PROSECUTIONS STALLED; CIA INVOLVEMENT MAY BE REASON

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00965R000100010006-7
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 7
• Document Creation Date: December 22, 2016
• Document Release Date: March 20, 2012
• Sequence Number: 6
• Publication Date: April 15, 1985
• Content Type: OPEN SOURCE

ST Declassified in Part - Sanitized Copy Approved for Release 2012/03/20: CIA-R
COX NEWS SERVICE I
15 April 1985
PROSECUTIONS STALLED; CIA INVOLVEMENT MAY BE REASON
BY Andrew Alexander PROSECttTIOt
L1~~,,]7,,,,,i1''i .`. - IT SEEMED LIKEL'( EDITH REICH WOULD FACE {..,
Pfi1 fi~t t'1 Z..?
GAM TALI': Z NG TG FEDERAL AUTHORITIES 114 EARL
WHEN SHE BE +t O`iIHG AT THE FORTRESS-LIVE
DURING DRYS OF GRUELING O?.ESTI -
OFFICE IN LOWER MANHATTAN) THE }~t!STRIAMSRRN FORE AND TRA `=E
ATTORNE`t OF CRIME) C-.
REPRESENTATIVE TOLD AN INCREDIBLE TALE =TOA: .
ROLE IN ONE OF THE LARGEST CORPORATE FRAUDS IN RECENT HIS
-
HE O =i~t` MILLI IN RUSSIAN ORDERS
R^NaZNG CLOSE T 5
ADMITTED RR
iz , frt CORP.., A BIG RUBBER AND
NEPRLy' ALL PHONY - FOR C-OODS FROM ,. ?Ai__
OfifAOHIO- BUT SHE WAS HOT
C NY BASED IN DAYTONS
PLASTICS MANUFACTURING EUROPEAN A:s ENT' AND
INSISTED IN HER THICK EUR_ }mo;
ALONE IN WRO`!iD`OIblGs SHE IN1i:.
tRL1.1r UP TO NINE OTHERS BECAME TARGETS OF POSSIBLE RN.DI INDICTMENT ON
N
EyENTI USTOMS VIOLATIONS TO INC ME T
CHARGES ' R,NGING FROM U.S. C.=
PENT FEDERAL AGENCIE'S INVESTIGATED) EVIDENCE WAS GATHERED
',FE
FOUR DI
FOR A GRAND JURY AND INDICTMENTS SPECULATION THAT THOSE W SEEMED IMMINENTALLED AMID GROi3I; 's -
BUT NOW THREE `TEARS LRTEF;s THE PROBE
WITH POSSIBLE CRIMINAL LIABILITY MAY NOT rrtt
GOVERNMENT FEAR'S SENSITIVE INTELLIGENE
PROSECUTION BECAUSE THE GOVER
WEH3 TO TRIAL.
MIO1.4T BE RE'd ALED .IF TiE`i ..
NEWSPAPER'
GATHERING SECRETS
_ ION IS BOLSTERED BY FItlDIN%S OF A O:^{
lHA; EPEr4~AT `
ON WHICH SUGGEST THE CASE INVOLVES MUCH MRE TM:LLFO1~'
INVESTIGATI SHAREHOLDERS
MASSIVE CORPORATE SWINDLE THAT COST ~ sA~TORY OF INTERNATIONAL INTRIGUE
IT HAS REVEALED A MYSTERIOUS
INSTEAD) 46 - T T ,..I NNE AGENCY TO THE
THAT RUNS ALL THE WRYwFROM THE ENTRAL iNELG
KREMLIN - A STORY THAT HAS SPAWNED JSPAWNED FEARS AMONG SOME MAJOR FIGURES I:~
r HAT DISCLOSURE OF DETAILS COULD COST THEM) OR OTHERS' THEIR
THE" CASE T
LIVES=
HMONG THE FINDINGS: ,~ACf:SONs .A FORMER LAW
THAT P ROMIHEl T hEW YORK ATTORNEY STUART PARTNER 'ER I N A NEW YORK FIRM WHERE Cl; DIRECTOR WILLIAM CASEY. WAS
