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Cisneros Indictment: Part Five

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 TWO

(FALSE, FICTITIOUS, AND FRAUDULENT STATEMENT AND REPRESENTATION ON DECEMBER 14, 1992)

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

2. On or about December 7, 1992, CISNEROS completed and executed the SF-86.

3. On or about December 14, 1992, CISNEROS completed the Supplement to the SF-86, and executed it immediately below the following statement:

I understand that the information being provided on this Supplement to the SF-86 is to be considered part of the original SF-86 ... and a false statement on this form is punishable by law.

4. Question 10S of the Supplement to the SF-86 provided, in pertinent part, the following:

Is there anything in your personal life that could be used by someone to coerce or blackmail you? Is there anything in your life that could cause an embarrassment to you or to the President if publicly known? If so, please provide full details.

5. On or about December 14, 1992, in a matter within the jurisdiction of departments and agencies of the United States, that is, the Federal Bureau of Investigation and the United States Department of Justice, CISNEROS knowingly and willfully, made and used a false writing and statement, knowing the same to contain a material false, fictitious, and fraudulent statement, by stating the following in response to Question 10S of the SF-86 Supplement:

COUNT	FALSE, FICTITIOUS, AND FRAUDULENT STATEMENT
Two	CISNEROS stated, in substance, that there was no basis upon which he could have been subjected to coercion or blackmail.

(In violation of Title 18, United States Code, Section 1001.)

COUNTS THREE THROUGH FIVE

(FALSE, FICTITIOUS, AND FRAUDULENT STATEMENTS AND REPRESENTATIONS ON DECEMBER 30, 1992)

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

2. On or about December 30, 1992, CISNEROS was interviewed at the Presidential Transition Office, located at 1120 Vermont Avenue, Northwest, Washington, D.C., by a Special Agent of the FBI. That interview was conducted as part of one of the lawful, authorized, governmental functions of the FBI, that is, to conduct full-field background investigations of potential high-ranking government officials such as Cabinet-level designees.

3. Prior to beginning the interview, a Special Agent of the FBI advised CISNEROS, in substance, that the purpose of the interview was to ensure that complete, current, and accurate information would be available and obtained concerning CISNEROS's background.

4. The Special Agent of the FBI further advised CISNEROS, in substance, that such information was necessary in order to assist the FBI in conducting a thorough background investigation of him regarding his nomination for the position of Secretary of Housing and Urban Development.

5. CISNEROS previously had been advised, in substance, that it was necessary for him to be completely truthful and forthcoming during the background investigation, so as not to interfere with or impede the background investigation or the nomination or confirmation process.

6. The most critical portion of CISNEROS's background investigation, as in any background investigation, consisted of the FBI's background interviews of him.

7. CISNEROS knew that the information provided to the FBI during the FBI interviews would be utilized by the FBI in order to identify leads, determine whether to interview additional individuals, determine whether to ask additional questions of CISNEROS, and determine whether to provide to other law enforcement agencies such as the IRS adverse information developed during the interviews.

8. On or about December 30, 1992, in the District of Columbia, during an interview with a Special Agent of the Federal Bureau of Investigation, in a matter within the jurisdiction of departments and agencies of the United States, that is, the Federal Bureau of Investigation and the United States Department of Justice, CISNEROS knowingly and willfully, made the following material false, fictitious, and fraudulent statements and representations:

COUNT	FALSE, FICTITIOUS, AND FRAUDULENT STATEMENT
Three	CISNEROS stated that the completed and executed Standard Form 86 and the Standard Form-86 Supplement were accurate and correct.
Four	CISNEROS stated that he was unaware of anything that could have been used to coerce or compromise him if he were to be nominated and confirmed as Secretary of HUD.
Five	CISNEROS stated that he had only "been with" one woman, other than MEDLAR, during his marriage to his wife.

(In violation of Title 18, United States Code, Section 1001.)

