(EST PUB DATE) STATUS REPORT ON INQUIRY FROM CHAIRMAN LEACH HOUSE BANKING AND FINANCE COMMITTEE (W/ATTACHMENT)

• Document Type: FOIA
• Keywords: SEAL BARRY
• Keywords: MENA ARKANSAS
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 0001289828
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 22
• Document Creation Date: June 22, 2015
• Document Release Date: September 30, 2009
• Case Number: F-2002-01499
• Publication Date: July 1, 1995

APPROVED FOR
RELEASED DATE:
28-Sep-2009
SkET
Joanne Isham
Status Report on Inquiry from Chairman Leach
House Banking and Finance Committee
Briefing Request
? Chairman Leach (R-IA) wrote you on 11 July 95
seeking your help in "verifying or laying to rest
various allegations of money laundering in Arkansas
in the late 1980s." (Copy of letter attached as Tab
A).
?
He asked for a briefing from the CIA's Inspector
General to address 7 topics ranging from efforts to
to whether the Agency was aware of
certain companies and individuals who allegedly
operated in or around Mena, Arkansas.
? The worst of these allegations, faxed to-us before
the briefing, credited to a CIA source in a magazine
called Media Bypass, is that the CIA discovered that
Vince Foster was a spy for the Israelis, and used a
Cray supercomputer atCIA'Headquarters to
surreptitiously drain $-2.73 million from Foster's
secret Swiss account. The article goes on to
speculate that Foster committed suicide because he
discovered his account had been drained. (Copy of
article attached as Tab B.)
? A similar briefing request was sent to NSA.
Briefing by CIA and NSA
? On 21 July 95, Congressional Affairs and Inspector
General representatives from CIA and NSA met with
Chairman Leach and his assistant staff director,
James McCormick.
? Chairman Leach was very cordial at the briefing, but
his first question was whether anyone at either
agency had discussed his inquiry with anyone at the
White House, the Department of Justice, or any other
governmental organization and he was told we had not
discussed this outside the agency.
? The CIA's IG had not conducted investigations into
these allegations and had a limited role in the
briefing. The Agency's OCA representative advised
that we had not finished our records review, but we
were aware of one of the individuals identified in
(b)(1)
(b)(3)
(b)(6)
SEdRET
the Chairman's 11 July letter, Barry Seal (now
deceased). We knew of Seal because of previous
inquiries (in connection with criminal prosecutions
of other individuals), but advised we had no
relationship to Seal nor any records regarding his
activities in Mena, Arkansas.
? We also advised him that both the SSCI and the House
Judiciary Committee conducted in-depth reviews in
1991 and 1993, respectively, about another subject
of his 11 July letter inquiry, INSLAW's PROMIS
software. The conclusion then and now, is that the
Aaencv nevpr nurrhAqpd Any TIVgLAW/PPCNTTq qnftwArp
?
? During the briefing, Chairman Leach read-Ifrom a list
of additional questions provided to us after the
briefing. The briefers indicated that we could not
answer all of these questions conclusively, and
Chairman Leach asked for some limited follow-up
searches. (Copy of additional questions attached as
Tab C.)
? NSA's IG had no information about the questions
posed in the 11 July letter, but did provide a brief
broadbrush background on how NSA conducts its normal
daily activities
?
? We are continuing to search our records for
responsive information and once the review of these
materials is completed, we will brief the findings
to our oversight committees, the NSC and Chairman
Leach.
441
?JAmps A, WAcH, loWA. CHAIRMAN
? ? MILL MECOLLUM. FLORIDA
MARGE ROUKIMA, NEW JERSEY
OLIO EERUTR, NEBRASKA
TON' COUSIN
niCHARo H. RAKER. LOURIIANA
RICK LAZO, NEW YORK
SPENCER BACHUS. III. ALARAIAA
MICHAEL CASTLE. DELAWARE
PETRA KING, NINA/ YORK
EDWARD kora, CALIFORNIA
FRANK o. LUCAS. OKLAHOMA
JERRY WELLER, ILUNOIS
JAI HAYWORTH, ARIZONA
JACK MITC_ALF WASHINGTON
SONNY SONO. CALIFORNIA
ROIERT HEY, OHIO
R01111 L ENRuch, JR., MARYLAND
SOS SARA. GEOROIA
DICK CHRYSLER. MICHIGAN
FRAN4 CREMEANS. OHIO
JON FOX PENNSYLVANIA
FREDERICK IIEINEMAN. NORTh CAROLIN
STEVE STOCKMAN, T1XAs
FRANK LollIONDO, MONA/15V
IC, WATTS, OKLAHOMA
SUE W. KELLY. NEW YOR
U.S. HOUSE OF REPRESENTATIVES
COMMITTEE ON BANKING AND FINANCIAL SERVICES
ONE HUNDRED FOURTH CONGRESS
2129 RAYBURN House OFFICE BUILDING (14
40 WASHINGTON, DC 20515-050
?
y 11?1995
Li LO
Hon. John M. Deutsch C-?
