Go to Today's Top News

Go to National Section

Go to Home Page

Cisneros Indictment: Part Four

From the complete, unedited text of Independent Counsel David M. Barrett's Dec. 11, 1997, indictment against former housing secretary Henry G. Cisneros and three co-defendants.

Note: Typographical errors from the original document are preserved. Others may have been introduced by the scanning process.

COUNT ONE

(CONSPIRACY TO DEFRAUD THE UNITED STATES; CONSPIRACY TO COMMIT OFFENSES AGAINST THE UNITED STATES)

1. The paragraphs contained in "Background to All Counts" of the Indictment are realleged and incorporated by reference as though fully set forth herein.

I. THE CONSPIRACY AND ITS OBJECTS

1. From a date unknown to the Grand Jury, but at least by in or about the Summer of 1992, through on or about September 12, 1994, within the District of Columbia and elsewhere, the Defendants,

HENRY G. CISNEROS,
LINDA D. MEDLAR,
SYLVIA ARCE-GARCIA,
and
JOHN D. ROSALES,

did unlawfully, knowingly, and willfully, combine, conspire, confederate, and agree, together, with each other, and with and among other persons, both known and unknown to the Grand Jury:

A. To defraud the United States:

1. By impeding, impairing, obstructing, and defeating the lawful government functions of:

i) the United States Senate in the proper exercise of its constitutional duty and responsibility to advise and consent to the nomination of persons nominated by the President to be Cabinet officers;

ii) the FBI in the proper exercise of its lawful, authorized, governmental function to conduct background investigations as a means of ascertaining facts and information relevant to a putative Cabinet Officer's suitability for government employment in accordance with Executive Order 10450 and trustworthiness for clearance for access to information classified under the provisions of Executive Order 12356;

iii) the Department of Justice Personnel Security Office in the proper exercise of its lawful, authorized, governmental function to adjudicate the honesty, reliability, good character, and trustworthiness of a putative Cabinet Officer, so as to determine whether such individual warranted (a) a top secret national security clearance for access and exposure to information classified under, among other things, the provisions of Executive Orders 10450 and 12356 and (b) service as a Cabinet Officer; and

B. To commit offenses against the United States, including:

1. Violations of Title 18, United States Code, Section 1505, Obstructing and Endeavoring To Obstruct Inquiries Being Conducted by the United States Congress;

2. Violations of Title 18, United States Code, Section 1505, Obstructing and Endeavoring To Obstruct A Pending Proceeding Being Had Before the United States Department of Justice;

3. Violations of Title 18, United States Code, Section 1001, Making False and Misleading Statements to and Concealing Material Information from Government Departments and Agencies, including the FBI and the Department of Justice, Justice Management Division, Personnel Security Office; and

4. Violations of Title 31, United States Code, Section 5324(3), Structuring, Assisting In Structuring, And Attempting To Structure And Assist In Structuring, Transactions With A Financial Institution For The Purpose Of Evading The Financial Reporting Requirements of Title 31, United States Code, Section 5313(a).

1. It was part of the conspiracy that during the late Summer of 1992 through early 1994, CISNEROS continued to pay MEDLAR in order to ensure her public silence regarding, among other things, their relationship and the nature, purpose, and extent of his payments to her and to another woman, so that he could be nominated, confirmed, and serve as Secretary of HUD.

2. It was further a part of the conspiracy that CISNEROS would and did discuss with representatives of the President-elect the possibility of making additional payments to MEDLAR, including a "lump-sum" payment.

3. It was further a part of the conspiracy that in addition to his average monthly cash payments to MEDLAR of approximately $5,000 for the years 1990 through 1993, CISNEROS provided MEDLAR with an additional $16,000 in cash payments in $8,000 increments on or about December 16, 1992, and December 18, 1992, respectively, so that MEDLAR could use those funds to purchase a house in Lubbock, Texas, in her sister Patsy J. Wooten and her brother-in-law Allen R. Wooten's names, and CISNEROS and MEDLAR could conceal the identity of CISNEROS as the true source of the $l6,000 payment.

