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FILE NAME: INS-RICH.TXT
SOFTWARE TO DIE FOR
Inslaw Lawyer Elliot Richardson Talks About Murder and the CIA
by
James Ridgeway
[from "MOVING TARGET" in the September 24, 1991
issue of the "Village Voice:"]
WASHINGTON--"It is far worse than Watergate," says Elliot
Richardson, the former attorney general who stood up to President
Richard Nixon during that Republican scandal. "For Christ's sake,
this October Surprise business we are talking about is [built from]
truly horrible things ... I don't know whether it's true or not.
[But] there are a number of elements in the situation that are hard
to account for."
Convinced that freelance journalist Danny Casolaro, who claimed
to have uncovered a sprawling conspiracy linking the October
Surprise and the Iran-contra scandal to a contract dispute between
the Justice Department and a software company named Inslaw, was
murdered in a West Virginia hotel last month, Richardson has asked
the Justice Department to open a federal investigation into his
death. But even though Richardson, who is Inslaw's attorney, has
made both informal and direct personal pleas to acting attorney
general William P. Barr for a full investigation, he has so far
received no reply.
And that's not the first time that Richardson has been ignored by
the Justice Department. Richardson wrote former attorney general
Dick Thornberg in 1989 seeking an independent counsel in the Inslaw
case; Thornberg never replied.
"I have never understood why ... I mean, I was attorney
general when Thornberg was a U.S. attorney. I appointed him
chairman of a committee of U.S. attorneys, newly formed for the
first time. I am a responsible former public official. I am not a
wild-eyed nut."
So why didn't Thornberg respond to Richardson's letter?
"You tell me. I would have responded to a responsible lawyer
whether I ever met him or not." When asked if he thought the lack
of a reply was insulting, Richardson said, "Certainly. Let's say
it's not easily explained, OK?
"The key thing about the death of Casolaro," Richardson
continues, is that "although others were seeking to delineate . . .
the `octopus' [Casolaro's term for the wide-ranging conspiracy], he
was the only one who told people who have no reason to misrepresent
what he said that he had hard evidence, and was on the point of
getting conclusive evidence. No one else made that claim. ... He
told four people, one at a time. The idea that he committed suicide
with a razor blade under these circumstances seems highly
implausible."
The investigation of Casolaro's death is still in the hands of
the West Virginia authorities, who ruled it a likely suicide August
14. But it is already apparent that there is more than meets the
eye to both the freelancer's "suicide" and the Inslaw case--and that
sealing a 10-year-old cover-up isn't necessarily the only
conceivable motive.
"This is a case in which any one of a number of potential
defendants would have every reason to commit murder," says
Richardson, "and in which the litigants have every reason to fear
for their lives."
THE ORIGINS of the dispute over Inslaw, at least, are clearly
understood. A former analyst with the National Security Agency and
onetime contract employee of the CIA (where he prepared analyses of
the foreign press), Bill Hamilton founded Inslaw in the early 1970s
with his wife, Nancy. Inslaw was initially begun with grants from
the Justice Department's Law Enforcement Assistance Administration;
when Congress killed LEAA in 1980, the Hamiltons transformed Inslaw
into a for-profit firm and continued to do business with Justice on
a contract basis. Today, they are business partners with IBM.
By that time they had developed a software package called Promis
that enabled law enforcement agencies to-keep up-to-the-minute tabs
on cases as they wound their way through the courts. It was
designed for district attorneys in large cities, and had been
installed on a pilot basis in two large U.S. attorneys' offices.
With Promis, a U.S. attorney could sit before a computer screen and
quickly find where any particular case stood, locate defendants and
witnesses, track every motion, and even follow an ongoing
investigation from its history down to the detective's most recent
report. As computers became smaller, increasing efficiency and
speed, the Hamiltons modified Promis, adding new functions and
making it speedier and more flexible.
In 1982, Inslaw signed a $10 million contract to install Promis
in U.S. attorney offices across the country. At first Justice
balked at paying fees for what it argued was public domain software
that had been developed under LEAA grants, but on advice of its own
counsel, the department ultimately agreed to pay for the
proprietary, enhanced version of Promis--whenever it was used.
