Pens and Needles

Federal turf fights and deals mark the legacy of a union bribery case

Recordings by operative Bieganowski were extensive and detailed. In the attorney's sentencing hearing, testimony revealed that the FBI and prosecutors outfitted his Houston apartment with a camera and microphones. And his road trips as an informant took him and his wire to the union's national convention in Miami and meetings with union brass in Las Vegas, Austin and Marco Island in Florida. In fact, in his first meeting with investigators in 1999, he was so eager to cooperate that Bieganowski used his own money to buy a tape recorder -- the Miami convention was only seven days away, leaving the FBI without enough time to rig him with their sophisticated equipment.

However, Saper's defense work for Babineaux raised questions about the evidence. Transcripts of tapes did not always reflect what was said, and one of them suggested that Victor Bieganowski might have been selective about what he handed over to authorities. "Yeah, but I'm not going to give them that," he's heard to say. "Good thing I played this. Do you have another tape?"

More questions about Bieganowski's credibility -- as well as some embarrassing moments for prosecutors -- came when Saper gained access to transcripts of the informant's own sentencing session in El Paso, on his guilty plea to the charges related to the medical fraud investigation.

Defense attorney Gus Saper uncovered critical evidence about union payoffs.
Daniel Kramer
Defense attorney Gus Saper uncovered critical evidence about union payoffs.

Debra Kanof, a blunt-spoken assistant U.S. attorney for the Western District of Texas, headed that El Paso case. She clearly didn't want Bieganowski to duck a hefty punishment just because Houston investigators from the Southern District had interceded to snap him up to help on their union payoff probe.

After all, she told the court at his sentencing, Bieganowski had hindered the fraud investigation to the point where they'd cut off any talk of a deal. "I've never had a cooperator that was so manipulative," she said. "It wasn't until the trial that we found out just how manipulative and how many lies Victor Bieganowski gave to us."

That animosity was compounded when she learned that Western District prosecutors had agreed to not oppose probation for their key operative -- even though it would come in a case that wasn't theirs. Her wrath focused on Assistant U.S. Attorney Ed Gallagher, who led the union investigation and made the offer to Bieganowski. Her defendant, Kanof contended, had manipulated Gallagher, who had "meddled" in her case to the point of violating Department of Justice regulations about such deals.

Kanof added that she told his supervisors about the situation only after word of the feds' turf war reached them. "I didn't rat on him."

Gallagher dismisses the fracas as a "nonissue as far as the government is concerned" and says it was merely her opinion. "The issues of internal disagreement between two U.S. attorney's offices really are just that: internal," he says. "I don't think it is newsworthy -- it is just trash."

He attributes it to "off-the-cuff comments" made by a frustrated prosecutor, and scoffs at any claims that Bieganowski manipulated investigators. There's no indication that Kanof's remarks triggered any internal investigation, and Gallagher's reputation appears to be solid.

However, as Babineaux lawyer Saper continued to uncover more evidence of governmental infighting, prosecutors seemed to warm to the prospects of a deal. In September, Babineaux pleaded guilty and agreed to cooperate in the union case in return for a $3,000 fine and two years of probation.

Saper says he believes there would have been problems with the government's case at trial, although he notes that he can't predict what the outcome would have been.

Only weeks after the plea, the U.S. Attorney's Office here announced racketeering and fraud indictments against UTU president Byron Boyd Jr. of Seattle, retired president Little and two other union staffers. They are accused of taking nearly $500,000 in bribes from lawyers. Boyd's attorney, veteran white-collar fraud specialist Bob Sussman of Houston, declined comment on his client, who remains in office while fighting the charges.

Saper's curiosity is more about those who were not charged or indicted: the scores of plaintiffs' attorneys who profited by making the payoffs to gain the union's clients.


Court documents in Babineaux's perjury case indicate that about 40 attorneys were called as grand jury witnesses, although it is unknown how many testified about being solicited for bribes or paying them.

Prosecutors in his case told U.S. District Judge Nancy Atlas about five named lawyers who were prepared to testify that Babineaux had solicited money from them or received payments. They were Robert Pierce and Lou Ramond of Pittsburgh, Joel Alexander of Birmingham, and Houston attorneys Rodney Steinburg and Tommy Ray Ledbetter.

In one filing of planned evidence for trial, prosecutors say that Babineaux asked for $25,000 from Ledbetter in 1995, as "campaign expenses" for then-president Little. "When Ledbetter refused, the defendant stated that one day Mr. Ledbetter might look around and see that he did not have as many union cases anymore," the court document states. Alexander was told to pay $15,000 and if Little was elected, he'd be on the designated counsel list.

However, Saper says it is "more than a little unusual" that attorneys called to the grand jury were all given immunity, even before investigators had inquired about their information. Those knowledgeable about the probe say the immunity grants were necessary to gain evidence against the union bosses, and such tactics are common in efforts to penetrate criminal conspiracies.

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