Inslaw Rebuttal
              INSLAW's  ANALYSIS  and  REBUTTAL
                           of the
                         BUA  REPORT
                Memorandum in Response to the
    March 1993 Report of Special Counsel Nicholas J. Bua
        to the Attorney General of the United States
        Responding to the Allegations of INSLAW, Inc.
     The  attempt by the Department of Justice (DOJ) to deal with
the  INSLAW  case through a Special Counsel, who is  required  to
report  to  the  Attorney General, and a staff of  DOJ  attorneys
raises significant public policy questions. These are apparent on
the face of the Bua Report.
     For  example, should DOJ, as one of the parties to  a  civil
dispute, be able to use the authority of a federal grand jury and
the  secrecy requirements of its proceedings to improve  its  own
civil litigation posture? Should DOJ be using its own lawyers and
investigators and a federal grand jury to investigate colleagues,
superiors,  and subordinates? How should the tension between  the
obligation to enforce the criminal laws of the United States  and
the  legitimate  need  to  safeguard  intelligence  and  national
security be reconciled?
     The  problems with the Bua Report, as set forth in  INSLAW's
Analysis   and  Rebuttal,  are  much  more  concrete   than   the
aforementioned  public policy questions. We  do,  however,  think
that  the  problems  identified  by  these  questions  should  be
carefully and thoughtfully addressed as steps are being taken  to
bring  the  INSLAW case to a fair, final and publicly  acceptable
     The  main  body of this memorandum is divided into  sections
addressing (1) DOJ's wrongful acquisition of an enhanced  version
of PROMIS to which it was not entitled and which it has continued
to  use  without properly compensating INSLAW, (2) DOJ's attempt,
by  improper  means,  to  cause  the  conversion  of  the  INSLAW
bankruptcy  from  reorganization  to  liquidation,  and  (3)  the
indications  of a more widely ramified conspiracy involving  Earl
Brian  and the intelligence and law enforcement agencies  of  the
United States and foreign governments.
     Each   of   these  sections  examines  the  basis  for   the
conclusions reached in the Bua Report and points out  errors  and
omissions plainly demonstrable on the basis of evidence cited  in
the  report  itself or readily available to the investigators  in
the records of prior investigations and judicial proceedings. The
sections  also identify evidentiary points as to which Judge  Bua
chose  to  believe  the  self-serving statements  of  individuals
directly  implicated  in  the  theft  of  INSLAW's  software,  to
disbelieve  the testimony on the same points by INSLAW witnesses,
and  to ignore evidence supporting the findings of the Bankruptcy
Court  for  the District of Columbia, the United States  District
Court  for  the District of Columbia, and the House Committee  on
the Judiciary.
     In  addition to the deficiencies apparent on its  face,  the
report   reveals  numerous  failures  to  pursue   testimony   or
documentary evidence that could have contradicted its conclusions
and  corroborated  INSLAW's allegations. The  following  sections
identify these failures in at least 40 situations.
     Immediately  after his appointment, INSLAW called  to  Judge
Bua's attention the essentiality of assuring senior DOJ officials
and   other   government  employees  who  had   given   important
information  to INSLAW that they could disclose this  information
to  him  or  his  staff  without fear  of  reprisal.  Any  person
seriously  attempting to uncover the truth  would  have  gone  to
great  lengths  to find a way of overcoming these  apprehensions.
This  was  not done. Appended to this memorandum is a listing  of
these  informants together with a brief synopsis  of  information
they  have  furnished to INSLAW. The listing gives enough  of  an
indication of who they are to make clear that they deserve to  be
taken  seriously,  but  not so much as to  make  it  possible  to
identify  them individually. The synopses make clear at the  same
time   that   the   information  they  could   furnish   strongly
corroborates other evidence of the wider conspiracy.
     The  Bua  Report  denigrates the findings of the  Bankruptcy
Court  without  clearly acknowledging that  those  findings  were
affirmed  and  supplemented by two other entities independent  of
DOJ,  the  U.S. District Court and the House Judiciary Committee.
Senior U.S. District Judge William B. Bryant, Jr., issued  a  44-
page opinion, in which he states in part:
     It  is sufficient to state that after careful review of
     all  of  the  volumes of transcripts  of  the  hearings
     before the bankruptcy court, the more than 1,200  pages
     of  briefs  and  supporting appendices, and  all  other
     relevant  documents in the record, there is convincing,
     perhaps  compelling support for the findings set  forth
     by the bankruptcy court.
     .  .  .  the court has examined the bankruptcy  judge's
     findings of fact in the light of the entire record, and
     finds   his   account  of  the  evidence  is  eminently
     plausible;  and this court is not left with any  notion
     that  a 'mistake has been committed,' Id. at 574.  This
     conclusion  is reached without regard to the  deference
     to  be  accorded to the judge's opportunity  to  assess
     credibility.  The cold record adequately  supports  his
     findings under any standard of review.
     The  section  on  the wrongful acquisition of  PROMIS  amply
supports  its  thesis that the Bua Report focuses only  on  those
facts  that  its authors deemed relevant to the conclusions  they
intended to reach. It calls attention to the fact that the report
based  some of its most important conclusions on interviews  with
unnamed individuals and on undisclosed documentary evidence. This
section also points out the report's remarkable credulity  toward
professions  of  innocence  by  the very  individuals  heretofore
identified  as  the  principal  culprits  in  the  theft  of  the
software.  As  the section observes, "To accept the self-serving,
long  after-the-fact  and  post  hoc  rationalizations  of  these
individuals  over  their  testimony  at  trial,  which  testimony
clearly evidenced their propensity for lying and covering up  the
truth, as found by two federal courts, is ludicrous."
     The  section  on  the  conversion of the  INSLAW  bankruptcy
exposes  the  same pattern of justifying the DOJ version  of  the
facts  and downplaying, misinterpreting, or ignoring evidence  to
the  contrary. This is particularly striking in the case  of  the
report's  attempt to minimize the testimony of Anthony  Pasciuto,
Deputy  Director  of the Executive Office for U.S.  Trustees.  In
reaching   for   an  explanation  of  Pasciuto's   conduct,   his
testimony, and his subsequent recantation, the report avoids  the
one  most logical explanation: the fear that he would not get the
promotion he had long sought and the fear that he would be  fired
for telling the truth, as he eventually was.
     Pages  28-35  of  the  section on the more  widely  ramified
conspiracy  pull together the numerous indications that  INSLAW's
PROMIS  software  is  widely used throughout  the  United  States
Government.  A  thorough investigation would, at a minimum,  have
conducted  the  relatively simple and inexpensive  computer-based
code  comparisons between PROMIS and its suspected clones in U.S.
intelligence and law enforcement agencies, that might have  shown
whether or not these claims are true. The Bua investigation  made
no attempt to arrange such comparisons.
     Relevant both to DOJ's bad faith in its dealings with INSLAW
and  to  its involvement in a broader conspiracy is the issue  of
the DOJ's complicity in the denial of reappointment to George  F.
Bason,  Jr.,  who presided over the Bankruptcy Court  trial.  The
report  reveals  that  the  criticisms  of  Judge  Bason  by  his
predecessor,  Roger  Whelan,  were  influential  in   the   Merit
Selection  Panel's deliberations about Judge Bason's  suitability
for  reappointment. Whelan told the Panel that Judge Bason was  a
poor  administrator.  Chief Judge Aubrey  Robinson  of  the  U.S.
District Court, however, told the Judiciary Committee that  Judge
Bason's  only administrative problems were inherited  from  Judge
Whelan  and that these were soon brought under control  by  Judge
Bason. In the Chapter 11 proceeding, Roger Whelan represented the
INSLAW  creditor  which pressed hardest for INSLAW's  liquidation
and  which, in so doing, appears to have acted in collusion  with
DOJ.  The  report  also  discloses direct communications  on  the
INSLAW  case  between a DOJ attorney and the Chair of  the  Merit
Selection Panel, communications whose existence was not  revealed
in the course of two Congressional investigations on the subject.
     It is noteworthy in the circumstances that Judge Bua made an
eleventh-hour approach to INSLAW's lawyers in an effort to broker
a  $25  million  settlement  between  INSLAW  and  the  DOJ.  The
inference that Judge Bua was aware of the weaknesses in  his  own
report          is          difficult          to          avoid.
     In  assessing  the  validity  of the  so-called  "tentative"
factual  conclusions  reached in the  Bua  Report,  one  need  be
mindful of the following telling admission of the authors:
     Our  discussion here of the factual background  of  the
     1982  contract  does  not  purport  to  be  exhaustive.
     Instead,  _we  have attempted to focus on  those  facts
     that  are relevant to the conclusions we have reached_.
     Where  it is necessary to explain specific findings  or
     conclusions,   we  have  undertaken  a  more   detailed
     examination of certain events in subsequent sections of
     this report. (Emphasis added.) (Page 15)
     In  effect,  the  authors  of  the  Bua  Report  determined,
apparently  in  advance, the conclusions that  they  intended  to
reach  and, thereafter, set about to "focus" on only those  facts
that  they deemed relevant to support those conclusions,  to  the
exclusion of the massive factual record that otherwise would, and
did, lead to the very opposite conclusions found not only by  two
federal  courts, but, in part, by the Committee on the  Judiciary
of   the   U.S.  House  of  Representatives  and  the   Permanent
Subcommittee  on  Investigations of the Committee  on  Government
Affairs of the U.S. Senate.
     It  is  remarkable that the authors of the Bua Report either
ignored  or  rejected  every conclusion reached  by  the  federal
courts  and  the two legislative committees that was contrary  to
the conclusions reached by the Bua Report, while at the same time
accepting   those  conclusions  that  were  supportive   of   the
conclusions reached in the Bua Report. It is even more remarkable
that the Bua Report could find, on the one hand, that DOJ neither
obtained  the  enhanced  version  of  PROMIS  through  fraud  nor
wrongfully distributed PROMIS while, on the other hand, Judge Bua
repeatedly informed journalists covering the INSLAW case and once
conveyed  directly to INSLAW's attorneys that he had reached  the
opposite  conclusion  and had recommended  that  DOJ  settle  its
dispute with INSLAW by the payment of $25 million to INSLAW.
     The  following is an attempt merely to highlight some of the
most glaring errors in the factual conclusions reached in the Bua
     A.   Negotiation of the 1982 Implementation Contract
     The  Bua  Report  found that DOJ had issued  a  Request  for
Proposals  (RFP)  in  late  1981 that solicited  proposals  on  a
contract to: (1) implement computer-based PROMIS software  in  20
"larger"  United  States Attorneys' Offices and  (2)  create  and
install  word  processing based case management software  in  the
remaining 74 offices. There is no dispute that, at the time  that
the  RFP was issued and the contract was awarded to INSLAW,  both
DOJ  and  INSLAW  understood that DOJ  intended  to  utilize  the
computer-based PROMIS only in the 20 larger offices;  it  clearly
was  understood that the remaining 74 offices would  not  receive
this software.
     The  Bua  Report acknowledged that INSLAW, in responding  to
the RFP, specifically stated that:
     During  the life of this project -- but not as part  of
     this  project  --  Inslaw plans  new  enhancements  and
     modifications to the basic PROMIS software and  to  the
     original version of PROMIS for U.S. Attorneys.
     ....[I]mprovements   funded   by   other   [i.e.   non-
     governmental]  sources and developed and  accepted  for
     inclusion in the software supported by Inslaw, will  be
     made  available  to the U.S. Attorneys' offices.  (Page
     However,  the  Bua  Report concluded,  without  any  factual
support,  that INSLAW did not clarify what it meant by  "accepted
for inclusion" or "will be made available." This is wrong.
     First,  the  Bua  Report ignores the fact  that  the  quoted
statement  was made specifically in response to the Statement  of
Work, which in part required that:
     All    systems    enhancements,   modifications,    and
     development performed _pursuant to this contract_ shall
     be  incorporated within the systems which have  already
     been  installed  in the U.S. Attorneys' Offices....  (s (Emphasis added.)
     INSLAW  was  responding to this portion of the Statement  of
Work  by advising DOJ that while INSLAW planned new enhancements,
they  would  not be as a part of, or pursuant to, this  contract.
Thus,  DOJ  clearly was put on notice that these new enhancements
would not be made available for free.
     Second, there is ample testimony that both before and  after
the  PROMIS contract was signed, INSLAW specifically advised  the
Executive Office for U.S. Attorneys ("EOUSA") in writing that  it
had   available   for  sale,  at  an  additional  cost,   certain
proprietary   enhancements  to  PROMIS.  INSLAW   provided   this
information to DOJ because, by the time that DOJ issued the  RFP,
INSLAW   had   made  substantial  enhancements  to  Old   PROMIS.
(Hamilton,  T.  105;  Merrill, T. 763) These enhancements,  which
eventually   included   major  new  functional   subsystems   and
substantial changes to the existing code, at a cost which  INSLAW
estimated  to  be  $8.3  million, rendered  Enhanced  PROMIS  far
superior  to Old PROMIS in terms of speed, flexibility,  ease  of
use,  breadth  of  function,  and  ability  to  be  modified  for
particular needs. (Hamilton, T. 400; Merrill, T. 760-762; Holton,
T. 1216-1219)
     In its Technical Proposal responding to DOJ's PROMIS Project
RFP,  INSLAW  informed DOJ that it had made enhancements  to  Old
PROMIS  which  were proprietary, and as to which it  had  made  a
significant  developmental and commercial commitment.  (Answer  
13;  PX 12; Hamilton, T. 124-125; Gizzarelli, T. 482-483) In this
regard, INSLAW specifically made a claim of proprietary rights in
such enhancements. (Hamilton, T. 124)
     The  Bua  Report  suggests that DOJ did not understand  that
INSLAW had made this claim of proprietary rights, and that INSLAW
had failed to explain in sufficient detail the basis or impact of
that claim. That is not correct. In fact, in response to INSLAW's
proposal, DOJ specifically requested a clarification of  INSLAW'S
claim  of  proprietary rights. (PX 13; Hamilton, T. 126; Merrill,
T.  766-767)  In  an  amendment to its Technical  Proposal  dated
January   13,  1982,  INSLAW  responded  to  DOJ's  inquiry   and
specifically informed DOJ that ". . . all of INSLAW's software is
proprietary  to it thus far." (PX 14; Hamilton, T. 127)  DOJ  did
not  respond  further  to  INSLAW's amendment  of  its  Technical
Proposal.  (Gizzarelli, T. 490; Merrill, T. 767-769) INSLAW  also
indicated that such programs were copyrighted and that since  May
1981  it  had been developing privately financed enhancements  to
PROMIS which were the exclusive property of INSLAW, and that  DOJ
had  no license to use these privately-financed enhancements. (PX
     To illustrate this point, INSLAW, in its Technical Proposal,
singled  out the two-program version of the data base  adjustment
subsystem  as an enhancement which had been developed  by  INSLAW
using  private  funds. (Hamilton, T. 125; PX 14)  The  data  base
adjustment subsystem was not required to be delivered  under  the
contract nor had it been required to be delivered under any prior
DOJ  contracts (Hamilton, T. 125, 2575-2578; Merrill, T. 768)  By
this  January  13 amendment, INSLAW illustrated the concept  that
INSLAW   had  all  the  proprietary  rights  in  Enhanced  PROMIS
(Gizzarelli, T. 493)
     Subsequent to receipt of INSLAW's response to DOJ, and prior
to  the  execution  of the contract, no one  from  DOJ  made  any
further  inquiry  of INSLAW, or raised any questions,  concerning
INSLAW's  right  to  assert its proprietary  rights  in  Enhanced
PROMIS.  (Hamilton, T. 128; Merrill, T. 767-769;  Gizzarelli,  T.
     From the foregoing exchange of communications, it should  be
clear  that  any rational person acting on behalf  of  DOJ  would
understand  that  INSLAW was advising DOJ  that  the  proprietary
enhancements developed by INSLAW would be made available  to  the
Department for a fee, should the Department desire to have  those
enhancements  included within the software  delivered  under  the
contract.  If  there was any confusion on the part of  DOJ,  that
confusion  was  not  the fault of INSLAW;  had  DOJ  any  further
questions  concerning  what was meant by the  language  in  issue
after having received the January 13 clarification, it was up  to
DOJ to seek answers to those questions.
     Not  surprisingly,  after thoroughly reviewing  the  record,
Judge Bryant reached the same conclusion:
     The parties negotiated for over two months, and finally
     entered into a contract on March 16, 1982. Prior to the
     execution  of the contract, and for a time  thereafter,
     there  were  extensive discussions  about  what  INSLAW
     claimed                  were                 privately
     funded  enhancements which were featured in PROMIS.  In
     other  words,  INSLAW  claimed  that  at  the  time  of
     entering into the contract their version of PROMIS  was
     considerably more advanced than it was at the  time  of
     the  pilot  project,  and that it  claimed  proprietary
     rights  to  those  features which were  developed  with
     other than government funding. (D. Ct. Mem. Op., p. 4)"1
          B.    INSLAW's Continuing Assertion of Proprietary
          Rights and DOJ's Improper Response
     To  the  extent  that there was any lingering  confusion  on
DOJ's part regarding INSLAW's assertion of proprietary rights  in
the  enhanced version of PROMIS, that confusion should have  been
removed by INSLAW's continuing assertion of those rights. Indeed,
in  April  1982, INSLAW formally notified DOJ of  its  intent  to
market Enhanced PROMIS as a fee-generating product to public  and
private sector customers. (Hamilton, T. 134-136; Merrill, T. 775)
In  this  connection, Roderick M. Hills, an attorney for  INSLAW,
wrote  to  Associate Deputy Attorney General Stanley  E.  Morris,
enclosing  a  memorandum written by Hamilton (with his  counsel's
assistance)  describing the origin and financing of  Old  PROMIS,
INSLAW's  efforts to substantially improve the program  utilizing
private  funds,  and  the need to market such  privately-financed
enhancements. (PX 21)
     Hill's letter solicited any questions or objections that DOJ
had  to  INSLAW's  plans. (PX 21) In essence,  this  inquiry  was
intended  to  provide advance notice to DOJ as to INSLAW's  plans
and to obtain a "sign-off" letter from DOJ to respond to concerns
raised  by  IBM  which  at  that time  was  considering  a  joint
marketing  agreement with INSLAW. (Rogers, T. 422-424;  Hamilton,
T.  277)  The  purpose  of the "sign-off" letter,  from  INSLAW's
perspective,  was  to give INSLAW assurance that  DOJ  understood
what  INSLAW  was proposing to do, that it agreed  with  INSLAW's
legal  position, and that it would take no affirmative action  to
disrupt  or impede INSLAW's marketing efforts. (Rogers,  T.  444-
445)  Any  questions that DOJ continued to have should have  been
answered by this memorandum.
     The  Bua  Report acknowledges the above facts but  fails  to
take  into  consideration that this additional effort  by  INSLAW
clearly  should have put DOJ on notice that there were additional
enhancements  included within the PROMIS software that  were  not
part of the software to be delivered under the contract, absent a
separate agreement regarding that software.
     There  is no dispute that this plan obviously infuriated  C.
Madison  Brewer,  DOJ's PROMIS Project Manager.  The  Bua  Report
accepts  the  fact  that Brewer vehemently took  issue  with  the
representations  and  conclusions  set  forth  in  the   Hamilton
memorandum, which Brewer referred to as "scurrilous," and further
acknowledges  that Brewer's opposition to the plan was  presented
in  an  improper manner. However, in a woefully inadequate effort
to  downplay Brewer's conduct, the Bua Report proceeds to seek to
justify  his opposition, while at the same time totally  ignoring
all  of the undisputed facts that evidence his outrageous conduct
directed at injuring INSLAW.
     First, the Bua Report's conclusion that at least some of the
positions taken by Brewer appear to have been well-founded is not
only  wrong,  but also is a facially obvious effort to  obfuscate
the  fact  that  virtually all of the substantive  positions  and
actions taken by DOJ, at the direction of Brewer, were not  well-
founded.  In  this regard, the Bua Report credits  Brewer  for  a
grand total of two correct positions, to the exclusion of all  of
the incorrect positions. More particularly, the Bua Report states
that Brewer was correct to object to the extent that the Hamilton
memorandum claimed that all software developed after May 1981 was
proprietary,  since  the five BJS enhancements  that  were  under
development     would     have     been     in     the     public
domain.  INSLAW  did  not then, nor has it  ever,  disputed  this
fact,  and  the  memorandum  did not take  a  contrary  position.
Additionally, the Bua Report credits Brewer for correctly arguing
that  INSLAW  had received some federal funding after  May  1981.
Once  again, while this funding may have taken place, INSLAW  was
not  asserting any proprietary rights for software developed from
government funding under contracts containing federal data rights
clauses. Moreover, the specific contracts referenced in  the  Bua
Report   did   not  encompass  any  software  development   work;
therefore,  none  of the proprietary enhancements  was  developed
using  government money. Thus, the only two points on  which  the
Bua  Report agrees with Brewer are non-issues, and serve only  to
cloud  the  otherwise  obvious  wrongful  conduct  undertaken  by
     The  Bua  Report ignores the fact that at an April 14,  1982
meeting,   Brewer   actively  considered  terminating   for   the
government's  convenience  the  month-old  PROMIS   Contract   in
retaliation for INSLAW's letter to Morris. (Brewer, T.  1673;  PX
23)  In  his  testimony  at trial, Brewer's  deputy,  Jack  Rugh,
acknowledged that such a termination at that time would have been
"ludicrous." (Rugh, T. 1471; Brewer, T. 1673; PX 23) In addition,
Brewer  discussed reprisals against INSLAW on its  several  other
contracts  with  DOJ,  one  of which was  the  BJS  contract  for
specific  PROMIS enhancement development work which was not  part
of  the  PROMIS  enhancements claimed as proprietary  by  INSLAW.
(Hamilton, T. 114; PX 24)
     Another contract discussed at the April 14, 1982 meeting was
awarded to INSLAW in 1981 by DOJ to perform a needs analysis  and
system  design for PROMIS in the U.S. Attorney's Office  for  the
District  of  Columbia. (PX 324 [Brewer] at p.  122;  Brewer,  T.
1634, 1673; Hamilton, T. 141; PX 232) The authorized second phase
of  this contract would have been a PROMIS implementation  effort
by  INSLAW  at an estimated contract price of $600,000.  (PX  324
[Brewer]  at  pp.  123-124; Hamilton, T. 141-142)  It  was  noted
during  the  April  14th  meeting that DOJ  was  undecided  about
whether  to  proceed with the contract's second  phase  and  that
Brewer  and Rugh would meet with the District of Columbia's  U.S.
Attorney's  Office  staff to decide what would  be  done  on  the
contract. (PX 23) It was further noted that cancellation  of  the
authorized  second phase would adversely affect INSLAW's  ability
to  keep  its overhead rate in line with EOUSA expectations.  (PX
     Stating  that  he  wanted to discuss the BJS  contract  with
INSLAW, Brewer demanded a meeting with INSLAW for April 19, 1982.
(PX 24; Brewer, T. 1638)
     At  the  outset  of  the meeting on April 19,  1982,  Brewer
informed James Kelley, INSLAW's General Counsel, and Joyce  Deroy
of  INSLAW  that his concern on the BJS contract arose  from  the
"scurrilous" memorandum written by Hamilton which was attached to
INSLAW's  April 2, 1982 notice to Morris of its plans  to  market
Enhanced  PROMIS.  (PX  25; PX 26; PX 324  [Brewer]  at  p.  137;
Brewer, T. 1671)
     As  of  this  meeting,  Brewer  understood  from  Hamilton's
memorandum  that  INSLAW was asserting its  ownership  rights  in
Enhanced PROMIS, as well as its right to market Enhanced  PROMIS.
(PX 25; PX 324 [Brewer] at p. 141)
     During the April 19, 1982 meeting, Brewer again referred  to
the  Hamilton  memo  and  launched into a  very  emotional,  even
belligerent,   tirade.   (PX  26;  Brewer,   T.   1639;   Kelley,
T.  1397)  During  this part of the discussion  of  the  Hamilton
memo,  Brewer made a number of specific statements regarding  the
memo.  (PX  324 [Brewer] at p. 143) He stated that  the  Hamilton
memo  was  unnecessary because in Brewer's view DOJ  had  already
acknowledged  INSLAW's  right to sell Enhanced  PROMIS.  (PX  324
[Brewer]  at  pp. 144-145) Nevertheless, and despite the  obvious
inconsistency,  it was Brewer's further understanding,  he  said,
that while INSLAW had the right to sell Enhanced PROMIS, DOJ  had
unlimited rights to such software, including the right  "to  give
it  away"  to  those very public and private sector  entities  to
which  INSLAW  would  be  attempting to market  PROMIS.  (PX  324
[Brewer]  at  pp.  146-147; Brewer, T.  1683-1684)  DOJ  has  the
audacity  to  contend that "[it] is in no way  inconsistent"  for
INSLAW to have "the right to sell . . . PROMIS" at the same  time
that  DOJ  has "unlimited rights" to give PROMIS away to INSLAW's
intended customers. (DRPPFF 167)
     Brewer  also  questioned  INSLAW's ability  to  perform  the
PROMIS Contract and indicated that a number of people at DOJ were
upset with INSLAW and that the Hamilton memo had caused all kinds
of  problems. (PX 26; PX 324 [Brewer] at pp. 172, 174-175) Brewer
further  questioned the quality and timeliness of INSLAW's  work,
citing  the  Illinois Criminal Justice Coordinating Council,  the
Michigan Prosecuting Attorneys' Association and others as sources
of this information. (PX 26; PX 324 [Brewer] at pp. 175-176)
     Finally, Brewer strongly challenged INSLAW's right to  claim
ownership of, and complete domain over, Enhanced PROMIS. (PX  26;
PX 324 [Brewer] at p. 177)
     Another matter of discussion by Brewer at the April 19, 1982
meeting was a supplemental request for payment from INSLAW in the
amount of $125,000 in regard to the BJS contract (PX 324 [Brewer]
at  pp.  141-142; Brewer, T. 1638, 1679; Hamilton, T. 144,  200).
Brewer  contacted the superior of the contracting officer on  the
BJS contract and asked that a "preliminary notice" of default  be
issued  on  the  contract2 as well as a reprimand to  INSLAW  for
failing  to comply with the "Limitation of Cost Clause." (PX  27)
Subsequent  to  the  meeting and at Brewer's  insistence,  INSLAW
agreed  to absorb this $125,000 expense into the PROMIS  Contract
without  increasing  the total cost of the  PROMIS  Contract  and
without  any additional payment under the BJS Contract.  (PX  324
[Brewer] at pp. 276-278; Brewer, T. 1640; Hamilton, T. 145)3
     Subsequent  to the April 19, 1982 meeting, Brewer  met  with
officials  of the District of Columbia U.S. Attorney's Office  to
recommend that they not go forward with Phase II of the contract.
(PX  232;  PX  237; PX 324 [Brewer] at p. 123; Brewer,  T.  1674)
INSLAW  was  not formally notified of this decision until  August
25,  1982, although it had successfully completed Phase I of  the
D.C. U.S. Attorney's Contract on May 31, 1982. (Hamilton, T. 142;
PX  37;  PX 38; PX 48) This formal notice was given just 13  days
after  INSLAW  received  a  letter from Deputy  Attorney  General
Stanley  Morris  dated August 11, 1982, which noted  that  INSLAW
could   assert  proprietary  rights  to  any  privately  financed
PROMIS enhancements. (Hamilton, T. 138-140, 277; Merrill, T. 775-
776; PX 36)
     Brewer  played a very important role in the decision not  to
go  forward  with  Phase  II of the D.C. U.S.  Attorney's  Office
contract.  (PX  232; PX 237; PX 324 [Brewer] at  p.  124)  Brewer
identified the purported basis for this decision, in part, as his
understanding that INSLAW was not able to perform because of  the
demands  being made upon INSLAW under the new three-year,  PROMIS
Contract  (PX  324  [Brewer] at pp. 124-125;  Brewer,  T.  1635),
notwithstanding that the latter contract had only been in  effect
a few months.
     Based  on  prior discussions with DOJ officials, INSLAW  had
been led to believe that it would be awarded Phase II of the D.C.
U.S. Attorney's Office contract and had planned upon $600,000  of
revenue from Phase II for estimating its overhead rate for all of
its DOJ contracts and grants. (Hamilton, T. 143-144; Merrill,  T.
774)  After the decision not to go forward with Phase II had been
made, Brewer was informed by INSLAW's comptroller, Murray Hannon,
that  denial  of  the $600,000 Phase II contract  resulted  in  a
precipitous increase in INSLAW's overhead within a few months  of
the decision, as Brewer had been forewarned would happen. (PX 324
[Brewer] at p. 125)
     Finally,  while the Bua Report went out of  its  way  in  an
attempt to exonerate Brewer, it is noteworthy that the Bua Report
did not even address the unrefutable fact that DOJ failed totally
to  act upon, let alone consider, INSLAW's repeated assertions of
bias on the part of Brewer. As Judge Bryant found:
     INSLAW attributed its troubles to an acute bias on  the
     part  of  Brewer,  who according to it  was  intent  on
     running the company out of business. INSLAW lodged many
     complaints of bias and made several requests of DOJ  to
     investigate these complaints and give some relief  from
     what  it perceived to be grossly unfair treatment. _DOJ
     made  no meaningful response to these complaints_,  and
     INSLAW's fortunes did not change. (Emphasis added.) (D.
     Ct. Mem. Op., p. 6)
     C.   DOJ  Obtained  Enhanced PROMIS through  Fraud  and
     The  Bua  Report  concluded that  "[t]he  evidence  we  have
compiled  to  date does not support a finding that DOJ  employees
intentionally deceived or defrauded INSLAW, or that there  was  a
scheme   to  trick  INSLAW  into  turning  over  its  proprietary
software." (Page 125) This conclusion purportedly is supported on
the  basis  of  a  review of the deposition and trial  testimony,
documents  and interviews of "many of the individuals  involved,"
and  the  review of additional unspecified documentary  evidence.
Not  surprisingly, the Bua Report does not disclose the  identity
of  every  one of the individuals interviewed or the  "additional
documentary evidence" reviewed. In fact, however, virtually  none
of   the  witnesses  offered  by  INSLAW  during  the  trial  was
interviewed by the authors of the Bua Report, and those who  were
interviewed commented at the time on the perfunctory character of
the  inquiry. Indeed, it is astonishing that the authors  of  the
Bua  Report could conclude, on the basis of interviews  with  DOJ
personnel  conducted over 10 years after the events  in  question
and  following  an  extensive trial and extraordinary  post-trial
publicity,  that  those  individuals  acted  only  in  the  "best
legitimate  interests of the government. " (Page 125)  To  accept
the    self-serving,   long   after-the   fact   and   post   hoc
rationalizations  of these individuals over  their  testimony  at
trial,  which  testimony clearly evidenced their  propensity  for
lying  and covering up the truth, as found by two federal courts,
is ludicrous.4
          1.   The Advance Payment Dispute
     Under  the  PROMIS Contract, INSLAW was entitled to  receive
payments  in  advance of the waiting period usually necessary  to
process  an invoice. In order to qualify for the advance  payment
clause,  INSLAW had to represent that it was not then capable  of
obtaining  financing  from banks or other traditional  commercial
sources.  The contract also contained a provision that prohibited
INSLAW from pledging its rights under the contract.
     In  November 1982, INSLAW informed DOJ that it had  violated
inadvertently a technical covenant in the contract  by  assigning
its  government invoices as collateral for a bank line of  credit
that  it  had obtained in April 1982. DOJ responded  to  this  by
threatening  to  terminate  the advance  payment  clause  and  by
demanding  that INSLAW turn over a copy of its software  to  DOJ.
The  bankruptcy court found that the advance payment dispute  was
manufactured,  without justification, as a  mechanism  to  injure
INSLAW  and to require INSLAW to provide DOJ with a copy  of  the
software  that  would,  in  turn, enable  DOJ  to  implement  the
software in-house.
     The  Bua  Report  rejected  the conclusion  reached  by  the
bankruptcy court. In doing so, the authors of the Bua Report seek
to  justify  the  conduct of DOJ on the basis that  DOJ's  action
was  predicated  upon its belief that INSLAW had  "lied"  to  it.
They  conclude  that  it  was  the misrepresentations  by  INSLAW
concerning its ability to obtain outside financing that  was  the
primary  reason for DOJ giving notice of termination  of  advance
payments.  The  authors  of  the Bua Report  assert  that,  after
viewing the "demeanor" of the contracting officer, they concluded
that  his  version was believable on this point. This conclusion,
however,  ignores  virtually all of the evidence  in  the  record
relating to this subject.
     First, the record is undeniably clear that, on February  19,
1982,  prior to the issuance of the contract, when INSLAW  sought
the   so-called   advance  payment  provision,  commercial   bank
financing was not available. Thus, INSLAW's representation to DOJ
at  that  time was correct and most certainly was not a  lie.  In
April  1982, largely on the strength of the $10 million  contract
award,  INSLAW  was able to secure an additional line  of  credit
from  the  Bank of Bethesda. This credit was obtained,  in  part,
based  upon  the  pledge of the receivables to  the  Bank.  Thus,
contrary  to the assertion in the Bua Report, INSLAW was  not  in
the process of obtaining commercial financing at the time that it
represented in its formal request that it was unable  to  do  so,
and  there is no conflict in the representation made in February,
prior  to  the  contract,  and the subsequent  effort  to  obtain
financing  in  April, after the contract. The  effort  to  obtain
financing  took place later, and was predicated on the  award  of
the  contract.  Thus,  INSLAW  neither  lied  nor  misrepresented
anything to DOJ.
     Notwithstanding, there is no dispute that  the  pledging  of
the   receivables  resulted  in  a  technical  violation  of  the
contract.   In  November  1982,  this  technical  violation   was
discovered by DOJ's auditor Robert Whitely and discussed  by  him
with  INSLAW. At that time, Whitely told INSLAW that he was fully
satisfied with the foregoing explanation and that, since DOJ  was
in  no  way  negatively impacted by the line  of  credit  or  the
pledge,  he  would  not raise any question in the  current  audit
about  this  matter. Whitely fully acknowledged these facts,  and
particularly the fact that the government was not placed  in  any
financial  risk as a result of the technical violation.  (PX  345
[Whitely]  at pp. 36-38, 40-44; Whitely, T. 1673-1764;  Hamilton,
T.  166-167) However, when Whitely met with Videnieks and  Brewer
and  indicated  his  discovery of the technical  violation,  they
seized  on  the  issue and maneuvered it into a controversy  when
none really existed. Whitely later testified at trial that he had
been  concerned  about INSLAW's near insolvency,  but  could  not
produce   any   contemporaneous  documentation  to   verify   the
truthfulness of such claims.
     Second, despite considerable written discussions within  DOJ
concerning this matter, there is no record whatsoever of any  DOJ
employees stating their belief that INSLAW had lied to  them.  In
fact,  while Brewer and the contracting officer purportedly  were
concerned  about  a substantial deterioration  in  the  financial
condition  of  INSLAW,  as  well  as  other  concerns  that  they
enumerated  in  writing, at no time did they state  their  belief
that  INSLAW had engaged in any misrepresentations. Nor did  they
seek  to  justify  their  conduct  on  that  basis  during  their
depositions  or at trial. In short, while they may have  asserted
this  so-called "lie" argument to the authors of the Bua  Report,
over  10 years after the fact, they most certainly did not  raise
this argument at any earlier time.
     Third,  the  entire  premise  on  which  DOJ  threatened  to
terminate  the advance payment provision (i.e., the deteriorating
financial  condition  of  INSLAW) was  found  by  the  bankruptcy
court   to   be   a  complete  fabrication  and  a  pretext   for
demanding access to the computer software. Not surprisingly, this
wealth of evidence was totally ignored in the Bua Report.
     For  example,  despite  the  expressed  concerns  about  the
financial condition of INSLAW, neither Brewer nor Videnieks could
identify  any  evidence which led them to believe  that  INSLAW's
financial  condition  had substantially  deteriorated  since  the
award  of the PROMIS contract in March 1982, nor any evidence  of
any  fraud. (PX 324 [Brewer] at pp. 232-233; 241-245; Brewer,  T.
1630;  Videnieks,  207-208) In fact, Brewer  and  Videnieks  were
mistaken  in  their assumption that INSLAW's financial  condition
had  deteriorated during the latter half of 1982; INSLAW was much
stronger  in  December 1982 than at the time the PROMIS  contract
began.  (Hamilton, T. 162) In fact, during 1982, INSLAW was  able
to increase a previously existing line of credit of $700,000 with
First  American  Bank to a $1.2 million line of credit  from  the
Bank  of  Bethesda.  (Hamilton,  T.  159;  Merrill,  T.  799)  In
addition,  between August and December 1982, INSLAW entered  into
the  co-marketing agreement with IBM. (Hamilton, T. 160; Merrill,
T.  799)  Perhaps  most  important is the fact  that  INSLAW  had
obtained  the  PROMIS  contract, and prospects  were  strong  for
successful  completion  of the contract. (Hamilton,  T.  160-161;
Sherzer, T. 958-959)
     Notwithstanding   the  evidence  to  the  contrary,   Brewer
informed  Tyson, Director of EOUSA, about these same  unsupported
concerns.  (PX  49; Hamilton, T. 156-157) In a December  9,  1982
memo to Tyson, Brewer raised the following issues:
     a.   The prospect of INSLAW's bankruptcy;
     b.   The possible need for in-house EOUSA personnel  to
          take over the PROMIS Project;
     c.   Substantial  questions of fraud  being  raised  by
          INSLAW's accounting practices;
     d.   The  need  for close auditing review  of  INSLAW's
          costs,  particularly overhead and computer  center
          costs; and
     e.   The  prospect of terminating the PROMIS  Contract.
          (PX 49; Hamilton, T. 156-156)
     The   December  9  memo  also  expressly  detailed   EOUSA's
commencement  of  planning for carrying-on  the  PROMIS  Contract
Project  in-house, using EOUSA employees ". . . in the  event  of
trouble" and stated that DOJ had "demanded, as is our right, from
INSLAW  copies  of  all  software  documentation  ...."  (PX  49)
(Emphasis added.) This planning was not disclosed at any time  by
DOJ  to  INSLAW.  (Hamilton,  T.  165)  Had  this  planning  been
disclosed  to  INSLAW, INSLAW would not have turned its  software
over to DOJ pursuant to Modification 12. (Hamilton, T. 165-166)
     The  December  9,  1982  Brewer memo was  based  on  several
fundamental  misconceptions.  First,  INSLAW  had  not   incurred
$975,000  of  additional  bank  debt,  but  $275,000,   and   the
additional  borrowing was necessary to defray partially  $344,000
that           DOJ           then           owed           INSLAW
for   its   time-sharing   services.   (Hamilton,   T.   157-158)
Second, Brewer misconstrued the Advance Payments provision of the
contract  as  a mechanism for "payment-in-advance"  when  it  was
merely  a  contractual  procedure for  DOJ's  timely  payment  of
INSLAW's vouchers for work already completed. (Hamilton, T.  158)
Third,    Brewer   erroneously   concluded   that   INSLAW    had
"reprogrammed"  $100,000 in contributions to the INSLAW  employee
profit-sharing  plan  because INSLAW had not  yet  deposited  the
annual  contribution, when, in fact, the deposit was not yet  due
and  owing.  (Hamilton,  T. 158-159) Fourth,  Brewer  incorrectly
concluded  that  the nature of INSLAW's indebtedness  had  become
"desperate"  by December 1982, when, in fact, INSLAW believed  it
had  just obtained DOJ's " sign-off" to its rights to license its
privately-financed enhancements, had established its first  sales
and  marketing unit, and had consummated a national  co-marketing
arrangement  with IBM for the public sector. (Hamilton,  T.  159-
161)  Fifth, Brewer confused a version of PROMIS developed  under
the  Pilot  contract  using a COBOL compiler  that  the  hardware
manufacturer  (PRIME)  had  subsequently  discontinued,  with   a
version  developed  by  INSLAW's  European  subsidiary  based  on
current  compiler technology; as a consequence  of  his  lack  of
understanding,   Brewer   had   suggested   possible   fraudulent
accounting  practices at INSLAW. (Hamilton, T. 162-165)  INSLAW's
independent  public  accountants  had,  in  fact,  reviewed   and
approved the accounting transactions. (Hamilton, T. 165)
     The  Bua Report concludes that DOJ's actions concerning  the
advance payments were fully justified by the memoranda they wrote
concerning the matter. According to the Bua Report, "[t]o believe
that DOJ's concerns about INSLAW's financial health were actually
a  pretext,  would require a finding that certain  DOJ  employees
were  so prescient that they created numerous internal documents,
and  indeed even misled their superiors, just so that they  could
defend themselves against a claim of theft years later." No  such
finding  would  be required. In fact, the only  finding  that  is
necessary  is  that Brewer, for all of the reasons found  by  the
bankruptcy  court, set about to manufacture a reason  to  justify
obtaining  the  software. There is nothing unusual  in  employees
attempting  to  paper the record in an effort  to  justify  their
actions  and  that  is exactly what happened here.  The  evidence
amply   supports  the  bankruptcy  court's  findings  that  DOJ's
justification for seeking the software and cancelling the advance
payments provisions was unsupportable.
     In  an effort to justify the conduct of DOJ, the authors  of
the Bua Report go to great lengths to rebut the conclusion of the
bankruptcy  court  that  Brewer and Videnieks  had  no  basis  to
believe  that  INSLAW  was  near insolvency  and  that  Whitely's
testimony in support of this argument was manufactured solely for
use  at trial. According to the report, "Judge Bason stated  this
conclusion after finding that Whitely never prepared any  report,
that  Whitely never referred to INSLAW's potential insolvency  in
his deposition, and that Videnieks did not mention Whitely in his
deposition."  The  report concluded that "all  of  these  factual
assertions  appear  to be just plain wrong."  (Page  131-132)  In
fact, Judge Bason was absolutely correct and it is the authors of
the Bua Report that are "just plain wrong."
     Judge Bason first found that neither Brewer nor Videnieks at
their  depositions could identify any evidence to  demonstrate  a
substantial   deterioration  in  INSLAW's  financial   condition,
notwithstanding    repeated    opportunities     during     their
depositions  to  provide  such  evidence.5  While  Videnieks  did
suggest  that  he  had been informed by the audit  staff  of  the
possibility of INSLAW's financial failure, this was not  evidence
of  any deterioration in the financial condition of INSLAW. Judge
Bason  next  found  that  while Whitely  asserted  at  trial  his
conclusion  regarding  potential  insolvency,  Whitely  did   not
prepare  a  written report or any other document which "detailed"
his alleged conclusions. Judge Bason concluded, quite reasonably,
that  if Whitely had reached such an obviously important, if  not
critical, conclusion regarding the financial condition of INSLAW,
it  would have been documented in his work papers, which  it  was
not.  In  fact,  on  rebuttal, INSLAW adduced  the  testimony  of
Whitely's successor, Ms. Schacht, who testified that there was no
reference to such purported insolvency in the DOJ audit file  nor
any  discussions  on  this subject within DOJ's  auditing  group.
(Schacht,  T. 2452) Not surprisingly, DOJ was unable  to  produce
any   such   written  records  that  supported  Whitely's   trial
testimony,  since none existed. While Whitely may  have  said  he
prepared "work papers," the facts prove otherwise. Finally, Judge
Bason found that Whitely's other conclusions concerning the Irish
subsidiary   receivable  and  the  capitalization   of   software
development  costs  were  directly  contrary  to  the  considered
opinion   of   Arthur  Young  &  Co.,  a  recognized  independent
international auditing firm, which had given INSLAW,  a  "clean,"
unqualified  audit  opinion as to its  financial  condition,  and
itself  was  the source of INSLAW's accounting treatment  of  its
capitalization. (Whitely, T. 1777-1779)
     Obviously,  Judge Bason was fully justified,  based  on  the
record  before him, in concluding that the basis for the  advance
payment dispute was totally unjustified and manufactured. The Bua
Report  does nothing to refute the conclusions reached  by  Judge
Bason,  and its efforts to attack Judge Bason in this regard  are
          2.   DOJ's Demand for the Software
     The bankruptcy court concluded that DOJ knowingly set out to
obtain  the version of PROMIS to which it was not entitled  under
the  contract  and  which  DOJ understood  contained  proprietary
enhancements  belonging to INSLAW. The district  court  concurred
with this conclusion:

