It’s Time to Finish Inquiry Into Cisneros, Counsel Told

The independent counsel who spent $9 million to get a misdemeanor plea from former Housing Secretary Henry G. Cisneros nearly four years ago is still in business -- although he has promised to bring his now nearly $19-million probe to a close soon.

“We’re wrapping it up,” said David Barrett, the lawyer and lobbyist who was selected in 1995 to look into whether Cisneros had lied about how much money he had given a former mistress.

“I will be the second-happiest person around when this is finished,” Barrett said. “The happiest will be my wife.”

The taxpayers might have cause to feel relieved too.

Barrett has been spending about $2 million a year trying to determine whether Clinton administration officials thwarted his investigation.

But three weeks ago, the special three-judge panel in Washington that chose Barrett sent him an order saying he needed to write a final report and quit.

“This is a classic example of why this [now-lapsed] independent counsel statute was a problem,” said Lawrence Barcella, a former federal prosecutor. “You give this person all the resources to go after one person, and the first thing that’s lost is perspective.”

Barrett’s probe of the former San Antonio mayor is not the most expensive of the Clinton-era investigations.

He trails the Kenneth W. Starr investigation that began with the Whitewater real-estate venture in Arkansas, expanded into whether Monica S. Lewinsky obstructed the Paula Corbin Jones lawsuit, which in turn led into whether President Clinton lied about his relationship with the former White House intern.

That probe spent about $71.5 million, according to reports filed with the General Accounting Office.

In second place is Los Angeles lawyer Donald C. Smaltz, who spent $25.1 million investigating former Agriculture Secretary Mike Espy and whether he broke the law by accepting Super Bowl tickets and other favors from people who worked for companies in the food business. In 1999, a jury quickly acquitted Espy of all the charges.

Before the Clinton era, the most costly independent counsel probe was the $48-million investigation of the Iran-Contra affair led by Lawrence Walsh.

Still, Barrett’s probe stands out in the annals of Washington’s investigations for seeming to make the most out of the least.

No one accused Cisneros of taking government money or of corrupting his office. Instead, he was accused of misstating how much money he had given an ex-mistress before he took office.

He had been a popular mayor and a rising star in Democratic circles when he revealed in 1988 that he had a close relationship with Linda Medlar, a married woman and one of his aides.

His political career appeared to be over. After finishing his term as mayor, he went into private business.

However, after Clinton won the presidency in 1992, he asked Cisneros to head the Department of Housing and Urban Development.

During a background interview with FBI agents, Cisneros said he had given Medlar about $2,500 a month until she reestablished her career. She and her daughter had moved back to her hometown of Lubbock, Texas. He said he had given her about $60,000 in all.

Medlar and the new HUD secretary had maintained a long-distance phone relationship. And, in a preview of later Clinton scandals, Medlar taped their phone conversations.

When the two broke off the relationship, Medlar sold the tapes to a tabloid television show. On one of the tapes, Cisneros seemed to agree with her that he may have given her as much as $250,000 over four years.

Cisneros later said he had minimized the amount to protect his wife.

But FBI Director Louis J. Freeh demanded an investigation into whether Cisneros had deliberately lied to his agents. (Lying to a federal investigator is a crime.) Atty. Gen. Janet Reno balked, because the offense appeared to be minimal, but finally agreed to ask for an independent counsel to look into the matter.

A three-judge panel, led by David Sentelle in Washington, chose Barrett in May 1995 to investigate Cisneros. It was seen by some as an odd choice.

Barrett had been named by a House panel’s investigators as one of the GOP lawyers who used influence and connections to win housing contracts during the Reagan administration. However, he was never charged with any wrongdoing. Rep. Tom Lantos (D-San Mateo) denounced the choice, saying Barrett had “clearly benefited from influence-peddling at HUD.” He likened it to “appointing the well-fed fox to investigate the missing hens at the chicken coop.” But there were no congressional hearings or FBI background interviews required of independent counsels.

