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IN THE UNITED STATES
DISTRICT COURT EASTERN DISTRICT OF
VI Alexandria Division
UNITED STATES OF AMERICA
-vs-LYNDON LaROUCHE, et al,,
Monday, November 21, 1988
Transcript of Opening Statements and testimony of ELISABETH SEXTON on the first day of trial in the above captioned
The Honorable ALBERT V. BRYAN, JR.,
Judge United States District Court
FOR THE UNITED STATES
KENT ROBINSON, ESQUIRE
Assistant u. S. Attorney
MARK D. RASCH, ESQUJRE
Special Assistant U. S. Attorney
1101 King Street, Suite 502
Alexandria, Virginia 22314
JOHN J. E. MARKHAM, ESQUIRE JOHN
P. FITZGERALD, III, ESQUIRE U. S.
Department of Justice P. O. Box 972,
Ben Franklin Station Washington,
D. C. 20044
DON McCOY, RPR
OFFICIAL COURT REPORTER
ODIN P. ANDERSON, ESQUIRE ROBERT L. ROSSI, ESQUIRE OF: ANDERSON & ASSOCIATES One Longfellow Place Boston, Massachusetts 02114
FOR THE DEFENDANT WERTZ:
BRIAN P. GETTINGS, ESQUIRE
OF: COHEN, GETTINGS, ALPER & DUNHAM
1400 N. Uhle Street
Arlington, Virginia 22216
WILLIAM B. MOFFITT, ESQUIRE LISA KEMLER, ESQUIRE 655 S. Washington Street Alexandria, Virginia 22314
JAMES C. CLARK, ESQUIRE
OF: LAND, CLARK, CARROLL & MENDELSON
600 Cameron Street
Alexandria, Virginia 22314
DANIEL S. ALCORN, ESQUIRE
OF: FENSTERWALD & ALCORN
1000 Wilson Boulevard, Suite 900
U. S. A. Today Building
Arlington, Virginia 22209
MICHAEL W. REILLY, ESQUIRE
OF: HAUSSERMANN, DAVISON & SHATTUCK
176 Federal Street
Boston, Massachusetts 02110
R, KENLY WEBSTER, ESQUIRE
THOMAS HILL, ESQUIRE
OF: SHAW, PITTMAN, POTTS & TROWBRIDGE
2300 N Street, N.W.
Washington, D. C. 20036
EDWIN A. WILLIAMS, ESQUIRE 246 Maple Avenue, East Vienna, Virginia 22180
WITNESS DIRECT CROSS REDIRECT RECROSS
ELIZABETH SEXTON 107 166
GOVERNMENT RECEIVED IN EVIDENCE
Exhibit No. 1-A 110
Exhibit No. 1-B 112
Exhibit No. 1-C 120
Exhibit No. 1-D 123
Exhibit No. 1-E, page1 124
Exhibit No. 1-F 126
Exhibit No. 1-G 127
Exhibit Ho. 1-B 130
Exhibit No. 1-1 131
Exhibit No. 1-J 132
Exhibit No. 1-K, page 1 145
Exhibit No. 1-K, page 2 145
Exhibit No. 1-K, page 3 and 4 146
Exhibit No. 1-M, 1-N,1-P,1-Q, 157
1-S and 1-T
Exhibit No. 1-u 161
Exhibit No. 1-V, 1-W 164
MR. ROBINSON: Thank you. Members of the jury, this case is about money. It's about how the defendant got money, and to a lesser extent, what they did with that money when they got it.
First, I would like to tell you what we are going to prove about how the defendants got money. Here are a few examples of what you will be hearing from witnesses in this case: first, you will hear about a woman by the name of Elizabeth Sexton. Mrs. Sexton over the cours e of a period of months in 1985 loaned in excess of $100,000 as a result of certain solicitations and promises made to her by the defendant,
Mrs. Sexton got back about $750 from that over-$l00,000 loan. The rest of it was lost.
This case is also about a witness you will hear by the name of Martha Van Sickle. Mrs. Van Sickle loaned $250,000 as a result of promises made to her by the defendant, Dennis Small. She got back some interest payments on that amount, but she never recovered any of the principal.
This case is also about a woman by the name of Dorothy Powers, who loaned in excess of $30,000 as a result of promises made to her by the defendant, Michael Billington. She, too, got back a few interest payments, but that's all.
This case is also about a gentleman by the name of Jerry Corbin, who you will hear loaned $10,000 as a result of promises made to him by the defendant, He, too, did not get back any of that money.
This case is about how those people came to loan money to the defendants. It's about in particular the actions of the four defendants I just mentioned, ***, ***, Mike Billington, and Dennis Small, and about how those four people solicited loans from people over the course of the years 1984 through to the beginning of 1987.
It's also about how the other three defendants, Lyndon LaRouche, William Wertz, and Edward Spannaus, directed and controlled the fundraising efforts of the other four defendants.
Now, we are not here simply to determine who owes who money or how much is owed. We are not here to try to get that money paid back. That's not the purpose of this trial. This is a criminal case. The defendants, all seven of them, are charged in engaging in a scheme to defraud. That is, to obtain those loans by making false promises, false pretences, saying things to the potential lenders which they knew weren't true.
Count I of the indictment is a conspiracy charge, and it charges that all seven of them agreed together to carry out' that scheme to defraud. Counts 11 through XII charge each of the defendants in various combinations with defrauding specific individuals out of specific money at specific times.
Here is how we are going to prove those charges: first a little bit of background. The defendant, Lyndon LaRouche, ran for the presidency of the United States in 1980 and 1984. He is the leader of an organization we will prove, which first came into existence back in the 1970 ' s . That's an organization which has-gone by a variety of names. Primarily it has gone by the name of the National Caucus of Labor Committees, also known as the NCLC. It's gone by a couple of other names as well, one of which is simply the LaRouche organization. That is an organization which has devoted itself to promoting the views of Mr-LaRouche, the political views, the economic views, the sociological views, and also promoting his personal welfare.
Now, let me hasten to add that we are not here to question those political views. We will not ask you, the members of the j ury, to pass j udgment on Mr. LaRouche's political views or the views of any of his followers. This case is about money. It's about their fundraising practices.
Now, this organization that Mr. LaRouche headed over the course of the years between in the 70's and the early 198 0*s gradually became more and more highly structured and came to operate just as if it was a corporation, with Mr. LaRouche as the person in charge, the man running the entire organization.
You will near that directly below Mr. LaRouche in charge of this organization is a group of people called the national executive committee, also known as the NEC, You will hear that Mr. LaRouche appointed the members of the NEC, that they served just like the board of directors of a major corporation. They were the people who operated this organization on a day-to-day basis. And two of the members of the NEC are defendants here. One is William Wertz. You will hear that he became the NEC member in charge of all fund-raising for the entire LaRouche organization during the calendar year 1983.
A second member of the NEC is also a defendant. That is Mr. Edward Spannaus, and you will hear that he was in charge of the legal operations of the entire LaRouche organization.
In addition to the NEC, there was another level in the command structure, people called the National Committee members, and below them are the fundraisers, such as the other four defendants.
You will hear that that chain of command worked in all circumstances with the orders coming from Mr. LaRouche passed down the command structure directly to the fundraisers.
Now, this organization, the LaRouche organization, has operated under the names of a couple of corporations. I j ust want to mention them briefly to you, because you will be hearing about them. They are Campaigner Publications, Incorporated, Caucus Distributors, Incorporated, the Fusion Energy Foundation. These are a series of corporations which operated to do various things in furtherance of the LaRouche organization's goals, such as publishing literature and so on. But it is also those three corporations in which most of the borrowing took place, most of the lending that I mentioned at the beginning.
In addition, there were several campaign committees established to push forward Mr. LaRouche's candidacies for the presidency. And you will hear some about those campaign committees, and also about their fundraising practices, but for reasons that will become obvious when you hear the evidence, they didn't borrow anywhere near as much money as the commercial corporations did.
Now, this organization underwent a trans formation in 1983, and that's where the charges in this case really begin. You will hear that in a nationwide meeting of the entire LaRouche organization in the summer of 1983, Mr. LaRouche, as he had done before and did continuously throughout the period of this conspiracy, told his fundraisers told his entire organization, that they had to raise more money. He spoke to them then and at many other times in the following terms:, he told his people that the population at large, the people who didn't give money to the LaRouche organization, were not morally fit to survive. He said those people don1t deserve their money. We deserve their money. And he told his fundraisers to get that money-He told them to use anything short of thievery and thuggery to get money from the public at large. We will show you that that is exactly what they did.
At about that same time, Mr. LaRouche appointed the defendant, William Wertz, to head his fundraising operation, and this organization was transformed under the direction of Mr. LaRouche and Mr. Wertz. You will hear that many people who previously had been engaged in writing books, doing research, other activities, were suddenly reassigned to fund-raising and were required to devote their full efforts to that fundraising. That proposal for transforming the organization was one that was made by Mr. Wertz, and it was approved by Mr. LaRouche. It. was carried out by the command structure I discussed earlier.
What Mr. Wertz did, in addition to assigning people to fundraising, was to dramatically increase the requirements on the members of the LaRouche organization to raise money. He did that by setting quotas. Each person in the organization who was assigned to fundraising was required to raise a certain amount of money every week. The organization as a whole was required to raise a certain amount of money every week. And you will hear that those quotas were enforced money to the LaRouche organization, it would get repaid, and we will prove to you that that wasn1t true, that they knew that money would not be repaid. That is, the defendants knew that.
Here is how we will prove that: first, we will prove that it was the articulated policy of this organization not to repay loans. It was j ust.that simple. You will hear that Mr. Wertz actually said that to a group of fundraisers back in 1984. He stood up and said, "It is the policy of this organization not to repay loans. We will only pay money back to people under the following circumstances: first, if by paying them back some money, we can get more money out of them? second, if they can provide us with some sort of political benefit; or third, if they are suffering such extreme hardship such as medical emergencies, that we have to give them a little bit." That was what Mr. Wertz articulated as the loan policy of the organization.
And needless to say, that's not what was told over the phone by the fundraisers to people they were trying to borrow money from.
We will show you that that policy came from the defendant, Lyndon LaRouche and was passed from Mr. Lailouche to Mr. Wertz by the defendant, Ed Spannaus, by the NEC members of this organization.
We will show you that aside from the fact that that was the articulated policy of the organization, that is in fact the way the organization operated, from 19 84 right through to 1986- At no time did this organization make routine loan repayments- At no time did they simply repay people who were owed money. They only repaid people if it would get more money out of those people or if those people complained or hired a lawyer or managed to fall into one of the few categories where a little bit of money would be made available.
It's important to note that throughout this period of time when people weren1t getting repaid, the defendants kept right on borrowing money.
We will show you in particular that the fundraisers, defendants and Small and Billington and ---, knew very well that loans weren't being repaid. We will show you that, because they were in a position of having to go to the organizational people in charge of the finances and try to get money for the people who had loaned money in the past. So even though they knew that, they were continuing to borrow money throughout the period of time of this conspiracy.
We will also show you that through the testimony of a person who was in fact a fundraiser during this very period of time. You will hear the testimony of a gentleman by the name of Chris Curtis, who was himself on the telephones, who was himself borrowing money, who was up to his neck in
precisely the same conduct that these defendants were engaging in. He is different than those defendants in only one respect and that is that he left the organization in the early summer of 1986, because he could no longer be a part of what he was involved in.
Another way we will prove to you that these promises were false is that we will show you that the NEC members, Mr. Wertz, Mr. Spannaus, and also Mr. LaRouche, were put on notice no later than March of 198 5, that the entire loan situation had gotten out of control. By that point in time, the organization had raised $10 million by borrowing it, and were averaging only $30,00 or $40,000 a week in repayment. We will show you that the organization became aware that that wasn't even enough to pay off the interest on the loans that was accruing on a day-to-day basis. And what did the defendants do once they were put on notice? We will show you that they kept right on borrowing money.
There were several other occasions in xrfiich'"the executive members of the organization became aware of the loan problem. In fact, you will hear that in the fall of 1985, Mr. LaRouche put a ceiling on how much additional loans could be raised on a weekly basis. He put a ceiling of about $150,000 per week in additional loans that the organization was allowed to raise.
During that same period of time, however, we will show you that the organization was only repaying loans at the same rate, about $30,000 or $40,000 a week. So they were continuing to go deeper in debt by a rate of more than $100,000 a week.
Once again, in December of 1985, we will show you that the executive was advised that by then, the debt of this organization had reached the point of almost $30 million, and that the organization had only been managing to pay off that debt, actually had only been managing to pay some of the interest due at again a rate of $30,000 to $40,000 a week.
We will show you that by that point in time, everyone had to know there was no way that that $30 million in loans could be repaid. But the defendants kept right on borrowing more money.
The other way we will show you that the defendants knew that these loans were not going to be repaid is by showing you how the organization spent its money. And that's what I meant when I told you at the beginning this case was about both how they got money and what they did with it when they got it.
