20090813a Motion For Discovery

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BILL BOYD Texas Bar No. 0278000 [email protected] RUSS A. BAKER Texas Bar No. 24045440 [email protected]

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BOYD-VEIGEL, P.C. P.O. Box 1179 McKinney, Texas 75070 Telephone: 972-562-9700 Telecopier: 972-562-9600

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Attorneys for Armstrong

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN FRANCISCO DIVISION

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UNITED STATES OF AMERICA 15

No. CR 94 276 PJH

Plaintiff 16 17 18 19

v. CONNIE C. ARMSTRONG, JR.

DEFENDANT ARMSTRONG’S MOTION FOR DISCOVERY IN SUPPORT OF 28 U.S.C. § 2255 MOTION

Defendant

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Armstrong requests an order from this court permitting limited discovery in support of his pending 28 U.S.C. § 2255 motion.

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ARGUMENT

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A habeas petitioner, unlike the usual civil litigant in federal court, is not entitled to

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discovery as a matter of ordinary course. See Harris v. Nelson, 394 U.S. 286, 295 (1969). In

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Harris, The Supreme Court held that “where specific allegations before the court show reason to

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believe that the petitioner may, if the facts are fully developed, be able to demonstrate that he is

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... entitled to relief, it is the duty of the court to provide the necessary facilities and procedures

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for an adequate inquiry.” 394 U.S., at 300. Habeas Corpus Rule 6 is meant to be “consistent” with Harris. See ADVISORY COMMITTEE’S NOTE ON HABEAS CORPUS RULE 6, 28 U.S.C., p. 479.

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Leave of court is required to invoke discovery in a § 2255 proceeding and may be granted only 6 7

for “good cause.” See RULES GOVERNING § 2255 CASES, Rule 6(a). Petitioner bears the burden

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of demonstrating good cause and must allege some material fact to trigger the court’s discretion

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to grant leave for discovery. See Bracy v. Gramley, 520 U.S. 899, 908-09 (1997). Discovery is

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not required if the habeas petition plainly warrants dismissal. See Mayle v. Felix, 545 U.S. 644

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(2005). Here, Armstrong suggests that the Mayle v. Felix threshold has been met because this

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Court has issued a show cause order. At the onset, Armstrong notes that the government’s response to this Court’s show cause

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order failed to address almost all of the Brady violations raised in his 2255 motion. These 15 16 17 18 19 20 21 22

violations include: a)

Failure to produce documents showing that the operation of Armstrong’s

company was the subject of a prior, exculpatory investigation; b)

Failure to produce documents showing that the 36 audio tapes produced at the

close of trial were actually prepared at the request of the prosecution of this case, contrary to the express oral representations of AUSA Yamaguchi and the affidavit of SA Hatcher that the tapes concerned an unrelated investigation; 1 and

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In its response, the government seems to misconstrue this point as a re-litigation of the judge’s evidentiary and continuance rulings on this topic. Armstrong apologizes for any confusion. To the contrary, the issue is not whether the judge abused his discretion in ruling on the record before him. Rather, the issue is would the judge have ruled differently if he knew the tapes in question actually concerned Armstrong’s prosecution in this case and were obtained at the express instruction of AUSA Yamaguchi. ARMSTRONG’S MOTION FOR DISCOVERY

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c)

Failure to produce documents concerning the alignment between the bankruptcy

trustee for Hamilton Taft and the government’s prosecution team. Armstrong requests discovery on these matters as detailed and particularized below. However, should the Court, having reviewed the evidence already in the record and having

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considered the lack of response from the government, be prepared to grant the relief requested 6 7 8 9

under section 2255, Armstrong withdraws this discovery request as moot. Concerning item (a), the prior investigation, Armstrong received documents through FOIA referencing this investigation. [Exhibits p, 1-6, 7]. The documents show that the

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investigation closed without a finding of wrongdoing. [Exhibits p, 8-9]. Although this prior

