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VOLUME XIV
IN THE UNITED STATES DISTR
EASTERN DISTRICT OF
VlfcGINI
Alexandria Divisio
X- ------____---__-----x

UNITED STATES OF AMERICA

-vs- CRIMINAL
ACTION NO. 88-
243-A

LYNDON LaROUCHE, et al.,

Defendants.

X- - - - - - - - - - - - - - - -x

Wednesday, December 14, 1988

Alexandria, Virginia

Transcript of trial proceedings on the fourteenth

day of trial in the above-captioned matter.

BEFORE:

The Honorable ALBERT V. BRYAN, JR.,

Judge United States District Court

APPEARANCES:

(As heretofore noted;)

'J H

***
DON McCOY, RPR
OFFICIAL COURT REPORTER
683-3668

2
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THE COURT: Gentlemen, I told you this morning what

the charge will be.

There will be the general introductory statement to

the jury, that statements and argument of counsel are not

evidence in the case* fch© credibility-of-witnesses

instruction, the introduction that I gave you last night,

which I will give you again if you want it repeated.

The conspiracy charge will be generally in the

language that both parties seem to agree on. That is the

general bit about a conspiracy is a combination of two or

more persons, partnership in crime, and mere similarity of

conduct and so on is not proof of a conspiracy; definition of

willfully and knowingly, and these are things that neither

party really object to.

I will give that portion of the defendant LaRouche's

instruction that indicated that I want to caution you that

membership in a political organization like the NCLC or in

a political committee like NEC is not criminal nor is it

evidence of criminal activity or participation in a criminal

conspiracy.

An active membership in a political organization

which espouses honest albeit controversial views is not

unlawful under our Constitution but is in fact a protected

activity.

I will instruct them about the acts and declarations of

 Page 3 of 248

co-conspirators, a portion of which I have already indi-

cated , the elements of the offense, that the conspiracy described

in the indictment was willfully formed and was existing at or

about the time alleged. Second, that the defendant that you then

have under consideration willfully became a member of it. Third

that while the conspiracy was in existence, one of the

conspirators knowingly committed at

9 least one of the overt acts, and that the overt act was

10 knowingly done in furtherance of some object or purpose of the

11 conspiracy.

12 I will define an overt act. I will give the

13 Government's Instruction No. 11, which cautions them that

14 certain overt acts are not protected by the First Amendment if

15 they are in furtherance of the conspiracy. I will tell them

36 there must be more than one conspirator.

17

I will give Mr. LaRouche's Instruction No. 7,

18 although in slightly different language with regard to good

19 faith reliance on expert advice.

20 I will give Government's Instruction No. 29 on the

21

nature of the tax conspiracy. I will give Government's

22 Instruction A, B and C. I understand that counsel want to be

23 heard on some of these, so I am not ruling that out. I just

24 want to tell you — I will give defendant LaRouche's

25 Instruction No. 13, omitting the first paragraph.

4'
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I will give Government's Instruction 32. I will

give defendant LaRouche's Instruction 9, omitting the

novel and just confining it to the debatable application

of the tax laws and omitting the last paragraph.

I will give them Government's Instruction 34, 35, 3

6, defendant's Instruction 20, eliminating the first

sentence. I will give Government's Instruction 37, 39 ,

defendant LaRouche's Instruction 11, eliminating the first

paragraph, since that's already in the other instruction, and

eliminating the last sentence. I will give the Government's

Instruction 33, eliminating example 3 and 5 and adding to it,

"Bearing in mind that it is particularly the intent of the

party making the payment or transferring the property that is

controlling."

I will give defendant LaRouche1s proposed >

Instruction 16, eliminating the second paragraph, however

adding, "However, that an expense is deductible by a

corporation or business as an ordinary and necessary

business expense is not determinative of whether receipt of

such expense is to be considered part of the income of the

person receiving it."

Now, on the mail fraud claim, I will give

Government"s Instruction 14, 15 with an addition in the

third from the last paragraph of the language, "Or is made

with requisite difference as to its truth or falsity," and

adding to the last paragraph on the first page of 15,

"However, a statement made merely in innocent error or

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negligently does not constitute a fraudulent statement

even if it concerns a material fact."

The rest of 15 will be given as submitted. The

defendants1 proposed Instruction 14 will be given eliminating

the first paragraph. Government's Instruction 16/ 17, 18 will

be given. Government's Instruction 19 will be given, omitting

the third paragraph. Defendants' Instruction 16 will be

given, eliminating the first sentence. Government's

Instruction 21 will be given, 22, 24. I will instruct on

aiding and abetting. It's a fairly boilerplate instruction,

adding of course that mere presence at the scene of a crime

and knowledge that a crime is being committed are not

sufficient to establish that a defendant aided and abetted

that crime. You must find beyond a reasonable doubt that a

defendant to be convicted as an aider and abetter was

willfully a participant and not merely a knowing spectator.

I will give an instruction on character evidence.

I will remind the jury that the crimes charged in this case

require proof of specific intent, defined as meaning more

than the general intent to commit the act. To establish

specific intent the Government must prove that a defendant

knowingly did an act which the law forbids, or knowingly

failed to do an act which the law requires, purposely

intending to violate the law. Such intent may be dei.er,xiined by

all of the facts and circumstances surrounding the case.

And then the paragraph with which you are familiar,

intent ordinarily may not1-be proved directly-;because there' is no

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way of fathoming or scrutinizing the operation of the human

mind* I will give Government's Instruction 21 with regard to

not confusing intent and motive. I will give the boilerplate

instruction on opinion evidence. I will tell them about

experts who have made assumptions as to what will happen in

the future. I will tell them about the charts and summaries

prepared by witnesses. I will caution them that if the

charts or summaries do not correctly reflect the facts or

figures shown by the evidence in the case, that the jury

should disregard them.

1 will of course instruct the jury on the presump-

tion of innocence, proof beyond a reasonable doubt. I will
instruct the jury unless counsel do not want me to, and so
indicate, that a defendant's failure to testify shant
prejudice him. He has the absolute right not to testify. I
will instruct the jury that the defendants have been charged
with separate crimes in the various counts of the indictment.
The jury should give separate consideration, render separate
verdicts with respect to each defendant and as to each count.
Each defendant is entitled to have his guilt or innocence as
to each of the crimes charged determined from his own conduct

and from the evidence which applies to him as if he

were being tried alone.

And that's it.

Now, I will hear from counsel on —

MR. WILLIAMS: If I may make a brief objection,

Your Honor, to the omission by the Court of the

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missing-evidence instruction.

THE COURT: All right.

MR. ANDERSON; I would like you to give that reason-

able doubt instruction as often as you can. Judge.

THE COURT: Mr. Rossi wanted to be heard

particularly you said last night on Instruction C of the

Government, I believe.

MR. ROSSI: Yes.

Your Honor, Instruction C and also Instruction B

only briefly.

THE COURT: If you will come over to the lectern,

Mr. Ro s s i.

Let me get it.

MR. ROSSI: Briefly on Instruction B.

THE COURT: B?

MR. ROSSI: B. Correct. Government's B. I would ask

first of all that the last sentence be omitted or at least

something added to it because it's misleading but what I am

most — I'll mention that. I'll go back to that in a

moment.

THE COURT: I think it should be qualified unless it

meets the -~

MR. ROSSI: Exclusion.

THE COURT: — exclusion, which I will in the

immediately ensuing instruction.

MR. ROSSI: That.1 s all I wanted on that portion.

And then at the very beginning where they define gross

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income as meaning all income from whatever source

derived, Section 61 of the Code goes on to say,."Unless

specifically excluded by law," and I think that should be

included. That's in our instruction, and our instruction,

I believe, is —

THE COURT: Unless what is it, unless specifica-Ily?

MR. ROSSI: Unless specifically excluded by law,

and that's taken right out of Section 61.

THE COURT: All right. I don't mind putting that in,

MR. ROSSI: The instruction I have the most problem

with is C. That is the meals and lodging. There are a couple

of points. First of all, our No.. 14, which is the

corresponding instruction.

THE COURT: Let me catch up with you. All right.

MR. ROSSI: That instruction, the language of that

is taken right out of the IRS publication, which is

attached, Taxable and Nontaxable Income. It's an IRS

publication,

which is distributed to the general public- The language in

our instruction is taken right out of that. The three-part

test of our instruction in fact comes directly from that and

also from case law, and Section 119 of the Code itself.

Now, for instructing the jury, I think it behooves

us to make the instruction as understandable as possible,

and the fact that the IRS uses this language in the

publication they send out to the general public on this very

topic is a good indication that it's something they expect

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the general public to be able to use.

THE COURT: Is there any substantive difference

between --

MR. ROSSI: Yes. First of all, C is wrong as far as

lodging. They say that the meals and lodging must be — this

is part second of their test. The meals and lodging must be

provided for a substantial noncompensatory purpose. In fact,

in regard to lodging, the regulations specifically do not say

that, and there are cases and even a portion of the regula-

tions which say that lodging is still excludable even if it

is compensatory, as long as the test in Section 119 is met,

and if that test is met, meals furnished in connection with

the lodging are also excludable. So it's wrong. It's just not

a correct statement of the law.

There is a case, Coyner, C-o-y-n-e-r, versus

Bingler, B-i-n-g-1-e-r, 344 Fed 2d 736, which goes along with

10

1 the regulations in stating that lodging expenses are exclud-

2 able, even if compensatory as long as Section 119 test is met

3 The instruction is just wrong in that regard. It's totally

4 misleading when it lumps meals and lodging together in that

5 respect, and the test in our No. 14 is accurate. It comes

6 from the case law, the regs and the IRS publication.

1 don't see why we have to revamp the test and do a one,

two, three as the Government has done it, which it 9 has aspects that

are incorrect according to the law, and also 10 just misleading in

addition to being wrong.

 Page 10 of 248

11 In addition, part 3 of the Government's test uses the

12 word "indispensable" in connection with lodging* That

13

is just not true. The test is convenience of the employer. 14 In fact,

there is a case. Junior Chamber of Commerce case, !5 which is 334 F 2d

660, which says you don't use such a strict 16 test. I think the

Government in that case argued that the

17 test was one of absolute necessity, and the Court said no,
IS

it's just reasonable. It's the convenience of the employer

19 looked at in a reasonable manner.

20 Our Instruction 14 covers that. And it's taken

21 right out of the IRS pamphlet.

22 THE COURT: All right.

23 MR. ROSSI: Those are the only significant arguments

24

I want to argue in detail.

25 I would just ask that the Court also include

11

Instruction No. 15, which is on gifts, which is from our

instructions, and No. 6, legitimate tax avoidance, Wo. 5,

the mental state required. That's all I have to say, Your

Honor.

THE COURT: Other counsel want to be heard?

MR. MOFFITT: Your Honor, the only thing I would

just like to know, are you giving the character

instruction as we asked for it?

 Page 11 of 248

THE COURT: No. I'll tell you what I am going to

give. "Where a defendant has offered evidence of the opinion

of others as to the defendant's character and of good general

reputation for truth and veracity or honesty and integrity or

as a law-abiding citizen, the jury should consider such

evidence along with all the other evidence in the case.

Evidence of a defendant's reputation of the opinion of others

as to those traits of character ordinarily involved in the

commission of a crime may give rise to reasonable doubt,

since the jury may think it improbable that a person of good

character in respect to those traits would coinmit such a

crime."

This is the part you are not going to like.

"Evidence of good reputation, however, should not

constitute a reason to acquit a defendant, if the jury

after weighing all the evidence including the evidence of

good character is convinced beyond a reasonable doubt the

defendant is guilty

12

of the crime with which he is charged."

MR. MOFFITT: You're right. Your Honor. That's the

part I don't like. Note an objection to that.

THE COURT: All right.

Mr, Webster, you looked like you were getting

ready to say something?

MR. WEBSTER: Yes, Your Honor. I have two matters:

first of all, I would like to orally suggest the addition of

another instruction, which is that evidence involving the

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campaign activities cannot be used in the jury's

consideration in connection with the substantive counts

under the mail fraud. Those would be the counts under which

they allege a specific —

THE COURT: Tell me again what you are suggesting?

MR. WEBSTER: Suggesting, if Your Honor please, and

I think this is correct as a matter of law, that the

evidence relating to the campaign activities —

THE COURT: To campaign activities?

MR. WEBSTER: That's correct. If Your Honor recalls

of course there is the TLC or the LaRouche campaign and

Independent Democrats for LaRouche. There were soliciations,

et cetera and activities in connection with those campaigns.

But they --

THE COURT: Give me those initials again. TLC and

what was the other one?

13

MR. WEBSTER: IDL, Independent Democrats for

LaRouche.

THE COURT: Right.

MR. WEBSTER: And the LaRouche campaign, TLC; that

evidence relating to either soliciation of funds or

activities involving the campaign could not be used for

consideration by the jury in connection "with any of the

substantive counts of mail fraud, because those mail fraud

counts are all counts relating to Campaigner or Caucus.

THE COURT: Infrastructure loans.

MR. WEBSTER; Infrastructure loans, correct. Your

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Honor.

THE COURT: All right.

MR. WEBSTER: The only other matter I have, Your

Honor, is in order to preserve rights, I would make on

behalf o£ my client and on behalf of all other defendants an

objection to the Court1s not giving the instructions as we

have submitted them. If Your Honor wishes to hear argument

on each and every one, we will be glad to present it.

THE COURT: No, I don't.

MR. WEBSTER: But I assume you don't.

THE COURT: No, I don't.

MR. WEBSTER: And therefore in the exercise of

Your Honor's interest in proceeding with the matter and

making the blanket objection is sufficient to preserve

our

14

right on appeal.

THE COURT: All right. I am not going to entertain oral

argument on renewed Rule 29 motions. So I will just assume and

for the record say that those will be treated as renewed.

MR. WEBSTER: Your Honor, may I be heard very briefly

joist on one narrow point in light of the fact that Your Honor

has accepted the instruction that I have just proffered there?

THE COURT: Well, I haven't accepted it yet. I haven't

heard from the Government on their response to particularly Mr.

Rossi's comments with regard to Exhibit C and your suggestion

of an oral —

MR. WEBSTER: I think in two to three minutes. Your

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Honor, I can make the very narrow point I would like to

make, which I think is very compelling.

THE COURT: On the renewed 29?

MR. WEBSTER: Yes.

THE COURT: Let me resolve the instruction matter

first.

MR. WEBSTER: Thank you.

MR. ROBINSON: Your Honor, if I could I would like

to first address Mr. Webster's request that the jury be instructed

that activities relating to the campaign borrowing

shouldn1t be considered on the substantive counts. We

15

disagree with that charge, and in fact I think the defense

has disagreed with it throughout this case. If the Court

recalls those charts that we spent so much time on

yesterday, thoe charts contained both campaign borrowing and

the company borrowing and campaign repayments together with

the company repayments. It's been treated as one

organization by the defense throughout this case, and I

don't think we can now artificially carve it up.

Indeed, the allegation of the mail fraud charge

incorporates by reference the conspiracy charge, including

the portions of the conspiracy charge that specifically

refer to the campaign fundraising. It's all one scheme as

far as we are concerned, Your Honor, It's the same

fundraisers. It's the same executive members of the

organization overseeing it. I don't see that there is any

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way that we can create artificial divisions at this

point.

THE COURT: Okay. Let me hear you on Instruction C

as opposed to the defendants' proposed Instruction 14.

MR. ROBINSON: The first portion of it that Mr. Rossi

I think took exception to was part 2 of the Government's test

which said it must be for a substantial noncompensatory

purpose. That's taken more or less directly out of some case

law. Your Honor, the case law particularly is Bob Jones

University versus the United States, which is cited in the

footnotes to my instructions. It's at 670 F 2d 167. And

16

frankly what the Court did in that case was weigh all the

circumstances to determine whether the housing was being

given to the employees of the university for the business

purpose of the university or in effect as additional;'

compensa tion, to make up for the fact that they didn't have

a salary that was comparable to what other teachers at the

other institutions were getting.

So I do think it's an appropriate part of the

test, and I think that case rather clearly sets that out.

Second, I think his primary dispute with the third

part of the Government's test relating to the convenience of

the employer was the use of the term "Indispensable." That

again is a term taken directly out of the case law cited to

in the footnotes that I placed in that instruction, and I

think it's a fair characterization. It is frankly not that

much different from the second sentence of the third part of

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the defendants' test, which says that this means

that a person must accept the lodging to properly carry out

the duties of his job.

There is a sense of it being mandatory in both that

sentence and in what the Government has said, namely, that it

is a requirement of the job that he work there, that him

working there is indispensable to the performance of his

duties. That is the point we are trying to get across.

THE COURT: Okay.

17

MR. ROBINSON: But I think that the first sentence

of Part 3 of the defendants' instruction is just too broad

and too vague to be adequately informative to the jury. It

says a person must accept the lodging at his eraployer's

place of business — just a second —

THE COURT: As a condition of his employement.

MR. ROBINSON: T don't have any problem with that

sentence either. The problem I had was on the following page

where they seek to limit that and say that an employer only

needs a good business reason for providing meals and lodging.

I think that clearly cuts against what is in

their paragraph 3.

I frankly don't have that much trouble with

their paragraph 3. I do think the substantial

noncompensatory purpose belongs in there.

THE COURT: It seems to me fair to substitute

defendants' paragraph 3 for your paragraph 3.

MR. ROBINSON: Okay.

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THE COURT: That's not going to satisfy all of your

objections, Mr. Rossi.

MR. ROSSI: Can I be heard briefly on the one

remaining objection, just to rebut what Mr. Robinson

said?

THE COURT: All right.

MR. ROSSI: I haven't had a chance to examine with

a fine-tooth comb the two cases he cites. You are taking

13

1 out the indispensable part. Fine. So we are dealing only

2 with —

3 THE COURT: I am taking out his third and putting in

4 your No. 3.

5 MR. ROSSI: So it's just part two of his,

6 substantial noncompensatory purpose, which is at issue. That

7 language is taken right out of the regs involving meals, but

8 in fact, as I cited the Coyner case to you earlier, and the

9 regs in fact say that the exclusion applies even if the

10 lodging is furnished as compensation and if that test applies

11 lodging is excluded and meals that are furnished in

12 connection with the lodging are excluded. I believe that the

13 substantial noncompensatory purpose language applies only to

14 meals that would be separate from lodging. It has no : appli-

15 cation to lodging. It only applies if there are meals. They

16 have a situation where the employee is not living on the

17 premises of the employer and you are looking only at meals

IS and that language then applies. But it's totally misleading

19 to put it in there when it has nothing to do with lodging and

 Page 18 of 248

20 cases and regs specifically say that. Even if the lodging

21 is compensatory, if it meets the three-part test, then it's

22 excludable.

23 THE COURT: Do you want to address the difference

24 between meals or meals and lodging in your second?

25 MR. ROSSI: Were you addressing this question to

1'9

Mr. Robinson?

THE COURT: Yes. Unless you wanted to be heard

first.
MR. ROSSI: No.

MR. ROBINSON: Your Honor, I think the point of our

No. 2 is that there must be a purpose other than

compensation for both meals and lodging. To be sure, meals,

it specifically says that in the regulation. I think it says

that by inference as well about the lodging and certainly

the case law says that. It is true that compensation can be,

that the exclusion can be met, and it can result in some

compensation to the employee. But the point is that the

purpose of it has to be for something other than

compensation. And really, paragraph 3 goes to that same

point- It has to be in furtherance of the business purposes

of the employer. It has to be material to the employee's

performance of the duties. It has to be for something other

than compensation.

That's the point we are trying to put forth

in the second paragraph.

MR. ROSSI: I have no problem with that statement,

 Page 19 of 248

Your Honor. Our paragraph 3, which has been

substituted, says that, which says there has to be a good

business purpose.

THE COURT: Your paragraph 3?

MR. ROSSI: Which I believe that is the one that's

been added, the paragraph that starts —

20

THE COURT: For lodging but not meals is your

paragraph 3.

MR. ROSSI: Correct.

THE COURT: And that's what I am going to give

in place of what is designated third on the Government's

proposed Instruction c.

MR. ROSSI: Okay.- I was looking at paragraph 4,

which uses the good business reason language, part 4 of

mine, which is the top of the second page of my No. 14.

THE COURT; I am not going to give that.

I am going to leave second in as is.

MR. ROSSI: All right. Note my exception.

THE COURT: Yes, sir.

Now, Mr. Moffitt and Mr. Webster wanted to be heard

briefly on their —

MR. WEBSTER: Your Honor, just one clarification

before you leave instructions: do I understand you to be

giving the reliance on advice of expert instruction to

apply to only the tax case, or is that going to be

applicable to the remaining case, because I do have Mr.

Morganroth1s testimony in for Mr. Spannaus that Mr.

 Page 20 of 248

Morganroth advised Spannaus to change the form of

the promissory note to a letter of indebtedness and that

Mr. Spannaus relied on that advice in making changes.

THE COURT: I don't think that's sufficient to give

21

you a good-faith reliance on an attorney in this case. I am

not going to give attorneys' advice instruction on anything

but the tax case.

MR. MOFFITT: Your Honor, if we may be heard, Mr,

Yepez tried to make that change some form of criminal

activity. That was sort of the way it was characterized by

Yepez when he talked about it. And the change was not for

that purpose according to the testimony of Mr. Morganroth.

If you remember the testimony of Mr. Yepez, he said it was

changed. He wasn't sure why it was changed. He spoke with

Mr. Spannaus about it, and the reason why it was changed is

a result of what Mr. Morganroth said.

MR. WEBSTER: Your Honor, I really didn't want to put

Mr. Morganroth on, I mean to ask him questions about that,

but I really felt constrained to do so to clarify it. It was

indeed only the advice of counsel for Mr. Morganroth, who

introduced the question in Mr. Spannaus1 mind but he took it

to another lawyer and received the advice from Mr.

Morganroth. I think if there is any time that you could be

entitled to an instruction on reliance on professional

advice, that this would be such a circumstance, particularly

when --

THE COURT: I have never understood the Government

 Page 21 of 248

to argue that the change in form of the

obligation was criminal.

MR. ROBINSON: I don't think the change in form is,

22

Your Honor. I think obviously Mr. Spannaus1 involvement in

creating a form, whether it's a promissory note or a letter

of indebtedness, is 1 agree irrelevant, but his involvement

in that and in setting up the terms of it at a time when he

knew that they were having difficulty repaying the loans is

relevant.

But I think the important point is all Mr.

Morganroth testified about, all he was consulted about was

whether they should use a promissory note or a letter of

indebtedness. That's all. That doesn't have anything to do

with it.

Our issue with Mr. Spannaus is that he was involved

in — let me further add that Mr. Morganroth said that he

knew nothing about at that point in time the terms that were

going to be included in the letter of indebtedness nor the

performance the organization was having on its outstanding

loans.

All right. So he was involved in none of what the

Government wants to infer about Mr- Spannaus' criminal

conduct from the use of the letters of•indebtedness from that

point forward. Namely, that he created a document that had

certain terms in it, that he knew couldn't be met. That is

the Government's point. Mr. Morganroth didn't have anything

to do with it. The fact that it's a letter of indebtedness

 Page 22 of 248

rather than a promissory note doesn't have anything

to do with it.

23

MR. WEBSTER: Your Honor, if the Government wants to

infer criminality from that act I think I am entitled to

that instruction. And that's just what Mr. Robinson;, said.

Ee just said it.

THE COURT: The change in form of the note? I don't

think you are entitled to an instruction on that. I will not

give it.

MR. MOFFITT: Your Honor, with respect to Rule 29,

aside from renewing all my other motions, I would ask the

Court to look at Count X on page 38 of the indictment. This

will take me exactly a minute to explain it to the Court.

THE COURT: I don't believe that, but — I don't

believe it's only going to take you a minute.

MR. MOFFITT: I understand that you don't. Your

Honor, but it's going to be rather obvious to you when I

say what the problem seems to be.

THE COURT: I don't have the indictment right before

me.

MR. MOFFITT: Your Honor/ I can hand it up to you,

and you can see what I am talking about.

THE COURT; Count X?

MR. MOFFITT: Yes. Count X charges the solicitation

of a $5,000 note. There is simply no testimony concerning a

$5,000 note. Every piece of evidence concerning that

particular solicitation involves a $15,000 note and not a

 Page 23 of 248

24

$5,000 note. The Government has rested without making any

corrections with respect to that, and it is clear that the letters

of indebtedness and various other things that they have put in

that that solicitation was a $15,000 solicitation

5 as opposed to a $5,000 soliciation. I don't know whether that is

6 the same thing. I don't know whether they are talking about a

7 different situation, but I think if you go back and look at the

S Goodwill Post solicitation and all of the exhibits, the 10

9 series, I believe, that the Government has put in evidence with

10 respect to that charge, they are all regarding a $15,000 note,

11 and a $15,000 obligation incurred in that with respect to that

12 particular situation. That's all I have to say.

13

14

THE COURT; Go ahead, Mr. Robinson.

15 MR. ROBINSON: He is correct. Your Honor, that it's

16 a $15,000 note that we are talking about, and that is in fact 37

what is set forth in Overt Act No. 64 of the conspiracy

IS charge.

19 Mr. Moffitt has picked up a typographical error in

20 Count X, and that's precisely why there's a space between

21 the dollar sign and the 5, too, I presume, as there is no-

22 where else. I think it's an immaterial typographical error,

23

Your Honor. We proved more than what this alleges frankly.

24 We proved a $15,000 loan instead of a $5,000 loan- I

 Page 24 of 248

25 certainly don't think that the defense has been misled in any

25

way by the typographical error in the indictment. I think

it's the sort of thing that is within the Court's

discretion to amend.

THE COURT: Are you moving to amend it?

MR. ROBINSON: Yes.

MR. MOFFITT: I object, Your Honor. They have

rested. It's their indictment. I object to an amendment at

this point.

THE COURT: I will grant leave to amend Count X.

MR. MOFFITT: Note my exception.

THE] COURT: Now.—

MR. MOFFITT: May I have that indictment back?

THE COURT: Yes.

MR. MARKHAM; If I may briefly address the Court

about one more matter?

THE COURT: Mr. Webster wanted to be heard on the

renewal of his Rule 29, I gather.

MR. WEBSTER: I am focusing, Your Honor, if Your

Honor please, on the substantive counts again on the mail

fraud counts. As Your Honor knows, Mr. Spannaus was not

involved in fundraising or soliciting, had nothing to do

with any of the soliciations. There is no evidence that he

was involved in any of the solicitations involving any of

those individuals. I pointed out previously to Your Honor

that the difference between his being involved in the first

 Page 25 of 248

2b

overt actr not being involved, excuse me, with Ms. Sexton was

because there was a promissory note. He is alleged to be

involved in the remaining except for the last, which Mr.

LaRouche is the only one involved in.

The difference therefore is the question of the

difference between the promissory note and the letter of

indebtedness. I believe- we have now placed more precise

evidence before the Court that this action was taken in

connection with a legal technicality, brought to his atten-

tion by a lawyer, for which he sought a solution from

another lawyer, accepted that solution and implemented it

and it was implemented in accordance with Mr. Morganroth's

suggestions as Mr. Morganroth testified.

I suggest. Your Honor, that the stuff of complicity

in that count is just entirely lacking. I would renew the

motion for its being dismissed from the indictment at least

as to those counts,

THE COURT: That motion will be denied.

Mr. Anderson?

MR. WEBSTER: Your Honor, I did not hear whether we

had a ruling on my suggested instruction concerning the

political campaign evidence.

THE COURT: I will not give that instruction.

MR. WEBSTER: May 1 say, address one miscellaneous

matter as long as I am up here?

27
 Page 26 of 248

THE COURT: Yes.

MR. WEBSTER; Counsel, defense counsel received last

night a red-line copy of the indictment and a redacted copy of the

indictment, not including the red-line material. Obviously in

preparation of our closing arguments, not all of us have had an

opportunity to look very carefully at that. We would like to have

leave to bring any changes to the attention of the Court first

thing tomorrow morning.

THE COURT: Before the indictment goes to the jury.

MR. WEBSTER: Before the indictment goes to the jury, yes,

Your Honor.

THE COURT: All right.

MR. WEBSTER: There is a matter of the Government's

chart -- is that what you were — there is a proposed chart here

that I would like to be heard on.

MR. MARKHAM: No, that's not what I wanted to —

MR. WEBSTER; Is this still a suggested piece of

evidence?

MR. ROBINSON: Yes.

MR. WEBSTER: I do have an objection to this chart.

I don't know whether the Court has a copy of the chart or not.

It was presented to us last night at the close of business.

I think the Government took the position that -- I don't

have a clean copy. Maybe you all do. The Government took the

position they didn't, and the defense counsel, they

28
 Page 27 of 248

didn't need to call a witness to put the chart in but I think

we did preserve our right to challenge the chart.

I do so on three grounds, Your Honor, as being

misleading: number one, this chart is entitled, "Profit

analysis derived from tax returns 1979-1984." Number one, I

point out to the Court that all of the tax returns are in

evidence, so this is only, a summary chart. The underlying

evidence has already been admitted by the Court.

MR. ROBINSON: Your Honor, that's just not true.

The tax returns are not in evidence. There's about 3 0 tax

returns here. Your Honor. We haven't put them in evidence-

MR. WEBSTER: Is there a reason?

MR. ROBINSON: Yes. They were never part of our case

until now, until it arose in response to the defendants'

expert yesterday. These are the corporate tax returns. There

has never been any discussion of them up until now.

MR. WEBSTER: I stand corrected then on that. They

are available to be put in evidence. I think that this

chart is misleading, however, for three reasons: the first

is and most importantly, it purports. Your Honor, to present

a false impression that this was the state of mind of the

individuals who are supporters of LaRouche in this case

during the time period. In fact, this summary chart

summarizes what was on tax returns, which as I understand

it were not prepared or at least signed until 19 87. So the

29

impression one gets from this is that these figures were

available contemporaneously throughout the years from

 Page 28 of 248

1979 through 1984, when in fact as I understand it, the

returns for which this chart is a summary, do not speak

until this date.

Secondly, with respect to the figures on there, I

think there is an inaccuracy. And that is that the income

column here, as I understand it, does not contain deferred

revenue. And as such, it is an inaccurate figure therefore

on the total income column in the chart.

Thirdly, if Your Honor please, another

inaccuracy: I think that the expenses against which you

compute the income which came from the underlying tax

returns also are overstated. Therefore, causing a —

THE COURT: Do you contest that these figures aren't

figures front the tax returns? I mean do you assert that

they are not?

MR. WEBSTER: I do not contest that they are figures

from the tax return with respect to my second and third

arguments. Your Honor. I am suggesting the underlying

returns when you take these figures, they contain misleading

conclusions as to what the total income was.

For example, on the second column there, for the

two reasons that it does not contain deferred revenue,

and the expenses are overstated. But most importantly, it

30

suggests a state of mind. The jury looks at this, they are

going to think that everybody in the organization had avail-

able to them information upon which this chart was based, and

the fact is that the returns were not prepared until 1987,
 Page 29 of 248

which is not true. The issue in this case, Your Honor, as you

know, is at what point. There will be a large argument about

what point was this., the Government will argue, recklessness

and the disregard, and they are going to move that back to

the 1985 time frame, and they are going to use this chart to

do it, and this chart is going to be based on tax returns

that weren't prepared until much later. They will give a

false, misleading impression.

MR. REILLY; I just have one other exception to the

chart, and that is the heading. Your Honor, profit analysis.

That's just not accurate. This is an analysis of what the tax

returns show. It's not a profit analysis. It's been the

experience, I know everybody who has been involved in working

with businesses there are frequently businesses which are

profitable and show tax losses.

THE COURT: I think you can argue that to the jury. I

don't think this purports to be anything more than what the

tax returns reveal.

MR. REILLY: My concern right now, in addition to

Mr. Webster's, is this heading, I think, is not accurate. I

think the jury may not be —

31

THE COURT: Well, don't the figures, profit or loss,

aren't they — you don't suggest they are not the same

figures that the tax returns themselves revealed?

MR. REILLY: They are tax profit and loss. That is

not a true profit figure.

THE COURT: That is all this says.

 Page 30 of 248

MR. REILLY: Well, it doesn't say that. If it said

tax profit analysis, I wouldn't have a problem, Your Honor,

but it says more than that. It says profit analysis, and

it's going to be argued by the Government that this proves

that these companies were in fact not making a profit, and

that heading seems to make that argument and the logical

leap that they are going to have to convince this jury of is

that you can go from a tax profit to an actual cash profit.

I don't think they should have the advantage of having an

exhibit which seems to confirm that when it's just their

heading that they pick out.

THE COURT: Objection overruled. It will be

received in evidence.

MR. ANDERSON: Your Honor, may I make just two brief

points: Your Honor, in Mr, Markham's argument on Rule 29, he

quoted or purported to quote one of the witnesses as saying

a particular thing. I have gone back to my notes. All of us,

I have asked three or four other counsel to go back to their

notes, and —

32

1 THE COURT: Who are you talking about?

2 MR. ANDERSON: This is Pam Cowdery. Pam Goldman

3 Cowdery. Mr. Markham quoted her as saying it's the fund-

4 raisers' job to make the money and it's my job to determine

5 where the money was spent.

6 I do not believe that that testimony was offered by

7 that witness from this witness stand. None of us have that

S reflected in our notes. I took down every — in the context

 Page 31 of 248

9 of the trial, tried to take down every statement anyone else

10 put in Mr. LaRouche's mouth. And that was one of my princi-

H pal note-taking tasks. It's not there. I suggest that it

12 wasn't said. Mr. Markham heard it in another context but

13 didn't get it in evidence. I don't want — I am just

14 suggesting that if Your Honor's memory or even at this stage

15 Mr. Markham's memory is the same as mine and other counsel,

16 that he not argue that that statement was made to —

17 THE COURT: My memory is not that good.

IS MR. ANDERSON: Your notes are. Your notes are

19 excellent.

20 THE COURT: That's to keep awake.

21 MR. ANDERSON: There is one other point, Your Honor:

22 could we approach the Bench?

23 THE COURT: Yes.

24 (Whereupon, a conference was held at the Bench with

25 Court and counsel, out of hearing of the jury, and reported

33

1 as follows:)

2 THE COURT; When did Cowdery testify? Do you have

3 any recollection of that?

4 MR. REILLY: I will find out.

5 MR. ROBINSON: A week ago Monday.

6 THE CLERK: December 1st.

7 MR. MARKHAM: Your Honor, I remember what she said

8 because it's one of the reasons X put her on.

9 THE COURT: December 1st?

10 MR. MARKHAM: Yes, Your Honor.

 Page 32 of 248

11 THE COURT: Your recollection, is that she didn't say

12 it?

13 MR. ANDERSON: She testified to a similar thing

14 which is a statement they attribute to Mr. LaRouche regarding,

15 I make the decisions and Will Wertz carries them out, some-

16 thing to that effect. But that's a different statement. I

17 don't contest something along those lines was said by her but

18 this one wasn't.

19 THE COURT: What is your recollection, Mr. Markham?

20 MR- MARKHAM: Your Honor, my recollection is that

21 she came down to do a music thing. She talked about what

22 Will Wertz was doing in New York. Mr. LaRouche said what

23 Will Wertz is doing in New York, he is doing with my

24 authority. It's important that Will be given all the

25 latitude that he needs.

