They all knew he was a crook
(December 1991)
From Socialist Worker, 14 December 1991.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
IF I had not already been a socialist, the astonishing events at the Daily Mirror in the last few days would have quickly made me one. They are calling the Maxwell Robbery the greatest financial scandal of all time.
He robbed some £300 million from the workers at the Mirror, either from their company or from their pension fund.
All around there is a great tut-tutting. Newspapers which only weeks ago were describing Maxwell as a ‘swashbuckling buccaneer’ now fall over one another to denounce him for what he was – a revolting crook. Nowhere is the embarrassment greater than in the City.
In 1971 a distinguished lawyer and a distinguished accountant declared after a careful examination of Maxwell’s relations with a company called Leasco that Maxwell was not fit to chair a public company.
In the early 1980s Maxwell became chairman of one of the biggest public companies in the country, the British Printing Corporation.
In July 1984, on what we on the Mirror called Black Friday, he became chairman of the Mirror Group of Newspapers – which ran five national newspapers with a combined circulation of four million copies every weekday and six million every Sunday. How could this happen?
Every reason has been thought of except the right one – that Maxwell was a valuable standard bearer for his class when it was on the offensive in the 1980s. His brash, old fashioned style fitted the needs of the bosses of the Thatcher decade.
In an aggressive cowboy manner much admired by the bankers he had smashed the unions at BPCC and turned the company into profit. Could he not do the same at the Mirror?
Yes, he could. From the moment he came into the building, Maxwell set himself the single task of breaking the trade unions.
Maxwell’s fall, like his rise, was symbolic of the Tory government’s fortunes. Like them he believed the capitalist boom of the 1980s would last forever.
In a sort of frenzy he started buying up everything which came up for sale in the United States, Portugal, Argentine and Israel.
He borrowed and borrowed from his most faithful supporter, the National Westminster Bank, which could never forget the way he smashed the unions at BPCC and saved the bank an embarrassing insolvency.
Up and up went the takeovers and the loans in an endless spiral of megalomania and greed. No one stopped him – not a banker, not an adviser, not a regulator, not a government minister, not a policeman. What did stop him was the fatal flaw in the market system which promoted him.
Suddenly the boom evaporated. The ‘impossible’ recession swept over him. Interest rates climbed and the revenue from his new companies slumped. Squeezed more and more tightly, he turned for final salvation to the huge sums piled up in the Mirror workers’ pension fund.
Long ago Tories and capitalists used to argue that pension funds were proof of the burgeoning economic power of the workers. ‘With so much money in pension funds’, it was said, ‘millions of workers have a stake in the system.’
The argument overlooked the reality of control of the pension funds. The money was paid in by workers, but controlled by a handful of capitalists and accountants who used it to lubricate the Stock Exchange.
Maxwell adored Margaret Thatcher, and Thatcher repaid the compliment. When Julia Langdon joined the Mirror political staff from the Guardian, Thatcher applauded her decision. ‘A dose of Maxwell will do you good,’ she trumpeted.
But Maxwell was not a Tory – he supported the Labour Party. Into his plush inner circle came a clutch of right wing Labour Party supporters, most of them ennobled as Maxwell hoped to be.
There was Lord Donoghue, the biographer of Herbert Morrison, Lord Williams – a city slicker and deputy leader of the Labour peers – former Attorney General Sam Silkin and former Solicitor General Peter Archer. While Maxwell behaved like a Tory, while he broke the unions like a Tory, while he stalked the Mirror and other enterprises he owned with all the arrogance of a Tory grandee, he said he was a supporter of the Labour Party and the Labour leadership glowed with delight.
Now, instead of revelling in his disgrace, instead of exposing it as a disgrace of capitalism like all the other disgraces of recent years – Polly Peck, Ferranti and BCCI – the Labour leaders can only fret and fume and hope the whole thing will go away.
They too are stuck deep in mud of capitalist corruption.
Socialists need not be mealy mouthed. Maxwell was a great fat capitalist. His rise and fall reflected the rise and fall of British capitalism in the 1980s. He went up on backs of workers and down in the crisis of the market system.
This grotesque and apparently immovable statue to modern capitalism has come crashing down and no one wants to put an another remotely like it in its place.
Maxwell's Libel Writs from Paul Coker on Vimeo.
"English libel law is becoming a global disgrace" - Jo Glanville, Director English PEN
"English libel law is a vulture circling the world " - Simon Singh
"Maxwell was no ordinary run-of-the-mill millionaire. Physically a Falstaffian figure, Maxwell had a gargantuan appetite for everything: food, wine and women. Unwilling to enter into any permanent affair, he chose to satisfy his sexual needs through high-priced prostitutes. In every city he visited, his aides had call girls on hand to satisfy his needs. Like many despots, he worked anti-social hours, waking exhausted aides in the small hours to execute some minor whim that had come into his head.
His chauffeur once had to drive half-way across London to bring Maxwell a brand of ice cream that he fancied. On other occasions he would arrive in the newsroom of his flagship tabloid, the UK-based Daily Mirror, and terrorize the night staff by taking charge of production. He sacked people without warning, rewarded others with unexpected gifts. Unpredictable, volcanic in temper, he ruled by fear from which no one was safe. His own sons were publicly abused by him and his wife treated as a drudge.
But to the rich and powerful his lack of manners, his sexual peccadilloes, his unsavory eating habits, his often shambolic dress style: all these were of little consequence because of the power he wielded through his global publishing empire.
Like William Randolph Hearst, he strode the newspaper world like an emperor; like Hearst, Maxwell had a xenophobia, in his case a dislike of the United States. Maxwell was a Zionist. He believed that the United States had not done enough to help the Jews flee from the Nazis in the run-up to World War II. He also resented what he saw as an attempt to Americanize post-war Europe. But, like so much else about him, Maxwell kept such views secret.
