Fenty General Counsel Halted Action Against Bank in Tax Fraud Case

"We have a good chance to recoup at least a significant part of the money lost in the fraud," Singer wrote in an e-mail obtained by The Washington Post. "I think we owe it to the Government and the taxpayers to pursue this, and don't know why we wouldn't. It would have absolutely no bearing on the grand jury proceedings as it relates only to the banks' own internal checks."

Nickles fired back minutes later, the records show, stressing that Fenty agreed with him.

"Tim Lynch, who is handling the grand jury, is getting cooperation from [Bank of America] and does not welcome interference," Nickles wrote in the final exchange, referring to the prosecutor on the case. "The mayor has spoken, and I trust you will listen."

Morrison, whom Nickles fired last month, said that he spoke directly with Lynch in his research and that the prosecutor, without urging one course or another, said the city's suit would not interfere with the bank's cooperation.

Nickles said he would not "get into a newspaper exchange with a former employee." He said he spoke with U.S. Attorney Jeffrey A. Taylor but declined to say what Taylor told him.

Taylor declined to comment about the case. In general, he said, his office is "always mindful" of how a suit could affect a criminal investigation but leaves the decision to D.C. officials.

Staff writer David Nakamura contributed to this report.