UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY

LONDON CRIMINAL #96-00060

UNITED STATES OF AMERICA,
PLAINTIFF,
VERSUS
CHALMER C. HAYES,
DEFENDANT.

LONDON, KENTUCKY
JANUARY 15, 1997
9:00 A.M.
DAY III
TRANSCRIPT OF TRIAL PROCEEDINGS
BEFORE THE HONORABLE JENNIFER B. COFFMAN
UNITED STATES DISTRICT JUDGE, and a jury


APPEARANCES:

FOR THE PLAINTIFF: MR. PATRICK MOLLOY
MR. MARTIN HATFIELD
ASSISTANT U.S. ATTORNEYS
110 WEST VINE ST.
LEXINGTON, KY 40507

FOR THE DEFENDANT: MR. GATEWOOD GALBRAITH
ATTORNEY AT LAW
1305 NICHOLASVILLE ROAD
LEXINGTON, KY


NATHAN F. PERKINS
OFFICIAL COURT REPORTER
P.O. BOX 5161
LONDON, KY 40745
(606) 878-8450

AFTERNOON SESSION, 1:10 P.M.


Charles S. Hayes on CIA, PROMIS, Fifth Column,
Vince Foster, and the Department of Justice

"Mr. Vince Foster had an account in Bern, Switzerland. He had several million dollars in it. Money was transferred to another account and Mr. Foster was told if he wanted to get it, all he had to do is prove how he had paid taxes on it, [had not] lied to the United States government, and he could get the money back."

Background Reading: Spook Wars in Cyberspace--Is the FBI Railroading Charles Hayes?


6 Q. Mr. Hayes, have you ever been employed by the CIA?

7 A. Yes, sir.

8 Q. For how long?

9 A. On and off, ever since I was about 19 years old, sir.

10 Q. Okay, sir. Have you ever traveled abroad for them?

11 A. Yes, sir.

12 Q. Have you ever lived abroad for them?

13 A. Sir?

14 Q. Have you ever lived abroad for them?

15 A. I am sorry?

16 Q. Have you ever lived abroad, have you ever lived in other

17 countries?

18 A. Yes, sir, yes, sir.

19 Q. Doing their work?

20 A. Yes, sir.

21 Q. Now, sir, when a person works for the CIA, do they get a

22 paycheck every week from the CIA?

23 A. No, sir.

24 Q. Would you - would you describe - would you describe for

25 the jury how they work?

Page 140



1 A. Well, it's according to - you get paid by a lot of times

2 by on a job. It's not like drawing a payday and they take

3 out Social Security and what have you, and your withholding.

4 You contract for certain labor and certain jobs to be done.

5 You had several places that you could pick up payment. Our

6 government runs companies under different names and they own

7 the companies. Whenever you need money you can go there and

8 pick up your - the kind of money you have got coming.

9 Q. So the checks you would have picked up as an agent for

10 the CIA would in fact have been done under the ruse of being

11 employed in another fashion?

12 A. Some of them and some of them you are - you can also

13 pick up cash that way too, sir.

14 Q. Yes, sir. Mr. Hayes, during the course of your

15 employment with the CIA, have you run businesses or done

16 business that gave you either a front for making a living or

17 allowed you to make a living?

18 A. Yes, sir.

19 Q. And what had those businesses - would you enumerate for

20 the jury what some of those businesses have been?

21 A. One of them, I had a business in Brazil that was

22 Challenger Limited, that I had some other purposes of being

23 there, sir.

24 Q. Did you in fact, when you were in Brazil, get involved

25 in a deal smuggling - a gem smuggling ring?

Page 141



1 A. I got involved around it. I wasn't involved in it, sir,

2 I was involved around it.

3 Q. Okay. Well, before we get to that, let's pass, get some

4 time --

5 A. But I --

6 Q. Well --

7 A. I had other needs for being in Brazil before this ever

8 come up, sir.

9 Q. Yes, sir. In the course of your employment with the

10 CIA, have you in fact developed contacts and resources

11 within the intelligence community?

12 A. I have, sir.

13 Q. And are you in reasonably consistent contact with those

14 resources?

15 A. A number of them, sir.

16 Q. Is it safe to say, sir, that given your CIA contacts -

17 excuse me. Let me lay a little bit more foundation.

18 In your experience with the CIA, have you come into

19 contact with operatives who would carry out assignments on

20 behalf of the government?

21 A. All the time, sir.

22 Q. Did you run across people who have free lanced on those

23 assignments?

24 A. Yes, yes, sir.

25 Q. Would, given your experience, would it be hard to find

Page 142



1 someone in the CIA or the other intelligence community that

2 would either satisfy or find someone to satisfy a request on

3 your part for an assassin?

4 A. It wouldn't be hard at all, sir.

5 Q. How long were you with the CIA, sir?

6 A. Since I was 19 years old, sir.

7 Q. That's 42 years?

8 A. Yes, sir.

9 Q. Now, if the government called up the CIA and say this

10 Chalmer C. Hayes or this C. Charles Hayes, does he work for

11 you? What are they going to find out?

