by emptywheel
TPMM reports that there is a non-public hearing on whether the plea bargain hearings for Tommy Kontiagiannis will be unsealed.
Tomorrow morning, three judges of the 9th U.S. Circuit Court of Appeals will gather in a courtroom inside an elegant 104-year-old building in Pasadena for an extraordinary hearing involving one of the co-conspirators in the Randy “Duke” Cunningham bribery scandal.
The court hearing will be closed to everyone – the public, the news media, the defense attorneys – save for the judges and a few lawyers from the U.S. Attorney's Office.
The extreme secrecy is highly unusual. Veteran lawyers could not remember another time when the appeals court held a completely closed hearing.
The subjects to be discussed are transcripts and documents related to the February guilty plea of Thomas Kontogiannis, a New York developer who admitted to a single count of money laundering in the Cunningham case. Kontogiannis' checkered past includes convictions for bribery and bid-rigging, an estimated $70 million fortune, and a knack for staying out of prison.
Now, the problem here, for District Court Larry Burns is that the government didn't say the contents of those hearings were classified until recently. Which is why we're at the Appeals Court in the first place.
The plea agreement itself was kept secret for four months, until federal Judge Larry A. Burns – who initially agreed to the closed proceedings – said there was no longer a compelling interest to keep the agreement from the public.
Burns also decided in June to unseal transcripts of the three February hearings and a fourth held in April. But prosecutors objected and invoked a provision of a federal law dealing with handling classified information as a reason why the documents have to remain secret.
When Burns turned that request aside, the prosecutors went to the appeals court. That court agreed to hear the appeal – and ordered all material to remain secret.
Now, I'm frankly not that surprised about the secrecy surrounding today's hearing. But I can easily understand why Ray Granger, the lawyer for Kontogiannis' nephew John Michael, is pissed about it. That's because the apparent cooperation that the plea deal permitted ended up netting Michael an extra money laundering indictment. And, more specifically, I suspect the subject of the sealed proceedings would be Michael's best means of impugning Kontogiannis as a witness.
You see, Kontogiannis' plea deal mentions a great deal of other money laundering Kontogiannis and Michael and others have done, while it never reveals why Kongtogiannis bribed Cunningham or engaged in the other money laundering.
Defendant, Michael, and others were involved in writing and selling fraudulent mortgages on various properties, including the property that was the subject of the fraudulent mortgage used to payoff [sic] Cunningham's second mortgage. Most of the properties involved were not built (and in some cases never built), or only partially constructed. Appraiser Steven Martini created appraisals for these properties, which enable defendant and Michael to write and sell the fraudulent mortgages. Both before and after this transaction (the payoff of Cunningham's second mortgage), defendant and Michael had regularly engaged in financial transactions involving the proceeds of unlawful activities, most mortgage/bank fraud, which transactions promoted these unlawful activities (such as mortgage/bank fraud).
Right there, in the middle of a plea deal, the allusion to a large number of crimes ... with no mention of ongoing investigation or prosecution or anything else. Details about which, I strongly suspect, is what the government is trying to keep sealed.
But to what end? Is this money laundering done in support of CIA operations, as seems likely? In which case, the argument that it needs to remain sealed would be understandable (albeit not necessarily defensible, from a public interest perspective). Or is this an attempt by the government to keep details on Kontogiannis' other illegal activities secret because he remains valuable, independent of the intent of these fraudulent activities? In other words, are they protecting security-related activities, or Kontogiannis, some of whose activities support purportedly security-related activities?
Here's one more thought, admittedly tinfoily, which is probably the product of my nasty YKos-induced cold and exhaustion.
What if the intelligence community is using corrupt practices (like money laundering) to find money to bribe Congressmen to ensure it gets the legal money it needs? It would work something like this: With the CIA's knowledge, Kontogiannis launders money through fraudulent mortgages. He uses that money to bribe Congressmen, who in turn approve of the earmarks and other programs Kontogiannis supports. Which gives the CIA taxpayer money for its budget, and separates the legitimate taxpayer money from the fraudulent illegal money by one Congressman and one money launderer. Much neater than engaging directly in the drug trade, you know?
I'm sure there's something wrong with this theory, but my cold-addled brain can't see it at the moment.
