Willis Carto archive

Including information about his associates

Legion v Carto, Trial transcript, Volume 2


Previous | Next

page 159

 
 1           COURT OF APPEAL OF THE STATE OF CALIFORNIA
 
 2                    FOURTH APPELLATE DISTRICT
 
 3                          DIVISION ONE
 
 4  ______________________________
                                  )
 5  LEGION FOR THE SURVIVAL OF    )
    FREEDOM, INC.,                )    DCA. NO. DO27959
 6                                )
                   PLAINTIFF AND  )    FROM SAN DIEGO COUNTY
 7                 RESPONDENT,    )
                                  )    HON. RUNSTON G. MAINO
 8       VS.                      )
                                  )    TRIAL PROCEEDINGS
 9  WILLIS CARTO, HENRY FISCHER,  )
    VIBET, INC., LIBERTY LOBBY,   )
10  INC., ET. AL.,                )
                                  )
11                 DEFENDANTS AND )
                   APPELLANTS.    )
12  ______________________________)
 
13
                     REPORTER’s APPEAL TRANSCRIPT
14
                          NOVEMBER 1, 1996
15
                              VOLUME 2
16
                            PAGES 159-207
17
 
18
    APPEARANCES:
19
         FOR THE PLAINTIFF AND    JACQUES BEUGELMANS AND
20       RESPONDENT:              THOMAS MUSSELMAN
                                  1901 AVENUE OF THE STARS
21                                CENTURY CITY, CA 90067
 
22       FOR THE DEFENDANTS AND   PETER J. PFUND
         APPELLANTS:              2382 S.E. BRISTOL
23                                SUITE A
                                  NEWPORT BEACH, CA 92660
24
 
25
 
26
                                  BARBARA J. SCHULTZ, CSR, RPR
27                                CSR NO. 8021
                                  OFFICIAL REPORTER
28                                VISTA, CALIFORNIA
			
			

page  160
 
 1        IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA
 
 2                IN AND FOR THE COUNTY OF SAN DIEGO
 
 3  DEPARTMENT 11                    HON. RUNSTON G. MAINO
 
 4
    _____________________________
 5                               )
    LEGION FOR THE SURVIVAL OF   )
 6  FREEDOM, INC.,               )
                                 )
 7                  PLAINTIFF,   )           NO. N64584
                                 )
 8           VS.                 )
                                 )
 9  WILLIS CARTO, HENRY FISCHER, )
    VIBET, INC., LIBERTY LOBBY   )
10  INC., ET. AL.,               )
                                 )
11              DEFENDANTS.      )
    _____________________________)
12
 
13                       REPORTER’s TRANSCRIPT
 
14                        NOVEMBER, 1, 1996
 
15
    APPEARANCES:
16
        FOR THE PLAINTIFF:       JACQUES BEUGELMANS AND
17                               THOMAS MUSSELMAN
                                 1901 AVENUE OF THE STARS
18                               CENTURY CITY, CA 90067
 
19
 
20      FOR THE DEFENDANTS:      WAIER AND URTNOWSKI
                                 BY:  RANDALL S. WAIER
21                               1301 DOVE STREET
                                 NEWPORT BEACH, CA 92660
22
 
23
        FOR THE DEFENDANT        MARK LANE
24      LIBERTY LOBBY, INC.:     300 INDEPENDENCE AVENUE, S.E.
                                 WASHINGTON, D.C. 20003
25
 
26
                                 BARBARA J. SCHULTZ, CSR, RPR
27                               CSR NO. 8021
                                 OFFICIAL REPORTER
28                               VISTA, CALIFORNIA
			
			

page  161
 
 1  VISTA, CALIFORNIA, NOVEMBER 1, 1996, DEPARTMENT 11:
 
 2
 
 3       THE COURT:  GO AHEAD WITH YOUR CROSS-EXAMINATION FROM
 
 4  MR. MARCELLUS.
 
 5       MR. WAIER:  THANK YOU.
 
 6                  CROSS-EXAMINATION (CONTINUED)
 
 7  BY MR. WAIER:
 
 8       Q    GOOD MORNING, MR. MARCELLUS.
 
 9       A    GOOD MORNING, MR. WAIER.
 
10       Q    WE DONE THIS BEFORE?
 
11       A    YES, I HAD THE PLEASURE OF ANSWERING YOUR
 
12  QUESTIONS NUMEROUS TIMES IN THE PAST.
 
13       Q    IN FACT, YOU ARE FAMILIAR WITH LITIGATION THAT
 
14  TOOK PLACE BETWEEN THE HISTORICAL EDUCATION FOUNDATION
 
15  VERSUS LEGION FOR SURVIVAL OF THE FREEDOM, INC., CONCERNING
 
16  A $187,000 PROMISSORY NOTE?
 
17       A    WAS THAT THE FIRST H.E.F. CASE?
 
18       Q    IN FRONT OF JUDGE ROSS?
 
19       A    YES.
 
20       Q    AND YOU RECALL TESTIFYING IN THAT CASE?
 
21       A    YES.
 
22       Q    BEFORE WE GET INTO THAT, YOU INDICATED YOUR
 
23  BACKGROUND WITH THE LEGION.  DO YOU RECALL THAT?
 
24       A    DO YOU RECALL MY TESTIMONY ABOUT --
 
25       Q    YES.
 
26       A    — THE BACKGROUND WITH THE LEGION?
 
27       Q    YES, IN FACT, YOUR ROLE IN THE LEGION SINCE THE
 
28  TIME YOU WERE HIRED.
			
			

page  162
 
 1       A    I RECALL TESTIFYING TO THAT, YES.
 
 2       Q    AND YOU INDICATED THAT YOU WERE HIRED SOMETIME IN
 
 3  19 — I BELIEVE YOU SAID '78?
 
 4       A    YES.
 
 5       Q    WHO HIRED YOU?
 
 6       A    AS I RECALL, I WAS HIRED BY DAVID MCCALDEN AFTER
 
 7  HAVING BEEN INTERVIEWED ALSO BY MR. CARTO.
 
 8       Q    WHY WERE YOU INTERVIEWED BY MR. CARTO?
 
 9       A    WELL, MR. CARTO WAS CONSULTANT OR WORKED — HE
 
10  HAD SOME CAPACITY WITH THE COMPANY, AND I JUST PRESUMED THAT
 
11  WAS THE CASE.  SO WHEN HE INTERVIEWED ME, I HAD NO
 
12  OBJECTION.
 
13       Q    IN FACT, ISN'T IT TRUE THAT YOU REFERRED TO
 
14  MR. CARTO AS THE FOUNDER FOR THE INSTITUTE OF HISTORICAL
 
15  REVIEW?
 
16       A    YES.
 
17       Q    WHAT DID YOU MEAN WHEN YOU REFERRED TO HIM AS
 
18  “FOUNDER"?
 
19       A    WELL, IN FACT, IT WAS MY SUGGESTION THAT HIS NAME
 
20  FOUNDER BE PUT ON THE LETTERHEAD.  THE REASON I SUGGESTED
 
21  THAT WAS BECAUSE AT THE TIME THE INSTITUTE WAS FORMED AS
 
22  A — A TRADE NAME FOR THE LEGION, OR AN ENTITY OF THE
 
23  LEGION, HE WAS INSTRUMENTAL IN — I BELIEVE HE MAY HAVE
 
24  EVEN HAD SOME CONTRIBUTION TO DECIDING ON THE NAME AND THE
 
25  CONTENT OF ITS MATERIALS, WHAT WOULD BE PUBLISHED AND SO
 
26  FORTH, ALONG WITH MR. MCCALDEN.
 
27       Q    IN FACT, MR. CARTO WAS INSTRUMENTAL IN YOU BEING
 
28  HIRED BY THE LEGION; ISN'T THAT CORRECT?
			
			

page  163
 
 1       A    I DON'T KNOW THAT.
 
 2       Q    IN FACT, UP UNTIL 1993, ISN'T IT TRUE THAT ALL
 
 3  MAJOR EDITORIAL DECISIONS OF THE LEGION WERE APPROVED BY
 
 4  MR. CARTO?
 
 5       A    NO.
 
 6       Q    IN FACT, DIDN'T YOU TESTIFY YESTERDAY THAT YOU
 
 7  WERE CONCERNED THAT MR. CARTO WAS GOING TO CHANGE THE
 
 8  EDITORIAL VIEWS OF THE LEGION, AND THEREFORE, THE STAFF
 
 9  BECAME CONCERNED AS TO WHAT AUTHORITY HE HAD TO DO THAT?
 
10       A    YES.
 
11       Q    IN FACT, ISN'T IT TRUE THAT YOU WERE CONCERNED IN
 
12  EARLY 1993 THAT MR. CARTO WAS GOING TO FIRE MR. WEBER AS
 
13  EDITOR OF THE I.H.R.; ISN'T THAT CORRECT?
 
14       A    YES.
 
15       Q    YOU WERE CONCERNED BECAUSE AT THAT POINT IN TIME,
 
16  YOU BELIEVED MR. CARTO CONTROLLED THE LEGION; ISN'T THAT
 
17  TRUE?
 
18       A    I DID.  I DID OBSERVE OVER THE YEARS, MR. CARTO
 
19  EXERCISED A GREAT AMOUNT OF CONTROL OVER THE LEGION, YES.
 
20       Q    IN FACT, YOU TOOK DIRECTION FROM MR. CARTO, DIDN'T
 
21  YOU?
 
22       A    I DID.
 
23       Q    IN FACT, YOU TOOK DIRECTION FROM MR. CARTO WHILE
 
24  YOU WERE PRESIDENT OF THE LEGION; ISN'T THAT TRUE?
 
25       A    NO.
 
26       Q    YOU NEVER TOOK ANY DIRECTION FROM HIM WHILE YOU
 
27  WERE PRESIDENT?
 
28       A    I WAS NOT PRESIDENT UNTIL AFTER MR. Carto’s
			
			

page  164
 
 1  RELATIONSHIP WAS TERMINATED.
 
 2       Q    I'M SORRY.  YOU INDICATED THAT YOU WERE A DIRECTOR
 
 3  OF THE LEGION; ISN'T THAT CORRECT?
 
 4       A    NO.  I INDICATED I WAS DIRECTOR — NOT A
 
 5  DIRECTOR.
 
 6       Q    THERE WAS SOME CONFUSION IN YOUR TESTIMONY.  SO
 
 7  WE'RE CLEAR ON THAT, WHEN YOU SAID YOU WERE A DIRECTOR OF
 
 8  THE LEGION, WHAT DID YOU MEAN BY THAT?
 
 9       A    I MEANT I WAS DIRECTOR AS A MANAGING DIRECTOR,
 
10  WHICH MEANS THAT I RAN THE DAY-TO-DAY OPERATIONS.
 
11       Q    SIMILAR TO A PRESIDENT OF A CORPORATION?
 
12       A    I SUPPOSE OF PRESIDENT OR C.E.O.
 
13       Q    YOU UNDERSTAND THAT WAS YOUR FUNCTION?
 
14       A    YES.
 
15       Q    AND YOU UNDERSTAND YOU HAD AUTHORITY ALONG WITH
 
16  THE TITLE OF DIRECTOR?
 
17       A    I UNDERSTOOD I HAD A CERTAIN DEGREE OF AUTHORITY,
 
18  YES.
 
19       Q    WHERE DID YOU GET THE UNDERSTANDING FROM?
 
20       A    I GOT THAT UNDERSTANDING FROM EXPERIENCE IN
 
21  RUNNING THE DAY-TO-DAY OPERATIONS OF THE LEGION AND KNOWING
 
22  WHAT THINGS MR. CARTO WOULD BE INTERESTED IN, WHAT SHOULD BE
 
23  BROUGHT TO HIS ATTENTION, WHAT SHOULD BE DISCUSSED WITH HIM,
 
24  WHAT WERE THINGS I COULD DO ON MY AUTHORITY.
 
25       Q    WHY DID YOU THINK YOU SHOULD BRING THINGS TO
 
26  MR. Carto’s ATTENTION WHILE DIRECTOR?
 
27       A    I WAS UNDER AN AGREEMENT WITH THE LEGION ITSELF TO
 
28  REPORT TO MR. CARTO.
			
			

