Chapter Four  The Criminal Case...

In early December, 1978 I was subpoenaed to appear before the Grand Jury that had indicted Duncan, Starr and the EVP.   My attorney, Bud Fensterwald, Para-legal Marc Feldman and I headed to North Carolina.   Before leaving, I typed up two 3 X 5 cards with the fifth amendment statement on them (for you foreigners, the fifth amendment of the U.S. Constitution gives a citizen the right NOT to answer a question). Before going into One of the two actual cardsthe Grand Jury room Fensterward instructed me to give them my name, rank and serial number and then "read the card." I must have read the first card 60-70 times before I ceremoniously set it aside and pulled out the second card and started reading it. Of course it had on it the exact statement and one of the Grand Juror's joked that the first card must have run out of gas or something. In total, I must have taken the fifth 150-175 times. Periodically, whenever I got tired, I excused myself to converse with my attorney... i.e. get a breather.. and when I reentered the room Fensterwald would say "read the card."

Immediately after I was dismissed from the Grand Jury, Marc Feldman grabbed me by the arm and took me to an empty room. He asked me to tell him exactly what I had seen in the Grand Jury room. I started to my immediate right with the U.S. Attorney, then the stenographer, then the Grand Jurors... one by one... and finally the jury foreman's table at which sat two men. One was a gray haired fellow and the other FBI Agent XX. Feldman gasped and told me to go over that part again... which I did. A couple of days later I received a copy of a motion from Fensterwald to the Court asking that the charges be dropped due to improprieties by the FBI. This was a serious issue. It is a violation of federal law for an investigating agent to be present when a witness is questioned.

The Court requested a hearing. It stood to reason that I would take the stand and say he was there and he, knowing he had violated federal law and been caught, would most certainly say he was not. The only way to solve that dilemma was to put a couple of Grand Jurors on the stand under oath and ask what they saw. To help me decide which of the Grand Jurors we would use the court was forced to give me a list of the names and addresses of the Grand Jurors... and here are twenty one of them. You will hear more about these people later.

BX 8694
DURHAM, NC 27707


EFLAND, NC 27243


P.O. BOX 471




RT 2 BOX 38

RT 3 BOX 385-A


DURHAM, NC 27704



1617 E 23RD STREET

RT. 4 BOX 1179

RT 2 BOX153





I had transferred these names from my master list to four names and addresses per mailing label group. I have since misplaced my master list and one group of three names and addresses. As soon as I find either, those names will be added to the above list.  


I took the stand and, under oath, made my statement that the FBI agent was indeed there. The FBI agent, under oath, said he was not. He should have stopped right there but his ego simply would not let him. The FBI agent, not the court, asked Fensterwald if he had seen him go in and out of the Grand Jury room. Fensterwalds' answer was "no." Again, the FBI agent couldn't shut up. He commented that he was in the library while I was before the Grand Jury. The judge should have immediately responded... Hey, wait a second Agent XX. You know as well as I that directly behind the jury foreman's desk is a door that opens into a covered corridor which ends at the library! Maybe we SHOULD hear from some of those Grand Jurors! Instead, the judge turned to me and said "Mr. Kaiser, you're mistaken, honest or otherwise." Whack went the gavel and that was that. At least my team now knew what kind of trash we were up against.

My team later learned that the two FBI agents had previously appeared before another Grand Jury that refused to indict me as well as a Magistrate who refused to indict me. This was their third try and they had to do it in a dirty underhanded way!

Once back in Washington, Fensterwald received notice of the arraignment date. On that date my team packed up our briefs and belongings and headed back to North Carolina. The U S Attorney sent word that he wanted to see us in his office. When we arrived he was sitting behind his desk. We chatted with him briefly about nothings. Shortly, FBI Agent XX entered the office. The U. S. Attorney got up from his desk and joined us at the front of the desk. The FBI Agent then took the seat behind the desk and now HE became the prosecuting attorney. He indicated that we surely had sufficient time to study the indictment and that the only logical response was a guilty plea.   WRONG!   I said NOTHING but Fensterwald thanked him and we left. 