     Thus, the court is drawn to the same conclusion reached
     by the bankruptcy court; the government acted willfully
     and  fraudulently to obtain property that  it  was  not
     entitled to under the contract. (D. Ct. Opinion, p. 34)
     The  Bua  Report stated that this conclusion required  proof
that  DOJ  set  out  to  obtain something to  which  it  was  not
entitled. Because DOJ purported initially only to seek the public
domain  version  of the software, the Bua Report  concludes  that
proof  of  DOJ's  fraudulent intent is missing.  The  Bua  Report
concludes  that INSLAW had failed to maintain a contract  version
PROMIS  and  that,  had they done so, there would  have  been  no
proprietary rights dispute, since INSLAW's production of  such  a
version  would  have satisfied any obligation it  had  under  the
contract.   This   entire   argument   displays   a   fundamental
misunderstanding of the contract.
     First,  the  contract contemplated that DOJ  promptly  would
select the computer it wished to have installed at the 20 largest
U.S. Attorneys' Offices and that INSLAW would then implement  the
public  domain  software  on that hardware.  This  software  then
consisted  of two separate parts: the Pilot Project  version  and
the 5 BJS enhancements. Until DOJ selected its computer hardware,
there  was  no  reason for INSLAW to maintain a  separate  public
domain  version  consisting of these then two separate  and  non-
integrated  parts. The integration of the five  BJS  enhancements
with  the Pilot Project version had to be done after DOJ selected
the  specific  computer hardware. The Pilot  Project  used  PRIME
computers,  and DOJ had not determined what brand  and  model  of
computers  it  would  buy  for  the 20  largest  U.S.  Attorneys'
Offices.  For  example, DOJ would not have reimbursed  INSLAW  to
create a separate Pilot Project PLUS five BJS enhancement version
for  operation on a particular brand and model computer  such  as
the  VAX  mid-range  computer from Digital Equipment  Corporation
unless  and  until  DOJ selected VAX for the 20  U.S.  Attorneys'
Offices. Instead, DOJ selected PRIME.
     Second, contrary to the assertion in the Bua Report,  INSLAW
did  have  a version of public domain PROMIS that was frozen  and
bug  free. The U. S . Attorneys' Offices in San Diego and  Newark
were  each  operating the Pilot Project version  of  PROMIS,  and
INSLAW was supporting that version and keeping it "bug free." The
five  BJS  enhancements had not been created at the time  of  the
original  Pilot  Project implementation.  Whatever  hardware  DOJ
selected  would also be used to replace the hardware in  the  San
Diego  and  Newark  Pilot  Project offices.  Consequently,  while
INSLAW  ultimately  would  have to implement  the  Pilot  Project
version, as supplemented by the BJS enhancements in each  of  the
two Pilot Project offices as well as in the other 20 largest U.S.
Attorneys' Offices, INSLAW could not reasonably have begun to add
the  five BJS enhancements to the bug-free Pilot Project  version
until DOJ made its computer hardware selection. DOJ had not  made
its  selection of the hardware by the time DOJ demanded the time-
sharing version of PROMIS.
     Third, the conclusion of the Bua Report that DOJ was unaware
of  the fact that the version it sought contained the proprietary
enhancements is wrong. It is undisputed that during the period of
time  before  DOJ  selected its hardware, it was understood  that
INSLAW  would  accommodate  DOJ by allowing  the  larger  offices
access to INSLAW's computer in Maryland (not Virginia) on a time-
sharing  basis. It was expected that DOJ would order the hardware
promptly,  so that this accommodation would be short term.  Since
it was not possible to implement the contracted-for version until
the  hardware  was selected, there was no reason  to  maintain  a
separate copy of that version, and DOJ certainly knew this fact.
     For this temporary time-sharing accommodation to DOJ, INSLAW
used  its  proprietary  VAX  version of  PROMIS  in  which  other
proprietary  enhancements  also had  been  included  ("the  time-
sharing  version")  There  was  no contractual  requirement  that
INSLAW provide DOJ with this time-sharing software, and therefore
INSLAW had, quite properly, not anticipated that DOJ would demand
the   underlying  software  which  contained  these   proprietary
enhancements.  Indeed,  no one connected  to  the  contract  ever
contemplated  the  delivery to DOJ of the  time-sharing  version,
since  this  version  was  being  used  merely  as  a  short-term
accommodation.              As              DOJ               was
not   expected   ever  to  take  delivery  of  the   time-sharing
version,  INSLAW  could  reasonably  have  planned  to  use   its
proprietary  version  in the time-sharing service,  because  this
improved  version would enable INSLAW to provide more  responsive
time-sharing  services  to each of the  largest  U.S.  Attorneys'
     When DOJ demanded that INSLAW turn over its PROMIS software,
DOJ  still had not selected either the minicomputer or  the  word
processing  hardware  that  would  ultimately  be  used  to   run
minicomputer  PROMIS  at  the  20 larger  offices  and  the  word
processor-based case tracking software at the 74 smaller offices.
Thus,  DOJ was not at that time prepared to implement the version
of PROMIS called for under the terms of the contract and, indeed,
INSLAW could not prepare the contracted-for version of PROMIS for
DOJ until DOJ had decided which minicomputer hardware to procure.
Therefore,  when DOJ used the pretense of threatened  termination
of advance payments as leverage to obtain the software, it had to
know  that  it was seeking the enhanced time-sharing  version  of
PROMIS to which it was not entitled under the contract, and which
DOJ  understood contained proprietary enhancements  belonging  to
     Finally,  contrary  to  the assertion  in  the  Bua  Report,
whether  DOJ  had knowledge that it was seeking the  time-sharing
version at the time it sent its initial request letter is  not  a
critical  issue,  because  DOJ clearly  understood  that  it  was
seeking  the  proprietary  version  at  the  time  it  negotiated
Modification 12. By that time, there is no dispute that  DOJ  was
aware  that  the  software  it  was  demanding  was  the  version
containing  the  proprietary enhancements. Even  the  Bua  Report
concedes   that   by  the  time  the  parties  were   negotiating
Modification 12, INSLAW had informed DOJ that the VAX version  of
PROMIS   being   provided  under  the  time-sharing  arrangements
contained enhancements that INSLAW considered proprietary.  (Page
     In  fact,  beginning at least as early as February 4,  1983,
when   DOJ   and   INSLAW   met  to  discuss   DOJ's   threatened
discontinuation   of   the   advance   payment   provision,   DOJ
specifically was put on notice that its simultaneous  demand  for
the  underlying software would require INSLAW to  turn  over  the
proprietary  version of that software. Immediately upon  learning
of this fact, there is no dispute that DOJ refused to resolve the
advance  payment  issue  independently  of  the  software  issue,
notwithstanding  that the two issues were unrelated.  Indeed,  as
even  the Bua Report acknowledged, "from at least this point  on,
DOJ  collapsed  the negotiations of the advance  payment  dispute
into the negotiations of the software request and the proprietary
rights  issue."  (Page 28) Thus, when DOJ used  the  pretense  of
threatened termination of advance payments as leverage to  obtain
the  enhanced  time-sharing software, it  knowingly  set  out  to
obtain a version of PROMIS to which it was not entitled under the
contract,   and   which  DOJ  understood  contained   proprietary
enhancements belonging to INSLAW.
     Even  if  DOJ  started out to obtain nothing more  than  the
contracted-for  version  (albeit  for  improper  purposes),   DOJ
clearly  was seeking the proprietary version at the time  it  put
into effect its plan to "get the goods"6 via Modification 12.  As
such,      the     absence     of     evidence      that      DOJ
knew,   when  it  initially  requested  a  copy  of  the   PROMIS
codes,  that  it would obtain something other than  the  contract
version  is irrelevant; the evidence is undisputed that  it  knew
that it was going to receive the proprietary version when it  set
about  to  obtain that version without any intention to negotiate
in good faith over its use. Thus, there is no "great weakness" in
Judge Bason's conversion theory.
          3.   The Negotiation of Modification 12
     The  parties thereafter entered into negotiations to resolve
both   the   proprietary  rights  and  advance  payment   issues,
ultimately resulting in the execution of Modification 12  to  the
contract.  The  Bua Report acknowledges that, without  regard  to
whatever rights DOJ had to the software prior to Modification 12,
DOJ  clearly  was "bargaining away" some of its  rights  when  it
agreed   to  enter  into  Modification  12,  and  moreover,   was
obligating itself to "live up" to the terms of that Modification.
(Page 136-137)
     Under  this  Modification, INSLAW agreed to  turn  over  its
proprietary software on the basis of certain explicit commitments
by  DOJ. First, DOJ was to bargain in good faith to identify  the
proprietary   enhancements  contained  within  enhanced   PROMIS.
Second,  DOJ  was  to  decide  within  a  reasonable  time  which
enhancements it wanted to use, and to the extent that it did  not
want  to  use certain of these enhancements, to direct INSLAW  to
remove  the  enhancements  it did not want.  Third,  DOJ  was  to
bargain in good faith with INSLAW as to the price to be paid  for
those enhancements it did want.
     The  bankruptcy court found that DOJ never intended to  meet
its  commitments  under Modification 12 and  that  once  DOJ  had
received  Enhanced  PROMIS  pursuant  to  Modification  12,   DOJ
thereafter  refused  to bargain in good faith  with  INSLAW.  DOJ
instead "engaged in an outrageous, deceitful, fraudulent game  of
cat  and  mouse, demonstrating contempt for both the law and  any
principle  of  fair dealing." While conceding that DOJ's  conduct
following  execution of Modification 12 was subject to  criticism
and  demonstrated  "poor judgment," the Bua Report  rejected  the
bankruptcy  court's finding of DOJ fraud under  Modification  12,
based largely upon its post hoc meetings with Rugh and Videnieks:
     Bankruptcy  Judge Bason found that DOJ "never  intended
     to  meet its commitment" under Modification 12.  We  do
     not  believe  the evidence supports this  finding.  The
     weight  of  the  evidence  demonstrates  that  the  DOJ
     employees  involved  reviewed INSLAW's  submissions  in
     good   faith,   and  responded  in   ways   that   they
     subjectively  believed  were  within  the  government's
     legitimate  rights  under  the  contract.  We  find  no
     evidence of bad faith or intentional wrongdoing.
     This  conclusion is belied by any reasonable  and  objective
review of the facts relating to this matter. It is also belied by
the  very  reasoning adopted by the authors of  the  Bua  Report.
The  authors  conclude  that  DOJ had an  affirmative  obligation
to  "live up" to the procedures contained in Modification 12  and
in  a  March 18, 1983 letter written by Videnieks which  provides
the  foundation  for Modification 12. Together,  these  documents
clearly  obligated DOJ to negotiate in good faith with INSLAW  to
determine  which  of  the  enhancements  were  proprietary   and,
thereafter, which of those enhancements DOJ wanted to be included
in  the  software delivered under the contract.  The  Bua  Report
found  that  DOJ  failed to negotiate with  INSLAW  regarding  an
acceptable  methodology for determining which  enhancements  were
proprietary. Indeed, the Bua Report concluded that DOJ refused to
accept the methodology proposed by INSLAW, refused to explain the
basis  of that rejection, and refused to provide INSLAW with  the
methodology  that would be acceptable to DOJ. In  fact,  the  Bua
Report  concluded that "[i]t is difficult for us to  see  a  good
reason  not  to  tell INSLAW what criticism DOJ had  of  INSLAW's
methodology ... it was in neither party's interest to have INSLAW
guessing about what was the problem with the methodology."  (Page
139) Yet, notwithstanding having concluded that DOJ was obligated
to  negotiate  in good faith to live up to its commitments  under
the  Modification, and having concluded that DOJ failed to do  so
for  no  "good reason," the Bua Report concludes that  these  two
failures  were not done in bad faith. By definition  alone,  they
most certainly were. Moreover, when put in context, DOJ's actions
clearly  were  a  continuation of the ongoing bad  faith  conduct
directed at INSLAW during the entirety of the contract.
     By  way of background, when DOJ persisted in its attempts to
tie  resolution  of the advance payment issue to the  proprietary
rights  issue,  INSLAW initially proposed that the parties  enter
into an escrow agreement pursuant to which DOJ would receive  the
software  if, and only if, INSLAW went into bankruptcy.  (PX  68;
Hamilton, T. 167-168; Brewer, T. 1693-1694; Merrill, T. 791)
     Although  certain DOJ personnel recommended INSLAW's  third-
party  escrow proposal, it was rejected by Brewer and  Videnieks,
because  they could not thereby immediately obtain the  software.
(PX  73)  Videnieks and Brewer discussed this issue on  or  about
March  28,  1983  and  decided to propose a  letter  response  to
INSLAW's government contracts counsel, Harvey Sherzer, indicating
DOJ's intent "to back off [Advance payments] discontinuation  and
promising  non-dissemination [of PROMIS software] in  return  for
delivery  of  information  demanded on 12/6~  (PX  73)  Videnieks
prepared  a  draft of this letter which Brewer then  rewrote  (PX
73).  This letter was submitted to William Snider, Administrative
Counsel  for  Procurement,  who  previously  had  indicated   his
preference for a bilateral agreement between the parties embodied
in a contract modification. (PX 73)
     A  March 28 memo further recounts that Videnieks was in full
agreement   with  Brewer  about  the  letter,  indicating   quite
significantly  ". . . why do you need signature if  you  got  the
goods?" (PX 73; Videnieks, T. 1837-1838)
     Snider quickly responded to the Brewer/Videnieks proposal on
March 29, "sharply disagreeing on this approach." (Videnieks,  T.
1838)    At    this    point,    Brewer    "forbade"    Videnieks
from  entering  into  a "Mod" of the contract.  (PX  73)7  Brewer
did  not  want a bilateral agreement if he could "get the  goods"
without it. (Brewer, T. 1704-1705)
     On  April  5,  1983  Videnieks and Brewer  had  a  telephone
conversation  in  which  Brewer  told  Videnieks  that  he  would
"protect"  him  from "backing down" to Sherzer and Hamilton.  (PX
73)  After  this conversation, Videnieks checked with Snider  and
"MH" [INSLAW's comptroller, Murray Hannon], who confirmed that  a
contract    modification    protecting    INSLAW's    proprietary
enhancements  was  a  precondition to INSLAW's  delivery  of  the
software. (PX 73; Brewer, T. 1208) Brewer understood that  INSLAW
wanted   such  protection  and  that  INSLAW  would  remove   any
enhancements that DOJ did not want. (Brewer, T. 1708-1709)
     DOJ's  March 18, 1983 response to INSLAW's March  11  escrow
agreement  proposal  dismissed the proposal  but  did  offer,  in
consideration of "getting the goods," to agree not to disseminate
or  disclose  the  PROMIS  software beyond  EOUSA  and  the  U.S.
Attorney's  Offices  enumerated in the  PROMIS  contract  pending
resolution and negotiation of the proprietary enhancements  issue
"until  the  data  rights  of the parties  to  the  contract  are
resolved."  (PX 70; PX 71; Merrill, T. 792; Brewer, T. 1689-1690;
Hamilton,  T.  168) This proposal by Videnieks was basically  the
methodology  proposed  and discussed  at  the  February  4,  1983
meeting. (Merrill, T. 792)
     The  March 18 letter also stated that once the "data rights"
issue   was  resolved,  DOJ  would  review  INSLAW's  proprietary
enhancements to decide which (if any) enhancements DOJ desired to
include in the PROMIS Contract software. (PX 70; PX 71)
     Videnieks  specifically stated in his March 18  letter  that
after the proprietary enhancements issue was resolved, DOJ:
     .  . . will review the effect of any enhancements which
     are  determined  to  be proprietary,  and  then  either
     direct  INSLAW  to delete those enhancements  from  the
     versions  of PROMIS to be delivered under the  contract
     or  negotiate  with INSLAW regarding the  inclusion  of
     those  enhancements  in that software.  The  Government
     would  then  either  destroy or return  the  "enhanced"
     versions  of  PROMIS  in exchange  for  the  Government
     PROMIS software including only those enhancements  that
     should  be included in the software. If this course  of
     action  is acceptable to INSLAW there would be no  need
     for  an escrow agreement. (PX 70; PX 71; Videnieks,  T.
     The  enhancements  which DOJ did not want would  be  removed
from  the  software delivered to DOJ. (PX 70; PX 71;  Brewer,  T.
1690-1691, 1709; Hamilton, T. 330-331)
     INSLAW  understood  from  Videnieks'  letter  that  it   was
necessary  to resolve the issue of "proprietary enhancements"  as
soon as possible because INSLAW was scheduled to deliver software
to the 20 largest U.S. Attorney's offices beginning in the Summer
of  1983.  (PX 73; Hamilton, T. 169) INSLAW also understood  from
Videnieks'  letter that it was to identify the enhancements  that
had  been  privately financed, with evidence  of  the  source  of
private  funding,  and an indication as to why  the  enhancements
were  not  required  to  be furnished  under  the  terms  of  the
contract. (Hamilton, T. 170; PX 70; PX 71)
     Most  importantly, INSLAW understood from Videnieks'  letter
that  DOJ  would negotiate with INSLAW to purchase any  privately
financed  enhancements that it desired to keep  in  the  software
deliverable  under the contract. (Hamilton, T. 171;  Merrill,  T.
792-793; Gizzarelli, T. 534; Sherzer, T. 977-979; PX 341  [Tyson]
at  pp. 205-207, 212-214; PX 336 [Snider] at pp. 91-96; PX 70; PX
     As  of  the  time  of Videnieks' letter,  INSLAW  was  fully
prepared to delete any or all enhancements that DOJ indicated  it
did  not  desire pursuant to the process laid out  in  Videnieks'
letter. (Hamilton, T. 172-173; Merrill, T. 793)
     William  Snider,  Administrative  Counsel  for  the  Justice
Management   Division   ("JMD")  and  a   prime   negotiator   of
Modification 12, understood that Modification 12 was intended  to
implement  Videnieks'  letter of  March  18  and  the  intent  to
negotiate on proprietary enhancements stated in that letter.  (PX
336  [Snider]  at  pp. 7, 90-96) In that regard,  Snider  further
understood  that if DOJ wanted INSLAW's proprietary enhancements,
then  it would pay INSLAW for such enhancements. (PX 336 [Snider]
at  pp. 91-96) Indeed, Snider had informed INSLAW representatives
at  a meeting prior to the execution of Modification 12 that  DOJ
would  negotiate compensation to INSLAW for all such enhancements
that  DOJ  wished  to use. (Hamilton, T. 177;  Sherzer,  T.  977;
Merrill, T. 790-791)
     In  fact, however, notwithstanding the obligation of DOJ  to
negotiate  in  good faith, Brewer had no intention to  negotiate.
Indeed,   Videnieks,   Rugh  and  Brewer   all   testified   that
notwithstanding Modification 12, they had no understanding of any
obligation on DOJ's part to negotiate with INSLAW concerning  the
time-sharing or any other PROMIS software. (PX 324 [Brewer] at p.
163; Brewer, T. 1691-1693) Brewer had discussed his understanding
of  Modification 12 with a number of people at DOJ and his  views
in  that  regard were shared by Brewer's staff and by  Videnieks.
(PX  324  [Brewer]  at  pp. 163-164) This glaring  admission  was
ignored  totally in the Bua Report, since this admission made  at
the   time   of  the  trial  totally  contradicts  the  purported
statements  made by these individuals to the authors of  the  Bua
Report  in  their post hoc interviews. Given the  fact  of  these
admissions  and  the  fact  that  DOJ's  actions  subsequent   to
Modification  12  were  consistent with  the  admissions,  it  is
impossible  to conclude that DOJ's conduct was not taken  in  bad
faith. Moreover, this conduct at a minimum was a violation of the
contractual obligations of DOJ under Modification 12 to negotiate
in good faith.
     In   reviewing  the  entire  factual  record,  Judge  Bryant
     Once  the software was in the possession of DOJ,  there
     is  no evidence that the government ever negotiated  in
     good  faith  over  the  existence  of  the  proprietary
     enhancements claimed by INSLAW. The DOJ put the  entire
     onus              of              proof              on
     INSLAW,  yet never indicated what methodology or  proof
     would  be acceptable. The contract entered into by  the
     parties  entitled  the government  to  the  version  of
     PROMIS then in the public domain. _The expert witnesses
     demonstrate  that INSLAW did enhance the software  with
     private  funds.  By  failing to acknowledge  or  accept
     INSLAW's   claims.   the   government   continued   its
     fraudulent   behavior  toward  INSLAW.  This   behavior
     persisted  long after INSLAW filed for reorganization_.
     (Emphasis added.) (D. Ct. Mem. Op., p. 40)
     In  the  face  of the factual record before the two  federal
courts, it is impossible to conclude that DOJ acted other than in
bad  faith.  Most  of  the  conduct  of  its  key  employees   is
indefensible.  Its failure to investigate the assertion  of  bias
also  is  indefensible.  Its repeated  false  representations  to
INSLAW's  attorneys,  as described in detail  by  the  two  lower
courts, is inexcusable. As Judge Bryant found:
     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  deposition 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. (D. Ct. Mem. Op., p. 36)
     Even the most cursory examination of the record leads to the
inescapable conclusion of bad faith on the part of DOJ.  The  Bua
Report's  contrary conclusion, based upon its long-after-the-fact
"demeanor"  interviews of the DOJ employees responsible  for  the
bad faith, is simply ridiculous.
          4.   The Implementation and Use of the PROMIS
               Software Beyond the 20 Offices
     Under  Modification  12,  DOJ  agreed  that  it  would   not
distribute  the  software received under the Modification  beyond
the  offices  enumerated under the contract. Subsequent  thereto,
DOJ  began  to  install this software beyond the 20  offices  for
which the software was designated. The Bua Report concluded  that
it  was  neither  improper nor unreasonable  for  DOJ  to  "self"
install PROMIS beyond the 20 larger offices designated to receive
this  version  of  PROMIS under the contract.  Once  again,  this
conclusion  is  belied  by any responsible understanding  of  the
contract  and the circumstances under which Modification  12  was
     The  contract between INSLAW and DOJ involved two  separate,
severable, and clearly
     distinguishable tasks:
     1.   To  create, generate and implement software to  be
          used  on computers ("the computer-based software")
          at  20  designated larger U.S. Attorney's  Offices
          (with  an  option, admittedly never exercised,  to
          expand this use, to up to thirty offices)
     2.   To create, generate and implement a different kind
          of   software   to  be  used  on  specified   word
          processing  equipment ("the word processing  based
          software")  at  some  74 smaller  U.S.  Attorneys'
          Offices. (PX 17)
     Thus, Paragraph 1.2 of the contract provides in part:
     1.2  The Contractor shall implement PROMIS software and
          procedures  as  modified for the  U.S.  Attorney's
          environment on Government furnished mini-computers
          located  in  the  larger U.S. Attorneys'  Offices.
          Case tracking systems that have been developed  to
          operate  on  Government furnished word  processing
          equipment  shall be installed in the smaller  U.S.
          Attorneys' Offices....
     The  parties  clearly  understood that these  were  separate
tasks, and required the development and creation by INSLAW of two
different  and  distinguishable kinds of  software,  each  to  be
implemented only within the designated types of offices specified
in  the  contract for that particular kind of software.  (PX  324
[Brewer]  at pp. 215-217; Snider 54-56; Gizzarelli, T. 479,  488,
494-495; PX 341 [Tyson] at p. 41; Hamilton, T. 110-111,115,  132-
134; Merrill, T. 770-771)
     The  computer-based software generated  for  the  20  larger
computer-site offices, as specified in the contract,  was  to  be
used  only  at  those  offices, and  the  word  processing  based
software  to be developed and created by INSLAW was  to  be  used
only  at  the 74 smaller offices. (Hamilton, T. 132-134; Merrill,
T.  764; Gizzarelli, T. 488, 497-499; PX 324 [Brewer] at pp. 215-
216)  At  no time during any meeting, either before or after  the
contract  was signed, did anyone from DOJ inform INSLAW that  DOJ
believed  that the computer-based software could be  used  beyond
these  20  offices.  (Merrill, T.  770;  Hamilton,  T.  134)  The
contract  did  provide,  however,  that  DOJ  could  extend   the
implementation  of  computer-based PROMIS  to  an  additional  10
offices  at an added price which the contract specified (and  the
parties  understood)  would be negotiated  between  the  parties.
(Hamilton, T. 124; PX 17; Merrill, T. 769-770; Gizzarelli, T. 496-
499; PX 324 [Brewer] at pp. 215-216)
     In effect, it was as if there were two contracts calling for
two types of software to be delivered to two types of offices,  a
fact  clearly understood by DOJ. (Hamilton, T. 110-111,  132-134;
Merrill,  T. 764; Gizzarelli, T. 488, 494, 497-499) At  the  time
that  Modification 12 was executed, both aspects of the  contract
were  still operative. Modification 12 required INSLAW to produce
all  "computer  programs" and documentation for the  time-sharing
version,  the  computer-based version, and  the  word  processing
based  version. (Merrill, T. 786; Sherzer, T. 980;  Hamilton,  T.
152, 2583-2588) DOJ never told INSLAW that it was not required to
produce  all  of  this under Modification 12 or that  INSLAW  was
producing too much. (Merrill, T. 787)
     Contrary  to  the  mindless conclusion reached  by  the  Bua
Report,   the  provisions  of  Modification  12  must   be   read
consistently  with  the existing contract,  the  terms  of  which
(Modification   12  unequivocally  states)  were  not   otherwise
changed.  (Gizzarelli,  T. 535; Sherzer,  T.  1030)  Thus,  DOJ's
agreement  not to disseminate or use the software beyond  the  94
offices  has to be read in the context of the two contract  tasks
that  existed  at  that time. This means that the  computer-based
software  would  not  be disseminated beyond  the  20  designated
larger  offices  for which this software was  being  created  and
developed,  and the word processing based software would  not  be
disseminated  beyond  the  74 offices  for  which  that  type  of
software                                                      was
being  created  and  developed. (Merrill, T.  787-788;  Hamilton,
T. 177-178; Gizzarelli, T. 535)
     Contrary  to  the  baseless assertions in  the  Bua  Report,
Modification 12 sought to effect delivery to DOJ of all  computer
programs  developed  under  the contract,  as  well  as  INSLAW's
proprietary  enhancements then incorporated in the software.  The
statement  of  work defines the software for the word  processing
machines   as   computer  programs,  (Hamilton,  T.   2583)   and
subparagraphs 3 and 5 of Modification 12 specify the delivery  of
software for operation on word processing machines (Hamilton,  T.
2584-2586). In addition, Modification 12 was directly related  to
and fully embodies the process and intent of Videnieks' letter of
March  18,  1983.  (Hamilton,  T. 173;  Gizzarelli,  T.  535-536;
Merrill, T. 793-794; PX 336 [Snider] at pp. 7, 90-96)
     Subsequently,  when  DOJ unilaterally  terminated  the  word
processing  part  of  the  contract for the  convenience  of  the
Government  following the execution of Modification  12,  the  74
word  processing offices dropped out, and all that remained  were
the 20 offices that were to receive the computer-based version of
PROMIS  (plus  the  never-exercised option to extend  the  latter
version to ten additional offices at additional cost). At no time
had  anyone from DOJ informed INSLAW that it was DOJ's  intention
to  implement  PROMIS  beyond the 20  offices  specified  in  the
contract.  Thus,  only  these 20 offices  were  among  those  the
parties contemplated would receive the computer-based PROMIS, and
it  was only these offices that could receive the INSLAW software
until   the  data  rights  issue  was  resolved.  No   one   ever
contemplated  that  DOJ would have the right to  disseminate  the
computer-based software beyond the 20 offices, and most certainly
not while there was still a dispute over the ownership rights  in
that software.
     Finally, whether DOJ had the right to implement the software
beyond  the 20 offices, while clearly relevant in the context  of
an  automatic stay bankruptcy proceeding, is not relevant to  the
more  important question of whether DOJ had the right to continue
to  use the proprietary software, without compensation to INSLAW,
after  the  data rights issue was determined in favor of  INSLAW.
During  the  course  of  the  bankruptcy  proceedings,  extensive
evidence was introduced that demonstrated that the software  used
by  DOJ was the proprietary, non-public domain version created by
INSLAW  using  non-government funding, and that this  proprietary
software  was not deliverable under the contract. Thus,  even  if
DOJ had the right to use the software until the data rights issue
was  resolved, once that issue was resolved by the court in favor
of  INSLAW,  DOJ  no longer could continue to  use  the  software
without appropriate payment to INSLAW. Even DOJ has conceded that
its  right to use the software under Modification 12 was  limited
to  the period of time during which the parties were required  to
negotiate the data rights issue. DOJ understood that it could not
continue  to  keep  the  software  to  the  extent  it  contained
proprietary enhancements without paying INSLAW for the  right  to
do  so.  Yet,  notwithstanding  the  extensive  findings  of  the
bankruptcy  court, as affirmed in total by the  federal  district
court,  that  the  software used by DOJ  rightfully  belonged  to
INSLAW  and  that DOJ was not entitled to use that software,  DOJ
has continued to use the software without compensating INSLAW


