneling federal money to specific projects in exchange for lobbyists' payoffs, his case put particular scrutiny on "earmarking," using measures to direct money to favored projects.

Proposals are circulating in the House and Senate to require more disclosure of the projects and their sponsors and to open opportunities to strip the earmarks slipped into bills at the last minute.

In the weeks leading up to the sentencing, sharper details of Mr. Cunningham's crimes emerged. In court papers, the government said he had behaved like an old ward boss, sketching out a "bribe menu" on a note card with the Congressional seal. One column offered $16 million in contracts in exchange for the title to a boat the contractor had bought for $140,000. The card further detailed how much more contract work could be bought for every additional $50,000 paid to Mr. Cunningham.

The papers document lavish travel on chartered jets paid by contractors with catered meals of lobster, wine and "other extravagances." Bribers put him up at top-of-the-line resorts like the Royal Hawaiian on Oahu, Hawaii and in the Greenbriar Resort in West Virginia.

Mr. Cunningham, the government said, "bullied and hectored" officials standing in his way and tampered with witnesses to have them play down or distort his misdeeds.

The principal co-conspirator in the case, Mitchell Wade, a military contractor who is the founder and former president of MZM Inc. in Washington, pleaded guilty last week in federal court to several charges, including giving Mr. Cunningham $1 million in bribes.

Mr. Cunningham's lawyers in court filings, including a psychiatric report, portrayed his life as disintegrating, saying ailments had left him with perhaps seven years to live.

The psychiatric report, by Dr. Saul J. Faerstein of Beverly Hills, Calif., said Mr. Cunningham suffered depression and suicidal thoughts, in addition to a history of prostate cancer and other ailments.

Searching for an explanation for Mr. Cunningham's conduct, Dr. Faerstein said: "Society needs heroes and wants them to be superheroes. The normal sense of mortality is suppressed in order to fulfill this role."

After the sentencing, two marshals approached Mr. Cunningham and escorted him without handcuffs from the courtroom, one of them guiding him by the waist, patting him on the back and whispering in his ear. Mr. Cunningham will spend perhaps a week or so in a jail across the street before moving to prison, said an assistant United States attorney, Phillip L. B. Halpern, who helped prosecute the case.

On March 23, the government plans to auction some of the antiques that Mr. Cunningham forfeited after pleading guilty, including French armoires, candlesticks, nightstands and a glass buffet.

    Ex-Congressman Gets 8-Year Term in Bribery Case, NYT, 4.3.2006, http://www.nytimes.com/2006/03/04/politics/04cunningham.html?hp&ex=1141534800&en=ccd9daf48307fc31&ei=5094&partner=homepage

 

 

 

 

 

Suit Accuses a Police Chief of Blocking CPR

 

March 3, 2006
The New York Times
By ADAM LIPTAK

 

Billy Snead was furiously trying to save the life of a friend having a heart attack on a West Virginia roadside in June when the police chief arrived. The chief, Mr. Snead recalled yesterday, ordered him to stop.

The chief, Robert K. Bowman of the small town of Welch, told Mr. Snead that his friend, red-faced and gasping for breath, had the virus that causes AIDS, according to a lawsuit filed yesterday. Chief Bowman grabbed Mr. Snead's shoulder, the suit says, pulling him away from his friend, Claude Green Jr.

Mr. Snead resisted, saying he was having success. Trained in cardiopulmonary resuscitation, Mr. Snead tried to continue pressing and then pounding on Mr. Green's chest.

"Every time I'd do it, he'd take a breath," Mr. Snead said of Mr. Green yesterday.

But the chief was adamant, Mr. Snead said. "He just come over and told me to get off of him," Mr. Snead said.

Mr. Green, who was 43, died at Welch Community Hospital less than an hour later. Chief Bowman, the suit said, did nothing to help Mr. Green but did tell ambulance workers and hospital personnel that Mr. Green was positive for H.I.V.

As it happened, the suit says, that was false. Mr. Green was gay, but he did not have the virus, according to the suit, filed in federal court in Bluefield, W.Va.

In the suit, Mr. Green's estate, represented by the American Civil Liberties Union, accused Chief Bowman and the town of Welch of violating Mr. Green's civil rights and causing his death.

The Associated Press quoted Chief Bowman as calling the accusations lies. He said that he called an ambulance and that Mr. Green was taken to the hospital in "no more than nine minutes."

"No one refused him CPR as his sister and mom are saying," The A.P. quoted the chief as saying. "They can do what they want, but if they're saying I refused him CPR, that is no way true."

Mr. Snead was a passenger in Mr. Green's truck in the early afternoon on June 21, 2005, when Mr. Green stiffened, turned red and veered off the road. Mr. Snead ran to the driver's side, checked Mr. Green's mouth for obstructions and performed chest compressions.

Medical experts said Mr. Snead would not have been at risk had Mr. Green been infected with H.I.V.

"A finger sweep of the mouth, so long as the skin on the finger is intact, and performing chest compressions poses no risk for transmission of H.I.V.," said Dr. Sarah J. Schlesinger, a research associate professor at Rockefeller University and a research scientist at the Aaron Diamond AIDS Research Center.

Mr. Snead, 33, said Mr. Green, who was a caretaker for rental properties owned by his mother, Helen Green, was "a good old fellow, good for everyone around him." He added that he was not sure whether the chief's actions had made a difference.

"I don't know if he'd have made it or not," Mr. Snead said of Mr. Green. "I'm not a doctor. But at least he would have had a fighting chance."

    Suit Accuses a Police Chief of Blocking CPR, NYT, 3.3.2006, http://www.nytimes.com/2006/03/03/national/03cpr.html

 

 

 

 

 

Enron Figures Tell How Results Were Manipulated

 

February 28, 2006
The New York Times
By ALEXEI BARRIONUEVO

 

HOUSTON, Feb. 27 — Two minor figures in the Enron story added on Monday to testimony that the company had padded earnings and shifted hundreds of millions in losses from one division to another to disguise problems that might have concerned investors.

The former chief accountant of Enron's wholesale energy-trading unit, Wesley H. Colwell, testified that in 2000, the company dipped into reserve accounts set up for problem contracts to illegally pad earnings. And Wanda Curry, a former internal accountant, said she had led a project that uncovered problems with Enron Energy Services, the retail energy unit — problems that were covered up in part, she said, by the transfer of more than $500 million in losses to the wholesale energy unit.

Their testimony could be important in prosecution efforts to show that Jeffrey K. Skilling, a former Enron chief executive, knowingly directed manipulations of Enron earnings and financial results and then lied about Enron's performance.

Mr. Skilling is on trial in Federal District Court, along with the founder of Enron, Kenneth L. Lay. Both men are accused of conspiring to defraud Enron investors and face the possibility of spending the rest of their lives behind bars if convicted.

Testifying in the trial's fifth week, Mr. Colwell said he manipulated earnings on two occasions after receiving directions from Enron corporate officers that they wanted to beat analysts' estimates for each quarter. In both cases, he said, he dipped into a $70 million reserve that had been set aside for a contract settlement with a utility. Mr. Colwell and previous witnesses have testified that it is illegal to dip into reserves to achieve earnings targets.

Mr. Colwell has admitted manipulating earnings and has been fined $500,000 by the Securities and Exchange Commission. He has an agreement with the Justice Department that requires him to testify to avoid criminal prosecution.

He is the fourth witness who has agreed to testify under a cooperation agreement. Three previous witnesses pleaded guilty to crimes related to Enron.

Mr. Colwell said he first manipulated earnings because the company wanted to beat Wall Street estimates by 2 cents a share. In an e-mail message to David W. Delainey, the wholesale unit's chief executive, Mr. Colwell wrote that Richard A. Causey, the company's chief accounting officer, had spoken to Mr. Skilling "and that was his preference." Mr. Colwell said he was twice asked in July 2000 to come up with $7 million for the second-quarter earnings target.

He said the results were "backward engineered," and that the company's outside accounting firm, Arthur Andersen, was never told that Enron was "managing to an earnings number."

He said he perceived the order to improve earnings for the second quarter as coming from Mr. Skilling. Under cross-examination, however, he said that no one, including Mr. Skilling and Mr. Lay, had specifically directed him to use reserve accounts to increase profits.

Mr. Colwell also said the wholesale unit, which had far exceeded its profit goals, delayed stating its fourth-quarter 2000 results until senior management told it how much profit to report. Mr. Colwell said he refused to continue the practice after the fourth quarter of 2000.

Also on Monday, Ms. Curry, the former Enron internal accountant and a former chief accountant, described a special investigation she led into retail energy contracts that Mr. Causey became concerned about in 2000. Ms. Curry, who has not pleaded guilty to any crime, said she was shocked to discover that hundreds of checks from Enron retail customers, probably worth millions of dollars, had been found under the desk of a trader in the retail unit.

Ms. Curry, who previously held Mr. Colwell's job, said she thought she had been ousted from that position because she was told by J. Clifford Baxter, then an Enron vice chairman, that she "was not capable of making aggressive accounting decisions." She was then reassigned to the project in the retail unit, where her team determined that the 13 largest trading contracts in the unit were overvalued by $250 million.

The retail evaluation was being prepared for Mr. Delainey and another executive, who ultimately presented Ms. Curry's findings to Mr. Skilling, Ms. Curry testified.

As part of her inquiry, Ms. Curry and her team also discovered that the retail unit was owed $511 million by two California utilities on the verge of declaring bankruptcy.

She also testified that she did not see any legitimate reason for the transfer of retail trading operations from the retail unit to the wholesale unit in early 2001 other than to disguise trading losses of more than $500 million in the retail unit.

On cross-examination, Ronald Woods, a lawyer for Mr. Skilling, showed a tape of a previous deposition by Ms. Curry in 2004 where she said efficiency was the reason for the revamping of the units. But a combative Ms. Curry insisted she had been referring to the transfer of wholesale trading functions from retail to the wholesale units, not to the shifting of retail trading functions.

Defense lawyers have said the shift in trading losses was done as part of a revamping to take advantage of superior capabilities for trading in the wholesale unit.

 

Judge Clears Way for Retrial

HOUSTON, Feb. 27 (Bloomberg News) — The retrial of two former executives of Enron's Internet unit can begin while the case against Kenneth L. Lay and Jeffrey K. Skilling continues in an adjacent courtroom, a federal judge ruled Monday.

The former accountant of Enron Broadband Services, Michael Krautz, 37, and the former finance vice president, Kevin Howard, 43, were tried in July on conspiracy and fraud charges. After 12 weeks of testimony and four days of deliberations, jurors in Houston deadlocked, and no verdicts were returned.

    Enron Figures Tell How Results Were Manipulated, NYT, 28.2.2006, http://www.nytimes.com/2006/02/28/business/businessspecial3/28enron.html

 

 

 

 

 

U.S. Is Settling Detainee's Suit in 9/11 Sweep

 

February 28, 2006
The New York Times
By NINA BERNSTEIN

 

The federal government has agreed to pay $300,000 to settle a lawsuit brought by an Egyptian who was among dozens of Muslim men swept up in the New York area after 9/11, held for months in a federal detention center in Brooklyn and deported after being cleared of links to terrorism.

The settlement, filed in federal court late yesterday, is the first the government has made in a number of lawsuits charging that noncitizens were abused and their constitutional rights violated in detentions after the terror attacks.

It removes one of two plaintiffs from a case in which a federal judge ruled last fall that former Attorney General John Ashcroft, the director of the Federal Bureau of Investigation and other top government officials must answer questions under oath. Government lawyers filed an appeal of that ruling on Friday.

In the settlement agreement, which requires approval by a federal judge in Brooklyn, lawyers for the government said that the officials were not admitting any liability or fault. In court papers they have said that the 9/11 attacks created "special factors," including the need to deter future terrorism, that outweighed the plaintiffs' right to sue.

"A settlement like this is not a precedent, but it's a form of accountability," said Gerald L. Neuman, a law professor at Columbia University who is an expert in human rights law and was not involved in the case. "When the government finds it necessary to settle, that changes the government's incentives. It doesn't mean the government will settle future cases that it makes different calculations about," like another lawsuit, brought as a class action on behalf of hundreds of detainees, that is pending before the same judge.

A spokesman for the Justice Department said officials would not comment on the agreement. But lawyers who represent both the Egyptian, Ehab Elmaghraby, who used to run a restaurant near Times Square, and the second plaintiff, a Pakistani who is still pursuing the lawsuit, described the outcome as significant.

"This is a substantial settlement and shows for the first time that the government can be held accountable for the abuses that have occurred in Abu Ghraib, Guantαnamo Bay and in prisons right here in the United States," said one of the lawyers, Alexander A. Reinert of Koob & Magoolaghan.

The lawsuit accuses Mr. Ashcroft and the F.B.I. director, Robert S. Mueller III, of personally conspiring to violate the rights of Muslim immigrant detainees on the basis of their race, religion and national origin, and names a score of other defendants, including Bureau of Prison officials and guards at the Metropolitan Detention Center in Brooklyn.

A 2003 report by the Justice Department's inspector general found widespread abuse of the noncitizen detainees at the Brooklyn center after 9/11, and in recent months, 10 of the center's guards and supervisors have been disciplined.

Mr. Elmaghraby, who spent nearly a year in detention, and the Pakistani man, Javaid Iqbal, held for nine months, charged that while shackled they were kicked and punched until they bled. Their lawsuit said they were cursed as terrorists and subjected to multiple unnecessary body-cavity searches, including one in which correction officers inserted a flashlight into Mr. Elmaghraby's rectum, making him bleed.

In a telephone interview from his home in Alexandria, Egypt, Mr. Elmaghraby, 38, said he had reluctantly decided to settle because he is ill, in debt and about to have surgery for a thyroid ailment aggravated by his treatment in the detention center.

"I wish I come to New York, to stay in the court face to face with these people," he said in imperfect English, adding that he had always expected the courts to uphold his claim. "I lived 13 years in New York, I see a lot of big cases on TV. I think the judges is fair."

The government had argued that the lawsuits should be dismissed without testimony because the extraordinary circumstances of the terror attacks justified extraordinary measures to confine noncitizens who fell under suspicion, and because top officials need governmental immunity to combat future threats to national security without fear of being sued.

The federal judge, John Gleeson of the United States District Court for the Eastern District of New York, disagreed, writing in his decision last September, "Our nation's unique and complex law enforcement and security challenges in the wake of the Sept. 11, 2001, attacks do not warrant the elimination of remedies for the constitutional violations alleged here."

In all, 762 noncitizens were arrested in the weeks after 9/11, mostly on immigration violations, according to government records. Mr. Elmaghraby and Mr. Iqbal were among 184 identified as being "of high interest" to investigators and held in maximum-security conditions, in Brooklyn and elsewhere, until the F.B.I. cleared them of terrorist links. Virtually all were Muslims or from Arab countries.

That in itself is not evidence of discrimination, government lawyers wrote in the brief they filed on Friday with the Appellate Division, Second Department, because "the Al Qaeda terrorists who perpetrated the Sept. 11 attacks were Muslims from certain Arab countries" who "viewed themselves as conducting a religious war."

"There were no clear judicial precedents in this extraordinary context," the appeal brief said, calling the policy of holding people until they could be cleared "a bona fide response to a national catastrophe."

Unlike the detainees covered by the class-action lawsuit, who were held on immigration violations alone, Mr. Elmaghraby and Mr. Iqbal eventually pleaded guilty to minor federal criminal charges unrelated to terrorism: Mr. Elmaghraby to credit card fraud, Mr. Iqbal to having false papers and bogus checks. But they maintain that they did so only to escape the abuse. They were deported in 2003 after serving prison terms.

Mr. Iqbal was one of several detainees who returned to New York this year to give depositions in their lawsuits under conditions of extraordinary security, including the requirement that they be in constant custody of federal marshals and not call anybody. Mr. Elmaghraby did not come because of his ill health and because the settlement was close, said one of his lawyers, Haeyoung Yoon of the Urban Justice Center.

"His circumstances made it extremely difficult for him to continue," Ms. Yoon said. "But I also feel this is really the beginning of justice for what happened in New York and the United States after Sept. 11, the mass arrests, detention and basically disappearance of an entire community."