12 A. Sir, they are not going to find out much. In fact, the

13 government probably already knows, they can call and they

14 won't even give them information. Other organizations

15 within the government they don't give information to.

16 That's their privilege.

17 Q. Prior to your getting involved in gems, what other kinds

18 of businesses were you involved in?

19 A. I was around cars, selling of cars, Mercedeses. There

20 was several other covers, sir. I - I don't think that some

21 of them I can reveal at this particular time because I - the

22 record is - a lot of it is redacted, as you know, and I

23 don't think that that would - that some of the other things

24 I can reveal at this time, sir.

25 Q. Have you in fact in the course of - course of your life

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1 been subpoenaed to testify in front of grand juries, federal

2 grand juries?

3 A. I have numerous times been subpoenaed in front of

4 federal grand juries, House investigating committees,

5 subcommittees. I have been subpoenaed for all of it, sir.

6 Q. Have you in fact testified in front of Congress or

7 Congressional members?

8 A. I have, sir. Yes, sir, I have.

9 Q. We're going to - we're going to talk about the gem case

10 for a second, Mr. Hayes. Is the gem case the first time -

11 well, would you describe for the jury what the gem case is

12 about, sir?

13 A. Yes, sir. I was contacted in Brazil by some of the high

14 government officials which I knew there, that wanted to get

15 some jewels that was in the United States. A member of this

16 company, Embrine(?) Corporation, supposedly had went crooked

17 and was sitting over here with a lot of gems. They asked me

18 if I would try to help them retrieve the merchandise.

19 I wasn't too much interested until I found out one

20 thing. The guy that had the gems and what have you was from

21 Berea, Kentucky. And I said, yes, that's close to home, I

22 might. I don't know. And I went from there to Brasilia to

23 Goias, G-O-I-A-S, in other words, and also Brasilia, to talk

24 to them while in Brazil about the situation they had here

25 with the agent that they had. They also told me they had

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1 problems over here with the United States Customs where they

2 were holding $5,000,000 worth of diamonds in Miami, and I

3 was to find out why they were holding them and what have you

4 and report back to them.

5 Q. In your capacity, were you being asked to do this in

6 your capacity with the CIA or as a private citizen?

7 A. More or less as a private citizen.

8 Q. On contract with the CIA?

9 A. No, sir, I wasn't on contract with them on that.

10 Q. You didn't enter into a formal contract with them?

11 A. That's right, at that time I was strictly on a contract

12 basis, and they knew of it, but they had no part in that,

13 sir.

14 Q. Okay.

15 A. None.

16 Q. Okay. Mr. Hayes, did you - did in fact, due to your

17 efforts, a gem seizure result?

18 A. Yes, sir, there have been many millions of dollars worth

19 seized in the United States because of this.

20 Q. Was there anybody arrested --

21 A. Yes, sir.

22 Q. -- as a result of your investigation?

23 A. Yes, sir, a number of people have been arrested in it.

24 There is fugitives from justice right now, there has been

25 prison sentences been handed down, there have been - in

Page 145



1 fact, the government pays you a mordi(?).

2 Q. That's what I want to get into. I want to stop you.

3 A. Well, what I --

4 Q. Were there any government officials of any country

5 arrested as a result of your investigation?

6 A. Yes. And there were investigations of officials here in

7 the United States as well, sir.

8 Q. Who was - who was arrested, that you recall, that might

9 have been a government official?

10 A. The minister of justice in Brazil was arrested. He was

11 the minister. There were senators arrested over there,

12 several others. They had quite a number of people that was

13 high - mayor of the town.

14 Q. Was that carried in the mainstream media at the time it

15 happened?

16 A. Yes, sir, all over the world.

17 Q. Yes, sir. As - under - do you believe that a United

18 States law exists that gives you a percentage of what was

19 seized in that matter?

20 A. Yes, sir. And it was discussed beforehand and

21 afterwards, yes, sir.

22 Q. Have you in fact - do you have any idea of how much

23 worth of gems were - were seized as a result of your work?

24 A. No, sir, I'm in the process now of trying to get a

25 complete accounting.

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1 I would say this. It was well over $12,000,000 that

2 were seized. Well over $12,000,000. The gem seizure was

3 listed, and by United States Customs and all the papers, as

4 the largest gem seizure that was ever had in the United

5 States of America.

6 Q. How much did you think you have coming to you from the

7 government as a result of your work for them in that matter?

8 A. Well, somewhere in the neighborhood of - when they are

9 all put together, several different cases, you know what I

10 mean? They are all being fairly completed. It's been over

11 10 years ago. When it all comes out it will be somewhere

12 over - a little over a million dollars.

13 Q. And have you asserted that claim against the United

14 States government?

15 A. I have, and they have - they are attempting now to pay

16 some of the claims.

