JUSTICE DELAYED Budget Crunch Hits U.S. Attorneys’ Offices

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JUSTICE DELAYED
Budget Crunch Hits
U.S. Attorneys’ Offices

Amid Antiterror Focus,
Prosecutions Decline;
Rep. Lewis Probe Slowed

By SCOT J. PALTROW
August 31, 2007; Page A1

LOS ANGELES — Whoever succeeds Alberto Gonzales as attorney general will face a long list of challenges at the Justice Department, from unfilled senior positions to sagging morale. One of the most pressing, according to dozens of current and former federal prosecutors, is a budget squeeze at U.S. attorneys’ offices that has led to declines in crime prosecutions and delays in major investigations.

In the past few years, U.S. attorneys’ offices around the country have been unable to fill vacancies. Lawyers sometimes can’t travel to interview witnesses. Even funds for basic office needs such as photocopying documents and obtaining deposition transcripts have been cut, according to current and former officials.

SHORT OF STAFF

 

The Issue: Slow growth in budgets has prevented U.S. attorneys’ offices from filling vacancies.

The Result: Some cases, including an investigation of California Rep. Jerry Lewis, have been delayed, and fewer cases overall are being prosecuted.

New Attention: Congress has begun to allot funds toward the problem. It is an issue for the next attorney general.

Overall, funding for the offices has grown well below the rate of inflation. As a result, “fewer cases were getting charged and bigger investigations were taking longer because there weren’t enough prosecutors to do them,” says Debra Yang, who stepped down in October 2006 as the U.S. attorney in Los Angeles.

Department of Justice data show the impact. Prosecutions are down overall, with large drops in categories such as drugs, violent crime and white-collar offenses.

In the civil divisions of U.S. attorneys’ offices — which defend federal agencies and file lawsuits on behalf of the government — the problem is actually costing Washington money, contends Kenneth Bauman, a recently retired veteran assistant U.S. attorney in Portland, Ore. Many offices have raised the bar for filing suit against people who owe the government money. Mr. Bauman and others say the government has settled suits against it for more than it would normally.

After the Sept. 11, 2001, terrorist attacks, federal priorities shifted to terrorism from routine crime fighting. The cost of the Iraq war also prompted Congress and the White House to slow the growth of many types of domestic spending.

People familiar with the matter say the then-Republican-controlled Congress was mainly responsible for the small increases in the budget for U.S. attorneys. Priorities set by the Justice Department also played a role. The department hired additional Federal Bureau of Investigation agents to fight terrorism but didn’t push for U.S. attorneys’ offices to get big increases, they say.

In written answers to questions, the Justice Department confirmed that “budget constraints have affected operations” in the U.S. attorneys’ offices and have had an impact on the numbers of cases brought. But it said the offices “continue to pursue cases in these priority areas where federal prosecution is appropriate.” The department also noted that Congress this year provided funding to restore some earlier cuts.

Some prosecutors say the impact has been largest in big cities such as Los Angeles, Chicago, Miami and San Diego, which have the heaviest case loads and plenty of private law firms able to offer generous salaries.

In Los Angeles, a federal criminal investigation of Rep. Jerry Lewis, a California Republican, stalled for nearly six months due to a lack of funds, according to former prosecutors. The lead prosecutor on the inquiry and other lawyers departed the office, and vacancies couldn’t be filled. George Cardona, the interim U.S. attorney in Los Angeles, declined to comment on specific cases but confirmed that lack of funds and unfilled vacancies caused delays in some investigations.

Thomas Heffelfinger, until February the U.S. attorney in Minnesota, says tight funds mean “you can’t take as many cases.” Remaining prosecutors are asked to take on bigger workloads when colleagues leave and the jobs aren’t filled. But “an individual can only do so much work,” he says.

The number of lawyers working in U.S. attorneys’ offices fell 2.4% to 5,316 between Sept. 30, 2004, and Sept. 30, 2006, after rising in earlier years, according to official figures. The head count has continued to fall during the current year, according to the Justice Department.

The firing of eight U.S. attorneys last year and other controversies prompted the resignation of Mr. Gonzales earlier this week. Shortly after the firings, the White House and Justice Department said several of the dismissed prosecutors hadn’t brought enough cases. One senior official said they were fired for “performance reasons.” The prosecutors defended their performance. To the extent that the number of cases declined, it was more likely due to the shortage of funds and unfilled vacancies than any inadequacy on the part of the U.S. attorneys, Mr. Heffelfinger and others say.

Through 2001, funding wasn’t a major headache. Lawyers’ salaries were far below what they could earn in private practice, but money was available to replace departing prosecutors with lawyers eager to try their hand in major-league criminal cases. Law enforcement was also a popular priority. Says a current Justice Department official: “We were fairly well insulated here because nobody wanted to vote against putting people in jail.”

That changed after 9/11. Congress appropriated small annual increases for U.S. attorneys’ offices that totaled 6.2% from fiscal 2003 to 2006, bringing funding in 2006 to $1.6 billion. However, Congress made “rescissions,” in which it decided later not to pay all the money it had appropriated. It also declined to fund required cost-of-living increases for Justice employees, so these had to be paid out of the U.S. attorneys’ budget. The actual annual budget increase came to 1.9% from 2003 to 2006.

Overall federal spending, including money for the Iraq war, was up an average of 7.7% a year during the same period.

[Attorney]
‘Fewer cases were getting charged and bigger investigations were taking longer because there weren’t enough prosecutors to do them.’ — Debra Yang, former U.S. attorney in Los Angeles.

