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Article 1019 of misc.activism.progressive:
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From: dave@ratmandu.corp.sgi.com (dave "who can do? ratmandu!" ratcliffe)
Newsgroups: misc.activism.progressive
Subject: the INSLAW Case: 2/29/88 "BARRON'S" piece on Brian-Meese connection
Message-ID: <1991Oct11.194208.8647@pencil.cs.missouri.edu>
Date: 11 Oct 91 19:42:08 GMT
Sender: rich@pencil.cs.missouri.edu (Rich Winkel)
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Organization: PACH
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Approved: map@pencil.cs.missouri.edu
although this article is 3 1/2 years old, there's precious little in the
public record regarding Earl "Cash" Brian. Brian's connections to Meese
is one avenue of research worth studying. This article provides a few
more details.
from the February 29, 1988 issue of
"BARRON'S NATIONAL BUSINESS AND FINANCIAL WEEKLY"
Brian's Meese Connection
Maggie Mahar
DR. EARL Brian, chairman of both FNN and its parent, Infotech,
stepped into the glare of controversy surrounding Attorney General
Edwin Meese III in 1984, when a "Report of Independent Counsel
Concerning Edwin Meese" was made public. The inquiry, conducted by
Jacob Stein, investigated a tangle of loans and investments
involving Dr. Brian, the SBA, Mrs. Meese, and the Meeses' longtime
friend and associate, Edwin Thomas.
Brian, Meese and Thomas had met when they served together in
Ronald Reagan's California administration. Thomas went on to work
for Meese at the Center for Criminal Justice Policy and Management,
which Mr. Meese had established at the University of San Diego Law
School. In 1980, Meese asked Thomas to join him on Reagan's
transitional team.
Brian and Thomas also remained close friends. According to the
Stein report, Thomas "described himself as one of a number of so-
called `Earl watchers,' i.e., people who knew and admired Dr. Brian
and who followed his various business ventures."
Early in 1981, Thomas lent $15,000, interest-free, to Ursula
Meese. Before making the loan, Thomas had discussed Infotech--then
known as Biotech--with Mrs. Meese. And so even though the Meeses
were strapped for cash, and even having trouble making their
mortgage payments that year, Ursula Meese decided to use the
$15,000 loan to purchase shares in Biotech for two of her children.
Edwin Meese, who was aware of both the loan and the investment,
forgot to report the loan on 1981, 1982 and 1983 financial-
disclosure forms.
During this period, Thomas was working for Meese in Washington.
Thomas was appointed assistant counselor to the President under
Meese from January 1981 to February 1982. Then, in 1982, Thomas
received an appointment as administrator of the San Francisco
regional office of the General Services Administration. The
Independent Counsel's report turned up "no evidence" that the
appointments were connected to the loan, however--or that Meese
wanted to conceal the loans.
But the report does suggest that Mrs. Meese continued to follow
Thomas's investment advice. In May of ,1981, she bought $500 worth
of shares in a company that Brian was actively negotiating to buy
for Biotech--American Cytogenetics. At the same time, Thomas was
buying American Cytogenetics for his own account. Later, Mrs.
Meese made a profit on the American Cytogenetics shares--though she
ultimately took a loss on Biotech. The Stein report considered
allegations of insider trading in the case of the American
Cytogenetics purchase, but found no evidence.
In the spring of 1981, Questech, a wholly owned subsidiary of
Brian's Biotech, enters the report's murky drama. In 198O,
Questech had applied for a license that would make Questech
eligible for SBA loans. In April 1981, the license still had not
been approved, and a moratorium was declared on SBA licenses until
screening procedures were reviewed. According to the report,
Thomas called the SBA offices twice to inquire about the
moratorium. He could not recall if he identified himself as a
White House employee. When questioned by independent counsel, SBA
officials could not remember taking the call.
Questech did get its license, however. On April 28, 1981, the
SBA decided to lift the moratorium on those SBIC applications that
had been under review when the moratorium went into effect.
Questech, thus, became one of a handful of companies that received
the SBA license at that time, making it eligible for millions in
loans. Today, Infotech carries $12 million in SBA loans on its
books. The report concludes however, that there was no evidence
that the phone calls from Thomas had any effect, or that Questech
received any special treatment from the SBA.
But, according to Brian, the Independent Counsel's scrutiny
kicked off an investigation of Questech's SBA audit. The press
soon disclosed that, according to the audit, Questech was investing
in slot-machine operations in Las Vegas at about the same time that
it was receiving the SBA license.