Whether my tinfoil has merit or not, though, the government seems to be claiming a compelling interest in preventing us--and John Michael--from learning the facts surrounding the other frauds Michael and Kontogiannis propagated.
My brain is coming up with the tin-foil-wrapped idea that Cheney is involved somehow. (That courthouse is kind of out in the sticks, for Pasadena, having just spent several minutes tracking down the address.)
Posted by: P J Evans | August 06, 2007 at 13:15
The Duke Cunningham case has always been to most interesting to me because it's the one with the most money changing hands. And I don't mean hooker and blow money, I mean Congressional appropriations. An optimist would think professional DoJ prosecutors are dragging these investigation on purpose to try and push the big decisions into January 2009 so they can bring them on a somewhat level playing field post-Gonzo. A pessimist would think a few old men do a bit of time, keep their mouths shut, and everyone continues to think the scandal is about a free boat.
PS: EW, I saw a photo of you from YKos on Spazeboy's blog and you are in some interesting company in his post, George Lakoff and Joe Lieberman. I hope you feel better.
http://www.spazeboy.net/2007/08/ykos-meeting-authors/
Posted by: joejoejoe | August 06, 2007 at 13:25
In the sticks? Hm. If it's what I think it is, the 9th circuit court occupies an old hospital/hotel building that looks over the arroyo and the old Colorado Street Bridge. I was driving in that area late spring trying to find the best vantage point to get a shot of the Colorado Street Bridge. My friends (wife blogs, husband is location scout photographer) got a good one of both the bridge and the building.
Posted by: Susan Kitchens | August 06, 2007 at 13:53
I wonder if those "gut feelings" about another attack was part of the setup for pushing this crap through. As much as I am loath to admit it; I don't think the Dems had much choice. If they had said no, I am convinced that an attack WOULD occur.
Pardon me, I am getting a transmission from that Major League Baseball satellite.
Through the eye slits in my tin foil helmet, I am seeing the Big Dick threatening to trigger a bomb in a Repug district with a "made in Iran" sticker on it if he wasn't allowed to keep spying on whomever he wants to. (If it was in a Democratic district, the 28per-centers wouldn't care, Democratic voters will care as long as it's PEOPLE being hurt).
Geeze, I can see the alarms going off in Crystal City from THAT comment.
Posted by: JohnJ | August 06, 2007 at 13:53
So Congress is dirty. Tinfoily hats wonder how much so and who is in the sights of the DoJ/Bushies and how might that affect their votes on certain issues or their strategy in opposing Rethug malfeasance. At one point it has been mentioned that at about 60 Congressfolk were involved in Abramoff intrigue. How many in military appropriations that could be connected to Cunningham et al?
Should we ask some pointed questions of those who voted for the traitorous FISA 'reform'? Especially those who also are on appropriations and/or intelligence committees?
Posted by: Carolyn in Baltimore | August 06, 2007 at 13:55
Ooops! Big apologies..that comment was for another thread. Too many windows open.
Posted by: JohnJ | August 06, 2007 at 13:56
Susan K
That's the address their page gave, so I guess that's the building. Always wondered what it was when I went by on the freeway ....
Posted by: P J Evans | August 06, 2007 at 14:15
The Chambers Pasadena 9th Circuit Courthouse is a wonderful old building and is often used for special cases and hearings, especially in the summer months. It is a favorite getaway rotation assignment for senior judges and judges spending most of the year in San Francisco.
Posted by: bmaz | August 06, 2007 at 14:31
CIA? Using illegal schemes to launder bribes to Congressmen? Perish the thought!
EW, I'm sure that's exactly what's going on. Why not?
Posted by: tekel | August 06, 2007 at 14:55
Whatever it's about there must be political embarrassment written all over it if they went to this much trouble to 'classify' it.
Posted by: MarkH | August 06, 2007 at 15:09
VERY interesting. Means it's time for me to re-dig into the Abramoff Bayou Fund scandal; could never find a satisfactory explanation as to why a federal case about a fraudulent investment vehicle moving money overseas originating in NY ended up being prosecuted at state level by AZ state AG's office. Was the money in question from some of these questionable mortagages or reinvestments by firms who made questionable mortgages?
And exactly where was the money headed before it was stopped by AZ state AG?
Hmm.
Posted by: Rayne | August 06, 2007 at 15:11
EW, whether or not your theory pans out, Ludlum's probably already lifted it for the plot of the next Bourne novel.
