In its second issue, Wired magazine published one of the best written and most important pieces of high-technology investigative journalism to date. The article, “Inslaw Octopus” by Richard L. Fricker, painstakingly outlined the curious case of how the United States Department of Justice conspired with private individuals to commit fraud, obstruct justice, tamper with a witness, retaliate against a witness, and receive stolen goods, among other crimes.
Bill and Nancy Hamilton started a company named Inslaw specifically to enhance the Prosecutors Management Information System (PROMIS), a piece of software designed to manage legal cases. Enhancement of the PROMIS software was funded by the Justice Department when it recognized that its case management system was in urgent need of automation.
The underlying PROMIS software was originally created in the 1970s under a Law Enforcement Assistance Administration (LEAA) grant. Like any other piece of information generated by the government, the original version of PROMIS was in the public domain.
Recognizing that the market in the United States alone for legal automation software was more than US$3 billion, Inslaw made significant improvements to the public domain version of the PROMIS software and went private in the early 1980s.
The Inslaw-enhanced version of PROMIS had the capability to combine disparate databases and could track people by their involvement with the legal system. Many claim that the United States Department of Justice has stolen and modified the Inslaw-enhanced version of the PROMIS software to aid in the tracking of intelligence operations, agents, and targets instead of legal cases.
Databases maintained by the Department of Justice, the United States Attorney, the Internal Revenue Service, and other government agencies were all separate, stand-alone systems and could not be combined. Until PROMIS. The PROMIS software could combine information from all of the agencies’ databases without the need for reprogramming the underlying software.
At the end of President Jimmy Carter’s administration, LEAA was phased out, and Bill Hamilton converted Inslaw to a private, for-profit business. Inslaw claimed ownership of the enhanced PROMIS software that was funded with Inslaw’s money.
Hamilton’s lawyers sent the Department of Justice a letter asserting ownership of the enhanced version of the PROMIS software and asked the Department to waive any proprietary rights. In an August 11, 1982 letter, the Justice Department agreed, in general, with Hamilton’s claim of ownership of the enhanced software.
In March 1982, Inslaw won a US$9.6 million grant from the Department of Justice to install the public domain version of PROMIS—not Inslaw’s proprietary enhanced version—in 20 U.S. Attorney’s offices as a pilot program.
During the Inslaw pilot installation of the PROMIS system, the Department of Justice claimed that Inslaw was on the verge of bankruptcy. Even though Inslaw was engaged to provide only the public domain version of PROMIS, the Department of Justice demanded that Inslaw turn over the enhanced version of the PROMIS software in case the company couldn’t complete the contract. Inslaw agreed to release the enhanced PROMIS, on the condition that the Department of Justice recognize Inslaw’s proprietary rights to the enhanced version of the software and that the Department not distribute enhanced PROMIS outside of the U.S. Attorney’s offices.
Once the Department of Justice had control of enhanced PROMIS, it refused to acknowledge that Inslaw had created the enhancements. When Inslaw protested, the Justice Department withheld all payments. Two years later, Inslaw was forced into bankruptcy.
In early June 1986, Inslaw filed a US$30 million lawsuit against the Department of Justice in bankruptcy court. Inslaw’s attorney filed the suit in bankruptcy court on the theory that the Department of Justice—the creditor—had control of PROMIS, Inslaw’s primary asset. It is against the law for a creditor to exercise control over the property of a debtor.
In 1987, Washington, DC bankruptcy judge George Bason ruled that the Department of Justice had stolen PROMIS and awarded Inslaw US$6.8 million in damages. Judge Bason also ruled that Justice Department officials had made a concerted effort to drive Inslaw into bankruptcy and had placed the enhanced PROMIS up for public auction.
The Department of Justice appealed Judge Bason’s ruling to the federal district court, which affirmed the Bason judgment. The Justice Department then appealed to the Washington, DC Circuit Court of Appeals, which reversed Judge Bason’s decision, finding the bankruptcy court had no jurisdiction to hear the damages claim. In October 1991, a review petition to the Supreme Court was denied.
On November 20, 1990, the House Judiciary Committee asked Central Intelligence Agency director William Webster to determine whether the CIA was in possession of the enhanced PROMIS software. CIA Director Webster claimed to be unable to find any evidence that the CIA had ever obtained the enhanced PROMIS software, but a retired CIA official reportedly insisted that the Department of Justice gave PROMIS to the CIA. Canadian documents place enhanced PROMIS in the possession of various Canadian government agencies. Fricker’s article in Wired reported that the enhanced PROMIS software found its way to the governments of more than 80 countries, allegedly through the United States Department of Justice.
On August 11, 1992, the House Judiciary Committee, after a three-year investigation, voted 21 - 13 to ask then-Attorney General William Barr to “immediately settle Inslaw’s claims.” Barr refused to appoint an independent prosecutor to the Inslaw case, instead appointing Nicholas Bua, a retired federal judge. Bua reported directly to Barr, resulting in the strange situation of the Department of Justice being entirely responsible for investigating itself.
Oliver North reportedly used the software to track dissidents within the United States as part of a domestic emergency preparedness program commissioned under President Ronald Reagan’s Federal Emergency Management Agency (FEMA).
When House Judiciary Committee Chairman Representative Jack Brooks (D-Texas) asked Oliver North about using the PROMIS software during the Iran-Contra hearings, the hearing was immediately suspended pending an executive (secret) conference. When the hearings reconvened, the issue of North’s use of the PROMIS software was dropped.
Freelance reporter Danny Casolaro was found dead on August 10, 1991 in a Martinsburg, West Virginia hotel room. Both of his wrists were deeply slashed. Casolaro had been actively investigating the Inslaw case and maintained that Inslaw was only a part of a larger story of how intelligence agencies, the Department of Justice, and organized crime had subverted the federal government for profit.
Casolaro had gone to Martinsburg to meet with an informant. Martinsburg police allowed Casolaro’s body to be embalmed before family members were notified and allegedly warned hotel employees not to talk to reporters. The hotel room was immediately cleaned by an outside service and Casolaro’s notes, which witnesses report they saw him carry into the hotel, were never found.