A year later, after the youngest of his children became gravely ill, Cisneros had a change of heart. He broke off the relationship with Medlar and reconciled with his wife.
Bitter, broke and left without a career path in Texas politics, Medlar prevailed on Cisneros to support her. For the next four years, while making huge money in the private sector, he did so. Nonetheless, Medlar began secretly taping her phone calls with him.
In 1993, after accepting his post in the Clinton administration, Cisneros informed Medlar that he was discontinuing the payments. She responded by suing him -- the case was ultimately settled for $49,000 -- and, more fatefully, by taking her tapes to "Inside Edition," a tabloid television show.
Those tapes, which include conversations about money, revealed that Cisneros had misled the FBI about the size of his payments to Medlar.
The investigation
From the outset, Barrett, his team of prosecutors and FBI field agents were looking for more than a ruling on what constitutes a "material" misstatement. First, they wanted to determine why Cisneros had misled the FBI.
Their suspicions, according to those close to the investigation, included possible tax fraud; that other Texas Democrats had really made the payments to Medlar; that Cisneros had attempted to steer HUD contracts her way.
One transaction that attracted scrutiny was a $12,000 consulting contract to West Texas Lighting, a company partially owned by Medlar's sister Patsy Wooten and her husband, Allen R. Wooten.
For answers, Barrett turned to Medlar, who was granted immunity. But he maintained in court papers that Medlar began lying, mostly about the tapes. She insisted that she had not edited them, but FBI experts disagreed. She said she'd provided originals of the tapes; the FBI said they were crude copies. The special counsel rescinded Medlar's immunity and secured an indictment against her on multiple counts of obstruction of justice, perjury, bank fraud and money laundering.
The house
The 28-count indictment charged not only Medlar, but Patsy and Allen Wooten as well. Their crime, according to the special prosecutor, was to bend the truth on mortgage papers for the house Medlar and her daughter occupied in early 1993.
The indictment says that because she had no income other than the money Cisneros was paying her, Medlar persuaded the Wootens to buy the house in their name. They agreed, the indictment continues, and signed papers saying they themselves intended to live in the house.
Neither Medlar nor her attorney -- both subject to a gag order by a U.S. District Court judge in Lubbock, Texas -- would comment. But lawyers close to her say such fudging on home loans is commonplace. Real estate experts concur, citing the frequent practice of parents lending their children money for a down payment on a house -- but both parties sign documents that state the loan is really a gift in order to qualify for a mortgage.
Lawyers in the northern district of Texas said they'd never heard of a felony prosecution in such a case unless there was a loss to the bank, which there wasn't in Medlar's case. Nevertheless, Barrett charged Medlar and the Wootens not only with multiple counts of bank fraud -- but with the much more serious charge of money laundering as well.
Levin, the Michigan senator, is troubled by Barrett's treatment of the Wootens. Both in their late 50s, they could spend the rest of their lives in prison if convicted. It is assumed in Lubbock legal zTC circles that Barrett is trying to pressure them into testifying against Cisneros.
Ed Page, who is to prosecute Medlar and the Wootens beginning Jan. 5, would not comment on the motives for bringing such serious charges against seemingly bit players.
But Floyd Holder, a previous Medlar lawyer not bound by the gag order, figures he knows the answer: human nature.
"They got mad at Linda," he says. "Besides, if you spent $4 million you've got to nail somebody."
Pub Date: 11/30/97
