informis
/
textfiles
1
0
Fork 0
Code Issues Pull Requests Packages Projects Releases Wiki Activity
textfiles/law/summary.txt

755 lines
42 KiB
Plaintext
Raw Permalink Blame History

THE INSLAW AFFAIR
SEPTEMBER 10, 1992.-Committed to the Committee of the Whole
House on the
State of the Union and ordered to be printed
Mr. BROOKS, from the Committee on the Judiciary, submitted
the following
INVESTIGATIVE REPORT
together with
DISSENTING AND SEPARATE DISSENTING VIEWS
BASED ON A STUDY BY THE FULL COMMITTEE
On August 11, 1992, the Committee on the Judiciary
approved and adopted a report entitled, '"The INSLAW
Affair." The chairman was directed to transmit a copy to the
Speaker of the House.
I. SUMMARY
The Department of Justice has long recognized the need
for a standardized management information system to assist
law enforcement offices across the country in the
recordkeeping and tracking of criminal cases. During the
1970's, the Law Enforcement Assistance Administration (LEAA)
funded the development by INSLAW1
of a computer software system called the Prosecutor's
Management Information System or PROMIS. This system was
designed to meet the criminal prosecutor workloads of large
urban jurisdictions; and by 1980, several large U.S.
attorneys offices were using the PROMIS software. At this
time, INSLAW (formerly
called the Institute for Law and Social Research) was a
nonprofit corporation funded almost entirely through
Government grants and contracts. When President Carter
terminated the LEAA, INSLAW converted the company to a for-
profit corporation in 1981 to commercially market PROMIS.
The new corporation made several significant improvements to
the original PROMIS software and the resulting product came
to be known as INSLAW's proprietary Enhanced PROMIS. The
original PROMIS was funded entirely with Government funds
and was in the public domain.
In March 1982, the Justice Department awarded INSLAW,
Inc., a $10 million, 3-year contract to implement the public
domain version of PROMIS at 94 U.S. attorneys' offices
across the country and U.S. Territories. While the PROMIS
software could have gone a long way toward correcting the
Department's longstanding need for a standardized case
management system, the contract between INSLAW and Justice
quickly became embroiled in bitterness and controversy which
has lasted for almost a decade. The conflict centers on the
question of whether INSLAW has ownership of its privately
funded "Enhanced PROMIS." This software was eventually
installed at numerous U.S. attorneys' offices after a 1983
modification to the contract. While Justice officials at the
time recognized INSLAW's proprietary rights to any privately
funded enhancements to the original public domain version of
PROMIS, the Department later claimed that it had unlimited
rights to all software supplied under the contract. (See
section of report entitled, "The Department Misappropriated
INSLAW Software.'")
INSLAW attempted to resolve the matter several times but
was largely met with indifference or hostility by Department
officials. Eventually, the Department canceled part of the
contract and, by February 1985, had withheld at least $1.6
million in payments. As a result, the company was driven to
the brink of insolvency and was threatened with dissolution
under chapter 7 of the bankruptcy laws. Department officials
have steadfastly claimed the INSLAW controversy is merely a
contract dispute which has been blown out of proportion by
the media. INSLAW's owners, William and Nancy Hamilton,
however, have persisted in their belief that the
Department's actions were Part of a high level conspiracy
within Justice to steal the Enhanced PROMIS software.
A. INSLAW ALLEGATIONS
Based on their knowledge and belief, the Hamiltons have
alleged that high level officials in the Department of
Justice conspired to steal the Enhanced PROMIS software
system. As an element of this theft, these officials, who
included former Attorney General Edwin Meese and Deputy
Attorney General Lowell Jensen, forced INSLAW into
bankruptcy by intentionally creating a sham contract dispute
over the terms and conditions of the contract which led to
the withholding of payments due INSLAW by the Department.
The Hamiltons maintain that, after driving the company into
bankruptcy, Justice officials attempted to force the
conversion of INSLAW's bankruptcy status from Chapter 11:
Reorganization to Chapter 7: Liquidation. They assert that
such a change in bankruptcy status would have resulted in
the forced sale of INSLAW'S assets, including Enhanced
PROMIS to a rival computer company
called Hadron, Inc., which, at the time, was attempting
to conduct a hostile buyout of INSLAW. Hadron, Inc., was
controlled by the Biotech Capital Corporation, under the
control of Dr. Earl Brian, who was president and chairman of
the corporation. The Hamiltons assert that even though the
attempt to change the status of INSLAW's bankruptcy was
unsuccessful, the Enhanced PROMIS software system was
eventually provided to Dr. Brian by individuals from the
Department with the knowledge and concurrence of then
Attorney General Meese who had previously worked with Dr.
