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Conspiracy Nation -- Vol. 8 Num. 91

("Quid coniuratio est?")

"Inslaw, the Continuing Caper"
No. 37, Summer 1996


Inslaw trial delayed while court panel inspects intelligence agency software

If you haven't heard too much recently about the Inslaw case, probably the most significant national security and intelligence scandal of the past several decades, that's not surprising. No articles have appeared for a long time in either mainstream or alternative American media about Inslaw's contention that the Department of Justice, FBI, CIA, NSA and other major U.S. intelligence agencies stole Inslaw Inc.'s PROMIS database management software. Originally developed in the early 1980's to provide federal prosecutors with computerization to handle paper-intensive case-management tracking, Inslaw says the government took PROMIS and has used it, illegally and without license, continually since 1985 on numerous sites in federal agencies throughout the government -- including in the offices of the Attorney General of the United States, the Honorable Ms. Janet Reno.

Further, sources speculate that stolen PROMIS is the official, secret database management system which coordinates the entire U.S. intelligence infrastructure, a "plate of spaghetti which connects anything to anything" as one person familiar with the software describes it, and perhaps the single most important computer program in day-to-day use by the national security establishment.

Driven into bankruptcy after the Department of Justice refused to pay its contract with Inslaw in 1985 (with indications that DOJ insiders, including Earl Brian, an Ed Meese crony, intended to buy Inslaw at a bargain-basement price after forcing its demise), the company won a tough legal battle in a 1987 bankruptcy court decision; in it federal bankruptcy Judge George Bason agreed with Inslaw owners Bill and Nancy Hamilton that the DOJ had appropriated PROMIS by "fraud, trickery and deceit." Despite Judge Bason's award of seven million dollars, the Hamilton's saw their victory quickly evaporate when a three-judge appellate panel of Reagan appointees overturned Bason's ruling on a technicality. Judge Bason's decision also apparently cost him his job: passed over for routine re-appointment in his highly technical bankruptcy specialty, Bason was replaced by a lawyer who had argued against Inslaw in the trial. The suspicion of many is that Bason only made one mistake: ruling against the Department of Justice.

Now, after years of legal battles, congressional hearings and highly-criticized self-exonerating DOJ reports, Inslaw is back in court, having won a Congressional Reference resolution in a vote of congress last year, to sue the United States, in the case of "Inslaw Inc. and William and Nancy Hamilton vs. the United States and the United States Department of Justice," scheduled to begin September 4th for a three-week trial in Washington's U.S. Federal Court of Claims.

Representing Inslaw owners Bill and Nancy Hamilton in their long-awaited federal suit, the Atlanta law firm of Pope, McGlammery, Kilpatrick, and Morrison has advised them not to give interviews about the litigation, a request they've honored. Despite this, UNCLASSIFIED is pleased to offer this exclusive update, a roundup of information from knowledgable sources which may be the only print record in the U.S. on the current status of Inslaw vs. the Department of Justice.


Some observers see the alleged PROMIS theft as having implications far beyond the bare claims being made in court. Over the years sources have alleged that a technically brilliant covert operation transformed the stolen PROMIS program -- originally a 500,000 line program written for mainframe computers in the COBOL language -- into a high-tech spying tool of unprecedented power. In the early 1980's the story goes, brilliant CIA programmer Michael Riconoscuito and a development team at the Wackenhut/Cabazon Joint Venture in Indio, California added a secret 'trapdoor' access, modifying PROMIS and creating a bugged version which was allegedly sold to foreign government, intelligence, and police agencies, friend and foe, around the world.

(For the first time in this country, UNCLASSIFIED presents an exclusive report on the first public discussion of technical details on the PROMIS trapdoor modification. See below).

The availability of a PROMIS-like espionage tool would be a temptation for any spy agency, launching American spycraft into the 21st century and consigning to the past forever the old coldwar cliche of a spy in a gray hat, breaking into an office and photographing pieces of paper with a Minox miniature camera. The new paradigm: computerized power and efficiency with the silent and undetectable downloading of electronic data from any site where the software is installed, anywhere in the world.