17 Q. They - they don't agree with your assessment of how much

18 of the jewels belong to your work, do they?

19 A. Well, they haven't agreed or they haven't denied, sir.

20 I am working for an accounting. We asked for - I asked for

21 an accountig on a check that they was trying to present to

22 me as, you know, $903. And I told them, I said I would like

23 to have an accounting what this goes on for. In the

24 meantime they sent me another check, I don't know, for

25 several hundred dollars, or sent me a paper that if I will

Page 147



1 sign a paper that they will send to me. They want me to - I

2 told them I wanted an accounting of exactly where it come

3 from, how much and which claim and everything else. And as

4 to this date, I - I haven't got it back yet, sir.

5 Q. Do you think you have been treated fairly by Customs

6 officials for whom you believed you were working?

7 A. No, sir.

8 Q. Do you in fact think that they are trying to - do you

9 think they have paid you what you have forthcoming?

10 A. I haven't received anything yet, sir. And it's been

11 over 10 years. They are in the process now of just starting

12 to dribble some of the money out.

13 Q. Do you know people in Customs?

14 A. Sir?

15 Q. Do you know, did you ever have any official contact with

16 people in Customs?

17 A. Yes, sir.

18 Q. The Customs Department itself?

19 A. Yes, sir.

20 Q. Do people in Customs know who you are?

21 A. Yes, sir, they sure do.

22 Q. Now, is that the first big brouhaha that you have had

23 with this government?

24 A. No, sir.

25 Q. What, prior to that time, did you - were you, you and

Page 148



1 your government ever in conflict over anything else?

2 A. I have had a case in computers. Is that --

3 Q. No, this is - this is later. I want to go prior to the

4 gem situation.

5 A. Yes, I had a gun case that was a number of years ago

6 that there was a conflict over with the government.

7 Q. Okay. What - what is your general attitude toward your

8 government, Mr. Hayes?

9 A. Well, I love my government. As I have always said, I

10 love my government second to my God and would put my life on

11 the line for it.

12 Now, that doesn't mean that I appreciate some of the

13 government organizations that doesn't give people a fair

14 break and what have you, and doesn't try to do the right

15 thing. But I love my country, sir.

16 Q. Are you afraid of the government, Mr. Hayes?

17 A. Sir?

18 Q. Are you afraid of the government?

19 A. No, sir.

20 Q. Are you afraid of any of their agents?

21 A. No, sir.

22 Q. Mr. Hayes, have you ever sued the government?

23 A. Not to my knowledge, sir.

24 Q. Have you ever countersued?

25 A. Yeah, I countersued, yeah.

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1 Q. How many times has the government sued you?

2 A. Four or five, six times I guess. I don't know.

3 Somewhere along there.

4 Q. And are we talking about the state or federal

5 government?

6 A. Federal government, sir. I have never been, had any

7 allegations with the state government.

8 Q. And you have never initiated a suit but you have

9 countersued on suits that you - have been initiated against

10 you?

11 A. Yes, sir.

12 Q. Okay. There was a - would it be fair to say that there

13 was an even more heated confrontation between you and the

14 government later on after the gem seizure case?

15 A. Several of them, sir.

16 Q. What was the next time when you got involved in a heated

17 battle with the United States government?

18 A. After the gem case, I'm in the salvage business and buy

19 salvage, and the United States District Attorney's office,

20 the same one that Mr. Hatfield works for in Lexington,

21 Kentucky, right now, from them up there I bought a bunch of

22 computers from GSA that they sold as surplus equipment.

23 The government found out that they had left some witness

24 protection plans on it, on the tapes. They had also left

25 all their financial records on there. I think they was more

Page 150



1 interested in their financial records than the other.

2 That's neither here nor there. But they wanted it back.

3 And my situation was, well, pay me for it and you can have

4 it. And no, we don't want to pay you, you are going to have

5 to give them back to us regardless. And I said, you mean I

6 just lose my money? And they never would answer that

7 question. They just said, no, we'll get them back, we'll

8 get a court order. Well, whatever. And they did.

9 Q. Did they sue you?

10 A. Yes, sir.

11 Q. You countersued them?

12 A. Yes, sir.

13 Q. They got the materials back?

14 A. Yes, sir.

15 Q. Sir, based upon your possession of those materials, have

16 you ever been asked to produce an affidavit as to the

17 content, nature or form of that material you found on those

18 computers?

19 A. Yes, sir.

20 Q. Have you in fact initiated such --

21 A. I did not.

22 Q. -- such an affidavit?

23 A. I did not. He asked me if any other government agency

24 had got a copy of what I had retrieved, and my answer was,

25 if you have an argument with them, you go ask that other

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1 government agency.

2 Q. Okay. Sir, has it - have you purported that the

3 material discovered on those computers was in fact a

4 software program that is currently the subject of major

5 litigation in this country?

6 A. It is, sir.

7 Q. Was the material derived off of those computers a

8 derivative of a software program called Inslaw software?