Brian in the cabinet of California Governor Ronald Reagan
and later at the Reagan White House. According to the
Hamiltons, the ultimate goal of the conspiracy was to
position Hadron and the other companies owned or controlled
by Dr. Brian to take advantage of the nearly 3 billion
dollars, worth of automated data processing upgrade
contracts planned to be awarded by the Department of Justice
during the 1980's.
Information obtained by the Hamiltons through sworn
affidavits of several individuals, including Ari Ben-
Menashe, a former Israeli Mossad officer, and Michael
Riconosciuto, an individual who claims to have ties to the
intelligence community, indicated that an element of this
ongoing criminal enterprise by Mr. Meese, Dr. Brian and
others included the modification of the Enhanced PROMIS
software by individuals associated with the world of covert
intelligence operations. The Hamiltons claim the
modification of Enhanced PROMIS was an essential element of
the enterprise, because the software was subsequently
distributed by Dr. Brian to intelligence agencies
internationally with a "back door" software routine, so that
U.S. intelligence agencies could covertly break into the
system when needed. The Hamiltons also presented information
indicating that PROMIS had been distributed to several
Federal agencies, including the FBI, CIA, and DEA.
B. COMMITTEE INVESTIGATION
Due to the complexity and breadth of the INSLAW
allegations against the Department of Justice, the
committee's investigation focused on two principal
questions: (1) Did high level Department officials convert,
steal or otherwise misappropriate INSLAW's PROMIS software
and attempt to put the company out of business; and, (2) did
high level Department of Justice officials, including
Attorney General Edwin Meese and then Deputy Attorney
General Lowell Jensen, and others conspire to sell,
transfer, or in any way distribute INSLAW's Enhanced PROMIS
to other Federal agencies and foreign governments?
1. DID THE DEPARTMENT CONVERT, STEAL OR MISAPPROPRIATE THE
PROMIS SOFTWARE?
With regard to the first question, there appears to be
strong evidence, as indicated by the findings in two Federal
court proceedings as well as by the committee investigation,
that the Department of Justice "acted willfully and
fraudulently"2 and "took, con-
verted and stole"3 INSLAW's Enhanced PROMIS by "trickery,
fraud and deceit."4 It appears that these actions against
INSLAW were implemented through the project manager from the
beginning of the contract and under the direction of high
level Justice Department officials.
Just 1 month after the contract was signed, Mr. C.
Madison "Brick" Brewer, the PROMIS project manager, raised
the possibility of canceling the INSLAW contract. During an
April 14, 1982, meeting of the PROMIS Project Team, Mr.
Brewer, and others discussed terminating the contract with
INSLAW for convenience of the Government. Mr. Brewer did not
recall the details of the meeting but said that if this
recommendation was made, it was made "in jest."5 Based on
notes taken at this meeting by Justice officials, Bankruptcy
Court Judge George Bason found that Mr. Brewer's
recommendation to terminate the INSLAW contract,
"<22>constituted a smoking gun that clearly evidences Brewer's
intense bias against INSLAW, his single-minded intent to
drive INSLAW out of business<73>."6 By his own admission, Mr.
Brewer became upset when INSLAW claimed that it had made
enhancements to the public domain version of PROMIS using
private funds. In his view, under the contract all versions
of PROMIS were the Government's property. It is clear from
the record that Mr. Brewer and Mr. Videnieks (the PROMIS
contracting officer), supported by high level Justice
officials continued to confront INSLAW at every turn. As
Senior District Court Judge Bryant stated in his ruling on
the case: '"There was unending contention about payments
under this contract and the rights of the respective
parties."
