A federal appeals court said Friday that it would hear arguments on whether to unseal records of secret court proceedings linked to the government's bribery case against associates of jailed former Congressman Randy "Duke" Cunningham.
The Ninth District Court of Appeals stepped into the case of New York financier Thomas Kontogiannis, who pleaded guilty in closed court in February to illegally helping finance the congressman's purchase of a $2.5 million Rancho Santa Fe mansion. The plea agreement was unsealed June 13.
U.S. District Judge Larry Burns had ordered the release of transcripts of four hearings held in San Diego federal court in February and April that contain details about why Kontogiannis' plea was sealed for four months. Government lawyers objected in sealed motions last week, citing federal statutes protecting classified information.
The appeals court ordered a hearing in early August.
At a previously scheduled hearing Friday in San Diego, Burns chided prosecutors for reneging on an earlier understanding that records of the secret hearings would eventually be made public.
"Given the extraordinary nature of this, I think the public at least has a right to know the right procedures were followed," Burns said.
Assistant U.S. Attorney Jason Forge responded that the government had changed its mind about what details of the case were sensitive.
"Now that we have a full appreciation for the scope of the category of information that should not be disclosed, we're asking the court to agree and revise the earlier agreement," Forge said.
Kontogiannis is expected to be called as a government witness against his nephew, Long Island mortgage banker John Michael and his co-defendant, Poway defense contractor Brent Wilkes.
The two men have pleaded not guilty to multiple charges of money laundering and unlawful monetary transactions. Wilkes has additionally pleaded not guilty to bribing Cunningham in return for government contracts.
Their case is set for trial before Burns in September.
Michael's attorney, Ray Granger, said his client has a right to know the extent of Kontogiannis' cooperation with the government if he is to appear as a witness in that case.
"The government effectively sucker-punched Judge Burns," Granger said after the hearing.
A message left with Wilkes' attorney was not immediately returned.
Cunningham pleaded guilty in November 2005 to taking $2.4 million in bribes from Wilkes and other defense contractors in exchange for millions of dollars in government contracts. The former Republican lawmaker from San Diego is now in federal prison serving a sentence of more than eight years.
