Mississippi reporter Patsy Brumfield has added a chapter to the story of indicted FBI agent Hal Neilson, whose clashes with the U.S. Attorney in the state’s Northern District stirred him to request whistleblower status.

Neilson is accused of failing to disclose a personal financial interest in the FBI office building in Oxford. He has said he received an “oral� OK from the bureau to make the investment.

As we noted here, also via Brumfield, the 49-year-old career FBI agent sought protection against retaliation after reporting concerns that the U.S. Attorney’s office had improperly targeted residents of Middle Eastern origins for investigation.

The so-called Convenience Store initiative, in the years after 9/11 attacks, found no terrorist links, but prosecutors charged about 60 people with selling excessive amounts of pseudoephedrine, used to make methamphetamine, an illegal drug.

(Neilson also raised ethics concerns about a book that former Assistant U.S. Attorney Tom Dawson wrote about his prosecution of billionaire Mississippi trial lawyer Richard “Dickie� Scruggs in a judicial bribery scandal. Read our previous report on Dawson’s book here.)

Brumfield’s story, based on documents and Neilson’s e-mail to the Mississippi congressional delegation, provides more details on Neilson’s falling out with former U.S. Attorney Jim Greenlee, a Bush appointee who stepped down last month.

Before we go further, a brief update on the lurching nomination process in the Northern District. Brumfield, in a separate piece, confirms what we were told recently about Oxford-based lawyer Christi McCoy, who has been under consideration since last summer for the U.S. Attorney post to replace Greenlee.

Issues surrounding McCoy’s affiliation with a local private investigator who was under investigation for his billing practices have been resolved. (McCoy and many other Mississippi lawyers used the P.I. in their practices.) The U.S. Attorney’s Office for the Northern District of Alabama, which was handling the case, has dropped its probe, Brumfield reports, potentially giving McCoy’s candidacy a big boost.

Back to Neilson.

In 2005, Neilson, at the time the resident agent in Oxford, learned from his colleagues that Greenlee’s office was using a grand jury to investigate residents targeted in the convenience story initiative. According to Brumsfield, he sounded an alarm. He sent records to his superiors in Jackson, Miss., and told members of Congress that his agents thought the investigations were baseless — and potentially illegal.

He apparently never heard back from the Jackson office, but his concerns made their way to Greenlee.

Brumfield reports:

That is when, Neilson wrote, he began to come under “constant attacks,� and endured attempts to undermine him and his conduct of investigations.

He wrote that he was intentionally excluded from standard investigative matters, even though he managed the FBI’s northern district; that the U.S. attorney’s office went around him in the judicial bribery investigation of then-Oxford attorney Richard “Dickie� Scruggs and others; and that in early 2008 Greenlee asked the FBI director to remove Neilson from his district.

There was another matter that put the men at odds. In 2005, Neilson was leading an investigation into the mismanagement of a beef processing plant, as well as accusations that three Georgia businessmen improperly sought to influence then-Gov. Ronnie Musgrove (D) to gain access to the project.

Neilson, the supervisor of a joint federal-state task force, was removed from the investigation after about a year. His supervisors told him Greenlee had complained about the pace of the investigation, which resulted in the convictions of five people. (Musgrove was never indicted, but the scandal contributed to his defeat in a U.S. Senate race.)

Neilson countered that any delay was attributable to the U.S. Attorney’s office’s attempts to steer the investigation.

U.S. Attorney Jim Greenlee on Wednesday announced he will retire as the top federal prosecutor in the Northern District of Mississippi on Jan. 31, The Associated Press reports. The Bush holdover has been the district’s U.S. Attorney since 2001.

Over the weekend, we reported that Greenlee would be leaving his post soon, as Gina Phillips Kilgore, chief deputy for operations at the U.S. District Court in Oxford, Miss., sent out an e-mail titled “Jim Greenlee Retirement Reception.� A copy of the email was forwarded to The Daily Journal of Mississippi.

President Obama has yet to nominate a replacement for Greenlee. Oxford-based defense lawyer Christi McCoy has been under consideration for the job, but we reported last month that her candidacy stalled over questions about her affiliation with a private investigator under investigation for allegedly padding his bills.

Mississippi lawyers have told us Greenlee wrote a letter to the Justice Department about McCoy’s ties to the private investigator, but Greenlee’s office has declined to say whether such a letter exists. Main Justice submitted a Freedom of Information Act request in November asking for a copy of any letter, if it exists.

McCoy was recommended for the U.S. Attorney post by Mississippi Reps. Bennie Thompson and Travis Childers, both Democrats.

McCoy once worked at the law firm of Joey Langston — who pleaded guilty to conspiring with Scruggs to bribe a judge. She also represented former state auditor Steve Patterson, who pleaded guilty in another Scruggs-related judicial bribery case.

