by Paul DeRienzo
November, 1991
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Danny Casolaro with his brother Tony.
Joseph (Danny) Casolaro was a poet, author and investigative journalist who was found dead last August, apparently from his own hand, in a West Virginia motel. Although a short suicide note was found near the body, his friends and family cast doubt on the coroner's version, that Casolaro had slit his own wrists at least ten times while sitting in a bathtub.
Casolaro was planning to write a book that would expose the story behind the 1982 theft by the Department of Justice of case management, tracking and workflow management software called PROMIS (Prosecution Management Information Systems), for use by public prosecution agencies. The software, which is still in use today, allows prosecutors to quickly and accurately track cases winding through the courts.
The investigation had taken the 44-year old divorced father of one into a misty world of organized crime, corporate greed and possibly CIA covert operations that may have led Casolaro over his head into a conspiracy by men with connections to the highest level of the United States government, a conspiracy that Casolaro called the Octopus, because its tentacles led from the covert action branch of the CIA into the heart of the most infamous scandals of our age.
Casolaro had maintained until his death that the PROMIS software was stolen and modified by the government for sale to the intelligence agencies of various countries throughout the world. He based his theory mostly on the testimony of a scientist, Michael Riconosciuto, who told a federal court that the software had been taken to the Cabazon Indian reservation in southern California.
Riconosciuto told the court that he was hired to modify the PROMIS software for sale to intelligence agencies in a number of countries, including Iraq, Egypt, Canada, Israel and Jordan, by Dr. Earl W. Brian, the head of Infotechnology Inc, a New York based holding company financed through the junk bond market by big institutional investors like Merrill Lynch Inc. Among the myriad of companies controlled by Infotechnology Inc. is United Press International (UPI), and until recently, the Financial News Network (FNN).
Dr. Brian has denied the charges, which he calls a "tissue of lies", but according to Maggie Mahar, the senior editor of the prestigious business journal, Brian's advice to the wife of then Reagan advisor Edwin Meese to buy stock in Infotechnology Inc, was the focus of investigations that nearly derailed Meese's nomination as Attorney General. It was during the Meese tenure as Attorney General that the theft of the PROMIS software occurred.
Riconosciuto predicted that his testimony would anger powerful figures in the government and in fact soon after he gave his deposition in the Inslaw case, he was arrested and charged with running a methamphetamine laboratory in Tacoma, Washington where he is currently imprisoned.
THE INSLAW AFFAIR
PROMIS software had been developed by a Washington DC based company called Inslaw, founded by Bill and Nancy Hamilton. Hamilton had begun work on case management software for the government in the 1970's with financing from the now defunct Law Enforcement Assistance Agency or LEAA. The Justice department, under President Ronald Reagan's Attorney General and long time associate Edwin Meese, bought the software from Hamilton for $10 million.
According to Hamilton, as soon as the Justice Department took delivery of the 1980's version of PROMIS, they reneged on the contract and withheld payments, forcing Inslaw into Chapter Eleven bankruptcy. The Justice Department then launched what Bill Hamilton called "a covert effort" to completely liquidate Inslaw, and Inslaw retaliated by suing the Department of Justice in Federal Bankruptcy Court. After a three week trial, Judge George Bason ruled that officials of the Justice Department "stole" forty-four copies of PROMIS, "through trickery, fraud and deceit," and then tried to drive Inslaw out of business.
A federal appeals court later upheld the facts in the case, but overturned the decision on the technical matter that the lawsuit was brought in the wrong jurisdiction. That decision is being appealed to the Supreme Court. However, Bill Hamilton says ten years later, that he hasn't "received a penny" for PROMIS, while forty-four federal prosecutors offices across the country are still using the software.
A month after Bason's ruling in favor of Inslaw, the judge learned the shocking and bizarre news that his reappointment to the court was being denied, and that he would be replaced by S. Martin Teel, one of the Justice Department attorneys who unsuccessfully argued the Inslaw case before Bason.
Bill Hamilton traces his problems with the Department of Justice to a phone call he received in 1983 from Dominic Laiti, the then chairman of Hadron Inc. According to Hamilton, after identifying himself, Laiti said that Hadron was seeking a monopoly in providing law enforcement software, and he wanted to "buy" Inslaw. Hamilton says Laiti ended the call by telling him that Hadron "has very good political contacts in the current administration." When Hamilton declined to sell Inslaw he says Laiti retorted, "We have ways of making you sell."
