Willis Carto archive

Including information about his associates

Legion v Carto, Trial transcript, Volume 6


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page 612
 
 
 
 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.                      )
                                  )
 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 7, 1996
15
                              VOLUME 6
16
                            PAGES 612-741
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 613
 
 
 
 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 7, 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 614
 
 
 
 1  VISTA, CALIFORNIA, NOVEMBER 7, 1996, DEPARTMENT 11:
 
 2
 
 3       THE COURT:  ON THE RECORD.  THE PARTIES ARE PRESENT.  I
 
 4  HAVE BEEN HANDED A 13-PAGE MOTION TO DISMISS UNDER CCP
 
 5  631.8.
 
 6       MR. WAIER:  TWO MOTIONS I FILED.
 
 7       THE COURT:  YES, I KNOW.  I WAS TALKING AS FAST AS I
 
 8  FEEL COMFORTABLE TALKING.
 
 9            AND A REQUEST FOR JUDICIAL NOTICE, AND THAT’s A
 
10  BUNCH OF PAGES.  IT’s HELPFUL IF I COULD GET THE STUFF THE
 
11  NIGHT BEFORE.  THEN I CAN SPEND MY EVENING READING IT.  THIS
 
12  WAY WHEN WE'RE HALF AN HOUR LATE, AND I HAVE TO TAKE SOME
 
13  TIME TO DO IT, WE STOP FOR AN HOUR.
 
14       MR. WAIER:  I APOLOGIZE TO THE COURT FOR THIS.  THE
 
15  ONLY TIME I HAD TO DO THIS STUFF, YOUR HONOR, IS WHEN I
 
16  GET — LEAVE HERE AT 5 O'CLOCK.  I DON'T GET TO MY OFFICES
 
17  UNTIL 6:30 AND TRUST ME, I WORKED ALL NIGHT THE NIGHT BEFORE
 
18  AND LAST NIGHT.
 
19       THE COURT:  I KNEW THIS THING WAS READY YESTERDAY.
 
20       MR. WAIER:  IT WAS NOT READY UNTIL AFTER THE EXHIBITS
 
21  WERE PLACED IN ORDER.  I DIDN'T KNOW WHICH WAY THE EXHIBITS
 
22  WENT.  I WASN'T GOING TO MISREPRESENT ANYTHING IN MY PAPERS
 
23  TO THE COURT WITHOUT THE EXHIBITS.
 
24       THE COURT:  THIS IS A REASON WHY I USUALLY EXERCISE MY
 
25  DISCRETION UNDER 631.8 AND WAIT UNTIL THE END OF ALL THE
 
26  EVIDENCE.
 
27            LET ME INQUIRE FIRST.  IS THERE A WITNESS WHO
 
28  NEEDS TO BE CALLED RIGHT NOW?  THE DEFENSE HAS RESTED.
			
			

page 615
 
 
 
 1       MR. BEUGELMANS:  WITHOUT TAKING UNDUE TIME FROM THE
 
 2  COURT, YESTERDAY WE WENT OVER THE EXHIBITS.  WE DID NOT
 
 3  ADMIT EXHIBIT 60, AND THAT WAS INADVERTENT.  THE
 
 4  PLAINTIFF — IT WENT BY ME AND MR. MUSSELMAN.
 
 5            EXHIBIT 60 IS A MINUTE, DATED SEPTEMBER 16, 1993,
 
 6  EXHIBIT “C” TO LEWIS FURR’s DEPOSITION.  HE DID AUTHENTICATE
 
 7  IT IN THE DEPOSITION.  AT THIS POINT WE ASK THE COURT FOR
 
 8  PERMISSION TO INTRODUCE EXHIBIT 60 INTO EVIDENCE.
 
 9       MR. LANE:  YOUR HONOR, I DON'T THINK IT WENT BY
 
10  ANYBODY.  MY NOTES SHOW THAT EXHIBIT 60 WAS OFFERED BY THE
 
11  PLAINTIFF.  WE OBJECTED TO IT.  THE COURT RULED IT WAS NOT
 
12  ADMISSIBLE.  NOTHING WENT BY ANYBODY.  NOTHING TOO
 
13  INADVERTENT ABOUT WHAT TOOK PLACE.
 
14            MR. BEUGELMANS MADE A STATEMENT, WHICH IS NOT
 
15  TRUE.  I IN MY CONTEMPORANEOUS NOTES WILL SHOW IT AND THE
 
16  COURT RECORD AS WELL.
 
17       THE COURT:  MY NOTES SHOW IT WAS NOT ADMITTED OVER
 
18  THE — IT WAS NOT ADMITTED.
 
19       MR. BEUGELMANS:  AT THE TIME WE WERE GOING OVER THAT
 
20  LAST NIGHT I DID NOT RECALL THAT THIS HAD BEEN AUTHENTICATED
 
21  BY LEWIS FURR’s DEPOSITION.  I CAN LODGE THAT WITH THE COURT
 
22  THIS MORNING.  I CAME IN AND TOOK A LOOK.  IT’s EXHIBIT “C"
 
23  TO LEWIS FURR’s DEPOSITION.  HE STATES HE WAS PRESENT AT THE
 
24  MEETING AND SO WERE THE OTHER DIRECTORS.  IT’s THE LAST
 
25  EXHIBIT TO MR. FURR’s BRIEF DEPOSITION.  I FORGOTTEN THAT
 
26  YESTERDAY.
 
27       THE COURT:  OKAY.  IF THAT’s TRUE AND THE FURR'S
 
28  DEPOSITION IS IN MY OFFICE, I WOULD PROBABLY CHANGE MY
			
			

page 616
 
 
 
 1  RULING ON 60 TO BE ADMITTED.
 
 2       MR. WAIER:  THE REASON WHY YOU RULED ON IT WAS BECAUSE
 
 3  OF RELEVANCY GROUND.  YOU DIDN'T RULE AS HAVING RELEVANCE TO
 
 4  THE ISSUE IN THE LITIGATION.  THIS WAS SEPTEMBER 16, 1993
 
 5  MINUTES OF MEETINGS, AND YOU BELIEVED THAT THERE WAS NO
 
 6  BASIS OR REASON — AT LEAST NOT HAVE BEEN SHOWN TO ANY
 
 7  RELEVANCY TO THE DOCUMENT.  THAT WAS THE ARGUMENT MADE
 
 8  YESTERDAY, NOT THAT IT WAS NOT AUTHENTICATED, OR THERE WAS
 
 9  NO FOUNDATION BECAUSE LAVONNE FURR’s SIGNATURE APPEARS ON
 
10  HERE.  THAT WASN'T THE ISSUE.
 
11       THE COURT:  WHAT IS THE RELEVANCY?
 
12       MR. BEUGELMANS:  IF YOU WOULD PLEASE TURN TO
 
13  EXHIBIT 63.  IF YOU TAKE A SECOND TO READ 63, YOUR HONOR.
 
14       MR. WAIER:  63 HAS NOT BEEN ADMITTED EITHER TO MY
 
15  KNOWLEDGE, IT’s NOT ADMITTED.  ALL I REMEMBER THE COURT
 
16  READING 63.
 
17       MR. BEUGELMANS:  AN OFFER OF PROOF.  THE TESTIMONY WILL
 
18  SHOW SUBSEQUENT TO LAVONNE AND LEWIS FURR’s RESIGNATION
 
19  MR. WILLIS CARTO SENT A LETTER, SEPTEMBER 21, 1993,
 
20  REQUESTED THEY BACKDATE MINUTES.  HE INCLUDED BLANK MINUTES
 
21  WITH THE LETTER OF SEPTEMBER 21, 1993.
 
22            AND HE STATES:  “SO PLEASE TYPE THE MINUTES, BLANK
 
23  MINUTES, ON THE SAME MACHINE OF THE RESIGNATION AND SEND IT
 
24  BACK TO ME WITH THE ENCLOSED LABEL."
 
25            AS INSTRUCTED BY MR. WILLIS CARTO, THE FURRS DID
 
26  PREPARE EXHIBIT 60.  IT’s BACKDATED TO SEPTEMBER 16,
 
27  PREPARED IN THE SAME TYPEWRITER AS THE RESIGNATION.
 
28            THE RELEVANCE IS TO SHOW — IF I MAY ONE SECOND --
			
			

page 617
 
 
 
