SPY STORY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00494R001100700058-6
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 3
• Document Creation Date: December 22, 2016
• Document Release Date: July 26, 2010
• Sequence Number: 58
• Publication Date: April 18, 1984
• Content Type: OPEN SOURCE

Approved For Release 2010/07/26: CIA-RDP90-00494RO01100700058-6
JOUR;, 1.
y story
Suits Focus on Extent
Of CIA Involvement
In an Alleged Fraud
Bankruptcy in Hawaii Left
Widows, Retirees Broke;
Was Firm Just a Front?
By JONATHAN KWITNY
Staff Reporter of THE WALL STREET JOURNAL
HONOLULU - A Central Intelligence
Agency covert operation, in the movies and
spy novels at least, is the very essence of
stealth: quiet men in drab topcoats slipping
In and out of a nondescript backstreet office
set up as a business front.
Forty-one-year-old Ronald R. Rewald,
however, doesn't fit the mold. During his six'
years on this island gateway to the+`ar
East, this CIA man flaunted his clod con-
nections?wlth top U.S. intelligent and mill-
tary,offlcials. Far from courtin(obscurity,
he spent money with the abapdon of an Arab
oil_ sheik: He owned a personal fleet of 12
limousines and luxury, tars (including an
Excalibur, two Mercedes-Benzes and a
Rolls), ranches, polo clubs and an ocean-
front villa with,-its own lagoon. He threw
eye-popping palttes and, although married
with five children, surrounded himself with
gorgeous women, on some of whom he lav-
ished their own Mercedes-Benzes.
Ills'- business career as an investment
banker and financial counselor was equally
spectacular. Promising Interest rates of 27%
to 100% a year, Mr. Rewald lured invest-
ments of about $23 million to his company,
Bishop, Baldwin, Rewald, Dillingham &
Wong. When it was discovered last July that
there was no money to pay some 400 deposi-
tors, he slashed his wrists in what he said
was an unsuccessful suicide attempt.
At that point, Bishop Baldwin looked like
a classic Ponzi scheme. Initial testimony In
U.S. district court showed that Mr. Rewald
apparently didn't Invest In any profitable
dealt; shad, used cash from new deposits to
pay'tnterest on the old ones and had spent
most of the money he took in on himself and
his company. Bishop Baldwin was declared
bankrupt-a,ruling that Mr. Rewald's law-
yers are appealing-and the Securities and
,,Exchange Commission filed ,,a civil anP-
tud action against-Mr, Rawald and.?has
r'siO M l~ioii; '
But a funny thing happened on the way
to the courthouse. CIA lawyers suddenly ap-
peared in Honolulu and persuaded U.S. Dis-
trict Judge Martin Pence to seal every
~p 01 evidence in use case Up nnuunda' c-.
t,y grounds. Relatively minor state fraud
jallbd'gtt'an astounding $10 million ball. For
n,; oo ;. 4 hire the federal government
gsemouthed and so far incon-
clusive investigation, state authorities held
im almost Incommunicado: The few close
friends who were allowed brief visit4fprith
him were forbidden to bring in written ques-
tions or take notes.
.Although the CIA later cleared a small
part of the evidence, and Judge Pence put it
on the public record, most of the evidence In
the SEC and bankruptcy actions is still
sealed. And the CIA persuaded the judge to
throw a sweeping gag order over the cases,
forbidding "all parties and their attorneys
and their agents ... from communicating to
any person ... by oral, written, or any other
means ... information relating to matters
pertaining to the Central Intelligence
DATE IF AI~KIL ky PACE
Mr. Rewald's lawyers say those orders
prevent him from asserting his defense:
that Bishop Baldwin was created by and run
as a front for the CIA. Mr. Rewald says-in
court papers and other statements made
available by persons close to him-that he
himself was a. "nearly full-time" covert
agent under conf?act to the CIA and that ev-
erything he did at Bishop Baldwin was on
CIA orders.
Tacit Concession
The CIA has denied that it controlled
Bishop Baldwin or'knew that Mr. Rewald
was diverting funds. It won't elaborate. But
a relationship was tacitly conceded by CIA
counsel Robert M. Laprade in papers he
filed with Judge Pence to obtain the secrecy
orders. Without those orders, he argued, Mr.
Reward's lawyers "will divulge In detail
Rewald's relationship to the Central Intelli-
gence Agency. It is the obligation of the' Un-
ited States to actin accordance with appro-
priate executive orders ... whenever ....
national security Information may be sub-
' ject to unauthorized disclosure."