Had the agent made even a cursory review of my FBI file he would have known what an idiotic suggestion it was. If I had entered a guilty plea I would have lost any security clearances I had at the time, I would have lost my charter membership in the International Association of Bomb Technicians (IABTI), I would have lost my passport and ability to travel freely, I would have lost my "plank" (a Navy honor started in the 1700's) at the Navy Explosive Ordnance School in Indian Head, Maryland where I had taught on a regular basis, I would have lost my amateur radio license that I had held for 25 years and I would have lost my dignity and self respect. The FBI agent wasn't the only one who wanted to throw me in the slammer.  My wife suggested I plead to the lesser charge, spend a couple of years in prison and then they'd forget about me.  SUUURE!!

When we appeared for arraignment there were 23 cases on the docket including mine and, as expected, I was last on the list.  22 of the defendants, all men, all white and all roughly the same age, all had NO counsel present!   My team and I stood at the rear of the court room.   I can't begin to express my emotions when all 22 of the other defendants, without counsel, entered a plea of "guilty."  Something about what was gong on was more than "fishy."   Fensterwald winked at me.  From experience he knew that on numerous occasions when people were not represented by council the court would watch the defendant they wanted to screw and wait until he or she went to the bathroom or whatever. The court would then immediately shift the defendants position on the docket and when they did not immediately appear when called... site them for contempt of court. Obviously, I was covered.   My punishment was that my "Legal money meter"... at $400.00 per hour.. was kept running for an entire day. Once my "not guilty" plea was entered we headed back to Washington. I did however have to leave my passport behind.   The FBI must have convinced the court that I was a "flight risk" but what they didn't realize was they had taken on a "fight risk!"

Back in Washington, Fensterwald turned me over to the FBI for my "official" arrest. The FBI tried to extract new information from me to no avail. One of the agents made a technical error that I felt duty bound to correct since it could be a major issue later on. He asked about the 15/32 inch per second recorders I had sold Northwestern Bank and I told him they were 15/16 inch per second recorders similar to the ones I had sold the FBI in the past. I was then put in handcuffs and leg irons and taken to the bowels of the D.C. jail and locked in a cell. Fensterwald was busy upstairs before a judge trying to arrange bail for me.   I sat in the cell a looong time.  Then I was summoned before a woman judge who reviewed the case and wondered why I was there in the first place. She released my on my personal recognizance.   Back to the cell I went.  When my release order came down to the jailer he looked at it and, with the eraser on his pencil, pushed it to the far corner of his desk.   Occasionally he would pull it towards him, again using the eraser on his pencil, and then push it back.   Finally, without a word, he unlocked the cell and pointed to the stairway.

One day I mentioned to my friend Capt. Jim Regan (now deceased) of the Pennsylvania State Police that the FBI had handcuffed me with my palms apart. He told me it was an old intimidation trick used on "hardened criminals." Didn't work.

Next came the task of choosing a jury pool. We felt at least 250 people would have to be interviewed in order to find the required number of jurors and alternates. My team (including me) and the U.S. Attorney met in the judges chamber. The FBI Agent knew enough by now NOT to be there. One by one the potential jurors were asked by the judge "Do you have any predisposition as to the guilt or innocence of Mr. Kaiser?" Well over 200 said "Based on the pretrial publicity in this case I would have to find him guilty." Obviously, that process took a big chunk of very expensive time. Finally we had our 12 jurors and a few alternates.

Trial date was now approaching and there was a lot of preparatory work to do. My job was to contact the character witnesses my team had chosen and give them an approximate appearance date.   My law enforcement friends would have to be subpoenaed because that was the only way I could get them out of their offices.

The lawyers spent the first couple of days sparring with each other. At the right table were the U.S. Attorney and FBI Agent XX. At the left table was my team. Finally, the U.S Attorney brought on their FBI "technical expert" to describe how he found my microphone and amplifier. He tried his damndest to make it sound like a sophisticated device but he wasn't very convincing. He told the jury that the device used "crossed pairs" of telephone wires... a technique used only by the best of eavesdroppers. I blushed and was deeply humbled. I thought to myself THE FBI THINKS I'M THE BEST OF EAVESDROPPERS! WOW! In telephone company lingo a pair is a crossed color match i.e. yellow-red and red-yellow. I actually never gave it a thought. The closet where the wires started was dark and I grabbed the brightest wires of the bunch... yellow. I then searched through the yellow wires until I found the standard single line telephone colors... red and green. That meant I used yellow-red and yellow-green... a single wire from two pairs. So what if the light was bad... crossed pairs... phooey!

