The Insider

Body Count
Maybe it does pay to be a Friend of Bill. After asking Attorney General Janet Reno to authorize the Justice Department to be "more forthcoming" to "appropriate city authorities" on the FBI's City Hall sting, Mayor Bob Lanier reports that the G-men have indeed opened a limited line of communication with Rusty Hardin, the attorney hired by the city to act as its liaison with the feds. Hardin confirms that he's making periodic contact with the FBI, although he says he's not been made privy to information regarding allegations against specific councilmembers. The lawyer also has spoken to Mike Attanasio, the assistant U.S. attorney handling the investigation.

One upshot of the communications, at least according to Lanier, is that federal investigators have given tacit approval to the city's moving forward with the Council-approved proposal by developer Wayne Duddlesten to build a new hotel near the Brown Convention Center. Hardin says the FBI is telling him not who is guilty, but who is clean, and the latter category includes the negotiating teams for the hotel project on both the city and Duddlesten sides.

The mayor also disclosed he had a second, previously unreported meeting with FBI agents. Lanier's first session with the FBI occurred the day in early May that agents visited councilmembers and, in effect, publicly announced the investigation. Lanier characterizes that initial meeting as "kind of a name, rank and serial number" briefing. At a subsequent meeting following his June 4 letter to Reno, Lanier says, he explained to the agents he "didn't want to step on their investigation" but that the city needed more information on whether it should proceed with the hotel project and how it could avoid impeding the probe. After the meeting, the info pipeline was activated. Lanier pronounces himself "pretty satisfied with relations as they are now, and I'm trying to take an impartial status" on the federal investigation.

Like Hardin, Lanier claims the FBI has not provided him specific information concerning councilmembers under investigation. Yet sources from a group of state legislators who had gone to his office several weeks ago say Lanier indicated that some councilmembers may indeed be indicted. State Senators John Whitmire and Mario Gallegos were among those who met with the mayor to argue that Lanier should oppose the candidacy of attorney Vidal Martinez to replace Betti Maldonado as the city's representative on the Port Authority. Maldonado has admitted helping undercover agents pass money to some councilmembers in connection with the Duddlesten hotel proposal.

According to several participants, Lanier described City Hall as "in turmoil" and said he was preparing for "maybe three Hispanic councilmembers being indicted." Lanier then qualified the statement by saying that one of the three, at-large member Gracie Saenz, could wind up as an unindicted co-conspirator. The mayor did not mention any other councilmembers by name. According to one meeting participant, Lanier then said he didn't know whether Saenz took money from FBI undercover agents, but "she was sure around when it was happening."

Saenz was out of town and unavailable for comment, but Lanier jumped to her defense when The Insider queried him about his alleged comments. The mayor maintained that when he mused to the lawmakers about possible indictments, he was "99 percent" referring to information he had gleaned from media coverage of the sting, and not to inside poop from the FBI. He said he especially regrets mentioning Saenz in what he characterizes as a hypothetical exercise. "I'm so sorry that what I said could be stretched that way. She's as clean as she could be. I've sat and visited with her and she's sitting and crying because this has happened to her, and then, damn, I dump on her, too."

Confidentially Speaking
A hearing last week in state Representative Sylvester Turner's libel lawsuit against Channel 13 and reporter Wayne Dolcefino provided a textbook case of mixed signals in the courtroom. An attorney for private investigator Peary Perry, the Bob Lanier supporter suspected of being the source behind Dolcefino's 1991 reports on Turner, seemed to tell state District Judge Elizabeth Ray that Perry would not object if Dolcefino took the stand to discuss confidential conversations between the two prior to the airing of Channel 13's stories that tied then-mayoral candidate Turner to an insurance scam.

"My client is taking no position," Perry counsel Tom Alexander told Ray. "We believe Dolcefino should follow the law." But Perry himself was not present to say the magic words "waive confidentiality," and Alexander informed the judge that the investigator "does not recall" his contacts with the reporter. The message confused the Chronicle, which headlined its story "Investigator gives Dolcefino go-ahead to testify." But Dolcefino himself saw the light, and it was bright red. "Whether it's Peary Perry or Snow White," says Dolcefino, "I haven't been given any clearance by my confidential informant."

Meanwhile, The Insider strains to divine the logic in Ray's ruling that Dolcefino's refusal to answer questions concerning a confidential source justifies the assumption that the reporter acted with reckless disregard for the truth. At the latest hearing, Ray added that the jury can assume that the answers Dolcefino refuses to provide would damage his defense. The one certain assumption Ray did not mention is that once an investigative reporter begins revealing confidential sources without their permission, he or she will have a tough time ever finding one again.

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