Director
Central Intelligence Agency
Washington, D.C. .20505
Dear Director Deutsch:
?LC ?.1/
HENRYS. GONZALEZ, TEXAS
JOHN J. LAPALCE, NEW YORK
trAUCE F. VENTO, MINNEEfoTA
CHARLES E EXHUMER, NEW YORK
VARNEY FRANK. MASSACHUSETTS
FAUL E. ICAN,JORaxl, PENNSYLVANIA
JOSEPH F. KENNEDY II, MA33AcHLMETTS
FLOYD 14. FlAXE, NEW YORK
KWERD MFLIMS. MARYLAND
MAxINE WATERS., CALIFORNIA
IHIL ORTON, UTAH
CAROLYN R. MALONEY. NEW YORK
LUIS V. OUTISAII12, 11.1.1W*
WcILLS FrOYIAL-ALLAND, CALIFORNIA
THOMAS M. WIRETT. WISCONSIN
WOE* M. VELAZOUEZ NEW YORK
ALSERT R. WyNN. MARYLAND
ME? FIELDS, LOUISIANA
mELvIN WATT, NORTH CAROLINA
MAURICE IfiNcHEY, NEW YORK
GARY ACKERMAN, NEW YORK
KIN [NUM TixAs
RIPINARD SANDERS, VERMONT
ITO 22A?Ths2
I am writing to seek your agency's help in verifying-br laying to
rest various allegations of money laundering in Arkansas in the
late 1980s. For that purpose, I would request a briefing from
the CIA's Inspector General on Friday, July 14' before 1:00 p.m.;
if that is not possible, Monday; July 17, would also be a conve-
nient day.
The reports I have in mind have appeared in the general press
and, sometimes in sensational form, in more narrow-gauged out-
lets, including the Internet. They speak of secret foreign bank
accounts held by prominent people in Arkansas, special software
to monitor bank transfers, an Arkansas-centered network of banks
formed to launder money, and similar tales. I would like to
determine whether there is any substance at all to these stories.
Specifically, I would like your Inspector General to tell me
whether the Agency:
(1) knows of any secret bank accounts held by U.S. cit1zens
domiciled in Arkansas at any time between 1988 and now;
(2) is aware, directly or indirectly, of any efforts by computer
hackers, U.S.-government related or otherwise, to penetrate banks
for the purpose of monitoring accounts and transactions;
(8) knows of or has participated, directly or indirectly, in
efforts to sell software?notably versions of a program in use at
the Justice Department called PROMIS--or clandestinely produced
devices to foreign banks for the purpose of collecting economic
intelligence and information of illicit mane ?
page two
(4) is cognizant of any attempts by Systematics Inc, an Arkansas-
based electronic data processor that is now a division of All-
tell, to monitor or engage in the laundering of drug money or
proceeds of other illegal activities, notably those conducted
through Mena, Ark.;
(5) can provide information about Charles Hayes, a businessman in
Nancy, Kentucky, who claims to have been a CIA operative in Latin
and Central America, among other places;
(6) knew of or was involved in, directly or indirectly, any
covert activities by the U.S. government or any private parties
(the so-called "private benefactors") in or around Mena, Arkan-
sas, in the late 1980s;
cy
(7)' had any contractual or other relationship with the late Adler
Harriman "Harry" seal in the 1980s or knew about his activities
in connection with MENA.
- u12>-/'
I would appreciate your help in shedding light on these matters.
Si erely,
A. Leach
Ch man
2
/
? ? .
e-
AA(""-firt'
ue,
Investigate Mena
? ? For more than a year we have been
reporting on the mysteries of tiny
Mena airfield in western Arkansas.
The clouded tale of drug smugglers
and spy operations In the 1980s is a po-
tential embarrassment to the Democ-
ratic governor who ran the state and
the Republicans who ran the White
House. But the big story here is not
primarily about who did what 10 years
ago. It's about a very 1990s concern:
drugs. How has our system broken
doWn so that illegal drugs can be
moved into this country on such a
large scale?
; This week, the American Spectator
magazine adds another piece to the
Mena puzzle with a story about
Arkansas State Trooper L.D. Brown
written by Spectator editor R. Emmett
Tyrrell. Now, the account's weakness
and strength are one and the same ?
L.D. Brown himself. Its weakness is
that it is a single-source account; its
strength is that L.D. Brown is an im-
portant source. A potentially key
player in the Whitewater saga, Mr.
Brown corroborates part of David
Hale's claim. that Mr. Clinton put
pressure on him for financial help.
Mr. Brown now says that while
working on then-Gov. Clinton's secu-
rity detail, he applied to the Central
Intelligence Agency, with the gover-
nOr's support. Following CIA testing
and an exchange of letters?supplied
tO.Mr. Tyrrell by Mr. Brown?the state
trooper claims he was contacted by
Mena drug smuggler Barry Seal. Soon
after, he was on two Central American
flights from Mena airport aboard Mr.
Seal's C-123K, running guns lo the
Contras. Mr. Brown, a former *nar-
cotics officer, says that when Mr. Seal
showed him cash and cocaine ship-
ments, he quit. When he confronted
Gov. Clinton about . the drugs and
money, Mr. Brown allegedly was told
not to worry about it. "That's
Lasater's deal," Mr. Brown claims
Gov. Clinton told him.