After nearly an entire day the FBI expert finally finished. Now it was our turn to cross examine him. In what I viewed as the greatest courtroom theatrics I have ever seen Fensterwald slowly rose, adjusted and buttoned his jacket, adjusted the collar on his jacket and made sure his sleeves were the same length and said... Agent XX, you have been very kind in describing to the jury how you found the device... would you please tell the jury where you got the equipment to do your job? Agent XX pointed at me and responded... from the defendant over there, Marty, I guess. Fensterward thanked him... said "no further questions your honor" and ceremoniously sat down. You can imagine the headlines the next day... FBI USES KAISER EQUIPMENT TO FIND KAISER BUG!! Wellll.

After the FBI technical agent finished the prosecution put on the stand a variety of witnesses that included the EVP, Northwestern pilot XX and just about everybody with the bank that had touched my invoice. It had never been opened. When they were asked how they knew it was an invoice most responded "experience." My invoice was one of those fold up kind where 1/2 inch of the sides are folded in first and then the rest is folded into thirds. One of the witnesses revealed the amount of the invoice even though it had never been opened. He told the court you could squeeze the top and bottom of the envelope which would then open it enough so you could read what was inside! To this day that invoice has never been paid. In any event, Fensterwald pried a lot of valuable information out of the prosecutions witnesses.

Next, it was my turn to take the stand. I had with me all of the equipment and parts I had originally taken to Northwestern bank. I talked through and did what I did to build the device. Although my hands shook a bit I got it built. The device was then given to the prosecution and the FBI tech expert. As I left the stand I started to walk towards the prosecution table but Fensterwald shook his head NO and I never got anywhere near it.

He put my secretary on the stand and she told of my day to day operations and that there was no secrecy involved when she typed the invoice for Northwestern.

Next we put on a Vice-President from Knowles Electronics, the manufacturer of the microphone, who told the court that Knowles ships tens of thousands of their microphones each year and that none are "primarily designed for the interception of oral communications", a key component of one of the charges against me.  I later learned from Dr. Knowles biography that he was concerned the FBI might restrict sales of his products and that fact was described in his biography NOW HEAR THIS ISBN 0-9665051-2-3.

" "Perhaps the most notorious case of an "other" use of KE equipment was that of Martin Kaiser, dubbed by some the "Michelangelo of Electronics" because of his uncanny ability to create a listening gadget with juiced-up wires and just about anything.  Whenever he could, Kaiser used only Knowles equipment because he thought it was "simply the best for the bugging business."  During the 1960s and '70s, he did up to $200,000 worth of such business annually with government agencies. For many years Kaiser's remarkable and tiny surveillance devices were especially sought after by the FBI, but then, in what he called the "swamp of the post-Hoover FBI" Kaiser's relationship with the government gumshoes went awry.  As reported by Newsweek in December 1975 Kaiser went before Congress to testify that FBI agents were buying his equipment and then cooking the books to show "U.S. Recording " as the supplier, at a thirty percent mark-up.  Kaiser was respected for his uncompromising honesty, and by the time his charges had been fully investigated (according to a later Justice Department report) the General Accounting Office found that agents had indeed routed $24 million through "U.S. Recording" personally pocketing some $7.5 million of it. Even before the GAO's findings were reported, however, Kaiser ceased doing business with the FBI.

In 1977 Kaiser was indicted in Winston-Salem, North Carolina on trumped-up charges that he had bugged the FBI and illegally transported electronic equipment across state lines.  In fact, Kaiser had been hired by a bank in Greensboro simply to bug an office.  Later, when FBI agents investigated the bank and used the office that had bugged by Kaiser, they seized the opportunity to file charges against him. Before proceedings in the trial of the United States of America vs Martin L. Kaiser began in February 1978, Kaiser filed a pre-trial affidavit that the FBI was seeking revenge against him.