Mr. Rewald's case appears to be the lat-
est in a series raising the issue of whether
the CIA. In fulfilling its foreign-policy mis-
sion, might be abetting crimes against U.S.
citizens, either intentionally or through neg-
ligence. Most notably, It is reminiscent of
Nugan Hand Ltd., an Australian -based bank.
ing concern run by retired CIA and Penta-
gon brass that financed financed heroin and arms
syndicates and bilked U.S. investors of mil-
lions of dollars. The Rewald case, however,
may be the first in which some of the wiped-
out investors have filed suit against the CIA
to recover their money.
Many Investors put nearly every nickel
into Bishop Baldwin, and individual ac-
counts ran as high as $1 million. Mr. Rewald
persuaded some to give him power of attor-
ney to handle all their financial affairs. His
clients included retirees, widows and disa-
bled people who now are destitute.
Some of those clients have hired noted
lawyer Melvin Belli to represent them in
their claims against the CIA. Mr. Belli says
he has also agreed to represent Mr. Rewald,
who asserts that he relied on a secret CIA
fund in the Caribbean to pay everyone off.
Mr. Rewald says the CIA ruined his business
career by abandoning him, and he is asking
the CIA for $571 million In damages and in-
demnification against the claims of his for-
mer clients.
'Pont Scheme'
Judge Pence has ruled, without elaborat-
ing, that from his reading of the secret docu-
ments, Mr. Rewald's CIA connection isn't
relevant to the bankruptcy or SEC cases. In
the SEC case, Judge Pence has already
ruled that Bishop Baldwin was a "fraud"
and a "Ponzi scheme," and that Mr. Rewald
simply pocketed the investors' money. At
the SEC's request, he enjoined Mr. Rewald
and the firm from continuing such busi-
ness.
Questioned by a reporter, Judge Pence
declared, "The whole thing is under seal be-
cause the CIA has not yet made their report
to me as to their involvement, if any, with
Rewald. I cannot and w4 not release any
.(of the flies)."
Whether the CIA sanctioned Mr.
Rewald's financial misdeeds may never be
known. But from the time he came to Ha-
waii In November 1977-with a prior theft
conviction and a personal bankruptcy in
Wisconsin, generally unknown, under his
belt-Mr. Rewald worked hard to surround
himself with top CIA and FBI officials, mili-
tary brass and politicians. At his parties, he
would point out those dignitaries to potential
investors, confide that Bishop Baldwin was
part of the CIA and stress that this meant
their money would be safe in his hands. "If
you can't trust the government, who can you
trust?" several rlipntc coy hp told thrm.
Obviously, it would be in Mr. Rewald's
interest now to exaggerate his CIA ties, and
most officials involved in the case believe he
is doing that, at least to some extent. But,
even if Mr. Rewald fails in portraying him-
self as a CIA pawn, his former clients will
probably argue that the CIA lent credibility
to his business dealings and that the agency
knew-or should have known-what was go-
ing on. Robert A. Smith, a Honolulu lawyer
working with Mr. Belli, says, "1 don't have
to prove they ordered it. All I have to prove
is that they knew about it and allowed it to
happen."
Despite the secrecy thrown around the
case, documents that could be obtained and
interviews with persons close to Mr. Rewald
and others establish at least this much:
-Canceled checks and correspondence
show that the CIA helped Mr. Rewald set up
an investment business in Honolulu in 1978
by paying some office expenses and giving
him work as a cover for operatives. In a
sworn affidavit before the Honolulu federal
court, Mr. Rewald says that the CIA first
hired him when he was a student at Milwau-
kee Institute of Technology, a two-year
school that he dropped out of in 1962. Mr.
Rewald says he was hired to spy on student
protesters, though he left school before the
protest groups he talks about were active.
(The CIA won't comment.) He says his CIA
contacts from student days gave him intro-
ductions to CIA station chiefs in Honolulu
when he moved there.
-The station chiefs were close to Mr.
Rewald. One, John (Jack) Kindschl, actu-
ally became a full-time $48,000-a-year con-
sultant at Bishop Baldwin soon after his an-
nounced retirement from the CIA in 1980.
