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The PROMIS Software Scandal.

Various articles and research material about the PROMIS software scandal

---


To be presented at "ToorCamp Seattle"

SOFTWARE TO DIE FOR – THE PROMIS SOFTWARE SCANDAL AND HOW THE U.S. JUSTICE DEPARTMENT BECAME SOFTWARE PIRATES IN THE NAME OF NATIONAL SECURITY, with Tédd St. Rain. The Inslaw/PROMIS scandal began in the early 1980s, when the Department of Justice signed a $10 million contract with a company called Inslaw to develop specialized case-tracking software for the U.S. court system. Inslaw provided the software, called P.R.O.M.I.S., but the government refused to pay the contract, forcing the company into bankruptcy court. The judge in the case ruled against the government (and was subsequently transferred to Alaska), but through appeals it was never held accountable. Instead, profits from P.R.O.M.I.S. paid off the Ayatollah Khomeini in the infamous "October Surprise" manipulation of the 1980 presidential election. This set a pattern of trading with the enemy that continued through the Iran-Contra scandal; the build-up of Saddam Hussein and the al-Queda (as the mujahadeen); and continues to this day with the Bush / Bin Laden / Obama axis. They all involve the same players and the same parapolitical dynamic that “Danny Casolaro” warned the world about before he, too, fell victim to "The Octopus" in 1991. In the backdrop: murders and apparent suicides among the Cabazon tribe members in California; the infamous private security/surveillance bureaucracy Wackenhut; the government modified P.R.O.M.I.S., sold illegally to unsuspecting governments and intelligence agencies worldwide with a secretly installed "back door" to allow spying on those same agencies, and thus enabling the notorious ECHELON satellite surveillance system. It is a story that just will not go away. Even the courts concluded that through "trickery, deceit and fraud" the US "took, converted, stole" P.R.O.M.I.S. through a series of "willful, wanton and deceitful acts" – a description that magnified to assassinations, wars and corruption on a global scale. P.R.O.M.I.S. - know about it. It surely knows about you. For more information on P.R.O.M.I.S. visit one of Tedd’s thematic websites www.PromisScandal.com

Tédd St. Rain has had an intense interest in all things preternatural since childhood, and has been actively researching the mysterious, the metaphysical and the mythical for more than 20 years now. Born and raised in suburban Los Angeles, an author, lecturer, and videographer, he has traveled the world extensively investigating the world's ancient mysteries and modern-day enigmas. He is currently affiliated with Lost Arts Media and Entertainment that publishes, markets and distributes a variety of products and services. LAME's mission it to provide fascinating and educational books, videos and multimedia products to help inform, enlighten and inspire humanity at large. Send your national security directives to: www.LostArtsMedia.com__


http://en.wikipedia.org/wiki/Prosecutor%27s_Management_Information_System
http://en.wikipedia.org/wiki/Inslaw_Inc._v._United_States_Government
http://en.wikipedia.org/wiki/Inslaw
http://en.wikipedia.org/wiki/Danny_Casolaro
http://www.wired.com/wired/archive/1.01/inslaw.html
http://www.wired.com/wired/archive/3.04/updata.html
http://www.usdoj.gov/opa/pr/1997/August97/323civ.htm
http://www.usdoj.gov/opa/pr/Pre_96/September94/555.txt.html
http://oraclesyndicate.twoday.net/stories/2726093
http://www.inslawinc.com/about/history.html

Prosecutor's Management Information System
From Wikipedia, the free encyclopedia


Main article: Inslaw Inc. v. United States Government

The Prosecutor's Management Information System (Promis) is a database system developed by Inslaw Inc., a Washington, D.C.-based, information technology company.

Promis was first developed by Inslaw during the 1970s under contracts and grants from the Law Enforcement Assistance Administration (LEAA). These guarantees gave the government licenses to use the early versions of Promis but not to modify them, or to create derivative works, or to distribute Promis outside the federal government. By 1982, because of strong disagreements over a fee-incentive, Modification 12 Agreement to the original contract, the United States Department of Justice and Inslaw Inc. became involved in a widely-publicized and protracted lawsuit (see: Inslaw Inc. v. United States Government); however, what follows is intended to be an article on What Promis Is and How Promis works.

[edit]
What is Promis?

Designed as a case-management system for prosecutors, PROMIS has the ability to track people. "Every use of PROMIS in the court system is tracking people," said Inslaw President Hamilton. "You can rotate the file by case, defendant, arresting officer, judge, defense lawyer, and it's tracking all the names of all the people in all the cases."
What this means is that PROMIS can provide a complete rundown of all federal cases in which a lawyer has been involved, or all the cases in which a lawyer has represented defendant A, or all the cases in which a lawyer has represented white-collar criminals, at which stage in each of the cases the lawyer agreed to a plea bargain, and so on. Based on this information, PROMIS can help a prosecutor determine when a plea will be taken in a particular type of case.

But the real power of PROMIS, according to Hamilton, is that with a staggering 570,000 lines of computer code, PROMIS can integrate innumerable databases without requiring any reprogramming. In essence, PROMIS can turn blind data into information. And anyone in government will tell you that information, when wielded with finesse, begets power. Converted to use by intelligence agencies, as has been alleged in interviews by ex-CIA and Israeli Mossad agents, PROMIS can be a powerful tracking device capable of monitoring intelligence operations, agents and targets, instead of legal cases.

—Richard L. Fricker, Wired magazine, 1993, "The INSLAW Octopus".[1]

More from the same article --

PROMIS has the ability to combine disparate databases, and to track people by their involvement with the legal system.

Imagine you are in charge of the legal arm of the most powerful government on the face of the globe, but your internal information systems are mired in the archaic technology of the 1960s. There's a Department of Justice database, a CIA database, an Attorney's General database, an IRS database, and so on, but none of them can share information. That makes tracking multiple offenders pretty darn difficult, and building cases against them a long and bureaucratic task.

Along comes a computer program that can integrate all these databases

—Fricker, Wired

A different author --

Working from either huge mainframe computer systems or smaller networks powered by the progenitors of today's PCs, PROMIS, from its first "test drive" a quarter century ago, was able to do one thing that no other program had ever been able to do. It was able to simultaneously read and integrate any number of different computer programs or data bases simultaneously, regardless of the language in which the original programs had been written or the operating system or platforms on which that data base was then currently installed.

—Michael Ruppert, FTW.[2]


[edit]
References
1. ^ Fricker, Richard L.; (1993). "The INSLAW Octopus". Wired magazine. ppg. 1-8. Retrieved on 2008-08-28.
2. ^ Ruppert, Michael (200-09-01). "PROMIS". From The Wilderness. Retrieved on 2008-09-17.

Inslaw
From Wikipedia, the free encyclopedia
  (Redirected from Inslaw Inc. v. United States Government)
INSLAW, Incorporated
Type
Private
Founded
Washington, D.C., U.S. (March 3, 1982)
Founder(s)
William Anthony Hamilton
Headquarters
Washington, D.C.
Industry
Information Technology
Products
CJIS, MODULAW, PROMIS
Website
http://www.inslawinc.com
Inslaw, Inc. is a small, Washington, D.C.-based, information technology company that developed for the United States Department of Justice in the mid-1970s a highly-efficient, people-tracking, software program known as: Prosecutor's Management Information System (Promis). Inslaw's principal owners, William Anthony Hamilton and his wife, Nancy Burke Hamilton, later sued the United States Government (acting as principal to the Department of Justice) for not complying with the terms of the Promis contract and for refusing to pay for an enhanced version of Promis once delivered. This allegation of software piracy led to three trials in separate federal courts and two congressional hearings.
During ensuing investigations, the Department of Justice was accused of deliberately attempting to drive Inslaw into Chapter 7 liquidation; and of distributing and selling stolen software for covert intelligence operations of foreign governments such as Canada, Israel, Singapore, Iraq, Egypt, and Jordan; and of becoming directly involved in murder.
Later developments implied that derivative versions of Enhanced Promis sold on the black market may have become the high-tech tools of worldwide terrorists such as Osama Bin Laden and international money launderers and thieves. Yet, today, nothing conclusive has been shown to support any allegations of wrongdoing on the part of anyone.
Contents [hide]
• 1 Origins
• 2 Enhanced Promis contract
• 2.1 Espionage
• 2.2 Federal investigations into allegations of theft
• 2.3 Inslaw Affair divides into two separate issues
• 3 Later developments
• 3.1 FBI, ACS, and FOIMS
• 4 Deaths allegedly related to the Inslaw case
• 5 Notes
• 6 References
• 7 Further reading
• 8 External links

[edit]
Origins

Inslaw, once called the Institute for Law and Social Research[1], was a non-profit business created in 1974 by William Anthony Hamilton, "a former analyst with the National Security Agency and onetime contract employee of the CIA."[2] Inslaw's original software product, Promis, was a database designed to handle papers and documents generated by law enforcement agencies and courts. Promis was a people-tracking program which had the power to integrate innumerable databases regardless of their languages, or regardless of their operating platforms. "Every use of Promis in the court system is tracking people," explained Hamilton. "You can rotate the file by case, defendant, arresting officer, judge, defense lawyer, and it's tracking all the names of all the people in all the cases."[3]

Promis was funded almost entirely by government funds; therefore versions created prior to January 1978 were in the public domain. On January 1, 1978, amendments to the Copyright Act of 1976 took effect, automatically conferring upon Inslaw as the author of Promis five exclusive software copyright rights, none of which could be waived except by explicit, written waiver. The federal government negotiated licenses to use but not to modify or to distribute outside the federal government some but not all versions of Promis created after the January 1978 effective-date of the copyright amendments. In 1981, after Congress liquidated the Justice Department's Law Enforcement Assistance Administration (LEAA) (which had been the primary source of funds for Inslaw's development of Promis), the company became known as Inslaw, Inc., a for-profit corporation created to further develop and market Promis and other Promis-derivative software product(s).

The newly created corporation made significant improvements to the original software. The resulting product came to be known alternately as Promis '82 or Enhanced Promis, a 32-bit architecture VAX 11/780 version.

[edit]
Enhanced Promis contract


In 1981, Councellor to the President Edwin Meese announced an $800 million overhaul of the federal computer system.
In 1981, Edwin Meese, then an advisor to President Ronald Reagan, announced an $800 million budget in an effort to overhaul the computer systems of the Justice Department, the FBI, and other law enforcement agencies.[4] The following year, the Department of Justice awarded Inslaw a $9.6 million, three-year, cost-plus-incentive-fee contract to implement a pilot program in 22 of the largest Offices of the United States Attorneys using the older 16-bit architecture Prime version (as in Wang, or IBM), which the government had a license to use.[5]
While Promis could have gone a long way toward correcting the Department's longstanding need for a standardized case-management system, the contract between Inslaw and Justice quickly became embroiled for over two decades in bitter controversy.[6] The conflict centered on whether or not the Justice Department owed Inslaw license fees for the new, 32-bit architecture VAX version if the government substituted that version for the old 16-bit Prime version which had been the subject of the original contract.

[edit]
Espionage
In February 1983, an Israeli government official scheduled a meeting with Inslaw through the Justice Department's contract agent, Peter Videnieks.[nb 1] The purpose of that meeting was for a Promis briefing and demonstation; the Israeli Ministry of Justice intended to computerize its own prosecution offices. Although it was believed that the Israeli government official was a prosecuting attorney, it was later discovered upon closer examination that the official was really Rafi Eitan, "Director of LAKAM, a super-secret agency [within] the Israeli Ministry of Defense responsible for collecting scientific and technical intelligence information from other countries through espionage."[7][8] Herein is where Inslaw's case becomes convoluted.[nb 2]
Following the Israeli meeting, the Justice Department obtained Inslaw's new, 32-bit, Enhanced Promis from Inslaw at the start of the second year of their Implementation Contract by modifying that contract and by promising to negotiate the payment of license fees.[6][5] One month later, the U.S. government began to find fault with some of Inslaw's services, and with negotiated billing rates. The government then began to withhold unilaterally each month increasing amounts of payments due Inslaw for implementation services.[9] The Justice Department agent responsible for making payments was a former, fired Inslaw employee, C. Madison Brewer.[3] Brewer would later claim in federal court that everything he did regarding Inslaw was approved by Deputy Attorney General D. Lowell Jensen.[nb 3] "Brewer was aided in his new DoJ job by Peter Videnieks," wrote Wired (magazine), "Videnieks was fresh from the Customs Service where he oversaw contracts between that agency and Hadron, Inc., a company controlled by [Edwin] Meese and Reagan-crony Earl Brian. Hadron, a closely held government systems consulting firm, was to figure prominently in the forthcoming scandal."[3] Both Brewer and Videnieks had obtained their positions under suspicious circumstances, according to the Chicago-based weekly, In These Times.[10][nb 4] Furthermore, "Before moving over to the Justice Department and taking charge of the Promis program in September 1981," wrote In These Times, "Videnieks had administered three contracts between the Customs Service and Hadron...[Hadron] was in the business of integrating information-managing systems such as Promis into federal agencies."[10][nb 5]
Simultaneously with the withholding of payments in the 1983 Modification 12 agreement, the government then substituted the enhanced VAX version of Promis for the old Prime version originally specified in the contract. However, the government failed to negotiate the payment of license fees as promised, claiming that Inslaw had failed to prove to the government's satisfaction that Inslaw had developed the enhanced version with private, non-government funds and that the enhanced version was not otherwise required to be delivered to the government under any of its contracts with Inslaw—that is, Inslaw had provided it voluntarily.[6]
Yet beneath the surface of this background was a belief that the primary focus of certain top-level individuals within the DoJ was to perpetuate international, covert intelligence operations—for example, to enable Israeli signal intelligence to "surreptitiously access the computerized Jordanian dossiers on Palestinians."[7]
Enhanced Promis was eventually installed in a total of forty-four federal prosecutors' offices following the Modification 12 agreement.[nb 6]


Elliot Richardson alluded to Earl Brian's alleged involvement in an op-ed opinion in the New York Times.[15] Brian later sued, but lost.[16]
According to affidavits filed by William Hamilton, as the contract details were modified, Hamilton then received a phone call from Dominic Laiti, chief executive of Hadron. Laiti wanted to buy Inslaw. Hamilton refused. According to Hamilton's affidavits, Laiti then warned him that Hadron had friends in government and if Inslaw did not want to sell willingly, Inslaw could be coerced.[3][6]
By February 1985, the government had withheld payment of almost $1.8 million for Inslaw's implementation services, plus millions of dollars in Old Promis license fees. Inslaw filed for Chapter 11 bankruptcy protection.[17] Meanwhile, the government began highly suspicious activities to force Inslaw into Chapter 7 liquidation.[11][6]

[edit]
Federal investigations into allegations of theft
In his court cases, William Hamilton was represented by several attorneys, one of whom was lawyer Elliot Richardson, formerly the United States Attorney General under former-President Richard Nixon.
Two different federal bankruptcy courts made fully litigated findings of fact in the late-eighties ruling that the Justice Department "took, converted, and stole"[nb 7] the Promis installed in U.S. Attorneys' Offices "through trickery, fraud, and deceit,"[nb 8] and then attempted "unlawfully and without justification"[nb 9] to force Inslaw out of business so that it would be unable to seek restitution through the courts.[6]
Three months after the initial verdict, George F. Bason, Jr., the federal judge presiding over the Bankruptcy Court for the District of Columbia, was denied reappointment to a new 14-year term on the bench by the U.S. Court of Appeals for the District of Columbia, the appointing authority.[nb 10] His replacement, S. Martin Teel, took over shortly after Judge Bason announced his oral findings of malfeasance against Inslaw by the Justice Department; Teel had been the Justice Department Tax Division attorney who had argued unsuccessfully before Judge Bason for the forced liquidation of Inslaw.[18][19] Leigh Ratiner (of Dickstein, Shapiro and Morin, which was the 10th largest firm in Washington at the time) was fired in October 1986; he had been the lead counsel for Inslaw and had filed the suit against the Justice Department in federal bankruptcy court. His firing came reportedly amidst "back channel"[7] discussions involving: the DoJ, his law firm's senior partner, and the Government of Israel; moreover, there were rumors that the Mossad had arranged a payment of $600,000 to Ratiner's former firm as a separation settlement. [nb 11]


Attorney General Dick Thornburgh repeatedly reneged on agreements made with the House committee to provide full and open access to information and witnesses[6]
Then, in September 1991, the House Judiciary Committee issued the result of a three-year investigation. House Report 102-857 Inslaw: Investigative Report[6] confirmed the Justice Department's theft of Promis. The report was issued after the Justice Department convinced the D.C. Circuit Court of Appeals on a jurisdictional technicality to set aside the decisions of the first two federal bankruptcy courts.[nb 12] The House Committee also reported investigative leads indicating that friends of the Reagan White House had been allowed to sell and to distribute Enhanced Promis both domestically and overseas for their personal financial gain and in support of the intelligence and foreign policy objectives of the United States.[15][3][21] The report even went so far as to recommend specifically further investigations of both former-Attorney General Edwin Meese and businessman, Earl Brian, for their possible involvement in illegally providing or selling Promis "to foreign governments including Canada,[22] Israel,[23][8] Singapore, Iraq,[2] Egypt, and Jordan."[6] The Democratic Majority called upon the Attorney General Dick Thornburgh to compensate Inslaw immediately for the harm that the government had "egregiously" inflicted on Inslaw. The Republican Minority dissented. The Committee was divided along party lines 21–13. Attorney General Thornburgh ignored the recommendations, and reneged on agreements made with the committee.[6]

[edit]
Inslaw Affair divides into two separate issues
On November 13, 1991, newly appointed, Attorney General William Barr, appointed a retired federal judge, Nicholas J. Bua, as Special Counsel to advise him on the allegations that high-ranking officials had acted improperly for personal gain to bankrupt Inslaw.[24]


William Barr appointed Special Counsel, Nicholas J. Bua, to advise him on what had become known by 1991 as the Inslaw Affair.
By June 1993, a 267-page Bua Report[25][18] was released, clearing Justice officials of any impropriety.[26] Inslaw's attorney, Elliot Richardson immediately wrote Inslaw's 130-page Rebuttal with evidence suggesting Bua's report was riddled with errors and falsehoods.[19] On September 27, 1994, Attorney General Janet Reno released a 187-page review concluding "that there is no credible evidence that Department officials conspired to steal computer software developed by Inslaw, Inc. or that the company is entitled to additional government payments." [27] Yet, according to Wired (magazine), "Reno's report was released the same day [that] the House Judiciary Committee passed HR 4862[28], a bill which would have bound the U.S. Court of Federal Claims legally to independently investigate the Inslaw case—thus circumventing the Department of Justice's claims of innocence;"[29] however, HR 4862 was defeated by a partisan committee-vote later that night before it was set to go before the full House.


Janet Reno released her review of the Bua Report on the same day that the House Select Committe on the Judiciary brought HR 4862 to the floor for a vote.
The following May, the United States Senate asked the U.S. Court of Federal Claims [nb 13] to determine if the United States owed Inslaw compensation for the government's use of Promis. On July 31, 1997, Judge Christine Miller, the hearing officer for the U.S. Court of Federal Claims ruled that all of the versions of Promis were in the public domain and that the government had therefore always been free to do whatever it wished with Promis.[30][31][5] The following year, the appellate authority, a three-judge Review Panel of the same court, upheld Miller's ruling; yet, it also determined that Inslaw had never granted the government a license to modify Promis to create derivative software although Inslaw was automatically vested with the exclusive copyright rights to Promis. The Review Panel then held that the United States would be liable to Inslaw for copyright infringement damages if the government had created any unauthorized derivatives from Promis, but noted that Inslaw had failed to prove in court that the government had done so; moreover, the Board held that the issue of derivative works was "of no consequence."[nb 14] Inslaw challenged this interpretation but the Review Panel refused Inslaw's request to reopen discovery. In August 1998, Chief Judge Lorin Smith of the U.S. Court of Federal Claims sent an Advisory Report to the Senate, noting that the court had not found that the United States owes Inslaw compensation for the government's use of Promis, and enclosing the decision of the hearing officer and the decision of the Review Panel.[5]
On the other hand, according to William Hamilton, the government flatly denied during all court proceedings what it later admitted, i.e. that agencies such as the FBI and other U.S. intelligence agencies[19] used a Promis-derivative to keep track of their classified information.[9]

[edit]
Later developments
In early 1999, the British journalist and author, Gordon Thomas, published an authorized history of the Israeli Mossad titled Gideon's Spies: The Secret History of the Mossad. The book quotes detailed admissions by the former long-time deputy-director of the Mossad, Rafi Eitan, about the partnership between Israeli and U.S. intelligence in selling to foreign intelligence agencies in excess of $500 million worth of licenses to a trojan horse version of Promis, in order to spy on them.[23]
In 2001, the Washington Times and Fox News each quoted federal law enforcement officials familiar with debriefing former FBI Agent Robert Hanssen as claiming that the convicted spy had stolen copies of a Promis-derivative for his Soviet KGB handlers.


Robert Hanssen
They further alleged that the software was used within the FBI and other U.S. intelligence agencies to track internal intelligence, and was used by intelligence operatives to track international interbank transactions.[32] These reports further stated that Osama bin Laden later bought copies of the same Promis-derivative on the Russian black market (blat) for $2 million.[33] It was believed then that al Qaeda used the software to penetrate database systems to move funds throughout the banking system, and to evade detection by U.S. law enforcement. [34]
[edit]
FBI, ACS, and FOIMS
In May 2006, a former aide in the Office of the Vice President of the United States pleaded guilty to passing top-secret classified information to plotters trying to overthrow the president of the Philippines. Leandro Aragoncillo, an FBI intelligence analyst at the time of his arrest, was believed to have operated his deception using archaic database software manipulated by the FBI in order to evade the 1995 finding of the U.S. Court of Federal Claims with regard to Inslaw's rights to
derivative works.[35] [9] [36] Additionally,
The 9-11 Commission called attention to the fact that the FBI did not install the current version of its case management software, called the ACS (Automated Case Support) system, until October 1995 and [to the fact that ACS was obsolete from the time the FBI developed it in the mid-1990s because it was based on "1980s technology". Although the 9-11 Commission offered no explanation for why the FBI used obsolete technology to develop its ACS case mnagement software in 1995, the apparent explanation is that the FBI simply renamed its 1980s technology case management software, which was called FOIMS and was based on PROMIS, and translated it in October 1995 into a different computer programming language in order to obstruct a court hearing that the U.S. Senate had ordered earlier that year. The Senate had ordered the court in May 1995 to determine whether the United States owes Inslaw compensation for the government's use of PROMIS, and the court, in turn, ordered outside software experts to compare the FBI's software with PROMIS, but the FBI modified its software and told the court that it no longer retained the unmodified first 11 years (1985 through 1995) of its own case management software.] —boxed information added by David Dastych
—William A. Hamilton,"FBI's Incapacitating Cover-Up", Wprost[36]
In 2006, there were further allegations of the misuse of Promis. Writing in the Canada Free Press, the former Polish CIA operative and now international journalist, David Dastych alleged that "Chinese Military Intelligence (PLA-2) organized their own hackers department, which [exploited] Promis [database systems] [in the] Los Alamos and Sandia national laboratories to steal U.S. nuclear secrets"[36]; however, the prima facie value of that allegation was lost in a realization that the U.S. Government could not convict the suspected 2001 spy.[37]
The U.S. Government has never paid Inslaw Inc. for any of these unauthorized uses of Promis.
"Inslaw deserves to be compensated," wrote nationally syndicated columnist, Michelle Malkin, in The Washington Times.[38] "More importantly, the American people deserve to know the truth: Did government greed and bureaucratic hubris lead to a wholesale sellout of our national security?"[36]

[edit]
Deaths allegedly related to the Inslaw case
While investigating elements of this story, journalist Danny Casolaro died in what was twice ruled a suicide. Prior to his death, Casolaro had warned friends if they were ever told he had committed suicide not to believe it, and to know he had been murdered.[39] Many have argued that his death was suspicious, deserving closer scrutiny; some have argued further, believing his death was a murder, committed to hide whatever Casolaro had uncovered.[7] "I believe he was murdered," wrote former Attorney General Elliot Richardson in the New York Times, " but even if that is no more than a possibility, it is a possibility with such sinister implications as to demand a serious effort to discover the truth."[15] Kenn Thomas and Jim Keith discuss this in their book, The Octopus: Secret Government and the Death of Danny Casolaro[nb 15] Writing on behalf of a majority opinion in House Report 102-857, Committee Chairman, Jack Brooks (D-TX) wrote, "As long as the possibility exists that Danny Casolaro died as a result of his investigation into the INSLAW matter, it is imperative that further investigation be conducted."[6]

Danny Casolaro
From Wikipedia, the free encyclopedia



Danny Casolaro
Born
Joseph Daniel Casolaro
June 16, 1947
McLean, Virginia
Died
August 10, 1991 (aged 44)
Martinsburg, West Virginia
Occupation
Freelance writer
Nationality
American
Education
Providence College
Joseph Daniel Casolaro (June 16, 1947 – August 10, 1991) was an American freelance writer who came to public attention in 1991, when he was found dead, his wrists slashed 10-12 times, in a bathtub in room 517 of the Sheraton Hotel in Martinsburg, West Virginia. An apparent suicide note was found, and the medical examiner ruled the death a suicide.[1][2]
His death became controversial because his notes suggested he had traveled to Martinsburg to meet a source in connection with a story he had dubbed "the Octopus." It centered around a sprawling conspiracy theory dating back to the 1950s, involving an international cabal of around eight men, and featuring a software manufacturer called Inslaw, whose owner had accused the Justice Dept of having stolen its work product; the so-called October Surprise theory; the collapse of the Bank of Credit and Commerce International; the S&L crisis; and Iran-Contra.[3][4][5][6]
Casolaro's family argued that he had been killed; he had apparently told his brother that, if something were to happen to him, it would not be an accident.[1][7] A number of law-enforcement officials also argued that his death deserved further scrutiny, and his notes were passed by his family to ABC News and Time Magazine, both of which investigated the case, but no evidence of murder was ever found.[8][9][3] Casolaro's death and "the Octopus" have since entered conspiracy-theory folklore.
Contents [hide]
• 1 Biography
• 1.1 Early life and career
• 2 His research
• 2.1 Inslaw
• 3 Final days
• 3.1 Last known sightings of Casolaro
• 3.2 Death
• 3.3 Controversy
• 3.4 Re-examination of the case
• 4 Notes
• 5 Further reading

[edit]
Biography

[edit]
Early life and career
Casolaro was born in McLean, Virginia, the second of six children. One of his siblings fell ill and died shortly after birth; another, Lisa, died of an apparently deliberate drug overdose. His father was an obstetrician. Casolaro attended Providence College, dropping out when he was twenty. He married Terrill Pace. The couple had a son, and divorced after thirteen years. Casolaro was granted legal custody of their son, and the couple remained on good terms.[citation needed]
At the time of his death, he had written and published one novel, The Ice King, with Vanity Press, as well as some short stories, and had previously owned a small group of computer-industry trade publications, according to The New York Times and The Village Voice.[5][1] A friend of his told the Voice that Casolaro had also written some poetry, and that he may have been interested in "the Octopus" from the point of view of a novelist.[1]

[edit]
His research
Casolaro had reportedly told people that he was nearly ready to reveal a wide-ranging criminal conspiracy spanning Iran-Contra, the October Surprise Conspiracy, the closure of BCCI, the bombing of Pan Am 103, and the Inslaw case, a conspiracy implicating the Central Intelligence Agency, the Royal Canadian Mounted Police, the U.S. Justice Dept, the Wackenhut Corporation, Mossad, and MI5 and MI6 British Secret Services. Writing in the Columbia Journalism Review, Phil Linsalata notes: "Any one of those stories of course is a challenge for America's best journalists. Casolaro wanted to tackle them all."[10]
David Corn writes in The Nation that the papers he left behind reveal few clues, except that Casolaro was in over his head but was tenacious.[3] His papers included old clippings, handwritten notes that were hard to read, and the names of former CIA officers and arms dealers. Corn alleges that the notes show Casolaro was influenced by the so-called "secret team theory" of the Christic Institute and that he had pursued material "fed" to him by a reporter who worked for Lyndon LaRouche. Richard Fricker wrote in Wired magazine that Casolaro had been led into a "Bermuda Triangle of spooks, guns, drugs and organized crime."[11]

[edit]
Inslaw
Main articles: Inslaw and Michael Riconosciuto
Inslaw had been in the news since the mid-eighties. In a previous position with the U.S. Justice Department, Inslaw's founder, William A. Hamilton, had helped to develop a computer software program called Promis, short for Prosecutor's Management Information System). Promis was designed to organize the paperwork generated by law enforcement and the courts. After he left the Justice Dept, Hamilton alleged that the government had stolen Promis and had distributed it illegally, robbing him of millions of dollars.[1] The Dept denied this, insisting that they owned it because Hamilton had developed it while working for them. Hamilton and the dept had been in litigation since 1983. A federal bankruptcy judge ruled in 1988 that the dept had indeed taken the software by "trickery, fraud, and deceit," a decision upheld by a federal district court in 1988, but overturned on appeal in 1991. A conspiracy theory developed around the case, with allegations that "back doors" had been inserted into the software so that whoever was using it could be spied on.[3]
Casolaro's major source on the conspiracy theory aspect of the Inslaw case was Michael Riconosciuto. Riconoscuito had been introduced to a friend of Casolaro's by Jeff Steinberg, a longtime top aide in the Lyndon LaRouche organization.[3] In or around May 1990, Riconosciuto told Casolaro that he and Earl Brian (a director of Hadron, Inc., a government consulting firm) had traveled to Iran in 1980 and had paid $40 million to Iranian officials to persuade them not to let the hostages go before the presidential election, a claim now known as the "October Surprise" theory.[1][8][12] In exchange for his help, Earl Brian was allowed to profit from the illegal pirating of the Promis system, according to Riconoscuito. Brian, a close friend of then-Attorney General Ed Meese, denied any involvement in either October Surprise or the Inslaw case.
In a March 21, 1991 court affidavit submitted to the court in the case,[13] Riconosciuto claimed to have modified Inslaw's software at the Justice Department's behest so that it could be sold to dozens of foreign governments with a secret "back door," which allowed outsiders to access computer systems using Promis.[1] These modifications allegedly took place at the Cabazon Indian Reservation near Indio, California. Because the reservation was sovereign territory where enforcement of U.S. law was sometimes problematic, Riconosciuto claimed that he worked on "semi-legal" and illegal weapons programs for The Wackenhut Corporation, such as a powerful "fuel air explosive".[3] Eight days after submitting the affidavit Riconosciuto was arrested for allegedly distributing metamphetamine and methadone, charges that he said were a set-up to keep him from telling his story.[3][14][15]

[edit]
Final days


On August 8, Casolaro arrived in Martinsburg, West Virginia to meet a source who, he said, had promised to provide an important missing piece of his story.
On August 5, 1991, Casolaro phoned Bill McCoy, a retired CID officer to relate some encouraging news. He said that the mainstream news magazine Time had assigned him an article about the Octopus. He further claimed to be working with the esteemed reporter Jack Anderson, and that publishers Little, Brown and Time Warner had offered to finance the effort. All these claims later were proven false.[1]
Again on August 5, Casolaro's friend Ben Mason agreed to talk to Casolaro about his finances. Casolaro faced some pressing though not catastrophic financial problems, and he and Mason agreed that the best solution would be if the publisher's advance came through. A few days later, Casolaro showed Mason some of his notes and manuscript, including a photocopy of a passport of Hassan Ali Ibrahim Ali, the manager of Sitco, an alleged Iraqi front company. Casolaro showed Mason a 22-point outline for his book and expressed frustration at having been tied up with a literary agent who was unable to sell it for the last eighteen months. He also allegedly complained about his sleep being disturbed for the previous three months by calls during the night.[1]
The following day, Casolaro's longtime housekeeper Olga helped Casolaro pack a black leather tote. She remembered him packing a thick, heavy sheaf of papers into a dark brown or black briefcase. Casolaro said he was leaving for several days to visit Martinsburg, West Virginia to meet a source who promised to provide an important missing piece of his story. This was the last time Olga saw Casolaro.[1]
By August 9, Bill Hamilton was starting to worry: he had not been able to reach Casolaro for several days and never before had encountered such difficulty. He telephoned several mutual acquaintances, none of whom knew Casolaro's whereabouts.[1]
Olga told The Village Voice that she answered several threatening telephone calls at Casolaro's home. One man called at about 9:00 a.m. and said, "I will cut his body and throw it to the sharks". Less than an hour later, a different man hissed: "Drop dead." Then there was a third call, but Olga remembered only that no one spoke and that she heard only music as though a radio were playing in the same room as the caller. "Don't call him no more," she said. She hung up. A fourth call was the same as the third, and a fifth came later that night. "No music...and no one spoke." After this she slammed her receiver down.[1]

[edit]
Last known sightings of Casolaro
According to Ridgeway and Vaughan, Casolaro's whereabouts between late August 8 and afternoon August 9 are unknown. He met the Honeywell engineer William Richard Turner at the Sheraton at about 2:30 p.m. on August 9. Turner says he gave Casolaro some documents, and that they spoke for a few minutes. Turner later refused to specify the content of the papers, and he claimed that he had been harassed by the police who were investigating Casolaro's death.
Witnesses reported that Casolaro spent the next few hours at a Martinsburg restaurant. A bartender there told the local police, "He seemed lonely and depressed." The police further learned that "Sometime around 5:00 p.m. Casolaro entered Heatherfields, the cocktail lounge at the Sheraton with another man described by a waitress as 'maybe Arab or Iranian.' The waitress remembered because the foreign-seeming man rudely complained about slow service."[1]
At about 5:30 p.m. that night, Casolaro happened to meet Mike Looney who rented the room next to Casolaro's Room 517. They chatted on two occasions—first at about 5:30 p.m. and then again at about 8:00 p.m. Looney later explained, "[Casolaro] said he was there to meet an important source who was going to give him what he needed to solve the case." According to Looney, Casolaro claimed that his source was scheduled to arrive by 9:00 p.m. Around that time, Casolaro left Looney, explaining that he had to make a telephone call. He returned a few minutes later and admitted, somewhat sheepishly, that his source might have "blown him off." Casolaro and Looney talked until about 9:30 p.m. At about 10.00 p.m., Casolaro purchased coffee at a nearby convenience store. That was the last time anyone reported seeing Casolaro alive.[1]

[edit]
Death
At about noon on August 10, 1991, housekeeping staff discovered Casolaro naked in the bathtub of Room 517. His wrists were slashed deeply. There were three or four wounds on his right wrist and seven or eight on his left. Blood was splattered on the bathroom wall and floor; and according to Ridgeway and Vaughn, "the scene was so gruesome that one of the housekeepers fainted when she saw it."[1]
Under Casolaro's body, paramedics found an empty Milwaukee beer can, two white plastic liner-trash bags, and a single edge razor blade.[citation needed] There was a half-empty wine bottle nearby. Ridgeway and Vaughan write that nothing was placed in the bathtub drain to prevent debris from draining away, and none of the bathwater was saved.[1]
Other than a gruesome scene, the hotel room was clean and orderly. There was a legal pad and a pen present on the desk and there was a single page from the pad torn with a message written on it: "To those who I love the most please forgive me for the worst possible thing I could have done. Most of all I'm sorry to my son. I know deep down that God will let me in." Based on the note, the absence of a struggle, no sign of a forced entry, and the presence of alcohol, police judged the case a straightforward suicide. After inspecting the scene, they found four more razor blades in their envelopes in a small package. Police interviews further revealed that no one had seen nor heard anything suspicious. The Martinsburg police contacted authorities in Fairfax, Virginia, who said they would notify Casolaro's family.

[edit]
Controversy
The first autopsy was performed on Casolaro's body at the University of Virginia on August 14, 1991. The coroner determined that blood loss was the cause of death, and that death occurred from one to four hours before the body was discovered, or roughly between 8:00 a.m. and 11:00 a.m. on August 10.[1]
The day after Casolaro's body was found, Village Voice editor Dan Bischoff received an anonymous telephone call alerting him to Casolaro's death.[3] By Tuesday, August 13, Ridgeway and Vaughan write, the "rumors were flying,...and by the next day, the crazies started coming out of the woodwork. There were vague unsubstantiated rumors that the Mafia was somehow involved, and the wildest story even suggested that the undertaker was an employee of the CIA, hired to clean up after an agency assassination."[1] Even at the funeral, they write, the family felt "engulfed by mysteries." Two men reportedly approached the coffin, one of them a soldier in U.S. Army dress, who laid a medal on the lid, and saluted. No one recognized either of the men.[1]

[edit]
Re-examination of the case
After the scandal erupted, police returned to Room 517 for a more thorough if belated search. The room had not been rented since Casolaro's body had been discovered and authorities looked for fingerprint and fiber evidence; they reexamined the windows and doors for anything suggesting a forced entry. They searched the hotel's rooftop for footprints and/or other evidence consistent with someone rappelling into a window. Their searches uncovered nothing. Roads were searched for miles. Now they were looking for Casolaro's missing briefcase, and accordion file.
The adjacent rooms to Room 517 were rented that evening—one by Mike Looney, the other by an unnamed family. No one reported hearing anything unusual either on the night of August 9 or the morning of August 10. Along with samples of Casolaro's known handwriting, the suicide note was sent to handwriting experts, and found to be his.
In January 1992, about five months after Casolaro's death, Dr. Frost of the Virginia state medical examiner's office performed another autopsy; he returned a second suicide verdict, citing blood loss as the cause of death. Dr. Frost also uncovered a few previously unknown facts. There was evidence of early stages multiple sclerosis but the degree of severity was probably minor. Toxicology analysis uncovered traces of several drugs: antidepressants, acetaminophen, and alcohol. He wrote: "There was nothing present in any way that could have incapacitated Casolaro so he would have been incapable of struggling against an assailant, let alone been sufficient to kill him."[1]
A blood-splatter expert, Dr. Henry C. Lee, was quizzed on the case by Martinsburg police. His opinion that the evidence was not inconsistent with suicide was prominently noted in press releases. However he withdrew his statement formally years later when he was informed of the bloody towels on the floor of the bathroom since no authorities had mentioned them at the time of his opinion.[citation needed]
Ron Rosenbaum, a journalist friend of Casolaro's, suggested in Vanity Fair that Casolaro may have intended his suicide to appear to be murder triggered by his research, in order to have others look into the story after his death.[2]

PROMIS, by Michael C. Ruppert

[The Following Story Appeared In The September, 2000 Special Edition Of From The Wilderness For Paid Subscribers Only. Read It Now, Free, For The First Time Ever On The Web. © Copyright 2000, 2001. All Rights Reserved. Michael C. Ruppert And From The Wilderness Publications. See the FTW Homepage For Reprint Policy] http://www.fromthewilderness.com/free/pandora/052401_promis.html

"Reprinted with permission, Michael C. Ruppert and From The Wilderness Publications, www.copvcia.com, P.O. Box 6061-350, Sherman Oaks, CA, 91413. 818-788-8791. FTW is published monthly, annual subscriptions are $50 per year."

Order Michael C. Ruppert’s new book “Crossing the Rubicon: The Decline of the American Empire at the End of the Age of Oil, 700+ pages, 1,000+ references, only $15.99 plus shipping!!! http://www.fromthewilderness.com/store/index.shtml

"U.S. journalist Mike Ruppert, a former Los Angeles police officer who now runs a Web site that seeks to expose CIA covert operations, said he met with RCMP investigator McDade on Aug. 3 in L.A. Ruppert said the RCMP officer was anxious to see documents he received three years ago from a shadowy Green Beret named Bill Tyre [sic] detailing the sale of rigged Promis software to Canada." - The Toronto Star, September 4, 2000.

Only the legends of Excalibur, the sword of invincible power, and the Holy Grail, the chalice from which Christ took his wine at the Last Supper begin to approach the mysterious aura that have evolved in the world of secret intelligence around a computer software program named Promis. Created in the 1970s by former National Security Agency (NSA) programmer and engineer Bill Hamilton, now President of Washington, D.C.'s Inslaw Corporation, PROMIS (Prosecutor's Management Information System) crossed a threshold in the evolution of computer programming. Working from either huge mainframe computer systems or smaller networks powered by the progenitors of today's PCs, PROMIS, from its first "test drive" a quarter century ago, was able to do one thing that no other program had ever been able to do. It was able to simultaneously read and integrate any number of different computer programs or data bases simultaneously, regardless of the language in which the original programs had been written or the operating system or platforms on which that data base was then currently installed.

In the mid 1970s, at least as far as computer programs were concerned, the "universal translator" of Star Trek had become a reality. And the realm of Star Trek is exactly where most of the major media would have the general public place the Promis story in their world views. But given the fact that the government of Canada has just spent millions of dollars investigating whether or not a special version of Promis, equipped with a so-called "back door" has compromised its national security, one must concede that perhaps the myths surrounding Promis and what has happened to it need to be re-evaluated. Myths, by definition, cannot be solved, but facts can be understood and integrated. Only a very few people realize how big the Promis story really is.

It is difficult to relegate Promis to the world of myth and fantasy when so many tangible things, like the recently acknowledged RCMP investigation make it real. Canadians are not known for being wildly emotional types given to sprees. And one must also include the previous findings of Congressional oversight committees and no less than six obvious dead bodies ranging from investigative journalist Danny Casolaro in 1991, to a government employee named Alan Standorf, to British Publisher and lifelong Israeli agent Robert Maxwell also in 1991, to retired Army CID investigator Bill McCoy in 1997, to a father and son named Abernathy in a small northern California town named Hercules. The fact that commercial versions of Promis are now available for sale directly from Inslaw belies the fact that some major papers and news organizations instantly and laughably use the epithet conspiracy theorist to stigmatize anyone who discusses it. Fear may be the major obstacle or ingredient in the myth surrounding modified and "enhanced" versions of Promis that keeps researchers from fully pursuing leads rising in its wake. I was validated in this theory on September 23rd in a conversation with FTW Contributing Editor Peter Dale Scott, Ph.D. Scott, a Professor Emeritus at UC Berkeley and noted author. Peter, upon hearing of the details of my involvement, frankly told me that Promis frightened him. Casolaro, who was found dead in a West Virginia motel room in 1991, had Scott's name (Scott is also a Canadian) in a list of people to contact about his Promis findings. He never got that far.

A close examination of the Promis saga actually leads to more than a dozen deaths which may well be why so many people avoid it. And many of those deaths share in common a pattern where, within 48 hours of death, bodies are cremated, residences are sanitized and all files disappear. This was certainly the case with my friend Bill McCoy, a legendary retired Army CID investigator who was also the principal investigator for Hamilton in his quest to recover what may be hundreds of millions in lost royalties and to reunite him with the evolved progeny of his brain child. Those progeny now have names like SMART (Self Managing Artificial Reasoning Technology) and TECH. I will never forget hearing of McCoy's death and his immediate cremation and then trying to reconcile that with the number of times he had told me, while sitting in his Fairfax Virginia home, that he wanted to be buried next to his beloved wife in spite of the fact that he was a Taoist.

I have tried to avoid becoming involved in Promis even though I have been in possession of documents and information about the case for more than six years. Reluctantly, as I realized that recent developments gave me a moral imperative to write, I gathered all of my scattered computer files connecting the case into one place. When assembled they totaled more than seven megabytes and that did not include maybe 500 printed pages of separate files.

In researching this story I found a starkly recurring theme. It appeared first in a recent statement I tape recorded from probably one of the three best informed open sources on the story in the world, William Tyree. I also came across the same theme, almost verbatim, in a research paper that I discovered while following leads from other sources.

Tyree is no stranger to FTW. A former US Army Green Beret, framed in 1979, he has been serving a life sentence for the murder of his wife Elaine outside of Fort Devens Massachusetts, then home of the 10th Special Forces Group. I have written of him in no less than six prior issues of FTW. He has, from his prison cell in Walpole Massachusetts, been a central if little known figure in the Promis case for many years, like a monk mysteriously possessed of information that no one else could obtain. If the story is ever fully told his role may be even more significant than anyone has ever supposed.

The information from Tyree, recorded in a phone conversation on August 28, and the research work on "block-modeling" social research theory uncovered while researching other leads both describe the same unique position or vantage point from hypothetical and actual perspectives. Tyree described an actual physical point in space, further out than ever thought possible and now used by US satellites. This distance is made possible by Promis progeny so evolved that they make the original software look primitive. The social research, which included pioneering mathematical work - apparently facilitating the creation of artificial intelligence - postulated that a similar remote hypothetical position would eliminate randomness from all human activity. Everything would be visible in terms of measurable and predictable patterns - the ultimate big picture. Just one of the key web sites where I found this information is located at http://web.syr.edu/~bvmarten/socialnet.html.

One of FTW's guiding principles is our incessant drive to separate that which is important from that which is merely true. The purpose of this article is to provide leads and insights, some very concrete, for the continued investigation of the Promis saga. While we do not claim to be worthy of pulling Excalibur from the stone we do hope to be divorced enough from egotistical motivations and dreams of Pulitzers or glory to avoid being led into the trap that has befallen so many seeking the Holy Grail. FTW believes that the Promis story will only be solved by a group of people working together selflessly for a greater good. Maybe there is legend here after all. Put simply, from the vantage point of a child actor in 1970s Burger King commercials, "It's too big to eat!"

What would you do if you possessed software that could think, understand every language in the world, that provided peep holes into everyone else's computer "dressing rooms," that could insert data into computers without people's knowledge, that could fill in blanks beyond human reasoning and also predict what people would do - before they did it? You would probably use it wouldn't you? But Promis is not a virus. It has to be installed as a program on the computer systems that you want to penetrate. Being as uniquely powerful as it is this is usually not a problem. Once its power and advantages are demonstrated, most corporations, banks or nations are eager to be a part of the "exclusive" club that has it. And, as is becoming increasingly confirmed by sources connected to this story, especially in the worldwide banking system, not having Promis - by whatever name it is offered - can exclude you from participating in the ever more complex world of money transfers and money laundering. As an example, look at any of the symbols on the back of your ATM card. Picture your bank refusing to accept the software that made it possible to transfer funds from LA to St. Louis, or from St. Louis to Rome.

The other thing to remember is that where mathematics has proved that every human being on the earth is connected to every other by only six degrees of separation, in covert operations the number shrinks to around three. In the Promis story it often shrinks to two. It really is a small world.

The First Rip Off

Reagan confidant and overseer for domestic affairs from 1981 to 1985 Ed Meese loved Promis software. According to lawsuits and appeals filed by Hamilton, as well as the records of Congressional hearings, the FBI and dozens of news stories, the legend of Promis began in 1981-2. After a series of demonstrations showing how well Promis could integrate the computers of dozens of US attorneys offices around the country, the Department of Justice (DoJ) ordered an application of the software under a tightly controlled and limited license. From there, however, Meese, along with cronies D. Lowell Jensen (also no stranger to FTW's pages) and Earl Brian allegedly engaged in a conspiracy to steal the software, modify it to include a "trap door" that would allow those who knew of it to access the program in other computers, and then sell it overseas to foreign intelligence agencies. Hamilton began to smell a rat when agencies from other countries, like Canada, started asking him for support services in French when he had never made sales to Canada.

The Promis-managed data could be anything from financial records of banking institutions to compilations of various records used to track the movement of terrorists. That made the program a natural for Israel which, according to Hamilton and many other sources, was one of the first countries to acquire the bootlegged software from Meese and Company. As voluminously described by Inslaw attorney, the late Elliot Richardson, the Israeli Mossad under the direction of Rafi Eitan, allegedly modified the software yet again and sold it throughout the Middle East. It was Eitan, the legendary Mossad captor of Adolph Eichmann, according to Hamilton, who had masqueraded as an Israeli prosecutor to enter Inslaw's DC offices years earlier and obtain a first hand demonstration of what the Promis could do.

Not too many Arab nations would trust a friendly Mossad agent selling computer programs. So the Mossad provided their modified Promis to flamboyant British publishing magnate Robert Maxwell, a WWII Jewish resistance fighter who had assumed the Anglo name and British citizenship after the war. It was Maxwell, capable of travelling the world and with enormous marketing resources, who became the sales agent for Promis and then sold it to, among others, the Canadian government. Maxwell drowned mysteriously in late 1991, not long after investigative reporter Danny Casolaro was "suicided" in West Virginia. Maxwell may not have been the only one to send Promis north.

In the meantime, after winning some successes, including a resounding Congressional finding that he had been cheated, Bill Hamilton hit his own buzz saw in a series of moves by the Reagan and Bush Justice Departments and rigged court decisions intended to bankrupt him and force him out of business. He survived and fought on. In the meantime hundreds of millions of dollars in royalties and sales fees were going into the wrong pockets. And, as was later revealed from a number of directions, this initial tampering with the software was far from the only game in town. Both the CIA, through GE Aerospace in Herndon Virginia (GAO Contract #82F624620), the FBI and elements of the NSA were tinkering with Promis, not just to modify it with a trap door, but to enhance it with artificial intelligence or AI. It's worth it to note that GE Aerospace was subsequently purchased by Martin-Marietta which then merged to become Lockheed-Martin the largest defense and aerospace contractor in the world. This will become important later on.

Confidential documents obtained by FTW indicate that much of the AI development was done at the Los Alamos National Laboratory and Sandia Labs using research from other US universities, including Harvard, Cal-Tech and the University of California. And it was not just Reagan Republicans who got their hands on it either. As we'll see shortly, Promis came to life years before the election of Ronald Reagan. It was also, according to Bill Tyree, an essential element in the espionage conducted by Jonathan Pollard against not only the US government but the Washington embassies of many nations targeted by Israel's Mossad.

The Last Circle

For more than a year and half, members of the National Security Section of the Royal Canadian Mounted Police (RCMP) have been travelling through the US, often in the company of a savvy female homicide detective from the small California town of Hercules named Sue Todd. Even now questions linger as to what the Canadians were really after. But there is absolutely no question that while surreptitiously in the U.S. the Mounties spent more time with author and investigative reporter Cheri Seymour than with anyone else. And for good reason.

Seymour, under the pen name of Carol Marshall is the author of a meticulously researched e-book entitled The Last Circle located at http://www.lycaeum.org/books/ books/last_circle/. So meticulously researched and documented is the book that FTW's researcher "The Goddess" has fact checked it and found it flawless. Same with Bill Hamilton and the Mounties, who have also told me of its precision. Anyone seeking to understand the Promis story must include this book as a part of their overall research.

I first met Cheri in person this spring after she had contacted me via the Internet. I traveled to her home, some three hours outside of Los Angeles and viewed acres of documentation for a saga that started with drug related murders and police corruption around methamphetamine production in northern California in the 1980s. That investigation later connected to politicians like Tony Coelho and major corporations like MCA and eventually led to a shadowy scientist named Michael Riconosciuto. Familiar names like Ted Gunderson and relatively unknown names like Robert Booth Nichols weave throughout this detailed epic that takes us to the Cabazon Indian Reservation in the California Desert and into the deepest recesses of the 1980s Reagan/Bush security apparatus.

Gunderson, a retired FBI Special Agent in Charge (SAC) from Los Angeles, and Nichols, a mysterious Los Angeles man, exposed through court documents obtained by Seymour as being a career CIA operative, connected with scientist/programmer, Riconosciuto in a sinister, yet now very well documented phase of Promis' development. In affidavits Riconosciuto claimed that one of the tasks he performed at the Cabazon reservation was to install a back door in the version of Promis that was sold to Canada. In August of this year the RCMP investigators told both Seymour and me that they had traveled to the reservation several times and had confirmed many details of Seymour's research. They had also interviewed Riconosciuto on more than one occasion. As with everyone else I have ever met who has spoken with him, both the Mounties and Seymour kept a reserved distance from him and always "counted their fingers after every hand shake."

By using treaties between the U.S. Government and Native American peoples that recognize Native American reservations as sovereign nations, the CIA has long and frequently avoided statutory prohibitions against operating inside the United States. The financial rewards for tribal nations have been significant and the extra security afforded by tribal police in remote areas has been a real blessing for covert operatives. The Last Circle describes in detail how Promis software was modified by Riconosciuto to allegedly include the back door "eavesdropping" capability but also enhanced with one form of AI and subsequently applied to the development of new weapons systems including "ethnospecific" biowarfare compounds capable of attacking specific races. Riconosciuto, now serving time in a Federal prison in Pennsylvania has a cell a very short distance from fellow espionage inmates Edwin Wilson and Jonathan Pollard. While his tale is critical to understanding what has happened to Promis, the fact remains that Riconosciuto has been out of the loop and in legal trouble for eight years. He has been in a maximum security prison for at least six. What was surprising was that in 1998 he contacted homicide detective Sue Todd in Hercules and told her that the murder of a father and son, execution style, was connected to the Promis story. One connection was obvious. Hercules is a "company town" connected to a weapons manufacturer described in Seymour's book that also connects to the Cabazon Indian Reservation.

The Three Bills

I lived in Washington, D.C. from August 1994 until late October of 1995. It was during that time that I was a semi-regular visitor at the Fairfax, Virginia home of Bill McCoy, a loveable sixty-something giant, always adorned with a beret who complained ruthlessly about what had happened to the United States since "The Damned Yankee Army" had taken over. Writers were "scribblers." People who thought they knew something about covert operations without ever having seen one were "spooky-groupies." "Mac," as we called him, had his investigative fingers in almost everything but he was most involved with Promis. McCoy was a retired Chief Warrant Officer from the U.S. Army's Criminal Investigation Division. He had broken some of the biggest cases in Army history. It was Mac who first introduced me to both Bill Tyree and to Bill Hamilton in 1994. I recall scratching my head as I would be sitting at Mac's dinner table when a call would come in from Hamilton asking if there was any new information from Tyree. "Not yet, " McCoy would answer, "I'll call as soon as I get something."

"How," I asked, "could a guy in a maximum security prison like Walpole State Penitentiary in Massachusetts be getting information of such quality that someone like Hamilton would be calling urgently to see what had come in?" "That," answered McCoy was the work of someone known only as "The Sergeant Major," and alternately as "His Eminence" who fed the information to Tyree, who in turn fed it to McCoy, who then passed it on to Hamilton. Sometimes however, Tyree and Hamilton communicated directly. To this day the identity of the Sergeant Major remains a mystery and the puzzle piece most pursued by the RCMP when they visited me in August, 2000.

It was also not by coincidence then that, in the same winter of 94-95, McCoy revealed to me that he was using former Green Berets to conduct physical surveillance of the Washington, D.C. offices of Microsoft in connection with the Promis case. FTW has, within the last month, received information indicating that piracy of Microsoft products at the GE Aerospace Herndon facility were likely tied to larger objectives, possibly the total compromise of any Windows based product. It is not by chance that most of the military and all of the intelligence agencies in the U.S. now operate on Macintosh systems.

In late 1996 Tyree mailed me a detailed set of diagrams and a lengthy narrative explaining the exact hows and whys of the murder of Danny Casolaro and an overall view of the Promis saga that is not only consistent with what is described by Seymour in The Last Circle but also provides many new details. Asked about Mike Riconosciuto for this story Tyree would say only that, "He's very good at what he does. There are very, very few who can touch him, maybe 200 in the whole world. Riconosciuto's in a class all by himself." Those documents, as later described to me by RCMP Investigator Sean McDade, proved to be "Awesome and right on the money."

The essence of those documents was that, not only had the Republicans under Meese exploited the software, but that the Democrats had also seen its potential and moved years earlier. Nowhere was this connection more clearly exposed than in understanding the relationship between three classmates from the U.S. Naval Academy: Jimmy Carter, Stansfield Turner (Carter's CIA director), and billionaire banker and Presidential kingmaker (Carter's Annapolis roommate), Arkansas' Jackson Stephens. The Tyree diagrams laid out in detail how Promis, after improvement with AI, had allegedly been mated with the software of Jackson Stephens' firm Systematics. In the late seventies and early eighties, Systematics handled some 60-70% of all electronic banking transactions in the U.S. The goal, according to the diagrams which laid out (subsequently verified) relationships between Stephens, Worthen Bank, the Lippo Group and the drug/intelligence bank BCCI was to penetrate every banking system in the world. This "cabal" could then use Promis both to predict and to influence the movement of financial markets worldwide. Stephens, truly bipartisan in his approach to profits, has been a lifelong supporter of George Bush and he was, at the same time, the source of the $3 million loan that rescued a faltering Clinton Campaign in early 1992. There is a great photograph of Stephens with a younger George "W" Bush in the excellent BCCI history, False Profits.

In the fall of 1997, Bill McCoy, having recently gone off of his heart medication was found dead in his favorite chair. In the days and weeks before he had been advised by Tyree that a Pakistani hit man, on an Israeli contract had been in the states seeking to fulfill a hit on McCoy. There had been other hints that someone closer to McCoy might do the job. Tyree recently told FTW that just before his death, he had given McCoy information on "Elbit" flash memory chips, allegedly designed at Kir Yat-Gat south of Tel Aviv. The unique feature of the Elbit chips was that they worked on ambient electricity in a computer. In other words, they worked when the computer was turned off. When combined with another newly developed chip, the "Petrie," which was capable of storing up to six months worth of key strokes, it was now possible to burst transmit all of a computer's activity in the middle of the night to a nearby receiver - say in a passing truck or even a low flying SIGINT (Signals Intelligence) satellite. According to Tyree this was the methodology used by Jonathan Pollard and the Israeli Mossad to compromise many foreign embassies in Washington.

Within 48 hours of his death Bill McCoy had been cremated and in less than four days all of Mac's furniture, records and personal belongings had been removed from his home by his son, a full Colonel in the Army. The house had been sanitized and repainted and, aside from the Zen garden in the back yard, there was no trace that McCoy had ever lived there.

Harvard and HUD

Former Assistant Secretary of Housing, Catherine Austin Fitts has had about as much ink in FTW as anyone else. A feisty, innovative thinker she has seen raging success as a Managing Director of the Wall Street investment bank Dillon Read and she has been "nuked" into near poverty after devising software strategies seeking to optimize financial data and returns for the US taxpayer. While acting as a HUD consultant in 1996, selling defaulted HUD Mortgages into the private market through her own investment bank, Hamilton Securities (no relation), she achieved unheard of taxpayer returns of around 90 cents on the dollar. In doing so she ran afoul of an entrenched Washington financial power structure feeding uncompetitively at the HUD trough.

Last month we described how Fitts devised a data optimization method using hand coding by residents of a HUD Housing project in Washington to produce Promis-like results. She successfully "mapped" the flow of HUD money and was about to create proprietary software that would make the job easier. That software would have integrated billions of pieces of disorganized HUD financial data. Suddenly, in August 1996, DoJ and HUD InspectorÕs General investigations started that seized her computers and resulted in a four-year blatantly illegal campaign to crush everything she stood for. No charges were ever brought, Fitts, her money and her data are still viciously separated.

One of the empires Fitts threatened was that of the Harvard Endowment. The Harvard Endowment is not really a benevolent university fund but an aggressive investment predator with $19 billion in assets, some from HUD subsidized housing. Harvard also has a number of other investments in high tech defense operations and had a big hand in investing George W BushÕs lackluster firm Harken Energy. "W" has a Harvard MBA. FittsÕ chief nemesis at Harvard, Herbert "Pug" Winokur, head of Capricorn Investments, and member of the board of the Harvard Endowment is also a PhD mathematician from Harvard where the mathematical breakthroughs that gave rise to Artificial Intelligence using block-modeling research were discovered. In the 60s Winokur had done social science research for the Department of Defense on causes of inner city unrest in the wake of the 1967 Detroit riots.

The pioneering research at Harvard that allegedly gave rise to the Artificial Intelligence installed in Promis later moved north. According to a Harvard website (www.analytichtech.com/mb119/chap2e.htm) "Much of the effort of the Harvard group - no longer based solely at Harvard - was centered on the International Network for Social Network Analysis (INSNA) at Toronto...". Things grew more suspicious as FittsÕ research disclosed that Winokur, through Capricorn Investments, had a decisive role in the 1980s management of the intelligence/government outsourcing mega-firm DynCorp, of Reston, VA. Winokur served as DynCorp CEO from 1989 to 1997. DynCorp handles everything for Uncle Sam from aircraft maintenance, to sheep-dipping of combat troops into private assault forces in Colombia, to the financial management of HUD records, to the maintenance of computer security at government facilities. One of DynCorpÕs most interesting contracts is with the DoJ for the financial management of assets seized in the drug war. DynCorp also counts among its shareholders former CIA Director James Woolsey. Pug Winokur made DynCorp what it is today and he still sits on the board.

In juxtaposition, Harvard and HUD differ in one striking respect according to Fitts. The Harvard Endowment has enjoyed wildly uncharacteristic above market tax-free returns for the last decade, (33% in 1999), while HUD, in the same year, was compelled to do a "manual adjustments" to reconcile a $59 billion shortfall between its accounts and the U.S. Treasury account. [This is not a typographical error]. Where did all that money go? $59 billion in an election year is a staggering amount of money. Why is no one screaming? HUD's explanation is that it was loading a new accounting system that did not work and then did not bother to balance its checkbook for over a year.

I was not surprised when Bill Hamilton confirmed to both Fitts and to me that WinokurÕs DynCorp had played a role in the evolution of Promis in the 1980s. One other surprise was to come out of FittsÕ investigations that had months earlier led her to conclude that she was up against Promis-related interests. On the very day that DoJ and HUD shut her down she was discussing software development with a Canadian firm that is at the heart of the Canadian space program, Geomatics. The term Geomatics applies to a related group of sciences - all involving satellite imagery - used to develop geographic information systems, global positioning systems and remote sensing from space that can actually determine the locations of natural resources such as oil, precious metals and other commodities.

Apparently centered in Canada, the Geomatics industry offers consulting services throughout the world in English, German, Russian, French, Arabic, Spanish and Chinese. Geomatics technology, launched aboard Canadian satellites via US, European or Japanese boosters can help developing or industrialized nations inventory and manage all of their natural resources. There are also several Geomatics related companies in the U.S. including one not far from the Johnson Space center in Houston.

This situation is custom made for enhanced Promis software with back-door technology. What better way to map and inventory all of the worldÕs resources than by making each client nation pay for the work. By providing the client nation Promis-based software it would then be possible to compile a global data base of every marketable natural resource. And it would not be necessary to even touch the resources because commodities and futures markets exist for all of them. An AI enhanced, Promis-based program would then be the perfect set up to make billions of dollars in profits by watching and manipulating the worldÕs political climate to trade in, letÕs say Tungsten futures. Such a worldwide database would be even more valuable if there were, for example, a sudden surge in the price of gold or platinum.

Bill Hamilton readily agreed that this was an ideal situation for the application of Promis technology. In furthering our research on Geomatics we discovered that almost everywhere Geomatics technology went we also found Lockheed-Martin.

Enter The Mounties

Thanks to a strong push in my direction from Cheri Seymour, the Mounties and Hercules PD Homicide Detective Sue Todd arrived at my door on August 3rd. They had already consumed most of the FTW web site and were well familiar with my writings. I had let them know, through Cheri, that I did have information on Promis from Bill Tyree and that I would be happy to share it. Before getting into details we all went out for lunch at a nearby Chinese restaurant.

In setting basic outlines for our conversations that day I indicated that, as a journalist, I viewed our discussions as off-the-record. I took no notes and did not tape record any of the discussion. I am recounting the events now only after corresponding with McDade and advising him of my intention to write. He responded and did not object. I took the same position with Detective Todd. I warned the Mounties and Todd at the outset that a sudden termination of their investigations was likely and that they would all become expendable. It happened to me once.

Over lunch the Mounties were quite candid about the fact that the RCMP had Promis software and that it even went by the name Promis. I think they may have also mentioned the name PIRS which is an acknowledged system in the RCMP network. They stated that they had been given their version of Promis by the Canadian Security and Intelligence Service (CSIS).

CSIS was an intelligence breakaway from the Mounties in 1984, intended to be a pure [sic] intelligence agency. It was created largely with the expertise and assistance of the CIA. All of us understood two things about that arrangement and we discussed them openly. First, there was a question as to whether or not any intelligence service created by the CIA could be completely loyal to its native country. Secondly, it was also understood that there was a rivalry between the two agencies similar to the one that existed between the FBI and the CIA, or in a larger context, the Clinton gang and the Bush gang in the US. The chief concern of the Mounties, clearly, was to ascertain whether or not their version of Promis was one that was compromised. McDade also described in detail how he knew that supposedly secure RCMP communications equipment had been compromised by the NSA. The Mounties acknowledged regular meetings with Cheri Seymour but evinced none of the interest she said that they had previously shown in the Mossad. With me their single-minded focus was Bill Tyree and where and how he obtained his information.

Sue Todd, confirmed for me suspicions that there was an unspoken alliance between the RCMP investigators and the FBI. She said that during the course of her three years of efforts to solve the double murder in Hercules, she had routinely visited FBI offices and enjoyed access to FBI files relative to both the Promis investigation and anything connected to her victims. That information was obviously being shared with the Mounties and that implied the blessings of the FBI. In short, a domestic law enforcement officer was sharing information with agents of a foreign government. In some cases that could provoke espionage charges but in this case it was apparently sanctioned. The Hercules murder victims had no apparent connection to Promis software in any way except for the fact that Riconosciuto had possessed knowledge about the murders which he had provided to Todd from prison. The Hercules Armament Corporation, featured in The Last Circle, was an obvious link. I also noted that the father in Todd's case had been a computer engineer with passions for both geological research and hypnosis and no other visible connections to the Promis story.

As we copied Tyree's papers and went through other materials the next day I was aware that the Canadians expressed special interest in Jackson Stephens and anything having to do with the manipulation of financial markets. They asked for copies of news reports I had showing that General Wesley Clark, the recently retired NATO Commander, has just gone to work for Stephens, Inc. in Little Rock Arkansas. I also provided documents showing that Stephens' financial firm Alltel, heir to Systematics, was moving heavily into the mortgage market. As the Mounties repeatedly pressed for information on the identity of the Sergeant Major I referred them to Tyree directly through his attorney Ray Kohlman and to Tyree's closest friend, the daughter of CIA bagman and paymaster Albert Carone, Dee Ferdinand. [For more on Carone visit the FTW web site].

McDade did eventually contact Ferdinand by phone and shortly thereafter one of the most bizarre twists in the whole story took place.

About a week after meeting the Mounties I heard back from Sean that the Tyree documents and flow charts from 1996 had been right on the money. A special recurring theme in those documents that meshes with Seymour's research is the fact that modified versions of Promis software with both artificial intelligence and trap doors were being smuggled out of Los Alamos nuclear labs in containers labeled as radioactive waste. According to Tyree and other sources, after an Indian reservation, the safest place in the world that no one will ever break into is a nuclear waste dump. This also applies to containers in transit between countries. The radioactive warning label guarantees unmolested movement of virtually anything. Promis software is apparently no exception.

Bill Casey and Al Carone from the Grave

Albert Vincent Carone has also been covered exhaustively in FTW, both in the newsletter and on the web site. A retired NYPD Detective, also a made-member of the Genovese crime family, Carone spent his entire working career as a CIA operative. (FTW has special reports on both Bill Tyree and Al Carone available from the web site or at the end of this newsletter). For more than 25 years before his mysterious death in 1990, Al Carone served as a bagman and liaison between George Bush, CIA Director Bill Casey, Oliver North, Richard Nixon and many other prominent figures including Robert Vesco, Manuel Noriega and Ferdinand Marcos. The Carone-Tyree connection, covered in detail in the Sept. 1998 issue (Vol. I, No.7) goes back to operations in the mid 1970s when Tyree, serving with the Special Forces, engaged in CIA directed missions for which Carone was the paymaster.

Carone's death from "chemical toxicity of unknown etiology" in 1990 resulted in the sanitizing of all of his military and NYPD records as well as the theft and disappearance of nearly ten million dollars in bank accounts, insurance policies and investments. Virtually overnight, almost every record of Carone disappeared leaving his daughter and her family nearly bankrupt under the burden of tens of thousands of dollars in medical bills. In 1996, Carone's daughter, Dee Ferdinand, discovered that Tyree and Carone had known each other and that Tyree could prove instrumental in helping to restore Carone's lost fortune. Ferdinand filed suit in U.S. District Court this spring seeking to recover pensions, insurance policies and benefits in a case which has no known connection to Promis. I have known Ferdinand and her family for more than seven years. Never once has she mentioned a connection between her father and Promis although she was well familiar with the case from Tyree and conversations with Bill Hamilton. I had referred the Mounties to her because of my belief that she could possibly help identify Tyree's source, the Sergeant Major.

On August 10th, exactly one week after the Mounties came to see me, the DoJ mailed Ferdinand a response to her suit seeking dismissal. Included in the paperwork was a bizarre document, now in FTW's possession, that, by the account of both Ferdinand and her lawyer, had absolutely nothing to do with her case. The document in question was a March 29, 1986 Declaration from CIA Director William Casey, a close friend of the Carone family. Paragraph 6 of that document (prepared for another case) stated, "Two of the documents responsive to Plaintiffs' Request No 1, specifically the one-page letter dated 28 March 1979 and a one-page letter dated 8 January 1980, have been released in the same excised form as they were previously released by the Government of Canada. I independently and formally assert the state secrets privilege for the information excised from these two documents."

Dee Ferdinand called me immediately. The letter had nothing to do with her suit. It mentioned Canada. Canada was not even mentioned in her suit. What was going on?" she asked. "It's blackmail," I answered. "CIA, which is monitoring everything the Canadians do, everything I do, everything you do, knows that I will tell the Mounties of these letters." McDade didn't grasp the concept at first. He was a straight-ahead street cop. But I had been through something similar when serving as the press spokesman for the Perot Presidential campaign in 1992. I explained it to Sean, "Sean, you and I are just the messengers. But I guarantee that at some level of your government the CIA's reference to these letters will scare people to death. It is a reminder that CIA has them."

A week later McDade told me that the dates were indeed significant - very significant. That's all he would say.

FTW has what may be a possible explanation for the dates in question. The President and CIA Director on these dates the letters were written were Jimmy Carter and Stansfield Turner. Aside from the then recent Russian invasion of Afghanistan, a saga in which the Canadian government played a minor role, the largest drama on the world scene was the overthrow of the Shah of Iran in January 1979, the rise of the Ayatollah Khomeini and the seizure of the U.S. Embassy in Teheran later that year. The Canadian government and the CIA worked very closely in Iran, the Canadian Embassy even housing some CIA personnel who had escaped the crowds of students. But that kind of assistance is not something to hide. Another explanation was needed to explain shock waves in Ottawa.

Recently, a source using a code name known to FTW has surfaced with information relating to Promis. In his communiqués he describes the use of Promis software by the Bush family to loot the secret bank accounts of Manuel Noriega and Ferdinand Marcos. Promis is able to do this because funds can be transferred out of accounts without a trace. Remember the trap door? The rule of thumb here is that crooks, especially CIA sponsored crooks, don't usually go to the cops when somebody steals their stolen money. From my personal experience in the era, and direct exposure to two members of the Iranian Royal family, both before and after the overthrow, I am acutely aware that the Shah, then perhaps the richest man in the world, was actually targeted by the CIA. His downfall was no accident. Once worth more than $20 billion, the Shah ended his life a refugee in Egypt. Many of his billions disappeared and the family was very upset about it.

Could the financial power of Promis have been turned loose first through Canada when Carter was President in the US? The Shah did a lot of banking in Canada. We may never know the answer. But if the downfalls of wealthy US supported dictators Noriega and Marcos are any indication the answer is likely, yes. And the Shah was wealthier than both of them put together. Where'd all that money go?

Headlines

On August 25th the Toronto Star broke what was to become a series of stories by Valerie Lawson and Allan Thompson. The cat was out of the bag. Various figures known to have direct connections to Riconosciuto had been virtually dogging the Mounties' every move as they traveled in the US. One even contacted me just days after the Mounties left LA. It was a story that could not be kept under wraps forever. Most of the Star story was accurate. It was going to be difficult for the RCMP to move quietly now. A Reuters story the same day closed with the following paragraphs, "CanadaÕs national counterintelligence agency said in a June report that friendly nations were making concerted efforts to steal sensitive technology and information.

"The Canadian Security Intelligence Service said outsiders were particularly interested in aerospace, biotechnology, chemicals, communications, information technology, mining and metallurgy, nuclear energy, oil and gas, and the environment." That was Geomatics, at the heart of Canada's space program, Canada's flagship space technology. I checked the Star story. There had been no mention of high tech or space related issues. What did Reuters know? In mid September, after receiving confidential source documents related to the case telling me that one version of Promis, modified in Canada was handled through the Canadian firm I.P. Sharp, I got an answer. A quick search on the web revealed that Sharp, a well documented component of the case, had been bought by a Reuters company in the early 90s. Hamilton later told me that he had heard that Reuters possibly had the Promis software. That would explain how they knew about the aerospace connection.

Michael Dobbs of The Washington Post called and asked what I knew. I confirmed that I had met with the Mounties but didn't know much else other than giving them the Tyree flow charts. The Post was never going to tell the truth. Their business was keeping secrets, not revealing them. The Mounties had made waves.

On August 28 the phone rang and it was a collect call from Tyree. "Get a tape recorder and turn it on," he said. Over the course of the next half an hour Tyree, obviously reading from detailed and copious notes, named individuals and companies dealing with Promis software and its progeny. The tape was specific down to naming specific engineers in military and private corporations doing Promis research. Tyree described specific Congressional committees that had been infiltrated with "enhanced" Promis. Tyree described how Promis progeny, having inspired four new computer languages had made possible the positioning of satellites so far out in space that they were untouchable. At the same time the progeny had improved video quality to the point where the same satellite could focus on a single human hair. The ultimate big picture.

Promis progeny had also evolved to the point where neural pads could be attached to plugs in the back of the human head and thought could be translated into electrical impulses that would be equally capable of flying a plane or wire transferring money. Names like Sandia, Cal-Tech, Micron, Tech University of Graz, Oded Leventer and Massimo Grimaldi rolled from his lips as he tore through the pages of notes. Data, such as satellite reconnaissance, could also now be downloaded from a satellite directly into a human brain. The evolution of the artificial intelligence had progressed to a point where animal behavior and thought were being decoded. Mechanical humans were being tested. Animals were being controlled by computer.

Billy saved Canada for last.

"Here's how we fuck Canada," he started. He was laughing as he facetiously described what was coming as some sort of bizarre payback for the War of 1812. Then, placing the evolutions of Promis in context with the Canadian story Tyree asked a question as to why one would really now need to go to all the trouble of monitoring all of a foreign country's intelligence operations. "There's an easier way to get what I want," he said. "I access their banks. I access their banks and I know who does what and who's getting ready to do what," he said. He described how Canada had been provided with modified Promis software which Canada then modified, or thought they had modified, again to eliminate the trap door. That software turned loose in the financial and scientific communities then became Canada's means of believing that they were securing the trap door information from the entities to whom they provided their versions of Promis. But, unknown, to the Canadians the Elbit chips in the systems bypassed the trap doors and permitted the transmission of data when everyone thought the computers were turned off and secure. Tyree did not explain how the chips physically got into the Canadian computers.

"This," Tyree said "is how you cripple everything Canada does that you don't like. And if you want proof I offer you the fact that we toppled the government of Australia in 1980." "[Prime Minister] Gough Whitlam and Nugan Hand [Bank]," I answered. Tyree affirmed. The Labor Government of Whitlam had been suddenly unseated after making nationalistic noise and questioning the role of US intelligence agencies in Australian affairs.

The issue of a coming feud between the dollar and the Euro came up. I suggested that rapidly vanishing support in South America and Europe both were threatening the military operations of "Plan Colombia" and the economic boost it would give the US economy. Tyree jumped in, "If I can put Canada in line and show the Eurodollar, the 'Eurotrash' what I have already done to my neighbor, whom I value to some degree - remember, these are not nice people - these are financial thugs at their worst. So what they are going to do is sit down discreetly and say, 'Look, this is what we did to Canada. Now, would you like us to do this to the European market as well?' Mike, they're not going to think twice about itÉ A weapon is only good if someone knows what its capability is. Prior to using the atomic bomb it was irrelevant." He continued, "They refer to it as the Nagasaki Syndrome."

After describing in some detail how the financial powers-that-be had gutted American manufacturing productivity through globalization he described a strategy intended to halt any move by the Euro to overshadow the dollar or even compete with it. It was pure economic hostage taking and Canada would be the object lesson. Then, chillingly, he described something familiar to any military strategist. The penetration and looting of HUD was the test bed, the proving ground, the "White Sands" of the Promis economic Atom bomb. Once the CIA and the economic powers-that-be had proven that, over a period of years, they could infiltrate and loot $59 billion dollars from HUD, they knew that they could do it anywhere. Said Tyree, "Then they knew they had what it took to go abroad and create mayhemÉ It was planned twenty years ago."

It took several days to reach Sean McDade who had been on vacation. I played the Tyree tape for him over an open phone line into RCMP headquarters. He asked me to make a physical copy right away and send it to him. After he had had time to listen to it he cautioned me against sending it anywhere else. I told him that as long as his investigation was active that I would do nothing more than make the standard copies I make of any sensitive documents as a precaution. I could tell that the tape had rattled him. Though I had known from the start that the large and energetic Mountie, whom I believed to be a dedicated an honest man, would never be allowed to ride his case out to the end, I still had hopes. But in my heart I knew that Tyree was right. In all the years he had been feeding me information I had never known him to be wrong and, apparently, neither had Bill Hamilton. I did not send a copy of the tape to Hamilton because I knew how difficult and potentially dangerous McDade's job was going to be now that the press had exposed him. Having been a cop in dangerous political, CIA infested waters I knew what it was like to not know who you could trust.

If keeping the tape quiet would give the Mounties and edge I would do it - but only as long as they had a case.

Sudden Death

Then it was over.

On September 16th the Toronto Star announced that the RCMP had suddenly closed its Promis investigation with the flat disclaimer that it did not have and never did have any version of Bill Hamilton's software. That was as shocking a statement as it was absurd. "The only way that you can identify Promis," said a perplexed Bill Hamilton, "is to compare the code. Sean McDade said that he was not an engineer and couldn't read code so how did he know?" Hamilton was as emphatic as I was that McDade had said that RCMP had Promis. So was Cheri Seymour. I offered a fleeting hope that the Mounties were playing a game, saying that they had terminated the investigation to shake some of the incessant probing that had been taking place around McDade's every move.

I was finally convinced when McDade e-mailed me and said that it was his view that the Mounties did not have any version of Promis and that he had no objections if I decided to write a story. I then agreed with Seymour that, whether they had said so or not, both the Mounties and Sue Todd had left enough visible footprints that it was their intention for us to go public. It might be the only protection they had.

As I had predicted from the start, they had come too close to bigger issues and been shut down ruthlessly. I called Sue Todd who lamented that she was marking her three year homicide investigation, "Closed by the press." Even though she was convincing I had the feeling that she was playing back a rehearsed script. I told her that I was not satisfied with the statements that there was no Promis in the RCMP. I recalled our lunchtime conversation of August 3rd. She agreed with me that the RCMP mission was to determine whether or not RCMP Promis was a stolen or compromised version. She knew that they had it. So did I. I e-mailed McDade one last time saying that I was going to write it like I remembered it. He never got back to me.

Bill Hamilton added one last twist when he told me in a conversation that the Mounties claimed to have developed their software on their own. That, he said, was nonsense because the Mounties did not have that kind of sophistication or ability. He thought that the RCMP program had been specially prepared FBI. That would explain the role of retired FBI agent Ted Gunderson. Though I didn't tell him at the time I knew that he had obtained that information from Bill Tyree. And Bill Tyree and his provider, the Sergeant Major, are two people that Bill Hamilton and I both have learned to respect.

Diplomacy

Just three days after the Toronto Star announced the abrupt termination of the RCMP investigation the Canada based International Network on Disarmament and Globalization (INDG) posted an electronic bulletin on a speech by former Canadian Ambassador to the US. In an address the night before, less than 48 hours after the termination of the RCMP investigation, Derek Burney, current President of CAE, a Canadian firm manufacturing flight simulators, criticized the U.S. aerospace industry for being overly-protectionist under the guise of national security. In addressing the Aerospace Industries Association of Canada, according to large stories that appeared in CP (Canadian Press) and Toronto's Globe and Mail, Burney was characterized as sounding unusually tough in his criticism of American policy that was freezing Canadian firms out of aerospace contracts. Both stories were ambivalent in that they alternately made Burney sound critical of the U.S. while championing Canadian interests and at the same time weak as he noted that Mexico stood poised under NAFTA to replace Canada as the U.S.'s number one trading partner.

The CP story made two telling observations. It quoted Burney as saying that Canada needed to do more to "preserve and enhance its access to the American market." Then it closed it's story on Burney's speech, advocating a compromise agreement between the US and Canada, by saying that Burney's position "risks being perceived here at home as a sellout or worse."

A close examination of Burney's remarks, published in the INDG bulletin revealed something more like an obsequious surrender rather than a mere sellout. While there were a few tough-talking paragraphs that saved Canadian face, the essence of the speech was that Burney believed that American defense firms, the largest of which is Lockheed-Martin, were poised to transfer the bulk of their contracts to companies in Mexico. Citing Canada's dependence upon access to American avionics and "databases," Burney painted a picture that seemingly left Canada over a barrel. Without access to American technology the Canadian aerospace industry could not function.

Buried deep in the text of Burney's speech we found the following paragraph which is, we believe, the best place to end this story.

"That does not mean that we have to agree with everything Washington does or says or do things exactly as the Americans do. On the contrary, one of the advantages of being a good neighbor and close ally is that we can speak freely and forthrightly to the Americans - provided we have a solid case and are seeking to influence their position and not simply capture a quick headline. And, never forget, it is always more effective to be frank in private. Otherwise your motive can be somewhat suspect."

Bin Laden's Magic Carpet - Secret U.S. PROMIS Software

FBI/Justice Claims of Discontinued Use Leave Questions Unanswered

Britain and Germany in the Lurch?

Did bin Laden Use It To Break White House Codes And Threaten
Air Force One?

by Michael C. Ruppert

[© Copyright 2001, Michael C. Ruppert and From The Wilderness Publications, www.copvcia.com. All Rights Reserved. May be recopied or distributed for non-profit purposes only. May NOT be posted on any commercial or ".com" website without prior written authorization. Violations subject to legal action.]

FTW, October 26, 2001 - 1300 PDT (UPDATED Nov. 16, 2001) - An October 16 FOX News report by correspondent Carl Cameron indicating that convicted spy, former FBI Agent Robert Hanssen, had provided a highly secret computer software program called Promis to Russian organized crime figures - who in turn reportedly sold it to Osama bin Laden - may signal a potential intelligence disaster for the United States. Admissions by the FBI and Justice in the FOX story that they have discontinued use of the software are most certainly a legal disaster for a government that has been engaged in a 16-year battle with the software's creator, William Hamilton, CEO of the Inslaw Corporation. Over those 16 years, in response to lawsuits filed by Hamilton charging that the government had stolen the software from Inslaw, the FBI, the CIA and the Department of Justice have denied, in court and under oath, ever using the software.

Bin Laden's reported possession of Promis software was clearly reported in a June 15, 2001 story by Washington Times reporter Jerry Seper. That story went unnoticed by the major media. In it Seper wrote, "The software delivered to the Russian handlers and later sent to bin Laden, according to sources, is believed to be an upgraded version of a program known as Promis - developed in the 1980s by a Washington firm, Inslaw, Inc., to give attorneys the ability to keep tabs on their caseloads. It would give bin Laden the ability to monitor U.S. efforts to track him down, federal law-enforcement officials say. It also gives him access to databases on specific targets of his choosing and the ability to monitor electronic-banking transactions, easing money-laundering operations for himself or others, according to sources."

In a series of excellent stories by The Times, and as confirmed by parts of the FOX broadcast, it appears that Hanssen, who was arrested in February, in order to escape the death penalty this summer, agreed to provide the FBI and other intelligence agencies with a full accounting of his sale of Promis overseas. Reports state that almost until the moment of his capture, Hanssen was charged with "repairing" and upgrading versions of the software used by Britain and Germany.

On October 17, two different spokespersons at the FBI's Office of Public Affairs told FTW, "The FBI has discontinued use of the Promis software." The spokespersons declined to give their names.

On October 24, Department of Justice spokesperson Loren Pfeifle declined to answer any questions about where, when or how Promis had been used and would say only, "I can only confirm that the DoJ has discontinued use of the program."

INSLAW had two limited contracts to provide Promis to Justice in 1982 and 1983. Neither application had anything to do with tracking terrorist activities. Hamilton's suits charged that Reagan Administration officials, including Edwin Meese, pirated the software, modified it for intelligence and financial uses and made millions by selling it to the governments of Israel, Canada, Great Britain, Germany and other friendly nations. After the installation of a CIA-created "back door" into the program, Israel, using its lifelong Mossad agent Robert Maxwell, reportedly sold the software to "unfriendly" nations and then secretly retrieved priceless intelligence data.

The statements of FBI and Justice sources in the FOX story on October 16 have made Hamilton's case. They also give but the barest hint of the security breaches that may now be helping the most wanted man in the world. Bin Laden's reported possession of Promis may also explain the alleged threatening messages that were received by President Bush while aboard Air Force One on September 11th.

A mild uproar erupted in the days after the WTC attacks when Presidential aide Carl Rove indicated that threatening calls had been placed to Air Force One just hours after the attacks while President Bush was onboard. Some journalists excoriated Rove for suggested that bin Laden might have a mole in the White House who could have given him the secure codes to reach the aircraft in flight.

Bin Laden's possession of Promis would provide a possible explanation. According to Hamilton, under the right circumstances, Promis could have enabled the threatening calls to be made. "I have no way of knowing whether any Promis-related base has dial-up access to Air Force One. But if that happens, and if you have Promis, it's a straightforward thing to do. But one would still need to have access to the targeting computer.

"There is a central locator system to track members of the National Command Authority 24/7. If that is a database created with Promis and if anyone had access you could do it."

Such a penetration using Promis might also explain why Vice President Dick Cheney was hurriedly whisked out of sight and reportedly taken to a secure underground facility, where he reportedly works to this day. Cheney's prolonged absences from the public eye would also be explained by such a breach of security.

Numerous news stories, books and investigative reports, including a September 2000 story in FTW (Vol. III, No.7), spanning nearly two decades, have established that Promis holds unique abilities to track terrorists. The software has also, according to numerous sources including Hamilton, been modified with artificial intelligence and developed in parallel for the world's banking systems to track money movements, stock trades and other financial dealings. Systematics - since purchased by Alltel - an Arkansas financial and technical firm headed by billionaire Jackson Stephens, has often been reported as the primary developer of Promis for financial intelligence use. Systematics through its various evolutions had been a primary supplier of software used in inter-bank and international money transfers for many years. Attorneys who have been connected to Systematics and Promis include Webster Hubbell, Hillary Clinton and the late Vince Foster.

If true, and if claims by the FBI and the Department of Justice that they have "recently" discontinued the use of Promis are accurate, the likelihood than bin Laden may have compromised the systems the U.S. government and its allies use to track him is high. Additional information in the FOX broadcast indicating that Britain stopped using the software just three months ago and that Germany stopped using the software just weeks ago are equally disturbing. These are mission-critical systems requiring years of development. What has replaced them? And even if the U.S. government has replaced the software given to its allies with newer programs - several of which FTW knows to be in existence - the FOX report clearly implies that bin Laden and Associates have had ample time to get highly secret intelligence data from both Britain and Germany. Those systems might, in turn, have compromised U.S. systems. The WTC attacks had - by all reckoning - been in the works for years, and bin Laden would certainly have known that the U.S. would be looking for him afterwards.

WHAT IS PROMIS AND WHAT DOES IT DO?

PROMIS stands for Prosecutor's Management Information System.

In the late 1970s the legal system of the United States Department of Justice (DoJ) was comprised of more than thirty semi-autonomous regional U.S. Attorneys (USA) offices. Each had a computer system to track case management for prosecutions, investigations, and civil litigations. The problem was that they used as many as seven different programming languages. This made the transmission and sharing of information between offices virtually impossible. The computers in the USA's office in San Francisco could not read files sent from the USA in New York.

The genius of Hamilton and Inslaw was to create a software program that could access files in any number of databases and programming languages and translate and then unify them into one consistent file. Promis was the Rosetta stone of computer languages.

Inslaw won a $10 million, three-year contract in March 1982 to install a 16-bit architecture version of Promis, which the government had the right to use but not the right to modify without paying license fees to Inslaw, on government computers in the 22 largest U.S. Attorneys' Offices. In April 1983, the second year of the three-year contract, the government modified Inslaw's contract in order to obtain delivery of a 32-bit architecture version of Promis, which the government could not even use without paying license fees. In modifying the contract, the government promised to pay license fees if it decided to substitute the 32-bit version for the 16-bit version. In May 1983, the month following Inslaw's delivery of the 32-bit version of Promis, the government reneged on its contractual agreement to pay license fees and simultaneously began to find fault with Inslaw's implementation services as justification for withholding services payments.

The Justice Department thereafter withheld $1.77 million in services payments forcing Inslaw to file for Chapter 11 bankruptcy protection in February 1985.

In January 1988, following several weeks of trial in 1987, the U.S. Bankruptcy Court issued fully litigated findings of fact that the Justice Department "took, converted, stole" the 32-bit version of Promis "through trickery, fraud and deceit," implemented the 32-bit version of Promis in the 44 largest U.S. Attorneys Offices, and then tried to force INSLAW out of business in order to incapacitate INSLAW from litigating the Justice Department's theft of Promis. The Bankruptcy Court imposed a compulsory license on the 44 largest U.S. Attorneys Offices for the perpetual use of the 32-bit version of Promis and issued a permanent injunction against any further dissemination of Promis by the government except under license from Inslaw.

Subsequent appeals by the government saw the original rulings overturned on legal, not factual, grounds. Legal actions in the case continue to this day.

Hamilton told FTW that none of the uses described above had anything to do with any licensing agreements for the software's use to track terrorists, intelligence matters or worldwide financial transactions.

The paper tracking of the refinements in Promis after the legal dispute erupted between INSLAW and the Reagan administration, verifies that at least one version of Promis was given to Martin Marietta, now Lockheed-Martin, which is now the nation's second largest defense contractor. Until late 2000, Lynne Cheney, the wife of Vice President Dick Cheney sat on Lockheed's board of directors. Research conducted by many investigative journalists has indicated that Promis has spread widely throughout the defense contractor network. FTW has received multiple reports of Promis use by companies and institutions like DynCorp, Raytheon, Boeing, SAIC and the Harvard Endowment as well as by government agencies such as the Financial Criminal Enforcement Network (FINCEN) and the U.S. Treasury.

Here's how powerful the software is.

Approximately two weeks after the September 11 attacks on the World Trade Center and the Pentagon, the History Channel aired a documentary entitled "The History of Terrorism." In that documentary, a law enforcement officer described some of the methods used to track terrorist movements. He stated that "computers" were able to track such things as credit card purchases, entry and exits visas, telephone and utility usage etc. It was implied that these diverse data base files could be integrated into one unified table. He gave an example that through the use of such a system it would be possible to determine that if a suspected terrorist entered the country and was going to hide out, that by monitoring the water and electrical consumption of all possible suspects in a given cell, it would be possible to determine where the terrorist was hiding out by seeing whose utility use increased. Conversely, it would be possible to determine if a terrorist was on the move if his utility consumption declined or his local shopping patterns were interrupted. Aren't those "club" cards from your supermarket handy?

This is but the barest glimpse of what Promis can do. Mated with artificial intelligence it is capable of analyzing not only an individual's, but also a community's entire life, in real time. It is also capable of issuing warnings when irregularities appear and of predicting future movements based upon past behavior.

In the financial arena Promis is even more formidable. Not only is it capable of predicting movements in financial markets and tracking trades in real time. It has been reported, on a number of occasions, to have been used, via the "back door" to enter secret bank accounts, including accounts in Switzerland and then remove the money in those accounts without being traced. Court documents filed in the various INSLAW trials include documentation of this ability as well as affidavits and declarations from Israeli intelligence officers and assets.