4. It was further a part of the conspiracy that after the President-elect announced his selection of CISNEROS to be HUD Secretary on December 17, 1992, CISNEROS continued to make cash payments to MEDLAR through on or about January 2l, 1993, when the Senate confirmed his nomination to be HUD Secretary, and thereafter, in order to ensure her public silence regarding, among other things, their relationship and the nature, purpose, and extent of his payments to her and to another woman, so that he could be nominated, confirmed, and serve as Secretary of HUD.

5. It was further a part of the conspiracy that CISNEROS would and did direct certain of his employees, including ARCE-GARCIA and ROSALES, to conceal from the FBI during its background investigation of CISNEROS information concerning his relationship with and payments to MEDLAR.

6. It was further a part of the conspiracy that CISNEROS would and did promise certain of his employees, including ARCE-GARCIA and ROSALES, as well as certain of his associates, jobs on his staff at HUD should he be confirmed.

7. It was further a part of the conspiracy that ARCE-GARCIA and ROSALES, as well as other employees and associates of CISNEROS, concealed information from and lied to the FBI during the FBI background investigation about CISNEROS's relationship with and payments to MEDLAR.

8. It was further a part of the conspiracy that CISNEROS, ARCE-GARCIA, and ROSALES, among others, would and did conceal from and misrepresent to the FBI during its background investigation facts and circumstances concerning the financial condition of Cisneros Communications.

9. It was further a part of the conspiracy that the conspirators would and did agree to conceal from the FBI, and through it, the Department of Justice Security Office, and the United States Senate, the true facts and circumstances concerning CISNEROS's payments to MEDLAR and to another woman.

10. It was further a part of the conspiracy that CISNEROS would and did conceal from and lie to the FBI about the true facts and circumstances concerning his payments to MEDLAR in order, among other things, to ensure that:

(i) the President-elect did not withdraw his selection and/or nomination to be HUD Secretary;

(ii) he was granted a top-secret security national security clearance, which was a prerequisite to service as HUD Secretary;

(iii) the United States Senate confirmed him as HUD Secretary; and

(iv) the IRS did not initiate an investigation into facts and circumstances surrounding his payments to MEDLAR, including any potential gift tax implications for him arising from such payments.

12. It was further a part of the conspiracy that CISNEROS would and did conceal from members of the Senate, including the Senate Banking Committee, certain information regarding the true facts and circumstances with respect to his relationship with and payments to MEDLAR and to another woman.

13. It was further a part of the conspiracy that CISNEROS would and did enlist the assistance of others to make payments to and arrange employment for MEDLAR in order, among other things, to reduce the amount of funds CISNEROS was personally to pay MEDLAR.

14. It was further a part of the conspiracy that CISNEROS, during his service as HUD Secretary, would and did continue to make payments to MEDLAR in order to continue to ensure her public silence concerning, among other things:

(i) the true facts and circumstances concerning his payments to her prior to his selection to be HUD Secretary;

(ii) the true facts and circumstances concerning his payments to her after he was selected to be, but before he was confirmed as, HUD Secretary;

(iii) his agreement with her, among other things, to conceal the true facts and circumstances concerning his payments to her from the FBI and through it, the Department of Justice Personnel Security Office and the United States Senate;

(iv) his payments to her during his tenure as HUD Secretary;

(v) his efforts to enlist the assistance of other persons to make payments to and arrange employment for MEDLAR in order to, among other things. reduce the amount of funds that he had to pay her; and

(vi) his false statements to the FBI during his background investigation.

III. OVERT ACTS

In furtherance of the aforesaid conspiracy, and to effect the objects thereof, in the District of Columbia and elsewhere, one or more of the defendants and other co-conspirators committed and caused to be committed one or more of the following overt acts, among others:

1. On or about November 22, 1992, CISNEROS executed an "Authorization for Release of Information," authorizing the FBI to obtain information about him for his background investigation.