This organization, aside from borrowing money, also had perfectly legitimate activities, publication of books, publication of magazines, It had revenue other than the loans not enough to pay off $30 million, we'11 show you, but enough
that they could have devoted more money than they did to the repayment of loans. We will show you weeks in which this organization had $600,000 to spend but spent no more than $30,000 on repaying loans. This organization consciously decided how it was going to spend its money and consciously decided not to spend it on repaying the money to people they had promised to repay.
We will show you that Mr. LaRouche is the person who set the organisational priorities about who was going to be repaid and who wasn't.
That brings us to Count XIII of the case, which is the tax charge. In Count XIII, Mr. LaRouche himself is charged with a conspiracy to defraud the Internal Revenue Service, to impair and impede the Internal Revenue Service. And that charge is based on this: among that $600,000 a week or so that this organization had to spend, an enoruous -percentage of it went directly to the support of Mr. LaRouche. During this period of time when the organization was only spending $3 0,000 or so a week on repayment of loans, we will show you that for example, the organization purchased a property out in Leesburg, Virginia, for more than a million dollars. They came up with $400,000 in cash to put down on that property and spent another $600,000 improving it by putting in a swimming pool and a satellite dish antenna for the television and so on.
We will show you that one of the first things that got paid out of the budget every week was a $2,500 amount that went to one of the security personnel who accompanies Mr. LaEouche, and that that person out of that checking account paid for Mr, LaRouche's clothing, paid for his haircuts, paid for his books when he wanted to buy a book, paid for his every need.
We will show you that another one of the first things that came out of that budget was an additional amount of about $3,000 j ust to run the household that Mr, LaRouche was living in, to buy groceries, to buy wine, to pay the cleaners, and so on.
Now, Mr. LaRouche obviously was controlling and working for this organization j ust like those of us who earn salaries work for our employers. But rather than take a salary out of the organization that he controlled, instead Mr. LaRouche set up this other scheme that I have just outlined for you.
All of the money that he needed to survive, instead of coming to him as salary, instead of being reported to the IKS, instead of having taxes withheld from it, went through a middleman and got commingled with all kinds of other corporate expenses. As a result of that, even to this day, it's impossible to figure out j ust how much money was spent by these corporations on Mr- LaRouche personally, and that's
because of the whole way the system of paying him was set up. That's what the evidence will show about the tax charge against Mr. LaRouche.
Now, one thing I forgot to mention is that these loans that were made to this organization, when people made loans, what they got back from the organization were documents through the mail. They got promissory notes, or they got something called a letter of indebtedness. We will show you that all of those documents went through the mail, and that's why these are mail fraud charges, because this is a scheme which was executed through those uses of the mail.
It's interesting to look at those promissory notes, because they repeat the false representations that were made over the telephone to people. Specifically, they state that the loans will be repaid within a certain period of time and at a certain interest rate and even that there will be quarterly interest payments in many cases.
And we will show you that the person who designed those promissory notes and those letters of indebtedness and approved their use was the defendant, Edward Spannaus.
Now, we'11 also show you what happened to people after they loaned money to the organization. First, as I have already mentioned, there were some token repayments made, particularly, we will show you, in an effort to get further loans from people. But once the payments stopped and people started to complain about the money, further false statements were made to them by the defendants. First, the defendants said, "We are planning to pay you. It was j ust an oversight, j ust a mistake." Well, we'11 show you that those statements were false, also. We'11 show you statements just like that made by the defendant, LaRouche and the defendant, Spannaus, who wrote letters to lenders of this organization, saying that there was a loan repayment program in place, saying that they were scrambling to repay loans, when in fact that wasn't the case. They were not repaying loans.
Second, we'11 show you that the defendants said, "We j ust don't have any money that we can repay loans with. All of our funds have been taken up." And as I have already mentioned, we'11 show you that that s not true. In fact, the
organization was spending millions on Mr. LaRouche, as well as its commercial publishing activities.
Finally, we wil show you that when people complained the defendants tried to shift the blame for the failure to repay to other people, to try to do anything they could to avoid confronting their failures to repay.
Let me give you just an example of that: one of the Government witnesses, as I mentioned, will be Elizabeth Sexton. She loaned more than $100,000 to these organizations After she loaned that money, after she asked for repayment, after she was told she would get repaid, after all of that, then suddenly she was told, "The organization can't repay you because one of our bank accounts was seized in the course of an action brought by a bank up in New Jersey."
Well, we will show you that that did not result in the failure to repay Mrs. Sexton, because first of all, the bank account that was seized was held by one of the campaign organizations, and as a matter of Federal law, that money could not have been used to repay Elizabeth Sexton, who had loaned money to one of the corporations, but more importantly, we'll show you that that action I just referred to, the seizure of the bank account, occurred before Mrs. Sexton ever loaned one dollar. She didn't hear about that seizure of the bank account before she loaned the money.
She didn't hear about it when was promising her repayment. She only heard about it after she wanted her money back.
You will hear in this case a number of excuses brought by the defendants throughout the course of the period of time that this conspiracy, but the important thing to remember is that we will show you that they continued to borrow money even after these things which they now try to treat as excuses occurred.
This scheme ground to a halt in early 198 7, when as a result of some Court actions, these corporations stopped borrowing money.
As I mentioned to you, by that point in time, the
organizations had borrowed more than $30 million, and only some token payments, perhaps $3 million, had been repaid on all of that debt.
At the time that the organizations were shut down, we'11 show you that their total assets, the total amount of money involved in Caucus Distributors, Campaigner Publication and Fusion Energy Foundation was less than $300,000, or only one percent of the total debt that these organizations had acquired.
We will show you from the testimony of other witnesses that as a result of that, Alan Rither lost more than $100,000 that he loaned out of a trust fund set up by his father that he controlled.
We will show you that Lita Witt lost $10,000 in part because of the promises made to her by Mike Billington. We'll
show you that Cecillia Landeggar lost $25,000 in part because of the promises made to her by *** We will show you that Max Harrell lost more than $10,000 in part because of the promises made to her. Excuse me. Made to him by G ***. And Alan Rither, who I mentioned first, in part he was solicited for loans by the defendant, Dennis Small.
For their role in obtaining this money by false pretences, by making false statements in their solicitations, at the end of this case we will be asking you to return a
verdict of guilty against the defendants ****, Dennis Small, Mike Billington and ***
And for their role in supervising and directing that activity, we will ask you to be returning verdicts of guilty against defendants La Rouche, Wertz and Spannaus, and also for his role in setting up a system of being paid for his services which prevented any accounting of it being made to the Internal Revenue Service, we will ask you to teturn a verdict of guilty as to the defendant LaRouche on Count XIII for defrauding the Internal Revenue Service-
THE COURT: I don't know what order counsel want to go in. It doesn't make any difference to me, I will go in the order they appear on the indictment, but if counsel want to vary that, that's fine.
MR. GETTIWGS: I think we have a little order set up ourselves. Your Honor.
THE COURT: All right.
MR. GETTINGS: If I might, members of the jury, again, ray name is Brian Gettings. I represent Will Wertz, one of the defendants in this case.
Over the next several days, we are all going to hear and see essentially the same evidence, and by all, I mean everybody in the courtroom: Government lawyers, defense lawyers, defendants, j udge and of course you.
It's all going to be the same that we see, but we
are going to see it from different points of view, sort of like a glass of water, half empty or half full, depending on your point of view. You have just heard what the Government says the evidence is going to show from its point of view.
Now, you are not going to hear seven different versions of what the defense lawyers believe the evidence is going to show from their point of view. You are not going to hear the same thing told to you this raorning or this afternoon seven different ways. Each of us for sure will tell you what the evidence will show as to their specific client, his own client, again from his own point of view.
And then, each of us will handle one or more specific aspects of the overall defendants' case- So when 1 sit down, you will not have heard everything from our point of view, but when the last of us who is going to talk to you today, sits down, I hope you will have heard everything.
Now, it's my task to give you a general overview of what the evidence will show relating to fundraising as it relates to this case. But first, 1 would like to discuss with you two very important interrelated, general principles of law that everybody wants you to keep firmly in mind through1 out the entire time that you are hearing this case.
The first of these is that the Government has the burden of proof in this case, in any criminal case. The de fendants have no burden whatsoever. The burden is on the
Government of proving the guilt of each and every one of these defendants independently, independently, you must consider them singly, and they must prove that guilt by a very heavy burden indeed. It is a burden known as proof beyond a reasonable doubt. And what that means is that the Government must convince you, must persuade you beyond any reasonable doubt that any of you would have in your minds that they are guilty of what they have been charged with, that they are not innocent, which raises the second principle that I would like to discuss briefly, and that is, the presumption of innocence.
These defendants, each one of them, must be at this very moment.as they sit before you, presumed innocent in your eyes. And what it means is that without more, you can1t impugn a bad motive or a sinister purpose to anything, that you see or hear that they may have done or may not have done, j ust because they did it or didn't do it. You must presume that it was done with a benign or an innocent or a neutral purpose, unless
MR. ROBINSON: Your Honor, I object.
THE COURT: Mr. Gettings, you are getting to a point where you are really arguing your case,
HR. GETTINGS: Your Honor^we haven't heard of these two things yet.
THE COURT; I gave you some leeway on it.
MR. GETTINGS: I believe it or not -
THE COURT: (Interposing) I think you have exhausted
MR. GETTINGS: All right. May I simply say it's important in this case because what the case is all about is intent, the intent of the parties, the intent of the individual defendants at the time that they did the acts they are charged with,
Now, here's what the evidence is going to show you about Will
Wertz and his involvement in what I'll call a political movement,
which is the subj ect of this case. He is 43 years old. He was born in July of 1945. He is a genuine baby-boomer. He is bright. And he is thoughtful. He grew up uneventfully in New Jersey and he went away to a good school and he got good grades, and did well, well enough that he got himself a teaching fellowship at Harvard, where he intended to go for a Ph.D in English. Now, this was 1967 when he was graduating from college. Those of you who are old enough to go back that far will recall in the late 60 ' s, they were a time of turmoil on our campuses. The evidence, to refresh any of you who need to be refreshed, the evidence will show you that there were all sorts of radical causes around,
Now, Will Wertz wasn't part of any of these radical causes. They were around him, but he wasn't part of it. But
he gave up the fellowship at Harvard after a short time, and he went home and he took up teaching- He worked as a teacher for a time, but that didn1t fulfill him very much. So he tried something else. He tried a very decent and honorable araft, even though he had a college degree, he became an electrician. He worked for three or four years in New York
While he was doing that, he was doing a lot of thinking, and he was concerned about where he was, where he was going, what he was going to do, where the country was going and all of this now is the early 70's, and again, you had the same atmosphere in the country. He spend a lot of his spare time in what we will call cultural pursuits, studying , looking into history, politics, economics, all of this on his own. He attended lectures, and there came a time when he attended lectures which were given by Mr. Lyndon LaRouche, a co-defendant in this case. Mr. LaRouche had a lot of ideas * He listened to what Mr. LaRouche said. He liked, he was taken with the idea of doing something. He was doing something important, he believed, and therefore, after a time he j oined up with the political movement.
He devoted his full time and attention to this endeavor. He was in with a large group of like-minded supporters, if you will, of the ideas of Mr. LaRouche. That's what it is. That's what the group is. It's a grouping of
persons and entities, and I think the evidence is going to be clear to you, that had more or less common ideas and its goals and obj ectives are to get those ideas about economics, about politics and so forth out to the people, out to the public.
This group, movement, if you will, had no structure at all when you compare it to a political party, and certainly less structure than the Government would have you believe and told you it would show you in its opening statement. I don1t believe the evidence is going to support their view at all. But it had more structure than a bunch of people who j ust sat around and thought great thoughts. They did things. They published. They published books, newspapers, pamphlets, special reports, and what net; and they fielded candidates for public office.
Mr. LaRouche has been a candidate for the presidency of the United States three times- And Mr. Wertz, he was a candidate for the United States Senate. So those are the things that they did. But all of this costs money, as you well know.
Now, the evidence is going to show you that for a long time, throughout the 70 ' s, the cost of all this, the cost of publishing, the cost of getting the ideas and the thoughts out, and the cost of fielding candidates was being done on a relatively small scale; and it was underwritten aside from the campaigns almost exclusively by the sale of publications. There were small amounts of contributions from people who were willing to contribute to the cause, and for some short-term needs, they did indeed borrow money.
To give you an idea of what we are talking about dollarwise, since the Government said this case is about money and I'm not going to quarrel with that, in 19 79, the last year of the 70- ' s, the total income, proceeds primarily again from these publications sales was around $2 million; but in 1980, which was a presidential campaign year, and again, we are not talking about campaign funds. That is taking care of the candidacy of any candidate* That is separate from the organization, but because the candidacy attracted attention, the income of the movement, if you will, doubled to about $4 million and it kind of caught on, and by 19 81, it was up to $12 million.
I am not asking you to remember any of these numbers You will see the evidence, and it will be demonstrated to you by witnesses, but I am just trying to give you some idea that it was kind of small towards the end of the 70's. It experienced a period of growth dollarwise in the early 80 ' s, and then in 1982 and 1983, income increased even further, but not as dramatically as it had the previous years, but further over those years.