Over the life of the contract, INSLAW made several
attempts to reach an agreement with the Department over its
proprietary rights to the Enhanced PROMIS software. The
Department, however, steadfastly refused to conduct any
meaningful negotiations and exhibited little inclination to
resolve the controversy. In the meantime, INSLAW was pushed
to the brink of financial ruin because the Department
withheld at least $1.6 million in critical contract payments
on questionable grounds, and in February 1985 was forced to
file for protection under chapter 11 of the Bankruptcy Code
in order to stay economically viable. INSLAW at this time
had installed PROMIS at the 20 largest U.S. attorneys'
offices across the country as required by the contract.7 The
Department had earlier canceled installation of PROMIS at
the 74 smaller offices.
While refusing to engage in good faith negotiations with
INSLAW, Mr. Brewer and Mr. Videnieks, with the approval of
high level Justice Department officials, proceeded to take
actions to misappropriate the Enhanced PROMIS software.
These officials knew that INSLAW had installed Enhanced
PROMIS at the 20 sites. Yet, without notice, and certainly
without permission, the Depart-
ment of Justice illegally copied INSLAW's Enhanced PROMIS
software and installed it eventually at 25 additional U.S.
attorneys' offices. The Department reportedly also brought
another 31 U.S. attorneys, offices "on-line" to Enhanced
PROMIS systems via telecommunications. INSLAW first learned
of these unauthorized actions in September 1985, and
notified the Department that it must remove the Enhanced
PROMIS software or arrange for license agreements. When the
Department refused, INSLAW subsequently filed a claim
against Justice in the Federal Bankruptcy Court which
eventually led to the Bankruptcy's Court's finding that the
Department's actions "<22>were done in bad faith, vexatiously,
in wanton disregard of the law and the facts, and for
oppressive reasons <20> to drive INSLAW out of business and to
convert, by trickery, fraud and deceit, INSLAW's PROMIS
software. When the case was appealed by the Department,
Senior District Court Judge William Bryant concurred with
the Bankruptcy Court and was very critical of the
Department's handling of the case. In his ruling, at 49a,
Judge Bryant stated:
The Government accuses the bankruptcy court of
looking beyond the bankruptcy proceeding to find
culpability by the Government. What is strikingly
apparent from the testimony and depositions of key
witnesses and many documents is that INSLAW
performed its contract in a hostile environment
that extended from the higher echelons of the
Justice Department to the officials who had the
day-to-day responsibility for supervising its
work. [Emphasis added.]
Recently, the posture of some Department officials has
been to attempt to exonerate the Department's handling of
the INSLAW matter by citing the fact that the Court of
Appeals has vacated the Bankruptcy and District Courts'
judgment involving illegal misconduct of the Department
including violations of the automatic stay provisions of the
Bankruptcy Code. However, the D.C. Circuit's opinion was
grounded primarily on jurisdictional questions and did not
address the substantive merits of the findings of fact and
conclusions of law of either the Bankruptcy Court or the
ruling of the U.S. District Court.
Based on the facts presented in court and the committee's
review of Department records, it does indeed appear that
Justice officials, including Mr. Brewer and Mr. Videnieks,
never intended to fully honor the proprietary rights of
INSLAW or bargain in good faith with the company. The
Bankruptcy Court found that:
<20> [The Department] engaged in an outrageous,
deceitful, fraudulent game of cat and mouse,
demonstrating contempt for both the law and any
principle of fair dealing. [Finding No. 266 at
138.]
As the Bankruptcy and District Courts found on the
merits, it is very unlikely that Mr. Brewer and Mr.
Videnieks acted alone to violate the proprietary rights of
INSLAW in this matter. In explaining his own actions, Mr.
Brewer, the project manager, has repeatedly stated that he
was not acting out any personal vendetta against INSLAW and
that high level Department officials including Lowell Jensen
were aware of every decision he made with regard to the
contract. Mr. Brewer stated, under oath that "<22>there was
somebody in the Department at a higher level, looking over
the shoulder of not just me but the people who worked for
me<EFBFBD>.''8 The PROMIS Oversight Committee, headed by Deputy
Attorney General Lowell Jensen, kept a close watch over the
administration of the contract and was involved in every
major decision. Mr. Jensen, who worked with former Attorney
General Edwin Meese in the Alameda County district
attorneys' offices, stated under oath that he kept the
Attorney General regularly informed of all aspects of the
INSLAW contract. The PROMIS Oversight Committee readily
agreed with Mr. Brewer's recommendation to cancel part of
INSLAW's contract for default because of the controversy
regarding the installation of PROMIS in word processing
systems at the 74 smaller U.S. attorneys' offices. Mr.