Mr. Elmaghraby, who had a weekend flea market stand at Aqueduct Raceway in Queens, was picked up on Sept. 30, 2001, in his apartment in Maspeth, Queens, when federal agents were investigating his landlord, apparently because years earlier the landlord, also a Muslim, had applied for pilot training. Mr. Elmaghraby says his wife, an American citizen, left him after being threatened with arrest by an F.B.I. agent when she arrived at his first court hearing.

Mr. Iqbal was arrested in his Long Island apartment on Nov. 2 by agents who were apparently following a tip about false identification cards. In his apartment they found a Time magazine showing the World Trade Center towers in flames and paperwork showing that he had been in Lower Manhattan on Sept. 11, picking up a work permit from immigration services.

The inspector general's report said that little effort was made to distinguish between legitimate terrorism suspects and people picked up by chance, and that clearances took months, not days, because they were a low priority. Among the abuses described in the report — many of them caught on prison videotape — were beatings, sexual humiliations and illegal recording of lawyer-client conversations.

After the report was released, Mr. Ashcroft said he made "no apologies" for finding every legal way to protect the public. Still, officials pledged to improve the system and punish abuses.

Traci L. Billingsley, a spokeswoman for the Federal Bureau of Prisons, said that its own investigation began in April 2004, after federal officials declined to prosecute.

She would not identify the 10 employees disciplined, but said that two had been fired and two demoted, and that the others had received suspensions ranging from 2 to 30 days. She listed the offenses as "lack of candor, unprofessional conduct, misuse of supervisory authority, conduct unbecoming, inattention to duty, failure to exercise supervisory responsibilities, excessive use of force, and physical and/or verbal abuse."

Because of the secrecy surrounding the cases, however, the taint of suspicion has been almost impossible for former detainees to dispel, their lawyers said. In one of the court hearings leading up to the return of the former detainees for depositions, for example, the federal magistrate asked what made them different from anyone else suing the government, "other than their ethnicity."

Ernesto H. Molina Jr., a Justice Department lawyer representing Mr. Ashcroft, replied, "That they came under the umbrella of a terrorist investigation, your honor."

    U.S. Is Settling Detainee's Suit in 9/11 Sweep, NYT, 28.2.2006, http://www.nytimes.com/2006/02/28/nyregion/28detain.html?hp&ex=1141102800&en=7ec5f7a8aa796941&ei=5094&partner=homepage

 

 

 

 

 

Libby's Lawyers Say Prosecutor Acted Unconstitutionally

 

February 24, 2006
By THE ASSOCIATED PRESS
The New York Times

 

WASHINGTON, Feb. 23 (AP) — Lawyers for Vice President Dick Cheney's former top aide asked a federal judge on Thursday to dismiss his indictment, saying the special prosecutor in the C.I.A. leak case lacked the authority to bring the charges.

Lawyers for the former aide, I. Lewis Libby Jr., said his indictment violated the Constitution because the special counsel, Patrick J. Fitzgerald, was not appointed by the president with the consent of the Senate. They added that the appointment violated federal law because the attorney general did not supervise the investigation. Only Congress, the lawyers said, can approve such an arrangement.

"Those constitutional and statutory provisions have been violated in this case," the lawyers wrote.

Mr. Fitzgerald was appointed in December 2003 after Attorney General John Ashcroft recused himself from the investigation because of his close ties to the White House. James B. Comey, who was then deputy attorney general, selected Mr. Fitzgerald to investigate the leak of the name of Valerie Wilson, the Central Intelligence Agency operative.

Mr. Libby, who resigned as Mr. Cheney's chief of staff after being indicted, is charged with lying about how he learned Ms. Wilson's identity and when he told reporters about it. He is charged with five counts of perjury, false statements and obstruction of justice.

In giving Mr. Fitzgerald sweeping investigative powers, Mr. Comey exempted him from rules that apply to all United States attorneys. Mr. Fitzgerald did not have to seek approval from senior Justice Department officials to grant immunity or subpoena reporters and news organizations. Nor did he have to advise senior Justice Department officials before seeking Mr. Libby's indictment.

Defense lawyers and Mr. Fitzgerald are to appear in Federal District Court here on Friday to argue defense requests for classified records and evidence gathered by the prosecution about reporters who learned about Ms. Wilson from officials other than Mr. Libby.

The trial is scheduled to begin in January.

    Libby's Lawyers Say Prosecutor Acted Unconstitutionally, NYT, 24.2.2006, http://www.nytimes.com/2006/02/24/politics/24libby.html

 

 

 

 

 

Judge orders U.S. to release Guantanamo detainee data

 

Posted 2/23/2006 8:45 PM
USA Today

 

SAN JUAN, Puerto Rico (AP) — A federal judge ordered the Pentagon on Thursday to release the identities of hundreds of detainees at Guantanamo Bay to The Associated Press, a move which would force the government to break its secrecy and reveal the most comprehensive list yet of those who have been imprisoned there.

 

Some of the hundreds of detainees in the war on terror being held at the U.S. military base in Guantanamo Bay, Cuba, have been held as long as four years. Only a handful have been officially identified.

U.S. District Judge Jed S. Rakoff in New York ordered the Defense Department to release uncensored transcripts of detainee hearings, which contain the names of detainees in custody and those who have been held and later released. Previously released documents have had identities and other details blacked out.

The judge ordered the government to hand over the documents by March 3 after the Defense Department said Wednesday it would not appeal his earlier ruling in the lawsuit filed by the AP.

On Jan. 23, Rakoff ordered the military to turn over uncensored copies of transcripts and other documents from 317 military hearings for detainees at the prison camp. There were another 241 detainees who refused to participate in the Combatant Status Review Tribunals and the Defense Department said no transcripts exist of those hearings.

U.S. authorities now hold about 490 prisoners at Guantanamo on suspicion of links to al-Qaeda or the Taliban. Most have been held without charges since the detention center opened four years ago, prompting complaints from human rights groups and others.

"AP has been fighting for this information since the fall of 2004," said Dave Tomlin, assistant general counsel for the news organization. "We're grateful to have a decision at last that keeping prisoner identities secret is against the public policy and the law of this country."

The military has never officially released the names of any detainees except the 10 who have been charged.

Most of those that are known emerged from the approximately 400 civil suits filed on behalf of prisoners by lawyers who got their names from family or other detainees, said Michael Ratner, president of the Center for Constitutional Rights in New York, which represents about 200 detainees.

"They have been very resistant to releasing the names," Ratner said. "There are still people there who don't have a lawyer and we don't know who they are. They have disappeared."

The Defense Department earlier released transcripts after the AP filed suit under the Freedom of Information Act, but the names and other details of detainees were blacked out.

The Defense Department said it would obey the judge's order.

"DOD will be complying with the judge's decision in this matter," said Navy Lt. Cmdr. Jeffrey Gordon, a Pentagon spokesman.

Law experts said the case has wide-ranging implications.

"The government has tried to maintain Guantanamo as a black hole since they opened it," said Jonathan Hafetz of the New York University School of Law. "This is bringing it within the mainstream of the justice system and says we're not going to have secret detentions at Guantanamo."

In his ruling last month, Rakoff rejected government arguments that releasing the detainees' names from transcripts should be kept secret to protect their privacy and their families, friends and associates from embarrassment and retaliation.

The judge had given the government a month to decide whether to appeal and the U.S. Solicitor General decided not to pursue the case further, said Megan Gaffney, a spokeswoman for the U.S. Attorney in the Southern District of New York.

The AP is awaiting a decision from the judge on whether the government must release the unredacted transcripts from a second round of hearings, the annual Administrative Review Board — panels that decide whether detainees are still considered a threat to the United States.

    Judge orders U.S. to release Guantanamo detainee data, UT, 23.2.2006, http://www.usatoday.com/news/washington/2006-02-23-guantanamo-suit_x.htm

 

 

 

 

 

Enron Data Modified, Jury Is Told

 

February 22, 2006
The New York Times
By ALEXEI BARRIONUEVO

 

HOUSTON, Feb. 21 — The former chief executive of Enron, Kenneth L. Lay, took an active role in preparing misleading and often conflicting statements about financial conditions at the company, a former investor relations manager and board secretary testified on Tuesday.

In the most damaging testimony so far that Mr. Lay, Enron's founder, misled employees and investors about Enron finances, the former board secretary, Paula H. Rieker, provided an insider's perspective on Mr. Lay's actions in the five months after he took over as chief executive in August 2001. At the time, Ms. Rieker, 51, was Enron's manager for investor relations and the corporate secretary. As corporate secretary, she maintained board meeting minutes and answered to Mr. Lay.

Ms. Rieker, testifying in the fourth week of the trial in Federal District Court here, said that another former chief executive, Jeffrey K. Skilling, ordered last-minute changes to at least two quarterly earnings reports so that Enron could meet or beat analysts' expectations. She also said that Mr. Skilling directed her to misrepresent in a news release the source of most of the revenue at the struggling broadband unit.

Mr. Lay, 63, and Mr. Skilling, 52, are accused of conspiring to defraud Enron, the former energy-trading giant that filed for bankruptcy in December 2001. Mr. Skilling, who abruptly quit the company in August 2001, is charged with conspiracy, fraud and insider trading. Mr. Lay is accused of fraud and conspiracy.

Mr. Lay was chief executive for most of the 16 years before Enron collapsed into bankruptcy proceedings — except for a six-month stretch in early 2001 when Mr. Skilling held the post. Despite his position at the top, Mr. Lay has so far been a secondary figure in the criminal case.

Ms. Rieker's testimony supported and in some cases strengthened that of Mark E. Koenig, the former head of investor relations and her boss, who said Mr. Lay and Mr. Skilling made statements intended to mislead Wall Street about the true condition of Enron's finances.

Ms. Rieker is among 16 former Enron executives, including Mr. Koenig, who have pleaded guilty to charges and are cooperating with prosecutors. She pleaded guilty in May 2004 to insider trading for selling stock based on information that Enron's broadband unit lost more money than anticipated.

A prosecutor, John Hueston, finished his direct questioning of Ms. Rieker just before day's end.

Dressed in a conservative dark purple suit, Ms. Rieker clearly recalled details of meetings she had with Mr. Lay and Mr. Skilling and referred to handwritten notes she took, and to notes Mr. Lay wrote on scripts for conference calls with analysts.

She gave her testimony in clear and unhurried language, often turning directly to the jurors when breaking down complex business concepts.

Jurors were especially attentive Tuesday, with most scribbling furiously as Ms. Rieker talked about the final days before Enron's collapse.

Ms. Rieker, who joined Enron in 1990, clarified testimony from Mr. Koenig that as far back as January 2000, Mr. Skilling had directed last-minute changes to earnings results to put them in line with analysts' expectations.

When the consensus expectation of analysts suddenly rose by 1 cent a share, to 31 cents, she said she "panicked." But a day later, when she was told that Enron would report 31 cents a share, Mr. Koenig explained that Mr. Skilling and the chief accounting officer, Richard A. Causey, had decided that the numbers should be changed. She modified the news release that went out that day.

Then in June 2000, with Enron prepared to meet analysts' earnings expectations of 32 cents a share, Ms. Rieker recalled that Mr. Koenig came into her office and said he had "just come back from a meeting with Skilling where he had said he wanted to beat earnings by 2 or 3 cents."

Four days later, Enron reported 34 cents a share. Analysts were never told about the sudden change.

In preparation for the analysts' meeting that quarter, Ms. Rieker had written in a draft news release that revenues of more than $150 million in Enron's broadband unit included the sale of unused fiber optic cable, or so-called dark fiber.

"Mr. Skilling asked me if we had to put that language in the press release," she said. "I said yes, because virtually all of the revenues came from the sale of dark fiber."

Nevertheless, Ms. Rieker testified that the point was not explained in the news release and Mr. Skilling later lied about it to analysts, claiming about $50 million, or a third, of the revenue came from the fiber sales.

Ms. Rieker also said that Mr. Lay told the company's directors in October 2001 that Enron's highly promoted retail energy unit had undergone "lots of retooling" to address chaotic billing and poor cash flow. But he neglected to disclose those issues days later to Wall Street, while praising the division's reported profitability.

When investor concerns began mounting about financing vehicles like Raptors and LJM, Mr. Lay met with directors on Oct. 8, 2001, and told them that Raptors "was the second-most-contentious vehicle after LJM."

Eight days later, on a conference call with analysts, Mr. Lay attributed a $1.2 billion reduction in shareholder equity in part to the unwinding of an "equity vehicle." The $1.2 billion reduction — which was later discovered to be an accounting error — was not included in the announcement for that day's earnings report. A day later, on Oct. 17, Ms. Rieker testified, Mr. Lay pleaded ignorance when questioned by an analyst about which entity had been unwound.

"I am not sure it even had a name," Mr. Lay said, though he knew it was Raptors.

As the crisis heated up, Mr. Lay met with Enron's managing directors on Oct. 22. The angst about Enron's mounting problems, in particular about participation of the chief financial officer, Andrew S. Fastow, in the LJM partnership, spilled out, Ms. Rieker said. "It was a remarkable meeting because of how angry people were," she testified.

Nevertheless, the next day, at an all-employee meeting, Mr. Lay said that the management team had emerged "unified" from the three-hour meeting the day before.

That same day, she said, she met with Mr. Lay before the analysts' call and suggested it was important to divulge stock price "triggers" associated with the Raptors that could force credit-rating agencies to downgrade the company if the stock price fell below a certain price.

"What was his reaction?" asked Mr. Hueston, the prosecutor.

"Acknowledgment and no reaction," Ms. Rieker said. "I left the room because I felt really awkward."

During this period, Mr. Lay gave varying versions of Enron's cash-flow problems, depending on the audience, Ms. Rieker said. On Oct. 22, the board discussed the problems. A day later Mr. Lay told employees that Enron's liquidity was "strong." Then on Oct. 24, he told the board that liquidity was "tight."

Meanwhile, Mr. Lay began drawing down his personal line of credit with Enron, exchanging some company stock for cash. By Oct. 26, the day Enron employees had their pensions locked out, he had drawn his line down by $7 million in three days. A day earlier the company was forced to draw down its credit lines by $3 billion.

In February 2002, two months after Enron filed for bankruptcy, Ms. Rieker learned at a compensation meeting that Mr. Lay had been selling shares back to the company for cash in excess of $70 million.

Board members, she said, "were outraged." She recalled one director, John H. Duncan, saying that Mr. Lay was using Enron like an A.T.M.

At that point in the testimony, the judge interrupted to ask a sniffling juror if she needed "a Kleenex." It was unclear why she did.

    Enron Data Modified, Jury Is Told, NYT, 22.2.2006, http://www.nytimes.com/2006/02/22/business/businessspecial3/22enron.html

 

 

 

 

 

3 Ohio men indicted on charges of terror planning

 

Posted 2/21/2006 12:03 PM Updated 2/21/2006 7:08 PM
USA Today

 

CLEVELAND (AP) — A federal grand jury indicted three Ohio men on terrorism charges alleging they planned attacks to kill U.S. and coalition military personnel in Iraq and other countries.

One of the men, a citizen of both the U.S. and Jordan, is also accused of threatening to kill or injure President Bush, according to the indictment released Tuesday. (Related video: More on the indictments)

All three had lived in Toledo within the last year and were arrested over the weekend, Assistant U.S. Attorney David Bauer said.

"This case stands as a reminder of the need for continued vigilance in the war on terrorism," Attorney General Alberto Gonzales said at a news conference in Washington. (Related item: U.S. v. Amawi, et al)

The man charged with threatening the president, Mohammad Zaki Amawi, 26, pleaded not guilty in Cleveland U.S. District Court. The other two were being arraigned in federal court in Toledo later Tuesday.

The indictment does not specify if any attacks were imminent but says the suspects recruited others as early as November 2004 to train for a violent holy war against the United States and its allies in Iraq.

Two of the men discussed plans to practice setting off explosives on July 4, 2005, so that the bombs would not be noticed, the indictment alleges. It's not clear if the suspects went through with those plans.