Among the several expert witnesses called upon to testify on behalf of the defendant during the trial was Knowles Electronics marketing manager Harry F. Waller Jr..  Waller confirmed that Kaiser was a long standing customer and user of Knowles products.  He also verified that all but two of the subminiature microphones brought into evidence were standard Knowles products used mostly, but not exclusively, in hearing aids.  Waller cited the various other applications - in headsets for telephone operators and pilots, walkie-talkies for policemen and firemen, acoustic monitoring for medical purposes, and bomb detection - of the exhibited microphone models, several hundred thousand of each of which Knowles produced annually.  Fearful that a verdict might be rendered that would somehow inhibit the sale of his products across state lines, Hugh instructed his legal counsel to stay on top of the case. But after just one week of proceedings, the jury found Kaiser not guilty, and the nasty affair had no lasting effect on Knowles sales or reputation.""

Next came time for my character witnesses. With the exception of a few non-law enforcement witness all of my law enforcemen witness had not arrived. I called a few only to learn that they had not received their subpoena and could not come until they did. A subpoena is a normal requirement in law enforcement circles. Fensterwald rushed to the clerks office only to learn that the clerk had "forgotten" to send them out. Suuure! The clerk was a retired FBI agent. That kept the money meter running for a couple of days until all witnesses were in the courtroom.

      Here is a list of my character witnesses.

MSgt Mike Lizak (deceased)  Army EOD - Holder of Bronze Star and Purple Heart
Capt Gil Karner (deceased) Baltimore City Bomb Squad
Capt James Regan (deceased) Pennsylvania State Police Intelligence
Capt XX U S Capitol Police
Lt XX Baltimore County Homicide
Lt XX Baltimore County Bomb Squad
XX Electronic Engineer

The prosecuting attorney savagely attacked each character witness demanding to know why they would associate with a slime ball like me. They accurately relayed their past experience with me which was outstanding. I later spoke with Captain Regan about the disrespect the prosecuting attorney had shown and he told me it was part of the game and happens to him all the time. That didn't make it right.

Just before we got to the CIA agents turn, the doors of the courtroom crashed open and in rushed three men dressed in grey suits, pointy toed shoes and carrying black attache cases. Without saying a word they marched straight into the judges chambers. The judge whacked his gavel and said "chambers gentlemen." With that Fensterwald, Feldman, the prosecuting attorney AND the FBI agent (the very agent who several months earlier asked for and received permission to sue me civilly after he was done beating me up in criminal court) went into the judges chambers.


Fensterwald told me that while in the room, each side had to prepare a list of twenty questions that would be taken to CIA headquarters by the guys with the pointy toed shoes and personally approved by Director Stamfield Turner. A day went by before the guys with the pointy toed shoes returned with a list of ten approved questions for each side.

NOT GUILTY, NOT GUILTY AND NOT GULTY!It was my turn first so we put the CIA agent on the stand and asked him our ten questions and got the ten prearranged answers we expected. The agent was then turned over to the prosecuting attorney who arose and began tearing up the list. The judge whacked his gavel and insisted all return to his chamber.  When they came back out, the prosecuting attorney said "no further questions."  Talk about arrogance!

The case eventually went to the jury and I was found not guilty.  Fensterwald and I went into the hallway tostretch our legs just as the jury filed out of the jury room. They walked in single file with a look of terror and disbelief on their faces. They were equidistance apart looking at the nape of the neck of the person in front.  Fensterwald nudged me and said "Thank them." As each passed by I said "Thank you" and NONE turned to acknowledge my thanks. That told me that most likely the pointy shoe guys were in the jury room giving the jury some ridiculous story about how I was really guilty but in the interest of national security they would have to find me not guilty.

Later, when Fensterwald and I were giving a statement to a reporter from the Winston Salem Journal FBI agent XX walked by. The reporter turned to him and asked what his plans were now that I had been found innocent. The FBI agent responded "Mr. Kaiser is NOT innocent. He was found not guilty only of the three charges brought against him."

Later I made a statement to Fensterwald that I was glad of the outcome because it set a precedence for others that would follow me. Fensterwald said "WRONG!" He told me that the ONLY way to set a precedence is to be found GUILTY and then have the case overturned on appeal. So there you have it folks. Once the legal system entraps you, you can't get out without the legal system.

Tuesday, February 21, 1978

Jury May Get Case Today, Is Kaiser Object of FBI Vendetta?

Twelve jurors probably will begin deliberations today to decide whether Martin L. Kaiser is guilty of conspiracy and illegally bugging FBI agents while they investigated Northwestern Bank last year.

