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Cisneros Indictment: Part Three

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.

Medlar's Lawsuit Against Cisneros For Breach Of Contract And Fraud And Cisneros's Press Release

1. On or about July 29, 1994, MEDLAR filed a lawsuit against CISNEROS in the 72nd District Court of Lubbock County, Texas, Case Number 94-547, 854. The Complaint sought damages based on allegations of breach of contract and fraud, allegedly arising from CISNEROS's promise to support MEDLAR financially.

2. After being advised of the lawsuit, while still serving as Secretary of HUD, CISNEROS issued a Press Release through HUD's Public Affairs Office, entitled "Statement of Henry G. Cisneros, July 29, 1994." In that statement, CISNEROS stated the following, among other things:

In 1988 in San Antonio I acknowledged a romantic relationship with MEDLAR. That relationship subsequently ended.

* * * *

When I was nominated to become Secretary of Housing and Urban Development, I explained to Ms. MEDLAR that I would now be on a fixed government salary and would not be able to assist as I had, but would use some of my savings to give her some assistance so that she could transition to a job over the forthcoming year.

I have not provided any assistance since assuming office in January of 1993. I felt that I had done everything a person could reasonably do, especially since I had assisted her for the better part of three years.

The Inside Edition Episode

1. On September 12, 1994, MEDLAR appeared on a broadcast of the television program Inside Edition. During the Inside Edition program, MEDLAR asserted, among other things, that CISNEROS, then-Secretary of HUD, had lied to the FBI during the course of its background investigation of him. Specifically, MEDLAR asserted that CISNEROS had lied to the FBI about, among other things, the amount of the payments that he had made to her. During the episode, Inside Edition also broadcast a deposit slip reflecting a payment made by CISNEROS to MEDLAR in the amount of $4,500, an amount larger than the $2,500 figure that CISNEROS had told the FBI was the largest single payment he had ever made to MEDLAR.

2. During the September 12, 1994 episode, Inside Edition also broadcast excerpts from tape-recorded conversations between CISNEROS and MEDLAR. CISNEROS and MEDLAR had conversations before, during, and after CISNEROS's FBI background investigation and Senate Banking Committee confirmation hearing.

Subsequent Investigations Of Cisneros; Medlar's Violation Of Her Immunity Agreement

1. As a result of the allegations made by MEDLAR during the Inside Edition program, in or about September 1994, pursuant to the Independent Counsel Reauthorization Act of 1994, Title 28, United States Code, Section 592, et seq., United States Attorney General Janet Reno initiated an inquiry concerning allegations regarding whether CISNEROS lied to the FBI during his background investigation.

2. On or about September 28 and 29, 1994, Special Agents of the FBI interviewed MEDLAR in Lubbock, Texas. During the interviews, MEDLAR stated, in substance, and among other things, that she was then furnishing to the Special Agents for duplication original cassette tapes of her conversations with CISNEROS and others. The tapes she provided, however, were not originals.

3. In or about September 1994, as a result of MEDLAR's lawsuit and reports of the size of the payments that CISNEROS made to MEDLAR, the Internal Revenue Service initiated an investigation of CISNEROS.

4. On or about October 14, 1994, the Department of Justice initiated a preliminary investigation.

5. On or about March 13, 1995, at the conclusion of the preliminary investigation, Attorney General Reno filed an "Application to the Court Pursuant to 28 U.S.C. § 592(c)(1) for Appointment of an Independent Counsel" asking a Special Division of a United States Court of Appeals for the District of Columbia Circuit to appoint an Independent Counsel to investigate and, if appropriate, prosecute allegations concerning, among other things, CISNEROS's false statements to the FBI regarding the payments that he made to MEDLAR.

6. On or about May 24, 1995, a Special Division of the United States Court of Appeals for the District of Columbia appointed David M. Barrett as Independent Counsel in In re: Henry G. Cisneros, authorizing him to investigate, and, if warranted, prosecute certain matters.