The indictment says the group also traveled together to a shooting range to practice shooting guns and studied how to make explosives.

It also alleges that at least one of the men researched and solicited funding for the training, including getting unspecified government grants and private sponsors. The indictment does not say which government or name any potential sponsors.

Amawi is accused of twice threatening in conversations to kill or injure Bush. He also is charged with distributing information about the making and use of an explosive device.

The others are Marwan Othman El-Hindi, 42, a U.S. citizen born in Jordan; and Wassim I. Mazloum, 24, who came to the U.S. from Lebanon in 2000,

Mazloum operated a car business in Toledo with his brother. The indictment accuses him of offering to use his dealership as a cover for traveling to and from Iraq so that he could learn how to build small explosives using household materials.

El-Hindi is accused of trying to get a U.S. citizen with a military background to travel with him in November 2004 to the Middle East as part of the suspects' plan to establish a terrorism training center. The indictment does not identify the military person, referring to him or her throughout the document as "the trainer."

The Department of Justice said the trainer was working on behalf of the government and was cooperating from the beginning of the investigation.

All three men are charged with conspiracy to kill, kidnap, maim, or injure people or damage property in a foreign country, the most serious count that carries a maximum penalty of life in prison if prosecutors prove intent to kill. The three were also charged with conspiracy to kill U.S. nationals, and harboring or concealing terrorists.

Amawi also is charged with unlawfully importing, manufacturing, distributing or storing explosive materials and with making threats against the president.

    3 Ohio men indicted on charges of terror planning, UT, 21.2.2006, http://www.usatoday.com/news/nation/2006-02-21-indicted_x.htm

 

 

 

 

 

Prosecutor Says Libby Seeks to Thwart Criminal Case

 

February 18, 2006
The New York Times
By NEIL A. LEWIS

 

WASHINGTON, Feb. 17 — A federal prosecutor has said I. Lewis Libby Jr., former chief of staff to Vice President Dick Cheney, is trying to sabotage the criminal case against him by insisting through his lawyers that he be given sensitive government documents for his defense.

In a court filing on Thursday night, the prosecutor said requests by Mr. Libby's lawyers for documents, including the daily intelligence briefs given to the president for nearly a year, were "a transparent effort at 'graymail.' "

The prosecutor, Patrick J. Fitzgerald, said the requests for a large amount of sensitive information beyond what they had been given was unjustified. Mr. Fitzgerald told the federal judge hearing the case that defendants like Mr. Libby had an incentive to derail their trials by asking for sensitive documents that the government might not want discussed openly.

Graymail is the practice of discouraging a prosecution from proceeding by contending that a defendant may need to disclose classified or sensitive information as part of a full defense. Such an approach can force the government to choose between dropping the prosecution or allowing the information to be disclosed at a trial.

Before 1980, some officials escaped prosecution by threatening to disclose unspecified secrets in open court. Congress enacted the Classified Information Procedures Act in 1980 to ensure that the government was not surprised by any disclosures at trial.

If the defense intends to use classified information, it has to inform the government, and then the two sides argue before a judge in secret on whether the information is needed for full defense. If a judge decides that the defendant is entitled to the information, the government has to decide whether to accept the likelihood that the information may be disclosed in a trial or drop the prosecution.

John D. Cline, a lawyer in San Francisco and an authority on the classified-procedures law who is representing Mr. Libby, challenged the accusation that the defense was engaging in graymail. Mr. Cline said the 1980 law made graymail impossible because the government knew exactly what information the defense was seeking, and a judge must rule on whether it is necessary to the defense case.

"We are working lawfully and properly through the C.I.P.A. procedures to obtain documents essential to Mr. Libby's defense," he said. "All we want is a limited number of key documents that Mr. Libby either wrote or reviewed during the most critical period in this case."

Mr. Libby is charged with five felony counts, accusing him of lying to investigators about his role in the disclosure of the identity of a Central Intelligence Agency operative, Valerie Wilson. His lawyers have said they intend to mount a defense built on the idea that he was dealing with issues far more momentous than the disclosure of Ms. Wilson's identity to reporters. To that end, they have asked Mr. Fitzgerald to turn over many documents from the vice president's office and the C.I.A.

Mr. Libby's lawyers have asked Mr. Fitzgerald to give them the President's Daily Brief for 277 days beginning in May 2003. They have said those documents "are material to establishing that any misstatements he may have made were the result of confusion, mistake and faulty memory resulting from his immersion in other, more significant matters, rather than deliberate lies."

Mr. Fitzgerald called the request "breathtaking" and noted that the daily brief was "an extraordinarily sensitive document." He said the disclosure of part of the Aug. 6, 2001, daily brief to the Sept. 11 commission was the sole instance of a daily brief's being publicly disclosed.

In addition, the lawyers have asked Mr. Fitzgerald to provide information that he obtained from reporters about other officials who might have spoken to them about Ms. Wilson.

    Prosecutor Says Libby Seeks to Thwart Criminal Case, NYT, 18.2.2006, http://www.nytimes.com/2006/02/18/politics/18libby.html

 

 

 

 

 

Federal Vioxx jury says Merck not liable in death

 

Fri Feb 17, 2006 8:19 PM ET
Reuters
By Michael Depp

 

NEW ORLEANS (Reuters) - A federal jury said on Friday that drugmaker Merck Co. Inc. was not liable in the 2001 death of a Florida man who used the recalled painkiller Vioxx.

The eight-person jury's verdict was the first in a federal court and the third out of more than 9,000 cases filed against Merck in U.S. and state courts claiming the company hid the once-best-selling painkiller's health risks.

Specifically, the jury found Vioxx was not a defective product, that Merck was neither negligent in making the product nor did it fail to warn users of its risks.

Merck's share price jumped 1 percent to $36.50 in after-hours trade after closing at $36.05 Friday on the New York Stock Exchange.

Analysts said early court victories were good news for the drugmaker.

"This is certainly good for Merck. The more they win these cases early on the better off they are," said Ram Partners LP hedge fund partner Thomas Bundock, who added the fund does not own any shares of the drugmaker due to the legal hurdles facing the company.

"So far, Merck has done an admirable job of fending them off," Bundock said. "The question is: Can they continue? This is going to be a long, drawn-out process."

The case heard in the U.S. District Court for the Eastern District of Louisiana focused on the death of 53-year-old Richard "Dickie" Irvin, whose family claimed Vioxx triggered a heart attack. Irvin took Vioxx for less than a month.

Merck argued Irvin's heart attack was due to an unhealthy lifestyle that led to clogging of his arteries.

Merck General Counsel Kenneth Frazier told reporters on a conference call that the company was pleased with the jury's decision, and is gearing up for other Vioxx trials around the country.

"The jury's decision confirms there is no medical or scientific evidence showing the short-term use of Vioxx increased the risk of heart attack or contributed in any way to the death of Richard Irvin," Merck said in a statement.

Irvin's widow, Evelyn Irvin Plunkett, shook her fist and cried as she walked out of court with her attorney Andy Birchfield.

 

APPEAL POSSIBLE

Irvin's survivors may consider appealing the verdict, Birchfield said. He added that losses in the early trials did not mean the plaintiffs' cases are weak.

"Merck is taking the position that they are going to fight every one of these cases and we're going to do the same," Birchfield said. "The case only gets stronger and stronger. It paints a darker and darker picture over what Merck did."

Merck's attorney, Phillip Beck, said Friday's verdict strengthens Merck's contention that it acted appropriately and in response to scientific evidence.

"Juries can understand that the Merck people acted appropriately at all times regarding Vioxx," Beck said.

The jury's verdict capped a retrial of the case. In December a nine-member jury could not reach the needed unanimous verdict when one member said Merck was liable for Irvin's death.

Merck recalled Vioxx in September 2004, after it was shown to double heart attack and stroke risks for those who took it at least 18 months.

This case is the first of the Vioxx lawsuits to be tried in federal court. It was originally tried in Houston after Hurricane Katrina temporarily closed the federal courts in New Orleans.

Two other cases have been completed in state courts, with Merck winning one in New Jersey and losing one in Texas, where the widow of a 59-year-old Vioxx user was awarded $253 million in damages. Merck is appealing that verdict.

Analysts have said the company's legal costs to fight the lawsuits could total several billions of dollars.

(Additional reporting by Deepa Babington in Houston)

    Federal Vioxx jury says Merck not liable in death, R, 17.2.2006, http://today.reuters.com/News/newsArticle.aspx?type=topNews&storyID=2006-02-18T011905Z_01_N17268590_RTRUKOC_0_US-MERCK-VIOXX.xml

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Terror suspect Jose Padilla in an undated photo.
Padilla, who spent years in a military brig as an enemy combatant
before the government reversed course and charged him
with conspiracy to murder and aiding terrorists abroad,
was denied bail on Friday at a federal court hearing.

REUTERS/Broward County/Handout

Terror suspect Padilla denied bail in Florida
R        17.2.2006
http://today.reuters.com/news/newsArticle.aspx?type=domesticNews&storyID=
2006-02-17T184650Z_01_N17235798_RTRUKOC_0_US-SECURITY-PADILLA.xml

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Terror suspect Padilla denied bail in Florida

 

Fri Feb 17, 2006 1:47 PM ET
Reuters

 

MIAMI (Reuters) - Terror suspect Jose Padilla, who spent years in a military brig as an enemy combatant before the government reversed course and charged him with conspiracy to murder and aiding terrorists abroad, was denied bail on Friday at a federal court hearing.

U.S. District Court Judge Marcia Cooke declined to set bail for Padilla because of concerns he might flee and because of fears he posed a danger to the community, her office said.

Padilla, a former Chicago gang member with an extensive criminal history, was held as an enemy combatant in a military brig for 3 1/2 years without charge after he was arrested in May 2002 and accused of planning to detonate a radioactive "dirty bomb" or blow up apartment buildings with natural gas.

Last year the Bush administration reversed course, dropped the enemy combatant designation and charged Padilla with conspiring to murder, kidnap and maim people overseas and with providing material support to terrorist groups.

Padilla, 35, a convert to Islam who has been linked to an Osama bin Laden training camp, was placed in civilian custody and transferred to Florida, where he faces trial on September 9.

    Terror suspect Padilla denied bail in Florida, R, 17.2.2006, http://today.reuters.com/news/newsArticle.aspx?type=domesticNews&storyID=2006-02-17T184650Z_01_N17235798_RTRUKOC_0_US-SECURITY-PADILLA.xml

 

 

 

 

 

Diverging Views of Californian at Terror Trial

 

February 17, 2006
The New York Times
By RANDAL C. ARCHIBOLD

 

SACRAMENTO, Feb. 16 — A federal terrorism trial opened here on Thursday with wildly diverging views of a 23-year-old Californian who traveled to Pakistan either for terrorism training, as the government contends, or to help his ailing mother, study religion and marry, as his lawyer asserts.

The man, Hamid Hayat, is accused of supporting terrorism by attending a camp in Pakistan run by terrorists bent on jihad, or holy war, and lying about his activities there. His father, Umer Hayat, an ice cream vendor, will go on trial next week on charges of lying to federal agents about his son's plans.

Both men lived in a small, tight-knit Muslim community in Lodi, about 35 miles south of here, that has been roiled by the charges and divided over whether the men are wrongly accused or possibly the seeds of a terrorist cell. Three other men arrested in Lodi at the time of the federal investigation were charged with immigration violations and deported.

The younger Mr. Hayat, who was born in Stockton, Calif., was described in court by his lawyer, Wazhma Mojaddidi, as an aspiring truck driver searching for purpose in life and who was given to flights of fancy when it came to talking about his activities in Pakistan.

But Laura L. Ferris, an assistant United States attorney, told jurors in her opening remarks that Mr. Hayat immersed himself in extremist Muslim views and planned to carry out attacks when he returned to the United States last year after spending two years in Pakistan.

"He talked about jihad, jihad, jihad," Ms. Ferris said, as Mr. Hayat listened through an Urdu interpreter. "He talked about training camps; he talked about actual violence."

Ms. Ferris said Mr. Hayat admitted to investigators that he attended camps in 2000 and 2003. In addition, she said an F.B.I. informant recorded him describing the camps and his ultimate plans, which, prosecutors have said, included attacks on hospitals and supermarkets.

"He was, in fact, awaiting orders," Ms. Ferris said.

Mr. Hayat was arrested last June, a month after returning from Pakistan with family members.

The government plans to show satellite photographs of the camps, with a Department of Defense expert explaining their significance, Ms. Ferris said. Mr. Hayat also carried what she described as a "jihadist scrapbook" of newspaper clippings and other material associating him with the terrorists' cause.

Harry J. Sweeney, an F.B.I. agent who interviewed Mr. Hayat after he had returned to the United States, testified that Mr. Hayat said his training included firing weapons, calisthenics and jogging.

Prosecutors played part of Mr. Hayat's videotaped confession in which he said he attended camps whose purpose was to train people to kill American troops and others.

"That's what these camps are about," an agent said.

Mr. Hayat replied, "They do that, sir."

But Ms. Mojaddidi, Mr. Hayat's lawyer, said her client had made incriminating statements to investigators about attending the camps under duress and "in the spirit of cooperation." He was, she added, a "big storyteller" when talking about Pakistan.

His confession, she said, was "nothing more than words the F.B.I. agent wanted to hear" and came after hours of interrogation while Mr. Hayat was hungry, confused and suffering a headache.

She questioned the motives of an informant for the government, saying he had been paid $250,000 and had incited inflammatory comments from Mr. Hayat in their conversations.

Ms. Mojaddidi said Mr. Hayat traveled to Pakistan to help seek medical care for his mother, who was suffering from hepatitis and had not responded to treatment from American doctors. While there, she said, he attended a madrasa, or religious school, "very typical of a man of Pakistani descent."

Mr. Hayat married there last year, and photos from the wedding obtained by the government showing men firing rifles do not point to terrorism, Ms. Mojaddidi said, but a tradition that is part of a "typical wedding celebration in Pakistan."

But the root of his defense, Ms. Mojaddidi indicated, would be the government's failure to find evidence that Mr. Hayat had attended the camp, beyond what she considered his coerced admissions.

Over and over, she told jurors that "the government cannot and will not show any proof he attended" terror camps.

What is more, she said, the government allowed Mr. Hayat to return to the United States even though he was on the "no-fly" list of terror suspects.

Mr. Hayat was detained in Japan in May 2005 after his flight to the United States was diverted there when the authorities discovered he was on the plane. An F.B.I. investigator questioned him in Japan but, after consulting with agents in the United States, had him removed him from the "no-fly" list and allowed him to proceed to San Francisco.

The investigator, Lawrence J. Futa, testified on Thursday that Mr. Hayat cooperated with the questioning, seemed pleasant and, owing to his thin build, did not seem as if he had recently undergone rigorous training.

"We came to the conclusion he did not pose an immediate threat to the aircraft," Mr. Futa said.

He later suggested that the government allowed Mr. Hayat to proceed to California because it was still building a case, saying agents in the United States "did not want me to indicate we had an active investigation as much as possible."

The case has unsettled the Lodi Muslim community of about 2,000 people, some of whom have lived there for more than 60 years, said Basim Elkarra, executive director of the Sacramento Valley chapter of the Council for American-Islamic Relations.

Carolyn Marshall contributed reporting from San Francisco for this article.

    Diverging Views of Californian at Terror Trial, NYT, 17.2.2006, http://www.nytimes.com/2006/02/17/national/nationalspecial3/17trial.html

 

 

 

 

 

Jury selection begins for Moussaoui trial

 

Sun Feb 5, 2006 10:16 AM ET
Reuters
By Deborah Charles

 

WASHINGTON (Reuters) - September 11 conspirator Zacarias Moussaoui returns this week to the courtroom where a jury will determine whether he should be executed for his crimes.

In April, Moussaoui -- the only person charged in the United States in connection with the September 11 attacks -- pleaded guilty to all six counts against him.

A jury will now determine whether he is sentenced to death or life in prison.