`fiERIOD
GATHERING IN THE SOVIET COLLEAGUES THAT HE ENGAGED IN IHTELLISENCE
UNSELS HAS
c0 UNION AT CASEY'S URGING
GAVt .ET
_----; 1DH REPRESENTED -REICH IN HER DEALINGS WITHDRYCO. MOSCOW AND1.1
I
i~HEN y ACit
IET INTERPRETER
S
OV
TO A
THAT JACKSON GREW CLOSE
WARNINGS SHE MIGHT BE CONNECTED WITH THE ,. ' HELPED ARRANGE
STAT DESPITE 11uITED STATES&
TO THE
FOR HER TO EMIGRATE
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.T REICH'S PSU TtJES DIARIES' ACCORDING TO SEPARATE
PERSONAL _ i t-_
SOURCES) MAY CONTAIN NOTATIONS OF CASH PAYMENTS AND EXPENSIVE GIFTS
SHE GAVE TO DOZENS OF SOVIET OFFICIAL=: SOME HIGH RANKING. A JU=T ICE
VEPART. {+ i YER IN .. aAST?, '', .. -NGTOH SAID SUC-H GIFTS) PROHIBITED IN THE
u ,E~~ ,T ,-11
SOVIET UNION! COULD ALSO VIOLATE THE #1.S. FOREIGN CORRUPT PRACTICE=
hCT.
TTHAT THE SOVIET EMBASSY IN RASHIHGTOH REPEATEDLY URGED THE KRE`LIN
TO CURTAIL BUSINESS DEALING: WITH REICH IN RUSSIA. YET SHE WAS
, b~ ti~ENT
PERMITTED TO CONTINUE DOING BUSINESS THERE AND RECEIVED V111TREAT?i,
DURING HER TRIPS TO !,OSCOW) LEAVING AT LEAST ONE SOVIET OFFICIAL IN
WASHINGTON "AMAZED ... THAT SHE IS STILL IN SOME KIND OF CONNECTION
T
WITH US.5'
- THAT THE RHITE HOUSE INITIATED RH INVESTIGATION OF REICH AND
TRADING COMPANIES SHE CONTROLLED WHICH EVENTUALLY FOCUSED ON
ALLEGATIONS SHE VIOLATED EXPORT RESTRICTIONS BY ILLEGALLY SHIPPING
EQUIPMENT AND PARTS - INCLUDING ENCODERS AND COMMUNICATION,
"SCRAMBLERS" - TO THE SOVIET UNION.
FEW OF THE MAJOR FIGURES IN THE CASE) INCLUDING REICH) WILL COiMEt T.
MOST OF THE 351 PEOPLE INTERVIEWED FOR THIS ARTICLE INSISTED ON
BY ANONYMITY) SOME FEARING REPRISAL B i THE CIA OR SOVIET AUTHORITIES.
KS.O.N.-t FS._IWTER'VIEWED... BUT,,,DECLINED__ TO. TALE. ABOUT.THE INTERPRETER,)
WHETHER HE GATHERED,-Ifi.TELLLGENCE_ OF. WHETHER HE HAD DISCUSSED-.-THE CASE
kfI Lis_ DIRECTOR. CASEY.
ASSOCIATE U.S. ATTORNEY DENNISON YOUNG IN NEW YORK DECLINED TO
COMMEHT)_ AS:_ DID THE_.1:...~.
t~1 JT ABOUT t#'J PACES. OF F-B,:_. AND CIA DOCUMENTS RELEASED IS MONTHS RG
UNDER THE tREEDOM OF INFORMATION ALT ALL SO HEAVILY EXCISED THAT
EVEN THE DATES ARE SLACKED OUT SUGGEST BOTH AGENCIES HAVE A DEEP
INTEREST IN THE ~'AYCO-REICH MATTER.
IN A i9-PAGE COURT' AFFIDAVIT DEFENDING CENSORSHIP OF THE DOCUMENT:{
DUBE SAID THEIR DISCLOSURE COULD CAUSE
CIA OFFICIAL LOUIS J. t__
C
"SERIOUS DAMAGE TO THE NATIONAL SECURITY" BY REVEALING DETAILS OF
iiCERTRIN_INT,ELLIGENCE ACTIVITIES CONDUCTED-BY.THE CIA."
