Scandals Haunting Bush Prior to the 1992 election.
As 1991 dawned President George H. W. Bush's attention was centered on two matters – the Gulf War he wanted to wage in Iraq and his bid for reelection in 1992. On January 17, 1991, Bush ordered approximately 400 bombing raids on the Baghdad Airport, its oil refineries and other Iraqi military targets. American families watched CNN as Peter Arnot, on a live feed from Baghdad, pointed out the massive fireworks of lethal bombs dropping around him. Just 10 days later, on February 27, 1991, Bush declared victory in liberating Kuwait from Saddam Hussein’s invasion. The war was over and Bush was triumphant!
The President pulled out, because he had decided to leave Hussein in power and avoid the anticipated house-to-house, man-to-man battles that would bathe Baghdad in blood and raise the American body count. Blood and body counts were not good advertisements for a President seeking a second term in office. Bush’s Defense Secretary Dick Cheney heralded his President's leadership announcing that Operation Desert Storm went “very well”. Bush’s public approval ratings soared to 90%. The sitting President had reason to feel bullet proof in the upcoming election. No one could beat a successful war president.
Yet an uneasy feeling was growing even among the most rabid supporters of the President. One slogan of the Bush's fans was “Don’t worry. Be Happy". A mounting undercurrent of dissatisfaction among the electorate centered around the perception that the Bush administration was unjust and corrupt. The under current of anger reverberated with the questions, “Would Bush's administration ever prosecute the bad guys and bring them to justice?" and "Was Attorney General Richard Thornburgh capable of and willing to enforce the law and uphold the Constitution?"
One slanderous story occupied the final years of Ronald Reagan's presidency and continued unabated into the Bush presidency. The same subject matter, the same drugs, the same unholy exchange of hostages for arms -the secret government of Iran Contra. At the center of the secret government was former CIA director, former vice president, now the 41st president of the United States, George H. W. Bush. The immense scandal enveloping Bush is best summarized by the Executive Summary of the Final Report of the Independent Counsel for Iran/Contra Matters:
“In October and November 1986, two secret U.S. Government operations were publicly exposed, potentially implicating Reagan Administration officials in illegal activities. These operations were the provision of assistance to the military activities of the Nicaraguan contra rebels during an October 1984 to October 1986 prohibition on such aid, and the sale of U.S. arms to Iran in contravention of stated U.S. policy and in possible violation of arms export controls. In late November 1986, Reagan Administration officials announced that some of the proceeds from the sale of U.S. arms to Iran had been diverted to the contras.”
People knew that Bush, the Vice President under Reagan, was rumored to be deeply involved in the scandal. Yet Bush repeatedly insisted that he was “out of the loop.” Many Americans simply did not believe the vice-president's defense realizing that it would be almost impossible to "be out of the loop" when he had been head of the agency whose job it is to keep America's secrets.
But try as Vice President Bush might, some secrets would not remain hidden. On October 5, 1986, headlines around the world featured a story about one Eugene Hasenfus who had parachuted out of his C-123k cargo aircraft while flying over Nicaragua. A ground-to-air missile fired by the Sandinistas had struck the plane and its cargo of 10,000 pounds of small arms, ammunition, hand grenades and jungle boots. The contents of the Hasenfas plane had been intended for the Contras, another segment of the secret government. The man who claimed to "be out of the loop" was immediately alerted by phone calls from Felix Rodriguez (aka Max Gomez) and Eugene Hasenfas, who notified Bush's aide Sam Watson.
On October 7, 1986, Representative Henry B. Gonzalez (D-Texas) called for a congressional investigation of the Hasenfus crash and the crash of a Southern Air Transport plane to see if they were working for the CIA to overthrow the Sandinista government in Nicaragua. Gonzalez's call for an immediate investigation ignited a war between the Congressman seeking the truth for his constituents and the keeper of the secrets, Vice President Bush.
Two days later, Hasenfus gave a media interview and told the press that Rodriquez/Gomez, was the head of an international supply system for the Contras. Then, on October 11, 1986 the Washington Post tied Rodriquez to Bush, reporting:
Gomez has said that he met with Bush twice and has been operating in Nicaragua with the Vice President's knowledge and approval, the sources said...
Asked about these matters, a spokesman for Bush, Marlin Fitzwater, said: "Neither the Vice President nor anyone on his staff is directing or coordinating an operation in Central America. '' ...
The San Francisco Examiner, which earlier this week linked [Bush adviser Donald] Gregg to Gomez, reported that Gomez maintains daily contact with Bush's office....
Members of Congress said yesterday they wanted to investigate the administration's conduct further. And ... several said that their focus had shifted from the CIA to the White House....
The Sunday crash will be among events covered by a [Senate] Foreign Relations Committee probe into allegations that the Contras may have been involved in drug running and abuse of U.S. aid funds, [Senator Richard G.] Lugar said....
The Customs Service said yesterday it is investigating whether the downed plane may have carried guns out of Miami, which would violate federal restrictions on arms exports and other laws, including the Neutrality Act, which bars U.S. citizens from working to overthrow governments not at war with the United States.... Hasenfus told reporters in Nicaragua the plane had flown out of Miami.
After Hasenfus' revelations, Bush knew his career as Vice President and his aspirations for the Presidency were both on the line. Speaking in Charleston, South Carolina, he described Rodriguez/Gomez as a “patriot” and said, “To say I'm running the operation ... it's absolutely untrue". Bush said of Rodriguez, "I know what he was doing in El Salvador, and I strongly support it, as does the president of El Salvador, Mr. Napoleon Duarte, and as does the chief of the armed forces in El Salvador, (sic Nicaragua) because this man, an expert in counterinsurgency, was down there helping them put down a communist led revolution."
On October 12, 1986, Hasenfus, signed an affidavit stating in part:
"About Max Gomez [Felix Rodriguez], Hasenfus says that he was the head Cuban coordinator for The Company and that he works for the CIA and that he is a very close friend of the Vice President of the United States, George Bush.... Max Gomez, after receiving his orders, was the one who had to ... [say] where the air drops would be taking place. About Ramon Medina [alias for escaped airplane bomber Luis Posada Carriles], Hasenfus says that he was also a CIA agent and that he did the "small work" because Max Gomez was the "senior man". He says that Ramon took care of the rent of the houses, the maids, the food, transportation and drivers, and also, coordination of the fuel for the aircraft, etc. His cover being blown, and knowing he was still wanted in Venezuela for blowing up an airliner and killing 73 persons, Posada Carriles now "vanished '' and "went underground.” Of these other people, they know how this is being run. I do not. ''
Bush’s relationship with Rodriguez/Gomez was explained by the cables of American officials in late January 1985. The U.S. Ambassador to El Salvador, Thomas Pickering, cabled General Paul F. Gorman, commander of the U.S. Army Southern Command, stating:
“Rodriguez has high level contacts at the White House, DOS [State Dept] and DOD [Defense Department], some of whom are strongly supporting his use in El Salvador. "It would be in our best interests that Mr. Rodriguez confer with you personally prior to coming to El Salvador. I have some obvious concerns about this arrangement...." General Gorman sent a cable to Ambassador Pickering and Col. James Steele, U.S. military liaison man with the Contra resupply operation in El Salvador, stating: "I have just met here with Felix Rodriguez, [deleted, probably 'CIA''] pensioner from Miami. Born in Cuba, a veteran of guerrilla operations [several lines deleted].... " He is operating as a private citizen, but his acquaintanceship with the VP is real enough, going back to the latter's days as D[irector] CIA. "Rodriquez' primary commitment to the region is in [deleted] where he wants to assist the FDN [Contras military forces]. I told him that the FDN deserved his priority.... He will want to fly with the ESAF (El Salvador Air Force) to establish his credibility, but that ... seems to me both unnecessary and unwise....''
In addition, people suspected Bush was involved in the Iran/Contra scandal because on July 29, 1986, Bush met at the King David Hotel in Jerusalem with his Terrorism Task Force member Amiram Nir, who was an Israeli intelligence agent. Bush told his chief of staff Craig Fuller to send the notes of this meeting to Oliver North, not to President Reagan or any other American official. Craig Fuller's memorandum said, in part:
SUMMARY: Mr. Nir indicated that he had briefed Prime Minister Peres and had been asked to brief the VP by his White House contacts. He described the details of the efforts from last year through the current period to gain the release of the U.S. hostages. He reviewed what had been learned, which was essentially that the radical group was the group that could deliver. He reviewed the issues to be considered--namely that there needed to be ad [sic] decision as to whether the items requested would be delivered in separate shipments or whether we would continue to press for the release of the hostages prior to delivering the items in an amount agreed to previously.