Another possible candidate is Assistant U.S. Attorney Curtis Ivy.

U.S. Attorney Jim Greenlee soon will be leaving his post as the top federal prosecutor in the Northern District of Mississippi, The Daily Journal of Mississippi reports. The Bush holdover has been the district’s U.S. Attorney since 2001.

Greenlee’s departure has been rumored for months, amid various reports that made his Oxford-based office seem something of a soap opera.

The latest: Mississippi journalist Patsy Brumfield reports that an FBI agent who was indicted last week for failing to disclose a personal financial interest in the FBI building in Oxford had sought whistle blower status a couple of years ago after reporting concerns that Greenlee’s office had improperly targeted area Muslims for investigation after the 9/11 attacks.

The so-called Convenience Store Initiative didn’t find any terrorist links, but prosecutors did end up charging some 60 people with selling excessive amounts of pseudoephedrine, used to make methamphetamine, an illegal drug.

The agent, Hal Neilson, also reportedly raised ethics concerns about a book that a former Assistant U.S. Attorney in the district, Tom Dawson, wrote about his prosecution of billionaire Mississippi trial lawyer Richard “Dickie” Scruggs in a judicial bribery scandal, Brumfield wrote. Read our previous report on Dawson’s book here.

Greenlee and the office’s spokesman have declined to comment about his rumored departure.

On Friday, Gina Phillips Kilgore, chief deputy for operations at the U.S. District Court in Oxford, Miss., on Friday sent out an email titled “Jim Greenlee Retirement Reception.” A copy of the email was forwarded to The Daily Journal.

The email indicated the retirement party will take place on Jan. 29 from 2 p.m. to 4 p.m. at the Oxford-University United Methodist All-Purpose Center, The Daily Journal reported.

First Assistant U.S. Attorney Bill Martin reportedly will serve as the office’s interim U.S. Attorney, according to The Daily Journal.

President Obama has yet to nominate a replacement for Greenlee. Oxford-based defense lawyer Christi McCoy has been under consideration for the job. We reported last month that her candidacy stalled over questions about her affiliation with a private investigator under investigation for allegedly padding his bills.

Mississippi lawyers have told us Greenlee wrote a letter to the DOJ about McCoy’s ties to the private investigator, but Greenlee’s office has declined to say whether such a letter exists. Main Justice submitted a Freedom of Information Act request in November asking for a copy of any letter, if it exists.

McCoy was recommended for the U.S. Attorney post by Mississippi Reps. Bennie Thompson and Travis Childers, both Democrats.

McCoy once worked at the law firm of Joey Langston — who pleaded guilty to conspiring with Scruggs to bribe a judge. She also represented former state auditor Steve Patterson, who pleaded guilty in another Scruggs-related judicial bribery case.

For more on McCoy’s candidacy, click here.

Joe Palazzolo contributed to this report.

For the first time in this administration, Senate-confirmed U.S. Attorneys nominated by President Barack Obama outnumber Senate-confirmed U.S. Attorneys nominated by former President George W. Bush.

As of the end of November, more than 10 months into Obama’s presidency, the score was 24 Obama U.S. Attorneys to 21 Bush U.S. Attorneys, according to a review of Justice Department and congressional records. And of the 48 acting and interim U.S. Attorneys, just seven were appointed during the Bush administration.

Stephanie Villafuerte (gov)

The figures represent a watershed for the Obama administration, which has made halting progress filling the nation’s 93 U.S. Attorneys positions amid political resistance and a crowded legislative agenda.

On Monday, the U.S. Attorney nominee for Colorado, Stephanie Villafuerte, pulled her name from consideration, offering a public view of one of several nomination battles unfolding in districts across the country. Villafuerte, the first Obama U.S. Attorney nominee to withdraw, faced questions from Republicans over whether she accessed a restricted federal database for political purposes.

Meanwhile, in Mississippi’s Northern District, Oxford-based criminal defense lawyer Christi McCoy’s candidacy has foundered. People in Mississippi legal circles said Republicans raised questions about her affiliation with a private investigator under investigation for allegedly padding his bills and submitting false claims. (McCoy, like many other defense lawyers in Mississippi, used the P.I. in her practice.)

McCoy was recommended for the U.S. Attorney post by Mississippi Reps. Bennie Thompson and Travis Childers, both Democrats.

Leura Canary (gov)

And in Alabama, Montgomery criminal defense lawyer Joe Van Heest appears to be out of the running for Middle District U.S. Attorney after objections from Sen. Richard Shelby (R-Ala.), one person familiar with the situation said. Van Heest, who was recommended by Rep. Artur Davis (D-Ala.), had been fully vetted by the White House months ago. But the administration never went forward with a nomination.

