WHITE HOUSE STATES FAITH IN CIA'S CASEY; RECENT RULING NOT RELEVANT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00552R000202230116-6
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 22, 2016
• Document Release Date: July 6, 2010
• Sequence Number: 116
• Publication Date: July 16, 1981
• Content Type: OPEN SOURCE

ART IC Sanitized Copy Approved for Release 2010/07/06: CIA-RDP90-00552R000202230116-6
FA CJ F\- k `-1 THE BALTIMORE SUN
16 July 1981
11-111,19
t
Washington (AP)-President Reagan
has full confidence in William J. Casey
and wants him to stay on as director of the
Central Intelligence Agency, despite a rul-
ing he knowingly misled investors in.'a,
1960s business deal, White House officials
said yesterday.
-The federal judge's ruling May 19
against hir. Casey surfaced Tuesday with-
in hours -of Max Hugel's resignation as
chief of clandestine operations..
Mr Hugel, a Casey confidante; denied
allegations published in the Washington
Post that be.improperly slipped inside in
formation on a. firm he once beaded to two
ping aside to avoid having the allegations I New York Iawyer, Milton Gold, said yes-
harm the administration and his col- terday, "We have very substantial de-
leagues atthe CIA. feases to this action. 'dr. Casey says he re-
While Mr. Reagan was publicly back. lied on the advice of a reputable invest-
ing Mr. Casey, CBS reported that Senator
Barry Goldwater (R, Ariz.) was telling his
colleagues on the Senate Intelligence
Committee that Mr. Casey should be re-
placed. Mr_ Goldwater is chairman of the
committee.
Mr. Goldwater, *who was not directly
quoted, has been unhappy with the way
i1r. Casey has been running the agency
and was particularly perturbed by the ap-
pointment of Mr. Hugel, CBS reported.
But Cable News Network said Mr.
Goldwater called the CBS story "a.mali-
cious lie." CNN quoted Katherine Gram-
mer, an aide to Mr. Goldwater, as saying
.that 'Mr. Goldwater had spoken to hlr.
Casey. yesterday and told Mr. Casey the
Senate panel would look into the charges.
Ms. Grammer also told CNN that the sen-
ator told Mr.. Casey, "I think everything's
going to be all right." . .
- The court'ruling against Mr.: Casey
came in connection with an unrelated
business deal in which a group of unhappy
stockholders, charged in a civil suit that'
Mr. Casey and other directors of a now-de-
funct firm misled them in attempts to so-y
licit investors.
U.S. District Judge Charles E. Stewart,
Jr., in New York said Mr. Casey and the
other directors allowed distribution -of a
circular they knew contained false or mis
STAT
stated information and which also omitted I At the White House, the deputy press [
important information. secretary, Larry Speakes, said the presi-
Mr. Reagan, stopped byreporters as he dent did not. learn of the district court rul-
went into a reception for labor leaders, fng in New York May 19 until he saw news
said, "There is no controversy [over accounts of it Tuesday.
Casey]. I have complete trust in him." Mr. Speakes said he did not know
Vice President George Bush, attending whether the CIA chief informed anyone in-:'
the same reception, .. was, asked if ?Ir. the White House of the May 19 finding.
Casey should resign. "Oh, no!," he replied. However, he said MTir. Casey had revealed
Edwin Meese III, the president's the existence of the"pending suit and dis
counselor, played down the importance of cussed it with Fred-,.Fielding, now the
the
the ruling, calling it a 10-year-old case 'White House counsel, before his 'n'.
not going to go anywhere as far as ` tins was submitted
we're concerned. I don't. think it's relevant "The pending.litigation'was definitely
to his position in the administration." discussed," Mr. Speakes said; "He [Field-
meat firm, Glore, Forgan, and a reputable
accounting firm, Haskins & Sails. He
denies any misconduct
Mr. Gold said he had moved to have
Judge Stewart reconsider his finding, and
in any case, trial of.the case has not begun
ingl decided that there was no problem".
Mr. Speakes said the president was
briefed on Mr. Casey's file before submit-
ting the nomination The spokesman said,
however, he did not know specifically
whether the pending suit was discussed.
"The president retains full confidence
in the director of the CIA," Mr. Speakes
said. "The matter is still subject to further
appeal in the courtsystem:'
and "we haven't had our da in court ? et " ' i!dr. Reagan does not want Mr. Casey tol
y y ! step aside during a possible appeal, said Mr. Gold said Mr. Casey himself lost Mr. Speakes, adding that t w
as "not an up
$150,000 on the firm. "This is exactly the or down decision." o
kind of case that arises often when inves- [ ?
tors lose their money and sue the direr- o The president immediately decided to
tors. They lost their money and he did r taro Mr. Casey, said Mr. Speakes.
too," Mr. Gold said. "There isn't a vestige I Mr. Speakes, pressed by reporters on'
.of personal dishonesty or lack of elemen- : how Iona Mr. Reagan 'would back Mr.
tal good faith on the part of ['sir.] Casey." Casey, said,-"Well, we'll just wait and see I
In a related matter, a federal appeals what happens." , , .
court in New Orleans has ruled that Mr.
Casey and other directors; through their
'management, put the firm Multiponics,
Inc., "deep and deeper into debt" through
a "pattern of self-interest."
Based on that conclusion, the 5th U.S.
Circuit Court of Appeals upheld last July a
ruling which put Mr. Casey and the other
directors last in line for a share of the
firm's final assets, when they were divid-
ed two weeks ago among the firm's other
creditors.
Mr. Casey and the other directors got`
none of the $10 million, despite their
claims of outstanding personal loans to-1
the company..
Sanitized Copy Approved for Release 2010/07/06: CIA-RDP90-00552R000202230116-6