page  165
 
 1       Q    WHAT AGREEMENT?
 
 2       A    AN AGREEMENT THAT STATED THAT I WAS TO REPORT TO
 
 3  MR. CARTO, WHO WAS TO REPORT TO THE BOARD.
 
 4       Q    WHO DID YOU ENTER THIS AGREEMENT INTO WITH?
 
 5       A    I BELIEVE THE CONTRACT WAS SIGNED BY LAVONNE FURR.
 
 6       Q    DID YOU HAVE DISCUSSION WITH MR. CARTO ABOUT THE
 
 7  AGREEMENT BEFORE IT WAS SIGNED?
 
 8       A    I DON'T THINK SO.
 
 9       Q    WHEN DID YOU SIGN THE AGREEMENT?
 
10       A    I SIGNED — I DON'T RECALL IF I SIGNED IT --
 
11  ORIGINAL AGREEMENT WHEN I STARTED WORKING THERE.  I KNOW
 
12  WHEN I CAME BACK TO WORK FOR THE LEGION IN '87, I SIGNED
 
13  SUCH AN AGREEMENT.
 
14       Q    AND SO I'M CLEAR, YOUR TESTIMONY YESTERDAY, FROM A
 
15  PERIOD OF APPROXIMATELY EARLY 1986, FIRST COUPLE OF MONTHS
 
16  1986, THROUGH MID 1987, YOU WERE NO LONGER INVOLVED WITH THE
 
17  LEGION; IS THAT CORRECT?
 
18       A    I WAS TO SOME EXTENT INVOLVED WITH THE LEGION.  I
 
19  WAS NOT A REGULAR PAID EMPLOYEE.
 
20       Q    SO I'M CLEAR ALSO, THIS AGREEMENT THAT YOU WERE
 
21  WORKING UNDER HAD AN AGREEMENT THE FIRST TIME YOU WERE WITH
 
22  THE LEGION FROM 1978 TO THE FIRST COUPLE OF MONTHS 1986?
 
23       A    I DON'T RECALL IF I WAS WORKING UNDER A FORMAL
 
24  AGREEMENT, BUT THAT WAS MY UNDERSTANDING.  AND IT WAS THE
 
25  SAME UNDERSTANDING I HAD WHEN I CAME BACK TO WORK AND SIGNED
 
26  THE FORMAL AGREEMENT.
 
27       Q    DID YOU BELIEVE AT THE TIME THIS AGREEMENT WAS
 
28  SIGNED BY LAVONNE FURR?
			
			

page  166
 
 1       A    I BELIEVE IT WAS LAVONNE, YES.
 
 2       Q    YOU BELIEVED LAVONNE FURR HAD AUTHORITY TO SIGN
 
 3  THE AGREEMENT, DIDN'T YOU?
 
 4       A    IT DIDN'T OCCUR TO ME SHE DID NOT.
 
 5       Q    YOU BELIEVED SHE DID?
 
 6       A    YES.
 
 7       Q    BECAUSE YOU BELIEVED THAT SHE WAS A MEMBER OF THE
 
 8  LEGION; ISN'T THAT TRUE?
 
 9       A    NO.
 
10       Q    WHAT AUTHORITY DID YOU THINK LAVONNE FURR HAD TO
 
11  SIGN THE AGREEMENT ON BEHALF OF THE LEGION IN 1987?
 
12       A    SHE WAS AN OFFICER OF THE CORPORATION AND
 
13  DIRECTOR.
 
14       Q    DID YOU HAVE ANY OF THE OTHER DIRECTORS OF THE
 
15  CORPORATION SIGN?
 
16       A    DID I HAVE ANY OF THE OTHER OFFICERS?
 
17       Q    YEAH.  WERE THERE DIRECTORS' NAMES ON THAT
 
18  CONTRACT THAT YOU SIGNED?
 
19       A    AS I RECALL, HERS WAS THE ONLY ONE.
 
20       Q    RIGHT.  AND ARE YOU AWARE OF ANY BOARD MEETING
 
21  THAT APPROVED THAT CONTRACT?
 
22       A    NO.
 
23       Q    YOU BELIEVED THAT CONTRACT WAS VALID, THOUGH,
 
24  DIDN'T YOU?
 
25       A    YEAH, I DID.
 
26       Q    BECAUSE LAVONNE FURR SIGNED IT; ISN'T THAT RIGHT?
 
27       A    IT COULD HAVE BEEN A CONTRACT FROM WILLIS CARTO,
 
28  AND I WOULD HAVE PROBABLY ACCEPTED IT, TOO.
			
			

page  167
 
 1       Q    SO YOU BELIEVED, AT LEAST TO LAVONNE FURR — TO
 
 2  LAVONNE FURR, YOU BELIEVED THE CONTRACT WAS VALID AND BOUND
 
 3  THE LEGION; ISN'T THAT CORRECT?
 
 4       A    YES.
 
 5       Q    NOW, AS DIRECTOR OF THE LEGION, YOU HAD MANY
 
 6  FUNCTIONS; ISN'T THAT CORRECT?
 
 7       A    THAT’s CORRECT.
 
 8       Q    YOU SAID YOU OVERSAW THE DAY-TO-DAY AFFAIRS OF THE
 
 9  NONPROFIT CORPORATION?
 
10       A    YES.
 
11       Q    AND YOU UNDERSTOOD, BEING A NONPROFIT CORPORATION,
 
12  THAT IT WAS GUIDED BY CERTAIN PRINCIPLES, CORPORATE
 
13  PRINCIPLES FOR FUNDING, BANKING, SO FORTH, UNLIKE PROFIT
 
14  CORPORATIONS?
 
15       A    I UNDERSTOOD THERE WAS A DIFFERENCE BETWEEN
 
16  NONPROFIT AND PROFIT CORPORATIONS, YES.
 
17       Q    IN FACT, YOU UNDERSTOOD THAT THERE WAS MORE
 
18  ACCOUNTABILITY FOR NONPROFIT CORPORATIONS?
 
19       MR. MUSSELMAN:  OBJECTION.  VAGUE.
 
20       MR. WAIER:  WITHDRAW THE QUESTION.
 
21
 
22  BY MR. WAIER:
 
23       Q    NOW, AS PART OF YOUR FUNCTIONS OF RUNNING THE
 
24  DAY-TO-DAY AFFAIRS OF THE LEGION, THAT INCLUDED THE BANKING,
 
25  DID IT NOT?
 
26       A    ARE YOU ASKING WHAT I SHOULD HAVE TO HAVE
 
27  RESPONSIBILITY FOR, WHAT I DID HAVE RESPONSIBILITY FOR?
 
28       Q    SIR, PLEASE ANSWER THE QUESTION.  AS PART OF YOUR
			
			

page  168
 
 1  FUNCTIONS, DID THAT INCLUDE THE BANKING OF THE LEGION WHILE
 
 2  YOU WERE THE DIRECTOR?
 
 3       A    SOME OF THE BANKING.
 
 4       Q    OKAY.  AND IN 1986, FOR EXAMPLE, WHO WAS THE --
 
 5  WHO WAS THE BANKING RELATIONSHIP WITH BETWEEN THE LEGION AND
 
 6  THE BANK?  WHAT WAS IT DOING BUSINESS WITH?
 
 7       MR. MUSSELMAN:  OBJECTION.  NO FOUNDATION AS TO '86.
 
 8       THE COURT:  OVERRULED.  IF THE WITNESS KNOWS THROUGH
 
 9  HIS PERSONAL KNOWLEDGE, OBVIOUSLY.
 
10       THE WITNESS:  WHEN IN '86?  I WASN'T THERE PART OF
 
11  '86.
 
12
 
13  BY MR. WAIER:
 
14       Q    WELL, YOU TESTIFIED AS TO THE ASSETS IN 1986.  I
 
15  ASSUMED YOU WOULD KNOW THE BANK.
 
16       MR. MUSSELMAN:  OBJECTION.
 
17       THE COURT:  COUNSEL, DO NOT HARASS THE WITNESS BY THE
 
18  TONE OF YOUR QUESTION.  HE MADE A GOOD POINT.  HE — HE
 
19  WASN'T THERE IN 1986 THE ENTIRE TIME.  ASK THE QUESTIONS
 
20  WITHOUT ALL THE ARGUMENTATIVE THINGS.  WE DON'T HAVE A JURY
 
21  HERE.  THERE’s NO ONE TO IMPRESS OTHER THAN ME, AND THAT
 
22  DOESN'T IMPRESS ME.
 
23
 
24  BY MR. WAIER:
 
25       Q    THE FIRST TWO MONTHS OR THREE MONTHS OF 1986, WHO
 
26  WAS THE LEGION DOING BANKING WITH?
 
27       A    I LEFT THE ORGANIZATION IN, I THINK, DECEMBER OF
 
28  '85.  I WOULDN'T KNOW.
			
			

page  169
 
 1       Q    OKAY.  HOW ABOUT DECEMBER OF '85.  WHO IS THE BANK
 
 2  THE LEGION WAS DOING BANKING WITH?
 
 3       A    I BELIEVE IT WAS — OUR CHECKING ACCOUNTS, OUR
 
 4  ACCOUNTS — THE ACCOUNTS THAT I DEALT WITH WERE AT FIRST
 
 5  INTERSTATE BANK.
 
 6       Q    AND WHEN YOU CAME BACK IN 1987, WHO WAS THE LEGION
 
 7  BANKING WITH?
 
 8       A    THE ACCOUNTS I WAS AWARE OF WERE, I THINK, STILL
 
 9  FIRST INTERSTATE BANK.
 
10       Q    AND YOU WERE RECEIVING, AT THE TIME YOU WERE THE
 
11  DIRECTOR FROM 1987 FORWARD, THE MONTHLY BANKING STATEMENTS?
 
12       A    NO.
 
13       Q    WHO RECEIVED THOSE?
 
14       A    WELL, THE MONTHLY BANKING STATEMENTS CAME TO THE
 
15  OFFICE AND WE SIMPLY PUT THEM ASIDE FOR ELISABETH CARTO.
 
16       Q    WHY DID YOU PUT THEM ASIDE FOR ELISABETH CARTO?
 
17       A    I BELIEVE SHE EITHER RECONCILED THEM HERSELF OR
 
18  SENT THEM OFF FIRST FOR THE ACCOUNTANT TO RECONCILE.
 
19       Q    BUT YOU COULD HAVE LOOKED AT THEM IF YOU WANTED
 
20  TO; ISN'T THAT CORRECT?
 
21       A    SURE.  YES.
 
22       Q    AND YOU DID — HOW LONG DID YOU MAINTAIN THIS
 
23  BANKING RELATIONSHIP WITH FIRST INTERSTATE?  LEGION, I'M NOT
 
24  SAYING YOU, THE LEGION.
 
25       A    RIGHT.  I THINK WE STARTED WITH FIRST INTERSTATE
 
26  IN 1984 AND CONTINUED WITH IT UNTIL I LEFT THE ORGANIZATION
 
27  IN FEBRUARY OF 1994.
 
28       Q    NOW, ISN'T IT TRUE, SIR, THAT THERE WAS A NUMBER
			
			

page  170
 
 1  OF — STRIKE THAT.
 
 2            DID YOU TELL US YESTERDAY THAT THE LEGION HAD NO
 
 3  DEALINGS WITH THE F.D.F.A. WHILE YOU WERE THE DIRECTOR?
 
 4       A    NO.
 
 5       Q    IT DID HAVE DEALINGS?
 
 6       A    YES.
 
 7       Q    WHAT WERE THE DEALINGS?
 
 8       A    THE DEALINGS WERE FROM 1985, LATE 1985 ONWARD.
 
 9  THE F.D.F.A. WAS THE LEGION’s LANDLORD.  IT OWNED THE
 
10  BUILDING IN WHICH THE LEGION OPERATED.  I HAD SOME
 
11  DEALINGS — THE LEGION HAD SOME DEALINGS WITH F.D.F.A. IN
 
12  AS EARLY, I THINK, AS 1984 WHEN MR. CARTO DIRECTED ME TO ASK
 
13  SOME CONTRIBUTORS TO MAKE THE CHECKS OUT TO F.D.F.A. RATHER
 
14  THAN THE LEGION OR THE INSTITUTE.  SOME ALMOST $100,000
 
15  MYSTERIOUSLY DISAPPEARED OUT OF THE LEGION ACCOUNT, PAID OUT
 
16  TO F.D.F.A., SOMETIME IN 1985 AND 1986.  MR. CARTO DIRECTED
 
17  ME TO RUN A FUND-RAISING CAMPAIGN EVEN, I BELIEVE, AT ONE
 
18  TIME IN WHICH DONORS WERE ENCOURAGED TO MAKE UP THE
 
19  COLLECTION TO F.D.F.A.
 
20       Q    YOU DID ALL THAT --
 
21       A    YES.
 
22       Q    — WHILE YOU WERE DIRECTOR OF THE LEGION?
 
23       A    YES.
 
24       Q    IN OTHER WORDS, YOU ENCOURAGED DONATIONS NOT TO GO
 
25  TO THE LEGION, BUT TO GO TO THE F.D.F.A., FOUNDATION TO
 
26  DEFEND THE FIRST AMENDMENT; IS THAT CORRECT?
 
27       A    SOME DONATIONS, YES.
 
28       Q    YOU BELIEVED THAT WAS OKAY?
			
			