     The  Bua  Report  devotes 41 pages to  an  analysis  of  the
factual underpinnings of the bankruptcy court's findings  in  the
"Independent Handling" proceeding.
     The  Independent Handling proceeding in the Spring  of  1987
arose  from INSLAW's request to the bankruptcy court to  insulate
the  handling  of the INSLAW Chapter 11 reorganization  by  DOJ's
U.S. Trustee's program from improper influence by DOJ's Executive
Office  for U.S. Attorneys. Such improper influence was reflected
in  the  contemporaneous  handwritten notes  of  DOJ  Contracting
Officer  Peter  Videnieks that INSLAW obtained during  the  first
quarter of 1987 in litigation discovery.
     A  separate adversarial hearing ensued on this subject,  and
the  bankruptcy  court  found that DOJ officials  had,  in  fact,
secretly  attempted  in 1985 forcibly to convert  INSLAW  from  a
Chapter  11 reorganization into a Chapter 7 liquidation in  order
to  prevent INSLAW from seeking redress in the courts  for  DOJ's
theft of the PROMIS software in April 1983.
     While noting that the covert DOJ liquidation effort was "not
free   from   doubt,"  the  report  concludes   that   there   is
"insufficient evidence to support a finding that DOJ  planned  or
attempted to convert the Inslaw bankruptcy case or engaged in any
cover-up  to  conceal the conduct alleged." This portion  of  the
report  demonstrates,  once again, that the  Bua  investigation's
focus and, indeed, its predisposition, was not to investigate DOJ
wrongdoing  previously demonstrated to two courts  through  fully
litigated  factual  findings,  but,  instead,  to  justify  DOJ's
conduct and exonerate the wrongdoers.
     The  report correctly states that INSLAW's evidence  in  the
proceeding consisted essentially of six parts: (1) statements and
testimony  by  Anthony Pasciuto, then Deputy  Director  of  DOJ's
Executive  Office  for  U.S. Trustees; (2) handwritten  notes  of
Peter  Videnieks',  DOJ's  Contracting  Officer  for  the  INSLAW
contract;  (3)  testimony and notes of Gregory McKain,  a  senior
INSLAW computer software engineer; (4) evidence that U.S. Trustee
William  White requested that the bankruptcy court  add  language
barring  him  from  disclosing  INSLAW  data  to  anyone  at  the
Executive Office for U.S. Trustees; (5) statements and deposition
testimony of U.S. Bankruptcy Judge Cornelius Blackshear; and  (6)
evidence regarding the planned transfer of Assistant U.S. Trustee
Harry  Jones  from New York to Washington to work on  the  INSLAW
     The  core  of the bankruptcy court's findings rests  on  the
intertwined  relationship between the Videnieks notes,  Rugh  and
McKain's   testimony,   and  McKain's   notes.   Videnieks   made
contemporaneous  notes of a telephone conversation  he  had  with
Brewer's  deputy, Jack Rugh, on February 20, 1985 (13 days  after
INSLAW filed its Chapter 11 petition):
     JR  called  re[garding] "our computer". Brick  [Brewer]
     talked to Stanton . . . "No way "11"-will be "7".  Need
     home for computer.
     Videnieks'  notes document a conversation  with  "JR"  [Jack
Rugh] and what Rugh, a computer system executive for EOUSA,  said
"re[garding]  our computer. "8 The words following "Brick  talked
to Stanton. . ." are a quote of what Stanton, the Director of the
Executive  Office  for U.S. Trustees, said. Quotation  marks  are
used to bracket what Stanton said: "no way '11' -will be '7'." It
cannot  reasonably  be inferred, as the Bua investigators  infer,
that these four prefatory words in a seamless line of thought and
preceding  an  obvious quote of Stanton are somehow  disconnected
from  the  quote  they  precede.  As  justification  for  such  a
conclusion,  the report cites "a space in the notes  between  the
words 'Brick talked to Stanton' and the words 'no way 11 will  be
7'."  In  fact,  there are three dots after the  word  "Stanton,"
indicating all the more that the phrases following are quotes and
are connected to the rest of the conversation.
     Rugh  testified that the notes correctly summarized what  he
had told Videnieks, but that the statement "No way 11-will be  7"
represented  merely his own personal view that  INSLAW  would  be
liquidated and not something Brewer had told him as a  result  of
Brewer's  conversation with Stanton. Rugh  also  testified  about
subsequently calling INSLAW's McKain and telling him that he  did
not  think  INSLAW  would survive in bankruptcy,  and  trying  to
arrange for the future hiring of McKain by DOJ.
     McKain testified, however, that Rugh told him that they  had
"talked  to  the trustees" and that the trustees said INSLAW  was
not going to make it and that INSLAW would be out of business  in
30 to 60 days. McKain made contemporaneous notes which were fully
consistent with his testimony. Moreover, he acted immediately  in
a  manner consistent only with his version of events: He went  to
Mr.  Hamilton  and  repeated what Rugh had told  him,  and  asked
whether  this was true. Incensed, Hamilton, in turn, had  counsel
contact the local U.S. Trustee, who said that he had not made any
such prediction, that it must have come from the Executive Office
for  U.S.  Trustees, i.e., from Stanton's office.  Although  Rugh
acknowledged that he may have mentioned talking to the  trustees,
he categorically denied telling McKain that the trustees had said
INSLAW would likely be liquidated in 30 to 60 days.

     The  bankruptcy  court  was thus presented  with  a  classic
credibility  conflict:  Rugh's testimony and  McKain's  testimony
were irreconcilable. The court found that McKain was telling  the
truth  and  that Rugh was lying. This conclusion  was  based  not
simply  upon  the  court's assessment of the witnesses'  relative
courtroom  demeanor, but also upon the corroboration of  McKain's
version provided by his consistent contemporaneous notes and  his
and  Hamilton's unmistakably consistent actions: having  INSLAW's
counsel  contact and complain to the U.S. Trustee.  If,  as  Rugh
maintained, Rugh had merely said that he thought that the company
be   liquidated,   INSLAW  might  have   complained   to   Rugh's
superior, Brewer, or to the bankruptcy court, but not to the U.S.
     The   testimony  by  Rugh  that  his  statements  to  McKain
represented  only  his  "personal view"  that  INSLAW  would  not
survive -- as opposed to what Brewer had told him as a result  of
his discussion with Stanton -- was extremely suspect on its face.
Rugh  is a non-lawyer who acknowledged that he had known of  only
one  or  two  prior bankruptcy cases in his life.  It  is  surely
unlikely that Rugh would have taken the step of contacting one of
INSLAW's chief computer software engineers and offering him a job
based only on his own layman's opinion that the company would not
survive.  In  addition,  Videnieks' notes contain  the  statement
"need home for computer." This reflects a seeming certainty  that
INSLAW  would be put out of business imminently -- prompting  the
need for Rugh or someone in EOUSA to take action to arrange a new
site  for  the DOJ computer then being used to operate PROMIS  in
the  U.S.  Attorney's Office for the District  of  Maryland  from
INSLAW's Maryland computer center.
     Finally,  it  was  the threatened immediacy  of  liquidation
forecast by Rugh that provoked such an intense response by McKain
and,  in  turn,  by Hamilton. Liquidation in 30 to  60  days  was
completely   inconsistent  with  the   briefing   from   INSLAW's
bankruptcy  counsel  that  McKain and all  INSLAW  employees  had
received only days before, to the effect that INSLAW could expect
to  operate  normally during the Chapter 11 Reorganization.  Now,
according to Rugh, the employees would be out of work in 30 to 60
days.  Even if it were plausible that Rugh had merely stated  his
"personal  view" about eventual liquidation, the notion  that  he
also expressed his "personal view" that it would happen in 30  to
60 days is simply inconceivable. Yet, if Rugh had not stated that
liquidation would likely occur very soon, McKain would  not  have
reacted as he did.
     The   bankruptcy  court's  resolution  of  the   Rugh-McKain
credibility  dispute  is thus solidly grounded  on  corroborating
evidence.  It  is  obvious that both McKain  and  Rugh  gave  the
testimony at issue under oath and subject to cross-examination in
a  courtroom  before a fact finder. It is hardly appropriate  for
Special Counsel Bua -- on the basis of interviews of some of  the
witnesses  (McKain was not interviewed) five years  removed  from
that  courtroom -- to opine that had he been there, he would have
resolved the dispute differently. That he would undertake  to  do
so,  reflects a transparent effort to exonerate DOJ, whatever the
evidence. For example, the report argues that "there is  no  more
reason  to think that Rugh is lying about this than there  is  to
think that McKain is." It further states, "If Rugh can be said to
have lied to help his employer, DOJ, it is equally plausible that
McKain  lied  to  help his employer, INSLAW." This  statement  is
preposterous on its face. McKain's actions were taken in 1985, in
response to a call from Rugh, documented by contemporaneous notes
and  corroborated  by  the  undisputed actions  of  his  employer
promptly thereafter. All of this occurred long before INSLAW  had
knowledge  of  any basis for a lawsuit against DOJ.  Accordingly,
these  statements in the Bua Report are not only  unfounded,  but
they  also  represent  a crude and totally unwarranted  smear  of
     The  bankruptcy court's findings on the Rugh-McKain conflict
buttress the court's other findings. The conclusion that Rugh,  a
subordinate non-lawyer, knowingly gave false testimony about  his
call to McKain to conceal the truth, supports the conclusion that
it is likely that Stanton did make a commitment to Brewer to seek
INSLAW's    liquidation   despite   both   of   their    denials.
Stanton's  actions  in  trying to bring  Assistant  U.S.  Trustee
Harry  Jones  from  New York to work on the case  were  certainly
consistent  with  such a commitment. The court's conclusion  that
Judge  Blackshear's testimony at his initial deposition,  and  in
his  statements  in his three prior telephone conversations  with
INSLAW's  attorneys and another judge -- that White had told  him
that  Stanton  was  going  to ask him  to  send  Harry  Jones  to
Washington to seek conversion of the INSLAW case -- was  truthful
and  that  his two subsequent recantations were not truthful,  is
also  supported  by the finding that Rugh falsely denied  telling
McKain that the trustees had said INSLAW would be out of business
     The  Bua  Report's treatment of the Pasciuto testimony  also
reflects  an  apparent preconception. It is perhaps difficult  to
fully  perceive  from the cold record Pasciuto's evident  anguish
and  emotional turmoil in the courtroom. He was, at the  time  of
his  testimony, Deputy Director of the Executive Office for  U.S.
Trustees.  Out  of  conscience, he  had  secretly  met  with  the
Hamiltons  and  told them of the scheme to liquidate  INSLAW  two
years before, expecting that his friends, William White and Judge
Blackshear, both then no longer employed by the Trustees' Office,
would candidly support his statements. While Blackshear initially
did  support Pasciuto's testimony, he quickly recanted, and White
denied  any knowledge of such a scheme. Thus, at the time of  his
testimony,  Pasciuto, who was still employed at  DOJ's  Executive
Office  for U.S. Trustees, had the worst of all possible  worlds:
being  exposed as a "whistle blower" to his boss and  being  left
out on a testimonial limb with no corroborative support.
     INSLAW's trial team included former federal prosecutors with
well  over  sixty  years  of active trial experience.  Pasciuto's
testimony  was some of the most dramatic these lawyers  had  ever
observed  in  a courtroom. When confronted with the fact  of  his
secret  meeting with the Hamiltons, Pasciuto first  admitted  the
meeting  and  then  said  he  could not  recall  making  the  key
statements  he had made. He wondered aloud whether the  Hamiltons
had tape recorded the session.
     The Hamiltons had not. He said he had met with the Hamiltons
to  hurt Stanton, whom he disliked. Finally, when confronted with
the fact that he had made the same statements at a meeting with a
judge,  the Honorable Lawrence Pierce of the United States  Court
of  Appeals for the Second Circuit, Pasciuto admitted that he had
made  the statements. Ultimately, the bankruptcy court ruled that
Pasciuto's hearsay statements were inadmissible. Yet no  one  who
was  in  the  courtroom  when he testified  could  fail  to  have
concluded that something was terribly wrong at DOJ.
     That  conclusion was enhanced by DOJ's subsequent  treatment
of  Pasciuto.  An  investigation by DOJ's Office of  Professional
Responsibility ("OPR"), incredibly, found that but for Pasciuto's
conduct,  "the  department would be in a much  better  litigation
posture,"  and concluded that he should be fired. Eventually,  he
was  allowed  to  resign.  Before the  Congressional  committees,
Pasciuto  maintained that he had told the Hamiltons the truth  in
the  first place, and had backed away from it because of pressure
from  DOJ  and  fear  of  losing his  job.  The  House  Judiciary
Committee's  Investigative Report had criticized OPR's  treatment
of  the  Pasciuto case. The Bua Report rejects this criticism  of
OPR,  opining  that  Pasciuto only professed  to  have  told  the
Hamiltons   the   truth   when  he  was   confronted   by   OPR's
recommendation that he be fired for having set out  to  hurt  his
superior, Stanton, by making false statements to the Hamiltons.
     Pasciuto's   conduct,  his  testimony,  and  his  subsequent
recantation  are most logically explained by fear: fear  that  he
would  not get the promotion he had long sought and fear that  he
would  be fired for telling the truth, as he eventually was.  The
claim that he made it all up to hurt Stanton is, in light of  the
corroborating evidence which exists, obviously false, as Pasciuto
now  acknowledges. For OPR to accept this claim  and  proceed  to
recommend the disciplinary action of termination based on it, was
a charade -- designed to avoid the politically unpleasant task of
investigating  the  more serious wrongdoing that  the  underlying
situation reflected.
     In  1987,  the year the bankruptcy court released  its  oral
opinion  adverse to DOJ, three Presidential $20,000  awards  were
made to Senior Executive Service employees at DOJ. One award went
to  Stuart  Schiffer,  at  the time a Deputy  Assistant  Attorney
General  in  the  Civil Division who had been criticized  by  the
bankruptcy court in the INSLAW litigation against DOJ.  A  second
award went to Michael Shaheen, head of OPR and the author of  the
December   23,  1987  report  recommending  the  termination   of
Pasciuto. A separate $10,000 award, also one of three in DOJ  for
the year 1987, was given to Lawrence McWhorter, an EOUSA official
who  hired Brewer and whose testimony the bankruptcy court  found
"totally unbelievable." McWhorter was also promoted that year  to
Director of EOUSA. Thus, more than half -- $50,000 out of a total
of  $90,000  --  available for distribution to senior  executives
within  DOJ  for  the year -- was distributed  to  key  officials
involved in maintaining DOJ's claim of a lack of wrongdoing. This
startling fact is not mentioned in the Bua Report.


     A.   Bua's   Investigation  of  the   Alleged   Justice
          Department   Distribution   of   INSLAW's   PROMIS
          Software  to  U.S. Government Law Enforcement  and
          Intelligence   Agencies,  Other  Than   the   U.S.
          Attorneys' Offices
     A  significant number of individuals, some employed  by  the
Department of Justice (DOJ), and others with claimed associations
with  United States and/or Israeli intelligence, have told INSLAW
that  its  PROMIS  software has been implemented  throughout  the
United  States  Government  as the  de  facto  standard  database
management software system for the U.S. intelligence community.
     Among the agencies allegedly using PROMIS as their principal
case  tracking  and workflow management software system  are  the
Federal  Bureau  of  Investigation (FBI),  the  Drug  Enforcement
Agency  (DEA),  and the U.S. Marshal's Service,  all  within  DOJ
itself;  and the Central Intelligence Agency (CIA), the  National
Security Agency (NSA), the Defense Intelligence Agency (DIA), and
the White House National Security Council (NSC).
     In January 1992, INSLAW summarized these claims in a written
submission to Bua in which INSLAW identified many of the  sources
of  the allegations and also described other informants who  were
unwilling  to be identified unless assured of protection  against
     Since  January  1992, INSLAW has been  told  by  still  more
witnesses,  including additional current or former DOJ employees,
that  these  basic facts not only are true, but also  are  widely
known  to be true among the Senior Executive Service (SES) career
officials in DOJ and the FBI.
     Several sources have even claimed that the U.S. intelligence
and  law enforcement agencies regularly exchange data from  their
respective   PROMIS-based  systems  via  remote  access   through
computer  terminals equipped with both traditional communications
modems and classified encoding equipment.
     At   least  two  journalists,  Richard  Fricker  and  George
Williamson,  have told INSLAW that current or former senior-level
CIA  officials  have  confirmed to them that  the  CIA  is  using
INSLAW's  PROMIS software and that the CIA obtained  PROMIS  from
DOJ.  In the January 1993 issue of the national computer industry
magazine,  Wired, Richard Fricker quotes from his interview  with
an  unnamed former senior CIA administrator who claimed  to  have
first-hand knowledge of these facts:
     "On  Nov.  20,  1990, the Judiciary Committee  wrote  a
     letter asking CIA director William Webster to help  the
     committee  'by  determining whether  the  CIA  has  the
     PROMIS software.'
     "The  official reply on December 11th: 'We have checked
     with  Agency  components  that  track  data  processing
     procurement  or that would be likely users  of  PROMIS,
     and we have been unable to find any indication that the
     Agency ever obtained PROMIS software.'
     "But  a  retired  CIA  official whose  job  it  was  to
     investigate  the  Inslaw  allegations  internally  told
     Wired that the DOJ gave PROMIS to the CIA. 'Well,'  the
     retired   official   told  Wired,  'the   congressional
     committees were after us to look into allegations  that
     somehow the agency had been culpable of what would have
     been,  in  essence, taking advantage of, like stealing,
     the technology [PROMIS] We looked into it and there was
     enough to it, the agency had been involved.'
     "How  was  the  CIA  involved? According  to  the  same
     source,  who  requested anonymity, the agency  accepted
     stolen  goods,  not  aware that  a  major  scandal  was
     brewing.  In other words, the DOJ robbed the bank,  and
     the CIA took a share of the plunder."
     In  its  September  1992 Investigative  Report,  The  INSLAW
Affair,  the  House  Judiciary Committee reported  that  the  CIA
finally  admitted  having a software product  called  PROMIS  but
claimed  that  the  CIA's  PROMIS  was  purchased  from  a  small
Cambridge,  Massachusetts,  software  company  called   Strategic
Software   Planning   Corporation.9  That  company   acknowledges
marketing  and  supporting a software product called  PROMIS  for
project  management in the construction industry.  The  CIA  also
disclosed  that  the PROMIS software it claims to  have  acquired
from   the   Cambridge,   Massachusetts,  company   included   an
"Intelligence   Report   System,"  a   curious   capability   for
construction  industry project management software.  This  latter
CIA  disclosure was contained in a letter to Mr. Terry D. Miller,
the President of Government Sales Consultants, Inc., on April  5,
     Bua  apparently made no effort to test the CIA's denial that
its  PROMIS software product is based on INSLAW's PROMIS. Neither
apparently  did he examine the claims that copies of PROMIS  have
been implemented in the DIA and the National Security Council  of
the White House.

     Bua did make very limited inquiries about the alleged use of
INSLAW's  PROMIS by the DEA and the FBI within DOJ,  and  by  the
NSA. However, Bua does not appear to have brought any of the U.S.
Government officials he contacted on this matter before the grand
jury or even to have placed them under oath. Neither did Bua have
anyone  attempt  to  verify the denials  of  these  officials  by
comparing the source code in INSLAW's PROMIS with the source code
of the suspected cloned software systems.
          1.   The    Implausibility   That   the   Two
               Principal  DOJ  Investigative  Agencies,
               the  DEA  and the FBI, Would  Each  Have
               Developed   a   Complex   On-line   Case
               Tracking and Workflow Management  System
               In-House at Approximately the Same Time.
     Before  discussing Bua's very limited investigation  of  the
DEA, the FBI, and the NSA, it is important to understand that the
odds  against  a  federal agency developing  internally,  without
contractor  assistance, a complex, on-line software system,  such
as a case tracking and workflow management system, are very high.
The  odds  against two separate agencies of the same  department,
such  as  the  FBI  and  the DEA within DOJ,  each  developing  a
complex,  on-line case tracking system are even higher.  Finally,
the odds against two such agencies developing the same kind of on-
line  case  tracking system in-house at virtually the same  time,
i.e., during 1988 and 1989, are higher still.
     Before considering claims from former and current senior DOJ
officials  that  both  the DEA and the FBI  have  been  operating
INSLAW's  PROMIS  software  since the  late  1980's,  and  before
examining  apparent inconsistencies, contradictions and  possible
dissembling  in the statements made by DEA and FBI  officials  on
this subject, one should keep in mind that the backdrop for their
statements is the highly implausible scenario just described.
          2.   Indications  of Possible Dissembling  to
               Bua by a Key DEA Official
     Bua  apparently  never questioned Carl Jackson,  a  recently
retired  DEA deputy assistant administrator, about DEA's  alleged
use  of  PROMIS,  even  though the September  1992  Investigative
Report by the House Judiciary Committee identified Jackson as the
source of allegations that the DEA had implemented PROMIS.
     Bua did, however, ask DEA Deputy Assistant Administrator for
Information  Systems  Phillip  Cammera,  whether  the   DEA   had
implemented  a  PROMIS-derivative case tracking  system.  Cammera
assured  Bua  that the DEA had developed in-house its  new  case-
tracking  system  called  Case Status System  (CAST).  The  House
Judiciary Committee reported that CAST was developed in the 1988-
1989 time-frame.

     Cammera  told a different story in late 1990, however,  when
he  was  contacted  by  a former colleague,  retired  DEA  Deputy
Assistant  Administrator Carl Jackson.10 According  to  Jackson's
contemporaneous  account  to Mr. and  Mrs.  Hamilton  of  INSLAW,
Cammera  confirmed  Jackson's  own recollection  on  the  matter.
Jackson's recollection is that the Attorney General of the United
States issued "non-negotiable" orders to both the DEA and the FBI
in  the  summer  of 1988 to "chuck" their existing case  tracking
systems  and replace them with PROMIS, and that the DEA at  least
carried out the orders in the 1988-1989 time frame.
     Jackson  told the Hamiltons in 1990 that he had  no  way  of
verifying whether the FBI had implemented PROMIS as the  DEA  had
done,  but that he would have been surprised if the FBI  had  not
implemented  PROMIS  because the Attorney  General  had  made  it
explicitly clear that the orders were "non-negotiable."
          3.   Indications  of Possible Dissembling  to
               Bua by the FBI
     In  January 1992, INSLAW informed Bua in writing that it had
a  source, described as a current senior DOJ career official, who
claims to have been told that the FBI did, in fact, at some point
in  the  late  1980s  implement PROMIS as its investigative  case
management  system. The FBI calls its system FOIMS (Field  Office
Information  Management  System). INSLAW's  source,  who  is  not
willing  to  be  identified unless there is  a  guarantee  of  no
reprisal,  claimed to have been told directly by John Otto,  then
one  of the top FBI officials, that the current version of  FOIMS
is  based  on PROMIS. Otto served as Acting Director of  the  FBI
between  the  departure of William Webster  and  the  arrival  of
William Sessions.
     Bua  interviewed Otto, who had since retired from  the  FBI,
but  apparently did not place Otto under oath or bring him before
the  grand jury. According to Bua, Otto flatly denied the account
given  to  INSLAW by the current senior DOJ career official.  Bua
simply  accepted Otto's non-sworn denial as well as Otto's  claim
that  he  is virtually "computer illiterate" and therefore  could
not  have  been  engaged in the kind of conversation  claimed  by
INSLAW's  confidential DOJ source. Had Bua  attempted  to  verify
Otto's  claim  of  computer illiteracy, however,  he  would  have
learned that it is a highly implausible claim. For example,  Otto
had  direct  management responsibility within the  FBI  for  both
FOIMS  and  the  nationwide UCR (Uniform  Crime  Report)  system,
including  the  computer software that is at the heart  of  these
systems. Moreover, until the radical FOIMS software transplant of
June   1988,  the  FBI's  investigative  case  management  system
reportedly suffered from a very poor reputation among FBI agents;
Otto  would  have had management responsibility for correcting  a
software  system  problem  that  may  have  been  hampering   the
performance of the FBI mission.
     In  its  September  1992 Investigative  Report,  The  INSLAW
Affair,  the  House Judiciary Committee noted  its  inability  to
finance  the  kind of independent analysis required to  test  the
claims  that  the  FBI's FOIMS system is  based  on  PROMIS.  The
Committee             noted,            however,             that
the  question  "could  be  resolved  quickly  if  an  independent
agency or expert was commissioned to conduct a code comparison of
the PROMIS and FOIMS systems."
     FBI  Director  Sessions  wrote to  Bua  on  June  23,  1992,
agreeing  to  permit  such  an examination  of  the  FOIMS  code,
provided that the independent expert was acceptable to the FBI.
     Bua  chose  Professor  Dorothy Denning,  the  Chair  of  the
Computer  Science Department of Georgetown University. Bua  notes
in his report that "the FBI voiced no objection to our choice and
processed her security clearance."11
     In  his  report, Bua states that he provided to  Denning  "a
copy  of  INSLAW's  FOIMS analysis plan" that  detailed  how  the
developers  of PROMIS would approach the question of whether  the
FBI's FOIMS system was, in fact, based on INSLAW's PROMIS.
     One  of  the  steps suggested by INSLAW was  the  use  of  a
software routine in the IBM operating system called SUPERC  which
is  able  to  do  a  code comparison at no cost  to  the  Justice
Department,   and   the  comparison  can   be   accomplished   in
approximately  four  (4) hours. The ease and  short  time  within
which  a  code comparison could have been accomplished makes  the
failure to conduct such a comparison utterly indefensible.
     According to Bua, Denning, however, decided that the  source
code   comparison,  recommended  by  both  the  House   Judiciary
Committee  and  INSLAW, "would be a waste of  her  time  and  the
government's money."
     INSLAW  read  the  report Denning submitted  to  Bua,  which
INSLAW  obtained from FBI Director Sessions, to try to understand
the  basis  for  this  very  surprising conclusion  of  Professor
     To begin with, Denning uncritically accepted representations
by  the  FBI  about the history and technical characteristics  of
FOIMS that are contradicted by other FBI disclosures about FOIMS.
     For example, Denning accepted as fact that the original 1978
COBOL-language  version  of FOIMS was  replaced  by  the  claimed
current  NATURAL-language version of FOIMS in  1983.12  Published
data  about FOIMS from the national market research firm,  INPUT,
traces  the  current  version  of  FOIMS  to  June  1988,  rather
than  to  1983.  This  timing is consistent with  the  statements
attributed  to  John  Otto  by INSLAW's confidential  senior  DOJ
source, and also consistent with Carl Jackson's recollection that
the  FBI  had  been  ordered in the summer of 1988  to  implement
PROMIS in place of the then current version of FOIMS.
     Denning then uncritically accepted FBI representations  that
the   current  version  of  FOIMS  is  written  in  the   NATURAL
programming  language,  rather than  in  COBOL,  the  programming
language  used  in  INSLAW's  PROMIS.  As  is  evidenced  in  the
following  paragraph  and its footnote, this representation  also
appears to be contradicted by other published data on FOIMS.
     "FOIMS  now contains over 570,000 lines of code, " according
to  a June 7, 1991 letter from FBI Assistant Director Delbert  C.
Toohey  to  Mr.  Terry D. Miller, President of  Government  Sales
Consultants,  Inc.  The  claim that an application  with  570,000
lines  of code is written in the NATURAL programming language  is
"wrong  by  an  order of magnitude," according  to  Mr.  John  A.
Maguire,  the  founder and, until recently, the  Chief  Executive
Officer of Software A.G. of North America, the U.S. company  that
markets the NATURAL programming language.13
     It  is hard to escape the conclusion that the FBI dissembled
to  Denning  about the year of origin of the current  version  of
FOIMS  and  about  the  apparent use  of  the  COBOL  programming
language  in  the  current version of PROMIS  in  an  attempt  to
diminish  the credibility of the aforementioned claims  that  the
FBI  "chucked" its earlier 1983 version of FOIMS, on orders  from
the  Attorney General in the summer of 1988, and replaced it with
INSLAW's PROMIS software.
     There would be ample reason for both the FBI and the DEA  to
try  to conceal their implementations of PROMIS in 1988 and 1989.
In January 1988, the U.S. Bankruptcy Court had issued a permanent
injunction against any further unlicensed proliferation of PROMIS
by  the  U.S.  Government. If Attorney General Meese  issued  the
claimed       orders      to      the      FBI      and       the
DEA  in  the  summer  of  1988, it would  have  been  a  willful,
secret  violation  of  a federal court order  by  the  chief  law
enforcement officer of the United States.
     Denning  justified her decision not to do a code  comparison
between  FOIMS and PROMIS primarily on her professed belief  that
FOIMS  and  PROMIS each support "entirely different" "application
domains," with FOIMS tracking investigations and PROMIS  tracking
judicial  proceedings;  and  that it is  extremely  difficult  to
convert  software  that runs one application into  software  that
runs an entirely different application:
     Because  it is extremely difficult to convert  software
     that  runs one application into software that  runs  an
     entirely different application, the differences in just
     the  FOIMS  and PROMIS application domains show  almost
     conclusively  that FOIMS was not derived  from  PROMIS.
     ("Analysis of FOIMS and PROMIS," by Dorothy E. Denning,
     January 10, 1993, Page 1)
     The  aforementioned conclusions by Denning demonstrate  that
she  is  misinformed about the case management application domain
in  general and about INSLAW's PROMIS case management software in
particular.  For example, INSLAW's PROMIS software  is  currently
being  used for investigative case management by both  state  and
local   governments  and  by  nationwide  property  and  casualty
insurance  companies. Moreover, as INSLAW pointed out to  Bua  in
its  written submission of January 1992, the PROMIS software  has
been   successfully  applied  to  case  management   "application
domains"  much  more  removed from PROMIS's criminal  prosecution
"application   domain"   than  FOIMS's   criminal   investigation
"application domain." INSLAW provided to Bua the examples of  the
use  of  PROMIS  in  a  nationwide  credit  bureau  and  in  land
conveyance record keeping in the Republic of Ireland.
     Denning's analysis makes no sense whatsoever and is  totally
inappropriate given the circumstantial evidence. The  methodology
appears to be designed to rationalize and support a conclusion of
non-infringement  rather  than  the  conduct  of  an  independent
objective  analysis  of  the software  programs  in  question  to
ascertain the truth.
     Bua also addressed the question of the alleged use of PROMIS
by  the National Security Agency (NSA). Bua did confirm that  the
NSA  has a software product called PROMIS but, once again, simply
accepted  the  apparently unsworn statement of a U.S.  Government
official that the PROMIS software in question is not a derivative
of  INSLAW's  PROMIS. NSA evidently claims to  use  a  commercial
database  management  system (DBMS) called  M204,  from  Computer
Corporation  of  America, as the "engine" for its PROMIS  system,
and  to  have  written the application code, i.e., "the  car"  by
analogy, in an unspecified programming language. As with many  of
the other suspected PROMIS-clone software systems, NSA claims  to
have  developed  its PROMIS application code in house.  NSA  also
claims,  according  to  Bua, that its PROMIS  tracks  information
related  to its published intelligence reports, called "products"
by  the NSA. Without explaining the basis for his statement,  Bua
asserts   that  such  an  application  is  different   from   the
application  domain  of  PROMIS: "NSA's PROMIS  serves  different
purposes... " INSLAW's PROMIS would, in fact, be easily adaptable
to  tracking either the workflow that produces NSA's intelligence
output or the names, places, dates and events in the intelligence
reports or both.

