9. INSLAW SOFTWARE THEFT: CONSPIRACY AT THE JUSTICE DEPT?

In an ongoing legal battle the Inslaw Corp. charges that the U.S. Department of Justice robbed it of its computer software program, conspired to send the company into bankruptcy, and then initiated a cover-up.

The Inslaw software in question, called Promis, was a potential gold mine. A case-management and criminal-tracking program, the software can also be used to track complex covert operations. For this reason, Promis had sales appeal to both law-enforcement agencies and the international intelligence community. In March 1982 Inslaw won a $10 million, three-year contract with the Justice Department, but Justice reneged, withholding nearly $2 million. Consequently, Inslaw sought refuge in Chapter 11 bankruptcy and proceeded to sue Justice.

In September 1987, federal bankruptcy judge George Bason found that the Justice Department used "trickery, fraud and deceit" to take Inslaw's property, and in February 1988, Bason awarded Inslaw $8 million. Not quite one month later, Judge Bason was denied reappointment to the bench. In the past four years, only four of 136 federal bankruptcy judges have been denied reappointment. Incredibly, Bason was replaced by S. Martin Teel, one of the Justice Department attorneys who unsuccessfully argued the Inslaw case before him. Justice immediately appealed Bason's ruling, but in November 1989 a federal district court upheld Bason's ruling. Nevertheless, last spring the U.S. Court of Appeals set aside that ruling on the grounds that the bankruptcy court lacked jurisdiction.

Earlier this year the case took a new twist. Based on a number of sources from inside and outside of the Justice Department, Inslaw's owners went public with allegations that the Reagan Justice Department, turned the stolen software over to businessman and arms dealer Earl Brian, a friend of both Edwin Meese and Reagan, who served in Reagan's cabinet when he was governor of California. Inslaw alleges that its software was given to Brian as a payback for Brian's help in arranging the now infamous "October Surprise" deal. Brian is the owner of Infotechnology, Inc., which controls the bankrupt Financial News Network and United Press International -- not to mention Hadron, Inc., which coincidentally, failed in its attempt at a hostile take over of Inslaw. Meanwhile, three different sources have stated in sworn affidavits that Earl Brian brokered the Promis software on a world-wide basis. And according to Inslaw owner Bill Hamilton, his software has been illegally sold to at least 15 different countries.

According to Inslaw's attorney, former Attorney General Elliot Richardson, "Evidence to support the more serious accusations came from 30 people, including Justice Department sources." Additionally, the files of the Justice Department's chief litigating attorney on the case have disappeared.

SSU CENSORED RESEARCHER: MARK LOWENTHAL L

SOURCE: IN THESE TIMES, 2040 N. Milwaukee, Chicago, IL 60647,
DATE: May 29-June 11, 1991
TITLE: "Software Pirates"
AUTHOR: Joel Bleifuss

SOURCE: RANDOM LENGTHS, P.O. Box 731, San Pedro, CA 90733,
DATE: October 3-16, 1991
TITLE: "Software To Die For"
AUTHOR: James Ridgeway

COMMENTS: Investigative journalist Joel Bleifuss said that although the Inslaw case has received national coverage after his In These Times article, the "coverage has been woefully inadequate. The media has largely ignored the Inslaw allegations involving the October Surprise, Robert Gates, the disappearance of Justice Department files, the stonewalling by former Attorney General Thornburgh, the connivance of Earl Brian, and the apparent rigging of the judicial process."

Bleifuss feels the public would benefit from a fuller investigation of the Inslaw case because "it raises important questions about the integrity of the judicial process and -- if the allegations concerning Inslaw's connection to the October Surprise hold true -- the sanctity of our electoral system."

Bleifuss also has some chilling thoughts about the consequences of the limited coverage given the issue. "First, the mass media's refusal to put its vast resources to use investigating the Inslaw case, sends the message that such allegations have no merit. This serves to delegitimize the work of reporters in the alternative press. Second, the mass media's failure to take seriously what in this case is a well-documented example of official malfeasance, sends a message to mainstream journalists that they will not advance their careers by investigating government misdeeds. Consequently such investigations do not take place and elected officials are, by implication, free to commit such crimes with impunity.

(On January 13, 1992, in a little publicized ruling, the U.S. Supreme Court refused to reinstate a $7.8 million judgment won earlier by Inslaw in its long-running dispute with the Justice Department.)