All his life, Maxwell had cultivated the rich and famous to help him promote his publishing interests and political aspirations. In Britain in 1964, his contacts with its government had seen him return as a Labor Member of Parliament. His election had opened doors for him in Washington. He became a frequent visitor to the White House.
Among those he came to know was Senator John Tower. Tower had regaled Maxwell with stories of how he had helped to get George Herbert Bush into Congress.
On a visit to Israel, it was to Rafi Eitan [who, for a quarter of a century, had been deputy director of operations for Mossad, Israel’s legendary secret intelligence service] that Maxwell revealed his own dislike of America. Eitan, who had no such antipathy, noted the tycoon’s feelings and decided that “one day that could be useful to know.” "
"English libel law is becoming a global disgrace"
Jo Glanville, Director English PEN
"Our libel laws allow the rich and powerful to silence their critics and stop the general public from receiving vital information in their interest. We need to reform our libel laws now to protect the freedom of speech of every citizen."
Kirsty Hughes, the CEO of Index on Censorship:
"English libel law is chilling global freedom of expression, by silencing writers, journalists, bloggers and human rights activists in the UK and around the world. Reforming these antiquated laws is long overdue, which is why it is imperative that the government passes the Defamation Bill."
Tracey Brown, Managing Director of Sense About Science
Profits of War: The Senational Story of the World-Wide Arms Conspiracy, Allen & Unwin, Sydney 1992.
The author, Ari Ben-Menashe, was an Israeli intelligence officer; Rafael Eitan was a counterterrorism adviser to Menachem Begin.
This book broke the Iran Contra scandal, but was ignored by the media. It also describes the capture of Mordecai Vanunu, beginning with his approaching the Sydney Morning Herald about his secret photos; that newspaper, instead of scooping the story, contacted ASIO (Australia's equivalent of the CIA).
Ari Ben-Menashe is lucky to be alive.
The extracts below describe the development of bugged computer software, and how Israel helped to bring down the USSR with it.
{p. 129} One of Eitan's pet projects was an anti-terrorist scheme involving a sinister, Big Brother-like computer program named Promls. It was through Eitan that I became involved in it. This was not Joint Committee work, per se, but many of the same people who worked on our arms-to-Iran operation worked on Promls also. The most prominent of these was British medla baron Robert Maxwell, who made a fortune out of it. Through some of his companies, the Israelis and the Americans were eventually able to tap into the secrets of numerous intelligence networks around the world - including Britain, Canada, Australia, and many
{p. 130} others - and set into motion the arrest, torture, and murder of thousands of lnnocent people in the name of "antiterrorism."
The frightening story of the Promis program begins in the United States in the late 1960s when communications expert William Hamilton, who had spent time in Vietnam during the war setting up listening posts to monitor the communist forces, was assigned to a research and development unit of the U.S National Security Agency. Fluent in Vietnamese, Hamilton helped create a computerized Vietnamese-English dictionary for the intelligence agency. While working there, Hamilton also started work on an extremely sophisticated database program that could interface with data banks in other computers. By the early 1970s, he was well on the way with his research and realized he had a keg of dynamite in his hands.
The program he was developing would have the ability to track the movements of vast numbers of people around the world. Dissidents or citizens who needed to be kept under watch would be hard put to move freely again without Big Brother keeping an eye on thelr activities.
When Hamilton saw that the program he was building had so much potential, he resigned from the National Security Agency and took over a non-profit corporation called Inslaw, established to develop a software program for legal purposes. The Inslaw program would be able to cross-check various court actions and, through cross-referencing, find a common denominator. For example, if a wanted person moved to a new state and established a new identity before being arrested, the program would search out aspects of his life and cases he had been involved in and match them up. Hamilton put his knowledge to use in Inslaw, and when his bosses at NSA found out, they were not at all happy. Their argument was that as an employee of the agency, he had no right to take knowledge gleaned there to another organization. By 1981 Hamilton came up with an enhanced program. What he had actually done was given birth to a monster. Inslaw was turned into a profit-making organization, and Hamilton copyrighted his enhanced version.
Believing that Inslaw was invaluable for law-enforcement agencies, Hamilton sent Promis to the Justice Department in 1981, offering them leasing rights; the more they used it, the more
{p. 131} profit Inslaw would make. The Hamilton program was sent to the NSA for study, but in time, through arrangements made with Attorney General Edwin Meese III, Hamilton got his program back. The Justice Department declined to lease the program from Inslaw, and, it soon transpired, they were using "their own" Promis. So was the NSA.
The U.S. government had its own plans for Promis. Some American officials thought the Israelis might be able to sell it to intelligence agencies around the world, so in 1982, Earl Brian approached Rafi Eitan. After studying the program, Eitan had a brilliant idea.
He called me in to see him. "We can use this program to stamp out terrorism by keeping track of everyone," he said. "But not only that. We can find out what our enemies know, too."
I stared at him for a moment. Suddenly I realized what he was talking about. "Ben zona ata tso dek!" - Son of a bitch, you're right! I exclaimed. All we had to do was "bug" the program when it was sold to our enemies.