page  171
 
 1       A    YES.
 
 2       Q    IN FACT, ISN'T IT TRUE THAT YOU TOLD
 
 3  JEAN FARREL-EDISON IN EARLY 1985 TO MAKE OUT HER
 
 4  CONTRIBUTIONS TO THE F.D.F.A. AS OPPOSED TO THE LEGION?
 
 5       A    I MAY VERY WELL HAVE.
 
 6       Q    DID YOU WRITE HER A LETTER?
 
 7       A    I THINK YOU SHOWED THE LETTER THAT I WROTE IN THE
 
 8  OPENING STATEMENT.
 
 9       Q    IN FACT, IF YOU WILL TAKE A LOOK AT EXHIBIT
 
10  146 --
 
11       A    I DON'T THINK MY BOOK GOES THAT HIGH.
 
12       MR. BEUGELMANS:  YOUR HONOR, THE PLAINTIFF HAS NEVER
 
13  BEEN GIVEN A COMPLETE SET OF DEFENDANT’s EXHIBITS.
 
14       THE COURT:  DO YOU HAVE A SERIES?
 
15       MR. WAIER:  I MENTIONED TO COUNSEL THE OTHER DAY.  WE
 
16  HAVEN'T BEEN ABLE TO SPEAK SINCE THE TIME HE SAID HE WOULD
 
17  SPEAK TO ME ABOUT IT.  THERE WAS A MEETING WHERE THERE WOULD
 
18  BE A JOINT EXHIBIT LIST AND EXHIBITS PURSUANT TO OUR MEET
 
19  AND CONFER PRIOR TO THE TRIAL.  WE DID PROVIDE THEM, APART
 
20  FROM WHAT — MR. BEUGELMANS' SET, COPIES OF THE EXHIBITS,
 
21  INCLUDING THE EXHIBITS IN THE BOOK.  AND WE GAVE HIM A LIST
 
22  OF THE EXHIBITS, ONE OF WHICH WAS EXHIBIT 146.  BUT HE WAS
 
23  PROVIDED THOSE.
 
24       MR. BEUGELMANS:  YOUR HONOR, I MET WITH MR. URTNOWSKI,
 
25  MR. WAIER’s PARTNER, WHEN TRIAL WAS FIRST CALLED.  I GAVE
 
26  HIM THE BOOK THAT’s BEFORE THE COURT.  ALL THE EXHIBITS WERE
 
27  PREPARED.  WE TALKED.  HE SAID HE WOULD FAX ME THE
 
28  EXHIBITS.  WE DON'T HAVE A COMPLETE SET.  I TOLD MR. WAIER
			
			

page  172
 
 1  THIS ON MONDAY WHEN TRIAL WAS CALLED, I DON'T HAVE A
 
 2  COMPLETE SET OF EXHIBITS.
 
 3       THE COURT:  LET’s GET HIM A COMPLETE SET.
 
 4       MR. WAIER:  I CAN PROVIDE THE COURT.
 
 5       THE COURT:  I DON'T HAVE THEM EITHER.  I DON'T HAVE
 
 6  146.
 
 7       MR. WAIER:  THE PLAINTIFF WAS TO SUPPLY THE COURT WITH
 
 8  A COMPLETE SET.  I'M NOT GOING TO CONTEST IT IF HE SAYS HE
 
 9  DIDN'T RECEIVE IT.  WHAT EXHIBIT DO YOU END AT?
 
10       THE COURT:  I DON'T BELIEVE THAT I HAVE BEEN FURNISHED
 
11  ANY DEFENDANT’s EXHIBITS.  MY LAST EXHIBIT ENDS, I THINK,
 
12  82.  THEN WE HAVE GONE PAST THAT, YOU KNOW.  WE MARKED SOME
 
13  THINGS.
 
14       MR. WAIER:  WHAT NUMBER ARE WE UP TO?
 
15       THE COURT:  CLERK SAYS I GO THROUGH 88 FOR THE
 
16  PLAINTIFF.
 
17       MR. WAIER:  OUR EXHIBITS WERE SUPPOSED TO START AT
 
18  101.  WE — THE PRIOR AGREEMENT WAS SUPPOSED TO BE
 
19  PLAINTIFFS FROM 1 THROUGH 99 AND WE WERE TO BE 100 FORWARD.
 
20  I THOUGHT THEY WERE PROVIDED TO YOU.  A LIST WAS PROVIDED.
 
21  I DO HAVE OUR EXHIBITS RIGHT HERE.
 
22       THE COURT:  WE HAVE A LIST, BUT NO EXHIBITS.
 
23       MR. WAIER:  I CAN PROVIDE A COPY OF THE BOOKLET NOW, IF
 
24  YOU LIKE.
 
25       THE COURT:  I DON'T NECESSARILY NEED TO SEE AN EXHIBIT
 
26  BECAUSE THE WITNESS IS SEEING IT.  USUALLY, I DON'T LOOK AT
 
27  THEM VERY MUCH UNLESS THEY'RE ADMITTED.
 
28       MR. WAIER:  LET ME --
			
			

page  173
 
 1       THE COURT:  THERE’s OBVIOUSLY ANOTHER PROBLEM HERE.
 
 2       MR. WAIER:  I HAVE A BLOWUP, AND I WILL PROVIDE THE
 
 3  COURT — I APOLOGIZE FOR ANY INCONVENIENCE TO THE COURT.  I
 
 4  THOUGHT THEY HAD BEEN PROVIDED.  APPARENTLY, THEY HAVE NOT.
 
 5       MR. BEUGELMANS:  YOUR HONOR, WOULD THE COURT PLEASE
 
 6  DIRECT MR. WAIER TO PROVIDE PLAINTIFFS A COPY MONDAY
 
 7  MORNING.
 
 8       MR. WAIER:  I WILL PROVIDE IT OVER THE WEEKEND, IF YOU
 
 9  LIKE.
 
10       THE COURT:  GREAT.
 
11       MR. WAIER:  LET ME HAND YOU IN THE BOOKS, EXHIBIT 146.
 
12  AND THIS WILL BE PROVIDED IN THAT IT HAS BEEN MARKED FOR
 
13  IDENTIFICATION.  LET ME HAND THAT TO YOU.  SEE IF I CAN'T
 
14  PULL THE BLOWUP.
 
15
 
16  BY MR. WAIER:
 
17       Q    DO YOU HAVE THAT IN FRONT OF YOU?
 
18       A    YES.
 
19       Q    146 MARKED FOR IDENTIFICATION, TAKE A LOOK AT THE
 
20  BLOWUP UNTIL WE GET THE EXHIBITS.  BUT LET ME ASK YOU THIS:
 
21  DO YOU SEE THE BLOWUP IN FRONT OF YOU?
 
22       A    I DO.
 
23       Q    DOES THAT LOOK LIKE EXHIBIT 146?
 
24       A    IT DOES.
 
25       Q    IT’s IDENTICAL, ISN'T IT?
 
26       A    I COULDN'T SAY.
 
27       Q    BUT YOU WILL NOTICE THE NAME, “BEST REGARDS,
 
28  TOM MARCELLUS.”  IS THAT YOUR SIGNATURE?
			
			

page  174
 
 1       A    I SEE “BEST, TOM MARCELLUS."
 
 2       Q    TAKE A LOOK --
 
 3       A    NOT “BEST REGARDS."
 
 4       Q    “BEST.”  I'M SORRY.  I GAVE YOU A LOT OF CREDIT
 
 5  THERE.  IS THAT YOUR SIGNATURE?
 
 6       A    YES.
 
 7       Q    AND THAT WAS A LETTER THAT YOU HAD PREPARED TO
 
 8  JEAN FARREL-EDISON; IS THAT CORRECT?
 
 9       A    YES.
 
10       Q    AND THIS WAS SENT TO HER ON JANUARY 14, 1985?
 
11       A    YES.
 
12       Q    AND YOU WILL NOTICE DOWN HERE IN THE APPROXIMATELY
 
13  FIFTH PARAGRAPH DOWN, DO YOU SEE THAT?
 
14       A    WOULD YOU POINT TO THE PARAGRAPH.
 
15       Q    “AS FOR FUTURE CONTRIBUTIONS."
 
16       A    YES.
 
17       Q    IT SAYS: “PLEASE CONTINUE TO MAKE YOUR CHECKS OUT
 
18  TO THE FOUNDATION TO DEFEND THE FIRST AMENDMENT OR JUST
 
19  F.D.F.A. ”  DO YOU SEE THAT?
 
20       A    YES.
 
21       Q    PRIOR TO THIS TIME, WASN'T JEAN FARREL-EDISON
 
22  MAKING CHECKS OUT TO THE FOUNDATION TO DEFEND THE FIRST
 
23  AMENDMENT?
 
24       A    I BELIEVE WE HAD RECEIVED ONE CHECK FROM HER MADE
 
25  OUT TO F.D.F.A. PRIOR TO THAT TIME.
 
26       Q    “WE,” WHO ARE YOU REFERRING TO?
 
27       A    IT CAME TO THE LEGION’s OFFICE.
 
28       Q    FOR F.D.F.A.?
			
			

page  175
 
 1       A    YES.
 
 2       Q    AND DO YOU KNOW WHY SHE WAS SENDING THAT TO THE
 
 3  LEGION OR PAYMENT TO THE F.D.F.A.?
 
 4       A    YES, BECAUSE MR. CARTO HAD SUGGESTED THAT SHE DO
 
 5  THAT.
 
 6       Q    BUT YOU SUGGESTED ALSO THAT SHE CONTINUE TO DO
 
 7  THIS; ISN'T THAT CORRECT?
 
 8       A    YES.
 
 9       Q    AND IN FACT, YOU TOLD HER TO SEND THESE CHECKS IN
 
10  CARE OF — MADE OUT TO THE FOUNDATION TO DEFEND THE FIRST
 
11  AMENDMENT AND IN CARE OF THE I.H.R. AT THE LOCATION AND THE
 
12  BUSINESS ADDRESS; ISN'T THAT CORRECT?
 
13       A    ON MR. Carto’s INSTRUCTIONS, THAT’s CORRECT.
 
14       MR. WAIER:  MOVE TO STRIKE “MR. Carto’s INSTRUCTIONS."
 
15       THE COURT:  SUSTAIN THE OBJECTION.
 
16
 
17  BY MR. WAIER:
 
18       Q    PLEASE ANSWER THE QUESTION.
 
19       A    I'M SORRY.
 
20       Q    YOU WROTE THIS, DID YOU NOT?
 
21       A    I DID.
 
22       Q    AND YOU WROTE TO HER AND YOU TOLD HER TO MAKE OUT
 
23  CONTRIBUTIONS — CONTINUE TO MAKE OUT CONTRIBUTIONS
 
24  STRICTLY TO THE FOUNDATION TO DEFEND THE FIRST AMENDMENT AT
 
25  THE I.H.R. OFFICES; ISN'T THAT CORRECT?
 
26       A    YES.
 
27       MR. MUSSELMAN:  ASKED AND ANSWERED.
 
28       THE COURT:  SUSTAINED.
			
			

page  176
 
 1  BY MR. WAIER:
 
 2       Q    NOW, DID YOU EVER SEND HER ANOTHER LETTER TELLING
 
 3  HER NOT TO DO THAT?
 
 4       A    I DON'T BELIEVE SO.
 
 5       Q    DID YOU BELIEVE THAT BY SENDING — HAVING HER
 
 6  SEND MONEY TO THE FOUNDATION TO DEFEND THE FIRST AMENDMENT,
 
 7  THAT WAS MONEY THAT SHOULD GO TO THE LEGION?
 
 8       A    YES.
 
 9       Q    DID YOU HAVE SOME SORT OF AN ARRANGEMENT WITH THE
 
10  F.D.F.A. THAT THAT MONEY WOULD BE REPAID?
 
11       A    YES.
 
12       Q    WITH WHOM?
 
13       A    WITH MR. CARTO.
 
14       Q    WAS THAT IN WRITING?
 
15       A    NO.
 
16       Q    WHY DIDN'T YOU PUT IT IN WRITING?
 
17       A    BECAUSE IT WAS IN THE FORM OF A DIRECTION FROM
 
18  MR. CARTO THAT I DO THIS, AND I DID NOT ASK HIM TO PUT IT IN
 
19  WRITING.
 
20       Q    DIDN'T YOU BELIEVE THAT YOU WERE IN CHARGE OF THE
 
21  DAY-TO-DAY AFFAIRS OF THE LEGION ON JANUARY 14, 1985, WERE
 
22  YOU NOT?
 
23       A    THAT’s CORRECT.
 
24       Q    AND DIDN'T YOU BELIEVE, TOO, THAT YOU HAD SOME
 
25  SORT OF A FIDUCIARY DUTY ON YOUR PART TO MAKE SURE THAT IF
 
26  THIS WAS THE CASE, THAT YOU WERE TELLING SOMEBODY ELSE TO
 
27  PUT MONEY TO ANOTHER ORGANIZATION OTHER THAN THE LEGION,
 
28  THAT YOU HAD SOME SORT OF AN AGREEMENT IN WRITING WITH THAT
			
			

page  177
 
 1  ORGANIZATION?
 
 2       A    I DID HAVE A PROBLEM WITH THAT, MR. WAIER, BUT I
 
 3  DID NOT DO ANYTHING ABOUT IT.
 
 4       Q    DID YOU BELIEVE AT THIS POINT IN TIME MR. CARTO
 
 5  COULD FIRE YOU?
 
 6       A    YES, OR COULD ARRANGE TO HAVE ME FIRED.
 
 7       Q    THIS WAS IN JANUARY 1985?
 
 8       A    YES.
 
 9       Q    AND THAT WAS BECAUSE HE WAS A SUBSTITUTE
 
10  INCORPORATOR FOR THE LEGION; ISN'T THAT TRUE?
 
11       A    NO, NOT TRUE.
 
12       Q    DID YOU KNOW HE WAS A SUBSTITUTE INCORPORATOR AT
 
13  THAT TIME?
 
14       MR. MUSSELMAN:  ASSUMES FACTS NOT IN EVIDENCE, DID YOU
 
15  KNOW THAT.
 
16       THE COURT:  OVERRULED.
 
17       THE WITNESS:  I HAVE NO IDEA HE WAS ANYTHING LIKE A
 
18  SUBSTITUTE INCORPORATOR.
 
19
 
20  BY MR. WAIER:
 
21       Q    WHAT AUTHORITY DID YOU THINK MR. CARTO HAD AT THAT
 
22  POINT IN TIME THAT HE COULD FIRE YOU?
 
23       A    THE AUTHORITY I BELIEVED HE HAD WAS A KIND OF A
 
24  INFLUENCE OVER THE FURRS.
 
25       Q    WELL, THERE WERE OTHER DIRECTORS, WERE THERE NOT?
 
26  YOU TESTIFIED TO THAT YESTERDAY.  THERE WERE OTHER DIRECTORS
 
27  IN THE LEGION BESIDES THE FURRS; ISN'T THAT CORRECT?
 
28       A    I NEVER HAD ANY CONTACT WITH THEM.
			
			

