WHEELER DEALER

How Minnesota Cops And The War On Drugs Made A Successful Entrepreneur Out
Of A Small-Time Hustler And Snitch Named Michael Felix

Danny Johnson's neighborhood used to be quiet. Made up of modest
working-class houses and mature trees, it was located right in the heart of
Detroit Lakes, about 45 miles east of Fargo. Johnson, a janitor at the
county courthouse three blocks away, and his wife Patty, who also worked
for Becker County, could run home for lunch. The house was kitty-corner
from an elementary school.

One day in the summer of 2000, Johnson came home to discover Police Chief
Kal Keena nosing around the vacant house across the alley from his. Keena
would later deny saying it, but Johnson swears the chief told him he was
looking for a place for his daughter to rent.

In any case, Keena's daughter never materialized. Instead, a man named
Michael Felix moved in with his wife and three kids. Fiftyish and short,
Felix stood out in the town of 7,500. He was missing many of his front
teeth, had a pointy little beard, tattoos on his neck, and growths on his
face. Neighbors say he looked a bit like a troll.

It wasn't long before trouble started. When he came home for lunch now,
Johnson would later testify in court, he'd watch a long line of cars pull
up at the Felix household, or sometimes around the corner in front of
Johnson's house. The cars would hover for a few minutes and then leave.
During the hour he'd spend at home, Johnson would count 10, 12, sometimes
15 cars, often carrying several teens. Sometimes the people would go into
the house, while other times Felix would come out, stick his head in the
car window, and then go back inside.

Suspecting Felix was selling drugs, and scared for his own teenaged son,
Johnson testified that he and his wife placed the first of at least 150
calls to the police. Occasionally the police would come out, but they never
did anything but ask questions, Johnson says. "They'd say, 'Yeah, yeah,
we'll think about it,'" he complained later. "'We'll call 'em and check on
'em.'" After a while, they would just ask the Johnsons to take down license
plate numbers.

Adding to their troubles, the Johnsons and other neighbors testified, the
times the police did come out were enough to make the new neighbor angry,
but not enough to stop him from threatening people he suspected of ratting
him out. According to court documents, Felix and his oldest son threatened
the adults in the families of Danny Johnson and a neighbor, Jeff Johnson
(no relation), as well as Danny Johnson's teenage son.

"You were scared to go out of your driveway," Danny Johnson would later
testify. "My wife was threatened by Mr. Felix and a son that was there at
the time when I wasn't home, swore at her and whatever. I mean, it was a
scary place. And we had to come out of that driveway every single day,
every time we left our house."

Other neighbors were frantically dialing 911 too. Jo and Jeff Johnson's
backyard backed up to Felix's. Jeff Johnson testified that he smelled
marijuana coming from the new neighbor's place. He was forced to stop his
kids, ages two and six, from using the side of the yard that abutted
Felix's because he kept finding glass, eating utensils, and garbage thrown
over the fence.

Eventually, Danny Johnson started calling a sheriff's deputy by the name of
Patrick Johnson (again, no relation). Both men had worked in the courthouse
for a while, and Danny Johnson knew that the deputy was a narcotics
investigator. For a while, he didn't get anywhere complaining to the
deputy, either. But then, in April 2001, according to both men's testimony,
the deputy told Johnson a secret: Felix was an informant buying drugs for a
big undercover operation the deputy had set up. The constant parade of cars
was people selling methamphetamine to Felix, who was being paid a fee to
buy it.

Far from being relieved, Johnson was enraged. Over the previous nine
months, the sting had turned his neighborhood into a slum. "What if a deal
had gone bad?" he rages. "What if someone found out he was an informant and
got angry? Those kids are out there on the playground [across the street]
every day. What if something went bad? What if some grade-schooler got shot?"

Two months later, Michael Felix moved out. According to testimony, he left
several months' rent unpaid. The house itself was uninhabitable. The floors
needed replacing and the walls were pocked with holes. Closet doors had
been torn down and nailed to walls on the first floor to keep the family's
animals downstairs. There was dog and cat shit everywhere. A contractor who
came from Fargo estimated it would cost $34,000 to make the house livable.
The landlord didn't have it, so he and his brother gutted the house and
fixed it up themselves.

