This article appeared in the August issue of The Media Bypass magazine and is reposted here with the permission of James R. Norman. Subscriptions of Media Bypass can be obtained by calling 1-800-4-BYPASS

FOSTERGATE

Was White House Deputy Counsel Vince Foster Selling U.S. Secrets to Israel? The CIA Suspects He Was.

By James R. Norman
Two weeks before his death on July 20, 1993, White House Deputy Counsel Vincent W. Foster went into a deep funk. The official cause of death, given by former Independent Counsel Robert Fiske Jr., was suicide drivenby depression over, among other things, several newspaper editorials. But Vince Foster had a much bigger and darker reason to be seriously burned out. He had just learned he was under investigation for espionage.

Outrageous? To say the least. But a lengthy investigation has located over a dozen sources with connections to the intelligence community who confirm a shocking story of money laundering and espionage connected to the highest levels of the White House. Without grants of immunity, the sources risk going to prison for violation of the National Security Act. Virtually all have demanded anonymity.

According to a veteran Central Intelligence Agency operative close to the Foster investigation, Foster's first indication of trouble came when he inquired about his coded bank account at Banca Della Svizzera Italiana in Chiasso, Switzerland and found the account empty. Foster was shocked to learn from the bank that someone using his secret authorization code had withdrawn all $2.73 million he had stashed there and had moved it to, of all places, the U.S. Treasury.

Then, according to credit card records reviewed by a private investigator who has revealed them, Foster canceled the two-day round-trip TWA and Swiss Air plane tickets to Geneva he had purchased on his American Express card through the White House travel office on July 1.

Discretely he began asking what was afoot, says the CIA source, confirming that someone in the White House tipped him off. It was bad news. The CIA had Foster under serious investigation for leaking high-security secrets to the State of Israel.

For months, a small cadre of CIA computer hackers known as the Fifth Column, armed with a Cray supercomputer, had been monitoring Foster's Swiss account. They had located it by tracking money flows from various Israeli government accounts after finding Foster's name while secretly snooping through the electronic files of Israel's Mossad. Then by snooping through the bank files, they gathered all the information needed to withdraw the money.

Foster was just one of the first of scores of high level U.S. political figures to thus have their secret Swiss accounts looted of illicit funds, according to both this veteran CIA source and a separate source in another intelligence agency. Over the past two years, they say, more than $2 billion has been swept out of offshore bank accounts belonging to figures connected to the U.S. government with nary a peep from the victims or their banks. The claim that Foster and other U.S. figures have had offshore accounts has been confirmed by a separate high-ranking CIA source and another in the Department of Justice.

Various sources, some of them controversial, have contributed other pieces to this puzzle. Whatever their motivations, those sources have proven remarkably consistent. Their stories jibe well with known facts and offer a most plausible explanation for Foster's mysterious depression. It would also explain Washington's determined effort to dismiss the Foster affair as a tragic but simple suicide.

Vince Foster a spy? Actually, it is much worse than that, if the CIA's suspicions are confirmed by the ongoing foreign counterintelligence probe. He would have been an invaluable double agent with potential access to not only high-level political information, but also to sensitive code, encryption and data transmission secrets, the stuff by which modern war is won or lost. That is because for many years, according to nine separate current and former U.S. law enforcement or intelligence officials, Foster had been a behind-the-scenes manager of a key support company in one of the biggest, most secretive spy efforts on record, the silent surveillance of banking transactions both here and abroad.

This bank snooping effort began in earnest soon after Ronald Reagan became president in 1981. Its primary aim was to track the money behind international terrorist groups and soon came to be dubbed, "Follow the money ", according to the originator of the program Norman A. Bailey. Now a private Washington consultant on international banking, Bailey was an economist and Reagan advisor on the National Security Counsel. It was Bailey's idea to begin using powerful new computer and electronic eavesdropping technologies then emerging to let the intelligence community monitor the previously confidential flow of bank wire transfers. This was no small task; more than $1 trillion a day moves through New York alone.

Bailey, himself constrained by the National Security Act, claims he doesn't know exactly how the data was collected. But he confirms that within a few years The National Security Agency, the signals intelligence arm of the government, had begun vacuuming up mountains of data by listening in on bank wire traffic. It became a joint effort of several Western governments with the Israelis playing a leading role, since they were the main targets of terrorism.