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investigation occurred before Armstrong’s ownership, a partial FBI 302 shows that cash flow

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patterns analyzed in the prior investigation were the same as those occurring while Armstrong controlled the company. [Exhibits pp. 10-12]. Fortunately, the failure to disclose a prior

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favorable investigation is an oddity, but the Fifth Circuit nonetheless had the recent opportunity 15 16

to consider the matter in U.S. v. Fernandez. 2 There, a unanimous panel analyzed an undisclosed

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investigation under the three familiar factors of Brady. The panel found that the fact of the

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investigation was actually well-known during trial with only the results of the investigation

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remaining undisclosed. The panel further found that the district judge conducted an in camera

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review of the results and found no exculpatory material. Based upon these findings, the panel

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held that no Brady violation occurred. Here, of course, the prior Hamilton Taft investigation was clearly exculpatory yet was never disclosed to Armstrong. Further, the instant situation is more

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troubling from a policy perspective because, unlike the Fernandez investigation that looked for 24 25 26

conduct which violated a known law, the inquiry here turned on whether known conduct could

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559 F.3d 303 (5th Cir. 2009).

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be interpreted as violating a yet-unknown law. [Exhibits p. 13-17; opinion letter stating at page

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16 that no “case law, regulation, or statute” addressed this situation]. Accordingly, Armstrong

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requests un-redacted copies of all memoranda, reports, transcripts of oral statements, financial statements, and other such similar documents which concern the instigation, scope, conduct and

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results of the investigation referenced in the letter shown on Exhibit pages 8 and 9. 6 7

Concerning item (b), the audio tapes, an FBI memo received years after conclusion of the

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trial shows that AUSA Yamaguchi authorized SA Hatcher to conduct the undercover recording

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operation. [Exhibits, p. 18.] This directly contradicts both the sworn affidavit of Hatcher

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[Exhibits, p. 19-22] and the express assurances of AUSA Yamaguchi, both oral and written, to

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the trial judge and to the Ninth Circuit. Additional documents reveal that the Dallas FBI office

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provided significant investigatory support to its San Francisco colleagues. [Exhibits, pp. 23-24; 25; 26].

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When the state, through an act of flagrant prosecutorial misconduct, precludes the introduction of evidence that, had it been admitted, would undermine the court’s confidence in the outcome of a criminal proceeding, it substantially increases the possibility that a fundamental miscarriage of justice— the conviction of an innocent individual—has occurred. Even more so if the state by that egregious misconduct precludes the holding of the evidentiary hearing itself.

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Smith v. Baldwin, 510 F.3d 1127, 1156 (9th Cir. 2007)( Reinhardt, J., in dissent). Here,

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the trial court relied upon the false representation of the AUSA and the FBI on this important evidentiary matter. Absent a stipulation from the government that this conduct occurred and was materially harmful to the defense, Armstrong requires the discovery of certain documents to

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expand the 2255 record. Accordingly, Armstrong requests un-redacted copies of all memoranda, 24 25 26

reports, transcripts of oral statements, telephone logs and summary reports, and other such similar documents flowing between the San Francisco and Dallas offices of the FBI (including

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responsive documents sent by or to the prosecuting AUSA) where the subject of the document

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was Armstrong or the company Hamilton Taft.

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Concerning item (c), the alignment between the prosecution and the bankruptcy trustee, Armstrong requires documents to prove the facts that are suggested by documents in his

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possession. As shown by the record in the trial court and the pleadings on file in this habeas 6 7

matter, the “law of the case” issue was significant to all parties. Armstrong certainly argued for

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the instruction and the government conceded its materiality with the statement that the requested

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instruction would amount to a “gutting of the government’s case.” [Exhibits, pp. 28-30 at 29.]

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While the parties utilized the term “law of the case” in describing the requested instruction, that

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doctrine is not fully on point.