COUNTS SIX THROUGH NINE

(SCHEME TO FALSIFY, CONCEAL, AND
COVER UP A MATERIAL FACT BY TRICK, SCHEME, AND DEVICE)

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

2. On or about December 30, 1992, in the District of Columbia, during an interview with a Special Agent of the Federal Bureau of Investigation, in a matter with the jurisdiction of departments and agencies of the United States, that is, the Federal Bureau of Investigation and the United States Department of Justice, CISNEROS knowingly and willfully, falsified, concealed, and covered up, by means of trick, scheme, and device, material facts, in that CISNEROS:

COUNT	ACT OF CONCEALMENT
Six	Concealed and covered up the fact that he was making payments to MEDLAR.
Seven	Concealed and covered up the fact that MEDLAR threatened to disclose publicly that he was making payments to her.
Eight	Concealed and covered up the fact that he had "structured" certain payments to MEDLAR in order to avoid the triggering of a Currency Transaction Report, by paying MEDLAR $8,000 on December 16, 1992 and paying her $8,000 on December 18, 1992, 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 $16,000 payment.
Nine	Concealed and covered up the fact that, despite making payments to MEDLAR substantially in excess of $10,000 per year since 1990, he had not filed informational Gift Tax Returns with the Internal Revenue Service.

(In violation of Title 18, United States Code, Section 1001.)

COUNTS TEN THROUGH SIXTEEN

(FALSE, FICTITIOUS, AND FRAUDULENT STATEMENTS AND REPRESENTATIONS ON JANUARY 7, 1993)

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

2. On or about January 7, 1993, as a result of information developed during the course of the FBI's full field background investigation and the December 30, 1992 interview, CISNEROS was interviewed for a second time by the FBI.

3. That interview took place pursuant to a January 7, 1993 directive issued under the name of the Director of the FBI.

4. The January 7, 1993 directive instructed agents of the FBI to recontact CISNEROS. Pursuant to the directive, the agents were instructed to reinterview CISNEROS and address the following issues, among others:

a. Advise Mr. CISNEROS that he should be completely candid during this interview, that he should provide any information not previously provided, and that if there is any other information such as other affairs, payments made to any other individuals, etc., that it would be in his best interest to come forth with that information now.

* * *

b. Regarding affair with MEDLAR, did it cause the separation from his wife, or did it occur after they were separated?

c. Is he making payments to MEDLAR, or has he ever made payments to her, for what reason, and how much?

d. Does his wife know that he was/is making payments to Linda MEDLAR?

e. If she doesn't know, what would his wife do if she found out?

f. Who ended the affair between CISNEROS and MEDLAR (him or her), and for what reason?

g. When was his last contact with her?

h. Does he maintain any contact with her currently, or does she maintain any contact with him, or is he aware of any attempts by her to contact him (by phone, in writing, in person)? Does his wife know?

* * *

i. Interview of ROSALES indicates that he (ROSALES) took calls from MEDLAR at Cisneros Communications from 10/92 to 12/92, the most recent being on 12/29/92, when MEDLAR indicated that if appointee did not call her back, she would have "to take action." What did she mean by that statement? Did CISNEROS call her back?

5. On or about January 7, 1993, a separate directive was issued under the name of the Director of the FBI instructing that additional investigation was necessary in order to obtain further information concerning, and to determine, among other things, the veracity of statements made by CISNEROS's former accountant concerning the amount of payments made by CISNEROS to MEDLAR.

6. The January 7, 1993 interview took place at the Presidential Transition Office, located at 1120 Vermont Avenue, Northwest, Washington, D.C.

7. That interview was conducted by Special Agents of the Federal Bureau of Investigation pursuant to one of the lawful, authorized, governmental functions of the FBI, that is, to conduct full-field background investigations of potential high-ranking government officials such as Cabinet-level designees.

