State High Court to Decide Merrill Transcript Case
The California Supreme Court agreed Wednesday to decide whether more than 9,500 pages of testimony taken during a grand jury investigation into Merrill Lynch & Co.’s role in the Orange County bankruptcy should be made public.
Once it decides to hear a case, the court usually takes at least a year to complete its review, meaning the grand jury testimony won’t be released until 1999--if at all.
Merrill Lynch, along with Dist. Atty. Mike Capizzi, state Atty. Gen. Dan Lungren and the California District Attorneys Assn., have fought the release of the documents, arguing that the action would invade the privacy of people who were not indicted.
They also argued that the release of the testimony would overturn a century-old practice of keeping grand jury proceedings secret, unless an indictment is handed down.
“This is an important legal issue that deserves review by the state’s top court,” said Merrill spokesman Timothy Gilles.
A coalition of newspapers and media organizations, including The Times, has waged a lengthy court fight for public release of transcripts of testimony to the grand jury.
A Superior Court judge and the 4th District Court of Appeals have repeatedly ruled in favor of public disclosure.
An Orange County grand jury conducted a lengthy investigation into Merrill Lynch’s role in the bankruptcy. Merrill sold the county most of the risky securities that lost more than $1.64 billion in value in the summer and fall of 1994, prompting the county to file for bankruptcy.
The grand jury halted its investigation last June when Capizzi announced a $30-million settlement with Merrill Lynch. The agreement effectively kept the public from discovering what company executives had said under oath about their part in the county’s bankruptcy.
In June, Merrill agreed to pay $420 million to settle a $2-billion lawsuit the county brought over the firm’s involvement in the financial collapse, the nation’s largest municipal failure.
Laurie Levenson, associate dean of the Loyola Law School, said the Supreme Court should review the case because it establishes new procedures and raises questions about the secrecy of grand jury proceedings.
“They are all questions that the state Supreme Court hasn’t addressed,” she said. “I don’t think there’s ever been a case like this.”
The court announced its decision to review the latest ruling by 4th District Court of Appeals in Santa Ana, which earlier this year ordered the transcripts released.
In the appeals court decision, Justice William W. Bedsworth said the $30-million settlement shouldn’t prohibit the public from reviewing the testimony.
“Whatever might be said of the reasons for the ‘settlement’ in this case, it is important that it not be misinterpreted,” he wrote.
Bedsworth also found it ironic that grand jury transcripts are made public when someone is indicted but are sealed when someone makes a major settlement offer to halt a criminal investigation.
State Justices Ronald George, Marvin Baxter, Ming W. Chin, Janice Rogers Brown and Joyce Kennard voted in favor of the review Wednesday with no comment.
