Subject: Re: Casoloctopus
As Inslaw prepares for its new day in court [see Conspiracy
Nation Vol. 8, #91], the following reviews some of the legal
history of the PROMIS case. The excerpt comes from THE OCTOPUS:
SECRET GOVERNMENT AND THE DEATH OF DANNY CASOLARO by Kenn Thomas
and Jim Keith, available next month from Feral House, POB 3466,
Portland, OR 97208,
Kenn Thomas publishes Steamshovel Press a "conspiracy theory"
journal available for $6 from POB 23715, St. Louis, MO 63121,
Inslaw and The Law
Danny Casolaro had been pulled under by the Octopus of his
imagining or his investigations, perhaps both. In not too
distant waters, however, other behemoths thrashed about for
supremacy in an even larger conspiratorial sea--the law.
Legal forces lined up against Inslaw began to clarify when
the Hamiltons discovered that Associate Attorney General D.
Lowell Jensen had, as District Attorney in Alameda County,
California, promoted DALITE, a rival management software, to the
58 county California district attorney offices. Larry Donoghue,
the man responsible for selecting software used by the L.A.
office and later named deputy district attorney for LA County,
recalls that, "Jensen called me into his office and I went away
feeling what I regarded to be unusual and significant pressure to
select the DALITE system." PROMIS, however, had won the Los
Angeles County office and, as Bill Hamilton later remarked,
"...evidently Jensen bore a grudge." Hamilton recalls, "Jensen
was promoted to associate Attorney General in May or June of `83
-- and that's when all the contract disputes came up." Jensen
even served as chairman of the oversight committee in charge of
Additionally, Jensen had served with Ed Meese for 12 years
in Alameda County while Meese had been a deputy district
attorney, and in 1985 Meese promoted him to Deputy Attorney
General. He also came under scrutiny during the Senate's
Iran-Contra investigations when a memo was discovered from him
tipping off Oliver North that the federal prosecutors were aware
of his actions. This from a Justice Department official charged
with prosecuting the matter. (1)
There was no misunderstanding in the government's handling
of PROMIS. The government, or at least a particular segment of
it, was out to get Inslaw. Sometimes they even said so in so
many words: "On a gorgeous spring morning in 1981, Lawrence
McWhorter, director of the Executive Office for USA attorneys,
put his feet on his desk, lit an Italian cigar, eyed his
subordinate Frank Mallgrave and said through a haze of blue
smoke: "We're out to get Inslaw."
"McWhorter had just asked Mallgrave to oversee the pilot
installation of PROMIS, a job Mallgrave refused, unaware at the
time that he was being asked to participate in Inslaw's
"We were just in his office for what I call a BS type
discussion," Mallgrave told Wired. "I remember it was a bright
sunny morning... (McWhorter) asked me if I would be interested
in assuming the position of Assistant Director for Data
Processing...basically working with Inslaw. I told him... I
just had no interest in that job. And then, almost as an
afterthought, he said `We're out to get Inslaw.' I remember it to
The job eventually went to C. Madison "Brick" Brewer. Bill
Hamilton previously had fired Brewer for poor job performance.
Brewer's new position as hired gun on the Inslaw case for the
Justice Department gave Hamilton an early perception that the
undue hassle faced by his company came from Brewer's personal
vendetta. This was before the revelations concerning Earl Brian,
the October Surprise pay-off and the rest of the sordid mess.
(3) The Justice Department determined that no conflict of
interest existed for Brewer in his new assignment. Brewer would
eventually testify in federal court that he received approval
from Deputy Attorney General Lowell Jensen, whose vested interest
in the rival DALITE software had been damaged by the contract
award to Inslaw in the 1970s, for all of his actions regarding
Inslaw. Perhaps revenge had transformed Inslaw's contract
disputes into a legalistic attempt to trash the company.
Things could never be that simple in Inslaw's case, however.
Joined with Brewer's at Justice was Peter Videniecks, the man
Michael Riconosciuto had sworn threatened him to not testify
before the House Judiciary Committee. Videniecks had his own
incestuous connection to Inslaw: he had worked in the Customs
office maintaining its contracts with Earl Brian's Hadron, Inc.
systems consulting group. Videniecks and Brewer led Justice to
demand that Inslaw turn over PROMIS just in case an alleged
impending bankruptcy made it impossible for the company to live
up to its contracts. Inslaw agreed, but with the stipulation
that Inslaw retain all rights to enhancements to the program and
that Justice only provide it to the US Attorney's office.
Justice, predictably, reneged. It made no effort to determine
the validity of Inslaw's claims of ownership to PROMIS
enhancements and began to withhold payments, making its
subsequent forced march into bankruptcy court a Justice
Department self-fulfilling prophecy, and beginning the process
that originally had attracted Casolaro's attention. As Inslaw's
problems mounted, Earl Brian's Hadron, Inc., made a play to
takeover the company through Dominic "We have ways of making you
sell" Laiti, another company, SCT, financed by investment bankers
linked to Brian, also attempted a buy-out.
Inslaw ultimately hired Leigh Ratiner of Dickstein, Shapiro
and Morin, to file suit against Justice to the tune of $30
million. Ratiner established the bankruptcy court as having
jurisdiction in the dispute with the unique argument that Justice
had seized control of PROMIS. As Inslaw's creditor, this
violated a tenet of the Bankruptcy Act forbidding creditors from
controlling the property of debtors.(4) The strategy led to Judge
George Bason's favorable ruling for Inslaw in 1987, which also
led to Bason's early removal from the bench and, according to Ari
Ben-Menashe, possibly also to Leigh Ratiner's early retirement by
a pay-off to his law firm. (5) Federal district court judge
William Bryant upheld Bason's decision after an appeal by the
Justice Department, and the Supreme Court denied review in
October 1991. A separate appeals court, however, deciding on an
appeal made by the Justice Department, ultimately overturned
Bryant on the basis of the jurisdictional argument. A three
member panel of judges determined that federal bankruptcy court
had no jurisdiction in the case. No judgement was ever issued
exonerating the Justice Department from its actions in the Inslaw
Casolaro had given some thought to other legal dimensions of
the Inslaw predicament. In undated notes, he made an extensive
study of computer software and hardware case law, from the point
of view of trade secret protection, trademark protection,
contract law and patent law and copyright law. From that
perspective, he underlined the concept of "a reverse engineering
approach" that he felt was applicable to the legal status of
PROMIS. Called the "clean room technique", it is used as a
method of avoiding copyright infringement in the developing of
software products of similar functions. The clean room uses two
teams, one receiving and decompiling the protected work legally
and "producing a document setting forth ideas and specifications
that are in the unprotected idea domain." The second team takes
the document and, with no further communication with team one,
creates a new product without infringing on the protected aspect
of the original software. Casolaro notes that such reverse
engineering had been used by the many computer manufacturers to
clone Apple and IBM computers. Apple and IBM never pursued legal
action against the clean room technique because they feared an
unfavorable legal action. (6) Perhaps for similar reasons, the
PROMIS problems were never played out in the copyright legal
(1) Mahar, Maggie, "What Really Sparked the Vendetta Against
Inslaw?", Barron's National Business and Financial Weekly, April
(2) Fricker, Richard L., "The Inslaw Octopus," Wired 1.1,
Premiere Issue, 1993, p 80.
(3) Richardson, Elliot, L., "A High-Tech Watergate," New York
Times, October 21, 1991.
(4) Fricker, p. 101.
(5) Ben-Menashe, Profits of War, p. 141.
(6) Casolaro's Notes.