3"4

MR. GETTINGS: She didn't say that.

MR. MARKHAM: Besides it is your -- the fundraisers' job

to raise the money. It is my job to make the policy decision as to

how that money is spent.

That is my job, not your job.

MR. ROBINSON: What I distinctly recall, Your Honor, was

the part of the quote where she said Mr. LaRouche told her the

members of the organization have gotten more stupid since they

joined and therefore it was their job to spend the money and his

job to decide what happened to it.

MR. ANDERSON: I remember the stupid part of it. The

other part just didn't exist.

 Page 33 of 248

MR. ROBINSON: That was the context.

THE COURT: I have that Mr. LaRouche said you have to

understand that I make policy. Wertz just carries it out.

MR. ANDERSON: I don't contest that.

MR. MARKHAM: But that's not all that was said on that

subject.

THE COURT: He said people have to realize he needed

money to carry out his policies. People have become more stupid.

He needed money to carry out his policies.

Is it in that general area?

MR. MARKHAM: Yes, sir.

MR. ANDERSON: That's exactly it. Just the statement .-

- is one that was not made. I know Mr. Markham

35

probably heard it before.

MR. REILLY: I think she has said it in the past.

She just couldn't say it in this trial.

MR. MARKHAM: Your Honor, I believe she said it

because the reason for her saying --

THE COURT: I don't have it. And I, like Mr.

Anderson, tried to get down particularly what Mr.

LaRouche, what was attributed to Mr. LaRouche. So I think

you had better stay away from that statement in your

closing argument.

MR. MARKHAM: Yes, Your Honor. If we have a chance

to get with the Reporter over the noon recess and if we

find it —

MR. ANDERSON: That's fine. If it's there, it's

 Page 34 of 248

there.

THE COURT: All right.

MR, ANDERSON: One other point. Your Honor. I

hesitate to suggest or possibly suggest arguments for the

Government to make in their closing but I suspect that they

have already considered this and I am concerned that they

will in fact do it. And that is that there is in the

testimony about it, whatever the food it was that Helga's dog

was fed during the period of time. I heard it, everybody

heard it. This was in some redacted portions I believe or one

of the, maybe it was the Hintz — I'm not sure precisely.

3'6

MR. GETTINGS: One of the attachments in the Hintz

memoranda —

MR. ANDERSON: Some suggestion they were heating dog

food. That's out. There is no evidence in this case. I don't

want Mr, Robinson and John Markham arguing that while

Helga's dog was eating boned chicken, someone was eating dog

food.

MR. MARKHAM: We won't mention that. We may mention

the dog food —

THE COURT: Oh, I'm sure you will.

MR. WEBSTER: Your Honor, I have one other problem

about that chart, Your Honor. Since the underlying tax

returns are not in the case, we don"t have an evidentiary

basis for correcting the jury's misimpression. We could put

in the tax returns or perhaps the Government would

stipulate to the fact that the chart here is based on tax

 Page 35 of 248

returns prepared by Grant Thornton, I believe,

right?

MR. ROBINSON: That's right.

MR. WEBSTER: In the year 1987?

MR. ROBINSON: No. They were prepared in 1985.

MR. WEBSTER: My understanding from Mr. Seay is that

they are prepared, possibly initiated and signed in '87?

MR. ROBINSON: No. Mr. Morganroth you will recall

met with Mr. Eoubrowsky in December of '84 to begin that.

Mr. Welsh testified what he did and beginning in early

1985.

37

Mr. Offutt met with Mr. Morganroth in February or later

of 1985 and so on.

The payment dispute arose between Grant Thornton and

the client, and as a result, the returns were not released to

them until 1987, So they weren't signed until then but they

were prepared by them in 1985.

MR. WEBSTER; Could we stipulate to the date on the

returns then?

MR. ANDERSON: There were substantial corrections

made to the proposed returns that Grant Thornton prepared.

The returns that were filed were not the final copy Grant

Thornton prepared but in fact an enhanced and corrected

version of it. So in terras of the completion of those

returns that were filed, it was not until 1987.

MR. ROBINSON: Your Honor, these are the same

returns that the defense expert relied upon in putting his

 Page 36 of 248

schedules together. Okay. All we have done is take

the expense parts out of those returns that he ignored and

put them on this chart. All we are doing is introducing a

chart that's got one column on it that the defendant didn't

have. The deductions part. That's all there is to this. I

don't understand what the problem is.

MR. REILLY: All we are asking at this point is the

date when the returns were filed. It is very relevant.

MR. WEBSTER: The date signed.

38

THE COURT: Whether it was signed in '87 —

MR. REIXiLY: Yes.

THE COURT: Filed in ' 8 7 ?

MR. REILLY; Yes.

THE COURT: You can argue they were prepared earlier,

MR. ROBINSON: All right.

MR. MOFFITT: Your Honor, one other thing while we

are at the Bench: I have both the Peruvian and the Venezuelan

suit which ultimately resulted in the banning of the book

Narco Trafico. 1 would like to put them in evidence. Mr.

Rasch doesn't want to put the entire suit in evidence, but

wants only to put the injunction in evidence. I am not a

Spanish translator. I would have to go through and find the

injunctions which would take me a while. But I think the

entire suit is relevant. It's all in Spanish anyway.

THE COURT: I don't think the entire suit is. I

think the banning itself is relevant. 1 will accept -- I

don't want this jury to be trying those two cases, too.

 Page 37 of 248

MR. ANDERSON: In Spanish.

MR. MOFFITT: I need your help.

Thank you, Judge.

All right, Your Honor, if the Government is willing

to stipulate that the book was banned in both places as a

result of lawsuits, then I don't have a problem in '85

and •86-

39

MR. RASCH: That's fine- And the dates of the .

banning. That's fine.

MR. ROSSI: There are three exhibits, Defendants1 QGQ-

34, 35 and 36 which I am going to offer into evidence. Mr.

LaRouche, portions of Mr. LaRouche1s NBC testimony, portions

of Mr. LaRouche's Grand Jury testimony in Boston and some

bank records*

MR* ROBINSON: X don't have any objection to the

bank records, I had hoped to speak with Mr,Rossi before we

started Court this morning about the transcript references.

I am afraid this is a pingpong that's been, going back and

forth between us. I had transcript references that I wanted

in. They changed those and submitted a revision. I have got

some additional changes I want to submit and discuss with

them. If the Court is ready to take a recess I would suggest

that we could spend maybe five minutes and hopefully resolve

that.

MR. ANDERSON: One thing may encourage Your Honor in

that direction, the defense is not going to present any more

evidence. We rest.
 Page 38 of 248

THE COURT: All defendants rest?

MR. MOFFITT: Yes.

MR. WILLIAMS: Yes.

THE COURT: Did you come to any conclusion about

whether you want me to instruct on the failure of the

40

defendant to testify?

MR. ANDERSON: Yes, I do.

THE COURT: You do want, that?

MR. GETTINGS: Yes.

MR. ANDERSON: Yes.

MR. MOFFITT: A couple other matters it seems to me:

One involved the Hintz memorandum. Your Honor, and the

redactions which aren't in there —

MR. ROBINSON: We did that last night. We substan-

tially went along with all of your redactions with one or two

minor exceptions. I think that's something you are going to

want to look at before they go to the jury but we don't

intend to refer to the specifics of any of the parts that you

sought redactions of during our closing argument,

MR. MOFFITT: Can we have that kind of agreement

with the Curtis redaction, too?

MR. ROBINSON: That's something we had better look

at first.

MR. MOFFITT: I think we need to look at the Curtis

THE COURT: I am not going to take a long recess

because I want to start this jury at 10:00.

There is no more -- the Government putting on

 Page 39 of 248

anything else?

MR. MARKHAM: We have one matter, Your Honor, apart

from this very brief summary witness, we proposed to call

41

another witness —

THE COURT: Wait a minute. This very brief summary

witness.

MR. ROBINSON: That's obviated by that.

MR. MARKHAM: All right. The only witness we will

put on if we cannot get a stipulation. The witness would

testify that their experts and agents had access to the

records at the warehouse from on and after the indictment.

They have said it twice in their case that they didn't

have access, once through Richard Welsh and once through

the expert.

MR. GETTINGS: Yesterday said they weren't really

contending that. But I think that given some of the cross

examination of him and his reliance on his not having

access to the records —

MR. ANDERSON; Your Honor, he didn't say he didn't

have access. He said he didn't have the records was what he

said. And the fact the Government cross examined and there

was a potential access but the Government has made the argu-

ment all along that the two million-plus documents were at

all times available and in fact the combined costs to copy

those portions which were copied and those which were

necessary for trial preparation and were necessary by the

client to conduct the ordinary course of their business was

 Page 40 of 248

a huge expense. The fact that —

42

THE COURT: I am not trying to resolve how the jury

should treat that. If you can't work it out in a stipulation

then you can call him.

MR. MARKHAM: A five-minute witness.

THE COURT: Um hum. So I'll take a short recess.

Then we'll hear that witness- I would expect to go right

into the closing arguments.

MR. ROBINSON: Yes, sir.

MR. MARKHAM: Yes.

THE COURT; All right, okay.

(Thereupon, the conference at the Bench

was concluded, and the following proceedings were

held:)

THE COURT: We'll take a short recess.

(Whereupon, at 10 o'clock a.m., a short

recess was taken.)

THE COURT: Yes, sir?

MR. MARKHAM: Your Honor, if it please the Court we

have a brief stipulation that we have just reached that

will reduce the number of witnesses in rebuttal by another

one-May I read the stipulation that's been agreed upon?

THE COURT: Yes. When the parties have stipulated

to something, members of the jury, that is something that

need not be proved, and you should accept it as proved.

MR. MARKHAM: The stipulation that has been reached

is as follows: "After the search of October 5th and 6th,

 Page 41 of 248

43

1986, the defendants and their agents had access to

the records and documents taken during that search."

Thank you. Your Honor.

MR. ANDERSON: Your Honor, there is one loose end.

Could we just approach?

THE COURT: Yes, sir,

MR. ANDERSON: One more in open Court, Your Honor,

and then one we need to approach the Bench on just

briefly.

MR. ROSSI: Your Honor, as part of the defendants'

case I just want to move into evidence Exhibits QQQQ-34,

35 and 36, the portions which I have given to the Clerk,

and I understand there is no objection.

MR. ROBINSON: That's correct. Your Honor.

THE COURT: They will be received in evidence.

(Defendants' Exhibit Nos, QQQQ-3 4,

35 and 36 were received in

evidence.)

MR. ROBINSON: The Government also has a few-

exhibits which I think we can be rather quickly moved in

by way of rebuttal. I have discussed them with Mr. Rossi.

These all relate to prior testimony of Mr. LaRouche. They

are first of all Exhibits 49-C, D and E. Next would be —

may I have just a moment. Your Honor?

(Pause in the proceedings)

43-A and 43-B. For the benefit of all counsel, I

should mention that 43-B is a copy of one of the Wayne

 Page 42 of 248

Hintz

44

memos, the March 30th, 1985, memo. It has been redacted in

43-B in precisely the same way it was when it was

introduced through Mr* Hintz' testimony as well.

MR. REILLY: Just to clarify. Your Honor, the

LaRouche transcripts are coming in only against Mr.

LaRouche, as I understand.

MR. ROBINSON: That's correct. These are his

statements, that's correct,

THE COURT: They are only to be regarded as to him?

MR., ROBINSON: That is correct.

THE COURT: All right*

Anything else by way of rebuttal that the Government

is going to put in?

MR. ROBINSON; I believe there is one further

stipulation, Your Honor, which Mr. Rasch will read.

MR. RASCH: Yes, Your Honor. This is a stipulation.

The parties stipulate that there were injunctions issued

preventing the distribution and ordering the recall of the

book Dope, Incorporated, in the countries of Peru and in

Venezuela. On September 2nd, 1985, the injunction was issued

in Peru. On February 8th, 1985, in Venezuela.

THE COURT: Anything else?

MR. ANDERSON: Just the one thing at the Bench.

THE COURT: Yes.

(Whereupon, a conference was held at the Bench with

 Page 43 of 248

45

1
Court and counsel, out of hearing of the jury, and
2
reported as follows:)
3
MR. ROSSI: Your Honor, Mr. Robinson has indicated
4
me he would like to play the portions of the tape of the
5 Boston Grand Jury testimony of Mr. LaRoucher those portions
6
that relate to the same portions of the transcript that the
7
Government has admitted in evidence. I have requested and he
8
is opposed and therefore we are bringing it to the Court,
9
that those portions only be played in context and what has
10
happened is I have introduced portions of the Grand Jury
n testimony of Mr. LaRouche which include the Government's
12
portions and additional portions either before or after that
13
portion, and those are now in evidence as part of what I
14
just introduced. I would object to him playing his portions
15
out of context leaving us to later play our portions out of
16
context. I think the whole thing should be played at once.

17 It doesn't make sense otherwise.

18 MR. ANDERSON: The transcripts are in. I think

19 there shouldn't be any playing. But if there is going to be

20 a playing, the jury is going to have it. They can read it.

21

The Government can argue what they want to argue, and we can

22 argue what we want to* I see no point in playing it, but if

23 there is going to be one, then they are going to have the

24 same thing twice. Because in order for us to play what we

25 consider significant, which is what the Government has, we

 Page 44 of 248

46

have to play a little bit before and a little bit after so

they are going to hear essentially the -- they are playing

it twice* I don't understand why we don't just get down to

argument now.

MR. ROBINSON; May I call Mr. Markham up here.

MR. MARKHAM: I don't think I am even going to play

it. I apologize. I don't think I am going to play it.

MR. ROBINSON: That takes care of that.

MR. MARKHAM: We reserve the right to reply in

10 rebuttal if it's appropriate. I am not replaying the
11 LaRouche in my argument.
12 THE COURT: If you want to, we'll take it up again,
13 more than just a single extract out to be played in

14 fairness.

IS MR. MARKHAM: I do plan to play the Billington tape.

16 THE COURT: All right.
17 MR. ROBINSON: The same portion previously played.
18 MR. ROSSI: Thank you. Your Honor.
19 THE COURT: All right. You can use your hour-and-
20 three-quarters any way you want. If you want to play tapes
21 during it, that's fine with me.
22 MR. MOFFITT: One other matter, Your Honor. It's
23 Exhibit OOO-C-T regarding redactions. I don't know what the
24 Government's problems are with the redactions.
25 MR. ROBINSON: I don't have any problem with the

last line.
 Page 45 of 248

47

What's the problem here? You want that first

paragraph?

MR. MOFFITT: No. I want this paragraph here, the

vague recollection --

MR. ROBINSON: We can take that out.

MR. MOFFITT: And this here.

THE COURT: Can't you all take this up later? I

would like to get on with the argument unless this is going

to be referred to.

MR. ROBINSON: I think we can take that up later,

Your Honor.

To the extent I may refer to any of this, it's

not going to be in the portions that you have a redaction.

MR. MOFFITT: Fine.

THE COURT: Are you ready to go?

MR. ROBINSON: Mr. Markham is ready to go.

THE COURT: All right.

(Whereupon, the conference at the Bench

was concluded, and the following proceedings were

held:)

THE COURT: Members of the jury, to give you some

idea of what's going to occur, you are now going to hear

the closing arguments of counsel today.

I hope to charge you first thing tomorrow morning,

I mean 10:00. Then you will get the case for deliberations.

The charge will probably take about an hour, an

48
 Page 46 of 248

hour-and-a-half. So you will have the case for deliberation

tomorrow. We are not going to keep you overnight after you

get the case for deliberation. But we will want to stay in

session until the case reaches a verdict, that is successive

days. So we will go Thursday, Friday, Friday if necessary

and Saturday if necessary.

All right, Mr. Markham.

MR. MARKHAM: May I proceed, Your Honor?

THE COURT: Yes, sir.

MR. MARKEAM: In this country, we don't try peole in

criminal Courts for their ideas. We don't bring them to the

bar of justice to determine the sincerity with which they

talk about AIDS, SDI, world recovery, world famine, or

anything else. You are sitting in what we lawyers refer to as

the jury box. The three of you in the front are for the

purposes of this in the jury box. You are not in a ballot

box. This case, and you sitting in the jury box, is for the

purpose of looking at the issue which Mr. Robinson raised in

his opening statement, the way in which the LaRouche

organization raised its money.

The ends, however noble they may be, and whatever

you believe of the sincerity of the defendants, whatever

credit you wish to give them for the ideas that they were

talking about, is not the point. It does not however noble,

justify lying to people to get the money to do what you

want

43
 Page 47 of 248

to do.

Elizabeth Sexton's money belongs to Elizabeth Sexton

Lita Witt's money belongs to Lita Witt. And so on. If those

people want to give money for the most noble cause in the

world, fine. If they want to give money for the stupidest

cause in the world, fine. That's another American principle.

It's ours to give if we have earned it.

But if on the other hand Elizabeth Sexton and all

the rest of them say they can't give it, they need it, it's

theirs, but they are willing to lend it, then you cannot

under our law lie, make misstatements, tell half truths,

fabricate, in order to induce them to loan by not telling

them the whole truth.

Your Honor, may either I or the Marshal put up the

first of the charts that was referred to yesterday- Thank

you.

(Whereupon, the Marshal set up the

referenced chart.)

THE COURT: Do you want the easel over there or back

here? Because I am going to keep you at that podium or

somewhere close by it. So if you want to approach that easel,

you may want it somewhere else.

MR. MARKHAM: I don't care to approach it but could

I ask it be turned a bit more so the jury can have an

easier time seeing it?

50

That's fine.

Mr. Reilly, can you see?

MR. REILLY: Perfect. Thank you, Mr. Markham.

 Page 48 of 248

MR. MARKHAM: You have heard from some of the

victims of the borrowing, but this case involves a scheme

to borrow large sums of money. In fact, the charts prepared

by the defendants show the extent of the borrowings.

If you look where the orange is, you are looking

at the scheme. In 1983 there was a modest increase in

borrowing over 1982. That is the orange figure. In 1984 the

borrowing skyrocketed. 1984 was when Mr. LaRouche brought

Mr. Wertz into the head office to orchestrate a national

fundraising effort. The loans skyrocketed.

You will have the exhibits to look at when you go

back into the jury room, and you will see that by March of

1985 the man who was then responsible for trying to manage

whatever loan repayments could be managed, Wayne Hintz, who

testified, wrote, he wrote a memo in March of '85 to Mr.

LaRouche and Mr. Wertz and Mr. Rose. Mr. LaRouche, the

evidence is, is in charge of this organization. Mr. Wertz

was in charge of fundraising. And Mr. Rose was in charge of

loan repays, to the extent that there were any.

Those are the three people, by the way, who lived

on Ibykus farm.
That memo in March of 1985 by Wayne Hintz says,

51

1 1984, that big orange column there, was the year of the loan.

2 We borrowed $10 million, approximately, in 1984. Now, their

3 expert's chart says $12 million, but the Wayne Hintz■ memo

4 warned of $10 million in early 1985. And he warned that

5 90 percent"of that $10 million was coming due within a year,

6 and that something had to be done.

 Page 49 of 248

7 Attached to that, memorandum of his were memoranda

from two of the fundraisers, or at least which had been

seen by two of the fundraisers: P G and J

R Those two memos which were attached to the

primary memo, set forth their concerns about people who had

not been repaid.

So that as of 1985, with the first skyrocketing —

I'm sorry, as of 1985 that's the second skyrocketing, they

knew they had problems with the 1984 skyrocketing. They kept

on borrowing. After that memorandum they borrowed a lot of

money from Elizabeth Sexton, a lot of money from Mrs.

Landegger, a lot of money from Dorothy Powers, a lot of money

from Goodwill Post, and on and on.

And Goodwill Post, and Elizabeth Sexton, and

Dorothy Powers, and everybody that you heard from is but a

very small portion of the unrepaid loans that you are looking

at up there.

This is a case about the total borrowing. The

callousness used when people wanted their money back.

52

The failure to call thera up with the common decency to

say, "Yes, we have your $112,000. Yes, we assured you that

it was safer than in a bank. Yes, we assured you you would

get it back on time* But there has been a problem."

Elizabeth Sexton didn't even get that kind of

a phone call. Instead, they kept on borrowing. And

those orange figures kept on getting taller, and

taller, and taller.

 Page 50 of 248

Just to make it clear that they were not

simultaneously paying back everything that they owed, I

would ask if the Marshal could put up the second chart that

they prepared.

(Whereupon, the Marshal put up the

referenced chart.)

MR. MARKHAM: On this second chart that they

prepared, orange is again the rate of borrowings. You can

see that from the time Will Wertz was placed in charge of

fundraising by Mr. LaRouche that the orange line looks more

like a cliff than anything else. You will also see that they

have on that same graph put in their loan repayments, and that

is the green line. It is self-evident that it is nothing

like the orange line.

They weren't giving back what they were bringing

in. They weren't keeping their promises. Most of these

loans, according to the Hintz memo, are one-year loans. And

'85 was

53

as bad from the standpoint of loans as '84. The '84 loans

became due. They weren't being paid back.

Incidentally, that green line, however lower it

is than the orange line, is inflated, because in it is

included not only money actually given back but the amount

of money that they could get people to forgive under their

loan forgiveness policy. .

You will remember the testimony that it was decided

that the policy would be that once the loans were received
 Page 51 of 248

the people would be called back when they became

due and asked to forgive. Not one of the victims that you

heard from, not one, said that when they were initially

called and asked for loans that they were told about this

forgiveness policy. Not one of them said that they were told

that, "We have financial problems that might make it

impossible to pay you back or to pay you back on time.11

Not one of them was told that these people were

so dedicated to Mr. LaRouche and to their perception of

his security needs that if it was decided that some costly

outlay had to be made —

MR. MOFFITT: I object. Your Honor, may we

approach the Bench?

THE COURT: Objection overruled.

MR. MARKHAM: That if some costly outlay had to be

made, that that would take precedence over paying them

back.

54

They weren't told about any bank seizures, or that people

were asking for the loans. They were just given a false,

rosy picture, with assurances that the money was safe.

There comes time for the money to be repaid. The

picture has changed. Oh, well, now, let me tell you a few

things. And the stories begin. If in fact they bothered to

call back-J R called Elizabeth Sexton virtually

every day in early 1985, asking for money. She got over

$100,000. When it was gone, when there was nothing left, she

asked her to go and borrow from the bank. When the bank
 Page 52 of 248

called Caucus, because the bank knew, the testimony

is that the bank knew that if it was loaning money it was

loaning it to her to give as an investment to Caucus, and

that Caucus was going to be responsible, according to

J 's plan, for the repayments.

The bank called J . Jo called back Mrs.

Sexton and said, "Forget the bank loan. They are becoming

too inquisitive." Banks do that. Banks ask things like,

"Tell me of your financial situation. Prove it to me. Send

me documents. What is your repayment rate?" All those things

that maybe Mrs. Sexton should have asked, and certainly in

hindsight she should have asked, but the law of mail fraud,

the law of scheming to defraud, protects everyone, not just

sophisticated banks.

55

It protects Elizabeth Sexton from falsehoods

and half-truths. It protects Goodwill Post. It protects

Audry Carter.

The defendants are charged with three, with two

separate crimes. And Mr. LaRouche, as you know, was charged

with the third crime. The third crime is the charge that he

conspired to cover up his tax liability. And Mr. Robinson

will be addressing that when I close.

The charges relating to the loans break down into

two: the first is that all of the defendants are charged with

conspiring to commit loan fraud. In the second, the

defendants are charged with scheming to use the mails to

commit the loan fraud. A scheme is a pattern of conduct, a

 Page 53 of 248

course of"conduct, or a plan, and T submit to you the

evidence is that there was a pattern of conduct.

It started every day at 9 o'clock. They came in,

They got their briefing. If they weren't in the head office,

they got a briefing through the mail and they picked up those

phones and they started with the rosy promises that if you

give us your money, you will be repaid. And it went on, and

it went on past the point when they all knew that there were

problems of repayments.

Richard Yepez told them early in the game before he

left in the summer of 1984 that the repayments weren't

being made. They kept on borrowing. Wayne Hintz alerted
them in

56

writing in March of '85, and they kept on borrowing. And .

they kept on borrowing pursuant to a plan or a pattern of

conduct.

Obviously, a scheme to be illegal" under the mail

fraud statute has to be fraudulent. Fraud is simply dis-

honesty. It is the intentional misstatement of fact known

to you to be false, or it is facts stated by you with reck

8 less disregard of the truth. The facts, of course, have to

9 be material. No one here is charging any wrongdoing because

10 they may have said something about a political belief that

11 may or may not be true or may or may not be viable. Those

12 are not material to why people lend money.

13 Materiality is something that a reasonable person

 Page 54 of 248

14

would rely upon, and reasonable people rely upon statements

15 like, our money is safer than the bank. We always repay

16 people. You heard a tape recorded conversation of Mike

17 Billington saying to Audry Carter, in February of 1986, two

IS years after this mess, "Audry, don't worry about it. I know

19 your interest means a lot to you, but not even our enemies

20 have ever said we don't repay people on time."

21 That is a material statement. The evidence is that

22 that statement is false, it is knowingly false, it is a lie,

23 by their own documents* He said it to induce a loan.

24 But in addition to out and out knowing falsehoods,

2
you are not allowed, you are simply not allowed under this

57

law to make baseless, false, misleading statements that

have no basis in fact.

We are as safe as a bank. We are safe. You will

get repaid on time. People are lining up. Why the book

alone will make enough to pay you back, no problem.

Those are baseless, and given the financial circum-

stances with which all of. the defendants are aware, were

aware, those were reckless, and they shouldn't have been

made

An example, I am trying to insure my barn, and I

tell the insurance company I want it insured for fire. If at

the time I am on the phone talking to him from my kitchen, my

barn is on fire, and I don't tell him, and I know it, I have
 Page 55 of 248

committed an intentional misstatement. If the barn

has been on fire five times in the last year, and I am

sitting in my kitchen and I ask for some barn insurance and I

say my barn is the safest fire-free barn in the world, and I

don't even look out the window to see whether it's burning,

that is reckless, and that is precisely what these defendants

did and precisely why you have two orange towers on the chart

behind that chart, two tall orange towers. It is not

reasonable to conclude that those orange towers would be

constructed unless people believed that they would get their

money back,

And if you don't think that these people who

testified and the others didn't want their money back,

read

58

the letters that they wrote. I will not read all of them,

but I will read some of them.

After Elizabeth Sexton had given J

or at J 's request given Caucus everything she

had, $5,000 first, then another $5,000, then 525,000, then

another $25,000, then another $25,000, then $14,300, then

$5,000, then $4,000, then-$2,000, then going to*, one.-bank-..and

that didn't work and then going to another bank and

borrowing $4,000, After it was gone, and it became due, and

Elisabeth Sexton wanted the promise fullfilled, she didn't

even get a phone call. Jo was out in Chicago

helping some woman get elected from Indiana, working on the

phone team. If there is one thing the evidence will show,

 Page 56 of 248

they had access to phones. And they could have

called, and they didn't.

Then Elizabeth Sexton wrote, "Dear J , since

you were the only one that I have had financial dealings

with, 1 am directing this letter to you. I am a confused

patriot. I tried to help, and it appears was destroyed in

my effort." This is in evidence. It is one of the Sexton

exhibits, and you will have it.

"You cajoled me steadily and relentlessly by

phoning nearly every day. You told me my money would be

safer and worth more with CDI than in a bank or in my

investment house. You said the more money I would lend CDI,

the more money I

59

would make."

I am skipping parts of it. "When you were sure I

had reached the bottom of my money last summer, you asked me

to borrow $50,000 from the bank and laughed at me when I said

I didn't approve of borrowing, because I was afraid of being

in debt. You replied, there was nothing to fear, that CDI

would faithfully meet each monthly obligation. I tried

borrowing the money and as you know, when the bank became too

inquisitive, you called it off."

"When April 13 arrived, the day my $100,000 note

was due, no one was honest or courteous enough to get in

touch with me."

According to Mrs. Sexton's testimony, shortly

after tis letter was sent, P G called her and

 Page 57 of 248

said, "J is out now. She got your letter, and

she cried.11

P G assured Mrs. Sexton that somebody

would take care of the problem. No one did. While it may

have been fine for J to have cried,

Elizabeth Sexton wished she had cried before she took every

dime that Elizabeth Sexton had.

Getting no money as a result of this letter and

only yet one more fake promise over a phone to P G ,

she wrote Mr. LaRouche and said, "Are you aware that CDI

holds my money, and that I gave it to them, and that they

loaned it, but it's money that I had been living on. I need

60

it back. Can you do something?"

Mr. LaRouche writes back -- these are ail in

evidence -- "Dear Elizabeth Sexton" — I am quoting — "Be

assured there has been no reneging on promises by J

or anyone else linked to me."

I respectfully submit that is a false statement.

There had been reneging, there is a whole orange tower of

reneging by the time this letter was written. By the way,

this letter is written in May of 1986, and the letter to

J was written in April of 1986 after the money

became due.

Mr. LaRouche goes on to say something else, after

he explains that it's his enemies that got him down and they

couldn't pay and since 1984 we have been under attack and

they have taken all of our money. Of course, none of that

 Page 58 of 248

was told by J to Elizabeth Sexton

when they were milking her. Now, of course, it's very

convenient to blame everyone else in the world,

He says, quote, "Constant audit and other monitoring

shows that there is no voluntary avoidance of loan repayments

by CDT."

You have heard of nothing but voluntary avoidance

of loan repayments. They have money. They have money for

the purposes that they want to spend it on. One of the

exhibits in evidence is Richard Welsh's documents, their

61

auditor, the one who worked with their expert, the one that

marshals all the financial records on the computer. Exhibit

15-0, which you will have, is, it's got both a yellow and a

red sticker on it. It talks about Ibykus improvements, money

spent, on Ibykus at a time when Mr. LaRouche is telling some

nice woman in Connecticut that they can't even pay her back a

dime of her money, not all of it, not a dime, not so much as

a postage stamp will they give her, at a time, ladies and

gentlemen, when they are listing the same period of August of

198 6 the following improvements: cattle facilities for

Ibykus, $3,900; fencing for Ibykus, $11,000; high-tensile

fence gates, $4,000; land preparation, $6,000f pond

construction, and I repeat, pond, p-o—n~d, little water in

the ground construction, $97,000.

And he says constant audit and other monitoring

shows that there is no voluntary avoidance of loan

repayments
 Page 59 of 248

Who made them put that pond in? No one. They

chose to put it in. They chose to spend almost the entire

amount of money that they borrowed from Elisabeth Sexton

to put in a pond instead of paying her back.

It goes on. The horse barn cost $82,000. The

cattle cost $20,000, the fencing cost $30,000.

By now, ladies and gentlemen, if this money had

been spent, we would have repaid Elizabeth Sexton, Lita Witt

and Dorothy Powers.

62

Fish stock, that's only $700; rock wall is $15,000;

landscaping, $33,000. By now we have paid off yet more of

these people who were told, gee, we can't because the

enemies are all over us. Landscaping?

Now, we have taken the position in this case that we

do not dispute their perception of the risk to Mr. LaRouche's

security. Some of these are security expenses, but wouldn't

it have been nice if these individuals going into this scheme

had been told, look, our perception is this guy is in a lot

of trouble, and if we think there is somebody coming to get

him, then all bets are off. If people make a loan under those

circumstances, then they deserve the risk because they have

been informed of it. But none of these people were told about

it. And even if they were, what bogeyman coming to get Mr.

LaRouche is scared away by a well-landscaped property? By a

pond? By a swimming pool? By a riding track? Those are costly

items. That money wasn't theirs. That money was the people

that you heard from, and the many, many, many other people up
 Page 60 of 248

on that big orange column. I keep referring to it as

the one behind.

The painting of the house was $38,000; a new

furnace is $10,000; driveway is $33,000; garden installation

is $13,000; swimming pool construction is $19,000; the deck

next to the swimming pool is $6,500; the riding ring was

$4,600. The recreation barn cost $88,600; $4,100 and $400

for the

63

different things. The guest house cost $15,000, $9,000 and

$8,000.

The road cost $67,000. The farmland improvements

totalled $3 09,000. There is no any evidence that they

ever earned a dime from that farming or from the landscape

or the road or anything else.

Now, in addition- of course was the hundreds of

thousands of dollars put into the Ibykus property. You heard

that they used Terry Anderson to borrow the mortgage money

until they could pay it off. But they paid off $900,000 to

him, and in addition they had to put up some $400,000 apart

from all these expenses that I have read, just to get it*

It's acres and acres and acres. in fact, only one of which

acres was made secure, according to their expert. The rest of

it you could walk across. Anybody could walk across. It

wasn't needed for security. And 199 acres of prime Leesburg

farmland would have gone a long way towards paying back some

of the principal that was owed or certainly could have set up

a fund to start paying back the principal. But they didn't do

 Page 61 of 248

that. And they didn't do it for the reason that you

heard from the witnesses who were former members.

Mr. LaRouche has instilled in his followers an

arrogance about how right they are and about how wrong

everybody else is, and people don't deserve their money, and

it's ours, not theirs, because we are saving the world; and

6'4

Mr. Wertz would say how/dare they demand theiromoney back.

And Mr. Spannaus would say how dare they demand

their money back, given all the wonderful things we are

doing.

Again, I do not want to debate with anyone whether

what they were doing was wonderful. In this country, they

have the right to do it* But they do not have a right to do

it while they are lying to people to finance their

operations, their trips overseas, their trips to go to India,

their trips to Europe, their trips to South America, their

accompanying foreign governments to help with the eradication

of drugs is all fine and even laudable if you are doing it

with your own money. But if you are doing it at a time that

these nice people who trusted you are waiting by a phone that

no longer rings, then it's a crime. And it is a crime to

write somebody and say, "Constant audit and other monitoring

shows that there is no voluntary avoidance."

She writes Mr. LaRouche back, and she says,

"It's gratifying to know that there has been no reneging.

Where is my money?"

And Mr. LaRouche writes back to her and says — this

 Page 62 of 248

is his second letter -- "I should inform you that I

have had no financial interest or executive authority over

the affairs of Caucus Distributors."

You heard their expert yesterday. Mr. LaRouche is

switching of course. In his first letter he is telling her,

65

gee, our enemies are all over us and we couldn't pay.

MR. MOFFITT; Your Honor, I object. I came ..to the

Bench about that yesterday. Precisely about that point. If

I have to, I will come to the Bench now and tell you what

it means.

THE COURT: All right. Maybe you .had better. (Whereupon, a

conference was held at the Bench with Court and counsel,

out of hearing of the jury, and reported as follows:)

MR. MOFFITT: Testimony was elicited from the expert

with respect to Count XIII- I made an objection at that time

because of the whipsaw effect of that testimony. They are now

using that testimony in the loan case. And arguing it with

respect to the loan case. And they said at that particular

point that the only purpose of getting that testimony in was

with respect to Count XIII.

THE COURT: I believe that's right.

Objection sustained.

MR. MARKHAM: I assumed I can refer to the other

parts of the letter, Your Honor?

THE COURT: Refer to it all you want but it's the

testimony of what's his name —

MR. MOFFITT: I want the jury instructed that was not

 Page 63 of 248

admitted for purposes of the loan case at that

particular point.

