Informants Claim FBI Was Cozy With Boston Mob

BOSTON (January 12, 1998 5:25 p.m. EST http://www.nando.net) -- "Hey, Whitey! Can you lend me five grand?" That kind of request was probably heard more than once on the streets of Boston, where James J. "Whitey" Bulger ruled the rackets for decades as head of the so-called "Irish Mafia."

Except that the guy asking for a loan this time was an FBI agent who was using Bulger as an informant, according to documents unsealed last week in Bulger's federal racketeering trial.

The loan, which prosecutors deny, illustrates the kind of cozy relationship defense attorneys say Bulger and Stephen "The Rifleman" Flemmi had with the FBI. By using Bulger for decades as an informant, they say, the FBI in effect gave the two men who headed the "Winter Hill Gang" a blank check to commit crimes.

U.S. District Judge Mark L. Wolf must decide whether the government can proceed with its prosecution of four Boston men accused of being mobsters. Wolf said he expects a pre-trial hearing now under way to take months.

Defense attorneys say the FBI had a hands-off arrangement with Bulger and Flemmi. The 1995 indictment, they argue, is moot.

"His loyalty was generated not by air. It was generated by promises," said Martin G. Weinberg, a defense attorney.

On trial with Flemmi are three other alleged mobsters, including the reputed head of organized crime in New England, Francis "Cadillac Frank" Salemme. Whatever disdain the three have for Bulger and Flemmi's 30 years as government snitches, they are dependent upon them for their freedom.

The three are arguing that because the FBI knew and permitted Flemmi and Bulger's criminal activity, there were no criminals and therefore no criminal conspiracy. They also say the government's failure to disclose that Bulger and Flemmi were informants tainted the investigation.

And there's another unsolved mystery every day in court: Bulger is missing. He skipped town just before the indictments were unsealed in 1995.

FBI files unsealed last week show that beginning in the mid-1960s, Flemmi and Bulger helped nail bank robbers, set up wiretaps and foil La Cosa Nostra plots to kill federal agents and prosecutors.

While the FBI had information that the two "top echelon" informants were dealing drugs and running rackets -- and knew they were suspects in several murders -- they remained highly valuable because of their underworld status.

"This source is one of very few sources who can furnish information at the policy-making level of the LCN," former Special Agent John M. Morris wrote of Flemmi in 1980. "Continuing information from this informant is considered to be a critical factor in Boston's overall Organized Crime Program."

Flemmi says he and Bulger were so cozy with Morris that they gave him $5,000 in 1985. It was a loan, Flemmi says, that Morris never repaid.

Morris has yet to testify at the hearing, but three former FBI agents who took the stand last week said only that they were unaware of any special arrangements with Bulger and Flemmi.

"Nobody in the FBI could authorize that," said Lawrence Sarhatt, the former special agent in charge of the Boston office.

But memos introduced into evidence so far give hints as to the lengths the FBI was willing to go to keep the information flowing.

In the early 1980s, Bulger and Flemmi were suspected of two killings in Florida and Oklahoma. Police and federal agents in Florida told the Boston FBI about their suspicions, but the two men weren't forced to take lie detector tests and Boston never opened its own case.

And each time other law enforcement agencies targeted Bulger and Flemmi, they slipped through the net. There was the time Bulger's gang found out about a state police wiretap in 1980. Or when they found out about a Drug Enforcement Agency wiretap in 1983. Or the near-indictments that never happened in 1969 and 1979.

Regardless of the FBI's ties, prosecutors say there was no blanket of immunity. They point to memos like the one written by James A. Ring in 1984.

"If these individuals are violating the law and subject to investigation, that is their problem," wrote Ring, who was in charge of the Boston office's organized crime division. "There is not and will not be any authorization by the FBI for these individuals to commit any criminal acts unless such authorization conforms to present Bureau regulations."

But to the defense, 30 years of looking the other way tells the story.

Said Flemmi's attorney, Kenneth Fishman: "If ever there were a case in which actions speak louder than words, this is it."

By RICHARD LORANT, The Associated Press