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20 - ORGANIZATIONS/GOVERNMENT/USA/Department of Justice.md
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@ -6,37 +6,46 @@ aliases:
- Justice Department
- U.S. Department of Justice
created: 2026-05-17
updated: 2026-05-17
updated: 2026-09-22
tags:
- Organization
- USGovernment
- LawEnforcement
- PROMIS
- INSLAW
- BCCI
- BNL
- TheFinders
- CIA
- DarkAllianceInvestigation
category: "U.S. Government"
summary: "U.S. federal law enforcement and legal agency whose prosecution of the INSLAW-PROMIS case, 1982 drug trafficking exemption for CIA assets, and 1993 internal inquiry into CIA involvement with The Finders make it a central subject of this vault."
summary: "The federal department of prosecutors, the FBI, the DEA and the U.S. Attorneys, in the vault the defendant in the INSLAW case, the obstructor found by the BCCI and BNL inquiries, the CIA's partner in the 1954 and 1982 understandings on prosecution, and the investigator of The Finders."
start: 1870-07-01
location: "Washington, D.C."
---
The Department of Justice launched an internal inquiry in 1993 into CIA involvement with [[The Finders]] and a potential FBI coverup of the group's operations. The inquiry was initiated after the Department received a copy of the U.S. Customs memo compiled by Special Agent [[Ramon J. Martinez]] on the raids of The Finders properties in February 1987.[^1]
The Department of Justice, established in 1870 under the Attorney General, contains the [[Federal Bureau of Investigation|FBI]], the [[DEA]], the [[Executive Office for United States Attorneys]] and the ninety-odd [[U.S. Attorney's office|United States Attorneys]], the Criminal, Civil and Civil Rights Divisions, the [[Office of Special Investigations]], the Office of Legal Counsel, the [[Office of Professional Responsibility]] and, until 1982, the [[LEAA]], whose grants funded the case-tracking software that became [[PROMIS]].[^1]
The inquiry focused on multiple intelligence connections: [[Marion Pettie]]'s late wife [[Isabelle Pettie]] had been a CIA employee, one of his sons had worked for [[Air America]], and [[Future Enterprises]] had provided software training for CIA employees. The investigation's findings were not publicly released in full.[^1]
### INSLAW and PROMIS
### Dark Alliance Investigation
In March 1982 the Executive Office for United States Attorneys contracted with [[INSLAW]], the company of [[Bill Hamilton]] and [[Nancy Hamilton]], to install PROMIS in the largest U.S. Attorneys' offices; within a month the department's project manager [[C. Madison Brewer]] and contracting officer [[Peter Videnieks]] were disputing INSLAW's proprietary claims, payments were withheld, and in 1985 the company entered Chapter 11. Deputy Attorney General [[Arnold Burns]] told the Office of Professional Responsibility in 1986 that INSLAW's claim was "legitimate" and that the government "would probably lose the case in court," yet the litigation continued. On September 28, 1987, Bankruptcy Judge [[George Francis Bason, Jr.|George Bason]] found that the department had "taken, converted, stole, INSLAW's enhanced PROMIS by trickery, fraud, and deceit"; the district court affirmed in 1988 and the D.C. Circuit reversed on jurisdiction in 1991. Bason was not reappointed, the transcript of his ruling having reached the selection panel's chair, Judge [[Norma H. Johnson]], from the U.S. Attorney's civil chief [[Royce Lamberth]]. [[Elliot Richardson]], retained by INSLAW, called the affair "a high-tech Watergate." The [[House Committee on the Judiciary]] under [[Jack Brooks]] opened its investigation in 1989 and reported in September 1992 "strong evidence" that the department "acted willfully and fraudulently"; INSLAW alleged that [[Earl Brian]], a friend of Attorney General [[Edwin Meese]], had been given the software to sell to foreign intelligence services, and a document on department letterhead dated May 14, 1985, and signed by [[William Bradford Reynolds]] was later produced as a plan to distribute a modified PROMIS in the [[Middle East]]. [[Ronald LeGrand]] of the [[Senate Judiciary Committee]] relayed a career department source's judgment that INSLAW "is a lot dirtier for the Department of Justice, in its breadth and depth, than Watergate." Attorney General [[William Barr]] appointed [[Nicholas J. Bua]] special counsel in 1991; his report of March 1993 found no credible evidence of wrongdoing, and Attorney General [[Janet Reno]]'s review of September 1994 concurred, after Associate Attorney General [[Webster Hubbell]] had announced a nationwide investigation of [[Danny Casolaro]]'s death. The Senate referred INSLAW's claims to the [[United States Court of Federal Claims]], where Judge [[Christine Odell Cook Miller]] ruled in July 1997 that every version of PROMIS was in the public domain. [[Rafael Eitan]] of [[LAKAM]] is said to have acquired a copy through back-channel contacts with the department in the early 1980s, and the department's own successor system, the Integrated Case Management System, employed one of PROMIS's original designers, [[Dennis W. Wright]].[^2]