It would work like this: A nation's spy organization would buy Promis and have it installed in its computers at headquarters. Using a modem, the spy network would then tap into the computers of such services as the telephone company, the water board, other utility commissions, credit card companies, etc. Promis would then search for specific information. For example, if a person suddenly started using more water and more electricity and making more phone calls than usual, it might be suspected he had guests staying with him. Promis would then start searching for the records of his friends and associates, and if it was found that one had stopped using electricity and water, it might
{Footnote, p. 131: Hamilton and his wife Nancy sued the Justice Department, charging that Justice stole the enhanced Promis program from Inslaw and gave it to NSA. Justice claimed it did get a program from Inslaw but returned it unused. NSA said it developed its own enhanced program and gave it to other intelligence agencies, but not to the Justice Department. Since the stalling by the Justlce Department had thrown Inslaw into bankruptcy proceedings, the Hamiltons pursued their legal remedies in Bankruptcy Court. The lower courts upheld their claims against the Justice Department, but an appellate court ruled that Bankruptcy Court was the incorrect venue for such claims, requiring them to refile the suit in District Court. A congressional investigation into the matter has also been slowly proceeding.}
{p. 132} be assumed, based on other records stored in Promis, that the missing person was staying with the subject of the investigation. This would be enough to have him watched if, for example, he had been involved in previous conspiracies. Promis would search through its records and produce details of those conspiracies, even though the person might have been operating under a different name in the past - the program was sophisticated enough to find a detail that would reveal his true identity.
This information might also be of interest to Israel, which is where the trap door would come into play. By dialing into the central computer of any foreign intelligence agency using Promis, an Israeli agent with a modem need only type in certain secret code words to gain access. Then he could ask for information on the person and get it all on his computer screen.
According to computer experts I have spoken to in Israel, the trap door is undetectable. Nations receiving Promis might wonder if there was any trickery by Israel, but they would not be able to find anything - especially as it was experts provided by Israel who installed the program.
Rafi Eitan did not want to risk having a trap door developed in Israel. Word might leak back that the Israelis had been bugging software and then handing it out to others. He didn't even suggest that the NSA develop the trap door because he had a great sense of national pride. As far as he was concerned, it was Israel's idea and would remain so. Yet it still had to be kept secret. Eitan decided it would be best if a computer whiz could be found outside the country.
I knew just the man for the job. Yehuda Ben-Hanan ran a small computer company of his own called Software and Engineering Consultants, based in Chatsworth, California. I had grown up with him, but I didn't want him to know that I was scouting him for a possible job. I had to sound him out, to find out if he was a blabbermouth.
When I called on him, I told him I was in California on holiday and had decided to look him up. We chatted about our days as kids, and he introduced me to his wife, a Brazilian Jew. I decided he was right for the job - he was not conspiracy-minded, and it was unlikely his suspicions would be aroused. Five days after I left, he was approached by an Israeli man who hired him to build
{p. 133} an external access to a program. Yehuda wasn't told what the program was all about. He was simply given blueprints and set about his work for a $5,000 fee.
With the trap door in place, Rafi Eitan selected Jordan as the nation on which it would be tested. Earl Brian made the sale through his company, Hadron. Brian accurately represented it as a program that would help stamp out the Palestinian dissidents who had long been a thorn in the side of King Hussein. A team of Hadron computer experts went to Amman and began setting up Promis software for Jordanian military intelligence. They also hooked it up with the various computers that had already been sold to Jordan by IBM in the late 1970s. These computers were linked to the water company, the telephone company, and every other public utility.
The Hadron team did one more thing. They hooked the Promis program to a small computer attached to a telephone line in an apartment in Amman. That apartment was occupled by a buslnessman who had close connections with Mossad. From his home, he was able to dial up various public services, as well as the military, and use Promis to find out everything about everybody - as well as to tap into Jordan's military secrets. Because of his business as an importer-exporter, he often had an excuse to fly to Vienna. He would take the New York-bound Aliya Royal Jordanian Airlines flight from Amman and get off in Vienna. There, he would pass computer disks loaded with information to a Mossad contact.
So what Israel and the Americans learned was that the system was workable. The two countries also found out that the Jordanians had a tracking system of their own which was being used against Palestinian movements. Israel and the U.S. were laughing. The Jordanians tracked the Palestinians, our man tapped into their information, and we knew as much about the whereabouts of one terrorist or another as the Jordanians did.
The Americans came up with the idea of selling this valuable program to governments and their intelligence networks all over the world. But first they had to produce their own version of Promis with the secret trap door. The Americans handed a copy of their program to Wackenhut, a Florida-based company that worked for the U.S. intelligence community. The company also
{p. 134} had a computer development unit located on the Cabazon Indian Reservation in southern California. The Indian reservation was used by Wackenhut, which was contracted by the technical services division of the CIA, for developing special equipment such as special-purpose electronics, anti-terrorist devices, etc., as well as hallucinogeric drugs. It was done on an Indian reservation because there was no state jurisdiction and the federal authorities who would have jurisdiction turned a blind eye to the operation.
It was here that the trap door was built into the U.S. version of Promis, based on Israeli information.
The CIA group that was to use Promis had not handed the program back to the NSA to have the trap door fitted by them for the simple reason that they didn't want the NSA to know about it - interagency competition was fierce. Only this small CIA group, headed by Robert Gates - who was to become head of the Central Intelligence Agency in October 1991 - was in on the secret. So we now had a small group in Israel and a small group in the U.S. that knew about the trap door.
The next step for both Israel and the United States was to find a neutral company through which the doctored Promis program could be sold. It was agreed that the head of the company had to be a man who could be trusted to keep intelligence secrets, who had contacts with both Western and East Bloc countries and who had a respected businessman's image. The man they came up with was Robert Maxwell.
Robert Maxwell, whose body now lies in Judaism's most revered burial ground on the Mount of Olives overlooking Jerusalem's walled city, formed his ties with Israel in the early 1960s when a meeting was arranged for him with Yitzhak Shamir, who was then in Mossad operations in Europe. Shamir's was an important role, soliciting information from all the European-based agencies employed by Mossad. The rendezvous with Maxwell was arranged through the Mapam [United Workers] Party in Israel which was part of the labor movement and had close connections with Maxwell's leftwing colleagues in the British Labor Party.