The one essential weakness of Promis is that it must be physically installed on a targeted computer for it to be effective. Hence, if Osama bin Laden is able to penetrate a U.S. Government system it must mean that Promis is there.

FTW has previously reported that the CIA uses Promis to track stock trades in real time. Thus, as described in FTW stories on insider trading directly connected to the September 11 attacks, the Agency had the ability to determine that immediate impending attacks were planned against both American and United Air Lines. The Israeli Herzliyya Institute for Counterterrorism was able to publish a detailed accounting of the trades within days of the attacks and their report underscores the connection between counterterrorist efforts and the monitoring of financial markets. [See FTW

Vol. IV, No 7 - Oct. 15, 2001] Suspicions of CIA advance knowledge of the attacks were heightened when FTW disclosed that the current Executive Director of the CIA, A.B. "Buzzy" Krongard was, until 1998, the CEO of A.B. Brown, the company which handled many of the suspicious trades.

All of these abilities were a given when this writer met with members of the RCMP National Security Investigation Section in the summer of 2000. Our meetings were reported in the Toronto Star and are described in the previously referenced issue of FTW. A key question that lingered after the meetings with the RCMP was how many versions of the software had the CIA and the U.S. government given out and might they not have been also using a back door against "friendly" nations for economic motives to give advantage to U.S. companies. It was not a question that the RCMP dismissed as unlikely.

In another mind boggling development, on November 10 The Calgary Sun reported: U.S. police said many of the suspected al-Qaida terrorists were nabbed through the use of a state-of-the-art computer software program called Promis The system interfaces with any database and can provide information on credit card, banking, pension, tax, criminal and immigration records. Police can input an alleged terrorist name or credit card and the software will provide details of the person's movements through purchases or phone records." After so many years of denials these public confirmations that Promis is widely in use must come as a relief to Hamilton who now can walk into court and reopen his case. But they also indicate that newer generations of software have likely replaced the legendary program that has been connected with so much death, intrigue and mystery.

The FOX story reported that Osama bin Laden once boasted that his youth "knew the wrinkles of the world's financial markets like the back of their hands and that his money would never be frozen." He may be right. And an administration so lost in covering up criminal conduct - no less than the conduct of the ones which preceded it -- while trying to fight a war at the same time -- might find itself doubly wounded by the software of Bill Hamilton and Inslaw.

Suggested Reading:

- The Washington Times - Search Archives for "Promis"

- Insight Magazine - a four part series by investigative reporter Kelly O'Meara located at http://www.insightmag.com/archive/200101307.shtml. If the link is broken, do an archive search from their main web page at www.insightmagazine.com.

- "The Last Circle" - An online e-book by Carol Marshall located at http://www.lycaeum.org/books/books/last_circle/.

- "Trail of The Octopus" - by Lester Coleman, 1993, Bloomsbury Publishing, London. This book is almost impossible to find and FTW is unable to direct readers to a good source for obtaining it.

- The Inslaw Affair - http://www.webcom.com/~pinknoiz/covert/inslaw.html. Includes Congressional testimony supporting Inslaw and a record of court proceedings.

- FTW: Vol. IV, No 7 - Oct. 15, 2001 -

http://www.fromthewilderness.com/free/pandora/052401_promis.html

__

FROM: Garby Leon

Columbia Pictures

Culver City, CA

July 14, 1993

TO: The Honorable Janet Reno

Attorney General of the United States

Department of Justice - Room 4400

Tenth and Constitution Ave N.E.

Washington, DC 20530

Dear Madame Attorney General,

I am writing because I feel the death of Paul Wilcher deserves your most serious attention, and should be investigated by your most trusted officials in the Department of Justice.

Paul Wilcher, like Danny Casolaro, was investigating possible government involvement in a variety of questionable activities, including the controversial October Surprise allegations and the INSLAW case,

his researches leading him into areas that Casolaro had covered earlier. In his quest Wilcher made himself known in and around Capitol Hill as a persistent gadfly, trying to spur inquiries into possible

government malfeasance in several areas. He had contacts with, among others, Lee Hamilton, William Webster, Elliot Richardson and Ross Perot.

By late May, Wilcher said his information had gone beyond Casolaro's and he felt this made him a da"danger signal.U In three weeks, he was dead.

I feel that the two deaths, Casolaro's and Wilcher's, offer disturbing parallels, outlined below.

On the 23rd of June, 1993, the body of Paul Wilcher was discovered in his Washington DC apartment. This is not a certainty, since to my knowledge no evidentially identification--no fingerprint or dental

x- ray matching-- was made before the body's reported cremation two weeks ago.

Present at the scene after Wilcher's death was noted White House correspondent Sarah McClendon, who knew Wilcher well and who had alerted authorities that he was missing. McClendon was unable to

identify the body as Wilcher after viewing the remains.

McClendon has been told that preliminary autopsy results have found "no natural cause of death, and no other cause of death to explain Wilcher's demise. Given that Wilcher, in his 40s, was in apparent

good health, this seems fairly astonishing.

A much larger issue is also implied here: if critics of our government are found dead in their bathrooms from obscure causes, and the government itself doesn't take steps to find out why, then our freedoms

themselves are threatened--as well as the activities that protect those freedoms.

If individual investigation and criticism of government activities is chilled or intimidated into silence, then democracy loses its most important protection.

To put it another way, if Danny Casolaro's death was a message of some kind, then Wilcher's death is an even grimmer message--it suggests that Casolaro's death was not a fluke. Anyone inspired to follow

Casolaro or Wilcher's path now has a strong added reason to fear doing so.

And a real investigation into Wilcher's death might not be an academic exercise. One person who is extremely close to and knowledgeable about the Casolaro case has said in private that the mystery of

Casolaro's death could be resolved by a Grand Jury investigation, with sworn testimony, subpoena power, etc. This suggests Paul Wilcher's death may not have to remain a mystery either.

Paul Wilcher was an acquaintance of mine. He was not a perfect person; he made mistakes like anyone else but he was also, at times, a man of unusual energy and altruism. A seminary student who

considered becoming a priest, he later became an attorney is his efforts to accomplish some good in this world.

Overall, I fell he was a good man. He didn't deserve to die.

Personally, I don't believe he died of natural causes.

In the following pages are brief remarks regarding A) disturbing parallels between the Casolaro and Wilcher cases; B) Police, FBI and CIA presence at the scene; C) other information about Wilcher's

death; and D) possible further forensic investigation.

Mme. Attorney General, I feel the death of Paul Wilcher offers too many questions and inconsistencies to be ignored. I am writing because I feel this matter deserves your most serious attention,and hope

this letter will bring some action on your part to answer some of the many, very troubling questions raised by Paul Wilcher's death.

Sincerely,

Garby Leon

(PhD, Harvard University)

DISTURBING PARALLELS BETWEEN THE WILCHER AND CASOLARO CASES:

Both were investigating possible government involvement in illegal activities.

Each was acting on his own, with dogged persistence, over a long time period.

Both Casolaro and Wilcher expressed fears, shortly before their deaths, that their lives were in danger because their investigations had led into sensitive territory. Casolaro was known to have received direct

phone call threats, and told his brother shortly before he died, "If something happens to me, it won't be an accident."

As stated, Wilcher told at least one other person at the end of May that he feared he'd become a "danger signal" because his information on government malfeasance had gone beyond Casolaro's. In three

weeks he was dead.

Both decedents' bodies were found in bathrooms, in bizarre circumstances (Casolaro a supposed suicide though forensic evidence cast substantial doubt on this; Wilcher, a man in good health, propped up

on a toilet but showing no discernible cause of death).

In both cases, the scene of death was sealed off and made inaccessible, then cleaned, preventing any further official or independent investigation (the motel room where Casolaro was found was industrially

cleaned the next day; Wilcher's apartment was sealed off and no one was allowed to enter; it was also cleaned the next day. I am unaware of any subsequent, serious investigation or crime report released to

the public in either case).

In both cases, personal records, documents, computer files and/or other information belonging to the decedents are apparently not officially accounted for. Casolaro's briefcase and personal records were not

found at the scene of his death. While Wilcher's family reportedly has taken possession of some personal belongings, the location of Wilcher's complete files, the result of years of hard work, is not

publicly known.

In both cases, rapid alterations were made to the corpse making further forensic study difficult or impossible. Casolaro was embalmed shortly after death without family consent; Wilcher was cremated, as

remarked above, without fingerprint or other evidential identification of the body, and without complete forensic examination to determine cause of death.

In both cases, forensic evidence relating to the corpses is scant.

In neither case was any kind of inquest held, no official testimony taken under oath, nor was any thoroughgoing official investigation undertaken (at least publicly). Nor has any official report been released

in either case.

POLICE, FBI & CIA PRESENCE AT THE SCENE, JUNE 23, 1993:

According to Mr. MASON O. LIDELL JR. (637 Third St. NE, Apt. B-03, DC 20002) superintendent of Wilcher's building, a Lieutenant and a Sergeant from the D. C. Police (with the help of firemen to

force the door) entered Wilcher's apartment at about 11:30 AM on June 23rd. Three detectives from DC Police entered and found Wilcher's computer was turned on. When they read what was on the

computer screen, they summoned the FBI. There is no further information on what the screen actually said.

After entering the apartment and getting a brief glance at the body and the apartment, Lidell was ordered to leave. The apartment was sealed off for the rest of the day, except for official personnel. The body

was removed at about 12:30 according to Lidell (who didn't witness this), though he did mention that when he entered the apartment later, there was blood on the floor and on the commode which wasn't

present earlier. He was told that this was because of measures taken to move the body.

At about 4:30 in the afternoon FBI Agents arrived. Sarah McClendon was also present, though not allowed in the apartment itself. She says two groups of four FBI Agents - eight FBI Agents in all - arrived

and asked questions. McClendon checked their identification, which seemed convincing. According to Lidell at least three FBI Agents entered the apartment during the 4:30 to 7:30 time period.

Then, according to Lidell, one man appeared and said he was CIA (without offering identification). He joined the FBI agents in the Wilcher apartment during the 4:30 to 7:30 time period. More people

could have entered during this time Lidell says "he returned to his own apartment and didn't keep track."

Lidell says that an NBC camera crew was prevented from entering the apartment. Aside from firemen, medical personnel to remove the body and the above Government agents, no one was allowed in the

apartment for the entire day - no reporters, friends, media crews, etc. This raises a question: why no other observers, since police okayed cleaning of the apartment the very next day?

Ms. McClendon phoned the FBI to ask about the presence of FBI Agents; later MR. JAMES V. DESARNO JR., Assistant Special Agent in Charge from the D. C. Metropolitan Office, arrived. Mr.

Desarno also asked questions, but strongly denied that the FBI was interested in or involved in the case. "We are not interested in this case," he told McClendon, Lidell and others repeatedly.

This seems curious. If Wilcher was a "nobody" why the official presence and vehement expression of non-involvement "ironic" with so many agents present? How could Desarno know the FBI would or

wouldn't be involved without an investigation or known cause of death? Why all the secrecy and denial? Why the presence of the CIA?

OTHER INFORMATION ABOUT WILCHER'S DEATH

Only a few slight pieces of information have filtered down about public officials and others involved in the Wilcher matter:

Two FBI Agents present at the scene were JAMES V. DESARNO, as remarked, and CRAIG OLSON, both of the D. C. Metropolitan Office: 1900 Half Street SW, Washington DC 20535. (202)

252-7801, both at same address and office.

The DC police officer in charge of investigating the Wilcher death is named BRIAN HENRY, (202) 727-4347.

Coroner for the government is a DR. KIM, who performed the autopsy, the results of which have not been released.

Building superintendent MASON LIDELL (202-543-2751) was questioned by Desarno and others, and has kindly provided information in this letter.

One friend of Wilcher's phoned apartment 302 in Wilcher's building (across from his) and got a taped answer message on the telephone intercom. The message said (paraphrasing) "This is a government

telephone line, no longer in service" or words to that effect. Phone records, occupancy etc. from this address should be investigated.

POSSIBLE FURTHER FORENSIC INVESTIGATION:

Given the inconclusive autopsy results, further testing of the forensic evidence would seem to be crucial. Wilcher's body fluids, sent by the D. C. Medical Examiner to the Armed Forces Institute of

Pathology at Walter Reed Hospital, haven't yielded any clue as to cause of death. Apparently coroner Dr. Kim is still in possession of Wilcher's heart.

Sarah McClendon is petitioning Dr. JOYE CARTER of the D. C. Medical Examiner's office to submit this forensic evidence for further study. Dr. Carter hasn't moved with alacrity to permit or facilitate

this.

McClendon would like to submit the evidence to a DR. MASON, one of the top forensic toxicologists in the U. S. (Dr. Mason: 2300 Stratford Ave, Willow Grove, Pennsylvania, 215 657-4900). Dr.

Mason feels it is extremely significant that no cause of death has been found, a rarity in his experience.

*****

Perhaps, Mme. Attorney General, you can aid in investigating this and other crucial aspects of Paul Wilcher's death. Thank you for any consideration in response to this request

Garby Leon.

THE INSLAW AFFAIR



SEPTEMBER 10, 1992.-Committed to the Committee of the Whole

House on the

State of the Union and ordered to be printed



Mr. BROOKS, from the Committee on the Judiciary, submitted

the following

INVESTIGATIVE REPORT

together with

DISSENTING AND SEPARATE DISSENTING VIEWS

BASED ON A STUDY BY THE FULL COMMITTEE

On August 11, 1992, the Committee on the Judiciary

approved and adopted a report entitled, '"The INSLAW Affair." The chairman was directed to transmit a copy to the Speaker of the House.



I. SUMMARY



The Department of Justice has long recognized the need for a standardized management information system to assist law enforcement offices across the country in the recordkeeping and tracking of criminal cases. During the 1970's, the Law Enforcement Assistance Administration (LEAA) funded the development by INSLAW1 of a computer software system called the Prosecutor's Management Information System or PROMIS. This system was designed to meet the criminal prosecutor workloads of large urban jurisdictions; and by 1980, several large U.S. attorneys offices were using the PROMIS software. At this time, INSLAW (formerly called the Institute for Law and Social Research) was a nonprofit corporation funded almost entirely through Government grants and contracts. When President Carter terminated the LEAA, INSLAW converted the company to a for- profit corporation in 1981 to commercially market PROMIS. The new corporation made several significant improvements to the original PROMIS software and the resulting product came to be known as INSLAW's proprietary Enhanced PROMIS. The original PROMIS was funded entirely with Government funds and was in the public domain. In March 1982, the Justice Department awarded INSLAW, Inc., a $10 million, 3-year contract to implement the public domain version of PROMIS at 94 U.S. attorneys' offices across the country and U.S. Territories. While the PROMIS software could have gone a long way toward correcting the Department's longstanding need for a standardized case management system, the contract between INSLAW and Justice quickly became embroiled in bitterness and controversy which has lasted for almost a decade. The conflict centers on the question of whether INSLAW has ownership of its privately funded "Enhanced PROMIS." This software was eventually installed at numerous U.S. attorneys' offices after a 1983 modification to the contract. While Justice officials at the time recognized INSLAW's proprietary rights to any privately funded enhancements to the original public domain version of PROMIS, the Department later claimed that it had unlimited rights to all software supplied under the contract. (See section of report entitled, "The Department Misappropriated INSLAW Software.'")

INSLAW attempted to resolve the matter several times but was largely met with indifference or hostility by Department officials. Eventually, the Department canceled part of the contract and, by February 1985, had withheld at least $1.6 million in payments. As a result, the company was driven to the brink of insolvency and was threatened with dissolution under chapter 7 of the bankruptcy laws. Department officials have steadfastly claimed the INSLAW controversy is merely a contract dispute which has been blown out of proportion by the media. INSLAW's owners, William and Nancy Hamilton, however, have persisted in their belief that the Department's actions were Part of a high level conspiracy within Justice to steal the Enhanced PROMIS software.

A. INSLAW ALLEGATIONS

Based on their knowledge and belief, the Hamiltons have alleged that high level officials in the Department of Justice conspired to steal the Enhanced PROMIS software system. As an element of this theft, these officials, who included former Attorney General Edwin Meese and Deputy Attorney General Lowell Jensen, forced INSLAW into bankruptcy by intentionally creating a sham contract dispute over the terms and conditions of the contract which led to the withholding of payments due INSLAW by the Department. The Hamiltons maintain that, after driving the company into bankruptcy, Justice officials attempted to force the conversion of INSLAW's bankruptcy status from Chapter 11: Reorganization to Chapter 7: Liquidation. They assert that such a change in bankruptcy status would have resulted in the forced sale of INSLAW'S assets, including Enhanced PROMIS to a rival computer company called Hadron, Inc., which, at the time, was attempting to conduct a hostile buyout of INSLAW. Hadron, Inc., was controlled by the Biotech Capital Corporation, under the control of Dr. Earl Brian, who was president and chairman of the corporation. The Hamiltons assert that even though the attempt to change the status of INSLAW's bankruptcy was unsuccessful, the Enhanced PROMIS software system was eventually provided to Dr. Brian by individuals from the Department with the knowledge and concurrence of then Attorney General Meese who had previously worked with Dr. Brian in the cabinet of California Governor Ronald Reagan and later at the Reagan White House. According to the Hamiltons, the ultimate goal of the conspiracy was to position Hadron and the other companies owned or controlled by Dr. Brian to take advantage of the nearly 3 billion dollars, worth of automated data processing upgrade contracts planned to be awarded by the Department of Justice during the 1980's.

Information obtained by the Hamiltons through sworn affidavits of several individuals, including Ari Ben- Menashe, a former Israeli Mossad officer, and Michael Riconosciuto, an individual who claims to have ties to the intelligence community, indicated that an element of this ongoing criminal enterprise by Mr. Meese, Dr. Brian and others included the modification of the Enhanced PROMIS software by individuals associated with the world of covert intelligence operations. The Hamiltons claim the modification of Enhanced PROMIS was an essential element of the enterprise, because the software was subsequently distributed by Dr. Brian to intelligence agencies internationally with a "back door" software routine, so that U.S. intelligence agencies could covertly break into the system when needed. The Hamiltons also presented information indicating that PROMIS had been distributed to several Federal agencies, including the FBI, CIA, and DEA.

B. COMMITTEE INVESTIGATION

Due to the complexity and breadth of the INSLAW allegations against the Department of Justice, the committee's investigation focused on two principal questions: (1) Did high level Department officials convert, steal or otherwise misappropriate INSLAW's PROMIS software and attempt to put the company out of business; and, (2) did high level Department of Justice officials, including Attorney General Edwin Meese and then Deputy Attorney General Lowell Jensen, and others conspire to sell, transfer, or in any way distribute INSLAW's Enhanced PROMIS to other Federal agencies and foreign governments?

1. DID THE DEPARTMENT CONVERT, STEAL OR MISAPPROPRIATE THE PROMIS SOFTWARE?

With regard to the first question, there appears to be strong evidence, as indicated by the findings in two Federal court proceedings as well as by the committee investigation, that the Department of Justice "acted willfully and fraudulently"2 and "took, con- verted and stole"3 INSLAW's Enhanced PROMIS by "trickery, fraud and deceit."4 It appears that these actions against INSLAW were implemented through the project manager from the beginning of the contract and under the direction of high level Justice Department officials.

Just 1 month after the contract was signed, Mr. C. Madison "Brick" Brewer, the PROMIS project manager, raised the possibility of canceling the INSLAW contract. During an April 14, 1982, meeting of the PROMIS Project Team, Mr. Brewer, and others discussed terminating the contract with INSLAW for convenience of the Government. Mr. Brewer did not recall the details of the meeting but said that if this recommendation was made, it was made "in jest."5 Based on notes taken at this meeting by Justice officials, Bankruptcy Court Judge George Bason found that Mr. Brewer's recommendation to terminate the INSLAW contract, "Sconstituted a smoking gun that clearly evidences Brewer's intense bias against INSLAW, his single-minded intent to drive INSLAW out of businessS."6 By his own admission, Mr. Brewer became upset when INSLAW claimed that it had made enhancements to the public domain version of PROMIS using private funds. In his view, under the contract all versions of PROMIS were the Government's property. It is clear from the record that Mr. Brewer and Mr. Videnieks (the PROMIS contracting officer), supported by high level Justice officials continued to confront INSLAW at every turn. As Senior District Court Judge Bryant stated in his ruling on the case: '"There was unending contention about payments under this contract and the rights of the respective

parties."

Over the life of the contract, INSLAW made several attempts to reach an agreement with the Department over its proprietary rights to the Enhanced PROMIS software. The Department, however, steadfastly refused to conduct any meaningful negotiations and exhibited little inclination to resolve the controversy. In the meantime, INSLAW was pushed to the brink of financial ruin because the Department withheld at least $1.6 million in critical contract payments on questionable grounds, and in February 1985 was forced to file for protection under chapter 11 of the Bankruptcy Code in order to stay economically viable. INSLAW at this time had installed PROMIS at the 20 largest U.S. attorneys' offices across the country as required by the contract.7 The Department had earlier canceled installation of PROMIS at the 74 smaller offices.

While refusing to engage in good faith negotiations with INSLAW, Mr. Brewer and Mr. Videnieks, with the approval of high level Justice Department officials, proceeded to take actions to misappropriate the Enhanced PROMIS software. These officials knew that INSLAW had installed Enhanced PROMIS at the 20 sites. Yet, without notice, and certainly without permission, the Depart- ment of Justice illegally copied INSLAW's Enhanced PROMIS software and installed it eventually at 25 additional U.S. attorneys' offices. The Department reportedly also brought another 31 U.S. attorneys, offices "on-line" to Enhanced PROMIS systems via telecommunications. INSLAW first learned of these unauthorized actions in September 1985, and notified the Department that it must remove the Enhanced PROMIS software or arrange for license agreements. When the Department refused, INSLAW subsequently filed a claim against Justice in the Federal Bankruptcy Court which eventually led to the Bankruptcy's Court's finding that the Department's actions "Swere done in bad faith, vexatiously, in wanton disregard of the law and the facts, and for oppressive reasons S to drive INSLAW out of business and to convert, by trickery, fraud and deceit, INSLAW's PROMIS software. When the case was appealed by the Department, Senior District Court Judge William Bryant concurred with the Bankruptcy Court and was very critical of the Department's handling of the case. In his ruling, at 49a, Judge Bryant stated:

The Government accuses the bankruptcy court of looking beyond the bankruptcy proceeding to find culpability by the Government. What is strikingly apparent from the testimony and depositions of key witnesses and many documents is that INSLAW performed its contract in a hostile environment that extended from the higher echelons of the Justice Department to the officials who had the day-to-day responsibility for supervising its work. [Emphasis added.]

Recently, the posture of some Department officials has been to attempt to exonerate the Department's handling of the INSLAW matter by citing the fact that the Court of Appeals has vacated the Bankruptcy and District Courts' judgment involving illegal misconduct of the Department including violations of the automatic stay provisions of the Bankruptcy Code. However, the D.C. Circuit's opinion was grounded primarily on jurisdictional questions and did not address the substantive merits of the findings of fact and conclusions of law of either the Bankruptcy Court or the ruling of the U.S. District Court. Based on the facts presented in court and the committee's review of Department records, it does indeed appear that Justice officials, including Mr. Brewer and Mr. Videnieks, never intended to fully honor the proprietary rights of INSLAW or bargain in good faith with the company. The Bankruptcy Court found that:

S [The Department] engaged in an outrageous, deceitful, fraudulent game of cat and mouse, demonstrating contempt for both the law and any principle of fair dealing. [Finding No. 266 at 138.]

As the Bankruptcy and District Courts found on the merits, it is very unlikely that Mr. Brewer and Mr. Videnieks acted alone to violate the proprietary rights of INSLAW in this matter. In explaining his own actions, Mr. Brewer, the project manager, has repeatedly stated that he was not acting out any personal vendetta against INSLAW and that high level Department officials including Lowell Jensen were aware of every decision he made with regard to the contract. Mr. Brewer stated, under oath that "Sthere was somebody in the Department at a higher level, looking over the shoulder of not just me but the people who worked for meS.''8 The PROMIS Oversight Committee, headed by Deputy Attorney General Lowell Jensen, kept a close watch over the administration of the contract and was involved in every major decision. Mr. Jensen, who worked with former Attorney General Edwin Meese in the Alameda County district attorneys' offices, stated under oath that he kept the Attorney General regularly informed of all aspects of the INSLAW contract. The PROMIS Oversight Committee readily agreed with Mr. Brewer's recommendation to cancel part of INSLAW's contract for default because of the controversy regarding the installation of PROMIS in word processing systems at the 74 smaller U.S. attorneys' offices. Mr. Brewer's proposal was ultimately rejected only because a Justice contracts attorney advised the oversight committee that the Department did not have the legal authority to do so. Curiously, the recommendation to find INSLAW in default occurred shortly after INSLAW and the Department signed a modification to the contract (Mod. 12), which was supposed to end the conflict over proprietary rights.

Mr. Jensen, who is currently a Federal District Court judge in San Francisco, served at the Justice Department successively as Assistant Attorney General in charge of the Criminal Division, Associate Attorney General and Deputy Attorney General between 1981 and 1986. The Bankruptcy court found that he "had a previously developed negative attitude about PROMIS and INSLAW" from the beginning (Findings No. 307-309) because he had been associated with the development of a rival case management system while he was a district attorney in California, and that this experience, at the very least, affected his judgment throughout his oversight of the contract. During a sworn statement, Judge Jensen denied being biased against INSLAW, but averred that he did not have complete recollection of the events surrounding his involvement in the contract. However, based on the committee's own investigation it is clear that Judge Jensen was not particularly interested or active in pursuing INSLAW's claims that Department officials were biased against the company and had taken action to harm the company. Perhaps most disturbing, he remembered very few details of the PROMIS Oversight Committee meetings even though he had served as its chairman and was certainly one of its most influential members. He stated that after a meeting with former Attorney General Elliot Richardson (representing INSLAW) regarding the alleged Brewer bias, he commissioned his deputy, Mr. Jay Stephens, to conduct an investigation of the bias charges. Based on this investigation, Judge Jensen said he concluded that there were no bias problems associated with the Department's handling of the INSLAW contract.

This assertion, however, contradicted Mr. Stephens, who testified during a sworn statement that he was never asked by Judge Jensen to conduct an investigation of the Brewer bias allegations raised by Mr. Richardson and others. Mr. Stephens, recollection of the events was sharp and complete in stark contrast to Judge Jensen's. As a result, many questions remain about the accuracy and completeness of Judge Jensen's recollections and statements. As for the PROMIS Oversight Committee, committee investigators were told that detailed minutes were not kept at any of the meetings, nor was there any record of specific discussions by its members affecting the INSLAW contract. The records that were available were inordinately sparse and often did not include any background of how and why decisions were made.

To date, former Attorney General Meese denies having knowledge of any bias against INSLAW by the Department or any of its officials. He stated, under oath, that he had little, if any, involvement with the INSLAW controversy and that he recalls no specific discussion with anyone, including Department officials about INSLAW's contract with Justice regarding the use or misuse of the PROMIS software. This statement is in direct conflict with Judge Jensen's testimony, that he briefed Mr. Meese regularly on this issue and that Mr. Meese was very interested in the details of the contract and negotiations.

One of the most damaging statements received by the committee is a sworn statement made by Deputy Attorney General Arnold Burns to Office of Professional Responsibility (OPR) investigators in 1988. In this statement, Mr. Burns stated that Department attorneys had already advised him (sometime in 1986) that INSLAW's claim of proprietary rights in the Enhanced PROMIS software was legitimate and that the Department had waived any rights in these enhancements. Mr. Burns was also told by Justice attorneys that the Department would probably lose the case in court on this issue. Accepting this statement, it is incredible that the Department, having made this determination, would continue to pursue its litigation of these matters. More than $1 million has been spent in litigation on this case by the Justice Department even though it knew in 1986 that it did not have a chance to win the case on merits. This clearly raises the specter that the Department actions taken against INSLAW in this matter represent an abuse of power of shameful proportions.



2. WAS THERE A HIGH LEVEL CONSPIRACY?



The second phase of the committee's investigation concentrated on the allegations that high level officials at the Department of Justice conspired to drive INSLAW into insolvency and steal the PROMIS software so it could be used by Dr. Earl Brian, a former associate and friend of then Attorney General Edwin Meese. Dr. Brian is a businessman and entrepreneur who owns or controls several] businesses including Hadron, Inc., which has contracts with the Justice Department, CIA, and other agencies. The Hamiltons and others have asserted that Dr. Brian conspired with high level Justice officials to sell PROMIS to law enforcement and intelligence agencies worldwide.

Former Attorney General Elliot Richardson, counsel to INSLAW, has alleged that the circumstances involving the theft of the PROMIS software system constitute a possible criminal conspiracy involving Mr. Meese, Judge Jensen, Dr. Brian, and several current and former officials at the Department of Justice. Mr. Richardson maintains that the individuals involved in the theft of the Enhanced PROMIS system have violated a plethora of Federal crimi- nal statutes, including but not limited to: (1) 18 U.S.C 654 (officer or employee of the United States converting the property of another); (2) 18 U.S.C 1001 (false statements); (3)18 U.S.C 1621 (perjury); (4) 18 U.S.C 1503 (obstruction of justice); (5) 18 U.S.C 1341 (mail fraud) and (6) 18 U.S.C. 371 (conspiracy to commit criminal offenses). Mr. Richardson further contends that the violations of Federal law associated in the theft of Enhanced PROMIS, the subsequent coverup and the illegal distribution of PROMIS fulfill the requirements for prosecution under 18 U.S.C. 1961 et seq. (the Racketeer Influenced and Corrupt Organizations (RICO) statute).

As discussed earlier, the committee's investigation largely supports the findings of two Federal courts that the Department "took, converted, stole INSLAW'S Enhanced PROMIS by "trickery, fraud and deceit'', and that this misappropriation involved officials at the highest levels of the Department of Justice. The recent ruling by the D.C. Circuit Court of Appeals does nothing to vitiate those conclusions, the product of an extensive record compiled under oath by two Federal jurists. While the Department continues to attempt to explain away the INSLAW matter as a simple contract dispute, the committee's investigation has uncovered other information which plausibly could suggest a different conclusion if full access to documents and other witnesses were permitted. Several individuals have stated under oath that the Enhanced PROMIS software was stolen and distributed internationally in order to provide financial gain to Dr. Brian and to further intelligence and foreign policy objectives for the United States. While it should be acknowledged at the outset that some of the testimony comes from individuals whose past associations and enterprises are not commendable, corroborating evidence for a number of their claims made under oath has been found. It should be observed that these individuals provided testimony with the full knowledge that the Justice Department could-and would probably be strongly inclined to-prosecute them for perjury if they lied under oath. Moreover, we note that the Department is hardly in a position to negate summarily testimony offered by witnesses who have led less than an exemplary life in their choice of associations and activities. As indicated by the recent prosecution of Manuel Noriega, which involved the use of over 40 witnesses, the majority of whom were previously convicted drug traffickers, a witness, perceived credibility is not always indicative of the accuracy or usability in court of the information provided. Although the committee's investigation could not reach a definitive conclusion regarding a possible motive behind the misappropriation of the Enhanced PROMIS software, the disturbing questions raised, unexplained coincidences and peculiar events that have surfaced throughout the INSLAW case raises the need for further investigation.

One area which requires further investigation is the allegations made by Mr. Michael Riconosciuto. Mr. Riconosciuto, a shady character allegedly tied to U.S. intelligence agencies and recently convicted on drug charges, alleges that Dr. Brian and Mr. Peter Videnieks secretly delivered INSLAW's Enhanced PROMIS software to the Cabazon Indian Reservation, located in California, for "refitting" for use by intelligence agencies in the United States and abroad.9 When Dr. Brian was questioned about his alleged involvement in the INSLAW case, he denied under oath that he had ever met Mr. Riconosciuto and stated that he had never heard of the Cabazon Indian Reservation.

C. ADDITIONAL QUESTIONS

Suspicions of a Department of Justice conspiracy to steal INSLAW's PROMIS were fueled when Danny Casolaro-an investigative writer inquiring into those issues-was found dead in a hotel room in Martinsburg, WV, where he was to meet a source that he claimed was critical to his investigation. Mr. Casolaro's body was found on August 10, 1991, with his wrists slashed numerous times. Following a brief preliminary investigation by local authorities, Mr. Casolaro's death was ruled a suicide. The investigation was reopened later as a result of numerous inquiries from Mr. Casolaro's brother and others regarding the suspicious circumstances surrounding his death.

The Martinsburg Police investigation subsequently concluded in January 1992, that Mr. Casolaro's death was a suicide. Subsequently, Chairman Brooks directed committee investigators to obtain sworn statements from the FBI agent and two former Federal Organized Crime Strike Force prosecutors in Los Angeles who had information bearing on the Casolaro case. Sworn statements were obtained from former Federal prosecutors Richard Stavin and Marvin Rudnick on March 13 and 14, 1992. After initial resistance from the Bureau, a sworn statement was taken from FBI Special Agent Thomas Gates on March 25 and 26, 1992.

Special Agent Gates stated that Mr. Casolaro claimed he had found a link between the INSLAW matter, the activities taking place at the Cabazon Indian Reservation, and a Federal investigation in which Special Agent Gates had been involved regarding organized crime influence in the entertainment industry.

Special Agent Gates stated that Mr. Casolaro had several conversations with Mr. Robert Booth Nichols in the weeks preceding his death. Mr. Nichols, according to documents submitted to a Federal court by the FBI, has ties with organized crime and the world of covert intelligence operations. When he learned of Mr. Casolaro's death, Special Agent Gates contacted the Martinsburg, WV, Police Department to inform them of the information he had concerning Mr. Nichols and Mr. Casolaro. The Martinsburg Police have not commented on whether or not they eventually pursued the leads provided by Special Agent Gates.

Based on the evidence collected by the committee, it appears that the path followed by Danny Casolaro in pursuing his investigation into the INSLAW matter brought him in contact with a number of dangerous individuals associated with organized crime and the world of covert intelligence operations. The suspicious circumstances surrounding his death have led some law enforcement professionals and others to believe that his death may not have been a suicide. As long as the possibility exists that Danny Casolaro died as a result of his investigation into the INSLAW matter, it is imperative that further investigation be conducted.

D. EVIDENCE OF POSSIBLE COVERUP AND OBSTRUCTION

One of the principal reasons the committee could not reach any definitive conclusion about INSLAW's allegations of a high criminal conspiracy at Justice was the lack of cooperation from the Department. Throughout the two INSLAW investigations, the Congress met with restrictions, delays and outright denials to requests for information and to unobstructed access to records and witnesses since 1988. The Department initially attempted to prevent the Senate Permanent Subcommittee on Investigations from conducting an investigation of the INSLAW affair. During this committee's investigation, Attorney General Thornburgh repeatedly reneged on agreements made with this committee to provide full and open access to information and witnesses. Although the day before a planned committee meeting to consider the issuance of a subpoena the Department promised full access to documents and witnesses, the committee was compelled to subpoena Attorney General Thornburgh to obtain documents needed to complete its investigation. Even then, the Department failed to provide all the documents subpoenaed, claiming that some of the documents held by the Department's chief attorney in charge of the INSLAW litigation had been misplaced or accidentally destroyed. The Department has not provided a complete accounting of the number of documents missing nor has it conducted an investigation to determine if the documents were stolen or illegally destroyed.

Questions regarding the Department's willingness and objectivity to investigate the charges of possible misconduct of Justice employees remain. That Justice officials may have too readily concluded that witnesses supporting the Department's position were credible while those who did not were ignored or retaliated against was, perhaps, most painfully demonstrated with the firing of Anthony Pasciuto, the former Deputy Director, Executive Office of the U.S. Trustees.

Mr. Pasciuto had informed the Hamiltons that soon after INSLAW filed for chapter 11 bankruptcy in 1985, the Justice Department had planned to petition the court to force INSLAW into chapter 7 bankruptcy and liquidate its assets including the PROMIS software. His source for this information was Judge Cornelius Blackshear who, at the time, was the U.S. Trustee for the Southern District of New York. Judge Blackshear subsequently provided INSLAW's attorneys with a sworn statement confirming what Mr. Pasciuto had told the Hamiltons. However, following a conversation with a Justice Department attorney who was representing the Department in the INSLAW case,10 Judge Blackshear recanted his earlier sworn statement. Moreover, Judge Blackshear, under oath, could not or would not provide committee investigators with a plausible explanation of why he had recanted his earlier statements to INSLAW, Mr. Pasciuto and others regarding the Justice Department's efforts to force INSLAW out of business. He did confirm an earlier statement attributed to him that his recantation was a result of "his desire to hurt the least number of people." However, he would not elaborate on this enigmatic statement.

Similarly, Mr. Pasciuto, under strong pressure from senior Department officials, recanted his statement made to the Hamiltons regarding Judge Blackshear. It appears that Mr. Pasciuto may have been fired from his position with the Executive Office of U.S. Trustees because he had provided information to the Hamiltons and their attorneys which undercut the Department's litigating position before the Bankruptcy Court.11 This action was based on a recommendation made by the Office of Professional Responsibility (OPR). In a memorandum to Deputy Attorney General Burns, dated December 18, 1987, the OPR concluded that:

In our view, but for Mr. Pasciuto's highly irresponsible actions, the department would be in a much better litigation posture than it presently finds itself. Mr. Pasciuto has wholly failed to comport himself in accordance with the standard of conduct expected of an official of his position.

Mr. Pasciuto now states he regrets having allowed himself to be coerced by the Department into recanting and has stated under oath to committee investigators that he stands by his earlier statements made to the Hamiltons that Judge Blackshear had informed him that the Department wanted to force INSLAW out of business. Certainly, Mr. Pasciuto's treatment by the Department during his participation in the INSLAW litigation raises serious questions of how far the Department will go to protect its interests while defending itself in litigation. Not unexpectedly, Mr. Pasciuto's firing had a chilling effect on other potential Department witnesses who might have otherwise cooperated with the committee in this matter. Judge Blackshear, on the other hand, was not accused of wrongdoing by the Department even though he originally provided essentially the same information as had Mr. Pasciuto.

Despite this series of obvious reversals, the Department, after limited investigation, has apparently satisfied itself that the sworn statements of its witnesses, including Judge Blackshear, have somehow been reconciled on key issues such that no false statements have been made by any of these individuals. This position is flatly in opposition to the Bankruptcy Court's finding that several Department officials may have perjured themselves which was never seriously investigated by the Department. In addition, there are serious conflicts and inconsistencies in sworn statements provided to the committee that have not been resolved. Equally important, the possibility that witnesses, testimony were manipulated by the Department in order to present a "united front" to the Congress and the public on the INSLAW case needs to be fully and honestly explored. The potential for a conflict of interest in the Department's carrying out such an inquiry is high, if not prudently manifest, and independent scrutiny is required.

E. JUDGE BASON'S ALLEGATIONS AGAINST THE DEPARTMENT

Judge Bason testified, under oath, before the Economic and Commercial Law Subcommittee that the Department's actions against its critics may have extended into blocking his reappointment as a bankruptcy judge in 1988 because of his ruling in INSLAW's case. Judge Bason was replaced by Martin Teel, Jr., who, prior to his appointment, was a Justice Department attorney heavily involved in the Department's litigation of the INSLAW case.12 The committee was unable to substantiate Judge Bason's charges. If such undue influence did occur, it was subtle and lost in the highly private manner in which judge selection procedures are conducted. While sworn statements were not taken, the committee investigators interviewed several of the judges involved in the selection process. The judges who agreed to provide interviews all stated that they had little firsthand knowledge in which to evaluate the candidates, including the incumbent judge. As a result, the members of the Judicial Council had to rely on the findings of the Merit Selection Panel headed by Judge Norma Johnson.

The Merit Selection Panel's findings were provided to the Judicial Council by Judge Johnson whose oral presentation was instrumental in the final selection. Judge Johnson had previously worked at the Department of Justice with Stuart Schiffer, who led the Department's attempt to have the District Court remove Judge Bason from the INSLAW case. Mr. Schiffer is also the official who argued vociferously against the appointment of an independent counsel on the INSLAW case in a memorandum to Deputy Attorney General Arthur Burns. Judge Johnson also served in the D.C. Superior Court with Judge Tim Murphy from 1970 through 1980. Judge Murphy subsequently worked directly for Mr. Brewer on the PROMIS contract. The committee, however, has not at this date found any evidence that Judge Johnson had specific discussions with Mr. Schiffer or anyone else at the Department of Justice about Judge Bason, the INSLAW case or the bankruptcy judicial selection process. The committee's investigation revealed that the selection process was largely informal, undocumented and highly subjective. For example, several members of the Judicial Council indicated that one of the primary factors influencing the non-reappointment of Judge Bason, was the poor administrative condition of his court. These same members admitted that they had no firsthand knowledge of the administrative condition and based this opinion on the reports of the Merit Selection Panel and Judge Johnson. This was corroborated by the discovery of a confidential memorandum written by a member of the Merit Selection Panel which was highly critical of Judge Bason and the administrative condition of the Bankruptcy Court. While this memorandum had been seen by several judges during the selection process, committee investigators were unable to determine who authored it. The committee's investigation did not reveal any evidence to support the criticisms raised in the memorandum. Martin Bloom, Clerk of the Bankruptcy Court, indicated in his sworn statement to committee investigators that under Judge Bason, the administrative condition of the court vastly improved. These sentiments were echoed by Chief Judge Aubrey Robinson who consistently complimented Judge Bason on his efforts to improve the administrative condition of the Bankruptcy Court in his remarks to the Annual Judicial Conference.

F. CONCLUSION

The history of the Department's behavior in the INSLAW case dramatically illustrates its (1) reflexive hostility and "circle the wagons" approach toward outside investigations; (2) inability or unwillingness to look objectively at charges of wrongdoing by high level Justice officials, particularly when the agency itself is a defendant in litigation; and, (3) belligerence toward Justice employees with views that run counter to those of the agency's upper management. The fact that the Department failed to recognize a need for an independent investigation of the INSLAW matter for more than 7 years is remarkable. Failure to do so has effectively shielded officials who may have committed wrongdoing from investigation and prosecution.

As already documented and confirmed by two Federal judges, the Department's actions in the INSLAW case have greatly harmed the company and its owners. These actions, as they pertain to the dispute with INSLAW over the misappropriation of the PROMIS software, were taken with the full knowledge and support of high level Justice officials. The harm to the company was further perpetuated by succeeding high level officials, such as former Attorney General Richard Thornburgh, who not only failed to objectively investigate the serious charges raised by the Hamiltons and their attorney, former Attorney General Elliot Richardson, but also delayed and rebuffed effective and expeditious outside investigation of the matter by Congress.

The Department of Justice is this nation's most visible guarantor of the notion that wrongdoing will be sought out and punished irrespective of the identity of the actors involved. Moreover, its mandate is to protect all private citizens from illegal activities that undermine the public trust. The Department's handling of the INSLAW case has seriously undermined its credibility and reputation in playing such a role. Congress and the executive must take immediate and forceful steps to restore public confidence and faith in our system of justice, which cannot be undermined by the very agent entrusted with enforcement of our laws and protections afforded every citizen. In view of the history surrounding the INSLAW affair and the serious implications of evidence presented by the Hamiltons, two court proceedings in the judicial branch and the committee's own investigation, there is a clear need for further investigation. The committee believes that the only way in which INSLAW's allegations can be adequately and fully investigated is by the appointment of an independent counsel.

The committee is aware that on November 13, 1991, Attorney General Barr appointed Nicholas Bua, a retired Federal judge from Chicago, as his special counsel to investigate and advise him on the INSLAW controversy. The committee eagerly awaits Judge Bua's findings; however, as long as the investigation of wrongdoing by former and current high level Justice officials remains under the ultimate control of the Department itself, there will always be serious doubt about the objectivity and thoroughness of the inquiry.

INSLAW's ANALYSIS and REBUTTAL

of the

BUA REPORT

Memorandum in Response to the

March 1993 Report of Special Counsel Nicholas J. Bua

to the Attorney General of the United States Responding to the Allegations of INSLAW, Inc.

INTRODUCTION

The attempt by the Department of Justice (DOJ) to deal with the INSLAW case through a Special Counsel, who is required to report to the Attorney General, and a staff of DOJ attorneys raises significant public policy questions. These are apparent on the face of the Bua Report.

For example, should DOJ, as one of the parties to a civil dispute, be able to use the authority of a federal grand jury and the secrecy requirements of its proceedings to improve its own civil litigation posture? Should DOJ be using its own lawyers and investigators and a federal grand jury to investigate colleagues, superiors, and subordinates? How should the tension between the obligation to enforce the criminal laws of the United States and the legitimate need to safeguard intelligence and national security be reconciled?

The problems with the Bua Report, as set forth in INSLAW's Analysis and Rebuttal, are much more concrete than the aforementioned public policy questions. We do, however, think that the problems identified by these questions should be carefully and thoughtfully addressed as steps are being taken to bring the INSLAW case to a fair, final and publicly acceptable conclusion.

The main body of this memorandum is divided into sections addressing (1) DOJ's wrongful acquisition of an enhanced version of PROMIS to which it was not entitled and which it has continued to use without properly compensating INSLAW, (2) DOJ's attempt, by improper means, to cause the conversion of the INSLAW bankruptcy from reorganization to liquidation, and (3) the indications of a more widely ramified conspiracy involving Earl Brian and the intelligence and law enforcement agencies of the United States and foreign governments.

Each of these sections examines the basis for the conclusions reached in the Bua Report and points out errors and omissions plainly demonstrable on the basis of evidence cited in the report itself or readily available to the investigators in the records of prior investigations and judicial proceedings. The sections also identify evidentiary points as to which Judge Bua chose to believe the self-serving statements of individuals directly implicated in the theft of INSLAW's software, to disbelieve the testimony on the same points by INSLAW witnesses, and to ignore evidence supporting the findings of the Bankruptcy Court for the District of Columbia, the United States District Court for the District of Columbia, and the House Committee on the Judiciary.

In addition to the deficiencies apparent on its face, the report reveals numerous failures to pursue testimony or documentary evidence that could have contradicted its conclusions and corroborated INSLAW's allegations. The following sections identify these failures in at least 40 situations.

Immediately after his appointment, INSLAW called to Judge Bua's attention the essentiality of assuring senior DOJ officials and other government employees who had given important information to INSLAW that they could disclose this information to him or his staff without fear of reprisal. Any person seriously attempting to uncover the truth would have gone to great lengths to find a way of overcoming these apprehensions. This was not done. Appended to this memorandum is a listing of these informants together with a brief synopsis of information they have furnished to INSLAW. The listing gives enough of an indication of who they are to make clear that they deserve to be taken seriously, but not so much as to make it possible to identify them individually. The synopses make clear at the same time that the information they could furnish strongly corroborates other evidence of the wider conspiracy.

The Bua Report denigrates the findings of the Bankruptcy Court without clearly acknowledging that those findings were affirmed and supplemented by two other entities independent of DOJ, the U.S. District Court and the House Judiciary Committee. Senior U.S. District Judge William B. Bryant, Jr., issued a 44- page opinion, in which he states in part:

It is sufficient to state that after careful review of all of the volumes of transcripts of the hearings before the bankruptcy court, the more than 1,200 pages of briefs and supporting appendices, and all other relevant documents in the record, there is convincing, perhaps compelling support for the findings set forth by the bankruptcy court.

. . . the court has examined the bankruptcy judge's findings of fact in the light of the entire record, and finds his account of the evidence is eminently plausible; and this court is not left with any notion that a 'mistake has been committed,' Id. at 574. This conclusion is reached without regard to the deference to be accorded to the judge's opportunity to assess credibility. The cold record adequately supports his findings under any standard of review.

The section on the wrongful acquisition of PROMIS amply supports its thesis that the Bua Report focuses only on those facts that its authors deemed relevant to the conclusions they intended to reach. It calls attention to the fact that the report based some of its most important conclusions on interviews with unnamed individuals and on undisclosed documentary evidence. This section also points out the report's remarkable credulity toward professions of innocence by the very individuals heretofore identified as the principal culprits in the theft of the software. As the section observes, "To accept the self-serving, long after-the-fact and post hoc rationalizations of these individuals over their testimony at trial, which testimony clearly evidenced their propensity for lying and covering up the truth, as found by two federal courts, is ludicrous."

The section on the conversion of the INSLAW bankruptcy exposes the same pattern of justifying the DOJ version of the facts and downplaying, misinterpreting, or ignoring evidence to the contrary. This is particularly striking in the case of the report's attempt to minimize the testimony of Anthony Pasciuto, Deputy Director of the Executive Office for U.S. Trustees. In reaching for an explanation of Pasciuto's conduct, his testimony, and his subsequent recantation, the report avoids the one most logical explanation: the fear that he would not get the promotion he had long sought and the fear that he would be fired for telling the truth, as he eventually was.

Pages 28-35 of the section on the more widely ramified conspiracy pull together the numerous indications that INSLAW's PROMIS software is widely used throughout the United States Government. A thorough investigation would, at a minimum, have conducted the relatively simple and inexpensive computer-based code comparisons between PROMIS and its suspected clones in U.S. intelligence and law enforcement agencies, that might have shown whether or not these claims are true. The Bua investigation made no attempt to arrange such comparisons.

Relevant both to DOJ's bad faith in its dealings with INSLAW and to its involvement in a broader conspiracy is the issue of the DOJ's complicity in the denial of reappointment to George F. Bason, Jr., who presided over the Bankruptcy Court trial. The report reveals that the criticisms of Judge Bason by his predecessor, Roger Whelan, were influential in the Merit Selection Panel's deliberations about Judge Bason's suitability for reappointment. Whelan told the Panel that Judge Bason was a poor administrator. Chief Judge Aubrey Robinson of the U.S. District Court, however, told the Judiciary Committee that Judge Bason's only administrative problems were inherited from Judge Whelan and that these were soon brought under control by Judge Bason. In the Chapter 11 proceeding, Roger Whelan represented the INSLAW creditor which pressed hardest for INSLAW's liquidation and which, in so doing, appears to have acted in collusion with DOJ. The report also discloses direct communications on the INSLAW case between a DOJ attorney and the Chair of the Merit Selection Panel, communications whose existence was not revealed in the course of two Congressional investigations on the subject.

It is noteworthy in the circumstances that Judge Bua made an eleventh-hour approach to INSLAW's lawyers in an effort to broker a $25 million settlement between INSLAW and the DOJ. The inference that Judge Bua was aware of the weaknesses in his own report is difficult to avoid.

I. DOJ WRONGFULLY OBTAINED AN ENHANCED VERSION OF PROMIS TO WHICH IT WAS NOT ENTITLED AND THEREAFTER HAS USED THAT VERSION WITHOUT PROPERLY COMPENSATING INSLAW

In assessing the validity of the so-called "tentative" factual conclusions reached in the Bua Report, one need be mindful of the following telling admission of the authors:

Our discussion here of the factual background of the 1982 contract does not purport to be exhaustive. Instead, _we have attempted to focus on those facts that are relevant to the conclusions we have reached_. Where it is necessary to explain specific findings or conclusions, we have undertaken a more detailed examination of certain events in subsequent sections of this report. (Emphasis added.) (Page 15)

In effect, the authors of the Bua Report determined, apparently in advance, the conclusions that they intended to reach and, thereafter, set about to "focus" on only those facts that they deemed relevant to support those conclusions, to the exclusion of the massive factual record that otherwise would, and did, lead to the very opposite conclusions found not only by two federal courts, but, in part, by the Committee on the Judiciary of the U.S. House of Representatives and the Permanent Subcommittee on Investigations of the Committee on Government Affairs of the U.S. Senate.

It is remarkable that the authors of the Bua Report either ignored or rejected every conclusion reached by the federal courts and the two legislative committees that was contrary to the conclusions reached by the Bua Report, while at the same time accepting those conclusions that were supportive of the conclusions reached in the Bua Report. It is even more remarkable that the Bua Report could find, on the one hand, that DOJ neither obtained the enhanced version of PROMIS through fraud nor wrongfully distributed PROMIS while, on the other hand, Judge Bua repeatedly informed journalists covering the INSLAW case and once conveyed directly to INSLAW's attorneys that he had reached the opposite conclusion and had recommended that DOJ settle its dispute with INSLAW by the payment of $25 million to INSLAW.

The following is an attempt merely to highlight some of the most glaring errors in the factual conclusions reached in the Bua Report.

A. Negotiation of the 1982 Implementation Contract

The Bua Report found that DOJ had issued a Request for Proposals (RFP) in late 1981 that solicited proposals on a contract to: (1) implement computer-based PROMIS software in 20 "larger" United States Attorneys' Offices and (2) create and install word processing based case management software in the remaining 74 offices. There is no dispute that, at the time that the RFP was issued and the contract was awarded to INSLAW, both DOJ and INSLAW understood that DOJ intended to utilize the computer-based PROMIS only in the 20 larger offices; it clearly was understood that the remaining 74 offices would not receive this software.

The Bua Report acknowledged that INSLAW, in responding to the RFP, specifically stated that: During the life of this project -- but not as part of this project -- Inslaw plans new enhancements and modifications to the basic PROMIS software and to the original version of PROMIS for U.S. Attorneys. ....[I]mprovements funded by other [i.e. non- governmental] sources and developed and accepted for inclusion in the software supported by Inslaw, will be made available to the U.S. Attorneys' offices. (Page 19)

However, the Bua Report concluded, without any factual support, that INSLAW did not clarify what it meant by "accepted for inclusion" or "will be made available." This is wrong.

First, the Bua Report ignores the fact that the quoted statement was made specifically in response to the Statement of Work, which in part required that:

All systems enhancements, modifications, and development performed _pursuant to this contract_ shall be incorporated within the systems which have already been installed in the U.S. Attorneys' Offices.... (s 3.2.4.2) (Emphasis added.)

INSLAW was responding to this portion of the Statement of Work by advising DOJ that while INSLAW planned new enhancements, they would not be as a part of, or pursuant to, this contract. Thus, DOJ clearly was put on notice that these new enhancements would not be made available for free.

Second, there is ample testimony that both before and after the PROMIS contract was signed, INSLAW specifically advised the Executive Office for U.S. Attorneys ("EOUSA") in writing that it had available for sale, at an additional cost, certain proprietary enhancements to PROMIS. INSLAW provided this information to DOJ because, by the time that DOJ issued the RFP, INSLAW had made substantial enhancements to Old PROMIS. (Hamilton, T. 105; Merrill, T. 763) These enhancements, which eventually included major new functional subsystems and substantial changes to the existing code, at a cost which INSLAW estimated to be $8.3 million, rendered Enhanced PROMIS far superior to Old PROMIS in terms of speed, flexibility, ease of use, breadth of function, and ability to be modified for particular needs. (Hamilton, T. 400; Merrill, T. 760-762; Holton, T. 1216-1219)

In its Technical Proposal responding to DOJ's PROMIS Project RFP, INSLAW informed DOJ that it had made enhancements to Old PROMIS which were proprietary, and as to which it had made a significant developmental and commercial commitment. (Answer ¶ 13; PX 12; Hamilton, T. 124-125; Gizzarelli, T. 482-483) In this regard, INSLAW specifically made a claim of proprietary rights in such enhancements. (Hamilton, T. 124)

The Bua Report suggests that DOJ did not understand that INSLAW had made this claim of proprietary rights, and that INSLAW had failed to explain in sufficient detail the basis or impact of that claim. That is not correct. In fact, in response to INSLAW's proposal, DOJ specifically requested a clarification of INSLAW'S claim of proprietary rights. (PX 13; Hamilton, T. 126; Merrill, T. 766-767) In an amendment to its Technical Proposal dated January 13, 1982, INSLAW responded to DOJ's inquiry and specifically informed DOJ that ". . . all of INSLAW's software is proprietary to it thus far." (PX 14; Hamilton, T. 127) DOJ did not respond further to INSLAW's amendment of its Technical Proposal. (Gizzarelli, T. 490; Merrill, T. 767-769) INSLAW also indicated that such programs were copyrighted and that since May 1981 it had been developing privately financed enhancements to PROMIS which were the exclusive property of INSLAW, and that DOJ had no license to use these privately-financed enhancements. (PX 14)

To illustrate this point, INSLAW, in its Technical Proposal, singled out the two-program version of the data base adjustment subsystem as an enhancement which had been developed by INSLAW using private funds. (Hamilton, T. 125; PX 14) The data base adjustment subsystem was not required to be delivered under the contract nor had it been required to be delivered under any prior DOJ contracts (Hamilton, T. 125, 2575-2578; Merrill, T. 768) By this January 13 amendment, INSLAW illustrated the concept that INSLAW had all the proprietary rights in Enhanced PROMIS (Gizzarelli, T. 493)

Subsequent to receipt of INSLAW's response to DOJ, and prior to the execution of the contract, no one from DOJ made any further inquiry of INSLAW, or raised any questions, concerning INSLAW's right to assert its proprietary rights in Enhanced PROMIS. (Hamilton, T. 128; Merrill, T. 767-769; Gizzarelli, T. 490)

From the foregoing exchange of communications, it should be clear that any rational person acting on behalf of DOJ would understand that INSLAW was advising DOJ that the proprietary enhancements developed by INSLAW would be made available to the Department for a fee, should the Department desire to have those enhancements included within the software delivered under the contract. If there was any confusion on the part of DOJ, that confusion was not the fault of INSLAW; had DOJ any further questions concerning what was meant by the language in issue after having received the January 13 clarification, it was up to DOJ to seek answers to those questions.

Not surprisingly, after thoroughly reviewing the record, Judge Bryant reached the same conclusion:

The parties negotiated for over two months, and finally entered into a contract on March 16, 1982. Prior to the execution of the contract, and for a time thereafter, there were extensive discussions about what INSLAW claimed were privately funded enhancements which were featured in PROMIS. In other words, INSLAW claimed that at the time of entering into the contract their version of PROMIS was considerably more advanced than it was at the time of the pilot project, and that it claimed proprietary rights to those features which were developed with other than government funding. (D. Ct. Mem. Op., p. 4)"1

B. INSLAW's Continuing Assertion of Proprietary Rights and DOJ's Improper Response

To the extent that there was any lingering confusion on DOJ's part regarding INSLAW's assertion of proprietary rights in the enhanced version of PROMIS, that confusion should have been removed by INSLAW's continuing assertion of those rights. Indeed, in April 1982, INSLAW formally notified DOJ of its intent to market Enhanced PROMIS as a fee-generating product to public and private sector customers. (Hamilton, T. 134-136; Merrill, T. 775) In this connection, Roderick M. Hills, an attorney for INSLAW, wrote to Associate Deputy Attorney General Stanley E. Morris, enclosing a memorandum written by Hamilton (with his counsel's assistance) describing the origin and financing of Old PROMIS, INSLAW's efforts to substantially improve the program utilizing private funds, and the need to market such privately-financed enhancements. (PX 21)

Hill's letter solicited any questions or objections that DOJ had to INSLAW's plans. (PX 21) In essence, this inquiry was intended to provide advance notice to DOJ as to INSLAW's plans and to obtain a "sign-off" letter from DOJ to respond to concerns raised by IBM which at that time was considering a joint marketing agreement with INSLAW. (Rogers, T. 422-424; Hamilton, T. 277) The purpose of the "sign-off" letter, from INSLAW's perspective, was to give INSLAW assurance that DOJ understood what INSLAW was proposing to do, that it agreed with INSLAW's legal position, and that it would take no affirmative action to disrupt or impede INSLAW's marketing efforts. (Rogers, T. 444- 445) Any questions that DOJ continued to have should have been answered by this memorandum.

The Bua Report acknowledges the above facts but fails to take into consideration that this additional effort by INSLAW clearly should have put DOJ on notice that there were additional enhancements included within the PROMIS software that were not part of the software to be delivered under the contract, absent a separate agreement regarding that software.

There is no dispute that this plan obviously infuriated C. Madison Brewer, DOJ's PROMIS Project Manager. The Bua Report accepts the fact that Brewer vehemently took issue with the representations and conclusions set forth in the Hamilton memorandum, which Brewer referred to as "scurrilous," and further acknowledges that Brewer's opposition to the plan was presented in an improper manner. However, in a woefully inadequate effort to downplay Brewer's conduct, the Bua Report proceeds to seek to justify his opposition, while at the same time totally ignoring all of the undisputed facts that evidence his outrageous conduct directed at injuring INSLAW.

First, the Bua Report's conclusion that at least some of the positions taken by Brewer appear to have been well-founded is not only wrong, but also is a facially obvious effort to obfuscate the fact that virtually all of the substantive positions and actions taken by DOJ, at the direction of Brewer, were not well- founded. In this regard, the Bua Report credits Brewer for a grand total of two correct positions, to the exclusion of all of the incorrect positions. More particularly, the Bua Report states that Brewer was correct to object to the extent that the Hamilton memorandum claimed that all software developed after May 1981 was proprietary, since the five BJS enhancements that were under development would have been in the public domain. INSLAW did not then, nor has it ever, disputed this fact, and the memorandum did not take a contrary position. Additionally, the Bua Report credits Brewer for correctly arguing that INSLAW had received some federal funding after May 1981. Once again, while this funding may have taken place, INSLAW was not asserting any proprietary rights for software developed from government funding under contracts containing federal data rights clauses. Moreover, the specific contracts referenced in the Bua Report did not encompass any software development work; therefore, none of the proprietary enhancements was developed using government money. Thus, the only two points on which the Bua Report agrees with Brewer are non-issues, and serve only to cloud the otherwise obvious wrongful conduct undertaken by Brewer.

The Bua Report ignores the fact that at an April 14, 1982 meeting, Brewer actively considered terminating for the government's convenience the month-old PROMIS Contract in retaliation for INSLAW's letter to Morris. (Brewer, T. 1673; PX 23) In his testimony at trial, Brewer's deputy, Jack Rugh, acknowledged that such a termination at that time would have been "ludicrous." (Rugh, T. 1471; Brewer, T. 1673; PX 23) In addition, Brewer discussed reprisals against INSLAW on its several other contracts with DOJ, one of which was the BJS contract for specific PROMIS enhancement development work which was not part of the PROMIS enhancements claimed as proprietary by INSLAW. (Hamilton, T. 114; PX 24)

Another contract discussed at the April 14, 1982 meeting was awarded to INSLAW in 1981 by DOJ to perform a needs analysis and system design for PROMIS in the U.S. Attorney's Office for the District of Columbia. (PX 324 [Brewer] at p. 122; Brewer, T. 1634, 1673; Hamilton, T. 141; PX 232) The authorized second phase of this contract would have been a PROMIS implementation effort by INSLAW at an estimated contract price of $600,000. (PX 324 [Brewer] at pp. 123-124; Hamilton, T. 141-142) It was noted during the April 14th meeting that DOJ was undecided about whether to proceed with the contract's second phase and that Brewer and Rugh would meet with the District of Columbia's U.S. Attorney's Office staff to decide what would be done on the contract. (PX 23) It was further noted that cancellation of the authorized second phase would adversely affect INSLAW's ability to keep its overhead rate in line with EOUSA expectations. (PX 23)

Stating that he wanted to discuss the BJS contract with INSLAW, Brewer demanded a meeting with INSLAW for April 19, 1982. (PX 24; Brewer, T. 1638)

At the outset of the meeting on April 19, 1982, Brewer informed James Kelley, INSLAW's General Counsel, and Joyce Deroy of INSLAW that his concern on the BJS contract arose from the "scurrilous" memorandum written by Hamilton which was attached to INSLAW's April 2, 1982 notice to Morris of its plans to market Enhanced PROMIS. (PX 25; PX 26; PX 324 [Brewer] at p. 137; Brewer, T. 1671)

As of this meeting, Brewer understood from Hamilton's memorandum that INSLAW was asserting its ownership rights in Enhanced PROMIS, as well as its right to market Enhanced PROMIS. (PX 25; PX 324 [Brewer] at p. 141)

During the April 19, 1982 meeting, Brewer again referred to the Hamilton memo and launched into a very emotional, even belligerent, tirade. (PX 26; Brewer, T. 1639; Kelley, T. 1397) During this part of the discussion of the Hamilton memo, Brewer made a number of specific statements regarding the memo. (PX 324 [Brewer] at p. 143) He stated that the Hamilton memo was unnecessary because in Brewer's view DOJ had already acknowledged INSLAW's right to sell Enhanced PROMIS. (PX 324 [Brewer] at pp. 144-145) Nevertheless, and despite the obvious inconsistency, it was Brewer's further understanding, he said, that while INSLAW had the right to sell Enhanced PROMIS, DOJ had unlimited rights to such software, including the right "to give it away" to those very public and private sector entities to which INSLAW would be attempting to market PROMIS. (PX 324 [Brewer] at pp. 146-147; Brewer, T. 1683-1684) DOJ has the audacity to contend that "[it] is in no way inconsistent" for INSLAW to have "the right to sell . . . PROMIS" at the same time that DOJ has "unlimited rights" to give PROMIS away to INSLAW's intended customers. (DRPPFF 167)

Brewer also questioned INSLAW's ability to perform the PROMIS Contract and indicated that a number of people at DOJ were upset with INSLAW and that the Hamilton memo had caused all kinds of problems. (PX 26; PX 324 [Brewer] at pp. 172, 174-175) Brewer further questioned the quality and timeliness of INSLAW's work, citing the Illinois Criminal Justice Coordinating Council, the Michigan Prosecuting Attorneys' Association and others as sources of this information. (PX 26; PX 324 [Brewer] at pp. 175-176)

Finally, Brewer strongly challenged INSLAW's right to claim ownership of, and complete domain over, Enhanced PROMIS. (PX 26; PX 324 [Brewer] at p. 177)

Another matter of discussion by Brewer at the April 19, 1982 meeting was a supplemental request for payment from INSLAW in the amount of $125,000 in regard to the BJS contract (PX 324 [Brewer] at pp. 141-142; Brewer, T. 1638, 1679; Hamilton, T. 144, 200). Brewer contacted the superior of the contracting officer on the BJS contract and asked that a "preliminary notice" of default be issued on the contract2 as well as a reprimand to INSLAW for failing to comply with the "Limitation of Cost Clause." (PX 27) Subsequent to the meeting and at Brewer's insistence, INSLAW agreed to absorb this $125,000 expense into the PROMIS Contract without increasing the total cost of the PROMIS Contract and without any additional payment under the BJS Contract. (PX 324 [Brewer] at pp. 276-278; Brewer, T. 1640; Hamilton, T. 145)3

Subsequent to the April 19, 1982 meeting, Brewer met with officials of the District of Columbia U.S. Attorney's Office to recommend that they not go forward with Phase II of the contract. (PX 232; PX 237; PX 324 [Brewer] at p. 123; Brewer, T. 1674) INSLAW was not formally notified of this decision until August 25, 1982, although it had successfully completed Phase I of the D.C. U.S. Attorney's Contract on May 31, 1982. (Hamilton, T. 142; PX 37; PX 38; PX 48) This formal notice was given just 13 days after INSLAW received a letter from Deputy Attorney General Stanley Morris dated August 11, 1982, which noted that INSLAW could assert proprietary rights to any privately financed PROMIS enhancements. (Hamilton, T. 138-140, 277; Merrill, T. 775- 776; PX 36)

Brewer played a very important role in the decision not to go forward with Phase II of the D.C. U.S. Attorney's Office contract. (PX 232; PX 237; PX 324 [Brewer] at p. 124) Brewer identified the purported basis for this decision, in part, as his understanding that INSLAW was not able to perform because of the demands being made upon INSLAW under the new three-year, PROMIS Contract (PX 324 [Brewer] at pp. 124-125; Brewer, T. 1635), notwithstanding that the latter contract had only been in effect a few months.

Based on prior discussions with DOJ officials, INSLAW had been led to believe that it would be awarded Phase II of the D.C. U.S. Attorney's Office contract and had planned upon $600,000 of revenue from Phase II for estimating its overhead rate for all of its DOJ contracts and grants. (Hamilton, T. 143-144; Merrill, T. 774) After the decision not to go forward with Phase II had been made, Brewer was informed by INSLAW's comptroller, Murray Hannon, that denial of the $600,000 Phase II contract resulted in a precipitous increase in INSLAW's overhead within a few months of the decision, as Brewer had been forewarned would happen. (PX 324 [Brewer] at p. 125)

Finally, while the Bua Report went out of its way in an attempt to exonerate Brewer, it is noteworthy that the Bua Report did not even address the unrefutable fact that DOJ failed totally to act upon, let alone consider, INSLAW's repeated assertions of bias on the part of Brewer. As Judge Bryant found:

INSLAW attributed its troubles to an acute bias on the part of Brewer, who according to it was intent on running the company out of business. INSLAW lodged many complaints of bias and made several requests of DOJ to investigate these complaints and give some relief from what it perceived to be grossly unfair treatment. _DOJ made no meaningful response to these complaints_, and INSLAW's fortunes did not change. (Emphasis added.) (D. Ct. Mem. Op., p. 6) C. DOJ Obtained Enhanced PROMIS through Fraud and

Deceit

The Bua Report concluded that "[t]he evidence we have compiled to date does not support a finding that DOJ employees intentionally deceived or defrauded INSLAW, or that there was a scheme to trick INSLAW into turning over its proprietary software." (Page 125) This conclusion purportedly is supported on the basis of a review of the deposition and trial testimony, documents and interviews of "many of the individuals involved," and the review of additional unspecified documentary evidence. Not surprisingly, the Bua Report does not disclose the identity of every one of the individuals interviewed or the "additional documentary evidence" reviewed. In fact, however, virtually none of the witnesses offered by INSLAW during the trial was interviewed by the authors of the Bua Report, and those who were interviewed commented at the time on the perfunctory character of the inquiry. Indeed, it is astonishing that the authors of the Bua Report could conclude, on the basis of interviews with DOJ personnel conducted over 10 years after the events in question and following an extensive trial and extraordinary post-trial publicity, that those individuals acted only in the "best legitimate interests of the government. " (Page 125) To accept the self-serving, long after-the fact and post hoc rationalizations of these individuals over their testimony at trial, which testimony clearly evidenced their propensity for lying and covering up the truth, as found by two federal courts, is ludicrous.4

1. The Advance Payment Dispute

Under the PROMIS Contract, INSLAW was entitled to receive payments in advance of the waiting period usually necessary to process an invoice. In order to qualify for the advance payment clause, INSLAW had to represent that it was not then capable of obtaining financing from banks or other traditional commercial sources. The contract also contained a provision that prohibited INSLAW from pledging its rights under the contract.

In November 1982, INSLAW informed DOJ that it had violated inadvertently a technical covenant in the contract by assigning its government invoices as collateral for a bank line of credit that it had obtained in April 1982. DOJ responded to this by threatening to terminate the advance payment clause and by demanding that INSLAW turn over a copy of its software to DOJ. The bankruptcy court found that the advance payment dispute was manufactured, without justification, as a mechanism to injure INSLAW and to require INSLAW to provide DOJ with a copy of the software that would, in turn, enable DOJ to implement the software in-house.

The Bua Report rejected the conclusion reached by the bankruptcy court. In doing so, the authors of the Bua Report seek to justify the conduct of DOJ on the basis that DOJ's action was predicated upon its belief that INSLAW had "lied" to it. They conclude that it was the misrepresentations by INSLAW concerning its ability to obtain outside financing that was the primary reason for DOJ giving notice of termination of advance payments. The authors of the Bua Report assert that, after viewing the "demeanor" of the contracting officer, they concluded that his version was believable on this point. This conclusion, however, ignores virtually all of the evidence in the record relating to this subject.

First, the record is undeniably clear that, on February 19, 1982, prior to the issuance of the contract, when INSLAW sought the so-called advance payment provision, commercial bank financing was not available. Thus, INSLAW's representation to DOJ at that time was correct and most certainly was not a lie. In April 1982, largely on the strength of the $10 million contract award, INSLAW was able to secure an additional line of credit from the Bank of Bethesda. This credit was obtained, in part, based upon the pledge of the receivables to the Bank. Thus, contrary to the assertion in the Bua Report, INSLAW was not in the process of obtaining commercial financing at the time that it represented in its formal request that it was unable to do so, and there is no conflict in the representation made in February, prior to the contract, and the subsequent effort to obtain financing in April, after the contract. The effort to obtain financing took place later, and was predicated on the award of the contract. Thus, INSLAW neither lied nor misrepresented anything to DOJ.

Notwithstanding, there is no dispute that the pledging of the receivables resulted in a technical violation of the contract. In November 1982, this technical violation was discovered by DOJ's auditor Robert Whitely and discussed by him with INSLAW. At that time, Whitely told INSLAW that he was fully satisfied with the foregoing explanation and that, since DOJ was in no way negatively impacted by the line of credit or the pledge, he would not raise any question in the current audit about this matter. Whitely fully acknowledged these facts, and particularly the fact that the government was not placed in any financial risk as a result of the technical violation. (PX 345 [Whitely] at pp. 36-38, 40-44; Whitely, T. 1673-1764; Hamilton, T. 166-167) However, when Whitely met with Videnieks and Brewer and indicated his discovery of the technical violation, they seized on the issue and maneuvered it into a controversy when none really existed. Whitely later testified at trial that he had been concerned about INSLAW's near insolvency, but could not produce any contemporaneous documentation to verify the truthfulness of such claims.

Second, despite considerable written discussions within DOJ concerning this matter, there is no record whatsoever of any DOJ employees stating their belief that INSLAW had lied to them. In fact, while Brewer and the contracting officer purportedly were concerned about a substantial deterioration in the financial condition of INSLAW, as well as other concerns that they enumerated in writing, at no time did they state their belief that INSLAW had engaged in any misrepresentations. Nor did they seek to justify their conduct on that basis during their depositions or at trial. In short, while they may have asserted this so-called "lie" argument to the authors of the Bua Report, over 10 years after the fact, they most certainly did not raise this argument at any earlier time.

Third, the entire premise on which DOJ threatened to terminate the advance payment provision (i.e., the deteriorating financial condition of INSLAW) was found by the bankruptcy court to be a complete fabrication and a pretext for demanding access to the computer software. Not surprisingly, this wealth of evidence was totally ignored in the Bua Report.

For example, despite the expressed concerns about the financial condition of INSLAW, neither Brewer nor Videnieks could identify any evidence which led them to believe that INSLAW's financial condition had substantially deteriorated since the award of the PROMIS contract in March 1982, nor any evidence of any fraud. (PX 324 [Brewer] at pp. 232-233; 241-245; Brewer, T. 1630; Videnieks, 207-208) In fact, Brewer and Videnieks were mistaken in their assumption that INSLAW's financial condition had deteriorated during the latter half of 1982; INSLAW was much stronger in December 1982 than at the time the PROMIS contract began. (Hamilton, T. 162) In fact, during 1982, INSLAW was able to increase a previously existing line of credit of $700,000 with First American Bank to a $1.2 million line of credit from the Bank of Bethesda. (Hamilton, T. 159; Merrill, T. 799) In addition, between August and December 1982, INSLAW entered into the co-marketing agreement with IBM. (Hamilton, T. 160; Merrill, T. 799) Perhaps most important is the fact that INSLAW had obtained the PROMIS contract, and prospects were strong for successful completion of the contract. (Hamilton, T. 160-161; Sherzer, T. 958-959)

Notwithstanding the evidence to the contrary, Brewer informed Tyson, Director of EOUSA, about these same unsupported concerns. (PX 49; Hamilton, T. 156-157) In a December 9, 1982 memo to Tyson, Brewer raised the following issues:

a. The prospect of INSLAW's bankruptcy;

b. The possible need for in-house EOUSA personnel to

take over the PROMIS Project;

c. Substantial questions of fraud being raised by

INSLAW's accounting practices;

d. The need for close auditing review of INSLAW's

costs, particularly overhead and computer center

costs; and

e. The prospect of terminating the PROMIS Contract.

(PX 49; Hamilton, T. 156-156)

The December 9 memo also expressly detailed EOUSA's commencement of planning for carrying-on the PROMIS Contract Project in-house, using EOUSA employees ". . . in the event of trouble" and stated that DOJ had "demanded, as is our right, from INSLAW copies of all software documentation ...." (PX 49) (Emphasis added.) This planning was not disclosed at any time by DOJ to INSLAW. (Hamilton, T. 165) Had this planning been disclosed to INSLAW, INSLAW would not have turned its software over to DOJ pursuant to Modification 12. (Hamilton, T. 165-166)

The December 9, 1982 Brewer memo was based on several fundamental misconceptions. First, INSLAW had not incurred $975,000 of additional bank debt, but $275,000, and the additional borrowing was necessary to defray partially $344,000 that

DOJ

then

owed

INSLAW for its time-sharing services. (Hamilton, T. 157-158) Second, Brewer misconstrued the Advance Payments provision of the contract as a mechanism for "payment-in-advance" when it was merely a contractual procedure for DOJ's timely payment of INSLAW's vouchers for work already completed. (Hamilton, T. 158) Third, Brewer erroneously concluded that INSLAW had "reprogrammed" $100,000 in contributions to the INSLAW employee profit-sharing plan because INSLAW had not yet deposited the annual contribution, when, in fact, the deposit was not yet due and owing. (Hamilton, T. 158-159) Fourth, Brewer incorrectly concluded that the nature of INSLAW's indebtedness had become "desperate" by December 1982, when, in fact, INSLAW believed it had just obtained DOJ's " sign-off" to its rights to license its privately-financed enhancements, had established its first sales and marketing unit, and had consummated a national co-marketing arrangement with IBM for the public sector. (Hamilton, T. 159- 161) Fifth, Brewer confused a version of PROMIS developed under the Pilot contract using a COBOL compiler that the hardware manufacturer (PRIME) had subsequently discontinued, with a version developed by INSLAW's European subsidiary based on current compiler technology; as a consequence of his lack of understanding, Brewer had suggested possible fraudulent accounting practices at INSLAW. (Hamilton, T. 162-165) INSLAW's independent public accountants had, in fact, reviewed and approved the accounting transactions. (Hamilton, T. 165)

The Bua Report concludes that DOJ's actions concerning the advance payments were fully justified by the memoranda they wrote concerning the matter. According to the Bua Report, "[t]o believe that DOJ's concerns about INSLAW's financial health were actually a pretext, would require a finding that certain DOJ employees were so prescient that they created numerous internal documents, and indeed even misled their superiors, just so that they could defend themselves against a claim of theft years later." No such finding would be required. In fact, the only finding that is necessary is that Brewer, for all of the reasons found by the bankruptcy court, set about to manufacture a reason to justify obtaining the software. There is nothing unusual in employees attempting to paper the record in an effort to justify their actions and that is exactly what happened here. The evidence amply supports the bankruptcy court's findings that DOJ's justification for seeking the software and cancelling the advance payments provisions was unsupportable.

In an effort to justify the conduct of DOJ, the authors of the Bua Report go to great lengths to rebut the conclusion of the bankruptcy court that Brewer and Videnieks had no basis to believe that INSLAW was near insolvency and that Whitely's testimony in support of this argument was manufactured solely for use at trial. According to the report, "Judge Bason stated this conclusion after finding that Whitely never prepared any report, that Whitely never referred to INSLAW's potential insolvency in his deposition, and that Videnieks did not mention Whitely in his deposition." The report concluded that "all of these factual assertions appear to be just plain wrong." (Page 131-132) In fact, Judge Bason was absolutely correct and it is the authors of the Bua Report that are "just plain wrong."

Judge Bason first found that neither Brewer nor Videnieks at their depositions could identify any evidence to demonstrate a substantial deterioration in INSLAW's financial condition, notwithstanding repeated opportunities during their depositions to provide such evidence.5 While Videnieks did suggest that he had been informed by the audit staff of the possibility of INSLAW's financial failure, this was not evidence of any deterioration in the financial condition of INSLAW. Judge Bason next found that while Whitely asserted at trial his conclusion regarding potential insolvency, Whitely did not prepare a written report or any other document which "detailed" his alleged conclusions. Judge Bason concluded, quite reasonably, that if Whitely had reached such an obviously important, if not critical, conclusion regarding the financial condition of INSLAW, it would have been documented in his work papers, which it was not. In fact, on rebuttal, INSLAW adduced the testimony of Whitely's successor, Ms. Schacht, who testified that there was no reference to such purported insolvency in the DOJ audit file nor any discussions on this subject within DOJ's auditing group. (Schacht, T. 2452) Not surprisingly, DOJ was unable to produce any such written records that supported Whitely's trial testimony, since none existed. While Whitely may have said he prepared "work papers," the facts prove otherwise. Finally, Judge Bason found that Whitely's other conclusions concerning the Irish subsidiary receivable and the capitalization of software development costs were directly contrary to the considered opinion of Arthur Young & Co., a recognized independent international auditing firm, which had given INSLAW, a "clean," unqualified audit opinion as to its financial condition, and itself was the source of INSLAW's accounting treatment of its capitalization. (Whitely, T. 1777-1779)

Obviously, Judge Bason was fully justified, based on the record before him, in concluding that the basis for the advance payment dispute was totally unjustified and manufactured. The Bua Report does nothing to refute the conclusions reached by Judge Bason, and its efforts to attack Judge Bason in this regard are pathetic.

2. DOJ's Demand for the Software

The bankruptcy court concluded that DOJ knowingly set out to obtain the version of PROMIS to which it was not entitled under the contract and which DOJ understood contained proprietary enhancements belonging to INSLAW. The district court concurred with this conclusion: Thus, the court is drawn to the same conclusion reached by the bankruptcy court; the government acted willfully and fraudulently to obtain property that it was not entitled to under the contract. (D. Ct. Opinion, p. 34)

The Bua Report stated that this conclusion required proof that DOJ set out to obtain something to which it was not entitled. Because DOJ purported initially only to seek the public domain version of the software, the Bua Report concludes that proof of DOJ's fraudulent intent is missing. The Bua Report concludes that INSLAW had failed to maintain a contract version of PROMIS and that, had they done so, there would have been no proprietary rights dispute, since INSLAW's production of such a version would have satisfied any obligation it had under the contract. This entire argument displays a fundamental misunderstanding of the contract.

First, the contract contemplated that DOJ promptly would select the computer it wished to have installed at the 20 largest U.S. Attorneys' Offices and that INSLAW would then implement the public domain software on that hardware. This software then consisted of two separate parts: the Pilot Project version and the 5 BJS enhancements. Until DOJ selected its computer hardware, there was no reason for INSLAW to maintain a separate public domain version consisting of these then two separate and non- integrated parts. The integration of the five BJS enhancements with the Pilot Project version had to be done after DOJ selected the specific computer hardware. The Pilot Project used PRIME computers, and DOJ had not determined what brand and model of computers it would buy for the 20 largest U.S. Attorneys' Offices. For example, DOJ would not have reimbursed INSLAW to create a separate Pilot Project PLUS five BJS enhancement version for operation on a particular brand and model computer such as the VAX mid-range computer from Digital Equipment Corporation unless and until DOJ selected VAX for the 20 U.S. Attorneys' Offices. Instead, DOJ selected PRIME.

Second, contrary to the assertion in the Bua Report, INSLAW did have a version of public domain PROMIS that was frozen and bug free. The U. S . Attorneys' Offices in San Diego and Newark were each operating the Pilot Project version of PROMIS, and INSLAW was supporting that version and keeping it "bug free." The five BJS enhancements had not been created at the time of the original Pilot Project implementation. Whatever hardware DOJ selected would also be used to replace the hardware in the San Diego and Newark Pilot Project offices. Consequently, while INSLAW ultimately would have to implement the Pilot Project version, as supplemented by the BJS enhancements in each of the two Pilot Project offices as well as in the other 20 largest U.S. Attorneys' Offices, INSLAW could not reasonably have begun to add the five BJS enhancements to the bug-free Pilot Project version until DOJ made its computer hardware selection. DOJ had not made its selection of the hardware by the time DOJ demanded the time- sharing version of PROMIS.

Third, the conclusion of the Bua Report that DOJ was unaware of the fact that the version it sought contained the proprietary enhancements is wrong. It is undisputed that during the period of time before DOJ selected its hardware, it was understood that INSLAW would accommodate DOJ by allowing the larger offices access to INSLAW's computer in Maryland (not Virginia) on a time- sharing basis. It was expected that DOJ would order the hardware promptly, so that this accommodation would be short term. Since it was not possible to implement the contracted-for version until the hardware was selected, there was no reason to maintain a separate copy of that version, and DOJ certainly knew this fact.

For this temporary time-sharing accommodation to DOJ, INSLAW used its proprietary VAX version of PROMIS in which other proprietary enhancements also had been included ("the time- sharing version") There was no contractual requirement that INSLAW provide DOJ with this time-sharing software, and therefore INSLAW had, quite properly, not anticipated that DOJ would demand the underlying software which contained these proprietary enhancements. Indeed, no one connected to the contract ever contemplated the delivery to DOJ of the time-sharing version, since this version was being used merely as a short-term accommodation.

As

DOJ

was not expected ever to take delivery of the time-sharing version, INSLAW could reasonably have planned to use its proprietary version in the time-sharing service, because this improved version would enable INSLAW to provide more responsive time-sharing services to each of the largest U.S. Attorneys' Offices.

When DOJ demanded that INSLAW turn over its PROMIS software, DOJ still had not selected either the minicomputer or the word processing hardware that would ultimately be used to run minicomputer PROMIS at the 20 larger offices and the word processor-based case tracking software at the 74 smaller offices. Thus, DOJ was not at that time prepared to implement the version of PROMIS called for under the terms of the contract and, indeed, INSLAW could not prepare the contracted-for version of PROMIS for DOJ until DOJ had decided which minicomputer hardware to procure. Therefore, when DOJ used the pretense of threatened termination of advance payments as leverage to obtain the software, it had to know that it was seeking the enhanced time-sharing version of PROMIS to which it was not entitled under the contract, and which DOJ understood contained proprietary enhancements belonging to INSLAW.

Finally, contrary to the assertion in the Bua Report, whether DOJ had knowledge that it was seeking the time-sharing version at the time it sent its initial request letter is not a critical issue, because DOJ clearly understood that it was seeking the proprietary version at the time it negotiated Modification 12. By that time, there is no dispute that DOJ was aware that the software it was demanding was the version containing the proprietary enhancements. Even the Bua Report concedes that by the time the parties were negotiating Modification 12, INSLAW had informed DOJ that the VAX version of PROMIS being provided under the time-sharing arrangements contained enhancements that INSLAW considered proprietary. (Page 136)

In fact, beginning at least as early as February 4, 1983, when DOJ and INSLAW met to discuss DOJ's threatened discontinuation of the advance payment provision, DOJ specifically was put on notice that its simultaneous demand for the underlying software would require INSLAW to turn over the proprietary version of that software. Immediately upon learning of this fact, there is no dispute that DOJ refused to resolve the advance payment issue independently of the software issue, notwithstanding that the two issues were unrelated. Indeed, as even the Bua Report acknowledged, "from at least this point on, DOJ collapsed the negotiations of the advance payment dispute into the negotiations of the software request and the proprietary rights issue." (Page 28) Thus, when DOJ used the pretense of threatened termination of advance payments as leverage to obtain the enhanced time-sharing software, it knowingly set out to obtain a version of PROMIS to which it was not entitled under the contract, and which DOJ understood contained proprietary enhancements belonging to INSLAW.

Even if DOJ started out to obtain nothing more than the contracted-for version (albeit for improper purposes), DOJ clearly was seeking the proprietary version at the time it put into effect its plan to "get the goods"6 via Modification 12. As such, the absence of evidence that DOJ knew, when it initially requested a copy of the PROMIS codes, that it would obtain something other than the contract version is irrelevant; the evidence is undisputed that it knew that it was going to receive the proprietary version when it set about to obtain that version without any intention to negotiate in good faith over its use. Thus, there is no "great weakness" in Judge Bason's conversion theory.

3. The Negotiation of Modification 12

The parties thereafter entered into negotiations to resolve both the proprietary rights and advance payment issues, ultimately resulting in the execution of Modification 12 to the contract. The Bua Report acknowledges that, without regard to whatever rights DOJ had to the software prior to Modification 12, DOJ clearly was "bargaining away" some of its rights when it agreed to enter into Modification 12, and moreover, was obligating itself to "live up" to the terms of that Modification. (Page 136-137)

Under this Modification, INSLAW agreed to turn over its proprietary software on the basis of certain explicit commitments by DOJ. First, DOJ was to bargain in good faith to identify the proprietary enhancements contained within enhanced PROMIS. Second, DOJ was to decide within a reasonable time which enhancements it wanted to use, and to the extent that it did not want to use certain of these enhancements, to direct INSLAW to remove the enhancements it did not want. Third, DOJ was to bargain in good faith with INSLAW as to the price to be paid for those enhancements it did want.

The bankruptcy court found that DOJ never intended to meet its commitments under Modification 12 and that once DOJ had received Enhanced PROMIS pursuant to Modification 12, DOJ thereafter refused to bargain in good faith with INSLAW. DOJ instead "engaged in an outrageous, deceitful, fraudulent game of cat and mouse, demonstrating contempt for both the law and any principle of fair dealing." While conceding that DOJ's conduct following execution of Modification 12 was subject to criticism and demonstrated "poor judgment," the Bua Report rejected the bankruptcy court's finding of DOJ fraud under Modification 12, based largely upon its post hoc meetings with Rugh and Videnieks:

Bankruptcy Judge Bason found that DOJ "never intended to meet its commitment" under Modification 12. We do not believe the evidence supports this finding. The weight of the evidence demonstrates that the DOJ employees involved reviewed INSLAW's submissions in good faith, and responded in ways that they subjectively believed were within the government's legitimate rights under the contract. We find no evidence of bad faith or intentional wrongdoing.

This conclusion is belied by any reasonable and objective review of the facts relating to this matter. It is also belied by the very reasoning adopted by the authors of the Bua Report. The authors conclude that DOJ had an affirmative obligation to "live up" to the procedures contained in Modification 12 and in a March 18, 1983 letter written by Videnieks which provides the foundation for Modification 12. Together, these documents clearly obligated DOJ to negotiate in good faith with INSLAW to determine which of the enhancements were proprietary and, thereafter, which of those enhancements DOJ wanted to be included in the software delivered under the contract. The Bua Report found that DOJ failed to negotiate with INSLAW regarding an acceptable methodology for determining which enhancements were proprietary. Indeed, the Bua Report concluded that DOJ refused to accept the methodology proposed by INSLAW, refused to explain the basis of that rejection, and refused to provide INSLAW with the methodology that would be acceptable to DOJ. In fact, the Bua Report concluded that "[i]t is difficult for us to see a good reason not to tell INSLAW what criticism DOJ had of INSLAW's methodology ... it was in neither party's interest to have INSLAW guessing about what was the problem with the methodology." (Page 139) Yet, notwithstanding having concluded that DOJ was obligated to negotiate in good faith to live up to its commitments under the Modification, and having concluded that DOJ failed to do so for no "good reason," the Bua Report concludes that these two failures were not done in bad faith. By definition alone, they most certainly were. Moreover, when put in context, DOJ's actions clearly were a continuation of the ongoing bad faith conduct directed at INSLAW during the entirety of the contract.

