The Hartford Courant

February 28, 2002

Page: A1 Section: MAIN Edition: 7 SPORTS FINAL Illustration: PHOTO 1: COLOR, Associated Press
PHOTOS 2-5: (b&w) mugs Source:    EDMUND H. MAHONY; Courant Staff Writer


A former chief Connecticut prosecutor, in testimony that at times was taunting and at others dripped with sarcasm, told Congress Wednesday that groundbreaking organized crime investigations were sabotaged by renegade FBI agents.

Austin J. McGuigan, chief state's attorney from 1978 to 1985, described to stunned members of the House Committee on Government Reform how gangsters penetrated the state's fledgling parimutuel gambling industry in the 1970s and '80s, then murdered potential witnesses to throw investigators off the track. McGuigan's most compelling testimony concerned his belief that corrupt FBI agents working in Boston deliberately withheld evidence from state and local authorities around the country in an effort to destroy investigations associated with the jai alai industry -- and protect the killers, who were their informants.

``It is clear that major organized crime figures operating as informants were permitted to engage in racketeering activities with a wink from, if not the tacit approval of, federal agents,'' McGuigan said.

Over the past year, committee members have learned during hearings that one of those agents, H. Paul Rico, who retired from the FBI in 1975, was hired a year later as vice president and director of security for World Jai Alai of Miami, which operated jai alai frontons in south Florida and Hartford.

During an appearance before the committee last spring, an unrepentant Rico argued with members when confronted with evidence that he helped frame four innocent men for murder. During a second appearance earlier this month, he invoked the Fifth Amendment and declined to answer questions. On Wednesday, McGuigan reserved some of his sharpest sarcasm for Rico, who he said allowed mobsters to be employed by World Jai Alai, contrary to his apparent duties as security director.

``I was somewhat puzzled by that,'' McGuigan said, adding that ``quite frankly, from our perspective, organized crime was being made to feel at home by World Jai Alai.''

McGuigan and a few other veteran organized crime investigators have spoken privately for years about the bizarre set of circumstances surrounding mob penetration of Connecticut's jai alai industry. But listeners couldn't believe that the FBI, an institution then long judged to be above reproach, was behind it all.

McGuigan said that when three key witnesses in the jai alai cases were murdered in the 1980s, he would have laughed off any suggestion that one day he would be asked to address Congress on the subject.

``We thought the bad guys had won,'' he said. ``To me, today, it is touching that I'm here and that so many people who worked so long to uncover the truth have passed away and have not seen justice done.''

After nearly a year of hearings into improper behavior involving FBI agents and their informants, members of the committee gave McGuigan a warm reception.

``I consider these hearings some of the most important hearings that Congress can have,'' said Rep. Christopher Shays, R-4th District.

Previous efforts to examine the mob penetration of the jai alai industry have sputtered because of the difficulty of keeping track of the wide cast of characters.

As McGuigan, who in 1973 became the first Connecticut prosecutor with statewide jurisdiction over organized crime and corruption, testified about his experience, committee members listened raptly, sometimes goggle-eyed. Chairman Dan Burton, R-Ind., periodically interrupted to demand relevant documents from the Department of Justice.

In a related development, Burton announced late Wednesday that he had reached an agreement with the Bush administration that will allow his committee to review Justice Department documents related to its investigation of FBI misconduct in Boston.

In December, President Bush asserted executive privilege to block the committee from reviewing internal Justice Department documents, sparking a face-off over the constitutionality of congressional oversight. Bush argued that congressional review of deliberative documents could lead to political second-guessing of decisions in criminal matters.

Internal FBI memos and other federal documents the committee and others already have obtained back up McGuigan's central contention -- that mobsters from Boston's Winter Hill Gang tried to take over World Jai Alai in order to skim profits. At the center of the plot were the Winter Hill Gang's co-leaders, James ``Whitey'' Bulger and Stephen ``The Rifleman'' Flemmi.

Bulger and Flemmi were multiple murderers who also served, collectively for decades, as top informants for the FBI's Boston office. Rico was instrumental in recruiting Flemmi as an informant. Recently, a special Justice Department task force indicted Bulger and Flemmi for the three jai alai murders, including that of World Jai Alai owner Roger Wheeler Sr. of Tulsa, Okla.

A compelling body of evidence gathered by the committee and others suggests that some FBI agents in Boston obstructed investigations -- including those involving jai alai -- to protect Bulger and Flemmi from arrest. McGuigan said Bulger and Flemmi were part of a ``war on organized crime that went amok.''

``Violent crimes, including murders by so-called informants, were ignored at the whim of law enforcement agents who were, apparently, accountable to no one,'' McGuigan said. ``In the name of intelligence-gathering, state and local prosecutions of violent criminals were undermined and investigations were betrayed.''

When Connecticut investigators began following organized crime into World Jai Alai, agents in Boston withheld crucial information, McGuigan said. Moreover, he said, they tipped off targets of the investigation. Finally when potential witnesses began being killed, he said, federal authorities in Boston undercut Connecticut investigators.

At one point, McGuigan said, Rico, using information from police sources in Boston, tipped off an investigative target to information collected by the Connecticut State Police. The target was John B. Callahan, a reputed Winter Hill associate who became president of World Jai Alai and was later murdered in Florida. Callahan's body was dumped at the Miami airport on the day McGuigan and state police detectives arrived, hoping to persuade him to cooperate.

``They tanked our investigation,'' McGuigan said. ``I realized we weren't playing for the same team.''

Rep. William Delahunt, D-Mass., asked if McGuigan began to smell a rat: ``Did the smell become more putrid at that point?''

``Yes,'' McGuigan said. ``It was troubling.''

McGuigan said charges probably never would have been filed in the jai alai murders if Flemmi had not been arrested in 1995 and used his informant status as a defense.

``These are murders that seemed unsolvable, and it seemed the coverup had succeeded,'' McGuigan said, ``until ... Flemmi decided to claim that he had a free pass on the crime train, because of his status as an FBI informant.''