The damage to the neighborhood proved impossible to fix. Jeff Johnson's
family moved out a while back, and one by one, the other neighbors up and
down Willow Street and Summit Avenue have sold, too. Danny and Patricia
Johnson are moving in the spring. "I don't want anything to do with this
city now," he complains.

Meanwhile, more than 35 people were facing criminal charges. And because
Felix had done business across the street from a school, some could go to
prison for eight years or more on charges of selling a quantity of drugs
that probably would earn them probation in the Twin Cities.

As police began to arrest the people Felix claimed had sold him drugs, it
started to look like the wreckage the snitch had left on Willow Street was
the smallest of the messes he made during his year in Detroit Lakes. A
parade of witnesses would come forth to testify that it was Michael Felix
who had been doing the drug dealing.

He'd sold marijuana and meth, the witnesses said, often to local teens.
He'd smoked pot with the kids, and let them do odd jobs in exchange for
drugs. Two of the witnesses said he had used a gun to threaten people who
owed him money or drugs. And it was hard not to conclude that he'd done it
all with police protection.

When Michael Felix first turned up, it must have seemed like Patrick
Johnson's lucky day. A Becker County sheriff's deputy working for the West
Central Minnesota Drug Task Force, Johnson had the job of reducing the
level of drug-dealing in the area, a task he believed would be a whole lot
easier if he had a paid informant. Johnson had been a narcotics
investigator for 14 years and had worked with his share of informants--but
never on a large-scale or long-term operation.

In August 2000, a friend of Kal Keena's from the Morrison County Sheriff's
Department in Little Falls placed a call to the Detroit Lakes police chief.
The department was on the verge of wrapping up a year-long sting operation,
he told Keena. He needed to arrest some 25 people, and wanted to get their
informant out of town.

Informants have long been a controversial staple in law enforcement's
arsenal of tactics, especially when it comes to drug enforcement. Usually
the snitches are facing their own criminal charges and readily agree to
help police nab the next guy up the supply chain, or offer information
about other crimes. Police and prosecutors tend to view them as a necessary
evil, and are taught to corroborate their claims with other evidence.

Felix was different. He'd been convicted of burglary in 1981 in Oregon, and
on drug charges in Rice County in 1988, after which he'd done 34 months in
prison. Ever since his release he'd made his living buying drugs for cops,
and drawing Social Security disability payments because of a back injury.
In the 12 years before he was introduced to Johnson and Keena, he had
worked as a paid informant for 25 different law enforcement agencies
throughout Minnesota, Iowa, and Wisconsin. He stuck out in the small towns
where he worked, so police kept moving him from one community to another.

Keena called Patrick Johnson, and the two met with Felix and with a couple
of his Morrison County handlers. Keena's friend insisted that Felix had
been reliable, so the chief and the deputy started looking for a place for
Felix to live. After he found the house on Willow, Keena called the
landlord and said he knew someone who was moving to town. The chief had a
soft spot for the man because he was a disabled vet, the landlord's brother
remembers Keena saying. He met with Felix and despite misgivings agreed to
rent him the three-bedroom house for $500 a month.

Keena would later insist that the informant ended up in the house because
it was the only property available in Detroit Lakes that was both
affordable and big enough to house a family of five. No one gave any
thought, he would insist, to the fact that it was next door to a school.
Never mind that any drug crimes committed there would carry extra penalties.

Deputy Johnson paid for Felix to move from Little Falls and paid his first
month's rent. Together, the men talked about how to record Felix's
transactions. They placed a camera on a bookcase that afforded a view of
the front door and living room. The camera was hooked to a VCR that Felix
would need to turn on before each transaction.

When someone came over to sell him drugs, Felix was to record the
transaction, show the person out, and, without leaving the camera's view,
put the drugs he'd bought into a lockbox and lock it with a padlock. He'd
hold the lockbox up, state the date and time and the name of the person who
had sold him the drugs. Then he was to meet Johnson behind a health club.
Using his key, Johnson would take the drugs out of the lockbox, take the
videotape of the transaction, and pay Felix. Supposedly Felix had done this
more than 400 times in the past, so things were expected to go smoothly.

