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Ex-agent recalls 'paranoia' about 'Whitey' Bulger's FBI connections

By Richard Valdmanis

BOSTON (Reuters) - FBI files about mob boss James "Whitey" Bulger were locked into a fireproof safe in the bureau's Boston office to keep them from the prying eyes of corrupt agents who would leak them to criminals, a retired agent testified on Wednesday.

"I had (files) placed in a safe, I think it was even fireproof, in my office, and I could then lock the door of my office," ex-agent Fred Davis told the jury. Lawyers defending Bulger in his murder and racketeering trial had called him to the stand to buttress its case that Boston's FBI office was corrupt and mismanaged when it was investigating their client in the 1970s and 80s.

Bulger has been charged with participating in 19 murders while running the feared Winter Hill crime gang. He has pleaded not guilty to the charges, although his attorneys have admitted he was involved in organized crime.

Bulger also has denied being an FBI informant. He says he paid agents for information, but never gave any of his own.

Davis said he was not the only one at the FBI's Boston office who worried that Bulger was getting tips from corrupt agents.

"I called it paranoia," Davis said before describing his method of keeping files secure. "There was concern there were agents in the office that might have been leaking information," he said, naming confessed corrupt former agents John Connolly and John Morris.

"When Connolly would walk into our squad area, some of our agents would really get nervous about him being there. It was like the bull getting into the China shop," he said.

Bulger's story has captured Boston's imagination for decades and revealed a dark period for the FBI, when corrupt agents who listed Bulger as an informant gave the mobster tips that helped him identify snitches and evade arrest for his gang's extortion, gambling rackets and drug smuggling.

Connolly is now serving a 40-year prison sentence after being convicted of racketeering and murder. Morris was granted immunity and testified against Bulger earlier in the trial.

Earlier on Wednesday, another former FBI agent, James Crawford said a female informant close to senior Winter Hill associate Stephen "The Rifleman" Flemmi had told him Flemmi wanted to kill Halloran for talking to the FBI. Crawford said he told his supervisor and other agents at the time but was told the tip would be put on the "back burner."

"At that time an FBI informant and an innocent victim were murdered," Bulger attorney J.W. Carney asked Crawford. "Yes," Crawford replied.

Halloran was killed in 1982 along with unintended victim Michael Donahue, and prosecutors contend Bulger was the gunman.

Prosecutors cross-examined Crawford, who admitted he had never been involved in any investigations related to Bulger.

Prosecutors put some of Bulger's closest partners in crime on the stand. They recalled an era when gun-toting gangsters dumped bodies under bridges or buried them in earthen basements and exchanged information with corrupt FBI agents in a bloody struggle for money and power.

Gangsters who confessed to participating in murder, John "The Executioner" Martorano, Stephen "The Rifleman" Flemmi and Kevin Weeks, vividly described Bulger strangling women, gunning down rivals and "rats" who talked too much, and demanding money at gunpoint from other criminals or local business owners.

Bulger fled Boston after a 1994 tip from a corrupt FBI official and spent 16 years as a fugitive before law enforcement caught him hiding out in a seaside apartment in California in 2011, with a stash of money and guns.

His attorneys plan to call a handful of witnesses starting on Monday, but they have not made clear whether Bulger, whose story inspired Martin Scorsese's Academy Award-winning film "The Departed," will take the stand himself.

(Writing by Richard Valdmanis; Editing by Scott Malone and David Gregorio)

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