     Bua  also dismisses the possibility that NSA's PROMIS  could
be based on INSLAW's PROMIS because INSLAW's PROMIS is "used with
a  different database." Bua is apparently referring  to  the  NSA
claim that it uses the commercial M204 DBMS as the engine for its
PROMIS application system. The choice of commercial DBMS "engine"
for PROMIS, however, has very little relevance to the question of
whether  the  application  code is a clone  of  INSLAW's  PROMIS.
INSLAW  itself has incorporated a variety of different commercial
DBMS engines into its PROMIS software. There is no difficulty  in
believing that NSA might have incorporated the M204 DBMS into its
copy of INSLAW's PROMIS or that the FBI may have incorporated the
ADABAS DBMS into its copy of INSLAW's PROMIS.
     In  actuality, NSA's admission that it too uses  a  software
product  called PROMIS and that the application domain  of  NSA's
PROMIS  has  something to do with the tracking of  its  published
intelligence information lends further plausibility to the claims
that  virtually  every major U.S. intelligence  agency  is  using
INSLAW's  PROMIS  software.  Bua, of course,  could  have  easily
resolved  the  question by arranging for a code  comparison,  but
apparently chose not to do so.
     Bua's  failure  to arrange for the code comparisons  between
INSLAW's PROMIS and its suspected clones in U.S. intelligence and
law  enforcement agencies, where his federal grand  jury's  legal
authority to conduct such investigations was obvious, is all  the
more  mystifying  in light of Bua's published statement  that  he
considered  trying to do just such code comparisons with  foreign
governments. Although a federal grand jury has no authority  over
foreign governments, Bua made the following statement about  what
he   claimed  he  considered  doing  to  check  out  the  claimed
international distribution of INSLAW's PROMIS:
     Theoretically,  we could continue our investigation  of
     this subject by contacting various foreign governments,
     asking them to provide us with the source code to their
     law enforcement software, and then hiring an expert  to
     compare that software to PROMIS.
     B.   Bua's  Investigation of the Alleged  International
          Distribution of INSLAW's PROMIS
     There are a number of individuals, with claimed ties to U.S.
and/or  foreign  intelligence agencies, who have  told  INSLAW  a
remarkably  consistent  story  about  the  alleged  international
distribution of INSLAW's PROMIS software.
     Most  of  the accounts place Earl W. Brian at the center  of
the  worldwide  sales  and distribution.  Virtually  all  of  the
sources  claim  that  U.S.  intelligence,  law  enforcement   and
national  security  agencies, including the Central  Intelligence
Agency,  the  National  Security  Agency,  the  Drug  Enforcement
Administration,  and the White House National  Security  Council,
have  supported  Brian's  worldwide  sales  and  distribution  of
PROMIS.   The  accounts  are  generally  consistent   about   the
motivations  for  the sales: (1) the personal financial  gain  of
Earl Brian and colleagues; (2) the generation of extra funds  for
financing  U.S.  covert  intelligence operations  that  the  U.S.
Congress  has declined to finance, such as the mid-1980's  covert
assistance to the Contras in Nicaragua; and (3) an initiative  to
penetrate  the  secret  files  of foreign  intelligence  and  law
enforcement  agencies by inducing them to acquire  and  implement
the   PROMIS  database  management  software  and  the  necessary
computer  hardware,  after the software and  hardware  have  been
secretly modified to permit electronic eavesdropping by the  U.S.
National Security Agency.
     One  account  even  identifies the name of  the  individual,
Lindsey,  who  was allegedly appointed by the U.S. Government  to
package  INSLAW's  PROMIS software for Brian's alleged  sales  to
such   foreign   intelligence  agencies   as   Egypt's   military
intelligence  agency. Moreover, this source claims  that  Lindsey
was instructed to package the version of INSLAW's PROMIS that the
CIA  obtained from DOJ and which has been operational within  the
CIA   ever   since   1983,  tracking  U.S.  and  foreign   covert
intelligence operations.
     Several  of the accounts claim an important role for Israeli
intelligence  in  the  international  distribution  of   INSLAW's
PROMIS, with Israel brokering the sales to countries where it has
significant   intelligence  liaison  and   influence,   such   as
Singapore, South Africa, Eastern European countries, and  Central
American countries.
     One  source  claims  personally to have participated  in  at
least   one  meeting  in  the  Justice  Command  Center  at   DOJ
headquarters   between  representatives   of   Israeli   military
intelligence  and  representatives of DOJ regarding  the  use  of
PROMIS  databases  in Israel to track terrorists  in  the  Middle
     An associate of the late journalist Danny Casolaro claims to
have  seen  U.S. Government communications intelligence documents
that  Casolaro obtained from an employee of the National Security
Agency facility in Vint Hills, Virginia, concerning the sales  of
PROMIS to Israel, Germany, South Africa and other countries,  and
concerning  the flow of the proceeds from some of  the  sales  to
bank  accounts in the Cayman Islands and in Switzerland. The  NSA
employee identified by Casolaro's associate was found murdered in
his car at National Airport in January 1991.

     Many of these sources express fear of reprisal by the United
States  Government  if  they were to come forward.  The  specific
types  of  reprisals, mentioned most often by those  who  express
fear,  are loss of security clearances vital to their employment,
and  criminal prosecution by DOJ under the espionage laws of  the
United States for disclosing U.S. national secrets.
     Bua's   consideration  of  the  claims  of  the   sale   and
distribution  of  PROMIS  to foreign governments  was  even  more
superficial than his examination of whether PROMIS is being  used
by the FBI, the DEA, and the National Security Agency.
     The  following are examples of the superficiality of the Bua
investigation  in  the  area of international  distribution:  the
alleged   distribution  of  PROMIS  to  Canada  and  the  alleged
distribution  of  PROMIS  to Israel, together  with  the  alleged
partnership between DOJ and Israeli intelligence in the theft  of
          1.   The  Alleged Distribution of  PROMIS  to
     The first information that INSLAW received about the alleged
international  distribution  of INSLAW's  PROMIS  came  from  the
Government of Canada. In telephone calls and letters in late 1990
and early l991, the Government of Canada informed INSLAW that  it
was using its PROMIS software in several departments and agencies
and  wished to learn whether INSLAW also had available a  French-
language   version   of   the  PROMIS   computer   software   and
documentation because there are two official languages in Canada,
English  and  French, and the Canadian Government at  that  point
only  had the English version of PROMIS. The Government of Canada
eventually  disclosed to INSLAW that the Royal  Canadian  Mounted
Police  (RCMP)  alone was using INSLAW's PROMIS  to  support  900
separate office locations in Canada.
     After  the U.S. media began to report on this disclosure  by
the  Government  of  Canada and on INSLAW's  claim  that  it  had
neither  sold PROMIS to Canada nor authorized others to  do  soon
its  behalf, the Government of Canada retracted its earlier  oral
and written statements to INSLAW. Canada attempted to explain the
matter  as  an  unfortunate mistake on the part of  the  Canadian
officials  who  had originally contacted INSLAW. Ultimately,  the
Government of Canada settled on the story that the Department  of
Public Works, not the RCMP, had bought the PROMIS software;  that
the  Department of Public Works had purchased only six copies  of
PROMIS, instead of 900 copies; and that the Department of  Public
Works  had  purchased PROMIS not from INSLAW, but  from  a  small
software  company  in Cambridge, Massachusetts, called  Strategic
Software  Planning  Corporation. This  Cambridge,  Massachusetts,
company is the same company that the CIA told the House Judiciary
Committee  was the source of its PROMIS software.  The  CIA  also
subsequently disclosed in an April 5, 1993 letter to Mr. Terry D.
Miller,  President  of  Government Sales  Consultants,  that  the
PROMIS  software  it obtained from the Cambridge,  Massachusetts,
company  included  an  Intelligence Report  System,  an  unlikely
subsystem  for construction industry project management,  whether
in Canada or the United States.
     The only reference that Bua makes to the Canadian lead is in
footnote  #90 on page 151 of his report, in which Bua appears  to
scold the House Judiciary Committee for failing to accept at face
value  Canada's  claims that the original disclosures  to  INSLAW
were simply an unfortunate mistake.
     Although INSLAW recognizes that Bua's federal grand jury had
no investigative jurisdiction over the Canadian Government, there
are  other  ways  for  a U.S. investigator to  have  pursued  the
Canadian  lead.  To illustrate this point, we  have  attached  as
Exhibit A a memorandum from John Belton, a former stockbroker  in
Canada who has been attempting to investigate the Canadian PROMIS
distribution  lead. In his memorandum, Belton first explains  the
history of his interaction with Earl Brian and Hadron, Inc.,  and
recounts  Brian's  claims to Belton in early 1981  that  Hadron's
future revenue stream was to come from Hadron's acquisition of  a
computer software product for the administration of justice  that
Brian   described  as  having  "great  PROMIS(E)."  Belton   then
documents the fact that three reputable Canadian journalists have
each  confirmed  to  him, based on their confidential  informants
among senior current or former RCMP officials, that the RCMP  is,
in  fact, using PROMIS, despite the Government of Canada's public
denials.  Finally,  Belton  quotes verbatim  from  his  telephone
conversations during the past year with several U.S. businessmen.
These   conversations  document  the  existence  of  a   business
relationship between Earl Brian's Hadron, Inc., and two  Canadian
computer  services  companies on a large  software  sale  to  the
Government of Canada in 1983. Belton's memorandum also summarizes
leads  that strongly suggest that these business transactions  in
1983  involved  the Privy Council of Canada and its  intelligence
and  security staff, and the acquisition of PROMIS  by  the  RCMP
under the name Police Information Records System (PIRS).
     INSLAW  told  Bua  about  Belton's  research  in  a  written
submission  to  Bua in January 1992, but Bua made no  attempt  to
interview  Belton. Instead of attempting to exculpate Earl  Brian
and  Hadron  of  any  complicity in the  theft  and  unauthorized
distribution of INSLAW's PROMIS software, Bua could have used the
federal  grand  jury  to  interrogate the U.S.  businessmen  whom
Belton  interviewed, and to compel the production of  potentially
relevant  documents by Hadron, Earl Brian and the U.S. subsidiary
of  one of the two Canadian companies that were Hadron's partners
in the 1983 software sale to Canada.
          2.   The  Alleged Distribution of  PROMIS  to
               Israel  and  The Alleged Partnership  of
               DOJ  and  Israeli  Intelligence  in  the
               Theft of PROMIS
     Bua   devotes  only  a  single  paragraph  to  the   alleged
distribution  of PROMIS to the State of Israel, even  though  Bua
characterizes   this   distribution  as   the   "one   documented
international  distribution" by DOJ of PROMIS.  Predictably,  Bua
accepts at face value DOJ's contention that the May 1983 internal
DOJ  memorandum on the distribution of PROMIS to Dr. Ben  Orr  of
Israel  was  truthful  when it memorialized the  distribution  to
Israel  of  the  earlier,  and by-then largely  obsolete,  public
domain version of PROMIS.
     The  first reason to be skeptical about the truthfulness  of
the  claim that it was the older, public domain version that  DOJ
gave   to  Israel  is  that  Israel  is  both  a  technologically
sophisticated country and a strategically important ally  of  the
United  States  and, therefore, may not have been satisfied  with
obtaining the public domain version of PROMIS in May 1983,  after
that version had already become obsolete.
     The  second reason for skepticism is that it would have been
an  admission  of  wrongdoing for DOJ to  have  memorialized  the
distribution of the proprietary version of PROMIS to  Israel.  In
April 1983, just one month before the internal DOJ memorandum  on
the                transfer               of               PROMIS
to  Israel,  DOJ  had stolen the proprietary  version  of  PROMIS
from  INSLAW "through trickery, fraud and deceit, " according  to
the  findings of the U.S . Bankruptcy Court, affirmed by the U.S.
District  Court, and confirmed and supplemented by the  September
1992  Investigative Report by the House Judiciary  Committee.  In
modifying  INSLAW's contract on April 11, 1983, DOJ had committed
itself  contractually not to distribute the  proprietary  version
outside the 22 largest U.S. Attorneys' Offices.
     The  third reason for skepticism is that DOJ did not produce
for  the  House Judiciary Committee any of the kinds  of  records
that  should  have accompanied such an international transfer  of
computer  software. Examples would be an export license from  the
Commerce  Department and documents explaining how it came  to  be
that mid-echelon DOJ officials were conveying a computer software
product to a foreign government.
     The   fourth   reason  for  skepticism   is   that   Israeli
intelligence appears to have been working hand-in-glove with  DOJ
officials  during the winter and spring of 1983 on the  theft  of
the proprietary version of PROMIS from INSLAW. DOJ, in fact, sent
a very high-level Israeli intelligence official over to INSLAW in
February 1983 for a demonstration of the very proprietary version
of PROMIS that DOJ misappropriated from INSLAW in April 1983.
     In  his  report, Bua asks "why the DOJ would go to  all  the
trouble  of  documenting the fact that it was giving  a  copy  of
PROMIS to Israel if this was some sort of covert operation."  The
answer  to  Bua's evidently rhetorical question is that  the  DOJ
actions  vis-a-vis INSLAW in the winter and spring of 1983  were,
in  fact,  apparently  part of a covert DOJ-Israeli  intelligence
operation, and the internal DOJ memorandum from May 1983  can  be
understood  as  an  integral part of  the  "trickery,  fraud  and
deceit" of the joint DOJ-Israeli intelligence covert operation.
     INSLAW discovered the apparent 1983 DOJ-Israeli intelligence
initiative  on  PROMIS by following up on leads in the  September
1992 Investigative Report by the House Judiciary Committee. These
leads were, of course, available to Bua too.
     In  February 1983, DOJ's Brewer telephoned INSLAW  President
William  Hamilton to ask if INSLAW would be willing to provide  a
technical briefing and demonstration of the PROMIS software to  a
visiting prosecutor from the Israeli Ministry of Justice.  Brewer
identified  this Israeli visitor as Dr. Ben Orr, the same  person
to  whom  DOJ  claims to have given the obsolete,  public  domain
version  of  PROMIS in May 1983, according to the contemporaneous
DOJ  memorandum.  Brewer told Hamilton that the visiting  Israeli
prosecutor  was heading a project to computerize the prosecutors'
offices in Israel.
     Following through on DOJ's request, INSLAW demonstrated  the
proprietary version of PROMIS to the Israeli visitor in  February
1983 . This is the same version of PROMIS, i. e., the version for
operation  on  Digital Equipment Corporation VAX computers,  that
DOJ  stole  from  INSLAW  in  April  1983.  The  Israeli  visitor
displayed  enthusiasm for the proprietary VAX version  of  PROMIS
when INSLAW demonstrated it to him.
     After  the  House Judiciary Committee published its  report,
INSLAW   wrote  to  the  Israeli  Ministry  of  Justice   seeking
confirmation about whether there had actually been a Dr. Ben  Orr
employed  by the Ministry in February 1983 and, if so,  where  to
find him.

     The Ministry replied by letter that there indeed had been  a
Dr.  Ben Orr employed by the Israeli Ministry of Justice in 1983,
but  that  Dr.  Ben  Orr  had  since  retired  and  is  currently
practicing law in Jerusalem.
     Working  with information supplied to INSLAW by the  Israeli
Ministry of Justice, the foreign editor of a major Israeli  daily
newspaper tracked down Dr. Ben Orr at his home in Jerusalem.  The
foreign editor described Dr. Ben Orr as tall by Israeli standards
(5'10-1/2"),  thin, having a full head of hair and  possessing  a
dignified  demeanor. Dr. Ben Orr also disclosed  to  the  foreign
editor  that  he  had  been stationed at the U.S.  Department  of
Justice  in  Washington,  DC,  for one  year  under  an  exchange
program, returning to Israel in May 1983 from his one-year  stint
in  Washington, DC. Most curiously, while the Israeli  journalist
was  visiting  him  in  his home, Dr. Ben Orr  produced  what  he
claimed was the very PROMIS computer tape given to him by DOJ  in
May  1983.  This is the kind of computer software tape  that  can
only  be operated on large and very expensive computers, not  the
kind  of  computers  one  would  expect  to  find  in  a  private
     Nothing  about  this  Dr. Ben Orr fits  the  actual  Israeli
visitor  to INSLAW in February 1983. That visitor was very  short
in  height  and quite stocky. He had a deeply receding  hairline.
His  demeanor  could  not  easily be  described  as  "dignified."
Moreover,  unlike the real Dr. Ben Orr who had  already  been  in
Washington,  DC, for the better part of one year by the  time  of
the  February 1983 visit, the Israeli visitor to INSLAW had  come
directly  from Tel Aviv to Washington, DC, after a brief  layover
in  New York City. In fact, the visitor to INSLAW telephoned from
New York City to delay the meeting at INSLAW for 24 hours because
he claimed that some friends in New York City were giving a party
in honor of his arrival in the United States from Israel.
     In retrospect, both DOJ and the visitor himself had deceived
INSLAW about the visitor's real identity.
     At  approximately the same time that INSLAW discovered  this
apparent  DOJ-Israeli  subterfuge from a decade  earlier,  INSLAW
received  a  lead that the name, Dr. Ben Orr, had, from  time  to
time, been used as a pseudonym by Rafi Eitan, a legendary Israeli
espionage  official.  Rafi Eitan was, for  example,  the  Israeli
spymaster for Jonathan Pollard, a civilian U.S. Navy intelligence
analyst convicted in 1986 of spying for the Government of Israel.
     After  locating a photograph of Rafi Eitan in a book on  the
Pollard  case,  William Hamilton recognized  Rafi  Eitan  as  the
February 1983 Israeli visitor to INSLAW.
     Immediately thereafter, INSLAW arranged for a former  INSLAW
vice  president, who had spent several hours briefing the Israeli
visitor  in  February 1983, and who knew nothing  about  INSLAW's
recent  investigation of the matter, to attempt to  identify  the
visitor  from  a  photographic line-up of six reasonably  similar
looking Caucasian males. INSLAW also arranged for the videotaping
of  the  process. The former INSLAW officer, without  hesitation,
identified  photograph #2 as the photograph of the February  1983
visitor. That, of course, was a photograph of Rafi Eitan.
     This  identification  of Rafi Eitan  as  the  February  1983
visitor  to  INSLAW  obviously increases the credibility  of  the
sworn  statements in 1991 by Ari Ben Menashe to the  effect  that
Rafi  Eitan  obtained a copy of the PROMIS software  while  on  a
visit  to  the United States in the early 1980's, and  that  Rafi
Eitan  worked  with U.S. intelligence and Earl W.  Brian  on  the
international distribution of PROMIS.
     Bua,  however, dismisses Ben Menashe as a credible  witness.
Bua contends that Ben Menashe abandoned the clear implications of
his  sworn  affidavits to INSLAW and of the chapter on PROMIS  in
his  recently  published  book, Profits  of  War,  and  cynically
confessed  to  Bua  that  he had no personal  knowledge  of  Earl
Brian's sale of INSLAW's PROMIS software. Moreover, according  to
Bua,  Ben  Menashe altered his story to say that Earl  Brian  was
selling  a  different  software product called  PROMIS  that  was
developed  by  the  National Security  Agency,  independently  of
     Ben  Menashe has denied to INSLAW that he ever made any such
statements  to Bua or Bua's staff. INSLAW has no way  of  knowing
for  certain  what Ben Menashe said or did not say  before  Bua's
federal grand jury, but it seems unlikely that Ben Menashe  would
have  made  statements to Bua that are totally inconsistent  with
his  earlier  sworn testimony both to INSLAW  and  to  the  House
Judiciary Committee, and totally inconsistent with the thrust  of
his recently published book, Profits of War.
     For  example,  in affidavits given to INSLAW  in  1991,  Ben
Menashe claims to have attended a PROMIS computer software  sales
presentation  by  Earl  Brian in 198714 to  Israeli  intelligence
agencies  in Tel Aviv. Ben Menashe further claims in these  sworn
statements  that Earl Brian stated during this sales presentation
that  the PROMIS software he was marketing to Israel was the same
PROMIS software then operating in DOJ, CIA, NSA and DIA. The  DOJ
version in 1987 could only have been INSLAW's proprietary  PROMIS
software installed in the 42 largest U.S. Attorneys' Offices.
     Ben  Menashe's  understanding that it  was  INSLAW's  PROMIS
software   that   Earl  Brian  and  Rafi  Eitan  were   marketing
internationally is also clearly evidenced in his book, Profits of
War. For example, Ben Menashe claims in the book that Rafi Eitan,
Earl   Brian,  and  Washington,  DC,  attorney  Leonard   Garment
conspired  in  1986 or 1987 to deprive INSLAW of the  ability  to
seek  redress  in  the  courts for  DOJ's  theft  of  the  PROMIS
software. Specifically, Ben Menashe claims in the book that  Rafi
Eitan  authorized the wire transfer of $600,000 from  an  Israeli
intelligence slush fund to Earl Brian's Hadron, Inc., in Fairfax,
Virginia, and that Hadron was thereafter to provide this money to
Leonard  Garment at the law firm of Dickstein, Shapiro and  Morin
in  order  to  finance that law firm's separation agreement  with
Leigh  Ratiner.  At the time of his firing by Dickstein,  Shapiro
and    Morin,   where   he   had   been   a   partner   for    10
years,   Ratiner   was  the  lead  counsel  on  INSLAW's   PROMIS
lawsuit against DOJ, which he had filed only four months before.
     In  his report, Bua refers to Ben Menashe's published  claim
of  a  payoff  which,  if true, would constitute  obstruction  of
justice.  Bua  explains, however, that he felt no  obligation  to
investigate the claim because he had decided that Ben Menashe had
very little credibility, and because he had assessed the claim as

     Even  the most cursory investigation would have contradicted
Bua's  assertion  that this claim by Ben Menashe is  implausible.
Ratiner, for example, told the Hamiltons in October 1986 that his
firing  was precipitated by his naming of Deputy Attorney General
D. Lowell Jensen in the INSLAW complaint against DOJ.
     Moreover, on October 6, 1986, the week before the law firm's
Senior  Policy  Committee met and voted to fire Ratiner,  Leonard
Garment,  a  member  of the Senior Policy Committee,  had  had  a
social lunch with Deputy Attorney General Arnold Burns15 about the
INSLAW case. Garment never disclosed the lunch at the time either
to  his  partner, Leigh Ratiner, or to INSLAW, his firm's client.
According  to  the  September 1989 Staff  Report  of  the  Senate
Permanent  Investigations Subcommittee, Burns disclosed  that  he
met  with  Garment on October 6, 1986 to signal his readiness  to
negotiate  a  settlement  on  the INSLAW  case,  as  well  as  to
criticize the litigation strategy that Ratiner was then  pursuing
in the INSLAW case.16
     After  Ratiner was fired, the law firm sent INSLAW a  letter
containing  an ultimatum that INSLAW authorize the  law  firm  to
negotiate  a settlement of INSLAW's claims, on terms proposed  in
the  letter,  or else find new litigation counsel.  The  proposed
terms  of settlement were payment of at least $1,000,000  of  the
$2,000,000  that  DOJ  had  withheld for INSLAW's  implementation
services and the acknowledgment that DOJ was not obliged  to  pay
PROMIS license fees to INSLAW. The proposed terms were strikingly
close to Deputy Attorney General Burns' terms, as implied by  his
August  1986  letter  to  Leigh  Ratiner.  INSLAW  rejected   the
ultimatum, found new litigation counsel, prosecuted and  won  the
case against DOJ at trial.
     Not  only did Garment have an undisclosed communication with
DOJ  on  INSLAW at the time of Ratiner's firing, but Garment  was
also  simultaneously representing the State of Israel in the Rafi
Eitan-Jonathan  Pollard espionage case. Although INSLAW  did  not
then  know  it, Rafi Eitan had also apparently collaborated  with
DOJ on the 1983 theft of PROMIS.
     The  Government of Israel reportedly hired Garment  to  help
prevent  the Rafi Eitan- Jonathan Pollard espionage scandal  from
spreading  and leading to the criminal indictment  of  other  co-
conspirators, such as Israeli Air Force Colonel Aviem Sella.  The
Government                       of                        Israel
and  Rafi  Eitan  would presumably have had  a  strong  incentive
to  conceal Rafi Eitan's role as a partner of DOJ in the theft of
the  PROMIS  software.  DOJ,  for  example,  granted  Rafi  Eitan
immunity  from  prosecution for his cooperation  in  the  Pollard
espionage  case. If it had become publicly known that Rafi  Eitan
and  DOJ  had, in fact, been partners in the theft of the  PROMIS
software  and  in  its illegal distribution internationally,  DOJ
might have been obliged to recuse itself from the prosecution  of
the Pollard espionage case. At the very least, such DOJ decisions
as  granting immunity from prosecution to Rafi Eitan  would  have
come under intense public scrutiny.
     Bua  could presumably have investigated Ben Menashe's  claim
by  having  the  grand  jury  subpoena financial  and  accounting
records of Dickstein, Shapiro and Morin and Hadron, Inc., and  by
interrogating appropriate individuals before the grand  jury.  It
is difficult to imagine a more serious instance of obstruction of
justice in the INSLAW case than that represented by Ben Menashe's
published   claim.  INSLAW  has  intelligence  information   that
Ratiner's settlement agreement with Dickstein, Shapiro and  Morin
was  in the approximate amount of the alleged wire transfer  from
Israel  and  that  the  funds from which  the  Ratiner  severance
payments were drawn were provided from outside the law firm.

     C.   Bua's Investigation of Leads Relating to the  Role
          of   DOJ  Officials  in  Either  Facilitating   or
          Covering   Up  the  Use  of  INSLAW's  PROMIS   in
          Intelligence/National Security Programs
          1.   Ronald LeGrand
     In   his   report,  Bua  quotes  extensively  from   William
Hamilton's  December 1989 affidavit about what  INSLAW  had  been
told  in  1988  by  Mr. Ronald LeGrand, when  LeGrand  was  Chief
Investigator of the Senate Judiciary Committee.
     LeGrand attributed his information to a trusted source  whom
he  said  he had by then known for 15 years and whom he described
as  a  senior DOJ career official with a title. The gist  of  the
information  that  LeGrand passed on  from  his  source  is  that
Presidential appointee D. Lowell Jensen, who headed the  Criminal
Division from early 1981 until approximately mid-1983, engineered
INSLAW's  contract disputes with DOJ in order "to get INSLAW  out
of  the  way"  and  be  able  to award  the  PROMIS-related  case
management  business to "friends."17 According  to  LeGrand,  his
source identified two senior Criminal Division aides to Jensen as
among the several individuals through whom Jensen carried out the
alleged  scheme:  James Knapp, whom Jensen had brought  with  him
from  California  to be his principal political Deputy  Assistant
Attorney General in the Criminal Division, and Miles Matthews,  a
Knapp  subordinate whom Jensen had elevated to  the  position  of
Executive Officer for the Criminal Division.
     According to LeGrand, his source also identified three other
senior  Criminal Division officials whom he described as  knowing
the  whole  story  of the alleged Jensen-directed  scheme:  These
officials  are John Keeney, the highest ranking career lawyer  in
the  Criminal Division; Mark Richard, the career Deputy Assistant
Attorney  General responsible in 1983 for intelligence,  national
security  and international terrorism issues within the  Criminal
Division;  and  Philip White, who served under  Mark  Richard  as
Director of International Affairs, starting in 1983.
     Bua quotes Hamilton's December 1989 affidavit as follows:
     Although  Richard and White were 'pretty  upset'  about
     it,  the  source  did not believe that either  of  them
     would disclose what they know _except in response to  a
     subpoena and under oath_. The source added that he  did
     not  think  that either Richard or White  would  commit
     perjury. (Emphasis added.)
     Although Bua placed LeGrand before the grand jury, he merely
"interviewed" Keeney, Richard and White, who each denied  knowing
anything. Bua apparently ignored the cautionary warning that  Bua
himself  quoted  from  Hamilton's December 1989  affidavit:  "the
source                                                        did
not   believe  that  either  of  them  [Mark  Richard  or  Philip
White]  would  disclose what they know except in  response  to  a
subpoena and under oath."
     U.S. Government officials who are given access to classified
information  are  bound by security oaths not  to  disclose  such
classified  information except to individuals who have  both  the
required  security clearance and the "need to know." If a  highly
classified U.S. Government program, considered vital to the  U.S.
national security, also included U.S. Government activities  that
were  approved  at  the  highest  levels  of  the  United  States
Government  but  which  constituted  violations  of  the  federal
criminal  laws,  the  security  oaths  could  operate  so  as  to
constrain  the ability of U.S. Government officials to  volunteer
information  about  the  criminal activity  embedded  within  the
classified U.S. intelligence/national security program.
     Mark  Richard's and Philip White's official duties  in  1983
would  have included collaboration with foreign intelligence  and
law  enforcement  agencies on the problem of  acts  of  terrorism
against  U.S. citizens. During the past decade, the  Middle  East
has been the principal center of terrorism against U.S. citizens,
and  Israel  has  been one of the most important  allies  of  the
United States in the fight against Middle Eastern terrorism.
     If  DOJ  and the Government of Israel decided to collaborate
on   an   initiative  against  Middle  Eastern  terrorism,   such
collaboration  might  well  have included  an  effort  to  obtain
whatever information on suspected terrorists exists from the  law
enforcement   and   intelligence  files  of  other   governments,
particularly  in the Middle East. If other governments  could  be
induced  to  implement  the PROMIS database  management  software
system in their intelligence and law enforcement agencies, and if
both  the  software system and the computer hardware acquired  to
operate  the  software  had  been  secretly  modified  to  permit
electronic  eavesdropping by U.S. and Israeli  intelligence,  the
joint DOJ-Israeli intelligence initiative against terrorism would
have  been  positioned in such a way as to maximize the potential
success  of  the DOJ-Israeli intelligence joint venture.  One  of
INSLAW's  sources,  Ari Ben Menashe, claims to  have  attended  a
meeting in DOJ's Justice Command Center between DOJ officials and
Israeli military intelligence officials, where data on terrorists
were   exchanged   between  the  representatives   of   the   two
governments. Ben Menashe claims that both governments were  using
the PROMIS software to track terrorists.
     As  noted  in the preceding section, III.B.2., DOJ's  PROMIS
Project  Manager,  C.  Madison Brewer, sent  over  to  INSLAW  in
February  1983, under the guise of a visiting Israeli prosecutor,
one  of  the top Israeli espionage officials, Rafi Eitan.  Brewer
asked   that   INSLAW  provide  a  technical  briefing   on   and
demonstration  of PROMIS for this Israeli visitor,  which  INSLAW
did.  At the time, Rafi Eitan was Anti-Terrorism Advisor  to  the
Prime  Minister  of  Israel.  According  to  the  September  1992
Investigative  Report  of the House Judiciary  Committee,  Brewer
testified that Jensen pre-approved virtually every action he took
with  regard to INSLAW. Although it is unlikely that  Brewer,  as
the computer systems executive for U.S. Attorneys' Offices, would
normally  have interacted with the top Anti-Terrorism Advisor  to
the Prime Minister of another country, it is not implausible that
Jensen,  Mark Richard and Philip White of DOJ's Criminal Division
would  have  had  dealings with Rafi Eitan on  such  subjects  as
extraditing   suspected  terrorists  from  abroad  for   criminal
prosecution in the United States.

