textfiles-politics/pythonCode/personTestingOutput/inslaw.xml

<xml><p>From: aq817@cleveland.Freenet.Edu (<ent type='PERSON'>Steve Crocker</ent>)
Newsgroups: alt.conspiracy
Subject: Repost - <ent type='PERSON'>Barron</ent>s Article on <ent type='ORG'>Inslaw</ent>
<info type="Message-ID"> 1992Aug22.093924.11815@usenet.ins.cwru.edu</info>
Date: 22 Aug 92 09:39:24 GMT</p>

<p>Date: Thu, 10 Oct 1991 17:40:40 CDT
Reply-To: dave 'who can do? ratmandu!' ratcliffe
<special>dave@ratmandu.corp.sgi.com</special>
Sender: Activists Mailing List <special>ACTIV-L@<ent type='ORG'>UMCVMB</ent>.BITNET</special>
From: dave 'who can do? ratmandu!' ratcliffe
<special>dave@ratmandu.corp.sgi.com</special>
Subject: the INSLAW Case: part I of "BARRON'S" 1988 2-part piece</p>

<p>Subject: the INSLAW Case: part I of "BARRON'S" 1988 2-part piece
Keywords: U.S. Deptartment of Justice != "with liberty and justice for all"
Lines: 510</p>

<p> although these 2 articles are dated by more than 3 1/2 succeeding
years-worth of newer revelations and mounting evidence of cynical
corruption at the highest levels of the executive branch, as well
as linkages into the judicial branch of the u.s. government, they
still provide very useful and well-researched background material.</p>

<p> In his decision, [federal bankruptcy judge <ent type='PERSON'>George</ent>] <ent type='PERSON'>Bason</ent> compares
the Justice Department to someone who decides to test drive an
automobile: "So the customer drives off with the car and this is
the last the dealer ever sees of him. I think that is approximately
what <ent type='ORG'>the Department</ent> of Justice has done in this case."</p>

<p> First of a 2-part piece which began in the March 21, 1988 issue of
"BARRON'S NATIONAL BUSINESS AND FINANCIAL WEEKLY"
-----------------------------------------------------------------------------</p>

<p> Beneath Contempt
Did the Justice Dept. Deliberately Bankrupt INSLAW?
By <ent type='ORG'>MAGGIE</ent> MAHAR</p>

