United States v. Salemme Decision

UNITED STATES OF AMERICA

FRANCIS P. SALEMME, et al.

Cr. No. 94-10287-MLW

UNITED STATES OF AMERICA

JOHN MARTORANO

Cr. No. 97-10009-MLW

1. The Facts Concerning Defendant Stephen Flemmi's Motion to Dismiss Based on Immunity (Page 2)

3. Flemmi's Motion to Suppress the 1984-85 Electronic Surveillance (Page 51)

4. DeLuca's Motion to Suppress Concerning the LCN Induction Ceremony (Page 61)

16. Greenleaf Becomes SAC and Ring Becomes Supervisor of the Organized Crime Squad (Page 184)

18. Morris Tells Bulger and Flemmi That They Can Do Anything They Want as Long as They Do Not "Clip" Anyone (Page 253)

23. Bulger and Flemmi Are Protected From Investigation In the Hobart Willis Case (Page 285)

C. Dismissal of This Case Is Not Now Justified Because Flemmi Was Not Promised Immunity
From Prosecution (Page 457)

(1) Flemmi Does Not Have An Agreement Providing Use Immunity Generally For His Statements to the FBI (Page 472)

(2) The Promise of Confidentiality Means Statements to the FBI Which Have the Effect of Identifying Flemmi as an Informant Cannot Be Used Against Him Unless His Defense Makes Them an Issue (Page 474)

(3) Flemmi Had an Enforceable Agreement Relating to 98 Prince Street, Vanessa's, and 34 Guild Street (Page 481)

(4) A Hearing Will Be Necessary to Determine If This Case Must Be Dismissed and, If Not, Whether Any Evidence Must be Excluded at Trial (Page 512)

(5) If Morris and Connolly Were Not Authorized to Promise Flemmi that the Evidence Intercepted at 98 Prince Street, Vanessa's, and 34 Guild Street Would Not Be Used Against Him, Flemmi's Statements to the FBI Relating to Those Interceptions May Have Been Involuntary and, In Addition, Use of Any Evidence Intercepted At Those Locations May Violate Flemmi's Right to Due Process (Page 524)

2. The Motion to Suppress the 1984-85 Electronic Surveillance is Meritorious (Page 536)

B. Suppression is Not Justified Based on the Alleged Violation of 18 U.S.C. § 2616(1) (Page 543)

C. The Standards to be Applied in Deciding Whether to Suppress for a Failure to Satisfy the Requirements of 18 U.S.C. § 2518(1)(c) Concerning the Necessity for Electronic Surveillance (Page 554)

D. The Necessity Provision of Title III, § 2518(1)(c), is Constitutional in Origin (Page 568)

E. The Motion to Suppress the 1984-85 Surveillance is Meritorious (Page 580)

F. A Hearing is Necessary to Identify the Evidence Which Must be Suppressed Because of the Government's Unlawful Conduct Concerning the 1984-85 Electronic Surveillance and to Determine if Any Other Remedy is Required (Page 611)

3. Flemmi is Not an "Aggrieved Person" With Standing to Seek Suppression of the Interceptions at Vanessa's Under Title III (Page 613)

4. DeLuca Does Not Have Standing to Move to Suppress the Evidence Intercepted at 34 Guild Street For a Violation of Title III because the 1998 Supreme Court Decision in Minnesota v. Carter Indicates That Although His Conversation was Intercepted, It Did Not Constitute an "Oral Communication" As Defined in the Statute, and DeLuca's Fourth Amendment Rights Were Not Violated (Page 619)

In 1861, Lord Acton wrote that, "[e]very thing secret degenerates, even the administration of justice." John Emerich Edward Dalberg Acton, Lord Acton and His Circle 166 (Abbot Gasquet, ed., 1968). This case demonstrates that he was right.

On January 5, 1995, defendant Stephen Flemmi was arrested on a criminal complaint which charged him, James "Whitey" Bulger, and George Kaufman with conspiring to extort money from a bookmaker, Burton Krantz. Five days later, on January 10, 1995, Flemmi, Bulger, Kaufman, and four other defendants were indicted on multiple charges of racketeering and extortion, among other crimes. A complaint authorizing Flemmi's arrest prior to indictment was obtained by the prosecutors because they were concerned that Bulger and Flemmi would be informed of their imminent indictment and flee. This fear was well founded.

Beginning in 1965, Flemmi secretly served as a very valuable and valued confidential informant for the Federal Bureau of Investigation (the "FBI" or "Bureau"). In the thirty years prior to his arrest, Flemmi was, among other things, instrumental in the FBI's successful and acclaimed effort to incarcerate three generations of the leadership of the Patriarca Family of La Cosa Nostra (the "LCN" or "Mafia"). Flemmi had also assisted the FBI in obtaining a warrant that was used to intercept, for the first time, an LCN induction ceremony. § II.30.

In 1976, the FBI played a pivotal role in forging a formidable, enduring partnership between Flemmi and Bulger, who had in 1975 also become an FBI informant. The FBI made Bulger and Flemmi, who were previously acquainted but not close, a perfect match. In Boston, Flemmi and Bulger uniquely shared an antipathy for the LCN, a desire to profit criminally from its destruction, and, most notably, the promised protection of the FBI. § II.5.

As described in detail in this Memorandum, and as summarized below, many members of the FBI participated in honoring the promise to protect Flemmi and Bulger. Prominent among them was John Connolly, who from 1975 until his retirement in 1990 was their FBI "handler." Although retired in 1995, Connolly remained in contact with his close friends and former colleagues on the Organized Crime squad in the Boston office of the FBI. As a result, he learned that Bulger and Flemmi were scheduled to be indicted on about January 10, 1995. Connolly shared this information with Bulger, who, as Connolly expected, became a fugitive and also warned Flemmi so that he could flee. Flemmi, however, miscalculated. Not expecting to be charged and subject to arrest so soon, Flemmi was still in Boston when the criminal complaint against him was issued on January 4, 1995. § II.32.

Flemmi's arrest represented a radical departure from his historic relationship with the government. At the urging of Attorney General Robert Kennedy, in the mid-1960's a previously reluctant FBI became committed to combatting the LCN. FBI Special Agent H. Paul Rico recruited Flemmi to serve as an asset in that effort, which has since the mid-1960's been the FBI's highest national priority. Flemmi was, among other things, known to Rico as a member of the Winter Hill Gang, which was in the midst of a violent gang war, and as a reputed murderer. Flemmi then had close contact with key members of the Patriarca Family, in meaningful measure because of his partnership with his present codefendant Francis Salemme. Although rightly regarded as a potential member of the Patriarca Family, Flemmi did not share Salemme's unequivocal enthusiasm for the LCN. Thus, Flemmi was responsive to the relationship that Rico proposed. § II.2.

Because of Flemmi's ability to provide information concerning leaders of the LCN, Rico caused the FBI to designate him as a Top Echelon informant, the highest status a Bureau source can achieve. Flemmi, however, was never told that he was opened or closed administratively as an informant. Nor was Flemmi advised that any of the information that he was providing was being memorialized in writing. Rather, instead of treating Flemmi as a criminal to be dealt with cautiously, Rico successfully sought to cultivate in Flemmi the sense that he was an ally in a common cause, primarily a war against the LCN. § II.2. This is a sense that was later nurtured by Connolly, when he succeeded Rico as Flemmi's handler, despite the fact that Connolly too understood that Flemmi had committed many serious crimes, including murder. §§ II.5, II.33.

As the alliance between the FBI and Flemmi and Bulger developed, Flemmi and Bulger were invited to dine periodically with members of the FBI engaged in investigating the LCN, including Connolly, several of his colleagues on the Boston Organized Crime squad, Connolly's supervisors, John Morris and James Ring, and Joe Pistone, an FBI agent from New York who had become famous for his undercover infiltration of the LCN as "Donnie Brasco." The timing of these dinners suggests that they were often arranged to celebrate milestones in the FBI's relationship with Bulger and Flemmi, such as the successful bugging of the LCN's Boston headquarters at 98 Prince Street in 1981, and the frustration of an investigation of Bulger and Flemmi that had been led by the Drug Enforcement Administration (the "DEA") in 1984-85. At these dinners, the agents, Bulger, and Flemmi at times exchanged gifts. Although FBI procedures required that all contacts with informants be documented, there is only one, 1979 report reflecting matters discussed at these dinners. There is no record of the gifts exchanged. §§ II.10, II.11, II.16, II.17, II.18.

Rico made several promises to Flemmi in the course of developing him as an informant. Among other things, Rico promised Flemmi that his cooperation would be confidential and that his service as a source would not be disclosed to anyone outside of the FBI. This was a customary assurance that the FBI has provided to its informants at least since 1965. It is a promise that Rico and the many other past and present members of the FBI agents who testified in this case regarded as "sacred." §§ II.2, II.8.

There was good reason for agents of the FBI to believe in the importance of the promise of confidentiality that is regularly made by the Bureau to its informants. As the Supreme Court has recognized, providing potential sources reasonable assurances regarding the confidentiality of their cooperation encourages them to provide information and protects their safety. Roviaro v. United States, 353 U.S. 53, 59 (1957). Moreover, the FBI Manual has long instructed agents to exercise constant care to assure that an informant's identity not be disclosed to anyone, intentionally or inadvertently. §§ II.6 and III.1.D(3). Strictly adhering to this principle, unless authorized by the informant, the FBI has regularly refused to identify its sources even to prosecutors and other Department of Justice officials with a legitimate need to know whether, among other things, subjects of investigations were cooperating with the FBI and, therefore, might assert, or indeed have, certain foreseeable defenses to prosecution, including that they had been promised immunity or authorized to commit acts that would otherwise be criminal. §§ II.2, II.17, II.20, II.30, II.32, II.33.

Officials of the Department of Justice have historically accepted the fact that the FBI would refuse any request to confirm or deny that an individual was an informant. For example, William F. Weld, a former United States Attorney in Boston and a former Assistant Attorney General in charge of the Criminal Division, testified that he expected that if he asked the FBI to identify an informant, he would be told to "go pound sand." §§ II.17, III.1.D(3). As a formal reflection of this attitude, in 1976, when the Attorney General first issued Guidelines for the FBI to use in exercising its discretion with regard to dealing with informants, the Guidelines provided no role for the United States Attorney or the Department of Justice in authorizing an informant to engage in what would otherwise be criminal activity. They were later revised to require consultation with the United States Attorney before the FBI authorized an informant to engage in criminal activity that involved a significant risk of violence, but stated that any such consultation be conducted in a manner that would not reveal the identity of the source. § II.6.

It was the understanding of the present and former members of the FBI who testified in this case that information which Flemmi or any other informant provided the FBI could not properly be used against him or, in any event, that it would not be used against him. Thus, it was the consistent practice of the FBI not to use information received from an informant to investigate him.⁽¹⁾ Nor would the Bureau disclose information provided by a source to any other agency or any prosecutor investigating him. §§ II.2, II.8, II.14, II.16, II.20, II.21, II.33, III.1.D(2)-(3).

While the repeated promises of confidentiality which Flemmi received were customary and generally regarded as appropriate, Rico also made Flemmi a promise that was irregular, but not unique. He promised Flemmi that if he served as an FBI informant, the Bureau would protect him. § II.2. This is a promise that was expressly reiterated and amplified by Connolly and Morris. §§ II.5, II.11, II.18. As summarized below, the assurance that Flemmi would be protected by the FBI was also communicated by the conduct of Rico, Connolly, and Morris, and was confirmed by the actions of many, but not all, of their colleagues in the FBI.

Flemmi, however, was never told that the protection that he was promised included immunity from prosecution. The word "immunity" was never mentioned. §§ II.2, II.5, II.16. Flemmi understood that it was permissible for agencies other than the FBI, or FBI agents ignorant of his relationship with the Bureau, to investigate him. He also knew that he could properly be prosecuted if any such investigation succeeded despite the best efforts of his FBI handlers to protect him. §§ II.2, II.9, II.17, II.32, III.1.C.

Relying upon the promises made to him by the FBI, and on the repeated performance of those promises, Flemmi rendered exceptional service in the Bureau's war against the LCN and other matters. In the 1960's, Flemmi regularly provided information, that Rico rated as "excellent," regarding the activities of Raymond L.S. Patriarca, and other members and associates of the Family that bore his name, including Gennaro Angiulo, Illario Zannino, who was also known as Larry Baione, and Salemme. Flemmi was also instrumental in Rico's successful effort to develop LCN member Joseph Barboza into a cooperating witness. Barboza's testimony led to the convictions of Patriarca and several of his associates, and earned him national renown. In addition, in the mid-1960's, Flemmi furnished Rico with an appreciated warning of a threat to the life of Middlesex County District Attorney Garrett Byrne. § II.2.

In 1969, Rico told Flemmi that he and Salemme would soon be indicted for the attempted murder of Barboza's lawyer, John Fitzgerald, and suggested that they flee. Flemmi and Salemme acted on that advice. While a fugitive, Flemmi stayed in touch with Rico. Rico, however, did not tell the agents responsible for the Flemmi fugitive investigation that he had spoken to him. It appears that after separating from Salemme because of a series of disagreements, Flemmi told the FBI where Salemme could be found. Thus, Connolly was able to apprehend Salemme in New York. §§ II.2, II.3.

After Salemme was convicted of the Fitzgerald bombing and incarcerated to serve a lengthy sentence, at Rico's request Flemmi returned to Boston in 1974. As Rico promised, Flemmi was immediately released on bail and the charges against him were dropped. § II.3.

In 1975, with assistance from Bulger, Connolly revived Flemmi's relationship with the Bureau. Flemmi promptly proved his continued value as a source. After Barboza was murdered in 1976, Flemmi provided information that permitted Connolly to convert a coconspirator into a cooperating witness who identified Patriarca Family member Joseph Russo as Barboza's killer. In 1992, Russo pled guilty to that charge and was sentenced by this court to what turned out to be life in prison. § II.7.

In 1980, Flemmi provided Connolly with information concerning the assassination of federal Judge James Wood by a group of major drug dealers. Connolly later advised his superiors that he believed that the contacts Flemmi had made at his direction in that investigation may have created the false impression that Flemmi was involved in narcotics. § II.11.

In 1980, Flemmi and Bulger made a critical contribution to the FBI's ambitious and ultimately successful effort to bug Angiulo's headquarters at 98 Prince Street. The location was viewed as virtually impenetrable. Connolly and Morris asked Flemmi and Bulger to visit 98 Prince Street and obtain information important to the physical feasibility of the proposed bugging. Bulger justifiably feared that he and Flemmi might be killed if they went to that location. Flemmi expressed the additional concern that the bugging of 98 Prince Street would likely result in the interception of information concerning criminal activity in which he and Bulger were engaged. Morris and Connolly, however, assured Flemmi and Bulger that the 98 Prince Street tapes would not be a problem for them; they would be protected for anything intercepted at 98 Prince Street rather than prosecuted. Thus, Flemmi reasonably understood that if he assisted the FBI, none of the evidence intercepted at 98 Prince Street would be used against him, directly or indirectly. §§ II.11, III.1.D(3).

As a result of the promises made by Morris and Connolly, Flemmi went with Bulger to 98 Prince Street, and returned with a diagram of the premises and the other information that the FBI had requested. Subsequently, Bulger and Flemmi were two of the informants relied upon in the application for the warrant which was issued authorizing the installation of a bug at 98 Prince Street. Id.

In 1991, Morris assessed for his superiors Flemmi's value as an informant, writing that the information Flemmi provided had been utilized in six successful applications for electronic surveillance, involving, among other things, the two highest priority Organized Crime investigations in Boston. The 98 Prince Street investigation, Morris wrote, "is one of the highest priority organized crime cases in the FBI today and involves what has been characterized by [FBI Headquarters] officials as one of the most important and successful Title IIIs to have been conducted by the FBI in the past ten years." Id.

In 1985, at a dinner at Morris' home, in Connolly's presence, Morris again told Flemmi and Bulger that they would not be prosecuted for anything on the 98 Prince Street tapes. In addition, Morris told them, "you can do anything you want as long as you don't 'clip' anyone." § II.18.

Morris' 1981 assessment of the value of the 98 Prince Street tapes to the FBI proved to be accurate. With continued assistance from Flemmi and Bulger, the FBI used the evidence intercepted there to develop a case which secured the convictions, in 1986, of Angiulo, Zannino, and much of the rest of the leadership of the LCN in Boston. §§ II.12, II.20.

Following those convictions, Flemmi quickly contributed to the FBI's effort to incarcerate the next generation of the leadership of the LCN in Boston, including Russo, Vincent Ferrara, and Robert Carrozza. Flemmi reported that the emerging leaders of the LCN were meeting regularly in a storeroom at Vanessa's Restaurant, which was owned by Angelo "Sonny" Mercurio, who had recently been released from prison. § II.20.

The FBI targeted Vanessa's for electronic surveillance. Once again, Flemmi was tasked to obtain vital logistical information and performed his mission. Flemmi and Bulger were later two of the three sources relied upon in the application for a warrant to bug Vanessa's. Before being discovered in 1987, the bug intercepted, among other things, a dramatic extortion of two elderly bookmakers, "Doc" Sagansky and Mo Weinstein, which Flemmi had told the FBI was being planned. As a result, the Bureau developed a powerful case against Ferrara, Carrozza, Mercurio, and a number of their confederates. Id.

At Connolly's request, in 1988, Flemmi began to provide information again on Salemme, who had recently been released after serving fifteen years in prison for the Fitzgerald bombing. Raymond J. Patriarca had by then succeeded his deceased father as Boss of the Family. In early June 1989, Flemmi reported that Patriarca had given his "blessing" to Salemme to assume leadership of the LCN in Boston when, as anticipated after a search warrant was executed at Vanessa's, Russo, Ferrara, and their crew were indicted. Flemmi also kept Connolly up to date on the substantial and escalating risk that the Russo faction of the LCN might soon try to murder Salemme. §§ II.28, II.29. In addition, Flemmi contributed to the FBI's successful effort to target Salemme for electronic surveillance at the Busy Bee restaurant. § II.28.

Flemmi and Bulger also contributed to the recruitment of Mercurio as a Top Echelon informant.⁽²⁾ As they explained to Connolly, Mercurio was disenchanted with the LCN, close to Bulger and Flemmi, and planning to flee rather than return to prison as a result of the bugging of Vanessa's. Employing a profile provided by Flemmi and Bulger, Connolly and Ring developed Mercurio into a very valuable source, who, among other things, made it possible for the FBI to bug the LCN induction ceremony conducted on October 29, 1989, at 34 Guild Street in Medford, Massachusetts. §§ II.29, II.30.

Connolly retired from the FBI in 1990. As a result, without their knowledge, Flemmi and Bulger were closed administratively as FBI informants. Flemmi, however, was then characterized as having "furnished the Boston Division [of the FBI] very valuable information through the years regarding LCN activities." Ex. 44. The Bureau did not want to lose Flemmi and Bulger as sources when Connolly retired and, therefore, reported that it was considering options to reopen them. Although not assigned a new handler, Flemmi continued to provide, through Connolly, information that the FBI was seeking concerning the LCN. That information included the numbers of the telephones used by Salemme's brother Jack, which the Bureau wished to tap as part of its investigation of Salemme. § II.32.

As indicated earlier, Rico, Connolly, and Morris each told Bulger and Flemmi that he would be "protected" in return for serving as an informant. §§ II.2, II.5, II.18. The conduct of Rico, Connolly, Morris, and many but not all of their colleagues at the FBI, expressed even more clearly than their words the FBI's agreement to protect Flemmi.

Rico told Flemmi about other individuals who were cooperating with law enforcement so that Flemmi could be careful around them. § II.14. As described previously, in 1969, Rico advised Flemmi that he and Salemme would soon be indicted and suggested that they flee promptly. § II.2. In addition, as Rico promised, Flemmi was immediately released on bail and the fugitive charges against him were dismissed when Flemmi followed Rico's advice and returned to Boston in 1974. § II.3.

Connolly and Morris, individually and in tandem, also acted repeatedly to protect Flemmi. In 1977 or 1978, Connolly intimidated executives of National Melotone from pursuing their complaint that Bulger and Flemmi were extorting the vending machine company's customers. § II.7. In early 1979, with their sources' consent, Morris and Connolly told Strike Force Attorney Jeremiah O'Sullivan that Flemmi and Bulger were valuable informants and persuaded him, with the agreement of Thomas Daly, the FBI agent who was leading the investigation, not to indict them in a race-fix case, in part so that Bulger and Flemmi could contribute to the FBI's effort to bug 98 Prince Street. § II.9. In 1979, Morris received reports from informants that Bulger and Flemmi were shaking down bookmakers, but no investigation was conducted. § II.10.

In 1980, Connolly informed Bulger and Flemmi that the Lancaster Street Garage had been bugged as part of a Massachusetts State Police investigation or confirmed that fact for them. Also in 1980, Flemmi and Bulger were told when the bug at 98 Prince Street was installed and when it was removed so that they would not be intercepted. § II.11.

In 1982, Morris caused Connolly to tell Flemmi and Bulger that Brian Halloran was cooperating with the FBI and had implicated them in the murder of Roger Wheeler, the President of World Jai Lai. About two weeks later, Halloran was killed.⁽³⁾ Morris believed that Bulger and Flemmi were responsible for Halloran's death, but did not disclose to the agents investigating it that they had been told that Halloran was cooperating with the Bureau. § II.13.⁽⁴⁾

In an effort to protect Bulger and Flemmi, Morris and Connolly also identified for them at least a dozen other individuals who were either FBI informants or sources for other law enforcement agencies. One of them may have been John McIntyre. McIntyre disappeared about six weeks after he told the FBI and several other law enforcement agencies that Bulger was engaged in illegal activity, and that Bulger's associate Patrick Nee was involved with the Valhalla, a ship that was captured running guns to the Irish Republican Army. McIntyre was planning to meet with Nee the night that he disappeared. § II.14.

In 1984, Connolly received reliable information that Bulger and Flemmi were engaged in an ongoing extortion of Stephen and Julie Rakes to obtain control of a liquor store that came to be

known as the South Boston Liquor Mart. Connolly neither recorded the information nor conducted any investigation. He did, however, share the information that he had received with Bulger. § II.15.

As summarized more fully below, in 1984, Connolly also warned Flemmi and Bulger of an investigation targeting them that was being led by the DEA. He subsequently told them that as part of that investigation a wiretap had been placed on the telephone of their colleague Kaufman. § II.17.

In 1986, after tasking Flemmi to acquire information vital to the FBI's effort to bug Vanessa's, Connolly told him when the bug was installed so that Flemmi would not be intercepted. Connolly later told Flemmi when the bug had been removed. § II.20.

In 1988, Connolly advised Flemmi that a Boston Police Lieutenant, James Cox, would be wired and would attempt to engage Flemmi in incriminating conversation. § II.26.

Also in 1988, Morris had Connolly warn Flemmi and Bulger to stay away from John Bahorian, whose telephone was about to be tapped by the FBI in an effort to acquire evidence against Flemmi, among others. Morris also told Connolly to tell Bulger and Flemmi not to do anything to Bahorian because he "did not want another Halloran." Morris later reiterated both of these warnings directly to Bulger and Flemmi. He also told Flemmi that he could keep him out of any indictment arising from the Bahorian electronic surveillance. Although Bahorian and others were ultimately indicted, Flemmi was not. Id.⁽⁵⁾

In 1988 or 1989, Connolly told Bulger that Timothy Connolly was cooperating with the FBI and would try to record conversations with Bulger and Flemmi. Bulger passed this warning on to Flemmi. § II.28.

After providing Connolly information to assist in the FBI's effort to recruit Mercurio as an informant, Flemmi was told when that initiative had succeeded. § II.29.

Following his retirement in 1990, Connolly used his continuing connections with his close friends and former colleagues on the Organized Crime squad to obtain information concerning investigations that might have resulted in charges against Bulger and Flemmi. Connolly regularly shared the information he acquired with them, including the scheduled date for the indictment of Bulger and Flemmi in this case. § II.32.

While Rico, Morris, and particularly Connolly were at the hub of the protection promised and provided to Flemmi, many of their colleagues and superiors in the FBI also contributed by their conduct to that promise and to its fulfillment.⁽⁶⁾

In 1977, Daly and Special Agent Rod Kennedy were told by Francis Green that Bulger and Flemmi had threatened to kill him in connection with their attempt to collect a debt, but no effort was made to develop the reluctant Green as a witness against them. § II.7. As described earlier, in 1979, Daly later joined O'Sullivan in agreeing not to charge Bulger and Flemmi in the race-fix case. § II.9.

In 1982, the Boston FBI agents aware of Halloran's cooperation did not tell their colleagues in Oklahoma City, who had expressed interest in him, that Halloran was available to be interviewed. When agents from Oklahoma City sought to interview Bulger and Flemmi, ASAC Robert Fitzpatrick successfully opposed this request, in part by falsely claiming that he had interviewed Bulger about the matter. § II.13.

In 1984, Sean McWeeney, the Chief of the Organized Crime Section at FBI Headquarters, told Connolly that the DEA was leading an investigation targeting Bulger and Flemmi. Connolly shared this information with his sources. § II.17.

In 1988, Rod Kennedy, John Newton, their supervisor Bruce Ellavsky, and ASAC Larry Potts provided Bulger and Flemmi protection concerning an ongoing extortion of Raymond Slinger. Although Slinger was willing to wear a recording device and testify against Flemmi and Bulger, after Ellavsky consulted Potts, the information that he provided was neither documented nor investigated. Instead, Bulger was told that Slinger had spoken to the FBI. § II.22.⁽⁷⁾

Bulger and Flemmi were also protected by the FBI in the successful investigation of drug dealer Hobart Willis and others. Although in 1986 and 1987, Ellavsky and James Blackburn, Jr. received increasingly specific information that Bulger was extorting Willis, after Connolly was consulted no investigation of Bulger was conducted. Nor was the information that the FBI had received concerning Bulger shared with the other agencies involved in the joint investigation of Willis. § II.23.

Similarly, in 1987, when James Lavin obtained photographs and other information indicating that City of Boston employees had illegally erected guardrails on the private property of the South Boston Liquor Mart, he consulted Connolly. After being advised that Bulger was a valuable informant, Lavin made no record of the information he had received and conducted no investigation. § II.24.

In 1989, Joseph Murray, an incarcerated drug dealer understood to be closely connected with Bulger, alleged that Connolly and Newton were selling information about electronic surveillance to Bulger and Flemmi. Murray also claimed to know of a witness who saw Bulger participate in the Halloran murder. However, when interviewed by Edward Quinn and Edward Clark in 1989, Murray was either not asked about his allegations concerning Connolly and Newton or his responses were not recorded in the notes and FBI report of the interview. ASAC Dennis O'Callahan, however, subsequently prepared a memorandum, which Ahearn sent to FBI Headquarters, stating that Murray's allegations were unsubstantiated. In addition, Murray evidently was not questioned in detail about the information he indicated that he had concerning Bulger's role in the Halloran murder. Moreover, the information Murray did provide was not given to the FBI agents responsible for the Halloran murder investigation or indexed in a way that would permit them to find it. Nor was any effort made to employ the willing Murray as a source of information to be used against Flemmi, Bulger, or anyone else. § II.25.

Finally, as indicated earlier, members of the Organized Crime squad kept Connolly advised of at least some developments in the investigation of Flemmi and Bulger that was initiated after Connolly retired. Connolly used that information to honor his promise to protect Bulger and Flemmi. § II.32.⁽⁸⁾

After Connolly retired, in about 1992, the United States Attorney's Office began a grand jury investigation of Bulger and Flemmi. Agents from the FBI Organized Crime squad participated in the investigation. At least six of the agents who testified before the grand jury knew that Bulger and Flemmi had been FBI informants. Several of them had read all or parts of Flemmi's and Bulger's informant files before testifying. In addition, contrary to the promises made to Flemmi explicitly concerning 98 Prince Street and implicitly concerning 34 Guild Street, evidence intercepted at those locations was presented to the grand juries which indicted him. § II.32.

In 1992, the FBI refused a request by the then United States Attorney Wayne Budd, and his assistants, to confirm that Bulger was an informant or to permit them to review Bulger's informant file. The prosecutors were concerned about the implications for their investigation if Bulger was, or had been, an FBI informant. Among other things, they wished to address the foreseeable issues of immunity and authorization now raised by Flemmi, whose history as an informant would have been revealed if Bulger's had been disclosed. Id.

On October 25, 1994, the original indictment in this case was returned against defendant Robert DeLuca. It charged him with participating in the October 29, 1989 LCN induction ceremony. The indictment was evidently obtained because the five-year statute of limitations was about to expire. DeLuca was not immediately given notice of the indictment. Rather, it was sealed and randomly assigned to this court. Id.

On about December 22, 1994, in anticipation of the imminent, additional charges in this case, the United States Attorney's Office again asked the FBI if Bulger was an informant, emphasizing its need to know because the government would soon have to disclose exculpatory information to Bulger and his codefendants. Once again, the FBI resisted this request. The Boston Office of the Bureau urged FBI Headquarters to continue to support its opposition to telling the United States Attorney that Bulger had been an informant. It argued that it was not expected that the issue of Bulger's informant status would be raised by Bulger or his codefendants and, in any event, that no judge would compel disclosure of his status if the issue were raised. Id.

However, the FBI's Principal Legal Adviser in Boston, John Michael Callahan, examined the Bulger and Flemmi files with a view to determining if they contained information which would be exculpatory in the context of their forthcoming indictment. Callahan focused on the issues raised by the United States Attorney's Office, including whether Bulger and Flemmi had been authorized to engage in conduct which would otherwise be criminal, whether they had been explicitly or implicitly promised any form of immunity, and whether Bulger and Flemmi "had provided information to the FBI which would undercut a central theme of the indictment, namely, that there was a close working relationship between La Cosa Nostra and the Winter Hill Gang." Ex. 271; § II.32.

After completing his review, Callahan concluded that Flemmi had been "at least tacitly authorized" by the FBI to participate in "illegal gambling" and "LCN policymaking." The FBI recognized that the Flemmi and Bulger informant files contained information that would be exculpatory in the context of the imminent charges. The Bureau also realized that the failure to tell the United States Attorney that Bulger and Flemmi had been informants, and to provide the prosecutors with relevant materials, "could wreck the proposed organized crime indictments scheduled to be returned on January 9, or January 10, 1995." Id.

Accordingly, on January 9, 1995, the FBI told United States Attorney Donald Stern, and two of his assistants who were not directly involved in the investigation, that Bulger and Flemmi had been informants. The FBI also provided what Callahan characterized as a "quick general overview of the kind of information" that he had discovered. Id. Stern did not, however, insist that the prosecutors handling the case, or anyone else outside the FBI, review the Bulger and Flemmi informant files before the indictment previously prepared was presented to the grand jury. Nor did Stern share the information that he had received with the prosecutors who were presenting the case to the grand jury, evidently because he recognized the risk that their disqualification might be required if they were exposed to information acquired from Bulger or Flemmi as a result of any promise of immunity. Id.

Thus, the indictment that was previously prepared and approved was presented to the grand jury on January 10, 1995, by prosecutors who "did not know that Bulger and Flemmi had been informants or of any assessment of the information in their informant files." Ex. 269; § II.32. Those charges were brought against six more defendants in a ninety-one-page Superceding Indictment of the original charges against DeLuca. Therefore, pursuant to the District Court's well-known procedures concerning superceding indictments, the greatly expanded case was not randomly drawn, but rather was assigned to this court. Thus, the government exercised what was in effect an option offered by the District Court's rules to select this court to preside in the case against Bulger, Flemmi, and their original codefendants, Francis Salemme, Francis Salemme, Jr., Robert DeLuca, George Kaufman, and James Martorano. § II.32.⁽⁹⁾

The First Superceding Indictment charged the defendants with, among other things, from 1969 to January 1995, engaging in a conspiracy to violate, and violating, the RICO statute. They were also charged with conspiring to extort, and extorting, bookmakers, from 1979 to 1994. § II.33.

With regard to the RICO charges, the alleged enterprise was neither the Patriarca Family of La Cosa Nostra nor the Winter Hill Gang, organizations that have, in effect, been proven to be RICO enterprises in prior prosecutions. Rather, the defendants were alleged to have been part of a unique association-in-fact enterprise made up of individuals who joined together to use their respective relationships with either the Patriarca Family or the Winter Hill Gang to, among other things, facilitate the unlawful activities of the enterprise and coordinate the activities of the Patriarca Family and the Winter Hill Gang. Id.

In view of the roles of Bulger and Flemmi as Top Echelon informants utilized to provide, and in some instances tasked to obtain, information for the FBI concerning the LCN, there is now a serious question presented concerning whether they were authorized to engage in the conduct alleged to be criminal and are, therefore, not guilty as charged. There are also questions relevant to all of the defendants regarding whether the alleged conspiracies and enterprise genuinely existed, because an agreement with someone acting as an agent of law enforcement is not a criminal conspiracy. These questions, however, must be addressed at trial. §§ II.33, III.1.A. It is the issue of immunity that the court must decide in these pretrial proceedings. §§ III.1.B, C, D (1)-(5).

All of these issues, however, present serious impediments to the successful prosecution of this case. If the United States Attorney and other officials of the Department of Justice had been properly informed before the proposed indictment of Bulger and Flemmi was presented to the grand jury, perhaps Bulger and Flemmi would not have been charged at all, or different, more narrow charges might have been fashioned in an effort to reduce the risk that their indictment would prove to be fatally flawed. It is inconceivable to this court, however, that the case against Flemmi and Bulger as indicted in January 1995, would have been brought by any reasonable prosecutor who was properly informed of their relationship with the FBI.

The pending charges against Flemmi and Bulger were brought without anyone outside the FBI reviewing Flemmi and Bulger's informant files or considering carefully the issues that they raised. It was not until July 1995, that a member of the United States Attorney's staff first read those files. The prosecutors in this case were subsequently told that Bulger and Flemmi had been FBI informants. They were not, however, then provided with any additional information because of an enduring fear that if they knew more, their disqualification would be requested, if not required. § II.33.

In August 1995, the government advised the magistrate judge, ex parte, that Flemmi had made potentially relevant statements to the FBI in the context of a confidential relationship over the course of many years. The government reported that Department of Justice officials would review the relevant files and would seek guidance from the magistrate judge concerning the government's discovery obligations. Although in September 1995, this court told the parties that it understood that there were no matters pending before the magistrate judge and would decide all future issues itself, the government continued to secretly seek rulings from the magistrate judge relating to the implications for discovery of Flemmi's service as an informant. Id.

In the fall of 1995, representatives of the Department of Justice and of the United States Attorney's Office who were not then on the prosecution team for this case, informed the magistrate judge, in sealed ex parte submissions, that Callahan had concluded that the FBI had "at least tacitly authorized [Flemmi's] participation" in "illegal gambling and in LCN policymaking," but that "very little in the Flemmi and Bulger files is even arguably Brady material." The magistrate judge agreed with this erroneous assessment. Nevertheless, the government recognized that Flemmi was entitled to certain documents that were in his informant file. As requested by the government, in December, 1995, the magistrate judge ordered that those documents be furnished to Flemmi directly, rather than to his attorney. Id.

The government, however, did not comply with this Order. Flemmi did not receive any of the documents the government had been directed to produce to him. If those documents had been promptly provided to Flemmi, he would, in 1995 or early 1996, have learned for the first time that the FBI had documented some of the information that he and Bulger had furnished. Id.

During 1995 and 1996, this court decided many pretrial matters. Among other things, Flemmi was denied bail; the government was allowed to obtain another superceding indictment to address defects identified by defendants' motion to dismiss; charges against an additional defendant, John Martorano, were brought in the Flemmi case and later alleged instead in what the court deemed to be a separate indictment; and motions to suppress the electronic surveillance conducted at the Busy Bee restaurant were denied, after evidentiary hearings, despite proven defects in obtaining the warrants and in sealing the tapes. Id.⁽¹⁰⁾

In March 1997, the defendants moved for evidentiary hearings on their motions to suppress certain electronic surveillance evidence, including the electronic surveillance conducted jointly by the DEA and FBI in 1984-85, and by the FBI at 34 Guild Street in 1989. In connection with these motions, each of the defendants, with the significant exception of Flemmi, moved for disclosure of whether Bulger, Mercurio, Robert Donati, and other individuals were FBI informants. Flemmi joined in all of the motions except for the request concerning Bulger. Id.

With the agreement of the parties, because the motions implicated the safety of suspected informants, the submissions and hearings on the motions were initially closed to the public. The government strenuously opposed the requests for evidentiary hearings on the motions to suppress and the related requests to confirm or deny that Bulger, Mercurio and/or Donati were informants. In the course of the proceedings the court discovered the sealed submissions indicating that Flemmi and Bulger had been informants. With the consent of all counsel, the court consulted Flemmi privately. Flemmi immediately decided to disclose to his attorney and his codefendants that he had been an FBI informant. Id.

On May 22, 1997, the court issued a decision granting the requests for evidentiary hearings on the motions to suppress and ordering that the government reveal whether Bulger, Mercurio, and/or Donati were informants. At the request of the government, the decision was sealed to permit the Acting Deputy Attorney General to decide whether the government would comply with the Order concerning Bulger, Mercurio, and Donati, dismiss the case, or be held in civil contempt in an effort to render the decision appealable. Id.

It was then foreseeable that, if the government did not dismiss this case, Flemmi's history as an informant would soon be disclosed publicly and that Bulger's status as a source would be revealed by Flemmi or, since they were virtual Siamese twins, be easily inferred. In response to the May 22, 1997 Memorandum and Order, the government, in a sealed submission, confirmed that Bulger had been an informant and, contrary to its previous position, conceded that there was a proper basis for the court to have ordered evidentiary hearings on the motions to suppress the electronic surveillance conducted in 1984-85 and at 34 Guild Street. Id.

Demonstrating again the Department of Justice's traditional deference to the FBI in matters concerning the confidentiality of its sources, however, the Acting Deputy Attorney General declined to obey the Order to confirm or deny whether Mercurio and/or Donati were informants who had assisted the government concerning the electronic surveillance conducted at 34 Guild Street. At that point the May 22, 1997 Memorandum and Order was unsealed.⁽¹¹⁾ Id.

The defendants moved to have the Acting Deputy Attorney General held in civil contempt. Thus, he was at risk of being incarcerated until he complied with the court's Order concerning Mercurio and Donati. Nevertheless, he repeatedly refused to do so. When questioned by the court, however, Mercurio acknowledged that he had been an informant. The Department of Justice subsequently represented that the deceased Donati had not been a source. Thus, the motion to hold the Acting Deputy Attorney General in contempt became moot. Id.

In connection with the pending motions to suppress, Flemmi filed several increasingly specific affidavits describing promises of protection that he had received from the FBI and instances of those promises being performed. Flemmi alleged, among other things, that Morris had told him and Bulger that they could be involved in any criminal activities short of murder and would be protected by the FBI; that he had been tipped off to the indictment in this case so that he could flee if he wished to do so; and that Mercurio had also been given prior notice of his indictment and, therefore, had been able to become a fugitive. Id.

In late June 1997, the court ordered that the government disclose to the defendants information relating to the pending motions. Thus, a great many documents which the FBI expected would never be seen by anyone outside the Bureau were produced and, in many instances, made part of the public record.⁽¹²⁾ Id.

In addition, pursuant to Federal Rule of Criminal Procedure 12.3(a)(1), Flemmi was required to provide notice of his intention to assert as a defense at trial that conduct alleged to be criminal was actually authorized by the FBI. At the government's request, the defendants were also ordered to file their foreseeable motions to dismiss and supporting affidavits, so that any hearings granted on those motions could be conducted in conjunction with the hearings on the related motions to suppress. The court allowed Flemmi's request for an evidentiary hearing on his motion to dismiss because of purported promises of immunity. It denied, without prejudice to later consideration, the defendants' request for evidentiary hearings on their motions to dismiss on other grounds, including alleged outrageous government misconduct constituting a denial of their rights to Due Process.

The hearings ordered were held throughout 1998. They generated over 17,000 pages of transcripts and 276 exhibits. The court's findings of fact are detailed in this Memorandum. Its conclusions of law are also described in detail, and are summarized below.

Flemmi's motion to dismiss based on an alleged promise of general immunity from prosecution is not meritorious. § III.1.C. Further proceedings will be required, however, to determine whether Flemmi is entitled to dismissal because evidence that he was properly promised would not be used against him was presented to the grand juries which returned the indictments in this case. § III.1.D.(2)-(4). As summarized below, it would also have been illegal for evidence derived from the 1984-85 electronic surveillance to have been presented to those grand juries. Future proceedings will also be required to determine whether this occurred. If evidence derived from the 1984-85 electronic surveillance was presented to the grand juries that indicted Flemmi, the court will have to decide if that unlawful use of intercepted evidence requires, or contributes to requiring, dismissal of the case against Flemmi. § III.2.F. In addition, the further hearings will permit the court to identify the evidence which must be excluded at trial if the case against Flemmi is not dismissed.

Flemmi did not have an agreement that he would not be prosecuted in return for his service as an FBI informant. The FBI agents primarily responsible for dealing with Flemmi, by word and deed, for thirty years, promised Flemmi protection in return for the valuable information that he was providing. The conduct of many other members of the FBI, including at least three ASACs, and the Chief of the Organized Crime Section at FBI Headquarters, contributed to creating, communicating, and performing the promise of protection to Flemmi. Flemmi reasonably relied on the FBI's promise of protection and, in return for it, provided very valuable assistance to the government in its war against the LCN and other matters. § III.1.C.

Flemmi was not, however, explicitly or implicitly promised immunity from prosecution. The term immunity was never used in conversation with him. More importantly, Flemmi did not understand that the government, or any of its agents, had agreed that he would not be investigated by the FBI, or any other law enforcement agency, or not be prosecuted. Rather, he expected that the FBI would overlook some of his criminal activity, provide him information concerning any investigations that were conducted, and warn him of any imminent charges against him of which it learned. The FBI performed its part of the bargain. Thus, it is not necessary or appropriate to decide if the agents entering into this agreement were authorized to do so, or whether the agreement was not valid because it violated public policy or because it attempted to provide immunity for future criminal conduct. Id.

In addition, the mere fact that Flemmi was an informant does not mean that nothing that he said to the FBI could be used against him in any way. § III.1.D(1). However, the FBI's promise to maintain the confidentiality of the fact that Flemmi was a source also constitutes an enforceable promise not to use statements he made against him if disclosure of those statements would, as a practical matter, reveal that Flemmi had been an informant. § III.1.D(2).

Therefore, Flemmi's statements that would identify him as an informant could not have properly been presented to the grand juries which indicted him. It is doubtful that any such statements were used in this fashion. However, further evidence will be required to resolve this question. Id.

In addition, in the absence of a defense of public authority, or any other defense requiring introduction by Flemmi of some of his communications with the FBI, his statements to its agents that would identify Flemmi as an informant would not be admissible at trial. However, if this case is tried and, as represented, Flemmi relies on some of his communications with the FBI, the court will, pursuant to Federal Rules of Evidence 106 and 611, permit the government to offer other statements of Flemmi to the Bureau in order to assure that the jury is presented with an appropriate record on which to decide fairly the merits of his defenses. Id.

Flemmi was expressly and implicitly promised that in return for his contributions to the bugging of 98 Prince Street nothing intercepted there would be used to prosecute him. This promise is enforceable. § III.1.D(3).

The Attorney General has the authority to investigate crime. As part of that power, he has the authority to utilize informants and to provide them promises of immunity informally, rather than conferring it by the process established by statute. Id.

The Attorney General's power to investigate violations of federal law has been generally delegated to the FBI. This authority inherently includes the power to develop and utilize informants. As a corollary of this, the Bureau has been delegated the power to promise informants both confidentiality and informal immunity. Id.

There is no statute, regulation, order, or other legal limitation that prohibits the FBI from promising a source that any information that he provides will not be used against him, directly or indirectly. When the Attorney General wished to restrict the power of prosecutors and investigators to promise cooperating witnesses entry into the Witness Protection Program, he issued a public order that expressly stated that they were not authorized to do so. That restriction has been enforced by the courts. The Guidelines developed by the Attorney General and incorporated in the FBI Manual do not constitute a comparable prohibition. The Guidelines are neither public documents nor legally enforceable. In addition, while they have at relevant times stated that the FBI "should not" promise its informants immunity, they did not provide that it could not do so. §§ II.6, III.1.D(3).

Moreover, the Attorney General has not directed that the FBI consult a prosecutor before promising an informant immunity. To do so would be inconsistent with the long recognized right and obligation the FBI has to maintain the secrecy of its sources.⁽¹³⁾ Id.

According to the testimony of the present and former members of the FBI, including its former Acting Deputy Director Potts and former SAC Greenleaf, the supervisor of an informant's handler was generally the FBI's chief decisionmaker regarding informants. The SACs generally relied completely on the informant's handler and his supervisor for making all decisions and recommendations regarding the informant, including those for which the SAC was responsible under the Guidelines. In Potts' experience, FBI Headquarters never reversed a recommendation from a field office that an individual be used, or continued, as an informant. Moreover, there is no evidence that FBI Headquarters ever inquired about what promises had been made to informants generally or to Flemmi particularly. §§ II.6, II.16, III.1.D(3).

In these circumstances, Morris and Connolly had implied, actual authority to promise Flemmi that if he assisted the FBI's effort to bug 98 Prince Street, nothing intercepted there would be used against him.⁽¹⁴⁾ Therefore, it was impermissible for the government to present evidence intercepted at 98 Prince Street, or any information derived from that evidence, to the grand juries that indicted Flemmi. Id.

Similarly, Flemmi had an enforceable agreement, implied in fact from the promise concerning 98 Prince Street and the conduct of the government, that there would be no direct or indirect use against him of the intercepted evidence that he helped the FBI obtain at Vanessa's and 34 Guild Street.⁽¹⁵⁾ Therefore, it was improper for the government to present evidence intercepted at 34 Guild Street to the grand juries which indicted Flemmi. It would also have been improper to provide to those grand juries any evidence derived indirectly from the interceptions at 34 Guild Street or Vanessa's. Id.

The conclusion that Flemmi had received enforceable promises of immunity concerning the electronic surveillance conducted at 98 Prince Street, Vanessa's, and 34 Guild Street is not qualified by the fact that the FBI may not have been aware of all of his criminal activity. The Bureau did not generally ask an informant about his own criminal activity and did not expect him to divulge the details of it. The FBI was not misled, however, with regard to the nature of Flemmi and Bulger's crimes, including the fact that they were likely murderers. Indeed, on three occasions Morris attempted to obtain the assistance of reluctant individuals by sending them the message that they would be in danger of being murdered by Bulger if they did not cooperate with the FBI.⁽¹⁶⁾ §§ II.4, II.16, II.33, III.1.D(3).