 1  TO SHOW THAT THE FURRS ARE NOT MERELY PAWNS IN MR. Carto’s
 
 2  HAND OR PUPPETS, BUT THEY'RE COCONSPIRATORS.  THEY CREATED
 
 3  FALSE RECORDS OF THIS NONPROFIT CORPORATION, PERHAPS AT
 
 4  MR. Carto’s INSTRUCTION, BUT NONETHELESS, IT SHOWS THERE ARE
 
 5  MENS REA.  IT SHOWS THE INVOLVEMENT AS ACTIVE PARTICIPANT IN
 
 6  THE CONSPIRACY IN MALFEASANCE, YOUR HONOR.
 
 7       THE COURT:  IT — I THINK IT SHOWS THOSE THINGS, IF ONE
 
 8  WANTS TO PUT THAT INTERPRETATION ON IT.
 
 9            WHAT ABOUT THE PROBLEM I DON'T THINK MR. CARTO
 
10  EVEN TESTIFIED ABOUT 60 OR 63 YET?
 
11       MR. BEUGELMANS:  I ANTICIPATE WE WERE SAVING 63 FOR THE
 
12  CROSS-EXAMINATION FOLLOWING DIRECT.  I EXPECT THAT HE WILL
 
13  AUTHENTICATE IT.
 
14       THE COURT:  I'M GOING TO KEEP MY RULING ON 60 AND 63.
 
15  IT MAY CHANGE IF AND WHEN MR. CARTO TAKES THE STAND AGAIN
 
16  AND IF AND WHEN HE’s QUESTIONED ABOUT THE THINGS.  I'LL KEEP
 
17  IN MIND THE RELEVANCY ARGUMENT I HAVE HEARD.
 
18            ANYTHING ELSE?
 
19       MR. BEUGELMANS:  ONE MORE POINT.  I BEG THE
 
20  INDULGENCE.  I HAVE TO LEAVE AT 11 O'CLOCK.  MY
 
21  GRANDMOTHER-IN-LAW PASSED AWAY MONDAY.  MR. MUSSELMAN WILL
 
22  STAY AND CONTINUE; BUT IF I LEAVE, IT’s NOT — I WILL BE
 
23  GONE UNTIL LATE THIS AFTERNOON.
 
24       THE COURT:  GOOD ENOUGH.  I SHOULD AT LEAST, I SUPPOSE,
 
25  READ THE MOTIONS.
 
26       MR. WAIER:  YOUR HONOR, I WOULD SUGGEST, IF YOU WOULD
 
27  LIKE, THERE ARE ISSUES THAT WE CAN ARGUE TO YOU, AND THEN
 
28  MAYBE OVER WHATEVER PERIOD OF TIME YOU WOULD LIKE TO READ
			
			

page 618
 
 
 
 1  THOSE TAKE INTO ACCOUNT I INTEND TO ARGUE THIS MORNING.  I
 
 2  DON'T INTEND TO REGURGITATE ANYTHING IN THE PAPERS, BUT
 
 3  THERE ARE ISSUES NOT COVERED IN THE PAPERS I WOULD LIKE TO
 
 4  ARGUE AS WELL.
 
 5       THE COURT:  DO WE HAVE A WITNESS HERE THAT WE COULD PUT
 
 6  ON?  I WOULD LIKE NOT TO INCONVENIENCE WITNESSES.
 
 7       MR. WAIER:  WE DO HAVE PARTIES HERE, ELISABETH CARTO
 
 8  AND WILLIS CARTO.  THERE IS NO — I'M NOT OF AN
 
 9  UNDERSTANDING THAT THERE’s ANY OTHER WITNESS.  I DON'T KNOW
 
10  THIS GENTLEMAN WITH THE BEARD.
 
11       UNIDENTIFIED SPECTATOR:   I'M SANTA CLAUS.
 
12       MR. LANE:  WE HAVE NO WITNESSES HERE EXCEPT THE PARTIES
 
13  WHO WILL NOT BE INCONVENIENCED, OBVIOUSLY.
 
14       THE COURT:  I WILL TAKE A LITTLE BIT OF TIME TO READ
 
15  SOME OF THIS, AND I CAN TELL YOU ALREADY PROBABLY ABOUT FIVE
 
16  TIMES THIS IS NOT MY NORMAL WAY OF DOING IT.  IF I MAKE A
 
17  CHANGE, I'LL LISTEN TO THE ARGUMENT.
 
18       MR. MUSSELMAN:  IF YOUR HONOR IS GOING TO READ THE
 
19  BRIEF, THERE WAS AN EARLIER FILED MOTION ON THE JUDGMENT ON
 
20  THE PLEADINGS BROUGHT ON THE SAME ALLEGED RES JUDICATA
 
21  GROUND.  IT WAS OPPOSED SUCCESSFULLY AND THE BRIEF OPPOSING
 
22  IT IS IN THE FILE.
 
23       MR. WAIER:  THAT WAS WITHOUT PREJUDICE TO BRING IT
 
24  AGAIN.
 
25       THE COURT:  SURE, AND I READ THAT.
 
26
 
27                   (PROCEEDINGS RECESSED.)
 
28
			
			

page 619
 
 
 
 1       THE COURT:  ON THE RECORD.  I WAS ABLE TO READ OVER
 
 2  THIS RATHER RAPIDLY BECAUSE I READ THIS BEFORE.  LOTS OF
 
 3  THIS IS IN THE PRETRIAL BRIEF.  SINCE I TOLD YOU I READ THE
 
 4  8 VOLUMES IN THE CASE, I ALREADY READ THE ARBITRATION BRIEFS
 
 5  AND THE DECISION OF THE ARBITRATOR.  IT DIDN'T TAKE LONG TO
 
 6  GO THROUGH THIS.
 
 7            IF THERE’s SOMETHING THE DEFENSE WOULD LIKE TO
 
 8  SAY, WHICH IS IN ADDITION TO THIS, FINE.  IF NOT, I CAN TELL
 
 9  YOU I'M PREPARED TO DENY THE MOTION UNDER 631.8 AND PROCEED
 
10  ON WITH THE CASE.
 
11            TELL ME IF THERE’s SOMETHING NEW I SHOULD CONSIDER
 
12  I HAVEN'T READ.
 
13       MR. LANE:  I WOULD LIKE TO ADDRESS THE COURT, IF I
 
14  MIGHT.  I WOULD LIKE TO CALL TO THE COURT’s ATTENTION
 
15  CORPORATION CODE — CALIFORNIA CORPORATION CODE SECTION
 
16  5047.5.
 
17            YOU JUST HEARD MR. BEUGELMANS SAY THAT A DOCUMENT
 
18  60 ALLEGEDLY SHOWS THE MALFEASANCE OF MR. AND MRS. FURR.
 