In the first step of a lengthy process to choose a jury, 500 prospective jurors will appear at the U.S. District Court in Alexandria, Virginia, on Monday to fill out detailed questionnaires.

The questionnaire, which runs about 50 pages, asks prospective jurors about their personal data as well as specific questions related to terrorism, al Qaeda and the September 11 hijackings.

U.S. District Judge Leonie Brinkema has set aside one month -- an unusually long time -- to pick a jury of 12 people plus six alternates. Final jury selection and opening statements are scheduled for March 6.

Brinkema will be trying to seat an impartial jury for the trial being held just a few miles (km) from the Pentagon -- one of the targets on September 11.

Brinkema has also ruled that, due to the intense media scrutiny and public interest in the case, jurors will remain anonymous. She has forbidden photographs or courtroom sketches that show the facial features or hair of jurors.

 

DID MOUSSAOUI LIE TO FBI?

The trial to determine Moussaoui's sentence will consist of two stages.

The first phase will be to determine whether Moussaoui, 37, intentionally lied to the FBI in interviews prior to September 11 about his knowledge of the plan to hijack planes.

If the jury determines he did lie, preventing the government from possibly stopping the attacks, then another phase of the trial will be held to see whether Moussaoui should be given the death penalty or life in prison. If the jury finds that he did not lie, he faces a sentence of life in prison.

Moussaoui, a French citizen of Moroccan descent, was detained in Minnesota in August 2001 on immigration charges after raising suspicions at a flight school. He was indicted in December 2001 for conspiracy to carry out the September 11 attacks.

In April, Moussaoui pleaded guilty to all six counts of the indictment that charged him with conspiracy to commit acts of terrorism, to commit aircraft piracy, to destroy aircraft, to use weapons of mass destruction and to murder U.S. employees and destroy property. Four of the charges carry a maximum sentence of death.

Moussaoui has denied being a part of the September 11 plot but when he pleaded guilty, he said that Osama bin Laden had picked him to fly a plane into the White House as part of a wider conspiracy.

The trial has been delayed repeatedly for appeals over Moussaoui's access to al Qaeda detainees who he says can bolster his case.

Moussaoui's lawyers say it will be difficult for the government -- which has been repeatedly criticized for failing to pick up on intelligence clues that might have helped prevent the hijackings -- to make its case.

"Substantial evidence will be presented at trial that the United States government knew more about al Qaeda's plans to attack the United States than did Mr. Moussaoui," his lawyers said in a court filing in November.

"There is no evidence in the record that Mr. Moussaoui knew of any of the actual September 11 hijackers by name, that they were in the United States or their locations," they wrote.

    Jury selection begins for Moussaoui trial, R, 5.2.2006, http://today.reuters.com/News/newsArticle.aspx?type=topNews&storyID=2006-02-05T151615Z_01_N03199050_RTRUKOC_0_US-SECURITY-MOUSSAOUI.xml

 

 

 

 

 

Ex-Executive Says Enron Fudged Data

 

February 2, 2006
The New York Times
By ALEXEI BARRIONUEVO

 

HOUSTON, Feb. 1—In surprising testimony on Wednesday, Enron's former head of investor relations said that the company fudged its quarterly earnings and repeatedly lied to Wall Street about the true condition of its troubled broadband services division to keep its stock price soaring.

Mark E. Koenig, the first witness to take the stand in the criminal trial of Enron's former chief executives Kenneth L. Lay and Jeffrey K. Skilling, said he lied to analysts on several occasions about the source of supposed revenues in the broadband business.

He said that at one point, in July 2000, he told an analyst that only $50 million of the broadband unit's quarterly revenue came from sales of fiber optic cable, when Mr. Koenig knew the real number was $152 million—all of the unit's revenue in that period.

Mr. Koenig explained that the higher figure showed that Enron, forced to meet its earnings targets by selling off some of its broadband assets, had produced revenues that could not be sustained in future quarters and were not a core part of Enron's mission. Such revenues also might lead analysts to doubt that Enron's broadband business had much of a future.

While his testimony was powerful, Mr. Koenig did not directly implicate Mr. Skilling in any decisions that caused Mr. Koenig or any other executives to lie about Enron's businesses.

Mr. Koenig, however, said that he lied while talking on recorded conference calls where Mr. Skilling and other chief executives were present. None of those executives, Mr. Koenig told jurors, corrected him when he misrepresented Enron's performance, and he certainly did not correct himself.

"We were all on the same page of attempting to portray EBS as self-thriving and just fine," Mr. Koenig said, referring to Enron Broadband Services. "I wasn't about to jump in."

The reason, Mr. Koenig said, was that none of Enron's top executives wanted to pull back the veil and reveal a struggling business that could threaten Enron's "growth story," as he put it — one that was driving its stock price up and giving it dot-com-like share prices through 2001.

Whether Mr. Koenig, 50, can directly tie Mr. Skilling or Mr. Lay to false statements made to analysts and investors about Enron's financial performance will be important if the government is to prove its contention that the two executives are guilty of lying and misleading the public about Enron.

Mr. Skilling, 52, is charged with 31 counts of conspiracy, fraud and insider trading. Mr. Lay is charged with seven counts of conspiracy and fraud.

Mr. Koenig, a Nebraska native who spent 16 years at Enron, met regularly with Mr. Skilling, flew with him on the company plane to talk to important investors, and sent him drafts of press releases about earnings days before they were sent out publicly.

In its opening statement on Tuesday, the government highlighted Mr. Koenig as an important witness in making its case that Mr. Lay and Mr. Skilling lied and enriched themselves with little concern for average investors, who collectively lost hundreds of millions of dollars in retirement savings when Enron went under in late 2001 in the biggest business collapse in history.

Defense lawyers have indicated that they plan an aggressive cross-examination of Mr. Koenig, who pleaded guilty to aiding and abetting securities fraud and agreed to cooperate with the government. He faces a maximum of 10 years in prison. He is one of 16 Enron executives who have pleaded guilty to crimes in exchange for their cooperation.

The defense has suggested that prosecutors pressured many executives who were not guilty into striking deals. Defense lawyers also have said that those who have pleaded guilty might embellish their testimony to reduce their sentences.

In his testimony Wednesday, Mr. Koenig painted a picture of an Enron culture that was intent on meeting or exceeding the earnings estimates of Wall Street analysts. In January 2000, Mr. Koenig learned just days before Enron was scheduled to publish its fourth-quarter 1999 financial statement that earnings were likely to be 30 cents a share, a penny below the 31 cents a share that had been forecast on Wall Street, he said.

Mr. Koenig said he alerted the chief accounting officer, Richard Causey, that the company would miss its forecast. The day before the earnings report was scheduled to be publicly released, Mr. Koenig said, he saw a draft saying that the company would earn 31 cents a share.

"Mr. Skilling had to approve anything that went into the earnings release," Mr. Koenig said.

On Jan. 19, the day after the earnings release, Mr. Koenig said, he discussed the sudden change with Mr. Lay, who himself seemed surprised. "He said he went to bed and we were at 30 cents and when he woke up we were at 31 cents," Mr. Koenig said.

"Was that wrong?" asked Kathryn H. Ruemmler, the deputy director of the Justice Department's Enron Task Force.

Mr. Koenig responded: "Yes, it's wrong. The results of the operation of the company for the quarter were 30 cents, not 31 cents."

Mr. Koenig did not explain if he later learned the reason for the change. Companies often sell businesses or make other legitimate moves to tweak earnings.

In July 2000, Mr. Koenig said, it happened again. He described writing several drafts of the second-quarter earnings release. At first, Enron was planning to report earnings exactly in line with analysts' average estimate of 32 cents a share, he said, but after five drafts over about two weeks, the company reported earnings of 34 cents, 2 cents higher than analysts were expecting.

When asked by Ms. Ruemmler who had made the determination for 34 cents, Mr. Koenig replied, "I believe that Mr. Skilling did."

Ms. Ruemmler played several portions of recordings from the second- quarter conference call. Mr. Skilling said the results "looked great."

When asked by an analyst for more information on where broadband's $152 million in reported revenue was coming from, Mr. Koenig responded that about $50 million of the total came from sales of "dark fiber," uninstalled fiber optic cable. That, Mr. Koenig admitted, was a lie.

He testified that the next day, on July 24, Paula Rieker, the managing director of investor relations who worked for Mr. Koenig, sent him an e-mail message outlining the truth: all of the revenue was related to fiber sales.

    Ex-Executive Says Enron Fudged Data, NYT, 2.2.2006, http://www.nytimes.com/2006/02/02/business/businessspecial3/02enron.html

 

 

 

 

 

Courts uphold challenge to abortion limit

 

Posted 1/31/2006 6:01 PM Updated 1/31/2006 7:35 PM
USA Today

 

NEW YORK (AP) — Two federal appeals courts on opposite sides of the country declared the Partial Birth Abortion Ban Act unconstitutional Tuesday, saying the measure lacks an exception for cases in which a woman's health is at stake.

The first ruling came from a three-judge panel of the 9th U.S. Circuit Court of Appeals. Hours later, a three-judge panel of the 2nd U.S. Circuit Court of Appeals in Manhattan issued a similar decision in a 2-1 ruling.

The New York decision affirmed a 2004 ruling by a judge who upheld the right to perform the procedure even as he described the procedure as "gruesome, brutal, barbaric and uncivilized."

Tuesday's ruling was marked by an unusually sharp dissent by Judge Chester Straub, who said he believed Congress' determination that the procedure was never medically necessary to protect a women's health was well founded and supported by a lower court ruling.

"Allowing a physician to destroy a child as long as one toe remains within the mother would place society on the path towards condoning infanticide," he said.

He added: "I find the current expansion of the right to terminate a pregnancy to cover a child in the process of being born morally, ethically and legally unacceptable."

The California court said the law was vague and so broad that no other remedy was possible except to throw it out.

"We are reluctant to invalidate an entire statute," Circuit Judge Stephen Reinhardt wrote. "However, after considering all of the obstacles to our devising a narrower remedy, we conclude that such is our obligation."

The panel also rejected arguments made by the Justice Department that there was general agreement among doctors that such late-term abortions were never necessary to preserve the health of a woman.

"The government all but admits in its reply brief that no medical consensus exists regarding the need for the prohibited procedures to preserve the health of women in certain circumstances," the panel concluded.

Justice Department attorneys also said the procedure is inhumane and causes pain to the fetus. A government lawyer argued it "blurs the line of abortion and infanticide."

The law, signed in 2003, banned a procedure known to doctors as intact dilation and extraction and called partial-birth abortion by abortion foes. The fetus is partially removed from the womb, and the skull is punctured or crushed. The procedure is generally performed in the second trimester.

President Bush signed the abortion ban in 2003, but it was not enforced because of legal challenges in several states.

A federal judge in Nebraska also has ruled the ban unconstitutional. The Nebraska ruling was upheld in July by the 8th U.S. Circuit Court of Appeals, and has been appealed to the U.S. Supreme Court.

Tuesday's decisions were also expected to be appealed to the high court.

The ban, which President Clinton twice vetoed, was seen by abortion rights activists as a fundamental departure from the Supreme Court's 1973 precedent in Roe v. Wade. But the Bush administration has ued that the procedure is cruel and unnecessary and causes pain to the fetus.

    Courts uphold challenge to abortion limit, UT, 31.1.2006, http://www.usatoday.com/news/nation/2006-01-31-abortion-challenge_x.htm

 

 

 

 

 

Trial Opens in Challenge to Law Over Teenage Sex

 

January 31, 2006
By JODI RUDOREN
The New York Times

 

WICHITA, Kan., Jan. 30 — A federal trial opened here Monday over whether a Kansas law prohibiting virtually all sexual activity by people under age 16 means health care professionals and educators must report such behavior to state authorities, which some say would stop many teenagers from seeking contraception or treatment for sexually transmitted diseases.

The class-action lawsuit stems from a 2003 opinion by the Kansas attorney general, Phill Kline, a conservative Republican who has developed a national reputation for fighting abortion and whose pursuit of abortion clinic records is also being challenged in court.

Mr. Kline's interpretation of the law focused mainly on the reporting duty of abortion providers, arguing that any pregnant, unmarried minor had by definition been the victim of rape or abuse. But it included a broad mandate for reporting whenever "compelling evidence of sexual interaction is present."

Bonnie Scott Jones, a lawyer for the Center for Reproductive Rights in New York, which is representing the plaintiffs, said in her opening statement that Mr. Kline's "dragnet approach" to amassing information on under-age sex violated minors' privacy rights and the Constitution's equal protection clause, and that it "seriously endangers the health and well-being of adolescents."

"Sexual abuse is not synonymous with consensual sexual activity," Ms. Jones said to the judge deciding the case, J. Thomas Marten of Federal District Court. "Consensual sexual activity is not inherently injurious. It is a normal part of adolescent development."

Steve Alexander, an assistant attorney general defending the suit, said the Kansas statute meant that those younger than 16 could not consent to sex, and that those violating the law forfeited any privacy rights.

"Illegal sexual activity by minors can lead to S.T.D.'s, unwanted pregnancies, abortion, depression, mental illness," Mr. Alexander said. "To pretend otherwise is foolish." He said the case was in essence a challenge to the law barring consensual sex between young people of a similar age, which he called "a policy argument that plaintiffs would be better served making in the Legislature."

Kansas is one of 12 states where sex under a certain age — 16, 17 or 18 — is illegal regardless of the age difference between partners, according to a 2004 report prepared by the Lewin Group, a consulting firm, for the federal Department of Health and Human Services. Laws on reporting child sexual abuse also vary, but a third of states require reporting only when statutory rape involves a parent or guardian, the report found.

Dr. Robert W. Blum, a Johns Hopkins University professor and an expert in pediatrics and adolescent medicine, who was the plaintiffs' lead witness, testified Monday that only one state, California, had previously tried to require reporting of all under-age sex, and that it reversed course after a year in the early 1990's because the authorities were flooded with "irrelevant and obstructive" reports.

Among the plaintiffs' arguments is that blanket reporting of sexual activity would be futile because the Kansas Department of Social and Rehabilitation Services has a policy against investigating cases of consensual teenage sex.

Pressed on cross-examination, Dr. Blum said he did consider all sex by children 12 or younger to be "problematic" and worthy of reporting, but he said, "That's distinctly different than a 14-, 15- or 16-year-old in a romantic relationship."

Nationally, studies suggest that about 30 percent of teenagers under 16 have had intercourse, and an additional 20 percent have experimented with oral sex or genital fondling.

A federal appeals court on Friday overturned a temporary injunction blocking enactment of Mr. Kline's ruling but provided a two-week window, approximately the expected length of the trial, before the reporting would be required.

Among the issues debated Monday was the very definition of sexual activity. Anal and vaginal intercourse and oral sex are mentioned in the law, as is "lewd fondling or touching" done with "the intent to arouse," which Ms. Jones said could cover even intense French kissing.

Mr. Kline, who is expected to testify Friday, declined to discuss the case. In an e-mail statement, he avoided the central controversy over consensual sex between teenagers of a similar age.

"Plaintiffs are arguing that the constitution does not allow the state to require people to report child rape," the statement said. "We differ. Prosecuting and investigating child rapists depends on such laws, and if the plaintiffs believe that adult-child sex should be legal they need to take that debate to the Legislature rather than initiate litigation."

Similarly, Mr. Kline said last year that prosecuting rapists was his goal in seeking access to the medical files of women and girls who had had late-term abortions, which led to a separate lawsuit awaiting a decision by the State Supreme Court.

Mr. Kline, elected in 2002, also serves as chairman of the Republican Attorneys General Association and has fought against abortion throughout his career. He filed a lawsuit, recently dismissed, to challenge the state's use of Medicaid funds for abortions, and he submitted a brief in a federal case arguing that Roe v. Wade should be overturned.

Last year, Mr. Kline successfully lobbied the Legislature to require that abortion providers collect fetal tissue from patients younger than 14 and turn it over to law enforcement.

"He's certainly on a crusade to limit or eliminate abortion in Kansas," said Peter Brownlie, chief executive of Planned Parenthood of Kansas and Mid-Missouri. "That's been a clear agenda for a long time." Mr. Brownlie said Mr. Kline had helped make Kansas a national battlefront in the abortion debate.

