[Moxley Confidential] Why Did Wayne Gross Recuse Himself From the Mike Carona Investigation?

Gross Ambition
A federal prosecutor recused himself from the Carona probe. But it seems he couldn't stay away from Carona

You might expect that most federal prosecutors would relish the idea of indicting a dirty, two-faced sheriff. Yet, other than Brett Sagel and Ken Julian, few—if any—assistant United States attorneys here were willing to take on Mike Carona's corruption of the nation's fifth-largest sheriff's department.

Wayne R. Gross, the man who headed the Department of Justice's (DOJ) Santa Ana branch until last October, has said he was, in fact, unable to handle the case: According to published reports, he said he had recused himself because he had worked on unspecified “crime initiatives” with Carona.

While his recusal was surely warranted, I've long suspected there was more to the story. Last week, I asked Gross to enumerate those crime initiatives and how such work prohibited him from nailing Carona on the public's behalf. Now defending accused white-collar criminals for Snell N Wilmer LLP in Costa Mesa, Gross said he could not prosecute Carona because he'd “worked with the sheriff on common crime issues such as counterterrorism and street crime.”

But here's a nagging question: Did Gross' recusal give him a free pass to lobby Mike Carona for help in Gross' pursuit of a seat on the superior-court bench?

Now, Gross' desire to become a judge was no secret in OC political circles. What's less well-known is this: During the time that Gross' office was actively investigating Carona for corruption, according to several sources, Gross asked Carona for help in securing a judgeship.

Gross would neither confirm nor deny that specific allegation, but he did tell the Weekly that there was nothing improper about any contacts he had with Carona.

Though he had recused himself from working on the Carona case directly, Gross continued to supervise those who did. Indeed, it appears he made a key decision in late 2006 that shifted the lead Carona prosecutor to another case. Gross would not comment specifically on that reassignment.

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Let's go back to May 2005, the sixth year of Carona's regime. The federal probe of corruption at the Orange County Sheriff's Department had bounced on and off several DOJ desks in OC and finally landed on Sagel's. The now-33-year-old prosecutor—who'd arrived from the agency's Washington, D.C., headquarters in February 2004—wouldn't grant an interview for this story, but others in the Santa Ana DOJ office say Gross expected the probe to be limited to then-Assistant Sheriff George Jaramillo, Carona's handpicked top underling.

Placing a federal bulls-eye on Jaramillo but not Carona was odd. The sheriff and Jaramillo had been inseparable, politically and personally, for years. Yet District Attorney Tony Rackauckas' office aimed to prosecute only Jaramillo. As evidenced by thousands of pages of once-secret grand-jury transcripts reviewed by the Weekly, the DA's office had no intention of spending one skeptical minute on Carona.

The intrigue gets better. Susan Kang Schroeder, Rackauckas' senior media adviser, has consistently maintained that federal agents specifically asked local prosecutors to leave Carona to them. The feds dispute Schroeder's assertion. They tell me they weren't sharing their intentions—much less probe details—with the DA's office because of concerns about the Schroeders' ties to Carona. Susan's husband is, of course, political strategist Mike Schroeder, who advises both Rackauckas and Carona.

Whatever the truth, it's clear the people running both the local DOJ and the DA's office were comfortable either ignoring Carona or letting someone else hold him responsible for his conduct. The California attorney general's office—the third potential prosecuting law-enforcement outfit—slept through the entire ordeal. Okay, to be fair, the AG's office—run through much of the period by Bill Lockyer, a Democrat with tight connections to Mike Schroeder's allies at Robinson, Calcagnie N Robinson, Lockyer's top campaign contributor—awakened once to explore Carona's insatiable thirst for government secretaries, intoxicated middle-aged women unable to resist a uniform and the wives of criminal defendants (see “Sex, Bribes and Jailhouse Scams,” Oct. 13, 2005).

At the same time his office probed the sheriff's department, Gross—who won accolades for his prosecution in the UC Irvine fertility scandal—made it clear to Orange County power brokers that he wanted endorsements in his planned candidacy for superior-court judgeship. Those heavy hitters were the ones who okayed Carona's rise to sheriff in 1998 and weren't receptive to the idea of his indictment-guilty or not.