9 A. Yeah, it's Inslaw. That's not the name of the software

10 but that's the name of the company that produced the

11 software.

12 Q. Is that some important software, Mr. Hayes?

13 A. Even to this day, it's still one of the best tracking

14 softwares that there is. The enhanced version is.

15 Q. What is the software that's been produced by Inslaw?

16 What is it called? How should we refer to it?

17 A. In this case here, it's called Promise and Enhanced

18 Promise software.

19 Q. What was that software designed to do, sir?

20 A. To track people, money. It can track anything except

21 maybe a rabbit or a hound dog. I doubt if it could do that.

22 But it could do just about anything as far as tracking goes,

23 keeps - keeps good records for tracking.

24 Q. Now, by tracking, let's try to clear it up. What do you

25 mean by tracking?

Page 152



1 A. Keeping tabs on something. Being able to look at it and

2 bring it up the instant that you need it.

3 Q. Was this capable of tracking international financial

4 transactions?

5 A. If it's programmed right, yes, sir, very much so.

6 Q. Is that what it's designed to do?

7 A. Sir?

8 Q. Is that what it was designed to do?

9 A. No, sir, that was just sort of swift and chips, was

10 designed for that originally along with Promise. And it

11 was - that was the NSA, based out of Maryland, N-S-A, done

12 this out of Maryland, originally done that, sir.

13 Q. Why were you called as a witness in front of a grand

14 jury -- pardon me. Were you called as a witness in front of

15 a federal grand jury regarding Inslaw and the software that

16 we've talked about here?

17 A. Yes, sir, I was.

18 Q. You have been a sworn federal grand jury witness

19 regarding this?

20 A. Subcommittees and grand jury, yes, sir.

21 Q. What is different about this software developed by

22 Inslaw that is different from software developed by anyone

23 else?

24 A. Well, some of it is not different, some of them stole it

25 from Inslaw too like the government did, and some of them

Page 153



1 didn't pay for the program and have copied it.

2 It's like a tape. You know, Kenny Rogers can make a

3 tape and have music on it. You can go to a store and buy

4 the tape and the tape that you buy in the store, Mr. Rogers

5 gets so much royalties, the company that made it does, and

6 the music company, everybody gets paid royalties. Yet you

7 can go home and take that tape and somebody else wants to

8 borrow it, say can I have that tape? If you make a copy of

9 that tape and give it to them, it is illegal. In other

10 words, not for distribution.

11 This is what they do with software a lot of times. They

12 will take somebody's software and copy it, or the government

13 will buy 50 copies and then they'll turn around and make 50

14 more copies, which you are not allowed to. And so it's hard

15 to answer exactly, Mr. --

16 Q. Is there a federal suit going on between the company

17 that developed the software and the Department of Justice?

18 A. There is, and as a result of it, last April of - in '96,

19 I think it was April, I would have to get the exact date,

20 you have a copy of the transcript exactly, that was my

21 latest problem with Department of Justice Lexington,

22 Kentucky, Mr. Famularo's office. I had a problem with my

23 learned colleague here, Mr. Hatfield sitting at the table's

24 office over there.

25 Q. Did you give a - did they take your deposition in that

Page 154



1 matter?

2 A. I was there for over four hours with somebody from the

3 Department of Justice, and there in Mr. Hatfield's office

4 for over four - well, quite a bit over four hours. I don't

5 know. He can give you the exact time on it. I went in

6 there in the morning and never even got dinner and stayed

7 until late that evening.

8 Q. Now, Mr. Hayes, it has been alleged that you and a group

9 of other people have used this software to track the

10 financial banking transactions of high placed government

11 officials in this country. What can you tell the jury about

12 that, Mr. Hayes?

13 A. Well, without compromising somebody else, I - the proof

14 of the pudding is in the eating, so the saying goes. It's

15 happened, as we said it would. Yes, there is a company

16 known as the Fifth Column, that comes from section D that

17 was developed within the CIA many years ago. That section

18 is a split-off branch of it. They have been known to

19 champion a lot of people's rights.

20 THE COURT: I am not sure if you answered the

21 question.

22 Could you ask him that question again, Mr. Galbraith?

23 MR. GALBRAITH: Yes.

24 I am sorry, sir, could you read it back?

25 THE COURT: Let see if I -- let me see if I can

Page 155



1 summarize it. Wasn't the question whether he has used this

2 computer software to track the financial affairs of highly

3 placed government officials?

4 MR. GALBRAITH: Yes, yes, sir.

5 THE COURT: Would you answer that question,

6 please, sir?

7 BY MR. GALBRAITH:

8 Q. You or members of this Fifth Column?

9 A. I am not so sure that I can answer that legally. I can

10 say that I have used Promise [Promis] software, yes.

11 Q. Is Promise software, that's --

12 A. Regardless of what I done with it. Now, that's

13 something else.

14 Q. Is Promise software what in fact is - is the subject

15 matter of this federal action, this Company D with the

16 federal government?

