Smith Bagley, a North Carolina tobacco fortune heir and friend of President Carter, has accused Deputy Attorney General Charles B. Renfrew of covering-up and lying about the findings of an internal Justice Department investigation of alleged misconduct by the prosecutors who directed a fraud and stock manipulation case against him last year.
Renfrew denies the charges.
Bagley was acquitted a year ago without calling any defense witnesses. The trial judge had said he was ashamed and embarrassed by the government's case.
The Washington businessman began a personal campaign against the prosecutors after a letter they wrote criticizing the judge was leaked to the press. That "effectively robbed me of my acquittal in the public eye," Bagley complained to Attorney General Benjamin R. Civiletti in a July 20 letter.
The department's Office of Professional Responsibility, under the direction of Michael E. Shaheen Jr., investigated Bagley's complaints of prosecutorial misconduct and issued a secret report to Renfrew this spring. In May Renfrew issued a press release saying Shaheen's review "found no errors or improprieties on the part of the prosecution team that prejudiced the rights of the defendants."
Bagley called that a "deliberate lie" in his letter of complaint to Civiletti, which demanded release of the report. He said he knew from "unimpeachable sources" that the report did find "inappropriate conduct" by U.S. Attorney H.M. Michaux, Assistant U.S. Attorney Patricia Lemley and FBI agent Zachary Lowe. A source close to Bagley said he got the information from Shaheen, who normally discusses the results of investigations with complainants.
"The department's deliberate false press release covering up the misconduct of the prosecutors is even more disturbing and dangerous than the original misconduct itself," Bagley wrote.
The Bagley charges against Renfrew came at a time when Civiletti also has been accused of lying -- in an exchange with President Carter about the foreign agents case against Billy Carter -- and Shaheen's office is conducting an investigation of the attorney general's conduct.
Shaheen will report the results of this latest inquiry to Wade McCree, the solicitor general. The Bagley complaint raises questions about whether department superiors can ignore or subvert the findings of Shaheen's supposedly independent, ethical watchdog office.
Renfrew said in a recent phone interview that the press release was accurate because "I didn't say there weren't errors, just that there were none that prejudiced the rights of the defendants. The words were chosen with some care." He said the press release had Shaheen's concurrence. Shaheen said he was out of town at the time.
Renfrew, a former federal judge in San Francisco, noted that the press release also said the prosecutors had been "counseled" about their performance in the case. "I called them in and said 'You have to maintain security [from leaks], you have to exercise judgment of what you write [about the trial judge]," he said.
The Bagley letter said Shaheen's investigation found that Lemley, the trial prosecutor, exercised poor judgment in a number of areas and that Michaux was "an ineffective U.S. attorney" who had been responsible for leaking a number of stories to the press that were "highly prejudicial to me."
Bagley declined to comment on the letter in a recent telephone interview, saying he wanted to get Civiletti's response first.
Shaheen's office has been in the spotlight because of its role in the Billy Carter case, the investigation of leaks to the press in the FBI's undercover Abscam bribery investigation of congressmen and an annual report that criticized both the White House and Civiletti for delaying recommended disciplinary actions last year against a U.S. attorney in California and a U.S. marshal from Kentucky.