Defense in steroid case admits leak

A defense attorney in the BALCO steroid scandal has admitted that he revealed secret grand jury testimony from Major League Baseball players to two San Francisco Chronicle reporters, ending a constitutional standoff between federal prosecutors and the press, and eliminating the threat of prison for the journalists.

Troy Ellerman, 44, who represented the vice president of the Bay Area Laboratory Cooperative, agreed to plead guilty to two counts of contempt of court, one count of obstruction of justice and one count of filing a false declaration with a federal court, according to an 18-page plea agreement filed in U.S. District Court in San Francisco on Wednesday.

Once he enters his plea, the U.S. Justice Department intends to withdraw the grand jury subpoenas issued to reporters Mark Fainaru-Wada and Lance Williams, who had been sentenced to prison on contempt charges for refusing to comply with the subpoenas, a government spokesman said. Fainaru-Wada, 41, and Williams, 57, had remained free while appealing the sentence.

“The government believes that Ellerman’s guilty pleas will alleviate the need for the reporters to testify before the grand jury,” Thom Mrozek, spokesman for the U.S. attorney’s office in Los Angeles, which investigated the leak, said in a news release.

Williams, reached by phone, said Wednesday’s news caught him and Fainaru-Wada by surprise. He declined to confirm that Ellerman was their confidential source.

“The whole point of our situation is that we’re not going to give our sources to anyone as long as we have a confidentiality agreement in place, and we do,” Williams added.

At the same time, Williams said if the prospect of prison is removed, “Of course, that’s great.”

The case was seen as a tipping point in a series of court battles between journalists and federal prosecutors seeking to unmask their sources. This week, a procession of reporters has filed into a Washington courtroom to testify about who leaked the name of CIA agent Valerie Plame.

Media advocates, however, contended that unlike the Plame matter, the BALCO case did not involve sensitive security issues and the reporters performed an important public service by exposing drug abuse in national sports.

Attorneys for the Chronicle argued before U.S. District Judge Jeffrey S. White that forcing journalists to disclose their sources would undercut the 1st Amendment and ability of the media to gather news.

But White agreed with the prosecutors, who argued that letting people get away with violating a judge’s order to keep information confidential would deeply erode the system of justice.

And according to the plea agreement, Ellerman very much flouted that system in 2004 as his client, James Valente, was headed to trial for allegedly illegally distributing steroids.

Ellerman allegedly invited the reporters on two occasions to his law offices to take verbatim notes of the testimony given by baseball stars Barry Bonds, Jason Giambi and Gary Sheffield and sprinter Tim Montgomery.

When the Chronicle’s subsequent stories connecting the athletes to the steroid ring rocked the sports world, Ellerman blamed the government in a court hearing for the leaks, according to the plea agreement. He then filed a motion to dismiss the charges, saying that the media coverage of the confidential testimony made “fair trial practically impossible anywhere in the country,” the plea agreement said.

For misleading the court, Ellerman was charged with obstruction of justice. Although he could face up to 15 years in prison and fines of $500,000, the U.S. attorney’s office has agreed that he should be sentenced to no more than two years, and he could get probation. If the judge decides to give him more time than the agreement stipulates, Ellerman can withdraw the plea.

“The government acknowledges that Ellerman’s decision to plead guilty has saved future government resources by resolving the leak investigation now, has saved the 9th Circuit Court of Appeals from having to consider and rule on the appeal filed by the reporters and the Chronicle, and has avoided the potential that Fainaru-Wada and Williams would serve time in prison,” Mrozek said.

The BALCO case began in 2003, when agents raided the Burlingame laboratory that produced performance-enhancing drugs and a grand jury probe was begun.

As professional athletes were called before the grand jury, reporters scrambled to learn the names of those who got illegal drugs from the firm.

But when indictments were announced in February 2004 against four defendants -- including Valente and BALCO founder Victor Conte -- prosecutors had removed the athletes’ names.

The transcripts of the grand jury testimony, revealing the athletes’ names, were distributed to the defendants and their attorneys. Judge Susan Illston made the parties sign a protective order not to disseminate them to the press.

About four months later, however, Ellerman “willfully disobeyed” Illston’s order and invited Fainaru-Wada to his Sacramento law offices to take verbatim notes from Montgomery’s sealed testimony, according to the plea agreement.

The June 24 headlines were: “Sprinter admitted use of BALCO ‘magic potion’ ” and “Track star’s testimony linked Bonds to steroid use.” Illston asked the Justice Department to investigate the leak.

Ellerman expressed outrage about the leak in court. In mid-July, he filed a declaration under penalty of perjury stating that he “had no idea who provided the information to the media concerning Mr. Montgomery’s grand jury testimony nor why it was done.” He wrote that the leak was “very damaging to [the defendant’s] right to a fair trial.”

In October, he made the motion to dismiss while subsequently inviting Fainaru-Wada back to his offices to take notes from the testimony of Giambi, Bonds and Sheffield. The resulting stories caused an international uproar over the use of steroids by top stars in professional sports.

This fall, according to Mrozek, a “previously unknown witness approached the FBI offering to help prove that Ellerman was the source of the leaks.” The FBI secretly taped Ellerman admitting that he was the source of the grand jury transcripts, according to the plea agreement.

Media advocates were delighted to hear that Williams and Fainaru-Wada would avoid prison.

Lucie Morillon, the Washington director of Reporters Without Borders, said the whole episode still damaged journalists’ ability to dig up information.

“This source has been forced to come forward and this does not help to instill trust between reporters and their sources,” she said.

Traditionally, the Justice Department has opted to subpoena reporters in only the most extreme circumstances, such as to protect national security or public safety, but critics said that changed under the Bush administration. Eve Burton, corporate counsel for the Hearst Corp., which owns the Chronicle, said the number of media subpoenas has increased markedly in recent years, according to research the company did to prepare for this case. Of 91 federal subpoenas issued to journalists since 1991, 41 have been filed since January 2003, she said.

The Justice Department has said it does not have a tally of the total number of subpoenas issued to reporters.

Fred Brown, vice chair of the ethics committee of the Society of Professional Journalists, said the case also raises ethical issues for journalists who grant confidentiality to sources whose motives for releasing the information might be questionable.

“I think it shows you don’t make that promise unconditionally,” Brown said. “You should leave yourself an out if your source does something unethical.”

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joe.mozingo@latimes.com

stuart.silverstein@latimes.com

Times staff writer Maria La Ganga contributed to this report.