66

THE COURT: I will,

(Whereupon, the conference at the Bench was

concluded, and the following proceedings were held;)

THE COURT: Members of the jury, you are instructed that

the testimony of the witness yesterday with regard to Mr.

LaRouche's employee status which was referred to by counsel just

a minute ago■is only related to the Count XIII, the tax count and

must not be considered by you with regard to any other count in

the case.

MR. MARKHAM: He tells her that he has no executive

authority over or financial interest in the affairs of Caucus

Distributors. Yet you have heard from witnesses testifying before

yesterday; you have heard from Charlie Tate. You have heard from

Mr. Bardwell. You have heard from Mr. Yepez. You have heard from

Mr. Curtis that Mr. LaRouche dictates the finances of this

organization through Will Wertz. As Pan Cowdery, and I am not even

going to try her Italian name, Francesca-sontething or other said

from the stand, when a couple of people from New York were at Mr.

LaRouche's home performing one of the many seranades for him, they

had flown down to do that. They had flown down with money I suppose

that Mrs. Sexton would have wanted to have back rather than to have

Mr. LaRouche have a concern, but that aside for the moment, Pam

Cowdery and some others said, look, do you know what Wertz is doing

in New York? Everybody is spending every

 Page 64 of 248

67

hour on the phone. They are working themselves to death.

It's not good* And Mr. LaRouche said, Will is doing what he

is doing based on my authority. He has my authority to do

this. You people are stupid and Will is acting with my

authority in doing what he is doing.

Yet, when it comes time to talk to somebody about

the little matter of the -$112,000 that was promised, he

has no executive authority over anything.

Mr* Anderson referred to him as a square peg in a

round hole. I respectfully submit he makes himself a square

peg when he sees trouble coming in the form of a round hole,

and when the trouble coming is in the form of a square hole,

he makes himself into a round peg. He makes himself whatever

is convenient to duck the moral obligation on his organiza-

tion, and the legal obligation of his organization.

He goes on to tell her, "Any rxonperformance in

loan repayment has been solely the result of wicked

operations by adversaries of CDI."

What about the pond? What about the pool? What

about the property in Southern Virginia that they purchased

with hundreds of thousands of dollars? What about the

purchase of Ibykus for $100,000? What about the garden? What

about the guest house? Those are funds that would have been

available, and those are not the result of wicked moves.

Those are the result of something that they wanted to do.

 Page 65 of 248

68

Fine with their money, but not with his, with hers.

He says there has been no discretionary nonperfor-

mance. I respectfully submit that the evidence is that there

has been nonperformance. He ends this letter with the

following -- this is now three full months since her

principal was due, the principal that she said she needed to

live on. This is now long since she has ever had an interest

payment from these people, and he says: "I will pass" — I am

quoting — "I will pass the letter along to GDI for their

information. That is my only authority in the matter.

Otherwise, all I have to recommend is that you let your

conscience guide you."

The way J treated Elisabeth Sexton

shows that she had no conscience* The way Mr, LaRouche

responded with his assurances that there was no money around

shows he has no conscience with respect to this matter. It

shows the very arrogance that the former members talked about

when they said that Mr. LaRouche would exhort them to use any

means short of thievery and thuggery, that Mr. LaRouche Would

tell them people don't deserve their money. We do.

When people would come to Mr. Wertz and say, "What

are we going to do about loan repays? People are calling in?"

Wertz would say, "This is war. In war there are

casualties."

Well, they treated Elizabeth Sexton and the others

as their casualties, only they didn't tell them going in

that
 Page 66 of 248

69

that was going to happen. Going in, they simply said, "You

will get repaid."

Because of that, and because of all the evidence in

this record that shows that they knew when they were calling

these people about the bad financial situation and the loans

piling up, we ask you to find beyond a reasonable doubt that

when they made the representations that they made, over the

telephone, the assurances that they made, that they were

acting with intent to deceive in order to get the money in

the first instance.

Alternatively, we are asking you to find that in

making the representations that they made, they acted with

reckless disregard of the truth, with a conscious avoidance

of finding out what the real situation was, with a failure

to. look out the window to see if the barn is back on fire

for the fifth time this year, because had they looked, they

would have seen massive debt, massive failure to repay, and

as of the time that the bankruptcy froze everything, they had

$25 million of unrepaid loans, and they had assets of

$300,000 tops, plus some subscriber lists.

And for people to be on the phone taking the money

of other people in that circumstance is baseless and

reckless And given what they had put in their own memoranda,

it's also intentional.

Now, before I go into some other specifics, talking

70
 Page 67 of 248

about the fundraisers, I want to step back for a moment

and talk about the indictment.

Count I, as I said, charges the conspiracy count.

Count II through Count XII charge mail fraud counts, and

each of the mail fraud counts articulates a separate mailing

that was placed in the United States mails, in order to

further the scheme. You have heard that there were many,

many mailings in this case to the victims. The Grand Jury in

returning the indictment selected one mailing that related

to each of the loans about which you have specifically heard

testimony-1 and the exhibits that show those mailings are in

evidence.

The United States Government through the Congress

has outlawed the use of the United States mails to further a

scheme to defraud, and one of the things we have to prove

beyond a reasonable doubt is in fact that the mails were used

to further the scheme. In each of the cases, in each of the

counts that we charge the mail fraud count, the substantive

mail fraud counts, we charge that a particular letter was

deposited in the mail and sent to one of these victims with a

particular promise to that victim, therefore furthering the

scheme.

In most instances, the mailing involved is the

letter of indebtedness or the promissory note, which

clearly furthers the scheme. One exception to that, and

that is

71

Count XII, the last of the substantive mail fraud counts,

 Page 68 of 248

specifically charges Lyndon LaRouche with furthering the

scheme to defraud, the entire scheme including both of the

orange towers, by a specific mailing to Elizabeth Sexton,

the

last letter I read to you, where he tells her that there

was no discretionary nonpayment/ that there was no money

available, that he had no executive authority over CDI, and

that she should let her conscience be her guide.

That letter with those falsehoods sent to her in

order to induce her to try to forgive that debt at a time

when there were swimming pools being built and all the rest

of it, we have charged as a separate substantive mail fraud

count. That is Count XII.

Count I, as I said, is the conspiracy count. We will

be addressing that in a little while. Counts II, III, IV, V,

VI, VII, VIII, IX, X and XI are substantive counts charging

the individual fundraisers who had responsibility for making

the false statements to the lenders that you heard from. For

example, there is a count charging J with

sending or causing to be sent through the United States mails

a letter of indebtedness or a loan form to Elizabeth Sexton.

The Judge will tell you in his instructions that

in order to be responsible for the mailing you have to be

a participant in the scheme but you don't have to be the

one

72

who actually goes over and drops the letter in the mailbox.

If it is reasonable for you to assume based upon the practice

 Page 69 of 248

that a mailing would be sent out to further the scheme and

you do something to cause that to happen, you are guilty if

we prove that beyond a reasonable doubt and the other

elements. And in connection with each of these defendants,

the solicitors, it is clear from the evidence that the

practice was that if a loan was received, the machinery would

crank up, a loan request form would be filled out, the

initials of the exhibitor would be placed on it, and that

paperwork would result in a loan form going to that person.

And so we have charged the individuals for these

mailings. And you will see when you go through the counts

which individual was charged with which mailing in connection

with which lender, because it's all listed there on one page.

I believe it's page 33. Of course, there is evidence that

there were more loans taken in that just those specific notes

referred to in the indictment. There were more loans taken in

with each of the victims referred to. For example, I think

the one on Goodwill Post talks about $15,000. She loaned

$45,000. Elizabeth Sexton I think talks about one of the, one

promissory note, but she had many promissory notes.

In addition of course, this scheme is broader. It's

alleged to be broader than the victims that you heard from.

It is alleged to include the orange post. It is alleged to

73

include the massive year of the loan, $10 million that Wayne

Hintz tried to warn them about. The similar figure for 1985,

and the somewhat reduced figure for 1986.

Now, in addition to charging the individual

 Page 70 of 248

solicitors on the mail fraud count, Lyndon

LaRouche and Will Wertz are charged in every mail fraud

count because the evidence in this case is -that they set

this in motion.

They ran the organization. They determined the

fundraising quota. They insisted the quota be met. They

insisted these fundraisers get on the phones and make their

quotas at a time when they had been told the loans were not

being repaid, and they knew the fundraisers were getting

loans because they monitored the loan situation. The fact

that at sometime in 1985 they put a ceiling on loans doesn't

matter, because they never started to reduce the loans at the

rate that they were bringing them in. The first priority was,

quote, "Get the money."

That's what they told the fundraisers to do. When

the fundraisers didn't do it, they were humiliated. Their

sexuality was attacked. They were held up to ridicule. Get

the money. Your job is to make the money.

And because of that, because they were pressing

and pressing and pressing for the very acts that occurred

at a time when they knew that there was a loan problem,

they are charged as aiders and abetters. Aiding and

abetting is --

74

the Judge will give you a longer definition of it and

obviously what he says on that controls, but I am giving you

an encapsulation of it -- aiding and abetting constitutes

willful association with the crime and doing some act to

 Page 71 of 248

help carry out the crime, to help the crime occur.

Mr. Wertz everyday got everybody together in a

meeting, read them Paton,. told them this was a war footing,

told them that Lyn's life depended on it, told them that they

had to raise this money because Lyn said the money had to be

raised. He raised the quota from $300,000 to about $600,000

over the course of two years. He demanded that it be met.

They kept on borrowing. And he kept on making them borrow.

And he kept on telling them to make their quota. And they

kept on doing it. And when J n was on the phone

to Elizabeth Sexton and and thereafter Dennis

Small were talking to Goodwill Post about Dope, Inc., they

were doing it because Will Wertz had said that was a fine

idea, and Will Wertz was their manager and he controlled them

and they responded to him and this is a hierarchy.

If nothing else has been shewn beyond any doubt, it

is that these people adore Lyndon LaRouche, and they do what

he wants. When Will Wertz comes to New York on Mr. LaRouche's

authority and Will Wertz sets up a program because Lyn says

it has to be set up, and you don't have to take just Mr.

Bardwell's word for that or just Mr. Curtis' word for

75

that.

The Spannaus notebooks that you have heard a little talk

about, the testimony is that he writes down what Lyn says and what

other people say and that when he is talking to others, he refers

to what Lyn has said. He refers to Lyn as Lyn. You have heard

these identified as Mr. Spannaus1 notebooks. They have Ed written

 Page 72 of 248

on the front of them.

In the notebook covering the period of December '83 to

March of '84, on a January 14, 1984 meeting, Mr. Spannaus writes

in his notebook, "Lyn, parenthesis at Sunday meeting, $200,000 to

$210,000 operating budget, 40 a week TLC. Set priorities to

repair infrastructure. Consolidate NCR fund-raising. Don't let

sectors slip back into old ways. Will plan good."

Your Honor, may I have Exhibit 7, I believe it is, P,

the Robert notebook?

THE COURT! It's apparently in evidence, but you all

retrieved them, we are told.

MR. MARKHAM: Well, we'll have that for you when you go

into the jury room. That is a notebook in which Robert

wrote down the following: "Will Wertz:, Will W.:" underlined in

the upper left-hand corner and the testimony was that that is

where Mr. G attributed his source, "Will Wertz: question

for LHL." And this is in June after the plan had been in effect

according to the testimony of the

76

witnesses in this, first notebook.

Six months later, the question from Will,

"Questions for LHL," and of course the question would go to

LHL, because he dictates the finances- "Question for LHL

from. Will. Need strict guidelines on repayments. Proposal

forget or forget indefinitely."

You can read it.. You will read it. It's been

clipped. Incidentally the portions of these voluminous

notebooks that we wish to give you to refer to, we have

 Page 73 of 248

clipped, and we have tried to make the little

arrow part go to the part we want, but look at both sides

of the page.

That conversation occurred in June of 19 84. I

believe it was June 14th. It was the first entry in Robert

's notebook of that day.

In Mr. Spannaus' notebook, an entry later on in

the day, at least it's not the first entry, Mr. Spannaus

writes, "Lyn, loans. Forgive or forget."

Mr* Wertz and Mr. LaRouche controlled the operation,

what was written in the notebooks says what they wanted to do

about the loans, what each of the witnesses who took the

stand says happened to them. We were asked to forgive, and if

we didn't forgive, we might as well forget.

And so, they are charged with aiding and abetting.

Mr." Spannaus is charged with aiding and abetting, not on

every count, because he did not have the daily operation

with

11

1 fundraising like Mr. Wertz did or the ultimate authority and

2 ultimate dictation that Mr. LaRouche had and exercised by

3 saying forgive or forget; but he is charged with those counts in

which the form that he devised was used to make the false promises

to the lenders. You remember that Mr. Yepez went to Mr. Spannaus

and talked about a new loan form, and Mr. Spannaus said no, we -

don't want something too formal. We don't want these people to

think that we are in the business of making loans, which they were

in the business of borrowing

 Page 74 of 248

10 money. That's what they were doing.

11 We want to do a letter of indebtedness. You will

12 hear that Mr. Spannaus, or you heard that Mr. Spannaus went

13 to a lawyer about the wording of the letter of indebtedness.

14 Didn't tell that person anything about the underlying loan

15 problem, devised a form which was used, and every single time

16 a letter of indebtedness that Mr. Spannaus devised was used,

17 he is charged, because his handiwork containing his

18 phraseology of the promise to be repaid went through the

mail. At the time he made those promises, he had already

20 written in his notebook, "Loans, forgive or forget."

23 And that's not all he had written. He wrote, "Loans

22 are our curse."

23 He wrote, "None of the companies have ever made a

24 profit except" — "None of the publishing companies have ever

25
made a profit except EIR. " He wrote that, and so he knew

78

that.

He had written about a conversation with Shelly

Asher in which someone is quoted as saying, "We don't

pay back loans."

He had written many different things in his

notebooks that show his knowledge, in his own handwriting,

that they weren't paying back loans, and they are marked, and

you can read them.

Not only that, he was a legal adviser for this

organization, and people would come to him with

 Page 75 of 248

complaints of lenders to be repaid. You heard of

one example where somebody came to him in 1984 and said

there is a lender complaining about their money, and Mr.

Spannaus toeing Mr. LaRouche's line about how people

don't deserve their money back said quote, "Who does he

think he is?"

And that's the arrogance with which these people

treated other people.

You heard a tape of Mike Billington. In the short

remaining time, I am going to replay that tape and make some

comments about it again. Before I do, I wish to point out to

you that the evidence of the solicitors that we offer against

each of the solicitors in not only the extraordinary promises

that they were making, given the financial situation, but the

fact that J had written a memorandum, which

indicated that she knew about the loan problems, or at

79

least if she didn't write the memorandum, it's copied to

her, and it involves her lenders. She had been told by Mr.

Yepez that there was a loan problem. She kept on borrowing.

The same with Mike Billington. He kept on borrowing. P

G had been told; he kept on borrowing. P

G wrote a memo about his problems. He kept on

borrowing. Dennis Small .— take a look at the Dennis Small

contact card, which is in evidence. It's about eight or nine

pages of millions of dollars of loans that he raised, and

they are all listed in whole numbers.

For Van Sickle, he lists 200* She got $200,000. For

 Page 76 of 248

Post, he lists 15, She lent $15,000- The numbers

are in thousands, and therefore the totals are millions. And

you heard his assurances to people that they would be repaid

at a time when there was no business to make those

assurances.

You heard all of the witnesses testify about the

assurances. And I submit that there is no evidence in the

record to contradict that testimony, but there is evidence

that corroborates it. And that is because Mr. Billington

taped some of his phone calls, and here is one of them

which shows you a little freeze frame picture of exactly

the kind of assurances that each of these citizens took the

stand and said they received from these solicitors who were

making the calls at the request of Mr. LaRouche and Mr.

Wertz.

{Whereupon, counsel played an excerpt from the tape.)

80

MR. MARKHAM: (Interposing) If they are due, they

will be coming out. They didn't. And he said it as casually

as if oh, yes, that's absolutely no problem.

(Whereupon, the tape excerpt was resumed to

be played.)

MR. MARKHAM: (Interposing) The letter of indebtedness

he referred to is the form crafted by Mr. Spannaus. Now, Mr.

Spannaus went to a lawyer for the phraseology of that form,

but Mr. Spannaus, the evidence is, didn't tell that lawyer

anything about the rotten state of their loan repayment plan.

But instead he kept that to himself, got the legal

 Page 77 of 248

phraseology of the form, which included a promise to

repay and then sent, had the organization use that form in

connection with Counts III through Count XII and a lot of

other counts and a lot of other mailings that are in

evidence.

(Whereupon, the tape excerpt was continued to

be played to the jury.)

MR. MARKHAM: (Interposing) Oh, yes, absolutely.

That1s not a problem. I hear you saying that you really need

the interest payments. Absolutely. That was false. Listen to

what he says next.

(Whereupon, the tape excerpt continued to be played.)

MR. MARKHAM: (Interposing) Nobody has ever tried

to imply that our loans are not good. Wayne Hintz had

already tried to say that directly. Richard Yepez had said

81

it. The complaints were coming in. Will Wertz was screening

the phone calls so these people wouldn't have to be bothered

by the little matter of people saying they needed their

interest back.

Everybody was saying that the loans were a

problem. They were obviously a problem. That was obviously

a lie.

So you have heard one little freeze frame of what

each of these victims told you were the assurances made to

them and by which, in which they placed their trust and by

which they got burned, and burned badly, and burned by a

group of people who just think thatthey are better and can
 Page 78 of 248

use the money better than anyone else.

One moment.

Since we are splitting up the argument, I needed

to consult.

I want to very briefly touch on Count I, which is

the conspiracy, which charges all of the defendants with

conspiring together to commit the loan fraud, which is

shown on the two orange towers over there, and which is

referred to apart of it referred to specifically in Counts

II through XII.

A conspiracy is an agreement of two or more

people to do an illegal act. The illegal act in this case

is the fraudulent solicitations and the mailings.

The agreement involved does not have to be written

82

1 down, although loans, forgive or forget, comes pretty close

2 to written down. The agreement doesn't even have to be

3 expressed. It can be tacit. It's just a common understand-

4 ing among individuals that they are engaged in a course of

5 conduct to defraud. If you find that there was a common

understanding,

and we submit that the evidence is overwhelmingly that there

was, loans forgive or forget, and that's what happened and

that's what they did, and that is what they didn't tell

people.

If you find that, that there was a common

agreement, that alone does not equal a conspiracy, because

there has to be, and the Judge will tell you more about
 Page 79 of 248

this, one overt act to further the conspiracy. If

two people agree to rob a bank, that alone is not a

conspiracy, but if one of them in furtherance of that

agreement, goes to a hardware story to buy a hammer to break

into the bank that night, the act of buying a hammer, if

it's done in furtherance of the conspiracy, makes it a crime

because it's being done in furtherance of an illegal

conspiracy, even though the act itself, going to the

hardware store to buy a hammer is in other circumstances

legal.

The evidence about a conspiracy, I have addressed

in the context of the other evidence, the common

understanding about who needed the money, the common

understanding

83

about how the money was to be raised, the common understand-

ing about what was to be said to lenders when they called

back in, that they were to be screened and all the rest of

it

The overt actions in furtherance of the conspiracy

are listed in the indictment. The Court will tell you we

only have to prove one. We have proved scores. Each of the

mailings is an overt act.* The statements made over the

phone are overt acts. The letters that went to and from are

overt acts, and they are all listed.

I respectfully submit to you, ladies and gentlemen,

that the totality of the record, the evidence in this case

shows that these defendants got together to advance their

 Page 80 of 248

goals, and they did it with the common

understanding that they were going to do it with other

people1s money, and that they were not going to be honest

when they tried to get that money. And that as a result of

their misstatements, their overstatements and their

omissions of material facts, a lot of people lost a lot of

money, and as a result, we ask you to find beyond a

reasonable doubt that they are guilty of the charges. Thank

you.

MR. ROBINSON: Good morning, ladies and gentlemen. I

am going to talk to you just a couple of minutes about the

tax charge. Before I do that, I am just going to follow up

on something Mr. Markham said for just a few moments about

the individual fundraisers. He mentioned to you the

84

memorandum that Wayne Hintz wrote in March of 1985 and said

that attached to it were two other memos. I just wanted to

take a few seconds to highlight those memos to you because

I think they are that important.

One of them was a memo dated December 10th, 1984,

and it was entitled, "Special report on major contributors.

." That's December 10 of 1984. It was either

written by or she got a copy of it, one of

the two things happened. In any event, it listed the status

of 's major contacts. Here's one of the

things it said, "Arthur Hawkes has loaned us a lot of money.

I feel that if he gets $2,000 a month interest payment, we

will be able to renegotiate the $50,000 due in January-"

 Page 81 of 248

Here is another thing it said. "Helen Murray. She

has never gotten any payments as far as I know and it would

be very important to get her some kind of payments as she

has been doing a lot of organizing, raising money from

friends, et cetera."

Ladies and gentlemen, that memo shows that in

December of 1984, knew that loans were not

getting repaid. They certainly weren't getting repaid on

time. This shows that she knew people had not been getting

their payments. It shows that she knew they had to write up

special requests to try to get people money. That memo was

85

written before any of the substantive counts in this case.

That was written before she talked to Cecilia Landegger,

before she talked to Elizabeth Sexton. This is the very

beginning of the time frame of everything you have heard

about, and when she talked to the lenders, she didn■t

admit to any of this. She didn't admit they were having

trouble making payments.

The other memo, the one written by P G

is exactly the same- It's dated December 13th, 1984. In that

he says for example Paul Wicke (phonetic), "If we pay him

$1,314 a month and pay back approximately $2,500 other

dollars, he will be calm and there will be a lot more

money."

That says it all. He knew that people weren't

getting repaid. He was suggesting repayment as a means of

getting more payment out of this guy. And he wrote that memo
 Page 82 of 248

before he talked to any of the victims whose

testimony you hear in this case. He wrote that before he

promised Max Harrell in 1986 that he could get his money

back, and he wrote that before he promised Jerry Corbin in

1985 that he would get his money back. P G knew

those promises were false when he made them to those people

over the telephone. And that memo proves it. The other memo

proves the same thing about .

As for Mr. Small, remember, he was the

specialist in selling Dope, Incorporated, Remember what

Chris Curtis

86

told us about that. He said they just made that up. They made up

figures that they used over the telephone. They just made up

things that they said to people about Dope, Incorporated. Sure, we

have seen a couple of books put into evidence about Dope,

Incorporated but that just leads to two questions: one, why

weren't the books published when the people loaned the money in

the first place? Like Elizabeth Sexton lending $100,000 in 1985;

and second, if the books were published, what happened to the

money from the books? How come nobody got repaid? That was Dennis

Small's specialty, and like Mr. Markham said, those contact cards

show him pulling in millions of dollars.

I submit he knew those loans weren't going to be repaid

either. Plus, one final note on Mr. Small: he borrowed $25,000

from Martha Van Sickle in one shot on one day. Remember how much

you have heard about the loan ceiling in this case? Remember how

the loan ceiling was supposed to be $150,000 a week? Well, that

 Page 83 of 248

was supposedly because the organization understood there

was a limit to how much debt they could bring in. Well, Dennis

Small almost doubled that ceiling in one day. He knew that loan

wasn't going to be repaid, and it wasn't.

Now, turning to the tax case for just a couple of

minutes. Mr. Billington I think I needn't cover further. The tape

speaks for itself about the false statements he made

87

Turning to the tax case, Mr. LaRouche is not charged

with tax evasion. He is not charged with failing to file a

tax return. And there is a simple reason for that. We don't

know how much money he made. We don't know what his income

was. Instead, he is charged with conspiring to hide his money

from the Internal Revenue Service. He is charged with

conspiring with other people to pretend that he had no income

Now, basically he is charged with trying to fool the Internal

Revenue Service, Now there are a couple of things that have

gone into evidence that you haven't heard yet. Let me just

read two of them to you. These are transcripts of some sworn

testimony that Mr. LaRouche gave back in 1984, when he was

asked about his circumstances. It will just take me a few

minutes to read it.

"Question: Do you pay the rent at Woodburn Farm?" "Answer"

— and this is Mr. LaRouche talking — "I personally? I

personally do not pay the rent at Woodburn Farm."

"Q Does Helga LaRouche pay the rent at Woodburn Farm?

A I do not believe so.

 Page 84 of 248

Q Do you know if anyone pays the rent?

A I assume someone does.

Q Who do you assume pays it? -

A I don't know.

Q Where does the money come from?

88

A What do you mean?

Q Where does the money come from which pays for your

stay at Woodburn Farm?

A Obviously, I don't know, do I.

Q Did you eat dinner last night?

A Yes.

Q Where did you ea-t?

A At the house.

Q Was there food in the house?

A Yes.

Q Did you buy it?

A No.

Q Did Helga LaRouche buy it?

A Not to my knowledge.

Q Who bought it?

A I don't know.

Q With what money?

A I don't know.

Q How do you take care of daily living

expenses, Mr. LaRouche?

A I don't know.
 Page 85 of 248

Q Do you live free?

A I don' t know."

Here's another excerpt from his testimony.

"Q Who paid for the suit you are wearing, Mr. LaRouche?

89

A I don't know, Mr. Cavalier (phonetic)" — the name

of the lawyer.

"Question: You just found it in your closet, did

you?

A No. It was a gift by persons associated with me

some years ago.

Q Are the other suits in your closet ones that you

went out to a store and bought?

A I have on no occasion gone out to a store and bought

any articles of more than a haircut, a $5 price in the past

ten years.

Q Do you know who pays for all the suits in your

closet?

A I do not, Mr. Cavalier. I do not know in detail. I

have some general idea that they are gifts from people

associated with me or other."

The point is, he is denying any knowledge of his

financial circumstances. He is trying to pretend that this

money just kind of filters into his life without him

having any idea where it comes from, and that's obviously

absurd. And you saw the absurdity of that in this trial.

Rick Magraw bought his suits. Rick Magraw testified

that he did. Rick Magraw bought his suits with money from
 Page 86 of 248

the LaRouche organization. And Mr. LaRouche knew

that. But when he gave that sworn testimony, he had to try

to hide all

90

of that, because he was trying to hide the fact that he

had income.

And he did a good job. That is exactly why we can't

figure out today exactly how much income he had.

Let's take a little bit of a look for just a few

minutes at what the income did show -- excuse me — what the

evidence did show about his income.

This Rick Magraw checking account, the budget for

that was $2,500 a week or thereabouts. The accounting records

that resulted from that that the expert witness was looking

at yesterday showed that more than $200,000 were billed to

something called advisory expenses between July and December

of 1985. That is just part of the year. More than $200,000.

We don't know how much of that went to Mr. LaRouche. We tried

to piece it together the best we could with the minimal

incomplete records that Mr. Magraw and his wife kept, but we

don't know how much of it went to Mr. LaRouche.

And remember this, he only had to get $1,081 in 1985

to be required to file a tax return. Maybe that's why when

they asked him where his clothing came from and who paid for

his housing, he said I don't know, because he had to try to

distance himself from it. That was all part of the scheme to

hide his income from the Internal Revenue Service.

Ladies and gentlemen, the practice of paying all

 Page 87 of 248

of Mr. LaRouche's personal expenses standing alone

is enough to

91

show that he had income during the years in question. We

don't even have to get into Ibykus Farm and the housing and

everything else. That is enough to show that he was getting

income, and he was doing it in a way that was trying to

hide it.

But let's talk about the housing and the meals for

just a second. Mr. Markham went into great detail about how

much was spent on Ibykus, I don't need to do the same. There

is a question about whether or not that's taxable income to

him. The Judge is going to instruct you on what the law says

about that. And what the law says is that under certain

circumstances, and employee of a business doesn't have to

report income for housing provided to him. Well, the first

problem with that with Mr. LaRouche is that every . chance he

has gotten in the past, he has distanced himself from this

organization. He specifically said he wasn't an employee. He

has specifically said that he wasn't affiliated or associated

with Caucus Distributors or Campaigner Publications.

Now, all of a sudden, we are in Court on trial on

a criminal tax case, and the defense says he is an

employee.

It's a little bit too late to make that change of

course for Mr. LaRouche. He is not an employee. If he is

not an employee, then housing and the lodging is taxable

to him.
 Page 88 of 248

9-2

Second, the housing and lodging has to be provided

for a noncompensatory purpose. All I mean by that is, you

can't just decide not to pay somebody's salary and give him

a house instead. There has to be a business purpose for it.

Well, we submit that on the evidence in this case, it's

clear that what this organization did, what Mr. LaRouche and

his associates did was enter into a scheme to avoid paying

him a salary, to avoid paying him normal wages like your

normal person gets, for doing things like writing books. And

instead, gave him a house.

In effect, what they did was just try to

circumvent the normal procedures so that there would be no

way of figuring out how much he had really gotten in the

way of inc ome.

Now, as I said it's not just a question of whether

or not he had income but it's also conspiracy to conceal that

income. First of course he didn■t file tax returns. Second,

when he Was asked about it, you have heard the testimony, he

gave what can best be described as misleading answers to the

questions asked of him. You have seen the records, what

little of them there are. They don't show how much money went

to Mr. LaRouche, and there were a lot of different people

involved in that record keeping process. The Magraws, Richard

Welsh, many people were involved in this scheme to conceal

his money.
 Page 89 of 248

93

When Richard Magraw takes the witness stand, all of

a sudden he is describing things that have been given to Mr.

LaRouche, like clothing as gifts. Isn't it curious that that

is exactly what Mr. LaRouche said when he gave the sworn

testimony that I read to you a moment ago. Obviously, these

people were working in concert, Obviously, they were working

together to try to create this false impression that Mr.

LaRouche doesn't have any income.

A few other specific instances: Richard Welsh goes

to talk to Murray Altman in the early 1980's, to prepare

tax returns. He tells him that Mr. LaRouche is living with

friends. That wasn't true. New Benjamin Franklin House

Printing Company was paying $5,000 a month rent for an

apartment for Mr. LaRouche. He wasn't staying with friends.

In December of 1984, Richard Welsh, after Mr.

Morganroth's conversation that he testified to yesterday,

after that, Richard Welsh sits down and starts to come up

with some schedules to see how it would affect the corporate

tax liability if they backed out everything paid to Mr.

LaRouche, if they treated it all as gifts. There is only one

reason he could have been doing that, and that was because

in December of '84, they were thinking about trying to

reclassify all of the money spent on LaRouche as gifts. Why

gifts? Because gifts aren't taxable.

Obviously even then they were worried about money

94
 Page 90 of 248

paid to him three years earlier, worried about trying to

cover it up, trying to change what it was called so Mr.

LaRouche wouldn't have a tax liability. Or that they

could claim that he didn't have a tax liability.

Two other things I want to mention to you:

there are two specific exhibits in evidence.

Could 1 have 20-R and 20-S?

These are two exhibits I ask you to take a close

look at when you get back in the jury room. These are some

vouchers that were submitted for the purchase of things at

Ibykus Farm. You will see right up here it says, "Title," and

it's whited out there, and after that it says, "Enter-

taining," and over the white-out somebody has written in

"VIP," Well, if you hold it up to the light just right, and

those of you who have ever tried to read what was under

white-out before will know what 1 mean. If you hold it up to

the light just right, you can see what it says underneath

that white-out. It used to say, "LaRouche." When it was

originally typed up somebody typed up, "LaRouche

entertaining. This is for formal china and silverware for

Ibykus. Somebody whited that out and put VIP over that.

That is the kind of records they kept. They did

everything they could to conceal when expenses were being

paid for LaRouche. They whited out what little records there

were. 20-S the same way. Exactly the same thing happened.

95

Lastly, you will recall there was testimony that

 Page 91 of 248

a whole series of letters was sent to Mr.

LaRouche by the IRS asking him where his tax return was,

and asking him to explain why he hadn't filed a tax

return.

You will remember Richard Welsh testified that he

received a letter back from IRS at the post office box

that he had given them, but that's not the only evidence

that Mr. LaRouche received those letters back.

Exhibit 7-D, Ed Spannaus' notebook, page 217 —

sorry -- page 204 — here's what it says; "IRS, three

letters, standard form letter, LHL, care of CFL, Citizens

for LaRouche, request of info about tax form. We have not

received 1040 for period ending '81, '82, '83."

Ed Spannaus saw the letters that the IRS wrote to

Lyndon LaRouche asking him about his tax returns. You can

infer from that that Lyndon LaRouche knew that the IRS had

written to him asking him about his tax returns. You heard

from the IRS witness that they never got a response back

to that.

Now, if Mr. LaRouche's status is so aboveboard/ if

Mr. LaRouche has been open and up front about his status,

why didn't he just write back to them? He didn't write back

to them because he couldn't, because he was involved in

trying to conceal his income. It would have been simple to

write a letter back, but he didn't, and that, I submit, is

the final

96

piece of evidence showing that there was a conspiracy to defeat

 Page 92 of 248

the Internal Revenue Service, to try to fool the Internal

Revenue Service, and Mr. LaRouche's involvement in it with

several other people.

Thank you, Your Honor*

THE COURT: Suppose we take a short recess before

defense counsel begin.

(Whereupon, at 11:40 a.m., a short recess was taken.)

THE COURT; Mr. Moffitt?

MR. MOFFITT: Yes, sir. May it please the Court, ladies

and gentlemen of the jury, I promised myself that I was going to

be very low key in this argument because I represent Dennis Small

and there hasn't been a great deal of evidence regarding Dennis

Small or any criminal behavior. about Dennis Small. I just

changed my mind.

I changed my mind because if hyperbole and misstatement

are crimes to acquire money, hyperbole and misstatement to acquire

a conviction is at least as bad.

These two gentlemen over here are guilty. I want to

refer back to my opening. I told you in my opening that I

represent a man, flesh and blood, not a they, not a them, not an

organization, not a group of people, a man, Dennis Small.

Now, Dennis Small is a dreamer and an activist, and I

am not going to back down on that. I am not going to run from it,

and I am not going to hide from you with respect to

97

it. Dennis Small raised money in support of the ideas that

he believed in. And the Government, without objection, has

put in a card of all the money that Dennis Small raised- And
 Page 93 of 248

they told you it was all loans. They just told you it was

all loans, and they know that's not the case.

Why? How does one finance their dreams in America?

How do we do anything? Debt is not a foreign concept to us.

Each one of us has incurred a debt for a dream. Many of you

have purchased your house and incurred a debt. Many of us

have credit cards. Many of us have borrowed from a bank, and

from time to time many of us have asked a loan to be rolled

over. Not because we intended to defraud the bank at the

time that we charged the loan, but simply because circum-

stances were such at that very moment we could not pay back

the loan.

You want, to talk about debt? Think of our Govern-

ment. $1 trillion in debt. And certainly, certainly institu-

tions like Chrysler and Lockheed incurred all kinds of debt

before they almost went bankrupt. Corporate borrowing in this

country is at an all-time high. You can read it anywhere. It

is not a crime to borrow money.

Two principles that we talk about, and only one was

stated by those gentlemen. We don't prosecute people in this

country for incurring debt. We do not have debtors prisons

in the United States. Not here. So when you think about it,

98

think about it in terms of any other corporate entity in this

world or in this country that borrows money. And as you heard

yesterday, borrowing takes all kind of forms. It is okay to

borrow money. There is nothing wrong with it.

