What's going on here? Federal appeals court orders Kontogiannis transcripts sealed:

Transcripts of four hearings in the case of Thomas Kontogiannis, a financier who pleaded guilty in connection with the Randy "Duke" Cunningham scandal, will remain sealed, a federal appeals court said yesterday.

Kontogiannis pleaded guilty in February to providing $1.1 million in mortgages to Cunningham for a Rancho Santa Fe mansion, even though he knew the house was the proceeds of illegal activity.

Cunningham is serving an eight-year, four-month sentence after admitting he accepted bribes from defense contractors that helped purchase the home and other property.

In an unusual step, Kontogiannis' guilty plea was done in a secret, closed hearing. The plea agreement was unsealed earlier this month, and last week Burns ordered that transcripts of four hearings related to the plea also be made public.

Federal prosecutors objected in motions filed under seal last week. Yesterday, the 9th U.S. Circuit Court of Appeal ordered the documents to remain secret and scheduled a hearing for the week of Aug. 6.

At a hearing in federal court in San Diego yesterday, Burns said that the government invoked federal laws dealing with classified information in their papers filed last week.

He said that when the secret hearings took place four months ago, prosecutors knew that the information would become open eventually, and did not object then.

The judge appeared irked that the government was now objecting to the information becoming public and was raising the issue of classified information "for the first time ever."

Assistant U.S. Attorney Jason Forge said government lawyers decided after the hearings that they wanted more information kept secret than they first believed was necessary.

Without going into details, Forge told Burns "the scope of the information the government viewed as non-disclosable turned out to be broader" than they originally thought.

Kontogiannis is expected to be a witness in the upcoming trial of his nephew, John Michael, and Poway defense contractor Brent Wilkes. Both are charged with money laundering, and Wilkes is charged with bribing Cunningham in return for lucrative defense contracts. Both have pleaded not guilty.

Ray Granger, the lawyer for Michael, criticized the switch of position by prosecutors. ...

What possibly could be in this private citizen's hearing transcripts that is classified? Cunningham was a congressman on the House intelligence committee, and his plea agreement and sentencing documents are not sealed. But Kontogiannis' hearings transcripts are. Does Kontogiannis have some as yet unexplained relationship with the US government? Check out the list of his companies I compiled. And few of them appear to be much more than a fax machine, a name and an address. He's gotten several get out of jail free cards from the US government before, and it's increasingly hard not to wonder whether he is protected for some reason. Was he a launderer of off the books deals, a launderer of front companies? A fixer/financier?

Puzzling too, if you really stop to think about it, was it more than vanity that drove Kontogiannis to seek a presidential pardon via Cunningham (for the price of a yacht)? After all, he'd gotten off without going to jail two times, after pleading guilty to a visa fraud scheme in 1994 in which he and an official at the US embassy in Athens were arrested by the FBI, and after pleading guilty in a local Long Island school board fraud conspiracy scheme in 2000. He'd gotten off with nothing more than a slap on the wrist. For what reason did Kontogiannis possibly require or desire or feel entitled to a presidential pardon? Just total chutzpah? Done favors for the right people? Or did the very reason he'd gotten in trouble so often have something to do with authorization for the particular services he rendered? (It's worth noting from the May 10 superseding Wilkes-Foggo indictment, Foggo asking Wilkes to ask Cunningham for help to get a visa for a foreigner who was to help Wilkes deliver on his ill gotten CIA contract to supply water to CIA personnel in Iraq; the people you would think have the magic wands don't always, apparently. They need fixers). How many small-time fraud conspirators who basically get off seek presidential pardons?

More from Marcy Wheeler. " ... Kontogiannis' plea agreement leaves two things mentioned--but unexplained: the nature of the other money laundering Kontogiannis admitted to--but was not charged on, and his reason for bribing Cunningham in the first place. ..."

See this update.

Posted by Laura at June 30, 2007 11:49 AM