"CERTAIN OF THE EMPLOYEES MENTIONED IN THESE DOCUMENTS SERVE UHn--
COVER IN SENSITIVE POSIT, IONS WITHIN THE AGENCY)" )UBE CONTINUED.
ii THE PUBLIC REVELATION OF THEIR AFFILIATION WITH THE CIA COULD WELL
BE USED TO COMPROMISE PAT) PRESENT OR FUTURE INTELLIGENCE OPERATIONS
.OR ACTIVITIES: TO IMPAIR THE USEFULNESS OF SUCH INDIVIDUALS TO THE
AGENCY;PINDOR TO PLACE THEIR LIVES) THE LIVES OF MEMBERS OF THEIR
FAMILIES) AND THE LIVES OF INTELLIGENCE SOURCES THEY HAVE WORKED WITH
IN JEOPARDY.')
T_HE._fiI-A-DOCUMENTS ARE SO SENSITI'VE) L' USE SAID) THAT HE
CONTENT. OF
REVERSED RN F;I DECISION TO DOWNGRADE THEM FROM ''SECRET'' TO
_
"CONFIDENTIAL."
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THE CENSORED DOCUMENTS HAVE PROMPTED SEEMINGLY ENDLESS ?UESTIONS BY ATTORNEYS REPRESENTING VARIOUS PARTIES IN THE CASE. WAS REICH AN
AGENT FOR THE Cil OR %THROWGH Ali ATTORNEY% SHE HA:. DENIED EOTi;,!
r r. GIVE t TO SOVIET T SO
DID THE 1`i ALLOW HER TO GVGIFTS AND MONEY TO OVIET OFFICIALS SO
THEY COULD BLACKMAIL OR "TURN" THEM INTO OPERATIVES FOR THE
AMERICANS ~DID JACKSON APPROACH CASEY ABOUT INTELLIGENCE GATHERING.
RHO FINALLY3 WHY NO INDICTMENTS?
BEGINNING TO WONDER IF THE U.S. ATTORNEY'S OFFICE IS EVER
GOING TO INDICT EDITH REICH OR ANYBODY ELSE BECAUSE THEY MIGHT BLOW
THE THING WIDE OPEN IF THEY DOS' SAYS NEW YORK ATTORNEY LESLIE
TRAGEF.3 WHO REPRESENTS AN INSURANCE COMPANY THAT HAS SUED DAYCO IN
CONNECTION WITH THE PHONY ORDERS. "THERE'S MORE HERE! OBVIOUSLY!
THAN ANYBODY KNOWS.''
it,
IT LOOKED LIKE AN OPEN AND SHUT CASE)'" ADDS CINCINNATI ATTORNEY
DOUGLAS COLE1 WHO RECENTLY SETTLED A SUIT HE BROUGHT OH BEHALF OF
SHAREHOLDERS AGAINST DAYCO FOLLOWING DISCLOSURE OF THE FAKE ORDERS.
`i1O THIS DAY' I DON`T UNDERSTAND WHY THEY (THE U.S. ATTORNEY 3S
OFFICE) HAVEN'T MOVED.s'
AT LEAST SEVEN OTHER ATTORNEYS) ALL OF WHOM HAVE REPRESENTED MAJOR
FIGURES IN THE CASE) HAVE SAID-PRIVATELY THEY ARE BEWILDERED BY THE
ABSENCE OF PROSECUTIONS.
SEVERAL SAY IT WAS NOT FOR LACK OF EVIDENCE.
SOURCES FAMILIAR WITH THE CASE SAY THAT IN EARLY 1983 THE U.S.
ATTORNEY'S OFFICE) WITH REICH'S COOPERATION! HAD FEDERAL AGENTS STAKE
OUT HER FASHIONABLE PARK AVENUE APARTMENT IN AN EFFORT TO CATCH t4Q4
EXECUTIVE OF A LARGE b.L. CORPORATION ACCEPTING A $253~OC, PAYMENT HE
HAD ALLEGEDLY DEMANDED FROM HER, IN RETURN FOR APPROVING AN ORDER CF
GOODS FOR THE SOVIET UNION. THE AGENTS MARKED THE BILLS FOR LATER
IDENTIFICATION AND RECORDED THE MAWS CONVERSATION AS HE ACCEPTED THE
MONEY! THE SOURCES SAY) BUT HE HAS NEVER BEEN INDICTED.