The VP's 25 minute meeting was arranged after Mr. Nir called Craig Fuller and requested the meeting and after it was discussed with the VP by Fuller and North....
Nir described some of the lessons learned: "We are dealing with the most radical elements.... They can deliver ... that's for sure.... [W]e've learned they can deliver and the moderates can't.... " Fuller’s notes described the President talking about obtaining shipments of items (arms) to trade them for hostages held in Lebanon. The circuit was clear – Bush was involved in obtaining arms from Israel to sell to the Iranians to obtain the release of the hostages and the money paid by the Iranians for the arms would be used to buy guns so that people like Hasenfus could drop them to the Contras to aid their war.
Despite all this evidence, Bush continued to assert he was “out of the loop” regarding the Iran Contra scandal.
For a while, Bush's stance seemed to convince the public.
The Iran Contra scandal had caused people such as Congressmen Henry Gonzalez to call for the impeachment of President Reagan and his Vice President Bush. But the situation was handled. Neither man was impeached.
Ten days after being informed by Attorney General Edwin Meese that proceeds from arms sales to Iran were diverted to the Contras in Nicaragua in violation of the Boland Amendment, President Reagan appointed John Tower, Edmund Muskie and Brent Scowcroft to a commission and ordered them to investigate the allegations. 'The Tower Commission' interviewed 50 witnesses in three months including President Reagan on several occasions. The Commission also examined White House files including Reagan’s diary. On February 26, 1987, Tower issued his report. According to the March 9, 1987 issue of Newsweek:
In Tower's words, the president "was poorly advised and poorly served." But Reagan himself "clearly didn't understand" what was going on: he let his emotions rule him, never ordered a critical review, and allowed his aides to manipulate him and make their own foreign policy as they lied, diverted arms profits. and tried to cover up the scandal.
The Tower Commission did not implicate Bush in the scandal.
One senator pursued the drug connections to the Iran Contra network. Sen. John Kerry headed the Senate Subcommittee on Terrorism, Narcotics and International Relations. In 1989 he published his report that concluded, according to the Boston Globe, June 20, 2003: "…the CIA and other U.S. agencies had turned a blind eye to drug trafficking occurring on the fringes of the contra network. In many cases, traffickers were using the same airplanes, airfields and other resources that the contra were using."
A survey of the Bush Presidency before the 1992 election showed that Bush had not been prosecuted for any crimes relating to the Iran Contra scandal, even though he was the Vice President at the time. However, despite the Tower investigation and Congressional investigation, the independent prosecutor Lawrence Walsh was appointed to investigate further. As the Bush Presidency began, Walsh was grinding his way through the courts still attempting to obtain convictions and win appeals regarding Oliver North, Casper Weinberger, Admiral John Poindexter and others. Iran Contra seemed to be the scandal that just kept on going.
Lawrence Walsh in the Iran Contra Report stated: "In 1991 and 1992, Independent Counsel uncovered important evidence in the form of withheld documents and contemporaneous notes that raised significant questions about the earlier accounts provided by high administration officials." In addition, Wash had requested documents from Bush, including Bush’s personal diary. Bush fought to keep that diary, containing Iran Contra events, secret throughout his Presidency. He did not reveal its existence before the 1992 election effectively preventing it from becoming an election issue.
The Iran Contra scandal soon had to share headlines with the rapid descent of the Savings and Loan industry. The Mafia bust out of America's Savings and Loans (S&Ls) cost many Americans their life savings. Where the Mafia exists there has to be a Godfather and rumors ran rampant that President George H. W. Bush was the Don running the bust out. When presidential sons, Neil and Jeb, were linked to the scandal, the rumors grew in intensity and the President's reelection prospects dimmed.
Lengthy articles in newspapers and magazines educated the American public on the differences between S&L's and banks. S& L's in the United States were created to finance home loans for Americans. After a slump hit the economy in 1982, Jake Garns, (R. Utah) increased the insurance on deposits in S&L’s to $100,000. In 1982 Garns and Frenand J. St. Germain (D. R.I.) authored the Garn-St. Germain Act that deregulated the banking industry. S&L’s were permitted to sell commercial loans, not just home loans, and could fund developers’ real estate ventures. Upon the passage of Garn-St. Germain, President Reagan, who campaigned with his V.P. Bush on a plank to get the government off American’s backs, said, “We hit the jackpot!" Real estate speculation quickly followed and loans were provided by numerous S&L's to insider cronies even though the loans were not backed by adequate property or sufficient collateral. Speculators made millions, and then one by one the mismanaged S&L’s started to fail. Depositors, many elderly, lost their life savings as the S&L’s went bankrupt.
But the Reagan/Bush administration did not stop the S&L's collapse. Instead, Reagan reduced the number of S&L examiners and vigorously fought reform efforts brought by Ed Gray, chairman of the Federal Home Loan Bank Board, when Gray warned that the S&L’s were collapsing. Charles Keating, who caused the $3 billion dollar collapse of Lincoln Savings, found an ally in Vice President Bush who tried to force Ed Gray out of office. George H. W. Bush did not want Ed Gray investigating the Vice President's family connection to the S&L fiasco. Bush's sons, Neil and Jeb, had financial interests in failing S&L’s and they were poised to make profits at the expense of other less knowledgeable and less connected depositors. It was important to Pappy Bush that during the Presidential election of 1988, the issue of collapsing S&L’s was not directed at George Bush.
Bush knew that his son Neil and a business partner had borrowed $100,000 from the Silverado Savings and Loan. Neil Bush was a board member of that same endangered company. On September 23, 1990the Los Angeles Times reported that federal regulators had filed a $200 million lawsuit against Neil Bush and other officers of Silverado, accusing them of “gross negligence” that contributed to its $1 billion collapse. It became a real possibility that son Neil Bush's conduct would impact his father's bid for re-election in 1992.
The 41st President also knew that his son Jeb was doing business with Miguel Recarey Jr., a Cuban immigrant and associate of mobster Santos Trafficante. Trafficante had built International Medical Centers (IMC) into America's largest health maintenance organization for the elderly. The Wall Street Journal reported on 8/9/88 that:
He (Recarey) knew people, important enough people, to be invited at least three times to the White House.
But then last year, Mr. Recarey started getting invitations to court. A grand jury accused him of conspiring to bribe union leaders to get patients for IMC. A second indictment charged him with running an illegal wire tap operation. Another indictment finally came down charging Recarey with defrauding the U.S. government.
By this time, he had vanished. His company collapsed. Investigators found themselves puzzling over what had happened to nearly $1 billion in federal Medicare funds that had poured into IMC since 1981. . . .
IMC also gained various waivers of HHS rules. Among them lucrative waivers that let the HMO draw more than 50% of its revenue from Medicare. C. McClain Haddow, a top aide to HHS Secretary Margaret Heckler in 1985, testified to Congress that he approved such a waiver on her instructions -- after both he and Mrs. Heckler had received telephone calls from Vice President Bush 's son, Jeb.
Bush's solution to the S&L problem was a bailout, which he announced in February 1989. By that time, the government had paid out $40 billion to try to rescue failing S&L’s. This involved the issuance of $50 billion in new bonds through a financing corporation, that was a subsidiary of the new Resolution Trust Corporation. Congress passed Bush’s legislation in August 1989. The RTC began selling off properties belonging to the failed S&L’s and speculators, many of them insiders of the S&L's, bought them for pennies on the dollar. The victims of the deceit soon caught on to the game and voiced their anger. Hoping to dampen the outcry, the Justice Department began to prosecute some of the S&L perpetrators. But the effort seemed futile as the scandal grew. The bail out itself began looking like a fraud. As reported by Nathaniel Blumberg, in The Bush Family in the 90's:
"We will not rest until the cheats and the chiselers and the charlatans spend a large chunk of their lives behind the bars of a federal prison," President Bush said on June 22, 1990, in regard to the Savings and Loan fraud. Read his lips! Then stare at the fact that when FBI field offices requested 425 new agents to help investigate the 21,000 thrift fraud referrals sitting "unaddressed" in their files, the Bush administration approved only half of those requests and reduced the funds Congress had authorized to spend on prosecutions.
The bailout didn't placate the public. The public still wanted heads to roll and among the heads on the chopping block were the "First Sons", Neil Bush and Jeb Bush, profiteers of the Silverado and Broward S&L failures. Their indictments were a possibility. Bush had to do something to save his sons, but it could not be perceived by the public that the President had used his authority as president to rescue them.
With millions of dollars in drug money pouring into international banks to service the secret government another financial fiasco soon erupted. The collapse of the Bank of Credit and Commerce International (BCCI) and the financing of Saddam Hussein through the Banco Nationale Lavoro (BNL) became the third major scandal to threaten Bush's reelection.