     An  American  citizen's  oath  not  to  disclose  classified
information  must, under the law, give way to the  obligation  to
testify truthfully when compelled by appropriate legal process to
answer  questions  under  oath. Bua's  failure  either  to  bring
Keeney, Richard and White before his grand jury or to place  them
under  oath, in spite of being warned of the necessity to do  so,
is difficult to understand. Moreover, it invites concerns about a
purposeful  effort to avoid placing DOJ witnesses in  a  position
where  they  would  have to choose between perjury  and  damaging
disclosures  about the use of a national security  initiative  to
conceal violations of the federal criminal law.
     Such  concerns  are fueled further by Bua's silence  in  his
report  about  another disturbing development regarding  DOJ  and
LeGrand.  In  1991, DOJ sought to block INSLAW's request  to  the
U.S. District Court to re-open discovery. One tactic employed  by
DOJ  was  to  sponsor a sworn statement by LeGrand purporting  to
cast doubt on the accuracy of Hamilton' s December 1989 affidavit
about  LeGrand.  Unfortunately for LeGrand and DOJ,  Senator  Sam
Nunn  had,  in the meantime, confirmed the accuracy of Hamilton's
statements  about LeGrand in a letter to the editor  of  the  New
Republic  magazine.  According  to  Senator  Nunn,  LeGrand   had
repeated  the same story that he told the Hamiltons to the  staff
of  the  Senate Permanent Investigations Subcommittee chaired  by
Senator Nunn. Bua's report devoted almost four pages to LeGrand's
testimony  before  the grand jury. All of it has  been  redacted.
From  the  questions  that  Bua  reports  asking  DOJ  officials,
however,  it  appears  that LeGrand's grand  jury  testimony  was
consistent  with  his earlier statements to  the  Hamiltons.  Bua
makes  no mention of LeGrand's subsequent contradictory statement
sponsored  by  DOJ  in 1991 in the U.S. District  Court  for  the
District of Columbia.
          2.   Garnett  Taylor  and  the  Alleged   DOJ
               Destruction        of         Classified
               Intelligence/National Security Documents
               Relating to INSLAW
     INSLAW  urged Bua to subpoena Garnett Taylor, a  former  DOJ
security officer, before Bua's grand jury and to interrogate  him
about  several matters, including the alleged destruction by  DOJ
officials  of classified national security/intelligence documents
relating  to  INSLAW. As with LeGrand, Taylor's testimony  before
the  grand  jury has been redacted from Bua's report, but  it  is
possible  to  draw  some  inferences about  Taylor's  grand  jury
testimony  from  Bua's narrative about his interview  with  James
Walker, Taylor's former DOJ supervisor.
     Bua's  narrative  about  his  interview  with  James  Walker
implies  that  Walker's  former  subordinate,  Taylor,  testified
before  the  grand  jury  that Walker had  instructed  Taylor  to
retrieve   classified  intelligence/national  security  documents
relating  to  the INSLAW case from the files of a Civil  Division
attorney  who had left DOJ, and then to destroy those  documents.
There  is  also  the further implication in the Bua  Report  that
Taylor  also alleged that Walker later cancelled the instructions
to   Taylor  and,  thereafter,  carried  out  the  retrieval  and
destruction of the classified INSLAW documents himself.
     In  its  September  1992  Investigative  Report,  the  House
Judiciary  Committee  reported that over 50  sensitive  files  or
documents  relating  to  INSLAW had disappeared  from  the  Civil
Division's  litigation files while the House Judiciary  Committee
sought access to the Civil Division's files on INSLAW.

     Bua  states  that  the  House Judiciary  Committee's  report
contains  the  suggestion that a missing Civil Division  file  on
INSLAW  "may  have been destroyed because it contained  documents
that  implicated DOJ officials in a criminal conspiracy  relating
     Bua   disposes  of  this  suspicion  by  describing  it   as
unfounded. Bua accomplishes this by accepting at face  value  the
account   given  by  Sandra  Spooner,  the  lead  Civil  Division
litigation counsel on INSLAW. Bua does confirm that one  file  of
privileged  documents is missing, but instead  of  conducting  an
investigation,  Bua snidely insinuates that the  House  Judiciary
Committee's  investigators  could  have  stolen  it:  "Even   the
Committee  investigators had limited access to the  storage  room
and  therefore the missing file. By no means do we  suggest  that
one of the investigators stole the file."
     According  to  Bua,  James  Walker  confirmed  that  Garnett
Taylor's  official responsibilities, when he worked  for  Walker,
included "responsibility for shredding classified documents  once
a   determination  was  made  that  the  documents  need  not  be
retained."  Bua  also claimed that "Walker  stated  that  it  was
conceivable  that Taylor had been dispatched to take  care  of  a
file cabinet belonging to a DOJ employee who had left."
     When  it  came  to Taylor's apparent claim that  Walker  had
"reassigned Taylor to another task and handled the disposition of
the  documents in the file cabinet himself," Bua accepts at  face
value Walker's statement that he had "no recollection" of such an
incident.  If  Walker  were to recollect  such  an  incident,  of
course,  Walker might well expose himself to criminal prosecution
for   obstruction  of  justice.  Bua  also  uncritically  accepts
Walker's statement that "there were never any INSLAW documents in
any  of  the  safes  he controlled or any of the  safes  he  knew
     Walker is DOJ's Special Security Officer with responsibility
for   administering  the  facility  on  the  6th  floor  of   DOJ
headquarters that houses Sensitive Compartmented Information.18

     Walker's  apparently  unsworn  denials  of  Taylor's   sworn
statements  were  good  enough for Bua.  INSLAW  has  other  U.S.
Government  witnesses,  however, who  claim  to  know  about  the
incident  that Walker claims he cannot recollect.  One  of  these
witnesses claims to have been an eye witness to at least part  of
the  incident.  These witnesses are unwilling  to  be  identified
unless given guarantees that there will be no reprisals.
     It  is  difficult  to  understand why  Bua  would  not  have
insisted  on  inspecting the Sensitive Compartmented  Information
Facility (SCIF) administered by James Walker to determine whether
SCIF  vault  houses  materials relating to  the  PROMIS  software
and/or  INSLAW, whether in the form of documents,  microfiche  or
remotely-located   computer-based  PROMIS  data   accessible   by
computer  terminals  within  the confines  of  the  SCIF.  It  is
difficult  to  justify  Bua's  failure  to  attempt  to   resolve
empirically  the  apparent discrepancy  between  the  grand  jury
testimony  of  Taylor  and  the unsworn  "failure  to  recollect"
statements  by  Walker. Bua presumably could have brought  Walker
and  other  DOJ security officers before the federal grand  jury,
and   also  subpoenaed  DOJ's  records  on  the  destruction   or
relocation  of  classified  intelligence  and  national  security

     D.   Bua's  Investigation of Leads About Earl W. Brian,
          the   Principal   Alleged   Private   Sector   Co-
          Conspirator of DOJ and U.S. Intelligence  Agencies
          in the Theft and Distribution of PROMIS
     As  noted  in  Section  III.B., Bua's Investigation  of  the
Alleged  International Distribution of INSLAW's PROMIS,  most  of
the  accounts  of  the foreign sales and distribution  of  PROMIS
place Earl W. Brian at the center of the activity.
     Bua  subdivides his investigation of this question into  two
parts:  the  Claimed  Direct Evidence of  a  Conspiracy  and  the
Claimed Circumstantial Evidence of a Conspiracy.
          1.   Bua's   Investigation  of  the   Claimed
               Direct Evidence of a Conspiracy
     Bua  begins  this  section by claiming to  have  interviewed
individuals  whom  INSLAW and others have  identified  as  having
personal  knowledge of the activities of Earl Brian in connection
with  the distribution of PROMIS software. Bua then addresses  in
particular  Michael  Riconosciuto, Ari Ben Menashe,  and  Charles
               (a)  Michael Riconosciuto
     Michael  Riconosciuto served as Director of Research  during
the  early  1980's  for the Joint Venture between  the  Wackenhut
Corporation  of  Coral Gables, Florida, and the Cabazon  Band  of
Mission  Indians in Indio, California. The Wackenhut  Corporation
reportedly regularly conducts highly classified contract work for
U.S.  intelligence  and law enforcement agencies.19  Riconosciuto
claims  that  Earl  W.  Brian and Peter Videnieks,  DOJ's  PROMIS
Contracting Officer, were frequent visitors to the Joint  Venture
in Indio, California, because the Joint Venture was modifying the
PROMIS  software  so  that Earl Brian could sell  it  to  foreign
governments for their intelligence and law enforcement agencies.
                    (1)  Bua's Claimed Inconsistencies in
                         Riconosciuto's Various Statements about
                         When and From Whom He Claims to Have
                         Obtained the PROMIS Software
     Bua claims to have found inconsistencies among several sworn
statements by Riconosciuto, relating both to the number of copies
of  the PROMIS software that Riconosciuto claims to have received
and  to  the  identification of the party or  parties  from  whom
Riconosciuto claims to have received the PROMIS software.
     In  both  his affidavit to INSLAW and in his sworn statement
to  the  House  Judiciary Committee, Riconosciuto  is  apparently
consistent  in  claiming  to  have  received  a  single  copy  of
PROMIS,  as  well  as  in claiming to have obtained  PROMIS  from
Earl  Brian and Peter Videnieks, the Justice Department's  PROMIS
Contracting  Officer.  In  testimony at  his  criminal  trial  in
Tacoma,  Washington, in January 1992, however, Riconosciuto  made
references to receiving several copies of PROMIS and to receiving
those  copies from Dr. John P. Nichols, the Administrator of  the
Joint Venture.
     These   accounts   may  not,  in  fact,  be   in   conflict.
Riconosciuto  may  have  focused  his  testimony  to  the   House
Judiciary  Committee  and  to INSLAW on  the  one  incident  that
combines the proprietary version of PROMIS and direct evidence of
DOJ  complicity in its dissemination; i.e., the chain of  custody
from  DOJ  Contracting  Officer  Peter  Videnieks  to  Brian   to
Riconosciuto. This is the kind of evidence that both  INSLAW  and
the   House  Judiciary  Committee  were  seeking.  Riconosciuto's
testimony about receiving the proprietary version of PROMIS  from
Earl  Brian and Peter Videnieks would not necessarily  mean  that
Riconosciuto  did  not  receive  other  copies  of  PROMIS   from
individuals  such  as  John P. Nichols. Moreover,  Riconosciuto's
testimony  to INSLAW and the House Judiciary Committee would  not
exclude the possibility that Riconosciuto also obtained copies of
the  earlier  public  domain version of PROMIS  for  modification
under  the auspices of the Joint Venture. This could also account
for  Riconosciuto's apparent inconsistencies about the years when
he claims to have worked on PROMIS, which Bua noted as additional
reasons to question Riconosciuto's credibility.
     Bua also apparently does not realize that INSLAW had another
DOJ  customer,  in  addition  to the Executive  Office  for  U.S.
Attorneys,  to  which  it  delivered the proprietary  version  of
PROMIS:  DOJ's  Land  and Natural Resources  Division.  That  DOJ
division has been subscribing to INSLAW's PROMIS software support
services   since   January   1982   and   receiving   proprietary
enhancements  to  PROMIS pursuant to the Annual  INSLAW  Software
Support  Agreements ever since.20 These standard INSLAW  Software
Support  Agreements legally bar DOJ from copying or disseminating
the proprietary enhancements in the same way as INSLAW's standard
PROMIS  license agreement does. Bua's failure to understand  this
point also led to the following statement by Bua that is patently
     It  is undisputed that INSLAW did not produce a copy of
     enhanced PROMIS to DOJ until April 20, 1983.21

                    (2)  Bua's Investigation of Riconosciuto's
                         Claim to Have Worked on PROMIS Under the
                         Auspices of the Wackenhut/Cabazon Joint

     Bua  states that his investigators "interviewed a number  of
people  whom Riconosciuto identified as having knowledge  of  the
activities   involving   PROMIS  at  the  Cabazon   Reservation,"
including  Robert  Nichols  and  Peter  Zokosky,  and  that   his
"interviews" led him to the tentative conclusion "that there were
absolutely22" no activities undertaken by Wackenhut, Riconosciuto,
or  the Cabazons that had anything to do with PROMIS or any other
     Robert  Nichols  and Peter Zokosky have each reportedly  had
extensive  employment in classified U.S. Government  intelligence
and  national  security activities. Nichols, in  fact,  testified
under  oath  at  a civil trial in Los Angeles in 1993  about  his
claimed 18 year association with the CIA. Each presumably took an
oath  not to disclose voluntarily any classified information that
he  may have acquired as part of his U.S. Government work, except
to individuals who possess both the requisite security clearances
and  the  "need  to  know." The only way to overcome  that  sworn
obligation to silence is to use compulsory legal process, such as
a  federal  grand jury, to require such an individual  to  answer
highly  detailed questions under oath. Bua apparently did not  do
     If   Riconosciuto  is  telling  the  truth  about  modifying
INSLAW's  PROMIS  software  with a  "trap  door"  for  electronic
eavesdropping  by  the  U.S. Government,  the  U.S.  intelligence
agency whose vital interests would be most clearly implicated  in
any such project is the National Security Agency (NSA).
     That the Joint Venture was carrying out contract R&D for the
National  Security  Agency  and  that  Michael  Riconosciuto  was
personally  involved in such work can be inferred from statements
and actions of Robert Nichols and Peter Zokosky.
     Robert  Nichols told Mr. and Ms. Hamilton about an  incident
in  the early 1980's when a colonel from the NSA Headquarters  at
Fort George G. Meade, Maryland, allegedly flew out to the Cabazon
Reservation  for the day for the single purpose of assuring  that
FBI  agents, investigating a triple homicide of the Vice Chairman
of the Cabazon Tribe and two associates, did not attempt to probe
the  classified  U.S. Government work being performed  under  the
auspices of the Wackenhut-Cabazon Joint Venture.
     Robert   Nichols  also  told  the  Hamiltons  about   having
accompanied  Michael Riconosciuto on a visit to a classified  NSA
contractor  facility in the Silicon Valley and to  have  observed
Riconosciuto's apparently unrestricted and unescorted  access  to
both  the  contractor's  employees  and  to  offices  within  the
contractor facility that were prominently marked as off-limits to
any unescorted visitors.
Robert   Nichols   also   told  the  Hamiltons   about   frequent
alleged  telephone  conversations at the Wackenhut-Cabazon  Joint
Venture between Michael Riconosciuto and Bobby Inman. Bobby Inman
served  in  the  early 1980's consecutively as  Director  of  the
National  Security  Agency and Deputy  Director  of  the  Central
Intelligence Agency.

     For  his  part, Peter Zokosky sent Mr. and Ms.  Hamilton  an
excerpt  from Public Law 86-36 of 1959 on NSA, with the following
words highlighted:
     Except  as provided in subsection (b) of this  section,
     nothing  in  this  Act or any other law  ...  shall  be
     construed to require the disclosure of the organization
     or any function of the National Security Agency, or any
     information with respect to the activities thereof ...
                    (3)  Bua's Attempt to Discredit Riconosciuto
                         Based on Bua's Own Misinformation about
                         the Wackenhut Corporation, and Bua's
                         Failure to Investigate Riconosciuto's
                         Claim That He and Earl Brian Worked
                         Together in 1980 as Contract Employees
                         of Wackenhut
     Riconosciuto claims that he and Earl Brian made  a  trip  to
Iran in 1980 as independent contractors with a subsidiary of  the
Wackenhut   Corporation   known   as   the   Wackenhut   Research
     Bua  states that the Wackenhut Research Corporation does not
exist.  While that statement is true for 1993, what is important,
is  that the Wackenhut Research Corporation did exist in 1980, as
a  subsidiary of the Wackenhut Corporation, according to the 1980
Annual  Report  for the parent company. Rather  than  diminishing
Riconosciuto's  credibility, the reference to a  subsidiary  that
has  not been in existence for a decade but that was in existence
when Riconosciuto claims it was, actually enhances Riconosciuto's
     Bua  further criticizes Riconosciuto for failing to produce,
as  he  promised  Mr.  and Ms. Hamilton in a May  1990  telephone
conversation  memorialized by the Hamiltons, copies  of  Internal
Revenue  Service (IRS) 1099 independent contractor forms for  his
and Earl Brian's claimed contract work for the Wackenhut Research
Corporation  in  1980. Bua's federal grand jury presumably  could
have  issued  a  subpoena  to the IRS  and/or  to  the  Wackenhut
Corporation  for  the  records in  question  and,  in  so  doing,
determined  whether  Earl  Brian and  Michael  Riconosciuto  each
worked for the same unit of the Wackenhut Corporation at the same
time  in  1980. Because Earl Brian has repeatedly denied  Michael
Riconosciuto's  claims, Bua could have used this  opportunity  to
determine empirically whether it is Michael Riconosciuto or  Earl
Brian who is lying.
                    (4)  Bua's Investigation of Riconosciuto's
                         Claimed Involvement With Earl Brian and
                         Peter Videnieks
     Bua states that Sam Cross, who was Chief of Police in Indio,
California,  in the early 1980's, "made a point of staying  aware
of  what  was  going  on at the Cabazon Reservation  during  that
period,  and  that he never heard any mention of  the  name  Earl
Brian."  If  the NSA could send a colonel 3,000 miles across  the
United  States  to make certain that FBI agents  investigating  a
triple  homicide near the reservation did not find  out  anything
about  the  classified projects undertaken by  the  reservation's
Joint  Venture, there is no reason to believe that a local police
chief would fare any better in gaining access to classified Joint
Venture                      projects.                      Bua's
reliance  on  Sam  Cross' ability to know about  such  classified
activities would, therefore, appear to be misplaced.
     Bua  quotes  John P. Nichols, the Director of the Wackenhut-
Cabazon  Joint  Venture, as being "emphatic  that  Riconosciuto's
allegations  concerning PROMIS are fabricated" "and that  he  had
never  heard  of  Earl  Brian or any of his  companies  prior  to
Riconosciuto's  allegations." Although Bua details Riconosciuto's
criminal  history, he fails to mention that John P.  Nichols  was
incarcerated  in  the  mid-1980's  following  a  conviction   for
contracting  with  professional  "hit  men"  for  a   number   of
assassinations.  The disclosure of such information  is  relevant
for anyone trying to determine how much weight to give to John P.
Nichols'  statements.  Moreover, Bua  apparently  did  not  place
Nichols before the grand jury or even under oath.
     Bua  states that Brian's presence at the September 10,  1981
weapons   demonstration,  as  reported  in  the  September   1992
Investigative Report of the House Judiciary Committee, "would  be
significant" because Brian "has steadfastly denied having been to
the  Cabazon reservation, or ever having met Riconosciuto or  any
one affiliated with the Cabazons."
     The  Indio Police Department conducted surveillance  of  the
September  10, 1981 weapons demonstration and recorded both  Earl
Brian  and  Michael Riconosciuto as attending,  with  Earl  Brian
arriving  as  a passenger in a Rolls Royce automobile  driven  by
Wayne Reeder, whom Bua describes as a real estate developer.  Bua
reports  that Wayne Reeder claims that Earl Brian was not present
with  him  on  September 10, 1981. Wayne Reeder's  character  and
integrity  are, however, currently under challenge by the  United
States Government. Reeder was indicted for insurance fraud by the
U.S.  Attorney's Office in Rhode Island in June 1993.23 Moreover,
Bua apparently did not place Reeder before the grand jury or even
under oath.
     Bua  also  credits Earl Brian's denial that he  was  at  the
September  10,  1981 weapons demonstration in Indio,  California,
and  notes that Brian's denial is supported by various documents,
including   Brian's   personal  calendar  and   expense   records
purporting to show Earl Brian as being on the East Coast  of  the
United States on the day in question. Bua further notes that  the
notations on some of these documents were made by one of  Brian's
     Earl  Brian's  veracity  and the  reliability  of  documents
furnished  by  Earl Brian are open to question, however,  as  the
result  of Brian's decision not to contest a civil lawsuit  filed
by  the U.S. Securities and Exchange Commission (SEC) on June 28,
1993  against  Earl W. Brian and several former  subordinates  at
Financial News Network (FNN). In a 60-page civil complaint  filed
in  U.S.  District  Court for the District of Columbia,  the  SEC
charged Brian with securities fraud, with causing the creation of
fraudulent  documents,  with executing and backdating  fraudulent
documents,  with directing a subordinate to execute a  fraudulent
and  backdated  document,  and with making  materially  false  or
misleading statements. Brian settled his part of the SEC  lawsuit
the  very day it was filed by agreeing to be bound by a permanent
injunction                                                    not
to  commit  securities fraud in the future, and not  to  make  or
cause  others to make a materially false or misleading  statement
in the future.
     Bua  determined that Riconosciuto is not to be believed, but
that Earl Brian and Peter Videnieks are "credible witnesses, both
in their demeanor and in the substance of their statements."
     In reaching that conclusion, Bua apparently did not speak to
the  former FNN Director of Administrative Services, Ms. Margaret
Wiencek. INSLAW, however, not only spoke to Margaret Wiencek  but
also  obtained  from  her a copy of a sworn  statement  she  gave
recently   to   the   U.S.  Customs  Service   Internal   Affairs
investigators   who   were  interviewing  Wiencek   about   Peter
Videnieks.  Videnieks  left  DOJ  in  September  1990  to  become
Director of Operational Procurement at the U.S. Customs Service.
     In  her  sworn statement, Wiencek describes a  file  at  FNN
Headquarters that contained copies of correspondence to and  from
Dominick  Laiti,  then  Chairman of Earl  Brian's  Hadron,  Inc.,
relating  to  the PROMIS software and INSLAW, Inc.  Wiencek  also
claims  personally  to  have  taken  telephone  messages  at  FNN
Headquarters from Peter Videnieks and Michael Riconosciuto during
the  first quarter of 1987. That is the quarter when INSLAW filed
a  pleading in U.S. Bankruptcy Court for the District of Columbia
concerning  the covert DOJ  effort in 1985 to force  INSLAW  into
Chapter 7 liquidation.
               (b)  Ari Ben-Menashe
     Section   III.B.2.,  Bua's  Investigation  of  the   Alleged
International  Distribution  of  INSLAW's  PROMIS,   contains   a
detailed  analysis  of Bua's statements about Ari  Ben  Menashe's
claims and alleged claims. That analysis is not repeated in  this
section.  One example of Ben Menashe's credibility regarding  the
international  distribution of PROMIS is his sworn  statement  in
1991  about  the pivotal role played in this area by  an  Israeli
espionage  official, Rafi Eitan. In early 1993, INSLAW  was  able
independently to corroborate Eitan's collaboration  with  DOJ  in
the 1983 theft of PROMIS.
     Bua states that Ben Menashe's claims have been "convincingly
denied  by two witnesses whose statements we believe," ...  "Earl
Brian,   under  oath,  and  Robert  McFarlane,  in  a   telephone
     As  noted  earlier, Brian's acceptance on Monday,  June  28,
1993  in U.S. District Court for the District of Columbia of  the
permanent  injunction sought by the U.S. Securities and  Exchange
Commission (SEC) not to engage in securities fraud in the future,
raises  valid questions about the veracity and integrity of  Earl
Brian, one of the witnesses upon whom Bua relied.
     Although  Bua  detailed Riconosciuto's criminal  record,  he
failed  to mention that the other witness upon whom he relied  in
dismissing  Ben Menashe's claims, Robert McFarlane,  also  has  a
federal  criminal  record,  arising  from  his  conduct  in   the
Iran/Contra affair as National Security Advisor to the  President
of the United States. McFarlane's conviction was for lying.
               (c)  Charles Hayes
     The  Bua Report contains several redacted pages relating  to
the grand jury testimony of Charles Hayes.
     INSLAW, of course, has no way of knowing what Charles  Hayes
said  or  did not say before Bua's grand jury, but Hayes executed
an  affidavit  on  November 30, 1992 claiming that  on  or  about
August 26, 1992 he had appeared to testify before the grand  jury
in  Chicago;  that  he  gave  testimony  concerning  his  "direct
knowledge  of the commission of felonies" "related to the  INSLAW
affair"; that he submitted a list of names of witnesses who  have
direct  knowledge of the INSLAW affair and supplied the addresses
and  telephone numbers of those witnesses; and that none  of  the
witnesses had been contacted as of November 30, 1992.
     Hayes  had previously told Mr. and Ms. Hamilton that he  met
with  Earl  Brian, Richard Secord and Oliver North in Sao  Paulo,
Brazil,  in  the  mid-1980's while those three  individuals  were
purchasing  weapons for the Contras in Nicaragua, and  Brian  was
marketing INSLAW's PROMIS software to the Government of Brazil.
               (d)  Richard Babayan
     Bua  apparently did not bring before the grand jury or  even
interview Richard H. Babayan, who provided an affidavit to INSLAW
on   March   22,   1991,  concerning  a  PROMIS  software   sales
presentation  by  Earl  W.  Brian  and  Richard  Secord  to   the
Government  of Iraq during 1987. In his affidavit,  Babayan  also
claims  that  a  Miami,  Florida, resident,  Sarkis  Saghanolian,
assisted Earl Brian in completing the sale of the PROMIS software
to   Iraq  "for  use  primarily  in  intelligence  services,  and
secondarily in police and law enforcement agencies."
     INSLAW  furnished a copy of this affidavit to Bua in January
1992,  but  Bua  apparently never interrogated  Babayan;  Richard
Secord,  named  by  both Babayan and Hayes as a  Brian  colleague
during PROMIS marketing forays abroad; or Sarkis Saghanolian.
          2.   Bua's   Investigation  of  the   Claimed
               Circumstantial Evidence of a Conspiracy
               (a)  The  September  1983  Fund  raising
                    Trip  to  New  York  City  by  Earl
                    Brian,  Dominick  Laiti,  and  Paul
     Bua  quotes from William Hamilton's December 1989  affidavit
about  Earl  Brian,  Hadron Chairman Dominick Laiti,  and  Hadron
Executive  Paul Wormeli gathering in New York City  in  September
1983  to  raise  equity capital from the Wall  Street  Investment
Bank,  Allen  and  Company.  In his  affidavit,  Hamilton  quotes
Wormeli  as  stating  that  the equity  capital  was  to  finance
Hadron's  expansion in criminal justice information  systems.  In
his  affidavit, Hamilton also quotes Wormeli's former  secretary,
Marilyn  Titus, as stating that the purpose of the trip  was  "to
raise capital to buy the court software."
     Bua  quotes Titus as stating that "she does not believe  she
ever  told  William Hamilton that the purpose of  the  1983  fund
raising   trip  was  to  raise  capital  _to  obtain  PROMIS   or
INSLAW_."  (Emphasis  added.) Titus  was  apparently  not  placed
under  oath,  and  she was also apparently  asked  to  confirm  a
statement  that  is different from the one that  Hamilton  claims
that Titus made.
     Bua  states  that  Laiti  insisted the  equity  capital  was
intended  to  be  used  by  Simcon, Hadron's  police  information
systems  subsidiary  in  1983.  Bua  also  claims  that  "Wormeli
essentially confirmed what Laiti told us." What Wormeli had  told
INSLAW,  however, is that he was shocked to discover  that  Laiti
was  seeking  to raise $7 million in equity capital for  criminal
justice  information systems because Simcon  could  only  use  $2
million. Wormeli told INSLAW that he never was told how the other
$5 million was going to be used.
     Wormeli also told INSLAW that during the September 1983 fund
raising  visit to Allen and Company, he and Laiti  not  only  met
with  Mark Kesselman, a Vice President, but also met with Herbert
A.  Allen,  Jr., then the Chief Executive Officer  of  Allen  and
Company. Wormeli told INSLAW that at the time of the 1983  visit,
Allen  and  Company  owned about $5 million  of  Hadron's  common
     Bua apparently did not subpoena records of Allen and Company
about  the  Hadron  fund raising effort  in  1983,  and  did  not
interview Herbert A. Allen, Jr. What Bua did do is have a  trans-
Atlantic  telephone  interview  with  Kesselman  in  Switzerland.
Kesselman claims that he could not even remember the name of  the
company seeking the funds. With a $5 million equity investment in
Hadron,  Herbert A. Allen, Jr., presumably, would have been  able
to  remember  the  name  of the company  and  possibly  important
details concerning the intended use of the proceeds. With such  a
substantial  investment in Hadron in 1983, Allen and Company  may
also have had documents relating to Hadron's planned expansion in
criminal  justice information systems that could explain  the  $5
million for which Wormeli cannot account.
               (b)  The 53rd Street Ventures Connection
                    (1)  Patricia Cloherty's Alleged Claims About
                         Earl Brian
     On  Thursday,  May 5, 1988, the CBS Evening  News  with  Dan
Rather  broadcast an unusually long, approximately seven  minute,
segment  on the INSLAW affair, highlighting the alleged  role  of
Earl W. Brian in the DOJ theft of the PROMIS software.
     The  annual  meeting of the National Association of  Venture
Capitalists was at that very time taking place in Washington, DC,
and   both  Richard  D'Amore  and  Patricia  Cloherty   were   in
attendance. D'Amore was on INSLAW's board of Directors and was  a
partner  in Hambro Venture Capital, then the lead venture capital
investor  in  INSLAW. Cloherty and her husband,  Daniel  Tessler,
controlled  53rd Street Ventures, which also then had  an  equity
investment  in INSLAW. Cloherty also had by this time become  the
Chief Operating Officer of Alan Patricoff and Associates, a  very
large  venture capital firm in New York City that had  controlled
53rd  Street Ventures until 1984, when Cloherty and Tessler  took
it over.
     On  Friday,  May  6, 1988, Richard D'Amore  visited  William
Hamilton at INSLAW's offices in Washington and told him  that  he
had  seen Patricia Cloherty at the venture capitalists conference
and  had  mentioned  to  her the previous evening's  telecast  on
INSLAW                and               the               alleged
role  of  a  venture  capitalist  by  the  name  of  Earl  Brian.
According to D'Amore, Cloherty responded by stating, in words  or
substance,  that  she "knew all about Earl Brian's  role  in  the
INSLAW case."
     According  to William Hamilton's desk calendar for  Tuesday,
May  10,  1988,  Hamilton telephoned Patricia  Cloherty  at  Alan
Patricoff and Associates. Without disclosing to her that  D'Amore
had  recounted  his  conversation with Cloherty,  Hamilton  asked
whether  Earl Brian or his InfoTechnology, Inc., venture  capital
firm  had  ever done any deals with Alan Patricoff and Associates
or  53rd  Street Ventures through early 1984 when  Patricoff  and
Associates managed 53rd Street Ventures. Cloherty claimed not  to
know  and  did not commit to try to find out when Hamilton  asked
that she do so. Hamilton did tell Cloherty about the alleged role
of  venture  capitalist  Earl Brian  as  a  partner  in  the  DOJ
corruption  against  INSLAW, and Cloherty  did  not  disclose  to
Hamilton that she knows Earl Brian and, in fact, had served on  a
board  of directors with him during the 1980's, disclosures  that
Cloherty made to Bua.
     In   his  December  1989  affidavit,  Hamilton  quotes   the
statement  about  Earl  Brian  that Cloherty  allegedly  made  to
D'Amore   in  May  1988,  without  providing  the  aforementioned
background  details  about  the  CBS  Evening  News  story  being
telecast  while Richard D'Amore and Patricia Cloherty, each  with
venture  capital  investments in INSLAW, were in Washington,  DC,
for a national conference of venture capitalists.
     According  to  Bua, both Cloherty and D'Amore denied  having
had  such  a conversation in May 1988, and D'Amore denied  having
told  Hamilton about such a conversation. Bua apparently did  not
place  Cloherty  or D'Amore under oath. Bua never asked  Hamilton
for  further information, such as some of the contextual  details
described  above, that Bua could have used in trying  to  refresh
the  recollections of Cloherty and D'Amore or, alternatively,  in
trying  to  impeach  their testimony. Moreover,  Bua  could  have
easily  verified  the CBS telecast on Brian and INSLAW  occurring
while Cloherty and D'Amore were together in Washington, DC, at  a
venture capital conference.
     Instead  of  doing  such  work,  however,  Bua  uncritically
accepted  Cloherty's  and D'Amore's non-sworn  denials  and  then
irresponsibly  used those denials to support his conclusion  that
Hamilton's sworn representations cannot be relied upon.
     Bua  quotes  Daniel  Tessler  as  stating  that  "his  wife,
Patricia  Cloherty, has no knowledge of Earl Brian ..." Bua  then
quotes  Patricia Cloherty as not only admitting  that  she  knows
Earl  Brian  but  also admitting to have served with  Earl  Brian
during  the  1980's  on the Board of Directors  of  the  National
Association  of Small Business Investment Companies. 53rd  Street
Ventures is, in fact, a Small Business Investment Company.
     Bua  should  also  have  wondered how  Hamilton  could  have
correctly  associated  Patricia Cloherty with  Earl  Brian,  when
Cloherty's  own husband professes not to have known of  any  such
association,  unless Hamilton's highly plausible account  of  his
May 1988 conversation with D'Amore in Washington, DC, is true and
                    (2)  Daniel Tessler's Non-Sworn Denial of
                         Hamilton's Sworn Statement About Tessler
                         Demanding Voting Rights to the
                         Hamiltons' Common Stock on the Eve of
                         INSLAW's Chapter 11 Bankruptcy Filing
     In  his December 1989 affidavit, Hamilton states that Daniel
Tessler  appeared at INSLAW in December 1984, just several  weeks
before  INSLAW  was  finally  forced  to  file  for  Chapter   11
bankruptcy protection, and gave William Hamilton an ultimatum  to
turn over to Tessler by the close of business that day the voting
rights  to Mr. and Ms. Hamilton's controlling interest in INSLAW.
Otherwise,  neither  53rd  Street  Ventures  nor  Hambro  Venture
Capital  would even attempt to help INSLAW raise new  capital  to
avoid financial collapse, according to Hamilton's sworn statement
about Tessler's ultimatum.
     Bua  reports that Tessler denied Hamilton's sworn testimony,
and Bua apparently accepts Tessler's non-sworn denial without any
further  investigation. Someone who cannot  remember  his  wife's
business relationship with Earl Brian may not, however, have  the
most reliable memory. Moreover, if Tessler was acting secretly on
behalf  of  Earl Brian when he sought the voting  rights  of  the
Hamiltons'  controlling interest in INSLAW, he may have  violated
the  Federal  Banking Criminal Statute, 18 U.S.C. s  215  because
Tessler  was  then  an  officer of a  Small  Business  Investment
Company (SBIC). 53rd Street Ventures, as an SBIC, is a "financial
institution"  as  defined in section 103 of  the  Small  Business
Investment Act of 1958. Section (2) of 18 U.S.C. s 215 makes it a
federal crime for anyone who
     "as  an  officer, director, employee, agent or attorney
     of  a  financial  institution,  corruptly  solicits  or
     demands  for  the benefit of any person,  or  corruptly
     accepts or agrees to accept anything of value from  any
     person,  intending  to  be influenced  or  rewarded  in
     connection  with  any business or transaction  of  such
     It  may  be  unrealistic to expect Tessler to admit  to  Bua
conduct  that could arguably expose Tessler to prosecution  under
18 U.S.C. s 215.
                    (3)  Bua's Investigation of Hamilton's Claims
                         About Jonathan Ben Cnaan of 53rd Street
     In   his  December  1989  affidavit,  Hamilton  recounts   a
conversation  with  Jonathan Ben Cnaan of 53rd  Street  Ventures.
According  to  Hamilton,  Ben Cnaan  disclosed  to  Hamilton,  in
October 1983, a meeting that Ben Cnaan had had in September  1983
in  New  York City with someone whom Ben Cnaan described  at  the
time  as  a  businessman with ties to the highest  level  of  the
Reagan  Administration. Ben Cnaan said that the  businessman  had
told 53rd Street Ventures about Hadron's acquisition overture  to
INSLAW  in April 1983; about his absolute determination  to  gain
control  of  the  PROMIS software for use in  federal  government
contracts; about the contract disputes having arisen in  INSLAW's
contract  with  DOJ following INSLAW's refusal  to  sell  out  to
Hadron;  and  about the fact that those disputes would  never  be
able  to be resolved as long as INSLAW refused to let the unnamed
businessman use PROMIS for federal government contracts.
     Bua  describes at length his efforts to find Ben  Cnaan.  He
states that he would have liked to have talked with Ben Cnaan but
then implies that it is not that important because Earl Brian has
already  denied being the businessman depicted in the  statements
attributed  to  Ben  Cnaan,  and,  moreover,  Hamilton  does  not
actually quote Ben Cnaan as claiming that the unnamed businessman
was Earl Brian.
     Earl  Brian,  Dominick Laiti, and Paul Wormeli were  in  New
York City the very same month that Ben Cnaan had the meeting with
the  unnamed businessman. Brian was, according to the Bua Report,
on  the  Board of Directors of the National Association of  Small
Business  Investment Companies. 53rd Street Ventures is  a  Small
Business Investment Company.
     Conducting  a  sworn interrogation of Ben Cnaan,  under  the
circumstances, would have been extremely important. If Ben  Cnaan
were  to  identify  either Earl Brian or Dominick  Laiti  as  the
businessman to whom he referred in his October 1983 meeting  with
William  Hamilton and if Ben Cnaan would confirm the  essence  of
the  statements  attributed to him in Hamilton's affidavit24,  it
would  directly  tie Earl Brian and Hadron into the  DOJ  use  of
contract  disputes with INSLAW as leverage to help  Hadron  wrest
control of the PROMIS software.
     Ben  Cnaan  apparently visited New York City in early  1993,
from  Israel  where  he currently lives. With  a  modest  effort,
INSLAW  was  able  to  discover Ben Cnaan's current  address  and
telephone number in Israel:
     Ha' Adamit #6
     Herzlia, Israel
     Telephone 258-7787.
               (c)  The     Systems    and     Computer
                    Technology, Inc. (SCT) Connection
     Bua  professes  not to understand how INSLAW's  "allegations
about SCT would fit into INSLAW's theory of a Hadron conspiracy."
Bua  further states that "there would be no apparent  reason  for
Brian or Hadron to be attempting to control INSLAW (through  SCT)
in 1986."
     SCT  launched  a "hostile takeover" bid for  INSLAW  in  May
1986,  the  very month that DOJ issued its Request for  Proposals
for  the  Uniform Office Automation and Case Management  Project,
code-named Project EAGLE. This was the largest procurement in DOJ
history. INSLAW believes that the PROMIS software was intended by
DOJ  to  be the uniform case management software for the  Project
EAGLE   computers.25   INSLAW   further   believes   that    Earl
Brian's  Hadron,  Inc.  was  originally  slated  to  receive  the
Project  EAGLE  contract award by DOJ as a sweetheart  gift  from
Brian's  long-time  friend, then Attorney General  Meese.  INSLAW
believes  that Brian and DOJ abandoned the plan to use Hadron  as
the  vehicle for the contract in the fall of 1985, following  the
failure of the covert DOJ effort to force INSLAW's liquidation.
     INSLAW  believes that, by January 1986, Brian  and  DOJ  had
substituted   Tisoft,  Inc.  as  the  vehicle  for  the   planned
sweetheart   Project  EAGLE  award.26  That  month,  Tisoft   was
awarded  a  $30  million  computer systems  contract  by  Meese's
Justice  Department,  and  Tisoft also amended  its  articles  of
incorporation to permit the sale of common stock to  new  outside
owners who would then have majority control of the company.
     Margaret  Wiencek,  the  former Director  of  Administrative
Services  at  Earl Brian's Financial News Network  (FNN),  claims
that  Patrick R. Gallagher of Tisoft, Inc. was also  someone  who
regularly  telephoned the chairman's office at Earl  Brian's  FNN
Headquarters in Los Angeles during at least 1987.
     INSLAW believes that DOJ encouraged the SCT hostile takeover
bid  for  INSLAW in 1986 in order to preclude INSLAW from seeking
redress in the courts for DOJ's 1983 theft of the PROMIS software
and  to  remove  INSLAW as an obstacle to the  planned  award  of
Project EAGLE to Tisoft and the planned implementation of  PROMIS
on the Project EAGLE computers.
     Bua  placed  quotation marks around the  word  "hostile"  in
referring  to  SCT's  effort to purchase INSLAW  in  early  1986,
suggesting that he doubted INSLAW's characterization of  the  SCT
initiative  as  a "hostile takeover" initiative.  Through  third-
party discovery in 1987, however, INSLAW obtained an internal SCT
document prepared in conjunction with SCT's investment bankers in
December   1985.  That  SCT  document  uses  the  words  "hostile
takeover" to describe the then-planned effort to acquire INSLAW.

