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Grand Jury Says Abuse Stories Were a 'Carefully Crafted Hoax' Many Rumors Are Debunked In Report; Three Are Indicted - July 25, 1990 - Omaha World-Herald

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Grand Jury Says Abuse Stories Were a 'Carefully Crafted Hoax' Many Rumors Are Debunked In Report; Three Are Indicted; [Sunrise Edition] Robert Dorr, Gabriella Stern. Omaha World - Herald. Omaha, Neb.: Jul 25, 1990. pg. 1

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(Copyright 1990 Omaha World-Herald Company)

Franklin Case, County Grand Jury Report

A Douglas County grand jury Tuesday called the Franklin Community Federal Credit Union child sexual-abuse allegations a "carefully crafted hoax."

The grand jury's report said the hoax was "scripted by a person or persons with considerable knowledge of the people and institutions of Omaha. . . ."

While not specifically saying who planned the hoax, the report was critical of some state officials and others who made or supported the child sexual-abuse accusations.

The grand jury said blame must fall on three young people who accused prominent Omahans of sexual misconduct. Two have recanted their original stories, and the third was indicted Tuesday on charges of lying to the grand jury.

The grand jury said "rumormongers" spread much gossip and misinformation.

It said "many in the community both spread and received the gossip," and named three people in particular - part-time Omahan and fired Boys Town employee Michael Casey and Kirsten Hallberg and Bonnie Cosentino, who were active in the Concerned Parents group.'Hidden Agendas'

The grand jury criticized Gary Caradori, the Franklin legislative committee investigator killed in a plane crash July 11, saying he was "duped into working with Casey."

The grand jury said the three young adults who alleged they had been sexually abused as minors were motivated by the prospect of selling their story.

One of the three, James Daniel "Danny" King, 20, became involved in the Caradori interviews at the suggestion of Troy Boner, 23, the other man who claimed at first he had been sexually abused, the grand jury said.

"It is the grand jury's finding that Danny King became involved in the video story at the suggestion of Boner solely for the purpose of corroboration of allegations made by (Alisha) Owen.

"After repeatedly telling Caradori that the events did not take place, Danny King was still persuaded to corroborate (Miss) Owen's story," the grand jury said.Wadman Cleared

Later, when Boner and King testified before the grand jury, they recanted the stories they had told Caradori, the report said.

Miss Owen, 21, an inmate at the Nebraska Center for Women at York, had accused former Omaha Police Chief Robert Wadman of sexual misconduct with her when she was a teen-ager. The grand jury indicted her on eight counts of lying to the grand jury.

Wadman, now police chief in Aurora, Ill., was cleared of any wrongdoing.

Another person indicted was Alan Baer, 67, former owner of the J.L. Brandeis & Sons department store chain. He was charged with two felony counts of paying or compensating men to perform sexual acts.

The grand jury said, however, it found "no direct connection" between Baer and Lawrence E. King Jr. or the Franklin Credit Union, other than limited social and business dealings. King was the credit union's top executive.

The third indictment charged Paul A. Bonacci, 22, an inmate at the Lincoln Correctional Center, with three counts of lying to the grand jury.Votes Not Given

Miss Owen's "motivation was to obtain a reduced prison sentence, or more comfortable conditions, and to collect money for her story or from civil litigation," the report said.

The grand jury added: "We think that (Miss) Owen might have been sexually abused during her early years, but not by the people and in the way she has alleged."

The grand jury didn't say how many of its members voted to indict. Each of the three indictments required at least 12 votes among the 16 grand jurors. The grand jury's proceedings were secret.

The grand jury said the Legislature's Franklin committee had "hidden agendas" in pursuing the sexual-abuse allegations. Committee Chairman Loran Schmit has been "politically irresponsible" in some of his statements, the grand jury said.

Former State Sen. John DeCamp's memorandum naming five people who, he said, were central figures in the investigation amounted to a "smear campaign" and further spread the rumors, the grand jury said.'No Credible Evidence'

The grand jury cleared a number of prominent Omahans of sexual wrongdoing. It debunked many of the rumors that have surrounded the 1988 failure of the credit union.