Other intelligence experts say the flow of bits and bytes was captured by various means; from simply tapping phone lines to implanting customized chips in bank computers to store up and periodically burst-transmit data to a passing van, or low-flying "sig-int" or signals intelligence satellite. Another part of the problem was to get the world's banks to standardize their data so that it could be easily analyzed. And that brings up to PROMIS, a powerful tracking tracking software developed for the U.S. Government and then further enhanced by a little company called Inslaw Inc.

PROMIS stands for Prosecutor's Management Information Systems and was designed to manage legal cases. In 1982, just as Bailey's follow-the-money effort was gaining steam, the Reagan Justice Department eagerly snapped up Inslaw's newest version of PROMIS. But the government refused to pay the $6 million owed for it, claiming part of the contract was not fulfilled. Inslaw, forced into Chapter 11 reorganization, and nearly driven to quick liquidation by the government and its former partner AT&T, hotly denied that claim. Ultimately, a bankruptcy judge ruled the government stole the PROMIS software by "trickery, fraud and deceit".

Why PROMIS? Because it was adaptable. Besides tracking legal cases, it could be easily customized to track anything from computer chip design to complex monetary transactions. It was especially useful for tracking criminals or just plain political dissidents. Inslaw claims the software was eventually illegally sold to as many as 50 countries for use by their police, military or intelligence agencies, including such bloody regimes as Guatemala, South Africa and Iraq (before the 1990 invasion of Kuwait). Profits on these sales, Inslaw claims, went mainly into the private pockets of Republican political cronies in the 1980s, including Reagan confident Earl Brain, former part-owner of UPI and FNN.

Among the biggest profiteers on PROMIS, according to the 1992 book by former Israeli anti-terrorism staffer Ari Ben-Menaseche, was former British publisher Bob Maxwell. On behalf of the Israelis, Maxwell aggressively marketed a doctored version of PROMIS equipped with one or more "back doors" to allow an outsider to tap into the user's data base without leaving an audit trail. In fact, it may have been such rigged programs that allowed noted Israeli spy Jonathon Pollard, from his computer terminal at the Office of Naval Intelligence in Washington, to download vast amounts of top secret U.S. nuclear weapons and code data in the mid-1980s.

According to a heavily-redacted New Mexico FBI counterintelligence report, Maxwell was apparently allowed to sell two copies of PROMIS back to the U.S. weapons labs at Sandia and Los Alamos, for what Inslaw claims was a hugely inflated price of $37 million. That would have allowed Pollard, if he was using the rigged program, to obtain U.S. missile targeting data long before Israel had its own satellite capability, thus making it a real nuclear threat to the Soviet Union. Pollard was convicted of espionage and sentenced in 1986 to life imprisonment. U.S. officials have vehemently opposed efforts to gain his early release.

Maxwell, according to Ben-Menaseche and nine other sources, was also selling pirated versions of PROMIS to major world banks for use in their wire transfer rooms to track the blizzard of numbers, authorization codes and confirmations required on each wire transaction. Don't expect any banks to admit running PROMIS software. They probably now know it was pilfered. But they readily took it both because it was the best tracking software available at the time and because the U.S. government was tacitly leaning on them to go along with the surveillance effort or face regulatory reprisals or prosecution on money laundering charges. With the widespread adoption of PROMIS, the data became standardized and much easier to analyze by the NSA.

It took some effort to install and support PROMIS in the banking industry. That's where Vince Foster came in. Sources say that since at least the late 1970s, Foster had been a silent, behind-the-scenes overseer on behalf of the NSA for a small Little Rock, Ark., bank data processing company. Its name was Systematics Inc., launched in 1967 and funded and controlled for most of its life by Arkansas billionaire Jackson Stephens, a 1946 Naval Academy graduate along with Jimmy Carter. Foster was one of Stephens' trusted deal makers at the Rose Law Firm, where he was partner with Hillary Rodham Clinton, Webster Hubbell and William Kennedy (whose father was a Systematics director). Hubbell also played an overseer role at Systematics for the NSA for some years according to intelligence sources.