One thing the jury must decide is whether the FBI is carrying out a vendetta against Kaiser, one of the country's foremost wiretap and bugging experts.

Kaiser, a manufacturer of surveillance devices from Maryland, was once a major supplier of the FBI's surveillance equipment But his dealings with the FBI stopped when he publicly identified an FBI front company used to buy his products and resell them to government agencies at substantially higher prices. Today, Kaiser no longer works with the FBI, but his clients include the CIA, the Army and Air Force, several foreign countries and more than 200 police departments.

Martin Kaiser is still one of the most respected makers of bugging equipment in the world - among his character references is the head of the CIA's procurement division. Kaiser still supplies the ... with a great deal of surveillance gear' and he still holds an agency rating of secret.

But Kaiser says that the FBI wants revenge on him. He alleges that the FBI seeks revenge because of his testimony before the presidentially appointed National Wiretap Commission and the House Select Committee on Intelligence in 1975. In his testimony before the panels Kaiser revealed links between the FBI and U.S. Recording Co., an electronic equipment purchasing company.

Kaiser told the committee that the recording company was actually an FBI front - an apparently legitimate private business. Which was in fact operated by high ranking FBI officials. Kaiser had done a considerable amount of business with the FBI, he said, but his business began to suffer greatly after he was instructed in 1969 to sell his equipment to U.S. Recording instead of directly to the FBI.

Kaiser testified that he first assured that the procedure was merely a security measure, - but he later discovered that the electronic devices he sold to U.S. Recording were being duplicated and resold at substantial markups.

Kaiser had sold the FBI many surveillance devices - among them the bug detection kit used to find the listening devices Kaiser is charged with installing at Northwestern's headquarters in Wilkesboro. After his testimony an investigation by the General Accounting Office revealed that the FBI front company had marked up the prices of Kaiser's gear from 12 percent to 280 percent.

Kaiser testified that the FBI was not the only group buying his products through U.S. Recording. In addition to federal agencies, Kaiser told the congressional committee foreign governments, including Canada and Iran bought the marked-up goods.

Kaiser now says that most - of his federal contracts were severed after he brought the front company to public attention. An affidavit Kaiser filed in federal court claims that his sales plummeted from $200,000 annually before his testimony to $450 afterward.

His allegations of a vendetta go beyond the U.S. Recording Co. payment scheme, though. Kaiser said that Thomas J. Brereton, the FBI agent in charge of the Northwestern investigation illegally attended grand jury proceedings while Kaiser was testifying.

Kaiser's allegations resulted in a special hearing called by Judge Hiram H. Ward in U.S. Middle District Court here last month. Ward ruled that Brereton had not improperly attended the grand jury hearings and that "a mistake had been made, honest or otherwise."

Brereton testified that he had been in the U S. attorneys law library during Kaiser's grand jury appearance.

Friction between Kaiser and Brereton seemed to continue throughout the seven days of testimony in the bugging trial. Kaiser's attorneys repeatedly asked Ward to admonish Brereton for speaking with Assistant U.S. Attorney Benjamin White during cross examination.

Brereton consulted with White before many questions were put to defense witnesses, and Kaiser's attorneys objected that the jury could overhear Brereton's comment's. Several times, Ward instructed Brereton to lower his voice when he spoke with the prosecutor.

A part of Kaiser's affidavit on the FBI vendetta matter said that two special FBI agents visited him in December 1975 to interview him on his U S. Recording Co. testimony. Kaiser said the two "literally held me for several hours hostage... to elicit a statement which repudiated my earlier congressional testimony and absolved the Bureau and U.S. Recording Co. of their wrongdoing."

The U.S. attorney's office filed a motion in federal court to deny Kaiser's allegations of a vendetta.

Kaiser's trial will continue at 9:30 a.m. today, with final arguments and instructions to the jury scheduled.

Winston-Salem Journal
Wednesday - February 22, 1978

Martin L. Kaiser has been found not guilty of bugging FBI agents, conspiracy and illegal transporting listening devices.

The verdict was returned by a jury of eight women and four men after 2.5 hours of deliberation yesterday afternoon in U.S. Federal District Court here.