IN ANOTHER CASE) A FORMER HIGH-RANKING DAYCO EXECUTIVE OFFERED THE
U.S. ATTORNEY'S OFFICE INFORMATION ON THE FAKE SOVIET ORDERS
CONTROVERSY AS WELL AS WHAT HE BELIEVED TO BE FINANCIAL
IRREGULARITIES BY FELLOW COMPANY MANAGERS. GENE LOVORN3 WHO LEFT AS
DAYCO'S VICE PRESIDENT FOR TAXATION IN LATE SUMMER OF 1902! SAID HE
~. .1
TWICE FLEW TO NEW YORK) WHERE HE SPENT HOURS WITH AGENTS OF THE tIR:S3
CSI AND ASSISTANT U. S. ATTORNEYS.
AT ONE POINT! HE RECALLS) AN iF AGENT TOLD ASSISTANT U.S. ATTORNEY
JANE PARVER3 WHO WAS HANDLING THE CASE THEN! THAT LOVORN "COULD GO
TO THE GRAND JURY TOMORROW. 1!E WOULDN'T HAVE TO PREP THIS GUY OR
ANYTHING. E COULD PROBABLY GET AN INDICTMENT RIGHT NOW." BUT!
LOVORN SAYS) HE WAS NEVER CALLED BEFORE A GRAND JURY.
LIKEWISE, LOVORH SAYS THAT IN THE SPRING OF i98.3 THE 'IRS SPECIAL
AGENT) ERROL MILLMAH3 TELEPHONED HIM AND SAID HE AND ANOTHER AGENT
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SAE EVEN
WOULD BE COWING TO !.{A'. TON TO 1NVE_TIGATE WITHIN A MONTH.
ASKED ME ABOUT WHERE TO STAY CLOSE TO DAYCO AND I RECOMMENDED A
HOTEL))) SAYS LOVDRN: HIMSELF A FORMER IRS SPECIAL AGENT) "BUT I
NEVER HEARD FROM THEM."
MILLMA14 DECLINES COMMENT ON THE CASE. FARVER) HIGHLY REGARDED FOR
HER PROSECUTION OF FUGITIVE FINANCIER MARC RICH) LEFT THE GOVERNMENT
LATE LAST YEAR TO ENTER PRIVATE PRACTICE AND DID NOT RETURN TELEPHONE.
CALLS.
JACKSON) A TALL AND PERPETUALLY TANNED 56-YEAR-OLD) SERVED IN THE
PRESTIGIOUS NEW YORK FIRM OF ROGERS & WELLS DURING A PERIOD IN THE
MID-10S WHEN CASEY MRS COUNSEL TO THE FIRM. IN i9r"i") JACKSON MOVED UP
FsPK AVENUE TO BECOME A NAME PARTNER IN THE FIRM OF BURNS JACKSON
SUMMIT & SPITZER WHILE CASEY REMAINED COUNSEL TO ROGERS & WELLS
BEFORE BECOMING CIA DIRECTOR IN 1.984.
IT WAS-DURING THAT PERIOD IN THE 19(Us AND INTO THE EARLY .ASis THAT
JACKSON BECAME INVOLVED WITH REICH IN HER SOVIET TRADE ACTIVITIES.
AND IT WAS DURING THEIR FRE?UENT TRIPS TO MOSCOW THAT, ACCORDING TO
SOURCES) HE BECAME CLOSE WITH A TALL) SANDY-HAIRED SOVIET INTERPRETER.
EDITH REICH'S DAUGHTER) JUDITH) RECALLS THE RELATIONSHIP CAUSED
CONCERN AMONG HER FAMILY) WHICH SUSPECTED THE RUSSIAN WOMAN OF BEING
A KOu AGENT. AT ONE POINT) SHE REMEMBER.) HER FATHER. :WHO DIED IN
LATE i98W ANGRILY ADMONISHED JACKSON THAT HIS INVOLVEMENT WITH THE
WOMAN COULD HURT THE FAMILY'S BUSINESS.