Systematics has had close ties to the NSA and CIA ever since its founding, sources say, as a money-shuffler for covert operations. It is no secret that there were billions of dollars moving around in "black" accounts - from buying and selling arms to the Contras, Iran, Iraq, Angola, and other countries to paying CIA operatives and laundering money from clandestine CIA drug dealing. Having taken over the computer rooms in scores of small U.S. banks as an "out-sourced" supplier of data processing, Systematics was in a unique position to manage that covert money flow. Sources say the money was moved at the end of every day disguised as a routine bank-to-bank balancing transaction, out of view of bank regulators and even the banks themselves. In short, it became cyber-money.

One man who uncovered the link between Systematics, Foster and covert money movements from arms and drugs was Bob Bickel, who was an undercover Customs investigator in the 1980s. "We found Systematics was often a conduit for the funds" in arms and drug transactions, says Bickel, now living in Texas: "They were the money changers." His story is corroborated by a former CIA employee who says it was well known within the agency in the late 1970s that Foster was involved with Systematics in covert money management.

Another source is Michael Ricoposciuto, former research director of the covert arms operation at California's tiny Cabazon Indian Reservation in the early 1980s. Ricoposciuto claims his crew of computer programmers helped customize PROMIS there for banking and other uses. He is now serving 30 years in a South Carolina federal prison ostensibly on drug charges. Though maybe not a credible source on his own, his story fits well with other sources.

Systematics' money-laundering role for the intelligence community might help explain why Jackson Stephens tried to take over Washington-based Financial General Bankshares in 1978 on behalf of Arab backers of the Bank of Credit and Commerce International. BCCI's links to global corruption and intelligence operations has been well documented, though many mysteries remain.

According to a lawsuit filed by the Securities and Exchange Commission, Stephens insisted on having then-tiny Systematics brought in to take over all of FGB's data processing. Representing Systematics in that 1978 SEC case: Hillary Rodham Clinton and Webster Hubbell. Stephens was blocked in that takeover. But FGB, later renamed First American, ultimately fell under the alleged domination of BCCI through Robert Altman and former Defense Secretary Clark Clifford. According to a technician who worked for First American in Atlanta, Systematics became a key computer contractor there anyway.

In the 1980s, Systematics' business boomed. When it first sold stock to the public in 1983, revenues were $64 million. That had risen to $230 million by the time Stephens arranged Systematics' sale to Alltel Corp., a telephone holding company which then moved its headquarters to Little Rock. Last year, Systematics sales hit $861 million - a third of Alltel's total. Stephens now owns more than 8 percent of Alltel and wields ignificant influence over the company.

When Bill Clinton was elected president in 1992, bringing Foster, Hubbell and Kennedy to the White House staff, Systematics' foreign bank business flourished. It began to announce a flood of data processing deals with major banks in Moscow, Macao, Singapore, Malaysia, Pakistan, Trinidad and elsewhere. According to veteran bank software vendors, and computer intelligence specialist Wayne Madsen, co-author of a book about the NSA called "The Puzzle Palace", it is inconceivable any U.S. company could land such lucrative work without the intimate participation of the NSA. Domestic business took off as well, with giants like Citibank and Nations Bank signing big data processing deals.

Working alongside Systematics in this spooky world of bank computer spying appears to be a cluster of other curious, loosely-affiliated companies. For instance, there is Boston Systematics, headed by former CIA officer Harry Wechsler, who controls two Israeli companies that also use the name Systematics. Wechsler denies any connection to the Arkansas company (now named Alltel Information Services) and claims to know nothing of PROMIS. Odd, then, that Inslaw claims it got two inquiries in 1987 from Wechter's Israeli company seeking marketing data on PROMIS.

Many of the intelligence sources who provided information for this story insist that Boston Systematics and the Arkansas company are, in fact, related in some way. And based on his own source in the Justice Department, Inslaw's founder William A. Hamilton says he believes Boston Systematics was also closely linked with both Maxwell and Rafl Bitan, the former head of Israel's anti-terrorism effort. Hamilton says Bitan, using a false name, showed up at Inslaw's Washington, DC office one day in 1983 for a private demonstration of PROMIS.

Another curious company is Arkansas Systems, founded in 1974 by Systematics employee and formerly U.S. Army "analyst" John Chamberlain. Located just down the road from Systematics. Arkansas Systems specializes in computer systems for foreign wire transfer centers and central banks. Among its clients: Russia and China, according to Arkansas Systems president James K. Hendren, a physicist formerly involved with the Safeguard anti-missile system. Arkansas Systems was one of the first companies to receive funding from the Arkansas Development Finance Authority, an agency created by Bill Clinton that is now coming under Congressional scrutiny.

