The Insider

The Parallax View
A preliminary hearing last week before U.S. District Judge David Hittner offered a sometimes fiery, sometimes fumbling dress rehearsal for the upcoming bribery-conspiracy trial of the Hotel Six. The often heated arguments over pretrial motions indicated that courtroom spectators will be in for a treat early next month when the defendants' dream team of top Houston criminal-defense attorneys squares off against a squad of elite Justice Department prosecutors from D.C.

The trial is the result of an FBI sting in 1995 and 1996 run by fake Latin American businessmen who called themselves the Cayman Group and offered bribes to city officials in exchange for help in obtaining a piece of the taxpayer-subsidized downtown hotel project. The Insider has learned that the sting was code-named Operation Parallax by the government.

"Parallax" is the displacement of objects as seen from different locations, a phenomenon utilized by astronomers to calculate the distances of heavenly bodies from earth (at least according to our dictionary). The term also figures in the title of a 1974 movie, Parallax View, in which an intrepid reporter portrayed by Warren Beatty seeks to unravel the conspiracy behind the assassination of a presidential candidate -- and in the process becomes a pawn for the conspirators.

Whatever the original inspiration for the FBI's christening of the sting, last week's courtroom action indicated the name is apt. Defense and prosecution perspectives on the operation are at least several light years apart.

Caught in the feds' net were City Councilmen John Castillo and Michael Yarbrough, ex-councilmen Ben Reyes and John Peavy Jr., former port commissioner Betti Maldonado and lobbyist Ross Allyn. Castillo, Reyes and Maldonado are Hispanic, while Yarbrough and Peavy are African-American. Allyn, who was a Council aide to Reyes, is the only Anglo among the defendants.

Defense attorneys Dick DeGuerin, Mike DeGeurin and Mike Ramsey spent a good portion of their time last week painting the FBI as a posse of bigots for whom wrongdoing at City Hall only comes in shades of black and brown. Jut-jawed prosecutor Mike Attanasio blew his short-fused Wayne Dolcefino-like temper over those accusations, angrily labeling them an affront to the Justice Department.

The hearing allowed several lead players in the production the opportunity to try out their routines on the stand. Maldonado did her best blubbering Betty Boop impersonation, but on the evidence of her preliminary performance, it needs a lot more work. Her insistence that she never realized that slipping envelopes of cash to elected officials could be a serious crime just doesn't jibe with her sophisticated resume as a port commissioner, lobbyist for the government of Mexico and political consultant.

Other portrayals rang truer. The iconoclastic Hittner insisted on asking witnesses more than his share of questions while occasionally pacing around behind his chair like a fidgety penguin. FBI special agent Ron Stern demonstrated a penchant for sarcastic responses, as when Ramsey asked why the feds didn't simply seek Reyes's permission to wiretap his conversations rather than petition a judge for authorization. "Never thought of that," deadpanned Stern from the witness stand. "Maybe we'll try that next time."

Hittner batted away several defense motions that could have made the testimony even more interesting. He quashed a subpoena to force Gaynelle Griffin Jones, who was the U.S. Attorney for the Houston area while the sting was under way, to testify why she declined to pursue charges against those caught in the sting. Likewise, Hittner refused to allow FBI cooperating witness Carlos Montero, whose real name, it was revealed, is Julio Molineiro, to take the stand. Ramsey, who represents Reyes, had sought to question both in an effort to prove that Hispanic and black political figures were selectively targeted by the FBI.

Still, the hearing revealed new details of the investigation, particularly regarding Maldonado's behavior in early May 1996, shortly before the sting operation went public, as she veered erratically between cooperating with the FBI and seeking counsel from some of Houston's politically powerful.

After months of secretly filming and recording local elected officials, the FBI disclosed the existence of the sting to Maldonado on Thursday, May 2 and secured her cooperation in the operation. By the following Monday, however, Maldonado apparently was having second thoughts, and that morning she sought advice from Port Commission Chairman Ned Holmes. According to Maldonado's testimony last week, she called Holmes and then went to the office, where she told him, "I hate to lie to you, but I've got a friend who's in trouble with the FBI and needs an attorney."

Holmes remembers the visit a bit differently. He told The Insider that he walked out of his office and was surprised to see Maldonado sitting next to his secretary. "A friend of mine is in trouble," Holmes recalls Maldonado telling him once they were alone in his office. " 'She is in a lot of trouble.'

"The she part came through pretty clearly to me," says the developer. "I thought, on the one to ten scale, ten being her and one being somebody else, it was somewhere north of five." Holmes says Maldonado did not give him any further details on the sting, "for which I am grateful." He provided her with a list of possible attorneys, including Dick DeGuerin, Mike DeGeurin, Ramsey, David Berg and Rusty Hardin. Holmes also placed a call to Dick DeGuerin on Maldonado's behalf.

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