CIA CHIEF CASEY TO FACE SENATE INQUIRY ON MULTIPONICS ROLE, AGENCY PROCEDURES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP91-00901R000400180003-5
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 44
• Document Creation Date: December 19, 2016
• Document Release Date: October 12, 2005
• Sequence Number: 3
• Publication Date: July 20, 1981
• Content Type: NSPR

STAT
proved For IdfeasrniZ/1 TIC ~fIA-RDP91-00901 R00040
20 July 1.901
CIA Chief Casey to Face Senate
(--)n Mul a' nits Role, Abe r. -
brewing, aides said. , , cern that this.: not be blown . out. of propor
"The thing that concerned them was that tion."
the consultative process seems to have bra- Sen. Barry Goldwater , (R, Ariz.) , the
ken down,'"?one staff,aide.said. "The com- committee's chairman, also said that Mr.
mittee. was, taken by surprise. They don't Casey should'stay in office "unless we find
Lions. Mr. Hugerresigned last week after he Casey because of his insistence on appoiiit-
was accused by past business associates of. ing Mr.. Hugel to a sensitive CIA job. Mr.
improper and possibly illegai'securities ac- Hugel, a Reagan campaign supporter, didn't
tivities in 1974: have any previous intelligence experience..
The twin scandals' have created wide- On Friday; the White House again reiter-
spread unhappiness on, Capitol Hill with Mr. ated President Reagan's support for Mr.
Casey's performance. Members of the influ- Casey. The President "is very firm" in ex-
ential Senate Intelligence Committee are pressing his confidence in him, said White
particularly upset because they weren't in- House Director of. Communications David
formed in advance that the scandals were Gergen. He added: "I think there is a con-
13.2; a WALL STRf9KT JOoaNAt. staff Reporter The committee members registered their
WASHINGTON :--,Central Intelligence unhappiness "rather clearly" in a meeting
Agency:: Director William Casey this week Friday with CIA Deputy Director Bobby In-
faces a..doubie-pronged:-inquiry from an un- man, staff members said. The meeting had
happy Senate Intelligence Committee...:. been scheduled before the scandals arose.
The The, staff, 'has been, in- Senators on the .Intelligence Committee
structed to examine in more detaii.Mr.. Cas- want. the staff to report its findings early
ey's involvement in Multiponics' Inc.;' a next week.. Committee members want to
failed: agricultural concern of.which he was. "clear the air" quickly, one congressional
a director. Last week, it was disclosed that source- saidh "I: think-if the committee: is
a federal- judge ha&ruled that Mr. Casey agreed on anything,, it's on that,'' he. added.
and other officers of the company knowingly ? -Mr. Casey might have to appear person
misled investors in ?a- securities offering cir-? ally;: to convince the committee that there
cuiar. .....F ..'r r.; won't be further embarrassing, details of his
In addition, the staff will study the CIA's business dealings, this source said. Other
security procedures to see. why they didn't wise, he added, some lawmakers could be-
uncover allegations ottimproper business ac-. gin pushing for Mr-.Casey to step aside. ,
tivity byt Max Hugel; ).the, man .Mr:: Casey .; -Even before last week's developments,
chose to be director of the CIA's spy opera- some lawmakers had been unhappy with Mr.
like that . ;' ira ii:further allegations.'.'.,
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R ICI=E n 4 AE~? r iT? r.-, .;r ~? ,
?# rvILh ~id~=~0: L? _itI':;1 JbfI.,;T.1L ~l)~,~
WIN PAGE - 20 JULY 1931
. - .. - ,.. z..
. " u --b , J4J~ at.AA VA ALJ Ut71(;'rYC16 11.i $d IU33,f 1 t, SS ~ s Her
ieI
~
.
' Other speculators were doing the same thi g at'
rITE FARMING VENTURE THAT AGAIN I -as..... the time,,1lerpel said, but Casey and his partner.
Casey in hot ~;atar were overextended and couldn't wait for inflation
CIA Director William J
.
was a loser altr.rst from the heginnina to pay off their debts.;;.
