United States v. LaRouche

United States v. LaRouche refers to the prosecution and conviction of controversial American political activist Lyndon LaRouche and several of his associates on charges of mail fraud, conspiracy and tax evasion. LaRouche was sentenced to a prison term of fifteen years which began in 1989. He was paroled in 1994 after serving five years.

1 Overview
2 First trial
3 Second trial
4 Prosecution of LaRouche associates
5 Attempts at exoneration
6 External links

[edit] Overview

By the 1980s LaRouche and Helga Zepp-LaRouche had built an extensive political network, including the Schiller Institute in Germany, headed by Zepp-LaRouche, with branches in several other countries. The International Caucus of Labor Committees claimed to have affiliates in France, Italy, Sweden, Canada and several South American countries. In Australia LaRouche operatives took over an older extreme-right group, the Citizens Electoral Council (CEC), and regularly contest elections.^{[citation needed]} The LaRouche organisation published a weekly newspaper, The New Federalist, and a weekly newsmagazine, Executive Intelligence Review. At one time there was a LaRouche publishing house, Benjamin Franklin Books, which issued a steady stream of works by LaRouche and his followers. The real membership of LaRouche's organisation is not known.

The LaRouche organisation devotes much of its energy to the sale of literature and the soliciting of small donations at airports and on university campuses. It also solicits donations by phone. More seriously, however, LaRouche was accused of conspiring to fraudulently solicit loans, i.e. without intention to repay, including from vulnerable elderly people.

[edit] First trial

In October 1986, over 400 armed officers of the FBI, IRS, other federal agencies, and Virginia state authorities raided the LaRouche headquarters in Leesburg in search of evidence to support the persistent accusations of fraud and extortion made against LaRouche. This led first to the indictment of LaRouche and others on June 30, 1987 in Boston, on one count of conspiracy. The trial commenced on December 17 of that year, before Boston Federal Judge Robert E. Keeton. There were numerous revelations, including a search, authorized by Judge Keeton, of the personal files of Oliver North. This search produced a May 1986 telex from Iran-Contra defendant General Richard Secord to North, discussing the gathering of information to be used against LaRouche. After this memo surfaced, Judge Robert Keeton ordered a search of Vice President George Bush's office, for documents relating to LaRouche. The judge declared a mistrial on May 4, 1988, saying the unexpected length of the trial due to numerous delays made it unlikely that enough jurors would be left at the end to render a verdict.

Before disbanding, the jurors polled themselves and found all defendants, including LaRouche, "not guilty." According to the Boston Herald of May 5, 1988, one of the jurors described the poll: "It seemed some of the government's people caused the problem, adding that the evidence showed that people working on behalf of the government 'may have been involved in some of this fraud to discredit the campaign.'" The National Law Journal called the Boston mistrial a "stinging defeat" for the government; LaRouche commented, "I was cheated out of an acquital." A retrial in Boston was scheduled, but a new case in Virginia came first.

[edit] Second trial

On October 14, 1988, LaRouche and six associates were re-indicted in the so-called "Rocket Docket" of the U.S. District Court for the Eastern District of Virginia located in Alexandria, Virginia, and charged with conspiracy and mail fraud. LaRouche was also charged with conspiring to hide his personal income since 1979, the last year he had filed a federal tax return. On December 16, 1988 a federal jury convicted LaRouche and his associates, and LaRouche was sentenced to fifteen years in prison, of which he served five.

Unlike Judge Keeton, who devoted three weeks to jury selection, Alexandria Judge Albert V. Bryan spent two hours. This contributed to the result that most jurors in the Alexandria trial were present or former government employees. Jury Foreman Buster Horton was the U.S. Department of Agriculture liaison to the Federal Emergency Management Agency (FEMA). Judge Bryan also granted a motion in limine, which barred the defense from presenting the material they had presented in the Boston trial.

The prosecution presented evidence that LaRouche and his staff solicited loans with false assurances to potential lenders and showed "reckless disregard" of the facts. Assistant U.S. Attorney Kent Robinson presented evidence that LaRouche's organisation had solicited US$34 million in loans since 1983. LaRouche supporters claim the amount that was not repaid was $294,000, but according to testimony in the Virginia case, reported by the Washington Post (17 December 1988), the amount of funds not repaid by 1987 topped $25 million. The most important evidence was the testimony of lenders, many of them elderly retirees, who had lost thousands of dollars in loans to LaRouche that were never repaid. Several witnesses were LaRouche followers who testified under immunity from prosecution.

Judge Albert V. Bryan granted a motion in limine, ruling that the defense would not be permitted to discuss, or even allude to, the fact that the U.S. Department of Justice filed, on April 20, 1987, an unprecedented involuntary bankruptcy petition against two LaRouche-controlled publications companies on whose behalf the loans had been solicited. Federal trustees were placed in charge of the companies, and they immediately suspended repayment of loans to creditors (who were, for the most part, political supporters of the LaRouche movement).

On October 25, 1989, Judge Martin V.B. Bostetter ruled that the government's bankruptcy action was illegal. Bostetter said the government acted in "objective bad faith" and the bankruptcy was obtained by a "constructive fraud on the court." Thus the argument of the defense, that the decision to not repay the loans was made by government trustees and not by the defendants, was never presented to the jury. It was also never heard by an appellate court.

