SECRET RULING SAID TO AID DEFENDANT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00494R001100700122-4
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 3
• Document Creation Date: December 22, 2016
• Document Release Date: July 26, 2010
• Sequence Number: 122
• Publication Date: July 27, 1984
• Content Type: OPEN SOURCE

Sanitized Copy Approved for Release 2010/07/26: CIA-RDP90-00494RO01100700122-4
STAT
Sanitized Copy Approved for Release 2010/07/26: CIA-RDP90-00494RO01100700122-4
 Sanitized Copy Approved for Release 2010/07/26: CIA-RDP90-00494R001100700122-4
UNITED PRESS INTERNATIONAL
27 July 1984
SECRET RULING SAID TO AID DEFENDANT
BY DAN CARMICHAEL
ALEXANDRIA, VA.
A secret ruling by a federal judge will help a former Army
counter-intelligence. specialist accused of selling out to the Soviets to prove
he was working for the CIA, his lawyer said Friday..
Richard Craig Smith, 40, is charged with selling defense secrets - the
ider(tities of six U.S. double-agents -- to the KGB for $11,000. But he says he
was working for the CIA and made the deal in Tokyo at the agency's request.
He could be sentenced to life in prison if convicted.
Smith's lawyer, A. Brent Carruth, praised a secret pre-trial ruling issued
late Thursday by U.S. District Judge Richard L. Williams.
The ruling remained secret because it deals with national defense issues. A
censored version is expected to be made public next wi?ek.
Carruth, contacted in Los Angeles, said he is prohibited from discussing the
contents of the ruling but remarked, " We're in great shape. "
" It's my opinion that the judge did what was right and fair and he's going
to allow Smith to defend himself on the basis of Smith's knowledge that he was
working for the Central Intelligence Agency, " Carruth said.
Carruth said the government has 10 days to decide whether to begin Smith's
long-delayed trial or appeal the ruling to the 4th U.S. Circuit Court of Appeals
in Richmond.
"Everyone, including the judge, presumes the government will appeal,"
Carruth said.
The judge has not yet ruled on other pre-trial issues raised at a public
hearing, including a defense contention the government has engaged in "subtle
witness tampering' in an attempt to prevent testimony by CIA employees and
others who could help Smith.
Smith says he was working for two CIA contacts who gave him a telephone
number in Honolulu to call upon returning to the United States. The phone number
was assigned to a now-defunct Honolulu investment firm reputed to have extensive
CIA contacts.
The firm was named Bishop, Baldwin, Rewarld, Dillingham and Wong.
The trial has been delayed because the defense and prosecution have been
unable to agree on what classified information, if any, may be used as evidence.
Under the federal Classified Information Procedures Act, secret court
hearings and classified rulings are allowed in cases involving national security
issues.
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 Sanitized Copy Approved for Release 2010/07/26: CIA-RDP90-00494RO01100700122-4
SPOTLIGHT WEEKLY
9 July 1984
CIA. Linked to Money Sca
EXCLUSIVE TO THE SPOTLIGHT
By Tom Valentine
The plot is plenty thick, and battle
lines are drawn along three fronts in
the mysterious Hawaii investment
scandal that promises to hang more
dirty linen from the CIA out for
public exposure.
State and federal prosecutors in
Hawaii charge Ronald R. Rewald with
"theft by deception," in a $22-million
"Ponzi scheme" that took advantage of
investors (SPOTLIGHT, May 28).
Rewald rejoins by charging that his
entire corporate operation, Bishop,
Baldwin, Rewald, Dillingham and
Wong, was part of an elaborate CIA
covert operation program and he is in-
nocent. The CIA owes the investors their
money, Rewald contends.
Backed by a coterie of loyal investors,
Rewald is aiding a lawsuit seeking to
force the CIA to return monies to in-
vestors. The investors allege that once
the Internal Revenue Service began in-
vestigating Rewald's firm, the CIA
panicked and pulled the plug on the
operation, washing the invested funds
down several mysterious drains.
The CIA denies all, claiming only to
have used Rewald's offices for telephone
services and other "slight involvement."
Prosecutors and bankruptcy trustees
have accepted the CIA version, and
recently announced that Rewald's part-
ner, Sunlin "Sunny" Wong, has con-
fessed to the "Ponzi scheme."
ACE ASSASSINS
incensed, and determined not to lose
their money, the investors have hired
Melvin Belli of San Francisco to repre-
sent them, and have come up with two
aces of trump in this pitched battle to
prove CIA involvement. The investors
have uncovered two "hit men" who
allege they were hired by the CIA to kill
Rewald when the latter was in prison in
1983.
Then, to make matters more exciting,
a federal judge in Alexandria, Virginia
has ordered the CIA to produce its
Rewald records.
Richard Craig Smith, charged with es-
pionage and providing defense secrets to
the Soviets, has counterclaimed that he,
like Rewald, was employed to do so by
the CIA. He has attempted to merge his
defense with Rewald's and with the
Rewald investors.
The CIA is sticking to its guns, saying
it has no knowledge of Smith and his
alleged CIA contacts, just as it denies in-
volvement with Rewald.
Meanwhile, the CIA continues to keep
a surprisingly docile media away from
the scandalous story. The lid may not be
able to stay on the media much longer,
however.
"If the CIA were not involved up to
its ears," one of the investors asked The
SPOTLIGHT last week, "would they
have hired two contract hit men to kill
. Rewald while he languished in jail last
year?"
The investors who spoke exclusively
to The SPOTLIGHT asked that their
names not be used at this time. They
were in Belli's office awaiting a deposi-
tion from one of the alleged CIA hit
men.
Rewald, also in San Francisco, told
The SPOTLIGHT, "I'm not trying to
undermine the CIA; these are my
friends. I simply want justice done,
especially for the investors."
Rewald may not be seeking a bitter
confrontation with his former associates
and bosses, but the evidence indicates
that the -CIA intends to stonewall this
case to the death-probably Rewald's!
The can of worms that's been opened
by the Rewald fiasco reaches too deeply
into CIA secrecy to allow for any admis-
sion of complicity.
Several well-known writers, including
Seymour Hirsch, David Taylor of BBC,
and Bill Wood, have been lurking
around the Belli offices for the past two
weeks filling note pads with sensation
after sensation.
Meanwhile, Assistant U.S. Attorney
John F. Peyton Jr. is prosecuting the
fraud case as though the CIA didn't ex-
ist.
But according to the investor camp,
Peyton himself is a former CIA oper-
ative.
The bankruptcy controller has listed
Rewald's personal spending of investor
money at $4,699,289.57 and the "net bal-
ance due investors" at $10,347,730.96.
The trustee reports that Rewald's firm
returned $10 to investors.
As for the CIA-mum's still the
word. - ?
Sanitized Copy Approved for Release 2010/07/26: CIA-RDP90-00494RO01100700122-4