Alfred J,' Moran, the New Orleans industrialist In thel last year, federal courts ruled au iinst;.
who started it all, lost as much as a?2 inillio.n when Casey and his associates in two lawsuits by multi- i
Multiponics Inc. went bankrupt in 1971, three years- ponics investors.-ln one, the court held that Casey
after it was formed, triggering lawsuits by outside.-I .and his friends drove Multiponics deep into dent i
investors. fby. managing the . company. in a pattern .of self
Carl Mehl of Houston, head of a stevedoring interest." In the-other; the court-ruled that the
company on the Gulf Coast and reported-associat&. tdireetors`.had misled early. investors .about 'ebts
of uindervorld figures' lost More than $1 million:: and other matters
V is uncertain liow much. had been invested,by% ' . C isey denies ivrorgdoing and Republican Sen
Jut it appears that Casey was the only director. 'water told reporters that they are "rna'king a mown-
to salvege any money out of. the deal, is is, his tain out :of ~a molehole"-with their stories .,pout;
lia l:t. Casey, who ran for Congress on the Liberal Re nubli
n A lawyer lot- Cast y erie-id Bii hi said none of can line vi 1966
the partners collected even directors' fees:. but
general counsel. r ; ~` - r{ r . '>
How much is Uncertain, said 'the iNew Orleans 'ra`''tASEY. HAS FRIENDS THROUGHOU." the,
lawyer, George Kimh ell. ?t r
Washington establishment '-
. .
The betting in WaJhington is. that Casey will x In 1965-,he needed them; according to Van
survive inquiries into two court rulings that Casey Brunt the Wilmington lawyer who represe ,ted~
and other Multiponics directors misled investors:': Nicholas Ridgeiy du Pont In a 1965 lawsuit against
Jr Casey does survi ve,'one reason 'will be that he his brother, Eugene du Pant III.
is a tough fighter who Icnoivs: ho; to use powerful The two du Pants Were embroiled in a di pute
friends when he has his hack to the wall. `over oil ?'and real 'estate investments 'made with
Except for that ability, Casey might-hot have 'the nelp_of Casey. Casey was demanding $77+),000
yot.ten out with a bundle when he was accused.of for himself
unethical conduct in a 1965, civil suit in S4'ilming tr' At the untie, Van Brunt said Casey bad cut himself
tan in for a 2 pe
4 rcent share without putting Lip any of
,,,,John Van x runt, the' Wilrnt igton lawyer who j x 13 ownanone .-_ Van Brunt wanted the Cou-t of
leveled the charge in 1965; said Casey as saved 'iaacery to rule that Casey had violated legal ettuics
that, time by a raysteri.ons call from Washington. on.. and was entitled to nothing ?L s
Casey got out of the, earlier trouble with the "Casey came storming into town, raising hell.;
money and soon was 1 rding his gs nius? to a gran I . v} powerful people,' Van Brunt said. Events. ally,
chose land and crop deal these. unidentified people prevailed on Nichol is dui;
"They were high-st ikes gamblers," said William Pont to call off Van Brunt ,
4. Hemel, who recently sold out his International Y:W;hat,tipped the scales was a call from a gov
-Harvester franchise in Thibideaux, La. Fier el was c_.ernment official in \Vash1ngton - Van Brunt never
the court-appointed trustee for the bankrupt con 'sneti=r who placed t to his senior law partner, the
poratioii and the nian,who:sued Casey and the other' late Clair;J: Killoran, Van Brunt said. `Kil aria
,directors in a federal court in'New Orleans, charg pulled the string."
ping gross i iismanagenient and negligence. _Van Brunt dropped the unethical practice cccarge
Alfred Moran, heavily involved in the Gulf Coast' ;-against Casey. Casey got his $770,000 - and went on
waterfront, conr.Lived the idea and brought in Casey t4 tx come chairman of the Securities and Exchan;e
Viand B.iehl as his principal partners; , r r i.. , ;C'ommissioii, undersecretary of state, chairm in o!