BUT JACKSON CONTINUED TO SEE HER AND ACCORDING TO JUDITH REICH AND
FORMER LAW PARTNERS) HELPED HER EMIGRATE TO THE lNITED STATES BY
ARRANGING HER MARRIAGE TO AN AMERICAN. ONCE IN NEW YORK THE WOMAN)
WHO TOOK THE MARRIED NAME HELEN JOMSON) SOON DIVORCED. ACQUAINTANCE'S
SAY THEY DO NOT KNOW WHERE SHE IS NOW LIVING.
THE HARVARD-EDUCATED JACKSON EVENTUALLY LEFT HIS LAW FIRM IN THE
SPRING OF 3.982 IN A BITTER DISPUTE WITH FELLOW PARTNERS AFTER
RECEIVING WHAT HE SAYS WAS "ROUGHLY $3 MILLION)) FROM REICH THAT HE
DID NOT DEPOSIT INTO THE FIRM'S GENERAL ACCOUNT. THE MATTER CAME T10 A
HEAD IN LATE MAY IN THE FIRM'5 ART-FILLED MANHATTAN OFFICES THE DAY
AFTER JACKSON) REACHED BY TELEPHONE AT LONDON'S HEATHROW AIRPORT A':
HE WAS ABOUT TO BOARD A MOSCOW-BOUND PLANE) WAS ORDERED HOME TO
DEFEND HIMSELF.
ACCORDING. TO FELLOW PARTNERS WHO ATTENDED THE. MEETING DURING THE
COURSE OF THE WIDE-RANGING SESSION JACKSON ACKNOWLEDGED THAT:
- HE HAD BEEN INVOLVED FOR SOME TIME IN GATHERING INFORMATION FOR
THE CIA ON SOVIET BUSINESS OPERATIONS.
C" Rued
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5.
- HE HAD LETTERS FROM CIA DIRECTOR CASEY COMPLIMENTING HIS
INTELLIGENCE WORK AND ENCOURAGING HIM TO CONTINUE HIS REPORTS.
- JACKSON HAD BEEN WARNED THAT HIS CIA WORK MIGHT PLACE HIS LIFE IN
DANGER AND THAT HE HAD TAKEN CARE TO PRESERVE HIS CORRESPONDENCE WITH
CASEY IN A SAFE DEPOSIT BOX IN CASE SOMETHING HAPPENED TO HIM.
- HE ACKNOWLEDGED BEING CAUTIONED THAT THE RUSSIAN INTERPRETER, NIGHT
BE INVOLVED WITH THE SOVIET SECRET SERVICE.
IN SOME WAYS REICH) NOW IN HER EARLY COs) 35 SIMILAR TO JACKSON -
BRILLIANT) HARD-DRIVING AND OUTWARDLY SELF-ASSURED. PUT UNLIKE
JACKSON SHE HAS A MERCURIAL PERSONALITY THAT CAN @UICfLY SHIFT FROM
SHOUTING TO POUTING.
HER CREDIBILITY SUFFERED BADLY DURING THE LITIGATION WITH C'AYCO,
PARTLY BECAUSE A COURT-ORDERED PSYCHIATRIC EXAMINATION SHOWED SHE
BELIEVES DEEP DOWN THAT "SHE CAN GET AWAY WITH ANYTHING."" FURTHER)
SHE FAILED TO PRODUCE ANY CONCRETE EVIDENCE TO BACK HER MAJOR CLAI?1
THAT DAYCO CHAIRMAN RICHARD J. JACOB CONCEIVED THE FAKE ORDERS SCHEME
AND DEMANDED AND RECEIVED $;; MILLION IN KICKBACKS FROM $120 MILLION IN
ADVANCE COMMISSIONS HE APPROVED TO HER.
