Chapter Five  The Civil Case...

Wasn't THIS an interesting turn of events.

The Daily Telegraph
London, England
Tuesday, January 2, 1979

Bugged FBI Men with Hemorrhoids Sue for (GBP)11 Million (US$22,000,000)

A telephone tapping expert who supplied the Federal Bureau of Investigation with electronic eavesdropping devices is being sued for alleged "bugging of two FBI agents." The agents, Thomas Brereton and Zachary Lowe, are claiming eleven million pounds compensation They say their right as private citizens were "grossly violated" and they are suing Mr. Martin Kaiser and a bank in North Carolina.

They were investigating the bank's affairs after allegations that an executive was misusing funds, and according to Mr. Kaiser a vice president of the bank sought his assistance, wanting recorders installed to tape conversations and interviews in the bank involving the officers.

Devices were provided, Mr. Kaiser said, on the understanding that the equipment would be used legally with the consent of the agents.

The FBI men have now named him together with the bank in a lawsuit filed at Greensboro, North Carolina. In a court deposition Mr. Brereton tells of finding five bugging devices, including special transmitters and amplifiers, in the building.

He recalled: "That night there was tremendous anger and frustration". He remembered one of the bank's executives sitting "smirking at me when he pulled all the mikes out of the wall. He went on: "You wouldn't believe the anger that took place in here that night when I found out... you go home and all you do is think about it." "You know you've been bugged... It keeps playing on your mind".

As a result he was humiliated and embarrassed as a special agent and suffered, he said, increased hypertension and cysts in his eyes.

His colleague said in his deposition that after the incident his hemorrhoid condition worsened.


Fensterwald put forward an immediate response of abuse of power. His key motion was fought tooth and nail by the Government and the FBI but, in the end, the FBI was forced to give me ALL of my FBI files and the Government ALL of the Grand Jury testimony.

AGAIN, SO MUCH FOR GRAND JURY SECRECY!!

My team and I traveled to North Carolina to receive and review the documents/files. To my amazement, right on top of the stack were ALL 24 OF MY ORIGINAL LETTERS TO THE GRAND JURORS!  Once the shock of seeing those letters dissipated my thoughts turned to anger. I thought... not ONE of those Grand Jurors had the guts to say to the FBI... Hey look, this letter was sent to ME and it is mine to keep. The FBI must have frightened them with a threat of criminal prosecution if they did not turn over the letters. I later learned that the U.S. Attorney did indeed try to indict me for tampering with a Grand Jury but, since my Grand Jury had long since been dismissed, that was a bunch of crap.

We also uncovered the fact that the two FBI agents asked for and received permission to sue me civilly THREE MONTHS before seeking my indictment. There was absolutely NO mention in the FBI files of CONFLICT OF INTEREST and absolutely NO mention in the thousands of pages of Grand Jury testimony covering all related defendants that the FBI agents intended to sue the defendants for a huge sum of money once convictions were obtained.

To me, this was absolutely horrible! The FBI destroyed my business after the U.S. Recording fiasco and they now destroy the Constitution of the United States to further punish me. Where was this going to STOP!   That is when I decided that the price of freedom is not "free" and I was going to do my best to expose the FBI as the bunch of trash that they were.

I also immediately noticed that the FBI files contained many, many green document sign out slips. Actually they approximated roughly one fifth or 20% of the total file. They were signed out by none other than one of the very FBI agents who was suing me for $22,000,000.00! In the end, we were NEVER able to recover those files. So THIS is the FBIs definition of "fair play."

My team now plowed into the thousands of pages of Grand Jury testimony covering not only my case but those of Duncan, Starr, the EVP and present and past employees of Northwestern Bank. We quickly learned that the Grand Jury was being run by FBI Agent XX and not the U.S. Attorney. Many of the statements made by the FBI Agent were patently untrue. For example, he presented my countermeasure equipment catalog with the comment "Here is Mr. Kaiser's catalog of illegal equipment." Absolutely NOTHING in that catalog was "illegal" and I could sell those products to whoever I wished... and I did; to Northwestern Bank.