Beginning in 19o8, they bought up farms in 'u',' the' Export Import Bank, Ronald Reagan's r am
liana, Mississippi, Arkansas and Florida'; 4'4,000 paign manager and director of the CIA acres fn all.'rhey.;reren't interested in farming _s>., ,,:The du Pont brothers settled the case. Later, a
"They were speculating on land values and cro s o'.1 mining engineer who had worked for the bro,hers
everything frA>p~ daFilutoas~ir~i1{ ?1dQ eI0U40D180003-5
' beans to rice to cot on," said Iieipel J ~L ' "eas he did to decent thing;" said Van ;
B
t
run
They sold debentures to outside Investors ~. $3.5.i
 STAT
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PITTSBURGH PRESS (PA)
19 July 1981
The Central Intelligence Agency, reporting or old hands at the agen-
embarrassed a few years ago by cy, resenting Mr. Hugel's lack of
disclosure of illegal, and immoral qualifications,, did a job on him. It
acts, has been embarrassed again, would be sale to bet a tattered cloak
but this time the spy.. shop wasn't at ,and rusty dagger on the latter -
fault theory
Reagan made William-Casey, one of
his campaign ;.managers; CIA boss, The Hugel fiasco raises questions.'
and. for, even:-dimmer.-.reasons Mr :..:,about Mr: Casey's--judgment.-,He
Casey named Maz+:Zugel, a,busi should-aot, of course;-have put an
nessman and minor campaign fig---.. amateur in. the agency's most sensi-
tire, head . ofathe--:
door of the CIA last,Januaryhe wit:
other way-around.-The jobs
are stir
Yyvlth`administratlon_ given Admiral
gency opposed the, ulove:'Rdnning
''requires patience and- deep know-
Iedge of people, nations and world
T'events. No matter: how brighta-per
`soil ulaybet he? cannot. instantly ac
?`; cquzre this backgrouiid: Much of the
It is `spoken' betwee . n,;people'who;,
agencymayhavecaused thesecurity:~,I'
clearance. process=toL,berless?-ibor,"k.-;;;:
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19 Jul 1931
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 STAT
NI. i Y0.3_
19 July 19..31
ve"'I'gUrl" cit Ottawa TnIhs,- to Aah
{ ~- inn ~*,.rt Allies '3cv t e
aiy 1.x :SUE H.GEL.3
,I W n* New Yot rime'
rvASHiNGTON. Jul' 13 I e aci!erit
Reagan, who leave-, for Ottu+t!i toamcr-
r w fort elks with the b!arlar:r of the sir
ut:aer major industrial dernocrkuL es, has
>e"titled a rna}or policy dispute witiiin the!
Administration by de+:.k1ins{ to ask the
allies tofol.low a colle't:r.lve, cautious :.)p-
or ch toward the Soviet Union on eco-
)7i C matters.
Weil-placed Adminkitratioai oficial
sty that his d isioan to follo,a+ this
, aurae, rather than to confront allied
hinders with a harder line on L-.s,q .t-West
trade issues, settled what rv~a=s widely
described as a major :+tnrgyie'netcweera
Secretary of State A.itaxauder M, .llai-
Jr. and Secretary of L 'fence C-rijaf:ar W.
Weinberger.
Appeal fgar caution
According to these Administration of.
ficials, Mr. Reagan will ask the allies to
study hose importing Soviet energy will
affect their vuliierabiilty and to take a
fresh look at whether trade with Moscow
has moderated Soviet behavior.
'T'hese officials say he will urge that,
while maintaining a -cooperative eco-
nomic policy toward the Soviet Union,
the allies remain alert to security prob-
lams. He will also suggest, they said,
that West Europeans take precautions
in their prospective decal to build a pipes
line and buy natural gas from the Soviet
Union but will pose no flat.objectloras.to
the deal. He reportedly coaisiders.:the
pipeline issue secondary to West Euro-
penn reliance on Soviet energy.