Feel better soon and send Ludlum a bill. He can afford to cut you in.
Posted by: Jukesgrrl | August 06, 2007 at 15:20
Rayne - That is a fascinating case I had completely forgotten about. If I recall correctly, the case was not really being prosecuted in Arizona by our AG Terry Goddard (a good guy I might add) so much as he seized for forfeiture monies within Arizona, and interplead it for protection, to be restituted to appropriate victims. I believe the case was being prosecuted out of SDNY. The last update on the AZ AG website is still dated August of last year. I'll ask around...
Posted by: bmaz | August 06, 2007 at 15:24
bmaz
Please let Rayne and I know on it. Now I'm intrigued.
Posted by: emptywheel | August 06, 2007 at 15:52
Jukesgirl- Le Carre frequently comes to mind when I read EW, and I mean that in the best possible way.
Posted by: two beers | August 06, 2007 at 16:07
EW and Rayne - Here is url for the public information from AZAG. There are several formal press releases, as I said the most recent is August of last year, and also the civil complaint filed to interplead the money. Combined, it gives a decent take on what happened here and why an Arizona state court is involved.
http://www.azag.gov/victims_rights/Bayou/index.html
If I can find anything else of note out, I will advise. I know Terry Goddard a bit, but now is not a good time of year to find him...
Posted by: bmaz | August 06, 2007 at 16:07
Thanks, bmaz. I'd thought this case had gone entirely too quiet for too long. Highly suspicious that Bayou was trying to move $100 million out of the country -- to whom, and for what? Have never heard.
This is one that I think a certain person in NY might be able to shed light on, EW, if they can do some digging...
And why AZ, the home of Paul Charlton and many Native Americans? the convenience of "porous borders" that tribal lands might offer if the money came back, or the amount of older folks with money needing "investment"? Hmm.
Posted by: Rayne | August 06, 2007 at 16:36
I think the only slightly germane but contemporary investigation of the embarrassing purge of US attorneys is unrelated to this thread, but there is somewhere an echo of commentary in a question Sen. Feinstein put to Atty Generl Gonzales toward the conclusion of the hearing in April Senate Judiciary trying to identify a linkage between mass firings and ongoing civil corruption investigations, link tucked away fifteen pages into WaPo's copy of the CQ transcript, there. That degree of obliquity is about all DiFi would supply in a public venue like that. Search on 'civil corruption'; ew has covered that exchange in a prior thread. Yet, yesterday, as I read again of DiFi's independent stand against the Judiciary Committee caucus of her own party, in voting to send the Southwick nomination to the full senate, I was reminded of her affonting Gonzales early in the US attorney scandal, specifically for the civil corruption aspect of the compromises Gonzales must have had to have made to allow the political purges to take place during his watch at DeptOfJustice. The money laundering business is a separate topic, one hopes; I wonder why anyone would bring Gonzales into the information loop if Dept of Justice were providing cover for money laundering; it seems incongruous, somehow, that Gonzales would have to know. I was thinking a few posts ago about the characterization in one of the threads there of compartmentalization of knowledge at Dept. of Justice during Ashcroft's tenure, with respect to inspector general and security clearances denials. Well, perhaps, it is merely that unique and brash form of tinfoilery for which Chicago is known in an earthy way, which seems to create a linkage where there might be nothing. One could even ponder convention-goers enroute to the airport the morning after the conference ended, hearing only silence on their car radios yesterday; this is only a test.
Posted by: John Lopresti | August 06, 2007 at 17:53
An angel gets its tin foil wings...
Finally am getting up the energy to blog over at my place again (maybe this weekend), but in the interim: Somehow I don't think all that yammering about protecting commercial prior cooperation in the FISA debacle we heared hammered on by Jr. this weekend is all about AT&T.
Sure, they have have stock price hanging out of their fly just ready to be whacked. But you know, the clowns they have been funding have bigger fuck ups to deal with. Whoever holds the admin account for AT&T needs to have a talk with the Rove faction and explain who is really buttering his toast.
Posted by: tryggth | August 06, 2007 at 20:16
BCCI anyone?
Posted by: dead last | August 06, 2007 at 20:19
The 9th Circuit seems to like these double super secret "in camera" hearings. They did the same in Gilmore v. Gonzales the one where the guy did not want to show his I.D. before getting on an airplane.