The Sentinel
Winston-Salem, NC
Saturday, February 5, 1983

Defendants Claim Agents Abused Process

GREENSBORO, NC - Two FBI agents abused the criminal process to strengthen their position in a $22 million lawsuit stemming from the 1977 investigation and bugging at Northwestern Bank lawyers for defendants in the suit charged in federal court yesterday.

One defendant in the civil case also accused the FBI of tampering with evidence. In an affidavit, defendant Martin L. Kaiser, an Electronics expert from Cockeysville, MD., said bureau agents or employees altered two tape recordings and switched tape recorders. He also claimed that one agent removed documents from FBI files which have never been recovered.

The allegations were made during three hours of argument In U.S. Middle District Court Federal Judge Frank W. Bullock Jr. held a hearing on numerous motions pending in the case which began almost five years ago.

In July 1978, FBI agents Thomas J. Brereton and Zachary T. Lowe filed suit alleging that their civil rights were violated and their privacy was invaded when their conversations were electronically recorded during their investigation of Northwestern Bank from April to July 1977. Brereton and Lowe charged that Edwin Duncan Jr., then Northwestern Bank chairman, and Gwen E. Bowers, then bank vice president, conspired to intercept the agents oral and telephone communications.

They also claimed that Kaiser agreed to help Duncan and Bowers by possessing, selling, transporting, and installing electronic surveillance equipment or bugs to help them accomplish their sinister conspiratorial scheme." Northwestern Bank and Northwestern Financial Corp., the bank's holding company, also are defendants in the lawsuit.

The agents discovered they were being recorded while they were investigating financial irregularities at the North Wilkesboro-based bank. Duncan was convicted of misapplying bank funds and recording conversations of IRS agents who were reviewing bank records in October 1977, and in November 1977, he pleaded guilty to the bugging conspiracy against the FBI.

Bowers pleaded guilty to the conspiracy to record the FBI agents' conversations and to the actual bugging. However, Kaiser pleaded not guilty to charges related to the bugging and he was acquitted in federal court in Winston-Salem in February 1978.

Since Brereton and Lowe's suit was filed, it has become one of the most complicated civil cases ever in the U.S. Middle District. Three Greensboro attorneys - Bynum N. Hunter, Michael R. Abel, and Ben F. Tennille, have been released as defendants, and the remaining defendants and the plaintiffs have filed pages and pages of motions' affidavits and cross claims. There also is a similar case filed by former FBI agent Donald G. Wilson for $5.5 million in damages from Duncan, Bowers, Northwestern Bank and Northwestern Financial.

Lawyers for Duncan and Kaiser yesterday said Brereton and Lowe used the criminal investigation of their clients to prepare for their multi-million-dollar civil suit. "They were given access and power of the federal government they should not have been given," Stephen Spring, a Louisiana attorney representing Kaiser said. Duncan's attorney, Ted G. West, claimed that the former bank chairman Agreed to plead guilty to the bugging conspiracy during a meeting with Brereton and a former U.S. attorney.

"We contend that Mr. Brereton and Mr. Lowe abused the process," West said. "That's what it boils down to in instigating a guilty plea from Mr. Duncan so they could have something to hang their hat on in this civil case."

He also said, "This court must and should look closely at a situation where investigators of the U.S. government pursue their investigation knowing during the entire course of the investigation that they have a civil suit in mind".

But Mike Bailey, one of Brereton's and Lowe's lawyers, said the agents were only fulfilling their obligations by investigating and helping prosecute the cases.

Kaiser filed a $720,000 counterclaim against Brereton and Lowe in 1978 and last year he asked to add the FBI to his suit. He is seeking $10.7 million from the FBI. Kaiser claimed the bureau "actually assisted and enabled... Brereton and Lowe to gain access to Information and records while on bureau time and through bureau resources of information directly bearing to the outcome of the civil action."

