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Inquiry revisits accusations that Justice Dept. protected lawmaker

RALEIGH, N.C.—Four years ago in Asheville, N.C., a lawyer filed a document that contained a scandalous accusation: The U.S. attorney general had intervened in a local bank-fraud case and prevented investigators from questioning one of Congress' most powerful members, Rep. Charles Taylor.

As Washington swirls with allegations that the Justice Department and White House intervened in federal prosecutions across the country, a review shows that U.S. attorneys in North Carolina have gone after a lot of Democrats—and a few Republicans, too—during the Bush administration.

But many in the western part of the state recall a particular case a few years back that was handled quietly in the North Carolina mountains, when a pair of lawyers thought that Taylor, a North Carolina Republican, ought to be questioned over a loan-fraud case that involved the bank he owns.

"Essentially the question is, `Why was he not interrogated? Why was he not interviewed?'" asked Forrest A. Ferrell, the lawyer who leveled the charges in 2003. "He knew about it all and should've at least been interrogated about it."

Ferrell still believes that John Ashcroft, who was then the attorney general, or other top officials prevented the interrogation of Taylor. But he wouldn't go into further details last week.

When the allegations surfaced in 2003, the Justice Department had no comment when asked whether Ashcroft or his aides had blocked an investigation of Taylor. On Tuesday, the Justice Department and Taylor couldn't be reached for comment, and an assistant at Ashcroft's Washington consulting firm said he'd have no comment.

The scandal in Washington reflects the reality about U.S. attorneys: They're political appointees, but once in office they're supposed to conduct independent investigations into wrongdoing. The latest developments reveal the pressures that some U.S. attorneys have faced in recent years.

The Justice Department fired eight attorneys around the country late last year. The department initially said the attorneys had poor performance reviews, but interviews and testimony before Congress show that some of them felt pushed to step up investigations into Democrats or go lightly on Republican targets.

"What's most troubling is the pressure (on attorneys) to bring prosecutions or not bring prosecutions," said Erwin Chemerinsky, a Duke University professor of law and political science. "When they're on the job, they're not supposed to act as political officials."

In North Carolina, e-mails disclosed last week reveal that U.S. Attorney Gretchen C.F. Shappert of Charlotte was among those on the list to be fired. She later was removed, and said last week that she had no idea why she was targeted.

In the case involving Taylor, Ferrell was representing a local lawyer who was caught up in a bank-fraud scandal earlier in the decade.

The man, Thomas Jones, was convicted of trying to defraud the Blue Ridge Savings Bank of Asheville, N.C., with bad loans. Taylor, who was then the congressman for the region, owned the bank.

Testimony in the trial, along with FBI interviews that were introduced as evidence, raised questions about Taylor as well. Jones and other defendants testified that Taylor knew about and even encouraged the fraudulent loans.

At the time, Taylor held one of the most powerful posts in Congress, serving as chairman of an Appropriations Committee subcommittee. Although his subcommittee didn't have jurisdiction over the Justice Department, he held powerful sway in funding matters.

In Asheville, investigators never interrogated Taylor.

Ferrell contends that someone in Washington—either Ashcroft or his subordinates—intervened.

"My information was that the U.S. attorney general in D.C. prohibited the U.S. Attorney's Office in North Carolina from interrogating Charles Taylor," Ferrell recalled last week. He'd give no other details.

"My information was confidential," he said.

Ferrell filed a motion based on his "information and belief," requesting an investigation into prosecutorial misconduct.

His co-counsel was W. Gene Sigmon, who declined to discuss the case last week.

"I just don't even want to talk about that," Sigmon said.

The U.S. attorney for the Western District of North Carolina at the time, Robert J. Conrad Jr., filed a vigorous response, saying the claims of interference weren't true.

"The premise of the defendant's motion is simply wrong," Conrad wrote.

His response also pointed out that Ferrell had no concrete information to back up his claims.

Nothing came of the motion. Jones was caught in a separate embezzlement charge, and Ferrell withdrew from representing him.

In 2005, Conrad was appointed a U.S. district judge. He couldn't be reached for comment.

In Washington, part of the debate revolves around whether politically appointed U.S. attorneys have been able to maintain independence once in office.

In North Carolina, U.S. attorneys—all Republican since 2001—haven't been shy about tagging Democrats.

Frank Whitney, who's now a U.S. district judge in Charlotte, served in Raleigh and covered North Carolina's Eastern District. He was previously the chairman of the Mecklenburg County Republican Party, and federal records show that he's contributed more than $10,000 to various Republican candidates and committees since 1994.

Whitney sent several Democrats to prison, including former state Agriculture Secretary Meg Scott Phipps, former Transportation Secretary Garland Garrett and former Rep. Frank Ballance and his son, Garey Ballance, a state judge.

Most recently, Whitney was the lead prosecutor in a case against North Carolina House Speaker Jim Black, who faces prison as well after pleading guilty last month to bribery and other public corruption charges. The current U.S. attorney, George E.B. Holding, is continuing the investigation. He, too, has given thousands to Republican candidates and committees.

Whitney also prosecuted Republicans, notably former state Sen. John Carrington and Larry Small, the head of the Smithsonian Institution in Washington.

In the Western District, Shappert, a former assistant to Conrad, has made headlines prosecuting drug and fraud cases.

Justice Department e-mails disclosed last week to the U.S. House and Senate judiciary committees show that Shappert was on a list under the category of "USAs (U.S. attorneys) We Now Should Consider Pushing Out."

Her name was removed from the list after an official said she didn't merit removal now.

Certainly, politics plays a role in appointments.

North Carolina Sens. Elizabeth Dole and Richard Burr, both Republicans, routinely suggest people to serve as U.S. attorneys or district judges. Some, like Whitney, have political backgrounds; others don't.

Former Sen. Jesse Helms plucked Anna Mills Wagoner, the U.S. attorney for North Carolina's Middle District, from her role as chief district judge in Rowan County. It was a post she'd held for a decade, and she'd planned to seek re-election before Helms' nomination.

Since Wagoner was confirmed in October 2001, she's focused on drug and terrorism cases. Last year, she prosecuted a child pornography case against a local police chief.

Some former U.S. attorneys have run afoul of the law themselves. Former U.S. Attorney Sam Currin, who worked out of Raleigh, was a protege of former Sen. Jesse Helms and the former chairman of the state Republican Party. He was indicted last year on charges of tax-fraud conspiracy, and pleaded guilty to three charges in November.

The prosecutor? Shappert. Another Republican.


(c) 2007, McClatchy-Tribune Information Services.

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