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Federal Prosecutors Cleared in Lisa Blue Case

texaslawyer.com | October 20, 2014

By John Council, Texas Lawyer

The U.S. Attorney's Office for the Eastern District of Texas did not engage in misconduct when it opened—and later terminated—an investigation into Lisa Blue, according to a recent letter the U.S. Department of Justice's Office of Professional Responsibility (OPR) sent to the Dallas trial lawyer.

The Sept. 26 letter from OPR—a branch of the DOJ charged with policing misconduct complaints lodged against federal prosecutors—noted that Blue alleged that the U.S. attorney's office had begun an investigation into her without cause and committed misconduct during the probe. The investigation concluded after OPR found no evidence of a criminal violation, according to the letter.

The federal investigation into Blue came to light last year when Blue refused to testify during a state court criminal dispute [See "Judge Says Charges Against Heir Were to 'Assist' Lisa Blue," Texas Lawyer, Aug. 19, 2013.] In that case, Blue's former client, Albert G. Hill III, alleged that Dallas County District Attorney Craig Watkins had brought mortgage fraud charges against him to assist Blue, who was locked in a $50 million federal attorney fee dispute with Hill.

A state court judge dismissed the indictments against Hill after Hill moved to quash the indictments, alleging that Blue, a prominent donor to Democrats, exerted influence on Watkins to bring the charges. Blue asserted her Fifth Amendment privilege not to testify during a hearing on Hill's state criminal case after she learned she was the subject of a federal investigation.

Watkins and Blue have both denied wrongdoing, and Blue noted that "the investigation … concluded with no evidence of a federal criminal violation" in August 2013, according to a pleading filed in the federal fee dispute.

U.S. District Court Judge Sam Lindsay ruled in Blue's favor in the attorney fee dispute in June, but Hill appealed the ruling to the U.S. Court of Appeals for Fifth Circuit. On October 3rd, the Fifth Circuit denied Hill's appeal in an unpublished decision.

Blue, of Baron & Blue, did not return calls for comment. An OPR representative also did not return a call for comment.

Terry Hart, a partner in the Dallas office of Bracewell & Guiliani who represented Blue when she was called to testify in Hill's criminal case, said the Eastern District's U.S. Attorney's Office notified Blue last year when she was targeted for investigation.

"Usually the DOJ doesn't do that. But there had been so much publicity" about Blue, said Hart, a former federal prosecutor, noting the investigation concluded without finding any evidence of wrongdoing

"I think the Eastern District treated us very fairly," said Hart, who explained that he did not assist Blue in filing a complaint against the U.S. attorney's office.

It was not clear specifically why Blue complained about her treatment to OPR by the U.S. attorney's office. OPR's letter to Blue states: "For your information, United States attorneys and federal law enforcement are vested with broad discretionary authority to determine whether and how to pursue criminal investigations and prosecutions. Absent specific information suggesting that the discretion was corruptly, or otherwise inappropriately, exercised, OPR will not review the exercise of authority.

"Based on our review of your correspondence, we have found no specific information suggesting that the United States Attorney's Office exercised its discretion inappropriately," the letter continued. "Accordingly, we are taking no further action in this matter."

Both Malcolm Bales, U.S. attorney for the Eastern District, and Shamoil Shipchandler, a then-assistant U.S. attorney assigned to handle Blue's case, said they were not previously aware Blue had filed a complaint against the office.

"That's not unusual. People can make complaints against the DOJ. Sometimes you don't even know that they are out there. And sometimes they are closed and you never know that they are out there," Bales said, noting that OPR's letter was "exactly the correct statement … and we didn't do anything wrong.''

He added, "I don't know what she is complaining about in the first place, that she had a right not to be investigated?"

 

 

Back to October 2014 Archive

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