The Inslaw Affair: Investigative Report by the Committee on
Posted: Thu Apr 28, 2016 10:11 pm
The Inslaw Affair: Investigative Report by the Committee on the Judiciary Together With Dissenting and Separate Views
September 10, 1992
NOTICE: THIS WORK MAY BE PROTECTED BY COPYRIGHT
Union Calendar No. 491
102d Congress, 2d session
House Report 102-857
THE INSLAW AFFAIR
INVESTIGATIVE REPORT BY THE COMMITTEE ON THE JUDICIARY together with DISSENTING AND SEPARATE VIEWS
[part of the Great Seal of the United States here]
SEPTEMBER 10, 1992. -- Committed to the Committee of the Whole House on the State of the Union and ordered to be printed
U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 1992
COMMITTEE ON THE JUDICIARY
JACK BROOKS, Texas, Chairman
DON EDWARDS, California HAMILTON FISH, Jr., New York
JOHN CONYERS, Jr., Michigan CARLOS J. MOORHEAD, California
ROMANO L. MAZZOLI, Kentucky HENRY J. HYDE, Illinois
WILLIAM J. HUGHES, New Jersey F. JAMES SENSENBRENNER, Jr.,
MIKE SYNAR, Oklahoma Wisconsin
PATRICIA SCHRODER, Colorado BILL McCOLLUM, Florida
BARNEY FRANK, Massachusetts GEORGE W. GEKAS, Pennsylvania
CHARLES E. SCHUMER, New York LAMAR S. SMITH, Texas
EDWARD F. FEIGHAN, Ohio CRAIG T. JAMES, Florida
HOWARD L. BERMAN, California TOM CAMPBELL, California
RICK BOUCHER, Virginia STEVEN SCHRIFF, New Mexico
HARLEY O. STAGGERS, JR., West Virginia JIM RAMSTAD, Minnesota
JOHN BRYANT, Texas GEORGE ALLEN, Virginia
MEL LEVINE, California
GEORGE E. SANGMEISTER, Illinois
CRAIG A. WASHINGTON, Texas
PETER HOAGLAND, Nebraska
MICHAEL J. KOPETSKI, Oregon
JACK F. REED, Rhode Island
JONATHAN R. YAROWSKY, General Counsel
ROBERT H. BRINK, Deputy General Counsel
JAMES E. LEWIN, Chief Investigator
JOHN D. COHEN, Investigator
ALLEN F. COFFEY, Jr., Minority Chief Counsel
Table of Contents:
• I. Summary
o A. INSLAW allegations
o B. Committee investigation
1. Did the Department convert, steal or misappropriate the PROMIS software?
2. Was there a high level conspiracy?
o C. Additional questions
o D. Evidence of possible coverup and obstruction
o E. Judge Bason's allegations against the Department
o F. Conclusion
• II. Committee Investigation, prior studies, hearings and subcommittee proceedings
• III. Conflicts between the Department and INSLAW result in the misappropriation of INSLAW's Enhanced PROMIS
o A. Project Manager Brewer: An inherent bias and potential conflict of interest
o B. Brewer and Videnieks threaten INSLAW
o C. INSLAW attempts to demonstrate enhancement ownership
o D. The Department misappropriated INSLAW's software
o E. INSLAW declares bankruptcy and pursues litigation
o F. District Court Judge William Bryant's decision on appeal of the Bankruptcy Court's ruling
Department's position against judge's decision is rebutted on appeal
o G. Appeals Court reverses INSLAW's victory on primarily jurisdictional grounds
o H. Department asserts erroneous position before DOTBCA
o I. Department encourages contract mediation while it hinders settlement
• IV. Significant questions remain unanswered about possible high level criminal conspiracy
o A. Allegations of conspiracy and intrigue continue to surround the INSLAW controversy