By way of background, when DOJ persisted in its attempts to tie resolution of the advance payment issue to the proprietary rights issue, INSLAW initially proposed that the parties enter into an escrow agreement pursuant to which DOJ would receive the software if, and only if, INSLAW went into bankruptcy. (PX 68; Hamilton, T. 167-168; Brewer, T. 1693-1694; Merrill, T. 791)

Although certain DOJ personnel recommended INSLAW's third- party escrow proposal, it was rejected by Brewer and Videnieks, because they could not thereby immediately obtain the software. (PX 73) Videnieks and Brewer discussed this issue on or about March 28, 1983 and decided to propose a letter response to INSLAW's government contracts counsel, Harvey Sherzer, indicating DOJ's intent "to back off [Advance payments] discontinuation and promising non-dissemination [of PROMIS software] in return for delivery of information demanded on 12/6~ (PX 73) Videnieks prepared a draft of this letter which Brewer then rewrote (PX 73). This letter was submitted to William Snider, Administrative Counsel for Procurement, who previously had indicated his preference for a bilateral agreement between the parties embodied in a contract modification. (PX 73)

A March 28 memo further recounts that Videnieks was in full agreement with Brewer about the letter, indicating quite significantly ". . . why do you need signature if you got the goods?" (PX 73; Videnieks, T. 1837-1838)

Snider quickly responded to the Brewer/Videnieks proposal on March 29, "sharply disagreeing on this approach." (Videnieks, T. 1838) At this point, Brewer "forbade" Videnieks from entering into a "Mod" of the contract. (PX 73)7 Brewer did not want a bilateral agreement if he could "get the goods" without it. (Brewer, T. 1704-1705)

On April 5, 1983 Videnieks and Brewer had a telephone conversation in which Brewer told Videnieks that he would "protect" him from "backing down" to Sherzer and Hamilton. (PX 73) After this conversation, Videnieks checked with Snider and "MH" [INSLAW's comptroller, Murray Hannon], who confirmed that a contract modification protecting INSLAW's proprietary enhancements was a precondition to INSLAW's delivery of the software. (PX 73; Brewer, T. 1208) Brewer understood that INSLAW wanted such protection and that INSLAW would remove any enhancements that DOJ did not want. (Brewer, T. 1708-1709)

DOJ's March 18, 1983 response to INSLAW's March 11 escrow agreement proposal dismissed the proposal but did offer, in consideration of "getting the goods," to agree not to disseminate or disclose the PROMIS software beyond EOUSA and the U.S. Attorney's Offices enumerated in the PROMIS contract pending resolution and negotiation of the proprietary enhancements issue "until the data rights of the parties to the contract are resolved." (PX 70; PX 71; Merrill, T. 792; Brewer, T. 1689-1690; Hamilton, T. 168) This proposal by Videnieks was basically the methodology proposed and discussed at the February 4, 1983 meeting. (Merrill, T. 792)

The March 18 letter also stated that once the "data rights" issue was resolved, DOJ would review INSLAW's proprietary enhancements to decide which (if any) enhancements DOJ desired to include in the PROMIS Contract software. (PX 70; PX 71)

Videnieks specifically stated in his March 18 letter that after the proprietary enhancements issue was resolved, DOJ:

. . . will review the effect of any enhancements which are determined to be proprietary, and then either direct INSLAW to delete those enhancements from the versions of PROMIS to be delivered under the contract or negotiate with INSLAW regarding the inclusion of those enhancements in that software. The Government would then either destroy or return the "enhanced" versions of PROMIS in exchange for the Government PROMIS software including only those enhancements that should be included in the software. If this course of action is acceptable to INSLAW there would be no need for an escrow agreement. (PX 70; PX 71; Videnieks, T. 1813-1815)

The enhancements which DOJ did not want would be removed from the software delivered to DOJ. (PX 70; PX 71; Brewer, T. 1690-1691, 1709; Hamilton, T. 330-331) INSLAW understood from Videnieks' letter that it was necessary to resolve the issue of "proprietary enhancements" as soon as possible because INSLAW was scheduled to deliver software to the 20 largest U.S. Attorney's offices beginning in the Summer of 1983. (PX 73; Hamilton, T. 169) INSLAW also understood from Videnieks' letter that it was to identify the enhancements that had been privately financed, with evidence of the source of private funding, and an indication as to why the enhancements were not required to be furnished under the terms of the contract. (Hamilton, T. 170; PX 70; PX 71)

Most importantly, INSLAW understood from Videnieks' letter that DOJ would negotiate with INSLAW to purchase any privately financed enhancements that it desired to keep in the software deliverable under the contract. (Hamilton, T. 171; Merrill, T. 792-793; Gizzarelli, T. 534; Sherzer, T. 977-979; PX 341 [Tyson] at pp. 205-207, 212-214; PX 336 [Snider] at pp. 91-96; PX 70; PX 71)

As of the time of Videnieks' letter, INSLAW was fully prepared to delete any or all enhancements that DOJ indicated it did not desire pursuant to the process laid out in Videnieks' letter. (Hamilton, T. 172-173; Merrill, T. 793)

William Snider, Administrative Counsel for the Justice Management Division ("JMD") and a prime negotiator of Modification 12, understood that Modification 12 was intended to implement Videnieks' letter of March 18 and the intent to negotiate on proprietary enhancements stated in that letter. (PX 336 [Snider] at pp. 7, 90-96) In that regard, Snider further understood that if DOJ wanted INSLAW's proprietary enhancements, then it would pay INSLAW for such enhancements. (PX 336 [Snider] at pp. 91-96) Indeed, Snider had informed INSLAW representatives at a meeting prior to the execution of Modification 12 that DOJ would negotiate compensation to INSLAW for all such enhancements that DOJ wished to use. (Hamilton, T. 177; Sherzer, T. 977; Merrill, T. 790-791)

In fact, however, notwithstanding the obligation of DOJ to negotiate in good faith, Brewer had no intention to negotiate. Indeed, Videnieks, Rugh and Brewer all testified that notwithstanding Modification 12, they had no understanding of any obligation on DOJ's part to negotiate with INSLAW concerning the time-sharing or any other PROMIS software. (PX 324 [Brewer] at p. 163; Brewer, T. 1691-1693) Brewer had discussed his understanding of Modification 12 with a number of people at DOJ and his views in that regard were shared by Brewer's staff and by Videnieks. (PX 324 [Brewer] at pp. 163-164) This glaring admission was ignored totally in the Bua Report, since this admission made at the time of the trial totally contradicts the purported statements made by these individuals to the authors of the Bua Report in their post hoc interviews. Given the fact of these admissions and the fact that DOJ's actions subsequent to Modification 12 were consistent with the admissions, it is impossible to conclude that DOJ's conduct was not taken in bad faith. Moreover, this conduct at a minimum was a violation of the contractual obligations of DOJ under Modification 12 to negotiate in good faith.

In reviewing the entire factual record, Judge Bryant concluded:

Once the software was in the possession of DOJ, there is no evidence that the government ever negotiated in good faith over the existence of the proprietary enhancements claimed by INSLAW. The DOJ put the entire onus

of

proof

on INSLAW, yet never indicated what methodology or proof would be acceptable. The contract entered into by the parties entitled the government to the version of PROMIS then in the public domain. _The expert witnesses demonstrate that INSLAW did enhance the software with private funds. By failing to acknowledge or accept INSLAW's claims. the government continued its fraudulent behavior toward INSLAW. This behavior persisted long after INSLAW filed for reorganization_. (Emphasis added.) (D. Ct. Mem. Op., p. 40)

In the face of the factual record before the two federal courts, it is impossible to conclude that DOJ acted other than in bad faith. Most of the conduct of its key employees is indefensible. Its failure to investigate the assertion of bias also is indefensible. Its repeated false representations to INSLAW's attorneys, as described in detail by the two lower courts, is inexcusable. As Judge Bryant found:

The government accuses the bankruptcy court of looking beyond the bankruptcy proceeding to find culpability by the government. What is strikingly apparent from the testimony and deposition of key witnesses and many documents is that INSLAW performed its contract in a hostile environment that extended from the higher echelons of the Justice Department to the officials who had the day-to-day responsibility for supervising its work. (D. Ct. Mem. Op., p. 36)

Even the most cursory examination of the record leads to the inescapable conclusion of bad faith on the part of DOJ. The Bua Report's contrary conclusion, based upon its long-after-the-fact "demeanor" interviews of the DOJ employees responsible for the bad faith, is simply ridiculous.

4. The Implementation and Use of the PROMIS

Software Beyond the 20 Offices

Under Modification 12, DOJ agreed that it would not distribute the software received under the Modification beyond the offices enumerated under the contract. Subsequent thereto, DOJ began to install this software beyond the 20 offices for which the software was designated. The Bua Report concluded that it was neither improper nor unreasonable for DOJ to "self" install PROMIS beyond the 20 larger offices designated to receive this version of PROMIS under the contract. Once again, this conclusion is belied by any responsible understanding of the contract and the circumstances under which Modification 12 was negotiated.

The contract between INSLAW and DOJ involved two separate, severable, and clearly distinguishable tasks:

1. To create, generate and implement software to be

used on computers ("the computer-based software")

at 20 designated larger U.S. Attorney's Offices

(with an option, admittedly never exercised, to

expand this use, to up to thirty offices)

2. To create, generate and implement a different kind

of software to be used on specified word

processing equipment ("the word processing based

software") at some 74 smaller U.S. Attorneys'

Offices. (PX 17) Thus, Paragraph 1.2 of the contract provides in part:

1.2 The Contractor shall implement PROMIS software and

procedures as modified for the U.S. Attorney's

environment on Government furnished mini-computers

located in the larger U.S. Attorneys' Offices.

Case tracking systems that have been developed to

operate on Government furnished word processing

equipment shall be installed in the smaller U.S.

Attorneys' Offices....

The parties clearly understood that these were separate tasks, and required the development and creation by INSLAW of two different and distinguishable kinds of software, each to be implemented only within the designated types of offices specified in the contract for that particular kind of software. (PX 324 [Brewer] at pp. 215-217; Snider 54-56; Gizzarelli, T. 479, 488, 494-495; PX 341 [Tyson] at p. 41; Hamilton, T. 110-111,115, 132- 134; Merrill, T. 770-771) The computer-based software generated for the 20 larger computer-site offices, as specified in the contract, was to be used only at those offices, and the word processing based software to be developed and created by INSLAW was to be used only at the 74 smaller offices. (Hamilton, T. 132-134; Merrill, T. 764; Gizzarelli, T. 488, 497-499; PX 324 [Brewer] at pp. 215- 216) At no time during any meeting, either before or after the contract was signed, did anyone from DOJ inform INSLAW that DOJ believed that the computer-based software could be used beyond these 20 offices. (Merrill, T. 770; Hamilton, T. 134) The contract did provide, however, that DOJ could extend the implementation of computer-based PROMIS to an additional 10 offices at an added price which the contract specified (and the parties understood) would be negotiated between the parties. (Hamilton, T. 124; PX 17; Merrill, T. 769-770; Gizzarelli, T. 496- 499; PX 324 [Brewer] at pp. 215-216)

In effect, it was as if there were two contracts calling for two types of software to be delivered to two types of offices, a fact clearly understood by DOJ. (Hamilton, T. 110-111, 132-134; Merrill, T. 764; Gizzarelli, T. 488, 494, 497-499) At the time that Modification 12 was executed, both aspects of the contract were still operative. Modification 12 required INSLAW to produce all "computer programs" and documentation for the time-sharing version, the computer-based version, and the word processing based version. (Merrill, T. 786; Sherzer, T. 980; Hamilton, T. 152, 2583-2588) DOJ never told INSLAW that it was not required to produce all of this under Modification 12 or that INSLAW was producing too much. (Merrill, T. 787)

Contrary to the mindless conclusion reached by the Bua Report, the provisions of Modification 12 must be read consistently with the existing contract, the terms of which (Modification 12 unequivocally states) were not otherwise changed. (Gizzarelli, T. 535; Sherzer, T. 1030) Thus, DOJ's agreement not to disseminate or use the software beyond the 94 offices has to be read in the context of the two contract tasks that existed at that time. This means that the computer-based software would not be disseminated beyond the 20 designated larger offices for which this software was being created and developed, and the word processing based software would not be disseminated beyond the 74 offices for which that type of software







was being created and developed. (Merrill, T. 787-788; Hamilton, T. 177-178; Gizzarelli, T. 535)

Contrary to the baseless assertions in the Bua Report, Modification 12 sought to effect delivery to DOJ of all computer programs developed under the contract, as well as INSLAW's proprietary enhancements then incorporated in the software. The statement of work defines the software for the word processing machines as computer programs, (Hamilton, T. 2583) and subparagraphs 3 and 5 of Modification 12 specify the delivery of software for operation on word processing machines (Hamilton, T. 2584-2586). In addition, Modification 12 was directly related to and fully embodies the process and intent of Videnieks' letter of March 18, 1983. (Hamilton, T. 173; Gizzarelli, T. 535-536; Merrill, T. 793-794; PX 336 [Snider] at pp. 7, 90-96)

Subsequently, when DOJ unilaterally terminated the word processing part of the contract for the convenience of the Government following the execution of Modification 12, the 74 word processing offices dropped out, and all that remained were the 20 offices that were to receive the computer-based version of PROMIS (plus the never-exercised option to extend the latter version to ten additional offices at additional cost). At no time had anyone from DOJ informed INSLAW that it was DOJ's intention to implement PROMIS beyond the 20 offices specified in the contract. Thus, only these 20 offices were among those the parties contemplated would receive the computer-based PROMIS, and it was only these offices that could receive the INSLAW software until the data rights issue was resolved. No one ever contemplated that DOJ would have the right to disseminate the computer-based software beyond the 20 offices, and most certainly not while there was still a dispute over the ownership rights in that software.

Finally, whether DOJ had the right to implement the software beyond the 20 offices, while clearly relevant in the context of an automatic stay bankruptcy proceeding, is not relevant to the more important question of whether DOJ had the right to continue to use the proprietary software, without compensation to INSLAW, after the data rights issue was determined in favor of INSLAW. During the course of the bankruptcy proceedings, extensive evidence was introduced that demonstrated that the software used by DOJ was the proprietary, non-public domain version created by INSLAW using non-government funding, and that this proprietary software was not deliverable under the contract. Thus, even if DOJ had the right to use the software until the data rights issue was resolved, once that issue was resolved by the court in favor of INSLAW, DOJ no longer could continue to use the software without appropriate payment to INSLAW. Even DOJ has conceded that its right to use the software under Modification 12 was limited to the period of time during which the parties were required to negotiate the data rights issue. DOJ understood that it could not continue to keep the software to the extent it contained proprietary enhancements without paying INSLAW for the right to do so. Yet, notwithstanding the extensive findings of the bankruptcy court, as affirmed in total by the federal district court, that the software used by DOJ rightfully belonged to INSLAW and that DOJ was not entitled to use that software, DOJ has continued to use the software without compensating INSLAW II. BUA'S INVESTIGATION OF THE EVIDENCE THAT DOJ ATTEMPTED TO CAUSE THE CONVERSION OF THE INSLAW BANKRUPTCY BY IMPROPER MEANS -- THE "INDEPENDENT HANDLING" PROCEEDING

The Bua Report devotes 41 pages to an analysis of the factual underpinnings of the bankruptcy court's findings in the "Independent Handling" proceeding.

The Independent Handling proceeding in the Spring of 1987 arose from INSLAW's request to the bankruptcy court to insulate the handling of the INSLAW Chapter 11 reorganization by DOJ's U.S. Trustee's program from improper influence by DOJ's Executive Office for U.S. Attorneys. Such improper influence was reflected in the contemporaneous handwritten notes of DOJ Contracting Officer Peter Videnieks that INSLAW obtained during the first quarter of 1987 in litigation discovery.

A separate adversarial hearing ensued on this subject, and the bankruptcy court found that DOJ officials had, in fact, secretly attempted in 1985 forcibly to convert INSLAW from a Chapter 11 reorganization into a Chapter 7 liquidation in order to prevent INSLAW from seeking redress in the courts for DOJ's theft of the PROMIS software in April 1983.

While noting that the covert DOJ liquidation effort was "not free from doubt," the report concludes that there is "insufficient evidence to support a finding that DOJ planned or attempted to convert the Inslaw bankruptcy case or engaged in any cover-up to conceal the conduct alleged." This portion of the report demonstrates, once again, that the Bua investigation's focus and, indeed, its predisposition, was not to investigate DOJ wrongdoing previously demonstrated to two courts through fully litigated factual findings, but, instead, to justify DOJ's conduct and exonerate the wrongdoers.

The report correctly states that INSLAW's evidence in the proceeding consisted essentially of six parts: (1) statements and testimony by Anthony Pasciuto, then Deputy Director of DOJ's Executive Office for U.S. Trustees; (2) handwritten notes of Peter Videnieks', DOJ's Contracting Officer for the INSLAW contract; (3) testimony and notes of Gregory McKain, a senior INSLAW computer software engineer; (4) evidence that U.S. Trustee William White requested that the bankruptcy court add language barring him from disclosing INSLAW data to anyone at the Executive Office for U.S. Trustees; (5) statements and deposition testimony of U.S. Bankruptcy Judge Cornelius Blackshear; and (6) evidence regarding the planned transfer of Assistant U.S. Trustee Harry Jones from New York to Washington to work on the INSLAW case.

The core of the bankruptcy court's findings rests on the intertwined relationship between the Videnieks notes, Rugh and McKain's testimony, and McKain's notes. Videnieks made contemporaneous notes of a telephone conversation he had with Brewer's deputy, Jack Rugh, on February 20, 1985 (13 days after INSLAW filed its Chapter 11 petition):

JR called re[garding] "our computer". Brick [Brewer] talked to Stanton . . . "No way "11"-will be "7". Need home for computer.

Videnieks' notes document a conversation with "JR" [Jack Rugh] and what Rugh, a computer system executive for EOUSA, said "re[garding] our computer. "8 The words following "Brick talked to Stanton. . ." are a quote of what Stanton, the Director of the Executive Office for U.S. Trustees, said. Quotation marks are used to bracket what Stanton said: "no way '11' -will be '7'." It cannot reasonably be inferred, as the Bua investigators infer, that these four prefatory words in a seamless line of thought and preceding an obvious quote of Stanton are somehow disconnected from the quote they precede. As justification for such a conclusion, the report cites "a space in the notes between the words 'Brick talked to Stanton' and the words 'no way 11 will be 7'." In fact, there are three dots after the word "Stanton," indicating all the more that the phrases following are quotes and are connected to the rest of the conversation.

Rugh testified that the notes correctly summarized what he had told Videnieks, but that the statement "No way 11-will be 7" represented merely his own personal view that INSLAW would be liquidated and not something Brewer had told him as a result of Brewer's conversation with Stanton. Rugh also testified about subsequently calling INSLAW's McKain and telling him that he did not think INSLAW would survive in bankruptcy, and trying to arrange for the future hiring of McKain by DOJ.

McKain testified, however, that Rugh told him that they had "talked to the trustees" and that the trustees said INSLAW was not going to make it and that INSLAW would be out of business in 30 to 60 days. McKain made contemporaneous notes which were fully consistent with his testimony. Moreover, he acted immediately in a manner consistent only with his version of events: He went to Mr. Hamilton and repeated what Rugh had told him, and asked whether this was true. Incensed, Hamilton, in turn, had counsel contact the local U.S. Trustee, who said that he had not made any such prediction, that it must have come from the Executive Office for U.S. Trustees, i.e., from Stanton's office. Although Rugh acknowledged that he may have mentioned talking to the trustees, he categorically denied telling McKain that the trustees had said INSLAW would likely be liquidated in 30 to 60 days. The bankruptcy court was thus presented with a classic credibility conflict: Rugh's testimony and McKain's testimony were irreconcilable. The court found that McKain was telling the truth and that Rugh was lying. This conclusion was based not simply upon the court's assessment of the witnesses' relative courtroom demeanor, but also upon the corroboration of McKain's version provided by his consistent contemporaneous notes and his and Hamilton's unmistakably consistent actions: having INSLAW's counsel contact and complain to the U.S. Trustee. If, as Rugh maintained, Rugh had merely said that he thought that the company would be liquidated, INSLAW might have complained to Rugh's superior, Brewer, or to the bankruptcy court, but not to the U.S. Trustee.

The testimony by Rugh that his statements to McKain represented only his "personal view" that INSLAW would not survive -- as opposed to what Brewer had told him as a result of his discussion with Stanton -- was extremely suspect on its face. Rugh is a non-lawyer who acknowledged that he had known of only one or two prior bankruptcy cases in his life. It is surely unlikely that Rugh would have taken the step of contacting one of INSLAW's chief computer software engineers and offering him a job based only on his own layman's opinion that the company would not survive. In addition, Videnieks' notes contain the statement "need home for computer." This reflects a seeming certainty that INSLAW would be put out of business imminently -- prompting the need for Rugh or someone in EOUSA to take action to arrange a new site for the DOJ computer then being used to operate PROMIS in the U.S. Attorney's Office for the District of Maryland from INSLAW's Maryland computer center.

Finally, it was the threatened immediacy of liquidation forecast by Rugh that provoked such an intense response by McKain and, in turn, by Hamilton. Liquidation in 30 to 60 days was completely inconsistent with the briefing from INSLAW's bankruptcy counsel that McKain and all INSLAW employees had received only days before, to the effect that INSLAW could expect to operate normally during the Chapter 11 Reorganization. Now, according to Rugh, the employees would be out of work in 30 to 60 days. Even if it were plausible that Rugh had merely stated his "personal view" about eventual liquidation, the notion that he also expressed his "personal view" that it would happen in 30 to 60 days is simply inconceivable. Yet, if Rugh had not stated that liquidation would likely occur very soon, McKain would not have reacted as he did. The bankruptcy court's resolution of the Rugh-McKain credibility dispute is thus solidly grounded on corroborating evidence. It is obvious that both McKain and Rugh gave the testimony at issue under oath and subject to cross-examination in a courtroom before a fact finder. It is hardly appropriate for Special Counsel Bua -- on the basis of interviews of some of the witnesses (McKain was not interviewed) five years removed from that courtroom -- to opine that had he been there, he would have resolved the dispute differently. That he would undertake to do so, reflects a transparent effort to exonerate DOJ, whatever the evidence. For example, the report argues that "there is no more reason to think that Rugh is lying about this than there is to think that McKain is." It further states, "If Rugh can be said to have lied to help his employer, DOJ, it is equally plausible that McKain lied to help his employer, INSLAW." This statement is preposterous on its face. McKain's actions were taken in 1985, in response to a call from Rugh, documented by contemporaneous notes and corroborated by the undisputed actions of his employer promptly thereafter. All of this occurred long before INSLAW had knowledge of any basis for a lawsuit against DOJ. Accordingly, these statements in the Bua Report are not only unfounded, but they also represent a crude and totally unwarranted smear of McKain.

The bankruptcy court's findings on the Rugh-McKain conflict buttress the court's other findings. The conclusion that Rugh, a subordinate non-lawyer, knowingly gave false testimony about his call to McKain to conceal the truth, supports the conclusion that it is likely that Stanton did make a commitment to Brewer to seek INSLAW's liquidation despite both of their denials. Stanton's actions in trying to bring Assistant U.S. Trustee Harry Jones from New York to work on the case were certainly consistent with such a commitment. The court's conclusion that Judge Blackshear's testimony at his initial deposition, and in his statements in his three prior telephone conversations with INSLAW's attorneys and another judge -- that White had told him that Stanton was going to ask him to send Harry Jones to Washington to seek conversion of the INSLAW case -- was truthful and that his two subsequent recantations were not truthful, is also supported by the finding that Rugh falsely denied telling McKain that the trustees had said INSLAW would be out of business shortly.

The Bua Report's treatment of the Pasciuto testimony also reflects an apparent preconception. It is perhaps difficult to fully perceive from the cold record Pasciuto's evident anguish and emotional turmoil in the courtroom. He was, at the time of his testimony, Deputy Director of the Executive Office for U.S. Trustees. Out of conscience, he had secretly met with the Hamiltons and told them of the scheme to liquidate INSLAW two years before, expecting that his friends, William White and Judge Blackshear, both then no longer employed by the Trustees' Office, would candidly support his statements. While Blackshear initially did support Pasciuto's testimony, he quickly recanted, and White denied any knowledge of such a scheme. Thus, at the time of his testimony, Pasciuto, who was still employed at DOJ's Executive Office for U.S. Trustees, had the worst of all possible worlds: being exposed as a "whistle blower" to his boss and being left out on a testimonial limb with no corroborative support.

INSLAW's trial team included former federal prosecutors with well over sixty years of active trial experience. Pasciuto's testimony was some of the most dramatic these lawyers had ever observed in a courtroom. When confronted with the fact of his secret meeting with the Hamiltons, Pasciuto first admitted the meeting and then said he could not recall making the key statements he had made. He wondered aloud whether the Hamiltons had tape recorded the session.

The Hamiltons had not. He said he had met with the Hamiltons to hurt Stanton, whom he disliked. Finally, when confronted with the fact that he had made the same statements at a meeting with a judge, the Honorable Lawrence Pierce of the United States Court of Appeals for the Second Circuit, Pasciuto admitted that he had made the statements. Ultimately, the bankruptcy court ruled that Pasciuto's hearsay statements were inadmissible. Yet no one who was in the courtroom when he testified could fail to have concluded that something was terribly wrong at DOJ.

That conclusion was enhanced by DOJ's subsequent treatment of Pasciuto. An investigation by DOJ's Office of Professional Responsibility ("OPR"), incredibly, found that but for Pasciuto's conduct, "the department would be in a much better litigation posture," and concluded that he should be fired. Eventually, he was allowed to resign. Before the Congressional committees, Pasciuto maintained that he had told the Hamiltons the truth in the first place, and had backed away from it because of pressure from DOJ and fear of losing his job. The House Judiciary Committee's Investigative Report had criticized OPR's treatment of the Pasciuto case. The Bua Report rejects this criticism of OPR, opining that Pasciuto only professed to have told the Hamiltons the truth when he was confronted by OPR's recommendation that he be fired for having set out to hurt his superior, Stanton, by making false statements to the Hamiltons. Pasciuto's conduct, his testimony, and his subsequent recantation are most logically explained by fear: fear that he would not get the promotion he had long sought and fear that he would be fired for telling the truth, as he eventually was. The claim that he made it all up to hurt Stanton is, in light of the corroborating evidence which exists, obviously false, as Pasciuto now acknowledges. For OPR to accept this claim and proceed to recommend the disciplinary action of termination based on it, was a charade -- designed to avoid the politically unpleasant task of investigating the more serious wrongdoing that the underlying situation reflected.

In 1987, the year the bankruptcy court released its oral opinion adverse to DOJ, three Presidential $20,000 awards were made to Senior Executive Service employees at DOJ. One award went to Stuart Schiffer, at the time a Deputy Assistant Attorney General in the Civil Division who had been criticized by the bankruptcy court in the INSLAW litigation against DOJ. A second award went to Michael Shaheen, head of OPR and the author of the December 23, 1987 report recommending the termination of Pasciuto. A separate $10,000 award, also one of three in DOJ for the year 1987, was given to Lawrence McWhorter, an EOUSA official who hired Brewer and whose testimony the bankruptcy court found "totally unbelievable." McWhorter was also promoted that year to Director of EOUSA. Thus, more than half -- $50,000 out of a total of $90,000 -- available for distribution to senior executives within DOJ for the year -- was distributed to key officials involved in maintaining DOJ's claim of a lack of wrongdoing. This startling fact is not mentioned in the Bua Report. III. BUA'S INVESTIGATION OF POST-TRIAL LEADS ABOUT A MORE WIDELY RAMIFIED CONSPIRACY INVOLVING EARL BRIAN AND THE INTELLIGENCE AND LAW ENFORCEMENT AGENCIES OF THE UNITED STATE AND FOREIGN GOVERNMENTS A. Bua's Investigation of the Alleged Justice

Department Distribution of INSLAW's PROMIS

Software to U.S. Government Law Enforcement and

Intelligence Agencies, Other Than the U.S.

Attorneys' Offices

A significant number of individuals, some employed by the Department of Justice (DOJ), and others with claimed associations with United States and/or Israeli intelligence, have told INSLAW that its PROMIS software has been implemented throughout the United States Government as the de facto standard database management software system for the U.S. intelligence community.

Among the agencies allegedly using PROMIS as their principal case tracking and workflow management software system are the Federal Bureau of Investigation (FBI), the Drug Enforcement Agency (DEA), and the U.S. Marshal's Service, all within DOJ itself; and the Central Intelligence Agency (CIA), the National Security Agency (NSA), the Defense Intelligence Agency (DIA), and the White House National Security Council (NSC).

In January 1992, INSLAW summarized these claims in a written submission to Bua in which INSLAW identified many of the sources of the allegations and also described other informants who were unwilling to be identified unless assured of protection against reprisals.

Since January 1992, INSLAW has been told by still more witnesses, including additional current or former DOJ employees, that these basic facts not only are true, but also are widely known to be true among the Senior Executive Service (SES) career officials in DOJ and the FBI.

Several sources have even claimed that the U.S. intelligence and law enforcement agencies regularly exchange data from their respective PROMIS-based systems via remote access through computer terminals equipped with both traditional communications modems and classified encoding equipment.

At least two journalists, Richard Fricker and George Williamson, have told INSLAW that current or former senior-level CIA officials have confirmed to them that the CIA is using INSLAW's PROMIS software and that the CIA obtained PROMIS from DOJ. In the January 1993 issue of the national computer industry magazine, Wired, Richard Fricker quotes from his interview with an unnamed former senior CIA administrator who claimed to have first-hand knowledge of these facts:

"On Nov. 20, 1990, the Judiciary Committee wrote a letter asking CIA director William Webster to help the committee 'by determining whether the CIA has the PROMIS software.' "The official reply on December 11th: 'We have checked with Agency components that track data processing procurement or that would be likely users of PROMIS, and we have been unable to find any indication that the Agency ever obtained PROMIS software.'

"But a retired CIA official whose job it was to investigate the Inslaw allegations internally told Wired that the DOJ gave PROMIS to the CIA. 'Well,' the retired official told Wired, 'the congressional committees were after us to look into allegations that somehow the agency had been culpable of what would have been, in essence, taking advantage of, like stealing, the technology [PROMIS] We looked into it and there was enough to it, the agency had been involved.'

"How was the CIA involved? According to the same source, who requested anonymity, the agency accepted stolen goods, not aware that a major scandal was brewing. In other words, the DOJ robbed the bank, and the CIA took a share of the plunder."

In its September 1992 Investigative Report, The INSLAW Affair, the House Judiciary Committee reported that the CIA finally admitted having a software product called PROMIS but claimed that the CIA's PROMIS was purchased from a small Cambridge, Massachusetts, software company called Strategic Software Planning Corporation.9 That company acknowledges marketing and supporting a software product called PROMIS for project management in the construction industry. The CIA also disclosed that the PROMIS software it claims to have acquired from the Cambridge, Massachusetts, company included an "Intelligence Report System," a curious capability for construction industry project management software. This latter CIA disclosure was contained in a letter to Mr. Terry D. Miller, the President of Government Sales Consultants, Inc., on April 5, 1993.

Bua apparently made no effort to test the CIA's denial that its PROMIS software product is based on INSLAW's PROMIS. Neither apparently did he examine the claims that copies of PROMIS have been implemented in the DIA and the National Security Council of the White House. Bua did make very limited inquiries about the alleged use of INSLAW's PROMIS by the DEA and the FBI within DOJ, and by the NSA. However, Bua does not appear to have brought any of the U.S. Government officials he contacted on this matter before the grand jury or even to have placed them under oath. Neither did Bua have anyone attempt to verify the denials of these officials by comparing the source code in INSLAW's PROMIS with the source code of the suspected cloned software systems.

1. The Implausibility That the Two

Principal DOJ Investigative Agencies,

the DEA and the FBI, Would Each Have

Developed a Complex On-line Case

Tracking and Workflow Management System

In-House at Approximately the Same Time.

Before discussing Bua's very limited investigation of the DEA, the FBI, and the NSA, it is important to understand that the odds against a federal agency developing internally, without contractor assistance, a complex, on-line software system, such as a case tracking and workflow management system, are very high. The odds against two separate agencies of the same department, such as the FBI and the DEA within DOJ, each developing a complex, on-line case tracking system are even higher. Finally, the odds against two such agencies developing the same kind of on- line case tracking system in-house at virtually the same time, i.e., during 1988 and 1989, are higher still.

Before considering claims from former and current senior DOJ officials that both the DEA and the FBI have been operating INSLAW's PROMIS software since the late 1980's, and before examining apparent inconsistencies, contradictions and possible dissembling in the statements made by DEA and FBI officials on this subject, one should keep in mind that the backdrop for their statements is the highly implausible scenario just described.

2. Indications of Possible Dissembling to

Bua by a Key DEA Official

Bua apparently never questioned Carl Jackson, a recently retired DEA deputy assistant administrator, about DEA's alleged use of PROMIS, even though the September 1992 Investigative Report by the House Judiciary Committee identified Jackson as the source of allegations that the DEA had implemented PROMIS.

Bua did, however, ask DEA Deputy Assistant Administrator for Information Systems Phillip Cammera, whether the DEA had implemented a PROMIS-derivative case tracking system. Cammera assured Bua that the DEA had developed in-house its new case- tracking system called Case Status System (CAST). The House Judiciary Committee reported that CAST was developed in the 1988- 1989 time-frame. Cammera told a different story in late 1990, however, when he was contacted by a former colleague, retired DEA Deputy Assistant Administrator Carl Jackson.10 According to Jackson's contemporaneous account to Mr. and Mrs. Hamilton of INSLAW, Cammera confirmed Jackson's own recollection on the matter. Jackson's recollection is that the Attorney General of the United States issued "non-negotiable" orders to both the DEA and the FBI in the summer of 1988 to "chuck" their existing case tracking systems and replace them with PROMIS, and that the DEA at least carried out the orders in the 1988-1989 time frame.

Jackson told the Hamiltons in 1990 that he had no way of verifying whether the FBI had implemented PROMIS as the DEA had done, but that he would have been surprised if the FBI had not implemented PROMIS because the Attorney General had made it explicitly clear that the orders were "non-negotiable."



3. Indications of Possible Dissembling to

Bua by the FBI

In January 1992, INSLAW informed Bua in writing that it had a source, described as a current senior DOJ career official, who claims to have been told that the FBI did, in fact, at some point in the late 1980s implement PROMIS as its investigative case management system. The FBI calls its system FOIMS (Field Office Information Management System). INSLAW's source, who is not willing to be identified unless there is a guarantee of no reprisal, claimed to have been told directly by John Otto, then one of the top FBI officials, that the current version of FOIMS is based on PROMIS. Otto served as Acting Director of the FBI between the departure of William Webster and the arrival of William Sessions.

Bua interviewed Otto, who had since retired from the FBI, but apparently did not place Otto under oath or bring him before the grand jury. According to Bua, Otto flatly denied the account given to INSLAW by the current senior DOJ career official. Bua simply accepted Otto's non-sworn denial as well as Otto's claim that he is virtually "computer illiterate" and therefore could not have been engaged in the kind of conversation claimed by INSLAW's confidential DOJ source. Had Bua attempted to verify Otto's claim of computer illiteracy, however, he would have learned that it is a highly implausible claim. For example, Otto had direct management responsibility within the FBI for both FOIMS and the nationwide UCR (Uniform Crime Report) system, including the computer software that is at the heart of these systems. Moreover, until the radical FOIMS software transplant of June 1988, the FBI's investigative case management system reportedly suffered from a very poor reputation among FBI agents; Otto would have had management responsibility for correcting a software system problem that may have been hampering the performance of the FBI mission.

In its September 1992 Investigative Report, The INSLAW Affair, the House Judiciary Committee noted its inability to finance the kind of independent analysis required to test the claims that the FBI's FOIMS system is based on PROMIS. The Committee

noted,

however,

that the question "could be resolved quickly if an independent agency or expert was commissioned to conduct a code comparison of the PROMIS and FOIMS systems."

FBI Director Sessions wrote to Bua on June 23, 1992, agreeing to permit such an examination of the FOIMS code, provided that the independent expert was acceptable to the FBI.

Bua chose Professor Dorothy Denning, the Chair of the Computer Science Department of Georgetown University. Bua notes in his report that "the FBI voiced no objection to our choice and processed her security clearance."11

In his report, Bua states that he provided to Denning "a copy of INSLAW's FOIMS analysis plan" that detailed how the developers of PROMIS would approach the question of whether the FBI's FOIMS system was, in fact, based on INSLAW's PROMIS.

One of the steps suggested by INSLAW was the use of a software routine in the IBM operating system called SUPERC which is able to do a code comparison at no cost to the Justice Department, and the comparison can be accomplished in approximately four (4) hours. The ease and short time within which a code comparison could have been accomplished makes the failure to conduct such a comparison utterly indefensible.

According to Bua, Denning, however, decided that the source code comparison, recommended by both the House Judiciary Committee and INSLAW, "would be a waste of her time and the government's money."

INSLAW read the report Denning submitted to Bua, which INSLAW obtained from FBI Director Sessions, to try to understand the basis for this very surprising conclusion of Professor Denning.

To begin with, Denning uncritically accepted representations by the FBI about the history and technical characteristics of FOIMS that are contradicted by other FBI disclosures about FOIMS.

For example, Denning accepted as fact that the original 1978 COBOL-language version of FOIMS was replaced by the claimed current NATURAL-language version of FOIMS in 1983.12 Published data about FOIMS from the national market research firm, INPUT, however, traces the current version of FOIMS to June 1988, rather than to 1983. This timing is consistent with the statements attributed to John Otto by INSLAW's confidential senior DOJ source, and also consistent with Carl Jackson's recollection that the FBI had been ordered in the summer of 1988 to implement PROMIS in place of the then current version of FOIMS.

Denning then uncritically accepted FBI representations that the current version of FOIMS is written in the NATURAL programming language, rather than in COBOL, the programming language used in INSLAW's PROMIS. As is evidenced in the following paragraph and its footnote, this representation also appears to be contradicted by other published data on FOIMS.

"FOIMS now contains over 570,000 lines of code, " according to a June 7, 1991 letter from FBI Assistant Director Delbert C. Toohey to Mr. Terry D. Miller, President of Government Sales Consultants, Inc. The claim that an application with 570,000 lines of code is written in the NATURAL programming language is "wrong by an order of magnitude," according to Mr. John A. Maguire, the founder and, until recently, the Chief Executive Officer of Software A.G. of North America, the U.S. company that markets the NATURAL programming language.13

It is hard to escape the conclusion that the FBI dissembled to Denning about the year of origin of the current version of FOIMS and about the apparent use of the COBOL programming language in the current version of PROMIS in an attempt to diminish the credibility of the aforementioned claims that the FBI "chucked" its earlier 1983 version of FOIMS, on orders from the Attorney General in the summer of 1988, and replaced it with INSLAW's PROMIS software.

There would be ample reason for both the FBI and the DEA to try to conceal their implementations of PROMIS in 1988 and 1989. In January 1988, the U.S. Bankruptcy Court had issued a permanent injunction against any further unlicensed proliferation of PROMIS by the U.S. Government. If Attorney General Meese issued the claimed orders to the FBI and the DEA in the summer of 1988, it would have been a willful, secret violation of a federal court order by the chief law enforcement officer of the United States.

Denning justified her decision not to do a code comparison between FOIMS and PROMIS primarily on her professed belief that FOIMS and PROMIS each support "entirely different" "application domains," with FOIMS tracking investigations and PROMIS tracking judicial proceedings; and that it is extremely difficult to convert software that runs one application into software that runs an entirely different application:

Because it is extremely difficult to convert software that runs one application into software that runs an entirely different application, the differences in just the FOIMS and PROMIS application domains show almost conclusively that FOIMS was not derived from PROMIS. ("Analysis of FOIMS and PROMIS," by Dorothy E. Denning, January 10, 1993, Page 1)

The aforementioned conclusions by Denning demonstrate that she is misinformed about the case management application domain in general and about INSLAW's PROMIS case management software in particular. For example, INSLAW's PROMIS software is currently being used for investigative case management by both state and local governments and by nationwide property and casualty insurance companies. Moreover, as INSLAW pointed out to Bua in its written submission of January 1992, the PROMIS software has been successfully applied to case management "application domains" much more removed from PROMIS's criminal prosecution "application domain" than FOIMS's criminal investigation "application domain." INSLAW provided to Bua the examples of the use of PROMIS in a nationwide credit bureau and in land conveyance record keeping in the Republic of Ireland.

Denning's analysis makes no sense whatsoever and is totally inappropriate given the circumstantial evidence. The methodology appears to be designed to rationalize and support a conclusion of non-infringement rather than the conduct of an independent objective analysis of the software programs in question to ascertain the truth.

Bua also addressed the question of the alleged use of PROMIS by the National Security Agency (NSA). Bua did confirm that the NSA has a software product called PROMIS but, once again, simply accepted the apparently unsworn statement of a U.S. Government official that the PROMIS software in question is not a derivative of INSLAW's PROMIS. NSA evidently claims to use a commercial database management system (DBMS) called M204, from Computer Corporation of America, as the "engine" for its PROMIS system, and to have written the application code, i.e., "the car" by analogy, in an unspecified programming language. As with many of the other suspected PROMIS-clone software systems, NSA claims to have developed its PROMIS application code in house. NSA also claims, according to Bua, that its PROMIS tracks information related to its published intelligence reports, called "products" by the NSA. Without explaining the basis for his statement, Bua asserts that such an application is different from the application domain of PROMIS: "NSA's PROMIS serves different purposes... " INSLAW's PROMIS would, in fact, be easily adaptable to tracking either the workflow that produces NSA's intelligence output or the names, places, dates and events in the intelligence reports or both. Bua also dismisses the possibility that NSA's PROMIS could be based on INSLAW's PROMIS because INSLAW's PROMIS is "used with a different database." Bua is apparently referring to the NSA claim that it uses the commercial M204 DBMS as the engine for its PROMIS application system. The choice of commercial DBMS "engine" for PROMIS, however, has very little relevance to the question of whether the application code is a clone of INSLAW's PROMIS. INSLAW itself has incorporated a variety of different commercial DBMS engines into its PROMIS software. There is no difficulty in believing that NSA might have incorporated the M204 DBMS into its copy of INSLAW's PROMIS or that the FBI may have incorporated the ADABAS DBMS into its copy of INSLAW's PROMIS.

In actuality, NSA's admission that it too uses a software product called PROMIS and that the application domain of NSA's PROMIS has something to do with the tracking of its published intelligence information lends further plausibility to the claims that virtually every major U.S. intelligence agency is using INSLAW's PROMIS software. Bua, of course, could have easily resolved the question by arranging for a code comparison, but apparently chose not to do so.

Bua's failure to arrange for the code comparisons between INSLAW's PROMIS and its suspected clones in U.S. intelligence and law enforcement agencies, where his federal grand jury's legal authority to conduct such investigations was obvious, is all the more mystifying in light of Bua's published statement that he considered trying to do just such code comparisons with foreign governments. Although a federal grand jury has no authority over foreign governments, Bua made the following statement about what he claimed he considered doing to check out the claimed international distribution of INSLAW's PROMIS:

Theoretically, we could continue our investigation of this subject by contacting various foreign governments, asking them to provide us with the source code to their law enforcement software, and then hiring an expert to compare that software to PROMIS.

B. Bua's Investigation of the Alleged International

Distribution of INSLAW's PROMIS

There are a number of individuals, with claimed ties to U.S. and/or foreign intelligence agencies, who have told INSLAW a remarkably consistent story about the alleged international distribution of INSLAW's PROMIS software.

Most of the accounts place Earl W. Brian at the center of the worldwide sales and distribution. Virtually all of the sources claim that U.S. intelligence, law enforcement and national security agencies, including the Central Intelligence Agency, the National Security Agency, the Drug Enforcement Administration, and the White House National Security Council, have supported Brian's worldwide sales and distribution of PROMIS. The accounts are generally consistent about the motivations for the sales: (1) the personal financial gain of Earl Brian and colleagues; (2) the generation of extra funds for financing U.S. covert intelligence operations that the U.S. Congress has declined to finance, such as the mid-1980's covert assistance to the Contras in Nicaragua; and (3) an initiative to penetrate the secret files of foreign intelligence and law enforcement agencies by inducing them to acquire and implement the PROMIS database management software and the necessary computer hardware, after the software and hardware have been secretly modified to permit electronic eavesdropping by the U.S. National Security Agency.

One account even identifies the name of the individual, Lindsey, who was allegedly appointed by the U.S. Government to package INSLAW's PROMIS software for Brian's alleged sales to such foreign intelligence agencies as Egypt's military intelligence agency. Moreover, this source claims that Lindsey was instructed to package the version of INSLAW's PROMIS that the CIA obtained from DOJ and which has been operational within the CIA ever since 1983, tracking U.S. and foreign covert intelligence operations.

Several of the accounts claim an important role for Israeli intelligence in the international distribution of INSLAW's PROMIS, with Israel brokering the sales to countries where it has significant intelligence liaison and influence, such as Singapore, South Africa, Eastern European countries, and Central American countries.

One source claims personally to have participated in at least one meeting in the Justice Command Center at DOJ headquarters between representatives of Israeli military intelligence and representatives of DOJ regarding the use of PROMIS databases in Israel to track terrorists in the Middle East.

An associate of the late journalist Danny Casolaro claims to have seen U.S. Government communications intelligence documents that Casolaro obtained from an employee of the National Security Agency facility in Vint Hills, Virginia, concerning the sales of PROMIS to Israel, Germany, South Africa and other countries, and concerning the flow of the proceeds from some of the sales to bank accounts in the Cayman Islands and in Switzerland. The NSA employee identified by Casolaro's associate was found murdered in his car at National Airport in January 1991. Many of these sources express fear of reprisal by the United States Government if they were to come forward. The specific types of reprisals, mentioned most often by those who express fear, are loss of security clearances vital to their employment, and criminal prosecution by DOJ under the espionage laws of the United States for disclosing U.S. national secrets.

Bua's consideration of the claims of the sale and distribution of PROMIS to foreign governments was even more superficial than his examination of whether PROMIS is being used by the FBI, the DEA, and the National Security Agency.

The following are examples of the superficiality of the Bua investigation in the area of international distribution: the alleged distribution of PROMIS to Canada and the alleged distribution of PROMIS to Israel, together with the alleged partnership between DOJ and Israeli intelligence in the theft of PROMIS.

1. The Alleged Distribution of PROMIS to

Canada

The first information that INSLAW received about the alleged international distribution of INSLAW's PROMIS came from the Government of Canada. In telephone calls and letters in late 1990 and early l991, the Government of Canada informed INSLAW that it was using its PROMIS software in several departments and agencies and wished to learn whether INSLAW also had available a French- language version of the PROMIS computer software and documentation because there are two official languages in Canada, English and French, and the Canadian Government at that point only had the English version of PROMIS. The Government of Canada eventually disclosed to INSLAW that the Royal Canadian Mounted Police (RCMP) alone was using INSLAW's PROMIS to support 900 separate office locations in Canada.

After the U.S. media began to report on this disclosure by the Government of Canada and on INSLAW's claim that it had neither sold PROMIS to Canada nor authorized others to do soon its behalf, the Government of Canada retracted its earlier oral and written statements to INSLAW. Canada attempted to explain the matter as an unfortunate mistake on the part of the Canadian officials who had originally contacted INSLAW. Ultimately, the Government of Canada settled on the story that the Department of Public Works, not the RCMP, had bought the PROMIS software; that the Department of Public Works had purchased only six copies of PROMIS, instead of 900 copies; and that the Department of Public Works had purchased PROMIS not from INSLAW, but from a small software company in Cambridge, Massachusetts, called Strategic Software Planning Corporation. This Cambridge, Massachusetts, company is the same company that the CIA told the House Judiciary Committee was the source of its PROMIS software. The CIA also subsequently disclosed in an April 5, 1993 letter to Mr. Terry D. Miller, President of Government Sales Consultants, that the PROMIS software it obtained from the Cambridge, Massachusetts, company included an Intelligence Report System, an unlikely subsystem for construction industry project management, whether in Canada or the United States.

The only reference that Bua makes to the Canadian lead is in footnote #90 on page 151 of his report, in which Bua appears to scold the House Judiciary Committee for failing to accept at face value Canada's claims that the original disclosures to INSLAW were simply an unfortunate mistake. Although INSLAW recognizes that Bua's federal grand jury had no investigative jurisdiction over the Canadian Government, there are other ways for a U.S. investigator to have pursued the Canadian lead. To illustrate this point, we have attached as Exhibit A a memorandum from John Belton, a former stockbroker in Canada who has been attempting to investigate the Canadian PROMIS distribution lead. In his memorandum, Belton first explains the history of his interaction with Earl Brian and Hadron, Inc., and recounts Brian's claims to Belton in early 1981 that Hadron's future revenue stream was to come from Hadron's acquisition of a computer software product for the administration of justice that Brian described as having "great PROMIS(E)." Belton then documents the fact that three reputable Canadian journalists have each confirmed to him, based on their confidential informants among senior current or former RCMP officials, that the RCMP is, in fact, using PROMIS, despite the Government of Canada's public denials. Finally, Belton quotes verbatim from his telephone conversations during the past year with several U.S. businessmen. These conversations document the existence of a business relationship between Earl Brian's Hadron, Inc., and two Canadian computer services companies on a large software sale to the Government of Canada in 1983. Belton's memorandum also summarizes leads that strongly suggest that these business transactions in 1983 involved the Privy Council of Canada and its intelligence and security staff, and the acquisition of PROMIS by the RCMP under the name Police Information Records System (PIRS).

INSLAW told Bua about Belton's research in a written submission to Bua in January 1992, but Bua made no attempt to interview Belton. Instead of attempting to exculpate Earl Brian and Hadron of any complicity in the theft and unauthorized distribution of INSLAW's PROMIS software, Bua could have used the federal grand jury to interrogate the U.S. businessmen whom Belton interviewed, and to compel the production of potentially relevant documents by Hadron, Earl Brian and the U.S. subsidiary of one of the two Canadian companies that were Hadron's partners in the 1983 software sale to Canada.

2. The Alleged Distribution of PROMIS to

Israel and The Alleged Partnership of

DOJ and Israeli Intelligence in the

Theft of PROMIS

Bua devotes only a single paragraph to the alleged distribution of PROMIS to the State of Israel, even though Bua characterizes this distribution as the "one documented international distribution" by DOJ of PROMIS. Predictably, Bua accepts at face value DOJ's contention that the May 1983 internal DOJ memorandum on the distribution of PROMIS to Dr. Ben Orr of Israel was truthful when it memorialized the distribution to Israel of the earlier, and by-then largely obsolete, public domain version of PROMIS.

The first reason to be skeptical about the truthfulness of the claim that it was the older, public domain version that DOJ gave to Israel is that Israel is both a technologically sophisticated country and a strategically important ally of the United States and, therefore, may not have been satisfied with obtaining the public domain version of PROMIS in May 1983, after that version had already become obsolete.

The second reason for skepticism is that it would have been an admission of wrongdoing for DOJ to have memorialized the distribution of the proprietary version of PROMIS to Israel. In April 1983, just one month before the internal DOJ memorandum on the

transfer

of

PROMIS to Israel, DOJ had stolen the proprietary version of PROMIS from INSLAW "through trickery, fraud and deceit, " according to the findings of the U.S . Bankruptcy Court, affirmed by the U.S. District Court, and confirmed and supplemented by the September 1992 Investigative Report by the House Judiciary Committee. In modifying INSLAW's contract on April 11, 1983, DOJ had committed itself contractually not to distribute the proprietary version outside the 22 largest U.S. Attorneys' Offices.

The third reason for skepticism is that DOJ did not produce for the House Judiciary Committee any of the kinds of records that should have accompanied such an international transfer of computer software. Examples would be an export license from the Commerce Department and documents explaining how it came to be that mid-echelon DOJ officials were conveying a computer software product to a foreign government.

The fourth reason for skepticism is that Israeli intelligence appears to have been working hand-in-glove with DOJ officials during the winter and spring of 1983 on the theft of the proprietary version of PROMIS from INSLAW. DOJ, in fact, sent a very high-level Israeli intelligence official over to INSLAW in February 1983 for a demonstration of the very proprietary version of PROMIS that DOJ misappropriated from INSLAW in April 1983.

In his report, Bua asks "why the DOJ would go to all the trouble of documenting the fact that it was giving a copy of PROMIS to Israel if this was some sort of covert operation." The answer to Bua's evidently rhetorical question is that the DOJ actions vis-a-vis INSLAW in the winter and spring of 1983 were, in fact, apparently part of a covert DOJ-Israeli intelligence operation, and the internal DOJ memorandum from May 1983 can be understood as an integral part of the "trickery, fraud and deceit" of the joint DOJ-Israeli intelligence covert operation.

INSLAW discovered the apparent 1983 DOJ-Israeli intelligence initiative on PROMIS by following up on leads in the September 1992 Investigative Report by the House Judiciary Committee. These leads were, of course, available to Bua too.

In February 1983, DOJ's Brewer telephoned INSLAW President William Hamilton to ask if INSLAW would be willing to provide a technical briefing and demonstration of the PROMIS software to a visiting prosecutor from the Israeli Ministry of Justice. Brewer identified this Israeli visitor as Dr. Ben Orr, the same person to whom DOJ claims to have given the obsolete, public domain version of PROMIS in May 1983, according to the contemporaneous DOJ memorandum. Brewer told Hamilton that the visiting Israeli prosecutor was heading a project to computerize the prosecutors' offices in Israel.

Following through on DOJ's request, INSLAW demonstrated the proprietary version of PROMIS to the Israeli visitor in February 1983 . This is the same version of PROMIS, i. e., the version for operation on Digital Equipment Corporation VAX computers, that DOJ stole from INSLAW in April 1983. The Israeli visitor displayed enthusiasm for the proprietary VAX version of PROMIS when INSLAW demonstrated it to him.

After the House Judiciary Committee published its report, INSLAW wrote to the Israeli Ministry of Justice seeking confirmation about whether there had actually been a Dr. Ben Orr employed by the Ministry in February 1983 and, if so, where to find him. The Ministry replied by letter that there indeed had been a Dr. Ben Orr employed by the Israeli Ministry of Justice in 1983, but that Dr. Ben Orr had since retired and is currently practicing law in Jerusalem.

Working with information supplied to INSLAW by the Israeli Ministry of Justice, the foreign editor of a major Israeli daily newspaper tracked down Dr. Ben Orr at his home in Jerusalem. The foreign editor described Dr. Ben Orr as tall by Israeli standards (5'10-1/2"), thin, having a full head of hair and possessing a dignified demeanor. Dr. Ben Orr also disclosed to the foreign editor that he had been stationed at the U.S. Department of Justice in Washington, DC, for one year under an exchange program, returning to Israel in May 1983 from his one-year stint in Washington, DC. Most curiously, while the Israeli journalist was visiting him in his home, Dr. Ben Orr produced what he claimed was the very PROMIS computer tape given to him by DOJ in May 1983. This is the kind of computer software tape that can only be operated on large and very expensive computers, not the kind of computers one would expect to find in a private residence.

Nothing about this Dr. Ben Orr fits the actual Israeli visitor to INSLAW in February 1983. That visitor was very short in height and quite stocky. He had a deeply receding hairline. His demeanor could not easily be described as "dignified." Moreover, unlike the real Dr. Ben Orr who had already been in Washington, DC, for the better part of one year by the time of the February 1983 visit, the Israeli visitor to INSLAW had come directly from Tel Aviv to Washington, DC, after a brief layover in New York City. In fact, the visitor to INSLAW telephoned from New York City to delay the meeting at INSLAW for 24 hours because he claimed that some friends in New York City were giving a party in honor of his arrival in the United States from Israel.

In retrospect, both DOJ and the visitor himself had deceived INSLAW about the visitor's real identity.

At approximately the same time that INSLAW discovered this apparent DOJ-Israeli subterfuge from a decade earlier, INSLAW received a lead that the name, Dr. Ben Orr, had, from time to time, been used as a pseudonym by Rafi Eitan, a legendary Israeli espionage official. Rafi Eitan was, for example, the Israeli spymaster for Jonathan Pollard, a civilian U.S. Navy intelligence analyst convicted in 1986 of spying for the Government of Israel.

After locating a photograph of Rafi Eitan in a book on the Pollard case, William Hamilton recognized Rafi Eitan as the February 1983 Israeli visitor to INSLAW.

Immediately thereafter, INSLAW arranged for a former INSLAW vice president, who had spent several hours briefing the Israeli visitor in February 1983, and who knew nothing about INSLAW's recent investigation of the matter, to attempt to identify the visitor from a photographic line-up of six reasonably similar looking Caucasian males. INSLAW also arranged for the videotaping of the process. The former INSLAW officer, without hesitation, identified photograph #2 as the photograph of the February 1983 visitor. That, of course, was a photograph of Rafi Eitan. This identification of Rafi Eitan as the February 1983 visitor to INSLAW obviously increases the credibility of the sworn statements in 1991 by Ari Ben Menashe to the effect that Rafi Eitan obtained a copy of the PROMIS software while on a visit to the United States in the early 1980's, and that Rafi Eitan worked with U.S. intelligence and Earl W. Brian on the international distribution of PROMIS.

Bua, however, dismisses Ben Menashe as a credible witness. Bua contends that Ben Menashe abandoned the clear implications of his sworn affidavits to INSLAW and of the chapter on PROMIS in his recently published book, Profits of War, and cynically confessed to Bua that he had no personal knowledge of Earl Brian's sale of INSLAW's PROMIS software. Moreover, according to Bua, Ben Menashe altered his story to say that Earl Brian was selling a different software product called PROMIS that was developed by the National Security Agency, independently of INSLAW's PROMIS.

Ben Menashe has denied to INSLAW that he ever made any such statements to Bua or Bua's staff. INSLAW has no way of knowing for certain what Ben Menashe said or did not say before Bua's federal grand jury, but it seems unlikely that Ben Menashe would have made statements to Bua that are totally inconsistent with his earlier sworn testimony both to INSLAW and to the House Judiciary Committee, and totally inconsistent with the thrust of his recently published book, Profits of War.

For example, in affidavits given to INSLAW in 1991, Ben Menashe claims to have attended a PROMIS computer software sales presentation by Earl Brian in 198714 to Israeli intelligence agencies in Tel Aviv. Ben Menashe further claims in these sworn statements that Earl Brian stated during this sales presentation that the PROMIS software he was marketing to Israel was the same PROMIS software then operating in DOJ, CIA, NSA and DIA. The DOJ version in 1987 could only have been INSLAW's proprietary PROMIS software installed in the 42 largest U.S. Attorneys' Offices.

Ben Menashe's understanding that it was INSLAW's PROMIS software that Earl Brian and Rafi Eitan were marketing internationally is also clearly evidenced in his book, Profits of War. For example, Ben Menashe claims in the book that Rafi Eitan, Earl Brian, and Washington, DC, attorney Leonard Garment conspired in 1986 or 1987 to deprive INSLAW of the ability to seek redress in the courts for DOJ's theft of the PROMIS software. Specifically, Ben Menashe claims in the book that Rafi Eitan authorized the wire transfer of $600,000 from an Israeli intelligence slush fund to Earl Brian's Hadron, Inc., in Fairfax, Virginia, and that Hadron was thereafter to provide this money to Leonard Garment at the law firm of Dickstein, Shapiro and Morin in order to finance that law firm's separation agreement with Leigh Ratiner. At the time of his firing by Dickstein, Shapiro and Morin, where he had been a partner for 10 years, Ratiner was the lead counsel on INSLAW's PROMIS lawsuit against DOJ, which he had filed only four months before.

In his report, Bua refers to Ben Menashe's published claim of a payoff which, if true, would constitute obstruction of justice. Bua explains, however, that he felt no obligation to investigate the claim because he had decided that Ben Menashe had very little credibility, and because he had assessed the claim as implausible. Even the most cursory investigation would have contradicted Bua's assertion that this claim by Ben Menashe is implausible. Ratiner, for example, told the Hamiltons in October 1986 that his firing was precipitated by his naming of Deputy Attorney General D. Lowell Jensen in the INSLAW complaint against DOJ.

Moreover, on October 6, 1986, the week before the law firm's Senior Policy Committee met and voted to fire Ratiner, Leonard Garment, a member of the Senior Policy Committee, had had a social lunch with Deputy Attorney General Arnold Burns15 about the INSLAW case. Garment never disclosed the lunch at the time either to his partner, Leigh Ratiner, or to INSLAW, his firm's client. According to the September 1989 Staff Report of the Senate Permanent Investigations Subcommittee, Burns disclosed that he met with Garment on October 6, 1986 to signal his readiness to negotiate a settlement on the INSLAW case, as well as to criticize the litigation strategy that Ratiner was then pursuing in the INSLAW case.16

After Ratiner was fired, the law firm sent INSLAW a letter containing an ultimatum that INSLAW authorize the law firm to negotiate a settlement of INSLAW's claims, on terms proposed in the letter, or else find new litigation counsel. The proposed terms of settlement were payment of at least $1,000,000 of the $2,000,000 that DOJ had withheld for INSLAW's implementation services and the acknowledgment that DOJ was not obliged to pay PROMIS license fees to INSLAW. The proposed terms were strikingly close to Deputy Attorney General Burns' terms, as implied by his August 1986 letter to Leigh Ratiner. INSLAW rejected the ultimatum, found new litigation counsel, prosecuted and won the case against DOJ at trial.

Not only did Garment have an undisclosed communication with DOJ on INSLAW at the time of Ratiner's firing, but Garment was also simultaneously representing the State of Israel in the Rafi Eitan-Jonathan Pollard espionage case. Although INSLAW did not then know it, Rafi Eitan had also apparently collaborated with DOJ on the 1983 theft of PROMIS.

The Government of Israel reportedly hired Garment to help prevent the Rafi Eitan- Jonathan Pollard espionage scandal from spreading and leading to the criminal indictment of other co- conspirators, such as Israeli Air Force Colonel Aviem Sella. The Government



of



Israel and Rafi Eitan would presumably have had a strong incentive to conceal Rafi Eitan's role as a partner of DOJ in the theft of the PROMIS software. DOJ, for example, granted Rafi Eitan immunity from prosecution for his cooperation in the Pollard espionage case. If it had become publicly known that Rafi Eitan and DOJ had, in fact, been partners in the theft of the PROMIS software and in its illegal distribution internationally, DOJ might have been obliged to recuse itself from the prosecution of the Pollard espionage case. At the very least, such DOJ decisions as granting immunity from prosecution to Rafi Eitan would have come under intense public scrutiny.

Bua could presumably have investigated Ben Menashe's claim by having the grand jury subpoena financial and accounting records of Dickstein, Shapiro and Morin and Hadron, Inc., and by interrogating appropriate individuals before the grand jury. It is difficult to imagine a more serious instance of obstruction of justice in the INSLAW case than that represented by Ben Menashe's published claim. INSLAW has intelligence information that Ratiner's settlement agreement with Dickstein, Shapiro and Morin was in the approximate amount of the alleged wire transfer from Israel and that the funds from which the Ratiner severance payments were drawn were provided from outside the law firm. C. Bua's Investigation of Leads Relating to the Role

of DOJ Officials in Either Facilitating or

Covering Up the Use of INSLAW's PROMIS in

Intelligence/National Security Programs



1. Ronald LeGrand

In his report, Bua quotes extensively from William Hamilton's December 1989 affidavit about what INSLAW had been told in 1988 by Mr. Ronald LeGrand, when LeGrand was Chief Investigator of the Senate Judiciary Committee.

LeGrand attributed his information to a trusted source whom he said he had by then known for 15 years and whom he described as a senior DOJ career official with a title. The gist of the information that LeGrand passed on from his source is that Presidential appointee D. Lowell Jensen, who headed the Criminal Division from early 1981 until approximately mid-1983, engineered INSLAW's contract disputes with DOJ in order "to get INSLAW out of the way" and be able to award the PROMIS-related case management business to "friends."17 According to LeGrand, his source identified two senior Criminal Division aides to Jensen as among the several individuals through whom Jensen carried out the alleged scheme: James Knapp, whom Jensen had brought with him from California to be his principal political Deputy Assistant Attorney General in the Criminal Division, and Miles Matthews, a Knapp subordinate whom Jensen had elevated to the position of Executive Officer for the Criminal Division.

According to LeGrand, his source also identified three other senior Criminal Division officials whom he described as knowing the whole story of the alleged Jensen-directed scheme: These officials are John Keeney, the highest ranking career lawyer in the Criminal Division; Mark Richard, the career Deputy Assistant Attorney General responsible in 1983 for intelligence, national security and international terrorism issues within the Criminal Division; and Philip White, who served under Mark Richard as Director of International Affairs, starting in 1983.

Bua quotes Hamilton's December 1989 affidavit as follows:

Although Richard and White were 'pretty upset' about it, the source did not believe that either of them would disclose what they know _except in response to a subpoena and under oath_. The source added that he did not think that either Richard or White would commit perjury. (Emphasis added.)

Although Bua placed LeGrand before the grand jury, he merely "interviewed" Keeney, Richard and White, who each denied knowing anything. Bua apparently ignored the cautionary warning that Bua himself quoted from Hamilton's December 1989 affidavit: "the source









did not believe that either of them [Mark Richard or Philip White] would disclose what they know except in response to a subpoena and under oath."

U.S. Government officials who are given access to classified information are bound by security oaths not to disclose such classified information except to individuals who have both the required security clearance and the "need to know." If a highly classified U.S. Government program, considered vital to the U.S. national security, also included U.S. Government activities that were approved at the highest levels of the United States Government but which constituted violations of the federal criminal laws, the security oaths could operate so as to constrain the ability of U.S. Government officials to volunteer information about the criminal activity embedded within the classified U.S. intelligence/national security program.

Mark Richard's and Philip White's official duties in 1983 would have included collaboration with foreign intelligence and law enforcement agencies on the problem of acts of terrorism against U.S. citizens. During the past decade, the Middle East has been the principal center of terrorism against U.S. citizens, and Israel has been one of the most important allies of the United States in the fight against Middle Eastern terrorism.

If DOJ and the Government of Israel decided to collaborate on an initiative against Middle Eastern terrorism, such collaboration might well have included an effort to obtain whatever information on suspected terrorists exists from the law enforcement and intelligence files of other governments, particularly in the Middle East. If other governments could be induced to implement the PROMIS database management software system in their intelligence and law enforcement agencies, and if both the software system and the computer hardware acquired to operate the software had been secretly modified to permit electronic eavesdropping by U.S. and Israeli intelligence, the joint DOJ-Israeli intelligence initiative against terrorism would have been positioned in such a way as to maximize the potential success of the DOJ-Israeli intelligence joint venture. One of INSLAW's sources, Ari Ben Menashe, claims to have attended a meeting in DOJ's Justice Command Center between DOJ officials and Israeli military intelligence officials, where data on terrorists were exchanged between the representatives of the two governments. Ben Menashe claims that both governments were using the PROMIS software to track terrorists.

As noted in the preceding section, III.B.2., DOJ's PROMIS Project Manager, C. Madison Brewer, sent over to INSLAW in February 1983, under the guise of a visiting Israeli prosecutor, one of the top Israeli espionage officials, Rafi Eitan. Brewer asked that INSLAW provide a technical briefing on and demonstration of PROMIS for this Israeli visitor, which INSLAW did. At the time, Rafi Eitan was Anti-Terrorism Advisor to the Prime Minister of Israel. According to the September 1992 Investigative Report of the House Judiciary Committee, Brewer testified that Jensen pre-approved virtually every action he took with regard to INSLAW. Although it is unlikely that Brewer, as the computer systems executive for U.S. Attorneys' Offices, would normally have interacted with the top Anti-Terrorism Advisor to the Prime Minister of another country, it is not implausible that Jensen, Mark Richard and Philip White of DOJ's Criminal Division would have had dealings with Rafi Eitan on such subjects as extraditing suspected terrorists from abroad for criminal prosecution in the United States. An American citizen's oath not to disclose classified information must, under the law, give way to the obligation to testify truthfully when compelled by appropriate legal process to answer questions under oath. Bua's failure either to bring Keeney, Richard and White before his grand jury or to place them under oath, in spite of being warned of the necessity to do so, is difficult to understand. Moreover, it invites concerns about a purposeful effort to avoid placing DOJ witnesses in a position where they would have to choose between perjury and damaging disclosures about the use of a national security initiative to conceal violations of the federal criminal law.

Such concerns are fueled further by Bua's silence in his report about another disturbing development regarding DOJ and LeGrand. In 1991, DOJ sought to block INSLAW's request to the U.S. District Court to re-open discovery. One tactic employed by DOJ was to sponsor a sworn statement by LeGrand purporting to cast doubt on the accuracy of Hamilton' s December 1989 affidavit about LeGrand. Unfortunately for LeGrand and DOJ, Senator Sam Nunn had, in the meantime, confirmed the accuracy of Hamilton's statements about LeGrand in a letter to the editor of the New Republic magazine. According to Senator Nunn, LeGrand had repeated the same story that he told the Hamiltons to the staff of the Senate Permanent Investigations Subcommittee chaired by Senator Nunn. Bua's report devoted almost four pages to LeGrand's testimony before the grand jury. All of it has been redacted. From the questions that Bua reports asking DOJ officials, however, it appears that LeGrand's grand jury testimony was consistent with his earlier statements to the Hamiltons. Bua makes no mention of LeGrand's subsequent contradictory statement sponsored by DOJ in 1991 in the U.S. District Court for the District of Columbia.

2. Garnett Taylor and the Alleged DOJ

Destruction of Classified

Intelligence/National Security Documents

Relating to INSLAW

INSLAW urged Bua to subpoena Garnett Taylor, a former DOJ security officer, before Bua's grand jury and to interrogate him about several matters, including the alleged destruction by DOJ officials of classified national security/intelligence documents relating to INSLAW. As with LeGrand, Taylor's testimony before the grand jury has been redacted from Bua's report, but it is possible to draw some inferences about Taylor's grand jury testimony from Bua's narrative about his interview with James Walker, Taylor's former DOJ supervisor.

Bua's narrative about his interview with James Walker implies that Walker's former subordinate, Taylor, testified before the grand jury that Walker had instructed Taylor to retrieve classified intelligence/national security documents relating to the INSLAW case from the files of a Civil Division attorney who had left DOJ, and then to destroy those documents. There is also the further implication in the Bua Report that Taylor also alleged that Walker later cancelled the instructions to Taylor and, thereafter, carried out the retrieval and destruction of the classified INSLAW documents himself.

In its September 1992 Investigative Report, the House Judiciary Committee reported that over 50 sensitive files or documents relating to INSLAW had disappeared from the Civil Division's litigation files while the House Judiciary Committee sought access to the Civil Division's files on INSLAW. Bua states that the House Judiciary Committee's report contains the suggestion that a missing Civil Division file on INSLAW "may have been destroyed because it contained documents that implicated DOJ officials in a criminal conspiracy relating to INSLAW."

Bua disposes of this suspicion by describing it as unfounded. Bua accomplishes this by accepting at face value the account given by Sandra Spooner, the lead Civil Division litigation counsel on INSLAW. Bua does confirm that one file of privileged documents is missing, but instead of conducting an investigation, Bua snidely insinuates that the House Judiciary Committee's investigators could have stolen it: "Even the Committee investigators had limited access to the storage room and therefore the missing file. By no means do we suggest that one of the investigators stole the file."

According to Bua, James Walker confirmed that Garnett Taylor's official responsibilities, when he worked for Walker, included "responsibility for shredding classified documents once a determination was made that the documents need not be retained." Bua also claimed that "Walker stated that it was conceivable that Taylor had been dispatched to take care of a file cabinet belonging to a DOJ employee who had left."

When it came to Taylor's apparent claim that Walker had "reassigned Taylor to another task and handled the disposition of the documents in the file cabinet himself," Bua accepts at face value Walker's statement that he had "no recollection" of such an incident. If Walker were to recollect such an incident, of course, Walker might well expose himself to criminal prosecution for obstruction of justice. Bua also uncritically accepts Walker's statement that "there were never any INSLAW documents in any of the safes he controlled or any of the safes he knew about."

Walker is DOJ's Special Security Officer with responsibility for administering the facility on the 6th floor of DOJ headquarters that houses Sensitive Compartmented Information.18 Walker's apparently unsworn denials of Taylor's sworn statements were good enough for Bua. INSLAW has other U.S. Government witnesses, however, who claim to know about the incident that Walker claims he cannot recollect. One of these witnesses claims to have been an eye witness to at least part of the incident. These witnesses are unwilling to be identified unless given guarantees that there will be no reprisals. It is difficult to understand why Bua would not have insisted on inspecting the Sensitive Compartmented Information Facility (SCIF) administered by James Walker to determine whether SCIF vault houses materials relating to the PROMIS software and/or INSLAW, whether in the form of documents, microfiche or remotely-located computer-based PROMIS data accessible by computer terminals within the confines of the SCIF. It is difficult to justify Bua's failure to attempt to resolve empirically the apparent discrepancy between the grand jury testimony of Taylor and the unsworn "failure to recollect" statements by Walker. Bua presumably could have brought Walker and other DOJ security officers before the federal grand jury, and also subpoenaed DOJ's records on the destruction or relocation of classified intelligence and national security records. D. Bua's Investigation of Leads About Earl W. Brian,

the Principal Alleged Private Sector Co-

Conspirator of DOJ and U.S. Intelligence Agencies

in the Theft and Distribution of PROMIS

As noted in Section III.B., Bua's Investigation of the Alleged International Distribution of INSLAW's PROMIS, most of the accounts of the foreign sales and distribution of PROMIS place Earl W. Brian at the center of the activity.

Bua subdivides his investigation of this question into two parts: the Claimed Direct Evidence of a Conspiracy and the Claimed Circumstantial Evidence of a Conspiracy.

1. Bua's Investigation of the Claimed

Direct Evidence of a Conspiracy

Bua begins this section by claiming to have interviewed individuals whom INSLAW and others have identified as having personal knowledge of the activities of Earl Brian in connection with the distribution of PROMIS software. Bua then addresses in particular Michael Riconosciuto, Ari Ben Menashe, and Charles Hayes.



(a) Michael Riconosciuto

Michael Riconosciuto served as Director of Research during the early 1980's for the Joint Venture between the Wackenhut Corporation of Coral Gables, Florida, and the Cabazon Band of Mission Indians in Indio, California. The Wackenhut Corporation reportedly regularly conducts highly classified contract work for U.S. intelligence and law enforcement agencies.19 Riconosciuto claims that Earl W. Brian and Peter Videnieks, DOJ's PROMIS Contracting Officer, were frequent visitors to the Joint Venture in Indio, California, because the Joint Venture was modifying the PROMIS software so that Earl Brian could sell it to foreign governments for their intelligence and law enforcement agencies.



(1) Bua's Claimed Inconsistencies in



Riconosciuto's Various Statements about



When and From Whom He Claims to Have



Obtained the PROMIS Software



Bua claims to have found inconsistencies among several sworn statements by Riconosciuto, relating both to the number of copies of the PROMIS software that Riconosciuto claims to have received and to the identification of the party or parties from whom Riconosciuto claims to have received the PROMIS software.

In both his affidavit to INSLAW and in his sworn statement to the House Judiciary Committee, Riconosciuto is apparently consistent in claiming to have received a single copy of PROMIS, as well as in claiming to have obtained PROMIS from Earl Brian and Peter Videnieks, the Justice Department's PROMIS Contracting Officer. In testimony at his criminal trial in Tacoma, Washington, in January 1992, however, Riconosciuto made references to receiving several copies of PROMIS and to receiving those copies from Dr. John P. Nichols, the Administrator of the Joint Venture.

These accounts may not, in fact, be in conflict. Riconosciuto may have focused his testimony to the House Judiciary Committee and to INSLAW on the one incident that combines the proprietary version of PROMIS and direct evidence of DOJ complicity in its dissemination; i.e., the chain of custody from DOJ Contracting Officer Peter Videnieks to Brian to Riconosciuto. This is the kind of evidence that both INSLAW and the House Judiciary Committee were seeking. Riconosciuto's testimony about receiving the proprietary version of PROMIS from Earl Brian and Peter Videnieks would not necessarily mean that Riconosciuto did not receive other copies of PROMIS from individuals such as John P. Nichols. Moreover, Riconosciuto's testimony to INSLAW and the House Judiciary Committee would not exclude the possibility that Riconosciuto also obtained copies of the earlier public domain version of PROMIS for modification under the auspices of the Joint Venture. This could also account for Riconosciuto's apparent inconsistencies about the years when he claims to have worked on PROMIS, which Bua noted as additional reasons to question Riconosciuto's credibility.

Bua also apparently does not realize that INSLAW had another DOJ customer, in addition to the Executive Office for U.S. Attorneys, to which it delivered the proprietary version of PROMIS: DOJ's Land and Natural Resources Division. That DOJ division has been subscribing to INSLAW's PROMIS software support services since January 1982 and receiving proprietary enhancements to PROMIS pursuant to the Annual INSLAW Software Support Agreements ever since.20 These standard INSLAW Software Support Agreements legally bar DOJ from copying or disseminating the proprietary enhancements in the same way as INSLAW's standard PROMIS license agreement does. Bua's failure to understand this point also led to the following statement by Bua that is patently untrue:

It is undisputed that INSLAW did not produce a copy of enhanced PROMIS to DOJ until April 20, 1983.21

(2) Bua's Investigation of Riconosciuto's



Claim to Have Worked on PROMIS Under the



Auspices of the Wackenhut/Cabazon Joint



Venture Bua states that his investigators "interviewed a number of people whom Riconosciuto identified as having knowledge of the activities involving PROMIS at the Cabazon Reservation," including Robert Nichols and Peter Zokosky, and that his "interviews" led him to the tentative conclusion "that there were absolutely22" no activities undertaken by Wackenhut, Riconosciuto, or the Cabazons that had anything to do with PROMIS or any other software."

Robert Nichols and Peter Zokosky have each reportedly had extensive employment in classified U.S. Government intelligence and national security activities. Nichols, in fact, testified under oath at a civil trial in Los Angeles in 1993 about his claimed 18 year association with the CIA. Each presumably took an oath not to disclose voluntarily any classified information that he may have acquired as part of his U.S. Government work, except to individuals who possess both the requisite security clearances and the "need to know." The only way to overcome that sworn obligation to silence is to use compulsory legal process, such as a federal grand jury, to require such an individual to answer highly detailed questions under oath. Bua apparently did not do this.

If Riconosciuto is telling the truth about modifying INSLAW's PROMIS software with a "trap door" for electronic eavesdropping by the U.S. Government, the U.S. intelligence agency whose vital interests would be most clearly implicated in any such project is the National Security Agency (NSA).

That the Joint Venture was carrying out contract R&D for the National Security Agency and that Michael Riconosciuto was personally involved in such work can be inferred from statements and actions of Robert Nichols and Peter Zokosky.

Robert Nichols told Mr. and Ms. Hamilton about an incident in the early 1980's when a colonel from the NSA Headquarters at Fort George G. Meade, Maryland, allegedly flew out to the Cabazon Reservation for the day for the single purpose of assuring that FBI agents, investigating a triple homicide of the Vice Chairman of the Cabazon Tribe and two associates, did not attempt to probe the classified U.S. Government work being performed under the auspices of the Wackenhut-Cabazon Joint Venture.

Robert Nichols also told the Hamiltons about having accompanied Michael Riconosciuto on a visit to a classified NSA contractor facility in the Silicon Valley and to have observed Riconosciuto's apparently unrestricted and unescorted access to both the contractor's employees and to offices within the contractor facility that were prominently marked as off-limits to any unescorted visitors. Robert Nichols also told the Hamiltons about frequent alleged telephone conversations at the Wackenhut-Cabazon Joint Venture between Michael Riconosciuto and Bobby Inman. Bobby Inman served in the early 1980's consecutively as Director of the National Security Agency and Deputy Director of the Central Intelligence Agency. For his part, Peter Zokosky sent Mr. and Ms. Hamilton an excerpt from Public Law 86-36 of 1959 on NSA, with the following words highlighted:

Except as provided in subsection (b) of this section, nothing in this Act or any other law ... shall be construed to require the disclosure of the organization or any function of the National Security Agency, or any information with respect to the activities thereof ...



(3) Bua's Attempt to Discredit Riconosciuto



Based on Bua's Own Misinformation about



the Wackenhut Corporation, and Bua's



Failure to Investigate Riconosciuto's



Claim That He and Earl Brian Worked



Together in 1980 as Contract Employees



of Wackenhut



Riconosciuto claims that he and Earl Brian made a trip to Iran in 1980 as independent contractors with a subsidiary of the Wackenhut Corporation known as the Wackenhut Research Corporation.

Bua states that the Wackenhut Research Corporation does not exist. While that statement is true for 1993, what is important, is that the Wackenhut Research Corporation did exist in 1980, as a subsidiary of the Wackenhut Corporation, according to the 1980 Annual Report for the parent company. Rather than diminishing Riconosciuto's credibility, the reference to a subsidiary that has not been in existence for a decade but that was in existence when Riconosciuto claims it was, actually enhances Riconosciuto's credibility.

Bua further criticizes Riconosciuto for failing to produce, as he promised Mr. and Ms. Hamilton in a May 1990 telephone conversation memorialized by the Hamiltons, copies of Internal Revenue Service (IRS) 1099 independent contractor forms for his and Earl Brian's claimed contract work for the Wackenhut Research Corporation in 1980. Bua's federal grand jury presumably could have issued a subpoena to the IRS and/or to the Wackenhut Corporation for the records in question and, in so doing, determined whether Earl Brian and Michael Riconosciuto each worked for the same unit of the Wackenhut Corporation at the same time in 1980. Because Earl Brian has repeatedly denied Michael Riconosciuto's claims, Bua could have used this opportunity to determine empirically whether it is Michael Riconosciuto or Earl Brian who is lying.



(4) Bua's Investigation of Riconosciuto's



Claimed Involvement With Earl Brian and



Peter Videnieks

Bua states that Sam Cross, who was Chief of Police in Indio, California, in the early 1980's, "made a point of staying aware of what was going on at the Cabazon Reservation during that period, and that he never heard any mention of the name Earl Brian." If the NSA could send a colonel 3,000 miles across the United States to make certain that FBI agents investigating a triple homicide near the reservation did not find out anything about the classified projects undertaken by the reservation's Joint Venture, there is no reason to believe that a local police chief would fare any better in gaining access to classified Joint Venture



projects.



Bua's reliance on Sam Cross' ability to know about such classified activities would, therefore, appear to be misplaced.

Bua quotes John P. Nichols, the Director of the Wackenhut- Cabazon Joint Venture, as being "emphatic that Riconosciuto's allegations concerning PROMIS are fabricated" "and that he had never heard of Earl Brian or any of his companies prior to Riconosciuto's allegations." Although Bua details Riconosciuto's criminal history, he fails to mention that John P. Nichols was incarcerated in the mid-1980's following a conviction for contracting with professional "hit men" for a number of assassinations. The disclosure of such information is relevant for anyone trying to determine how much weight to give to John P. Nichols' statements. Moreover, Bua apparently did not place Nichols before the grand jury or even under oath.

Bua states that Brian's presence at the September 10, 1981 weapons demonstration, as reported in the September 1992 Investigative Report of the House Judiciary Committee, "would be significant" because Brian "has steadfastly denied having been to the Cabazon reservation, or ever having met Riconosciuto or any one affiliated with the Cabazons."

The Indio Police Department conducted surveillance of the September 10, 1981 weapons demonstration and recorded both Earl Brian and Michael Riconosciuto as attending, with Earl Brian arriving as a passenger in a Rolls Royce automobile driven by Wayne Reeder, whom Bua describes as a real estate developer. Bua reports that Wayne Reeder claims that Earl Brian was not present with him on September 10, 1981. Wayne Reeder's character and integrity are, however, currently under challenge by the United States Government. Reeder was indicted for insurance fraud by the U.S. Attorney's Office in Rhode Island in June 1993.23 Moreover, Bua apparently did not place Reeder before the grand jury or even under oath.

Bua also credits Earl Brian's denial that he was at the September 10, 1981 weapons demonstration in Indio, California, and notes that Brian's denial is supported by various documents, including Brian's personal calendar and expense records purporting to show Earl Brian as being on the East Coast of the United States on the day in question. Bua further notes that the notations on some of these documents were made by one of Brian's subordinates.

Earl Brian's veracity and the reliability of documents furnished by Earl Brian are open to question, however, as the result of Brian's decision not to contest a civil lawsuit filed by the U.S. Securities and Exchange Commission (SEC) on June 28, 1993 against Earl W. Brian and several former subordinates at Financial News Network (FNN). In a 60-page civil complaint filed in U.S. District Court for the District of Columbia, the SEC charged Brian with securities fraud, with causing the creation of fraudulent documents, with executing and backdating fraudulent documents, with directing a subordinate to execute a fraudulent and backdated document, and with making materially false or misleading statements. Brian settled his part of the SEC lawsuit the very day it was filed by agreeing to be bound by a permanent injunction







not to commit securities fraud in the future, and not to make or cause others to make a materially false or misleading statement in the future.

Bua determined that Riconosciuto is not to be believed, but that Earl Brian and Peter Videnieks are "credible witnesses, both in their demeanor and in the substance of their statements."

In reaching that conclusion, Bua apparently did not speak to the former FNN Director of Administrative Services, Ms. Margaret Wiencek. INSLAW, however, not only spoke to Margaret Wiencek but also obtained from her a copy of a sworn statement she gave recently to the U.S. Customs Service Internal Affairs investigators who were interviewing Wiencek about Peter Videnieks. Videnieks left DOJ in September 1990 to become Director of Operational Procurement at the U.S. Customs Service.

In her sworn statement, Wiencek describes a file at FNN Headquarters that contained copies of correspondence to and from Dominick Laiti, then Chairman of Earl Brian's Hadron, Inc., relating to the PROMIS software and INSLAW, Inc. Wiencek also claims personally to have taken telephone messages at FNN Headquarters from Peter Videnieks and Michael Riconosciuto during the first quarter of 1987. That is the quarter when INSLAW filed a pleading in U.S. Bankruptcy Court for the District of Columbia concerning the covert DOJ effort in 1985 to force INSLAW into Chapter 7 liquidation.



(b) Ari Ben-Menashe

Section III.B.2., Bua's Investigation of the Alleged International Distribution of INSLAW's PROMIS, contains a detailed analysis of Bua's statements about Ari Ben Menashe's claims and alleged claims. That analysis is not repeated in this section. One example of Ben Menashe's credibility regarding the international distribution of PROMIS is his sworn statement in 1991 about the pivotal role played in this area by an Israeli espionage official, Rafi Eitan. In early 1993, INSLAW was able independently to corroborate Eitan's collaboration with DOJ in the 1983 theft of PROMIS.

Bua states that Ben Menashe's claims have been "convincingly denied by two witnesses whose statements we believe," ... "Earl Brian, under oath, and Robert McFarlane, in a telephone interview."

As noted earlier, Brian's acceptance on Monday, June 28, 1993 in U.S. District Court for the District of Columbia of the permanent injunction sought by the U.S. Securities and Exchange Commission (SEC) not to engage in securities fraud in the future, raises valid questions about the veracity and integrity of Earl Brian, one of the witnesses upon whom Bua relied.

Although Bua detailed Riconosciuto's criminal record, he failed to mention that the other witness upon whom he relied in dismissing Ben Menashe's claims, Robert McFarlane, also has a federal criminal record, arising from his conduct in the Iran/Contra affair as National Security Advisor to the President of the United States. McFarlane's conviction was for lying.

(c) Charles Hayes

The Bua Report contains several redacted pages relating to the grand jury testimony of Charles Hayes.

INSLAW, of course, has no way of knowing what Charles Hayes said or did not say before Bua's grand jury, but Hayes executed an affidavit on November 30, 1992 claiming that on or about August 26, 1992 he had appeared to testify before the grand jury in Chicago; that he gave testimony concerning his "direct knowledge of the commission of felonies" "related to the INSLAW affair"; that he submitted a list of names of witnesses who have direct knowledge of the INSLAW affair and supplied the addresses and telephone numbers of those witnesses; and that none of the witnesses had been contacted as of November 30, 1992.

Hayes had previously told Mr. and Ms. Hamilton that he met with Earl Brian, Richard Secord and Oliver North in Sao Paulo, Brazil, in the mid-1980's while those three individuals were purchasing weapons for the Contras in Nicaragua, and Brian was marketing INSLAW's PROMIS software to the Government of Brazil.



(d) Richard Babayan

Bua apparently did not bring before the grand jury or even interview Richard H. Babayan, who provided an affidavit to INSLAW on March 22, 1991, concerning a PROMIS software sales presentation by Earl W. Brian and Richard Secord to the Government of Iraq during 1987. In his affidavit, Babayan also claims that a Miami, Florida, resident, Sarkis Saghanolian, assisted Earl Brian in completing the sale of the PROMIS software to Iraq "for use primarily in intelligence services, and secondarily in police and law enforcement agencies."

INSLAW furnished a copy of this affidavit to Bua in January 1992, but Bua apparently never interrogated Babayan; Richard Secord, named by both Babayan and Hayes as a Brian colleague during PROMIS marketing forays abroad; or Sarkis Saghanolian.

2. Bua's Investigation of the Claimed

Circumstantial Evidence of a Conspiracy



(a) The September 1983 Fund raising

Trip to New York City by Earl

Brian, Dominick Laiti, and Paul

Wormeli

Bua quotes from William Hamilton's December 1989 affidavit about Earl Brian, Hadron Chairman Dominick Laiti, and Hadron Executive Paul Wormeli gathering in New York City in September 1983 to raise equity capital from the Wall Street Investment Bank, Allen and Company. In his affidavit, Hamilton quotes Wormeli as stating that the equity capital was to finance Hadron's expansion in criminal justice information systems. In his affidavit, Hamilton also quotes Wormeli's former secretary, Marilyn Titus, as stating that the purpose of the trip was "to raise capital to buy the court software."

Bua quotes Titus as stating that "she does not believe she ever told William Hamilton that the purpose of the 1983 fund raising trip was to raise capital _to obtain PROMIS or INSLAW_." (Emphasis added.) Titus was apparently not placed under oath, and she was also apparently asked to confirm a statement that is different from the one that Hamilton claims that Titus made.

Bua states that Laiti insisted the equity capital was intended to be used by Simcon, Hadron's police information systems subsidiary in 1983. Bua also claims that "Wormeli essentially confirmed what Laiti told us." What Wormeli had told INSLAW, however, is that he was shocked to discover that Laiti was seeking to raise $7 million in equity capital for criminal justice information systems because Simcon could only use $2 million. Wormeli told INSLAW that he never was told how the other $5 million was going to be used.

Wormeli also told INSLAW that during the September 1983 fund raising visit to Allen and Company, he and Laiti not only met with Mark Kesselman, a Vice President, but also met with Herbert A. Allen, Jr., then the Chief Executive Officer of Allen and Company. Wormeli told INSLAW that at the time of the 1983 visit, Allen and Company owned about $5 million of Hadron's common stock.

Bua apparently did not subpoena records of Allen and Company about the Hadron fund raising effort in 1983, and did not interview Herbert A. Allen, Jr. What Bua did do is have a trans- Atlantic telephone interview with Kesselman in Switzerland. Kesselman claims that he could not even remember the name of the company seeking the funds. With a $5 million equity investment in Hadron, Herbert A. Allen, Jr., presumably, would have been able to remember the name of the company and possibly important details concerning the intended use of the proceeds. With such a substantial investment in Hadron in 1983, Allen and Company may also have had documents relating to Hadron's planned expansion in criminal justice information systems that could explain the $5 million for which Wormeli cannot account.



(b) The 53rd Street Ventures Connection



(1) Patricia Cloherty's Alleged Claims About



Earl Brian

On Thursday, May 5, 1988, the CBS Evening News with Dan Rather broadcast an unusually long, approximately seven minute, segment on the INSLAW affair, highlighting the alleged role of Earl W. Brian in the DOJ theft of the PROMIS software.

The annual meeting of the National Association of Venture Capitalists was at that very time taking place in Washington, DC, and both Richard D'Amore and Patricia Cloherty were in attendance. D'Amore was on INSLAW's board of Directors and was a partner in Hambro Venture Capital, then the lead venture capital investor in INSLAW. Cloherty and her husband, Daniel Tessler, controlled 53rd Street Ventures, which also then had an equity investment in INSLAW. Cloherty also had by this time become the Chief Operating Officer of Alan Patricoff and Associates, a very large venture capital firm in New York City that had controlled 53rd Street Ventures until 1984, when Cloherty and Tessler took it over.

On Friday, May 6, 1988, Richard D'Amore visited William Hamilton at INSLAW's offices in Washington and told him that he had seen Patricia Cloherty at the venture capitalists conference and had mentioned to her the previous evening's telecast on INSLAW

and

the

alleged role of a venture capitalist by the name of Earl Brian. According to D'Amore, Cloherty responded by stating, in words or substance, that she "knew all about Earl Brian's role in the INSLAW case."

