RONALD REWALD AND THE CIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00965R000504680016-5
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 3
• Document Creation Date: December 22, 2016
• Document Release Date: February 27, 2012
• Sequence Number: 16
• Publication Date: July 28, 1985
• Content Type: OPEN SOURCE

Declassified and Approved For Release 2012/02/28: CIA-RDP90-00965R000504680016-5
MILWAUKEE JOURNAL (WI)
PACE` 28 July 1985
Rewald and the
Ronald -_
Coming trial may shed light o~ shadowy ties
A
h
t
letic Inc., an old-une supplier of son, the former Wisconsin governor
By JACK NORMAN teams. Nelson said he didn't know about
H
h
e
of The Joumai staff
ad the idea of franchising his the fund, and first learned about it,
sto The criminal trial of Milwaukee-born Ronald there
c nceptdof the state, lon before sporting- cal froRewald's m Bald in ini 983 in a phone
Rewald Is scheduled to open in Honolulu Federal goods stores took hold in shopping "Mr. Baldwin is the first one that
Court on Aug. 5, two years to the week after he malls. Unfortunately, he sold a fran- notified me, saying that my name
was found In a Hawaiian hotel room, wrists chise to two men in Wausau, Wis., had been used," recalled Nelson, who
slashed. without registering It with the state, now heads the Wilderness Society in
The night before, he had watched a Honolulu and pled guilty in 1976 to a misde- Washington, D.C. "Baldwin called
TV station expose some of the seamier side of his meanor. His company failed, and-the me saying that Pasrich was con-
lucrative consulting firm and his millionaire life next year, after both business and cerned that I might be embarrassed."
style. He feared his secret work for the US Central personal bankruptcies, he left Mil- Baldwin has denied Rewald's
Intelligence Agency would be exposed. waukee for Honolulu. claim tha the fund was a Rewald Is one of the most extravagant alleged Within a year he had established expo ngt scheme. as well as Re-
swindlers ever to come out of Milwaukee. an investment consultin cot
He certainly was one of the city's Most unusual Five g ~Y weld's claim that Bodwin, a Rewald
.' Years later, he had built the and Pasrich were negotiating a secret
homeIn-thegrown trial, secret the agentsgovernment is expected to Bishop, Baldwin, Rewald, Dillingham sale of military equipment to some
argue, in a presentation one prosecutor said would months operation. But seve all state under discussi nn wsaid the aircraft
ere for oil-field
take two to four months, that Rewald defrauded and federal agencies were investigat- projects.
nearly 400 Investors of about $22 million and ing him, and when this was reported The Indian arms deal was dis-
spent millions of that on his lavish polo-club life- on Honolulu TV, Rewald attempted cussed in a 1982 conversation be-
style. suicide. twe
and J, then
The defense is expected to argue that he operat- Among the business deals with CIA Honolulu station k ef.dRewald
ed under orders from, and with the knowledge Wisconsin connections that he was taped the conversation having begun
and consent of, the CIA. working on at "the time of his crash to worry
What's at stake in his trial on 98 counts of were an attempt to open a version of Servicnvestigatiionnt,a dnit h posai-
fraud, d, perjury and other charges Is more than one Milwaukeean David Baldwin's Safe bility that the CIA would abandon
man's criminal guilt or innocence. At Issue also is House bar in Honolulu; a $29 million him.
how much the public will be allowed to learn real-estate development project with Other international dealings were
about the involvement of the CIA in International Milwaukee's Northwestern Mutual under CIA direction,
finance.
Life .; a Rewald claims.
There is no doubt that Rewald was Involved rangementanwith oMilwa kee'sn g ar- the for
himofrom his offl eea and home before
with the CIA, and that the CIA was involved in Co., which makes oil-production government agents swept through to
some of his international dealings. equipment; and a plan to open a remove CIA-connected items are lists
The agency has confirmed, for example, that it Hawaiian version of Tommy Bart- of questions about the economic and
had him sign one or more of Its pledges to secrecy. lett's water show.
It acknowledged asking him in 1978 to set up two Rose Co. owner R.J. Rothen political Thailand, lists he claims to
dumrt m opera irat on the Far it as covers for learned that something was going have been given by the agency.