Posted by: mark brown | August 06, 2007 at 23:32
This is an old thread, so I'm taking my chances here, but I didn't want to go O/T on the Doan thread upstairs. I just saw this question over at TPM posed by the 9th Circuit judges...
"At the end of the hearing, the judges said they wanted more arguments from the newspaper and the government on a key question: Can members of the executive branch of government – such as federal prosecutors – declare records generated by the judicial branch as “classified”?"
My question for our resident lawyers is this... Federal prosecutors are in the executive branch, yet their work carries over into the judicial branch (by being involved in the court proceedings). At what point does a document cross over from being executive (from the prosecutors) to judicial (from the court)? For example, lets say I write an incriminating letter that the prosecutors gather as evidence (at this point, is it an executive document?) but later that letter appears as evidence in the court proceedings (so is it now a judicial document?). Where exactly is the dividing line? This is a distinction I hadn't considered before, but now my curiosity is piqued..
What other types of records might there be that prosecutors would be trying to classify in a court setting -- I assume it must be evidence, but could there be other types of documents that would be relevant to this discussion as well?
Posted by: phred | August 07, 2007 at 13:26
Your "tinfoil' theory may be just that but, isn't it terrible that you and I and millions of other Americans think it possible? Just go back to Iran-Contra. Or accusations about the CIA and drug dealing that seemed more far fetched than your idea. If we can have tacitly approved treason in the White House (Libby and commuting his sentence to keep taking care of him.), and illegalities with NSA knowingly breaking the law, and all the other law breakers in Interior, Justice and GSA and Congress, what would you possibly not put past this administration? Congress better use the Constitution to rid us of these cretins before there is no Constitution.
Posted by: nellieh | August 07, 2007 at 16:19
Jiminy Phred, I can't answer that question very satisfactorily. There are to many variables that either would, or at a minimum could, affect the consideration. Who/what was the originator of the document/evidence? What setting was it originated in? What chain of custody exists to confirm authenticity? How did law enforcement or the prosecutors come into possession of it? What was the format and forum it was presented to the court in? Was it ever not secret, or has that status been consistent? What is the relative harm from it being part of the public record? I could go on...
In response more pertinent to the Kontogiannis matter, it is my understanding that the transcripts were part of the court record and were either made public, or were about to be made public, without particular objection and then there was a sudden objection at the last minute. In my simple mind, it is, in this case, at this point, a court determination. The govt. through the US atty can argue their position for sealing/secrecy, but it is a judicial determination that carries the day. I would need to read all the pleadings etc to give a decent answer; but that is my wild shot from the hip take. My guess is that cboldt is a little more up to speed than i am, and I would be interested in his take
Posted by: bmaz | August 07, 2007 at 16:59
I wish I could give a specific opinion or help on the question of secrecy of these hearings, but I don't have any familiarity with the facts of the case, beyond a quick skim of the plea agreement and about 5 minutes of thought.
The government (prosecution/executive) can argue secrecy for several reasons, but the bias of the Court is supposed to be to make everything public, at least eventually. The point at which the contents become a matter of public record can be a judicial decision (see the unredacted affidavits in the "Miller and Cooper must testify" case), or by the executive by forgoing introduction in the first place - greymail sort of notion.
The grounds for secrecy that a court will respect are "state secret (the ultimate piece of classified information)," "classified information" (see CIPA for how to get some form of this stuff "in"), unnamed targets of investigation and protection of their privacy interests, protect ongoing investigations. I'm sure I'm leaving some out, but those are the most likely grounds for sealing material from the public.
Classified information in this case could be taking bribes to approve a classified military or intelligence operation -- pure speculation on my part, just noting that "classified" material can appear in a wide variety of fact pattern - like Libby's use of his own information for a preoccupation defense; other's use of classified information as an "I was ordered to do it" defense.
Posted by: cboldt | August 07, 2007 at 17:22
Pleadings can be classified too - where the facts used to support the arguments can't effectively be separated from the argument.
Affidavits making specific allegation of a connection between disclosing a (specific) fact and harm to national security are invariably sealed.
I've been digging around a bit on the possibility of the NYT having violated a leak publication statute (18 USC 798(a)(3)), and have run into a number of cases where various government agencies, usually in FOIA context, argue specifically why certain information is being withheld.