page  178
 
 1       Q    PLEASE ANSWER MY QUESTION.
 
 2       A    I WAS NOT AWARE OF ANY.  I WAS NOT AWARE OF ANY
 
 3  DIRECTORS OUTSIDE THE FURRS.  I DID NOT HAVE ANY INVOLVEMENT
 
 4  WITH THEM.
 
 5       Q    SIR, YOU UNDERSTOOD, AS RUNNING THE DAY-TO-DAY
 
 6  AFFAIRS, THAT YOU WERE HELD ACCOUNTABLE TO THE BOARD OF
 
 7  DIRECTORS OF THE LEGION; ISN'T THAT CORRECT?
 
 8       A    NO.
 
 9       Q    YOU DIDN'T BELIEVE THAT?
 
10       A    NO.
 
11       Q    HAD YOU SEEN THE BYLAWS OF THE LEGION AT THIS
 
12  POINT IN TIME?
 
13       A    I DON'T BELIEVE I HAD.
 
14       Q    YOU HAD ACCESS TO THEM, DID YOU NOT?
 
15       A    I DON'T BELIEVE THEY WERE OUT.  NO, I BELIEVE I
 
16  DID NOT HAVE ACCESS TO THEM.
 
17       Q    DID YOU ASK ANYBODY WHO YOU WERE TO REPORT TO?
 
18       A    I DIDN'T HAVE TO.  IT WAS UNDERSTOOD.
 
19       Q    IS THAT PART OF YOUR AGREEMENT?
 
20       A    YES.
 
21       Q    AND THAT WAS THE AGREEMENT YOU HAD WITH LAVONNE
 
22  FURR?
 
23       A    YES.
 
24       Q    SO AS FAR AS YOU UNDERSTOOD AT THIS POINT IN TIME
 
25  IN JANUARY 1985, IT WAS BOTH LAVONNE FURR AND WILLIS CARTO
 
26  THAT WAS RUNNING THE LEGION; ISN'T THAT CORRECT?
 
27       A    I BELIEVE IT WAS MR. CARTO THAT WAS ESSENTIALLY
 
28  RUNNING THE LEGION.
			
			

page  179
 
 1       Q    AND BUT YOU ALSO BELIEVED — YOU ALSO MADE A
 
 2  STATEMENT YOU BELIEVED MR. CARTO COULD HAVE SOMEONE AT THE
 
 3  LEGION FIRE YOU; ISN'T THAT CORRECT?
 
 4       A    YES.
 
 5       Q    YOU THOUGHT HE HAD INFLUENCE OVER LAVONNE FURR;
 
 6  ISN'T THAT CORRECT?
 
 7       A    YES.
 
 8       Q    YOU BELIEVED LAVONNE FURR COULD FIRE YOU?
 
 9       A    YES.
 
10       Q    BECAUSE LAVONNE FURR, LIKE MR. CARTO, WAS RUNNING
 
11  THE LEGION AT THAT TIME?
 
12       A    NO.
 
13       Q    WHAT DID YOU UNDERSTAND LAVONNE FURR'S
 
14  RESPONSIBILITIES WERE AT THIS POINT IN TIME IN JANUARY OF
 
15  1995?
 
16       A    LAVONNE --
 
17       Q    1985, EXCUSE ME.
 
18       A    LAVONNE FURR HAD, TO MY KNOWLEDGE, ABSOLUTELY
 
19  LITTLE, VERY LITTLE OR NO INVOLVEMENT AT ALL IN THE LEGION.
 
20       Q    WHAT DID YOU UNDERSTAND HER POSITION TO BE WITH
 
21  THE LEGION AT THAT TIME, 1985?
 
22       A    I'M SORRY, I UNDERSTOOD HER POSITION TO BE A KIND
 
23  OF A FORMALITY AND THAT MR. CARTO WAS THE ONE WHO WAS
 
24  RUNNING THINGS.
 
25       Q    NOW, DID YOU THINK THIS WAS ILLEGAL ON YOUR PART
 
26  TO HAVE CONTRIBUTIONS EARMARKED FOR THE LEGION TO BE SENT TO
 
27  THE F.D.F.A.
 
28       A    NO.
			
			

page  180
 
 1       Q    WHY?
 
 2       A    BECAUSE MR. CARTO HAD ASSURED ME THAT THESE
 
 3  CONTRIBUTIONS EARMARKED FOR THE F.D.F.A. WERE IN FACT GOING
 
 4  TO BE USED TO PAY ATTORNEYS DEFENDING US IN SOME LITIGATION
 
 5  THAT WAS CURRENT AT OR ABOUT THAT TIME.
 
 6       Q    WHAT LITIGATION WAS THAT?
 
 7       A    I BELIEVE IT WAS THE MERMELSTEIN SUIT OR THE
 
 8  SETTLEMENT OR SOMETHING HAVING TO DO WITH THAT OR THE
 
 9  POSSIBILITIES OF MORE LITIGATION FROM THE SAME PERSON.
 
10       Q    IN FACT, YOU WERE AWARE, WERE YOU — STRIKE THAT.
 
11            YOU WERE AWARE AT THIS POINT IN TIME IN 1985 THAT
 
12  THERE WAS A POSSIBILITY OF A JUDGMENT AGAINST THE LEGION IN
 
13  THAT LITIGATION?
 
14       A    THE CONCERN EXPRESSED BY MR. CARTO AT THE TIME WAS
 
15  TO NOT HAVE — HAVE AS LITTLE MONEY AS POSSIBLE IN THE
 
16  LEGION’s ACCOUNT.
 
17       Q    YOU AGREED TO THAT, DID YOU NOT?
 
18       A    YES.
 
19       Q    WHY DID YOU AGREE WITH THAT?
 
20       A    I AGREED WITH IT BECAUSE MY EXPERIENCE WORKING FOR
 
21  THE CORPORATION WAS THAT MR. CARTO COULD MAKE THESE KIND OF
 
22  DECISIONS, AND THAT WHEN HE DIRECTED ME TO CARRY OUT SUCH A
 
23  DECISION, THAT IT WAS — IT WAS LEGITIMATE, IT WAS VALID AND
 
24  OKAY TO DO IT.
 
25       Q    DID YOU ASK TO SEE ANY BOARD MINUTES AUTHORIZING
 
26  MR. CARTO TO GIVE YOU SUCH INSTRUCTIONS?
 
27       A    I DID NOT.
 
28       Q    DID YOU ASK TO SEE BOARD MINUTES AUTHORIZING YOU
			
			

page  181
 
 1  TO DIVERT CONTRIBUTIONS FROM THE LEGION TO F.D.F.A.?
 
 2       A    I DID NOT.
 
 3       Q    IN FACT, THIS WASN'T THE ONLY LETTER YOU WROTE
 
 4  REQUESTING DONATIONS TO BE DIVERTED FROM THE LEGION TO THE
 
 5  F.D.F.A.; ISN'T THAT CORRECT?
 
 6       A    YOUR QUESTION SAYS “DIVERTED.”  I DON'T KNOW IF I
 
 7  LOOKED AT IT THAT WAY AT THE TIME.
 
 8       Q    YOU DIDN'T BELIEVE THERE WAS ANY CONVERSION OF ANY
 
 9  OF THE ASSETS OF THE F.D.F.A. BY WRITING SUCH LETTERS?
 
10       A    I DIDN'T THINK ABOUT IT THAT WAY.
 
11       Q    IN FACT, ISN'T IT TRUE — ARE YOU AWARE OF AN
 
12  ORGANIZATION CALLED THE HISTORICAL EDUCATION FOUNDATION?
 
13       A    NO.
 
14       Q    YOU NEVER HEARD OF THE HISTORICAL EDUCATION
 
15  FOUNDATION?
 
16       A    I HAVE HEARD OF THE NAME.  I'M NOT AWARE OF SUCH
 
17  AN ORGANIZATION.
 
18       Q    YOU HEARD OF THE NAME.  WHAT DID YOU UNDERSTAND
 
19  THE HISTORICAL EDUCATION FOUNDATION TO BE?
 
20       A    THE HISTORICAL EDUCATION FOUNDATION WAS THE NAME
 
21  OF THE ACCOUNT THAT THE LEGION STARTED WITH A COMPANY CALLED
 
22  THE NATIONAL FOUNDATION, AND IT WAS THE NATIONAL FOUNDATION
 
23  THAT WAS THE — THE HOLDER OF THE ACCOUNT CALLED HISTORICAL
 
24  FOUNDATION IN WHICH THE LEGION RAISED FUNDS AND PUT IN THIS
 
25  ACCOUNT AND DISBURSED.
 
26       Q    WHEN YOU SAY “LEGION RAISED FUNDS,” IN FACT, YOU
 
27  NEVER RAISED ANY FUNDS; YOU HAD MR. CARTO DO THAT.  ISN'T
 
28  THAT CORRECT?
			
			

page  182
 
 1       A    NO.  I THINK DURING THE COURSE OF MY TIME WITH THE
 
 2  LEGION THAT I WAS THE ONE WHO DID MOST ALL THE WORK INVOLVED
 
 3  IN RAISING FUNDS.  MR. CARTO MADE SOME — ARRANGED FOR
 
 4  LOANS.  I RAISED THE FUNDS.
 
 5       Q    MR. MARCELLUS, YOU TESTIFIED YESTERDAY, I BELIEVE,
 
 6  THAT IN 1985, AFTER THE ARSON OF THE LEGION HEADQUARTERS,
 
 7  YOU WENT ABOUT A FUND-RAISING CAMPAIGN TO RAISE MONIES TO
 
 8  GET NEW OFFICES FOR LEGION; ISN'T THAT CORRECT?
 
 9       A    YES.
 
10       Q    IN FACT, ISN'T IT TRUE THAT YOU WROTE LETTERS TO
 
11  VARIOUS PEOPLE ASKING FOR CONTRIBUTIONS?
 
12       A    YES.
 
13       Q    ISN'T IT TRUE THAT MR. CARTO ACTUALLY DRAFTED
 
14  THOSE LETTERS, TYPED THEM UP AND HAD YOU MERELY SIGN THEM,
 
15  FOR THE MOST PART?
 
16       A    OH, I DON'T THINK SO.  I THINK FOR THE MOST PART,
 
17  IT WOULD HAVE BEEN A MATTER OF ME DRAFTING THE LETTERS AND
 
18  SHOWING THEM TO MR. CARTO AND GETTING HIS OKAY ON THEM.
 
19       Q    WHERE DID YOU GET THE NAMES TO SEND TO THE PEOPLE?
 
20       A    WELL, AS IN MY POSITION IS MANAGING DIRECTOR, I
 
21  HAD ACCESS TO ALL THE --
 
22       Q    ISN'T IT TRUE MR. CARTO SUPPLIED THE NAMES AND
 
23  ADDRESSES TO WHERE THE CONTRIBUTIONS OR WHERE THE
 
24  CONTRIBUTORS WERE FOR YOU TO SEND THE LETTER ITSELF?
 
25       A    THERE’s A POSSIBILITY FROM TIME TO TIME THE LEGION
 
26  RENTED MAILING LISTS.  WE DID ON A COUPLE OF OCCASIONS RENT
 
27  BLOCKS OF NAMES FROM LIBERTY LOBBY.
 
28       Q    IN FACT, ISN'T IT TRUE, MR. MARCELLUS, THAT WHEN
			
			