2. On or about November 24, 1992, by telephone from San Antonio, Texas, CISNEROS discussed with MEDLAR conversations CISNEROS had with the President-elect concerning CISNEROS s potential selection as a Cabinet officer.

3. On or about December 2, 1992, by telephone from a location in Texas, CISNEROS discussed with MEDLAR his potential appointment as United States Senator for the State of Texas and his potential selection to be a Cabinet officer.

4. On or about December 3, 1992, CISNEROS caused $4,000 in U.S. currency to be deposited in MEDLAR's account at the Broadway National Bank.

5. On or about December 3, 1992, by telephone from San Antonio, Texas, CISNEROS discussed with MEDLAR the possibility that MEDLAR would make public disclosures concerning CISNEROS.

6. By on or about December 8, 1992, CISNEROS caused a Standard Form-86 (Questionnaire for Sensitive Positions), which he had completed and executed on or about December 7, 1992, to be provided to representatives of the President-elect in Washington, D.C.

7. On or about December 8, 1992, by telephone from Washington, D.C., CISNEROS had telephone conversations with MEDLAR.

8. Between on or about December 8, 1992, and December 9, 1992, CISNEROS met with representatives of the President-elect in Washington, D.C. and discussed issues that could potentially have affected his selection by the President-elect to be Secretary of HUD.

9. On or about December 11, 1992, by cellular telephone from a location in Texas, CISNEROS discussed with MEDLAR meetings he had in Washington, D.C. with representatives of the President-elect concerning his relationship and payments with MEDLAR.

10. On or about December 11, 1992, by telephone from San Antonio, Texas, CISNEROS discussed with MEDLAR a meeting he was to have in San Antonio, Texas with a representative of the President-elect concerning his relationship with and payments to MEDLAR.

11. On or about December 11, 1992, in San Antonio, Texas, CISNEROS met with a representative of the President-elect and discussed issues that could potentially have affected the President-elect's selection of him for the position of Secretary of HUD.

12. On or about December 11, 1992, by telephone from San Antonio, Texas, CISNEROS discussed with MEDLAR a meeting he had in San Antonio, Texas with a representative of the President-elect, which concerned his relationship with and payments to MEDLAR.

13. Between on or about December 13, 1992, and on or about December 14, 1992, by telephone from Little Rock, Arkansas, CISNEROS discussed with MEDLAR meetings he was going to have in Little Rock, Arkansas with the President-elect, and representatives of the President-elect, concerning his relationship with and payments to MEDLAR.

14. Between on or about December 13, 1992, and on or about December 16, 1992, CISNEROS met with the President-elect, and representatives of the President-elect, in Little Rock, Arkansas to discuss issues that could potentially have affected CISNEROS's selection to be Secretary of HUD.

15. On or about December 14, 1992, CISNEROS completed and executed a Supplement to the Standard Form-86.

16. On or about December 15, 1992, CISNEROS provided a completed and executed Supplement to the Standard Form 86 to representatives of the President-elect.

17. On or about December 16, 1992, at the direction of CISNEROS, ARCE-GARCIA deposited $8,000 in U.S. currency in MEDLAR's account at the Broadway National Bank.

18. On or about December 18, 1992, at the direction of CISNEROS, ARCE-GARCIA deposited $8,000 in U.S. currency in MEDLAR's account at the Broadway National Bank.

19. On or about December 22, 1992, in Washington, D.C., CISNEROS met with representatives of the President-elect to discuss CISNEROS's impending Senate confirmation hearing.

20. On or about December 22, 1992, CISNEROS caused a "Statement for Completion by Presidential Nominees," as required by rules of the Senate, to be transmitted via facsimile from San Antonio, Texas, to representatives of the President-elect in Washington, D.C.

21. On or about December 24, 1992, by telephone from San Antonio, Texas, CISNEROS discussed with MEDLAR his forthcoming Senate confirmation hearing.

22. On or about December 30, 1992, in Washington, D.C., as part of the FBI's background investigation of him, CISNEROS met with a Special Agent of the FBI.

