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Daniel Bogden: When the bugs bite back
Story by George Knapp
Nevada’s U.S. Attorney Daniel Bogden has come under recent scrutiny in his handling of a high-profile corruption investigation. Is it part of an inside job to discredit the prosecutor — and derail the case?
Four lawyers were sipping coffee in a downtown eatery when a fifth attorney walked in and pointed to the morning headline.
“Did you read this about Dan Bogden leaking information to Nancy Quon? It says the Department of Justice is pursuing a criminal investigation of Bogden’s office and I heard they are also looking at whether prosecutors Dan Schiess and Steve Myhre are also leaking stuff,” the new arrival said.
The four coffee-drinkers looked at each other, cracked smiles, then busted up laughing.
Anyone with more than a cursory knowledge of the office of Nevada’s U.S. attorney would likewise find it preposterous that any of the top people are leaking sensitive information. True, the Department of Justice launched an inquiry into an alleged unauthorized release of information concerning high-powered construction defects attorney Nancy Quon, a central figure in a massive, ongoing investigation of political corruption within local homeowner associations — and now a figure under indictment on a felony drug charge related to the alleged scheme. The investigation concerns whether local homeowners association boards were infiltrated and then manipulated into filing multi-million-dollar construction defects lawsuits against homebuilders, funneling the legal lucre to certain lawyers and the repair work to certain contractors.
But recent news reports about the department’s probe of a possible leak were blown completely out of proportion, according to multiple law enforcement sources (none of whom are currently employed by the U.S. attorney.) It’s a lesson in how disgruntled insiders can enlist credulous journalists to push their own agendas.
Perhaps you saw the front page story in the March 2 Review-Journal. It featured side-by-side photos of U.S. Attorney Bogden and the comely Quon, as if to imply that Bogden and Quon might have something else going on the side. The report claimed that “at least one” federal prosecutor had been questioned as part of a “criminal investigation.” Subsequent versions of the story appeared online and exaggerated the facts even more, claiming that “several federal prosecutors” were under criminal investigation for leaks. One story quoted a prominent Washington lawyer as saying the situation was so unusual in that the lawyer had never before heard of FBI agents and federal prosecutors investigating other prosecutors. (Really? Does this lawyer know what the Public Integrity section of the Department of Justice was created to do? And does the name Alberto Gonzalez ring a bell?)
It’s no accident that someone would weave a tale about a supposedly massive criminal investigation into Nevada’s U.S. Attorney’s office. Courthouse observers are well aware of an ongoing effort to embarrass the office in general — and Bogden in particular.
The interesting thing is that it’s coming from inside the Nevada U.S. Attorney’s office.
Still, it isn’t the first potshot taken at the U.S. Attorney’s office over the past year or so, and more are undoubtedly on the way.
“Being U.S. attorney is not an easy job, and is sometimes a thankless one,” Bogden tells me. “We pursue investigations and prosecutions against those who have violated the law, despite who they are, what position they hold, or what their net worth might be. You take on those individuals and they will take shots back, even if untrue.”
A history of blowback
Attacking the motives and methods of federal authorities in Nevada did not begin with Bogden. It’s a tradition of sorts in our state, born of mutual suspicions. The headline-seeking mob-busters of the Kefauver Committee helped to put Las Vegas on the map when they came to town in 1950 looking for evidence of organized crime in the casino industry. In the early ’60s, Robert Kennedy’s Justice Department planted bugs in half the casinos on the Strip in an effort to nail the likes of Sam Giancana and Moe Dalitz, but the investigation imploded. In the ’70s and ’80s, the FBI and IRS stepped up their presence in Las Vegas and were, for a time, at war with the power structure here. Joe Yablonsky’s FBI team conducted stings on crooked politicians, hounded mobsters and targeted a federal judge. His IRS counterparts went after casino money-laundering and turned up the heat on tip-earners. In the ’90s, federal agents again went after elected officials willing to sell their offices, this time to the owners of strip clubs. And more recently, agents have targeted everyone and everything from prominent doctors to personal injury lawyers, mortgage companies, homeowner associations, nightclub operators and politicians. The fact is, Nevada has always been a target-rich environment for federal law enforcement. It’s little wonder that Bogden’s team of 50 attorneys (about half as many as the thinly stretched Clark County district attorney’s office) are seeing some blowback.
“We had a banner year in 2010,” Bogden tells me. “We saw record increases in criminal filings and monetary collections. Our criminal filings were up 39.3 percent over the prior year and 50 percent higher than 2007. Nevada’s U.S. Attorney’s office ranks fifth in the nation for increase in criminal filings. Our appellate division was nearly flawless representing us before the 9th Circuit Court of Appeals.”