While Laiti has denied the phone call ever took place, Hadron definitely enjoyed some "very good political contacts." Hadron is controlled by Dr. Earl Brian's Infotechnology Inc.
MURDER ON THE RES
In the desert west of Los Angeles near the city of Indio, lies the Cabazon Indian reservation. A tiny tribe, with only 30 members, with a huge clout. Until the 1980's the tribe had no running water and no electricity and every tribal business was a failure.
The Cabazon's fortunes began to change after the arrival in 1978 of John P. Nichols, a non-Indian, as the tribe's chief administrator. Nichols, a self described intelligence operative who once served 18 months in prison for trying to arrange a contract killing, brought a major gambling operation to Cabazon land. The reservation, claiming sovereignty as an independent nation within the United States, soon sported a Las Vegas style casino, and high stakes bingo hall, both financed by grants from the U.S. Department of Housing and Urban Development.
According to the book "Inside Job" by Stephen Pizzo, which documents the savings and loan scandal, John P. Nichols was a business partner with a major S&L player who got questionable loans from both the Bank of Credit and Commerce International (BCCI), and the Colorado based Silverado Bank, which had on it's board of directors Neil Bush, the son of President George Bush.
A recent series of articles about the Cabazon Reservation by Robert Littman in the San Francisco Chronicle, reported that private investors were hoping to take advantage of the Cabazon's sovereign nation status. The investors, which included a Canadian group, built or planned to build a $150 million power plant, a 1300 unit luxury housing project called Indian Village (with HUD funding), and a medical waste disposal incinerator, all without environmental impact statements that would normally be necessary in California.
The Chronicle article also describes an attempt by Nichols to start a joint venture between the Cabazon's and the Wackenhut Corporation. Wackenhut, which counts many ex-intelligence agents among its directors, is the nations third largest supplier of privately run prisons. The company's business expanded greatly during the Iraq war as executives and government agencies tightened their security. In recent years Wackenhut has been replacing the U.S. Marine Corp. as the security force for overseas embassies, and they also provide security at nuclear weapons facilities such as Rocky Flats, Colorado and the Nevada nuclear test site.
A senior executive at Wackenhut told Computerworld magazine last April that while the company had entered into a joint venture with the Cabazon's it did not staff the operation and the venture folded when it did not win any contracts. However, Chronicle reporter Robert Littman told Pacifica radio in September that until recently uniformed Wackenhut security guards could be seen patrolling on Cabazon land.
A chronicler of the Inslaw affair, Harry V. Martin, editor of the Napa Valley Sentinel, described Wackenhut during a WBAI special on the Inslaw affair.
If you saw the movie RoboCop, the corporation that was running that police department -- this is exactly what Wackenhut is becoming. In other words, it's taking over the functions of law enforcement on contract base. And they were formed by former FBI people. And some of the top CIA people went into that organization when they retired from their system.
According to the Chronicle, the Cabazon reservation was used to demonstrate night vision goggles for the Nicaraguan Contras. The Cabazons also met with U.S. army officials about developing arms, they proposed security measures for a Saudi Arabian palace, and solicited proposals for developing biological weapons. The most alarming occurrence on the Cabazon Reservation was the unsolved 1982 execution style murder of Fred Alvarez, a Cabazon Indian leader, and two of his companions.
While John P. Nichols denies any involvement with the still unsolved killings, a California investigative reporter, Virginia McCullough, says the case has been recently reopened. McCullough, in an exclusive interview with the Shadow, said California police have named John P. Nichols Jr. as the prime suspect in the murder.
McCullough told the Shadow that Alvarez had begun to speak out against the misuse of the Cabazon people by Nichols and Wackenhut. Alvarez had also told associates that he was getting death threats and would probably die because of his outspoken opposition to the Nichols family.
Michael Riconosciuto says Alvarez was tied closely to the covert action side of events that were occurring on the Cabazon reservation. Riconosciuto claims that he was on the Cabazon reservation, rewriting the PROMIS software for Earl Brian at the time of the Alvarez murder. Speaking to Pacifica radio in late August, Riconosciuto gave the following statement in which he maintains that Alvarez was involved in the October Surprise, an alleged plot by the Reagan presidential campaign to steal the 1980 Presidential election that Riconosciuto maintains was hatched on the Cabazon reservation.