23. On or about December 30, 1992, by telephone from a location in Texas, CISNEROS discussed with MEDLAR his interview by a Special Agent of the FBI, which took place earlier that day.

24. On or about December 31, 1992, in San Antonio, Texas, CISNEROS had a discussion with, among others, ARCE-GARCIA and ROSALES, concerning the background investigation of him being conducted by the FBI.

25. On or about December 31, 1992, in San Antonio, Texas, as part of the FBI's background investigation of CISNEROS, ARCE-GARCIA met with a Special Agent of the FBI.

26. On or about December 31, 1992, in San Antonio, Texas, as part of the FBI's background investigation of CISNEROS, ROSALES met with a Special Agent of the FBI.

27. On or about December 31, 1992, ARCE-GARCIA caused to be transmitted via facsimile to Washington, D.C., from San Antonio, Texas, an executed Form SF-171 with respect to her potential employment as a Special Assistant to the HUD Secretary.

28. On or about January 1, 1993, in Lubbock, Texas, Vera N. Jones met with a Special Agent of the FBI.

29. On or about January 4, 1993, CISNEROS caused $4,000 in U.S. currency to be deposited in MEDLAR's account at the Broadway National Bank.

30. On or about January 4, 1993, by telephone from Washington, D.C., CISNEROS discussed with MEDLAR investigative activity being conducted by the FBI concerning his background investigation.

31. On or about January 6, 1993, in San Antonio, Texas, as part of the FBI's background investigation of CISNEROS, ROSALES met with a Special Agent of the FBI.

32. On or about January 7, 1993, in Washington, D.C., as part of the FBI's background investigation of him, CISNEROS met with Special Agents of the FBI.

33. On or about Januarv 8, 1993, by telephone from Washington, D.C., as part of the FBI's background investigation of him, CISNEROS spoke with a Special Agent of the FBI.

34. On or about January 8, 1993, in Lubbock, Texas, as part of the FBI background investigation of CISNEROS, MEDLAR was contacted by a Special Agent of the FBI. Medlar declined to answer questions and requested that the FBI not recontact her.

35. On or about January 8, 1993, in Washington, D.C., CISNEROS attended a "mock confirmation hearing" and discussed with representatives of the President-elect answers he would provide to questions concerning, among other things, his relationship with, and payments of money to, MEDLAR.

36. Between on or about January 11, 1993, and on or about January 20, 1993, CISNEROS reviewed with representatives of the President-elect the contents of the FBI report of his background investigation.

37. In or about January 1993, in Washington, D.C., CISNEROS met with Senator Donald K. Riegle, then-Chairman of the Senate Banking Committee, and discussed issues relating to CISNEROS's confirmation as Secretary of HUD.

38. On or about January 12, 1993, in Washington, D.C., CISNEROS testified at his Senate Banking Committee confirrnation hearing, which hearing was conducted pursuant to the Senate's constitutional advice and consent power and responsibility.

39. On or about January 15, 1993, CISNEROS requested a complete liquidation of an annuity account he maintained at Lincoln Benefit Life Company.

40. On or about January 15, 1993, by telephone from San Antonio, Texas, CISNEROS discussed with MEDLAR both the FBI's investigative activity and his January 12, 1993 confirmation hearing.

41. On or about January 15, 1993, by telephone from San Antonio, Texas, CISNEROS discussed with MEDLAR the formation of a HUD management company.

42. On or about January 19, 1993, ROSALES caused to be transmitted via facsimile to Washington, D.C., an executed Form SF-171 with respect to his potential employment as a Special Assistant to the HUD Secretary.

43. On or about January 19, 1993, CISNEROS caused $1,000 in U.S. currency to be deposited in MEDLAR's account at the Broadway National Bank.

44. On or about January 21, 1993, by telephone from Washington, D.C., CISNEROS discussed with MEDLAR investigative activity conducted by the FBI with respect to his background investigation and conversations he had with members of the Senate concerning MEDLAR.