page  183
 
 1  YOU WROTE TO THE VARIOUS INDIVIDUALS BACK IN 1985 FOR
 
 2  CONTRIBUTIONS FOR THIS BUILDING FUND YOU TALKED ABOUT
 
 3  YESTERDAY, THAT YOU TOLD THEM TO MAKE OUT THE CHECKS PAYABLE
 
 4  TO HISTORICAL EDUCATION FOUNDATION?
 
 5       A    YES, THERE WERE SOME OCCASIONS WHERE I DID THAT.
 
 6  YES.
 
 7       Q    WHY DID YOU DO THAT?
 
 8       A    ESSENTIALLY FOR THE SAME REASON THAT THIS F.D.F.A.
 
 9  BUSINESS WAS GOING ON, AND THAT WAS THAT THIS WAS A SEPARATE
 
10  ACCOUNT.  MR. CARTO ARRANGED TO HAVE IT SET UP SO THAT THE
 
11  FUNDS COMING INTO THE LEGION WOULDN'T ALL GO INTO THE
 
12  LEGION’s ACCOUNTS; WOULD, THEREFORE, BE, IN A SENSE,
 
13  DIFFICULT TO GRAB IF WE WERE — IF WE EXPERIENCED AN
 
14  UNFAVORABLE JUDGMENT IN A LAWSUIT.
 
15       Q    DID MR. CARTO SET UP THE ACCOUNT?
 
16       A    MR. CARTO DID THE RESEARCH AND MADE THE CONTACTS,
 
17  GOT THE PAPERWORK AND GAVE IT TO ME AND TOLD ME WHAT TO DO.
 
18       Q    ISN'T IT — YOU DIDN'T SET UP THE ACCOUNT, DID
 
19  YOU?
 
20       A    I BELIEVE I SIGNED TO ESTABLISH THE ACCOUNT, YES.
 
21       Q    SIR, WASN'T THAT ROBERT BERKEL WHO ESTABLISHED THE
 
22  ACCOUNT?
 
23       A    THAT ACCOUNT WAS ESTABLISHED LONG BEFORE
 
24  MR. BERKEL CAME ON THE SCENE.
 
25       Q    WHEN DID THE — STRIKE THAT.
 
26            WHEN WAS THIS APPLICATION MADE, SIR?
 
27       A    WHAT APPLICATION?
 
28       Q    WASN'T THERE AN APPLICATION TO BEGIN THE ACCOUNT
			
			

page  184
 
 1  WITH THE NATIONAL FOUNDATION?
 
 2       A    YES.
 
 3       Q    AND YOU INDICATED IT’s AN ACCOUNT; IS THAT
 
 4  CORRECT?
 
 5       A    YES.
 
 6       Q    BUT YOU WERE A DIRECTOR OF THAT ACCOUNT?
 
 7       A    I WAS WHAT WAS TERMED, I BELIEVE, IF I REMEMBER
 
 8  CORRECTLY, THE DONOR MANAGER, MEANING THAT I COULD — I HAD
 
 9  THE AUTHORITY TO — TO MAKE DEPOSITS TO THE ACCOUNT AND TO
 
10  SPECIFY HOW — SPECIFY HOW MONIES WERE TO BE DISBURSED FROM
 
11  THAT ACCOUNT.
 
12       Q    SO YOU WERE RESPONSIBLE FOR THE DISBURSEMENT OF
 
13  MONIES FROM THAT ACCOUNT, IS THAT CORRECT, WHILE YOU WERE
 
14  DONOR MANAGER?
 
15       A    YES.
 
16       Q    SO ANY AMOUNTS OF MONEY THAT CAME FROM THE
 
17  HISTORICAL EDUCATION FOUNDATION TO THE F.D.F.A. WOULD HAVE
 
18  BEEN AT YOUR AUTHORIZATION; ISN'T THAT CORRECT?
 
19       A    I'M SORRY.  I DIDN'T UNDERSTAND THE QUESTION.
 
20       Q    WELL, LET ME LAY SOME FOUNDATION.
 
21            DID ANY OF THE MONEY FROM THE HISTORICAL EDUCATION
 
22  FOUNDATION — STRIKE THAT.
 
23            WAS THERE ANY MONEY TAKEN FROM THE HISTORICAL
 
24  EDUCATION FOUNDATION AND PROVIDED TO F.D.F.A.?
 
25       A    YES.
 
26       Q    AND THAT WAS AT YOUR AUTHORIZATION, WAS IT NOT?
 
27       A    IT WAS NOT.
 
28       Q    WHOSE AUTHORIZATION?
			
			

page  185
 
 1       A    I DON'T KNOW BECAUSE IT HAPPENED DURING THE TIME
 
 2  PERIOD I WAS NOT THERE.
 
 3       Q    DID IT EVER HAPPEN DURING THE PERIOD WHILE YOU
 
 4  WERE THERE?
 
 5       A    IT MAY HAVE.
 
 6       Q    WELL, SIR, WHEN YOU FIRST — WHEN DID YOU FIRST
 
 7  START THIS ACCOUNT, HISTORICAL EDUCATION FOUNDATION?
 
 8       A    I THINK IT WAS STARTED IN 1983, 1984.
 
 9       Q    WASN'T IT STARTED AFTER THE FIRE?
 
10       A    THERE’s A POSSIBILITY THAT IT WAS.  I'M A LITTLE
 
11  BIT DIM ON THAT.
 
12       Q    AND AT THAT POINT IN TIME, YOU BECAME DONOR
 
13  MANAGER?
 
14       A    YES.
 
15       Q    DID YOU EVER RELINQUISH THAT TITLE?
 
16       A    WHEN I LEFT THE — RESIGNED FROM THE
 
17  ORGANIZATION, I — I DIDN'T RESIGN FROM THAT AS A SEPARATE
 
18  ACTION.  I JUST RESIGNED FROM THE ORGANIZATION.
 
19       Q    BUT YOU NEVER FILED AN OFFICIAL RESIGNATION AS
 
20  DONOR MANAGER, DID YOU?
 
21       A    THAT’s CORRECT.
 
22       Q    YOU WERE ALSO RESPONSIBLE FOR — YOU INDICATED
 
23  THIS BUILDING FUND.  YOU PLACED A LOT OF THE MONEY FOR THE
 
24  BUILDING FUND INTO THE HISTORICAL EDUCATION FOUNDATION, DID
 
25  YOU NOT?
 
26       A    YES.
 
27       Q    IN FACT, CAN YOU SHOW — ARE YOU AWARE OF ANY ONE
 
28  DOCUMENT WHICH SAYS THAT THE HISTORICAL EDUCATION FOUNDATION
			
			

page  186
 
 1  WAS AN ACCOUNT OF THE LEGION?
 
 2       A    I'M AWARE OF A WHOLE LOT OF DOCUMENTS THAT SAY
 
 3  THAT.
 
 4       Q    HOW ABOUT WITH RESPECT TO THE APPLICATION, DO YOU
 
 5  BELIEVE THAT SAID THAT?
 
 6       A    I WOULD NEED TO SEE IT TO REFRESH MY MEMORY.
 
 7       Q    LET ME HAND THIS TO YOU.  IT’s CALLED APPLICATION
 
 8  TO BEGIN A FOUNDATION ACCOUNT WITH NATIONAL FOUNDATION,
 
 9  INC.  CAN YOU SHOW ME ANYWHERE ON THE APPLICATION WHERE IT
 
10  SAYS THE LEGION?
 
11       THE COURT:  DO WE HAVE AN EXHIBIT NUMBER THERE?
 
12       MR. WAIER:  I DON'T BELIEVE WE DO, YOUR HONOR.  IT MAY
 
13  BE IN THE EXHIBIT BOOK ITSELF.  WHAT DID I DO WITH THE
 
14  EXHIBIT BOOK NOW?  IT MIGHT BE ONE OF THE EXHIBITS WE
 
15  LISTED.  LET ME CHECK.  WE HAVE NOT PROVIDED A NUMBER.  OUR
 
16  LIST GOES UP TO — THE ONE I'LL PROVIDE THE COURT ON MONDAY
 
17  MORNING, UP TO 171.  I CAN MARK THIS FOR IDENTIFICATION AS
 
18  172 AND PROVIDE THE COURT AND COUNSEL WITH A COPY.  I SHOWED
 
19  THE COUNSEL A COPY OF THAT.
 
20       THE COURT:  THANK YOU.
 
21
 
22  BY MR. WAIER:
 
23       Q    LET ME HAND YOU WHAT WE HAVE MARKED FOR
 
24  IDENTIFICATION AS EXHIBIT 172.  DO YOU RECOGNIZE THIS
 
25  DOCUMENT, SIR?
 
26       A    YES.
 
27       Q    ISN'T THAT THE APPLICATION FOR THE ACCOUNT?
 
28       A    IT APPEARS TO BE PERHAPS THE FIRST PAGE.  I'M NOT
			
			

page  187
 
 1  SURE IF IT IS THE ENTIRE APPLICATION OR NOT.
 
 2       Q    DID YOU PREPARE THAT?
 
 3       A    I DID NOT.
 
 4       Q    WHO PREPARED THAT?
 
 5       A    THIS WAS GIVEN TO ME BY MR. CARTO.
 
 6       Q    MR. CARTO PREPARED THAT; ISN'T THAT CORRECT?
 
 7       A    IT WAS GIVEN TO ME BY MR. CARTO.
 
 8       Q    CAN YOU SHOW ME ANYWHERE ON THIS APPLICATION,
 
 9  FIRST PAGE, THAT IT SAYS IT’s A LEGION ACCOUNT?
 
10       A    I DO NOT SEE WHERE — WHERE ON THE PAGE WHERE IT
 
11  SAYS IT’s A LEGION ACCOUNT.
 
12       Q    DID MR. — DID MR. CARTO TELL YOU AT THE TIME HE
 
13  HANDED YOU THIS, THIS WAS A FOUNDATION TO DEFEND THE FIRST
 
14  AMENDMENT ACCOUNT?
 
15       A    NO.
 
16       Q    IN FACT, DIDN'T HE TELL YOU AT THE TIME THIS
 
17  ACCOUNT WAS SET UP, THIS WOULD BE AN INDEPENDENT
 
18  ORGANIZATION SERVICING NOT ONLY THE LEGION BUT ALSO THE
 
19  F.D.F.A. AND LIBERTY LOBBY?
 
20       A    HE TOLD ME NO SUCH THING.
 
21       Q    DID YOU ASK HIM?
 
22       A    I DIDN'T HAVE TO.  HE TOLD ME.
 
23       Q    ARE YOU AWARE OF THE PURPOSE OF THE FOUNDATION TO
 
24  DEFEND THE FIRST AMENDMENT?
 
25       A    BASED ON THE ITS PROMOTIONAL MATERIALS, YES.
 
26       Q    YOU READ THE PROMOTIONAL MATERIALS?
 
27       A    FROM TIME TO TIME.
 
28       Q    THEIR PURPOSES ARE THE SAME.  WHAT DO YOU
			
			

page  188
 
 1  UNDERSTAND THE PURPOSES OF THE F.D.F.A. TO BE?
 
 2       A    I UNDERSTAND THE PURPOSES OF THE F.D.F.A. IS, AT
 
 3  LEAST IN THE LAST FEW YEARS WHEN I WATCHED ITS PROMOTIONAL
 
 4  MATERIALS, IS TO BILK THE UNAWARE.
 
 5       Q    LET ME ASK YOU THIS:  THE PURPOSE OF THE F.D.F.A.
 
 6  BACK IN 1985 — WHAT WERE THE PURPOSES IN 1985 THAT YOU
 
 7  WERE AWARE OF?
 
 8       A    F.D.F.A. IN 1985?
 
 9       Q    YES.
 
10       A    WELL, THE — MR. CARTO TOLD ME THAT THE F.D.F.A.
 
11  WAS TO DEFEND THE FIRST AMENDMENT.
 
12       Q    AND THAT WAS SIMILAR TO WHAT THE LEGION WAS DOING
 
13  AS WELL?  THAT’s THE PURPOSE OF THE LEGION, WAS TO DEFEND
 
14  THE FIRST AMENDMENT AS WELL?
 
15       A    ON A MORE BROAD BASIS.
 
16       Q    WELL, THE PURPOSES WERE ESSENTIALLY THE SAME
 
17  BETWEEN THE TWO; WASN'T THAT TRUE?
 
18       A    NO.
 
19       Q    WELL, IN FACT, YOU UNDERSTOOD THAT THE FOUNDATION
 
20  TO DEFEND THE FIRST AMENDMENT ALSO — ONE OF THE PURPOSES
 
21  WAS TO ADVANCE THE CAUSE OF HISTORY BY PROMOTING AND
 
22  UNDERTAKING SCHOLARLY AND ORIGINAL RESEARCH IN SIGNIFICANT
 
23  AREAS?
 
24       A    ARE YOU TALKING ABOUT THE F.D.F.A. OR H.E.F.?
 
25       Q    THE F.D.F.A.
 
26       A    THAT’s AN H.E.F. APPLICATION.
 
27       Q    I'M NOT ASKING YOU THAT.
 
28       A    NO.  THE ANSWER, THEN, IS NO, THE F.D.F.A.
			
			

page  189
 
 1  PURPOSES HAD NOTHING TO DO WITH HISTORY, AS FAR AS I KNOW.
 
 2       Q    AND HOW ABOUT TO PRESERVE AND DISSEMINATE
 
 3  HISTORICAL FINDINGS AMONG HISTORIANS AND THE PUBLIC?
 
 4       A    THAT WAS NOT PART OF THE — OF THE F.D.F.A.
 
 5  PURPOSES AS I UNDERSTAND IT.
 
 6       Q    I THOUGHT THE F.D.F.A. PURPOSES WERE TO DEFEND THE
 
 7  FIRST AMENDMENT --
 
 8       A    YES.
 
 9       Q    — AMONG OTHER THINGS?
 
10       A    NO.  I UNDERSTAND IT TO BE AN ORGANIZATION --
 
11  INITIALLY, AN ORGANIZATION THAT DEFENDED THE FIRST
 
12  AMENDMENT, PUBLISHING, FREEDOM OF SPEECH, SO ON, SO FORTH.
 
13       Q    THAT WAS ONE OF THE CAUSES OF THE HISTORICAL
 
14  EDUCATION FOUNDATION AS WELL, WASN'T IT?
 
15       A    HISTORICAL EDUCATION FOUNDATION WAS MORE
 
16  INTERESTED IN HISTORICAL MATERIALS AND DISSEMINATING
 
17  HISTORY.
 
18       Q    WASN'T THAT ONE OF THE CAUSES OF THE HISTORICAL
 
19  EDUCATION FOUNDATION?
 
20       A    I DON'T THINK SO.
 
21       Q    WASN'T THAT ONE OF THE CAUSES OF THE LEGION OF THE
 
22  SURVIVAL OF THE FREEDOM, INC.?
 
23       A    I DON'T THINK IT IS.
 
24       Q    HOW ABOUT THE I.H.R., INSTITUTE OF HISTORICAL
 
25  REVIEW?
 
26       A    NO.
 
27       Q    SO IT WASN'T ONE OF THE CAUSES OF THE LEGION OR
 
28  THE INSTITUTE OF HISTORICAL REVIEW TO PROMOTE THE DEFENSE OF
			
			

