The Inslaw Scandal
A service of the
Kenn Thomas, Jim Keith:
The Octopus : The Secret Government and Death of Danny Casolaro
A provocative analysis of the mysterious death of journalist Danny
Casolaro discusses the link between the death and high-level government
conspiracy involving the Iran-Contra affair, the October Surprise, BCCI,
and other political scandals and cover-ups.
(Feral House, Feb. 1997. Order it through Amazon.com)
During the Clinton administration, allegations of
politicization have been raised against the Justice Department.
Concerns have been raised that the Justice Department, mainly
through Associate Attorney General Webster Hubbell (now resigned
and convicted for fraud), has been, and still is used as an
instrument for political purposes. During previous
administrations, the Justice Department was accused of being
controlled by arrogant bureaucrats who considered themselves
above the law.
Probably the most glaring example of the latter is the Inslaw
scandal that started in 1982, but is still covered up to this
date according to several key players as well as Congressional
Inslaw Inc. is a computer software company based in
Washington, DC, owned by William and Nancy Hamilton. Inslaw
markets case management software to courts and related justice
agencies, to the insurance industry, to large law firms, and to
the law departments of corporations. Inslaw's principal asset is
a highly sophisticated software program called PROMIS, a computer
program which manages large amounts of information
A Justice Department Above the Law
In 1982, Inslaw won a contract with the Department of Justice
to install PROMIS in U.S. attorney's offices. The person assigned
by the Department to manage the contract, however, was one C.
Madison Brewer, who had just been fired by Inslaw. Just one month
after the contract was signed, Mr. Brewer recommended that it be
terminated even though Inslaw was performing as agreed. The
Department stole the software because it felt that it was above
private property law.
The Justice Department withheld payment for the software, and
Inslaw went into bankruptcy. Inslaw hired former Attorney General
Elliot Richardson as their attorney. Richardson filed a civil
suit claiming that Inslaw had been the victim of a conspiracy by
the Justice Department.
In 1987, U.S. Bankruptcy Judge George Bason ruled in favor of
Inslaw and awarded Hamilton $6.8 million, saying that Justice
Department officials "took, converted and stole" PROMIS through
"trickery, fraud and deceit." Judge Bason lived to regret his
ruling when his reappointment was denied in a highly unusual
move. Bason was replaced with one of the Justice Department
lawyers who had argued the Inslaw case.
The Inslaw case had now reached the level of a full
Investigative Reporter Danny Casolaro was investigating
possible links between BCCI, Iran-Contra, and Inslaw. He called
the covert operation, in which the CIA was involved, "The
The Justice Department started sharing the illegally obtained
PROMIS software with other agencies, including intelligence
agencies where PROMIS was modified for intelligence purposes and
sold to foreign intelligence operations in Israel, Jordan, and
other places. Michael Risconsciuto of the Wakenhut security firm
has testified that he was contracted to install a "trap door" in
the software to allow the CIA to tap into PROMIS software
worldwide. It appears that the original petty crimes of the
Justice Department have led to the exposure of a sensitive
national security operation.
As Casolaro continued his investigation he started to receive
death threats. He told his brother, "if there was an accident and
he died, not to believe it." On August 11, 1991, Casolaro was
found dead in the bathtub of a hotel room in Martinsburg,
Virginia, where he had a meeting with a U.S. Army Special Forces
covert intelligence officer.
Following the death of Casolaro, Inslaw Attorney Elliot
Richardson called for an investigation. "It's hard to come up
with any reason for his death, other than he was deliberately
murdered because he was so close to uncovering sinister elements
of what he called "The Octopus," Richardson said.
A Full Government Conspiracy
After several appeals, Judge Bason's ruling was finally
reversed on technical jurisdictional grounds in 1991. The Senate
started investigating the Inslaw scandal and found even more
troubling information: its investigation was hampered by an
unwillingness by Justice Department officials to cooperate, and
because key documents were reported missing or lost by the
According to sworn testimony before the Committee, high level
Justice Department officials conspired to steal the PROMIS
software and secretly convert it to use by domestic and foreign
Ronald LeGrand, Chief Investigator for the for the Senate
Judiciary Committee told Hamilton and Richardson that a trusted
Justice Department source had confided that Inslaw "was a lot
dirtier for the Department of Justice than Watergate had been,
both in its breath and depth."
