By Jeff Balke
By Aaron Reiss
By Angelica Leicht
By Dianna Wray
By Aaron Reiss
By Camilo Smith
By Craig Malisow
By Jeff Balke
One of the hallowed precepts of the American justice system is that a defendant is entitled to the counsel of his choice -- or at least the best counsel that he can afford. For Dan De La Garza, a Woodlands businessman facing federal money-laundering charges, that was Kent Schaffer and Dan Cogdell, two of Houston's premier criminal-defense attorneys.
But last week, in the latest strange twist in a long-running tale of drugs and deceit [see "Snitch Vs. Snitch" in the August 28 Houston Press], U.S. District Judge Lee Rosenthal disqualified Schaffer and Cogdell from representing De La Garza, citing their role in the arrest of the government's key witness against their client --even though the witness's contact with the lawyers was encouraged and facilitated by the government.
In removing Schaffer and Cogdell from the case, Rosenthal also rejected their motion to dismiss the four counts of money-laundering against De La Garza. The lawyers had argued that the charges should be dropped "due to outrageous conduct by the government." In effect, they accused an assistant U.S. Attorney and an agent for the Drug Enforcement Administration of promoting a criminal act by De La Garza's longtime nemesis, and the government's key witness, Jorge Arroyo.
Schaffer was stunned by Rosenthal's ruling, claiming that the judge was protecting the prosecution from the result of its own illegal acts -- much as a parent shields an unruly child from the consequences of his behavior.
"I guarantee you, if I had tried to do the kinds of things they did in this case, I'd be in jail right now," says Schaffer. "My attorney would be arguing to the judge to at least let me stay out for Hanukkah. But yet, when the government does it, everybody kind of winks at each other and looks the other way."
The charges against De La Garza are based in large part on information provided to federal authorities by Arroyo, a native of Bolivia who, like De La Garza, was once an informant for the DEA. But the government's case was dealt a seemingly critical setback last summer when Arroyo was arrested after asking Schaffer and Cogdell to pay him $50,000. In return for the money, Arroyo had promised to leave town without testifying against De La Garza.
The attempted extortion was typical of the murky relationship between De La Garza and Arroyo. The two hooked up in 1984, when De La Garza, then working as a DEA informant, joined with Arroyo to personally smuggle cocaine into the United States from Bolivia. Arroyo was a suspected smuggler and the former son-in-law of Hugo Banzer Suarez, who claimed the Bolivian presidency in a 1971 military coup reportedly financed by Bolivian drug lords.
De La Garza has said that the smuggling trip was part of a DEA plan to bust Arroyo. But things didn't go according to plan, at least for De La Garza: He was detained during a stopover in Colombia and spent the next two years in a Bogota prison. Arroyo, meanwhile, was arrested after arriving in the United States. De La Garza has maintained that he was set up for arrest in Colombia by Arroyo and a DEA agent named Roger Norman.
After his release from jail, De La Garza returned to Houston and prospered, making millions in real estate. But he still occasionally ran afoul of state and federal law, and he still kept in touch with DEA snitch Arroyo --apparently in hopes of evening the score for his imprisonment in Colombia. But Arroyo also apparently entertained the notion of revenge, and it was he who informed federal investigators that De La Garza was interested in laundering drug money. (De La Garza has denied the accusations to the Press, saying his only connection with drugs has been as a DEA informant.)
Three days before De La Garza's trial was set to begin in August, Arroyo called Schaffer and Cogdell and asked them to meet him at Houston's, a usually crowded restaurant on Kirby Drive. Arroyo had just returned to the United States from Brazil to testify against De La Garza, so the two attorneys were, naturally, interested in talking with him.
But Arroyo didn't come to the restaurant to discuss the facts of the case; instead, he solicited the $50,000 from the attorneys. Schaffer and Cogdell say they were dumbfounded by Arroyo's request, and they arranged for a second meeting the next day.
In the meantime, the lawyers notified District Attorney Johnny Holmes. After being wired for sound and provided with $50,000 in "flash money" by the D.A., the attorneys met with Arroyo in Schaffer's office. With the tape rolling, Cogdell made it clear that all parties believed the $50,000 guaranteed that Arroyo wouldn't testify against De La Garza, and that the idea had been Arroyo's. After Cogdell left the room, Schaffer handed the cash over to Arroyo, who was subsequently busted by waiting investigators from Holmes's office.
Arroyo is now in prison after pleading guilty to a federal charge of obstruction of justice.