page  190
 
 1  THE FIRST AMENDMENT AND CONSTITUTIONAL RIGHTS RELATIVE TO
 
 2  THE FIRST AMENDMENT?
 
 3       MR. MUSSELMAN:  OBJECTION.  COMPOUND.
 
 4       THE COURT:  SUSTAINED.
 
 5
 
 6  BY MR. WAIER:
 
 7       Q    WASN'T THAT ONE OF THE DEFENSES RAISED BY THE
 
 8  LEGION IN THE MERMELSTIEN CASE, WAS THE FIRST — ITS RIGHTS
 
 9  UNDER THE FIRST AMENDMENT?
 
10       MR. MUSSELMAN:  OBJECTION.  RELEVANCE.
 
11       THE COURT:  SUSTAINED.  WHAT’s THE RELEVANCE OF THE
 
12  MERMELSTEIN CASE?  I KNOW ABOUT — I HEARD YOUR OPENING
 
13  STATEMENTS AND ALL AS TO THE ISSUE THAT’s IN FRONT OF ME,
 
14  WHICH IS THE AUTHORITY OF MR. CARTO, WHETHER HE ABUSED THE
 
15  AUTHORITY AS TO THE FARREL ESTATE.
 
16       MR. WAIER:  WELL, YOUR HONOR, NO.  ONE OF THE ISSUES,
 
17  IF YOU ARE ASKING FOR AN OFFER OF PROOF, IS VERY SIMPLE.
 
18  THESE ORGANIZATIONS ALL WORK TOGETHER.  THEY WERE ALL
 
19  INTEGRATED.  THEREFORE, FUNDS THAT WOULD HAVE BEEN EARMARKED
 
20  FOR THE LEGION COULD PROPERLY BE EARMARKED FOR THE F.D.F.A.,
 
21  FOR LIBERTY LOBBY, AND IN OTHER WORDS, THERE WASN'T A
 
22  CONVERSION OF ASSETS PER SE BY PRIOR CONDUCT, EVEN THROUGH
 
23  MR. MARCELLUS TESTIFIED THAT MONIES WENT FREELY FROM ONE
 
24  CORPORATION BACK TO ANOTHER CORPORATION, THAT THEY WERE
 
25  INTERMINGLED.  BECAUSE IT WENT TO ONE CERTAIN CAUSE, THAT
 
26  GOES TO CONVERSION.  THAT GOES TO FRAUD.  AND THAT GOES TO
 
27  BREACH OF FIDUCIARY DUTY, ALL OF THESE ISSUES.
 
28       THE COURT:  I'M NOT SO SURE I AGREE WITH YOU.  I KNOW
			
			

page  191
 
 1  THAT’s THE ARGUMENT.  I CAN TELL THAT FROM MR. Carto’s
 
 2  TESTIMONY.  BUT EACH ONE OF THESE ORGANIZATIONS IS A LEGAL
 
 3  INDIVIDUAL IN THE EYES OF THE LAW.  WHEN MR. CARTO — IF HE
 
 4  IS TOLD — IF I FIND THAT TO BE TRUE THAT HE WAS SUPPOSED
 
 5  TO RECOVER MONIES FROM THE FARREL ESTATE ON BEHALF OF THE
 
 6  LEGION, AS I UNDERSTAND THE LAW, EVEN THOUGH IT MIGHT BE A
 
 7  GOOD THING FOR HIM TO DO, HE HAS NO AUTHORITY TO DO ANYTHING
 
 8  OTHER THAN TURN THOSE OVER TO THE LEGION.  HE DOESN'T CARRY
 
 9  OUT THE WISHES OF THE DECEDENT MISS FARREL OR HIS OWN
 
10  WISHES.  HE ONLY OPERATES AS AN AGENT OF THE LEGION.  THAT'S
 
11  THE ISSUE HERE.  HE CAN'T DECIDE TO — WHERE THEY GO, EVEN
 
12  IF THEY'RE TO A BETTER ORGANIZATION.
 
13       MR. WAIER:  THAT ISSUE WITH RESPECT TO THE WILL, THE
 
14  WILL NEVER DESIGNATED ANYTHING TO THE LEGION.  THAT’s THE
 
15  FIRST ISSUE.  THE WISHES OF JEAN FARREL-EDISON, THE — THE
 
16  WILL ITSELF LITIGATED IN EUROPE.
 
17       THE COURT:  WHEN IT WAS SETTLED OUT, THE LEGION GOT 45
 
18  PERCENT, THE RESIDUAL BENEFICIARY UNDER THE WILL.  IT DIDN'T
 
19  MENTION ANY OF THE OTHER ORGANIZATIONS.
 
20       MR. WAIER:  IT MENTIONED MR. CARTO.
 
21       THE COURT:  I WILL LET YOU DEVELOP THE DEFENSE OVER
 
22  THEIR OBJECTION.  I'M TELLING YOU, THAT JUST BECAUSE I LET
 
23  IT IN DOES NOT NECESSARILY MEAN I'M BUYING THE ARGUMENT THAT
 
24  I HEARD SO FAR WHERE THE MONIES SHOULD HAVE GONE.  YOU --
 
25  IF YOU WANT TO PROVIDE ME LAW I'M WRONG --
 
26       MR. WAIER:  I'LL BE MORE THAN — THAT’s PART AND
 
27  PARCEL OF THE CLOSING ARGUMENT WITH THE LAW.
 
28       THE COURT:  I CERTAINLY HOPE SO.  GO AHEAD.  OVERRULE
			
			

page  192
 
 1  THE OBJECTION.  I'M TELLING YOU, THAT BECAUSE I'M HEARING IT
 
 2  DOESN'T MEAN I THINK IT’s WORTH ANYTHING.
 
 3
 
 4  BY MR. WAIER:
 
 5       Q    NOW I'M LOST AGAIN.  I CAN'T REMEMBER WHERE I WAS
 
 6  AT.
 
 7            LET ME GO INTO --
 
 8       THE COURT:  THE QUESTION WAS WHETHER OR NOT THIS WASN'T
 
 9  THE SAME DESIRE OF BOTH ORGANIZATIONS.  I BELIEVE THAT WAS
 
10  THE --
 
11       THE WITNESS:  YOU ARE TALKING --
 
12       MR. WAIER:  WHAT I'M INDICATING BY THIS, IT WAS THE
 
13  DESIRE OF THE LEGION, THROUGH MR. MARCELLUS, THAT ANYTHING
 
14  THAT JEAN FARREL DID GOES TO SOME OTHER ORGANIZATION,
 
15  INCLUDING THE F.D.F.A.  THAT WAS CARRIED INTO EFFECT.
 
16       MR. MUSSELMAN:  THAT’s AN ARGUMENT, NOT A QUESTION.
 
17       MR. WAIER:  AN OFFER OF PROOF.
 
18       THE COURT:  THAT’s THE OFFER OF PROOF.  I INDICATED HOW
 
19  I FEEL ABOUT THAT ARGUMENT AND OVERRULE YOUR OBJECTION.
 
20
 
21  BY MR. WAIER:
 
22       Q    MR. MARCELLUS, YOU INDICATED YESTERDAY THAT --
 
23  ACTUALLY, YOU INDICATED TODAY THAT MR. CARTO WAS THE FOUNDER
 
24  OF THE INSTITUTE OF HISTORICAL REVIEW, WHICH IS A PART OF
 
25  THE LEGION; ISN'T THAT CORRECT?
 
26       A    YES.
 
27       Q    AND WHAT DUTIES DID YOU BELIEVE THAT THE FOUNDER
 
28  HAD?
			
			

page  193
 
 1       A    IT DIDN'T OCCUR TO ME.
 
 2       Q    IN FACT, YOU TALKED ABOUT YESTERDAY THROUGH — ON
 
 3  DIRECT EXAMINATION, THAT MR. CARTO CONTINUED TO PUT HIMSELF
 
 4  OUT AS THE INSTITUTE OF HISTORICAL REVIEW AFTER HE WAS
 
 5  OUSTED FROM THE LEGION; ISN'T THAT CORRECT?
 
 6       A    DID I MAKE THAT STATEMENT?
 
 7       Q    YES.  DO YOU RECALL TALKING ABOUT THAT?
 
 8       A    I KNOW HE DID, BUT I DON'T RECALL MAKING THAT
 
 9  STATEMENT.
 
10       Q    DO YOU THINK IT WAS WRONG FOR HIM TO SAY HE WAS
 
11  AFFILIATED WITH THE INSTITUTE OF HISTORICAL REVIEW AFTER
 
12  SEPTEMBER 1993 WHEN HE WAS ALLEGEDLY OUSTED FROM THE LEGION?
 
13       A    YES.
 
14       Q    SIR, DIDN'T YOU ALSO SEND OUT WRITTEN MATERIALS
 
15  UNDER THE LEGION AND INSTITUTE OF HISTORICAL REVIEW
 
16  LETTERHEAD AFTER THAT POINT IN TIME WHERE YOU NAMED HIM AS
 
17  THE FOUNDER?
 
18       A    SOME LETTERHEAD WAS USED AFTER THAT POINT, YES.
 
19  IT HAD HIS NAME AS FOUNDER.
 
20       Q    AS AFFILIATED WITH THE LEGION; ISN'T THAT CORRECT?
 
21       A    THAT’s CORRECT.
 
22       Q    THAT WAS NOT JUST SOMETIME, IT WAS ALL THE WAY
 
23  THROUGH INTO 1984; ISN'T THAT CORRECT?
 
24       A    '84?
 
25       Q    1994, EXCUSE ME.
 
26       A    IT MAY VERY WELL HAVE TAKEN US THAT LONG TO PRINT
 
27  NEW LETTERHEAD, YES.
 
28       Q    WELL, WHEN YOU WERE SENDING THESE LETTERHEADS OUT
			
			

page  194
 
 1  WITH MR. Carto’s NAME ON IT AFTER YOU ALLEGEDLY OUSTED HIM
 
 2  OR HAD HIM OUSTED FROM THE LEGION, DID YOU BELIEVE THAT
 
 3  PEOPLE WOULD JUST IGNORE THE FACT THAT YOU PUT LETTERHEAD
 
 4  OUT THAT WAS AFFILIATING MR. CARTO WITH THE LEGION?
 
 5       A    WELL, HE WAS THE FOUNDER.
 
 6       Q    YOU INDICATED SOME DEALINGS THAT THE LIBERTY --
 
 7  STRIKE THAT.
 
 8            DID LIBERTY LOBBY HAVE ANY DEALINGS WITH THE
 
 9  LEGION?
 
10       A    SOME.
 
11       Q    THAT WAS, I THINK YOU IDENTIFIED, JUST BUYING
 
12  BOOKS BACK AND FORTH?
 
13       A    ESSENTIALLY, AND SOME MAILING LISTS RENTAL.  BY
 
14  AND LARGE, MR. CARTO TOOK GREAT PAINS TO KEEP THE TWO
 
15  ORGANIZATIONS SEPARATE.
 
16       Q    WHAT DO YOU MEAN TOOK GREAT PAINS KEEPING THE
 
17  ORGANIZATIONS SEPARATE?
 
18       A    HE FORBADE ME TO TALK TO ANYONE AT LIBERTY LOBBY.
 
19       Q    DID YOU BELIEVE HE HAD A RIGHT TO DO THAT?
 
20       A    I DIDN'T — IT DIDN'T OCCUR TO ME WHETHER OR NOT
 
21  HE HAD A RIGHT.  IT WAS A — WHAT HE TOLD ME TO DO, SO I
 
22  CARRIED OUT HIS WISHES.
 
23       Q    DID YOU UNDERSTOOD — WHEN DID YOU FIRST
 
24  UNDERSTAND MR. CARTO HAD AN AFFILIATION WITH LIBERTY LOBBY?
 
25       A    QUITE EARLY ON WHEN I STARTED THE EMPLOYMENT WITH
 
26  THE LEGION.
 
27       Q    END OF 1970'S?  EARLY 1980'S?
 
28       A    I WOULD SAY PROBABLY WITHIN WEEKS OF MY STARTING
			
			