I think the evidence is going to show you that in the aggregate, over those five years, 1979 to 1983, the income
was about .$50 million. And most all of this was derived from the sales of publications and contributions, although again, from time to time they borrowed money, and indeed, as we went into 1983, they started borrowing a little bit more.
Now, 1984 was a presidential election year again, and Mr, LaRouche was again a candidate for the presidency. And this time the candidacy, which again I must stress was financially supported independently of anything that we are talking about here, separate campaign committees, but the candidacy gave the movement a great opportunity for increased national exposure and further growth.
Now, the Government says that at or about this time, the conspiracy or a conspiracy came into existence. The evidence will show, members of the j ury, that at worst, and with all the hindsight that we can dig up now in 1988, a bad business decision was made. That's at worst. But there was no conspiracy. And in order to take advantage of the potential for growth that came with the exposure that Mr. LaRouche was getting in the 1984 campaign, they indeed began taking on more and more loans.
Now, other income, the traditional income, that which would have been carrying them for all these years, from publications, primarily publications, also contributions, increased during those years, during 1984, and during 1985. There was no turndown. That continued, too, but so did loans.
They borrowed more money during that time than I think they should have.
Now, where is Will Wertz in all this? Well,, in the indictment, it's charged that in or about January of 1984, the defendant LaRouche promoted him, put him in charge of carrying out his, Mr. LaRouche's, directives relating to all fundraising on a national1 basis, first in New York and then later in Leesburg.
The guts of the fraud charge when you go through this kind of massive indictment here,the Government's returned you will see that the real guts of the charge is raised in two simple paragraphs,, paragraphs 18 and 19 of the indictment where it is charged, and I am paraphrasing but I am absolutely certain accurately, that Mr. LaRouche and Mr. Wertz and Mr. Spannaus directed and commanded Mr. Billington, Mr. Small, Mr. *** and Mrs. *** and others to raise funds by promising that the money loaned to the organization would be paid back at specific times and with specific rates of interest when the defendants then and there well knew that the loans would not be repaid in the manner prescribed or that the money, again the promises that the money would be used for a specific purpose, such as publications of a specific book or the funding of a particular proj ect when in fact the defendants knew that the moneys would not be applied in the fashion that they represented.
Now, there will be time enough later for me to argue or any of us to argue when all the evidence is in on those specific charges. They are the charges, and I suggest to you that everything else in the indictment as it relates to the fraud case j ust dresses that up. Those are the guts of the charge, and there will be time enough too for me to comment later on Mr. Werts' specific role in the fundraising. For now I am content to say and go forward on the hypothesis that indeed he had a role in it, and indeed, it was a supervisory one, because by 1984, the presidential year, the year when the borrowing increased substantially, he had been
associated with this movement for a long time, long enough to know its history, its ups and downs. He was senior. He knew about their finances and their ups and downs or ins and outs or whatever you want to call it, and he had seen this substantial growth in income, again from $2 million in 1979 to almost $16 million in 1983, based upon the sales of the publications.
And in his j udgment, in his mind, things were pretty good. There was no reason in his mind, none whatsoever on the horizon, for him to conclude that this positive trend wouldn't continue, and so it was throughout 1984, the loans increased substantially, the evidence will show that, but other income again from the publications and contributions, also increased, although again, not quite as Substantially as it may have in the past.
Now, expenses also increased. The cost of getting the message out, but that's a given, because you have to remember and keep in mind here, that this is not a business as such. This is a political movement. It was never meant to run at a profit. Break even was all they ever sought.
Loans continued to be made during 1985, although again early in the year, warning bells started to go off. You will see tons of memoranda and other written evidence that indeed by early 1985, the loan situation had become in the view of some people, critical, and people within the organization including Mr. Wertz became aware of this. But the evidence, the written evidence, the
same evidence that you will look at to show that they became aware of this will also show that they just didn't sit back, or they didn't walk away from it. The evidence will show an all-out sincere effort on the part of Mr. Wertz and all his co-defendants to lessen the dependence on loan income, on borrowing as a part of income and to start paying the loans back.
There is no way that you can come away from a reading of this mass of documentary evidence that the Government is going to put in in its case in chief without concluding that wherever they were, whatever got them there, they sure tried to turn it around, and they didn't walk away from it. A lot of lenders were patient. Most were, in fact. But some were not. And what could shape up, could have shaped
-tipindeed 'd-idn ' t shape .-ip-, as 'a-'run- 6"n>-tnIeIfen-k-' beAan.
Now, at this point in time, some people within the movement quit. They j ust quit on the movement, and they quit on the effort to turn things around and to cut into the arrearage. You will hear from some of the quitters. They are the Government witnesses, who would and did simply walk away from the whole thing. But others stayed on, including Mr. Wertz, because he saw that among other things, that other income, that income from publications was still increasing* And he believed, and he had every reason to believe, that it could be turned around.
You will see the evidence, and you should keep it firmly in mind, that during the years 1984 and 1985, when
the borrowing was the heaviest, still the
borrowing never came close to exceeding the other income. The principal source of the income was still publications out of some $60 million raised in j ust 1984 and 1985.
Now, the level of borrowing was reduced as these alarm bells went off and as people saw where they were and what the situation was; and it resulted it was reduced in the latter part of 1985 as a direct result of steps, concrete steps taken by Mr. Wertz and the other defendants who stayed on. The evidence will be clear that the dramatic downturn in the borrowing didn't happen simply by chance. It happened because these people heard the alarm bells and they responded
to them; and the situation started to improve significantly during 1986, because for one thing, the other income, the money from the publications, continued to increase.
Now, it had been steadily increasing every year since 1979 and 1986 was no exception, but the borrowing during 1986 decreased dramatically- By mid-1986, the worst appeared to be over. Because borrowing was cut, total income was in fact down that year, the first year that there was a decrease in total income since 197 9; but all other income, that is from publications and contributions, leaving out the loan income, actually had increased, and while they weren't out of the woods yet, to use another old cliche, and I seem to be full of them today, they had turned the corner,
During this entire period, 1985 and 1986, Mr. Wertz
with his supervisory role working on a daily basis with the individual fundraisers, believed that every single loan that was made, every borrowing that was undertaken, every representation that was made was made in good faith with the honest expectation that that loan would be paid back in full if need be.
Wow, let me give you j ust a word on that. Obviously a straight out contribution, with no strings attached, is better than a loan. And contributions were where they began and what they solicited first, not loans, and it was only when a person who was giving the money was reluctant to contribute
outright, that they then attempted to persuade that person to lend them money. But there is nothing wrong with attempting to persuade that person to forgive the debt. You will hear a lot of evidence in this case that indeed that's what happened. Sometimes it worked. Sometimes it happened-Sometimes it didn't.
Now, I mentioned to you earlier, that some of the lenders weren't so patient, and neither indeed was the Federal Government. I will leave some of the others coming along behind me to tell you more specifically about the role of the Federal Government in this. But the evidence that's clear is going to show you that by October of 1986, when things appeared from within to have been somewhat turned around, there were heads above water at least, in came the Federal Government with a raid on Mr. LaRouche's movement's headguarters in Leesburg that all but destroyed any hope they had of paying back the money. This increased their expenditures for among other things, lawyers.
Still, over 1986, overall income was still $20 million. So overall for the three-year period, 1984, '85 and '85 which is in the indictment, their overall income was about $90 million, and substantially, way substantially less than that, even in the heavy loan years, the heavy borrowing years of 1984 and 1985, less than half of that came from borrowing. In 19 36, the year of the raid, it was reduced to
approximately 20 percent of overall income.
Now, this is, was then, is now, not j ust a fly-by-night operation, in today, gone tomorrow. You are not going to hear any evidence in this case, members of the j ury, that even comes close to showing you that there was any fraud. You are not going to see any evidence that anybody got rich over this. The word "greed" isn't going to come into this courtroom, not rightly, at least.
But you will hear and see that even after the raid, okay, by which time borrowing had all but been but completely cut out, the raid had a devastating effect, and you will see that from .the income figures, that their income for a period of time right after the raid was cut in half. Even despite the raid and even despite a forced bankruptcy some six months later, which they were forced into, which they did not go in to voluntarily to duck out of, escape their debts or anything like that, and they weren't brought into it hy any of the lenders, any of the people whom you are going to hear as
witnesses here, even despite that, they bounced back, and they have, life even today.
So you are going to conclude at the conclusion of all the evidence in this case that things would be very different today if they had j ust been left alone.
In the past eight years, they raised the
aggregate of $15 0 million. That is not a fly-by-night operation.
$30 million, which is the number that the Government throws at you, is a lot of money. I won't gainsay that at all- But it certainly wasn't the whole thing that was going on in the world at that time with respect to this organization, this movement, whatever else you want to call it.
Now, I'11 address you again at the close of all of the evidence. I thank- you very much for your patience with me so far.
I will be talking then about the evidence that you will have heard.,n because it will be all in there by then. I expect it
to be j ust like I have outlined for you today. I will tell you
then as I am going to suggest now, but I will tell you then that the Government has fallen far short of carrying its burden of proof in this case, and I am going to ask you to return a verdict different from the one that the Government's going to ask you to return. I am going to ask you to return a verdict of not guilty as to Mr. Wertz and as to all of the other co-defendants. Thank you very much.
THE COURT: Mr. Reilly?
MR. REILLY; Good afternoon, ladies and gentlemen. My name is Michael Reilly. As you will figure out from my accent before we go very long, I am from Boston. I practice in a law firm there named Haussermann, Davison & Shattuck.
With me helping me out is Daniel Alcorn, who is a lawyer here from Arlington.
I represent , who is the gentleman in
the red tie here next to Mr. Alcorn with the red tie. If you could just stand up, Mr.
is from Long Island. He grew up there. He went
to Northwestern. He graduated in 1971 from Northwestern with a degree in j ournalism. In 1972, he became a member of the National Caucus of Labor Committees. He found it to be an organization that he was sympathetic with. He agreed with the political and the philosophical ideas, and he j oined, and he became an organizer. He has been an organiser since 1972,
What an organizer does, and you will get to see a
couple of them on the stand, is really three things: first,
they try to convince people that they should j oin into this
political movement. Secondly, they try to spread the ideas,
political and philosophical and social ideas of the movement,
and third, and this is what got sitting behind
me, they try to raise money so that they can fund the first two .
Now, Mr, Robinson told you that this case is about money. I am suggesting to you, ladies and gentlemen, it's not quite that simple, because this case is about the place where money meets politics. If you don't understand that there is
politics involved in this case, I would suggest that you can't understand the evidence in this case.
I am going to address you on the question of why
weren't these loans repaid? Mr. Gettings has told you that the defendants expected that the loans would be repaid. I am going to suggest to you, ladies and gentlemen, that the evidence will be the reason the loans were not repaid is because there were a series of unexpected attacks by a variety of organizations, including the Federal Government, which prevented repayment.
The evidence will be, ladies and gentlemen, that during the period of 1984, '85, '86 and into '87, the FBI, the Internal Revenue Service, the media outlets, including NBC and the New York Times and the Readers Digest, and State law enforcement organizations, powerful private organizations including very large banks, and the Antidef araation League of the E'nai Brith, all attacked this political movement and attacked these defendants.
Now, I am certain the first question that occurs to you.was, well, why are they doing that? Where there's smoke, there's fire. There must be something going on here. And I would suggest to you there was something going on. You will hear evidence about three things that were going on that suggests would cause these attacks.
First you will hear that the defendants, Mr. LaRouche and the other people involved with Mr. LaRouche, attacked the most powerful and strong forces in this country
in their belief that they had to try to improve . You wil"'
hear that they attacked the FBI, criticized them in very strong ways* You will hear that they attacked the big banks and made very serious and strong accusations. You will hear that they attacked the media outlets, and that they made all these attacks in the belief that they were attempting to improve this country.
And the question of Mr. Robinson is right. The question is not whether I agree with it, whether you agree with it, whether anybody agrees with the political viewpoints of the defendants. I would suggest to you the question is going to be what was the result of those attacks/ and secondly and the second matter that I suggest would prompt these kind of attacks is, you will hear the evidence that when Mr. LaRouche or any of the other defendants decided that somebody is doing something wrong or improper or even immoral, they are not shy about the way that they say it. The attacks and the political style of this organization, you will hear witnesses testify to it, is very harsh. They are not shy about criticizing in the harshest and toughest way very powerful people. And I would suggest to you that even at times, at times the evidence will be the attacks were obnoxious, I guess you could say, obnoxious. They really attacked people very difficult in a very hard way.
When you do that, the tendency, I would suggest, is the people who are attacked strike back, and then there is a
third factor as to why those people attacked would strike back, and that is that at just this time when all these attacks began or increased dramatically, this movement began to take off* It began to succeed. You will hear evidence that they began to develop very high top-level connections with the Reagan Administration. You will hear evidence that candidates in Chicago were elected to Statewide offices. You will hear that the Fusion Energy movement which the defendants were pushing, became very successful and began to get very prominent support among generals and among people who were high up in the defense establishment,
And you will hear, ladies and gentlemen, that it was at exactly that time that these attacks began- Let me give you some examples. Mr. Gettings talked about the raid in Leesburg, where 420 Federal and State officers came down and like a big vacuum took out every piece of paper involving money. And you will hear the effect that that had on the ability to raise funds.
