Operation Greylord (22 page)

“Thank you, Mr. Hegarty,” I said. At important moments, cleverness eludes you.

“You're welcome,” he replied. “Good work.”

Megary clapped me on the back as everyone else swarmed around to shake my hand. I felt not only like a bona fide federal investigator but as if I had just been ordained. “Hegarty's gone,” someone hooted. That meant open the refrigerator and bring out the beer.

Later that week, top county and federal law enforcement officials held a news conference to disclose that our evidence would be presented to a special federal grand jury and that the first wave of indictments should be returned in about two months. The name “Greylord” was mentioned for the first time but not explained, leading reporters to assume the code word somehow referred to the British legal system rather than an American racehorse.

The announcement created what some called a “climate of fear” in the marble halls of the criminal courthouse. Attorneys refused to talk
to one another. Some of them patted each other down for a recorder, and not as a gag. A friendly judge who was known for his honesty became so afraid lawyers would suspect him of being a stool pigeon that he began eating lunch in his chambers rather than mingle with them at the cafeteria or nearby restaurants. The FBI intentionally increased the tension by leaking false information suggesting that ten lawyers were expected to cooperate with the investigation under immunity from prosecution, contributing to the gallows humor throughout the courthouses that late summer.

Still in my undercover role, I joined Costello for coffee one day at the first-floor snack shop at the Criminal Courts Building. He whipped out his black beeper, shoved it at me as if it were a microphone, and asked, “Can you say a few words?” I pretended he was funny.

Costello then talked about how nervous Judge Olson had become. “His chambers could have been wired,” Costello said. “Fuck it, we were just doing a few bonds.”

“They'd never bug a chambers,” I said. “One branch of the government can't intrude on another, we've got separation of powers.”

“But so what,” Jim said dismissingly, “they'll never be able to tell who was talking there.”

“Hey, you're right—they'd need a video camera.”

Of course he didn't know that I had used a transmitter to notify agents when dirty lawyers were going into the chambers, or that I kept a log of each person going in so we could match a name with the incriminating words picked up by the microphone. And he could not have known how I had gone over those tapes repeatedly with the agents to identify each voice.

At the time of our conversation, some of the fixers were holding private meetings over the situation. They threw out a number of conjectures about who the “rat” might be but my name, we learned, never came up. If I had known how fully the fixers had believed my role, I would have had a lot more sleep in the last three years. Next they settled down to discuss how deep the probe could possibly be. Since no federal investigation had ever been as penetrating and extensive as Greylord had been, none of them even came close.

The crooked attorneys felt protected by two aspects unique to criminal trial work. One was that they could use rainmaking as their defense, saying that the bribes never reached the judges and that they
were just tricking their clients into thinking the result had been paid for. The fixers also hoped that juries might believe they were victims of entrapment, that the bribes never would have been made if someone working for the FBI had not arranged everything. Greylord organizers had known of these problems from the start, and there was some nail-biting about whether all our unprecedented effort would hold up.

The only way to get around such defense tactics would be if one of the fixers—not just a bagman—turned against his friends to testify how bribery had been going on for decades. What chance was there of that happening? As one of the shysters put it, “If you stonewall the government, this thing is going to fizzle out.”

Each fixer spent these apprehensive weeks according to his own personality: covering up, denying, or using alcohol or drugs.

I was talking to Costello in a courthouse lobby when Peter Kessler came by nervously and bluntly said, “Terry, I hear
you're
the mole.” Looking back now, maybe he wanted me to help him, but I froze and kept quiet.

“Bullshit,” Costello exploded for me, “I been hearing that for three years. Maybe you're right, Peter”—Jim's tone was mocking now—“maybe Terry
has
been working for the G and he got me to join him and now I'm recording every fucking word you're saying.” No laugh was louder than Costello's when he was making people feel uncomfortable.

Later that day, I drew Peter aside to tell him how the rumor had started. Trying to sound as terrified as the fixers had become, I mentioned seeing Jimmy LeFevour's name in the papers as being under scrutiny. “Is everything shut down?” I asked.

Peter Kessler said with a nod, “I think there are some lawyers who are spilling their guts already.” He probably was thinking of the fictitious ten.

“Who?” I asked.

“I don't know. God, I hate the U.S. Attorney's Office. They offer immunity to some people and tell the others to forget it.” He had the desperate expression of someone whose foot is caught in the tracks and can hear a train coming.

“Maybe it's first come, first served,” I suggested and let my hint go at that.

At the time I was appearing in court for all my remaining cases, but for a couple of weeks I dared not risk trying to pass another bribe. But
if there was one last thing I wished I could do, it was to hand a second payoff to Lucius Robinson. That way we could charge him with racketeering and pressure him into giving up judges we didn't have enough on, including Pompey.

Autumn 1983

FBI agent Bill Megary advised me against packing my Nagra because the recorder was too bulky to be overlooked by Lucius Robinson's searching eyes, so I was equipped with a small radio transmitter instead. With two agents parked outside the criminal courthouse to record us on tape, I met him in Pompey's empty chambers about a cocaine possession case that might involve a lot of money.

“Too much heat,” Lucius said with a jiggle of his head. “They're still following me around with the television cameras. Just present your case. That's all you can do, isn't it?”

And so, with great reluctance, I had to let him and Pompey go and accept that my undercover role was over.

“You can't stay out there forever,” said one of the FBI agents from our crime school. We still had to shore up my side of the operation, and that meant getting someone to testify for the government. We talked over who might be the most vulnerable of all the disreputable people I had come to know so well. I sat back, tired, and said, “Costello.” Why not? Jim's life was a mess, and leniency might help him put the pieces back together. Besides, no one respected him, so there would be no old boys' network to break through. And, in the back of my mind, I wanted to protect him for the hundreds of hours we had shared as friends.