7. On or about October 31, 1995, pursuant to the Court of Appeals's May 24, 1995 Order, a Federal Grand Jury began investigating, among other things, whether CISNEROS committed violation(s) of federal criminal law by making, or conspiring with others to make, false statements to the FBI during the course of its background investigation of him.

8. Since on or about October 31, 1995, Special Agents of the FBI, among others, assisted the Federal Grand Jury in its investigation.

9. On or about November 27 and 28, 1995, pursuant to the advice of counsel, MEDLAR entered into an "Immunity Agreement" with the Office of Independent Counsel. Pursuant to the terms of the Immunity Agreement, MEDLAR agreed, in pertinent part: (a) to waive her Fifth Amendment constitutional right against self-incrimination; (b) to provide truthful, full, and complete information to the Office and to law enforcement personnel, including the FBI; (c) to answer truthfully, fully, and completely all questions concerning the subject matter of the Office's investigation; and (d) not to attempt to protect or implicate anyone through false information or omission.

10. In violation of the terms and conditions of the Immunity Agreement, MEDLAR made the following false statement, among others, to Special Agents of the FBI who were assisting a Federal Grand Jury in its investigation: MEDLAR falsely advised Special Agents of the FBI during an interview in Washington, D.C., among other things, that she provided the original tapes of her conversations with CISNEROS and others to the IRS on May 31, 1995.

The Defendants

1. HENRY G. CISNEROS was the Secretary of HUD from in or about January 1993 through in or about January 1997. He was the Mayor of San Antonio, Texas from in or about January 1981 through in or about May 1989. He also served as Deputy Chairman of the Federal Reserve Bank of Dallas from 1991 through in or about August 1992.

2. LINDA D. MEDLAR was a former campaign fundraiser for CISNEROS in San Antonio, Texas, a former political consultant, and CISNEROS's former girlfriend.

3. SYLVIA ARCE-GARCIA was a former employee of CISNEROS, employed by Cisneros Communications in San Antonio, Texas, who later became a Personal Assistant to CISNEROS at HUD.

4. JOHN D. ROSALES was a former employee of CISNEROS, employed by Cisneros Communications in San Antonio, Texas, who later became a Personal Assistant to CISNEROS at HUD.

Other Individuals And Entities

1. Michael A. Wooten was MEDLAR's nephew and a principal of West Texas Lighting, Co., Inc. ("WTL").

3. Patsy J. Wooten was MEDLAR's sister and Michael A. Wooten's mother, and the President of WTL.

4. Allen R. Wooten was Patsy J. Wooten's husband, Michael A. Wooten's father, and a principal of WTL.

5. WTL was a business with its principal office in Lubbock, Texas, engaged in the business of electrical contracting.

6. Vera N. Jones was the mother of MEDLAR and Patsy J. Wooten, and a resident of Lubbock, Texas.

7. Morris D. Jaffe, Sr. was a San Antonio businessman and a personal and political benefactor of CISNEROS and others.

8. Cisneros Communications was a sole proprietorship owned by CISNEROS, located in San Antonio, Texas, engaged in the principal activity of arranging speaking engagements for CISNEROS.

9. Cisneros Asset Management Company ("CAMCO") was a business principally owned by CISNEROS, located in San Antonio and Houston, Texas, engaged in the business of managing pension funds for institutions and organizations.

10. Broadway National Bank was a federally-insured bank located in San Antonio, Texas, where MEDLAR maintained a checking account into which CISNEROS, personally and through others, made numerous cash deposits.

11. First National Bank of Lubbock was a federally-insured bank located in Lubbock, Texas, where MEDLAR maintained a checking account into which CISNEROS, personally and through others, made payments to MEDLAR.

12. Crestar Bank was a federally-insured bank located in Washington, D.C., where CISNEROS maintained a checking account, which he utilized to transfer payments into MEDLAR's account at First National Bank of Lubbock.

13. Lincoln Benefit Life Company was a life insurance company located in Lincoln, Nebraska, where CISNEROS had purchased an annuity, some of the proceeds of which were paid to MEDLAR.