You will hear, ladies and gentlemen, about the ability to raise moneys which the defendants expected and thought they had because of the security sales and security consulting they could do. You will hear that about this time in '83 and '84, because of the very high-level contacts they had, they were meeting with William Morris, who works for Mr. I always have trouble remembering this fellow1s name --
he works for Mr. Clark, who was the national security advisor to the president. Mr. LaRouche*s security people were meeting with him. They were developing these kinds of high-level plans, and you will see the evidence that they were selling their consulting services- Their consulting services were described as the finest private intelligence in the world, and they began to develop-business plans which you will see with the idea that because this movement is taking off and because we are doing such a good j ob, we can grow. It will allow us to take loans and repay them. It will allow us to continue to grow at the incredible rate that we have been growing.
And then you will hear why that didn't work,
because you will hear then that there was a series of media attacks, exposing the connections between Mr. LaRouche and Mr. LaRouche's associates in the Reagan Administration, and you will hear that the attacks were by a fellow named Dennis King, who has gone around for the last 15 years writing articles attacking Mr. LaRouche.
You will hear that as a result of those attacks,
the defendants' ability to grow, the defendants ability to
take off the way thought they would take
off when he was raising money, was undercut and was destroyed.
I suggest to you, ladies and gentlemen, that you will hear a lot of other evidence, examples where the
defendants' expectations were undercut.
Now, there is probably a question in your mind that says, well, that's fine, but are they j ust making this up now? Is this j ust an after-the-fact rationalization why they couldn1t do it?
Well, ladies and gentlemen, you will see the letters that Mr. LaRouche, that Mr. Spannaus sent to fundraisers at the very time these things were happening, saying the reason we can't repay you is because we are being attacked by banks, we are being attacked by the Federal Government. You will see over and over again from the witnesses on the stand that at the time it was happening, that's what the defendants were saying. The Government will try to introduce evidence and will try to argue that that was j ust a con, a scam. They were trying to stall people and lull people and they really didn't mean it.
What would be the evidence about what was in the defendants' minds when they said that? Did they mean it? Or were they just conning somebody?
Well, because of that raid that you have heard so much about, you have got an advantage because when they went into that raid, on that raid, totally unannounced and unexpected, they pulled out all of the most private, internal papers in this organization. They pulled out writings, papers, handwritten papers and typewritten papers of the
levels, meetings of this National Executive Committee that everybody in the meeting thought were going to be private* They
got a chance it's really unique to see into the minds of some of these defendants. When you get that paper, ladies and gentlemen, you look and see if you can find anywhere in it anything where any one of these defendants say, and they kind of wink at each other and say, we are j ust kidding. We are not really being attacked, and that's not really the reason we can repay. You won't find it.
What you will see, ladies and gentlemen, is that in their most private conversations, all of the defendants are scrambling around as hard as they can to repay these loans, and are saying to each other, the reason we can't do this is because of what the Government is doing to us, because of the attacks from the Government.
When you look at it from my client's point of view,
ladies and gentlemen, , who is not in these meetings
and who is not part of he does something different He is working raising funds. Why would he tell people that the loans will be repaid? What will the evidence be there?
Well, the evidence there, ladies and gentlemen, will be
that has been a member of this organization since
1972 and that when Mr. Curtis comes in, Mr. Hintz comes in "and Mr. Zoakos comes in who are members who guit, and when they come in and say that they formed the opinion in 1986 that
they just had to quit and fold the tents and go home and couldn't go on
any more, that had a reason to go on, that
had a reason to believe that this organization could keep
going. And that is because had lived through a series of
attacks from the time he joined the NCLC, he had seen them survive attacks like this before, and he had a reason to believe they would
survive again. So that his mind in 1984 and 35 and '86 was that, I
have to fight for what I believe is right. And I have to fight for what I believe are ray political viewpoints. And it's not right to j ust go over and quit.
In closing, ladies and gentlemen, I want to ask you to look at one more piece of evidence that you will see, to help you decide whether this case is about politics or money.
A fellow named Max Harrell is going to testify.
Unbeknownst to , when P was talking to him on the
telephone, he tape recorded the conversation. And unlike
every other witness who will testify here who borrowed
money, he won't have to depend on his memory, because you
will get a chance to hear raising money.
I ask you to look at those transcripts and see if
you can find talking about investments, or
rate of returns, or financial-type questions or see, and I
suggest this will be the evidence, ladies and gentlemen,
whether is telling Max Harrell about politics,
Harrell that this is a movement that he, ,
believes in and that Max Harrell should give this money because politically and morally it's the right thing to do.
Now, you may not agree that politically and morally it's the right thing to do and I may not agree with it, but
the point is, ladies and gentlemen, that's what this money was raised for, for politics .- And that's what this case is about, politics.
When the case is all over, I am going to ask you
to find not guilty. Thank you for your
attention and patience.
MR. CLARK: Ladies and gentlemen, my name is Jim Clark. I am an attorney here in Alexandria, and I represent one of the seven accused in this ".case, that's Mike Billington seated at counsel table behind me in the eye glasses and the tan suit.
Mike Billington once again is what the Government would call a fundraiser for this political movement. I would
suggest, Your Honor, members of the jury, that £.fers". not simple j ust to call these people fundraisers or leaders or put them into any particular niche. Each and every person in this case is an organizer who is committed to a very serious political movement that each and every one of them is very
much dedicated to.
As a result of that involvement, Mike Billington
46 is accused of three distinct acts of mail fraud and one charge of
conspiracy to commit mail fraud between July of 1983 and April of 1987.
I think it's very clear that those allegations revolve around Mr. Billington's solicitation of loans almost exclusively over the telephone from people who it will be demonstrated share the views and support the work that Mr. Billington has literally committed his life to. The fraud that the Government alleges is very, very simple. The Government bears the burden of proving beyond a reasonable doubt that at the time Mike Billington solicited loans from these individuals, he knew or had reason to know, number one, that the money that he was soliciting wasn't going to be used for the purpose he said it was going to be used for, or, secondly, that at the time he solicited the loans that he received, the money was not going to be paid back under the terms that were agreed to.
This case is not simply about money. It doesn' t matter if these loans were for one dollar or one million dollars . What this case is about as it pertains to Mike Billington is what was going on in his head at the time he made these arrangements with these particular people. Did he believe in his own mind that these people were going to be without their money.at the time they loaned the money.
If you believe that, then he is guilty, but the
fevidende will- show 'otherwise. ~Mike~BiTlington; and it's my task here today before you all to demonstrate to you exactly
what the fundraising process was. I think at the conclusion of that, you will understand what Mike Billington's intent, was when he raised the money that he raised.
It may already be clear to you that really to understand this case, I think that there are four basic questions that the evidence is going to have to answer. Number one is, how was money raised? The second would be, why was the money raised? The third is how did Hike Billington and others at counsel table behind me, expect to repay the money? And the fourth question is, why has it not yet been repaid?
Mike Heilly, a few moments ago, touched on why the money has not yet been repaid, and I won't endeavor to go into it further, I will endeavor, however, to suggest to you what the evidence will show in regard to the first three questions.
Now, at the outset, I think it's important for each of you to understand that although the evidence will show that considerable sums of money were loaned, it's important to understand number one, that the loan transactions that the Government talks about are not what I would refer to as your standard garden variety business transaction. I will go so far" as to say that without exception, each and every person that loaned money to this organization wasn't called out of thi
telephone book or out of the blue or confronted on the street corner. They were people who each and every organizer had
reason to believe was sympathetic to the issues and to the causes that were important to these organizers.
You will hear that there are many lists readily available of people who have in the past supported various political causes, even by1giving money, giving their time, reading certain publications; that's the basis for the fund-raising effort that Mike Billington and others engaged in.
So they were talking to people not just who were rich or just who might want to give money, but people who they thought might support their ideals and were sympathetic to them,
Now, most of the loan requests, or I'll say probably without exception, it wasn't a matter of calling someone up and saying, hi, my name is Mike Billington. I believe in what Mr. Lyndon LaRouche does. Would you please give us some money?
That wasn't the only purpose, or I'll say not even the primary purpose of the contacts that Mr. Billington had with members of the public. I would suggest to you that the evidence will show that in virtually every instance before any individual gave or was asked to give a cent or loan a cent to Mr. Billington or anyone else, that request was always preceded by a request to buy one or more of the publications,
buy a subscription to one or more of the periodic publications put out by these various organizations.
And make no mistake about it, the publications, some
were scientific, some were political, some were
economic. Each and every one of them was editorialized. it set forth the views of Mike Billington to some extent, to the organization as a whole certainly; but each and every person that was asked to give money was encouraged to read and understand those publications and hopefully embrace the ideals contained in them.
I think it will also be very, very clear that lenders knew that loans that they gave or contributions that they gave were for the purpose of promoting the ideals embraced by Mr. Billington and the organizations as a whole, that they weren't for the production of goods and services. Again, it wasn't a classic investment in a money-making corporation. It was an investment, and Mr. Gettings talked about being corny, but it's really an investment in the future of this country, plain and simple. That's how Mike Billington saw it, and that's why he devoted his life to it.
Now, it was also very clear to each and every person that Mike Billington talked to that loans were not the preferred way of raising money. He would ask people.to buy subscriptions. He would ask people if they were unwilling to buy subscriptions or unable to -- if they would contribute
money. If they couldn't or wouldn1t do that, he would ask them to lend money. It was very, very clear to each and every contributor.
I would say further that the vast maj ority of people who gave or loaned money were also advised of some-
thing else, and that is in no uncertain terms that these organizations were involved in a war. They were involved in battles with a number of the organizations that Mike Reilly, very powerful organizations that Mike Reilly referred to j ust a few moments ago. And it was a battle that there was no guarantee that they would win. But it was a battle that they would guarantee that they would stay in as long as each and every one of them was still standing. Each and every lender knew that at the time they loaned money to Mike Billington.
Now, to summarize, each and every loan that Mike Billington solicited or each and every phone call that he made had two purposes: number one was to raise money, and second was to organize support for the organizations that were so important to Nike Billington, to force those people to focus on the goals and obj ectives of those organizations and hopefully if they didn't already embrace them as their own.
Now, I think it's important to pause for a moment and understand how Mike Billington came to assume this role in this organization, and it' s important to understand that
as is the case with Mr. and Mr. Wertz, that you
have heard about already, he wasn't a Johnny-come-lately to this organization at all. In fact, upon his graduation from college in 1967, from Trinity College, which I might add he is a very, very good student, Mike Billington had a number.of
options available to him. He had a full scholarship in the business program Ph.D program at Columbia University Business School, He turned it down. He had an opportunity to attend Stanford Law School. I don * t suggest that that is the automatic ticket to great riches, but he turned that down, too.
Instead, he went off to Guyana .and j oined the
Peace Corps. He stayed there for two years. And he worked- He worked hard for no money. But he did it because he felt there were people that needed to be helped. Then he came home. He looked around, and he got a j ob teaching briefly, and then he did something not many people would do. He went back to the State Department and said I would like to reenlist for another two years in the Peace Corps. After spending two years in Guyana, he went back to Thailand and spent two years there. I might add at the time of the Vietnam War.
He didn't do it for money. He did it because there were people there that needed his help. And he helped them.
He came back here. I say came back here. He came back to this country in 1972, with an abiding concern for the
plight and the condition of the Third World of people in underdeveloped countries. And he set about to figure out a way to correct what he perceived to be some of the evils in this world.
Coincidentally, he again read some literature, heard some talks, some conferences, involving Mr. Lyndon LaRouche. He
found that Mr. LaRouche's goals and ideals coincided in some measure with his own, and he saw that as an appropriate vehicle to try to influence others to adopt his goals and ideals.
For the next ten years, Mike Billington worked really on a grass roots level, attempting to organize support during the decade from 1972 to 1982 - really 1981. He ran twice for local public office in Pennsylvania. He attempted to elicit support for
what were his and to an extent, Mr. LaRouche s views on national defense, the war against drugs, the importance of battling catastrophic disease, and the impact that the international banking community has on each and every one of our lives.
Now, again, although those ideas aren't particularly unpopular or weren't unpopular back then, they were certainly views that many of us were unwilling or unable to give much thought to. They are not the sort of thing that you could rally around and raise a lot of money around, but they were important enough to Mike Billington that he worked on them
for ten years basically for no money. He has forsaken material things. He is married, and he has no children. He has forsaken a lot of things very many people hold dear for the sake of his beliefs.
Now, in 1981, Mike Billington assumed a different job in this organization, and that was as a member of what .. will be referred to as the phone team. In 1981 and 1982 and early 1983/ the purpose of the phone team was pretty much what
the name implies. They would spend their time and their energy calling people who may be supporters of the organization, asking for support and explaining the views of the organization, asking for contributions, asking people if they would be interested in purchasing subscriptions, and the purpose obviously was twofold, to raise money to put out the word and to influence public opinion. It was j ust that simple.