You wouldn’t know it, though, from local press reports. Columnists and other journalists have ripped into Bogden’s office on a fairly regular basis over the past few years. The criticism isn’t nearly as pointed and frequent as back during the Yablonsky years, when harsh headlines and editorials helped fuel death threats against federal agents here.
Still, the recent anti-fed campaign must wear on prosecutors and agents, and has probably led to painful teleconference calls from Department of Justice honchos in Washington curious about whether the things they’ve been reading are remotely true. For the most part, the answer is no. I base this answer on my own knowledge of most of the high-profile cases on the front burner of Bogden’s office. I have covered most of those cases from the beginning, even before some of the investigations were formally launched.
Bugs — big bugs
Take the case of the so-called leaks involving Quon. She is perhaps the most successful construction defects attorney in Nevada history. She’s won an estimated $100 million worth of verdicts on behalf of homeowners who were screwed over by shoddy developers. But investigators believe that, somewhere along the way, Quon’s compelling personal narrative became confused and distorted by the waves of dollars that rolled into her coffers. Agents believe Quon conspired with one or more construction defects remediation contractors, that she manipulated her HOA clients to award their lucrative repair work to a firm owned by Leon Benzer, whose company raked in millions for allegedly (and half-heartedly) fixing the defects at the heart of Quon’s lawsuits. Also part of the alleged scheme were prominent property management companies and a network of political operatives and ex-cops who seem to have infiltrated dozens of homeowner associations, got themselves elected to HOA boards through what appear to be rigged elections, then manipulated their HOAs into pursuing defects lawsuits through Quon and Benzer.
“Every time we turn over a rock, three more bugs crawl out,” one lawman told me almost two years ago. Big bugs. Among the names that have surfaced — but have not been made public — is that of an elected official who hoped to be living in the governor’s mansion at this moment.
Columnists have understandably questioned why the case is taking so long to prosecute. The criticism probably stems from hands-on investigators who submitted their basic case to prosecutors months ago and have been griping to media friends because no indictments have been issued.
First of all, it’s not unusual for cops to gripe about prosecutors. In general, cops think every case they submit should be accepted as gospel by prosecutors and should be put on a court calendar immediately. Prosecutors almost always ask the investigators to get more information about a case before indictments are handed down. It takes time. Has it dragged on too long? That’s a judgment call though, given the complexity involved and the wealth and power of some of the targets, it would be prudent for prosecutors to button down all loose ends before proceeding. It would not be a surprise to learn of an announcement in the case by the time this article is printed.
Second, critics of Bogden’s office have almost certainly contributed to the delays. Remember the first conspiracy theory leaked to the media? Dark rumors circulated about why Dan Bogden had to be removed from any connection to the case. It turned out Bogden owned a condo in one of the HOAs that was targeted by the probe. So what? Bogden was never going to personally prosecute the case anyway, so he recused himself. He played no role in the decisions made by his homeowners association. His recusal was appropriate and routine — but his hidden critics tried to stir the pot and make it appear far more sinister.
Soon after Bogden’s recusal, the rest of his staff was removed from the HOA matter as well. Rumors again started flying, especially when a fresh team of prosecutors was brought in from Washington to handle the case from that point forward. Media critics assumed something dastardly must be at the root of that drastic change, and Bogden’s internal opponents were happy to fan the flames by whispering in the ears of reporters.
The Bush connection
Starting over with a new team of prosecutors certainly contributed to further delays in announcing indictments, but the story of why the change was made has not been told. Here’s what happened.
You might recall that Bogden was one of a handful of U.S. attorneys fired by the George W. Bush administration for no apparent reason. After the election of Barack Obama, U.S. Sen. Harry Reid pushed to have Bogden reinstated. A few staffers in the Las Vegas office were not happy about Bogden’s possible return for the simple reason that they were not among his most trusted deputies. The same group didn’t like Bogden’s top assistants and go-to prosecutors Steve Myhre and Dan Schiess. They griped mightily when Myhre was given the job of acting U.S. attorney, started filing complaints with the Department of Justice about Myhre (and later Bogden), complaints alleging discrimination against minorities and women in hiring and promotions. Many of those complaints made their way into the hands of local journalists, though the griping failed to derail Bogden’s re-appointment.
