By EDMUND MAHONY and LYNNE TUOHY

September 16, 1999

BOSTON - A federal judge on Wednesday sharply criticized FBI agents for taking potentially criminal measures - perhaps even inciting a murder - in an extraordinary, decades-long effort to protect the local FBI division's two most notorious informants.

In one instance cited by U.S. District Court Judge Mark L. Wolf in a withering, 661-page decision, FBI agents, aware of the implications of what they were doing, provided information to informants James "Whitey" Bulger and Steven "The Rifleman" Flemmi which, the judge concluded, probably led to the slaying of another gangster who was informing on them.

The wide-ranging decision, which touched on 30 years of sensational crimes in and around Boston, was technically a ruling on pre-trial motions filed by Flemmi and other gangsters in a 1995 racketeering case. But Wolf went to great lengths to condemn certain FBI agents in Boston for entering into a tainted relationship with the two informants that crippled investigations around the country into crimes ranging from mob assassinations to the criminal penetration of the jai alai industry.

He said that, for years, FBI agents repeatedly lied and stonewalled other investigators who were trying to build cases against Bulger and Flemmi, who were suspects in numerous murders. In some cases, he said, certain agents provided the two with information they used to thwart multi-million dollar investigations. The reason: Wolf said the FBI was as interested in protecting individual careers and shielding the bureau from embarrassment as it was in protecting the flow of sensitive criminal intelligence Bulgar and Flemmi were providing. "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," Wolf wrote.

Wolf's decision characterizes Bulger and Flemmi as valuable confidential mob informants since the 1960s. But he wrote that the two were known to be violent felons and probably murderers. Under U.S. Department of Justice guidelines, the two should have been dropped as informants when they became murder suspects. "The evidence in this case indicates that the Attorney General's Guidelines were routinely ignored with regard to Top Echelon informants generally," Wolf wrote. "As the government acknowledges, it is clear that they were regularly disregarded concerning Bulger and Flemmi."

In the ruling, Wolf denied a motion by Flemmi - at least for the short term - that he should be spared prosecution on the racketeering indictment because he was such a valued, Top Echelon FBI informant that FBI agents had promised to protect him from prosecution for crimes short of murder.

Wolf concluded that Flemmi was promised protection, but not outright immunity from prosecution by the FBI. As a result, the judge threw out some of the evidence against Flemmi, but stopped short of an outright dismissal of the indictment. He said he could dismiss the rest of the evidence after additional hearings.

In what can be called the closest thing to a victory for prosecutors in Wolf's decision, he rejected a motion by one of Flemmi's co-defendants that a secretly made FBI recording of a Mafia initiation ceremony in 1989 be suppressed as evidence.

Wolf's decision peels back a layer of law enforcement secrecy from a case that has frustrated police agencies across the country for two decades: an investigation of murder and corruption in the jai alai industry.

The judge writes that Bulger and Flemmi have been the two principal suspects in three jai alai-related murders, including the 1981 assassination of Roger Wheeler Sr., the owner of World Jai Alai. Wheeler's company operated frontons in Hartford and Florida.

Wolf said agents in Boston, obsessed with protecting their prized informants, withheld information from colleagues in the FBI, as well as police in Oklahoma and Florida who from the start suspected Bulger and Flemmi in the jai alai cases.

Wolf's decision has been anticipated for months in New England legal circles. It is expected to provide more ammunition for FBI critics who have been lining up since disclosures were made earlier this summer that the bureau may have tried to cover up evidence that it fired incendiary weapons at the Branch Davidian compound in Waco, Texas.

Bulger, Flemmi and three other gangsters were indicted on racketeering charges in 1995. The prosecution has been tied up in complicated pre-trial maneuverings since then, including nearly a year of hearings in 1998 where every week seemed to deliver another bombshell disclosure about FBI misbehavior.

Two other defendants in the case - Patriarca crime family boss Francis "Cadillac Frank" Salemme and Patriarca soldier Robert DeLuca - have motions pending and could benefit from Wolf's conclusions that Flemmi's value as an informant was tainted by his criminal behavior.

The final defendent under indictment in the case, John Martorano, has been placed in protective custody after agreeing to become a prosecution witness against Bulger and Flemmi. Martorano is said to be so infuriated that his erstwhile criminal partners were informing on him for years that he decided to retaliate.

Martorano last week signed an agreement with prosecutors in which he admits committing 20 murders; many he says, on the instructions of Bulger and Flemmi. Even if Wolf dismisses more evidence against Flemmi, Martorano's information could put Flemmi in prison for life.