The two men were brought together by Aviezer Ya'ari, a kibbutz member and one of the ideological leaders of Mapam. Upper-
{p. 135} most in Ya'ari's mind was making contact with the Soviets, so it was a natural move to put Shamir in touch with Maxwell, who had intelligence links with the Soviets beginning in World War II. Shamir's past as a Stern Gang terrorist appeared to make this an unlikely pairing, but Mossad was keen to make any connections it could with the KGB, and the belief in Tel Aviv was that Maxwell, for all his pride in faithfully serving in the British Army, remained on good terms with "friends" in the East Bloc.
Maxwell, who had been elected a British Labor MP in 1964, and Shamir shared an antipathy for the Americans, and were to become friends of heart and spirit.
Rafi Eitan knew of Maxwell's long association with Shamir and with Israel, so he suggested that the British mogul would be the perfect front for selling Promis. The approach to Maxwell, on Israeli prompting, was made in 1984 by Sen. John Tower, an old friend of the publisher's, who was close to the then vlce presldent, George Bush - in fact, many years before, Tower had helped Bush get into Congress. Always interested in military and intelllgence affairs, Tower had served as chair of the Senate Armed Servlces Committee. According to Maxwell, when Bush was head of the CIA in 1976, Tower approached Maxwell to connect him and Bush secretly on a person-to-person basis with various Soviet intelligence people. When Maxwell delivered, Tower became his friend for life. With the relationship strengthening over the years, Tower subsequently was appointed a director of Maxwell's Macmillan publishing company in the U.S.
Tower's approach to Maxwell to use his network of companies to market Promis was made on behalf of the CIA group headed by Gates. But it was Rafi Eitan who mapped out the workings of Promis for Maxwell at a discreet meeting between the two men m Paris in 1984. I do not know whether Maxwell was made aware of the trap door and how Israel and the U.S. could use this to gain external access to the computers of whatever agencies were usmg the program. But Maxwell would have been made perfectly aware of the general uses of Promis and how intelligence servlces could keep tabs on anyone about whom they had cause to be suspicious.
Maxwell agreed he was in a perfect position to market Promis for the Americans and the Israelis. After all, his Berlitz language schools were located all around the world. All he needed to do
{p. 136} was set up or buy computer companies through Berlitz Holdings. This would distance him personally from the massive spy project.
A perfect company for Maxwell to take over already existed. Israeli-owned, Degem was a computer business located in Israel, Guatemala, and Transkei, the Bantustan "homeland" controlled by South Africa. The Transkei connection is particularly interesting.
Menachem Begin, Israel's prime minister from 1977 to 1983, had a long-time friend, Yaacov Meridor, who was running various businesses with South Africa through Transkei. A minister without portfolio in Begin's government, he was raking in a fortune in commissions from whatever country wanted to beat the boycott on South Africa by dealing through Transkei. Everything had to go through Meridor or a company he owned. One of these companies was Degem, which was actually controlled by Israel's military intelligence and was providing computer services to the South Africans and to Guatemala.
Poor Meridor became unstuck - and opened the door for Maxwell - when he was caught up in a huge scandal. Along with a Texan, Joe Peeples, and a Romanian expatriate who claimed to be an energy professor, Meridor drew up a blueprint for using the sun as a source of energy to generate vast amounts of electricity. Although this was theoretically feasible, the Meridor blueprint went far beyond the realm of possibility. However, he and his pals succeeded in selling the idea to the wealthy Hunt brothers of Texas for $2 million. For this price, the Hunts were told they had the rights to sell the scheme in the U.S. Meanwhile, Meridor decided that he would seek a huge loan from the Israeli Treasury, but he slipped up badly. He went on TV and told the nation that he was working on a solar energy system with which Israel would never have to use oil or coal for electricity again. All he needed was a little financial backing.
Expecting the money to come pouring in, Meridor was stopped in his tracks when a scientist from the Weizman Institute went on TV three days later and declared the whole thing a fraud. Joe Peeples, who was not able to give the $2 million back to the Hunts, was jailed for fraud. The Romanian, who had not received any of the money, went free. Meridor lost his job as a cabinet
{p. 137} minister - and his credibility. His Transkei operations were another casualty. And then along came Maxwell who, knowing exactly what he was buying it for, sank his money into Degem.
After the initial success with Promis against the Jordanians, and following Maxwell's agreement to buy into Degem, Promis was put to use in the most horrible way in a number of countries. One egregious example was Guatemala. Pesach Ben-Or, a representative for Eagle, a well-connected Israeli arms-dealing company, had been helping the military regime there set up a computer tracking system to fight the leftist insurgency. But it proved to be inadequate.
In 1984 Israeli intelligence came to an arrangement with the man who was calling himself El Jefe de la Nacion - the Chief of the Nation - General Oscar Mejia Victores. He agreed to allow a warehouse to be used for storing weapons coming secretly out of the U.S. en route to Iran and to allow planes carrying arms from Poland to the Sandinista government in Nicaragua to fly over Guatemala and even land there on occasions. The Israelis, with a wink and a nod from the Americans, had been selling certain arms from Poland to the Sandinistas in their fight against the contras. Of course, there were other factions in the U.S. and Israel - including the Oliver North group - who supplied weapons to the contras.
The price Israel had to pay for this agreement was that the Eagle company, run by Pesach Ben-Or in Guatemala and his associate Mike Harari in Panama, and overseen by Ariel Sharon, would continue selling weapons to the Guatemalan government. On top of that, Israel would install a very sophisticated computer program that would help the military stamp out insurgents. The Mossad chief in Israel, Nachum Admoni, told Sharon not to interfere with the computer program, and in turn the intelligence community would not interrupt Eagle's unofficial sale of arms to the Guatemalan military. It was a case of everyone scratching everyone else's back.
