. . to" . . I. MEMORANDUM TO: SAC, WMFO (74?330) (P) Date: May 18, 1988 From::?iEA I AKA: Iaka; Iaka; POSSIBLE OO: WMFO Re DOJ Criminal Division memo from Acting AAG JOHN C. KEENEY to FBIHQ dated 5/2/88 titled "Request for Investigation: Allegations by On 5/17/88, SAI Imet with Attorneyl lwho provided overview information as FOIIOWS: INSLAW received a DOJ computer software contract through DOJ procurement rather than GSA procurement at a time when INSLAW had no other client base beyond DOJ. It is not clear how, why, or through whom INSLAW landed the contract, but by 1983, their performance was found unsatisfactory within DOJ. that she personally had heard comments from a non?DOJ statistical expert before the INSLAW situation became an issue that their work was not considered good when they were performing on a not? for?profit basis under LEAA funding. Further, former AAG D. LOWELL JENSEN had a "long?standing dislike" for INSLAW from his days as a D.A. in Alameda County, California, where the prosecutors' office had case tracking software on?line. criticism of INSLAW was set forth in a book he wrote on the subject published in 1980??again long before the current INSLAW allegations became an issue.) INSLAW apparently looked at the $40 million PROMIS contract as a leg up to bigger DOJ projects. Even Judge BASON, who ruled in favor of INSLAW in its civil suit against the DOJ, conceded that INSLAW was in partial performance default under its contract. On or about 4/20/83. INSLAW o'ner WILLIAM HAMILTON was telephoned by of HADRON CORP., saying he planned to buy INSLAW. HAMILTON claims that when he told he was not interested in him he had wa to make him sell. HADRON becomes pertinent insofar as a part?owner of HADRON and its whol owned subsidiary ACUMENICS, is a friend of] was still a White [276% 3?36 SERIALIZEDWMFILED 42,4 WM 1 9 i988 FBI WASHEIELD OFFICE 2 b6 b7C .r . House advisor i1 1983I I be I ACUMENICS later received a $40 million software b7C contract servicing the DOJ Lands Divisionm?not PROMlS??after INSLAW was found unsatisfactory. With virtually no other client base besides DOJ, INSLAW filed for bankruptcy protection around February, 1985. also filed a second action in civil court?~anciliary to the bankruptcy??suing DOJ for damages. That case was filed and heard in 1986. The bankruptcy matter was ruled on in February, 1987. In an unusual manner, the bankruptcy court viewed the civil suit inseparable from the bankruptcy matter and heard them together. Much of the possible perjury comes out of the suit rather than the bankruptcy proceeding. In his ruling, Judge BASON did not go so far as using the word ?lied," but his opinion incorporates phrasing such that he found some of the testimony incredible and utterly unbelievable. BASON made no criminal referral for perjury, though, as far as is aware. BASON was not reappointed to the bankruptcy b6 bench shortly after the ruling, and he filed litigation against b7c the District Court judges over their failure to reappoint him. His case was dismissed. BASON's successor, Judge MARTIN TEEL, JR., has yet to set the amount of punitive damages against DOJ in the civil suit. INSLAW, meanwhile, is appealing its bankruptcy liquidation in U.S. District Court before Judge WILLIAMS B. BRYANT. Based on Judde opinion DOJ OPR began an a Iorq historv of in?office frictions between him and his boss- I At some point, I been contacted by staffers of Sen. SAM NUNN who is planning a committee hearing. Sens. RUDMAN and DODD also are interested in conducting hearings. The issue of perjury focuses on whether or not attempted to exert undue influence on the trustees assigned to 2 r" ?a . bankruptcy to convert or liquidate. b6 consistently denied attempting to influence the trustee's b7C decision. The only other witness whose testinony has been consistent is the trustee himself, out of the Alexandria U.S. TRUSTEES field off ce. was the one assigned to handle bankruptcy. I was Trustee then at the New York field office. At some pointy directedI Iassistant, Ito be detailed from New York to assist on the INSLAW case. There is confusion as to supposed to go to Alexandria to work WithI Idirectly or to go to the EXECUTIVE OFFICE OF U.S. TRUSTEES, in 0.0. Icontends he wanted -t the EXECUTIVE OFFICE. Iapparently understood the detail was to Alexandria. Judge BASON apparently construed that .wanted to hand pick someoneI he could direct. At some point during deposition, Isa suggest conversion or dismissal of INSLAW's bankru to in discussing possible reassignment. In court, testified there was no pressure did I thatI Iis an abrasive Dersonalitv. (5/15/88) with I at which time she told him Iis a subject of this criminal perjury investigation. is the only one who has formed far that he is a SUbject. I:Isaid position is that his full current recollection of events is what is on the record. consider reviewing anything that might refresh his memory. He has no particular reason to lie for and he wil consent to an interview. a preference to have was agreeable to interview by the FBI. currently is being scheduled for interview by NUNN Committee staffers. INSLAW ownersI Ihave alleged obstruction of justice in addition to perjury. The obstruction hinges on what they say was interference in their right to counsel. (This issue was the focus of a story by reporter RITA BRAVER on the CBS EVENING NEWS last week.) Attorney was fired from his law firm+J I while representing INSLAW. He toldI Ihe was firea?tor failure to