As a result, a controversial Bush-holder U.S. Attorney, Leura Canary, remains in charge of the Montgomery-based office. Democrats have criticized Canary for prosecuting former Gov. Don Siegelman (D) on public corruption charges. The Justice Department opposes Siegelman’s Supreme Court appeal of his 2006 conviction.

The White House has shown little appetite for these and other feuds, preferring to reservoir political capital for legislative goals such as health-care reform.

Attorney General Eric Holder has said the Obama administration is treading cautiously in nominating U.S. Attorneys, in part because of lingering sensitivities to politicization in the Justice Department. In an October interview with National Public Radio, Holder said he hoped the offices would be filled by the first part of 2010, but that appears unlikely, with fewer than one-third of the U.S. Attorneys confirmed heading into the New Year.

Eric Holder (Photo by Ryan J. Reilly / Main Justice)

One administration official said Holder is frustrated with the pace of the nominations, which thus far has been set by the White House. And several Justice officials are now privately questioning the wisdom of leaving Bush-appointed U.S. Attorneys in place until their successors are confirmed, a tack Obama took to preserve continuity and avoid political pitfalls after the scandal over prosecutor firings.

More than twice as many Senate-confirmed U.S. Attorneys were in place by this time in the first year of the previous two administrations. In the Bush administration, the Senate had confirmed 58 U.S. Attorneys by the end of November 2001, congressional records show. President Bill Clinton, by comparison, had moved 57 U.S. Attorneys through the confirmation process by the end of November 1993.

Nominations, too, have been slow in coming, reinforcing the notion that the top rather than the bottom of the process is knotted. Obama has sent 34 U.S. Attorney nominations to the Senate to date. Bush had nominated more than 60 U.S. Attorneys and Clinton more than 70 U.S. Attorneys by this time in their first terms.

A Justice Department spokeswoman declined to comment on the figures, referring a reporter to Holder’s previous statements on U.S. Attorney nominations.

To read our previous most recent accounting of U.S. Attorney nominees, click here. And to view our interactive U.S. Attorney chart, click here.

Below are lists of Senate-confirmed U.S. Attorneys.

Nominated by Obama:

• Timothy Heaphy (Western District of Virginia)
• Karen Loeffler (District of Alaska)
• Brendan Johnson (District of South Dakota)
• Paul Fishman (District of New Jersey)
• Kenyen Brown (Southern District of Alabama)
• Stephanie Rose (Northern District of Iowa)
• Nick Klinefeldt (Southern District of Iowa)
• Benjamin Wagner (Eastern District of California)
• Ed Tarver (Southern District of Georgia)
• Carmen Ortiz (District of Massachusetts)
• Joyce Vance (Northern District of Alabama)
• B. Todd Jones (District of Minnesota)
• John Kacavas (District of New Hampshire)
• Preet Bharara (Southern District of New York)
• Tristram Coffin (District of Vermont)
• Dennis Burke (District of Arizona)
• Daniel Bogden (District of Nevada)
• Steve Dettelbach (Northern District of Ohio)
• Carter Stewart (Southern District of Ohio)
• Peter Neronha (District of Rhode Island)
• Neil MacBride (Eastern District of Virginia)
• Florence Nakakuni (District of Hawaii)
• Deborah Gilg (District of Nebraska)
• Jenny Durkan (Western District of Washington)

Nominated by Bush:

• Leura Canary (Middle District of Alabama)
• Joseph Russoniello (Northern District of California)
• A. Brian Albritton (Middle District of Florida)
• Leonardo Rapadas (Guam & Northern Mariana Islands)
• Thomas Moss (District of Idaho)
• Patrick Fitzgerald (Northern District of Illinois)
• Jim Letten (Eastern District of Louisiana)
• David Dugas (Middle District of Louisiana)
• Donald Washington (Western District of Louisiana)
• Rod Rosenstein (District of Maryland)
• Jim Greenlee (Northern District of Mississippi)
• William Mercer (District of Montana)
• George E.B. Holding (Eastern District of North Carolina)
• Anna Mills S. Wagner (Middle District of North Carolina)
• Sheldon Sperling (District of Oklahoma)
• William Walter Wilkins III (District of South Carolina)
• James Dedrick (Eastern District of Tennessee)
• Edward Meachan Yardbrough (Middle District of Tennessee)
• Brett Tolman (District of Utah)
• James McDevit (Eastern District of Washington)
• Kelly Rankin (District of Wyoming)

And here’s a list of Obama nominees who have not been confirmed:

• Christopher Crofts (District of Wyoming)
• Thomas Walker (Eastern District of North Carolina)
• James Santelle (Eastern District of Wisconsin)
• Barbara McQuade (Eastern District of Michigan)
• Mary Elizabeth Phillips (Western District of Missouri)
• Sanford Coats (Western District of Oklahoma)
• Michael Cotter (District of Montana)
• Richard Callahan (Eastern District of Missouri)
• Michael Moore (Middle District of Georgia)

The Clarion-Ledger in Mississippi has this story about  federal and local law enforcers investigating convenience store owners, many of Middle Eastern descent, for possible ties to terrorist orgranizations in the years after 9/11.