(Mr. Kindschi, identified by police as a tar-
get in continuing federal and state grand.
jury investigations into the firm, declined to
comment.) His CIA successor, Jack Rardin,
was frequently seen by Bishop Baldwin em.
ployees and others at Bishop Baldwin's lux-
ury suite. In what appears to be a genuine
recording of a Rardin-Rewald meeting se-
cretly taped by Mr. Rewald, Mr. Rardin of-
fers CIA help in derailing an Internal Reve-
nue Service investigation of Bishop Baldwin
and asks Mr. Rewald to get more data on an
Indian arms deal that Bishop Baldwin
talked of financing. (The deal, for weapons
purportedly requested by Prime Minister In-
dira Gandhi's son, never came off.) The CIA
says it has transferred Mr. Rardin but won't
disclose his whereabouts.
-As a cover for spying, CIA operatives
in the Pacific told people they worked for
trading companies connected to Bishop
Baldwin, according to court documents and
several interviews. Mr. Rewald and his staff
fielded inquiries about the companies with
data supplied by the CIA, took mail and
phone messages for the agents and even
passed messages between agents and CIA
supervisors.
-Staff consultants, like retired Pan
American World Airways chief pilot Edwin
(Ned) Avary, received lists of questions
from the CIA-passed through Mr. Rewald-
before they left on foreign trips. While osten-
sibly looking for investments for Bishop
Baldwin, they compiled what Capt. Avary
terms "damned good reports" for the CIA,
particularly, in his case, about the probable
outcome of last year's German election. Mr.
Rewald himself did CIA-requested research
In China about trade, in Japan about transit
'designs and in Argentina about banking dur-
ing the Falklands crisis, according to court
records. Those costly trips were paid for
from the bank account containing client
funds. (Capt. Avary says he and other con-
sultants thought they were genuine business
trips at the time.)
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-When the IRS demanded Bishop Bald-
win's books for an investigation in the fall of
1982, the CIA succeeded in suspending the
probe, thus apparently prolonging the fraud.
The bankruptcy trustee, Thomas Hayes,
says the CIA merely delayed the investiga-
tion a couple of months to sanitize the files.
In any case, Bishop Baldwin was still thriv-
ing 10 months after the IRS demanded its
records; then local investigators touched off
the bankruptcy.
Brazen Clumsiness
The fact that Bishop Baldwin was able to
operate freely for three years under the eye
of CIA and other intelligence officials is puz-
zling because of the brazen clumsiness of
this fraud.
Mr. Rewald's brochures, sales pitches
and press releases told the public that his
uniquely high-interest accounts were "guar-
anteed" by the Federal Deposit Insurance
Corp. for up to $150,000 per account. The
FDIC, of course, insures only- banks-not
private investment firms-and only up to
$100,000 for each account.
Bishop Baldwin handed out two different
financial statements, apparently aimed at
differing levels of gullibility. One statement,
for example, put accounts receivable at
$187.9 million and total assets at $1.42 bil-
lion; another put accounts receivable at
$18.7 million and total assets at $142 million.
Neither statement contains a standard audi-
tor's certification letter.
No one apparently audited Bishop Bald-
win. The company pooled most client funds
in one checking account, from which it also
paid Its expenses. Bankruptcy trustee Hayes
says the checkbooks were never even bal-
anced. He told the court that Mr. Rewald's
own $1.7 million account was written onto
the books without benefit of a deposit, and
Mr. Rewald hasn't produced evidence to
show otherwise.
Mr. Rewald acknowledges that his finan- ~
cial statements were phony but says the CIA
ordered and approved them. Although at
least two CPAs worked on Bishop Baldwin's
staff, they have told authorities they han-
dled only clients' taxes, never the firm's
books. The books were kept by Jacqueline
Vos, a Farrah Fawcett lookalike and former
horse trainer.
She was supervised by office manager
Sue Wilson, who had check-signing author-
ity. Miss Wilson, a 1966 semifinalist in the
Miss Teenage America pageant, joined
Bishop Baldwin after nine years of highly
classified secretarial work at the National
Security Agency, the elA's high-technology
twin. Like Mr. Rewald, Miss Wilson consis-
tently invoked the Fifth Amendment privi-
lege against self-incrimination when she was
called to testify at bankruptcy proceed-
ings.
False Claim
Though Bishop Baldwin opened shop in
Honolulu in 1978, the firm advertised itself
as "one of the oldest and largest" in Hawaii
and said its investment savings accounts
"have enjoyed an average growth of over
20% per year for well over two decades." It ,
falsely claimed a long history of work for
Congress and the White House.