<p> "A VERY strange thing happened at <ent type='ORG'>the Department</ent> of Justice . .
."
What that very strange thing was was described in clear and
exhaustive detail in Judge <ent type='PERSON'>George</ent> Bason's blistering ruling before
a packed <ent type='GPE'>Washington</ent>, D.C., courtroom last September. In a quiet
voice, <ent type='PERSON'>Bason</ent>, a 56-year-old federal bankruptcy judge with a
reputation for being meticulous in his judicial approach, told the
astonishing story of INSLAW vs. <ent type='GPE'>the United</ent> States of America.
In his ruling on the case, <ent type='PERSON'>Bason</ent> explained how "through
trickery, deceit and fraud," the U.S. Department of Justice "took,
converted, stole" software belonging to INSLAW, a <ent type='GPE'>Washington</ent>-based
computer software firm. In 1982, INSLAW signed a $10 million
contract to install its case-tracking software, <ent type='ORG'>PROMIS</ent>
(Prosecutor's Management Information System) in the Justice
Department's offices. But instead of honoring the contract, <ent type='PERSON'>Bason</ent>
asserts, Justice officials proceeded to purposefully drive the
small software company into bankruptcy, and then tried to push it
into liquidation, engaging in an "outrageous, deceitful, fraudulent
game of cat and mouse, demonstrating contempt for both the law and
any principle of fair dealing."
Ultimately, the series of "willful, wanton and deceitful acts"
led to a cover up. <ent type='PERSON'>Bason</ent> called statements by top Justice
Department officials "ludicrous . . . incredible . . . and totally
unbelievable."
Some of the evidence against the department came from one of its
own. During the course of the litigation, <ent type='PERSON'>Anthony Pasciuto</ent>, deputy
director of the department's <ent type='ORG'>Executive Office</ent> for <ent type='GPE'>United</ent> States
Trustees, met secretly with INSLAW'S president, <ent type='PERSON'>William Hamilton</ent>.
At that breakfast meeting at the <ent type='ORG'>Mayflower</ent> hotel, <ent type='PERSON'>Anthony Pasciuto</ent>
told <ent type='PERSON'>Hamilton</ent> and his wife, <ent type='PERSON'>Nancy</ent>, how the Justice Department had
pressured Trustee officers to liquidate their company. Later, a
superior confirmed Pasciuto's story. But at the trial, a horrified
Pasciuto listened while his superior changed his testimony. Close
to tears, he, too, recanted.
Judge <ent type='PERSON'>Bason</ent> believed Pasciuto's original testimony however. On
Feb. 2, 1988, he ordered Justice to pay INSLAW about $6.8 million
in licensing fees and roughly another $1 million in legal fees.
<ent type='PERSON'>Bason</ent> wasn't sure whether he could assess a department of the U.S.
government with punitive damages. If so, damages could run as high
as $25 million. <ent type='PERSON'>Bason</ent> struggled with that legal question and
finally postponed the decision to a later date.
Now, no one knows how Judge <ent type='PERSON'>Bason</ent> would have ruled on the
question of damages. In November, Judge <ent type='PERSON'>Bason</ent> rejected a
Department of Justice motion to liquidate INSLAW. A scant one
month later, the Harvard Law School graduate and former law
professor discovered that he was not being reappointed. The
decision to replace him followed from a recommendation made by a
four-man merit selection panel appointed by the chief circuit
judge, <ent type='PERSON'>Patricia Wald</ent>, a former Justice Department employee. The
panel was headed up by District Judge <ent type='PERSON'>Norma Johnson</ent>, another former
Justice Department lawyer.
Judge <ent type='PERSON'>Bason</ent> stepped down in February. He was replaced by S.
<ent type='PERSON'>Martin Teel</ent> Jr., 42, one of the Justice Department lawyers who had
unsuccessfully argued the INSLAW case before <ent type='PERSON'>Bason</ent>. Even jaded,
case-hardened <ent type='GPE'>Washington</ent> attorneys called the action "shocking" and
"eerie."
INSLAW'S case will be assigned to another judge for disposition
of damages. Meanwhile, the Justice Department is appealing Judge
Bason's initial $8 million award to U.S. District Court. And, last
week, <ent type='ORG'>the Internal Revenue Service</ent> descended on the <ent type='PERSON'>Hamilton</ent>s,
demanding that the bankrupt company pay $600000 in back taxes--
immediately.
"I restrained the <ent type='ORG'>IRS</ent> from going after the <ent type='PERSON'>Hamilton</ent>s
personally--just a few days before I left the bench," <ent type='PERSON'>Bason</ent>
recalls. "But that restraining order lasts only 10 days. I don't
know what's happening now."
"It seemed as if the controversy was winding down," observes
INSLAW'S former attorney, <ent type='PERSON'>Leigh Ratiner</ent>. "It would follow a
natural course in the press, and then fade from view." <ent type='ORG'>Inslaw</ent>
would become another shocking event that slinks off into obscurity:
Someone occasionally might dimly remember and idly ask, "What ever
did happen to <ent type='PERSON'>Bill</ent> <ent type='PERSON'>Hamilton</ent> and those INSLAW people? A real shame
. . . I heard the judge was back teaching law somewhere. . . ."
But at the end of last week <ent type='PERSON'>Anthony Pasciuto</ent> instructed his
lawyer to write a letter to Deputy Attorney General <ent type='PERSON'>Arnold Burns</ent>.
Pasciuto has decided to tell the full story that he began telling
at the <ent type='ORG'>Mayflower</ent> last spring. And, in an interview with "Barron's"
at the end of the week, Pasciuto explained how the Justice
Department black-listed INSLAW. It was a tale that involved two
U.S. trustees, a federal judge who told two versions of the same
story, and a Justice Department that routinely refused to pay
certain suppliers: "If you're on the bad list, you go in this
drawer," another Justice Department employee explained to Pasciuto.
Pasciuto knows what happened--but not why. In the trial, INSLAW
claimed that C. Madison "Brick" <ent type='ORG'>Brewer</ent>, the Justice Department
employee responsible for administering the department's $10 million
contract with INSLAW, held a grudge against the company: INSLAW's
<ent type='PERSON'>Hamilton</ent> had fired <ent type='ORG'>Brewer</ent> in 1976. But since the trial, <ent type='PERSON'>Hamilton</ent>
has become convinced that <ent type='ORG'>Brewer</ent> alone could not have been that
powerful. Bason's removal and Pasciuto's account suggest that what
motivated the remarkable behavior of the Justice Department was
something of greater moment than a middle-level employee's petty
grievance.
Indeed, three people have lost their jobs as a result of the
INSLAW scandal--but not paradoxically, those responsible for the
scandals. The trio of victims includes Judge <ent type='PERSON'>Bason</ent> and Pasciuto--
who received notice that he would be fired after he testifed, and
just two days after Judge <ent type='PERSON'>Bason</ent> was informed that he would not be
reappointed. The third casualty of the <ent type='ORG'>Inslaw</ent> affair was Leigh
<ent type='ORG'>Ratiner</ent> a former partner at <ent type='PERSON'><ent type='PERSON'>Dickstein</ent> <ent type='PERSON'>Shapiro</ent></ent> and <ent type='ORG'>Morin</ent>, the firm
that represented <ent type='PERSON'>Edwin Meese</ent> during his confirmation hearings for
Attorney General.
Why <ent type='PERSON'>Bason</ent> and Pasciuto got the axe can easily be inferred.
Ratiner's forced departure is a little more complicated. In
January 1986, <ent type='PERSON'>Elliot Richardson</ent> asked <ent type='ORG'>Ratiner</ent> to take on INSLAW'S
defense. <ent type='ORG'>Ratiner</ent> agreed, and named D. <ent type='PERSON'>Lowell Jensen</ent>, then the
Deputy Attorney General, and a long-time <ent type='PERSON'>Meese</ent> friend, in a
complaint. Not long after, <ent type='PERSON'>Meese</ent> discussed the case with another
<ent type='PERSON'>Dickstein</ent>, <ent type='PERSON'>Shapiro</ent> partner, <ent type='PERSON'>Leonard Garment</ent>, the attorney who,
along with E. <ent type='PERSON'>Robert Wallach</ent>, represented <ent type='PERSON'>Meese</ent> in his confirmation
hearings. <ent type='PERSON'>Meese</ent> acknowledged the conversation in a pretrial
interrogation. Shortly thereafter, his partners at <ent type='PERSON'>Dickstein</ent>,
<ent type='PERSON'>Shapiro</ent> asked <ent type='ORG'>Ratiner</ent> to resign.
The Senate's Permanent Subcommittee on Investigations is now
looking into INSLAW--a sign that the lawmakers, too, think that the
whole story of the "something strange" that happened in the Justice
Department has yet to be told. The Hamilton's attorneys aren't
sure why a department of the U.S. government wanted to liquidate
their company. <ent type='PERSON'>Anthony Pasciuto</ent> doesn't know. Judge <ent type='PERSON'>Bason</ent> is
still trying to piece together who had it in for him and why. But
<ent type='PERSON'>Bason</ent>, <ent type='PERSON'>Hamilton</ent> and the attorneys involved in the case are
beginning to define the pieces of the puzzle with some pointed
questions.
Why did the Justice Department hire Brick <ent type='ORG'>Brewer</ent>, a former
INSLAW employee, to supervise a contract with his former employer?
"The person is going to be biased in favor of the former employer-
-or he is going to be biased against the former employer," <ent type='PERSON'>Bason</ent>
pointed out in his decision.
The judge also noted that D. <ent type='PERSON'>Lowell Jensen</ent>, the former deputy
Attorney General named by <ent type='ORG'>Ratiner</ent> in his complaint, was questioned
on this issue. <ent type='PERSON'>Jensen</ent>, now a federal judge in <ent type='GPE'>California</ent>,
"recognized the general principle that it is a bad idea" to hire a
former employee, disgruntled or otherwise, for such a task, <ent type='PERSON'>Bason</ent>
observes. But, <ent type='PERSON'>Bason</ent> wrote, he was amazed to find "no hint in
Jensen's testimony that he recognized there was any possible
applicability of that general principle to the case of Mr. <ent type='ORG'>Brewer</ent>
and <ent type='ORG'>Inslaw</ent>."
<ent type='PERSON'>Hamilton</ent> discloses that Mr. <ent type='PERSON'>Jensen</ent> himself was already familiar
with INSLAW. <ent type='PERSON'>Hamilton</ent> ran into <ent type='PERSON'>Jensen</ent> in the early 1970s, when
<ent type='PERSON'>Hamilton</ent> was developing <ent type='ORG'>PROMIS</ent>, the case-tracking system that he
contracted to sell to the Justice Department. At that time,
<ent type='PERSON'>Jensen</ent>, a long-time friend of Ed <ent type='PERSON'>Meese</ent>, was district attorney in
<ent type='GPE'>Alameda Country</ent> in northern <ent type='GPE'>California</ent>, developing his own
computerized case-tracking system, DALITE. <ent type='PERSON'>Jensen</ent> competed with
Hamilton's <ent type='ORG'>PROMIS</ent> head-on-head. <ent type='ORG'>PROMIS</ent> won.
<ent type='PERSON'>Hamilton</ent> and others familiar with the case ask: Could <ent type='PERSON'>Jensen</ent>
still be feeling competitive? People who have "tracked" the INSLAW
case point to the coincidences of timing: INSLAW'S problems with
the Justice Department erupted soon after <ent type='PERSON'>Jensen</ent> was promoted to
Associate Attorney General--the No. 3 person in the department--in
1983.
<ent type='PERSON'>Hamilton</ent> reveals another curious coincidence: About 90 days
before the Justice Department contract began to fall apart, he
received a phone call from <ent type='PERSON'>Dominic Laiti</ent>, chairman of <ent type='ORG'>Hadron Inc</ent>.,
a company in which <ent type='PERSON'>Earl Brian</ent>, a long-time <ent type='PERSON'>Meese</ent> colleague, holds
an interest (see "Brain's <ent type='PERSON'>Meese</ent> Connection" posting following this
one, from Barron's Jan. 11, 1988 issue). Brian's <ent type='ORG'>Infotech</ent>nology
controls four of six seats on Hadron's board. <ent type='GPE'>Laiti</ent> told <ent type='PERSON'>Hamilton</ent>,
according to <ent type='PERSON'>Hamilton</ent>, that <ent type='ORG'>Hadron</ent> intended to become the dominant
supplier of computer software and services to law enforcers and
courts and related agencies, and that <ent type='ORG'>Hadron</ent> wanted to buy INSLAW.
"We have ways of making you sell," <ent type='PERSON'>Hamilton</ent> quotes <ent type='GPE'>Laiti</ent> as saying.
<ent type='GPE'>Laiti</ent> insists: "I have no memory of this. It all sounds
ridiculous to me."
The bizarre web of coincidences and connections includes AT&amp;T.
AT&amp;T had a contract with INSLAW and, during bankruptcy proceedings,
declared itself a major creditor. Then, <ent type='PERSON'>Hamilton</ent> alleges, AT&amp;T's
attorney began to behave less like someone representing a creditor
interested in salvaging the company than like an attorney for the
Justice Department bent on liquidating it. More coincidences:
AT&amp;T's outside counsel, <ent type='PERSON'>Ken Rosen</ent>, was with an obscure <ent type='GPE'>New Jersey</ent>
firm, but formerly had been a member of Deputy Attorney General
Burns's <ent type='GPE'>New York</ent> law firm. Rosen's co-counsel, Shea &amp; Gould, is
not AT&amp;T's usual outside counsel, either, though it is the firm
used by <ent type='PERSON'>Earl Brian</ent>.
<ent type='PERSON'>Bason</ent> questions the failure of high Justice Department officials
to take any action to investigate serious allegations of
misconduct. Both <ent type='PERSON'>Hamilton</ent> and his attorney, <ent type='PERSON'>Elliot Richardson</ent>,
complained about Brewer's handling of the contract, and requested
an investigation.
"There's such a contrast between the total inaction on the part
of Justice Department regarding Mr. <ent type='ORG'>Brewer</ent>--and the hammer and
tongs approach they're using with Mr. Pasciuto," <ent type='PERSON'>Bason</ent> observes.
Last Thursday, Pasciuto's attorney, <ent type='PERSON'>Gary Simpson</ent>, delivered his
letter to Deputy Attorney General <ent type='PERSON'>Burns</ent>--and met with the Senate
committee. At the end of the week, that committee met with <ent type='PERSON'>Bason</ent>,
as well. Senator Nunn's committee may find some answers--and ask
more questions--that will illuminate this bizarre story.
For now, Pasciuto does know what happened to him and his tale
provides a window on the strange thing that happened to INSLAW.
In March of 1982, <ent type='PERSON'>William Hamilton</ent> could probably envision his
face on the cover of Fortune. He had just won the $10 million,
three-year contract with the Justice Department to install <ent type='ORG'>PROMIS</ent>
in the department's 20 largest U.S. Attorney's offices, and to
develop a separate program for its 74 smaller offices. <ent type='PERSON'>Hamilton</ent>,
who had contracts with private firms as well, now had a deal with
the nation's premier law firm: <ent type='ORG'>the Department</ent> of Justice.
<ent type='ORG'>PROMIS</ent> was unique, and those 94 U.S. Attorney's offices
represented an entering wedge: <ent type='PERSON'>Hamilton</ent> could dream of capturing
the federal judicial system's entire caseload. In the fiscal year
October 1, 1982, INSLAW's revenues went up about 35% to $7.8
million, with more than half of those revenues coming from the
Justice Department contract.
But then, that funny thing happened. The Justice Department
began postponing payments. In July 1983, <ent type='PERSON'>Hamilton</ent> says, the
department suspended nearly $250000 in payments, alleging that the
company was overcharging the government for time-sharing. In
February 1985, the government terminated the contract with smaller
offices that had been generating revenues of $200000-$300000 a
month.
INSLAW's cash flow shriveled. By Feb. 7, 1985, the government
had withheld $1.77 million. <ent type='ORG'>Inslaw</ent> twisted and turned, trying to
negotiate with the Justice Department, desperate to find out what
went wrong. Finally, in financial shambles, INSLAW filed for
bankruptcy in late February. <ent type='ORG'>The Department</ent> of Justice kept the
INSLAW software--and kept on using it.
In his decision, <ent type='PERSON'>Bason</ent> compares the Justice Department to
someone who decides to test drive an automobile: "So the customer
drives off with the car and this is the last the dealer ever sees
of him. I think that is approximately what <ent type='ORG'>the Department</ent> of
Justice has done in this case."
In last week's letter to Deputy Attorney General <ent type='PERSON'>Burns</ent> from
Pasciuto's attorney, <ent type='PERSON'>Gary Simpson</ent>, Pasciuto suggests a pattern of
harrassment that helped drive INSLAW into Chapter 11. According to
Pasciuto, in June of 1984, Robert Hunneycutt, who worked in the
Department of Justice's finance offices, told him about his
practice of dividing contractors' bills into three piles. "One
pile he would pay right away; the next pile when he got around to
it; and then he opened a drawer and pointed to some invoices in
the drawer and said: "These invoices may never get paid.'"
Hunneycutt then identified such invoices as belonging to companies
on the "bad list."
