The Justice Department, after pledging its full cooperation, is now refusing to allow Bronx authorities to interview FBI agents and others in connection with the indictment of Labor Secretary Raymond J. Donovan.
Prosecutors for Bronx District Attorney Mario Merola said at a state court hearing here today that they had protested the department's refusal to permit questioning of the FBI agents and to supply certain documents, but to no avail.
They said they were told that they would have to wait until the FBI and Justice complete an inquiry into alleged improprieties by agency officials pertaining to the Donovan case.
Stephen S. Trott, assistant attorney general in charge of Justice's Criminal Division, told Merola in a letter Monday that the government investigation would be pursued with "all deliberate speed," but Trott said he could offer no target date for its completion.
The inquiry concerns allegations that a federal judge was misled in 1979 when government attorneys sought to justify the FBI's continued electronic surveillance of one of Donovan's co-defendants, reputed Mafia member William P. Masselli.
Tape recordings from that surveillance constitute the centerpiece of the state's case, which accuses Donovan, Masselli and eight others of defrauding the New York City Transit Authority of some $7.4 million on a subway construction project.
On Dec. 5, Masselli's lawyer, John Nicholas Iannuzzi, filed a motion to suppress the tapes. He alleged that they were tainted by "blatantly lawless tactics" involving a government informer named Michael Orlando.
Iannuzzi said that Orlando, who once worked as Masselli's chauffeur and allegedly served as his "hit man" in a 1978 Bronx murder, not only led FBI agents into Masselli's warehouse in 1979 to help them plant the bugs, but then started turning up in the taped conversations.
Masselli's lawyer said the government attorneys responded by telling the federal judge who authorized the surveillance that they needed to continue the taping, in part because "an unidentified individual referred to as 'Mike' " had been overheard.
Bronx prosecutor Stephen R. Bookin said in court today that two days after Iannuzzi filed his motion, a high-level government delegation, including John E. Otto, assistant FBI director; Rudolph Guiliani, U.S. attorney for the Southern District of New York; and Paul E. Coffey, deputy chief of the Justice Department's Organized Crime section, visited District Attorney Merola.
In a Nov. 28 letter, Coffey had told Merola that the government was "committed to full disclosure to your staff of all relevant information in a prompt and efficient manner."
Bookin said that on Dec. 7 he and Merola were told that "an internal investigation" would be conducted in light of Iannuzzi's charges, but they were assured it would take only about two weeks to complete. Bookin said Bronx authorities were told they would then be free to talk to knowledgeable FBI agents and others in preparing a response to Iannuzzi's motion.
Today, however, Bookin told Bronx Supreme Court Judge John Collins that an end to the inquiry is still "weeks" away and that Justice has refused to supply the Bronx prosecutors with "at least three documents that we believe would cast light on this issue and sustain our position."
The documents, it is understood, concern internal FBI protests by agents assigned to the Masselli investigation regarding their superiors' handling of the case.
Two of those agents reportedly are potential targets of the current FBI inquiry and have retained former Justice Department prosecutor Thomas Puccio to represent them.