Barrett plunged into his new duties and soon had a staff of 23, along with six full-time FBI agents assigned to him.

His investigators fanned out across Texas looking for evidence that Cisneros might have been involved in other corruption, but they came up with nothing.

His lead witness -- indeed, his only witness -- was Medlar, the woman who had taped Cisneros. But he soon learned that she had doctored the tapes by recording over parts of them.

She had been given immunity to talk freely, but Barrett revoked the immunity deal and focused his probe on her. At one point, he brought an indictment against Medlar’s sister and brother-in-law in Lubbock on bank fraud charges. He alleged they committed a federal crime by taking out a loan in their name that allowed Medlar to buy a house for herself and her daughter.

The house was sold three years later, for a slight profit. At the time, lawyers in Lubbock said they had never heard of a charge of bank fraud in a case where no one, including the bank, lost any money.

The couple agreed to plead guilty to one count of making a false statement on a bank loan and were given probation. On the same day, Medlar pleaded guilty to lying to the investigators and received 18 months in prison. She also agreed to testify against Cisneros.

Barrett then brought an 18-count indictment against Cisneros and separate indictments against two of his aides at HUD, Sylvia Arce-Garcia and John Rosales. He alleged that they had conspired to cover up Cisneros’ payments to his mistress.

However, the entire case unraveled as it was about to go to trial in September 1999. Neither his lead witness -- Medlar -- nor the tapes were credible evidence in a case about lying. Barrett dropped the aides’ indictments.

Cisneros agreed to plead to a misdemeanor and was fined $10,000.

“During my background investigation, I was not candid with the FBI about a personal matter. I regret my lack of candor,” he told U.S. District Judge Stanley Sporkin.

The judge said the case had taken “much too long.” This matter “should have been resolved years ago,” he added.

Barrett issued a statement defending the four-year probe that led to the misdemeanor plea. “This disposition should in no way be viewed as minimizing the serious ethical breach by Mr. Cisneros,” he said.

Two months later, Freeh hosted a breakfast at the FBI to present Barrett an award for “exemplary service” to law enforcement.

Barrett was also not ready to give up. He believed that officials of the Internal Revenue Service, conspiring with Clinton appointees at the Justice Department, had withheld tax information that could have implicated Cisneros in other crimes.

Before leaving office, Clinton pardoned Cisneros for his offense. A few months later, Sentelle’s panel gave Barrett a green light to continue his probe.

The one Democratic appointee on the panel, Judge Richard D. Cudahy of Chicago, dissented. He noted that Barrett was continuing to spend about $2 million a year.

Apparently, “Mr. Barrett can go forever,” he wrote in a dissent. “A great deal of time has elapsed and a lot of money spent in pursuing charges that on their face do not seem of overwhelming complexity.”

Although nothing has come of this phase of his investigation, Barrett said that he believed it was improper for him to defend his probe publicly.

“I’ve been a low-profile kind of guy,” he said in an interview last week. He added that he has had health problems that kept him away from his work for a time.

But by last fall, Sentelle’s panel had run out of patience.

The members issued a “show cause” order and said it was time to cease “all investigative and prosecutorial activities.” In its March 17 order, the panel said Barrett should work on his final report.

As of Sept. 30, Barrett had spent more than $18.7 million, the GAO said.

Rep. Henry A. Waxman (D-Los Angeles) has been highly critical of the Clinton era’s long-running probes. When The Times contacted him about Barrett, he wrote Atty. Gen. John Ashcroft last week, urging him to use his legal authority to close down the probe.

While the independent counsel law has lapsed, it did not put an end to investigations that were underway, Waxman noted. “I believe it is time for you to invoke [the law] and consider bringing Mr. Barrett’s costly and fruitless investigation to an end,” Waxman said.

Barrett said he agrees that his investigation has gone on for a long time. “This has lasted far longer than anyone anticipated,” he said. “But once you start paddling upriver ... “

However, he said his final report will help explain why the effort was necessary and justified.

“The public has a right to know,” he said. “It will be there in the final report.”