The Justice Department unlawfully recorded privileged phone calls between former Rep. Rick Renzi (R-Ariz.) and his lawyers during an insurance fraud investigation, a federal magistrate judge in Arizona ruled Thursday in recommending the recordings be suppressed.
Magistrate Judge Bernardo Velasco found that prosecutors made false statements to the supervising judge regarding the status of one of the lawyers Renzi was talking with and regarding the government’s effort to minimize the intercept and recording of calls with other attorneys.
Still, Velasco is recommending that Renzi’s motion to dismiss the indictment be denied.
“While this court has concerns over the government’s conduct in this case, it does not rise to the level of outrageousness,” Velasco wrote in his 24-page ruling. U.S. District Judge David Bury will have a chance to review the magistrate’s report and recommendation. Velasco's ruling is here.
A Justice Department spokeswoman declined to comment on the ruling, which came the same day that Assistant Attorney General Lanny Breuer announced new leadership at the Public Integrity Section. The prior leadership has been blamed in the botched prosecution of former Alaska Sen. Ted Stevens.
Public Integrity trial attorneys are prosecuting Renzi on charges that include wire fraud and money laundering. The National Law Journal's earlier coverage of the wiretap dispute is here.
A federal judge’s order in October 2006 authorizing the wiretap of Renzi’s cell phone did not permit the government to record or review communication that implicated attorney-client privilege. The FBI and prosecutors set up a taint team to block the trial prosecutors from hearing privileged calls.
Velasco found that the prosecution team was exposed to at least five privileged calls—including four calls with a lawyer in Arizona and one call with Nixon Peabody partner Kelly Kramer. The judge also said the government recorded a 26-minute privileged call between Renzi and Glenn Willard, of counsel with Patton Boggs.
In the conversation with Kramer, Renzi spoke about a cooperating witness. Velasco said it was clear from the call’s content that it was potentially privileged. At an evidentiary hearing, a FBI agent testified that he was unaware at the time the agent was recording the call that Kramer was a lawyer. The agent, according to court records, thought Kramer may have been an accountant.
“Clearly, it was not reasonable for the government to record calls between Congressman Renzi and lawyers the government knew (or should have known) to be representing him,” Velasco said. He said the government failed at the outset of the wiretapping to tell the supervising judge that Renzi was represented by multiple attorneys.
Velasco also noted that none of the privileged calls were sealed or marked as privileged, a violation of the Justice Department’s electronic surveillance manual.
Still, the judge said disqualification of the prosecution and investigation team is not justified. No information from the calls appears in witness interviews or grand jury sessions, Velasco noted.