According to William Hamilton's desk calendar for Tuesday, May 10, 1988, Hamilton telephoned Patricia Cloherty at Alan Patricoff and Associates. Without disclosing to her that D'Amore had recounted his conversation with Cloherty, Hamilton asked whether Earl Brian or his InfoTechnology, Inc., venture capital firm had ever done any deals with Alan Patricoff and Associates or 53rd Street Ventures through early 1984 when Patricoff and Associates managed 53rd Street Ventures. Cloherty claimed not to know and did not commit to try to find out when Hamilton asked that she do so. Hamilton did tell Cloherty about the alleged role of venture capitalist Earl Brian as a partner in the DOJ corruption against INSLAW, and Cloherty did not disclose to Hamilton that she knows Earl Brian and, in fact, had served on a board of directors with him during the 1980's, disclosures that Cloherty made to Bua.

In his December 1989 affidavit, Hamilton quotes the statement about Earl Brian that Cloherty allegedly made to D'Amore in May 1988, without providing the aforementioned background details about the CBS Evening News story being telecast while Richard D'Amore and Patricia Cloherty, each with venture capital investments in INSLAW, were in Washington, DC, for a national conference of venture capitalists.

According to Bua, both Cloherty and D'Amore denied having had such a conversation in May 1988, and D'Amore denied having told Hamilton about such a conversation. Bua apparently did not place Cloherty or D'Amore under oath. Bua never asked Hamilton for further information, such as some of the contextual details described above, that Bua could have used in trying to refresh the recollections of Cloherty and D'Amore or, alternatively, in trying to impeach their testimony. Moreover, Bua could have easily verified the CBS telecast on Brian and INSLAW occurring while Cloherty and D'Amore were together in Washington, DC, at a venture capital conference.

Instead of doing such work, however, Bua uncritically accepted Cloherty's and D'Amore's non-sworn denials and then irresponsibly used those denials to support his conclusion that Hamilton's sworn representations cannot be relied upon.

Bua quotes Daniel Tessler as stating that "his wife, Patricia Cloherty, has no knowledge of Earl Brian ..." Bua then quotes Patricia Cloherty as not only admitting that she knows Earl Brian but also admitting to have served with Earl Brian during the 1980's on the Board of Directors of the National Association of Small Business Investment Companies. 53rd Street Ventures is, in fact, a Small Business Investment Company.

Bua should also have wondered how Hamilton could have correctly associated Patricia Cloherty with Earl Brian, when Cloherty's own husband professes not to have known of any such association, unless Hamilton's highly plausible account of his May 1988 conversation with D'Amore in Washington, DC, is true and accurate.





(2) Daniel Tessler's Non-Sworn Denial of



Hamilton's Sworn Statement About Tessler



Demanding Voting Rights to the



Hamiltons' Common Stock on the Eve of



INSLAW's Chapter 11 Bankruptcy Filing

In his December 1989 affidavit, Hamilton states that Daniel Tessler appeared at INSLAW in December 1984, just several weeks before INSLAW was finally forced to file for Chapter 11 bankruptcy protection, and gave William Hamilton an ultimatum to turn over to Tessler by the close of business that day the voting rights to Mr. and Ms. Hamilton's controlling interest in INSLAW. Otherwise, neither 53rd Street Ventures nor Hambro Venture Capital would even attempt to help INSLAW raise new capital to avoid financial collapse, according to Hamilton's sworn statement about Tessler's ultimatum.

Bua reports that Tessler denied Hamilton's sworn testimony, and Bua apparently accepts Tessler's non-sworn denial without any further investigation. Someone who cannot remember his wife's business relationship with Earl Brian may not, however, have the most reliable memory. Moreover, if Tessler was acting secretly on behalf of Earl Brian when he sought the voting rights of the Hamiltons' controlling interest in INSLAW, he may have violated the Federal Banking Criminal Statute, 18 U.S.C. s 215 because Tessler was then an officer of a Small Business Investment Company (SBIC). 53rd Street Ventures, as an SBIC, is a "financial institution" as defined in section 103 of the Small Business Investment Act of 1958. Section (2) of 18 U.S.C. s 215 makes it a federal crime for anyone who

"as an officer, director, employee, agent or attorney of a financial institution, corruptly solicits or demands for the benefit of any person, or corruptly accepts or agrees to accept anything of value from any person, intending to be influenced or rewarded in connection with any business or transaction of such institution;"

It may be unrealistic to expect Tessler to admit to Bua conduct that could arguably expose Tessler to prosecution under 18 U.S.C. s 215.



(3) Bua's Investigation of Hamilton's Claims



About Jonathan Ben Cnaan of 53rd Street



Ventures

In his December 1989 affidavit, Hamilton recounts a conversation with Jonathan Ben Cnaan of 53rd Street Ventures. According to Hamilton, Ben Cnaan disclosed to Hamilton, in October 1983, a meeting that Ben Cnaan had had in September 1983 in New York City with someone whom Ben Cnaan described at the time as a businessman with ties to the highest level of the Reagan Administration. Ben Cnaan said that the businessman had told 53rd Street Ventures about Hadron's acquisition overture to INSLAW in April 1983; about his absolute determination to gain control of the PROMIS software for use in federal government contracts; about the contract disputes having arisen in INSLAW's contract with DOJ following INSLAW's refusal to sell out to Hadron; and about the fact that those disputes would never be able to be resolved as long as INSLAW refused to let the unnamed businessman use PROMIS for federal government contracts. Bua describes at length his efforts to find Ben Cnaan. He states that he would have liked to have talked with Ben Cnaan but then implies that it is not that important because Earl Brian has already denied being the businessman depicted in the statements attributed to Ben Cnaan, and, moreover, Hamilton does not actually quote Ben Cnaan as claiming that the unnamed businessman was Earl Brian.

Earl Brian, Dominick Laiti, and Paul Wormeli were in New York City the very same month that Ben Cnaan had the meeting with the unnamed businessman. Brian was, according to the Bua Report, on the Board of Directors of the National Association of Small Business Investment Companies. 53rd Street Ventures is a Small Business Investment Company.

Conducting a sworn interrogation of Ben Cnaan, under the circumstances, would have been extremely important. If Ben Cnaan were to identify either Earl Brian or Dominick Laiti as the businessman to whom he referred in his October 1983 meeting with William Hamilton and if Ben Cnaan would confirm the essence of the statements attributed to him in Hamilton's affidavit24, it would directly tie Earl Brian and Hadron into the DOJ use of contract disputes with INSLAW as leverage to help Hadron wrest control of the PROMIS software.

Ben Cnaan apparently visited New York City in early 1993, from Israel where he currently lives. With a modest effort, INSLAW was able to discover Ben Cnaan's current address and telephone number in Israel:

Ha' Adamit #6 Herzlia, Israel Telephone 258-7787.



(c) The Systems and Computer

Technology, Inc. (SCT) Connection

Bua professes not to understand how INSLAW's "allegations about SCT would fit into INSLAW's theory of a Hadron conspiracy." Bua further states that "there would be no apparent reason for Brian or Hadron to be attempting to control INSLAW (through SCT) in 1986."

SCT launched a "hostile takeover" bid for INSLAW in May 1986, the very month that DOJ issued its Request for Proposals for the Uniform Office Automation and Case Management Project, code-named Project EAGLE. This was the largest procurement in DOJ history. INSLAW believes that the PROMIS software was intended by DOJ to be the uniform case management software for the Project EAGLE computers.25 INSLAW further believes that Earl Brian's Hadron, Inc. was originally slated to receive the Project EAGLE contract award by DOJ as a sweetheart gift from Brian's long-time friend, then Attorney General Meese. INSLAW believes that Brian and DOJ abandoned the plan to use Hadron as the vehicle for the contract in the fall of 1985, following the failure of the covert DOJ effort to force INSLAW's liquidation.

INSLAW believes that, by January 1986, Brian and DOJ had substituted Tisoft, Inc. as the vehicle for the planned sweetheart Project EAGLE award.26 That month, Tisoft was awarded a $30 million computer systems contract by Meese's Justice Department, and Tisoft also amended its articles of incorporation to permit the sale of common stock to new outside owners who would then have majority control of the company.

Margaret Wiencek, the former Director of Administrative Services at Earl Brian's Financial News Network (FNN), claims that Patrick R. Gallagher of Tisoft, Inc. was also someone who regularly telephoned the chairman's office at Earl Brian's FNN Headquarters in Los Angeles during at least 1987.

INSLAW believes that DOJ encouraged the SCT hostile takeover bid for INSLAW in 1986 in order to preclude INSLAW from seeking redress in the courts for DOJ's 1983 theft of the PROMIS software and to remove INSLAW as an obstacle to the planned award of Project EAGLE to Tisoft and the planned implementation of PROMIS on the Project EAGLE computers.

Bua placed quotation marks around the word "hostile" in referring to SCT's effort to purchase INSLAW in early 1986, suggesting that he doubted INSLAW's characterization of the SCT initiative as a "hostile takeover" initiative. Through third- party discovery in 1987, however, INSLAW obtained an internal SCT document prepared in conjunction with SCT's investment bankers in December 1985. That SCT document uses the words "hostile takeover" to describe the then-planned effort to acquire INSLAW. E. Bua's Investigation of the Death of the

Investigative Journalist, Danny Casolaro

1. Evidence That Casolaro Broke the INSLAW

Case the Week He Died

In August 1990, Mr. Terry D. Miller, President of Government Sales Consultants, Inc., encouraged a free-lance investigative journalist by the name of Danny Casolaro to consider investigating DOJ's theft of the PROMIS software. Casolaro and Miller had previously worked together on the publication of a newsletter that focused, at least in part, on federal government computer procurement fraud, and Miller thought Casolaro had the ideal background for the INSLAW investigation. Miller is also a friend of Mr. and Ms. Hamilton.

On Saturday, August 10, 1991, approximately one year after Casolaro began his full-time, self-financed investigation of the INSLAW affair, Casolaro was found dead in the bathtub of his room in the Sheraton Hotel in Martinsburg, West Virginia. Casolaro's wrists on both arms had been slashed, with almost a dozen slashes, some deep enough to have severed the tendons. The local Martinsburg, West Virginia, authorities ruled Casolaro's death a suicide.

In the late afternoon of the Monday before his death, i.e., on August 5, 1991, Casolaro had telephoned Miller to tell him that the INSLAW case, to which Miller had directed him one year earlier, had proved to be the story of his lifetime.

Later that night, Casolaro telephoned Robert Booth Nichols in Los Angeles. Nichols has a background in CIA covert intelligence operations and, in the course of about 100 hours of telephone conversations with Casolaro during the previous 12 months, Nichols had served as a sounding board for Casolaro's probe of the clandestine world of U.S. and foreign intelligence operations. According to Nichols' statement to William Hamilton, Monday night's telephone call from Casolaro was the first time in their year-long colloquy when Casolaro was not seeking any information. Casolaro told Nichols that he had just come back from a meeting with a source on the INSLAW case, that he now knew everything there was to know about the INSLAW case, that the Hamiltons were going to be quite excited, and that Casolaro had to return right away for another meeting with the same source to collect the final piece of documentary evidence. Nichols described Casolaro that night as "euphoric."

Also Monday night, Casolaro met with Ann Klenk, a fellow journalist and long-time friend, at a pub frequented by Casolaro. According to Klenk, Casolaro said he had just returned from West Virginia, where he had met with a source on the INSLAW case, and that he had already broken the INSLAW case, but that he had to return right away to West Virginia to pick up a final piece of the evidence.

The next day, Tuesday, August 6, 1991, Casolaro telephoned William Turner in Winchester, Virginia, and told him that he would be having a follow-up meeting later in the week in Martinsburg, West Virginia, with some employees from the office of Senator Robert Byrd of West Virginia. Casolaro described one of the employees as a relative of Ms. Barbara Videnieks and further described that person as his source on INSLAW. According to









Turner, Casolaro asked him to remove two numbered and sealed packets of Casolaro's INSLAW documents from Turner's home safe and bring them the 20-mile distance to Martinsburg, West Virginia, on the afternoon of Friday, August 9, 1991 so that Casolaro could show them to Ms. Videnieks' relative. Ms. Barbara Videnieks is the Chief of Staff to Senator Robert Byrd. Her husband, Peter Videnieks, was the DOJ Contracting Officer on INSLAW's PROMIS contract. According to Michael Riconosciuto, Peter Videnieks was also a close associate of Earl Brian in Brian's alleged international sales and distribution of PROMIS. Ms. Margaret Wiencek, former Director of Administrative Services at Financial News Network (FNN) Headquarters in Los Angeles, claims, in sworn testimony, to have taken telephone messages from Peter Videnieks in 1987 in the office of the FNN Chairman. Earl Brian was Chairman of FNN in 1987. Both Videnieks and Brian have, however, denied under oath even knowing each other.

On Wednesday, August 7, 1991, Casolaro socialized with a friend by the name of Ben Mason. Casolaro told Mason that he had broken the INSLAW case but had to return to Martinsburg, West Virginia, the following day for a final meeting with some individuals with whom he had just recently met.

On Thursday, August 8, 1991, Casolaro traveled to Martinsburg, West Virginia, and checked into the Sheraton Hotel.

On Friday afternoon, August 9, 1991, Turner met with Casolaro in the parking lot of the Sheraton Hotel and delivered both sealed packets of Casolaro's INSLAW documents, as well as documents relating to Turner's own case. Turner's own case involved alleged federal contract fraud at Hughes Aircraft, where Turner had apparently been employed as a flight simulation engineer. Casolaro reconfirmed to Turner that his meeting with Ms. Barbara Videnieks' relative and one other employee from Senator Byrd's office was still on for Friday night. Casolaro warned Turner "to watch his rear," and made arrangements to meet Turner the following day, Saturday, in the Washington, DC, area to celebrate.

On Saturday morning, August 10, 1991, Casolaro was found dead in the bathtub of his Sheraton Hotel room.

Turner has contemporaneous handwritten notes about his conversations with Casolaro on Tuesday and Friday of the week Casolaro died. Bua neither questioned Turner nor sought copies of his notes.

Bua never questioned Terry Miller or Ben Mason either. Although Bua or one of his Assistant U.S. Attorneys spoke by telephone with both Ann Klenk and Robert Nichols, no one from Bua's team ever attempted to probe their knowledge of Casolaro's investigative work in the days preceding his death.

Notwithstanding these facts, Bua stated that he was persuaded from his review of the investigative records of the local Martinsburg authorities "that Mr. Casolaro's death was fully and fairly investigated and that the conclusion of the local authorities that his death was a suicide was amply supported by the facts." Bua details various items of physical evidence from Casolaro's hotel room that he claims "strongly supports the conclusion of the local authorities that the death was a suicide." Bua fails, however, to take any cognizance of the fact that none of Casolaro's investigative working papers was found in the hotel room. Casolaro always carried such files with him, was seen leaving Washington for Martinsburg with the files, and was seen in Martinsburg with the files. Moreover, the two packets of Casolaro's sensitive INSLAW documents and the Hughes aircraft documents that Turner claims to have personally delivered to Casolaro in Martinsburg, West Virginia, Friday afternoon were also missing.

Riconosciuto claimed in a sworn affidavit, prior to his arrest in early 1991, that Peter Videnieks had threatened him with prosecution and conviction if he testified about the INSLAW matter. Casolaro was evidently having a secret follow-up meeting in Martinsburg, West Virginia, with someone in Senator Byrd's office who is related to Peter Videnieks' wife, Barbara.

In a telephone conversation one weekend shortly before his death, Casolaro read to William Hamilton detailed biographical data about various employees in Senator Robert Byrd's office and told Hamilton that he believed he could break the INSLAW case by penetrating Senator Byrd's office.

Casolaro had told the Hamiltons of other connections to Peter and Barbara Videnieks and Senator Robert Byrd's office during the final two months of his life. On June 12, 1991, for example, Casolaro said that he had spoken by telephone with Peter Videnieks at Videnieks' office at the U.S. Customs Service but that Videnieks had declined to answer Casolaro's questions about INSLAW and had, instead, referred Casolaro to Charles Ruff, the Washington, DC, attorney whom DOJ was paying to represent Peter Videnieks in the House Judiciary Committee's investigation of the INSLAW case.

Casolaro also told the Hamiltons about a series of meetings he had had during the final month of his life with a covert intelligence operative of the U.S. Army Special Forces whose name is Joseph Cuellar. According to Casolaro, Cuellar, during a purportedly chance encounter at Casolaro's neighborhood pub in mid-July 1991, asked Casolaro what line of work he was in and, upon hearing Casolaro describe his journalistic investigation of the INSLAW case, asserted that he knew all about INSLAW because Peter Videnieks was one of his closest friends. According to Casolaro, Cuellar also stated that his ex-wife worked for Ms. Barbara Videnieks in Senator Byrd's office. Casolaro told the Hamiltons that Cuellar had later persuaded Peter Videnieks to meet Casolaro and discuss the INSLAW case with him. The Hamiltons never heard whether the meeting actually took place, however.

Lynn Knowles, a friend of Casolaro's, attended at least two of the meetings between Casolaro and Cuellar. Bua never sought to interview Knowles, and there is no reason to suspect that Bua sought to interrogate Cuellar either. She told William Hamilton that she and Cuellar had spoken by telephone several days after Casolaro's death and that Cuellar said the following to Knowles, in words or substance:

What Danny Casolaro was investigating is a business. If you don't want to end up like Danny or like the journalist who died a horiffic death in Guatemala,27 you'll stay out of this. Anyone who asks too many questions will end up dead.

2. The Question of the FBI's Role in the

Investigation of Casolaro's Death

Bua also absolves DOJ of having exerted any influence on the investigation executed by the West Virginia authorities, "beyond the normal and expected assistance law enforcement agencies typically provide one another." Bua further describes this exception as "assistance and information sharing between the local authorities and the regional FBI office..."

Bua apparently did not look into the FBI's role in the execution of a search warrant in William Turner's home in September 1991 or in the refusal, long after criminal charges against Turner were dismissed, to return to Turner documents taken from Turner's home safe. About six weeks after Casolaro's death, Turner, who has one artificial leg, was arrested and charged with the robberies of two local area banks. That same month, the FBI assisted local authorities in executing a search warrant in Turner's home. The official inventory of the search lists the seizure of a spiral notebook that Turner claims contains detailed notes about his collaboration with Casolaro and that Turner says was taken by the FBI from Turner's home safe. This is the same home safe where Turner claims he stored sealed packets of Casolaro's sensitive documents on INSLAW.

The local authorities dropped the bank robbery charges against Turner after keeping him in pre-trial incarceration in the county jail for over six months. FBI "enhancements" of the photographs taken by hidden bank cameras reportedly established that Turner was not the robber. At a preliminary hearing, an eye witness to one of the robberies, a bank teller, also reportedly acknowledged that Turner could not have been the robber she saw run out the bank because his artificial leg would obviously have prevented Turner from running.

Turner claims that the local FBI office in Winchester, Virginia, has refused to return the documents seized from his home in September 1991, on the grounds that the Martinsburg, West Virginia, authorities do not wish to have those documents returned. On May 26, 1993, Turner filed a motion in the U.S. District Court for the Western District of Virginia in Harrisonburg, Virginia, seeking to compel the FBI to return his documents and other personal property. The motion is pending.

In its September 1992 Investigative Report, the House Judiciary Committee stated that it had deposed for two days FBI Special Agent Thomas Gates, who had been discussing the INSLAW investigation with Casolaro during the final four weeks of Casolaro's life. Gates evidently testified that Casolaro had told him about a specific threat on his life, shortly before Casolaro was found dead. Gates also testified to the House Judiciary Committee

that

the

FBI may have jurisdiction to investigate the possible murder of Casolaro under the Interstate Transportation in Aid of Racketeering (ITAR) statute.

Bua, apparently, inexplicably failed to interview FBI Special Agent Thomas Gates. Notwithstanding this failure, Bua makes the following statement in his report on page 247:

A private citizen's death, whether a suicide or a murder, is outside the normal jurisdiction of the federal government. Instead, it is a state or local matter. Accordingly, we find nothing unusual in the fact that DOJ did not undertake to investigate Casolaro's death.

F. Bua's Comments About the Alleged Sham Contract

Disputes

In Section III, C.1., INSLAW details Bua's seemingly superficial investigation of specific allegations from a credible source that Presidential appointee D. Lowell Jensen engineered INSLAW's contract disputes in the spring of 1983 in order to force INSLAW out of business so that DOJ's PROMIS-based business could be awarded to political friends and supporters of the then current administration. As demonstrated in this section, there is an obvious contrived quality to each of the two major contract disputes and additional evidence suggestive of a key role for Jensen in either engineering the dispute, e.g., the dispute about the amount of fee owed INSLAW in light of the termination for convenience of the word processing part of the contract, or in perpetuating a wholly contrived dispute, e.g., apparently refusing to allow DOJ attorney Janis Sposato to act independently in seeking to resolve the computer time-sharing billing dispute on the merits.

In Section III, D.2(3), INSLAW details Bua's failure to interrogate Jonathan Ben Cnaan about what he was told in September 1983 by someone he would only identify as a "businessman with ties to the highest level of the Reagan Administration" who was determined to wrest control of PROMIS from INSLAW for use in federal government contracts. Ben Cnaan, in a meeting with William Hamilton in October 1983, quoted the unnamed businessman as boasting that INSLAW had been hit with contract disputes at DOJ right after INSLAW refused to be purchased by Earl Brian's Hadron and further boasting that the contract disputes would prove insoluble unless and until INSLAW agreed to allow the businessman to use the PROMIS software in federal government contracts.

Either of the two aforementioned investigative leads could, if properly pursued, have produced external evidence in support of INSLAW'S claim that the contract disputes that arose in the spring of 1983 were sham disputes concocted in order to drive INSLAW out of business so that DOJ could award the PROMIS case management software business to political friends and supporters.

Bua stated that he "did not believe it was appropriate ... to attempt to determine the esoteric government cost accounting issues..." underpinning those contract disputes, but that he did examine the disputes sufficiently in order to be able "to determine whether the DOJ's positions and actions leading up to the parties' disputes were so clearly baseless or without foundation as to give rise to a reasonable inference that the origins of the disputes must have been motivated by improper purpose and a desire to force INSLAW into bankruptcy."

1. DOJ's Refusal, Apparently at the Behest

of Presidential Appointee D. Lowell

Jensen, to Resolve, on the Merits, Its

Main Contract Dispute with INSLAW, a

Dispute That is Self-Evidently Contrived

Bua's inquiry led him to conclude that "the government's positions about overcharging and cost overruns were founded upon legitimate, good faith concerns and the desire to protect the government's interests, and not out of the desire to bankrupt INSLAW or to force its liquidation."

Bua bases his conclusion in part, at least, on the fact that both DOJ's Audit Staff and the Defense Contract Audit Agency (DCAA) agreed that INSLAW's computer time-sharing costs under its PROMIS Implementation Contract were "essentially unauditable." Moreover, Bua quotes DCAA as finding that DOJ overpaid INSLAW for the computer time-sharing services by approximately $590,000.

In examining the criticism that INSLAW's computer time- sharing costs are "essentially unauditable," it is important to position that criticism in context: The U.S. Government has never had any problem auditing the costs in INSLAW's computer cost center, and there has never been any material disagreement between DOJ and INSLAW on the "actual and allowable" costs in the computer cost center. For the peak year of INSLAW's PROMIS time- sharing services under the DOJ contract, i.e., Fiscal Year 1983, the computer cost center had slightly more than $2.5 million in "actual costs, allowable under U.S. Government contracts." (This amount includes $344,229 of Fiscal Year 1982 computer center costs that DOJ "carried forward" into Fiscal Year 1983 for reimbursement purposes.)

Almost all of the business of INSLAW's computer center in 1983 was with various U.S. Government customers, and, in light of the fact that INSLAW and the U.S. Government have always been in basic agreement about the amount of "actual and allowable" computer center costs that fiscal year, one might reasonably ask what is the problem.

The problem is what subset of the $2.5 million in actual and allowable computer center costs during Fiscal Year 1983 should be allocated to one particular U.S. Government contract, i.e., DOJ's PROMIS Implementation Contract.

When DOJ and INSLAW negotiated the PROMIS Implementation Contract during the winter of 1982, DOJ officials told INSLAW that DOJ wished to pay only for successful use of INSLAW's computer time-sharing services by U.S. Attorneys' Offices as measured by such indices as the number of successfully completed update or inquiry transactions and the number of devices used to access the time-sharing service by the U.S. Attorneys' Offices.28 DOJ told INSLAW, further, that it would not reimburse computer time-sharing costs except in relationship to such measures of successful use of the time-sharing service by U.S. Attorneys' Offices.

Based on these DOJ guidelines, INSLAW and DOJ negotiated a time-sharing billing formula that both parties believed would fairly compensate INSLAW for its expected computer time-sharing costs by measuring not costs, but the aforementioned indices of successful use of the PROMIS time-sharing service. Once the parties to a contract negotiate the terms for the computer time- sharing billing formula or algorithm, the vendor writes a piece of computer software that automatically keeps track of the very indices that the parties have agreed will serve as the basis for the billings. Conversely, the piece of the computer software is not written to track factors that are not to be taken into consideration in computing the computer time- sharing billings such as the subset of the computer center's actual and allowable costs that are allocable on any given day to the PROMIS Implementation Contract.

DOJ has consistently refused to acknowledge the fact that the reason that the subset of INSLAW's actual and allowable computer center costs that should properly be allocated to the PROMIS Implementation Contract cannot be verified through a standard U.S. Government cost incurred audit is that the time- sharing billings were not supposed to be either based on incurred costs or subject to an incurred cost audit.

In 1985, Deputy Attorney General D. Lowell Jensen arranged, at INSLAW's request, an effort to negotiate a settlement of the computer time-sharing billing question and the other disputes under the contract. Janis Sposato, who chaired the negotiations for DOJ, insisted on DOJ's right to try to reconstruct, by rule of thumb, the estimated subset of actual and allowable computer center costs for Fiscal Year 1983 that were actually incurred in performance of the computer time-sharing service under the PROMIS Implementation Contract. DOJ and INSLAW had about 10 negotiation sessions in 1985, with most of the time spent on trying to reconstruct the actual time-sharing costs for 1983. DOJ and INSLAW had already managed to establish the reasonableness of most of the Fiscal Year 1983 computer time-sharing billings under the DOJ contract when Sposato and INSLAW discovered another cost category that was sufficiently large by itself to remove any remaining question about the billings under the negotiated formula.29 In other words, the negotiations had led to the inescapable conclusion that DOJ would not have overcompensated INSLAW for computer time-sharing costs during Fiscal Year 1983 if DOJ had honored its Negotiated Agreement on computer time-sharing billings under that contract.

Instead of disposing of the computer time-sharing question, however, Sposato announced shortly thereafter, in words or substance, as follows: "My management upstairs is unwilling to allow me to make any more concessions." At the time, Sposato reported directly to the Assistant Attorney General for Administration, whose offices were on the same floor as Sposato's. That individual, however, reported, in turn, directly to Deputy Attorney General Lowell Jensen, whose offices were several floors upstairs. INSLAW inferred then and infers now that Sposato was alluding to Deputy Attorney General Lowell Jensen's unwillingness to permit a resolution on the merits of the Fiscal Year 1983 computer time-sharing issue because it was DOJ's main "fig leaf" for its wrongful withholding of payments under the contract.

Although Sposato did not disclose it to INSLAW, DOJ already knew that INSLAW's computer time-sharing billings for Fiscal Year 1983 were reasonable. In 1987, INSLAW obtained through discovery an internal DOJ memorandum authored in 1981 by the Assistant Attorney General for Administration, purporting to estimate what it should cost for a vendor in Washington, DC, to provide 12 months of PROMIS computer time- sharing services to the very same U.S. Attorneys' Offices supported by INSLAW in Fiscal Year 1983. DOJ's "should cost" estimate was slightly higher than INSLAW's billings for Fiscal Year 1983 under the Negotiated Agreement for time-sharing billings. The DOJ memorandum also explicitly anticipated the need for the very kinds of contractor technical support personnel that DOJ had ignored in determining that INSLAW's computer time- sharing costs were excessively high.

How, then, did DCAA decide that DOJ had overpaid INSLAW for such services? Number one, DOJ strenuously resisted INSLAW's repeated requests before the Department of Transportation Board of Contract Appeals (DOTBCA) to produce to INSLAW and to DCAA DOJ's records and notes on the 1985 so-called negotiations on this very subject. DOJ never produced the documents, and the DOTBCA judge declined to order DOJ to produce them. Number two, DCAA, in applying its own rules of thumb without talking to INSLAW, made some very significant mistakes of fact. Although Bua makes no mention of it, INSLAW filed before DOTBCA a sworn affidavit from the senior DCAA auditor on INSLAW acknowledging such material errors of fact in the DCAA audit and stating that DCAA "should have considered the materiality of such reallocations of cost once it had been advised of the issues above and of the cost impact to the PROMIS Implementation Contract for Fiscal Year ended 30 September 1983."

The total costs under the three-year PROMIS Implementation Contract that are in dispute between the DCAA audit report and INSLAW are about $1.2 million. The computer timesharing billing question alone accounts for all but $100,000 of that amount.

2. Presidential Appointee D. Lowell Jensen

Leads DOJ Effort to Withhold Payment of

INSLAW's Profit by Blaming INSLAW for

DOJ's Own Delays in the Word-Processing

Part of the INSLAW Contract

DCAA and INSLAW also have a disagreement on one other issue: the amount of fee or profit payable to INSLAW under the PROMIS Implementation Contract. As with the negotiated time-sharing billing algorithm, the amount of fee earned is not properly subject to an incurred cost audit. INSLAW is claiming $1,145,000 in fee, and DCAA has recommended $687,000 in fee, a difference of $458,000.

The amount of fee earned by INSLAW is related primarily to the legal effect on "target costs" under INSLAW's contract of the DOJ's February 1984 termination, for the convenience of the government, of the word processing part of the PROMIS Implementation Contract. In other words, it is primarily a legal question, not an incurred cost audit question. As with the computer time-sharing billing issue, however, an honest decision by DOJ would expose the truth about the contrived and wrongful basis for the withholding and, thereby, deprive DOJ of its other principal "fig leaf. "

DOJ had required the winning vendor to implement in each of the 70 smaller U.S. Attorneys' Offices, on government-furnished word processing machines, a rudimentary case management software capability. In February 1984, Presidential appointee D. Lowell Jensen approved a DOJ decision to terminate the word processing part of the contract for the convenience of the government. The legal effect of a convenience termination is that the contractor bears no financial responsibility for the partial termination.

In December 1983, however, Jensen had secretly pre-approved a plan for DOJ Contracting Officer Peter Videnieks to terminate INSLAW's PROMIS Implementation Contract, apparently in its entirety, for INSLAW's alleged default on the word processing part of the contract. INSLAW did not find out about this until it obtained DOJ documents in litigation discovery in 1987.

What prompted the Jensen decision to transform an apparent, planned complete termination for default into a partial termination for convenience was an internal February 1984 legal opinion by DOJ's internal contract administration counsel, William Snider. Snider pointed out that DOJ could not sustain a case against INSLAW for delay in the word processing phase of the contract because DOJ itself had been late in selecting the word processing hardware for this portion of the contract, a prerequisite to INSLAW's ability to begin the work, and because DOJ had failed thereafter to negotiate with INSLAW a new, legally binding schedule for the word processing part of the contract.

DOJ Administrative Counsel William Snider authored the internal legal opinion in the month of February 1984, when the Senate Judiciary Committee commenced its hearings on the confirmation of Edwin Meese as Attorney General of the United States, and when Judiciary Committee member, Senator Max Baucus, sent a team of General Accounting Office auditors into DOJ on an emergency investigation of INSLAW's PROMIS Implementation Contract. Senator Baucus' office had received a tip from a DOJ whistleblower to the effect that as soon as Meese was confirmed as Attorney General, he and Jensen planned to award a "massive sweetheart contract" to unnamed "friends" to implement the PROMIS software in every litigative office of DOJ.

Jensen's wrongful role in the word processing dispute is even more obvious than his role in the computer time-sharing billing dispute. DOJ has been unwilling, however, to admit the increasingly inescapable fact that DOJ officials concocted the contract disputes in order to get leverage over INSLAW in DOJ's theft of the PROMIS software.

G. Bua's Investigation into Possible DOJ Complicity

in the Failure of Judge Bason to Obtain

Reappointment to the U.S. Bankruptcy Court

A Merit Selection Panel, headed by U.S. District Judge Norma Johnson, was appointed in 1987 to make recommendations to the D.C. Judicial Council, as well as to the ultimate appointing authority, the U.S. Court of Appeals for the District of Columbia, about the ranking of various applicants, including incumbent Judge George F.. Bason, Jr., for the new, 14-year term of sole U.S. Bankruptcy Judge for the District of Columbia.

The Merit Selection Panel gave its number one ranking to a DOJ attorney, S. Martin Teel, who had no judicial experience and very little bankruptcy law experience. Teel had represented the U.S. Government before Judge Bason in the INSLAW bankruptcy proceeding in an attempt in 1987 to convince Judge Bason to force INSLAW into liquidation.

On September 18, 1987, while the Merit Selection Panel was sitting, Judge Bason announced his oral ruling in the adversary proceeding of INSLAW, Inc. v. the U.S. Department of Justice. In that ruling, Judge Bason found that DOJ officials "took, converted, stole" INSLAW's proprietary PROMIS computer software product "through trickery, fraud and deceit." S. Martin Teel argued for INSLAW's liquidation before Judge Bason approximately a month after the aforementioned oral ruling.

1. The Merit Selection Panel Determined

That It Would Be Inappropriate to Permit

Judge Bason's Inslaw Ruling to Influence

Its Evaluation of Bason

Bua reports that the Panel members agreed that the Inslaw opinion should not influence their evaluation of Judge Bason and that based on his inspection of the notes of the Panel and of the Judicial Council, "There is no indication that the Inslaw ruling played any role in the process."

Bua noted that the Merit Selection Panel extended invitations to both DOJ and to INSLAW counsel Charles R. Work to appear before the Panel to discuss their respective views of Judge Bason and that INSLAW counsel Charles Work did make such an appearance, but that DOJ declined the opportunity. Bua then makes the following statement:

It would be odd, however, if DOJ had foregone an opportunity to fully express its views of Judge Bason in an ex-parte proceeding with a pledge of confidentiality, in favor of a covert mission to unseat him. We found no evidence of any such covert effort by DOJ.

In view of Bua's aforementioned statement that Panel members did not consider it appropriate for Judge Bason's adverse ruling against DOJ to influence their evaluation of Bason's candidacy, DOJ would have been well advised not to have proceeded openly. As is explained hereafter, Bua found that DOJ did, in fact, wish to unseat Judge Bason, and that one DOJ attorney, at least, conveyed his negative view of Judge Bason directly to the Chair of the Merit Selection Panel.

2. DOJ Civil Division Attorney Stuart

Schiffer, Currently the Acting Assistant

Attorney General for the Civil Division,

Assumes the Leadership Role to Separate

the Inslaw Case from Judge Bason

According to the House Judiciary Committee's September 1992 Investigative Report entitled The INSLAW Affair, Deputy Attorney General Arnold Burns, in approximately July 1987, asked the Civil Division to "consider initiatives for achieving a more favorable disposition" of the INSLAW adversarial proceeding against DOJ being tried before Judge Bason. The Committee also reported that, based on Burns' request, Stuart Schiffer, Deputy Assistant Attorney General in the Civil Division, initiated research by Civil Division attorneys in July 1987 "to investigate the possibility of having Judge Bason disqualified from the INSLAW case on the grounds of bias."

3. Schiffer Had a Long-Term Friendship with

the Chair of the Merit Selection Panel

In addition to being the chief DOJ official concerned with finding a way "to achieve a more favorable disposition" by separating the INSLAW case from Judge Bason," Schiffer also had a long-term personal relationship with Judge Norma Johnson, the Chair of the Merit Selection Panel. For example, according to Bua, "Judge Johnson and Stuart Schiffer were office partners when both began their legal careers as staff attorneys with DOJ in the early 1960's," and "they have stayed in touch over the years, mostly when Judge Johnson has called Schiffer to recommend one of her clerks for employment with DOJ."

According to Bua, "Judge Johnson did call Schiffer during the merit selection process," but Judge Johnson was only seeking "Schiffer's candid appraisal of two candidates from DOJ who were in the panel's short list." According to Bua, Judge Johnson told Schiffer "that she was not calling about Bason and that she did not want to hear anything about Bason," and that "Schiffer said nothing about Bason."

4. After Discussing the Inslaw Case with

Schiffer, Another DOJ Attorney Contacts

the Chair of the Merit Selection Panel

about INSLAW

According to Bua, Schiffer did make known "his displeasure with Bason" to another DOJ attorney, Royce Lambreth, who subsequently turned over directly to Judge Johnson a copy of a transcript of Judge Bason's September 25, 1987 oral ruling against DOJ, using "a tone of voice that allowed Judge Johnson to surmise Lambreth's negative view of Bason's ruling." Shortly thereafter, Lambreth was confirmed as a U.S. District Judge for the District of Columbia. According to Bua, "although Judge Johnson presented the opinion without commentary, at least one Panel member perceived that the opinion was presented, not because it revealed great wisdom and scholarship but because it reflected unfavorably on Judge Bason's suitability for the bench."

According to Bua, Judge Lambreth cannot recall where he obtained the transcript of Judge Bason's oral ruling in the INSLAW case. Retired Assistant U.S. Attorney Froman "has no recollection of being asked to obtain or of obtaining the INSLAW ruling," although she was the subordinate to Lambreth with responsibility for maintaining the file on INSLAW within the U.S. Attorney's Office for the District of Columbia.

Until the Bua investigation, Judge Johnson, according to the Bua Report, had maintained to the Senate Permanent Investigations Subcommittee and possibly also to the House Judiciary Committee "that she had no contacts with DOJ regarding Judge Bason and she received no negative input from DOJ regarding the INSLAW case."

Bua states that "the Senate and the House Reports both found no evidence that anyone from DOJ had attempted to influence the selection process." According to the Bua Report, however, the failure of Judge Johnson to recall the communication from then DOJ Attorney Royce Lambreth would have deprived the two investigations of any knowledge of just such an attempt.

"It was the only judicial opinion that was circulated," according to the Bua Report. During his tenure on the U.S. Bankruptcy Court, Judge Bason reportedly had approximately 70 published opinions.

Bua absolves Royce Lambreth of any questions of impropriety in regard to his previously undisclosed communications with the Chair of the Merit Selection Panel about his criticism of Judge Bason's ruling against DOJ in the INSLAW case. Bua separately absolves Lambreth whether he was acting in his then capacity as a DOJ attorney or in his then future capacity as a U.S. District Court judge. Bua was apparently ready to absolve Lambreth of wrongdoing irrespective of any final determination of the facts about his motivation.

5. The Attempt by Judge Bason's

Predecessor, Roger Whelan, to Disparage

Bason to the Merit Selection Panel for

the Administrative Disarray in the

Clerk's Office That the Chief Judge of

the U.S. District Court Traces to the

Tenure of Whelan Himself

The House Judiciary Committee stated as follows in its September 1992 Investigative Report: "According to [then Chief U.S. District] Judge Robinson, Judge George Bason inherited a mess (administratively) in the clerk's office when he took over from Judge Roger Whelan."

According to the House Judiciary Committee's report, Chief Judge Robinson also stated that "Judge Bason was getting the system under control"..." by May 1986, and so reported that fact in the Judicial Conference report for the D.C. Circuit that year." The Committee also quotes Mr. Martin Bloom, who took over as clerk of the D.C. Circuit Bankruptcy Court in 1986, to the effect that by "the latter part of 1987, administratively, I think the court was up to par. "

With Chief Judge Aubrey Robinson blaming the administrative problems in the bankruptcy court clerk's office on the tenure of former Judge Roger Whelan and with both Judge Robinson and the new clerk, brought in by Judge Bason, agreeing that the administrative problems had been cured at the latest by the latter part of 1987, it is curious that the Merit Selection Panel had concluded that the administrative problems still existed and that they were the fault of Judge Bason. Even more disturbing is the evidence from the Bua Report that the Panel reached this conclusion in large part on the basis of ex-parte communications from Judge Whelan himself:

One lawyer who commented negatively about Judge Bason to the Panel was Roger Whelan, the bankruptcy judge who preceded Bason.

What is relevant is the perception that Judge Bason was a poor administrator. That perception, accurate or not, was made known to the Panel at least by former Judge Whelan.

We note only that the Panel's apparent perception that Judge Bason was an inefficient administrator was not totally baseless, and, more importantly, was not attributable to a DOJ campaign against Bason. The Panel had heard that criticism at least from former Bankruptcy Judge Whelan ...

The Bua Report makes it clear that Whelan's ex-parte criticisms of Judge Bason to the Merit Selection Panel were influential in the Panel' s deliberations about Judge Bason's suitability for reappointment. This fact makes it most unusual that the Panel failed to interview any of the individuals most responsible for the administration of the court about Whelan's allegations that Judge Bason was a poor administrator. According to the House Judiciary Committee's September 1992 Investigative Report, the Panel failed to interview Judge Bason, Bankruptcy Court Clerk Martin Bloom, the former bankruptcy court clerk, or Chief Judge Robinson about Whelan's representations concerning Judge Bason's responsibility for the administrative problems. Moreover, according to the Committee, the Panel also failed to examine any statistics in order to determine empirically the administrative condition of the court.

6. At the Time of Whelan's Effort to

Discredit Judge Bason to the Merit

Selection Panel, Whelan Was Representing

One of INSLAW's Creditors, a Creditor

That Appeared to Have Been Acting in

Collusion with DOJ in the INSLAW Affair

During 1987, Roger Whelan became counsel of record for AT&T in the INSLAW bankruptcy. AT&T has employed no fewer than five law firms of record to represent its interests in the INSLAW bankruptcy. AT&T's interests arose from its having contracted in August 1984 with INSLAW to port the INSLAW case management software for operation on AT&T's then-new line of mini-computers and from AT&T's having advanced to INSLAW that month approximately $380,000 to perform the software port. AT&T expected to recover the advance from future royalties payable to INSLAW on the basis of AT&T's sale of the INSLAW software to AT&T's law firm customers.

On February 8, 1985, the day after INSLAW filed for bankruptcy protection, AT&T's first outside counsel in the INSLAW bankruptcy proceeding filed his Notice of Appearance with the U.S. Bankruptcy Court in Washington, DC. Kenneth Rosen had previously been employed in DOJ's U.S. Trustee's Office for the Southern District of New York under Cornelius Blackshear, and Blackshear's then First Assistant Harry Jones.30 In a deposition, Jones, whom Bankruptcy Judge Bason ruled was supposed to relocate temporarily to Washington, DC, in 1985 in order to force INSLAW into a Chapter 7 liquidation, acknowledged that he and Rosen had continued a close social relationship since working together in the DOJ Trustee's Office in New York City, but denied ever discussing the INSLAW matter with Rosen

AT&T had become a member of INSLAW's Unsecured Creditors Committee in an unusual fashion, through assistance from DOJ itself. DOJ's U.S. Trustee's Office for the Washington, DC, area appointed the Unsecured Creditors Committee from the creditors listed by INSLAW, in a mandatory filing with the bankruptcy court, as the 20 largest unsecured creditors. AT&T was not on the INSLAW list. After announcing the appointment of the Committee, DOJ's Trustee's Office announced the supplementary appointment of AT&T to the Committee.

Between February and August 1985, when the covert DOJ scheme to force INSLAW into liquidation was under way, Rosen was extraordinarily active in the INSLAW bankruptcy. For example, Rosen deluged INSLAW, its bankruptcy counsel, the counsel for the Unsecured Creditors Committee, and the bankruptcy court with written and/or telephonic questions and objections relating to the most routine business decisions by INSLAW such as hiring a replacement financial controller. Rosen's behavior was so striking that it elicited two letters of rebuke from the Unsecured Creditors Committee, the first from the Committee's counsel and the second from a businessman on the Committee. Rosen's co-counsel in the INSLAW bankruptcy was Shea and Gould, a firm that does not normally represent AT&T. Shea and Gould had, however, served for many years, including 1985, as the mergers and acquisition counsel for Hadron, Inc. and for Earl Brian's other companies. This was also Rosen's first time representing AT&T.

In June 1986, AT&T told INSLAW that it had fired Rosen as its counsel in the INSLAW case. In April 1986, Dixon and Dixon, an Omaha, Nebraska, law firm, filed its Notice of Appearance in the INSLAW bankruptcy on behalf of AT&T. Roger Whelan became Washington co-counsel for Dixon and Dixon in the INSLAW bankruptcy, although INSLAW does not know the exact date of Whelan's retention by AT&T.

The first move that Dixon and Dixon made on behalf of AT&T was an attempt to strip INSLAW of protection against hostile takeover bids, by trying to convince the Unsecured Creditors Committee, which had always supported INSLAW's periodic requests for extensions in the "period of exclusivity," to refuse any more extensions. This AT&T initiative occurred in April 1986. Several weeks after this unsuccessful effort by AT&T's new lead counsel, a Pennsylvania-based computer services company, Systems and Computer Technology (SCT), secretly approached INSLAW's Unsecured Creditors Committee with an offer of several millions of dollars in cash for INSLAW's creditors if the Committee would support the forced sale of INSLAW to SCT. SCT had met with DOJ officials, in advance of its hostile takeover attempt, to discuss the prospects for settling INSLAW's contract disputes once SCT acquired INSLAW and removed William A. Hamilton as President. One of the DOJ officials that SCT met with was a Presidential appointee from the same California county as Edwin Meese and Lowell Jensen.

Sidley and Austin, which normally serves as AT&T's outside general counsel and bankruptcy counsel, became the fifth counsel of record for AT&T in the INSLAW bankruptcy.31 Sidley and Austin and Dixon and Dixon attended virtually every bankruptcy court hearing on INSLAW during 1988 and early 1989 and sought aggressively to block INSLAW's Plan of Reorganization on behalf of their client, AT&T.

7. At the Time of Roger Whelan's Ex-Parte

Denigration of Judge Bason to the Merit

Selection Panel, Thomas C. Papson, a

member of the Panel, was Counsel of

Record to AT&T in an Unrelated U.S.

Government Contract Appeals Proceeding,

and Whelan was Counsel of Record to AT&T

in the INSLAW Bankruptcy

Thomas C. Papson, a member of the Merit Selection Panel, was counsel of record for AT&T at the General Services Board of Contract Appeals (GSBCA) during 1987 on litigation relating to contract awards.32 The contracts in question were precursors to the award by the General Services Administration of the massive FTS-2000 contract for a new telephone service for the United States Government, one of the largest, if not the largest, contracts in the history of the United States Government. AT&T eventually won the majority position in the FTS-2000 contract award.

8. The Mysterious "Read and Destroy"

"Confidential Memorandum" to the Chair

of the Merit Selection Panel Highly

Critical of Judge Bason, a Memorandum

That No One Acknowledges Authoring

According to the House Judiciary Committee, a federal judge gave the Committee a "Confidential Memorandum" dated December 8, 1987, that contained instructions at the top that it should be destroyed after reading. The judge who furnished the copy to the Committee told the Committee that "it was an important document and that it would be improper to destroy it." The memorandum was addressed to Judge Norma Johnson, but the author's name is not shown on the document. The author of the unsigned confidential memorandum is a member of the Merit Selection Panel, according to the federal judge who furnished the copy to the Committee and according to one other member of the Merit Selection Panel, as reported by the House Judiciary Committee.

The November 24, 1987 written report of the Merit Selection Panel did not include any of the observations contained in the December 8, 1987 Confidential Memorandum, according to the House Judiciary Committee. One of the observations in the confidential memorandum, according to the Committee, reads as follows:

Judge Bason evidenced no inclination to come to grips personally with the management challenge posed by the terrible shortcomings of the Office of the Clerk of our Bankruptcy Court.

The Bua Report disclaims knowledge of who authored the confidential memorandum, except to say that "the heart of the memo suggests that it is intended to reflect only an individual Panel member's views."

Although Bua claims not to know who authored the confidential memorandum that appears to contain untrue, derogatory information about Judge Bason's administrative abilities, he is prepared to absolve DOJ of any role in the creation or distribution of the memo:

There is no indication that someone from DOJ either prepared or planted the memo. The views expressed in the memo do not contain any criticism of Bankruptcy Judge Bason's rulings in the INSLAW matter.

Bua apparently did not entertain the possibility that DOJ could have "prepared or planted" or otherwise caused to be "prepared or planted" by others a confidential memorandum that would derail Judge Bason's appointment on grounds that, however spurious and unfounded, would obscure any possible linkage to DOJ's real motivation in getting rid of Judge Bason: anger at his ruling against DOJ in the INSLAW case.

A sitting federal bankruptcy judge was denied what should have been a relatively routine reappointment to the bench. His replacement was a clearly less qualified DOJ attorney who had unsuccessfully argued just weeks earlier for INSLAW's liquidation before

the very same federal bankruptcy judge. This overt DOJ effort to force INSLAW's liquidation occurred shortly after Judge Bason had condemned DOJ for an earlier, covert effort to force INSLAW's liquidation.

The written record of the Merit Selection Panel's deliberations indicates that the failure of Judge Bason to win reappointment was largely the result of criticisms of Judge Bason's administrative abilities. According to the House Judiciary Committee's published interviews with the individuals best able to assess the conditions of the Office of the Clerk of the Bankruptcy Court during Judge Bason's tenure, the criticisms are without foundation. The Merit Selection Panel, however, accepted them as true without subjecting the allegations to even the most minimal due diligence verification.

Roger Whelan, the primary source of the disparagement of Judge Bason to the Merit Selection Panel, either knew or should have known that the criticisms he was voicing to the Panel were without foundation, because the problems he was attributing to Judge Bason were, in fact, the legacy of Whelan's own tenure as sole bankruptcy judge for the District of Columbia, according to then U.S. District Court Chief Judge Aubrey Robinson. Moreover, Judge Bason had already remedied the administrative problems he had inherited, according to the House Judiciary Committee.

Confidence in the reliability of the Merit Selection Panel's written record is, moreover, called into question by the House Judiciary Committee's discovery of a "Read and Destroy" "Confidential Memorandum" containing harsh and false criticism of Judge Bason' s administrative abilities. Both the House Judiciary Committee and the Bua Report agree that the Confidential Memorandum appears to have been written by a member of the Merit Selection Panel. No member of the Panel has, however, acknowledged authorship.

Although the reasons cited in the record of the Merit Selection Panel for replacing Judge Bason do not withstand any serious scrutiny, there is evidence that DOJ was seeking to remove Judge Bason because of his unfavorable rulings against DOJ in the INSLAW case, combined with the fact that there were more cases still be tried in the INSLAW case. DOJ, in fact, had secretly communicated to the Chair of the Merit Selection Panel its strong disapproval of Judge Bason's then recent oral ruling against DOJ in the INSLAW case. The Chair thereafter circulated to the other members of the Panel a transcript of Judge Bason's oral ruling, secretly furnished by a DOJ attorney. These communications between DOJ and the Merit Selection Panel were kept secret during two separate Congressional investigations into the question of whether DOJ had influenced the decision on Judge Bason's reappointment.

At the same time that Roger Whelan was disparaging Judge Bason to the Merit Selection Panel, Whelan was counsel of record for AT&T in the INSLAW bankruptcy. Whelan's client, AT&T, had evidently been working in collusion with DOJ throughout the INSLAW bankruptcy in an effort to obstruct INSLAW's successful reorganization.

While Whelan was disparaging Judge Bason to the Merit Selection Panel, Thomas C. Papson, also then an attorney of record for AT&T in an unrelated U.S. Government contract proceeding, was a member of the Panel. The Chair of the Panel, Judge Norma Johnson, who failed to disclose to two Congressional investigations ex parte communications with a DOJ attorney disparaging Judge Bason's ruling in the INSLAW case, is a long- time

friend

of

Stuart Schiffer, currently the Acting Assistant Attorney General for the Civil Division and the DOJ official who spearheaded the effort to remove Judge Bason from the INSLAW case.

In light of the foregoing, the following statement in the Bua Report would appear to be open to question in any serious, independent investigation:

The Panel also heard from bankruptcy practitioners, including a former bankruptcy judge, who opposed Bason's reappointment for reasons wholly unrelated to INSLAW. _______________________________ 1 The Bua Report criticized the Investigative Report of the House Committee on the Judiciary for creating the impression that Judge Bryant reviewed the evidence de novo. It is the Bua Report that should be criticized. While Judge Bryant did not find that he was required to review the evidence de novo, effectively, he did so anyway. In so doing, he stated:

It is not necessary to duplicate the bankruptcy court's exhaustive findings of fact here. It is sufficient to state that _after careful review of all of the volumes of transcripts of the hearings before the bankruptcy court. the more than 1.200 pages of briefs and supporting appendices and all other relevant documents in the record_, there is convincing, perhaps compelling support for the findings set forth by the bankruptcy court. (Emphasis added.)

Judge Bryant went on to say:

In accordance with the principles set out in Anderson v Bessimer City, 470 U.S. 564, 571-75 (1985), the court has examined the bankruptcy judge's findings of fact in the light of the entire record, and finds that his account of the evidence is eminently plausible; and _this court is not left with any notion that a "mistake has been committed_." Id. at 574. This conclusion is reached without regard to the deference to be accorded the judge's opportunity to assess credibility. _The cold record adequately supports his findings under any standard of review_. Accordingly the findings will not be disturbed. (Emphasis added.) (D. Ct. Mem. Op., p. 37) 2 Notwithstanding, Brewer conceded on November 24, 1982, that there was no factual support for any allegation that INSLAW did not perform its best efforts on the BJS contract. (PX 45) 3 Brewer misconstrued the BJS contract as a commitment to produce specified enhancements at a fixed price instead of a "best efforts" commitment for development of an unspecified number of enhancements within a cost-plus contract. (Hamilton, 257-258; Deroy, T. 2460-2462) 4 Moreover, the suggestion of the authors of the Bua Report that "we have not found that INSLAW has demonstrated any proprietary rights in the software" is outrageous given the extensive record that obviously was ignored totally by them. It is noteworthy that Judge Bason devoted over 31 pages and 74 separate findings of fact establishing the unquestionable conclusion that INSLAW created an enhanced version of PROMIS, that was proprietary to it, using private funds. To suggest otherwise in light of this record, and especially given the obvious fact that the authors of the Bua Report did absolutely nothing to review the findings of the bankruptcy court, as fully adopted by the federal district court, is unconscionable. 5 According to the Bua Report, Videnieks asserted at trial that he was told by INSLAW's comptroller that INSLAW had missed at least one payroll. This was not true. Had the authors of the Bua Report inquired of INSLAW, they would have found that INSLAW never missed a payroll during the three years of the contract, notwithstanding the fact that DOJ held back almost $2 million in payments under the contract. Not surprisingly, as in virtually every other instance in which DOJ's testimony supported the conclusions that the authors of the Bua Report intended to reach, they made no effort to verify the accuracy of that information with INSLAW. 6 These words, that served as the theme for INSLAW's prosecution of its civil claims, are taken from the contemporaneous handwritten notes of DOJ Contracting Officer Peter Videnieks for March 28, 1983:

Letter was Brick's idea - and I thought/think its the best way -- Why do you need signature _if you got the goods?_" (Emphasis added.) 7 At trial, Brewer denied this fact three times. (Brewer, T. 1692, 1694, 1702) This was the only circumstance in which Videnieks could recall not following a Brwer guidance which would have resulted in a destriment to INSLAW. (Videnieks, T. 1859- 1860, 1861) Even with this single exception, Videnieks acknowledged that the only reason he ignored Brewer's guidance is that DOJ's Administrative Counsel Snider applied pressure on Videnieks to proceed on the basis of a bilateral contract modification. (Videnieks, T. 1861-1862) 8 "Our computer" refers to a PRIME mid-range computer belonging to DOJ's Executive Office for U.S. Attorneys that was housed temporarily in INSLAW's Computer Center in Lanham, Maryland. INSLAW used that computer temporarily to support the PROMIS operation in the U.S. Attorney's Office for the District of Maryland via telecommunications, while a computer center was being built in the Baltimore U.S. Attorney's Office. This activity is separate from INSLAW's use of its own VAX mid-range computer at the same Lanham, Maryland computer center for temporary computer time sharing of PROMIS in the 10 largest U.S. Attorneys' Offices. It is the latter time-sharing that DOJ refused to compensate INSLAW for in accordance with a Negotiated Agreement. The wrongful withholding of payments for the later PROMIS computer time sharing service is the principal sham contract dispute described in Section C.6 of this document. 9 In late 1990 and early 1991, the Government of Canada contacted INSLAW by telephone and by letter seeking information about the availability of a French-language version of PROMIS and disclosing that the English language version of PROMIS was then operating in several departments and agencies of Canada's federal government. The Canadian officials also told INSLAW that one of these agencies, the Royal Canadian Mounted Police (RCMP), was using PROMIS to support 900 office locations throughout Canada. After the U.S. and Canadian media began reporting on this disclosure and on INSLAW's claim that it had neither sold PROMIS to the Government of Canada nor authorized others to do so on its behalf, the Government of Canada retracted its prior oral and written disclosures to INSLAW, attributing them to an unfortunate mistake by the Canadian officials involved. Eventually, Canada settled on the explanation that its Department of Public Works had purchased six copies of the PROMIS software product manufactured by Strategic Software Planning Corporation of Cambridge, Massachusetts. According to that company, its PROMIS software product is for project management in the construction industry. Canada has never disclosed whether its Department of Public Works also uses the Intelligence Report System that the CIA claims to have acquired with its copy of PROMIS from the same vendor. 10 INSLAW President, William Hamilton, recited in a sworn affidavit filed in camera in U.S. District Court for the District of Columbia on October 17, 1990 in support of INSLAW's request to re-open discovery against DOJ, the statements that Carl Jackson made to Mr. and Mrs. Hamilton and Jackson's claim to have confirmed those facts in 1990 with Phillip Cammera. 11 This account by Bua cannot possibly do justice to the PBI's probable reaction to the appointment of Denning as the independent expert. Denning is the leading proponent within U.S. academia for a controversial joint initiative of the FBI and the NSA called the Clipper Chip. According to press accounts, Denning is one of the few people outside of the U.S. Government who has received a security briefing on the Clipper Chip. The Clipper Chip was developed by NSA and proposed by the NSA and the FBI for incorporation into computer hardware manufactured in the United States. It is designed to preserve the technical capability of the FBI and the NSA to eavesdrop on the computer-to-computer communications of U.S. businesses. 12 Denning states that a new version of FOIMS created in 1983 was written in the NATURAL programming language and used the ADABAS database management system (DBMS). A DBMS can be analogized to an engine in a car, and the case tracking application code can be analogized to the car itself. FBI information system officials directly informed INSLAW in 1983, however, that the new 1983 version of FOIMS would use ADABAS as the DBMS, but would have newly-written COBOL-language application code. Because of these representations to INSLAW in 1983, INSLAW provided oral and written briefings to the FBI that year on how it could avoid the delay and costs associated with writing a new COBOL-language application system by, alternatively, inserting the ADABAS "engine" into the tried and proven and thoroughly debugged PROMIS COBOL code. Prior to providing these briefings to the FBI, INSLAW consulted with technical representatives of Software A.G. of North America, the vendor of both ADABAS and the NATURAL programming language. 13 The ratio of numbers of line of code between COBOL and NATURAL is 10 to 20 times as many COBOL lines of code as NATURAL lines of code for the same application, according to Maguire. If, therefore, FOIMS contained 570,000 lines of code written in the NATURAL programming language, a corresponding case tracking system written in COBOL would consist of 5.5 to 11 million lines of COBOL code. INSLAW's PROMIS software is widely regarded as extremely rich in case tracking functionality and yet it has only about 500,000 to 600,000 lines of COBOL, code, with the exact number dependent upon each customer's application of the on-line DESIGN subsystem and its automated COBOL code generator. An application software system such as a case tracking system that contains the equivalent of millions of lines of COBOL is extremely unlikely. If the PROMIS software were translated into the NATURAL programming language, for example, it would have about 30-60,000 lines of NATURAL code instead of 500-600,000 lines of COBOL code. 14 In these 1991 affidavits, Ben Menashe distinguishes between the copy of PROMIS that Rafi Eitan allegedly obtained during the early 1980's on a visit to the United States, and the copy of PROMIS that Brian was marketing in Tel Aviv in 1987. According to Ben Menashe, Israel was authorized by the United States to use the initial Rafi Eitan copy of PROMIS solely for the signal intelligence penetration of other governments, whereas the copy of PROMIS that Israel allegedly purchased from Earl Brian in 1987 was for the internal database management of Israeli intelligence files. 15 Burns had succeeded Jensen as Meese's Deputy Attorney General in July 1986, when Jensen became a U.S. District Judge in San Francisco. 16 Deputy Attorney General Bums had himself written to Ratiner in late August 1986, signaling DOJ's readiness to settle rapidly the disputes underlying the $'~,000,000 in payments withheld by DOJ for INSLAW's implementation services, provided that INSLAW would agree to recognize the U.S. Government's right to use PROMIS wherever it wished, without paying license fees to INSLAW. 17 In the same December 1989 affidavit cited by Bua, Hamilton stated that Jensen's private secretary at DOJ, Marilyn Jacobs, had made a similar disclosure to a DOJ informant who does not wish to be identified until assured of protection against reprisal. Bua took no initiative to provide such assurances against reprisal. 18 Sensitive Compartmented Information is defined as follows in Bob Woodward's book, VEIL:

"the process of further restricting access to the most sensitive information by imposing special controls and handling. Compartments of such information for a particular operation or sensitive source or method of collecting intelligence are generally given code words. Individuals in the government from the President on down must be granted specific code-word access to each compartment. Code words are selected at random. Some employed by the NSA for signals intelligence include RUFF, ZARF, SPOKE, MORAY and two of the most restrictive involving decoded messages, UMBRA and GAMMA. VEIL was the code word for the covert action compartment during the last several years of the Reagan Administration." 19 See, for example, an article about the Wackenhut Corporation in the September 1992 issue of SPY Magazine by John Connolly entitled "Inside the Shadow CIA." 20 DOJ's Land and Natural Resources Division has the version of INSLAW's proprietary PROMIS software that operates on IBM and IBM-clone mainframe computers under the MVS operating system. In contrast, the version of PROMIS stolen by DOJ in April 1983 contained the proprietary enhancements that are prepared for operation on Digital Equipment Corporation VAX mid-range computers under the VMS operating system. 21 Upon information and belief, DOJ stole both the proprietary version of PROMIS for IBM mainframe computers, which DOJ has had in its possession since 1982, and the version for VAX mid-range computers, which DOJ misappropriated from INSLAW in April 1983. The timing of the April 1983 theft of the VAX version of proprietary PROMIS was, based on information and belief, dictated by unmet, urgent customer needs in the intelligence/national security arena. 22 Bua states that the evidence "suggests" "that there were absolutely no activities...." The juxtaposition of "suggests" and "absolutely" is, of course, inconsistent.

23 See The United States of America vs. Charles S. Christopher, a/k/a Chris Christopher, and George Wayne Reeder, a/k/a Wayne Reeder, filed in the District Court of the United States for the District of Rhode Island concerning the violation of Title 18, U.S.C., Sections 371, 1343, 2314, and 2.

24 As INSLAW informed Bua in its January 1992 written submission, the Washington Business Journal confirmed the accuracy of Hamilton's account in an interview with Ben Cnaan in January 1990. 25 DOJ officials have consistently been less than candid about the relationship between Project EAGLE and case management software in general and the PROMIS case management software in particular. For example, Stephen Colgate, currently the Assistant Attorney General for Administration, during Congressional testimony on March 2, 1989, deflected an inquiry from Congressman Early about the connection between Project EAGLE and DOJ's case management system by insisting that Project EAGLE "is a uniform office automation system." One of Colgate's subordinates, however, was more candid in a private August 25, 1989 letter to the General Services Administration (GSA). Frank A. Guglielmo, Director of DOJ's Computer Technology and Telecommunications Staff, informed GSA that DOJ plans to develop a case management software system for implementation on every Project EAGLE computer: " ... it will take approximately three years to develop and install the caseload management system for the EAGLE project." Moreover, Guglielmo blamed the U.S. Bankruptcy Court's permanent injunction against further unauthorized use of INSLAW's PROMIS software as preventing DOJ from porting PROMIS to the Project EAGLE computers. Guglielmo further informed GSA in the letter that DOJ would have to purchase $4 million worth of new computers from PRIME to continue operating the PROMIS software that U.S. Attorneys' Offices had been operating on older model PRIME computers during the three-year period required for the development of the new Project EAGLE case management software system.

Another example is the contradiction between DOJ's published answers to the questions from Project EAGLE bidders, on the one hand, and DOJ's statements in federal court in the INSLAW litigation against DOJ, on the other hand. On September 26, 1986, DOJ published to the bidders an unequivocal denial that certain technical requirements mandated in the August 1986 Amendment to the EAGLE Request for Proposals implied an undisclosed DOJ plan to implement the PROMIS software on the EAGLE computers: "The equipment acquired from this solicitation will not be required to run either PROMIS ... " On April 15, 1988, however, DOJ told Senior U.S. District Judge William B. Bryant, Jr. that it had mandated the very same August 1986 technical requirements "so that the EOUSA [Executive Office for U.S. Attorneys] can make PROMIS, which is written in the COBOL language, run on the new [EAGLE] hardware, if it decides to do so."

26 In an investigative report dated November 26, 1991 and entitled Deficiencies in the Department of Justice Award and Management of Its Project Eagle ADP Procurement, the House Judiciary Committee noted the following anomalies:

o DOJ was negligent in keeping vendors other than Tisoft

fully informed of material facts;

o DOJ allowed Tisoft to substitute its maintenance

subcontractor after the award even though that

subcontractor had been a major factor in DOJ's

justification for making the award to Tisoft;

o Each vendor, except Tisoft, was challenged on

statistics regarding its system's performance;

o DOJ contributed $200,000 to Tisoft to help finance the

settlement of bid protests by other vendors with the

provision that the settlement documents be sealed from

public view;

o Tisoft agreed to pay up the $6.1 million to the

protesting vendors, depending upon Tisoft's gross

revenues during the life cycle of the contract, to help

induce those vendors to drop their protests, indicating

that Tisoft envisioned earning very substantial profits

under the EAGLE contract;

o Tisoft paid for at least one golfing outing for a

member of DOJ's technical evaluation team during the

pendency of the EAGLE procurement;

o One of Tisoft's proposed computer systems failed to

support user demand when installed; and

o DOJ officials misused the technology upgrade clause in

Tisoft's contract in order to correct weaknesses in

Tisoft's bid.

27 Anson Ng, described as a stringer for the Financial Times of London, was found dead in Guatemala in July 1991, the month before Casolaro died.

28 Increases in the number of devices such as computer terminals and printers that the U. S . Attorneys' Offices elected to use in accessing the PROMIS time-sharing service were assumed by DOJ and INSLAW to be a proxy for satisfaction with the quality, reliability and usefulness of the time-sharing service.

29 DOJ had inexplicably overlooked this entire category of costs, i.e., the costs of highly paid operating system software specialists and statistical analysts who adjust the time-sharing system daily in reaction to fluctuations in demand among the 10 major city U.S. Attorneys' Offices. Because these employees worked on the computer time-sharing system remotely from INSLAW's headquarters, rather than locally from the Lanham, Maryland, physical computer center, DOJ simply disregarded the obvious need for such technical support personnel in deciding that INSLAW's time-sharing costs were too high.

30 In an affidavit filed in U.S. District Court on behalf of INSLAW in 1991, Ari Ben Menashe claims that Kenneth Rosen, like Earl Brian, had a close working relationship with Rafi Eitan, a legendary Israeli intelligence official whose apparent involvement with DOJ in the theft of PROMIS is summarized in C3, Bua's Investigation of Leads Relating to the Role of DOJ Officials in Either Facilitating or Covering Up the Use of INSLAW's PROMIS in Intelligence/National Security Programs.

31 Sidley and Austin replaced Roger Whelan as co-counsel of record in the INSLAW bankruptcy in February 1988. 32 See, for example, GSBCA No. 9252-P, a Protest by AT&T Communications, Inc. regarding Solicitation No. ETN-87-0001, where Thomas C. Papson and two other attorneys from McKenna, Conner and Cuneo made appearances on November 9, 1987 on behalf of AT&T Communications, Inc. _________________________________________________________________

Exhibit A MEMORANDUM



10 June 1993 To: William A. Hamilton Subject: The Relevance of My Records and Investigative

Files in Earl Brian and Hadron to Any

Investigation of the INSLAW Affair in the

United States and the Failure of Judge

Nichols Bua or His Staff to Seek Information

from me From: Jon A. Belton FOR THE RECORD At your request, I am addressing in this memorandum three points: A. The Potential Significance to the INSLAW Affair in

the United States of My Contemporaneous Records

and Investigative Files Regarding an Alleged Major

Securities Fraud in Canada in the Early 1980's

Involving Earl W. Brian, a United States Citizen,

and several U.S. Corporations Then Controlled by

Brian, Including Hadron, Inc.;

B. Whether U.S. Justice Department Special Counsel

Nichols J. Bua or His Staff Sought to Interview Me

or Obtain Copies of my Records and Files; and

C. Highlights of my Investigative Leads Regarding the

Role of Earl W. Brian and Hadron, Inc., in the

Alleged Unauthorized Distribution of INSLAW's

PROMIS Software Product to Canada in 1983. A. The Potential Significance to the INSLAW Affair in the United States of My Contemporaneous Records and Investigative Files Regarding an Alleged Major Securities Fraud in Canada in the Early 1980's Involving Earl W. Brian, a United States citizen, and Several U.S. Corporations Then Controlled by Brian, Including Hadron, Inc. I became acquainted with Earl W. Brian and various U.S. Corporations controlled by Brian during the 1980-1982 time period. As a Canadian stockbroker during that period, I had clients investing money in the publicly-traded securities of such Brian-controlled corporations as Hadron, Inc. of Fairfax, Virginia. Over time, I became concerned that Brian and his associates had engineered and executed a massive securities fraud in Canada, and I have been attempting ever since the 1980-1982 time period to get the Government of Canada to conduct a credible investigation, and, failing that, I have been conducting my own investigation. In the normal course of business, I make detailed contemporaneous notes of meetings and telephone conversations. These notes have been invaluable in my investigative work. For example, notes that I took at a dinner meeting with Earl Brian in Montreal on 23 February 1981 reveal that Brian expected Hadron, Inc., to acquire an unnamed company that marketed a computer software product for the administration of justice. Brian said the software product had "great PROMIS[E]." Brian linked Hadron's future revenue stream to its planned acquisition of this software product. I believe now that Brian was already foretelling his planned acquisition of INSLAW, Inc., and the use of its PROMIS case management software product to obtain sweetheart contracts from the United States government through his friendship with Edwin Meese. During this same Brian visit to Montreal, I also became aware of plans for a follow-up meeting between Edwin Meese and one of the Canadian financiers with whom Brian was dealing. It is also my belief that Earl Brian's connections with U.S. intelligence agencies have accounted for the failure of the Government of Canada and its Royal Canadian Mounted Police (RCMP) to conduct any credible criminal investigation of the alleged Brian securities fraud in Canada. According to my contemporaneous written notes for 25 November 1985, for example, RCMP officer Wayne Dunn, who was then directing an investigation of Brian, said as follows to me: "Re: Earl Brian - Play low - We don't want the CIA taking shots at you." B. Whether U.S. Justice Department Special Counsel Nicholas J. Bua or His Staff Sought to Interview me or Obtain Copies of My Records and Files. You have advised me that INSLAW made a written submission to Justice Department Special Counsel Nicholas Bua in January 1992 on the crimes that were committed, the persons who appeared to have committed the crimes, and the state of the evidence uncovered as of that date, and that INSLAW identified me as a potential source of information on the subject. Free-lance journalist Richard Fricker, who himself had reviewed my files, also informed me that on a number of occasions he personally related to Judge Nicholas Bua the significance of certain data from my ongoing investigation that would be of material assistance to Bua's investigation of the INSLAW affair. Neither Judge Bua nor any of his staff has ever contacted me or sought copies of any of my records or files. C. Highlights of my Investigative Leads Regarding the Role of Earl W. Brian and Hadron in the Alleged Unauthorized Distribution of INSLAW's PROMIS Case Management Software Product to Canada in 1983 In early 1991 the Department of Communications of the Government of Canada notified INSLAW by letter that its PROMIS computer software product was being used in several departments and agencies of the federal government of Canada and asked INSLAW to complete a questionnaire about the availability of French- language versions of its software and documentation. Subsequently, Department of Communications officials told INSLAW representatives that the Royal Canadian Mounted Police (RCMP) was using PROMIS in approximately 900 offices. After the U.S. press began reporting on this disclosure and on INSLAW's revelations that it had neither licensed the PROMIS software to the Canadian Government nor authorized others to do so on its behalf, the Government of Canada retracted its earlier statements and attributed those statements to a mistake on the part of the Department of Communications officials. Several Canadian journalists, including Eric Reguly of the Financial Post in Toronto, Zuhair Kashmeri, then of the Globe and Mail in Toronto, and Charles Greenwell of CJOH-TV in Ottawa, have, however, told me that current and/or former officials of the RCMP have privately confirmed to each of them that the RCMP is, in fact, using the PROMIS software. PROMIS is apparently known within the RCMP by the name of P.I.R.S. (Police Information Records System). The RCMP publicly insists that it developed P.I.R.S. internally. Reporter Greenwell told me that one of his trusted sources claimed that the RCMP does not have the internal technical software resources to have developed a complex investigative tracking software system such as P.I.R.S. and that the RCMP claims to have developed P.I.R.S. internally are an important clue that the RCMP is not telling the truth about P.I.R.S. Documents released under the Access to Information Act, moreover, reveal the participation of at least one Canadian contractor in P.I.R.S software development work at the RCMP: I.P. Sharp Company in Toronto, and also that 1983 was the year for nationwide implementation of P.I.R.S. within the RCMP. My investigation has developed leads linking Earl Brian's Hadron, Inc. of Fairfax, Virginia, and two Canadian computer services companies in the unauthorized distribution of INSLAW's PROMIS software into Canada in approximately 1983. The two Canadian companies are I.P. Sharp of Toronto and SystemHouse of Ottawa. Ironically, I.P. Sharp brought its first application software product to market in approximately 1983, a tracking system for factory floor automation, and called the product PROMIS. Eventually, I.P. Sharp created the PROMIS Systems Corporation as a wholly-owned subsidiary. I.P. Sharp is no longer in business but the PROMIS Systems Corporation is still in operation. On 1 April 1992, for example, Mr. William Stamey, a computer services executive in Virginia, told me, in the course of a telephone interview, about a conversation he had had in approximately 1984 with a former colleague of his by the name of Mr. D. George Davis. Davis had been marketing or sales vice president of Hadron in 1983, and left Hadron, according to his statements to Stamey, after he had been deprived by Hadron's Chairman, Dominick Laiti, of a very substantial commission on the sale of a computer software product to the Government of Canada. The following are excerpts from Stamey's comments to me:

"SystemHouse and Hadron had a bunch of source codes..."

"SystemHouse Canadian operation ...had a member of ... the Privy Council in pocket."

" ... I.P. Sharp , SystemHouse, I.P. Sharp and Hadron were all linked together in someway."

" ... Hadron had done some software modifications for SystemHouse and I.P. Sharp." On 6 April 1992, I had a telephone interview with Mr. Paul Wormeli, who was an officer of Hadron's law enforcement software subsidiary in 1982 and 1983. Wormeli told me that he "vividly" recalled the fact that Davis had been deprived of the software sales commission and that "his commission beef" related to a transaction in Canada involving both I.P. Sharp and SystemHouse. On 18 May 1993, Wormeli said as follows to me in a telephone interview: "Well I know for a fact that Hadron was messing around with I.P. Sharp, because I was asked to evaluate putting together a joint marketing deal with them at one point. So that the connection was there..." When I interviewed D. George Davis by telephone on 2 April 1992, he denied the loss of software sales commission, but acknowledged knowing about both SystemHouse and I.P. Sharp. Although he denied any personal involvement with these two companies, in 1983, he carefully refrained from exculpating Hadron itself: "I know who they are." "The had no contracts with me." "I don't know about Hadron." Davis also appeared to be suggesting that the matter I was questioning him about also involved Earl Brian and Edwin Meese: "Though Brian and Meese, who I don't think much of, were involved, I was not party to that unfortunately." On 16 December 1992, Canadian reporter Charles Greenwell was interviewing Mr. Roderick M. Bryden, the founder and former Chairman of SystemHouse, on a different subject when he suddenly turned the questions to INSLAW and PROMIS. Mr. Greenwell subsequently informed me that Mr. Bryden responded as follows: "Oh yeah, we got INSLAW from I.P. Sharp. Clark handled that whole matter." On 23 March 1993, one of my associates asked a current employee of SystemHouse about INSLAW's PROMIS software and received the following reply: "Oh yeah, we have it." "But we bought it legally." As noted earlier, William Stamey had recalled that the unauthorized introduction of the PROMIS software into Canada had come about in part as the result of a relationship between SystemHouse and a member of the Privy Council. Reporter Charles Greenwell independently told me that a trusted source informed him that INSLAW's PROMIS software was introduced into Canada through the Privy Council Office and that a Mr. LeCours of the Privy Council staff has knowledge of the facts but is fearful of the reprisal. There is a J.A. LeCours of the Privy Council staff who is a senior specialist on intelligence and security issues. /s John A. Belton _________________________________________________________________

Exhibit B







A Synopsis of Specific Claims About U.S. Department of Justice



(DOJ) Malfeasance Against INSLAW Made by Credible Individuals Who Are Fearful of



Reprisal

The characterization of each witness is intended to be sufficient to enable the reader to assess the witness's credibility but not detailed enough to permit actual identification of the witness.

WITNESS #1. This individual is a computer systems specialist who worked at the World Bank Headquarters in Washington, DC for a number of years in the 1980's and who has been reluctant to come forward publicly because of fear of reprisal.



This individual claims to have first hand technical knowledge, supplemented by contemporaneous, handwritten notes, of the implementation at the World Bank Headquarters in 1983 of INSLAW's PROMIS computer software product, on a VAX mid-range computer from Digital Equipment Corporation. According to this individual, the World Bank acquired a VAX mid-range computer in its computer data processing center in 1983 and, thereafter, in June 1983, acquired from a source unknown to this individual, INSLAW's PROMIS software for implementation on the VAX computer. According to this individual, the World Bank's implementation of PROMIS was not in support of the traditional PROMIS application domain of legal office case management. Instead, the World Bank implemented PROMIS to track its own "international message flow," as well as the international message flow of its sister institution, the International Monetary Fund (IMF).

WITNESS #2. This individual is a current mid-level U.S. Government employee with extensive experience in intelligence/national security activities, who is fearful of reprisal.



This individual claims to have knowledge, obtained contemporaneously with the actual event in June 1983, of a meeting at the World Bank Headquarters in June 1983 concerning DOJ's conveyance to the World Bank of the "proprietary VAX" version of INSLAW's PROMIS software. According to this individual (who also claims to have contemporaneous handwritten notes), the DOJ was represented at the meeting by D. Lowell Jensen, then Assistant Attorney General for the Criminal Division. Among others who this individual claims attended the meeting was Stanley Sporkin, then General Counsel of the Central Intelligence Agency (CIA). According to this individual, the initiative to implement PROMIS at the World Bank came from the Bank Operations Division of the CIA.1

Upon information and belief, the objective of the PROMIS implementation at the World Bank was to provide an early warning system to the U.S. intelligence community of signs of planned defaults on international loans. During the first few years of the Reagan Administration, a number of the so-called less developed countries actively considered defaulting on their international debts.

WITNESS #3. This individual is a current mid-level DOJ career employee who has been in a position to know a good deal about the INSLAW Affair for the relevant period of the 1980's, and who, INSLAW has been told by others, has first- hand knowledge of DOJ's dissemination to the World Bank in 1983 of the PROMIS software, and of the concealment or destruction by DOJ of contemporaneous, written documentation of the conveyance.



This individual, during the course of a recent meeting with attorneys for INSLAW, emphasized repeatedly that anyone who provides information to INSLAW will get into significant trouble, and that there would be swift retribution against anyone in DOJ who even talks about the INSLAW matter. This individual claims that all of the people at DOJ who are responsible for "getting" INSLAW have been promoted and awarded bonuses. This individual expresses sorrow and perhaps even shame for what DOJ has done to INSLAW, but declines to acknowledge the validity of any particular claim except through sworn testimony before an independent counsel. This individual states that no one would cooperate with any investigation unless it is truly independent of DOJ, and unless assured of no retaliation. Finally, this individual says that the exodus from DOJ of the Republican Party political appointees will be of some help on the INSLAW matter but that it will not of itself be enough because "too many career people have either been part of destroying INSLAW or have 'winked' at it."

WITNESS #4. This individual is a former very high ranking DOJ official who told an intermediary in May 1993 that his disclosure of information about DOJ's misconduct against INSLAW would lead to economic reprisals against him by the Republican Party.



According to the intermediary, this individual claims to have the following specific knowledge regarding DOJ's malfeasance against INSLAW:

o It was orchestrated by Lowell Jensen who, in turn,

relied principally on the Criminal Division's

Executive Officer Miles Matthews;

o The Justice Command Center is linked to the INSLAW

scandal;

o DOJ procurement executive Elizabeth "Pat" Rudd

played a very important role in the INSLAW

scandal; and

o Other current or former DOJ officials who were

personally involved in the misconduct against

INSLAW are as follows:



o Harry Flickinger

o Anthony Moscotto

o Anthony Liotta

o Carol Dinkens

o Thomas Stanton

o Charles Neal

WITNESS #5. This individual is a senior DOJ career official with extensive knowledge of DOJ information systems.



This individual claims that John Otto, while serving as one of the highest ranking FBI officials in the late 1980's, disclosed directly to this individual in a private meeting at the FBI that the FBI was about to implement the PROMIS software under the FOIMS (Field Office Information Management System) name, and that the adoption of the tried and proven PROMIS software was expected to cure the poor reputation of FOIMS among FBI employees.

WITNESS #6. This individual is a mid-level DOJ career employee who fears retaliation unless there is an independent counsel.



This individual claims to have witnessed an admission, contemporaneously with the referenced activity, by Marilyn Jacobs, then DOJ secretary to D. Lowell Jensen, to the effect that Jensen, Jacobs' immediate supervisor, was the person behind all of INSLAW's problems at DOJ.

WITNESS #7. This individual is a high level career official of the U.S. Government, who currently holds a position of considerable responsibility and who was unwilling to be identified by INSLAW to Special Counsel Nicholas J. Bua.



This individual claims to have witnessed admissions by former DOJ Security Officer Garnett Taylor concerning the deliberate destruction of documentary evidence in the INSLAW case by DOJ security officials, and concerning the alleged role of Anthony Moscotto, currently Director of DOJ's Executive Office for U.S. Attorneys (EOUSA), in an "affirmative decision" by DOJ to remove Judge George F. Bason, Jr. as sole federal bankruptcy judge for the District of Columbia.

WITNESS #8. This individual is currently a relatively senior career employee of the United States Government who had been employed during relevant years of the 1980's in DOJ's Justice Management Division, and who is prepared to answer questions truthfully if compelled to do so by subpoena from a duly constituted government inquiry into the INSLAW Affair.



This individual claims, based on a conversation with an intermediary, that everyone from "the director level on up" within DOJ's Justice Management Division knew that the INSLAW case was caught up in a covert U.S. Government intelligence operation and that this is why there were classified intelligence/national security documents on INSLAW and the PROMIS software stored in the security vault of DOJ's Office of Security and Emergency Planning. This individual also claims to know about a connection between the Justice Command Center and the malfeasance against INSLAW, and about the award of promotions and bonuses to certain DOJ career officials for their participation in the wrongdoing against INSLAW.



WITNESS #9. This individual is a trusted friend of Mr. and Ms. Hamilton who, in turn, has a close relationship with one or more persons currently holding senior level positions in the Central Intelligence Agency. This individual has been unwilling to submit to interviews by anyone officially associated with the U.S. Government, whether in Congress or in the DOJ. This individual has served as a conduit of information that certain senior level CIA officials wish to have conveyed to Mr. and Ms. Hamilton.



This individual has conveyed the following information to Mr. and Ms. Hamilton:

o The CIA secretly obtained a copy of the

proprietary version of PROMIS from DOJ in order to

determine whether PROMIS could be used to solve a

longstanding, unmet need in the U.S. intelligence

community for compatible data base management

software.

o The initial unauthorized use of PROMIS in the U.S.

intelligence community was for an intelligence

application aboard nuclear submarines. PROMIS is

currently installed on every nuclear submarine of

the United States and Great Britain, and the

application domain for this use of PROMIS is

extremely sensitive.2

o The CIA implemented PROMIS internally after

integrating PROMIS with another piece of computer

software. The CIA uses its version of PROMIS to

keep track of the covert intelligence operations

of U.S. and foreign governments.

o PROMIS is being used as an inventory tracking

system for long range missiles and nuclear

warheads, in the United States as well as in

several other nations that possess nuclear

weapons.

o The U.S. Government appointed someone by the name

of Lindsey to package a reduced-functionality

derivative of the CIA's version of PROMIS for Earl

W. Brian to sell to the intelligence agencies of

foreign governments.

o One of Earl Brian's sales of PROMIS was to the

military intelligence agency of the Government of

Egypt, through "what appears to be a CIA holding

company."

o There is one use of PROMIS by the United States

Government that is considerably more sensitive

than any that have been identified to the

Hamiltons by this individual, and so sensitive

that decisions on disclosure are restricted to the

four statutory members of the National Security

Council, i.e., the President, the Vice President,

the Secretary of State and the Secretary of

Defense.

o One of the places where the proprietary version of

PROMIS is being used without license from INSLAW

is the Office of the Attorney General of the

United States.

o As a condition of his nomination as Attorney

General, William Barr was required to give

assurances to President Bush that he would be able

to maintain the coverup in the INSLAW case.

o In early 1993, elements of the CIA intercepted a

person or persons in the vicinity of the

Hamilton's family residence who were apparently

planning to carry out some act of physical

violence. On at least one other occasion, elements

within the CIA have intercepted or nullified plans

by others to kill Mr. and Ms. Hamilton.

WITNESS #10. This individual is a computer programmer aboard a U.S. nuclear submarine. The individual would evidently face the loss of his security clearance and possibly criminal prosecution by DOJ if he were to provide testimony in the INSLAW case.



Through an intermediary, a member of the Hamilton family was told that this individual has first hand knowledge about the fact that INSLAW's PROMIS software has been implemented aboard the U.S. nuclear submarine on which he serves, and that this individual is deeply sorry for what the U.S. Government has done to INSLAW and to the Hamilton family.

WITNESS #11. This individual is a current career employee of DOJ who lacks confidence in the ability of DOJ to fairly and thoroughly investigate the misconduct against INSLAW.



This individual claims to have witnessed DOJ officials, Garnett Taylor and James Walker, remove classified intelligence/national security documents from DOJ's Civil Division for relocation or destruction.

_______________________________ 1 This kind of high technology penetration of the international banking system by U.S. intelligence is cited as one of the important accomplishments claimed by William Casey for his tenure as Director of Central Intelligence, in Bob Woodward's book, VEIL: The Secret Wars of the CIA 1981-1987, page 386, "There was penetration of the international banking system, allowing a steady flow of data from the real, secret sets of books kept by many foreign banks that showed some hidden investing by the Soviet Union." 2 In his book, VEIL: The Secret Wars of the CIA 1981-1987, Bob Woodward attributes to William Casey the claim that one of Casey's principal achievements as Director of Central Intelligence was in devising "better techniques to monitor its [i.e., the Soviet Union's] ballistic-missile submarines." (p. 386) [Electronic Edition of 29July93 from pinknoiz@well.sf.ca.us] Based on the committee's investigation and two separate court rulings, it is clear that high level Department of Justice officials deliberately ignored INSLAW's proprietary rights in the enhanced version of PROMIS and misappropriated this software for use at locations not covered under contract with the company. Justice then proceeded to challenge INSLAW's claims in court even though it knew that these claims were valid and that the Department would most likely lose in court on this issue. After almost 7 years of litigation and $1 million in cost, the Department is still denying its culpability in this matter. Instead of conducting an investigation into INSLAW's claims that criminal wrongdoing by high level Government officials had occurred, Attorney Generals Meese and Thornburgh blocked or restricted congressional inquiries into the matter, ignored the findings of two courts and refused to ask for the appointment of an independent counsel. These actions were taken in the face of a growing body of evidence that serious wrongdoing had occurred which reached to the highest levels of the Department. The evidence received by the committee during its investigation clearly raises serious concerns about the possibility that a high level conspiracy against INSLAW did exist and that great efforts have been expended by the Department to block any outside investigation into the matter. Based on the evidence presented in this report, the committee believes that extraordinary steps are required to resolve the INSLAW issue. The Attorney General should take immediate steps to remunerate INSLAW for the harm the Department has egregiously caused the company. The amount determined should include all reasonable legal expenses and other costs to the Hamiltons not directly related to the contract but caused by the actions taken by the Department to harm the company or its employees. To avoid further retaliation against the company, the Attorney General should prohibit Department personnel who participated in any way in the litigation of the INSLAW matter from further involvement in this case. In the event that the Attorney General does not move expeditiously to remunerate INSLAW, then Congress should move quickly under the congressional reference provisions of the Court of Claims Act to initiate a review of this matter by that court. Finally, the committee believes that the only way the INSLAW allegations can be adequately and fully investigated is by the appointment of an independent counsel. The committee is aware that on November 13, 1991, newly confirmed Attorney General Barr finally appointed Nicholas Bua, a retired Federal judge from Chicago, as his special counsel to investigate and advise him on the INSLAW controversy. However, at that time the Attorney General had not empowered Judge Bua to subpoena witnesses, convene a grand jury or compel the Department to produce key documents. INSLAW officials have voiced concerns that Judge Bua, lacking independent counsel status, would not be able to entice Department employees who were knowledgeable of the INSLAW matter to come forward and assist Judge Bua in bringing this matter to closure. Consequently, they are concerned that Judge Bua will not be able to get to the bottom of the matter, and they believe his investigation will end up being subverted by the Department. The inability to subpoena and/or to convene a grand jury was apparently of concern to Judge Bua and, after a meeting on January 28, 1992, the Attorney General granted Judge Bua broad investigative authority which included the power to subpoena witnesses and to convene special grand juries. However because of the actions by the Department regarding potential whistleblowers such as Anthony Pasciuto, it is very likely witnesses will still feel intimidated by the Department. This problem was present throughout the committee's investigation and remains a potential problem today. Without independent counsel status, Judge Bua remains an employee of the Department of Justice. The image problem is illustrated in a recent interview with Roger M. Cooper, Deputy Assistant Attorney General for Administration. In an interview with the Government Computer News, Mr. Cooper stated that: The judge (Bua) will do as the attorney general wants him to do, and that's fine. I think all of us in the department would like to get it [the INSLAW matter] behind us. It's sort of an albatross. Mr. Cooper may have meant that Attorney General Barr wants Judge Bua to conduct a thorough investigation. The committee has no reason to doubt the commitment of Judge Bua or Attorney General Barr to do a thorough investigation of this matter-the problem rests with the fact that, as long as the investigation of wrongdoing by former and current high level Justice officials remains under the control of the Department, there will always be serious doubt about the objectivity and thoroughness of the work. This matter has caused great harm to several individuals involved and has severely undermined the Department's credibility and reputation. Congress and the executive branch must take immediate and forceful steps to restore the public confidence and faith in our system of justice which has been severely eroded by this painful and unfortunate affair. As such, the independent counsel should be appointed with full and broad powers to investigate all matters related to the allegations of wrongdoing in the INSLAW matter, including Mr. Casolaro's death and its possible link to individuals associated with organized crime.