In addition, the fact that Morris accepted $7000 from Bulger and Flemmi does not render the immunity promised to Flemmi concerning the electronic surveillance conducted at 98 Prince Street, Vanessa's, and 34 Guild Street unenforceable as violative of public policy. An agreement to provide immunity in exchange for information does not inherently, or typically, involve a cooperative violation of the law. No payments were made to Morris before the initial promise concerning 98 Prince Street. Nor were any later payments directly related to the promises at issue. § III.1.D(3).

The court does not by any means suggest that the payments to Morris were proper or should be condoned. However, the FBI's bargain with Flemmi and Bulger was based on the very valuable assistance that they provided to the government. The payments that Bulger and Flemmi made to Morris were only incidental to a relationship that was important to the FBI for valid, professional reasons. Moreover, they were an expression of the sense of a friendship between the FBI and its sources which the Bureau deliberately created and cultivated. In the circumstances, it would be fundamentally unfair to deprive Flemmi of the immunity that he was legitimately promised, and on which he reasonably relied, because of the payments Morris initially sought and ultimately received. Id.

Accordingly, further hearings are necessary to determine if the indictment of Flemmi must be dismissed because it was impermissibly secured based upon the direct and possibly indirect use of information Flemmi provided pursuant to promises of immunity. In order to avert dismissal, the government will be required to prove that the information that it presented to the grand juries to obtain the indictments of Flemmi was not tainted by showing that the government had an independent, legitimate source for that evidence. If this burden is not borne, the case against Flemmi will have to be dismissed unless the government proves that its errors were harmless beyond a reasonable doubt. If the government is able to satisfy its heavy, but not necessarily insurmountable, burden of proving that the grand jury proceedings were not fatally infected, the court will have to decide if Due Process nevertheless requires dismissal in order to provide Flemmi fundamental fairness concerning the express and implied promises that he would not be prosecuted based on evidence intercepted at 98 Prince Street, Vanessa's, or 34 Guild Street, and also decide if Flemmi is entitled to dismissal as an exercise of the court's supervisory powers. § III.1.D(4).

In connection with the further hearings, it is likely, but not certain, that it will be necessary for the government to produce to the defendants and the court the transcripts of the grand jury proceedings that resulted in the indictments of Flemmi so that the effect of evidence improperly presented can be assessed. As indicated earlier, issues to be addressed in those hearings will not be limited to the influence of the direct use of the evidence intercepted at 98 Prince Street and 34 Guild Street. Questions of the possible indirect use of that evidence, and of the evidence intercepted at Vanessa's, will also have to be considered. Those questions include whether the monitored conversations produced investigative leads that generated evidence which was presented to the grand juries, and whether the testimony of FBI witnesses who read the informant files of Flemmi, and perhaps Bulger, was shaped by information that the FBI acquired as a result of a promise of immunity. The court may also be required to decide whether the present prosecutors, who have now been exposed to tainted evidence, may participate in the preparation and conduct of Flemmi's trial if the case against him is not dismissed. Id.

Flemmi has moved to suppress the evidence resulting from the 1984-85 electronic surveillance targeting him and Bulger. The facts relating to this motion are set forth in § II.17. Although the law is not clear as to the standard that should be applied in deciding Flemmi's motion to suppress, that uncertainty is not material. § III.2.B-D. Under either of the arguably applicable standards, Flemmi's motion is meritorious. § III.2.E.

Accordingly, although evidence intercepted as a result of 1984-85 electronic surveillance was not presented to the grand juries that indicted Flemmi, further proceedings are necessary to determine whether the case against him must be dismissed, in whole or in part, because evidence derived from that electronic surveillance was utilized to secure his indictment. Those proceedings will also permit the court to identify the evidence relating to the 1984-85 electronic surveillance which must be excluded if the case against Flemmi is tried. § III.2.F. The factual and legal basis for the resolution of the motion to suppress the 1984-85 electronic surveillance is summarized as follows.

In 1984 and 1985, the DEA and the FBI were authorized by a series of court orders to engage jointly in electronic surveillance targeting Bulger and Flemmi. The investigation was initiated by the DEA. The agents involved preferred not to collaborate with the FBI, primarily because they, and the Assistant United States Attorney working with them, believed that Flemmi and Bulger were FBI informants and that the Bureau would compromise the confidentiality of the investigation to protect its sources. The Bureau preferred not to participate because it viewed the endeavor as doomed to fail and expected that, as with the Lancaster Street Garage investigation, the FBI would be blamed. The two agencies became reluctant collaborators, however, when it was recognized that the FBI's participation was essential if judicial authorization to conduct electronic surveillance was to be sought and received because most of the information to be relied upon in the applications to establish probable cause involved gambling and loansharking -- crimes that the FBI rather than the DEA had the federal responsibility to investigate. §§ II.17, III.2.E.

The applications for the court orders authorizing the electronic surveillance of Bulger, Flemmi, Kaufman, and others not only relied heavily on the evidence cited to establish that there was probable cause to believe that they were committing offenses within the investigatory jurisdiction of the FBI. They also clearly conveyed the impression that the FBI would utilize any evidence obtained to attempt to develop prosecutable cases concerning matters within its jurisdiction. The Bureau, however, had no intention of doing so. The FBI was well aware, from information provided by Bulger, Flemmi, and others, that Bulger and Flemmi were engaged in illegal gambling, loansharking, and extortion. The FBI considered such criminal conduct to be essential to maintaining the credibility necessary for Bulger and Flemmi to continue to obtain and provide vital information on the LCN and others. The FBI was committed to honoring its promise of confidentiality to Flemmi and Bulger by not disclosing that they were sources, explicitly or implicitly. Explaining to the DEA, the prosecutors, or the court that the Bureau was not interested in obtaining or using any intercepted evidence of their criminal conduct would have effectively confirmed they were informants. Id.

Ring, who had primary responsibility for the matter at the FBI, felt that Flemmi and Bulger had no immunity and would be "on their own" if the DEA could develop a prosecutable narcotics case against them based on the electronic surveillance. Armed with information provided by colleagues, however, Connolly contributed to assuring that the DEA's efforts would not succeed by alerting Bulger and Flemmi to the investigation generally and to the electronic surveillance particularly. Id.

Blinded by its determination not to confirm for the United States Attorney's Office or the DEA the accuracy of their understanding that Bulger and Flemmi were FBI informants, the FBI recklessly disregarded the government's legal obligation of candor to the court when applying for authority to conduct electronic surveillance in what was represented to be a joint investigation. At the same time, believing that Bulger and Flemmi were FBI informants, but accepting that the FBI would not confirm or discuss their status, the DEA and the United States Attorney's Office recklessly disregarded their legal obligation to seek from the FBI information that, if shared with them, would have resulted in the applications for electronic surveillance now at issue not being filed, let alone approved by the court. The DEA and United States Attorney's Office also acted with reckless disregard for the truth when they filed applications for warrants that in effect represented that electronic surveillance was necessary to obtain evidence that the FBI would use in a Title 18 investigation of Bulger, Flemmi, and others because the prosecutor who was the applicant and the DEA agent who was the affiant did not believe that the FBI would attempt to do so. Rather, they understood that Bulger and Flemmi were FBI informants who the Bureau wished to protect rather than prosecute. Id.

As a result, the applications for the 1984-1985 electronic surveillance targeting Bulger and Flemmi failed to include the "full and complete statement" describing the necessity for electronic surveillance that was required by 18 U.S.C. § 2518(1)(c). More specifically, the applications should have included certain material facts about the targets, including the following. As informants Bulger and Flemmi had made statements about their illegal gambling and loansharking that the government now claims can be used as evidence against them. A review of their files would indicate to the FBI that they were tacitly authorized to engage in such activities. Therefore, the conduct which the government was seeking authority to utilize a wiretap to investigate may not have been criminal. In any event, the FBI did not intend to use any evidence generated by the electronic surveillance in an attempt to develop a prosecutable case against its sources or any of the other named targets, including Kaufman. Moreover, the FBI agent who was most knowledgeable believed that Bulger and Flemmi were not involved in narcotics crimes, but may have mistakenly given that impression while seeking information for the Bureau. No reasonable judge would have granted any request to target Bulger and Flemmi based on an application containing this information. Id.

In fact, if properly informed, the Assistant Attorney General would not have authorized the filing of the application for a warrant at all.⁽¹⁷⁾ The Department of Justice would not have allowed the submission to the court of an application that it knew was false and misleading. Nor would it have, over the FBI's inevitable objection, permitted disclosure to the court, and possibly to potential defendants, of the fact that Bulger and Flemmi were FBI informants. The testimony of DEA SAC Robert Stutman, among other things, indicates that if the DEA had been candidly consulted, it would have deferred to the FBI's interest in Bulger and Flemmi, and abandoned its investigation. Id.

If, however, an application had been filed seeking authority to intercept Bulger and Flemmi to obtain evidence of drug offenses only, the request concerning Bulger would have been obviously unmeritorious because there was no evidence to establish probable cause to believe that he would be intercepted discussing anything on Kaufman's telephone. In addition, the request concerning Flemmi would have been denied because there was not probable cause to believe that Flemmi would be discussing narcotics matters on Kaufman's telephone. Nor was there probable cause to believe that Kaufman would be discussing drug offenses with anyone.

In view of the foregoing, Flemmi's motion to suppress is meritorious regardless of whether it is decided pursuant the standard that the Supreme Court enunciated in United States v. Giordano, 416 U.S. 505, 515 (1974), for violations of central provisions of 18 U.S.C. § 2510 et seq. ("Title III"), or pursuant to the judicially crafted exclusionary rule for violations of the Fourth Amendment established in Franks v. Delaware, 438 U.S. 154 (1978). In Franks, the Supreme Court held that when constitutionally required probable cause is in question in a case not involving Title III, a defendant must make two showings to obtain suppression based upon possible government misconduct: first, that the information at issue was known by the government to be false or was presented with reckless disregard for its truth; and second, that the information was material to the decision to issue the warrant. 438 U.S. at 156; § III.2.C.

The Franks standard is easier for the government to meet than the standard applied by the Supreme Court in deciding the motion to suppress electronic surveillance evidence in Giordano. In Giordano, the Supreme Court held that:

Congress intended to require suppression where there is failure to satisfy any of those statutory requirements [of Title III] that directly and substantially implement the congressional intention to limit the use of intercept procedures to those situations clearly calling for the employment of this extraordinary investigative device.

416 U.S. at 527. Such provisions were characterized as "central" to the Title III statutory scheme. Id. at 528. Section 2518(1)(c) concerning the necessity of electronic surveillance is a central provision of Title III. §§ III.2.C and E.

If a central provision of Title III is ignored or otherwise violated, suppression must be ordered unless the government proves that the purpose which the particular procedure was designed to accomplish has been satisfied in spite of the error. Id. Thus, in Giordano, the Supreme Court in effect found legislative intent to require suppression without regard to the reason for the violation if certain statutory provisions of Title III not rooted in the requirements of the Fourth Amendment are not satisfied. In contrast, under Franks, even a material error would not justify suppression unless it is proven that the government filed the false or misleading application for a warrant intentionally or with reckless disregard for its truth. Id.

Since Franks was decided, the Court of Appeals for the First Circuit has on several occasions, without analysis or explanation, employed the Franks standard to decide motions to suppress electronic surveillance evidence alleging failures to meet either the probable cause or necessity requirements of Title III or its Massachusetts counterpart. However, at other times, the First Circuit has stated or indicated that the judicially crafted exclusionary rule does not apply in Title III cases. Some, but not all, other courts have utilized the Franks test to decide attacks on warrants for electronic surveillance, including the necessity requirements of § 2518(1)(c). Id.

In 1991, in United States v. Ferrara, 771 F. Supp. 1266, 1298-1319 (D. Mass. 1991), this court applied the Franks standard in denying the motion to suppress the tape-recording of the LCN induction ceremony that was intercepted at 34 Guild Street. This approach was predicated on the premise that the judicially crafted exclusionary rule is applicable to provisions of Title III that codify requirements of the Fourth Amendment and that § 2518(1)(c) is such a provision. § III.2.C.

This court continues to find that § 2518(1)(c) is constitutional in origin. § III.2.D. However, the court is now persuaded that the statutory exclusionary rule, as interpreted in Giordano and its progeny, rather than the Franks test should be applied when a central provision of Title III has been violated. § III.2.C. Nevertheless, the court has analyzed the motion to suppress the 1984-85 electronic surveillance under both the Franks and Giordano standards.

Suppression of the 1984-85 electronic surveillance is required under Franks because the government filed a series of materially false and misleading applications with at least reckless disregard for the truth. Suppression is also necessary pursuant to Giordano because § 2518(1)(c), a central provision of Title III, was violated and the purpose of that provision was not satisfied in spite of the violation. § III.2.E.

As described earlier, further proceedings will be necessary to decide the implications of the meritorious motion to suppress the 1984-85 electronic surveillance for Flemmi's motion to dismiss and, if the case is not dismissed, to determine the evidence that must be excluded at Flemmi's trial. § III.2.F.

Defendant Robert DeLuca was overheard and tape-recorded participating in the LCN induction ceremony conducted at 34 Guild Street on October 29, 1989. Prior to the Supreme Court's December 1, 1998 decision in Minnesota v. Carter, 525 U.S. 839, 119 S.Ct. 469 (1998), the government did not contend that DeLuca lacked standing to seek to suppress the evidence at 34 Guild Street. Thus, the evidentiary hearing was conducted on the premise that the court would have to decide the merits of DeLuca's motion to suppress that evidence.

The facts relating to the application for the warrant authorizing "roving" electronic surveillance which was used to bug 34 Guild Street were also relevant to the merits of Flemmi's motion to dismiss. As indicated earlier, Flemmi was one of the four sources relied upon in that application. In addition, the manner in which Ring and Connolly dealt with Mercurio concerning 34 Guild Street was sufficiently distinctive to be probative of Flemmi's claim that he was promised and provided protection as well.

The facts concerning the electronic surveillance of 34 Guild Street are summarized as follows. When Mercurio became an informant, with his consent, the FBI and the Department of Justice successfully sought to have his parole terminated early in part to permit him to be released on bail when he was indicted with other members of Russo faction of the LCN. § II.29.

In the summer of 1989, Connolly and Ring learned from Mercurio and others that there would soon be an LCN induction ceremony. The FBI was very interested in intercepting that ceremony. Ring and Connolly expected that Mercurio would be vital to any effort to do so. §§ II.29, II.30, II.31.

At about the same time, reliable informants advised the FBI that Mercurio had set Salemme up to be shot. Under the Attorney General's Guidelines, this information should either have been provided by the Boston office of the FBI to state and local law enforcement officials, or have been submitted to officials at FBI Headquarters and to the Assistant Attorney General. If the Guidelines had been followed, the Assistant Attorney General would have had the responsibility of deciding whether Mercurio would be continued as a Top Echelon informant or closed and subject to investigation and prosecution. The Guidelines, however, were ignored and neither disclosure nor consultation occurred. Id.

In the fall of 1989, Mercurio was providing increasingly specific information concerning the forthcoming LCN induction ceremony. The FBI recognized that intercepting such a ceremony for the first time would be of immense value in future prosecutions and Congressional hearings. Ring very much wanted to obtain a warrant to bug that ceremony, but not at the risk of revealing Mercurio's status as an informant -- a risk that would have been created if the application for the warrant had mentioned either the ceremony or its location because so few members of the LCN would have had access to that information. § II.30.

To resolve this dilemma, Ring wished to seek a warrant to conduct roving electronic surveillance of oral communications at multiple, unidentified locations. Title III requires that to obtain a warrant for a roving bug the government must submit to the court "a full and complete statement as to why [it] is not practical to specify the place to be bugged." 18 U.S.C. § 2518(11)(a)(ii). If it is shown that it is impractical to specify where the roving authority will be employed, the place or places to be bugged need not be described in the application or the warrant. Id.

Ring engaged Strike Force Chief Diane Kottmyer, who knew that Mercurio was an informant because of the Strike Force's role in having his parole terminated early, and agent Walter Steffens, Jr. to prepare the necessary application and supporting affidavit. However, Ring consistently withheld from them certain information that he and Connolly were receiving from Mercurio. That information that would have provided Kottmyer and Steffens clear notice that it was false and misleading for the government to represent on the evening of October 27, 1989, that a warrant for a roving bug was necessary because it was impractical to specify the location to be bugged. In addition, Ring did not tell Kottmyer and Steffens that, contrary to the claim in the documents they were drafting, the FBI did not intend to utilize the warrant that it was seeking more than once. Id.

Because Ring and others were not candid with Kottmyer and Steffens, on October 27, 1989, a false and misleading application and affidavit were submitted in a successful effort to obtain a warrant for a roving bug. That warrant was used to intercept the LCN induction ceremony at 34 Guild Street on October 29, 1989. Id.

If an honest and accurate application had been filed, it would have revealed the following. At all times prior to October 29, 1989, the FBI, personified by Ring, knew that there would be at least one informant, Mercurio, at the ceremony. The FBI sought a warrant for a roving bug that could be used at multiple, unidentified locations, rather than authorization to bug 34 Guild Street alone, in order to protect the identity of its sources. The FBI had no intention of using that warrant to intercept conversations more than once. Rather, at the time the application was drafted the FBI intended to arrest the participants immediately after the ceremony. The FBI had substantial, corroborated, "rock solid" information that the ceremony would be held at 34 Guild Street several hours before Kottmyer and Steffens met with the judge to obtain the warrant authorizing roving surveillance based upon the representation that it was then "impractical" to identify the location to be bugged. Id.

The FBI made no effort to obtain the testimony of Mercurio about the induction ceremony. Nor did the FBI ask him to record the ceremony, which would have obviated the need for a court ordered bug. The FBI did not try to persuade Mercurio to cooperate in this fashion by threatening him with possible prosecution for his role in the Salemme shooting, as well as the Sagansky-Weinstein extortion and other criminal activity intercepted at Vanessa's. Instead, Ring and Connolly confirmed Mercurio's understanding that the Mafia induction ceremony had been bugged. In addition, they caused him to understand that his indictment was imminent and permitted him to flee, as they expected he would. Id.

As a result, the FBI was relieved of the recognized risk that the prosecution of Russo, Ferrara, Carrozza, and their codefendants would be jeopardized by the issues that would have been presented as a result of Mercurio's dual status as a codefendant and an FBI source concerning the induction ceremony, among other things. Mercurio's flight also masked for many years the violation of the Attorney General's Guidelines committed by Ring and his colleagues when they unilaterally decided to continue Mercurio as an informant despite what they believed to be his involvement in the Salemme shooting. Id.

The foregoing facts would present serious questions for the court to resolve if DeLuca had standing to litigate his motion to suppress the electronic surveillance conducted at 34 Guild Street. Among other things, it might make a difference whether Franks or Giordano establishes the applicable standard for deciding that motion. However, following the December 1, 1998 decision in Carter, the government argued for the first time that DeLuca lacks the standing necessary to maintain his motion to suppress. Upon careful consideration of the parties' supplemental submissions and oral arguments on this novel issue, the court finds that the government's position is correct. § III.4.

In essence, Carter indicates that the bugging of the LCN induction ceremony did not violate DeLuca's Fourth Amendment rights because as a visitor to 34 Guild Street, who did not stay over night, and who engaged in only business discussions, he did not have an expectation of privacy that society would today deem to be justified. In addition, although the matter is not perfectly clear, the court finds that when Title III was enacted it was intended that evolving, contemporary conceptions of reasonable expectations of privacy be applied in deciding whether an intercepted conversation constitutes an "oral communication" as defined in 18 U.S.C. § 2510(2). In view of the decision in Carter, the court is compelled to find that DeLuca did not at 34 Guild Street have a justified expectation that he would not be intercepted and, therefore, did not engage in what the statute defines as an "oral communication." Thus, DeLuca is not an "aggrieved person" as defined in § 2510(11). Accordingly, he does not have standing, under § 2518(10)(a), to seek suppression for an alleged violation of Title III concerning the electronic surveillance conducted at 34 Guild Street. Therefore, his motion to suppress must be denied.

As DeLuca's motion to suppress is being denied for lack of standing, it is not necessary for the court to address the merits of the issues he has sought to litigate. If this court's decision concerning standing is appealed and reversed, the Court of Appeals for the First Circuit, or the Supreme Court, may in the process also clarify whether the standards of Franks or Giordano should be employed in deciding DeLuca's motion to suppress. Therefore, it is most appropriate for this court to decline to analyze the merits of DeLuca's motion at this time. The court will issue the additional necessary findings of fact and conclusions of law if its decision concerning DeLuca's lack of standing is reviewed and this case is remanded.

In view of the foregoing, Flemmi's motion to dismiss based on a purported promise of immunity from prosecution is being denied. DeLuca's motion to suppress the electronic surveillance conducted at 34 Guild Street is also being denied.

Flemmi's motion to suppress the 1984-85 electronic surveillance is meritorious. He was also properly promised that if he assisted the FBI none of the evidence intercepted at 98 Prince Street, Vanessa's, or 34 Guild Street would be used against him, directly or indirectly. At least with regard to 98 Prince Street and 34 Guild Street, that agreement was violated.

Further proceedings are required to determine the remedies to which Flemmi is entitled as a result of his meritorious motions, including whether dismissal of the case against him is required. These proceedings will be conducted before the court enters any Order that may be appealable by the United States pursuant to 18 U.S.C. §§ 2510(10)(b) or 3731.

This case has been pending for almost five years. The defendants' motions to dismiss and to suppress have been the subject of intensive litigation for more than two years. Nevertheless, the merits of Flemmi's motion to dismiss cannot yet be decided. Thus, the present posture of this case may be disappointing to the parties and to the public, as it is, frankly, to the court. However, it should be recognized how this case has come to this point and the spirit in which it will proceed if it must be litigated to a conclusion.

Often the investigation of crime must be secret in order to be effective. This is particularly true when that investigation targets a dangerous and highly secretive organization like the LCN.

Informants are valuable, if not vital, assets in combatting serious crime. The government's ability to promise an informant confidentiality is often important to securing his cooperation and protecting his safety. In recognition of this, the FBI has historically been permitted to operate its sources in secret, even from officials of the Department of Justice.

However, as Attorney General Harlan Fiske Stone, who later became the Chief Justice of the United States, warned in 1924, when he established the FBI:

There is always the possibility that a secret police may become a menace to free government and free institutions because it carries with it the possibility of abuses of power which are not always quickly apprehended or understood.⁽¹⁸⁾

In the mid-1970's, it was discovered that such abuses by the FBI had occurred over many years. They included FBI efforts to "neutralize" Dr. Martin Luther King as an effective civil rights leader and "'dangerous and degrading tactics'" to disrupt lawful political activity of American citizens.⁽¹⁹⁾

As information about these abuses began to emerge, FBI Director Clarence Kelly realized that even he had been deceived by subordinates seeking to cover-up misconduct. "Admitting [in 1976] that some FBI activities had been 'clearly wrong and quite indefensible,' he declared that the Bureau should never again occupy the 'unique position that permitted improper activity without accountability.'"⁽²⁰⁾

Anticipating the wisdom of this observation, in 1975, Attorney General Edward H. Levi began the development of Guidelines for the FBI's use of informants, among other things. As indicated earlier, those Guidelines did not limit the FBI's authority to promise informants immunity informally and unilaterally. The Guidelines did, however, direct that the FBI not take any action to conceal a crime by one of its informants. If the FBI learned that one of its informants had committed a serious crime and did not wish to disclose that information to the appropriate law enforcement officials, the Bureau was directed to inform the Department of Justice. It was intended that the Department would then decide whether exceptional circumstances justified continuing the informant as a source or whether he should instead be closed and subject to investigation and prosecution. § II.6.

The evidence in this case indicates that the Attorney General's Guidelines were routinely ignored with regard to Top Echelon informants generally. As the government acknowledges, it is clear that they were regularly disregarded concerning Flemmi and Bulger. § II.6.

While the Department of Justice has historically respected the right of the FBI to maintain the secrecy of its sources from other agencies and federal prosecutors, courts have recognized their duty to compel disclosure of an informant's identity when it has been demonstrated that such information is relevant or helpful to the defense of an accused or essential to the fair determination of a case.⁽²¹⁾ In 1997, this court found that the defendants in the instant case had proved that they were entitled to know whether Bulger, Mercurio, and Donati were informants.⁽²²⁾ The court continues to believe that this conclusion was correct.

That decision, however, opened the proverbial "Pandora's Box." As a result, many serious issues emerged. In order to decide them, the court has made an earnest effort to find the true facts and to apply the law to those facts without fear or favor.⁽²³⁾

In 1940, Attorney General, and future Supreme Court Justice, Robert Jackson urged federal prosecutors, and by implication federal investigators, to "seek[] truth and not victims."⁽²⁴⁾ This, however, is a challenging task for those charged with investigating and prosecuting dangerous criminals who, by definition, do not themselves "play fair." Thus, in our democracy, we do not rely solely on the self-restraint of federal prosecutors and investigators to assure that crime is investigated lawfully.

Instead, we ultimately rely on judges, who take an oath to be impartial, to decide whether the government has violated the law and, if so, to determine whether a defendant's rights have been so irreparably injured that he is entitled to a remedy that may be as drastic as the dismissal of the case against him. Courts are not invested with this power and responsibility because we are a nation that is solicitous of criminals. Rather, this duty has been delegated by the people to the courts because we recognize that, as Justice Felix Frankfurter wrote, "[i]t is a fair summary of history

to say that the safeguards of liberty have frequently been forged in controversies involving not very nice people."⁽²⁵⁾

We live in a nation which, above all, seeks justice. As reflected in the words of Louis D. Brandeis that are engraved in the entrance of the United States Courthouse in Boston, we believe that, "Justice is but Truth in Action."⁽²⁶⁾ This court will continue to strive to assure that this case is conducted with fidelity to this principle.

Forty-six witnesses testified over eighty days in the hearings on the motions to suppress and dismiss now being addressed. The court also received 276 exhibits and several stipulations. The evidence presented placed certain facts in question. The testimony of different witnesses conflicted on various points. In addition, the import of many documents, and the implications of the absence of records, was also often disputed. Thus, the court has been required to determine the credibility of many witnesses and much other evidence.

In doing so, the court has performed as juries are generally instructed with regard to determining credibility and finding the facts. See, e.g., First Circuit Pattern Jury Instructions - Criminal §§ 1.05, 1.06 (West 1998). The court has considered both the direct and circumstantial evidence. Id. § 1.05. In view of the substantial evidence that members of the FBI engaged in improper, if not illegal, conduct and thus had a motive to tailor, by omission or distortion, the written records that they reasonably expected would never be seen by others with the knowledge necessary to dispute their accuracy or completeness, at times circumstantial evidence has been particularly important in resolving issues of credibility and in finding the facts.

In judging the believability of witnesses, the court has applied the conventional criteria. Id. § 1.06. These include, importantly, the manner of the witness while testifying; whether the witness had a bias, prejudice, or other motive to lie; the consistency of the witness's testimony with his or her prior statements and other evidence; and the reasonableness of the witness's testimony when considered in the light of the credible other evidence. Id.

The court has also recognized that witnesses at times testify honestly and accurately about some matters, but not all matters. Id. Thus, in certain instances, the court has credited some but not all of a witness's testimony. For example, the court is persuaded that Flemmi testified truthfully in claiming that he was regularly tipped-off by the FBI regarding investigations and impending indictments. He was not, however, always candid in identifying the source of the information he received. Rather, he at times attributed information received from Connolly to other agents of the FBI in an evident effort to protect Connolly and to strengthen his own claim to an enforceable promise of immunity from prosecution.

Applying the foregoing principles, the court finds the following facts have been proven by a preponderance of the credible evidence.⁽²⁹⁾

In the early 1960's, Flemmi began exchanging information with the FBI. Ex. 31, ¶ 3. In November 1965, FBI Special Agent H. Paul Rico targeted Flemmi for development as a Top Echelon informant -- the highest status a source can achieve in the FBI. Ex. 20. At that time, a Top Echelon informant was defined as an individual who "could provide a continuous flow of quality criminal intelligence information regarding the leaders of organized crime." Jan. 9, 1998 Tr. at 39 (Under Seal).

In 1965, Flemmi was involved in a major gang war among several criminal groups in Boston. Various of the warring factions were led by Flemmi, Howard Winter, Thomas Callahan, and Joseph Barboza. Ex. 20. The gang war had already resulted in several murders. Ex. 20; Flemmi Aug. 25, 1998 Tr. at 26. Flemmi understood that he was in danger of being killed. Id.; Flemmi Aug. 25, 1998 Tr. at 26-28.

Flemmi is Italian-American. In the 1960's he had an ambivalent relationship with the LCN, at different times viewing its members as enemies and allies. Ex. 21. Flemmi's association with the LCN was initially linked to his long partnership with Francis Salemme, who was, evidently, unequivocal in his enthusiasm for the LCN. Flemmi and Salemme were particularly close to Ilario Zaninno, also known as Larry Baione, a Boston member of the Patriarca Family of the LCN. Id.

In November 1965, Flemmi provided Rico with valuable information about the possibility that Baione would become actively involved in the ongoing gang war, as well as intelligence about past and potential murders. Ex. 20. In Rico's view, if Flemmi survived the gang war, he would become "a very influential individual in the Boston criminal element" and "be in a position to furnish information on LCN members in [the Boston] area." Ex. 20. For the next twenty-five years, the FBI provided considerable assistance to Flemmi which helped make both of these predictions prophetic.

Since the mid-1960's, the development of Top Echelon informants has been a very high priority for the FBI. The successful development of informants generally, and therefore Top Echelon Informants particularly, has also been regarded as an important achievement for an FBI agent, with the potential to affect significantly the progress of that agent's career. Morris Apr. 29, 1998 Tr. at 44-45 See also Ex. 274 (Under Seal), FBI Manual of Instructions (hereinafter "Manual") § 137-2(3) (4-2-79). Thus, agents have been ambitious to develop Top Echelon informants.

The urgency and importance of developing Top Echelon informants in the mid-1960's was particularly pronounced because of the then recent metamorphosis of the FBI's attitude toward Organized Crime during Robert Kennedy's tenure as Attorney General, from 1961 to 1964. More specifically:

When Kennedy arrived, [FBI Director J. Edgar] Hoover did not believe there was such a thing as a national crime syndicate. In 1962 he stated that "no single individual or coalition of racketeers dominates organized crime across the nation." When Kennedy left, Hoover was taking credit for the discovery of La Cosa Nostra. In September of 1963, he wrote in the FBI's Law Enforcement Bulletin that the sensational [Joseph] Valachi disclosures [concerning the LCN] merely "corroborated and embellished the facts developed by the FBI as early as 1961 which disclosed the makeup of the gangland hordes." "At first it was like pulling teeth to get the Bureau to enter these areas," recall[ed] a Kennedy assistant, "but by 1963 all that had changed."

Rico was an agent who enthusiastically embraced the FBI's new crusade against the LCN. As part of his effort to make Flemmi an asset in that campaign, Rico made Flemmi a clear and customary promise. Rico promised that he would not tell anyone outside the FBI that Flemmi was an informant, and would only disclose that fact to those within the FBI who Rico felt had a need to know it. Rico Jan. 14, 1998 Tr. at 155-59. Rico made this promise to all of his informants. Id. at 158-59. To Rico, this promise was "sacred." Id. at 156. The promise was to him the "heart" of the agreement between the FBI and its informants. Id. at 63-64. Rico's view that an individual's status as an informant should virtually never be disclosed to anyone outside the FBI was, and remains, a sacred article of faith within the FBI. See, e.g., Morris Apr. 24, 1998 Tr. at 130; Gianturco Jan. 20, 1998 Tr. at 131; Darcy Sept. 28, 1998 Tr. at 24.

To Rico, the promise of confidentiality meant, among other things, that information provided by an informant would not be used against him, at least directly, because to do so would necessarily disclose that the individual had been cooperating with the FBI. Rico Jan. 14, 1998 Tr. at 157-58. In fact, Rico understood that, as a matter of law, such statements could not be used against Flemmi or any other informant because no Miranda warnings had preceded them. Rico Jan. 13, 1998 Tr. at 126.

Rico consistently honored his promise of confidentiality to Flemmi, among others. Information from informants is recorded on an FBI Form 209 (a "209"). Ex. 274 (Under Seal), Manual § 108(F)(5) (2-15-65); Ring June 15, 1998 Tr. at 59-60. Rico never disclosed information provided by an informant, or any of a source's 209s, to a prosecutor, either to prompt an investigation of the informant or to strengthen a prosecution of him. Rico Jan. 14, 1998 Tr. at 158. For example, when Flemmi told him that he had badly beaten Peter Fiumara in connection with an illegal debt, Rico did not share this information with any prosecutor, agent, or agency that might have investigated Flemmi. Rico Jan. 13, 1998 Tr. at 21-22. As a result of this practice, even after Flemmi was charged with the attempted murder of John Fitzgerald, Rico did not give the prosecutor, his good friend District Attorney John Droney, the statements Flemmi had made to Rico relating to that matter. As far as Rico was concerned, the promise of confidentiality made to Flemmi or any other informant would endure even if Rico learned that the informant had broken the law. Rico Jan. 14, 1998 Tr. at 159.

While FBI agents have long routinely promised sources confidentiality, Rico did not rely on this assurance alone to cultivate informants. Rico characterized his approach to developing informants as "unique." Rico Jan. 13, 1998 Tr. at 119-20. This case demonstrates that while his methods were unorthodox, they were not singular. In any event, as Rico testified, he "did not always conform 100%" to what the FBI policies and procedures required. Rico Jan. 14, 1998 Tr. at 143.

Using his personal style, Rico sought to realize Flemmi's potential as a source by not treating him like a criminal who should be used with caution to obtain valuable information. Rather, Rico created a sense that he and Flemmi were allies in a common cause, primarily a war against the LCN. This is a sense that Rico's successors as Flemmi's "handlers" successfully sought to perpetuate and strengthen. Morris Apr. 22, 1998 Tr. at 15. Significantly, by word and deed, and with increasing clarity over time, Rico promised Flemmi more than confidentiality. Flemmi Aug. 20, 1998 Tr. at 22-26, Aug. 25, 1998 Tr. at 22-23, Aug. 24, 1998 Tr. at 88-89, 140-43. Rico promised Flemmi "protection," id., and he honored that promise. Flemmi was receptive to the alliance with the FBI that Rico proposed. The arrangement offered him an opportunity to use the FBI to disable his enemies, enhance his safety, and, with the competition diminished and the protection of the FBI, make his own criminal activities more profitable. Flemmi Aug. 25, 1998 Tr. at 25-34.

From 1965 to 1967, Rico found his relationship with Flemmi to be productive. In that period Flemmi provided information which Rico regarded as reliable and valuable. Rico Jan. 13, 1998 Tr. at 58; Exs. 214, 215, 222, 245. For example, Flemmi reported that Stevie Hughes "had been marked for a hit." Exs. 26, 218, 222. Soon after, Hughes was murdered. Ex. 26.

More importantly, Flemmi proved to be able to give Rico what he most wanted -- reliable information concerning the leaders of the LCN in New England. Flemmi regularly gave Rico information regarding Raymond L.S. Patriarca, the Boss of the New England Family of the LCN, and Baione. See, e.g., Exs. 245, 214. Flemmi reported, among other things, that Edward "Wimpy" Bennett had told Patriarca that he would remain neutral in a violent feud between the Patriarca Family and Barboza's crew. Ex. 245. As reflected in a 209 rated "Excellent" by Rico, on February 2, 1967, Flemmi reported on a meeting that he had with Baione at which they agreed to settle any disagreements they might have peacefully, and at which Baione made statements indicating that Baione was responsible for the recent murder of Wimpy Bennett. Ex. 214. Beginning with the Third Superceding Indictment (the "3SI") in this case, Flemmi and Salemme have been charged with murdering Wimpy Bennett as part of their alleged pattern of racketeering activity. See 3SI, Racketeering Act ("RA") 21.⁽³⁰⁾

Flemmi's report that Baione made statements indicating that he was responsible for Wimpy Bennett's murder may be an early instance of a pattern of false statements placed in Flemmi's informant file to divert attention from his crimes and/or FBI misconduct. For example, as discussed in § II.14, infra, in 1982, Morris caused Connolly to tell Flemmi and Bulger that Brian Halloran was providing the FBI information that implicated them in the murder of Roger Wheeler. Halloran was murdered soon after. Morris believed Bulger and Flemmi were responsible. When Halloran was murdered, Connolly prepared a 209 stating that Flemmi had reported that "the wise guys in Charlestown" had heard that Halloran was cooperating with the Massachusetts State Police and, therefore, had a motive to murder him. Ex. 225. Similarly, shortly before John Callahan, another associate of Bulger and Flemmi implicated in the Wheeler investigation, was murdered in Miami in 1983, Connolly prepared a 209 stating that Flemmi had reported that Callahan was trying to avoid a "very bad" Cuban group. Ex. 226. As explained infra, Flemmi and Bulger remain suspects in the still open Wheeler, Halloran, and Callahan murder investigations.

In any event, on February 8, 1967, six days after Flemmi provided information indicating that Baione was responsible for Bennett's death, Rico designated Flemmi a Top Echelon informant. Ex. 21. In doing so, Rico vouched for Flemmi's reliability, stating that:

Informant has furnished information that has proven through investigation or through other sources to be true, and there is no information provided by the informant that has proven to be false.

Through informants of this office, it has been established that this individual enjoys a reputation of being a very capable individual and that he will now be the leader of the group formerly headed by Edward "Wimpy" Bennett, who according to informants, had been murdered and buried around 1/19/67.

Informant also has been engaged in bookmaking, shylocking, robberies, and is suspect of possibly being involved in gangland slayings.

The record does not reflect what information Rico had from other sources about Flemmi's possible participation in murders. Flemmi would have been circumspect about reporting on his own involvement in murder. Moreover, Rico had an incentive not to document accurately or completely information about Flemmi's possible involvement in serious crimes because he might lose the authority to utilize Flemmi as an informant if Rico's superiors decided that Flemmi deserved to be targeted for possible prosecution rather than employed as a source. However, a glimpse of Rico's reason at least to suspect that Flemmi was involved in murder can be gleaned from the records of Flemmi's own statements. For example, as Rico wrote to the Director of the FBI:

[Flemmi] advised on 6/1/66 that Cornelius Hughes, who was murdered on 5/25/66 in Revere, Mass, had previously been around Dearborn Square, Roxbury, Mass, obviously in an effort to try to set him [Flemmi] up for a "hit" and that the fact that Connie is now deceased is not displeasing to him.

Informant was asked if he had any idea of who committed the murder, and he advised that "he had an excellent idea who committed the murder" but it would be better if he did not say anything about the murder.

In any event, suspicions that Flemmi was a murderer did not deter Rico and the FBI from making him a Top Echelon informant and an ally in pursuing their highest priority, the LCN.⁽³¹⁾ As Rico explained it:

Efforts have been made to develop this informant, by the writer, since 11/3/65. The informant was originally furnishing information on LCN members whom he considered as his enemies. Since the death of Edward "Wimpy" Bennett, Raymond Patriarca has indicated friendship towards this informant, and Larry Baione has met with the informant as he has now been accepted as an ally of theirs.

In view of the informant's excellent reputation and his present friendship with the hierarchy of the LCN in this area, he eventually could be brought in as a member of this organization.

Thus, viewed as a potential member of the LCN, Flemmi became a Top Echelon informant. Rico was his "handler." Rico's partner, Dennis Condon, was designated Flemmi's alternate agent -- the person Flemmi was to contact if he could not reach Rico. Ex. 220; Condon May 5, 1998 Tr. at 31. Flemmi, however, was never told that he was either open or closed administratively as an informant in the files of the FBI. Flemmi Aug. 20, 1998 Tr. at 32-33; Morris Apr. 28, 1998 Tr. at 23, Apr. 30, 1998 Tr. at 72; Quinn Aug. 19, 1998 Tr. at 112-13. Nor did Flemmi know that the FBI was documenting some of the information that he was providing. Flemmi Aug. 27, 1998 Tr. at 56; Morris Apr. 21, 1998 Tr. at 34.

Flemmi quickly validated his perceived potential to provide valuable information concerning the highest levels of the LCN. Within weeks of becoming a Top Echelon informant, he reported on a recent meeting that he and Salemme had with Patriarca in which Patriarca indicated an interest in making Flemmi a member of the LCN. Ex. 215.

For the next two years, Flemmi provided Rico with a steady flow of information concerning the hierarchy of the LCN in which Rico was very interested. Rico Jan. 13, 1998 Tr. at 70. Flemmi's information included, among other things, reports concerning Patriarca, Baione, Gennaro Angiulo, a leader of the LCN in Boston, and Salemme, which Rico regularly rated either very good or excellent. Id. at 67-70. See also Exs. 23, 24, 217, 219, 221. Flemmi also provided Rico with other valuable information, including intelligence on a threat to the life of the Middlesex County District Attorney Garrett Byrne. Rico Jan. 14, 1998 Tr. at 68; Ex. 27.

In addition, Flemmi was able to provide Rico with certain information and assistance that Rico especially prized. In 1966 and 1967, Rico and Condon were actively attempting to persuade Barboza to become a government witness in connection with an investigation they were conducting, with state officials, of the 1965 murder of Teddy Deegan and other matters. Rico Jan. 9, 1998 Tr. at 72, Jan. 13, 1998 Tr. at 80. They then properly perceived that Barboza had the potential to provide powerful testimony against leading members of the LCN. Rico Jan. 9, 1998 Tr. at 72-73. Rico and Condon were seeking information to use to persuade Barboza to become a witness. Rico Jan. 10, 1998 Tr. at 80. Flemmi provided Rico with such information and through his unwitting brother, Jimmy Flemmi, also provided a valuable means for Rico to communicate information to Barboza that he hoped would cause Barboza to be receptive to Rico's effort to recruit him. Id. at 79-83. For example, Flemmi told Rico about Patriarca's plans to kill some of Barboza's associates and used his brother to convey that information to Barboza. Ex. 245. Thus, Flemmi materially assisted the FBI's successful effort to develop Barboza as a witness. Id.

After Barboza agreed to become a government witness, Flemmi's links to the LCN became even more valuable to Rico. Flemmi reported that Patriarca and his colleagues realized that Barboza had become a "rat." Ex. 237 (209 dated 6/27/67). Flemmi reported that Patriarca had embarked on an aggressive effort to determine what Barboza was telling the government and was seeking to diminish the effectiveness of Barboza's anticipated testimony, in part by murdering potential witnesses who might corroborate Barboza's claims and killing Barboza's lawyer, John Fitzgerald. Exs. 23, 34, 219, 221, 237 (209s dated 6/27/67, 7/19/67, 9/1/67, 11/13/67, 12/8/67, 9/20/68). In 1967 and 1968, Flemmi constantly provided information on these efforts to Rico. Id.; Rico Jan. 13, 1998 Tr. at 81-85. This information enhanced the FBI's ability to utilize Barboza effectively.

Barboza's cooperation proved to be extremely valuable to the government. Rico Jan. 13, 1998 Tr. at 81. It resulted in a successful federal prosecution of Patriarca. Id. It also contributed to the conviction of several Patriarca associates for the murder of Teddy Deegan. Id.

By 1969, Barboza was the most important witness Rico had ever developed. Rico Jan. 9, 1998 Tr. at 87. Indeed, Barboza became nationally renowned as a witness against the LCN. Thus, by 1969, Flemmi had, as an informant, made a special contribution to the progress of the FBI's highest priority -- combating the LCN. Rico, however, never tried to convert Flemmi into a cooperating witness who would testify for the government. Rico Jan. 13, 1998 Tr. at 71-72.

Rather, Rico continually encouraged Flemmi to maintain and increase his contacts with the LCN, and report back to Rico. Rico Jan. 14, 1998 Tr. at 110; Flemmi Aug. 20, 1998 Tr. at 22-24, Aug. 24, 1998 Tr. at 61, 87. Having designated Flemmi as a Top Echelon informant in 1967, it was particularly important to Rico that Flemmi produce with regard to the LCN.

At the same time, Flemmi became concerned that his increasingly visible involvement with the LCN would enhance the risk that he would be prosecuted as a result of investigations being conducted by the many law enforcement agencies that were beginning to focus on him as part of their pursuit of the LCN, including the Massachusetts State Police and the Organized Crime Unit of the Boston Police Department. Ex. 31, ¶¶ 3-4; Flemmi Aug. 20, 1998 Tr. at 22-24, Aug. 24, 1998 Tr. at 87. Flemmi expressed his concern to Rico. Id.

Rico told Flemmi that he should not worry. Ex. 31, ¶ 4; Flemmi Aug. 20, 1998 Tr. at 23, Aug. 24, 1998 Tr. at 61, 88. More specifically, Rico told Flemmi that as long as Flemmi was furnishing him information on the LCN, Flemmi would be "protected." Flemmi Aug. 24, 1998 Tr. at 61, 88-89, 140, Aug. 25, 1998 Tr. at 8, 21, 22-23, 35, 94; Ex. 92, ¶ 2. Rico never used the word "immunity" in speaking to Flemmi. Flemmi Aug. 25, 1998 Tr. 22-23. In addition to promising "protection," however, Rico said, in various ways, that Flemmi would not be prosecuted for crimes he was committing while serving as an informant. Ex. 31, ¶ 3; Flemmi Aug. 20, 1998 Tr. at 23-24, Aug. 24, 1998 Tr. at 61, 141.

Both Flemmi and Rico knew that Flemmi had to be engaged in criminal activity to have access to, and credibility with, the LCN. Flemmi Aug. 24, 1998 Tr. at 61. Rico told Flemmi that this would not be a problem for Flemmi. Flemmi Aug. 24, 1998 Tr. at 162. Rico caused Flemmi to understand that the FBI would overlook Flemmi's criminal activity as long as he was providing information on the LCN. Flemmi Aug. 25, 1998 Tr. at 27-28.

Flemmi understood that his deal with the FBI would not prevent other agencies from investigating him, but Rico assured Flemmi that he could take care of any issues that might arise. Flemmi Aug. 25, 1998 Tr. at 32-33, 38. Thus, Flemmi expected, for example, that Rico would intercede with District Attorneys John Droney and Garrett Byrne, who Rico characterized as good friends, to prevent any state charges from being brought against him. Flemmi Aug. 24, 1998 Tr. at 165-66, Aug. 25, 1998 Tr. at 32-33, 35-36, 38, Aug. 27, 1998 Tr. at 61-62.

