Former Enquirer reporter guilty

Friday, September 25, 1998

BY DAN HORN
The Cincinnati Enquirer

gallagher
Michael Gallagher
A former Cincinnati Enquirer reporter admitted Thursday to stealing voice-mail messages from Chiquita Brands International Inc., but he may avoid jail because he is cooperating with investigators.

Michael Gallagher, who was fired from The Enquirer three months ago, pleaded guilty to two felony charges accusing him of accessing Chiquita's computerized voice-mail system last year.

The charges stem from a series of articles Mr. Gallagher co-wrote in May that quoted corporate telephone messages about Chiquita's business practices.

At Mr. Gallagher's hearing Thursday in Hamilton County Common Pleas Court, special prosecutor Perry Ancona said the former reporter is now aiding the criminal investigation.

"Mr. Gallagher has been cooperating and has agreed to continue to cooperate with the special prosecutor," Mr. Ancona said.

Mr. Gallagher pleaded guilty to one count of unlawful interception of communications and one count of unauthorized access to computer systems. Mr. Ancona said additional charges would not be filed as long as Mr. Gallagher continued to help investigators.

Although Mr. Ancona would not discuss the extent of Mr. Gallagher's cooperation, Judge Richard Niehaus said prosecutors told him that "other indictments may be returned."

"They were not specific about what they want him to do, but obviously they want him to discuss who else was involved," Judge Niehaus said after accepting the plea agreement. "They indicated to me there were others involved and they needed his cooperation."

Mr. Ancona, who was named special prosecutor four months ago, is leading the grand jury investigation. He was appointed after Hamilton County Prosecutor Joseph Deters stepped aside because he had accepted campaign contributions from Chiquita Chairman Carl H. Lindner Jr.

Although Mr. Gallagher could face up to 2 1/2 years in prison and a $7,500 fine, the judge said the charges carry a "presumption of probation," because Mr. Gallagher has no prior convictions. Mr. Ancona said he would not discuss details of Mr. Gallagher's involvement until he is sentenced in March.

Chiquita officials said the special prosecutor's pursuit of the case -- and the resulting plea agreement -- could set a new legal standard for the protection of private communications. The company's president, Steve Warshaw, said Mr. Gallagher's plea also reinforces Chiquita's contention that the Enquirer articles were inaccurate.

"Today's guilty plea by the lead reporter, Michael Gallagher, clearly supports the fact that these stories were false, misleading and lacking credibility," Mr. Warshaw said Thursday.

The articles, published in May, quoted messages left on the telephone voice-mail systems of several Chiquita executives. The articles stated that a "high-ranking Chiquita executive" had provided tapes of the messages.

Weeks later, however, the newspaper published a front-page apology, renounced the series and announced it had agreed to pay Chiquita more than $10 million. The apology said Mr. Gallagher had deceived his editors about how he obtained the recorded telephone messages.

Enquirer Publisher Harry Whipple declined to comment Thursday on Mr. Gallagher's plea agreement. Mr. Gallagher and his attorney also declined to comment.

After four months of investigating, Mr. Ancona's plea agreement with Mr. Gallagher was resolved quickly Thursday morning. In just over an hour, Mr. Gallagher was fingerprinted, photographed, charged, arraigned and presented to the court to enter his plea. He appeared before Judge Niehaus in a blue suit and gave only brief answers to the judge's questions.

"Do you believe it's in your best interest to plead guilty to these two charges?" the judge asked.

"Yes, sir," Mr. Gallagher responded.

While Mr. Ancona would not discuss the investigation or its possible targets, a civil lawsuit filed by Chiquita in July indicates that company officials think Mr. Gallagher was helped by several others.

The federal lawsuit, filed against Mr. Gallagher, states that three unidentified past or present Chiquita employees and four other outside sources aided Mr. Gallagher in a "conspiracy" against the company. The suit also asserts that four Enquirer employees assisted or supervised Mr. Gallagher's work.

To date, Mr. Ancona has identified only one other defendant: George Ventura, Chiquita's former legal counsel in Honduras. Mr. Ventura pleaded not guilty last week to five counts of unlawful interception of communications and five counts of unauthorized access to computer systems.

Mr. Ventura's attorney, Marc Mezibov, said Mr. Gallagher's plea will not change his client's plan to fight the charges.

"I'm not at all concerned about how Mr. Gallagher's plea could harm Mr. Ventura," he said. "We'll deal with it if any problems arise."



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