Attorneys for the state Department of Education have filed a motion for a new trial to overturn a $7.6 million judgment in a whistle-blower case, despite unanswered questions from a state assemblyman who wants to know where the department is getting the money for its six-year legal battle.
Documents obtained previously by The Associated Press show the department has set aside nearly $4 million to pay private attorneys in a series of cases related to misappropriation of federal money and the related whistle-blower case against former Superintendent of Public Instruction Delaine Eastin.

The ballooning legal costs prompted Assemblyman Michael Duvall, R-Yorba Linda, to request information from the department about who is authorizing the case to continue and from what budget the money is being drawn.

The one-page memo he received in response stated the lawsuit is being paid out of "state general funds appropriated by the Legislature for support of the department." Duvall said it did not address any of his questions and has asked for more details from the Department of Finance and the state controller.

Documents given to Duvall in response this week show hundreds of thousands of dollars in legal payments but do not provide all the answers he was seeking. The AP obtained the documents separately from the controller's office.

They show the Department of Education used hundreds of thousands of dollars from other budgets under its authority, such as specialized after-school programs for at-risk youth.

Hilary McLean, a spokeswoman for schools superintendent Jack O'Connell, said the department spent about $1 million from July 1, 2002, to April 30, 2007, on the case against former department staffer James Lindberg.

The former compliance monitor sued the department, Eastin and department manager Joan Polster in 2001. He claimed to have discovered that millions of dollars in federal money had gone to nonexistent or fraudulent community groups from 1995 to 2000.

He claimed Eastin ignored him when he brought the wrongdoing to her attention and that he was demoted when he persisted. His lawsuit claims he later suffered two heart attacks from the job-related stress, leaving him in a wheelchair.

Federal criminal charges were later brought against operators of adult education programs in Sacramento and Los Angeles. In addition, the department under Eastin agreed to repay more than $3 million to the U.S. Department of Education.

In the Lindberg case, a Sacramento jury in 2002 found the department and both defendants personally liable for his health problems and awarded him $4.5 million in damages. The department appealed the decision, and a new jury awarded the whistle-blower $7.6 million in April.

In the state's latest motion, filed late last month, lead attorney David Cheit argues that the retrial judge unfairly prejudiced the jury and disallowed some evidence that would have helped the state's case.

"The court infected the entire trial with a measure of prejudice that was beyond cure," Cheit wrote in the brief. "The result was an award that can only be explained as the result of passion and prejudice, and which, even more so than the first award, is excessive as a matter of law."

McLean said the department still believes the case is winnable and that it is in taxpayers' best interests to pursue it.

"It's unfortunate that it's taking us so many steps through the legal system to get there," she said.

Lindberg's attorney, Gaspar Garcia, has appealed the state's motion for a new trial.

Duvall said he is frustrated after making repeated requests and receiving what he describes as only vague answers in return. He said he is concerned about how much the latest appeal will cost the state.

"I want to know how much money has been spent, I want to know where it came from, and I want to know why it's not budgeted," Duvall said Wednesday.

Duvall noted that about $2 million was included in last year's budget to pay for legal challenges to the state's high school exit exam, yet none of the money for the Lindberg lawsuit is identified in the state budget.

McLean said such line-item spending is only required when the Legislature or governor set aside money to fight a specific case.

"There are many cases that departments throughout state government deal with that are not specifically addressed in line items in the budget," she said.

Documents previously obtained by the AP show the department authorized the transfer of more than $750,000 starting in 2001 from adult education and special education programs for deaf, blind and other special-needs children to pay for the Lindberg and related cases.

McLean said they were incorrectly coded. The money actually came from the department's general fund, she said.

The new documents released by the controller's office, however, show that the education department moved more money from specific programs to pay private attorneys. That includes:

— $100,000 from the "hate violence/tolerance fund." It was not immediately clear what this program does.

