FBI's new No. 3 official couldn't substantiate FBI, mob ties

WASHINGTON -- Internal FBI documents show that when the agent just promoted to the No. 3 job at the FBI investigated mob-FBI ties in Boston, he reported he could not substantiate the allegation -- later proved true -- that agents had tipped off informants that they were under investigation.

Charles Prouty, whom FBI Director Robert Mueller recently named executive assistant director of law enforcement, was the inspector in charge of the 1997 administrative inquiry in Boston. The five-week inquiry ended inconclusively when two of the FBI agents suspected of wrongdoing would not talk to investigators.

"Ten specific allegations of FBI tipping/leaking were investigated and none could be substantiated," the team of FBI and Justice Department investigators wrote in a 1997 internal report. Excerpts were obtained by The Associated Press.

The team, including Prouty, the senior FBI investigator on the scene, urged that further investigation be undertaken. The Justice Department lawyer leading the matter was Joshua Hochberg, now acting U.S. attorney in the criminal investigation of Enron Corp.

The report by Hochberg and Prouty, which has never been publicly released, did identify numerous other problems in the Boston FBI's handling of mob informants dating to the 1960s. The report found that the FBI was aware some of its informants were committing crimes while on the government payroll.

The FBI and federal prosecutors eventually substantiated the allegations of tip-offs; one retired FBI agent has gone to prison.

Rejecting criticism

Prouty rejects criticism in the news media that the investigative team in 1997 went easy on the bureau.

"I am saddened and frustrated by the allegations that the investigation was a whitewash," Prouty said in an interview. "Everyone on the team gave it everything they had. We filed this as an interim report and our recommendation was that the investigation would continue. It did. We didn't exonerate anyone."

"I had my marching orders but there were no limitations; nobody said to me 'Don't go here,"' Prouty added.

After it was over, "I was thanked for the effort by the FBI's deputy director and that was pretty much the extent of my involvement." Prouty said he cannot discuss the report because of a gag order by a federal judge.

The FBI has been under scrutiny on several fronts, from its handling of whistle-blowers to its attention to terrorist threat information prior to Sept. 11, 2001. This past week, the House Government Reform Committee held the latest set of hearings into the overly cozy relationship over a 25-year span between the FBI and the Boston underworld.

More than $1 billion in lawsuits have been brought against the government by victims of crimes committed by the Boston informants while they were under FBI protection.

Retired agent John Connolly recently was convicted for tipping off informants about to be charged in criminal cases. One of those tipped, James "Whitey" Bulger, is still a fugitive on the FBI's 10 Most Wanted list.

The 1997 report states that Connolly gave only a limited interview through his attorney, making it impossible to resolve the matter regarding informants being tipped off.