In setting up Promis in Guatemala, Israel employed the services of Manfred Herrmann, a German expatriate in his 60s, who owned an automobile spare-parts company in Guatemala City known as Sedra. It was agreed that Herrmann would represent Israel's arms-running company, Ora, in Guatemala, while his
{p. 138} partner, Baldur K. Kleine, would be the representative in Maitland, Florida, from where he would coordinate all our activities in Central America. Shortly after Maxwell took over Degem, Rafi Eitan asked Earl Brian to meet Kleine in Maitland and give him Promis with the trap door in place.
After Kleine passed the program over to Herrmann, I also provided Herrmann with the Israeli version. If the Americans were going to tap into Guatemala, so were we. Because we were running arms through the country, it was in our interests to keep a general watch on things. However, we soon realized that Guatemala just did not have the computer equipment or skilled operators necessary. For Promis to work, everything in the water company and the electric company had to be computerized. Not only that, lists of identification numbers would have to be updated and a new census conducted. With so much information then available and with suspicious characters going into a central computer, Israel and the U.S. would be able to break in to the central system and learn everything the Guatemalan government knew.
Israel turned to Honeywell, the Israeli franchise of which was owned by Medan Computers Ltd. All the technicians working for Medan were military intelligence reservists and experts on computers. Those at the top were made aware of the Promis program, although they did not know about the trap door. When Medan pointed out that their computers would not be suitable, we arranged for them to act as brokers for IBM equipment in Guatemala.
In that same year, 1984, Guatemala was swept up in a campaign led by El Jefe himself to bring the nation into the computer age. TV radio, and newspapers lauded the move. Computers, it was said, would give jobs to everybody. Common people would no longer have to live in the Dark Ages. Photographs were produced, showing lines of young women sitting behind computers. It was compelling stuff. Every soldier in the army, many of whom could hardly read or write, was taught to use a keyboard. Maxwell's Degem, through Herrmann's Sedra company, moved into offices, railway stations, and airports, and even set up terminals at the most remote roadblocks.
The venture, from the intelligence point of view, was a major success. Suspected dissidents couldn't move anywhere without
{p. 139} Big Brother watching them. Even if they traveled under a false name, various characteristics, such as height, hair color, age, were fed into roadside terminals and Promis searched through its database looking for a common denominator. It would be able to tell an army commander that a certain dissident who was in the north three days before had caught a train, then a bus, stayed at a friend's house, and was now on the road under a different name. That's how frightening the system was. By late 1985 virtually all dissidents - and an unknown number of unidentified innocents - had been rounded up. In a country whose rulers had no patience for such people, 20,000 government opponents either died or disappeared.
And how was it all funded? In 1985 Guatemala started to be used heavily as a drug transit point to the United States from South America. Mejia, the Chief of the Nation, was, in fact, a much bigger drug boss than Noriega. Massive amounts of drugs were shipped into the United States, and part of the revenue went back to Guatemala to help finance the Promis operation. This would all have been impossible without the wink and the nod that the CIA gave.
In Transkei, Degem was of immense help to the white South African regime. Promis was trap-doored because the Israelis were interested in a number of people in South Africa. Promis, in effect, was a killing machine used against black revolutionary groups, including the African National Congress. Almost 12,000 activists were affected by the beginning of 1986 - picked up, disappeared, or maimed in "black-on-black" violence. "Kushi kills Kushi" became a well-known term in Israeli intelligence circles with Chief Gatsha Buthelesi's black death squads doing the dirty work.
It was a simple operation: As a result of Maxwell buying Degem, Promis was installed in the Transkei. It pulled in information on dissidents, and death lists were drawn up and handed over to Buthelesi and his group, who went out on the rampage to finish them off.
At one point a planned strike by black miners was stopped when Promis was used to find the instigators. They all disappeared as Promis tracked them down through their required identity passes. Of course the South African security network just
{p. 140 }loved it. The computer, which had become their ally, had links to the computer in the military compound in Pretoria, and although it was the Israeli version that was being used, the information went straight to the American Embassy for one very simple reason. The embassy has a common wall with the military compound, so it was nothing to string a wire between the two establishments.
The hypocrisy of it all was that Robert Maxwell was officially against any relations with racist South Africa, and his Daily Mirror, which he had bought in 1984 for £113 million, had championed one-man, one-vote, regardless of race. Yet under cover of his Degem company he was actually helping the South African government in a way they had never been helped before. If he had said no to Israel, no doubt some other company would have been used to get Promis going, but at least Maxwell's conscience would have been clear.
Promis was sold all over the world. With their respective intelligence connections, Earl Brian's Hadron and Maxwell's Degem engaged in friendly competition, wiring the world for intelligence purposes. The Americans, through Hadron, sold Promis to a number of countries, including Britain, Australia, South Korea, Iraq, and Canada. Many of the secrets of those nations' intelligence agencies were read through the Promis trap door by the Americans. Moreover, the CIA was making a fortune hawking Promis software. Up to 1989 they had made at least $40 million from that venture alone.
The Israelis, through Degem, sold Promis to the East Bloc and other countries, including Brazil, Chile, Colombia, and Nicaragua. An abridged version of Promis, including the trap door, was also sold by Degem to Credit Suisse in 1985. The Likud Party, which had control over Israel's intelligence network, was very interested in knowing which Israelis might have opened accounts there. After finding out who had lodged rake-off money there, the party could approach the individuals and ask for a "donation" - or threaten exposure.
Maxwell's Degem even sold Promis to the Soviet Union in the late 1980s. The path had been cleared for Degem to get into the
{p. 141} Soviet Union - in 1986 and 1987, a computer company, TransCapital Corporation, of Norwalk, Connecticut, had been allowed to export high-tech IBM computers to the Soviet Union, even though there was a general ban on selling such equipment to the East Bloc. But the CIA's Robert Gates had lifted the barriers. When the Soviets expressed a desire to have Promis, Degem technicians fitted it to the IBM computers, complete with the tell-all trap door. In early 1991, before the coup against Mikhail Gorbachev, Soviet military intelligence, GRU, was still using Promis. So whether he knew about the trap door or not, Maxwell gave the Americans a direct line into Soviet military intelligence.