Riconosciuto said that "Alvarez was present at all the meetings, and he was gung-ho behind Nichols (Dr. John P. Nichols), and everything that was going on there. OK? We were all red-blooded Americans, and we believed in the things that were going on! The way things were shaping up with the Reagan Election Committee and the things that were being orchestrated made us all concerned. And Alvarez wrote a detailed letter to Ronald Reagan expressing his concern. All the details of the October Surprise hostage issue were outlined in that letter. I mean, in specifics. The October Surprise is the name given the alleged plot by the Reagan election team to arrange for the government of Iran to keep the 52 American hostages until after the 1980 presidential election to help insure the election defeat of Jimmy Carter.
Riconosciuto, who has a history as a brilliant yet somewhat erratic genius, went on to state that the Inslaw software theft was a payoff to John P. Nichols and Wackenhut Corp. for assisting with the October Surprise.
The ability to run with PROMIS from the inside, on a procurement track, was part of a benefit reward package to the Cabazon position for what they did in helping the Election Committee. Part of that was the artillery shells. Part of that was security contracts for Wackenhut.
Wackenhut has security jobs that were traditionally done by the United States Marine Corps. Now, it's done on open bid to private companies, and Wackenhut consistently has gotten most of those jobs. And all our atomic weapons research and test sites are all guarded by Wackenhut personnel. In the Reagan Administration, the shift went abruptly from Marine Corps and military personnel to Wackenhut personnel. It was an unprecedented move. And it's my position that this was part of the reward benefit package for cooperation and services rendered during the election situation.
More Mysterious Murders
The investigation of the Alvarez murder was taken up by the respected Canadian based Financial Times, whose reporter, Anson Ng, went to Guatemala to find Jimmy Hughes, a Wackenhut security guard who was named as a witness in the killing. Ng was found in Guatemala dead with a bullet in his chest.
Soon after Riconosciuto's drug arrest, Dennis Eisman, a Philadelphia attorney who was on his way to Washington State to take on Riconosciuto's defense, was found shot to death in his car. Eisman was reportedly en route to meet with a woman in a Philadelphia parking lot. The woman reportedly had evidence of threats against Riconosciuto by associates of Dr. Earl Brian. According to Harry Martin, two weeks before Casolaro's death, a player in the affair, John Friedrich was found dead with a single bullet wound to the head in Australia. Martin writes that Friedrich was a close ally of Lt. Col. Oliver North and Israeli counter-terrorist chief Amiran Nir and had "a lot of knowledge about the Iran-Contra and Inslaw cases." Nir died last year in a mysterious plane crash in Mexico.
The Octopus
The Octopus was the name Danny Casolaro gave his theory explaining the Inslaw affair and its connection to the covert action arm of the CIA. Casolaro, who was planning to write a book on the Octopus called Indio (the town near the Cabazon reservation), had focused on reports that former national security advisor Robert McFarlane had actually given the PROMIS software to the Israeli government.
The reports were based on the allegations of former Israeli intelligence agent Ari Ben-Menashe, who said the software was given to the Israel Defense Force Signals Intelligence Unit in 1982. According to papers filed in the Inslaw case, the software was to be used to penetrate the computers of unsuspecting foreign companies that had also been provided with the same software. (Ben-Menashe was the primary source for a new book on the Israeli nuclear arms program called Samson Option, by former New York Times correspondant Seymour Hersh. The book, which claims that Israel has more than 300 nuclear warheads aimed at Arab and Soviet cities, quotes Ben-Menashe as saying that Israeli spies working in the United States stole secrets which were then passed on to the Soviet Union by the Israeli government).
McFarlane, who was deputy director of the National Security Council at the time, has denied the charges. The former national security advisor to Ronald Reagan, who also worked with Oliver North, plead guilty last year to lying to Congress in connection with the Iran-Contra scandal.
Ben-Menashe served 12 years in the Israel Defense Force, including two years as an intelligence consultant to Prime Minister Yitzhak Shamir, before leaving in 1989. In an affidavit filed in the Inslaw case in March, Ben-Menashe said he attended a 1987 meeting in Tel Aviv where Dr. Earl W. Brian made a sales pitch for increased use of the PROMIS software by the Israeli defense establishment.
