V

103D CONGRESS

2D SESSION H. R. 4862

For the relief of INSLAW, INC., a Delaware Corporation, and William

A. Hamilton and Nancy Hamilton, individually.

IN THE HOUSE OF REPRESENTATIVES

JULY 29, 1994

Mr. ROSE introduced the following bill; which was referred to the Committee

on the Judiciary

A BILL

For the relief of INSLAW, INC., a Delaware Corporation,

and William A. Hamilton and Nancy Hamilton, individually.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 That jurisdiction be, and the same is hereby, conferred

4 upon the United States Court of Federal Claims to hear,

5 determine, and render judgment upon the claims of

6 INSLAW, INC., a Delaware Corporation, and William A.

7 Hamilton and Nancy Hamilton, individually, as herein8 after described and in the manner set out, which claims

9 arise out of the furnishing of computer software and serv10 ices to the United States Department of Justice.
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1 SECTION 1. FINDINGS OF THE HOUSE COMMITTEE ON THE

2 JUDICIARY.

3 That the findings of the House Committee on the Ju4 diciary in the INSLAW Affairs, dated September 10,

5 1992, and committed to the Committee of the Whole

6 House on the State of the Union are hereby reaffirmed

7 and adopted, verbatim herein, as follows:

8 ‘‘(1) The Department, in an attempt to imple9 ment a standardized case management system, ig10 nored advice from vendors—including INSLAW—

11 that PROMIS should not be adapted to word proc12 essing equipment. As predicted, problems arose with

13 adapting PROMIS to word processing equipment.

14 The Department immediately set out to terminate

15 that portion of the contract and blamed INSLAW

16 for its failure.

17 ‘‘(2) The Department exhibited extremely poor

18 judgment by assigning C. Madison Brewer to man19 age the PROMIS implementation contract. Mr.

20 Brewer had been asked to leave his position as gen21 eral counsel of INSLAW under strained relations

22 with INSLAW’s owner, Mr. William Hamilton.

23 INSLAW’s problems with the Department, which

24 started almost immediately after the award of the

25 contract in March 1982, were generated in large

26 part by Mr. Brewer, with the support and direction
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1 of high level Department officials. The potential con2 flict of interest in the hiring of Mr. Brewer was not

3 considered by Department officials. However, Mr.

4 Brewer’s past strained relationship with Mr. Hamil5 ton, and the fact that he lacked experience in ADP

6 management and understanding of Federal procure7 ment laws, raises serious questions about why he

8 was selected as the PROMIS project manager.

9 ‘‘(3) Mr. Brewer’s attitude toward INSLAW,

10 combined with Mr. Videnieks’ harsh contract philos11 ophy, led to the rapid deterioration of relations be12 tween the Department and INSLAW. Any sem13 blance of fairness by key Department officials to14 ward INSLAW quickly evaporated when Mr. Hamil15 ton attempted to protect his companies’ proprietary

16 rights to a privately funded enhanced version of the

17 PROMIS software. In a highly unusual move, Mr.

18 Brewer recommended just 1 month after the con19 tract was signed that INSLAW be terminated for

20 convenience of the Government even though

21 INSLAW was performing under the contract. From

22 that point forward there is no indication that Mr.

23 Brewer or Mr. Videnieks ever deviated from their

24 plan to harm INSLAW. The actions taken by

25 Messrs. Brewer and Videnieks were done with the
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1 full knowledge and support of high level Department

2 officials.

3 ‘‘(4) Peter Videnieks, the Department’s con4 tracting officer, negotiated Modification 12 of the

5 contract which resulted in INSLAW agreeing to pro6 vide its proprietary Enhanced PROMIS software for

7 the Department’s use. This negotiation was con8 ducted in bad faith because Justice later refused to

9 recognize INSLAW’s rights to privately financed

10 PROMIS enhancements. Mr. Videnieks and Mr.

11 Brewer, supported by Deputy Attorney General Jen12 sen and other high level officials, Unilaterally con13 cluded that the Department was not bound by the

14 property laws that applied to privately developed and

15 financed software.

16 ‘‘(5) Therefore, the Department ignored

17 INSLAW’s data rights to its enhanced version of its

18 PROMIS software and misused its prosecutorial and

19 litigative resources to legitimize and cover up its

20 misdeeds. This resulted in extremely protracted liti21 gation and an immense waste of resources both for

22 the Government and INSLAW. These action were

23 taken even though the Department had already de24 termined that INSLAW’s claim was probably justi25 fied and that the Department would lose in court. In
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1 fact, Deputy Attorney General Burns acknowledged

2 this fact to OPR investigators.