But the doctors, nurses, counselors and educators suing over Mr. Kline's interpretation of the reporting law say it goes far beyond abortion to include every teenager who requests birth control pills or H.I.V. testing, or who in a group therapy session even discusses "heavy petting" with a boyfriend or girlfriend.

"If they know what they tell me is reported, they simply won't talk," said Beth McGilley, a Wichita therapist who is among the plaintiffs, referring to both teenage clients and adults who often consult her about their children's sexual exploration.

"To me, it's violating what, quite essentially, therapy is couched in: confidentiality," Ms. McGilley said. "You have two 15-year-olds mashing in the back seat of the car — who's the criminal here? Do we really need Big Brother to decide whether or not that needs to be judiciously pursued?"

Gretchen Ruethling contributed reporting from Chicago for this article.

    Trial Opens in Challenge to Law Over Teenage Sex, NYT, 31.1.2006, http://www.nytimes.com/2006/01/31/national/31sex.html

 

 

 

 

 

Enron Jury Chosen in First Day, Setting Stage for Opening Arguments

 

January 31, 2006
The New York Times
By ALEXEI BARRIONUEVO

 

HOUSTON, Jan. 30 — In a single day, the federal judge presiding over the Enron trial here defied skeptics by selecting a 12-person jury to decide whether Kenneth L. Lay and Jeffrey K. Skilling, the former chief executives, conspired to defraud investors in the biggest business collapse in history.

Despite expressing serious reservations about Judge Simeon T. Lake III's plans to make final jury selections in a day, defense lawyers and Mr. Lay himself said afterward that they were satisfied with the jury of eight women and four men. The 12 were selected out of a final pool of nearly 100 prospects.

"They're a well-educated jury, better educated than most," said Michael Ramsey, Mr. Lay's lead lawyer. The jurors range in age from 24 to 66.

Of the 12 jurors, 6 have college degrees and of those, 2 also have master's degrees. Three work in the oil and gas industry, and a few are in accounting. Three are in the education field, and two are self-employed. Two are Hispanic and one is Indian; the rest are white.

"We had some issues, but we are very pleased with the jury that we have," said Daniel Petrocelli, Mr. Skilling's lead lawyer. "They know this is a court of law, not a court of public opinion."

Mr. Lay, speaking to a throng of news media gathered behind a metal barricade, said: "We are pleased with the outcome. My fate and Mr. Skilling's are in their hands."

Mr. Lay arrived early Monday, walking briskly past a phalanx of cameras, tightly clutching the hand of his wife, Linda, and looking downward. When a journalist yelled from the crowd, asking if this trial would be "a chance to clear your name," he called back, "It certainly is."

Inside the courtroom, Mr. Lay appeared tired and kept mostly to himself on one end of a table, tapping a pen and flipping through a yellow legal pad, talking little with his lawyers. At another table, Mr. Skilling used a laptop to watch the live feed of the court reporter's transcript of the conferences between the judge and prospective jurors.

The rapid jury selection set the stage for the much-anticipated trial of Enron's former top brass to begin early Tuesday with opening statements.

The trial of Mr. Skilling and Mr. Lay, the two men most directly responsible for Enron's meteoric rise from a stodgy pipeline company into an energy-trading powerhouse, is the culmination of four years of investigation by the government's Enron Task Force into the company's spectacular bankruptcy filing in December 2001.

Mr. Lay and Mr. Skilling are accused of participating in a suspected conspiracy to defraud the company and mislead investors about the true health of the company's businesses. Mr. Skilling, 52, is charged with 31 counts of conspiracy, fraud and insider trading. Mr. Lay, 63, is charged with seven counts of conspiracy and fraud.

Judge Lake held true to his promise, made last week, that he would strive to seat a jury in one day. He made it clear to the full panel of 96 prospective jurors gathered in the morning that the court was "not looking for people that want to punish anyone or seek vengeance" against Enron for the company's failure.

The 96 jurors had survived from an original pool of 400 jurors selected randomly from among registered voters. Lawyers on both sides had whittled the pool using responses to a 14-page jury questionnaire sent out in November. Judge Lake questioned the prospective jurors one by one at the bench, out of earshot of reporters and others in the courtroom, including Mr. Lay and Mr. Skilling. Lawyers from both sides were allowed to ask prospective jurors follow-up questions at the bench. They typically spent less than 10 minutes with each prospective juror.

At 4 p.m. Judge Lake announced that the panel had been narrowed to 38 and gave the defense and prosecution 40 minutes to decide on their final strikes. An hour later, the jury had been seated.

Legal scholars and jury consultants have expressed surprise that Judge Lake would seek to seat a jury in just one day for such a complex trial. The judge himself estimated on Monday that the trial would take four months.

"It's unusual, given the projected length of the trial and the obvious complexity as well as the rampant notoriety," said Jonathan N. Halpern, a former federal prosecutor who is now a partner at the law firm Winston & Strawn. "But to a certain extent it is to be applauded for efficiency and for moving the trial process along."

The lawyers for Mr. Skilling and Mr. Lay, who are reportedly spending more than $20 million on their joint defense, twice tried to move the trial to other cities and fought for more time to question jurors individually. But Judge Lake, 61, a Ronald Reagan appointee known for his blistering efficiency, rejected those requests. He said in court that the detailed nature of the jury questionnaire, which asked jurors 16 specific questions about Enron out of 76 total questions and included queries about the people jurors admired the most and the least, had done much of the work in culling the prospective pool.

Still, a number of jurors in the morning told the judge that they knew several of the pastors on the witness list for the defense, and other potential witnesses. One 20-year-old black man said that he did not think he could stand in judgment of Mr. Lay and Mr. Skilling. "Everyone in here at least once in their lives has been falsely accused of something," he said. He did not make the panel.

Judge Lake did not impose particularly harsh protections on the jurors, who will be reimbursed for "reasonable" travel expenses — "don't go out and buy a Lexus," he jokingly cautioned — but will not be bused or sequestered. The judge carefully safeguarded the privacy of the jurors on Monday, admonishing those who accidentally uttered their names instead of their badge numbers when asked questions.

Handling juries has proved a delicate matter for judges in other high-profile white-collar cases. In the first trial of L. Dennis Kozlowski, the former Tyco chief executive, in 2004, loose protection of jurors' identities allowed two newspapers to learn the identity of a juror and publish it, leading to a mistrial in the six-month trial. In the trial against Martha Stewart that same year, the judge in the case banned reporters from jury selection, saying it could impede Ms. Stewart's chances of getting a fair trial with an impartial jury.

Outside the courthouse, the scene took on a carnival-like atmosphere.

Four mounted Houston police hired by the United States Marshals Service flanked Mr. Skilling and Mr. Lay as they entered and exited the courthouse. At one point, Mr. Lay looked up at one of the police on horseback and said, "Thank you."

Vikas Bajaj contributed reporting from New York for this article.

    Enron Jury Chosen in First Day, Setting Stage for Opening Arguments, NYT, 31.1.2006, http://www.nytimes.com/2006/01/31/business/businessspecial3/31enron.html

 

 

 

 

 

Enron trial puts onetime Bush backer in spotlight

 

Mon Jan 30, 2006 2:23 PM ET
Reuters

 

WASHINGTON (Reuters) - The start of the Enron trial on Monday puts the spotlight on former chief Ken Lay, a fundraiser of millions of dollars for George W. Bush who earned the presidential nickname "Kenny boy."

The criminal trial in Houston focuses on the collapse of the energy giant more than four years ago when Lay's connection with the White House evaporated as fast as Enron's billions.

With investigations being conducted into the ties between members of the U.S. Congress and corporate lobbyists, the long established political link between money and influence is undergoing new scrutiny.

"The president has said repeatedly that corporate office holders have a responsibility to their shareholders to play by the rules and people who don't maintain that public trust need to be held to account," White House spokesman Trent Duffy said on Monday.

Before Enron's collapse, Lay had a long personal and professional relationship with the Bush family that began well back in the 1980s.

Traveling in the same upper crust Houston social circles, Lay became friends with Bush's father, the first President George Bush. Lay held one of the first major fund-raisers for the senior Bush when he began his successful presidential run in 1988.

As president, Bush picked Lay to be co-chairman of an economic G-8 summit in Houston in 1990 and the chairman of the host committee for the Republican national convention in 1992.

When the Republicans lost the White House that year, Lay cushioned the fall for some members of the Bush administration by hiring them as consultants for Enron.

George W. Bush was elected governor of Texas in 1994. Lay served on his Governor's Business Council, which helped push the Bush legislative agenda, and began being a major source of campaign funds for the governor.

By 1999, Enron Corp. had given Bush more than $550,000, making it his No. 1 career patron, according to the Center of Public Integrity, which keeps track of such numbers.

By some other estimates, Lay has given about $1 million to Bush over the years.

When Bush ran for president in 2000, Lay earned the title of Bush "Pioneer" for having raised at least $100,000 in contributions to the presidential campaign.

On top of the maximum $1,000 personal donation allowed by law, he gave an additional $5,000 to help pay for the recount battle in Florida and $1,000 to help comply with campaign-finance laws, according to PoliticalMoneyLine, a Web site that tracks money in politics.

Other Enron employees gave $82,175 to Bush's campaign that year.

Lay was a key energy adviser during the presidential campaign, but said his political contributions were not aimed at gaining influence.

Lay's relationship with Bush had a more personal side as the two men exchanged friendly notes. For example, on Lay's 55th birthday in 1997, Bush sent him a greeting that began, "One of the sad things about old friends is that they seem to be getting older -- just like you!"

But when Enron was collapsing, Bush quickly distanced himself from Lay, saying the Enron executive had never discussed the company's problems with him and claiming Lay actually had been a supporter of Texas Gov. Ann Richards when he first ran for office.

    Enron trial puts onetime Bush backer in spotlight, R, 30.1.2006, http://today.reuters.com/news/newsArticle.aspx?type=politicsNews&storyID=2006-01-30T192316Z_01_N30299847_RTRUKOC_0_US-ENRON-TRIAL-BUSH.xml

 

 

 

 

 

Jury Selection Begins in Trial of Two Former Enron Executives

 

January 30, 2006
The New York Times
By ALEXEI BARRIONUEVO and VIKAS BAJAJ

 

HOUSTON, Jan. 30 — A federal judge began questioning nearly 100 potential jurors today as the criminal trial opened here for the two leading figures in the Enron scandal.

But as of late morning, Judge Simeon T. Lake III, who has said he wants to seat a jury of 12 and 4 alternates by the end of the day, had not excused any jurors.

"I can assure you that this will be one of the most interesting and important cases ever tried," the judge told the jury pool shortly after the process began around 9 a.m.

Estimating that the trial of two former Enron executives, Kenneth L. Lay and Jeffrey K. Skilling, will last four months, he added, "I can assure you that I won't waste anybody's time."

The case, which took prosecutors four years to build, is being closely watched for its cultural as well as legal significance. The first of the wave of corporate frauds that began to emerge after Enron, an energy company, filed for bankruptcy protection in December 2001, the scandal has become the emblem of financial excess of the high-flying 1990's.

The federal courthouse here today was teeming with members of the news media from around the world. A line to secure just eight seats reserved for journalists in the courtroom began forming at 6 p.m. Sunday evening. One person hired by Bloomberg News to hold a place slept in a chair beside the entrance to the courthouse, others arrived as early as 3 a.m. today and by 5 a.m. all eight spots were gone. Journalists who did not make the cut had to watch the trial on closed-circuit televisions in an overflow room. Federal trial proceedings are not open to public cameras.

Mr. Lay, a former Enron chairman, arrived with his lawyers, walking briskly past a phalanx of cameras, nervously clutching the hand of his wife, Linda, and looking downward. When someone from the crowd yelled if his trial would be "a chance to clear your name," he called out, "It certainly is."

A short while later, Mr. Skilling, a former chief executive of Enron, walked in with his lawyers.

Inside, the 96 potential jurors took up most of the middle of a large courtroom on the 11th floor.

Judge Lake asked the entire group a series of questions about whether they felt they could render a fair judgment in the case and whether they knew any of the witnesses that might be called.

Two jurors raised their hands to say they did not feel comfortable sitting in judgment over the men, and several said they knew people on the witness list, in particular local pastors whom the defense plans to call as character witnesses. Judge Lake next started questioning jurors at the bench, in eight groups of 12.

The lawyers defending Mr. Lay and Mr. Skilling have asserted for months that finding impartial jurors in Houston, where Enron was based, will be difficult, if not impossible. But the judge has rejected two requests to move the trial and has repeatedly denied pleas by the defense lawyers to let them question individual jurors during the final selection process.

The government's witness list has 62 names, many of them former Enron executives and employees who reported to Mr. Lay and Mr. Skilling. Among the most recognized is Andrew S. Fastow, the former chief financial officer, who has pleaded guilty in a deal with prosecutors that will probably result in a 10-year sentence in exchange for his cooperation. Last month, prosecutors also struck a deal with Richard Causey, a former Enron treasurer, who had been set to go to trial with Mr. Lay and Mr. Skilling.

While the government recently trimmed its witness list in an effort to keep its case simple, the defense list bulges with 199 names.

Lawyers for Mr. Skilling and Mr. Lay will argue that they were honest and law-abiding senior executives who operated within the rules. Mr. Fastow and other officials under him, the defense will argue, were responsible for the wrongdoing that brought the company down.

In the last four years, the Enron scandal has touched myriad aspects of American business, politics and culture. Congress has passed several laws in response to the fraud, and numerous books, movies and TV programs have dealt with the scandal.

So it was not surprising that outside the courthouse, the scene began to take on the sort of carnival atmosphere that has become almost commonplace at high-profile trials.

David Tonsall, who said he worked in Enron's energy services business from 1997 till the company's collapse, handed out copies of a rap CD entitled "Corporate Nrun America." Mr. Tonsall, whose rap name is "Nrun," said the CD was about his post-Enron experiences and feelings; one of his songs is entitled "Drop the 'S' in Skilling."

"If you are a man of the house, you know what is going on," he said. "They were responsible."

Another man, who said he was an audit consultant for Enron, held up a sign that read "Ken Lay is not guilty." A couple of others held up signs critical of President Bush and Vice President Dick Cheney.

Alexei Barrionuevo reported from Houston for this article and Vikas Bajaj reported from New York.

    Jury Selection Begins in Trial of Two Former Enron Executives, NYT, 30.1.2006, http://www.nytimes.com/2006/01/30/business/businessspecial3/30cnd-enron.html?hp&ex=1138683600&en=6daa9c0db084e66e&ei=5094&partner=homepage

 

 

 

 

 

10 Enron Players: Where They Landed After the Fall

 

January 29, 2006
the New York Times

 

KENNETH L. LAY and his second in command, Jeffrey K. Skilling, were the public faces of Enron, painting a rosy picture of strong profits and healthy businesses. But as the facts began to tumble out, in the fall of 2001, the company swiftly collapsed, taking with it the fortunes and retirement savings of thousands of employees.

Tomorrow is the first day of the trial of Mr. Lay, who as founder and chairman is accused of seven counts of fraud and conspiracy, and Mr. Skilling, his chief executive, who faces dozens of counts, including fraud, conspiracy and insider trading.

While they are probably the best known of the Enron characters, there were many others who played supporting roles. Some have admitted to helping artificially increase profits and hide losses and debts. Others tried to blow the whistle on the deceptions.

Some have moved on to other jobs and new chapters in their lives, while others continue to spend their days mired in their legal fights.

Here are 10 of the major figures and where they are now.


Andrew S. Fastow
The Finance Chief
Who Turned to Fraud


Andrew S. Fastow, Enron's chief financial officer, avoided the spotlight, leaving that to Mr. Lay and Mr. Skilling.

But Mr. Fastow, who was one of Mr. Skilling's first hires at Enron in 1990, proved his importance to the company in another way: he raised the huge amounts of capital that Enron needed as it moved beyond its roots in the natural gas business to blaze trails as an innovative energy powerhouse.