The firm claimed in brochures to have
two dozen offices ranging the world, but
most of the addresses were just mail
drops-executive "front" firms that agreed
to rent Bishop Baldwin a prestige address
with a telephone and telex.
Even the firm's name was a shallow
hoax. The Bishops, Baldwin and Dil-
linghams are old-line aristocratic families in
Hawaii. Mr. Rewald merely borrowed their
names, adding them to his own and that of
Sunlin "Sunny" Wong, a local real-estate
agent who held 50% of the stock but who dis-
,lalms knowledge of the company. Observ-
~rs have likened Mr. Rewald's phony use of
prestigious names to starting a firm in New
York City named "Rockefeller, Roosevelt,
Rewald, Vanderbilt & Mellon." Mr. Rewald
;ays the ploy was ordered by the CIA.
Most shocking of all to have escaped CIA
scrutiny-if indeed it did-was Mr. Rewald's
1976 theft conviction in a state court in Wau-
sau, Wis. He and an associate were con-
victed of persuading two high-school teach-
ers to invest in sporting-goods stores under
I false pretenses. On conviction, Mr. Rewald
was ordered to pay $2,000 restitution and
spend a year on probation. That same year,
1976, he and his sporting-goods chain filed w
voluntary bankruptcy petition in federal
court in Milwaukee; he listed personal debts
of $224,988 against assets of $1,430.
Mr. Rewald's transformation from Mid-
western bankrupt to Honolulu high roller
was astoundingly swift. He says his flashy
life was ordered up by the CIA so that he
could mingle with-and spy on-wealthy for-
eign potentates. He acquired title to his first
Honolulu home from former Cambodian
Prime Minister Lon Nol, and he spread the
word that the house was really a CIA-owned
"safe-house."
Spy Operations ,
Because of its location as a stop-off point
'for most Pacific traffic, Hawaii Is loaded
with military and spy operations. Pointing
out Soviet trawlers in port and offshore, and
U.S. electronic listening gear protruding
from government buildings,. lawyers in the
Rewald case say they believe every word ut-
tered in their offices can be picked up
equally in Washington and Moscow.
It is common for generals, admirals and
CIA officers to retire here, and many of
them acknowledge that they still take on
government assignments from time to time.
So it Is hard to be sure who is acting offic-
ially. and who privately.
The active-duty commander in chief of
the Air Force's Pacific Command, three-
star Gen. Arnold Braswell, began associat-
ing with Mr. Rewald during an Air Force-
backed operation to cure the alcoholism of a
previous commander, retired four-star Gen.
Hunter Harris. Because Gen. Harris trusted
Mr. Rewald, whom he met at polo, Gen.
Braswell put Mr. Rewald in charge of get-
ting Gen. Harris hospitalized for alcoholism,
according to Gen. Braswell and others. Mr.
Rewald used Bishop Baldwin funds to pay
$32,000 of Gen. Harris's debts, according to
court documents and interviews.
Gen. Harris also got Mr. Rewald to do-
nate to U. Col. James "Bo" Gritz's pri-
vately financed commando raid to search
Laos for U.S. prisoners of war in 1982. Mr.
Rewald used his advance knowledge of the
widely publicized raid to convince potential
investors he was with the CIA.
He hired for his staff people with a mili-
tary-intelligence background, including the
officer who gave Gen. Braswell his daily in-
telligence briefing. Gen. Braswell says he
was discussing working for Bishop Baldwin
when he retired last fall, a fact that was
widely known at Bishop Baldwin.
Mr. Rewald lied that his clients were all
multimillionaires, appearing to condescend
to accept the money of smaller depositors.
He never advertised for clients; they came
by word of mouth.
Political Asylum
Nella Van Asperen, a client whose fam-
ily apparently lost about $400,ObO in the
Bishop Baldwin bankruptcy,, says what
hooked her was her belief that Mr. Rewald
was an important CIA figure.
The attractive, blond commercial artist,
then single, first met Mr. Rewald In 1979,
when she agreed to do some design work for
a sporting-goods chain he was forming.
Then, in January 1980, she sought his help
when trying to obtain political asylum for an
Afghan who had surfaced in Hawaii after
fleeing the Soviet invasion of his homeland.
Mr. Rewald, she says, "had told me he was
with the CIA, and I thought if anybody can
help he could."
Mrs. Van Asperen remembers that Mr.
Rewald "perked up" at the news and said
the CIA wanted to see the Afghan. Following
instructions worthy of a Graham Greene spy
novel, she says, she escorted the Afghan to a
designated table at an outdoor cafe, where
she left him with Mr. Rewald-who was us-
ing the name "Anderson"-and two strange
men.