X. FINDINGS 1. The Department, in an attempt to implement a standardized case management system, ignored advice from vendors-including INSLAW-that PROMIS should not be adapted to word processing equipment. As predicted, problems arose with adapting PROMIS to word processing equipment. The Department immediately set out to terminate that portion of the contract and blamed INSLAW for its failure. 2. The Department exhibited extremely poor judgment by assigning C. Madison Brewer to manage the PROMIS implementation contract. Mr. Brewer had been asked to leave his position as general counsel of INSLAW under strained relations with INSLAW's owner, Mr. William Hamilton. INSLAW's problems with the Department, which started almost immediately after the award of the contract in March 1982, were generated in large part by Mr. Brewer, with the support and direction of high level Department officials. The potential conflict of interest in the hiring of Mr. Brewer was not considered by Department officials. However, Mr. Brewer's past strained relationship with Mr. Hamilton, and the fact that he lacked experience in ADP management and understanding of Federal procurement laws, raises serious questions about why he was selected as the PROMIS project manager. 3. Mr. Brewer's attitude toward INSLAW, combined with Mr. Videnieks' harsh contract philosophy, led to the rapid deterioration of relations between the Department and INSLAW. Any semblance of fairness by key Department officials toward INSLAW quickly evaporated when Mr. Hamilton attempted to protect his companies' proprietary rights to a privately funded enhanced version of the PROMIS software. In a highly unusual move, Mr. Brewer recommended just 1 month after the contract was signed that INSLAW be terminated for convenience of the Government even though INSLAW was performing under the contract. From that point forward there is no indication that Mr. Brewer or Mr. Videnieks ever deviated from their plan to harm INSLAW. The actions taken by Messrs. Brewer and Videnieks were done with the full knowledge and support of high level Department officials. 4. Peter Videnieks, the Department's contracting officer, negotiated Modification 12 of the contract which resulted in INSLAW agreeing to provide its proprietary Enhanced PROMIS software for the Department's use. This negotiation was conducted in bad faith because Justice later refused to recognize INSLAW's rights to privately financed PROMIS enhancements. Mr. Videnieks and Mr. Brewer, supported by Deputy Attorney General Jensen and other high level officials, unilaterally concluded that the Department was not bound by the property laws that applied to privately developed and financed software. 6. Thereafter, the Department ignored INSLAW's data rights to its enhanced version of its PROMIS software and misused its prosecutorial and litigative resources to legitimize and coverup its misdeeds. This resulted in extremely protracted litigation and an immense waste of resources both for the Government and INSLAW. These actions were taken even though the Department had already determined that INSLAW's claim was probably justified and that the Department would lose in court. In fact, Deputy Attorney General Burns acknowledged this fact to OPR investigators. 6. Department of Justice documents show that a "public domain" version of the PROMIS software was sent to domestic and international entities including Israel. Given the Department's position regarding its ownership of all versions of PROMIS, questions remain whether INSLAW's Enhanced PROMIS was distributed by Department officials to numerous sources outside the Department, including foreign governments. 7. Several witnesses, including former Attorney General Elliot Richardson, have provided testimony, sworn statements or affidavits linking high level Department officials to a conspiracy to steal INSLAW's PROMIS software and secretly transfer PROMIS to Dr. Brian. According to these witnesses, the PROMIS software was subsequently converted for use by domestic and foreign intelligence services. This testimony was provided by individuals who knew that the Justice Department would be inclined to prosecute them for perjury if they lied under oath. No such prosecutions have occurred. 8. Justice had made little effort to resolve conflicting and possibly perjurious sworn statements by key departmental witnesses about the alleged attempt by high level Department officials to liquidate INSLAW and steal its software. It is very possible that Judge Blackshear may have perjured himself and even today his explanations for his recantation of his sworn statement provided to INSLAW are highly suspicious. The investigation of this matter by the Department's Office of Professional Responsibility was superficial. 9. The Department's response to INSLAW's requests for investigations by an independent counsel and the Public Integrity Section was cursory and incomplete 10. The reviews of the INSLAW matter by Congress were hampered by Department tactics designed to conceal many significant documents and otherwise interfere with an independent review. The Department actions appear to have been motivated more by an intense desire to defend itself from INSLAW's charges of misconduct rather than investigating possible violations of the law. 11. Justice officials have asserted that, as a result of the recent ruling by the Appeals Court and the refusal of the Supreme Court to hear INSLAW's appeal, the Findings and Conclusions of Bankruptcy Judge George Bason and senior Judge William Bryant of the District Court are no longer relevant. The Appeals Court decision, in fact, did not dispute the Bankruptcy Court's ruling that the Department "stole ... through trickery, fraud and deceit" INSLAW's PROMIS software. Its decision was based primarily on the narrow question of whether the Bankruptcy Court had jurisdiction; the Appeals Court ruled that it did not. This decision in no way vindicates the Department nor should it be used to insulate Justice from the criticism it deserves over the mishandling of the INSLAW contract. 12. The Justice Department continues to improperly use INSLAW's proprietary software in blatant disregard of the findings of two courts and well established property law. This fact coupled with the general lack of fairness exhibited by Justice officials throughout this affair is unbefitting of the agency entrusted with enforcing our Nation's laws. 13. Further investigation into the circumstances surrounding Daniel Casolaro's death is needed. 14. The following criminal statutes may have been violated by certain high level Justice officials and private individuals: 18 U.S.C. 371-Conspiracy to commit an offense. 18 U.S.C. s 654-Officer or employee of the United States converting the property of another. 18 U.S.C. s 1341-Fraud. 18 U.S.C. s 1343-Wire fraud. 18 U.S.C. s1505-Obstruction of proceedings before departments, agencies and committees. 18 U.S.C. s 1512-Tampering with a witness. 18 U.S.C. s 1513-Retaliation against a witness. 18 U.S.C. s 1621-Perjury. 18 U.S.C. s 1951-Interference with commerce by threats or violence (RICO). 18 U.S.C. s 1961 et seq.-Racketeer Influenced and Corrupt Organizations. 18 U.S.C. s 2314- Transportation of stolen goods, securities, moneys. 18 U..S.C. s 2315-Receiving stolen goods. 15. Several key documents subpoenaed by the committee on July 26, 1991, were reported missing or lost by the Department. While Justice officials have indicated that this involves only a limited number of documents, it was impossible to ascertain how many documents or files were missing because the Department did not have a complete index of the INSLAW materials. The Department failed to conduct a formal investigation to determine whether the subpoenaed documents were stolen or illegally destroyed.



XI. RECOMMENDATIONS 1. The committee recommends that Attorney General Barr immediately settle INSLAW's claims in a fair and equitable manner. These payments should account for the Department's continued unauthorized use of INSLAW's Enhanced PROMIS and other costs attributed to INSLAW's ongoing attempt to obtain a just settlement for its struggle with the Department, including all reasonable attorneys' fees. If there continue to be efforts to delay a fair and equitable result, the committee should determine whether legislation is required to authorize a claim by INSLAW against the United States, pursuant to 28 U.S.C. s 1492. 2. The Attorney General should require that any person in the Department that participated in any way in the litigation of the INSLAW matter be excluded from further involvement in this case, with the exception of supplying information, as needed, to support future investigations by a independent counsel or litigation, as appropriate. 3. The committee strongly recommends that the Department appoint an independent counsel to conduct a full, open investigation of the INSLAW allegations of a high level conspiracy within the Department to steal Enhanced PROMIS software to benefit friends and associates of former Attorney General Meese, including Dr. Earl Brian, as discussed in this report. Among other matters, the investigation should also:

Ascertain whether there was a strategy by former Attorneys General and other Department officials to obstruct this and other investigations through employee harassment and denial of access to Department records. Investigate Mr. Casolaro's death. Determine whether current and former Justice Department officials and others involved in the INSLAW affair resorted to perjury and obstruction in order to coverup their misdeeds. Determine whether the documents subpoenaed by the Committee and reported missing by the Department were stolen or illegally destroyed. Determine if private sector individuals participated in (1) the alleged conspiracy to steal INSLAW's PROMIS software and distribute it to various locations domestically and overseas, and (2) the alleged coverup of this conspiracy through perjury and obstruction. Determine if other criminal violations occurred involving: 18 U.S.C. s 371-Conspiracy to commit an offense. 18 U.S.C. s 654-0fficer or employee of the United States converting the property of another. 18 U.S.C. s 1341-Fraud. 18 U.S.C. s 1343-Wire fraud. 18 U.S.C. s 1505-Obstruction of proceedings before departments, agencies and committees. 18 U.S.C. s 1512-Tampering with a witness. 18 U.S.C. s 1513-Retaliation against a witness. 18 U.S.C. s 1621-Perjury. 18 U.S.C. s1951-Interference with commerce by threats or violence (RICO). 18 U.S.C. s 1951 et seq.-Racketeer Influenced and Corrupt Organizations. 18 U.S.C. s 2314-Transportation of stolen goods, securities, moneys. 18 U.S.C. s 2315-Receiving stolen goods.







PROFITS OF DEATH -- INSIDER TRADING AND 9-11







by Tom Flocco - Edited by Michael C. Ruppert [© Copyright 2001. From The Wilderness Publications, www.copvcia.com. All Rights Reserved. May be recopied, distributed or posted on the worldwide web for non-profit purposes only.] FTW, December 6, 2001 -- On October 9th, FTW broke a story on insider trading connected to the 9-11 attacks on the World Trade Center that sparked worldwide controversy. In that story we reported how the Israeli Herzliyya Institute for Counterterrorism had documented that unknown individuals -- with accurate foreknowledge of the attacks -- had purchased an obvious and unusually large number of "put" options on United and American Airlines shortly before the attacks. Additional companies hit hard by the insider trading included Axa Re(insurance) and Munich Re as well as American investment giants Merrill Lynch and Morgan Stanley. Put options are essentially a bet that a stock's price will fall abruptly. The seller, having entered into a time-specific contract with a buyer, does not need to own the actual shares at the time the contract is purchased. Therefore, if a holder of the put option has a contract to sell a stock such as American Airlines for (e.g.) $100 a share on a Friday and the stock falls to $50 on Wednesday, they can purchase the stock, sell it on Friday and double their money. The person on the other end of the contract (the call) has an obligation to buy the shares at the agreed upon price. The bank handling the transaction as a broker is the only entity knowing the identities of both parties. FTW also revealed that the A.B. Brown (Alex Brown) investment arm of the banking giant Deutschebank/A.B. Brown had been headed until 1998 by the man who is now the Executive Director of the Central Intelligence Agency - A.B. "Buzzy" Krongard. In fact, Krongard is but one name in a long history of CIA interconnections to stock trading and the world's financial markets. We also discussed, in detail, the evidence indicating that the CIA and other intelligence agencies monitor stock trading in real time for the purpose of identifying potential attacks of any nature that might damage the U.S. economy. The original FTW story is located at: http://www.fromthewilderness.com/free/ww3/10_09_01_krongard.html. Critics of FTW's initial story - not having read any of five related stories dating back to an October 2000 piece on PROMIS software - claimed that we had not made the links to establish culpability. But we knew that the links were there, that our case was solid, and that new evidence would not go undiscovered for long. Now, investigative reporter Tom Flocco digs deep and strikes pay dirt in a three-part series that reveals not only deeper links between the CIA, Wall Street and the insider trades of 9-11, but also discloses that a key executive at Deutschebank - an American - became, just weeks before the attacks, a convicted felon. His crime: conspiracy to launder drug money to arrange the purchase of U.S. weapons - in association with two Pakistanis who also attempted to acquire nuclear bomb components - for use by Islamic fundamentalist terrorists. - MCR CIA Does Not Deny Stock Monitoring Outside U.S. (Part I in a series) In a returned phone call from the Central Intelligence Agency, press spokesman Tom Crispell denied that the CIA was monitoring "real-time," pre-September 11, stock option trading activity within United States borders using such software as the Prosecutor's Management Information System (PROMIS). "That would be illegal. We only operate outside the United States," the intelligence official said. However, when asked whether the CIA had been using PROMIS beyond American borders to scrutinize world financial markets for national security purposes, Crispell replied, "I have no way of knowing what operations are [being affected by our assets] outside the country." Extensive media reporting confirms that investors at Deutschebank-Alex Brown and other global financial entities may have profited from prior knowledge of the attacks while purchasing disproportionate pre-attack put option contracts on targeted U.S. airlines and related insurance or investment firms. All of these firms suffered serious losses resulting from the September 11th attacks and their stocks abruptly plummeted. Confirmation that the CIA or other U.S. intelligence agencies were monitoring financial markets and had seen these trades before the attacks would have staggering implications for thousands of victims' families. The CIA official also declined to comment on the actual capabilities of PROMIS. The highly technical software has been described as a system that "interfaces with any database...as police can input an alleged terrorist's name or credit card, and the software will provide details of the person's movements through purchases...," according to an 11-10-01 Toronto Sun report. The importance of PROMIS is that it is not only capable of interfacing with a wide variety of data bases in different computer languages and then integrating the data, but it has also been modified for intelligence purposes. It has then been sold throughout the world by spy agencies through third parties to clients such as banks and investment houses envious of its unique capabilities. One key modification by agencies such as the CIA and Mossad - not disclosed to most users -- is a secret "back door" that permits those with the right codes to enter databases undetected, retrieve and/or alter information, and leave without a trace. PROMIS has been extensively reported as being used throughout the world's financial markets because of its versatility in facilitating international transactions. Further clouding the issue of pre-attack stock screening by U.S. intelligence, the Canadian daily revealed that U.S. police said many of the suspected terrorists were apprehended (and detained) "through use of the state-of-the-art computer software program PROMIS." In March 2000, CIA director George J. Tenet told the Senate that Osama bin Laden's group (Al Q'aeda) was "embracing the opportunities offered by recent leaps in information technology." A FOX News story and stories in FTW disclosed in November that Osama bin Laden was believed to have the software. The issue of CIA monitoring of stock trades follows on the heels of wide reports indicating that investigators are carefully probing the insider trading with its resultant profits, reported to be in the 10's of millions of dollars -- some of which a Deutschebank investor has yet to claim. A promis is a promis Crispell also declined comment when asked whether the Treasury Department or FBI had questioned CIA Executive Director and former Deutschebank-Alex Brown CEO, A.B. "Buzzy" Krongard, about CIA monitoring of financial markets using PROMIS and his former position as overseer of Brown's "private client" relations. [Note: Krongard stayed with A.B. Brown to head "private client" operations after it was acquired by Banker's Trust in 1997. As Krongard was leaving in 1998 to join the CIA as counselor to Director George Tenet, Banker's Trust was acquired by Deutschebank. Banker's Trust had been previously criticized by the U.S. Senate and regulators for money laundering. Krongard was promoted to Executive Director at CIA in March 2001. - MCR] Wide reports -- including a 9/28/01 story in the Asian Wall Street Journal and a 10/1/01 story in The Guardian -- indicate that investigators are checking Deutschebank's alleged links to Saudi "private banking," terrorist bank accounts, and $2.5 million in unclaimed United Airlines (UAL) put options profits; however, no government acknowledgement had ever been given of CIA's alleged use of PROMIS software prior to the attacks. In a recent phone conversation, when asked about alleged terrorist ties to Deutschebank and potential pre-attack CIA trade monitoring via PROMIS, Treasury Department spokesman Rob Nichols remarked, "This is clearly an interesting line of questioning regarding conflicts of interest." However, news searches indicate that no member of Congress has publicly questioned whether wealthy terrorist-connected Saudi nationals participated in the private client operations of Deutschebank-Alex Brown. Osama bin Laden and almost all of the alleged 9-11 hijackers are of Saudi nationality. Also, no member of Congress expressed public interest in asking Krongard about whether or not the CIA affected "real-time" pre-attack trade monitoring using PROMIS software at any location. [Note: Under a program known as Echelon, the governments of the U.S., Britain, Canada, Australia and New Zealand routinely circumvent prohibitions on domestic electronic spying by having the agencies of the other governments do it for them. - MCR] Michael Ruppert, editor and publisher of From The Wilderness (FTW) newsletter (www.copvcia.com), has been interviewed by both the House and Senate for his expertise on illegal covert CIA operations. He said recently that, "It is well documented that the CIA has long monitored such (suspicious or unusual) trades -- in real time -- as potential warnings of terrorist attacks and other economic moves contrary to U.S. interests." Ruppert was the first to point out after 9-11 that CIA Executive Director Buzzy Krongard has extensive past ties to Deutschebank-Alex Brown. Ruppert added, "There is abundant and clear evidence that a number of transactions in financial markets indicated specific [criminal] foreknowledge of the September 11 attacks...and the firm which was used to place put options on UAL stock was, until 1998, managed by the man who is now in the number three position at the CIA." Ruppert also confirmed that two October 17 calls to the FBI resulted in spokespersons declining to give their names after revealing that "the FBI has discontinued use of the PROMIS software." Moreover, on October 24, Justice Department spokesperson Loren Pfeifle declined to answer any questions about where, when, or how PROMIS had been used and would only say, "I can confirm that the DOJ has discontinued use of the program." This followed almost 17 years of denials by the FBI and the Department of Justice -- in court and under oath -- that they used the software at all in a law enforcement or intelligence capacity. Krongard's current lofty intelligence community position, combined with his prior leadership of a financial institution allegedly connected to terrorist hijacker bank accounts [see Part II], suspicious UAL options contracts, and "private banking" is so controversial that it has not as yet sparked any official investigation. That said, the evidence is substantial enough to potentially expose the prior-knowledge issue -- if Congress chooses to act. And while Treasury Department official Rob Nichols agreed that unresolved conflict of interest questions remain, the CIA Executive Director is still currently charged with supervision of the U.S. intelligence investigation of his former firm and its "private banking" operations. Reuters has reported that Krongard "was [also] involved in setting up the CIA experiment into investing in high-tech companies with the goal of acquiring innovative technology for its own use." Commenting on the CIA's venture capital firm In-Q-Tel, started in 1999 to encourage development of private-sector technologies for use in the intelligence world, Krongard said on August 1, 2001 -- just 5 weeks before the Trade Center attacks -- "I think In-Q-Tel's a wonderful model...in accessing the capabilities of the private sector." On October 16, Fox News reported that, according to sources, accused Russian spy and FBI agent Robert Hanssen sold high-tech PROMIS software to Russia, and that Osama bin Laden allegedly purchased it from Russian organized crime sources. Fox reported that, "Government officials suspect bin Laden may have the highly sophisticated U.S. government software that has been used by several other governments, including the United States, for classified intelligence and law enforcement information." The admission by U.S. government officials that PROMIS was widely used by a number of governments further blurs the pre-attack stock monitoring issue since intelligence officials will likely continue to decline comment, save for closed-door congressional oversight hearings or challenges by those victims' families choosing to bypass settlements adjudicated by the Attorney General's office in favor of direct intervention by the courts. The buck stops where? Tom Crispell, the CIA official, was cooperative while attempting to maintain intelligence confidentiality in the face of what he termed as "ongoing investigations surrounding the Twin Towers tragedies by the CIA, FBI, Justice, and Treasury Departments." However, this was in great contrast to an FBI spokesperson who refused to offer either his first or last name, while declining comment on any matter related to events of September 11. During a series of calls, some spokespersons quickly attempted to defer and deflect questions to another government agency, i.e. "We don't deal with that issue. Call the other [entity]." However, many would agree, given the evidence, that the 9-11 terrorism is closely linked to economic issues. President Bush has stated that this is "economic warfare." Yet few appear to be questioning an apparent paucity of critical information sharing among key government agencies on the issue. As U.S. investigators retrace the financial trails connecting the Twin Towers, terrorist hijackers and their accomplices, many of whom may still be in the country, evidence is being turned up by FBI, CIA, Justice, Treasury and NSA that does involve global banking conglomerate Deutschebank-Alex Brown. $2.5 million unclaimed UAL investor profits For example, according to a 10-19-2001 Wall Street Journal report, an unnamed investor purchased 2,000 United Airlines (UAL) put option contracts through Deutsche Bank-Alex Brown on September 6 -- betting the stock would shortly plummet. And USA Today reported that an individual purchased 810 UAL puts on August 6. A Baron's source claimed on 10-8-2001 that the pre-attack UAL order placed through Deutsche Bank was for 2,500 contracts which were "split into 500 chunks each, directing each order to different U.S. exchanges around the country simultaneously." According to San Francisco Chronicle reporters Christian Berthelsen and Scott Winokur a source familiar with the UAL trades said investors have yet to claim $2.5 million in profits on contracts purchased before United airliners crashed into a New York Trade Tower and a deserted Pennsylvania field on September 11. The Chronicle source also identified Deutschebank-Alex Brown as the investment firm used to purchase some of the UAL options; and Rohini Pragasam, a bank spokeswoman, declined to comment on the transaction. The source (who requested anonymity) said, "Usually, if someone has a windfall like that, you take the money and run. Whoever did this thought the Exchange [NYSE] would not be closed for four days. This smells real bad." The German news weekly Der Spiegel revealed that Deutschebank also handled accounts worth about $100 million for Osama bin Laden's family. These were part of 10 accounts it suspected were linked to terrorists or terrorist activities and which it later handed over to German authorities after the attacks, according to a report in Britain's The Guardian. But no further comments have been forthcoming from the financial giant. German Central Bank President Ernst Welteke said a study -- concerning principal hijack subjects residing in Germany and unusual patterns in short-selling of insurance, airline and other financial company shares -- pointed to "terrorism insider trading" in those stocks. The SEC Is Investigating A phone interview with Securities and Exchange Commission (SEC) press spokesman John Nester, of the Washington, DC office, revealed that the Commission, "has already forwarded a general request to Deutschebank-Alex Brown and other investment firms for unspecified information related to the suspicious put option contracts placed prior to the attacks on the Trade Towers and the Pentagon." But the spokesman declined comment regarding the identities of complying banks or the contents of any information obtained. Nester augmented his response by adding that "according to SEC Associate Director of Enforcement Bill Baker -- who just spoke on a panel outside New York last week -- our SEC probe is much broader than investigations made by countries in Europe (who also lost citizens), many of whom have already closed their financial investigations of investment banks like Deutschebank." No results of those probes have been made public. While the SEC media director said "the investigation is still ongoing with no current conclusions," Nester (speaking for the SEC), had difficulty explaining the job description of current New York Stock Exchange (NYSE) Executive Vice President for Enforcement, David P. Doherty. He would only say that the NYSE "regulates itself as an SRO or self-regulating organization...." This vague answer is all the more provocative because Doherty is a retired General Counsel of the Central Intelligence Agency. Nester added, "The SEC has oversight responsibility regarding the NYSE, and we are also working with Justice, Treasury, and the FBI, having set up professional point men at each firm we are looking at -- so we don't have to reinvent the wheel every time we call a company [related to the attacks] to get an answer to a question." The "reinvent the wheel" statement raised an eyebrow regarding the level of corporate cooperation in the investigation, although Nester declined to add further comment. In Spite of CIA Ties the NYSE Is Little Help When asked about the status of the investigation into the disproportionate pre-attack stock option trades involving United and American Airlines, Merrill Lynch, Marsh and McLennan Insurance, Morgan Stanley, Citigroup, Bear Stearns, and American Express, etc. -- all icons of American capitalism -- NYSE Communications Director Ray Pellecchia said, "We don't even confirm that there is an ongoing investigation." "We report to the SEC as a matter of course," Pellecchia added. But after being referred to as a "persistent piece of work," this writer asked Pellecchia to discuss Doherty's role in the investigations. He said, "We stand by this statement." And after pressing for information about what the NYSE is actually doing to investigate the suspicious trades on behalf of thousands of victims' families who may be concerned about the "prior-knowledge" issue, Pellecchia still declined to confirm that Doherty's enforcement office had even sent a report to the SEC. When asked why so many former key CIA executives currently hold, or have held in the past, top level executive management positions connected in some way to the stock market via either the SEC, NYSE, or other investment banking entities, Pellecchia replied tersely, "I am quite aware of Mr. Doherty's background and experience." Pellecchia also declined to discuss anything related to current CIA Executive Director A.B. "Buzzy" Krongard and his past relationship with Alex Brown. Expecting Miracles? Questions remain as to who will ultimately take center stage in investigating conflicts of interest or the real-time monitoring of world financial markets by U.S. intelligence entities to protect national security; let alone terrorist ties to wealthy Saudi private clients at global financial institutions having direct access (via correspondent banking relationships) to U.S. banks. For while thousands of American families, victimized by terrorism, still remain numb with grief, information is being advanced daily regarding what could be described by some as casual, if not negligent, long-term, slipshod governmental responsiveness to fundamental internal national security and safety questions -- or worse. A Career In Microbiology Can Be Harmful To





Your Health





(Revised - updated) DEATH TOLL MOUNTING AS CONNECTIONS TO DYNCORP, HADRON,

PROMIS SOFTWARE AND DISEASE RESEARCH EMERGE







by



Michael Davidson, FTW staff writer





and Michael C. Ruppert







[Copyright 2002, From The Wilderness Publications, www.copvcia.com, All Rights Reserved. May Be







Recopied, Distributed For Non-profit Purposes Only; May Not Be Posted On An Internet Web Site Without







Express Written Authorization. Contact service@copvcia.com For Permission.]







[ED. NOTE: As FTW has begun to investigate serious discussions by legitimate







scientists and academics on the possible necessity of reducing the world's







population by more than four billion people, no stranger set of circumstances since







Sept. 11 adds credibility to this possibility than the suspicious deaths of what may







be as many as 14 world-class microbiologists. Following on the heels of our







two-part series on the coming world oil crisis, this story by Michael Davidson, a







graduate of the Syracuse University School of Journalism, is one which takes on a







unique significance. In our original story we incorrectly reported the original date







of disappearance of Don Wiley and two other microbiologists. These errors have







been corrected and we have updated the story to include new deaths that have







occurred since we published an earlier version on Feb. 14. The newest connections







to DynCorp, Hadron and PROMIS software are leads an amateur would not miss.







How else would any microbiologists threatening an ultra secret government







biological weapons program be identified than by secretly scanning their databases







to see what they were working on? -- MCR]







----------------------







FTW -- Feb. 28, 2002 -- In the four-month period from Nov. 12 through Feb. 11,







seven world-class microbiologists in different parts of the world were reported







dead. Six died of "unnatural" causes, while the cause of the seventh's death is







questionable. Also on Nov. 12, DynCorp, a major government contractor for data







processing, military operations and intelligence work, was awarded a $322 million







contract to develop, produce and store vaccines for the Department of Defense.







DynCorp and Hadron, both defense contractors connected to classified research







programs on communicable diseases, have also been linked to a software program







known as PROMIS, which may have helped identify and target the victims.







In the six weeks prior to Nov. 12, two additional foreign microbiologists were







reported dead. Some believe there were as many as five more microbiologists killed







during the period, bringing the total as high as 14. These two to seven additional







deaths, however, are not the focus of this story. This same period also saw the







deaths of three persons involved in medical research or public health.







- On Nov. 12, Benito Que, 52, was found comatose in the street near the







laboratory where he worked at the University of Miami Medical School. He died on







Dec. 6.







- On Nov. 16, Don C. Wiley, 57, vanished, and his abandoned rental car was found







on the Hernando de Soto Bridge outside Memphis, Tenn. His body was found on







Dec. 20.







- On Nov. 23, Vladimir Pasechnik, 64, was found dead in Wiltshire, England, not far







from his home.







- On Dec. 10, Robert Schwartz, 57, was found murdered in his rural home in







Loudoun County, Va.







- On Dec, 11, Set Van Nguyen, 44, was found dead in the airlock entrance to a







walk-in refrigerator in the laboratory where he worked in Victoria State, Australia.







- On Feb. 8, Vladimir Korshunov, 56, was found dead on a Moscow street.







- And on Feb. 11, Ian Langford, 40, was found dead in his home in Norwich,







England.







OOPS!







Prior to these deaths, on Oct. 4, a commercial jetliner traveling from Israel to







Novosibirsk, Siberia was shot down over the Black Sea by an "errant" Ukrainian







surface-to-air missile, killing all on board. The missile was over 100 miles







off-course. Despite early news stories reporting it as a charter, the flight, Air Sibir







1812, was a regularly scheduled flight.







According to several press reports, including a Dec. 5 article by Barry Chamish and







one on Jan. 13 by Jim Rarey (both available at www.rense.com), the plane is







believed by many in Israel to have had as many as five passengers who were







microbiologists. Both Israel and Novosibirsk are homes for cutting-edge







microbiological research. Novosibirsk is known as the scientific capital of Siberia,







and home to over 50 research facilities and 13 full universities for a population of







only 2.5 million people.







At the time of the Black Sea crash, Israeli journalists had been sounding the alarm







that two Israeli microbiologists had been recently murdered, allegedly by terrorists.







On Nov. 24 a Crossair flight from Berlin to Zurich crashed on its landing approach.







Of the 33 persons on board, 24 were killed, including the head of the hematology







department at Israel's Ichilov Hospital, as well as directors of the Tel Aviv Public







Health Department and Hebrew University School of Medicine. They were the only







Israelis on the flight. The names of those killed, as reported in a subsequent Israeli







news story but not matched to their job titles, were Avishai Berkman, Amiramp







Eldor and Yaacov Matzner.







Besides all being microbiologists, six of the seven scientists who died within weeks







of each other died from "unnatural" causes. And four of the seven were doing







virtually identical research -- research that has global, political and financial







significance.







QUE PASA?







The public relations office at the University of Miami Medical School said only that







Benito Que was a cell biologist, involved in oncology research in the hematology







department. This research relies heavily on DNA sequencing studies. The







circumstances of his death raise more questions than they answer.







Que had left his job at a research laboratory at the University of Miami Medical







School, apparently heading for his Ford Explorer parked on NW 10th Avenue. The







Miami Herald, referring to the death as an "incident," reported he had no wallet on







him, and quoted Miami police as saying his death may have been the result of a







mugging. Police made this statement while at the same time saying there was a







lack of visible trauma to Que's body. There is firm belief among Que's friends and







family that the PhD was attacked by four men, at least one of whom had a baseball







bat. Que's death has now been officially ruled "natural," caused by cardiac arrest.







Both the Dade County medical examiner and the Miami Police would not comment







on the case, saying only that it is closed.







A MEMPHIS MYSTERY







Don C. Wiley of the Howard Hughes Medical Institute at Harvard University, was







one of the most prominent microbiologists in the world. He had won many of the







field's most prestigious awards, including the 1995 Albert Lasker Basic Medical







Research Award for work that could make anti-viral vaccines a reality. He was







heavily involved in research on DNA sequencing. Wiley was last seen around







midnight on Nov. 15, leaving the St. Jude's Children's Research Advisory dinner







held at the Peabody Hotel in Memphis, Tenn. Associates attending the dinner said







he showed no signs of intoxication, and no one has admitted to drinking with him.







His rented Mitsubishi Galant was found about four hours later, abandoned on a







bridge across the Mississippi River, headed towards Arkansas. Keys were in the







ignition, the gas tank full, and the hazard flashers had not been turned on. Wiley's







body was found on Dec. 20, snagged on a tree along the Mississippi River in







Vidalia, La., 300 miles south of Memphis. Until his body was found, Dr. Wiley's







death was handled as a missing person case, and police did no forensic







examinations.







Early reports about Wiley's disappearance made no mention of paint marks on his







car or a missing hubcap, which turned up in subsequent reports. The type of







accident needed to knock off the hubcaps (actually a complete wheel cover) used







on recent model Galants would have caused noticeable damage to the sheet metal







on either side of the wheel, and probably the wheel itself. No damage to the car s







body or wheel has been reported.







Wiley's car was found about a five-minute drive from the hotel where he was last







seen. There is a four-hour period in his evening that cannot be accounted for.







There is also no explanation as to why he would have been headed into Arkansas







late at night. Wiley was staying at his father's home in Memphis.







The Hernando de Soto Bridge carries Interstate 40 out of Memphis, across the







Mississippi River into Arkansas. The traffic on the bridge was reduced to a single







lane in each direction. This would have caused westbound traffic out of Memphis to







slow down and travel in one lane. Anything in the other two closed lanes would







have been plainly obvious to every passing person. There are no known witnesses







to Wiley stopping his car on the bridge.







On Jan. 14, almost two months after his disappearance, Shelby County Medical







Examiner O.C. Smith announced that his department had ruled Wiley s death to be







"accidental;" the result of massive injuries suffered in a fall from the Hernando de







Soto Bridge. Smith said there were paint marks on Wiley's rental car similar to the







paint used on construction signs on the bridge, and that the car's right front







hubcap was missing. There has been no report as to which construction signs







Wiley hit. There is also no explanation as to why this evidence did not move the







Memphis police to consider possibilities other than a "missing person."







Smith theorizes that Wiley pulled over to the outermost lane of the bridge (that







lane being closed at the time) to inspect the damage to his car. Smith's







subsequent explanation for the fall requires several other things to have occurred







simultaneously:







- Wiley had to have had one of the two or three seizures he has per year due to a







rare disorder known only to family and close friends, that seizure being brought on







by use of alcohol earlier that evening;







- A passing truck creating a huge blast of wind and/or roadway bounce due to







heavy traffic; and,







- Wiley had to be standing on the curb next to the guardrail which, because of







Wiley's 6-foot-3-inch height, would have come only to his mid-thigh.







These conditions would have put Wiley's center of gravity above the rail, and the







seizure would have caused him to lose his balance as the truck created the bounce







and blast of wind, thus causing him to fall off the bridge.







SCIENCE IS MIGHTIER THAN THE SWORD?







Robert M. Schwartz was a founding member of the Virginia Biotechnology







Association, and the Executive Director of Research and Development at Virginia's







Center for Innovative Technology. He was extremely well respected in biophysics,







and regarded as an authority on DNA sequencing.







Co-workers became concerned when he didn't show up at his office on Dec. 10. He







was later found dead at his home. Loudoun County Sheriff's officials said Schwartz







was stabbed on Dec. 8 with a sword, and had an "X" cut into the back of his neck.







Schwartz's daughter Clara, 19, and three others have been charged in the case.







The four are said to have a fascination with fantasy worlds, witchcraft, and the







occult. Kyle Hulbert, 18, who allegedly committed the murder, has a history of







mental illness, and is reported by the Washington Post to have killed Schwartz to







prevent the murder of Clara. At the request of Clara Schwartz's attorneys, on Feb.







13 Judge Pamela Grizzle ordered all new evidence introduced about her role in the







case to be sealed. She also issued a temporary gag order covering the entire case







on police, prosecutors and defense attorneys.







BREATHE DEEPLY, AND CARRY A BIG STICK







Set Van Nguyen was found dead on Dec. 11 at the Commonwealth Scientific and







Industrial Research Organization's animal diseases facility in Geelong, Australia. He







had worked there 15 years. According to an article on www.rense.com by Ian







Gurney, in Jan. 2001 the magazine Nature published information that two







scientists at this facility, using genetic manipulation and DNA sequencing, had







created an incredibly virulent form of mousepox, a cousin of smallpox. The







researchers were extremely concerned that if similar manipulation could be done to







smallpox, a terrifying weapon could be unleashed.







According to Victoria Police, Nguyen died after entering a refrigerated storage







facility. "He did not know the room was full of deadly gas which had leaked from a







liquid nitrogen cooling system. Unable to breathe, Mr. Nguyen collapsed and died,"







is the official report.







Nitrogen is not a "deadly" gas, and is a part of air. An extreme over-abundance of







nitrogen in one's immediate atmosphere would cause shortness of breath,







lightheadedness, and fatigue -- conditions a biologist would certainly recognize.







Additionally, a leak sufficient to fill the room with nitrogen would set off alerts, and







would be so massive as to cause a complete loss of cooling, causing the







temperature to rise, which would also set off alerts these systems are routinely







equipped with.







A RUSSIAN, BRITISH INTELLIGENCE AND OLD CORPSES







In 1989, Vladimir Pasechnik defected from the Former Soviet Union (FSU) to Great







Britain while on a trip to Paris. He had been the top scientist in the FSU's







bioweapons program, which is heavily dependent upon DNA sequencing.







Pasechnik's death was reported in the New York Times as having occurred on Nov.







23.







The Times obituary indicated that the announcement of Pasechnik's death was







made in the United States by Dr. Christopher Davis of Virginia, who stated that







the cause of death was a stroke. Davis was the member of British intelligence who







de-briefed Dr. Pasechnik at the time of his defection. Davis says he left the







intelligence service in 1996, but when asked why a former member of British







intelligence would be the person announcing the death of Pasechnik to the US







media, he replied that it had come about during a conversation with a reporter he







had had a long relationship with. The reporter Davis named is not the author of







the Times' obituary, and Davis declined to say which branch of British intelligence







he served in. No reports of Pasechnik's death appeared in Britain for more than a







month, until Dec. 29, when his obituary appeared in the London Telegraph, which







did not include a date of death.







Pasechnik spent the 10 years after his defection working at the Centre for Applied







Microbiology and Research at the UK Department of Health, Salisbury. On Feb. 20,







2000, it was announced that, along with partner Caisey Harlingten, Pasechnik had







formed a company called Regma Biotechnologies Ltd. Regma describes itself as "a







new drug company working to provide powerful alternatives to antibiotics." Like







three other microbiologists detailed in this article, Pasechnik was heavily involved in







DNA sequencing research. During the anthrax panic of this past fall, Pasechnik







offered his services to the British government to help in any way possible. Despite







Regma having a public relations department that has released many items to the







press over the past two years, the company has not announced the death of one







of its two founders.







FEBRUARY, BLOODY FEBRUARY







On Feb. 9 the news publication Pravda.ru reported that Victor Korshunov had been







killed. At the time, Korshunov was head of the microbiology sub-facility at the







Russian State Medical University. He was found dead in the entrance to his home







with a cranial injury. Pravda reports that Korshunov had probably invented either a







vaccine to protect against biological weapons, or a weapon itself.







On Feb. 12 a newspaper in Norwich, England reported the previous day's death of







Ian Langford, a senior researcher at the University of East Anglia. The story went







on to say that police "were not treating the death as suspicious." The next day,







Britain's The Times reported that Langford was found wedged under a chair "at his







blood-spattered and apparently ransacked home."







The February 12 story, from the Eastern Daily Press, reports that clerks at a store







near Langford's home claim he came in on a daily basis to buy "a big bottle of







vodka." Two of the store's staff also claim Langford had come into the store a few







days earlier wearing "just a jumper and a pair of shoes." None of the store's staff







would give their name.







It is hard to understand how a man can reach the highest levels of achievement in







a scientific field while drinking "a big bottle of vodka" on a daily basis, and strolling







around his hometown nearly nude. A Feb. 14 follow-up story from the Eastern







Daily Press says police believe Langford died after suffering "one or more falls."







They say this would account for his head injuries and large amount of blood found







at the death scene.







THE HOWARD HUGHES MEDICAL INSTITUTE -- ANOTHER LINK?







There is another intriguing connection between three of the five American







scientists that have died. Wiley, Schwartz, and Benito Que worked for medical







research facilities that received grants from Howard Hughes Medical Institute







(HHMI). HHMI funds a tremendous number of research programs at schools,







hospitals and research facilities, and has long been alleged to be conducting "black







ops" biomedical research for intelligence organizations, including the CIA.







Long-time biowarfare investigator Patricia Doyle, Ph.D. reports that there is a







history of people connected to HHMI being murdered. In 1994, Jose Trias met with







a friend in Houston, Texas and was planning to go public with his personal







knowledge of HHMI "front door" grants being diverted to "back door" black ops







bioresearch. The next day, Trias and his wife were found dead in their Chevy







Chase, Md. home. Chevy Chase is where HHMI is headquartered. Police described







the killings as a professional hit. Tsunao Saitoh, who formerly worked at an







HHMI-funded lab at Columbia University, was shot to death on May 7, 1996 while







sitting in his car outside his home in La Jolla, Calif. Police also described this as a







professional hit.







BEYOND THE BIZARRE







Early-October saw reports that British scientists were planning to exhume the







bodies of 10 London victims of the 1918 type-A flu epidemic known as the Spanish







Flu. An October 7 report In The Independent, UK said that victims of the Spanish







Flu had been victims of "the world's most deadly virus." British scientists,







according to the story, hope to uncover the genetic makeup of the virus, making it







easier to combat.







Professor John Oxford of London's Queen Mary's School of Medicine, the British







government's flu adviser, acknowledges that the exhumations and subsequent







studies will have to be done with extreme caution so the virus is not unleashed to







cause another epidemic. The uncovering of a pathogen's genetic structure is the







exact work Pasechnik was doing at Regma. Pasechnik died six weeks after the







planned exhumations were announced. The need to exhume the bodies assumes







no Type-A flu virus sample exists in any lab anywhere in the world. A piece on MSNBC that aired September 6 makes the British exhumation plans







seem odd. The story refers to an article that was to be published the following day







in the weekly magazine Science, reporting the 1918 flu virus had recently been RNA







sequenced. Researchers had traced down and obtained virus samples from







archived lung tissue of WWI soldiers, and from an Inuit woman who had been







buried in the Alaskan permafrost.







HELP WANTED, SPIES, AND A LINK TO PROMIS







Almost immediately at the outset of the anthrax scare, the Bush administration







contracted with Bayer Pharmaceuticals for millions of doses of Cipro, an antibiotic







to treat anthrax. This was done despite many in the medical community stating







that there were several cheaper, better alternatives to Cipro, which has never been







shown to be effective against inhaled anthrax. The Center for Disease Control's







(CDC) own website states a preference for the antibiotic doxycycline over Cipro for







inhalation anthrax. CDC expresses concerns that widespread Cipro use could







cause other bacteria to become immune to antibiotics.







It was announced Jan. 21 that the director of the CDC, Jeffrey Koplan, is resigning







effective March 31. Six days earlier it was announced that Surgeon General David







Satcher is also resigning. And there is currently no director for the National







Institutes of Health -- NIH is being run by an acting director. The recent







resignations leave the three most significant medical positions in the federal







government simultaneously vacant.







After three months of conflicting reports it is now official that the anthrax that has







killed several Americans since October 5 is from US military sources connected to







CIA research. The FBI has stated that only 10 people could have had access, yet at







the same time they are reporting astounding security breaches at the biowarfare







facility at Fort Detrick, Md. -- breaches such as unauthorized nighttime







experiments and lab specimens gone missing.







The militarized anthrax used by the US was developed by William C. Patrick III, who







holds five classified patents on the process. He has worked at both Fort Detrick,







and the Dugway Proving Grounds in Utah. Patrick is now a private biowarfare







consultant to the military and CIA. Patrick developed the process by which anthrax







spores could be concentrated at the level of one trillion spores per gram. No other







country has been able to get concentrations above 500 billion per gram. The







anthrax that was sent around the eastern US last fall was concentrated at one







trillion spores per gram, according to a Jan. 31 report by Barbara Hatch Rosenberg







of the Federation of American Scientists.







In recent years Patrick has worked with Kanatjan Alibekov. Now known by the







Americanized "Ken Alibek", he defected to the US in 1992. Before defecting, Alibek







was the no. 2 man in the FSU's biowarfare program. His boss was Vladimir







Pasechnik.







Currently, Ken Alibek is President of Hadron Advanced Biosystems, a subsidiary of







Alexandria, Va.-based Hadron, Inc. Hadron describes itself as a company







specializing in the development of technical solutions for the intelligence







community. As chief scientist at Hadron, Alibek gave extensive testimony to the







House Armed Services Committee about biological weapons on Oct. 20, 1999, and







again on May 23, 2000. Hadron announced on Dec. 20 that as of that date, the







company had received $12 million in funding for medical biodefense research from







the Defense Advanced Research Projects Agency, the US Army Medical Research







and Materiel Command, and the NIH. Hadron said it was working in the field of







non-specific immunity.







In the 1980s Hadron was founded and headed by Dr. Earl Brian, a medical doctor







and crony of Ronald Reagan and an associate of former Attorney General Edwin







Meese. Brian was convicted in the 1980s on fraud charges. Both Hadron and Brian







have been closely associated in court documents and numerous credible reports,







confirmed since Sept. 11, with the theft of enhanced PROMIS software from its







owner, the INSLAW Corporation. PROMIS is a highly sophisticated computer







program capable of integrating a wide variety of databases. The software has







reportedly been mated in recent years with artificial intelligence. PROMIS has long







been known to have been modified by intelligence agencies with a back door that







allows for surreptitious retrieval of stored data. [For more information on what







PROMIS can do and its history, please use the search engine at www.copvcia.com.]







Given this unique capability, and Hadron s prior connections to PROMIS, it is a







possibility that the software, by tapping into databases used by each of the







victims, could have identified any lines of research that threatened to compromise







a larger, and as yet unidentified, more sinister covert operation.







A PATTERN?







The DNA sequencing work by several of the microbiologists discussed earlier is







aimed at developing drugs that will fight pathogens based on the pathogen's







genetic profile. The work is also aimed at eventually developing drugs that will work







in cooperation with a person's genetic makeup. Theoretically, a drug could be







developed for one specific person. That being the case, it's obvious that one could







go down the ladder, and a drug could be developed to effectively treat a much







broader class of people sharing a genetic marker. The entire process can also be







turned around to develop a pathogen that will affect a broad class of people







sharing a genetic marker. A broad class of people sharing a genetic marker could







be a group such as a race, or people with brown eyes.







SMALLPOX







An Oct. 17 story in USA Today reported that the US government wanted to order







300 million doses of smallpox vaccine. Apparently, that wish has been granted. On







Nov. 28 a British vaccine maker, Acambis, announced that it had received a $428







million contract to provide 155 million doses of smallpox vaccine to the US







Department of Health and Human Services (HHS). This was Acambis' second







contract. The company is already in the process of producing 54 million doses. The







US government has 15.4 million doses stockpiled, and HHS plans to dilute them







five to one. The two contracts and the dilution program will bring the total HHS







stockpile to 286 million doses.







Smallpox was officially declared eradicated by the World Health Organization in







1977, after treating the last known case in Merca, Somalia.







MEHPA -- MEDICAL FASCISM







A meeting of the Center for Law and the Public Health (CLPH) was convened on







Oct. 5. This group is run jointly by Georgetown University Law School and Johns







Hopkins Medical School, and was founded under the auspices of the Center for







Disease Control (CDC). CLPH was formed one month prior to the 2000 Presidential







election. The purpose of the October meeting was to draft legislation to respond to







the then current bioterrorism threat.







After working only 18 days, on Nov. 23 CLPH released a 40-page document called







the Model Emergency Health Powers Act (MEHPA). This was a "model" law that HHS







is suggesting be enacted by the 50 states to handle future public health







emergencies such as bioterrorism. A revised version was released on Dec. 21







containing more specific definitions of "public health emergency" as it pertains to







bioterrorism and biologic agents, and includes language for those states that want







to use the act for chemical, nuclear or natural disasters.







According to the Association of American Physicians and Surgeons (AAPS), after







declaring a "public health emergency", and without consulting with public health







authorities, law enforcement, the legislature or courts, a state governor using







MEHPA, or anyone he/she decides to empower, can among many things:







- Require any individual to be vaccinated. Refusal constitutes a crime and will result







in quarantine.







- Require any individual to undergo specific medical treatment. Refusal constitutes







a crime and will result in quarantine.







- Seize any property, including real estate, food, medicine, fuel or clothing, an







official thinks necessary to handle the emergency.







- Seize and destroy any property alleged to be hazardous. There will be no







compensation or recourse.







- Draft you or your business into state service.







- Impose rationing, price controls, quotas and transportation controls.







- Suspend any state law, regulation or rule that is thought to interfere with







handling the declared emergency.







When the federal government wanted the states to enact the 55 mph speed limit,







they coerced the states using the threat of withholding federal monies. The same







tactic will likely be used with MEHPA. As of this writing the law has been passed in







Kentucky. According to AAPS, it has been introduced in the legislatures of Arizona,







California, Delaware, Illinois, Massachusetts, Minnesota, Mississippi, Michigan,







Nebraska, Nevada, New Jersey, New Mexico, New York, Pennsylvania and







Tennessee. It is expected to be introduced shortly in Colorado, Connecticut,







Hawaii, Maine, and Wisconsin. MEHPA is being evaluated by the executive branches







in North Carolina, Ohio, Oklahoma, South Carolina, Texas, Virginia and







Washington, DC.







The research the microbiologists were doing could have developed methods of







treating diseases like anthrax and smallpox without conventional antibiotics or







vaccines. Pharmaceutical contracts to deal with these diseases will total hundreds







of millions, if not billions, of dollars. If epidemics could be treated in non-traditional







ways, MEHPA might not be necessary. Considering the government's actions







nullifying many civil liberties since last September, MEHPA seems to be a law looking







for an excuse to be enacted. Maybe the microbiologists were in the way of some







peoples' or business' agendas.







We also know that DNA sequencing research can be used to develop pathogens







that target specific genetically related groups. One company, DynCorp, handles







data processing for many federal agencies, including the CDC, the Department of







Agriculture, several branches of the Department of Justice, the Food and Drug







Administration (FDA) and the NIH. On Nov. 12 DynCorp announced that its







subsidiary, DynPort Vaccine, had been awarded a $322 million contract to develop,







produce, test, and store FDA licensed vaccines for use by the Defense







Department. It would be incredibly easy for DynCorp to hide information pertaining







to the exact make-up, safety, efficacy and purpose of the drugs and vaccines the







US government has contracted for.







Reasons to suspect DynCorp of criminal behavior are not hard to find.







Investigative reporter Kelly O Meara of Insight Magazine, in a story dated February







4, disclosed a massive US military investigation of how DynCorp employees in







Bosnia had engaged in a widespread sex slave ring, trading children as young as







eight and videotaping forced sexual encounters. She reviewed government







documents and interviewed Army investigators looking into the activities which had







spread throughout DynCorp s contract operations to service helicopters and







warehouse supplies for the US military. Videos and other evidence of the crimes







are in the Army s possession. And in a February 23rd story, veteran journalist Al







Giordano of www.narconews.com reported that a class action suit had been filed in







Washington, D.C. by more than 10,000 Ecuadorian farmers and a labor union







against DynCorp for its rampant spraying of herbicides which have destroyed food







crops, weakened the ecosystem and caused more than 1,100 documented cases







of illness.







DynCorp s current Chairman, Paul Lombardi responded to the suit by sending







intimidating letters in an unsuccessful attempt to force the plaintiffs to withdraw.







DynCorp has also been directly linked to the development and use of PROMIS







software by its founder Bill Hamilton of Inslaw. DynCorp s former Chairman,







current board member and the lead investor in Capricorn Holdings, is Herbert Pug







Winokur. Winokur was, until recently, Chairman of the Enron Finance Committee.







He claimed ignorance as to the fraudulent financial activities of Enron s board even







though he was charged with their oversight. INTRODUCTION RE: "The Last Circle" The following condensed version of The Last Circle was provided in October 1996 to a secret Investigative Committee comprised of Congress people, lawyers and former POW's at their request. I originally contacted Congresswoman Maxine Waters in Washington D.C. and offered information relative to CIA drug trafficking, but was told the information was too complex and would I mind putting the information into a newspaper story, get it published and send it to her office? I agreed and contacted a local newspaper reporter who, after reading portions of the material, decided it needed to be reviewed by individuals who had special knowledge of CIA drug trafficking, arms shipments, and biological warfare weapons. After a brief meeting with these individuals, former Special Forces soldiers from the Vietnam era, they asked for copies of the manuscript, guaranteed an immediate congressional inquiry, and advised me NOT to place the information on the Internet as they feared the information could be, in their words, "taken as just another anti-government conspiracy." I condensed the manuscript into the attached treatise, covering information relative to THEIR focus, and sent it to them along with key documents. Shortly afterward, they re-contacted me and set up elaborate security measures to insure my safety. As of this writing, I've had no need to institute those measures. I have in my possession five boxes of documents, obtained from a convicted methamphetamine chemist whose closest friends were a 20-year CIAoperative and a former FBI Senior-Agent-in-Charge of the Los Angeles and Washington D.C. bureaus. The labyrinthine involvements of these people and their corporate partners is revealed in this manuscript, along with information obtained by Washington D.C. journalist Danny Casolaro prior to his death in 1991. A great deal of investigation still needs to be accomplished. I have neither the financial means nor the ability to obtain "evidence" for "prosecution." I am simply an investigative writer, placing this information into the public forum in hopes that someone, somewhere, will grasp the significance of the data and initiate a full-scale investigation with subsequent subpoena power. With subpoena power, government agents can testify (some kept anonymous in this manuscript) who would otherwise lose their jobs and retirement if they came forward. Witnesses can be protected and/or provided immunity, and financial transactions of government and underworld figures can be scrutinized. To date, I have not had more than one hour conversation with anyone associated with any Congressional investigation, and therefore am extremely limited in my ability to present the information I have. Much of what I learned during my five-year investigation cannot at this point be inserted into a manuscript. I must be assured the information and witnesses will be handled appropriately. I personally do not believe the Department of Justice will ultimately "prosecute" this or any other drug trafficking case if it involves government officials. But I have made the effort to put forth enough information to generate interest and show good faith. I hope it will be of some value to the American public. Please keep in mind as you read the attached pages that the complex corporate structures and technological projects described herein "may" have been nothing more than an elaborate smoke and mirrors cover for narcotics trafficking. This aspect of my investigation was corroborated by several government investigators, one of whom was a House Judiciary investigator, who spent three years investigating the Inslaw stolen software case and said in response to my findings: "There's some great information here. You did a very good investigative job, I have to commend you on that. I realize it's only a fraction of everything you have. What you have done, you have put the pieces of the whole thing together. Little bits and pieces of things that I have known about, that I had theorized about, you have found answers to those specific questions." (See Chapter 13 for entire conversation). That investigator is now in the White House Office of Drug Control Policy. To those interested, nearly everything noted in the attached manuscript is supported by documents or tape recorded interviews. Some are extremely bulky and not quoted extensively in the manuscript, such as lengthy FBI wire tap summaries. I wish to thank Garby Leon, formerly Director of Development at Joel Silver Productions, Warner Bros. in Burbank, California for tirelessly prompting me to get a first draft of The Last Circle written in 1994 and helping me with countless tasks during our joint investigation of the death of Danny Casolaro.