— $65,000 from the High-Risk Youth Education and Public Safety Program, which provides after-school programs for students who have been incarcerated or are first-time offenders.

— $35,000 from the community day schools fund, which serves high-risk youth.

— The source of another $100,000 transferred in the 2005-06 budget year was not specified.

All those funds list an accounting code that corresponds to the state superintendent's office. The department could not immediately respond to questions about those funds, McLean said.

Meanwhile, Garcia, the whistle-blower's lawyer, said he was preparing a motion seeking the court-ordered compensation for Lindberg's mounting legal fees, which he said are likely to total about $600,000.

Attorneys say U-S Representative William Jefferson is facing legal bills that could reach two million dollars to fight complex public corruption charges that include bribery, racketeering and money laundering.

As of yesterday, the New Orleans Democrat had 136-thousand dollars in a legal defense account, a net debt in his campaign election fund and a congressional salary of 165-thousand, 200 dollars a year.

Election and white-collar defense attorneys in Washington say Jefferson's trial could last two to three months.

Evidence against him fills eight file cabinets.

Lawyers say a defense of that complexity and length easily could push Jefferson's defense costs into seven figures.

Campaign lawyer Ken Gross says the case involves a lot of witnesses and the case has a lot of tentacles.

A federal grand jury in Virginia indicted Jefferson last week on 16 counts of public corruption.

The indictment alleges Jefferson used his influence as co-chairman of the House Africa Investment Trade Caucus to broker deals in various African nations.

Jefferson maintains his innocence.

Republicans did not defend him, but most voted against moving the resolution ahead.

Short of impeachment, Congress has no authority to oust a Cabinet member, but Democrats were trying anew to give him a push. Gonzales dismissed the rhetorical ruckus on Capitol Hill, and President Bush continued to stand by his longtime friend and legal adviser.

A spokesman for the Justice Department said he could not comment on matters of pending litigation.

In the appeal case before the Supreme Court, shareholders of Charter Communications Inc. (CHTR.O: Quote, Profile, Research sued Scientific Atlanta and Motorola Inc. (MOT.N: Quote, Profile, Research, accusing them of aiding a scheme to inflate Charter revenues in 2000. A lower court dismissed the case, saying that companies were not liable because they were not primary players in the alleged fraud.

Enron shareholders are closely watching the case because it could affect their own attempt to sue banks, including Merrill Lynch & Co. (MER.N: Quote, Profile, Research, for helping put together financing transactions for Enron before its collapse.

Legal briefs supporting the plaintiffs in the Charter case are due at the Supreme Court by midnight on Monday.

Newman said he and other investor advocates started hearing late last week that the solicitor general would not support the SEC's position.

Wilson's sentence was widely criticized as being too severe, even by members of the jury that convicted him and the author of the 1995 law that put him behind bars.

His case became a cause celebre that grew from local blogs and TV stations to national news shows and editorial pages. Some supporters, including former President Jimmy Carter, have said it raised questions about race and the criminal justice system. Wilson and five other males charged in the case are black, as are the two teenage girls involved.

"As far as I'm concerned, this case is a throwback to Southern justice," said state Sen. Vincent Fort, an Atlanta Democrat.

Wilson, homecoming king of his school who was being recruited to play football at Vanderbilt University, has served more than two years of a mandatory 10-year sentence for aggravated child molestation. He was captured on videotape having consensual oral sex with a 15-year-old girl in 2003 when he was 17.

If the sentence stands, he would also be placed on Georgia's sex offender registry.

At the time of his crime, Wilson would have faced just one year in prison if he had sexual intercourse with the girl. The "Romeo and Juliet" exception in Georgia law also would have allowed him to avoid the sex offender registry.

Lawmakers last year voted to close that loophole. But the state's top court said the new law could not be applied retroactively to Wilson, now 21.

Opponents of Wilson's release said it could open a floodgate for other cases. Georgia prisons currently hold 189 inmates who were sentenced for aggravated child molestation when they were 21 or younger.