19  THIS RECOGNIZES THE PUBLIC POLICY IN SUPPORTING NONPROFIT
 
20  CORPORATIONS, AND WHERE THERE ARE DIRECTOR WHO ARE — WAS
 
21  SERVING WITHOUT PAY, PROVIDES SPECIAL EXEMPTIONS FOR THEM.
 
22            THE STATUTE READS, SUBDIVISION (A): “THE
 
23  LEGISLATURE FINDS AND DECLARES THAT THE SERVICES OF
 
24  DIRECTORS AND OFFICERS OF NONPROFIT CORPORATIONS SERVE
 
25  WITHOUT COMPENSATION ARE CRITICAL TO THE EFFICIENT CONDUCT
 
26  AND MANAGEMENT OF THE PUBLIC SERVICE AND CHARITABLE AFFAIRS
 
27  OF THE PEOPLE OF CALIFORNIA.  THE WILLINGNESS OF VOLUNTEERS
 
28  TO OFFER THIS SERVICE HAS BEEN DETERRED BY PERCEPTION THAT
			
			

page 620
 
 
 
 1  THEIR PERSONAL ASSETS ARE AT RISK FOR THESE ACTIVITIES.
 
 2            THE UNAVAILABLE AND UNAFFORDABILITY OF APPROPRIATE
 
 3  LIABILITY INSURANCE MAKES IT DIFFICULT FOR THESE
 
 4  CORPORATIONS TO PROTECT THE PERSONAL ASSETS OF THEIR
 
 5  VOLUNTEER DECISIONMAKERS WITH ADEQUATE ASSURANCE.  IT IS THE
 
 6  PUBLIC POLICY OF THIS STATE TO PROVIDE THE INCENTIVE AND
 
 7  PROTECTION TO THE INDIVIDUALS WHO PERFORM THESE IMPORTANT
 
 8  FUNCTIONS."
 
 9            I WON'T READ THE REST OF IT.
 
10            PART (B) THEN INDICATES: “THAT NO ACTION FOR
 
11  MONETARY DAMAGES CAN ARISE AGAINST THE PERSONS” WITH A
 
12  NUMBER OF EXCEPTIONS THEY LIST.  MALFEASANCE IS NOT ONE OF
 
13  THEM.  NEITHER IS NEGLIGENCE.  I BEG YOUR PARDON, SIR, MAY I
 
14  CONTINUE?
 
15       THE COURT:  YES.
 
16       MR. LANE:  I'M ARGUING.
 
17       THE COURT:  IS THERE SOMETHING I SHOULD HEAR RIGHT
 
18  AWAY?
 
19       MR. BEUGELMANS:  I HAVE THE LAW IN FRONT OF ME.
 
20  MR. LANE’s STATEMENT IS NOT TRUE.  THE EXCEPTION SAYS --
 
21       THE COURT:  LET HIM FINISH.  I WILL GIVE YOU A CHANCE
 
22  TO DO IT.
 
23       MR. LANE:  I HOPE.
 
24       THE COURT:  MR. LANE, YOU ARE REPRESENTING LIBERTY
 
25  LOBBY.  YOU ARE NOT REPRESENTING THE FURRS, ARE YOU?
 
26       MR. LANE:  NO.  I'M REPRESENTING LIBERTY LOBBY; BUT IF
 
27  THE FURRS DID NOTHING WRONG, LIBERTY LOBBY COULD, OF COURSE,
 
28  HAVE DONE NOTHING WRONG.  THAT’s THE POINT.  ANY COMPLAINT
			
			

page 621
 
 
 
 1  AGAINST LIBERTY LOBBY IS DERIVATIVE IN TERMS OF FINDING THAT
 
 2  THE FURRS ARE INVOLVED AND INVOLVED IN MISCONDUCT.
 
 3            THE SEVEN EXCEPTIONS ARE THERE.  I WON'T READ THEM
 
 4  TO THE COURT, BUT THE COURT CAN READ THEM, OF COURSE, AND IT
 
 5  INCLUDES — DOES NOT INCLUDE STANDARD NEGLIGENCE.  IT DOES
 
 6  INCLUDE FRAUD, OF COURSE.  THAT’s WHY THIS COMPLAINT WAS
 
 7  BROUGHT, NOT TAILORED TO THE FACTS IN THIS CASE BUT FAILURE
 
 8  TO TAILOR TO A DISTORTION IN ORDER FOR THIS UNVERIFIED
 
 9  COMPLAINT SUBMITTED BY THE TWO ATTORNEYS TO CHARGE FRAUD.
 
10            THE FACTS ARE CLEAR HERE, I BELIEVE, YOUR HONOR,
 
11  THAT THE HIGH THRESHOLD WHICH THE PLAINTIFFS MUST REACH
 
12  FIRST TO OVERCOME SECTION 5047.5; AND SECOND, TO OVERCOME
 
13  THE STANDARDS FOR FRAUD, WHICH THEY ALLEGE THE STANDARDS ARE
 
14  VERY, VERY HIGH.
 
15            WHAT WE HAVE HERE AND WHAT THE EVIDENCE SHOWS IS
 
16  THAT THE FURRS FOR DECADES, DECADES RAN THIS ORGANIZATION.
 
17  IT WAS A SMALL — THIS IS NOW IN THE DEPOSITIONS LODGED WITH
 
18  THE COURT BY MR. AND MRS. FURR.  IT WAS A SMALL, TINY LITTLE
 
19  CORPORATION.  WHAT IT DID WAS DEAL WITH A SMALL SEGMENT OF
 
20  AMERICAN — WORLD HISTORY, A REVISIONIST VIEWPOINT OF
 
21  HISTORY.
 
22            IT WAS ASSOCIATED WITH THE AMERICAN MERCURY
 
23  MAGAZINE.  THERE CAME A TIME WHEN IT WAS TOTALLY BANKRUPT.
 
24  IT WAS GOING OUT OF BUSINESS, AND THAT ORGANIZATION THEN
 
25  CAME TO MR. CARTO AND SAID: “CAN YOU SAVE US? IF YOU DO,
 
26  WE'RE YOURS.”  AND IT COST THEM A SUBSTANTIAL AMOUNT OF
 
27  MONEY, AND HE SAVED THEM, AND THEN THAT WAS THE
 
28  CORPORATION.
			
			

page 622
 
 
 
 1            FOR ALL OF THOSE YEARS MR. CARTO RAISED THE MONEY,
 
 2  HIRED THE EMPLOYEES.  HE HAD A PROBLEM.  HE HAD A PROBLEM IN
 
 3  THAT HE WAS ALSO THE TREASURER OF LIBERTY LOBBY, WHICH TOOK
 
 4  BROAD POSITIONS, OPPOSITION TO THE WAR IN VIETNAM AND FOR
 
 5  CAMPAIGN FINANCE LOBBY WITH MEMBERS OF CONGRESS, AND HE DID
 
 6  NOT WANT IT TO BE THOUGHT BY MEMBERS OF THE CONGRESS THAT HE
 
 7  REALLY WAS ALSO VERY MUCH INVOLVED.
 
 8       THE COURT:  I DON'T HAVE THESE FACTS IN FRONT OF ME.
 
 9  WE STAYED AWAY FROM THIS WHOLE ISSUE.  WE CAN GET INTO IT IF
 
10  THE PARTIES WANT TO.  THOSE ARE NOT FACTS THAT ARE IN FRONT
 
11  OF ME TO WHAT MR. CARTO BELIEVES AS FAR AS THE VIETNAM WAR
 
12  AND CAMPAIGN FINANCING AND THE HOLOCAUST AND WHETHER THEY
 
13  READ DAVID IRVING OR DON'T.  THAT’s NOT IN FRONT OF ME.
 
14       MR. LANE:  NO, BUT I UNDERSTAND BEFORE I ARRIVED THIS
 
15  CASE STARTED.  I WAS TOLD IT WOULD START ON MONDAY, AND THEN
 
16  I WAS TOLD IT STARTED ALREADY.  I UNDERSTAND THIS QUESTION
 
17  WAS RAISED BY THE PLAINTIFF IN QUESTIONING MR. CARTO.
 
18            IN ANY EVENT, YOUR HONOR, MR. CARTO IN ESSENCE RAN
 
19  THE ORGANIZATION.  THAT’s QUITE CLEAR THROUGH HIS CONTACTS
 
20  WITH THE BOARD MEMBERS.  THERE ONLY WERE TWO BOARD MEMBERS
 
21  WHO WERE CONSISTENTLY WITH THIS ACTIVITY FOR DECADE AFTER
 
22  DECADE AFTER DECADE, AND THAT’s THE FURRS, AND NOBODY EVER
 
23  COMPLAINED ABOUT ANYTHING THEY DID.  THERE WAS NO MONEY.
 
24  NOBODY WAS REALLY COMPLAINING ABOUT ANYTHING ELSE.
 
25            MR. CARTO HIRED THE PEOPLE, GOT APPROVAL FROM THE
 
26  FURRS, PLAYED A MAJOR PART, BUT IT WAS THE FURRS AS THE
 
27  BOARD WHO MADE THE DECISIONS.
 
28            THEN THE TIME CAME WHEN IT APPEARED THAT THERE WAS
			
			

page 623
 
 
 