"We found no credible evidence of child sexual abuse, interstate transportation of minors, drug trafficking or participation in a pornography ring," the grand jury said.

"To the extent that homosexual relations occurred involving such employees or officials, the evidence we were able to uncover showed these exchanges to be voluntary acts of persons above the age of consent," the grand jury said.

The 42-page report containing 12,000 words and the three indictments complete the grand jury's work, which began March 19 and took place in the Douglas County Courthouse in downtown Omaha.

The grand jury also said it found "no evidence of a coverup," saying:

"There are citizens who believe that prominent individuals, allegedly associated with this case, are automatically guilty because of their public stature.

"They also believe that the public stature of these individuals allows automatic protection and the power to cover up situations. While we agreed that this was a possibility, our investigation found nothing to substantiate any of these allegations."Thoroughness

Omaha attorney J. William Gallup said he thinks the grand jury's report will be generally accepted. "The grand jurors were total strangers to this. . . . I don't think intelligent people will have any problem with this report. Some people will always have questions."

Attorney James Martin Davis, who earlier said, "Omaha's going to be the first city in history to gossip itself to death," said Tuesday he believes the thoroughness of the report, including the many names included in it, will satisfy most people.

Davis added: "The forest fire is now out, but we still have embers that remain smoldering."

But Schmit, the legislative committee chairman, said the indictments of two young people on charges of lying to the grand jury were "tragic" in light of the alleged abuse they suffered.

Trish Lanphier, a founder of Concerned Parents, a group supporting investigation of child abuse, said the report won't be accepted by the public because its "overall theme is to blame the victims."

The grand jury referred specifically to numerous people in addition to the three who were indicted:

Lawrence E. King Jr.: Although King, chief executive of the failed Franklin Community Federal Credit Union, is charged with federal financial crimes relating to Franklin, the grand jury "found no credible evidence of child sexual abuse, interstate transportation of minors, drug trafficking or participation in a pornography ring by King or other Franklin officials and employees."

The grand jury said King did use money or other items to procure men in their late teens or early 20s for homosexual sex and, thus, committed the crime of pandering.

But the statute of limitations may have expired on some of those crimes, and it probably would not be good use of court resources to pursue those crimes, considering the charges against King dealing with Franklin's financial failure, the grand jury said.

King was indicted by a federal grand jury last year and faces 40 charges. He currently is undergoing mental treatment to determine whether he can be tried.

He is no relation to Danny King, the 20-year-old who recanted his original statements to Caradori.

Alan A. Baer: The report said that allegations made by Miss Owen and Bonacci about Baer "are not true. It appears Baer was written into the script because of his wealth and well-known homosexuality."

The grand jury said it had "two areas of concern regarding" Baer. The jury said it heard testimony from male adults who said they had sexual relations with Baer for pay.

Moreover, the jury said, "the names of one or more of these individuals appear on tax returns as recipients of money from a private foundation set up by Baer and of which he is the president.

"Such evidence calls into question the legitimacy of Baer's tax filings and charitable contributions and raises the possibility that such contributions were used to channel money in exchange for sex while at the same time providing Baer with income tax deductions."

The grand jury report said it decided "against indicting Baer for possible income tax evasion," based on a review of Nebraska's tax structure and state tax laws. However, the grand jury said it would "strongly urge a thorough and impartial review of all of Baer's applicable tax filings by federal authorities." A federal grand jury in Omaha has been investigating the Franklin case.

Baer's attorney, Steve Seline of Omaha, emphasized that Baer was cleared of any sexual exploitation of minors.

Seline contended that the pandering charges against Baer were "incorrect and inappropriate."

He declined to comment further.

Robert Wadman: Wadman was "unjustly accused by Alisha Owen of sexually abusing her. . . ."

"These false accusations have caused him great anxiety, loss of personal and professional reputation and humiliation to his family," the jury said.