Duncan also has asked the court to allow him to add the FBI, a former U. S. attorney and a former assistant U.S. attorney to his cross-claim against Brereton and Lowe. However, Bullock questioned whether the statutory limitation on adding to the cross-claims has run out.

Kaiser made other allegations against the FBI in his affidavit. He accused the bureau of fraudulently concealing and manufacturing evidence.

The Panasonic tape recorder presented at his criminal trial played at one-third normal speed, Kaiser said, but he said the recorder being used as evidence in the civil case operated at one-fourth normal speed. He also said tests showed that two tape recordings of Brereton and Lowe were not made on the tape recorder provided to Northwestern Bank in 1977 and that the two tapes were made on two different recorders, he said.

Kaiser said, "It is my belief based upon a review of tests that these modifications or manufacturing of evidence was performed by agents and/or employees of the Federal Bureau of Investigation as part of a conspiracy wherein the FBI acted in concert with plaintiffs Brereton and Lowe by attempting to convict me of a crime I did not commit ... and instituting the present civil suit as a retaliatory measure designed to drain me of funds necessarily spent in my defense."

Kaiser further charged that Brereton took documents out of the FBI files and that the bureau claims those papers are lost. He also said Brereton made misrepresentations to a grand jury which led to Kaiser's indictment on charges related to the buggings Brereton did that Kaiser said, so he could use the criminal trial to gather evidence for the civil case.

Duncan and Kaiser have filed motions for summary judgment and have asked for dismissal of the actions against them. Yesterday, attorneys for Northwestern Bank and Northwestern Financial Corp. also argued for summary judgment and dismissal.

"The bank was the one who was losing from this illegal activity" not just the customers, The bank," Richard Vanore, Northwestern attorney, said. "Because (Duncan) benefited is not sufficient to say the bank benefited and should be held responsible for his action."

He also charged that Brereton and Lowe are "seeking monetary damages as the real fruit of their criminal investigation"


It was now time to add the FBI to my lawsuit because of the overwhelming evidence of a massive conspiracy.

The Sentinel
Winston-Salem, NC
Friday April 2, 1982

Bugging Expert Adds FBI To His Suit Against Agents

GREENSBORO, NC - A Maryland electronics expert is asking for more than $10 million in damages from the FBI, claiming that the agency as assisted two of its agents who were planning a lawsuit against him.

Martin L. Kaiser specializes in electronic surveillance (bugging), Countersurveillance and bomb detection equipment says in a document filed in federal court here that agents Thomas J. Brereton and Zachary T. Lowe were contemplating a lawsuit against him while they were involved in prosecuting him on criminal charges.

The FBI "actually assisted and enabled... Brereton and Lowe to gain access to information and records while on bureau time and through bureau resources of information directly bearing to the outcome of their proposed civil action", Kaiser claims.

He says in the document which is an amendment to an earlier counterclaims against the agents, that the FBI's action represents a "malicious motive for the institution and prosecution" of the criminal case against him "in violation of federal statutes which require federal agents with a conflict of interest to excuse themselves from such investigation".

Brereton and Lowe sued Kaiser in U. S. Middle District Court in July 1978, five months after he was found not guilty of charges of bugging them while they were conducting an investigation at Northwestern Bank in Wilkesboro in 1977.

The agents also sued the bank and its former president Edwin Duncan Jr., claiming that their right to privacy was violated by the bugging of the room they were using at the bank head quarters. The agents claim a total of $22 million in damages.

Several months later Kaiser filed a counterclaim against the agents claiming they abused the criminal process against him and asking for $720,000 in damages. The agents responded by denying that they had acted improperly in the criminal investigation and they asked for a dismissal of the counterclaim.

Kaiser's addition to the counterclaims filed this week asks that the United States be brought into the suit to represent the FBI, and he asks for an additional $10.7 million in damages.