Defense lawyers reacted gleefully to Wolf's ruling at a daylong round of press conferences. "You couldn't be human and not be disgusted at the level of treachery Flemmi and Bulger engaged in," said John Mitchell of Manhattan, one of lawyers representing Salemme. Of the FBI, he said, "You don't get in bed with known murderers to make gambling cases. Forget Waco. Forget Ruby Ridge. It's all right here. We have an agency that's an outrage."

Boston lawyer Anthony M. Cardinale, who also represents Salemme, predicted Wolf's ruling would bolster Salemme's argument that the charges against him should be dismissed on grounds of outrageous government conduct. "This is much more than just a little reprimand," Cardinale said.

Massachusetts U.S. Attorney Donald K. Stern issued a terse statement applauding the ruling's denial - at least temporarily - of the motions to dismiss and lamented the need for additional hearings.

Wolf referred extensively to the jai alai investigation, and his findings illustrate how FBI agents, whose careers flourished in direct proportion to the information they were getting from Bulger and Flemmi, fudged reports, withheld information or otherwise lied to protect the two informants.

Some of the reports written by FBI agents about Flemmi's expoits as an informant were patently transparent, including one written in 1966 by H. Paul Rico, the agent who first recruited Flemmi to help the bureau's fight against the Italian Mafia.

In the report, Rico describes questioning Flemmi about the murder of one Cornelius Hughes. Flemmi had complained that Hughes wanted to kill him.

Flemmi "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."

The jai alai murders took place at a time when Rico had retired from the FBI and had been hired as a top executive at World Jai Alai. During the same period, Bulger and Flemmi were providing stunning information in a Mafia prosecution that was the top priority of the FBI's Boston division. Their Winter Hill gang was suspected by police in Connecticut and three other states of skimming money from World Jai Alai.

Wheeler was killed after he began investigating such skimming. Also killed was John B. Callahan, a Winter Hill associate who was once president of World Jai Alai.

Wolf's most startling disclosures about jai alai concern the murder of Edward Brian Halloran, a disaffected Winter Hill leg-breaker who was trying to become an FBI informant himself and join the federal witness protection program.

Not knowing that Bulger and Flemmi were already prized informants, he approached the FBI in Boston and implicated them in Wheeler's murder.

Wolf said John Morris, then a supervisor of the Boston division's organized crime squad, informed John Connolly, an agent in the FBI's Boston office, of Halloran's charges. "Morris expected that Connolly would tell Bulger and Flemmi," Wolf wrote. "Connolly told Bulger and Flemmi about Halloran's cooperation and claims."

In early May 1982, the FBI denied Halloran's request to join the witness protection program and turned him out on the street. On May 11, he was gunned down outside a South Boston restaurant. "The next time that Morris asked Connolly to tip Flemmi off to an investigation," Wolf wrote, "he added that he `did not want another Halloran' - meaning another murder."

Wolf said that, during the same period, Bulger and Flemmi passed a message to Morris that they "really liked him" and hoped that Morris would let them know if he ever needed anything.

Morris took them up on the offer, the judge wrote. Several weeks after Halloran's death, the married Morris was attending a training session in Georgia and wanted his girlfriend, his secretary at the FBI, to join him. He also wanted Bulger and Flemmi to pay for her plane ticket. Wolf said Connolly delivered $1,000 provided by the two informants to the secretary at the FBI's offices.

It was the first of $7,000 in payments Morris took from Bulger and Flemmi, according to evidence.

Boston's U.S. District Court Judge Mark Wolf is known for the ample time he takes to consider his decisions, as well as the length of what he writes. But he set a new book-length benchmark with a 661-page ruling issued Wednesday.

Wolf's decision on a motion to dismiss caharges in a racketeering case that has exposed corrupt alliances between mob informants and FBI is probably a contender for the longest court ruling ever.

But it is hard to find anybody who keeps track of that sort of thing. "The Guinness Book of World Records" has the longest trial and the longest will, but not the longest court decision.

A federal judge in Utah attracted attention 15 years ago with a 489-page ruling in an atomic-testing fallout case. It was reported to be one of the longest at that time by the National Law Journal.

Wolf beat the Utah judge by almost 200 pages.

Connectcut had a state record-setter last year with a 524-page decision by Superior Court Judge Kevin Tiemey in Wendt vs. Wendt, a well-publicized divorce case involving the chairman of Stamford-based GE Capital Corp.

Wolf blew Tiemey away by almost 150 pages.

The U.S. Supreme Court considers some weighty issues, but none of its decisions come close. The longest was a 1972 ruling that invalidated the death penalty.

Wolf latest opinion was almost three times longer than that.

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