? To be sure, Dan Lasater is a color-
ful figure. He ran a free-wheeling
bond house in Little Rock, and was
friend and campaign supporter to Bill
Clinton. In 1986, in a case that also in-
volved Mr. Clinton's brother, Roger,
Mr. Lasater pleaded guilty to a co-
caine distribution charge and went off
to prison for a brief stay. The federal
prosecutor who handled the case was
George Proctor, a Carter-era ap-
pointee who now heads the Justice De-
partment's Office Of International Af-
fairs; Mr. Proctor's office has author-
ity over aspects of another of our long-
standing concerns, BM. One of Mr.
Proctor's predecessors ? at ? 01A,
Michael Abbell, .was in the news re-
cently when he was indicted on racke-
teering charges in connection with the
Cali.drug cartel. ?
Our own reporting about Mena
points more toward Washington than
Arkansas. We want to know what the
federal government knew about drugs
and money flowing through.the area.
Our Micah Morrison has painstak-
ingly separated fact from fiction re-
garding Mena and Barry Seal's in-
volvement with the CIA, the Contras
and cocaine traffic. Mr. Seal, a some-
time informant for the Drug Enforce-
ment Agency, smuggled several bil-
lion dollars' worth of drugs into the
country. In our October 13 story "The
Mena Coverup," we detailed the short-
circuiting of nine separate state and
federal probes into Mena. Reliable
sources in the intelligence community
now tell us that in the years after Mr.
Seal's death, some activities contin-
ued around Mena: an AWACs-Patriot
system was tested, CIA contract
planes were repainted, and the area
was included in a counterterror exer-
cise run out of nearby Fort Chaffee.
But the heart of Mena, we suspect,
is narcotics, and on this aspect an-
swers are lacking. Drugs? Arkansas
officials wave off the question, saying
Mena was a federal responsibility.
The CIA blames a "rogue DEA opera-
tion;" the DEA isn't talking; the FBI
says "no comment." .
The betting around here is that L.D.
Brown and others in the Arkansas
State Police know a lot more about the
matter?including what the feds were
up to?than they are letting on. State
police officers are starting to show up
all over the Mena story. While we dis-
count the extreme speculation in self-
proclaimed CIA operative Terry
Reed's book about Mena, "Compro-
mised," it's interesting to note thit Mr.
Reed is making headway in Little Rock
with his lawsuit against former state
troopers Tommy Baker- and Buddy
Young; Mr. Young also served for a
time as Gov. Clinton's security chief.
Mr. Reed's lawyers have deposed sev-
eral state troopers in connection with
the case, Mr. Tyrrell says. Last year
"CBS Evening News" reported that a
top Arkansas State Police official
played a role in derailing an early ef-
fort to advance the Mena probe.
Some reports to the contrary, we
see no indication that Independent
Counsel Kenneth Starr is investigat-
ing Mena or Mr. Lasater. Mr. Starr
appears to be sticking close to, his
mandate to examine matters arising
from Madison, the Whitewater Devel-
opment Co., or Mr. Hale's Capital
Management Services.
Yet Mena cries but for investiga-
tion. A congressional committee with
resources, subpoena power, and the
perseverance displayed by some past
chairmen should look into this. If some
chips fall on the Republican side, so be
it. Important questions need to be an-
swered.
Was Mena simply a remote outpost
of the Cold War? Or was it a major
trans-shipment point for drugs and
money laundering? To what degree
were government officials involved?
Where did all the cocaine and cash in-
volved in the Barry Seal operation go?
Were Arkansas financial institutions
involved in laundering drug money?
Again, how Mena worked is of
some present moment as the U.S. con-
tinues to wrestle with illegal drugs?
their use apparently on the increase
again among teenagers?and the at-
tendant corruption. Mena may pro-
vide a window into one of the big
sources of this problem.
Big Temptation
Philanthropic and productive are Bank a bit from the ee.t?a
ne
By CHRISTINA HOFF SOMMERS
New Jersey sponsors the "New Jersey
Project?: NS goal Is to "transform" the
curriculum in higher education to make it
more multicultural and "inclusive." The
project circulates a "guideline" cautioning
that "much previous scholarship has of-
fered a white, male, Eurocentric, hetero-
sexist, and elite view of 'reality.? Citing
the words of feminist historian of science
Elizabeth Fee, the guideline explains how
male scientists exploit nature the way a vi-
olent man exploits a helpless woman: "Na-
ture was female, and knowledge was cre-
ated as an act of aggression?a passive na-
ture had to be interrogated, unclothed,
penetrated, and compelled by man to re-
veal her secrets."'
The document is str,iking because it em-
anates from an Official government
agency. But it is the kind of attack that has
been routinely leveled at science by multi-
culturalists, radical environmentalists,
feminist theorists and others on the cul-
tural left. for the past several years. One
example from academia is a 1986 convoca-
tion address delivered by Donald Har- ?
ward, then vice president of academic af-
fairs at the College of Wooster in Ohio. Mr.