The most interesting cases presently cooking are the detainee and NSA data-mining (collection of 100% of call records - having access to 100% of transmission contents) cases. Those tend to bottom out on state secret.
Posted by: cboldt | August 07, 2007 at 17:35
Thanks bmaz and cboldt! I appreciate it. I guess what surprised me was simply the notion that anything relevant to a judicial proceeding could be treated as executive in nature rather than judicial in nature and trying to sort out which would be which. Evidently, it was a more complicated question than I thought... Thanks again!
Posted by: phred | August 07, 2007 at 17:47
Courts are supposed to be impartial by nature, but they have to respect the right of the executive to maintain classified information.
How that plays in practice is extremely variable. I think trying to view "judicial" as equivalent to "public" doesn't work very well, except that in order to preserve the impression of impartiality, the court are biased toward disclosure.
In some cases, where the government chooses to keep evidence out of a case for secrecy reasons, the court will find the omission to work in the favor of the defendant. See Halkin v. Helms, 690 F.2d 977 (D.C. Cir. 1982)
Posted by: cboldt | August 07, 2007 at 18:00
Phred - I think cboldt and I basically told you the same thing in two different manners. Combined, I think they give you a very good read of the land in general. In some regards, I don't think we, individually or combined, truly answered your question about when a document "crosses over" from the presumptively executive(prosecution) to the presumptively judicial. The best answer I have on that is that once a document or other evidence is submitted to the court, entered into evidence, or otherwise made part of the record, it is at that point generally a judicial concern and domain. As cboldt enumerated, there are many reasons that the item may still be deemed secret or sealed, but at that point it is up to the court, or a superior court thereto, to make that determination. If you want
more shear speculation, I think on the Kontogiannis case, the court has already made that determination and is using the media interests as a stalking horse to further pad the record to support it's intended ruling.
Posted by: bmaz | August 07, 2007 at 18:07
So, given the fact that recently a court (I forget which one) threw out a complaint against the government regarding spying because the complainants could not prove they had standing, this suggests if the tables were turned and the government was prosecuting based on information obtained without a warrant, the defense could build their case on the assumption that spying had occurred, whether or not the government fessed up to having done so. Very interesting indeed!
Posted by: phred | August 07, 2007 at 18:16
Thanks for the follow up bmaz. I find this all very interesting. One would have to assume that the judicial branch would take the nation's best interest to heart in determining whether or not something ought to remain secret. It sounds to me like the 9th Circuit is not keen on having the executive branch suggest that they know better than the court.
Again, thanks to you both!
Posted by: phred | August 07, 2007 at 18:19
-- if the tables were turned and the government was prosecuting based on information obtained without a warrant, the defense could build their case on the assumption that spying had occurred --
That scenario, government as prosecutor (unlike Halkin, government as defendant), has potential resolution in several directions. The detainee cases are a great window into this.
In one direction, the evidence is just not admitted or used by the prosecution. See Padilla, no dirty bomber charge, no dirty bomber evidence.
In the most common direction, the evidence is admitted via CIPA. The Moussaui case is the most prolific example of this.
Whether or not evidence will be precluded on fourth amendment (search not reasonable) or, if warrantless, an "it wasn't obtained where foreign intelligence was a purpose of the surveillance" argument, will be totally fact-specific inquiries. The courts tend to let in enough information so the judge or jury has sufficient basis to reach a conclusion - usually "guilty." That is, the precluded evidence is surplussage, useful perhaps, but not necessary to find for the prosecution.
I read a recent law review on the defendant being excluded from hearing evidence against him. That's pretty extreme, but not a "never happened" scenario.
And in yet another direction, the case is taken to a military court, where the rules and presumptions are shifted to favor the prosecution ... "guilty until proven innocent," basically, but can be played out on individual elements of evidence.
