"Inslaw, the Continuing Caper"
UNCLASSIFIED

INSLAW UPDATE 

Inslaw trial delayed while court panel inspects intelligence agency 
software 

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

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

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

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

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

					*     *    *

MODIFIED PROMIS - A COVERT OPERATION? 

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

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

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

PROMIS AND BANKING

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

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

PROMIS AND THE CLINTONS

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

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

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

					*     *     *

INSLAW AND THE MEDIA 

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

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

DANNY CASOLARO 

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

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

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

					*     *     *

INSLAW IN COURT - 1996

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

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

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

WITNESS DEPOSITIONS - CASE STUDY IN INTIMIDATION 

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

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

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

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

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

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

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

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

ELLIOT RICHARDSON - WITNESS FOR INSLAW

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

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

DAMAGES AND RESULTS 

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

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

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

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

					*     *     *

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

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