Harward informed the students that
"there is no objectivity even in science,"
and put them in the know by telling them
that "learning and teaching have less to do
with truth, reality and objectivity than we
had assumed." He has since gone on to be-
come president of Bates College in Maine.
An Active Defense
Until quite recently, professional scien-
tists studiously avoided reacting to these
sort of "crithilles." Fortunately, some are
beginning to realize that "anti-science" is
a serious threat that calls for an active de-
fense. Last month, under the auspices of
the New York Academy of Sciences, Uni-
versity of Virginia biologist Paul Gross
and Rutgers mathematician Norman
Levitt helped organize "The Flight from
Science and Reason," a high-level confer-
ence of more than 200 scientists, physi-
cians and humanists who met "to consider
the contemporary flight from reason and
its associated anti-science."
The distinguished panelists, who in-
cluded Harvard economist Henry
Rosovsky and Nobel Lattreate Dudley Her-
. schbach, explored "fashionable irra-
tionalisms," and examined "the threats,
or the damage already done, to public un-
derstanding. .. and considered practical
possibilities for effective responses."
? In one damage report Prof. Gerald
Holton, physicist
at Harvard Unive
Smithsonian Ins
American Chemk
a more telling e:
politics at the Sm
notorious Enola G
In 1989, the ;
Smithsonian Muse
to design a perma
in American Life."
urally expected an
triumphs of 20th cc
and did not fmagir
spelled out in the t
and $S million later
was an exhibition
can science as a s,
and environment
A cons
scientists, p
up against
roshitlia and Nagas
Canal, Three Mile
sion of the space sh
opposed to showing
science and techno
ing failures and ho
exhibit took an ove
view of American s(
Head curator Ai
moved by the ACS's
hibit lacked balanc
magazine, "The p
something about the
The curators defen(
as if theirs was the
"We know it is imp,
Integrity of the Smit
American pre-em
high technology is o
the 20th will go do?
American century. S
well as dismaying, ti
diens feel morally
American science an
how it has dramatic
life. Negotiations b(
and the Smithsonian
but a happy ending i
Martin Lewis, a
ronmentalist at Di
formed the conferen
science, coupled wi
reason, is the norm
influential group of ;
the study of . . . en
Actions Spi
The greatest illusion in business is that
employees work for managers; this, of
course, Is exactly the inverse of reality. As
the unions learned in the 1920s, the day
that a significant group of employees.
chooses to stop working, managers are
helpless to carry out the tasks of business.
If you are a manager, the work force ar-
rives at your doorstep every day primed to
observe how you teach and implement the
corporate culture and to measure how you
exercise the standards your organization
purports to honor. If the employees believe
? in you, they reward you with superior ef-
forts. If you fail to meet their expectations,
they Punish you with substandard quality
and efficiency. Work force productivity is
a fair measure of how employees rate a
manager's performance.
If you accept this premise, then you also
will recognize that managers are primar-
ily in the teaching business. Every philos-
ophy, attitude and business practice used
by a manager in dealing with his employ-
ees ultimately will be re-expressed by the
employees through the quality of their
work. Show me an organization with a
high absentee rate, problems with expense
accounts, or a cover-your-butt mentality,
and I'll show you a manager who is
se-
ered or the nature of
tained. Managers re
Sweet and sour.
Some years back,
with Jay Chiat, foun
ica's most honored a
"You know," Jay sa
continuously contact
stars and seduce the
salaries and lots of I
press. Yet, a year oi
these young stars just
Managel
By ?J
face of the earth." Whi
hired his hotshots,
couldn't buy were Chi
vironment and the sup
of talented colleagues
alive person's work so
Jay's point applie;
Great work doesn't jt
minds of one or two c
produced by an entir.
understands and ena
icicLUpiei iuci
1
One Hundred Fourth Congress
Republican Staff
JUL 1 8 1995
COMMITTEE on BANKING and FINANCIAL SERVICES
Subcommittee on Domestic and International Monetary Policy
A-303 Rayburn House Office Building
Washington, D.C. 20515
Phone [phone]
Fax [phone]
- FAx # (-703 ) 1/9Z 8813 7sb
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"Fostergate"
By James R. Norman
Was White House Deputy Counsel
Vince Foster Selling U.S. Secrets to
Israel? The CIA Suspects He Was.
el92111Y JAWS k 1620X1.4AN
scetti.WrEc wmr PenitSSION
Two weeks before his death
on July 20. MS. White
House Deputy Counsel
Vincent W. Poster went
into a deep funk. The official cause of
death, given by Independent Counsel
hobert Fiske Jr., was suicide driven
by depression over, among other
things, some newspaper editorials.
But Vince Foster had a much bigger
and darker reason to be seriously
hummed out, lie had
just learned be waa
under investigation for
espionage.
Outrageous? lb say
the least. But a lengthy
investigation ha locat-
ed more than a dozen
satin-ea with connec-
tions to the intelligence
community who con-
firm a. shocking story of
money laundering and
espionage connected to
the highest levels of the
White Ilouse. Without
Wanda of immunity. the
116Urces risk going to
prison for violation of
the National Security
Act. Virtually all have
demanded anonymity.