And they did it with some success. During that period, loans were a very, very rare commodity with Mike Billington and the organization as a whole. Once in a while if there was a special purpose, someone might be asked to loan money on a short-term basis but nothing compared to what you will hear about during 1983, '84 and '85.
And there is a reason for that. Public awareness began to change in 1983, and there is some very, very good reasons for it. The things that Lyndon LaRouche and
Hike Billington believed in and had talked about for years and years and years and had dedicated their lives to, all of a sudden the general public started to take notice. The general public started to very closely scrutinize the methods of the people that wind the clock, the Wall Street financiers who had never been challenged before, all of a sudden became very suspect. People began to understand and believe in the vast wealth acquired by international drug dealers and the violence that those people perpetrated. People in the highest levels of the Federal Government began to endorse strategic defense
initiatives, beam defense, to you and me, star wars. But it was something that people had talked about on some visceral level, now it was becoming accepted, 19 83.
The AIDS epidemic, all o£ a sudden people began to understand. It's a very real threat to the existence or our world as we know it. Things that Mike Billington and Lyndon LaRouche had talked about among a very small core group of people for years. All of a sudden it had become publicly accepted. It was almost fashionable. And now, March 23rd, 1983, the President of the United States in a public speech to the whole country endorses star wars. A maj or architect of that strategic defense, beam defense, Lyndon LaRouche. Lyndon LaRouche. They talked about it for years. Now all of a sudden, everybody is talking about it.
Coincidentally, as Mr. Gettings told you, the year
is 1984, Mr. LaRouche is beginning his presidential campaign, what better vehicle to get the word out with his newfound popularity, newfound acceptance, now the guestion is how do we get the word out, and the answer is through the media, through the public, and of course it takes money.
You have heard that in 1984, late 1983, early 1984, the emphasis shifted from1subscriptions to contributions, to the solicitation of loans. It was the fastest way to get the money that was needed to put the word out. Hike Billington participated in that. There is no guestion about it. It's the same thing he had been doing all his life, trying to get the word out.
Now, I will say this, in late '83 through 19 84, this
organization experienced a geometric growth, not only in support, but in income, much of which came through loans. Now, and in the beginning, I would suggest to you that they weren't prepared for that sort of growth. Mike Billington was soliciting loans. The regional phone team there are several regions throughout the country who had phone teams who would solicit loans, solicit contributions. They weren't really, didn't have a cogent game plan right at the beginning to deal with what for ten years had been a grass roots organization, now was growing. Each region attempted to deal with their own loans, organize them and get them repaid, get them on the books, and for the first few months, the left hand
didn't know what the right hand was doing. It became a bit disorganized. Certainly, that does not envision an intent on anybody1s part not to repay. Bad business, maybe. Criminal fraud, not even close.
I would suggest to you the very real, very rapid and very effective measures were taken to correct that initial disorganization. In fact> in early 1985, loan repayments, loan organization was centralized at a national office of the organization here in Leesburg, and every effort was made to organize a cogent plan for loan repayment.
Well, I would suggest to you that also in the spring of 1985, as you have Aearid, and I will not go into it in any further detail, the decision was made that the organization had grown. It was popular. And now it was time for the
organization to become self-sustaining. A maj or emphasis, you will hear, was placed on the reduction of the loan ceiling Very stringent ceilings were placed on loans and with a view that it would drop from perhaps 4 0 percent o£ total income very rapidly within six months down to 20 percent, eventually down to zero, with the idea being that because of the popularity of the organization, that income would be more than made up in subscription sales, contributions and perhaps most importantly what Mike Billington and other believed would be some very, very lucrative Government contracts, both from the United States Government and from foreign governments
for a gathering of intelligence, consulting on scientific matters, and a number of other very, very important for-reaching proj ects which are completely consistent with their goals and ideals.
Now, again, as you have already heard, and I won't go into it in any particular detail, in 1986, things began to go downhill. Not something that Mike Billington knew and certainly it's not something that he expected in 1984 and 1985 and early '86, when he was soliciting loans. I think it's a particular irony perhaps of this case, that one of the maj or problems that the organization faced was that j ust as Mr. LaRouche's unsuccess ful 1984 presidential campaign, I say unsuccess ful in that he didn't get reelected, the successes that the organization enj oyed perhaps led to their current situation.
In 1986 in March, two candidates who espoused the views of these organizations were victorious in the Democratic primary in
State elections in Illinois. That sort of success that challenged the establishment, I would suggest to you, the evidence will show, brought forth a rash of negative publicity. Mike Reilly has told you about the raid in October of 1986 that basically wiped out their books and their office.
They were victims of their own success, and they continue to be victims of their own success. I would suggest
to you again Brian Gettings used the word quitter- There will be some quitters who will testify here. Mike Billington is not and never has been a quitter. He has got very, very strong beliefs that he had and continues to hold. I would suggest to you that among the beliefs and the values that Mike Billington holds, thievery, fraud and deceit are not among them.
At the conclusion of this evidence I would suggest that you too will be convinced of that. And will return a verdict of not guilty. Thank you.
THE COURT: We will adjourn until 2:30 for lunch. Again, as I told you I would, I admonish you that during this and any other recess or adj ournment, you are not to discuss the case with each other or with anybody else or allow it to be discussed in your presence. You should not form or express any opinion on the outcome of the case until you have heard all of the evidence and received the charge of the Court.
You need not stay together during lunch,
but obviously don1t discuss it.
Court will stand recessed until 2:30. (Whereupon, at 1:30 o'clock p.m., Court was recessed, to reconvene at 2:30 o'clock p.m. the same day.)
Monday, November 21, 19 88 2:30 o'clock p.m.
THE COURT; The three of you jurors are not
relegated forever to those front seats, if you can get some of your fellow jurors to swap with you during the case.
All right, Mr. .Williams.
MR. WILLIAMS: May it please the Court, ladies and
gentlemen of the jury. My name is Edwin Williams. I repre
sent Mrs. . Her married name is
(phonetic) now, but for the purposes of this case, and for
the purposes of the time period that we are dealing with in
this case, she has no obj ection to being referred to as
Mrs . R
Mrs. R , would you stand up, please.
Like many of the other fundraisers, Mrs. R
was a child that grew to maturity and college age during the Vietnam War. She had been raised in South Philadelphia by a family who had been immigrants to this country, and she left there and went off to college, and while in college, she was
exposed to all the ideas and turmoil that occurred in this country during the Vietnam War. And as a result of her studies of philosophy and economics and things like that that she was exposed to in college, she began to search and listen and try to find out what her political philosophy was and what
political philosophy would adhere to for the remainder of her life.
And while she was in that stage of her life, that impressionable years, that kids go through while they are in college, she was exposed to Lyndon LaRouche and his ideas; and she, like the other persons who are charged with these offenses here, believed and began to believe in those ideas and j oined the political movement that was centered around what is called the NCLC, or the National Caucus of Labor Committees.
She first started out in this political movement as an organizer, as a grass-roots organizer, because any political movement has to have the people out in the streets and in the homes, because that's where they get their money. That's where they get their support. That's where they get their votes. And so she began to organize in Rochester, New York, and out in that area.
She not only organized, but she taught college at little classes they would have or at seminars, and she was also she is also an accomplished musician, so she would teach music and she would perform in places, and she would
do whatever she had to do to try to get people into this political movement and to support it, because she believed in it;' and she believed in those ideas that my colleagues have talked about. She believed in the doing away with the dope
scourge; she knew as a college student that there was dope on the campuses and drugs. She knew or at that time she was concerned about the defense of this country; and she, as being a child of the Vietnam War, knew that she didn't want any war. When Mr. LaRouche and others came up with the ideas of the SDI or the star: wars, she began to believe in that. And she read about it, and unlike many of us who do not really spend much time in these issues, she became devoted to those.
Her devotion to those issues and that political program and that political movement caused her to get into eventually fundraising.
The evidence will show that she is a gregarious person, and she likes people, and she did very well at fund-raising . She wasn1t fundraising like you would expect persons charged with this kind of crime to be fundraising. I mean, she wasn"t selling oil wells out in Oklahoma. She wasn't selling land down in Florida that was under water. She was selling, as the other defendants in this case who were fundraisers were selling, they were selling a political idea. They were selling ideas that they believed in because they were dissatisfied with the way this country was being run.
Unlike some of us who sort of sit back and kind of go along and see what society brings, these people were devoted to changing society. And as any party that comes up and tries to change society, as history shows, history back in
1776, in the early "70's, there was a group of radicals then and radicals back in the late 1700's that eventually changed the
THE COURT: (Interposing) Mr. Williams, this is a closing argument you are giving us.
MR. WILLIAMS: Very well, Your Honor.
Anyway, she and1these others who believed as she did began fundraising. She was then put into the New York office, the regional office in New York City during the period of these charges here, the conspiracy charge which she is lumped into and these two substantive counts that she has with regard to Mrs. Sexton and Mrs. Landeggar.
Anyway, she was put into the New York office and began fundraising through one of these phone teams. The evidence will show that in late 19 that the money began to be collected primarily initially for the '84 presidential campaign of Mr. LaRouche, the money in this conspiracy that we are dealing with. As the campaign wore on and as more money was needed for the television spots and the various things that the movement was doing to try to get their candidates elected, not only Mr. LaRouche but other candidates, that more and more money was needed, and having
been in the movement, Mrs. R , the evidence
will show, got into the movement in the early to mid-70 s and having been in the movement at that time for almost ten years, and having gone
through the various problems that they had, she knew and she believed that they were growing, that they would continue to grow, and that they would be a viable movement, able to pay back the loans that she was soliciting.
And these telephone calls that she made, she made representations that she believed in, and that she had no reason not to believe in.. And that in making those representations in the context that she was making them, she was not making any misrepresentations, any fraudulent statements, or any deliberate and willful misleading of persons from whom she was soliciting these moneys.
I think an example will be brought to the fore
quite soon. The Government has indicated that Mrs. Sexton,
one of the person from whom Mrs. solicited money,
will be one of their first witnesses. It will be important to listen to the testimony that will be brought forward and make your determination as to what was in the mind of Mrs.
at the time that she was making these solicitations to Mrs. Sexton. Did she know, or have reason to believe, reasonable reason to believe in the context of that situation, that she was violating the law or that she was making these misrepresentations intentionally?
And that basically is the case with regard to
these fundraisers, I mean it's trying to get into their heads and trying to determine what their intent was at the time these
loans were solicited.
I suggest to you, ladies and gentlemen, that the
evidence will show, the evidence will show that in the context of the situation of this political movement, of this belief in America and belief that they were making investments in America, they, the defendants in this case, because they were not selling these loans on commission, they were not benefiting monetarily by these loans. They were promoting ideas. They were selling ideas. They were selling a political movement, and selling politocal programs, because of their deep, deep belief in this society-
Now, we may not agree with them. We may not agree with them, but you have to respect their right to go about promoting a political movement so long as they didn1t violate the law.
We suggest to you that they didn't violate the law,
and at the conclusion of this testimony, at the conclusion
of all of the evidence in this case, I will stand up before
you again, and I and the Government will talk about the
evidence to you, in light of our respective positions. I
will ask you at that time to return a verdict of not guilty
against Mrs- on all counts that she is charged
with, three counts, on all counts, as well as the other defendants.
THE COURT: Yes, sir?
MR. ANDERSON: Good afternoon, ladies and gentlemen.
My name is Odin Anderson. I am counsel for Lyndon H. LaRouche Jr.
My associate. Bob Rossi, Robert Rossi, will at certain occasions during this trial possibly be here when 1 won't. So it's important that you recognize him and what his function is. We are in the same office in Boston. I tell you that, as Mr. Reilly did, because I think my accent will probably give me away sooner or later.
My j ob here is to speak for Mr. LaRouche. We all have a j ob, and yours is slightly different. Your Job, ladies and gentlemen, is not to like Mr. LaRouche. It's not to share his ideas. You might. You might not. It's not to do anything but keep the pledge you made to Mr. LaRouche and to the rest of the defendants in this case, and that is to keep an open mind, and give him a fair trial.
I have essentially four issues that I wish to address to you in terms of what the evidence will and will not demonstrate in the course of this trial.
First, I would like to address who is Lyndon H. LaRouche, Jr.? He is a man, ladies and gentlemen, 66 years of age, who in many ways is no different than any other human begin. He puts his pants on one leg at a time. He bleeds when he is cut. However, there are some fundamental differences between Mr. LaRouche and the average citizen if you will, because he made a commitment some years ago to
follow a course of life and to dedicate his life totally and completely to a set of philosophical and political ideas and ideals which required a 100-percent commitment. There is in his life, ladies and gentlemen, no distinction as there are in most of ours, between work and play. There is no distinction between night and day. There is no distinction between weekends, holidays and work days.
For Lyndon LaRouche, because of what he has chosen to dedicate his life to, there is no time for anything else. He works between 12, 15 and sometimes 20 hours a day. He works in circumstances ..which I think most of you will find horrific and certainly lives a lifestyle by force of necessity which I think all of you will ultimately say, thank God, I don't live that lifestyle, but thank God someone does, because in fact, whether or not you agree with his conclusions on various issues of philosophy or politics or the values of Western civilization, I think you will conclude that it's important to believe that strongly.