I believe that one of the reasons I was arrested in 1989 on a trumped-up arms charge was that I, on behalf of the Israeli government, threatened to expose what the Americans were doing with Promis if they continued their support of chemical weapons being supplied to Saddam Hussein's Iraq.
Leigh Ratiner, the attorney who was representing Inslaw and the Hamiltons on behalf of his Washington firm, Dickstein and Shapiro, also had something strange happen to him when he began to find out about the real use of Promis. Suddenly, he was called in by his senior partners and told they wanted him to leave the case and the firm, and they started negotiating his severance agreement. Ratiner received $120,000 a year for five years, provided he agreed not to practice law during that period. Ratiner, who was always puzzled by the abrupt dismissal from a firm he had been with for ten years, assumed that the Inslaw case was the reason, but was not sure why. Some time after his dismissal, he saw a memo from his old firm's files which reported that, a week before he was called on the carpet, an assistant attorney general had been talking to one of the firm's partners and had advised that they ought to get rid of Ratiner. That was all Ratiner learned.
He did not know what I knew. A few weeks before Ratiner's dismissal I had seen a cable that came in to the Joint Committee from the United States. It requested that a $600,000 transfer from the CIA-Israeli slush fund be made to Earl Brian's firm, Hadron. The money, the cable said, was to be transferred by Brian to Leonard Garment's law firm, Dickstein and Shapiro, to be used to get one of the Inslaw lawyers, Leigh Ratiner, off the case. Ratiner, it seems, was removed for doing too good a job for Inslaw.
The INSLAW Affair from Paul Coker on Vimeo.
"On that February day in 1983 the call to William Hamilton from Brewer thrilled the Hamiltons. As the Justice Department Project Manager, Brewer had considerable power over the future of Enhanced Promis. In one of the many twists the story was about to assume, Brewer had once worked for Inslaw. Bill Hamilton had fired him because of “good cause.” A circumspect man of few words, Hamilton had never elaborated in public his feelings towards Brewer. For his part, Brewer had maintained a stoic silence. But on that February day all was cordial between both men.
During the call, Hamilton was to recall Brewer had said that the Justice Department would have no objection to Inslaw going into “all necessary detail” to how Enhanced Promis worked to the visitor that Brewer was going to send over by cab from the Justice Department. His name was Dr. Orr and he was from Tel Aviv.
To Bill Hamilton his forthcoming visitor was potentially further proof that “Justice was going to go on playing it fair and square.”
Bill Hamilton had written a letter to the Department of Justice detailing the improvements made to the original, public-domain Promis, asking the Department to waive rights it “might claim to the Enhanced version.”
On August 11, 1982, a Justice lawyer replied: “To the extent that other enhancements (beyond the public domain Promis) were privately funded by Inslaw, and not specified to be delivered to the Department of Justice under any other contract or agreement, Inslaw may assert whatever proprietary rights it may have.”
The Hamiltons saw the letter as clear-cut: Enhanced Promis was their creation to profit from. They would later be comforted by the clarification offered by the then deputy attorney-general Arnold Burns, that “our lawyers (at DOJ) are satisfied that Inslaw’s lawyers could sustain the claim in court that we had waived those proprietary rights.”
Completely reassured that profits that would accrue from the considerable sums they had invested in Enhanced Promis were theirs alone, Bill and Nancy Hamilton had constantly updated Enhanced Promis. In his submission to the Justice Department, Bill Hamilton had eloquently argued that the need for such software was all too evident:
“The United States government, the most powerful government in the world, has internal information systems which are mired in the archaic technology of the 1960s. There is a Department of Justice database, an Attorney General’s database, and an IRS database. Every arm of government has its own database. But none of them can share information. That makes tracking offenders almost always difficult and building cases against them a long and bureaucratic task.”
Hamilton acknowledged that in the past efforts had been made to deal with the problem when Inslaw had been a non-profit corporation funded entirely through government grants and contracts. Its prime client in those days had been the Law Enforcement and Assistance Administration, LEAA. Through public funding Inslaw had developed the original program, calling it Promis.
When President Carter closed down the LEAA, the Hamiltons bought and converted Inslaw to a for-profit corporation. They set to work using their own money to continue to upgrade the original Promis. So significant had been the many improvements made that the Hamiltons had renamed the software Enhanced Promis.
The technically-minded at the Department of Justice readily understood how significant the changes had been to create Enhanced Promis…. everyone at the Department of Justice grasped that Enhanced Promis had a staggering 570,000 lines of computer code, allowing it to integrate with innumerable databases without a need to reprogram.
In essence, Enhanced Promis could convert data into priceless information on a scale never before imagined. Hamilton, long accustomed to the ways of the government, knew that “anyone in Washington will tell you that information, when wielded with finesse, is power—and Enhanced Promis is the most powerful of computer tools.”
No one at the Justice Department disagreed with him."
"Tetris just so happened to be distributed in Budapest, Hungary, where Robert Stein, owner of Andromeda Software, was thoroughly interested by the game. He therefore contacted Alexey Pajitnov in order to secure the deal.
BUT, before the deal was looked into and finished, Stein had sold rights already to Spectrum Holobyte, a company in the U.S., and Mirrorsoft, owned by Robert Maxwell's son, Kevin Maxwell.