Senate investigator Jack Blum summed up the BCCI case in his 1991 testimony before a congressional committee:
"This bank was a product of the Afghan War and people very close to the Mujahideen have said that many Pakistani military officials who were deeply involved in assisting and supporting the Afghan rebel movement were stealing our foreign assistance money and using BCCI to hide the money they stole; to market American weapons that were to be delivered and to market and manage funds that came from the selling of heroin that was apparently engineered by one of the Mujahideen groups." Source: http://www.larouchepub.com/other/1995/2241_bcci.html
Throughout the 1980s the Italian bank, BNL, an integral part of BCCI, was the conduit for western governments to secretly arm Saddam Hussein with chemical weapons and other weapons of mass destruction, supplied by Chilean arms dealer Carlos Cardoen and firms such as Matrix Churchill. The Atlanta branch of BNL was the focus of these transactions.
As noted by Russ W. Baker in the Columbia Journalism Review (March/April 1993) http://www.cjr.org/year/93/2/iraqgate.asp:
The obscure Atlanta branch of BNL, "relying partially on U.S. taxpayer guaranteed loans, funneled $5 billion to Iraq from 1985 to 1989. Some government backed loans were supposed to be for agricultural purposes, but were used to facilitate the purchase of stronger stuff than wheat. In February 1990, Attorney General Dick Thornburgh blocked U.S. investigators from traveling to Rome and Istanbul to pursue the case. More damningly, we know now that mid level staffers at the commerce department altered Iraqi export licenses to obscure the exported materials' military function -- before sending the documents on to Congress, which was investigating the affair. According to the Financial Times, top officials at the International Monetary Fund and the Pentagon expressed alarm over Export-Import Bank loan guarantees to Iraq, which aided the development and stockpiling of a major chemical warfare capability in Iraq. Among the companies shipping technology to Iraq were Hewlett-Packard, Tektronix, and Matrix Churchill, through its Ohio branch. ABC's Nightline, which had been looking at Iraqgate for some time, hooked up with the Financial Times in an unusual and productive arrangement. On May 2, 1991, the team reported the secret minutes of the President's National Advisory Council, at which, despite earlier reports of abuses, an undersecretary of state declared that terminating Iraqi loans would be 'contrary to the President's (Bush's) intentions.'
What the public did not know was that Bush’s son, George W. Bush, had obtained investments from BCCI bank insider through their representative James Bath. Author Kevin Phillips, a top Republican strategist under President Nixon, reported in his book American Dynasty:
"Bush made his first connection in the late 1970s with James Bath, a Texas businessmen who served as the North American representative for two rich Saudis (and Osama bin Laden relatives) - billionaire Salem bin Laden and banker and BCCI insider Khalid bin Mahfouz. Bath put $50,000 into Bush’s 1979 Arbusto oil partnership, probably using bin Laden and bin Mahfouz funds.” The conservative American Spectator reported, "Bush has given conflicting statements about Bath's investment in Arbusto, finally admitting to the Wall Street Journal that he was aware that Bath represented Saudi investors.
Bush’s Attorney General Thornburgh was handling the BCCI matter by prosecuting Christopher Dragoul, the manager of the Atlanta branch of BNL and some of that branch’s employees. Thornburgh’s theory was that the Atlanta branch was a rogue and the scandal did not extend further. However, Congressmen Gonzalez and others were obtaining evidence that the matter didn’t end with Draqoul. Senator John Kerry and Senator Hank Brown intended to release a report on BCCI to the Committee on Foreign Relations by December 1992.
Brent Scowcroft and Lawrence Eagleburger, then on Bush’s cabinet were consultants to BNL prior to Bush’s presidency, when they had worked at Kissinger Associates.
Thornburgh handled the fact that members of the Bush administration were connected to companies involved in selling “components” to Saddam by advising that the President waive conflicts of interest law pertaining to these cabinet members. Before the Iraq war started, 11 members of Bush's cabinet declared conflicts of interest re: advising Bush on the Iraq war. Brent Scowcroft and Lawrence Eagleburger, then on Bush’s cabinet, were consultants to BNL prior to Bush’s presidency, through their employment with Kissinger Associates. Bush granted 11 conflicts of interest waivers and they were all kept secret from the public until a Congressional investigation revealed them.
The public's anger grew as more facts came out through Congressional investigations. Matters such as BNL’s financing of Chile's Carlos Cardoen so that he could provide cluster bombs to Saddam Hussein defied explanation. Attorney General Richard Thornburgh constantly delayed attempts by Congressional Committees to seek information. However, Congressional investigators pushed forward and startling new information continued to be supplied to the public by the media.
Five major negative stories were bubbling to the surface just as the President faced reelection. Attorney General Richard Thornburgh had made a valiant effort to delay and defuse the witch's brew, but he had been absolutely ineffective in eliminating even one scandal.
In commenting on Thornburgh's desire to centralize all prosecutions through his office, On January 1, 1990, The San Diego Union Tribune reported:
Mr. Thornburgh rationalizes this bad idea by insisting that strike force consolidation will end jurisdictional disputes and provide numerous managerial benefits. To the contrary, we believe it will dilute the federal government's offensive against the mob in general and drug kingpins in particular.
During the last two decades, the regional strike forces, together with the FBI and other agencies, have racked up an impressive record against organized crime. Since 1984, for example, these federal crime fighters have secured convictions of the leaders and other senior officials of Mafia families in Boston, Brooklyn, Buffalo, Chicago, Cleveland, Kansas City, Las Vegas, Milwaukee, Philadelphia and Providence. As a consequence, mob influence has been diminished in most of these cities. Conversely, when strike forces were abolished in New Orleans, New York City, Pittsburgh and St. Louis thirteen years ago by then Assistant Attorney General Thornburgh, mob related crime increased in each city. Bowing to popular demand, the Carter administration re-established the New Orleans strike force A variation of the strike force concept was established in New York City, which enabled U.S. Attorney Rudolph Giuliani in 1985 to indict and convict top mob bosses who are presently serving long prison sentences.
Jonathan Kwitny, in his book How Bush's Pals Broke the Banks wrote:
The old strike forces had prosecuted mob figures who were involved in the Savings and Loan frauds. An example was Mario Renda of New York City, who worked with the mob to broker $5 billion per year in deposits into 130 S&L’s which failed. Jonathan Kwitny noted, “many of these deposits were made on the specific condition that the S&L’s would lend money out to borrowers Renda would recommend, who turned out to be local Mafia people or strangers from out-of-state.
According to the New York Times on March 1, 1991, Attorney General Thornburgh sent a memorandum to all federal prosecutors dated June 8, 1989. In this memorandum, Mr. Thornburgh wrote that a Federal prosecutor's duty to enforce the law sometimes conflicts with a written ethical rule of the legal profession that generally forbids a lawyer to talk with an opponent’s client without the permission of the client's lawyer.
If such a conflict arises, as when a prosecutor decides that he needs to interview a defendant, the Attorney General wrote, the ethics rule would not be allowed to “cripple Federal investigative techniques.” And although states have authority over ethics standards for lawyers, the Attorney General wrote, “that authority permits regulation of Federal attorneys only if the regulation does not conflict with the Federal law or with the attorneys’ federal responsibility."
The Thornburgh memo set off a firestorm of controversy. The New York Times continued,
In November, the House Government Operations Subcommittee on Government Information, Justice and Agriculture issued a report urging Mr. Thornburgh to withdraw the memo. The report noted an “apparent inconsistency” in the Justice Department recommending that its lawyers abide by ethics rules while at the same time concluding that certain rules may not apply.
Thornburgh refused to withdraw the memorandum. Media pundits and the general public were now openly questioning whether both the Attorney General and the President considered themselves and their cronies above the law.
The House Subcommittee questioned whether the Department of Justice was policing its own prosecutors or allowing them free reign. The Subcommittee demanded information about charges which had been made against 10 prosecutors for matters such as presenting false information in court, harassing defense lawyers and violating defendants’ constitutional rights.
The New York Times concluded:
After a five month delay, the subcommittee said, the Justice Department reported that no disciplinary action had been taken in any case. That, the subcommittee report said, tended “to further, rather than dispel, perceptions of the Department as a fox guarding the chicken coop.”
Privately, Justice Department officials say prosecutors have so much power on so many issues that the ethics debate seemed theoretical. If prosecutors can be trusted about whom to charge with crimes and what crimes to pursue, the officials argue, prosecutors ought to be also trusted to decide what is ethical conduct. The Department’s critics say they are not willing to trust it that much. “If the rules of ethics don’t apply to Federal prosecutors,” said Neal R. Sonnett, a defense lawyer from Miami, “Who watches the watchers? Who prosecutes the prosecutors? Who makes sure that we don’t move toward a police state?" The heat was on Richard Thornburgh and despite all of his efforts to counter the attacks, things were beginning to unravel: Just before Senators Heinz and Tower died, specific issues had reached the point where Thornburgh was proving so ineffective that he was being subpoenaed seeking information he did not want to reveal.