page  195
 
 1  TO WORK THERE.
 
 2       Q    AT THAT POINT IN TIME, WHAT UNDERSTANDING DID YOU
 
 3  HAVE AS TO AN AFFILIATION BETWEEN LIBERTY LOBBY AND THE
 
 4  LEGION?
 
 5       A    MY UNDERSTANDING WAS THAT THERE WAS NO
 
 6  RELATIONSHIP BETWEEN THE TWO ENTITIES OTHER THAN THE FACT
 
 7  THAT MR. CARTO WAS A KIND OF AGENT OR CONSULTANT TO THE
 
 8  LEGION.
 
 9       Q    NOW, WHEN YOU RETURNED IN 1987 — STRIKE THAT.
 
10            AFTER THE ARSON THAT TOOK PLACE AT THE LEGION
 
11  HEADQUARTERS 1984, DID THE LEGION EVENTUALLY MOVE INTO NEW
 
12  OFFICES?
 
13       A    YES.
 
14       Q    WHERE WAS THAT?
 
15       A    IT WAS 1619 CABRILLO AVENUE.
 
16       Q    WASN'T ONE OF YOUR LANDLORDS LIBERTY LOBBY?
 
17       A    NO.
 
18       Q    WHO WERE YOUR LANDLORDS?
 
19       A    THE GUY WHO OWNED THE TAILOR SHOP NEXT DOOR.
 
20       Q    AFTER THAT, DID YOU MOVE INTO ANY BUILDINGS IN
 
21  WHICH THE FOUNDATION TO DEFEND THE FIRST AMENDMENT WAS THE
 
22  LANDLORD?
 
23       A    YES.
 
24       Q    WHEN WAS THAT?
 
25       A    THAT WOULD HAVE BEEN THE END OF '85.  NO, DECEMBER
 
26  OF '85, I THINK.
 
27       Q    JUST ABOUT THE TIME YOU WERE LEAVING?
 
28       A    JUST BEFORE.  I SORT OF OVERSAW THE MOVE AND THEN
			
			

page  196
 
 1  I RESIGNED.
 
 2       Q    NOW, IN THAT REGARD, MR. MARCELLUS, DID YOU HAVE
 
 3  ANOTHER LANDLORD — DID THE LEGION HAVE ANOTHER LANDLORD?
 
 4       A    LATER, YES.
 
 5       Q    WHO WAS THAT?
 
 6       A    I BELIEVE LIBERTY LIFELINE FOUNDATION.
 
 7       Q    WHAT WAS LIBERTY LIFELINE FOUNDATION?
 
 8       A    GOOD QUESTION.
 
 9       Q    DIDN'T YOU SIGN THE LEASE WITH LIBERTY LIFELINE?
 
10       A    I PROBABLY DID.
 
11       Q    WELL, DID YOU TRY TO FIND OUT WHO THE LANDLORD WAS
 
12  BEFORE YOU SIGNED THE LEASE?
 
13       A    I UNDERSTOOD IT TO BE ELISABETH CARTO.
 
14       Q    WHERE DID YOU GET THAT UNDERSTANDING?
 
15       A    THE H.E.F. USED A P.O. BOX IN TORRANCE AND MAIL
 
16  USED TO COME FOR LIBERTY LIFELINE FOUNDATION ADDRESSED TO
 
17  ELISABETH CARTO.  AND I ACTUALLY, AT SOME POINT, SAW SOME
 
18  PROMOTIONAL MATERIALS THAT HAD AT ONE TIME BEEN PRODUCED BY
 
19  SOMETHING CALLING THE LIBERTY LIFELINE FOUNDATION.  I WAS
 
20  GENERALLY FAMILIAR WITH IT.  ELISABETH WAS THE PERSON WHO
 
21  CONTROLLED THAT ENTITY.
 
22       Q    BUT YOU COMMITTED THE LEGION TO A LEASE WITH
 
23  LIBERTY LIFELINE, DID YOU NOT?
 
24       A    YES.
 
25       Q    WHY?
 
26       A    BECAUSE THE LEGION NEEDED THE SPACE AND LIBERTY
 
27  LIFELINE WAS WILLING TO LEASE THE SPACE.  AND BECAUSE
 
28  ELISABETH CARTO WAS ASSOCIATED WITH THE LEGION AND HAD BEEN
			
			

page  197
 
 1  FOR YEARS, I HAD NO REASON TO DOUBT THAT IT WAS LEGITIMATE.
 
 2       Q    IN 19 — YOU TESTIFIED YESTERDAY — JUST SO I'M
 
 3  CLEAR, YESTERDAY YOU TESTIFIED THAT IN 1985 AFTER JEAN
 
 4  FARREL-EDISON’s DEATH, THAT THE LEGION’s ASSETS WERE ABOUT
 
 5  $200,000?
 
 6       A    I THINK I TESTIFIED MAYBE AFTER HER DEATH, THE
 
 7  LEGION’s ASSETS MIGHT HAVE BEEN OVER $100,000 OR 125-.  I
 
 8  DON'T THINK I SAID 200,000.
 
 9       Q    I BELIEVE YOU SAID 150- TO 200,000.
 
10       MR. MUSSELMAN:  OBJECTION.  COUNSEL IS INSTRUCTING THE
 
11  WITNESS WHAT THE TESTIMONY WAS.  IT’s NOT A QUESTION.
 
12       THE COURT:  OVERRULED.  I THINK HE IS TRYING TO JOG THE
 
13  MEMORY.
 
14       MR. MUSSELMAN:  HE SAID CORRECT.
 
15
 
16  BY MR. WAIER:
 
17       Q    1986, DIDN'T YOU INDICATE THAT THE ASSETS OF THE
 
18  LEGION WERE 200,000?
 
19       A    '86.
 
20       Q    YES?
 
21       A    I THINK I MIGHT HAVE SAID BETWEEN 150- TO 200,000.
 
22       Q    HOW ABOUT 1987?
 
23       A    AROUND THE SAME APPROXIMATE AMOUNT.
 
24       Q    ARE YOU FAMILIAR WITH A GENTLEMAN WITH THE NAME OF
 
25  ROBERT BERKEL?
 
26       A    YES.
 
27       Q    HE SUCCEEDED YOU AFTER YOU LEFT THE LEGION IN
 
28  1986?
			
			

page  198
 
 1       A    THAT’s CORRECT.
 
 2       Q    AND HE WAS WITH THE LEGION FOR A PERIOD OF TIME
 
 3  UNTIL YOU RETURNED?
 
 4       A    HE WAS THERE, YES, JUST ABOUT THE ENTIRE PERIOD.
 
 5  I BELIEVE I WAS ABSENT.
 
 6       Q    WHAT WERE THE ASSETS OF THE LEGION IN 1986?  WHAT
 
 7  DID THEY COMPRISE?
 
 8       A    THEY COMPRISED ESSENTIALLY, I WOULD SAY, CASH AND
 
 9  INVENTORY.
 
10       Q    HOW MUCH CASH?
 
11       A    I DON'T RECALL WHAT THE BREAKDOWN ON THE ASSETS
 
12  WERE.
 
13       Q    WASN'T VERY MUCH, WAS IT?
 
14       A    WHEN I CAME BACK TO WORK, THERE — THE POINT I
 
15  CAME BACK TO WORK IN '87?
 
16       Q    YES.
 
17       A    THERE WASN'T A LOT OF CASH IN JUNE OF '87 WHEN I
 
18  RETURNED.
 
19       Q    IN FACT, WHEN YOU TESTIFIED AS TO 1986, THAT --
 
20  THE ASSETS OF 1986, YOU WERE RELYING ON FINANCIAL
 
21  STATEMENTS?
 
22       A    I WAS RELYING UPON MY — WHAT I RECALLED ABOUT
 
23  THE FINANCIAL STATEMENTS DURING THAT PERIOD, YES.
 
24       Q    SIR, ISN'T IT TRUE THAT YOU SAID — STRIKE THAT.
 
25            SOME OF THE ASSETS WERE IN BOOK INVENTORY; IS THAT
 
26  CORRECT?
 
27       A    YES.
 
28       Q    AND SOME WERE IN OFFICE FURNITURE; IS THAT
			
			

page  199
 
 1  CORRECT?
 
 2       A    THERE WERE SOME.  YEAH, SURE.
 
 3       Q    SOME WERE INVOLVED IN — SOME OF THE ASSETS WERE
 
 4  OTHER TANGIBLE THINGS, SUCH AS PICTURES AND SO FORTH?
 
 5       A    I DON'T KNOW WHAT THE DEGREE TO WHICH THOSE ASSETS
 
 6  WOULD AMOUNT TO MUCH, BUT I WILL GRANT YOU YES, THEY WERE
 
 7  PROBABLY INCLUDED IN THE ASSETS.
 
 8       Q    SIR, ISN'T IT TRUE THAT ALL OF THE ASSETS OF THE
 
 9  LEGION WERE ENCUMBERED IN 1986?
 
10       A    THEY MAY VERY WELL HAVE BEEN, YES.
 
11       Q    IN FACT, ISN'T IT TRUE THAT THERE WAS — THEY
 
12  WERE ENCUMBERED AS SECURITY FOR A PROMISSORY NOTE OF
 
13  $40,000?
 
14       A    THAT COULD VERY WELL BE TRUE, YES.
 
15       Q    IN FACT, YOU KNOW THAT COULD BE TRUE, DON'T YOU?
 
16       A    WITHOUT REFRESHING MY MEMORY, SEEING THE DOCUMENT
 
17  TO THE TIMES AND THE AMOUNTS, NO, I DON'T HAVE A CLEAR
 
18  RECOLLECTION.
 
19       Q    IN 1991, DIDN'T YOU INDICATE TO THIS COURT THAT
 
20  THE LEGION HAD APPROXIMATELY $200,000 IN ASSETS?
 
21       A    I WASN'T HERE IN 1991 IN THIS COURT.
 
22       Q    NO, NO.  DID YOU INDICATE TO THIS COURT THAT IN
 
23  1991, THE LEGION HAD ASSETS OF $200,000?
 
24       A    YES.  I MAY VERY WELL HAVE TESTIFIED TO THAT.
 
25       Q    ISN'T IT TRUE THOSE ASSETS WERE ENCUMBERED, ALL OF
 
26  THEM?
 
27       A    WELL, I SINCE KNOW THEY WERE — THEY SHOULDN'T
 
28  HAVE BEEN ENCUMBERED.
			
			

page  200
 
 1       Q    SIR, PLEASE ANSWER THE QUESTION.  ISN'T IT TRUE
 
 2  THAT IN 1991, THE $200,000 WORTH OF ASSETS THAT YOU TALKED
 
 3  ABOUT WERE ALL ENCUMBERED?
 
 4       A    FALSELY, YES.
 
 5       Q    FALSELY?
 
 6       A    YES, I BELIEVE THEY WERE FALSELY ENCUMBERED.
 
 7       Q    SIR, DIDN'T YOU FILE — YOU, MR. MARCELLUS, FILE
 
 8  A UCC-1 ENCUMBERING ALL OF THOSE ASSETS?
 
 9       A    YES, SIR, I DID.
 
10       Q    SIR, WELL --
 
11       A    EXCUSE ME.  NO, I DID NOT FILE IT.  I SIGNED IT.
 
12       Q    AND YOU SIGNED THAT KNOWING THAT IT WAS GOING TO
 
13  BE FILED WITH THE SECRETARY OF STATE OF THIS — OF THIS
 
14  STATE; ISN'T THAT CORRECT?
 
15       A    I ASSUMED IT WOULD BE FILED IF I SIGNED IT, YES.
 
16       Q    WHICH ENCUMBERED EVERY SINGLE ASSET OF THE LEGION;
 
17  ISN'T THAT CORRECT?
 
18       MR. MUSSELMAN:  CALLS FOR LEGAL CONCLUSION.
 
19       THE COURT:  SUSTAINED.  HE CAN TESTIFY WHAT HE THOUGHT
 
20  IT ENCUMBERED.
 
21       MR. WAIER:  SURE.
 
22
 
23  BY MR. WAIER:
 
24       Q    YOU UNDERSTOOD THAT TO COVER EVERY SINGLE ASSET OF
 
25  THE LEGION; ISN'T THAT CORRECT?
 
26       A    NO, ONLY BOOKS AND INVENTORY.
 
27       MR. WAIER:  I WOULD LIKE TO MARK AS NEXT IN ORDER, YOUR
 
28  HONOR, THE UCC-1, AND IT’s AS LEGIBLE AS I CAN GET IT
			
			