As an example of a surprising PROMIS application, allegedly the program allows the NSA to monitor worldwide financial transactions in 'real time' -- i.e., to watch money-laundering on the screen while it actually happens, and so to determine all its sources, nuances, destinations, and ultimately, its purposes. Even more astonishing, the software may itself be used for money-laundering, an application with enormous potential for any covert operations agency. Understandably, hard evidence of these exotic uses of PROMIS has yet to be established, but 'sources' and some reports over the years -- such as Anthony Kimery's 1994 articles for the Thomson Banking Regulator, which cost him his job -- have provided consistent indications that the wildest dreams you might have about the PROMIS software, could all turn out to be true.

Kimery's articles reported evidence of (unlicensed) PROMIS installation in international banking and financial institutions, including banks in Switzerland, the World Bank, and the International Monetary Fund. If that's the case, it would be naive to assume that PROMIS is not used in many American banking institutions as well, and indeed Inslaw received information that Systematics Inc., based in Little Rock Arkansas and the largest banking software purveyor in the U.S., has sold banking software based on PROMIS.


The political implications of a Systematics/Promis connection are somewhat staggering, since the company's then-owner, Jackson Stephens, was the first major financial backer of Bill Clinton's campaign for the presidency. The Rose Law Firm represented Systematics, and during that era its partner Hillary Clinton became something of an expert in the esoteric legal field of intellectual property rights and patent protection, while personally representing the Systematics firm. Though no court cases arose against Systematics on those grounds, Mrs. Clinton, we can assume, was fully prepared if they did.

Even if coincidental, this makes for a very odd coincidence indeed, since the Inslaw theft and modification have long been associated with the Reagan/Bush/Meese/Casey regimes at CIA, DOJ and related federal bureaucracies. But early in their tenures, Janet Reno and former high ranking Clinton DOJ appointee Webster Hubbell (since convicted and now serving a prison term in a case involving false billing at the Rose Law firm) astonished Inslaw followers by signing off on, and ratifying, the Bush-sponsored, controversial and problematic 'Report of Judge Bua on Inslaw' -- a whitewash, exponents of the case argue, which falsely exonerates the DOJ of any impropriety in the Inslaw "contract dispute."

Inslaw's response, the excoriating "Rebuttal to the Report of Judge Bua" and its "Addendum" are required reading for anyone interested in the Inslaw matter: far from being dry legal arguments, these extensive documents shred the Bua report point by point and provide dramatic evidence of DOJ lying, conspiracy and coverup in the Inslaw case. They also detail some of the more exotic aspects of the case, including background information, two reports of death threats against the Hamilton's, reports of unsuspected applications of PROMIS (which is installed, apparently, on all U.S. and British nuclear submarines) and other information which has come to Inslaw over the years, from sources they deem reliable and whose information, over a long time span, has been proven valid.


While the basic Inslaw allegations may sound like quite a story, the response of the mainstream media over the years has been to completely ignore Inslaw, relegating it to the damning category of "it's not news" (as Don Hewitt, producer of 60 Minutes, told this writer), or lately, the post-Clinton election spin, that "it's an 80's story," a catchall aimed at dismissing any government malfeasance earlier than the Whitewater investigation as irrelevant to the concerns of our progressive and forward-looking democracy.

Even among those few journalists who are aware of Inslaw, it's often heard that the topic is just too complex, and by implication, tedious (whether for the writer or the readership isn't explained), a matter far too esoteric and abstract to merit the attention of a wide public -- which might otherwise be reasonably interested to learn whether or not its top law enforcement agency, the Department of Justice, as well as its major intelligence agencies, have been guilty of massive felony theft, fraud and coverup for well over a decade.


Well, how boring is the Inslaw case? Very, if you read The New York Times, which in a few tiny, buried articles, invariably refers to Inslaw as a "government contract dispute," playing it down to stultifying blandness, while consistently leaving Inslaw's more exotic details unmentioned. The most important of these is the still-mysterious death of investigative writer/investigator Danny Casolaro, who announced to friends in August 1991 just days before he was found dead in a West Virginia hotel room, that after a year of intensive investigation he had "cracked" the Inslaw matter, and was about to meet a key "source" to obtain a final piece of evidence. That meeting either never occurred, or it resulted in Casolaro's murder. Although the death was officially ruled a suicide -- and so legally, a 'case closed' -- local police records of the investigation of Casolaro's death remain unreleased by local police or the DOJ five years later.