For example Rep. Henry Gonzalez (D-Texas) made it clear he was going to pursue BNL’s financing of Saddam Hussein.
On April 24, 1991, Rep. Henry Gonzalez reported to the House of Representatives' Committee on Banking, Housing and Urban Affairs. He said, “Loans now estimated at over $4 billion went from that bank to assist Saddam Hussein. A substantial portion may have gone into Iraq's secret network of companies and individuals for obtaining western technology.”
Gonzales explained that in 1990 his committee had issued subpoenas to the Federal Reserve Board for the reports of state prepared examinations of BNL in each state's files. The State of Illinois had filed a lawsuit to block this request on grounds of confidentiality. The Committee met on April 11 regarding a renewal of the subpoena in the 102nd Congress. Gonzalez reported: “The committee can now report to the House that it voted--by a unanimous vote of 40 to 0--to renew that subpoena, on the same basis as in the last Congress.”
Court action initiated by the State of Illinois’ blocked this subpoena but the message to Thornburgh was clear; Gonzalez would remain in hot pursuit of the BNL culprits.
On January 3, 1991, Rep. Curt Weldon expressed his lack of faith in Thornburgh's prosecutorial objectivity by requesting the appointment of an independent prosecutor to investigate the involvement of government officials in the S&L disaster. On April, 1, 1992, Rep. DeFazio urged Congress not to authorize an additional $25 billion to bail out the S&L’s. These billions had been required by Bush’s 1989 creation of the RTC to solve the S&L problem. DeFazio said:
How about a $425 million loan from the U.S. treasury for 7 years – interest free. That is the deal the savings and loan bailout crowd offered Patriot American Investors—a group represented by a Republican fundraiser and lobbyist with very close ties to the administration. How about a $100,000 personal loan with no interest and no repayment. That is what the President’s son—a Silverado Savings & Loan director -- got from a developer whose misdeeds ultimately costs the taxpayers $31 million in defaulted loans. How about the pit bulls at the Bush Justice Department who have assessed a paltry $80 million in penalties against Savings and Loan crooks and then have managed to collect less than 1 percent of those paltry fines. How many of the Savings and Loan crooks with outstanding fines are major contributors to the National Republican Party? That is a story I don’t expect to see in the press anytime soon.
On June 24, 1991, Rep. Patricia Schroeder (D. Colo.) told the Congress:
When we see what it is going to cost the taxpayers, it is absolutely shocking. But even more shocking is how the FDIC is dealing with this. We should remember that this agency is funded by the American taxpayer, and they are proceeding to settle these savings and loan cases in sealed court decisions. Yes, the taxpayers can pay the bill, but they cannot see what happened.
We just finished the one in the Silverado case in Colorado. The taxpayers are going to be on the hook for $950 billion. They sealed the decision on the $49 million that they assessed to the people who were really at fault, and actually we now find out that over $23 million of that was taxpayer funded money, too. So we are going to pay even more.
On May 6, 1991 Hon. Dennis Eckart introduced the Savings and Loan Prosecution Task Force Act to obtain more prosecutions of S&L fraud. Eckart told Congress:
There is hardly a week that goes by that I do not receive a letter from one of my constituents regarding the Savings and Loan debacle. These are the same constituents, the American taxpayers, who are getting stuck with the $500 billion tab for bailing out the S&L industry. A citizen of Chesterland, Ohio, for example, wrote me recently to ask: "What are you doing to prosecute those involved in this nightmare?"
What are we doing, Mr. Speaker? Unfortunately, the answer to that question seems to be "not much". It is estimated that up to 60 percent of the S&L failures involved fraud, but the U.S. Justice Department's Task Force on Institutional Fraud has simply failed to pursue these cases aggressively. During the period of October 1988 through December 1991, only 992 defendants were charged in major S&L cases, with fewer convictions and only modest asset recoveries. As of last June, only 21 percent or 879 of the major ongoing fraud cases were related to the Savings and Loan scandal. These numbers simply do not add up.
The legislation Mr. Dorgan and I have introduced would direct the Attorney General of the United States to establish a Savings and Loan prosecution task force. This separate, stand-alone task force would be charged solely with seeing that those criminally responsible for the S&L mess are prosecuted and put behind bars.
Richard Thornburgh barely had time to catch his breath when just three months later another Congressional Subcommittee again addressed the Attorney General's reluctance to be open and honest. This time it was generally believed that Thornburgh was trying to protect former Attorney General Edwin Meese and members of his "California Mafia".
On July 25, 1991, the Committee on the Judiciary, Subcommittee on Economic and Commercial Law headed by Rep. Jack Brooks issued a subpoena for certain documents from the Department of Justice relating to the Inslaw investigation and extra territorial arrest authority. On July 31, 1991, the Congressional record, Daily Digest reported:
Committee on the Judiciary: Subcommittee on Economic and Commercial Law met to receive documents from the Department of Justice regarding the Inslaw investigation and the legal opinion of the Office of Legal Counsel relating to extra territorial arrest authority, pursuant to subpoenas authorized July 25, 1991. The subcommittee reserved judgment on the Department's compliance with the subpoena relating to the Inslaw investigation pending a review of the documents provided. The subcommittee also suspended, without dissolving, the subpoena for the Office of Legal Counsel documents to permit further negotiations.
On September 10, 1992, Jack Brooks submitted the Investigative Report of the Committee on the Judiciary, and noted Thornburgh’s failure to fully comply with the committee’s subpoena:
Throughout the two Inslaw investigations, the Congress met with restrictions, delays and outright denials to requests for information and to unobstructed access to records and witnesses since 1988. The Department initially attempted to prevent the Senate Permanent Subcommittee on Investigations from conducting an investigation of the Inslaw affair. During this committee's investigation, Attorney General Thornburgh repeatedly reneged on agreements made with this committee to provide full and open access to information and witnesses. Although the day before a planned committee meeting to consider the issuance of a subpoena the Department promised full access to documents and witnesses, the committee was compelled to subpoena Attorney General Thornburgh to obtain documents needed to complete its investigation. Even then, the Department failed to provide all the documents subpoenaed, claiming that some of the documents held by the Department's chief attorney in charge of the Inslaw litigation had been misplaced or accidentally destroyed. The Department has not provided a complete accounting of the number of documents missing nor has it conducted an investigation to determine if the documents were stolen or illegally destroyed. Questions regarding the Department's willingness and objectivity to investigate the charges of possible misconduct of Justice employees remain.
No where was the malfeasance of Thornburgh's Justice Department more concentrated or more compelling then in the total corruption that had occurred in the United States Bankruptcy system.
Investigative reporter Jim Norman, writing in Forbes Magazine on November 12, 1990, described the crises facing the gullible citizens who sought shelter in the bankruptcy laws in America. The title of his side bar was Hospital? Or morgue?
No other country in the world has anything like Chapter 11 of the U.S. Bankruptcy code. Chapter 11 is what allows a debtor to keep control of his company while working out a plan to pay creditors. Its goal is to let companies rehabilitate themselves. Most countries impose a trustee on a bankrupt company, to watch out for creditors' interests.
In theory, Chapter 11 is a hospital for sick companies. In reality, it is more like a morgue. Only 10% to 12% of Chapter 11 companies emerge healthy - usually only the biggest ones, with lots of cash to start with - and even then they are shadows of their former selves. The rest are liquidated, usually after huge legal expenses and years of delay have ground down the assets. Fully half the Chapter 11 cases filed since the new law took effect in 1979 are still pending.
The problem can only worsen. Today, companies are marching into Chapter 11 at a brisk pace. Filings in the Southern District of New York - which gets about 30% of the major cases - are running double last year's rate. And the size of cases is mushrooming: Publicly traded debt in Chapter 11 companies has leaped from barely $1 billion in 1987 (not counting Texaco) to more than $6 billion. With recession looming over dozens of troubled LBOS, the worst is yet to come.
Legal and other professional fees often run well over $1 million a month in mega-cases like Eastern, Johns-Manville and LTV, providing a badly needed windfall to big corporate law firms that had geared up or the mergers and acquisitions boom that's gone bust. "If someone has a life-threatening disease, they don't quibble over anything but the best way to deal with it," says Michael Crames, a partner at Kaye, Scholer, Pierman, Hays & Handler. Perhaps the country's best paid bankruptcy lawyer, Crames bills at $465 an hour.
