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Independent Counsel, Witness in Cisneros Probe at Odds

By Toni Locy and Guy Gugliotta
Washington Post Staff Writers
Saturday, November 16, 1996; Page A04

A rift has developed between the independent counsel investigating Secretary of Housing and Urban Development Henry Cisneros and one of the probe's star witnesses, Cisneros's former mistress, sources close to the investigation said yesterday.

The sources, who requested anonymity, said independent counsel David M. Barrett has had a falling-out with Linda Medlar, who was given immunity from prosecution in November 1995 in exchange for her cooperation.

One area Barrett is exploring is the authenticity of tape recordings Medlar secretly made of her and Cisneros discussing payments he made to her, the sources said. She later sold the tapes to the tabloid television program "Inside Edition."

A prosecutor in Barrett's office, Marc Jackowski, declined to comment.

Barrett's prosecutors recently subpoenaed Medlar's former attorneys -- Floyd Holder and Bruce Magness of Lubbock, Tex. -- and practically every member of Holder's law firm to testify before a grand jury in Washington.

On Thursday, Holder lost an attempt to fight off the subpoena during a secret, closed-door hearing before Chief U.S. District Judge John Garrett Penn. Penn ordered Holder to testify next week despite Holder's concerns about breaching the attorney-client privilege, according to the sources.

Hints of a dispute between Barrett's office and Medlar were first apparent in September, when investigators executed a search warrant on her Texas home, carting off five boxes. Prosecutors usually don't have to use a court order to get information from a cooperating, immunized witness.

Holder declined to comment. Medlar's current attorney, David Boyd, who attended Thursday's hearing before Penn, also declined to comment, as did Cono Namorato, Cisneros's attorney.

Barrett was appointed in May 1995 to investigate what Attorney General Janet Reno called "false statements" made by Cisneros to FBI agents conducting a background check before his confirmation as secretary of HUD. Cisneros told the FBI he had been paying Medlar "no more than $10,000 per year" from 1990 to 1993, Reno said, when in fact he had paid $48,000 to $60,000 annually.

The independent counsel was also given the task of determining whether Cisneros and Medlar conspired to conceal information concerning his payments to her.

In the winter of 1992-93, Medlar recorded conversations with Cisneros and discussed with him the effect the payments could have on his confirmation by the Senate. The two conducted a long affair while Cisneros was mayor of San Antonio. It ended in 1989.

Medlar also filed a lawsuit against Cisneros when he stopped making the payments in 1993, after leaving his lucrative work as a financial consultant to join the Clinton administration. She alleged that he had promised to pay her $4,000 a month until her daughter graduated from college in 1999. Cisneros eventually settled the suit for $49,000.

Holder initially represented Medlar when she sued Cisneros. He handed the case off to Magness, who represented her at the time she sold copies of her taped conversations with Cisneros to "Inside Edition" in 1994. But Magness handed the case back to Holder, who negotiated the immunity agreement for her with Barrett.

© Copyright 1996 The Washington Post Company

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