According to a veter-
an Central intelligence
JLO. 14 199S 1113pm p3
Agency operative close to the Poster
investigation. Poster's first indication
of trouble came when he inquired
about his coded hank account at
Banco. Della Svizzera Italiana in
Chlasso. Switzerland. and found the
account empty. Poster was shocked
to learn from the hank that someone
using- his secret authorization code
had withdrawn all ?2.73 million he
had stashed there and had mined It
to. of all places, the U.S. Treasury.
Then, according to credit card
records reviowe?d by a private Invest!.
gator who has revealed them. Poster
canceled the two-day round-trip TWA
and Swiss Air plane tickets to Geneva
he had purchased on his American
Express card through the Whitt
House travel office on July 1.
Discretely he began asking what
was afoot, says the CIA source, con-
firming that someone in
the White House tipped
him off. It was bad news.
The CIA had Foster under
serious investigation for
leaking high-level secrets
to the State of Israel.
Per months, a email
cadre of CIA computer
hackers known as the
Fifth Column, armed with
a Cray supertiornputer,
had boon monitoring
Poster's Swiss account.
They had located it by
tracking money flows
from various Israeli gov-
ernment accounts atter
finding Foster's nexne
while secretly snooping
through the electronic
files of Israel's Messed,
Then by snooping through
the bank Map. they
AUG 1995 Aledid Dypass Magazin, 1 -800-4-13was
Cr ! meD I A*11YPASS*MACIA2IN
&tiered all tho information needed
withdraw the money.
Foster was just one of the first of
scores of high level U.S. pothiizl
figures to thus have their secret. Swiss
accounts looted of illicit funds.
according to both this veteran CIA
source and a separate (MUM, In
another intelligence agency. Over
the past two years. they say, more
than $2 billion has boon twept out
of offshore bank accounts belonging
to figures connected to the U.S. gov-
ernment with nary a peep from the
victims or their banks. The claim that
Foster and other U.S. figures have
had offshore accounts has been
confirmed by a separate high-ranking
CIA source and another in the
Department of Justioe.
Various +sources, some of them
controversial, have contributed other
pieces to this puzzle. Whatever their
motivations. these sources have
proven remarkably consistent. Their
stories jibe well with known facts and
offer a most plausible explanation for
Foster's mysterious depression. It
would also explain Washington's
determined effort to dismiss the
Poster affair as a tragic but amnia
suicide.
Vince Foster a spy/ AOtinilijr. it IS
much worse that that, if the Clia
suspicions are confirmed by the
ongoing foreign counterintelligence
probe. He would have been an
invaluable double agent with poten-
tial s.ocass to not only high-levet
political information, but also to
sensitive code, encryption and data
transmiseion secrets, the atuff by
which modern war is won or lost.
That is because for many Year.,
according to nine separate currant
and former U.S, law enforcement or
Intelligence officials, Poster had been
hohind-the-scenes manager of a key
support company in one or the
biggest, most secretive spy efforts on
record, the eilent aurveillance of
banking transactions both hers and
abroad.
This bank snooping effort began
its earnest won after Ronald Reagan
became president in 1981. Its prima-
ry aim was to track the money behind
International terrorists grottos and
soon came to be dubbed. 'Follow the
PON NO. 8124778677
money". according to the originator
of the program Norman A. Bailey.
Now a private Washington consultant
cm international banking, Bailey was
an economist and Reagan advisor on
the National Security Counsel. It was
Bailey's idea to begin using powerful
now computer and electronic eaves-
dropping technologies then emerging
to let the intelligence community
monitor the previously confidential
flow of bank wire transfers. This was
no small task; more than $I trillion a
day moves through New York alone.
Bailey himself constrained by the
Various sources, some
of them controversial,
have contributed other
pieces to this puzzle.
Whatever their
motivations, these
sources have proven
remarkably consistent
Their stories Jibe well
with known facts and
offer a most plausible
explanation for
Foster's mysterious
depression.
National Security Act, claims he does-
n't know exactly how the data was
collected. But he confirms that with-
in a few years the National Security
Agency, the signals intelligence arm
of the government, had .begun vacu-
uming up mountains of data by lis-
tening In on bank wire traffic It
became a joint effort of several
Western governments with the
Israelis playing a. leading role, since
they were the main target of
terrotism.
Other intelligence experts say the
flow of bite and bytes was captured
by various meanie from threaly tap-
ping phone lines to huplanting
customized chips in bank computers
to store up and periodically burst-
transmit data to a pawing van. or
AUG 1995 Ueda Bypass Uctsatise 1.800-4-Byp4ss
Jul. 14 1995 11:15At1 P4
low-flying Isig-ine or signals
moo satellite Another part of the
problem was to got the world's banks
to atantiardize their data so that it
could be easily analyzed. And that
brings us to PROMIS, a powerful
tracking software developed for the
U.S. Government and then further
enhanced by a little company called
inalaw Inc.