Personal bankruptcies are up 14% this year over last, when an average of one in every 142 families went bust. The Nilson Report estimates $13 billion, or 1.6% of the consumer debt outstanding last year was made uncollectible by bankruptcy filings -- even though a study by Visa USA Inc. showed 40% of debtors surveyed could have paid off most of that over a few years by stretching out debt under Chapter 13.
Not surprisingly, Congress is set to take a major look at the workings of the bankruptcy system in the next session.
But the injustice of Thornburgh's Justice Department had spun out of control and had resulted in the elimination of individuals who fought to be honest and adhere to a code of honor that the Bush administration's members had long since abandoned. Murder had been made an integral part of the cover up to protect those in power.
Following the strange deaths of Senators Heinz and Tower, Thornburgh could no longer stand the heat and he decided he wanted to get out of the kitchen. He wanted to go home to Pennsylvania where he had been appreciated for his hard nose personality and right wing philosophy. He found his boss, George H. W. Bush, receptive to the idea. A change at the top spot in the Department of Justice might just confuse and stall his detractors and place a senator in that key state whose vision of America was very close to the Presidents.
On June 10, 2001, the New York Times editorial entitled Out of Bounds at Justice stated:
Yet before long, he (Thornburgh) too surged out of bounds into partisanship. A leading House Democrat found himself the victim of a slanderous investigative leak out of the department; the Attorney General found himself strapped to a polygraph as his department fruitlessly pursued the source. When legislators balked at his death penalty bill unless it protected against racial unfairness, Mr. Thornburgh couldn’t resist branding them “pro criminal.”
The Attorney General can’t be expected to master every case. Yet he professed detailed knowledge of the Alaska oil spill litigation. But then he had to plead ignorance of the fact that the lawsuits implicated a company in which he holds stock…..
Widely known as a moderate when he was Governor of Pennsylvania, Mr. Thornburgh has veered to the right. Is that a sign of national elective ambition? Such ambition is neither unprecedented nor untoward, but it does not mix well with the job of running Justice.
Mr. Thornburgh says he can stay on as Attorney General for a couple of months because he’s not yet formally a candidate for the senate. But that is only because the Pennsylvania Republican Party is postponing its nominating convention – at Mr. Thornburgh’s request.
The Justice Department, the Administration and Mr. Thornburgh’s mixed record, deserve a cleaner, conclusion. A candidate for the senate should be a full-time partisan. The Attorney General of the United States should not.
On August 9, 2001, Thornburgh finally submitted his resignation to run for the senate. He would face Harris Wofford in a November 5th special election. Thornburgh was favored to defeat Wofford, who had been appointed by Governor Casey to fill Heinz’s seat on an interim basis and who was nominated to run to serve out the rest of the dead Senator's term.
Bush would not longer be dogged by the contentious conduct of Thornburgh. Bush could appoint a new Attorney General suggesting to the public that he was seeking equal justice for all.
However, one day after Thornburgh's resignation, the Grim Reaper once again took control of Bush's future. Reporter Joseph "Danny" Casolaro was found dead. All of the scandals facing George H. W. Bush came back to haunt him taking the shape of Casolaro's Octopus and its tentacles wrapped around the President and doomed his reelection.
The New York Times on September 3, 1991 said of Danny’s investigative reporting:
Mr. Casolaro saw the Inslaw case as part of a broad conspiracy by officials of the last two Presidential administrations. He referred to the case as “The Octopus” and said it involved a tangled series of shady doings involving everything from Inslaw to the Iran Contra scandal to tampering with a presidential election to money laundering by the scandal ridden Bank of Credit and Commerce International.
Under his theory, according to some of his acquaintances, Reagan Administration appointees in the Justice Department stole the Inslaw computer system to give to some friends as a political payoff. The friends, Mr. Casolaro said, had been responsible in 1980 for persuading Iranians who were holding American Embassy hostages in Teheran not to release them until after that year’s presidential election.
According to that theory, backers of Ronald Reagan in 1980 wanted to block an “October Surprise” by President Jimmy Carter – a release of the hostages just before Election Day that would have greatly enhanced Mr. Carter’s chances of re-election. As it turned out, Mr. Carter was soundly defeated, and the hostages were not freed until Ronald Reagan was inaugurated as President in 1981.
Mr. Casolaro also believes, his friends say, that the money gained through the sale of the computer system, purportedly marketed to other governments that paid for it with American aid money, was funneled through BCCI. Some of the money, Mr. Casolaro contended went into private accounts and the rest was put into hidden United States intelligence accounts for use by both the Reagan and Bush administrations for secret operations in Central America and elsewhere.
Soon Rep. Jack Brooks began to investigate the death of Casolaro as it related to Inslaw. Now Bush’s new Attorney General would have to deal with the Casolaro mystery and death.
Bush and his colleagues tried to laugh off charges of “conspiracy”. The idea of Bush being one of the men constituting the head of the octopus became part of the popular imagination. It was a mysterious theory among many people who were just learning how to log onto the Internet. The fax machine, already in popular use, became the tool of choice as person after person faxed data all over the world about Danny’s death and The Octopus.
On September 3, 1991 the New York Times reported:
The White House refuses to comment on the Casolaro case or the “octopus” conspiracy allegation other than to point out that President Bush has repeatedly denied involvement in any scheme to delay release of the hostages in Iran. “This is basically a matter for the Justice Department,” said Judy Smith, a White House spokeswoman.
Bush sought a replacement for Thornburgh. He soon nominated William. P. Barr as Attorney General. Barr, the current Deputy Attorney General had worked for the CIA in 1973 to 1977 while he attended law school at George Washington University. Bush, the former CIA director under President Ford, believed he would soon have the Justice Department under control again with this old CIA hand.
And Bush believed the bonus would be Thornburgh's easy election to Senator Heinz’ old senate seat. After all, who had ever heard of Governor Casey's appointee Harris Wofford?
Harris Wofford, an attorney, had worked as a special assistant to President Kennedy. He assisted in the formation of the Peace Corps and served as a special representative to Africa. From 1987 to 1991 he was the Pennsylvania secretary of labor and industry. For eight years he served as the President of Bryn Mawr College. Wofford was well known for his book Of Kennedys and Kings: Making Sense of the Sixties, published in 1980.
Wofford ran against Thornburgh as a civil rights candidate forged in the Kennedy era. He had represented Martin Luther King Jr. in his youth and advised him to turn to the nonviolent writings of Mahatma Ghandi. Kennedy appointed him his special assistant and the chairman of the Subcabinet Group on Civil Rights from 1960 to 1962.
During his campaign Wofford put health care reform at the top of the national political agenda. He said, “If those accused of a crime have the right to a lawyer, then every American should have the right to a doctor.” Wofford didn’t advocate that the United States withdraw from international concerns, but he believed citizens would find it increasingly difficult to support the extension of American ideals to others across the globe when they feel cheated out of the American Dream themselves.
On Election Day, November 1991, Harris Wofford thoroughly trounced Dick Thornburgh, handing a major defeat to President George H. W. Bush.
The “war President” of Desert Storm who defeated Saddam Hussein in six weeks and took back Kuwait, could not muster backing on the home front for his candidate Thornburgh in Pennsylvania. Wofford said his election was a message from “the forgotten in this country.” 56% of Pennsylvania voters cast ballots for Wofford and his campaign for national health insurance and extension of unemployment benefits. “If this isn’t a makeup call for Bush, I don’t know what is,” said Virginia Senator Charles Robb, chairman of the Democratic Senate Campaign Committee.
But did Bush wake up?
In November of 1991, William P. Barr was confirmed as the new Attorney General of the United States. Barr’s job was to bring “justice” to the avalanche of scandals and, of course, to show Bush was not in any way liable or responsible for these many problems.
But the whirl storm of headlines driven by controversy and conspiracy continued unabated.
In August and September of 1991, just a year after the execution murder of San Francisco Attorney Dexter Jacobson, the Bay Area's daily and legal newspapers were again giving front page coverage to the bankruptcy fraud that most people believed had cost Jacobson his life.
Editorial pages of newspapers were once again inundated with angry victims writing letters to the editor. The Napa Sentinel reprinted a January 1991 letter writer Rodney Stich had sent to the Sausalito Police Department investigating Jacobson's execution. Stich, author of The Real Unfriendly Skies - Saga of Corruption, wrote in part:
...The facts I encountered, as stated in part in the book, showed the Justice Department officials and various of the Justice Department were heavily implicated in the Chapter 11 (bankruptcy) corruption....