Felix took a job as a carny for a brief time as a way of meeting a few
people, and was quickly very busy. He earned $50 for each marijuana buy,
and $100 for meth. In addition, each time the two met, Johnson would give
Felix $300 in unmarked "buy money." Over the nine months the operation
lasted, Felix was paid more than $17,000 for making buys. Assuming that
money rewarded 170 transactions, he would have received more than $51,000
in buy money as well.

On November 21, Felix paged Johnson and drove to the health club. There,
court documents say Felix claimed, he told Johnson he had just bought an
"eight ball of crank" from a man named Trent Lederhaus, and handed over the
lockbox. Johnson sent the baggie inside to the state Bureau of Criminal
Apprehension, which determined that the contents weighed 1.9 grams and
contained methamphetamine.

The lab did not check to see how much of the eight ball was meth and how
much was cutting agent. The record does not explain why not, but for
Johnson's purposes it can't have mattered: Under Minnesota law, the sale of
any quantity of methamphetamine in a school zone is a felony.

The videotape was terrible. Felix hadn't started the VCR right away, and
the TV was so loud that Felix's and Lederhaus's conversation wasn't
audible. Worse, Felix's back was facing the camera, and no hand-to-hand
transaction was visible. After Lederhaus left, documents filed in his case
say, Felix held up a baggie and explained to the camera that he'd just
bought crank.

Felix would tape Lederhaus four more times during the next three weeks, and
each time, he would produce a tape that showed little, according to
Lederhaus's appeal. Felix's back often blocked the camera and the
conversation was always drowned out by background noise. Sometimes Felix
could be seen digging in his own pockets. As far as the drugs turned over
to Johnson after each "buy," only one more of the baggies actually
contained any meth; the other three contained only cutting agents.

The following June, Lederhaus was charged with three second-degree
felonies. The offenses normally would be punishable by up to 68 months in
prison, but because the transactions had taken place in a school zone,
Lederhaus faced 10 additional months.

Thirty-five other people faced similar charges as a result of Felix's
activities. In each instance, the tapes were just as bad. In fact, Johnson
would testify later that he repeatedly told Felix the tapes weren't up to
snuff, and that the two adjusted the camera. Somehow, though, the tapes
never got better.

When he went to trial in November 2001, Trent Lederhaus offered a ready
defense: The murky tapes actually showed Felix doing a brisk business
selling marijuana and other drugs. Lederhaus insisted at his trial that he
had been buying marijuana from Felix for months before the videotaped
meetings. Sometimes the two hung out, smoking and drinking beer. Most often
he'd buy the pot outside Felix's house, Lederhaus said, but sometimes he'd
come inside.

In fact, Lederhaus's wife would later testify that she had caught them
smoking together a couple of times. She also claimed that Felix once asked
her husband to hold a shopping bag containing a number of smaller baggies
of marijuana. She and Lederhaus argued bitterly over his marijuana use;
long before he was arrested, she had grown so angry she started divorce
proceedings.

Plenty of other people testified that they watched Felix smoke pot and saw
him sell marijuana and meth. In addition to the defendants fingered by the
informant, half a dozen adults eventually testified to having witnessed
these transactions, as well as Felix's personal drug use.

In addition, three teenagers, ages 14 to 16, came forward to testify that
they'd used Felix's drugs in his house and had gotten marijuana from Felix,
sometimes for doing odd jobs around the house. The teens and their friends
would sometimes smoke marijuana at the house and watched Felix smoke it and
sell it to others. One of the teens says he once watched Felix threaten
another teen with a gun.

Felix's neighbors testified that they'd repeatedly reported the constant
parade of kids to Deputy Johnson and to 911. "It didn't concern me because
it confirmed what I believed to be happening down there and that was that
an informant was purchasing drugs for the police," Keena would later
testify. "The descriptions that I received of the activity that these
neighbors were observing was consistent with what I knew was going on there."

But by spring, Keena had become very concerned that Felix was in fact
selling drugs. "The number of complaints became more frequent," he
testified. "The behavior described became more specific. And the behavior,
if it was described accurately, was a violation of our city
ordinances...complaints that he had too many dogs. Complaints that he
played his stereo too loud. There was a complaint that either he [drove] or
he was allowing his children to drive a four-wheeler on the city sidewalks.
There were complaints that he was using marijuana...outside the house."