"Mr. Pasciuto asked who was in that pile," the letter to <ent type='PERSON'>Burns</ent>
goes on, "and he said that INSLAW was an example and that 'People
in the U.S Attorney's offices don't like INSLAW they are in this
pile. . . .'"
When "Barron's" phoned Hunneycutt, he returned the call, and
left this message: "Mr. Hunneycutt knows nothing." In a
subsequent conversation, he denied the conversation with Pasciuto.
But <ent type='PERSON'>Hamilton</ent> claims that the Justice Department was trying to
starve INSLAW. They didn't just push to bankrupt the software
firm, he insists, they wanted to liquidate it, converting it from
Chapter 11 to Chapter 7, as soon as possible. Why? <ent type='PERSON'>Hamilton</ent>
speculates that Justice may have wanted to push INSLAW into an
auction where <ent type='ORG'>PROMIS</ent> could be purchased cheaply by someone that the
department viewed more favorably.
Indeed, the Justice Department did move for liquidation. And on
St. Patrick's Day 1987, <ent type='PERSON'>Anthony Pasciuto</ent> met with the <ent type='PERSON'>Hamilton</ent>s at
the <ent type='ORG'>Mayflower</ent> and gave them a fuller picture of what was happening
to them. A mutual friend, <ent type='PERSON'>Mark Cunniff</ent>, executive director of the
National Association of Criminal Justice Planners, asked Pasciuto
to go to that breakfast meeting at the <ent type='ORG'>Mayflower</ent>.
"I said, 'Don't you know what you're asking me to do?'"
Pasciuto recalls. "He said, 'I know.'"
"I knew him for 19 years," Pasciuto explains. "I said, '<ent type='PERSON'>Mark</ent>,
I'm doing it for you--and for these poor people.' I knew they had
five kids," adds Pasciuto, a graying 44-year-old All-<ent type='NORP'>American</ent> "nice
guy" with a strong <ent type='GPE'>Boston</ent> accent, and an open, slightly pockmarked
face. Pasciuto has been married for 21 years, in government
service for 21 years, and still wears his class ring--U. of Mass.,
1965.
So, at the <ent type='ORG'>Mayflower</ent>, <ent type='PERSON'>Tony Pasciuto</ent> remembers he tried to help
<ent type='PERSON'>Bill</ent> and <ent type='PERSON'>Nancy</ent> <ent type='PERSON'>Hamilton</ent>--and confirmed their most paranoid
fantasies: The Justice Department was out to get them.
At the meeting with the <ent type='PERSON'>Hamilton</ent>s Pasciuto told them that his
boss, <ent type='PERSON'><ent type='PERSON'>Thomas</ent> <ent type='PERSON'>Stanton</ent></ent>, director of the Justice Department's
<ent type='ORG'>Executive Office</ent> for U.S. Trustees, was pressuring the federal
trustee overseeing the INSLAW case. <ent type='PERSON'>William White</ent> was being
pressed to liquidate INSLAW. According to Pasciuto, in 1985 <ent type='PERSON'>White</ent>
told him that he was resisting the pressure. As a result, <ent type='PERSON'>White</ent>
informed Pasciuto, <ent type='PERSON'>Stanton</ent> denied White's <ent type='GPE'>Alexandria</ent> office
administrative and budgetary support and, at the same time, tried
to have an assistant from the U.S. Trustee's office in <ent type='GPE'>New York</ent>
take over the case and convert it.
The <ent type='PERSON'>Hamilton</ent>s were told by Pasciuto that <ent type='PERSON'>Cornelius Blackshear</ent>,
the U.S. trustee in <ent type='GPE'>New York</ent> at the time of INSLAW's Chapter 11
filing, knew all about Stanton's plan. Pasciuto said that Judge
<ent type='ORG'>Blackshear</ent> had repeated this tale of pressure in the presence of
<ent type='GPE'>United</ent> States Court of Appeals Judge Lawrence <ent type='PERSON'>Pierce</ent> in the judge's
chambers in Foley Square in <ent type='GPE'>New York</ent>. Pasciuto also told the
<ent type='PERSON'>Hamilton</ent>s that the Justice Department had blacklisted INSLAW on the
department's computer system procurements.
On March 25, 1985, INSLAW's lawyers deposed <ent type='ORG'>Blackshear</ent>, and he
confirmed the story of pressure to liquidate INSLAW. The very next
day, March 26, <ent type='ORG'>Blackshear</ent> met with a Justice Department
representative, and signed a sworn affidavit, recanting, and saying
that he had confused INSLAW with another case--<ent type='GPE'>United</ent> Press
International, which had also been involved in bankruptcy
proceedings in Judge Bason's court.
"I know the difference between <ent type='GPE'>UPI</ent> and INSLAW, I'm not that
dumb," Pasciuto observes. He spells it out with a finger: "U--P--
I."
<ent type='PERSON'>Cornelius Blackshear</ent> left his position as <ent type='GPE'>United</ent> States Trustee
and became a <ent type='GPE'>United</ent> States bankruptcy judge the following fall.
According to Pasciuto, Judge <ent type='ORG'>Blackshear</ent> discussed INSLAW in
Judge Pierce's chambers. But when questioned on the point, Judge
<ent type='PERSON'>Pierce</ent> told "Barron's": "I have made it my business not to get
into the particulars of whatever <ent type='PERSON'>Tony</ent> [<ent type='PERSON'>Anthony Pasciuto</ent>] got
himself into the middle of. Apparently, he thought his employer
was doing something that was not kosher. I told him I didn't want
to know about it--if he needed to, he should hire an attorney."
When "Barron's" offered to recount the details Pasciuto
allegedly discussed in his presence, the judge grew agitated:
"Don't tell me--I don't want to hear it. I don't want to know
about it."
"I did ask him for help--six months before it all happened. I
didn't know what to do," Pasciuto recalls. "Judge <ent type='PERSON'>Pierce</ent> and I go
back to the time when I was an assistant dean at <ent type='ORG'>the School</ent> of
Criminal Justice in <ent type='GPE'>Albany</ent>--in 1972. He was a visiting faculty
member for one year. We became good friends. I considered him a
father figure.
In his ruling, Judge <ent type='PERSON'>Bason</ent> noted that <ent type='ORG'>Blackshear</ent> had given "two
different versions of the same event" and decided that other
evidence supported the first version. <ent type='PERSON'>White</ent> also denied the story
of political pressure in court and Judge <ent type='PERSON'>Bason</ent> asserted in his June
1987 ruling, "What I do believe is that Mr. <ent type='PERSON'>White</ent> has a capacity to
forget . . . a capacity which probably all humans share to some
degree or another."
Judge <ent type='PERSON'>Bason</ent> went on to point out: "Mr. <ent type='PERSON'>White</ent> has just recently
joined a large law firm that practices primarily in <ent type='GPE'>Virginia</ent> and
primarily in bankruptcy matters. Mr. White's future with the firm
that he so recently joined could well be dependent on income-producing work that he does. . . . It seems to this court that Mr.
<ent type='PERSON'>White</ent> is not in a position at this point in his career to
jeopardize his relationship with the U.S. Trustee's office in
<ent type='GPE'>Alexandria</ent>, and for him to testify in a way that would be strongly
disliked and disfavored by the <ent type='ORG'>Executive Office</ent> for U.S. Trustees
could well have an adverse impact on the relationship between the
executive office and the <ent type='GPE'>Alexandria</ent> office and, in turn, a
relationship between Mr. <ent type='PERSON'>White</ent> and the <ent type='GPE'>Alexandria</ent> office."
But in late spring of 1986, <ent type='PERSON'>White</ent> was still a U.S. Trustee, and
Pasciuto recalls one more incident involving INSLAW. <ent type='PERSON'>White</ent> called
Pasciuto and asked for an extra filing cabinet for his INSLAW
files. "I said, 'You've got plenty of them over there,'" Pasciuto
recalls. <ent type='PERSON'>White</ent> responded, "I know, but I need another one because
I need to put all the INSLAW files in one cabinet and lock it."
<ent type='PERSON'>White</ent> was discreet. So, on June 1, 1987, when <ent type='PERSON'>Anthony Pasciuto</ent>
walked into that packed D.C. courtroom to take the stand in the
INSLAW case, he knew that <ent type='PERSON'>White</ent> would not support his story. He
also knew that Judge <ent type='ORG'>Blackshear</ent> had changed his original story. As
Pasciuto's lawyer puts it in the letter to <ent type='PERSON'>Burns</ent>: "Mr. Pasciuto
was now the only person with recollection of conversations with
U.S. Trustees in which Mr. <ent type='PERSON'>Stanton</ent> was identified as having put
pressure regarding the INSLAW case. Other people's recollections
were being erased by mechanisms best known to them."
Pasciuto's boss, <ent type='PERSON'>Stanton</ent>, apparently put his own pressure on
Pasciuto. Beginning in 1985, according to the letter to <ent type='PERSON'>Burns</ent>,
Pasciuto began reporting his concerns about substantial deficits in
the U.S. Trustee's office to <ent type='PERSON'>Stanton</ent>. In 1986, Pasciuto spoke to
<ent type='ORG'>the Department</ent> of Justice's finance staff and by late 1986, he says
he had gone on record with <ent type='ORG'>the Office</ent> of Professional
Responsibility about financial indiscretions by <ent type='PERSON'>Stanton</ent>. According
to Pasciuto, <ent type='PERSON'>Stanton</ent> in September 1986 called him a "traitor."
Pasciuto began actively looking for other employment, including a
job as Assistant U.S. Trustee in <ent type='GPE'>Albany</ent>, N.Y. But no transfers
were available for <ent type='PERSON'>Anthony Pasciuto</ent>--until he was <ent type='GPE'>subpeona</ent>ed to
testify in the INSLAW case.
"Within an hour of receiving that <ent type='GPE'>subpeona</ent> to testify, Mr.
Pasciuto was given a copy of an appointment paper for a job as the
Assistant <ent type='GPE'>United</ent> States Trustee, <ent type='GPE'>Albany</ent>, <ent type='GPE'>New York</ent>, signed by Mr.
<ent type='PERSON'>Stanton</ent>," <ent type='PERSON'>Simpson</ent>, Pasciuto's attorney, reports in last week's
letter to <ent type='PERSON'>Burns</ent>. After the trial was over, however, Pasciuto was
told that the procedure "was changed" and that the deputy Attorney
General would have to sign off on the form. That never happened.
But Pasciuto, who believed the signed appointment papers, sold
his <ent type='PERSON'>house</ent> in <ent type='GPE'>Maryland</ent> for $200000 and bought a <ent type='PERSON'>house</ent> in <ent type='GPE'>Albany</ent> for
$250000. On the day the movers came, he was told that the sale of
the <ent type='GPE'>Maryland</ent> <ent type='PERSON'>house</ent> had fallen through. "We had to move, we had to
carry two <ent type='PERSON'>house</ent>s--and we couldn't even move into the <ent type='GPE'>Albany</ent> <ent type='PERSON'>house</ent>
yet because the owners wouldn't be moving out for a month," <ent type='PERSON'>Tony</ent>
Pasciuto recalls. "So, we stayed with in-laws for a month." That
was May 22, 1987. Nine days later <ent type='PERSON'>Tony Pasciuto</ent> walked into court.
When he entered the court room on June 1, 1987, Pasciuto was not
represented by counsel. According to <ent type='PERSON'>Simpson</ent>, his attorney: "The
Justice Department attorney who was handling the INSLAW case, Mr.
<ent type='PERSON'>Dean Cooper</ent>, did not prepare him well for his trial testimony. The
paralegal who was taking notes during the witness preparation says
that he has lost the notes of that meeting."
When the questioning began, Pasciuto must have realized that the
Justice Department attorney was not going to guide him gently
through his story. One of Cooper's first questions was "whether
[Pasciuto] had been seeing a doctor about a stressful condition."
In his letter to <ent type='PERSON'>Burns</ent>, <ent type='PERSON'>Simpson</ent> explains: "Mr. <ent type='PERSON'>Cooper</ent>
apparently knew that Mr. Pasciuto had been seeing a psychiatrist in
connection with personal problems that he had been experiencing and
Mr. Pasciuto . . . now knew that <ent type='GPE'>the United</ent> States Department of
Justice was prepared to stoop to the level of bringing his personal
problems into the INSLAW case to get him to be careful about what
he said."
Apparently, the tactics worked. Pasciuto recanted, saying that
the statements he made to the <ent type='PERSON'>Hamilton</ent>s at the <ent type='ORG'>Mayflower</ent> were made
in an effort to hurt <ent type='PERSON'>Stanton</ent>, who was blocking his promotion.
Judge <ent type='PERSON'>Bason</ent> remembers the scene: "Mr. Pasciuto seemed to be
basically a very honest person who had been caught up amongst a
gang of very tough people--and he just didn't know what to do. He
was a career federal employee and he was petrified. He probably
had a vision of losing his job, his marriage, everything. Probably
he thought the only way he could save anything was to recant. I
had to adjourn at one point during his testimony--he was close to
tears."
But Pasciuto didn't save his career. And now, in the letter to
<ent type='PERSON'>Burns</ent>, he has come forward to make a full disclosure.
Last week's letter to <ent type='PERSON'>Burns</ent> contains a compelling, painful
vignette of a chance meeting between Pasciuto and <ent type='ORG'>Blackshear</ent>, about
a month after the trial, on July 11, 1987. If <ent type='PERSON'>Hamilton</ent> felt
floored by Pasciuto's testimony, so Pasciuto must have felt
betrayed by Blackshear's change of heart. The meeting was awkward.
As <ent type='PERSON'>Simpson</ent> tells the story in the letter to <ent type='PERSON'>Arnold Burns</ent>, it was
six in the evening, when Pasciuto and his wife were leaving the
home of a mutual friend, <ent type='PERSON'>Harry Jones</ent>, now U.S. Trustee for the
Southern District of <ent type='GPE'>New York</ent>. Judge <ent type='ORG'>Blackshear</ent> came up to <ent type='PERSON'>Tony</ent>
Pasciuto, put his arm around him, and said, "I am sorry, it will be
all right."
Pasciuto replied: "No, it is not going to be all right, they
are going to fire me."
<ent type='ORG'>Blackshear</ent> responded, "They are not going to fire you. Don't
they know how much you know?"
Pasciuto: "Yes, but they don't care."
<ent type='ORG'>Blackshear</ent>: "But you told the truth."
Pasciuto: "Of what importance is the truth if everyone else is
lying?"
<ent type='ORG'>Blackshear</ent>: "These people came up from <ent type='GPE'>Washington</ent> and the U.S.
Attorney's office; I got confused. I thought that by changing my
story I would hurt less people. I didn't know you were subpoenaed
until I saw your testimony, which was sent to me by Barbara
O'Connor."
Pasciuto: "Do you remember what we talked with Judge <ent type='PERSON'>Pierce</ent>
about?"
"I wanted to see if he was going to continue his crap," Pasciuto
recalls. "But he dodged--literally backing away from me--saying,
again, 'They sent someone from <ent type='GPE'>Washington</ent> and someone from the U.S.
Attorney's office. I felt the easiest thing to do was recant. I
felt less people would be hurt if I just bailed out.'"
In Simpson's version, Judge <ent type='ORG'>Blackshear</ent> had received two
telephone calls from <ent type='PERSON'>William White</ent> the day he changed his story.
<ent type='PERSON'>White</ent> told him he had the wrong case.
Pasciuto, exclaimed, sarcastically: "What! They asked you
about converting *another* case [from Chapter 11 to Chapter 7]?"
<ent type='ORG'>Blackshear</ent>, waving his hand: "I don't want to get into it and
who the hell cares?"
Today, after listening to Simpson's version, <ent type='ORG'>Blackshear</ent> states:
"I don't remember the specifics, word for word, but I do remember
having that conversation. And I don't have any problems with what
<ent type='PERSON'>Tony</ent> remembers."
Recalling the scene, Pasciuto says: "You know, even now--I'm
not angry. I can't help it. I'm not. <ent type='ORG'>Blackshear</ent> is basically a
wonderful person. It's sad--I'm sorry, I'm not angry. It really
is sad. I feel devastated."
<ent type='PERSON'>Tony Pasciuto</ent> now has a <ent type='PERSON'>house</ent> in <ent type='GPE'>Albany</ent>, and soon will have no
job either in <ent type='GPE'>Washington</ent> or <ent type='GPE'>New York</ent>. Over the past nine months,
he has spent $12000 commuting from <ent type='GPE'>Albany</ent> to the job he still
clung to in D.C. Legal fees are draining his savings--the bills
total $25000 so far. "We're lucky that my wife and I were always
frugal and have the money saved," he says proudly.
But <ent type='PERSON'>Tony Pasciuto</ent> is frightened. "At work, ever since I got the
letter saying they were firing me, I've felt like I was under<ent type='PERSON'>house</ent>
arrest," he relates. "People come by my office to see if I'm
there. If I leave, I have to sign out. Everyone is supposed to,
but normally very few people sign out. If I don't, they try to
track me down. If I go to the Men's Room, they come looking for me.
"I'm just a GS 15," adds Pasciuto, referring to his level in
government service. "<ent type='PERSON'>Stanton</ent>, my boss, can't fire me. <ent type='PERSON'>Stanton</ent>
made the accusations, but the deputy Attorney General, Arnold
<ent type='PERSON'>Burns</ent>, will fire me. How does it feel to know that the deputy
Attorney General of <ent type='GPE'>the United</ent> States wants to destroy a GS 15?
It's scary. It scares me to death."</p>