Some officials said that the I'c ident f
seemed to be leaning toward ra.icp.r~oval of
a sq million sale oe pip layea:s to Rus-
indicating that he was not going to olos
cia.ls said no decision had b en made.
ecor omsc question era ' rs 1 i ae i, i. a7 Si
curia Junail rnta~' y y4._ :`'e wit~i
virtually all those a Ivlr.1
Haig except William ' r. , the Di
Jeane J. Xlrlm trick .
to the United Nations.
l4Ti."Weinoerger azgutx:., IficiaL
related, that economic r-e:.x ......a*. with
Moscow should be treated :a're,ared
The Pentagon staff argued consis-
tently for a complete emlaargo on strata
gic trade. Many in, the interagency
group assumed that tbi w,-j. for b-ar-
gaining purposes only tea:;.l were waiting
to see what Mr. Weinberger would say.
National Security- Co.mcil meetings
were set for July 7 and 9, and thePanta-
gun and State Department staffs were
asked to prepare separat papers.
Mr. Case submitted a parer bac:xing
Mr~4Ve'in'oer;er`s
cared ura- &2 pe r oi~Sparpy
the economic and ener 'r sraf &' he
C.I.A. an;ror6ered a sta `I e zo elute
jliF coud r.
At the first meeting. Mr. Reagan
asked everyone to state their" general
views..There was agrees:ent that West-
ern equipment would be very important
to Moscow and that sales of critical ma-
terials should be curtail d but on little
else. They could not a : ee on whether
Moscow faced simply erergy problems
as Western nations do or an actual
crisis. They could not ag:ee on whether
it would be wise to try to close off ener-
gy-related exports and on whether Mos-
cow would react to such : >sx
The.Multiponics case broke. on the day that i
Max Hugel,, a controversial sewing machine
importer whom Casey had made his No. 2 ,
r~nau at"the CIA resi ned'amid a'scandal
Cast ':had made Hugel his chief of under-
cover, t ?ierations, despite Hugel's total lack of
qualifications. Hugel quit- after published re-
ports.that he had conspired in the mid-1970s to
inflate the value of a company he owned by
promoting phony stock sales.
THE MULTIPONICS CASE takes on mean-
ing when set in the context of Casey's other
scrapes, including the ITT case, the Vesco
affair, a -plagiarism suit, and the Advance-
ment-1-Devices sale.
The Advancement Devices case arose in
1971 when Casey first went to Washington, as.
President Richard Nixon's nominee to head
the' Securities and Exchange, Commission.
Ironically, it concerned a case in which Casey
himself appeared to violate ,SEC rules.
A civil suit filed in 1962 in Federal District
Court lit New York by Ronald H. Boggs, a
disgruntled investor, accused Casey of selling
$10,000 worth of stock in Advancement De-
vices, Inc., without registering it with the
SEC. Boggs also accused Casey, a director of
the company, of making false and misleading
statements about the firm's financial position.
Casey settled the suit out of court for $8,000.
He said he did it to avoid the cost and. trouble
-of 'fighting the case in court,
Casey ,did not mention this' incident to the
Senate committee - that confirmed' his, SEC
nomination; forcing -a second, hearing . and a
second confirmation, and he blamed the illeg-
al sale on an aide, Charles J: Thornton, whom.
the : SEG' had earlier expelled from -the sec-
urities industry for a stock manipulation.
ASKED ABOUT IT Inter, Casey passed it off
as a' 'relatively unimportant dispute."
The plagiarism dates back to a 1962 suit by
a Henry Field, a lawyer who said he'submit-
ted a manuscript on tax matters to Casey,,-a
tax expert who at the ti-me'was=editor,, of a:
series of;tax bulleti
blis
The case was settled out of `court' with
Casey paying $:5,00o, although Casey said
later that Field's claim "had no merit."
Casey, in his 1971 confirmation hearing, told
the Senate that the judge in the case had said
a guilty.! verdict was not supported by the
evidence, He also said the judge ordered the
transcript-sealed to keep it_out of public view
However, the judge in the case, J. Braxton:
Craven: Jr., denied ordering the" transcript
sealed and said he did not recall the other,
statement
Casey:-;also blamed the plagiarism onSan
aide, John Cudahy. -
The ITT and V esco cases, unlike the others,
involved Casey's conduct while SEC;
chairman.
In. 19'72; a dispute arose over whether Inter-=J
national Telephone and Telegraph had agreed
to contribute $200,000 or more to help pay
Republican- National Convention costs in ex.
change for government agreement to settle
three, big. ITT, antitrust cases.
