A little home cookin’ – FBI Agent on trial in (where else but) north Mississippi!

Although I’ve faithfully followed the NEMS360.com coverage from the indictment of retired FBI Agent Hal Neilson through what is now the sixth day of his trial, you wouldn’t know it by reading SLABBED – not for lack of intent but lack of time.

Neilson first caught my eye in the Kings of Torts.  Patsy Brumfield’s story for NEMS360,  Indicted agent’s history shows feud with U.S. Attorney’s office, makes reference to the mention:

Neilson also reportedly raised ethics questions about former assistant U.S. Attorney Thomas Dawson’s participation in a book about the office’s investigation and prosecution of then-Oxford attorney Richard “Dickie” Scruggs, who was sentenced to prison on two guilty pleas related to judicial bribery indictments.

Before the book was released several weeks ago, a DOJ spokesman said Dawson had retired before he worked on it. Tension between Neilson and the U.S. Attorney’s Office first became public when it was mentioned in the book, although reasons for the problems were not given.

Neilson is also mentioned in Curtis Wilkie’s Fall of the House of Zeus

A serious schism had developed between the U. S. Attorney’s Office and the local FBI that threatened their ability to work together…In a confidential report drafted in September 2004 by Hal Neilson, the supervisory resident agent of the Oxford office, and endorsed by four of his agents, the U.S. Attorney’s Office in Oxford was accused of deceit and excessive zeal…In the meantime, the U.S. Attorney’s Office opened its own investigation of Neilson…Determined to keep the Oxford FBI in the dark in the Scruggs case, Greenlee, Hailman and Dawson drove to Jackson to meet secretly with the state supervisor of the FBI.  The Jackson FBI detailed Bill Delaney and agent who had already been working on a criminal case in North Mississippi…so it was thought no one would suspect a thing. (pages 154-155) 

These facts, in familiar legal lingo, are uncontested – and the names are familiar, too:  Greenlee, the U.S. attorney who authorized the indictment of Dick Scruggs; John Hailman, the AUSA who Judge Lackey went to with his concerns about Balducci’s offer of a future association with his firm;  Bill Delaney, the agent who intercepted Balducci as he started his trip home following his delivery of the second $20,000 payment to Judge Lackey; and Tom Dawson, the lead prosecutor in the Scruggs case after Hailman’s retirement – and, the co-author of the Kings of Torts.

Not so familiar, however, is the important role FBI reports played in Scruggs I and Scruggs II and appear to be playing in the Neilson case.  As we continue with NEMS360 reports on the indictment and trial of Hal Neilson, keep in mind that an FBI report, unlike an FBI transcript, has no backup recording as documentation. 

FBI Agent Hal Neilson of Oxford, whose indictment became public Thursday, asked the Department of Justice for whistleblower protection a couple of years ago after accusing the U.S. Attorney’s Office in Oxford of wrongdoing.

The 49-year-old career agent, who is one year shy of retirement, faces five federal counts that he failed to disclose a financial interest in Oxford’s FBI Building since 2004 and filed false statements to a federal agency and agent.

While the indictment was filed in the Northern District of Mississippi, its U.S. Attorney’s Office gave no reason Thursday for why it apparently has withdrawn or “recused itself” from handling the case.

Middle Louisiana U.S. Attorney David R. Dugas announced the charges and assigned assistants Rene Salomon and Rich Bourgeois to prosecute the case.

NEMS360 has gavel-to-gavel coverage of the trial and Patsy Brumfield taking notes in the courtroom, typically filing a story mid-day and after the Court recesses for the day.  If you type Hal Neilson in the search box, as I did, you’ll find a four-page listing of stories on the case, including today’s – Defense goes after Greenlee, after government rests:

Prosecutors continue to present their case against Oxford FBI agent Hal Neilson, charged with lying about his financial interests in the Oxford FBI’s new quarters.

U.S. District Judge Sharion Aycock is pushing to get this trial completed by Friday, so she’s set the start of court at 8:30 a.m., with expectations to work until 6 p.m…

So far, it’s been a stream of witnesses, who identified numerous documents and Neilson’s signatures related to the 2001 search for a new FBI office in Oxford. Witnesses also have said that Neilson did not have permission to hold a one-third interest in C&G Properties LLC, with Dino Grisanti and John Covington. Neilson contends he got verbal permission from his then-FBI chief counsel in Jackson, Mike Turner…

[Neilson’s attorney says]…MS law says can have a verbal agreement, unless there is a written agreement. And that’s what we have – a C&G partnership agreement. Getting $50K from ACM doesn’t make for a financial interest.