At least one of the unhappy prosecutors found himself smack in the middle of the HOA case but, according to sources familiar with the case, was not up to the job. He made repeated mistakes, had trouble grasping the enormity of the case, and continued to chafe because he was working under the lawyers whose careers he had tried to derail.
Months ago, that prosecutor was quietly but unceremoniously dumped from the HOA case. In fact, he was transferred out of the criminal section altogether, assigned instead to civil matters. The federal lawyers who handle civil cases are every bit as important as those who take on criminal matters, but for a hot-shot criminal prosecutor, the transfer was considered an embarrassing demotion. The prosecutor soon quit and went into private practice with another former federal lawyer. But that wasn’t the end of it.
Bits and pieces of insider information, nearly all of it meant to be an embarrassment to Bogden and team, made their way into the hands of local reporters, including the story about a leak in the Quon matter. As noted, a formal inquiry into a possible leak was launched under orders from Washington, in part because so many other internal complaints had been filed by a small but vocal group of former (and current) employees.
But investigators got to the bottom of the alleged leak in short order. There was never a “criminal investigation of several prosecutors.” One — and only one — federal attorney had a few cocktails and inadvertently let slip a detail about the case to another lawyer. That tidbit of information allegedly traveled through the legal grapevine and made its way to Quon. The leak was not made to Quon directly, and there is no evidence it affected the case in any way such that Quon was able to destroy any evidence that might be used against her.
‘Absurd’ all around
Quon’s very capable attorney Tom Pitaro, no stranger to legal battles with federal prosecutors, said the allegation that Bogden’s office leaks information is “absurd.”
Other attorneys share that opinion. Tax lawyer George Kelesis has faced off against federal prosecutors many times, and has also advised some clients to cooperate with the office. He says it is “ludicrous for anyone to suggest Dan Bogden is leaking information about Quon or anything else.” Kelesis added that Myhre and Schiess are among the best trial lawyers he’s ever seen, in large part because they play by the rules. Yet, the leakers of the story were able to convince local journalists that this was a huge scandal in the making.
True to his nature, Bogden will not answer questions about the official inquiry into the leak, or about the changing of the guard in the HOA case. Simply put, he does not talk about cases that are in the pipeline, and will not discuss the internal operation of his office — even when it would be in his own best interests. (Unlike in other government offices, it’s illegal for federal prosecutors to talk about their work for the simple reason that much of what they do is presented to grand juries.)
Investigative reporters do not, as a rule, talk about their sources. But I can say this much — after covering federal law enforcement in Las Vegas since the early ’80s, I have never known a government entity less willing to leak stories than Bogden’s office. There are still ways to get such information, but it doesn’t come from Bogden or his top assistants. There are leaks, as we now know, but those leaks are not sanctioned by the office itself and are mostly done to hurt the guys at the top, not help them. Attorney Kelesis tells me that the local legal community is well aware of the ongoing attempt to smear Bogden’s name — and that most of the lawyers who practice in federal court know who is behind it.
More to come
Although Bogden is reluctant to toot his own horn, his office has managed to compile an amazing record in the past few years. In 2010, they filed 646 criminal cases against 806 defendants, which is 24 percent more than in 2009, and almost double the number filed in 2008. Twenty-six percent of those were violent-crime cases, 31 percent were immigration-related and 19 percent were white-collar crime cases. More than 100 people were charged with mortgage fraud. The office conducted 32 criminal trials, 28 of them here in Las Vegas with a conviction rate of 93 percent, despite the fact that they most often face off against the best defense attorneys in the state. Seventy-seven percent of those who were convicted were sentenced to prison.
Many of the bad guys they’ve gone after are among the most dangerous elements of society, including the 161 people charged with federal firearms violations or the 14 slimeballs they busted for trafficking in child pornography. At the same time, the civil division filed 436 cases in 2010 and closed all but 18 of them, an amazing success rate. Included in those were cases of environmental crimes, consumer fraud and employment discrimination.
By the time you read this article, there’s a chance we will all know more about the direction of the HOA investigation and who the most important targets are. For some critics, it will never be enough. For disgruntled former employees, none of the accomplishments mentioned above mean diddly. It is much easier to hammer the U.S. Attorney’s office with a well-placed if specious leak or smear.
It’s much harder to tell about the bigger picture of what they are accomplishing, especially since the employees of that office are handcuffed when it comes to talking about themselves. They are not perfect and never claimed to be. But news reports to the contrary, the Nevada U.S. Attorney’s office is alive and well.
George Knapp is an investigative reporter for KLAS-TV Channel 8 and a columnist for CityLife.
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