textfiles-politics/txt_files/inslaw2.asc

Article 1019 of misc.activism.progressive:
Path: bilver!tarpit!fang!att!att!linac!uwm.edu!cs.utexas.edu!asuvax!ukma!mthvax.cs.miami.edu!mont!rich
From: dave@ratmandu.corp.sgi.com (dave "who can do? ratmandu!" ratcliffe)
Newsgroups: misc.activism.progressive
Subject: the INSLAW Case:  2/29/88 "BARRON'S" piece on Brian-Meese connection
Message-ID: <1991Oct11.194208.8647@pencil.cs.missouri.edu>
Date: 11 Oct 91 19:42:08 GMT
Sender: rich@pencil.cs.missouri.edu (Rich Winkel)
Followup-To: alt.activism.d
Organization: PACH
Lines: 175
Approved: map@pencil.cs.missouri.edu


   although this article is 3 1/2 years old, there's precious little in the
   public record regarding Earl "Cash" Brian.  Brian's connections to Meese
   is one avenue of research worth studying.  This article provides a few
   more details.

                      from the February 29, 1988 issue of
	       "BARRON'S NATIONAL BUSINESS AND FINANCIAL WEEKLY"

                           Brian's Meese Connection
                                 Maggie Mahar

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


--
                                             daveus rattus

                                   yer friendly neighborhood ratman

                              KOYAANISQATSI

   ko.yan.nis.qatsi (from the Hopi Language)  n.  1. crazy life.  2. life
       in turmoil.  3. life out of balance.  4. life disintegrating.
         5. a state of life that calls for another way of living.