During a hearing last month on Schaffer's motion to have the charges against De La Garza dismissed, DEA agent Norman, who was Arroyo's supervisor at the agency, testified that the government was aware that Schaffer and Cogdell had been trying to get in touch with Arroyo since May. The agent claimed Arroyo feared that the attorneys were attempting "to set him up," although he said the informant didn't tell him why or how, and he didn't bother to ask. Norman testified that he contacted assistant U.S. Attorney Robert Stabe, the lead prosecutor in the De La Garza case, and they arranged for Arroyo to reach the attorneys by phone from Brazil. Those calls, Norman admitted, were monitored and recorded by the feds.
In all, Arroyo made four recorded calls from Brazil, reaching Schaffer, who had represented Arroyo several years earlier on drug charges, on one occasion. As Stabe and Norman electronically eavesdropped, Schaffer asked Arroyo how he'd been doing and told him that Cogdell wanted to talk with him. Schaffer then transferred Arroyo's call to Cogdell's law firm, but Cogdell was not in his office. Norman told the judge that the brief exchange between Arroyo and Schaffer revealed nothing sinister; nonetheless, he and Stabe opted not to contact the defense lawyers about Arroyo's fear of being set up.
According to Norman, when Arroyo arrived in Houston two months later to testify against De La Garza, the informant again expressed concern that Cogdell and Schaffer were trying to frame him. At that point, Norman claimed, he and Stabe advised Arroyo not to discuss the upcoming trial with anyone. But Norman testified that he and Stabe also provided Arroyo with two blank cassette tapes and a hand-held recorder adapted to tape telephone conversations --just in case the informant did decide to contact the attorneys. Later that week, Arroyo met with Cogdell and Schaffer at Houston's.
Norman testified that he didn't know if Arroyo recorded the meeting at Houston's, but he insisted that neither he nor Stabe suggested their witness solicit money from the lawyers. That idea, he said, was entirely Arroyo's.
Stabe, meanwhile, argued to Rosenthal that the government could not completely control Arroyo and should not be penalized for his conduct, and he asked the judge to remove Cogdell and Schaffer as De La Garza's lawyers.
"They argued that if we had just kept our mouths shut, we could have proceeded to trial, and the bribery solicitation would have never become an issue," says Schaffer. "So in the opinion of the government, we created our own problem by reporting the crime. Of course, if we hadn't, we would have been subjecting ourselves to prosecution and disbarment."
Even before Arroyo's bribery solicitation, Stabe was trying to prevent Schaffer from representing De La Garza.
Less than a week before De La Garza was to go to trial and three days before Arroyo was arrested, Stabe filed a motion to disqualify Schaffer on the grounds that the lawyer had represented Arroyo on drug charges in the mid-'80s. Stabe insisted in court last month that he submitted his motion at that advanced date because he only learned in late July that Schaffer was defending De La Garza. That assertion was contradicted by Norman, whose testimony indicated that both he and Stabe knew of Schaffer's involvement in the case as early as May.
In a brief filed with Rosenthal on behalf of Schaffer and Cogdell, two associations of criminal lawyers maintained that Stabe and Norman should be held accountable for the actions of their witness, since they encouraged Arroyo to call the lawyers and provided him with recording equipment.
"Schaffer and Cogdell did nothing wrong," says attorney Stanley Schneider, who helped write the brief for the National Association of Criminal Defense Lawyers. "The only thing they did was meet with a witness in a criminal case -- which they have an ethical duty to do. This [practice by the government] shouldn't be just the concern of attorneys. This sort of government intrusion should be a concern to everyone."
David Bires, who shares office space with Schaffer, now represents De La Garza, whose trial has been reset for March 2. Bires will undoubtedly try to bring Arroyo's bribery solicitation to the attention of the jury; Rosenthal has indicated that she will wait to rule on whether that evidence can be introduced at the trial. If Rosenthal permits, Bires will probably argue that the case against De La Garza was manufactured by Arroyo at the behest of agent Norman.
While working as an informant for Norman in the early 1980s, De La Garza maintained that the agent had two other informants killed in order to steal money from them. De La Garza's allegations were even cited in a 1986 opinion by the U.S. Fifth Circuit Court of Appeals when it overturned Arroyo's 1985 conviction on drug-smuggling charges.
Norman, who is now the supervisor of the DEA office in Sacramento, was never charged in the deaths of the informants, who are still missing. For that matter, says Schaffer, it doesn't appear that De La Garza's accusations against Norman were even checked out. Before being replaced as De La Garza's attorney, Schaffer says, he asked both the DEA and the FBI for their files on the Norman investigation but was told nothing of the sort exists.
"Either they were lying or they just didn't give a shit," says Schaffer. "It's just amazing that an agent can be accused of murdering someone and stealing their money and the agency just says, 'So what? It's just another action of a bad child.'