By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
By Eric Nicholson
Morales, in his first year in office, appointed Coggins as a special assistant, retaining him at $200 an hour to represent the state in a lawsuit over treatment of the mentally retarded, as well as several other matters.
While Coggins was hard-wiring himself into Austin, his wife was hooking up with even more ambitious types in Little Rock. At a meeting of the board of Wellesley College, Montoya met fellow trustee Hillary Clinton, wife of the then-Arkansas governor.
The two couples became friends, and in 1992 Coggins co-chaired Clinton's North Texas campaign. "People complained that he [Coggins] hadn't paid his dues, but Paul's not an envelope-stuffer," says Molberg. "Publicity and fundraising were the things he has done for years. Working at the top. He does that very well."
After the inauguration, Coggins and Montoya were rewarded nicely for their trouble. She went to Washington as a White House staff member but resigned her job as assistant to the President for governmental relations after only seven months. There were complaints from unnamed "high-ranking Democrats" about her lack of experience and allies, but she insisted she wanted to return home to be with her husband and her daughter, Jessica, now 10.
Coggins balked at taking a job in the Justice Department, he says, and opted instead for the U.S. attorney post in Dallas.
Four years later, some of the most reasoned criticism of Coggins' performance comes from Charles Blau, a colleague from his old firm who likes Coggins. Blau's chief complaint is that he expected more. "Paul has taken a very conservative approach, with very conservative judgment," he says. "He hasn't shaken things up very much."
Several of Coggins' assistants say he's tinkered with the office's decision-making process, asserting more centralized control. Day-to-day matters such as when a case should be dropped or agreements to reduce sentences of cooperating defendants must now be reviewed by in-house groups or supervisors.
In all, it's not exactly a high-testosterone shop, several of Coggins' lawyers say. "You can pretty much rise or fall to your level of ambition and find a place," says one assistant, adding that Coggins is not a withering, to-the-woodshed sort of boss.
In terms of policy, Washington dictates some of a U.S. attorney's agenda, but he or she has room to set priorities too. Coggins has followed Reno's lead in making health care fraud--schemes to bilk Medicare or Medicaid--a stated priority, and with much stagecraft announced formation of a local task force in 1995.
But Blau, who has a lot of company on this point among defense lawyers in the Dallas-Fort Worth area, says Coggins' task force has been picking off four-employee diet clinics while studies show there are much larger targets to hit. "They're moving at a snail's pace," complains Blau, a former assistant U.S. attorney who ran an anti-money-laundering task force in Miami and served as an associate deputy attorney general in the Reagan years. "I've had some collegial discussions with Paul, and he gives me the statistics, and I tell him, 'The quality of the cases needs to improve.'"
Coggins' most significant health care fraud cases to date have arisen from a Texas Senate and nationwide probe into National Medical Enterprises Inc., which pleaded guilty in Washington three years ago to various fraud charges and paid a record $370 million in fines and restitution. The company changed its name to Tenet Healthcare in 1995.
Over the past two years, six administrators, doctors, or counselors who worked for NME or its subsidiary, now-defunct Psychiatric Institute of Fort Worth, have been convicted in federal courts in Fort Worth of paying or receiving kickbacks for patient referrals, filing false claims with government and private health insurers, and falsifying records.
In the latest of those cases, Dr. Henry Bonham, a Fort Worth psychiatrist, was sentenced last week to seven years in prison and ordered to pay restitution of $3.6 million for a scheme in which he received kickbacks from PIFW, filed false claims, and covered up records. A Colleyville psychiatrist, Dr. Robert Gross, was arrested in London in May and faces extradition proceedings. He went on the lam after he was indicted in Fort Worth on charges of accepting $861,000 in kickbacks for patient referrals from PIFW.
Jim Moriarty, a Houston civil attorney representing 600 former psychiatric patients who are suing doctors and hospitals involved in the scandal, says Coggins is one of the few U.S. attorneys who didn't drop the ball in the matter. "The Northern District was putting these assholes in jail when a lot of prosecutors were sitting on their thumbs," he says. "In some ways, these prosecutions were brilliant...Psychiatrists are going to be talking about Bonham and Gross for a long time."
But he said he was disappointed that the biggest fish in the Northern District's net, NME regional director Peter Alexis, got off with only five years of probation. Alexis, who oversaw NME's Texas hospitals, admitted conspiring to pay a total of $40 million in bribes to doctors and psychologists in exchange for patient referrals.
Coggins says his office requested prison time for Alexis, who was cut a deal for cooperating with prosecutors and the FBI. Alexis could have received a 10-year sentence. Instead, Coggins says, U.S. District Judge Joe Kendall went outside sentencing guidelines when he ordered probation. Alexis was also ordered to pay restitution and required to give up art and antiques, Cartier jewelry, and furs.