<p>Subject: the INSLAW Case: part II of "BARRON'S" 1988 2-part piece
Keywords: U.S. Deptartment of Justice != "with liberty and justice for all"
Lines: 877</p>

<p> That the U.S. Justice Department could engage in a vendetta that would
end the career of a federal judge, bankrupt a company, force a partner
out of his law firm, cause another federal judge to recant under oath
and reach down and wreck the career of a 21-year government-service
employee--that's the stuff of a spy novel, set, one would hope, in
another country. But resignations en masse from a Department of
Justice inhabited by "moles" suggest alarming facts, not diverting
fiction.</p>

<p> Conclusion of a 2-part piece which appeared in the April 4, 1988 issue of
"BARRON'S NATIONAL BUSINESS AND FINANCIAL WEEKLY"</p>

<p> This part was the cover story with the following title emblazzoned
above the seal of <ent type='GPE'>the United</ent> States Department of Justice:</p>

<p> Rogue Justice: Who and What
Were Behind The Vendetta Against INSLAW?</p>

<div>------------------------------------------------------------------------------</div>

<p> Rogue Justice
What Really Sparked the Vendetta Against INSLAW
By <ent type='ORG'>MAGGIE</ent> MAHAR</p>

<p> TWO weeks ago, "Barron's" told the story of INSLAW, a small software
company that landed a $10 million contract with the Justice
Department in 1982. <ent type='PERSON'>Bill</ent> <ent type='PERSON'>Hamilton</ent>, INSLAW'S 42-year-old founder was
jubilant when Justice bought the Prosecutor's Management Information
System (<ent type='ORG'>PROMIS</ent>), which he had spent his life--and his life's
savings--building. But then things took a mysterious and nasty
turn. Justice began withholding payments. Contract disputes
multiplied. Threats accelerated. <ent type='PERSON'>Bill</ent> <ent type='PERSON'>Hamilton</ent> couldn't understand
what was happening or why. But he knew INSLAW's cash flow was
shriveling. By 1985, INSLAW was in financial shambles, and <ent type='PERSON'>Bill</ent>
<ent type='PERSON'>Hamilton</ent> ended up in federal bankruptcy court. And there, last
fall, a federal bankruptcy judge handed down an astonishing ruling.
Judge <ent type='PERSON'>George</ent> <ent type='PERSON'>Bason</ent> found that the Justice Department had
purposefully propelled INSLAW into bankruptcy in an effort to steal
its <ent type='ORG'>PROMIS</ent> software through "trickery, deceit and fraud." On Feb.
2, 1988, <ent type='PERSON'>Bason</ent> ordered <ent type='ORG'>the Department</ent> of Justice to pay INSLAW about
$6.8 million in licensing fees and roughly $1 million in legal
costs. He postponed a decision on punitive damages--which could run
as high as $25 million.
Trial testimony revealed an unexplained series of "coincidences"
surrounding the INSLAW case, including the fact that Justice
appointed C. Madison "Brick" <ent type='ORG'>Brewer</ent> to oversee the INSLAW contract.
Brick <ent type='ORG'>Brewer</ent> had worked for <ent type='PERSON'>Hamilton</ent>--until <ent type='PERSON'>Hamilton</ent> fired him in
May 1976. After listening to Brewer's testimony, Judge <ent type='PERSON'>Bason</ent> wrote
that he could not understand why Justice picked a man "consumed by
hatred" to administer the contract with a former employer. He also
couldn't fathom why top department officials ignored complaints from
INSLAW attorneys when <ent type='ORG'>Brewer</ent> began withholding payments. "A very
strange thing happened at <ent type='ORG'>the Department</ent> of Justice . . .," observed
Judge <ent type='PERSON'>Bason</ent>, leaving open the question as to just why, at the
highest levels, the U.S. Department of Justice condoned a vendetta
against a small, private U.S. company.
It was November of 1987 when Judge <ent type='PERSON'>Bason</ent> rejected a Justice
Department motion to liquidate INSLAW. Not quite one month later,
Judge <ent type='PERSON'>Bason</ent> learned that he would not be reappointed to the bench.
In the past four years, only four of 136 federal bankruptcy judges
seeking reappointment have been turned down. <ent type='PERSON'>Bason</ent> was replaced by
S. <ent type='PERSON'>Martin Teel</ent>, one of the Justice Department attorneys who
unsuccessfully argued the INSLAW case before him.
<ent type='PERSON'>Bason</ent> observes that the Justice Department will now have a "third
bite of the apple" on the question of punitive damages. Judge <ent type='PERSON'>Teel</ent>
has recused himself from the case, and the Justice Department is
appealing. So INSLAW vs. <ent type='GPE'>the United</ent> States of America hangs in
limbo.
The INSLAW case also left a Justice Department whistle-blower
waiting for the verdict on his 21-year career. When "Barron's"
began reporting the INSLAW story two weeks ago, we interviewed <ent type='PERSON'>Tony</ent>
Pasciuto. Pasciuto revealed how a Justice Department colleague
responsible for paying contractors' bills said he divided them into
three piles: "One pile he would pay right away, the next pile when
he got around to it, and then he opened a drawer and pointed to some
invoices in the drawer and said, 'These invoices may never get paid.
If you're on the bad list you go in this drawer.'" INSLAW was on
the bad list.
Pasciuto also repeated what he had been told by Cornelius
<ent type='ORG'>Blackshear</ent>, a federal judge and former U.S. Trustee based in New
York. <ent type='ORG'>Blackshear</ent> had confided that his Justice Department superior
in <ent type='GPE'>Washington</ent> was pressuring him to send someone down to D.C. to
help liquidate INSLAW. Apparently, <ent type='GPE'>Washington</ent> wanted to make sure
that the job was done.
When INSLAW's lawyers deposed <ent type='ORG'>Blackshear</ent>, he confirmed the story.
During INSLAW's suit, Judge <ent type='ORG'>Blackshear</ent> recanted. Meanwhile, about
one hour after Pasciuto was subpoenaed to testify, his superiors in
the Justice Department offered him a long-awaited transfer to
<ent type='GPE'>Albany</ent>, N.Y.
Feeling scared and "out there all alone," <ent type='PERSON'>Tony Pasciuto</ent> bought a
<ent type='PERSON'>house</ent> in <ent type='GPE'>Albany</ent> and changed his story. Close to tears, he recanted
on the stand. Judge <ent type='PERSON'>Bason</ent> recalls the scene: "Mr. Pasciuto seemed
to be basically a very honest person who had been caught up amongst
a gang of very tough people--and he just didn't know what to do."
According to Pasciuto, after he testified, Judge <ent type='ORG'>Blackshear</ent> met
him at a party and said, "I'm sorry. . . . These people came up
from <ent type='GPE'>Washington</ent> and the U.S. Attorney's office. I got confused. I
thought that by changing my story I would hurt less people." When
"Barron's" read Pasciuto's version of the conversation to Judge
<ent type='ORG'>Blackshear</ent>, a weary-sounding <ent type='ORG'>Blackshear</ent> confirmed it: "I don't
remember the specifics word for word. But I do remember the
conversation. And I don't have any problems with what <ent type='PERSON'>Tony</ent>
remembers."
Meanwhile, after <ent type='PERSON'>Tony Pasciuto</ent> recanted in court, the Justice
Department told him, "Sorry, the procedure was changed. No transfer
to <ent type='GPE'>Albany</ent>." Then, B. <ent type='PERSON'>Boykin Rose</ent>, one of the Justice Department
officials who resigned last week, wrote a letter to Deputy Attorney
General <ent type='PERSON'>Arnold Burns</ent>--another member of the Justice group who bailed
out--recommending that Pasciuto be fired.
When "Barron's" last talked to Pasciuto, he was commuting from
the new <ent type='PERSON'>house</ent> in <ent type='GPE'>Albany</ent> to a job in <ent type='GPE'>Washington</ent>, where he said, "I
feel like I'm under <ent type='PERSON'>house</ent> arrest." And he was awaiting the end of
his 21-year career in government service.
"My boss, <ent type='PERSON'><ent type='PERSON'>Thomas</ent> <ent type='PERSON'>Stanton</ent></ent>, can't fire me," Pasciuto explained.
"The Deputy Attorney General, <ent type='PERSON'>Arnold Burns</ent>, will fire me. How does
it feel to know that the Deputy Attorney General of <ent type='GPE'>the United</ent>
States wants to destroy a GS15? It's scary. It scares me to
death." Last week, <ent type='PERSON'>Burns</ent> led the dissidents out of the department.
<ent type='PERSON'>Tony Pasciuto</ent>'s tale is chilling. And it raises two equally
disquieting questions: Why did the U.S. Department of Justice want
to liquidate <ent type='PERSON'>Bill</ent> Hamilton's software company? And, how high did
the coverup of the scheme to destroy INSLAW go?</p>

