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Government Forced to Back Down on Misdirected Halliburton Case

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In a surprise move, the U.S. Justice Department withdrew its 10-count major frauds charge against Jeff Mazon and instead accepted a misdemeanor plea agreement.

Mazon, a former contract manager for the scandal-plagued Halliburton and its spin-off counterpart KBR, had been accused of rigging a contract bid allegedly in exchange for a $1 million bribe from a Kuwaiti businessman.

But Tuesday, before U.S. District Court Judge Joe Billy McDade, Mazon pled guilty to one misdemeanor count of failing to inform his supervisor of a contract that had been inaccurately inflated, but later corrected.

Mazon successfully fought off the charges twice, winning deadlocked juries in both trials last year in April and again in October, arguing that the inflated amount was an error that reflected an increase that precisely matched a reverse monetary conversion between U.S. Dollars and Kuwait Dinars. The error did not come to light until Mazon had left KBR/Halliburton and had explored, many months later, doing business with the contractor, a practice that was not unusual for others at the company.

After the second trial deadlocked and Judge McDade tried to pressure the sole holdout juror to change her verdict, prosecutors had said they expected to go back to trial a third time this month.

In fact, prosecutors originally told me they did not know if they would seek a third trial. But later the same evening, they leaked the news that they planned to seek a third trial to another reporter in Rockford who had not covered the case but had given the government friendly and shallow news coverage.

The plea agreement is a victory for Mazon and a black eye both for the Justice Department and Judge McDade, who oversaw both trials first in Rock Island where the Halliburton contract was associated, and later in McDade's home court room in Peoria, Illinois.

On Wednesday, a spokesperson for the Justice Department issued a release explaining that Mazon and the government have agreed that the defendant will be credited for time served, and that for the first six months of a one-year term of supervised release, the defendant will be under home confinement. These terms are subject to approval by the Court. The defendant is scheduled to be sentenced on July 10, 2009.

Having covered parts of the first trial and having personally sat in the court room through the second trial, it was clear to me that the evidence presented by the government was sketchy and circumstantial. Much of the testimony was based on witnesses who admitted having engaged in misconduct themselves.

Some speculated that Mazon was being targeted by the Bush administration and Vice President Dick Cheney to prevent Halliburton from becoming the focus of the corruption charges, which appeared endemic there. Cheney served as the company's CEO, but later resigned when he became Vice President.

McDade had prohibited Mazon's attorneys, Orland Park lawyers J. Scott Arthur and Alan Brunell from arguing that Mazon was being made into a scapegoat. Prosecution witnesses also admitted that contracts were routinely given rushed approval and little scrutiny, suggesting that errors were extremely likely. They also testified that it was not unusual for former Halliburton and KBR contractors to later, after leaving their employ, work for contractors with whom they did businesses. Those facts became the foundation of the prosecution's weak and unsuccessful case.

Many things have happened since the second trial ended that would push the government to back out of the case. Bush and Cheney were replaced by President Barack Obama, who has other priorities including forcing the Justice Department to apply the rule of law rather than prejudice as the cornerstone of their evidence.

Halliburton reportedly has relocated its corporate headquarters to Dubai. And there are increasing calls for war crimes charges to be brought against Cheney.

Mazon had won over the sympathy of several jurors in the first trial and a sole juror in the second trial. That juror reportedly had been ostracized not only by the judge but by the other jurors who were anxious to finish the nearly three week trial.

She had written on the back of her legal note pad words that not only are significant in the Mazon trial, but that also reflect a spirit of change in the Obama-led Justice Department. "Innocent until proven guilty."

(Ray Hanania is an award winning columnist and Chicago radio talk show host. He can be reached at www.RadioChicagoland.com and by email at rayhanania@comcast.net.)