Both companies were interested by the game as well, wanting PC rights - rights that Robert Stein did not even have. Even worse, Robert Stein failed to settle a deal with Pajitnov, then going for a licensing with the Hungarian programmers who made it. However, at that point, Spectrum Holobyte was already developing and selling their version of Tetris on the IBM PC in the U.S.
What happened? The version was an absolute smash, garnering money all over the area.
Now, the real confusion started to begin.
BUT, before the deal was looked into and finished, Stein had sold rights already to Spectrum Holobyte, a company in the U.S., and Mirrorsoft, owned by Robert Maxwell's son, Kevin Maxwell.
Both companies were interested by the game as well, wanting PC rights - rights that Robert Stein did not even have. Even worse, Robert Stein failed to settle a deal with Pajitnov, then going for a licensing with the Hungarian programmers who made it. However, at that point, Spectrum Holobyte was already developing and selling their version of Tetris on the IBM PC in the U.S.
What happened? The version was an absolute smash, garnering money all over the area.
Now, the real confusion started to begin.
Through the sending of rights, Spectrum Holobyte actually distributed the rights to many different companies, all claiming they had the rights, when in actuality they didn't.
One of these companies who thought the rights were in general was a sub-division of Atari Games, Tengen (the Japanese console games maker). Tengen had signed rights for an arcade version of Tetris with proper dealings with Elorg.
However, having thought this meant for all arcade-related objects, Tengen created a version of Tetris for the NES, a game console made by video game company Nintendo. In actuality, they had no proper copyrights and were selling an illegal game in Japan and U.S., lying to Nintendo about the rights, unbeknownst to them.
It all started to really heat up when Nintendo would find out through some unorthodox investigation.
One of these companies who thought the rights were in general was a sub-division of Atari Games, Tengen (the Japanese console games maker). Tengen had signed rights for an arcade version of Tetris with proper dealings with Elorg.
However, having thought this meant for all arcade-related objects, Tengen created a version of Tetris for the NES, a game console made by video game company Nintendo. In actuality, they had no proper copyrights and were selling an illegal game in Japan and U.S., lying to Nintendo about the rights, unbeknownst to them.
It all started to really heat up when Nintendo would find out through some unorthodox investigation.
Kevin Maxwell, after hearing that Stein was going to Russia, decided that Stein never had the rights in the first place, angered and frustrated by this backstab.
Hoping to get the rights himself before anyone else can, Maxwell went to Russia himself as well.
All three men, Robert Stein, Kevin Maxwell, and Henk Rogers, flew to Russia at the same time. Stein and Maxwell had their own personal limos and such to get them towards Elorg, but Rogers didn't.
"Man, It was a total adventure game," he said, "It was just grey and dull. I didn't even know how the hell I could get to where I needed. People around were just very quiet."
Interesting help arrived in the form of the actual creator, Alexey Pajitnov.
Hoping to get the rights himself before anyone else can, Maxwell went to Russia himself as well.
All three men, Robert Stein, Kevin Maxwell, and Henk Rogers, flew to Russia at the same time. Stein and Maxwell had their own personal limos and such to get them towards Elorg, but Rogers didn't.
"Man, It was a total adventure game," he said, "It was just grey and dull. I didn't even know how the hell I could get to where I needed. People around were just very quiet."
Interesting help arrived in the form of the actual creator, Alexey Pajitnov.
Having known who actually created Tetris from the signed rights before, Rogers managed to into contact with Pajitnov. Through some discussion, and the acquiring of a friendship between the two, they set off to help Henk win the rights from Elorg.
From the word's of Rogers, "It was basically...they were interviewing Kevin Maxwell, but not Robert Stein because of previous deals, so it was my turn to have meetings with the Russians, and then others were having meetings. I mean, we were all having meetings, completely suspenseful!"
Rogers' turn arose, in which he explained that he didn't have as much money as the Maxwell's, but that he could give them a much fairer share of the profit as well as a good pay.
Because of this down-to-earth answer, with the addition of Pajitnov's friendship with Rogers, Elorg gave the handheld rights to Henk Rogers and Nintendo.
From the word's of Rogers, "It was basically...they were interviewing Kevin Maxwell, but not Robert Stein because of previous deals, so it was my turn to have meetings with the Russians, and then others were having meetings. I mean, we were all having meetings, completely suspenseful!"
Rogers' turn arose, in which he explained that he didn't have as much money as the Maxwell's, but that he could give them a much fairer share of the profit as well as a good pay.
Because of this down-to-earth answer, with the addition of Pajitnov's friendship with Rogers, Elorg gave the handheld rights to Henk Rogers and Nintendo.
As the dealings were finishing, the head Russians spotted the NES cartridge of Tengen's version of Tetris that Rogers carried, asking as to the meaning of this. Rogers explained that Tengen made it for NES.
The Russians, however, said that they hadn't given such rights to anyone. Total silence came from Rogers, who said later,
"It was then that I was like.....oh.....crap. I was sitting here, they thought I was one of the companies that had been pirating the game because they didn't give rights to anyone. And, so, I just thought that they could send me to Siberia or someplace to jail now. Truly terrifying, I mean."
The Russians, however, said that they hadn't given such rights to anyone. Total silence came from Rogers, who said later,
"It was then that I was like.....oh.....crap. I was sitting here, they thought I was one of the companies that had been pirating the game because they didn't give rights to anyone. And, so, I just thought that they could send me to Siberia or someplace to jail now. Truly terrifying, I mean."
However, the Russians didn't get angry and instead asked Rogers if he wished to sign for both the handheld and console rights. Rogers slowly realized this and his thoughts were 'absolutely "Hot potato!"'. Rogers proudly left Russia with the rights of Tetris for console and handheld, as well as the knowledge that Tengen had been making illegal and pirated versions of Tetris the whole time.
Robert Stein and Kevin Maxwell, however, left with nothing, with Maxwell all the more furious that a person like Rogers got the rights.