<p> WHEN six Department of Justice officials resigned last week,
department spokesmen insisted that they were NOT leaving because
they feared Attorney General <ent type='PERSON'>Edwin Meese</ent> was about to be indicted.
Nor had they beaten their wives--should anyone ask. But, according
to "Barron's" sources inside Justice, their exodus represents the
climax to a much larger, subterranean game of musical chairs that
has been going on in <ent type='ORG'>the Department</ent> of Justice for the past 18
months.
"I know of at least 50 or 60 career government employees who have
been reassigned or forced out," says one department insider.
Another charges the department with using <ent type='ORG'>FBI</ent> background checks in
order to manufacture reasons for forcing employees to leave.
"They're trying to find--or force--openings for political appointees
that they want to bury as what we call 'moles' in the department,"
explains a longtime Justice Department hand. "They bury the moles
so that the next administration can't find them."
The moles, he goes on, are political appointees who are moved
into GS (government service) jobs normally held by career government
employees. "It could take the next administration two years to
figure out who are the career employees and who are the political
appointees dropped into their slots," he says. "In the meantime,
the moles will be in place--and they'll have the historical
knowledge of how the organization works--everyone else will be
gone."
But even while the moles are burrowing in, the rumor among them
is that sunlight is about to flood the shadowy reaches of the
department. For last week's resignations suggest that Special
Prosecutor James C. McKay is coming closer to addressing the
question: "Was there justice at Justice during the past four
years?"
The INSLAW affair suggests a disquieting answer, for the
virtually unpublicized case serves as a window on how Justice did
business during the <ent type='PERSON'>Meese</ent> years. In his blistering ruling, Judge
<ent type='PERSON'>Bason</ent> charged that the department committed a series of "willful,
wanton and deceitful acts . . . demonstrating contempt for both the
law and any principle of fair dealing."
Originally, <ent type='PERSON'>Bill</ent> <ent type='PERSON'>Hamilton</ent>, INSLAW's founder, thought that only
one mid-level Justice Department official was willfully and
deceitfully out to get him: C. Madison "Brick" <ent type='ORG'>Brewer</ent>, the former
employee whom he had fired. When <ent type='PERSON'>Hamilton</ent> and his wife, <ent type='PERSON'>Nancy</ent>, put
their six children in the family station wagon and drove to a
federal court on June 9, 1986, to file a suit against <ent type='GPE'>the United</ent>
States government, they firmly believed that <ent type='ORG'>Brewer</ent> was their
nemesis. But as the trial progressed, their certainty gave way to
doubts. Why did Justice put <ent type='ORG'>Brewer</ent> in that critical and, under the
circumstances, highly improper position--and allow him to remain?
Why did the Justice Department refuse to settle? Why were the
government's lawyers, seemingly not satisfied with bankrupting
INSLAW, pressing so hard to liquidate the company? When the trial
was finally over at the end of 1987, <ent type='PERSON'>Bill</ent> and <ent type='PERSON'>Nancy</ent> <ent type='PERSON'>Hamilton</ent> had won
their case, but they still wanted to know why their company was near
ruin. So they followed the counsel of <ent type='PERSON'>Elliot Richardson</ent>, one of
their attorneys: They sat down at their dining room table, made a
list of all the anomalies in the baffling case, and tried to puzzle
out the mystery.
"These were all things we were aware of, yet until you organize
them and put them side by side, you don't see them," <ent type='PERSON'>Hamilton</ent>
observes.
"But seeing the strange incidents and coincidences all together,
suddenly it popped out at me. There was a coverup--and it wasn't
just to protect Brick <ent type='ORG'>Brewer</ent>. For instance, someone had persuaded
Judge <ent type='ORG'>Blackshear</ent> to recant under oath within 48 hours of his
original deposition. Who would have that power? You don't do that
to a federal judge to protect Brick <ent type='ORG'>Brewer</ent>--it's too risky. That's
when I became convinced then that there was criminal liability at
the highest levels of the department. Then, I started to look at
the pieces. And, every time I picked up a rock and turned it over,
it seemed to fit."
Now, looking back five years, <ent type='PERSON'>Bill</ent> <ent type='PERSON'>Hamilton</ent> believes he
understands the reasons for the oppressive behavior of the Justice
Department. And he thinks he had an early warning about the
department's methods. But he didn't take the warning phone call
seriously.
As <ent type='PERSON'>Bill</ent> <ent type='PERSON'>Hamilton</ent> tells it, it was April of 1983, and he was
sitting in his office--right across the street from the "<ent type='GPE'>Washington</ent>
Post"--when he received the call from <ent type='PERSON'>Dominic Laiti</ent>, chairman of
<ent type='ORG'>Hadron Inc</ent>.
"<ent type='GPE'>Laiti</ent> identified himself, and said that <ent type='ORG'>Hadron</ent> intended to
become the leading vendor providing software for law enforcement
nationwide," <ent type='PERSON'>Hamilton</ent> recalls. "He said they had purchased <ent type='ORG'>Simcon</ent>,
a manufacturer of police-department software--and Acumedics, a
company that provides computer-based litigation support services for
courts. 'Now,' <ent type='GPE'>Laiti</ent> told me, 'we want to buy INSLAW.'"
"I told him he had just described our ambition," <ent type='PERSON'>Hamilton</ent>
relates. "We intended to become the major vendor of these software
services ourselves--and we were not interested in being acquired."
But <ent type='GPE'>Laiti</ent> kept pushing, and, according to <ent type='PERSON'>Hamilton</ent>, boasted, as
he remembers, "We have very good political contacts in the current
administration--we can get this kind of business."
The words would reverberate in Hamilton's memory later, but, at
the time, he didn't heed the implicit threat. He just repeated,
"We're not interested in selling," whereupon, he says, <ent type='GPE'>Laiti</ent>
retorted, "We have ways of making you sell."
The story sounds fantastic. <ent type='GPE'>Laiti</ent> calls it "ludicrous." Is
<ent type='PERSON'>Hamilton</ent> making it up? "I would think the whole tale was fantasy--
if I hadn't been involved in investigating the <ent type='GPE'>Iran</ent>-Contra affair,"
confides a Senate staffer now involved in an investigation of the
Justice Department's software contracts. And Judge <ent type='PERSON'>Bason</ent> states
that <ent type='PERSON'>Hamilton</ent> was a levelheaded witness with a scrupulously honest
memory:
"I was particularly impressed in the last phase of the trial,"
<ent type='PERSON'>Bason</ent> recalls. "<ent type='PERSON'>Hamilton</ent> could very easily have testified
positively in a way that would have been favorable to his case--to
an extent of about $1 million. Instead, he testified, 'This is my
best recollection--but I am not sure.' The contrast between that
and the government witness who was so obviously disingenuous!"
The call from <ent type='ORG'>Hadron</ent> was strange, so <ent type='PERSON'>Hamilton</ent> remembered it, but
in 1983 he shrugged it off. "I politely, but firmly, cut off the
conversation. I'd never had a conversation like that with someone
in the software industry. I thought <ent type='ORG'>Hadron</ent> must be new to
software--maybe they were used to an industry where this kind of
talk was more prevalent."
But now, <ent type='PERSON'>Hamilton</ent> surmises that his troubles may have begun with
that phone call. Within 90 days of Laiti's threat, he says, the
Department of Justice mounted its attack. And, <ent type='PERSON'>Hamilton</ent> alleges,
the attack ultimately became a vendetta, a vendetta that could have
been inspired by the convergence of three interests:
<ent type='ORG'>Hadron</ent>, the brazenly aggressive competitor controlled, from
behind the scenes, by a <ent type='PERSON'>Meese</ent> crony from his salad days in
<ent type='GPE'>California</ent>: Dr. <ent type='PERSON'>Earl Brian</ent>.
Brick <ent type='ORG'>Brewer</ent>, the embittered former employee who, as project
manager, was in a strategic position to do INSLAW harm.
D. <ent type='PERSON'>Lowell Jensen</ent>, then the deputy Attorney General, and a ghost
from INSLAW's own <ent type='GPE'>California</ent> past. <ent type='PERSON'>Jensen</ent> had developed a software
product to compete with INSLAW and lost--back in the 1970s when
<ent type='PERSON'>Jensen</ent> was a D.A. in <ent type='GPE'>Alameda County</ent>. But <ent type='PERSON'>Jensen</ent> did have the good
fortune to meet Ed <ent type='PERSON'>Meese</ent> in the D.A.'s office. So years later,
<ent type='PERSON'>Jensen</ent> became top-ranking member of the "<ent type='GPE'>Alameda County</ent> Mafia,"
which found a home in the Ed <ent type='PERSON'>Meese</ent> Justice Department.
When <ent type='PERSON'>Bill</ent> <ent type='PERSON'>Hamilton</ent> sat down, in good faith, to negotiate a deal
with the Justice Department, the people on the other side of the
table were not dispassionate government officials. They were
instead a hostile crew, inspired apparently by old scores and
private interest. Whether carefully organized or spontaneously
launched, the attack was successful--for a while, anyway. When the
principals and the department were suddenly in danger of exposure,
<ent type='PERSON'>Hamilton</ent> charges, the cover-up spread out to embrace the Justice
Department bureaucracy, the <ent type='ORG'>IRS</ent>, and Jensen's successor--former
Deputy Attorney General <ent type='PERSON'>Arnold Burns</ent>--one of the six who quit last
week.
"They circled their wagons," Judge <ent type='PERSON'>Bason</ent> wrote. The defense
became an offense, and an attorney, a Justice Department whistle-blower, and the judge himself all lost their jobs. Today, only two
of the three have found work.
<ent type='PERSON'>Hamilton</ent> is luckier. <ent type='ORG'>IBM</ent> has become INSLAW's savior--rescuing the
company from the auction block, and vindicating the worth of its
product. Meanwhile, some Senate staffers looking into the INSLAW
case believe that it raises questions about Project <ent type='ORG'>Eagle</ent>, a much
larger scheme to computerize the Justice Department, the $200
million contract is scheduled to be awarded before the end of the
year.
The deeply troubling questions about INSLAW remain. If anything,
they are magnified by last week's departures from Justice: "Why?"
and, "How High?"
"Start," <ent type='PERSON'>Bill</ent> <ent type='PERSON'>Hamilton</ent> says, "with <ent type='ORG'>Hadron</ent>." For <ent type='ORG'>Hadron</ent> is
indeed, as <ent type='GPE'>Laiti</ent> allegedly boasted, "well-connected in the
<ent type='ORG'>Administration</ent>." It is controlled by Dr. <ent type='PERSON'>Earl Brian</ent>, the longtime
friend of Ed <ent type='PERSON'>Meese</ent> who owns Financial News Network ("Barron's," Feb.
29[, 1988]). In fact, business dealings between the <ent type='PERSON'>Meese</ent> family
and Brian's company imperiled Meese's 1984 nomination. And <ent type='ORG'>Hadron</ent>,
<ent type='PERSON'>Hamilton</ent> charges, is one of the keys to the mystery of why INSLAW
became the victim of rogue justice.
<ent type='ORG'>Hadron</ent> boasts a history replete with acquisitions, lots of
government business--and brushes with the <ent type='ORG'>SEC</ent>.
The outfit emerged in 1979 from the ashes of <ent type='ORG'>Xonics</ent>, a notorious
high-tech fiasco founded and headed by a colorful wheeler-dealer
named <ent type='PERSON'>Bernard Katz</ent>. "Barron's" described <ent type='ORG'>Xonics</ent> in 1976 as a
company with a knack for "recognizing income as fast as possible
and deferring expense as long as it decently could."
In 1977, the <ent type='ORG'>SEC</ent> brought a lawsuit against <ent type='ORG'>Xonics</ent>, accusing top
management, including <ent type='ORG'>Katz</ent>, of fraud and manipulating the stock's
price, in part by using <ent type='ORG'>Xonics</ent> stock to acquire other firms.
Besieged by two shareholder suits, <ent type='ORG'>Xonics</ent> agreed to a permanent
injunction in April of that year. The company did not admit to any
wrong-doing.
But the nimble survived. In 1979, <ent type='PERSON'>Dominic Laiti</ent> gathered a group
of former <ent type='ORG'>Xonics</ent> executives, and bought <ent type='ORG'>Hadron</ent>. By 1983, the
company was lauded in the press as "an investment banker's dream."
For the child had, it appeared, inherited the parent's
acquisitive streak, snapping up nine companies in just three years.
The offspring did run into a few <ent type='ORG'>SEC</ent> snags of its own, however. In
1981, the <ent type='ORG'>SEC</ent> ruled that the limited partnerships <ent type='ORG'>Hadron</ent> had set up
to fund its R&amp;D efforts were in truth a form of loan financing
rather than a source of revenue. By 1982, <ent type='ORG'>Hadron</ent> had lost $4.5
million and another shareholder suit was pending.
But by 1983, <ent type='PERSON'>Dominic Laiti</ent>'s group appeared to be on a roll,
acquiring their way into an exciting new industry: lasers. <ent type='GPE'>Laiti</ent>
was quoted as saying, "There's the potential for very, very rapid
growth."
Unfortunately, the roll turned out to be a very, very rapid
roller-coaster. By February of 1984, <ent type='ORG'>Hadron</ent> was announcing sale of
its "money-losing laser-equipment division." In the third quarter a
year earlier, <ent type='ORG'>Hadron</ent> had earned a penny-a-share profit, but by early
1984, it was sinking $1.2 million into the red. Hadron's ups and
downs continued: a loss of $231000 for the 1986 fiscal year, a
profit of $852000 a year later--despite a 13% decline in revenues.
Since 1979, the price of Hadron's stock has followed the same
pattern, swinging wildly from its high of 6 1/8 in December of 1980
to a low of 3/4 in March of 1985. In the past couple of years, the
stock has been trading in a narrower range between 3/4 and 1 11/16,
and an investor complains that as far as he knows, the company
hasn't had a shareholders' meeting since 1983. "I'm not so much
perturbed that they don't meet--I wouldn't care if they never met,
if the the stock were up around $5 or $6," this sizable holder
laments.
Still, <ent type='ORG'>Hadron</ent> has kept bouncing back--with a little help from
<ent type='PERSON'>Uncle Sam</ent>: namely, contracts with the <ent type='ORG'>Pentagon</ent>, a fat settlement
with <ent type='ORG'>the Agency for International Development</ent> and, most recently, a
gigantic contract with, yes, the U.S. Department of Justice.
Hadron's government connection can be traced to <ent type='PERSON'>Earl Brian</ent>, who
was president of <ent type='ORG'>Xonics</ent>, Hadron's parent, until October of 1977.
<ent type='PERSON'>Brian</ent> slipped away from the company discreetly, just six months
after <ent type='ORG'>Xonics</ent> rolled over and agreed to the <ent type='ORG'>SEC</ent> injunction. <ent type='PERSON'>Brian</ent>
was never charged with any wrongdoing; four <ent type='ORG'>Xonics</ent> officers were
required to sign the consent decree, and he was not one of them.
Ostensibly, <ent type='PERSON'>Dominic Laiti</ent> led the investor group that then
rescued <ent type='ORG'>Hadron</ent> from the ruins of <ent type='ORG'>Xonics</ent>, but somehow <ent type='PERSON'>Brian</ent> managed
to keep his hand on the levers. Today, <ent type='GPE'>Laiti</ent>--the man who allegedly
phoned <ent type='PERSON'>Bill</ent> <ent type='PERSON'>Hamilton</ent>--is Hadron's chairman, but Brian's business-development company controls four of the six seats on Hadron's
board.
In March of 1981, <ent type='PERSON'>Brian</ent> resigned from Hadron's board in order, he
said at the time, "to divest himself of <ent type='ORG'>Hadron</ent> to facilitate future
transactions" between his business-development company,
<ent type='ORG'>Infotech</ent>nology, and <ent type='ORG'>Hadron</ent> "under the Investment Company Act of
1940." But by January 1984, <ent type='PERSON'>Brian</ent> was back on Hadron's board, and,
according to the 1987 annual report, he's still there, though <ent type='ORG'>Hadron</ent>
is continuing to do deals with <ent type='ORG'>Infotech</ent>. In October 1987, <ent type='ORG'>Hadron</ent>
sold <ent type='ORG'>Atlantic Contract Services</ent> to <ent type='ORG'>Infotech</ent> at book value for a
combination of cash and <ent type='ORG'>Infotech</ent> common stock in a deal valued at
roughly $300000.
"<ent type='PERSON'>Brian</ent> does an awful lot of buying and selling," the disgruntled
<ent type='ORG'>Hadron</ent> shareholder observes. "He's making money at it, but I'm not
sure his shareholders are making money. I know that, as a
shareholder of <ent type='ORG'>Hadron</ent>, I'm not making any money."
Still, in the spring of 1987 <ent type='ORG'>Hadron</ent> moved into the black in large
part because it received $1.6 million from the Agency for
International Development. The <ent type='ORG'>AID</ent> settlement came after the U.S.
government cancelled a <ent type='ORG'>Hadron</ent> subsidiary's business with <ent type='GPE'>Syria</ent>.
But the <ent type='ORG'>AID</ent> money wasn't the only lucky boon from <ent type='PERSON'>Uncle Sam</ent>. The
government has long been a <ent type='ORG'>Hadron</ent> client: In the 1987 fiscal year,
approximately 34% of the company's revenues came from <ent type='ORG'>the Department</ent>
of Defense. And most recently, a <ent type='ORG'>Hadron</ent> subsidiary, Acumedics,
locked up a $40 million contract with <ent type='ORG'>the Department</ent> of Justice.
<ent type='ORG'>Hadron</ent> never did acquire INSLAW. But there's more than one way
to skin a Justice Department software contract. Last October,
Hadron's Acumedics division signed the $40 million deal to provide
automated litigation-support services for Justice's Land and Natural
Resources division.
When the Acumedics contract was awarded, competitors groused that
the bidding process was unfair. Justice officials respond that all
bids went through a stringent review process.
"There was absolutely no pressure on me. It was one of the
cleanest procurements I've been involved in," recalls <ent type='PERSON'>Steve Denny</ent>,
the contracts officer on the case.
Justice Department officials also pointed out that the $40
million deal was essentially a continuation of a 1983 contract.
Acumedics began doing business with the Justice Department in 1970
as an 8(a) minority business. In 1983, Acumedics was acquired by
<ent type='ORG'>Hadron</ent>--and lost its 8(a) status. But even without the favored
status, <ent type='ORG'>Hadron</ent> somehow managed to hold onto the business, and win a
four-year competitive bid contract. Shortly after the acquisition,
<ent type='PERSON'>Earl Brian</ent> reappeared on the <ent type='ORG'>Hadron</ent> board, and, recalls a former
<ent type='ORG'>Hadron</ent> executive, told the board, "If we needed any help in
marketing at Acumedics, he had been a member of Reagan's <ent type='ORG'>Cabinet</ent>, he
knew people--and would be willing to make phone calls." The <ent type='ORG'>Hadron</ent>
alumnus adds: "He was just being nice." According to Federal
Computer Week, a trade publication: "A competitor for the 1983
contract, who declined to be named, said his company no longer bids
on Justice Department contracts. He explained that, after losing
the 1983 contract to Acumedics, 'We took a look at their bid
compared to ours, and it was about $1.5 million over ours.'"
Now, the size of Acumedics's newest deal with the government has
raised old questions about the man behind the <ent type='ORG'>Hadron</ent> subsidiary, Dr.
<ent type='PERSON'>Earl Brian</ent>, and his connection to Ed <ent type='PERSON'>Meese</ent>. A venture capitalist,
and former neurosurgeon, Dr. <ent type='PERSON'>Brian</ent> practiced medicine in <ent type='GPE'>Vietnam</ent>,
then returned to the States, where he became health and welfare
secretary in then-Gov. Reagan's <ent type='GPE'>California</ent> cabinet. There, he
served with Ed <ent type='PERSON'>Meese</ent>, Reagan's chief of staff until 1979. Today,
<ent type='PERSON'>Brian</ent> owns and oversees <ent type='ORG'>Infotech</ent>nology (which controls <ent type='ORG'>Hadron</ent>), the
Financial News Network, and, most recently, he headed up an
investment group that bought the right to run <ent type='GPE'>United</ent> Press
International.
The <ent type='PERSON'>Brian</ent> connection became an embarrassment during Ed Meese's
confirmation hearings when <ent type='PERSON'>Meese</ent> acknowledged that his wife, <ent type='PERSON'>Ursula</ent>,
borrowed $15000 from a <ent type='PERSON'>Meese</ent> adviser, <ent type='PERSON'>Edwin Thomas</ent>, in order to buy
stock in Brian's company. Coincidentally, just six months later,
<ent type='PERSON'>Brian</ent> lent $100000 to <ent type='PERSON'>Thomas</ent>, who by then needed money himself--and
had become a member of the <ent type='PERSON'>White</ent> House staff. Neither <ent type='PERSON'>Meese</ent> nor
<ent type='PERSON'>Thomas</ent> listed the loans on their financial disclosure statements.
<ent type='PERSON'>Meese</ent> paid no interest, and <ent type='PERSON'>Thomas</ent> only partial interest. Following
a six-month investigation, independent counsel concluded that there
was no basis for criminal charges against <ent type='PERSON'>Meese</ent>, and while
"inferences might be drawn from Mr. Thomas's contact with Dr. <ent type='PERSON'>Brian</ent>
. . . whether Mr. <ent type='PERSON'>Thomas</ent> or Dr. <ent type='PERSON'>Brian</ent> committed a violation of law
was not within our jurisdiction. Even if we were to make an
assumption that Mr. <ent type='PERSON'>Thomas</ent> might have been acting on insider
information, we have been given no evidence by the <ent type='ORG'>SEC</ent>."
<ent type='PERSON'>Bill</ent> <ent type='PERSON'>Hamilton</ent> learned of the connection between <ent type='ORG'>Hadron</ent>, <ent type='PERSON'>Brian</ent> and
<ent type='PERSON'>Meese</ent> only after the INSLAW trial ended. But then remembering what
Hadron's Chairman <ent type='PERSON'>Dominic Laiti</ent> said about being politically
connected--not to mention "ways of making you sell"--<ent type='PERSON'>Hamilton</ent>
thought he glimpsed an ominous pattern.
<ent type='PERSON'>Hamilton</ent> believes the Justice Department mounted its attack 90
days after the <ent type='ORG'>Hadron</ent> phone call, "with the apparent objective of
forcing INSLAW either to agree to be acquired, or into bankruptcy."
<ent type='PERSON'>Earl Brian</ent>, <ent type='PERSON'>Hamilton</ent> is convinced, would have been happy to pick up
INSLAW cheaply--at a liquidation sale.
Moreover, <ent type='PERSON'>Hamilton</ent> has reason to believe that the No. 2 man in
Justice, D. <ent type='PERSON'>Lowell Jensen</ent>, wasn't at all disposed to save INSLAW