     E.   Bua's   Investigation  of   the   Death   of   the
          Investigative Journalist, Danny Casolaro
          1.   Evidence That Casolaro Broke the  INSLAW
               Case the Week He Died
     In August 1990, Mr. Terry D. Miller, President of Government
Sales  Consultants,  Inc., encouraged a free-lance  investigative
journalist   by   the   name  of  Danny  Casolaro   to   consider
investigating  DOJ's theft of the PROMIS software.  Casolaro  and
Miller  had  previously worked together on the publication  of  a
newsletter  that focused, at least in part, on federal government
computer procurement fraud, and Miller thought Casolaro  had  the
ideal  background for the INSLAW investigation. Miller is also  a
friend of Mr. and Ms. Hamilton.
     On  Saturday, August 10, 1991, approximately one year  after
Casolaro began his full-time, self-financed investigation of  the
INSLAW affair, Casolaro was found dead in the bathtub of his room
in  the  Sheraton Hotel in Martinsburg, West Virginia. Casolaro's
wrists  on  both  arms  had been slashed,  with  almost  a  dozen
slashes, some deep enough to have severed the tendons. The  local
Martinsburg, West Virginia, authorities ruled Casolaro's death  a
     In  the late afternoon of the Monday before his death, i.e.,
on  August  5, 1991, Casolaro had telephoned Miller to  tell  him
that  the INSLAW case, to which Miller had directed him one  year
earlier, had proved to be the story of his lifetime.
     Later  that night, Casolaro telephoned Robert Booth  Nichols
in   Los   Angeles.  Nichols  has  a  background  in  CIA  covert
intelligence operations and, in the course of about 100 hours  of
telephone  conversations with Casolaro  during  the  previous  12
months,  Nichols  had served as a sounding board  for  Casolaro's
probe  of  the clandestine world of U.S. and foreign intelligence
operations. According to Nichols' statement to William  Hamilton,
Monday night's telephone call from Casolaro was the first time in
their  year-long  colloquy  when Casolaro  was  not  seeking  any
information.  Casolaro told Nichols that he had  just  come  back
from a meeting with a source on the INSLAW case, that he now knew
everything  there  was to know about the INSLAW  case,  that  the
Hamiltons  were going to be quite excited, and that Casolaro  had
to  return right away for another meeting with the same source to
collect   the  final  piece  of  documentary  evidence.   Nichols
described Casolaro that night as "euphoric."
     Also  Monday  night, Casolaro met with Ann Klenk,  a  fellow
journalist and long-time friend, at a pub frequented by Casolaro.
According to Klenk, Casolaro said he had just returned from  West
Virginia, where he had met with a source on the INSLAW case,  and
that  he had already broken the INSLAW case, but that he  had  to
return  right away to West Virginia to pick up a final  piece  of
the evidence.
     The  next  day, Tuesday, August 6, 1991, Casolaro telephoned
William  Turner  in Winchester, Virginia, and told  him  that  he
would  be  having  a  follow-up meeting  later  in  the  week  in
Martinsburg, West Virginia, with some employees from  the  office
of  Senator Robert Byrd of West Virginia. Casolaro described  one
of  the  employees  as  a relative of Ms. Barbara  Videnieks  and
further  described that person as his source on INSLAW. According
to                                                        Turner,
Casolaro  asked  him  to remove two numbered and  sealed  packets
of  Casolaro's INSLAW documents from Turner's home safe and bring
them  the 20-mile distance to Martinsburg, West Virginia, on  the
afternoon  of Friday, August 9, 1991 so that Casolaro could  show
them  to  Ms. Videnieks' relative. Ms. Barbara Videnieks  is  the
Chief  of  Staff  to  Senator Robert  Byrd.  Her  husband,  Peter
Videnieks,  was  the DOJ Contracting Officer on  INSLAW's  PROMIS
contract. According to Michael Riconosciuto, Peter Videnieks  was
also   a  close  associate  of  Earl  Brian  in  Brian's  alleged
international  sales  and distribution of  PROMIS.  Ms.  Margaret
Wiencek,  former Director of Administrative Services at Financial
News  Network (FNN) Headquarters in Los Angeles, claims, in sworn
testimony, to have taken telephone messages from Peter  Videnieks
in  1987  in  the  office  of the FNN Chairman.  Earl  Brian  was
Chairman  of FNN in 1987. Both Videnieks and Brian have, however,
denied under oath even knowing each other.
     On  Wednesday,  August 7, 1991, Casolaro socialized  with  a
friend by the name of Ben Mason. Casolaro told Mason that he  had
broken  the  INSLAW  case but had to return to Martinsburg,  West
Virginia,  the  following  day for  a  final  meeting  with  some
individuals with whom he had just recently met.
     On   Thursday,   August  8,  1991,  Casolaro   traveled   to
Martinsburg, West Virginia, and checked into the Sheraton Hotel.
     On  Friday  afternoon,  August  9,  1991,  Turner  met  with
Casolaro  in the parking lot of the Sheraton Hotel and  delivered
both  sealed packets of Casolaro's INSLAW documents, as  well  as
documents  relating  to  Turner's own  case.  Turner's  own  case
involved alleged federal contract fraud at Hughes Aircraft, where
Turner  had  apparently  been employed  as  a  flight  simulation
engineer.  Casolaro reconfirmed to Turner that his  meeting  with
Ms.  Barbara  Videnieks'  relative and one  other  employee  from
Senator  Byrd's  office was still on for Friday  night.  Casolaro
warned Turner "to watch his rear," and made arrangements to  meet
Turner  the following day, Saturday, in the Washington, DC,  area
to celebrate.
     On  Saturday  morning, August 10, 1991, Casolaro  was  found
dead in the bathtub of his Sheraton Hotel room.
     Turner  has  contemporaneous  handwritten  notes  about  his
conversations  with Casolaro on Tuesday and Friday  of  the  week
Casolaro died. Bua neither questioned Turner nor sought copies of
his notes.
     Bua  never  questioned  Terry Miller or  Ben  Mason  either.
Although  Bua  or  one of his Assistant U.S. Attorneys  spoke  by
telephone  with both Ann Klenk and Robert Nichols,  no  one  from
Bua's  team ever attempted to probe their knowledge of Casolaro's
investigative work in the days preceding his death.
     Notwithstanding  these  facts,  Bua  stated  that   he   was
persuaded  from  his review of the investigative records  of  the
local  Martinsburg  authorities "that Mr.  Casolaro's  death  was
fully  and  fairly  investigated and that the conclusion  of  the
local  authorities  that  his  death  was  a  suicide  was  amply
supported by the facts."

     Bua   details  various  items  of  physical  evidence   from
Casolaro's  hotel  room  that he claims  "strongly  supports  the
conclusion  of  the  local  authorities  that  the  death  was  a
suicide." Bua fails, however, to take any cognizance of the  fact
that none of Casolaro's investigative working papers was found in
the  hotel room. Casolaro always carried such files with him, was
seen  leaving Washington for Martinsburg with the files, and  was
seen in Martinsburg with the files. Moreover, the two packets  of
Casolaro's  sensitive INSLAW documents and  the  Hughes  aircraft
documents  that  Turner  claims to have personally  delivered  to
Casolaro  in  Martinsburg, West Virginia, Friday  afternoon  were
also missing.
     Riconosciuto  claimed  in a sworn affidavit,  prior  to  his
arrest  in  early 1991, that Peter Videnieks had  threatened  him
with  prosecution and conviction if he testified about the INSLAW
matter.  Casolaro was evidently having a secret follow-up meeting
in  Martinsburg,  West Virginia, with someone in  Senator  Byrd's
office who is related to Peter Videnieks' wife, Barbara.
     In  a telephone conversation one weekend shortly before  his
death,  Casolaro  read to William Hamilton detailed  biographical
data about various employees in Senator Robert Byrd's office  and
told Hamilton that he believed he could break the INSLAW case  by
penetrating Senator Byrd's office.
     Casolaro  had  told  the Hamiltons of other  connections  to
Peter  and  Barbara  Videnieks and Senator Robert  Byrd's  office
during  the final two months of his life. On June 12,  1991,  for
example, Casolaro said that he had spoken by telephone with Peter
Videnieks  at Videnieks' office at the U.S. Customs  Service  but
that  Videnieks had declined to answer Casolaro's questions about
INSLAW  and had, instead, referred Casolaro to Charles Ruff,  the
Washington,  DC, attorney whom DOJ was paying to represent  Peter
Videnieks in the House Judiciary Committee's investigation of the
INSLAW case.
     Casolaro  also told the Hamiltons about a series of meetings
he  had  had  during the final month of his life  with  a  covert
intelligence operative of the U.S. Army Special Forces whose name
is  Joseph  Cuellar.  According to Casolaro,  Cuellar,  during  a
purportedly  chance encounter at Casolaro's neighborhood  pub  in
mid-July  1991, asked Casolaro what line of work he was  in  and,
upon hearing Casolaro describe his journalistic investigation  of
the  INSLAW case, asserted that he knew all about INSLAW  because
Peter  Videnieks  was  one of his closest friends.  According  to
Casolaro,  Cuellar also stated that his ex-wife  worked  for  Ms.
Barbara  Videnieks  in Senator Byrd's office. Casolaro  told  the
Hamiltons  that  Cuellar had later persuaded Peter  Videnieks  to
meet Casolaro and discuss the INSLAW case with him. The Hamiltons
never heard whether the meeting actually took place, however.
     Lynn Knowles, a friend of Casolaro's, attended at least  two
of the meetings between Casolaro and Cuellar. Bua never sought to
interview  Knowles, and there is no reason to  suspect  that  Bua
sought  to interrogate Cuellar either. She told William  Hamilton
that  she and Cuellar had spoken by telephone several days  after
Casolaro's death and that Cuellar said the following to  Knowles,
in words or substance:
     What Danny Casolaro was investigating is a business. If
     you  don't  want  to  end up like  Danny  or  like  the
     journalist  who  died a horiffic death in  Guatemala,27
     you'll  stay  out  of this. Anyone who  asks  too  many
     questions will end up dead.
          2.   The  Question of the FBI's Role  in  the
               Investigation of Casolaro's Death
     Bua also absolves DOJ of having exerted any influence on the
investigation executed by the West Virginia authorities,  "beyond
the  normal  and  expected  assistance law  enforcement  agencies
typically  provide  one  another."  Bua  further  describes  this
exception  as  "assistance and information  sharing  between  the
local authorities and the regional FBI office..."
     Bua  apparently  did not look into the  FBI's  role  in  the
execution  of  a  search  warrant in  William  Turner's  home  in
September  1991  or in the refusal, long after  criminal  charges
against  Turner  were  dismissed, to return to  Turner  documents
taken  from  Turner's home safe. About six weeks after Casolaro's
death,  Turner,  who  has one artificial leg,  was  arrested  and
charged  with  the robberies of two local area banks.  That  same
month,  the FBI assisted local authorities in executing a  search
warrant  in  Turner's home. The official inventory of the  search
lists  the  seizure  of  a  spiral notebook  that  Turner  claims
contains detailed notes about his collaboration with Casolaro and
that  Turner says was taken by the FBI from Turner's  home  safe.
This  is the same home safe where Turner claims he stored  sealed
packets of Casolaro's sensitive documents on INSLAW.
     The  local  authorities  dropped the  bank  robbery  charges
against  Turner  after keeping him in pre-trial incarceration  in
the  county jail for over six months. FBI "enhancements"  of  the
photographs  taken by hidden bank cameras reportedly  established
that Turner was not the robber. At a preliminary hearing, an  eye
witness  to  one of the robberies, a bank teller, also reportedly
acknowledged that Turner could not have been the robber  she  saw
run  out the bank because his artificial leg would obviously have
prevented Turner from running.
     Turner  claims  that  the local FBI  office  in  Winchester,
Virginia,  has  refused to return the documents seized  from  his
home in September 1991, on the grounds that the Martinsburg, West
Virginia,  authorities  do  not  wish  to  have  those  documents
returned.  On  May 26, 1993, Turner filed a motion  in  the  U.S.
District   Court  for  the  Western  District  of   Virginia   in
Harrisonburg, Virginia, seeking to compel the FBI to  return  his
documents and other personal property. The motion is pending.
     In  its  September  1992  Investigative  Report,  the  House
Judiciary Committee stated that it had deposed for two  days  FBI
Special  Agent Thomas Gates, who had been discussing  the  INSLAW
investigation  with  Casolaro during  the  final  four  weeks  of
Casolaro's life. Gates evidently testified that Casolaro had told
him  about a specific threat on his life, shortly before Casolaro
was  found  dead.  Gates also testified to  the  House  Judiciary
Committee               that               the                FBI
may  have  jurisdiction  to investigate the  possible  murder  of
Casolaro   under  the  Interstate  Transportation   in   Aid   of
Racketeering (ITAR) statute.
     Bua,  apparently,  inexplicably  failed  to  interview   FBI
Special  Agent  Thomas Gates. Notwithstanding this  failure,  Bua
makes the following statement in his report on page 247:
     A  private  citizen's death, whether  a  suicide  or  a
     murder,  is  outside  the normal  jurisdiction  of  the
     federal  government. Instead, it is a  state  or  local
     matter.  Accordingly, we find nothing  unusual  in  the
     fact   that   DOJ  did  not  undertake  to  investigate
     Casolaro's death.
     F.   Bua's  Comments  About the Alleged  Sham  Contract
     In   Section  III,  C.1.,  INSLAW  details  Bua's  seemingly
superficial investigation of specific allegations from a credible
source  that  Presidential appointee D. Lowell Jensen  engineered
INSLAW's  contract disputes in the spring of  1983  in  order  to
force  INSLAW out of business so that DOJ's PROMIS-based business
could be awarded to political friends and supporters of the  then
current administration. As demonstrated in this section, there is
an  obvious  contrived quality to each of the two major  contract
disputes  and  additional evidence suggestive of a key  role  for
Jensen in either engineering the dispute, e.g., the dispute about
the  amount  of  fee owed INSLAW in light of the termination  for
convenience  of the word processing part of the contract,  or  in
perpetuating   a  wholly  contrived  dispute,  e.g.,   apparently
refusing to allow DOJ attorney Janis Sposato to act independently
in  seeking to resolve the computer time-sharing billing  dispute
on the merits.
     In  Section  III,  D.2(3), INSLAW details Bua's  failure  to
interrogate  Jonathan  Ben  Cnaan  about  what  he  was  told  in
September   1983  by  someone  he  would  only  identify   as   a
"businessman  with  ties  to  the highest  level  of  the  Reagan
Administration"  who was determined to wrest  control  of  PROMIS
from  INSLAW for use in federal government contracts. Ben  Cnaan,
in  a  meeting with William Hamilton in October 1983, quoted  the
unnamed  businessman as boasting that INSLAW had  been  hit  with
contract  disputes  at  DOJ  right after  INSLAW  refused  to  be
purchased  by Earl Brian's Hadron and further boasting  that  the
contract  disputes would prove insoluble unless and until  INSLAW
agreed  to  allow the businessman to use the PROMIS  software  in
federal government contracts.
     Either  of the two aforementioned investigative leads could,
if  properly pursued, have produced external evidence in  support
of  INSLAW'S claim that the contract disputes that arose  in  the
spring  of  1983 were sham disputes concocted in order  to  drive
INSLAW  out  of business so that DOJ could award the PROMIS  case
management software business to political friends and supporters.
     Bua  stated that he "did not believe it was appropriate  ...
to  attempt  to determine the esoteric government cost accounting
issues..." underpinning those contract disputes, but that he  did
examine  the  disputes  sufficiently in  order  to  be  able  "to
determine whether the DOJ's positions and actions leading  up  to
the  parties'  disputes  were  so  clearly  baseless  or  without
foundation  as  to give rise to a reasonable inference  that  the
origins  of  the  disputes must have been motivated  by  improper
purpose and a desire to force INSLAW into bankruptcy."
          1.   DOJ's  Refusal, Apparently at the Behest
               of   Presidential  Appointee  D.  Lowell
               Jensen,  to Resolve, on the Merits,  Its
               Main  Contract  Dispute with  INSLAW,  a
               Dispute That is Self-Evidently Contrived
     Bua's  inquiry  led  him to conclude that "the  government's
positions about overcharging and cost overruns were founded  upon
legitimate,   good   faith   concerns   and   the    desire    to
   protect  the  government's  interests,  and  not  out  of  the
desire to bankrupt INSLAW or to force its liquidation."
     Bua bases his conclusion in part, at least, on the fact that
both  DOJ's  Audit  Staff and the Defense Contract  Audit  Agency
(DCAA) agreed that INSLAW's computer time-sharing costs under its
PROMIS  Implementation  Contract were "essentially  unauditable."
Moreover, Bua quotes DCAA as finding that DOJ overpaid INSLAW for
the computer time-sharing services by approximately $590,000.
     In  examining  the  criticism that INSLAW's  computer  time-
sharing  costs are "essentially unauditable," it is important  to
position that criticism in context: The U.S. Government has never
had  any  problem  auditing the costs in INSLAW's  computer  cost
center,  and  there  has  never been  any  material  disagreement
between DOJ and INSLAW on the "actual and allowable" costs in the
computer cost center. For the peak year of INSLAW's PROMIS  time-
sharing services under the DOJ contract, i.e., Fiscal Year  1983,
the  computer cost center had slightly more than $2.5 million  in
"actual costs, allowable under U.S. Government contracts."  (This
amount  includes  $344,229 of Fiscal Year  1982  computer  center
costs  that  DOJ  "carried forward" into  Fiscal  Year  1983  for
reimbursement purposes.)
     Almost  all of the business of INSLAW's computer  center  in
1983 was with various U.S. Government customers, and, in light of
the fact that INSLAW and the U.S. Government have always been  in
basic  agreement  about  the  amount of  "actual  and  allowable"
computer center costs that fiscal year, one might reasonably  ask
what is the problem.
     The problem is what subset of the $2.5 million in actual and
allowable computer center costs during Fiscal Year 1983 should be
allocated to one particular U.S. Government contract, i.e., DOJ's
PROMIS Implementation Contract.
     When  DOJ  and  INSLAW negotiated the PROMIS  Implementation
Contract  during  the winter of 1982, DOJ officials  told  INSLAW
that  DOJ  wished  to  pay only for successful  use  of  INSLAW's
computer  time-sharing  services by U.S.  Attorneys'  Offices  as
measured  by such indices as the number of successfully completed
update or inquiry transactions and the number of devices used  to
access the time-sharing service by the U.S. Attorneys' Offices.28
DOJ  told  INSLAW, further, that it would not reimburse  computer
time-sharing  costs except in relationship to  such  measures  of
successful  use  of the time-sharing service by  U.S.  Attorneys'
     Based  on these DOJ guidelines, INSLAW and DOJ negotiated  a
time-sharing  billing  formula that both parties  believed  would
fairly  compensate INSLAW for its expected computer  time-sharing
costs  by measuring not costs, but the aforementioned indices  of
successful  use  of  the PROMIS time-sharing  service.  Once  the
parties to a contract negotiate the terms for the computer  time-
sharing  billing formula or algorithm, the vendor writes a  piece
of  computer software that automatically keeps track of the  very
indices    that    the   parties   have   agreed    will    serve
as  the  basis  for the billings. Conversely, the  piece  of  the
computer software is not written to track factors that are not to
be  taken  into  consideration in computing  the  computer  time-
sharing  billings  such  as the subset of the  computer  center's
actual and allowable costs that are allocable on any given day to
the PROMIS Implementation Contract.
     DOJ  has  consistently refused to acknowledge the fact  that
the  reason  that  the  subset of INSLAW's actual  and  allowable
computer  center costs that should properly be allocated  to  the
PROMIS  Implementation  Contract cannot  be  verified  through  a
standard  U.S. Government cost incurred audit is that  the  time-
sharing billings were not supposed to be either based on incurred
costs or subject to an incurred cost audit.
     In  1985, Deputy Attorney General D. Lowell Jensen arranged,
at  INSLAW's request, an effort to negotiate a settlement of  the
computer  time-sharing billing question and  the  other  disputes
under  the  contract. Janis Sposato, who chaired the negotiations
for  DOJ, insisted on DOJ's right to try to reconstruct, by  rule
of  thumb, the estimated subset of actual and allowable  computer
center costs for Fiscal Year 1983 that were actually incurred  in
performance of the computer time-sharing service under the PROMIS
Implementation Contract. DOJ and INSLAW had about 10  negotiation
sessions  in  1985,  with most of the time  spent  on  trying  to
reconstruct  the  actual time-sharing costs  for  1983.  DOJ  and
INSLAW  had  already managed to establish the  reasonableness  of
most of the Fiscal Year 1983 computer time-sharing billings under
the  DOJ contract when Sposato and INSLAW discovered another cost
category  that  was sufficiently large by itself  to  remove  any
remaining  question  about  the  billings  under  the  negotiated
formula.29  In  other  words, the negotiations  had  led  to  the
inescapable  conclusion that DOJ would not  have  overcompensated
INSLAW for computer time-sharing costs during Fiscal Year 1983 if
DOJ had honored its Negotiated Agreement on computer time-sharing
billings under that contract.
     Instead  of disposing of the computer time-sharing question,
however,  Sposato  announced  shortly  thereafter,  in  words  or
substance,  as follows: "My management upstairs is  unwilling  to
allow  me  to  make any more concessions." At the  time,  Sposato
reported   directly  to  the  Assistant  Attorney   General   for
Administration,  whose  offices  were  on  the  same   floor   as
Sposato's. That individual, however, reported, in turn,  directly
to  Deputy  Attorney  General Lowell Jensen, whose  offices  were
several floors upstairs. INSLAW inferred then and infers now that
Sposato  was alluding to Deputy Attorney General Lowell  Jensen's
unwillingness to permit a resolution on the merits of the  Fiscal
Year  1983 computer time-sharing issue because it was DOJ's  main
"fig  leaf"  for its wrongful withholding of payments  under  the
     Although Sposato did not disclose it to INSLAW, DOJ  already
knew that INSLAW's computer time-sharing billings for Fiscal Year
1983  were reasonable. In 1987, INSLAW obtained through discovery
an  internal  DOJ  memorandum authored in 1981 by  the  Assistant
Attorney General for Administration, purporting to estimate  what
it       should       cost      for       a       vendor       in
Washington,  DC,  to provide 12 months of PROMIS  computer  time-
sharing  services  to  the  very  same  U.S.  Attorneys'  Offices
supported  by  INSLAW  in Fiscal Year 1983. DOJ's  "should  cost"
estimate  was slightly higher than INSLAW's billings  for  Fiscal
Year   1983  under  the  Negotiated  Agreement  for  time-sharing
billings. The DOJ memorandum also explicitly anticipated the need
for the very kinds of contractor technical support personnel that
DOJ  had  ignored  in  determining that INSLAW's  computer  time-
sharing costs were excessively high.
     How, then, did DCAA decide that DOJ had overpaid INSLAW  for
such  services?  Number  one, DOJ strenuously  resisted  INSLAW's
repeated  requests before the Department of Transportation  Board
of  Contract  Appeals (DOTBCA) to produce to INSLAW and  to  DCAA
DOJ's  records  and notes on the 1985 so-called  negotiations  on
this  very  subject.  DOJ never produced the documents,  and  the
DOTBCA  judge declined to order DOJ to produce them. Number  two,
DCAA,  in  applying  its own rules of thumb  without  talking  to
INSLAW, made some very significant mistakes of fact. Although Bua
makes  no  mention  of  it, INSLAW filed before  DOTBCA  a  sworn
affidavit  from  the senior DCAA auditor on INSLAW  acknowledging
such  material errors of fact in the DCAA audit and stating  that
DCAA   "should   have   considered  the   materiality   of   such
reallocations  of  cost once it had been advised  of  the  issues
above  and  of  the  cost  impact to  the  PROMIS  Implementation
Contract for Fiscal Year ended 30 September 1983."
     The  total  costs under the three-year PROMIS Implementation
Contract  that are in dispute between the DCAA audit  report  and
INSLAW  are about $1.2 million. The computer timesharing  billing
question alone accounts for all but $100,000 of that amount.
          2.   Presidential Appointee D. Lowell  Jensen
               Leads DOJ Effort to Withhold Payment  of
               INSLAW's  Profit by Blaming  INSLAW  for
               DOJ's  Own Delays in the Word-Processing
               Part of the INSLAW Contract
     DCAA and INSLAW also have a disagreement on one other issue:
the  amount  of fee or profit payable to INSLAW under the  PROMIS
Implementation  Contract.  As  with the  negotiated  time-sharing
billing  algorithm,  the  amount of fee earned  is  not  properly
subject  to an incurred cost audit. INSLAW is claiming $1,145,000
in fee, and DCAA has recommended $687,000 in fee, a difference of
     The  amount of fee earned by INSLAW is related primarily  to
the legal effect on "target costs" under INSLAW's contract of the
DOJ's  February  1984  termination, for the  convenience  of  the
government,   of  the  word  processing  part   of   the   PROMIS
Implementation Contract. In other words, it is primarily a  legal
question,  not  an  incurred cost audit  question.  As  with  the
computer  time-sharing billing issue, however, an honest decision
by  DOJ  would expose the truth about the contrived and  wrongful
basis  for the withholding and, thereby, deprive DOJ of its other
principal "fig leaf. "
     DOJ had required the winning vendor to implement in each  of
the  70  smaller U.S. Attorneys' Offices, on government-furnished
word  processing machines, a rudimentary case management software
capability.  In February 1984, Presidential appointee  D.  Lowell
approved   a  DOJ  decision  to  terminate  the  word  processing
part  of the contract for the convenience of the government.  The
legal  effect of a convenience termination is that the contractor
bears no financial responsibility for the partial termination.
     In  December 1983, however, Jensen had secretly pre-approved
a  plan  for DOJ Contracting Officer Peter Videnieks to terminate
INSLAW's  PROMIS  Implementation  Contract,  apparently  in   its
entirety,  for  INSLAW's alleged default on the  word  processing
part of the contract. INSLAW did not find out about this until it
obtained DOJ documents in litigation discovery in 1987.
     What  prompted the Jensen decision to transform an apparent,
planned   complete  termination  for  default  into   a   partial
termination for convenience was an internal February  1984  legal
opinion   by  DOJ's  internal  contract  administration  counsel,
William  Snider. Snider pointed out that DOJ could not sustain  a
case against INSLAW for delay in the word processing phase of the
contract  because DOJ itself had been late in selecting the  word
processing   hardware  for  this  portion  of  the  contract,   a
prerequisite to INSLAW's ability to begin the work,  and  because
DOJ had failed thereafter to negotiate with INSLAW a new, legally
binding schedule for the word processing part of the contract.
     DOJ  Administrative  Counsel  William  Snider  authored  the
internal  legal opinion in the month of February 1984,  when  the
Senate   Judiciary  Committee  commenced  its  hearings  on   the
confirmation  of Edwin Meese as Attorney General  of  the  United
States,  and when Judiciary Committee member, Senator Max Baucus,
sent a team of General Accounting Office auditors into DOJ on  an
emergency   investigation  of  INSLAW's   PROMIS   Implementation
Contract.  Senator Baucus' office had received a tip from  a  DOJ
whistleblower  to the effect that as soon as Meese was  confirmed
as  Attorney General, he and Jensen planned to award  a  "massive
sweetheart contract" to unnamed "friends" to implement the PROMIS
software in every litigative office of DOJ.
     Jensen's  wrongful  role in the word processing  dispute  is
even  more  obvious  than his role in the  computer  time-sharing
billing  dispute. DOJ has been unwilling, however, to  admit  the
increasingly  inescapable fact that DOJ officials  concocted  the
contract  disputes in order to get leverage over INSLAW in  DOJ's
theft of the PROMIS software.
     G.   Bua's  Investigation into Possible DOJ  Complicity
          in   the   Failure  of  Judge  Bason   to   Obtain
          Reappointment to the U.S. Bankruptcy Court
     A Merit Selection Panel, headed by U.S. District Judge Norma
Johnson,  was  appointed in 1987 to make recommendations  to  the
D.C.  Judicial  Council,  as well as to the  ultimate  appointing
authority,  the  U.S.  Court  of  Appeals  for  the  District  of
Columbia,  about  the  ranking of various  applicants,  including
incumbent Judge George F.. Bason, Jr., for the new, 14-year  term
of sole U.S. Bankruptcy Judge for the District of Columbia.
     The  Merit Selection Panel gave its number one ranking to  a
DOJ  attorney, S. Martin Teel, who had no judicial experience and
very  little bankruptcy law experience. Teel had represented  the
U.S.  Government  before  Judge Bason in  the  INSLAW  bankruptcy
proceeding in an attempt in 1987 to convince Judge Bason to force
INSLAW into liquidation.
     On  September 18, 1987, while the Merit Selection Panel  was
sitting,  Judge Bason announced his oral ruling in the  adversary
proceeding of INSLAW, Inc. v. the U.S. Department of Justice.  In
that   ruling,  Judge  Bason  found  that  DOJ  officials  "took,
converted,  stole" INSLAW's proprietary PROMIS computer  software
product  "through  trickery, fraud and deceit."  S.  Martin  Teel
argued  for INSLAW's liquidation before Judge Bason approximately
a month after the aforementioned oral ruling.
          1.   The  Merit  Selection  Panel  Determined
               That It Would Be Inappropriate to Permit
               Judge Bason's Inslaw Ruling to Influence
               Its Evaluation of Bason
     Bua  reports that the Panel members agreed that  the  Inslaw
opinion should not influence their evaluation of Judge Bason  and
that based on his inspection of the notes of the Panel and of the
Judicial Council, "There is no indication that the Inslaw  ruling
played any role in the process."
     Bua   noted   that   the  Merit  Selection  Panel   extended
invitations to both DOJ and to INSLAW counsel Charles R. Work  to
appear  before  the  Panel to discuss their respective  views  of
Judge Bason and that INSLAW counsel Charles Work did make such an
appearance, but that DOJ declined the opportunity. Bua then makes
the following statement:
     It  would  be  odd,  however, if DOJ  had  foregone  an
     opportunity  to fully express its views of Judge  Bason
     in   an   ex-parte   proceeding  with   a   pledge   of
     confidentiality, in favor of a covert mission to unseat
     him. We found no evidence of any such covert effort  by
     In view of Bua's aforementioned statement that Panel members
did  not consider it appropriate for Judge Bason's adverse ruling
against  DOJ to influence their evaluation of Bason's  candidacy,
DOJ would have been well advised not to have proceeded openly. As
is  explained hereafter, Bua found that DOJ did, in fact, wish to
unseat      Judge      Bason,     and      that      one      DOJ
attorney,  at  least,  conveyed  his  negative  view   of   Judge
Bason directly to the Chair of the Merit Selection Panel.
          2.   DOJ   Civil  Division  Attorney   Stuart
               Schiffer, Currently the Acting Assistant
               Attorney General for the Civil Division,
               Assumes  the Leadership Role to Separate
               the Inslaw Case from Judge Bason
     According to the House Judiciary Committee's September  1992
Investigative Report entitled The INSLAW Affair, Deputy  Attorney
General Arnold Burns, in approximately July 1987, asked the Civil
Division  to "consider initiatives for achieving a more favorable
disposition"  of  the INSLAW adversarial proceeding  against  DOJ
being tried before Judge Bason. The Committee also reported that,
based  on  Burns'  request,  Stuart  Schiffer,  Deputy  Assistant
Attorney  General  in the Civil Division, initiated  research  by
Civil  Division  attorneys  in  July  1987  "to  investigate  the
possibility  of having Judge Bason disqualified from  the  INSLAW
case on the grounds of bias."
          3.   Schiffer Had a Long-Term Friendship with
               the Chair of the Merit Selection Panel
     In  addition to being the chief DOJ official concerned  with
finding  a  way  "to  achieve  a more favorable  disposition"  by
separating the INSLAW case from Judge Bason," Schiffer also had a
long-term  personal  relationship with Judge Norma  Johnson,  the
Chair  of  the  Merit Selection Panel. For example, according  to
Bua, "Judge Johnson and Stuart Schiffer were office partners when
both  began their legal careers as staff attorneys with  DOJ   in
the early 1960's," and "they have stayed in touch over the years,
mostly when Judge Johnson has called Schiffer to recommend one of
her clerks for employment with DOJ."
     According  to  Bua, "Judge Johnson did call Schiffer  during
the  merit selection process," but Judge Johnson was only seeking
"Schiffer's candid appraisal of two candidates from DOJ who  were
in  the panel's short list." According to Bua, Judge Johnson told
Schiffer "that she was not calling about Bason and that  she  did
not  want to hear anything about Bason," and that "Schiffer  said
nothing about Bason."
          4.   After  Discussing the Inslaw  Case  with
               Schiffer, Another DOJ Attorney  Contacts
               the  Chair of the Merit Selection  Panel
               about INSLAW
     According  to Bua, Schiffer did make known "his  displeasure
with  Bason"  to  another  DOJ  attorney,  Royce  Lambreth,   who
subsequently turned over directly to Judge Johnson a  copy  of  a
transcript  of  Judge  Bason's September  25,  1987  oral  ruling
against DOJ, using "a tone of voice that allowed Judge Johnson to
surmise  Lambreth's  negative view of  Bason's  ruling."  Shortly
thereafter, Lambreth was confirmed as a U.S. District  Judge  for
the District of Columbia.