The single Department of Justice report which discusses Casolaro (a followup to the Bua report) lays out the scenario that the ebullient writer and indefatigable investigator was in fact a heavy drinker, depressed, in financial straits, possibly afflicted with a terminal disease, and so, suicidal. People who knew Casolaro give a different picture, describing him as a "great guy" whom "everybody liked", with a close family, lots of friends, and who, in solving Inslaw and uncovering the 'octopus' as he called the conspiracy, likely had reached a breakthrough in his career.

To date, there has never been an official, objective investigation into the many remaining questions and contradictions surrounding Casolaro's death, despite indications, for example, that his autopsy examination or results may have been altered or falsified. Nevertheless the Department of Justice has taken considerable pains to reinforce the notion that Casolaro -- at what should have been one of the most exhilarating moments in his life -- slashed both his wrists an impossible dozen times, and somehow disposed of the sheaves of documents and evidence that he was known to carry with him everywhere he went.


The Inslaw trial had been scheduled to begin on May 28th, but was postponed until the September 4th date to give a panel of three software experts time to inspect software now in use in five federal agencies, to determine whether or not it has the "DNA" of PROMIS. That work, which hasn't begun yet, has been authorized by the court, but is expected to take several months.

Selection of the panel was divided among the three parties: Inslaw chose Tom Bragg, adjunct professor at George Washington University and a professional expert on computer software who owns his own software business. The Justice Department chose the same expert used earlier by Webster Hubbell, Dr. Randall Davis of MIT's Artificial Intelligence laboratory. To represent the interests of the court, those two experts chose a third -- a Dr Plauger, a developer of the C programming language, and one of the early developers of Unix.

The results of the panel's work, it's felt, will depend largely on whether or not they can inspect the right piece of software. Since the DOJ is fighting the case aggressively -- with a large team of lawyers who seem to rank Inslaw Inc. somewhere on a moral scale with Aldrich Ames -- it isn't likely that the court panel will be led, directly at least, to the exact place where the smoking-gun PROMIS code might be found. Likewise for the FBI, also scheduled for inspection, and so on. However, the feeling is that if the panel is able to focus on any PROMIS-derived code, they will certainly identify it.


Finding 'hot' code may be Inslaw's best chance of proving government misuse of their property, since sworn depositions taken from long-time secret Inslaw informants in the case -- some of them DOJ insiders or other government officials sympathetic to Inslaw over the years, who have slipped them information -- have proved to be very disappointing. "The pressure on them is unmistakeable -- they seem scared out of their minds" one source said.

One witness had given Inslaw a hand-drawn chart of PROMIS in the FBI, PROMIS in the NSA, PROMIS in the CIA, PROMIS in the White House and in the National Security Council, all interacting to exchange data across public telecommunications networks, networks which were identified. The information is accurate from all accounts, but the witness claimed that while the handwriting looked like it could have been his, he didn't really know what it was that he wrote.

Another witness suddenly confessed to having "drinking problems" and claimed to have been under the influence of alcohol when giving earlier information. Yet others deny having communications with Inslaw -- though they did, many times, over the years.

Peter Videnieks, Department of Justice contracting officer for the Inslaw software in the early 1980's, the executive in charge of the Inslaw contract when it was breached and one of the key people in its alleged theft, is among those who have been deposed under oath. Videnieks has attracted further interest because of his shadowy role as alleged liason to the Wackenhut/Cabazon Joint Venture -- a role that he has denied repeatedly in the past. Further suspicions about Videnieks were aroused because he has, or had, relatives working in the office of West Virginia Senator Robert Byrd -- relatives whom Danny Casolaro may have been en route to visit, the last fateful weekend of his life. Under oath, Videnieks, now retired from government service, denies remembering anything much about the Inslaw case.

Apparently it is unlikely that close Reagan crony Earl Brian, another figure long associated with the Inslaw case who has vehemently denied any involvement, will be deposed, since Brian is about to stand trial in June in Los Angeles on multiple federal fraud charges. One of the more exotic Inslaw-related allegations is that Brian, who became enormously wealthy with great rapidity in the early 1980's, was given the stolen PROMIS software to resell, as a payoff for brokering initial contacts with Iran which led to the alleged 1980 Reagan/Bush/Casey 'October Surprise' conspiracy (see Robert Parry's website at <> for revelatory articles about October Surprise). Brian, a doctor, developed contacts in Iran in the 1970's when he traveled there to work on reorganization of the Iranian health infrastructure.