from the auction block. For, years earlier, <ent type='PERSON'>Jensen</ent> had competed
with INSLAW's product, <ent type='ORG'>PROMIS</ent>, head-on. While holding public office
in <ent type='GPE'>Alameda County</ent>, <ent type='GPE'>Calif</ent>., <ent type='PERSON'>Jensen</ent> was promoting a rival software,
DALITE, that he hoped would be used statewide. <ent type='PERSON'>Jensen</ent> lost.
<ent type='PERSON'>Jensen</ent> served as <ent type='GPE'>Alameda County</ent> district attorney in the early
1970s and during that time he tried to persuade other DA offices to
adopt DALITE, the case-tracking software system that he helped
develop. To that end, <ent type='PERSON'>Hamilton</ent> alleges, <ent type='PERSON'>Jensen</ent> urged the <ent type='GPE'>California</ent>
District Attorneys Association to incorporate. By incorporating,
the association would be in a position to apply for grants,
receiving and administering funds needed to finance DALITE training
statewide. But, <ent type='PERSON'>Hamilton</ent> recalls, the very month that the
association finally incorporated, the <ent type='GPE'>Los Angeles</ent> District
Attorney's office, the state's largest, chose INSLAW's <ent type='ORG'>PROMIS</ent>
software--dashing Jensen's hopes for DALITE.
<ent type='PERSON'>Larry</ent> <ent type='PERSON'>Don</ent>oghue, now deputy district attorney for <ent type='GPE'>the County</ent> of
<ent type='GPE'>Los Angeles</ent>, remembers the keen rivalry. He was in charge of
selecting software for the L.A. office at the time, and he recalls
visiting <ent type='GPE'>Alameda County</ent> while making on-site inspections: "<ent type='PERSON'>Jensen</ent>
called me into his office and I went away feeling what I regarded to
be unusual and significant pressure to select the DALITE system.
But <ent type='ORG'>PROMIS</ent> was a more suitable system for a large office. After I
made the recommendation to L.A., I remember my conversation with
<ent type='PERSON'>Joseph Busch</ent>, who was district attorney there at the time. I said,
'<ent type='PERSON'>Joe</ent> what's your reason for hesitating?' He said, '<ent type='PERSON'>Larry</ent>, there is
resistance to my selecting <ent type='ORG'>PROMIS</ent>.' The resistance couldn't have
come from within the L.A. office," <ent type='PERSON'>Don</ent>oghue adds, "no one there knew
anything about software. By a process of elimination, it must have
come from <ent type='GPE'>Alameda County</ent>."
When "Barron's" attempted to reach <ent type='PERSON'>Jensen</ent> for a reply, his office
stated that, because the INSLAW case is still pending, he could not
comment. But during the trial, <ent type='PERSON'>Jensen</ent> conceded that he had been a
critic of INSLAW's software. Yet, he insisted, DALITE was not a
commercial product available for sale to the public, and he had no
financial interest in it.
<ent type='PERSON'>Jensen</ent> didn't own DALITE any more than <ent type='PERSON'>Bill</ent> <ent type='PERSON'>Hamilton</ent> owned <ent type='ORG'>PROMIS</ent>
when he first invented it. Like DALITE, INSLAW's <ent type='ORG'>PROMIS</ent> began as a
government product. <ent type='PERSON'>Bill</ent> <ent type='PERSON'>Hamilton</ent> developed it while working as a
consultant for the U.S. District Attorney's office in D.C. in 1970,
and improved it while working for a not-for-profit company funded by
the Justice Department. <ent type='ORG'>PROMIS</ent> became commercial software only after
<ent type='PERSON'>Hamilton</ent> left this last job in 1981, formed INSLAW, and raised
private funds to refine <ent type='ORG'>PROMIS</ent>. The software then became a
proprietary, and highly profitable, product. Presumably <ent type='PERSON'>Jensen</ent>
might have had the same luck with DALITE--if <ent type='ORG'>PROMIS</ent> had not won the
<ent type='GPE'>California</ent> race.
Instead, <ent type='PERSON'>Jensen</ent> remained at his post in <ent type='GPE'>Alameda County</ent> for 12
years. And from 1959 until 1967, Ed <ent type='PERSON'>Meese</ent> served with <ent type='PERSON'>Jensen</ent>, as an
<ent type='GPE'>Alameda</ent> deputy district attorney.
When Ronald Reagan became President, Ed <ent type='PERSON'>Meese</ent> recommended that
his former colleague, <ent type='PERSON'>Jensen</ent>, be appointed assistant Attorney
General in charge of the Criminal Division. In 1983, when Rudolph
Giuliani resigned as associate Attorney General--the No. 3 spot in
the department--<ent type='PERSON'>Jensen</ent> ascended to that post.
So in early 1984, when <ent type='PERSON'>Edwin Meese</ent> became Attorney General, his
old <ent type='GPE'>Alameda County</ent> compatriot was already in place. And <ent type='PERSON'>Jensen</ent> was
not alone. A network, nicknamed the <ent type='GPE'>Alameda County</ent> Mafia, already
was ensconced in Justice. No fewer than six former <ent type='GPE'>Alameda County</ent>
law-enforcement officials held positions ranging from deputy
assistant attorney in the tax division, to commissioner of
naturalization and immigration. The former <ent type='GPE'>Oakland</ent> deputy police
chief had snagged a spot as director of <ent type='ORG'>the National</ent> Institute of
Justice.
Under <ent type='PERSON'>Meese</ent>, <ent type='PERSON'>Jensen</ent> rose to No. 2, and developed a reputation as
a buffer between Ed <ent type='PERSON'>Meese</ent> and his critics. The 58-year-old <ent type='NORP'>Democrat</ent>
was described as "soft-spoken" "apolitical" and a "gentleman of the
old standard" in a 1986 "<ent type='GPE'>New York</ent> Times" tribute, which added,
"Colleagues say that Mr. <ent type='PERSON'>Jensen</ent>, better than anyone else at the
Justice Department, knows how to duck."
The Justice Department's diplomat had to duck when congressional
investigators looking into the <ent type='GPE'>Iran</ent>-Contra affair reportedly found a
Justice Department memo dated March 20, 1986, saying that Deputy
Assistant Attorney General D. <ent type='PERSON'>Lowell Jensen</ent> was giving a "heads-up"
to <ent type='ORG'>the National</ent> Security Council, warning that <ent type='GPE'>Miami</ent> federal
prosecutors were on Ollie North's trail.
<ent type='PERSON'>Bill</ent> <ent type='PERSON'>Hamilton</ent> believes <ent type='PERSON'>Jensen</ent> displayed the same talent for
diplomatic bobbing and weaving throughout the INSLAW affair. When
<ent type='PERSON'>Hamilton</ent> pieced together the anomalies, he realized Jensen's rise to
power occurred in the fateful spring of 1983, when he received the
call from <ent type='ORG'>Hadron</ent>, and all of his troubles began.
"<ent type='PERSON'>Jensen</ent> was promoted to associate Attorney General in May or June
of '83--and that's when all the contract disputes came up," <ent type='PERSON'>Hamilton</ent>
points out. <ent type='PERSON'>Jensen</ent> exhibited a strong interest in the software
contract and even served as chairman of the <ent type='ORG'>PROMIS</ent> oversight
committee.
In December of 1983, INSLAW's counsel, <ent type='PERSON'>Elliott Richardson</ent>, and
<ent type='PERSON'>Hamilton</ent> met with the assistant Attorney General for administration,
<ent type='PERSON'>Kevin Rooney</ent>. They expressed their concern that Brick <ent type='ORG'>Brewer</ent>, the
project manager on the INSLAW contract, was biased against the
company because <ent type='PERSON'>Bill</ent> <ent type='PERSON'>Hamilton</ent> had fired <ent type='ORG'>Brewer</ent> some years earlier.
<ent type='PERSON'>Rooney</ent> testified in a deposition that, a week later, he told
Jensen's oversight committee that Richardson's proposal seemed
reasonable. It appeared that the dispute could be resolved. But
<ent type='PERSON'>Rooney</ent> left the committee meeting early. After he was gone,
<ent type='PERSON'>Hamilton</ent> says, "Mr. <ent type='PERSON'>Jensen</ent> and the other members of the committee
surprisingly approved a plan to terminate the word-processing part
of the INSLAW contract with the department's <ent type='ORG'>Executive Office</ent> for
U.S. Attorneys."
In March of 1983, <ent type='PERSON'>Hamilton</ent> alleges, <ent type='PERSON'>Bill</ent> <ent type='PERSON'>Tyson</ent>. formerly director
of that <ent type='ORG'>Executive Office</ent>, told <ent type='PERSON'>Hamilton</ent> that a Presidential
appointee at Justice was biased against INSLAW. In March 1987,
<ent type='PERSON'>Tyson</ent> sent a handwritten letter to <ent type='PERSON'>Jensen</ent>, reassuring him that he
had denied this allegation under oath--and that he had not named
<ent type='PERSON'>Jensen</ent> as the appointee in question. He also sent a note to Deputy
Attorney General <ent type='PERSON'>Arnold Burns</ent>.
In a deposition, <ent type='PERSON'>Tyson</ent> was asked:
"Did either Mr. <ent type='PERSON'>Jensen</ent> or Mr. <ent type='PERSON'>Burns</ent> ask you to write the letter?"
"No sir."
"Did you not realize that by writing a letter to Mr. <ent type='PERSON'>Jensen</ent> of
this type informing him of your intended testimony that he would
then be able to develop his testimony to be consistent with yours?"
"That was not my intention."
"But as an attorney, you realize that is a possibility, more than
a possibility?"
"Well, that was not my intention. . . ."
In his ruling last September, Judge <ent type='PERSON'>Bason</ent> characterized portions
of Tyson's testimony as "so ludicrous that there is no way I can
believe anything that the man has to say."
A month before writing the notes, <ent type='PERSON'>Tyson</ent> was removed from his
position in the <ent type='ORG'>Executive Office</ent> for U.S. Attorneys, and he and his
secretary were exiled to Justice's Immigration and Naturalization
Service--though in positions commensurate with their grade levels.
By protesting too much, <ent type='PERSON'>Tyson</ent> could seem to further implicate
<ent type='PERSON'>Jensen</ent>. But, the answer to "How High?" leads even higher. Ed <ent type='PERSON'>Meese</ent>
himself may have been involved in a push to force <ent type='PERSON'>Leigh Ratiner</ent>,
INSLAW's litigating attorney, off the case.
<ent type='ORG'>Ratiner</ent> had been a partner at <ent type='PERSON'>Dickstein</ent>, <ent type='PERSON'>Shapiro</ent>, &amp; <ent type='ORG'>Morin</ent> for 10
years when <ent type='PERSON'>Elliot Richardson</ent> recruited him to take on INSLAW.
<ent type='PERSON'>Dickstein</ent>, <ent type='PERSON'>Shapiro</ent> was the law firm of <ent type='PERSON'>Chuck Colson</ent>, of <ent type='EVENT'>Watergate</ent>
notoriety. <ent type='PERSON'>Colson</ent> brought in its principal client, the Teamsters
Union. More recently, <ent type='PERSON'>Dickstein</ent>, <ent type='PERSON'>Shapiro</ent> became known in the loop
as <ent type='PERSON'>Leonard Garment</ent>'s firm. <ent type='ORG'>Garment</ent>, a former colleague says, has
been described as "the only attorney in <ent type='GPE'>Washington</ent> who will put a
senator on hold to take a call from a reporter." <ent type='ORG'>Garment</ent> was former
<ent type='PERSON'>White</ent> House counsel to <ent type='PERSON'>Richard Nixon</ent>, and represented <ent type='PERSON'>Meese</ent> during
his confirmation hearings.
<ent type='PERSON'>Meese</ent> and <ent type='ORG'>Garment</ent> put their heads together again after <ent type='ORG'>Ratiner</ent>
filed a complaint in the INSLAW case that named Meese's longtime
friend and deputy Attorney General, <ent type='PERSON'>Jensen</ent>.
<ent type='ORG'>Ratiner</ent>, an aggressive attorney with a reputation as very bright,
ego-driven, and a loner within the <ent type='PERSON'>Dickstein</ent>, <ent type='PERSON'>Shapiro</ent> firm, relished
being viewed as a maverick. So he was displaying his usual
independence when he filed the complaint that named <ent type='PERSON'>Jensen</ent> early in
October 1986. On Oct. 12, the "L.A. Times" ran a story airing the
INSLAW case and the former rivalry between <ent type='PERSON'>Hamilton</ent> and <ent type='PERSON'>Jensen</ent>. On
Oct. 23, <ent type='ORG'>Ratiner</ent> was asked to leave the law firm. Between Oct. 12
and Oct. 23, Ed <ent type='PERSON'>Meese</ent> talked to <ent type='ORG'>Garment</ent> about the case.
In a pre-trial interrogatory, Ed <ent type='PERSON'>Meese</ent> conceded that he had a
"general recollection of a conversation with <ent type='PERSON'>Leonard Garment</ent> in
which Mr. <ent type='ORG'>Garment</ent> mentioned that he had discussed INSLAW with Arnold
<ent type='PERSON'>Burns</ent>." <ent type='PERSON'>Arnold Burns</ent>, the deputy Attorney General who resigned last
week, replaced <ent type='PERSON'>Jensen</ent> when <ent type='PERSON'>Jensen</ent> left <ent type='GPE'>Washington</ent> to take a federal
judgeship in <ent type='GPE'>San Francisco</ent> in the spring of 1986.
When "Barron's" asked <ent type='PERSON'>Leonard Garment</ent> about the conversation, he
emulated D. <ent type='PERSON'>Lowell Jensen</ent>. He ducked. "I know there was a
suggestion by <ent type='PERSON'>Meese</ent>--or one of his staff--saying he met and spoke to
me about INSLAW. Oh, he said it in pre-trial interrogatories? Then
. . . it was a question of his recollection."
<ent type='ORG'>Garment</ent> was more emphatic regarding Ratiner's removal. "No one in
the Justice Department or the whole U.S. government or the whole <ent type='GPE'>USA</ent>
suggested to me that anything should be done with <ent type='ORG'>Ratiner</ent>. Nor do I
remember mentioning INSLAW to <ent type='PERSON'>Meese</ent>," he continues. "Look--I met
with <ent type='PERSON'>Meese</ent> around the date he mentioned, and I discussed with him a
matter of foreign policy. I was on my way to Israel. . . . Memory
is so tricky, but I don't have the slightest recollection. . . ."
Finally, <ent type='ORG'>Garment</ent> collected his recollections and summed up his
position. "As <ent type='PERSON'>Sam Goldwyn</ent> said, 'Include me out.'"
Ratiner's exit settlement with <ent type='PERSON'>Dickstein</ent>, <ent type='PERSON'>Shapiro</ent> bars him from
discussing how and why he left. But <ent type='PERSON'>Hamilton</ent> believes that <ent type='PERSON'>Burns</ent>
and <ent type='PERSON'>Meese</ent> expressed dismay at the fact that he had turned the
spotlight on <ent type='PERSON'>Jensen</ent>. After <ent type='ORG'>Ratiner</ent> gave up the case, the firm
continued to represent INSLAW, but <ent type='PERSON'>Hamilton</ent> feels their support
waned. In January of 1987, <ent type='PERSON'>Dickstein</ent>, <ent type='PERSON'>Shapiro</ent> urged him to settle
with Justice for $1 million--of which about half would go to pay
<ent type='PERSON'>Dickstein</ent>, Shapiro's fees. A few days later, <ent type='PERSON'>Hamilton</ent> switched
attorneys. In September, Judge <ent type='PERSON'>Bason</ent> awarded INSLAW $6.8 million - plus attorneys' fees.
During the trial, <ent type='PERSON'>Tony Pasciuto</ent>'s boss, <ent type='PERSON'><ent type='PERSON'>Thomas</ent> <ent type='PERSON'>Stanton</ent></ent> testified
to another reason why <ent type='PERSON'>Meese</ent> might have been interested in the INSLAW
case: INSLAW could besmirch the U.S. Trustee program. The U.S.
Trustee's Office had been recently set up to administer bankruptcies
nationwide, and it was Meese's baby. <ent type='PERSON'>Meese</ent> made the decision to
take the Trustee program national--even though his predecessor,
<ent type='PERSON'>William French Smith</ent>, had planned to ditch the pilot Trustee
program.
Two of Pasciuto's former colleagues in the Justice Department
allege that the move to keep the U.S. Trustee program was flagrantly
political. "It was a way of getting cronies into office. There
would be 50 or 60 positions to be filled," one asserts. <ent type='PERSON'>Stanton</ent>,
the director of the Trustee program, seemed well-protected within
Justice. This former Pasciuto colleague adds: "It was always
puzzling to me how he got away with what he got away with. He'd do
things that were blatantly wrong and no one would question him--it's
kind of scary." Another former employee confirms, "Irrespective of
the law, or anything, if <ent type='PERSON'>Stanton</ent> wanted something, he had the ear of
the right people at the highest level--straight from <ent type='PERSON'>Burns</ent> to <ent type='PERSON'>Meese</ent>.
If he could not get what he needed, he went to <ent type='PERSON'>Burns</ent>."
Outside Justice, bankruptcy attorneys like <ent type='PERSON'>Patrick Kavanagh</ent>, a
solo practitioner in <ent type='GPE'>Bakersfield</ent>, <ent type='GPE'>Calif</ent>., worry that the Trustee
program "concentrates so much power in one government department. .
. . It's supposed to act as a watchdog over lawyers and trustees,
but the problem is it's more. It has a considerable amount of power
to control the administration of cases."
When a case moves from bankruptcy to liquidation, the U.S.
Trustee's Office names the trustee, who converts the assets,
oversees an auction, and retains appraisers who will put a price tag
on the leavings.
The U.S. Trustee's program also links Justice and the <ent type='ORG'>IRS</ent>. "The
thing that's a little frightening about it is that the U.S. Trustee
department sees itself as part of the tax-collecting function of
government," observes <ent type='PERSON'>Charles Docter</ent>, the bankruptcy attorney
representing INSLAW. "The Justice Department represents the <ent type='ORG'>IRS</ent>,
and the <ent type='ORG'>IRS</ent> is often the biggest creditor in a liquidation.
In the INSLAW case, tax collectors seem unusually determined to
see their debt paid immediately. "The <ent type='ORG'>IRS</ent> showed up in <ent type='PERSON'>Bill</ent>
Hamilton's office the day after the trial ended in August.
Ultimately, they would demand that he personally pay the $600000
that INSLAW owes," says <ent type='ORG'>Docter</ent>. "Usually the <ent type='ORG'>IRS</ent> calls us before
coming to see one of our clients," he notes. "We talk to them on
the phone and get it straight." <ent type='PERSON'>Hamilton</ent> doesn't have the $600000
in his personal savings account.
But <ent type='ORG'>Docter</ent> responded to the pressure by writing a letter in which
INSLAW promised to pay the withholding portion of the taxes within
30 days. "Normally, the <ent type='ORG'>IRS</ent> would wait that long." he says.
"Instead, on the 28th day, they went out and filed to convert INSLAW
from Chapter 11 to Chapter 7." Once again, they were trying to
liquidate INSLAW.
Lately, <ent type='ORG'>Docter</ent> reports, an aggressive <ent type='ORG'>IRS</ent> has been pursuing
withholding taxes by going after the individual who owns a company,
"but normally they don't go for the jugular immediately and file for
a motion to liquidate."
Still on the bench, Judge <ent type='PERSON'>Bason</ent> managed to stop the <ent type='ORG'>IRS</ent> push to
liquidate INSLAW.
When the tax collectors filed to convert INSLAW to Chapter 7,
<ent type='ORG'>Docter</ent> recalls having a memorable conversation with an attorney from
the Justice Department's tax division. <ent type='ORG'>Docter</ent> chided the attorney
from Justice, saying: "Look, the judge has already found that you
tried to steal the software through 'trickery and deceit.' Isn't it
about time you stopped this heavy-handed stuff? Doesn't anyone in
the department have enough guts to say, 'We have to start handling
this like lawyers?' The whole thing is just completely sullying the
Justice Department."
<ent type='ORG'>Docter</ent> states that the attorney from Justice replied: "I don't
set policy around here. The Attorney General does."
And, <ent type='PERSON'>Bill</ent> <ent type='PERSON'>Hamilton</ent> remembers, Ed <ent type='PERSON'>Meese</ent> approved the Justice
Department bonuses awarded after the trial was over, in December of
1987. Three of the six who received bonuses were involved in the
INSLAW case:
<ent type='PERSON'>Stewart Schiffer</ent>, who directly supervised the INSLAW litigation,
received $20000.
<ent type='PERSON'>Michael Shaheen</ent>, head of the "Office of Professional
Responsibility," $20000. <ent type='PERSON'>Shaheen</ent> wrote a letter to <ent type='PERSON'>Arnold Burns</ent> on
Dec. 18 recommending that whistle-blower Pasciuto be fired for
exercising "atrocious judgment" in telling the <ent type='PERSON'>Hamilton</ent>s what he
knew.
Lawrence McWhorter, Brick Brewer's boss, $10000. McWhorter,
Judge <ent type='PERSON'>Bason</ent> noted, said, "'I don't recall' or 'I don't know'
something like 147 times in his deposition." The court found
McWhorter's testimony to be "totally unbelievable."
<ent type='PERSON'>Arnold Burns</ent>, deputy Attorney General until just last week,
headed up the panel that received recommendations for Justice
bonuses.
With no help from <ent type='PERSON'>Uncle Sam</ent>, <ent type='PERSON'>Bill</ent> <ent type='PERSON'>Hamilton</ent> earned his own bonus.
<ent type='ORG'>IBM</ent> has plans to enter a $2.5 million deal with INSLAW that will
bail the firm out of bankruptcy. "About $1 million will be used for
software development to integrate INSLAW's products with IBM's own
database software," <ent type='PERSON'>Hamilton</ent> says, "and $1.5 million will be used to
finance INSLAW's reorganization." Details are still being
negotiated.
"IBM's law firm has drawn up a contract. We expect to have it
signed in two or three weeks," <ent type='PERSON'>Hamilton</ent> adds.
In a 1981 speech, <ent type='PERSON'>Edwin Meese</ent> had lauded INSLAW's work on <ent type='ORG'>PROMIS</ent>
as "one of the greatest opportunities for success in the future."
It seems he was right: The <ent type='ORG'>IBM</ent> deal provides the clearest evidence
of all of the product's continuing value.
Still, the <ent type='ORG'>IRS</ent> persists in demanding immediate payment--even
though the pending <ent type='ORG'>IBM</ent> contract, not to mention the $8 million owed
by Justice, suggest that INSLAW will be able to pay its tax bill.
Charlie <ent type='ORG'>Docter</ent>, INSLAW's attorney, comments on the <ent type='ORG'>IRS</ent> posture:
"The whole thing smacks of a police state. This case scares the
hell out of me. '
"Scary" is the word most often used by victims of the INSLAW
affair. They are angry, but they also can't quite believe it
happened.
That the U.S. Justice Department could engage in a vendetta that
would end the career of a federal judge, bankrupt a company, force a
partner out of his law firm, cause another federal judge to recant
under oath and reach down and wreck the career of a 21-year
government-service employee--that's the stuff of a spy novel, set,
one would hope, in another country. But resignations en masse from
a Department of Justice inhabited by "moles" suggest alarming facts,
not diverting fiction.
<ent type='PERSON'>Bill</ent> Hamilton's story is not based on imagination. It's based on
experience, and there's considerable circumstantial evidence that he
could have been the victim of a <ent type='GPE'>California</ent> cabal encompassing
onetime members of the Reagan gubernatorial cabinet, and alumni of
the <ent type='GPE'>Alameda County</ent> Mafia. Ed <ent type='PERSON'>Meese</ent> belonged to both groups.</p>

