Ex-HUD Secretary Indicted, Accused of Lying to FBI

Former Housing Secretary Henry G. Cisneros, a onetime rising Democratic star and close political advisor to President Clinton, was indicted Thursday on 18 counts of lying, obstructing justice and conspiracy for misleading FBI agents about payments he made to a former mistress.

The indictment of Cisneros, the president’s first secretary of Housing and Urban Development and the second former Clinton Cabinet member charged this year with criminal wrongdoing, capped an investigation begun in 1995 by independent counsel David M. Barrett.

Cisneros, an executive of Los Angeles-based Univision, has long acknowledged inaccuracies in his statements to FBI agents who conducted a background check of his qualifications for the Cabinet post five years ago, but he has blamed the errors on a poor memory unsupported by any records.

However, the indictment sketched a broad conspiracy in which Cisneros enlisted the aid of two former employees and his ex-mistress to falsely minimize the size and extent of the payments. Cisneros even promised the employees government jobs to win their cooperation, according to the federal grand jury impaneled in the investigation.

Through his Washington attorney, Cisneros reiterated that he “has made mistakes in his personal life [but] has attempted for many years to put these mistakes behind him.”

The lawyer, Cono Namorato, said Cisneros “expects complete exoneration after a trial . . . concerning events that occurred five years ago.”

Cisneros, who resigned as HUD secretary in November 1996, is president of Univision, the nation’s No. 1 Spanish-language television network.

A. Jerrold Perenchio, the station’s chairman and chief executive, said Cisneros “deserves his day in court” and will continue to serve in his present capacity.

Indictment Alleges $250,000 in Payments

Atty. Gen. Janet Reno asked for appointment of the independent counsel in March 1995, noting that Cisneros over a period of years had given a much lower figure than actually occurred for his payments to his former mistress, Linda Medlar Jones.

Barrett’s assignment was to determine whether Cisneros’ statements to the FBI that he had paid Jones “no more than $2,500 at a time and no more than $10,000 a year” were criminal, according to Reno’s application to the federal judges who appointed Barrett.

Barrett found those figures were much further off the mark than anyone had suggested, alleging in the indictment that Cisneros actually paid Jones more than $250,000 from 1989 through early 1994, a year after he took his post in the Cabinet. The indictment said Cisneros conspired with Jones and two of his employees “in a scheme to conceal--by trick, scheme or device--material facts from the FBI and the Department of Justice.”

In addition, part of the conspiracy was allegedly aimed at understating the payments to the FBI so the Internal Revenue Service would not investigate either Jones or Cisneros.

Jones, who was indicted last September in an unrelated Texas bank fraud case uncovered by Barrett, was charged again in the latest indictment, along with former Cisneros employees Sylvia Arce-Garcia and John D. Rosales.

Cisneros, if convicted, would face a maximum possible penalty of five years in prison on each of the 18 counts.

President Clinton issued a statement praising Cisneros’ “distinguished career” as a former mayor of San Antonio and, later, as Housing secretary. Clinton also said Cisneros has been “a wise counselor to me,” a reference to Cisneros’ help in obtaining political support from the Latino community.

Cisneros “always has the interest of ordinary people at heart,” the president said, adding: “I have greatly valued his service.”

The first member of Clinton’s original Cabinet to be indicted was former Agriculture Secretary Mike Espy, who was charged in August by another independent counsel with accepting $35,000 in illegal gifts and lying to investigators. He has pleaded innocent and is awaiting trial.

Ronald H. Brown, then Commerce secretary, was under investigation by an independent counsel for his personal financial dealings when he was killed in a plane crash in Bosnia in April 1996.

Honest Mistake or Deliberate Evasion?

Although Cisneros has characterized his FBI statements as an honest mistake because his previous relationship with Jones was publicly known at the time, the indictment suggested he deliberately sought to conceal a potential controversy that could have derailed his HUD nomination.

“It was part of the conspiracy that during the late summer of 1992 through early 1994, Cisneros continued to pay Medlar [Jones] in order to ensure her public silence regarding, among other things, their relationship and the nature, purpose and extent of his payments to her and to ‘another woman,’ so he could be nominated, confirmed and serve as secretary of HUD,” the indictment said. The other woman was not identified.

Cisneros’ payments to Jones might have remained secret had not Jones filed a civil suit against the HUD secretary in 1994, alleging he owed her $256,000 more in support payments. She claimed the two entered into a verbal agreement for her to receive $4,000 a month after their relationship was disclosed in San Antonio as he was serving out his term as mayor.

Jones said Cisneros agreed to such support because she could not obtain steady employment in Texas since the press had characterized her as “a home-wrecker.” After leaving the mayor’s job, Cisneros reportedly earned more than $300,000 a year as a financial consultant before taking his position in Washington.

Cisneros: Money Given Out of ‘Compassion’

Jones, after filing her lawsuit, revealed she had secretly tape-recorded 86 telephone conversations with Cisneros in which they discussed the arrangement. She gave some of the transcripts to a tabloid television show, which paid her $15,000 for an interview.

Cisneros at the time said his payments to Jones arose from his “compassion” for her employment situation and were not intended to ensure her silence about their relationship. Barrett and his corps of FBI agents had access to Jones’ tapes in conducting the investigation.

Barrett initially granted Jones immunity from prosecution, but he later accused her of misleading the FBI and thereby failing to “live up to her end of the bargain.” She was charged with trying to deceive federal agents by at first turning over copies of the tapes rather than the originals.

The indictment said Cisneros gave Jones average monthly sums of $5,000 from 1990 through 1993. But he paid her an additional $16,000 in December 1992 so she could buy a home in Lubbock, Texas.

The indictment said Cisneros made seven “false, fictitious and fraudulent” statements to FBI agents on Jan. 7, 1993, in their second interview with him.

Among the “false, fictitious and fraudulent” statements Cisneros is charged with making: that he was still paying Jones; that his highest single payment to her was $2,500; and that Jones never threatened, coerced or tried to obtain money from him.

The indictment also said Cisneros lied when he told FBI agents that, other than his affair with Jones, he had had only one extramarital relationship.

In carrying out the alleged conspiracy, Cisneros also was charged with directing certain employees of his private firm, including Arce-Garcia and Rosales, to hide information from the FBI about his relationship and payments to Jones. Cisneros promised them and “certain of his associates” jobs at HUD if he were confirmed, according to the indictment.

In the mid-1980s, the popular San Antonio mayor was seen as one of the rising stars in Democratic politics. Many thought he would be the first Latino governor of Texas, and some saw him as a future Democratic candidate for president.

“Henry had everything: He was smart, articulate, personally elegant,” said Rodolfo de la Garza, vice president of the Tomas Rivera Institute at the University of Texas. “He was the leading Latino politician in the nation, and he had the potential to be just the leading politician.”

But his political career seemed to have ended in 1988 when he confessed at a press conference to having “a close personal relationship” with a woman who was not his wife.

The Los Angeles-based Mexican American Legal Defense and Educational Fund issued a statement late Thursday saying the organization will stand behind Cisneros “during what will assuredly be some very difficult weeks ahead.”

The organization charged that the indictments “smack of political posturing by those who seek to continue to harm the reputation of an individual who already has paid a hefty price for a personal indiscretion.”

Praising Cisneros as “an individual who has provided exemplary service to this country throughout his many years in public office,” the organization said it is “extremely unfortunate that a very private and personal mistake has become such a public matter.”

Times staff writers David G. Savage in Washington and Marla Matzer in Los Angeles contributed to this story.