o B. Enhanced PROMIS may have been disseminated nationally and internationally
1. Allegations that the Justice Department and Earl Brian conspired to distribute PROMIS
2. Sworn statement of Michael Riconosciuto
3. Other sources allege widespread distribution of INSLAW's Enhanced PROMIS
4. Does the Government of Canada have the PROMIS software?
5. Did the CIA assist in the sale of PROMIS?
6. Allegations of PROMIS distribution to agencies within the Department
7. Ronald LeGrand denies INSLAW's assertions
8. the allegators
o C. Other important questions remain
1. The death of Daniel Casolaro
2. Possible connection between Earl Brian, Michael Riconosciuto, Robert Booth Nichols, and the Cabazon Indian Reservation
• V. Allegations of perjury, coverup, and retribution: A web of contradiction and deceit
o A. Judge Blackshear's recantation
o B. Judge Blackshear's statement to committee lacks credibility
o C. Committee analysis of attempt to assign Harry Jones to the INSLAW case
o D. Bason allegations against Blackshear not adequately considered
• VI. The Department has proven to be incapable of forthright investigation of the INSLAW matter
o A. Jensen failed to adequately investigate INSLAW's concerns
o B. OPR's INSLAW investigations are deficient
o C. GAO study of the Office of Professional Responsibility
o D. The Department did not seriously consider the need for an independent counsel
o E. Department's response to court findings of possible perjury
o F. INSLAW request for independent counsel
• VII. Top Department officials frustrated committee's investigation
o A. Department attempts to thwart committee inquiry
o B. Authorization and oversight hearings
o C. The Department reports key subpoenaed documents missing
o D. Department interferes with Michael Riconosciuto's sworn statement to the committee--refuses request to interview DEA agents
o E. Department official may have attempted to influence a key witness
• VIII. Judge Bason's allegations of Justice Department's improper influence on the judicial selection process
o A. Confidential memorandum
o B. Condition of the clerk's office under Judge Bason
o C. Department's attempts to have Bason removed from INSLAW case fail
• IX. Conclusion
• X. Findings
• XI. Recommendations
• Views: Dissenting views of Hon. Hamilton Fish, Jr., Hon. Carlos J. Moorhead, Hon. Henry J. Hyde, Hon. F. James Sensenbrenner, Jr., Hon. Bill McCollum, Hon. George W. Gekas, Hon. Tom Campbell, Hon. Steven Schiff, Hon. Jim Ramstad, and Hon George Allen
• Separate dissenting views of Hon. Tom Campbell
• Notes
• Index
September 10, 1992
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Union Calendar No. 491
102d Congress, 2d session
House Report 102-857
THE INSLAW AFFAIR
INVESTIGATIVE REPORT BY THE COMMITTEE ON THE JUDICIARY together with DISSENTING AND SEPARATE VIEWS
[part of the Great Seal of the United States here]
SEPTEMBER 10, 1992. -- Committed to the Committee of the Whole House on the State of the Union and ordered to be printed
U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 1992
COMMITTEE ON THE JUDICIARY
JACK BROOKS, Texas, Chairman
DON EDWARDS, California HAMILTON FISH, Jr., New York
JOHN CONYERS, Jr., Michigan CARLOS J. MOORHEAD, California
ROMANO L. MAZZOLI, Kentucky HENRY J. HYDE, Illinois
WILLIAM J. HUGHES, New Jersey F. JAMES SENSENBRENNER, Jr.,
MIKE SYNAR, Oklahoma Wisconsin
PATRICIA SCHRODER, Colorado BILL McCOLLUM, Florida
BARNEY FRANK, Massachusetts GEORGE W. GEKAS, Pennsylvania
CHARLES E. SCHUMER, New York LAMAR S. SMITH, Texas
EDWARD F. FEIGHAN, Ohio CRAIG T. JAMES, Florida
HOWARD L. BERMAN, California TOM CAMPBELL, California
RICK BOUCHER, Virginia STEVEN SCHRIFF, New Mexico
HARLEY O. STAGGERS, JR., West Virginia JIM RAMSTAD, Minnesota
JOHN BRYANT, Texas GEORGE ALLEN, Virginia
MEL LEVINE, California
GEORGE E. SANGMEISTER, Illinois
CRAIG A. WASHINGTON, Texas
PETER HOAGLAND, Nebraska
MICHAEL J. KOPETSKI, Oregon
JACK F. REED, Rhode Island
JONATHAN R. YAROWSKY, General Counsel
ROBERT H. BRINK, Deputy General Counsel
JAMES E. LEWIN, Chief Investigator
JOHN D. COHEN, Investigator
ALLEN F. COFFEY, Jr., Minority Chief Counsel
Table of Contents:
• I. Summary
o A. INSLAW allegations
o B. Committee investigation
1. Did the Department convert, steal or misappropriate the PROMIS software?
2. Was there a high level conspiracy?
o C. Additional questions
o D. Evidence of possible coverup and obstruction
o E. Judge Bason's allegations against the Department
o F. Conclusion
• II. Committee Investigation, prior studies, hearings and subcommittee proceedings
• III. Conflicts between the Department and INSLAW result in the misappropriation of INSLAW's Enhanced PROMIS
o A. Project Manager Brewer: An inherent bias and potential conflict of interest
o B. Brewer and Videnieks threaten INSLAW
o C. INSLAW attempts to demonstrate enhancement ownership
o D. The Department misappropriated INSLAW's software
o E. INSLAW declares bankruptcy and pursues litigation
o F. District Court Judge William Bryant's decision on appeal of the Bankruptcy Court's ruling
Department's position against judge's decision is rebutted on appeal
o G. Appeals Court reverses INSLAW's victory on primarily jurisdictional grounds
o H. Department asserts erroneous position before DOTBCA
o I. Department encourages contract mediation while it hinders settlement
• IV. Significant questions remain unanswered about possible high level criminal conspiracy
o A. Allegations of conspiracy and intrigue continue to surround the INSLAW controversy
o B. Enhanced PROMIS may have been disseminated nationally and internationally
1. Allegations that the Justice Department and Earl Brian conspired to distribute PROMIS
2. Sworn statement of Michael Riconosciuto
3. Other sources allege widespread distribution of INSLAW's Enhanced PROMIS
4. Does the Government of Canada have the PROMIS software?
5. Did the CIA assist in the sale of PROMIS?
6. Allegations of PROMIS distribution to agencies within the Department
7. Ronald LeGrand denies INSLAW's assertions
8. the allegators
o C. Other important questions remain
1. The death of Daniel Casolaro
2. Possible connection between Earl Brian, Michael Riconosciuto, Robert Booth Nichols, and the Cabazon Indian Reservation
• V. Allegations of perjury, coverup, and retribution: A web of contradiction and deceit
o A. Judge Blackshear's recantation
o B. Judge Blackshear's statement to committee lacks credibility
o C. Committee analysis of attempt to assign Harry Jones to the INSLAW case
o D. Bason allegations against Blackshear not adequately considered
• VI. The Department has proven to be incapable of forthright investigation of the INSLAW matter
o A. Jensen failed to adequately investigate INSLAW's concerns
o B. OPR's INSLAW investigations are deficient
o C. GAO study of the Office of Professional Responsibility
o D. The Department did not seriously consider the need for an independent counsel
o E. Department's response to court findings of possible perjury
o F. INSLAW request for independent counsel
• VII. Top Department officials frustrated committee's investigation
o A. Department attempts to thwart committee inquiry
o B. Authorization and oversight hearings
o C. The Department reports key subpoenaed documents missing
o D. Department interferes with Michael Riconosciuto's sworn statement to the committee--refuses request to interview DEA agents
o E. Department official may have attempted to influence a key witness
• VIII. Judge Bason's allegations of Justice Department's improper influence on the judicial selection process
o A. Confidential memorandum
o B. Condition of the clerk's office under Judge Bason
o C. Department's attempts to have Bason removed from INSLAW case fail
• IX. Conclusion
• X. Findings
• XI. Recommendations
• Views: Dissenting views of Hon. Hamilton Fish, Jr., Hon. Carlos J. Moorhead, Hon. Henry J. Hyde, Hon. F. James Sensenbrenner, Jr., Hon. Bill McCollum, Hon. George W. Gekas, Hon. Tom Campbell, Hon. Steven Schiff, Hon. Jim Ramstad, and Hon George Allen
• Separate dissenting views of Hon. Tom Campbell
• Notes
• Index
The Hamiltons have contended that high level officials in the Department of Justice conspired to steal the PROMIS software system. As an element of this alleged theft, these officials, which 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. After driving the company into bankruptcy, the Hamiltons have claimed that Justice officials attempted to force the conversion of INSLAWs bankruptcy status from chapter 11 to chapter 7. They have stated that this change in bankruptcy status would have resulted in the forced sale of INSLAWs assets, including PROMIS, to a rival computer company called Hadron, Inc., which at this time was attempting to conduct a hostile buyout of INSLAW. Hadron, Inc., was controlled by the Biotech Capital Corporation which was under the control of Dr. Earl Brian, who was president and chairman of the corporation. This is the same company in which Mrs. Ursula Meese had invested with money loaned to her by Mr. Edwin Thomas, a mutual friend and associate of Mr. and Mrs. Meese and Dr. Brian. [103] The Hamiltons have asserted that even though the attempt to change the status of INSLAWs bankruptcy case was unsuccessful, the Enhanced PROMIS software system was eventually provided to Dr. Brian. This was allegedly done by individuals from the Department with the knowledge and concurrence of then Attorney General Meese who had earlier 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, Inc., 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 1980s.