45. On or about January 21, 1993, in Washington, D.C., CISNEROS took an oath of office and became Secretary of HUD.

46. On or about January 28, 1993, CISNEROS caused $5,000 in U.S. currency to be deposited in MEDLAR s account at the Broadway National Bank.

47. Between on or about January 21, 1993, the date of CISNEROS's swearing-in as HUD Secretary, but before on or about March 31, 1993, by telephone from Washington, D.C., CISNEROS discussed with Michael A. Wooten the formation of a HUD management company.

48. On or about February 9, 1993, CISNEROS opened a checking account at the Crestar Bank, in Washington, D.C. in his own name.

49. On or about February 9, 1993, in Washington, D.C. CISNEROS caused to be deposited $29.686.06 of the $49,686.06 in proceeds from the liquidation of his annuity account with Lincoln Benefit Life Company into the Crestar Bank checking account.

50. On or about February 9, 1993, by telephone from Washington, D.C., CISNEROS discussed with MEDLAR the wiring of funds to MEDLAR.

51. On or about February 10, 1993, at Washington, D.C., CISNEROS caused $7,500 to be wire-transferred from his Crestar Bank checking account into MEDLAR's account at the First National Bank of Lubbock.

52. On or about February 16, 1993, at Washington, D.C., CISNEROS caused $15,000 to be wire-transferred from his Crestar Bank checking account into MEDLAR's account at the First National Bank of Lubbock.

53. On or about February 24, 1993, at Washington, D.C., CISNEROS caused $15,000 to be wire-transferred from his Crestar Bank checking account into MEDLAR's account at the First National Bank of Lubbock.

54. On or about March 15, 1993, at Washington, D.C., CISNEROS caused $10,875.45 to be wire-transferred from his Crestar Bank checking account into MEDLAR's account at the First National Bank of Lubbock.

55. In or about March, 1993, by telephone from Washington, D.C., CISNEROS discussed with MEDLAR the status of payments he was making to her.

56. On or about July 1, 1993, CISNEROS caused a $25,000 check drawn on a bank account maintained by CISNEROS and his wife Mary Alice Cisneros at Washington Federal Savings Bank, Washington, D.C. to be provided to the law firm of Wheatley & Sharpe, LLP, San Antonio, Texas.

57. On or about July 16, 1993, MEDLAR deposited into her account at First National Bank, a Cashier's Check dated July 8, 1993, in the amount of $15,000, which had been purchased by Wheatley & Sharpe, LLP, made payable to CISNEROS, and endorsed by CISNEROS over to MEDLAR.

58. On or about October 12, 1993, CISNEROS caused $4,000 in U.S. currency to be provided to MEDLAR in Lubbock, Texas.

59. On or about November 4, 1993, by telephone from Louisville, Kentucky, CISNEROS discussed with MEDLAR the payments of funds to MEDLAR on CISNEROS's behalf, via a third party.

60. Between in or about November and December 1993, MEDLAR caused letters regarding CISNEROS's payments to her, and other related matters, to be transmitted via facsimile to CISNEROS at his HUD office in Washington, D.C.

61. On or about December 3, 1993, CISNEROS provided $1,300 in U.S. currency to MEDLAR.

62. In or about January 1994, at the direction of MEDLAR, Michael A. Wooten traveled from Lubbock, Texas to San Antonio, Texas, to discuss with a third party the payment of funds on CISNEROS's behalf to MEDLAR, via that third party.

63. After he assumed the position of Secretary of HUD, from between on or about January 28, 1993 through on or about December 3, 1993, CISNEROS made a series of payments to MEDLAR, which totaled approximately $73,000.

64. On or about July 29, 1994, CISNEROS issued a Press Release through HUD's Public Affairs Office, entitled "Statement of Henry G. Cisneros, July 29, 1994," in which CISNEROS stated, among other things, that he had made no payments to MEDLAR since assuming the position of Secretary of HUD, in January 1993.

(All in violation of Title 18, United States Code, Section 371.)