The Afghan-Abdul Shakoor Gardezy,
now a jeweler in San Diego-remembers be-
ing asked a lot of questions about chemical
weapons and Chinese arms. Then, he says,
"Mr. Anderson" gave him a business card
and told him to take it to the U.S. immigra-
tion office, where he would be given asylum.
Mr. Gardezy says the immigration office
seemed to recognize the card and gave him
a long-term visa. He says he never heard
from the "CIA" men again.
. Robert Jinks, a Bishop Baldwin lawyer
who now is a subject of the grand-jury in-
vestigations in the case, says through his
lawyer that he was with Mr. Rewald at the
Afghan's debriefing and adds that he consid-
ered himself to be working for the CIA at
the time.
"It's hard for me to believe someone
would set all this up as a charade," says
Mrs. Van Asperen, who eventually became
Mr. Rewald's close friend-he kept her nude
photo in his desk-and frequent luncheon
date. (She says he always excused himself
for what he said was his daily 3:30 p.m. CIA
briefing; she also says he wasn't present
when she posed for the photo.)
Mrs. Van Asperen invested the proceeds
from a property sale with Bishop Baldwin,
and when monthly checks from the interest
began rolling in, she says, she never again
let money "sit idle" in, bank accounts but
delivered it to Mr. Rewald. She later mar-
ried, and her husband turned his savings
over to the firm as well:
Lost Savings
Her father, a retired Chicago business-
man, invested-and lost-several hundred
thousand dollars of retirement savings with
Bishop Baldwin. Mrs. Van Asperen confirms
that her parents now are living on Social Se-
curity and had to sell their house. She her-
self has had to return to work instead of
staying home with her children as
planned.
"I'm going after the CIA," she says. "I
figure I own a tank somewhere in some
Third World country that says 'Nella' on the
side of it."
To help spread the word about the firm,
Mr. Rewald hired a staff of consultants who
were paid commissions for bringing in cli-
ents, often on top of handsome salaries. One
major bank, Hawaii National, is being sued
in federal court by three wealthy Indone-
sians who allegedly lost more than $1 mil-
lion with Mr. Rewald. They say the officer
the bank assigned them, Richard Spiker,
steered them to Bishop'Baldwin, for which
he was secretly working. Mr. Spiker later
joined Mr. Rewald's full-time staff. The
bank is contesting the suit. Mr. Spiker's law-
yer says his client is commenting only for
the grand jury.
More typical was the experience of Mary
Lou McKenna, a blonde former Playboy.
model who had retired to Hawaii because of
devastating medical problems. At poolslde
in her apartment complex, she met the
Bishop Baldwin bookkeeper, Mrs. Vos. Mrs.
Vos (who is divorced) learned that Miss Mc-
Kenna (a divorcee raising three children)
had put together a $150,000 nest egg, mostly
from insurance, to pay for living expenses
and continuing therapy after her back was
badly broken.
Knowing all this, Mrs. Vos and Mr.
Rewald persuaded Miss McKenna that her
money would be safe with him, according to
Miss McKenna and confirmed by Mrs. Vos.
Miss McKenna says Mr. Rewald assured her
"they were involved with the government,
the CIA, that's why they had so many gener-
als and FBI investing with them."
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A lawyer on Mr. Rewald's staff arranges
the sale of property Miss McKenna owned so
that this money, too, could be invested in
Bishop Baldwin. The lawyer, D. Alden
(Dan) Newland, says he can't discuss Miss
McKenna's case because of his lawyer-client
relationship with Mr. Rewald. Miss Mc-
Kenna says she thought Mr. Newland was
acting as her lawyer and trusted him as
such. She lost all. Broke and forced to give
up therapy, she appears to be in great pain.
She talks frequently of suicide.
Six-Figure Claim
MPs. Vos, now living under another name
with relatives in Mesa, Arts., acknowledges
that commissions of up to 10% were credited
to her for Miss McKenna's account and oth-
ers that she brought in. But she says she left
the commissions, and all her other savings,
In a Bishop Baldwin account that was wiped
out with everyone else's. She says she feels
"terrible" about what happened to Miss Mc-
Kenna.