17 A. Yes, sir.

18 Q. What does this company - Inslaw, did you say?

19 A. Yes, sir.

20 Q. What does this company allege that the federal

21 government did with this software?

22 A. Well, the company alleges - the company is Inslaw

23 Corporation. It's in New York. It's run by a fellow, the

24 president of it is named Bill Hampton [Hamilton], who has been

25 bankrupt. They are still in operation under chapter

Page 156



1 something. All right. Whatever.

2 But anyhow, what happened they developed this Promise

3 software. They sold it to the government for tracking. It

4 tracks prisoners, it tracks cases, it tracks a lot things.

5 When they sold it to the government, they first sold it to

6 the Department of Justice, of all people. And they - I

7 think they sold it also partly to - only partly, partly to

8 the FBI. Well, this program was used to track operations

9 within the government. It's been alleged that the

10 government...

11 And then they come out with an enhanced version, which

12 is a lot faster, a lot better. Just like a car, you know,

13 an improvement comes along all the time. Come out with a

14 better version called Enhanced Promise software that is out.

15 They have alleged that the government has taken this, and

16 instead of buying copies for everybody that was involved,

17 they have taken it and not only given it to other agencies

18 within the government, they also state that, believe it or

19 not, an ex-Attorney General and a fellow that was just

20 convicted here a few weeks ago out there, Mr. Brian in

21 California, not only took it from the government, took this

22 same software program and went out and not only sold it to

23 other countries, sold it to companies within the United

24 States in competition against Inslaw.

25 Q. So in fact --

Page 157



1 A. The money --

2 Q. The allegation is that the government illegally

3 reproduced this software and in fact sold it itself to other

4 entities around the world?

5 A. Or people. I don't like to say that the government done

6 this, I would say - I would rather - my government didn't do

7 this, sir. The people within the government is the culprit

8 that's done it. People that was high up in the government

9 done it. The government didn't do nothing on this.

10 Q. Has - has this knowledge that the government - that

11 people within the government may have been accused of this,

12 and has your familiarity with the Promise software, has that

13 caused you to be examined for any unusual political affairs

14 in this country?

15 A. Yes, sir, they don't - any time that - I know they will

16 say no to this, but our government lies. I hate to say

17 this. That - our government doesn't lie, but the people in

18 it do.

19 Q. Answer the question, please, sir.

20 A. If - if - to answer this question, they - ask the

21 question one more time, Mr. Galbraith.

22 THE COURT: Just a minute, Mr. Galbraith.

23 A. This is all --

24 THE COURT: Excuse me, Mr. Hayes.

25 THE WITNESS: Yes, ma'am.

Page 158



1 THE COURT: We're not having a lecture here and

2 we're not having a sermon. I want you to listen to the - to

3 what the question is and answer the question, and nothing

4 else. You will be given latitude to explain your answer,

5 but let's avoid the digressions as much as we can.

6 Let's start with that again, Mr. Galbraith.

7 MR. GALBRAITH: Would you repeat the question,

8 Mr. Perkins?

9 (The last question was read by the reporter.)

10 MR. GALBRAITH: That's not a question, clear

11 question. Let me - I will withdraw that question and give

12 something that's a little more direct.

13 THE COURT: Yes, you may.

14 BY MR. GALBRAITH:

15 Q. Mr. Hayes, have you been responsible for the resignation

16 of any elected officials in this country?

17 A. I could have been a part of a group that has.

18 Q. Is that group the Fifth Column?

19 A. It is.

20 Q. You have in fact claim credit, along with the Fifth

21 Column, for having forced the resignation of various,

22 high-placed officials in this country, have you not?

23 A. Whatever the Fifth Column is guilty of, I am too, or

24 whatever they are praised for, I am with the Fifth Column.

25 Q. Did the Fifth Column obtain financial records of elected

Page 159



1 Senators and Representatives, Federal Senators and

2 Representatives in this country?

3 MR. MOLLOY: Your Honor, I am going to object.

4 We're not here about the Fifth Column, we're here about

5 Mr. Hayes. If the question can be directed to him and not

6 about all these other folks, that would be fine.

7 THE COURT: Well, I think he has just, with that

8 last answer, said that he is one and in lock step with the

9 Fifth Column. And I think Mr. Galbraith is trying to

10 establish his opposition to government officials and various

11 agencies. So the objection is overruled and I will allow

12 it.

13 MR. GALBRAITH: Thank you, Your Honor.

14 A. At the point of not admitting to a crime, if we unduly

15 tapped a phone or something that way, I'd say that we could

16 have been responsible, yes, sir.

17 BY MR. GALBRAITH:

18 Q. You are not familiar with any law that has been broken

19 in - by the Fifth Column, are you?

20 A. Well, nobody has ever been charged with it.

21 Q. Okay. Did the Fifth Column obtain financial records of

22 high placed elected officials in this country?