Keena asked Johnson whether he had lost control of the snitch, but Johnson
assured him everything was fine. The deputy failed to add that, although he
might see Felix on a steady basis when the two met to swap videos and buy
money, he rarely visited the Willow Street house. Once, he told Felix he
was going to search the house. But when the informant didn't protest, he
dropped the plan.

He never asked Felix to take a drug test, never considered taping the phone
calls in which Felix supposedly arranged to buy drugs. He never asked Felix
to wear a wire, never marked the money he gave Felix for drug buys. And he
never conducted surveillance on the house. Felix's landlord's brother
testified that the informant and the house both reeked of pot, but even
though Johnson saw the snitch frequently over the course of almost a year,
he never smelled a thing, he would later admit in court. When the cases
went to court, Johnson would explain that he trusted Felix.

Tom Ploof is chief deputy of the Morrison County Sheriff's Department and
one of the people who vouched for Felix when it was time to end his Little
Falls sting. "We got pretty good recommendations for him and when we used
him we didn't have any problems," he says. "Of course, any informant is
only as good as your controls on him. And that's what the cops are there
for, to do the quality control."

In 1988, a New York City police officer named Edward Byrne was killed
during a drug raid. Byrne's parents took his badge to Washington and, in a
highly publicized display, presented it to Ronald Reagan. Conveniently,
Reagan was in the process of declaring war on drugs, and the Byrnes begged
him to avenge their son. The result: the U.S. Department of Justice's
Edward Byrne Memorial Fund, which last year doled out hundreds of millions
to bureaucracies involved in fighting drugs and violent crime.

Although the grants can be applied in some 29 anti-crime "purpose areas,"
by far the largest single kind of expenditure, accounting for 40 percent of
the dollars spent, is funding for regional drug task forces. The Justice
Department gives the money to states, which kick in a 25 percent match and
redistribute the money.

According to documents obtained from the state Department of Public Safety
under Minnesota's Data Practices Act, Deputy Johnson's sting was paid for
by a Byrne grant. "In our task force area, at least 80 percent of all drug
crime is solved through confidential informants," the task force's 2002
grant paperwork states. "With the development and use of confidential
informants, we are able to conduct controlled buys and undercover agent
introductions for the purchase of narcotics. This method is highly
effective and these informants are crucial to our task for operations."

The paperwork filed by the task force goes on to estimate that Felix,
described as "a mercenary informant," would be far more effective than he
in fact was. "At this reporting, approximately 72 individuals have sold, on
numerous occasions, quantities of methamphetamine, cocaine, marijuana, and
other illicit drugs," the documents state. "A majority of these 72
defendants will be charged with mandatory minimum 86-month commitments to
prison. Some of these defendants are second- and third-time offenders. This
total operation has cost the WCM Task Force and the City of Detroit Lakes
$62,780."

Regardless of the final number of cases made by the sting, it's clear the
drug agents were pleased. "Even though this sting operation put the West
Central Minnesota Task Force in the red, we feel that it was needed to gain
back the streets of Detroit Lakes and the county of Becker," the documents
conclude. "WCM would also like to have another mercenary informant, such as
we had in Detroit Lakes, to be utilized in another portion of our
nine-county area in 2002." The task force's activities fit tidily into
several of Byrne's "purpose areas," including "drug-free school zone
enforcement."

The money kept flowing. In 2003, the task force asked for and received
$113,671 in Byrne grant funds and $37,891 in matching state funds. The
agency's final progress reports have yet to be turned in, but according to
its 2003 application, almost $40,000 of the money was earmarked as
"confidential funds" that were to be used to pay for drugs and other
evidence and for informants.

The gravy train may be coming to an end, though, because Byrne has
increasingly become the subject of critical scrutiny. Rural anti-drug task
forces operating with Byrne grants and little oversight have sparked a
number of scandals across the country in recent years. To date, the most
visible of those scandals centered on a drug sting that took place in
Tulia, Texas, in the late '90s.