Some people were so impressed by the
guaranteed high interest rates and assur-
ances of FDIC protection that they borrowed
money at lower commercial Interest rates to
invest in Bishop Baldwin. Gen. Braswell and
CIA station chief Kindschi have said they
did. Gen. Braswell has filed a six-figure claim with the bankruptcy court. Mr. Kinds-
chi, records indicate, also put in his moth-
er's money-about 1150,000-giving the fam-
ily a total Investment of about $300,000.
Mr. Rewald says those accounts and two
dozen others were just covers for funds the
CIA was hiding on behalf of foreign rulers,
but he doesn't offer any documentation for
that contention.
The beginning of the end came last July
28, when the state department of regulatory
agencies suddenly subpoenaed all of Bishop
Baldwin's books because of public queries
over the alleged FDIC insurance.
A state official tipped off a local televi-
sion reporter about the subpoena; and on
Friday, July 29, the reporter went to the
Bishop Baldwin office. With Mr. Rewald out,
she stunned Mr. Newland with questions
about the subpoena and about Mr. Rewald's
bankruptcy in Wisconsin (which the authori-
ties had also learned about).
Mr. Rewald was told of the interview
upon his return to the office. That afternoon,
a Bishop Baldwin check for $140,000 was is-
sued to Mr. Xindschi, converted Into a cash-
ier's check and sent to him. Mr. Rewald
,) 4(7` - V
says Mr. Kindschi requested the money;
Mr. Kindschi has denied this. But he cashed
the check, and now trustee Hayes has sued
Mr. Kindschi demanding the money back.
Also that Friday, Bishop Baldwin sent
$200,000 to Dana Smith, a Rewald lawyer.
That check-which would have emptied
Bishop Baldwin's account, even after a $600,-
000 deposit earlier in the week by the Indon-
esian clients-was stopped by Mr. Hayes be-
fore it could be collected. Mr. Rewald also
sent his wife and children back to Wisconsin
that day-without money, he says.
At about 4:30 p.m., Bishop Baldwin's se-
curity guards began removing files from the
firm's offices. They took two dozen carton-
loads and hid them. Meanwhile, Mr. Rewald
checked into the Waikiki Sheraton hotel and,
he has said, watched the television expose
about his company.
Blood on the Walls
The next afternoon at four, the hotel's as-
sistant manager entered Mr. Rewald's room
during routine rounds. She found lots of
blood on the walls and floor and Mr. Rewald
lying against the bathtub, his wrists and
forearms having been cut by a razor. He
spoke coherently. Police removed him to a
hospital, where doctors described the
wounds as "superficial."
Meanwhile, Hugh Frazer, a general
agent for Hartford Insurance Co.. watched
the TV expose in horror. He had put $50,000
into Bishop Baldwin on the guarantee of one
of his agents who worked part-time for Mr.
Rewald. On Monday morning, when he
called Bishop Baldwin and tried to get his
money out, he was told that Mr. Rewald,
from his hospital bed, had ordered all ac-
counts frozen for 30 days. He filed a crimi-
nal complaint with the Department of Regu-
latory Agencies and had his lawyers start
bankruptcy proceedings.
Mr. Frazer's complaint, and another that
police say Mr. Kindschi filed but that he has
denied filing, are the only two criminal
charges now pending against Mr. Rewald.
But state and federal grand juries are inves-
tigating.
After a week of stalling the Honolulu po-
lice, the Rewald security men relinquished
the files to a Rewald lawyer who brought
them to Judge Pence, who gave them to the
CIA. Mr. Rewald was remanded to prison on
the largest bail in Hawaii history.
In February, after months of trying, his
brother-in-law, Richard Loppnow, succeeded
in lowering Mr. Rewald's bail to $140,000,
and Mr. Rewald was free. He says he can't
talk about the case because it involves the
CIA. "The way the court order reads, I can't
even mention the three initials," he says. He
now is back In Hawaii awaiting trial, which
isn't expected soon.
Yet another curiosity in the case con-
cerns the prosecutor himself. The U.S. attor-
ney in Hawaii, Daniel Bent, turned the case
over to John Peyton, an attorney who joined
his staff just a few days after Mr. Rewald
slashed his wrists. From about 1976 to early
1981, Mr. Peyton had been chief of the CIA's
litigation section in Langley, Va. Before
coming to the U.S. attorney's staff in Ha-
waii, he worked on the government's narcot-
ics task force in Florida, which intelligence
community sources say has been laden with
CIA operatives. Despite that background,
Mr. Peyton characterizes his current assign-
ment in Hawaii as "pure, utter coinci-
dence."
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