Posted by: cboldt | August 07, 2007 at 18:29
-- So, given the fact that recently a court (I forget which one) threw out a complaint against the government regarding spying because the complainants could not prove they had standing --
That was an NSA surveillance (captured contents of communications) case, decided below by Judge Taylor of Eastern District of Michigan, recently reversed by the 6th Circuit (good summary at Volokh)
Judge Vaughn Walker out on the left coast is having a hearing on Thursday this week on a consolidation of cases where plaintiffs are inquiring on the call records issue, which is different from the issue of capturing contents of a communication. [MDL No 06-1791]
Posted by: cboldt | August 07, 2007 at 18:35
And to take it one step further, in a traditional criminal setting, if i was sure there was secret evidence that the prosecution refused to use (as opposed to having been precluded for some reason by the court), and I thought it could be played to my client's favor, I would make vague hints in opening argument, ask a couple of spurious questions here or there during examination for seeding purposes, and then scream holy murder about it in closing argument. And yes, I have actually done it on several occasions. It is a fine line because if you play such a hand to heavy to early, the court will shut your effort down, either on the governments(prosecutor's) motion, or on the court's own motion.
Posted by: bmaz | August 07, 2007 at 18:42
I suspect (along with others here that)all of this secrecy surrounding the Kontogiannis hearing has to do with protecting something quite huge.
Maybe it's the key to the whole unraveling...
In 1993, (Mitchell)Wade, then 40 years old, moved to form his own defense contracting firm, MZM, Inc. But it wasn't until 2002 that MZM would get its first federal government contract: a peculiar one-month, $140,000 contract from the White House, later revealed to be for providing computers, office furniture, and specialized computer programming services to the Office of the Vice President.(bold emphasis mine).link.
Now what do you suppose those 'special computer programming services' consisted of? Spying perhaps? Most news reports list the services MZM provided the VP's office as 'furniture and computers'. not really the same thing at all.
Has the administration/Cheney been doling out the NSA spying/wiretapping contract work to private cronies? Wouldn't put it past them.
I've always suspected that the DOJ attorney firing scandal was not only about the politicization aspect (Rove's work), but also the less-publicized, stuff about the Lam investigation; that part sure did drop out of the spotlight...and Jerry Lewis (chairman of Appropriations Committee)still holds that post, does he not?
Carol Lam was targeting Rep Jerry Lewis in addition to Duke Cunningham. Anyone know what's up with the Lewis investigation since Lam's ouster?
Debra Yang is now carefully tucked away as a partner in the law firm defending Lewis...so what happened to Lam's unfinished investigation?
I'm not expressing myself as succincly as most of you here do, so I'll not ramble further.
There just aren't enough hours in the day...
Posted by: Staar | August 07, 2007 at 21:37
I suspect (along with others here that)all of this secrecy surrounding the Kontogiannis hearing has to do with protecting something quite huge.
Maybe it's the key to the whole unraveling...
In 1993, (Mitchell)Wade, then 40 years old, moved to form his own defense contracting firm, MZM, Inc. But it wasn't until 2002 that MZM would get its first federal government contract: a peculiar one-month, $140,000 contract from the White House, later revealed to be for providing computers, office furniture, and specialized computer programming services to the Office of the Vice President.(bold emphasis mine).link.
Now what do you suppose those 'special computer programming services' consisted of? Spying perhaps? Most news reports list the services MZM provided the VP's office as 'furniture and computers'. not really the same thing at all.
Has the administration/Cheney been doling out the NSA spying/wiretapping contract work to private cronies? Wouldn't put it past them.
I've always suspected that the DOJ attorney firing scandal was not only about the politicization aspect (Rove's work), but also the less-publicized, stuff about the Lam investigation; that part sure did drop out of the spotlight...and Jerry Lewis (chairman of Appropriations Committee)still holds that post, does he not?
Carol Lam was targeting Rep Jerry Lewis in addition to Duke Cunningham. Anyone know what's up with the Lewis investigation since Lam's ouster?
Debra Yang is now carefully tucked away as a partner in the law firm defending Lewis...so what happened to Lam's unfinished investigation?
I'm not expressing myself as succincly as most of you here do, so I'll not ramble further.
There just aren't enough hours in the day...
Posted by: Staar | August 07, 2007 at 21:38
apologize for the double-post...I got a browser error the first time.
Posted by: Staar | August 07, 2007 at 21:39
You speak of Kontogiannis and Kontiagiannis. Which is it?
Posted by: Gollum | August 07, 2007 at 22:05
cboldt and bmaz -- thanks for the further discussion above. I'm looking forward to the ruling from the 9th Circuit on all of this...
Posted by: phred | August 08, 2007 at 10:35