.Rep."?Harley. Staggers-(D., W. Va.),, ch
man of the House committee probing the case,
asked to see ITT documents that the SEC staff
had subpoenaed -Casey refused, and Staggers
threatened to subpoena the SEC. Casey agreed
to reconsider. Then, according to later tes.
timony, he hurriedly had the documents---34
cartons of them-boxed up and sent to the
Justice -Department, beyond the House's sub-
poena power
CASEY LATER TOLD Congress that he sent the boxes at the-Justice Department's request,
but a former deputy attorney general, Ralph
E. Erickson, denied this in testimony before
Congress.
The.Vesco case arose during the 1974 trial of
former Att. Gen. John Mitchell and other
Nixon administration officials on charges that
they tried. to fix an SEC: case against Robert'
L.. Vasco,. the : fugitive financier. The evidence indicated that Casey: rejected
pressure to end the case, but Casey did agree -s
to meet; with ?Vesco aides during -the Repub- I
lican' Party's :national convention in Miami
Beach,. in. 1972
The SEC's complaint against Vasco was not
filed until Nov. 27,1972, after the election, and
omitted; mention'of a $250,000 Vesco donation
to President Nixon. Casey said this was done
on the advice of Stanley Sporltin, the SEC s_
chief enforcement officer...
Casey, whose boyhood" nickname was. y
clone," has a reputation as a tough but convi
vial man who made a fortune in tax law and "
through some 30 tax manuals with names such "i
as "How to Raise Money to Make Money." In'
his disclosure statement before becoming CI.A.
director, he gave his net worth at $3.3 million -
to $5.6 million
when the bureau investigated Casey before his
nomination, obtained -appnovet13fcraRbl ase 2005/11/28 : CIA-RDP91-00901 R000400180003-5 t^O1~ J
opinion. P s-,?:ir -:r! ? tz1t1A`t,l
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BESIDES THE SEC job, he was undersec-
retary of state and president of the Export-
Import Bank for Nixon and President Gerald
Ford, then practiced law. for four years before
becoming Reagan's_campaign manager..
Friends call him a "take-charge, guy," a { William J., Casey
"hard worker" with a-knack for cutting to the
core of a problem. r- ' Sins of commis-.
One man who calls Casey "a likeable guy" sion and ommis-
says he is impatient with detail and thirsty for sion, some
action. "He gets involved in dumb situations, experts believe.
like Multiponics,..without .doing his .:
homework," the man. says.
Casey himself has said that~,then various:
lawsuits against him, are: no more .than,"nui-
sance suits" of the- sort that any active
businessman or lawyer: must suffer.. in. a busy
career. a,4 ..
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f' d 1 App aTed f or Release 2005/11/28 : CIA-RDP91-00901 ROO
THE WASHINGTON POST
19 Jul v 1981
S
114ekste'r in P/Y Ch rs ce
ie Offi
8 Thishvd'o'Preside`nes MO?
To judge by his press, clippings, Ronald
Reagan stands as political master of all he
surveys.. He gets the 'best notices:-,since
chose given John F Kennedy 20 years ago.`
He ',commands the respect of Congress, in:
i,arp _ contrast to the' recent history. of frac=,`
tious :'l-legislative 'and 'executive dealings,;
And, it'' is; constantly`' asserted, unlike his '
immediate presidential predecessors. he"eniZ,
jays immense personal popularity
That last- . widely , held.: belief appears
more myth than.. reality After completing,'
oix months as president, Reagan actually
ranks lower in'public.esteem, as measured
by the leading. polls, ;than,; did Jimmy Car
'tar at the` same point ii office. try
Latest Gallup Poll-". Afidings show, both
Reagan'sapproval and disapproval ratings
less favorable than those recorded for Car-
ter after six months Q'allup says 62 percent
of people surveyed them approved the, way
Carter was doing his job as president, while
22 percent disapproved.. For Reagan, 'the
comparable figures'now are 59' percent ap
proving his performance and- 29 percent:
disapproving.
r;.