At the same time, as Mr. Fastow acknowledged in his guilty plea two years ago, he also worked with other senior officers to disguise Enron's deteriorating finances. Specifically, he helped to set up complex off-the-books partnerships that Enron used to avoid disclosing losses. He also used the partnerships, he admitted, to defraud Enron of millions of dollars for his own benefit.

His wife, Lea, a former assistant treasurer at Enron, was also ensnared in the fraud. She pleaded guilty to a misdemeanor tax offense in 2004 for failing to report some gains earned from Mr. Fastow's accounting fraud.

As part of his plea, Mr. Fastow, who is now 44, faces 10 years in prison and is cooperating with federal prosecutors. He could be the first major witness at the trial of Mr. Lay and Mr. Skilling.

Mr. Fastow and his wife still live in Houston with their two sons. The names of two of the partnerships that Mr. Fastow set up — LJM1 and LJM2 — were the initials of his wife and their sons, Jeffrey and Matthew.
PHYLLIS MESSINGER


Ben F. Glisan Jr.
From the Inner Circle
To a Jail Cell


Ben F. Glisan Jr. joined Enron in 1996 after a brief stint at Arthur Andersen, where he worked primarily on the Enron account. He became part of the inner circle and helped conceive and execute several financing schemes that hid company losses.

Mr. Glisan was appointed corporate treasurer in 2000, a move that Sherron S. Watkins, a former Enron vice president, later described to Congress as "effectively letting the foxes in the henhouse."

Mr. Glisan and Mr. Fastow were among four senior Enron executives who secretly invested in a partnership known as Southampton Place. Mr. Glisan invested $5,800, which returned close to $1 million in a matter of weeks. He later forfeited all of it.

Originally indicted on more than 24 charges of conspiracy, fraud and money laundering, Mr. Glisan pleaded guilty in 2003 to one count of conspiracy to commit wire and securities fraud. He is serving a five-year sentence at a federal penitentiary in Beaumont, Tex.

Although Mr. Glisan's plea carried no obligation to cooperate with government investigators, he testified in 2004 for the prosecution in a criminal case against four former investment bankers at Merrill Lynch and two former Enron executives.

They were charged with conspiring to allow Enron to prop up its profits in late 1999 through a fraudulent sale of some Nigerian electricity barges to Merrill. One former Enron employee was convicted along with the four Merrill executives. Mr. Glisan is on the prosecution's list of potential witnesses in the trial of Mr. Skilling and Mr. Lay.

Mr. Glisan grew up and still has a home in Clear Lake, Tex., 30 minutes south of Houston. He received a bachelor's degree and an M.B.A. from the University of Texas, Austin. He is married and has two school-age children.
KATE MURPHY


Mark E. Koenig
The Conference Call
That Raised Eyebrows


It was an infamous conference call, and Mark E. Koenig had allowed it to happen on his watch. On that day in April 2001, Mr. Koenig, then the director of investor relations at Enron, was managing a call between Enron's executives and Wall Street analysts. Mr. Skilling began by laying out Enron's performance in the first quarter. The company was reporting $425 million in earnings, he said, another banner quarter.

But the call turned tense during an exchange between Mr. Skilling and a hedge fund representative. Mr. Skilling ended the verbal joust by describing, on an open line, the hedge fund man in profane language. (Transcripts of the call can still be found on the Internet.) Something must be awry if Enron's chief executive acted so erratically, Wall Street surmised, and Mr. Koenig, a longtime Enron veteran, had not been able to forestall it.

Mr. Koenig, now 50, joined Enron in 1985. Although he stayed at the company until spring 2002, past its bankruptcy filing in December 2001, prosecutors say he participated in and knew about efforts to mislead investors into thinking that the company was financially healthy.

By August 2004, Mr. Koenig pleaded guilty to a count of aiding and abetting securities fraud, a charge punishable by up to 10 years in prison. He also settled separate civil charges, paying almost $1.5 million in fines and forfeitures. More important, as he awaits sentencing, Mr. Koenig agreed to cooperate in the case against his former bosses.

This month, Mr. Koenig, who still lives in Houston, made a small change to his plea deal, asserting that it was actually Mr. Skilling, not him, who told analysts in July 2001 that a unit was reorganized for efficiency reasons when, in fact, it was done to conceal losses. Still, Mr. Koenig acknowledged that he had conveyed the same misleading information, as well as other deceptions, to analysts during that turbulent year.
SIMON ROMERO


Lou Lung Pai
A Big Stock Seller,
With a Taste for Glitter


Lou Lung Pai headed several divisions at Enron, including Enron Energy Services, which sold contracts to provide natural gas and electricity to companies for long periods. Born in Nanjing, China, he emigrated with his parents to the United States when he was 2. He earned a master's degree in economics at the University of Maryland and worked for the Securities and Exchange Commission before joining Enron in 1986.

Regarded by colleagues as prickly, Mr. Pai (pronounced "pie") was also known for running up large bills on the company expense account at strip clubs. His affair with an exotic dancer ended his marriage in 1999, and he sold most of his Enron shares to settle the divorce. Mr. Pai's take, more than $271 million, is the largest of any former Enron employee and has made him the target of several shareholder lawsuits.

Mr. Pai, who resigned from the company six months before it filed for bankruptcy protection, has been questioned by federal prosecutors and S.E.C. investigators but has not been charged with wrongdoing. Through his lawyers, he has said he was not involved in promoting Enron stock and denies knowledge of any illegal, off-the-books accounting. His name appears on a list of potential witnesses for the defense in the trial of Mr. Lay and Mr. Skilling.

Mr. Pai married the woman with whom he had the affair, and they live with their daughter in the Houston suburb of Sugar Land, where they also have a stable for breeding and training dressage horses. Until he sold it last year, Mr. Pai owned a 77,500-acre ranch in southern Colorado, which was the subject of several lawsuits over access and grazing rights.
KATE MURPHY


Kenneth D. Rice
Consummate Salesman
From the Broadband Unit


Kenneth D. Rice held several posts during his 20-year career at Enron, including chief executive of its high-speed Internet unit. Raised on a farm in Broken Bow, Neb., Mr. Rice earned a degree in electrical engineering from the University of Nebraska and an M.B.A. from Creighton University in Omaha.

With his boyish good looks and rakish ways, he was known as a consummate salesman. Mr. Rice raced Ferraris and motorcycles and was a favorite of Mr. Skilling, accompanying him on trips to Patagonia, the Australian Outback and Baja, Mexico.

He was indicted in 2003 on more than 40 charges, including fraud and conspiracy. He and other executives in Enron's broadband division were accused of making misleading statements about the capabilities of the technology and the performance of their division, resulting in an artificial inflation in the value of Enron stock. Mr. Rice then sold the stock at those high prices, the indictment said; he sold 1.2 million shares for more than $76 million. Mr. Rice pleaded guilty in 2004 to one count of securities fraud and agreed to cooperate with federal prosecutors. The other charges were dropped. The length of his jail term will depend on how helpful he is to government investigators.

He testified at a trial last year against co-workers accused of fraud at Enron's broadband unit. The jury was unable to reach a verdict, and the case is to be retried in September.

Mr. Rice is also expected to testify against Mr. Lay and Mr. Skilling. Moreover, Mr. Rice is a defendant in several shareholder lawsuits. With his plea, he agreed to forfeit a vacation home in Telluride, Colo., cars, cash and other property totaling $13.7 million.

He lives in Bellaire, a Houston suburb, with his wife, a pediatrician who was his high school sweetheart. They have four school-age children.
KATE MURPHY


Greg Whalley
Fostering Some Fun
On the Trading Floor


Greg Whalley, Enron's former president, once created a hypothetical futures contract for Popsicles.

After cornering the market from his fellow Enron traders, he arranged for a truckload of real Popsicles to be delivered to the trading floor as "payment" for his fellow traders. The truck broke down along the way, but the Popsicles arrived intact.

The Popsicles were just one way that Mr. Whalley, a former tank captain in the Army, loosened up his fellow traders and became a popular figure within Enron's burgeoning energy trading operation. Brash but fun-loving, Mr. Whalley was a fast-rising star. He joined the company in 1992 as a new graduate of Stanford's business school and rose to the top of the wholesale trading division.

In August 2001, after Mr. Skilling left the company, Mr. Lay tapped Mr. Whalley to be the company's president. Weeks later, after he realized the depth of Enron's financial woes, Mr. Whalley fired Mr. Fastow without even waiting for formal approval from the company's board.

Mr. Whalley, 43, did not return phone calls or e-mail messages seeking comment.

Since Enron's collapse, Mr. Whalley has been questioned by federal investigators and sued by investors. He has cooperated with investigators, but the legal cloud over him led a Swiss bank, UBS, to let him go shortly after it acquired Enron's trading operation in 2002.

He later landed at Centaurus Energy, the Houston hedge fund founded by John Arnold, who worked under Mr. Whalley at Enron as a natural gas trader. At Centaurus, he is in charge of developing new trading strategies, said one former Enron manager in the trading operation.
ALEXEI BARRIONUEVO


Nancy Temple
An Andersen Lawyer
And Troubling Memos


Nancy Temple must have been an almost irresistible hire to Arthur Andersen. At the time she joined the firm in 2000, it was still dealing with a federal investigation of its audit work for Waste Management. And Ms. Temple, a Harvard Law School graduate and a law partner in the Chicago office of Sidley Austin Brown & Wood, was a litigator who specialized in issues like accounting liability.

The Waste Management investigation led to a $7 million fine against Andersen in 2001, at the time the biggest penalty ever imposed on an accounting firm.

But it was the accounting firm's relationship with Enron that proved far more costly. Early in 2002, shortly after the energy company collapsed, prosecutors charged Andersen with obstruction of justice for destroying documents related to its audit work for Enron.

The jury hearing the criminal case against Andersen focused on advice that Ms. Temple, 41, gave to David B. Duncan, Andersen's lead partner on the Enron account, in October 2001. The jurors concluded that she had improperly advised that references to Andersen's concerns about Enron's accounting be removed from a memorandum.

Earlier in the case, prosecutors focused on another e-mail message that Ms. Temple sent to Andersen employees that October, this one about the firm's "document retention" policy. Prosecutors contended that the message was a subtle signal to the staff to destroy Enron-related files. Jurors said after the trial that the shredding had not been a major factor in their decision.

Ms. Temple's lawyer, Mark C. Hansen of Kellogg Huber Hansen Todd Evans & Figel in Washington, declined to comment on his client. Ms. Temple, who is married and has an infant son, continues to practice law in Chicago.
JONATHAN D. GLATER


Rebecca Mark
A Global Ambassador,
Now Off the Fast Track


Globe-trotting in stiletto heels and a miniskirt, Rebecca Mark was Enron's flashy ambassador abroad. A media darling in the late 1990's, she ran various international business development divisions within the company.

Originally from a small town in Missouri, Ms. Mark was twice listed on Fortune's annual index of the 50 most powerful women in business and was widely reported to have been a rival of Mr. Skilling's to be named chief executive. But she later became the subject of scorn because of bad bets, like a $3 billion investment in a power plant in India, which provoked accusations that Enron had negotiated an unfair deal with the local government.

Ms. Mark was forced to resign in August 2000 when she was chief executive of Azurix, a fledgling and financially shaky Enron water subsidiary. She sold her shares in Enron shortly after she left, receiving $82.5 million.

Last year, Ms. Mark agreed to pay $5.2 million, which was her share of a $13 million settlement with Enron shareholders, although a judge earlier found no impropriety in the millions from her Enron stock sales.

She cooperated with a Senate committee that investigated Enron improprieties in international deals and it is generally thought that she will be a witness in the trial of Mr. Lay and Mr. Skilling. But she is not on the government's current witness list, and her lawyer says she has not been subpoenaed.

Now known as Rebecca Mark-Jusbasche, she divides her time between homes in Houston and Telluride, Colo., as well as a ranch near Taos, N.M. She is married to Michael Jusbasche, a businessman who was born in Bolivia.
KATE MURPHY


Sherron S. Watkins
The Whistle-Blower
From the Neighborhood


Sherron S. Watkins is remembered for the letter she wrote as a company vice president in August 2001 to Mr. Lay, describing improper accounting practices at Enron. Months later, Enron collapsed. Ms. Watkins's prescient letter, made public in the Congressional investigation into the company's collapse, brought her fame as a corporate whistle-blower.

Ms. Watkins still lives in Southampton, a fashionable Houston neighborhood, not far from the home of Mr. Fastow. Michael J. Kopper, a former confidant of Mr. Fastow at Enron, used to live in the same area.

She has since written a book with Mimi Swartz, a Houston journalist, about Enron's fall, and formed a consulting practice, Sherron Watkins & Company, which advises companies on governance issues. Ms. Watkins also delivers lectures around the country, including one recent talk at the Pittsburgh Theological Seminary in which she called for an overhaul of corporate ethics rules and enforcement in the United States.

Such recognition might have seemed unlikely for someone who grew up modestly in Tomball, a rural town now on the margins of Houston's sprawl, before attending the University of Texas, Austin, and working as an accountant at Arthur Andersen. In responding to a request for an interview, Ms. Watkins, who is on the witness list for the trial of Mr. Skilling and Mr. Lay, said her lawyer had advised her not to speak with reporters at this time.
SIMON ROMERO


Vincent J. Kaminski
Sounding the Alarm
But Unable to Prevail



For months before Enron's demise, Vincent J. Kaminski warned superiors that the off-the-books partnerships and side deals engineered by Mr. Fastow were unethical and could bring down the company. As Enron's managing director for research, Mr. Kaminski was responsible for quantitative modeling to assist the energy traders and other parts of the business.

Mr. Kaminski's disgust with Mr. Fastow's deals eventually exploded into an internal war with Enron's global finance department in the fall of 2001. As his anger mounted, he refused to sign off on documents related to the partnerships known as the Raptors that Mr. Fastow had created, and he instructed his team of internal Enron consultants to refuse to do any work for the finance department.

His efforts fell on deaf ears. Earlier, in March 2001, he went to Mr. Glisan, the company's treasurer, and presented a report from a midlevel analyst saying that Mr. Fastow's deals had created a threat to Enron's survival, in part because of stock price "triggers" that would require bank loans to be repaid if Enron's credit rating was downgraded and the stock price fell.

Mr. Kaminski, who was born in Poland, trained as an economist and has a business degree, stayed at Enron until early 2002. Afterward, he found many companies eager to hire him. He remained in the energy industry, working first at the Citadel Investment Group, a hedge fund based in Chicago, and later at Sempra Energy and Reliant Energy.

Last March, Mr. Kaminski, 57, landed at Citigroup, where he conducts quantitative modeling for the bank's trading operation based in Houston. He also teaches at the business school of Rice University and has been a contributing writer and editor of books on energy risk management and energy trading.

Mr. Kaminski is well known in the energy industry for his loyalty to the brainy minds he often recruited from top universities worldwide. As Enron was collapsing, Mr. Kaminski helped all 50 of his former research staff members find jobs elsewhere.

    10 Enron Players: Where They Landed After the Fall, NYT, 29.1.2006, http://www.nytimes.com/2006/01/29/business/businessspecial3/29profiles.html?_

 

 

 

 

 

Virginia Man Pleads Guilty in Online Pornography Case

 

January 29, 2006
The New York Times
By KURT EICHENWALD

 

A Virginia man arrested in a national investigation of child pornography on the Internet pleaded guilty to multiple charges involving the sexual exploitation of boys and the operation of illegal Web sites, the Justice Department said Friday.

The man, Gregory J. Mitchel, 38, was an administrator of several illegal Web sites and admitted in his plea to producing and distributing child pornography through the Internet. In that role, the Justice Department said, Mr. Mitchel filmed boys engaging in sex acts and received money from Web site subscribers who paid monthly fees for viewing live and recorded videos.

Mr. Mitchel was arrested after being implicated by Justin Berry, a 19-year-old who was featured in a December article in The New York Times about teenagers who operate for-pay pornography sites that show images of themselves transmitted by Webcams. Mr. Mitchel has since begun naming other adult men who were actively involved in the sexual exploitation of children, court records show.