Also in a sworn statement, self-proclaimed Iranian arms dealer Richard Babayan told of the alleged involvement of Brian in the illegal sale of PROMIS to Iraq and South Korea. Babayan, who was recently being held in a federal jail in Miami on fraud charges, also said former Air Force Maj. Gen. Richard Secord was present at a 1987 meeting with Iraqi officials in Baghdad, during which Earl Brian made a PROMIS sales pitch.
The CIA Drug Connection
In his book, "The Politics of Heroin: CIA Complicity in the Global Drug Trade," Alfred W. McCoy tells how the CIA covert war in Laos, which began after the French defeat by the Vietnamese at Dien Bien Phu in 1954, paved the way for massive heroin shipments to the United States. The CIA offered protection for Hmong tribes in the mountains along the Chinese border to enlist them as soldiers in the early years of the Vietnam war.
In return Laotian generals supplied heroin to the crime syndicates in Saigon. McCoy estimates that more than one third of all United States troops in Vietnam became addicted to heroin supplied by gangsters associated with the same South Vietnamese government U.S. troops were supposed to be protecting.
The CIA station chief in Laos at the height of the heroin operation, from 1966-1968, was Theodore Shackley, who exercised overall command of the CIA's secret war in Laos. A friend of Shackley and the deputy CIA station chief operative was Thomas Clines, who handled the details of the Laos operation. Air Force Maj. Gen. Richard Secord was the air force liaison who supplied most of the aircraft essential for combat in northern Laos. Heroin was often shipped aboard aircraft operated by a CIA front company called Air America until revelations of the Laos operation forced a name change. The descendant of Air America became the air wing of the Central American Contra war supply operation, a company known as Southern Air Transport.
By 1977, the CIA had undergone a major reorganization by then President Jimmy Carter, responding to the disclosure of criminal activities by the CIA, including domestic spying and the activities of rogue CIA operative Edmund Wilson. After being convicted of running a private arms supply operation to Libya, Wilson was handed down a life sentence.
Wilson was a good friend and associate of both Theodore Shackley and Thomas Clines from the days of the CIA's covert war in Laos. Because of the connection to Wilson and over the objection of senior CIA bureaucrats, Shackley and Clines were both demoted and forced to resign from the agency by then CIA director Stansfield Turner. After retiring, Clines and Shackley went into business arranging arms sales for various countries. In the 1980's, when then Marine Lt. Col. Oliver North, who was operating under the command of National Security Council chief Robert McFarlane, formed a secret network to arm the Contras fighting the Sandinista government in Nicaragua, he recruited recently retired General Richard Secord to operate the arms pipeline. Secord went on to tell a Congressional committee investigating the Iran-Contra affair that he recruited his former "close associate from CIA days", Thomas Clines, to assist in carrying out the Contra war.
Massachusetts Senator John Kerry's subcommittee looking into allegations of cocaine trafficking by the pilots who were flying the arms shipments to the Contras from the United states, heard testimony from five witnesses who claimed direct personal knowledge of the involvement of CIA operatives in the cocaine trade. At the heart of the allegations is an American, John Hull, who operated a ranch in Costa Rica, used to stage Contra attacks against Nicaragua.
Hull was named two years ago in a Costa Rican government investigation as a drug trafficker and was later banned from living in Costa Rica. Hull was also implicated by the Costa Ricans in an assassination attempt against a recalcitrant Contra commander named Eden Pastora. The bombing killed several journalists who were interviewing Pastora at the time of the blast.
The Banks
In December of 1989, U.S. troops invaded Panama and seized Panamanian dictator Manuel Noriega, destroying a poor neighborhood and killing more than 3,000 civilians in the process. The purpose of the attack was to unseat Noriega, who had been indicted in Florida for allowing Panama to be used as a way-station for cocaine traffickers. While several mid-level drug dealers with knowledge of the international trade recently interviewed by the Shadow scoff at Noriega's role in the drug trade as "inconsequential," the role of Panamanian banks was, and is still important. Panama has some of the world's least strict banking laws, which allow for the laundering of vast sums of drug money from the U.S. to the Colombian cocaine cartels. In his book "Crimes of Patriots," Jonathan Kwitney exposes the role of the Australian Nugan-Hand Bank in financing covert activities and heroin trafficking in Southeast Asia. The bank's mysterious growth and demise traces the reach of the tentacles of the Octopus.
The bank was founded by Frank Nugan, an insecure and incompetent Australian lawyer, and by Michael John Hand, a man with a high school degree who had gone to Vietnam with the Green Berets. He had served in Laos in the 1960's as a contract CIA operative, fighting with Thomas Clines, Theodore Shackley and Richard Secord, all very big names in the Iran-Contra scandal.