8. On or about January 7, 1993, in the District of Columbia, during an interview with Special Agents of the Federal Bureau of Investigation, in a matter within the jurisdiction of departments and agencies of the United States, that is, the Federal Bureau of Investigation and the United States Department of Justice, CISNEROS knowingly and willfully, made the following material false, fictitious, and fraudulent statements and representations:

COUNT	FALSE, FICTITIOUS, AND FRAUDULENT STATEMENT
Ten	CISNEROS stated that the payments made to MEDLAR did not constitute "hush money" payments.
Eleven	CISNEROS stated that he was not "currently" making payments to MEDLAR.
Twelve	CISNEROS stated that the highest single payment that he had ever made to MEDLAR was approximately $2,500.
Thirteen	CISNEROS stated that the total payments that he had made to MEDLAR never exceeded $10,000 per year.
Fourteen	CISNEROS stated that MEDLAR never threatened, coerced, or ever tried to obtain money from him.
Fifteen	CISNEROS stated that he had not had substantial at length discussions with MEDLAR since early 1991.
Sixteen	CISNEROS stated that he had only had one extramarital relationship, other than that with MEDLAR, during his marriage to his wife.

(In violation of Title 18, United States Code, Section 1001.)

COUNT SEVENTEEN

(SCHEME TO FALSIFY, CONCEAL, AND COVER UP A MATERIAL FACT BY TRICK, SCHEME, AND DEVICE)

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

2. On or about January 7, 1993, in the District of Columbia, during an interview with Special Agents of the Federal Bureau of Investigation, in a matter within the jurisdiction of departments and agencies of the United States, that is, the Federal Bureau of Investigation and the United States Department of Justice, CISNEROS knowingly and willfully, falsified, concealed. and covered up, by means of trick, scheme, and device, material facts, in that CISNEROS:

COUNT	ACT OF CONCEALMENT
Seventeen	Failed to disclose to the FBI that, on or about December 31, 1992, he had directed defendants GARCIA and ROSALES, then-employees of his company, Cisneros Communications, not to inform the FBI about either the fact that he was making payments to MEDLAR or the amounts of such payments to MEDLAR.

(In Violation of Title 18, United States Code, Section 1001.)

COUNT EIGHTEEN

(OBSTRUCTION OF JUSTICE)

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

2. On or about December 15, 1992, CISNEROS submitted to representatives of the Clinton-Gore Transition Team the completed and executed SF-86 and the Supplement to the SF-86 (collectively, "the SF-86").

3. The SF-86 provided, among other things, the following:

The U.S. Government has conducted background investigations for over 50 years. It does this to establish that applicants for or incumbents in sensitive positions, either employed by the Government or working for the Government under contract, are eligible for a required security clearance or for performing sensitive duties. We use the information from this form primarily as the basis for an investigation that will be used to determine your eligibility for a national security position.

4. In accordance with the terms of the SF-86, the SF-86 was subsequently utilized by the Federal Bureau of Investigation as a primary basis for its background investigation of CISNEROS.

5. Among other things, the SF-86 was utilized by the Federal Bureau of Investigation to identify questions to ask CISNEROS during his interviews, to identify leads, and to compile information to be included in its final background investigation report.

6. As part of the FBI background investigation of CISNEROS, which was conducted as part of one of the FBI's lawful, authorized, governmental functions, CISNEROS was interviewed by a Special Agent of the FBI on December 30, 1992.

7. As part of the FBI background investigation of CISNEROS, which was conducted as part of one of the FBI's lawful, authorized, governmental functions, CISNEROS was subsequently interviewed by Special Agents of the FBI on January 7, 1993.

8. CISNEROS's final background report was based substantially upon statements and representations made to the FBI by CISNEROS during the interviews and in the SF-86.

9. In or about December 1992, pursuant to the MOU, the Executive Orders, the SF-86, and the Department of Justice's statutory and regulatory authority, the Department of Justice Personnel Security Office, Justice Management Division, began the process of adjudicating whether to grant national security clearances to individuals such as CISNEROS who were nominated to serve in high-ranking Clinton Administration positions such as Cabinet Secretaries.

10. In conducting its national security clearance inquiry regarding CISNEROS, the Department of Justice Personnel Security Office relied on the veracity of the statements made by CISNEROS and others during their FBI interviews, which interviews were included in the FBI background report. It also relied on the integrity and accuracy of the statements and representations made by CISNEROS in the SF-86.