Mr. LaRouche was born in Rochester, New Hampshire in 1922. He lived there for ten years or so and then moved with his family, who are very devout Quakers, to Lynn, Massachusetts, which was an industrial shoe manufacturing town. His father was engaged in the business of management consultant, particularly within the shoe industry.
Mr. LaRouche went to the Lynn public school .system
and ultimately attended Northeastern University, which is a fairly large university in Boston for some period of years, and ultimately -- by the way, I should say for any of you who haven't recognized Mr. LaRouche and I know it's a normal and reasonable thing to do to look around and see who this horrible man is that the Government has said has done all these evil things. Mr. LaRouche is sitting Mr. LaRouche, would you stand up, please, sir .
In the normal course of things, Mr. LaRouche during the course of World War II, joined the military and served honorably and was discharged honorably in the Asian theater, as many, many other Americans and other citizens of the world did during that war.
In or about 1954, he moved from Lynn to New York City, and began to engage from New York City in various jobs of the same nature that his father had, managment, industrial consultant. He did that for a period of years, but he didn't do it -- he did it to keep body and soul together, if you will, as the evidence will demonstrate and not because this was something which he wished to dedicate his entire life to, and he had at that time a growing sense of the critical nature of taking action on certain things that he saw as being as compelling action and compelling not only action in terms of writing but action in terms of dedication.
And during the period of the 60"s that many of my
brothers have, when I say brothers, that is a term we use to refer to our fellow attorneys, brothers and sisters that many of the other attorneys have mentioned, the 60's was as I think you all will recognize either from your own experience or from the experience of friends, siblings or others, a very turmulous time in the United States and elsewhere.
There were a number of things going on in the country, politically and otherwise, which were not only of moment at the time but have been significant in determining the course of American events since then.
One of the things that was going on as you might well recall was what was called the development of the so-called new left, represented by among other things the Students for a Democratic Society. This new left and SDS stood for a series of ideas which Mr. LaRouche found not only distasteful personally but threatening to the best interests of the United States.
As a result of that, he began to engage on
college campuses around the country and any other location where he had the opportunity to lecture on economics, to present a critical analysis of Marxist economics, to point out the dangers of the set of ideas which the so-called new left stood for, and in the course of that period of time and more than anything else, to try to draw from that movement, whichyAas essentially overriding all of our campuses, as many
69 talented, idealistic young people as he possibly could to
redirect their lives along courses which were more consistent with the value system of Western civilization and not its overthrow, as he believed the new left in fact stood for and proposed.
In the course of that activity, it essentially worked from inside, he and a number of his friends at that time, in fact, formed within SDS what was called the labor committees. The purpose of forming the labor committees within SDS was to in fact fight a fight within the heart of the beast, so to speak, over what direction the student movement should be going; and among other problems that that presented, you might remember that there was another so-called faction of the SDS, referred to as the Weathermen, which was a violent faction
MR. ROBINSON: Your Honor, I have to object. MR. ANDERSON: The evidence show -THE COURT: Wait just a minute, Mr. Anderson. MR. ROBINSON: I fail to see the relevance of all this to the charges.
THE COURT: A limited amount of it is fine, but we have had more than a limited amount of it.
MR. ANDERSON: In any event, ladies and gentlemen, the National Caucus of Labor Committees was formed, which you have heard evidence on, the relevance, I suggest to you,
ladies and gentlemen, is that you have &©ard the Government suggest that the National Caucus of Labor Committees is in some way a vital consideration for you in the context of this
trial, and it was formed by Mr, LaRouche and others of like mind on political and philosophical issues in the manner which I explained.
But it didn't stop there. Essentially, the new left fell apart, and Students for a Democratic Society fell apart and disappeared from the scene, but the National Caucus of Labor Committees did not. In fact, it was constituted formally at about that isime as a membership organization, in fact, a dues-paying membership organization, with a relatively rigid and limited membership. It became over the years something quite different. In fact, it evolved over a period of time into an unrestricted nonmembership, nondues-paying association of persons of like mind as to political and philosophical issues. And that is in fact what the evidence will demonstrate what it is today. It is to the extent that ! it exists as anything more than an association whose membership is constituted by those who share ideas, expanded to become what's referred to as the International Caucus of Labor Committees, which is a broader group, which incorporates like-minded people who share those goals and ideas from around the world. There in fact are in other parts of the world, in Europe and in Latin America, very active activities that
are ongoing to some degree under the at least with the sponsorship of this International Caucus of Labor Committees.
So, the tenets for which, the evidence will demonstrate, for which this National Caucus of Labor
Committees stood, were relatively simple in some ways, although far more broadspread in others, that they essentially supported the development' of technology through industrialization in the United States, and the reform of international financial institutions,if you will, such as the World Bank et cetera around the world which they believed was in fact creating a condition of perpetual poverty for persons within the Third World and a situation from which the Third World could never emerge and essentially proposing an alliance between the United States and these developing countries in a trading relationship and a mutually beneficial relationship.
Now, that caused some problems- These problems, you might say, why did that cause problems? Because these ideas were to some degree inimical -- excuse me, I'll try a different word were opposed by very powerful forces within the United States, This was not the agenda that they proposed This was not the course of development that they supported, and therefore, those who supported a contrary view were perceived by them to be enemies.
That's the perception which in fact the evidence will show was directed towards the National Caucus of Labor
Committees by a number of groups. We won't go into that in detail now, but at the same time that there were a number of enemies, you might recall the enemies list during the Nixon Administration, the enemies list. You might say that Lyndon LaRouche is on a number of people's enemies list,
However, he is also on a number of people's Christmas
card list. I don't mean that facetiously because in fact over the course of years, Mr. LaRouche has traveled internationally and met with the heads of state, finance ministers and various other persons of significance within many foreign countries, particularly in the Third World, and he is considered a friend, an associate in the sense of sharing similar ideals, and generally respected.
When I say Mr. LaRouche I am not just Mr. LaRouche, but those other individuals that are associated with him who have in fact undertaken similar activities, and h has many people around the world who support him for these reasons and for others, his proposals for scientific development, his proposals just on a slightly different note, the National Caucus of Labor Committees and Mr. LaRouche particularly have a strong sentiment in favor of the classical arts, and in fact have engaged recently in a debate, ; discussion that's been going on in Italy over the retuning of music so as not to destroy the human voice. Most of us who aren't into music don't really understand what it's all about,
but let's leave it at saying that those people who are, the opera singers and divas around the world, who are in fact concerned not only with their own performance but with music in general have flocked to support this retuning.
Among those who do not support Mr. LaRouche and the ideas he stands for are conspicuously in addition to those I have already mentioned,- the Soviet Union.
The Government has told you, ladies and gentlemen,
that they allege this and they allege that, and that the evidence will prove this and the evidence will prove that. Then when you have heard it all, you will be compelled to a conclusion of conviction. Well, I suggest to you, ladies and gentlemen, that that is not the case, that the evidence will not prove what the Government suggests it will prove. It wil prove something quite different.
As an example in the context of the fraud conspiracy the Government has alleged that Mr. LaRouche is the leader and in fact was the center of the conspiracy to perpetrate a fraud.
The evidence will demonstrate, ladies and
gentlemen, that in fact, Mr. LaRouche is quite remote. You will hear from a number of witnesses exactly what he does during the course of a day, the details which support my suggestion to you that he is a compulsive worker and a prolific writer.
There will be materials presented to you which will
be only a portion by way of demonstration of the volume of writings that Mr. LaRouche has produced over the relevant period of time. You will also hear that contrary to the Government's assertion that Mr- LaRouche had
fingertip control over this organisation on a daily basis, that
in fact during half the year, he isn' t even in the United States, that he is traveling abroad. He resides -- his wife is a German national. He resides in Germany with her and engages in other travels of a political nature during a period that approximates half of each calendar year and has done that consistently during the entire period of time that the Government alleges to be relevant.
The Government suggested or said that Mr. LaRouche appointed Will Wertz to a position on the National
Executive Committee. Well, the facts, ladies and gentlemen, as you will hear them from the sworn testimony of witnesses, is contrary. There is no appointment to the National Executive Committee. A position on the National Executive Committee of the National Caucus of Labor Committees, the evidence will demonstrate, results from a vote of the entire body of the National Caucus of Labor Committees at an annual meeting. There is no appointment. Mr. LaRouch has no appointing authority. He is not the dictator. He is not the president. That's the kind of mis-characterization which I think you will come upon in the
context of this case over and over again. The evidence will not prove what the Government wants it to prove.
In addition, on the fraud conspiracy, the
Government has suggested that in some fashion, LaRouche was responsible for the financial difficulties that the organization found, that this organization that they refer to as the so-called LaRouche organization, found itself in at a certain period of tiine was not only of his causing but that he in fact was the person who said, go out and borrow money. Well, the policy to take loans at various times under various circumstances was one known to some degree that Mr. LaRouche
there is no question about it. It was a policy which in fact had worked effectively and had resulted in repayment over a period of course prior to the dates in question.
Once the difficulties became apparent in '85 and 186, because of those forces which Mr, Reilly addressed and which you will hear developed in some detail during the course of the trial, in fact Mr. LaRouche said as often and as loudly as he could to anyone who would listen,, we have to curtail loans; and the Government knows it, because it's in documents that the Government has and that we have to ultimately terminate loans because it's not the way we should be doing business. I'ts not the best way. We want to sell literature. We want to seek contributions but we don't want to build a debt structure.
It' s there over and over and over again, and they know it. They didn't tell you that. You will hear it from the witnesses.
He also said, as often and as loudly as he could to whoever was listening that those such loans as we have must be fully repaid, because after all, the persons who loaned us this money are our political supporters. They are our friends They believe in what we believe in, and that's why they lent the money. And you don't not repay political supporters. He said his words, "That's suicide." And the Government knows he said it.
The tax conspiracy, ladies and gentlemen, is my
principal focus here, the allegation of a tax conspiracy. The Government alleges that Mr. LaRouche and others unnamed conspired to defeat the lawful purposes of the Internal Revenue Service in the determination of an possibly collection of taxes due by Mr, LaRouche over the relevant period of time. They don't charge a tax evasion. They don't charge a failure to file, failure to pay. They don1t charge a single subtantive tax offense. They charge a conspiracy with persons unknown or unnamed. And this conspiracy was supposedly contemplated and consummated in an effort to avoid some tax implication. The Government suggests that Mr. LaRouche and others decided to hatch an evil scheme to avoid paying income taxes on salaries. On fact, ladies and gentlemen, the
evidence will indicate to you that evil schemes are hatched
in the dark, not in the light of day.
Mr. LaRouche has been candid and on the public record under oath and otherwise over the entire period of time and before it, in question as to precisely what his tax situation is and is not. He has never tried to hide from the Internal Revenue Service or anyone else for that matter what his tax situation was. He has said publicly that he has not filed a tax return during the period of time in question. He said why, because I have no income. I am not required to file because I have no income such as would subj ect me to taxation.
And he had a good-faith belief that that was true.
Now, it sounds everybody pays taxes, I hear you say to yourselves. Well, the fact is there are certain circumstances in which a person is not obliged to file or pay taxes . I suggest to you when you hear all of the evidence that you will conclude that the situation in which Mr. LaRouche finds himself and has during the relevant period of time is exactly such a situation. Nothing much has changed in terms of his life.since those days in the 60's when he lived in a walk-up in Greenwich Village in New York, sharing food with his friends with enough money in his pocket maybe to take the subway to the free university or without having to rely on or hit on one of his colleagues,
In fact, that is the change. That was the direction
that Mr. LaRouche chose and felt compelled to follow in his life, not to pursue a more routine and normal lifestyle where one hopes to buy a house or hopes to buy a new car or hopes to save for their children's education or hopes to get the summer place or take vacations. None of those factored into the life of Lyndon LaRouche. Those were never and are not and have never been during the relevant periods of time considerations in his mind.
Now, it's not to say that they are wrong. Of course they are normal* Most of us have such concerns. I know that I do.
But in fact, what changed for Mr. LaRouche from such time as I think there would be no contest as to the fact that he had no taxable situation was that during the course
of certain activities of the National Caucus of Labor Committees beginning around the period when they were fussing and fighting with the Weathermen, that he began to be in a threatened position. The Weathermen were known as a violence-prone organization, and the Weathermen were declared to be hostile to LaRouche and the other persons in the National Caucus of Labor Committees and in fact there was a level of physical threat to him whenever there was someone from the Weathermen around.
As time passed, and in fact that began to require even as early as that, some special precautions against harm.
Friends would stay in his apartment with him and travel with him, walk with him when he went one place or another, take the subway with him when he went to the university, lest he be alone in a situation when harm could come to him. That was of course completely voluntary and done as a matter of friendship.
However, things.got more complicated as time passed, There was a period of time in which the National Caucus of Labor Committees was in a dogfight with, the United States Communist Party, the Communist Party U. S. A., when in fact, the evidence will show that various functions of the National Caucus of Labor Committees were violently disrupted by the Communist Party and on one occasion at least Mr. LaRouche and several of his friends had to literally fight their way out of an auditorium to avoid some dire potential
As Mr. LaRouche became involved, and I think
controversial is not a word that any of us will disagree with in terms of certain of Mr. LaRouche's policies, not to mean that that means that there is something implicitly bizarre about them, simply to suggest that they create controversy, that there are persons who are very strongly committed against those policies.