Brewer's proposal was ultimately rejected only because a
Justice contracts attorney advised the oversight committee
that the Department did not have the legal authority to do
so. Curiously, the recommendation to find INSLAW in default
occurred shortly after INSLAW and the Department signed a
modification to the contract (Mod. 12), which was supposed
to end the conflict over proprietary rights.
Mr. Jensen, who is currently a Federal District Court
judge in San Francisco, served at the Justice Department
successively as Assistant Attorney General in charge of the
Criminal Division, Associate Attorney General and Deputy
Attorney General between 1981 and 1986. The Bankruptcy court
found that he "had a previously developed negative attitude
about PROMIS and INSLAW" from the beginning (Findings No.
307-309) because he had been associated with the development
of a rival case management system while he was a district
attorney in California, and that this experience, at the
very least, affected his judgment throughout his oversight
of the contract. During a sworn statement, Judge Jensen
denied being biased against INSLAW, but averred that he did
not have complete recollection of the events surrounding his
involvement in the contract. However, based on the
committee's own investigation it is clear that Judge Jensen
was not particularly interested or active in pursuing
INSLAW's claims that Department officials were biased
against the company and had taken action to harm the
company. Perhaps most disturbing, he remembered very few
details of the PROMIS Oversight Committee meetings even
though he had served as its chairman and was certainly one
of its most influential members. He stated that after a
meeting with former Attorney General Elliot Richardson
(representing INSLAW) regarding the alleged Brewer bias, he
commissioned his deputy, Mr. Jay Stephens, to conduct an
investigation of the bias charges. Based on this
investigation, Judge Jensen said he concluded that there
were no bias problems associated with the Department's
handling of the INSLAW contract.
This assertion, however, contradicted Mr. Stephens, who
testified during a sworn statement that he was never asked
by Judge Jensen to conduct an investigation of the Brewer
bias allegations raised by Mr. Richardson and others. Mr.
Stephens, recollection of the events was sharp and complete
in stark contrast to Judge Jensen's. As a result, many
questions remain about the accuracy and
completeness of Judge Jensen's recollections and statements.
As for the PROMIS Oversight Committee, committee
investigators were told that detailed minutes were not kept
at any of the meetings, nor was there any record of specific
discussions by its members affecting the INSLAW contract.
The records that were available were inordinately sparse and
often did not include any background of how and why
decisions were made.
To date, former Attorney General Meese denies having
knowledge of any bias against INSLAW by the Department or
any of its officials. He stated, under oath, that he had
little, if any, involvement with the INSLAW controversy and
that he recalls no specific discussion with anyone,
including Department officials about INSLAW's contract with
Justice regarding the use or misuse of the PROMIS software.
This statement is in direct conflict with Judge Jensen's
testimony, that he briefed Mr. Meese regularly on this issue
and that Mr. Meese was very interested in the details of the
contract and negotiations.
One of the most damaging statements received by the
committee is a sworn statement made by Deputy Attorney
General Arnold Burns to Office of Professional
Responsibility (OPR) investigators in 1988. In this
statement, Mr. Burns stated that Department attorneys had
already advised him (sometime in 1986) that INSLAW's claim
of proprietary rights in the Enhanced PROMIS software was
legitimate and that the Department had waived any rights in
these enhancements. Mr. Burns was also told by Justice
attorneys that the Department would probably lose the case
in court on this issue. Accepting this statement, it is
incredible that the Department, having made this
determination, would continue to pursue its litigation of
these matters. More than $1 million has been spent in
litigation on this case by the Justice Department even
though it knew in 1986 that it did not have a chance to win
the case on merits. This clearly raises the specter that the
Department actions taken against INSLAW in this matter
represent an abuse of power of shameful proportions.
2. WAS THERE A HIGH LEVEL CONSPIRACY?
The second phase of the committee's investigation
concentrated on the allegations that high level officials at
the Department of Justice conspired to drive INSLAW into
insolvency and steal the PROMIS software so it could be used
by Dr. Earl Brian, a former associate and friend of then
Attorney General Edwin Meese. Dr. Brian is a businessman and
entrepreneur who owns or controls several] businesses
including Hadron, Inc., which has contracts with the Justice
Department, CIA, and other agencies. The Hamiltons and
others have asserted that Dr. Brian conspired with high
level Justice officials to sell PROMIS to law enforcement
and intelligence agencies worldwide.
