Dirtier than Watergate

The Reagan-era espionage system that has managed to stay under the radar.

It was described as dirtier than Watergate, and involved US government dealings with Iraq, Libya, Korea and even the late British publishing tycoon Robert Maxwell. The story is deep, dark and complex; a web of strange dealings and dubious characters, it implicates wealthy arms dealers, Israeli intelligence services, the Soviet KGB, MI5 and the CIA. But unlike Watergate, this scandal, from a particularly dark chapter in American history, has appeared in no Hollywood film and is yet to reach a satisfying conclusion.

It began in the late 1970s, when the Washington-based software developer Inslaw pioneered people-tracking technology, designed to be used by prosecutors to monitor case records. Known as the Prosecutor's Management Information System (PROMIS), the software was developed under grants from the US department of justice. The US government, as it helped fund the creation of PROMIS, had been licensed to use the software on condition that it did not modify, distribute or create derivative versions of it. The government, however, did not stick to this agreement.

Under the Ronald Reagan administration's covert intelligence initiative known as "'Follow the Money", the US National Security Agency (NSA) misappropriated PROMIS for sale to banks in 1982. The version of PROMIS sold by the NSA had been "espionage-enabled" through a back door in the programme, allowing the agency to covertly conduct real-time electronic surveillance of the flow of money to suspected terrorists and other perceived threats to US national interests.

A letter from the US department of justice in 1985, later obtained by Inslaw, documented more plans for the covert sale and distribution of the espionage-enabled version of PROMIS, this time to governments in the Middle East (which would surreptitiously allow the US to spy on foreign intelligence agencies). The letter outlined how sales of the software were to be facilitated by the late Saudi billionaire Khalid bin Mahfouz and the arms dealers Adnan Khashoggi and Manucher Ghorbanifar. PROMIS should be delivered without "paperwork, customs, or delay", it stated, and all of the transactions paid for through a Swiss bank account.

In the years that followed, friends of then attorney general Edwin Meese, including a Reagan associate, Dr Earl Brian of the government consultancy firm Hadron, Inc, were reportedly allowed to sell and distribute pirated versions of PROMIS domestically and overseas. As a House judiciary committee report found in 1992, these individuals were apparently permitted to do so "for their personal financial gain and in support of the intelligence and foreign policy objectives of the United States".

Brian, who was later jailed for four years on an unrelated fraud charge in 1998, has since denied any association with the Inslaw case. According to the former arms broker and CIA "contract operative" Richard Babayan, however, he was instrumental in selling PROMIS to the governments of Iraq, Libya and Korea. When Brian was unable to market PROMIS further, it is claimed that, with the help of Rafi Eitan, a high-ranking Israeli intelligence officer, the British publisher Robert Maxwell was recruited to assist.

In a sworn affidavit, the investigative author Gordon Thomas recounts how Eitan told him Maxwell alone sold over $500m worth of espionage-enabled versions of PROMIS – including licences to the UK, Australia, South Korea, Canada and the Soviet KGB. The British counter-intelligence agency MI5, according to Eitan (who himself was an adviser to the UK secret service MI6), used PROMIS to track members of the Irish Republican Army (IRA), as well as Irish republican political leaders including Gerry Adams.

Inslaw alleges the US government, by selling PROMIS to other governments around the world, engaged in what equates to "multibillion-dollar theft". This claim was supported by two separate courts in 1988, which ruled that it "took, converted, stole" PROMIS from Inslaw "through trickery, fraud and deceit". Three years later, however, a court of appeal overturned both rulings on a "jurisdictional technicality" after pressure from the federal justice department.

Now more than two decades since he pioneered PROMIS, the Inslaw president Bill Hamilton today believes the story illustrates an enduring, fundamental problem at the heart of the US justice system. "[It] chronicles the continued inability of the US government to enforce federal criminal laws in cases involving national security issues, or even to render ordinary civil justice," he says. "National security appears to suspend the checks and balances built into the system of government in the United States, to the detriment of the citizens."

Some, including the US government, have tried to dismiss the Inslaw saga as conspiracy. But a message relayed to Bill Hamilton and his wife from the former chief investigator of the Senate judiciary committee, Ronald LeGrand, seems to confirm that the strange PROMIS affair – which remains unresolved – is much more than just a case of chronic paranoia.

"What Mr and Mrs Hamilton think happened, did happen," LeGrand wrote, conveying information he had received from a trusted government source. "The Inslaw case is a lot dirtier for the Department of Justice than Watergate was, in both breadth and depth. The Department of Justice has been compromised in the Inslaw case at every level. "

Ryan Gallagher is a freelance journalist based in London, currently working for the Frontline Club. His website is here.

