Freeh Demotes Top Aide Over FBI Controversy

FBI Director Louis J. Freeh removed Larry A. Potts as his deputy director Friday, saying that the official is unable to perform his duties effectively because of controversy over the FBI’s 1992 siege in Idaho, in which a white separatist’s wife was killed.

The transfer of Potts, 47, to the FBI’s training division in Quantico, Va., was Freeh’s most serious setback in his nearly two years as FBI director. He had fought for Potts’ promotion to deputy director, even after censuring him last January for management failures in the Ruby Ridge, Ida., siege.

Potts, who has less than three years to serve before becoming eligible for a full pension, “fully supports this transfer for both personal reasons, as well as his desire to best serve the bureau,” Freeh said of the official he knows best in the organization and whom he has described as “superb.”

The demotion of Potts came only two days after it was disclosed that a ranking FBI official had admitted destroying a document describing the Ruby Ridge action. The document dealt in part with whether Potts, before the separatist’s wife was killed by an FBI agent, had approved changes in the “rules of engagement” for the siege allowing agents more freedom to fire their weapons.

Freeh’s action, however, failed to defuse calls for congressional hearings into the Ruby Ridge incident. The action comes on the eve of congressional hearings into the FBI’s 1993 actions to end the standoff at the Branch Davidian compound near Waco, Tex., where Potts also had a supervisory role.

Sen. Arlen Specter (R-Pa.), chairman of the Senate Judiciary subcommittee on terrorism, called Friday for hearings on Ruby Ridge “as soon as possible,” saying that they are needed because of clouds hanging over Potts, the FBI and the Justice Department.

The official who admitted destroying the document, E. Michael Kahoe, was placed on leave Tuesday from his post as special agent in charge of the FBI’s Jacksonville, Fla., office.

Potts has denied approving the change in the rules of engagement but two other FBI officials, who received more severe punishment, have sworn that he did, sources close to the investigation said. One of the two officials, Eugene F. Glenn, whose role in Ruby Ridge led to his removal as special agent in charge of the FBI’s Salt Lake City office, complained that the investigation was a cover-up. His complaint prompted the Justice Department’s Office of Professional Responsibility to reopen its investigation.

There was no indication Friday whether Potts had any knowledge of the tampering with the detailed “after-action report” on Ruby Ridge. But it was clear that he and other FBI officials mentioned in the document face extensive questioning by the Justice Department office.

There was no sign that Freeh’s decision on Potts resulted from pressure brought by Atty. Gen. Janet Reno or other high Justice Department officials.

In fact, on Thursday, Deputy Atty. Gen. Jamie S. Gorelick said that she had no second thoughts about approving Freeh’s original recommendation to censure Potts over Ruby Ridge, rather than subject him to harsher discipline. Potts’ censure was the lightest punishment handed out to the 12 people disciplined in the matter. Gorelick said that she acted on the basis of the FBI report on the incident.

“If a subsequent investigation suggests that the original report was wrong, we will revisit whatever conclusions were based upon the original report,” Gorelick said.

Reno approved Freeh’s recommendation to name Potts permanent deputy, after expressing admiration for Potts’ direction of the FBI’s investigation of the April 19 Oklahoma City bombing.

Testifying before the Senate Judiciary Committee, Reno cited her longstanding policy of deferring to agency heads on the choice of deputies, an explanation that Specter said he found “incredulous.”

Freeh’s strong ties to Potts date back to 1990 when Freeh, then a federal attorney, headed the prosecution of Walter Leroy Moody for the mail bomb murders of a federal appellate judge and a civil rights attorney. Potts headed a multi-agency task force that conducted the successful investigation leading to Moody’s conviction.

In addition to forging their strong bond, the case led to the appointment of Freeh to the federal bench by then-President George Bush and earned Potts two presidential awards.

A senior federal law enforcement official said Friday that Freeh made “a serious mistake” in insisting on Potts’ promotion. “He could have left him as acting [deputy] until the fall when all this is cleared up.”

“I appreciate loyalty,” said the official who declined to be identified by name or agency, “but you have to worry about your institution.” In fact, one government source said Friday that Freeh gave “initial consideration” to removing Potts temporarily, pending the completion of all inquiries. But Freeh decided that a temporary transfer would not be sufficient given the intense controversy surrounding Ruby Ridge. In his statement, Freeh said that he would name Potts’ successor soon.

In retrospect, “it would have been better to hold off on naming Larry deputy, but who knew the bomb was going to go off in Oklahoma?” said one former senior government official, who holds Potts in high regard.

This former official echoed the comments of many of Potts’ admirers, who believe that he has become “a lightning rod” for criticism of FBI actions at Ruby Ridge and Waco.

The Ruby Ridge incident involved an FBI sharpshooter’s killing of Vicki Weaver, the wife of separatist Randy Weaver, as she stood, unarmed, behind a door of the couple’s cabin in a remote part of Idaho. The sharpshooter was firing at an armed male associate of Weaver as he ran to the cabin, the FBI inquiry concluded.

Freeh determined that the shooting was accidental and that the sharpshooter was firing under standard FBI deadly force policy that permits agents to shoot to protect themselves or other innocent parties.

Despite Freeh’s conclusion, questions remain about whether Potts approved special “rules of engagement” that were intended to supersede the deadly force policy at the siege site. Those rules provided that agents “could and should” fire at any armed male at the Weaver cabin.

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Profile: Larry A. Potts

* Age: 47

* Education: B.A. degree from the University of Richmond, 1969.

* Career: Federal Bureau of Investigation special agent, 1974, served in Pittsburgh, Denver and Boston. Inspector-deputy assistant director of FBI’s criminal investigative division, 1990. Assistant director in charge of the criminal investigative division, January, 1992. Acting deputy director FBI, December, 1994. Deputy director, May, 1995.

* Family: Married. Three children.

Source: Times wire reports