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A federal judge has denied a motion by The Star-Ledger to quash a grand jury subpoena for a redacted copy of an audiotaped interview, and the Newark, N.J., newspaper has turned over the material. U.S. District Judge Nicholas Politan’s letter opinion, released May 24, required the newspaper to hand over a copy of an interview with a businessman, which was used in a July 18, 1997, article, “‘Buyers’ Got Cash in Realty Scheme.” The article described a “land-flipping” scheme involving the purchase of real estate at low prices for immediate resale at much higher prices on the basis of inflated appraisals. Gary Grieser, president of Capital Assets, a Red Bank property management company, recounted in the interview how he paid straw buyers to use their names and credit histories. Grieser was indicted on June 11, 1999, on charges of mail, wire and bank fraud, as well as obstruction of justice and use of a false Social Security number in acquiring properties. He pleaded guilty before U.S. District Judge Alfred Wolin last November to 18 counts involving 13 properties. Other participants have also been indicted and pleaded guilty in what Assistant U.S. Attorney Alain Leibman, who is prosecuting the case, says is an ongoing investigation. The government first requested the recording in November 1998. When The Star-Ledger refused, the U.S. Attorney’s Office subpoenaed the recording. The government contended that it needed the tape only for the continuing grand jury investigation into the broader land-flipping conspiracy and not to prosecute Grieser, who had not yet pleaded guilty. The subpoena requested only an edited version of the interview, limited to statements that appeared in the article, along with the reporters’ predicate questions. At oral argument on Oct. 7, 1999, The Star-Ledger argued that its qualified privilege under the First Amendment protected its refusal to divulge its news-gathering techniques. Politan applied the three-pronged analysis of Riley v. Chester, 612 F.2d 708 (3d Cir. 1979), which governs journalists’ assertion of their qualified privilege under the First Amendment in seeking to protect their confidential sources. As for the first prong of Riley, Politan found that the government tried to obtain the information from another source — the article itself. But the article, he said, was not the equivalent of the tape because its “cold and lifeless words” are “mere snippets” of the live conversation and do not allow assessment of credibility. The second Riley requirement — that the sole access to the information was through the journalist — was also met because the government was concerned not so much with what was said but with how it was said, Politan found. On the third prong — that the information be “crucial” — Politan applied a lower standard of “necessary” because the information was not confidential and the source was “self-avowed.” He found the standard satisfied because listening to the tape was necessary to “appraise the credibility of Grieser’s ‘story’ as to the broader real estate scheme and other conspirators involved.” The court first denied the motion to quash on Jan. 28. Donald Robinson, the newspaper’s attorney, said that opinion was issued under seal because of the grand jury proceedings. He says he then moved to compel the government to show that it could not get Grieser to appear for questioning before the grand jury based on the new fact — since the oral argument — of Grieser’s guilty plea. The court granted the motion but the government was able to show that Grieser would not appear, according to Robinson, of Newark’s Robinson, Lapidus & Livelli. He says the government argued that there was no alternative source for Grieser’s voice on the tape, even though the case law talks only about entitlement to the information itself. Nevertheless, the court once again refused to quash the subpoena, he says. Robinson’s aide, Gail Raffield, then edited the interview tape at his direction, and The Star-Ledger gave the edited tape to Politan on May 5. The subpoena also required production of a witness to authenticate the redacted recording. Robinson says Leibman objected to authentication by Raffield rather than by a Star-Ledger employee but Politan ruled in Robinson’s favor, allowing Raffield to appear before the grand jury. Though Robinson believes there was a good chance the court of appeals would have reversed because the Riley criteria were not met, he says he did not appeal — and the time to do so has expired — because he only had to provide a redacted tape. He would have appealed if required to produce a tape of the entire two-hour interview, he says. According to Robinson, there was a lot more on the original interview tape than appeared in the July 1997 story or the redacted tape. He says he does not understand why the government pursued the redacted tape rather than using the published article which, he says, contained more information than the redacted tape. What the government was really doing, Robinson charges, was “using The Star-Ledger as an investigative arm of the U.S. Attorney’s Office” and “snooping unnecessarily into the way the Ledger collect its news.” Leibman, for his part, claims that “the value from the evidentiary point of view of Grieser making admissions about criminal conduct surpasses the value from a dry [printed] interview.” He characterizes the ruling as “an important decision for the ability of grand juries and the government to obtain evidence from all citizens, even corporate media citizens.” The case is In the Matter of the Grand Jury Empaneled February 5, 1999 (The Star Ledger Subpoena), Misc. No. 99-30.

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