3 ‘‘(6) Department of Justice documents show

4 that a ‘public domain’ version of the PROMIS soft5 ware was sent to domestic and international entities

6 including Israel. Given the Department’s position re7 garding its ownership of all versions of PROMIS,

8 questions remain whether INSLAW’s Enhanced

9 PROMIS was distributed by Department officials to

10 numerous sources outside the Department, including

11 foreign governments.

12 ‘‘(7) Several witnesses, including former Attor13 ney General Elliot Richardson, have provided testi14 mony, sworn statements or affidavits linking high

15 level Department officials to a conspiracy to steal

16 INSLAW’s PROMIS software and secretly transfer

17 PROMIS to Dr. Brian. According to these wit18 nesses, the PROMIS software was subsequently con19 verted for use by domestic and foreign intelligence

20 services. This testimony was provided by individuals

21 who knew that the Justice Department would be in22 clined to prosecute them for perjury if they lied

23 under oath. No such prosecutions have occurred.

24 ‘‘(8) Justice had made little effort to resolve

25 conflicting and possibly perjurious sworn statements
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1 by key departmental witnesses about the alleged at2 tempt by high level Department officials to liquidate

3 INSLAW and steal its software. It is very possible

4 that Judge Blackshear may have perjured himself

5 and even today his explanations for his recantation

6 of his sworn statement provided to INSLAW are

7 highly suspicious. The investigation of this matter by

8 the Department’s Office of Professional Responsibil9 ity was superficial.

10 ‘‘(9) The Department’s response to INSLAW’s

11 requests for investigations by an independent coun12 sel and the Public Integrity Section was cursory and

13 incomplete.

14 ‘‘(10) The reviews of the INSLAW matter by

15 Congress were hampered by Department tactics de16 signed to conceal many significant documents and

17 otherwise interfere with an independent review. The

18 Department actions appear to have been motivated

19 more by an intense desire to defend itself from

20 INSLAW’s charges of misconduct rather than inves21 tigating possible violations of the law.

22 ‘‘(11) Justice officials have asserted that, as a

23 result of the recent ruling by the Appeals Court and

24 the refusal of the Supreme Court to hear INSLAW’s

25 appeal, the Findings and Conclusions of Bankruptcy
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1 Judge George Bason and senior Judge William Bry2 ant of the District Court are no longer relevant. The

3 Appeals Court decision, in fact, did not dispute the

4 Bankruptcy Court’s ruling that the Department

5 ‘‘stole . . . through trickery, fraud and deceit’’

6 INSLAW’s PROMIS software. Its decision was

7 based primarily on the narrow question of whether

8 the Bankruptcy Court had jurisdiction; the Appeals

9 Court ruled that it did not. This decision in no way

10 vindicates the Department nor should it be used to

11 insulate Justice from the criticism it deserves over

12 the mishandling of the INSLAW contract.

13 ‘‘(12) The Justice Department continues to im14 properly use INSLAW’s proprietary software in bla15 tant disregard of the findings of two courts and well

16 established property law. This fact coupled with the

17 general lack of fairness exhibited by Justice officials

18 throughout this affair is unbefitting of the agency

19 entrusted with enforcing our Nation’s laws.

20 ‘‘(13) Further investigation into the cir21 cumstances surrounding Daniel Casolaro’s death is

22 needed.

23 ‘‘(14) The following criminal statutes may have

24 been violated by certain high level Justice officials

25 and private individuals:
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1 ‘‘18 U.S.C. § 371—Conspiracy to commit

2 an offense.

3 ‘‘18 U.S.C. § 654—Officer or employee of

4 the United States converting the property of

5 another.

6 ‘‘18 U.S.C. § 1341—Fraud.

7 ‘‘18 U.S.C. § 1343—Wire fraud.

8 ‘‘18 U.S.C. § 1505—Obstruction of pro9 ceedings before departments, agencies and com10 mittees.

11 ‘‘18 U.S.C. § 1512—Tampering with a wit12 ness.

13 ‘‘18 U.S.C. § 1513—Retaliation against a

14 witness.

15 ‘‘18 U.S.C. § 1621—Perjury.

16 ‘‘18 U.S.C. § 1951—Interference with

17 commerce by threats or violence (RICO).

18 ‘‘18 U.S.C. § 1961 et seq.—Racketeer In19 fluenced and Corrupt Organizations.

20 ‘‘18 U.S.C. § 2314—Transportation of sto21 len goods, securities, moneys.

22 ‘‘18 U.S.C. § 2315—Receiving stolen

23 goods.

