‘Terribly Abused by System’ : Given Freedom but Denied Justice, Donovan Believes

He returned home to champagne and balloons, laughter and tears, but former U.S. Labor Secretary Raymond J. Donovan said Tuesday that he remains “bitter” after his acquittal on grand larceny and fraud charges and is anxious to change the grand jury system.

“We’ve been terribly abused by the system,” Donovan told The Times in his first interview since the jury verdict late Monday afternoon. “The jury gave us freedom, but the system denied us justice.

“The cost in reputation is priceless, absolutely priceless,” Donovan added. “Money never meant that much to me. But my reputation sure did.”

Donovan, 56, and his wife Catherine returned to their Short Hills, N.J., home alone Monday evening to celebrate until 1 a.m. with their three grown children after a Bronx jury acquitted Donovan and seven co-defendants on charges of defrauding the New York City Transit Authority of $7.4 million.

“Right now it’s just nice to be at home without this dark cloud hanging over us,” Mrs. Donovan, 50, said in a separate telephone interview. “It’s been so long in coming.

“That innocent people should be hurt like this . . . it’s just unbearable,” she added, her voice cracking.

Donovan said he gained a new appreciation for the criminal justice system--especially for those unable to pay the estimated $13 million to $15 million the marathon case cost him and his co-defendants.

During breaks in his trial, Donovan said he often walked the long, marble halls of the giant, grafitti-scarred courthouse in the South Bronx, and talked to defendants in other, less glamorous criminal trials.

“It was frightening to see some of those poor people who had pro bono attorneys with 82 files under their arms yelling out, ‘Rodriguez!’ and not knowing who Rodriguez was, and pulling out the file and not knowing what was in there, and then going into the courtroom,” he said. “It was a very sobering experience.”

Although Donovan’s trial lasted nearly nine months, with 40 witnesses and more than 500 exhibits, the jurors deliberated only 9 1/2 hours before returning late Monday afternoon with the innocent verdicts. In interviews, jurors said they had little discussion and had only taken one vote to reach a verdict.

‘Case Was Not Proven’

“There were no doubts,” said jury forewoman Rosa Milligan, an X-ray technician. “The case was not proven on the stand.”

“They never really proved it to me,” agreed juror Thomas Habel, a pizza oven welder. “I never saw anything I could say was illegal.”

“The prosecutor really didn’t have a strong case,” said juror Daisey Shields, a department store bookkeeper.

Theodore Geiser, one of the lead defense lawyers, estimated that legal costs for the defendants totalled between $13 million and $15 million and estimated the total cost of the 2 1/2-year pretrial wrangling and trial at $18 million to $20 million.

“It’s a very wasteful way to spend the limited resources of law enforcement,” Geiser said. “I would think you could knock over a few crack dealers for that many chips.”

Geiser said he was moving to reactivate a lawsuit in U.S. District Court in Manhattan. The suit asks damages from Bronx Dist. Atty. Mario Merola, charging that the prosecutor “prejudiced our right to a fair trial,” Geiser said.

Traditionally, defendants cannot sue prosecutors. But Geiser said that Merola stepped outside prosecutorial bounds and forfeited his immunity by holding news conferences at which he portrayed the defendants as guilty.

Asked about the suit, Merola said: “I never used the word guilty.” In one pretrial reference to Donovan’s lawyers, however, Merola asked, “Would an innocent guy need all that help?”

In the telephone interview, Donovan, the first Cabinet secretary ever to be indicted in office, said he believes “a healthy review” of the grand jury process is necessary.

‘Truth, Not Convictions’

“Has it outlived its usefulness by the abuse of power given to prosecutors who should be after criminality, for sure, but who should be after truth, not convictions, as their first and primary obligation?” he asked.

Donovan was indicted on Sept. 24, 1984, shortly after he had testified for four hours before a Bronx grand jury. Donovan said he was not asked any questions about the charges of the indictment during his testimony.

The indictment charged that Donovan, who was co-owner of a New Jersey construction company, and his co-defendants had bilked the New York City Transit Authority of $7.4 million during construction of a Manhattan subway tunnel. Much of the evidence came from wiretap tapes made during an unrelated FBI investigation into organized crime in the Bronx.

“I was worried about having 10 defendants, about having those tapes smell up the courtroom,” Donovan said about the trial. “You can take things out of sequence, out of context, out of date.”

His wife said her husband and family had gotten a “raw deal” from the press since he entered public life in 1981. “That’s the part that used to hurt,” she said “. . . You don’t realize how many lives were affected.”

Donovan spent Tuesday back at his desk at the Schiavone Construction Co. in Secaucus, N.J. He read and relished tabloid headlines of his courtroom victory, fielded congratulatory phone calls from Washington and abroad, and considered a vacation in Florida.

“I’m emotionally drained,” he said. “I need to gather my thoughts and strength back.”