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DiBiagio outlines strain with local FBI

THE BALTIMORE SUN

U.S. Attorney Thomas M. DiBiagio unleashed a broad attack last month on the effectiveness, commitment and cooperation of the FBI's Baltimore Field Division, writing in a confidential letter that the local FBI office was "in distress" and displayed "a marginal presence, at best" in Maryland law enforcement.

In the sharply worded Jan. 9 letter to Special Agent in Charge Gary M. Bald, DiBiagio quoted at length from an internal report prepared by senior prosecutors that suggested that FBI agents - "distracted" by counterterrorism efforts - were failing to develop significant cases and concluded: "The single biggest problem the office has right now is our failed relationship with the FBI."

"The problem is more than number of cases or number of significant indictments," DiBiagio wrote in the letter, obtained yesterday by The Sun. "The FBI Baltimore Field Division is in distress."

DiBiagio declined to comment yesterday on what he described as "confidential correspondence." Bald, in an interview, defended the FBI's performance in Maryland and said many of the issues raised in the letter were cordially addressed at a subsequent meeting with DiBiagio.

"Honestly, these are perceptions that I don't share but ones that I have taken to heart," Bald said. The 25-year FBI veteran, who took over as head of the Baltimore office in October, said he has been impressed in his first months on the job by the quality of cases under indictment and investigation.

"The successes we've had have been very good and in some ways belie the tone of the letter," Bald said.

DiBiagio's letter outlined the apparent strained relations that have been quietly simmering between the two offices for the past year. Writing to Bald two weeks before a scheduled Jan. 23 meeting, the prosecutor suggested that a national mandate for FBI agents to emphasize counterterrorism efforts had resulted in a local failure to address violent crime, white-collar fraud and public corruption - areas DiBiagio has repeatedly described as his top priorities.

Among his assertions:

"The FBI has become distracted and almost useless as they try to figure out how to address terrorism," he wrote, quoting from the internal report that analyzed federal prosecutors' efforts in 2002. "For some reason, this has had the most direct negative effect on the white-collar and public corruption squads."

"The FBI should be the lead agency for federal law enforcement in the state, and instead they are a marginal presence at best," DiBiagio wrote, quoting the same report. "This is trouble not just for the Office but for the community."

"The FBI Baltimore Field Division is in distress," DiBiagio wrote. "There is a perception that the FBI is not fully engaged in the federal law enforcement effort in this state. In particular, the perception is that the FBI is not sufficiently engaged in addressing serious violent crime, corporate corruption or public corruption in Maryland. This is completely unacceptable."

The fractured relationship is both highly unusual and central to the effectiveness of federal law enforcement in Maryland. Typically, the Baltimore FBI office and federal prosecutors in Maryland work in lock step, with agents investigating and presenting cases for possible charges and then working closely with assistant U.S. attorneys as the cases go to trial.

The FBI is traditionally the most central partner for federal prosecutors, who also work closely with other federal police agencies such as the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Drug Enforcement Administration - two agencies that have played key roles in several of the high-profile indictments brought under DiBiagio during his first year in office.

In his letter, DiBiagio described the FBI partnership as one in disrepair and told Bald: "I need to know from you exactly what you intend to do to reverse this condition." The prosecutor closed his letter by rejecting requests by Bald that they discuss the issues by telephone, rather than in writing.

"Finally, you have repeatedly requested that I not set forth my concerns in writing and that you would prefer that I contact you by telephone," DiBiagio wrote. "Because I believe that these are extremely serious matters that directly impact the welfare of the citizens of the State of Maryland, I believe that it is critical that the record be clear as to what I have said and when I said it."

Bald said that he had asked DiBiagio to reach out to him in person only as a way to build a stronger relationship. Bald said that he and DiBiagio had not met or had extensive discussions about the direction of federal prosecutions in Maryland before January because Bald's first months on the job were consumed by the serial sniper investigation.

Now, Bald said, the two men are forging a good relationship. He said the FBI's focus on counterterrorism will mean fewer agents are available to pursue other types of cases, but he said the quality of the cases - if not the quantity - remains high.

"I don't think we're distracted at all. ... It has not pulled us away from the important matters at all," he said, noting the bureau's involvement yesterday in the search for a missing Baltimore infant. He added: "It simply has to be terrorism and counterintelligence now. There's no two ways about it."

DiBiagio is a Bush appointee who was sworn into office within days of the Sept. 11 terror attacks and found his first months on the job consumed by the Justice Department's sweeping response and investigation.

The prosecutor, however, has repeatedly stressed his plans to emphasize the basics as U.S. attorney - with pursuit of public corruption and white-collar crimes at the top of his list. Those types of cases traditionally are the exclusive realm of FBI agents.