23 A. I am sure they --

24 MR. MOLLOY: Your Honor, I have no objection to

25 that question, if and when he can show that he is a

Page 160



1 participant in that.

2 THE COURT: All right. That's fair enough.

3 That's a fair enough objection.

4 MR. GALBRAITH: Yes, ma'am.

5 THE COURT: You need to reword that question then.

6 MR. GALBRAITH: Yes, ma'am.

7 BY MR. GALBRAITH:

8 Q. As a part of your participation in the Fifth Column, do

9 you know if that group obtained financial records of high

10 placed elected officials in this country?

11 A. Yes, sir.

12 Q. Can you tell this jury a couple of names of whose

13 financial records were obtained?

14 A. At the point of a lawsuit that I could be sued by these

15 people, but this is fine, I can answer it one way. And I'm

16 not looking for a forum, Mr. Galbraith, in other words, to

17 put anything out. I can answer it very simply this way.

18 Q. Please.

19 A. As of last year, there was more Senators and Congressmen

20 resigned in Congress than has been known in the history of

21 the United States of America.

22 THE COURT: If you can answer the question, answer

23 the question. If you cannot answer the question, the Court

24 will presume that your attorney knows that you cannot answer

25 the question and won't ask it. So let's run that by one

Page 161



1 more time.

2 Have you or have you not, by virtue of your

3 participation in the Fifth Column, gotten financial

4 information regarding elected officials in the Senate or the

5 House? Yes or no.

6 A. We have, yes.

7 THE COURT: All right. And are you going to give

8 their names or no?

9 A. I might give a couple of them, Your Honor. You are

10 asking me to the point that I cannot answer the question

11 properly.

12 THE COURT: That's the question that was asked.

13 Who are they?

14 A. And then I answered you - all right, one of them is

15 Mr. Coyne [William Cohen] that just got appointed by your President.

16 BY MR. GALBRAITH:

17 Q. Mr. who?

18 A. Coyne.

19 Q. Who is he?

20 A. From Maine --

21 Q. Who is he?

22 A. He resigned.

23 Q. Was he a Representative or a Senator from Maine?

24 A. He was a Senator from Maine. In other words, from up

25 there. You had a lady out west, Pat Schroder. [Schroeder]

Page 162



1 Q. Are you telling this jury that you believe that

2 financial information obtained on these people would have

3 forced them to resign from their elected office?

4 A. Yes, sir. And I can even prove it to you with the last

5 name that I gave you, without getting into a match here, in

6 other words, of names and what have you.

7 Q. Are you familiar with the name Vince Foster?

8 A. Yes, sir.

9 Q. How do you know the name Vince Foster?

10 A. He worked for the White House and when he was counsel

11 out in Arkansas.

12 Q. He was in fact counselor to President Clinton?

13 A. Sir?

14 Q. Was he counselor to President Clinton?

15 A. Yes, sir.

16 Q. What has become of Mr. Vince Foster?

17 A. Mr. Vince Foster got killed.

18 Q. I believe that's been - has that been ruled a suicide?

19 Do you know?

20 A. I think it is. They had ruled it suicide, and they

21 couldn't make it stick so they had to reopen the case, and

22 it hasn't been ruled anything yet. In --

23 Q. Do you have any reason to believe that you know why

24 Mr. Foster would have been murdered or committed suicide?

25 A. Yes, I do.

Page 163



1 Q. What is that reason?

2 A. Mr. Foster had been relieved of his bank account in

3 Bern, Switzerland.

4 Q. Well, now, that's - I realize that's a very succinct way

5 to put it. And without lecturing or a forum, I want you to

6 tell this jury what you know about that.

7 A. Okay. He had an account --

8 Q. Mr. Vince Foster?

9 A. Yes, Mr. Vince Foster had an account in Bern,

10 Switzerland. He had several million dollars in it. Money

11 was transferred to another account and Mr. Foster was told

12 if he wanted to get it, all he had to do is prove how he had

13 paid taxes on it, [had not] lied to the United States government, and

14 he could get the money back.

15 Q. He hadn't paid?

16 A. Mr. Foster was unhappy. So not only that, in the

17 meantime, during all of this going on when Mr. Foster was

18 there, there is ways of laundering and tracking money.

19 MR. MOLLOY: May we approach?

20 THE COURT: Yes, you may approach the bench. Just

21 a minute, Mr. Hayes.

22 (At the bench)

23 THE COURT: Let the record reflect the attorneys

24 are at the bench outside the jury's hearing.

25 MR. MOLLOY: I have never made this objection

Page 164



1 before. This is McCarthyism. This man is sitting up there

2 making totally unsubstantiated accusations with no

3 foundation laid whatsoever as to how he has this

4 information, what his participation is, and he is sitting

5 here in this courtroom degrading people. And it's just

6 McCarthyism, unless and until he can show some reasonable

7 basis for the information that he purports to have.

8 THE COURT: Well, I am concerned that he's using

9 this as a forum, and if he - if you want to establish his

10 opposition to the government, you don't need to go this far.

