Capizzi: Merrill Testimony Shouldn’t Be Public
Contrary to the position he took when announcing a $30-million deal to set aside the criminal case against Merrill Lynch & Co., Dist. Atty. Michael R. Capizzi argued Monday that grand jury testimony about the giant brokerage’s role in the county bankruptcy should remain secret.
Capizzi had said he would seek to make public the sworn testimony of the Merrill Lynch executives involved in the county’s loss of $1.64 billion on risky Wall Street securities, which led to the nation’s biggest municipal bankruptcy.
How those executives explain the actions of the giant brokerage firm, and its view of its relationship with former Treasurer-Tax Collector Robert L. Citron, has never been made public, and the company has not permitted the officials to be interviewed.
“The point that [Capizzi] made at the press conference is that we would study the law to see if there were exceptions that would allow the transcripts to be released,” Assistant Dist. Atty. Wallace J. Wade said.
“The law is very clear that except in special situations, grand jury testimony is not to be made public,” Wade added.
Those special circumstances are absent in this instance, Wade argued in a seven-page brief submitted to Superior Court Judge David O. Carter. As a result, California law requires the testimony to remain secret, Wade asserted.
As presiding judge for criminal matters, Carter has scheduled a July 30 hearing to determine whether the transcripts should be made public and invited interested parties to file briefs.
Others responding to Carter’s invitation read the law differently than the district attorney’s office.
David W. Wiechert, the former federal prosecutor who represented Citron and encouraged his client to plead guilty to securities fraud and misappropriation of funds only months after the bankruptcy was filed in December 1994, argued that public policy clearly permits the release of the testimony.
Noting that the settlement effectively terminated the criminal case, Wiechert wrote, “Clearly, the policy considerations supporting . . . secrecy do not apply when the target of an investigation has been able to achieve termination . . . through the payment of what will be tantamount to hush money if the grand jury proceedings remain sealed.”
In his brief, Wiechert described Capizzi’s opposition to the release of the transcripts “a no-brainer . . . considering the deal worked out.”
He pointed out the “interesting irony” that Citron, “a disenfranchised convicted felon . . . is more concerned about the public’s right to the free dissemination of information than both the senior law enforcement official in this county, and one of the largest broker-dealers in the world who constantly touts its integrity and responsibility.”
Wiechert also raised the specter that Capizzi settled with Merrill Lynch for political reasons, because he is expected to run for state attorney general.
“Some inquisitive minds might reach the conclusion that [Capizzi] decided to place his personal political goals ahead of the public’s by obtaining $30 million of political capital from Merrill. There was no short-term political upside for [Capizzi] in bringing an indictment against Merrill.”
But Wade strongly disagreed that politics played any role in the settlement decision.
“That’s not a legal argument,” Wade said of Wiechert’s observations. “And Dave Wiechert is too good an attorney to consider that to be legal argument.”