ELLIE FOREMAN-PECK FOR NEW STATESMAN
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Notes from a crime scene: what Seymour Hersh knows

Xan Rice meets the tireless Seymour Hersh to talk My Lai, pricey coffee and Bin Laden.

It’s late on a lazy Wednesday afternoon when Seymour Hersh comes bounding down the stairs. “Let’s find somewhere to sit,” the American investigative journalist says, striding over to the café area of the hotel in Bloomsbury where we meet.

Not quiet enough, Hersh decides, and he marches into an adjoining branch of Steak & Lobster, past a startled waiter who tries to explain that the restaurant isn’t open yet. “He’ll have a coffee,” Hersh tells the man laying the tables, gesturing in my direction. When the drink arrives, he remarks that, at £4.39, it’s the most expensive coffee he has bought in some time.

“I’m older and crankier than [Bernie] Sanders,” the 79-year-old says with a smile, leaning back in his seat, his tie loose and his top button undone. Hersh’s many notable stories include the My Lai Massacre and cover-up in Vietnam, which he exposed in 1969, and the Abu Ghraib prison scandal during the Iraq War. He’s in good health, relishing his speaking tour of London to promote his new book, The Killing of Osama Bin Laden, and hearing “how wonderful I am”.

“I come home from a trip like this,” he says, “and my wife can’t stand me. She says, ‘Get away, I don’t want to talk to you because you want everybody to bow and scrape.’”

Hersh never planned to be a journalist. After he was thrown out of law school for poor grades in 1959, he heard about an opening for a police reporter at a small news agency in Chicago. “I was reasonably coherent and could walk in a straight line, so they hired me,” he explains. Hersh learned on the job, covering his beat with a zeal that did not always impress his editors, one of whom liked to address him, without fondness, as “my good, dear, energetic Mr Hersh”.

“He saw me as a bleeding heart,” Hersh says, “who cared about people ‘of the Negro persuasion’ dying.”

Half a century later, he cannot say exactly what drove him to become an investigative reporter. “What defect did I have in my life that made me want to make everyone else look bad?” he wonders. “I almost viewed myself like a public defender: my job was to be there on the scene of a crime and to write about it in such a way that the police could not have the only call.”

Later, as his range widened, Hersh came to see his role as keeping in check “the nincompoops and criminals and fools running the world”.

He had been a journalist for ten years when he received a tip-off about an army officer being court-martialled for killing civilians in Vietnam. After investigating, he broke the story of the massacre at My Lai, in which a group of US soldiers murdered at least 347 people. The work earned him a Pulitzer Prize and soon afterwards he wrote his first piece for the prestigious New Yorker magazine. After sending in a draft, he was told that it would be read by the editor, William Shawn, and that he would receive a proof copy in the mail.

“Seven days later, the envelope comes and I’m terrified,” he recalls. “It was a writer’s magazine and any change they wanted, they asked you about. On the third page, I had some cliché or figure of speech. It was circled and in
the margin Mr Shawn had written: ‘Mr Hersh. Pls use words.’ I had a one-year course, a Master’s degree in journalism, in one sentence!”

Hersh has written regularly for the New Yorker over the years, though the relationship has recently come under strain. After researching the death of Osama Bin Laden, he became convinced that the Obama administration’s account of what happened before, during and after the raid in which Bin Laden was killed was a lie. He argued that the al-Qaeda leader had been captured by Pakistani intelligence in 2006 and held in Abbottabad until the US navy Seals operation five years later, which, Hersh claimed, was conducted with Pakistan’s assistance – rather than being a daring mission into hostile territory.

The New Yorker declined to run the story, so Hersh wrote it for the London Review of Books, which published it last year. The piece was read widely but attracted criticism from some American journalists who argued that it relied too heavily on a single, unnamed source and veered dangerously in the direction of conspiracy theories. Hersh is convinced that his version is correct and makes no apologies.

“I remember saying to my wife, ‘Don’t [these journalists] have mothers that tell them what to do better?’ . . . They insisted what they knew, what they wrote, had to be the story.”

Hersh’s mistrust of the official line is undiminished. His new book also questions whether it really was the Assad regime that carried out the chemical attacks in Ghouta, Syria, in 2013. Even the culprits of the recent Paris and Brussels massacres are not beyond doubt. “I don’t think Isis had a goddam thing to do with these kids,” he says. “The truth is, I don’t have any idea. I’m just telling you, heuristically, it’s an idea I would pursue if I was still a reporter.”

There is more to tell but Hersh has another interview. “Talk to me tomorrow,” he says, running back upstairs to collect his coat. “I’ll be around. I still have a lot of energy.” 

Xan Rice is Features Editor at the New Statesman.

This article first appeared in the 28 April 2016 issue of the New Statesman, The new fascism