11 MR. GALBRAITH: Your Honor, and it must be on the

12 record. It must be on the record. Based on my

13 investigation, based on my being hired into this case, I

14 have certain preliminary steps that needed to be shown to me

15 before I would take this man seriously. My background

16 investigation shows that I have been totally unable to

17 impeach this man on what he has told me. If he - our

18 defense to this is a conspiracy against this man. Every one

19 of the lower folks, all the folks down the line have --

20 THE COURT: I am sorry, I didn't hear you.

21 MR. GALBRAITH: All the folks down the line, the

22 agents, the field agents, the field supervisors, they all

23 claim that no, there is no reason for us to have a

24 conspiracy against this man; there is no reason for us to

25 bring a charge that we would not think was true against this

Page 165



1 man. And I understand that's the reaction. But certainly I

2 should have the opportunity to show that there are people

3 outside this field supervisor who - who would have a great

4 reason to want to see this man --

5 THE COURT: But here is my concern. By all of

6 this elaborate detail that he's giving, for example, with

7 regard to Vincent Foster, he still has not shown that he

8 made anybody aware that he knows all of this.

9 MR. GALBRAITH: He has been published in major

10 magazines.

11 THE COURT: I am not talking about that. I am

12 saying that he has - he is just sitting there espousing a

13 theory and that's all. If he wants to show that he has

14 become known for having that theory, then that might make it

15 relevant here. But even then, it wouldn't be necessary to

16 get into this kind of detail.

17 MR. GALBRAITH: Okay.

18 MR. MOLLOY: May I ask Mr. Galbraith a question,

19 Your Honor?

20 Are you going to be able to bring any witnesses in here

21 to show, to substantiate the claims of knowledge that this

22 man has?

23 MR. GALBRAITH: Yes, I am.

24 THE COURT: Well, now, wait a minute, though.

25 Whether - regardless of what he knows, it has to be shown

Page 166



1 that someone in the government - government is a very broad

2 term.

3 MR. GALBRAITH: Yes.

4 THE COURT: -- knew that he had these theories.

5 MR. GALBRAITH: Yes, okay. Yes, ma'am.

6 MR. MOLLOY: I would like --

7 THE COURT: Now, my question is, are you going to

8 be able, through him or some other witness, establish that

9 the government knew he had these theories?

10 MR. GALBRAITH: Yes, ma'am.

11 THE COURT: That's my first question.

12 MR. GALBRAITH: Yes, ma'am.

13 THE COURT: Are you? Now, my second question is,

14 is all of this detail necessary?

15 MR. MOLLOY: What?

16 THE COURT: Is all of this detail necessary?

17 Because this gets to the heart of this objection.

18 MR. GALBRAITH: Yes, I understand that. I

19 understand that. Your Honor, you must admit, I have never

20 heard a story like this in this courtroom. I have never

21 heard a defense like this.

22 THE COURT: I have never seen aliens walk in that

23 door, but that doesn't mean it's admissible.

24 MR. GALBRAITH: Yes, ma'am.

25 THE COURT: My question is, is all of this detail

Page 167



1 necessary?

2 MR. GALBRAITH: Well, you know, I don't know, Your

3 Honor. It depends on how the jury rules after it's all

4 over. I will try to cut back on the detail. And I

5 certainly don't want to eviscerate the name of somebody.

6 But this man, this is what this man --

7 THE COURT: Unnecessarily.

8 MR. GALBRAITH: Unnecessarily.

9 THE COURT: Unnecessarily. Now, if this man has

10 gone out - if this man has gone out and let everybody in the

11 world know that he has a certain theory, no matter what it

12 is, and no matter in what detail, then that may make it

13 relevant.

14 MR. GALBRAITH: I understand, yes, ma'am.

15 THE COURT: But so far you haven't laid that

16 foundation at all, not at all.

17 MR. GALBRAITH: Given the nature and character of

18 what his testimony is, that's going to be hard to do to

19 begin with. But no, I understand the objection and I

20 understand what the Court's direction is on this, and I

21 don't think we need to go into a great deal of detail.

22 THE COURT: All right.

23 MR. GALBRAITH: And I'll certainly watch...

24 (In open court)

25 THE COURT: There has been an objection,

Page 168



1 Mr. Hayes, to the detail into which you are going. And I

2 have expressed some concern as to whether it's necessary.

3 I also want a foundation laid about any government

4 understanding of what this gentleman knows, and therefore

5 the basis for the defense's theory that the government was

6 somehow retaliating.

7 MR. GALBRAITH: Thank you, Your Honor.

8 THE COURT: This detail must be shown to be

9 necessary before we'll go any further at this - at this

10 level of detail.

11 MR. GALBRAITH: Yes. Thank you very much, Your

12 Honor.

13 BY MR. GALBRAITH:

14 Q. Mr. Hayes, have you been a spokesperson for the Fifth

15 Column in the past?

16 A. I have.

17 Q. Have you been interviewed by journalists as to your role

18 in the Fifth Column?