Kaiser, an electronic surveillance expert from Cockeysville, MD, had been charged with helping Edwin Duncan Jr. and Gwen E. Bowers bug FBI agents who were investigating Northwestern Bank last year. Duncan, former bank board chairman, and Bowers, a former bank vice president, pleaded guilty to similar charges last November.

The bugging took place between April and July 1977 in an office in the bank's headquarters in Wilkesboro. "In all honesty," Kaiser said after the verdict was announced, "it's what we expected. Needless to say I'm satisfied."

Throughout the eight day trial Kaiser admitted installing bugging equipment in a bank office used by the FBI agents but denied knowing that Duncan and Bowers would use the equipment illegally. The government case contended that Kaiser was fully aware that bank employees would use the bugging system to illegally monitor the FBI investigation.

"What this case is really about is human rights - the right to human privacy," said Assistant U.S. attorney Benjamin White in his final argument yesterday morning. "There is nothing illegal about him installing these devices - many attorneys have them in their offices, many businessmen have them in their offices," said John Morrow, one of Kaiser's attorneys.

Much of Kaiser's trial was marked by controversy over his past business dealings with the FBI. Kaiser, who is a major manufacturer of surveillance equipment for government agencies, filed a pretrial affidavit protesting that the FBI was seeking revenge against him.

Kaiser said the FBI wanted vengeance because of testimony he gave before congressional panels on surveillance matters. He had identified an FBI front company that bought his equipment and resold it to the FBI and other government agencies at marked-up prices.

Most of the defense witnesses were from law enforcement agencies, and most testified that Kaiser is reputable and trustworthy. Kaiser testified that at he Sells bugging equipment and bomb detection gear to more than 200 law enforcement groups. His clients, he said, include the ..., the Army and Air Force and several foreign governments.

In his closing remarks, White questioned the nature of Kaiser's relations with his clients. After saying that Kaiser had once had the trust of law enforcement groups. White said, "Mr. Kaiser sold that trust, ladies and gentlemen, for $3,500 (Kaisers fee - for the Northwestern Bank bugging)."

Shortly after the end of the trial, one of Kaiser's attorneys told reporters that Northwestern has never paid Kaiser's fee. "We hope we don't have to sue them to get it - they're a big bank," said Bernard Fensterwald, a Washington lawyer who once defended James McCord, one of the Watergate burglars.

Kaiser said he plans to visit his daughter in Florida and then return to work. "I've really been out of business since July 29 (the date of his indictment)," he said. "I'm really looking forward to getting back to it."

Shortly after I returned to Cockeysville, MD I sent the following letter to all of the Grand Jurors.

Countersurveillance · Bomb Detection · Surveillance Electronics

March 29, 1978

[Space for Grand Juror's address]

Dear [Grand Juror's name]:

Franklin Roosevelt said, "Events don't just happen, they're made to happen."  Recently,  you were part of an event that was made to happen.

Your name was provided to me by the Clerk of the Court in Greensboro as having been a member of the Grand Jury which returned a multi count indictment against me. Enclosed you will find an affidavit made by me in response to those charges. Also enclosed are several newspaper articles which directly relate to this affidavit and articles which cover the period of trial. You will note that I was acquitted on all these charges. Not shown in these articles or in the affidavit is the fact that I am a one man company with a part time secretary. Not shown is the fact that my defense cost $72,000.00. Not shown is the fact that this money represents more than the total effort for thirteen years of business. Not shown and not included in the above figure are the six months that I was basically out of business preparing a defense against these charges.

I trust you will find this material of interest and I invite your comments.


Martin L. Kaiser


P. O. BOX 171 · COCKEYSVILLE · MARYLAND 21030  (301) 252-8810

In early 1980 the British Broadcasting Company (BBC) contacted me and indicated they were doing a special about an individual I knew well. It was to be titled "Confessions of a dangerous man." I didn't realize what a pivital role I played in the movie but it was fascinating to do and see. My friend is still out there in the world somewhere and I may expand on this story at a later time. The satisfaction I got out of it was being referred to as "Kaiser is a master craft man with uncompromising honesty." The movie was banned from showing in the United States.

Chapter One     The Beginning...
Side Bar A          Bomb Story
Chapter Two     The U S Recording Scandal...
Chapter Three  Bugging the FBI...
Chapter Five     The Civil Case...
Chapter Six        Repercussions...
Chapter Seven My personal observations...

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