     According  to  Bua,  "although Judge Johnson  presented  the
opinion  without commentary, at least one Panel member  perceived
that  the  opinion was presented, not because it  revealed  great
wisdom  and  scholarship but because it reflected unfavorably  on
Judge Bason's suitability for the bench."
     According  to  Bua, Judge Lambreth cannot  recall  where  he
obtained  the  transcript of Judge Bason's  oral  ruling  in  the
INSLAW  case.  Retired  Assistant U.S. Attorney  Froman  "has  no
recollection of being asked to obtain or of obtaining the  INSLAW
ruling,"  although  she  was  the subordinate  to  Lambreth  with
responsibility for maintaining the file on INSLAW within the U.S.
Attorney's Office for the District of Columbia.
     Until the Bua investigation, Judge Johnson, according to the
Bua Report, had maintained to the Senate Permanent Investigations
Subcommittee  and possibly also to the House Judiciary  Committee
"that she had no contacts with DOJ regarding Judge Bason and  she
received no negative input from DOJ regarding the INSLAW case."
     Bua states that "the Senate and the House Reports both found
no  evidence that anyone from DOJ had attempted to influence  the
selection  process."  According to the Bua Report,  however,  the
failure  of Judge Johnson to recall the communication  from  then
DOJ   Attorney  Royce  Lambreth  would  have  deprived  the   two
investigations of any knowledge of just such an attempt.
       "It  was  the  only judicial opinion that was circulated,"
according  to  the  Bua Report. During his  tenure  on  the  U.S.
Bankruptcy  Court,  Judge Bason reportedly had  approximately  70
published opinions.
     Bua  absolves Royce Lambreth of any questions of impropriety
in  regard to his previously undisclosed communications with  the
Chair  of the Merit Selection Panel about his criticism of  Judge
Bason's  ruling  against DOJ in the INSLAW case.  Bua  separately
absolves Lambreth whether he was acting in his then capacity as a
DOJ  attorney  or in his then future capacity as a U.S.  District
Court  judge.  Bua  was apparently ready to absolve  Lambreth  of
wrongdoing irrespective of any final determination of  the  facts
about his motivation.
          5.   The    Attempt    by    Judge    Bason's
               Predecessor, Roger Whelan, to  Disparage
               Bason  to the Merit Selection Panel  for
               the   Administrative  Disarray  in   the
               Clerk's  Office That the Chief Judge  of
               the  U.S. District Court Traces  to  the
               Tenure of Whelan Himself
     The  House  Judiciary Committee stated  as  follows  in  its
September  1992 Investigative Report: "According to  [then  Chief
U.S.  District]  Judge Robinson, Judge George Bason  inherited  a
mess  (administratively) in the clerk's office when he took  over
from Judge Roger Whelan."
     According  to the House Judiciary Committee's report,  Chief
Judge  Robinson  also stated that "Judge Bason  was  getting  the
system  under  control"..." by May 1986,  and  so  reported  that
fact  in  the  Judicial Conference report for  the  D.C.  Circuit
that  year." The Committee also quotes Mr. Martin Bloom, who took
over  as  clerk of the D.C. Circuit Bankruptcy Court in 1986,  to
the effect that by "the latter part of 1987, administratively,  I
think the court was up to par. "
     With  Chief Judge Aubrey Robinson blaming the administrative
problems in the bankruptcy court clerk's office on the tenure  of
former  Judge Roger Whelan and with both Judge Robinson  and  the
new   clerk,  brought  in  by  Judge  Bason,  agreeing  that  the
administrative  problems had been cured  at  the  latest  by  the
latter part of 1987, it is curious that the Merit Selection Panel
had  concluded that the administrative problems still existed and
that they were the fault of Judge Bason. Even more disturbing  is
the  evidence  from  the Bua Report that the Panel  reached  this
conclusion  in large part on the basis of ex-parte communications
from Judge Whelan himself:
     One  lawyer who commented negatively about Judge  Bason
     to the Panel was Roger Whelan, the bankruptcy judge who
     preceded Bason.
     What is relevant is the perception that Judge Bason was
     a poor administrator. That perception, accurate or not,
     was  made  known to the Panel at least by former  Judge
     We  note only that the Panel's apparent perception that
     Judge  Bason was an inefficient administrator  was  not
     totally  baseless,  and,  more  importantly,  was   not
     attributable to a DOJ campaign against Bason. The Panel
     had   heard   that  criticism  at  least  from   former
     Bankruptcy Judge Whelan ...
     The  Bua  Report  makes  it  clear  that  Whelan's  ex-parte
criticisms  of  Judge  Bason to the Merit  Selection  Panel  were
influential  in  the Panel' s deliberations about  Judge  Bason's
suitability  for reappointment. This fact makes it  most  unusual
that  the  Panel failed to interview any of the individuals  most
responsible  for the administration of the court  about  Whelan's
allegations that Judge Bason was a poor administrator.  According
to  the  House Judiciary Committee's September 1992 Investigative
Report,  the  Panel  failed to interview Judge Bason,  Bankruptcy
Court  Clerk Martin Bloom, the former bankruptcy court clerk,  or
Chief  Judge  Robinson about Whelan's representations  concerning
Judge  Bason's  responsibility for the  administrative  problems.
Moreover,  according to the Committee, the Panel also  failed  to
examine  any  statistics  in order to determine  empirically  the
administrative condition of the court.
          6.   At   the  Time  of  Whelan's  Effort  to
               Discredit  Judge  Bason  to  the   Merit
               Selection Panel, Whelan Was Representing
               One  of  INSLAW's Creditors, a  Creditor
               That  Appeared  to Have Been  Acting  in
               Collusion with DOJ in the INSLAW Affair
     During 1987, Roger Whelan became counsel of record for  AT&T
in  the  INSLAW bankruptcy. AT&T has employed no fewer than  five
law  firms  of  record to represent its interests in  the  INSLAW
bankruptcy. AT&T's interests arose from its having contracted  in
August  1984  with  INSLAW  to port the  INSLAW  case  management
software  for operation on AT&T's then-new line of mini-computers
and   from   AT&T's   having  advanced  to  INSLAW   that   month
approximately  $380,000  to  perform  the  software  port.   AT&T
expected to recover the advance from future royalties payable  to
INSLAW  on  the  basis of AT&T's sale of the INSLAW  software  to
AT&T's law firm customers.
     On  February  8,  1985,  the  day  after  INSLAW  filed  for
bankruptcy protection, AT&T's first outside counsel in the INSLAW
bankruptcy  proceeding filed his Notice of  Appearance  with  the
U.S.  Bankruptcy  Court  in Washington,  DC.  Kenneth  Rosen  had
previously been employed in DOJ's U.S. Trustee's Office  for  the
Southern  District  of New York under Cornelius  Blackshear,  and
Blackshear's then First Assistant Harry Jones.30 In a deposition,
Jones, whom Bankruptcy Judge Bason ruled was supposed to relocate
temporarily  to Washington, DC, in 1985 in order to force  INSLAW
into a Chapter 7 liquidation, acknowledged that he and Rosen  had
continued  a close social relationship since working together  in
the  DOJ  Trustee's  Office in New York  City,  but  denied  ever
discussing the INSLAW matter with Rosen
     AT&T  had  become  a member of INSLAW's Unsecured  Creditors
Committee  in  an  unusual fashion, through assistance  from  DOJ
itself. DOJ's U.S. Trustee's Office for the Washington, DC,  area
appointed  the  Unsecured Creditors Committee from the  creditors
listed  by  INSLAW,  in a mandatory filing  with  the  bankruptcy
court, as the 20 largest unsecured creditors. AT&T was not on the
INSLAW  list. After announcing the appointment of the  Committee,
DOJ's Trustee's Office announced the supplementary appointment of
AT&T to the Committee.
     Between February and August 1985, when the covert DOJ scheme
to  force  INSLAW  into  liquidation was  under  way,  Rosen  was
extraordinarily  active  in the INSLAW bankruptcy.  For  example,
Rosen deluged INSLAW, its bankruptcy counsel, the counsel for the
Unsecured  Creditors  Committee, and the  bankruptcy  court  with
written  and/or telephonic questions and objections  relating  to
the  most  routine business decisions by INSLAW such as hiring  a
replacement  financial  controller.  Rosen's  behavior   was   so
striking  that  it  elicited  two  letters  of  rebuke  from  the
Unsecured  Creditors  Committee, the first from  the  Committee's
counsel  and  the  second from a businessman  on  the  Committee.
Rosen's co-counsel in the INSLAW bankruptcy was Shea and Gould, a
firm  that does not normally represent AT&T. Shea and Gould  had,
however,  served for many years, including 1985, as  the  mergers
and  acquisition  counsel for Hadron, Inc. and for  Earl  Brian's
other  companies.  This was also Rosen's first time  representing
     In  June  1986, AT&T told INSLAW that it had fired Rosen  as
its counsel in the INSLAW case.

     In  April  1986,  Dixon and Dixon, an Omaha,  Nebraska,  law
firm, filed its Notice of Appearance in the INSLAW bankruptcy  on
behalf  of  AT&T. Roger Whelan became Washington  co-counsel  for
Dixon  and  Dixon in the INSLAW bankruptcy, although INSLAW  does
not know the exact date of Whelan's retention by AT&T.
     The  first move that Dixon and Dixon made on behalf of  AT&T
was  an  attempt  to strip INSLAW of protection  against  hostile
takeover  bids,  by  trying to convince the  Unsecured  Creditors
Committee, which had always supported INSLAW's periodic  requests
for extensions in the "period of exclusivity," to refuse any more
extensions. This AT&T initiative occurred in April 1986.  Several
weeks  after this unsuccessful effort by AT&T's new lead counsel,
a  Pennsylvania-based  computer  services  company,  Systems  and
Computer Technology (SCT), secretly approached INSLAW's Unsecured
Creditors Committee with an offer of several millions of  dollars
in cash for INSLAW's creditors if the Committee would support the
forced sale of INSLAW to SCT. SCT had met with DOJ officials,  in
advance of its hostile takeover attempt, to discuss the prospects
for  settling INSLAW's contract disputes once SCT acquired INSLAW
and  removed  William A. Hamilton as President. One  of  the  DOJ
officials that SCT met with was a Presidential appointee from the
same California county as Edwin Meese and Lowell Jensen.
     Sidley  and Austin, which normally serves as AT&T's  outside
general  counsel and bankruptcy counsel, became the fifth counsel
of  record for AT&T in the INSLAW bankruptcy.31 Sidley and Austin
and  Dixon  and  Dixon attended virtually every bankruptcy  court
hearing  on  INSLAW  during  1988  and  early  1989  and   sought
aggressively to block INSLAW's Plan of Reorganization  on  behalf
of their client, AT&T.
          7.   At  the  Time of Roger Whelan's Ex-Parte
               Denigration of Judge Bason to the  Merit
               Selection  Panel, Thomas  C.  Papson,  a
               member  of  the  Panel, was  Counsel  of
               Record  to  AT&T  in an  Unrelated  U.S.
               Government  Contract Appeals Proceeding,
               and Whelan was Counsel of Record to AT&T
               in the INSLAW Bankruptcy
     Thomas C. Papson, a member of the Merit Selection Panel, was
counsel  of  record  for AT&T at the General  Services  Board  of
Contract  Appeals (GSBCA) during 1987 on litigation  relating  to
contract  awards.32 The contracts in question were precursors  to
the  award by the General Services Administration of the  massive
FTS-2000  contract  for a new telephone service  for  the  United
States  Government,  one  of the largest,  if  not  the  largest,
contracts  in  the history of the United States Government.  AT&T
eventually  won  the majority position in the  FTS-2000  contract
               8.    The  Mysterious "Read and Destroy"
               "Confidential Memorandum" to  the  Chair
               of  the  Merit  Selection  Panel  Highly
               Critical  of  Judge Bason, a  Memorandum
               That No One Acknowledges Authoring
     According to the House Judiciary Committee, a federal  judge
gave the Committee a "Confidential Memorandum" dated December  8,
1987,  that contained instructions at the top that it  should  be
destroyed after reading. The judge who furnished the copy to  the
Committee  told the Committee that "it was an important  document
and  that it would be improper to destroy it." The memorandum was
addressed  to Judge Norma Johnson, but the author's name  is  not
shown  on  the  document. The author of the unsigned confidential
memorandum is a member of the Merit Selection Panel, according to
the  federal  judge who furnished the copy to the  Committee  and
according  to one other member of the Merit Selection  Panel,  as
reported by the House Judiciary Committee.
     The  November 24, 1987 written report of the Merit Selection
Panel  did not include any of the observations contained  in  the
December 8, 1987 Confidential Memorandum, according to the  House
Judiciary  Committee. One of the observations in the confidential
memorandum, according to the Committee, reads as follows:
     Judge  Bason evidenced no inclination to come to  grips
     personally with the management challenge posed  by  the
     terrible shortcomings of the Office of the Clerk of our
     Bankruptcy Court.
     The  Bua  Report  disclaims knowledge of  who  authored  the
confidential  memorandum, except to say that "the  heart  of  the
memo  suggests that it is intended to reflect only an  individual
Panel member's views."
     Although   Bua   claims  not  to  know  who   authored   the
confidential   memorandum  that  appears   to   contain   untrue,
derogatory   information   about  Judge  Bason's   administrative
abilities,  he  is prepared to absolve DOJ of  any  role  in  the
creation or distribution of the memo:
     There  is  no indication that someone from  DOJ  either
     prepared  or  planted the memo. The views expressed  in
     the  memo  do  not contain any criticism of  Bankruptcy
     Judge Bason's rulings in the INSLAW matter.
     Bua  apparently did not entertain the possibility  that  DOJ
could  have  "prepared  or planted" or  otherwise  caused  to  be
"prepared  or  planted" by others a confidential memorandum  that
would  derail Judge Bason's appointment on grounds that,  however
spurious  and  unfounded, would obscure any possible  linkage  to
DOJ's real motivation in getting rid of Judge Bason: anger at his
ruling against DOJ in the INSLAW case.
     A  sitting  federal bankruptcy judge was denied what  should
have  been  a relatively routine reappointment to the bench.  His
replacement  was  a clearly less qualified DOJ attorney  who  had
unsuccessfully argued just weeks earlier for INSLAW's liquidation
before           the          very          same          federal
bankruptcy  judge.  This  overt  DOJ  effort  to  force  INSLAW's
liquidation occurred shortly after Judge Bason had condemned  DOJ
for an earlier, covert effort to force INSLAW's liquidation.
     The   written   record  of  the  Merit   Selection   Panel's
deliberations indicates that the failure of Judge  Bason  to  win
reappointment  was  largely the result  of  criticisms  of  Judge
Bason's   administrative  abilities.  According  to   the   House
Judiciary  Committee's published interviews with the  individuals
best able to assess the conditions of the Office of the Clerk  of
the  Bankruptcy Court during Judge Bason's tenure, the criticisms
are  without  foundation.  The Merit  Selection  Panel,  however,
accepted them as true without subjecting the allegations to  even
the most minimal due diligence verification.
     Roger  Whelan,  the primary source of the  disparagement  of
Judge  Bason to the Merit Selection Panel, either knew or  should
have  known that the criticisms he was voicing to the Panel  were
without  foundation, because the problems he was  attributing  to
Judge  Bason were, in fact, the legacy of Whelan's own tenure  as
sole bankruptcy judge for the District of Columbia, according  to
then  U.S.  District Court Chief Judge Aubrey Robinson. Moreover,
Judge  Bason had already remedied the administrative problems  he
had inherited, according to the House Judiciary Committee.
     Confidence in the reliability of the Merit Selection Panel's
written  record is, moreover, called into question by  the  House
Judiciary   Committee's  discovery  of  a  "Read   and   Destroy"
"Confidential Memorandum" containing harsh and false criticism of
Judge Bason' s administrative abilities. Both the House Judiciary
Committee   and  the  Bua  Report  agree  that  the  Confidential
Memorandum appears to have been written by a member of the  Merit
Selection   Panel.   No  member  of  the  Panel   has,   however,
acknowledged authorship.
     Although  the  reasons  cited in the  record  of  the  Merit
Selection  Panel for replacing Judge Bason do not  withstand  any
serious  scrutiny,  there is evidence that  DOJ  was  seeking  to
remove Judge Bason because of his unfavorable rulings against DOJ
in  the INSLAW case, combined with the fact that there were  more
cases  still  be  tried in the INSLAW case.  DOJ,  in  fact,  had
secretly  communicated to the Chair of the Merit Selection  Panel
its  strong disapproval of Judge Bason's then recent oral  ruling
against  DOJ in the INSLAW case. The Chair thereafter  circulated
to  the  other members of the Panel a transcript of Judge Bason's
oral   ruling,  secretly  furnished  by  a  DOJ  attorney.  These
communications  between DOJ and the Merit  Selection  Panel  were
kept secret during two separate Congressional investigations into
the  question of whether DOJ had influenced the decision on Judge
Bason's reappointment.
     At  the  same  time that Roger Whelan was disparaging  Judge
Bason  to the Merit Selection Panel, Whelan was counsel of record
for  AT&T  in the INSLAW bankruptcy. Whelan's client,  AT&T,  had
evidently  been  working  in collusion with  DOJ  throughout  the
INSLAW  bankruptcy  in an effort to obstruct INSLAW's  successful
     While  Whelan  was  disparaging Judge  Bason  to  the  Merit
Selection  Panel,  Thomas C. Papson, also  then  an  attorney  of
record   for  AT&T  in  an  unrelated  U.S.  Government  contract
proceeding,  was a member of the Panel. The Chair of  the  Panel,
Judge  Norma Johnson, who failed to disclose to two Congressional
investigations  ex  parte  communications  with  a  DOJ  attorney
disparaging Judge Bason's ruling in the INSLAW case, is  a  long-
time                friend               of                Stuart
Schiffer,   currently  the  Acting  Assistant  Attorney   General
for  the Civil Division and the DOJ official who spearheaded  the
effort to remove Judge Bason from the INSLAW case.
     In  light of the foregoing, the following statement  in  the
Bua  Report  would appear to be open to question in any  serious,
independent investigation:
     The  Panel  also  heard from bankruptcy  practitioners,
     including  a  former  bankruptcy  judge,  who   opposed
     Bason's  reappointment for reasons wholly unrelated  to
     1  The Bua Report criticized the Investigative Report of the
House Committee on the Judiciary for creating the impression that
Judge  Bryant reviewed the evidence de novo. It is the Bua Report
that  should be criticized. While Judge Bryant did not find  that
he  was required to review the evidence de novo, effectively,  he
did so anyway. In so doing, he stated:
     It  is  not  necessary to duplicate the  bankruptcy  court's
exhaustive findings of fact here. It is sufficient to state  that
_after careful review of all of the volumes of transcripts of the
hearings  before the bankruptcy court. the more than 1.200  pages
of  briefs  and  supporting appendices  and  all  other  relevant
documents in the record_, there is convincing, perhaps compelling
support  for  the  findings set forth by  the  bankruptcy  court.
(Emphasis added.)
     Judge Bryant went on to say:
     In  accordance  with the principles set out  in  Anderson  v
Bessimer  City,  470  U.S.  564, 571-75  (1985),  the  court  has
examined the bankruptcy judge's findings of fact in the light  of
the entire record, and finds that his account of the evidence  is
eminently plausible; and _this court is not left with any  notion
that a "mistake has been committed_." Id. at 574. This conclusion
is  reached  without regard to the deference to be  accorded  the
judge's  opportunity  to  assess credibility.  _The  cold  record
adequately  supports his findings under any standard of  review_.
Accordingly the findings will not be disturbed. (Emphasis added.)
(D. Ct. Mem. Op., p. 37)

     2  Notwithstanding,  Brewer conceded on November  24,  1982,
that  there was no factual support for any allegation that INSLAW
did not perform its best efforts on the BJS contract. (PX 45)

     3  Brewer  misconstrued the BJS contract as a commitment  to
produce  specified  enhancements at a fixed price  instead  of  a
"best  efforts"  commitment  for development  of  an  unspecified
number  of  enhancements within a cost-plus contract.  (Hamilton,
257-258; Deroy, T. 2460-2462)

     4  Moreover, the suggestion of the authors of the Bua Report
that  "we  have  not  found  that  INSLAW  has  demonstrated  any
proprietary  rights  in  the software" is  outrageous  given  the
extensive record that obviously was ignored totally by  them.  It
is  noteworthy  that Judge Bason devoted over  31  pages  and  74
separate   findings  of  fact  establishing  the   unquestionable
conclusion  that  INSLAW created an enhanced version  of  PROMIS,
that  was  proprietary  to it, using private  funds.  To  suggest
otherwise  in  light  of this record, and  especially  given  the
obvious  fact  that the authors of the Bua Report did  absolutely
nothing to review the findings of the bankruptcy court, as  fully
adopted by the federal district court, is unconscionable.

     5  According to the Bua Report, Videnieks asserted at  trial
that  he was told by INSLAW's comptroller that INSLAW had  missed
at  least one payroll. This was not true. Had the authors of  the
Bua  Report inquired of INSLAW, they would have found that INSLAW
never  missed  a payroll during the three years of the  contract,
notwithstanding the fact that DOJ held back almost $2 million  in
payments  under the contract. Not surprisingly, as  in  virtually
every  other  instance  in  which DOJ's testimony  supported  the
conclusions that the authors of the Bua Report intended to reach,
they  made  no effort to verify the accuracy of that  information
with INSLAW.

     6 These   words,  that  served  as  the  theme  for  INSLAW's
prosecution   of   its   civil  claims,  are   taken   from   the
contemporaneous  handwritten notes  of  DOJ  Contracting  Officer
Peter Videnieks for March 28, 1983:
     Letter  was Brick's idea - and I thought/think its the  best
way  --  Why  do  you  need signature _if you  got  the  goods?_"
(Emphasis added.)

     7 At trial, Brewer denied this fact three times. (Brewer, T.
1692,  1694,  1702)  This  was  the only  circumstance  in  which
Videnieks could recall not following a Brwer guidance which would
have  resulted  in a destriment to INSLAW. (Videnieks,  T.  1859-
1860,   1861)   Even   with  this  single  exception,   Videnieks
acknowledged that the only reason he ignored Brewer's guidance is
that  DOJ's  Administrative Counsel Snider  applied  pressure  on
Videnieks  to  proceed  on  the basis  of  a  bilateral  contract
modification. (Videnieks, T. 1861-1862)

     8  "Our  computer"  refers  to a  PRIME  mid-range  computer
belonging to DOJ's Executive Office for U.S. Attorneys  that  was
housed   temporarily  in  INSLAW's  Computer  Center  in  Lanham,
Maryland.  INSLAW used that computer temporarily to  support  the
PROMIS  operation in the U.S. Attorney's Office for the  District
of  Maryland via telecommunications, while a computer center  was
being  built  in  the  Baltimore  U.S.  Attorney's  Office.  This
activity  is separate from INSLAW's use of its own VAX  mid-range
computer  at  the  same  Lanham,  Maryland  computer  center  for
temporary computer time sharing of PROMIS in the 10 largest  U.S.
Attorneys'  Offices.  It  is  the latter  time-sharing  that  DOJ
refused  to compensate INSLAW for in accordance with a Negotiated
Agreement.  The wrongful withholding of payments  for  the  later
PROMIS  computer  time  sharing service  is  the  principal  sham
contract dispute described in Section C.6 of this document.

     9  In  late  1990 and early 1991, the Government  of  Canada
contacted  INSLAW by telephone and by letter seeking  information
about the availability of a French-language version of PROMIS and
disclosing that the English language version of PROMIS  was  then
operating in several departments and agencies of Canada's federal
government. The Canadian officials also told INSLAW that  one  of
these  agencies,  the Royal Canadian Mounted Police  (RCMP),  was
using  PROMIS to support 900 office locations throughout  Canada.
After  the  U.S.  and  Canadian media  began  reporting  on  this
disclosure and on INSLAW's claim that it had neither sold  PROMIS
to the Government of Canada nor authorized others to do so on its
behalf,  the  Government of Canada retracted its prior  oral  and
written disclosures to INSLAW, attributing them to an unfortunate
mistake  by  the Canadian officials involved. Eventually,  Canada
settled  on  the explanation that its Department of Public  Works
had   purchased  six  copies  of  the  PROMIS  software   product
manufactured  by  Strategic  Software  Planning  Corporation   of
Cambridge,  Massachusetts. According to that company, its  PROMIS
software  product  is for project management in the  construction
industry.  Canada has never disclosed whether its  Department  of
Public  Works also uses the Intelligence Report System  that  the
CIA claims to have acquired with its copy of PROMIS from the same

     10  INSLAW President, William Hamilton, recited in  a  sworn
affidavit filed in camera in U.S. District Court for the District
of Columbia on October 17, 1990 in support of INSLAW's request to
re-open  discovery against DOJ, the statements that Carl  Jackson
made  to  Mr.  and  Mrs.  Hamilton and Jackson's  claim  to  have
confirmed those facts in 1990 with Phillip Cammera.

     11  This  account by Bua cannot possibly do justice  to  the
PBI's  probable  reaction to the appointment of  Denning  as  the
independent expert. Denning is the leading proponent within  U.S.
academia for a controversial joint initiative of the FBI and  the
NSA called the Clipper Chip. According to press accounts, Denning
is  one of the few people outside of the U.S. Government who  has
received  a  security briefing on the Clipper Chip.  The  Clipper
Chip was developed by NSA and proposed by the NSA and the FBI for
incorporation into computer hardware manufactured in  the  United
States.  It  is designed to preserve the technical capability  of
the  FBI  and  the  NSA  to eavesdrop on the computer-to-computer
communications of U.S. businesses.

     12 Denning states that a new version of FOIMS created in 1983
was  written  in the NATURAL programming language  and  used  the
ADABAS   database  management  system  (DBMS).  A  DBMS  can   be
analogized  to  an  engine  in  a  car,  and  the  case  tracking
application  code  can  be analogized  to  the  car  itself.  FBI
information  system officials directly informed INSLAW  in  1983,
however,  that the new 1983 version of FOIMS would use ADABAS  as
the DBMS, but would have newly-written COBOL-language application
code.  Because of these representations to INSLAW in 1983, INSLAW
provided oral and written briefings to the FBI that year  on  how
it  could avoid the delay and costs associated with writing a new
COBOL-language  application system by,  alternatively,  inserting
the  ADABAS  "engine"  into the tried and proven  and  thoroughly
debugged PROMIS COBOL code. Prior to providing these briefings to
the  FBI,  INSLAW  consulted  with technical  representatives  of
Software A.G. of North America, the vendor of both ADABAS and the
NATURAL programming language.

