Newspaper article St Louis Post-Dispatch (MO)

Federal Indictment of Bailey Dropped but Probe Continues, Authorities Stress

Newspaper article St Louis Post-Dispatch (MO)

Federal Indictment of Bailey Dropped but Probe Continues, Authorities Stress

Article excerpt

Federal authorities on Monday dropped an indictment against former Missouri Treasurer Wendell Bailey but emphasized that he remained under investigation.

Monday's action is for "court procedural reasons only," Stephen Hill, U.S. attorney for western Missouri, said in a brief statement.

Bill Wendt, who until Monday was Bailey's attorney, said, "I expect we'll see another indictment."

Monday's development in Springfield, Mo., was the latest twist in an investigation into Bailey's actions as state treasurer from 1985 to 1993 and as a Republican candidate for governor in 1992.

Shortly before noon Monday, at Hill's request, U.S. District Judge Russell G. Clark in Springfield dismissed the indictment.

"In no way should this action be interpreted as a signal that a criminal investigation has been terminated," Hill said in the statement. "Although we would like very much to explain our reasons for seeking the dismissal of the indictment, the rules of federal criminal procedure prohibit us from doing so at this time."

A grand jury issued the two-count indictment last week. The first count accused Bailey of using state equipment and state workers on state time for his last two campaigns. The second and more serious count accused him of money-laundering by taking leftover campaign money in 1992 for personal use.

Bailey, who faced combined penalties of up to 30 years in prison and $750,000 in fines, could not be reached for comment.

He pleaded not guilty on Thursday, rejecting a two-day effort by federal officials to persuade him to accept a plea-bargain agreement. Hill offered to drop the money-laundering charge if Bailey pleaded guilty to misusing state workers and state equipment.

After Bailey's refusal last week, Hill said more serious indictments might replace the existing one. The grand jury isn't scheduled to meet again until next month.

Wendt and others cited Hill's comment when speculating on the reason for Monday's action. A sealed document was submitted with the government's dismissal request.

At Monday's court proceeding, Wendt removed himself as Bailey's lawyer. Wendt, who had pressed for a plea bargain settlement last week, said Bailey now was represented by David Steelman, a lawyer in Rolla. …

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