Mr. Meese and Dr. Brian served together in the cabinet of then California Governor Ronald Reagan from 1970 through 1974. Dr. Brian was the controlling shareholder in Biotech Capital Corporation which in turn had a substantial stake in a computer firm called Hadron, Inc. At that time, Dr. Brian was chairman and president of Biotech Capital Corporation and was on the board of directors of Hadron, Inc. The Hamiltons have asserted that after the election of 1980, Dr. Brian moved quickly to put Hadron, Inc., in a position to take advantage of ties to Mr. Meese and others in the newly elected administration. The Hamiltons have claimed that Hadron, Inc.s first post-election moves were to acquire companies supporting Federal law enforcement efforts to control the smuggling of drugs across the Mexican border. Hadron, Inc., entered into several Government contracts with U.S. Customs and various intelligence agencies. The Hamiltons have claimed that in April 1983, Dominic Laiti, president and chairman of Hadron, Inc., contacted them and attempted to purchase Enhanced PROMIS. When they declined to sell PROMIS, he told them that he had ways of making them sell. The Hamiltons have alleged that Mr. Laiti also told them that as a result of contacts at the highest level of the Reagan administration, including Edwin Meese, Hadron, Inc., was able to obtain the Federal Governments case management software business. The Hamiltons have asserted that after declining to sell the PROMIS system, INSLAW became the target of a hostile buyout attempt.
***
On March 25, 1987, Judge Blackshear stated, under oath, to INSLAW counsel that Mr. White told him that Mr. Stanton pressured Mr. White to move in court to convert the INSLAW bankruptcy from chapter 11 to chapter 7. Judge Blackshear also stated that Mr. Stanton planned to have Harry Jones loaned to Washington to manage the INSLAW case and to arrange for INSLAWs conversion. [230] As previously indicated, Judge Blackshear spoke with Judge Solomon on March 18, providing her an identical story on the key points of INSLAWs conversion and the Jones transfer to Washington.
Judge Blackshears Recantation: Judge Blackshear stated that he called Mr. White immediately after he gave his deposition to INSLAWs attorneys to discuss his statement. At that point, according to Judge Blackshear, Mr. White told Judge Blackshear that he was mistaken because they never discussed converting INSLAW. [231] The next morning, Judge Blackshear's attorney James Garrity, an assistant U.S. attorney received a call from Dean Cooper, a trial attorney in the Department's Civil Division. According to Mr. Garrity, Mr. Cooper told him that Judge Blackshear's statement was wrong, and the Department wanted something undertaken (such as a letter) to correct the error. Mr. Garrity spoke with Judge Blackshear by telephone, and Judge Blackshear took the advice of his attorney and decided to correct his alleged errors. [232] It is highly questionable how the Department could ethically represent both itself and Judge Blackshear in the INSLAW litigation. In effect, the Department was a defendant in the case while one of its attorneys (Mr. Garrity) at the same time was representing a key witness (Judge Blackshear) for the plaintiff (INSLAW).
***
Judge Bason concluded his comments by stating that: The acts of DOJ as described in the foregoing findings of fact were done in bad faith, vexatiously, in wanton disregard of the law and the facts, and for oppressive reasons to drive INSLAW out of business and to convert, by trickery, fraud and deceit, INSLAW's PROMIS software.
Apparently in response to Judge Bason's charges as well as INSLAWs request for the appointment of an independent counsel, Arnold Burns, the Deputy Attorney General, asked the Civil Division for advice on the question of the appointment of an outside party to review the INSLAW matter. The Deputy Assistant Attorney General of the Civil Division, Stuart Schiffer, wrote to Richard Willard, Assistant Attorney General, Civil Division, that the idea "would not achieve productive results." Both Mr. Schiffer and Mr. Willard agreed that taking this "extraordinary step" would only serve to highlight the matter and give those criticizing the Department an opportunity to argue that resorting to this remedy proved by inference that events warranted an investigation.
-- THE INSLAW AFFAIR: INVESTIGATIVE REPORT BY THE COMMITTEE ON THE JUDICIARY TOGETHER WITH DISSENTING AND SEPARATE VIEWS