Adding to the staffing pressure, more than 100 lawyers and administrative personnel from U.S. attorneys’ offices have gone to Iraq to help the fledgling government there. The offices generally pay the salaries of the seconded attorneys, which would typically be about $120,000 a year plus an additional 25% in combat pay.

“I understand that if you wage a war overseas that’s going to affect your budget,” says Chris Steskal, a veteran prosecutor who left the San Francisco U.S. attorney’s office in January 2007 to go into private practice. “But I’d rather spend the money protecting society within your borders.”

Worried by the vacancies, Congress provided funds to begin filling some of them in a supplementary funding bill for the current fiscal year. However, the impact of earlier shortfalls won’t be mitigated right away because it takes up to a year to hire a new prosecutor. Some offices now are filling vacancies with attorneys fresh from law school, waiving standards that require several years of trial experience.

Justice Department statistics show that the total number of criminal cases filed by U.S. attorneys’ offices peaked in fiscal 2004 and dropped by 4.5% between then and 2006, the latest available data. The falloff was more dramatic, and began earlier, in certain categories. Drug prosecutions dropped 11% between 2002 and 2006. After a jump between 2002 and 2003, violent-crime cases fell 8.5% between 2003 and 2006. White-collar crime prosecutions increased somewhat in 2006 after declining steadily for several years, but still remained 8% below the peak in 2002 of 6,252.

“The fact that prosecutions are down is very worrisome,” says David Burnham, co-director of a Syracuse University-affiliated organization that tracks Justice Department statistics. He believes priorities may have shifted too far away from criminal prosecution to fighting terrorism.

Of the categories detailed in the statistics, only immigration cases showed an increase. These rose to 18,147 cases in 2005 from 13,676 in 2002, or 33%, before dropping back to 17,686 in 2006.

Justice Department statistics also show significant drops in cases filed by the civil division, which is a big revenue raiser for the federal government. In fiscal 2006 the U.S. attorneys’ civil divisions collected a total of $4.3 billion in unpaid debts owed to the federal government.

In written testimony for a September 2006 Senate subcommittee hearing, William I. Shockley, an assistant U.S. attorney who had just retired after 24 years, said many offices have chosen not to take on some difficult cases because they lack the prosecutors and other resources to pursue them. “Americans are less safe today and our system of justice less secure because of these shortfalls,” he said.

One way budget cuts led to fewer cases was the raising of “thresholds” for filing cases, prosecutors say. For example, an office might raise the minimum for filing drug cases to those involving at least five kilograms of drugs instead of two.

Guy Lewis, who was U.S. attorney in Miami from 2000 to 2002 and later served as director of the Executive Office of U.S. Attorneys, says that in his jurisdiction, especially on drug cases, “the office really did have to raise thresholds because you just couldn’t deal with everything.”

[Out of Court]

The same has happened in the civil arena. For example, one office will seek to recover unpaid agricultural loans only if the amount is $10,000 or more, instead of $5,000 previously. Mr. Bauman, the recently retired Portland prosecutor, says that during his final years the office settled cases it previously would have brought to trial. Because funds were short, he says, “I was told I couldn’t hire expert witnesses and [in some cases] couldn’t travel to take depositions.”

In San Francisco, disruptions caused by the departure of prosecutors slowed down the U.S. attorney’s recent investigation of corporate executives who backdated stock options, people close to the office said. Mr. Steskal, the former assistant U.S. attorney in that office, was the lead prosecutor in some of those cases. He declined to comment on them, but said that in general the San Francisco office had to cut back on cases because “our budget had been cut back significantly.” A spokeswoman for the office declined to comment.

In 2006, Los Angeles federal prosecutors were in the middle of a wide-ranging investigation of Rep. Lewis of California, who until January was chairman of the powerful House Appropriations Committee. He remains its senior Republican. The investigation focused on earmarks, or special spending measures, that benefited clients of a now-defunct lobbying firm to which he had close ties.

People with knowledge of the case said that by the time the investigation stalled in December 2006, it had branched out into other areas, including Mr. Lewis’s June 2003 role in passing legislation that helped giant hedge fund Cerberus Capital Management. People associated with Cerberus around the same time gave at least $140,000 to a political action committee controlled by Mr. Lewis. Cerberus officials didn’t respond to phone calls or emailed questions concerning the Lewis inquiry.

Money from the PAC was distributed to Republican congressional candidates facing difficult campaigns. The largesse was credited with gaining Mr. Lewis enough support from Republican House members to be chosen as appropriations committee chairman in January 2005. In addition, federal agents were looking into whether Mr. Lewis may have improperly paid for personal expenses with PAC funds.

Barbara Comstock, a spokeswoman for Mr. Lewis, said, “We have no comment,” in response to emailed questions about the investigation.

After the lead prosecutor in the Lewis case quit, others assigned to the case took time getting up to speed. Brian Hershman, a former deputy chief of the Los Angeles office’s public corruption section, declined to comment on specific cases, but confirms that his group’s work overall was derailed by the departure of experienced prosecutors. Like several others, he says he left for more money to support his family.

Replacements “are mostly rookies,” he says. “It will be some time before they’ll be able to restore the section to what it was before.”

With additional funds recently made available by Congress, the Los Angeles office has filled 12 of 57 lawyer vacancies and is expecting an additional 12 lawyers to start soon. To jump-start the Lewis investigation, Mr. Cardona, the interim U.S. attorney, in June called on a veteran prosecutor, Michael Emmick, to revive and supervise the investigation, people with knowledge of the investigation say.

Write to Scot J. Paltrow at scot.paltrow@wsj.com

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