Although never discussed with Rico, Flemmi assumed that there was some limit to the protection that Rico and the FBI could provide him and, therefore, did not think that his status as an informant would protect him from being prosecuted if he committed a murder. Flemmi Aug. 27, 1998 Tr. at 140, Aug. 25, 1998 Tr. at 11-12, 21-24, 19. Rico led Flemmi to believe, however, that as long as Flemmi did not kill anyone, the FBI would protect him from prosecution for his criminal activity because of the valuable information Flemmi was providing on the LCN. Flemmi Aug. 25, 1998 Tr. 21-25.

Nevertheless, Flemmi became especially anxious in 1969, when he learned the IRS was investigating him as part of its intensified focus on the LCN. Exs. 25, 31; Flemmi, Aug. 20, 1998 Tr. at 24, Aug. 24, 1998 Tr. at 156-57. Flemmi discussed this problem with Rico. Id. Rico reiterated that Flemmi should not be concerned, he would not be prosecuted. Id. After that discussion, the IRS investigation "fizzled out." Flemmi Aug. 24, 1998 Tr. at 157. Flemmi inferred that Rico had, as promised, taken care of it. Id.; Flemmi Aug. 20, 1998 Tr. at 24.

The government now contends that from 1967 to 1969, Flemmi repeatedly engaged in murder while simultaneously serving as a Top Echelon informant for the FBI. More specifically, it is alleged that in addition to other crimes, in 1967 Flemmi participated in the murders of Wimpy Bennett, his brothers Walter and William Bennett, and Richard Grasso. See Fourth Superceding Indictment ("4SI") Count One, RAs 20-24. Although Rico and his FBI colleagues often worked closely with state investigators and prosecutors in organized crime matters, there is no evidence that they contributed to any investigation of Flemmi regarding the murders of the Bennetts or Grasso.

The present indictment also alleges that Flemmi and Salemme attempted to murder Barboza's lawyer, John Fitzgerald. 4SI, Count One, RA 20. Fitzgerald was crippled, but not killed, by a bomb that exploded as he started his car on January 30, 1968. On January 4, 1968, Flemmi had told Rico that Patriarca was incensed with Fitzgerald, who Patriarca had thought would be helpful in his effort to discredit Barboza. Ex. 221. The next day, Fitzgerald was warned that his life was in danger, but he declined the protection offered by the Suffolk County District Attorney's Office. Id. On January 25, 1968, Flemmi told Rico that Fitzgerald was still definitely going to be "whacked out." Ex. 34. Several days later, Fitzgerald's car exploded.

The Middlesex County District Attorney took primary responsibility for investigating the Fitzgerald bombing. The record does not reflect the role, if any, of Rico and the FBI in that effort. In 1968, Flemmi learned that he and Salemme were being investigated as possible participants in the attempted murder of Fitzgerald. Flemmi Aug. 24, 1998 Tr. at 137; Exs. 237, 22. Flemmi did not then flee.

In September 1969, however, Flemmi received a telephone call from Rico. Ex. 30, ¶ 6; Flemmi Aug. 20, 1998 Tr. at 27, Aug. 24, 1998 Tr. at 136. Rico told Flemmi that "indictments were coming down" and suggested that Flemmi and "his friend," Salemme, "leave town" promptly. Id. Flemmi followed Rico's advice. Id. He and Salemme fled together. A few days later, on September 11, 1969, Flemmi and Salemme were indicted in Middlesex County for the Fitzgerald bombing and in Suffolk County for the William Bennett murder as well. Id. From Flemmi's perspective, Rico had honored his promise to protect him. Flemmi Aug. 24, 1998 Tr. at 137. In doing so, Rico aided and abetted the unlawful flight of a fugitive, in violation of 18 U.S.C. §§ 1073 and 2.

In view of Flemmi's motive to lie about whether Rico told him that Flemmi was about to be indicted and encouraged him to flee, the court has considered this contention with particular care. However, in the context of all of the credible evidence directly relating to Rico's relationship with Flemmi, Rico's denial of Flemmi's claim is not persuasive.⁽³²⁾

The court notes that if Flemmi had been prosecuted in 1969 for the Fitzgerald bombing or the William Bennett murder, his role as an FBI informant might have been disclosed, and its legal implications might have been examined, three decades ago. Flemmi's successful flight to avoid that prosecution spared Rico and the FBI the risk of the embarrassment and controversy that disclosure of Flemmi's dual status as an FBI informant and an alleged murderer has recently entailed. Rico had reason to be concerned about embarrassment to the FBI. He was not permitted to open any informant unless he represented to FBI Headquarters that he was "convinced that the potential informant [could] be operated without danger of embarrassment to the Bureau." Ex. 274 (Under Seal), Manual § 108 (9-13-63). By honoring his promise to protect Flemmi, Rico also promoted the possibility that Flemmi would in the future again become a valuable FBI informant.

The conclusion that Rico facilitated Flemmi's flight is reinforced by the fact that the instant case is not the first time that Rico has been found in a judicial proceeding to have engaged in criminal conduct, including perjury, with regard to one of his LCN informants. In Lerner v. Moran, 542 A.2d 1089 (R.I. 1988), Ex. 259, the Supreme Court of Rhode Island found, among other things, that Rico had urged one of his informants to lie under oath, in part to mask another of Rico's informant's role in a murder. Lerner, 542 A.2d at 1090. More specifically, the Rhode Island Court found that in the trial of Patriarca Family member Luigi Manocchio, Rico's informant, John Kelley:

admitted that during Lerner's trial [for murder], at the direction of Special Agent Rico, he testified falsely in certain matters relating to the factual circumstances surrounding the murders. For example, during Lerner's trial Kelley testified that he had personally "cut down" the shotgun used in the murders. However, during the Manocchio trial, Kelley stated that his armorer had actually "cut down" the shotgun. Kelley said that Special Agent Rico had directed him not to mention the armorer's role in the murders. It appears that the armorer was a valuable FBI informant that Special Agent Rico wanted to keep on the streets.

Id. (emphasis added). The Rhode Island Supreme Court credited this testimony by Kelley. Id. at 1090-91.

The Court found that Rico had also caused Kelley to lie about the promises that Rico had made to obtain his cooperation. Id. at 1091. In addition, it stated that, "Kelley's [perjurous] testimony [at the Lerner trial] was then corroborated in all material aspects by Special Agent Rico." Id. The Court also noted Kelley's explanation of why he had lied under oath: "Agent Rico told me . . . that I should just do as he said, and everything would come out all right." Id. Thus, although arrived at independently, this court's conclusion concerning Rico's misconduct in 1969 regarding Flemmi is consistent with the misconduct in which the Supreme Court of Rhode Island found that Rico had engaged concerning other informants in 1970.

In any event, on September 15, 1969, Flemmi was closed administratively as an informant of the FBI and a federal fugitive warrant was issued for his arrest for his unlawful flight to avoid prosecution. Ex. 28. Flemmi was not told, however, that he had been administratively closed as a source. Flemmi Aug. 20, 1998 Tr. at 32-33.

Although the FBI was conducting an investigation to find Flemmi and Salemme, Flemmi stayed in contact with Rico. Ex. 30, ¶ 7; Flemmi Aug. 20, 1998 Tr. at 27-32. In about March 1970, Flemmi called Rico. Id. Flemmi identified himself as "Jack from South Boston." Id. This was the code name that Flemmi and Rico had previously devised to identify each other. Id.; Rico Jan. 13, 1998 Tr. at 6-7.

Flemmi told Rico that he had relocated. Flemmi Aug. 20, 1998 Tr. at 28-29. Rico did not ask him where he was and Flemmi did not tell him. Id. Flemmi inquired about what was happening and asked how long Rico expected it would take to work out his problems. Id. Rico said it would take considerable time, and that Flemmi should be patient and stay away from Boston. Id. FBI policy requires that all contacts with informants be recorded. See, e.g., Ex. 274 (Under Seal), Manual § 108(F)(5) (2-15-65); Ring June 15, 1998 Tr. at 59-60. Rico, however, made no record of this conversation, or any other that he had with Flemmi while he was a fugitive. Nor did he tell the agents responsible for searching for Flemmi that he had spoken to him.

In April 1970, Rico was reassigned to the Miami, Florida office of the FBI. Rico Jan. 14, 1998 Tr. at 94. His partner, Condon, remained in Boston and participated in the fugitive investigation of Flemmi and Salemme. Ex. 260; Condon May 5, 1998 Tr. at 165-81. Condon had been Flemmi's alternate agent and knew that Flemmi had been an informant of Rico's. Condon May 5, 1998 Tr. at 168; Rico Jan. 14, 1998 Tr. at 176; Ex. 94.

The files of the FBI indicate that beginning in September 1969, Condon periodically asked at least one source if he had any information concerning the location of Flemmi and Salemme. Ex. 260. Usually, Condon's source(s) had no such information. Id. Beginning in November 1970, however, Condon received information that Flemmi and Salemme were in New York City, where they had been meeting with Manocchio, who was reportedly living in the vicinity of Central Park. Id. (209s of contacts on 11/23/70, 12/3/70, 12/23/70, 1/5/71). In October 1971, Condon was first advised that Flemmi and Salemme had separated. Id. (209 of 10/7/91). Eventually, these reports became more specific, indicating that Flemmi and Salemme had a falling out. Id. (209s of contacts on 2/10/72, 12/12 and 22/72). Reportedly, Flemmi "got sick of being ordered around by Salemme." Id. (209 of contacts on 10/9/73 and 10/26/73). Condon was told by one informant that if Flemmi and Salemme had serious problems with each other, Flemmi would be the "loser" because Salemme was closer to Baione. Id. (209 of contact on 2/10/72).

Although Condon was not in charge of the fugitive investigation, after receiving reports that Flemmi and Salemme had split up, he contacted a young FBI agent from South Boston who was working in New York, John Connolly, in an effort to "spark [them] up." Condon May 5, 1998 Tr. at 165. Connolly and Condon had been introduced by Edward Walsh, the Deputy Superintendent of the Boston Police Department, just as Connolly was joining the FBI. Id. at 163, 177-78. Although he was not working on the fugitive investigation, Connolly was receptive to Condon's call. Condon gave Connolly some general information and sent him several photographs. Condon May 5, 1998 Tr. at 165.

Connolly put the photographs to good use. In November 1972, Connolly arrested Salemme in New York City. Condon May 5, 1995 Tr. at 153. According to Condon, Connolly claimed that he was just "strolling down" the street at lunch time with several other agents, recognized Salemme, and arrested him. Id. at 171.

After Salemme's arrest, Condon continued to receive reports regarding the serious rift between Flemmi and Salemme. Ex. 260 (209 of contacts on 12/12 and 22/72, 1/18/73, 10/9 and 26/73). However, the recorded instances of Condon's efforts to get information about Flemmi's location diminished after Salemme's arrest. Ex. 260; Condon May 5, 1998 Tr. at 40-42.

Both Flemmi and Condon deny that Flemmi provided the FBI with information that led to Salemme's arrest. Flemmi Aug. 25, 1998 Tr. at 110; Condon May 5, 1998 Tr. at 172. In the context of all of the credible evidence in this case, it appears that this claim is not correct.

In any event, Salemme's arrest and subsequent prosecution for the Fitzgerald bombing proved to be beneficial to Flemmi. In 1970, Hugh Shields, a codefendant in the Bennett murder case, had been tried and acquitted. Ex. 253; Condon May 5, 1998 Tr. at 47. In 1973, Salemme was tried on the Fitzgerald bombing charge. Robert Daddieco, who was being protected by the government, was an important witness. May 1, 1998 Tr. at 67 (Stipulation). Daddeico testified that Salemme had participated in the Fitzgerald bombing. Daddeico claimed, however, that he had lied previously when he had said that Flemmi was also involved. Ex. 260. Salemme was convicted and, as a result, spent the next fifteen years in prison.

Flemmi monitored Salemme's trial from Canada. Ex. 260; Flemmi Aug. 25, 1998 Tr. at 80-81. He did not, however, return to Boston in 1973, when Daddieco exculpated him with regard to the Fitzgerald bombing.

Flemmi did stay in touch with Rico. Ex. 30, ¶ 7; Ex. 31, ¶ 7; Flemmi Aug. 20, 1998 Tr. at 29-30. In 1974, Flemmi called Rico at the Miami office of the FBI. Flemmi Aug. 20, 1998 Tr. at 29-30. Rico told Flemmi that he should return to Boston and his legal problems would be favorably resolved. Ex. 31, ¶ 7; Flemmi Aug. 20, 1998 Tr. at 31-32. Because of the seriousness of the charges against him, and the fact that Flemmi was living comfortably in Canada, Flemmi had some reservations about following Rico's advice. Id. Rico, however, assured Flemmi that when he returned he would be released on bail and all of the charges against him would be dismissed. Id. Once again, Rico's representations to Flemmi proved to be reliable.

As arranged by Rico, on May 6, 1974, Flemmi returned to Boston and met in Park Square two Boston Police Detectives, at least one of whom had worked with Condon. Id.; Condon May 5, 1998 Tr. at 145. Despite the fact that he had for five years been a fugitive from charges of murder and attempted murder, Flemmi was promptly released on bail by the Middlesex and Suffolk Superior Courts. Id. The federal flight charges were dismissed on the same day. Ex. 96. The Fitzgerald bombing charges against Flemmi were subsequently dismissed. Ex. 253; June 25, 1999 Government's Submission Pursuant to 6/21/99 Court Order. On November 13, 1974, the Bennett murder charges concerning Flemmi were dismissed, as they had been against Salemme previously. Ex. 253. Flemmi was a free man.

As of at least 1971, the FBI was trying to develop Bulger as an informant. Bulger had been incarcerated at Alcatraz, among other places, as a result of an investigation led by Rico. In 1971, the violent gang war was continuing. Ex. 97 (209 dated 7/21/71). Bulger was associated with Donald Kileen, a leader of a South Boston gang. Id. (209 dated 6/14/71). A close colleague of Bulger's, William O'Sullivan, was murdered. Id. (Memorandum dated 6/14/71). Bulger understood that he too had been targeted to be killed. Id.

Bulger later claimed that he was inclined to help the FBI because of the favorable treatment that his family had received from Rico when Bulger was in prison. Ex. 1. Bulger also felt that he shared with the FBI a hatred of the LCN. Id.

As indicated earlier, by 1971, Rico had been reassigned to Miami. His former partner Condon, however, sought to develop Bulger as an FBI informant. Ex. 97; Condon May 1, 1998 Tr. 76-79. This effort was endorsed by FBI Headquarters. Ex. 97 (Teletype dated 9/10/71); Condon May 1, 1998 Tr. at 78. Bulger provided some meaningful information concerning the continuing gang war, and additional information concerning Francis Salemme's brother Jack, among others. Id. After several months, however, Condon decided that Bulger was not being sufficiently productive and closed him administratively as a potential informant. Ex. 97 (209 dated 8/4/71); Condon May 1, 1998 Tr. at 77.

In 1972, John Morris was transferred to Boston and assigned to the Organized Crime squad on which Condon also served. Morris Apr. 21, 1998 Tr. at 12. Morris and Condon became friendly and, until about 1976, usually commuted to work together. Id. at 60. In about 1974, Connolly was transferred to Boston and also assigned to the Organized Crime squad. Condon May 1, 1998 Tr. at 47.

In 1974 and 1975, Morris and Connolly participated in a loansharking investigation in which the alleged victim was Peter Pallotta. Morris Apr. 23, 1998 Tr. at 49-51, 67-72. Bulger was a subject of the investigation. Id. At least seven individuals were prosecuted as a result of that investigation, including James Martorano and Brian Halloran. Id. at 49. Bulger was not indicted. Id. at 50-51.

In the course of the Pallotta investigation, Connolly decided to approach Bulger and attempt to make him an informant. Id. at 67-72. Connolly had known Bulger since they were both children growing up in South Boston. Id. at 70; Ex. 1. Bulger became a source for Connolly and was administratively designated an FBI informant on September 30, 1975. Ex. 68. Bulger later explained to FBI SAC Lawrence Sarhatt that he became an FBI informant in part because he had:

a close feeling towards SA John Connolly because they both grew up in the same neighborhood in Boston and had mutual childhood problems, as well as a deep hatred for La Cosa Nostra.

The written record of what the FBI knew about Bulger in 1974 is sparse and neither Bulger nor Connolly have testified in this case. At a minimum the FBI recognized that Bulger was deeply involved in a violent gang war. Ex. 97. The FBI had also been advised that Bulger was involved in extorting money from shylocks and bookmakers. Ex. 100. Morris' actions, however, make it vividly clear that the FBI was well-aware that Bulger was widely regarded as brutally violent when Connolly sought his cooperation.

More specifically, in 1974 or 1975, Morris hoped to obtain the testimony of Eddie Miani in a pending investigation. Morris Apr. 21, 1998 Tr. at 89, Apr. 27, 1998 Tr. at 52-53. In an effort to do so, Morris planted a fake bomb under Miani's car. Id. at 89-92; Ex. 30, ¶ 17. Morris then anonymously called the local police or fire department and alerted it to the "bomb." Id. After the device was disabled, Morris met with Miani. Id. In the hope of scaring him into cooperating, Morris told Miani that Bulger had planted the bomb, and offered Miani the protection of the FBI if he would become a cooperating witness. Id. Miani expressed fear for his life, but declined Morris' offer. Id. at 96. Morris testified that the Miani matter was one of three instances in which he unsuccessfully attempted to exploit Bulger's reputation for violence in an effort to get information for the FBI. Morris Apr. 28, 1998 Tr. at 97-98, Apr. 29, 1998 Tr. at 110, Apr. 30, 1998 Tr. at 98-101, 203-10.⁽³³⁾

On February 4, 1976, several months after being officially designated an informant, Bulger was up-graded to Top Echelon status because of his "demonstrated ability to produce information regarding the highest levels of organized crime . . . ." Ex. 68. As set forth below, that assessment may have been based on Bulger's new partnership with Flemmi, which was in meaningful measure forged by the FBI.

One of Bulger's earliest contributions to Connolly's efforts was to assist in reestablishing Flemmi's alliance with the FBI. When released after his return to Boston in 1974, Flemmi and two partners, George Kaufman and James Martorano, rented a garage in Somerville, Massachusetts from Howard Winter, the head of the Winter Hill Gang. Flemmi Aug. 25, 1998 Tr. at 101. Bulger, among other alleged criminals, frequented the garage. Id. Bulger and Flemmi had met socially once or twice in the 1960's, but did not really know each other previously. Id., Flemmi Sept. 1, 1998 Tr. at 203.

In the six months that the Bennett murder case remained pending, Flemmi generally tried to maintain a low profile. Id. at 115, 154. When all of the charges against him were dismissed in late 1974, he began to become more actively involved in criminal activity, particularly gambling and loansharking. Id. at 189. This led to the resumption of Flemmi's contacts with the LCN. Id. at 115.

In early 1975, Bulger asked Flemmi whether he would be willing to meet with Connolly. Flemmi Aug. 20, 1998 Tr. at 33-35, Aug. 25, 1998 Tr. at 95-96, 102-06. Bulger had previously told Flemmi that Connolly had approached him and wanted to talk. Flemmi Aug. 25, 1998 Tr. at 106. It was clear to Flemmi that Bulger knew at least generally of his prior relationship with the FBI. Id. He told Bulger that talking to the FBI "was a good idea." Id. Knowing that Bulger was aware of his prior relationship with the FBI and was talking with Connolly himself, Flemmi was sufficiently comfortable with Bulger's suggestion to agree to meet with Connolly. Id. at 102-06, Aug. 20, 1998 Tr. at 35-36.

Soon after, Flemmi met with Connolly and Condon at a coffee shop in Newton, Massachusetts for what Flemmi regarded as an "introductory" meeting. Flemmi Aug. 20, 1998 Tr. at 35-36. Rico was discussed. Id. At the meeting, Connolly articulated what Flemmi understood when he was invited -- that the FBI was interested in receiving information from him again. Flemmi, Aug. 25, 1998 Tr. at 183.

Following the Newton meeting Flemmi began passing information about the LCN to Connolly through Bulger. Id. at 115. Later in 1975, or in early 1976, Flemmi and Bulger had the first of a long series of meetings with Connolly, this one at Bulger's home. Id. at 158.

At that meeting, Connolly made clear to Flemmi that he wanted to reestablish the relationship that Rico had with him and regularly receive information from Flemmi about the LCN. Id. at 185. Having no prior experience with Connolly, Flemmi wanted to know what he would get in return for his cooperation. Id. Connolly assured Flemmi that he and Bulger would be "protected" for the criminal activity they engaged in while furnishing information to the FBI. Id. at 185-86, 202, 206-09; Flemmi Aug. 20, 1998 Tr. at 37-38. Connolly never used the term "immunity," but on various occasions reiterated that the FBI would "protect" Bulger and Flemmi. Flemmi Aug. 20, 1998 Tr. at 211.

Connolly, and his FBI colleagues, understood that only serious criminals would be in a position to provide meaningful information on the LCN. Flemmi Aug. 25, 1998 Tr. at 188-89; Morris Apr. 22, 1998 Tr. at 122-23, Apr. 27, 1998 Tr. at 18-19. Top Echelon informants were, by definition, members of an organized crime group who could furnish information on the highest levels of organized crime groups of national significance. Ex. 274 (Under Seal), Manual § 108.L (1964-77); § 137-12 (1978-80); § 137-16 (1981-83); § 137-15 (1974-87). See also Potts May 22, 1998 Tr. at 30-35; Blackburn May 22, 1998 Tr. at 30-35, 75-78. Such informants are difficult to develop. Thus, agents were instructed that, "[t]he success of the Top Echelon Criminal Informant Program depends on a dynamic and imaginative approach in developing quality sources who can assist the Bureau in meeting its investigative responsibilities." Ex. NN (Under Seal), Manual § 108 pt. III(B) (1-12-77); § 137-12(2) (4-12-79).

In the course of telling Connolly about the criminal activities of others, directly and through Bulger, Flemmi initially referred to his own illegal gambling and loansharking activities. Id. at 153, 188-89. From the outset, and increasingly over time, however, Connolly was not under the illusion that gambling and loansharking were the only, or most dangerous, crimes in which Flemmi and Bulger were likely involved. Rather, as Connolly recently explained:

We knew what these guys were. They did not have a paper route when we first met them. All of them, Top Echelon Informants, are murderers. The government put me in business with murderers.

Oct. 23, 1998 Tr. at 43 (quoting R. Ranalli, "Agent hoped Bulger eluded feds," Boston Herald, Aug. 11, 1998, at 6.)⁽³⁴⁾

By February 1976, when Bulger was elevated to Top Echelon informant status, the FBI had been instrumental in the formation of what is now alleged to have been an enduring and formidable criminal partnership between Bulger and Flemmi. The FBI made Bulger and Flemmi a perfect match. By 1976, in Boston, Flemmi and Bulger uniquely shared an antipathy for the LCN, a desire to profit from its destruction, and -- most notably -- the promised protection of the FBI.

Connolly was reiterating and reaffirming Rico's promise of FBI protection to Flemmi at a time when the Attorney General of the United States, Edward H. Levi, was working to develop Guidelines relating to the FBI's handling of its informants. Those Guidelines were part of a larger effort by the Attorney General and others to establish standards and procedures aimed at ending a series of serious abuses by the FBI, which had long been masked by the secrecy in which the FBI historically operated.

A book published by the Police Foundation in 1979 described the situation during the Levi administration of the Department of Justice (1975-77) as follows:

In reaction to these disclosures, Congress and the legal profession began looking more closely at the FBI, particularly at its internal security operations. Select Committees of the House and Senate included FBI abuses in their investigations of intelligence activities, and the House Judiciary Committee asked the General Accounting Office (GAO) to review FBI domestic intelligence policies and procedures. The American Bar Association set up a Special Committee to Study Federal Law Enforcement Agencies. Within the Justice Department, Attorney General Levi established a committee to draw up guidelines for FBI investigations.

The FBI, under Director Clarence M. Kelley, worked with the Attorney General and with congressional investigators to assess what had gone wrong in the past and what should be done in the future. The new revelations were sometimes shocking, especially the details of FBI efforts to "neutralize" Dr. Martin Luther King, Jr., as an effective civil rights leader during the 1960s. Former top officials of the FBI and CIA had acted on the assumption that they could disregard the normal legal rights of domestic groups because their work was so important to the national security that they were not governed by legal and constitutional standards applying to the rest of the law enforcement community. They made this claim in defense of opening mail, breaking into homes and offices without a warrant, and using what the Senate Select Committee to Study Governmental Operations with respect to Intelligence Activities (the Church committee) found to be "dangerous and degrading tactics" to disrupt and discredit lawful domestic political activities of Americans.

Even after the congressional committees issued their reports and Attorney General Levi adopted his first FBI guidelines in 1976, Director Kelley discovered that some of his subordinates had "deceived" him by not revealing FBI break-ins that had taken place in 1972-1973. This information triggered still another inquiry -- a criminal investigation by the Justice Department leading to indictments of former FBI officials in 1977-1978. Director Kelley summed up the problems in a landmark address at Westminster College in May 1976. Admitting that some FBI activities had been "clearly wrong and quite indefensible," he declared that the Bureau should never again occupy the "unique position that permitted improper activity without accountability."

John T. Elliff, The Reform of FBI Intelligence Operations 5-6 (1974) (emphasis added).

As Director Kelley indicated, the ability of the FBI to act in secrecy, even from the Attorney General, and thus without any accountability, was a major reason that such abuses were possible. There are, of course, often legitimate reasons for confidentiality. Secrecy, however, also inherently entails risks that were foreseeable, and indeed foreseen, when the FBI was established.

The modern FBI was created in 1924, by Attorney General and future Chief Justice Harlan Fiske Stone, to succeed the corrupt Bureau of Investigation, which Stone characterized as "'lawless, maintaining many activities which were without any authority in federal statutes, and engaging in many practices which were brutal and tyrannical in the extreme.'" Alpheus Thomas Mason, Harlan Fiske Stone: Pillar of the Law 153 (1956) (quoting Stone to Jack Alexander, Sept. 21, 1937). On the day Stone appointed J. Edgar Hoover as the acting Director of the FBI, Stone warned of a danger that he anticipated. He said:

Id. at 153 (quoting N.Y. Times, May 10, 1924). The problems Levi confronted, and those disclosed by this case, demonstrate the wisdom of Stone's warning.

That warning, however, long went unheeded. The FBI is part of the Department of Justice and formally subject to oversight and direction by the Attorney General. See 28 U.S.C. §§ 503, 531-33. However, as Levi testified in 1975, even recognizing that "the Bureau must have considerable autonomy," there were "times . . . when the supervision [of the FBI] by Attorneys General ha[d] been sporadic, practically non-existent, or ineffective." Statement of Attorney General Edward H. Levi to the Senate Select Committee on Intelligence Activities (Dec. 11, 1975) at 6.

In March 1976, Levi issued Guidelines regulating and limiting the FBI's authority to conduct domestic security investigations and dealing with civil disorders. See Elliff, supra, at 203-09. The Attorney General also then published draft Guidelines addressing the relationship between the White House and the FBI. Id. at 210-14. On December 15, 1976, about a month before leaving office, the Attorney General issued a memorandum to the Director of the FBI that described basic standards and procedures for the FBI's use of informants in Domestic Security, Organized Crime, and Other Criminal Investigations. Id. at 215-19 (the "Levi Memorandum"). The Levi Memorandum was incorporated in the FBI's Manual of Instructions on January 12, 1977. See Ex. 274 (Under Seal), Manual § 108 pt. IV at 13 (1-12-77).

The Guidelines for FBI informants established by the Levi Memorandum were intended, in part, to diminish the perceived need for legislation to regulate and restrict the FBI's use of informants and also to provide guidance if legislation was to be enacted. As Attorney General Levi testified in 1976:

I would like to [suggest] a few considerations that should be taken into account in deciding what statutory changes should be made to define more clearly the areas of the Bureau's jurisdiction and the means and methods which the Bureau is permitted to use in carrying out its assigned tasks.

First, there is a temptation to resort to having the courts make many difficult day-to-day decisions about investigations. When a Fourth Amendment search or seizure is involved, of course, recourse to a court for a judicial warrant is in most circumstances required. But the temptation is to extend the use of warrants into areas where warrants are not constitutionally required. For example, as you know it has been suggested that the FBI ought to obtain a warrant before using an informant. Extending the warrant requirement in this way would be a major step toward an alteration in the basic nature of the criminal justice system in America. It would be a step toward the inquisitorial system in which judges, and not members of the executive, actually control the investigation of crimes. This is the system used in some European countries and elsewhere, but our system of justice keeps the investigation and prosecution of crime separate from the adjudication of criminal charges. The separation is important to the neutrality of the judiciary, a neutrality which our system takes pains to protect.

In drafting statutory changes, it must be remembered that rigid directions governing every step in the investigative process could sacrifice the flexibility that is necessary if an investigative agency is to adapt to the diverse factual situations it must face. Rigid statutory provisions would invite litigation at every step in the investigative process. Such litigation could very well be used by clever individuals to frustrate legitimate law enforcement efforts without achieving the measure of control for which the statutes were enacted.

Testimony of the Honorable Edward H. Levi, Attorney General of the United States, Before the Subcommittee on Civil and Constitutional Rights, Committee on Judiciary, House of Representatives (Feb. 11, 1976) at 3-5 (emphasis added).

The Guidelines concerning informants described in the Levi Memorandum, among other things, contributed to keeping legislation from being enacted, and regulations from being promulgated, concerning the FBI's use of informants. In contrast to laws or regulations, those Guidelines did not impose any legally enforceable obligations on the FBI or create any rights that are legally enforceable by defendants. This fact was made explicit in a 1981 amendment to the Guidelines in which the Attorney General stated:

N. Reservation These guidelines on the use of informants and confidential sources are set forth solely for the purpose of internal Department of Justice guidance. They are not intended to, do not, and may not be relied upon to create any rights, substantive or procedural, enforceable at law by any party in any matter, civil or criminal, nor do they place any limitations on otherwise lawful investigative and litigative prerogatives of the Department of Justice.

Ex. 274 (Under Seal), Manual § 137-17(N)(1-12-81) (emphasis added). Thus, the Guidelines did not operate to remove from the FBI authority that it otherwise had to promise its informants immunity.

Prior to the issuance of the Levi Memorandum, the Department of Justice did not have any institutionalized role in the FBI's use of informants. It appears, however, that the FBI occasionally sought legal advice from the Department of Justice on issues relating to them. For example, from at least 1961 until the issuance of the Levi Memorandum the FBI's Manual of Instructions stated that:

On 7-10-52 the Department furnished an opinion regarding the question whether an informant could be prosecuted for technically violating the law while attempting to obtain evidence regarding a Federal violation. The Department stated ". . . If the intent throughout was to assist the government agents in the enforcement of the law, and not to violate or to 'cover-up' for a violation of the law, it is not believed a case for prosecution could be made against such an informer . . . ."

The procedures to be followed by informers working under the supervision of your agents in the aid of enforcing the statutes coming within your jurisdiction largely rests upon your sound discretion . . . . It is not believed that an informer would be otherwise immune from prosecution for actions which would subject a Federal enforcement officer to prosecution.

Id. § 108(K) (10-13-61) (emphasis added). Prior to the promulgation of the Levi Memorandum, the Manual of Instructions also included the direction that:

Care must be exercised in attempting to persuade individuals to act as informants to avoid any allegations of undue influence. An individual who is in custody and who offers to furnish information generally does so in the hope that he will receive some consideration in return. Bureau agents cannot promise any immunity or any reduction in sentence to a criminal who furnishes information and they must not put themselves in a situation where they might subsequently be accused of having done so.

Read together, these provisions, among other things, indicate that prior to the Levi Memorandum the procedures to be employed in dealing with informants were at all times in the sole discretion of the FBI. Consultation with Department of Justice attorneys was not required. Indeed, such consultation with regard to an identified individual would have been inconsistent with the historic direction to FBI agents that: "Constant care must be exercised to avoid any disclosure to anyone which might permit identification of a criminal informant or even cast suspicion on a criminal informant." Id. § 108(I)(8) (12-11-59) (emphasis added). FBI agents were particularly advised, but not ordered, not to promise immunity or a reduction of sentence to "criminals" in custody whose cooperation was being sought. The FBI could, however, authorize informants who were not incarcerated to engage in what would otherwise be criminal activity without the involvement of Department of Justice attorneys. Id. § 108(K) (10-13-61).

In addition, the FBI alone could decide if an informant should be targeted for investigation and possible prosecution rather than continued as a source. As a practical matter, if an FBI agent made and honored a promise to protect an informant, the Attorney General and Department of Justice prosecutors would, under then established standards and procedures, virtually never know. It was in this environment that Connolly, in late 1975 or early 1976, repeated the promise of protection to Flemmi that Rico had made and kept.

In the December 15, 1976 Levi Memorandum, the Attorney General described the risks -- realized in this case with regard to Bulger and Flemmi -- that the operation of informants involves. Levi wrote:

Courts have recognized that the government's use of informants is lawful and may often be essential to the effectiveness of properly authorized law enforcement investigations. However, the technique of using informants to assist in the investigation of criminal activity, since it may involve an element of deception and intrusion into the privacy of individuals or may require government cooperation with persons whose reliability and motivation may be open to question, should be carefully limited. Thus, while it is proper for the FBI to use informants in appropriate investigations, it is imperative that special care be taken not only to minimize their use but also to ensure that individual rights are not infringed and that the government itself does not become a violator of the law. Informants as such are not employees of the FBI, but the relationship of an informant to the FBI imposes a special responsibility upon the FBI when the informant engages in activity where he has received, or reasonably thinks he has received, encouragement or direction for that activity from the FBI.

Id. § 108 pt. IV (1-12-77) (emphasis added). Among other things, this statement expresses the understanding of the Attorney General that it was the FBI alone that had the power, and therefore the responsibility, for making promises to informants. Thus, the Attorney General encouraged the Bureau to be careful in doing so.

The Levi Memorandum provided explicit factors to be weighed by the FBI in deciding whether to utilize someone as an informant. Id. at 14. These included "the potential value of the information he may be able to furnish in relation to the consideration he may be seeking from the government for his cooperation." Id. § 108 pt. IV(A)(5) (1-22-77). The initial decision whether to utilize an individual as an informant, however, was left solely to the FBI.

The Levi Memorandum resulted in the deletion from the FBI Manual of the previously quoted § 108(D)(4) concerning granting immunity to informants. The Levi Guidelines included certain unqualified prohibitions, such as the provision stating that, "No active military personnel can be developed as informants." Id. § 108 pt. I(C)(5)(d) (1-12-77) (emphasis added). However, with regard to immunity, the new Guidelines stated, in language that endured at least until 1984, that:

Agents should not exercise undue influence in developing informants including promising immunity or reduction of sentence to criminals who furnish information.

Id. § 108(I)(C)(6) (1-12-77); § 137-3(6) (1-31-78); § 137-3(6) (4-2-79); § 137-5(4) (1-12-81); § 137-5(4) (9-20-82); § 137-5(4) (3-28-84) (emphasis added). This provision of the Guidelines did not state that FBI agents were not authorized to promise immunity to informants. Rather it only stated that they should not do so. Thus, the FBI was discouraged, but not prohibited from promising immunity to informants. This advice was expressly premised on the principle that any such promise would be a form of "undue influence."

If the Attorney General intended to restrict the authority of the FBI to promise an informant immunity, he could and would have said so plainly. For example, on January 10, 1975, the Attorney General issued an Order, available to members of the public, that expressly stated that "Investigative Agents and Attorneys are not Authorized to make representations to witnesses regarding funding, protection, or relocation." Department of Justice Order OBD 2110.2, P 7(d) (Jan. 10, 1975)(emphasis in original). The Order also provided that such promises could be made "by authorized representatives of the U.S. Marshals Service only." Id. This legal limitation on the authority of prosecutors and investigators was recognized and respected by the courts. Doe v. Civiletti, 635 F.2d 88, 90 (2d Cir. 1980) (holding that oral representations of a Strike Force attorney and DEA agent did not commit the Marshals Service with regard to placing someone in the Witness Protection Program). Similarly, the United States Attorneys Manual ("USAM") clearly states that "'No U.S. Attorney or [Assistant United States Attorney] has the authority to negotiate regarding an extradition or deportation order in connection with any case.'" San Pedro v. United States, 79 F.3d 1065, 1070 n.4 (11th Cir. 1996) (citing USAM § 9-16.020).

In contrast, neither the Levi Guidelines nor their successors stated that FBI was not authorized to promise immunity. Nor were FBI agents directed to consult a Department of Justice attorney if a promise of immunity, or anything that might be construed as a promise of immunity, was being discussed.

Rather, as indicated earlier, from at least 1977 through 1980, agents were instructed that, "[t]he success of the Top Echelon informant program depends on a dynamic and imaginative approach in developing quality sources who can help the Bureau in meeting its investigatory responsibilities." Ex. NN (Under Seal), Manual § 108 pt. III(B) (1-12-77); § 137-12(2) (4-12-79). This direction could understandably have been interpreted by agents as permitting, if not encouraging, informal promises of immunity to potential informants.

Moreover, the Levi Guidelines indicated that the FBI could, without consulting any prosecutor, authorize what would otherwise be criminal conduct by an informant. More specifically, those Guidelines provided that:

The FBI shall instruct all informants it uses in . . . organized crime and other criminal investigations that in carrying out their assignments they shall not:

. . .(4) participate in criminal activities of persons under investigation, except insofar as the FBI determines that such participation is necessary to obtain information needed for purposes of federal prosecution.

Ex. 274 (Under Seal), Manual § 108 pt. IV(B)(4) (emphasis added). Consistent with this the Attorney General stated that, "[t]he FBI may not use informants . . . for acts . . . which the FBI could not authorize for its undercover agents." Id. § 108 pt. IV at 13 (emphasis added). Thus, in 1977, the Levi Memorandum expressly treated the issue of authorization as solely within the province of the FBI. As the instant case reflects, immunity and authorization are distinct, but closely related concepts.

In extending the traditional exclusion of Department of Justice attorneys from the process of providing promises to FBI informants in order to obtain information, the Levi Guidelines were consistent with the unaltered provision of the Manual which continued to state that:

Constant care should be exercised to avoid any disclosure to anyone which might result in the identification of an informant or cast suspicion upon an informant.

Id. § 108 pt. I(C)(7) (emphasis added). Moreover, FBI agents were also instructed that:

At the earliest possible date all informants should be advised that the FBI will take all possible steps to maintain the full confidentiality of the informant's relationship with the FBI.

Although the Levi Memorandum and related Guidelines did not provide Department of Justice attorneys a role regarding the promises that might be made to an FBI informant, they did for the first time establish a role for the Department of Justice when it later appeared that an FBI informant may have committed a crime. Id. § 108 pt. IV(C). First, the Attorney General directed that, "[u]nder no circumstances shall the FBI take any action to conceal a crime by one of its informants." Id. § 108 pt. IV(C)(1). As described in this Memorandum, this direction was regularly disregarded concerning Flemmi and Bulger.

In addition, if the FBI learned that one of its informants had violated the law in furtherance of his assistance to the FBI, it was expected that "ordinarily" the FBI would promptly inform the appropriate law enforcement or prosecutive authorities, and the FBI would decide whether the continued use of the informant was justified. Id. § 108 pt. IV(C)(2). If there were "exceptional" circumstances that caused the FBI to believe that such notification was "inadvisable," the FBI was required to inform the Department of Justice. Id. The Department would then decide whether law enforcement or prosecutive authorities should be notified and whether the FBI should continue to use the informant. Id. The Levi Memorandum also established the same procedures where the FBI had "knowledge" that one of its informants had committed a "serious" crime "unconnected with his FBI assignment." Id. § 108 pt. IV(C)(3). As described in this Memorandum, these requirements too were regularly ignored with regard to Bulger and Flemmi.

The December 15, 1976 Memorandum and the related Guidelines incorporated in the FBI Manual on January 12, 1977, were intended to provide guidance to the FBI before Attorney General Levi left office. They contemplated the development of additional Guidelines.

The Levi Guidelines recognized that FBI informants may need to engage in criminal activity to obtain important information. See Ex. 274 (Under Seal), Manual § 108 pt. I(D)(5) (1-12-77). In 1981, the Guidelines were revised to clarify this point and to provide more explicitly that informants may, if necessary and appropriate, be authorized to participate in a particular criminal act or "a specified group of otherwise criminal activities." Id. § 137-17(F)(2) (1-12-81).

In addition, for the first time, Department of Justice officials were given a role in certain authorization decisions. More specifically, since 1981, "ordinary criminal activity" is to be authorized by an FBI field office supervisor or higher FBI official. Id. "Extraordinary criminal activity," including conduct involving a "significant risk of violence," is to be authorized by the SAC with the approval of the United States Attorney. Id. § 137-17(F)(2) & (3) (1-12-81). The SAC is not, however, permitted to disclose the informant's identity to the United States Attorney. Id. § 137-17(F)(3). Both FBI Headquarters and the Assistant Attorney General in charge of the Criminal Division are to be immediately informed of any authorization of extraordinary criminal activity, although, once again, the identity of the informant is not to be disclosed to the Assistant Attorney General. Id. All such authorizations are to be memorialized in writing. Id. § 137-17(F)(2).

In 1981, the Guideline provisions regarding the instructions to be given to informants were also revised and implicitly indicated that informants should not be told that Department of Justice attorneys might play a role concerning them. Rather, the 1981 version of the Guidelines provided that each informant:

shall be advised that his relationship with the FBI will not protect him from arrest or prosecution for any violation of Federal, State, or local law, except where the FBI has determined pursuant to these guidelines that his association in specific activity, which otherwise would be criminal, is justified for law enforcement . . .

In 1981, the instructions to be given informants were also revised to state that they should be told that:

Informant's relationship with the FBI will not protect him /her from arrest or prosecution for any violation of Federal, state, or local law, except insofar as a field supervisor or SAC determines pursuant to appropriate Attorney General's Guidelines that the informant's criminal activity is justified.

Id. § 137-3.4(1)(k) (1-12-81) (emphasis added). Thus, if the required warnings were given to an informant, he would reasonably understand that the FBI, without the involvement of any prosecutor, had the authority to decide if the informant would be protected from arrest and prosecution.

The Attorney General's Guidelines for the FBI's use of informants recognize that difficult decisions often must be made to strike a balance between effective law enforcement and providing benefits to criminals who are seeking to help themselves. The Guidelines in certain respects employ the principle that the weighing of these competing interests should be done by informed, but relatively disinterested officials, rather than by agents who have developed a personal relationship with the informant and have a vested interest in the outcome of the investigations to which the informant may be able to contribute. In this sense, although no judicial officer is involved, the Guidelines are similar in their approach to the warrant requirement of the Fourth Amendment, which requires that decisions concerning whether to authorize invasions of privacy be made by neutral magistrates rather than by those engaged in the competitive business of law enforcement, who do not have sufficient objectivity to be trusted to assess correctly the relative strength of the interests which must be weighed. See, e.g., Steagald v. United States, 451 U.S. 204, 212 (1981).

Attorney General Levi, however, recognized that there were limits to what formal standards and procedures alone could accomplish. As he testified:

No procedures are fail-safe against abuse. The best protection remains the quality and professionalism of the

Statement of the Honorable Edward H. Levi, Attorney General of the United States, Before the Senate Select Committee on Intelligence Activities (Dec. 11, 1975) at 13. This case demonstrates that the enduring potential for abuse that Levi perceived was quickly realized.

The evidence in this case indicates that at least with regard to Organized Crime matters, the Guidelines were ignored from the outset. There were no special seminars or major training concerning the Guidelines that was received by the witnesses in this case. Morris Apr. 22, 1998 Tr. at 28-33; Ring Sept. 22, 1998 Tr. at 43-44; Darcy Sept. 28, 1998 Tr. at 66-67. Morris apparently did not read the new informant Guidelines when they were issued. Morris Apr. 22, 1998 Tr. at 28-33. The informant Guidelines were discussed occasionally in more general training sessions, but the Organized Crime squad supervisors in Boston did not get answers to any questions that they had. Ring Sept. 22, 1998 Tr. at 44.

In general, Morris and his successor as the supervisor of the Organized Crime squad, Ring, viewed the Attorney General's Guidelines as inconsistent with the Top Echelon informant program and utterly unrealistic. Morris Apr. 22, 1998 Tr. at 122-24, Apr. 27, 1998 Tr. at 18-19; Ring Sept. 22, 1998 Tr. at 17. Thus, they felt the Guidelines did not apply to Organized Crime matters. Id. In their view, Top Echelon informants were, by definition, members of Organized Crime, who had to be involved in serious criminal activity. Morris Apr. 22, 1998 Tr. at 122-24, 128; Ring Sept. 22, 1998 Tr. at 17. Thus, Morris and Ring ignored provisions of the Attorney General's Guidelines that required authorization of criminal activity and reporting of unauthorized crimes committed by informants. Id.

The views of the supervisors of the Organized Crime squad were especially important. As described in this Memorandum, the SACs generally relied completely on the informant's handler and his supervisor for making decisions and recommendations for which the SACs were responsible under the Guidelines. Greenleaf Jan. 8, 1998 Tr. at 136-40. As Larry Potts, who served in many field FBI Offices and as Acting Deputy Director of the Bureau, put it, the supervisor of the handling agent was the "chief decisionmaker" regarding whether or not an individual should be continued as an informant. Potts May 22, 1998 Tr. at 7.

With regard to Flemmi and Bulger, at least, the requirements of the Guidelines were either ignored or treated as a bureaucratic nuisance. For example, Connolly filled out forms representing that he gave the required warnings to Flemmi that his relationship with the FBI would not protect him from arrest or prosecution unless a supervisor or SAC authorized his conduct pursuant to the Guidelines. Ex. 43; Gianturco Jan. 20, 1998 Tr. at 151-53. Those representations, however, were false. Flemmi Aug. 28, 1998 Tr. at 133.

The evidence also indicates that FBI Headquarters did not effectively supervise the implementation of the Guidelines. Potts could recall no instance in which a field office's recommendation that an individual be designated an informant was ever reversed. Potts May 22, 1998 Tr. at 6-8.