Of those, 56 percent were white and 44 percent black, state figures show.

Black community leaders planned a protest outside Attorney General Thurbert Baker's office late Monday. Baker, who is black, is now pushing to keep Wilson in prison, arguing that his sentence is valid.

In his notice of appeal, Baker argued that Georgia law does not give a judge authority to reduce or modify the sentence imposed by the trial court. He said he would seek an expedited ruling from the Georgia Supreme Court. And he noted that a plea deal is on the table that would release Wilson in a maximum of five years and also remove him from the sex offender registry.

Not good enough, said Wilson's lawyer, B.J. Bernstein.

"It is really ridiculous when you consider that we had a judge that just said it is a misdemeanor that carries no sex offender registration," she said.

"It is extremely, extremely disturbing that the attorney general would take this action now."

Bernstein said her office was seeking bond for Wilson, which would allow him to leave prison while the appeal is pending.

The judge's ruling Monday threw out Wilson's 10-year sentence and amended it to misdemeanor aggravated child molestation with a 12-month term, plus credit for time served, and he would not be required to register as a sex offender.

"The fact that Genarlow Wilson has spent two years in prison for what is now classified as a misdemeanor, and without assistance from this court, will spend eight more years in prison, is a grave miscarriage of justice," wrote Judge Thomas H. Wilson, who is no relation to Genarlow Wilson.

"If this court or any court cannot recognize the injustice of what has occurred here, then our court system has lost sight of the goal our judicial system has always strived to accomplish ... justice being served in a fair and equal manner," the judge wrote.

When the judge's order arrived Monday morning, Wilson's lawyers applauded and hugged his mother, Juannessa Bennett, who wiped away tears.

"I just feel like a miracle happened," Bennett said.

After the notice of appeal she looked stricken.

"It's heartbreaking," Bennett said.

Wilson's prominent supporters included Dallas Mavericks owner Mark Cuban, who declared he would boycott Georgia until Wilson was free, and Carter, who wrote a letter in support of Wilson to the state attorney general.

The court battle over Wilson's fate also drew comparisons to the rape charges leveled against Duke University lacrosse players last year, with critics saying prosecutors in both cases overreached.

Wilson was also charged with rape for being one of several male partygoers at a hotel to have sex with another 17-year-old girl, but was acquitted. The party was captured on a videotape that was played for the jury.

The five other male partygoers took plea deals in the case. One of them has been released from prison and is now in college.

"This process has been drug-out a long time, which says to me it is political," he said. "There is no wrong doing."

Opposition Democrats are calling for the Attorney General's ouster over what they say is the politically-motivated firing of eight federal prosecutors. The Justice Department says those dismissals were based on poor performance.

During this trip to Europe, President Bush also suffered a set-back to his top legislative priority of the year: comprehensive immigration reform.

A bipartisan bill fell short of the votes it needed in the Senate because some members of the president's own party object to its provisions giving illegal immigrants a path to citizenship.

The president says he knows it is a tough debate, but he is still optimistic about getting the bill through.

At dusk, illegal immigrants prepare to use an inner-tube to cross the Rio Grande River at the U.S-Mexico border in Nuevo Laredo, Mexico, 02 June 2007
"I believe we can get an immigration bill," he said. "Now it is going to require leadership from the Democrat leaders in the Senate, and it is going to require me to stay engaged and work with Republicans who want a bill."

While in Europe, the president telephoned three Republican Senators to lobby for the immigration bill. He will go to Capitol Hill Tuesday to press them further.

"It is important that we address this issue now and I believe we can get it done," he said. "Listen, a lot of progress was made between people in both parties making hard decisions necessary to move a comprehensive plan."

Mr. Bush says the legislative process often takes two steps forward and one step back. He says he will start Tuesday to work toward taking some steps forward again, telling a reporter on the trip, "I will see you at the bill signing."