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In an odd procedural conundrum, the trial judge hearing—and the appellate court reviewing—both Armstrong’s criminal matter and the Hamilton Taft bankruptcy case were the

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same. Even so, they were two different causes, thus making a law of the case application 15 16

difficult if not impossible. In short, Armstrong had no standing to contest the actions in the

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bankruptcy case or its appellate proceedings, even though these proceedings directly impacted

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his criminal prosecution.

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Armstrong respectfully requests that this Court remain mindful that the Ninth Circuit

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reversed the trial court and entered a ruling supporting Armstrong’s contention in the criminal

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matter. While a petition for rehearing was pending, the parties settled their dispute. 3 In response

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to motions by the parties, the Ninth Circuit vacated its opinion, thus reinstating the trial court’s

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order—an order that had been held erroneous. This vacatur is expressly prohibited by Supreme 24 25 26

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As additional evidence of the materiality of the bankruptcy proceeding to the criminal prosecution, AUSA Yamaguchi actually authored an amicus brief urging rehearing by the Ninth Circuit. [Exhibits, pp. 38-39].

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Court precedent barring vacatur by reason of settlement. But Armstrong had no direct

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mechanism to address this issue because he was not a party and lacked standing. 4

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The documents received by Armstrong after trial reveal that the doctrine of collateral estoppel was available to him in the trial court. “Under collateral estoppel, once a court has

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decided an issue of fact or law necessary to its judgment, that decision may preclude relitigation 6 7

of the issue in a suit on a different cause of action involving a party to the first case.” San Remo

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Hotel, L.P. v. City and County of San Francisco, Cal., 545 U.S. 323, 336 (2005). In briefing to

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the trial court, the government argued that it was not a party to the bankruptcy case and should

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not be bound by its holding. However, the government did not reveal its close alignment with

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the bankruptcy trustee.

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Evidence delivered to Armstrong after trial shows that the government and the bankruptcy trustee were in privity, thus opening the door for a collateral estoppel argument that

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was otherwise unavailable. [Exhibit, p. 31, showing that counsel for the trustee met with AUSA 15 16

Yamaguchi to “discuss prosecution strategy;” pp. 33-35, detailing an FBI meeting at the offices

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of the trustee; and pp. 36-37, containing a partial FBI 302 where a witness told the FBI

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interviewer that the trustee was “doing your work.”] “Courts are no longer bound by rigid

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definitions of parties or their privies for purposes of applying collateral estoppel or res judicata.”

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Tahoe Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, 322 F.3d 1064,

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1082 (9th Cir. 2003). In light of documentation showing the trustee’s participation in the government’s prosecution strategy and assertions that the trustee was doing the work of the FBI,

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Armstrong asserts a particularized need for documentation concerning the linkage between the 24 25 26

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He did, however, try. [Exhibit, pp. 40-41, docket sheet in the bankruptcy matter; and pp. 42-47, Armstrong’s Motion to Recall Mandate to the Ninth Circuit.] The recall motion overviews the Supreme Court precedent prohibiting vacatur under these circumstances.

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trustee and the prosecution team to conduct a privity analysis for collateral estoppel purposes.

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Accordingly, Armstrong requests un-redacted copies of all memoranda, reports, transcripts of

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statements, telephone logs and summary reports, and other such similar documents that touch on the topic of meetings between the FBI, the AUSA, and the Hamilton Taft bankruptcy trustee

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where the topic of the meeting was either Armstrong or Hamilton Taft. 6 7

Finally, Armstrong requests discovery on whether his prosecution was improperly

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instigated. In its response, the government calls Armstrong’s arguments conclusory. The

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remedy for a conclusory statement is the discovery of facts sufficient to plead with particularity,

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and Armstrong shows good cause for the Court to order this discovery. It is axiomatic that most

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of the relevant proof in such situations will be in the government’s hands. See Wayte v. U.S.,

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470 U.S. 598 (1985) (Marshall, J., dissenting); see also Alderman v. United States, 394 U.S. 165 (1969) (“[D]isclosure must be made even though attended by potential danger to the reputation

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or safety of third parties or to the national security—unless the United States would prefer 15 16

dismissal of the case to disclosure of the information”).