In my attempts to report and correct the tragedy riddled obstruction of justice by many federal officials, including the Justice Department and its FBI and U.S. Attorney arms. To block my reporting of the federal tribunals, and in retaliating against me, all felonies, I was the target of what is probably the nation's worst persecution by federal officials of a single whistle blower, which is still going on. The persecution involved federal judges and Justice Department officials, and which violated blocks of federal civil right and criminal statutes, forced me to seek refuge in Chapter 11 for my valuable and healthy $10 million estate. I did not know that federal officials had made Ninth Circuit Chapter 11 proceedings into a racketeering enterprise. As soon as I exercised these pseudo protections, the system went to work on me. My assets were unlawfully seized without a hearing, even without the corporate case on the court calendar. Then unlawful injunctive orders rendered by Oakland Judge Edward Jellen barring me from filing appears, oppositions, or any other defenses. When I did exercise these constitutionally guaranteed remedies, seeking relief from the corrupt seizure of my assets and the embezzlement by trustee Charles Duck, Jellen charged me with committing a crime and sentenced me to federal prison.
Another victim wrote to several television talk show hosts seeking to have the story told.
PLEASE HELP US! We are a group of debtors in California whose livelihood and homes are being stolen by a ring of U.S. Bankruptcy judges, attorneys and bankruptcy trustees who have formed a "club" to steal the assets of people who seek "protection" under Chapter 11 of the U.S. Bankruptcy Code. For the past five years the Justice Department has received numerous complaints about the conduct of these crooks and that department has done absolutely nothing about the situation except cover it up. The victims of this "Club of Thieves" have endured character assassination, enforced slavery, bomb threats, arson attempts and threats against the lives of their children as they have fought a totally corrupt system.
In spite of these very real and very intense pressures the victimized families and businesses tried to maintain their faith in the American Dream of equality under the law and justice for everyone. Those who have been the most vocal about the conduct of the "Bankruptcy Club" members have endured every increasing pressure. The U.S. Attorney's office participated in the pressure by meeting with several of the victims and then implying that, were the victims to cooperate with the authorities in bringing the criminals to justice, the victims and their families would be in danger. Finally, this ominous threat proved a reality when the body of Attorney Dexter Jacobson was discovered dumped in Sausalito a year ago this past Saturday. Mr. Jacobson had been shot once in the head execution style just days before he was scheduled to meet with the FBI and United States Trustee Anthony Sousa.
With victims being jailed when they defend themselves, their children being followed and threatened, arson attempts on their homes, bomb threats to their businesses and character assassinations on their reputations, it is no wonder that they are frightened, reclusive and looking for help. PLEASE HELP THEM BEFORE ANOTHER MURDER IS COMMITTED! We are the victims and not the criminals.
The BCCI and BNL scandals worsened and rumors of U.S. companies selling arms to Iraq deepened. Rep. Gonzalez continued to attack and, he aimed, not only at the now absent Thornburgh, but directly at President Bush. On March 30, 1992, Gonzalez address his fellow congressmen, stating in part:
Attorney General Thornburgh repeatedly tried to have the investigation of the Committee on Banking, Finance and Urban Affairs curtailed, under the false pretense that the committee's investigation of BNL could be harmful to the national security interests of the United States….
Those are the three basic powers: the power to declare war that the Constitution says only the Congress can do; second, the power of the purse, which is deposited in the Congress and only in the Congress; and third, the power to know, the power to search out and get the information that a wise lawmaker and a just lawmaker and an honest lawmaker must have in order to render a judgment in the perfecting of the rules and the laws that will make the policy for our constituents that we are upholding. It is the only last vestige that the Congress has not abdicated, and I had to interject that, plus Supreme Court decisions upholding that. But it is not unlimited.
I repeat, Attorney General Thornburgh repeatedly tried to have the investigation of the committee on Banking, Finance and Urban Affairs obstructed and curtailed under the false pretense that it would endanger national security…..
What he was really attempting to do was to cover up repeated lies to Congress and details of the failed United States policy toward Iraq. That was the whole thing. As soon as I announced that the Committee on Banking, Finance and Urban Affairs would hold hearings on the BNL scandal, former Attorney General Thornburgh tried to dissuade me.
So the State Department, the agency primarily responsible for national security matters, did not think that the BNL case involved national security concerns, yet the top political appointee of the Department of Justice, Richard Thornburgh, apparently failed to get this signal.
Mr. Thornburgh's efforts fit perfectly into the pattern of administration efforts aimed at thwarting congressional investigations of Iraqi policy and the pre-invasion pattern of obstructing justice insofar as the BNL case is concerned.
In fact, the Department of Justice continues to refuse the Committee on Banking, Finance and Urban Affairs access to thousands of BNL-related documents claiming that they are subject to grand jury secrecy rules…..
It is sad enough that the Departments of State and Agriculture repeatedly lied to Congress and the American public, thereby, about the United States policy toward Iraq. The Justice Department role in obstructing the investigation of the Committee on Banking, Finance and Urban Affairs of BNL is the ultimate hypocrisy. One would think that the Justice Department has a special obligation to protect the integrity of our government.
In the matter of the failed United States policy toward Iraq, and in the BNL case, I think a more appropriate name for the Thornburgh-led Department was the 'Obstruction of Justice Department'. I will not show that the BNL indictment was anything else but that which should have been done regardless. I will show that expected first in early 1990, we were told "Well, we are about to indict," but it did not happen for more than a year. First I will provide some background to set the stage for the discussion.
While the administration publicly expressed consternation over the actions of Saddam Hussein, behind closed doors and out of the sight of the Congress and the American people, in secrecy, and that is where all of these things have happened, the S&L scandals, and what will be equally scandalous, the banking scandals; they were all bred out of secrecy in those dark, moist rooms in the subterranean of the regulators and the White House and other places. They were not in the open.
Why not? I have always said, why do we have to close doors? If what we are doing is so good we ought to be bragging about it, throw the doors open, open the windows, and let anybody who wants to hear and see. But apparently that does not happen. There are always reasons and one can find some excuse for not doing it. I have always wondered about it, ever since I was on the city council of my city 39 years ago.
While the administration publicly was saying, "his is a matter of concern the way this fellow is acting now, that apparently we have a cease-fire and it looks like he won over Iran," but behind closed doors and out of the sight of the people and the Congress they courted Saddam Hussein with a reckless abandon that ended in war and the deaths of dozens of our brave soldiers and over 200,000 Moslems, Iraqis, and others, civilians and soldiers.
As I have detailed in previous floor statements, the State Department and the White House repeatedly intervened in the operations of the U.S. Department of Agriculture and in the Commerce Department operations in order to obtain close relations with Saddam Hussein. In fact, with the backing of President Bush, the State Department and National Security Council staff conspired in 1989 and 1990 to keep the flow of United States credit, technology, and intelligence information flowing to Iraq despite repeated warnings by several other agencies and the availability of abundant evidence showing that Iraq used BNL loans to pay for United States technology destined for Iraq's missile, nuclear, chemical, and biological weapons programs.
While Gonzalez was pushing Bush on the BNL and BCCI matters, Lawrence Walsh, the Independent Counsel, had obtained guilty pleas from Iran Contra participants Alan D. Fiers, Jr. and Elliott Abrams for withholding information from Congress.
In 1991 and 1992 Walsh indicted Clare E. George on ten counts of perjury, false statements and obstruction, and Duane Clarridge on seven counts of perjury and false statements regarding the Iran Contra scandal.
Then there was additional proof that the cover up for Bush continued. In 1991, the U.S. Court of Appeals for the District of Columbia Circuit reversed the convictions of Admiral Poindexter. On September 16, 1991, the case against Oliver North was dismissed on motion of the Independent Counsel after two days of hearings. Both the North and Poindexter convictions could not be upheld because the Congressional investigation had granted immunity for their testimony, thus denying them a fair trial in subsequent proceedings.
On June 16, 1992, Walsh indicted the highest level member of the Reagan team that he had ordered investigated. Former Defense Secretary Casper W. Weinberger was indicated on five felony charges of obstruction, perjury and false statements in both the Congressional and Independent Counsel investigations. The Weinberger trial was set to begin on January 5, 1993, after the election. Bush's attorney continued to negotiate with Walsh because Walsh had discovered that Bush still retained “chron” files containing his notes and other documents that pertained to the Iran Contra matter. Bush’s attorney did not want Bush to produce the "chron" files until after the election. Eventually, Walsh agreed.
Presidential hopeful Bill Clinton and his vice presidential choice Al Gore campaigned in the summer and fall of 1992. George H. W. Bush channeled his resources and his supporters and fought back. In his war room, Clinton's campaign manger, James Carville, worked around the clock countering Bush's punches. But Bush continued to have two experienced dogs of war biting at his heels every day, Texas Representatives Jack Brooks and Henry Gonzales. Clinton and Gore did not pay a lot of attention to Inslaw, bankruptcy fraud, the S&L's or BCCI during their campaign. They did not have to because Brooks and Gonzales emphasized the issues for the candidates.