"We now look upon Owen as the perpetrator and Wadman as the victim."

Alisha Owen "made serious mistakes in describing a number of Wadman's physical characteristics," the report said.

The grand jury's report said the young men who originally said they were victims recanted their video statements and testified that a third person, Miss Owen, was perpetrating a hoax for personal gain.

Contacted Tuesday in Utah where he was vacationing, Wadman said, "I've known the truth from the beginning. I'm glad I could assist the grand jury.

"The circumstances surrounding this problem have been very damaging to my family, very hurtful to my career."

Wadman's attorney, Michael O'Brien of Omaha, said he was surprised that the grand jury named as many people as it did in its report. He said he is afraid that by naming figures such as Wadman "it just furthers the damage and victimization of these individuals who are falsely accused."

Harold W. Andersen: The grand jury said it found no evidence to support allegations that Andersen, retired World-Herald publisher, was involved in sexual misconduct or other illegal activity.

"The motive for naming Andersen as connected with suspected child abusers was probably politically generated due to his position as publisher of the Omaha World-Herald at that time."

P.J. Morgan: The Omaha mayor had been exonerated earlier and was cleared again in the grand jury report.

Eugene Mahoney: The Omaha Public Power District director and former State Game and Parks Commission director was cleared of sexual misconduct allegations.

"Mahoney may have been included because of his personal friendship with Harold Andersen as well as his long-time political connections within the State of Nebraska," the grand jury said.

District Judge Theodore Carlson: The grand jury cleared Carlson of sexual misconduct allegations.

Thomas McKenney: The Omaha lawyer, a former deputy Douglas County attorney, was cleared of bribery allegations made by Alisha Owen.

The grand jury quoted this from William Shakespeare's Henry IV: "Rumor is a pipe, blown by surmises, jealousies, conjectures and of so easy and so plain a stop that the blunt monster with uncounted heads, the still discordant wavering multitudes, can play upon it."

The grand jury then observed: "Perhaps never in the history of Douglas County has the discordant multitude played so feverishly upon the rumor pipe as in the allegations of sexual misconduct surrounding Franklin."

The grand jury said Caradori, the Franklin legislative committee investigator, "led his witnesses," "fed" them information and "worked from a sensational base. If there appeared to be something that would be scandalous, he was interested in following it through."'Never Happened'

Marc Delman of Omaha, Boner's attorney, said Tuesday that Caradori persisted in interviewing Boner even after Boner "told him he had no idea what he (Caradori) was talking about. The allegations never happened."

Delman urged the public to realize the seriousness of sexual and physical abuse of children and not to let the "fabrications" in the Franklin case divert attention from this problem.

The jury made these points in its criticism of state officials and others:

State Sen. Loran Schmit: Schmit, of Bellwood, Neb., is sincerely concerned about children, the grand jury said. However, on several occasions, Schmit has been "politically irresponsible," the grand jury said.

"We are deeply concerned about his statement to the media that there were people who wanted to see Caradori dead," the grand jury said.

John DeCamp: DeCamp, a Lincoln lawyer and lobbyist and former state senator, "issued his memorandum simply for personal political gain and possible revenge for past actions alleged against him," the grand jury said.

The DeCamp memo, originally sent to two newspaper reporters but later widely circulated, named five people that DeCamp said were rumored to be figures in the Franklin investigation.

DeCamp issued a statement Tuesday in which he said that, without his memo, "there would have been no grand jury. Without the grand jury, there would have been no indictments and no forum for clearing up truth from rumor."

DeCamp emphasized that his memo reported specifically on "key personalities" in the Franklin case and noted that "60 percent of those he named in the memo have now been indicted."

The three people indicted or charged with crimes are Baer, indicted Tuesday; King, who was indicted before DeCamp wrote his memo; and entertainment columnist Peter Citron, who is in jail for fondling boys in a case unrelated to Franklin.