page  201
 
 1  FOR — FROM THE LEGION TO THE HISTORICAL EDUCATION
 
 2  FOUNDATION.  IT’s NEXT IN ORDER, EXHIBIT 173.
 
 3
 
 4  BY MR. WAIER:
 
 5       Q    LET ME HAND YOU, ALTHOUGH IT’s NOT THAT LEGIBLE.
 
 6  DO YOU RECOGNIZE THAT DOCUMENT, SIR?
 
 7       A    I BELIEVE I HAVE SEEN THIS BEFORE, YES.
 
 8       Q    I WILL REPRESENT TO YOU THAT IF YOU RECALL, THIS
 
 9  WAS SHOWN TO YOU IN PRIOR LITIGATION BETWEEN THE PARTIES
 
10  CONCERNING THE $187,000 PROMISSORY NOTE.
 
11       A    H.E.F. BUSINESS?
 
12       Q    YES.
 
13       A    YES.
 
14       Q    DO YOU RECALL THAT AT LEAST THE ONE SHOWN TO YOU
 
15  THERE, YOUR SIGNATURE DID APPEAR, ALTHOUGH IT’s NOT AS
 
16  LEGIBLE HERE?
 
17       A    WELL, NOT ONLY IS IT NOT AS LEGIBLE, I CAN'T EVEN
 
18  SEE IT.
 
19       Q    DO YOU RECALL SIGNING SUCH A UCC-1?
 
20       A    I BELIEVE I DID.  I BELIEVE I DID SIGN THE UCC-1.
 
21       Q    DO YOU BELIEVE THIS IS THE ONE YOU SIGNED?  I CAN
 
22  PROVIDE YOU A MORE CLEARER ONE ON MONDAY WHEN YOU COME
 
23  BACK.  BUT THIS, I WILL STATE TO YOU, CAME FROM YOUR OWN
 
24  EXHIBITS PRODUCED DURING YOUR DEPOSITION.
 
25       MR. MUSSELMAN:  OBJECTION, YOUR HONOR.  HE’s TELLING
 
26  THE WITNESS WHAT THE EXHIBIT IS.
 
27       MR. WAIER:  JUST TO REFRESH THE RECOLLECTION.
 
28       MR. MUSSELMAN:  NO SUCH EVIDENCE WITHOUT FOUNDATION.
			
			

page  202
 
 1       THE COURT:  OVERRULE THE OBJECTION.
 
 2
 
 3  BY MR. WAIER:
 
 4       Q    DOES THIS LOOK FAMILIAR TO THE UCC-1 YOU SIGNED?
 
 5       A    IT LOOKS SIMILAR TO ONE THAT — THAT I SAW IN THE
 
 6  H.E.F. CASE WHERE MY SIGNATURE WAS MORE LEGIBLE.
 
 7       Q    AND DO YOU RECALL, ON THIS UCC-1 STATEMENT THAT
 
 8  WAS SIGNED, THE LEGION GAVE AS SECURITY ALL OF THE OFFICE
 
 9  EQUIPMENT, LEASEHOLD INTEREST — LEASEHOLD INTEREST, MAILING
 
10  LISTS, BOOKS AND BOOK INVENTORY, ACCOUNTS RECEIVABLE --
 
11  THAT WOULD INCLUDE THE FARREL ESTATE; ISN'T THAT CORRECT?
 
12       MR. MUSSELMAN:  OBJECTION.  CALLS FOR LEGAL CONCLUSION.
 
13       THE COURT:  SUSTAINED.
 
14
 
15  BY MR. WAIER:
 
16       Q    DIDN'T YOU CONSIDER THE FARREL ESTATE TO BE
 
17  ACCOUNTS RECEIVABLE OF THE LEGION?
 
18       A    DIDN'T OCCUR TO ME IT WAS AN ACCOUNT RECEIVABLE.
 
19  IT’s NOT AN ACCOUNT RECEIVABLE AS I UNDERSTAND AN ACCOUNT
 
20  RECEIVABLE.
 
21       Q    DIDN'T YOU THINK THE MONEY WAS OWED TO THE LEGION?
 
22       A    WELL, I DIDN'T KNOW WHAT LEGALLY HAD TO TAKE PLACE
 
23  BEFORE IT COULD BE DETERMINED THAT IT WAS SUPPOSED TO BE THE
 
24  LEGION'S.
 
25       Q    HOW ABOUT FUTURE ACCOUNT RECEIVABLES?  THAT WAS
 
26  ALSO LISTED ON THIS UCC-1.
 
27       A    YES, I CAN SEE THAT.
 
28       Q    DID YOU BELIEVE THE FARREL ESTATE WAS A FUTURE
			
			

page  203
 
 1  ACCOUNT RECEIVABLE?
 
 2       A    I DON'T — NO, I DON'T THINK IT OCCURRED TO ME
 
 3  THIS INVOLVED ANYTHING TO DO WITH THE FARREL ESTATE.
 
 4       Q    IT GOES ON, “AND ALL OTHER TANGIBLE AND INTANGIBLE
 
 5  ASSETS OWNED BY THE DEBTOR,” THE DEBTOR BEING THE LEGION.
 
 6  SIR, WHAT OTHER ASSETS WERE LEFT TO THE LEGION THAT WERE
 
 7  LEFT UNENCUMBERED?
 
 8       A    THE CEILING FAN MAYBE.  I DON'T KNOW.  THIS IS
 
 9  PRETTY THOROUGH.
 
10       Q    SIR, DOES THAT NOW REFRESH YOUR RECOLLECTION THAT
 
11  ALL OF THE ASSETS, INCLUDING ACCOUNTS RECEIVABLE AND FUTURE
 
12  ACCOUNTS RECEIVABLE, WERE ENCUMBERED AS OF 1991?
 
13       MR. MUSSELMAN:  CALLS FOR LEGAL CONCLUSION.
 
14       THE COURT:  OVERRULED.  I KNOW WHAT THE ANSWER IS.  GO
 
15  AHEAD.
 
16       MR. WAIER:  I'M ASKING IF IT REFRESHES HIS
 
17  RECOLLECTION.  HE STATED IT WASN'T.  I ASK IF THIS REFRESHES
 
18  HIS RECOLLECTION.
 
19       THE WITNESS:  ASSUMING I SIGNED THIS, IF I DID SIGN IT
 
20  AT THE TIME I SIGNED IT, YES, I BELIEVED AT THAT TIME THAT
 
21  THE ASSETS WERE — ALL THE ASSETS WERE ENCUMBERED.
 
22
 
23  BY MR. WAIER:
 
24       Q    THIS WAS SIGNED IN APPROXIMATELY JULY OF 1991;
 
25  ISN'T THAT CORRECT?
 
26       A    THAT WOULD FIT.
 
27       Q    I BELIEVE YOU TESTIFIED IN PRIOR LITIGATION THAT
 
28  THIS WAS DONE AT THE DIRECTION OF MR. CARTO?
			
			

page  204
 
 1       A    YES.
 
 2       Q    WELL, ISN'T IT TRUE IT WAS DONE AT THE DIRECTION
 
 3  OF WILLIAM F. HULSY, THE ATTORNEY FOR THE LEGION, WHO YOU
 
 4  IDENTIFIED YESTERDAY?
 
 5       A    WHO I IDENTIFIED YESTERDAY?
 
 6       Q    DIDN'T YOU IDENTIFY HIM AS BEING THE ATTORNEY FOR
 
 7  THE LEGION?
 
 8       A    PERHAPS I DID.  I DON'T RECALL.  MAYBE I DID.
 
 9       Q    WAS HE THE ATTORNEY FOR THE LEGION IN 1991?
 
10       A    YES.
 
11       Q    ISN'T IT TRUE THAT YOU DID THIS AT THE DIRECTION
 
12  OF MR. HULSY?
 
13       A    NO.
 
14       MR. WAIER:  I WOULD LIKE TO HAVE MARKED AS NEXT IN
 
15  ORDER — WOULD BE EXHIBIT 174 MARKED FOR IDENTIFICATION A
 
16  LETTER DATED MAY 29, 1991, TO TOM MARCELLUS FROM WILLIAM
 
17  HULSY.
 
18       MR. BEUGELMANS:  MAY WE SEE IT, COUNSEL?
 
19       MR. WAIER:  I'LL HAND YOU A COPY.
 
20
 
21  BY MR. WAIER:
 
22       Q    LET ME HAND YOU WHAT I HAVE MARKED FOR
 
23  IDENTIFICATION AS EXHIBIT 174.  MR. MARCELLUS, ISN'T IT TRUE
 
24  THAT AT THIS POINT IN TIME, YOU WERE ASKING MR. HULSY, THE
 
25  ATTORNEY FOR THE LEGION, WHAT YOU COULD DO TO HIDE ASSETS
 
26  FROM CREDITORS?  SIR, BEFORE YOU LOOK AT THE LETTER, COULD
 
27  YOU ANSWER MY QUESTION?
 
28       A    WHAT WAS THE QUESTION?
			
			

page  205
 
 1       Q    ISN'T IT TRUE THAT AT THIS TIME IN MAY OF 1991,
 
 2  THAT YOU WERE ASKING MR. HULSY HOW THE LEGION COULD BEST
 
 3  HIDE ASSETS FROM CREDITORS OR POTENTIAL CREDITORS?
 
 4       A    I BELIEVE I DID ASK THAT OF MR. HULSY, YES.
 
 5       Q    IN FACT, HE RESPONDED WITH A LETTER; ISN'T THAT
 
 6  CORRECT?
 
 7       A    YES.
 
 8       Q    THIS IS THE LETTER YOU HAVE IN FRONT OF YOU?
 
 9       A    YES.
 
10       Q    AND YOU DO RECALL RECEIVING THIS AT ABOUT THAT
 
11  TIME?
 
12       A    YES.
 
13       Q    AND THIS WAS AT THE SAME POINT IN TIME — STRIKE
 
14  THAT.
 
15            THIS WAS AFTER THE JEAN FARREL-EDISON ESTATE HAD
 
16  BEEN SETTLED BY MR. CARTO; ISN'T THAT CORRECT?
 
17       A    I DON'T KNOW.  I DON'T KNOW EXACTLY WHEN THAT WAS
 
18  SETTLED.  I HAVE TO SEE THE DOCUMENTS TO REFRESH MY MEMORY.
 
19       Q    DO YOU RECALL IT WAS SETTLED IN 1990?
 
20       A    SEEMS LIKE 1990.
 
21       Q    ACTUALLY, BEFORE THE LETTER, WASN'T IT?
 
22       A    IF IT WAS 1990, THEN IT WAS BEFORE THIS LETTER.
 
23       Q    SIR, CAN YOU SHOW ME ANYWHERE IN THE LETTER, IF
 
24  YOU COULD — SHOW ME ANYWHERE IN THE LETTER WHERE IT TALKS
 
25  ABOUT ANYTHING COMING FROM THE JEAN FARREL-EDISON ESTATE.
 
26       MR. MUSSELMAN:  OBJECTION.  THIS WITNESS HAS TESTIFIED
 
27  HE WROTE THE LETTER.
 
28
			
			

page  206
 
 1  BY MR. WAIER:
 
 2       Q    YOU REVIEWED THE LETTER --
 
 3       THE COURT:  COUNSEL, WHEN YOU HEAR THE OBJECTION,
 
 4  INSTEAD OF ARGUING WITH HIM — YOU WILL NEVER AGREE WITH
 
 5  HIM; OTHERWISE, YOU WOULDN'T NEED ME.
 
 6       MR. WAIER:  I'M WITHDRAWING THE QUESTION AND ASKING A
 
 7  NEW QUESTION.  I'M SORRY.  I APOLOGIZE, YOUR HONOR.
 
 8
 
 9  BY MR. WAIER:
 
10       Q    SIR, YOU REVIEWED THE LETTER, DID YOU NOT, AT THE
 
11  TIME — ABOUT THE TIME THAT — MAY 29, 1991?
 
12       A    I'M SURE I DID.
 
13       Q    AND IF YOU WILL TAKE A LOOK AT THIS LETTER, AT THE
 
14  TIME YOU GOT IT, YOU READ IT AND YOU ACTED ON IT, DID YOU
 
15  NOT?
 
16       A    NO.
 
17       MR. MUSSELMAN:  COMPOUND.  THREE DIFFERENT PARTS.
 
18
 
19  BY MR. WAIER:
 
20       Q    OKAY.  AT THE TIME YOU GOT THIS LETTER, YOU ACTED
 
21  UPON THE ADVICE MR. HULSY GAVE YOU; ISN'T THAT CORRECT?
 
22       A    NO, THAT’s NOT CORRECT.
 
23       Q    YOU DIDN'T FILE THE UCC-1 AFTER THAT ENCUMBERING
 
24  THE ASSETS OF THE LEGION?
 
25       A    THERE WERE INTERVENING EVENTS AND OTHER
 
26  PERSONALITIES INVOLVED.  I DIDN'T JUST GET THIS LETTER AND
 
27  DECIDE TO ACT.  NO, I TOOK IT UP WITH THE CARTOS, WHO ASKED
 
28  ME TO WRITE TO HULSY IN THE FIRST PLACE TO GET THIS
			
			

page  207
 
 1  INFORMATION.
 
 2       Q    WILLIS CARTO — YOU UNDERSTOOD WILLIS CARTO HAD
 
 3  CONVERSATIONS WITH MR. HULSY AT THIS TIME; ISN'T THAT
 
 4  CORRECT?
 
 5       A    I DON'T — YES.  I INTRODUCED MR. CARTO TO
 
 6  MR. HULSY.  SO THERE WAS SOME CONTACT BEFORE THE LETTER,
 
 7  SURE.
 
 8       THE COURT:  GO OFF THE RECORD A SECOND IF YOU ARE GOING
 
 9  TO MAKE IT.
 
10       MR. WAIER:  THIS MIGHT BE A GOOD TIME.  THANK YOU, YOUR
 
11  HONOR.
 
12
 
13                   (PROCEEDINGS RECESSED.)
 
14
 
15
 
16
 
17
 
18
 
19
 
20
 
21
 
22
 
23
 
24
 
25
 
26
 
27
 
28
			
			

Previous | Next