Based solely on the uncorroborated testimony of a police officer working as
a private informant for the Byrne-funded Panhandle Narcotics Task Force, 46
people were arrested. Forty of them were black (representing 15 percent of
Tulia's black population), and the remainder Latino or involved in
interracial relationships. After the first seven defendants tried received
lengthy prison sentences--one of 99 years--14 more defendants quickly
pleaded guilty and were sentenced to prison. Still others were sentenced to
probation.

The prosecutions unraveled after two of the defendants were able to prove
conclusively that they were at work or outside the state at the time the
informant said they were selling drugs. After a state judge ordered new
trials for 35 of the defendants, Texas Gov. Rick Perry simply pardoned
them. The informant, meanwhile, was charged with perjury last April. The
prosecutor in the cases is under investigation for possible misconduct.

After the Tulia scandal, the Texas ACLU studied Byrne funding in that state
and found scandals involving 17 regional drug task forces underwritten by
the grants. "The fundamental problem is that you have these task forces out
there operating with little or no supervision and absolutely no state or
federal accountability," Texas ACLU President Will Harrell told the Dallas
Observer. "No one is accepting responsibility, and the task forces have one
motive and one motive only: to produce numbers lest they lose their funding
for the next year. But no one questions how they go about their business."

In response to the scandals and the governor's pardons, the Texas
legislature recently passed a law saying no one can be convicted based on
the word of an informant without strong corroborating evidence. Similar
laws have long been in place in many states regarding the testimony of
co-conspirators, and police are routinely trained to collect corroborating
evidence.

The grants haven't been a problem just for Texas, either. Task forces in
Missouri, Kentucky, Alabama, and Virginia have faced allegations of
corruption. Many of the operations being scrutinized involved informants
located in school zones, public housing projects, or other drug-free zones;
paid informants allowed to operate with little or no supervision; drugs
provided to minors. Congress's investigative arm, the General Accounting
Office, has criticized the program for failing to monitor grant recipients
adequately.

"Really the Byrne grant incentives just perpetuate the arrests of
small-time, nonviolent drug offenders as opposed to really reducing drug
use and the costs associated with drug use," says Bill Piper, associate
director of national affairs for the Washington, D.C.-based Drug Policy
Alliance. "The feds are passing this anti-drug money out like candy and
they are not monitoring what local and state agencies are doing with it.
There's little accountability over these regional task forces because they
exist in kind of a gray area between the local, state, and federal
governments. No one is really watching what they are doing."

The lack of accountability is especially dangerous, he continues, because
the grants give police an incentive to make as many arrests as possible,
whether or not the arrests will help make the community safer. "The more
these task forces fail, the more they get money," he says. "And by fail, I
mean that the problem is that to get money they have to go out and make all
sorts of arrests. The more arrests they make, the more money they can get
in the future. We've been arresting more and more people for 30 years now
in the war on drugs and clearly it's not working. Is drug use going down in
their district? I doubt it. The Byrne grant just rewards those failed
policies."

Ironically, Byrne's biggest enemies may turn out to be the very forces that
backed the war on drugs. The right-wing Heritage Foundation has joined the
chorus now lambasting the grants as ineffective, wasteful, and too focused
on small-time drug sales instead of stemming the flow of drugs into
communities. The money would be better used, according to the conservative
think-tank and its allies in Washington, to fight terrorism.

Accordingly, the Bush administration plans to ask Congress for $600 million
in Byrne money next year. That's one fourth as much money as the program
received this year. In addition, it may be merged with another program that
provides grants to local law enforcement.

In Minnesota, support for the task forces has softened, too. After funding
for the state's gang strike force was nearly eliminated during the last
legislative session, officials began discussing consolidating the gang- and
drug-fighting agencies.

Patrick Johnson is quick to say that he thinks this would be a mistake.
Without the money, he says, operations like his would be finished. As it
is, he says, "We don't have as many informants as we'd like, because we
don't have the money to pay these people what they deserve."