Former Attorney General Elliot Richardson, counsel to
INSLAW, has alleged that the circumstances involving the
theft of the PROMIS software system constitute a possible
criminal conspiracy involving Mr. Meese, Judge Jensen, Dr.
Brian, and several current and former officials at the
Department of Justice. Mr. Richardson maintains that the
individuals involved in the theft of the Enhanced PROMIS
system have violated a plethora of Federal crimi-
nal statutes, including but not limited to: (1) 18 U.S.C 654
(officer or employee of the United States converting the
property of another); (2) 18 U.S.C 1001 (false statements);
(3)18 U.S.C 1621 (perjury); (4) 18 U.S.C 1503 (obstruction
of justice); (5) 18 U.S.C 1341 (mail fraud) and (6) 18
U.S.C. 371 (conspiracy to commit criminal offenses). Mr.
Richardson further contends that the violations of Federal
law associated in the theft of Enhanced PROMIS, the
subsequent coverup and the illegal distribution of PROMIS
fulfill the requirements for prosecution under 18 U.S.C.
1961 et seq. (the Racketeer Influenced and Corrupt
Organizations (RICO) statute).
As discussed earlier, the committee's investigation
largely supports the findings of two Federal courts that the
Department "took, converted, stole INSLAW'S Enhanced PROMIS
by "trickery, fraud and deceit'', and that this
misappropriation involved officials at the highest levels of
the Department of Justice. The recent ruling by the D.C.
Circuit Court of Appeals does nothing to vitiate those
conclusions, the product of an extensive record compiled
under oath by two Federal jurists. While the Department
continues to attempt to explain away the INSLAW matter as a
simple contract dispute, the committee's investigation has
uncovered other information which plausibly could suggest a
different conclusion if full access to documents and other
witnesses were permitted. Several individuals have stated
under oath that the Enhanced PROMIS software was stolen and
distributed internationally in order to provide financial
gain to Dr. Brian and to further intelligence and foreign
policy objectives for the United States. While it should be
acknowledged at the outset that some of the testimony comes
from individuals whose past associations and enterprises are
not commendable, corroborating evidence for a number of
their claims made under oath has been found. It should be
observed that these individuals provided testimony with the
full knowledge that the Justice Department could-and would
probably be strongly inclined to-prosecute them for perjury
if they lied under oath. Moreover, we note that the
Department is hardly in a position to negate summarily
testimony offered by witnesses who have led less than an
exemplary life in their choice of associations and
activities. As indicated by the recent prosecution of Manuel
Noriega, which involved the use of over 40 witnesses, the
majority of whom were previously convicted drug traffickers,
a witness, perceived credibility is not always indicative of
the accuracy or usability in court of the information
provided. Although the committee's investigation could not
reach a definitive conclusion regarding a possible motive
behind the misappropriation of the Enhanced PROMIS software,
the disturbing questions raised, unexplained coincidences
and peculiar events that have surfaced throughout the INSLAW
case raises the need for further investigation.
One area which requires further investigation is the
allegations made by Mr. Michael Riconosciuto. Mr.
Riconosciuto, a shady character allegedly tied to U.S.
intelligence agencies and recently convicted on drug
charges, alleges that Dr. Brian and Mr. Peter Videnieks
secretly delivered INSLAW's Enhanced PROMIS software to the
Cabazon Indian Reservation, located in California, for
"refitting" for use by intelligence agencies in the United
States and
abroad.9 When Dr. Brian was questioned about his alleged
involvement in the INSLAW case, he denied under oath that he
had ever met Mr. Riconosciuto and stated that he had never
heard of the Cabazon Indian Reservation.
C. ADDITIONAL QUESTIONS
Suspicions of a Department of Justice conspiracy to steal
INSLAW's PROMIS were fueled when Danny Casolaro-an
investigative writer inquiring into those issues-was found
dead in a hotel room in Martinsburg, WV, where he was to
meet a source that he claimed was critical to his
investigation. Mr. Casolaro's body was found on August 10,
1991, with his wrists slashed numerous times. Following a
brief preliminary investigation by local authorities, Mr.