Dr. Brian explains: "We had made a real-estate investment of
$150,000 that carried with it warrants to invest in a public
company called Jackpot Enterprises." Was the real estate in
question in Las Vegas? "I can't remember where the building was,"
Brian replies.
In any event, the SBA decided the investment was not allowable
because the business was illegal in some states. "The remedy,"
says Brian, "is that Questech transferred its interest in Jackpot
Enterprises to Biotech, at the behest of the SBA."
The report scrutinized one other connection between Brian and
the White House. In the spring of 1982, the White House senior
staff approved the nomination of Brian for a position on the
National Science Board. Brian's nomination, with the others on the
slate, was approved by the President.
But, the report reveals, Brian never served: "After the FBI
clearance investigation had been conducted, questions raised by
White House counsel's office caused Dr. Brian to withdraw his name.
He was never formally nominated." According to the "Washington
Post," Brian says that he withdrew his name because of "a hassle"
with one of the members of the selection panel.
The Stein investigation found no basis for any criminal charge
against Meese arising out of his recommendation of Brian for the
NSB.
Brian himself becomes an active character in the Stein report
minidrama in July of 1981. That summer, Brian lent $100,000 to
Edwin Thomas. Just seven months earlier, Thomas had lent $15,000
to Ursula Meese. Why was Thomas lending people money if he, too,
was hard-pressed for cash?
According to the report, in July Thomas needed money because he
wanted to make a downpayment on a Washington, D.C. townhouse.
The Stein report goes on to note that, in the same month, "Dr.
Brian lent Mr. Thomas an additional $9,900 to purchase stock in a
company called Financial News Network. Dr. Brian did this by
causing his broker to purchase the stock in Mr. Thomas's name, and
advancing the funds for the purchase."
Thomas did not list the $100,000 loan from Brian on his
financial-disclosure forms in 1982 or 1983. He claimed that the
loans were ultimately secured by a mortgage on his Squaw Valley
house, which he considered a personal residence and therefore
exempt from reporting requirements.
Brian acknowledges that he forgave much of the interest on the
loan, but says that he was unaware at the time of Thomas's loan to
Urusla Meese or her purchase of Biotech.
The report discloses, however, that later correspondence between
Brian and Thomas in the spring of 1983 discussed Mr. Thomas's debt
and referred, on a number of occasions, to the Meese purchase of
$15,000 of Biotech stock with money advanced by Thomas.
Nonetheless, the Stein report asserts that it ultimately found "no
connection between the Brian-Thomas transactions and the purchase
by Mrs. Meese of Biotech stock six months earlier.
The report concludes: "Inferences might be drawn from Mr.
Thomas's contact with Dr. Brian and his purchase of American
Cytogenetics during the ongoing negotiations, particularly in light
of the $100,000 loan from Dr. Brian and Mr. Thomas's non-
disclosure. Whether Mr. Thomas or Dr. Brian committed any
violation of law was not a matter within our jurisdiction. Even if
we were to make an assumption that Mr. Thomas might have been
acting on the basis of insider information, we have been given no
evidence by the SEC nor have we uncovered evidence that he
communicated that information to Mrs. Meese, or that Mrs. Meese was
aware (or had reason to be aware) that Mr. Thomas had such
information. Therefore, we find no basis for any criminal charge
arising out of the purchase or sale by Mrs. Meese of American
Cytogenetics."
Brian flushes with anger as he responds: "In my opinion, that
was a gratuitous statement in the Stein report. There was nothing
to the underlying implication." Moreover, he observes, the SEC
investigated the matter and cleared all parties.
Brian's recent move to acquire UPI may once again put a
Spotlight on Brian's connections with the Reagan Administration.
Last week the "Washington Post" raised the issue when pointing out
that Brian, the head of the new UPI group, was a principal
stockholder in a company that last fall won a $40 million Justice
Department contract.
Brian, it turns out, owns 4% of Hadron Inc., while Infotech owns
another 4%. Last October, Hadron announced that, after competitive
bidding, it had been awarded a $40 million-plus contract to supply
computerized legal support services to the Justice Department's
Land and Natural Resources Division. Brian told the "Washington
Post" that he was unfamiliar with the details of the deal. The
contract was awarded to a wholly owned subsidiary of Hadron, known
as Acumedics Research and Technology Inc., and Brian disclaimed
knowledge, saying, "It is not something that would come up to the
Hadron board level."
--
daveus rattus
yer friendly neighborhood ratman
KOYAANISQATSI
ko.yan.nis.qatsi (from the Hopi Language) n. 1. crazy life. 2. life
in turmoil. 3. life out of balance. 4. life disintegrating.
5. a state of life that calls for another way of living.