Despite the long line of witnesses ready to testify, the jury that
convicted Trent Lederhaus never heard the bulk of the evidence his attorney
planned to present. Felix served 34 months in prison following a 1988
felony drug conviction from Rice County, as well as a 1981 burglary
conviction in Oregon. But Lederhaus's attorney couldn't use this
information to discredit him because his convictions were more than 10
years old.

Much more damning, however, the bulk of the evidence Lederhaus had that
alleged Felix was selling drugs was never aired. After presenting its case
against Lederhaus, the prosecution asked the judge to "prohibit the
introduction of evidence that would tend to show that Michael Felix was
either selling, distributing, or using drugs" any time other than during
the sales Lederhaus was charged with making.

Lederhaus's attorney protested that Felix's activities were relevant, but
didn't offer any explanation why, according to Lederhaus's appeal. The
court barred the evidence, and Lederhaus was convicted of all three
offenses and sentenced to six and a half years in prison. He appealed to
the state Court of Appeals, arguing that he had been denied his right to
present a defense. The judges didn't address his claim, however, concluding
that he gave up his right to argue the point because his attorney didn't
raise it at trial.

Lederhaus was the first of the people arrested in the sting to go to trial.
After he was convicted, attorneys representing 20 others jointly requested
a court hearing to determine whether the charges against their clients
should be dismissed because their right to due process had been violated.
The attorneys argued that law enforcement had acted outrageously by setting
the operation up in a school zone, by failing to monitor Felix's
transactions adequately, and by allowing "the informant's criminal behavior
to escalate to outrageous proportions." The judge denied the motion.

Jefferson Roussopoulos was the next defendant to go to trial. Like
Lederhaus, he claimed in his defense case to have bought marijuana from
Felix on a regular basis, and to have smoked it with him. He also testified
that he watched Felix sell it to others. He was convicted of four felonies
and sentenced to a total of 98 months in prison. Roussopoulos appealed his
conviction; a decision is expected sometime in the next month.

Two more people caught up in the same sting were convicted shortly
thereafter. Most of the rest of the defendants who'd asked for the due
process hearing were quickly convinced to accept plea bargains. One
defendant, Richard Variano, won an acquittal when the prosecution created
an opening for the defense to present its evidence about Felix. Another
received a continuance for dismissal, a legal maneuver in which charges are
essentially dropped.

In the later trials, Becker County had Felix brought back to Detroit Lakes
from Missouri, where he was said to be working as both an informant and a
carpenter. (City Pages was unable to locate Felix for this story.) One case
had to be dismissed when the informant didn't show up.

Last September, Lederhaus's appeals attorney, Davi Axelson, asked the Court
of Appeals to reconsider his case. Lederhaus's first attorney was wrong not
to argue in favor of letting the evidence about Felix in at trial, he
argued. If the jury had heard the testimony he, too, would have been
acquitted. He also argued that Lederhaus should not have been sentenced to
additional time in prison because the alleged transactions had taken place
in a school zone.

Lederhaus may have better luck this time: In October, the appeals court
overturned the conviction of another man fingered by Felix, Thomas Royal
Renny. Renny had been convicted of selling marijuana based solely on
Felix's word, which the judges found insufficient.

Informants often have incentives to lie, the judges in that case noted:
"Other jurisdictions have adopted the rule that the testimony of an
informant, like that of an accomplice, must be corroborated, and cannot
sustain a conviction on its own. This argument is not without merit...The
informant's success depends on the defendant's failure--arrests and
convictions must occur for an informant to receive the benefits with which
law enforcement rewards 'good snitches.'"

"It is overall a bad policy to rely upon informants to make your case,
primarily because they get paid to send people to jail," says the Drug
Policy Allliance's Bill Piper. "And so they have an incentive to
manufacture evidence, which is what we're seeing around the country. It's
endemic to the drug war. We've become a nation of informants, actually." If
the federal government does keep the Byrne grants, Piper's organization
would like to see the law rewritten to require that states receiving the
grants demand corroboration of all evidence obtained from informants.

As for Deputy Pat Johnson, he's anxious to learn whether he'll still have
the money to run informants next year. "You can get involved too much, turn
a blind eye or close an eye because you want an operation to be
successful," he admits. But if you're careful, a good snitch can work out
well, he adds. "They're all pieces of shit, but they're needed in this
business."