Whenever you find yourself in such a situation, depending on who those who oppose your policies are, your physical safety becomes a far greater matter of concern; and
in fact, among the policies which has created a life-threatening situation for LaRouche are his and the activities of his colleagues in the publication of a book called Dope, Inc., and other activities around the war on drugs, in which names were named and fingers were pointed at various persons and banks and entities involved in the international trafficking of drugs and the laundering of drug money.
Now, you can imagine how happy those people were who were involved in that to be named in the book and have a finger pointed at them.
There is j ust one activity that I would like to mention to you in conj unction with that war on drugs. The evidence will reveal that Mr. LaRouche and certain of his colleagues who were working, particularly Mr. Small, or among others Mr. Small, were engaged down in Latin America
in liaisoning with various Latin American
countries in an effort to create a more effective war on drugs.
MR, ROBINSON: Your Honor, I am sorry, Your Honor. I have to obj ect again. I think we have gotten too far afield again.
THE COURT: Objection sustained.
MR. ANDERSON: In any event, we'll save that for the evidence.
THE COURT: I don't want to mislead you that that will be included in the evidence either.
MR. ANDERSON: Well, we'll see what is relevant in evidence when the time comes, I assume.
The Government, implicit in a conspiracy to avoid or cover-up or impede the function of the Internal Revenue in its determination and collection of taxes is the fact that some tax would be due if facts were known. Well, as I said, Mr. LaRouche believed and.believes as he stands and sits in this Courtroom today, that he had no taxable income nor an obligation to file during the relevant periods of time because he had no income. He was essentially, in fact one might say a guest or alternatively a prisoner in various locations that were created for purposes of safeguarding his welfare, physical welfare, and those of other persons who a safe house, if you will; and that he was moved around from one place to another as security requirements required and, in fact, he never received a dime of salary. Even the Government
is not suggesting that LaRouche tried to line his pockets, that there are any secret bank accounts, that there is any cash hidden away anywhere, or there are any extraordinary luxurious clothing or rings, diamonds, j eweIs, or anything else bought with this money that is in question.
So the -- and in fact Mr. LaRouche consulted with professionals in regard to whether or not his assessment of his circumstances was correct. And those professionals that he consulted with directly, or who were consulted with by
colleagues of his who raised the same issues, said "Yes, given what I understand to be your circumstances, your living circumstances, it is a reasonable and defensible posture that you have no obligation to file an income tax return, because you have no income*"
And you will hear from witnesses who will testify to that sequence of events over the period of years .
You will also, ladies and gentlemen hear from an
expert witness, an accountant, a CPA, who works for one of the maj or Washington accounting firms, who will testify, among other things, that even if Mr. LaRouche was wrong in terms of his theory of no obligation to pay or file, that he was right anyway because --
MR. ROBINSON: Your Honor, I object to that. I don't think any expert can testify as to the correctness of Mr. LaRouche's state of mind.
MR. ANDERSON: In his opinion.
THE COURT: Objection overruled.
MR. ANDERSON: I am sorry, Your Honor. I didn't hear you.
THE COURT: Objection overruled. MR. ANDERSON: In his opinion, based on his analysis of the records, the same records the Government has by the way, that in fact the closest analogy, and now we are talking in an anomalistic situation -- a square peg
Mr. LaRouche in fact with reference to the Internal Revenue Code is a square peg in a round hole. He doesn't fit neatly. It is a gray area. It is a very complicated area.
But this accountant will tell you that even if Mr. LaRouche were treated in one of the conventional modes that are recognized by the Internal Revenue Code, which likes to see things as employer, or employees, neat distinctions, average usual distinctions, that even if Mr. LaRouche were treated within the context of the Code, that the closest the Code comes to an appropriate classification would be an unpaid employee. And that in that context, there are deductions that are provided for specifically by the Internal Revenue Code which would cover.
The Government alleges that LaRouche lives in a lavish estate in Leeshurg, suggesting that that is his estate. It is not owned by him, ladies and gentlemen. It is a multipurpose facility used by many members .-of 'the National Caucus of Labor Committees for a variety of purposes. It is a safe house where Mr. LaRouch and occasionally his wife and other persons stay when they are in need of a. secure
environment in which to work. It is where he works his 20 hours a day. The only portion of that house which could be considered to be Mr. LaRouche's from a tax perspective, in other words what is his exclusive use, is a small bedroom area where he sleeps. Even that is probably not exclusively
attributable to him, because he also works in that room, and reads in that room, and engages in activities which are at least partially business, but basically it is his bedroom and he sleeps there. If he is an employee, even that portion, since it is, and he will explain to you what the Code says. The Internal Revenue Code, and I will leave it to the accountant because I have,never understood it and don't to this day, but we'11 let the accountant explain, hopefully in layman1s language, so we can all understand it, but what he will tell you ultimately is, given the Government's theory, which we don't accept obviously, but even if Mr. LaRouche would not have risen to in terms of those benefits which he received which are attributable to him to the point where he would have either been required to file an income tax return during any of the periods of time alleged, and certainly since he didn't have to file he would not have had to pay anything.
So, what we are left with is the Government I suggest, those will be the facts is the Government's suggestion that somehow and for some reason there was a conspiracy to accomplish an end which never needed to be accomplished. It is ludicrous.
It points out the essential weakness of the entire Government's approach to the facts of this case.
MR. ROBINSON: Objection, Your Honor. I think this
THE COURT: Objection sustained.
MR. ANDERSON: I have two brief areas, ladies and gentlemen, and then I am finished.
While the Government, aside from the two specific conspiracies the Government has alleged, the Government has suggested generally that the NCLC itself is a conspiracy. The National Caucus of Labor Committees presented as the hereditary root on which these other conspiracies depend and are constructed.
You will hear from prosecution witnesses such as Steven Bardwell, and possibly others, that Mr. LaRouche was a so-called authoritarian personality. The prosecution identifies LaRouche's function and views as the kernel of the conspiracy, this overall conspiracy, and they allege that he was the leader of it, and that every intent and action charged is the fruit of that conspiracy.
Well, such a conspiracy theory isn't new, as a matter of fact it was formerly called the authoritarian personality and was developed in Europe during the 1930's by a bunch of disgruntled Marxists.
MR. ROBINSON: Objection, Your Honor.
THE COURT: Objection sustained. This is not proper opening statement.
MR. ANDERSON: Your Honor, I suggest this would be
the testimony ©Etmt&essesAantiAsuppQfctscl fey..,the,->teatlmoriy of witnesses.
THE COURT: I am not going to go back into the early thirties in opening statement or in the testimony of witnesses.
MR. ANDERSON: In any event, the - think about, ladies and gentlemen, the.broader allegations that the Government makes in terms of what they say the National Caucus of Labor Committees is implicitly, and why they are saying that. I will have an opportunity to address that at a later date when the relevance has become clear.
Well, finally, I want to say two other things about the way the Government intend to present its case, which I think is symptomatic. They intend to call --
MR. ROBINSON: Objection.
THE COURT: The function of an opening statement is to outline the evidence not to do what you are doing.
MR. ANDERSON: The Government is going to, ladies and gentlemen
THE COURT: Maybe you didn't hear what I said.
MR. ANDERSON: Your Honor, this is specific, and I am sure Your Honor will have no obj ection to what I am about to say.
THE COURT: All right.
MR. ANDERSON: The Government intends to present as
its first piece of evidence, or so they have said, a statement or a portion of a statement given by Mr. LaRouche to the Grand Jury in Boston, to a Grand Jury in Boston in front of whom he appeared voluntarily to testify, and it relates to "the Government's first actual physical witness, a woman named Elizabeth Sexton. And, of course they are not going to present you the whole. They are going to give you a piece.
MR, ROBINSON: Objection, Your Honor.
MR. ANDERSON: And I will present the rest.
THE COURT: Well, I think he is entitled to say what he is going to present.
MR. ANDERSON: We will see what the facts prove.
THE COURT: Objection overruled.
MR. ANDERSON: We'll see if they are presenting the whole thing or only part of it. We will let you make that decision.
In any event, they are going to suggest that Mr. LaRouche in the context of that discussion he had on the issue of Elizabeth Sexton said things which were lies with a view towards either covering something up or deceiving the Grand Jury.
Now, what Mr. LaRouche said, and what you will hear, is a discussion in part about certain types of adversive or activities which were directed towards some of the
contributors with a view towards getting them to change their mind about their contribution or loan. And he addresses that at some length.
The Government will hoiid it up and say, see, this isn't true." We'11 prove this isn't true because Mrs. Sexton will tell you that those were not her facts. And that is true.
Mr. LaRouche confused Elizabeth Sexton with
another woman named Elizabeth Rose, who was of similar age, and in a similar circumstance, except and with a similar first name, the same first name. And at that time when he was thinking Sexton when he was thinking Rose, he was saying Sexton. And you will hear evidence that support the truth of what LaRouche said at that time. It was simply a misnomer. And I suggest the Government probably knew that.
The second thing that they are going to do with regard to Mrs. Sexton is they are going to show you some letters. There was an exchange of letters between Mr. LaRouche and Mrs, Sexton. Mrs. Sexton wrote the first letter to Mr. LaRouche on May the 10th of 19.86. And you will see the letters. I am not going to tell you what it says. It is unnecessary to hear it twice.
Mr. LaRouche received the letter and took the time to write a lengthy response. Never met Mrs. Sexton, to my knowledge, but took the time to write approximately well,
8S there were two letters. One of them was three pages, and one
was two, in response to two letters of hers, A:iinv<which he explained his view of the circumstances which created the difficulties for Mrs. Sexton.
The Government says excuse me -- and alleges that those were untrue. Ladies and gentlemen, I suggest that the facts will prove not only that Mr. LaRouche believed them to be true when he said them, but that they were in fact true, and that these responses were not deceptive and were not untruthful. And by virtue of the fact that they were written it demonstrates the concern that Mr. LaRouche had for any contributor to any organization with which he was associated or that was associated with him, and the individual circumstances of those people, contrary to the Government's allegations.
So, finally, ladies and gentlemen, I suggest, as I suggested at the beginning, that the evidence that you will hear, fairly j udged, will not compel the conclusions the Government seeks to have you conclude but will in fact compel a completely different result, because the Government's facts are twisted and misconstrued.
MR. MOFFITT: May it please the Court, Your Honor, ladies and gentlemen, I am not going to belabor several of the points that my colleagues have talked to you about. Five
lawyers have stood up before you in defense of this case,
so I am not going to beat around the bush and say many of the
same things that they have said.
My name is Bill Moffitt. I have the privilege of
appearing before you today representing Dennis Small. Dennis, would you stand upl
The first thing.I want to say to you is I don't represent an organization. I represent a flesh-and-blood human being, Dennis Small. And that is what evidence will show you. He is not one of them- He is not just a defendant. The Government will bear a burden of proving their case against that flesh-and-blood human being.
What I will bring to you is evidence about who Dennis Small is. why things happen. Why he raised money. What he believed at the time that he raised that money. Why those beliefs were important. And why they were more than mere abstractions. Because for Dennis Small his beliefs were more than mere abstractions.
Let me begin by giving you some background of this young man that appears before you today, sitting in the chair, and accused in a criminal case-Dennis Small has perhaps the most unusual background, because it is full of persecution. His.parents were Russian immigrants. His grandparents, excuse me, who came to this country to avoid persecution. His parents left
this country in 1954 to avoid persecution by the House UnAxtoerican Affairs Committee, the HUAC Committee. The McCarthy era.
He lived in Mexico, which is important, because when Dennis Small heard he was being persecuted for his ideas, he believed it, because his family history is a history of that form of persecution.. It is important that he
lived in Mexico because Dennis Small actually has two countries; this country, the one we live in, and Latin America, which he views as his country. He speaks Spanish fluently, and most of his involvement with the organizations that you have heard of have concerned his relationship with Latin American countries,
Dennis Small is a warrior in the war against drugs. But that is not an abstraction to him either. His brother is addicted and was addicted to cocaine. So he fought for those things that he believed. And the evidence will show that much of the solicitations on the phone involving Dennis Small, because he did solicit money. I am not here to tell you that he didn't. Nor am I ashamed to tell you that he solicited money. Nor am I ashamed to tell you for the purposes for which he solicited money.
Much of his solicitation involved the waaA against drugs. Dennis Small has an intimate knowledge of that, not only from the viewpoint of someone who has spent his life in
the United States and seen the effect of drugs on the United States, but someone who has seen the effect of the drugs on the other side, and the poverty it brings.
Dennis Small believed that the only way to solve the problem was to fight the problem. And he believed that the organizations that he belonged to were the only organizations who were legitimately interested and concerned in solving those problems.
And you will hear from the witness stand the nature of the soliciations.
