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Justice Prober Gets Wide Powers in Presser Case

Times Staff Writers

In a move aimed at assuring the independence of a Justice Department investigation into the handling of the politically charged Jackie Presser case, the department’s internal watchdog unit will work with a new federal grand jury to establish why Presser’s planned prosecution was aborted, officials said Monday.

Michael E. Shaheen Jr., counsel for the department’s Office of Professional Responsibility, worked out the arrangement Friday in a private meeting in Akron, Ohio, with U.S. District Judge Sam H. Bell, who had ordered a Cleveland grand jury to look into the case, these officials said.

The arrangement gives an extraordinary breadth of powers to Shaheen, who already has gained a reputation for integrity for his handling of other sensitive investigations involving former President Jimmy Carter’s brother, Billy, and former Atty. Gen. William French Smith.

Cuts Bureaucracy

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In addition, it removes layers of cumbersome bureaucracy and will result in Shaheen reporting directly to the Justice Department’s No. 2 official on his findings involving Presser, the president of the Teamsters Union, a secret FBI informant for 13 years and President Reagan’s only political supporter among major labor leaders.

In the Carter case, the rules provided that the attorney general “will not countermand or interfere with the counsel’s (Shaheen’s) decision or actions.” Officials who declined to be identified said that similar rules are expected to apply in the Presser case.

Originally, Bell had planned to have the grand jury that looked into labor fraud allegations against Presser also investigate the unusual circumstances under which the FBI reportedly condoned Presser’s part in a payroll-padding scheme to bolster his value as an informant. The judge said earlier this month that this grand jury would work with a federal organized crime strike force that had recommended Presser’s prosecution.

Investigating Themselves

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But Shaheen, in his meeting with Bell, pointed out that this would result in strike force prosecutors--who are expected to be called as witnesses in the new inquiry--investigating themselves, officials said.

Moreover, the officials added, the grand jury also would have been looking into its own possible “victimization” in the case. Like strike force prosecutors, grand jurors did not learn until late in the investigation that the FBI had known of Presser’s illegal acts.

As a result, Bell and Shaheen “mutually agreed” that Shaheen’s office should direct the probe through a newly impaneled grand jury, officials said. Another factor in the decision, they said, was that the original grand jury’s term expires next month.

On Monday, Bell acknowledged that he had met with Shaheen and his deputy, Richard M. Rogers, calling the session “very worthwhile.” Justice Department spokesman John K. Russell confirmed the arrangement.

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Given Independence

Paralleling his authority in the nine-month Carter investigation, Shaheen will have “the greatest degree of independence that is consistent with the attorney general’s accountability.”

Under these guidelines, he also will have “full authority to conduct proceedings before grand juries and to conduct any other investigations he deems necessary,” while enjoying access to “all documentary evidence from any source.” He will report to Deputy Atty. Gen. D. Lowell Jensen.

Shaheen concluded in April, 1981, that Billy Carter had lied to federal agents about his responsibility to register as a foreign agent for Libya, but that “no government officials or employees” had engaged in illegal conduct.

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Smith Case Ruling

A year after that inquiry, Shaheen ruled in a separate case that Smith, Reagan’s first attorney general, had an investment in an oil and gas tax shelter in conflict with his official duties. But he noted that Smith had voluntarily decided to forgo all tax benefits from the investment and had removed himself from any decisions involving the tax question, thus nullifying this “regulatory violation.”

Bell told The Times early last week that he would insist on a thorough grand jury inquiry into events that led to the collapse of the Presser case. Grand jurors, in the absence of returning any indictments, should issue a full public report of their findings, he said.

Meanwhile, Atty. Gen. Edwin Meese III told a breakfast session with reporters and editors of The Times’ Washington Bureau that he would review the result of the internal inquiry into the case. He said he was “prepared to take any steps that I find necessary after I see what the facts are. . . . I’m not making any decisions or conclusions until we get to that point.”

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