Civil libertarians outside the LaRouche group objected to the government seizure of LaRouche publications as abusive. However, this is separate from the issue of fundraising irregularities, for which voluminous evidence was presented in court testimony and by several investigative reports in the media.

LaRouche was convicted on eleven counts of mail fraud connected to fundraising issues, and also of violating tax laws by hiding his income and failing to file tax returns.

LaRouche claimed he had no income, but before and during the involuntary bankruptcy period, LaRouche lived at a 200 acre (800,000 m²) Virginia estate with a pond and horse ring, owned by a LaRouche supporter. In all the LaRouche group spent over US$4 million on Virginia real estate during this period, according to trial testimony reported in the Washington Post (17 December 1988).

LaRouche denied all the charges, calling them "an all-out frame-up by a state and federal task force," and said that the federal government was trying to kill him. "The purpose of this frame-up is not is not to send me to prison. It's to kill me," LaRouche said. "In prison it's fairly easy to kill me... If this sentence goes through, I'm dead." This proved to be a false prediction: LaRouche was paroled, alive, in 1994. However he released claims that he was tortured while in prison as part an assassination attempt. [1]

One of his cellmates during his incarceration was disgraced televangelist Jim Bakker. Bakker later devoted a chapter of his book, I Was Wrong, to his experience with LaRouche, in which he expressed his astonishment at LaRouche's detailed knowledge of the Bible.

LaRouche served five years of his sentence and was paroled.

LaRouche supporters maintain that, due to the motion in limine that was granted by Judge Bryan in the Virginia case, the jury never heard LaRouche's actual defense: that the involuntary bankruptcy imposed by the federal government was the sole factor which prevented repayment of loans. In the book Railroad! (Committee to Investigate Human Rights Violations, Washington, D.C., 1989, p. 9), the authors write that "...the judge invaded the province of the jury, preventing the jurors from hearing the facts which would enable them to competently determine the question of criminal intention."

However, jury foreman Buster Horton told the Washington Post (17 December 1988) that it was the failure of LaRouche aides to repay loans that swayed the jury in the Virginia case, and that the jury "all agreed [LaRouche] was not on trial for his political beliefs. We did not convict him for that. He was convicted for those 13 counts he was on trial for."

Dr. Friedrich August Freiherr von der Heydte, Professor of Constitutional and International law at the University of Mainz in Germany, wrote the following on the case:

On closer examination of the behavior of the U.S. authorities toward LaRouche, there emerge strong parallels to the infamous Dreyfus Affair in France, which has gone down in history as a classical example of a political trial....Just as LaRouche was, the French Capt. Alfred Dreyfus was deprived by the structure of the trial procedures, of any opportunity to prove his innocence, and facts critical for his defense were excluded from the trial.

(This paragraph is excerpted from a longer essay by von der Hedydte, which appeared as a full page ad, sponsored by the LaRouche-affiliated Commission to investigate Human Rights Violations, in the Washington Times on March 1, 1990, and as a half-page ad in the Washington Post on March 3.)

[edit] Prosecution of LaRouche associates

LaRouche's chief fund-raiser, William Wertz, was convicted on ten mail fraud counts. LaRouche's legal adviser, Edward Spannaus, along with fundraising operatives Dennis Small, Paul Greenberg, and Joyce Rubinstein, were convicted of conspiracy to commit mail fraud. Michael Billington received a 77 year sentence for "conspiracy to fail to register as a securities broker." ISBN 0-943235-17-0

[edit] Attempts at exoneration

Former U.S. Attorney General Ramsey Clark supported LaRouche's claims that his prosecution was politically motivated. In 1995 he wrote to Attorney-General Janet Reno: "I bring this matter to you directly, because I believe it involves a broader range of deliberate and systematic misconduct and abuse of power over a longer period of time in an effort to destroy a political movement and leader, than any other federal prosecution in my time or to my knowledge." [2]

On September 18, 1996, a full page advertisement appeared in the New Federalist, a LaRouche publication, entitled "Officials Call for LaRouche's Exoneration" (see text). The signators included Arturo Frondizi, former President of Argentina; figures from the 1960s American Civil Rights Movement such as Amelia Boynton Robinson, James Bevel, and Rosa Parks; former Minnesota Senator and Democratic Presidential Candidate Eugene McCarthy; Mervyn M. Dymally, who chaired the Congressional Black Caucus; and artists such as classical vocalist William Warfield, and violinist Norbert Brainin, former 1st Violin of the Amadeus Quartet. LaRouche's Schiller Institute paid for the ad. Amelia Boynton Robinson was at that time a board member of the Institute; James Bevel and William Warfield went on to become active in various LaRouche organizations.

In a 2003 interview, former Minnesota Senator and Democratic Presidential candidate Eugene McCarthy was asked about LaRouche:

EIR: Can't the Democratic Party be changed, in the way you tried to change it in 1968, and Lyn [LaRouche] is trying to change it now?.

McCarthy: I would hope so, but I doubt it. After 1968, the great fear of the Establishment was that a President might be elected on the basis of a political dialogue of the American people. There was great psychological warfare against me. You know there was great psychological warfare against Lyn. [3]