<p> Why did INSLAW rate the attention of such a powerful group? INSLAW
was, one Senate staffer suggests, the leading edge of Justice's $200
million "Project <ent type='ORG'>Eagle</ent>," a plan to computerize the department's tax
division, criminal division and the 94 U.S. Attorney's offices.
INSLAW predates the four-year-old Project <ent type='ORG'>Eagle</ent>, and might well
offer an easy entry to any company that wants to participate in that
program. The Justice Department has taken pains to say that INSLAW
is not involved in Project <ent type='ORG'>Eagle</ent>. But Senate staffers looking into
both INSLAW and Project <ent type='ORG'>Eagle</ent> aren't so sure.
Project <ent type='ORG'>Eagle</ent> seems part of the same pattern of musical chairs:
John J. <ent type='ORG'>Lane</ent>, a respected deputy assistant Attorney General for
information technology, left last summer, and according to
<ent type='ORG'>Government Computer</ent> News, Justice has lost its four <ent type='ORG'>IRM</ent> (information
resources management) officials with the longest service in the past
year. When <ent type='ORG'>Lane</ent> left, Justice reorganized its computer operations
and created a new position, naming <ent type='PERSON'>Stephen</ent> R. <ent type='ORG'>Colgate</ent>, who had been
director of <ent type='ORG'>the Treasury Department</ent>'s Office of Finance, to head
Project <ent type='ORG'>Eagle</ent>.
Asked about his priorities, <ent type='ORG'>Colgate</ent> was quoted in the trade
publication as saying that, for the leadership of the department,
"<ent type='ORG'>Eagle</ent> is the No. 1 priority. <ent type='ORG'>Eagle</ent> is the technology legacy that
this <ent type='ORG'>Administration</ent> wants to leave behind."
A member of Sen. Christopher Dodd's staff who has been looking
into the INSLAW case for more than a year takes a more cynical view:
"If you wanted to wire [fix] something, this would be the
project," he confides. "It's been anticipated for a long time.
And, it's a lot of money. So, if you wanted to wire something . . .
this would be the one."
These days, however, it's unlikely anyone at Justice wants wire
anything. Today, there's a new agenda: Everyone is either
burrowing in, or getting out. And, before leaving, there's an
urgent desire to tidy up.
Justice had announced its intention to fire <ent type='PERSON'>Tony Pasciuto</ent> two
months ago. But in the end, just a week before Deputy AG Arnold
<ent type='PERSON'>Burns</ent> resigned, he agreed to meet with Pasciuto's attorney, Gary
<ent type='PERSON'>Simpson</ent>, to hear Pasciuto's side of the case.
Five or six officials from Justice were in the room; another
three or four--including one who had recommended firing Pasciuto--
waited nervously in the hallway outside.
"I was on a roll," confesses <ent type='PERSON'>Simpson</ent>, who is normally matter-of-fact. "It was something else. I was accusing them of all sorts of
things, and no one stopped me."
Justice ultimately proposed a painless solution: Pasciuto should
walk away, go work somewhere else, and they'd acknowledge he had
been a good employee.
During the meeting, <ent type='PERSON'>Simpson</ent> did most of the talking. "<ent type='PERSON'>Burns</ent> was
really taking it on the chin," he recalls. "He jerked back a couple
of times, but he didn't say anything. More than once, he nodded
assent. When I stated that <ent type='ORG'>Blackshear</ent> had recanted, he nodded
again. And," <ent type='PERSON'>Simpson</ent> concludes, "<ent type='PERSON'>Burns</ent> didn't look like he was
hearing any of it for the first time."</p>