U. S. Attorney Kenneth W. McAllister said this morning that "I certainly wouldn't comment on any pending civil actions".

Duncan and the bank have filed motions for dismissal of the agents' suit, and Duncan has asked the court for permission to file his own counterclaim against the government and prosecutors in a 1977 criminal case against him.

Duncan pleaded guilty to charges of conspiring to bug the agents. He spent several months in prison as the result of convictions on other charges stemming from the agents investigation.

No trial dates have been set in the lawsuit, which has become one of the most complex civil cases now pending in the district.


Periodically, my anger would boil over and I would send off a letter or two expressing my displeasure with the treatment I was getting. Here are two of those letters.

MARTIN L. KAISER, INC.
Countersurveillance   Bomb Detection    Surveillance Electronics

9 July 1983

The White House
Washington, D C 20500

Attention: Mr Ronald Reagan, President

My Dear Mr President:

You certainly had no difficulty understanding the seriousness of the potential conflict of interest concerning the Carter briefing books so I am at a loss to understand why you failed to see just as obvious a conflict as outlined to you in my letter of 15 February, 1983.

First, let me state that your response placed me right back in the hands of my enemies and you certainly get no thanks for that.

Let me again cite some of the events that have occurred in my action against some corrupt FBI agents.

During the civil process one of the agent/plaintiffs revealed that they had been given my national security file. Check this out! Here I am fighting a corrupt group of FBI agents blindfolded, my hands tied behind my back, my cards being dealt face up and the bastards, in spite of that tremendous advantage, are dealing themselves from the bottom of the deck. No conflict, eh?

Every step of the way I have had to file subpoena after subpoena (at great expense) to obtain whatever material I needed to proceed with the case. When the FBI agent (the one with the sty in the eye) was pressed for an answer as to how many subpoenas he had issued for material in the case he responded "What do I have to worry...I'm the author.  I know what's in those files...my God, I wrote 80 percent of everything in those files. I've done probably 60 percent of the work, and Mr Lowe (he's the one with the hemorrhoid) the rest of it... I know what's in the files. I wrote them."!!! No conflict of interest, eh?

Bullshit!


Truly,




Martin L Kaiser
President

Encl:

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


MARTIN L. KAISER, INC.
Countersurveillance Bomb Detection Surveillance Electronics

27 July 1983

Federal Bureau of Investigation
Washington, D C 20535

Attention: William Webster, Director


Dear Mr Webster:

It seems ludicrous that I should be sending you a portion of the FBI manual of "Activities and Standards of Conduct" but since everyone else involved in the matter described in the attached article has forgotten about it I thought it best not to take any chances.

We now have a ruling from the Federal Court in North Carolina on my charges and they agree that your agents did indeed abuse both the criminal and civil process while acting under color of federal law. Granted they have the right of appeal but the issues raised fall within regulations covered by the manual of "Activities and Standards of Conduct."

I would like to call your attention to the following sections that I feel were violated by your agents. First, however, let me point out that the page enclosed is the first substantive one in the manual and is titled "Section I" so I must conclude that someone must have thought these issues important.

1-1(1) The agents did not conduct themselves in such a manner that created respect for the Government.

1-1(3)(a) The agents did create the appearance of using public office for private gain.

1-(3)(d) The agents did create the appearance of losing complete independence or impartiality.

1-(3}(f} The agents did conduct themselves in such a manner as to adversely affect my confidence in the integrity of the Government.

The remainder of 1~1(3) concerns conflict of interest and is revealing.

1-2 The agents did engage in dishonest and disgraceful conduct which was prejudicial to the Government.

In view of the incredible expense and loss of business reputation these agents have put me through along with their causing me to loose my confidence in the integrity of the Government I am herewith demanding that they be summarily fired. I'm sure you can find a way to do this without interfering with the civil suit. After all it has been you all along that has said this is a purely private matter.

I shall press all issues raised by this case to conclusion by the court of law but it's up to you whether or not my confidence in government is restored.