 1  A POSSIBILITY OF RECOVERING SOME ASSETS FOLLOWING THE DEATH
 
 2  OF MRS. JEAN FARREL.  WE HEARD ABOUT THE ESTATE.  THIS HAS
 
 3  NOTHING TO DO WITH THE ESTATE.  WE HEARD MR. WEBER SAY THERE
 
 4  WERE TWO WILLS.  NO ONE EVER SAID THAT BEFORE HE SAID THAT.
 
 5            WHAT THERE WAS WAS A WILL WHICH LEFT ALL OF THE
 
 6  PROCEEDS TO JOAN ALTHAUS; AND IF SHE DIED, TO THE LEGION.
 
 7  SHE DIDN'T DIE, SO THERE WAS NO ASSETS AT ALL FOR THE
 
 8  LEGION.
 
 9            BUT PRIOR TO THAT TIME BECAUSE OF THE CLOSE
 
10  RELATIONSHIP BETWEEN WILLIS CARTO AND HIS WIFE AND JEAN
 
11  FARREL, AN ARRANGEMENT WAS MADE FOR SOME BEARER CERTIFICATES
 
12  TO GO TO WILLIS CARTO.  THAT’s WHAT THE CASE IS ABOUT.  AND
 
13  IT WAS CLEAR THAT THERE WAS GOING TO BE A PROTRACTED LEGAL
 
14  BATTLE, A VERY RISKY LEGAL BATTLE.
 
15            NOW NO ONE KNEW BETTER THAN WILLIS CARTO AND THE
 
16  FURRS THAT THE I.H.R. COULD NOT HAVE CONDUCTED THAT BATTLE.
 
17  IN TERMS OF MR. Carto’s TESTIMONY ALREADY AND THE DOCUMENTS
 
18  OFFERED BY MR. BEUGELMANS, WE'RE TALKING ABOUT SOMETHING IN
 
19  THE NATURE OF $750,000 TO PROSECUTE A RISKY CLAIM.
 
20       THE COURT:  THOSE FACTS ARE NOT IN FRONT OF ME EITHER.
 
21       MR. LANE:  I THINK THEY ARE.
 
22       THE COURT:  I THINK THERE’s 3-, 400,000 AND SOME MONEY
 
23  TO MR. FISCHER, WHICH WAS PAID.  THAT MIGHT BE 2- OR
 
24  $300,000.
 
25       MR. LANE:  THAT’s UP TO ABOUT 6.
 
26       THE COURT:  WE'RE UP TO ABOUT 6.  WHAT IS IT ALL FOR?
 
27  WHERE IS THE PROOF OF IT?  WE'RE NOT UP TO 750, AS FAR AS I
 
28  KNOW.
			
			

page 624
 
 
 
 1       MR. LANE:  WELL --
 
 2       THE COURT:  THAT’s ONE OF THE PROBLEMS, ISN'T IT?
 
 3       MR. LANE:  HE TESTIFIED HE PUT IN THOUSANDS OF DOLLARS
 
 4  OF THEM.
 
 5       THE COURT:  EVERETT DIRKSON SAID A MILLION THERE AND A
 
 6  MILLION THERE IT ADDS UP TO GOOD MONEY.
 
 7       MR. LANE:  I THINK HE SAID A BILLION, WHATEVER.
 
 8  $600,000, WHATEVER IT WAS.
 
 9            THIS IS A LITTLE ORGANIZATION WHICH HAD NO ASSETS
 
10  AND COULD NOT HAVE CARRIED OUT THE CASE.  IF ANYONE THINKS
 
11  THE SWISS LAWYERS WILL WORK ON A CONTINGENCY, THEY DON'T
 
12  KNOW HOW THE NATIONAL LAWYERS OPERATE.
 
13       THE COURT:  I HAVE NO EVIDENCE THAT ANYONE TRIED TO
 
14  HIRE LAWYERS AND COULDN'T OR HOW SWISS LAWYERS WORK.  I HAVE
 
15  NO EVIDENCE. THAT’s INTERESTING.
 
16       MR. LANE:  IN ANY EVENT, YOUR HONOR, WHAT WAS CLEAR IS
 
17  THERE WAS NO CORPORATE OPPORTUNITY AT THAT POINT TO THE
 
18  I.H.R.  THERE WAS NO CORPORATE OPPORTUNITY BECAUSE THEY
 
19  COULD NOT HAVE PROSECUTED THIS MATTER.  IF THE FURRS HAD
 
20  BORROWED $350,000 AND PLEDGED THE ASSETS OF THE LEGION AND
 
21  CANNOT RECOVER ANYTHING, I'M SURE THAT WE COULD HAVE
 
22  LAWSUITS BY MR. WEBER AND THEN HIS ASSOCIATES FOR
 
23  MALFEASANCE OR GROSS NEGLIGENCE IN GETTING INVOLVED IN THE
 
24  RECKLESS THING.
 
25            THE ONLY THINGS THE FURRS COULD HAVE DONE TO GET
 
26  OFF THE HOOK APPARENTLY IS TAKE NO ACTION, WRITE A LETTER TO
 
27  THE LAWYER AND SAY, CAN WE GET MONEY?  THERE’s NO MONEY, AND
 
28  THAT WOULD BE FINE.  BUT WHAT THEY DID DO IS THAT WILLIS
			
			

page 625
 
 
 