T H E L A S T C I R C L E



Copyright 1994 - All Rights Reserved



By Carol Marshall NOTE: This is a FIRST DRAFT, bare-bones, unpolished manuscript without prose, characterizations etc. CHAPTER 1 For the deputies of the Mariposa Sheriff's Department, the awakening occurred on June 24, 1980, when deputy Ron Van Meterdrowned in an alleged boating accident on Lake McClure. The search party consisted mainly of three divers, deputies Dave Beavers, Rod Cusic and Gary Estep. Although adjacent counties offered additional divers, sheriff Paul Paige refused outside help, even a minisubmarine offered by Beavers' associate. In the shallow, placid waters of Lake McClure, Van Meter's body was not recovered that week, and indeed would not be found until ten years later, in September, 1990 when his torso, wrapped in a fish net and weighted down by various objects, including a fire extinguisher, washed ashore a few hundred yards from where Sergeant Roderick Sinclair's houseboat had once been moored. Van Meter's widow, Leslie, had been at home baking cookies when she was notified of her husband's disappearance. She was an Indian girl who had no affinity with sheriff Paul Paige. The horror began for her that day also. Her home was ransacked and her husband's briefcase and diary were seized by the Mariposa Sheriff's department. Only she and a few deputies knew what Van Meter's diary contained. He'd told his wife he'd taken out a special life insurance policy two weeks before, but after the search that was missing also. Leslie was taken to a psychiatric clinic for evaluation shortly after the incident.The story surfaced years later, one tiny bubble at a time. The selfinvolved little community of Mariposa did not cough up its secrets gladly. On March 23, 1984, Leslie Van Meter filed a Citizen's Complaint with the Mariposa County Sheriff's department alleging that the Sheriff's office had been negligent and unprofessional in their investigation of her husband's disappearance. His body had still not been found, despite private searches by Sergeant Beavers and other friends of the missing deputy. She wanted the case reopened. Paul Paige was no longer sheriff, but newly elected Sheriff Ken Mattheys responded by reopening the investigation. Investigator Raymond Jenkins, a Merced College Police Chief, and retired FBI agent Tom Walsh from Merced, were notified by Sheriff Mattheys in October, 1984 that the Van Meter case had been reopened and he wanted their help in cleaning up the Sheriff's Department. Their investigation led them straight to the doorstep of MCA Corporation (Music Corporation of America), parent company to Curry Company, the largest concessionaire in Yosemite National Park. A major drug network had surfaced in the park, compelling one park ranger, Paul Berkowitz, to go before the House Interior Subcommittee on National Parks and Recreation to testify about drug distribution by Curry Company officials. Ed Hardy, the president of Curry Company, was closely associated with MariposaCounty officials, in particular, Mariposa District Attorney Bruce Eckerson, County Assessor Steve Dunbar, and Congressman Tony Coelho, whose district encompassed Mariposa and the Park. The annual camping trips that the three men took together was encouraged by the local townsfolk because most of Mariposa's tax base emanated from Curry Company.Coelho and Hardy were regular fixtures around town, seen at most of the social events. Coelho even cooked and served spaghetti dinners for the whole town annually at the Mariposa Fair Grounds, and purchased property in partnership with one member of the Mariposa Board of Supervisors. In fact, Mariposa was one of the first places he bid farewell to after resigning from Congress to avoid an investigation of his finances. Meanwhile, investigator Raymond Jenkins had followed the drug trail from Yosemite back to the Mariposa airport, where sheriff's deputies were seen regularly loading and unloading packages from planes in the dead of night. One Indian girl complained bitterly about deputies using the Sara Priest land allottment (reservation) to grow marijuana and operate methamphetamine labs. Jenkins, by now retired from the position of Police Chief of Merced College, was called in to interview the Indian girl. That same day, as a favor, he provided me with copies of his notes. I followed up with a tape recorded interview at her home in Bear valley. Her father and uncle operated a small auto dismantling business on the reservation in Midpines, and after locating them and gaining their confidence, the uncle drove me out to Whiskey Flats, the site of the marijuana and methamphetamine lab operations. That week I rented a horse and rode down into the rocky, isolated valley of Whiskey Flats. Brush and shrubbery tore at the saddle on the horse and at the end of the dirt path I encountered three snarling Rottweiler dogs who put the horse into a frenzied lather. Nevertheless, I managed to photograph the irrigation system, artesian spring and pond from which the water was supplied as well as various points of identification for future reconnaisance. I later returned in a fourwheel drive pickup truck and managed to view the trailer and lab shack. The tape recorded interview with the Indian girl, the photos and notes from my discovery were provided to the Stanislaus County Drug Task Force, but jurisdictionally, they couldn't enter Mariposa County without authority of the Mariposa Sheriff's department. It was a catch 22 situation. Ultimately I provided the same information anonymously to several related agencies. It was not until 1993 that the fields were eradicated, and 1994, before the labs were raided. However, no arrests of any deputies were ever forthcoming. In fact, no arrests occurred at all, except for a few nonEnglish speaking Mexican nationals who had handled the "cooking." The head of the Los Angeles Drug Enforcement Agency noted to a local newspaper that the meth lab was part of a large California drug network, but they were unable to identify the kingpins. On July 6, 1985, Mrs. Van Meter filed a "Request for Official Inquiry" with the State of California Department of Boating and Waterways stating that no satisfactory investigation was ever conducted into the matter of her husband's disappearance. That same month, shortly after a meeting at Lake McClure with Mrs. Van Meter, Sheriff Mattheys mysteriously resigned from his position at the Mariposa Sheriff's Department. Mattheys revealed to reporter Anthony Pirushki that he had been ordered by two county supervisors and the county's attorney "to stay away from the Van Meter investigation." But that was not the reason he resigned. The whole story would not surface until seven years later when a reporter for the Mariposa Guide interviewed him. However, while still in office, Mattheys and his internal affairs investigators had learned the reason for Van Meter's disappearance. A few weeks prior to his death in 1980, Van Meter had driven to the Attorney General's office in Sacramento and reported drug dealing and other types of corruption within the Mariposa Sheriff's Department. This, according to his friends whom he had confided in, deputies Dave Beavers, a fifteen year veteran of the sheriff's department, and Rod Cusic, a seventeen year veteran. Both deputies were ultimately forced out of the department and retired on stress leave. On that same day, reserve deputy Lucky Jordan had driven to the Fresno office of the FBI to report similar information. According to Jordan, they had split up and reported to separate agencies in the event "something" happened to one of them.The crux of the story was State Attorney General Van De Kamp's response to the requested investigaion by Ron Van Meter. When Ron returned home from Sacramento, he was confronted by Sheriff Paige. Paige had received a call from the Attorney General informing him of the visit and its contents, and the sheriff was livid about Van Meter's betrayal.Van Meter had been photographing and journalizing drug activity by deputies at Lake McClure. He was part of a California State Abatement Program which involved harvesting and eradicating marijuana fields in Yosemite National Park and adjacent counties. Instead, the harvested marijuana was being stored in abandoned cars and towed out of town by a local wrecker under contract with the sheriff's department. It was also being distributed at a hidden cove at Lake McClure. On June 24, 1980, frustrated and angry at the Attorney General for betraying him, Van Meter had borrowed a boat and was on his way to arrest the deputies at Lake McClure himself. He never returned. The investigation of Van Meter's "accident" was initially handled by Sergeant Roderick Sinclair, who could not have known on that fateful day that in exactly three years, three months, and nineteen days, he would enter the Twilight Zone where his own private hell awaited him. ****** The first substantial hint that a tentacle of the Octopus had slithered into Mariposa County occurred on March 5, 1983 when a Mariposa County Sheriff's vehicle scouting Queen Elizabeth II's motorcade route rounded a curve in the Yosemite National Park foothills, crossed a highway and collided headon with a Secret Service car, killing three Secret Service agents. CHP (California Highway Patrol) Assistant Chief Richard Hanna reported that the collision occurred at 10:50 a.m. between Coulterville and La Grange on Highway 132 about 25 minutes ahead of Queen Elizabeth's motorcade.CHP Sergeant Bob Schilly reported that Mariposa County Sheriff's Sergeant Roderick Sinclair, 43, was driving with his partner, Deputy Rod McKean, 51, when "for some reason, [he didn't] know why," Sinclair crossed the center line and hit the second of the three Secret Service cars, which went tumbling down a 10foot embankment. The three Secret Service agents killed in the collision were identified as George P. LaBarge, 41, Donald Robinson, 38, and Donald A. Bejcek, 29. Sinclair, who had sustained broken ribs and a fractured knee, was first stabilized at Fremont Hospital in Mariposa, then transported several days later to Modesto Memorial Hospital. Years later, several nurses who had been present when Sinclair was brought into Fremont Hospital confided that Sinclair had been drugged on the day of "the Queen's accident" as it became known in Mariposa. For months Sinclair had been receiving huge daily shots of Demerol, "enough to kill most men," according to one billing clerk. Some former deputies who had feared punitive measures if they spoke up, later corroborated the story of the nurses. Meanwhile, Assistant U.S. Attorney James White in Fresno ordered Dr. Arthur Dahlem's files seized to prove Sinclair's drug addiction. Sinclair's Mariposadoctor and close friend had been prescribing heavy sedatives to him for years. When White attempted to prosecute Sinclair for criminal negligence, he was called into chambers during the federal probe and told by U.S. District Court Judge Robert E. Coyle to "drop the criminal investigation" because Sinclair's drug problem was not relevant to the prosecution and the drug records could not be used in court. Judge Coyle's reasoning was that no blood tests had been taken on Sinclair at the Fremont Hospital on the day of the accident, therefore no case could be made against him. In fact, the blood tests HAD been taken, but later disappeared.A significant piece of information relative to Judge Coyle's background was passed to me during my investigation of the Queen's accident by retired FBI agent Thomas Walsh. Allegedly, the Judge was once the attorney of record for Curry Company (owned by MCA Corporation) in Yosemite National Park. I later learned, in 1992, that Robert Booth Nichols had strong ties to MCA Corporation through Eugene Giaquinto, president of MCA Corporation Home Entertainment Division. Giaquinto had been on the Board of Directors of Nichols' corporation, MIL, Inc. (Meridian International Logistics, Inc.) and also held 10,000 shares of stock in the holding corporation. MIL, Inc. was later investigated by the Los Angeles FBI for allegedly passing classified secrets to overseas affiliates in Japan and Australia. It is interesting to note, though unrelated, that shortly afterward, the Japanese purchased MCA Corporation, one of the largest corporate purchases to take place in American history. Relative to the Queens accident, in the civil trial that followed the tragic accident, Judge Coyle ruled that both Sinclair and the deceased Secret Service agents were at fault. Mariposa County was ordered to pay 70 percent of the claim filed by the widows, and the Secret Service to pay 30 percent. The county's insurance company paid the claim, and ironically, Sinclair was subsequently promoted to Commander of the Mariposa Sheriff's Department where he is still employed as of this writing. In an interview on March 7, 1988, at Yoshino's Restaurant in Fresno, former U.S. Attorney James White recalled that the original CHP report on the Queens accident was sent to the State Attorney General's office (Van De Kamp) in Sacramento. The report was first received by Arnold Overoye, who agreed with White that Sinclair should be prosecuted. But when the report crossed Van De Kamp's desk, he told Overoye and his assistant to discard it trash it. Van De Kamp then appointed Bruce Eckerson, the Mariposa County District Attorney, to take charge of the investigation and submit a new report. Coincidentally, Bruce Eckerson's disclosure statements on file at the Mariposa County Courthouse indicated that he owned stock in MCA Entertainment Corporation. White added that ALL of the crack M.A.I.T.S. team CHP officers involved in the original investigation either resigned or were transferred (or fired) afterward. The CHP Commander and the Deputy Commander who supervised the M.A.I.T.S. investigation also resigned as did Assistant U.S. Attorney White himself after the coverup took place. However, White noted that before he resigned, he quietly filed with Stephan LaPalm of the U.S. Attorney's office in Sacramento the transcripts of the trial and an affidavit which listed the "hallucinatory" drugs Sinclair had used prior to the accident. I privately continued with the Queen's accident investigation, interviewing deputies Dave Beavers and Rod Cusicwho had been privy to Sinclair's drugged condition on the day of the accident. Beavers, who was the first deputy to arrive on the scene, maintained four years later, in 1987, that he was cognizant of Sinclair's condition, but when he was questioned by James White he was NOT ASKED about the drugs. (James White had by then been ordered to drop the criminal investigation and stay away from the drug aspect of the case). In January 1988, deputy Rod Cusic strode into the offices of the Mariposa Guide, a competitor newspaper to the Mariposa Gazette, and stated that he was "told by Rod Sinclair to lie to a Grand Jury" about Sinclair's drug addiction and the resulting Queen's accident. Cusic added that he officially disclosed this to the Fresno FBI on April 26, 1984 and again on October 9, 1987. In 1987, Cusic also noted that he witnessed a boobytrapped incendiary device explode at Rod Sinclair's home during a visit to his residence. Additionally, earlier on, Sinclair allegedly barricaded himself inside his home and boobytrapped the property, as witnessed by numerous deputies who tried to persuade him to come out. While reviewing old newspaper clippings from the MariposaGazette, I discovered an odd sidebar to the story. In December, 1984, during the Queen's accident civil trial in Fresno, U.S. Attorney James White had introduced testimony that Sinclair's vehicle contained "a myriad of automatic weapons including a boobytrapped bomb" when the collision occurred on March 5, 1983. It was not until 1991 that I discovered the depth of the coverup. A CBS television executive and a Secret Service agent who had ridden in the third car of the Queen's motorcade in 1983, arrived in Mariposato enlist my help in putting the pieces of the puzzle together on the Queen's accident. The Secret Service agent's best friend had been the driver of the car in which all three agents were killed. I signed a contract with the television executive for the sale of the story then drove them to the site of the accident, then to the site of where the damaged vehicle was stored near Lake McClure. The Secret Service agent broke down at the sight of the vehicle, remembering the gruesome appearance of his dead friend in the front seat. He turned, tears welling in his eyes, and said, "His heart burst right through his chest and was laying in his lap when I found him." Dave Beavers joined us the next day. As did former sheriff Ken Mattheys. Beavers did not know that the same Secret Service agent whom he was sitting with in the car was the man who had tried to pull Sinclair out of the sheriff's vehicle on the day of the accident. There had been a scuffle, Beavers insisting that Sinclair go to the hospital with "his own people," and the Secret Service ultimately conceding.The Secret Service agent reflected sadly that they didn't know to ask the hospital for blood tests on Sinclair that day, didn't know of his drug addiction. By the time the case went to court, the records at the hospital were gone. Two weeks after the agent left Mariposa, I received a packet containing copies of Sinclair's drug records for three years prior to the accident. They were the same records that U.S. District Court Judge Robert Coyle had disallowed in the Queen's accident trial. But it was not until producer Don Thrasher, a tenyear veteran of ABC News "20/20," came to town, that I learned of Sinclair's background, or the extent of his addiction. By chance, at a book signing engagement at B. Dalton Bookstore, I had mentioned to the manager, Shaula Brent, that my next book contained information about the Queens accident.Surprised, Shaula blurted out that she had worked at Fremont Hospital when Sinclair was brought in from the accident. Shaula recounted the following: Rod Sinclair was brought into Fremont Hospital and placed in a room with an armed "FBI" agent outside the door. Sinclair had been receiving huge shots of Demerol in the arm every day prior to the accident, by order of Dr. Arthur Dahlem. Shaula noted that Sinclair was a big man and the amount of Demerol he had been receiving would have killed most men. After the Queen's accident, all drugs were withdrawn from Sinclair, and employees, including Shaula, could hear him raving aloud for days from his hospital room. The employees at the hospital were instructed not to speak about or repeat what took place at the hospital while Sinclair was there. Because Shaula and her friend, Barbara Locke, who also worked at the hospital, were suspicious about Sinclair's hospital records, they secretly took photostats of the records "before they were destroyed by the hospital." Blood HAD been drawn on Sinclair on the day of the Queen's accident, and he HAD been under the influence, according to Shaula. Shaula gave the names of six nurses who were witness to Sinclair's condition at the time he was brought into Fremont Hospital. When his body was finally drugfree, Sinclair was transported, against his wishes, to Modesto Hospital. ****** In January, 1992, the final pieces to the puzzle fell into place. Sinclair's background had been the key all along. Producer Don Thrasher had interviewed the Secret Service agent and, although the information he obtained would not be used in his production, he advised me to follow up. The Secret Service corraborated the following profile: Sinclair's father had been a military attache to General Douglas MacArthur during World War II. (I had privately mused how many of MacArthur's men later became arms of the Octopus). In Japan, after the war, Colonel Sinclair (sr.) supervised the training of selected Japanese in intelligence gathering operations. According to the Secret Service, he was an "international figure," highly regarded in the intelligence community. Rod Sinclair, Jr. attended school in Japan during this time. He later reportedly worked in the Army C.I.D. in a nonmilitary or civilian capacity, allegedly receiving training at Fort Liggett in San Luis Obispo, a training center for military intelligence operations. Could it have been possible for Colonel Sinclair, Sr. to have called upon old friends in high places to rescue his son, Rod, from the Queen's accident investigation? Did the Octopus have enough power to alter an investigation of the death of three Secret Service agents? According to the Secret Service agent in Los Angeles, it did. And he intended to tell the story after he retired. CHAPTER 2 By this time three consecutive grand jury foreman's had sought help from the Attorney General, to no avail. It came to pass that one of the deputies, Dave Beavers, was having trouble obtaining his "stress leave" pay and hired a Jackson, California lawyer to represent him in the case. The lawyer, Ben Wagner, not only interviewed Beavers, but began interviewing other deputies who corroborated Beavers' story. Most of them, thirteen in all, had at one time or another testified before the grand jury and subsequently been forced out of the department. Interestingly, none of the deputies knew "why" the others had been been placed on stress leave or resigned until Wagner finally assembled them together and the story was aired. At that point some of the former grand jury members were called in to confirm the testimony of the individual deputies. Most refused to speak up, but a few corroborated the deputies' story. Ultimately, after numerous meetings, the group of deputies and grand jurors formed and later incorporated an organization they called D.I.G. (Decency in Government). By now, Wagner was carrying a gun inside and out of Mariposa for the first time in his life and writing letters to the Attorney General, the FBI, and even President Ronald Reagan. One response was forthcoming, from a special agent at the Fresno Department of Justice, Division of Law Enforcement.This agent listened to Kay Ritter, a former grand jury foreman and several deputies after reviewing Wagner's evidence. Wagner was contemplating a huge civil rights lawsuit against the county of Mariposa, but it was imperative that he first understand "why" the attorney general refused to help these people.When the special agent drove to Sacramento and reviewed the files within the attorney general's office emanating from Mariposa, and talked to some of the office staff there, he learned that everything pertaining to Mariposa was automatically "trashed" when it crossed the A/G's desk. Disgusted, the agent called Ben Wagner and told him "Go ahead with the lawsuit." He had no idea why all the grand jury documents had been trashed, but he was convinced no help would be forthcoming from the attorney general's office. On November 20, 1987, Wagner filed with the U.S. District Court in Fresno the first of two lawsuits, later revealed in a Sacramento newspaper to be the largest civil rights lawsuits ever recorded in California history. Newspaper reporters and television crews flocked to Wagner for interviews. In one instance, Wagner, former Sergeant Dave Beavers and others stood in front of the Fresno FBI building while being interviewed by Channel 3 Sacramento News. On camera, without hesitation, Beavers recalled observing deputies carrying packages of drugs from the Gold Coin Saloon, a notorious drug hangout, and placing the packages in the trunk of their patrol car. A subsequent raid indicated the drugs had been stored by the owner in a historic underground tunnel once used by the infamous bandit, Juaquin Murietta, to escape the sheriff's posse. Meanwhile, on February 10, 1988, attorney Wagner filed at the U.S. District Court in Sacramento a Writ of Mandamus against John Van De Camp, the State Attorney General; George Vinson, regional director of the Fresno FBI; George Deukemejian, then Governor of California, and David F. Levi, United States Attorney for refusing to investigate corruption in MariposaCounty. The citizens of Mariposa were choosing sides, writing letters to the editor, arguing amongst themselves, and being interviewed on the sidewalks by news media. D.I.G. was the talk of the town. On February 17, 1988, Capitol News Service in Sacramento ran a story entitled, "Law & Order Failing on Hill County," by Jerry Goldberg. The article noted that Capitol News Service had had discussions with several Attorney General staff members who "stonewalled questions about any investigation of charges or direct answers on the willingness of Van de Kamp to meet with the citizen's group [D.I.G.]." Goldberg mentioned the "Queen's accident" in his article: "The Fresno case charges destruction of records on individuals [Commander Rod Sinclair] involved in the case. This includes possible information about the fatal accident which occurred in the area [of Mariposa County] when an escort vehicle involved in the visit of Queen Elizabeth in 1983 [crashed.]" Goldberg went on to note that "several people had received threats about dangerous things happening to them if they continued to stand up to the sheriff and district attorney." A San Joaquin County official, who asked not to be named, told Goldberg that a key element to the problems in MariposaCounty "related to the fatal accident which occurred to Queen Elizabeth's escort vehicle." On February 19, 1988, Ben Wagner's wife, a legal secretary, sent a letter to President Ronald Reagan at the White House. The Wagners did not live in Mariposa County, indeed, lived far away in Jackson County, unfettered by corruption, yet they saw fit to take it upon themselves to write for help. That emotionally gripping letter was headed, "Restoring Equal Rights to the Citizens of Mariposa County." It read as follows: "Dear President Reagan: I am writing to you not only as the wife of an attorney, but as a citizen of the United States. My initial concern is that you personally receive this letter and enclosures, as many residents of Mariposa County have literally placed their lives, and the lives of their families in jeopardy by coming forth to expose the local government corruption detailed herein.I understand that your time is at a premium, however, your immediate attention regarding these matters is of the utmost importance, and respectfully requested. "In August, 1987, our office was approached by several exdeputies and individuals from Mariposa County requesting assistance in redressing unlawful and corrupt activities by officials and departments within their local government, and failure on the part of the State Attorney General John Van De Kamp, the Office of the Attorney General, and our Federal agencies, to investigate these alleged activities. "What we found through our initial investigations and accumulation of evidence into these allegations was appalling. It took us time to realize that in fact, the Constitution of the United States had been suspended in this county. "The organization, Decency in Government [D.I.G.], was formed, and on November 20, 1987, the first multimillion dollar Civil Rights suit was filed in Fresno. We felt media coverage would lay a solid ground of personal safety for other complaintants to come forth. This coverage proved to be successful, and on February 11, 1988, the second Civil Rights suit was filed, along with the filing of a Writ of Mandamus in Sacramento. "I have enclosed copies of these suits, including several newspaper articles regarding the situation. Since 1979, many residents, including individuals, sheriff's deputies, groups, organizations, members of Grand Juries and Grand Juries have taken their complaints to the Office of the Attorney General, State Attorney General John Van De Kamp and Federal authorities for investigation. "These agencies have continuously and blatantly failed to redress the grievances of these citizens. What appears to be a consistent procedure of one Arnold O. Overoye, of the State Attorney General's Office, is to refer the complaints directly back to the local agencies to whom the complaints were made. "Over the years, this has perpetrated threats, intimidation and fear by these local officials to the complaining individuals. There has also been questions regarding the disappearance of citizens possessing incriminating evidence, and the incompletion or failure to investigate `homicides' and `suicides'. "Further, it has recently come to our attention, that Mr. Overoye's `procedure,' and the inaction of State Attorney John Van De Camp and Federal agencies is not limited to Mariposa County, but in fact, expands to a number of foothill counties who are experiencing the same types of local corruption. "The grievances of these citizens, as you will note in paragraph IV of the WRIT are: (1) Violation of Individual Civil Rights (2) Abuse of discretion in the prosecution of criminal complaints (3) Intentional obstruction of the due course of Justice (4) Malicious prosecution (5) Bribery (6) Intimidation of Grand Jury members and witnesses (7) The deprivation of property (8) Illegal and unlawful land transaction (9) The failure to arrest and prosecute those involved in illegal drug sales, including individuals employed by the County of Mariposa (10) Violation of Property Rights (11) Conspiracy to impede and obstruct criminal investigations (12) Homicide (13) Attempted homicide (14) Rape (15) Battery (16) Perjury. "Why Mr. President, are we bound to the laws of this country, and our officials are not? Life in Mariposa is as if the citizens were being held in detention, and the local agencies, the criminals, were running the county. "Needless to say, residents feel it is a way of life to literally arm themselves and their homes against their government! I have been in these people's homes, and have witnessed the arsenal of weapons they feel they must possess to protect themselves and their families. "My husband must travel in, around and out of this county [Mariposa] with an armed escort. He is transported during `the midnight hours' to interview Plaintiffs and witnesses. "I ask you, Mr. President, what country are we living in? We should certainly make sure that our backyard is clean before we boast to the Soviets regarding the Civil Rights of Americans. "On January 19, 1988, my husband took two witnesses, Kay Ritter, a former Mariposa Grand Jury Forewoman and Robert Ashmore, an exdeputy, to Mr. [George] Vinson, the Regional Director of the FBI in Fresno. The testimony, both oral and documentary, took approximately 3 hours to present. To this date, the FBI has failed to redress the grievances of these complaintants, and Mr. Vinson did not even have the courtesy to return my husband's phone calls. It came to our understanding, through a reliable source, that Mr. Vinson felt the complaints had `no substance.' "Mr. President, my husband has been a trial attorney for 14 years. He certainly wouldn't waste his time or expertise, or the time of these witnesses, if he felt there was `no substance' to the contents of their testimony.However, this attitude by Attorney General Van De Camp, his office, and Federal agencies is typical and consistent. "Shortly after this incident, a major drug dealer contacted our office with valuable information detailing the sale of illegal drugs to county officials, and wanted information regarding the Federal Witness Program. Mr. Vinson, knowing this by telephone messages, again failed to return my husband's inquiries. "There is evidence by another credible witness, who was informed by the FBI, that should they get involved now, it would be `bad publicity,' and `they have let the problems in Mariposa get too far out of hand.' "You may wonder why my husband and I became dedicated to the citizens of this county. We certainly don't foresee large amounts of money at the end of this case. Our investment in time and expenditures exceeds $40,000 to date.What we do see are people, just like you and I, who have been suppressed by their own `elected ' officials, with no help or assistance from Attorney General Van De Kamp, his office, or Federal agencies. If someone doesn't help them, they will continue to live under these conditions, which I could never imagine would exist in America. "My husband is not a righteous individual, nor is he perfect. None of us are you know. He also doesn't believe that he can solve the problems of the world. However, being an attorney, he is an officer of the Court, and he feels a professional obligation to uphold the laws of the State, and to maintain the freedom of the citizens of this country. "This is, however, more than I can say about a number of `representatives' and officials, who have failed to perform their appointed duties of their office, and are paid by the taxpayers.Through my involvement in this case, I have found, to my repulsion, that my lifelong conception of our government's representation of the `people,' its vested authority and ability to uphold Civil Rights, and its duty to maintain the laws and the Constitution, has been only an shattering illusion. "Our system has failed, Mr. President. And by its failure, has crushed and destroyed the lives of many innocent, lawabiding people. Why? There is an answer. And we will utilize every legal avenue to find it. We will not be discouraged, or give up in our effort to restore the Constitution of the United States in Mariposa County, and other foothill communities. We will continue until the answer is found. Even if it means presenting the problem to you, Mr. President, on the steps of the White House. "Our best regards to Mrs. Reagan. Respectfully yours, Vivian L. Wagner." ****** Shortly before Ben Wagner's first scheduled appearance in U.S. District Court in Fresno on behalf of D.I.G. (Decency in Government), Wagner received an obscure response from "Chuck" at the Reagan White House. Wagner excitedly called Kay Ritter and Dave Beavers, myself and a few others to note that a meeting with "Chuck" was scheduled that week. It was to be a somewhat secret meeting as requested by the White House. However, the day after meeting with "Chuck," Wagner unplugged his phone and walked out on his law practice and his home in Jackson, California, taking nothing with him except his clothes and his wife, never to be seen again. I was later told that Jerry Goldberg of Capitol News Service did the same, on the same day, and I was never able to locate either of them again. CHAPTER 3 The last remnants of the D.I.G. group were beginning to call themselves "The Loser's Club," resembling forlorn characters out of a Stephen King novel. They had squared off against a labyrnthine evil so incomprehensible, they didn't know what they were fighting. It was time to bring in some outside help. During a strategy meeting in Jackson, California, Ben Wagner had received an impressive 700 page report commissioned by the Tulare City Council. The report, compiled by Ted Gunderson, a former Los Angeles FBI agent, was indepth and straightforward about deputies receiving payoffs and distributing drugs in the small farmtown of Tulare. Wagner had given me a copy for my files. On an impulse, I picked up the phone and called Gunderson's telephone number listed at the top of the attached resume. The resume was impressive. He'd worked as SAC (Senior Special Agent in Charge) at Los Angeles FBI headquarters, Washington D.C. headquarters and in Dallas, Texas. It would be two years before I would grasp the significance of the Dallas connection. After retiring from the FBI, he'd worked for F. Lee Baily, Esq., then formed his own investigative agency in Los Angeles county. I left a message with the answering service and he returned the call a few days later. His voice was open, attentive, devoid of the bureaucratic hollowness I had come to expect from FBI agents. We talked briefly, mostly about the problem DIG was experiencing in Mariposa. I said I needed help, anticipating his next question. But none came forth. Instead, a clipped knowingness entered his tone, as if nothing more should be said on the phone. He agreed to meet with me at his home a few weeks later and we hung up. Unknown to me at the time, I had taken a quantum leap in the direction of the Octopus when I contacted Ted Gunderson. The mystery of the Mariposacoverups would soon be divulged through an associate of his, a former member of "The Company" in nearby Fresno, California. ****** On November 30, 1991, Ted Gunderson opened the door at his Manhattan Beach home and ushered us into a small living room cluttered with toys. He made no explanation for the toys scattered around the floor and the couch, but offered coffee and donuts, then proceeded to eat most of the donuts himself. I had expected someone dripping with intrigue, instead he was classic in the sense of an investigator; rumpled shirt and slacks, nervous movements, distracted behavior. We sat on the couch bunched together amongst the toys. Gunderson pulled a kitchen chair up in front of us, leaned over and began stuffing his mouth with cheese and crackers, all the while talking, his body in perpetual motion. He was a big, handsome man with an aging face and tossled silver hair. He seemed entirely unaware of his appearance or the appearnce of his home, but his pale eyes were intelligent and probing. Intuitively, I knew he was more than he appeared to be. A young woman, perhaps early thirties, entered the room brushing long blond hair, still wet from the shower. Her faded jeans and sundrenched appearance reminded me of friends I'd known growing up in Newport Beach. Gunderson introduced her as his "partner," as she seated herself silently on the floor next to him. The flush on her face brought a fleeting prescience to me that they had been making love shortly before the meeting. Ray Jenkins recounted the Mariposa story for several hours, with the rest of us digressing to insert a fact here or there. The investigation had led beyond Mariposa into MCA Corporation, and various State and Federal levels of government. I noted that Danny Casolaro's research had started at the eastern end, in Washington D.C., yet he had been preparing to travel to California for the rest of the story, before his death three months earlier. Gunderson listened carefully, occasionally interrupting to ask questions, then motioned us to follow him to the backyard. There we stood in a circle in the middle of his yard while he surveyed the area. Satisfied that he was not being watched, he agreed to come to Mariposa, with media, and perform a citizens arrest on the corrupt officials. He pulled a frazzled piece of paper from his pocket and gave me a list of telephone numbers to write down. They were numbers to telephone booths at various locations in the vicinity of his home. Each booth had been coded 1,2,3,4, or 5. He instructed that the next time I called him, he would give me the code number of the booth and a time to call. I would then call him at the designated booth. Eight hours later, I handed him a copy of my first book, as a courtesy, then left Manhattan Beach loaded with newspaper clippings and documents, mostly relating to Casolaro's investigation of the Octopus. One packet was titled, "The Wonderful Weapons of Wackenhut," others related to the Inslaw affair, Iran/Contra and various savings and loan scandals. In the van, reviewing the documents, I wondered what relationship they had to Mariposa County and why I was given the packet. The documents were far ranging, beyond anything I had heretofore imagined. But within days of my visit to Gunderson, I would be introduced to the Octopus. ****** The following morning, at 7:30 a.m., I received a collect call from a man who identified himself as Michael Riconosciuto (pronounced Riconoshooto). Riconosciuto, calling from the Pierce County jail in Tacoma, Washington, said he had been informed by Gunderson that I was investigating a corruption/drug ring in Mariposa County. For 45 minutes Riconosciuto related the names of those in charge of methamphetamine operations in Mariposa, Madera and Fresno counties. A ton of methamphetamine had been seized in the area of my investigations, according to Riconosciuto. Richard Knozzi was a high level "cooker" and Jim DeSilva, Ben Kalka, and others were medium level distributors or lieutenants. Kalka was currently serving time in a Pleasanton prison; 900 pounds of methamphetamine had been seized under his control. "Who's behind this ring?" I asked. Riconosciutopaused for a moment, then took a deep breath. "It's The Company. Arms get shipped to the Contras, the Afghanistan rebels [Mujahaden], the Middle East. You know, to fight the Soviet influence. But the Contras and the Mujahaden don't have money to pay for arms, so they pay with drugs, cocaine or heroin. The Company handles the drug end of it in the U.S ..." "What's The Company ...?," I asked. Riconosciutointerrupted, "Wait a minute. It's a long story. You have to start at the beginning." Concerned that Riconosciuto might have to hang up, I hurriedly pushed for answers. "Arms for drugs, do you have proof?" "Oh, yeah. It's a selfsupporting system, they don't have to go through Congress ..." "Michael," I pressed, "who ships the arms?" Riconosciutoquieted for a moment, gathering his thoughts. "Let's start with Wackenhut. I didn't play ball with Wackenhut so they poisoned the well for me. I'm in jail because I worked for Wackenhut. The government has put together a very simple drug case against me ... as if that's what I'm about, just a druggie." "Tell me about Wackenhut." "It's a security corporation headquartered in Coral Gables, Florida. Wackenhut provides security for the Nevada nuclear test site, the Alaskan pipeline, Lawrence Livermore Labs, you know, all the high security government facilities in the U.S. They have about fifty thousand armed security guards that work for minimum wage or slightly above. "On the other hand, on the Wackenhut board of directors, they have all the former heads of every government agency there ever was under Ronald Reagan and George Bush; FBI, CIA, NSA, Secret Service, etc. "You know, they've got retired Admiral Stansfield Turner, a former CIAdirector; Clarence Kelley, former FBI director; Frank Carlucci, former CIA deputy director; James Rowley, former Secret Service director; Admiral Bobby Ray Inman, former acting chairman of President Bush's foreign intelligence advisory board and former CIA deputy director. Before his appointment as Reagan's CIA director, the late William Casey was Wackenhut's outside legal counsel ..." I interrupted him, wanting to know where HE fit into the picture? "Well, I served as Director of Research for the Wackenhut facility at the Cabazon Indian reservation in Indio, California. In 198384 I modified the PROMISE computer software to be used in law enforcement and intelligence agencies worldwide. A man named Earl Brian was spearheading a plan for worldwide use of the software, but essentially, the modified software was being pirated from the owners, Bill and Nancy Hamilton." I asked, "So how did that cause your arrest?" Michael was articulate, but his story was becoming complicated. He continued. "I signed an affidavit for the Hamiltons stating that I had been responsible for the modification. The House Judiciary Committee on Inslaw was investigating the theft of the software and I was afraid I would be implicated since I had performed the modification. Nine days later, in an attempt to discredit my testimony, I was arrested for allegedly operating a drug lab." I didn't want to push Riconosciuto on the subject of a drug lab at that point, but voiced my foremost concern. "Will the House Judiciary Committee be bringing you in to testify?" "Eventually, yes." "Are you in any danger where you are right now?" I was unaware at the time that Riconosciuto had been recruited at Stanford University into the CIA nearly twenty years earlier, and danger was a matter of fact in his life. "Oh, you bet! Several of the jail guards here moonlight for Wackenhut here in Tacoma." Riconosciuto went on to discuss the Wackenhut setup. "Basically, what you have is a group of politically well connected people through Wackenhut who wanted to get juicy defense contracts when Ronald Reagan got elected president. And they did! They also preyed on high tech start up companies, many of them out of Silicon Valley in California. "They saw technology that they wanted and they either forced the companies into bankruptcy or waited on the sidelines, like vultures, and picked them up for pennies after they were bankrupt." I made profuse notes as Riconosciuto spoke, not knowing where he was leading, but assuming his narrative would eventually intersect with my investigation of government sanctioned drug operations. Finally it did. According to Riconosciuto, Wackenhut Corporation "made inroads" into the methamphetamine operation. A man named Richard Knozzi allegedly headed major government sanctioned meth laboratories in Fresno, Madera and Mariposa counties. A man named Al Holbert, a former Israeli intelligence officer with U.S. citizenship, was the liaison or connection between the Knozzi operation and the U.S. government. In subsequent documents obtained from Michael's secret hiding place in the California desert, I located documents which indicated Michael had first been recruited into the CIA by Al Holbert. However, during this first of many phone conversations with Riconosciuto, I found myself searching for a beginning, something concrete to get a foothold. "Michael, is there any proof that you worked at Wackenhut?" Michael responded diffidently. "CNN recently ran a piece, and they filmed a location shot from the parking lot of the casino. Then they aired another location shot on the [Cabazon] reservation of just an expanse of bare land, blue sky, sand and sagebrush. Then the narrator says, `Here on the Indian reservation is where Michael Riconosciuto claims to have modified the PROMISE software.' They didn't show the tribal office complex, they didn't show the industrial park. They showed a bare expanse of land, like I had a computer out in a teepee in the middle of the desert! The government is doing a character assassination on me. I'm fair game now that I'm in jail, because I've raised too many provocative questions, you know, and they're trying to relegate me to the area of delusion ..." ****** For three months Riconosciuto called daily from the Pierce County jail in Tacoma, Washington. At his request, I attached a tape recorder to my phone and unraveled a complicated web of illegal overseas arms shipments, espionage, CIA drug trafficking, biological warfare development, computer software theft, money laundering and corruption at the highest levels of government. Throughout this time span, I also obtained every newspaper and magazine article I could lay my hands on relative to Riconosciuto's background and contacts. Riconosciuto had been communicating regularly with journalist Danny Casolaro prior to his death on August 10, 1991 when Danny's nude body was found in the bathtub of room 517 of the Sheraton Hotel in Martinsburg, West Virginia. His wrists had been slashed ten or twelve times. No papers were found in his hotel room or in his car, though he was known to cart a briefcase and files everywhere he went. An XActo blade found in the bathtub was not sold locally and his briefcase is still missing to this day.Casolaro was working on a book entitled, "Behold a Pale Horse," which encompassed the October Surprise story, the Inslaw computer software case, the Iran/Contra affair, the B.C.C.I. scandal, and M.C.A. entertainment corporation, all overlapping and interconnecting into one network which he dubbed, "The Octopus." He told friends that he "had traced the Inslaw and related stories back to a dirty CIA `Old Boy' network" that had begun working together in the 1950's around the Albania covert operations. These men had gotten into the illegal gun and drug trade back then and had continued in that business ever since. Before his death, Danny had made plans to visit the Wackenhut Corporation in Indio, California, and even considered naming his book, "Indio." CHAPTER 4 The history of Wackenhut Corporation is best described from its own literature. An outdated letter of introduction typed on Wackenhut letterhead once sent to prospective clients provided me with the following profile: (Excerpted) "Wackenhut Corporation had its beginnings in 1954, when George R. Wackenhut and three other former Special Agents of the Federal Bureau of Investigation formed a company in Miami, Special Agent Investigators, to provide investigative services to business and industry. "The approach was so well received that a second company was formed in 1955 to apply the same philosophy to physical security problems. In 1958 the companies were combined under the name of Wackenhut Corporation, a Florida company. From the outset, George Wackenhut was President and chief executive officer of the enterprise. Wackenhut established its headquarters in Coral Gables, Florida in 1960, extending its physical security operations to the United States government through formation of a whollyowned subsidiary, Wackenhut Services, Incorporated. This was done in order to comply with federal statute prohibiting the government from contracting with companies which furnish investigative or detective services. "In 1962, Wackenhut operations extended from Florida to California and Hawaii. On January 1, 1966, the company became international with offices in Caracas, Venezuela, through half ownership of an affiliate. "The Wackenhut Corporation became public in 1966 with overthecounter stock sales and joined the American Stock Exchange in 1967. Through acquisitions of subsidiaries and affiliates, now totaling more than 20, and expansion of it contracts into numerous territories and foreign countries, the Wackenhut Corporation has grown into one of the world's largest security and investigative firms. "In 1978 acquisition of NUSAC, a Virginia company providing technical and consulting services to the nuclear industry, brought Wackenhut into the fields of environment and energy management. In 1979, Wackenhut acquired Stellar Systems, Inc., a California company specializing in outdoor electronic security. "The executive makeup of the company reflects the stress Mr. Wackenhut placed on professional leadership. The Wackenhut Corporation is guided by executives and managers with extensive backgrounds in the FBI and other military, governmental and private security and investigative fields. "The principle business of the company is furnishing security and complete investigative services and systems to business, industry and professional clients, and to various agencies of the U.S. Government. "Through a whollyowned subsidiary, Wackenhut Electronic Systems Corporation, the company develops and produces sophisticated computerized security systems to complement its guard services. "Major clients of Wackenhut's investigative services are the insurance industry and financial interests. These services include insurance inspections, corporate acquisition surveys, personnel background reports, preemployment screening, polygraph examinations and general criminal, fraud and arson investigations. "The wide variety of services offered by Wackenhut Corporation also includes guard and electronic security for banks, office buildings, apartments, industrial complexes and other physical structures; training programs in English and foreign languages to apply Wackenhut procedures to individual clients needs; fire, safety and protective patrols; rescue and first aid services; emergency support programs tailored to labormanagement disputes, and predeparture screening programs widely used by airports and airlines. "The company now has some 20,000 employees and maintains close to 100 offices and facilities with operations spread across the United States and extending into Canada, the United Kingdom, Western Europe, the Middle East, Indonesia, Central and South America and the Caribbean." ****** On the surface, Wackenhut Corporation seemed innocous enough, but through documents later obtained from Michael Riconosciuto, I learned there was another, darker side to Wackenhut operations, at the Cabazon Indian reservation near Indio, California. Because Indian reservations are sovereign nations and do not come under federal jurisdiction, Wackenhut International had formed a partnership and entered into a business venture with the Cabazon Indians to produce hightech arms and explosives for export to thirdworld countries. This maneuver was designed to evade congressional prohibitions against U.S. weapons being shipped to the Contras and middle eastern countries. In the early 1980's, Dr. John Nichols, the Cabazon tribal administrator, obtained a department of Defense secret facility clearance for the reservation to conduct various research projects. Nichols then approached Wackenhut with an elaborate "joint venture" proposal to manufacture 120mm combustible cartridge cases, 9mm machine pistols, lasersighted assault weapons, sniper rifles and portable rocket systems on the Cabazon reservation and in Latin America. At one point, he even sought to develop biological weapons. Again, through Michael Riconosciuto's files, I later obtained interoffice memorandums and correspondence relating to biological technology, but more on that in chapter 10. Meanwhile, in 1980, Dr. John Nichols obtained the blueprints to Crown Prince Fahd's palace in Tiaf, Saudi Arabia, and drafted a plan to provide security for the palace. The Saudis were interested enough to conduct a background check on the Cabazons. Mohammad Jameel Hashem, consul of the Royal Embassy of Saudi Arabia in Washington, D.C., wrote former South Dakota Senator James Abourezk at his offices in Washington D.C. and noted, "According to our black list for companies, the Cabazon Band of Mission Indians/Cabazon Trading Company and Wackenhut International are not included." Translated, that meant that neither the Cabazons or Wackenhut were Jewishrun enterprises. George Wackenhut's political leanings were once described in a book entitled, "The Age of Surveillance, The Aims and Methods of America's Political Intelligence System," by Frank J. Donner (Knopf, 1980), pp. 424425 as such: "The agency's [Wackenhut] professional concerns reflect the political values of its director, George Wackenhut. A rightist of the old blood, he selected as his directors an assortment of ultras prominent in the John Birch Society, the ASC, and other rightwing groups. The agency's monthly house organ, the `Wackenhut Security Review,' systematically decried the subversive inspiration in virtually all the protest movements of the sixties, from civil rights to peace. This vigilance earned the publication the accolade of rightwing organizations, inluding (in 1962) the George Washington Honor Medal and the Freedom Foundation Award at Valley Forge, Pennsylvania; and (in 1965 and 1966) the Vigilant Patriots Award from the AllAmerican Conference to Combat Communism." ****** Of all the articles written about Wackenhut Corporation, probably the most provacative was written by John Connolly for SPY magazine, published in September 1992, pp. 4654. Connolly, a former New York police officer turned writer, began his story with the following introduction: "What? A big private company one with a board of former CIA, FBI and Pentagon officials; one in charge of protecting nuclearweapons facilities, nuclear reactors, the Alaskan oil pipeline and more than a dozen American embassies abroad; one with longstanding ties to a radical rightwing organization; one with 30,000 men and women under arms secretly helped Iraq in its effort to obtain sophisticated weapons? And fueled unrest in Venezuela? This is all the plot of a new bestselling thriller, right? Or the ravings of some overheated conspiracy buff, right? Right? WRONG." Connolly highlighted George Wackenhut as a "hardline rightwinger" who was able to profit from his beliefs by building dossiers on Americans suspected of being Communists or leftleaning "subversives and sympathizers" and selling the information to interested parties. By 1965 , Wackenhut was boasting to potential investors that the company maintained files on 2.5 million suspected dissidents one in 46 American adults then living. In 1966, after acquiring the private files of Karl Barslaag, a former staff member of the House Committee on UnAmerican Activities, Wackenhut could confidently maintain that with more than 4 million names, it had the largest privately held file on suspected dissidents in America. Connolly wrote that it was not possible to overstate the special relationship that Wackenhut enjoys with the federal government. Richard Babayan, claiming to be a CIA contract employee, told SPY that "Wackenhut has been used by the CIA and other intelligence agencies for years. When they [the CIA] need cover, Wackenhut is there to provide it for them." Another CIA agent, Bruce Berckmans, who was assigned to the CIA station in Mexico City, but left the agency in January 1975 (putatively) to become a Wackenhut internationaloperations vice president, told SPY that he had seen a formal proposal submitted by George Wackenhut to the CIA offering Wackenhut offices throughout the world as fronts for CIA activities. In 1981, Berckmans joined with other senior Wackenhut executives to form the company's Special Projects Division. It was this division that linked up with exCIA man Dr. John Phillip Nichols, the Cabazon tribal administrator, in pursuit of a scheme to manufacture explosives, poison gas and biological weapons for export to the contras and other communist fighting rebels worldwide. SPY also printed testimony from William Corbett, a terrorism expert who spent 18 years as a CIA analyst and is now an ABC News consultant in Europe. Said Corbett, "For years Wackenhut has been involved with the CIA and other intelligence organizations, including the DEA. Wackenhut would allow the CIA to occupy positions within the company [in order to carry out] clandestine operations."Additionally, Corbett said that Wackenhut supplied intelligence agencies with information, and it was compensated for this "in a quid pro quo arrangement" with government contracts worth billions of dollars over the years. On page 51, in a box entitled, "Current and Former Wackenhut Directors," SPY published the following names: "John Ammarell, former FBI agent; Robert Chasen, former FBI agent; Clarence Kelly, former FBI director; Willis Hawkins, former assistant secretary of the Army; Paul X. Kelley, fourstar general (ret.), U.S. Marine Corps; Seth McKee, former commander in chief, North American Air Defense Command; Bernard Schriever, former member, President's Foreign Intelligence Advisory Board; Frank Carlucci, former Defense Secretary and former deputy CIA director; Joseph Carroll, former director, Defense Intelligence Agency; James Rawley, former director, U.S. Secret Service; Bobby Ray Inman, former deputy CIA director." CHAPTER 5 Danny Casolaro's body was found at 12:30 p.m. in a bloodfilled bath tub by a hotel maid who called the Martinsburg police. The body contained three deep cuts on the right wrist and seven on the left wrist, made by a single edge razor blade, the kind used to scrape windows or open packages.At the bottom of the bathwater was an empty Milwaukee beer can, a paper glass coaster, the razor blade and two white plastic trash bags, the kind used in wastepaper baskets.On the desk in the hotel room was an empty mead composition notebook with one page torn out and a suicide note which read: "To those who I love the most, please forgive me for the worst possible thing I could have done. Most of all, I'm sorry to my son. I know deep down inside that God will let me in." There were no other papers, folders, documents of any sort, nor any briefcase found in the room. Danny's wallet was intact, stuffed with credit cards.The body was removed from the tub by Lieutenant Dave Brining from the Martinsburg fire department, and his wife, Sandra, a nurse who works in the hospital emergency room. The couple, who often moonlighted as coroners, took the body to the Brown Funeral Home where they conducted an examination.Charles Brown then decided to embalm the body that night and go home, rather than come back to work the next day, Sunday. No one in Danny Casolaro's family had been notified of his death at that time, nor had they requested the body be embalmed.When Casolaro's family learned of the death, they insisted it was not a suicide and called for an autopsy and an investigation. Though the body had already been embalmed, an autopsy was performed at the West Virginia University Hospital by a Dr. Frost. The findings indicated that no struggle had taken place because there were no recent bruises on the body. The drugs found in Casolaro's urine, blood and tissue samples were in minute amounts but they were also unexplainable by his brother, Tony, who is a medical doctor. According to Tony Casolaro, Danny did not take drugs or have any prescriptions for the drug traces of Hydrocodone and Tricyclic antidepressant that were found in the body. No pill boxes or written prescriptions were found. Dr. Casolaro searched through his brother's Blue Cross records and found no record of the prescriptions or doctor visits. During the autopsy of the body, Dr. Frost had found lesions within the brain which were characteristic of Multiple Sclerosis. It was possible that Danny was having blurring of vision, but Dr. Frost downplayed the possibility that this contributed to any suicide. Of particular interest, was Frost's observation that the deep razor wounds on Danny's wrists were inflicted "without any hesitation marks." However, the lack of hesitation did not indicate one way or the other whether they were or were not selfinflicted.Investigators and police never found Danny's missing briefcase. On August 6, 1991, Casolaro's housekeeper, Olga, helped Danny pack a black leather tote bag. She remembered he also packed a thick sheaf of papers into a dark brown or black briefcase. She asked him what he had put into the briefcase and he replied, "I have all my papers ..." He had been typing for two days, and as he left the house, he said, "Wish me luck. I'll see you in a couple of days." By August 9th, Casolaro's friends were alarmed. Noone had heard from him and Olga was receiving threatening phone calls at Danny's home. On Saturday, August 10th, Olga received another call, a man's voice said, "You son of a bitch. You're dead."After learning of Danny's death, Olga recalled seeing Danny sitting in the kitchen on August 5th with a "heavy man ... wearing a dark suit. He was a dark man with black hair he turned towards the door, I saw he was darkskinned. I told police maybe he could be from India." At 3:00 p.m. on Friday, the day before Danny's death, Bill Turner, a friend and confidante, met Danny in the parking lot of the Sheraton Hotel to deliver some papers to him. The papers allegedly consisted of two sealed packages which Turner had been keeping in his safe at home for Danny, and a packet of Hughes Aircraft papers which belonged to Turner. Danny had appeard exhuberant to most of his friends before his death, noting that he was about to "wrap up" his investigation of The Octopus. Casolaro was trying to prove that the alleged theft of the Inslaw computer program, PROMISE, was related to the October Surprise scandal, the IranContra affair and the collapse of BCCI (Bank of Credit and Commerce International). Turner later admitted to police that he had indeed met with Danny on August 9th, but at that time he refused to specify what time and would not describe what was in the papers he delivered to Danny. I later learned that Turner had been investigating discrepancies involving his former employer, Hughes Aircraft Company. The documents he had delivered from his safe to Danny had been sealed, with Casolaro's name written across the seal, and he claimed not to have known what they contained.Nevertheless, it is feasible to assume that Turner may have known who Danny was preparing to meet that evening at the Martinsburg Hotel because, for reasons of his own, Turner apparently wanted Danny to show the Hughes Aircraft documents to whoever he was meeting with. Turner later noted to reporters that he was "scared shitless" about information he had seen connecting Ollie North and BCCI. "I saw papers from Danny that connected back through the Keating Five and Silverado [the failed Denver S & L where Neil Bush had been an officer]," he said. To his friend, Ben Mason, Danny showed a 22point outline for his book. Included in the information he shared with Mason were papers referring to IranContra arms deals. Photocopies of checks made out for $1 million and $4 million drawn on BCCI accounts held for Adnan Khashoggi, and international arms merchant and factotum for the House of Saud, and by Manucher Ghorbanifar, an arms dealer and IranContra middleman, were presented. "The last sheet," noted Mason, "was a passport of some guy named Ibrahim." Casolaro had emphasized that Ibrahim had made a big deal of showing him (Casolaro) his "Egyptian" passport."Ibrahim" was obviously the informant whom Olga, Casolaro's housekeeper, had seen sitting in the kitchen with Danny on August 5th. Hassan Ali Ibrahim Ali, born in 1928, was later identified as the manager of Sitico, an alleged Iraqi front company for arms purchases. Casolaro had obtained these papers from Bob Bickel, who in turn obtained them from October Surprise source Richard Brenneke. Ari BenMenasche, a self proclaimed Israeli military intelligence officer, was responsible for the tipoff to an obscure Lebanese magazine about what later became known as the IranContra scandal. After Casolaro's death, Menasche called Bill Hamilton, the president of Inslaw Company and creator of the PROMISE software. (Hamilton had been in daily contact with Casolaro until about a week prior to his death). Menasche claimed that two FBI agents from Lexington, Kentucky, had embarked on a trip to Martinsburg to meet Casolaro as part of their investigation of the sale of the PROMISE software to Israel and other intelligence agencies.Ben Menasche told Hamilton that one of the FBI agents, E.B. Cartinhour, was disaffected because his superiors had refused to indict high Reagan officials for their role in the October Surprise. Ben Menasche claimed the agents were prepared to give Casolaro proof that the FBI was illegally using PROMISE software. It is highly unlikely that the two FBI agents were enroute to Martinsburg to GIVE anything to Casolaro, but they may well have been on their way to obtain HIS documents and those belonging to Bill Turner. If, in fact, Danny had disclosed to any one of the many "sources" he had developed during his investigation, that he was turning over his documents to the Lexington FBI, that may well have alarmed a few of them. Casolaro was also investigating Colonel Bo Gritz's expose of CIAdrug trafficking, and had requested to meet with a former police officer who had information on Laotian warlord Kuhn Sa's Golden Triangle drug trade proposal to the U.S. He had learned through a Sacramento Bee newspaper article, dated June 2, 1990 that Patrick Moriarty, the Red Devil fireworks magnate convicted of laundering political contributions and bribing city officials in Sacramento, had been subpoenaed to testify on behalf of Gritz at his trial in Las Vegas where he was tried for using a false passport. Gritz was acquitted of the charges. Moriarty's lawyer, Jan Lawrence Handzlik, told the Bee that Moriarty had paid Gritz to make business trips to China, Singapore and other parts of Asia. Gritz said his business trip to Asia in July 1989 was for the purpose of negotiating an oil interest that he and Moriarty had set up between the People's Republic of China and Indonesia. It is noteworthy that Patrick Moriarty is the longtime (30 years) partner of Marshall Riconosciuto, Michael Riconosciuto's father. They owned several California businesses together, two of which were Hercules Research Corporation, of which Michael was a partner, and Pyrotronics Corporation. ****** Casolaro at one time considered the title of "Indio" for the book he was writing about "The Octopus." His death occurred just days before he planned to visit the Cabazon Indian reservation near Indio, California. Though his notes did not divulge what role the Cabazons may have had in the conspiracy, Casolaro listed Dr. John Phillip Nichols, the Cabazon administrator, as a former CIA agent. A source of information which Danny may have read is entitled, "DARK VICTORY, Ronald Reagan, MCA, and the Mob," by Dan E. Moldea. Moldea named this unholy alliance "The Octopus" in his book. Numerous publications reporting on Casolaro's death corroborated that one of his sources included Michael Riconosciuto, a "44yearold former hightech scientist who had connections with Wackenhut Corporation ..." What brought Casolaro to Riconosciuto was an affidavit signed by Riconosciuto claiming that when he worked on the WackenhutCabazon project, he was given a copy of the Inslaw software by Earl Brian for modification. Riconosciuto also swore that Peter Videnieks, a Justice Department official associated with the Inslaw contract, had visited the WackenhutCabazon project with Earl Brian. Earl Brian was a businessman and Edwin Meese crony who served in Governor Ronald Reagan's cabinet in California.The $6 million in software stolen from William and Nancy Hamilton, coowners of Inslaw Company, was allegedly sold by the Justice Department through Earl Brian to raise offthebooks money for covert government operations. On May 18, 1990, Riconosciuto had called the Hamiltons and informed them that the Inslaw case was connected to the October Surprise affair. Riconosciuto claimed that he and Earl Brian had traveled to Iran in 1980 and paid $40 million to Iranian officials to persuade them NOT to release the hostages before the presidential election in which Reagan became president of the United States. Riconosciuto's information created a domino effect in Washington D.C., opening numerous investigations and causing a media blitz. At that time, Casolaro headed the Hamilton's private investigation of the theft of their software and he had regular communication with Riconosciuto. Former U.S. Attorney General Elliott Richardson, the Hamilton's attorney, subsequently sent Riconosciuto an affidavit to sign, to be filed by Inslaw in federal court in connection with Inslaw's pending Motion for Limited Discovery. The affidavit, Case No. 8500070, entered into court records, resulted in Riconosciuto's arrest within days. It read as follows: "I Michael J. Riconosciuto, being duly sworn, do hereby state as follows: "(1) During the early 1980's, I served as the Director of Research for a joint venture between the Wackenhut Corporation of Coral Gables, Florida, and the Cabazon Band of Indians of Indio, California. The joint venture was located on the Cabazon reservation. "(2) The WackenhutCabazon joint venture sought to develop and/or manufacture certain materials that are used in military and national security operations, including night vision goggles, machine guns, fuelair explosives, and biological and chemical warfare weapons. "(3) The Cabazon Band of Indians are a sovereign nation. The sovereign immunity that is accorded the Cabazons as a consequence of this fact made it feasible to pursue on the reservation the development and/or manufacture of materials whose development or manufacture would be subject to stringent controls off the reservation. As a minority group, the Cabazon Indians also provided the Wackenhut Corporation with an enhanced ability to obtain federal contracts through the 8A Set Aside Program, and in connection with Governmentowned contractoroperated (GOCO) facilities. "(4) The WackenhutCabazon joint venture was intended to support the needs of a number of foreign governments and forces, including forces and governments in Central America and the Middle East. The Contras in Nicaragua represented one of the most important priorities for the joint venture. "(5) The WackenhutCabazon joint venture maintained close liaison with certain elements of the United States Government, including representatives of intelligence, military and law enforcement agencies. "(6) Among the frequent visitors to the WackenhutCabazon joint venture were Peter Videnieks of the U.S. Department of Justice in Washington, D.C., and a close associate of Videnieks by the name of Earl W. Brian. Brian is a private businessman who lives in Maryland and who has maintained close ties with the U.S. intelligence community for many years. "(7) In connection with my work for Wackenhut, I engaged in some software development and modification work in 1983 and 1984 on the proprietary PROMIS computer software product. The copy of PROMIS on which I worked came from the U.S. Department of Justice. Earl W. Brian made it available to me through Wackenhut after acquiring it from Peter Videnieks, who was then a Department of Justice contracting official with responsibility for the PROMISE software. I performed the modifications to PROMIS in Indio, California; Silver Spring, Maryland; and Miami, Florida. "(8) The purpose of the PROMISE software modifications that I made in 1983 and 1984 was to support a plan for the implementation of PROMIS in law enforcement and intelligence agencies worldwide. Earl W. Brian was spearheading the plan for this worldwide use of the PROMISE computer software. "(9) Some of the modifications that I made were specifically designed to facilitate the implementation of PROMIS within two agencies of the Government of Canada; the Royal Canadian Mounted Police (RCMP) and the Canadian Security and Intelligence Service (CSIS). Earl W. Brian would check with me from time to time to make certain that the work would be completed in time to satisfy the schedule for the RCMP and CSIS implementations of PROMIS. "(10) The proprietary version of PROMIS, as modified by me, was, in fact, implemented in both the RCMP and the CSIS in Canada. It was my understanding that Earl W. Brian had sold this version of PROMIS to the Government of Canada. "(11) In February 1991, I had a telephone conversation with Peter Videnieks, then still employed by the U.S. Department of Justice. Videnicks attempted during this telephone conversation to persuade me not to cooperate with an independent investigation of the government's piracy of Inslaw's proprietary PROMIS software being conducted by the Committee on the Judiciary of the U.S. House of Representatives. "(12) Videnieks stated that I would be rewarded for a decision not to cooperate with the House Judiciary Committee investigation. Videnieks forecasted an immediate and favorable resolution of a protracted child custody dispute being prosecuted against my wife by her former husband, if I were to decide not to cooperate with the House Judiciary Committee investigation. "(13) Videnieks also outlined specific punishments that I could expect to receive from the U.S. Department of Justice if I cooperate with the House Judiciary Committee's investigation. "(14) One punishment that Videnieks outlined was the future inclusion of me and my father in a criminal prosecution of certain business associates of mine in Orange County, California, in connection with the operation of a savings and loan institution in Orange County. By way of underscoring his power to influence such decisions at the U.S. Department of Justice, Videnieks informed me of the indictment of these business associates prior to the time when that indictment was unsealed and made public. "(15) Another punishment that Videnieks threatened against me if I cooperate with the House Judiciary Committee is prosecution by the U.S. Department of Justice for perjury. Videnieks warned me that credible witnesses would come forward to contradict any damaging claims that I made in testimony before the House Judiciary Committee, and that I would subsequently be prosecuted for perjury by the U.S. Department of Justice for my testimony before the House Judiciary Committee." It is noteworthy that in January, 1992 when I obtained boxes of Michael Riconosciuto's hidden documents, included in those documents were handwritten pages of telephone numbers belonging to various Washington D.C. dignitaries. One number, "(202) 4260789" was listed as belonging to "PV," but it was no longer in service. ****** Danny Casolaro was, of course, intent on interviewing Peter Videnieks. A strange coincidence occurred during the week prior to his death. While sitting in a pub, having a beer, a man named Joseph Cuellar approached him and they began talking. At some point during the conversation, Danny disclosed the contents of his investigation and expressed a desire to interview Peter Videnieks. To Danny's astonishment, Cuellar, claiming to be a Special Forces operative, said he could arrange a rendevous between Peter Videnieks and Casolaro. Cuellar's connection to Peter Videnieks allegedly came through Videnieks' wife, Barbara, who was the executive assistant to the powerful West Virginia Democratic Senator, Robert Byrd. Byrd played a major role in the effort to have the CIA move some of its administrative offices to Charlestown, 20 miles from Martinsburg, on the Virginia border. It was apparently through Barbara Videnieks that Cuellar intended to arrange the interview. Casolaro confided to friends that he was unnerved by this supposedly chance meeting. He met with Cuellar at other times that week, but it is unknown whether he ever spoke with Videnieks. To date, that question remains unanswered. Significantly, Elliot Richardson, the respected former U.S. Attorney General representing Inslaw, called for the appointment of a special counsel to look into the death of Casolaro. CHAPTER 6 At Michael Riconosciuto's trial in Tacoma Washington, Peter Videnieks testified that while working for the Justice Department he had contact with the PROMISE software. He "conducted the competitive contract competitive procurement for acquisition of the services to implement PROMISE."Under cross examination he testified that "it required preparation of a request for proposals issuance of that document to industry ... negotiating, selecting, and awarding the contract. Then after award, administering the contract to see that the work that the government paid for was properly performed." So, essentially, Videnieks administered the Inslaw contract with the government. His employment record included work with the Internal Revenue Service as a revenue officer from 1964 to 1967. From 1967 to 1972 as a contract specialist with NASA. From 1972 to 1973 with Customs as a contract specialist. From 1973 through 1975 back at NASA as a contract specialist. From 1975 through 1981 as a contract specialist with Customs, supervisory at this time. From 1981 through September, 1990, with the Department of Justice as a contract specialist. And from September 1990 through present (January 1992) as a supervisory contract specialist at Customs again. Thomas Olmstead, Riconosciuto's attorney, showed Videnieks the Inslaw affidavit signed by Riconosciuto. Videnieks said he had seen the affidavit prior to court, but testified that he'd never heard of the WackenhutCabazon joint venture and never visited the WackenhutCabazon facility in Indio, California. He also testified that he'd never met Earl Brian. Olmstead asked Videnieks if he knew Robert Chasen [Executive Vice President of Wackenhut]? Videnieks testified that he knew him "by name since he was head of Customs for about a threeyear period, from about 1977 through 1980. I met him once in the line of my duties." Interestingly, according to his resume, Robert Chasen was Commissioner of Customs in Washington D.C. from 1969 to 1977, then Executive Vice President of Wackenhut from 1981 to present (1991). And Peter Videnieks, a contract officer at Customs in Washington D.C. from 1972 to 1974, then again at Customs from 1976 to 1981, said he did not know Robert Chasen. How could that be? Videnieks had worked in the same department with Chasen, off and on, for at least three years. Videnieks also testified that he met Chasen in the line of his duties sometime between 1977 and 1980. Yet, Chasen no longer worked at Customs between 1977 and 1980? Olmstead asked Videnieks to reiterate his position with the PROMISE software. "I worked on the [PROMISE] contract. ... The procurement was assigned to me by a lady named Patricia Rudd. ... My function was to conduct a competitive procurement, negotiate an award of contract, and then administer the contract." Olmstead: "What time frames are we talking when you were ...?" Videnieks: "We're talking about from the day that I reported for duty at Justice, which was in September 1981, through about 1985." Olmstead: "Are you familiar with Hadron Company?" (This was a loaded question because Earl Brian, who Videnieks testified he did not know, owned Hadron Company at the time of the court proceedings.) Videnieks responded, "Yes, I am." Olmstead: "Have you done work for Hadron Corporation in your procurement contract?" Videnieks: "I supervise currently a contract specialist who is administering a contract with Hadron." Olmstead: "Prior to supervising someone, did you personally handle that particular contract?" Videnieks: "I have administered well over a hundred contracts, maybe a couple hundred or several hundred over my career, and I don't recall whether I have or not." Olmstead: "And you have never given a deposition in regards to the Inslaw matter?" Videnieks: "My recall is not that good. Like I said, I have administered hundreds of contracts, and I may or may not have administered one with Hadron." Again Olmstead asked Videnieks if he knew Earl Brian?Videnieks responded, "No, sir." Olmstead: "Do you know who owns Hadron?" Videnieks: "I really don't. I've heard I mean, I don't want to speculate now. He may be an officer with Hadron. He may be." Olmstead: "You don't recall any questions in any depositions at all regarding that?" Videnieks: "I do recall questions along these same lines. But again, from general knowledge, I think he is an officer or has been an officer with Hadron." Olmstead: "In fact, in your deposition, you admitted you knew that he was an officer of Hadron, didn't you?" Videnieks: "I would like to see my transcript from my deposition as to what I said ..." Olmstead went on to question Videnieks about "Modification No. 12" of the PROMISE software. Videnieks stated that he knew what Modification No. 12 was, but repeatedly refused to discuss it until someone produced the original Inslaw contract. Finally, under pressure to give a general recollection, he said it dealt with the twelfth modification to the PROMISE software. Olmstead asked, "Were you personally chastised as a result of Modification No. 12 in the way you handled that?" Videnieks: "Please define `chastised.'" Olmstead: "Were you told that you took, converted, and stole six million dollars worth of Inslaw software through the way you handled Modification No. 12?" Videnieks: "A judge in the bankruptcy court ruled that. Since then the record was erased. And that language should not be the way a nonlawyer like me understands, it is no longer in existence ..." ****** It is necessary to digress here to disclose the magnitude of the apparent government coverup relative to Riconosciuto's case. About two weeks before Riconosciuto's trial began, I had received a call from Michael asking me to contact Brian Leighton, a former assistant U.S. Attorney in Fresno, whom Michael claimed to have provided information to. Michael was lining up his ducks. Essentially his defense rested on his ability to prove he worked for the U.S. government in intelligence operations, but his lawyer was behind schedule in making the contacts. Brian Leighton had been instrumental in prosecuting 29 members of a drug/arms organization called "The Company." The Company had been written up in the San Francisco Chronicle on April 28, 1982 under the heading "Story of Spies, Stolen Arms and Drugs." According to reporter Bill Wallace, The Company consisted of (quote) "about 300 members, many of them former military men or expolice officers with nearly $30 million worth of assets, including planes, ships and real estate." The article went on to say that "federal drug agents said the organization had imported billions of dollars worth of narcotics from Latin America, and was also involved in gunrunning and mercenary operations." Specialized military equipment consisting of nine infrared sniperscopes, a television camera for taking pictures in darkness, 1500 rounds of small arms tracer ammunition for night combat, a fivefoot remotecontrol helicopter, and secret components from the radar unit of a Sidewinder guided missile were stolen from the U.S. Naval Weapons Station at China Lake in the Mojave Desert. Federal agents said some of the stolen equipment was going to be used to make electronic equipment for drug smugglers and some was traded to drug suppliers in Columbia. Twentynine members of the Company were indicted by the Fresno federal grand jury in 1981. Amongst those indicated was Andrew "Drew" Thornton, 40, a former narcotics officer. On September 13, 1985, the Los Angeles Times published the story of Thornton's death, entitled, "Former Narcotics Officer Parachutes Out of Plane, Dies with 77 Pounds of Cocaine." The article said Thornton was indicted in 1981 for "allegedly flying a plane to South America for a reputed drug ring known as `The Company.'" In an interview with the Los Angeles Times, Brian Leighton said, "I'm glad his parachute didn't open. I hope he got a hell of a high out of that ..." Thornton's mysterious death was discussed at length in a book written by Sally Denton entitled, "The Blue Grass Conspiracy." Part of The Company was headquartered in Lexington, Kentucky. Prosecutors in Lexington, Fresno, California (Brian Leighton), and Miami, Florida were working together in a joint effort to bring down The Company. The San Francisco Chronicle noted that in January, 1982, Gene Berry, a state prosecutor in Charlotte Harbor, Florida, was shot in the face as he answered his door. Police subsequently arrested Bonnie Kelly as Berry's murderer. Bonnie's husband, Mike McClure Kelly, was a suspected member of The Company who later pleaded guilty in the Fresno, California case. In Michael Riconosciuto's documents, I discovered a letter dated March 24, 1982, written on Cabazon letterhead to Michael McClure at Hercules Corporation from Art Welmas, President of the Cabazon Band of Indians. Copies (cc:) were also noted to Marshall Riconosciuto and Michael Riconosciuto. The letter complimented McClure's competence in presenting a clear and lucid explanation of a power pack under development at Hercules. (Hercules was owned by Marshall Riconosciuto, Michael Riconosciuto and Patrick Moriarty, the Red Devil fireworks mogul. More on Moriarty later.) Throughout Michael's documents, I found references to Michael McClure and Bonnie Lynne G. Kelly. Michael's code word for Mike McClure was "Gopher." Journalist Danny Casolaro had been communicating regularly with Michael Riconosciuto and obviously learned about The Company. It is not to be overlooked that coincidentally or not, Ari BenMenashe (a former Israeli intelligence agent who lived in Lexington, Kentucky) told Bill Hamilton that two Lexington FBI agents had been enroute to meet with Danny at the Martinsburg Hotel on the day of his death. The Company was headquartered in Lexington. Danny was not meeting with the FBI relative to PROMIS, he was preparing to turn over drug trafficking information on The Company. BenMenashe further told Hamilton that one of the agents, E.B. Cartinhour, was angry that the Justice Department was not pursuing Reagan administration officials for their role in the October Surprise. ****** Meanwhile, it was necessary to contact Brian Leighton to corroborate Riconosciuto's story that he had been instrumental in helping Leighton identify members of The Company. I did not directly contact Leighton, who had resigned from the U.S. Attorney's office shortly after the prosecutions and entered into private law practice, but asked the Secret Service agent in Los Angeles who had visited my home regarding the "Queen's accident" in Mariposa(mentioned in the first chapter of this book) to run a check on Riconosciuto. Instead, he called Brian Leighton and when I checked back with him, he acknowledged talking to Leighton about Riconosciuto. Leighton confirmed to the Secret Service agent that he recalled a threehour facetoface meeting with Riconosciuto and remembered him well. He gave specific details of Riconosciuto's cooperation with the U.S. attorney's office. I thanked the Secret Service agent and hung up. I next contacted a retired police officer and colleague in the Mariposainvestigation, and asked him to put me in touch with someone trustworthy in government who could corraborate Leighton's information. The contact was made and this individual agreed to call Brian Leighton to see if he could glean further details of Michael's cooperation with the U.S. attorney's office. For purposes of anonymity, this source will be identified as "R.J." When I checked back, he confirmed that Leighton did indeed remember Michael's help with the case and, in fact, said Michael led law enforcement officers to a marijuana cache belonging to members of The Company. At that point I was satisfied that Michael had been operating within the framework of The Company and had spoken accurately about his cooperation with Brian Leighton. I called Thomas Olmstead, Michael's attorney, and related the above information. Two weeks later, on January 15, 1992, at Michael's trial in Tacoma, Washington, Brian Leighton testified that the case in question involved the theft of military equipment from the China Lake Naval Weapons Center in California. "The FBI and Naval Intelligence Service began the investigation," he said, "and there were several people that were targets of the investigation. One of those targets began cooperating with us and then it became a DEA and FBI investigation. The thefts occurred in 1979 and 1980, and the case continued on for a couple of years." Leighton testified that he "could not recall ever meeting personally with Mr. Riconosciuto and he didn't know if he spoke to him personally or spoke to him through a government agent." Under crossexamination, Leighton testified that he thought Riconosciuto was brought to him by an agent Barnes from the Oakland or San Francisco office of the FBI, but he couldn't remember exactly ..." After Leighton's testimony, Michael called me and asked, "What happened?" I was astonished at Leighton's testimony. What was at stake here? Michael speculated that Leighton was operating out of fear. He said Leighton retired from the U.S. Attorney's office shortly after prosecuting members of The Company, and recalled that the prosecuting attorney in Florida had been shot in the head. I called the Secret Service officer and R.J. individually and asked them to repeat what Leighton had told them before the trial. They both repeated verbatim what Leighton had told them the first time about Michael Riconosciuto. I said it appeared Leighton had perjured himself in court. Neither could understand why? ****** In August 1994, I received from a friend of Bill Hamilton's (President of Inslaw) a Declaration, signed by Hamilton, which stated that " ... On or about April 3, 1991, I spoke by telephone with Mr. Brian Leighton, an attorney in private practice in Fresno, California. He stated that during the early 1980's, while serving as an Assistant United States Attorney in Fresno, California, he had investigated a nationwide criminal enterprise known as `The Company,' which was engaged in illegal drug trafficking on a massive scale. "Mr. Leighton told me that (A) Michael Riconosciuto had furnished Mr. Leighton `valuable intelligence' on illegal drug activities and The Company; (B) Mr. Leighton had been unable to use the information in prosecution but (C) the failure to use Mr. Riconosciuto's intelligence information was not because of any fault of Mr. Michael Riconosciuto." Also mentioned in the affidavit was corroboration of Riconosciuto's work in the defense and national security fields. Section six of the affidavit noted that during the course of a telephone conversation with Robert Nichols on or about April 18, 1991, Hamilton learned that Nichols had attended a meeting that had been organized by a Colonel Bamford, an aide to General Meyer, then Chairman of the Joint Chiefs of Staff. Others participating in the meeting were department heads from Department of Defense scientific facilities. Michael Riconosciuto was the principal presenter to this group of seniorlevel national security research and development officials. According to Nichols, Riconosciuto made a day long presentation to this meeting of scientists lasting from approximately 9 a.m. until approximately 4 p.m., answering questions from the participants and filling the halls of the conference facility with his handprinted notes on the scientific and technical issues that arose in the course of his presentation. I was able to locate in Riconosciuto's files, a letter written on July 20, 1983 from Tom Bamford, Vice President of Research and Development at FMC Corporation in Santa Clara, California to William Frash in Escondido, California. At that time, Frash, a retired USMC Colonel, was Chairman of the Board and Chief Executive Officer of Lilac Corporation. Essentially, the letter expressed enthusiasm for the potential application of technologies being proposed to FMC Corporation by Meridian Arms, and called for a list of all active participants in the joint venture. At that time Riconosciuto was vice president of Meridian Arms. Bamford added, " ... You may want to do this only for Mike at this stage." Frash hastened to respond to Bamford on July 27, 1983 to apprise him of a meeting between himself and Michael Riconosciuto, Robert Booth Nichols, Peter Zokosky and Patrick Moriarty (Michael's father's business partner) regarding "energy transfer phenomena." A proposal was underway to outline technology in the form of patents applied for jointly between Meridian Arms and FMC. Frash noted that the technology would "supercede all existing world patents in the field." "Had we patented previously, it would only have announced our `edge' in the field," he wrote. Three of the four major patents that would be forthcoming were (1) the application of Perturbation Theory to enhanced energy transfer, (2) the application of stationary methods with powders and aerosols to enhanced energy transfer and (3) the application of Perturbation Theory to hydrodynamic flow regimes. It is noteworthy that the submarine propulsion system depicted in the movie, "Hunt for Red October" utilized this theory. Frash concluded, "Tom, as you well know, Mike's tried and true value is in the field of high voltage and electrostatics and their application. The meetings in San Jose highlighted application of this technology in over one hundred areas that are inhouse FMC." He added, " ... Per your reference to meetings in Washington, D.C., I assume the meetings with Dr. Fair, Admiral Renkin and the ACCOM people will suffice in this matter. In closing we are very enthused, Tom, and we look forward to an expeditious closing. Sincerely, William Frash." Frash's payment for putting together the above referenced joint venture, if successful, would be $500,000 for the first fifteen million invested, or $166,666.66 for only five million invested, a onehundredthousanddollar per year salary for a period of 20 years, and a 2% share in the gross profits. This, according to a Letter of Understanding sent to and signed by Robert Booth Nichols and Michael Riconosciuto in July, 1983. In questioning Michael Riconosciuto about the FMC agreements, he said he attempted to break away from Robert Nichols in 1984. "The guy nearly got me terminated," declared Riconosciuto. "At the time I was working with Nichols on a proposal to FMC Corporation, which is Food Machinery Corporation, they produced the Bradley Personnel Carrier. I've got a complete papertrail on the technology that was being presented. We conducted a test demonstration of an enhanced airfield device which I developed. We also conducted a test of a hydrodynamic implosion type of explosive device. "The implosion device settled the Nevada Test Range by about 30 feet. The Lawrence Livermore Labs and the Gallup Ordinance people built a prototype of the device, but they overbuilt it because they wanted an impressive demonstration. It created an international incident because the demonstration was picked up by Soviet monitoring satellites. "Anyway, the bona fides were established. The next thing was to get the business done and get me into harness in a program. I was all for it, but Bob [Nichols] started getting spooky on me. He wanted to receive the setup of our end offshore, in Singapore. He wanted to receive $20 million dollars in cash in Singapore, and he wanted to use certain of the technology overseas, namely in Australia, OK? "Bob started drinking a lot. He was obviously under a lot of pressure from somewhere, and his fascade of respectability started to crack. About that time Bob began pressuring me to do things a certain way. We'd already been approved at the executive level by FMC. But we still had to go through the legal department and FMC is a publicly held stock corporation. So we still had to go through the shareholders for about eight months, which put us about a year away from consummating the deal. "So, I asked Bob for some extra money to meet my everyday expenses, but Bob said, `Hurry up and get the business done and then you'll have plenty of money.' I tried to explain to Bob that there was no way he could expedite this thing, and so on and so forth. Well, Bob became really overbearing. And that's when he demanded that I state things in the contract proposal to FMC which would have been misstatements, to the point of being illegal. That's when I started having second thoughts about it. "There were other people involved in the development of that technology. Bob wanted me to pay him out of my share and make no reference to the other people in the agreement. But when you've got the University of California and the University of Chicago having 16 percent of your company, having 16 percent of Hercules Research and Interprobe, you know, how could I misrepresent the interests of my dad, Moriarty and [Admiral] Al Renkin in a deal with a U.S. publicly held corporation [FMC]? "At that time, Riconosciuto had been Vice President of Meridian Arms, a subsidiary of Meridian International Logistics. But he was also technical advisor for F.I.D.C.O. (First Intercontinental Development Corporation) of which Nichols was on the Board of Directors. Noted Riconosciuto, "I walked into F.I.D.C.O. in equal good faith. And that also turned sour because Bob wanted me to illegally take embargoed technology out of the United States, to run an operation with embargoed armaments and high technology outside of the United States. "So I walked out on Bob. And Bob put the heat on me and they wouldn't leave me alone. When I got remarried [to Bobby Riconosciuto], they continued to harrass me by putting out false intelligence reports on me to law enforcement ..." I asked Michael why he didn't fight back? Michael responded, "You don't seem to understand. All my involvements were under closely controlled situations. There's only one time in my life when I was planning on doing something offcolor, and it never went anywhere. All the rest of the time, everything was under complete controls. I never took any elective actions. Everything was, you know, on direct orders. And I got to the point where I balked with Bob Nichols and that's when he went ballistic on me." Riconosciuto said he was in the process of cleaning up his life in Washington state when a private investigator from Inslaw contacted him. "I didn't want to get nailed for piracy of that software, so I talked to my attorney, who talked to the Inslaw attorneys, and I gave them a declaration. And about that time, Peter Viedenieks, who was an associate of both Robert Booth Nichols and Dr. John Nichols, called me and told me I was my own worst enemy. He said if I didn't cool it, if I didn't stonewall any further requests for information from the House Judiciary Committee, I was going away forever. I told Viedenieks that I was already in too deep, and he repeated that `I was my own worst enemy.' Seven days later I was arrested on drug charges." ****** Ted Gunderson was one of the few "cooperating" witnesses at Michael's trial. Through his affidavit and testimony, Ted hoped to supply the defense with needed corroboration of Michael's covert government sanctioned activities. Unfortunately for Michael, Ted could not disclose numerous activities which had included Robert Booth Nichols. At one time Gunderson, Nichols and Riconosciuto had been inseparable, like the three musketeers. But, Nichols was currently under investigation by the Los Angeles FBI for alleged involvement in organized crime in the U.S. and abroad. Fortunately, however, Gunderson's resume added credibility to the provocative affidavit he entered into court on Michael's behalf. He had been Senior Special Agent in Charge (SAC) at Los Angeles FBI headquarters from 1977 to 1979 when he retired from the FBI and went to work as chief investigator for F. Lee Bailey, Esq. Prior to that, from 1960 to 1965, Gunderson was Special Agent Supervisor at FBI headquarters in Washington, D.C.. Interestingly, amongst a prestigious list of positions nationwide, he was also SAC from 1973 to 1977 in Dallas, Texas (where he became friends with Clint Murchison, Jr., according to his livein partner, J.M.. J.M. stated in phone interviews that she and Gunderson attended parties with Murchison in Dallas, and Gunderson phoned him often from their Manhattan Beach home). In 1979, Gunderson received the Alumni Highest Effort Award in the Field of Law Enforcement from Sigma Alpha Epsilon Social Fraternity at the University of Nebraska. In 1979, he also received the Distinguished Alumnus Award from the University of Nebraska in recognition of distinguished and devoted service to his country. Gunderson's handwritten affidavit, submitted to Michael's lawyer on September 27, 1991, read as follows (excerpted): "I, Ted L. Gunderson, make the following free and voluntary statement. No threats or promises were made to get me to make this statement. I was born 11/7/28 at Colorado Springs, Colorado. "In early 1986, I met one Ralph Olberg through a friend of mine, Bill Sloane. Sloane is a former official with HUD. Sloane was appointed by President Ronald Reagan to the HUD position after the president was elected in 1980. "Olberg is a prominent American businessman who was spearheading procurement of U.S. weapons and technology for the Afghanistan rebels. "In late Spring or early summer of 1986, Ralph Olberg, one Tim Osman, Michael Riconosciuto and I met in a room at the Hilton Hotel, Ventura Blvd., Sherman Oaks, California. I accompanied Michael Riconosciuto, and Osman and Olberg were together. We were there to discuss Olberg's role with the worldwide support network involving the Mujahaden, Afghanistan Resistance Movement against the Soviets. "In particular we discussed the ability of the Mujahaden's willingness to field test weapons, new and esoteric in the field and to return a research report, complete with photos. "We also discussed the capture and/or defection of high ranking Soviet military personnel who had sensitive compartmentalized information and the availability of their briefings. We discussed one person who was a Soviet defector and was a communications officer who had detailed information of the highest levels of Soviet military C3I (Command Control Intelligence and Communications). "We also discussed the Soviet directed weapons system referred to in the conversation as `Blue Death.' Michael and I were told by Olberg that witnesses stated the corpses did not decay even after being exposed and unburied for six months. "We discussed the possibility of Michael analyzing one of these units captured in the field by the Afghan rebels for the purpose of having Michael help their technical experts develop effective countermeasures. "We discussed a military joint venture in Turkey to produce specialized ammunition. We discussed a lobbying effort to legally obtain Stinger II missiles as well as the various Stinger post and Stinger alternates. Michael was to formulate a plan to sanitize the electronics of any Stingers that would be at risk of Soviet capture so any information gained from a captured Stinger could not be effectively used against the U.S. or NATO forces. "This report was to be presented to a Congressional position as support for the lobbying effort to convince Congress to legally sanction the shipment of these missiles to the Afghan rebels. "We discussed Michael's proposed modification of Chinese 107 MM rockets and how to reconfigure the package into a backpack portable effective artillery counter battlery system. "We discussed Michael's connection with the Chinese weapons position, Norinco, to provide the basic components for the unassembled rocket system. We discussed the modification and assembly of these 107 MM rockets and their launchers at a facility in Pakistan known as the Pakistan Ordinance Works. "It was my understanding from the discussion that we were working on a legally sanctioned arms assistance project to the Afghan rebels and that Ralph Olberg was working through the Afghan desk at the State Department as well as through Senator Humphreys office. "This was subsequently confirmed by journalist Danny Casolaro who was recently `suicided.' "Olberg indicated a potential turf battle problem with certain factions of the CIA and his group MSH (Management Science For Health). In negotiations and/or lobbying efforts with Congress, the CIA MSH people were arguing that Ralph and Tim Osman's group did not truly represent the leadership of the Afghan rebel resistance. "Tim and Ralph proposed calling their people and having an unprecedented leadership meeting in Washington D.C. to prove that their group did in fact represent the full leadership of the Mujahaden. "When I recently called Ralph, he denied that the above meeting had taken place and then after prodding, he finally admitted to it and he asked me not to talk about it. This five page statement is true and correct to the best of my knowledge. Ted L. Gunderson." ****** Later in my investigation, I obtained from Michael Riconosciuto's files in the desert, a handwritten note from "T.G." to "Michael" which read as follows: "Raymond is arriving at LAX 7:55 p.m. Air Canada via Flight 793 from Toronto. Will have to go through Customs. This will give us another member for our drug/arms operation." The note gave a telephone number where "T.G." could be reached. "Raymond," referred to in the note, is presumably Raymond Lavas, Gunderson's former forensic's expert during his tenure in the FBI. ****** Michael's trial was not going well. He called and asked me to contact R.J. and bring him to my house. Michael was ready to talk he wanted me to set up a phone conversation in which he could preliminarily open negotiations for entry into the Federal Witness Protection Program. I was out of my depth here. I had no idea whether R.J. would cooperate with such a request. Nevertheless, I called him and related Michael's proposal. He said he had no authority to approve such a request, but he would take the information and pass it along. He arrived at my home early the following week and Michael called as scheduled. Excerpts from that first taperecorded conversation went as follows: (Michael did most of the talking) " ... In the Fresno area, there was a group of people known as the Fresno Company, and the Bernard brothers were involved in it and Jamie Clark was involved and all of these people seemed to have charmed lives ... "The Company was originally out of Lexington, Kentucky and Mena, Arkansas. Brian Leighton was the assistant U.S. Attorney who was the most effective person in formulating a strategy in the Justice Department to go after these people. "We recognized what they were, for what they were, at that time, and there were a few ATF guys down in Los Angeles that recognized them for what they were, OK? Here was a group of over 300 people, most of them exlaw enforcement and exmilitary, exintelligence people involved in a major drug and smuggling operation. And they were involved in compromising activities. The bottom line was espionage. "And all Leighton served to do was vaccinate the group against further penetration. Just hardened them. And all the major sources that were developed from inside turned up dead. A federal judge in Texas turned up dead. " ... This is a nasty bunch of people. And they're still alive and well. Now where that dovetails into my current situation, is in 1984 I was involved with Robert Booth Nichols who owns Meridian Arms Corporation and is a principle in F.I.D.C.O., First Intercontinental Development Corporation. The CEO of FIDCO is George Pender and Bob Maheu was Vice President ... "FIDCO was an NSC [National Security Council] corporate cutout. FIDCO was created to be the corporate vehicle to secure the financing for the reconstruction of the cities of Beirut and Damour in Lebanon. And they were working out of an office in Nicosia, Cyprus. " ... And here I got involved with a group of people that were all high profile and should have been above reproach. FIDCO had a companion company called Euramae Trading which operated througout the Middle East. I came in contact with the PROMISE software (unintelligible). Euramae had a distribution contract with several Arab countries and I was asked to evaluate the hardware platforms they had chosen. That was IBM/AS400 stuff ... " ... That had come from IBM Tel Aviv but it came through a cutout, Link Systems, because they couldn't deal directly with the Arabs. "And I came across a guy named Michael T. Hurley and I thought he worked for the State Department but it turned out he was incountry attache for the DEA in Nicosia, Cyprus. [Nicosia is the capital of the island of Cyprus, off the coast of Lebanon]. Now, the DEA had no real presence in Lebanon. Neither did anybody else, including the Israelis. They had their usual network of contacts but it was very ineffective. The only way to penetrate that situation, was to get into the drug trade. "Euramae got into the drug trade and I was told that it was a fully sanctioned NSC directed operation, which it turns out that it was ... All those operations were bonafide and all the people who were in them were definitely key government people, although they were not who they said they were. "They all worked for different agencies other than was stated. Probably part of the normal disinformation that goes with that. And I was technical advisor for FIDCO and we had auspices through the government of Lebanon to get in and out of Lebanon. "But as far as going to the eastern part of Lebanon, unless you were connected with the drug trade, your chances were slim coming out unscathed ... They built a network throughout the Bekaa Valley, and [Robert Booth] Nichols ... he is under Harold Okimoto from the Hawaiian Islands. "Harold Okimoto was represented to me as being an intelligence person, which he is. He has worked under the auspices of [Frank] Carlucci for years. [Carlucci was former CIAdeputy director and former Defense secretary]. Apparently Harold performed services for the U.S. government during World War II. He's of Japanese ancestry. I guess he was rewarded for services well done. " ... Harold operates through a company called Island Tobacco Corporation. He has contracts for all the condiments at all the casinos in Atlantic City, in Reno, in Vegas, in Macao, China ... he's got contacts in Honolulu, the Orient ... a couple of Jews he knows in Bankok ... and there is a casino, no a city about 15 miles north of Beruit that Harold has his fingers in. "When FIDCO was wheeling and dealing on financing for the reconstruction of the infrastructure of Beirut, they were making sweetheart deals with Syrian mobsters and the brother of the president of Syria, Hafez Assad. " ... The intelligence people in their infinite wisdom decided to capitalize on the longstanding battle between Rifat Assad and his group and the Jafaar family. Selectively they were backing both people, but they were also playing them off against one another, developing networks. They got a bunch of prominent Syrians thoroughly compromised and they were in tow in the intelligence game. And they had people that could get me in and out of the Bekaa Valley, even out of certain areas of Syria. "From an intelligence standpoint, it was a success. But to maintain the credibility of those intelligence operations the heroin had to flow. To make it real. And the stuff was starting to accumulate in a warehouse outside of Larnaca. "I personally was in a warehouse where Hurley and George Pender and George Marcobie (phonetic spelling) told me there was upwards of twentytwo tons. And even though it was packaged for shipment, the smell of it in that closed warehouse was overpowering. You know, white heroin like that has a certain odor because of the way it's processed. "They had authorization for what they called `controlled deliveries' into the United States. And they would target certain cities and then follow the stuff out, ostensibly unmasking the network and conducting prosecutions. "However, the operation became perverted at the U.S. end of the pipeline. Controlled heroin shipments were doubled, sometimes tripled, and only one third of the heroin was returned to the DEA. "At a certain transfer point at the airport in Larnaca, the excess baggage from the original controlled delivery would be allowed to go through. I was given the names of the narcotics people who were handling that. But there were a couple of agents who were on the up and up, and they had suspicions. "An intelligence agent who worked with DIA is now deceased. His name was Tony Asmar and he got on to the operation early on, and started going toe to toe with Hurley [DEA]. He died in a bomb blast and it was ascribed to terrorists. And it actually was terrorists who did it, but his cover was deliberately blown. Myself and others suspected Hurley and Bob Nichols and Glen Shockley were responsible for that ... " ****** After researching Michael Riconosciuto's information, R.J. noted to me that Michael gave mostly valid information, but he could not prove that Michael had been involved. He did, however, verify (through Customs) that Michael HAD been in Lebanon, but he could not verify the details of the drug operation. Michael responded (on a taped message to R.J.) by visually recounting the DEA apartment/condo in Nicosia, Cyprus: "The DEA had a condo, I think it was on Columbra (phonetically spelled) Street, in Nicosia, Cyprus [off the coast of Lebanon]. "They had a ham radio station there. It was an ICOM single side band amateur radio setup, with a linear ..." "Were you actually there?" I asked. Michael quipped, "Yes, I was there," then continued. "I can describe the antenna system, on the top floor and the way it's wired up and everything. Unless you were there, you wouldn't know it was ICOM equipment. "Now, the game plan with Euramae and Hurley's operation ..." Pause. " ... You need to understand that the airport in Lebanon was closed down. I took the ferry from Larnaca to Jounieb. Now Jounieb was slightly south of where the casino city was and the casino city was intact. Beirut was a nightmare, and so was Damour, because the PLO destroyed the infrastructure by burrowing bunkers, and there was no water, electricity or phones. It was a combat zone. "The Syrian mob controlled the Casino du Liban in a little city north of Beirut. It was used as a front by narcotics people. Island Tobacco, owned by Harold Okimoto, sells all the cigarettes there. Now, I could give you the names of the families. They pitted them off against one another. F.I.D.C.O. was to finance the reconstruction of the infrastructure of the cities of Beirut and Damour. Deals were cut as to who got what concessions. There were certain families, like the ElJorr family that had to be placated. And there was Rifat Assad and his group. "Tony Asmar figured out what was going on with Hurley, that they were shipping `noncontrolled' loads of heroin back to the U.S.. They killed Tony ..." "What were the names of the people you were working for over there?," I asked. Michael's time was always limited on the phone. "Ok, there was a man named Maurice Ganem. He had a relative, either a brother or a cousin, who is a senior DEA official with Michael Hurley. I can't remember his name right now. Anyways, Maurice was agency, you know, in country, in Lebanon. And Maurice and I and George Pender worked together." "Which agency? CIA or DEA?," I asked. "CIA." Michael continued. " ... And then there was Danny Habib. Danny Habib and Bob Nichols worked out of Cario (phonetic spelling) and Italy." "And Bob was NSA or ..." "No, Bob was NSC at that time." "George Pender and Bob Clark were the high level contacts on all of this. Bob Clark got drummed out because he was clean. And McFarland then took over, OK?" "Uh huh." "So, it was George Pender and McFarland and Michael McManus[Assistant to President Reagan at the White House]." I asked, "What was your involvement with that particular operation?" "I handled communications protocol. All the communications and financial transactions. If I could get my records on line I could show all the money flows, everything." ****** Michael called back later that day and we continued our conversation. He was intent on talking to someone in FinCen (Financial Crimes Enforcement Network). " ... The keystone cops are working on my defense. You know it's really an ordeal. Have you talked to R.J. again?" "No Mike, he's not giving much information." "Listen, tell him that not only am I willing to polygraph, but I need some expert help and I think he needs some expert help. In the league we're playing in, the only guys we can get that have the wherewithall are with FinCen. That stands for Financial Crimes Enforcement Network. Get me a technical guy that speaks my language." "Alright, Mike ..." "I'm talking about Swift Chips. That stands for Clearing House Interbank Payment System, Ok?" "Right." "Im mad, OK?" "Uh huh." "I'm real mad. The government has all my files and records. They've got all of my optical storage disks. Each of those optical storages, 130 of them, contains 20,000 plus pages. They jacked me around so bad ..." "Mike ..." " ... Get an expert that speaks my language, and I'll tell him everything I know and he can do so much damage, they won't need my testimony or anything else." "Mike, everything you know about what?" "Tell R.J. it goes all the way back to the Cayman Islands and the Bahamas and Castle Bank. Norm Caspar ... Resorts International Bank ..." "How'd you get this stuff?" "I handled the money for them, OK?" "For who?" " ... For the Wackenhut people. For Norm Caspar who was a Wackenhut employee during all of this. Now, there was the Workers Bank in Columbia. I can't pronounce the Spanish name for it, I just know it as Workers Bank. I set up their virtual dead-drops ..." "What's that?" "It's a way to get around A.C.H. reconciliations on a daily basis. It'll take an expert, you know, I can't even talk to a normal human being about this ..." "O.K." " ... And the bottom line here is Bob Nichols and Gilbert Rodriguez, Michael Abbell, whose now an attorney in D.C., but he was with the criminal section of the Justice Department and Harold Okimoto, and Jose Londodo, and Glenn Shockley are all in bed together. (Three years after this conversation, Michael Abbell was indicted for laundering money for the Cali Cartel). "Now Ted Gunderson ..." "Mike, have you got any paperwork on that?" "Now, wait a minute. Gunderson was physically with me when Wayne Reeder, Peter Zokosky and his wife and several of Wayne Reeder's lieutenants, Bob Nichols and his wife, Harold Okimoto, George Pender, Deborah Pender, Dill Pender, and myself were all together ..." " ... Where?" " ... At Wayne Reeders country club, golf club, in Indio, California. And Bob discussed openly in front of Ted Gunderson and myself and everyone present bragged about Glenn Shockley and Jose Londono having 3,500 soldiers. It's now almost double that ..." "What does that mean? What are the soldiers?" Mike: "R.J. will know what it means." "Alright. OK." "This took place in 1983. I have correspondence on the things we were doing. But I was in fear of my life because Bob was starting to act irrational. The guy was getting drunk all the time, waving a gun out of the car window, shooting in the air, you know, just really doing a mind trip on me. I've been on the run ever since ..." "Listen, Mike, what do you need from FinCen?" "If I had help from the FinCen people, I could reconstruct my files. Tell them that I need two types of computers. I need a VAX 11730 set up with two RLO II disks; one RA80 and a TU80 tape drive. That's one package. And then I need a VAX 3900 computer. Now the reason why I need the older, slower VAX and I know where to get all this stuff, no problem, I've got the VAX's in Southern California, but I need a place to set them up and somebody to operate them, and just follow my instructions." "Alright." "Now, the VAX Series 3900 machine ... it's too complicated to go into what mass storage devices, but those are the two levels of machines I need. "Ok, I'm thinking about going to visit your wife in Southern California, do you want us to bring those computers up here?" "No, No! No, leave them where they're at. Tell R.J. to find someone at FinCen. If we move them around, we're going to wreck them. I'm not trying to talk down to R.J., but this is too far above him." "Mike, Raymond Lavas turned some of your disks over to the Jack Brooks investigative committee (House Judiciary Committee on Inslaw)." "Yeah, I know. There's no data on those disks. What that is, is that is a subset of VAX B.M.S., OK? What I do is I modify some of the VAX BMS routines to activate a one time pad encryption scheme. That's why I have to have two RLO2 drives on the VAX 11730, because one RLO2 Platter is a system planner, the other one is the one time pad. The data is on a 1625 BPI 9 track tape on the TU80 tape drive. That's the system configuration." "If you say so." "Now, R.J. needs to put me in touch with somebody he trusts at FinCen. There's about 120 experts there. There are a few guys there that speak my language. "What's the encryption key?" "Well, they're ten digit numbers ... it's a one time pad, but it has a pseudorandom, prime number expansion system ..." "Mike, do you have access to PROMISE through this system?" "What? Oh, I've got access to PROMISE, I've got access to FOIMS ..." "Well, PROMISE is the one that's going to get you off the hook in court." "Ok, I understand that. But PROMISE and FOIMS are one and the same. Now they will say no, that's not true, but in Virginia where the FBI has their center, and where the Justice Department has a center in D.C., they're both Amdahl mainframes, OK?" "Yes." " ... You see, I want that RLO II Platter out of the hands of the Brooks Committee and into the hands of somebody who'll do with it what I tell them to do. I don't want somebody to run it up without first getting my instruction." "Does it have to be that particular one?" "Yes, either that or it will take me six months to rewrite the subset. They want me to give them the codes to unravel everything. If I did, they wouldn't know what to do with it anyway. They'd make a mess out of things." "Mike, what are you going to provide to FinCen?" "I'm going to show them how these boys handled the life blood of the cash flow on a day to day basis. I'm going to unmask the whole operation ..." "Anything specific on Robert Booth Nichols?" Mike: "Nichols is Harold Okimoto's godson. He's also Renee Hanner's (phonetic sp.) boy, and Wolfgang Fosog's (phonetic sp.) boy." " ... And who are they?" "The FinCen people will know. There's also Octon Potnar " "Alright. Well, if I'm going to play around with this, I don't want to be in the dark ... I could end up like Danny. I've got to know what I'm dealing with ." "If you get the right guy at FinCen, he'll jump at this, OK? We've got to start right now. We're talking about some time getting things up and rolling to where we're fluid and flexible and functional in their system internationally. They'll be able to watch the daily transactions ..." ****** Michael continued to request of R.J. that he be connected with someone "trustworthy" at FinCen, to no avail. He also requested to be placed into a Witness Protection Program, again offering to assemble his computer equipment in a secret location and provide FinCen with a day by day view of Mob (and MCA Corporation) illegal banking transactions. According to Michael, before his arrest, he had been handling gold transfers, money laundering, "virtual dead drops," altered ACH daily reconciliations and other transactions for various underworld figures including Robert Booth Nichols, Harold Okimoto, George Pender, Wayne Reeder, Michael A. McManus, Norm Caspar, Gilbert Rodriguez, Jose Londono, Glen Shockley, and others. Michael continued to call and give me taperecorded (at his request) messages to pass on to R.J. The man accepted the messages, but they just went down the big, black hole and never emerged again. One message in particular later became significant to me. The message from Michael to R.J. went as