THOSE WHO KNOW HER SAY SHE HAS A PENCHANT FOR GIFT-GIVING AS A NAY
OF DOING BUSINESS. AND ALTHOUGH THERE IS NO EVIDENCE TO SUPPORT HER
CLAIM JACOB GOT MONEY) THE COMPANY FIRED TWO EXECUTIVES AND ANOTHER
RESIGNED AFTER IT WAS SHOWN SHE HAD PAID THEM AMOUNTS RANGING FROM
$40) (iOU~ To $j33) ~j~Jf1.
YOU CAN'T TRUST PEOPLE WHO WON'T TAKE BRIBES)") SHE ONCE CRACKED
TO WORKERS IN THE NEW YORK OFFICE OF FOREIGN TRANSACTIONS CORP.) THE
INTERNATIONAL TRADING COMPANY SHE HEADED.
ONE SOURCE SAYS THAT ONCE BEFORE LEAVING FOR RUSSIA REICH PURCHASES
ABOUT 30 EXPENSIVE WATCHES FROM TIFFANY & CO.) THE JEWELER) TO SE
GIVEN AS GIFTS TO SOVIET OFFICIALS. SHEN REICH FILED FOR BANKRUPTCY
LAST FALL - SHE LISTED ASSETS OF $2.6 MILLION AND LIABILITIES OF
MILLION - AMONG HER DEBTS WAS MORE THAN $2C2*00uu0 OWED TO TIFFANY'S.
MORE SERIOUS ARE NOTATIONS IN HER PERSONAL BUSINESS DIARIES OF CASH
PAYMENTS TO SOVIET OFFICIALS. ONE SOURCE WHO HAS SEEN THE DIARIES)
WHICH ARE NOW IN CUSTODY OF THE U.S. ATTORNEY'S OFFICE) SAYS THE
NOTATIONS INDICATE SEVERAL OFFICIALS GOT TENS OF THOUSANDS OF DOLLARi.
REICH WAS ONCE OVERHEARD SAYING IN REFERENCE TO THE DIARIES THAT IF
RUSSIAN AUTHORITIES EVER FOUND OUT SHE HAD BEEN PAYING OFFICIALS
THERE) "I'LL BE KILLED.))
AS LONG AGO AS LATE i9S2 THE SOVIET EMBASSY IN WASHINGTON) WORRIED
BY REICH'S INVOLVEMENT IN ARRANGING THE FAKE RUSSIAN ORDERS) URGED
THE KREMLIN TO HALT ALL BUSINESS DEALINGS WITH HER) ACCORDING TO A
SOVIET DIPLOMAT SPEAKING ON CONDITION HE NOT BE NAMED.
0
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6.
BUT SHE CONTINUED TO TRAVEL TO MOSCOW AND) ACCORDING TO THOSE WHO
ACCOMPANIED HER) NEVER HAD TO ENDURE THE LONG PROCESS OF CLEARING
SOVIET CUSTOMS. SOMETIMES THE GOVERNMENT EVEN PROVIDED A LIMOUSINE TO
TAKE HER TO HER HOTEL.
IN AN ODD TWIST) DAUGHTER JUDITH - ONCE IN THE INTERNATIONAL TRACE
BUSINESS WITH EDITH REICH - LAST YEAR ENTERED INTO A SECRET AGREEMENT
WITH UAYCO TO PROVIDE THE COMPANY WITH INFORMATION ABOUT HER MOTHER
AND HER FINANCES. IN RETURN) DAYCO AGREED NOT TO SEEK LEGAL ACTION
AGAINST JUDITH.
USING PRIVATE INVESTIGATORS) DAYCO HAS CONDUCTED A WORLDWIDE SEARCH
FOR MONEY IT BELIEVES EDITH REICH MAY HAVE HIDDEN IN ACCOUNTS
OVERSEAS) INCLUDING SWITZERLAND. IN ADDITION TO $i3 MILLION IN
ADVANCE COMMISSIONS DAYCO PAID HER FOR THE PHONY SOVIET ORDERS) .SIG=H
WAS ALSO APPARENTLY DOING A SIZABLE VOLUME OF LEGITIMATE BUSINESS
WITH THE RUSSIANS.