 1  CARTO WROTE A LETTER TO THE FURRS — THESE ARE THE OFFICERS
 
 2  OF THE CORPORATION — SAYING: “I WILL PUT UP THE MONEY.
 
 3  I'LL SPEND ALL THE TIME.  I'LL SPEND THE TIME.  I'LL PUT UP
 
 4  THE MONEY.  AND WHAT I WILL DO THEN IS IF THERE IS A
 
 5  RECOVERY, I WILL USE IT FOR THE GENERAL PURPOSES THAT JEAN
 
 6  FARREL TALKED ABOUT.”  AND THE FURRS AGREED TO THAT.
 
 7            THERE WAS ALSO A — THERE WAS A RESPONSE, AN
 
 8  ACTION BY THE BOARD.  THE FURRS AGREED TO THAT AND NAMED
 
 9  MR. CARTO AN AGENT TO GO OUT AND DO HIS WORK.  HE DID IT.
 
10  IT WAS YEAR AFTER YEAR, HUNDREDS OF THOUSANDS OF DOLLARS
 
11  LATER, AND THE LEGION WAS SITTING THERE WATCHING — THE
 
12  LEGITIMATE BOARD SITTING THERE WATCHING, TAKING NO ACTION.
 
13            AND THEN MR. CARTO WAS SOMEWHAT SUCCESSFUL, AND
 
14  THAT INFORMATION REACHED THE SCOPE THEY STAGED A COUP D'ETAT
 
15  AND DEMANDED THEIR MONEY.
 
16            I THINK THIS IS CRUCIAL.  THE LEGION ITSELF, THE
 
17  PRESENT FOLKS WHO CALL THEMSELVES THE LEGION, RECOGNIZED THE
 
18  VALIDITY OF THE AGREEMENT.  THEY CONFIRMED THAT MR. WEBER,
 
19  WHO IS THE CORPORATE REPRESENTATIVE, TESTIFIED IN
 
20  SEPTEMBER — I THINK SEPTEMBER 16, 1993, HE TESTIFIED --
 
21  1994 AFTER THE LAWSUIT WAS FILED, AND HE KNEW ABOUT VIBET
 
22  AND EVERYTHING THAT WAS RELEVANT.
 
23            HE TESTIFIED ONE, WE DO NOT CHALLENGE THE
 
24  AGREEMENT MAKING WILLIS CARTO THE AGENT.  WE DO NOT
 
25  CHALLENGE THE WORK HE DID IN RECOVERING THE SUM.  WE DO NOT
 
26  CHALLENGE HIS RIGHT TO PAY EVERYONE FOR THE WORK THEY DID.
 
27  AND WE ARE NOT IN ESSENCE CHALLENGING HIS DISTRIBUTION OF
 
28  THE FUNDS UNTIL SEPTEMBER 1993.  THAT’s WHAT MR. WEBER
			
			

page 626
 
 
 
 1  TESTIFIED TO.  WE'RE NOT CHALLENGING NECESSARILY THE
 
 2  DISTRIBUTION.  WE WANT WHAT IS LEFT.  WE WANT THE MONEY NOW
 
 3  IS BASICALLY WHAT HE WAS SAYING.  WE'RE NOT CHALLENGING
 
 4  THIS.
 
 5            AND THEN WE HAVE MR. WEBER NOW IN COMMAND OF ALL
 
 6  OF THE RELEVANT INFORMATION, WRITING A LETTER TO ANDREW
 
 7  GRAY, WHICH IS IN EVIDENCE, CONFIRMING EVERYTHING THAT WE
 
 8  KNOW THAT THE BOARD HAS DONE — THAT THE FURRS HAVE DONE AND
 
 9  MR. CARTO HAS DONE.
 
10            AND WHAT DOES THAT LETTER SAY?  MR. GRAY IS — WE
 
11  WILL FIND OUT WHO MR. GRAY IS, AN INTELLECTUAL OF GREAT
 
12  KNOWLEDGE.  AND MR. WEBER IS WRITING TO HIM EXPLAINING THE
 
13  SITUATION.  THIS IS CLEARLY AN ADMISSION, A STATEMENT BY THE
 
14  CORPORATE OFFICER AND THE CORPORATE REPRESENTATIVE HERE.
 
15            HE SAYS WILLIS HAD THE RIGHT TO GET THE MONEY, BUT
 
16  HE SHOULDN'T KEEP IT HIMSELF.  THAT’s THE PROBLEM.  IT'S
 
17  IMMORAL FOR HIM TO KEEP THE MONEY.  IF HE GAVE IT TO THESE
 
18  GROUPS THAT JEAN FARREL SAID SHE WANTED TO GO TO, NOT GROUPS
 
19  BUT CONCEPTS, WE HAVE NO QUARREL WITH THAT.  THAT’s BECAUSE
 
20  THE CORPORATE — THOSE INVOLVED IN THE CORPORATION EVEN NOW
 
21  AFTER THIS LAWSUIT WAS FILED RECOGNIZED THE FACT THAT THERE
 
22  WAS A LEGITIMATE AGREEMENT BETWEEN THE LEGION AND MR. CARTO.
 
23  SECURE IT AND UTILIZE IT.
 
24            AND WE HAVE THE BOARD MEETING OF MARCH 5TH, WHICH
 
25  GOES ON.  NOW WE CAN — THEY SAID THE ATTORNEY GENERAL HAD
 
26  TO BE INFORMED.  THAT WAS NOT A MEETING DISPOSING OF
 
27  ASSETS.  THE ATTORNEY GENERAL DID NOT HAVE TO BE INFORMED.
 
28  IT WASN'T DISPOSING OF ASSETS.  IT MERELY RATIFIED THE
			
			

page 627
 
 
 
 1  PREVIOUS AGREEMENT.  THAT PREVIOUS AGREEMENT WAS MR. CARTO
 
 2  CAN DO THIS.
 
 3            NOW WE GET TO THE — SPECIFICALLY THAT’s THE
 
 4  BACKGROUND.  I DON'T SEE WHERE ONE CAN SHOW FRAUD BY THE
 
 5  FURRS.  MAYBE ONE COULD SAY IN RETROSPECT MAYBE THAT WASN'T
 
 6  THE BEST EXERCISE OF JUDGMENT ON THEIR PART.  I DON'T THINK
 
 7  THAT’s TRUE.  BUT IF ONE DID COME TO THAT CONCLUSION, 5047.5
 
 8  PROTECTS THE FURRS FROM EXERCISING BAD JUDGMENT, EVEN FROM
 
 9  ORDINARY NEGLIGENCE, AND THAT’s CLEARLY THE MOST ONE CAN SAY
 
10  ABOUT THEM IN THAT SITUATION.
 
11            NOW WE GET TO LIBERTY LOBBY.  LIBERTY LOBBY IS
 
12  INVOLVED IN A CONSPIRACY ACCORDING TO THE COMPLAINT BECAUSE
 
13  THEY TAILOR THEIR COMPLAINT NOT TO THE FACTS IN THE CASE BUT
 
14  TO THE NEEDS AS ESTABLISHED BY THE LAW.  IF THEY ARE GOING
 
15  TO HAVE A CASE AT ALL, IF THERE’s A FRAUD HERE, IT’s THE
 
16  COMPLAINT.
 
17            AND MORE THAN THAT, IN MY VIEW IT’s VERY CLOSE TO
 
18  ATTEMPTED EXTORTION, THIS COMPLAINT, KNOWING THAT THEIR OWN
 
19  CLIENTS ARE SAYING IT’s OKAY AFTER THE CASE IS FILED EVEN.
 
20  THEY'RE STILL SAYING IT’s OKAY BECAUSE THEY KNOW THE RECORD,
 
21  AND THEY KNOW IT’s ALL RIGHT.
 
22            GET TO LIBERTY LOBBY.  THIS IS THE GREAT
 
23  CONSPIRACY OF LIBERTY LOBBY.  LIBERTY LOBBY CONSPIRED TO
 
24  TAKE, ACCORDING TO THAT COMPLAINT, TO TAKE APPROXIMATELY
 
25  $350,000 AND TO UTILIZE IT TO PAY LAWYERS IN SWITZERLAND AND
 
26  AROUND THE — AROUND THE WORLD AND IN EXCHANGE GOT SOME
 
27  LOANS, WHICH AREN'T DUE YET.  NO MONEY IS OWED AT THE MOMENT
 
28  BECAUSE NONE OF THOSE NOTES ARE DUE YET.
			
			

page 628
 
 
 