     13  The  ratio of numbers of line of code between COBOL  and
NATURAL  is 10 to 20 times as many COBOL lines of code as NATURAL
lines of code for the same application, according to Maguire. If,
therefore, FOIMS contained 570,000 lines of code written  in  the
NATURAL  programming  language,  a  corresponding  case  tracking
system written in COBOL would consist of 5.5 to 11 million  lines
of  COBOL  code. INSLAW's PROMIS software is widely  regarded  as
extremely rich in case tracking functionality and yet it has only
about  500,000  to 600,000 lines of COBOL, code, with  the  exact
number  dependent upon each customer's application of the on-line
DESIGN  subsystem  and  its automated COBOL  code  generator.  An
application  software system such as a case tracking system  that
contains  the  equivalent  of  millions  of  lines  of  COBOL  is
extremely  unlikely. If the PROMIS software were translated  into
the  NATURAL  programming language, for example,  it  would  have
about  30-60,000  lines  of NATURAL code instead  of  500-600,000
lines of COBOL code.

     14  In  these  1991  affidavits, Ben  Menashe  distinguishes
between  the  copy  of PROMIS that Rafi Eitan allegedly  obtained
during the early 1980's on a visit to the United States, and  the
copy  of  PROMIS that Brian was marketing in Tel  Aviv  in  1987.
According  to  Ben Menashe, Israel was authorized by  the  United
States  to  use the initial Rafi Eitan copy of PROMIS solely  for
the signal intelligence penetration of other governments, whereas
the  copy  of  PROMIS that Israel allegedly purchased  from  Earl
Brian in 1987 was for the internal database management of Israeli
intelligence files.

     15  Burns  had  succeeded Jensen as Meese's  Deputy  Attorney
General in July 1986, when Jensen became a U.S. District Judge in
San Francisco.

     16  Deputy  Attorney  General Bums had  himself  written  to
Ratiner in late August 1986, signaling DOJ's readiness to  settle
rapidly  the  disputes  underlying the  $'~,000,000  in  payments
withheld  by  DOJ for INSLAW's implementation services,  provided
that  INSLAW would agree to recognize the U.S. Government's right
to  use PROMIS wherever it wished, without paying license fees to

     17 In the same December 1989 affidavit cited by Bua, Hamilton
stated  that  Jensen's private secretary at DOJ, Marilyn  Jacobs,
had  made  a similar disclosure to a DOJ informant who  does  not
wish  to  be  identified  until  assured  of  protection  against
reprisal.  Bua  took  no  initiative to provide  such  assurances
against reprisal.

     18 Sensitive Compartmented Information is defined as follows
in Bob Woodward's book, VEIL:
     "the  process  of  further restricting access  to  the  most
sensitive  information by imposing special controls and handling.
Compartments  of such information for a particular  operation  or
sensitive  source  or  method  of  collecting  intelligence   are
generally  given  code words. Individuals in the government  from
the  President on down must be granted specific code-word  access
to  each  compartment. Code words are selected  at  random.  Some
employed by the NSA for signals intelligence include RUFF,  ZARF,
SPOKE,  MORAY  and two of the most restrictive involving  decoded
messages, UMBRA and GAMMA. VEIL was the code word for the  covert
action  compartment during the last several years of  the  Reagan

     19   See,  for  example,  an  article  about  the  Wackenhut
Corporation in the September 1992 issue of SPY Magazine  by  John
Connolly entitled "Inside the Shadow CIA."

     20 DOJ's Land and Natural Resources Division has the version
of  INSLAW's proprietary PROMIS software that operates on IBM and
IBM-clone mainframe computers under the MVS operating system.  In
contrast,  the  version of PROMIS stolen by  DOJ  in  April  1983
contained  the  proprietary enhancements that  are  prepared  for
operation   on   Digital  Equipment  Corporation  VAX   mid-range
computers under the VMS operating system.

     21    Upon  information  and  belief,  DOJ  stole  both  the
proprietary version of PROMIS for IBM mainframe computers,  which
DOJ has had in its possession since 1982, and the version for VAX
mid-range  computers, which DOJ misappropriated  from  INSLAW  in
April 1983. The timing of the April 1983 theft of the VAX version
of  proprietary  PROMIS  was, based on  information  and  belief,
dictated    by    unmet,   urgent   customer   needs    in    the
intelligence/national security arena.

     22 Bua  states that the evidence "suggests" "that there  were
absolutely no activities...." The juxtaposition of "suggests" and
"absolutely" is, of course, inconsistent.
     23   See  The  United  States  of  America  vs.  Charles  S.
Christopher,  a/k/a Chris Christopher, and George  Wayne  Reeder,
a/k/a  Wayne  Reeder, filed in the District Court of  the  United
States  for the District of Rhode Island concerning the violation
of Title 18, U.S.C., Sections 371, 1343, 2314, and 2.
     24  As  INSLAW  informed  Bua in its  January  1992  written
submission,   the  Washington  Business  Journal  confirmed   the
accuracy of Hamilton's account in an interview with Ben Cnaan  in
January 1990.

     25  DOJ  officials have consistently been less  than  candid
about  the relationship between Project EAGLE and case management
software  in  general and the PROMIS case management software  in
particular. For example, Stephen Colgate, currently the Assistant
Attorney   General   for  Administration,  during   Congressional
testimony on March 2, 1989, deflected an inquiry from Congressman
Early  about the connection between Project EAGLE and DOJ's  case
management system by insisting that Project EAGLE "is  a  uniform
office   automation  system."  One  of  Colgate's   subordinates,
however,  was more candid in a private August 25, 1989 letter  to
the  General  Services Administration (GSA). Frank A.  Guglielmo,
Director  of  DOJ's  Computer Technology  and  Telecommunications
Staff,  informed GSA that DOJ plans to develop a case  management
software  system  for  implementation  on  every  Project   EAGLE
computer: " ... it will take approximately three years to develop
and   install  the  caseload  management  system  for  the  EAGLE
project." Moreover, Guglielmo blamed the U.S. Bankruptcy  Court's
permanent injunction against further unauthorized use of INSLAW's
PROMIS  software  as preventing DOJ from porting  PROMIS  to  the
Project  EAGLE computers. Guglielmo further informed GSA  in  the
letter  that DOJ would have to purchase $4 million worth  of  new
computers  from  PRIME to continue operating the PROMIS  software
that  U.S.  Attorneys' Offices had been operating on older  model
PRIME  computers  during the three-year period required  for  the
development  of  the  new Project EAGLE case management  software
     Another example is the contradiction between DOJ's published
answers  to the questions from Project EAGLE bidders, on the  one
hand,  and  DOJ's  statements  in federal  court  in  the  INSLAW
litigation against DOJ, on the other hand. On September 26, 1986,
DOJ  published to the bidders an unequivocal denial that  certain
technical  requirements mandated in the August 1986 Amendment  to
the  EAGLE Request for Proposals implied an undisclosed DOJ  plan
to  implement  the PROMIS software on the EAGLE  computers:  "The
equipment acquired from this solicitation will not be required to
run  either  PROMIS  ... " On April 15, 1988, however,  DOJ  told
Senior  U.S.  District Judge William B. Bryant, Jr. that  it  had
mandated  the  very same August 1986 technical  requirements  "so
that  the  EOUSA [Executive Office for U.S. Attorneys]  can  make
PROMIS,  which is written in the COBOL language, run on  the  new
[EAGLE] hardware, if it decides to do so."
     26  In  an investigative report dated November 26, 1991  and
entitled  Deficiencies in the Department  of  Justice  Award  and
Management  of  Its  Project  Eagle ADP  Procurement,  the  House
Judiciary Committee noted the following anomalies:
     o     DOJ was negligent in keeping vendors other than Tisoft
          fully informed of material facts;
     o      DOJ  allowed  Tisoft  to substitute  its  maintenance
          subcontractor   after  the  award  even   though   that
          subcontractor  had  been  a  major  factor   in   DOJ's
          justification for making the award to Tisoft;
     o       Each  vendor,  except  Tisoft,  was  challenged   on
          statistics regarding its system's performance;
     o     DOJ contributed $200,000 to Tisoft to help finance the
          settlement  of bid protests by other vendors  with  the
          provision that the settlement documents be sealed  from
          public view;
     o      Tisoft  agreed  to  pay up the $6.1  million  to  the
          protesting  vendors,  depending  upon  Tisoft's   gross
          revenues during the life cycle of the contract, to help
          induce those vendors to drop their protests, indicating
          that Tisoft envisioned earning very substantial profits
          under the EAGLE contract;
     o      Tisoft  paid  for at least one golfing outing  for  a
          member  of  DOJ's technical evaluation team during  the
          pendency of the EAGLE procurement;
     o      One  of Tisoft's proposed computer systems failed  to
          support user demand when installed; and
     o     DOJ officials misused the technology upgrade clause in
          Tisoft's  contract  in order to correct  weaknesses  in
          Tisoft's bid.
     27 Anson Ng, described as a stringer for the Financial Times
of  London, was found dead in Guatemala in July 1991,  the  month
before Casolaro died.
     28  Increases  in  the number of devices  such  as  computer
terminals and printers that the U. S . Attorneys' Offices elected
to  use in accessing the PROMIS time-sharing service were assumed
by  DOJ  and  INSLAW  to  be a proxy for  satisfaction  with  the
quality, reliability and usefulness of the time-sharing service.
     29  DOJ had inexplicably overlooked this entire category  of
costs,  i.e., the costs of highly paid operating system  software
specialists  and statistical analysts who adjust the time-sharing
system  daily in reaction to fluctuations in demand among the  10
major  city  U.S.  Attorneys' Offices.  Because  these  employees
worked on the computer time-sharing system remotely from INSLAW's
headquarters,  rather  than locally from  the  Lanham,  Maryland,
physical computer center, DOJ simply disregarded the obvious need
for  such  technical support personnel in deciding that  INSLAW's
time-sharing costs were too high.
     30 In an affidavit filed in U.S. District Court on behalf of
INSLAW  in 1991, Ari Ben Menashe claims that Kenneth Rosen,  like
Earl  Brian, had a close working relationship with Rafi Eitan,  a
legendary   Israeli   intelligence   official   whose    apparent
involvement with DOJ in the theft of PROMIS is summarized in  C3,
Bua's  Investigation  of  Leads  Relating  to  the  Role  of  DOJ
Officials  in  Either  Facilitating or Covering  Up  the  Use  of
INSLAW's PROMIS in Intelligence/National Security Programs.
     31  Sidley and Austin replaced Roger Whelan as co-counsel of
record in the INSLAW bankruptcy in February 1988.

     32  See,  for example, GSBCA No. 9252-P, a Protest  by  AT&T
Communications,  Inc.  regarding  Solicitation  No.  ETN-87-0001,
where  Thomas  C.  Papson and two other attorneys  from  McKenna,
Conner  and Cuneo made appearances on November 9, 1987 on  behalf
of AT&T Communications, Inc.


                                                        Exhibit A

MEMORANDUM                         10 June 1993
To:       William A. Hamilton
Subject:  The Relevance of My Records and Investigative
          Files in Earl Brian and Hadron to Any
          Investigation of the INSLAW Affair in the
          United States and the Failure of Judge
          Nichols Bua or His Staff to Seek Information
          from me

From:     Jon A. Belton


At your request, I am addressing in this memorandum three points:

     A.   The Potential Significance to the INSLAW Affair in
          the United States of My Contemporaneous Records
          and Investigative Files Regarding an Alleged Major
          Securities Fraud in Canada in the Early 1980's
          Involving Earl W. Brian, a United States Citizen,
          and several U.S. Corporations Then Controlled by
          Brian, Including Hadron, Inc.;
     B.   Whether U.S. Justice Department Special Counsel
          Nichols J. Bua or His Staff Sought to Interview Me
          or Obtain Copies of my Records and Files; and
     C.   Highlights of my Investigative Leads Regarding the
          Role of Earl W. Brian and Hadron, Inc., in the
          Alleged Unauthorized Distribution of INSLAW's
          PROMIS Software Product to Canada in 1983.

A.   The Potential Significance to the INSLAW Affair in the
     United States of My Contemporaneous Records and
     Investigative Files Regarding an Alleged Major
     Securities Fraud in Canada in the Early 1980's
     Involving Earl W. Brian, a United States citizen, and
     Several U.S. Corporations Then Controlled by Brian,
     Including Hadron, Inc.

I became acquainted with Earl W. Brian and various U.S.
Corporations controlled by Brian during the 1980-1982 time
period. As a Canadian stockbroker during that period, I had
clients investing money in the publicly-traded securities of such
Brian-controlled corporations as Hadron, Inc. of Fairfax,

Over time, I became concerned that Brian and his associates had
engineered and executed a massive securities fraud in Canada, and
I have been attempting ever since the 1980-1982 time period to
get the Government of Canada to conduct a credible investigation,
and, failing that, I have been conducting my own investigation.
In the normal course of business, I make detailed contemporaneous
notes of meetings and telephone conversations. These notes have
been invaluable in my investigative work.

For example, notes that I took at a dinner meeting with Earl
Brian in Montreal on 23 February 1981 reveal that Brian expected
Hadron, Inc., to acquire an unnamed company that marketed a
computer software product for the administration of justice.
Brian said the software product had "great PROMIS[E]." Brian
linked Hadron's future revenue stream to its planned acquisition
of this software product. I believe now that Brian was already
foretelling his planned acquisition of INSLAW, Inc., and the use
of its PROMIS case management software product to obtain
sweetheart contracts from the United States government through
his friendship with Edwin Meese. During this same Brian visit to
Montreal, I also became aware of plans for a follow-up meeting
between Edwin Meese and one of the Canadian financiers with whom
Brian was dealing.

It is also my belief that Earl Brian's connections with U.S.
intelligence agencies have accounted for the failure of the
Government of Canada and its Royal Canadian Mounted Police (RCMP)
to conduct any credible criminal investigation of the alleged
Brian securities fraud in Canada. According to my contemporaneous
written notes for 25 November 1985, for example, RCMP officer
Wayne Dunn, who was then directing an investigation of Brian,
said as follows to me: "Re: Earl Brian - Play low - We don't want
the CIA taking shots at you."

B.   Whether U.S. Justice Department Special Counsel
     Nicholas J. Bua or His Staff Sought to Interview me or
     Obtain Copies of My Records and Files.

You have advised me that INSLAW made a written submission to
Justice Department Special Counsel Nicholas Bua in January 1992
on the crimes that were committed, the persons who appeared to
have committed the crimes, and the state of the evidence
uncovered as of that date, and that INSLAW identified me as a
potential source of information on the subject. Free-lance
journalist Richard Fricker, who himself had reviewed my files,
also informed me that on a number of occasions he personally
related to Judge Nicholas Bua the significance of certain data
from my ongoing investigation that would be of material
assistance to Bua's investigation of the INSLAW affair.

Neither Judge Bua nor any of his staff has ever contacted me or
sought copies of any of my records or files.

C.   Highlights of my Investigative Leads Regarding the Role
     of Earl W. Brian and Hadron in the Alleged Unauthorized
     Distribution of INSLAW's PROMIS Case Management
     Software Product to Canada in 1983

In early 1991 the Department of Communications of the Government
of Canada notified INSLAW by letter that its PROMIS computer
software product was being used in several departments and
agencies of the federal government of Canada and asked INSLAW to
complete a questionnaire about the availability of French-
language versions of its software and documentation.
Subsequently, Department of Communications officials told INSLAW
representatives that the Royal Canadian Mounted Police (RCMP) was
using PROMIS in approximately 900 offices.

After the U.S. press began reporting on this disclosure and on
INSLAW's revelations that it had neither licensed the PROMIS
software to the Canadian Government nor authorized others to do
so on its behalf, the Government of Canada retracted its earlier
statements and attributed those statements to a mistake on the
part of the Department of Communications officials.

Several Canadian journalists, including Eric Reguly of the
Financial Post  in Toronto, Zuhair Kashmeri, then of the Globe
and Mail  in Toronto, and Charles Greenwell of CJOH-TV in Ottawa,
have, however, told me that current and/or former officials of
the RCMP have privately confirmed to each of them that the RCMP
is, in fact, using the PROMIS software. PROMIS is apparently
known within the RCMP by the name of P.I.R.S. (Police Information
Records System). The RCMP publicly insists that it developed
P.I.R.S. internally. Reporter Greenwell told me that one of his
trusted sources claimed that the RCMP does not have the internal
technical software resources to have developed a complex
investigative tracking software system such as P.I.R.S. and that
the RCMP claims to have developed P.I.R.S. internally are an
important clue that the RCMP is not telling the truth about

Documents released under the Access to Information Act, moreover,
reveal the participation of at least one Canadian contractor in
P.I.R.S software development work at the RCMP: I.P. Sharp Company
in Toronto, and also that 1983 was the year for nationwide
implementation of P.I.R.S. within the RCMP.

My investigation has developed leads linking Earl Brian's Hadron,
Inc. of Fairfax, Virginia, and two Canadian computer services
companies in the unauthorized distribution of INSLAW's PROMIS
software into Canada in approximately 1983. The two Canadian
companies are I.P. Sharp of Toronto and SystemHouse of Ottawa.
Ironically, I.P. Sharp brought its first application software
product to market in approximately 1983, a tracking system for
factory floor automation, and called the product PROMIS.
Eventually, I.P. Sharp created the PROMIS Systems Corporation as
a wholly-owned subsidiary. I.P. Sharp is no longer in business
but the PROMIS Systems Corporation is still in operation.

On 1 April 1992, for example, Mr. William Stamey, a computer
services executive in Virginia, told me, in the course of a
telephone interview, about a conversation he had had in
approximately 1984 with a former colleague of his by the name of
Mr. D. George Davis.  Davis had been marketing or sales vice
president of Hadron in 1983, and left Hadron, according to his
statements to Stamey, after he had been deprived by Hadron's
Chairman, Dominick Laiti, of a very substantial commission on the
sale of a computer software product to the Government of Canada.
The following are excerpts from Stamey's comments to me:
     "SystemHouse and Hadron had a bunch of source codes..."
     "SystemHouse Canadian operation ...had a member of ...
     the Privy Council in pocket."
     " ... I.P. Sharp , SystemHouse, I.P. Sharp and Hadron
     were all linked together in someway."
     " ... Hadron had done some software modifications for
     SystemHouse and I.P. Sharp."

On 6 April 1992, I had a telephone interview with Mr. Paul
Wormeli, who was an officer of Hadron's law enforcement software
subsidiary in 1982 and 1983. Wormeli told me that he "vividly"
recalled the fact that Davis had been deprived of the software
sales commission and that "his commission beef" related to a
transaction in Canada involving both I.P. Sharp and SystemHouse.

On 18 May 1993, Wormeli said as follows to me in a telephone

     "Well I know for a fact that Hadron was messing around
     with I.P. Sharp, because I was asked to evaluate
     putting together a joint marketing deal with them at
     one point. So that the connection was there..."

When I interviewed D. George Davis by telephone on 2 April 1992,
he denied the loss of software sales commission, but acknowledged
knowing about both SystemHouse and I.P. Sharp. Although he denied
any personal involvement with these two companies, in 1983, he
carefully refrained from exculpating Hadron itself:

     "I know who they are." "The had no contracts with me."
     "I don't know about Hadron."

Davis also appeared to be suggesting that the matter I was
questioning him about also involved Earl Brian and Edwin Meese:

     "Though Brian and Meese, who I don't think much of,
     were involved, I was not party to that unfortunately."

On 16 December 1992, Canadian reporter Charles Greenwell was
interviewing Mr. Roderick M. Bryden, the founder and former
Chairman of SystemHouse, on a different subject when he suddenly
turned the questions to INSLAW and PROMIS. Mr. Greenwell
subsequently informed me that Mr. Bryden responded as follows:

     "Oh yeah, we got INSLAW from I.P. Sharp. Clark handled
     that whole matter."

On 23 March 1993, one of my associates asked a current employee
of SystemHouse about INSLAW's PROMIS software and received the
following reply:

     "Oh yeah, we have it." "But we bought it legally."

As noted earlier, William Stamey had recalled that the
unauthorized introduction of the PROMIS software into Canada had
come about in part as the result of a relationship between
SystemHouse and a member of the Privy Council. Reporter Charles
Greenwell independently told me that a trusted source informed
him that INSLAW's PROMIS software was introduced into Canada
through the Privy Council Office and that a Mr. LeCours of the
Privy Council staff has knowledge of the facts but is fearful of
the reprisal. There is a J.A. LeCours of the Privy Council staff
who is a senior specialist on intelligence and security issues.

/s John A. Belton


                                                        Exhibit B
 A Synopsis of Specific Claims About U.S. Department of Justice
                        (DOJ) Malfeasance
 Against INSLAW Made by Credible Individuals Who Are Fearful of
     The  characterization  of each witness  is  intended  to  be
sufficient   to  enable  the  reader  to  assess  the   witness's
credibility   but   not   detailed  enough   to   permit   actual
identification of the witness.
     WITNESS #1. This individual is a computer systems specialist
     who worked at the World Bank Headquarters in Washington,  DC
     for  a  number  of  years in the 1980's  and  who  has  been
     reluctant  to  come  forward publicly  because  of  fear  of
          This  individual  claims to have first  hand  technical
     knowledge,   supplemented  by  contemporaneous,  handwritten
     notes,  of the implementation at the World Bank Headquarters
     in  1983 of INSLAW's PROMIS computer software product, on  a
     VAX  mid-range computer from Digital Equipment  Corporation.
     According to this individual, the World Bank acquired a  VAX
     mid-range computer in its computer data processing center in
     1983  and, thereafter, in June 1983, acquired from a  source
     unknown  to  this individual, INSLAW's PROMIS  software  for
     implementation  on  the  VAX  computer.  According  to  this
     individual,  the World Bank's implementation of  PROMIS  was
     not  in support of the traditional PROMIS application domain
     of  legal  office case management. Instead, the  World  Bank
     implemented  PROMIS to track its own "international  message
     flow,"  as  well as the international message  flow  of  its
     sister institution, the International Monetary Fund (IMF).
     WITNESS  #2.  This  individual is a current  mid-level  U.S.
     Government    employee   with   extensive   experience    in
     intelligence/national security activities, who is fearful of
          This  individual  claims  to have  knowledge,  obtained
     contemporaneously with the actual event in June 1983,  of  a
     meeting  at  the  World  Bank  Headquarters  in  June   1983
     concerning  DOJ's  conveyance  to  the  World  Bank  of  the
     "proprietary  VAX"  version  of  INSLAW's  PROMIS  software.
     According  to  this  individual (who  also  claims  to  have
     contemporaneous handwritten notes), the DOJ was  represented
     at  the meeting by D. Lowell Jensen, then Assistant Attorney
     General  for  the Criminal Division. Among others  who  this
     individual claims attended the meeting was Stanley  Sporkin,
     then  General  Counsel  of the Central  Intelligence  Agency
     (CIA).  According  to  this individual,  the  initiative  to
     implement  PROMIS  at  the World Bank  came  from  the  Bank
     Operations Division of the CIA.1
     Upon   information   and  belief,  the  objective   of   the
     PROMIS  implementation at the World Bank was to  provide  an
     early  warning system to the U.S. intelligence community  of
     signs of planned defaults on international loans. During the
     first  few  years of the Reagan Administration, a number  of
     the  so-called less developed countries actively  considered
     defaulting on their international debts.
     WITNESS  #3.  This  individual is a  current  mid-level  DOJ
     career  employee who has been in a position to know  a  good
     deal about the INSLAW Affair for the relevant period of  the
     1980's, and who, INSLAW has been told by others, has  first-
     hand  knowledge of DOJ's dissemination to the World Bank  in
     1983  of  the  PROMIS  software, and of the  concealment  or
     destruction by DOJ of contemporaneous, written documentation
     of the conveyance.
          This  individual, during the course of a recent meeting
     with attorneys for INSLAW, emphasized repeatedly that anyone
     who provides information to INSLAW will get into significant
     trouble,  and that there would be swift retribution  against
     anyone  in DOJ who even talks about the INSLAW matter.  This
     individual  claims that all of the people  at  DOJ  who  are
     responsible  for  "getting" INSLAW have  been  promoted  and
     awarded  bonuses.  This  individual  expresses  sorrow   and
     perhaps  even  shame for what DOJ has done  to  INSLAW,  but
     declines to acknowledge the validity of any particular claim
     except   through  sworn  testimony  before  an   independent
     counsel.  This individual states that no one would cooperate
     with  any  investigation unless it is truly  independent  of
     DOJ,  and  unless assured of no retaliation.  Finally,  this
     individual  says that the exodus from DOJ of the  Republican
     Party  political  appointees will be of  some  help  on  the
     INSLAW  matter  but  that it will not of  itself  be  enough
     because  "too  many career people have either been  part  of
     destroying INSLAW or have 'winked' at it."
     WITNESS  #4.  This individual is a former very high  ranking
     DOJ  official who told an intermediary in May 1993 that  his
     disclosure  of  information about DOJ's  misconduct  against
     INSLAW  would lead to economic reprisals against him by  the
     Republican Party.
          According  to the intermediary, this individual  claims
     to  have  the  following specific knowledge regarding  DOJ's
     malfeasance against INSLAW:
     o     It was orchestrated by Lowell Jensen who, in turn,
          relied  principally  on  the  Criminal  Division's
          Executive Officer Miles Matthews;
     o     The Justice Command Center is linked to the INSLAW
     o      DOJ  procurement executive Elizabeth "Pat"  Rudd
          played   a  very  important  role  in  the  INSLAW
          scandal; and
     o      Other  current or former DOJ officials who  were
          personally  involved  in  the  misconduct  against
          INSLAW are as follows:
          o     Harry Flickinger
          o     Anthony Moscotto
          o     Anthony Liotta
          o     Carol Dinkens
          o     Thomas Stanton
          o     Charles Neal
     WITNESS  #5. This individual is a senior DOJ career official
     with extensive knowledge of DOJ information systems.
          This individual claims that John Otto, while serving as
     one of the highest ranking FBI officials in the late 1980's,
     disclosed  directly to this individual in a private  meeting
     at  the  FBI that the FBI was about to implement the  PROMIS
     software   under   the   FOIMS  (Field  Office   Information
     Management System) name, and that the adoption of the  tried
     and  proven  PROMIS software was expected to cure  the  poor
     reputation of FOIMS among FBI employees.
     WITNESS  #6.  This  individual is  a  mid-level  DOJ  career
     employee   who  fears  retaliation  unless   there   is   an
     independent counsel.
          This  individual claims to have witnessed an admission,
     contemporaneously with the referenced activity,  by  Marilyn
     Jacobs,  then  DOJ  secretary to D. Lowell  Jensen,  to  the
     effect  that Jensen, Jacobs' immediate supervisor,  was  the
     person behind all of INSLAW's problems at DOJ.
     WITNESS  #7. This individual is a high level career official
     of  the  U.S. Government, who currently holds a position  of
     considerable  responsibility and who  was  unwilling  to  be
     identified by INSLAW to Special Counsel Nicholas J. Bua.
          This individual claims to have witnessed admissions  by
     former  DOJ  Security Officer Garnett Taylor concerning  the
     deliberate destruction of documentary evidence in the INSLAW
     case  by  DOJ security officials, and concerning the alleged
     role  of  Anthony  Moscotto,  currently  Director  of  DOJ's
     Executive   Office  for  U.S.  Attorneys  (EOUSA),   in   an
     "affirmative  decision"  by DOJ to remove  Judge  George  F.
     Bason, Jr. as sole federal bankruptcy judge for the District
     of Columbia.
     WITNESS #8. This individual is currently a relatively senior
     career employee of the United States Government who had been
     employed  during  relevant years  of  the  1980's  in  DOJ's
     Justice  Management Division, and who is prepared to  answer
     questions truthfully if compelled to do so by subpoena  from
     a  duly  constituted  government  inquiry  into  the  INSLAW
          This individual claims, based on a conversation with an
     intermediary, that everyone from "the director level on  up"
     within  DOJ's  Justice  Management Division  knew  that  the
     INSLAW  case  was  caught  up in a  covert  U.S.  Government
     intelligence  operation  and that this  is  why  there  were
     classified   intelligence/national  security  documents   on
     INSLAW and the PROMIS software stored in the security  vault
     of  DOJ's  Office of Security and Emergency  Planning.  This
     individual  also  claims to know about a connection  between
     the  Justice  Command  Center and  the  malfeasance  against
     INSLAW,  and  about the award of promotions and  bonuses  to
     certain DOJ career officials for their participation in  the
     wrongdoing against INSLAW.
          WITNESS #9. This individual is a trusted friend of  Mr.
     and Ms. Hamilton who, in turn, has a close relationship with
     one or more persons currently holding senior level positions
     in the Central Intelligence Agency. This individual has been
     unwilling  to  submit  to interviews  by  anyone  officially
     associated with the U.S. Government, whether in Congress  or
     in  the  DOJ.  This individual has served as  a  conduit  of
     information that certain senior level CIA officials wish  to
     have conveyed to Mr. and Ms. Hamilton.
          This  individual has conveyed the following information
     to Mr. and Ms. Hamilton:
     o       The  CIA  secretly  obtained  a  copy  of   the
          proprietary version of PROMIS from DOJ in order to
          determine whether PROMIS could be used to solve  a
          longstanding, unmet need in the U.S.  intelligence
          community  for  compatible  data  base  management
     o     The initial unauthorized use of PROMIS in the U.S.
          intelligence  community was  for  an  intelligence
          application aboard nuclear submarines.  PROMIS  is
          currently installed on every nuclear submarine  of
          the  United  States  and Great  Britain,  and  the
          application  domain  for this  use  of  PROMIS  is
          extremely sensitive.2
     o      The  CIA  implemented  PROMIS  internally  after
          integrating PROMIS with another piece of  computer
          software.  The CIA uses its version of  PROMIS  to
          keep  track  of the covert intelligence operations
          of U.S. and foreign governments.
     o      PROMIS  is  being used as an inventory  tracking
          system   for  long  range  missiles  and   nuclear
          warheads,  in  the United States  as  well  as  in
          several   other   nations  that  possess   nuclear
     o     The U.S. Government appointed someone by the name
          of  Lindsey  to  package  a  reduced-functionality
          derivative of the CIA's version of PROMIS for Earl
          W.  Brian to sell to the intelligence agencies  of
          foreign governments.
     o      One  of Earl Brian's sales of PROMIS was to  the
          military intelligence agency of the Government  of
          Egypt,  through "what appears to be a CIA  holding
     o      There  is one use of PROMIS by the United States
          Government  that  is considerably  more  sensitive
          than   any  that  have  been  identified  to   the
          Hamiltons  by  this individual, and  so  sensitive
          that decisions on disclosure are restricted to the
          four  statutory  members of the National  Security
          Council,  i.e., the President, the Vice President,
          the  Secretary  of  State  and  the  Secretary  of
     o     One of the places where the proprietary version of
          PROMIS  is being used without license from  INSLAW
          is  the  Office  of the Attorney  General  of  the
          United States.
     o      As  a  condition of his nomination  as  Attorney
          General,  William  Barr  was  required   to   give
          assurances to President Bush that he would be able
          to maintain the coverup in the INSLAW case.
     o      In early 1993, elements of the CIA intercepted a
          person   or  persons  in  the  vicinity   of   the
          Hamilton's  family residence who  were  apparently
          planning   to  carry  out  some  act  of  physical
          violence. On at least one other occasion, elements
          within the CIA have intercepted or nullified plans
          by others to kill Mr. and Ms. Hamilton.
     WITNESS #10. This individual is a computer programmer aboard
     a  U.S.  nuclear  submarine. The individual would  evidently
     face  the  loss  of  his  security  clearance  and  possibly
     criminal  prosecution by DOJ if he were to provide testimony
     in the INSLAW case.
          Through  an  intermediary, a  member  of  the  Hamilton
     family  was  told  that  this  individual  has  first   hand
     knowledge  about the fact that INSLAW's PROMIS software  has
     been  implemented aboard the U.S. nuclear submarine on which
     he serves, and that this individual is deeply sorry for what
     the  U.S.  Government has done to INSLAW and to the Hamilton
     WITNESS #11. This individual is a current career employee of
     DOJ who lacks confidence in the ability of DOJ to fairly and
     thoroughly investigate the misconduct against INSLAW.
          This individual claims to have witnessed DOJ officials,
     Garnett   Taylor   and  James  Walker,   remove   classified
     intelligence/national security documents  from  DOJ's  Civil
     Division for relocation or destruction.
     1    This  kind  of  high  technology  penetration  of   the
international banking system by U.S. intelligence is cited as one
of the important accomplishments claimed by William Casey for his
tenure  as  Director of Central Intelligence, in  Bob  Woodward's
book,  VEIL:  The  Secret Wars of the CIA  1981-1987,  page  386,
"There  was  penetration  of  the international  banking  system,
allowing  a  steady flow of data from the real,  secret  sets  of
books  kept  by  many  foreign  banks  that  showed  some  hidden
investing by the Soviet Union."

2   In  his  book,  VEIL: The Secret Wars of the  CIA  1981-1987,
Bob  Woodward attributes to William Casey the claim that  one  of
Casey's   principal   achievements   as   Director   of   Central
Intelligence  was in devising "better techniques to  monitor  its
[i.e.,  the  Soviet Union's] ballistic-missile  submarines."  (p.

[Electronic Edition of 29July93