Denny Henson: The grand jury said that Henson, a candidate for the Legislature in west Omaha's District 4 and a former Douglas County Republican chairman, "acted irresponsibly in distributing the DeCamp memo" in his legislative district.

Henson responded Tuesday that he had no regrets about mailing the DeCamp memo.

"I believe the public has a right to know," Henson said. "I did not create the memo. I only forwarded the memo on after it was given to the media and they refused to report it."

State Sen. Ernie Chambers: Chambers, who declined to appear before the grand jury and has been a severe critic of the jury's proceedings, has fed the media stories and has made "every effort possible" to disrupt grand jury operations, the grand jury said.

"It would appear that Chambers is far more interested in entertaining his constituents and drawing attention to himself than attaining justice for anyone," the grand jury said.

It added that it is difficult to understand how King could live a lavish lifestyle for many years in Chambers' district without Chambers learning of it, the report said.

"If Chambers did have such knowledge or suspicion of King's misbehavior, he should explain to the public why he was so silent then, and so vocal after it became too late to prevent or inhibit King's wrongdoing," the jury said.'Rumormongers'

In a section headed "the rumormongers," the grand jury said that many people "both spread and received the gossip." The jury specifically referred to the activities of three people:

Michael Casey: He was arrested Monday on a felony bad-check warrant from South South Dakota. Many who know Casey "describe him as a con man," the grand jury said, adding that it believes Casey may have "fueled the fire of rumor and innuendo in Omaha."

"We believe it possible that allegations about Harold Andersen and Boys Town were a product of Casey's personal grudges," the grand jury said.

It said Casey spent "a considerable amount of time" with Caradori, the late legislative committee investigator, and was the reason that Caradori found Alisha Owen.

The grand jury concluded, "Omaha must go forward and try to leave behind the rumors, fear, accusations and lies which Casey helped to spread."

Kirstin Hallberg: The child-care worker, who lives in Washington County, had good intentions but used poor judgment and overreacted, causing "misinformation to be disseminated," the grand jury said.

She was involved in the original reporting of child-abuse allegations to state officials in 1988. The FBI and Omaha Police Department later reported the allegations couldn't be substantiated, but those findings by the law agencies were criticized by some people in the child-care field.

Mrs. Hallberg "apparently is an individual who has difficulty following established guidelines and feels it necessary to become involved at all levels of the system, notwithstanding her lack of training, education and experience," the grand jury said.

Bonnie Cosentino: Active in the formation of Concerned Parents, she spread much "misinformation, rumor and innuendo, as well as false accusations against the prominent individuals named."

"If indeed there was a spawning ground in which Franklin rumors were born, nurtured and grew, Cosentino would be found as an inhabitant."

The first allegations of child abuse in the Franklin case, which surfaced in 1988, involved two girls who once were the adopted daughters of Barbara and Jarrett Webb in Washington County.

The grand jury, noting that Webb wasn't charged with any crime until recently, said some public officials should have acted more promptly or, in some cases, should have acted differently.

Criticism was directed at William Howland, who heads the law enforcement division of the State Attorney General's Office; Carol Stitt, executive director of the State Foster Care Review Board; Patrick Tripp, former Washington County attorney; court-appointed guardian Patricia Flocken; the Washington County sheriff; the Washington County judge involved in the case; and the "social services" department.

In May, Webb was charged with two misdemeanor counts of third-degree sexual assault. The charges, by John E. Samson, who replaced Tripp as Washington County attorney, resulted from an earlier Douglas County grand jury recommendation not made public until now.

The grand jury issued an interim report saying there was reason to charge Webb, and the statute of limitations was about to run out.Critical of Police

The grand jury criticized the Omaha Police Department for not adequately following up its investigation of a third young girl who was involved in the early investigation of child-abuse allegations.

Even though the grand jury criticized the police handling of the case, it said it found no evidence to substantiate the girl's allegations of illegal activities.

Baer . . . Brandeis store heir.

Miss Owen . . . York inmate.

Credit: World-Herald Staff Writers

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