Dennis Small is an honors graduate from Swarthmore College. He is probably one of the most intelligent people of anyone of us here. The evidence will show that. Because Dennis Small is a prolific writer. There will be articles. Dennis Small's beliefs will be before you. The evidence will be Dennis Small's beliefs. And you will get an opportunity to see them. And you will get an opportunity to hear them. And you will get an opportunity to touch some of them. And that is how you will have to decide whether Dennis Small was stealing from people when he was talking to them on the telephone, because that is what this case is about. We call it mail fraud, and wire fraud, but it is stealing. That is what the Government has alleged,, And what you are going to have to decide is whether that gentleman over there was stealing when he was on the phone.
Dennis Small had expectations that the organization that he was a part of, and like many organizations you don't believe everything necessarily that an organisation stands for, but if it supports many of the things you do, you j oin it. Many of us are members of various political parties. You don1t necessarily believe everything. But the evidence will show that Dennis Small had good reason to believe that his ideas and the ideas of that organization were flourishing.
Ladies and gentlemen, there will be evidence of contracts with foreign governments, contracts with SELA, S-E-L-A. SELA is probably the Latin American equivalent of the Common Market. Dennis Small prepared a report, which
was paid for, for SELA.
The National Society of Industrialists in Peru paid for a report prepared by Dennis Small. This was all during the periods of 19S3 and 1984. There were consulting contracts. The Debt Watch, another document prepared by Dennis Small, was subscribed to by 15 Fortune 500 companies.
Did Dennis Small have an expectation that his organization would be successfully raising money and being able to pay back loans? That is what you are going to have to decide. And I suggest to you that these contracts, along with various other things that will be introduced before you will show that he had a reasonable expectation that the loans
were going to be paid back and that this organization was going to be a success.
That in addition to what Mr. Reilly has told you, in addition to what every other lawyer has told you about things that happened. But let me add some things.
You will hear about a book called Dope, Inc. Narco
Traffico (phonetic)Bin Latin America, Four versions of it printed in various Latin American countries. One of the allegations is that money was solicited and the book wasn't printed or not in the number that it was anticipated to be printed. You will hear there were lawsuits to stop the printing of that book in Latin American countries. There will be evidence here to show that slander suits were filed, the suits themselves, and the lawyers who defended those suits will take the stand.
The question again was, what was Dennis Small's expectation? And I would suggest to you, ladies and gentlemen, that when the evidence is completed and you have to make that decision, the evidence will be clear that Dennis Small was not engaged in stealing or perpetrating a fraud but only fighting for the things that he believed in, and that is not wrong or criminal.
MR. WEBSTER: I am last. I bring you the least. That is, I bring you the defendant who is least mentioned in
I am Kenly Webster. I am here to present the facts to you on behalf of my client, Ed Spannaus.
Ed, would you stand,
I would like to do three essential things. I would like to tell you something about my client, number one. Number two, I would like to explain his participation in the political organizations of which he was a member, this political movement that was fomented to motivate people. And I would like to discuss with you the evidence that will demonstrate not only the weakness of the case against him, the weakness of the case against all defendants.
As you have heard from so many, or all, I
guess, virtually of the defendants, Ed is another, who is a very well-educated, very dedicated, very committed, and very political.
While the Government says this is a case about
money I believe you are seeing through the
statements that the evidence will show it is really about something else, about ideas and their suppression.
Ed was born in Seattle in 1943. He was raised out there for many years. He spent part of his upbringing in Chicago, from the "57 to "61 timeframe, and went to college at 'the University of Iowa.
He then went, as most of the defendants did, to
graduate school. I think you can tell from the graduate schools that were selected, they are very selective schools themselves, going there in and of itself is a credential. Ed went to Columbia. He received his Master's degree there, scientific degree, but basically in social work.
He committed himself to a variety of work proj ects following his graduation from Columbia in 1967 . He worked, for example, in the city of New York in tenant organising for a couple of years. He worked as a consultant to the Ford Foundation. He worked as a social worker in the New York Housing and Development Administration in the years "71 to
Ed is married. His wife, Nancy, is here with us today. He has two children. One is in college. Another will be going. Both honor students.
Ed's motivation in life is to be a thinker, in many ways a scholar. He has also written extensively. His writings in this case and his activities in this case in furtherance of his position as essentially the legal
coordinator are very important to illustrate a primary point on the suppression of ideas,
Ed has written extensively on legal matters. He has written on economic matters. And he has been extremely active in the organization since the seventies, when he first met or had been exposed to Mr. LaRouche, even farther back, in
Unlike those, some of those whom you will hear, who cut from the organization when things became difficult, he and other defendants here, and others beyond them, stayed to fight, to try to right the ship, to try to put it back on its feet economically.
The political organization here, as you heard, is essentially that focused on that of NCLS, The National Caucus of Labor Committees. What is a caucus, you might ask? A caucus/ for the intents and purposes that we have here, is essentially a meeting or a series of meetings as they have cacuses, of a group of persons supporting the same political movement.
And that is what we are dealing with, as you have heard, a political movement. The NCLC, formed as you heard also in 1971, is obviously a political movement. It is not dissimilar to a lot of other caucuses, but they have different names such as the National Republican Committee or the National Democratic Committee. They are comprised, as is the case here, and the evidence will show in this case, of essentially a very high level of intelligencia, a high level of thinking, educated persons, who are banded together with
this common political idea ;of motivating people, and in a particular direction.
The NEC, of which you have heard, is the National
Executive Committee. Much of the testimony in this case throughout the critical time under examination, which the Government alleges to be from approximately mid-1983 until mid-1987, will focus on the activities in Leesburg, where the property, Ibicus (phonetic), was purchased, which serves as a safe haven for Mr. LaRouche, and an organization house for the organization, among other things, a property that they may seek to describe in terms of, well, but a property that was used to pursue the functions, the evidence would show, of this organization, and was used for many purposes, including the purpose of protection, a safeguarding of someone who was subj ect to physical, potential physical threats and violence. We all know that Presidential candidates have that problem, whether they are George Wallace or whether they are Lyndon LaRouche.
The National Executive Committee functioned in Leesburg during this time basically through a variety of different people. You will hear from the evidence what it was like in a day of that committee, the workaholic aspect that was described to you by Mr. Anderson of Mr. LaRouche is no different for the other committed, dedicated members. You will find them working in the morning. You will find that the evidence will show that they collected intelligence information from Europe during a call in the middle of most every day from Germany. That the sources of that information
will come in from Britain, from Germany, from all of Europe, and some even from beyond.
You will find that the afternoon is spent with the acquisition and assimilation of additional intelligence information. That 90 percent of an average day of the NEC or National Executive Committee is occupied by this receipt and acquisition. Some ofBthe acquisition will be through HUMIS, wnich is Human Intelligence Sources; some from the United States. Some of it will come through phonecalls from South America, Caracas, wherever. Some of it will come through calls and teletypes from Asia, and has been described to you, our Government, or at least one of its spokesmen, has assessed this organization as having the best private intelligence organization in the world. Ed works hard toward that end.
You will see in the Courtroom volumes and volumes of newspapers printed on a daily basis, New Solidarity. You will see volumes and volumes of magazines, Executive Intelligence Review. To which Ed has contributed many, many articles.
You will find that the purpose of this organization is the battle for men's minds and women's minds. And that the days that they spend until their evening meetings or caucuses, their sessions when they get together jointly to assess the intelligence of the day, which start after dinner
on a daily basis that these are the constant repetitious days designed to foment the obj ectives of this organization.
You will find that Ed played a part, of course, in all of these activities designed to further the policies, many of which were controversial. The policies against drugs, striking at people who were laundering money, who were propounding the drug, traffic, who were failing to enforce the drug laws, the accent that you have heard on star wars, positions on the International Monetary Fund, positions on AIDS, classical culture, a whole range of things, many of which were controversial, and many of their positions on these ideas were controversial. And that may bring us to the point that I want to make about Ed.
Ed during the course of his time was a member of course of the NCLC. It is comprised throughout most of the critical time period here of some 13 people. You will hear the names of many of them during the course of this. But what you should understand is as the evidence will show, that there was a serious management problem. You had a group of people, and let me describe some of them briefly. You had Chris White, who was an intelligence director, and Criton Zoakos, who I think the Government has indicated will be a witness here, who is also an intelligence director. You have Fernando Guillano (phonetic), who was dealing with intelligence acquisition from South America- You had
U. A. Hank Von Park Pot (phonetic), in Asia, doing scientific work. You had Mr. Hammerman, doing U-S. operations, Klinetsky doing U.S. operations, Salsbury (phonetic) doing U.S. operations, Pappert (phonetic) doing U.S. computer systems. Rose (phonetic) administration. And, of course, Ed Spannaus, my client, was responsible for the legal coordination.
Those are some, but not all, of the members who total 13. Three of those members, only three, are under indictment here today. My client, of course, Mr. Wertz, and Mr. LaRouche, who is of course a member of the NCLC also.
Ed Spannaus was the author of a number of articles. You will see during the course of the evidence here that they were numerous. Some of them dealt with a variety and wide range of subj ects, such as Carter's deal with Khomenhi as being illegal and unconstitutional; the legislation, the inadequacy of the legislation required to stop money laundering; the American system of law, reaching back into its constitutional heritages from John Marshal, our first Chief Justice, a story. The Federal Reserve as not being the fourth branch of the Government. And why our Founding Fathers rej ected British law.
But while many of the articles that Ed wrote were analytic and scholarly, some you might say were not exactly politeA Among those were articles that attacked the Government
For example, How Kissinger delayed the release of U.S. hostages in Iran. The FBI cover-up of Iran terrorism, and
3 gun running as it continued in July 1985.
4 The evidence will show he authored an expose of
5 the Carter era gun running to the Ayatollah Khomenhi
0 MR. ROBINSON: Your Honor, I object to a listing
1 of these articles, I don't see what the relevance of these
3 articles is.
} MR. WEBSTER: I have two more to make my point.
) THE COURT: Well, we are not going to try here,
and we might as well make this clear now, either the
2 ideology of these defendants or their right to express that
i ideaology. The Government does not contend they don't have
1 that right.
5 MR. WEBSTER: That is not my point.
i THE COURT: Well, it seems to be taking a good
1 deal of your and the others time. And I don't want to get
3 this case off on the wrong foot. We are trying here a mail
) fraud case, and the defendants are quite entitled to show
i what their reasons were for doing what they did, but we are not going to spend but so much time on the underlying philosophy they had, except to that part necessary to show that it was bona fide. I don't think the Government takes the position that it was not bona fide.
MR. WEBSTER: Again, that is not the point I am
making here. Your Honor. If I may just mention the other two articles, I will conclude the point: There were articles on the FBI, excuse me, a Federal judge warning the FBI of Gestapo tactics as it upheld ABSCAM convictions, Justice Department Okaying rip-up of labor contracts and such.
The point I am making to you is that Mr. Spannaus and others in the organization in the caucus here in this group of persons who were supporting a political movement were not bashful about attacking the Government. Those attacks, we suggest, came to you, came to the Government, in a variety of different ways, both through the writings and through other things Ed Spannaus was involved in.
Ed Spannaus, for example, was involved in the civil rights suit against the FBI. He was involved in a civil rights suit against the EEC, and involved in various FOIA cases.
MR. ROBINSON: Your Honor, I object. I don't see what this has to do with the charges.
THE COURT: Objection sustained.
MR. WEBSTER: The case, and the guestion is why Ed Spannaus, why the entire array of defendants here, the case here against Mr. Spannaus is very, very limited. You heard little of him in the opening argument here. You might ask youself, well, since Mr. Spannaus is not a fundraiser what is his responsibility, since he is not is not alleged to have
spoken with any of the individuals who will complain to you that their money has not been paid back, or why is he here, since he was not in charge of fundraising? WhyAis he here because he is not alleged to be the leader of this organization? Why is he here especially when NCLC has some 13 members, only three of whom are brought before you today. He is, of course, and I wish to emphasize this, he is not part of the tax case. He is not alleged in that
And the answer, I suggest to you, is that in some respects is found in the degree to which the fomenting of ideas here were directly impacting on the Government.
MR- ROBINSON: Your Honor, I object. I move to strike that remark. It is improper argument. It is a continuation of this improper argument and it is time for it to come to an end.
THE COURT: Objection sustained.
MR. WEBSTER: The issue of intent, ladies and gentlemen, is a critical issue in this case, as you have heard from the other defendants. The Government must prove its case beyond a reasonable doubt, and the evidence will show that it does not carry that burden. The Government must show that the intent here is the intent to defraud.
You have already heard a recitation of the evidence of the extensive number of dollars that are brought
in by the organization, broken out by analysis in a course, stretching back to the late seventies and eighties. This organization, and this entity, this movement, this caucus, this attempt to further a political movement, could have been, the evidence will show, sustained in a way that would have permitted it to meet its obligations had there not been this interference. The Government's own evidence will show that these people, who are brought before you today, had a reasonable expectation of that result.
At the end of this case, I, too, will ask you to return a verdict of not guilty against Mr. Spannaus and the other defendants here.
THE COURT: We will take a short recess. Then we will hear the Government's first witness.
(Whereupon, at 3:57 p.m., a short recess was taken.