Truly,




Martin L Kaiser
President

Encl.

cc: President Reagan
Gerald McDowell

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


Here are the rules of conduct referred to in the above letter.

SECTION 1.   ACTIVITIES AND STANDARDS OF CONDUCT

1-1   INTRODUCTION

Regulations concerning the conduct and activities of employees are published in the Code of Federal Regulations (CFR), Title 28, Section 45.735.  Their source is found generally in Departmental Order 350-65 dated 12-28-65 which provides that employees shall:

(1) Conduct themselves in a manner that creates and maintains respect for the Department of Justice and the U.S. Government. In all their activities, personal and official, they should always be mindful of the high standards of behavior expected of them.

(2) Not give or in any way appear to give favored treatment or advantage to any member of the public, including former employees, who appear before the Department on their own behalf or on behalf of a nongovernmental person.

(3) Avoid any action which might result in, or create the appearance of-

(a) Using public office for private gain
(b) Giving preferential treatment to any person
(d) Losing complete independence or impartiality
(e) Making a Government decision outside official channels; or
(f) Affecting adversely the confidence of the public in the integrity of the Government

Departmental Order 350-65 further provides that an employee shall not have a direct or indirect financial interest that conflicts, or appears to conflict, with his Government duties and responsibilities. Such a conflict exists whenever the performance of the duties of an employee has or appears to have a direct and predictable effect upon a financial interest of such employee or of his spouse, minor child, partner, person, or organization with which he is associated or is negotiating for future employment. A conflict of interest is deemed to exist even though there is no reason to suppose that the employee will in fact resolve the conflict to his own personal advantage rather than to that of the Government.  The order also provides that no Department of Justice employee shall participate personally and substantially as a Government employee, through decision, approval, disapproval, recommendation, the rendering of advice, investigation or otherwise, in a judicial or other proceeding, application, request for a ruling or other determination, contract, claim, in which, to his knowledge, he, his spouse, minor child, partner, organization in which he is serving as officer, director, trustee, partner, or employee, or any person or organization with whom he is negotiating or has any arrangement concerning prospective employment, has a financial interest, unless authorized to do so by the Deputy Attorney General. This prohibition includes such financial interests as ownership of securities of corporations or other entities which may become involved in Bureau investigation.

The prohibited actions include supervisory decisions and recommendations, as well as investigative activities. Any employee receiving an assignment involving any matters in which he has a direct or indirect financial interest as defined in the departmental order shall immediately advise his superior and shall be relieved of such assignment. Should there be a strong reason for requesting the Department's approval for the employee to participate in the assignment, the matter should be submitted to FBIHQ for consideration regarding presentation to the Department. In any event the employee should not participate in such assignment until the Department's authorization has been received. The departmental order specifically exempts from the above prohibition the stock, bond, or policy holdings of an employee in a mutual fund, investment company, bank, or insurance company which owns an interest in an entity involved in the matter provided the fair value of the employee's holding does not exceed one percent of the value of the reported assets of the mutual fund, investment company, or bank.

In furtherance of the above, the Bureau expects its employees to so comport themselves that their activities both on and off duty will not discredit either themselves or the Bureau. Copies of Departmental Order 350-65 are furnished to employees during their indoctrination on entering the Bureau's service. Failure by an employee to follow these regulations will result in appropriate disiplinary action including possible dismissal.  The rules and regulations regarding official and personal conduct which govern the granting of individual access to and use of Bureau crypto materials appear in the COMSEC Custodian Manual (Section II, A, 5, pages 7-7c).

1-2   PERSONAL CONDUCT

Employees should never cause themselves to be mentally or physically unfit for duty. They are not permitted to consume alcoholic beverages during working hours, including that time allotted for meal periods or any period of leave taken if the employee intends to return to work before the termination of working hours. The use of illegal drugs or narcotics or the abuse of any drugs or narcotics is strictly prohibited at any time. They must not, at any time, engage in criminal, dishonest, immoral or disgraceful conduct or other conduct prejudicial to the Government.