<p> Where Are They Now?</p>

<p> LEIGH RATINER has left the practice of law. The man who once
negotiated the Law of the Sea treaty for the U.S. government now
runs his own business, <ent type='ORG'>LSR Enterprises</ent>, a maker of filing systems
for lawyers.
JUDGE <ent type='PERSON'>BASON</ent>, who was denied reappointment as a federal bankruptcy
judge, is still unemployed, and looking for work. Judge <ent type='PERSON'>Bason</ent> has
no regrets, though he concedes he does not relish controversy.
Indeed Judge <ent type='PERSON'>Bason</ent> tried to have himself taken off the INSLAW case
when it first came up. "I talked to the chief justice of the
District Court and said, 'This has the potential of becoming a very
hot potato.' I wasn't sure I wanted to get involved in it." <ent type='PERSON'>George</ent>
<ent type='PERSON'>Bason</ent> is not, by temperament, a fighter.
"My wife tells me I'm very stubborn," the 56-year-old former law
professor confesses. "It takes me a long time to make up my mind
about things and I tend to reserve judgment until I know as much as
I can. But when I make up my mind, I'm very firm. To a very
aggressive person I may give the impression of being a pushover, and
when I prove not to be one, such people can be very angry."
TONY <ent type='ORG'>PASCIUTO</ent> is luckier. He has been offered a good job at a
large financial firm based in <ent type='GPE'>New York</ent>. If he takes it, he'll be
making a lateral move from Justice into the private sector.
Meanwhile, his attorney, <ent type='PERSON'>Gary Simpson</ent>, awaits final word on
Pasciuto's honorable discharge from the department. The papers are
scheduled to be signed today.</p>

<div> ------------------------------------------------------------------------------</div>

<p> if you've made it to the end of these 2 articles, you understand that there
are a lot of questions Ms. <ent type='PERSON'>Mahar</ent> leaves open-ended since, during the spring
of 1988 when she wrote this, many aspects of this situation were still
grinding on and had not achieved the clarity now more evident. obviously,
3 and a half years later, and a great deal more known about this story,
there is much that Ms. <ent type='PERSON'>Mahar</ent> was only able to intimate for lack of more
concrete evidence that has since become available. if any of you are
interested in following up on any of the points raised in these 2 articles,
i'd like to suggest at least a couple of obvious starting points. Maggie
<ent type='PERSON'>Mahar</ent> writes that</p>

<p> <ent type='PERSON'>Bason</ent> questions the failure of high Justice Department officials
to take any action to investigate serious allegations of misconduct.</p>

<p> and alludes to the Senate Permanent Subcommittee on Investigations, chaired
at that time by Sam <ent type='PERSON'>Nunn</ent>:</p>

<p> The Senate's Permanent Subcommittee on Investigations is now
looking into INSLAW--a sign that the lawmakers, too, think that the
whole story of the "something strange" that happened in the Justice
Department has yet to be told. . . . At the end of the week, that
committee met with <ent type='PERSON'>Bason</ent>, as well. Senator Nunn's committee may
find some answers--and ask more questions--that will illuminate
this bizarre story.</p>

<p> why not call up Senator Nunn's office and ask "what happened?" "what did
you find out? what did you conclude? is there a report you can send me?"
also Senator Dodd's office should be called:</p>

<p> A member of Sen. Christopher Dodd's staff . . . has been looking
into the INSLAW case for more than a year . . .</p>

<p> to see if the member she alludes to is still there or ever wrote up a
report of their examinations.</p>

<p>--
daveus rattus</p>

<p> yer friendly neighborhood ratman</p>

<p> KOYAANISQATSI

ko.yan.nis.qatsi (from <ent type='EVENT'>the Hopi Language</ent>) 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.
<special>end reposted material</special>
-<ent type='PERSON'>Steve Crocker</ent>
</p></xml>