Intent is not my issue, that’s the law, your honor. Intent must be shown or a verdict of acquittal…

Court denies judgment of acquittal on those 5 counts.

We have the right that he was retaliated against by Mr. Greenlee. Order to deny he was a victim of selective prosecution. However, I will say, that if we had been afforded access to documents that we have now, part of investigation of this case we would have filed selective prosecution.

More than two years ago … I was personally informed that Greenlee had two people in his office who were literally looking for evidence against Hal Neilson. Had been checking records at Lee Chancery Clerk’s Office. We did not have confirmation of that until this week. Think it should have been provided that information sooner.

What document shows is not so much selective prosecution but retaliation. Mr. Neilson talked to his superiors about a Northern MS investigation of people of Middle Eastern descent. Information brought to him by members of his squad. Appropriate to notify the Department of Justice. DOJ came down, found no violation by Greenlee and his office.

Soon thereafter, Mr. Greenlee took a number of steps as US Atty – one is what I had been informed of. Someone on his behalf searched land records of Mr. Neilson. He also wrote a letter to the FBI Director Mueller, asking that Neilson be removed of his duties because he found him to be ineffective. DOJ came down, found nothing but praises to sing for Mr. Neilson. Only problems were with the senior management of US Atty’s Office. At same time, Greenlee was going about looking for deeds, etc.

During Greenlee’s term, we found evidence of at least half a dozen federal employees who committed criminal acts during their employment – allowed to take retirement and walk away. Violations of the same section Mr. Neilson is charged with. (She cited these examples.) In any event, if allowed to present, we would show the jury that numerous people who have committed far greater acts, were not prosecuted.

Also, that these sorts of actions, when occur within FBI and other federal agencies, are handled administratively, not criminally. Realize there has been a recusal in Northern Miss., still the District of Northern Miss is still working on this case and offering information.

Ask again that your honor let us use this information.

Considering the “we take care of our own” just-us justice of north Mississippi, Neilson is fortunate to have a jury trial.  Thus far, however, Federal District Judge Sharion Aycock has been at times impressive:

My review of case law, a defense of retaliatory action is essentially the same as selective prosecution. Not to say it could have been raised by motion prior to commencement of this case within the appropriate time line within a motion to quash the indictment. Well, what I’m hearing now, Ms. McCoy said we could not have filed that motion or it would have been futile because only now, with copies of these documents, now we confirmed out belief of retaliation.

I want to be very careful with this – that the jury should not hear about this at all. But that we don’t gloss over this at all – we are here to seek justice. What do we really know about what got us to this place. Well, I don’t know the truth. My point, it’s easy Ms McCoy to say that you have personal knowledge of six or more persons that could have been, or should have been, prosecuted for criminal acts. But Neilson was, but this was retaliatory. those are just rumors. We would have to have a trial on each one of those persons. I’m so cautious that we don’t leave this courtroom believing that these people should have been prosecuted.

But that concerns me that you make those statements.

Now, we have a document of the type that should have been produced in discovery to the defendant. I advised attorneys of Mr. Neilson, that I was going to allow them to review these documents. I understand Ms. McCoy that you believe and state – in good faith – had you known this, you might have taken another course. But it is this court’s belief that these documents just bear out that Mr. Neilson took certain action in 2006 in filing a complaint of Mr. Greenlee. No violations found. Then, there was an investigation of Mr. Neilson, Greenlee was contacted. But I just don’t find from these documents, the type of retaliatory actions that would cause me to deem that this case should not go forward.

Why anyone writes fiction is beyond me when there are stories like this around.  Neilson’s lead attorney, Christi McCoy,  has a the reputation one would expect of someone who was the leading candidate to replace Greenlee for months – some say until Greenlee used his influence and talk of her appointment went south.  Clearly, north Mississippi missed the opportunity to replace it’s just-us system of justice with the real thing.

Hal Neilson’s trial is expected to end Friday. Tomorrow the Defense continues to present Neilson’s case.