 1            HOW DO WE KNOW THAT MR. BEUGELMANS PUT THE
 
 2  DOCUMENTS IN?  NONE OF THOSE NOTES ARE DUE YET.  THAT WAS
 
 3  THE GREAT FRAUD, THE GREAT CONVERSION, THE GREAT CONSPIRACY
 
 4  OF LIBERTY LOBBY.  IF ANYBODY ELSE WANTS A DEAL, THERE'S
 
 5  PROBABLY SOME LAND DOWN IN FLORIDA, MAY BE UNDERWATER, BUT
 
 6  MAYBE SOMEONE WOULD BE INTERESTED IN THAT.  IN OTHER WORDS,
 
 7  IF LIBERTY LOBBY CONSCIENTIOUSLY DID THIS, AND THAT’s THE
 
 8  NEXT QUESTION WE GET TO WAS THE DEAL THEY MADE.  WE'LL PUT
 
 9  UP $350,000 IN A RISKY VENTURE; AND AFTER WE DO THAT, WE
 
10  WOULD LIKE SOME LOANS WHICH WE'LL PAY BACK.  NOT A GOOD
 
11  DEAL, I THINK.
 
12            THERE WILL BE EVIDENCE ABOUT THAT BECAUSE I KNOW
 
13  IT’s NOT IN THE RECORD.  THE COURT WILL HEAR IT; BUT WHILE
 
14  I'M ON THE POINT, I UNDERSTAND IT’s NOT IN THE RECORD, BUT
 
15  IT WILL BE.  THEY DIDN'T KEEP ONE PENNY.  THEY LOST MONEY IN
 
16  THE GREAT CONSPIRACY.
 
17       THE COURT:  WHAT YOU ARE TELLING ME IS A COMBINATION OF
 
18  A MOTION FOR A NONSUIT AND FOR AN OPENING STATEMENT.
 
19       MR. BEUGELMANS:  AND CLOSING STATEMENT.
 
20       THE COURT:  SO I WON'T HAVE TO HEAR AN OPENING
 
21  STATEMENT, IF I DENY THE MOTION FOR THE NONSUIT.
 
22       MR. LANE:  THERE WON'T BE ONE.  THIS IS FINE.
 
23            LET’s STICK TO WHAT IS JUST IN THE RECORD NOW.
 
24  LIBERTY LOBBY ALLEGEDLY PUT UP APPROXIMATELY $350,000.
 
25  THAT’s A DOCUMENT MR. BEUGELMANS BROUGHT IN EXCHANGE GOT
 
26  SOME LOANS WHICH AREN'T QUITE DUE YET.
 
27            WHO WITH LIBERTY LOBBY WAS INVOLVED IN THE
 
28  CONSPIRACY?  SURELY IT COULD NOT HAVE BEEN MR. CARTO.  HE
			
			

page 629
 
 
 
 1  WAS OUTSIDE OF LIBERTY LOBBY.  HE HAS A RELATIONSHIP WITH
 
 2  LIBERTY LOBBY, OF COURSE, BUT A CONSPIRACY REQUIRED AT LEAST
 
 3  TWO.  SOMETIMES MORE THAN TWO ARE INVOLVED, BUT AT LEAST TWO
 
 4  WHO CONSPIRED ON BEHALF OF LIBERTY LOBBY WITH MR. CARTO.  IF
 
 5  MR. CARTO DID ANYTHING WRONG, LIBERTY LOBBY IS A
 
 6  CORPORATION, HAS A BOARD OF DIRECTORS.  THEY VOTE ON THE
 
 7  QUESTIONS.  HAVE WE HEARD ANY EVIDENCE ABOUT THAT?  ANYTHING
 
 8  THAT LIBERTY LOBBY DID?  LET’s SAY AT WORST THAT MR. CARTO
 
 9  UTILIZED LIBERTY LOBBY TO PUT MONEY INTO THIS, TOOK MONEY
 
10  OUT OF LIBERTY LOBBY TO PAY FOR THIS AND UTILIZED IT TO PUT
 
11  MONEY IN.  HOW IS LIBERTY LOBBY INVOLVED IN FRAUD CONSPIRACY
 
12  CONVERSION?  THE ANSWER IS, THEY'RE NOT.
 
13            IT IS CLEAR WHY LIBERTY LOBBY IS A DEFENDANT
 
14  HERE.  THERE’s NOTHING TO DO WITH THE LAW AND LESS TO DO
 
15  WITH THE FACTS.  LIBERTY LOBBY IS A DEFENDANT BECAUSE THE
 
16  PLAINTIFFS AS THEIR COUNSEL THINK THERE MAY BE SOME MONEY
 
17  THERE.  THEY'RE NOT SURE THEY CAN GET IT FROM ANYBODY ELSE
 
18  SO LIBERTY LOBBY IS BROUGHT INTO THE CASE.
 
19            WHERE IS THE EVIDENCE AGAINST LIBERTY LOBBY?  WHO
 
20  HAS BEEN CALLED FROM LIBERTY LOBBY’s BOARD TO TALK ABOUT
 
21  THIS?  WHERE IS THE CONTROLLER FOR LIBERTY LOBBY?  WHERE IS
 
22  ALL THE EVIDENCE AGAINST LIBERTY LOBBY?  WHERE IS ANY
 
23  EVIDENCE AT THE PRESENT TIME IN THIS CASE ABOUT LIBERTY
 
24  LOBBY OTHER THAN THE STATEMENT THAT LIBERTY LOBBY GAVE A LOT
 
25  OF MONEY TO A RISKY VENTURE AND ENDED UP IN EXCHANGE GETTING
 
26  THE RIGHT TO MAKE A LOAN, WHICH BECOMES DUE IN A FEW MONTHS
 
27  THE FIRST ONE AND ON AND ON ONE PER MONTH?  THAT IS NOT THE
 
28  RESULT OF FRAUD.  THAT IS NOT CONSPIRACY.  THERE IS NO
			
			

page 630
 
 
 
 1  EVIDENCE WHATSOEVER SHOWING THAT LIBERTY LOBBY DID ANYTHING
 
 2  WRONG.
 
 3       THE COURT:  DO YOU WANT TO RESPOND AS TO MR. LANE'S
 
 4  ARGUMENT OR NOT?
 
 5       MR. MUSSELMAN:  YES, BRIEFLY.  FIRST OF ALL, THE
 
 6  CORPORATIONS CODE SECTION HAS AN EXCEPTION FOR INTENTIONAL,
 
 7  WANTON OR RECKLESS ACTS, GROSS NEGLIGENCE OR AN ACTION BASED
 
 8  ON FRAUD, OPPRESSION OR MALICE, ALL OF WHICH ANY COMBINATION
 
 9  OF THAT HAS BEEN DEMONSTRATED SINCE ALL INFERENCES MUST BE
 
10  DRAWN IN PLAINTIFF’s FAVOR ON THIS MOTION.
 
11            THE FURRS ENGAGED IN INTENTIONAL ACTS, WANTON
 
12  ACTS, RECKLESS ACTS, GROSS NEGLIGENCE.  THERE IS — THAT
 
13  STATUTE IS INAPPLICABLE.
 
14            SECONDLY, THE LIABILITY OF LIBERTY LOBBY IS NOT
 
15  SOLELY DERIVATIVE.  IT’s BASED ON ITS OWN CONDUCT.
 
16  MR. CARTO TESTIFIED HE HAS BEEN FOR DECADES TREASURER,
 
17  C.E.O., AND SITS ON THE BOARD OF DIRECTORS; AND ALSO THAT IN
 
18  NORTH CAROLINA HE SWORE UNDER OATH PRIOR TO HER DEATH JEAN
 
19  FARREL GIFTED HER ASSETS IN THE FORM OF ASSETS TRANSFERRED
 
20  TO NECA AND SHARES OWNED BY THE LEGION PRIOR TO HER DEATH.
 
21  SO THAT’s HIS OWN TESTIMONY.  HIS KNOWLEDGE IS IMPUTABLE TO
 
22  LIBERTY LOBBY, THE ENTITY HE CONTROLS IN THREE DIFFERENT
 
23  MANNERS.  THERE’s PLENTY OF EVIDENCE AS TO LIBERTY LOBBY.
 
24            THE EVIDENCE ALSO SHOWS HE RECEIVED MILLIONS OF
 
25  DOLLARS FROM THE SETTLEMENT TRANSFERRED BY LOANS FROM VIBET,
 
26  WHICH MR. CARTO TESTIFIED HE DOESN'T KNOW WHO THE DIRECTORS
 
27  ARE, AND HE DOESN'T SEEM TO HAVE MUCH OF ANY KNOWLEDGE ABOUT
 
28  VIBET.
			
			

page 631
 
 
 