And it is also okay to borrow money in an effort to

 Page 94 of 248

grow, even when you are in a negative position, if

you believe that growth is possible. It happens everyday, and

the idea is not to turn your back on the common experience of

this world simply because the Government has created a bogey-

men. They have made a bogeyman out of Lyndon LaRouche. And

they are telling you that it is sufficient to convict any

person associated with him merely because they are associated

with him.

What did they tell you? That Mr. LaRouche says that

they are better than everybody, so that the end justifies

the means. And he has imparted that and they have all lost

their free will and it's a mob running around under the

orders of this man. That's what they are telling you, that

Dennis Small doesn't have any responsibility for himself,

because he is associated with that man. That is not how we

do business in this country. That is not what this case is

about.

In order to dream, we must finance those dreams,

and everybody who is not independently weal thyfinances

their dreams with some form of debt. Everyday.

99'

Now, what happens when you don't live up to your

expectations? When the debt becomes too great? What happens?

Does that mean at the time that you borrowed the money that

you didn't believe that you were going to grow? Or that your

dreams were not going to come true? Because that is what they

are selling here. They are selling that there was debt at the

end in 1987, and they 'didn't grow, and therefore in 1984,

 Page 95 of 248

they shouldn't have made the attempt. That is what

they are selling.

Woe be it to the dreamer if he can't make the

attempt. What kind of society would we live in if those who

dream and made the attempt and failed became criminals

because they failed? That's what's being sold. Think about

it. Think about all of the businesses that have borrowed

money and gone bankrupt. A crime? They didn't expect to go

bankrupt. You have seen what these businesses produce. You

may not agree with it, and I don't ask you to agree with

it. I don't agree with it. But that's not important. They

have the right to try. They have the right to try, to

convince you and I that they are right. And whether we

agree is not important.

This organization was seeking self-sufficiency,

like any other organization. It made investments. It

attempted to sell its literature. It tried to raise revenue

through sales, and clearly, it tries to raise revenue

through the

100

opening consulting businesses. You heard about that. You

have heard about SELA. You have heard about Mr. Richard

Morris. You have heard that they had the best private

intelligence agency in the world. The purpose of that was to

sell information, and to become a think tank and to do the

things that these people have always dreamed about.

Now, the question becomes was it wrong to anticipate

that there was going to be growth and there was going to be

 Page 96 of 248

success, and whether that optimism was wrong,

illegal, unconscionable. That is what it is about.

Now, you have got to ask yourself the question, ■

where does Dennis Small fit into this program? Who is Dennis

Samll? What do we know about Dennis Small as opposed to the

propaganda that you just heard about Dennis Small? Think back

to Goodwill Post. Think back to Martha Van Sickle and think

back to Alan Rither, because that's what we are talking about

with respect to Dennis Small and be mindful that Alan Rither

is a lawyer. He is not a little old lady. Mr. Markham wanted

to make that point. This is not an unintelligent man. This is

not a man who is not skilled in asking questions. He does the

same thing for a living that I do. Use your common sense. He

is an attorney. He has been trained. He knows what questions

to ask, and he knows that he contributed to a political

organization for political causes.

101

My God, the Democratic Party almost went

bankrupt. Should we prosecute everyone because they did,

and they continued to solicit- ,contributions and loans?

Why are we prosecuting these folks? Think about it.

Let's talk about what Dennis Small did and what the

evidence is, not what their wish list was, because what you

just heard was a wish list. We wish we had proved that

Dennis Small solicited money only for Dope, Inc. There is

not one witness that said that. There is simply not one

witness that said that. What they said was that Dennis

Small solicited money around the war on drugs. Dope, Inc.

 Page 97 of 248

was included in that. And you heard, you heard from

General Anyez (phonetic) that he overheard a solicitation

of Dennis Small's about the war on drugs in Latin America,

and that it was truthful- That is what you heard, because

Mr. Markham asked him if he ever heard a solicitation or

had anything to do with a solicitation. You heard that.

Now, did he come here to lie for Dennis Small? Did

he come here not to tell you the truth? Look at Martha Van

Sickle. Exhibit No. 11-1. It has in her own handwriting what

Dennis Small said to her from her. From her typewriter. It

doesn't just talk about Dope, Inc. Look at it.

That's not what was happening. And ask yourself,

ask yourself when you read the indictment what's happened

to part of the Government's case? Part of their case was

102

originally that things were solicited for that didn't

happen. What was the solicitation of the $200,000 for from

Martha Van Sickle? It was for a conference that she went to,

that she observed, and that she said the expenses for were

reasonable.

That's what happened with that $200,000 that Mr*

Robinson wants to know, because she testified to that;

and ask yourself what that soliciation was about. It's in

evidence,

Also in evidence is 11-V. It's a letter to Dennis

Small from Martha Van Sickle. It acknowledges the fact that

the bad publicity is causing difficulty in raising money. 11-

V. You will have an opportunity to read it. Mrs. Van sickle

 Page 98 of 248

was not an unsophisticated lady, and she testified

here that she knew she was taking a risk. She knew she was

investing in a political and humanitarian, to use her own

words, organization. That they were not successful does not

mean that they never intended to be, because you see in order

to prove the scheme, you have got to prove that when they

solicited the loans, they never intended to be successful.

Does that make any sense? Think about it. That the whole

thing was a scheme, that there was never any success

intended.

Now, ask yourself in light of the things that

Dennis Small saw, is that plausible to him? in light of the

reports

ro3

that he prepared, the influence in South America that he saw

through the presidents of Peru and Venezuela, was it plausible to

him that this organization never intended to be successful?

And ladies and gentlemen, ask yourself, ask yourself,

regarding an organization that has had the problems with law

enforcement and financial warfare that they have talked about, if

they never intended to be successful, then they expected to end up

here, because they were being watched. The Kissinger letter, Dear

Bill, to the head of the FBI. How many American citizens can

request that a group of people can be investigated by writing a

Dear Bill letter? Can you do it? Can I do it? I suggest not- They

knew that they were under scrutiny, so a scheme that is never

intended to be successful, the obvious result was clear.

These are not foolish people. You heard the educational

 Page 99 of 248

backgrounds of virtually every person sitting over at

that table. They are not crazy, and they are not foolish. But I

think with respect to Dennis Small, you must ask yourself, did he

believe that this did not intend to be successful? Were his

expectations unreasonable? He wrote the SELA documents, the

documents prepared by this organization to what was compared by

the witnesses to an economic equivalent of the Organization of

American States, That was requested. He met with the ministers in

preparation of those

104

documents. You heard about the Peruvian contract from Sylvia

Bruda. Remember Sylvia Bruda? They didn't talk about Sylvia

Bruda. Did you ever see a more intelligent lady or a more

competent person? She worked on the Peruvian document, the

Peruvian contract. Do you think that she had an expectation

that that was going to lead to business?

Officials of the. Reagan Administration, you saw

them; this is not a figment of anyone's imagination, ladies

and

gentlemen, and most assuredly it is not the figment of Dennis

Small's imagination, because you see it wasn't hearsay to

Dennis Small. No one was telling him the story. He was living

it. He was personally living it. He was the person who was

doing it. This was not a figment of his imagination.

Once again, my friend, Mr. Markham, asked the

question, did you ever meet with Dennis Small? He met with
 Page 100 of 248

Dennis Small and officials from a Latin American

government brought to him by Dennis Small. So when Dennis

Small talked about the war on drugs, this was not something

that someone made up for him. He was a warrior. He was a

participant, and when he briefed people and told them what

he did and what was going on, it wasn't because he had been

told by the evil Ming the merciless. It was because he was

there.

I submit, ladies and gentlemen, he has done more

than anyone else in this courtroom with respect to that. And

we ought to be lauding him for it. Now that he communicated

105

that fact to other citizens to solicit money to continue

that work and to make those organizations grow, that were

doing that work, that wasn't being done by anyone else, is

not a crime. I state that unequivocally. It is not a crime.

And you can't be afraid of that, because when the

dreamer steps out of the dream and decides to realize it, he

should not be afraid that-if he fails, he will be

prosecuted. VJhat kind of society would we live in if we

couldn't attempt to realize our dreams? What kind of place

would we be? I suggest to you that we would be very mediocre

if not out-stripeed by other countries where the dreamer

would be allowed to dream.

Do not be afraid of the ideas. Ideas are important,

and if they are bad ideas, then the fact that they are out

there, it will become clear. To not let the ideals spill

over into this courtroom that there is something evil here

 Page 101 of 248

and that people are sitting under the influence of

some evil presence. That is not important here. The

important thing here is, can the dreamers dream? Can the

dreamers realize their dreams? Can the dreamers try? That's

important. And try the only way they know how.

You know, it's very interesting in our society,

even the wealthy borrow money. Even those who can finance

their own businesses , use other people's money. The

Rockefellers borrow. Everyone borrows. So don't be afraid of

the fact

106

that people borrow. There is nothing wrong with it.

Let's talk about Dope, Inc. for a second. :-__-Mr.

Robinson stood up and asked you why Dope, Inc* wasn't printed

in as many forms or as many times. Remember what the Judge

read you. He read you a stipulation, a stipulation, that

means that both sides agreed, and this is the kind of thing

that really angers me. A stipulation that that book was

banned in two countries. It was picked up off the shelf

because it offends people. Let me tell you, go back and read

it. Go back and read it and you will understand why we have

Dear Bill letters written in this case. It offends. It tells

a story that nobody likes. It talks about banks. It talks

about money laundering. It talks about things that are not

talked about publicly. It is offensive. And in countries that

are less free than ours, it was banned.

And it is offensive. Go back and read it and see who

it talks about. It talks about some of the most prominent

 Page 102 of 248

people in this country and other places. I submit to

you, ladies and gentlemen, that is part of the reason that we

are here.

MR. MARKHAM: Objection, Your Honor. That is a

misstatement of why we are here. It'.s arguing vindictive

prosecution which is a matter for the Court to decide. I

object to that and ask that be stricken.

THE COURT: Objection sustained.

107

MR, MOFFITT: Now there is evidence of what the

fundraisers thought in this case. It was put on by the

Government. Chris Curtis. Remember Chris Curtis? He

testified in 1988 in front of you ladies and gentlemen of

the jury that he was raising money in 1984 and '85 and '86,

knowing that the money wasn't going to be repaid back. That

would be a nice piece if that was the truth. He testified a

year ago in another courthouse, another Federal courthouse,

that all the money he raised, he raised in good faith, that

the people were concerned that the solicitors were concerned

about their contacts, that he was not bombarded with phone

calls from angry contributors, and that he believed that the

organizationwas going to pay back all the loans.

Go back even further- The first time he met with

the police, the FBI and the Virginia State Police, he

told them that very thing.

Now, what happened to Chris Curtis? Why now in 1988

is Chris Curtis testifying the way that he testified? What's

happened to him? What's changed him? What's made his mind

 Page 103 of 248

different? And why after ten hours in Boston

preparing his testimony with Mr. Markham over there, why did

he testify in Boston the way he did? And why was it

necessary to spend five more hours with him between now and

Boston? Because, ladies and gentlemen, if he testified the

way he did in Boston before you, that whole side of the

table would not be

108

there. It would not be there.

All of a sudden, the English meaning of the words

good faith need explanation. They don't mean what they

commonly mean. All of a sudden what he said in Boston is not

true, and has to be read in a totality. He, unlike any other

witness, cannot be asked a question and expected to give a

truthful answer. His whole testimony must be read. His

testimony was sculpted. It was chnaged for this case.

You heard the testimony of the police officers that

interviewed him. Those were his words. Those were his words

Not some figment of anyone else's imagination. You heard

from Chris Curtis that when he raised this money, he did it

in good faith, and he told the police that the first time he

met them, and he told another group of jurors in a courtroom

under oath the same thing.

Are you to believe the new version? Are you to

believe the new version? He also told you something else.

He told you that he knew Dennis Small. He knew that Dennis

Small's brother was a victim of drugs. He had a family

member himself that was a victim of drugs, who died. When

 Page 104 of 248

they were raising that money, that was their

concern, and today with 20-20 hindsight and 15 hours of

playing around with the Government tailoring testimony,

it"s changed.

It doesn't change the facts of what they were

doing when they were raising the money. The most important

10 9

statements that Chris Curtis made were those that he made

originally.

And he still is not sure, ladies and gentlemen,:that he

did anything wrong. And if he did, where is his chair? Where is

his chair over here, because look at Goodwill Post. Who raised

that money? Who closed that deal? Who said that every loan that

was made with Goodwill Post closed the deal? Who said it? Chris

Curtis, He has no chair. He has no chair. They believe he raised

the money in good faith. That's why he has no chair. He has no

chair.

So ask yourself. Read the letters. Exhibit 10, 10

series, those are the Goodwill Post letters. Who are they written

to? Who made out the letter of indebtedness and who was CC on

every document coming from the finance office? Not Dennis Small.

Christopher Curtis.

Let's talk about that particular incident for a second.

It is important to talk about it. Mrs. Post was invited to the

farm. She had dinner at Mr. LaRouche's house and didn't speak to

him. He didn't speak to her. They ignored one another. She was

taken around and shown the facilities. She was taken to Mr. Small's

office and given a briefing. And she was requested to lend money by
 Page 105 of 248

Dennis Small or contribute at that particular point. She

said no. No. So four days later, Chris Curtis called her on the

phone and asked her again, and that's when the loan was given, at

the

110

1 behest of Christopher Curtis.

2 The mere fact that this gentleman briefed her,

3 Mr. Small, briefed her on his participation in the war on

4 drugs was not the reason she gave the money, because she did

5 not give it then. She gave it because of her relationship

6 with Christopher Curtis that has extended well in advance.

7 This gentleman over here is charged. Why is he

8 charged? 9-F is why he is charged, ladies and gentlemen, the

9 card that Mr. Markham made reference to. He raised a lot of

10 money. He funded a lot of things, and an organization like

11 this walks on the money it raises. And if people no longer

12 can raise money, the organization dies.

33 Look at the Goodwill Post documents, because they

14 are important- They are extremely important.

15 Let's talk about Mr. Rither for a second.

16 Mr. Rither1s loan was a two-year loan when it was raised by

17 Mr. Small, Look at the check. I will give you the exhibit

18 number. It's 36-QQQ. The check says two years, and that

19 involved a single $10,000 loan on August 1st. They put in

20

two. I guess they expected you to guess about them, which

21 one they were actually charging him with. But look at the
 Page 106 of 248

22 check. It says two years. The finance office returns a

23 piece of paper and letter of indebtedness that says one year.

24 Arid then it's renegotiated. Mr- Small had nothing to do with

25 either of those two events about when that loan was going to

Ill

be repaid. It was a two-year loan when he negotiated it.

And it was two years from August of 1985, which made it

August of 1986, which was after the bankruptcy.

He is charged. Ask yourself why? Ask yourself

why.

Dennis Small participated. He saw it. You heard

about the situation in Guatemala, and you heard that he

participated. You heard about the conferences throughout

Latin America. Why was he interested in Latin America? Same

reason Chris Curtis was. They both had spent their early

lives there. I want you also to look at Chris Curtis' 171,

because it's real important. It shows the pride that he took

in what he was doing when he was doing it, the debt watches,

the pride that he took in raising money. It's on the 171

form. That's all been changed. He no longer is proud of that.

But he was proud enough of it 1986 to write it the way he

wrote it on his 171. He raised money until May of 1986 before

he left the organization because he thought that the money

could not be paid back. There is not a loan in this case that

dates subsequent to the date of Chris Curtis' leaving the

organization.

Why should Dennis Small be punished for being less

perceptive than Chris Curtis in his own mind? When Chris

 Page 107 of 248

Curtis still struggles? Because that is what they

are simply asking you to do.

112

Now, Mr. Hintz, Mr. Yepez, did they mention Dennis

Small? Did they say that they talked to Dennis Small and

told him that the loans were not going to be repaid? They

didn't. Dennis Small was out fighting the war on drugs. He

was not on the phone. He was not your average solicitor. And

would it be unusual for an organization to take the person

who was on the front line and ask that person to talk to

contributors about what was happening on that front line? Is

there something invidious about that? Something sinister,

something wrong?

I suggest to you that it isn't. And what did he see

on that front line? What did he feel? What was told to Martha

Van Sickle, and what did she remember? She remembered that

people with this organization risked their lives. Is there

evidence of that? Look at SSSS-19 and 12. That is a letter

from the justice minister of Columbia, about threats to

members of this organization.

There is a dedication in the book Narco Trafico. You

will have it. It's a dedication to that gentleman. He was

killed in the fight. That book is in evidence. This man

risked his life. This man believed. But he didn't believe out

of some cosmic smoke or some Svengali behavior of Lyndon

LaRouche. He believed because he was there,

Mr. Rebasa (phonetic) and General Anyez talked about

this man's character. They talked about this man's character

 Page 108 of 248

113

They came here from Latin America to tell you that he told

the truth and that he would abide by the law. That's

important. Arrayed against that, what is the evidence? That

he believed that they would be successful, that he solicited

money in the belief that they would be successful, and that

he tried his best, his best, his physical best to make those

dreams come true,

That is who Dennis Small is, and that's what this

case is about, Dennis Small. It is not wrong to fail. It is

not wrong to fail. It is not wrong to try, and if it

becomes wrong to fail or try, we will lose a great deal of

what has made this country great,

I have nothing else left to say. This is my last

opportunity to talk to you. You will hear a lot of closing

arguments, and you will hear rebuttal. Remember Dennis

Small. Remember what he did. Remember what he tried because

it is important. And even if you don't believe in what he

believes, it is important in our society that people like

him try, and it is important in our society that we not make

it criminal for people to believe and act on those beliefs

and to do something to change something. We cannot be that

afraid of our Government. Thank you very much.

MR. WILLIAMS: Ladies and gentlemen, before I begin

my argument, let me take you back to the beginning of this

case. I am sure all of you will recall that when you first
 Page 109 of 248

114

got here, there were a great number of jurors in this court-

room . And it took us several hours to go through that number

of jurors; and you remember the lawyers were at the Bench,

and at the time we were up there, we were picking jurors is

what we were doing. Not only the Government but the defense

were going through each of. your names and your addresses and

trying to find out who we. wanted and who we thought were the

people who were going to be true to their oath as jurors.

And what I mean by true to their oath as jurors

is that they will decide this case solely on the evidence

as it was presented in this courtroom and on the law as

His Honor will instruct you*

You remember that after you were chosen, after

you were chosen, all stood up and the Clerk asked you,

will you truly try and a true deliverance make between the

United States and these defendants and a true verdict

give, according to the evidence, so help you God.

My recollection is everyone of you said yes. And

that's what we are here for today, to ask you to abide by

that oath and to look at this evidence unemotionally,

look at this evidence without bias one way or the other,

and render your verdicts according to the evidence.

And the reason we picked you was because we had

faith that you jurors would do that. And you are special

people as far as we are concerned, and you are very

special

ris
 Page 110 of 248

people as far as our clients are concerned, because

their freedom depends on your decision.

Before I go much further, let me just remind you of

a couple of the great principles of our criminal justice

system. His Honor will instruct you on these at the close of

the case, after all of us have argued, and tomorrow morning;

but there are three great principles of the criminal justice

system in the United States. And the first is the

presumption of innocence. Anyone charged in the United

States with a crime, whether it be State or Federal or any-

where else is presumed to be innocent/ and that is a

presumption that stays with that person throughout the

trial, and unlike in other countries where you are presumed

to be guilty and the only thing the jury or the judge has to

determine is just how guilty, here, you are presumed to be

innocent until you are proven guilty beyond a reasonable

doubt.

And that is the second great principle of our system

of justice, that the Government has a very heavy burden

placed upon them in criminal cases in that they must prove

each defendant guilty and they must prove element of each

defense that each defendant is charged with.

Unlike a civil case where the burden of proof, the

burden of proof is just by a preponderance of the evidence

or if the scales were tipped ever so slightly in favor of

one

116
 Page 111 of 248

party or the other, in a criminal case, ladies and

gentlemen, the Government must put so much evidence on

that the scales of justice are tipped very, very far.

Finally, the third great principle of the criminal

justice system of the United States is that a verdict has

to be unanimous, that every juror, every juror, must decide

as to each offense that each-defendant is charged with,

that they have an abiding conviction of the guilt of that

person before a guilty verdict may be returned,

Now those are the three great principles. I trust

that you will abide by those and you will abide by the

Court's instructions when you examine this evidence.

Now, before I begin, let me say, too, that what I

say to you today is not evidence, nor is what the

Government said to you today. The purpose of lawyers in

summing up the evidence is to try to show the jury what

they think is important, so far as their case is concerned.

And so what the Government said in its opening, and what I

am about to say, and what all the other lawyers are about

to say, is not evidence. You have to determine the evidence

from the exhibits, and from what the testimony was on the

witness stand, and from whatever stipulations that were

made throughout this trial,

Now, let me talk a little bit about the evidence.

You know that there are two conspiracies charged in this

case

117

There is one in the first count of the big mail fraud

 Page 112 of 248

conspiracy that everybody is in, and then there are several

counts, II through XII, are what are called substantive mail

fraud counts against individual defendants. And then there i

this final conspiracy count that only Mr. LaRouche is

charged in.

And to understand the charges in this case, you have

to understand what has been done by the Government in

bringing this case. What they have done is carved out a

piece of time in the history of this organization, of the

NCLC, and they have said, ladies and gentlemen, that during

that piece of time crimes were committed by these various

defendants. And the piece of time they have carved out in

the conspiracy case runs from July of 1983 through April of

1987, when several companies were put into involuntary

bankruptcy.

Yet — and the substantive counts that they have

charged have specific dates of these notes that were

supposedly mailed on that time, on those specific times.

Finally, the tax conspiracy, which I have nothing

to do with, is a little longer piece of time that you will

see later on.

Now, the issue in this case, the issue as to my

client , as to the substantive counts and

as to the mail fraud conspiracy count, is what was in her

mind at the time of the conspiracy. And as to the

substantive

118

counts what was in her mind at the time she is alleged to

 Page 113 of 248

have solicited loans from Mrs, Landegger and from Mrs.

Sexton on the speicifc dates that are alleged in the

indictment.

Now, the specific loan that she is supposed to have

taken in Count VI of the indictment from Mrs. Sexton

occurred in late November, I think it was November 24th, of

1985. And the specific loan that she was supposed to have

taken from Mrs. Landegger occurred about two weeks later in

December, December, I believe, the 4th of 1985.

Now, those are the two specific mail fraud counts

she is charged with. Let's for a minute look and try to

determine from all the evidence what was in the mind of my

client during this conspiracy, and more specifically in

late November and early December, 1985.

If you will look at this chart over here you will

see that the history of the organization or the loan history

of the organization as expressed on that chart starts in

1979 But we have heard a lot of other evidence that this

organization started as early as back in the Vietnam War

days, back in the late 60's, and developed and grew somewhat

in the 7 0's and then in late 1979, they began to grow at

some more rapid rate.

And if you look at this, the revenues as expressed

by those black pillars there, you will see that from 1979

up through 1986 at least there was a general constant

growth in

119

revenues. I am not saying that that thing has anything to do

 Page 114 of 248

with expenses or deductions or whatever else. The testimony

is that that has to do with revenues. I will get back to that

a little bit later.

Now, Mr. Jackson, would you mind putting that

other chart up there.

Now, you also know from looking at this chart that

that A up there represents the Illinois primary that occurred

in March of 1986. So if that occurred in March of 1986, and

that is the first quarter then of 1986, the last quarter of

1985 is when my client, , is charged with

these two loans that she solicited. And it's at that time

with regard to these specific loans that we have to, that you

as jurors have to try to determine beyond a reasonable doubt

what her, what was in her mind at that time and whether she

had a good-faith belief in the last quarter of 1985, that

these loans that she solicited from Mrs. Landegger and Mrs.

Sexton would be repaid.

Now, how do you go about determining that? I mean

it's impossible to read another person's mind, but you have

to do that as jurors in this case. You have a difficult task

of doing that as jurors in this case. And the way you go

about it is that you use circumstantial evidence, because

you can't go in there and read their mind, and you can't

today go back and examine what was in my client's mind in

December

120

of 1985 or throughout 1985. So you have to use what's avail-

able to you and that's the evidence to determine what was in

 Page 115 of 248

her mind. Mind you, you have got to be able to say before you

can find her guilty that you believe beyond a reasonable

doubt that ~this is what was in her mind at that time, when

she was soliciting those loans.

Now, you remember that the evidence shows that she

was in this organization early on. She came into the organiza

tion in the 70's, that she grew with the organization, that

she was out there, and she did various things for the organi-

zation, and then she was put on a phone team.

Now, this organization, the evidence shows, was an

organization, it wasn't just a political party. It's not like

the Democratic Party or the Republican Party, This is a

political organization, a political movement. Not only do

they run candidates for office, but they publish books, they

publish newspapers, they go out and hold seminars. They do

things with computers and try to convince people and in some

instances do sell their computer products to various

countries with regard to economics and that sort of thing.

They do all sorts of things that you have heard about in this

trial. So it's not just a political party.

But there in a part of this political movement that

raises funds for the organization. It raises two kinds of

funds and in election years, you heard that they raised

121

funds for Mr. LaRouche when he ran for the presidency. That

is that TLCr IDL, those kinds of loans. They were maximum of

$1,000 on those loans. They raised those hinds of things.

But then they had another part of the

 Page 116 of 248

organization, another part of this big

organization, a small part where people who raised

infrastructure loans or loans for whatever the organization

needed, whether they needed to publish a book, whether they

needed to buy some computers or whatever they needed, they

raised money for; or if they got into a crisis and they had

to have some money, they would raise money.

You will remember that the organization was broken

up into regions. There was a regional office in Houston.

There was a regional office out on the West Cost. There was

a regional office in Chicago. There was a regional office in

10
Atlanta. There was a regional office in New York. But you
11
shouldn't confuse the regional office in New York with what
12
was called the national center. They were two separate
13
entities in two separate offices. The national center had
14
its office and it had its own phone team. Each region had
15
its office or their offices, and they had their own phone
16
teams where these fundraisers resided or stayed with their
17
telephones.
18
was in the New York regional
19
offic The phone team in the regiona.1 office. And the only
20
person
21

22

23

24

25

122
 Page 117 of 248

who testified here in this trial about having been in the

same phone team with my client, , was Vera

Cronk. The only thing, as I recall, that Vera Cronk said

about Ms. 's solicitations was that she was a

specials person on the phone team. In other words, she

solicited loans and contributions in excess of $5,000. Vera

Cronk didn't testify about overhearing her solicitation-or

anything else about Mrs. . The only thing she said

as I recall was that she was a specials person.

Now, let's get to the time period that we are

talking about. In 1973, July of '73, if you look over here on

this chart, you will notice that from back in 1979 — I guess

that's — I'm sorry. 1983 or '84 is when this chart starts. In

'84, and you follow that black line, you will notice that

although there are ups and downs in the black line, from the

beginning of the line up until the Illinois primary, it is a

general continuum of an upward growth. And ,

who was down in the regional office, soliciting loans, would

know of that because these daily briefings that were

testified about. There were these little news things that you

heard testimony about of the daily briefings that were sent

out everyday to everybody in the organization, and they

briefed them on all sorts of topics, on various nev/s topics,

on the situation with money, and the deal, and you can assume

that she got those briefings and that

123

she knew, having been in the organization all this time,

of this sort of upward trend in revenues.

 Page 118 of 248

And when in early 198 4, that this testimony

begins about her, Mrs. Sexton and Mrs. Landegger, first

talking to her, she was in the regional office. She was

dealing with various people, not only these two women, but

with other people that she had made loans to.

Now, the evidence about this memorandum that both

prosecutors have talked to you about this morning and both

prosecutors have emphasized very much, and it?s important to

them because they feel that this puts, this memorandum,

shows that J knew in December of 1984, that

there were problems with loans.

Now, I want you — either of the prosecutors, by the

way, neither of the prosecutors told you the exhibit number

of that exhibit* And they have a reason for not telling you

the exhibit number of that exhibit, becuase as I cross-

examined whoever it was, I guess it was Wayne Hintz who

testified about this memorandum, the exhibit number is 36-D-

2, is the exhibit number.

When I cross examined him on this memorandum, I

brought out that the memorandum says, J is, in

several parts, J is meeting with him today, referring

to Nick Anderson. Then it says J should be notified.

And then later on it says, it is vital that J

124

be kept briefed on payment plans so that she can brief them in

advance, meaning her contributors.

And then it goes on to say, J has signed most

of the papers. If you will remember, the cross examination,

 Page 119 of 248

Mr. Robinson got up and says, well, the memorandum

also said I did this. I did that.

Well, the I refers to the person who is writing the

memoranda, who is obviously not J from the

face of it. I want everyone when you get back there in the

jury room, the first exhibit I want you to look at is 36-D-2

and you read it for yourself and see if she wrote it, as Mr.

Markham was suggesting to you or heard it. He also said,

well, she either wrote it or she heard it. Or she got it.

That's what he said twice in his --

Now, let me ask you, the only evidence on the

face of this document that she would have any knowledge

about is that it says on the back of it, "Copy to J

."

Now, if I write a letter to Joe Blow, and I put

down the bottom of the letter, C.C., send it to one of the

jurors; do you think that you would want to be bound by proof

beyond a reasonable doubt that you had knowledge of that

letter? I mean, the letter is not sent to you certified mail.

There is no evidence that you received it. There is no

evidence on the face of this that she got that letter; and

the Government is doing their utmost not only one of them but

both

125

of them got up here and tried to convince you that she knew

about that and that she wrote it or that she got a copy of

it,

Where, where, ladies and gentlemen, where is the

 Page 120 of 248

proof beyond a reasonable doubt that that

knowledge was in her head at that time? I submit to you

that it is just not there.

That is why they get up and scream in their

closing arguments about it, because they know there isn't

any evidence there.

I am not saying she didn't know there were people

out there that weren't getting paid. She had her lenders and

people that she dealt with who obviously at times were not

getting paid.

Now, she is down in the region, she is in the

regional office, and she knows that some of her lenders and

some of the people who she is dealing with from the regions

may not be getting paid on time or may need money and she

is sending requests; and her other people in the region are

sending requests up the line. And who is it that is up the

line? Well, we know that Yepez was up there for a while in

early 1985 or '84. And then Hintz comes in in about August

of '84. And Hintz stays there up the line from the regions.

He stays there from late, or from August of "84 until he

leaves the orgakization some time in '86.

Now, Hintz is getting memoranda from all the

1-26

1 regions, and he is writing these memoranda that are introduced

2 into evidence based upon you know what's coming up from all

3 the regions. Now, there is no evidence in this case, there

4 is no evidence in this case that my client, J e ,

5 has the scope of knowledge or the understanding of what's

 Page 121 of 248

6 going on all over the country that Hintz does, because Hintz

7 is right up there where everything is coming up. What did

8 Hintz say? What did he testify to? He said that until he

9 left the organization in mid-19 36, it was either May or June,

10 I don't recall, mid-1986, six months, six months after my

11 client solicited these loans in December of 1985, and late

12 November of 19 8 5, he said until he left the organization in

13 June of J.uly or May or June, of 1986, he still believed that

14 these loans could be paid. That was what was in his mind-

15 He had an overview of all of the loans. j-That^swhy they put

16 him on the stand, to give that overview of all the loans.

17 But my client down in the New York region, who

18 doesn't have that overview, they are coming here, and they

19 are telling you that you ought to convict her. You ought to

20 convict her of crimes for which she could go to jail because

21 she ought to have --

22 MR. MARK HAM: Objection, Your Honor. That is the

23 second time. That is improper argument. The Court decides

24 whether there is going to be such punishment, not

25 Mr. Williams.

127

MR. WILLIAMS: I said for which she could go to

jail, not that she was going to jail.

THE COURT: The jury should not give any considera-

tion to the matter of punishment. That is solely an inquiry

the Court must make. Your inquiry will limited to whether a

defendant is guilty or not guilty,

MR. WILLIAMS: Very well, Your Honor.

 Page 122 of 248

Anyway, they are attributing to her in December and

throughout 1905 and particularly in late November and early

December of 1985 knowledge that she, that what she ought to

have done was at that time to have the knowledge and to quit

■ taking loans, whereas, Wayne Hintz doesn't say that he has

such knowledge or he has come to such opinion until mid-

1986.

I submit to you, ladies and gentlemen, that on

that basis alone, on that basis alone, there must be a

reasonable doubt in your mind as to whether my client had a

good-faith belief throughout 19 85 and late November and

early December of 1985, a good-faith belief that these loans

would be paid back.

I submit to you that if you look at that chart

and you see how that income was coming in, and you examined

this case from her perspective. You have to because the law

says that you are going to have to determine what was in

her mind at that time she solicited these loans, that the

only conclusion you can come to is that she did not know,

and she

1-2 8

had a good-faith belief that those loans would be repaid.

Now, let's examine just a minute Mrs. Sexton and

Mrs. Landegger.

The Government makes a big to-do about how these two

women were bamboozled. But let me discuss them just a minute.

The evidence shows that they were — they came in or they came

in contact with, the organization in mid to late 1984 Mrs.

 Page 123 of 248

Sexton was on her way from Connecticut up to her

summer place in Maine. She ran into some people from the NCLC

at a liquor store in I don't know where on her way up there.

I am not from that part of the country obviously. So anyway,

she ran into them and ,she got a subscription to one of the

magazines or newspapers. And then she began receiving calls

from various persons, and they briefed her on what was going

on in the organization and briefed her on what was going on

in the world; and she eventually was contacted by J

And she testified that she talked to Mrs. R

almost every day. Almost every day but at least every other

day, and her conversations over the phone were 45 minutes to

an hour. And she also was receiving the publications that

they were printing. She was receiving the newspapers that

they got. And she obviously, obviously was a sophisticated

woman. You saw her testify on the witness stand. You look at

people and you can tell how sophisticated they are. I mean,

129

you don't have to just listen to their voice. You have a

right to determine a witness1 credibility from their demeanor

on the witness stand, the way they respond to questions on

the witness stand, the way they respond to cross examination

on the witness stand; and how they basically act. And just

as in everyday life, you walk up to somebody and you talk to

them, I mean you determine for yourselves whether they are

telling you the truth or not, not only by what they say to

you but by their body language, by how you evaluate then.

 Page 124 of 248

And that is what you are supposed to do as jurors.

And Mrs. Sexton, if you do that kind of

evaluation/ and you see how the loans progressed and how she

was conducting herself and how Mrs. R was

conducting herself throughout 1985, you have to come to the

conclusion that she knew what was going on, that she

obviously was sophisticated and smart enough to Jcnow what

was going on.

What happens after she decides that she is going to

turn against the organization? She goes out and hires some

high-faluting lawyers, former attorney general of Connecticut

I think she hired some lawyer by the name of Brownell, who

was in the Administration, in the national Government. You

wonder, you wonder from Mrs. Sexton's testimony what was

it -- I mean she' is reading the newspapers. She is
talking to

J every day. She obviously knows the crisis

that the organization is going through. She knows the threats

130

they are getting. And she keeps lending money to the organi-

zation, until, until April, April of 1986 is when she first

complains by writing a letter to J after

J had moved in late 1985 out to Chicago.