On August 11, 1992, Jack Brooks, Chairman of the House Judiciary Committee, summarized the findings of the committee’s investigation into Inslaw:
Based on the committee's investigation and two separate federal court rulings, the draft report concludes that high level department of justice officials deliberately ignored Inslaw's proprietary rights in the enhanced version of Promis and misappropriated this software for use at locations not covered under contract with the company. Justice then proceeded to challenge Inslaw's claims in court even though it knew that these claims were valid and that the department would most likely lose in court on this issue. After almost seven years of litigation and $1 million in cost, the department is still denying its culpability in this matter.
Unfortunately, instead of conducting an investigation into Inslaw's claims that criminal wrongdoing by high level government officials had occurred, Attorneys General Meese and Thornburgh blocked or restricted congressional inquiries into the matter, ignored the findings of two Federal courts and refused to seek the appointment of an Independent Counsel. These actions were taken in the face of a growing body of evidence that serious wrongdoing had occurred which reached the highest levels of the department. The evidence received by the committee during its investigation clearly raises serious concerns about the possibility that a high level conspiracy against Inslaw did exist and that great efforts have been expended by the department to block any outside investigation into the matter.
Based on the evidence presented in this report, it is clear that extraordinary steps are required to resolve the Inslaw issue. The report recommends that the Attorney General take immediate steps to remunerate Inslaw for the harm the department has egregiously caused the company. It also recommends that an Independent Counsel be appointed with broad powers to investigate all matters related to the allegations of wrongdoing in the Inslaw matter.
In my view, Congress and the Executive Branch must take immediate and forceful steps to restore the public confidence and faith in our system of justice which has been severely eroded by this painful and unfortunate affair. I, therefore, urge all members to support the adoption of this report.
On September 9, 1992, just as the fight to be President was reaching a fever pitch, Rep. Gonzalez lobbied a preselection salvo at Bush. He reported to the Congress, in part:
Mr. Speaker, since I last reported to the House, I am very happy to say that there has been continued and sustained progress in the investigation of how the administration supported Saddam Hussein right up to the time that he and Iraq invaded Kuwait and how Iraq and other countries, incidentally, used the Banco Nazionale del Lavoro and its Atlanta branch or agency known as BNL, and I will refer to it as BNL, to finance Iraq's extensive purchases of military technology and food in this country.
The administration clearly knew that Iraq was operating a clandestine procurement program in this country, and despite that knowledge, allowed Iraq's machinations to go on, because the policy was to entice Saddam Hussein into being a good friend and a solid citizen of the world. Just how misguided their indulgent policy was is made clear now by the many occasions in the past year when the United Nations has had to resort to threats of force to make Saddam Hussein comply with his own agreement to allow inspections and the elimination of his ability to produce weapons of mass destruction.
Mr. Speaker, let me say that we should not single-mindedly dwell on the fact that it was Iraq, because the main thing is our leadership in our country, both on the executive as well as the congressional level, have been like the old Bourbon kings, learn nothing and forget nothing, and so the use that Iraq was able to make of the vulnerability of our regulatory protective structure of our banking and financial system in our country has also enabled other countries and other vast international financial entities to keep on, even as I speak today, taking advantage of this vulnerability to the great peril of the stability and the well-being of our financial institution in the United States, and I think that is a dirty shame.
Since I last reported, the United States again has a new military presence in Iraq patrolling the skies over southern Iraq to protect, they say, the Shiites who live there and have been subject to attacks by the regime of Saddam Hussein.
Let it be remembered that at all other times our forces have been involved in the north protecting the Kurds, erstwhile, from Saddam Hussein; this time, however, there is no U.N. policy to legitimize the patrols.
In short, the stumbling Iraq policy has led us, as I feared it would from its very inception in 1990, in August, not January 1991, entangled in the most ancient of ethnic, religious, social, political quarrels of that whole area, not to mention the political quarrels between Iraq, its neighbors, and the quarrels of those neighbors with each other. But that entanglement is another story.
Today I want to talk about the progress of the committee's investigation into the BNL affair. This is my main and my fundamental purpose, has been, is now, and will continue to be, and that from the standpoint of the Committee on Banking, Finance and Urban Affairs of the House of Representatives.
I will repeat what I said at the very outset today: I am very happy, and I am pleased, with the progress we have made despite the continued interference and harassment from the highest levels of the administration, and regrettably, my friends of the House minority sector and its leadership.
During the August recess, pursuant to a resolution approved by the committee on August 6, I have signed and issued twenty-six new subpoenas for documents. Several thousand new documents have been collected with many more expected. The committee is organizing and evaluating this mass of new information, as we have had all through the years.
The administration, of course, is slow in producing the information that it has been asked to produce, and is experimenting with ways to avoid compliance with the subpoenas without falling in contempt.
This is in keeping with their longstanding policy of obstruction and harassment. But let me say to the Attorney General, to the National Security Adviser, and to all the various political operators in the White House and executive agencies, I am not going to be either intimidated or deterred. It will be "damn the torpedoes, full speed ahead." The committee will develop the evidence, we will learn the facts, and we will report those facts.
The administration has, since spring of this year, found it convenient to claim that I have somehow violated national security.
You know, I have come to the conclusion that nowadays, and for some time now, the last refuge of a scoundrel or scoundrels is national security.
This enables them to claim that the committee must not be entrusted with classified documents. But this is an old dodge, that started long before the committee had ever reviewed a single classified document. At the very beginning of the committee investigation, over two years ago, the then Attorney General, Richard Thornburgh, wrote to claim that the BNL case was, "a sensitive case with national security concerns." This was September 26, 1990. And he went on to claim after specifically ordering that I not have a hearing on BNL, "that the committee's effort to interview witnesses and conduct hearings significantly diminishes the Department’s ability to successfully prosecute this matter." A few days later the FBI Director chimed in, saying that the committee's efforts would have a "likely negative impact on this (the BNL) investigation." However, to his credit, Director Sessions did not raise the specter of national security.
The committee considered those objections, and the bipartisan decision was to go ahead with the investigation. Consequently, on October 23, 1990, the committee approved its first BNL subpoenas by a voice vote, with the necessary number of 'live' and 'present,' under the rules, members of the committee being present.
The point is, however, that the administration started raising the curtain of secrecy and the bugaboo of national security from the first day of the committee's investigation. In the two years since, the obstruction has become steadily greater, and the harassment more noisy, with each new step toward a full disclosure of what happened, and why, and with each new step toward the evidence that would force policy changes that would prevent another such abuse of our country's taxpayers and banking resources.
Let me tell you categorically right now these abuses are continuing even now, as we are meeting here today, to the tune of nearly a trillion dollars, and most of it involved in such things as the illegal laundering of drug money. How long, my colleagues, how long political election year or not are we to wait before we sink our country's financial and banking institutional safety and stability?
Mr. Speaker, in April, a low level Treasury political appointee was instructed to write a letter complaining that the committee had compromised a secret document -- in this case, notes of a National Security Council meeting. Nothing in that document was sensitive, but it was embarrassing stuff to the administration and therefore classified as secret. A month later the new Attorney General, for in the meantime the old one--Thornburgh - had been defeated in a Senate campaign, this new one claimed that the committee could no longer be entrusted to receive classified information. After that, no agency would allow the committee to review or even discuss classified material.
Mr. Speaker, I have a message for the Attorney General: I am determined, as one Member of Congress, to cleanse and purify this grossly corrupted Justice Department in power. In other words, I want to debar the Justice Department. I asked the Attorney General what secrets had been compromised, and got a response from one of his minions, not he, but one of his minions, "Oh, the inquiry was beside the point. How dare you ask?" Clearly, no vital secret had, or ever had been, disclosed. In fact, the administration merely wanted to reserve the complete right to decide what might be disclosed and how or when.
What the declassification process, as used by the administration, does is to allow the administration to produce sanitized versions of so called classified documents on a slow, very slow basis or not at all.
One investigator, from another committee who had worked on another aspect of this case, noted how hard it had been to get a declassified version of records made available for publication. The process took almost a year, according to him - almost a whole year.
The kind of stalling tactic this investigator encountered is what is called in the trade, a slow roll. That is, you get cooperation, but it is so slow that the facts emerge long after the issue at stake has lost public significance. In another case, involving yet another committee, also working on the Iraq mystery not so mysterious a puzzle, my colleague, the Honorable Sam Gejdenson, repeatedly has complained that many documents are needlessly classified--in other words, the claim of national security is used to keep embarrassing information from being published. I know that this is true. The iron curtain of secrecy is thrown up in order to create an obstacle course for anyone who wants information that the administration finds inconvenient to release, or embarrassing to discuss.