24 ‘‘(15) Several key documents subpoenaed by the

25 committee on July 25, 1991, were reported missing
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1 or lost by the Department. While Justice officials

2 have indicated that this involves only a limited num3 ber of documents, it was impossible to ascertain how

4 many documents or files were missing because the

5 Department did not have a complete index of the

6 INSLAW materials. The Department failed to con7 duct a formal investigation to determine whether the

8 subpoenaed documents were stolen or illegally de9 stroyed.’’ Investigative Report by the Committee on

10 the Judiciary, THE INSLAW AFFAIR, Report

11 102–857, pp. 110–113.

12 SEC. 2. SATISFACTION OF CLAIMS AGAINST THE UNITED

13 STATES.

14 The Secretary of the Treasury shall pay, out of

15 money in the Treasury not otherwise appropriated:

16 (1) To INSLAW, INC. (INSLAW) an amount

17 of money in compensation for any and all direct,

18 consequential, incidental and/or punitive damages

19 sustained by INSLAW as a result of a negligent or

20 wrongful act, or acts, or failure to act, on the part

21 of the United States Department of Justice (DOJ),

22 its officials, officers, employees, and agents, and

23 other United States agencies, their officials, officers,

24 employees and agents. The negligent or wrongful

25 acts of the aforestated agencies of the United States
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1 government arise out of complex issues of fact, and

2 involve willful, wanton and malicious breaches of

3 contract, tortious activity, deceit, trickery, conver4 sion, copyright and trademark infringement, abuse

5 of software licensing agreements, and other such un6 justified, egregious and fraudulent conduct of offi7 cials and agents of the United States government,

8 relating to the unauthorized use and/or dissemina9 tion and/or conversion, theft or other misappropria10 tion, of computer software proprietary to INSLAW,

11 including INSLAW’s PROMIS software and

12 INSLAW’s Enhanced PROMIS software, and/or a

13 conspiracy to sell, transfer and distribute INSLAW’s

14 Enhanced PROMIS software to other Federal agen15 cies and/or foreign governments and/or agencies, all

16 to the damage of INSLAW in the loss of its soft17 ware, service contracts, loss or termination of busi18 ness relationships with other companies or entities,

19 and the loss of the profits thereof, and the preven20 tion of growth that INSLAW would otherwise have

21 had, all to the unjust enrichment of the DOJ, other

22 government agencies, and officials, officers, agents

23 and employees of such agencies, as well as other per24 sons, entities and conspirators.
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1 (2) To William A. Hamilton and Nancy Hamil2 ton, individually, any and all direct, consequential,

3 incidental and/or punitive damages, and/or all rea4 sonable legal expenses and other costs to the Hamil5 tons, not directly related to the contract between

6 INSLAW and DOJ, but caused by the actions taken

7 by DOJ, its officials, officers, employees and agents

8 to harm INSLAW or its officers and/or employees.

9 SEC. 3. WAIVER OF SOVEREIGN IMMUNITY AND DEFENSES.

10 (a) Any available defense of sovereign immunity of

11 the United States, the DOJ, any other United States gov12 ernment agency, or any United States government official,

13 officer, agent or employee is specifically waived as to the

14 respective claims of INSLAW, William A. Hamilton and

15 Nancy Hamilton, and the amounts payable to them under

16 section 2 above.

17 (b) INSLAW, INC., William A. Hamilton and Nancy

18 Hamilton shall each be entitled to payment of said claims

19 notwithstanding any defense pertaining to lack of personal

20 and/or subject matter jurisdiction, statutes of limitation,

21 statutes of repose, statute of frauds, laches, stare decisis,

22 waiver, estoppel, including, but not limited to, judicial es23 toppel, equitable estoppel, collateral estoppel, estoppel by

24 judgment and promissory estoppel, res judicata, failure to

25 exhaust all legal remedies, administrative or otherwise,
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1 payment, accord and satisfaction, release, pendency of

2 claims in others courts, tribunals or departments, or any

3 other equitable or legal defense that might have otherwise

4 been available to the United States, the Department of

5 Justice, or any other United States agencies, and their

6 respective officials, officers, employees, agents and/or con7 spirators, all such defenses being hereby waived with re8 spect to the claims of INSLAW, and/or William A. Hamil9 ton and Nancy Hamilton, individually, and the amounts

10 payable under section 2.

11 (c) The amounts payable under section 2 shall be in

12 satisfaction of all claims, legal or equitable, by INSLAW,

13 William A. Hamilton and Nancy Hamilton, individually,

14 against the United States of America, any agency thereof,

15 or its officials, officers, employees, agents and/or conspira16 tors, and shall include interest accrued on all damages,

17 attorneys’ fees and expenses.

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