Among other things, Inslaw is a model study of real-world difficulties in suing a government bureaucracy whose employees, while sometimes brave enough to provide information under the table, can be twisted into pretzels in public and under oath by the enormous pressures that those agencies bring to bear. All this indicates, however, that it still seems very, very important to the government to try to keep the lid clamped down on the Inslaw case.

But Inslaw's earlier courtroom victory in 1987 was not built on informants, or on relying on government witnesses to tell the truth -- the case was won on smoking-gun documents which Inslaw got in discovery, documents which the DOJ wasn't ready to address. In the earlier case Judge Bason made astringent comments about the credibilty of government witnesses -- not because he was biased, but because he was appalled. "There is little doubt that government witnesses committed perjury on a massive scale in the earlier case," one Inslaw watcher said, "and that perjury was suborned by the government."

The same thing, very likely, is happening again now, but there's nothing Inslaw can do about it. Perjury, especially in a civil case such as this, can only be prosecuted by prosecutors. Since prosecutors are the defendants in Inslaw vs. the DOJ, the likelihood of their going after their own agents and employees, who may be lying for the DOJ's benefit, doesn't even merit a sick joke. It's just one of the prices society pays when the top law enforcement authority is itself corrupted.


Former Attorney General Elliot Richardson, who has for many years represented Bill and Nancy Hamilton in Inslaw matters, has testified for Inslaw and was cross-examined by DOJ attorneys for some five hours in late spring. Richardson's involvement is important to the case: since his resignation at the height of the Watergate scandal during the infamous 'Saturday Night Massacre' he has a virtually unassailable, impeccable reputation for honesty and ethics in government.

While Richardson won't participate in the case as a trial lawyer (he didn't function as trial lawyer in the earlier Inslaw litigations either), his involvement and cooperation on behalf of Inslaw is an important factor to all involved, especially to the attorneys, to whom he's a revered figure. Three years ago Richardson wrote a stunning op-ed editorial about Inslaw, published in the New York Times; in it, he said that the Inslaw case was "dirtier than Watergate" -- strong words, coming from a principal observer of the earlier scandal.


Inslaw hasn't placed a dollar value on the damages it's seeking; that will depend on the extent of illegal usage of the software which can be established in court. Calculating those damages will be based on a per-site license fee for all the unauthorized uses which can be demonstrated, but in any case, the figure is bound to be way too low. Inslaw's unproven -- and perhaps unprovable -- damages are likely very much higher: informal estimates of illegal foreign sales of PROMIS, those used for intelligence and banking activities, run into the high hundreds of millions of dollars. Even if it wins, it's unlikely that Inslaw will ever recover anything like that larger amount, unless it can be demonstrated that those sales took place in the service of the U.S. government, the defendant in the case, or by its employees or agencies.

A question Inslaw watchers have all wondered is -- what's the catch this time? How will the Department of Justice weasel out of revelations of its own corruption? What concrete results can we expect to come out of the suit, and what will be glossed over?

Even supposing the government loses somehow, it's also very likely that most of the national security aspects of the PROMIS theft -- the foreign sales, the CIA bugging, the international banking applications -- will be remain untouched. Foreign illegal sales of PROMIS are beyond the subpeona power of the U.S. court -- you can't subpeona the ASIO, Australia's counterpart to the CIA and one alleged PROMIS purchaser -- and without U.S. witnesses to corroborate such sales, Inslaw will have to take what it can get.

Then, even if it loses, the government doesn't have to pay. Typically congress appropriates such funds in special bills, but nothing is certain in the tangled history of the Inslaw case.

Washington D.C. residents might like to attend the Inslaw trial, which will be held in the U.S. Federal Court of Claims, across from the White House at Lafayette Park. All proceedings will be open to the public unless they touch on trade secret issues (a possibility for part of the trial), or unless the government invokes National Security. Ironically, invoking National Security is the one ploy the DOJ hasn't resorted to and probably won't -- because doing so would admit guilt, and reveal that the PROMIS software had in fact, after all, been bent to secret and covert purposes by the national security state.

(Inslaw's complete 'Rebuttal to the Bua Report' can be downloaded from http://www.>. Garby Leon has been following the Inslaw case closely over the past five years and has spoken extensively with several of its principals. He can be reached by email at <>)

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