As a matter of fact, my colleagues, we have reached in America, an America that is supposed to be an open society and an open government, the incredible point where this administration, at the rate of 7,107,017 documents a year are being classified. As a matter of fact, by way of parentheses, the so-called Free Trade Agreement was classified until last night, I believe. Why? What national security is involved there?
Now, add 7,107,017 documents classified each year by this administration, that means they are classifying at a rate of over 19,000 documents a day.
What is the difference between our government now, and incidentally, I am not going to exempt Congress. I do not know when they slipped through some resolution creating this rule where our documents are secret or secure and need release. That is absolutely the most tragic, the most serious abandonment of our Republic's constitutional structure in the history of our Republic since the inception of the Constitution.
How long, my colleagues, do you think yours and our peoples that we are supposed to represent liberties are safe if this continues untrammeled and unrestrained?
Let me tell you, we are doomed. I do not have to be a prophet to know that, and you know it, too, if you give it some careful thought....
Now, that is over two years ago, claims that to investigate at all ruins national security, claims that a hearing has or will ruin some vital project, claims that this or that document cannot be found or must have every word in it censored, or claims that the administration is cooperating, but must keep vital secrets and, of course, the final club is to accuse someone of violating security. That, I repeat, has come to be the last refuge of a scoundrel nowadays.
All these asserted and assorted scare tactics have been employed against me. The administration demands that declassification procedures be respected, but reserves the right to declassify documents slowly or censored them so completely that they are useless, or not to declassify them at all....
But now the administration has risen to new heights of invectiveness. They are not content merely to classify or censor or refuse to act on declassification requests. Now they have tried to deposit subpoenaed documents, not with the Banking Committee, but with the House Select Committee on Intelligence, with the minority leader, with the Speaker of the House, a committee with respect to the select committee that never asked for them, has no interest in them or needs them not. This is an unprecedented effort to evade a congressional subpoena.
To his everlasting credit and competence, I salute Speaker Foley who, rightly and to his credit, refused to be drawn into this latest political ploy by the Attorney General and his band of desperadoes.
In a letter to Attorney General Barr, the Speaker noted that the Parliamentarian of the House 'knows of no precedent' for Barr's request that he, the Speaker, control access by a committee to its own subpoenaed documents and that he had 'no authority to impose the conditions the administration seeks.' The Speaker correctly said: It is not appropriate for either the Intelligence Committee or me as Speaker to unilaterally interpose ourselves between the Banking Committee and the Administration with respect to what constitutes effective compliance with the Committee's subpoenas.
In other words, the Attorney General should find someone or something else to use as his latest barricade against the committee's efforts to obtain all the facts….
The pattern of obstruction and resistance has stiffened considerably this year. This is an election year. In the past the National Security Council, through the Rostow gang - now to this gang we have the captain general heading this conspiracy. The Attorney General is a captain general now heading the Rostow gang in a complicit, intended, premeditated and coldly calculated effort to thwart the Congress and prevent the Congress from discharging its constitutional obligations, and duties and responsibilities.
Now in the past, as I have said, the National Security Council merely tried to regulate the flow of information to the Congress by creating numerous and even more elaborate barricades. But beginning in May, under the guidance of the Justice Department, every agency that owns or can buy a secret stamp, and, gee, I almost feel sorry for them and feel like ordering some to send them to them and advise that I know what they are going to stamp, and, I guess, before long maybe their office supply list will be stamp secret so they have refused to provide any information that they claim is secret.
Just days before the election, Bush's cover up accelerated into high gear with a massive shredding of documents. According to Stephen Pizzo:
In a letter written just days before the presidential election last fall, with George Bush trailing in the polls, House Banking Committee Chairman Henry Gonzalez (D-TX) accused the U.S. Department of Agriculture of spending an entire weekend shredding documents that described the administration's role in obtaining $5.5 billion in U.S.-taxpayer-guaranteed agricultural loans for Iraq from the Banca Nazionale del Lavoro (BNL). Gonzalez demanded that all shredding equipment be removed from the department immediately. It was not.
Gonzalez was seriously concerned. "We felt that unless we said something pretty soon, the confetti falling on Clinton during his ride down Pennsylvania Avenue will be shredded documents from the Reagan/Bush administrations," said a congressional staff member.
On November 3, 1992, George Herbert Walker Bush lost the election to William Jefferson Clinton.
The Grim Reaper had his victory. The deaths of Heinz, Tower, Jacobson and Casolaro had exposed the charade that Bush had executed on the American people. Election Day 1992 found the people mad as hell and their anger was reflected in the largest turnout percentage since the election of John F. Kennedy. Bill Clinton took 43% of the vote compared to Bush’s 38% with Ross Perot trailing at 19%.
Shortly thereafter, on December 24, 1992, Christmas Eve, President Bush exercised his executive pardon power to reward Iran Contra players: Weinberger, Clarridge, McFarlane, Fiers, Abrams and George. The cover-up was now complete and George H. W. Bush's place in history became one of his own making.
On February 8, 1993, Lawrence Walsh issued his Fourth Interim Report to Congress on the Weinberger case and the presidential pardons. The official investigation of the Iran Contra scandal had concluded. Those involved, cleansed of their felonies by Bush’s pardon, and not subject to any further prosecution, could live to see another day -- perhaps even another day in government.
1995 was an important year for the Heinz family and for the Bush family and for the Kerry family.
In 1995, Teresa Heinz married John Kerry. They had met in 1990 when her husband John Heinz introduced her to his colleague John Kerry, of the Senate Banking Committee. She was, at that time and now, one of the richest women in the world, the heir to her husband’s estimated $ 500,0000 million dollar fortune and independently known for her philanthropy in leading the Howard Heinz Endowments.
1995 also brought good luck to the former President Bush's family when George W. Bush won the election for Governor of Texas on January 17, 1995, defeating the popular incumbent governor Democrat Ann Richards. In 1994, his brother Jeb lost his bid to be the governor of Florida eventually winning the governorship in 1988.
In 2000, George W. Bush, the first son, ran for President against Albert Gore, Jr. The United States Supreme Court determined the outcome. Those Justices of the Supreme Court nominated by Pappy Bush and former President Reagan awarded the race to George W. Bush declaring him the 42nd President of the United States in November 2000.
But while the Bush family celebrated, the Grim Reaper called an honest warrior home to rest. On November 28, 2000, Henry B. Gonzalez died in his hometown of San Antonio, Texas. Known as the “Maverick”, “Don Quixote”, and “Fighter for the Poor” his nicknames reflected the reverence common men paid to his memory.
The new man in the White House, George W. Bush, made sure that his father and his cronies have nothing to worry about in the future regarding the scandals that had defeated his father. According to the Washington Post, November 1, 2001: Rep. Henry B. Gonzalez
The Bush White House has drafted an executive order that would usher in a new era of secrecy for presidential records and allow an incumbent president to withhold a former president's papers even if the former president wanted to make them public.
The five page draft would also require members of the public seeking particular documents to show "at least a demonstrated, specific need" for them before they would be considered for release.
Historians and others who have seen the proposed order called it unprecedented and said it would turn the 1978 Presidential Records Act on its head by allowing such materials to be kept secret "in perpetuity."
Under the order, incumbent and former presidents "could keep their records locked up for as long as they want", said Bruce Craig, Executive Director of the National Coordinating Committee for the Promotion of History. "It reverses the very premise of the Presidential Records Act, which provides for a systematic release of presidential records after 12 years.”….
"Absent compelling circumstances," the incumbent president will concur in the former president's privilege decision, the draft order states. But if the incumbent president does not agree on a former president's decision to grant access, "the incumbent president may independently order the archivist to withhold privileged records".
The order would work "like a one-way ratchet," said Scott Nelson, an attorney for the Public Citizen Litigation Group. "If the former president says the records are privileged, they will remain secret even if the sitting president disagrees. If the sitting president says they should be privileged, they remain secret even if the former president disagrees."
The new President signed an executive order to preserve the presidential records that assured his father's legacy and completed the cover-up.
The Grim Reaper paused after taking Representative Gonzalez home. An efficient man of death, introspection was not to his liking. But he had to ask himself if Heinz, Tower, Jacobson, Casolaro and all the other good men were taken to their final rest in vain? Had his hard work in 1991 achieved his goal of exposing the injustices perpetrated by the 41st President of the United States? Or would he have to take many more lives to restore the equality to the scales of justice? If people did not understand the history he had created perhaps hundreds of thousands more would have to be sacrificed before people of honor could have their voices heard in the clarion call of history.
Virginia McCullough, Kathryn Dixon © 2004