Subject: Re: Casoloctopus

Kenn Thomas
As Inslaw prepares  for  its  new  day  in  court [see Conspiracy
Nation Vol. 8, #91], the following  reviews  some  of  the  legal
history  of the PROMIS case.  The excerpt comes from THE OCTOPUS:
and Jim Keith, available next month from Feral House,  POB  3466,
Portland, OR 97208,

Kenn  Thomas  publishes  Steamshovel  Press a "conspiracy theory"
journal available for $6 from POB 23715, St. Louis, MO 63121,

Inslaw and The Law
     Danny Casolaro had been pulled  under  by the Octopus of his
imagining or  his  investigations,  perhaps  both.   In  not  too
distant  waters,  however,  other  behemoths  thrashed  about for
supremacy in an even larger conspiratorial sea--the law.

     Legal forces lined up  against  Inslaw began to clarify when
the Hamiltons  discovered  that  Associate  Attorney  General  D.
Lowell  Jensen  had,  as  District  Attorney  in  Alameda County,
California, promoted DALITE, a  rival management software, to the
58 county California district attorney offices.  Larry  Donoghue,
the  man  responsible  for  selecting  software  used by the L.A.
office and later named  deputy  district  attorney for LA County,
recalls that, "Jensen called me into his office and I  went  away
feeling what I regarded to be unusual and significant pressure to
select  the  DALITE  system."   PROMIS,  however, had won the Los
Angeles County  office  and,  as  Bill  Hamilton  later remarked,
"...evidently Jensen bore a grudge."  Hamilton  recalls,  "Jensen
was  promoted to associate Attorney General in May or June of `83
-- and that's when  all  the  contract disputes came up."  Jensen
even served as chairman of the oversight committee in  charge  of

     Additionally,  Jensen  had served with Ed Meese for 12 years
in  Alameda  County  while  Meese  had  been  a  deputy  district
attorney, and  in  1985  Meese  promoted  him  to Deputy Attorney
General.   He  also  came  under  scrutiny  during  the  Senate's
Iran-Contra investigations when a memo was  discovered  from  him
tipping  off Oliver North that the federal prosecutors were aware
of his actions.  This from  a Justice Department official charged
with prosecuting the matter.  (1)

     There was no misunderstanding in the  government's  handling
of  PROMIS.   The government, or at least a particular segment of
it, was out to get  Inslaw.   Sometimes  they  even said so in so
many words:  "On a gorgeous  spring  morning  in  1981,  Lawrence
McWhorter,  director  of  the Executive Office for USA attorneys,
put his  feet  on  his  desk,  lit  an  Italian  cigar,  eyed his
subordinate Frank Mallgrave and  said  through  a  haze  of  blue
smoke:  "We're out to get Inslaw."

     "McWhorter  had  just  asked  Mallgrave to oversee the pilot
installation of PROMIS, a  job  Mallgrave refused, unaware at the
time  that  he  was  being  asked  to  participate  in   Inslaw's
deliberate destruction.

     "We  were  just  in  his  office  for  what I call a BS type
discussion," Mallgrave told Wired.   "I  remember it was a bright
sunny morning...  (McWhorter) asked me if I would  be  interested
in   assuming   the  position  of  Assistant  Director  for  Data
Processing...basically working  with  Inslaw.   I  told him...  I
just had no interest  in  that  job.   And  then,  almost  as  an
afterthought, he said `We're out to get Inslaw.' I remember it to
this day."(2)

     The  job eventually went to C. Madison "Brick" Brewer.  Bill
Hamilton previously had  fired  Brewer  for poor job performance.
Brewer's new position as hired gun on the  Inslaw  case  for  the
Justice  Department  gave  Hamilton  an early perception that the
undue hassle faced  by  his  company  came from Brewer's personal
vendetta.  This was before the revelations concerning Earl Brian,
the October Surprise pay-off and the rest  of  the  sordid  mess.
(3)  The  Justice  Department  determined  that  no  conflict  of
interest  existed for Brewer in his new assignment.  Brewer would
eventually testify in  federal  court  that  he received approval
from Deputy Attorney General Lowell Jensen, whose vested interest
in the rival DALITE software had been  damaged  by  the  contract
award  to  Inslaw  in the 1970s, for all of his actions regarding
Inslaw.   Perhaps  revenge   had  transformed  Inslaw's  contract
disputes into a legalistic attempt to trash the company.