Moreover, while FBI Headquarters periodically audited the Boston office's informant files, no deficiencies with regard to the handling of Bulger or Flemmi were noted, despite the fact that those files were replete with information indicating that Bulger and Flemmi were involved in serious criminal activity that had not been authorized in writing, investigated by the FBI, reported to other law enforcement agencies, or reported to the Assistant Attorney General for the Criminal Division as required by the Guidelines. Indeed, when on the eve of the indictment of this case the FBI Principal Legal Advisor in Boston, John Michael Callahan, reviewed the Bulger and Flemmi files, he concluded that the FBI in Boston knew a great deal about their criminal activity and, in his opinion, had tacitly authorized at least some of it, including participation in illegal gambling and LCN policy making. Ex. 271. Any serious, earlier review of the files concerning information provided by Flemmi and Bulger in order to determine compliance with the Guidelines would have made clear that the requirements relating to authorization were being ignored. A proper review of the information about Bulger and Flemmi being provided by other informants, some of which is described in this Memorandum, would have made this conclusion even more clear.

Thus, at least with regard to Bulger and Flemmi, the FBI as an institution essentially disregarded the carefully calibrated standards and procedures that were developed by Attorney General Levi and his successors for continuing to use informants after the FBI had decided to employ them. The Department of Justice was apparently ignorant of, or indifferent to, these violations. There is no evidence that the Department of Justice did any review of its own to determine if the Guidelines were being followed. Rather, it seems to have relied solely on the good faith of the FBI.

As a result, it is not disputed that the Guidelines were not obeyed at least with regard to Flemmi and Bulger. As Assistant United States Attorney James Herbert stated:

We don't dispute . . . the Court's conclusion that the theory behind the Guidelines and the FBI's policies and procedures was to remove from the line agent the responsibility and the authority to make difficult decisions with respect to criminal informants . . . that is what they were designed to do and I don't think they were followed in connection with Mr. Bulger and Mr. Flemmi in the manner they were designed to.

Nov. 19, 1998 Tr. at 94. Herbert's remark to the court echoed an earlier public statement by United States Attorney Donald Stern, who said:

The FBI and attorney general informant guidelines, together with FBI administrative controls, are intended to provide the necessary checks and balances and to ensure that often difficult decisions are made at the appropriate level, based on complete and accurate information. While admittedly no system is foolproof, clearly those objectives were not met here, at least in certain critical respects.

Mitchell Zuckoff, "Bulger Case sparks probe in U.S. House," The Boston Globe, July 24, 1998, at A12.

As indicated earlier, Bulger was designated a Top Echelon informant on February 4, 1976, because of his "demonstrated ability to produce information regarding the highest levels of organized crime." Ex. 68. Flemmi was not officially reopened as a source until September 1980. Exs. 4, 82. Flemmi, however, continued to provide information to Connolly through Bulger and directly, often during meetings with Bulger and Connolly. In the circumstances, it is likely that Flemmi was, directly or indirectly, the source of some of the information attributed to Bulger in the FBI files for the periods that Bulger was open as an informant and Flemmi was not.

Some of the information Bulger and Flemmi provided in 1976 and 1977 was very valuable to the FBI's organized crime effort. Most notably, Barboza was murdered in February 1976. Ex. 5. In May 1976, Bulger reportedly informed Connolly that Jimmy Chalmas had set Barboza up and that the LCN intended to kill Chalmas to keep him quiet. Id. Connolly and Condon used this information to persuade Chalmas to admit his guilt and become a cooperating witness. Id.; Condon May 1, 1998 Tr. at 130. Connolly predicted that Chalmas' testimony would permit the FBI to obtain the conviction of Joseph Russo, who was regarded as "the #3 member of the LCN in the Boston Division." Ex. 5. Although Russo was for many years a fugitive, in 1992, after becoming the Consigliere of the Patriarca Family, he was sentenced by this court for participating in the Barboza murder, among other things. See United States v. Carrozza, 807 F. Supp. 156, 159 (D. Mass. 1992), aff'd, 4 F.3d 70 (1st Cir. 1993).

The FBI files also record Bulger as the source of other highly valued information. For example, FBI records indicated that in 1977, Bulger warned Connolly that Special Agent Joseph Butchka, who was operating undercover, had been identified and targeted to be killed. Ex. 5. The FBI acted to secure Butchka's safety and Bulger was reportedly successful in preventing the prospective hitmen from acting on their threat against him. Id.

Similarly, in 1978, Bulger told Connolly about the planned imminent murder of Nick Gianturco, the FBI undercover agent in an investigation of truck hijacking known as "Operation Lobster." Ex. 5; Morris Apr. 21, 1998 Tr. at 81-84; Gianturco Apr. 20, 1998 Tr. at 10-11. Once again, the FBI took effective steps to protect its undercover agent. Id. Bulger was later credited with helping save Gianturco's life. Ex. 5.

Connolly reciprocated by providing Bulger and Flemmi the protection that he had promised. For example, in 1977, Bulger was told to alert Flemmi that a cleaning company had been "wired," in an effort to obtain evidence of Flemmi's loansharking. Ex. 30, ¶ 9. As a result, Flemmi avoided that location and was not intercepted. Id.

Similarly, in 1977 or 1978, several officials of National Melotone, a vending machine company, tried to prompt an FBI investigation of Flemmi, Bulger, and their associates for using threats of violence to have National Melotone's vending machines replaced with machines from Flemmi and Bulger's National Vending Company. Flemmi Aug. 20, 1998 Tr. at 112-17; Ex. 30, ¶ 14. Rather than pursue this information, report it to local law enforcement, or advise anyone other than perhaps Morris, who had become the Chief of the Organized Crime squad in December 1977, Connolly successfully sought to protect Flemmi and Bulger. More specifically, Connolly claimed that if an investigation of their allegations was conducted the executives of National Melotone and their families would be in great danger, requiring their participation in the federal Witness Protection Program and relocation. Id. This advice exploited what Connolly knew were the frightening reputations for violence that Flemmi and Bulger had acquired. It dissuaded the representatives of National Melotone from pursuing their charges. Id. Connolly did, however, tell Bulger and Flemmi about the problem. Id. To alleviate the pressure for an investigation, Flemmi and Bulger gave National Melotone back the locations in dispute. Flemmi Aug. 20, 1998 Tr. at 114.

Similarly, in October 1977, FBI Special Agents Thomas Daly and Peter Kennedy, who were then members of the Organized Crime squad, interviewed Francis Green. Exs. 261 and 262. An informant had reported that Bulger and Flemmi were threatening Green. Ex. 163. Green confirmed that Bulger, Flemmi, and John Martorano had approached him about a debt he owed to Colony Finance. Id. Bulger told Green that the money Green had been lent belonged to him and his colleagues, and that if it was not promptly repaid "they would positively kill him, that they would cut his ears off and stuff them in his mouth, that they would gouge his eyes out." Ex. 261. Green told the agents he was unwilling to testify, however. Id.

It is common for victims of threats to be reluctant to testify initially. Usually, the FBI tries to overcome this reticence. Ring Sept. 22, 1998 Tr. at 34. As Ring put it: "Nobody wants to testify in these types of cases . . . . You don't just turn around and walk away. If we did that we'd never make an organized crime case." Id. Green later became an important government witness in a public corruption case investigated by the IRS. See United States v. Tracey, 675 F.2d 433, 436 (1st Cir. 1982). The FBI, however, never sought to develop Green as a witness against Bulger and Flemmi.

As indicated earlier, in December 1977, Morris was promoted to Chief of the Boston Organized Crime squad. Pursuing the LCN remained the FBI's "number 1 priority." Morris Apr. 22, 1998 Tr. at 127; Ex. 50. Morris regarded Bulger and Flemmi as vital assets in that effort.

Morris understood that Bulger and Flemmi viewed the LCN as "mortal enemies." Id. at 18. At the same time, Flemmi, particularly, was one of the very few sources who could provide the FBI with "information at the policy making level of the LCN." Ex. 8; Morris Apr. 22, 1998 Tr. at 15.

Connolly urged Morris not to treat Flemmi and Bulger like informants. Morris Apr. 24, 1998 Tr. at 156. Morris agreed and with Connolly cultivated the sense that Bulger and Flemmi were allies of the FBI. For example, Morris initially met Bulger and Flemmi at a dinner held at his home, which Connolly also attended. Morris Apr. 21, 1998 Tr. at 103-04. This was the first in a series of such meetings with Bulger and Flemmi, which, as discussed infra, would come to include Nick Gianturco, Special Agent Michael Buckley, Supervisory Special Agent James Ring, Dennis Condon, Jules Bonovolenta, the ASAC in New York, and Joe Pistone, then a former New York FBI agent who had become famous for his undercover work as "Donnie Brasco." Gianturco Jan. 15, 1998 Tr. at 125-26, 154-55. Neither Morris nor Ring ever had similar, ostensibly social meetings with any other source. Morris Apr. 21, 1998 Tr. at 107; Ring June 10, 1998 Tr. at 94-95.

It was evident to Morris that the attempt to cause Flemmi and Bulger to feel that they were valued allies of the FBI rather than disreputable "rats" was successful. Morris correctly sensed that Flemmi never realized that he and Bulger had been officially opened as informants or that some of the information that they provided was being documented in its files. Morris Apr. 21, 1998 Tr. at 34.

In fact, all contacts with informants were required to be documented on FBI Forms 209. See, e.g., Ex. 274 (Under Seal), Manual § 108 (10-13-60 to 7-13-76); § 108 pt. I(E)(3) (1-12-77); § 137-6(3) (1-31-78); § 137-8(2)(c-d) (1-12-81); Ring June 15, 1998 Tr. at 59. Morris' view of such 209s and the information that they contained was similar to Rico's and also shared by Morris' colleagues in the FBI's Boston office.

More specifically, Morris understood and expected that informants would be told that their relationship with the FBI was confidential and would not be disclosed to anyone outside the FBI. Morris Apr. 24, 1998 Tr. at 130; Apr. 29, 1998 Tr. at 47. During Morris' tenure at the FBI it continued to be the Bureau's routine and practice to maintain the confidentiality of its relationship with an informant as "sacred." Morris Apr. 24, 1998 Tr. at 130.

Morris believed that the FBI would be violating its confidentiality agreement with its informants if it disclosed information provided by an informant to anyone seeking to investigate or prosecute him. Morris Apr. 24, 1998 Tr. at 130. Thus, Morris never told Bulger or Flemmi that information they were giving could be used against them. Morris Apr. 30, 1999 Tr. at 73. Morris did not believe that it could.

Morris correctly understood the FBI's position on this issue. For example, his view was shared by former Supervisory Special Agent James Darcy, whom the government called to testify as an expert concerning the handling of FBI informants. Darcy Sept. 29, 1998 Tr. at 81. Consistent with this, Potts, the former Acting Deputy Director of the FBI, knew of no instance in which information furnished by an informant had been used to assist an investigation or prosecution of him. Potts May 23, 1998 Tr. at 66. Nor did Morris. Morris Apr. 30, 1999 Tr. at 110.

In 1978 and 1979, Flemmi, Morris, and Connolly each understood that Flemmi and Bulger could properly be investigated by other agents or agencies, and be prosecuted if sufficient evidence were developed. This understanding was manifest in their conduct concerning an investigation of a race-fixing scheme being conducted by Daly, who was then working in the Lawrence or Lowell, Massachusetts office of the FBI, and Jeremiah O'Sullivan, a prosecutor in the Boston Organized Crime Strike Force. Morris Apr. 21, 1998 Tr. at 147-56.

The investigation focused on the payment of bribes to fix horse races by Howard Winter and his associates. See United States v. Winter, 663 F.2d 1120 (1st Cir. 1981). The key witness was Anthony Ciulla, who provided evidence that Bulger and Flemmi, among many others, participated in the race-fix scheme. Morris Apr. 21, 1998 Tr. at 112-14, 152. Bulger and Flemmi were aware of the investigation and were concerned about being indicted.

On January 27, 1978, Bulger was closed administratively as an informant because he was a primary subject of the race-fix investigation and might be indicted. Exs. 65, 68. Bulger was not informed that he had been administratively closed as an informant. Morris Apr. 22, 1998 Tr. at 66-67. Indeed, to have done so would have been inconsistent with the FBI's approach of trying to make Bulger and Flemmi feel they were colleagues rather than informants. In any event, Connolly continued his contact with Bulger and Flemmi, but did not document those contacts or the information they provided.

Among other things, Bulger and Connolly discussed the prospect that Bulger and Flemmi would be indicted. Bulger and Flemmi did not, of course, want to be charged. Connolly spoke to Morris. They agreed that they did not want to lose Bulger and Flemmi at a time when their services as informants were particularly important. Morris Apr. 22, 1998 Tr. at 57-58. Thus, after consulting Bulger, who received the concurrence of Flemmi, in about January 1979, Morris and Connolly met with O'Sullivan to discuss the situation. Morris Apr. 21, 1998 Tr. at 145-58; Flemmi Aug. 26, 1998 Tr. at 210, Aug. 28, 1998 Tr. at 59.

Morris and Connolly told O'Sullivan that Flemmi and Bulger were FBI informants. Morris Apr. 21, 1998 Tr. at 154-55. This disclosure to O'Sullivan violated FBI policy because it had not been authorized by FBI Headquarters. Id. at 159.

Nevertheless, Morris and Connolly told O'Sullivan that Bulger and Flemmi had the ability to continue to provide valuable assistance regarding the highest priority that the FBI and O'Sullivan shared -- combatting the LCN. Id. at 154. They emphasized that Bulger and Flemmi were "crucial" to the ambitious plan they and O'Sullivan were developing to bug 98 Prince Street, the headquarters of Gennaro Angiulo, then the leader of the LCN in Boston. Morris Apr. 27, 1998 Tr. at 67, 72.

Thus, Morris and Connolly asked O'Sullivan not to include Bulger and Flemmi in the forthcoming race-fix indictment. Morris Apr. 21, 1998 Tr. at 147, 154-55. O'Sullivan consulted Daly, and subsequently agreed not to charge Bulger and Flemmi in the race-fix case. Id. at 32.

Bulger told Flemmi that the discussions with O'Sullivan had been successful and that they would not be indicted. Flemmi Aug. 28, 1998 Tr. at 63, 65. Flemmi asked Bulger to have Connolly thank O'Sullivan for him. Flemmi Aug. 20, 1998 Tr. at 46, 51-52.

About a month later, a RICO indictment relating to the race-fix scheme was returned against thirteen defendants, including Winter, James Martorano, and John Martorano. Flemmi Aug. 28, 1998 Tr. at 63; Winter, 663 F.2d at 1124. Bulger and Flemmi were named as unindicted coconspirators. Morris Apr. 22, 1998 Tr. at 59. After a forty-six- day trial with Ciulla as the vital, "star witness," all of the defendants who had not pled guilty or fled were convicted. Winter, 663 F.2d at 1124, 1127, 1137.

Flemmi did not in 1979 claim that he had an enforceable agreement with the FBI that provided him immunity from prosecution in the race-fix case. Rather, he recognized that he could have been indicted. Thus, he was grateful that Connolly and Morris had persuaded O'Sullivan to exercise his discretion not to indict him in order to permit Flemmi to continue to provide valuable information concerning the LCN.

In May 1979, the FBI in Boston requested and received from the Director of the FBI approval to reopen Bulger as an informant. Exs. 66, 67, 68. Bulger was characterized as a source who had "provided consistently excellent information," Ex. 66, with the "demonstrated ability to produce information regarding the highest levels of organized crime." Ex. 68. The Director was reminded that Bulger had been closed because he had become a "principal subject" of the race-fix investigation. Id. The Director was told, however, that "no prosecutable case developed against [Bulger] in the opinion of the Strike Force Attorney handling the matter." This was not true. Rather, Bulger and Flemmi were not prosecuted in the race-fix case because Connolly, Morris, and O'Sullivan had decided that their value as informants outweighed the importance of prosecuting them. In any event, the Director was told that "Boston is of the opinion that [Bulger] has been, and will be once again, one of the most highly placed and valuable sources of this Division." Id.

At the time that the FBI officially reopened Bulger as an informant, Connolly and Morris were well-aware that he and Flemmi remained involved in a range of criminal activity, based on information being provided by other informants and statements made by Bulger and Flemmi themselves. The FBI neither investigated nor disclosed such information to any other law enforcement agency because Connolly and Morris were "very anxious" to continue to receive the "valuable" assistance of Bulger and Flemmi in the investigation of the Mafia to which Morris had by then dedicated every member of his Organized Crime squad. Morris Apr. 21, 1998 Tr. at 123-29.

For example, in July 1979, Morris received reports from informants that Bulger and Flemmi were "shaking down" independent bookmakers. Exs. 60, 63; Morris Apr. 22, 1998 Tr. at 28. In the instant case the alleged conspiracy to extort bookmakers, by Bulger, Flemmi and others, is alleged to have begun in 1979. See 4SI, Count 3. The FBI, however, made no effort to investigate this matter when it received information concerning it two decades ago. Morris Apr. 22, 1998 Tr. at 22-29.

Similarly, in 1979 and early 1980, the FBI received information from informants that Bulger and Flemmi were involved in other criminal activity, including illegal gambling and trafficking in cocaine. Exs. 63, 68. These allegations too were not investigated. Morris Apr. 21, 1998 Tr. at 123-29, Apr. 22, 1998 Tr. at 22-29.

In 1979, Bulger was providing Connolly with information concerning his own criminal activities and that of some of his associates. For example, in May 1979, Bulger described himself as a person who ran "the South Boston Irish Mafia" and identified several "extremely dangerous" people who were associated with him. Ex. 71. Bulger also related that his Winter Hill Gang and the LCN had agreed to change the illegal sports betting line. Ex. 40.

In addition, Bulger told Connolly that his associate John Martorano, who was a fugitive in the race-fix case, was in Miami, Florida. Ex. 41. Similarly, he reported that Joe Macdonald and Jimmy Sims, two of his other associates who were fugitives, would be back in Boston in a few days. Ex. 78. It was Morris' standard practice to review the 209s generated by members of his squad. Morris Apr. 29, 1998 Tr. at 8. There is no evidence, however, that the FBI made any effort to act on the information Bulger provided concerning himself or his associates.

Rather, in June or July 1979, Connolly, Bulger, Flemmi, and Gianturco met for the first time at Gianturco's home. Gianturco Jan. 15, 1998 Tr. at 88, 94. Meeting informants in an agent's home was highly unusual. Id. at 126-28. However, Bulger and Flemmi appeared to Gianturco to have a very friendly and trusting relationship with Connolly. Id. at 98-99. Gianturco felt comfortable with them because of the information they had given Connolly to help save his life. Id. at 93-95.

It appears that at this meeting Bulger and Flemmi provided information on the criminal activities of the Patriarca Family, Myles Connor, and others. Ex. 35. This meeting occurred at about the time that the race-fix case was being tried, suggesting that it may also have been, in part, a celebration of Connolly's success in keeping Bulger and Flemmi from being indicted.

In any event, Gianturco later became the alternate agent for Flemmi. Gianturco Jan. 15, 1998 Tr. at 102-03. There were a series of dinner meetings at Gianturco's home. Id. at 106. At some of those meetings gifts were exchanged. Id. at 105-06, Apr. 20, 1998 Tr. at 18-24. Gianturco, for example, received from Bulger and Flemmi a toy truck to commemorate Operation Lobster, a glass statue, and a leather briefcase. Id. Gianturco gave Bulger an Alcatraz belt buckle. Id. at 21. The June or July 1979 meeting, however, is the only one from which information provided by Bulger or Flemmi is reflected in the FBI's files. There is no record of the gifts.

In 1980, it became necessary for the FBI to provide Bulger and Flemmi more than passive protection in the form of not investigating them in order to preserve their potential to assist the FBI's plan to bug 98 Prince Street. In 1980, the FBI contributed to frustrating a Massachusetts State Police investigation of criminal activity of Bulger, Flemmi, and many others occurring at the Lancaster Street Garage, which was owned by Kaufman.

The Massachusetts State Police had determined that "virtually every organized crime figure in the metropolitan area of Boston, including both LCN and non-LCN (Winter Hill) organized crime figures frequented the premises and it was apparent that a considerable amount of illegal business was being conducted at the garage." Ex. 2. Flemmi and Bulger were among those targeted by the Massachusetts State Police. The Massachusetts State Police consulted O'Sullivan to discuss obtaining authority for electronic surveillance of the Garage. Id.; Ex. 3. The Massachusetts State Police insisted, however, that the FBI not be told about the plan because it believed that Flemmi and Bulger were informants, working with Morris, who might compromise the investigation if he knew about it. Ex. 2. Nevertheless, Morris discerned that the Massachusetts State Police was conducting electronic surveillance at the Lancaster Street Garage, in part because another FBI agent, James Knotts, had consulted him in an earnest effort to obtain information that could be used by the Massachusetts State Police to establish the probable cause necessary to obtain a warrant to bug that location. Morris Apr. 22, 1998 Tr. at 135-38.

The Massachusetts State Police installed a microphone in the Lancaster Street Garage on July 24, 1980. Ex. 2. It was "extremely productive" for about two weeks. Id. It then became evident to the Massachusetts State Police that the targets had been tipped off concerning the electronic surveillance. Id. The Massachusetts State Police suspected Morris had learned about the investigation and compromised it. Id.; Ex. 10.

The Massachusetts State Police's perception that its targets had been tipped off concerning the Lancaster Street Garage electronic surveillance was correct, although Morris may not have been involved. Flemmi initially received information about the bug, through an associate, John Naimovitch, a Massachusetts State Police Trooper. Flemmi Aug. 20, 1998 Tr. at 108-09, Aug. 25, 1998 Tr. at 242-45. Flemmi discussed this with Connolly. Flemmi claims that Connolly consulted Morris and O'Sullivan. Flemmi Aug. 20, 1998 Tr. at 104-08, Aug. 25, 1998 Tr. at 240-42. The court questions whether this is correct, particularly with regard to O'Sullivan. In any event, Connolly was somehow able to confirm for Flemmi and Bulger that the Lancaster Street Garage was bugged. Flemmi Aug. 20, 1998 Tr. at 103-05, Aug. 25, 1998 Tr. at 242-43. Flemmi and Bulger advised some of their associates, including Kaufman, and the discussion of criminal activity at the Lancaster Street Garage ceased. Ex. 9; Flemmi Aug. 26, 1998 Tr. at 93-94.

Realizing that the investigation of the Lancaster Street Garage had been compromised, Colonel O'Donovan, the head of the Massachusetts State Police, complained to the FBI and made it clear that the Massachusetts State Police was convinced that Bulger and Flemmi were FBI informants. Exs. 2, 9, 10. The fact that Bulger and Flemmi's status as FBI sources had been recognized and discussed in the context of a promising criminal investigation was a matter of concern for Sarhatt, who had recently became the SAC in Boston. Ex. 10. The situation had the potential to embarrass the FBI in several ways. First, a belief in the criminal community that Bulger and Flemmi were informants could have caused them to be killed, thus placing in doubt the FBI's ability to protect its sources. Second, Sarhatt recognized that Bulger and Flemmi might be prosecuted for committing serious crimes. Their prosecution would have raised within the FBI, and perhaps more widely, questions concerning the Bureau's decision to work with them rather than investigate them. Thus, Sarhatt wondered whether the FBI should target Bulger and Flemmi for investigation rather than continue them as sources. Sarhatt Jan. 7, 1998 Tr. at 60, 64-66. Finally, Sarhatt was concerned that it might be true that one of his agents had disclosed the Massachusetts State Police investigation to two of its targets. Exs. 2, 9. Sarhatt acted on each of these concerns.

Morris was questioned about whether he had contributed to compromising the Lancaster Street Garage investigation. In response, Morris gave Sarhatt false information about some of his activities and was cleared. Ex. 69; Morris Apr. 22, 1998 Tr. at 154-55, Apr. 23, 1998 Tr. at 38.

Sarhatt also considered whether the FBI should keep Bulger and Flemmi open as informants or target them for investigation. Sarhatt Jan. 7, 1998 Tr. at 60, 64-66. Connolly and Morris urged him to continue them as informants. Connolly wrote memoranda reviewing the history of exceptional service that Bulger and Flemmi had rendered as sources, which Morris endorsed and amplified. In addition, with regard to Flemmi, who had been reopened as an informant in September 1980, Exs. 7, 4, Connolly wrote on December 2, 1980, that:

Information from this source is currently being utilized in the preparation of an affidavit in support of a Title III application targeting [98 Prince Street], which is the highest priority organized crime investigation in Headquarters City [Washington, D.C.]. In addition to the Angiulo case, this informant is one of the two primary informants who will furnish the majority of probable cause for a Title III application targeting Illario Zannino (#2 man in the Boston LCN).

I concur with the observations and evaluations of SA Connolly, and recommend continued contacts with captioned source. This source is one of very few sources who can furnish information at the policymaking level of the LCN and has been consistently rated as very good by the reviewing Inspector. Continuing information from the informant is considered to be a critical factor in Boston's overall Organized Crime Program.

Connolly described in the same terms Bulger's importance to the affidavits being prepared to obtain electronic surveillance of 98 Prince Street and of Zannino. Ex. 5. Morris again agreed with Connolly and added that:

[Bulger] is one of the most highly placed and valuable informants in the Boston Division. [He] was last rated as excellent by the reviewing Inspector in 1976. The closing of an informant of this caliber would deal a serious blow to the [Organized Crime Program] of the Boston Division.

In essence, Connolly and Morris advised Sarhatt that Flemmi and Bulger were of vital importance to the plan to bug 98 Prince Street, in which the FBI had a great investment on which it hoped to capitalize imminently, and to the Boston Office's Organized Crime program generally. Thus, they felt strongly that Bulger and Flemmi should not be closed as informants.

Sarhatt also consulted O'Sullivan, who had become the Chief of the Boston Organized Crime Strike Force, with regard to whether Bulger should be continued as an informant. Ex. 3; Sarhatt Jan. 7, 1998 Tr. at 43-49. This was highly unusual because it involved identifying, or confirming the identity of, a confidential source to a prosecutor. O'Sullivan, however, was already aware that Bulger and Flemmi were informants, and also knew that the Massachusetts State Police had concluded that they were sources for the FBI. Exs. 2, 3. According to Sarhatt's memorandum, O'Sullivan urged him to continue Bulger as an informant. Ex. 3; Sarhatt Jan. 7, 1998 Tr. at 53. More specifically, Sarhatt wrote that O'Sullivan told him that:

it is crucial that the FBI continue this source [Bulger] inasmuch as the information he is currently furnishing is crucial to a Title III application of LCN members in Boston.

Mr. O'Sullivan stated that he did not feel there was any improper conduct on the part of the FBI by continuing the Informant relationship with [Bulger]. He stated that there was sufficient justification for continuing him regardless of his current activities to be able to eventually prosecute LCN members.

On November 25, 1980, Sarhatt also took the unusual step of meeting with Bulger himself as part of his effort to determine whether the FBI had compromised the Massachusetts State Police's Lancaster Street Garage investigation and whether Bulger and Flemmi should be continued as informants. Exs. 1, 87; Sarhatt Jan. 2, 1998 Tr. at 14. It was at this meeting that Bulger expressed his appreciation for Rico's courtesy and explained his warm feelings for Connolly, based on their common roots and shared "deep hatred for La Cosa Nostra." Ex. 1. At this meeting, Bulger also falsely claimed that he had not been given any information about the Lancaster Street Garage investigation by the FBI. Id. In doing so, Bulger was protecting Connolly.

Sarhatt was also interested in confirming that Bulger understood that the Massachusetts State Police was "fully aware of his Informant role with the FBI" and "his life could be in danger," and in documenting Bulger's response. Id. Sarhatt recorded that Bulger acknowledged that his status as an FBI informant was being widely discussed, but said that:

[Bulger] was not concerned with his personal safety because no one would dare believe that he is an informant. It would be too incredible. Notwithstanding this notoriety, he indicated . . . that he wants to continue the relationship with the FBI.

Ex. 1. This echoed what Bulger and Flemmi had previously told Connolly. Ex. 10. In essence, Bulger explained to Sarhatt that he was confident that the idea of a partnership between the FBI and a criminal of his stature was too extraordinary to be believed.

Bulger included in his interview high praise for the FBI. As Sarhatt recorded it, Bulger said:

With respect to his association with Colonel O'Donovan . . . he has met him on some occasions especially one in which he made very disparaging and derogatory statements about the professionalism of FBI personnel to which he took great umbrage, inasmuch as his association with the FBI has been nothing but the most professional in every respect.

Thus, with the encouragement of Bulger, O'Sullivan, Morris, and Connolly, Sarhatt in December 1980 decided to continue Bulger and Flemmi as informants, rather than target them for investigation, and to review their status again after March 30, 1981. Exs. 5, 8.

In November and December 1980, when Sarhatt was considering whether to continue Bulger and Flemmi as informants, Connolly and Morris had substantial reason to appreciate what Bulger and Flemmi had contributed to their work, and compelling cause to want to avoid any change in their status. For example, in the midst of the Lancaster Street Garage controversy, on September 11, 1980, Flemmi told Connolly that the Patriarca Family had been quietly making new members, including Salemme and Vincent Ferrara. Ex. 237, (209 dated 9/11/80). The next day, Flemmi was reopened as an informant because his "past legal problems [had] been resolved" and he had been "recontacted and has provided information of value and continues to be in a position to do so in the future." Ex. 4; see also Ex. 82. In the next month Flemmi gave Connolly Jack Salemme's telephone numbers, Ex. 237 (209 dated 9/23/80), and information relating to the murder of federal Judge James Wood. Exs. 8, 231.

Most significantly, however, Flemmi and Bulger had by December 1980 made a critical contribution to the effort to bug 98 Prince Street. In October 1980, Morris and Connolly gave Bulger and Flemmi an assignment. Morris Apr. 20, 1997 Tr. at 12, Apr. 27, 1998 Tr. at 11-12. Bulger and Flemmi were told that the FBI wanted to bug 98 Prince Street. Flemmi Aug. 20, 1998 Tr. at 125-26, Aug. 26, 1998 Tr. at 178-79; Morris Apr. 28, 1998 Tr. at 104-05. Morris and Connolly asked Bulger and Flemmi to obtain information that was important to the feasibility of that effort. They asked them to go to 98 Prince Street, look carefully at the premises, and provide the FBI everything possible concerning the doors, locks, and any security devices. Morris Apr. 27, 1998 Tr. at 11-13; Flemmi Aug. 26, 1998 Tr. at 126.

Bulger and Flemmi expressed two concerns when confronted with the request. Bulger particularly was reluctant to go to 98 Prince Street because he did not trust the LCN and was afraid he and Flemmi might be killed. Morris Apr. 21, 1998 Tr. at 29-30, Apr. 24, 1998 Tr. at 43-45. See also Ex. 78. Morris and Connolly felt this

fear was well-founded. Flemmi Aug. 20, 1998 Tr. at 43. Indeed, in about December 1980, Morris played for Bulger and Flemmi a tape of still undetermined origin on which Zannino and another member of the Patriarca Family, Domenic Isabella, discussed looking for the right opportunity to kill Flemmi and Bulger. Flemmi Aug. 20, 1998 Tr. at 52-55.

Flemmi expressed another concern. He recognized that if 98 Prince Street were bugged, discussion of some of his and Bulger's criminal activity was likely to be intercepted. Flemmi Aug. 26, 1998 Tr. at 184-86, 189-91, Aug. 20, 1998 Tr. at 43-45. Flemmi wanted to know what would be done with any such evidence. Id. Morris and Connolly assured Bulger and Flemmi that the 98 Prince Street tapes would not be a problem for them. Id. They would be protected for any thing picked up on those tapes, rather than prosecuted. Id. Thus, Flemmi understood that nothing on the tapes would be used against him. Flemmi Aug. 26, 1998 Tr. at 189-90.⁽³⁶⁾ That understanding was reasonable. In addition, but for the assurance received from Morris and Connolly, Flemmi and Bulger would not have assisted the FBI in its effort to bug 98 Prince Street.

With this assurance, Flemmi and Bulger went to 98 Prince Street. They returned with the information that the FBI had requested, including a diagram of the premises. Ring June 11, 1998 Tr. at 135-36. The subsequent bugging of 98 Prince Street, which was generally viewed as a virtually impenetrable location, was considered a remarkable technical feat for the FBI. Bulger and Flemmi made a unique contribution to that achievement.

On January 9, 1981, the government applied for, and received, a warrant to bug 98 Prince Street. Aff. of Paul E. Coffey, Apr. 9, 1997 ("Coffey Aff., Apr. 9, 1997"), ¶ 3A. Bulger and Flemmi were two of the sources whose information was used to establish the legally required probable cause. Id. Information that they provided was also included in some, but not all, of the periodic requests for extensions. Id. In addition, Bulger was a source whose information was used to get a warrant to bug Zannino's premises at 51 North Margin Street. Id.

Bulger and Flemmi were told when the bug had been installed in January and when it was removed in April 1981. Flemmi Aug. 20, 1998 Tr. at 126-27; Morris Apr. 28, 1998 Tr. at 105-06. Accordingly, neither of them went to 98 Prince Street when it was bugged. Thus, neither was recorded on the 98 Prince Street tapes.

It was highly irregular for sources to be told why the FBI was requesting certain information or that a particular location was being electronically monitored. FBI agents are generally instructed that: "Care must be exercised in handling informants to ensure that they are provided no information other than that necessary to carry out their assignments." Ex. 274 (Under Seal), Manual § 137-5(10) (3-28-84). As Ring explained, criminal sources may be very helpful, but are usually regarded as not completely trustworthy. Ring June 10, 1998 Tr. at 68-69. Thus, it is generally unduly risky to tell them about the FBI's intentions or activities. Id.

Connolly and Morris, however, had full faith in Flemmi and Bulger. Morris Apr. 28, 1998 Tr. at 105-06, Apr. 27, 1998 Tr. at 14. They were confident that their sources would not betray them. Id. Thus, they treated Bulger and Flemmi as colleagues rather than informants in explaining the FBI's plan to bug 98 Prince Street and letting them know when the electronic surveillance was operating.

Indeed, in about January 1981, Flemmi, Bulger, Connolly, and Morris gathered in Morris' home in Lexington, Massachusetts for what Flemmi characterized as a belated Christmas celebration. Flemmi Aug. 20, 1998 Tr. at 55-56. The timing of this first meeting at Morris' home suggests it may also have been a celebration of the successful bugging of 98 Prince Street. In any event, Bulger and Flemmi brought wine and a champagne bucket for Morris. Id. Morris reciprocated by giving Flemmi, a Korean War veteran, a painting from Korea. Id.

As described earlier, in December 1980, when Sarhatt authorized Morris and Connolly to continue Bulger and Flemmi as informants, rather than target them for investigation, he planned to reevaluate Bulger and Flemmi's status after March 30, 1981. Exs. 5, 8. He subsequently had his new ASAC, Robert Fitzpatrick, who had come to Boston in January 1981, meet with Bulger to assist in that assessment. Fitzpatrick Apr. 17, 1998 Tr. at 47-49, 59. Fitzpatrick testified that he had misgivings about continuing Bulger and Flemmi as informants. More specifically, he stated that he was concerned that Bulger and Flemmi were not being sufficiently productive, and were engaged in serious crime, including crimes of violence and collecting "tribute" from drug traffickers. Fitzpatrick Apr. 17, 1998 Tr. at 53-59. There is no written record indicating that Fitzpatrick ever expressed such concerns to Sarhatt, however.

In any event, in memoranda dated April 1, 1981, Connolly and Morris strongly urged that Bulger and Flemmi be continued as informants based on their invaluable contributions to the bugging of 98 Prince Street and 51 North Margin Street, and their potential to assist in the development of cases those tapes might generate and other organized crime matters. Exs. 50, 51. More specifically, with regard to Flemmi, Morris wrote that:

information provided by this informant has been utilized in six successful affidavits in support of six applications for court authorized electronic surveillance pursuant to the provisions of Title III. These affidavits are in connection with two of the highest priority organized crime matters under investigation in the Boston Division. One of these two cases, [98 Prince Street] is one of the highest priority organized crime cases in the FBI today and involves what has been characterized by [FBI Headquarters] officials as one of the most important and successful Title IIIs to have been conducted by the FBI in the past ten years.

a highly placed and valuable informant. Informants such as [Bulger and Flemmi] take years to develop and form the nucleus of any viable long range Organized Crime Program. [Each] informant should not only continue to be contacted but in fact targeted for ever increasing productivity.

Fitzpatrick reviewed and initialed each memorandum without dissent. Sarhatt agreed to continue Bulger and Flemmi as informants. Exs. 50, 51.

Bulger and Flemmi quickly validated Morris and Connolly's assessment of their potential to continue to contribute to the FBI's organized crime efforts. For example, in April or May 1981, Morris arranged to meet Bulger and Flemmi at the Hotel Colonnade. Flemmi Aug. 20, 1998 Tr. at 60-63. Morris played for them a tape of a conversation intercepted at 98 Prince Street on which Angiulo and Zannino discussed killing their associate Nick Gizo's girlfriend, Liz McDonough. Id.; Ex. 210; Morris Apr. 27, 1998 Tr. at 104-05. Morris asked for Bulger and Flemmi's assessment of the threat. Flemmi Aug. 20, 1998 Tr. at 63. Flemmi said that he felt the threat was real. Id.

In the course of this meeting, the three drank wine. Id. Morris had so much that Bulger decided to drive him home. Id. Flemmi kept the tape. Id.; Ex. 210. Subsequently, Bulger and Flemmi began referring to Morris as "Vino." Flemmi Aug. 20, 1998 Tr. at 63.

In addition to assisting with interpreting the tapes, Flemmi promptly provided the FBI valuable assistance in its ongoing effort to develop a strong case against Angiulo and his associates. Among other things, Flemmi told the FBI that the LCN believed Angiulo's office had been bugged. Ex. 237 (209 dated 5/14/81). He also identified an individual Flemmi felt would testify against Angiulo if targeted by the FBI. Id. (209 dated 5/14/81). In addition, Flemmi reported on meetings he had with Angiulo at 98 Prince Street and elsewhere. Id. (209 dated 9/18/81); Ex. 79.

Flemmi also advised the FBI that: the LCN planned to murder several suspected informants, Ex. 237 (209 dated 12/15/81); Joe Russo, who was "on the lam," had returned to visit Zannino, id. (209 dated 7/12/82); and the FBI agents and Strike Force attorneys preparing the Angiulo case should be alert to possible violence against them. Id. All of this information was highly valued by the FBI as it prepared the Angiulo case.

Bulger and Flemmi also gave the FBI information concerning the drug dealing of Salvatore Michael Caruana and his claim to have been closely connected with Patriarca. Ex. 223. In addition, they reported on the unsolved Blackfriar's murder case. Ex. 7.

Without any apparent concern that the information would be used against him or his associates, Bulger told the FBI about the $200,000 his Winter Hill Gang borrowed from the Angiulos to deal with the financial difficulties they were having due to illegal gambling losses. Ex. 73. Bulger also reported on some of the activities of his Winter Hill associates. Ex. 127.

At the same time the FBI was receiving, but not investigating, reports from informants regarded as reliable concerning criminal activity in which Bulger and Flemmi were engaged. For example, in 1981 and 1982, the FBI was told that Bulger and Flemmi were involved in cocaine distribution with Brian Halloran. Exs. 88, 89. The Bureau was also advised that bookmakers were required to pay Bulger and Flemmi to operate in South Boston. Exs. 89, 91. These allegations were not investigated by the FBI. Rather, with regard to Flemmi's reported drug activity, Connolly wrote that "source's contacts, at my direction, with individuals thought to possess information regarding [Judge Wood's] murder, may have resulted in the false belief that source is involved in narcotics." Ex. 8.

A serious threat to the ability of the Boston office of the FBI to continue to benefit from Bulger and Flemmi as sources arose on March 27, 1981, when Roger Wheeler was murdered in Tulsa, Oklahoma. Based on descriptions provided by witnesses, Bulger, Flemmi, and John Martorano, who was a fugitive, became prime suspects. The FBI in Boston, however, succeeded in keeping agents from other offices and local law enforcement officials from speaking to Bulger and Flemmi. In addition, when Brian Halloran became a potential witness against Bulger and Flemmi in the Wheeler homicide investigation, Morris told Connolly. As Morris anticipated, Connolly told Bulger and Flemmi. Several weeks later Halloran was murdered.

Wheeler owned World Jai Lai, which had facilities, known as "frontons," in Florida and Connecticut, where it was legal to gamble on Jai Lai matches. Initially, Callahan, an accountant and associate of Halloran's, was the President of the business. Morris Apr. 27, 1998 Tr. at 127-28. Rico, who had retired from the FBI in 1975, served as its Director of Security.

Wheeler suspected that Callahan was skimming money from World Jai Lai for members of the Winter Hill Gang, including Halloran, Bulger, and Flemmi. Morris Apr. 27, 1998 Tr. at 128. Thus, he fired Callahan, put some of his own people in key positions, and began an audit. Id. Before it was concluded, however, Wheeler was shot and killed as he left his golf club in Tulsa. Sketches prepared on the basis of descriptions provided by witnesses, among other things, caused the FBI and others to suspect that Bulger had murdered Wheeler. Fitzpatrick Apr. 16, 1998 Tr. at 96, 114, Apr. 17, 1998 Tr. at 42-43, 175-76. Flemmi was also a suspect. Ex. 55. In addition, it was believed that John Martorano may have been involved.

The FBI in Oklahoma City was interested in exploring Callahan's relationship with Halloran, and in investigating Bulger and Flemmi. Morris Apr. 27, 1998 Tr. at 127. The FBI's Boston Organized Crime squad opened an investigation to support Oklahoma City's effort to solve the Wheeler murder. Morris Apr. 27, 1998 Tr. at 120. See also Aff. of Special Agent Stanley Moody, Apr. 29, 1998 ("Moody Aff., Apr. 29, 1998"). In 1981, at Morris' request, Connolly interviewed Callahan as part of that investigation. Morris Apr. 27, 1998 Tr. at 127-30. The Boston investigation was then quickly closed. Id.

In January 1982, Halloran, who was facing a state murder charge, began to cooperate with the FBI in Boston. Morris Apr. 24, 1998 Tr. at 78, Apr. 27, 1998 Tr. at 115. Special Agents Leo Brunnick and Gerald Montanari, two members of the Boston FBI's Labor and Racketeering squad, were assigned to work with Halloran. Morris Apr. 24, 1998 Tr. at 78, Apr. 27, 1998 Tr. at 112-13. Among other things, Halloran told Brunnick and Montanari that he had met Bulger and Flemmi at Callahan's apartment and was asked if he was willing to murder Wheeler. Morris Apr. 22, 1998 Tr. at 112, Apr. 27, 1998 Tr. at 114.

Brunnick consulted Morris, as the supervisor of the Organized Crime squad, to get his assessment of Halloran's reliability as a potential witness. Id. at 78-80. Brunnick told Morris about Halloran's allegations concerning Bulger and Flemmi. Morris Apr. 24, 1998 Tr. at 83, Apr. 27, 1998 Tr. at 113-14, 127, 130. Morris realized that Halloran's allegations threatened their futures as FBI informants, among other things, because it was the Bureau's practice to close sources that it was investigating. Morris Apr. 24, 1998 Tr. at 74-77. Morris and Connolly did not want to lose their prize sources, who were important to their investigations, and to their own status and future careers in the FBI. Id. Morris told Brunnick that Halloran was untrustworthy and unstable, and would not be a believable witness. Id. at 78-83.

The FBI in Oklahoma City had expressed interest in Halloran. Id. at 87. However, no evidence was introduced indicating that any of its agents were informed of Halloran's discussions with the FBI in Boston.

Morris, however, told Connolly that Halloran was speaking with Brunnick and Montanari, and of the information he was providing about Bulger and Flemmi. Id. at 79, 87-88, Apr. 22, 1998 Tr. at 112, 118. Morris expected that Connolly would tell Bulger and Flemmi about Halloran's charges. Morris Apr. 22, 1998 Tr. at 112-13, 117. Morris knew that doing so would endanger Halloran. Morris Apr. 24, 1998 Tr. at 92. Connolly told Bulger and Flemmi about Halloran's cooperation and claims. Morris Apr. 22, 1998 Tr. at 115-16, 118; Flemmi Aug. 20, 1998 Tr. at 20-21 (Lobby, Under Seal), Aug. 26, 1998 Tr. at 81-84, Sept. 1, 1998 Tr. at 88-90; Boeri May 15, 1998 Tr. at 73, May 18, 1998 Tr. at 69-77; Ex. 41.

In early May 1982, the FBI denied Halloran's request to be placed in the Witness Protection Program and told him that his relationship with the FBI was terminated. Morris Apr. 30, 1998 Tr. at 8. See also Aff. of Supervisory Special Agent William Chase, Apr. 29, 1998 ("Chase Aff., Apr. 29, 1998). On May 11, 1982, Halloran was murdered as he emerged from a restaurant in South Boston. No one has ever been convicted of that murder. Morris, however, believed that Bulger and Flemmi were responsible. The next time that Morris asked Connolly to tip Flemmi off to an investigation, he added that he "did not want another Halloran" -- meaning another murder. Morris Apr. 22, 1998 Tr. at 121.

Morris did not, however, hesitate to capitalize on the extraordinary disclosure of highly confidential information that he had caused Connolly to make to Bulger and Flemmi. At some point prior to Halloran's murder Connolly had told Morris that Bulger and Flemmi "really liked him," and hoped that Morris would let them know if he ever needed anything. Morris Apr. 23, 1998 Tr. at 135-36, 140, Apr. 24, 1998 Tr. at 97-99. Several weeks after Halloran's murder Morris was sent to Glencoe, Georgia for drug training. Ex. 240. At that time, although married, Morris was romantically involved with his secretary. Id.; Deborah Morris Sept. 22, 1999 Tr. at 148.

While in Georgia, Morris decided that he would enjoy a visit from her. Morris Apr. 23, 1998 Tr. at 136. Recalling the offer communicated through Connolly, he asked Connolly if Bulger and Flemmi would provide the funds necessary to buy his secretary a plane ticket. Id. at 136, 139.

Connolly subsequently gave Morris' secretary an envelope containing $1000 cash, which Morris understood had come from Bulger and Flemmi. Id.; Deborah Morris Sept. 22, 1998 Tr. at 150. Flemmi denies that this payment was made. Flemmi Aug. 26, 1998 Tr. at 104-05. Nevertheless, the court finds that Morris' understanding was correct. Connolly, however, told the secretary that Morris had saved the money and wanted her to use it to visit him in Georgia. Morris Apr. 23, 1998 Tr. at 136-37; Deborah Morris Sept. 22, 1998 Tr. at 150-51. She took the money and made the trip. Id.

