Did a Rogue FBI Agent Instigate a Mob Hit?

For many years, John Connolly was the FBI's most effective Mafia investigator in Boston. He has a master's degree in public administration from Harvard. He says his "hero" is Bobby Kennedy and points to his family's devotion to public service (his brother is a retired DEA agent, and his sister became a teacher). But when he met last week with a NEWSWEEK REPORTER at the Turner Guilford Knight Correctional Center in Miami, he was wearing shackles around his ankles. Once dashing and athletic, the 68-year-old Connolly was stooped and pot-bellied in his bright-red prison jumpsuit. His skin was paper-thin and white from lack of sunlight. For the past three and a half years, he has lived in a tiny, 10- by 12-foot cinder-block cell; his food is slipped to him through a slot in the heavy metal door. He is kept in solitary confinement for his own protection: a few years ago, Connolly says, another former FBI agent was badly beaten by inmates in the same jail.

Speaking with the reporter in a holding room, Connolly was grandfatherly, intelligent, emotional. "Believe me, I am innocent!" he declared, pumping his fist in the air. "I'm a Catholic. I say the rosary every day and pray for my innocence. I pray to Saint Jude, the saint of hopeless causes, and to Saint Rita, the saint of the impossible." His cause is not entirely hopeless: last week the judge postponed his sentencing for murder in the second degree to next month to consider the defense's argument that the statute of limitations had elapsed. But there is still a chance that Connolly will never emerge from prison to see his wife and three kids.

If Connolly's story sounds like the stuff of movies, that's because it is. In Martin Scorsese's Oscar-winning film "The Departed," Matt Damon plays the role of a cop who works as a mole for the mob; the Damon character is widely believed to be based on Connolly. Jack Nicholson plays a role loosely based on the life of James (Whitey) Bulger, an Irish mob kingpin from South Boston who secretly cooperated with the FBI against his rivals in the Italian Mafia. The subtext—in fiction as well as in real life—is the sometimes fine line between power for good and for evil.

In 2002 Connolly was convicted and sentenced to 10 years in prison on racketeering and obstruction-of-justice charges stemming from allegations that in 1995 he had tipped off Bulger and one of his henchmen, Stephen Flemmi (nicknamed "the Rifleman" for his expert marksmanship in the Korean War), right before they were indicted for racketeering. Bulger vanished. (He was last reliably spotted at London's Piccadilly Circus in 2002.) Flemmi dallied and was caught. In return for avoiding a death sentence for separate murder charges, Flemmi ultimately began cooperating with the government.

According to the Feds, Connolly not only helped Bulger escape but was also a spider in a tangled web of gangland slayings. In 2005 he was charged with three murder counts in connection with the death of John B. Callahan, a Boston jai alai executive who liked to drink and hang around with mobsters. In 1982 Callahan's rotting, bullet ridden body was found stuffed in the trunk of his Cadillac at Miami International Airport. A dime was found on the body—a message, some speculated, to those who would think of "dropping a dime," street parlance for cooperating with the Feds. The government charged that Connolly had let Bulger and his crew know that the FBI wanted to question Callahan about the slaying of another jai alai executive, Roger Wheeler, who had been snuffed by a member of Bulger's Winter Hill Gang. At Connolly's trial this fall, the prosecutor argued that Connolly should have known that Callahan would be killed because something similar had happened at least twice before. The Feds assert that in 1976, after Connolly allegedly leaked to Bulger that the nightclub owner and bookie Richard Castucci was an informant for the FBI, Castucci was shot to death. In another case, Edward (Brian) Halloran and an uninvolved friend were slain, execution style, while standing outside a bar on Boston's waterfront in 1982—allegedly because Connolly had told Bulger that Halloran was cooperating with the Feds.

The star witnesses testifying against Connolly in his murder trial were Flemmi and John Martorano, a mob assassin known as the Basin Street Butcher who has admitted to killing 20 people. He is out of prison after serving a 12-year sentence, shortened because he agreed to testify for the government. In his jailhouse interview with NEWSWEEK, Connolly claimed that Martorano and other mobsters turned government witnesses were lying: "They're trying to save their own skin. They're like trained seals … Martorano never met me, never spoke to me … Everything he says is hearsay." (Flemmi claimed he was at a meeting—attended by Connolly—at which Bulger announced that Martorano would "take care of" Callahan, the jai alai exec.) The government presented evidence alleging that Connolly had received bribes totaling $235,000 from Bulger's gang—enough, prosecutors say, to buy a boat that cost almost as much as Connolly's annual FBI salary. (Assistant State Attorney Michael Von Zampf told NEWSWEEK THAT Connolly was so close to Bulger that he vacationed with him in Mexico.) Connolly's lawyer, Manuel Casabielle, says the idea that his client took bribes is "absolutely, categorically untrue." He adds that the defense was able to document in court that all of Connolly's assets were purchased with legitimate earnings.

In his conversation with NEWSWEEK, Connolly protested that government investigators have to get close to their high-level informants, who are typically bad people, because that is the only way to penetrate secret criminal organizations or terrorist cells. While the government portrays him as a single rogue agent, Connolly describes himself as a "scapegoat." Even Von Zampf admits the FBI's Boston office was permeated by corruption; he says he believes other agents knew Connolly was taking money from Bulger but didn't act. A former FBI agent testifying for the defense admitted that Connolly delivered Christmas gifts from mobsters to him—a black leather briefcase, an expensive figurine, a bottle of cognac. Connolly's FBI supervisor has admitted receiving $7,000, some of which was delivered in a case of wine from the mob via Connolly. (The supervisor, John Morris, was granted immunity from prosecution in exchange for testifying.) It is commonplace and necessary for federal agents to use criminal informants to crack criminal conspiracies. But "you don't have informants at the top of the food chain," says Rick Fraelick, a retired Massachusetts State Police major, who attended part of the trial because he said Connolly compromised his own probes of Bulger's gang. "The whole point of an informant is to get to the top of the food chain." Maybe so, but as "The Departed" portrayed, life in ethnic melting pots like South Boston can be complicated.

Connolly grew up in the same grim housing project in "Southie" as Bulger did. As they rise out of poverty, proud and ambitious men can make different choices. Whitey Bulger's brother Billy became president of the Massachusetts state Senate and the University of Massachusetts. Connolly recruited Whitey on a beach in Quincy in 1975. At the time, Bulger was afraid he had been targeted by the Mafia and wanted some cover. In addition to a lot of useful tips about the Italian mob, Connolly seems to have gotten a charge from hanging around a colorful and smart (if wicked) character like Bulger. But the game turned ugly. Connolly said that the Feds made a deal with Bulger to turn a blind eye to his gambling and loan-sharking—but betrayed him by bringing racketeering charges in 1995. By then, Connolly says, he feared Bulger would come after his family. Connolly says he never crossed the line in helping Bulger. But in Boston's byzantine world of cops and mobsters, where morals are murky and tribal loyalties are strong, lines separating good from evil can be blurry indeed.