follows: (Quote) "There are three dozen C130's down at the Firebird Lake Airstrip on the Gila Indian Reservation in Arizona. Check out J & G Aviation, it's an FBO. The Fresno Company is alive and well down there. "The real activity is not at Mirana, it's at Firebird Lake Airstrip. Other airlines operating at Firebird are Beigert, Macavia International, Pacific Air Express, Evergreen and Southern Air. "Question to R.J.: How much cocaine or heroin can be transported in a C130? Do you want the C130, or do you want the guys who orchestrate it? "Do a matrix link analysis, then sit down and pick the targets. Otherwise, you will tip off the others and the proof will dry up. " ... Brian Leighton made 29 arrests out of five hundred within the Fresno Company. All Leighton succeeded in doing was to `vaccinate' the Fresno Company against further penetration." Riconosciuto said he had a fragile window into this organization (The Company), but Leighton and others were causing the window to close by being too public about their investigation. The message continued regarding Robert Booth Nichols: "Bob Nichols runs Glen Shockley. Glen Shockley runs Jose Londono. I [Michael] sat with Bob Nichols and Mike Abbell. Bob handed him $50,000 cash to handle an internal affairs investigation that the Justice Department conducted which would have led to the extradition of Gilbert and Miguel Rodriguez and Jose Londono. "Bob Nichols told me [Michael] that it was necessary to `crowbar' the investigation because they were `intelligence people.' "Michael wanted to hand The Company and Bob Nichols over to FinCen in exchange for entry into the Witness Protection Program, but nothing was forthcoming from R.J. It was two years before I learned who Mike Abbell, Gilbert Rodriguez and Jose Londono were. Abbell had worked in the criminal division of the Justice Department, according to Bill Hamilton. Hamilton added that, to his knowledge, Abbell had left the DOJ in 1982 and went directly into the Bogota, Columbia law offices of Kaplan and Russin. A member of our loosely coalesced investigative team, George Williamson, a former San Francisco Chronicle reporter, obtained Abbell's background from library directories: From 1973 to 1979 Abbell was staff assistant to the Assistant U.S. Attorney General. From 1979 to 1981 he was the Director of the Office of International Affairs of the Criminal Division of the Department of Justice. After leaving the Department of Justice in 1982, Abbell became counsel at the law firm of Kaplan, Russin and Becchi, with offices in San Francisco, California Bogota, Columbia Santo Domingo in the Dominican Republic Bangkok, Thailand Tapai, Taiwan New York Madrid, Spain and Miami, Florida. As of this writing, Abbell was listed as working in his own firm with a partner named Bruno Ristau (Ristau and Abbell) in Washington D.C. Ristau was also formerly with the law firm of Kaplan, Russin and Becchi. And from 1958 to 1963 he was an attorney in the Internal Security Division and Civil Division of the Department of Justice. He was also with the DOJ from 1963 to 1981 where he was Director of the Office of Foreign Litigation. Ristau speaks German, Polish, Spanish and French. He was Chairman of the Division of International Law of the Washington D.C. Bar from 1971 to 1973. In the American Bar Association from 1981 to 1984, he was Chairman of the Committee of Private International Law Practice. He is also a member of the American Society of International Law. Ristau is obviously a heavyweight in the field of international law. A TIME magazine article, dated July 4, 1994, described Gilbert Rodriguez as a "leader of the Cali [Columbian drug] cartel, which controls 80% of the world's cocaine trade." The newly elected president of Columbia, Ernesto Samper Pizano, was accused of taking $3.7 million in campaign funds from Rodriguez, which in effect, put Samper in league with Columbia's drug lords. Three audio tapes of conversations between Rodriguez and Samper's campaign manager, Santiago Medina, had been handed over to U.S. State Department officials before the election, but nothing was done. DEA officials were furious, stating to TIME that "No one did anything. They [the State Department] allowed this travesty to take place. Everybody, including the U.S. government, is participating in this coverup." The State Department responded, "We can't interfere with elections." I pulled out a book from a dusty corner of my library entitled, "Cocaine Politics" by Peter Dale Scott and Jonathan Marshall, and looked up the name Gilbert Rodriguez. On page 83, Gilberto Rodriguez Orejuela and Jose Santacruz Londono were mentioned as part of the early leadership of the Cali cartel. On page 88 it was noted that the "Calibased Ocampo and Gilberto Rodriguez had been the principal targets of a major DEA Centac investigtion that resulted in indictments of Rodriguez in Los Angeles and New York in 1978." At that time, President Jimmy Carter's Human Rights foreign policy in Latin America distanced the CIA under Stansfield Turner (later a Wackenhut Board Director) from any deathsquad interdiction. The Carter administration was also reportedly reluctant to go after Ocampo because of its determination in 1977 to sign a Panama Canal treaty with General Torrijos, even though Torrijos and family members were heavily involved at the highest levels of the world cocaine trade. The Cali cartel, described in a 1983 Customs report, laundered its profits through Miami banks, one of which was Northside Bank of Miami, owned by Gilberto Rodriguez. Rodriguez popped up again as the leader of a delegation to the "cocaine summit conference" in Panama City in the early 1980's. Yet, Rodriguez's name was subsequently removed from DEA reports under the Ronald Reagan administration. In fact, according to disgruntled DEA agents, some of whom suspected they were stumbling into a CIA connection, the case was never pursued past the indictment level and the Centac 21 task force was totally dismantled when Reagan and Bush came to office. So, Gilbert Rodriguez and Jose Londono were revealed to be high ranking members of the Cali drug Cartel in Columbia. I wondered if they were also CIAintelligence operatives? Or CIA drug operatives? Or both, as Manuel Noriega had been? Noriega had ultimately been ousted when he chose to back the violent Medellin cartel, George Bush's target. If in fact Gilberto Rodriguez had been compromised and forced to cooperate with U.S. officials after his 1978 indictment, and taking into account his strategic position of leadership in the Cali cartel and his alleged funding of the newly elected president of Columbia in 1994, it would indeed place the U.S. government in a powerful controlling position within the cartels today. In fact, it would place CIA drug operatives behind the election of the president of Columbia! The implications were earthshaking. ****** It is important to point out here that, on August 5, 1991, Michael Riconosciuto had called Bill Hamilton at Inslaw and asked him to obtain information on former DOJ official Mike Abbell. Riconosciuto planned to trade information on Abbell, Rodriguez, Nichols and others to the FBI in exchange for entry into a Witness Protection Program. But Hamilton, pressed for time and not comprehending the significance of the "drug" connection, had turned the investigation over to Danny Casolaro. Riconosciuto had stressed to Hamilton that Abbell's activities might be risky to track and he should not take the information lightly. That same day, August 5, Casolaro called Bob Bickel, the Texas oil engineer who once worked as an informant for the Customs Bureau, to discuss Mike Abbell. Bickel later confirmed that Casolaro had in fact discussed Abbell, Nichols and Rodriguez at length during that last phone conversation. And he added, "Danny confronted Robert Booth Nichols about his relationship with Mike Abbell." Hamilton and Casolaro secretly devised a plan whereby Danny would conduct an inquiry with the Department of Justice, but would couch a number of other inquiries in with the Mike Abbell inquiry to avoid alerting authorities to the real "focus" of their search. An October 15, 1991 Village Voice investigative piece, entitled "The Last Days of Danny Casolaro," by James Ridgeway and Doug Vaughan, shed further light on Casolaro's investigation during those last five days: (Note that most of Danny's last calls focused on "drug connections.") On Monday, August 5th, "Riconosciuto called Bill Hamilton from his jail in Tacoma. He wanted some information about a former Justice Department attorney [Mike Abbell], and warned Hamilton that getting the information might be dangerous. Hamilton called Casolaro to help him find out about the attorney. "That same day, Danny called Bob Bickel to say that he was "getting close to the source, and he would soon go to Martinsburg and bring back the head of the Octopus." Tuesday, August 6: Casolaro had been typing steadily since Monday, and by afternoon, he'd finished. Olga, his housekeeper, helped him pack a leather tote bag. She also remembered him packing a thick sheaf of papers into a dark brown or black briefcase. Danny walked out the door saying, "I have all my papers ... Wish me luck. I'll see you in a couple of days." That was the last time Olga saw Casolaro alive. Wednesday, August 7: According to Inslaw records, Casolarocalled the Hamiltons in the afternoon, and was put on hold. Before Hamilton could get free, he had hung up. At some time on that same day, Riconosciuto called Hamilton again to ask for the information about the Justice Department lawyer [Mike Abbell]. Hamilton called Casolaro, but he had already left for Martinsburg. Thursday, August 8: Casolaro called Danielle Stalling and asked her to set up appointments for him the next week with a former police officer, now employed as a private investigator, to learn more about the Laotian warlord Kuhn Sa's proposed Golden Triangle drug trade. Friday, August 9: By now Hamilton was starting to worry. I talk to Danny everyday," Hamilton said. "I had never [gone without speaking to him for so long] before, so I called Bob Nichols in Los Angeles and asked whether he had heard from Danny recently." Nichols told Hamilton "Yes," he had spoken with Danny late Monday night [August 5th] and he had been "euphoric." Nichols told Hamilton he (Nichols) was taking off for Europe that evening. It was at that point that Olga, Danny's housekeeper, received four or five threatening phone calls. The first was about 9 a.m., a man's voice, in good English, said, "I will cut his [Danny's] body and throw it to the sharks."About a half hour later, another call came in. "Drop dead," the man's voice said. Saturday, August 10: At 12:30 that afternoon, a maid knocked on the door of room 517 at the Sheraton Martinsburg Inn. Nobody answered, so she used her passkey to open the door; though it had both a security bolt and a chain lock on the inside, neither one was attached. When she glanced into the bathroom, she saw a lot of blood on the tile floor and screamed. Another hotel maid came into the bathroom and saw a man's nude body lying in the bloodfilled tub. There was blood not only on the tile floor but splattered up onto the wall above the tub as well. The police were called to the scene. At 8:30 p.m. that night, unaware that Danny's body had been found, Olga, Danny's housekeeper, returned to Casolaro's house to look for him. The phone rang. A man's voice said, "You son of a bitch. You're dead." It was not until Monday, August 12, that authorities notified family and friends that Danny Casolaro was dead. Had Danny in fact called Robert Booth Nichols on Monday, August 5th, and confronted him about his relationship with Mike Abbell? Had he told Nichols he planned to meet with FBI officials from Lexington, Kentucky? And what about FBI agent Thomas Gates, Nichols' antagonist? SPY magazine's article on Danny Casolaro indicated that he spoke with Gates three days before his death, relating a conversation in which Nichols had warned him to abandon the investigation. Riconosciuto later conceded that he had tried repeatedly to reach Hamilton and Casolaro between August 5 and 10th to warn them NOT to mention Abbell or Rodriguez to Nichols, but it had been too late. Bill Hamilton told one investigator that he did NOT know WHY Riconosciuto was inquiring about Mike Abbell - until AFTER Danny's death. Bob Bickel's confirmation that Danny WAS trailing Mike Abbell in the last days before his death indicate that Danny may have unknowingly stepped into the largest narcotics trafficking/intelligence operation the world. ****** Another indepth article came to my attention which further corroborated Danny's investigation of Gilberto Rodriguez. "The Strange Death of Danny Casolaro," by Ron Rosembaum in Vanity Fair's December 1991 issue included an interview with Michael Riconosciuto. According to Rosenbaum, Danny's investigations were taking him into areas that involved dangerous knowledge and dangerous characters. It was Danny's habit of "bouncing" Riconosciuto's stories off Robert Nichols that put him in peril, Riconosciuto told Rosenbaum. One of the things he reportedly "bounced" involved a major heroinrelated sting operation. Another involved Riconosciuto's claim about an "effort by the Cali cocaine cartel to derail the extradition of an alleged Columbian kingpin called Gilberto." Nichols "went ballistic," according to Riconosciuto, when Danny bounced the Gilberto (Rodriguez) matter off him. Riconosciuto said he tried to warn Danny. "I called from that day on it was on a late Monday Tuesday, Wednesday, all the way through the weekend when they found Danny [dead]," he said. "Every day I was calling the Hamiltons, asking if anybody had heard from Danny. And I was frantic." Labeled by Rosenbaum as the "resident demon of the labyrinth," Riconosciuto said "Danny's theory was different from the typical megaconspiracy theory. Danny was dealing with real people and real crimes." Rosenbaum asked Riconosciuto about the germ warfare technology he had found in Danny's notes. Riconosciuto admitted that he had learned about "horrible things" going on at the Cabazon Indian reservation but did not elaborate on the subject. Wrote Rosenbaum, "This is the labyrinth [that] Riconosciuto was leading Danny into the one he died in." Just days before his death, Danny had planned to visit the reservation. In his notes were cryptic references to slowacting brain viruses like Mad Cow Disease, which could be used against targeted people by slipping the virus into meat pies. Riconosciutotold Rosenbaum that Danny was "concerned" that he may have been a target of this virus. "That was one of the reasons he [Danny] had such an obsession with this story. He felt he had been hit by these people." Accordingly, Riconosciuto filled Danny's head with allegations of Robert Booth Nichols' sinister, international covertworld connections. He painted a picture linking Nichols to organized crime syndicates, the fearsome Japanese Yakuza, and various CIA and British intelligence plots emanating from Nichols' friendship with "a legendary Bondish Brit known as `Double Deuce' [Sir Denis Kendall]." Riconosciuto said Nichols was the key to Danny's Octopus. But Danny was receiving warnings from Riconosciuto's counterpart as well. Robert Booth Nichols had flown to Washington D.C. from Puerto Rico to warn Danny to stay away from Riconosciuto. Danny's girlfriend, Wendy Weaver, had been present at one of the meetings at the Four Seasons Hotel bar when Nichols issued the warning: "You don't know how bad this guy Riconosciuto is ... he might not get you today, he might not get you next month. He might get you two years from now. If you say anything against him he will kill you." Nichols repeated the warning several times, said Weaver. "At least five times." Weaver described Nichols as "very charming, very handsome," but said "it [the meeting] was a weird night, so weird." Another friend of Danny's met Nichols at a luncheon at Clyde's in Tysons Corner where Nichols allegedly informed them that he had just been asked to become "minister of state security" on the island of Dominica. Reportedly, the island was going to be transformed into a CIA base. The friend, who spoke to Rosenbaum on condition of anonymity, said Nichols was "very slick, very civilizedappearing" ... "oozing intrigue," but he added that he had never witnessed a performance like the one that ensued. After lunch Danny had pulled his friend aside and showed him a purported FBI wiretap summary on Nichols. The summary was part of FBI agent Thomas Gates's affidavit in Nichols' slander suit against him. The summary linked Nichols to the Yakuza and to the Gambino crime family as a money launderer. Danny's friend had been shocked. "You just put me in a meeting with this man and didn't tell me what the hell why didn't you tell me before?," he asked Danny. Danny said he wanted to see how Nichols would react. The friend told Rosenbaum, "In other words, he gaffed me with a hook and tossed me in the water to see if the Octopus would move!" Danny HAD in fact been receiving death threats on the phone. One threat reported by his housekeeper, "You're dead, you son of a bitch," which came hours AFTER Danny's body had been found, ruled out Danny himself as a possible source of the threats. And his prophesy to his brother, Tony Casolaro, "If anything happens to me it won't be an accident," made it unmistakably clear that Danny did, indeed, feel threatened. Nevertheless, Danny appeared upbeat to most of the people he talked to prior to his death. Dr. Tony Casolaro, a specialist in pulmonary medicine, told Vanity Fair that he didn't believe his brother committed suicide because Danny was so excited and upbeat about his investigation on that last Monday when he saw him. The autopsy examination of Danny's brain had revealed possible symptoms of Multiple Schlerosis, but friends and family dismissed this as irrelevant because Danny had never complained of symptoms or, to their knowledge, known of the disease, if he had it. Tony was also troubled by a number of facts, one of which was Danny's current papers and files which he took to West Virginia were missing from his motel room. His body had been embalmed even before family members were notified of the death, and the motel room had been commercially cleaned before any type of investigation, other than a cursory look at the death scene by police, could occur. In his Vanity Fair article, Ron Rosenbaum wrote that he had obtained one of Casolaro 's surviving notebooks and found mentioned under the heading of August 6, four days before Danny's death, the name "Gilberto." It read: "Bill Hamilton August 6. MR ... also brought up `Gilberto.'" Rosenbaum did not speculate publicly who Gilberto might be, but it was obviously Gilberto Rodriguez, head of the Cali Cartel, at that time deeply involved with Michael Abbell, formerly of the Department of Justice. ****** A dozen or so drafts of Casolaro's proposed manuscript along with notes and phone bills had been sent to the Western Historical Manuscript Collection at the University of Missouri by his brother, Dr. Tony Casolaro.Tony Casolaro had sent the material to the University because, at one time, the IRE (Investigative Reporters and Editors) Association, headquartered at the University, had researched the fatal carbombing of reporter Don Bolles in Arizona. Bolles had been researching a mobconnected gold smuggling operation in that state. Through Tracy Barnett at IRE, I learned that a graduate student at the University had been assigned to catalog all Danny's material for eventual insertion into a data base. In contacting the graduate student, who by then (September 1994) worked for ABC in Houston, Texas, I learned that few if any journalists had inquired about the notes. But, interestingly, Chief Assistant U.S. Attorney Steve Zipperstein from Los Angeles, working for the Department of Justice, had requested copies of Danny's NOTES, but declined Danny's phone records. The graduate student noted that the notes and drafts of Danny's proposed manuscript focused on a Cabal of intelligence people who, originally consisting of numerous names, were subsequently narrowed down to about eight. One of those names was Glen Shockley. Shockley, of course, was listed on the Board of Directors of F.I.D.C.O. along with Robert Booth Nichols. Shockley was also a corporate partner in Meridian International Logistics, headed by Nichols. Shockley was also a CIA contract employee (according to several sources) who allegedly "ran Jose Londono" of the Cali Cartel. This according to Riconosciuto's taped interview with government agents while negotiating for Witness Protection. I purchased everything of any significance pertaining to Danny's writings and documents, including the FBI wire tap summaries which corroborated everything I had learned to date. In reviewing the summaries, it became apparent that the FBI had inadvertently stumbled onto a CIA drug trafficking operation which included high ranking La Cosa Nostra figures, the Gambino crime family and the Japanese Yakuza. One affidavit in support of an application to intercept wire communications over the telephone listed names of those to be intercepted: Robert Booth Nichols, Eugene Giaquinto (then President of MCA Corportion Entertainment Division, and corporate partner with Nichols in Meridian International Logistics), Angelo Commito, Edward Sciandra, Michael Del Gaizo, Joseph Garofalo, and others. The purpose of the interceptions was to determine "source, type and quantity of narcotics/controlled substances, methods and means of delivery, and the source of funding for purchasing of narcotics/controlled substances." The intercepted conversations read like a "Who's Who" of organized crime. It was also apparent that Eugene Giaquinto enjoyed a special relationship with John Gotti. ****** Ann Klenk, a long time friend of Danny Casolaro's and former associate of Washington D.C. columnist Jack Anderson, held all his personal notes which were not sent to the University. In a September 14, 1994 phone interview, she noted that the last time she talked to Danny, that last Monday before his death, he told her he'd cracked the Inslaw case. I asked her, "Do you think he resolved that?" Ann responded, "Oh, yes. I KNOW he did. He TOLD me he did. He said, `Ann, I broke Inslaw.' And I said, `Geez, Danny that's great!' But, I never asked him what he found because he was very despondent about it. He said, `You can have it. You and Jack [Anderson] can have the story. I don't even want it.'" Ann said Danny was disgusted and related their last conversation: "I said, `Danny, you worked on this [so long] and now you don't want it?' He said, `It's just a little piece of the puzzle anyway.' See, Inslaw led him into this, but Danny quickly became more involved with the drug aspects ... with the CIA aspects, with the Wackenhut aspects." I said, "I know what you mean, because I followed the same trail." ****** Danny's proposed drafts and notes obtained from Western Historical Manuscript Collection at University of Missouri revealed information never published in mainstream media. Typewritten and handwritten lists of contacts included names and telephone numbers of Ted Gunderson, Raymond Lavas, Robert Nichols, Peter Zokosky, Bob Bickel, Fahim Safar, Earl Brian, Peter Dale Scott, Art Welmus, John Vanderwerker, Jack Blum, Dr. Harry Fair, Bill Hamilton, Bob Parry, Bill McCoy, and numerous others. Most of Danny's drafts focused on the Southeast Asian heroin connection, CIA drug money used to finance the Contras, and the ability of terrorists to send missiles containing dangerous chemicals and biological diseases into the U.S. One typewritten draft, entitled, "Behold, A Pale Horse," described an "international cabal [in Southern California] whose freelance services covered parochial political intrigue, espionage, sophisticated weapon technologies that included biotoxins, drug trafficking, money laundering and murder-for-hire." According to Danny, the cabal continues today, "its origins spawned thirty years ago in the shadow of the Cold War." Casolaro's June - July (1991) phone bills told a story of their own. Having followed Danny's investigative trail for three years, I had an entire directory of phone numbers relating to his inquiries. Most obvious were Danny's numerous calls prior to his death to Robert Booth Nichols in Los Angeles. Most of the calls from Washington D.C. to Los Angeles lasted an average of one to two hours, invariably in the wee hours of the morning 1:50 a.m., 12:36 a.m., 1:13 a.m., 12:18 a.m., etc. It was also apparent that Danny was riding a seesaw with Nichols and Riconosciuto. He would talk to one, then the other, often on the same day, back and forth for months. Then suddenly, he cut off Riconosciuto and his calls to Nichols increased in frequency. Other phone numbers matched those of Ted Gunderson, Alan Boyak, a lawyer in Utah, Bo Gritz, Heinrich Rupp and Chuck Hayes, a self-professed (on the Internet) CIA operative. Danny often called Hayes immediately after he spoke with Nichols. Oddly, Hayes never came forward during the official investigation of Danny's death to disclose the content of those conversations. ****** Within six months of Casolaro's death, Riconosciutowas again attempting to trade information in exchange for entry into a Witness Protection Program. But this time, instead of using Casolaro or Bill Hamilton, he was using me to make the contacts. At Riconosciuto's request, I contacted a man whom I will identify as N.B. at the BATF (Bureau of Alcohol, Tobacco & Firearms) in San Francisco. Michael had advised me to call this agent because the BATF was "Treasury Department" as was FinCen. I set up the phone meeting and Riconosciuto called the San Francisco BATF collect, as scheduled. N.B. listened attentively to Michael, then ran a check on him through the departmental computer system. Shortly thereafter, I received an unnerving phone call. N.B. advised me in strong terms to "get out of this" while I still could. He said I would end up getting subpoenaed as a witness if I didn't discontinue my investigation. He added that sometimes people got killed or committed suicide when they got involved with Michael Riconosciutoor Robert Booth Nichols. N.B.'s computer inquiry had bounced back on him. His superior in the BATF had been notified by someone from another agency he didn't say who who had instructed N.B. that he was to have NO further contact with Michael Riconosciutoor me. When I related this conversation to Michael, he indicated no surprise, but immediately wanted to be put back in touch with R.J. He needed someone in the government with access to his files to verify his credibility and get that information back to Tom Olmstead, his attorney. Regarding the computer inquiry, Riconosciuto explained as follows: "I know what's happening here. Tell R.J. if he uses FOIMS, Field Office Information Management System, and if he leaves an audit trail, he's going to be exposed. There are all sorts of different levels of flags on my name. Whenever the computer gets a hit, the issuing agency is notified as to who made the request and from where it came." "Mike," I asked, "how can he get around that? I don't understand ..." "Listen, whenever there's a hit on one of those flags, whether it's a want or [a] warrant, or whether it's simply an administrative interest, unbeknownst to the user who's making the request, his access is audited. Tell R.J. before he starts making inquiries, no matter how discreet he thinks they are, that he should have someone totally uncoupled from him to enter into FOIMS." "Alright." "Now," Michael continued, "if he goes into NCIC or NADDIS, ah, NCIC is the least dangerous as far as making inquiries, because NADDIS can track just like FOIMS ..." "Alright." "Now, on NCIC there is a `nonelectric' filing on me and he can make the request that way without alerting anyone. If he has trouble checking anything out, tell him I can help him along." "He can't call you at the jail. How can he get in touch with you?" "Through my attorney. The minute he [R.J.] gets a line on me, ask him to notify my attorney. Tell him he can check my attorney out through the government. Tom has excellent records with the government." "Alright." "Explain to R.J. that I know PROMISE, I know FOIMS inside out. I helped develop that internal tracking audit trail ..." I had lost all hope of R.J. rescuing Michael Riconosciuto, and I think in his heart, Michael knew that too, but I passed the information along as requested. R.J. politely accepted the information as he always did, then I never heard from him again. CHAPTER 7 Through one of Michael's contacts, I was able to obtain the corporate documents on F.I.D.C.O. Corporation (First Intercontinental Development Corporation). This formidable organization lead me straight to the head of The Octopus.The Board of Directors of FIDCO consisted of the following principles: (1) Robert Maheu, Sr, Vice President, Director former FBI agent, former CEO of Howard Hughes Operations, senior consultant to Leisure Industries. (2) Michael A. McManus, Director, Vice President and General Counsel to FIDCO former Assistant to the President [Reagan] of the United States at the White House in Washington D.C. (3) Robert Booth Nichols, Director, Sr. Vice President and Chairman of Investment Committee Chief Executive Officer of R.B.N. Companies, International, a holding company for manufacturing and development of high technology electronics, real estate development, construction and international finance. (4) George K. Pender, Director former Director of Pacific Ocean area of Burns & Roe, Inc., an international engineering & construction corporation with active projects on all seven continents of the world. Senior engineer consultant to Burns & Roe, Inc. (5) Kenneth A. Roe, Director Chairman and President of Burns & Roe, Inc., International engineers and Constructors, a family corporation owned by Kenneth Roe and family. Major current project of the company is the engineering design and construction of the U.S.A. Fast Breeder Nuclear Reactor Plant in conjunction with Westinghouse Electric Corporation which is responsible for the nuclear system supply of steam. Construction value of present business backlog of Burns & Roe, Inc. is in excess of six billion U.S. dollar. (6) Frances T. Fox, Vice President and Director former General Manager of L.A. International Airport, former Director of Aviation for Howard Hughes Nevada operations, now called Summa Corporation, City Manager of San Jose, California. (7) Clint W. Murchison, Jr. Director Owner of the Dallas Cowboys NFL football team. (8) William M. Pender, Director and Sr. Vice President licensed contractor, State of California. (9) Glen R. Shockley, Director Consultant to Fortune 500 Companies in business management. Internationally known as financial consultant in funding. The list of directors was accompanied by a letter dated January 11, 1983 on FIDCO letterhead originating out of Santa Monica, California addressed to Robert Booth Nichols in Marina Del Rey, California. The letter, signed by George K. Pender, briefly referenced a copy of a resolution resulting from a meeting of the Board of Directors of FIDCO. On April 13, 1983, Robert Booth Nichols wrote a letter to Joseph F. Preloznik in Madison, Wisconsin, outlining proposed arms projects, one of which was to build a two story building of approximately 7500 square feet with concrete walls and floors to house the "R & D position." (I later found the R & D facility referenced in a 1981 Wackenhut Interoffice memorandum as a companion facility to Wackenhut to be constructed on the Cabazon Indian reservation for the assembly of shell casings, propellants, war heads, fuses, combustible cartridge cases and other weapons systems). Nichols wrote to Preloznik, "Should there be any questions with regard to my credibility, verification can be made through F.I.D.C.O. I have enclosed a copy of that appointment." If in fact, F.I.D.C.O. was a vehicle of The Octopus, then the tentacles of its Board of Directors lead straight to the head. Clint Murchison, Jr. of Dallas, Texas was the son of Clint Murchison, Sr. who, according to Dick Russell, author of the book, "The Man Who Knew Too Much," (pp. 521523) was cut from the same political cloth as H.L. Hunt. Wrote Russell: "Back in 1951, after General Douglas MacArthur was relieved of his Korean command by President Truman, H.L. Hunt accompanied MacArthur on a flight to Texas for a speaking tour. Hunt and Murchison were the chief organizers of the proMacArthur forces in Texas. They would always remember the general standing bareheaded in front of the Alamo, urging removal of the `burden of taxation' from enterprising men like themselves, charging that such restraints were imposed by `those who seek to convert us to a form of socialistic endeavor, leading directly to the path of Communist slavery.'" According to Russell, Hunt went on to set up a MacArthurforpresident headquarters in Chicago, spending $150,000 of his own money on the general's reluctant 1952 campaign, which eventually fell apart as MacArthur adopted the strident rhetoric of the right wing. "Still, connections were made," wrote Russell, "Charles Willoughby, for example, was a regular part of the MacArthurHunt entourage and undoubtedly was acquainted with Murchison as well." Both [the Hunts and the Murchisons] cultivated not only powerful people on the far right, but also J. Edgar Hoover, Richard Nixon, organized crime figures, and Lyndon Johnson, whose rise to power emanated directly from his friends in Texas oil. "Like Hunt, Murchison was an ardent supporter of Senator Joseph McCarthy's anticommunist crusade. McCarthy came often to the exclusive hotel that Murchson opened in La Jolla, California, in the early 1950's. So did Richard Nixon and J. Edgar Hoover. "In 1961, after Nixon had lost the presidential election to JFK the previous year, Murchison sold Nixon a lot in Beverly Hills for only $35,000 a lot Murchison had financed through a Hoffa loan which Nixon sold two years later for $86,000. When Hoover visited the (Murchison) Hotel Del Charro, as he did every summer between 1953 and 1959, Murchison picked up his tab. That amounted to about $19,000 of free vacations for the FBI Director over those years. Whether Hoover knew it or not, almost 20 percent of the Murchison Oil Lease Company in Oklahoma was then owned by Gerardo Catena, chief lieutenant to the Genovese crime family. By the autumn of 1963, a major scandal was brewing around Bobby Baker, whom Vice President Lyndon Johnson had made secretary of the Senate Democrats in 1955, when LBJ was majority leader. LBJ called Baker "my strong right arm, the last man I see at night, the first I see in the morning." On October 8, 1963 Baker was forced to resign, as a Senate investigation of his outside business activities began producing sensational testimony on numerous questionable deals. "Baker's deals were tightly interwoven with the Murchison family and the Mob," wrote Dick Russell. "What first attracted the attention of Senate investigators was a lawsuit brought against Baker in 1963 by his associates in a vending company, alleging that he failed to live up to certain bargains. Those associates were, for the most part, Las Vegas gamblers; one of them, Edward Levinson, was a lieutenant of Florida mobster Meyer Lansky, whose Fremont Hotel in Vegas was financed through a Hoffa loan. "Baker, it later turned out, did considerable business with the Mob in Las Vegas, Chicago, Louisiana, and the Caribbean. Through Baker, Levinson had also gotten to know Clint Murchison." "Clint Murchison, Jr. [listed on the Board of Directors of FIDCO] tried to persuade the Senate Rules Committee in 1964 that his ownreal estate dealings with Jimmy Hoffa in Florida were `hardly relevant' to the Baker investigation." Robert Maheu (Senior Vice President and Director of F.I.D.C.O.), was also mentioned in Russell's book, "The Man Who Knew Too Much," (pp. 190). Wrote Russell: "Back in 1960, with then vice president Richard Nixon serving as the White House's liaison to the CIA's Cuban operations, the CIA had initiated its long series of assassination attempts against Castro. The `cutouts' in the operation started with Las Vegas billionaire Howard Hughes's righthand man, Robert Maheu, who got in touch with organizedcrime leaders Sam Giancana, Johnny Rosselli, and Santos Trafficante, Jr. They in turn enlisted the direct assistance of Cuban exiles ..." Throughout my conversations with Michael Riconosciuto the names of Robert Booth Nichols, George Pender, Glenn Shockley and Michael McManus (other directors of F.I.D.C.O.) cropped up repeatedly, but I found few references to them in any published books or magazines. Riconosciuto often stated that George Pender and Glenn Shockley were CIA officials, which I later corroborated through Peter Zokosky, a partner of Robert Booth Nichols's. In August, 1994, I did, however, manage to obtain three significant letters with the signatures of Michael A. McManus and George Pender on them. The following letters on F.I.D.C.O. confirm its presence in Lebanon. Letter No. 1 Written on White House letterhead stationary, dated, June 29, 1983, from Michael A. McManus, Assistant to the President (Reagan) to George K. Pender in Santa Monica, California: "Dear George: It was good to see you again. I appreciate the update you and your associates gave me concerning the status of your efforts in the rebuilding of Lebanon. "Without question FIDCO seems to have a considerable role to offer particularly in the massive financial participation being made available to the government of Lebanon. "As you are aware, the United States government is providing financial aid. We are very interested in the success of the rebuilding effort in Lebanon. I will appreciate your continuing to keep me posted. Best personal regards. Sincerely, Michael A. McManus, Assistant to the President." It is interesting to note that in 1982, one year before the above letter was written, Israel invaded Lebanon in a bid to crush the PLO strongholds there and install the Gamayel family in power. At that time TelAviv was supporting the ultraright Christian Phalange militia . It was the Christian Phalangist militia which first brought Lebanon into the heroin trade. And the powerful Christian Gamayel family which led the way in turning to outside forces for money, guns and political support. Foremost among those sources was the international heroin trafficking network. This according to Bill Weinberg, editor of High Times magazine, who wrote the indepth article, "The Syrian Connection" in March 1993. Weinberg also noted that as far back as 1955, U.S. Senate Judiciary Committee hearings learned that Sami el Khouri, the Gamayel's chief of finances, was importing raw Turkish opium into Lebanon, where it was processed into heroin and then shipped to Sicily for reexport throughout America and Europe. El Khouri controlled the Gamayel family's shipping lines, trading, trucking and air freight companies. El Khouri's machine was the Lebanese wing of the French Connection the wing that continued to do business with the Sicilians in a bid to propel the Gamayel family to power. After the Israeli invasion, the Lebanese Parliament elected to the presidency Bechir Gamayel who had long been on the CIA payroll. But before he could take office, Bashir was killed by an assassins bomb, and Bechir's brother, Amin, was installed as president. The following letter from George Pender, President of FIDCO, to President Amin Gamayel in Beirut is printed in its entirety here. Letter No. 2 Written on F.I.D.C.O. letterhead stationary, dated July 12, 1983, from George K. Pender, President of FIDCO, to President Amin Gamayel, Presidential Palace, Beirut, Lebanon.: "Dear Mr. President: I had visited Beirut in February and May, 1983 to discuss FIDCO participation in the redevelopment of Lebanon. These meetings were held with the Chamouns, Maurice Ghanem and Mourad Baroudy. Of particular interest is the fact that FIDCO offered to arrange the financing of projects considered, provided they were in the government sector. Unfortunately, the response, to date, is dragging and a golden opportunity for Lebanon is slowly dying. "I had made no effort to see you at that time as I thought it more prudent to delay until I had something more tangible to present. I expressed specific interest in the rebuilding of Damour and Alkhyam. FIDCO has presented these projects to an international Trust with whom we have a close relationship, and we are very confident that we can arrange the funding under International Chamber of Commerce format, provided FIDCO can negotiate turnkey contracts on both projects. We are ready, willing and able to proceed immediately on this basis. "I understand you will be at the White House on July 22nd. Would it be possible for me to meet with you in Washington, D.C. on July 21st briefly so that I may personally present our interest in Lebanon? As per copy of attached letter, the White House is actively interested in our efforts. "For your personal information, I was a good friend of Bechir. I was with him in Beirut in 1976 when the Syrian Army came in to police. When he later visited the United States on a speaking tour, my wife and I went to Framingham, Massachusetts to meet with him. I miss him tremendously. "I would appreciate your reply as soon as possible. You can also reach me via telex 652483 RBN [Robert Booth Nichols] ASSOCS LSA. Thank you for your time and consideration. Sincerely yours, George K. Pender." I cannot stress enough the importance of this letter From George Pender to Amin Gamayel. In the very first paragraph of Pender's letter he noted that "Maurice Ghanem" participated in the meetings held in Beirut in May 1983 to discuss F.I.D.C.O.'s participation in the redevelopment of Lebanon. Michael Riconosciuto had stated (on page 40 of this manuscript) that he had worked directly under "Maurice Ganem" and George Pender in Lebanon! Riconosciuto had explained that Maurice had a "relative, either a brother or a cousin, who was a senior DEA official with Michael Hurley." Then, in a 1993 book entitled, "Trail of the Octopus" by Donald Goddard with Lester Coleman, on page 152, I stumbled across the name of Fred Ganem in the following context: "The number of DEAcontrolled deliveries of heroin down the pipeline to the United States had increased noticeably during the winter as a result of Fred Ganem's special knowledge of the Lebanese communities in Detroit, Houston and Los Angeles." This was independent corroboration of a link between F.I.D.C.O. (George Pender and Michael McManus) and the very same heroin operation in Nicosia, Cyprus which Riconosciuto had described in detail to me in December 1991! It also directly connected George Pender with Michael T. Hurley. Goddard and Coleman recounted how "members of the Jafaar clan and other DEA couriers would arrive at Larnaca with suitcases full of highgrade heroin, white and crystal, and be met off the boat ... by officers of the Cypriot Police Narcotics Squad, who then drove them up to the Euramae office in Nicosia."In his interview with R.J. (page 37), Riconosciuto had maintained that "F.I.D.C.O. had a companion company called Euramae Trading ..." Three years later, "Trail of the Octopus," described Euramae as such: "Coleman was given a desk at the Euramae Trading Company., Ltd., a DEA/CIA `front' newly set up by the Cypriot Police Narcotics Squad in a luxury threebedroomed penthouse apartment down the street from the US Embassy. It gave him the creeps from the start. "Intended as a place where DEA and CIA agents could meet unobserved with informants and clients, as a message drop for CIA arms dealers supplying Iraq and the Afghan rebels, as a waiting room for DEA CI's and couriers from Lebanon, and as a transit point, not just for heroin, but for cash, documents and bootleg computer software moving to and fro along the BeirutNicosiaUS pipeline, Eurame, as run by ElJorr, was more like a lowlife social club than a secret intelligence centre." Coleman had complained to Hurley, but Hurley had just brushed it aside. It is noteworthy that George Pender listed Robert Booth Nichols's "telex" number at the bottom of his letter to Lebanon President Amin Gamayel. During that time span, Nichols and Pender (when they weren't in Lebanon) were operating a NSC listening post from a condo at Marina Del Rey. It was allegedly the U.S. end of the Nicosia, Cyprus operation. Michael Riconosciuto, Ted Gunderson and Allan Boyak, an attorney representing Riconosciuto, all had stories to tell about apartment number "007." More on this in a moment. Next, was the Lebanese response to George Pender's aforementioned letter (No.2). Letter No. 3 Written on Arab Bank Limited letterhead, dated November 23, 1983, from Abdul Majeed Shoman, Chairman/General Manager of Arab Bank Limited in Amman, Jordan to George K. Pender in Santa Monica, California: "Dear Mr. Pender: Mr. Ahmad has talked to me about the fund to reconstruct Lebanon and we the Arab Bank together with a group of other banks will be glad to cooperate with you concerning this respect. "We shall discuss, in future, how this cooperation will be made and on what conditions and plans. "You have mentioned in your letter to Mr. Ahmad on September 27th that this fund amounts to US$ three billion or more. There is no problem to take care of this by the Arab Bank and the other group of banks as stated above. The terms and conditions will be discussed with you provided the condition is clear in Lebanon and subject to the approval and counter guarantees of the Lebanese Authority. Yours sincerely, Abdul Majeed Shoman, Chairman/General Manager." It is unlikely any "reconstruction" (funded by F.I.D.C.O.) ever took place in Lebanon. Only a Congressional investigation could determine what the US$three billion dollars was actually used for. The next document, pertaining to Robert Booth Nichols, Senior Vice President of F.I.D.C.O., originated from an interview between Jeffrey Steinberg, a writer for Executive Intelligence Review, and Allan Boyak, an attorney in Utah whom Michael Riconosciuto contacted immediately after his arrest in Washington state. Michael T. Hurley had allegedly been transferred from Nicosia, Cyprus to DEA in Washington state shortly before Michael's arrest. Riconosciuto's arrest had taken place with a week after signing the Inslaw affidavit. It is noteworthy that Danny Casolaro also contacted and interviewed Allan Boyak shortly before his death. According to Ted Gunderson and others who knew Danny, Boyak met with Casolaro in Washington D.C. and provided him with a copy of a transcript of the meeting between himself (Boyak), Riconosciuto, and Ted Gunderson, who at that time was Riconosciuto's investigator. I later obtained the same transcript from Gunderson's live-in partner, J.M., and have related the contents of that explosive transcript in Chapter 13. Meanwhile, the following "Memorandum for the File," dated 62591, was written by Steinberg after his interview with Boyak: (Excerpted) "I met at length Saturday, June 22, 1991 with Allan Boyak, an attorney from Utah who is representing Michael Riconosciuto in his pending drug case. Boyak is not the lead attorney and will not apparently be making court appearances in the case. "Boyak recounted the following personal background information: He was in the U.S. Army in Special Forces and apparently did some contract work for the CIA during the 1960's and early 1970's. At some point in the early 70's, he worked briefly for the Drug Enforcement Administration (or its antecedent agency), being stationed in California. "Boyak had some falling out with the DEA and left the government service altogether, entering law school. While in law school, Boyak became friendly with Jim Nichols, a classmate. Nichols told him that he had a brother who was heavily involved in organized crime and had been disowned by his family. "Once out of law school, Boyak joined a Hollywood law firm and became involved in criminal defense work, representing a number of well placed West Coast drug traffickers. At some point, Boyak moved to Utah (he is a practicing Mormon), while retaining his California law practice on a parttime basis. "In addition to his o.c. [organized crime] clientel, Boyak also maintained contacts and apparently did some legal work for some of his old buddies from his Green Beret and CIA days. One such pal was Art Suchesk, who ran a CIA proprietary company called Hoffman Electronics. " ... At some point in the late 1970's, one of Boyak's clients, a Mormon old boy named Cap Kressop, who was a technical wizard, was approached by Robert Nichols and asked to manufacture a prototype laser site for a rifle. Kressop was offered a $200,000 contract for the job but he became suspicious when Nichols wanted to pay him in cash. "Boyak contacted Nichols at his Marina Del Rey, California home/office [apartment "007"] and the two had a lengthy meeting there. Boyack's description of that meeting is that it was continuously interrupted by telephone calls and telex messages. Boyak came away convinced that Nichols was involved in large scale illegal drug operations. "After consulting with one of his close friends from Green Beret days, then an assistant U.S. Attorney named Dexter Leitenen (now the Miami U.S. Attorney), Boyak went to the Los Angeles FBI office with the suspicions about Nichols' activities. "The FBI background check [conducted by Ted Gunderson] on Robert Booth Nichols (born 1943 or 1944 he couldn't remember for sure) revealed that he was `squeeky clean.' In fact, he had a Class I machine gun license. "Boyak did discover, however, that one of the people Nichols referenced as a business associate and personal friend, Harold Okimoto, was believed by some of his sources to be a top Japanese organized crime figure based in Hawaii. Okimoto was described as a top agent in the Yakuza overseas. "Over the next two year period, after the L.A. FBI had dropped any interest in the Nichols matter, Boyack's friend, [Arthur] Suchesk, repeatedly ran into Nichols in such places as Singapore, the Philippines, and Taiwan. Suchesk was based out of Zurich, Switzerland during this period, apparently still doing his front man work for the CIA. "Boyak says that information developed during this period, through Suchesk and others, [indicated] that Nichols was indeed a bigtime drug dealer who was very well insulated from any U.S. law enforcement problems. Nichols operated exclusively overseas. Whenever he came to the United States, he never engaged in any illegal activities. "However, Boyak described Nichols' rum importing business as a cover for bigtime heroin trafficking from the Golden Triangle. Nichols was also named as `Mr. Big', according to Boyak, in the Medellin Cartel, in drug prosecutions in Utah and Los Angeles. "Three to four years ago, Boyack received an out of the blue telephone call from Michael Riconosciuto. Michael identified himself as a former employee of Robert Nichols. He also referenced Ted Gunderson as a `mutual friend.' Boyak had only met Ted once very briefly when he was pressing the L.A. FBI to look into the Nichols dope suspicions ..." " ... Then in April 1991, Boyak received a phone call from Ted Gunderson, informing him that `Michael was in trouble. He was caught in a government frameup.' "Boyak returned to his background profile of Bob Nichols, parts of which were apparently provided by Bob's estranged brother, Jim Nichols. It seems that as a young man, Robert Nichols wound up in Hawii functioning as a hitman for the Tongs. He was `adopted' as the Yakuza godson of Harold Okimoto, a 67yearold car dealer in Hawaii. "Nichols grew up to be a big business front man for the Far East syndicate. He reportedly laundered between $50200 million for Ferdinand Marcos. He now owns an estate in Hawaii, a feudal castle outside of Milan, Italy and the referenced Marina Del Ray home in California. "Nichols has an office in Zurich. At one point, he was reportedly involved in the smuggling of China White heroin into Mexico where it was treated to look like the Mexican brown heroin which was more popular at the time. "It should be emphasized that all of this information about Robert Nichols comes exclusively from Allan Boyak. None of it has yet been independently corroborated to my knowledge. Bill Hamilton and some other people involved in tracking the Inslaw story have all spoken to [Robert] Nichols and report that he has been straightforward with them and has provided leads and documents re: Michael Riconosciuto. "Nichols is listed on the board of directors of First Intercontinental Development Corporation (FIDCO) along with George Pender and several officials of the Howard Hughes linked Suma Corporation." One of the most surprising, and disturbing, documents I found in Michael Riconosciuto's hidden files (see Chapter 9) was an envelope with a notation on it, handwritten and signed by Ted Gunderson, which read as follows: "Michael: Raymond [Lavas] is arriving at LAX, 7:55 p.m., Air Canada via flight 793 from Toronto. Will have to go through Customs. This will give us another member for our drug/arms operation. Only problem [is] Raymond will probably be using instead of selling. Sorry I didn't get to D.A. office. I tried to call, but no answer. By the time I fought the traffic to the bank and did my banking, it was too late Will be home tonight (818) 8806238. T.G." Raymond Lavas was Ted Gunderson's forensic expert when he worked for the FBI. Lavas was in constant contact with Bobby Riconosciuto after Michael was incarcerated. In fact, everyone was watching Michael and Bobby very closely. CHAPTER 8 In March, 1993, two years after Michael Riconosciutohad attempted to trade information on the F.I.D.C.O./Euramae drug/intelligence operation in Lebanon to the government, the aforementioned magazine article printed in High Times magazine by Bill Weinberg, entitled, "The Syrian Connection," exposed CIA penetration into the Bekaa Valley drug trade in Lebanon. Essentially, this article validated much of Riconosciuto's earlier information. The following are some excerpts: " ... Many of Lebanon's armed factions depend on the international drug trade for funds," wrote Weinberg. "Each paramilitary group controls its own port in or around Beirut which serves as a transfer point for drugs on the way out of Europe and America and weaponry on the way in from the international market. Whoever holds the fertile Bekaa [Valley] holds the ticket to power. As the war escalated in the late 1970's, hashish, the traditional mainstay of the Bekaa, started to be replaced by the more lucrative heroin. Marijuana fields were converted to opium fields, hashish production compounds converted to heroin labs." Heroin production exploded in the Bekaa Valley under the Syrian occupation. However, the Syrian occupation forces didn't touch the drugs, but "profited from the trade and protected it." It was estimated that up to $2 billion in protection money was paid annually by dope plantation operators to Syrian occupation forces. DEA official Felix Jimenez told a reporter in 1990 that the Syrian occupation received $10,000 per kilogram of Bekaa heroin. With the valley producing over 20,000 pounds a year, that was a lot of money. Bekaa also became a center for processing Columbian cartel cocaine for reexport to European markets. In 1988, two Syrians arrested with large quantities of heroin and coke in Milan [Italy] claimed to be working for a Syrian colonel in Bekaa. Prior to Desert Storm, Syria's president Hafez Assad and Iraq's Saddam Hussein were rival factions in the Arab nationalist Ba'ath Party. Syria was the only Arab nation to back Iran in the long and brutal war against Iraq in the 1980's. So when President George Bush invited Syria to join the Arab coalition against Saddam after Iraq's invasion of Kuwait, Assad accepted. After Desert Storm, Assad closed ranks with the White House and even softened his stand against Israel. President Bush and Secretary of State James Baker peddled a postwar peace plan for the region and Syria and Israel were encouraged to recognize each others' Lebanese occupation zones. Under a 1990 accord, Christians and Muslims were finally granted equal representation, officially bringing the civil war to an end. A new Syriabacked Muslimled government came to power. Under the accord, Syria maintained control of the Bekaa Valley. Among the areas still under Syrian control were the notorious drug ports north of Beirut. High Times maintained that there were long standing backchannel relations between Washington D.C. and Damascus. According to a 1987 Pentagon memo leaked to the Chicago paper, In These Times, Lt. Col. Oliver North was personally notified that Syrian intelligence in Lebanon was willing to negotiate with the White House for release of the hostages held by Lebanese terrorists. The Washington Jewish Week reported that Bush himself had made secret visits to Damascus for hostage negotiations. But there were other reasons for the U.S. to be in Lebanon. In 1988, when Pan Am Flight 103 exploded over Scotland, Pan Am hired the private investigative firm of Interfor to look into the bombing. The owner, Juval Aviv, was reportedly a former Mossad agent. Interfor maintained that the Syrianbacked Popular Front for the Liberation of PalestineGeneral Command (PFLPGC) was behind the bombing. The PFLPGC had been able to get their bomb on board the 747 because the flight was part of a heroin smuggling route run by a drug trafficking ring connected to the Syrian regime and protected by both the U.S. DEA and the CIA. Interfor claimed the ring was overseen by Syrian kingpin Monzer AlKassar often known as the world's biggest arms dealer. The CIA was protecting the AlKassar operation because he was cooperating with efforts to free U.S. hostages in Lebanon. Reporter Bill Weinberg added that "the CIA and DEA had apparently both instructed Germany's internal intelligence agency, the BKA, to allow certain suitcases to pass uninspected onto USbound flights at the Frankfort airport, where Flight 103 originated." Apparently, unknown to anyone except the PFLPGC and AlKassar, a suitcase which was supposed to be full of the usual heroin was covertly substituted with a suitcase full of explosives. A London Times news article, dated July 22, 1991, entitled, "US Drugs Sting Gave Pan Am Bomber Cover," noted that the DEA admitted that the protection program had existed. The explanation for this operation, which was codenamed Khourah, was provided by Ronald Caffrey, acting assistant administrator of the operational division of the DEA. In a U.S. government submission, dated March 20, 1991, Caffrey said the drug operation was a "controlled delivery." According to Caffrey, in a controlled delivery, a law enforcement agency permits and monitors shipments of contraband, including drugs, to move from a source or transit location to its intended destination. Use of this technique is sometimes essential to enable law enforcement agencies to identify and arrest highranking members of trafficking organizations, rather than simply arrest low level couriers. Pan Am argued in court that it had been the pawn of an international intelligence operation, but still lost the case and was forced into bankruptcy. In 1990, when the White House started to woo Syria as a partner in the Allied coalition, blame for the Pan Am bombing suddenly shifted from Assad's Syria to Qaddafi's Libya, and that is pretty much where it stands today. Meanwhile, AlKassar was alleged to have provided Oliver North with drug profits to purchase arms for the Nicaraguan Contras. The U.S. Tower Commission probe into Irangate revealed that AlKassar had been paid $1.2 million by Oliver North's coconspirator General Richard Secord to move weapons from Israel to the Contras. In her book "October Surprise," former Reagan White House aide Barbara Honegger alleged that AlKassar's heroin smuggling network in Italy was used to launder NATO arms stocks for diversion to Iran with the help of corrupt Italian intelligence officials linked to the secretive fascist Masonic lodge, P2. It is noteworthy that AlKassar was reported to hold large tracts of land in the Bekaa Valley. The PFLPGC also has camps in the Bekaa which were the target of Israeli air strikes in 1989. ****** The U.S. government's presence in Lebanon is not to be taken lightly according to Lester Coleman, a selfemployed freelance writer, editor and security consultant who once moonlighted as a DIA (Defense Intelligence Agency) covert intelligence officer when he was called to serve. Coleman, age 47, told the London Times that for six years he worked as an intelligence officer with the secret unit, Middle East Collection 10 (MC10) in Cyprus, running a network of agents in Beirut whose mission was to find American hostages held by extremists. Coleman was paid in travelers checks sent from the Luxembourg branch of the now collapsed Bank of Credit and Commerce International (BCCI). Two senior MC10 members, Mathew Kevin Gannon and Major Charles Dennis McKee, had been on PanAm flight 103 and had just returned from a mission in Beirut. Coleman explained that the DEA, with the narcotics squad of the Cypriot national police, the German BKA police and British customs, ran a "drug sting operation" through Cyprus and airports in Europe, including Frankfurt. The operation involved delivering heroin from the Bekaa Valley in Lebanon to the United States; the operation was codenamed "Khourah." Coleman maintained that Pan Am Flight 103 was being used by the DEA as a "controlled delivery" flight. After the explosion, the Beirut end of MC10 had obviously been "blown." There were five key members of the MC10 cell in Cyprus and Beirut, one of whom was Lester Coleman. Another was Werner Tony Asmar, a German Lebanese, who was killed in a bomb explosion at his office in east Beirut on May 26, 1988. Another member of MC10 was Charlie Frezeli, a Lebanese army officer, who was shot dead at his home in east Beirut in November 1989. When Asmar was killed, the DIA ordered Coleman home. Danny Casolaro had contacted Coleman in Sweden on August 3, 1991, seven days before his death in Martinsburg, West Virgnia. They talked about the sale of the PROMISE software by the U.S. Government to foreign governments, the Bank of Credit and Commerce International (BCCI), and the IranContra scandal. After Coleman learned of Danny's death on August 10th, 1991, he provided Inslaw president Bill Hamilton with an affidavit in October 1991. That affidavit read as follows: "Affidavit of Lester K. Coleman, being duly sworn, do hereby state as follows: "(1) I am currently selfemployed as a freelance writer, editor, and security consultant. I am a United States citizen and am temporarily outside of the United States. "(2) In November 1984, the Defense Intelligence Agency (DIA) offered me a position in human intelligence operations in the Middle East. I was raised in the Middle East, where I lived in Iran, Libya and Saudi Arabia. I speak three dialects of Arabic and some Farsi. I accepted the position and received training from the DIA. I was assigned to a Middle East intelligence unit. "(3) Between February and September 1987, I was seconded by DIA to the Drug Enforcement Administration (DEA) in Nicosia, Cyprus, reporting to the DEA Country Attache, Michael T. Hurley. "(4) After a cover assignment in the United States, I was again seconded to the DEA in Nicosia, Cyprus, in early 1988. "(5) During April and May 1988, I worked in the office of Euramae Trading Company, Ltd. in Nicosia, Cyprus, a DEA proprietary company. On or about May 29, 1988, because of my concern about poor security in the DEA operation in Cyprus, I returned to the United States, having previously obtained the concurrence of DIA. "(6) During my two stints as a DIA covert intelligence officer seconded to the DEA in Nicosia, Cyprus, I became aware of the fact that DEA was using its proprietary company, Euramae Trading Company, Ltd. to sell computer software called PROMISE or PROMIS to the drug abuse control agencies of various countries in the Middle East, including Cyprus, Pakistan, Syria, Kuwait and Turkey. "(7) I personally witnessed the unpacking at the Nicosia, Cyprus, Police Force Narcotics Squad of boxes containing reels of computer tapes and computer hardware. The boxes bore the name and red logo of a Canadian corporation with the words `PROMISE' or `PROMIS' and `Ltd' in the company name. "(8) The DEA objective in inducing the implementation of this computerized PROMIS[E] system in the drug abuse control agencies of the Middle East countries was to augment the drug control resources available to the United States Government by making it possible for the United States Government to access sensitive drug control law enforcement and intelligence files of these Middle East governments. "(9) It is also my understanding that thirdparty funds were generally made available for the purchase of these computer software and hardware systems. One thirdparty funding source was the United Nations Fund for Drug Abuse Control in Vienna, Austria. "(10) As DEA Country Attache for Cyprus, Michael T. Hurley had overall responsibility for both the Euramae Trading Company, Ltd. and its initiative to sell PROMIS[E] computer systems to Middle East countries for drug abuse control. "(11) In 1990, DEA reassigned Hurley to a DEA intelligence position in Washington State. "(12) I became aware in 1991 that Michael Riconosciuto, known to me as a longtime CIA asset, was arrested in Washington State by DEA for the manufacturing of illegal chemical drugs. I had also become aware of the fact that Riconosciuto had made a sworn statement, prior to his arrest, about his participation in a covert U.S. intelligence initiative to sell Inslaw's PROMISE software to foreign governments. "(13) In light of Hurley's personal involvement in the U.S. Government's covert intelligence initiative to sell PROMIS[E] software to foreign governments and his reassignment to a DEA intelligence position in Washington State in advance of the DEA's arrest of Riconosciuto, the arrest of Riconosciuto should be regarded as suspect. I do not believe that Hurley's posting to a drug intelligence position in Washington State in advance of Riconosciuto's arrest on drug charges is merely coincidental. Rather, the probability is that Hurley was reassigned to Washington State to manufacture a case against Riconosciuto in order to prevent Riconosciuto from becoming a credible witness about the U.S. Government's covert sale of the PROMIS software to foreign governments. "(14) The investigative journalist Danny Casolaro contacted me in Europe on August 3, 1991. Mr. Casolaro had leads and hard information about things that I know about, including Department of Justice groups operating overseas, the sale of PROMIS[E] software by the U.S. Government to foreign governments, the Bank of Credit and Commerce International (BCCI), and the IranContra scandal. I subsequently learned of Mr. Casolaro's death in Martinsburg, West Virginia, one week later, on August 10, 1991. I contacted Inslaw in October 1991, after learning about Mr. Casolaro's death under suspicious circumstances." CHAPTER 9 Village Voice magazine ran an article entitled, "The Last Days of Danny Casolaro," by James Ridgeway and Doug Vaughan on October 15, 1991 which gave a brief profile of Michael Riconosciuto's background: "The 44yearold Riconosciuto is to put it mildly a colorful character, wilder than anything in `The Falcon and the Snowman.' He was a gifted child. When he was just 10 years old, Michael wired his parents' neighborhood with a working, private telephone system that undercut Ma Bell; in the eighth grade, he won a science fair with a model for a threedimensional sonar system. By the time he was a teenager, he had won so many science fairs with exhibits of laser technology that he was invited to be a summer research assistant at Stanford's [University] prestigious Cooper Vaper Laser Laboratory. Dr. Arthur Schalow, a Nobel laureate, remembered him: `You don't forget a 16yearold youngster who shows up with his own argon laser,' he told Casolaro." ****** Bobby Riconosciuto lived with Michael Riconosciuto at the time of his arrest in Washington state. Immediately upon learning of his arrest, she had fled to California with her four children, the youngest of which, Elizabeth, had been fathered by Michael. Bobby was well situated in an exclusive suite at the Embassy Suites Hotel in Orange County, California. Her suite contained a living room and bar overlooking lush indoor tropical gardens and water fountains, marble walkways over bridgecovered ponds and a gazebo where free breakfasts were cooked and served to order. Within the room, she had at her disposal office equipment, phones in every room, answering machines, room service and anything else she needed for herself and her children. Patrick Moriarty, Marshall Riconosciuto's business partner of 40 years, was paying the bills. Moriarty and the Riconosciutos, father and son, had once owned Hercules Research Corporation together in Hercules, California. An old Contra Costa County newspaper article, dating back to April, 1981, gave the story of Hercules. The subheading of the article pretty much said it all, "Device Could Make Hercules a Silicon Valley." In 1981, Hercules had developed a small electronic power supply the size of a tissue box, designed to specifically feed 30,000 volts of electricity to another device, a METC (Modular Energy Transfer Catalyzer) unit, that would cut the heating and cooling time in food processing and of making glass, metal and other products by 40 percent. The METC unit, patented by Interprobe of Chicago, worked by electrostatically exciting air molecules by moving them through a charged field. This removed a boundary layer of molecules that inhibited the exchange of thermal energy. Hercules' highvoltage power supply was essential to the application of Interprobe's METC unit, so both companies were in the process of working out a merger in order to market both technologies as a complete system. Admiral Henry Rankin, vice president of Interprobe, was a longtime family friend, and was very enthuiastic about incorporating the Hercules power pack with Interprobe's high voltage electrostatic technology. Patrick Moriarty and Marshall Riconosciuto had funded research for 15 years and spent about $1 million of their own money on the project. By 1983, things were not looking so good for Patrick Moriarty. The Los Angeles Times newspaper reported in a series of articles that "fireworks magnate W. Patrick Moriarty, his business and associates spent nearly half a million dollars in the last three years to influence government decisions throughout California." Moriarty's relationships with several key state legislators and his campaign contributions to elected officials from Anaheim to Sacramento had made him a powerful force in state and local politics. His association with the notorious Robert Ferrante, head of Consolidated Savings and Loan which failed in 1985, and who was the subject of a disorganized, onagain offagain FBI investigation, was written up in the book, "Inside Job," by (Mary Frick?). Patrick Moriarty was described as "the manufacturer of Red Devil fireworks, who founded the Bank of Irvine. The bank failed in 1984, the victim of fraud and mismanagement, according to regulators." In 1985, Moriarty pleaded guilty to mail fraud in a case that became the biggest political scandal in California in 30 years. Over 10 prominent politicians, including one state senator, were indicted for taking bribes from Moriarty. Though I'd spoken with her on the phone numerous times, I first met Bobby Riconosciuto facetoface on January 15th, 1992. On the day I visited her hotel suite, I hauled my Mita copy machine on a cart up to her room and we talked and made copies of documents all morning. Bobby was young, boxom and attractive in a natural, mother earth sort of way. Her long blond hair hung loosely around her shoulders, she wore no makeup, and her nose and mouth had an impish upturn that made her appear to be smiling even when she was not. We became friends as the day progressed. Bobby confided that some of the more sensitive material was stored at Michael's hidden trailer in Trona, California. While working at Wackenhut, Michael had anticipated a future need to have a hiding place for himself and his files in the event that things got out of control. Bobby, who had met Michael in Washington state after he left Wackenhut, had been instructed by Michael to stay away from the trailer in case she was being surveillanced. The files and computer equipment stored there were Michael's last ace in the hole. Nevertheless, Bobby was frustrated by the slow progress of Michael's court defense, by R.J.'s lack of response to Michael's request for Witness Protection - and she had been barraged by reporters who wanted documented proof of Michael's statements. I offered to drive her out to Trona, near Death Valley, to retrieve Michael's files and ultimately, she acquiesced. We arrived at the isolated trailer at dusk and began sorting through documents that could substantiate Michael's claim that he worked for the government. The electricity had been shut off and as it became dark, we were forced to use flashlights. Bobby was terrified that we might get caught in that Godforsaken place. The children were cold and tired, and from sheer exhaustion, she finally offered to turn all the boxes and documents over to me to make copies at home. We threw everything helter skelter into large plastic trash bags, dumped the bags into my Chevy van, and quickly headed back to civilization. It is noteworthy that before we left, Bobby pointed the flashlight towards another, smaller trailer situated on a knoll overlooking the road, which she claimed contained Michael's hidden computer equipment. It was several weeks before Michael learned that Bobby had turned the documents over to me. She never told him, nor did I. It was through Jonathan Littman, a San Francisco Chronicle reporter whom I had confided in, that Riconosciutolearned of our secret. Upon arriving home from my trip to the desert, I had xeroxed roundtheclock for five days with help from trusted friends. The documents corroborated everything Michael had related over the phone, and more. It was an exciting time. Boxes and boxes of documents provided me for the first time with a window into the CIA corporate structure, arms deals, drug operations, money laundering, biological technology, all the connecting tentacles of Danny Casolaro's "Octopus." After making copies, I squeezed the originals into eight large packing boxes, sealed them tightly, and sent them back to Bobby Riconosciuto, via a friend, who gave them to Michael's father, Marshall Riconosciuto. I later learned Marshall allegedly shipped them to Ian Stuart Spiro for safekeeping. It was not until April, 1993, that I learned what became of Spiro and the documents. An Associated Press news story entitled, "Deaths Linked to Spy Network," published in the Merced Sun Star newspaper, outlined the death of Ian Stuart Spiro, 46, who was found dead of cyanide poisoning in the AnzaBorrego desert on November 8, 1992, one week after his wife and children were found shot to death in their Rancho Santa Fe home. The news story, originating from the Oceanside Blade Citizen, noted that "documents and U.S. intelligence sources implicated Spiro in the IranContra armsforhostages affair and an alleged Justice Department conspiracy to pirate software from a private company and sell it to foreign intelligence agencies." Spiro's name also appeared in Lt. Col. Oliver North's personal notebooks documenting the IranContra affair, according to the National Security Archives in Washington D.C.. Former hostage David Jacobsen told the BladeCitizen shortly after Spiro's death that Spiro helped negotiate the release of hostages in the Middle East. After obtaining a copy of a followup BladeCitizen article dated June 3, 1993, entitled, "Spiro Probers Want to Talk to North" by Wade Booth, Stacy Finz and Michael Williams, I learned that Ian Spiro lived in Beirut, Lebanon during the 1970's and 1980's where he "made contacts with Lebanese religious leaders and the Islamic Jihad." Greg Quarton, Spiro's brotherinlaw, told reporters at the BladeCitizen that Spiro maintained communication with Lebanese business associates until the time of his death, but investigating officers had possession of Spiro's phone bills, and as of this writing, they had not released them. San Diego sheriff's Capt. Jim Marmack said detectives were investigating allegations by Spiro's relatives that his file cabinets and business papers were missing. The week of the Spiro family's death, Robert Corson, a business associate of Spiro's indicted in a savings and loan scam, was found dead in an El Paso, Texas, motel room. Corson, who reportedly worked for the CIA, died of a heart attack, officials said. The BladeCitizen reported that Corson once carried money to South America in a deal to deliver covert weapons. Corson also allegedly associated with California investor Wayne Reeder who was seen at a Wackenhut/Contra meeting in Riverside county (See Chapter 10). The newspaper article went on to say that Alan Michael May, age 50, [a former Northern California field director in Richard Nixon's presidential campaign and attorney for Nixon's brothers Donald and Edward] was found dead in his San Francisco home on June 19, 1991, four days after a newspaper story in the Napa Sentinel outlined his role in an alleged plot by Republican Party officials to bribe Iranian officials to delay the release of U.S. hostages until after President Reagan's inauguration. Immediately after May's death, Raymond Lavas, Ted Gunderson's former forensic's expert, (and a former protege of Robert Maheu according to Michael Riconociuto) wrote a letter to one of Michael's friends, expressing his professional opinion about the death of Michael May. A copy of that letter was faxed to me and the following excerpts quickly captured my attention: "... I don't understand why it's going to take two weeks to determine May's cause of death. Did you know that certain chemical assassination methods will have been evaporated out of the body by that time? "Then, the cause of death would be ruled as natural, since the chemical agents are the primary cause that result in a secondary action such as heart failure, kidney or liver damage, etc. "Some examples of these agents include BZ2, Ricin, Tropodotoxin, shellfish toxia and a variety of methlamine based neurotoxinsthat affect the central nervous system and cause failure of one or more organs in the human body. "Some, if not most of these toxins are solvent based [DMSO] and may be introduced in minute quantities through the skin. Their effect [may] vary and some toxins take weeks to months to take effect. Others take moments to damage the nervous system, then evaporate within hours. "Unless the body is immediately refrigerated, the toxins are quickly evaporated, leaving only one or two parts per million in quantity. Unless there are suspicious circumstances surrounding the death, a trained forensic expert would never detect any traces of the toxin. "So there you have it. [Michael] May is dead and they are dragging their asses to find out how! What is next? A statement that May died of natural causes? Let me predict this now ... and we'll see. Regards, Ray." Michael May also apparently attended briefings connected with Lawrence Livermore Labs in California according to an official listing of Lawrence Livermore employees at a "Briefings and Discussions" document obtained from Riconosciuto's files. The document, stamped, "Official Use Only," listed Edward Teller along with nine other names, including Michael May, under the heading "Lawrence Livermore Laboratory." Other headings with names listed underneath included the Department of Energy, Department of State, Defense Nuclear Agency and Naval Research Laboratory. There were no other pages accompanying the document, so it was impossible to determine from what manual it came from. May's name also popped up in a letter Michael Riconosciutowrote to Dr. John Phillip Nichols at the Cabazon Indian reservation when he was being screened for security clearances to work on the Cabazon/Wackenhut joint venture. The letter focused primarily on Al Holbert, an Israeli intelligence officer who allegedly recruited Riconosciuto into the CIA, and May's name was mentioned only once, in connection with members of "The Company." That one sentence read as follows: "Ben Kalka's relationship with Holbert and `May' will give the proper authorities the necessary auspices to come in and swiftly clean it [The Company] up." Other portions of the letter gave a history of Riconosciuto's experience with Al Holbert (Excerpts): " ... My problems stemmed from my association with Al C. Holbert. I first met Holbert when I was still in high school and I was led to believe that he was an `unofficial' representative of the Israeli government. I was further led to believe that his interests were not contrary to those of the United States. It was not until July of 1981 that I learned the truth about Holbert. It came directly from him to me personally in what I will call a confrontational situation. "August of 1981 was when I first brought Holbert to your [Dr. John Nichols] attention. At that time, I still did not know much and I was still in a sort of state of shock from my `new awareness' of Holbert. I was in deep with this guy and so was Paul [Morasca]. "At first Paul thought that I was off base and overreacting and then by degrees he started to come around. Much of the incredible account of Paul's doings (money transfers, gems, weapons, drugs) were the result of his relationship to Burt and Jensen. Burt, Jensen and Kalka all met Paul through his brother Joe. I was the one who introduced Al Holbert to Paul, and Paul was the one who introduced me to Burt, Jensen and Kalka. This was in early 1967. "I was introduced to [Al] Holbert through the Stanford crowd at the home of [name withheld] in Portola Valley, California. Interesting enough, [name withheld] is a former State Department employee ..." " ... The realization of who and what Holbert is, and Paul's death, have taken me some time to adjust to. And that required professional help. I now have a clear idea and good perspective on what has really happened in my life. "I am in awe of Holbert and his group's power [The Company]. During the last year, I have forced this structure to rear its ugly head in many different times and places, and in ways that can't be covered up. I have also spread far and wide what knowledge I have with the intent to first protect others involved and secondly to chisel the story in stone. "Where it all stands now is that no matter who the group attempts to silence or what ruse they attempt to perpetrate, the truth cannot be destroyed. This is now in the hands of a competent attorney. My direct involvement is finished except to be available to answer questions. " ... I feel that Holbert and his group represent a current national security nightmare to this country. I feel that I have been extricated from the hold of this group. But I also feel that the destruction by legal means of this group ranks in importance with my scientific and engineering skills to the overall picture. "Ben Kalka's relationship with Holbert and May will give the proper authorities the necessary auspices to come in and swiftly clean it up. I would now like to start out where we should have been a year ago. The first point I will start with is a recap of our visit to Pickitinny Arsenal ..." It is noteworthy that two of the people mentioned in the above letter are now dead: Paul Morasca and Michael May. The bizarre circumstances of Morasa's death are detailed in the next few pages. Ben Kalka of The Company, is now serving time in prison for having 900 pounds of methamphetamine in his possession at time of arrest. Through one of Michael's contacts, I managed to locate the current (1991) whereabouts of Al Holbert and confirm his identity. A letter written on "Solomon Investigations" letterhead, dated June 13, 1991, to a client requesting payment for the services of Holbert read as follows: (Excerpted) " ... I enlisted the services of my electronic countermeasures expert, A.C. Holbert, for an immediate survey and sweep of the premises. Mr. Holbert is highly regarded as the best electronics man in the [San Francisco] Bay Area and has recently worked with Israeli intelligence services in the field of electronic countermeasures. He agreed to take on this job. I have enclosed a copy of Mr. Holbert's faxed report ..." The mystery of Al Holbert was further uncovered in a 1983 transcript in which Michael stated, "After Paul's [Morasca] death, Holbert admitted to me that he was a Soviet backed agent, and they had a home, or he had a home for me, and I could be treated like royalty, and he reiterated that offer in the latest meeting, and he said, `He was prepared to deliver some fivehundredthousand dollars cash to me us a show of good faith ..." The transcript, originating from a series of tape recorded interviews between Michael Riconosciuto, Ted Gunderson and Robert Booth Nichols at Nichols' "007" apartment in Marina Del Ray, provided a window into the entire drug scene in California from the early 1960's through the 1980's, mostly relating to methamphetamine operations in the Bay Area. It had been typed by Ellen Nichols, Robert's wife. Riconosciuto's relationship with Ted Gunderson dated back at least as far as 1982. Michael and Nichols dated back to 1967. In reading the transcript, it appeared that Gunderson and Nichols were interviewing Riconosciuto for recruitment into a drug/sting operation. Riconosciuto later verified that he was, in fact, being recruited into the overseas Lebanon drug operation by Gunderson and Nichols because of his (Riconosciuto's) undercover experience in the drug trade. It is noteworthy that Al Holbert, the Israeli intelligence agent who originally recruited Michael into the CIA, is mentioned extensively throughout the 71page transcript. Riconosciuto's relationship with Holbert had lasted from 1966 to 1981, a span of fifteen years. Most of that time had been devoted to complex drug activities in California. In one passage, Riconosciuto stated that "Ben Kalka was one of [Al] Holbert's lieutenants. The other lieutenant with Kalka was Charlie Weinberg, who set up the Vortex Chemical Company in Berkeley, California for Holbert." Holbert was also interested in technology. "I really confided in him. I was constantly steering him to various people in the Silicon Valley, you know, for requests that he made which were very sophisticated technical requests." In the transcript, Ted Gunderson asked Michael, "Holbert had a technical mind for that sort of thing?" Michael responded, "Absolutely! [He had] a firm grasp of physics, mathematics, chemistry, military hardware ..." Gunderson asked, "Let's go back to '66 to '81, you were close to him?" Michael: "Not on a regular basis. He would get in contact with me when he needed consultation in certain areas. I made some good money. I designed communications equipment for them. I did a lot of software development ..." Ted: "And then he gave it to the Israelis?" Mike: "Yes." Ted: "And he admitted this?" Mike: "Oh yeah, none of it was really classified. I did software for the analysis of radar change data. It was based on mathematical models that the Department of Defense wasn't using you know, my approach was new and different from theirs, but it wasn't connected with any of their projects, so technically it wasn't classified." Michael developed other technology along the way and subsequently attracted the attention of Dr. John Phillip Nichols at Wackenhut/Cabazon who wanted his services. But Michael's association with Al Holbert was hindering Michael's security clearances. Through the screening process and Dr. John Nichols, Michael had learned more about Al Holbert. Ted: "Well, how could he [Holbert] be a Soviet agent and an Israeli agent?" Mike: "Your guess is as good as mine. I talked to Major General Peratt on that subject last May and he said, `You don't understand the ways of the world.' Regarding Al Holbert, I said, `That man has done more damage to my generation and my country [drugs] How can you people say that you're friends of the United States, when you send us a guy like that?" Michael continued ..."You know, Holbert came to the United States and he went to work for the Treasury Department out of Philadelphia and ..." Ted interrupted. "In what way? As an agent?" Mike: "I don't know what the relationship was. The Treasury Department wouldn't tell me. They wouldn't comment at all except to acknowledge that, `Yes, he was involved at very high levels, giving special training.' " ... Holbert taught courses in interrogation techniques. He taught touchkill techniques you know, with the thumbs on the temples and various scare areas like that. He moved around to a lot of different agencies. He got involved with the FBI, and he was involved with the Drug Enforcement people ..." Ted: "He indicated to you for fifteen years [that] he was with the Israelis?" Mike: "Israelis. Yes." Ted: "And then you realized through Dr. Nichols that he was a Soviet?" Riconosciuto explained that he thought it was John Ammarell at Wackenhut who had "zeroed in on Holbert." Gunderson continued to press Riconosciuto about Holbert being a double agent. Michael responded: "Well, he was with the Soviets, but he was also with the Israelis. Holbert definitely is connected with Israeli intelligence. I mean there's no ifs, ands, buts, or maybes ... He was decorated in combat for them." Riconosciuto further recounted a visit to Israel in April 1982. He had met a man (name unspecified) who was the assistant Secretary of Defense of Israel for a number of years and was in charge of defense production for the Israeli government. This man was a friend of Ariel Sharon and he had introduced Riconosciuto to Sharon. It was through this man and a man named "General Peratt," that Riconosciuto confirmed Holbert's position with the Israelis. "Holbert definitely is one of their boys. I got an admission out of General Peratt that Holbert was funny, that he's a Trotskiite, and they knew about it, and I couldn't understand why they kept a guy like that around? I was told that I just didn't understand the ways of the world!" Ted asked, "Who does Holbert report to?" Mike: "Jean Pierre Boegner." At this point in the transcript, Robert Booth Nichols interceded and provided Boegner's address: " ... His address in Paris is 114 Champs Elysees, Paris 8, France. That goes into my territory ..." Mike added, "Jean Pierre reports directly to Colonel Stefan Uznanski of the Ukraine ..." Nichols noted, "I have strict files on him." Ted asked, "And is he GRU?" Mike answered, "No KGB." Nichols added, "As high as you can go ..." Ted asked, "And where is he, in the Kremlin?" Mike answered, "No, he's in Vienna." Nichols interjected, " ... Out of Salzberg. He has a home twenty minutes from Salzberg. His hobby is boar hunting. He has about a twenty man contingent." Gunderson asked, "Is Boegner a Canadian?" Nichols responded, "Boegner is French. Boegner was involved in the assassination attempt on de Gaulle. Boegner served time." Ted: "He's KGB?" Nichols: "Oh yeah, a Colonel." Ted: "Okay, anything else. Anything more on Holbert that we should bring up?" Riconosciuto noted that Holbert was very disappointed that he couldn't "turn him" (Riconosciuto) in August of 1981. Ted asked Michael if Holbert admitted at that time that he was KGB? Michael corrected Ted, "GRU, he was GRU. He told me that he was GRU and he bragged that there were over thirtyfive thousand GRU agents active on the North American continent. And I checked with John Ammarall and with Robert Frye [executives at Wackenhut Corporation] and they told me it was about half that number. " ... He [Holbert] wanted me to leave the United States, through Canada, and go to Israel." Riconosciuto added, "You know, he's touched the Central Intelligence Agency, the Treasury Department, the Secret Service and various local law enforcement agencies all over the country ..." The abovementioned transcript was mailed by one of three people to the "prosecutor" at Michael Riconosciuto's trial in Washington state where it was entered into evidence. ****** At that time, to Michael's knowledge, only Robert Booth Nichols, Peter Zokosky and Jonathan Littman, a San Francisco Chronicle reporter, had possession of it. I subsequently received a copy of it from Jonathan Littman, who coincidentally, I learned later, happened to be Ben Kalka's "cousin" (Kalka belonged to The Company, according to Riconosciuto, and had been arrested with 900 pounds of methamphetamine in his possession). Littman had obtained the transcript from Peter Zokosky, Robert Booth Nichols' partner. Riconosciuto believed Littman had given the transcript to Kalka during one his visits with him at the Pleasanton prison, and Kalka had sent it on to the prosecutor at Michael's trial. Nichols later confirmed to me that he (Nichols) had indeed interviewed Riconosciuto with Ted Gunderson in 1983 and the transcript was legitimate, though he wouldn't state the purpose of the interview. ****** It is significant that a passage in the 1983 transcript mentioned Michael May as "one of the top three guys in the Lawrence Livermore Laboratory management structure" who was associated with Riconosciuto. ****** Michael and Bobby Riconosciuto had been communicating with Jonathan Littman for months, as had Danny Casolaro before his death, and they wanted me to connect with him. At that point, Littman had written a series of indepth articles on the Cabazon Indians and Dr. John Nichols, and I hadn't been interested in talking to him ... until he wrote about the death of Michael's partner, Paul Morasca. The article, entitled, "Bizarre Murders Puzzle Cops," published on the front page of the San Francisco Chronicle on December 30, 1991, noted that the body of Paul Morasca, 31, had been found by Michael Riconosciuto. Morasca's arms had been lashed behind his back as he was hogtied with a telephone cord from his curledup legs to his neck. Police believed he died when his legs finally gave out and the cord tightened like a bowstring, drawing the noose around his neck until he slowly strangled. Before his death, Morasca and Riconosciuto had planned a business venture with Cabazon administrator John Phillip Nichols to develop hightechnology military hardware. Morasca was also described as a "San Francisco entrepreneur suspected of being a money launderer involved in a major Northern California drug ring." Oddly, when Riconosciuto found Morasca's body, he drove 500 miles to the Cabazon reservation and told John Nichols about the death. Nichols then called his Los Angeles attorney, who telephoned the San Francisco police. Just three days after Morasca's death, Mary Quick, a 63yearold school teacher was shot in the face and her purse stolen as she was about to enter Fresno's American legion Post 509, where she was president of the Woman's Auxiliary. At first, police assumed it to be a routine mugging murder, until it was discovered that her nephew, Brian Weiss, who had been living at his aunt's house in Fresno, was a business associate of Michael Riconosciuto's. (Brian Weiss was also mentioned in the abovementioned 1983 "drug transcript"). Riconosciuto explained to police that he told Paul Morasca that he had given Mary Quick a card containing secret bank account code numbers because "she had no connection to any of the principles and could be trusted." She had been instructed to give the code numbers over the phone only to Paul Morasca or Michael Riconosciuto. It was not until I obtained Michael Riconosciuto's "desert" files that the above story affected me personally. Within one of the boxes was an envelope containing eight coded computer cards with large sums of money handwritten next to the account numbers. One card, containing ten account numbers, indicated sums of upwards of $3.5 million dollars. That was just one card of eight. In my next conversation with Michael Riconosciuto, I inquired of him the "real" story behind Paul Morasca and Mary Quick's death. I did not reveal to him that I was in possession of his bank cards, but referred to the S.F. Chronicle newspaper story. Michael remorsefully indicated that he had not, in fact, given any cards to Mary Quick as he had told Paul Morasca he did. Michael had kept them (and obviously hidden them at his desert trailer). Nevertheless, Morasca believed, and under torture revealed, that one of the cards was being held by Mary Quick and the rest were stored in a safe deposit box. As we know, Mary Quick died three days later. After that conversation I immediately took the cards to a professional photographer, had closeup photographs taken of them, and returned them in a separate envelope to Bobby Riconosciuto. I never knew what she did with them. During subsequent phone conversations, Riconosciuto often referred to his former partner, Paul Morasca. During his attempted trade into the Federal Witness Protection Program, he had made a statement which caught my attention, and which I later inquired about. While relating his background in the electronics field, he had mentioned that he once worked at Tyme Share, Inc. Chuck Evert, a longtime family friend, had reportedly been one of the founders along with Tom O'Roarke. Noted Riconosciuto, " ... And at the time of Paul Morosca's death, the biggest loss I received was a big bag of bearer shares of original Tyme Shares stock. And that was the main reason why Paul got killed." Riconosciuto had stressed that only the FinCen people would understand the significance of that. I later learned that the computer cards which Paul Morasca and Mary Quick had died for belonged to the Tyme Shares online financial clearing house used worldwide by banking institutions. Essentially, the cards were provided to a subscriber or "user" who rented time on the computer for conducting banking transactions. Riconosciuto chose not to elaborate on his operation at Tyme Shares from a "jail" phone, nevertheless, I was able to decipher that he and Paul Morasca had accessed bank accounts using the computer cards in conjunction with a "password" determined by the user. Michael had created the passwords from the "pets" named in Phyllis Riconosciuto's (Michael's exwife's) diary. He did, however, randomly discuss his background with Tyme Shares: "I developed the modem, error trapping routines for Tyme Share used on the original network. I developed the protected mode memory for the scientific data systems, SDS, Sigma 7 computers. And I developed the capital PERT, Pert Software, which was the next generation of critical path method. That's a Programmed Evaluation Review Technique that Tyme Shares, for years, was the leader in. "And then Electronic Data Systems bought a license from them, and you know, EDS's story is legendary. Now, PROMISE is an outgrowth of PERT. The Hamiltons had a woman programmer who was selftaught and she's the one, her signature is in the code structures of PROMIS. It's just like her signature because she was out of the mainstream and did things her own way ..." Shortly thereafter, while reviewing Riconosciuto's documents, I came across a copy of an obscure statement submitted by Riconosciuto in February 1984 to the San Francisco Grand Jury on the death of Paul Morasca. It cryptically tied Morasca to Wackenhut and appeared to have been transcribed from a tape recorded interview. The statement in its entirety read as follows: "I first heard of Phil Porath in December of 1981. John Phillip Nichols [Cabazon administrator] told Paul Morasca and myself that we needed Phil Porath as a consultant to Recovery Technology, Inc. Porath was represented by John P. Nichols as being able to smoothly handle metals transactions for RTI on a large scale. Phil Porath was one of the contacts that John Phillip Nichols had committed to arrange for Paul as part of our deal. Paul Morasca's body was found after he failed to contact Porath for that scheduled meeting in January 1982. "After Paul's death, JPN [John Phillip Nichols] came to me with a request. He asked me if I could recover some of Ben Kalka's LSD because he had a sale for 5 lbs. of it to someone in Romania. John Phillip Nichols claimed that this was an authorized covert intelligence operation and the proceeds would be used to purchase George Wackenhut's yacht, Top Secret. "Military electronics equipment to be delivered to South Africa was also to be purchased according to JPN and delivered by the yacht. I went along with the program because JPN told me that the `agency' was involved through WSI. I did some checking on my own and became suspicious of JPN. Then JPN met with myself and Raoul Arana of Central Carribean Research, Inc. "At this meeting, the details were plainly discussed by Mr. Arana. At that point, JPN directed me to have PAT (Phillip Arthur Thompson) recover [all] of Kalka's assets. I then contacted DeSilva, who had control of Kalka's assets and he agreed to release them to me. DeSilva later called the Indian reservation and gave the location of the assets which included: one bobtail semitruck with power lift gate loaded with amphetamine production chemicals; one red Datsun truck with a portable refrigerator containing the acid. "I accompanied PAT and Steve Finley to the locations of these vehicles in the Oakland area. The keys, title and registration were with each vehicle. PAT and SF drove the vehicles off and I reported to JPN that the vehicles had been located and picked up. "I also reported to my attorney, DW (Don Wager), the details. I contacted JPN a few days later and he complained to me that PAT had made off with everything. " ... with George Wackenhut in Las Vegas. JPN told me that my problems would be over with if I went along with the program. Brian Weiss [Mary Quick's nephew] drove me to Palm Springs where I rented a car. JPN, myself and Brian Weiss then drove to Las Vegas. "We arrived in Las Vegas late in the afternoon. We checked into the hotel. After we checked in, I was then introduced to Phil Porath by JPN. Porath seemed a little nervous and upset with JPN. JPN seemed desperate to have Phil Porath stall George W. on the sale of the yacht. Phil Porath seemed reluctant to go along with JPN. "JPN, myself and Porath then went to a private section of the dining room and met with GW [George Wackenhut] and JA[John Ammarell]. During dinner, JPN outlined my situation. [Al] Holbert, [Ben] Kalka, [Richard] Knozzi, [and] the Fresno Company were covered in detail. "A cutaway, sectioned high security lock was also shown to JA and GW [George Wackenhut]. JA said that this should be presented to his personal friend, Bud Miller, for action and that I would be contacted. "The sale of the WH [Wackenhut] yacht then came up. Porath gave GW a story [at] JPN's prompting. GW was impatient and asked where the `South African' Thompson could be reached?I then asked GW [George Wackenhut] if he was referring to PAT [Phillip Arthur Thompson] and he said, `Yes.' "I then demanded to know what was going on? I laid out to GW what PAT had done, including murdering PM [Paul Morasca]. JPN interrupted me and told GW that I was mistaken and it was a different PT that I was talking about. It was at that point that GW [George Wackenhut] said he had a hearing problem and the dinner broke up. "I went immediately to make telephone calls. I spread the word that I felt my life was in danger and that JPN, WH, and PAT had conspired to kill PM [Paul Morasca]. I then went back to the dining area where I saw PP [Phil Porath] and GW [George Wackenhut] at a small twoperson table talking about the yacht deal. JPN and JA were standing up and they asked me to come to JA's room. "At JA's room, everybody acted like nothing had happened. There we talked for an hour or so about hitech projects. JPN and I then went to PP's room and talked [about] P's missed meeting with Paul M., Bill Jensen, Burt Gardener and metal projects. We then went to bed. The next morning JPN, BW [Brian Weiss] and I drove back to Indio. At no time did JPN mention the problem that came down at dinner." ****** In John Connolly's SPY magazine article on Wackenhut, September 1992 issue, on page 54, a brief notation mentioned Riconosciuto's meeting in Las Vegas with George Wackenhut and John Ammarell, a Wackenhut board member and consultant to George Wackenhut. SPY contacted Ammarell regarding the meeting, and Ammarell confirmed that such a meeting did indeed take place in Las Vegas. "I don't remember any specific conversations," Ammarell said, "but I think we were there to discuss the sale of George's [Wackenhut] yacht, the Top Secret. I think Nichols said he had a potential buyer." Wrote SPY, "So, the wealthy president of a large security company with CIA ties and one of his board members meet with a drug dealer turned electronics expert and a spook turned arms supplier and all they discuss is the sale of a boat?" ****** After reading the newspaper article on the death of Paul Morasca, I contacted Jonathan Littman at the San Francisco Chronicle. Littman jumped in the car and drove from San Francisco to Mariposa (near Yosemite National Park) when he learned I had obtained Michael's hidden documents. Interestingly, when he arrived at my home he thumbed through piles of documents, but seemed to be looking for something specific. I later learned he was searching for Phyllis Riconosciuto's (Michael's first wife's) diary. While Michael had worked at Wackenhut, Phyllis had been treated psychiatrically by the Cabazon administrator, Dr. John Phillip Nichols. Part of her treatment included writing a "diary" of her life with Michael. Michael later broke into Nichols' office at the reservation and stole the original diary before fleeing to Washington state. The original diary was in fact included in the documents I had obtained in the desert, but I decided to withhold specific pages from Littman until I could determine what his purpose for wanting them was. An incident which I have enumerated in Chapter 10, confirmed that my instincts had been subliminally correct. Meanwhile, I attempted to satisfy Littman with a few documents sent to me by Henry Weinstein, court reporter for the Los Angeles Times. I had contacted Weinstein to inquire if he had written anything on Robert Booth Nichols' (unrelated to Dr. John Phillip Nichols) lawsuit against the Los Angeles FBI, specifically FBI agent Thomas Gates? Weinstein had not heard of the lawsuit, but immediately investigated at the Los Angeles courthouse. Shortly thereafter, he sent a package of documents relating not only to Nichols' lawsuit against Thomas Gates, but also relative to Nichols' corporate minutes on the facilitation of biological technology to Japanese institutes, copies of his weapons permits, and documents indicating that Eugene Giaquinto, Vice president of MCA Entertainment Division, was on the board of directors of Nichols' corporation, Meridian International Logistics. Marvin Rudnick, now a Pasadena lawyer, once tried to prosecute MCA Corporation for organized crime involvement, but got shut down at the highest level, and the Organized Crime Strike Force was disbanned. One member of that investigative team was Richard Stavin, who talked to Danny Casolaro shortly before his death. Eugene Giaquinto and Jack Valente played heavily in Rudnick's investigation of MCA, as did Curry Company (a subsidiary of MCA) in Yosemite National Park. Rudnick was written up in American Lawyer for his explorations through the MCA labrynth, and at some point, worked closely with Thomas Gates during his investigation of Robert Nichols. Gates and Weinstein were also well acquainted with Mariposa County government's relationship with Curry Company. (See page 2 of manuscript). In return for sharing copies of these documents with him, I asked Littman to collaborate with me on a story concerning the government sanctioned (10 years!) methamphetamine operations at Whiskey Flats, on the Sara Priest Indian reservation in Mariposa. I was still intent on forcing the arrest of deputies involved in the meth lab at that location. (See page 3 of manuscript). Littman instructed me to put together a detailed synopsis which he would submit to the San Francisco Chronicle. ****** CHAPTER 10 Through Michael Riconosciuto, Danny Casolarohad compiled a sizable list of former CIA officers and arms dealers, the most noteworthy of whom was Robert Booth Nichols, described in various publications as a James Bond type who jetted around the world trading arms and other products. At the time of Danny's investigation, Nichols headed Meridian International Logistics (M.I.L.), a Californiabased company that conducted extensive business in Australia and Japan. M.I.L. also controlled Meridian Arms Corporation of which Riconosciuto was briefly Vice President. Out of the WackenhutCabazon endeavor grew a business partnership between Nichols and Riconosciuto, both interested in developing new, hightech submachine guns and powerful explosive devices that, like a nuclear blast, could produce an electromagnetic pulse that could wipe out an enemy's communicatins and electronics. The secretive Nichols chatted with Casolaro frequently. Casolaro's July phone bills indicated that he called Nichols fifteen times that month, often in the wee hours of the morning. Several of those phone conversations lasted for more than two hours. Before his death on August 10th, Danny Casolaro told his brother, Tony, and Bill Hamilton that Nichols warned him that his investigations were risky. According to FBI statements, Nichols is not a man whose warnings should be taken lightly. In September 1987, Special Agent Thomas Gates of the Los Angeles FBI had begun an investigation of the activities of Robert Booth Nichols and his corporation, Meridian International Logistics, through Japanese and Australian legal attaches abroad. According to a subsequent deposition filed by Gates, the bureau suspected Nichols of being involved in a $500 million stock fraud and of maintaining ties to the Gambino crime family and organized crime in Japan. Gates's deposition was part of a 1987 wiretapping on the phone of Eugene Giaquinto, an official of the MCA entertainment corporation with reputed MOB links. Nichols was one of the people whose calls the bureau intercepted. According to the wiretap application, Nichols was allegedly an international money launderer for money generated through narcotics trafficking and organized crime activities. In June, 1989, Nichols sued Thomas Gates in a California state court for libel, slander, and interference with contractural relationships when he (Gates) allegedly acted outside the scope of his employment by initiating contacts with the Australian Federal Police and various individuals in Australia and Japan. The complaint asked for damages in the amount of $11,000,000. Ted Gunderson submitted an affidavit on Nichols' behalf, stating that he believed Gates HAD acted outside the scope of his employment when investigating Nichols abroad, the suit was subsequently dismissed through the Ninth Circuit Court of Appeals. Robert Booth Nichols was depicted in one eastern publication as a "handsome, dashing figure, frequently described as `Clark Gable without the ears' ..." His friendship with movie actor Steven Seagal brought him a cameo appearance in the movie, "Under Siege," but his real purpose for being on the set was to act as technical advisor for the weaponry used in the movie. The son of a prominent Los Angeles surgeon, Nichols is the inventor of a submachine pistol that he maintained was superior to the MAC10. Nichols' weapons permit application, dated January 28, 1985 from the Santa Clara County Sheriff's Department, indicated that that he was born on March 6, 1943 at Loma Linda, California. In addition to his residences in California, he maintained residences in Italy, France, Australia and London, England for "business purposes for twenty years." His medical doctor was listed in Zurich, Switzerland. He had worked for Harold Okimoto in Hawaii for four years, from 1968 to 1972 as Vice President of Preventor Security Center, an intruder electronics firm. The four guns registered to him included two Colt .45 automatics. His purpose for carrying a concealed weapon was listed as such: "I am involved in the research and development of weapons systems, ranging from the basic blowback automatic weapon to various advanced destructive devices. As I have detailed knowledge of the workings of these systems, I feel it is imperative to have personal protection for myself and for the good of the community." Nichols' corporation, Meridian Arms, a subsidiary of Meridian International Logistics, was licensed in California in 1987 to posses and/or transport machine guns, Permit No. 01678, and to sell machine guns, Permit No. 01677. A 1985 Statement by Domestic Stock Corporation filed with the Secretary of State in Sacramento listed Harold Okimoto, Peter Zokosky, and Glen Shockley as Directors in addition to Nichols' family. Okimoto, Zokosky and Shockley are also listed as Directors on Meridian International Logistics, Inc. (MIL). Eugene F. Giaquinto, president of MCA (Music Corporation of America) Home Entertainment Division in Universal City, was also a Director of M.I.L. until May 31, 1988, when he resigned and returned his 10,000 shares of stock as a result of the Los Angeles Organized Crime Task Force investigation, at that time headed by Thomas Gates. The May 25, 1988 Minutes of an MIL Board meeting reflected Robert Booth Nichols concern with the investigation: " ... Upon meeting with Agent Gates on March 8, 1988, our legal counsel, Judge Mark Robinson, interpreted the line of questioning of Agent Gates as having a main focus on the relationship between Robert Nichols and MCA, Inc. (of which Mr. Giaquinto is an officer). " ... Therefore, due to Mr. Nichols' concern, which Mr. Giaquinto understood and thus stated he would submit written resignation within two days; it was the unanimous decision of the Board to remove Mr. Giaquinto from the position of Director of MIL forthwith ..." Nichols' concern with such an investigation can well be justified when you review the Minutes of an MIL board meeting held in Sherman Oaks on August 26, 1988. The following business was discussed and voted upon: (Excerpted) "It was the unanimous decision of the Board to draft a letter to the President of an internationally recognized Medical School in Japan (as referenced in our corporate minutes of April 24, 1988) with regard to our corporation's intention to make available a grant of funds to said School, as the funds become available to our corporation, and under specific terms and conditions. " ... The phenomenal success in the field of immunotherapeutics by the Immunology Department of said Japanese Medical School has convinced the Board [of MIL] that the EXCLUSIVE training of qualified physicians under contract to and the direction of Meridian International Logistics, Inc., would be of great value and benefit to our company and it's shareholders." While reading these documents, I couldn't help wondering why an "arms" dealer, allegedly tied in with organized crime, wanted to fund the exclusive training of physicians at a Japanese medical school? The Minutes of MIL dated September 20th, 1988, referred to an agreement executed on September 14th, which discussed the threeway, equal ownership between MIL, Dr. Shigeyoshi Fujimoto, and Ajinomoto Co. Inc., of certain patented biological technology identified as "a newly devised technology for induction and activation of cytotoxic Tlymphocytes (Tcells), referred to as CTL, directed to autologous cancer cells in vitro with high efficacy utilizing a serumfree medium." A Power of Attorney was issued to attorney Fujio Kubota in Japan to file patents and registrations on the technology entitled "The Method for Induction and Activation of Cytotoxic TLymphocytes." The signatories on the Agreement to file Registrations and Patents on September 14, 1988 were listed as Dr. Shigeyoshi Fujimoto; Takasha Miyamae (Ajinomoto Co., Inc.); Hidetoshi Onogi (representative of MIL); Kanehiro Ishida (International Service Center, Inc.); and Takashi Kumakawa (American Embassy). Hidetoshi Onogi was granted full power of attorney to negotiate and execute an equity position for Meridian International Logistics related to the filings and "any other documentation pertaining to the technical knowledge and the mechanical and/or chemical processes for the production of T Cells as are present in the immune system of the human body or any other organism." In and of itself this transaction seemed innocuous enough. But again I asked myself, why was an international arms dealer on the Board of F.I.D.C.O (First Intercontinental Development Corporation), a CIA front corporation, which offered three billion dollars to rebuild Beirut to President Amin Gamayel of Lebanon, whose chief of finances (Sami el Khouri) was shipping tons of heroin to Sicily for reexport to America, want to invest in "a method for induction and activation of cytotoxic TLymphocytes"? Was this technology being developed with the authority of the U.S. government, or independently? If Nichols' operations were in fact government sanctioned, then it must have been frustrating for him to be investigated by the FBI. The concept of the FBI inadvertently investigating the CIA was ironic. And what had Danny Casolaro learned about this technology? I found a possible answer in an obscure letter written on Wackenhut/Cabazon letterhead, dated January 20, 1983, addressed to Dr. Harry Fair at Tactical Technology in Arlington, Virginia, from Dr. John P. Nichols, Cabazon Administrator. The letter noted that on February 15th, 1983, Dr. Nichols would be forwarding to Dr. Fair "a unique list of agents and production techniques related to biological warfare." The letter went on to say that the Storemont Laboratories business plan Dr. Nichols mailed to him was to prepare him for what was to be sent in the area of biological warfare. Added Dr. Nichols: "[These] products could be utilized in small countries bordering ALBANIA or large countries bordering the Soviet Union. You will be amazed at the scope ..." I could not help recalling the Village Voice article ("The Last Days of Danny Casolaro," October 15, 1991) which had stated, tongue in cheek, that "Casolaro had traced the Inslaw and related stories back to a CIA `Old Boy' network that had begun working together in the 1950's around the ALBANIA covert operations ..." The hybridoma technology discussed in attached documents (in Michael Riconosciuto's files), centered around the ability to reorganize and synthesize genetic structures and to modify "lymphocytes" (immune cells). Under the heading "Possible Military Applications Utilizing Hybridoma Technology" was the notation that "genesplicing technology provides the ability to produce pathogenic (harmful) agents, i.e. viruses." "In fact," noted the writer, "biological warfare weaponry of this nature (both production and supply) is limited only by the imagination of the scientist." Included in the above mentioned documents (attached to the Dr. Harry Fair letter), was a proposal to develop monoclonal antibody kits to detect the presence of such harmful biological agents in a field (combat) environment. In other words, develop a laboratory created vaccine for a laboratory created virus. The very same proposal had been submitted to Peter Zokosky in December 1982 by John P. Nichols. I wondered, was THIS the same technology that Robert Booth Nichols and the Directors of MIL, including Peter Zokosky, Glen Shockley and Harold Okimoto, were fronting to the Japanese? What kind of "weapon" was this? Other weapons discussed in the same letter included the Cabazon Arms CA 9 SMG which "Peter Zokosky had the British interested in." The CA 9 SMG could be produced for $75.00 per unit on the reservation and sold for $100 to $125.00. "It meets all the needs of a small, poor democracy for 9MM parabellum," said Nichols. "They can afford to purchase this one. We have fired over 50,000 rounds with the test model using South Korean ammunition without jamming. We could begin manufacturing within two weeks in a country like Guatemala, Chile, etc., utilizing USA produced dies and Swedish extrusion machinery." ... Peter Zokosky has fired both the Viper and the CA 9 SMG and was impressed with both, but particularly with the CA 9 SMG. Kuwait has been particularly interested in financing the producion of the CA 9 SMG ..." Dr. Nichols concluded: "We would initially manufacture on the reservation. We can purchase an existing small company with all the licenses to manufacture and export. [Meridian Arms?] We are ready. We are continuing to experiment with the combination sniper rifle (9MM) equipped with micropressor vision enhancement (no tubes) (night vision). Michael Riconosciuto and some friends of the reservation have been working cooperatively on this project. Within another 90 to 120 days we should have a working model to use on the CA 9 SMG and the sniper rifle." The ongoing projects listed in research and development were a second 9MM calibre machine pistol, an assault rifle with laser sighting, a longdistance sniper rifle, and a small portable rocket system which could be attached to the assault rifle. Three months later, on April 13, 1983, Robert Booth Nichols wrote to Joseph Preloznik in Madison, Wisconsin, recapitulating exactly the same weapons proposal as outlined above by Dr. John Nichols to Dr. Harry Fair. I never found out who Joseph Preloznik was, but Dr. Harry Fair's name popped up in a Wackenhut InterOffice Memorandum in Michael's files. Dated May 25, 1981, from Robert Frye, a Vice President of Wackenhut in Indio, to Robert Chasen, a Vice President of Wackenhut in Coral Gables (and former Commissioner of U.S. Customs) the memorandum detailed a May 1213 visit to Dr. Harry Fair, Chief of Propulsion Technology, Applied Sciences Division and others at Pickitinny Arsenal in Dover, New Jersey. The arsenal was listed under the official heading of "U.S. Army Armament Research & Development Command, Large Caliber Weapon Systems Laboratory" or ARRADCOM. The fivepage memo not only outlined the depth of Wackenhut's commitment and involvement at the Cabazon reservation, but it delineated Peter Zokosky's importance to the projects underway there. One of those projects included proposed construction of an "R & D" (Research and Development) facility on the Cabazon Indian reservation for the manufacture of 120 mm. combustible cartridge cases for sale to the U.S. Army, with sales also to NATO, and especially to the Federal Republic of Germany which at that time, was adopting the use of such cases in their Leopard tanks. Wrote Frye: "The obvious key to any such endeavor is [Peter] Zokosky. He is reportedly one of only 67 personnel in the world who have had any significant experience in the development and manufacture of the slurry process involved in combustible cartridge cases. He is under present noncompete agreement with Armtec, his former company, until August 1981. Armtec is the present sole source supplier of 120 mm. combustible cartridge cases to the U.S. Government. Zokosky is also serving as a consultant to the British Government ..." It is noteworthy that the Cabazon Indians had enlisted the aid of other Indian tribes to join in their endeavor. Use of adjacent tribal lands as a location for a large caliber weapons range test site was obtained from a sister tribe, the Torres Martinez, involving some 30,000 acres of very remote and desolate land near the Salton Sea.Potential use of a test firing range for the "railgun" on the Santa Rosa Mountain, under the control of the Santa Rosa Indians, had also been pledged to the Cabazons and the U.S. Government. A notation was included in the lengthy memorandum to "firm up the deal between the Joint Venture and John Vanderwerker, President of Intersect Corporation, [in] Irvine, California," who had the exclusive rights for foreign marketing with the Litton Electron Tube Division in third world countries. Mention of John Vanderwerker in the Wackenhut memorandum was singularly important in my investigative leap from overt arms operations to "covert" intelligence operations. According to Peter Zokosky, Vanderwerker was on the CIA payroll. In Riconosciuto's files, I located a letter dated April 11, 1983, written to Vanderwerker at Intersect Corporation from Glenn Shockley, a Board Director of both F.I.D.C.O. (First Intercontinental Development Corporation) and MIL (Meridian International Logistics), under investigation for organized crime activities. Robert Booth Nichols was also on the Board of both corporations. The Octopus trail gets a little complicated here, but it is a significant trail. Both Vanderwerker and Shockley were on the CIA payroll. Documents to that effect will be noted in future pages. In the aforementioned letter, Shockley was offering to Vanderwerker fortytwo AH1S Cobra Helicopters at a unit price of seven million eight hundred thousand U.S. dollars each. The rest of the letter read as follows: (Note a few words had been damaged while xeroxing) "The price offered is F.A.S. location at Seller's option Europe. The price is net to Buyer possessing the proper documentation and does not include any government considerations (taxes), if any, all of which (indecipherable) to the Buyer's account. "For verification of the existence of these