Having no other options to turn to, Kevin turned to his media mogul father, Robert Maxwell, to do something about the rights.
Robert Maxwell, in turn, then asked for an appointment with then-USSR Head of State Mikhail Gorbachev, which would happen with a result of Robert Maxwell asking Gorbachev to do something about it, due to it breaking the pride of the Soviet Union......
That is, until an earthquake happened on the day of the appointment, therefore never letting the Maxwell's speak out because of Gorbachev evacuating the area."
Robert Stein and Kevin Maxwell, however, left with nothing, with Maxwell all the more furious that a person like Rogers got the rights.
Having no other options to turn to, Kevin turned to his media mogul father, Robert Maxwell, to do something about the rights.
Robert Maxwell, in turn, then asked for an appointment with then-USSR Head of State Mikhail Gorbachev, which would happen with a result of Robert Maxwell asking Gorbachev to do something about it, due to it breaking the pride of the Soviet Union......
That is, until an earthquake happened on the day of the appointment, therefore never letting the Maxwell's speak out because of Gorbachev evacuating the area."
By Ben Laurance and John Hooper in Tenerife, David Sharrock and Georgina Henry
Wednesday 6 November 1991
Wednesday 6 November 1991
Robert Maxwell, the flamboyant head of one of the world's biggest media empires, was discovered dead in the sea yesterday after disappearing from his yacht off the Canary Islands.
As London business analysts were predicting the break-up of his business empire under the pressure of £3bn debts, his widow Elizabeth and their son Philip flew to Gran Canaria and identified his body at the Gando air base. They later flew to Tenerife, where the inquiry into the death will be held.
The body of the Daily Mirror publisher was winched from the Atlantic by a Spanish helicopter 20 miles south-west of Gran Canaria. Spanish national radio said he was unclothed and showed no sign of violence.
At a hastily-improvised midnight press conference at Reina Sofia airport in the south of Tenerife, the island's Civil Governor, Angel Delgado, said Mr Maxwell's motor yacht, the Lady Ghislaine, left Santa Cruz in the north of the island at 10pm on Monday and put into Puerto de los Cristianos at 9am yesterday.
But, he said, Mr Maxwell's body was found by a fishing boat floating 19 to 20 miles from Gando on the other side of the neighbouring island of Gran Canaria - more than 100 miles from the obvious route between the points of departure and arrival. Asked to explain how the body could have got there, Mr Delgado replied: "That's a good question."
He said that according to the crew Mr Maxwell was last seen at 4.25am yesterday. "His absence was noted when the boat arrived at los Cristianos at 9am," the governor added. According to other versions, Mr Maxwell was found to be missing at around 11am when he failed to answer a telephone call to his cabin. Licinio Alonso, the director of the Maritime Safety Centre at the Spanish Ministry of Transport, said the alarm was not raised until 1pm by a satellite telex via Norway.
A post-mortem examination will be carried out this morning.
An air and sea search was launched after the captain of the 55-metre Lady Ghislaine notified the Spanish authorities that the 68-year-old chairman of Maxwell Communication Corporation and Mirror Group Newspapers had disappeared.
On BBC 2's Newsnight programme last night, the Mirror Group editorial director, Charles Wilson, said he could not imagine any situation that would cause Mr Maxwell to take his own life since "he had too much of the arrogance of his own ability to conceive of such a thing."
Mr Maxwell's son Ian faced the cameras outside the offices of the Mirror Group last night to say that the sadness of his father's death would touch not only his family, but also the 15,000 to 20,000 employees, and the shareholders of the company which had lost "its publisher, its chairman, and its saviour".
Shares in MCC and MGN were suspended yesterday at the companies' request after Mr Maxwell was reported missing. Ian and another son, Kevin, were appointed acting chairmen of the companies.
MCC has been struggling to emerge from debts put at £1.3bn; other debts may take the group total to over £3bn. Financial experts in the City and on Wall Street became increasingly nervous about the stability of the companies.
Mr Maxwell's death marks the end of an extraordinary career. Born into poverty in Czechoslovakia, he was decorated for his bravery in the second world war before going on to establish a vast media and publishing empire.
A Labour MP in the 1960s, the socialist millionaire counted many world leaders among his friends and associates, including Eastern bloc leaders.
Mr Maxwell was taking a break after a bruising round of allegations about links with the Israeli intelligence service, Mossad, and speculation over the health of his business empire.
He said the allegations made by American Pulitzer prize-winning author Seymour Hersh were "ludicrous, a total invention". But he sacked the Daily Mirror foreign editor, Nick Davies, for issuing false denials about a meeting with an American arms dealer.
A statement issued by MGN last night said Mr Maxwell flew to Gibraltar where he joined the Lady Ghislaine.
A Maxwell company spokesman said last night: "His last conversation that I can find was with his son Ian, who spoke to him at 11 o'clock last night when they had a normal business and family conversation and he was in a perfectly good mood."
Richard Stott, editor of the Daily Mirror, said: "He went out to the boat at the weekend because he had a cold. I spoke to him last night and he seemed OK."
Speaking on BBC television news, he said Mr Maxwell had not been depressed. "He was very angry about allegations contained in the Seymour Hersh book," said Mr Stott.
Politicians were swift to pay their tributes. The Prime Minister said Mr Maxwell had given him "valuable insights" into the situation in the Soviet Union during the attempted coup. He was a "great character", Mr Major added.
Neil Kinnock spoke of the former Labour MP for Buckingham, from 1964-70, as a man with "such a zest for life . . . Bob Maxwell was a unique figure who attracted controversy, envy and loyalty in great measure throughout his rumbustious life. He was a steadfast supporter of the Labour Party."
Mr Maxwell had four sons and five daughters but a son and daughter died.