Despite this agreement, the Justice Department's contracting
officer steadfastly refused to pay Inslaw for the use of Promis, and
by 1985 it had withheld nearly $2 million from the Hamiltons. At
that point Inslaw sought refuge in Chapter 11 bankruptcy and
proceeded to sue Justice. In January 1988 the Bankruptcy Court
awarded Inslaw $6.8 million in damages plus counsel fees. Justice
appealed that ruling, but in November 1989 the federal district
court for the District of Columbia upheld the Bankruptcy Court's
findings. Nevertheless, last spring the U.S. Court of Appeals ruled
that the case had been tried in the wrong courts for the past
several years, and must be retried; Inslaw is appealing to the
Supreme Court, and if that fails, the Hamiltons will file a new,
expanded suit.
While on this level the Inslaw affair appears to be a fairly
typical contract dispute, in fact the case has been marked from the
beginning with extraordinary behind-the-scenes politicking to wrest
control of Promis from Inslaw. First, the Justice Department
refused to recognize Inslaw as the rightful owner of the software it
had developed; then the chair of Hadron Inc., a software outfit
controlled by a friend of then-attorney general Edwin Meese, tried
to buy the program from Inslaw. When Hamilton refused, Hadron's
chair told him, "We have ways of making you sell."
Next, a venture capital firm, citing high-level Reagan
administration connections, tried to inveigle the Hamiltons into
signing over their voting rights on Inslaw stock. When the Justice
Department's refusal to pay fees forced the company into Chapter 11,
Justice officials didn't let up. They tried to force Inslaw into a
Chapter 7 liquidation, which would have finished off the company
completely. And when that didn't work, Justice officials encouraged
a Pennsylvania computer company to launch its own hostile takeover
bid.
Why such a fuss over computer software? In its court filings
Inslaw alleges it is a victim of a conspiracy by Meese and his
friends, who stole Promis to make money. Chief among Meese's
cronies in the affair was Earl Brian, currently chair of embattled
Infotech, Inc., which has large holdings in the bankrupt Financial
News Network and United Press International--not to mention Hadron,
the company that tried to buy Promis from Inslaw.
A combat surgeon in Vietnam, Brian was appointed secretary of
California's Department of Health and Welfare in 1970 by then-
governor Ronald Reagan. When Reagan moved to the White House--with
Meese as his counsel--Brian served as the unpaid chair of a task
force on health care cost reduction; Brian also served along with
Meese as a member of a "pro-competition" committee in the White
House. Edwin Thomas, another longtime Meese associate who had
worked for Meese at the University of San Diego Law School and a
member of Reagan's California cabinet, joined them on the Reagan
transition team in 1980. The relationships between these three
Californians first created a stir when Meese went before the Senate
to be confirmed as attorney general in 1984.
An investigation by an independent counsel revealed a suspicious
series of events. Early in 1981, Thomas lent Mrs. Ursula Meese
$15,000; at the time, Thomas was working directly for Meese as
assistant counsel to the president. Before he made the loan, Thomas
discussed Brian's Infotech (then operating under the name of Biotech
Capital Corp.) with Mrs. Meese, and despite the fact that the
Meeses were hard up for cash, she promptly took the money Thomas had
loaned her and bought Biotech shares for her two children. Meese,
who knew about the loan, did not report it on his financial
disclosure forms.
Then, in July 1981, Brian loaned Thomas $100,000. In addition,
Thomas made calls to the Small Business Administration on behalf of
a loan application from a Biotech subsidiary; the SBA eventually
granted the loan. No wrongdoing was ever adjudged in any of this.
In its court briefs, Inslaw cites the assertions of various
Justice officials connecting Meese, Brian, and Hadron, Inc., with
the harassment of the Hamiltons' company. One whistleblower even
called a senator to warn that, once Meese was made attorney general,
he would award a friend with a "massive sweetheart contract" to
install Promis in every litigation office of the Justice Department.
After Meese was named AG, the chief investigator of the Senate
Judiciary Committee, Ronald LeGrand, called Hamilton to pass on a
warning. He said that an unnamed senior official at Justice--whom
LeGrand had known for years and trusted--had told LeGrand that the
Inslaw case was "a lot dirtier for the Department of Justice than
Watergate was, both in its breadth and its depth."