control the client??iNSLAW.I Ibelieved one of Cums?ftpm?s_senior I_was_nesponsible and that :Iglid it in reta iation for namingl [in the civil suit. wasI Ipersonal attorney in 8 (and FeDresentedl Iin a matter invoivinql Iwhich Ia friend he investment trusteeI Iis of counsel to the DICKSTEIN SHAPIRO firm. absolutely denied any DOJ influence in his decision to dismissI I having any conversation at all with IaboutI ?as was alleged apparently. not recall what may 3 . I. have said concerning any discussions :Sc Both Judge BASON andl [have approached Special Prosecutor to bring these issues into investigation of Idetermined the INSLAW issues are unrelated to the matters of his investigation and would not add them. assigned in late February, 1988, to handle the evidence review necessary to determine whether a separate independent counsel should be requested for the INSLAW allegations stemming from "Inslaw, Inc. v. United States of America and the United States Department of Justice". That sort of preliminary inquiry was under a 15-day deadline to determine whether there was enough factual evidence to warrant a special prosecutor. not find sufficient factual evidence to recommend such a re uest. On the fifteenth day, however, INSLAW's attornevs?- land I L?came toI to press for a perjury investigation of [independent of what OPR was doing. Former AAG WILLIAM WELD signed the finding, accepting recommendation not to go to an independent counsei on the questions raised concerning both obstruction of justice and perjury. pursuing a criminal perjury ,on against Ibased on admission-. did no . pursuing a criminal OOJ investigation based on Iwholesale denial. I Iwere interviewed by OPR. decision was forwarded to OPR with a caveat that any additional information developed be furnished to this criminal investigation. advised on 5/16 when contacted by telephone to set an appointment with SA Ithat she had not thought about notifying Judges and TEEL of this perjury investigation. During the meeting on whether udicial notification was only an FBI policy or what. I was shown a copy of MIOG Part I, 74?2.1.3 concerning FBI policy which may or may not emanate from AG Guidelines. advised she wanted to ask around at DOJ before determining whether she would notify the two judges. This situation was brought to the attention of SSA FBIHQ, on 5/17/88 who will be advised determines against notifying the judges.) I Ifurnished copies of the following documents for SA I to review: a. Non?confidential version of Judge BASON's opinion in the bankruptcy/civil suit proceeding; 4 y- I LEADS: 0' Chief, PIS, . Letter summarizing allegations dated 2/12/88 from IDeputy b6 b7C C. Affidavit Ofl dated 3/28/87; d. Deposition of e. Deposition of taken 3/25/87; taken 5/22/87; f. rQQuLi_iLanscL?pt pages 853?728 of testimony of (undated); g. Deposition ofl ltaken 3/23/87; h. Deposition ofl Itaken 4/27/87; Deposition ofl Itaken 3/23/87; j. Deposition of [taken 3/28/87; k. Court transcript of pages 311-368 of testimony of I(Undated); l. Memo dated 12/18/87 froml OPR, to ARNOLD l. BURNS, Deputy AG, re Allegations of Misconduct on the Part ofI I m. Letter dated 3/17/88 from Attorneyl to ARNOLD 1. BURNS, Deputy AG, re WMFO at Washington, D.C.: 1. Will obtain assurance froml khat Judges BRYANT and TEEL are both notified of the allegations and are agreeable to this perjury investigation. 2. Will review the above listed documents. 3. :11 contact] land/or at CPR for a list of all individuals interviewed to date in connection with this matter and the results of interviews. Will also obtain from OPR copies of deposit ons/a-fidavits/transcripts beyond those provided by 4. Will request his submischn to polygraph examination. ti, . . MEMORANDUM TO: SAC, WMFO (74?330) (P) Date: May 18, 1988 From: I b6 b'7C Iaka; aka; POSSIBLE OO: WMFO Re DOJ Criminal Division memo from Acting AAG JOHN C. KEENEY to FBIHQ dated 5/2/88 titled "Request for Investigation: Allegations by On 5 17 A met With Attorney provided overview information as follows: INSL received a DOJ computer software contract through DOJ procure ent rather than GSA procurement at a time when INSLAW had no otg?? client base beyond DOJ. it is not clear how, why, or through whom INSLAW landed the contract, but by 1983 their performance was found unsatisfactory within DOJ. that she personally had heard comments from a non~DOJ statistical expert before the INSLAW situation became an issue that their work was not nsidered good when they were performing on a not? for?profit is under LEAA funding. Further, former AAG D. LOWELL had a "long?standing dislike" for INSLAW from his days a D.A. in Alameda County, California, where the prosecut 3' office had case tracking software on?line. JENSEN's criticism of INSLAW was set forth in a book he wrote on the subject published in 1980?-again long before the current INSLAW allegations became an issue.) apparently looked at the $40 million PROM 8 contract as a leg up to bigger DOJ projects. Even Judg BASON, who ruled in favor of in its civil suit against the DOJ, conceded that INSLAW was in partial performance default under its contract. On or about 4/20fg3. INSLAW owner was telephoned by] of saying he planned to buy lNSb?y/ HAMILTON claims that yhenvhe told he was not interest in told him he had to make him sell. HADRON becomes pertinent insofar as (a part~owner of HADRON and its wholly owned sub idiary ms?? is" a ?F?r i'e'n'd of] Iwas still White smmuzm?l?mm k/ MAY 1 9 i938 WASH. FIELD cr?bli/ .um