The CIA has said tht the checks to Rewald wrong when he got a phone call Rewald traveled to Argentina
made out by CHonolulu station k chief John shortly after the suicide attempt. The while that country was at war with
m
Kindsc, ade o another CIA I Wisconsin native, were to call was from Singh Pasrich, Re- Britain, pretending to be interested in
tphone bills for the dummy companies, and that wald s Indian associate. buying a bank. All the while, he says,
the h undisclosed hone bills ufCIA agents ies and Remembers Rothen: "I got a call he was obtaining information on the
of nc. agents o operated out
It at from Pasrich in New Delhi saying, effect of the crisis on the Argentine wide
offi joined aid's w numbeumber number CIA
rldm as his op aide. 'Don't worry about what's happening banking system.
For two in Hawaii, we still have a deal.'" As The Journal earlier reported, a
years, the agency has successfully Rothen, who had been negotiating Rewald associate, Robert Jinks, told
fought in the courts to keep Rewald's CIA claims for Rewald's firm to represent his in the Securities and Exchange Com-
out of public testimony and to keep any of the India, Indonesia and other places mission that while in Argentina,
hundreds of CIA documents he has asked for out with oil-field development potential, Rewaid used CIA intelligence to en-
of open court. His trial may be the last opportuni- took his business elsewhere.
t for in uiblicnditc disclosure
dealings agency's involve- Some of Rewald's other business ng eproperties being c dumped y
Ron-
ald it appears, deals are murkier. wealthy Argentines
was a The V. d f i Y gentines who feared a
n
di
man operating on the boundaries: the
boundary between legitimate busi-
ness activity and criminal fraud,
between private business dealing and
secret intelligence work. He and the
CIA were useful to each other.
Rewald had always been an ambi-
tious businessman. In Milwaukee, he
had risen from a sporting-goods
salesman to the owner of College
o n
a, for example, British invasion.
supposedly a stock fund investing in At the time of his collapse, Rewald
Indian companies, was described by was preparing to hire onto his staff
Rewald as designed to allow wealthy one John Sager, whose resume de-
Indians to smuggle money out of the scribes him as a CIA specialist on
country. Soviet and Middle East affairs, in-
On the fund's board of directors cluding a tour as "senior CIA repre-
were Rewald, Baldwin, Pasrich, Pas- sentative In Moscow."
rich's daughter, then a Marquette
University student, and Gaylord Nel-
Declassified and Approved For Release 2012/02/28: CIA-RDP90-00965R000504680016-5
between the 2
 Declassified and Approved For Release 2012/02/28: CIA-RDP90-00965R000504680016-5 -
The CIA has said that it learned
early in 1983 that some of its agents
who were working with Rewald
were in a conflict of interest, mixing
personal investments with agency
business. The agency investigated
only after Rewald brought his IRS
problems to the CIA's attention with
repeated pleas for them to call off the
IRS to avoid blowing his cover.
One CIA agent working for Re-
wald since 1979, going by the name
Richard P. Cavannaugh, wrote Re-
wald in June 1983, after receiving
orders from CIA headquarters to
clean up his Bishop, Baldwin activi-
ties. "Thanks for getting everything
closed out for me," Cavannaugh
wrote. "Unfortunate, from my view,
but it at least clears the air with my
home office who are now seemingly
satisfied that there is no 'apparent'
conflict of interest. '
"They were not arguing that there
was any 'real' conflict of interest, but
[agents] must be Simon pure," he
wrote. "I also assume your 'tax prob-
lem' has also been taken care of,"
Cavannaugh added.
In its 1985 report, the US House of
Representatives select committee on
intelligence wrote: "The committee
as a practice does not publicly com-
ment on cases currently being tried,
but the Rewald case In Hawaii re-
quires some mention.
"The committee can find no evi-
dence that the CIA instructed Mr.
Rewald to engage in the financial
activity that has brought him before
the bar of justice. The committee is
concerned, however, that one or
more CIA employes may have acted
in an unprofessional way, endanger-
ing their own and others' cover, in
their eagerness to make what they
thought would be enormous profits
by investing money with Mr. Re-
wald."
Was the CIA guilty only of allow-
ing some of its employes to become
too greedy? Or was the agency itself
too greedy in the use it made of
Rewald?
The real fight at the upcoming
trial will be between the govern-
ment's attempt to restrict testimony
and evidence to non-agency matters,
and the defense's desire to bring out
as much as it can about the connec-
tion between Ronald Rewald and the
CIA.