What does Alltel have to say about all of this? "I've never heard anything so asinine in all my life," steams Joe T. Ford, Alltel's chairman and the father of Jack Stephen's chief administrative aide.

John Stouri, a former IBM executive who is chief executive of Alltel Information Services, says he had never heard of Boston Systematics before this inquiry. He declares that the Arkansas company does almost no work for the government, scoffs at the idea his company is tied to the NSA and says Foster has never had any connection to Systematics. As for the fact he sold half his 700,000 Alltel shares in February at $34, just before it began skidding to under $24, he says that was merely to pay for the exercise of options.

Why is it then that Hamilton claims sources in two separate intelligence agencies say documents relating to Systematics were among those taken from Foster's office immediately after Foster's death? Indeed, a private investigator close to the continuing "Whitewater" probe by Independent Counsel Kenneth W. Starr says he has learned that Hubbell has delivered those documents - including papers related to Systematics - to Starr. Hubbell pleaded guilty last December to two felony counts related to over-billing at the Rose Law Firm and has been sentenced to 21 months in prison.

If Foster knew the U.S. was spying on foreign banks, why would he let himself be caught red-handed with a Swiss bank account? The answer may be that the Israeli transactions were, in fact, well concealed, according to the veteran CIA source. And Foster would have known that, unless a prober knew exactly what to look for, finding his payoffs in the torrent of routine wire transfer data would be a hopeless task. Besides that, greed could explain a lot, if not Foster's then for whomever else he might have been playing bagman. The CIA source says Foster was not the only one in the White House under suspicion for peddling state secrets.

All of which helps explain Foster's odd behavior before his death. He was a tough, smart trial attorney at the peak of power in Washington. Only 48 years old, he was in excellent health. Suddenly, according to the Fiske report, he couldn't sleep. He complained of heart palpitations and high blood pressure. His sister arranged for him to see a Washington psychiatrist, who later told the FBI he had been instructed not to take notes because Foster's depression was "directly related to highly sensitive and confidential matters" tied to his "top secret" government work.

Foster never saw a shrink. Instead, about a week before he died, he hired a lawyer: high-powered DC criminal attorney and political fix-it man James Hamilton. Foster's wife claims his reason was the White House Travel Office controversy, which was expected to lead to congressional hearings.

On the weekend of July 17 and 18, Foster drove with his wife to the eastern shore of Maryland to relax. By "coincidence", according to the Fiske report, so did Hubbell. They met at the posh estate of Michael Cardozo, head of Clinton's legal defense fund and son-in-law of prominent Democratic fund raiser Nathan Landau. Hubbell later claimed the weekend was a laid-back gathering of tennis and poolside chit-chat.

But according to sources connected to the CIA, Justice Department and another intelligence agency, the meeting was under surveillance. The agenda? Heavy duty damage control. Foster was grilled. To whom else could the Swiss money be traced? How could the scandal be contained?

Foster's wife admitted he returned to Washington even more depressed. On Monday night, he turned down an invitation by the President to drop by the White House to supposedly watch a movie. On Tuesday, Foster left his office at the White House about 1 p.m. and said he'd be back later. At 5:45 p.m., his body was found neatly laid out at Fort Marcy Park, a bullet wound in his mouth. Suicide, the Fiske report promptly declared, echoed by a cursory Senate inquiry.

Still, nagging questions remain: Why was there no blood on the ground, no bone fragments or brain tissue? Why were there rug fibers all over the clothes? Why no dust on his shoes despite the long dirt path from his car to his body?

The answer seems painfully clear; a cover-up of immense proportions for reasons of "national security". And don't expect Whitewater prober Kenneth Starr to spill any beans. He was in-house counsel to Reagan Attorney General William French Smith at the time the Inslaw PROMIS software was expropriated for intelligence use. Later, as Solicitor General, he recused himself from an Inslaw-related matter without explanation. It seems likely Starr would have been personally involved in launching the covert bank spy effort, which Washington is still so nervous to keep secret.

All in the family, you might say.

nitehawk@hevanet.com

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