     Things could never be that simple in Inslaw's case, however.
Joined with Brewer's at Justice was  Peter  Videniecks,  the  man
Michael  Riconosciuto  had  sworn  threatened  him to not testify
before the House  Judiciary  Committee.   Videniecks  had his own
incestuous connection to Inslaw:  he had worked  in  the  Customs
office  maintaining  its contracts with Earl Brian's Hadron, Inc.
systems consulting group.  Videniecks  and  Brewer led Justice to
demand that Inslaw turn over  PROMIS  just  in  case  an  alleged
impending  bankruptcy  made it impossible for the company to live
up to its  contracts.   Inslaw  agreed,  but with the stipulation
that Inslaw retain all rights to enhancements to the program  and
that  Justice  only  provide  it  to  the  US  Attorney's office.
Justice, predictably, reneged.   It  made  no effort to determine
the  validity  of  Inslaw's  claims  of   ownership   to   PROMIS
enhancements   and   began   to  withhold  payments,  making  its
subsequent  forced  march   into   bankruptcy   court  a  Justice
Department self-fulfilling prophecy, and  beginning  the  process
that  originally had attracted Casolaro's attention.  As Inslaw's
problems mounted,  Earl  Brian's  Hadron,  Inc.,  made  a play to
takeover the company through Dominic "We have ways of making  you
sell" Laiti, another company, SCT, financed by investment bankers
linked to Brian, also attempted a buy-out.

     Inslaw  ultimately hired Leigh Ratiner of Dickstein, Shapiro
and Morin, to  file  suit  against  Justice  to  the  tune of $30
million.  Ratiner established  the  bankruptcy  court  as  having
jurisdiction in the dispute with the unique argument that Justice
had  seized  control  of  PROMIS.   As  Inslaw's  creditor,  this
violated  a tenet of the Bankruptcy Act forbidding creditors from
controlling the property of debtors.(4) The strategy led to Judge
George Bason's favorable ruling  for  Inslaw  in 1987, which also
led to Bason's early removal from the bench and, according to Ari
Ben-Menashe, possibly also to Leigh Ratiner's early retirement by
a pay-off to his law firm.   (5)  Federal  district  court  judge
William  Bryant  upheld  Bason's  decision after an appeal by the
Justice  Department,  and  the  Supreme  Court  denied  review in
October 1991.  A separate appeals court, however, deciding on  an
appeal  made  by  the  Justice  Department, ultimately overturned
Bryant on the  basis  of  the  jurisdictional  argument.  A three
member panel of judges determined that federal  bankruptcy  court
had  no  jurisdiction  in the case.  No judgement was ever issued
exonerating the Justice Department from its actions in the Inslaw

     Casolaro had given some thought to other legal dimensions of
the Inslaw predicament.  In  undated  notes, he made an extensive
study of computer software and hardware case law, from the  point
of   view  of  trade  secret  protection,  trademark  protection,
contract  law  and  patent  law  and  copyright  law.   From that
perspective, he underlined the concept of "a reverse  engineering
approach"  that  he  felt  was  applicable to the legal status of
PROMIS.  Called the  "clean  room  technique",  it  is  used as a
method of avoiding copyright infringement in  the  developing  of
software  products of similar functions.  The clean room uses two
teams, one receiving and  decompiling  the protected work legally
and "producing a document setting forth ideas and  specifications
that  are in the unprotected idea domain."  The second team takes
the document and, with  no  further  communication with team one,
creates a new product without infringing on the protected  aspect
of  the  original  software.   Casolaro  notes  that such reverse
engineering had been used  by  the many computer manufacturers to
clone Apple and IBM computers.  Apple and IBM never pursued legal
action against the clean room technique because  they  feared  an
unfavorable  legal  action.  (6) Perhaps for similar reasons, the
PROMIS problems were  never  played  out  in  the copyright legal

(1) Mahar, Maggie, "What  Really  Sparked  the  Vendetta  Against
Inslaw?",  Barron's National Business and Financial Weekly, April
4, 1988.
(2)  Fricker,  Richard  L.,  "The  Inslaw  Octopus,"  Wired  1.1,
Premiere Issue, 1993, p 80.
(3) Richardson, Elliot,  L.,  "A  High-Tech  Watergate," New York
Times, October 21, 1991.
(4) Fricker, p. 101.
(5) Ben-Menashe, Profits of War, p. 141.
(6) Casolaro's Notes.