Del Papa denies seeing confidential report to FBI

Wednesday, Feb. 14, 2001 | 11:22 a.m.

Attorney General Frankie Sue Del Papa has testified that she never saw a confidential intelligence report alleging that top Nevada Democrats would accept bribes before a trusted deputy sent it to the FBI four years ago.

The 21-page memorandum raised the uncorroborated bribery accusations about several of Del Papa's well-known Democratic colleagues, including former Gov. Bob Miller, Sen. Harry Reid and former Sen. Richard Bryan.

All three, who were in office four years ago, have condemned the report, which was made public in April in a District Court lawsuit filed against Del Papa by Mike Anzalone, one of her former investigators.

Anzalone alleged in the suit that he was forced to resign in February 1996 because he wouldn't participate in a secret intelligence probe of top gaming regulators and other prominent Nevadans tied to the casino industry.

Bryan, a former attorney general now practicing law in Las Vegas, said this morning it would be "highly unusual" for Del Papa not to have seen the confidential report before it was given to the FBI.

"That's not routine," Bryan said. "That is a matter of considerable significance, when you're talking about potential corruption of high-level officials. That should have been called to her attention." Bryan described the allegations in the report as "utterly preposterous."

Miller agreed.

"The report is a bunch of baloney," the former governor and district attorney said. "It's not worth the paper it's printed on."

The FBI received the confidential memorandum at the end of March 1997 from Deputy Attorney General David Thompson, but reportedly never took any action on it.

Thompson is a close friend of Del Papa's who had been hired to oversee the intelligence investigation, which was conducted under the cover of a criminal probe into the slot cheating activities of former state Gaming Control Board electronics expert Ron Harris.

In a just-released 450-page deposition, Del Papa said she didn't see the unsubstantiated report until after Anzalone had filed his lawsuit in February 1998.

Del Papa's deposition was one of several filed in District Court late Monday by Anzalone's Phoenix lawyer, Christine Manno, in support of a brief opposing the attorney's general motion for a summary judgment in the bitterly fought lawsuit.

"I do not recall seeing this entire document (the intelligence report) prior to the commencement of this litigation," Del Papa said, when questioned at her Jan. 4 deposition.

That testimony, Manno said this morning, is an indication that Del Papa's office was out of control.

"I think it's apparent from her deposition that she allowed her office to run amok and took no control over what it was doing," Manno said.

Del Papa testified that Thompson faxed her two pages of the intelligence report on April 30, 1997, a month after he had delivered the document to the FBI.

Those pages involved allegations that prominent gaming lawyer, Frank Schreck, a political fund-raiser for the last three governors, including Kenny Guinn, was a conduit for bribes to then Gaming Control Board Chairman Bill Bible.

Anzalone and another former Del Papa investigator, Gary Wright, who stepped forward this week, have alleged under oath that Thompson wanted them to obtain Bible's bank records without a subpoena as part of the intelligence probe. Thompson has denied making that request.

Del Papa said in her deposition that she obtained the two intelligence pages in response to a phone call she had gotten from Schreck.

"I had received an inquiry from Frank Schreck, and he was very concerned, and I had no knowledge as to why Frank Schreck was concerned," Del Papa said. "And so I believe that I called Mr. Thompson to ask him for some information, and this is what he gave me. And you can see it's entitled 'Confidential Memo.' "

The bribery scenario involving Schreck and Bible, which was never substantiated, had surfaced publicly at the time in videotapes Thompson made with Harris, who months earlier had pleaded guilty to slot cheating and agreed to cooperate with the prosecutor.

Some speculated that the tapes were leaked to the media to embarrass Bible, who was at odds politically with Del Papa. At the time, Bible was undergoing an FBI background investigation for a presidential appointment to the National Gambling Impact Study Commission.

Thompson said in a sworn deposition that he never told Del Papa beforehand that he was giving the confidential report to the FBI.

The report, written by investigator Ron Wheatley, contained a number of other hearsay allegations, including a claim from an informant that Miller, Reid and Bryan could be influenced on gaming matters through cash bribes.

Also in the report was an allegation from several sources that a well-known slot machine manufacturer was laundering money for the CIA at Las Vegas casinos.

"What was your intention in sending this document to the FBI?" Manno asked Thompson in his 305-page deposition.

"My intention in sending this document to the FBI was to notify them of any charges, which may be within their jurisdiction," Thompson responded. "In particular the allegations involving money laundering."

"This is the money laundering of the CIA in the casinos?"

"Yes ma'am," he said.

Thompson reportedly asked Harris about the money-laundering allegations during his August 1996 debriefing, but Harris offered no new information.

The Harris debriefing began with Thompson stating he was investigating corruption at the Gaming Control Board.

"Do you know where the idea that ... gaming was laundering money for the CIA would have come from?" Manno asked Thompson in his deposition.

"I believe it came from confidential informants," Thompson responded.

He said it was likely that Wheatley had interviewed the informants.

Thompson added that he had asked Wheatley to compile an overview of the Harris case with all of its "peculiarities" so that he could review it and decide whether additional investigating was needed.

He said he did not instruct Wheatley to identify the overview as a "confidential intelligence report."

Del Papa insisted in her deposition that her office "does not do intelligence investigations."

She denied investigating Bible for the first two years of the lawsuit until the intelligence report was released. Then she acknowledged that her office had conducted "limited" background searches on her political foe.

Wheatley, meanwhile, said in his 222-page deposition that he had pressed Thompson into giving the FBI the confidential report.

"I told him several times I thought there were sufficient allegations out in the community that the FBI should be notified," Wheatley said.

He acknowledged that he didn't thoroughly investigate the allegations in the report before turning it over to the FBI.

"The report that I prepared was based on allegations from multiple sources," he said. "I do not believe we had the resources to do a proper investigation of those allegations.

"As an investigator ... if you're seeing that many allegations of the same type from the same community, it's a responsibility that if you do not have the resources necessary to conduct the investigation, you ... forward them to an agency that has the resources to do those kinds of investigations."