Up to this point, the Inslaw case still appears to be little more
than a contract dispute with overtones of political corruption. But
it doesn't stop there. As it turns out, there is considerable
reason to suspect that while Promis may have been meant as a plum
for one of Meese's cronies, it may also have played a role in an
international espionage operation conducted by the CIA. And that's
where the case really begins to get interesting.
ACCORDING TO THE HAMILTONS, a high government official, nearly
speechless in his disgust, dropped by to tell them he had discovered
that the theft of Promis had actually begun with the military. The
British and U.S. navies needed a software program to conduct their
zone defense against Soviet submarines in the North Atlantic,
according to their informant. All Soviet subs leave from the same
base near the Arctic circle, where they are easily detected, and
have to run a gauntlet of listening devices in the deep waters
between Iceland and Ireland before they break out into the open
ocean. With the help of painstakingly accurate maps of the
seafloor, the Russians have long been able to run through the
intricate twists and turns of the deep marine trenches near Iceland
at such speeds that they are usually able to lose their trackers.
American and British subs needed a computer program that would allow
them to follow every move of a Soviet sub and project its course and
position; they tried everything available, but no software could
follow all the variables quickly enough. Out of curiosity, they ran
a test with Promis--and it worked. So they simply appropriated the
program.
That, according to the Hamiltons' source, is how the theft got
started. But there is actually much more evidence to support
another theory of how and why the government started playing games
with Promis.
Several different former intelligence agents have told the
Hamiltons about various foreign countries that suddenly started
using versions of Promis in the mid-1980s, ranging from Iraq to
South Korea. These governments could use the program not only to
track criminals but for complex covert operations and to identify
"undesirables"--like revolutionaries. They suggest that the CIA
obtained copies of the Promis software from the Justice Department
and sold it to various police and intelligence agencies overseas;
once installed, Promis actually became a high-tech bug, storing
secrets of the unsuspecting host government, including intimate
details of its internal police operations and intelligence service.
American agencies could then penetrate and read the software.
"It was highly adaptable to tracking information of the kind that
intelligence agencies like to track," Richardson says, "and the CIA
adapted it to that purpose. Then, relying on Earl Brian, [they]
started peddling it to foreign intelligence agencies."
The Hamiltons got the barest inkling of the intelligence
implications for the first time last year. On November 5 their
daughter Patty, who is a regional sales manager for Inslaw, got a
call from the Department of Communications in the Canadian federal
government. They told her that Promis was widely used in Canada--it
had been installed in 900 different locations--and he wondered
whether she would help fill out a questionnaire about using the
software in both English and French.
This was all news to Patty, since Inslaw had never sold Promis to
anyone in Canada. Playing dumb, the Hamiltons filled out the
questionnaire. Then, on a business trip to Montreal in January,
Patty dropped in on the Department of Communications for a chat.
She asked the officials about the questionnaire and where Promis was
being used. The Canadians checked their codes and told her it was
on line with the Royal Canadian Mounted Police and with an agency
they did not know.
Then Patty made an unannounced visit to the responsible official
at Mountie HQ, who promptly denied all knowledge of Promis, and
dismissed the Department of Communications as a bunch of "kooks."
When Patty returned to Washington, Bill Hamilton tried to, find out
where the Canadians had gotten Promis, but suddenly everything had
changed: The Department of Communications begged forgiveness for
their error, saying it wasn't the Mounties at all but the
international development office that was using Promis. When
Hamilton told them the software had never been sold to anybody in
Canada, they backtracked, apologized once again, and said that, in
fact, no one was using it.
That's when Michael J. Riconosciuto, a researcher and self-
described arms expert, came forward. Riconosciuto had first called
Inslaw out of the blue in the spring of 1990, and he has continued
to do so from pay phones around the West. He claimed to have worked
as research director for a joint venture between the Wackenhut
Corporation, the big security outfit, and the Cabazon Indians, who
have a reservation at Indio, California. The joint venture
supposedly manufactured military material, such things as night-
vision goggles, machine guns, fuel air explosives, and biological
and chemical weapons for foreign governments, including those in the
Middle East and Central America, and for covert operations of one
sort or another. The contras were to be a prime market. The
Cabazon tribe enjoyed quasi-sovereign status, allowing the arms
manufacturers to operate outside stringent restrictions on the
manufacture of armaments in the rest of the United States. As an
added sweetener, the Indians could take advantage of minority set-
aside contracts.