“Everybody knew that Wayne desperately wanted to be a judge,” said one Orange County prosecutor who has known Gross for years. “I don't think he made an effort to hide his desire.”

Also during the Carona probe, Gross repeatedly socialized with Mike Schroeder at the ritzy Gulfstream restaurant in Newport Beach. Among his many other responsibilities at the time, Schroeder was chairman of the local Republican Party's endorsements committee. Last year—before the Carona indictment—Schroeder acknowledged that Gross wanted a judgeship but said they did not discuss the federal investigation of the sheriff.

While Sagel and FBI and IRS agents followed the evidence and built their case against Jaramillo, Assistant Sheriff Don Haidl, defense lawyer Joseph G. Cavallo and Carona, they encountered a major setback. In December 2006, according to my DOJ sources, Gross ordered Sagel to shift his focus to an unrelated case: already-imprisoned, second-tier Aryan Brotherhood hoodlums. Federal-court docket records confirm that Sagel began appearing in court for that trial on Dec. 19.

DOJ sources told me several other assistant U.S. attorneys not assigned to the sheriff's probe could have handled the white supremacists.

Though hampered, Sagel worked in his spare time—nights, weekends and holidays—on the Carona investigation, according to sources familiar with the case. To his credit, Sagel managed to obtain secret guilty pleas from both Haidl and Jaramillo in March 2007, during his lengthy Aryan Brotherhood trial—which lasted until August.

“That nine-month delay in 2007 absolutely jeopardized the case,” a veteran federal law-enforcement official told the Weekly. “Remember, the clock was ticking—a five-year statute-of-limitations clock for crimes committed in 2002. Carona might have escaped if Brett hadn't gotten a Haidl confession in his spare time.”

But Gross hadn't made his last cameo in the Carona saga. Multiple sources insist there is evidence that while Sagel spent his days tied down with the Aryan Brotherhood trial, Gross solicited a personal favor from Carona, asking the sheriff to call Arnold Schwarzenegger, a Carona pal, and see if he could win Gross a governor's appointment to the superior court.

No one interviewed for this story believed Gross' request for Carona's help was a quid pro quo involving the criminal probe.

Thom Mrozek, spokesman for the DOJ in LA, would not confirm the evidence, or say if ethics rules permit the head of a DOJ branch to seek favors from a known criminal target.

Confronted with the allegation that he'd contacted Carona during his office's probe of the sheriff, Gross did not deny it. Responding to e-mailed questions, he initially wrote that it would be “inappropriate” to address the subject. Later, Gross suggested he might file a lawsuit if this story were published. The next day, Feb. 20, he softened. He wrote in an e-mail, “Given my immediate and proper recusal from the investigation at issue, the record is clear that my interactions with the sheriff were entirely proper.”

But why had Gross given Sagel an assignment that took him away from the Carona investigation? “Regarding case assignments, your question was asked in the context of a theory that, however farfetched, might be raised at the upcoming trial,” Gross told me. “I therefore don't feel that it's appropriate for me to talk about that issue or similar issues, on or off the record. I realize that this means that others may speculate about case assignments and other such things. But the record is clear that, during my tenure, the Orange County U.S. attorney's office had very few resources, yet was responsible for successfully investigating and prosecuting some of the largest and most complex cases in the country.”

It's unclear how—or if—officials confronted Gross about his alleged Carona-lobbying. But Gross had other problems. On Oct. 19, 2007, Huntington Beach police arrested him for “driving under the influence of alcohol/drugs,” according to superior-court records. Gross hired Schroeder pal Allan Stokke, a defense lawyer, and got three years' probation, a $390 fine and sessions with Mothers Against Drunk Driving.

One other question we had for Gross: Was he forced out of his job? After all, on Oct. 29—the day before government officials revealed their felony-loaded bribery indictment against the sheriff, his wife and top mistress—they announced Gross' departure for him.

According to Gross, the timing was a coincidence—an assertion that many DOJ staffers believe. Gross wrote, “My transition to the private sector was in the works for months prior to my departure.”

rs**********@oc******.com