Mr. Berry, who beginning at 13 was enticed by adults he met online into performing sex acts in front of his Webcam, operated pornography sites featuring his own image for five years. In discussions with a Times reporter in July, Mr. Berry agreed to abandon his business and tell law enforcement about adult men who he knew were sexually exploiting and abusing children. Mr. Berry was granted immunity and is now a federal witness.

In interviews with The Times and the government, Mr. Berry said Mr. Mitchel had molested him over several years and had begun sexually exploiting as many as six other children.

At the time of his arrest, Mr. Mitchel was days away from escorting an under-age boy to a Las Vegas hotel, according to records of his online conversations. Law enforcement officials said they had recovered more than 600 pornographic images of children on Mr. Mitchel's computers, which were seized at the time of his arrest in September.

Through evidence provided to the government, Mr. Berry has identified as many as 1,500 adult men who gave him money and gifts over several years for his sexual performances on camera. Mr. Mitchel was among a number of adults identified by Mr. Berry as having assisted minors in the establishment, operation and marketing of illegal Webcam pornography sites.

In a hearing on Friday in Federal District Court in Roanoke, Va., Mr. Mitchel pleaded guilty to four felonies involving the production, sale, distribution and possession of child pornography. As part of a plea agreement, two related charges involving the receipt and advertising of child pornography were dropped. Because of a previous conviction on a child pornography charge, Mr. Mitchel faces a minimum sentence of 25 years in prison.

Mr. Mitchel first encountered Mr. Berry as a member of one of the teenager's pornographic Web sites and began communicating with him through online instant messaging. Soon after, Mr. Mitchel traveled to Mexico to meet Mr. Berry, then 16, and molested him, officials said.

More than a year later, Mr. Berry tried to abandon his illegal business, but Mr. Mitchel had preserved many of the teenagers' pornographic videos and images, posting them on new sites he established. For months, Mr. Mitchel encouraged Mr. Berry to return to the pornography business and posted periodic updates about his efforts on a Yahoo message board he set up for the teenager's fans.

Early last year, Mr. Berry, who by then was abusing both cocaine and marijuana, agreed to become business partners with Mr. Mitchel on a new site called justinsfriends.com that the older man had registered. The site, which charged members $29.95 a month for password-protected access, went fully active in early June.

Over the weeks that followed, numerous pornographic videos of Mr. Berry and other young men and boys were posted on it. But less than a month after the site went up, Mr. Berry left the business and reported Mr. Mitchel to the authorities.

    Virginia Man Pleads Guilty in Online Pornography Case, NYT, 29.1.2006, http://www.nytimes.com/2006/01/29/national/29kids.html?ex=1144382400&en=6ea88abf59ef0129&ei=5070

 

 

 

 

 

Lawsuit Filed in Support of Muslim Scholar Barred From U.S.

 

January 26, 2006
The New York Times
By JULIA PRESTON

 

Citing the case of a prominent Muslim scholar who has been barred from the United States, the American Civil Liberties Union filed a federal lawsuit yesterday seeking to strike down a clause of the USA Patriot Act that bars foreigners who endorse terrorism from entering to this country.

The suit was filed in Federal District Court in Manhattan on behalf of the scholar, Tariq Ramadan, and three national organizations of academics or writers who have invited him to speak to their members. The groups, including the American Academy of Religion, the leading American organization of scholars of religion, say Mr. Ramadan has never expressed support for terrorism. They also argue that the Patriot Act clause has been applied to stifle academic debate in the United States.

Mr. Ramadan, a Swiss citizen, has been denied a United States visa since July 2004, when he was on the verge of moving with his family to Indiana to take up a tenured professor's position at the Joan B. Kroc Institute for International Peace Studies at the University of Notre Dame.

In a telephone interview from Oxford University in England, where he is currently a visiting professor, Mr. Ramadan said he had never had an explanation why his visa was revoked, after he had been approved to teach at Notre Dame and had been a frequent traveler to the United States for many years.

"It's clear there is nothing in my record supporting terrorism," Mr. Ramadan said.

Speaking to reporters in August 2004, a spokesman for the Department of Homeland Security, Russ Knocke, cited the Patriot Act clause as the reason that Mr. Ramadan's visa was canceled. The clause, adopted when the act was passed in 2001 and amended last May, bars foreigners who "endorse or espouse terrorist activity or persuade others" to support terrorism.

The author of some 20 books on Islamic theology and the place of Muslims in the Western world, Mr. Ramadan, 43, is an outspoken critic of the Bush administration's policies in the Middle East. He has also rejected Muslim terrorism, calling it "anti-Islam." Last August, he was invited by Prime Minister Tony Blair to participate in a task force to counter extremism after the London bombings in July.

The A.C.L.U., joined by the New York Civil Liberties Union, brought the suit against Michael Chertoff, the homeland security secretary, and Secretary of State Condoleezza Rice, asserting that the Patriot Act clause is unconstitutional and that the ban on Mr. Ramadan violates the First Amendment rights of American thinkers who want to meet with him. The American Association of University Professors and the PEN American Center are also plaintiffs.

After Notre Dame applied a second time for a visa for Mr. Ramadan and he waited for five months with no response, Mr. Ramadan resigned in December 2004 from his position there. R. Scott Appleby, the director of the Kroc center, said the government never gave an explanation to the university. Notre Dame saw Mr. Ramadan as a theologian who could help build ties between Middle Eastern Muslims and the West, Mr. Appleby said.

Mr. Ramadan filed a new visa application on Sept. 16, after receiving about 40 invitations for speaking engagements in the United States over the past year. Interviewed in December in Bern, Switzerland, by agents of the Homeland Security and State Departments, Mr. Ramadan said he was mainly questioned about his views of the war in Iraq.

"I told them what I have said many times publicly, that I think the war was a mistake and illegal," he said. "Even the United Nations has said that. I think the resistance is legitimate but the means they are using are not."

A State Department spokeswoman, Janelle Hironimus, confirmed Mr. Ramadan's 2005 visa application but said the department did not comment on pending visa or legal matters.

Mr. Knocke of the Department of Homeland Security also declined comment on the suit or Mr. Ramadan's status. But he noted that the criteria for revoking visas included "public safety and national security risks," among others.

"We have a strong commitment and clear responsibility to restore integrity to our immigration system, which includes preventing people who might present risks from entering the country," Mr. Knocke said.

The controversy about Mr. Ramadan's ideas arises in part because he is the grandson of Hasan al-Banna, a founder in 1928 of the Muslim Brotherhood, an Egyptian group that has turned to violent attacks in recent decades. Some critics say that he speaks with two voices, espousing moderate views in Europe but embracing more militant ideas when he addresses Muslims in the Arabic world.

Barbara DeConcini, the executive director of the American Academy of Religion, described Mr. Ramadan as "one of the most respected scholars of Islam working today."

He was invited to give a keynote address at the group's annual meeting in November, Ms. DeConcini said, but without a visa he was limited to giving a lecture to a small audience by videoconference, which she called a poor substitute for his participation in the group's discussions. He has been invited to address the next annual meeting, she said.

While the government has the authority to exclude terrorists, Ms. DeConcini said, the Patriot Act clause "is being used much more broadly to censor and manipulate academic and political debate."

Mr. Ramadan said the ban had damaged him professionally, and the disruption had been jarring to his wife and children. He said he has not been offered another tenured university position.

    Lawsuit Filed in Support of Muslim Scholar Barred From U.S., NYT, 26.1.2006, http://www.nytimes.com/2006/01/26/national/26suit.html?_r=1

 

 

 

 

 

Big Test Looms for Prosecutors at Enron Trial

 

January 26, 2006
The New York Times
By KURT EICHENWALD

 

In the court of public opinion, they were convicted long ago. But as Kenneth L. Lay and Jeffrey K. Skilling, the onetime leaders of Enron, step into a court of law next week, the outcome of their fraud trial is far from certain, creating one of the most closely watched and hotly contested white-collar criminal cases ever.

On one side of the Houston federal courtroom starting Monday will be two top-flight teams of defense lawyers, who will be taking the risky approach of proclaiming many of the controversial actions of Enron and some much-criticized statements of their clients to be legal and truthful. On the other, the prosecutors for the Justice Department's Enron Task Force who have racked up an impressive array of guilty pleas in the case, but whose performance a trial has been decidely less dazzling.

Despite the widespread belief that Enron cases are simple to win, the task force begins its prosecution without a history of strong performance in court. Sixteen other executives have already pleaded guilty since the corporate scandal broke, but the record of prosecutors has been mixed in three previous Enron-related trials.

"For the government, if they lose the Enron case, it will be seen as a symbolic failure of their rather significant campaign against white-collar crime," said John C. Coffee Jr., a professor at Columbia Law School. "It will be seen as some evidence that some cases are too complicated to be brought into the criminal justice process."

The implications of the outcome of the case against Mr. Lay and Mr. Skilling, whose names have become fused to the scandals that have exploded across corporate America in recent years, are sure to be felt far beyond the courtroom.

"Most people in the white-collar world would agree that Enron is the granddaddy of all frauds in the last two decades," said Stephen L. Meagher, a former federal prosecutor who is now a lawyer in San Francisco. "How this comes out is a test of the limits of what the corporate community will tolerate in business practices."

Of the three major Enron-related criminal cases brought by the government before juries, guilty verdicts stand from only one, which involved Enron's booking what the government said were phantom profits on the sale of Nigerian barges to Merrill Lynch. A second case, against the accounting firm Arthur Andersen, was thrown out by the Supreme Court on appeal. The third, involving the broadband division of Enron, resulted in no convictions, but the five defendants await a retrial.

Those cases involved narrower allegations of wrongdoing than those against Mr. Skilling, 52, who has been charged with dozen of counts, including fraud, conspiracy and insider trading, and Mr. Lay, 63, who is accused of seven counts of fraud and conspiracy. Indeed, this trial will be the first time that the government's theory of the existence of an overarching criminal conspiracy at the company has been put to the test.

Learning its lesson from previous corporate fraud trials involving Enron and other companies, the government is expected to keep this trial as simple as possible to avoid confusing and boring the jury. Riding on the prosecution's success, experts said, is public support.

The importance of this trial to both the government and the defense is underscored by the millions of dollars each side is committing to the case.

Mr. Skilling, for example, has hired Daniel Petrocelli, a top civil lawyer who has no criminal trial experience but made his name winning a $33.5 million verdict for the family of Ronald Goldman in a wrongful-death suit against O. J. Simpson. Mr. Skilling alone has some two dozen people, half of them lawyers, working full time at a makeshift office near the courthouse. Several more are employed as trial consultants helping with jury selection, which begins Monday. The government is also committing significant resources, with 8 lawyers and 10 agents of the Federal Bureau of Investigation working exclusively on this case.

In presenting the case, the government will be depicting a company where law breaking was commonplace. In official reports from the government, the bankruptcy court and the independent directors of Enron, and in the guilty pleas of former executives, Enron has emerged as a company that failed to follow the dictates of federal securities laws, with executives who deceived investors, directors and, in some cases, one another. While that is helpful to prosecutors, experts said that the government would have to be wary of focusing too much on the broad problems within the company.

"To the extent this becomes more of a trial about Enron and less of a trial about Skilling and Lay, that is likely to play into the defense's strategy to put the accounting techniques on trial rather than the individuals," said Robert A. Mintz, a former federal prosecutor who is now head of white-collar criminal defense at McCarter & English in Newark.

The defense case will focus on the requirements and dictates of accounting and securities rules. While both defendants deny knowledge of some of the brazen crimes, like transactions that resulted in millions of dollars from Enron's coffers being drained into other executives' personal bank accounts, there will be little effort to distance themselves from some of the controversial financial dealings that have become infamous over the last few years. These include Enron's use of byzantine off-books partnerships that helped pretty up the company's balance sheet and improve its income statement.

Instead, according to people who know both men, their statements and actions will be defended with a simple response: their business practices may have been aggressive, but everything they did was lawful. Both men, who are expected to testify, plan to maintain that many of the accounting and financial decisions were both correct and appropriately disclosed, and their statements about them were truthful.

There are dangers to this strategy. At times, the defense — particularly that of Mr. Skilling, who is charged with playing a direct role in some of the partnership deals — will have to maintain that accounting rules allowed Enron to exaggerate earnings or hide losses, practices that strike outside experts as bizarre and that jurors may have a hard time accepting. There is the complexity of explaining why, if so much of what Enron did was legal and the company's finances were as strong as the executives maintain, the company quickly collapsed into bankruptcy.

There is also one final challenge, which experts refer to as the Simon problem. In a decision from the early 1970's in United States v. Simon, a federal court held that compliance with accounting rules is not, in itself, enough to disprove an allegation of fraud. In that case, the court held that there was also a positive duty for full and fair disclosure under the securities laws, which might not be met simply by following generally accepted accounting principles, or GAAP.

That these executives and this case would ultimately serve as a symbol of an era of corporate corruption might have seemed laughable just five years ago, when Enron was repeatedly proclaimed by Wall Street and academics as among the best of the best, a cutting-edge company redefining the boundaries of business.

The government, however, hopes to bring in evidence that it contends will prove that Mr. Lay oversaw a reckless organization from soon after its founding as a gas pipeline company in 1985 with the merger of Houston Natural Gas and Internorth of Omaha. By early 1987, Mr. Lay, then the chairman and chief executive, was confronted with evidence of potential financial wrongdoing by top executives at Enron's oil trading unit in Valhalla, N.Y.

The government will seek to admit testimony that despite hearing the evidence, Mr. Lay allowed the executives to remain at the company and, months later, those same executives committed other improper acts that exposed the company to as much as $1 billion in losses. While prosecutors have been arguing that they should be allowed to present the Valhalla episode to the jury to show that Mr. Lay had a pattern of tolerating wrongdoers, the federal judge who is hearing the case, Simeon T. Lake III, has not issued a final ruling on whether he will allow such evidence.

An important witness in the government's case will be Andrew S. Fastow, the former Enron chief financial officer who has pleaded guilty and is cooperating with the prosecution.

Mr. Fastow was a specialist in the growing business of structured finance, a technique that companies use to gain access to new capital by essentially selling off portions of their risk through the use of off-books partnerships. When such transactions are done properly, at least 3 percent of the entity's capital is contributed by an independent investor. Under the accounting rules, assets sold to the entity can then be moved off the balance sheet and the purchase price can be reported as revenue.

By 1996, Mr. Fastow began committing crimes through use of the off-the-books entities for personal enrichment. He arranged to be the 3 percent investor himself — a strategy that would not have met the accounting standards for independence —then set up elaborate schemes in which bogus "investors" stood in as fronts for him. In one deal, called RADR, Mr. Fastow funneled money to various investors, who then returned profits to him. In another, called Chewco, Mr. Fastow allowed a close colleague, Michael J. Kopper, to control the 3 percent investor, then accepted kickbacks on the deal.

While neither RADR nor Chewco appear in the criminal indictments against Mr. Lay and Mr. Skilling, the defense lawyers have already argued that they need to explore both transactions in front of the jury to try to prove that Mr. Fastow had a pattern of hiding illicit personal profits from his bosses.

It is this point — from Mr. Fastow's crimes beginning in 1996 to the charges against Mr. Skilling for actions years later — that will serve as a crucial battleground, with both the defense and the government fighting over the questions that the jurors should be asking themselves.

If Mr. Fastow engaged in crimes involving RADR and Chewco without the knowledge of his superiors, the defense argues, how can the jury believe that he told his bosses in later years about similar illegal acts that were used to manipulate Enron's financial reports? But, the government will counter, would Mr. Fastow — along with other executives who have pleaded guilty, including Richard A. Causey, the former chief accounting officer — have engaged in subsequent illegal acts that seemed to solely benefit the company without consulting superiors?

Numerous allegations against both Mr. Lay and Mr. Skilling relate little to Mr. Fastow. Instead, they portray the executives as consistently working to disguise the true economic realities of Enron in violation of federal securities laws.