Riconosciuto claims, in an affidavit given to Inslaw, to have
made modifications on Promis software provided him by Earl Brian for
both the Canadian Mounties and the Canadian Security and
Intelligence Service. Brian, he says, was the man who had sold the
software to the Canadians. Riconosciuto is currently in prison in
Washington state awaiting trial on drug charges, and his statement
would be of dubious value--except that many of the details do check
out independently. For one thing, the San Francisco Chronicle ran a
series of articles on the Cabazon Indians last week that seemed to
bear out the claims about weapons manufacturing on the reservation.
BY THIS TIME the Hamiltons were pretty sure Promis had been pirated
abroad, and they began to hear stories of Promis cropping up in all
sorts of foreign countries. Ari Ben-Menashe, a former Israeli
intelligence asset, provided an affidavit that says that in December
1982 Rafael Eitan, the Israeli government's counterterrorism
adviser, told him he had obtained Promis from Earl Brian and Robert
McFarlane, then Reagan's national security adviser. In 1987 Ben-
Menashe said he was at a meeting in Israel where Brian said he owned
Promis. Ben-Menashe said he had been assigned to stop a sale of
chemical weapons by Chilean arms dealer Carlos Cardoen to Iraq.
"Mr. Carlos Cardoen ... stated to me that he brokered a deal
between Dr. Brian and a representative of Iraqi ... military
intelligence for the use of Promis," he recalled.
Richard Babayan, an Iranian arms dealer, said in an affidavit
that during 1987 he met a member of Iraqi intelligence who told him
Iraq had acquired Promis from Brian on the recommendation of the
Libyan government. He went on to say he was told by an official of
the Korea Development Corporation, which he said was a front for the
Korean CIA that Brian had sold Promis to the Koreans as well.
The Hamiltons also continue to get tips about Promis popping up
all over the United States. Although it formally denies using the
program, high Justice Department officials have told the Hamiltons
that FBI officials had admitted the software in their field offices
is a renamed version of Promis.
The possibility of Promis being employed as an espionage tool is
given further credence by the curiously disinterested attitude of
government in getting to the bottom of the Inslaw mess. Inslaw
itself has been unable to obtain subpoena power from the courts
except for a brief period last spring, but those subpoenas were
frustrated when the Appeals court threw out the case just as the
deadline for Justice to turn over the documents approached. Senator
Sam Nunn's Senate Permanent Investigations subcommittee conducted an
investigation, but received little cooperation from Justice.
Texas congressman Jack Brooks's judiciary committee has been
looking into the affair for the last two years, but only issued
subpoenas last July. Brooks is believed to have interviewed Meese
and his friends. According to the Hamiltons, the files of the
Justice Department's chief litigating attorney on the case have
disappeared.
UNLIKE THE MURKY October Surprise scandal or the compromised
congressional investigations into Iran-contra, the facts in the
Inslaw case are clear. Emerging from a low-level bankruptcy court,
they paint a virtually indisputable case of corporate theft,
political corruption, and the very real possibility of international
espionage. The issue goes straight to the White House and involves
officials at the highest levels of the Justice Department in what
appears to be a deliberate campaign of intimidation, theft, and
corruption. By now, that ought to have led to a serious
congressional investigation.
Unlike Iran-contra, no one in this case has pleaded national
security as a defense, though that's likely before it's over. But
in a sense, it is already too late for that. The facts are too
well-delineated. If the opinions of two judges are correct, this
case ought to result in criminal indictments of past and present
Justice officials.
As Elliot Richardson says, "Why in the world would this one group
of informers ever have come together and cooked up all this stuff?
How did they keep it consistent from day to day among themselves as
to who told what to whom? There is a hell of a load of stuff
they've told to various people, including staffers, journalists, the
Hamiltons, me. The picture they paint is relatively coherent and
consistent ... and then you add the stonewalling by the Department
of Justice. I have never understood why."
--
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.