19 A. I have.

20 Q. Have you in fact been presented in the media as a

21 spokesperson for the Fifth Column?

22 A. That's correct, sir.

23 Q. In that media exposure, sir, have you alleged that this

24 Fifth Column obtained financial records on elected

25 individuals and tried to force their resignation --

Page 169



1 A. I have.

2 Q. -- regarding this? Have you alleged that this financial

3 information was so embarrassing that it has led to the

4 resignation of an elected official?

5 A. It has, and some of the officials have complained, but

6 to no avail.

7 Q. Have you alleged publicly, sir, that you delivered some

8 of these financial transactions to these officials?

9 A. Yes.

10 Q. Was - for what purpose did you deliver this financial

11 transaction information to these officials?

12 A. I would get into a match - there is more than one reason

13 here, and without getting into a match again with Your Honor

14 up here, there is two or three reasons, sir. One, it was to

15 get them to resign. And another reason is why we wanted

16 them to resign rather than to see them prosecuted. But the

17 main reason was we wanted them to resign. We couldn't get

18 them prosecuted.

19 Q. And is that an allegation that you have made publicly?

20 A. I have, sir.

21 Q. Have those allegations appeared in the media?

22 A. Yes, sir, they sure have.

23 Q. And have they just locally appeared or have they

24 appeared nationally or internationally?

25 A. No, it's been all over the United States, it's even been

Page 170



1 carried abroad, London Times Telegraph.

2 Q. In your opinion, sir, how many elected officials were

3 forced to resign as a result of your delivering information

4 to them?

5 A. Well, the only thing I wanted to go into without numbers

6 exactly, Mr. Galbraith - I am not authorized to go into the

7 rest of it - as far as history goes, last year was more

8 Senators and Congressmen resigned than any other time in the

9 history of the United States.

10 Q. How many Senators and Congressmen resigned in the last

11 session?

12 A. I don't know exact number as of right now, sir. I have

13 been incarcerated for two and a half months and don't --

14 MR. HATFIELD: Objection, Your Honor.

15 THE COURT: Sustained. The jury will disregard

16 that comment.

17 BY MR. GALBRAITH:

18 Q. Would you - would you have - have you been blamed or

19 taken the credit for forcing the resignation of those

20 officials?

21 A. A good number of them, yes, sir. A very good number of

22 them.

23 Q. Have you been described as such in the media that has

24 carried this information?

25 A. I have, yes, sir.

Page 171



1 Q. Then would it be fair to say that there is no

2 surprise -- excuse me. Have you been the front man for this

3 whole effort, sir?

4 A. I have, yes, sir. Yeah, I have been the front man for

5 the Fifth Column. I'm the spokesman.

6 Q. Have you, aside from - aside from this, what's going on

7 right here, has the government sought any kind of sanction

8 against you as - for your activities?

9 A. Some branches of it have, yes, sir.

10 Q. Can you, keeping it within this context and given the

11 judge's parameters that she told to you stick to --

12 THE COURT: I am not setting any parameters, I

13 just want him to answer the questions.

14 MR. GALBRAITH: Yes, ma'am.

15 THE COURT: And right now I think we're doing a

16 real good job.

17 MR. GALBRAITH: Thank you, Your Honor, I

18 appreciate that.

19 BY MR. GALBRAITH:

20 Q. I want you to be pertinent on your answers now,

21 Mr. Hayes.

22 A. Okay.

23 MR. GALBRAITH: Could you read back my last

24 question, Mr. Perkins?

25 THE COURT: Has the government sought any

Page 172



1 sanctions against you?

2 Q. Has the government sought any sanctions against you?

3 A. Certain departments have.

4 Q. Can you - keep it brief and to the point - can you

5 describe for the jury what might have been done regarding

6 your activities?

7 A. Well, the Federal Bureau of Investigation, I get

8 periodic visits from them quite often.

9 Q. Do you believe that it is this that led to your being -

10 testifying in front of a federal grand jury in Chicago?

11 A. That's part of it. And also the House subcommittees and

12 stuff, yeah. That's part of it.

13 Q. Mr. Hayes, do you feel that there are people or

14 officials within the government who are out to discredit

15 you?

16 A. Yes, they are out to keep their job and discredit me as

17 far as they can, yes, sir.

18 Q. Do you have a theory as to what branch of government

19 these people work for?

20 A. Sir?

21 Q. Do you have a theory as to what branch of people these

22 government work for - or what branch of government these

23 people work for?

24 A. Yes, sir, I do.

25 Q. And who do you think they belong to?

Page 173



1 A. Well, since the FBI is not a chartered organization,

2 they all come under the Department of Justice, sir.

3 Q. So you believe it's employees within the Department of

4 Justice; is that correct?

5 A. That's right.


Web Page http://www.aci.net/kalliste/
Posted here January 15, 1998