Now, what happened? What happened as far as Mrs.

Sexton is concerned? I submit, ladies and gentlemen, that

the clear inference is, that when the Illinois primary was

won in March of 1986, and when all these press articles hit

the newspapers and hit the newspapers throughout the country

 Page 125 of 248

and the editorials and everybody else was writing

about how crazy this bunch of people were, who had won these

two elections, Mrs. Sexton started having second thoughts.

And that's what happened. And that's what happened.

I submit to you that you can draw that

inference from the testimony in this case.

Now, Mrs. Landegger was about the same sort. Mrs.

Landegger was a very sophisticated woman. She had lent some

money to the organization. She obviously was concerned about

what her friends might think if something hits the

newspapers about who she has been lending this money to. If

you could look at the history of her loans, and her

relationships with the organization, it changed just about

the same time, and I 'submit for the same reason.

But that's not the issue in this case. The issue

in this case is what was in Jo e R s mind at

the

131

time she solicited these loans. Can you say beyond a reason-

able doubt that you have an abiding belief that she misrepre-

sented these people, that she lied to these people, that she

bamboozled these people out of their money, both of whom

were, the evidence shows, were strong supporters, strong

supporters until the Illinois primary.

Ladies and gentlemen, as you can tell from my size,

I don't like to miss lunch, and I haven't used all the time

that the Court has allotted me, but I would like to say just

a few final words. After this trial is over, and after you
 Page 126 of 248

all have done your duty, as we are sure you will

do, examine this evidence, and come to a just decision based

upon the evidence, and after you have applied the rules that

the Court will instruct you on, reasonable doubt, presumption

of innocence and unanimity of the verdict, you will go home,

you will render your verdict and you will go home and six

months from now you will, you know, will have more or less

forgotten about this case. These people here are going to

live with this for the rest of their lives. They are going to

live with this case for the rest of their lives. And I, like

Mr. Moffitt, only have a brief time to talk to you. I hope I

have done my best, and I hope I have laid out the evidence on

behalf of my client in a way that will encourage you' to look

at the evidence in this case and look at it in a waylthat you

are supposed to,

132

I submit to you, ladies and gentlemen, that if you

do that, take your time, look at the evidence, apply the

law, you cannot find, you can not find Jo

guilty of any of these crimes beyond a reasonable doubt.

THE COURT: Who is next?

MR. WEBSTER: Mr. Jackson, could I get you to help

me put those charts up on .the easel, please.

One moment. Your Honor.

At the outset in opening arguments, opening state-

ments, I made the statement to you that I was last and also

least and 1 think that's been proven true here, that my

client, Mr. Spannaus, has been mentioned least in connection

 Page 127 of 248

with this trial. To the extent he has been

mentioned, he is practically mentioned most in connection

with Count XIII, which is the tax count. He is not charged

in that tax count, as His Honor will make clear to you.

. I would like to spend initial time here

discussing the evidence against him. Then I would like to

take a few moments and put this entire case if I could in

some perspective, at least as I view it. And invite you to

view it the same way. And then to make some overall

observations about what is at stake here.

Turning initially to the question of the

indictment, as I have already noted, Mr. Spannaus is not

charged in Count XIII, is not charged in the tax count. He is

charged

13 3

in the count involving the conspiracy and he is charged in some

of the individual substantive counts, but what perhaps is most

important, and I urge you to focus on this as Your Honor will

give you the indictment, at least as redacted to conform with

the proof here, because not all the things originally placed in

that indictment were proved here.

I draw your attention to what was page 37 at least, the

page that lists the substantive complainant in this case, and

point out to you that in Count II, the count against Mrs. Powers,

that Mr. Spannaus is not charged and that in Counts III through

XI, that he is charged.

Now, something happened }fc>etween the date of Mrs.

Powers and the date of Mr. Rither in the Government's eyes at

 Page 128 of 248

least to somehow warrant including Mr. Spannaus in

this case. It's that point I want you to focus on for a moment

with me.

The date of the conspiracy as you know is running from

the middle of July or middle of the year in July of 1933 until

mid-'87, Now, these substantive counts here that I referred to,

Mrs, Powers is in June of '85, almost two years after the original

conspiracy started, and the count against Rither is in August of ?

85. So somewhere between, June and August of 1985, somewhere

almost two years after the Government alleged the original

conspiracy started, they start to include Mr. Spannaus.

134

1 Now, that event, I suggest to you, is the one that Mr.

2 Markham referred to in his closing statement here. That event is

3 the change of a mere form, I suggest to you, of the promissory note

4 to the letter of indebtedness. As you know, Mr. Spannaus' job there

5 was as a legal coordinator. He is not an attorney. He functioned in

6 a variety of different ways concentrating his efforts ,on various

7 lawsuits and articles, In connection with those legal

8 responsibilities of course he had to identify lawyers for whom, who

9 could perform services for the various entities and supporters of

10 Mr. LaRouche, work on depositions, papers, briefs, motions, and so

11 forth. The testimony I suggest to you, which I will come to in more

12 detail in a moment, clearly underscores consistently that that was

13 his function there.

14 As legal coordinator, then, why is he brought into the

15 conspiracy by this narrow, thin thread of an accusation that is

 Page 129 of 248

16 changed from a promissory note to a letter of indebted

17 ness is sufficient to sweep him within the ambit of these charges

IS and require him to stand trial here as he has over the past month?

19 You heard the testimony of Mr. Hintz, who gave a less

20 complete version because he didn't know it all of what Mr.

21 Morganroth testified just yesterday and that version through Mr.

22 Hintz, the Government witness, was that at the time there was a

23 concern about the form of the promissory note

24

25

135

that this form was questioned as possibly being a security

within the meaning of the securities laws, and that to remove

the argument that it was not a security, a change of form

might be appropriate.

And Mr. Hintz testified that Mr. Spannaus sought

professional advice, he was not sure whether it was an

accountant or a lawyer. Mr. Morganroth was able to come on

right at the end of the case and clarify that matter for

you. He indicated that indeed an attorney named Pat Moran

had brought the matter to Mr. Spannaus1 attention as legal

coordinator, as coordinating views of legal matters, then

Mr. Spannaus at Mr. Moran's suggestion contacted Mr.

Morganroth, getting hopefully the best legal advice he could

find since Mr. Moran wasn't in a position to give advice on

that technical subject, and Mr. Morganroth gave an opinion

that to subtract any argument, even though he didn't agree

with the possibility that it was a security, to subtract any

 Page 130 of 248

argueiunt, remove any doubt, that they changed the

form.

Mr. Morganroth testified to you that the form was

changed. Indeed he had seen it afterward, and that it

reflected the changes that he suggested and became the form

of a promissory note -- excuse me — in the form of a letter

of indebtedness instead of a promissory note.

That I suggest to you as you look at the indictment

136

and analyze it correctly, that is the reason that Mr.

Spannaus is before you today, because some lawyer brought to

his attention a legal problem and he went out and secured it-

The Government will go on and suggest to you that

there are other reasons he is here and I 'am sure you will

hear that .in rebuttal. This is my last opportunity as it is

for all defense counsel to speak to you. So I won't be able

to answer Mr. Robinson when he gets up here again, but in

the indictment here, that is basically what we are talking

about.

There is another thing for you to concentrate on

when you are looking at what he did or what he didn't do.

There is an accusation here that he wrote a letter and that

that letter was in connection with his position as treasurer

if you will, remember, of one of the political campaigns of

Mr. LaRouche, and that that letter, informed in a rather

lengthy letter which you have not seen but you are welcome to

look at when you get back there, informed the recipients who

were those people loaning money to the political campaign,

 Page 131 of 248

not to the infrastructure type loans which are

reflected in must of the testimony here- But those people

that the program for repayment was reinstated after being

virtually disrupted.

Now, you heard two pieces of testimony, two

independent witnesses that that was true. I suggest to you

that you have had no testimony that that is not true. Namely,

137

that with respect to the campaign loan, that in the middle

of 1985, May 15th, to be precise, which is the date of the

letter, that there was a reinstated program to make

payments.

Indeed, Mr. Bell, who testified before you, again

as a Government witness, indicated that yes, indeed, there

was such a program back in effect at that time and

moreover, that there had h^en substantial accomplishments in

repaying campaign loans. Those accomplishments, as I recall

his testimony and your recollection governs, was that of

approximately $4 million that there was somewhere between

$1.5 and $2 remaining. In other words, probably more than

50 percent had been paid out.

Now, it is curious that the Government has not

charged campaign loans here. All of the complainants that yo

have heard about and all who have testified before you testi-

fied in connection with what we might call infrastructure

loans, but not political campaign loans, and therefore, 1

suggest to you that in your consideration of that letter,

which I would submit has been demonstrably proved to be true

 Page 132 of 248

insofar as the single statement that they isolate

in the indictment, as not being proved, namely that a program

was in place, because indeed it was according to two

witnesses. No witnesses contradicted. And secondly, there was

a sub-stantial progress on repaying those loans.

But I suggest to you that the reason why the

138

political loans are not brought to you in the form of

complainants, the very good reason that there is a serious

debate about whether a political loan should be treated in

the same manner as any other kind of loan, and if it were

treated in the same mannerr I think you well from your

personal experiences can think of a number of political

candidates who might be sitting at criminal defense tables

for not paying back their political loans which they have

borrowed either from individuals or from corporations. And

the names of Hart and Glenn are those that come to mind

immediately.

So the Government has very cleverly worked into

this indictment in a way to kind of I would suggest to you,

and your conclusion governs, to pollute the matter by

bringing these campaign loans in and absent any substantial

basis for including Mr. Spannaus, they have put that May 15

letter into evidence. Again, I suggest to you that the only

evidence before you is the evidence that the statement, the

single sentence made was true, that there was a plan as

stated, that there had been total disruption, which is

acknowledged in the letter, prior to that time and that the

 Page 133 of 248

evidence shows there was substantial efforts to go

ahead and repay that thereafter.

The evidence here demonstrates a number of things

which in overwhelming totality suggest that Ed Spannaus is

not the proper person to be before you today. This case

1-39

essentially is a case about infrastructure fundraising, and

you can ask yourself this: was he a fundraiser? I think the

answer to that is no, he was not. Was he a solicitor of funds

from individuals? No, Ii didn't hear any testimony here that

he did. Did he make any solicitation to any of the alleged

victims or complainants here? I suggest to you the answer is

no.

There is no soliciation whatsoever by him of those

people. Did he ever speak or communicate with any of those

alleged victims? No. Was he responsible for fundraising? No.

Was he responsible, for policies involving fundraising? No.

Was he involved in setting quotas? There is no such

evidence. Was he involved in repayment priorities? No such

evidence. Was he involved in repayment policies? There is no

such evidence except the Government may argue that the use

of these forms, these mere forms, satisfies some participa-

tion in a policy which I suggest to you for the reason I

have mentioned is not so.

Did he participate in fundraising meetings? I

didn't see any fundraising meetings involving the loan

committee in which he participated. Was he part of the

finance office? No. Was he involved in the corporate

 Page 134 of 248

affairs of the two corporations who were lending

money to these individuals, Caucus Distributors, and the

answer is no also to those things.

140

1 There are a dozen noes that I have recited to you,

2 one for each of you as you sit and deliberate, and I suggest

3 that the totality of the evidence and the focus of the

4 matter clearly shows that Ed was not involved in what is at

5 issue here.

6 I will come back to this, because this is a part of

7 the total theme in putting the matter into perspective that I

8 would like to raise with you. But let me go a little bit

further into some of the specific evidence that was given

9
here, that did mention Ed Spannaus, although very
10
infrequently
n
Number one, you heard :of course about his
12
notebooks, He obviously wasn't trying to hide or conceal
13
anything in the course of his activities in this case or we
14
wouldn't have kept the 20 notebooks that the Government from
15
time to time has quoted from in one measure or another. You
16
heard from Agent O'Connor, who testified about the seizure of
17
these notebooks, but that is certainly not evidence of a
18
crime. You heard about Mr. Bardwell in an effort to
19
substantiate that these were Mr. Spannaus' notebooks and that
20
he, Bardwell, had seen him writing in a book. Cearly not
21
evidence of a crime. You heard of various testimonies of four
22
individuals concerning Ed Spannaus in a way that didn't
23
mention anything about loans or infrastructure. Mr. Morganroth
 Page 135 of 248

24 I have already alluded to there. Sandy Roberts

25 testified to you, and itientiohed Ed, but only in the context

that Ed was his boss

141

and worked on various lawsuits, which he articulated and

which I brought out through cross examination of other

witnesses. Mr, Offutt, the representative of Grant Thornton,

the accounting firm that performed services in an attempt to

help the entities here straighten out their bookkeeping

system since it was being put into place by people who are

not professionals, who are not professional accountants; and

Mr. Anderson, if you will remember from Oklahoma, a delight-

ful gentleman, who lent a large amount of money for purposes

fo purchasing Ibykus there, indicated that he had dealt with

Ed in connection with the arrangements involving the

financing there. Again, it was appropriate interface based on

his response as legal coordinator.

Those witnesses gave you Ed's name but not in

any way that implicated him in connection with this

matter.

You did hear from what we might call some of the

Government witnesses, the Government Pinocchio-nose

witnesses, if you will* I am sure you could see those noses

growing from time to time as they were on the stand. You did

hear from Mr. Tate, for example, with all his venom against

the entity and his motives, whatever they may be, for saying

what he said. You did hear him say that Ed had had — he had

overheard a brief discussion between Ed and some individual

 Page 136 of 248

whom he couldn't recall or .identify, and it

related to an existing lawsuit and he ascribed to Ed a

statement about the

1"42

individual not deserving to be repaid. That statement interestingly

was not contained in the 302 report* I remember Your Honor asked

whether the Government would stipulate to the fact that it wasn't

in there, and they did.

The witness acknowledged it. Yet, he had at the time of

interviewing Agent Klund in the February interview and again in

the May interview, he had tried to give all of the information

that he could remember. Certainly, he was motivated to give

whatever information that he could against everybody and

everything he could think of. He failed to put any recitation of

that event in there. And on cross examination, he admitted two

important things besides that-One was that there/were no

witnesses, to this event, that he was the only one, and moreover,

he couldn't even remember who

it was that said this to Ed Spannaus.

And secondly, that it basically was acknowledged a

conversation that took place in the context of discussing a

legal matter because of either an existing or threatened lawsuit

by that particular contributor.

So I suggest that this type of activity that is

discharging his obligation as a legal coordinator, is not

sufficient to warrant his being brought in before you to answer

these serious criminal charges, and that the evidence is

insubstantial to support the claims that the Government has

 Page 137 of 248

made.

143

His Honor will instruct you that mere membership in

the National, NCLC, or the NEC, the national executive

committee, about which you have heard some things, that mere

membership in those organisations is not sufficient to

substantiate any of the charges brought. I bring that to

'your attention because Ed of course was a member throughout

this time of the national.executive committee. In connection

with his membership in and participation in it, why he did

receive certain memoranda, which were circulated to all ".

members. :

His Honor will instruct you also that mere

knowledge of what was going on is not sufficient to satisfy

the allegations that are brought here against Mr. Spannaus.

And in connection with the NEC, I think that the

wisdom of the instruction that you will receive, namely that

mere membership is not sufficient, is illustrated by the

fact which I brought to your attention in opening statement

and which I indeed brought again to your attention during

the course of the cross examination here, which was the size

of this national executive committee, being some 13. If you

remember, I pointed out through the witness that only three

are brought before you today. But you have heard the names

of many others, who were active in that, in the NEC,

including a number of people who were very active in fund-

raising who are not before you today, who are part of the
 Page 138 of 248

144

Government's selective process in bringing the defendants

here And those of course include Mr. Phau or Mr. Papert, and

I am not suggesting that they should be here. I am merely

pointing out that at least with respect to Rose and Papert,

they were also members of the NEC and it's clear that it

would not be fair to hold mere membership in this executive

committee against the client in any.way that would

substantiate criminal guilt.

The same is true of course for the NCLC, which

has the 350 members.

I, in summary, feel that and urge you to conclude

that the indictment is insubstantial when it comes to making

these charges against my client, and I urge you when you get

back there to think about some of the other provisions in the

indictment which do detail charges which are brought against

others and not against him as a contrast between what they

are saying Ed Spannaus was responsible for and what they are

saying he was not responsible for/ because you can read into

another provision, for example, paragraph 27 which I won't go

over in detail does lay out a lot of things that others they

allege were responsible for, but does not include him in the

allegation there.

Based on these points, I think it is clear, and

I won't even argue the reasonable doubt standard because I

don't think that1s even approaching reasonable doubt here,

 Page 139 of 248

145

that there is no basis for holding Ed responsible for

whatever charges the Government is pursuing here.

And that's the reason why I am somewhat brief in my

recitation of the matter involving Ed and would like to save

some time to place this case a little bit more in context

which perhaps will assist you in understanding in my view at

least what is really going on here.

The most curious facet of the case is the total

irrationality of an individual who would have the intent to

defraud in this case. Your Honor will instruct you that it

takes a specific intentr not just a general intent, but a

specific intent to find responsibility under these mail

fraud charges.

Here is — first, you conclude this is unlike any•

kind of a scheme or artifice as the language of the

indictment reads, any kind of a scheme or artifice that you

have ever heard of. Usually these types of things involve hit

and run, but this is a political movement which has been

around, as Mr. Williams told you and you heard from the

evidence, since the 70's. It has been very active in the

SO's. It has been successful, and that may be the product of

its problem. It has been successful particularly through

those Illinois campaign primary victories in February of 19

86.

Now, that means with the purchase of real

estate, with the concentration of its functioning in

offices down
 Page 140 of 248

146

there, it is going to be there. It's a place that can be

found, and the people can be found there. They are not people

who are running, and they are not people that are hiding.

In addition, they have documented their activities

extensively. The two million pages that were seized during

the raid of October 1986 have been used consistently by the

Government here and the case. If this were a traditional

fraud, one would hardly leave the kind of paper trail that

you see in this case. You should consider that in connection

with your views of whether people had or didn't have a

specific intent to defraud. Why does one with the objective

of fraud create the documents here? Why do they hire

professionals such as Grant Thornton, for hundreds of

thousands of dollars to come in and help them straighten out

their finance system? The answer is that they are not

professionals themselves. .There isn't a professional

accountant in the organization. There isn't a professional

lawyer in the organization. They didn't have the management

that they might have had. And you heard Mr. Yepez, I believe

it was, say that. If they had had a good office manager,

things might have been different.

The point is that they were people who were

committed to this movement. That was their primary reason

for-being together. It wasn't a selection process based on

the fact that they could run a computer well or create an

147

accounting system or take care of the legal problems. Those

 Page 141 of 248

were collateral duties. Those were duties that they had to

take on because with the mushrooming of this, the contribu-

tions and the sales in this matter that they needed more and

better expertise, and they didn't have it in their own

organization. They didn't have the information retrieval

system. They didn't have,the accounting system to set it up

to recover all the figures, and they didn't have the total

professional expertise to support what they were doing.

Now, that is the perspective in a way of what's

going on here, and there are a number of course of very

interesting questions, such as if they really did intend to

do something wrong, why did they create these documents? Why

did they create programs to try to assess and cure their

problems?

You have heard the testimony of our Pinocchio-nosed

witnesses, the Tates, the Curtises and so forth, but those

were people who left the organization. In a way, they are

renegades. They are abandoners. They are quitters, because

they left at a time when things were tough and rocky. If

these people had intended a great scam, why didn't they bail

out at that point? Why didn't they just fold up the tent,

and walk away from it? They stayed to try to cure it. And

now they are being penalized for that,

Now, you could say in hindsight that perhaps they

148

shouldn't have taken as many loans as they did. But you saw

the borrowers. There are two years, or within a two-year

period really, in which there were extensive loans. But

 Page 142 of 248

there were many years before when there weren't, and when

they realized and saw some of the problems, they imposed

their management structure to try to do something about it.

They weren't professionals. But they did try.

Although the Government has read certain excerpts

from Mr. Spannaus' notebooks, let me read a couple more

which illustrate that management was concerned and that they

were trying to do something about this.

There was a reference to loans being the curse.

It's killing us. But the next line is that 60£ of income is

better than Si in loans. And that is back in September of

'85. There was documentation in 1-1, page 55 — I give you a

reference because it is in the notebooks and you can look it

up if you wish — in September that sales are pol pos effect,

and I think you heard the testimony which meant, to the

effect on the stand that there was this trilogy of assessment

and that sales meant a political positive effect and then it

says loans is pol neg effect for political negative effect,

and thirdly contributions pol neutral.

The policy then was to try to sell, and the bulk

of the money over the total panorama of ten-year period here

is coming from sales, coming from sales of New Solidarity,

of

14'9

EIR, of Fusion, of some of the Spanish publications, and you will

have a list as I think you saw introduced of those actual

publications so that you can see the total reach and range of what

they were.
 Page 143 of 248

It was felt therefore that sales were the lifeblood, the

lifeblood and that loans were bad, and that contributions were

neutral, and they were building up the political movement through

these publications and through the sale of them. That's what they

were doing, and that's 'September "'85.,.

Loan ceiling was imposed, here's another quote,

September 28th, loan ceiling of 25 percent contributions, 15

percent, as time goes on by December, you have an entry, at 7-T,

page 43, "Hit 400 slant WK, in sales.", A reasonable person might

interpret that, and it's up to you, to mean hit $400,000 a week

in sales, because '400 isn't very much a week.

12 And then underneath that it has "600 EIR subs/week,

13 1,000 NS subs and 1,000 NDPC memberships." This was the program

14 that they were trying to push. Further references for example as we

15 turn into '86 with the policy is mass sales. That's at 7-T, page

16 250.

17 Cost cutting comes into play, perhaps you might say late

18 in hindsight in 20-20 vision, and there are references in 7-x at

19 page 147 to cutting everything else, it's some reference above,

20 cutting travel, cutting inefficiency in sales

21

22

23

24

25

150

cutting expenses.

The point is that these documentations are not

the work of people who are trying to hide something. They do

 Page 144 of 248

reflect, although the Government cites some

material, they do reflect also and confirm the policy of

management to do something about it and the charts

themselves show you that we are dealing with a narrow band

of time, in which loans once thought to be some assistance

here were deemed to be perhaps a curse as has turned out, it

certainly was. But this is hindsight. We are in here today

to judge it.

The Apollo program is another indication of the

peculiarity of this, if it is really what the Government

says, a scheme or artifice to; defraud, why, well, well, well

before any criminal charges are brought through an indictment

in this case, some eight weeks ago in February of '87, why do

they write a letter to all of their supporters to try to

determine what it is that they are owed? The Apollo program

letter, February 3, 1987, Defendants' Exhibit QQQQ-27-A,

says, "We are therefore asking for your assistance in

reconstituting our records. First, we want to compare what

information we still have with what information you have."

Here is an effort on their part to find out what

they do and what they owe, and if people would stay out of

their hair, maybe they would have a chance in '.doing

something about it.

151

That's not the act of someone who is involved in

a scheme or an artifice to defraud.

This is a controversial movement. It has, I'm sure

as you heard throughout, elements that may attract you in

 Page 145 of 248

one area and repel you in another, or might repel

you in all areas. But the testimony will surely indicate to

you that there are aggressive actions taken to promote their

ideas and their thoughts, and that not all of them are going

to be accepted by a lot of people. But the defense brought

in to you during the course of this matter a very

interesting variety of individuals to demonstrate the

legitimacy of views that they are propounding and the

support that they have. You can't bring in 1,000 witnesses.

Judge Bryan would certainly frown on that, to say the least,

but there is a sampling, and think for a moment about what

that sampling showed you.

That sampling came in from the United States. We had

-- you can call Mr. Morganroth a supporter, but you had Mr.

Morris from the National Security Council, executive

director. He obviously felt that these ideas were worthwhile,

the information that these people provided would be helpful

to the United States Government and that Mr. LaRouche at all

times acted in good faith and in the best interests of the

Government.

The witnesses I am mentioning now are not for any

152

particular — I am not trying to describe the purpose that

they were here for. I am merely trying to illustrate to you

that they came from all walks of life and corners of the

country and the world, indeed, and many professions.

We had also Mr. Anderson come in and tell you about

his support for the entity from Oklahoma. You had Mrs.
 Page 146 of 248

Anderson, a courageous and brave woman, who from

Selma, Alabama, to tell you about her support of the

organization. We had people from Indiana. You had Mr.

Perricone from New York, a common worker there, tell you

about his support for the entity. You had some witnesses

from foreign countries. You had General Anyez, you had

General Scheer (phonetic), you had Dr. Seale. You had people

from London, from Bonn, from Bolivia. You had people in

military. You had people in medicine. You had people in

humanitarian ventures. You had them from all walks. I

suggest to you that they illustrate a very important point,

which is that while these might not be your ideas, that they

are legitimate ideas, and they have a following, and they

come from various corners of both this country and abroad.

But ask yourself when you place this case in

perspective, why would you intentionally cut off your

life-blood by defrauding these people?

Isn't that really the measure of intent in this

case? These are the people who support the organization.

153

Why do you want to defraud them if you are going to remain

around as you have in the past to pursue this political

movement?

There may be as I come to the final portion of

what I have to say to you, there may be even a larger issue

here. The case against Ed is really basically nonexistent.

Its flimsiness is symptomatic in a way of what's gone on

here in the courtroom. There is another symptom which isn't

 Page 147 of 248

my responsibility, but it's the tax case.

Have you ever seen a nameless, faceless tax case, a

tax case where they don't charge you with any specific viola-

tions of the Internal Revenue Code? He is not charged with

evading income taxes. He is charged with this general overall

thing of violating the Internal Revenue Code, impeding,

impairing-, et cetera, the collection of the revenue. It

doesn't have a face because they won't tell you the amount.

They just say, well, this amount is attributed to you. The

taxpayer, the tax collector never came knocking at his door

and said, by the way, I think you owe us some money. Why

don't you tell us some facts, and let us sort this out.

I mean, if this had been Lee iococca, do you

think he would be sitting on trial here if he worked for a

dollar a year and the IRS had a quarrel over whether he

had attributable income to him?

Again, that's something Mr- Anderson will address

154

to you in further reach, but isn't it another symptom of

what's happening here, why you single out Ed, why you heap

on, pile on as the NFL would call it, a bogus tax case.

The issue when you throw some of these things out is

the question really of what is the issue here. There is an

irony in a way. The irony is that this case is being tried

here in Virginia. This was the native soil of Thomas

Jefferson. He did write that Declaration of Independence. He

wrote it at a time when some others were rebels or rebelling

against their Government, indeed attacking the Government.

 Page 148 of 248

Certain inalienable rights, the right to life,

liberty and the pursuit of happiness.

Maybe that!s in a larger sense what this case is all

about. This political movement, as I said, is not a polite

one. My client's responsibilities have been to write

articles. You will have several editions here. You can go

through and see some of the articles that involve his

activities —■

MR. MARKHAM: Your Honor, I object to the articles

leaving the impression that he is being prosecuted for what

he wrote or that there is some reason for prosecuting him

because of their political beliefs. It's not the case. That

is the implication he is trying to leave. I object.

MR. WEBSTER: I; think they have time for

rebuttal, Your Honor. They can address it in rebuttal. I

am. trying

155

to tell what Ed Spannaus did. And that is what he did.

THE COURT: Well, objection overruled.

MR. WEBSTER: Thank you.

And you will have the list of publications as well.

You can see the books that this organisation has put out on

the last page here. There are quite a few. There are 50

books. Some of them aren't very very polite, as Mr."

Moffiitt has told you, if you want to taKe a look at some of

the interior portions of Dope, Inc., or Karco Trafico. Some

of them are interesting, the Schiller book on poet of

freedom, or the St. Augustine book. But a lot of them do

 Page 149 of 248

attack ideas, institutions, and particularly our

Government.

The concept as you have heard through the testimony

is a belief not unlike other organizations which feel that

they are in the mainstream, which is that their ideas are

rooted in the Christian-Judean tradition. That many of the

concepts that they foster illustrate those concepts from

which our country has drifted away. But whatever you think

of these ideas, as again Mr. Moffit said, they certainly

have the right to say them.

The question of what it is that is happening

here, we have brought before you a charge that says that

they are criminally liable for not paying back debts in

accordance with the terms and conditions. This is not a

larceny case where somebody says they took the property of

another with

156

the intent to deprive them thereof permanently.

This is a very peculiar charge which says you

didn't pay your debt back on time. That is a principle that

you are asked to approve.

Now, that chart over there is merely a forecast. It

is an assumption that if you had a growth rate of 10.85

percent, as you had in the prior however many quarters Mr.

Seay selected there, that you would have a growth in the

revenues coming front (a) sales and (b) contributions of an

amount over and above they actually received, and that

amount is reflected by all that red. It adds up to some $40

 Page 150 of 248

million We are not saying that they have $4 0

million to spend, which is what Mr. Robinson was trying to

point out on cross examination incorrectly.

What we are saying is you would have that

additional revenue, but it would cost ycu something to get

that revenue. You would have to pay some expenses of

receiving your continuing debt. And you would have perhaps

some other expenses to offset. But you could make some

decisions out of that revenue, and some of that revenue

could be used in connection with this loan problem.

Now, was it reasonable for some of these people

to feel that, given the success and dramatic success of

the entity here, the movement here, and all of the

entities combined, that they wouldn't have this happen.

You heard

157

about many events that could conceivably interfere with and

chill the receptiveness of this organization and its people

with Government. And some of those things involve, for

example, the Kissinger letter. If you want to see what

Kissinger's signature looks like, you can look at this

letter. It is in evidence. The Dear Bill letter that Mr.

Moffitt referred to.- There is some interesting language

there. "I have taken the liberty of asking my lawyer, Bill

Rogers, to get in touch with you to ask your advice,

especially with respect to security." He is saying that

because these people have been getting increasingly

obnoxious.
 Page 151 of 248

When Mr. Kissinger writes Bill Webster, head of

the -- and it says so right here — Director of the Federal

Bureau of Investigation, you can bet that he stands up and

takes notice. His lawyer. Bill Rogers, a former Attorney

General. Mrs. Sexton hired Herbert Brownell, former

Attorney General.

You can look in Mrs. Sexton's cards, there is

another interesting piece in there. She has a telephone

number written down in Washington, D.C., telephone number

written down. And after it says "Edmund Meese."

There is a lot of powerful people. You heard of

being contacted about this matter. You heard the testimony

of Mr, Quinde. Again, your recollection governs on what was

said here, but you remember on redirect examination the

158

Government having opened up this problem he told you about

the substance of this conversation with Edward Bennett

Williams. Edward Bennett Williams was on the President's

Foreign Policy Advasory Intelligence Board, and stated that

as a member of PFPAIB, or President's Foreign Intelligence

Board, I was involved in dirty tricks against LaRouche. I

was out to nail LaRouche,.to bankrupt New Solidarity and

affiliated corporations, and that —

MR. MARKHAM: Objection, Your Honor. That just

misstates the testimony that came from Mr. Quinde about

bankrupting these. He is out to bankrupt him. He is out to

pull dirty tricks. That never came out of Mr. Quinde's

mouth.
 Page 152 of 248

THE COURT: I don't recall. Are you reading from

an exhibit?

MR, WEBSTER: I am not reading from an exhibit, Your

Honor. I am reading from amalgamated notes that I have

collected in connection with those who were present in the

Courtroom at the time of the testimony. I unfortunately do

not have the full transcript. It was not available.

THE COURT: I have no recollection of that. The jury

may recall it, if they do* I don't recall if he did or

didn't. I am not willing to strike it. if the jury heard

it," fine.

MR. WEBSTER: Further, that he went to DJ and tried

159

to get something started against LaRouche.

Now, there is in addition the testimony of Mr-

Morris, whom I questioned on behalf of Mr. Anderson. He told

you that in his position as Executive Director of the

Rational, to, to Judge Clark, the National Security Council,

that there were those people who were coming to him who were

members of the intelligence staff in an attempt to dissuade

him from meeting, accepting information or forwardinc

information to others on the Council from Mr. LaRouche's

organization.

You remember the series of names that they had

called Mr. LaRouche. These are intelligence people on the

staff who were drawn from among other agencies, the CIA,

and the DIA, the Defense Intelligence Agency. They said

they were calling him Communist, KGB member, fascist, and

 Page 153 of 248

even — and it brought laughter to all — a Democrat.

In this Republican administration.

There were those who were creating a

disinformation program. This being in about a year,

according to Morris, after he came to that position, which

would have made it about the beginning of 1983.

Now, these things, the Williams letters, from

Williams, the contacts of high level people, the disinforma-

tion services, have got to have a chilling effect, a

chilling impact on the ability of an entity to do what it

does in its

160

1 political movement and in connection with its revenue-

2 returning endeavors, the sale of its various publications,

3 its lifeblood.

4 I go back to Mr. Jefferson, and ask you whether it

5 isn't ironic that we are here, and I urge you in your duties

6 in support of your oath to consider the issues involved

7 which include the protection of these inalienable rights,

8 life, liberty, and the pursuit of happiness, including

9 pursuit of this political raovement against what you may want

10 to conclude is an overreaching if not oppressive Government.

11 Thank you

12 THE COURT: We will recess until 3 o'clock for

13 lunch.

14 (Whereupon, at 1:56 p . m . . Court was recessed to

15 reconvene at 3 o'clock p . m . , the same day.) 16 17 18 19

 Page 154 of 248

161

AFTERNOON SESSION
Wednesday, December 14,
1988 3 o.'clock p.m.

THE COURT: Yea, sir.

MR. ANDERSON: Good afternoon, Your Honor, and

ladies and gentlemen.

Unlike Mr. Moffi-tt, I have not changed my

presentation because of what I heard, nor have I decided

to modulate it, or accelerate it.

At the beginning of this case, ladies and

gentlemen, I suggested to you, the Government suggested to

you that they would, through the presentation of the

evidence in this case, compel you to a conviction of guilt

as to all defendants on all charges. And in our various

ways defense counsel suggested that other results would

obtain at the end of the factual presentation.

I suggested that in fact the compelling

conclusions would be far different because the Government

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was presenting twisted and misconstrued facts.

I will let the evidence speak for itself. In your

judgment, you heard it. I am not going to spend a lot of

time telling you what witnesses said on the witness stand,

because what I remember them saying doesn't matter. It is

what you remember them saying. I will take occasion to

remind you of some statements that I recall-

162

There has been some humor in the case. I have

contributed to that on occasion, because I think that

sometimes humor can focus one's attention, or refocus one's

attention on a different aspect of a fact. However, I want tc

make one thing perfectly clear. I don't think there is

anything funny about this case. My client doesn't think there

is anything funny about this case. None of the other

defendants do. None of us think there is anything funny of

the fact that they are here, or the fact that a number of

persons~took the witness stand and testified that they had

not to date received money back that they expected to get.

Nothing funny about this case.

But what is the case? In my view, ladies and

gentlemen, the Government's entire view, the Government's

entire theory of this case, is nonsensical- They are

suggesting to you, in essence, that the individuals in this

room conspired to defraud certain individuals of money. I am

dealing obviously with the fraud aspect of the case. I will

get to the sillier aspects of the case later.