ACCORDING TO DAUGHTER JUDITH) AT THE TIME SHE HAS IN BUSINESS WITH
HER MOTHER BETWEEN MID-19S AND FEBRUARY 2984 THEY PLACED $i9
MILLION WORTH OF BONA FIDE SOVIET CONTRACTS WITH AMERICAN COMPANIES
OTHER THAN DAYCO. THE TOTAL PROFIT) SHE SAID) WAS $9 MILLION.
THE DAYCO COMMISSIONS PLUS THE PROFIT FROM THE LEGITIMATE NON-,tA`iCO
BUSINESS MEANT A TOTAL OF $? MILLION WENT TO REICH AND HER
COMPANIES) FOREIGN TRANSACTIONS CORP.) AND AN AFFILIATE) TRACHEt; LTO.
IN LONDON. BUT ATTORNEYS AND INVESTIGATORS HAVE BEEN UNABLE TO TRACE
WHERE IT ALL WENT.
EVEN IN BANKRUPTCY) REICH CONTINUES TO LIVE WELL. WHEN SHE WAS
FORCED OUT OF HER SPACIOUS PARK AVENUE APARTMENT AS PART OF THE
BANKRUPTCY PROCEEDING) SHE MOVED TO RN APARTMENT WHERE) ACCORDING TO
MANAGERS) SHE IS PAYING RENT OF MORE THAN $`1)-IJ A MONTH. SHE HAS
CONTINUED HER MAID SERVICE: ACCORDING TO A FAMILY MEMBER) AND
RECENTLY MADE A TRIP TO LONDON.
ALSO, COURT RECORDS SHOW THAT HER BANKRUPTCY ATTORNEYS LATE LAST
YEAR WERE PAID A TOTAL OF $i5600O IN ADVANCE TO REPRESENT HER. THE,
BULK OF THE MONEY WAS IN THE FORM OF CHECKS FROM VARIOUS BROOKLYN
CORPORATIONS MADE OUT TO HER SON) MICHAEL) WHO ENDORSED THEM TO THE
LAWYERS.
PRECISELY WHAT TYPE OF HON-DAYCO BUSINESS REICH WAS DOING IN THE
SOVIET UNION HAS BEEN OF INTEREST TO BOTH THE FBI AND U.S. CUSTOMS
AGENTS WHO INVESTIGATED TO SEE IF SHE WAS SHIPPING RESTRICTED ITEMS
TO THE SOVIETS.
*nued
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AN INTERNAL FOREIGN TRANSACTIONS CORP. REPORT) PREPARED IN MID-1`6
BY AN EMPLOYEE AFTER HE WAS INTERROGATED BY CUSTOMS SERVICE AND FBI
AGENTS) SHOWS THAT THEY ASKED HIM ABOUT AN ALLEGED SHIPMENT OF
"ENCODERS ANDOR SCRAMBLERS" AS WELL AS UNSPECIFIED ITEMS WHICH THEY
SAID HAD BEEN "ILLEGALLY" TAKEN INTO THE SOVIET UNION IN A
SUITCASE. THE AGENTS DECLINED COMMENT AND THE EMPLOYEE) DAVID
REECASSIS' COULD NOT BE REACHED.
CURIOUSLY' THE REPORT - A COPY OF WHICH WAS OBTAINED BY COX
NEWSPAPER_ - eUOTES THE AGENTS AS SAYING THEIR INVESTIGATION HAD BEEN
INITIATED BY THE WHITE HOUSE EVEN BEFORE THE DRYCO SCANDAL BECAFE
PUBLIC IN EARLY 11582.
LIKEWISE) THE ROUTING FORM OH ONE OF THE CENSORED FBI DOCUMENTS
OBTAINED UNDER THE FREEDOM OF INFORMATION ACT APPEARS TO INDICATE
THAT IT HAS SENT FROM FST DIRECTOR WILLIAM WEBSTER TO THE WHITE t;Ot E.
ASKED WHY THE WHITE HOUSE WOULD BE INVOLVED IN A MATTER NORMALLY
HANDLED EXCLUSIVELY BY LAW ENFORCEMENT AGENCIES) A SPOKESWOMAN SAI :
SHE COULD OFFER NO EXPLANATION.
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