The unimaginatively named “Convenience Store Initiative” uncovered no terrorist links in Northern Mississippi. But it morphed into a meth task force, apparently.

Federal authorities and agents of the state’s Bureau of Narcotics and Drug Enforcement Administration have arrested more than 65 people for allegedly selling excessive amounts of pseudoephedrine, an ingredient of meth, among other criminal acts. More than 60 people have been charged since 2006, according to the newspaper.

In an investigation worthy of The Simpsons, authorities targeted convenience store owners from "Yemen, India or the like," The Clarion-Ledger reported. But Apu is Hindu! (Getty Images)

U.S. Attorney Jim Greenlee, in Oxford, Miss., told the Clarion-Ledger the government was “looking to see any links to terrorism, but what we found was criminal conduct.”

People involved in the initiative told the Clarion-Ledger that proceeds from the drug sales were diverted overseas and possibly into the coffers of terrorist organizations. But they also acknowledged the money may have gone to relatives.

The newspaper reported that of the more than 100 people listed as under investigation by federal authorities, “nearly every name appears to be Islamic.” The article said most targets were “from the Middle East, Yemen, India or the like.” But it quoted Marshall Fisher, director of the state bureau, denying that authorities targeted any ethnic group.

“We target drug dealers,” Fisher told the paper. “We don’t care if they’re green Martians.”

Greenlee denied people were targeted for their ethnic background.  ”Did we look at it from an improper purpose? No,” he said.

So, how did they collar these drug dealers?

Asked how they determined operators knew they were breaking the law, Fisher replied they relied on undercover officers or informants to talk about purchasing more than a minimum amount — 9 grams over a 30-day period.

“We would target them and go and see if undercover informants could buy,” he said.

The informants and undercover agents tried to make bulk buys of the ingredients for meth in 279 stores. Operators at eight stores agreed to illegal bulk sales, Fisher said.

Maybe it isn’t much of a meth task force, either.

We now have two independent sources telling us that Oxford, Miss., criminal defense lawyer Christi McCoy’s candidacy for Northern District of Mississippi U.S. Attorney appears to have run off the rails. We’re now hearing that Assistant U.S. Attorney Curtis Ivy in Oxford is the leading candidate. We’d earlier reported that Circuit Court Judge Thomas Gardner of Tupelo was in the mix.

Admittedly, we don’t have great insight into this one. McCoy and Ivy didn’t return phone calls, and a spokesman for Rep. Bennie Thompson (D-Miss.), who reportedly recommended McCoy to replace Bush-appointed U.S. Attorney Jim Greenlee, won’t comment. “We have not made any of our recommendations public in order not to prejudice the White House vetting process,” Thompson’s deputy chief of staff, Karis Gutter, told me Tuesday.

Rep. Bennie Thompson (D-Miss.)

After we posted this item back in May saying McCoy had hit a “snag” in the vetting process, Mississippi legal reporter Patsy Brumfield reported June 16 that Thompson had formally recommended McCoy to the White House.

Later, we learned that snag was related to McCoy’s professional connections to two figures in the famous Dickie Scruggs case. Scruggs is the mega-rich trial lawyer and brother-in-law of former Sen. Trent Lott (R-Miss.) who pleaded guilty in connection with two sets of charges alleging he attempted to bribe judges in Mississippi. 

McCoy once worked at the law firm of Joey Langston, who pleaded guilty to conspiring with Scruggs to bribe a judge. McCoy also represented former State Auditor Steve Patterson, who pleaded guilty in another Scruggs-related judge bribery case. I’m not sure why that would necessarily disqualify her – but the White House is very skittish about controversy of any kind in the U.S. Attorney selections. We also heard about something else on McCoy’s application that wasn’t quite in order, but couldn’t confirm the information.

Langston pleaded guilty in 2008 to conspiring to bribe Hinds County Circuit Judge Bobby DeLaughter to rule favorably on a Scruggs case. Langston allegedly dangled the prospect of a federal judgeship for DeLaughter – with help from Lott, who as senator was in a position to help push candidates through. Lott later acknowledged he’d called DeLaughter about the judgeship but said he didn’t actually recommend DeLaughter, who wasn’t nominate