 1            HE ARRANGED TO BORROW SEVERAL MILLIONS DOLLARS
 
 2  FROM LIBERTY LOBBY AND ADMITTED THE MONEY CAME FROM THE
 
 3  SETTLEMENT.  THERE IS MORE THAN ENOUGH EVIDENCE CONCERNING
 
 4  LIBERTY LOBBY.
 
 5            AS FAR AS SOME OF THE FACTUAL STATEMENTS IN THE
 
 6  MOTION, OR ORALLY, I DON'T BELIEVE THAT THE RECORD SUPPORTS
 
 7  THEM.  I WON'T GO THROUGH THEM.  YOU KNOW THE RECORD AS WELL
 
 8  AS MYSELF.
 
 9            RATHER THAN ADDRESS PARTICULAR LEGAL ISSUES, I
 
10  THINK THAT THEY'RE ADEQUATELY ADDRESSED IN OUR MEMORANDUM OF
 
11  LAW, PRETRIAL OF ISSUES, AND ALSO IN THE REID VERSUS
 
12  ROBINSON CASE, 64 CAL. APP. 46, 1923 CASE DEALING WITH THE
 
13  STATUTE OF LIMITATIONS WHEN THE PERSON IS IN CONTROL
 
14  PREVENTING THE CORPORATION FROM ACTING.  AND LIKEWISE THE
 
15  SAN LEANDRO CANNING VERSUS PERILLO, 211 CAL. 482, 1931
 
16  CASE.  THAT SAYS SOMETHING SIMILAR.
 
17       THE COURT:  MR. WAIER.
 
18       MR. WAIER:  I'M NOT GOING TO ADD.  I'M NOT GOING TO
 
19  REGURGITATE WHAT I PUT IN THE PAPERWORK.  WE DID ADD SOME
 
20  MATTERS TO OUR PAPERWORK.  IT IS NOT THE SAME.  WE ADD THE
 
21  VARIOUS CONCEPT.
 
22            BUT ONE THING WAS NOT IN OUR PAPERWORK, YOUR
 
23  HONOR.  I THINK IT’s IMPORTANT TO BRING THIS UP AT THIS
 
24  TIME.  IF YOU WILL INDULGE ME FOR ABOUT 10, 15 MINUTES
 
25  MAXIMUM, I CAN SHOW YOU LEGAL ISSUES WHY THIS MATTER IS
 
26  EITHER BARRED OR SHOULD NOT GO FORWARD.  THIS HAS BEEN
 
27  ESTABLISHED BY THE EVIDENCE IN CONJUNCTION WITH LEGAL ISSUES
 
28  THAT WERE NOT ADDRESSED.  IF I MAY SET THIS UP, BRIEFLY.
			
			

page 632
 
 
 
 1       THE COURT:  SURE.
 
 2       MR. WAIER:  MY WIFE TOLD ME I'M NOT MECHANICAL.  SHE'S
 
 3  RIGHT.  THIS WILL BE BASED ON THE UNREFUTED EVIDENCE.
 
 4            WHAT WE HAVE BEFORE YOU, ONE OF THE QUESTIONS THAT
 
 5  MUST BE ASKED AND ANSWERED DEALING WITH THE CONCEPT OF
 
 6  CORPORATE OPPORTUNITY, AND THAT IS A SIGNIFICANT ISSUE HERE.
 
 7       THE COURT:  I KNOW IT IS.
 
 8       MR. WAIER:  WHAT IS THE LINE OF BUSINESS OF THE
 
 9  LEGION?  THAT’s A CONCEPT THAT WE HAVEN'T DISCUSSED, BUT IT
 
10  IS OF CRITICAL FACTOR WHICH RELATIONSHIP TO THE CORPORATE
 
11  OPPORTUNITY DOCTRINE.
 
12            NOW I'LL SHOW YOU HOW THAT TIES IN.  THE LEGION'S
 
13  BUSINESS IS A NONPROFIT PUBLIC BENEFIT CORPORATION
 
14  DISSEMINATING WRITTEN MATERIALS AND OTHER TYPE OF MEDIA TO
 
15  THE PUBLIC FROM REVISIONISM, FIRST AMENDMENT — YOU HEARD
 
16  ALL OF THIS.  THAT IS THE LINE OF BUSINESS.
 
17            TO BE A CORPORATE OPPORTUNITY THE OPPORTUNITY MUST
 
18  BE IN AND MUST BE IN FURTHERANCE OF THAT LINE OF BUSINESS.
 
19  THAT’s IN WITKIN.  THAT HAPPENS TO BE IN WITKIN 3, WITKIN
 
20  AT — ACTUALLY, I GET TO THE ACTUAL TITLE OF IT.  THERE’s A
 
21  NUMBER OF CASES.  IT’s SECTION 100 UNDER THE CORPORATIONS
 
22  SECTION OF WITKINS UNDER THE DOCTRINE OF CORPORATE
 
23  OPPORTUNITIES.  THAT HASN'T BEEN DISCUSSED.
 
24            LET’s TAKE A LOOK AT WHAT OCCURRED IN 1985.  THE
 
25  EVIDENCE IS CLEAR ONE, THERE WAS A DEATH.  THAT WAS
 
26  MISS JEAN FARREL-EDISON.
 
27            TWO, UNREFUTED, THERE WAS A WILL, WHICH REVOKED
 
28  ALL PRIOR TESTAMENTS, ALL PRIOR DISPOSITIONS OF HER ASSET
			
			

page 633
 
 
 
 1  AND GAVE IT ALL TO JOAN ALTHAUS.  THAT WAS THE OUTCOME.
 
 2            WHAT WAS THE OPPORTUNITY THAT THE LEGION HAD IN
 
 3  1985 IN ITS LINE OF BUSINESS?
 
 4       THE COURT:  SIR, YOU ARE NOT GOING TO TRY TO CONVINCE
 
 5  ME THAT BECAUSE THEIR LINE OF BUSINESS IS, AS YOU STATED,
 
 6  THAT IF THEY GOT 7.5 MILLION DOLLARS THAT WOULDN'T CARRY OUT
 
 7  THAT LINE OF BUSINESS?
 
 8       MR. WAIER:  LET’s TALK ABOUT THAT.  LET’s TALK ABOUT
 
 9  THAT.  WHAT WAS THE ASSET, AND I THINK THIS IS WHERE
 
10  EVERYBODY IS GETTING CONFUSED.  WHAT WAS THE ASSET WHEN SHE
 
11  DIED?  WHAT WAS THE LEGION ASSET?  COUNSEL NEVER DEFINED
 
12  WHAT THAT ASSET WAS AT THE DAY SHE DIED.  THAT WILL PROVIDED
 
13  NO ASSET TO THE LEGION.
 
14       THE COURT:  I KNOW THAT.
 
15       MR. WAIER:  THERE WAS NO ASSET SITTING THERE.  THE
 
16  LEGION HAD NOTHING.  IT HAD NO STOCK IN NECA, AND IN FACT,
 
17  THE EVIDENCE SHOWS BASED ON IN THE EXHIBITS THAT NECA WAS
 
18  OWNED BY JEAN FARREL-EDISON.  THERE WAS NOTHING IN WRITING
 
19  WITH RESPECT TO NECA.
 
20            WHAT WAS THE ASSET?  THERE WAS NO ASSET AT THAT
 
21  TIME FOR ANYBODY.
 
22       THE COURT:  LET’s GET TO IT.  YOU KNOW --
 
23       MR. WAIER:  THE INTEREST IS THE ONLY OPPORTUNITY WAS TO
 
24  GO OVERSEAS AND WAGE A LITIGATION TO ACQUIRE WHATEVER PEOPLE
 
25  BELIEVED WAS THEREIN, WHETHER MR. CARTO OR THE LEGION.
 
26  FUNDING, PROFFERING, PROSECUTING LITIGATION WAS NOT IN THE
 
27  LINE OF BUSINESS OF THE LEGION.  AND IN FACT, TO SUPPLEMENT
 
28  WHAT MR. LANE SAID, WHICH IS UNREFUTED BY MR. MARCELLUS, THE
			
			

page 634
 
 
 
 1  LEGION COULDN'T EVEN GET A LOAN IN 1985 TO FUND — OR '86 OR
 
 2  '87 OR '88 OR '89.  THAT’s UNREFUTED.
 