Morris knew that the fact that Bulger and Flemmi had been told by Connolly of Halloran's effort to cooperate with the FBI would be relevant to any investigation of Halloran's murder, but he never provided this information to anyone in the FBI. Morris Apr. 24, 1998 Tr. at 94-97. Nor did he tell the Suffolk County District Attorney's Office, which conducted an investigation and obtained an indictment, but not a conviction, of Jimmy Flynn for the Halloran murder. Id.

The Halloran murder presented a dilemma for the FBI. It precipitated a May 25, 1982 meeting at FBI Headquarters to grapple with Bulger and Flemmi's dual status as valuable FBI informants and also suspects in the investigations of the Wheeler and Halloran murders. Ex. 54; Fitzpatrick Apr. 16, 1998 Tr. at 94-102, Apr. 17, 1998 Tr. at 179. Representatives of the FBI offices in Boston, Oklahoma City, and Miami met with FBI Headquarters officials, including Sean McWeeney, Chief of the Organized Crime Section, and Jeff Jamar, the Informant Coordinator. Id.

At the May 25, 1982 meeting, the Miami, Oklahoma City, and Boston offices of the FBI agreed to coordinate their investigations of the Wheeler and Halloran homicides. Ex. 54. It was also agreed that O'Sullivan, as the Organized Crime Strike Force Chief in Boston, and the United States Attorney in Oklahoma would discuss where any grand jury investigation should be conducted. Id.; Fitzpatrick Apr. 16, 1998 Tr. at 90, Apr. 17, 1998 Tr. at 181.

In addition, a decision was made to keep Bulger and Flemmi open as sources unless and until "substantiated information" implicating them in the murders was received. Ex. 54; Fitzpatrick Apr. 17, 1998 Tr. at 180. It does not appear that there was any discussion of whether Bulger and Flemmi had immunity that would protect them from possible prosecution for the Wheeler or Halloran murders. Nor does it appear that the implications of the Attorney General's Guidelines concerning informants were considered. More specifically, there was evidently no discussion of whether local law enforcement authorities in Boston or Oklahoma, which were conducting investigations, should be advised of the information Halloran had provided concerning Bulger and Flemmi or of whether the Assistant Attorney General should have been consulted.

On August 4, 1982, the body of John Callahan was found in the trunk of his car in Miami, Florida. Apr. 17, 1998 Tr. at 184. He had evidently been dead for several weeks.

On September 23, 1982, Flemmi was administratively closed as an informant. Ex. 83. Connolly and Morris told FBI Headquarters that they were closing Flemmi because he was being targeted for possible prosecution in the 98 Prince Street and 51 North Margin investigations. Id.; Morris Apr. 28, 1998 Tr. at 15-20. This was not true. Morris Apr. 28, 1998 Tr. at 20; Ring June 10, 1998 Tr. at 40.

As in the past, Flemmi was not told he had been administratively closed as a source. Morris Apr. 28, 1998 Tr. at 23; Flemmi Aug. 29, 1998 Tr. at 33. In any event, Flemmi continued to provide information regularly to the FBI. Exs. 224, 265. Indeed, the records reflect forty-six contacts between Flemmi and the FBI between February 1983 and May 1986, a period when Flemmi was administratively closed as a source. Id. There was no diminution in Bulger's official status as an informant. Rather, as discussed infra, in February 1983, Bulger was elevated to Top Echelon status. Ex. 11.

Nevertheless, Montanari attempted to investigate whether Bulger and/or Flemmi played a role in the Wheeler homicide and related matters. Pursuant to standard practice, the files of his investigation were kept in an area that was accessible to other agents. Montanari, however, suspected that Connolly was surreptitiously reviewing those files and furnishing information about his investigation to Bulger and Flemmi. Fitzpatrick Apr. 16, 1998 Tr. at 103-05, Apr. 17, 1998 Tr. at 191-92. He complained to Fitzpatrick, who was sufficiently concerned that he locked the files in his own office. Id.

While Fitzpatrick secured the files in an effort to keep the information Montanari was developing away from Connolly, he did not want anyone outside of the Boston office of the FBI to have access to Bulger and Flemmi. In April 1983, the FBI in Oklahoma City sought authority from the Director of the FBI to interview Bulger and Flemmi. Ex. 53. Fitzpatrick strongly and successfully opposed this request. Id.; Fitzpatrick Apr. 17, 1998 Tr. at 184-86. In doing so, Fitzpatrick claimed that he had interviewed Bulger concerning the Wheeler and Callahan murders, and that Bulger had denied being involved. Id. As Fitzpatrick testified, this was not true. Fitzpatrick Apr. 17, 1998 Tr. at 47, 184-86. Fitzpatrick had never questioned Bulger on these subjects. Id. at 184-86. Although he himself did not trust Connolly fully, Fitzpatrick also argued that Oklahoma City should not be allowed to interview Bulger and Flemmi in part because Connolly was in continual contact with them and was disseminating all relevant information that he received regarding the Wheeler and Callahan murders. Id.; Ex. 53. In essence, the Boston office of the FBI was determined to control the information, and therefore the decisions to be made, concerning its prize informants.

In May 1983, shortly after Fitzpatrick prevented FBI agents from Oklahoma City from interviewing Bulger and Flemmi, Connolly urged the SAC to reopen Flemmi as an informant because he was continuing "to voluntarily furnish sensitive information of an extremely high quality." Ex. 55. Thus, Connolly argued that if Flemmi was not going to be indicted imminently as a result of the Wheeler, Callahan, or 98 Prince Street investigations, he should be restored to Top Echelon informant status. Id. The timing of this memorandum suggests that it may have been, in part, an attempt by Connolly to determine whether there was a threat that Flemmi would soon be charged as a result of the Halloran and Callahan murder investigations.

The FBI in Boston did not, however, immediately act on Connolly's request. Rather, Ring, the new supervisor of the Organized Crime squad, ordered that Bulger and Flemmi come in to the Boston office to be photographed, as requested by the FBI in Oklahoma, and to be interviewed by Montanari. Ring June 18, 1998 Tr. at 46-48. Ring told Montanari, however, that he did not want to be told anything about the progress of his investigation, but when it was concluded he hoped Montanari would give him his opinion on whether Bulger and Flemmi were involved in the Wheeler and Callahan murders. Ring June 18, 1998 Tr. at 48.

Although Connolly resisted Ring's request by claiming that he did not believe that Bulger and Flemmi were involved in the homicides, Ring did not relent. Id. at 52-53. As a result, in November 1983, Bulger and Flemmi were interviewed together by Montaneri and Brendan Cleary. Id.; Exs. 75 (Under Seal), 227.

It was highly unusual for two subjects of an investigation to be interviewed together. Bulger and Flemmi denied any involvement in the Wheeler and Callahan murders. Exs. 75 (Under Seal), 227. They refused, however, to take a polygraph examination and objected to being photographed. Id. Ring recalls that the FBI did photograph them. Ring June 10, 1998 Tr. at 50. No such photographs, however, were produced in discovery or introduced as evidence.

No one has ever been charged with committing the Wheeler and Callahan murders. Officially, those investigations remain open. The FBI in Boston, however, departed from the Bureau's standard procedures to render the information that it had received from Halloran regarding Bulger and Flemmi virtually inaccessible to others who might wish to review or evaluate it.

More specifically, in 1982 and 1983, FBI reports containing allegations against an individual were to be indexed by that individual's name and placed in an investigative file. See Moody Aff., Apr. 29, 1998, ¶ 5. With one exception, however, the many reports containing Halloran's charges against Bulger and Flemmi were not properly indexed with a reference to their names. Id. at ¶ 5-6; Apr. 17, 1998 Tr. at 8, Apr. 24, 1998 Tr. at 20-21, Apr. 30, 1998 Tr. at 4-10. Thus, these documents were not found or considered by the Department of Justice officials who were assigned, in July 1997, as a result of this case to review allegations that had been made by informants and witnesses against Bulger and Flemmi. See Chase Aff., Apr. 29, 1998.

Nor, when found by the Boston office of the FBI, were the documents promptly produced to the defendants as required by this Court's June 26, 1997 Order and other rulings. June 26, 1997 Order, ¶ 4(c); Moody Aff., Apr. 29, 1998; May 5, 1998 Tr. at 2-12 (Lobby, Under Seal). If the documents had been produced in a timely manner, Rico and Morris could have been questioned about them. None of the documents, however, were provided to the defendants at the time Rico testified in January 1998. In addition, some documents relating to Halloran's charges against Flemmi and Bulger that should have been produced in connection with Morris' appearance were not disclosed until his lengthy testimony was complete. However, Special Agent Moody, who had found the Halloran documents, had provided them long before to Boston ASAC Mike Wolf and SAC Barry Mawn to review because the information that they contained "was obviously highly singular and sensitive." Moody Aff., Apr. 29, 1998, ¶ 4, Aff. of Special Agent Stanley Moody, May 5, 1998 ("Moody Aff., May 5, 1998"), ¶ 2; May 1, 1998 Tr. at 3-8.

Both Flemmi and the government had reasons to hope that Halloran's allegations against Flemmi and Bulger would not be fully exposed or resolved in this case. From Flemmi's perspective, a thorough exploration of the Halloran charges might prove that he participated in murder. From the FBI's perspective, exposure of its agents' conduct had the foreseeable potential to reveal an extraordinary effort to protect Bulger and Flemmi that involved serious impropriety, if not illegality. In any event, neither Morris nor Rico was recalled as a witness.

As a result of the delayed disclosure of the Halloran documents by the government and of the failure of the adversary system to operate fully and effectively on this issue, questions remain regarding the role, if any, played by Flemmi and Bulger in the Wheeler, Halloran, and Callahan murders, and the full degree to which the FBI in Boston has, from 1981 until recently, attempted to keep any such role from being discerned and demonstrated.

Halloran was not the only informant that the FBI identified for Bulger and Flemmi. Flemmi Aug. 20, 1998 Tr. at 16-17, 134-36, Aug. 20, 1998 Tr. at 2-23 (Lobby, Under Seal). Rico disclosed the identity of several informants to Flemmi. Flemmi Aug. 20, 1998 Tr. at 14-21 (Lobby, Under Seal). Connolly identified for Bulger and Flemmi at least a dozen individuals who were either FBI informants or sources for other law enforcement agencies. Flemmi Aug. 20, 1998 Tr. at 2-23 (Lobby, Under Seal). These disclosures were usually made so that Bulger and Flemmi could avoid making any unnecessary, incriminating statements to other informants. Flemmi Aug. 20, 1998 Tr. at 16-17, Aug. 20, 1998 Tr. at 10-11 (Lobby, Under Seal).

The evidence raises a question of whether Connolly also told Bulger and Flemmi about John McIntyre, who was providing information about them and their associates, and who disappeared about six weeks after the FBI learned of his allegations. This question cannot, however, be resolved on the present record, in part because of the delayed disclosure of documents by the government and in part because, as with Halloran, it evidently was not in either the interest of Flemmi or of the FBI to have this issue fully developed in this case.⁽³⁷⁾

In mid-October 1984, McIntyre began cooperating with Richard Bergeron of the Quincy Police Department. Bergeron June 4, 1998 Tr. at 24-26. McIntyre reported, among other things, that he worked for Joseph Murray, initially in drug dealing. Id.; Ex. 257. McIntyre also revealed that he was the engineer on a ship named the Valhalla, which had been used in an attempt to deliver guns and ammunition from Massachusetts to the Irish Republican Army (the "IRA") in Ireland. Bergeron June 2, 1998 Tr. at 113-24, June 4, 1998 Tr. at 24-26. McIntyre said that Murray secretly owned the Valhalla. Bergeron June 2, 1998 Tr. at 115. McIntyre also explained that Murray was closely connected to Bulger and that Bulger, through his associates Kevin Weeks and Patrick Nee, was involved in the Valhalla arms shipment. Bergeron June 2, 1998 Tr. at 117-18, 123, June 4, 1998 Tr. at 17-18, 24-25. Flemmi was also mentioned. Bergeron June 2, 1998 Tr. at 116, June 4, 1998 Tr. at 128.

McIntyre was willing to cooperate with law enforcement, but seemed to Bergeron to be too "petrified" of the people that he was discussing to be a potential witness whose cooperation would be publicly disclosed. Bergeron June 4, 1998 Tr. at 25, 35-36. Bergeron realized that the information McIntyre was providing would be significant to several federal law enforcement agencies. Id. at 24-25. Thus, he immediately arranged for agents of the DEA and the United States Customs Service ("Customs") to participate in the debriefing of McIntyre.

In addition, Bergeron told FBI Special Agent Roderick Kennedy that McIntyre was cooperating and, among other things, of McIntyre's charges against Bulger and his associates. Bergeron June 2, 1998 Tr. at 113, 116, June 4, 1998 Tr. at 25, 28. Kennedy was the FBI's operational liaison with other agencies concerning narcotics matters.

At the time Bergeron contacted him, Kennedy knew that Bulger and Flemmi were Connolly's informants. Kennedy Apr. 14, 1998 Tr. at 26, 115-16, 121, 144. In fact, in 1983, Connolly told Kennedy that Bulger had disclosed that he had extorted $60,000-$90,000 in "rent" from Murray because Murray was storing marijuana in a warehouse in South Boston, which was part of Bulger's territory. Id. at 62-63, 79, 115, 121-29.

Kennedy had participated with the DEA in a raid of that warehouse. Id. at 100-15. Kennedy did not, however, share the information he received from Connolly with the DEA, with which he was conducting an ongoing joint investigation, or with the prosecutors working on the case. Id. at 111-14, 121-29, 130-32. Nor did he use that information in any of the FBI's independent efforts. Id. at 133-34.

Kennedy knew that Connolly expected confidentiality concerning the information Bulger had provided. Id. at 123. Like his colleagues going back to Rico, Kennedy understood implicitly that an informant's statements could not properly be used against him. In any event, Kennedy was willing to subordinate the interests of investigations in which he was involved to the interest that Connolly and the FBI had in Bulger and Flemmi as sources.

Although he did not disclose that Bulger and Flemmi were FBI informants, Kennedy, with a Customs Agent, interviewed McIntyre on October 17, 1984. Exs. 257, 258. With regard to drugs, McIntyre told Kennedy that "an individual named WHITEY who operates a liquor store in South Boston [had become] partners with JOE MURRAY." Ex. 257. Kennedy recognized this as a reference to Bulger who, as discussed in § II.15, infra, was at that time an owner of the South Boston Liquor Mart. McIntyre also recounted the story of the Valhalla, including the role of Bulger's associate Patrick Nee, who had traveled to Ireland to meet the shipment of guns. Ex. 258. Kennedy reported the information that he received from McIntyre to the SAC. Exs. 257, 258.

It is not clear whether Kennedy also discussed McIntyre's charges with Connolly. The reports of his interview with McIntyre, Exs. 257, 258, were not, as required by the court's June 26, 1998 and December 27, 1998 Orders, and the government's practice concerning "Jencks" materials, produced before Kennedy testified. June 5, 1998 Tr. at 4-5, June 22, 1998 Tr. at 117-19, Oct. 23, 1998 Tr. at 113-20. Rather, the documents were produced only after the court ordered that the FBI search for them. June 2, 1998 Tr. at 134-35. No party recalled Kennedy to testify about the McIntyre matter or questioned him concerning it when the court directed that he appear to be interrogated concerning Raymond Slinger, as described infra.

Kennedy had earlier acknowledged, however, that he and Connolly often exchanged information. Kennedy Apr. 14, 1998 Tr. at 26. In addition, the evidence concerning Murray's warehouse and the Slinger matter indicate that Kennedy on other occasions participated in protecting Bulger and Flemmi from investigation and possible prosecution. Thus, there is circumstantial evidence to suggest that Kennedy may have told Connolly about McIntyre's cooperation and claims and, in view the Halloran matter, reason to be concerned that Connolly may have told Bulger and Flemmi. These issues cannot, however, be resolved on the present record.

In any event, despite the obvious potential for McIntyre's cooperation to result in several significant, if not sensational, cases, no evidence has been presented that the FBI conducted any investigation based on McIntyre's charges concerning Bulger and Flemmi, or discussed with DEA or Customs deferring to any investigation that they might conduct. Bergeron June 2, 1998 Tr. at 133-34. Several years later, there was a prosecution of a number of people involved with the Valhalla. Reilly May 20, 1998 Tr. at 46. The FBI did not in the course of its investigation ask the DEA whether it had any evidence linking Bulger or Flemmi to the Valhalla. Id. at 46. If asked, the DEA could have reported that the electronic surveillance it conducted jointly with the FBI in 1984 and 1985, discussed in § II.17, infra, "showed that Bulger and Flemmi shipped guns and ammunition to the IRA in Ireland." Ex. 145. More specifically, the electronic surveillance recorded that upon seeing a news report that the Valhalla had been seized, Bulger exclaimed: "That's our shipment. That's ours." Id. at 74-75. Bulger and Flemmi were not, however, charged in the Valhalla case.

On December 6, 1984, the Quincy Police realized that McIntyre had disappeared. Ex. 155; Bergeron June 2, 1998 Tr. at 139. Only Kennedy and a Customs agent were informed immediately. Id. It was assumed that McIntyre had been killed. Neither he nor his body has ever been found.

Bergeron suspected that Bulger might have been involved in McIntyre's murder, in part because McIntyre's father reported that his son was going to meet Patrick Nee on the night that he disappeared. Bergeron, June 2, 1998 Tr. at 39. Bergeron had heard rumors that Bulger and Flemmi were FBI informants, but did not believe them. Bergeron June 2, 1998 Tr. at 152-55. Bergeron knew that Bulger and Flemmi had been linked to several murders. Id. at 154. Validating the view that Bulger had expressed several years before to Sarhatt, Bergeron testified that he "didn't think that somebody at that level, doing what they [Bulger and Flemmi] were doing, could be informants for the FBI." Id.

In about January 1984, Connolly received very reliable information concerning an ongoing extortion by Bulger and Flemmi. In violation of FBI policy and practice, Connolly did not record the information or disclose it to his Supervisor as required by the FBI Guidelines. Nor did he try to obtain the testimony of the victims or conduct any other investigation. Instead, he told Bulger of the charges.

In January 1984, Joseph Lundbohm was a Boston Police Detective. Lundbohm Sept. 29, 1998 Tr. at 112-18. Lundbohm's niece, Julie Rakes, and her husband Stephen had recently bought a liquor store in South Boston. Id. at 116.

Bulger and Flemmi evidently decided that the store would be an excellent hub for their activities. They, and Kevin Weeks, visited the Rakes and said they wanted to buy the liquor store. Id. The Rakes told them that it was not for sale. Id. Flemmi responded by pulling out a gun, commenting on how lovely the Rakes' young child was, and reiterating that they were going to buy the liquor store. Id. at 116-17.

The Rakes sought Lundbohm's assistance, telling him what occurred. Id. at 116. Lundbohm knew that Bulger and Flemmi were reputed to be dangerous members of organized crime. Id. at 138. He felt that the FBI would be the most appropriate law enforcement agency to investigate the ongoing extortion. Id. at 134. He did not know that Bulger and Flemmi were FBI informants, or that Connolly was their handler. Id. at 123, 145.

Lundbohm was acquainted with Connolly professionally, knew that he was involved in investigating organized crime and, with the Rakes' consent, decided to speak with Connolly in an effort to prompt an FBI investigation. Id. at 118. Lundbohm related to Connolly what the Rakes had told him. Id. at 119. Connolly asked whether the Rakes would "wear a wire" to record conversations with Bulger, Flemmi, and Weeks. Id. at 119, 126. Lundbohm indicated that he would advise them not to do so. Id. Connolly responded that he would take the information, but did not feel that there was much that the FBI could do. Id.

Connolly made no record of the information Lundbohm had provided to him. Nor did he disclose it to Ring, who had become the Acting Supervisor of the Organized Crime squad in January 1983. Ring June 4, 1998 Tr. at 44.

Connolly did, however, tell Bulger of his conversation with Lundbohm. Bulger subsequently urged the Rakes to "back off." Lundbohm Sept. 29, 1998 Tr. at 122. Lundbohm correctly inferred that Bulger had learned that the Rakes had been trying to generate an FBI investigation of him. Id. at 122, 139-40.

The FBI did not investigate the extortion of the Rakes in any way. More specifically, Connolly did nothing to attempt to obtain the testimony of Mr. and Mrs. Rakes. Nor did he do anything else to acquire evidence of the effort of Bulger and Flemmi to frighten them into selling their liquor store.

In any event, the extortionate scheme succeeded. The Rakes reluctantly sold their liquor store to Bulger and Flemmi. Id. at 117. It was re-named the South Boston Liquor Mart, and in the near future became a focus of the investigative efforts of several law enforcement agencies, not including the FBI.

In November 1982, James Greenleaf became the FBI SAC in Boston. Greenleaf Jan. 8, 1998 Tr. at 7. He served in that capacity until December 1986. Id. While the SAC, Greenleaf delegated the responsibility for recommending the opening and closing of informants to the agent who was his handler. Id. at 171-72. The handler, acting in concert with his supervisor, was also given the responsibility for any review of the informant's status that became necessary. Id. As described earlier, in this period the Attorney General's Guidelines, which had been incorporated in the FBI's Manual, required that the SAC himself make certain decisions, including, after consultation with the United States Attorney, whether to authorize extraordinary criminal activity involving a "serious risk of violence," and reviewing all such criminal activity at least every 90 days." Ex. 274 (Under Seal), Manual § 137 F.(2) and (3) (1-12-81). Greenleaf's approach, however, had the practical effect of delegating these responsibilities, among others, to an informant's handler and his supervisor.

While SAC, Greenleaf knew that Bulger was an FBI informant. Greenleaf Jan. 8, 1998 Tr. at 136-38. He also knew that although Flemmi may have been technically closed as an informant, he was constantly in the company of Bulger and was regularly providing information to the FBI. Id. Greenleaf was well aware that Connolly was the handler for both Bulger and Flemmi. Id. Consistent with his usual practice, Greenleaf generally relied on Connolly and his supervisor to deal with Bulger and Flemmi, and with any matters relating to them. Id. at 136-40.

In January 1983, Greenleaf made James Ring the Supervisor of the Organized Crime squad. Ring June 4, 1998 Tr. at 44. Ring held that position until he retired in 1990. Id. When replaced by Ring, Morris became the FBI Supervisor of the new, interagency Organized Crime Drug Enforcement Task Force ("OCDETF"). Morris Apr. 21, 1998 Tr. at 14.

In the course of the transition, Morris spoke with Ring about Bulger and Flemmi. Morris Apr. 29, 1998 Tr. at 65-66; Ring June 10, 1998 Tr. at 34-36. Morris told Ring that, in his opinion, Bulger and Flemmi "had outlived their usefulness." Morris Apr. 29, 1998 Tr. at 66, Apr. 30, 1998 Tr. at 91. Morris recognized that Bulger and Flemmi "looked like they were going to do a pretty good number on the LCN" and would, as a result, become more powerful in the criminal community. Morris Apr. 29, 1998 Tr. at 66. Thus, Morris suggested that Ring terminate Bulger and Flemmi as sources. Id.⁽³⁸⁾

Ring did not, however, seek to have Bulger closed as an informant. Rather, on February 23, 1983, he approved a memorandum, prepared by Connolly, to FBI Headquarters recommending that Bulger be elevated to Top Echelon informant status. Ex. 11; Ring June 11, 1998 Tr. at 22-24. Although the memorandum was captioned as coming from the SAC, pursuant to his normal practice of relying on subordinates with regard to informant matters, Greenleaf did not see it. Greenleaf Jan. 8, 1998 Tr. at 140.

The memorandum characterized Bulger as "one of the most highly placed and valuable informants in the Boston Division." Ex. 11. The memorandum then explained that:

[Bulger] is the titular head of the Winter Hill Mob and as such sits as an equal at the policy making level with major Boston LCN figures, to include Gennaro Angiulo, Underboss of Raymond Patriarca, and Boston Capo Illario Zannino, a/k/a Larry Baione. To date, this source has been utilized in six (6) successful affidavits in support of six (6) applications of court authorized electronic surveillances under the provisions of Title III. These electronic surveillances involved matters targeting the LCN at the policy making level. One of the two cases in which electronic surveillance has been utilized has been characterized by FBIHQ officials as "one of the most important and successful Title III's conducted by the FBI in the past ten years." Information provided by source has run the gamut from identifying individuals who have been marked for execution by the LCN, allowing law enforcement to advise these individuals of their status, to providing information on policy changes in the Boston-Providence LCN structure to include the recruiting of new LCN members.

UACB, captioned source will be converted to [Top Echelon] status and will continue to be targeted for ever increasing productivity.

On May 26, 1983, Connolly wrote a memorandum to "SAC Boston (ATTN Acting Supervisor J.A. Ring)," requesting a determination of whether Flemmi would imminently be indicted as a result of the Wheeler-Callahan investigations or in the case arising from electronic surveillance at 98 Prince Street. Ex. 55. Connolly based his request on the fact that Flemmi "continues to voluntarily furnish sensitive information of an extremely high quality." Id.

As indicated earlier, no action was taken immediately on Connolly's request. Nevertheless, Connolly was correct in contending that Flemmi was continuing to provide very valuable information to the FBI.

For example, on February 1, 1983, Flemmi told Connolly that Gennaro Angiulo could normally be found at Francesco's Restaurant on Monday, Tuesday, and Friday nights. Exs. 79, 172. Flemmi also furnished a drawing that he had made of the restaurant, including the back room where Angiulo sat. Ex. 172. In addition, he reported on eleven people who met with Angiulo at Francesco's, including, according to the 209, Flemmi himself, who was described as being with "a young, good looking girl." Exs. 79, 172. Angiulo was indicted in September 1983. See United States v. Angiulo, 755 F.2d 969 (1st Cir. 1985). The FBI arrested him at Francesco's.

On February 1, 1983, Flemmi also told Connolly that Zannino regularly met members of his regime and others on Monday and Tuesday evenings at the Bella Napoli restaurant. Ex. 171. Once again, Flemmi provided a diagram of the restaurant, indicating where Zannino sat to conduct business. Id. Flemmi reported, however, that Zannino had become more careful about discussing criminal matters, but still did so freely in Domenic Isabella's automobile. Id. See also Ex. 237 (209s dated 2/23/83 and 5/17/83). Both Flemmi and Bulger were used as sources in the successful August 1983 application for a warrant to conduct electronic surveillance of Isabella's car. Coffey Aff., Apr. 9, 1997, ¶ 3.C.

In the fall of 1983, Connolly and Morris had dinner with Bulger and Flemmi at Flemmi's parents' home in South Boston. Flemmi Aug. 20, 1998 Tr. at 97-98. The LCN was, as always, discussed. Flemmi Aug. 20, 1998 Tr. at 64. The timing of the meeting suggests that the occasion was a celebration of the Angiulo indictments.

If that meeting was a celebration of the Angiulo indictments, Ring, who was then the head of the Organized Crime squad and Connolly's supervisor, was not invited. This may have been because Ring had criticized Connolly for bringing him to another meeting at Flemmi's parents' home. Ring June 10, 1998 Tr. at 94-97.

By the fall of 1983, Ring had met Bulger and Flemmi twice. Flemmi Aug. 20, 1998 Tr. at 80-84. The first time Ring went with Connolly to Bulger's apartment. Id. at 81-82. The second meeting involved a dinner that Connolly arranged at Flemmi's parents' home. Id. at 82-84.

Ring used these occasions, in part, to observe and evaluate Connolly's interaction with Bulger and Flemmi, and did not like what he saw. Ring June 10, 1998 Tr. at 87-100. Ring considered the meeting at Flemmi's parents' home to be "extraordinary," "stupid," and "not an appropriate way to be dealing with informants." Id. at 94-95. Ring particularly felt that it was improper for FBI agents to meet with sources in the presence of third parties. This feeling was heightened when Bulger's brother, William, who was the President of the Massachusetts Senate and lived next door to the Flemmis, came to visit while Ring and Connolly were there. Id. at 92-93.

Ring perceived that Connolly was treating Bulger and Flemmi like "friends" or "consultants" rather than as informants. Ring June 22, 1998 Tr. at 51-52. For example, Connolly was giving Bulger and Flemmi information and asked Ring to do the same. Id. Ring expressed to Connolly his concern about what he had observed, and his view that the meeting at Flemmi's parents' home was particularly inappropriate. Ring June 10, 1998 Tr. at 95-97, June 22, 1998 Tr. at 51-52.

Ring did not, however, discipline Connolly or alter his responsibilities concerning Bulger and Flemmi. June 10, 1998 Tr. at 96. Nor did Ring then advise the SAC of what had occurred and the problems that he perceived. Id. at 98. Moreover, while it was generally Ring's practice to require agents under his supervision to obey the requirement, set forth in the FBI Manual, that all contacts with an informant be recorded promptly on a 209 even if no positive information was received, there is no 209 relating to the meeting that Ring attended at Flemmi's parents' home. Ring June 15, 1998 Tr. at 59-60, June 10, 1998 Tr. at 97-98. In addition, Ring did not make a record of his admonitions to Connolly. Ring June 10, 1998 Tr. at 97-98.

In 1983 and 1984, Ring knew that Bulger and Flemmi were engaged in "a whole host of criminal activities." Ring June 11, 1998 Tr. at 24. Indeed, Ring expected them, and other informants, to be involved in criminal activity. Id. at 92. Ring felt that the Informant Section at FBI Headquarters was well aware, from the opening teletypes, of the range of criminal activity in which Bulger and Flemmi were involved and their status in the criminal community. Ring Sept. 22, 1998 Tr. at 42-45. Headquarters asked no questions and Ring did not perceive a need to provide updated information on Bulger and Flemmi's criminal activities. Id.

Shortly after becoming Supervisor of the Organized Crime squad, Ring considered the implications of the Attorney General's Guidelines for Organized Crime informants. Ring June 19, 1998 Tr. at 134. He also discussed this subject with Morris. Id. at 135. Ring felt that the Guidelines process for providing authorization to an informant to commit crimes was not feasible for Organized Crime informants, in part because utilizing it would, as he understood it, require discussion and disclosure of the informant's identity. Id. at 134-37. Morris told Ring that seeking authorization for criminal activity of Organized Crime informants was not "worth the aggravation." Id. at 135. Ring agreed. Id.

In Ring's view, the FBI knew its informants were engaged in criminal activity, but they were not authorized to commit crimes. Id. Thus, if someone caught them, they were subject to prosecution. Id. Ring did not interpret the Guidelines as requiring that he report information he learned about crimes committed by informants for the Organized Crime squad to other, interested law enforcement agencies, or to FBI Headquarters and the Assistant Attorney General. Rather, he believed that he was only required to tell Headquarters if an informant was arrested, indicted, or targeted in an order authorizing electronic surveillance. Ring June 22, 1998 Tr. at 17-18.

Although Ring did not regard his squad's informants as authorized to engage in criminal activity, he believed that it would have been unfair and improper for the government to attempt to use information that a source provided against him. Ring June 22, 1998 Tr. at 46-52. He also felt that it would be unwise, because if an informant perceived that the FBI might use information he provided against him, he would quickly cease serving as a source. Id. at 49-50. In any event, Ring never participated in any discussion in which Bulger and Flemmi were told that the information that they were providing could be used against them. Id. at 50. Nor did he see any document indicating that they had been given such a warning. Id.

As indicated earlier, the record does include documents certifying that at various times Connolly gave Bulger and Flemmi the annual warnings required by the Attorney General's Guidelines, including the warning that they were not protected from prosecution for any criminal activity unless it was authorized by the SAC or a Supervisor. Ex. 43; Gianturco Jan. 20, 1998 Tr. at 151-53. Flemmi denies that he ever received any such warning. Flemmi Aug. 28, 1998 Tr. at 133. The compelling evidence of the FBI's enduring, assiduous effort to cultivate in Bulger and Flemmi the sense that they were "friends," "consultants," and allies rather than informants, among other things, persuades the court that Flemmi's contention is correct.

Bulger and Flemmi never discussed with Ring whether their relationship with the FBI would afford them any protection or immunity. Ring Sept. 18, 1998 Tr. at 126-29. Ring did not tell them that they had immunity or would be protected. Id. Nor did he express to them his view that if they were caught engaging in crime, they were "on their own," meaning subject to prosecution. Ring June 19, 1998 Tr. at 144. The protection that the FBI would provide its valuable sources was an issue that Rico, Connolly, Morris, Flemmi, and Bulger were comfortable discussing with each other. This was not true, however, with regard to Ring, Bulger, and Flemmi.

After having some experience as the Supervisor of the Organized Crime squad, Ring recommended to Greenleaf that a new, Non-Traditional Organized Crime squad be established. Ring June 11, 1998 Tr. at 98, June 22, 1998 Tr. at 54-55. Greenleaf agreed and formed the new squad.

From Ring's perspective, the new squad had several advantages. It made it proper for him to focus his squad's work exclusively on the LCN. Ring June 22, 1998 Tr. at 54-55. It also removed responsibility for investigations of Bulger and Flemmi from his squad, which Ring felt would insulate him and the FBI from the criticism that their handlers could not be trusted to investigate Bulger and Flemmi, but rather would compromise the investigations of their informants of which they became aware. Id.

While Ring believed that it was not proper for Bulger and Flemmi's handlers to be investigating them, he felt it was permissible for others in the FBI to do so. Ring June 22, 1998 Tr. at 47. As a practical matter, however, the creation of the new squad did not imperil Bulger and Flemmi. Instead, as set forth below, when members of that squad received reliable information about criminal activity in which Bulger and Flemmi were engaged, they regularly consulted Connolly and then did not pursue any investigation. Among those who participated in the process of consulting Connolly and then deferring to the commitment he had made to protect Bulger and Flemmi were: ASAC Larry Potts, Supervisory Special Agent Bruce Ellavsky, Rod Kennedy, and John Newton concerning the extortion of Raymond Slinger; James Blackburn regarding the extortion of a drug dealer; and James Lavin regarding guard rails constructed by the City of Boston on the property of the South Boston Liquor Mart. As described below, contrary to FBI policy and practice, the important information provided by Slinger was never documented and Lavin did not place the evidence he had received in the FBI's files. Ring, however, never knew of any of this. Ring June 11, 1998 Tr. at 98-100, June 22, 1998 Tr. at 54-57.⁽³⁹⁾

In 1984 and 1985, the DEA and the FBI were authorized by a series of court orders to engage jointly in electronic surveillance targeting Bulger and Flemmi. The investigation was initiated by the DEA. The DEA agents involved preferred not to collaborate with the FBI, primarily because they, and the Assistant United States Attorney working with them, believed that Flemmi and Bulger were FBI informants and that the Bureau would compromise the confidentiality of the investigation to protect its sources. The Bureau preferred not to participate because it viewed the endeavor as doomed to fail and expected that, as with the Lancaster Street Garage investigation, the FBI would be blamed. The two agencies became reluctant collaborators, however, when it was recognized that the FBI's participation was essential if judicial authorization to conduct electronic surveillance was to be sought and received because most of the information to be relied upon in the applications to establish probable cause involved gambling and loansharking -- crimes that the FBI rather than the DEA had the federal responsibility to investigate.

The applications for the court orders authorizing the electronic surveillance of Bulger, Flemmi, George Kaufman, and others not only relied heavily on the evidence cited to establish that there was probable cause to believe that they were committing offenses within the investigatory jurisdiction of the FBI, but also clearly conveyed the impression that the FBI would utilize any evidence obtained to attempt to develop prosecutable cases concerning matters within its jurisdiction. The Bureau, however, had no intention of doing so. The FBI was well aware, from information provided by Bulger, Flemmi, and others, that Bulger and Flemmi were engaged in illegal gambling, loansharking, and extortion. The FBI considered such criminal conduct to be essential to maintaining the credibility necessary for Bulger and Flemmi to continue to obtain and provide vital information on the LCN and others. The FBI was committed to honoring its promise of confidentiality to Flemmi and Bulger by not disclosing that they were sources, explicitly or implicitly. Explaining to the DEA, the prosecutors, or the court, that the Bureau was not interested in obtaining or using any intercepted evidence of their criminal conduct would have effectively confirmed that they were informants.

Ring, who was at the hub of the matter for the FBI, felt that Flemmi and Bulger had no immunity and would be "on their own" if the DEA could develop a prosecutable narcotics case against them based on the electronic surveillance. Armed with information provided by colleagues, however, Connolly contributed to assuring that DEA's efforts would not succeed by alerting Bulger and Flemmi to the investigation generally and to the electronic surveillance particularly.

As described in detail below, the FBI, blinded by its determination not to confirm for the United State Attorney or the DEA the accuracy of their understanding that Bulger and Flemmi were FBI informants, recklessly disregarded the government's legal obligation of candor to the court when applying for authority to conduct electronic surveillance in what was represented to be a joint investigation. At the same time, believing that Bulger and Flemmi were FBI informants, but accepting that the FBI would not confirm or discuss their status, the DEA and the United States Attorney's Office recklessly disregarded their legal obligation to seek from the FBI information that, if shared with them, would have resulted in the applications for electronic surveillance now at issue not being filed, let alone approved by the court. The DEA and United States Attorney's Office also acted with reckless disregard for the truth when they filed an application for a warrant that in effect represented that electronic surveillance was necessary to obtain evidence that the FBI would use in a Title 18 investigation of Bulger, Flemmi, and others because the prosecutor who was the applicant and the DEA agent who was the affiant did not believe that the FBI would conduct any such investigation. As a result, the applications for the 1984-1985 electronic surveillance targeting Bulger and Flemmi failed to include the "full and complete statement" describing the necessity for its use that was required by Title III.

More specifically, if submitted by a properly informed applicant, the applications should have included certain material facts about the targets, including the following. As informants Bulger and Flemmi had made statements about their illegal gambling and loansharking that the government now claims can be used as evidence against them. A review of their files would indicate to the FBI that they were tacitly authorized to engage in such activities and, therefore, the conduct which the government was seeking to investigate may not have been criminal. In any event, the FBI did not intend to use any evidence generated by the electronic surveillance in an attempt to develop a prosecutable case against its sources or any of the other named targets, including George Kaufman. Moreover, the FBI agent who was most knowledgeable believed that Bulger and Flemmi were not involved in narcotics crimes, but may have mistakenly given that impression while seeking information for the Bureau. No reasonable judge would have granted any request to target Bulger and Flemmi based on an application containing this information.

The DEA honestly and earnestly wished to conduct an investigation that it hoped would result in the successful prosecution of Bulger and Flemmi for narcotics offenses. The Department of Justice would not have allowed the submission to the court of an application that it knew was misleading. Nor would it have, over the FBI's inevitable objection, permitted disclosure to the court, and possibly to potential defendants, of the fact that Bulger and Flemmi were FBI informants. If, however, an application were filed seeking authority to intercept Bulger and Flemmi to obtain evidence of drug offenses only, the initial request concerning Bulger would have been obviously unmeritorious because there was not probable cause to believe that he would be intercepted discussing anything on Kaufman's telephone. In addition, the request concerning Flemmi would have been denied as well because there was not probable cause to believe that Flemmi would be discussing narcotics matters on Kaufman's telephone. Nor was there probable cause to believe that Kaufman would be discussing drug offenses with anyone.

Thus, but for the material omissions caused by the government's reckless disregard for the truth and for the obligations imposed by Title III and the Constitution, the warrants for the 1984-85 electronic surveillance would not have issued. The facts on which this conclusion rests are set forth below.

By 1984, Bulger and Flemmi were considered by the Boston law enforcement community to be "well known organized crime figures." Ex. 140. With the LCN diminished by the indictments of Angiulo, Zannino, and their colleagues, Bulger and Flemmi were also regarded as increasingly powerful and dangerous. Thus, in late 1983, the DEA decided to attempt to develop the information, and obtain the resources, necessary to conduct electronic surveillance of Bulger and Flemmi. Reilly May 19, 1998 Tr. at 114.

Stephen Boeri and Albert Reilly were designated as the DEA case agents for the investigation. Boeri May 14, 1998 Tr. at 28-29, 39-40. Assistant United States Attorney Gary Crossen was later assigned to work with them. Crossen had recently become an Assistant United States Attorney after serving as an Assistant District Attorney for Suffolk County. Crossen May 11, 1998 Tr. at 132.

Boeri, Reilly, and Crossen shared a genuine interest in investigating Flemmi and Bulger. Crossen May 11, 1998 Tr. at 143, May 12, 1998 Tr. at 131. It was not clear, however, whether they could obtain the necessary resources or judicial authorization for electronic surveillance, which was an essential part of their plan. Stutman Apr. 14, 1998 Tr. at 12. The government must invest considerable manpower and money for a prolonged period of time to conduct electronic surveillance. Stutman Apr. 15, 1998 Tr. at 68; Reilly May 19, 1998 Tr. at 143-46. In this case, it was initially expected that the investigation would take at least a year. Stutman Apr. 14, 1998 Tr. at 69. The approval of DEA Headquarters was needed to conduct such a lengthy investigation with uncertain prospects. Id. If approved, resources would have to be found and committed to fund it. Reilly May 19, 1998 Tr. at 133-34. Moreover, many months would have to be devoted to attempting to obtain the information necessary to receive authorization from the Department of Justice to apply for a judicial warrant to conduct electronic surveillance, and to make a compelling case for the issuance of such an order.

At the outset of their investigation, Boeri and Reilly were convinced that Bulger and Flemmi were FBI informants. Stutman Apr. 15, 1998 Tr. at 36-37; Reilly May 19, 1998 Tr. at 123; Kennedy Apr. 14, 1998 Tr. at 143-44. Crossen also believed that Bulger and Flemmi were "in the FBI stable of informants." Crossen May 11, 1998 Tr. at 149-50. Crossen, Boeri, and Reilly had all been told about the Lancaster Street Garage experience. Crossen May 12, 1998 Tr. at 114; Boeri May 14, 1998 Tr. at 67-70; Reilly May 19, 1998 Tr. at 123-24; Ex. 146. This contributed to their belief that Bulger and Flemmi were not only FBI sources, but informants that the FBI wished to protect. They felt, however, that serving as an informant did not prevent an individual from being investigated and prosecuted if he were also committing crimes. Crossen May 13, 1998 Tr. at 28-29; Boeri May 14, 1998 Tr. at 70.

Their belief that Bulger and Flemmi were highly valued FBI informants presented Crossen, Boeri, and Reilly with a dilemma. In planning their investigation they hoped to develop sufficient evidence that Bulger and Flemmi were involved in gambling and extorting money from drug dealers to obtain a warrant for electronic surveillance targeting them in order to acquire evidence of those crimes, as well as narcotics offenses. Crossen May 11, 1998 Tr. at 151-52, May 13, 1998 Tr. at 52-53; Boeri May 14, 1998 Tr. at 41, 64. Crossen believed that the investigation generally, and any effort to obtain a court order to conduct electronic surveillance particularly, would have to include a law enforcement agency with the authority to investigate for possible prosecution gambling and other, relevant non-narcotics offenses because evidence of such offenses was expected to be overheard. Crossen May 13, 1998 Tr. at 90-91. See 18 U.S.C. § 2516(1) (1994) ("judge may grant . . . an order authorizing or approving the interception of wire or oral communications by the Federal Bureau of Investigation, or a Federal agency having responsibility for the investigation of the offense as to which the application is made . . .").

It was also understood by Crossen, the DEA agents, and their SAC, Robert Stutman, that the DEA did not have the authority or federal responsibility to investigate non-narcotics offenses. Crossen May 13, 1998 Tr. at 151-53; Boeri May 14, 1998 Tr. at 61-63; Stutman Apr. 15, 1998 Tr. at 14. Rather, the FBI was the federal agency that had the jurisdiction and responsibility to investigate gambling, loansharking, extortion, and other conduct constituting federal crimes under Title 18 of the United States Code. Id. Crossen and his colleagues recognized, however, that the Massachusetts State Police were also empowered to investigate gambling, loansharking, and extortion, which are crimes under the laws of Massachusetts as well as federal offenses. Crossen May 11, 1998 Tr. at 152.

Boeri and Reilly had a strong preference for working with the Massachusetts State Police rather than the FBI. In 1984, the FBI and DEA had an unhappy history as rivals. Ahearn May 11, 1998 Tr. at 117-19; Crossen May 13, 1998 Tr. at 813. The FBI, particularly, had traditionally been unwilling to share information or otherwise collaborate with other federal law enforcement agencies. Id.; Reilly May 19, 1998 Tr. at 123. This culture had generated difficulties and tensions between the FBI and the DEA, among others. Ahearn May 11, 1998 Tr. at 117-18; Stutman Apr. 18, 1998 Tr. at 85. Thus, Boeri and Reilly were generally reluctant to attempt to work jointly with the FBI. Reilly May 19, 1998 Tr. at 123. This predilection was strongly reinforced by their fear that if the FBI was told of their investigation, the Bureau would seek to subvert it by informing Bulger and Flemmi. Reilly May 19, 1998 Tr. at 125, May 20, 1998 Tr. at 115-16.

Shortly before 1984, however, the FBI had been given jurisdiction concurrent with the DEA's to investigate drug offenses. Ahearn May 11, 1998 Tr. at 118. In connection with this, the Department of Justice was actively promoting greater cooperation between the FBI and the DEA. McCurnin Sept. 15, 1998 Tr. at 79-80. Stutman Apr. 15, 1998 Tr. at 85; Boeri May 14, 1998 Tr. at 70-71. Francis Mullen, a former FBI official, was made the Administrator of the DEA. McCurnin Sept. 15, 1998 Tr. at 98. John McCurnin, who had formerly been Sean McWeeney's deputy in the Organized Crime Section of the FBI, served as Mullen's Executive Assistant and was responsible for coordinating major matters with the FBI, particularly with McWeeney. Id. at 79-80. The Organized Crime Drug Enforcement Task Force was established to institutionalize the new policy of cooperation. Crossen May 13, 1998 Tr. at 83. The United States Attorney, William F. Weld, and the FBI and DEA SACs, Greenleaf and Stutman, were committed to the effort to enhance cooperation. Stutman Apr. 15, 1998 Tr. at 85-86.

Reilly, however, urged Stutman not to try to involve the FBI in the investigation of Bulger and Flemmi. Reilly May 19, 1998 Tr. at 123-25; Stutman Apr. 14, 1998 Tr. at 85. Reilly argued that the FBI would not share information, its technical expertise in installing bugs was not essential, and there was an unacceptable risk that DEA's efforts would be undermined because the FBI would compromise the investigation to protect its informants. Id. Nevertheless, Stutman saw the investigation of Bulger and Flemmi as an opportunity for the collaboration between the DEA and the FBI that was being encouraged. Id.