In DiBiagio's first year in office, his most visible mark was against violent crime, with federal prosecutors repeatedly stepping in to handle some of the city's worst criminal acts - the arson fire that killed an East Baltimore family in October, for instance, as well as the kidnapping and killing of an 8-year-old girl in December.

DiBiagio has privately shown signs of impatience with the slow pace of white-collar and public corruption investigations - Bald's predecessor, Special Agent in Charge Lynne A. Hunt, sometimes received from DiBiagio newspaper clippings about public corruption indictments in other states. But publicly, DiBiagio has said he thinks his office is well-positioned to produce significant cases in the remaining two years of his term.

"I do believe that we have laid the foundation to pursue significant public corruption in Maryland," DiBiagio said in an interview in early January, shortly before the date of the letter to Bald. "You can't do that in one year. You can't turn around white-collar and public corruption that quickly."

Before yesterday's disclosure of the January letter, the most public split between Maryland's U.S. attorney and the local FBI office came last spring when FBI agents in Baltimore took the rare step of asking federal prosecutors in Boston to review an investigation of police moonlighting after DiBiagio's office declined to bring charges.

Agents were investigating whether about 40 city and Baltimore County officers who moonlighted at Staples office-supply stores in the Baltimore area were paid for work they never did or worked at Staples while on-duty with the police force.

DiBiagio never publicly detailed why his office refused the case but said that a team of prosecutors with more than 100 years of collective experience had determined there was not sufficient evidence that any federal laws had been violated. Prosecutors in Boston also declined to take the case.

Letter from U.S. Attorney Thomas M. DiBiagio to Gary M. Bald, special agent in charge of the FBI in Baltimore, dated Jan. 9:

Dear Mr. Bald:

This will confirm our meeting scheduled for Thursday, January 23, 2003 at 9:30 am. In connection with this meeting, I would like for you to be prepared to discuss the following.

At the end of 2002, the senior staff at the United States Attorney's Office prepared a detailed internal analysis of the prosecution effort in the District of Maryland for 2002. The review was undertaken by a team of prosecutors having more than one hundred years of federal prosecution experience. The following are several observation [sic] regarding the role of the FBI in last year's prosecution effort in Maryland:

"As in the public corruption arena we prosecute what law enforcement agencies bring us. The FBI has become distracted and almost useless as they try to figure out how to address terrorism. For some reason, this has had the most direct negative effect on the white-collar and public corruption squads ..."

"Like corruption cases, we continue to believe that major fraud cases are out there. The trick is getting them to come to us. One key example is NFPE, the huge health care bankruptcy that Tammy was working on. That case had potentially billions in losses, helpless victims (emergency room patients whose doctors weren't getting paid) and disagreeably sleazy defendants. Tammy was months ahead of the curve, having worked on the case civilly. It is being prosecuted in Dayton, Ohio, of all places, notwithstanding the complete reluctance of the U.S. Attorney there because our FBI was uninterested."

"The single biggest problem [bold in original] the office has right now is our failed relationship with the FBI. The FBI should be the lead agency for federal law enforcement in the state, and instead they are a marginal presence, at best. This is trouble not just for the Office but for the community. Even line agents appear to be aware of the 'coolness' between our two offices, and we think that this needs to be addressed before there is any worse effect on law enforcement."

The problem is more than number of cases or number of significant indictments. The FBI Baltimore Field Division is in distress. There is a perception that the FBI is not fully engaged in the federal law enforcement effort in this state. In particular, the perception is that the FBI is not sufficiently engaged in addressing serious violent crime, corporate corruption or public corruption in Maryland. This is completely unacceptable.

This conclusion in no way undermines the extraordinary efforts by a number of excellent FBI agents in your Office. For example, the investigative work performed by Special Agent Stephen J. Gordon in the Lexington Terrace prosecution is exemplary. Another example would be James Costigan's outstanding work on several white collar crime cases. The FBI has the agent talent to make a substantial impact on crime in Maryland. However, my concern is that the leadership of your Office lacks the commitment to make this impact.

I need to know from you exactly what you intend to do to reverse this condition. We are prepared to [do] everything necessary to support your effort to re-engage the Baltimore FBI Field Office in the federal law enforcement effort in this state.

Finally, you have repeatedly requested that I not set forth my concerns in writing and that you would prefer that I contact you by telephone. Because I believe that these are extremely serious matters that directly impact on the welfare of the citizens of the State of Maryland, I believe that it is critical that the record be clear as to what I have said and when I said it. Accordingly, I cannot accommodate your request.

Very Truly Yours, Thomas M. DiBiagio United States Attorney

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