The fraud aspect of the case. If there is one thing

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that is clear, or I hope is clear, from what you

have heard about the history of the National Caucus of Labor

Committees, it is that it is a political, philosophical

organization with ideas and principles, and that it depends

for its very lifeblood, its very existence, on the continued

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and increasing support of persons not members of the

organization but outside, who share in part or in whole

those goals and those ideas. They depend on those persons

not only for their political support, but vitally for their

financial support. And in that context, a theory of the case

which suggests an intent to commit a fraud on the very

persons on whom the organization depends for its continued

existence is implicitly ridiculous.

Another aspect of the Government's theory of the

case which is more implicit than explicit, but it is

there. When you get the indictment, take a careful reading

of the first, the introductory paragraphs before you get

to the specific matters in the names and terms of the

indictment, the manner and means of the overt acts. Before

you get to that, there is some general introductory

language.

What that really says is that in the view of the

Government, the National Caucus of Labor Committees is in

and of itself a conspiracy, that it was in the beginning,

and has at all times been one by virtue of the way it is

organized, by virtue of the conduct it engages in. They say

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it is a conspiracy. They don't charge it, but they

say it.

Because that is the underpinning for their entire

case. Without that, but for that implicit allegation made by

the Government, there is no case. There is a sad set of

facts, and a sad set of realities, but there is no criminal

164

case. And, of course, in that conspiracy, as is obvious from

the indictment, Mr. LaRouche, Lyndon H. LaRouche, Jr., is

the focus and center and soul\ of that alleged conspiracy.

Why? Not by virtue of any specific act he did. Not

by virtue of any conduct he had with anybody in this case -

- contact, excuse me —but by virtue of the fact that he is

who he is. That he is the leader in one sense of the word

of the National Caucus of Labor Committees.

There is no question about that. But what kind of

leader, and a leader of what?

Which gets us to who-is-Lyndon-LaRouche, and why-

is-Lyndon-LaRouche aspect of this case*

Most of us, ladies and gentlemen, live our lives

from day to day with expectations and, let's call it, a

normal form. We have the normal, average desires. We have the

normal, average expectations. We hope to send our children to

good schools. We hope to live in a nice community. We hope to

upgrade the quality of the house we live in. We hope to own

one someday. We hope maybe to move from a Chevrolet to a

Buick, or from a Buick to whatever is one step from a Buick,

an Oldsmohile, I guess in that line. And those are normal.

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There is nothing wrong with it. It is fair. It is

average. It is us.

But there are certain people who agree with

themselves to forego those normal desires and to commit

their

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lives to a higher goal, recognizing full well the

consequences that will have on their life. I suggest here,

ladies and gentlemen, from the evidence you have heard,

Lyndon LaRouche is certainly one of those rare people.

That doesn't mean, as you have heard a number of

people say, that you have to agree. As a matter of fact, I

suspect that at least maybe you agree with some of it. Maybe

you agree with the war on drugs, and don't agree with the

debt situation in South America. Maybe you agree with the

SDI, and don't agree with the perceived Communist attack on

Western Europe and Western Civiliation. What — the point is

that the ideas are important in and of themselves whether or

not you agree. And an idea without action is not very useful.

Our whole, not only American society but the entirety

of Western Civilization is based on among other things a

belief in the fact that a collision of ideas, the conflict of

ideas in the marketplace, the presentation of competing views

on things, is what leads us and causes us to develop in all

oif our social and economic and other forms. Without that

collision of ideas, there is no development. There is no

anything. So all of those persons who participate in that

collision of ideas are providing and performing a vital

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function for those of us who have chosen to take a

different course, maybe an easier course, or a more normal

course, with

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our lives,

Those persons don't, I think, and historically — I

am not going to get into naming names. You can search for

your own historical examples of such people. But there has

always been a consequence to their life. Frequently, the

ultimate consequence, which meant they had to give their life

up for those ideas. And,, hopefully, that is not what we are

talking about obviously, but in a way it is not an unfair

parallel because everyone who has participated over the years

in the National Caucus of Labor Committees has in making that

commitment. They work far harder than one might expect. They

have committed their lives totally to what they consider to

be vital and important social issues. And for that, and from

that they have gotten very little in return,

You have heard what they get in terms of wages. You

heard how they live. Is there any among you who would trade

places with Lyndon LaRouche in terms of the way he is

obliged to live? Is there any among you who would give up

the walks in the park, would give up a night at the movies,

a night out with the ability to walk your dog down the

street, the ability to go down to the local grocery store,

to hang around on the street corner, to go and watch a

football game, just to goof off, to live a life of

essentially total commitment and total work?

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1 Well, I think that is a question you have to ask

2 yourself,, because in the — as we get back into Count XIII

3 later, you are going to have to judge in fact among other

4 things that precise issue, the so-called lavish lifestyle

5 of Lyndon LaRouche, to use the Government's words. Is he

6 living a lavish lifestyle? Is he a flamboyant gadabout,

7 eating off the fat of the-land, or is he in fact actually a

8 prisoner in his own jail? It is his own choosing, but

9 nonetheless a prisoner in his own jail. If that's the

10 lavish lifestyle of Lyndon LaRouche, then I think it is one

11 none of us would choose to share.

12 Now, the Government alleges, and I have to break

13 this indictment down. As I mentioned, or as you know,

14 Lyndon LaRouche is charged in every count of the

indictment.

15 There is a reason for that, because that is what this case

16 was all about in the first place. This is the LaRouche case.

17 Everybody calls it the LaRouche case. It was the LaRouche

18 case before it existed as a case.

19 It was the LaRouche case, I suggest to you in the

20 minds of the Government as they formulated the way to bring

21 it to fruition. They wanted to get Lyndon LaRouche in a

22 Courtroom. And they didn't really care how.

23 John Markham tells you that, ladies and gentlemen,

24 in this country, we do not try people for their ideas. Well,

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25 thank God there are no laws in this country that prohibit

168

or that allow a person to be tried directly for their

ideas. But what happens is that they get tried for

something else because of the ideas. The object is to get

them into Court and the means are incidental. And that is

why he is here. This is his day — this is his destiny. This

is the Government's intent.

MR. MARKHAM: Your Honor, I object to that.

MR. ANDERSON: I can understand why.

MR. MARKHAM: Your Honor, that is not proper to

argue prosecutorial motive. That is a matter for the Court.

MR, ANDERSON: I am arguing the facts that developed

in this Courtroom,

THE COURT: I think you can argue that, but I think

that last argument is improper.

MR. ANDERSON: All right, Your Honor.

I am not going to reiterate arguments previously

made. You don1t need to hear it again, and again. It is not

going to make it any more convincing to hear it again and

again, and I certainly have other things to talk about. But

one of the things we are talking about here, ladies and

gentlemen, is what were the reasonable expectations of those

persons within the National Caucus of Labor Committees in

terms of the future during the relevant years?

Now, they have, as you have heard, over the

years been the recipient of periodic episodes of what has

been
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169

called various types of attacks, financial warfare. Now,

financial warfare has a specific meaning because it is a

specific kind of attack. It is an attack based on breaking

the financial back of the National Caucus of Labor Committees

as opposed to a more frontal political attack, the collision

of ideas in the political marketplace. That is one thing.

This is a -specific type of attack, and it came from many

directions.

You heard the other day from the witness stand,

and one of the other counsel argued this morning, the

statement made to Herb Quinde by Edward Bennett Williams.

Now, Edward Bennett Williams is a very, very influential

gentleman, as you heard. And Edward Bennett Williams told

Herb Quinde that "I am going to nail them to the boards. I

am going to break them financially."

That was not his sole idea. Lots of people share

that view. They want to go out and break the back of the

National Caucus of Labor Committees financially. While there

had been attacks in the past, there had been adverse media in

the past, there had been lawsuits in the past, there had been

allegations made in the past, and those had been weathered,

and those members of the National Caucus of Labor Committees

became not only used to them to some degree, in terms of the

fact that they expected that something like that might happen

again, but it was not cyclical. It was not

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170

1 forecastable. You never knew when it was going to happen.

2 And even if it did, I think you can, from the very fact of

3 their continued existence over the years of difficulties,

4 can conclude that they had optimism that they would be able

5 to continue to overcome such periodic difficulties as arose

6 and move onward and upward.

7 That is the point of the graphs, I am not going to

8 put them up there. You have seen them. You are going to

9 have them in the jury room. You can draw what conclusions

10 you think is appropriate from them. Both the Government and

11 those of us in the defense have argued various interpre-

12 tations. You have heard from the person who put them

13 together what they were intended to be.

14 But one thing that is clear is that there was the

15 rather dramatic growth over the relevant period of years r

16 Beginning prior to any of the so-called year of the loan.

17 Which was a growth in two directions. It was a growth

18 financially and it was a growth politically. I mean, the

19 significance or the impact that the National Caucus of Labor

20 Committees was able to have under various events, the

21 contacts that opened up to them, that enabled them to have

22 influence on specific programs' and projects not only in this

23 country but abroad were on the increase. Everything was

24 moving onward and upward.

25 And that probably is the most crucial fact, because

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1
 Page 164 of 248

it was in the minds and souls of every member of the

2
National Caucus of Labor Committees, at least those who

kept the faith.

4
Now, what did they have a reasonable basis to expect?
5
They had a reasonable basis to expect that they would be able to
6
overcome such periodic problems, and that they would continue to
7
grow. What they didn't and couldn't expect was the piling on
8
that took place at a particular point in time, the multiple
9
attacks that developed in a specific point in time with the view
10
principally, or at least among other things of negatively
11
impacting them financially.
12
Now, in some ways I think I should not even have to
13

14

argue this, because it doesn't really — I will tell you why

15 a little later — it doesn't relate to my client directly,

16 but I am going to argue it anyway because it is critical in

17 my view to the overall case, and certainly to the

18 Government's presentation of what they purported to present

19 as facts, that the state of mind of the individuals who

20
were participating in their respective capacities -- I think

21 you have learned everyone had a role. If it was told to dig,

22 you picked up a shovel. There were no neat, fine, clean

23 distinctions in most cases. It was basically a collective

24 effort. Certain people had specific definable and clear

25
tasks. Others pitched in and helped in various areas at

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other times. But they certainly had the expectation that I

have suggested.

And when things began to come apart, when they

would have their backs against the wall during the

critical period of time financially, really what were the

options available to them? They had two. To do what those

who were attacking them financially, including the

Government, wanted them to do* Which was fold the tent and

walk away.

To use a different example. If a ship was on the

ocean and was under attack, there really are two options,

You can do whatever you can do to keep the ship afloat and

to get it into port, because the only alternative to that is

that it goes down with all hands. If it goes down with all

hands, everybody loses, because the "all hands" are not only

the individual members of the National Caucus of Labor

Committees, but all those people around the world who

supported them politically and/or finaneially, which means,

and would have meant at any period of time that if the ship

went down, that all of those persons would have lost

irrevocably everything that they had put into it. And they

wouldn't let that happen to their supporters.

In fact, the facts fly precisely against the

Government's theory of the case. They wouldn't let it

happen. They wouldn't let the supporters lose their money.

So they continued to persevere, and to fight for their

173

existence and for their supporters.

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Yes, there was, there were loans taken after the

point where some loans were not being repaid precisely

according to the terms and on time. But that shouldn1t

strike anyone as strange, in a couple of contexts.

One, they were fighting for survival. Two, I think

it is fair to say that given the limited number of witnesses

you heard from that you can draw the inference that most of

those persons who lent money were not the same as those who

took the witness stand, but were different in kind, and in

fact recognized full well the political nature of the loans,

recognized to whom they were lending it, and that there were

inherent risks involved because of the war that was going

on. The war which this organization not only believed they

were involved but in fact told everyone they had occasion to

tell through their, verbally and through every publication

that they write, that they were in.

And they took these loans with a good-faith belief

that they would be able to use those loans to satisfy the

short-term obligations that were coming due, but with a

continuing good-faith belief that they would be able then

to handle the long-term obligation thus created by the new

loan It is not untypical, as has been suggested, by other

counsel, of the way any business in financial difficulties

would respond. The key is the good-faith belief that they

174

2 would be able to meet and honor their commitments.

2 I think if you approached it as I suggested in

^ terras of what this organization is about and who these

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4 people were, you have to recognize the fact that ultimately

5 that was the first commitment. Now, there were other things paid

for. No question

7 about it. I disagree with the Government's structuring of

8 what was paid and when, but I am not going to suggest that

there were not other expenses paid, of course there were.

JO Those were the expenses paid to keep the ship going. You

11 can' t just stop .

12 I mentioned before that it was clear, I think, and

13 I certainly concede, I don't think there is any question

14 about the fact that Mr. LaRouche is in one sense or another

15 the leader of the National Caucus of Labor Committees. But

16 how does he lead? And what does he do within his leadership

17 capacity?

18 He doesn't function as a chief executive officer.

19 He doesn't function as a hands-on manager of a small

20 business who knows what everyone is doing at all times.

21 That is not his function. You have heard what he does.

22 He leads and is accepted as the leader, let's say the first

23 among equals if you will, the philosopher on the rock,

24 because principally among other things is the fact that he

25 is the intellectual mentor of others and the intellectual

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sponsor of many, if not most, of the ideas and projects of

the National Caucus of Labor Committees. He has developed

these concepts in the areas of philosophy, developed some

various political initiatives, and economic initiatives

around the world. You have heard all about them.

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I mean, you don't do that in your spare time. That

is not something you- just whacked out in between

administering and keeping hands on control over the

finances and the expenses and the publications and

everything else. It is ludicrous to conceive of the Lyndon

LaRouche that the Government suggests because no one is a

man for all seasons. You can't do everything at the same

time.

He also led, not because he had any inherent power

to do so, but because those who associated with him in the

National Caucus of Labor Committees respected his leadership

and respected him. They respected his total , commitment.

They respected his lack of concern for his personal well

being. And they recognized him as the significant player in

events of critical importance to the world. That is how he

led.

He led by, among other things, the power of reason

and the power of contribution to these various events that

he was involved in.

To get back to one point I started to make

earlier and got diverted on, the Government alleges

against

176

Mr. LaRouche four different types of conduct. Two are

alleged involvement in a conspiracy to accomplish some

improper purpose; one being the defrauding of these

individuals* the other being a conspiracy on the tax

case. But then there are nestled in between those two, on

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those Counts I and XIII, 12 others.

I think it is in'structive to look at those 12 and

ask, why LaRouche? This is not to dignify the underlying

charges at all. But for purposes of demonstrating the

faultiness of the theory, I am going to draw an example on

Counts II through XI, LaRouche is what the Government calls

an aider or abettor. He had no involvement in any of those

12 counts. As a matter of fact, I think what we heard from

the witness stand was that his total amount of contact with

any of those individuals who testified was the exchange of

letters with Mrs. Sexton. And that is significant on a

number of levels. Let me get back to one, but it is

significant because despite the fact that LaRouche is as

busy as he is and as committed to those activities which

round out his days and week and months and years as he is,

he took the time to respond to two letters directed to him

when he didn't need to. I mean he had no — and you are going

to have the letters. You can read her letters to him, and

his letters to her.

But one of the interesting things is, why did

177

Mrs, Sexton write those letters and who wrote those? The FBI

wrote that second letter- Her lawyers and the FBI. She was

already a Government agent. She was recording phone calls.

She had already sought advice. She wrote those letters to

draw LaRouche out essentially to try to entrap him.

Now, that didn't-happen by an accident. Mrs. Sexton,

I suggest to you, didn't dream that up herself. Look who her

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lawyers were. And her lawyer was talking to the FBI.

Draw your own conclusion as to what was going on. But Mr.

LaRouche responded.

Now his contact with one of the lenders was the

dinner that Goodwill Post attended at the house. I think

she said it was the strangest meal of her life. Well, it

sounded like a strange meal,

One thing is clear. She had no discussion with Mr.

LaRouche. Mr. LaRouche never solicited money from her, never

encouraged her, never tried to ask her to roll it over,

forgive it or anything else. As a matter of fact, he engaged

apparently in some business discussions with several other

gentlemen that she didn't know who they were while Mrs.

LaRouche had discussions with Mrs. Sexton about common

interests of their, the war on drugs or whatever it was.

The final contact Mr. LaRouche had with any of

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of those — Rither, I think it was — the Christmas card. So,

it certainly wasn't because of any contact he had with any

of those* It certainly wasn't because even in the most

outrageous stretch of construction I have heard in a while,

the reference to Ed Spannaus, because on the advice of

counsel he redrafted a promissory note into a letter of

indebtedness that somehow- that implicates him. It is even

more remote than that. It is not because of anything he

did. It is because of the perception that I spoke to in the

first instance, which is the Government's view that the

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National Caucus of Labor Committees is a conspiracy and

because LaRouche is the leader of that, he is responsible.

Now, think what that means. Assume, as I don't

reject in this case, in a different context, that, for

example, President Reagan in supporting the Contra policy,

which he supported constantly in his speeches and his various

statements to the press and within his adiainistration,

exhorted his supporters to support the Contra effort and to

go out and raise money for them on a private basis, because

they were freedom fighters. Now, whether you agree with that

or disagree with that, assuming one of his fellows in the

conduct of that fundraising, assuming that might be Oliver

North, went and did something wrong, broke a law. Do you

charge the President because it was his -- because he is the

President? Do you charge the President because he exhorted

179

support for the Contras? If something was done wrong, and I

reject that in the context of this case, but if something was,

you don't charge the President, not unless you have the

bizarre construction the Government puts on Mr. LaRouche!s

function within the National Caucus of Labor Committees which

means implicitly he is guilty because of who he is. That's

what it's all about. Take a lesson. That's the President-Let's

take a different example. A boys' club leader wants to put a

new pool in. And he exhorts his supporters to go out and try

to raise funds for the new pool. One of the persons who is

raising funds goes and does something wrong. Is the boys' club

leader going to be indicted along with the person who did

something wrong because he is the head of the boys' club? Of

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course not unless you take the bizarre construction that the

Government wants to put on the case that Lyndon LaRouche must

be guilty because he is the leader of the National Caucus of

Labor Committees. Only in that context can you make that

bizarre connection.

I want to point to a few of let's call them dirty

tricks or sneaky games played by the prosecutor in this

case.

You can draw your conclusions as to why they are

doing it, if you find, if you agree with me that they are.

I told you at the beginning of the case that Mr. LaRouche,

that the Government was going to play you a tape. I told

you they had told me they were going to play you a tape, in

rso

which Mr. LaRouche said —

MR. MARKHAM: Your Honor, there is no evidence in

this record about a tape or about playing a tape, and

what Mr. Anderson perceives he was told before this case

is not in evidence. I object to it.

MR. ANDERSON: Are you denying it?

THE COURT: Objection sustained.

MR. MARKHAM: Your Honor, I didn't hear you.

MR. ROBINSON: He sustained it.

MR. MARKHAM: Oh.

MR. ANDERSON: The issue of Elizabeth Sexton came

up in a different context. The Government alleges in the

indictment that Mr. LaRouche misled, made misleading state-

ments regarding his understanding of Elizabeth Sexton, in

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which context Mr. LaRouche had said, and you will

see a transcript of this, which is in evidence, that Mr.

LaRouche depicted her as an elderly woman who was under

some attack from her family by virtue of having supported

Mr. LaRouche and the National Caucus of Labor Committees.

The family was very resistant to it and tried to get her to

withdraw her financial and actual support that she was in

fact going on tours and went on tours afterwards.

Well, you heard from I think it was Herb Quinde

or maybe it was someone else or maybe it was Richard — I

get lost, but one of the witnesses told you who Elizabeth

Rose

181

was. Elisabeth Rosa -- that that person was Elizabeth Rose.

The Government knows about Elizabeth Rose. But they chose to

try to make a point of evidence and. chose to allege in the

indictment, knowing full well who Elizabeth Rose was, that

Mr. LaRouche was intentionally misleading someone or

attempting to intentionally mislead someone when he mis-

takenly called Elizabeth .Rose Elizabeth Sexton.

Now, another one. The Government also, and this is

also partially Elizabeth Sexton. The Government makes an

argument, made one this.morning in the context of the

letters to the Internal Revenue Service from the Internal

Revenue Service, that LaRouche could have responded except

he was trying to cover someth ing up.

Now, first thing, there is absolutely — you have

no evidence before you that you could from any stretch of

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the imagination could conclude that there was an

obligation on anyone, one, that LaRouche ever received it

himself, or two, that even if he had, that he had any

obligation to respond to those. Those were routine

inquiries about an issue which he had no obligation to

respond because of the facts you heard. But they argue

that his failure to so respond was because he was trying

to cover something up.

But then they argue that in the writings, and in

that case it is the failure to write a letter is the cover-up

but then they argue that in the writing of the letters he

182

wrote to Elizabeth Sexton that he was trying to cover some-

thing up and that's why he wrote the letters. So in their

view, Mr. LaRouche is guilty whether he writes a letter or

he doesn't write a letter. I mean that's typical of the way

they are presenting evidence.

The third thing, in the indictment, as you have

heard some testimony, is an allegation involving a locket,

or some type of pendant, that had in the notations in the

underlying documents, L gift to H. It's in the indictment,

yet the Government knows that never happened, because they

have the receipt that shows it returned. But they didn't

tell you that. Why didn't they tell you the truth about it?

And then just another final example from this'.a

morning, and I am not going to go on, but I am just going

to do one more. This morning Mr. Robinson stood up and read

you from the indictment, and this was the sequence. "Was
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there food in the house?

Yes.

Did you buy it?

No.

Did Helga buy it?

No.

Who buys your clothes?

I don't know."
Then he stopped. He wanted to create an impression

1*83

But what he didn't read you, ladies and gentlemen, and you will

have the indictment. Test your memories, was the last line in

which Mr. LaRouche said in response to a continuing inquiry

that, "You don't know who pays for your food?"

He said, "I know in general. I do not know in

detail."

Now, that is a significant difference. They also didn't

tell you the context in which these statements were made, how many

days of depositions and the hostile relationship that was going on

in that deposition room. They present is as a piece. It's unfair

and unfortunately typical.

Moving on to Count XII, Count XII alleges that LaRouche

defrauded -■*- this is a specific count, a specific count of fraud

— Elizabeth Sexton by virtue of sending a letter on July 5th, 1975,

which is the second letter -- read the letter. They suggested that

this was somehow a solicitation for forgiveness or something of the

loan. As a matter of fact, in the last sentence read to you where

Mr. LaRouche says, let your conscience be your guide or some such
 Page 176 of 248

language, he is referring to a threat by Mrs. Sexton in

the letter to him that she is going to take him to Court and report

him to the authorities. If that letter was anything, it was just

exactly not what the Government is presenting it as. So what is

that count all about? I mean that count is as bizarre, I suggest to

you, as the theory of his involvement

184

because of his position as the head of the National Caucus

of Labor Committees in acts that he had nothing to do

with, to the extent that they happened at all.

Now, moving along to Count XIII, as I suggested to

you, ladies and gentlemen, in opening, the facts of Mr.

LaRouche's tax situation is what he has and has not done

have been open and on the. public record for essentially the

entire time, never hidden from anybody.

And that is a strange conspiracy when you reveal

just inherently. I mean, ask yourself, conspiracies take

place in the dark, not in the bright light of day, and

when someone declares openly that they have not filed and

have not paid, what does that say about a conspiracy? Just

on a threshold matter? But let's look at the facts.

Now, in 1979, the year in question, you heard that an

attorney named Morganroth who testified and a Certified

Public Accountant named Doherty met with LaRouche in

Michigan, and one of the issues of the discussion was

Doherty's questioning to Morganroth as to whether or not his

view that LaRouche had no taxable income or any obligation to

file was accurate and whether it was a defensible position

 Page 177 of 248

from an attorney's point of view.as distinct from an

accountant's point of view. And what does Morganroth tell

him? He hears the facts and circumstances presented in terms

of the way LaRouche lives and the way he functions and the

reasons for

185

it. And he says, yep, I agree. There is no, given the

peculiarities of the Internal Revenue Code and those

exemptions and exclusions available, in fact LaRouche,

given his odd circumstances of life, has no need to file

and has no taxable income.

So you get a CPA and an attorney in 1979 telling

Mr* LaRouche that in fact his view of his circumstances, in

other words, nothing has changed for him. He has no expend-

able income. He has nothing that is taxable. That was his

view — is correct. So not only did he have his own views

supported, but now he had two basis and you are going to

receive an instruction from the Judge on this called

reasonable reliance. And he reasonably relied on the

assessment of his tax situation by that accountant, CPA,

and by that attorney, and did what they — or didn't do what

they suggested he didn't have to do which was either file,

which is to file an income tax return.

Then you get into the bizarre circumstances around

other people thinking, well, it doesn't look right and maybe

something should be filed anyway for appearances or for

whatever reasons; and those phoney checks which were never

cashed and never even written apparently when they were

 Page 178 of 248

supposed to have been written and the curious

thinking that went into that by whoever it was who dreamt it

up, but in any event, it's never filed. As you heard from

the expert

1-86

witness, it should not have been. It would have been the wrong

thing to do if it was filed because it would have been filed

based on false information and for false reasons. So in fact, the

situation continues.

Then you heard Richard Welsh testify that he went and

saw Murray Altman and that certain people had lingering concerns

about how it looked. And that's understandable, because it looks

pretty strange. It looks pretty strange, you know. What did they

say? There are two things certain, death and taxes. Most of us or

all of us paid at one time or another, and so it's pretty

difficult to understand how someone who doesn't could not be

doing something wrong. But in fact, ladies and gentlemen, you

heard from — you heard what those attorneys had to say on that

account. You heard from the expert witness, Mr. Seay. And he told

you why that is the case.

Now — and he also said, you know, I'm not saying it's

right or wrong. I am just saying it's the case. That's what the

Code says. And in fact, in 1984, I believe it was, when Morganroth

is now engaging Grant Thornton to do this catch-up tax project --

I'm not sure of the date but I think it was '84. It might have

been -- I'll leave that to your memories — he consults with

Doubrowsky, Mr. Doubrowsky, who was the head of the Detroit office

of Grant Thornton to discuss the scope of the project that Grant

 Page 179 of 248

Thornton might

187

become involved in, and one of the issues of the

discussion at that time is LaRouche's tax situation.

Run it by another person for another opinion. It's

run by Mr, Doubrowsky, the head of the, 'the managing

partner of the firm in that office, and he confirms the

prior assessments. Under those circumstances which you have

described to me, those which you also heard in much more

detail, but what you heard, there is no obligation to file a

tax return for Mr. LaRouche, and there is no taxable income.

So this continued reliance on a now new expert

opinion, and in fact you heard Mr. Seay say that if during

any of those years LaRouche or someone on his behalf had

come to his office and asked him for his opinion as to those

circumstances, that he would have given them the same advice

at all relevant times.

So the fact is, ladies and gentlemen, however odd

it might sound or seem to you that a person could live --

even though this is certainly not an average situation that

Mr. LaRouche lives in. I think we all recognize that. He

does not live the way most people live, under the circum-

stances most people live, and the Internal Revenue Code was

not based on bizarre or different models. It was based on

typical situations. They are trying to pull as much into

certain specific categories and in that, they define

various relationships a person can have with a business.

Mr. Seay
 Page 180 of 248

188

told you that the — you .know, you take, this was the square

peg that Mr. Markham tried to turn into a round hole or

whatever that was all about, and the odd or different circum-

stances of Mr. LaRouchers life. You don't find any clear

parallels, "so what you have to do is you have to go to the

definitions in the Internal Revenue Code and based on those

things that he heard, the, facts that he heard, not the

characterizations, not the fact that Mr. LaRouche considers

himself to be a philosopher on a rock, that he considers his

role to be one of giving advice and consulting on various

projects and that his, you know, he writes, for the reasons

that you have heard people state, or the opinions of Molly

Kronberg that in her view — what does she know? She doesn't

know what the definition of an employee is — she says he is

our principal author. I mean, that's how she views it. But

the Internal Revenue Code doesn't have those categories. It

has others and very few.

And Mr. Seay told you that in fact the only reason-

able category in the Internal Revenue Code that the facts fit

into is that LaRouche is an uncompensated employee within the

mind of the Code.

But this is only — to some degree it's only back-

ground, because the Government doesn't charge a tax

evasion. They don't file a failing to file. They could have

charged a failing to file. They allege it as an overt act.

They
 Page 181 of 248

189

told you, gave you some song and dance about we didn't know

the figures. Well, that's — they knew he didn't file. They

could have charged a i.failing to file. But no, they didn't

want to charge a failure to file. They wanted to charge

something that was conspiratorial. They didn't want to .

charge a straightforward tax offense. They wanted to charge a

conspiracy so they coul-d muck it up with all the dirt that's

been thrown in. They wanted to charge a conspiracy because

their theory is implicitly conspiratorial from the beginning.

LaRouche is a conspirator because he is the head of

the National Caucus of Labor Committees. So they don't

charge an honest tax count, one that we could have met with

the evidence. They charge one that we have to meet in a

different way. We have to meet up in that conspiratorial

netherland somewhere in the dark skies of night.

But ask yourself this: given what LaRouche believed

in good faith to be his obligation vis a vis taxes, given

his reasonable reliance on the opinions of experts from

during the entire relevant period of time, what was he

conspiring to do? It's a conspiracy without a goal. I mean,

that's the inherent absurdity of the whole thing. They

charge a conspiracy that had no purpose, because it was

unnecessary. And that's what their whole case is about.

That's the same thing that they have wrapped and rewrapped

throughout the whole case regarding Mr. LaRouche.

190
 Page 182 of 248

It's all that voodoo conspiracy stuff that no one

can get a firm grip on where they don't ask you to deal with

facts. They want you to deal with some type of feeling they

can create in the pit of your stomach, some inherent distaste

or dislike. That's what they want you to decide. They don't

want you to decide straightforward facts. They want you to

decide garbage.

Now, getting back to the issue of finances within

the National Caucus of Labor Committees, you know, and some

of the language you have heard, you know I am not going to

dignify it. You hear it from Charlie Tate. All right, now,

make your judgments, ladies and gentlemen, based on your own

common sense. Charlie Tate was the guy who wanted to turn a

Volkswagen into a limousine. It's obvious why he wanted to

do that. There was no limousine. He knew there was no

limousine. But he wanted to create in your minds the

limousine. I feared for you when he was sitting so close

that some of that venom might spill into the jury box and

infect someone. It was so disgusting, it could have been

fatal.

21 But in any event, that's the kind of, the Charlie

22 Tates said certain things were said. But I have no doubt

23 that things were said in a way within the National Caucus of

24 Labor Committees which has certainly a different sense if

25 you are on the outside than if you are on the inside. And

191
 Page 183 of 248

the reason is obviously when you are dealing with someone in

close association, you don't have to go through the detail

that you might have to do with someone on the outside,

phrases mean things. Formulations mean things. It's like

everyone understands because they are part of the same

group, and this is language that they are familiar with. But

in any event, take the thing-s that were attributed to

LaRouche, even the worst case, the worst cases.

Assume for a moment that those persons whose honesty

I suggest you ought to question to some degree were being

completely honest for purposes of this mini-discussion. Let's

take the thievery and thuggery. It was attributed to Mr.

LaRouche.that he said in the context of a presentation of

some kind to the assembled members in the context of raising

funds and fundraising and the significance of raising funds

and the significance of the activities for which those funds

were going to be expended, that they should raise these funds

by any means short of thievery and thuggery.

Now, let's take a step back from that for a moment.

What does that mean? The Government wants to put OIXQ cast on

it. They want to call this a license to steal. This was — I

am not surprised that they present it that way -- but they

want to say this was LaRouche1s approval of any type of

conduct by his colleagues that goes to show that he is

responsible for it. Well, in fact what does that mean if you

192

think about it? Just take the words — I went through this

briefly before but I am going to argue it briefly. This is in

 Page 184 of 248

terms of presentation of evidence. Thievery, it means

something specific in the law, a theft, a robbery is one

specific kind of thing. Theft, there is petty theft, these

all have specific meanings. But in general parlance, theft

means taking something from someone that doesn't belong to

you* That's thievery.

What is thuggery? That means conduct that's brutal,

that's inherently improper by virtue of its aggressive

nature, whether physical or whether physical or verbal.

Now,, what's he saying in that context? Go out and

do anything you want? No. That's nonsense. What he is saying

is look, go get it honestly. It's sort of like the Monroe

bonding (phonetic) or whatever it was, do it, do it the hard

way. Go out and work for it. We are not going to get

involved in stealing. We are not going to get involved in

thuggery and brutal. That's not what — what he is saying I

assume is I don't want anything like that done in my name.

But you have to understand the context. You know,

it can be bent and twisted. I suggest that's what's

happened. It's been bent and twisted for a particular

purpose.

But what else did Mr. LaRouche have to say? You

know, they say LaRouche was responsible, that LaRouche

193

1 exhorted, that LaRouche controlled, that LaRouche was on

2 fingertip, manipulative control over the finances and every

3 other thing. What did he say? What have we heard in

testimony that he said about the loans problems?

 Page 185 of 248

First, he recognized when it was brought to his

attention, the Hintz memo, that there was insufficient

funding for repayments. Hintz admitted it. I think Hintz

was

certainly in terms of those exassociates, the only one who

didn't go indulge in dramatic overkill, dramatic

exaggeration.

10 He maintained some integrity and some honesty. But he said

11 he thought LaRouche was responsible for the formulation

of *2 that policy although he doesn't know it because he

wasn't

13
there, but that was his feeling.

14 And then we learn that LaRouche said loans are bad.

15 Contributions are neutral. Sales are good. What's he saying:

16 Look, don't take loans. Only take loans for special

37 projects. Go out and do it the hard way. Sell the litera-

18 ture. Don't even do it the middle way. That is neutral.

19 Don't even get contributions. Sell the literature. That's

20
what we are all about. We want to get the word out. Let's

21 get our revenues up by increasing the sales of our literature

22 And then he said, he was responsible as you have

23 heard evidence for a suggestion that there had to be a

24 scaling down of the loans ultimately to zero, to zero

25 Because that's not the way. Loans were not the best way on

194
 Page 186 of 248

a long-term basis to try to raise funds. Short-term basis

they were okay. In critical situations, they are okay. But

they were not the best way to do it.

So in fact, what we are hearing is a recognition

and an attempt to deal with from his position with certain

of the difficulties created in the context of the financial

warfare that was going on at the time.

Just a few other sort of rambling things that came

out in the context of the Government's opening or have other-

wise occurred to me since I put this thing together: the

Government seeks to, in the context of the notebooks, to

create an inference that is unsupported from the evidence.

John O'Connor, who was a Secret Service agent who testified.

1 don't think any of us would quibble with the fact that he

was honest, that his testimony was truthful. He acknowledged

that he doesn't know. He has spent hours and hours and hours

reviewing the notebooks, trying to familiarize himself with

the contents of it. He doesn't know what any of it means. He

doesn't know what the format was- He doesn't know whether

these were questions to or from first-hand, third-hand,

fifth-hand or underhand. He doesn't know anything about it.

And that's all — there is really no way to tell.

You heard some evidence from the tape that everyone

took notes and everyone briefed each other. So whose notes

were they? Were they something you know and how much

195

rambling was there in the transmission? How much accuracy?