PROMIS stands for Prosecutor's
Management Information Systems
and was designed to manage lei*
cases. In 1982. just as Bailey's
follow-the-money effort was gaining
skarn. the Reagan Justice Depart-
ment eagerly snapped up Inslaw's
newest version of PROMIS. But the
government refused to pay the $6
million owed for it, v13111114 part or
the I:entreat was not fulfilled. Intim
forced into Chapter 11 reorganize-
tiers and nearly driven to quick
liquidation by the government and its
fanner partner AT&T, hotly denied
that claim. Ultimately, a bankruptcy
judge ruled the government stole the
PROMS softwere by *trickery. baud
and deceit'.
Why PROMIS? Because it was
adaptable. Besides tracking legal
cases, it could be easily customized to
track anything from computer chip
design to complex monetary transac-
tions. It was especially useful for
tracking criminals or just plain politi-
cal dissidents. inslaw claims the soft-
ware was eveautially illegally sold to
as many as SO countries for use by
their police. military or intelligence
agencies, inaluding such bloody
regimes as Guatemala. South Africa
and Iraq (before the 1994 Invasion of
Kuwait). Profits on those sales,
Inalaw claims, went mainly into the
private pockets of Republican political
cronies in the 1910s, including
Reagan confident Earl Brain, former
pari-owner of UPI and PMN.
Among the biggest profiteers on
PROMS, according to the 1992 book
by former Israeli anti-terreriran
staffer Ari Ben-Mouisobs. was for-
mer British publisher Bob Maxwell
On behalf of the Israelis, Marron
sweater sly marketed a doctored
version of PROWS equipped with one
or more *back doors* to allow an out-
sider Is tap Into the user's data base
OttALILtA IILjit.t41 t
t o.Juritt
FROM ; 1 c;42sf PS:*MAGA.21NE PHONE NO. : 812477E677
without les.ving an audit trait In fact,
II may have boon such rigged pro.
grains that allowed noted Israeli spy
Jonathan ?Obeid. froin his computer
terminal at the Office of Naval
Intelligence In Washington, In doWn?
load vast amounts of top secret U.S.
nuclear weapons and coda dais in the
mid-1980a.
According to a heavily-redaoted
Now Mexico FBI coneterintelUgence
report, Maxwell was apparently
allowed to sell two copies of PROMIS
beck to the U.S. weapons labs at
Sandia and Loa Alamos. for what
lnslaw claims was a hugely inflated
prioe of $37 million. That would have
allowed Pollard, if he we, using the
ritfinsci program, to obtain US. missile
targeting data long before Israel had
Its own satellite capability, thus mak-
ing it a rent nuclear threat to the
Soviet Union. Pollard was convicted
of espionage and sentenced in 1986
to life imprisonment. US. *Metals
have vehemently opposed efforts to
gain his early release.
Maxwell. according to Ben-
Menseche and nine other sources,
was also selling pirated versions of
Prtomis to major world Woks for
two in their wire transfer rooms to
track the blinzard of numbers.
rinticra ceded and confirmations
required oe each wire traasaction.
Don't oxpect any banks to admit run.
rung PROMIS. They probably now
know it was ptlfered. But they readi-
ly took it both becauee it was the beat
tracking software available at the
time and because the U.S govern-
ment wes tacitly leaning on them to
go along with the surveillance effort
or face regulatory reprisals or prose-
cution on money laundering throes.
With the widespread adoption of
PROMIS, the data became standard-
ized and much easier to analyze by
the NSA.
It took some effort to Install and
support PROM'S in the banking
industry. That's where Virwo Foster
came In. Sources VW that since at
least the late 1970s. Foster bad been
a silent. behind-the-scenes overseer
on behalf of the NSA for a small Little
Rock, Ark? bank date prooeseing
company. Its name was Systematics
Ae,Inc., launched in 1967 and funded
and controlled for most of Its life
by Arkansas billionaire Jackson
Stephens, a 1946 Naval Academy
graduate along with Jimmy Carter.
Foster was one of Stephens' trusted
deal makers at the Rose Law Firm
where he was partner with Hillary
Rodharn Clinton, Webster Hubbell
and William Kennedy (whose father
was a Systematics director). Hubbell
also played an overseer rola at
Systematics for the NSA for some
years according to intelligence
sources.
Systarnatios has had close ties to
the NSA and CIA ever since he found.
Sources say that since
at least the late
1970s. Foster had
been a silent behind-
the-scenes overseer on
behalf of the NSA for a
small Little Rock, Ark.,
bank data processing
company. Its name
was Systematics Inc.,
launched in 1967 and
funded and controlled
for most of its life by
Arkansas billionaire
Jackson Stephens, a
1946 Naval Academy
graduate.
ins, sources sew. as a money-burner
for covert operations, It it no 'morel
that there were billions of dollars
moving around in 'black" accounts ?
from buying and selling arms to the
Contras. Irian Iraq, Angola and other
countries to paying CIA operatives
and laundering money from clandes-
tine CIA drug dealing. Haying taken
CAW the complete computer rooms in
scores of small U.S. bulks as an "out-
sourced" supplier of data processing,
Systematics was in a unique position
to manage that covert money flow.