After several Congressional investigations concluded
wrongdoing by the Justice Department and called for the
appointment of a special prosecutor, Attorney General William
Barr in 1992 appointed lawyer Nicholas Bua to investigate the
Inslaw scandal. Bua impaneled a grand jury, but dismissed it
midway through the investigation, allegedly because it was giving
credence to the allegations and constituted a "runaway" grand
In June 1993 the Bua report was released. It cleared Justice
officials of any wrong doing in the case.
Inslaw Attorney Elliot Richardson issued a statement saying,
"What I have seen of [the report] is remarkable both for its
credulity in accepting at face value denials of complicity in
wrongdoing against Inslaw and for its failure to pursue leads
making those denials implausible."
On July 12, 1993 Inslaw submitted a 90-page rebuttal of the
Bua report to Associate Attorney General Webster Hubbell. The
rebuttal offered evidence that the Bua report was false. What
Inslaw probably did not know at time, however, was that Webster
Hubbell's and White House Deputy Counsel Vince Foster apparently
were linked to both Iran-Contra and Inslaw through two Arkansas
companies called Park-on-Meter and Systematics.
On July 20, 1993 Vince Foster was found dead in Fort Marcy
Park. Three days later, attorney Paul Wilcher, allegedly
investigating "The Octopus" was found dead.
Mar 27 1995 Whitewater Update
- Starr Probing Links to Inslaw Murder
- May 29 1995 Vince Foster's Frequent Travels
- Aug 14 1995 Whitewater Update
- Foster's ties to the National Security Acency
- Aug 21 1995 Interview with Jim Norman, Author of "Fostergate"
- Mr. Norman sheds light on what is really behind the
death of Vince Foster
- Aug 28 1995 Newsweek Mounts Counteroffensive Against Fostergate
- Sep 11 1995 Newsweek's Attack on Internet Conspiracy Theorists
- Sep 18 1995 Newsweek Described as Official Disinformation Organ
- Sep 18 1995 Official Foster Investigation Intensifies
- Sep 18 1995 Foster was Indeed Subject of Counterintelligence Investigation
- Sep 18 1995 White House Responds to Foster Conspiracy Theories
- Sep 25 1995 Is Foster Key to "The Octopus?"
- Sep 25 1995 Letters to the Editor
- Jim Norman Responds to Claims by Sarah McClendon
- Open Letter to the Editor
- Well worth the Money
- Sep 25 1995 Foster's Ties to Israelis Questioned
Congress Finally Acts on Inslaw
After Inslaw owner Bill Hamilton distributed a
report on the Inslaw scandal to
each member of the House Judiciary Committee,
Congressmen Jack Brooks (D-TX) and Charlie Rose (D-NC)
tried to enact a bill that would force an investigation of the
Justice Department and the death of Danny Casolaro, and pay
reparations to the owners of Inslaw. Among the allegations in
The bill, H.R. 4862 was introduced in the House on July 29,
1994, but died without any action by the Democratic leadership in
the waning days of the 103rd Congress.
- The following criminal statutes may have been violated by certain
high level Justice officials and private individuals:
- `18 U.S.C. Sec. 371--Conspiracy to commit an offense.
- `18 U.S.C. Sec. 654--Officer or employee of the United States
converting the property of another.
- `18 U.S.C. Sec. 1341--Fraud.
- `18 U.S.C. Sec. 1343--Wire fraud.
- `18 U.S.C. Sec. 1505--Obstruction of proceedings before
departments, agencies and committees.
- `18 U.S.C. Sec. 1512--Tampering with a witness.
- `18 U.S.C. Sec. 1513--Retaliation against a witness.
- `18 U.S.C. Sec. 1621--Perjury.
- `18 U.S.C. Sec. 1951--Interference with commerce
by threats or violence (RICO).
- `18 U.S.C. Sec. 1961 et seq: Racketeer Influenced
and Corrupt Organizations.
- `18 U.S.C. Sec. 2314--Transportation of stolen
goods, securities, moneys.
- `18 U.S.C. Sec. 2315--Receiving stolen goods.
Under the new Republican leadership, Senator Orrin Hatch
introduced a similar bill, S. 740.
On May 3, 1995, the Senate
voted to commit the bill, which would pay reparations to the
owners of Inslaw, to the chief judge of the United States Court
of Federal Claims for a report thereon.
Last updated September 24, 1996.
[Sources: Karen-Lee Bixman, U.S. House Resolution 4862, Rep.
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