You hear this stuff — what appears is forgive or forget in

 Page 187 of 248

one notebook, turns up as forget or forgive in another. I

mean, that shows — and what does it mean? It's shorthand.

Who knows what it means? Who knows what the context is?

The Government wants to supply you the context. They

want to tell you what it means. You can draw your own

conclusions, ladies and gentlemen. That's why you are in the

jury box. It's your common sense and not the Government's

lack of it that controls here fortunately, and you can make

whatever conclusions appear to you to be the right ones to

draw from the facts that are yours. But — am I still within

my allotted time,. Your Honor?

THE COURT: Yes, sir.

(Pause in the proceedings)

MR. ANDERSON: Could 1 have just a moment, if Your

Honor please?

THE COURT: Yes.

(Counsel conferring off the record)

MR. ANDERSON: Back to Count XIII for a moment.

Another peculiar aspect of this conspiracy to thwart the

lawful purpose of the Internal Revenue Service is the

Government's allegation that somehow that you know, they

are guessing. We just couldn't tell* We don't know. If they

don't know, they shouldn't have indicted him. The fact is

196

the records were there- Now, what kind of a conspiracy is

it that writes down those attributions of income by L's and

H's or otherwise that the Government is alleging were the

object of concealment.
 Page 188 of 248

I mean, it's again implicit contradictions within

the Government's case that I think is most revealing. You

don't keep records that demonstrate the expenses that you

are trying to cover up. It's silly. It's worse than silly.

Now, ladies and gentlemen, this is a criminal case.

It's not a civil case. Mrs. Sexton has not to date been

repaid some money on loans, obligations taken, but you know,

your function, and I think it would be -- I expect you to

feel badly for her. I would be surprised if you didn't. I

mean, you know there is a lot of money hanging out there -But

the issue is, you know, she could have brought a civil suit

to recover. Maybe she will- Maybe she has. It's not in

evidence. You just don't know. But that's another issue for a

different Court, potentially a different set of jurors. The

issue in this case is not whether we feel badly for those

persons who didn't get their money back. And you can't make

your decision based on that. You can't feel, you can't decide

on the basis of compassion for those people. You can't decide

on the basis of pity. You have to decide on the hard facts,

and the question is, no one feels good about that. You can't

think for a second that any of these fundraisers

197

or anybody else feels anything but badly about that fact.

I mean, their entire lives, their past lives, the

things they have worked so many years for are at stake here,

are at stake at least in part because of the Government's

allegations regarding the status of these loans. They feel

badly that these — they did not create the situation which
 Page 189 of 248

caused those loans to be unpaid during such periods

of time that they could do anything about it. Those actions

were external. Those actions came from enemies of various

kinds that would for various reasons, including the

Government, who precipitated this case, and the bankruptcy.

And the fact that they are not paid today should not be a

consideration in your minds.

I think you are going to have to fight to get it

out of there, because it's normal to feel badly for someone

who has if not lost their money, at least not gotten it

back yet.

But you have to decide this case on other facts and

other considerations. And obviously I am not — I have made it

clear about my feelings of the underpinnings of the

Government's case and the way it was delivered, and I suggest

that some of that bad smell that we had in the courtroom on

occasion didn't come from the outside. But was the rotting

carcass of the Government's case that was whiffing up our

noses.

198

MR. MARRHAM: Your Honor, on a very brief matter,

could we approach the Bench just very quickly?

THE COURT: Yes.

(Whereupon, a conference was held at the Bench

with Court and counsel, out of hearing of the jury, and

reported as follows:)

MR. MARKHAM: Mr. Anderson just told this jury that

the Government precipitated the bankruptcy and the Court

 Page 190 of 248

order was very clear in that regard and I just

wonder since we are going to be waiting around anxiously for

the Court to give the charge, will the Court consider a

curative instruction from us if we lodge it tomorrow

morning?

MR. ANDERSON: I didn't hear. What is this about? I

did not say that. That is not what I said. I would like to

get the Court Reporter to read it back.

THE COURT: Precipitated by the Government —

MR. ANDERSON: I didn't say that.

THE COURT: 1 think you are crazy to ask for the

instruction. It's going to do nothing but highlight it.

I will tell the jury right now to disregard it

if you like. I think it was such a -- really I don't

think actually it contravenes the Court's order anyway.

MR. ROBINSON: Let us consider it and see where the

rest of the argument is going.

MR* ANDERSON: We can argue the transcript portion

200

I said to you at the outset of this case that it's

not about money. I stand by that. What this case is about is

about a group of people who have spent and devoted their

entire lives to fighting for truths and ideals that they hold

dear. When I say devoted their lives, that is a word that

people have a tendency to throw around kind of loosely. There

are people that talk about, I can't think of a good —

devoting their whole lives to keeping a good suntan or

devoting their whole lives to raising roses or something like

 Page 191 of 248

that."'

When I say these people devoted their lives, please

listen to what I an saying. I mean, you heard I believe it

was Vera Cronk testify in response to some questions from Mr.

Anderson that from 9:00 in the morning until 11:00 or 12:00

at night working in Mr. Anderson's poorly furnished anthill

or whatever it was he called it. They did it by choice- They

did it out of a sense of commitment. I suggest to you folks

that that is not something that can or should be taken

lightly by any of you when you get to the ultimate issue in

this case.

1 would further suggest to you that this case is

about a political movement. There is no question about that.

It's a movement that has devout members. It's been a movement

that has dedicated followers that want to see it succeed.

It's about a movement that has powerful enemies who want
to

199

1 of that.

2 THE COURT: I don't think we need do that.

3 (Whereupon, the conference at the Bench was

concluded, and the following proceedings were held:)

THE COURT: Mr. Clark?

6 MR. CLARK: Thank you. Your Honor. Ladies and

7 gentlemen, as this case w'inds down, and it really is winding

down, one thing occurs to me, and that is that this case is

somewhat remarkable in several respects* As you listen to

10 the evidence it might have occurred to you that the Government

 Page 192 of 248

11 has spent the better part of four weeks attempting to present

12 evdience of a fraud. What they managed to do in the course

13 of four weeks is present evidence, and I would say conclusive

14 evidence, that some people loaned money to these people, and

15 some are dissatisfied and some didn't get repaid.

16 It's perhaps even more remarkable that the Government

managed to spend one full hour this morning arguing to you

18 and convincing you that people were loaned money and didn't

19 get paid back. That's all they have proved, and that's all

20 that they have argued. They spent four weeks proving it and

21 an hour arguing it.

22 i would suggest to you that that is not a mystery

23 in this case. Nobody is contesting that. That is not to

24 say however that this case is without mystery, because there

25 is, and the Government has not endeavored to address it.

201

see it fail.

I would suggest to you and perhaps most

importantly, this case is about not money but it's about the

state of mind of each and every one of the individuals seated

behind me at the time that they solicited loans from

supporters of their organization in an effort to permit their

organization to continue to flourish, in an effort to permit

their organization to continue to decimate its ideals. And

the issue is a very, very simple one. You have to be

convinced at the conclusion of all of the evidence and the

conclusion of these arguments that these people, of course I

am referring specifically to Mike Billington, you have to be

 Page 193 of 248

convinced beyond a reasonable doubt that at the

time that these people solicited the loans that you have

heard about over the last month, that they did so without the

intent to repay those lenders. Period.

Nov?, I would suggest to you, I said there was some

mystery that attaches to all this. Doesn't it seem mysterious

to you that seven out of 350, who have and I'll repeat the

words and I'll probably repeat them more than you want to

hear them, devoted their lives, given up and forsaken

material possessions, families, everything else, in an effort

to create really in their minds a better world for this

generation, future generations, doesn't it seem mysterious to

you that these people would be willing after devoting their

entire

2UZ

life, that they would be willing to steal, they would be

willing to steal money, to promote those goals? It's a

mystery the Government hasn't addressed in four weeks nor in

an hour this morning.

Doesn't it seem mysterious to you that people who

have devoted their lives to gathering support for their

ideals would then be willing to purposely and intentionally,

with malice aforethought, steal money from the very people,

who they have won over to their side, that they would steal

money from the very people that they have convinced to

believe in their ideals?

Ladies and gentlemen, doesn't it seem mysterious to

you that these seven people would intentionally steal from

 Page 194 of 248

their supporters and yet at the same time devote I

don1t know what the figure is, but I will say thousands of

hours and thousands of dollars keeping records of those

financial transactions, that they devoted thousands of

manhours and thousands of dollars to devising plans to

curtail lending, that they spent thousands of dollars and

thousands of hours trying to generate other sources of

revenue to repay those loans?

If you are going to take the money and run, do it.

Do it. Don't replace Kr_ Yepez with Mr. Hints and thereby

replace him with a computer so that you can figure out how

to get these things straightened out and get them repaid.

Don't

203

spend all that money. You have got it in your pocket. Why

don't you use it for whatever your fraudulent purpose is

supposed to be?

The reason they didn't do it is because that

wasn't their purpose. They fully expected to repay these

loans at the time they took them. They fully expected to

repay them today.

Ladies and gentlemen, doesn't it seem mysterious

to you that these people would defraud their best supporters

while at the same time maintaining continuous contact with

them? Over the telephone, through the mail, through the

mailing of what it sounded to me raore subscriptions than

they ever wanted to see, if they are trying to defraud them?

I would suggest to you that if you are convinced

 Page 195 of 248

that these people committed fraud, you also have

to be convinced that they did so with a commitment to be

absolutely sure that they weren't going to get away with it.

They have been around since 1970. They have gone out of

their way to tell each and every lender, eaLch and every

supporter and everybody else who would listen who they are

and where they are.

I would suggest to you that with this

organization what you see is exactly what you have got. You

have got honest, dedicated people who are fighting an

uphill battle against very powerful enemies, in their

enemies1 backyard.

204

And right now they are on..the down side maybe.

Now, I would ask you, what evidence have you heard

from the Government to convince you that a fraud existed? I

suppose that that question always has to start with the

witnesses obviously, and the logical starting point for me

is the same as the logical starting point for most of the

other lawyers who have spoken to you, and that's Chris

Curtis.

The Government told you at the outset that it

considered Chris Curtis to be no different than any other

fundraiser in this case except for the fact that Chris Curtis

quit, that Chris Curtis walked away from his obligation. You

have all heard that over and over again. Well, Bill Moffitt

asked the rhetorical question in his opening statement, where

is Chris Curtis' chair? Well, that shouldn1t have been a

 Page 196 of 248

rhetorical question, and frankly, I don't like him

to point at me when he is asking where is Chris Curtis'

chair. I got no problems with Chris Curtis not sitting over

here. I do have a problem with Chris Curtis' chair being over

there. (Indicating the witness stand)

And I am not sure why I have that problem. But

it's something that you all should give a lot of thought

to, and a lot of consideration to.

Bill offered one explanation to you as to why Chris

Curtis' testimony is different in December 19 88 than it was

when he spoke to Special Agent Bryant, when he spoke to

agents

205

1 of the FBI, and when he testified under oath in Boston.

2 The explanation is that his testimony was changed and

3 sculpted and that he sat up there and told you something that

4 wasn't true. It's a reasonable explanation.

5 I for one would like to think that there is an

6 alternative explanation. I leave it to you to make up your

7 minds. I would suggest tp you that if Chris Curtis got on that

8 witness stand and intentionally and purposely and malevolently

9 said something that wasn't true, then shame on him.

10 But think about Chris Curtis for a minute in the

11 context of this entire case and I use him -- you saw what he had

12 to say and the way he said it. You saw what Charlie Tate had to

13 say and the way he said it, I put this to you: what Chris Curtis

14 and Charlie Tate had to say certainly had a different cast to it

15 than what the current members of the NCLC had to say who were
 Page 197 of 248

16 called as witnesses. It certainly had a different cast

17 to it than what the lenders had to say who were called as

IS witnesses. Those people basically got on the witness stand and

19 said, yes, I loaned some money and I would sure like to have it

20 back. I think that the issues that this organization support are

21 important. I loaned money to a humanitarian cause. I am distressed

22 that I lost my money, but I still believe in what the organization

23 is doing, despite all of the stuff I have heard and despite what

24 the

25

206

Government has told me and despite the fact that these people

are on trial in a courtroom-It goes deeper than that with

Charlie Tate. It goes deeper than that with Chris Curtis. And

again, the question is why. Again, the example that I will use

is Chris Curtis. For 12 years, Chris Curtis was as devoted to

this cause as any of the seven people that are sitting back

there. I believe he said he joined when he was 25 years old.

He worked in the same anthill that Mike Billington worked in,

J R , P G . He did the same things that

they were doing. He believed in the same things they believed

in. No reason to believe he was any less committed.

I would suggest to you that I suspect that that is

a pretty good mind set to have. It probably gives you a

pretty good feeling to sit there and say, you know, I am

giving up the things that are important to most people. I

don't care about getting a new car every couple of years. I

don't care about blasting around the river in some big

 Page 198 of 248

powerful boat. What I am going to devote myself to

is the betterment of mankind. I am going to, with every

ounce of courage and energy that I have, that is what I am

going to do.

And that's what Chris Curtis did for 12 long

years. And Chris Curtis gave up a lot,

I would also suggest to you that I suspect for

each and every person who takes that route, it requires some

real

207

introspection to come up with that commitment. Chris Curtis

said when he was being asked even about the loans that are the

issue in this case, I convinced myself that people were going

to get paid back. I thought about it and I didn't want to

believe it." I was playing games with my mind.

Well, I would suggest to you that probably when you

are in about the 14th or 15th hour of any given day sitting

in that anthill working for what you believe in, every now

and then you have got to ask yourself, what am I doing here?

Why don't I go out and get a tan? Why don't I go to the

beach? Why don't I get a regular job and, you know, get a

four-bedroom house somewhere?

Well, if that's the sort of mind set that you have

to achieve in order to commit yourself to a cause, think about

what Chris Curtis, think about what Charlie Tate must have

gone through when they made the decision to give it up. They

walked away from it. The job is still undone. The organization

is still there. Your mates are still back there doing

 Page 199 of 248

everything they can to further your ideals while you

are walking away from it, getting a job drawing cartoons for

the newspaper, whatever it is that Curtis did. That is when

you really have to convince yourself that you have made the

right move.

They are talking about money in this case. Well,

some of us have got more money than others but I would

suggest

208

1 to you each and everyone of us has about the same amount of time

2 on this earth and unless Chris Curtis and Charlie Tate can

3 convince themselves that leaving was the right thing to do, they

4 have thrown away 12 years of their lives. So maybe that's an

5 explanation. I personally have a real problem sitting around

6 calling somebody a liar, because that's probably about the worst

7 thing you can call somebody, but I do know that Chris Curtis

S testified differently before you all then what he told Charlie

9 Bryant and what he told under oath in a courtroom in Boston,

10 I think that's set forth in some testimony that Chris

11 Curtis gave in response to some questions that Bill Moffitt asked

12 him-back on November 28th, the weekend of this trial. Bill asked

13 him and said words to the effect, do you remember telling Mr.

14 Klund that you did not believe the telephone soliciating

15 employees acted in anything other than good faith in their

16 solicitation efforts?

17 Curtis told him, no, Mr. Moffitt. Those are not my

18 words.

19 Bill asked him, did you say that in substance?

 Page 200 of 248

20 Curtis said 1 don't believe so.

21 Later on, the same day, Bill asked him, not about a

22 statement he had made to a law enforcement officer. He asked him

23 about a statement he had made under oath. And the question — Bill

24 asked him if he had made that statement under

25

20'9

oath in Boston. The question that Bill read to him was, "I am

talking about solicitors per se. The phone team solicitors per se

or the field solicitors as opposed to any other individuals„ I am

asking you whether or not there is any question in * your mind as

to whether or not those solicitors were in fact engaging in their

activities in good faith?"

His answer in Boston: No. I thought they were

acting in good faith.

In this courtroom, Bill asked him again, "Did you say

that at the trial in Boston?"

Curtis said yes.

Later that same day, I asked Curtis, "Do you recall

telling Special Agent Bryant on February 10th, 1987, that Mike

Billington would fall on the sword and that he had the personality

of a missionary?"

Curtis wasn't willing to say no. What he did saw was,

"1 may have said that. I just don't recall specifically. I don't

think that's my formulation."

On Thursday, December 8th, Special Agent Bryant got on

the stand, was confronted with that same statement and said

simply, "Those were Chris Curtis' words."

 Page 201 of 248

Something has changed Chris Curtis in the last year-

and-a-half. It's caused him to go from characterizing Mike

Billington as a dedicated individual with a personality of a

missionary, to somebody who would resort to I would say

210

inane and childish names referring to the people that are

iraportant to him, supporters of this organization, rather

than being described as a missionary, Chris Curtis used the

word, "Zealot," used the word, "Ruthless."

I would suggest to you again — I hope Chris Curtis

wasn't lying. I know he changed his statements. I know he

changed his testimony. And perhaps he should be more the

object of your pity than your scorn, because I would suggest

that Chris Curtis is not trying to convince you all of any-

thing, He is trying to convince himself.

For whatever the reason, I simply go through this

exercise to ask you to please examine and scrutinise the

testimony of Chris Curtis, Charlie Tate, and the other

quitters with some very close scrutiny to determine their

bias and their reason for testifying:as they did.

Now, I would like to shift gears and get down to

what I think this case is really about and that is not what

did Chris Curtis and Charlie Tate know but it was what did

Mike Billington and the other fundraisers in this case really

believe when they were soliciting loans?

Well, I would suggest to you that a good

indication of what they probably believe came from Wayne

Hintz, another former member. He is the fellow you may

 Page 202 of 248

recall who wasn't a fundraiser, but he was the guy

who was in charge, took oyer from Mr. Yepez, and was in

charge of dealing with the most

211

troublesome aspects of the loan repayment plan. If somebody

was really bummed out, that's when Wayne Hintz came to hear

about it. And you will see a bunch of memos that he wrote

about these troublesome loan cases. I think they are very,

very instructive.

For one thingr if you choose to look at them, look

at them very, very closely. Look at them with the thought in

mind that there were according to who you believe between

3,000 and 3,500 lenders to this organization. Count the

names on Wayne Hintz' memos. How many big problems were

there? 50, 75, 100? You check it out.

Furthermore, I think that you have to, if you

look at the memos, you have a peculiar insight. You know

more

than Wayne Hintz knew when he was writing those memos. I

would suggest to you that Wayne Hintz probably took the most

conservative imaginable approach in trying to take care of

his special problem cases.

I say you know more than Wayne Hintz knew because

I guess the question is what did it take to get on the gloom

and doom list that Wayne Hintz had? You know, these people

got to be repaid. This is a big problem. That's a big

problem. Well, there is a name that appears as often as any

other on Wayne Hintz' doom and gloom list, and you have
 Page 203 of 248

heard what that person had to say. Nick Anderson.

That's the man from Oklahoma who got up there and said yes,

I loaned money

212

1 for the house and Jbykus and I did all this other stuff, and they

2 were paying me this money every month and asked himr were you

3 satisfied? Yes, I think they are pretty good people Yes, I am

4 satisfied. I am getting my money back. The guy's name is all over

5 Wayne Hintz1 raemos. This is a big problem.

6 I would suggest to you that perhaps Wayne Hintz is the

7 best example of the fact that these people didn't have any

fraudulent intent at all when they were soliciting loans. They had
S
Wayne Hintz running around like the chicken with no head trying to
9

get everything taken care of and everything that was possibly

10
conceivably a problem he was bringing it to people's attention.
U
The same guy who is doing all this also gets up on the
12
witness stand and tells you, when I left in mid-1986, I was
13
optimistic. That's not my word. That's his word. I was optimistic
14
that these loans would ultimately be repaid, extended or
15
forgiven, and that that optimism pervaded the organization.
16
How is Mike Billington supposed to be less
17
optimistic than the guy who is in charge of taking care of the
18
big problems?
19
Now, I would suggest to you that the Government has
20
attempted to suggest to you that a fraud was perpetrated by these
21
fundraisers by the representations that they made to perspective
22
lenders. What were they?
23

24
 Page 204 of 248

25

213

You have heard evidence that each and every loan

that was solicited by these people was preceded by the

mailing of subscriptions, describing the battles that the

organization was inr describing what they were about,

describing What they were doing. Each and every representa-

tion that was made included the fact, look, we are not a

business, we are not out -- you know, we don't have a diamond

mind in South Africa that is going to make $10 zillion next

month so it's a good investment.

The whole pitch was perfectly honest. It was we

need money. We are in dire straits. We have a battle to

fight here, and if we can win it, everybody is going to be

better off. We are not a money-making proposition. We need

your money so we can spend it right now to fight a battle.

How, I think that's borne out by what the lenders

said. Dorothy Powers took notes, yes, SDI and the New

Republic articles a big problem. Everything is coming down

around their shoulders. They needed my money. That's what

the pitch was.

I think it's important to understand that. It's

important to understand when the Government says well, you

know, that they made a big point. Were you told your loan,

you might be asked to forgive it? Were you told you might be

asked to roll it over? There wasn't anything wrong with

that. You know, they are making some big fraudulent —• if I

 Page 205 of 248

214

ask you to lend me ten bucks and you do it and I am thinking,

geez, I hope he never asks me to pay him back or I hope he

agrees to extend it, it's not a fraud, it's not a fraud. So

let's not get confused about that.

But did they tell you that there was financial

warfare? Did they tell you this, that and the other thing?

Well, I think that what John Markham tried to use, I guess

after this case is all said and done will be remembered as

the metaphor of the burning barn when he is talking about the

representations, and as far as it went, it was neat? didn't

have anything to do with this case, but it was neat. The

reason it didn1t have anything to do with this case is that

when Mike Billington was on the phone asking for money, he

wasn't watching the barn burn down. What he was doing was

building the barn. And that's what he told people. He was

building it up. And he needed their money to do it.

When Mike Billington was soliciting money, the barn

hadn't burned down. In fact, the barn is still standing up

now except for a few planks that the Government has jerked

out and has sitting on these chairs back here.

What Mike Bilington, if you want to carry his

metaphor farther, what he did tell lenders was that I am

building this barn and it1 s importantT and it's got to be

built, but because there's so many vandals around my

neighborhood, I can't get insurance from anybody else to

 Page 206 of 248

215

insure it. I can't go to a bank. I am going to you. What

he told them, ladies and gentlemen, was the truth.

There is another reason that that metaphor is not

apt to this case, and that is what we said over and over and

over again/ This isn1t a strict commercial deal. I will admit

it. When I was trying to get my argument together, I was

trying to think of a metaphor, too. I started thinking of the

stock market, you know, they lock up all the stockbrokers and

they ask you to put your money in the stock market That buys

into the Government's theory. This isn't a moneys making

proposition. I think each and every person who loaned you know

you take your money out of your money market that's making 9

percent and you give it to somebody who calls you on the phone

and gives you an unsecured promissory note for 10 percent-

That's not smart business, and I think each and every lender

almost to a person said, sure, I knew it was a humanitarian

cause and I wanted to help.

You want to talk about representations, I think

that the apt analogy is one that's been touched on in this

case. And that analogy is the United States Army. And those

of us that came of age during the Vietnam War probably

listened to all those ads about why you ought to join the

Army, I know I did. I found out you could join the Army if

you wanted to see the world. I found out you could join the

Army if you wanted to get money for a college education. I

found out you

216
 Page 207 of 248

could join up if you wanted to serve your country. I found

out you could join the Army if you wanted to learn a trade.

Now, when the Army told me that, they knew that we

had been at war for 19 of the last 70 years. Were they

perpetrating a fraud on me because they didn't tell me that I

might not get to use that college scholarship because if we

go to war I night go to some country I never heard of and get

my face shot off? No, Because I knew what the Army was all

about. I knew they were fighting a war. There is no

guarantees in a war except one. Except one. And that is the

guarantee that Hike Billington gave.

He guaranteed his personal word of honor that he

is going to be around. That he is going to see it through.

If he gets prosecuted and has to go to a courtroom and fight

his battle there, he will fight it. He will survive it. And

he is not going to quit. He didn't tell them about any

diamond mines. He didn't tell them about any prospects of

acquiring a lot of personal security, a lot of security for

all these loans. He gave them his personal word of honor,

and that is exactly what the case is about. The truth.

Now, if you want to talk about material misrepre-

sentations, do you want to talk about material omissions?

Let's talk about them. Let's talk about them right now. Did

you notice that during their case, the Government played to

you a couple of tapes of Mike Billington talking to

217

Audrey Carter. Did it seem weird to you that they played the

2 same tape again during their closing argument? It didn't seem

 Page 208 of 248

3 weird to me. There was a reason for that. Keep in mind that

4 the Government — I wish I could remember what the word was

5 they used. It was a good one. He said that I have you a

6 freeze frame- That's what it was. I gave you a little freeze

7 frame of Mike Billington. That's what it was. During their

8 case they gave you three minutes out of 43 years. That's

9 about 90 second too long. So they cleaned it up in their

10 argument. They gave you just 90 seconds.

11 Well, don't forget about the other 90 seconds. And

12 keep in mind, you know, go back and listen to the tapes

13 again. Read the transcripts. Do what you want.

H Keep in mind that the tape that they played you, it

15 wasn1t a fundraising solicitation. It was a tape from

16 February 20th, 1986 that Mike Billington tapes after Audrey

17 Carter had decided to back out on a loan that she had

18 previously offered. The tapes will show that Mike Billington

19 was talking to her and trying to find out why she had backed

20 out, trying to find out if the Government was influencing her

21 or saying bad things about the organization; in fact Audrey

22 testified from the stand that the FBI agent showed up and

23 given her a packet full of derogatory newspaper articles.

24 The Government is suggesting to you or has

25 suggested to you in its argument that Mike Billington was

raising money

218

s
from Audrey Carter on the tape that it played to you. It1
 Page 209 of 248

not true.

He hadn't even called her* Audrey Carter had called

him. She was asking about her interest payments.

Now, what Mike told her was, hey, look, we are not

selling stocks and bonds here. Nobody who has brought

operations against us has.said our loans aren't good. It's

true. Then they say, well Wayne Hintz said it, Wayne Hintz

hadn't run — They are talking about their enemies. What Mike

Billington was saying to Audrey Carter was we got a lot of

enemies. They hate our politics. They may hate us

personally. But they have never said our loans aren't good.

Have you heard from any of the enemies of

the organization who said the loans weren't good?

What's more important is that they elected not

to play you the other tape. Maybe you will forget about

it. Don't forget about it.

Let me read to you Mike Billington's hard sell,

Mike Billington's dishonest fundraising approach. December

19th, 1985: Audrey Carter. "The only thing that -- the

thought has come to me that there is no — I wouldn't say

insurance but no guarantee that the money is going to be

there to refund me if I need it."

Mike Billington responds to that. Here comes the

hard sell: "Well, it's a better guarantee than a company

219

that's about to go bankrupt can give you."

Audrey Carter. "Well, I am not going to give it

any more thought."

 Page 210 of 248

Mike Billington: "Right. Well, you can put your

money in a "bank if .you think that's safe. I mean —"

Audrey: "No, no."

Mike: "Not really. I mean nobody is safe in that

sense. That is a reality we all have to face."

This is the ruthless, evil guy. It's a pretty hard

sell, Mike. There is nothing dishonest about that.

Make no mistake about it: Mike Billington was

committed to his cause and he was committed to raising money

to promote it, but he is not about dishonesty. That's what

Mike Billington is about, but the Government elects not to

play that for you. They play you another tape that has

nothing to do with fundraising. They play you a tape from

February 20th, 1986 when Audrey Carter calls to ask about her

interest payment. You heard evidence from Audrey Carter. You

have exhibits in the file that tell you what she was calling

about. She made two loans, one on November 12th, 1985 and one

on November 26th. Quarterly interest payments were due on

February 12th and February 26th. She called on February 20th

to complain and the tape that they played you, Mike says

okay, 1 hadn't heard from you. I didn't know if you had the

same address* We will take care of the interest

220

1 payment. She got the payments. She got the payments. She got the

2 checks in the file. You have got the testimony from Audrey

3 Carter. She got the payments.

4 Granted, it was downhill after that, after the spring

5 of r86. You have heard more evidence than you need to heard. But
 Page 211 of 248

6 Mike Billington wasn't lying. Mike Billington is not a

7 mind reader. Mike Billington can't see into the future. That's not

8 what this case is about.

9 Let's look with a fairly critical eye at the little

10 snippets that the Government gives us. You have got to look at the

11 whole picture.

12 Now, I guess the final question is when Mike Billington

13 was soliciting loans, what did he know when he was making the

14 representations to lenders that he was making? Well, he knew about

15 EIR. He knew about debt watch. He knew about Fusion Energy. He knew

16 about the vast and numerous publications that had growing

17 subscriber lists that were making money. He knew about the Latin

18 American contacts that Sylvia Bruda told you about. He knew about

19 the contract that they had with Peruvian industrialists. He knew

20 about the contacts that that contract had engendered with Latin

21 American political leaders. He knew that the organization was

22 growing

23 He knew that Dennis Small had been invited on

24 numerous occasions to Latin America to meet with the people at

25 the very, very highest levels of government and the

221

military.

He knew of the intelligence reports that were

authored by members of the organization were becoming

increasingly valuable to members of the business and Govern-

ment community- , He knew about the Craw Canal project begun

in 1982, that Sylvia Bruda talked about that was expected to

generate a tremendous amount of income. He knew about the

 Page 212 of 248

political gains that the organization was making.

He knew of the reduced loan ceilings. He knew of repayment

schedules that were set up in the national finance office,

supplemented by payments in the regions.

And perahps most importantly, when he made the loans

to Ms. Powers, Ms. Carter and Witt that you have heard about,

he knew that at least at the outset the loans were fine. Up

until the spring of 1986, those ladies were all paid. Maybe a

month or, you know, a couple of weeks or a month late, but

they all got their first interest payments. It was down the

road that things began to degenerate.

10
To make a long story short, Mike Billington had
11
every reason to believe that this organization had made the
12
right decision, that they had borrowed money to get started
13
to get their ideas across, that they were building, and that
14
they were on the brink of becoming self-sustaining.
15
Now, I don't think it's a good idea to talk in
16
generalities when someone's future is in your hands. And I
17

IS

19

20

21

22

23

24

25

222

think that there are two perhaps small but I would

 Page 213 of 248

suggest important bits of evidence that really go to the

heart of what these people's intent was all about: the

first is the regular delivery of bought-and-paid-for

subscriptions to supporters of this organisation.

Number one, they are keeping in constant contact,

but number two, and I think perhaps more importantly, if you

are about stealing, you don't just steal loans- You steal

money. It seems to me that if you are going to steal, it

would be a lot easier to call up a supporter and say, I'd

like to sell you something. Would you like one? And you get

somebody to want one, and they say okay, send it, I'll send a

check- You get the check. You don't sent the magazine. What

an easy way to steal money. They didn't do that, because it's

not what they were all about. They were about spreading their

ideas, and they needed money to do it.

The second bit of evidence is Dorothy Powers,

Dorothy Powers. Remember her? She's a wonderful lady, and she

was owed a lot of money; still is. She loaned $30,000. She

also made contributions in smaller amounts over the years,

some to the companies, some to the political campaigns. In

fact, she was so devoted, she gave the political campaigns

too much money.

Now, if you are about stealing, you can do one

of two things. You can just keep the money and hope nobody

223

finds out about it or if you are worried about the Federal

Election Commission, you write Dorothy Powers a check for

$500. You put it in an envelope. You mail it to her. You

 Page 214 of 248

call her up and say, "Dorothy, good news. Here is $500

against what the, to reducing our debt that we owe you.

They didn't do that. And the reason they didn't do

it is because they are not dishonest. What they did was wrote

the check and put it in the mail along with a letter saying,

"Dorothy, you gave us too much money. If we keep this, we

will be breaking the law* The Federal Election Commission

doesn't let this happen. You can only give $1,000. You gave
9
us $1,500. Here is your money back. Thank you very much.
10
The next question is, what didn't Mike Billington
II
know, what could he have not foreseen when he was soliciting
12
the loans that are the subject of this case? I know it's
13
Christinas time and it reminds me of the song, you have
14
heard it so many times, so many different ways, I am almost
15
reluctant to repeat it to you again, but harassment by the
16
Government borne out by the Kissinger letter, the FBI
17
involvement, speaking directly to people that are their most
IS
ardent supporters as borne out by Audrey Carter, the
19
immediate reaction to the Illinois primary, the October 1986
20
raid that decimated the organization's records, and finally,
21
I guess sort of the death knell at this point is the
22
involuntary bankruptcy that has prevented them from repaying
23
loans-
24

25

224

Don't you think that those events may have had

something to do with why these people didn't get repaid and

 Page 215 of 248

don't you think that Mike Billington or none of

these other lenders had any way of knowing that those

events would take place, that"those events would decimate^

their ability to raise money?

1 would suggest to you that if you examine it, all

the evidence will show that there was every reason

subjectively and objectively, for Mike Billington to have a

reason for optimism, cause for optimism when he raised those

loans.

There is only one other point that I want to

address to you, and it's one that I hope I have the words to

convey, because it's important to the understanding of this

case and that is this: it may occur to one or more of you

that, well* I don't think there was a reason for optimism, I

don't even know who the president of Peru — I didn't know

who the president of Peru was until this case started. Why

should it be a big deal that Alan Garcia gets elected

president of Peru and says he wants to stomp out drugs. Why

should that make Mike Billington optimistic?

Why is it a big deal that we are being consulted

about the burning of the palace of justice in Columbia? Why

should it be a big deal that a couple of people win the

democratic primary on the State ballot in Illinois in 1986?

Why should it be a big deal that we have access to

225

Richard Morris on the National Security Council and he accepts

what we say about information that's being passed out? Why is

that a big deal? I don't care about that* What I want to do, I
 Page 216 of 248

am worried, to me a big deal is that my kids get into college

or that I meet my mortgage payment or that I go where I want

to go on my vacation,

In order to understand this case, you can't think

like an ordinary person. You have to think like somebody who

has committed themselves to achieving a goal that to you or me

or most anybody else probably seems absolutely unattainable

And what might seen like a little victory to you, you know, a

primary victory by somebody you never heard of is a big thing

when you are as close to it and you are in the middle of it

like Mike Billington and the rest of these folks.

I would suggest to you that they have taken on

some very, very powerful people. They are playing by their

rules. They are playing on their home court and what might

seem like a little victory to you or something unimportant,

something you have never heard of, it's what it's all about

to Mike B'illington and these people.

I would suggest to you that fraud and deceit

is simply not what they are about.

Thank you.

THE COURT: Take a short recess.

(Whereupon at 5:00 p.m., a short recess was taken.)

22.

MR. GETTINGS: May it please the Court, members of the

jury, the lenders in this case were wronged, and as between the

defendants and as between Will Wertz and the lenders, the

lenders deserve all the sympathy in the world, and these people

deserve none. The lenders lost money. And it sure wasn't their
 Page 217 of 248

fault. They were wronged, and there's just no way

that-I or any of my colleagues are going to attempt to get

around that fact.