Not that those figures should be given
all that much weighty-proving a point Y.
citing the polls is a singular and self-serving
Washington- art. They have their 'uses,
though. At this presidential checkpoint;
they indicate people have stronger feelings
about Reagan than, Carter and that opinion
about' this leader: is, more polarized than
was the case with the last.
. '
't'hey bear two ' other , messages: Be wary
of White House claims of great popularity,"
and remember how swiftly these polls can
change.
0
"It was on July I I, four years ago; when
the Bert Lance affair began.
.with a seemi
ngly routine presidential letter making a
seemingly routine presidential request of a
Senate committee: Carter's budget director,
:.Thomas Bertram Lance, had encountered a
problem that, in.the president's~words, has
placed 'an undue financial burden on Mr.
Lance." The matter could, 'be i easily re-
'solved, he suggested, by modifying an ear-
lier `agreement which had provided : Lance
coul& dispose of all his stock in a' Georgia:
bank by the end, of the year:
In a matter of days that 'minor problem
had become the grist of front page stories
that dominated the Washington news for
the rest of the summer, and,, :in the end,
lowered - Carter's popularity, ` and raised
questions about his judgment. that. never.
:really ceased. By stubbornly, ' , defiantly
choosing to fight an indefensible battle and
.permitting it to drag on for weeks, ever es
calating in. intensity until it became a na-
tional cause. celebre, the, Carter-. White '
House damaged itself irreparably. Carter's
own celebrated "Bert, I'm proud of you" re-
mark, made even as his discredited aide
was leaving government, seemed to confirm
,,that his presidency placed friendship. ahead.
of public interest.
The contrast with the Reagan. adminis-
E' ation's= handling of t:he. matter of Max
;,Hugel, the CIA's. chief spymaster,, could not
You can bet Jimmy Carter does headlines with 'the first reports about
ministration's first brush with a potential problems were-'still being- sold. when the
high-level scandal, and therefore a highly White House announced he was out. Zip,
precisely the same time at which the Carter It's true the ' Huge! ''case:` differs' from
Carter and Reagan White Houses handled.'., Reagan administration dealt with it follows
their respective early problems tells more a-by now'familiar pattern.:
about the strengths and . weaknesses , of
their operations than any number of polls,.
and also offers sharper clues to the success
or failure'of the present regime:.
on.
From the beginning, this' administration
has been keenly alert to potential political
problems and. quick to act to-'e'liminate
,them. In their courting of the Congress and'
the press, their careful, attention to details
of lobbying and strategy, their tight control
over their desired political timetable, their"
maintenance of focus on their principal)
agenda, they have shown a deftness. and
competence unequaled in years. It's almost .~
.as if they studied all the mistakes of the
'Carter."White House and of Nixon's too,
and then set out to operate precisely dif-
ferently
In all', these they have performed su
~erbl .
1
But there's another side to the Hugel'
case, and it raises troubling questions that i
quite possibly will persist The, principal]
one is: how could such a clearly unfit per-
son-totally so, by the record now avail-
able-be named to .such a sensitive posi-
tion, and what does that say about the
Reagan administration's standards and va
lues in its appointment process?
When William Casey testified before the
Senate Select Committee on Intelligence
about his nomination to be Reagan's CIA
director, he spoke at length of his desire to-'
end what he called the agency's "institu- I
tional self-doubt" ant to repair its low mo
rale. He was determined to rebuild its pro-
fessionalism and restore public pride-in its
performance. The way to do that' was to'
seek out the best in America-the best
minds, the best expertise-for the agency.
"We should ask American. scholars to serve
their country by sharing their scholarship
and insights with those in the community,
who are responsible for preparing the an -
alyses used to develop foreign policy and
defense strategy," he iaid_
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 Approved
The senators were impressed. Richard G.
Lugar of Indiana, a Republican, had a
(Juestion:
"How are these persons going to be at-
tracted to the intelligence communi-
ty?... On what basis do you believe you
can attract people who are really top flight
to this most critical of professions?"
Casey replied:
"I think we have to establish a career
path and make it attractive psychological),, socially, and in every other way."