Casolaro's death was ruled a suicide. The investigation was
reopened later as a result of numerous inquiries from Mr.
Casolaro's brother and others regarding the suspicious
circumstances surrounding his death.
The Martinsburg Police investigation subsequently
concluded in January 1992, that Mr. Casolaro's death was a
suicide. Subsequently, Chairman Brooks directed committee
investigators to obtain sworn statements from the FBI agent
and two former Federal Organized Crime Strike Force
prosecutors in Los Angeles who had information bearing on
the Casolaro case. Sworn statements were obtained from
former Federal prosecutors Richard Stavin and Marvin Rudnick
on March 13 and 14, 1992. After initial resistance from the
Bureau, a sworn statement was taken from FBI Special Agent
Thomas Gates on March 25 and 26, 1992.
Special Agent Gates stated that Mr. Casolaro claimed he
had found a link between the INSLAW matter, the activities
taking place at the Cabazon Indian Reservation, and a
Federal investigation in which Special Agent Gates had been
involved regarding organized crime influence in the
entertainment industry.
Special Agent Gates stated that Mr. Casolaro had several
conversations with Mr. Robert Booth Nichols in the weeks
preceding his death. Mr. Nichols, according to documents
submitted to a Federal court by the FBI, has ties with
organized crime and the world of covert intelligence
operations. When he learned of Mr. Casolaro's death, Special
Agent Gates contacted the Martinsburg, WV, Police Department
to inform them of the information he had concerning Mr.
Nichols and Mr. Casolaro. The Martinsburg Police have not
commented on whether or not they eventually pursued the
leads provided by Special Agent Gates.
Based on the evidence collected by the committee, it
appears that the path followed by Danny Casolaro in pursuing
his investigation into the INSLAW matter brought him in
contact with a number of dangerous individuals associated
with organized crime and the world of covert intelligence
operations. The suspicious circumstances surrounding his
death have led some law enforcement professionals and others
to believe that his death may not have been a suicide. As
long as the possibility exists that Danny
Casolaro died as a result of his investigation into the
INSLAW matter, it is imperative that further investigation
be conducted.
D. EVIDENCE OF POSSIBLE COVERUP AND OBSTRUCTION
One of the principal reasons the committee could not
reach any definitive conclusion about INSLAW's allegations
of a high criminal conspiracy at Justice was the lack of
cooperation from the Department. Throughout the two INSLAW
investigations, the Congress met with restrictions, delays
and outright denials to requests for information and to
unobstructed access to records and witnesses since 1988. The
Department initially attempted to prevent the Senate
Permanent Subcommittee on Investigations from conducting an
investigation of the INSLAW affair. During this committee's
investigation, Attorney General Thornburgh repeatedly
reneged on agreements made with this committee to provide
full and open access to information and witnesses. Although
the day before a planned committee meeting to consider the
issuance of a subpoena the Department promised full access
to documents and witnesses, the committee was compelled to
subpoena Attorney General Thornburgh to obtain documents
needed to complete its investigation. Even then, the
Department failed to provide all the documents subpoenaed,
claiming that some of the documents held by the Department's
chief attorney in charge of the INSLAW litigation had been
misplaced or accidentally destroyed. The Department has not
provided a complete accounting of the number of documents
missing nor has it conducted an investigation to determine
if the documents were stolen or illegally destroyed.
Questions regarding the Department's willingness and
objectivity to investigate the charges of possible
misconduct of Justice employees remain. That Justice
officials may have too readily concluded that witnesses
supporting the Department's position were credible while
those who did not were ignored or retaliated against was,
perhaps, most painfully demonstrated with the firing of
Anthony Pasciuto, the former Deputy Director, Executive
Office of the U.S. Trustees.
Mr. Pasciuto had informed the Hamiltons that soon after
INSLAW filed for chapter 11 bankruptcy in 1985, the Justice
Department had planned to petition the court to force INSLAW
into chapter 7 bankruptcy and liquidate its assets including
the PROMIS software. His source for this information was
Judge Cornelius Blackshear who, at the time, was the U.S.
