By J. Todd Foster
of The Oregonian staff

One of Multnomah County's most tenacious prosecutors was forced to resign late Monday after police, who spotted his name in an alleged drug dealer's address book, found marijuana and cocaine in his home.

The resignation of David "Dave" B. Peters, 40, of Northeast Portland left his colleagues stunned, saddened and disappointed.

Peters is best known for prosecuting Alberto Gonzalez, the first American convicted of attempted murder for having unprotected sex while knowing he had the AIDS virus.

District Attorney Michael Schrunk notified his staff of Peters' departure Tuesday, calling it a "bleak day." He said Peters' fall from grace is further proof that illegal drugs can seduce even the best and brightest.

"Drugs are insidious," said Schrunk, who hired Peters 10 years ago this month. "We tend to look at derelicts sleeping in the park, but over 70 percent of people who use drugs work somewhere."

Schrunk swore in a special prosecutor Tuesday to investigate Peters' drug use and possibly pursue criminal charges.

Sources said Peters' first name and his office telephone number were listed in a little black book owned by Michael Francis Hipps.

In July, a grand jury indicted Hipps, 47, of Southwest Portland on five counts of possessing and delivering drugs. A management consultant with a master's degree in business administration, Hipps and Adam Wylie, 32, are accused of running a cocaine ring that catered to the affluent.

Officer John Cordell of the Portland Police Bureau's drug and vice squad said as many as 100 people listed in multiple address books remain under investigation. They include doctors, Cordell said, and members of the exclusive Multnomah Athletic Club.

Cordell said his office is being deluged with anonymous letters and telephone calls from people who fear, innocently or not, that they are listed in the book. Although the tips are helpful, Cordell said they also are slowing the investigation.

Peters' home is the only so far to be searched, he said.

Being listed in an address book is not prima facie evidence of a crime or grounds for a search warrant, Cordell said. But he said investigators had other evidence against Peters, although he wouldn't disclose what.

"It's fair to say that Michael Hipps and Adam Wylie were businessmen, and they documented their business dealings better than most," Cordell said, noting that police have handwritten records and telephone answering-machine tapes.

Friday night, 10 to 12 officers searched Peters' home, not far from Grant Park.

Because some of the officers had worked with Peters on prior cases, Cordell said the search was awkward.

Investigators found cocaine residue inside a straw, small amounts of marijuana and drug paraphernalia, including a bong and other marijuana-smoking pipes.

If the amount of drugs is minuscule it could result in only a violation worthy of a citation and a fine.

While refusing to comment on specific facts of his case, Peters shunned one of the first pieces of advice lawyers usually give clients - never talk to the media.

"I think confronting it and talking about it directly is always the best approach," he said. "Unfortunately, I can't change what's happened. I'm taking responsibility, I'm not blaming anyone else, and I'm not saying, 'It was a conspiracy, it's bad police, why don't they find a real criminal.'

"My goal is do things that will make people I care about proud of me."

Peters has not been charged with a crime. That decision is up to special prosecutor John Bennett, a private Portland attorney for 14 years and Schrunk's chief deputy in the early 1980s.

Schrunk said he wanted to avoid any appearance of a conflict of interest and noted that Bennett and Peters never had worked together. "I'll make sure the right thing does happen," Schrunk said.

Jeff Sapiro, disciplinary counsel for the Oregon State Bar, said he probably would begin investigating Peters immediately, regardless of whether he is charged.

"Lawyers occasionally engage in conduct that is short of criminal conduct but still may have implications to their bar licenses," Sapiro said. "Drug use at least raises a question of whether the lawyer is fit to practice law."

Last year, 110 attorneys out of the estimated 10,000 practicing in Oregon received some form of discipline or admonishment for a variety of offenses, he said. Four were disbarred; 11 resigned during proceedings to disbar them.

The bar has a substance-abuse program to help addicted lawyers, Sapiro said.

Several judges, prosecutors and a defense attorney who know Peters said they never saw evidence of a problem.

"He was a prosecutor all the way through, a hard charger," said Bob Leineweber, deputy district attorney. "Dave's always been abundantly diligent and aggressive, smart and articulate. It just shows you the power of the drug, how it can reach into all segments of society and alter the judgment of the best of us."

Peters' boss, Stacy Heyworth, a senior deputy district attorney, said Peters was in love with his job and that his passion, courtroom persuasiveness and work ethic were models for the office. She remembers Peters, who often worked 60- and 80-hour weeks, kidding other prosecutors just for taking sick leave.

"They don't come much better than Dave," Heyworth said. "I think everyone would be uniform in assessing him as one of the best trial attorneys in the office."

Peters prosecuted several high-profile murder cases.

"He's a great prosecutor," said Multnomah County Circuit Judge Linda Bergman. "He was always extremely prepared, always handled himself above reproach. I never had any questions about his ability to do his job or his ethics."

"I'm very disappointed," said Multnomah County Circuit Judge Frank Bearden. "But I do think he's someone worth saving."

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