Stutman discussed the situation with Weld. Weld May 26, 1998 Tr. at 23-31. It was Weld's understanding that Bulger and Flemmi had served as sources for the FBI, and had provided some of the information necessary to obtain the court orders for electronic surveillance of 98 Prince Street and 51 North Margin Street. Id. at 21-22. He had also heard that the FBI, particularly Connolly, was suspected of having told Bulger and Flemmi of the bug at the Lancaster Street Garage. Id. at 22-23, 34-35. Weld understood, however, that the FBI's "official line" was to deny that Bulger and Flemmi were informants. Id. at 21.

Stutman and Weld discussed two issues. First, Stutman wanted to know if the United States Attorney would support the DEA's effort to investigate Bulger and Flemmi, and to utilize electronic surveillance as a key component of that investigation. Id. at 29. Weld said he would "back [DEA] up" and that the investigation could proceed with his support. Id.

Second, Stutman and Weld discussed whether the FBI should be involved in the electronic surveillance that was being planned or whether the Bureau was so close to the targets that there would be an unacceptable risk that the investigation would be compromised if it was included. Id. at 25. Weld knew that his prosecutors shared the DEA agents' deep doubts about working with the FBI in any investigation of Bulger and Flemmi. Id. at 28. Weld and Stutman agreed, however, that Greenleaf should be asked to have the FBI participate in the investigation and, particularly, in the hoped for electronic surveillance. Id. at 30.

In about April 1984, Stutman met with Greenleaf and explained that the DEA planned to conduct a major investigation, including electronic surveillance, of Bulger and Flemmi in which it wanted the FBI to participate because it was expected that the investigation would develop information concerning crimes that were within the jurisdiction of the FBI rather than the DEA. Stutman Apr. 14, 1998 Tr. at 10-18, 22, 82; Greenleaf Jan. 8, 1998 Tr. at 37-38, 66-69, 195-96. Stutman provided Greenleaf with detailed information about the investigation to date, including a description of the information that he felt should be of active interest to the FBI. Greenleaf Jan. 8, 1998 Tr. at 125, 195; Stutman Apr. 14, 1998 Tr. at 12. Stutman would have given Greenleaf any additional information that he requested. Stutman Apr. 14, 1998 Tr. at 90. Greenleaf did not, however, ask for more details or immediately respond to Stutman's request.

At about the same time, Weld also met with Greenleaf. Weld May 26, 1998 Tr. at 31. Weld too asked Greenleaf if the FBI would participate in the investigation and any electronic surveillance of Bulger and Flemmi. Id. at 33. Greenleaf said he would have to get back to Weld. Id. In view of Greenleaf's usual enthusiasm for major investigations, Weld found his response to be so "odd" that it strengthened his sense that Bulger and Flemmi may have been FBI informants. Id.

About a week later, Greenleaf told Weld that the FBI would not be able to participate in the investigation of Bulger and Flemmi. Id. at 37-40. Weld was surprised. Id. at 45. Although the conversation was brief, Weld inferred that Greenleaf had consulted FBI Headquarters and determined that the FBI did not want to participate because of the risk that its involvement would result in the disclosure of the fact that Bulger had been an FBI informant and a source for the electronic surveillance that targeted Angiulo and Zannino. Id. at 40. Greenleaf did not, however, discourage Weld from pursuing the investigation of Bulger and Flemmi. Weld May 27, 1998 Tr. at 71.

Weld told Stutman of Greenleaf's response. Weld May 26, 1998 Tr. at 46. They discussed the possibility that Bulger and Flemmi were FBI sources. Stutman Apr. 14, 1998 Tr. at 71-72. Neither Weld nor Stutman, however, ever asked Greenleaf if either or both were informants, and Greenleaf did not tell them. Stutman Apr. 14, 1998 Tr. at 73; Weld May 26, 1998 Tr. at 133; Greenleaf Jan. 8, 1998 Tr. at 195. Rather, Weld and Stutman simply accepted the fact that the FBI would not identify its informants, even to trusted colleagues in the Department of Justice with a legitimate need to know. Stutman did not ask Greenleaf if Bulger and Flemmi were FBI informants because Stutman knew that, "it would have required [Greenleaf] either lying about it or saying 'I can't tell you.'" Stutman Apr. 14, 1998 Tr. at 73. Similarly, Weld never asked the FBI to identify an informant because, if he did, he "would have expected [the FBI] to tell [him] to go pound sand." Weld May 26, 1998 Tr. at 133.

When approached by Stutman and Weld, Greenleaf immediately recognized that the investigation of Bulger and Flemmi, particularly any electronic surveillance, would present problems for the FBI because Bulger was still open as an informant and both were providing information. Greenleaf Jan. 8, 1998 Tr. at 69-71. Greenleaf consulted several colleagues before deciding how to respond. One was Fitzpatrick, who was the ASAC with responsibility for relations with the DEA. Fitzpatrick May 16, 1998 Tr. at 114-16. In addition, Greenleaf had a meeting which included Ring, in his capacity as chief of the Organized Crime squad, Rod Kennedy, who had been assigned to work with the DEA and knew prior to the meeting that the DEA was attempting to target Bulger and Flemmi, and Kennedy's supervisor on the Drug Squad, who was then Morris. Kennedy Apr. 14, 1998 Tr. at 32-39; Morris Apr. 21, 1998 Tr. at 14, Apr. 23, 1998 Tr. at 123.

The meeting focused on the DEA's interest in electronic surveillance targeting Bulger and Flemmi and whether the FBI should participate in that effort. Kennedy Apr. 14, 1998 Tr. at 32-33, 36-37. Each of the participants knew that Bulger and Flemmi were FBI sources.

Ring did not want the FBI to become involved in the investigation for several reasons. Greenleaf Jan. 8, 1998 Tr. at 74; Ring June 10, 1998 Tr. at 74; Ring June 10, 1998 Tr. at 144-49, 153-55, Sept. 22, 1998 Tr. at 122-28. Ring believed that any suspicion that Bulger and Flemmi were involved in narcotics trafficking was not well-founded, in part because no FBI informant had, to his knowledge, reported such criminal conduct and in part because Connolly asserted that they would never deal drugs or even allow them in South Boston. Ring June 10, 1998 Tr. at 153-54, Sept. 22, 1998 Tr. at 123-24; Ex. 13. Ring believed that Bulger and Flemmi were engaged in gambling, loansharking, and, perhaps, murder. Ring Sept. 22, 1998 Tr. at 126-27. However, he felt that the DEA's effort was doomed because too many investigators knew about it, and Bulger and Flemmi may have already realized that they were being targeted. Ring June 19, 1998 Tr. at 151-53; Ex. 13. Ring argued that if the FBI agreed to participate, it would be blamed if the investigation failed and, particularly, if it appeared that its confidentiality had been compromised. Greenleaf Jan. 8, 1998 Tr. at 73-74.

Greenleaf decided that the FBI would not join the investigation of Bulger and Flemmi, but would offer technical support and make Kennedy the liaison with the DEA for the purposes of the investigation. Ex. 8; Kennedy Apr. 14, 1998 Tr. at 18, 37. Greenleaf also decided to "compartmentalize" the information that the FBI had received about the investigation. Kennedy Apr. 14, 1998 Tr. 37-38, 46; Greenleaf Jan. 8, 1998 Tr. at 71-72. In essence, Greenleaf wanted the information the FBI received about the investigation of Bulger and Flemmi to be maintained with "a very high level of integrity and security." Greenleaf Jan. 8, 1998 Tr. at 2. As set forth below, this effort failed.

On April 12, 1984, Greenleaf sent FBI Headquarters a teletype concerning Bulger and Flemmi that he designated as "Priority." It said:

SAC, DEA, Boston, has advised that his office currently has requested a special enforcement operation proposal of DEAHQ, which is targeted at a large scale cocaine and marijuana trafficking area. This proposal is a joint investigative effort of DEA and the Quincy, Massachusetts Police Department.

Primary targets in this investigative probe are captioned sources [Bulger and Flemmi] whom DEA alleges are individuals who control this narcotic trafficking group.

DEA anticipates extensive investigation to include surveillances and pen registers to develop need[ed] probable cause for electronic microphone of principals involved in this investigation.

FBI, Boston is not a participant in this investigation, however, SAC, Boston has offered technical assistance to DEA when and if desired and liaison has been established between FBI and DEA in this matter.

As FBIHQ is aware, [Flemmi] is presently closed. At this time, Boston does not feel that [Bulger] should be closed due to past, present and future valuable assistance to the FBI. In addition, at present time DEA allegations are unsubstantiated and DEA has furnished no specific information relative to the involvement of [Bulger] in criminal activities. Boston will follow and advise FBIHQ of pertinent developments.

Ex. 12. Notably, the teletype did not include the information Stutman had provided Greenleaf concerning the gambling, loansharking, and other Title 18 offenses that Bulger and Flemmi were believed to be committing. Nor did it reflect that the FBI had declined a request to join the investigation.

Although FBI Headquarters was informed of the issue of whether Bulger should have been kept open as an informant, the Assistant Attorney General for the Criminal Division, Stephen Trott, was not. As described below, the failure to inform the Assistant Attorney General of the dilemma posed by the information Stutman provided Greenleaf, or indeed of Bulger's earlier admission that he was extorting money from at least one narcotics trafficker, Murray, violated the Attorney General's Guidelines. See Ex. 274 (Under Seal), Manual § 137-17(G)(1 & 2) (1-12-81); § 137-16(G)(1 & 2) (3-28-84).

While the Assistant Attorney General was being kept in the dark, Connolly soon learned of the information in the April 12, 1984 teletype. As Bulger's handler, he may have received a copy for Bulger's file. In any event, Ring told Connolly that Bulger and Flemmi might be under investigation by other agencies, but would give him no further details. Ex. 13. He also warned Connolly to be prepared to take a polygraph in the event that there was ever a claim that the confidentiality of any such investigation had been compromised. Id.

In addition, McWeeney, the Chief of the Organized Crime Section at FBI Headquarters, who was involved in the issues presented by the Wheeler, Halloran, and Callahan murders, received a copy of Greenleaf's teletype. Ex. 233; Kennedy Apr. 14, 1998 Tr. at 27-34, 40-43, 195. Despite Ring's effort to limit Connolly's knowledge of the DEA's plans, McWeeney told Connolly that the DEA was trying to obtain a wiretap targeting Bulger and Flemmi. Kennedy Apr. 14, 1998 Tr. at 30-34, 40-43.

It is also likely that Morris told Connolly about the investigation targeting Bulger and Flemmi. He had previously disclosed Halloran's allegations about them to Connolly. As discussed, in § II.26, infra, he would in 1986 again use Connolly as a conduit to alert Flemmi to a bug aimed at intercepting him. There is no reason to believe that he would have behaved any differently in 1984. Rather, circumstantial evidence suggests that Morris did tell Connolly about the investigation. Morris received his first payment of $1000 from Bulger and Flemmi in June 1982, shortly after causing Connolly to tell them of Halloran's allegations. Morris Apr. 23, 1998 Tr. at 136, 139. He received a second $1000 payment from them, and a case of wine, about two years later, in the spring of 1984. Morris Apr. 29, 1998 Tr. at 65. The timing of this payment suggests that it may have been an expression of Bulger and Flemmi's appreciation for Morris' assistance concerning the DEA investigation.

It is also likely that Kennedy discussed the DEA investigation with Connolly. Beginning in 1984, Kennedy on several occasions discussed with Connolly what would happen if Bulger and Flemmi were ever arrested. Kennedy Apr. 14, 1998 Tr. at 94-99. Kennedy repeatedly told Connolly that he believed that if Bulger or Flemmi were arrested they would divulge their relationship with Connolly and the FBI. Id. at 97-98. Connolly regularly responded that he did not have to worry because they were too smart to get caught. Id. at 99.

Connolly was relying on more than Flemmi and Bulger's cunning when he told Kennedy that he did not have to be concerned about the problems that would be generated if Bulger or Flemmi were arrested. Connolly knew he would protect them, and himself, by furnishing Bulger and Flemmi any information he could obtain that might help them avoid arrest and prosecution.

The court finds that, consistent with this, Connolly told Bulger and Flemmi that the DEA investigation had been initiated and advised them of the information he obtained concerning its progress. Flemmi admits some, but not all of this.

Flemmi acknowledges that the FBI warned him and Bulger that they were under investigation. Flemmi Aug. 24, 1998 Tr. at 20. Flemmi claims that in February 1984, he and Bulger "started noticing things" that made them aware that they were under active investigation by the DEA. Flemmi Aug. 20, 1998 Tr. at 84. Flemmi asserts that in 1984 Ring attended some of their meetings with Connolly and told them the DEA was investigating them. Id. at 84-87, Aug. 24, 1998 Tr. at 19. Flemmi also claims that in December 1984, Ring called to tell him that a wiretap was about to be placed on George Kaufman's telephone and on his own. Id. at 86-87. Ring denies that he told Flemmi about the prospective DEA wiretaps. Ring Sept. 22, 1998 Tr. at 28-29.

This is a matter on which the court finds that Flemmi's testimony is in part accurate and in part false. More specifically, the credible direct and circumstantial evidence proves that Bulger and Flemmi were told of the investigation generally and of the electronic surveillance particularly. It was, however, Connolly not Ring who gave them this information.

On February 7, 1984, as part of his early investigation, Reilly asked the National Crime Information Center ("NCIC"), which is run by the FBI in Washington, D.C., for a copy of Bulger's criminal record. Ex. 137; Ring June 16, 1998 Tr. at 101-03. At that time, if the subject of such a request was an FBI informant, the Informant Section at FBI Headquarters would be advised of the inquiry, and send notification of it to the informant's handler and his supervisor for inclusion in the informant's file. Ring June 16, 1998 Tr. at 101-05. This practice was followed with regard to Reilly's inquiry concerning Bulger. Ex. 137; May 15, 1998 Tr. at 43. Thus, in February 1984, Connolly learned that the DEA was focusing on Bulger. Based in part on Connolly's previous and future practice, the court infers that he told Bulger and Flemmi about the DEA investigation. It is, therefore, not surprising that in February 1984, they "started noticing things." Flemmi Aug. 20, 1998 Tr. at 84.

In addition, recognizing they were under surveillance, Bulger and Flemmi ceased meeting Connolly at Bulger's apartment in Quincy. Flemmi Aug. 24, 1998 Tr. at 84-85. Instead, they began meeting at Connolly's home in South Boston and later at the apartment of his colleague, John Newton. Id.; Newton May 22, 1998 Tr. at 126-27, June 2, 1998 Tr. at 77, 80.

In 1984, Flemmi maintained regular contact with Connolly and continued to provide valuable information concerning the LCN. For example, he reported that: Raymond J. Patriarca would soon be named to succeed his deceased father as Boss; Joe Russo, who was a fugitive as a result of the Barboza murder was living in Montreal, but being urged by Zannino to return to Boston, where the LCN was being depleted; and Frank Salemme had a potentially violent dispute with Joe "Black" LaMattina, a member or associate of the Patriarca Family. Exs. 19, 237 (209 dated 7/16/84).

Ring did meet with Connolly, Bulger, and Flemmi several times in 1984. Exs. 13, 178. Beginning at some time prior to April 1984, Bulger and Flemmi reported that they were aware that they were under investigation and surveillance. Exs. 13, 14. They also indicated that they had observed intensified law enforcement attention to them in the summer of 1984. Ex. 14.

Flemmi's reaction to the joint DEA, Massachusetts State Police, and Quincy Police Department investigation is significant. Flemmi did not complain to Connolly or Ring that his agreement with the FBI gave him immunity from being investigated by other agencies or from being prosecuted if that investigation were successful. Flemmi Aug. 24, 1998 Tr. at 24-25. This was not Flemmi's understanding. Rather, Flemmi understood that it would be legally permissible for him to be prosecuted as a result of the investigation that was being conducted in 1984 by the DEA, the Massachusetts State Police, and the Quincy Police Department. Id. at 24-26, Aug. 25, 1998 Tr. at 246.

Flemmi believed that the FBI was obligated to protect him by providing him information about investigations that he could use to frustrate them, one way or another. Flemmi Aug. 24, 1998 Tr. at 22-26, Aug. 25, 1998 Tr. at 247. Flemmi now believes that in 1984 and 1985, the FBI provided him with the protection that he had been promised by warning him of the pending investigation and of the electronic surveillance that was part of it. Flemmi Aug. 24, 1998 Tr. at 20, 22-24. According to Flemmi, the warnings that he received concerning the 1984-85 investigation of him were part of both the FBI's promise to him and of its fulfillment. For example, he testified:

A. [Ring] advised us that there was a telephone tap on my phone. That was in a sense telling me that we were being protected. We were aware of the investigation that was ongoing.

A. Yes, absolutely. They're notifying me that there's an investigation going on. To me, it says I'm getting protected. I can't think of any other way.

In any event, after Greenleaf declined to have the FBI become a formal participant in the joint investigation in April 1984, the FBI provided some advice and assistance to the DEA. Fitzpatrick discussed the DEA investigation with his counterpart, DEA ASAC Paul Brown. Fitzpatrick Apr. 14, 1998 Tr. at 117. Brown frequently told Fitzpatrick that he knew that Bulger and Flemmi were FBI informants, and claimed that Greenleaf had told Stutman of their status. Id. at 124-25. Fitzpatrick regarded Bulger and Flemmi's status as FBI informants as "the worst kept secret in the world." Id. at 117. Fitzpatrick told an official at FBI Headquarters that McCurnin, the former FBI official who was the Executive Assistant to the Administrator of the DEA, knew that Bulger was an FBI informant. Ex. 233; McCurnin Sept. 15, 1998 Tr. at 85, 89. Nevertheless, Fitzpatrick joined Greenleaf in urging that Bulger not be closed as an informant. Ex. 233.

Kennedy, who was the FBI's liaison agent to the DEA in Boston, also discussed the ongoing DEA investigation with his counterparts, Boeri and Reilly. They too said they believed Bulger and Flemmi were FBI informants. Kennedy May 14, 1998 Tr. at 143-44. Kennedy, however, did not confirm this. Id. at 160.

The DEA agents asked Kennedy for any information which the FBI had that would support the application for electronic surveillance of Bulger and Flemmi that was being prepared. Id. at 102-04, 119, 208. Kennedy told them that there were two FBI sources who said that Bulger and Flemmi were extorting money from drug traffickers. Id. at 208; Ex. 45. Both sources, he said, reported that Hobart Willis and Joseph Murray, who controlled the recently raided South Boston warehouse in which fifteen tons of marijuana were seized, were associated with Bulger. Ex. 45. Kennedy also advised that one source stated that Willis and Murray were not required to pay Bulger, but that "every other 'bookie' and drug dealer in the Boston area [was] paying 'tribute' to [him]." Id. As described earlier, however, Kennedy did not tell the DEA agents that Bulger himself had told Connolly that he had received $60-90,000 in drug money from Murray. Id.; Kennedy Apr. 14, 1998 Tr. at 62-63, 79, 115, 121-29.

In November 1984, several FBI agents with specialized, technical expertise in installing microphones came to Boston to advise the DEA on installing a bug in Bulger's automobile, and condominium, each of which had sophisticated alarms. Ex. 146; Reilly May 20, 1998 Tr. at 10-12, 35-36. The FBI experts, however, reported that it was not possible to bug either Bulger's vehicle or residence. Id. This reinforced Reilly's view that the FBI was determined to protect its informants. Reilly May 20, 1998 Tr. at 37. Although they had no specialized training, Reilly and Boeri later installed listening devices in Bulger's home and automobile. Id. at 12, 37.

Prior to October 17, 1984, Greenleaf provided Stutman with information that the FBI was receiving from Bulger and Flemmi indicating their awareness of the investigation targeting them. Exs. 13, 146; Ring June 10, 1998 Tr. at 129-36; Reilly May 20, 1998 Tr. at 35-36, 71; Boeri May 15, 1998 Tr. at 50-51. Greenleaf did not, however, tell Stutman that Bulger and Flemmi were the sources of the information. Greenleaf Jan. 8, 1998 Tr. at 201-09.

By at least mid-October 1984, the DEA and United States Attorney's Office realized that they faced a difficult dilemma. Boeri May 14, 1998 Tr. at 134-35. They had invested almost a year in conducting an investigation intended to lead to electronic surveillance targeting Bulger and Flemmi. It appeared, however, that the potential for their investigation to succeed in developing prosecutable cases had been seriously diminished because Bulger and Flemmi were well aware that they had been targeted. Id.; Ex. 18. It was decided to try to resolve this dilemma by continuing the investigation of Bulger and Flemmi, while attempting to give them the impression that it had been aborted. Reilly May 20, 1998 Tr. at 113-14.

More specifically, the DEA's effort to have the investigation targeting Bulger and Flemmi designated as an Organized Crime Drug Enforcement Task Force case succeeded on November 7, 1984. Ex. 140; Reilly May 19, 1998 Tr. at 143-45. The Organized Crime Drug Enforcement Task Force designation constituted recognition that the investigation of Bulger and Flemmi was a major matter and provided the "big money" necessary to continue it. Id. Bulger and Flemmi were the sole named targets of the investigation. Exs. 140, 146. The investigation would not have been authorized or sustained in the hope of merely developing a case against anyone else, including George Kaufman. The DEA believed that "[t]he success of the . . . investigation relie[d] upon the successful installation of a 'car bug' in the BULGER vehicle, and the installation of a 'room bug' in the BULGER residence." Ex. 146. A wiretap on Kaufman's telephone was being contemplated only as a means of obtaining the probable cause necessary to obtain warrants to bug Bulger's car and home. Id. The DEA would not have sought authority to tap Kaufman's telephone if Bulger and Flemmi were not the targets of that effort.

At the same time, it was decided that in view of the information about Bulger and Flemmi's awareness of the investigation that Stutman had received from the FBI, it was important to reduce the number of people who knew about the investigation in an effort to minimize the risk of leaks and, particularly, to try to give Bulger and Flemmi the impression that it had been ended. Reilly May 20, 1998 Tr. at 113-14; Boeri May 14, 1998 Tr. at 40-41, 90-91. Accordingly, it was decided that the Massachusetts State Police would be cut out of the investigation on the pretext that the effort was being abandoned. Id.

As a result, the DEA lost the partner in the joint investigation that had both the authority and experience to investigate gambling and loansharking. Boeri May 18, 1998 Tr. at 40. As described earlier, Crossen believed that any effort to obtain a warrant to conduct such electronic surveillance would require the participation of an agency with the authority to investigate gambling, loansharking, and other non-narcotics offenses that there was probable cause to believe would be discussed during any electronic surveillance of Bulger and Flemmi. Crossen May 13, 1998 Tr. at 90-91. Crossen also believed that the DEA lacked such authority. Thus, at some point between October and December 1984, the FBI was again asked to participate in the investigation and the proposed electronic surveillance. Boeri May 14, 1998 Tr. at 44-45, 61-65, 72, May 18, 1998 Tr. at 40; Reilly May 19, 1998 Tr. at 118-19.

This time Greenleaf agreed. He assigned the matter to the Organized Crime squad and directed Ring to provide two agents from that squad to work with the DEA on the investigation, including the electronic surveillance. Ring June 10, 1998 Tr. at 117-18, 130.

Ring was not pleased with the arrangement because he continued to be concerned that the FBI would be blamed if, as he expected, the investigation did not succeed. Carter Aug. 17, 1998 Tr. at 98. Ring decided to discharge his new responsibilities in a way that would minimize the potential for fair criticism of the FBI if and when the investigation failed. Ring assigned two agents who were new to Boston and the Organized Crime squad, Richard Carter and Brian Rossi, to work with the DEA on the electronic surveillance targeting Bulger and Flemmi. Ring June 10, 1998 Tr. at 118, Sept. 22, 1998 Tr. at 106-08, 112; Carter Aug. 17, 1998 Tr. at 47, 97. Neither agent knew that Bulger or Flemmi was an FBI informant. Carter Aug. 17, 1997 Tr. at 97, 101-12. Thus, there was no risk that either would divulge that Bulger and Flemmi were FBI sources.

Ring told Carter and Rossi to stay away from the FBI while they were working with the DEA. Id. at 97. Ring also directed them not to tell any member of the FBI what evidence or information was being gathered in the joint investigation. Ring June 10, 1998 Tr. at 117-19, June 19, 1998 Tr. at 154. As these instructions demonstrate, Ring, and the FBI that he represented, had no intention of using evidence obtained by the electronic surveillance in any investigation or prosecution of Flemmi, Bulger, Kaufman, or anyone else for any Title 18 offense, including gambling, loansharking, or extortion. Carter and Rossi obeyed Ring's order and did not provide him with any of the information they acquired while participating, on behalf of the FBI, in the investigation of Bulger and Flemmi. Ring June 10, 1998 Tr. at 119, June 19, 1998 Tr. at 153-54.

Although representatives of the United States Attorney's Office, the DEA, and the FBI were all involved in the decision to have the FBI join the investigation of Bulger and Flemmi, nobody considered the implications of the Bureau's involvement for the necessity portion of the application for a warrant authorizing electronic surveillance targeting Bulger and Flemmi that would soon be filed. Crossen May 12, 1998 Tr. at 29-35; Greenleaf Jan. 8, 1998 Tr. at 227-28; Ring June 22, 1998 Tr. at 81-83; Boeri May 14, 1998 Tr. at 36-37; Reilly May 20, 1998 Tr. at 118. Crossen and Boeri were primarily responsible for preparing the application and the affidavit on which it relied. In December 1984, however, Crossen had no prior experience with federal applications and Boeri had never served as the case agent or affiant in an investigation involving electronic surveillance. Crossen May 12, 1998 Tr. at 21; Boeri May 14, 1998 Tr. at 29-30. Reilly and Boeri did consult O'Sullivan to get advice concerning the procedures to be followed to obtain a warrant for electronic surveillance. Ex. 254. Nevertheless, central requirements of Title III were utterly overlooked or ignored.

More specifically, Title III requires, among other things, that each application for an order authorizing electronic surveillance establish that: there is probable cause to believe that a particular offense is being committed; there is probable cause to believe that the proposed wiretap or bug will intercept evidence of that crime; and electronic surveillance, which is an especially intrusive investigative technique, is necessary. See 18 U.S.C. § 2518(1) (b),(c) and (3)(a)(b) and (c). With regard to necessity, the statute states that the application must include:

(c) a full and complete statement as to whether or not other investigative procedures have been tried and failed or why they reasonably appear to be unlikely to succeed if tried or to be too dangerous.

As the Court of Appeals for the First Circuit explained in United States v. Mastroianni, a decision rendered on October 30, 1984, § 2518(1)(c) requires that the affiant in an application for an order authorizing electronic surveillance obtain relevant information from "all agencies involved in the investigation . . ." before representing that electronic surveillance is necessary. United States v. Mastroianni, 749 F.2d 900, 910 (1st Cir. 1984). As discussed in the Conclusions of Law, § III.2.E, infra, the Mastroianni decision was not novel. See, e.g. Franks, 438 U.S. at 164 n.6; United States v. Dorfman, 542 F. Supp. 345, 366 n.18 (N.D. Ill. 1982), aff'd sub nom. United States v. Williams, 737 F.2d 594 (7th Cir. 1984); United States v. Tufaro, 593 F. Supp. 476, 485-86 (S.D.N.Y. 1983). Moreover, as a practical matter, in 1984, participants in joint investigations routinely shared relevant information with the DEA without even being asked. Stutman Apr. 15, 1998 Tr. at 146-47, 164.

In this case, however, Crossen, who had a practice of reading First Circuit decisions in criminal cases and should have read the Mastroianni decision, did not direct the DEA to consult the FBI concerning the necessity for electronic surveillance targeting Bulger and Flemmi. Crossen May 12, 1998 Tr. at 29-35, May 13, 1998 Tr. at 87-89; Reilly May 20, 1998 Tr. at 6, 116-17; Boeri May 14, 1998 Tr. at 133-34. He essentially relied on Boeri and Reilly to collect the legally required information. Crossen May 13, 1998 Tr. at 85-88.

The DEA, however, relied on the United States Attorney's Office for direction regarding legal requirements. Reilly May 20, 1998 Tr. at 118-19; Boeri May 14, 1998 Tr. at 37. Neither Reilly nor Boeri was aware of the Mastroianni decision or of the requirement that all participating agencies be consulted concerning the necessity for electronic surveillance. Reilly May 20, 1998 Tr. at 118-19; Boeri May 14, 1998 Tr. at 36-37. Nor was Stutman. Stutman Apr. 15, 1998 Tr. at 167. The DEA agents asked that FBI indices be checked to determine whether there had been any prior applications for electronic surveillance targeting Bulger or Flemmi, as required by 18 U.S.C. § 2518(1)(e). Reilly May 19, 1998 Tr. at 134-35. However, no inquiry was addressed to the FBI regarding the requirements of § 2518(1)(c) concerning the necessity for electronic surveillance. Boeri May 14, 1998 Tr. at 118; Reilly May 20, 1998 Tr. at 5-6. Boeri did not believe that it was required that he do so. Boeri May 14, 1998 Tr. at 95-96.

Similarly, the FBI did not recognize or discharge its obligation to furnish for inclusion in the application the significant information it had concerning the necessity of electronic surveillance targeting Bulger and Flemmi. Greenleaf had neither training nor experience regarding the requirements of Title III. Greenleaf Jan. 8, 1998 Tr. at 227. He was generally aware that an applicant was obligated to make a full and complete statement concerning why conventional investigatory techniques were insufficient, but did not think about this in the context of the investigation that the FBI had joined. Id. at 228-29.

Ring also gave no consideration to this issue. Ring June 22, 1998 Tr. at 81-82. Consistent with the effort to compartmentalize the information that Bulger and Flemmi were being targeted for electronic surveillance, Ring did not discuss with the FBI's Principal Legal Adviser or anyone else the legal requirements of Title III or the implications for the proposed electronic surveillance of Bulger and Flemmi's relationship with the FBI. Id. at 81-83. Thus, no consideration was given by the FBI to the requirements of § 2518(1)(c) or the ruling in Mastroianni.

Determined not to acquire any additional information about the joint investigation, Ring also did not review the application for the order authorizing electronic surveillance of Bulger and Flemmi, or the Boeri affidavit on which it relied. Ring June 19, 1998 Tr. at 154-55. Nor did Greenleaf. Greenleaf Jan. 8, 1998 Tr. at 229-30.

In essence, with regard to the 1984-1985 electronic surveillance, the DEA and the FBI were necessary, but reluctant partners. The FBI was determined not to violate the sacred promise of confidentiality that it made to all of its informants, including Bulger and Flemmi. The prosecutors and members of the DEA believed that Bulger and Flemmi were FBI sources, but accepted the fact that the Bureau would not divulge or discuss their status. In the circumstances, the prosecutors and DEA agents sought to minimize the information about the investigation that was disclosed to the FBI in order to limit the risk that the confidentiality of their investigation would be compromised. Ring sought to insulate everyone at the FBI except Rossi and Carter from the investigation in order to avoid blame if the investigation failed. In the process the government recklessly disregarded its legal obligation to include in its application the legally required "full and complete statement" concerning the necessity for electronic surveillance.

The FBI also ignored the essential point of the Attorney General's Guidelines, which required consultation with the Assistant Attorney General for the Criminal Division when the Bureau learned that an informant had engaged in criminal activity, but wished to continue to utilize the informant rather than share the pertinent information with another law enforcement agency. See Ex. 274 (Under Seal), Manual § 137-17(G)(1 & 2) (1-12-81); § 137-16(G)(1 & 2) (3-28-84). This violation of the Guidelines contributed to a violation of Title III as well.

The Supreme Court has held that Title III, "plainly calls for the prior, informed judgment" of prosecutors, rather than investigators, before an application for electronic surveillance may be filed. Giordano, 416 U.S. at 515. The exercise of such judgment by, in this case the Assistant Attorney General for the Criminal Division, "is interposed as a critical precondition to any judicial order." Id. at 516.

In the instant case, if the facts necessary for an informed judgment to have been made had been disclosed by the FBI, or if the well-known issue of Bulger and Flemmi's status as sources had even been discussed with the FBI, no application for authority to conduct electronic surveillance targeting them would have been filed in 1984. If, however, an application with the required "full and complete statement" concerning the necessity for electronic surveillance had been submitted, the request for a warrant would have been denied.

Mere discussion with the FBI of the implications of Bulger and Flemmi's status as sources for the investigation that the DEA was leading and for the proposed electronic surveillance would, in 1984, have probably caused the termination of the investigation and, in any event, would have prevented any application for electronic surveillance from being made. More specifically, the DEA agents and the prosecutor primarily responsible for the investigation each now acknowledges that if he had been told officially that Bulger and Flemmi were FBI informants, a high level decision, involving officials of the Department of Justice, would have had to be made concerning whether to continue that investigation. Boeri May 14, 1998 Tr. at 96-97; Crossen May 13, 1998 Tr. at 11-16. They also recognize that if Bulger and Flemmi were valuable sources for the FBI, there was a good chance that they would not have been allowed to proceed with their investigation. Crossen May 13, 1998 Tr. at 11-16.

Their understanding is accurate. Indeed, if Stutman had received confirmation that Bulger and Flemmi were FBI informants and were able to talk to Greenleaf about it, he would have abandoned the investigation. Stutman Apr. 15, 1998 Tr. at 169-71. Stutman would have asked Greenleaf whether the FBI was aware of the criminal activity in which Bulger and Flemmi were engaged; whether Bulger and Flemmi were involved in any of the activity under investigation in connection with their relationship with the FBI; whether the FBI was going to compromise any continuing investigation; and, most importantly, whether the DEA's investigation would interfere with the FBI's efforts. Id. Candid responses would have been "yes" to each of these questions. Moreover, the FBI would have undoubtedly emphasized the great value of Bulger and Flemmi to the Bureau in its war against the LCN. In the circumstances, Stutman would have deferred to the FBI rather than invest a great deal of time and money in investigating Bulger and Flemmi. Id. This decision would have been supported, if not dictated, by DEA Headquarters, where McCurnin would have had the responsibility to work out any conflict with his former boss, McWeeney. McCurnin Sept. 15, 1998 Tr. at 79-80.

If, however, Crossen were somehow permitted to submit an application for electronic surveillance targeting Bulger and Flemmi, he would have insisted on sharing with the judge the information that he had received from the FBI, including their status as informants, any information suggesting that they may have been authorized to commit any of the possible crimes referenced in the application, and the fact that the government did not intend to use any intercepted evidence of possible Title 18 offenses in an investigation or prosecution of Bulger or Flemmi. Id.

Similarly, Weld would not have knowingly permitted a false or misleading affidavit to be filed in support of an application for electronic surveillance. Weld May 27, 1998 Tr. at 108-09. Nor would Assistant Attorney General Trott, who had to authorize the application. Rather, Trott would have required that the court be provided with accurate and complete information in the possession of any agency involved in the joint investigation, including the FBI. Indeed, Trott, now a judge of the Ninth Circuit Court of Appeals, recently participated in a decision suppressing evidence because the government failed to satisfy this responsibility. See United States v. Aviles, 153 F.3d 931, 933 (9th Cir. 1998).

It is clear to the court that if the matter had been discussed, the FBI would have ardently argued that Bulger and Flemmi were invaluable informants, whose status had to be maintained as confidential even if it meant abandoning the investigation or the proposed electronic surveillance. Its conduct in the instant case indicates that the Department of Justice would have given great weight to the importance of honoring the FBI's promise of confidentiality to Bulger and Flemmi. For example, as discussed in § II.33, infra, in 1997, the Acting Deputy Attorney General accepted a serious risk that this court would hold him in civil contempt rather than confirm that Angelo "Sonny" Mercurio, who had been already prosecuted and imprisoned, was an FBI informant. The Department of Justice would have been even more strongly supportive of Bulger and Flemmi in 1984, when disclosure that they were FBI sources could have complicated the pending prosecution of Angiulo and his colleagues. See Ex. 176.

The FBI's determination not to confirm that Bulger and Flemmi were informants or to discuss the implications of their status for the pending investigation, and the acceptance by the DEA and the United States Attorney's Office of the FBI's position, caused the applications for electronic surveillance now at issue to be submitted with reckless disregard for their accuracy and completeness and, as a result, with materially misleading omissions and misstatements. More specifically, at 12:30 p.m. on December 24, 1984 -- the verge of Christmas Eve -- Crossen submitted to United States District Judge W. Arthur Garrity, Jr. an Application, incorporating a 104-page affidavit of Boeri, and a proposed Order authorizing electronic surveillance. Exs. 133, 138, 139. The Order was, without modification, promptly issued. Ex. 139.

The government now claims that there was not a joint DEA-FBI investigation prior to the issuance of the December 24, 1984 Order by Judge Garrity. See Government's Post-Hearing Brief in Opposition to Defendants' Motions to Dismiss Indictment and to Suppress Electronic Surveillance Evidence (Jan. 29, 1999) ("Gov. Post-Hearing Brief") at 319-23. As described earlier, this contention is, as a matter of a fact, incorrect. It is also clearly inconsistent with the representations that the government made to three United States District Judges in 1984 and 1985.

The application for electronic surveillance submitted to Judge Garrity on December 24, 1984 cited Bulger and Flemmi as the first two named targets. Ex. 138, ¶ 3. This was compatible with their status as the "top" -- indeed indispensable -- targets of the investigation. Crossen May 11, 1998 Tr. at 142-43; Exs. 140, 146. Relying on the Boeri affidavit, the Application asserted that there was probable cause to believe that Bulger and Flemmi were engaged in conduct constituting drug offenses in violation of various provisions of Title 21 of the United States Code and in activities constituting an illegal gambling business in violation of several provisions of Title 18 of the United States Code. Ex. 138, at 3-4 (¶ 5(a) and (c)). The Application also asserted that there was probable cause to believe the wiretap of George Kaufman's telephone being proposed would cause the interception of "admissible evidence" of both Title 18 and 21 offenses. Id. Thus, the Application requested authority for the DEA and the FBI to wiretap Kaufman's telephone. Id. at 8.

Because of the information supporting a finding of probable cause regarding Title 18 offenses as specified herein and in the accompanying Application of Assistant U.S. Attorney Gary C. Crossen, Special Agents of the Federal Bureau of Investigation have been assigned to work in conjunction with other agents previously working on this investigation.⁽⁴⁰⁾ Authorization is therefore also sought for the assigned FBI agents to participate in the authorized interceptions.

Ex. 133 at 104 (emphasis added). See also Reilly May 20, 1998 Tr. at 117. Reaffirming the original representation that FBI agents had been assigned to work on the joint investigation before the initial Application was submitted, the February 1, 1985 request for a renewal and expansion of the first Order, which was presented to Judge Joseph Tauro, stated that:

This investigation remains a joint investigation participated in by Special Agents of the Drug Enforcement Administration, . . . Special Agents of the Federal Bureau of Investigation . . ., and detectives of the Quincy Police Department . . . and troopers of the Massachusetts State Police and coordinated by the United States Department of Justice, New England Narcotics Task Force.

Ex. 135 at 2 (emphasis added). The March 1, 1985 request for another extension, which was submitted to Judge A. David Mazzone, reiterated that, "this investigation remains a joint investigation participated in by" the DEA, the FBI, and the Quincy Police Department, and coordinated by the Task Force. Ex. 136 at 2 (emphasis added). The Massachusetts State Police, were for the first time, not included.

Consistent with the representation that the FBI was involved in the investigation, the December 24, 1984 Boeri affidavit in support of the Application included information that came from the FBI and, in some instances, was attributed to FBI sources. United States v. Salemme, 978 F. Supp. 343, 348 (D. Mass. 1997); May 15, 1998 Tr. at 6-7; Exs. 45, 133 at 47 (¶ 75), 79 (¶ 108).

As described earlier, the DEA considered only Bulger and Flemmi to be the "subjects of this investigation." Ex. 146. The DEA agents felt that bugging Bulger's automobile and residence would be essential if the investigation were to succeed. Id. The December 24, 1984 Application, however, sought only authority to wiretap Kaufman's telephone. Ex. 138. As described earlier, the evidence convinces the court that no application for authority to wiretap Kaufman's telephone would have been made except as part of the DEA's effort to develop cases against Bulger and Flemmi. As required by law, however, the application also identified other individuals who were expected to be overheard engaging in criminal conversation with Kaufman. See 18 U.S.C. § 2518(1)(b) (1994); Ferrara, 771 F. Supp. at 1300.

The December 24, 1984 Boeri affidavit in support of the Application rambles over 104 pages. Ex. 133. It was not organized to identify clearly the probable cause to believe that any named target was involved in specific criminal activity or, particularly, that he would be overhead discussing any such activity over Kaufman's telephone. Id.

The failure of the Boeri affidavit to summarize the particular "probable cause" relating to each named target obscured key facts. Most importantly, the form of the affidavit made it very difficult, if not impossible without extraordinary effort, to discern that there was no evidence to establish probable cause that Bulger would be intercepted speaking to Kaufman about anything, and only slight evidence to suggest that Flemmi might discuss any narcotics offense on Kaufman's telephone.

More specifically, the Boeri affidavit includes over thirty pages of charts and other information derived from pen registers indicating the telephone numbers dialed by the eight individuals purportedly expected to be overheard on the Kaufman telephone. Ex. 133 at 69-100. At the conclusion of this detailed portion of his affidavit, Boeri stated, among other things, that, "Kaufman has . . . telephonic contact . . . with . . . Bulger." Id. at 100 (¶ 127). Boeri acknowledged in his testimony, however, that the mass of information generated from many months of pen registers on various telephones used by Bulger does not include a single call from Bulger to Kaufman's telephone, or from Kaufman to Bulger. Id. at 69-100; Boeri May 18, 1998 Tr. at 14-16. Thus, contrary to the contentions in Crossen's Application and Boeri's affidavit, there was no probable cause to believe that Bulger would be intercepted discussing anything on Kaufman's telephone. Ex. 133 at 3 and 4 (¶ 7(b) and (d)); 138 at 3-5 (¶ 5(b) and (d)). The statement that such probable cause existed was clearly made with at least reckless disregard for its truth and, the court infers, knowledge that it was not true.

The pen registers did indicate that Flemmi and Kaufman spoke often by telephone. Ex. 133 at 69-100. Boeri's 104-page, 136- paragraph affidavit, however, contained only several paragraphs that included, among other things, any informant information that Flemmi was involved with drug dealers. Id. at 7-8 (¶ 12), 8 (¶ 13), 39 (¶ 62 (k),(l),(m)), 40-41 (¶ 62(v),(x)), 44 (¶ 68(d)).⁽⁴¹⁾ The essence of this information was that Flemmi was, with Bulger, extorting money from Frank Lepere and other, unnamed drug dealers, who had to pay Bulger and Flemmi if they wished to stay in business. Id. Extortion is a Title 18 offense. See 18 U.S.C. § 1951 (1994).

In contrast to the skimpy information associating Flemmi with conduct criminalized by Title 21 of the United States Code, the Boeri affidavit contained information that was both more extensive and detailed concerning Flemmi's and Bulger's possible involvement in illegal gambling and loansharking, which are Title 18 offenses. See, e.g., Ex. 133 at 11-20 (¶¶ 21 and 22), 28 (¶ 46(a)), 36-41 (¶ 62), 41-43 (¶ 64), 44-45 (¶ 68), 46-47 (¶¶ 72, 73). Much of this information was derived from the 1980 electronic surveillance of the Lancaster Street Garage. Id. at 11-19 (¶ 21). Massachusetts State Trooper John Naimovitch, who had tipped Flemmi to the Lancaster Street Garage bug, was the source of some of the additional Title 18-related information on which Boeri relied. Id. at 15-16 (¶ 21(B)), 17 (¶ 21(D)), 44-45 (¶ 68), 46 (¶ 72).

The Boeri affidavit contained ample evidence to establish that Flemmi and Kaufman spoke often by telephone, but provided virtually no basis to believe that they discussed any narcotics offenses. The few paragraphs of the Boeri affidavit which the government contends establish probable cause to believe that Bulger and Flemmi were committing narcotics offenses contain no reference to Kaufman. See Gov. Post-Hearing Brief at 347-49. Moreover, the informant characterized as CS-4, who was represented to be "personally acquainted" with Kaufman, characterized him as being "close to Flemmi in the illegal gaming and loansharking business," a "front man" for Bulger and Flemmi in the "hot car" business, and a person they use for their more difficult sports betting. Ex. 133, § 68(h),(i),(k). CS-4 did not claim Kaufman was involved in narcotics activity with Flemmi, Bulger, or anyone else.⁽⁴²⁾

Read closely, the 104-page Boeri affidavit contains only two references to Kaufman's possible involvement with narcotics. More specifically, Kaufman's telephone number was found in an address book seized from a fugitive from drug charges, Salvatore Caruana. Ex. 133, ¶ 41 (at 27). Although pen registers were utilized for more than eight months, however, the Boeri affidavit does not indicate that Caruana ever called Kaufman or was expected to do so. Ex. 133. The pen registers did indicate that Joseph Murray's telephone was called six times from Kaufman's home. Id. at 108. The affidavit did not claim, however, that a wiretap was being sought because there was probable cause to believe Kaufman and Murray would be intercepted discussing any drug offense. Id. Nor did the court make such a finding. Ex. 139.

The Application and Boeri affidavit stated that Assistant Attorney General Trott had authorized the Application. Ex. 138 at 1 (¶ 2). In addition, it was expressly represented that the requested electronic surveillance was necessary to obtain admissible evidence of the Title 18 and Title 21 offenses that Crossen and Boeri claimed there was probable cause to believe Bulger and Flemmi would be discussing on Kaufman's telephone. Ex. 133 at 4 (¶ 8), 101 (¶¶ 129-133); Ex. 138 at 5.

As indicated earlier, Judge Garrity issued the proposed Order authorizing the wiretap of Kaufman's telephone shortly after receiving the Application, and the lengthy, convoluted Boeri affidavit, on the afternoon before Christmas. Viewing the government's submission in a common sense manner, as a reasonable judge, he would have received the following messages. The Assistant Attorney General had made an informed and considered decision to authorize the Application. The Application had as its primary targets Bulger and Flemmi, two notorious, reputed organized crime figures. The FBI was genuinely involved in the investigation and was interested in developing a prosecutable case against Bulger, Flemmi, Kaufman, and others for engaging in illegal gambling and other Title 18 offenses. The DEA was hopeful of generating a prosecutable narcotics case against them as well. Electronic surveillance was necessary to obtain admissible evidence to be used to prosecute Bulger, Flemmi, Kaufman, and others for illegal gambling and other Title 18 offenses. Although there did not appear to be adequate evidence to establish probable cause to believe that conversations concerning any Title 21 narcotics offense would be intercepted by a wiretap of Kaufman's telephone, it was not necessary to rely on the Title 21 information because there was sufficient evidence that conversation concerning conduct that was criminal under Title 18 of the United States Code would be overheard.