Sources say the money Was moved at
the end or every day disguised as a
routine bank-to-bank balancing
transection. out of view of bank
regulators and even the banks them-
selves. In short, It became cyber-
money.
4
Jul.14 195 111 ?NM
One man who uncovered the link
between Systernetice, Poster and
covers money movements from arms
and drugs was Bob Bickel, who Wed
an tmderenver Custom inveitigator
In the 19801. "We found Systematics
Was often a conduit for the (Uncle"
In arms and drug transactions,
says Bickel. now living in Texas:
'They wore the money &engem."
His story is corroborated by a. former
CIA employee who says it was wall
known within the agency it the
Late 1970. that Poster was involved
with Systematics in covert money
Mansgernent.
Another source is Michael
Riconoseitno. former research direc-
tor of the covert arms operation at
California's tiny Cabazon Indian
Reservation in the ...fly 1980s.
Riconoscitso claims his crew of corn-
Noir programmere helped customize
PROMIS there for banking end other
Use. He is now varying 30 years in a
South Carolina federal prison ostensi-
bly on dna charges. Though maybe
not a credible souroa on his own, his
story its well with other sources.
Systematics' money?laundering
role for the Intelligence community
might help explain why Jackson
Stephens tried to take over Washing-
ton-hosed Financial General Bank-
shares in 1978 on behalf of Arab
backers of the Bank of Credit end
Commerce International. Bccrg links
to global corruption and intelligence
operations bas been well documented.
though many myeuiriee remain.
According to a lewsuit tiled by the
Seourities and xchange Commis-
sion. Stephens insisted on having
thenoiny Systematics brought In to
take over all of POWs data prbeeSatng.
Representing Systematics in that
1978 SEC CUe: Hillary Rodharn
Clinton and Webster Hubbell.
Stephens was blocked In that
takeover. But PGB, later ronarned
Ping American, ultimately fell under
the alleged domination of BCCI
through Robert Altman and former
Defense Secretary Clark Clifford.
According to a technician who
worked for Finn American In Miens&
Systematics became a key computer
con rotor there anyway.
In the 1980t. Systematics' but,-
nese boomed. When it first sold stock
AUG 1925 Media Bypass Masazint 1-800-4-Bypass
SNI BY:Xerox lelecopier 1021 i 1-21? z;udrA
One Hundred Fourth Congress
Republican Staff
!?
ItIJ4OLD041,1;
JUL21 1995
? or\
COMMITTEE on BANKING and FINANCIAL SERVICES
Subcommittee on Dornattle and International Monetary Policy
B-303 litskyburn House Office Building
'Washington, D.0 20315
Phone
FILX
[phone]
(202) 2264337
FAX # (
F'R014,1 t )1 I S /417waffini
DATE
PAGES (including cover sheet) /(
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01.AUIVA le,eLvpici SUL.?)-414 1 t.vOrm
7/21/95
Queatisas_ar,SIA_and NSA ruresentatives
Background
As you know, there have been many published
reports and allegations that the airport in
Mena, Arkansas, was the base for a signifi-
cant operation, allegedly in support of con-
tra operations in Central America.
Planes reportedly flew arms to the Contras in
Nicaragua and returned from Central America
with drugs, and the proceeds from the
these drugs was then supposedly
Arkansas, possibly with the know edge of
state authorities and the involvement of
companies called Park-o-meter_ahd Systema-
sale of
tics. There are tale
in
Please understand that / am not interested in
launching a new probe of our Contra policy
with the intent of suggesting wrongdoing by
your agencies. What I am obligated to do is
probe Whitewater-related allegations so that
they can be proven true or false, as well as
certain other issues that fall under the
jurisdiction of the Banking and International
Relations committees on which I serve. There
is a lot of smoke here and possibly very
little fire. Nevertheless, it is important
that I be able to affirm that all allegations
have been thoroughly reviewed.
tyJ'Ij4..164i,4 L
ous.. s
General Questions
-- Have any of you or anyone else at
either the CIA or the NSA discussed this
inquiry from us with anyone at the whitie
House, the Department of Justice or any other
government organization?
-- Does the CIA or NSA have knowledge
of or any involvement in clandestine activity
by the U.S. Government or any private parties
in or near Mena, Arkansas, in the 1980s?
-- Have any reports on activities in
and around Mena been prepared for the DCI,
specifically, for former Director Woolsey?
A. Gun Smuggling
-- Did the CIA or NSA have any
involvement in, or knowledge of, any opera-
tion by the U.S. government or the so-called
"private benefactors" (led by retired Gen.
Richard Secord) to train pilots and/or ship
arms from the Rich inter-mountain regional
airport at Mena to the Nicaraguan Contras?
-- If so, did any such activities
take place with the knowledge or approval of
other Federal officials?
-- Did any such activities take
place with the knowledge or approval of Ar-
kansas state government officials?
2
iat./Nk..1 VA I. ? ,?...Vpd?,1 I I. I? ? s.