Trustee for the Southern District of New York. Judge
Blackshear subsequently provided INSLAW's attorneys with a
sworn statement confirming what Mr. Pasciuto had told the
Hamiltons. However, following a conversation with a Justice
Department attorney who was representing the Department in
the INSLAW case,10 Judge Blackshear recanted his earlier
sworn statement. Moreover, Judge Blackshear, under oath,
could not or would not provide committee investigators with
a plausible explanation of why he had recanted
his earlier statements to INSLAW, Mr. Pasciuto and others
regarding the Justice Department's efforts to force INSLAW
out of business. He did confirm an earlier statement
attributed to him that his recantation was a result of "his
desire to hurt the least number of people." However, he
would not elaborate on this enigmatic statement.
Similarly, Mr. Pasciuto, under strong pressure from
senior Department officials, recanted his statement made to
the Hamiltons regarding Judge Blackshear. It appears that
Mr. Pasciuto may have been fired from his position with the
Executive Office of U.S. Trustees because he had provided
information to the Hamiltons and their attorneys which
undercut the Department's litigating position before the
Bankruptcy Court.11 This action was based on a recommendation
made by the Office of Professional Responsibility (OPR). In
a memorandum to Deputy Attorney General Burns, dated
December 18, 1987, the OPR concluded that:
In our view, but for Mr. Pasciuto's highly
irresponsible actions, the department would be in
a much better litigation posture than it presently
finds itself. Mr. Pasciuto has wholly failed to
comport himself in accordance with the standard of
conduct expected of an official of his position.
Mr. Pasciuto now states he regrets having allowed himself
to be coerced by the Department into recanting and has
stated under oath to committee investigators that he stands
by his earlier statements made to the Hamiltons that Judge
Blackshear had informed him that the Department wanted to
force INSLAW out of business. Certainly, Mr. Pasciuto's
treatment by the Department during his participation in the
INSLAW litigation raises serious questions of how far the
Department will go to protect its interests while defending
itself in litigation. Not unexpectedly, Mr. Pasciuto's
firing had a chilling effect on other potential Department
witnesses who might have otherwise cooperated with the
committee in this matter. Judge Blackshear, on the other
hand, was not accused of wrongdoing by the Department even
though he originally provided essentially the same
information as had Mr. Pasciuto.
Despite this series of obvious reversals, the Department,
after limited investigation, has apparently satisfied itself
that the sworn statements of its witnesses, including Judge
Blackshear, have somehow been reconciled on key issues such
that no false statements have been made by any of these
individuals. This position is flatly in opposition to the
Bankruptcy Court's finding that several Department officials
may have perjured themselves which was never seriously
investigated by the Department. In addition, there are
serious conflicts and inconsistencies in sworn statements
provided to the committee that have not been resolved.
Equally important, the possibility that witnesses, testimony
were manipulated by the Department in order to present a
"united front" to the Congress and the public on the INSLAW
case needs to be fully and honestly explored. The potential
for a conflict of interest in the Department's
carrying out such an inquiry is high, if not prudently
manifest, and independent scrutiny is required.
E. JUDGE BASON'S ALLEGATIONS AGAINST THE DEPARTMENT
Judge Bason testified, under oath, before the Economic
and Commercial Law Subcommittee that the Department's
actions against its critics may have extended into blocking
his reappointment as a bankruptcy judge in 1988 because of
his ruling in INSLAW's case. Judge Bason was replaced by
Martin Teel, Jr., who, prior to his appointment, was a
Justice Department attorney heavily involved in the
Department's litigation of the INSLAW case.12 The committee
was unable to substantiate Judge Bason's charges. If such
undue influence did occur, it was subtle and lost in the
highly private manner in which judge selection procedures
are conducted. While sworn statements were not taken, the
committee investigators interviewed several of the judges
involved in the selection process. The judges who agreed to
provide interviews all stated that they had little firsthand
knowledge in which to evaluate the candidates, including the
incumbent judge. As a result, the members of the Judicial
Council had to rely on the findings of the Merit Selection
Panel headed by Judge Norma Johnson.
The Merit Selection Panel's findings were provided to the
Judicial Council by Judge Johnson whose oral presentation
was instrumental in the final selection. Judge Johnson had
previously worked at the Department of Justice with Stuart
Schiffer, who led the Department's attempt to have the
District Court remove Judge Bason from the INSLAW case. Mr.