1i 4 ! Rewald?
hft0118t
a 42 yearao4 tnarf1ed, fives iitdren. lives In
^ .8otri. and ra rda on MiIwaubiae'6 South,
Sidi gfaduate of Sour [ vfa[9lf High shod
(now Milwaukee Area TectmimfConegp)
IW Mowed from Milwaukee area to Honolulu in
' ttil' business an* persaiwe Deck
f~ '. Anyy Qelas in ,1984 after 19$3 business
atte
p6 __
m
1 ?. SpoctlFrp goods salesman, Milwaukee,
? President. College. Athletic .Inc. sporting
goods,14tflw-au1ee. 1972-75; tkjn ,Ilrent bank-
rupt W0975.
? Chairman of the Ward; Bishop, Baldwin.
Rewaki? Dringham & Wop? Ndnokdu-based
consuttfng:11m .197$.19$$ }irm placed in invol.
unto t b i#r Iptcy in 198
L"ah
?, Pled guilty in Wausau, Wis., to misde-
meanor for selling franchise in sporting goods
store .without registration, 1976; paid $2;8d0
r tuiipn.
Charged with twd-dbuflo theft; HonoiuJu,
1983.
0 Sued CIA for $671 n1iitop.-fpr ggagdly
rulnlngt his company and reputation. 19$4, - ,
S Chatged with 100 federal counts to' con-
nection with alleged $22 million fraud, 1984 (2
countsrater dropped on techrdcaI ),.
f charges
n 'trial on 9@ urges Is scheduled for
'. c#edileal court. Honolulu.
4or4 will ar he charmed $22 mil-
OK-4W . tors, includIhn familu
meat-fifty making but lucrative short-term
ftiat Investments.
promlrltsd return of 26% per year,
r=ued up to $150,000 by a fed-
Iarq~~cluda;
? Securities fraud (38 counts) :
? Mall fraud (37 counts) ;
^ Perjury (4 counts) ;
^ Income tax evasion (4 counts) ;
? Interstate transport of stolen funds (3
counts) ;
^ False statements to federal agencies (4
counts) ;
^ Misrepresentation concerning Federal
Deposit Insurance Corp. insurance (6 counts) ;
^ Improper behavior as investment adviser
(2 counts).
Indictment says only $623,000 of $22 million
went into business deals. Remainder allegedly
went:
? To maintain Rewald's "exceptionally lav-
ish lifestyle:-
8 To "maintain a false facade of legitimate
investment activity:"
^ To pay back investors who asked for
money, creating the illusion that investments
had been made which produced earnings."
Indictment says Rewald spent $5.58 million
of investors' money on women, polo, horses,
houses, ranches, cars, and other personal ex-
penses.
Also says he lied in sworn statements when
claiming firm, created and operated under in-
structions from CIA. _
Declassified and Approved For Release 2012/02/28: CIA-RDP90-00965R000504680016-5
 Declassified and Approved For Release 2012/02/28: CIA-RDP90-00965R000504680016-5
Rewald's defense
"I am, and for the past five years have been,
a covert agent for the Central Intelligence
Agency"
This Rewald claim, in sworn 1983 affidavit for
US Bankruptcy Court, is basis for his defense.
CIA confirms using firm and some subsidi-
aries as cover for secret agents; confirms Re-
wald signed employe secrecy pledge; denies
responsibility for firm's activities.
Rewatd says CIA suggested setting up Bish-
op, Baldwin in 1978; suggested using names of
old-line Hawaiian famUles in company name;
suggested false story about its history and size.
Rewald says CIA in 1980 "began using the
Bishop, Baldwin investment account as a vehi-
cle in which to place funds ... to be used in
foreign operations overseas ... to shelter mon-
ies of highly placed foreign diplomats and busi-
nessmen."
By 1983, Rewald says, CIA work included
economic intelligence in Chile, Argentina; arms
deals in India, Taiwan: prisoner-of-war search in
Cambodia; illegal currency transfers in Greece.
CIA funded polo-club lifestyle, Rewald said,
to help cultivate relationships with Asian, Arab
billionaires; also provided forged Marquette di-
plomas to give him academic respectability
(see accompanying story). To help run intelli-
gence activities, he says, Honolulu CIA chief
Wisconsin native John Kindschi - 'left' agency
to join firm.
Access to international investments now
blocked, he says, by danger to influential peo-
ple from exposure of ies.
CIA affiliation beg id-1960s, he. says,
when he was hired to spy on protest activities
at University of Wisconsin - Madison.
Can Reward prove charges? Government has
tried to keep CIA documents from him. Prose-
cutors tried to drop perjury charges - relating
to CIA claims in affidavit - to avoid introduc.
tion of CIA material as evidence.
Unknown how much CIA information will be
allowed at trial.
Declassified and Approved For Release 2012/02/28: CIA-RDP90-00965R000504680016-5