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Here, documents delivered to Armstrong after trial disclose the involvement of

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Representative Pelosi in his prosecution. [Exhibits, pp. 48-51.] Shortly after the prosecution

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launched its investigation, FBI Deputy Director Larry Potts sends a status report to Howard

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Baker, then a director of Federal Express, 5 and copies the report to staff members of Pelosi and

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Senator Boxer. [Exhibits, p. 52]. This memo is the only communiqué produced which reveals contact between Mssrs. Baker and Potts. All documents initiating the involvement of Mr. Potts

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were withheld from Armstrong’s FOIA production, as were the follow-up reports promised in 24 5

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While the memo was sent to Baker, no corporate officer of Federal Express was on the distribution. As a Delaware corporation, a Federal Express director is very different from a corporate officer who would actual run the company. See generally In re Bridgeport Holdings, Inc., 388 B.R. 548 (Bankr. D. Del. 2008)

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the Potts’ memo. Armstrong is entitled to discovery on the question of whether pressure from

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political leaders deprived him of his right to a disinterested prosecutor. See Clearwater-

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Thompson v. Michael A. Grassmueck, Inc., 160 F.3d 1236, 1237 (9th Cir. 1998)(“It is fundamental that the prosecutor of a criminal charge be disinterested. Where that is not the case,

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a judgment of conviction is to be reversed without the need of showing prejudice.”) 6 7

Accordingly, Armstrong requests un-redacted copies of all memoranda, reports, transcripts of

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oral statements, telephone logs and summary reports, and other such similar documents flowing

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between the San Francisco office of the FBI, main justice, Howard Baker, and any elected

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official or staff member of an elected official (including without limitation the persons copied on

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the April 3 Potts memo) where the subject of the evidence is Hamilton Taft or Armstrong.

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SUMMARY “[W]here specific allegations before the court show reason to believe that the petitioner

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may, if the facts are fully developed, be able to demonstrate that he is ... entitled to relief, it is the 15 16

duty of the court to provide the necessary facilities and procedures for an adequate inquiry.”

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Harris v. Nelson, 394 U.S. 286, 300 (1969); see also RULES GOVERNING § 2255 CASES, Rule

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6(a)(adopting the Harris standard as the test for “good cause.”) Armstrong therefore requests an

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order from this Court compelling the government to produce:

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a) un-redacted copies of all memoranda, reports, transcripts of oral statements, financial statements, and other such similar documents which concern the instigation, scope, conduct and results of the prior Hamilton Taft investigation; b) un-redacted copies of all memoranda, reports, transcripts of oral statements, telephone logs and summary reports, and other such similar documents flowing between the San Francisco and Dallas offices of the FBI (including responsive documents sent by or to the prosecuting AUSA) where the subject of the document was Armstrong or the company Hamilton Taft; c)

un-redacted copies of all memoranda, reports, transcripts of

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statements, telephone logs and summary reports, and other such similar documents that touch on the topic of meetings between the FBI, the AUSA, and the Hamilton Taft bankruptcy trustee where the topic of the meeting was either Armstrong or Hamilton Taft; and d) un-redacted copies of all memoranda, reports, transcripts of oral statements, telephone logs and summary reports, and other such similar documents flowing between the San Francisco office of the FBI, main justice, Howard Baker, and any elected official or staff member of an elected official (including without limitation the persons copied on the April 3 Potts memo) where the subject of the evidence is Hamilton Taft or Armstrong. Armstrong respectfully requests that this Court order production of the requested discovery items. DATED: August 13, 2009

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Respectfully submitted,

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/s/ Bill Boyd BILL BOYD

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