And:
"We have to get the input of people who,
have experience and have acquired knowl-
edge over a lifetime, or. a lifetime's worth' of
knowledge."
Later, in response to' ' a similar line of '
questioning from Democratic Sen. Henry'
M. Jackson of Washington, he reiterated
his determination to bring in the best: V
"You just have to work at it and reach
out and bring in all the talent and all the.
scholars and all the expertise and exp(Iri
ence you can.' -
Instead, to. the most sensitive of profes-
sional positions, one requiring the greatest
depth of knowledge and experience, Casey
appointed someone whose own words show
him to be little more than a loud-mouthed
huckster without credentials for the job.'
In what now appears to be prophetic
words, Lugar gave Casey a gentle warning
about his future performance exactly six
months ago:
"The purpose of my asking the question
is to highlight in this hearing what I see, to
be a critical problem in your effectiveness,
because f think you will have to determir)e
...What kind of style of leadership you"
personally will offer as well as what you' i
will ask of your various subordinates."
Lugar's basic points apply equally to the,
Reagan presidency: Skillful as, the White
House was in trying to separate the pres- j
ident from the CIA problems, ultimately
Ronald Reagan bears the responsibility.fot,
the kinds of people who set the tone for his
administration. Last week's evidence. re-
flects-poorly-on some of them.
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 D
oved For RelttOV/Jl,/8_r,~ [-J.P91-00901 R0004
19 July 19%31
Aso e ace Wr.,
`off profi1e1
ByJim Klurfeldl
,w,r~day ~srvice
licity about the resignatio'nvof.thee
CIA's spy chief and his own business',
etaics is not exactly what CIA direc-
tor William J. Casey had in mind.
Since taking charge of the agency
six months ago, the thrust of almost-
all his actions has. been to return to
the days of the cloak and dagger.
"The difficulties of the past decade
are behind us," Casey said, in an in-
ternal CIA newsletter this month as'
he announced that the agency's con.,
tacts with the public, the press and
the Congress would be sharply cur-
tailed. "The time has cone for CIA to
return to its more traditional low
public profile,"
Yet last week, following publica-
tion of accusations by two stockbrok-
ers that he had used insider informa-
tion to boost the value of stock in a
company that he had headed, Max.
Hugel, Casey's handpicked deputy
director of operations - the man in
charge of America's spies - re-
signed.
Simultaneously came reports that a
federal judge in New York had ruled
that Casey knowingly misled stock-
holders about a New Orleans compa-
ny of which he was secretary and a-J
member of the board. Two days later,.
it was revealed that an appellate -
judge in New Orleans had harshly
criticized his management of that
company.
President Reagan expressed sup-
port for Casey after the New York
court ruling became public Tuesday,
but a White House spokesman said 1
Thursday that the President had not
been aware of Casey's legal and busi-
ness problems before appointing
him. The Senate Intelligence Com-.
mittee began a. preliminary inquiry
into Casey's affairs.
Second embarrassment
Thus the Reagan: administration
finds itself with a second embarrass-
ment even as it-was congratulating
had successfully portrayed Hugel as
Casey's mistake, an appointment that
surprised Reagan's inner circle at
the White House but was not over-
In fact, Hugel's' appointment was
highly controversial and was severe-
ly criticized by many in the intelli-
gence community. He had no intelli-
gence background and was' being
placed in what is regarded as- the
most sensitive of intelligence posi-
tions. And crow it has been revealed
that his background was not thor-
oughly or adequately checked..
Before the latest revelations came
along acx derail his objective of a
lower profile for the agency. Casey
had. scuttled the agency press office,
cut back.on the congressional liaison
staff,.asked that the agency be re-
moved. entirely from the provisions
of the' Freedom of Information Act,
and was in the process of. rewriting
an. executive order for President
Reagan that would. remove some of
the restrictions. placed on the agency
In the- aftermath of the mid-1970s
intelligence scandals.
At the same time Casey, 68,.a for-
mer OSS officer during World War II,
has made it clear he believes that the
operations side of the agency must be
revitalized. Government officials
familiar with foreign policy and in-
telligence matters say the agency is
The Central Intelligence
Agency may have a
career for you
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