The submission of the Application and Boeri affidavit communicating these messages was made with reckless disregard for the truth because they conveyed a message that was inconsistent with the facts as Boeri and Crossen understood them. Boeri and Crossen had obvious reasons to doubt the veracity of the message that they were communicating to the judge and, indeed, did not believe that it was true. More specifically, neither Boeri nor Crossen expected that the FBI would use any evidence generated by the proposed electronic surveillance to try to develop a prosecutable Title 18 case against Bulger or Flemmi. To the contrary, they believed that Bulger and Flemmi were valued informants that the FBI would seek to protect rather than prosecute. Similarly, Boeri and Crossen did not expect the FBI to try to develop a prosecutable Title 18 case against Kaufman, who had been targeted by the DEA for electronic surveillance because he was a close colleague of Flemmi and Bulger.

If Ring had reviewed Boeri's affidavit on behalf of the FBI, he would have recognized that it sent a false and misleading message. More particularly, he would have recognized that it falsely indicated that the FBI wished to investigate Bulger, Flemmi, Kaufman, and others in order to develop a prosecutable case concerning illegal gambling and other Title 18 offenses, and that the requested electronic surveillance was necessary to the success of that investigation. He also would have seen representations that Bulger and Flemmi were engaged in drug trafficking that he seriously doubted were true and that Connolly believed were not true. However, motivated by a desire to minimize the risk that the FBI could be blamed for compromising the investigation if it failed, Ring, on behalf of the FBI, completely and recklessly, disregarded the question of whether false and misleading representations were being made in the Boeri affidavit.

As a result of the foregoing, the Application and Boeri affidavit did not include the "full and complete statement" concerning the necessity for electronic surveillance required by Title III. If it had, neither Judge Garrity nor any other reasonable judge would have granted the request.

The government in this case did far more than fail to inform the issuing judge that Bulger and Flemmi were FBI informants. If the required disclosures had been made, they would have revealed the following.

Bulger and Flemmi were longstanding FBI informants. The FBI had for many years known of their involvement in gambling, loansharking, extortion, and other Title 18 offenses. See, e.g., Ex. 271. Some of this information came from Bulger and Flemmi themselves. Exs. 40, 45, 46, 60, 70, 71, 72, 73, 74, 171, 271. For example, beginning prior to 1970, Flemmi had "told the FBI that he was engaged in illegal gambling and other illegal activity of a non-violent nature." Ex. 271. The government believes that it would be legally permissible to use Bulger and Flemmi's statements against them. Nov. 12, 1998 Tr. at 141-43; Apr. 13, 1999 Tr. at 154-55; Gov. Post-Hearing Brief at 110-23. The FBI, however, would not provide those statements to any prosecutor for use in a grand jury or judicial proceeding. Nor would the FBI use evidence generated by the electronic surveillance being requested to investigate any Title 18 offense Bulger, Flemmi, or Kaufman might be committing. Rather, the FBI regarded its sources' involvement in criminal activity as critical to their maintaining the credibility necessary for them to continue to obtain and provide the FBI important information concerning members of the LCN and other criminals.

Moreover, if fully informed, a reasonable judge would have considerable doubts about whether the activity of Bulger and Flemmi alleged in the Boeri affidavit were criminal at all, rather than authorized by the FBI. More specifically, the judge would have been informed that a review of the FBI files by the FBI's Principal Legal Adviser in Boston would indicate that:

[There were] some [documents regarding information provided by the informant], primarily in the files pertaining to [Flemmi] which pertain to information which clearly reflected that this informant was engaged in illegal gambling activity at a very high level within the Winter Hill Gang. Moreover, it showed that this informant had a close working relationship with the LCN in making policy decisions regarding illegal gambling in the Boston area, which both the Winter Hill group and the LCN agreed to abide by. The serials disclosing this kind of information were dated in the middle 1980's. Similar information from this informant was also found in the file prior to 1980. The information in the file prior to 1970 indicated that this informant told the FBI that he was engaged in illegal gambling activities and other illegal activity of a non-violent nature. In one instance, source advised that he was involved in administering a severe beating to an organized crime figure who had stepped out of line. Because these serials were in [Flemmi's] file, there was a clear indication that FBI Agents were aware of his involvement in illegal activity (primarily illegal gambling activity) and at least had tacitly authorized his participation in such activity. Nowhere in the files pertaining to [Flemmi] was there any express authorization to commit criminal activity from any FBI Agent.

In addition, a fully informed judge would also have doubted whether Bulger, Flemmi, or their colleague Kaufman were genuinely engaged in any narcotics offenses. More specifically, the judge would have known that Ring felt that any indication that Bulger and Flemmi were involved with drugs was "not consistent with [the FBI's] intelligence" regarding them, Ex. 13, and that their handler, Connolly, was concerned that Flemmi's "contacts, at [Connolly's] direction . . . may have resulted in the false belief that [Flemmi] is involved in narcotics," Ex. 8.

If given the foregoing information, no reasonable judge would have entered the Order that Judge Garrity issued on December 24, 1984. It was issued, however, and Bulger and Flemmi quickly learned of the wiretap.

More specifically, soon after December 24, 1984, Connolly, Bulger, and Flemmi were discussing the Kaufman wiretap and other elements of the ongoing investigation. As described earlier, Flemmi acknowledges that he was told by the FBI of the Kaufman wiretap, and the court concludes that it was Connolly, rather than Ring as Flemmi claims, who provided the tip. Flemmi Aug. 24, 1998 Tr. at 86-87. This conclusion is reinforced by the fact that in late 1984 or early 1985, Connolly began meeting with Bulger and Flemmi at Newton's apartment, rather than at Bulger's home or his own, because Connolly needed a new, secure location. Newton May 22, 1998 Tr. at 126-27. It is also likely that Flemmi had access to any information known to Naimovitch, who, in 1980, had alerted him to the bug at the Lancaster Street Garage, and was later convicted on charges of corruption.

Among other things, Connolly reported that on December 26, 1984, he discussed with Bulger and Flemmi the physical surveillances being conducted against them. Ex. 14. (Memorandum dated 12/28/84). This meeting would have provided an occasion for him to discuss the Kaufman wiretap as well. In an ostensible effort to be helpful, Connolly provided Ring and Greenleaf detailed information about the surveillance vehicles Bulger and Flemmi had identified as part of the investigation of them. Id.⁽⁴³⁾ Greenleaf forwarded this information to Stutman. Id. While Greenleaf was motivated by a desire to be genuinely cooperative, the practical effect of telling the DEA that Bulger and Flemmi were alert to its investigation could have been to discourage further efforts.

The DEA was not deterred by the information Greenleaf had furnished. On February 1, 1985, Crossen submitted to Judge Tauro a ninety-five-page affidavit from Boeri seeking renewal of the wiretap on Kaufman's telephone and additional authority to bug Bulger's automobile and residence as well. Ex. 135. The request for authority for a wiretap and two bugs in a single application may have been unlawful. See Feb. 6, 1997 Tr. at 5-6, 16-27. In any event, it made the affidavit confusing on the issues of probable cause, among other things, by obscuring key facts.

The February 1, 1985 Boeri affidavit incorporated his earlier affidavit. Id. at 2 (¶ 5). It stated that the FBI was part of the continuing joint investigation. Id. at 2 (¶ 6). The government acknowledges that the FBI was part of the joint investigation by February 1, 1985. See Gov. Post-Hearing Brief 319-23; Dec. 2, 1998 Tr. at 122-23. There was no indication in Boeri's affidavit that the FBI was not receiving the information being generated by the electronic surveillance for use in its purported investigation of Bulger and Flemmi for possible prosecution on Title 18 charges. Crossen May 13, 1998 Tr. at 76.

In his affidavit Boeri asserted that there was probable cause to believe that "wire communications" of Bulger would be obtained if the wiretap on Kaufman's telephone were reauthorized. Ex. 135 at 3 (¶ 7(b)). This representation was not true and, indeed, was made with at least reckless disregard for the truth. As described earlier, the pen registers had disclosed no calls between Bulger and Kaufman prior to December 24, 1984. Ex. 133 at 69-100; Boeri May 18, 1998 Tr. at 14-16. The initial wiretap of Kaufman's telephone did not intercept any conversations with Bulger either. Boeri May 18, 1985 Tr. at 23, 26-27.

Flemmi continued to call Kaufman in an effort to mask the fact that he had been tipped off to the tap, but engaged only in innocuous conversation. Flemmi Aug. 26, 1998 Tr. at 99-100. John Martorano, who was still a fugitive, was also intercepted. Jan. 8, 1998 Tr. at 96.

Boeri's February 1, 1985 affidavit also claimed that there was probable cause to believe that if the requested electronic surveillance was authorized, Bulger, Flemmi, Kaufman, and the other named targets would be intercepted discussing the distribution of marijuana and cocaine. Ex. 135 at 3 (¶ 7(a) and (b)). As Boeri now acknowledges, the prior month of intercepts, however, had provided no evidence that Bulger and Flemmi would discuss drug activity on Kaufman's telephone. Boeri May 15, 1998 Tr. at 23-24. Moreover, the ninety-five-page affidavit includes only two references to drugs at all. In one instance Kaufman said that a bookmaker, who Boeri in the affidavit stated had no connections with Bulger, Flemmi, Kaufman, or the Winter Hill Gang, also sold "junk" -- meaning drugs. Ex. 135 at 14-15 (¶¶ 24 and 25); Boeri May 15, 1998 Tr. at 18-23. In the other instances, Kaufman asked an unknown male if an individual named "Allen" was in the "junk" business and was told "yes." Id. at 70 (¶ 128). If Boeri's affidavit had been presented in support of a request for authority to conduct electronic surveillance for the purpose of developing only a Title 21 narcotics prosecution, it would have been obviously insufficient to justify an extension or expansion of the original order. Thus, the false and misleading message, conveyed by the affidavit, that the FBI was conducting a genuine Title 18 investigation of Bulger, Flemmi, Kaufman, or anyone else was, again, highly material.

Judge Tauro issued the requested order authorizing the continued wiretap on Kaufman's telephone and the bugging of Bulger's automobile and residence as well. For the reasons described earlier, neither he nor any other reasonable judge would have done so if the required full and complete statement concerning necessity had been made.

While the wiretap on Kaufman's telephone did not intercept Bulger, it did result in Zannino being overheard. Ex. 176. O'Sullivan was informed and alarmed because the interception had the potential to complicate the pending prosecution of Zannino. Id. O'Sullivan consulted Ring. Id. To prevent further problems, at some point prior to February 7, 1985, Ring was asked to remove Carter and Rossi from the work they were doing with the DEA, and to instruct them not to discuss the statements Zannino had been overheard making with anyone at the FBI or to introduce them into the FBI's files. Id. The court concludes that this was done.

Not surprisingly, there was a "stunning lack of success" from the bugging of Bulger's home and automobile. Crossen May 12, 1998 Tr. at 153. Indeed, the government has represented that it does not wish to offer any evidence from these bugs in its case in chief. Gov. Post-Hearing Brief at 316-17; Nov. 20, 1998 Tr. at 113. The bug in Bulger's car, however, did intercept Flemmi telling Bulger that Connolly had become "a little . . . nervous." Ex. 136 at 18 (¶ 21); Crossen May 12, 1998 Tr. at 149-50.

On March 1, 1985, Crossen presented to Judge A. David Mazzone a forty-page affidavit of Boeri seeking authority to extend the bugs in Bulger's home and automobile, but not the wiretap on Kaufman telephone. Ex. 136. The prior applications and affidavits were incorporated in that request. Id. at 2 (¶¶ 5 and 6). As indicated earlier, Boeri again represented that the FBI was part of the joint investigation and that there was probable cause to believe that evidence concerning illegal gambling, as well as narcotics offenses, would be intercepted. Id. at 2 (¶ 7) 3-5 (¶ 8). Boeri again claimed that electronic surveillance was necessary to obtain evidence of these offenses. Id. at 5 (¶ 10).

However, it appears that the representation that the FBI was still involved in the joint investigation was false because, as directed by O'Sullivan, Rossi and Carter were no longer participating. In any event, contrary to the message communicated by the affidavit, the FBI continued to have no intention of utilizing evidence obtained from the electronic surveillance in any investigation of Bulger or Flemmi. Not knowing this, or any of the other material information that the required full and complete statement concerning necessity would have included, Judge Mazzone entered the government's proposed order.

The extended authorization for the bugs, however, was of no value to the investigation. On March 11, 1985, Bulger found the bug in his car. Ex. 142. Just before he pulled it out, Boeri and Reilly, who were monitoring the bug, heard Bulger say: "He's right. They did put a bug in the car." Ex. 145; Reilly May 20, 1998 Tr. at 16. That statement reinforced Reilly's belief that Bulger and Flemmi were FBI informants. Reilly May 20, 1998 Tr. at 16.

As the electronic equipment cost $15-20,000, Boeri and Reilly rushed into the garage to recover it. Ex. 142; Weld May 26, 1998 Tr. at 69. Bulger expressed surprise that they were able to bug his automobile. Ex. 142. Bulger also told the agents: "We're all good guys here. You're the good good guys, and we're the bad good guys." Boeri May 18, 1998 Tr. at 81-83; Weld May 26, 1998 Tr. at 69. Bulger did not, however, claim to have immunity from investigation by the DEA or prosecution if a case against him could be developed. Ex. 142.

Two days later, on March 13, 1985, Bulger approached Boeri, who was conducting a physical surveillance him. Ex. 141. Bulger knew Boeri's name and the location of the supposedly secret site where the monitoring of the wiretaps and bugs had been conducted in an effort to maintain the confidentiality of the investigation. Id.

At this point, the DEA and the United States Attorney's Office accepted that the confidentiality of the investigation generally, and the electronic surveillance particularly, had been compromised. Ex. 145; Reilly May 20, 1998 Tr. at 16; Weld May 26, 1998 Tr. at 68. Although the DEA made some follow-up efforts, its lengthy and expensive investigation was deemed unsuccessful and was eventually closed. Reilly May 20, 1998 Tr. at 119; Weld May 26, 1999 Tr. at 70; Ex. 145. The DEA shared with the IRS some of the information concerning Bulger and Flemmi that it had developed. Ex. 145; Reilly May 20, 1998 Tr. at 119. Believing that the FBI had compromised their investigation and would not itself investigate Bulger and Flemmi, the DEA agents did not offer the FBI any evidence that they had obtained relating to potential Title 18 offenses, including information concerning the Valhalla. Reilly May 20, 1998 Tr. at 119. Nor did the FBI ever ask for any such evidence. Id. at 46-47.

In an attempt to give some redeeming value to his futile investigation, Boeri decided to try to recruit Flemmi and Bulger as informants for the DEA. Boeri May 11, 1998 Tr. at 111. Boeri sent Flemmi and Bulger cards congratulating them on frustrating the DEA's investigation and a box of cigars. Boeri May 18, 1998 Tr. at 109-12. He also gave Flemmi, a former paratrooper, a tape of army motivational marching chants. Id. Boeri's efforts were unavailing, however. Bulger and Flemmi evidently recognized that they had a good deal with the FBI and were not interested in working with the DEA.

In April 1985, Connolly, Morris, Condon, Bulger, and Flemmi met for dinner at Morris' home in Lexington, Massachusetts. Flemmi Aug. 20, 1998 Tr. at 5; Condon May 1, 1998 Tr. at 108-10. The dinner was held several weeks after Bulger found the bug in his car and it had become obvious that the investigation led by the DEA would not succeed. Bulger and Flemmi brought a bottle of wine and, for the first time, also a bottle of champagne. Flemmi Aug. 20, 1998 Tr. at 10.

The dinner was evidently planned to celebrate the failure of the effort to investigate Bulger and Flemmi. Ring was not invited to attend. Meetings with Ring, Flemmi had found, were "strictly business." Flemmi Aug. 27, 1998 Tr. at 64, Aug. 28, 1998 Tr. at 5-6. Condon, however, was included. He was then serving as the Undersecretary of Public Safety for the Commonwealth of Massachusetts. Condon May 1, 1998 Tr. at 108-10. The Massachusetts State Police was one of several agencies he shared responsibility for supervising. Id. at 92-94.

Condon spent about an hour eating dinner and participating in the discussion before leaving. Condon May 1, 1998 Tr. at 117. The conversation then turned to the Angiulo wiretaps. Flemmi Aug. 20, 1998 Tr. at 14-15, Aug. 26, 1998 Tr. at 153-56. Flemmi and Bulger knew that they had been discussed in some of the intercepted conversations. Id. They again expressed concern about whether the information on those tapes might be used against them in an investigation or prosecution. Id. Morris and Connolly told them not to worry because they would not be prosecuted for anything on those tapes. Id. Morris went on to say to Bulger and Flemmi, "[y]ou can do anything you want as long as you don't 'clip' anyone." Id.; Ex. 92, ¶ 2; Condon May 1, 1998 Tr. at 122-25; Newton May 28, 1998 Tr. at 140-41. Morris was not inebriated when he made this statement. Flemmi Aug. 20, 1998 Tr. at 10, Aug. 27, 1998 Tr. at 72; Morris Apr. 23, 1998 Tr. at 88-90.

Morris' comment contributed to Flemmi's understanding that the FBI would protect him from investigation of and possible prosecution for any crime he might be a threat to commit other than murder -- although, as described previously, in the Halloran matter the Bureau had done even that. Ex. 92.

Morris testified that he did not recall telling Bulger and Flemmi that they could do anything they wanted as long as they did not "clip" anyone and doubted that he did so. Morris Apr. 29, 1998 Tr. at 90-91. Nevertheless, the court finds that the statement, as related by Flemmi, was made.

It is possible that Morris merely forgot a comment that he made thirteen years before his testimony. If the matter does not involve a failure of recollection, however, Morris has again lied. Morris acknowledges that he has a long history of lying to protect himself. Morris Apr. 27, 1998 Tr. at 151, 163, Apr. 30, 1998 Tr. at 90. He lied to his superiors about his conduct concerning the Lancaster Street Garage investigation. Morris Apr. 30, 1998 Tr. at 85. Morris also lied to SAC Ahearn when he denied that he had advised Ring to close Bulger as an informant. Id. at 91-92. In addition, as discussed in § II.27, infra, after telling a Boston Globe reporter that Bulger was an FBI informant, Morris lied in claiming that he was not the source of that and other leaks in interviews with agents from the FBI's Office of Professional Responsibility ("OPR") and later in two written, sworn statements, although he knew that his conduct was criminal. Morris Apr. 27, 1998 Tr. at 151-56, 163, Apr. 30, 1998 Tr. at 93. In each instance Morris was motivated by a desire to protect himself and to avoid possible prosecution. Morris Apr. 27, 1998 Tr. at 51.

Morris had the same incentive to lie about whether he in fact or in effect told Bulger and Flemmi, in 1985, that they could do anything they wanted, as long as they did not kill anyone, and would be protected. Flemmi's claim that this statement was made contributed to the court's decision to grant his motion for an evidentiary hearing on the issue of immunity. Ex. 92. When Morris made his proffer it was evident that he might not be given immunity by the prosecutors in exchange for his testimony if he corroborated Flemmi's claim on this point. His concern was not only understandable, it was well-founded. As discussed in § II.33, infra, the court has since determined that the government's refusal to grant Connolly immunity was motivated in part by genuine interest in investigating him for possible prosecution, and also in part by "a desire not to facilitate the introduction of evidence that the government expects would substantially corroborate Flemmi and might hurt its case, as well as embarrass the government." Oct. 16, 1998 Tr. at 23.

Although the court need not decide whether Morris' failure to acknowledge the now controversial statement that he made to Bulger and Flemmi in April 1985 is an innocent failure of memory or another willful lie, the court does find Flemmi's characterization of that statement to be correct.

In addition, at the April 1985 meeting Morris and Connolly told Bulger and Flemmi about sources that the FBI and other law enforcement had who were members or associates of the LCN. Flemmi Aug. 20, 1998 Tr. at 16-17. Bulger and Flemmi were encouraged to stay away from those individuals in order to protect themselves. Id.

Shortly before they left Morris' home, Bulger told Flemmi that he wanted to loan Morris $5000 to help him out with financial problems Morris was having. Id. at 19-21; Ex. 30, ¶ 16. Flemmi gave Bulger $3000. Id. Morris was having financial difficulties due to medical problems in his family. Morris Apr. 23, 1998 Tr. at 142-43. Bulger told Morris that he wanted to help him out and gave Morris $5000 in cash. Id. at 142-44, Apr. 29, 1998 Tr. at 56-57, 67; Ex. 30, ¶ 16; Flemmi Aug. 20, 1998 Tr. at 19-21, Aug. 28, 1998 Tr. at 35; Newton June 2, 1998 Tr. at 7-8.

Morris never returned or repaid the $5000. Morris Apr. 23, 1998 Tr. at 144; Ex. 30, ¶ 16; Flemmi Aug. 20, 1998 Tr. at 20. Nor was he ever asked to do so by Flemmi or Bulger. Flemmi Aug. 20, 1998 Tr. at 20.

In June 1985, the trial of Gennaro Angiulo and several of his codefendants began. Kottmyer Aug. 13, 1998 Tr. at 165, Aug. 14, 1998 Tr. at 139; Flemmi Sept. 15, 1998 Tr. at 35, Nov. 20, 1998 Tr. at 63-64. It culminated in Angiulo's conviction in February 1986. Nov. 20, 1998 Tr. at 63-64.

With Connolly's assistance, Bulger and Flemmi had evaded the DEA's efforts to have them prosecuted and continued to be highly valued allies in the FBI's war against the LCN. The character and quality of this alliance was exemplified by a dinner that Bulger and Flemmi had with Connolly, Nick Gianturco, Jules Bonovolenta, and Joe Pistone.

At about the time of the Angiulo trial, Bonovolenta and Pistone, who were from New York, were in Boston to review some documents in preparation for possibly testifying as experts in the Angiulo case or some other LCN prosecution. Gianturco Jan. 15, 1998 Tr. at 125-26, 156-57, Apr. 20, 1998 Tr. at 26, 35. Bonovolenta was the ASAC in New York City, who was in charge of the FBI's Organized Crime Division. Gianturco Jan. 20, 1998 Tr. at 83-84. Pistone, who had recently left the FBI, was renowned for having, as "Donnie Brasco," infiltrated the LCN in New York City and for testifying in many successful Mafia prosecutions. Id. at 82, Gianturco Jan. 20, 1998 Tr. at 130-31, Apr. 20, 1998 Tr. at 26-30, 34. As a result, it was understood that there was a $500,000 "contract" out on Pistone's life. Gianturco Apr. 20, 1998 Tr. at 28-29. Thus, precautions were being taken to assure the secrecy of Pistone's location and activities. Id.

Gianturco had worked with Bonovolenta and Pistone in New York. Gianturco Jan. 15, 1998 Tr. at 125. With Connolly's concurrence, when his friends were in Boston, Gianturco invited them to his home for dinner with Bulger and Flemmi. Id. at 159-60. Gianturco had complete confidence that Bulger and Flemmi would do nothing to endanger Pistone. Gianturco Apr. 20, 1998 Tr. at 30. Pistone had recently received the Attorney General's Award for Distinguished Service. Id. at 28. By being invited to dine with Pistone and Bonovolenta, Flemmi and Bulger could also rightly regard themselves as honored members of the government's team combatting the LCN.

Bulger and Flemmi soon validated again their value to the FBI by making an indispensable contribution to the successful effort to incarcerate Angiulo's successors in the Boston LCN -- Joe Russo, Vincent Ferrara, and Robert Carrozza. Indeed, ultimately Flemmi particularly contributed to the successful prosecution of Raymond J. Patriarca, who had, as Flemmi reported, succeeded his father as Boss of the Family.

By mid-1986 Angiulo and his codefendants had been convicted and Zannino, who was ill, was incapacitated while awaiting trial. The LCN in Boston was diminished and in disarray. This created a temporary vacuum which, according to their plan, Flemmi and Bulger sought to fill by expanding their own criminal activities.

More specifically, Flemmi understood that he and Bulger had formed a partnership with the FBI, which had "taken down" the LCN in Boston. Flemmi Aug. 28, 1998 Tr. at 119-20. This provided an opportunity for Bulger and Flemmi to take over criminal activities in Boston that had previously been controlled by the LCN. Id. With the protection of the FBI, Bulger and Flemmi could operate very profitably. Id., Aug. 25, 1998 Tr. at 31. Basically, Flemmi had been led to reasonably understand that he could "extort people, earn a living as a criminal, and not get prosecuted if [he gave] information to the FBI." Id. This was an important benefit of his bargain with the FBI because, for Flemmi, making money was "the name of the game." Id.

After Angiulo was convicted, the FBI's conduct continued to be consistent with Flemmi's understanding of his arrangement with the Bureau. For example, one of Morris' informants reported that bookmakers who were "with" Angiulo were receiving very little direction from the remnants of his regime; Flemmi was challenging the LCN by "taking over" its bookmakers and numbers agents; and the LCN was unable to do anything to stop him. Ex. 61. Yet the FBI made no effort to investigate these allegations.

Initially, the LCN sought to deal with the situation described by Morris' informant by proposing to make Flemmi a member. Ex. 123. Flemmi, however, remained uninterested in the offer. As an informant told Connolly:

Flemmi would not want membership inasmuch as he is an independent person and would not want to be subject to the rules of the Mafia . . . Flemmi does not need the headaches and he, along with Whitey Bulger, are "their own bosses with their own things going for them."

The LCN was not, however, the only organization interested in formalizing its relationship with Flemmi. In July 1986, the Bureau in Boston requested authority from FBI Headquarters to reopen Flemmi as an informant. Id. at 89-90; Ex. 110. The request described Flemmi as a proposed member of the LCN, who "remains in a position to provide valuable information at the policymaking level of the Boston LCN." Id.⁽⁴⁴⁾

Connolly, Ring, and their colleagues were very interested in targeting and immobilizing Angiulo and Zannino's successors. As predicted in the request that he be reopened, Flemmi proved to be an invaluable asset in that effort.

Beginning in April 1986, Flemmi reported to Connolly on the activities of Russo and Ferrara, who were emerging as the new leaders of the LCN in Boston, and their colleagues, Carrozza, Mercurio, Dennis Lepore, and Biagio DiGiacomo. Exs. 16, 17, 18, 117, 118, 128. He also provided information concerning LCN members in Providence, including Patriarca, Matthew Gugliametti, and Anthony St. Laurant. Exs. 117, 211.

As Flemmi explained to Connolly, the LCN in Boston wanted to establish a cooperative relationship with Bulger and him in order to minimize the threat that they posed. Ex. 117. Mercurio, who was already friendly with Bulger and Flemmi, took a leading role in this effort. Id. Flemmi also reported that Mercurio, who had recently been released from prison, was bitter toward the Angiulos. Id.

Flemmi told Connolly that the LCN wanted to meet with Bulger and him to discuss the payoff on the illegal numbers and other gambling issues. Ex. 117. The FBI was very interested in the information such meetings would generate.

Flemmi subsequently met several times with members of the Boston LCN in a storeroom of Vanessa's, a restaurant owned by Mercurio. Exs. 16, 17, 118. Flemmi told Connolly about at least some of the meetings in advance. Exs. 117, 118. As requested by Connolly, he also reported on what was discussed. Flemmi Aug. 29, 1998 Tr. at 91-95; Exs. 16, 17, 118. Among other things, Flemmi described the LCN's plans concerning: illegal football cards; changing the payoff odds on the illegal numbers; the extortion of bookmakers generally; and, particularly, a scheme to obtain money from "Doc" Sagansky, who was a major bookmaker. Exs. 16, 17, 118.

The FBI promptly decided to target Vanessa's for electronic surveillance. In addition to utilizing Flemmi and Bulger to obtain information necessary for the application for a warrant, Flemmi was asked to obtain valuable logistical information concerning Vanessa's. Flemmi Aug. 20, 1998 Tr. at 95. For example, at Connolly's request, Flemmi reported that participants accessed the storeroom by taking a service elevator, and that the storeroom had an alarm system which was not operative. Exs. 16, 17. At Ring's request, Flemmi provided the FBI with a detailed diagram of the storeroom. Flemmi Aug. 20, 1998 Tr. at 94-95; Carter Aug. 17, 1998 Tr. at 55; Ex. 209.

As a result of these requests, Flemmi correctly understood that the FBI was planning to bug Vanessa's. Flemmi Aug. 20, 1998 Tr. at 95; Ring June 15, 1998 Tr. at 17-18. Connolly told Flemmi when the bug was installed. Id. at 95-96. As a result, Flemmi and Bulger stayed away from Vanessa's and, as with 98 Prince Street, neither was intercepted. Id.; Carter Aug. 8, 1998 Tr. at 56, 106.

In contrast to 98 Prince Street, however, there is no evidence there was any discussion of whether any evidence acquired by the bug at Vanessa's would be used against Bulger or Flemmi. However, Flemmi believed that because the FBI had asked him to obtain information concerning Vanessa's, as it had asked him to obtain information about 98 Prince Street, he would have the same protection with regard to any evidence intercepted at Vanessa's as he had concerning the evidence intercepted at 98 Prince Street. Flemmi Aug. 27, 1998 Tr. at 70. This understanding was reasonable.

The application for the warrant to bug Vanessa's was filed on October 31, 1986. Ex. 153. The supporting affidavit was submitted by Carter. Id. Most, if not all, of the information contained in the affidavit was provided to Carter by Connolly, who reviewed the affidavit. Flemmi and Bulger were two of the three confidential sources relied upon in the affidavit. Carter Aug. 18, 1998 Tr. at 33; Coffey Aff., Apr. 9, 1997, at 3; Ex. 109. The court concludes that but for the information provided by Flemmi and Bulger, the government could not have obtained the warrant to bug Vanessa's. Carter Aug. 17, 1998 Tr. at 47-48, 51-52, 54, 105; Ex. 207.

Ring generally supervised the preparation of the affidavit. Ring June 15, 1998 Tr. at 14. In addition, the affidavit was reviewed at FBI Headquarters. Carter Aug. 17, 1998 Tr. at 107-09.

At some point in 1985, Carter had been told that Bulger and Flemmi were FBI informants. Id. at 102. He understood that they were two of the three sources who had supplied much of the information for his affidavit. Id. at 51-52, Aug. 18, 1998 Tr. at 33; Coffey Aff., Apr. 9, 1997, at 3. For example, Carter knew that Flemmi was the source of the diagram of Vanessa's that he included in his affidavit. Id. at 105. It was Carter's understanding that Flemmi's statements to Connolly could not be used against him, at least directly. Id. at 164-65. The affidavit was sent to FBI Headquarters in a manner that revealed that Bulger and Flemmi were both two of the named targets and two of the three referenced sources. Id. at 107-09.

Morris testified that it was a common practice for the FBI to name sources who had provided information for an affidavit as targets in applications seeking authority to conduct electronic surveillance in an effort to mask their status as informants. Morris Apr. 30, 1998 Tr. at 171-72. This practice was followed with regard to Bulger and Flemmi in Carter's affidavit concerning Vanessa's.⁽⁴⁵⁾ In the process, the FBI intentionally, and with reckless disregard for the truth, prepared an affidavit that was false and misleading with regard to Flemmi and Bulger, and caused it to be authorized for filing and submitted by attorneys in the Department of Justice who were not informed of its deceptive character. Carter Aug. 17, 1998 Tr. at 110; Weld May 27, 1998 Tr. at 109-12.

For example, the application and Carter affidavit represented that there was probable cause to believe that Bulger and Flemmi, among others, were conspiring with Russo, Ferrara, and their associates to conduct an illegal gambling business and a RICO enterprise. Ex. 153. The submissions also stated that Flemmi and Bulger were expected to be intercepted if the request to bug Vanessa's was allowed. Id. The application and affidavit represented that the requested electronic surveillance was necessary with regard to Bulger and Flemmi, among others. Id. The clear import of the submissions was that the FBI would employ any evidence that it intercepted to try to develop a prosecutable case against Flemmi and Bulger, as well as the other named targets.

Based on the collective knowledge of the participants, the FBI well knew that none of this was true. There was no reason to believe that Flemmi or Bulger would visit Vanessa's while it was bugged and be intercepted. Carter certainly did not expect that they would. Carter Aug. 18, 1998 Tr. at 166. Moreover, in view of their close cooperation with the FBI concerning Vanessa's, it was doubtful that any conversation in which Flemmi and Bulger might engage there could properly be deemed criminal activity rather than conduct authorized by the government. In any event, with regard to necessity, the FBI had relevant statements by Bulger and Flemmi that it now claims are not immunized. Nov. 12, 1998 Tr. at 141-43; Apr. 13, 1999 Tr. at 154-56; Gov. Post-Hearing Brief at 110-123. In addition, the FBI had no intention of investigating Flemmi or Bulger based on any information generated by the bugging of Vanessa's.

While the FBI knew that the submissions seeking authority to bug Vanessa's were deceptive, the Department of Justice attorneys who were involved in the matter did not. Honoring the FBI's promise of confidentiality to Bulger and Flemmi, Carter did not tell the Strike Force Attorney with whom he was working, Jane Serene, that Flemmi and Bulger were FBI informants. Carter Aug. 17, 1998 Tr. at 110. Thus, he did not discuss with her the legality of including them as both sources and purported targets in the application and affidavit. Id. Nor did he discuss this issue with anyone at the FBI. Id.

In October 1986, Weld became the Assistant Attorney General in charge of the Criminal Division. Weld May 26, 1998 Tr. at 5. As such, he authorized the application for the Vanessa's bug. Ex. 153. Weld reviewed the application before authorizing its submission. Weld May 27, 1998 Tr. at 50. His prior experience in Boston, including the unsuccessful 1984-85 electronic surveillance targeting Bulger and Flemmi, provided reason for him to question the FBI's representations concerning them, but Weld did not. Weld May 27, 1998 Tr. at 92, 97-98. Nor was Weld told that Bulger and Flemmi were two of the informants relied upon in the affidavit, as well as named targets. Id. at 51-52.

If Weld had understood that Bulger and Flemmi were informants, he would have seriously questioned the necessity for the proposed electronic surveillance. Id. at 67-68, 88, 110-13. Even if they were reluctant to testify voluntarily, Weld would have considered seeking an order providing them immunity and compelling them to do so. Id. at 87. In any event, Weld would not have permitted the application and affidavit which were false and misleading with regard to Bulger and Flemmi to be filed. Id. at 110-13.

Weld understood that deliberately providing false information in an application for a warrant could constitute perjury and, in any event, would "undercut the entire process that Congress enacted . . . to hedge . . . the . . . authorization of electronic surveillance." Id. at 108-09. Thus, if properly informed, Weld would have insisted that all of the false and misleading statements in the proposed affidavit be corrected or deleted, or that the application not be submitted to the court. Id. at 87-88, 109-12.

In essence, if Weld had requested or received all of the relevant information regarding Bulger and Flemmi, a politically accountable official would have made the informed judgment concerning the propriety of the proposed application that Title III contemplates. The FBI's determination both to honor its promise not to disclose to anyone outside the Bureau that Bulger and Flemmi were informants and to perpetuate their ability to serve as sources prevented that informed judgment from being made with regard to Vanessa's.

The Application and Carter affidavit were submitted on October 31, 1986, and approved by Judge William Young the same day. Ex. 153; Coffey Aff., Apr. 9, 1997, at 3. The government received a series of extensions and the storeroom of Vanessa's was bugged until June 1987. Flemmi and Bulger provided information relied upon in some, but not all, of the requests for extensions. Coffey Aff., Apr. 9, 1997, at 3. The electronic surveillance of Vanessa's was terminated after Mercurio secretly found the bugs, and reported to Bulger that he, Ferrara, and others had begun making exculpatory statements in an effort to help themselves. Ex. 175.

Before it was discovered, the electronic surveillance of Vanessa's was very productive. Among other things, the bug intercepted the successful extortion of $250,000 from Sagansky and his colleague Mo Weinstein that Flemmi had predicted. Ring June 4, 1998 Tr. at 108-09; Kottmyer Aug. 12, 1998 Tr. at 61. That evidence was eventually used as a cornerstone of the successful prosecution of Russo, Ferrara, Mercurio, and other members of the Boston LCN. See Carrozza, 871 F. Supp. at 156. In addition, as described in § II.29, infra, after Vanessa's was searched pursuant to a warrant issued in the spring of 1987, the fruits of the bug gave the FBI powerful leverage in its successful effort to convert Mercurio promptly into an informant. Ring June 15, 1998 Tr. at 45; Ex. 113. As Flemmi reported, the Russo faction knew that the Sagansky-Weinstein extortion was a big problem for them and Mercurio did not want to return to prison. Ex. 165.

In November 1986, James Ahearn became the SAC in Boston. Ahearn May 7, 1998 Tr. at 67. Two months earlier, Larry Potts became an ASAC in Boston, with responsibility for matters relating to the Organized Crime squad, among other things. Potts May 21, 1998 Tr. at 9. Potts ultimately went on to hold several of the highest positions in the FBI, serving as the Assistant Director in charge of the Criminal Division from 1992 to 1995, and as Acting Deputy Director in 1995. Id. at 9-10.

Soon after Ahearn became SAC, Potts told him that, "Morris proposed that Whitey Bulger was no longer providing information of sufficient value to maintain his relationship as an FBI informant and should be considered as a subject of investigation rather than as a confidential source." Ex. 134; Ahearn May 11, 1998 Tr. at 110-11; Ahearn May 7, 1998 Tr. at 92-94; Potts May 22, 1998 Tr. at 12, 26. In response, Ahearn asked Potts to conduct a "suitability review" of Bulger and Flemmi. Ahearn May 7, 1998 Tr. at 93; Potts May 21, 1998 Tr. at 28-29, 133.

At that time, the FBI Manual established criteria that were to be taken into consideration in conducting a suitability review. Ex. 111 (3/28/84, § 137-3.1.1.); Ahearn May 7, 1998 Tr. at 95-98; Potts May 22, 1998 Tr. at 5. Among the factors to be weighed in deciding whether to utilize someone as an informant were:

(a) the nature of the matter under investigation and the importance of the information being furnished as compared to the seriousness of past and contemporaneous criminal activity of which the informant may be suspected.

(e) any record of conformance by the informant to FBI instructions and control in past operations; how closely the FBI will be able to monitor and control the informant's activities insofar as he/she is acting on behalf of the FBI.

In conducting his review, Potts did not consider the range of factors prescribed by the FBI Manual. Potts May 21, 1998 Tr. at 118, 133. He understood that Bulger and Flemmi were engaged in criminal activity. Potts May 22, 1998 Tr. at 9. Potts, however, sought merely to evaluate their productivity, rather than to weigh it against the seriousness of the threat posed by the crimes Bulger and Flemmi were understood to be committing. Potts May 21, 1998 Tr. at 118, 133.

Potts reviewed the files of inserts reflecting information that Bulger and Flemmi had provided, and spoke to Morris, Ring, Connolly, and Nick Gianturco. Potts May 21, 1998 Tr. at 34-37; Ahearn May 7, 1998 Tr. at 93. He did not review the administrative portion of their files, or information provided by other sources concerning Bulger and Flemmi's criminal activity. Potts May 21, 1998 Tr. at 35-37.

Ring and Connolly told Potts that Bulger and Flemmi were providing information that was very significant to the organized crime program. Potts May 21, 1998 Tr. at 31, 54. Referring in part to Vanessa's, they emphasized Bulger and Flemmi's ability to support successful applications for electronic surveillance. Id. at 31, 56. As the Organized Crime squad then had another agent, Vincent Delamontaigne, operating undercover in an attempt to infiltrate the LCN, their potential to help protect him was particularly important. Id. at 31. See also United States v. DiGiacomo, 746 F. Supp. 1176 (D. Mass. 1990).

Thus, Potts advised Ahearn that "the information in [Bulger's informant] file was of substantial value and in his opinion Whitey Bulger should be maintained as an informant rather than a target." Ex. 134; Ahearn May 7, 1998 Tr. at 92-93, 103. Potts evidently made the same recommendation regarding Flemmi. Ahearn concurred in Potts' recommendations.

At that time the FBI Manual also required that FBI Headquarters review at least annually the determination by a field office that an individual was suitable to serve as an informant. Potts May 22, 1998 Tr. at 5-6; Ex. 274 (Under Seal), Manual § 137-16(1)(D)(5) (3-28-84). Potts' advice to Ahearn was given orally. Potts May 21, 1998 Tr. at 33-34. Ahearn's decision to continue Bulger and Flemmi as informants was not memorialized in writing at that time. Thus, it was never reviewed by FBI Headquarters.

This deviation from the requirements of the Manual was, however, immaterial. In Potts' vast experience, FBI Headquarters had never reversed a field office's decision that an individual was suitable to serve as an informant. Potts May 22, 1998 Tr. at 6-8. Essentially, the supervisor of the informant's handler was the "critical," "chief decision maker" regarding whether or not an informant should be opened or continued. Id. at 8. In Potts' experience, the SACs, ASACs, and FBI Headquarters all relied on the squad supervisors to comply with the Guidelines and Manual provisions concerning informants, including the reporting requirements regarding unauthorized criminal conduct by informants. Id. at 809.

Moreover, in Potts' extensive experience no informant had ever been targeted for investigation based on statements he had made to the FBI. Potts May 22, 1998 Tr. at 24-25, 48-49, 64-65. Potts knew of no instance in which an informant's statements to the FBI had been used against him directly or to obtain electronic surveillance targeting him. Id. at 28-29, 48. Nor did Potts know of any instance in which a 209 including information that an informant had furnished to the FBI was provided to another law enforcement agency to prompt or facilitate an investigation of the Bureau's source. Id. at 25, 27, 65.

In any event, following Potts' review and Ahearn's decision, on February 2, 1987, the Boston office of the FBI informed Headquarters that a suitability inquiry had been conducted, that Ring, as Connolly's supervisor, had certified that Flemmi was an appropriate candidate, and that Flemmi was being opened as an informant. Ex. 15. The report noted that Flemmi "has been active in gambling and loansharking." Id. It emphasized his significant contribution to the bugging of Vanessa's and to a police corruption investigation as well. Id.

Following the conclusion of the electronic surveillance of Vanessa's, in December 1987, Flemmi was designated a Top Echelon informant. Exs. 109, 268. In the request that he be elevated to that status, Flemmi was described as the Winter Hill Gang's liaison with the Mafia, a source of valuable information leading to the electronic surveillance of Vanessa's, and a person who would continue to provide high quality information. Ex. 109. In approving the request, FBI Headquarters congratulated the Boston office for developing such a fine informant. Ex. 268. Thus, Flemmi regained the title of Top Echelon informant that he had relinquished when, after being warned of his impending indictments by Rico, he became a fugitive in 1969.

As described earlier, Ahearn had asked Potts to evaluate whether Bulger "should be considered as a subject of investigation rather than as a confidential source." Ex. 134; Ahearn May 11, 1998 Tr. at 110-11 (emphasis added). Potts' conducted his review and reported that "Bulger should be maintained as an informant rather than a target." Id. (emphasis added). As Ahearn's formulation of the question and Potts' answer indicate, the FBI generally viewed the roles of FBI informant and target of FBI investigation to be mutually exclusive. Indeed, as explained in § II.9, supra, that is why Bulger was closed as an informant when he became a primary subject of the race-fix investigation. The lengths to which the FBI would go to protect Bulger and Flemmi because of their value as Top Echelon informants, rather than target them for prosecution, is vividly demonstrated by the manner in which it dealt with Raymond Slinger in 1987.

At that time Slinger was a real estate broker in South Boston. Slinger Sept. 23, 1998 Tr. at 71. In 1986, he was introduced to Bulger and Flemmi, by Kevin O'Neil, to discuss real estate in South Boston. Id. Slinger knew that Flemmi and Bulger were reputed to be violent criminals. Id. at 88-89.

In early 1987, O'Neil asked Slinger to come to Triple O's, a bar that O'Neil owned. Id. at 72. There, in a private room on the second floor, Slinger was reintroduced to Bulger. Id. at 72-73. Bulger told Slinger that he had been hired to kill him, but that Slinger could avoid that fate if he paid Bulger instead. Id. at 73-74. Bulger scornfully rejected Slinger's offer of $2000, saying that his boots cost more than that, and demanded $50,000. Id.

After leaving Triple O's, Slinger called his friend, Boston City Councilor James Kelly. Id. at 132-37. Slinger told Kelly that Bulger and O'Neil were shaking him down, and gave Kelly the details. Id. Kelly indicated that he knew Bulger and O'Neil, and would speak to them. Id. Kelly said that he would try to help Slinger. Id. at 75, 127, 132-37. Kelly subsequently told Slinger that he had spoken to someone, who Slinger understood to be Bulger or O'Neil, and that Slinger should have no further problems, but if he did, Slinger should call "the authorities." Id.

A week or two later, in March 1987, O'Neil again called Slinger and told him that Bulger wanted to see him at Triple O's. Id. at 75-78, 95, 97. This time Slinger took with him his assistant, Arlene Lehane, and a hidden handgun. Id. At Triple O's, Slinger was separated from Lehane and again taken to the second floor. Id. There, Bulger, O'Neil, and Kevin Weeks found the handgun, beat Slinger badly, and berated him for talking about the shakedown. Id. Bulger then put Slinger's loaded gun to the top of Slinger's head, said that if he shot him from that angle there would be no blood shed, and ordered Weeks to get a body bag. Id. Bulger subsequently said, however, that he would give Slinger another chance to get the $50,0000 quickly. Id. Slinger agreed to do so. Id.

Slinger left with Lehane, who had remained downstairs. Id. at 78, 125-26. He was badly swollen and his shirt was ripped. Id. On the ride back to his office, he told Lehane what had happened. Id. at 79.

In March 1987, Slinger borrowed money from his sister and wife, and made an initial $10,000 payment to O'Neil. Id. at 79. He then made weekly payments to O'Neil of about $2000 each, amounting to a total of $25,000 by about May 1987. Id. at 79, 82, 98. The time for the payments was arranged by telephone and they were made, in cash, in O'Neil's automobile. Id.