products, you are requested to refer to telex transmission occuring during the Spring of 1981 between Union Bank Suisse of Zurich, Switzerland, and Omega Industries of Long Island, New York. The transmissions were addressed to Mr. Parvis Lavi at Omega and were signed by Mr. N.A. (indecipherable) bank officer. Your immediate response to this offer would be greatly appreciated. Sincerely, Glenn. R. Shockley." Attached to this letter was a handwritten memorandum, obviously taken from the above referenced "telex" transmission. The memo delineated the procedure for "airframe I.D. number acquisition." The buyer's bank officer was instructed to telephone Seller's bank officer at 8:00 a.m. Tuesday morning to relay the following Seller's bank data: "Bank Credit Suisse, Geneva. Officer Mr. Eucomun. Telephone number 0114122365380. Account Number 02746590 54821 Reference Code J.H." If the connection was missed, then it was to be repeated Wednesday at 8:00 a.m. $10 million U.S. dollars was to be exchanged at the bank for [a] Frame I.D. No. on Wednesday. If all was ready to proceed in Geneva in 5 banking days, then the $10 million would be credited to the buyer's account toward acquisition of all craft. If not, then $10 million was to be forfeited. The bank officer's followup monologue as noted on the memorandum read as follows: "Acting on behalf of our client, I confirm that he has on deposit the sum of $10 million U.S.D. Upon receipt of one airframe identification number, the price of one craft will be set aside irrevocably for your client. If our client does not present to you within 5 banking days in Geneva, Switzerland, all necessary data, documents and fund commitments, he has agreed to forfeit the price of one craft to your client's account." Also attached to these documents, was a sheet of handwritten notes obviously related to the above transaction. The names of various banks and their locations, along with the name of a bank officer, notations about metric tons of gold, and a code name, "Messenger Boy," were cryptically scrawled on the sheet. I inquired of Michael Riconosciuto what the story was on the sale of the Cobra helicopters? Riconosciuto briefly related the following story. The fortytwo Cobra helicopters had been ordered by/for NATO, then after the helicopters were built, the funding was not available. Nichols and Glenn Shockley, working for the CIA, were contracted to "get rid of the helicopters." John Vanderwerker was brought into the operation and the helicopters were shipped to a warehouse in Europe, destined for North Korea, then Iraq. It is important to note here that North Korea was a conduit for arms to Iraq from both the United States and the Soviet Union. In essence, the United States was forced to "compete" with the Soviets in providing arms to Iraq. This is discussed in further chapters, but in summary, what it all boiled down to was Oliver North supplied arms to Iran. The CIA supplied arms to Iraq. And Wackenhut supplied arms to the Contras. All under the authority and supervision of the U.S. Government. I asked Michael Riconosciuto if Danny Casolarohad knowledge of the "helicopter" deal? Michael responded, "I gave him the names of the people that were involved and Danny went out and confirmed it." I asked him to elaborate. "Well, Danny went and talked to Roy Furmarc (phonetic sp.), William Casey's exright hand man, and Furmarc admitted that he had contact with them [the helicopters]. And when the NATO stuff disappeared, Bob [Nichols] disappeared with it. They weren't going to pay Bob and his accomplices what they wanted, per the original deal, and Bob got angry and just walked away with it all. But Bob got help from some people in the White House, and they cut a certain group of guys in the agency [CIA] out." I asked, "Who was involved with the helicopter sale besides Nichols?" "Well, Glen Shockley, Parvis Lavi (phonetic sp.), he's an Iranian, but he worked with the Israeli (indecipherable word) Mission out of New York ..." Riconosciuto paused, remembering, then continued with his story: " ... I brought in Stan Singer, former deputy Israeli Defense Minister, to try and take all those helicopters off everybody's hands. I would have made a nice, tidy sum of money for myself ..." "Who were the helicopters originally destined for?" Mike: "NATO. During the Carter administration, there was a slip up on some funding, they were really screwy in the way they handled certain things ..." "Was this some kind of an undercover operation?" Mike: "It was on the up and up, regular deliveries from the United States to NATO, but there was some kind of a misunderstanding between the upper reaches of the Carter Administration and some of the other NATO countries, so while they were having highlevel discussions, no financial instruments exchanged hands. "They finally came to terms on the financial end of it, but by that time the stuff [helicopters] had been removed from the loading docks and warehouses." "So, they were gone?" Mike: "They were gone." "To North Korea?" Mike: "Into storage in Europe. Later they got sold to North Korea, and other places. It was hotter than hell ..." "Where in Europe, do you know?" Mike: "Well, I don't want to go into it on the phone [from jail], but I know the whole story behind it. While it was in storage, everbody and their brother was trying to buy the stuff and the price got jacked way up. Casey's faction and Carlucci and those guys, they wanted it all, wanted to screw Bob and his guys, and Bob made an alliance with somebody else for the stuff ..." "Who?" "Well, later with Mike McManus in the White House." (McManus was assistant to President Reagan, and on the Board of Directors of F.I.D.C.O. with Nichols). "Why did they call upon Nichols to do this? What was his connection?" Mike: "Bob had been doing errands for them for years ..." "Who in particular?" Mike: "Bob was working under Larry Kern basically. And Ellen's father [Nichols' wife] was somewhere in there ..." "Was he working for the NSC at that time?" Mike: "Just the CIA. He was just doing contract type work. He was good at what he did. Whatever objectives were given to him, Bob always achieved them. You know, he has an impeccable track record ..." In a subsequent interview with Robert Booth Nichols, I asked him about the helicopter deal. Nichols confirmed that he had, indeed, participated in the shipment of the helicopters to Europe through the CIA. In news interviews, Wackenhut had denied association with Michael Riconosciuto, yet in Michael's files, I found a letter written on Meridian Arms letterhead, dated February 10, 1984, from Robert Booth Nichols to Dr. Harry Fair referring to the Wackenhut visit to Pickitinny Arsenal in May, 1981. Nichols reminded Dr. Fair of the demonstration at Pickitinny in which "Michael Riconosciuto [had] discussed electrostatic heat transfer augmentation in a wide range of applications ... and demonstrated control of heat in electric discharge." This letter was significant in that it confirmed that RiconosciutoHAD in fact accompanied Peter Zokosky and Robert Frye, Vice President of Wackenhut, to the Pickitinny Arsenal to demonstrate the above mentioned technology. ****** The crux of the Wackenut involvement in arms development and shipments through various sources, including Peter Zokosky, Robert Booth Nichols, John Vanderwerker, and others, was tied irrevocably to the Reagan administration's efforts to aid the Nicaraguan Contras. A Special Operations Report emanating from the Riverside, California, District Attorney's office which was sent to John Cohen, investigator for the House Judiciary Committee on Inslaw, provided indisputable proof that Wackenhut sold arms to the Contras. The Special Operations Intelligence Report entitled, "Nicaraguans and Earl Brian at Lake Cahuilla 9/10/81" described a meeting held between two groups, the Nicaraguans and Wackenhut/Cabazon officials, at a countyowned police firing range at Lake Cahuilla in Riverside County. According to the surveillance report, the purpose of the meeting was "to test a new night vision device and weapons. All [the] weapons tested were semiautomatic. [A} new sniper rifle tested was a 50 caliber with a 308 bullet." The report went on to note that "some automatic weapons were present, but all had necessary permits through Meridian Arms. Meridian Arms [is] owned by Michael Riconosciuto, Robert Booth Nichols (no relation to John Phillip Nichols), and Don Oliver former Undersheriff of San Diego County. Meeting and testing took about one hour, then all parties left." Police officers had been placed around the surrounding area in a surveillance/protection type mode. Each of the six Indio police officers participating in the range surveillance were named individually in the report. The license plate numbers of each car that arrived on the scene was included in the Report along with the names and identification of everyone who attended the demonstration. Some of those names and I.D.'s were: "Michael Riconosciuto Researcher for Cabazon Indians." "Peter Zokosky President of Armtech Coachella." "John D. Vanderwerker and a couple of his friends Vanderwerker, CIA Research Director for CIA [for] 8 years." "Earl Brian Wisconsin businessman and CIA employee." "Two Nicaraguan Generals Eden Pastora, Commander Zero and Jose Curdel, Commander Alpha." "Raul Arana Central Caribbean research procurement front for liberation of Nicaragua (PreContra days)." "John Phillip Nichols Cabazon Indian Manager." "Wayne Reeder Builder/Developer""Jimmy Hughes Security Chief Cabazon Indians" "Art Welmas Tribal Chairman of Cabazon Indians." "Scott Wesley United States Army." "Honduran Telephone Company Military connection network in Southern Hemisphere." And others. The surveillance report indicated that Wayne Reeder and Earl Brian arrived together in a 1981 White Rolls Royce, License Plate Number OK 2XG2302. The two Nicaraguan Generals arrived in a 1981 Honda, License Plate Number AZ AFM877. A newspaper article in the Los Angeles Times, dated May 16, 1991, entitled, "Noriega Papers Claim CIA Sent Him Millions," by Mike Clary, reported that General Manual Noriega, Panama's former strongman leader, was paid more than $11 million from a CIA slush fund. A 107page Noriega defense document contended that Noriega once warned the CIA to put an end to cocaine shipments to the United States that were being used to raise funds for the Contras in Nicaragua. Noriega, who was scheduled to go on trial for drug smuggling on July 22, maintained that planes carrying arms to Nicaraguan rebels returned to the United States loaded with illegal drugs. It was clearly a guns for drugs policy, he said. The article concluded that "Noriega served as a conduit for cash payments from the CIA to onetime antiSandinista leader EDEN PASTORA." So, in 1981, Eden Pastora attended the Wackenhut nightvision goggles demonstration in Indio with numerous CIA employees in attendance, and ten years later, the L.A. Times reported that Pastora was a recipient of cash payments, via Noriega, from the CIA. ****** I believe it is safe to theorize at this point that the various tentacles of the Octopus heretofore outlined were used to develop and ship arms to various countries such as Nicaragua, Afghanistan, Lebanon, Pakistan, and other third world countries in exchange for cocaine and heroin. These countries certainly didn't have the funds to pay with cash. And it is possible that The Company was in fact the mechanism used to distribute the drugs after entry into the United States. The reader may be wondering how I obtained a copy of the abovementioned "Special Operations [surveillance] Report." I had requested a copy of it from both the Riverside District Attorney's office and John Cohen, investigator for the House Judiciary Committee on Inslaw, but the report was confidential and neither would send me a copy. I then called Peter Zokosky and asked him to corroborate the report's existence. He not only corroborated it, but he offered to send me a copy. When I asked how HE had obtained a copy, he said, "I asked a friend in Washington D.C. to go into the [House Judiciary] vault and make a copy for me." I received a copy shortly thereafter from Peter Zokosky. When I called John Cohen and mentioned I'd obtained a copy, he said he was aware that "someone" had gotten past the guards and into the House vault. He didn't know what had been taken, but he validated the document in my possession. CHAPTER 11 Michael Riconosciuto had some, if not all, of the answers to the gene splicing technology that Zokosky and Wackenhut had attempted to sell to the Army weapons division in 1983, and later fronted to the Japanese, through Meridian International Logisitcs, in 1988. I felt that time was of the essence in uncovering the nature of this technology, so I pushed Riconosciuto to talk about it. "It looks like Earl Brian, Sir Denis Kendall, Hercules Research, Wackenut, Zokosky and Bob Nichols were all involved in the same biotechnological agenda ..." Michael answered, "You got it." I asked, "Are they connected, or are they all individually working on their own projects?" Michael: "Yes." "How?" Michael: "Check out Bio-Rad Laboratories. Their international headquarters are on half of the property that used to be the Hercules plant, in Hercules, California. Do you understand what I'm saying? BioRad makes the most toxic biological and radioactive compounds known to man. And they're now located in the town of Hercules. BioRad Industrial Park. That building of theirs, the headquarters, doesn't look like much, but it goes 20 stories down into the ground. It's a huge underground complex. "See, BioRad was the flagship company, and then they [Earl Brian] started InfoTech, and then they got mired in lawsuits and then Hadron was formed to be a cutout parent corporation, you know, just to be a firewall from law suits ..." I asked, "What do they do at BioRad?" "Well, they make the most hazardous biological and nuclear chemicals in the world, for medical research." "Who do they sell it to?" "Well, front line researchers all over the world. BioRad is the single source for this stuff ... actually Aldrich Chemical sells it, there's about 100 companies, but BioRad is head and shoulder above all of them by a factor of ten on many things like Cytotoxins." I remembered reading about Cytotoxins in the Wackenhut/Cabazon biological warfare letters to Dr. Harry Fair. Michael continued ... "You look at Cytotoxic TLymphocytes. You go ask any medical professional what they're doing on the leading edge of research there? What the full implications to humanity are, OK?" I wanted clarification from Michael, so I answered, "It looks to me like research on a cure for cancer." Michael took the bait. "Go ask a professional. I'd rather have you hear it from a collateral source other than from me." "Well, give me some indication ..." Michael responded hesitantly, "It would have been Hitler's wet dream. It's selective to such a degree that it's awesome. With the appropriate genetic material, you can wipe out whole segments of humanity. There's no stopping it." "I asked, "You mean you could selectively wipe out certain races of people?" "Sure." "Jeez." Mike continued ..."And, also, from the beneficial side, you can very specifically wipe out disease cells, cancer cells. Look at the patents. Look at Immunix (phonetic sp.) Corporation, look at the patent portfolios on BioRad." "Who's BioRad's main buyer?" "Well, the National Institute of Health, you know, every hospital in the world buys BioRad products." I had read about Sir Denis Kendall, the famous M16 British intelligence officer during World War II, in "Who's Who in America," 1989 issue. Kendall had worked with Michael in some, as yet, undefined capacity. Bobby Riconosciutohad noted to me that Kendall and Ted Gunderson had counseled Oliver North prior to his testimony to Congress. Kendall was also heavily involved in arms and biotechnology, according to Michael Riconosciuto. "Who's Who" described Denis William Kendall as a "medical electronic equipment company executive," born in Halifax, Yorkshire, England on May 27, 1903. Kendall came to the United States in 1923, was naturalized in 1957. His background included being a consultant to the Pentagon on high velocity small arms from 1940 to 1945. He was listed on Churchill's War Cabinet Gun Board from 194145. He was later executive vice president of Brunswick Ordnance Plant in New Jersey from 1952 to 1956. From 1961 to 1973, became president of Dynapower Medonics in Los Angeles, and chief executive of Kendall Medical International, Inc. in Los Angeles in 1973. In 1983, the same year that Wackenhut was offering biological warfare agents to the Army, Sir Denis Kendall was the chairman of Steron Products, Inc. His club membership listings indicated he was a 32 degree Shriner in the Pacific Palisades (California) Masons and a member of the Religious Society of Friends (Quaker), amongst other things. I asked Riconosciuto, "What was Sir Denis Kendall's connection ...?" Michael broke in ..."He's involved in all of it. You might be able to get a handle on Kendall through Tiny Roland, a subsidiary of which is Penguin Books. And the other goodoleboy in the nail work is Octav Botnar. Then there's Wolfgang Fosog (phonetic sp.), Renee Hanner, Count Otto Linkee (phonetic sp.) ..." "How did you meet these guys?" "I was introduced through Joe Snell and Norman Davis. Snell was considered the father of industrial design. He was an industrial design artist who did the logos for Coca Cola, Chanel No. 5, Life Magazine. Norm Davis owned (unintelligble) brewery until he sold to Carling. My dad was his advertising and public relations man. My dad didn't know Kendall personally, but Norm Davis did. I met Kendall through Davis." "Do you know what Kendall is into currently?" "Sure." "What would that be?" "There's a pharmaceutical company in Los Angeles. There's a medical electronics company ... Ted Shannon in Los Angeles supervises all the production for that stuff. It's very exotic, far out stuff. And he's still in a controlling position in Brunswick [Ordnance] Corporation." I asked Riconosciuto, "How close was BioRad to your father's plant, Hercules?" Mike answered, "It's on the same property!" "Mike, when you were conducting research at Hercules, you were incubating something in fish tanks there. What was it?" Michael's response had a nervous edge to it. "Where ... where are you getting this?" Riconosciuto was unaware at that point that his hidden files were in my possession. "I'm just thumbing through some old documents ..." " ... Those documents aren't supposed to exist any more. They've all been destroyed." "By whom?" "Well, it was a matter of routine, you know ... they COULDN'T exist ..."" "Uh, huh." "That's what they're doing with all this stock manipulation, you know. The biologicals are what got them in the door at such a high level in Japan ..." I sensed Riconosciuto's possible involvement in the project, his reluctance to discuss it. But he believed I had "all" the records and he stammered on. " ... That paperwork trail shouldn't exist. I mean it was kept in a safe place, and then it was shredded. And the only people that had any direct knowledge of it was [Peter] Zokosky and Earl Barber, John Nichols, Bob Nichols, you know, those people ..." Michael was attempting to disengage himself from any responsibility for the research. " ... If there are any records left, those are their records, not any of ours [at Hercules], because I'm sure all of ours were destroyed." I asked, "Why did you destroy them?" "Well, do you understand the nature of this technology? You're talking in vague, general terms." I answered, "I have an idea ..." Michael interjected, " ... Horrible things. You know, it makes what the Nazi's did to the Jews look mild. The Romanian Project, do your homework on that project, you know it's a horrible germ warfare project ..." "Uh, huh." " ... And the Soviets were involved in it, and we countered it with our own methods." I noted to Michael that Bill Turner, the man who had met Danny Casolaroin the parking lot of the Sheraton Martinsburg Inn (with Hughes Aircraft documents) on the day before his death, was currently in jail. Turner had written a letter in which he talked about an Iraqi from the Iraqi Embassy who was facilitating the transportation of biological warfare items to Iraq. Michael responded, "Listen, Saddam Hussein introduced chemical and biological warfare agents to all his top military leaders. And he became enamored with this technology. He's been on a binge of sorts. Even when he was in the secret police of Iraq, he used chemical means on a wide scale ..." I asked, "But none of these various entities that I've just named were dealing directly with Iraq, were they?" "No, no. Not directly. All they needed was a VENDORS LIST." Riconosciuto noted that the shipments were all ITAR (International Trafficking of Armaments) regulated chemicals, electronics, communications equipment, anything that was on the ITAR list. ****** In August, 1991, the Financial Post ran a story on Dr. Earl Brian. At that time, Brian's main company, Infotechnology Inc. of New York was bankrupt, and its subsidiary United Press International (UPI) was on the verge of collapse. According to the Financial Post, the Securities and Exchange Commission and the FBI were investigating Brian, and a flurry of affidavits filed in the Inslaw Inc. scandal accused him of selling bootleg copies of the computer company's casetracking software (PROMIS) to the intelligence services of Canada, Israel, and Iraq. Brian was referred to as "Cash" in the intelligence community and reportedly had a close relationship with the CIA. He was a highly decorated combat surgeon in the Vietnam war in the late 1960's, allegedly working in the controversial Phoenix Program. This, according to a 1993 "Wired," premier issue, entitled "INSLAW, The Inslaw Octopus" by Richard L. Fricker. Wrote Fricker, "After a stint in Vietnam, where he [Brian] worked as a combat physician in the unit that supplied air support for Operation Phoenix, Brian returned to California ..." In 1970, Ronald Reagan appointed Brian director of the California Department of Health Care Services. He was only 27 and destined to remain a part of Reagan's inner sanctum. U.S. and Israeli intelligence sources linked Brian's name to the sale of weapons to Iran in the 1980's. "He was serving U.S. intelligence people, " said Ari BenMenashe, a former Israeli intelligence officer who claims he met Brian several times, once in Tel Aviv. Brian allegedly had more to do with the financial end of the transactions. Other publications listed Brian's holdings in the rapidly developing biotechnology field. The hightech empire of Dr. Brian was a grab bag of fledgling companies involved in all the hot areas lasers, cancer detection kits, bloodtesting products, genetic engineering, computer programs, telecommunications and investment databases. One of Brian's companies, Hadron, Inc. of Fairfax, Virginia, which, incidentally, both Michael Riconosciuto and Robert Nichols maintained Peter Viedenieks was involved in, was a laser manufacturer and computer services company. According to Bill Hamilton, president of Inslaw, Hadron had attempted to buy Inslaw in 1983. Dominic Laiti, Hadron's chairman at the time, had phoned Hamilton out of the blue and said Hadron intended to become a dominant vendor of software to law enforcement agencies. Would Hamilton like to sell? Hamilton demurred. "We have ways of making you sell," Laiti is said to have replied. Laiti, in an interview in 1988 with the Senate Subcommittee on Investigations, said he didn't remember calling Hamilton. Nevertheless, Hamilton said he believes his rejection of Hadron on that day in 1983 triggered an attempt by the Department of Justice to put Inslaw out of business, or at least bankrupt the small, Washingtonbased software maker. At that time, Peter Viedenieks was the administrator of the contract between Inslaw and the DOJ. Within a few months of Hadron's call, the Department of Justice, citing contract violations, stopped making payments on Inslaw's $10 million deal to install PROMIS software in its 20 largest U.S. attorney's offices nationwide. (PROMIS stands for Prosecutor's Management Information System.) Inslaw, starved of cash, was forced into Chapter 11 bankruptcy protection in 1985. Hamilton sued the DOJ for theft of property in 1986. In February 1988, Federal Bankruptcy Court Judge George Bason ordered the DOJ to pay Inslaw $7 million in licensing and legal fees. The DOJ, Bason ruled, had "stolen PROMIS from Inslaw through trickery, fraud and deceit," then tried to put the company out of business. The DOJ appealed Bason's ruling, but it was upheld. However in May, the U.S Court of Appeals reversed the decision on a technicality. Hamilton believed Dr. Brian and his old crony, former Attorney General Edwin Meese, were behind the attempt to bankrupt and liquidate Inslaw. When Inslaw refused to sell to Hadron, Hamilton believed the DOJ tried to bankrupt and liquidate Inslaw to force the sale of its assets, perhaps to Hadron, at firesale prices. Several journalistic publications accused Dr. Brian of profiting from the Justice Department's theft of the PROMIS software. According to a number of sources, Brian traveled the world during the mideighties, selling the data management program to intelligence and law enforcement agencies the world over. Brian's role, if any, in the October Surprise was less well publicized. The primary source thus far for the allegations that Brian was involved, is former Israeli intelligence officer Ari BenMenashe. Menashe alleged that Earl Brian helped make one of the first contacts between Republicans and the government of Iran in 1980. BenMenashe claimed Brian accompanied Robert C. "Bud" McFarlane to Tehran in late February 1980. The trip came shortly after the New Hampshire primary, when insiders knew that there would be a ReaganBush ticket. Earl Brian and McFarlane, then an aide to Senator John Tower (RTX), allegedly contacted Iranians with whom Brian had conducted business prior to the fall of the Shah. According to BenMenashe, one of these was Mehdi Bazargan, onetime Prime Minister, and in February 1980 still closely connected to the Iranian leadership. An old 1975 Sacramento Bee newspaper article, dated January 12, 1975, reported that Earl Brian, called the Genius Doctor by his friends, was out to get a little "of that Middle Eastern oil money." The article went on to say that Brian was "helping to write a proposal on health care for Iran." Brian, then at the University of Southern California, was working with Samuel Tibbetts of the California Lutheran Hospital Association, which in turn was working with a Chicago group. The Chicago group was not named and details of the proposal were not known. It is significant that Brian left his post one year before this proposal was written, in 1974, as Governor Ronald Reagan's Health and Welfare secretary. It was not known whether the contract with the Iranian government was ever consumated. Another interesting facet of Brian's background included his relationship with Senator Terry Sanford (DN.C.). Prior to his election, Sanford had been the attorney representing Earl Brian in his 1985 takeover bid for United Press International (UPI). Sanford was also instrumental in winning Brian an appointment to the board of Duke University Medical School. At that time, Sanford was the president of Duke University. Dr. Brian ultimately directed his energies towards biological technology. Another of his companies, Biotech Capital Corporation of New York, became 50% owner of American Cytogenetics, which was planning in 1982 to create a subsidiary to engage in genetic research. One notable investor in Biotech, when it went public in 1981, was Edwin Meese. Today, American Cytogenetics in North Hollywood, California, conducts Pap tests for cervical cancer. It also tests tissue samples for cancer and related diseases. Sales in 1985 were $3.4 million. Hadron, of which Dr. Brian was a director, provided engineering and computer consulting services, along with telecommunications products. Sales were $25.7 million in 1985. Clinical Sciences, Inc. sells biochemical products used for diagnostic tests and antibody analysis. Dr. Brian was also a director of this company. Sales in 1986 were about $4 million. ****** Michael Riconosciuto had stated that he believed Earl Brian held a financial interest in Bio-Rad Laboratories in Hercules, California. I was unable to locate Brian's name in Board directories, but obtained some documents on an OEM agreement between California Integrated Diagnostics, Inc., a wholly owned subsidiary of the InFerGene Company, ("Manufacturer") a Delaware corporation, and BioRad Laboratories, Inc. ("Customer") a Delaware corporation, which listed the terms under which the manufactuer would provide the customer with various products. Various exhibits outlined the product price list, delivery schedules, engineering specifications, etc. What made this agreement significant was a newspaper article published in the San Francisco Chronicle on May 31, 1991, entitled, "S.F. Firm Faces Toxics Charges." A criminal complaint had been filed against a law firm, an investment banking house and several lawyers and financiers involved with InFerGene Company for abandoning its toxic wastes after filing for bankruptcy. According to an affidavit filed by the Solano County District Attorney's office at the Fairfield Municipal Court, after InFerGene was evicted from the premises, a county inspector found several hundred containers including petri dishes and vials marked "chlamydia, herpes, and HSV2." Many others contained "bacteria of unknown etiology." A Vacaville newspaper reported that on December 7, an environmental health inspector found 36 55gallon drums of radioactive Butanol containing "beef mucosa." They were improperly stored and lacked labels showing content, hazard warning or the owner's business address. A followup report made by the environmental health office noted that a Halloween 1990 investigation into a smell was traced to a door with a radiation warning on it. The department had recommended that the lab doors be sealed and the pipe opening sealed. In all, the county Environmental Health Department had responded four times to complaints about smells from the InFerGene labs in the Benicia Industrial Park well before it shut down in February. One complaint listed persistent smells causing nausea, a problem also cited by others still working in the area. Founded in 1983, InFerGene specialized in DNA technology, making diagnostic test kits for AIDS, hepatitis and other diseases. My research led me to another article on Bay Area bio-labs. In June, 1991, the San Francisco Examiner published a story entitled, "Germ War Lab Alarms Berkeley" which noted the community of West Berkeley "was home to the Defense Department's one and only supplier of antiplague vaccine." On December 28, 1990, four maintenance men made an unauthorized entrance into a room at Cutter Biological which housed Yersinia pestis, commonly known as "The Black Plague," which once killed a quarter of the population of Europe 650 years ago. There was no harm to the workers and no release of the live bacteria, but if an accident had occurred, all of Berkeley would have been wiped out. ****** It is impossible NOT to compare the two incidents in the San Francisco bay area with the Wackenhut proposal to develop biological warfare viruses on the Cabazon Indian reservation in Indio, California. In order to develop vaccines, which sounds innocuous enough, the virus must first be created. In the case of biological warfare viruses, the disease would have to be highly sophisticated indeed, if it were to be used in military applications. Certainly nothing that would be easily recognizable, if it escaped the laboratory, to a layman medical doctor in Indio, California, or for that matter at any Indian reservation in the United States. Any type of biological research on an Indian reservation would not be subject to scrutiny by the federal government because Indian reservations are sovereign nations. Nevertheless, if a virus DID escape a secret government installation at an Indian reservation, the reservation would provide an ideally "isolated environment" for further study (by a government entity) of affected subjects or victims under quarantine. Not a very pretty picture. Yet this was the exact nature of the proposal by Wackenhut to Dr. Harry Fair of the Army weapons division. For the first time, I began to notice various "mysterious" illnesses cropping up in the media. I'm sure there have been unidentified diseases throughout history, but for the first time, I was conscious of what was written about them. The first to capture my attention was the sudden deaths of twelve Navajo Indians in New Mexico and Arizona. A June 3, 1993, Department of Health Services interoffice memorandum distributed to public health laboratory directors throughout California labeled the virus a "Mystery Illness in New Mexico and Arizona." The memo asked, "Is it in California too?" On June 2, 1993, New Mexico officials had reported a total of 19 cases, summarized as follows: Of the 19 cases, 12 were Native American Indians. Twelve died. All of the victims were residents within a 100 mile area in northwest New Mexico and Northeast Arizona. The symptoms included fulminant respiratory distress which killed within hours. There was "NO IDENTIFIABLE CAUSE." This was printed in capital letters. Under "Etiology" (origin), the memorandum noted, "[The illness] remains a mystery despite extensive testing at University of New Mexico Hospital, New Mexico Department of Health, and CDC. If etiology were plague, anthrax, tularemia, some cases should have been identified by cultures/stains ..." Oddly, nationwide media printed stories stating that the illnesses were caused by rat droppings, yet the actual documents from the Department of Health Services in Berkeley, California, confidentially given to me by a laboratory director in June 1993, mentioned nothing about rat droppings. I later read about a mystery illness in TIME magazine, November 22, 1993 issue entitled, "The Gulf Gas Mystery," which reported that American troops in the Persian Gulf, upon returning home, were complaining of chronic diarrhea, aches in all the joints, and difficulty breathing. Several veterans and their families testified before a congressional committee that the Defense Department had ignored their complaints, and the Veterans Affairs Department downplayed the affair. The veterans themselves were convinced they had been exposed to "diseasecausing chemical agents" while in the Persian Gulf. Eightthousand veterans registered their symptoms with the U.S. government, thus labeling the disease "Gulf War Syndrome" (GWS). Ultimately, the disease was determined by Major General Ronald Blanck, commander of the Walter Reed Army Medical Center, to be "multiple chemical sensitivity," syndrome. A board of inquiry was created headed by Joshua Lederberg of Rockefeller University, a Nobelprizewinning expert on rare and emerging diseases. But, noted TIME, "It is up to the Pentagon to bridge the credibility gap that seems to have sprouted over the strange new syndrome." It was not until 1996 that the Pentagon admitted GWS may have been caused by exposure to bombed chemical/biological plants in Iraq. By far the most provocative incident occurred in February, 1994. The SpokesmanReview, out of Spokane, Washington, printed a story on August 9, 1994, entitled, "Victim of Mysterious Fumes Seeks Investigative Reports." In Riverside, California, the county in which the Cabazon Indian/Wackenhut facility is located, Dr. Julie Gorchynski, an emergency room doctor, was overcome by mysterious fumes while examining a woman who later died. "This is a bona fide, genuine medical mystery, and we intend to solve it," said Russell S. Kussman, attorney for Dr. Gorchynski. Gorchynski suffered from osteonecrosis, avascular necrosis of bone, posttraumatic stress disorder, shortness of breath, restrictive lung disease and other ailments, as a result of exposure to the dying cancer patient on February 19th. Coincidentally, her symptoms matched those of GWS. Later, in the same newspaper, dated September 3, 1994, another article emerged regarding the Riverside mishap. The bizarre episode had sent six emergency room workers to hospitals after being exposed to fumes emitting from patient Gloria Ramirez's blood samples drawn on February 19, 1994. According to the state's 15page report, 11 people reported smelling an unusual odor after blood was drawn from Ramirez. After five collapsed and the emergency room was evacuated, 23 people complained of at least one symptom, most commonly headache, dizziness, and nausea. More serious complaints included muscle spasms and breathing disruptions. "Despite extensive epidemiologic, toxicologic and environmental investigations, the cause of the outbreak of symptoms among emergency room staff members ... remains unknown," the report concluded. Dr. Gorchynski's lawyer stated that it could only be a toxin. "It's physically impossible for Julie to have had the symptoms, and not just the symptoms, the laboratory findings and test results that showed ... clearly Dr. Gorchynski was poisoned that day." But epidemiology experts could find no culprit to explain the bizarre episode. The Department of Health Services ultimately described the incident as an outbreak of "mass sociogenic illness," perhaps triggered by an odor. I could not help wondering if the deceased Gloria Ramirez was an Indian, or had ever been on the Cabazon reservation in Indio? I later learned she had been receiving experimental cancer treatments at a clinic in Mexico. J.M., Ted Gunderson's live-in partner, on more than one occasion had noted that she held in her possession a photograph of Gunderson and Sir Denis Kendall, the British M-I6 officer who owned bio-labs in Los Angeles, standing in front of a Mexican cancer clinic. According to J.M., the photo had been used in an advertisement seeking nurses to work at the clinic. Without a copy of the photo, I was unable to determine if it "might" be the same clinic which Gloria Ramirez attended prior to her death. ****** In February 1993, I was contacted by a U.S Customs agent who was conducting an inquiry into the whole Inslaw, Peter Viedenieks, Wackenhut affair. The man had flown in to California from back east to interview Mike and Bobby Riconosciuto and other witnesses associated with the Inslaw case. Someone, whom he would not identify, advised him to contact me. On February 5th, he and his partner drove to my home in Mariposaand spent the day. I provided him with an affidavit relative to Riconosciuto's attempted trade into the Witness Protection Program. The affidavit contained mostly drug-related information on The Company and Robert Booth Nichols' connection to Michael Abbell (DOJ) and the Cali Cartel. The agent also obtained a tape-recorded statement, under oath, relative to my findings and left with an armload of documents. (Two years later, in 1995, Abbell was indicted for money laundering for the Cali Cartel and drug related charges). He called frequently after that (1993), once from a phone booth in the dead of night after visiting Langley, Virginia. We subsequently struck up an investigative collaboration of sorts. On September 3, 1993, I received a call from him in Palm City, Florida. He had interviewed Robert Chasen, former Executive Vice President, Systems and Services Group, of Wackenhut Corporation in Coral Gables. Chasen, 70, was still senior consultant at the Florida facility, but was allegedly dying of cancer and weighed less than 100 pounds at the time of the interview. Because he (Chasen) had once been Commissioner of Customs in Washington D.C., he felt a rapport with this young agent and spoke candidly about his experience with Wackenhut in Indio. Of significance, was Chasen's confirmation of the horrendous properties of the "virus" which he encountered at the Indio facility. He said, "Wackenhut was running amuck." Robert Nichols and Peter Zokosky had attempted to sell the biological warfare technology (developed in cow uterises) through Wackenhut, using Robert Frye, Vice President of the Indio facility, as the front man. According to Chasen, Frye went behind his [Chasen's] back in facilitating the project; when Chasen learned of the project, he shut it down. (Chasen supervised the Indio facility from Coral Gables, Florida.) Because of the projects underway at the Cabazon reservation, Chasen chose not to step foot on the property, but instead met with the Indio executives in Palm Springs. In other respects, Chasen was not so candid. Though the Customs agent said Chasen "said a lot of derogatory things about Wackenhut in Indio," he did not admit to knowing Peter Viedenieks. The agent's investigation had led him to believe that the PROMIS software WAS stolen, and Viedenieks WAS involved in the theft, but he did not have enough evidence to take his case to court. Chasen was evasive on the subject of PROMIS, though his background would indicate that he must have been knowledgeable about it. He had been a Special Agent in the Washington D.C. Federal Bureau of Investigation from 1943 to 1952. From 1952 to 1968, he was Vice President and President, respectively, of ITT Communications Systems in Chicago, Illinois and Paramus, New Jersey. He became Commissioner of U.S. Customs in Washington D.C. from 1969 to 1977 the same time span that Peter Viedenieks was in and out of Customs. I called Dick Russell (author of "The Man Who Knew Too Much") to act as a "cutout" for me and interview Chasen. At that point, I didn't want to expose myself to Wackenhut, so Russell agreed. When Russell called back, he said Chasen didn't trust Robert Booth Nichols. Wackenhut had "run a check" on Nichols and couldn't learn anything about his background. This had bothered Chasen, but, he said, Robert Frye and Dick Wilson were "dazzled" with Nichols. Chasen believed Nichols worked for the CIA, said he was a "slippery guy," and couldn't understand why Frye and Wilson were dazzled by Nichols for such a long time. Reportedly, George Wackenhut liked Frye and Dick Wilson, but did not trust Riconosciuto or Nichols. Michael Riconosciuto had been introduced to Chasen as a "specialist engineer in weapons." Chasen acknowledged the biological technology introduced by Nichols and Zokosky, saying it had been presented to him as something that could "create anything from chicken soup to long range missiles." When he learned of the properties of the technology, he halted it immediately. When pressed for further details, he added reluctantly, "It was the kind of thing your mind erases." Regarding the Cabazons, Chasen said he felt an affinity with Arthur Welmas, Chairman of the Cabazon Band of Mission Indians, because his [Chasen's] wife is part Cherokee. He noted that he sympathized with their situation and wanted to protect them. Perhaps he protected them more than he realized when he shut down the Wackenhut proposal to the Army to develop biological viruses (and vaccines) on the Cabazon reservation. ****** One year later, on September 5, 1994, TIME magazine published an article on page 63 entitled, "A Deadly Virus Escapes," in which a Yale University researcher was exposed to the deadly Brazilian "Sabia" virus when a container spinning on a highspeed centrifuge cracked, causing the potentially lethal tissue to spatter. Fortunately, the researcher was wearing a lab gown, latex gloves and a mask, as required by federal guidelines. Every surface of the area was scrubbed with bleach, all instruments were sterilized, then wiped down again with alcohol. Having decided the danger was over, he didn't bother to report the accident, and a few days later he left town to visit an old friend in Boston. Soon after the researcher returned to Yale, he bagan running a fever that reached 103 F. An experimental antiviral drug eventually stopped the illness, but the man had exposed five people, including two children, before being confined to a hospital isolation ward, and another 75 or so healthcare workers after that. The Sabia virus is particularly frightening because it kills in such a grisly way. Characteristic symptoms are high fever, uncontrolled bleeding in virtually every organ and finally shock. The liver turns yellow and decomposes. Blood can leak from literally every bodily orifice, including the eyes and the pores of the skin. Sabia was never seen before 1990, when a female agriculatural engineer checked into a hospital in Sao Paulo, Brazil, with a high fever. Within days she was dead. Fortunately, in the Yale University incident, none of the potential victims died or showed any evidence of symptoms. A book and movie on the Sabia virus's counterpart, the lethal Ebola virus from Central Africa, which is as deadly and as gruesome as AIDS, yet has an incubation period of only one week, was underway at the time and was later released in 1994. The book, "The Hot Zone," described a victim who contracted Ebola. TIME wrote, "His eyes turn red and his head begins to ache. Red spots appear on his skin and, spreading quickly, become a rash of tiny blisters, and then the flesh rips. Blood begins to flow from every one of the body's orifices. The victim coughs up black vomit, sloughing off parts of his tongue, throat and windpipe. His organs fill with blood and fail. He suffers seizures, splattering virussaturated blood that can infect anyone nearby. Within a few days the victim dies, and as the virus destroys his remaining cells, much of his tissue actually liquifies ..." The Ebola virus, found in the rainforest regions of Central Africa, once caused an outbreak in 1976 through villages near the Ebola River in Zaire, killing as many as 90% of those infected. Such dangerous viruses may seem a distant menace, wrote TIME, but "The Hot Zone" details a 1989 Ebola crisis that occurred in the Reston, Virginia Primate Quarantine Unit, run by a company that imports and sells monkeys for use in research laboratories. When an unusual number of monkeys originating from the Philippines died, tissue samples were sent to a U.S. Army research center. There a technician identified the strands as either Ebola Zaire or something very close. Even more alarming, the virus found in Reston, Virginia, unlike the African one, could be transmitted through the air. Frantic phone calls were made to Virginia health authorites and to the Centers for Disease Control in Atlanta. An Army team, wearing space suits, went into the Reston building and killed 450 surviving monkeys, then placed them in plastic bags for safe disposal. Before the building was boarded up, the Army sterilized every square inch of the interior. No humans were infected with the virus, but Richard Preston, the author of "The Hot Zone," wrote, "A tiny change in its genetic code, and it might [have] zoomed through the human race." A rival 1995 film on the same subject entitled, "Outbreak," directed by Wolfgang Peterson, also focused on the Ebola virus. CHAPTER 12 It was time to interview Robert Booth Nichols. I was communicating regularly with Ted Gunderson and one day, on an impulse, I asked him for Nichols's telephone number. Gunderson hesitated, then gave me the telephone number of a "relative" of Nichols' in Los Angeles, stating that he really couldn't give out Robert's home number without first consulting him. I called the relative and left a message for Nichols to return my call. The call came back on December 31, 1991. There was an intriguing international flavor to Nichols' voice. The tone was hostile but polite, and inquiring. Essentially, Nichols wanted to know why I was communicating with Michael Riconosciuto? I explained to him that I was writing a book on government sanctioned drug trafficking and Michael had information to offer on local corruption. During the conversation, which lasted about 45 minutes, Nichols admitted that he worked for FIDCO and used the code word "Wa Latteral" for the operation in Lebanon. The following are some excerpts: CM: "Do you know anything about Michael Riconosciuto in Lebanon?" Nichols: "Never." CM: "He [Michael] talked about an interesting operation in Lebanon." Nichols: "What was it called, the operation? I've heard of quite a few projects in Lebanon. If I've heard of it, I'll tell you." CM: "Well, what was the code name of the one that you heard about?" Nichols: "Wa Latteral." CM: "Wa Latteral? And what type of operation was that?" Nichols: "Well, it was trading in two directions. Now what's yours?" CM: "Same thing." Nichols: "Wa Latteral? Yours is the same name?" CM: "No. I've never heard that name before." Nichols: "Well, what was the code word of the one Michael said he was involved in?" CM: "I would have to go over all of my notes, to tell you the truth. It didn't seem important at the time, so I don't have it off the top of my head ..." Nichols: "What the project was, I can tell you very clearly, there's nothing secret about it now, was to develop an agenda whereby all sides, the Muslim and the Christian sides, would come to an agreement on a redevelopment project to where their respective areas would have the same capitalization, and the same benefit to stop the fighting." CM: "Did this include rebuilding of the infrastructure of Beirut?" Nichols: "Very definitely." CM: "Did this have anything to do with FIDCO?" Nichols: "Uh, FIDCO was involved in it, right. That was an effort by that company, as I understood it ... the project was to make sure that both sides developed building programs that were initiated concurrently and the development was fair and equitable to all sides, to stop the fighting." (I wondered why an "arms dealer" wanted to stop the fighting in Lebanon?) CM: "Was there ever any subsidiary of that corporation called Euramae?" Nichols: "I never heard that name before." CM: "Ted Gunderson gave me a huge manual on The Octopus ..." Nichols: "In my opinion, to research anything of that magnitude you are looking at -- it would require a lot of money and a lot of travel and a lot of patience. I don't think Ted Gunderson knows anything, personally. He's domestic. It's not his area." CM: "Did you operate a telex company with him during the Olympic Games?" Nichols: "Absolutely not. A telex company. Absolutely not. Oh, jeez. Did you ask Ted Gunderson that?" CM: "Well, no, I didn't ..." Nichols: "Well, you can't be shy. You have to ask questions, or else how do you know?" CM: "What did Danny Casolaro spend so much time on the phone with you for?" Nichols: "Danny used to ask me different things. But Danny was more into the names in Paris and Switzerland and -- Danny was investigating the whole international situation. You have to spend a lot of money and do a lot of traveling. Danny had said to me that he had a whole agenda worked out, you know, where he was going to go and who he was going to see. And I mean it was literally a global trip ..." Nichols said he believed Danny was murdered and did not commit suicide. He believed Danny's death had to do with the international scene, someone Danny had contacted overseas. I asked him, "Do you suppose his death had anything to do with the Justice Department?" Nichols answered, "I would say, `Time will tell. Time will tell.'" I pressed Nichols about his civil suit against FBI agent Thomas Gates: Nichols: "The activities that I've been involved with, I can tell you very clearly, an effort was made for many years to benefit a lot of people that were involved in the corporation. That effort was destroyed by certain moves [by agent Gates]. And it caused a great deal of hardship to myself and quite a few other people who are very angry about it. And we'll deal with that matter in court." CM: "What was Gates investigating?" Nichols said he wrote two stories for some Italian movie producers. "They were `sensitive' stories, about overseas. What I did, was I took two little, very brief parts of two stories to copyright in the United States. And so they're very diluted, but enough for the copyrights. "That's when I met the guy from Universal [studios], because he wanted the stories. And the French wanted the stories ... in 1987, but the stories haven't changed, they're still pertinent." Gates had overheard the "pertinent" parts on the wiretap and initiated an investigation. I made a mental note to try to convince Nichols at a later date to provide me with the manuscripts. But I didn't want to push him during our first conversation. ****** I later asked a friend in Washingto D.C. to research Nichols' copyrights at the Library of Congress. There were indeed two stories copyrighted by Robert Booth Nichols under the pseudonym of R.N. LeDevoilier. Perhaps he was unaware that a cross-reference would reveal his true identity. The 20-page manuscript entitled "Acceptable Casualty," essentially outlined gays and I.V. drug users as targets of bio-war by a cabal of military intelligence officers. In the story, a secret file, "C-911-Tuhnekaw," revealed the origin of the first AIDS infection. Field research dated November 12, 1977 originated from a Bay Area laboratory destroyed by fire in December 1975. Assorted bio-labs were mentioned, one in Palo Alto, California. The hero of the story obtained the secret cure from "the Chosen Ones" and escaped to Singapore with his family. Interestingly, the names of those involved included "Yutaka Okimoto" and "Lawrence Zokosky," the last names of which match those listed on Nichols' "real life" corporation, Meridian International Logistics (MIL). Nichols also copyrighted a 90-page James Bond type treatment entitled, "Decision of Conscience," which described state-of-the-art electromagnetic technology (launchers) used to demolish a two-story concrete building. I later found the words, "Decision of Conscience," written in Danny Casolaro's handwritten notes also. Nichols' secret desire to write about his exploits in the CIA had led him to contact Jack Valenti, president of the Motion Picture Assn. of America, through his (then) corporate partner Eugene Giaquinto. The three met at the Beverly Hills Hotel where Nichols attempted to sell Valenti manuscripts disclosing top secret CIA technology. Nichols later said Valenti refused the manuscripts because they contained "classified national security information." (Valenti once served as assistant to President Lyndon B. Johnson). ****** During several phone conversations with reporter Jonathan Littman, I learned that he had communicated with Danny Casolaro on a regular basis prior to Danny's death. At the time, I wondered why Littman hadn't written a story on Danny, since he was one of the few reporters to have spoken extensively with him? I would have that answer soon enough. My confidence in Littman nearly cost me my life. An incident which I am about to relate forced me to document the following events, which I titled, "Vortex," and subsequently turned over to John Cohen, investigator for the House Judiciary Committee on Inslaw. Cohen had strenuously advised me to send it to him as he feared for my life. "Vortex" was also the "affidavit" I supplied to the Customs Agent who interviewed me in February 1993. During the course of our conversations, Littman had noted to me that he had a close relationship with Robert Booth Nichols, Peter Zokosky and Ben Kalka of The Company. Littman also verified to me that he was in fact, Kalka's cousin, but he (Littman) was a secretive, noncommunicative individual and I didn't press him for explanations. Kalka was currently serving time in prison for possession of 900 pounds of methamphetamine. Littman did, however, confide that Kalka hated Michael Riconosciutobecause Riconosciuto was responsible for Kalka's imprisonment. I described how former Assistant U.S. Attorney Brian Leighton appeared to have perjured himself at Michael's trial, and asked Littman's opinion of that. Littman stated simply that it didn't matter if Leighton had perjured himself, nothing should be done to get Michael out of jail. There should be no mistrial or acquittal or anything of that nature because Michael was probably guilty of the crime for which he was incarcerated. I didn't pursue the matter further at that point. Meanwhile, Littman offered to arrange an interview with Robert Booth Nichols and Peter Zokosky for me. In exchange for this, he wanted me to arrange an interview with Tony Patterson and Raymond Lavas (Ted Gunderson's former forensics expert) through Bobby Riconosciuto. Tony Patterson had allegedly served with Robert Booth Nichols in Vietnam, and Raymond Lavas had access to Michael Riconosciuto's hidden computer tapes. Both men were watching over Bobby Riconosciuto while Michael was in jail. I said I would do the best I could to arrange the interviews. Bobby was the only person communicating with these individuals and only she knew how to contact them. I never mentioned to Littman that I had been communicating with Robert Nichols on the phone. I can't say what my reasoning was at the time. Intuition, I suppose. Bobby Riconosciuto reluctantly agreed to set up the interviews with Patterson and Lavas, though she pointed out that neither man trusted journalists. I naively assured her that Littman would be okay. It is noteworthy that Littman had been communicating with Bobby and Michael for several months prior to my introduction to them, yet, they didn't completely trust him at that stage of their relationship. When they learned of his relationship with Ben Kalka, they didn't trust him at all. Elizabeth Riconosciuto's fifth birthday party was scheduled to be celebrated at the La Mirada Gateway Holiday Inn on February 14, 1992 at 11 a.m.. Reportedly, Patrick Moriarty and Marshall Riconosciuto had a financial interest in the hotel and they were paying the bills. Littman and I decided that would be a good weekend to confidentially interview Robert Booth Nichols and Peter Zokosky in Los Angeles, and it would give Littman the opportunity to meet Bobby Riconosciuto facetoface. We would also squeeze the Patterson/Lavas interviews in during that time. Michael Riconosciuto was cooperative about allowing his wife to be interviewed by Littman because it would give the journalist a closeup view of Michael's "family" in action. Tom Olmstead, Michael's lawyer, was scheduled to attend the birthday party as was Patrick Moriarty and Marshall Riconosciuto. After the luncheon celebration, the children and those adults who wanted to tag along would go to Disneyland. Michael Riconosciuto had dual motives for wanting Littman in attendance. Olmstead had been instructed to pressure Littman to reveal "who" had sent the incriminating 1983 "drug" transcript to the prosecuting attorney in Michael's trial - only Littman knew if it had been Ben Kalka or Littman himself. (Littman had obtained it originally from Peter Zokosky). On Tuesday evening, February 11th, Littman confirmed a Thursday appointment with Robert Booth Nichols. However, he stressed that Nichols had insisted that the meeting be kept absolutely confidential. No one in media or Michael Riconosciuto's circle was to know of the interview. I agreed, but explained that I had already mentioned briefly to Michael that I "planned" to interview Nichols at some future date. Michael had said he understood the importance of interviewing Nichols and he would cooperate. I even asked Michael to notify Tony Patterson and Raymond Lavas, via Bobby, that Littman and I would be interviewing them during our trip to Los Angeles. Littman said that was alright, but I was to tell no one else associated with Michael. I noted to Jonathan that he might want to inform Nichols that I had already mentioned to Michael that I "intended" to interview Nichols at some time in the future. Littman said leave it at that. No problem. Littman spent the night at my home in Mariposa on Wednesday night. The following morning, on February 13th at 7 a.m., we departed for Los Angeles. Strangely, at the last moment, Littman decided to follow us to Los Angeles in his own car. I rode intermittently with Littman, then with my husband, during the fivehour drive. At hour intervals, Littman pulled off the freeway to report to Nichols - and to a police officer in San Francisco whom he did not identify, but described as his "security." At noon, we arrived at Nichols' Sherman Oaks apartment building. Littman punched in #68 and spoke briefly to Nichols, who buzzed the door open. At Nichols' apartment, #103, Littman pointed out the electronic security system on the front door, then at the last moment, instructed my husband to wait in the van. We owned a 1991 Chevrolet conversion, so he napped and watched television the rest of the afternoon. Towards the end of the fivehour meeting, Nichols invited him up for coffee and cake. Peter Zokosky and his wife (former Mayor of Indio), Robert Booth Nichols and his wife, Ellen, were present inside the apartment. Littman had previously warned me that the apartment was electronically wired to detect any listening devices I might be wearing on my body. I said I had none. Littman had also warned me that I would be seated on a couch next to a stuffed lion which had a tape recording device (bug) under its tail. Sure enough, when I entered the apartment, I was seated on a white couch near the lion. A giant anaconda skin hung stretched across the wall. European and African relics decorated the apartment. It was instantly obvious that Nichols and his wife didn't live in the apartment, it was a meeting place. Nichols smoked cigarettes and as a result, kept the upstairs windows in the apartment open, allowing a cool February breeze to flow through the apartment. Nerves, and the cool air induced me to keep my light coat on during most of the interview. At first, Peter Zokosky, a friendly, congenial man, did most of the talking. As the conversation warmed up, Nichols entered intermittently, then took over completely. A formal gourmet luncheon was served of curried soup, salmon and turkey finger sandwiches, wine and homemade strawberry cake. Ellen Nichols was the perfect hostess, but rarely said a word. At one point during lunch, Nichols instructed Ellen to get the camera and snap a front and side picture of me, which she carried out silently. There was no explanation given for the picture. After lunch, Nichols often stood or sat at the open window while he talked and smoked. It was cold and rainy, and I wondered why he kept glancing down at my van. Littman frequently left the room to attend to something in the back of the apartment. I was unable to determine what he was doing, but noticed that he took no notes and never once joined in the conversation. Nichols was aptly described in magazine articles as "Clark Gable without the ears." But his mannerisms were intense, simultaneously controlled and dramatic. I intuitively sensed the violence in him, but only through his eyes. He studied me intently as I spoke, making every effort to throw me off balance by continuously correcting me. He also would not speak while I wrote on my notepad, stopping mid-sentence each time I put pen to paper. It worked in some cases, but I finally rallied. I was in HIS apartment, with women present, though they were busy in the kitchen, and my husband was parked outside the apartment. I was certainly in no physical danger, so I gathered myself and bluntly asked the questions I had driven 350 miles to ask. Referring to the U.S. currency and gold transfers into Swiss bank accounts, Nichols admitted that he was contracted by the government to "handle" the 42 Cobra helicopters which Michael had said were stored in Europe, then shipped to Iraq via North Korea. At first he would not say what he did with the helicopters, but then revealed the entire operation. John Vanderwerker at Intersect Corporation in Irvine, California, had been the CIA facilitator. It was a "classified" CIA operation, though Nichols would not give the name of the White House official behind it. I assumed it was Michael McManus, but didn't push it. Glenn Shockley had brought Nichols into the operation. At least I had verbal confirmation of the operation, and unknown to Nichols, I had the entire paper trail. Regarding Danny Casolaro, Nichols and Zokosky both insisted that Danny had been "murdered." Danny's book research had progressed to a point where he was looking overseas for answers and Nichols had offered to direct him to certain connections that would have completed his investigation. Nichols confirmed that he was privy to Danny's findings on a regular basis, but chose not to elaborate on the content of his last conversation with Danny. I continued to press him for information on the "cause" of Danny's death; what had he discovered that caused him to be murdered? Nichols responded defiantly that he knew why Danny died, but he said "no journalist or investigator had done enough work to be deserving of that information yet." It was not until the end of the meeting, when we had established a tentative rapport, that Nichols offered to take ME to Europe, as he had Danny, to find the answers to my investigation of the Octopus. But, he stressed it would be very expensive and I would be gone for several months. I remember the probing look on his face as he made the offer. I had nodded slowly, stating I would give it some thought. I wondered fleetingly if he was trying to recruit me into the CIA? Or create a new Manchurian Candidate? Regarding the stolen PROMISE software, Nichols said he believed Michael Riconosciuto had been contracted by the government to "derail" Bill Hamilton at Inslaw. According to Nichols, Michael DID have the PROMIS software codes. Allegedly, Peter Zokosky's "brother" sold copies of the software to Israel. Zokosky nodded in agreement at that statement. Nichols said Michael HAD to know he was going to be arrested for operating a meth lab, but he (Michael) thought the FBI would bail him out again. Someone named (Admiral) Al Renkin allegedly "covered Michael's drug act." I never knew what that meant and didn't pursue it, as I wasn't there to learn about Michael Riconosciuto. While we were on the subject of drugs, I took the opportunity to question Nichols's involvement. I lead in by describing the drug situation in Mariposa county, adding that the entire country seemed to be economically dependent on the drug trade. Nichols nodded in full agreement, then noted that Europe's economy was completely dependent on drug money. Without drugs, banks and whole countries would collapse financially. We moved into another area of discussion. Peter Viedenieks was an associate of Earl Brian, according to Nichols. Other names were tossed around such as Senator Terry Sanford, a family friend of Earl Brian. Sanford was Nichols' link with Earl Brian. And, noted Nichols, Viedenieks was associated with Earl Brian through Hadron Corporation. Allegedly, all of these fellows had met at Nichols' "007" Playa Del Ray condo at one time or another, including Viedenieks. It is noteworthy that at the time of this meeting, neither Nichols or I could have foreseen the importance of this information. The issue of Viedenieks' connection with Earl Brian or Terry Sanford, or even Nichols himself, had not been raised publicly yet. At the time, I didn't place any particular significance on Nichols' relationship with Earl Brian or Peter Viedenieks, I just took the information at face value and wrote it in my notes. Nichols reacted violently when I asked him if he had any business dealings with Brunswick Corporation in New Jersey. He jumped up from his chair by the window and yelled, "Absolutely not!" I quickly explained that I had looked up Sir Denis Kendall (the famous M16 World War II British officer) in "Who's Who in America" and learned that he had once been associated with Brunswick. Nichols said he did not know Sir Denis Kendall. His eyes told me otherwise. I noted that was strange since Michael Riconosciuto seemed to know him well. Nichols and Zokosky exchanged glances. I further explained that Bobby Riconosciuto said she had been to Kendall's home on Doheny Drive in Beverly Hills with her children once. She had often called Kendall when she was trying to locate Michael, and within hours of calling Kendall, Michael always called her back. Nichols and Zokosky seemed disturbed by that statement. I didn't mention that Riconoscituo had stated Kendall was Nichols' supervisor (CIA "handler"), or that J.M., Ted Gunderson's research partner, had found a brochure in Ted's files advertising for Swedish nurses at a medical research complex in Mexico. The brochure contained both Gunderson's picture and Sir Denis Kendall's. I had obtained all of the documents pertaining to Nichols' current lawsuit against Thomas Gates of the Los Angeles FBI, his corporate activities and his weapons permits. Nichols had been investigated by Gates for allegedly turning over sensitive information to organized crime figures in America and the "Yakuza" crime syndicate in Japan. Nichols' corporation, Meridian International Logistics, Inc. (MIL), the parent company to Meridian Arms, had filed a lawsuit against Gates for contacting Nichols' European and Japanese business associates. As a result, not only were Nichols' weapons permits cancelled, but his associates were allegedly intimidated by the investigation, thus damaging Nichols' ability to transact business. I was curious about how far Nichols would take the lawsuit, and exactly what the nature of the research was that MIL fronted to the Japanese. I started out by asking Nichols if he had provided a "grant" to a Japanese facility for biological research? Nichols said he had provided no grant to any Japanese facility and attempted to change the subject. Nichols was not evasive, but aggressively direct when he did not want to discuss something. Michael Riconosciuto had once commented to me that the biological technology which Nichols was involved in was "Hitler's wet dream." According to Michael, who was uncharacteristically hesitant about discussing the subject, "biotechnology was the weapon of the future, making all other weaponry obsolete." In Michael's files in the desert, I had retreived a small cylindrical cannister, about six inches in length, with a cap on it. The metal cannister had not been marked, and instinctively, I had not opened it, but had placed it on a shelf in our empty guest house in Mariposa. It was not until months later, after Michael learned I had copies of his documents, that I had asked him what the cannister contained. Michael had become disdraught, explaining that the cannister contained genetic material in a hybridoma base, a military concept, only to be used for military applications. Michael had stolen the cannister from a shipment at Wackenhut destined for King Fahd of Saudi Arabia and placed the sample in his files in the desert. (Proposals had also been underway with King Fahd to provide "security" for his palace). His voice had been fraught with worry. He implored me to remove the cannister from my property immediately, take it to a "class 4 facility" where it could be disposed of. I was absolutely NOT to open the cannister as it contained lethal toxins. Later, at the meeting with Robert Booth Nichols, I again wondered why arms dealers such as Peter Zokosky and Robert Nichols would be interested in genetic research? Five years earlier, Zokosky and Wackenhut Corporation had attempted to sell "biological warfare viruses" and vaccine kits to the U.S. government to be used against small countries bordering Albania or large countries bordering the Soviet Union. I did not openly confront Nichols at his apartment about the above documents, but asked him if he had sold or facilitated the research of specific biotechnology to the Japanese? Nichols adamantly denied any involvement in any such research. When I rephrased the question, and he realized I knew about the MIL agreements, he admitted that he had in fact facilitated the research of methodology and induction of cytotoxic TLymphocytes through "five offshore [outofcountry] research institutes." But, he added that the research was "classified" by the sponsoring governments and "secret" and he could not discuss it. When I pressed for the names of the sponsoring governments, he clammed up. Had I known more about the technology at the time, I would have pointedly questioned him about the properties of the virus, but in retrospect, my ignorance opened doors that otherwise wouldn't have been opened. I did, however, mention to Nichols and Zokosky that Michael Riconosciutohad allegedly worked on the same technology at Hercules Research in the early 1980's, reportedly using fish for incubation purposes. Zokosky responded, embarking upon a lengthy discourse on the processes by which "they" had incubated the virus in cow uterises and udders in biolabs twenty floors beneath the ground. But Nichols interjected, discontinuing the narrative. It was obvious that both men were becoming agitated, so I dropped the subject for the time being. Regarding Thomas Gates, Nichols expressed real anger and noted he would take the lawsuit against Gates as far as it would go. He said he didn't care if he was awarded any money (he was sueing for $11 million), but he would ruin Tom Gates, no matter what it took. A thought crossed my mind that he was about to say that he would kill him, but instead, he sat silently glaring, waiting. I asked him how much the lawsuit had cost him so far, and he said not a dime. Originally, Michael McManus had advised Nichols, but then the case was handled by John Rowell. It was already apparent that Nichols was warming to the interview, in a disarming, contentious sort of way. We were reaching a common ground, a netherworld of danger and intrigue. The room became his stage, the people his audience. He never took his eyes from mine, making every effort to distract me from my notes. Unquestionably, he was a "game" player. The more I entered the game, the better he liked it. It was a trade off, I gave him a little information, he gave me a little. But he gave as much as he took ... I asked him about his relationship with MCA corporation. He said Eugene Giaquinto, President of MCA Home Entertainment Division, had resigned from his company, MIL, after the FBI investigation was underway. But Giaquinto was a smart man, noted Nichols. He had learned much from the man. Giaquinto drove an older car, as did Nichols. They hid their assets, living modestly when in the U.S., keeping a low profile. The FBI would "prove" nothing, said Nichols. He added that MCA Corporation was "going broke," and the only division that was making a profit was the home entertainment division, which Giaquinto headed. I recalled privately the conversation in which Michael Riconosciutohad told R.J. that MCA was currently facilitating the largest leveraging scam ever conceived of in this country. MCA was subsequently sold to the Japanese, but I had no idea what connection that had to the above referenced conversation. Nichols continued to lead the conversation towards Riconosciuto. Nichols and Zokosky could not understand why Ted Gunderson testified for Michael at his trial in Washington state. At a previous dinner party at Nichols' apartment in Sherman Oaks, Ted reportedly told the two men that Michael had loaned him (Gunderson) $60,000 for a joint business venture. Ted still owed Michael the money. It is noteworthy that Ted also supplied Robert Booth Nichols an affidavit for HIS lawsuit against Thomas Gates. Ellen Nichols had mentioned during lunch that Michael often buried secret documents and equipment. Obviously, they were trying to learn what documents I had acquired. I had not uncovered any "buried" documents, but had obtained his private files from the trailer in the California desert. I did not reveal this to Nichols, assuming that Littman had kept my secret. However, as the conversation progressed, I came to realize that Nichols did, indeed, know I had obtained Michael's files. One statement which Nichols said in the presence of Jonathan Littman surprised me. Littman continued to leave the room to attend to something in the back of the apartment. When he returned, I asked Nichols to repeat what he had just said. Nichols obliged by reiterating that "Michael Riconosciuto would kill me if he learned that I had obtained his private documents." I asked him "why" he believed Michael would kill me over that? Nichols seemed to want confirmation of something I'd obtained, something specific, but wouldn't define what it was and I had no intention of revealing anything to him at that point. He randomly discussed the (coroner's grand jury) affidavit in which Riconosciutohad accused Phillip Arthur Thompson of killing Paul Morasca (Michael's partner) in San Francisco. Thompson had worked for the FBI under the code name of "Jason" in some capacity which Nichols would not define. But, according to Nichols, it was Riconosciuto who had tortured and killed Paul Morasca. Peter Zokosky corroborated Nichols' comment. Both men said the torture of Paul Morasca was Michael's "style" that Michael had discussed torture techniques of that nature to Nichols prior to Morasca's death. They added that "Jason," Phillip Arthur Thompson, was not so creative in his killing style. Thompson had allegedly killed many people in his career, but he chose to use a gun and get the job done quickly. Nichols also said at lunch, with Ellen listening, that he knew who killed Mary Quick. Ellen rolled her eyes at her husband and beseeched him to change the subject. I asked Nichols to name the killer or at least give me a clue. Nichols said the killer of Mary Quick had been arrested and released. Obviously they were talking about "Jason," who HAD been arrested and released. Nichols and Zokosky both agreed in a conversation between themselves that Michael Riconosciuto had caused the death of other people also. Nichols repeated at least three times to my face, with Zokosky and Littman nodding in agreement, that he believed Michael would kill me. I privately wondered why Nichols was making such an issue of this? I would understand soon enough. Meanwhile, Nichols continued to press his point. He said Michael was a patient man and would wait as long as necessary to accomplish this. I did not respond, as I had become somewhat immuned to the threat by then. Littman had made similar statements on the drive up to Sherman Oaks. I simply did not perceive Riconosciuto as a killer. Nevertheless, I asked Nichols how Michael would kill me if he was in jail? Nichols said it would be done by one of Michael's "drug flunkies." He said Riconosciuto HAD worked for the government, and had been "rescued" by the FBI for years. He added that Michael could get away with murder. I was becoming unresponsive to the game, so I presume Nichols decided it was time to "set the hook." It was not until two years later that I understood the significance of this incident. At one point during our conversation, and completely out of context with what we were discussing, Nichols played a video tape of the assassination of President John F. Kennedy. The southern wall of Nichols' apartment contained a sixfootwide screen on which I watched a blownup (enlarged), slow motion "uncut" version of the famous Zapruder film. I watched what appeared to be the standard media version of the film, seen so many times in film clips over the years, but then Nichols slowed the camera even more, and on the sixfoot screen, I observed the driver of the limousine turn to his right, first looking at Connolly, then at Kennedy. The driver's left hand came over his right shoulder, and he was holding a long barreled gun. Smoke and a bullet emerged from the gun, traveling ever so slowly across the screen into Kennedy's head, blowing brain tissue into the air as he fell back against the seat. Stunned, I watched Jacqueline Kennedy open her mouth in horror as she glanced at the driver, then try to climb over the back seat of the car. Littman and Zokosky and I stared at the scene in silence, unable to believe what we were seeing. Nichols then changed the tape and showed what he described as the "media" version of the Zapruder tape. In the media version, the driver continued to drive, unflinching, as the shots rang out. Then the scene switched to the back part of the limousine. At this point, Nichols stopped the frame and pointed with a stick at a tree in the background behind the limousine. From the middle of the tree to the ground, there was no trunk, just air. The top part of the tree was growing in air! I demanded that my husband be allowed to see the film. I felt I must have been hypnotized. When he arrived, he viewed both films up close, in slow motion, and saw the same thing. Nichols played both tapes backwards and forwards as often as we demanded, until the memory of it was burned forever into our minds. I wondered if the video had been tampered with. I asked Nichols where he had obtained the original "uncut" version? He would not say. I had no idea at that time that his F.I.D.C.O. partner, Clint Murchison, Jr.'s father had had instant access to the Zapruder film immediately after the assassination in Dallas, Texas. Nichols studied me for the longest time, then walked over to the window and lit a cigarette. He finally commented that the CIA can cover up anything it wants, even a president's murder. He wanted to show me the power of the Octopus. "Nothing is as it appears to be," he said. Somehow, that statement rang true. He then noted that he'd read my first book, the one I had sent him, then handed me a book entitled, "The Search for the Manchurian Candidate." He told me to read it, appraising me silently. Inwardly, I recalled a conversation with J.M., in which she related a conversation she'd had with Ted after a dinner engagement with Nichols. Nichols had reportedly stated to Ted that he headed a 200man assassination team. Jackie had been too frightened to elaborate on this conversation, but had pointed out that Nichols once worked in the MKUltra (Manchurian Candidate) program during the Vietnam war. This program was part of the "Phoenix Project." Interestingly, numerous publications had mentioned that Earl Brian had also participated in the Phoenix Project during the war. Nichols' sister was allegedly a professional hypnotherapist, and Nichols himself was reportedly trained in the art of hypnotism. According to Riconosciuto, they all called themselves "The Chosen Ones," wore skull and crossbones rings, and shared a common interest, if you could call it that, in the old German SS occultism, its tribal and inner circle rites. As I was preparing to leave, Nichols pointed his finger at me and reminded me of the agreement I had made with him through Littman. I asked him what agreement? He said the agreement that I would tell noone about this meeting. I again assured him that I would mention it to noone. He said I had better not or I would end up like the rest ... ****** When we finally left Nichols' apartment around five p.m., I told Littman I did not intend to accept any more collect calls from Michael Riconosciutoat the Tacoma jail. I might even wrap up the whole investigation at that point, because I had more than enough material for a story or a book. Littman proceeded to issue a warning which I recorded in my notebook in the car. It read as follows: "Littman warned me today to watch out. Noone gets out of this alive. No one walks. If I cut them off, it would be very dangerous." I was completely numb at that point, and unresponsive to any further threats. We agreed to meet at 11:00 a.m. at the La Mirada Gateway Holiday Inn in La Mirada the following day to attend Elizabeth Riconosciuto's birthday party. Tom Olmstead, Michael's lawyer, would be flying in for the meeting, Ted Gunderson and J.M. would be there, Patrick Moriarty would be picking up Olmstead at the airport, Raymond Lavas would be there and possibly the elusive Tony Patterson, if Bobby could arrange it. Also expected was Janice Wynogradsky, the Australian reporter who produced the news story for Australian T.V. I was exhausted and looked forward to a restful evening, but first I drove to the nearest toy store and purchased some birthday presents for Elizabeth. That evening, I mentally reviewed the day's events. Nichols and Littman were undoubtedly screwing with my head. The doctored Zapruder tape gave them deniability. The information I had obtained at the meeting may or may not have had value, but I knew one thing, the deaths surrounding Riconosciutoand Nichols were real enough. Behind the smoke and mirrors labyrnthe was a story, one they were working very hard to conceal. I felt sure the corporate and government connections were little more than "fronts" for large scale drug trafficking. ****** At 7:30 a.m. the following morning, Bobby Riconosciuto called the hotel where we were staying (the La Mirada Gateway Holiday Inn) and informed me that the luncheon meeting had been changed to a new location and Jonathan Littman was not going to be allowed to attend.I explained that I had not heard from Jonathan, did not know where he was staying, and could not get in touch with him to tell him about the change. Bobby and I argued about the inconvenience to Littman. I told her that Jonathan and I were not puppets to be manipulated by she or Michael. Bobby argued back that Olmstead had not shown up at the airport, Ted and J.M were having a tiff, and she did not trust Littman because of his relationship with Ben Kalka and Robert Booth Nichols. She did not want her daughter's birthday turned into a "circus." I agreed with that aspect of the meeting, however, Bobby still had not arranged an interview with Raymond Lavas or Tony Patterson. Bobby argued that she did not think Lavas or Patterson would talk to Littman. I pleaded with her to arrange the appointments for Littman's sake, since he had driven from San Rafael for that purpose. I explained to her that it was important that Littman be present at the interviews with Lavas and Patterson because I was working on the Mariposastory with him and we had made an agreement. Bobby asked me directly if I had interviewed Robert Booth Nichols? I said I had not. I felt it was really none of Bobby's business. I qualified that, however, by saying that I expected to interview Nichols at some time in the future. Bobby said she understood and would attempt to arrange the interviews with Lavas and Patterson for the following day, Sunday. It is noteworthy that Littman wanted to interview Tony Patterson because Patterson "claimed" to have been in Vietnam (Phoenix/MK-Ultra) with both Earl Brian and Robert Booth Nichols. I doubted that. To my knowledge, Nichols had never served in the military. Patterson had a rather provocative story to tell about Nichols. Allegedly, Nichols had smuggled several gold icons out of Vietnam into the U.S. He later killed the pilot so there would be no witnesses, and left Tony Patterson stranded in Vietnam to be captured and tortured by the Viet Cong. Nichol's activities in Vietnam also allegedly included drug trafficking for the CIA, which both Bobby and Michael Riconosciuto maintained was still operational today. THAT sounded closer to the truth. Bobby called me back and instructed me to arrange a dinner meeting with Littman that evening (Saturday) and she would show up to be interviewed, then if Littman agreed to provide her with the name of the person who had sent the 1983 "drug" transcript to the prosecutor at Michael's trial, she would call Patterson and Lavas for interviews on the following day. I was becoming stressed at that point. The whole weekend was spinning out of control and I was caught in the middle. I noted to Bobby that I would wait for Littman to show up at the La Mirada Gateway Holiday Inn and tell him the meeting had been changed to a new location, but that he was not invited. I would then give him the new meeting time 7:00 p.m. at the Belle Isles restaurant in Anaheim. Bobby agreed to that arrangement. My husband and I waited until 11:30 a.m., but Littman never showed. He also never called to say he would be late. At 11:40 a.m., I left a message for Littman at the front desk apologizing for the sudden change in plans, and said we would meet him at the Belle Isles at 7:00 p.m.. Bobby had changed the luncheon to the hotel where she was staying with her children in order to be able to sign the tab on Patrick Moriarty's bill. Janice Wynogradsky was present, along with Ted Gunderson, J.M. and her two children. Neither Olmstead, Moriarty nor Marshall Riconosciuto showed up at the birthday party. Elizabeth opened her presents, we ate lunch and cake and caravanned over to Disneyland. We had a good time with the kids until six p.m. At 6:30 p.m., Ted, J.M., Bobby and all the children returned to Bobby's hotel suite. I drove directly to Belle Isles. At 7:00 p.m., neither Bobby nor Littman had appeared for dinner. It turned out that Littman had left a message at the restaurant that he was sorry he missed us at the La Mirada hotel, but there was no mention of whether he would be joining us for dinner or not. I called Sheri Littman, his wife, and she said Jonathan was on his way home. She did not know why. Bobby Riconosciuto sat with Ted Gunderson and J.M. in her hotel suite and ate pizza. When I called her, she said Ted had detained her at the hotel, she couldn't get away. My husband and I finished our dinner and drove to San Diego to see my mother. I never spoke to Bobby or Michael Riconosciuto again until one week later when I learned Bobby had requested the return of Michael's eight boxes of documents. My husband had dropped me off at my mother's home and returned to Mariposa. For days he had been receiving urgent messages from Bobby requesting that I call her. He simply told her that I was tired and needed a rest. Michael Riconosciuto called and asked him if we had interviewed Robert Booth Nichols? My husband said, "No." When I returned home, I called Bobby and learned that Littman had told Michael Riconosciuto all about the meeting with Robert Booth Nichols. Bobby wanted to know why I had lied to her about the Nichols meeting? She explained that Littman had also told Michael that he had dug through Michael's private documents at my home which I had obtained from Michael's secret trailer in the desert. Bobby had never told Michael about this because Michael had instructed her to stay away from the trailer. I told Bobby that I did not believe Littman would do such a thing. I added that if I HAD interviewed Nichols, and he requested confidentiality, I would keep my word to him. There was no reason to discuss such an interview with Bobby or Michael. Bobby accepted that. However, to convince me that Littman had in fact told Michael about the contents of the meeting, she recounted that Michael had told her that the meeting took place on Thursday, it lasted five hours, and I would not take my coat off during the entire meeting, which allegedly made Nichols nervous. Bobby also stated that I had been seated in a location where I could be scanned for electronic devices, and since I was not "bugged," Nichols could not understand why I didn't take my coat off. I immediately hung up from Bobby and called Littman. There was no answer at his home, so I called Robert Booth Nichols. Upon answering the phone, Nichols immediately accused me of "breaking my word to him." There was a sinister edge to his voice. I explained to him that, to date, I had not spoken to Michael Riconosciuto since two days prior to the Sherman Oaks meeting on February 13th. Nichols countered that Littman had called him and told him that "I" had immediately reported to Michael the entire contents of the meeting, because Michael knew all about it. His tone was accusing, attentive, but devoid of anger. Then silence, waiting. I was indeed caught in the tentacles of the Octopus, and I felt the weight of it at that moment. I told Nichols that I would have Bobby Riconosciuto call him and repeat what she had said to me, that Littman had betrayed both Nichols and myself. Nichols laughed. "Why should I believe anything Bobby says? I don't want to talk to her, and I don't want her to have my telephone number. Did you tell her where we met?" His voice was deeper, throatier, and I felt like a fool. Why should he believe her? I was grasping at straws and I had no answers. Why would Littman betray me, with so much at stake? I said I would get to the bottom of this and let him know the results. Nichols said he was leaving for Australia the next day, would not be back for three months. (He had said the same words to Bill Hamilton when he was searching for Danny Casolaro on August 5th). Nichols said he was VERY interested in hearing the results. "For my sake." He added that I should keep Peter Zokosky apprised of the results of my inquiry, then he hung up. I called Jonathan Littman and asked him, "What's going on?" His voice was withdrawn, cautious. "I don't know. What is going on?" I decided to taperecord the conversation. My life was in danger as a result of Littman's actions, and I needed a lifeline to save it. I explained that I had been in San Diego visiting my mother, and when I returned, Bobby Riconosciuto related the details of my interview with Nichols. "She said YOU told Michael everything." Littman said, "Michael knew the truth." "I haven't talked to Michael since before the interview with Nichols! How did he know about it?" Littman's voice took on a slow, malignant tone. "What I'm saying is, you told him beforehand, and you can't play games with people like Michael." I was astonished. And somewhat flustered. But I wanted to give him every opportunity to explain himself. "No. No. Something has happened. Something's wrong. Bobby just told me that YOU told Michael all about the meeting. And I told her I didn't believe that. I told her I DIDN'T have an interview with Robert Booth Nichols ..." Littman quickly responded, "You shouldn't lie to Michael ..." I thought to myself, why should I have to report who I interview to Michael or Bobby? It was none of their business. But instead, I said, "Bobby told me she knew I interviewed Robert Booth Nichols on Thursday, for five hours, and I wore my coat through the entire meeting. And she said, `That made Nichols paranoid.' Now, how in the hell could she have known that?"Littman answered in an eery, robotic voice, "I want to tell you something ..." I interrupted, " ... And how did she know that I allowed you to look at Michael's documents, Jon?" Littman began again, "She didn't. She only knows you have them ..." Littman was being evasive, outright lying. I was becoming increasingly frustrated. I hated being reduced to that level of conversation. But so much depended on it. "John, Bobby said Michael called her. Michael NEVER knew I had those boxes until YOU told him. Bobby said YOU revealed to him that you had seen the documents, seen the diary, seen everything." I had withheld portions of the diary from Littman, amongst other things. I couldn't understand why he would have alarmed Michael about the diary, or lied about having it. Michael had risked his life at Wackenhut to obtain the only copy, broken into Dr. John Nichols' office to retreive it, and fled to Washington state to begin a new life. He had thought it was secure in the desert. Now I had it. And Michael knew Bobby and I had kept the secret from him. And Littman had betrayed us both. I continued ... "How would Michael have known that I didn't take my coat off in the meeting with Nichols? Nobody knew that except you, Jon." Littman stayed cool as ice. "Let me get one thing straight with you. I gave you the conditions under which you were to meet with Nichols ..." "Absolutely." " ... And you betrayed those conditions by telling Michael that we were going to interview Nichols. And that put all of us in an awkward position ..." I was astonished at how twisted the whole situation had become. I stammered, "Jonathan, I didn't know I HAD an appointment with Nichols at the time I told Michael that. I simply told him I PLANNED to interview him at sometime in the future. I haven't spoken with Michael since the interview with Nichols? But YOU have ..." Littman continued his train of thought, disregarding what I had said. "Once you told Michael you planned to interview Nichols, then you had to tell him everything. You had to tell the truth." I asked pointedly, "Did YOU tell him the truth?" Perversely, he confessed, "I told him the truth exactly. Because he knew we'd been there. And I'm not going to lie to Michael. He knew we'd been there ..." I interjected, "But you gave your word to Robert Booth Nichols that you would never divulge the contents of the meeting to anyone. How could you do that?" Littman attempted to change the subject, to put me on the defensive. "YOU are now the fly in the spider's trap ... You gotta be staight with all these people. With Michael, with Zokosky, with Nichols, these people can figure these things out. They're not dumb people." "John, I've been straight with all of them. Every one of them. I have never betrayed any of them, other than to provide you, as a journalist, with some documents you requested ..." He interrupted me, still speaking meticulously, ever so slowly. "You cannot fool people like Michael and Bobby and Ted Gunderson. Michael knew the meeting was going to take place. And it's not a good idea to go back and tell him a story that something didn't happen when it did happen." There was a monotonous singsong to his voice. He sounded like a tape recording. I was incredulous. Why was I defending myself to this man? I tried once again. "Michael doesn't control my life. I didn't tell him the meeting never took place. I NEVER SPOKE TO MICHAEL AFTER THE MEETING WITH NICHOLS! I didn't lie to him because I haven't spoken with him. I was in San Diego. I still haven't spoken to Michael. Why can't you understand that?" "Well, you're in the middle of it, because you're involved with Bobby and ..." " ... Well, I'm not. That's the point, I'm not. It's a dangerous game and I want no part of it. I made that very clear with Bobby today when I spoke with her, which is the first time I've spoken with her since the meeting in Sherman Oaks." " ... You told Michael that you were going to have a meeting with ..." I was determined to get a confession from Littman. My life might depend on it. "Jonathan! Jonathan! You stood in that room with Robert Booth Nichols, and you heard him say aloud in front of both us, that if Michael ever found out what I have [the documents], he would kill me. I would be dead. Do you remember when he said that?" "Sure." " ... Yet you told Michael you had come to my home and seen his documents from the desert? Why?" Littman repeated over and over the same words. "You lied to Michael. That was very stupid ..." I wondered if he was intoxicated. I cut in, "You set me up. You called Nichols immediately after YOU told Michael about the meeting. Then you called Nichols and told him that "I" told Michael about the meeting. Now, Nichols just told me that today. Why did you do that, Jonathan?" Jonathan did not deny setting me up, but stammered lamely, "I ... I did not appreciate your phone call to Nichols earlier today. You have placed me in an awkward position with Zokosky and Nichols ..." So, Nichols had informed Littman of my phone call! Had he accused Littman of betraying him to Michael? I would probably never know the answer to that. I responded, "I called Nichols and asked him what was going on? How in the world could this have come about? I told Nichols what Bobby had said." Littman was outraged that I had called Nichols and conveyed what Bobby had said. He was also outraged that Bobby had called me and confronted me about the Nichols meeting. Obviously THIS had not been in the scheme of things. Littman had obviously NOT expected Bobby to confront me. After the Los Angeles fiasco, I had been fed up with her treatment of Littman and was cooling off in San Diego for a week. I had told Littman that I wouldn't be speaking with either Bobby or Michael again. Littman had underestimated Bobby's determination to speak to me, and my assertiveness in calling Nichols. His plan had backfired. Perhaps he had expected me to be dead before I had an opportunity to talk to anyone? I was immediately alarmed about the synopsis and backup documents I had turned over to Littman on the Mariposa drug lab. It had included the names of the Indians who had confided in me. We had planned to do a story together for the San Francisco Chronicle. "John, can I ask you one more question? Did you ever send the Mariposa information to the Chronicle?" He answered curtly, "No." "You asked me to send it to you. Why didn't you send it to the Chronicle? Why did you even ask for it?" Jonathan hissed at me. "You lied to Riconosciuto's wife, or your husband did [regarding the Nichols meeting], and as a consequence of that, you're in hot water. I warned you about this whole thing ..." "I'm in hot water because YOU betrayed me to Michael," I countered. Again he repeated, "I told him EXACTLY what happened. You're a fool, and you better start getting smart ... I think you should think twice about continuing with this ..." The Indians who had turned in the drug lab were at risk. Jonathan had their names, including detailed information on two deputies implicated in growing marijuana and distributing methamphetamine on the Indian reservation in Mariposa. I wanted my paperwork back. "Jonathan, there's something I need to know right now. This is important. You have information on Mariposa ..." Jonathan hung up. I paced the floor of my office for a moment, then called him back. He didn't answer, but I knew he was standing by the phone while I talked into his answering machine. I informed him that I intended to document everything that had transpired at the Nichols meeting, including his betrayal of me to both Nichols and Riconosciuto, and that he had attempted to set me up to be killed by one or both of these men. I said I was taking the report to the nearest U.S. Attorney and sending a copy to his editor at the San Francisco Chronicle. And, I wanted my Mariposapaperwork returned. I then called Robert Booth Nichols, but there was no answer at his home, so I called Peter Zokosky. Zokosky, as always, was friendly and congenial, and confirmed that Nichols was very interested in the results of my inquiry. I recounted the conversation I'd had with Littman, in which he had confessed his betrayal, and offered proof of the conversation. Zokosky said that would be fine and he would pass the information along to Nichols. On Sunday, February 23rd, I again talked to Bobby Riconosciuto. We again discussed what Littman had done and why he had attempted to convince Nichols that I had betrayed him [Nichols] to Riconosciuto. Bobby and I both acknowledged that Michael had knowledge of Nichols' government and drug activities over a twentyyear time span. Unquestionably, Nichols wanted to discredit Michael in any way he could ... or deter anyone from obtaining Michael's information. Suddenly, Bobby said she believed I was being "set up for a hit." I said I thought Michael was being set up with Robert Booth Nichols. Someone, whoever was controlling Littman, was trying to create friction between Michael and Nichols, and attempting to use me to do it. My friendship with Bobby had unexpectedly thrown a monkeywrench into their plans. Bobby confided that Michael had taperecorded the conversation in which Littman had reported the contents of the Nichols meeting. Michael had called a "friend," and had the friend patch Michael through to Littman. The conversation had then been monitored and tape recorded by the third party (obviously Ted Gunderson who performed this functon often). Bobby agreed to send me a copy of the taperecording. I asked her why Littman would try to turn both Nichols and Michael against me. Professional jealousy? Bobby said, "No, the same thing happened to Danny Casolaro." Littman had been talking to Danny Casolaro regularly, as well as Nichols and Riconosciuto at the time of Danny's death. Yet, Littman had never written a single word about Danny -- or Robert Booth Nichols!! We both agreed that someone was being set up, but Bobby insisted that it was me. She said she needed to check something out and she would call me back. Shortly thereafter, Bobby called back and breathlessly stated she had confirmed that I was about to die. She would not say who she had talked to, but intuitively, I felt it was Ted Gunderson. Bobby said if I died, Michael would be held responsible. I had received collect calls daily from him for three months, then cut off all communication with him after meeting with Nichols. I had obtained ALL of Michael's documents in the desert without his knowledge, until recently. I held in my possession the bank cards which Paul Morasca and Mary Quick had died for. It was a perfect set up, noted Bobby. Everyone, including my own husband, would believe Michael had contracted my death. Inwardly, I recalled the numerous statements by Nichols and Littman and Zokosky that "Michael would kill me." Undoubtedly, they had expected me to repeat those statements to others, perhaps other reporters, or friends, or relatives. Who, in turn, would have repeated it to the police "after my death." In fact, I hadn't repeated it to anyone, but it WAS scattered throughout my notes. Bobby advised me to get out of the house immediately, then call the FBI, the U.S. Attorney, the police or anyone else I could think of immediately. "They're going to kill you, if you don't RUN!," she yelled. She said she was going to hang up, and when she called back, she didn't want me to be in the house. I became somewhat alarmed because of the various deaths surrounding Michael Riconosciuto. Regardless whether anyone believed him or not, the deaths were NOT make-believe. To name just a few: Mary Quick; Paul Morasca, Michael's former partner; Michael May who had visited Riconosciuto in jail two weeks before his death; Dennis Eismann, a lawyer Michael tried to hire; and of course, Danny Casolaro who had been introduced to the Octopus through Michael Riconosciuto. There were others with less direct connections. Just three months after Danny's death, I had been approached by Riconosciuto, and the game of Dungeons and Dragons had begun again, this time with a new player. It seemed as if Nichols and Michael and Ted, and others, played a real life game, and when one of the players got "accidented" or "suicided" (as Ted called it), they simply recruited new players. Oddly, Michael had once said that anyone could leave "the game" by simply dropping out while they were still alive. Once it was known they had dropped out, they were left alone - if they kept their mouths shut. Michael had used journalists to gather information he needed to stay abreast of the game. It was a subtle form of blackmail he used on Nichols and Ted and, indeed, the government whom he had worked for. I had once asked him why "they" didn't just kill him. He had answered that they didn't want to kill him. They wanted his technology. The FMC deal was, in fact, still on hold. The deaths around him were "punishment" for his indiscretions, and to keep a lid on their biological warfare, hightech weaponry, and largescale heroin and cocaine operations worldwide.But who would believe it all? There were hundreds of deadend gopher trails ... dried up corporations, discredited witnesses, dead bodies. Nichols had said only days before, in Littman's presence, that my death would be brought about by one of Michael's "drug flunkies." Who would believe otherwise? Littman had seemed adamant, even outraged, that I HADN'T reported the contents of the Nichols meeting to Riconosciuto. Why? When it was Littman who originally warned me not to? When I didn't, Littman reported it himself. Somehow, the success of the scheme had hinged upon Riconosciutohaving knowledge of the meeting. I had unexpectedly kept my word to Nichols. Of course I had. My life depended on it. And, why had Nichols made a point of showing me the Zapruder film? What possible significance could that have on my investigation? (Two years later, after speaking with Dick Russell, author of "The Man Who Knew Too Much," a 17year investigation of the Kennedy assassination, and Garby Leon at Silver Pictures, we theorized that the film had been shown to provide Nichols with "deniability." If I had mentioned the showing of the film to anyone in media, and placed any credibility on it, it would have invalidated everything else that took place at that meeting.) The phone rang again, and it was Bobby Riconosciuto. She was even more agitated than before - and furious that I was still in the house. I assured her that I was leaving and hung up. I called Ray Jenkinsand Roger Imbrogno and asked them to come to my home in Mariposa. Ray was a former Chief of Police of Merced College and a good friend. His companion, Roger, was in the State Guard with him. They arrived 45 minutes later carrying military rifles and a bulletproof vest. I sat at my computer and documented the whole event, entitled, "Vortex." It was a 17page diary of sorts which began as follows: "The following is a detailed account of an investigation which I began on December 1, 1991 and continue to work on intermittently as time allows. In all my years as an investigator and journalist, I have never encountered anything as bizarre or as alarming as this story. The purpose of this diary is to document these occurrances for my own safety ..." I did not send the report to the U.S. Attorney as I had threatened to do. Nor did I send it to Littman's editor, Michael Yamamoto, at the San Francisco Chronicle, though I should have. I simply kept it and sent a copy to R.J., where I'm sure it disappeared, as always, down the big, black hole. At that point in time, my sense of reality was diminishing. I couldn't tell if I was overreacting to Bobby Riconosciuto's warning, or if my lack of experience might cause my death by staying at home. Ultimately, I decided to disappear for a while. I drove to Fresno to stay with a friend, who subsequently accompanied me to Galveston, Texas where we stayed with her mother for three months. Walking the beaches of Galveston, I found some measure of balance within myself, and returned home in June, rested and ready to resume my life. For several months after that, I had no contact with any of the principles in my investigation until October, 1992. CHAPTER 13 Sometime in midOctober, at the offices of the Mariposa Guide, I received a hurried phone call from Dave Massey, standing in the lobby outside the Washington D.C. offices of ABC's "20/20" news bureau. I had asked Massey to pick up key documents at the offices of producer Don Thrasher at "20/20" who had been holding them there as a safety precaution for me. ("20/20" had aired an indepth piece on the corruption in Mariposa County and I had developed a friendship with Thrasher at that time). After Massey emerged from Thrasher's office building, he'd met with John Cohen, investigator for the House Judiciary Committee on Inslaw. They talked for a few minutes, then Cohen asked Massey if he would turn over my documents to him? Massey excused himself and hurriedly called me at my office in Mariposa. I instructed him NOT to hand over the documents. Most of them were my originals and I had no copies. (Thrasher had flown into California to pick the documents up, but we hadn't had time to make copies). However, I mentioned to Massey that he was welcome to give Cohen my telephone number if he wished. Shortly thereafter, Cohen called me at my home and we had numerous conversations during the next several weeks. It was my understanding that he was the lead investigator in the House Judiciary Committee's threeyear investigation of the Inslaw stolen software. The final Investigative Report, dated September 10, 1992, titled "The Inslaw Affair," had already been published and I wondered why he bothered to call me. After much coaxing, I finally agreed to send him some sort of an affidavit. I was working as a reporter for the local newspaper and didn't have time to put together a detailed report, so I simply attached a notarized cover sheet to "Vortex" and mailed it off to him. On October 28, 1992, Cohen called back. He was very excited about Vortex. "There's some great information here," he observed. "You did a very good investigative job, I have to commend you on that. I realize it's only a fraction of everything you have. What you have done, you have put the pieces of the whole thing together. Little bits and pieces of things that I have known about, that I had theorized about, you have found the answers to those specific questions."I explained to Cohen that I planned to publish a book on the subject and his professional opinion was valuable to me. He added, "You've done some good investigative work here. It puts me in a position to say, `Yeah, this stuff is good, and this is some stuff you may want to get out.' In fact, I can put myself out as being available to these media people to be an inside source, for background only, which would also add credibility to your project." Cohen hesitated, seemingly uncomfortable with what he was about to say. He drew a deep breath, then proceeded. "You are actually a key witness to this thing now. And you might want to consider talking to a couple of the honorable law enforcement people that are still working on this. I do know there are currently some FBI investigations that are in place on this ..." Cohen hesitated again, gathering his thoughts. " ... There has been coordination on this." He waited for a response, a signal that I understood what he was trying to say. I said I understood. "It's been unofficial, but there has been coordination. So, I'd like to know whether ... maybe it would even keep you out of the limelight, whether you would mind, as long as I talk about it and clear it with you first ..." Cohen was leading up to something, but having trouble getting to the point. " ... There is a certain sharing of information. Some of the leads and some of the stuff [in Vortex] (pause) ... Because I'll tell you, one of the biggest hits (pause) ... I always felt that there was a narcotics connection in this ..." I laughed aloud. Cohen continued ... "regarding international narcotics distribution. And I've sort of made my expertise in my years in law enforcement, international narcoterrorism, the weaponsdope connections in the intelligence agencies ..." I could only say, "Yes, yes, yes." " ... And when I was in Los Angeles I did a lot of undercover work with Columbians, where I worked international narcotics conspiracies with DEA and FBI and, being a local police officer, I didn't really get caught up in their systems, I just made some great contacts in these agencies. But I also learned quite a bit about Southeast Asian heroin and the rise of the Medellin Cartels and the other Cartels in Latin America." "Yes." By then, I knew Cohen had grasped the significance of the information Michael Riconosciuto had attempted to trade to the FBI, as well as Danny Casolaro's fatal inquiry about Mike Abbell of the DOJ and his connection to Gilbert Rodriguez and Jose Londono of the Cali Cartel. Cohen continued ... "And I also ran into quite a few law enforcement professionals who were pretty irritated because of the intelligence agency, drug dealer connection." "Yes. Right." "Well, the thing that is interesting is, one of the most interesting things in the whole report, was the article on The Company." "Yes." " ... Because that immediately answered, or confirmed, what my suspicions had been. And I know the exact, right channel to push to get this thing hooked up. And he's a bigtime ... (pause) See this is a very good time for people like us, who are out for purposes of good, to ...(pause) You see, right now the FBI is in a war with the Department of Justice. And would like nothing better than to have an investigation that they can discredit the Department of Justice with. So, the time is ripe to feed this stuff to the right people." I agreed that the drug operations needed to be cleaned up, because the drugs were filtering into the smaller communities. But, thinking of Mariposa, I added that there were law enforcement people involved in the drug trade. Cohen agreed. "I'm very careful with who I deal with. And I think when these people contact you, you'll be somewhat surprised." Reluctantly, I said, "Ok, I will work with them." Cohen concluded by saying, "You said some real interesting things. I like the section where you said `Bob Nichols runs Glen Shockley, Glen Shockley runs Jose Londono.' Now that corroborates some information that I got in the past which talked about one of the reasons PROMISE was stolen. You see, I've had a side theory about another reason why PROMISE was taken. And it was that PROMISE could also be modified to track money laundering.." "Oh, absolutely." "... And it could also be used as an active information gathering, or an active moving software program that can go into other data bases. And it could be modified to control hundreds of accounts and move money through the international banking system." I interjected, "This is what Michael Riconosciuto was trying to trade to the FBI and to FinCen ..." Cohen added, "What a lot of people don't realize is that there are two international banking systems. There's CHIPS and SWIFT. And the word Swift Chips has been spread out throughout this whole [investigation]. And a lot of people don't realize what that meant. Well, Swift Chips is a referral to those two clearing house systems. The clearing house interbank payment system and then the European counterpart, Swift. And they do $2 billion dollars worth of banking transactions a day." "Yes ..." " ... And if one was able to move accounts through there, you could move money around the world ..." ****** In a subsequent conversation with Cohen he asked me how I had obtained the document in which Ted Gunderson had mentioned their "drug/arms operation?" (See Page 60) I explained that I had found it in Michael Riconosciuto's secret files in the desert. Cohen remarked, "That's a great document." I added, "I have the original." Cohen: "You have the original?" "Yeah." Cohen noted, "You hang on to that. That's `key.'" ****** I was subsequently contacted by Thomas Gates of the Los Angeles FBI, and John Connolly of SPY magazine. Gates was somewhat cryptic and noncommunicative about his investigation. It was understandable since he had been sued by Robert Booth Nichols in a civil court. Just before Gates called me, I had spoken with Gene Gilbert for the first time, the investigator at the Riverside District Attorney's office, and learned that drug activities at Wackenhut had been investigated for years, but a certain FBI agent, a Fred Reagan, had always shut the local investigations down. I related this information to Gates, who seemed not particularly interested in that avenue of approach. "I'm mostly interested in Robert Booth Nichols," he said. I explained to Gates that Nichols had made it very clear that I was not to discuss the meeting I'd had with him to anyone." Gates inquired, "Why would he tell you that?" I responded, "I have no idea. But I think he was serious. He had his wife take my picture front and side, and he wouldn't allow my husband into the interview. My husband had to sit downstairs in the van." I summarized the interview briefly, then noted that I had obtained, through Bobby Riconosciuto, eight boxes of Michael's documents in the Mojave Desert near Death Valley. I believed those documents had caused Nichols and/or Jonathan Littman to want me out of the picture. "Michael didn't know that we had done this," I noted. "Michael had instructed his wife not to go near the trailer out there. However, Bobby and I DID go out there. It was dark and it was cold and the kids were hungry, so rather than go through all those documents, she just gave them all to me. I put them in my van and and I came home with them. All the originals. And I spent a week copying all this stuff, then I shipped the boxes back to her fatherinlaw." Gates had a habit of saying nothing when I finished my sentence. So I continued ... "Some of this stuff was incredibly incriminating for all of them. And this is why they're all concerned. They're really afraid that I'm going to send some of this material to someone, somewhere. And, I did send a 17page summary ("Vortex") to John Cohen, but not the material itself. There's too much to send. Additionally, I have reams of notes. I kept notes on all the calls I received." Gates asked what "Vortex" contained? I replied that it pretty much summarized everything that had transpired from the first day. "I had contacted Ted Gunderson regarding a problem here in Mariposa. He had compiled a 700page report on Tulare County and I wanted to know if he had anything on Mariposa county, where I live. We had a meeting for about eight hours and I discussed the things that were going on in our community, which is close to Fresno. And, the very next morning, Michael Riconosciutocalled me. I'd never heard of the man before, but he proceeded to give me all the names of the people involved in The Company out of Fresno, which he was working within the framework of." Again Gates said nothing. I waited, but there was no response. So I added, "Now, all of this starts to get real involved at this point. I don't know if you're interested in this, or not ..." Gates replied, "The Company?" "Yes." Gates noted, "At a future date. I'm more interested in what Nichols had to tell you right now." Nichols had sued Gates and lost his case quite recently. I wasn't sure I wanted to walk into a situation where I would be caught in the middle. I asked, "Well, I need to find out from you - I'm not real thrilled about playing with this guy, you know ..." Gates: "I don't want you to play with him." "Do you want me to come in as a witness on your behalf, or what?" Gates explained, "The Civil suit is finished. This is a criminal proceeding. I want to know what he said to you." I responded, "Well, I want to know where this is going to go. I want to know who's listening in ..." "Nobody's listening in ..." " ... I want to know what you're going to do with it. Where it's going to go." "Well, what do you WANT me to do with it?" "Well, if I'm going to get involved in it, and once I tell you what I know, I'm going to be involved. I want to know in what capacity I'm going to be involved?" Gates was evasive. "Well, I don't know what you have to say. As far as looking at the gross amount of evidence we have, we're getting ready to do that real soon. We have a lot of people out there talking to us, but we need to find the substance of the criminal act." "Yes." Gates continued ..."And you may have the key to some of that." I was surprised. "So, you're putting together a `criminal case.' You're going to have to level with me to a certain point. I understand that you're FBI, and everything goes in and nothing ever comes out again, but still you're going to have to level with me to a certain point, because I need to know where I stand." Gates drawled, "Well, if there's information that would be needed for criminal prosecution, then we'd have to talk to you about the use of that material. And if you decide you don't want to use it, or don't want to relinquish it, then we can't compel you to get on as a free witness and talk about this." "Uh,hmmm." " ... So, we would hope that you would do it. Whatever information you provide at this point will remain confidential." "Uh, hmmm." " ... You know what I'm saying?" "Uh, hmmm." " ... That's your choice." "Yes, well I'll have to think about it." "Well, if you could give me an idea as to what was mentioned, I could tell you, basically, how we can handle it." I didn't know where to begin, what he wanted, so I asked, "May I ask what are the charges that you're going to bring against Nichols? Would this have to do with the government aspect of what he's been involved in, such as arms shipments, or would it have to do with drug trafficking ... murder, or what?" Gates chuckled, "Well, that sounds like a pretty good package to me." I laughed. "I'm just curious about what you're specifically focusing on." He answered, "I'm focusing on any criminal activities that Nichols is involved in. Obviously, the most significant areas of interest are the drugs, the murders and the gunrunning." I explained that it was very complex. I didn't have my notes or "Vortex" at my home, so I summarized as briefly as possible from memory what I had obtained from the boxes in the Mojave desert. Gates listened attentively. When I concluded, he noted, "Do you have these things [referring to the documents] put away where nobody else can get at them?" "Yes. They are not in my home or anywhere on my property." Gates asked, "Does anybody else know where they are?" I wondered if he thought I might NOT be around in the near future. "The person whose house they're at. Nobody else." His next question confirmed my suspicion. "What if something happens to you? Where do we find them? How do we find them?" I noted that I had copies out with two people. Gates asked, "Are they trustworthy?" I said, "Absolutely." Gates pressed further. "The place where the original documents are, can you trust that individual?" "Yes. Absolutely." Gates seemed satisfied that the documents were safe for the time being. He reiterated that I would have to be debriefed extensively and the information would be maintained under the Attorney General guidelines for confidential sources. The word "Attorney General" struck a cord in my consciousness. "You said `Attorney General,' you mean through the DOJ [Department of Justice]?" Gates answered carefully, "Yeah." I laughed sardonically. "This is getting funny ..." Gates hurried to