In early 1982, CIA director [[William J. Casey]] and Attorney General [[William French Smith]] signed a formal Memorandum of Understanding that exempted the [[Central Intelligence Agency]] from reporting drug crimes committed by its non-employees, including agents, assets, and non-staff employees. Drug offenses were specifically removed from the list of crimes the CIA was required to report. The agreement remained in effect from 1982 to 1995. CIA Inspector General [[Fred Hitz]] testified that "the period of 1982 to 1995 was one in which there was no official requirement to report on allegations of drug trafficking with respect to non-employees of the agency."[^2]
### The CIA and Prosecution
### Protection of Danilo Blandón
In 1954 the [[Central Intelligence Agency|CIA]] "pointed out to the Department of Justice that, in many cases involving CIA, prosecution would require public disclosure of sensitive Agency operations and procedures"; under the understanding that resulted, described in the [[Rockefeller Commission 1975|Rockefeller Commission]] report, the agency's general counsel [[Lawrence Houston]] recorded that if prosecution "would be precluded by the need to reveal sensitive information, then the Agency should so indicate in its files and not refer the case to the Department of Justice." In early 1982 Director [[William J. Casey]] and Attorney General [[William French Smith]] signed a memorandum of understanding under which crimes by people "acting for" an intelligence agency no longer had to be reported, and drug offenses were specifically removed from the list; it remained in force until 1995, and the CIA inspector general [[Fred Hitz]] testified that in those years "there was no official requirement to report on allegations of drug trafficking with respect to non-employees of the agency." In that period the department reduced [[Danilo Blandon|Danilo Blandón]]'s sentence from life to about twenty-eight months, dropped the charges against his wife and released him as a "full-time paid informant" on the motions of Assistant U.S. Attorney [[LJ Oneale]], who then prosecuted [[Ricky Ross]] in [[San Diego]] and moved to bar any mention of the CIA at trial: "This matter, if true, would be classified." A former assistant U.S. attorney, [[Eric Swenson]], said [[Norwin Meneses]]'s work with the [[Contras]] was known to the department because he had reported it himself. After 2002 the Office of Legal Counsel gave the CIA its authorizations for "enhanced interrogation techniques." Department lawyer Walter May told a court in the 1970s that [[Hal Hendrix]] of ITT had informed the CIA of his intent to withhold his agency contacts from a Senate committee; the department investigated [[Harold Geneen]], Edward Gerrity and [[Robert Berrellez]] for perjury in 1977 and examined [[Edward Korry]]'s charges of false testimony about [[Chile]].[^3]
The Justice Department accorded [[Danilo Blandon|Danilo Blandón]] extraordinary treatment, reducing his sentence from life to approximately twenty-eight months, dropping charges against his wife [[Chepita Blandon|Chepita]], and releasing him as a full-time paid informant. Assistant U.S. Attorney [[LJ Oneale]] filed motions to have Blandón's sentence secretly reduced twice.[^3]
### BCCI and BNL
O'Neale prosecuted [[Ricky Ross]] in [[San Diego]], filing a motion to prevent any mention of the CIA at trial, writing: "This matter, if true, would be classified." O'Neale admitted he had never checked with the CIA about Blandón's connections but insisted there was "absolutely no connection" between Blandón and the agency.[^4]
The [[BCCI Kerry-Brown Senate Report|Kerry-Brown report]] on the [[Bank of Credit and Commerce International|BCCI]] concluded that the department had obstructed the investigation. [[Charles Saphos]], chief of the Criminal Division's narcotics section, wrote to Florida's comptroller [[Gerald Lewis]] asking that the bank be allowed to stay open; Manhattan District Attorney [[Robert Morgenthau]] accused federal authorities of hindering his inquiry; Customs Commissioner [[William von Raab]] testified that the department had denied knowledge of the Ali Mirza tapes; the criminal division under [[Robert Mueller]] indicted [[Swaleh Naqvi]], [[Ghaith R. Pharaon]] and [[David L. Paul]] over CenTrust and the Independence Bank in 1991 and 1992. In the [[BNL Scandal]], the Atlanta bank's officers believed in March 1990 that the department had taken the case away from the local U.S. Attorney; Attorney General [[Richard Thornburgh]]'s legislative chief [[Lee Rawls]] advised him on "our best attempt to thwart any further congressional inquiry by the [[House Banking Committee]]" of [[Henry B. Gonzalez]], and Judge Marvin Shoob publicly criticized the department's handling of the case.[^4]