Schiffer is also the official who argued vociferously
against the appointment of an independent counsel on the
INSLAW case in a memorandum to Deputy Attorney General
Arthur Burns. Judge Johnson also served in the D.C. Superior
Court with Judge Tim Murphy from 1970 through 1980. Judge
Murphy subsequently worked directly for Mr. Brewer on the
PROMIS contract. The committee, however, has not at this
date found any evidence that Judge Johnson had specific
discussions with Mr. Schiffer or anyone else at the
Department of Justice about Judge Bason, the INSLAW case or
the bankruptcy judicial selection process.
The committee's investigation revealed that the selection
process was largely informal, undocumented and highly
subjective. For example, several members of the Judicial
Council indicated that one of the primary factors
influencing the non-reappointment of Judge Bason, was the
poor administrative condition of his court. These same
members admitted that they had no firsthand knowledge of the
administrative condition and based this opinion on the
reports of the Merit Selection Panel and Judge Johnson. This
was corroborated by the discovery of a confidential
memorandum written by a member of the Merit Selection Panel
which was highly critical of
Judge Bason and the administrative condition of the
Bankruptcy Court. While this memorandum had been seen by
several judges during the selection process, committee
investigators were unable to determine who authored it. The
committee's investigation did not reveal any evidence to
support the criticisms raised in the memorandum. Martin
Bloom, Clerk of the Bankruptcy Court, indicated in his sworn
statement to committee investigators that under Judge Bason,
the administrative condition of the court vastly improved.
These sentiments were echoed by Chief Judge Aubrey Robinson
who consistently complimented Judge Bason on his efforts to
improve the administrative condition of the Bankruptcy Court
in his remarks to the Annual Judicial Conference.
F. CONCLUSION
The history of the Department's behavior in the INSLAW
case dramatically illustrates its (1) reflexive hostility
and "circle the wagons" approach toward outside
investigations; (2) inability or unwillingness to look
objectively at charges of wrongdoing by high level Justice
officials, particularly when the agency itself is a
defendant in litigation; and, (3) belligerence toward
Justice employees with views that run counter to those of
the agency's upper management. The fact that the Department
failed to recognize a need for an independent investigation
of the INSLAW matter for more than 7 years is remarkable.
Failure to do so has effectively shielded officials who may
have committed wrongdoing from investigation and
prosecution.
As already documented and confirmed by two Federal
judges, the Department's actions in the INSLAW case have
greatly harmed the company and its owners. These actions, as
they pertain to the dispute with INSLAW over the
misappropriation of the PROMIS software, were taken with the
full knowledge and support of high level Justice officials.
The harm to the company was further perpetuated by
succeeding high level officials, such as former Attorney
General Richard Thornburgh, who not only failed to
objectively investigate the serious charges raised by the
Hamiltons and their attorney, former Attorney General Elliot
Richardson, but also delayed and rebuffed effective and
expeditious outside investigation of the matter by Congress.
The Department of Justice is this nation's most visible
guarantor of the notion that wrongdoing will be sought out
and punished irrespective of the identity of the actors
involved. Moreover, its mandate is to protect all private
citizens from illegal activities that undermine the public
trust. The Department's handling of the INSLAW case has
seriously undermined its credibility and reputation in
playing such a role. Congress and the executive must take
immediate and forceful steps to restore public confidence
and faith in our system of justice, which cannot be
undermined by the very agent entrusted with enforcement of
our laws and protections afforded every citizen. In view of
the history surrounding the INSLAW affair and the serious
implications of evidence presented by the Hamiltons, two
court proceedings in the judicial branch and the committee's
own investigation, there is a clear need for further
investigation. The committee believes that the only way in
which INSLAW's allegations can be adequately and fully
investigated is
by the appointment of an independent counsel. The
committee is aware that on November 13, 1991, Attorney
General Barr appointed Nicholas Bua, a retired Federal judge
from Chicago, as his special counsel to investigate and
advise him on the INSLAW controversy. The committee eagerly
awaits Judge Bua's findings; however, as long as the
investigation of wrongdoing by former and current high level
Justice officials remains under the ultimate control of the
Department itself, there will always be serious doubt about
the objectivity and thoroughness of the inquiry.
Reference in New Issue View Git Blame Copy Permalink