Michael John Hand worked with William Colby, who had been CIA director during the time Shackley was in charge of the CIA office in Laos. Colby went on to become legal counsel for the Nugan-Hand bank where he worked with Michael Hand who was also a veteran of the CIA-run Laos war.
After allegations of drug smuggling against the bank surfaced in 1977, the Australian government began a fraud investigation into the bank's operation, and in 1980 Frank Nugan committed suicide. The investigations uncovered a network of money laundering, drug and arms dealing and still mysterious ties to the CIA.
In 1988, agents of the United States Customs Office in Tampa entrapped officials of BCCI in a drug money laundering scheme. In the ensuing years, the scandal widened until 1991, when the British government seized the bank on fraud charges.
Bank of Credit and Commerce International
BCCI was established in 1972 by Agha Hasan Abedi, who was president of Pakistan's largest private bank. Abedi had close connections to the rulers of the oil rich Persian gulf kingdom of Abu Dhabi, and spread his banking empire throughout the Arab world. BCCI eventually grew to have branches in 73 countries and with $20 billion in assets, BCCI became the 7th largest private bank in the world.
In July the Senate banking committee held hearing into BCCI and called several investigators, former customs chief William Von Rabb and Democratic party power broker Clark Clifford. It was revealed at the hearings that Clifford had lent his name in return for cash payments as a director of First American, a bank secretly purchased by BCCI in violation of United States banking laws.
While the Senate brought up questions of impropriety by BCCI, the Senators avoided some of the most sensitive questions raised about CIA involvement in the bank. Author Alfred McCoy discussed one of those unanswered questions with the Shadow, the expansion of the heroin trade from Southeast Asia to the border region between Pakistan and Afghanistan.
Beginning shortly before the Soviet invasion of Afghanistan in 1979, the CIA armed the small Afghan guerilla group under the control of Gulbuddin Hekmatyar, a favorite of the Pakistani Intelligence Service, and a Moslem fundamentalist noted for throwing acid in the face of Moslem university women who refused to wear veils. Built up into a formidable military force by the CIA, the Hekmatyar army seized prime Afghan land and used it to grow poppy plants, the raw material for heroin production.
The size of the heroin shipments from Afghanistan grew with the involvement of the Pakistan military. By the time of the 1988 plane crash that killed Pakistani dictator Zia ul-Haq, heroin trafficking was widespread among the ranks of officers in the Pakistan military. Heroin trafficking from Pakistan soon outstripped shipments from Southeast Asia and by 1991 more than 60% of the heroin sold on the streets of New York City originated in Afghanistan.
Alfred McCoy speculates that if a congressional investigation would ask tough questions about BCCI, it would uncover drug trafficking and money laundering by United States allies protected from prosecution by the CIA. McCoy told the Shadow, "I think what we'll possibly discover is that the CIA was shipping its funds into Pakistan through BCCI, protecting BCCI thereby from serious investigations elsewhere in the world. That the Pakistan military were in fact banking their drug profits, moving their drug profits from the consuming country back to Pakistan though BCCI.
In fact the boom in the Pakistan drug trade was financed by BCCI. The interrelationship between the Afghan resistance and the CIA and the Pakistan drug trade can all be seen through the medium of BCCI, the banker to both operations, the resistance and the drug trade."
The BCCI story brings full circle the theory of the Octopus, the existence of a small group of intelligence operatives involved in the major scandals of our time, a theory developed by Danny Casolaro to explain the theft of PROMIS software by the United States Justice Department.
Inslaw and BCCI
The next aspect of the investigation into the Inslaw affair is the connection to BCCI. Allegations have been repeated that monies raised through the illegal sales of PROMIS software were laundered through BCCI. It begs the question, "how could BCCI be operating without the bank regulators doing anything about it when obviously there were flags going up and there was evidence going back seven, eight years that BCCI was involved in drug-running and in laundering of drug money, and in various nefarious schemes?"
The reason that the regulators and the Congressional hearings don't seem to want to touch upon it is that, very possibly and probably, BCCI had direct ties to the Justice Department and to the regulators who were supposed to be watching the store. In fact, the reason that BCCI was not investigated and not prosecuted a lot earlier for its activities was because it was providing necessary services -- a full service bank.