But no one was enthused because Costello was only a hallway hustler. “Jimmy LeFevour's running scared, and Kessler would be easier,” they said. Perhaps. But I felt no loyalty to them.

“No,
Costello
,” I insisted. “We got him talking about everything from when he took bribes as a cop to cheating on last year's taxes. Besides, if we get him we can nail a lot of people.”

“It's Costello, then,” Dan Reidy said without enthusiasm. “We'll send a couple of agents over and bring him down here.”

“I want to do the flip,” I said.

“These things are tricky, Terry. You don't have the training.”

“He won't open up to people he doesn't know. I know how he thinks. I can talk him into it, I know I can.”

“Okay,” Reidy said. “But remember he keeps a gun and sometimes gets violent. Pick a public place so you can have some backup.”

I spent half a day driving around looking for a location before settling on the lounge of the Sheraton Hotel in suburban Oak Lawn, where Jim had dumped Martha when he started divorce proceedings. I called him that evening and said, “I want to talk to you about something, Jim. I spoke to a federal prosecutor about Greylord and your name came up.”

I must have sounded like the voice of doom to him.

“What did you hear?” Costello asked.

“This one's too hot for the line, I'll tell you tomorrow.”

“I'm just curious, you understand,” he said. “I got nothing to worry about.”

I mentioned the hotel and said, “So you'll be there?”

“Yeah, Terry,” he said, “I'll be there.”

I arrived alone but nearly half a dozen male and female agents were already in casual poses around the bar, along with Chuck Sklarsky, my friend from the U.S. Attorney's Office. If Jim raised his voice or moved back his arm to strike me, these agents would grab him in a blink. And if Costello stayed peaceful but balked at what I was about to tell him as a friend, I was to signal for Sklarsky to come over and speak with the authority of the Justice Department.

Jim arrived looking none too happy to be there. After we ordered drinks, I tried to make light conversation but he impatiently asked what was so “hot” we couldn't discuss it over the phone. I reached inside my suit jacket and set an envelope between us either like a threat or a way out, depending on how Costello regarded it.

“First, I have to tell you something,” I said. “Jim, those rumors you'd always been hearing, they're true. I was working for the FBI since before I met you, and in August I was sworn in. I'm an FBI agent now.” His face turned ashen. “You paid me bribes on nineteen occasions. I wore a tape recorder on all those conversations. In addition to bribes you gave me, I gave you one hundred dollars on one occasion in which you said you would give it to the judge who replaced Olson. You also committed tax violations. It's all on tape. What happens with those tapes is out of my hands.”

If Jim had only said something, I would have known how to continue. But he just stared at me as if wishing I would take my words back.

“A couple of times you told me the government isn't after people like you, and you're right, we want people like Wayne Olson,” I continued, now knowing that Dan Reidy had been right about my being the wrong person for this. “Judges like Olson put you and other lawyers into positions where you were forced to pay bribes or practically starve. We'll take what we can get, but we're after the judges.”

He downed his martini and gave me a broken smile. “You got to be kidding. Aren't you?” I could almost sense his heart sinking.

“No, Jim, I'm not. See those men and women at the bar? They're FBI agents. Now I want you to read this letter.”

I opened the envelope and handed him the folded page. The message was from U.S. Attorney Dan K. Webb, inviting Jim to his office for a talk. The paper shook in Jim's hands and his shoulders drooped. This was the first time I had watched someone realize his life was over, and I never want to see it again. I grabbed the letter back to avoid drawing attention.

Costello rose to his feet and told me, “I'm not going downtown. No fucking way.” He turned his back to me and started out. As I went after him, he pivoted near the door and asked for the letter, which was still in my hand.

“I can't do that, Jim.”

“Just give me the fucking letter.”

“Come downtown.”

“No.”

He hurried to his black Oldsmobile 98—the car he had proudly said Olson “bought” for him by referring cases for an even split in bond money. With Sklarsky and the FBI agents trying to keep up with me, I sprinted across the parking lot in the bright September sunshine.

“Jim, listen to me,” I said, “we aren't interested in going after people like you!”

“I don't believe in cooperating.” He moved away from his car door and towered over me, this man capable of threatening people with a gun and smashing windshields with a baseball bat. “You are a sick young man,” came that rough voice of his. He made a sudden motion but abruptly stopped himself. “I took you under my wing, Terry. I tried to show you how to be a lawyer in the real world. I had you in my home,
introduced you to my family.” He threw open the car door. “Someday you are going to regret what you have done.”

Costello started the engine, but I couldn't give up. Over the years he had said he loved me like a brother, and now I found that the feeling was mutual.

“Are you going to talk to Webb?” I asked through the open car window. “Jim, it's really in your best interest.”

“I don't know yet,” he answered. “I'll drive around for a while and I'll think about it.”

As he pulled away from the lot, I saw that I had blundered by thinking I could get him to cooperate. The only thing he had seen in our meeting was betrayal.

The Greylord team had struck out three times in trying to flip someone—bagman Ira Blackwood, bagman Harold Conn, and now fixer James Costello. We knew we could get some convictions from our three years of work, but not all the ones we had been hoping for.

In our brooding, we came up with a few ideas that sounded rather unlikely. Federal prosecutor Sheldon Zenner said he might be able to get through to Peter Kessler, whom he had met over a case a few months before and spoken with off and on. Some of Zenner's colleagues thought that would be a desperate move since Peter was like Jim Costello, paltry compared to what we had discovered about some others.

The rest of us thought it was worth a try because no one had a better idea. Zenner had realized that the forty-three-year-old defense attorney wasn't only concerned about prison and the loss of his career, he was going through a personal crisis over Greylord. Peter was living on nerve endings and looked haunted by a ghost he alone could see.