### Letelier, The Finders and After
Assistant U.S. Attorney [[Eugene Propper]] prosecuted the [[Orlando Letelier]] murder, and the department sent [[Michael Townley]]'s confessions to Chile with its request for the extradition of [[Manuel Contreras]] and [[Pedro Espinoza]]. [[Walter Sheridan]] had worked under Robert Kennedy at the department before his NBC assignment on [[Jim Garrison]]; Houston recorded of the agency's handling of the Clay Shaw trial that "the Department of Justice has seen and agrees." [[Michael Abbell]], director of the Criminal Division's Office of International Affairs from 1979 to 1982, went on to represent the [[Cali Drug Cartel]]. In 1993 the department opened an inquiry into CIA involvement with [[The Finders]] after receiving the Customs memorandum of Special Agent [[Ramon J. Martinez]] on the 1987 raids; [[Marion Pettie]]'s late wife [[Isabelle Pettie]] had worked for the agency, a son for [[Air America]], and [[Future Enterprises]] had trained agency employees; the findings were never released in full. The Criminal Division's [[Mark M. Richard]] told the Bua inquiry that the Office of Special Investigations worked with intelligence agencies only to locate war criminals. In the 2020s the National Security Division returned no documents on [[Rinaldo Nazzaro]]'s contracting, a State Department source called him a department "matter," and the department disclosed a payment to an informant in the [[2023 Baltimore Power Grid Conspiracy]] six weeks after [[Brandon Russell]]'s conviction.[^5]
### Footnotes
[^1]: Dovey, S. (2023). *Eye of the Chickenhawk*. United States: Thehotstar.
[^2]: Webb, Gary. *Dark Alliance: The CIA, the Contras, and the Crack Cocaine Explosion.* Seven Stories Press, 1998. Epilogue: "The damage that has been done"
[^3]: Webb, Gary. *Dark Alliance: The CIA, the Contras, and the Crack Cocaine Explosion.* Seven Stories Press, 1998. Chapter 24: "They're gonna forget I was a drug dealer"
[^4]: Webb, Gary. *Dark Alliance: The CIA, the Contras, and the Crack Cocaine Explosion.* Seven Stories Press, 1998. Chapter 26: "That matter, if true, would be classified"
[^1]: Justice System Improvement Act of 1979, Public Law 96-157; the organizational entries in the *United States Government Manual.*
[^2]: As cited on the linked pages: U.S. House of Representatives, Committee on the Judiciary, *The INSLAW Affair,* H. Rept. 102-857, September 10, 1992; U.S. Department of Justice, *Report of Special Counsel Nicholas J. Bua,* March 1993, and the department's review of September 27, 1994; Richardson, Elliot, "A High-Tech Watergate," *New York Times,* October 21, 1991; Seymour, Cheri, *The Last Circle,* TrineDay, 2010; Thomas, Gordon, *Gideon's Spies,* St. Martin's, 1999; Federal Judicial Center, *1990 Annual Report;* Webb, Gary, *Dark Alliance,* Seven Stories, 1998, ch. 6; and the pages linked.
[^3]: As cited on the linked pages: Commission on CIA Activities Within the United States, *Report to the President,* June 1975; Webb, *Dark Alliance,* chs. 1, 24, 26 and epilogue; Associated Press, "CIA Knew of False Testimony," and "2 ITT Men Charged with Senate Lies," March 21, 1978, CIA Reading Room; Trento, Joseph, "JFK Began Chile Bribes, Envoy Says," *Sunday News Journal,* November 28, 1976.
[^4]: As cited on the linked pages: Beaty, Jonathan, and S. C. Gwynne, *The Outlaw Bank,* Random House, 1993; Senate Committee on Foreign Relations, *The BCCI Affair,* 1992; Gonzalez, Henry B., "The Banca Nazionale del Lavoro Scandal" and "Continuing Saga of Attempts to Thwart BNL Investigation," *Congressional Record,* 1992-93; Friedman, Alan, *Spider's Web,* Bantam, 1993, pp. 193-194.
[^5]: As cited on the linked pages: Kornbluh, Peter, ed., "The Pinochet Dictatorship Declassified: Confessions of a DINA Hit Man," National Security Archive; Holland, Max, "The Lie That Linked CIA to the Kennedy Assassination," *Studies in Intelligence,* 2001; Houston, Lawrence R., memorandum, "Clay L. Shaw's Trial and the Central Intelligence Agency"; Dovey, S., *Eye of the Chickenhawk,* 2023; Wilson, Jason, *VICE News,* 2021, and MuckRock FOIA logs; *The Daily Record,* May 2, 2025.