1-3 GOVERNMENT PROPERTY All Government property, automobiles, supplies, equipment, telephones, and facilities are to be used solely for official purposes and are not to be converted to any employee's personal use. In this regard, however, the use of equipment such as cameras for training and practice during non work hours shall be considered "official purposes." Any loss, misplacement, theft or destruction of Government property issued to any employee must be reported to his superior immediately.

1-3.1  Bureau Vehicles Bureau vehicles are to be used for official business only. In connection with the use of Bureau vehicles, transportation and related services for other than Bureau employees are to be restricted to individuals and their families, or aides accompanying them, who are traveling to attend Bureau sponsored or related functions or have other direct business to transact with Bureau officials and officials of the Department of Justice traveling on official business.

As mentioned earlier, NOWHERE, repeat NOWHERE, in the thousands of documents I reviewed did I find ANY mention of conflict of interest.



In September 2005 I was referred to a web site that contained what I consider EXPLOSIVE information.. not because someone like me wrote it but because IT CAME FROM THE PEN OF THE FBI ITSELF!   Thank GOD for people like Russ!

www.thememoryhole.org/fbi/agent_problems

FBI Reports on Agent Misbehavior

The following internal reports deal with the problematic actions of some FBI agents - everything from drinking on the job to sloppy handling of sensitive material to sexual offenses. The first three reports have not been seen by the public until now. They were released by the FBI on 12 Nov 2004 due to FOIA request #0995805-000 filed by Russ Kick. The fourth report has never been released and was leaked to The Memory Hole in March 2004.

"Special Agent Personnel Incident Review"
Date: January 1983

From the preface: "This study was conducted to determine if there are identifiable patterns or trends in incidents of serious Special Agent (SA) misconduct which, if discerned, might be of assistance in personnel selection and management.  ... During the period 1976 to September 1982 misconduct allegations against SAs have on 384 occasions been substantiated to a degree deemed sufficient to warrant administrative or prosecutive action.  As a result of such action since September 1976,  58 SAs have been dismissed or resigned,  19 have been transferred, 13 demoted, and 111 suspended from duty without pay for a total of 1,147 days."
Pages: 43
File size: 1.7 meg
Download the report by clicking here

"Special Agent Personnel Incident Review Update"
Date: 08 July 1985

From "Background": "During the period from October 1, 1982, through December, 1983, 312 misconduct allegations against 409 Agents were received. After investigation, 109 Agents (27 percent) in 95 allegations (30 percent) received disiplinary action ranging from censure to dismissal.  Eleven Agents either resigned or retired during the course of administrative inquiry and two received a reduction in grade. Two agents were dismissed and 37 were suspended without pay for a total of 622 days."
Pages: 12
File size: 580K
Download the report by clicking here

"1988 Special Agent Incident Review Trend Analysis"
Date: 15 March 1990

Scope: This report examines 75 incidents which occurred during calendar year 1988.  It focuses solely on incidents in the category "unprofessional conduct/misuse of the SA position/conflict of interest,"  which is a catch-all that includes "homosexual acts, misuse of firearms (nonshooting), improper management techniques, civil disturbance, and improper relationship with the criminal element," as well as "accessing computerized criminal history information for personal use, making traffic stops, inappropriately involving local law enforcement agencies in domestic disputes, or being arrested for criminal sex offenses."
Pages: 13
File size: 850K

Download the report by clicking here

"Behavioral and Ethical Trends Analysis (BETA)
A Summary of Dismissals Involving FBI Agents and Egrerious Behavior"
Date: June 2000

From appendix C:  "This project was designed to study FBI Agents who have been dismissed, resigned under inquiry (proposed), or retired due to substantial acts of criminal and serious misconduct [from 1986 to 1999]."

Go to a separate page for the report by clicking here

Site and original text copyright 2002-5 Russ Kick .... Go to the site and send Russ some money!


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

 © 2005-2008

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