But was that wrong criminal? That is what this case is

all about. It is taking an obvious wrong, a conceded wrong,

something that nobody in their right minds could possibly

question as a wrong and saying to yourself, can we escalate that

wrong and should we escalate that wrong, because it is

ultimately beyond anything else totally in your hands. If you

choose to escalate the wrong through criminal conduct, that is

within your power, and if you refuse to escalate that wrong

through criminal conduct, that is likewise solely in your power.

Now, for you to find that criminal wrong, and find that

Will Wertz or anybody else was a part of it, you have got to go

through a thought process. It is uncomplicated. As a matter of

fact, it is simple. But it involves just a little bit more than

finding the wrong and finding that Will Wertz or anybody else was

involved. And that thought process and the fact that you would

earnestly and diligently

227

sincerely engage in it is absolutely fundamental. Our

entire system of criminal justice is premised on you, the

jury, a jury, any jury that sits in any Courthouse from

coast to coast on any given day, in these great United

States, any jury is obliged to honor the cornerstone of

fairness that is built into the American system of justice,

that gives us something to brag about, something that we

 Page 218 of 248

boast about, and something that we say with pride that we

have the best and the greatest system of criminal justice

devised anywhere at any time in any part of civiliation.

And we all brag about it. And the fundamental thing that

makes our system different from any other, different from

Russia, different from China, different from Peru, Brazil,

wherever, is the very simple concept that is recognized

that all criminal justice systems are inherently loaded

against a defendant. That is just the way it is.

The defendant always has to be the defendant on

the defensive, defending charges that are defined by the

Government and where the Government rightly, rightly —

there is nothing wrong with this, and believe me 1 am not

complaining, I am not hollering about it. That is the way

it is. it is fair because in the end it works.

But that system is loaded against the Government,

and here in America we recognize that. We recognize that

that is the way it has got to be or else it would just all

be

228

crazy. So we give the defendant one thing, one thing the.t

does not exist anywhere else in the world. That is, we

give the defendant the obligation, the right/ the power to

sit back and say "Government, you have got to prove it;

and Government, you have got to prove it beyond a

reasonable doubt." That is the one thing in the American

system that evens it up.

And you can't just say it happened and Will Wertz

 Page 219 of 248

was there. He was involved. There is no question he

was involved. And there is no question that if there is a

money loss and this were a civil case, he could be stuck with

civil liability all over the place. But in the criminal

system it is different. We are not talking money, dollars,

cents, nickels and dimes ? things like that. We are talking

freedom. We are talking felony convictions. We are talking

felony conduct with enormous consequences down the road, so

our system says when that kind of thing, that kind of power-

ful, enormous thing is at stake, we are going to shift and

we are going to shift the burden of proof to the Government

to persuade you and to prove to you that they have proven by

the evidence that these defendants are guilty of the crimes

charged, not wrongs, but of the crimes charged, not just

crimes, the crimes charged beyond a reasonable doubt.

Now, that is a thought process that you must go

through after you find the obvious, the clear, the

evident

22 9

thing, that indeed there was a wrong here, and that my client at

least, I will speak for him, I won't speak for anyone else, but he

was certainly involved in it* That's the rule. That's what juries

all around the country have been doing ever since we put this

system into practice. It's something that we all had in mind when

you were selected back four weeks ago, and I haven't seen a thing

on the face of anyone that gives me the slightest concern, that

gives Mr. Wertz the slightest concern that you folks will do that,

that you will go back there and you will hold the Government in
 Page 220 of 248

your deliberations, that in essence in a word, in a sentence is

really all it is that you will hold the Government to that burden

of proving beyond a reasonable doubt that these defendants have

committed more than a mere wrong that resulted in loss,

substantial loss to some otherwise totally innocent persons.

Now, that, members of the jury, is really the

straightforward part of the Government's case, the lenders. That

was easy. That could have taken us two or three days at the very

most to hear. If you were to retire to deliberate after having

heard that, I think you must understand by now that you wouldn't

have been able to convict them of anything, certainly not to

convict them of the charges in this indictment, because that

straightforward part of the case isn't enough, and indeed, that is

why we have

23 0

been in here for certainly longer than the three days that it

might have taken for the Government to put on that evidence, much

longer than that.

As I talk with you about some of the Government's, the

details" of the Government' s case, I am going to be attempting to

show you that once you get past the lenders and all of the facts

and circumstances surrounding the way the loans were taken, once

you get past that, which, for the Government to prove its case,

they had to do, you get yourself into a thicket. You get yourself

into a dark pit, a black hole as it were, because simplicity all

of a sudden disappears from the case, and the sunlight kind of

 Page 221 of 248

goes behind the clouds and you are left to wander around

in the thicket of all the other evidence, past the lenders, beyond

the lenders that you saw and there was literally, literally

brought in and dumped before you.

I said earlier the Government's burden is a burden to

produce the evidence that persuades you beyond a reasonable

doubt, and as part of that, too, they have the burden of them

persuading you that that indeed is what-they have done; and they

can't do what they have done in this case and merely bring in all

of the rest of the evidence, like the notebooks, for example, and

the notebooks are there for you to read, for you to go through

willy-nilly at your leisure and pick and choose whatever you may,

that is in there; but

231

they can't just bring that in and throw it in front of you

and say, there is something in there. They can't give you

what they have given you, snatches and bits of

conversations, overhearings, conversations back and forth

between people, conversations that took place four or five

years ago where there are some failures of recollection;

there are conflicting recollections as to what was going on.

They can't just give that to you and say to you,

members of the jury, it's all there, sort it out. They have

the burden and the obligation and the responsibility to add

all of that up for you and tell you what it means and

persuade you that it means what they say it means. And I have

yet to hear them do that with any part of this case past the

easy part, past the straightforward part, past the lenders.

 Page 222 of 248

It is a given that you have got to go past the

lenders to find the conspiracy. You can't just assume that

because a bunch of people were involved in a common proj

ect, a common program with common goals that are all

legitimate, that everything else that they do becomes

automatically a conspiracy because just a few wrongs or

even several wrongs are committed in the course of this.

You can't just assume that. You have got to have evidence

of that.

And there is a ton of evidence here from the

different types of people that you have heard, people

from

232

the inside of the organization, who are still inside the

organization and who testified in some fashion perhaps

uncomfortably or reluctantly but truthfully. They have given

you evidence beyond what you heard just from and about the

lenders. And you heard from some people who were no longer

with the organization but were with them at one point or

another. I. call them drop-outs.I suppose as any number --

you know, quitters, you can call them anything that you will.

There were some of them who testified with, hey,

kind of matter of factly. Mr. Yepez comes to my mind. Mr.

Hintz does, too. I don't think that I would agree or ascribe

to everything that they said, but their testimony was by and

large pretty much balanced, and I would say that if you were

to go back and consider the testimony of those gentlemen and

the people from within the organization and on top of the

 Page 223 of 248

lenders, that well, you would have more towards

that conspiracy that you have to look at and towards that

scheme which is virtually the same thing as the conspiracy.

But you still wouldn't have enough.

And of course, the Government knows this. They

didn't bring in Chris Curtis and Charles Tate, because they

like them or because they just wanted to give them a place

to sit and spout off their views. They brought Charlie Tate

in here, and they brought Chris Curtis in here because they

need them. And if you put that thinking process in motion

233

when you do deliberate, probably beginning tomorrow and you

start there and you start asking yourselves, well, yes, isn't

it true that the only reason we would have ever heard those

people was because the Government needed them and if you want

to put aside all of the rest of the evidence and add it up

and see if in fact you can come up with proof beyond a

reasonable doubt, I think, you will find rather quickly no,

you can't do that; and in fact, when you get right down to

it, when you get right down to the facts and the considera-

tions of this case, holding the Government to its burden of

proof, holding them to the fact that they have got to prove

it and they have got to prove it beyond a reasonable doubt,

members of the jury, you are going to conclude that unless

you believe the testimony of Charlie Tate and Chris Curtis,

you can't convict these people honestly and fairly, and you

can't give them the fair trial and the fair outcome that they

are really entitled to.

 Page 224 of 248

You are going to come to that very early in your

deliberations, and pretty soon thereafter, I suspect you are

going to be wondering, could we convict anybody of anything

where it came down to an issue of believing or not believing

Charlie Tate and Chris Curtis. You will reach that point

sometime tomorrow, I sincerely believe, members of the jury.

Now, I am going to get back to that area. I have

been sort of scratching around in the thicket, but I

haven't

234

gotten into it yet, and I really do want to focus on some-

thing that I consider to be the bright side, a bright

side.

The sunlight that I hope when you are done with your

deliberations and you go through that thicket that you also

find on the other side of the thicket, and that is very

simply the defense case. The defense case is not hokum. The

defense case is very real, and ycfu have charts here, and I

am just as happy as can be that someone else used them. I was

the one yoy may remember who got them in here in evidence,

I'm sure glad someone else used them, but for my money# the

defense case is indeed all in those charts. And I would like

to focus you if you would be focused for just a few minutes

on those charts, and let me tell you what I think they show.

I would ask you to look at the first one, which is

the big bar chart showing the revenues of the totality of

the organization for a ten-year period. They show that, and

 Page 225 of 248

they call them towers and you know, you know what

the chart is in terms of everything that it contains but I

want you to look at it from another point of view, and it1s

simply that the Government, to find the charges in this

case, they norrowed the time period.

Of course they didn't have this chart but they

probably knew very well that if they had that chart r that

would indeed be what it showed. Maybe not exactly but

something like that, and so they knew what they were

doing

235

when they picked essentially two years out of the ten-year

lifespan of a very going, viable organization, and said, for-

get the other. Focus on this. We don't care about anything

that took place before then, and you shouldn't pay very much

attention to anything happening since then* So just focus on

those two years. That's what they would like you to do.

Well, of course,■that1s not right. They have no

right to. force you to do that. They have no right or power

to make us sit still for it, and the whole ten years are in.

It gives you quite a different picture. It gives you a

picture of an operation certainly that could not in anybody's

conception of things accord with your routine scam or fraud

operation or sting, you know, the sting, the bunch of guys, a

real conspiracy, though, for whatever else it's worth, what

was going on in that movie, the sting was indeed a conspiracy

to defraud and what you have is just a bunch of people get

together and they decide to rip off a bunch of other people

 Page 226 of 248

and they come to town and they put their thing into

effect. They conduct their ripoff, and they are gone, and you

never see them again until maybe they show up two or three

years later in yet another scam.

Well, that's not this operation. These people have

been around for a lot longer as an organization than 1979,

but we just happen to start there, and they are still

around. They don't have as any necessary incident of their

operation

236

anything that you could conceivably call fraud. It's just

not built for that.

And the Government would also ask you to focus in on

a very small part of the finances of the operation. Now, they

want you to focus in on finances instead of the whole

organization, and they only really want you focusing in on

one part of the finances,, and that's fundraising, and then

they only want you to focus on one little part of fundraising

as a part of financing and so on. They want you to just look

at a very tiny, little part of the entire picture, the entire

environment, that Will Wertz lived in, the thing that

surrounded him, the thing that was his life during the

relevant months of the conspiracy as charged.

Well, I think you have a slightly different picture

and a different perspective from just seeing that as to what

was going on at the time.

Now, may I have the next chart, please.

The next chart, again yon have seen it, and you know
 Page 227 of 248

what it is; it shows a couple of things that are

kind of significant, though. It shows you when you look at

what was going on with the taking of loans in 1984, what got

thera into this mess. I don't think it takes a great deal of

imagination or sagacity to figure out that the press of the

presidential campaign that year overcame all caution. I mean

they just, they were in it, in for a penny, in for a pound,

237

and they had it in mind, and they were right in terms of

what it would do for the organization, that the campaign

would give it a boost, and they threw caution to the

winds, They weren't very businesslike. But they weren't

reckless, and they weren't criminal. They just got in over

their heads.

It wasn't until really by even the Government's

evidence, it wasn't until March when Mr. Hintz writes his

first memorandum that anybody really has a handle on what

had happened the year before and how deeply into it they

were. So what do they do? Do they, if you are in a

fraudulent scheme, a scam, a sting operation, well, you cut

and run. It is all over. We are in over our heads. We can't

possibly get out of this. We have gotten all we can get.

Let's get out of town before the cops come.

Is that what they do? No, that isn't what they do.

With their classical sense, I call it classical because I

think you have heard all of these people have every type of

cultural background and avocation. You have poets. You have

anthropologists. You have writers. You have artists. You

 Page 228 of 248

don't have any businessmen. There is no businessmen

in this operation. So this collection of other people without

being businessmen, they try to do something — they don't

ignore the problem that Hintz brings before them, and it

isn't very long before that doesn't seem to cure the problem.

238

And then out comes the very first thing that has an

effect at all, and that is never mind for the moment paying

back where we are in the hole now, let's start moving ahead

and how can we build for the future. And what is the first

thing you have got to do there? Well, you have got to cut

out loans.

And you heard that a loan ceiling of 4 0 percent

went into effect along about Hay or June, which is in the

second quarter of 1985. And then you heard that another loan

ceiling was imposed in September of 1985.

That is what they did. They did not ignore the

problem*

We then get to November of 1985, which I have to

believe is where the Government would really like to tell

you that, hey, if they didn't know up until now, if it was

all kind of not come together, you heard they didn't have a

very good accounting system, and they are working like

crazy to set up just some method of keeping track of the

loans, and they are trying to convert from a manual system

to computers, and all that sort of stuff is going on in the

tag end of 1984, and on through up until 1985, and you have

two different offices working on loan paybacks. You have

 Page 229 of 248

one office doing the campaign staff and you have

another office doing the other. But it all comes together

in Marchf when Mr. Hintz writes his memorandum focusing

only

239

though on the downside situation. That is to say, the outs*

Well, they would probably concede, though, that

from then on through the year there were attempts, and they

did try to do it, but by November, hey, come on, when Hintz

writes that November memorandum, which attaches to it the

success or concededly the total failure of the loan

repayment problem to accomplish anything to getting them out

of this mess. Well, the Government is saying to you, by the

entire way they tried this case, that from then on they

should have quit. They should have gone out of business.

Now, I ask you to take a particular look at the

fourth quarter of 1985, and that is the box that is just to

the left. I don't want to get up there with a pointer. I

don't think Judge Bryan will let me. But that is the box to

the next column over. And what do you see there? Well, you

see a kind of level income after having reached a peak the

prior quarter, but you also see a dramatic drop in loans

being taken.

Now, that chart was not in existence at. the time

that these events were taking place, but Will Wertz and all

of these people, they knew what the situation was. They knew

that, yes, loans had been cut back, and so, if you asked

them, would it look like that? They would have told you that,
 Page 230 of 248

"Sure, we knew that." And they also knew that, hey,

income was steady.

240

And lo and behold, the very next quarter what

happens? You get this tremendous upsurge. And then if you

look at the distance between the peak at A and the valley on

the orange line, you see a wide, wide gap there, the widest

yet in any financial history of this sort that this company

could have had. And you say. Gee, if you are lookinc at that

picture as of October, November, December, January, February,

March in 1986, wouldn't you be crazy to fold your tent and

walk away just because the gloom and doom die?

You can't hate, you can't hate Hintz. And we don't

hate him because that is all he is doing. He has got the most

thankless job in that entire operation. All he is doing is

trying to contend with one single, small problem. So it is no

wonder that his picture is gloomy. But Will Wertz gets more

than just his picture. He is looking at that picture, and he

is saying, "Hey, wait a minute. We can't just walk away from

this,"

Because, I tell you, they walk away from it, what

are they really doing? Well, they are letting all of the

lenders, lock, stock, and barrelr hold the bag. I mean,

that's what happens then.

And so instead, instead of walking away from it,

all the evidence is that they kept on going. Now, sure,

Curtis walked away from it, when you get up to June. But

these people, these people that are in the dock here,

 Page 231 of 248

they

241

didn't walk away from it. And they had good reason for

optimism despite the downside, the absolutely unmistakeable

downside caused by the negative publicity resulting from the

results of the Illinois primary, which in ordinary

circumstances you would think they would have right in the

world to celebrate, but it came right around and bit them;

because, and there is no question about that, because the

expert testified that the tremendous loss during that period

was solely out of contributions. The magazine sales,

periodic sales, are still booming.

And look at the next quarter. They picked themselves

up again. These people are resilient. These people are used

to being knocked down and then picking themselves up again

and not running away with their tails between their legs.

They are by nature optimistic. And, sure enough, they turn

it around again.

Until what happens at B? Well, in comes the Feds.

They don't like what is going on here. So they come in,

ransack the place, take all their records. Cause chaos.

And, boom, send them on a downturn.

And then, of course, the next event, the

involuntary bankruptcy, which you will see over at

C.

But they still don't quit. Because look again at

what happened thereafter. Now, that shows a spirit of non-

run from the problems that pervaded every single mind at

 Page 232 of 248

242

the very darkest hours when the Government said they

shouldn't have been taking any more loans. These people

were saying, "No, we can do it. We can do it. We-can do

it." They were the little train that could, if you will.

And if they were wrong, and I don't even know that you can

find that they were wrong because those intervening events

were out of their control., but even if they were wrong,

was there not a fair and decent and arguable basis for that

optimism? Was there pie in the sky? I guess if you look at

Hintz' stuff you would say yes, nobody in their right mind

could look at this and think there was anything to be

optimistic about.

But in fact the overall picture was a whole lot

better by far than the Government would lead you to believe,

and that's what they believe, and that's why, members of the

jury, there just was not any crime here.

I think I have — how much time do I have left,

Judge Bryan?

THE COURT: You have some more time.

MR. GETTINGS: I know, but I am trying to budget it.

THE COURT: Well, if you are going on a 45-minute

schedule you have about five minutes and if you want an

hour, you have got until eight minutes after 6:00.

MR. GETTINGS: Let me get right to Tate and Curtis.

I am not going to try and persuade you that really in order

 Page 233 of 248

243

to convict in this case you have got to believe them. It would

take too long. I don't know, I am an advocate. I am supposed

to say things like that. I don't think that my leaning on you

to that effect would be half as useful as you folks

persuading yourself when you really do what I think you are

going to do. I have every confidence that you are going to

do, you know, hold the Government to its burden and you are

going to be thoughtful about all the evidence you heard. You

are just not going to say well, it was all there somewhere.

They must be guilty and walk out. I don't have a fear in the

world as I said that that is what you are going to do.

So I am just going to make the statement and then I

am going to go into the critical, as I look at it, nature of

their testimony.

What I am trying to find in my notes — I suspect I

can remember — and that is you should keep firmly in mind

that the principal thrust of everything that Tate and Curtis

had to say was relating conversations whether with one of the

defendants or with someone else or which they overheard, that

in one fashion or another, were incriminating as to one or

more of these defendants and which with two notable

exceptions were one-on-one.

There is not and has not been, members of the

jury, a single person who has come forward and corroborated

24 4
 Page 234 of 248

single bit of testimony that Chris Curtis gave you as to any

conversation that he related to you that is part of this case and

that incriminates anyone of these defendants. There is not a

single bit of testimony that anyone has given you that the

Government has brought to you that corroborates Charlie Tate as to

any conversation that he overheard coming from or to or relating

to- any of these defendants.

Not only must you believe them in order to convict these

people but you must believe them uncorroborated. You must take

their testimony on faith. There is plenty of room for that in the

American system of criminal justice, It's done. You have solid

people up there where you can look right in the eye and you can

respond fairly to questions on cross examination and have no

particular axe to grind as to any of the people they are

testifying against; and when they come in. and they testify that

such and such happens, hey, that's it. You accept it, and juries

can act, juries can convict, juries can award damages in civil

cases, they can do all sorts of things on the uncorroborated

testimony of a single person, but that has got to be a pretty

sterling person.

You, in order to convict, are going to have to rely on

the testimony of two people who I suggest to you are less than

sterling. They are moreover openly vehemently hostile to every

defendant in this case and certainly you all saw it,

2^45

Chris Curtis in particular as to my client, Will Wertz. You saw

Curtis every chance he got, he reached out and tried to put Will
 Page 235 of 248

Wertz into something, when no one ever even asked him. He would

be relating to Mr. Clark conversation that Mr, Clark was asking

him about that related to his client, and was with his client,

and right in the middle of that he would pop in with, and ye.s,

Wertz was in on that, too.

Now, when you see that type of bias and hostility, you

have got to weigh very carefully, indeed I would think, whether

you are going to take that particular witness1 testimony and

convict anybody on it, because again that is what you have to do.

Their testimony that incriminates these people are conversations

that are uncorroborated and for the most part, that's the way it

was devised, except as to a couple of conversations that I will

get to in a minute because I want you to also focus on the

question that Mr. Clark asked you, which was essentially, can you

figure Chris Curtis out, what made him change, do you know where

he is coming from, and I hope I can give it all to you in a

minute, because when he resigned, quit from the organization in

May of 1986, he certainly didn't run to law enforcement with any

tales of all the evil deeds that he had been involved in.

As a matter of fact when he quit, he didn't go very

far. He continued taking money from them. And he continued

24 6

1 to permit his wife to work for them, and he applied to the

2 Federal Government, and he applied to the most among them

3 select and inquisitive investigative agencies in the Govern-

4 ment, the CIA, and he told them where he had worked and he
 Page 236 of 248

5 told them how proud he was of what he had been doing in

6 fundraising when he was partly responsible for increasing

7 the revenue from $12 million to $30 million annually. He

S wasn't hiding anything, because he hadn't done anything. And

9 he didn't give it a care.

10 He didn't even start thinking about it until

11 Mr. Klund comes knocking on the door. He knew what was

12 coming. He knew that there was indeed trouble up the road.

13 There had been that raid. Everyone out there knew it. He

14 was still living out there. And they come in. But he

15 hedges with them. He hedges with them. He doesn't know

16 which way to jump. He doesn't know where this thing is

17 going. And so he tells Mr. Klund some nice things about

18 these people and it kind of gives, oh, it wasn't all

that 1? bad. These people in balance, in sum, they acted in

good

20 faith.

21 Now, you know maybe that closes the book. Maybe

22 Mr. Klund goes away with his Grand Jury subpoena. Indeed,
23 for two or three months, that appeared to be what happened

24 until February 10th. What happens on February 10th? Well,

25
they put Curtis in a room with three or four people. They

247

interrogate him for several hours, a little more comes

out, a little more, a little more; he mentions Mr.

Levinson incidentally in that conversation, and he tells

the law enforcement people that you know, I used to call

 Page 237 of 248

him from time to time just to talk over our techniques.

That's the only mention of Levinson.

He is visited the next day by Charlie Bryant. Then

he is visited a couple more days by Charlie Bryant. Charlie

Bryant calls him on the 21st of May and on the 24th of May,

Charlie Bryant shows up with a whole bunch of memoranda,

statements that he had previously given, all of these inter-

views from the 10th to the.14th, this big flurry of activity

over these two weeks is all on him. Here, read them. Read

them over carefully. Make any corrections. He makes

corrections. He doesn't expand on the Levinson story in this

particular occasion. He signs it. Out he goes, and at this

point in time he says, uh huh, it isn't going to go away.

And now I got a jump, because he is looking ahead to

the day that this whole thing is going to be in a courthouse

somewhere. When you are in a courthouse, with those kind of

people up there, and you got those kind of people down

there, and believe me, it's more preferable to be one of

those than one of those. So oomes June, well, he is one of

them. And he is writing up notes and he is giving them to

Charlie and telling them things they never heard. And this

248

is dynamite. And he is safe, and he is clean; and he stays

the witness over there, and those people who he describes,

his former colleagues, the people that he had worked with

for 14 years, he writes out in a memorandum this will get

those sons of bitches. And that's what happened to Charlie

Tate and you are going to believe that? You are going to
 Page 238 of 248

convict somebody on the testimony of someone like that?

I hardly think so. I tell you, I will give you the

one conversation, all of the evidence that there is in this

case as to the one conversation that Charlie Curtis, Chris

Curtis, and -- Chris Tate, Charlie Curtis — that Curtis could

have been corroborated on, the one single conversation that

came out of his mouth and his direct testimony where somebody

else was; and that of course was the story about the chat

with Mr. Yepez after having the meeting in the morning with

Mr* Wertz where Mr. Wertz says those loans are going to be

paid back. Curtis then goes to Yepez and says, are those

loans going to be paid back? And Yepez says no, those loans

aren't going to be paid back. And then he goes to Wertz, and

he repeats the conversation that he had with Yepez with Mr.

Wertz, and Wertz then tells him, well, that's a common

practice in the campaign, and so on and so forth.

That, of course, is in there for Curtis' purpose to

tell you, I alerted management of my doubts and my concerns

as early on as October or November 1984. I had this

2'4 9

conversation with Wertz in which Wertz lied to me. The

problem with that testimony is, members of the jury, it's a

fabrication. It almost got to the witness stand, but it never

got there insofar as being corroborated. The one conversation

that Chris Curtis unmistakably placed in October or November

of 1984, later on down the year, you never heard as

corroboration out of the mouth of Mr. Yepez when he

testified. He testified about a whole lot of things, but they

 Page 239 of 248

never asked him did he have a conversation with Mr. Curtis in

October or November of 1984, and the reason they didn't ask

him was because they knew he didn't.

And the reason they knew he didn't was the same

reason that everyone else knows that he didn't. And it was

Yepez was long gone by October or November of 19 84. Yepez

cut out in August. The Government knew that that was what

lay in store for them, creating that conflict for you all

to decide when they decided uh huh, we are just not going

to ask that question. But they still want you to believe

Chris Curtis.

Let me talk for a minute about Charlie Tate. Charlie

Tate has a conversation, a single conversation, that in the

ordinary course of things could be corroborated. He relates

to you and it's an overt act, members of the jury, in the

indictment. The Government thinks it's pretty important. They

don't have to allege every conversation, every event or

250

anything like that- In an indictment, they only allege the

important ones, and they think this one is an important one.

It's Overt Act 19, in July or August of 1984 Will Wertz

stands up again at one of these morning briefings and he flat

out tells everyone there is no such thing as a loan. And it

is the policy of the NCLC not to repay loans.

Now, he did this.in front of 40 people, according

to Curtis. Well, you didn"t have a single one come in and

say, yes, I heard that, too- Not a single one.

And there was another half to that story which the

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Government did not give you. The Government only

gave you the testimony from Mr. Tate, right up to the moment

that he was leaving that morning meeting room. They said

that's what you heard, and then Mr. Markham's last question

was, and was there any reaction from anyone else? And the

answer is yes. Nothing further on that issue. Let's go on

somewhere else.

Now, what the Government wanted you to believe was

that was that whole story. Well, on that one, we of course

were a little readier for him, because we knew there was more

to that story; and we asked him to finish that story under

oath, Mr. Curtis, and so he does. Because he is down on

record under — somewhere else and he can't get out of telling

you about the conversation with Spida, with Mr. Spida, the

colleague who he overheard as he tells it to you in times by

when he is testifying about it, it's a conversation that

2'51

Mr. Spida could hardly forget. Spida and he have known each other

for years, and they couldn't lob that one off as forgetfulness,

but clever Mr. Tate said well, I will switch it over, and that

will be in over here and how could he ever remember what he ever

said. Maybe he will get by that one.

But he testifies to that particular conversation that

he claims to have had with Spida; and then he goes on and tells

about going down and visiting Sandy Roberts. And he tell you that

he told Sandy Roberts all about what had happened that morning.

He thought Roberts was there, and there was conversation back and

forth between he and Roberts precisely on the subject of there is

 Page 241 of 248

no such thing as a loan. It is the policy of the NCLC

not to pay back loans. That's what he tells you reluctantly that

he and Roberts discussed, and of course what happens after that?

Well, Mr. Spida comes in and he contradicts him.

He said it just didn't happen. Then Mr. Roberts comes

in, same thing. Yes, I had a conversation with him ■ all right,

about loans. And remember, Roberts is in legal. He doesn't have

conversations with these people with the loan solicitors that

often. He would remember that. He'd say, yes, I had a

conversation, a couple of months before. It was about something

entirely different. All Curtis was doing was wondering is this

loan forgiveness okay. I hope you members of the jury don't have

any doubt, any illusions,

252

any concerns about a loan forgiveness policy or program or

asking somebody, hey, would you please forgive us, if there

is anything wrong with that. Well, that's what Roberts'

recollection of what Curtis came to him was. He was pretty

straightforward about that.

Now, what do you have? Well, you have in Tate, a

guy who spews forth venom at every chance he gets at

everyone of these people, who's been shown to have a motive

to lie and now you have him actually lying under oath.

That* s Tate.

You going to believe anything else he says? I

seriously doubt it* The same thing with Curtis. Here you have

got a guy who has got a motive to lie, all the motive in the
 Page 242 of 248

world. With him it seems to me it's almost something

he seeks out, coming in and thumping all over these people.

He has got the motive to lie. He has got the motive to save

himself, which he did. Join up forces with the prosecution. I

will ride their horse and maybe they are riding his horse. I

haven't figured that one out. I don't know whether this is

the Government tagging along behind Charlie Curtis or whether

Charlie Curtis saw which way the horse was going and he

jumped aboard. I really don't know what the answer is.

All I will tell you is this, members of the jury.

This case is inextricably tied to Charlie Curtis. That is

the horse that the Government has chosen to ride. What else

233

or whatever else there is to say about iv.

The reason I can say this to you, and I think you

are beginning to understand, is because most of what ties

the conspiracy case together and what makes it something

more than the straightforward case of just the lenders is

the venom that comes from Tate and Curtis. If you can, if

you could purge all of that stuff from your minds that they

spewed forth here and then compartmentalize and fairly

consider that case, I would say well, I guess you got a try

except for one other thing.

This is a mess and you should not have to do that,

and we, these defendants, who are entitled to a fair trial,

shouldn't have to rely on your ability, your almost super-

human ability to erase from your brains the poisonous

testimony of those two people when they began it, when they
 Page 243 of 248

put them on the stand, and when they put both of

them on the stand knowing they were liars. The Government

knew the problem —

THE COURT: Mr. Gettings, we don't need to be

shouted at.

MR. GETTINGS: I'm sorry, Your Honor.

THE COURT: Either back off from that microphone or

tone it down. I am not going to have the jury shouted at

like that.

MR. GETTINGS: I apologize.

254

THE COURT: You have been doing it for 20 minutes.

MR. GETTINGS: I wish you had quieted me down before,

Your Honor.

THE COURT: I believe I should have.

MR. GETTINGS: I apologize to you, members of the

jury. I am just a little caught up in this, I suppose.

The point, though, I think that gets made in that

they called him, they knew as to both Curtis and Tate what

the other testimony was, what the true facts were. They

knowingly took a chance and brought them in front of you and

I think by that act they have shown disregard for you,

disregard for these defendants; and they ought to suffer the

ultimate consequence of you, if you reject their testimony,

then rejecting the entirety of the remainder of the

Government's case because you can't get their testimony out

of your minds. It's impossible. And if you do that, and if

you will hold the Government to the burden of proof that the
 Page 244 of 248

law requires you to hold to, and that Judge Bryan is

going to tell you you have to hold them to, then I have every

■ confidence in the world that you meinbers of the jury will

be able to do the right thing by Will Wertz and the right

thing by all the rest of these defendants.

And that is to send them home and send them back to

where they were on that revenue and loan activity chart at

the end of the third quarter of 1988, just a couple of months

25 5

back, and despite all of these glitches along the way, give them

a chance to keep going,

And the real reason you ought to do that, members of

the jury, is because this is probably the only fraud case -that

you will ever see or that anyone else in this courtroom has ever

seen that is absent one thing. In all fraud cases, you have

profit motive. You have people you are trying in one fashion or

another to line their pockets. That's the quintessence of fraud.

You don't have that here. With people who are trying to

line their pockets, you have greed. I cannot remember a fraud case

ever being tried where the word greed wasn't argued all over the

Court. You haven't heard that from the Government because there is

no greed here, will Wertz is not a greedy person. Neither are any

of these other defendants. There is no greed. And members of the

jury, if you go back to the bottom of it and if you don't find

greed, it is impossible to find fraud, and instead of muddling

around and wallowing in that thicket, look at the defendants' side

of this thing. Give their case a fair shake, too.

And send them home. I thank you very much for

 Page 245 of 248

listening. I thank you five times as much because it's

obvious I was at a higher decible level and I should have --I am

not really used to the microphone. I would just as soon

256

do it without the mike* I hope I didn't offend you. I

certainly wasn't shouting at you. I was, I guess I was

shouting, though. I was raising my voice for emphasis.

Again, I was not doing it at you. I was trying to

persuade you, too. It1s their turn now to persuade you.

Thank you very much.

THE COURT: Mr. Reilly?

MR. REILLY: Don't I get one, Your Honor?

THE COURT; Mr. Reilly, you want to approach the

Bench? And the Government.

(Whereupon, a conference was held at the Bench

with Court and counsel, out of hearing of the jury, and

reported as follows:)

THE COURT: Mr. Reilly, I am afraid they are not

going to pay any attention to what you say at this hour.

I am willing to let your argument go over until in the

morning. I don't know how much more this jury can absorb.

It seems to me more unfair to let you argue and let the

Government have all evening to rebut *-■*

MR. REILLY: If that is the choice I definitely

would like to close tomorrow.

 Page 246 of 248

THE COURT: How long is your argument? These

arguments are terribly repetitive.

MR. REILLY: About 4 0 minutes.

THE COURT: I don't want you to use this evening

257

recess to beef that up. I had hoped these arguments would

not be long. The only one who lived up to his promises was

Mr. Anderson.

MR. ANDERSON: Thank you, Your Honor.

MR. GETTINGS: I apologize, Your Honor.

THE COURT: You were getting worse and worse. I had

to stop you.

MR. GETTINGS: I wish you had stopped me earlier.

THE COURT: I wish I had, too.

MR. GETTINGS: I think- it is the mike. I will try

not to use the mike.

THE COURT; I think we will go over until

tomorrow.

(Thereupon, the conference at the Bench

was concluded, and the following proceedings were

held:)

THE COURT: Members of the jury, I don't know about

you, but I have heard about all the argument I can take for

one day. We will adjourn until tomorrow morning.

You can only absorb but so much. I don't know about

you but I have reached my absorption maximum. I think in

fairness to both the remaining defendants and the

Government, they ought to get you when you are a little

 Page 247 of 248

fresher than you are now.

We will adjourn until tomorrow morning at 10

o'clock. (Whereupon, at 6:10 p.m., the Court was
adjourned

to reconvene at 10 o'clock a.m., the following morning.)

258

' CE^TirXCATE OF-OFFICIAL REPORTER

COMMONWEALTH OF VIRGINIA )
) BS,
CITY OF ALEXANDRIA }

I, EDWARD DONOVAN McCOY, Registered

Professional Reporter and Official Court Reporter for

the United States District Court for the Eastern.

District of Virginia, appointed pursuant to the

provisions of Title 28, United States Code, Section 753r

do hereby certify that I was: authorized to report, and

did so report in Stenotype, the foregoing proceedings;

THEREAFTER, -my Stenotype notes were

reduced to typewriting under my supervision; and I

further certify that the pages herein numbered

contain a true and correct transcription of my

Stenotype notes taken herein.

DONE and signed, this - - - ^ iL^-^—-____ day of

HtAs ' 19if21__' in the City of Alexandria,

Commonwealth of Virginia.

EDWARD DONOVAN
WcCgSY//KPR Official
Court Reporter
 Page 248 of 248

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