11. In January 1993, the Department of Justice Personnel Security Office completed its inquiry regarding CISNEROS and granted CISNEROS a top secret national security clearance. CISNEROS's top secret national security clearance was based upon the information contained in CISNEROS's FBI background report, and principally upon the information that CISNEROS provided to the FBI during his FBI interviews and in the SF-86.

12. In December 1992 and January 1993, in the District of Columbia, CISNEROS unlawfully, knowingly, and willfully did corruptly influence, obstruct, and impede, and endeavor corruptly to influence, obstruct, and impede, the due and proper administration of the law under which a pending proceeding was being had, which pending proceeding was being conducted by the United States Department of Justice Personnel Security Office, Justice Management Division, a component of the United States Department of Justice, a department of the United States, concerning whether to grant CISNEROS a top secret national security clearance, by making and causing to be made, false, fictitious, fraudulent, and misleading statements and representations, and concealing material facts and information, as set forth more fully and underscored in Counts Two through Seventeen of this Indictment.

(In violation of Title 18, United States Code, Sections 1505.)

COUNT NINETEEN

(FALSE, FICTITIOUS, AND FRAUDULENT STATEMENT AND REPRESENTATION ON FEBRUARY 13, 1995)

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

2. On or about February 13, 1995, ROSALES was interviewed by Special Agents of the Internal Revenue Service in connection with a criminal investigation.

3. Before the interview concluded, ROSALES submitted a sworn written statement to the Special Agents of the IRS, in which he made certain statements concerning CISNEROS.

4. On or about February 13, 1995, in the District of Columbia, in a matter within the jurisdiction of an agency of the United States, that is, the Internal Revenue Service, ROSALES knowingly and willfully, made and used a false writing and statement, which was made under oath, knowing the same to contain a material false, fictitious, and fraudulent statement, in that such writing stated the following: "I never knew of the payments to MEDLAR until I was in D.C. I was surprised when I heard and remember thinking that I didn't know where CISNEROS would get the money from."

(In violation of Title 18, United States Code, Section 1001.)

COUNT TWENTY

(FALSE, FICTITIOUS, AND FRAUDULENT STATEMENT AND REPRESENTATION ON AUGUST 21, 1996)

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

2. On or about August 21, 1996, ROSALES was interviewed by Special Agents of the Federal Bureau of Investigation in connection with a criminal investigation.

3. On or about August 21, 1996, in the District of Columbia, during the course of that interview, in a matter within the jurisdiction of a department and agency of the United States, that is, the Federal Bureau of Investigation, ROSALES knowingly and willfully, made the following material false, fictitious, and fraudulent statement and representation:

COUNT	FALSE, FICTITIOUS, AND FRAUDULENT STATEMENT
Twenty	ROSALES stated that while he was employed at Cisneros Communications, he was not aware that CISNEROS was making payments to MEDLAR.

(In violation of Title 18, United States Code, Section 1001.)

COUNT TWENTY-ONE

(FALSE, FICTITIOUS, AND FRAUDULENT STATEMENT AND REPRESENTATION ON SEPTEMBER 17, 1996)

l. The paragraphs contained in "Background To All Counts" of the Indictment and within Count One of the Indictment are realleged and incorporated by reference as though fully set forth herein.

2. On or about September 17, 1996, MEDLAR was interviewed by a Special Agent of the Federal Bureau of Investigation in connection with a criminal investigation.

3. On or about September 17, 1996, in the District of Columbia, during the course of the interview with a Special Agent of the Federal Bureau of Investigation, in a matter within the jurisdiction of a department and agency of the United States, that is, the Federal Bureau of Investigation, MEDLAR knowingly and willfully, made the following material false, fictitious, and fraudulent statement and representation:

COUNT	FALSE. FICTITIOUS. AND FRAUDULENT STATEMENT
Twenty-One	MEDLAR stated that she had provided to the IRS on May 31, 1995 the original tapes of her recorded conversations with CISNEROS, when, in truth and fact, as she well knew, on May 31, 1995 she furnished copies of those tapes to the IRS.

(In violation of Title 18, United States Code, Section 1001.)

A TRUE BILL:

Dated: December 11, 1997
DAVID M. BARRETT
INDEPENDENT COUNSEL