The government's case is built not so much on showing that Enron was destroyed by fraud, but rather on showing that fraud, including the suspected deceptions by Mr. Lay and Mr. Skilling, prevented the marketplace from knowing how badly things were going inside the company. But the cases against the two men are very different. Mr. Skilling faces the most complex series of allegations, which essentially accuse him of leading a concerted effort to make Enron appear more financially sound than it actually was.

Through the use of the off-books partnerships, the company avoided reporting losses and was able to generate tens of millions of dollars in profit. It wrote up the value of certain assets when it needed income, and did not write them back down when circumstances changed. It entered into transactions in which there were secret buyback agreements that would have required accountants, had they known, to remove the related profits from the company's books. All of this, according to the indictment, involved Mr. Skilling.

The charges against Mr. Lay are far narrower, on the other hand. He is not accused of involvement in the partnership machinations; rather, the vast majority of the allegations against him involve public statements he made in the final few months of Enron's existence. The government says that many of those statements, including upbeat assessments of the company's liquidity and business performance, were lies through which Mr. Lay continued the earlier deceptions involving Mr. Skilling.

Some legal experts said they remained skeptical of the charges against Mr. Lay. "Had they instead hired the chief operating officer of I.B.M. to take over during that time, that person would have made roughly the same statements," said Professor Coffee of Columbia. "Those statements are sort of what is expected of the captain of the ship."

Mr. Mintz of McCarter & English said: "The government will have to show that the statements the defendants made were intended to give investors a false impression of the financial health of the company. But if the defense is successful in making this case about bad business decisions, then they have a shot at convincing this jury that this case should not be tried in a criminal courtroom."

Alexei Barrionuevo contributed reporting from Houston for this article.

    Big Test Looms for Prosecutors at Enron Trial, NYT, 26.1.2006, http://www.nytimes.com/2006/01/26/business/businessspecial3/26enron.html?hp&ex=1138251600&en=6214f729a3654eb1&ei=5094&partner=homepage

 

 

 

 

 

US grand jury indicts three for 'eco-terrorism'

 

Wed Jan 25, 2006 7:45 PM ET
Reuters
By Michael Fitzgerald

 

SACRAMENTO, California (Reuters) - A federal grand jury indicted three alleged "eco-terrorists" on Wednesday on charges of plotting to blow up facilities like dams and cell phone towers.

"These three individuals planned to commit a number of dangerous and destructive acts in our region, all in the name of the Environmental Liberation Front," U.S. Attorney McGregor Scott told a news conference in the California state capital.

The grand jury indicted Eric McDavid, 28, of Foresthill, California, Zachary Jenson, 20, of Washington state, and Lauren Weiner, 20, of Philadelphia, Pennsylvania. The trio was arrested January 13 outside a retail store in Auburn, California, following six months of surveillance of McDavid by federal authorities.

According to Scott, McDavid attended two meetings of anarchist groups, one in July in Indiana and a second in August in Philadelphia, at which he announced intentions to construct explosive devices from common household items.

He also said he planned to blow up several northern California facilities and expressed a desire to kill a police officer, Scott said.

Officials said one of the bombing targets was the U.S. Forest Service Institute of Forest Genetics in Placerville, California. Other potential targets include the Nimbus Dam and Fish Hatchery, east of Sacramento, cell phone towers and electric power stations.

The charges were not related to a separate 65-count indictment handed down on Monday in Washington involving 11 environmental and animal rights activists in the Western United States.

Scott that McDavid recruited the other two defendants and conspired with them to construct homemade bombs and scout potential target locations. He said the trio rented a house east of Sacramento in the foothills where they engaged in bomb-making.

At some point, the three were joined by an unnamed woman who was a government informant.

"Because of the exceptional work of the FBI's Joint Terrorism Task Force and the brave efforts of a confidential source they were prevented from carrying out their planned attacks," the U.S. Attorney said.

"They were acquiring very significant materials. ... We thought it better to shut it down. We were satisfied we had enough evidence to bring a criminal prosecution," Scott said.

The three defendants, now in Sacramento County jail, face maximum sentences of 20 years in federal prison.

    US grand jury indicts three for 'eco-terrorism', R, 25.1.2006, http://today.reuters.com/news/newsArticle.aspx?type=domesticNews&storyID=2006-01-26T004513Z_01_N25238131_RTRUKOC_0_US-CRIME-ENVIRONMENTALISTS-CALIFORNIA.xml

 

 

 

 

 

Corrupt or Victim of Lies? Trial of Former Mayor Begins in Atlanta

 

January 24, 2006
The New York Times
By BRENDA GOODMAN

 

ATLANTA, Jan. 23 - The long-awaited federal corruption trial of former Mayor Bill Campbell opened Monday with the prosecution accusing him of using contractors like automated teller machines during his time in office and the defense describing the case against him as "nasty lies."

Mr. Campbell, who served as mayor from 1994 to 2002, was indicted in August 2004 on 11 counts of bribery, racketeering and fraud. The indictment followed a seven-year federal investigation of business dealings at City Hall that led to the conviction of 10 people, municipal officials or contractors, tied to his administration.

In opening arguments Monday, Sally Yates, an assistant United States attorney, walked the jury through a 90-minute slide show of graphs and charts in a painstaking effort to reconstruct the web of financial dealings the government attributes to Mr. Campbell. Prosecutors say he took more than $250,000 in bribes, including illegal campaign contributions, from contractors seeking to do business with the city.

Ms. Yates suggested that much of the money slipped to Mr. Campbell was then spent by him on gambling junkets and lavish trips with female companions.

The testimony in coming weeks, she said, will show that during his eight years in office, Mr. Campbell used city contractors like "human A.T.M.'s," so much so that by 1999, he needed to withdraw only $69 from his own bank account for the entire year.

In contrast to Ms. Yates's buttoned-down demeanor, Billy Martin, Mr. Campbell's lead defense lawyer, employed a touch of drama by asking him to stand to be introduced to the jury. He then shook Mr. Campbell's hand and told the former mayor he was proud to represent him.

Mr. Martin recounted Mr. Campbell's youth in Raleigh, N.C., his academic scholarships to Vanderbilt and Duke, and his early career as a federal prosecutor.

He reminded jurors that Mr. Campbell had spent 20 years as city councilman and mayor and recalled his leadership during and after the 1996 Olympics here, which were marred by a bombing. He acknowledged that people on Mr. Campbell's staff had pleaded guilty to taking bribes but said the defendant had not known about the activities.

"The mayor trusted people," Mr. Martin said. "How does the mayor of any city know what all city employees are doing?"

Another of Mr. Campbell's lawyers, Jerry Froelich, offered an additional pillar of the defense: that many of the witnesses to be called by the prosecution could not be trusted to tell the truth, inasmuch as they had received lightened sentences for their own roles in the scandal in exchange for agreeing to testify.

The third defense lawyer, Fred Orr, closed the defense's day by calling the prosecution's case "nasty lies" and asking the jury to "send Mr. Campbell out of this courtroom and restore his good name."

Even before the proceedings could begin Monday morning, federal marshals stepped in to quiet about 100 supporters who had gathered outside the courtroom to sing "We Shall Overcome." The marshals cited the potential disturbance to other court business in the building, and the group settled on a prayer instead, asking God to "help us see this as bigger than Bill Campbell."

In recent weeks the case appears to have split popular opinion of the former mayor, who is black, along racial lines in a city that has billed itself as "too busy to hate." Concerned that the trial would turn heavily on racial issues, the judge, Richard W. Story, made an unusual plea last Thursday that it instead rely on law and evidence, "and not judge a man based on the color of his skin."

    Corrupt or Victim of Lies? Trial of Former Mayor Begins in Atlanta, NYT, 24.1.2006, http://www.nytimes.com/2006/01/24/national/24atlanta.html

 

 

 

 

 

Judge Orders U.S. to Supply Prisoner Names

 

January 24, 2006
The New York Times
By JULIA PRESTON

 

A federal judge has ordered the Pentagon to release the names and nationalities of hundreds of prisoners detained at Guantαnamo Bay, Cuba, rejecting the government's argument that it would be a violation of their privacy and expose them to retaliation by terrorist groups.

The ruling, issued yesterday by Judge Jed S. Rakoff of Federal District Court in Manhattan, came in a lawsuit brought by The Associated Press in April 2005 under the Freedom of Information Act. The suit sought to force the Pentagon to release transcripts of military tribunal hearings held to determine whether the detainees at Guantαnamo had been properly categorized as "enemy combatants."

Last year, the Pentagon released the transcripts of 558 tribunals but blacked out the names and other basic identifying information about the prisoners. In his new ruling, which he described as "final," Judge Rakoff ordered the Defense Department to turn over "unredacted copies" of the transcripts to the news agency.

In August, Judge Rakoff ordered the military to ask the prisoners whether they consented to having their names published. Of 317 detainees who received a form with this question, 63 checked yes, 17 checked no, 35 returned the form without answering and 202 did not return the form, the judge said in a ruling on Jan. 4. He concluded that the small number of negative answers did not justify withholding all the names.

In his January ruling, Judge Rakoff barred the Pentagon from evoking an exemption in the Freedom of Information Act that allows information to be withheld if publishing it would be an unwarranted violation of personal privacy. He also said the Defense Department had offered only "thin and conclusory speculation" to support its claims that terrorist groups might attack the prisoners or their families.

Pentagon lawyers asked the judge to reconsider that ruling, arguing that publishing the prisoners' names would violate the privacy of their families. In his opinion yesterday, Judge Rakoff rejected that argument.

He gave the Pentagon until tomorrow to file an appeal.

The prisoners being held in the military detention camp at Guantαnamo have been classified as "enemy combatants" and have not been brought before American courts.

    Judge Orders U.S. to Supply Prisoner Names, NYT, 24.1.2006, http://www.nytimes.com/2006/01/24/politics/24gitmo.html

 

 

 

 

 

With Heady Days in the Past, Ex-Atlanta Mayor Faces Trial

 

January 23, 2006
The New York Times
By JAMES DAO

 

ATLANTA Jan. 20 - He was, once, the go-go mayor of the South's most go-go city. Suave and acid-tongued, Bill Campbell was the protιgι of a new black politics, steeped in the argot of civil rights yet able to smooth-talk corporate executives. Democrats from President Clinton on down courted him.

But those days are long gone. On Monday, Mr. Campbell, who left office in 2002, is scheduled to enter a federal courthouse here to defend himself against accusations that he turned City Hall into a criminal enterprise during his eight years in office.

"I know that I'm innocent," Mr. Campbell said on Friday on a local radio station, WVEE.

Mr. Campbell's trial will be the culmination of an investigation that dates to at least 1999 and that has already led to convictions of 10 people on charges including bribery, tax fraud and perjury. Three of those convicted worked in Mr. Campbell's administration.

The seven-count indictment alleges a wide-ranging operation directed by Mr. Campbell, who is now 52, to shake down companies trying to do business with the city. The indictment charges that Mr. Campbell took payoffs totaling more than $150,000; accepted more than $100,000 in illegal campaign contributions; filed false personal income tax returns; and received gifts from contractors, including a $12,000 trip to Paris and nearly $10,000 worth of heating and air conditioning equipment for his home.

But Mr. Campbell's lawyers assert the case is built on shoddy evidence and unreliable witnesses who traded lenient punishment for their testimony. "If there was one issue that ran through this, it was the issue of plea deals and immunity," Billy Martin, Mr. Campbell's lead lawyer, said in court on Thursday.

In the months before the trial, Mr. Campbell, who now works as a lawyer in Florida, mounted an aggressive public relations campaign in Atlanta, appearing at local black churches, on sympathetic radio programs and at upbeat rallies.

Often, Mr. Campbell or his supporters have attacked the prosecution as racially motivated. When news of the federal investigation was first reported in 2000, Mr. Campbell denounced the investigators as "forces of evil" who might have been motivated by "ideological differences regarding my aggressive stand on affirmative action."

Concerned that the trial, expected to last at least six weeks, will turn heavily on racial issues, Judge Richard W. Story of Federal District Court made an unusual plea from the bench on Thursday that the trial rely on law and evidence, "and not judge a man based on the color of his skin."

Judge Story was reacting to what seemed a pattern by both defense and prosecution of striking potential jurors based on race. Mr. Campbell's team removed 10 potential jurors, all white. The prosecution removed six, all but one of whom were black. The final jury consisted of seven blacks and five whites.

Asked if race was a criteria for picking jurors, Fred Orr, one of Mr. Campbell's lawyers, said no. "We're happy with the whites on the jury and I think they are happy with the black jurors," he said, referring to the prosecutors.

Michael Leo Owens, an assistant professor of urban politics at Emory University in Atlanta, said that Mr. Campbell, while mayor, made a practice of discerning racial bias in his critics, whether they were newspaper writers, rival politicians or federal prosecutors.

"He was good at challenging those who questioned him," Mr. Owens said. "And if the questions persisted, he would revert to saying: 'It's all about race.' " Mr. Owens added that he thought such arguments "still resonated" for many blacks in Atlanta.

Yet it was not always that way for Mr. Campbell, political analysts say. A Duke University law graduate who worked in Atlanta as a lawyer for the United States Justice Department and in private law practice, Mr. Campbell became known as a pro-business protιgι of Mayor Maynard Jackson.

He was the son of the head of the Raleigh, N.C., chapter of the National Association for the Advancement of Colored People, and gained modest fame for being the first black student, at age 7, who attended the previously segregated Raleigh schools. In 1981, he was elected to the Atlanta City Council representing the district in which the Rev. Dr. Martin Luther King Jr. once preached, and he gained a reputation for being a moderate on racial issues.

"I think Atlanta has dealt with its racial concerns better than any other city in this country," he said in a 1994 interview.

But as mayor, he used increasingly heated oratory to attack what he considered the racial motivations of his critics. When, for instance, the Southeastern Legal Foundation, a nonprofit group, filed a lawsuit challenging the city's affirmative action program, Mr. Campbell likened the plaintiffs to the Ku Klux Klan. "They want us to be able to dunk, to dance and to run, but not to run our own businesses," he said at the time.

Yet at the same time, early in his tenure, Atlanta was experiencing explosive growth, and political analysts say Mr. Campbell deserves some credit for that boom. He also won plaudits for his response to the bombing at the Centennial Olympic Park during the 1996 Olympic Games.

But he also established a legacy of poor management. William Boone, a professor of political science at Clark Atlanta University, said Mr. Campbell was slow, or inept, at dealing with major problems he inherited, including an overtaxed sewer system, grinding poverty and traffic-clogged roads. When he left office, the city was facing a $80 million budget shortfall.

"The city was literally crumbling from below ground, and no real action was being taken to address the problems," Mr. Boone said. He added that Mr. Campbell's tenure looked even worse today in comparison with his popular successor, Mayor Shirley Franklin, who is black and who overwhelmingly won re-election last year after restoring the city's fiscal health.

On Atlanta's streets, Mr. Campbell remains a polarizing figure. More often than not, whites speak disparagingly about him, while blacks tend to defend him as a victim of a racially or politically motivated investigation.

"A lot of irreparable damage has been done to this city because of him, so I'm glad justice is being done," said Margaret Surber, who is white, as she took orders at a Caribou Coffee shop in East Atlanta. "I'm just glad we have Shirley Franklin now."

But Mary Burden, who is black, said the prosecutors should have left Mr. Campbell alone, saying she believes corruption is common among politicians.

"I think they probably wanted him to be an Uncle Tom and he wouldn't go for it," Ms. Burden said outside a midtown Y.M.C.A. "He was a good mayor up to the end."

Brenda Goodman contributed reporting for this article.

    With Heady Days in the Past, Ex-Atlanta Mayor Faces Trial, NYT, 23.1.2006, http://www.nytimes.com/2006/01/23/national/23mayor.html?adxnnl=1&adxnnlx=1137992496-aXr/lbVkDjMx/MCiqb5DAw

 

 

 

 

 

11 Indicted in Cases of Environmental Sabotage

 

January 21, 2006
The New York Times
By MICHAEL JANOFSKY

 

WASHINGTON, Jan. 20 - A federal grand jury in Eugene, Ore., has indicted 11 people