Did the CIA contract with any
Arkansas manfacturers to build automatic
weapons for the Nicaraguan Contras?
-- Does the CIA or NSA have any
contractual relationship with, or knowledge
of, an Arkansas company called Park-o-Meter,
also known as POM? Do.you have any reason to
believe that POM produced disposable fuel
tanks for use by Barry Seal and possibly
others in connection with supplying arms to
the Contras?
B.
Berry Baal and Asuociates
-- Did the CIA or NSA have any
contractual or .other relationship with the
late Adler Harriman "Harry" Seal (Seal Was
murdered, allegedly at the direction of Co-
lumbian drug lords, in Feb. 1986)?
-- To your knowledge, did any
other government agency (such as the DEA or
DIA) have any contractual or other relation-
ship with Barry Seal?
-- Is the CIA or NSA aware of any
IRS determination that money earned by Seal
between 1984 and 1986 was not illegal because
of his alleged CIA-DEA employment?
-- Did the CIA have any involve-
ment in, or knowledge of, the installation of
cameras on Seal's C-1231( transport plane for
3
? AL. 1?,?-?
use in a 1984 "sting" operation against the
Sandinista official Federico Vaughan?
Was Seal's C-122K cargo plane,
christened Fat Lady (serial number 54-0679),
sold by Seal to the CIA or any other U.S.-
government related entity? Was this plane
later shot down over Nicaragua with a load of
arms destined for the Contras?
-- Did the CIA have any contrac-
tual or other relationship with Terry Reed, a
former Air Force intelligence officer (who
claims he had a relationship with the CIA in
the 1980s) and author of Compromised: Clin-
1213.--auRb?iingLUAS.111?
-- Did the CIA ever have dealings
with former Arkansas State Trooper L.D.
Brown?
-- Is the CIA or NSA aware Of any
attempts by federal or state officials to
interfere with or terminate any investigation
the IRS, Justice Department, Arkansas State
Police or any other law-enforcement authori-
ties into Mena-related criminal conduct?
C. Narcotics Smuggling
-- Did the CIA or NSA have any
knowledge of or involvement in illicit nar-
cotics trafficking, possibly by rogue opera-
tives, in or near Mena, Arkansas? As you
know, there have been allegations that on
4
U.vAi.:ttJA ics?wypaCi 4V41 I
their return flights from Central America,
pilots smuggled more than 20 tons of cocaine
into Mena.
D.
-- Did the CIA or NSA have any
indication that
-- Does the CIA or NSA have any
indication that by Barry Seal or his associ-
ates attempted to
-- Does the CIA or NSA have an
indication that
E.
Does the CIA or NSA know of any
or more
ever held by U.S. citizens domiciled in Ar-
kansas at anytime between 1988 and now?
-- Is the CIA or NSA aware, di-
rectly or indirectly, of any effny-t-a 1-vtyl
5
JLOti ui.AelUA ,I v4
- 'Does the CIA have the cap4bili-
ty of
-- Does the NSA have the capabili-
ty of
does CIA and/or NSA have the capability,
directly or through another party, of
- Does CIA or NSA have the
authority to
-- Has CIA or NSA everl
-- Does the CIA maintain a team of
skilled computer hackers who routinely break
into the electronic data systems of foreign
banks? According to one source, this group
6
1......,,y4,VY(14 1
OLA1,1 ui.ALIVA tk;it.:k.Oplef ?vt; ? ? LI JL. L'eur, t
is informally known as the Fifth Column.
Correct?
- poes the NSA
-- Does the CIA or NSA know of or
has either agency participated in, directly
or indirectly, efforts to sell software--
notably versions of a program in use at the
Justice Department called PROMIS
--or other devices to foreign banks for the
purpose of facilitating
of their electronic data systems.
-- Does the CIA or NSA know of
customers to whom this software has been
sold?
-- Is the CIA or NSA aware of any
attempts by
-- Does CIA or NSA know of any
efforts by
7
01.AuruA ,clek,uplcr ivc,
-Or
-- Has the CIA or NSA received any
indication that proceeds from the sale of
PROMIS or similar software were used to fi-
nance arms shipments to the Contras?
-- Are there any indications of
-- Is the CIA or NSA aware of any
unauthorized efforts, possibly in the margin
of le itimate int
? - ' ? ? '
alb Z.
-- Does CIA or NSA know of a
Charles Hayes, who was born on 4/27/35, whose
social security-number is
who now resides in Nancy, Kentucky?
and
-- If so, has Hayes ever had any
ties to the CIA or NSA or any other U.S.
government agency? Have these ties been sev-
ered?
-- Hayes claims to be able to
break into the electronic data systems of
foreign banks. Has CIA
-- Is NSA or CIA aware of an ac-
count, number b-142AB2, at the Banca Della
Svizzera Italiana in Chiasso, said to have
belonged to Vincent Foster?
8
04:,04'1,W
JZOli Ui ?, UA 1.
-- Is either the CIA or NSA aware
of any foreign governments that might have
provided arms, money or assistance to any
group operating out of Mena?
10