Report Details Falling Out of FBI Agent, U.S. Attorney in Mississippi
By Joe Palazzolo | February 4, 2022 1:17 pm

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.

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  1. [...] The Northeast Mississippi Daily Journal takes a look at the contentious situation. The website Main Justice also gives its read on the [...]

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