Although he does not now admit it, it appears that in about May 1987, Slinger called the FBI. Id. at 82; Newton May 28, 1998 Tr. at 64; Ellavsky June 1, 1998 Tr. at 21. See also May 28, 1998 Tr. at 13-14 (Lobby, Under Seal). In any event, the squad responsible for non-traditional organized crime matters, whose supervisor was Bruce Ellavksy, was informed of the ongoing Slinger extortion. Ellavsky June 1, 1998 Tr. at 17, 21. Rod Kennedy was assigned to interview Slinger. Id. at 22; Newton May 28, 1998 Tr. at 6, 8-9. He asked Newton to accompany him. Id. at 9.

Kennedy and Newton interviewed Slinger at his office in South Boston. Slinger Sept. 23, 1998 Tr. at 98. Slinger told Kennedy and Newton exactly what had occurred and about the continuing payments that he was making. Id. at 98-100. Although Slinger expressed concern for himself and his family, he said that he was willing to testify. Newton May 28, 1998 Tr. at 22, 34, 45.

Newton thought that the Slinger matter "looked like a great case." Id. at 44-45. His squad had the jurisdiction to investigate the "Irish Mob," and Bulger was then viewed as its highest member. Id. at 54. There was no pending investigation of Bulger and his colleagues. Id. Slinger was the first of Bulger's victims to provide Newton with any information. Id. at 54-55. Slinger was not only willing to testify, but would "wear a wire" to record incriminating conversations as well. Id. at 55; Ellavsky June 1, 1998 Tr. at 59, 145. In addition, the FBI had the opportunity to interview Lehane, to record O'Neil's telephone conversations with Slinger, and to conduct physical surveillances. Ellavsky June, 1, 1998 Tr. at 52. Ordinarily, the United States Attorney's Office would have been promptly consulted to obtain authority to consensually record Slinger's conversations. Id. at 46, 48.

Newton, however, knew that Bulger was a Top Echelon informant, who was being handled by Connolly and Morris. Newton May 28, 1998 Tr. at 57-58, 61. Newton understood that because Bulger was an informant, supervisors would have to be consulted and something would "have to be worked out." Id. More specifically, he knew that a high level decision would have to be made concerning whether to investigate Bulger. Id. If no effort to develop a case was to be made, Newton expected that something would be done to protect Slinger. Id. Newton was right about all of this.

Newton and Kennedy told Ellavsky what Slinger had said. Id. at 36-37; Ellavsky June 1, 1998 Tr. at 29-30. Ellavsky understood that Slinger was willing to wear a wire and testify. Ellavsky June 1, 1998 Tr. at 59, 145-46. Ellavsky also knew, however, that Bulger was an FBI informant. Id. at 21-22, 195.

Thus, Ellavsky consulted the ASAC who was then his "boss," Potts. Id. at 30-31, 141, 192. Following that discussion, several striking things occurred.

Slinger's allegations and willingness to testify provided, under the Attorney General's Guidelines, a quintessential case for either referring Slinger's allegations to state or local law enforcement, or reporting the desire not to do so to FBI Headquarters and the Assistant Attorney General. The Guidelines, however, were utterly ignored. Instead Potts and Ellavsky evidently decided that no further investigation would be conducted. The FBI did not speak with Slinger again. Id. at 103. Nor was Lehane ever interviewed by the FBI.

Moreover, contrary to both the requirements set forth in the FBI's Manual and standard the FBI practice, no FBI Form 302 (a "302") or other written record was made of the interview of Slinger. Newton May 28, 1998 Tr. at 34-36; Kennedy May 28, 1998 Tr. at 80; Ellavksy June 1, 1998 Tr. at 26. This dereliction of duty minimized the risks that Slinger's information would ever be used against Bulger and that those responsible for protecting him would ever be held accountable for arrogating to themselves the decision to do so.

As Newton had recognized, however, there was plainly a problem presented by the continuing extortion of Slinger. The FBI apparently decided to deal with that problem in the manner that it dealt with the National Melotone matter a decade before -- by telling Bulger to "lay off." Slinger testified that in an effort to protect himself, he promptly told O'Neil that he had been visited by the FBI. Slinger Sept. 23, 1998 Tr. at 82. If this occurred, it would not alone have been enough to deter Bulger, who had for many years been consistently protected by the FBI. Rather, the court infers that Bulger was advised by Connolly to desist. The day after the FBI interview of Slinger, O'Neil told him that he would not have to pay the remaining $25,000 that he owed. Id. at 82, 137.

In 1996, Slinger was interviewed by IRS agents who were investigating the Rakes extortion concerning the South Boston Liquor Mart. Id. at 106; May 8, 1998 Government's Ex Parte, In Camera Motion for Protective Order (the "Motion for Protective Order"). Slinger told them, in detail, about his own experience with Bulger. Id. In September 1996, he testified about this matter before the grand jury, where he was questioned by James Herbert and Brian Kelly, two of the prosecutors in this case. Id.

The IRS interview report and Slinger's grand jury transcript should have been promptly produced in discovery pursuant to the June 26, 1997 Order. See United States v. Salemme, 978 F. Supp. 386, 387-88 & n.5 (D. Mass. 1997). That Order stated, in part, that the government was required to produce to counsel for each defendant, by July 18, 1997:

c) Any document or record that tends to show that Department of Justice and/or FBI regulations or guidelines were, in any way, not complied with concerning Flemmi and/or Bulger. The documents and records covered by this subparagraph include, but are not limited to, materials indicating that: (i) required records were not prepared or maintained; . . .(iv) established procedures for seeking authorization or guidance concerning the participation of an informant in criminal activity were not followed; and/or (v) any required notification to appropriate authorities of unauthorized criminal activity by Flemmi and/or Bulger was not made.

If government agents failed to follow required or customary procedures to record accurately communications with informants relevant to this case, the court will consider the possibility of ordering the government, in the discharge of its Brady obligations, to conduct appropriate interviews as part of its "duty to learn of any favorable evidence known to others acting on the government's behalf." Kyles v. Whitley, 514 U.S. 419, 437, 115 S.Ct. 1555, 1567, 131 L.Ed.2d 490 (1995); see also, United States v. Hanna, 55 F.3d 1456, 1460-61 (9th Cir.1995)(holding that government, as part of its duty under Kyles, was required in particular circumstances to inquire about oral, unrecorded statements between police officers); United States v. Van Nuys, 707 F.Supp. 465, 470 (D.Colo.1989)(holding that deliberate failure to prepare DEA 6 reports of witness interviews constituted a violation of the duty to preserve evidence that deprived defendant of right to a fair trial).

Nevertheless, although the government submitted, ex parte, many documents for in camera consideration by the court to decide whether they should be produced to the defendants, the Slinger documents were not disclosed to the court prior to the commencement of the evidentiary hearings in January 1998. The government did file a motion for a protective order concerning them on May 8, 1998. In seeking authorization not to produce them, the government relied in part on the possibility that providing the documents to the defendants might endanger Slinger and also in part on the assertion that Slinger's "claim" that he was "allegedly visited" by two FBI agents could not be corroborated because there was no 302 concerning an interview of him and the government had "never been able to identify" the agents who reportedly conducted the interview and "did not know in fact whether or not they were FBI agents." Motion for Protective Order at 1-2; May 12, 1999 Tr. at 7-8 (Under Seal).

The court held a series of ex parte, in camera conferences concerning this matter. See May 12, 1998 Tr. (Under Seal); May 13, 1998 Tr. (Under Seal); May 27, 1998 Tr. (Under Seal); May 28, 1998 Tr. (Under Seal). The court informed the government that in view of the defendants' constitutional right to certain discovery, the IRS report of Slinger's allegations, but not the grand jury transcript, would have to be disclosed and, if necessary and appropriate, steps should be taken to provide Slinger protection. May 12, 1998 Tr. at 10 (Under Seal); May 13, 1998 Tr. at 4-5 (Under Seal); May 28, 1998 Tr. at 4-6 (Under Seal). The defendants were given the IRS report on May 28, 1998.⁽⁴⁶⁾ May 28, 1998 Tr. at 12-13.

The government promptly reiterated its contention that the Slinger matter should not be deemed admissible because the government had not been able to find any 302 indicating that he had been interviewed, and neither the FBI nor the OPR team that had conducted an investigation in July 1997 had been able to identify any FBI agent who interviewed him. Id. at 16-18. Thus, the government questioned whether the individuals who visited Slinger "were really FBI agents." Id. at 16. The court expressed skepticism about this argument, based in part on the FBI's handling of the evidence concerning Bulger provided by Joseph Runci, which is discussed in § II.24, infra. Id. at 17. Defense counsel suggested that Newton, who was during the relevant period a member of the squad responsible for investigating non-traditional organized crime and was waiting to resume his testimony, be questioned in the lobby about the Slinger matter. Id. at 25-26. The prosecutors and the court agreed. Id. at 26. It took only three questions by the court for Newton to acknowledge that he and Kennedy had interviewed Slinger. Id. at 29.

The FBI's handling of the Slinger matter was not an aberration. In 1980, Ellavsky joined the squad, known as C-2, which came to have responsibility for non-traditional organized crime investigations, as well as drug cases. Ellavsky June 1, 1998 Tr. at 17-18, 55. He succeeded Morris as the supervisor of that squad in March 1987, and held the position for several years. Id. at 16-17. Although Ellavsky's squad was responsible for investigating nontraditional organized crime groups such as the Winter Hill Gang, no investigation of Bulger or Flemmi was conducted during Ellavsky's tenure on that squad. Id. at 54-55, 110-11; Blackburn May 7, 1998 Tr. at 27. Indeed, rather than investigate Bulger and Flemmi, Ellavksy and his colleagues protected them from investigation in the Hobart Willis case.

James Blackburn was a member of Ellavsky's squad. Id. at 19; Blackburn May 4, 1998 Tr. at 7. In late 1986 or 1987, Blackburn was working with the DEA and other law enforcement agencies in a joint investigation of reputed drug dealer Hobart Willis and others. Blackburn May 4, 1998 Tr. at 8, 22, 29, 45, May 7, 1998 Tr. at 27; Ellavsky June 1, 1998 Tr. at 96. Blackburn received information that Willis was paying "tribute" to Bulger. Blackburn May 4, 1998 Tr. at 9, 31, 34.

Blackburn understood that Bulger was an informant for Connolly. Blackburn May 6, 1999 Tr. at 35, 37. Nevertheless, he promptly spoke to Connolly about the joint investigation of Willis generally and about the allegation that he was paying "tribute" to Bulger particularly. Id. at 36-38, May 7, 1998 Tr. at 47-48. Among other things, Blackburn told Connolly that electronic surveillance of Willis was planned. Blackburn May 4, 1998 Tr. at 37. When that electronic surveillance was conducted, Bulger was not intercepted. Id. at 37-38.

Connolly told Blackburn that Bulger's practice was to extort money from bookmakers, drug dealers, loansharks, and others who could not complain to the police without incriminating themselves. Id. at 18, 43. However, Connolly expressed the view that although Willis was a drug dealer in South Boston, Bulger was not extorting him. Id. at 17, 39. Following his conversation with Connolly, Blackburn never pursued any investigation concerning whether Bulger was indeed receiving payments from Willis. Id. at 45, May 7, 1998 Tr. at 48-49.

The FBI's refusal to investigate Bulger's connection to Willis persisted despite increasingly specific information that Blackburn and Ellavsky received from their informants. Exs. 102, 103, 104, 105. For example, in September 1986, Ellavsky was told that "Willis is tired of having to pay Whitey Bulger $2000 per month to operate his narcotics business in South Boston." Ex. 104; Ellavsky June 1, 1998 Tr. at 73-76. In April 1987, Ellavsky's informant reported that Willis was "paying Whitey Bulger and Stevie Flemmi $4000-$6000 per month to operate in South Boston." Ex. 105. Blackburn testified, however, that he was not given this information for his use in the Willis investigation, even after Ellavsky reviewed a July 1, 1988 302 from one of Blackburn's informants stating that "Willis continues to pay Whitey Bulger a "tax" of $1000 to $3000 per month to operate his cocaine business." Ex. 102; Blackburn May 4, 1998 Tr. at 25, 58, May 6, 1998 Tr. at 7, May 7, 1998 Tr. at 60. The court questions Blackburn's claim that Ellavsky did not provide him with the information from his sources.⁽⁴⁷⁾

In any event, the 209s reflecting the information that the FBI's sources were providing concerning the extortion of Willis by Bulger and Flemmi were not used by the FBI to investigate Bulger or Flemmi; Id. at 14; Ellavsky June 1, 1998 Tr. at 101-04; Blackburn May 7, 1998 Tr. at 27. Nor were the 209s indexed in a way that would make them accessible to any FBI agent searching for source information about Bulger and Flemmi. May 4, 1998 Tr. at 60-66. In addition, the information was not shared with the other agencies or prosecutors involved in the joint investigation of Willis, or used by the FBI in that investigation. Id.; Ellavsky June 1, 1998 Tr. at 97; Blackburn May 7, 1998 Tr. at 26.

On August 5, 1990, one of Blackburn's sources reported that Willis expected to be indicted with Bulger within two weeks. Ex. 103; Blackburn May 6, 1998 Tr. at 22, 24. Willis and a number of other drug dealers in South Boston were soon indicted. May 5, 1998 Tr. at 183; Blackburn May 4, 1998 Tr. at 95; Ellavsky June 1, 1998 Tr. at 86-87. Bulger, however, was not charged.

It was not only the Organized Crime squad and the squad responsible for investigating non-traditional crime that declined to investigate Bulger and Flemmi in order to perpetuate them as informants. The Public Corruption squad did so as well.

Joseph Runci was a Boston Globe reporter and photographer, who also served as an FBI informant handled by James Lavin, an agent on the Public Corruption squad. Ex. 144; Runci May 19, 1998 Tr. at 43. Runci observed City of Boston workers erecting guard rails on the private property of the South Boston Liquor Mart, which he understood was owned by Bulger, a reputed member of organized crime. Runci May 19, 1998 Tr. at 53-56. Runci photographed the workers and their City truck. Ex. 101. Runci May 19, 1998 Tr. at 43. In December 1987, Runci told Lavin what he had seen and provided him the photographs, as well as some additional documents suggesting that Bulger had bought another liquor store through a "straw." Id.; Lavin May 6, 1998 Tr. at 22-30.

Lavin recognized Bulger as a well-known member of organized crime. Id. at 40. He perceived the potential for a promising public corruption investigation of Bulger and indicated to Runci that he was very interested in pursuing the matter. Id. at 82-87, 85; Runci May 19, 1998 Tr. at 56. Indeed, he told Runci that he should expect to be called to testify before a grand jury. Runci May 19, 1998 Tr. at 58-59.

Following his usual practice, Lavin reported what he had learned and received to his supervisor, John Morris. Lavin May 6, 1998 Tr. at 23, 25, 31. Morris told him to "run it by" Connolly. Id. at 32, 58. Lavin understood that he was given this instruction because Bulger was rumored to be an informant being handled by Connolly. Id. at 34, 39, 86.

Lavin met with Connolly and related to him the information Runci had furnished. Id. at 36, 62. Connolly confirmed that Bulger was an informant and told Lavin that he had provided valuable information. Id. This conversation occurred while the electronic surveillance of Vanessa's was being conducted and Connolly's characterization of Bulger's contributions was true. Connolly suggested that Lavin not conduct any investigation. Id. at 76.

Lavin complied with Connolly's suggestion. Contrary to the requirements of the FBI Manual and his uniform practice, Lavin did not prepare a 209 or any other written record of the information Runci had provided. Id. at 24, 26-27, 32, 38, 40, 63, 80-81. Nor did he conduct any investigation. Id. at 60. Rather, he placed the materials in his desk, where they could not be discovered or accessed by anyone who might become interested in investigating Bulger. Id. at 38, 40.

Shortly after Lavin spoke to Connolly, Runci called and told Lavin that the guard rails had been removed. Id. at 43, 62; Runci May 19, 1998 Tr. at 57-58. Lavin inferred that Bulger may have been tipped off to the information that the FBI had received by Connolly or Morris. Id. at 43-46. The court concludes that Bulger was, once again, told by the FBI of the allegations concerning him and of potential for an investigation. Lavin knew that if this had occurred, it was wrong, and he was concerned. Id. at 46. Thus, Lavin discussed the matter with his colleague and friend John Michael Callahan. Id. After speaking with Callahan, however, Lavin continued to keep the materials he had received from Runci in his desk. Id.

In 1997, after the claim that the FBI had improperly protected Bulger and Flemmi became public in this case, Callahan reminded Lavin of the Runci matter. Id. at 52-54. They agreed that the foregoing information should be provided to the OPR team that was investigating the allegations that had emerged. Id. That was done. Id.

In 1988, Joseph Murray, who was then in federal prison, alleged, among other things, that Connolly and Newton were selling information to Bulger and Flemmi concerning electronic surveillance. The FBI assumed responsibility for investigating Murray's charges. Although Murray was interviewed by agents in the FBI's Boston office, he was either not asked about his claim that Connolly and Newton had tipped Bulger and Flemmi off to electronic surveillance or the information that he provided was not included in the 302 of his interview. Nevertheless, the Boston office characterized that charge as "unsubstantiated" and the administrative inquiry of Connolly and Newton was quickly terminated. The evidence presented in the instant case, however, demonstrates that Murray's claim was correct.

More particularly, beginning in January 1988, Weld's secretary at the Department of Justice received a series of increasingly specific telephone calls from an individual, who asked that the information being provided not be passed on to Boston authorities because of the people involved. Ex. 148; Weld May 26, 1998 Tr. at 78-115. The caller initially claimed that Connolly and Boston Police Deputy Ed Walsh "sell information to Whitey Bulger and Stevie Flemmi -- and that's how they find wiretaps." Ex. 147. See also Ex. 148. The source later alleged that Newton was "another agent besides John Connolly who fed Bulger, Flemmi, Nee and Weeks information." Ex. 160.

Weld took these allegations seriously. Weld May 26, 1998 Tr. at 93. Based on his knowledge and experience in Boston, he felt there might be a "weak link" between Connolly and Bulger. Id. at 94. Initially, he referred the matter to his Deputy, Jack Keeney, with a note saying "I know all this. So this [source] is on the up and up." Id. at 92; Ex. 147.

The source also claimed to have information that Bulger and Pat Nee had murdered Halloran and Bucky Barrett. Exs. 149, 150. The source subsequently said that there was an eyewitness to the Halloran shooting who might come forward, and elaborated that: "there is a person named John, who claims he talked to Whitey and Nee as they sat in the car waiting for Halloran on Northern Avenue. He sits in a bar and talks about it. He saw the whole operation." Exs. 149, 152. The source added that the person providing the information to the source "will be willing to talk to you (authorities) soon." Ex. 152. On February 3, 1988, Weld directed Keeney to have the information that he had received sent to the United States Attorney in Boston, Frank McNamara, and to the Strike Force Chief, O'Sullivan. Ex. 151. Weld added that: "Both O'Sullivan and [Assistant United States Attorney] Bob Mueller are well aware of the history, and the information sounds good." Id.

At some point, it was determined that the ultimate source of the information being communicated to Weld was Joseph Murray, who was then in federal prison. Ex. 156. His allegations were referred to the Boston office of the FBI. Ex. 156; Clark June 3, 1998 Tr. at 28. These allegations included the claim that "FBI Agents John Connolly, Jr. and John Newton were selling information regarding wiretaps, to Whitey Bulger and Stevie Flemmi." Ex. 156.

Dennis O'Callahan, the ASAC who had succeeded Potts, was charged with directing an administrative inquiry of Murray's claims concerning Connolly and Newton. Clark June 13, 1998 Tr. at 106, 116. In June 1989, O'Callahan assigned Edward Clark, the supervisor of the Bank Robbery squad, to interview Murray. Id. at 29. Edward Quinn, a member of the Organized Crime squad who had then worked with Connolly for thirteen years and characterized Connolly as a "close friend," accompanied Clark to witness the interview. Id. at 39; Quinn Aug. 19, 1998 Tr. at 13-14.

Clark and Quinn were briefed and given the documents reflecting the information that Weld had received. Id. at 29-31. Clark testified that they were instructed to focus on the allegations of misconduct against Connolly and Newton in their interview of Murray. Id. at 31, 61-62.

Clark and Quinn spoke to Murray at the Strike Force's office in the federal courthouse in Boston, on June 14, 1989 -- more than a year and a half after the initial call to Weld. Ex. 156. Murray was fully cooperative. Clark reported that:

Murray was asked if he would furnish information regarding the above matters and what he wanted as a quid pro quo. Murray said that Whitey Bulger and Stevie Flemmi have a machine and that the Boston Police and the FBI have a machine and he cannot survive against those machines. He is willing to furnish information and wants nothing in return. The information he furnished now will help save the life of a friend or a loved one in the future.

Clark and Quinn each knew that Bulger and Flemmi were informants handled by Connolly. Id. at 85-86; Quinn Aug. 19, 1998 Tr. at 19. Although the purported primary purpose of the interview was to explore Murray's claim that Bulger and Flemmi were paying Connolly and Newton for information concerning electronic surveillance, there is no reference to this allegation in either the notes Clark made at the interview or in the 302 that he later prepared. Exs. 151, 158; Clark June 3, 1998 Tr. at 89. The court concludes that either Murray was not asked about his allegations concerning Connolly and Newton or that the information that he provided concerning them was not recorded. Similarly, although Murray reiterated that Bulger and Nee had murdered Halloran, neither Clark nor Quinn asked him about the individual named "John" who Murray had previously asserted witnessed the killing. Exs. 151, 158; Clark June 3, 1998 Tr. at 80, 114-15.

Clark discussed the interview with O'Callahan and gave him the 302, which included information linking Bulger and Flemmi to the Halloran and Barrett murders. Ex. 156; Clark June 3, 1998 Tr. at 65. Clark was not asked to do anything further. Id. at 64.

Two months later, however, O'Callahan prepared a memorandum from the SAC, Ahearn, to the Director of the FBI, reporting that Murray had been interviewed and that, "[T]he allegations that SSA Connolly and SA Newton are disclosing information regarding investigations being conducted by this Division to criminal elements are unsubstantiated by specific facts . . ." Ex. 157. The administrative inquiry was then terminated in Boston and, evidently, the matter was not pursued by FBI Headquarters, the United States Attorney's Office, the Strike Force or the Department of Justice, which Weld had left in March 1988. Weld May 26, 1998 Tr. at 5.

Moreover, although Clark viewed it as significant, the information that Murray provided implicating Bulger and Flemmi in the Halloran and Barrett murders was not provided to any agents responsible for investigating those matters or indexed so that it could be accessed by such agents. Clark June 3, 1998 Tr. at 66-67, 116-18. Similarly, while Clark felt Murray would make a "terrific" informant, there is no evidence that any effort was made to utilize him as a source despite his demonstrated willingness to provide information. Id. at 118-23. Accordingly, Murray was effectively eliminated as a threat to the symbiotic relationship between the FBI and Bulger and Flemmi.

Prior to Ring becoming the Supervisor of the Organized Crime squad in 1983, two agents on that squad, Robert Jordan and Stanley Moody, became involved in an investigation of payoffs to members of the Boston Police Department. Ring Sept. 18, 1998 Tr. at 131. The investigation continued after Ring became supervisor. In the course of that investigation, Jordan and Moody obtained the cooperation of a Boston Police Lieutenant, James Cox. After consultation with O'Sullivan, it was decided to have Cox attempt to record conversations with Flemmi and Bulger, among others. Ring June 15, 1998 Tr. at 6-12, June 19, 1998 Tr. at 118, 129-30, 155-57.

Flemmi claims that Ring told Bulger that Cox would be wearing a wire and approaching him. Flemmi Aug. 20, 1998 Tr. at 70, Aug. 28, 1998 Tr. at 103-04. Bulger passed this information on to Flemmi. Id. Ring denies that he tipped off Bulger and Flemmi to Cox's cooperation. Ring Sept. 3, 1998 Tr. at 134. The court finds this denial credible.

It is true, however, that Flemmi was forewarned about Cox. Ex. 30, ¶ 11; Flemmi Aug. 20, 1998 Tr. at 70-73. Connolly had asked Morris, and perhaps others, whether Cox was "wired." Morris Apr. 21, 1998 Tr. at 36-37, Apr. 23, 1998 Tr. at 80. The court infers that Connolly is the person who told Bulger and Flemmi that Cox was cooperating with the FBI.

About a week later, on September 5, 1988, Cox approached Flemmi and they spoke briefly. Morris Apr. 23, 1998 Tr. at 64; Ring June 15, 1998 Tr. at 6-12; Flemmi Aug. 20, 1998 Tr. at 70. Flemmi was circumspect and said nothing suspicious or incriminating. Connolly subsequently told Flemmi that the FBI had listened to the tape and considered it "unproductive." Id. at 73-75, Aug. 28, 1998 Tr. at 111.

Flemmi's informant file includes an insert stating that on October 29, 1986, Flemmi told Connolly that "the word around the Boston Police is that a cop by the name of Cox is wired up on other cops." Ex. 229. Flemmi did not, however, provide this information to Connolly. Flemmi Aug. 20, 1998 Tr. at 71-72, Aug. 28, 1998 Tr. at 105-09. Rather, the court concludes that this insert is another document containing false information in an effort to make it more difficult to discern and demonstrate improper conduct by Connolly.

Soon after the encounter between Cox and Flemmi, Jordan, Moody, and their investigation were transferred to the White Collar Crime squad in an effort to distribute the "good investigations" more equally. Ring June 15, 1998 Tr. at 12, June 19, 1998 Tr. at 157-58, Sept. 18, 1998 Tr. at 132; Morris Apr. 23, 1998 Tr. at 62, Apr. 29, 1998 Tr. at 73-74. Morris was then the supervisor of the White Collar Crime squad. Morris Apr. 22, 1998 Tr. at 97-101.

As the investigation evolved, it came to focus on John Bahorian, a bookmaker believed to be making payments to Flemmi. Morris Apr. 22, 1998 Tr. at 101, Apr. 29, 1998 Tr. at 69-70. In the spring of 1988, Moody and Jordan were preparing an application for electronic surveillance of Bahorian, which targeted Flemmi as well. Morris Apr. 22, 1998 Tr. at 101-02.

Morris was afraid that the electronic surveillance would lead to Flemmi's arrest and indictment. Morris Apr. 29, 1998 Tr. at 68, 70. Morris was concerned that if that occurred, the nature of his relationship with Bulger and Flemmi would be revealed. Id. Thus, Morris asked Connolly to tell Flemmi and Bulger to stay away from Bahorian. Id. at 67, Apr. 22, 1998 Tr. at 120-21. Morris also asked Connolly to tell Bulger and Flemmi not to do anything to Bahorian because Morris "did not want another Halloran." Morris Apr. 22, 1998 Tr. at 121-22. Morris believed that Bulger and Flemmi had been involved in the Halloran murder. Id. His directions to Connolly in 1988 were both a reminder and performance of his 1985 promise that Bulger and Flemmi would be protected as long as they did not murder anyone. Id.

Connolly delivered Morris' message to Bulger and Flemmi. Id. He later reported to Morris that they wanted to meet with him to discuss the Bahorian matter. Id. at 103, 121.

Thus, in the spring of 1988, prior to the inception of the electronic surveillance of Bahorian, Bulger, Flemmi, and Connolly met with Morris at his home. Id. at 103, 105, 109, 121; Flemmi Aug. 20, 1998 Tr. at 76, Aug. 28, 1998 Tr. at 115. Morris told Bulger and Flemmi about the planned electronic surveillance and warned them to stay away from Bahorian. Id. at 103-04. Morris also said that he could keep Flemmi out of any indictment arising out of the Bahorian electronic surveillance. Flemmi Aug. 20, 1998 Tr. at 78.

As in the past, neither Bulger nor Flemmi claimed that he had immunity and could not properly be investigated or prosecuted. Nor did Morris believe that they were immune from prosecution. Rather, Morris felt that by warning Bulger and Flemmi he was engaging in an illegal obstruction of justice. Id. at 104, Apr. 30, 1998 Tr. at 102.

Bahorian's telephone was wiretapped from June 22 to September 25, 1988. Apr. 29, 1998 Tr. at 113. Flemmi was named as a target in the application for that electronic surveillance. Morris Apr. 22, 1998 Tr. at 102. The wiretap produced evidence that led to the indictment of Bahorian and others. Id. at 101-02, 109. Because he was warned, however, Flemmi was neither intercepted nor charged. Id.

After telling Flemmi and Bulger about the imminent Bahorian wiretap, Morris was "very upset." Morris Apr. 29, 1998 Tr. at 123. He felt "completely compromised" and vulnerable. Id. at 67. As described earlier, Morris was afraid that if Flemmi or Bulger were prosecuted, the nature of his relationship with them would be revealed. Id. at 68, 70. Morris decided that he was "going to do whatever [he] could to stop Bulger and Flemmi short of admitting [his] crimes." Id. at 125.

Morris had previously told Ring that Bulger had "outlived [his] usefulness," but he had not been closed as an informant. Morris Apr. 29, 1999 Tr. at 66, Apr. 30, 1999 Tr. at 91. Now Morris wanted to "destroy the relationship between the FBI and [Bulger and Flemmi]" himself. Morris Apr. 29, 1998 Tr. at 124. Thus, Morris took an extraordinary step calculated to terminate the threat that Bulger and Flemmi presented to him in a manner that minimized the risk that his role in doing so would be exposed. In essence, he attempted to provoke "another Halloran."

More specifically, in about June 1988, Morris spoke to Gerard O'Neill, a reporter for The Boston Globe's investigative unit, the "Spotlight Team." Ex. 85; Morris Apr. 28, 1998 Tr. at 74-76. Morris understood that as a responsible journalist, O'Neill would protect the confidentiality of Morris as his source. Morris told O'Neill that Bulger was an FBI informant. Morris Apr. 27, 1998 Tr. at 154-57, Apr. 28, 1998 Tr. at 31, 74-75, Apr. 29, 1998 Tr. at 74-75, 80-81. Morris also indicated that Flemmi was an FBI informant. Morris Apr. 28, 1998 Tr. at 74-75. Morris did not say that the conversation was "off the record" and understood that The Boston Globe would likely publish at least that Bulger was an FBI informant. Morris Apr. 29, 1998 Tr. at 78, 80-81.

Morris was well aware that an article reporting that Bulger was an informant could cause him to be killed by the LCN, among others. Morris Apr. 28, 1998 Tr. at 77-78. More specifically, as Morris later put in an affidavit in which he falsely swore under oath that he had not deliberately told O'Neill that Bulger was an informant:

[T]he consequences of individuals being identified as informants, regardless of the accuracy of the information, could be serious. . . . a human life [is] a human life, be that person criminal, informant, or both. . . . the criminal element would not need proof or documentation to take action, so, such statements as inferences could be deadly.

Morris also knew that public disclosure that Bulger was an informant could be fatal to Flemmi. As Morris testified concerning the possible closure by the FBI of Bulger as an informant, it "would have been the end of Flemmi too . . . [b]ecause they were so closely tied together." Morris Apr. 28, 1998 Tr. at 79.

Morris' call prompted The Boston Globe Spotlight Team to plan to write a series of articles that would address, among other things, the events and information indicating that Bulger was a source for the FBI, who was being protected from investigation and prosecution. Among the matters of interest to the Spotlight Team were the race-fix case in which Bulger was not indicted, the Lancaster Street Garage investigation, and the 1984-85 investigation led by the DEA. As part of its research, a member of the Spotlight Team, Richard Lehr, directed a letter to Ciulla, the "star witness" in the race-fix case, who was then being protected by the government. Cullen Oct. 15, 1998 Tr. at 38, 47.

On July 19, 1988, Daly, who was the lead FBI agent on the race-fix case, called Kevin Cullen, another member of the Spotlight Team. Id. at 131. Daly and Cullen had talked several times before, but were not friends. Id. at 44-45. Daly indicated that he knew about the letter to Ciulla and expressed regret that Cullen had not called him first. Id. at 47.

Cullen told Daly that the Spotlight Team was preparing an article that would report that Bulger was an FBI source and, as a result, had been protected by the FBI in the race-fix case, among others. Id. at 133-55, 159. Daly denied that Bulger was an informant. Id. at 104-07, 133-35. He also denied that Bulger was protected from prosecution in the race-fix case because he was an FBI source. Id. at 50-51. As described previously, both of these assertions were false.

Daly proceeded to tell Cullen that as Ciulla had purportedly told Daly, Bulger was a very dangerous man who would think nothing of "clipping" anyone who wrote the sort of story Cullen described. Id. at 48, 50, 160; Ex. 242. Daly emphasized that, in his opinion, Cullen was especially vulnerable because it was well-known that he lived in South Boston. Cullen Oct. 15, 1998 Tr. at 50, 164.

Cullen believed that Bulger was a violent person and, indeed, a killer. Id. at 65-67. Cullen also believed that Daly's comments constituted a threat intended to discourage The Boston Globe from publishing the story it was planning. Id. at 52, 74, 75, 138-39, 146-47; Ex. 242. Cullen was correct. Daly made no written record of his call to Cullen, as he would have if it had been intended as an official warning by the FBI to a potential victim of violence. Cullen Oct. 15, 1998 Tr. at 178.⁽⁴⁸⁾

The SAC, Ahearn, subsequently spoke on the record to the Spotlight Team, which reported that:

James F. Ahearn, special agent in charge of the FBI in Boston, was unequivocal when asked last month if Bulger had relations with the FBI that have left him free of its scrutiny.

"That is absolutely untrue," said Ahearn. "We have not developed anything of an evidentiary nature that would warrant it and, if we ever do develop anything of an evidentiary nature, we will pursue it. We specifically deny that there has been any special treatment of this individual."

Ex. 243. Whether he knew it or not, Ahearn's statement was utterly incorrect.

In any event, Cullen discussed Daly's call with his colleagues. Cullen Oct. 15, 1998 Tr. at 52-53, 119. They too interpreted Daly's comments as a threat intended to intimidate them from publishing the series of articles that they were planning. Id.; Morris Apr. 30, 1998 Tr. at 178. Nevertheless, the reporters and The Boston Globe were undeterred.

The Boston Globe did, however, take the threat to Cullen seriously. Prior to publication of the article concerning Bulger, the newspaper paid to have Cullen and his wife relocated. Id. at 57-58, 123. Although still uneasy, after about a week Cullen returned to his home in South Boston. Id. at 123.

On September 20, 1988, The Boston Globe published its article on Whitey Bulger. Id. at 131; Ex. 243. The article reported that the FBI had "for years had a special relationship with Bulger" and reviewed the events suggesting that the FBI was protecting him, including the race-fix case, the Lancaster Street Garage investigation, and the investigation led by the DEA in 1984-85. Id.

At Ahearn's request, the FBI conducted an administrative inquiry focusing primarily on whether Morris had leaked the fact that Bulger was an informant and other confidential information to The Boston Globe.⁽⁴⁹⁾ Ex. 134. Morris repeatedly lied under oath during the course of that investigation by suggesting that he may have, at most, perhaps inadvertently confirmed that Bulger was a source. Morris Apr. 28, 1998 Tr. at 64-73, Apr. 30, 1998 Tr. at 93; Exs. 84, 85. Morris refused to take a polygraph test. Ex. 84. His deception succeeded. Morris emerged from the investigation with a censure and fourteen days of unpaid leave. Morris Apr. 28, 1998 Tr. at 72. These sanctions did not prevent Morris from progressing through the hierarchy of the FBI until 1995, when he became Chief of the Training and Administrative Section at the FBI Academy in Quantico, Virginia.

The Boston Globe article was upsetting to Bulger and Flemmi, who felt betrayed and endangered. Flemmi Aug. 21, 1998 Tr. at 96-99; Ex. 159. On or about October 6, 1988, several weeks after the article was published, they met with Connolly and Morris, who was still the alternate agent for handling Flemmi. Ex. 42; Flemmi Aug. 20, 1998 Tr. at 78, Aug. 28, 1998 Tr. at 115-19. This was the last meeting or discussion that Flemmi had with Morris. Flemmi Aug. 21, 1998 Tr. at 86, 103, Aug. 28, 1998 Tr. at 115-16.

Connolly told Bulger and Flemmi that because of the articles, others in the FBI wanted to distance themselves from them. Flemmi Aug. 21, 1998 Tr. at 78-79, Aug. 28, 1998 Tr. at 116-18. Flemmi sensed that Connolly might be under some pressure to terminate their relationship. Flemmi Aug. 28, 1998 Tr. at 118. Connolly, however, disagreed and urged Bulger and Flemmi to "hang in." Flemmi Aug. 20, 1998 Tr. at 97, Aug. 28, 1998 Tr. at 116-18.

Among other things, Connolly said he was very concerned about Salemme, who had completed his sentence for the Fitzgerald bombing and been released from prison in the past year. Flemmi Aug. 20, 1998 Tr. at 97; Ex. 237 (209 dated 1/24/98). Salemme had reestablished contact with Flemmi. Ex. 237 (209 dated 1/24/98). Connolly had asked Flemmi to report to him on Salemme's activity and Flemmi had been doing so. Flemmi Aug. 20, 1998 Tr. at 98; Ex. 237 (209s dated 1/24/88 and 7/15/88). Ultimately, after Bulger had spoken again to Connolly, he and Flemmi agreed to follow Connolly's advice and continue their alliance. Flemmi Aug. 21, 1998 Tr. at 102-03, Aug. 28, 1998 Tr. at 116-18.

Subsequently, Bulger told Flemmi that he suspected Morris was the source of the leaks to The Boston Globe. Flemmi Aug. 21, 1998 Tr. at 93-94. In view of their relationship, it is likely that Bulger was echoing views expressed by Connolly while the FBI was focusing unsuccessfully on Morris as the source of those leaks.

The Boston Globe article contributed to Bulger and Flemmi's decision to withdraw from some of their most obvious criminal activity in an effort to insulate themselves from effective investigation and prosecution. As Mercurio described it when he became an informant, Bulger and Flemmi were "backing away from illegal activity" in part because "they had more than adequate . . . legitimate businesses," including real estate, that they may have acquired illegally. Mercurio Aug. 5, 1998 Tr. at 116-17, 121-22; Exs. KKK, LLL. In this sense, the timing of The Boston Globe article was fortuitous. In 1988 and 1989, without the knowledge of the FBI in Boston, the DEA conducted another investigation involving electronic surveillance, targeting Bulger and Flemmi, which led to many indictments, but no charges against the FBI's prize sources. Ex. 126; Blackburn May 7, 1999 Tr. at 41.

Flemmi continued to provide Connolly with the information that the FBI wanted concerning the LCN generally and Salemme particularly. Flemmi had previously told Connolly that Salemme was "extremely paranoid" about the Boston faction of the LCN and that he had allied himself with Patriarca, who viewed Salemme as a valuable, direct link to Flemmi and the Winter Hill Gang. Ex. 237 (209 dated 7/15/88). Flemmi subsequently reported that Salemme was frequently meeting with Patriarca and also that he was holding meetings at the Busy Bee restaurant, which the government later obtained a warrant to bug. Exs. 36 (209 dated 4/11/90), 237 (209s dated 3/7/99 and 3/20/99); Flemmi Aug. 20, 1998 Tr. at 100-01.

Importantly, Flemmi kept Connolly informed of the rising tension between Salemme and the Boston faction of the LCN. Most notably, on June 6, 1989, Flemmi reported that, with Patriarca's "blessing," Salemme was "moving all over the city to consolidate his power in anticipation of imminent federal indictments which will cripple the North End 'Outfit' people, allowing Salemme to step into the vacuum left by their arrests." Ex. 37 (209 dated 6/6/89). Flemmi explained that Russo, Ferrara, Carrozza, Mercurio, and others in the Boston faction of the LCN were furious with Salemme and might kill him if they had time to do so before their anticipated indictments. Id. As discussed in § II.29, infra, ten days later, on June 16, 1989, Salemme was shot, but not killed, and William Grasso, another Patriarca ally, was murdered in Connecticut. June 5, 1998 Tr. at 5. As also discussed, in § II.29, infra, the FBI understood that Salemme had been set up by Mercurio, who, with Flemmi and Bulger's assistance, Connolly had recruited as a Top Echelon informant. Id. at 5-6; Flemmi Aug. 20, 1998 Tr. at 136-37; Ring June 15, 1998 Tr. at 18-21.

Connolly appreciated the important information that Flemmi was furnishing and continued to provide Bulger and Flemmi with the protection that he had promised. For example, in 1988 or 1989 Connolly told Bulger that Timothy Connolly, who is alleged to have been a victim of extortion in the instant case, was cooperating with the FBI and would attempt to record conversations with Bulger and Flemmi. Ex. 30, ¶ 11; Flemmi Aug. 20, 1998 Tr. at 139-45, Aug. 28, 1998 Tr. at 113; 4SI, RA 56. Bulger shared this warning with Flemmi. Ex. 30, ¶ 11; Flemmi Aug. 20, 1998 Tr. at 139-45, Aug. 28, 1998 Tr. at 113.

In the late 1980's, Flemmi not only continued to provide the FBI with valuable information that he had obtained concerning the LCN. He and Bulger also assisted in recruiting Mercurio, a made member of the LCN, as a Top Echelon informant.

Mercurio had been released from prison in 1986. Mercurio Aug. 4, 1998 Tr. at 73. As he explained in one of his earliest encounters with Connolly, Mercurio was then "disenchanted with the mafia because no one in the mafia did anything for him while he was away." Exs. 113, 181. Mercurio reported that, in contrast, he "remain[ed] close to James "Whitey" Bulger and Stevie Flemmi who sent his girlfriend $100 a week while he was in the 'can.'" Id. See also Flemmi Sept. 1, 1998 Tr. at 52-53.

As described previously, Mercurio knew that Vanessa's had been bugged. Mercurio Aug. 5, 1998 Tr. at 61; June 5, 1998 Tr. at 5 (Under Seal). He also knew that the Sagansky-Weinstein extortion had been intercepted and that he would be prosecuted. Id. at 65; Ex. 165. Bulger reported this to Connolly and advised that "Mercurio [would] go on the 'lam' before he goes to prison again." Ex. 165; Flemmi Sept. 1, 1998 Tr. at 50-52; Ring June 8, 1998 Tr. at 103. This was indeed Mercurio's plan. Mercurio Aug. 5, 1998 Tr. at 123-24.

Ring and Connolly decided to try to exploit Mercurio's discontent with the LCN and fear of returning to prison to recruit him as an informant. Ring June 15, 1998 Tr. at 18-21. Connolly consulted Flemmi and Bulger to develop a "profile" of Mercurio that he could employ in this effort. Flemmi Aug. 20, 1998 Tr. at 137-38. Flemmi and Bulger proved to be very knowledgeable about Mercurio. Ring June 19, 1998 Tr. at 140.

Armed with the information Bulger and Flemmi provided, and as directed by Ring, Connolly approached Mercurio. Ex. 200; Ring June 15, 1998 Tr. at 18. In about October 1987, Mercurio began providing information to the FBI and was soon opened as an informant. Ex. 200; Ring June 8, 1998 Tr. at 24-25; June 6, 1998 Tr. at 5-6 (Under Seal). Connolly told Bulger and Flemmi that he had developed Mercurio as an informant. Flemmi Aug. 20, 1998 Tr. at 137-38.

Mercurio testified that he never had any conversations with Connolly or Ring concerning what he would receive in return for his cooperation. Mercurio Aug. 5, 1998 Tr. at 23. Mercurio contends that he became an informant after Connolly threatened to tell Ferrara and Russo that Mercurio had revealed that they had a source in law enforcement who tipped them off to the search of Vanessa's. Id. at 113-14, 120. Mercurio's testimony on this issue, among others, is not credible. Rather, the court infers that in the process of recruiting him, the FBI indicated to Mercurio that he would be alerted when he was about to be indicted so that he could flee. As discussed, in § II.30, infra, this promise was honored.

Mercurio was upgraded to a Top Echelon informant in May 1988. Ring June 9, 1998 Tr. at 99, June 15 Tr. at 22, 31. He was then on parole until 1993. Id.; Ex. 234. One of the conditions of his parole was that he not serve as an informant for any law enforcement agency. Ring June 15, 1998 Tr. at 23. In addition, there was a threat that the publicized search of Vanessa's would prompt the Parole Commission to revoke Mercurio's release and that he would, therefore, be lost to the FBI as a Top Echelon informant. Id. at 44; Ex. 235.

Mercurio testified that he never discussed the issue of the early termination of his parole with the FBI. Mercurio Aug. 5, 1998 Tr. at 27-28. This assertion is not correct. Although he may have initially been reluctant to have his cooperation disclosed, he ultimately told Connolly that he wanted the FBI to seek the early termination of his parole. Ring June 15, 1998 Tr. at 33, 46; Ex. 234. Ring and Mercurio also discussed this issue. Ring June 15, 1998 Tr. at 25, 34, 46. Ring explained to Mercurio that the request for early termination of his parole would involve generating documents describing his status and value as an informant, which would be maintained outside of the FBI. Id. at 33-35. Nevertheless, Mercurio told Ring that he wanted the request made. Id.; Ex. 200. Accordingly, Mercurio authorized Ring to discuss the dilemma posed by his parole status with O'Sullivan, and to have the FBI and Department of Justice ask the Parole Commission to terminate his parole early. Ring June 15, 1998 Tr. at 33-55, 44-55.

O'Sullivan sent a letter dated October 31, 1998 to Benjamin Baer, the Chairman of the Parole Commission, requesting that Mercurio's petition for early termination of his parole be allowed because of "the extremely valuable services that Mr. Mercurio [had] rendered to the Federal Bureau of Investigation." Ex. 182. The letter was based on information that O'Sullivan had received from Connolly. Ring June 15, 1998 Tr. at 32. In support of his request O'Sullivan wrote:

It is the very strong desire of the Federal Bureau of Investigation that Mr. Mercurio be rewarded with early termination of his parole because of the extremely valuable information that Mr. Mercurio has provided and continues to provide to the F.B.I. concerning the activities of the leadership element of La Cosa Nostra in the Boston area. Information provided by Mr. Mercurio has allowed the F.B.I. to identify newly made members of the Patriarca L.C.N. Family, as well as learning about the restructured leadership of the Family. Even more importantly, the information provided by Mr. Mercurio has been used in affidavits in support of court authorized electronic surveillance directed at the L.C.N. Information gathered in this electronic surveillance is the basis upon which a R.I.C.O. indictment will soon be returned in the District of Massachusetts against the restructured leadership of the Patriarca Family.

Because of the extremely sensitive nature of the information contained in this letter, I request that this letter be maintained by you in a secure file and receive only the most limited circulation. If you have any questions of me, please feel free to contact me.