 3            WHY ALL OF THE ASSETS WERE ENCUMBERED BY HIS OWN
 
 4  TESTIMONY?  THERE WERE NO ASSETS AVAILABLE TO GET A LOAN,
 
 5  EVEN IF THAT WOULD BE A PRUDENT WAY TO GO, WHICH IT WASN'T.
 
 6  THERE WAS NO OPPORTUNITY.  NOTHING OF A CORPORATE
 
 7  OPPORTUNITY.  THERE MAY HAVE BEEN OPPORTUNITY TO GO
 
 8  OVERSEAS.  IT CERTAINLY ISN'T DEFINED.
 
 9            I WOULD URGE THE COURT TO READ THE CORPORATE
 
10  OPPORTUNITIES DOCTRINE.  YOU GOT TO DEFINE THE OPPORTUNITY.
 
11  NOW IT ISN'T IN THE LINE OF BUSINESS, AND THAT IS A CRITICAL
 
12  DISTINCTION; BUT MORE IMPORTANTLY, THEY HAD NO OPPORTUNITY.
 
13  IN ANY EVENT, IT’s NOT AN OPPORTUNITY UNLESS YOU CAN AVAIL
 
14  IT.  THAT’s WHAT THEY HAVE TALKED ABOUT.  I KNOW.  I ARGUED
 
15  IT, AND I KNOW YOU HAVE SEEN IT AT LEAST FROM THE POINT.
 
16            LET’s LOOK AT THE EVIDENCE.  THERE IS NO EVIDENCE
 
17  THEY HAD ANYTHING TO GO AFTER.  THERE’s NO EVIDENCE BEFORE
 
18  IT.  AND MORE IMPORTANTLY, GETTING BACK TO THIS AND ALSO
 
19  KIND OF HIGHLIGHTING WHAT MR. LANE SAID, THE FURRS MADE A
 
20  DECISION TO ENTER INTO AN AGREEMENT TO GO AFTER THAT.  THAT
 
21  WE DO KNOW.  THE FURRS MADE AN AGREEMENT.
 
22            WE ALSO UNDERSTAND BY EVERYBODY’s ACCOUNT
 
23  MR. TAYLOR AND MR. KERR, RED HERRINGS IN THE ISSUE.  THE
 
24  FURRS MADE THE DECISION FOR THE CORPORATION.  THEY HAD MADE
 
25  ALL THE DECISIONS AT THAT POINT IN TIME.
 
26            THEY MADE AN AGREEMENT.  CARTO GO AFTER IT.
 
27  WHATEVER WE HAVE, FINE.  YOU DO WHAT YOU NEED TO PROMOTE THE
 
28  CAUSE.
			
			

page 635
 
 
 
 1            THE COURT MAY NOT UNDER THE LAW — AND WE PROVIDED
 
 2  YOU THAT LAW — SUBSTITUTE ITS JUDGMENT.
 
 3       THE COURT:  YOU DON'T HAVE TO YELL.  I CAN HEAR YOU.
 
 4       MR. WAIER:  SUBSTITUTE ITS JUDGMENT, YOUR HONOR, FOR
 
 5  THAT OF THE CORPORATION.  AND THERE’s BEEN NO EVIDENCE, NONE
 
 6  OF THE WHETHER THE FURRS WERE IMPRUDENT.  NONE.  I DON'T SEE
 
 7  ANY EVIDENCE THAT THEY WERE IMPRUDENT IN THE DECISIONS THEY
 
 8  MADE.  NONE.  AND THAT’s THE WHOLE ISSUE UNTIL THEY PUT UP
 
 9  EVIDENCE IN THEIR CASE IN CHIEF THAT THEY WERE SOMEHOW
 
10  IMPRUDENT IN THE DECISIONS.
 
11            AND WHAT DECISIONS DO THEY MAKE?  THEY MADE ONE.
 
12  WHAT WAS THAT DECISION?  MR. CARTO, YOU GO AHEAD.  IF YOU --
 
13  IF YOU ARE SUCCESSFUL, PUT UP ALL OF YOUR MONEY, AND THE
 
14  EVIDENCE IS CLEAR THEY, LEGION, DIDN'T PUT UP A DIME, FOR 6
 
15  YEARS DIDN'T PUT UP A DIME.  PERIOD.  BUT YOU PUT UP YOUR
 
16  MONEY, AND YOU GET THE OTHER ENTITIES TO PUT UP MONEY,
 
17  FINE.  IF YOU THINK THERE’s SOMETHING OUT THERE, GO GET IT.
 
18  IF YOU THINK YOU CAN WIN THE LOTTERY, YOU GO BUY THE
 
19  TICKET.
 
20            HE SAYS, FINE.  I'LL GO BUY THE TICKET.  AND
 
21  THAT’s WHAT THE WHOLE ISSUE IS ALL ABOUT.  WAS THAT AN
 
22  IMPRUDENT DECISION?  THAT’s THE ISSUE BEFORE THE COURT.  WAS
 
23  THAT AN IMPRUDENT DECISION GIVING ALL OF THE ATTENDANT
 
24  CIRCUMSTANCES IN 1985.  AND THEY SHOWN NO EVIDENCE TO THIS
 
25  COURT THAT THAT WAS IMPRUDENT AND THEY MUST TO PREVAIL.
 
26            NOW LAST ISSUE, WHICH I TANGENTIALLY TOUCHED UPON
 
27  IN OUR PAPERWORK, ACTUALLY TWO LAST ISSUES, ONE, THE STATUTE
 
28  OF LIMITATIONS — MARCELLUS TESTIFIED WE'RE NOT — STRIKE
			
			

page 636
 
 
 
 1  THAT.
 
 2            WHAT WE'RE LOOKING AT IS NOT A NEW BOARD OF
 
 3  DIRECTORS.  WE'RE LOOKING AT ABOUT WHAT DID THE CORPORATION
 
 4  KNOW IN 1990, 1991?
 
 5            YOUR HONOR, THE EVIDENCE BEFORE YOU, AND YOU
 
 6  ADMITTED INTO EVIDENCE, THE FURRS KNEW EVERYTHING — READ
 
 7  THE DEPOSITIONS — OR THEY HAD THE MEANS, WHICH IS NOT
 
 8  DISCUSSED, THE MEANS TO GET INFORMATION ABOUT THE ESTATE
 
 9  FROM THE ATTORNEYS THEMSELVES.  IN FACT, MR. FURR TESTIFIED
 
10  IN THE DEPOSITION HE EVEN SPOKE WITH BIDDLE AND COMPANY AS
 
11  EARLY AS 1990 AND BIDDLE AND COMPANY KNEW ALL OF THE ASSETS,
 
12  KNEW EVERYTHING THAT WAS RECOVERED, KNEW WHERE IT WAS
 
13  GOING.  IN FACT, THE CORRESPONDENCE IS CLEAR BIDDLE AND
 
14  COMPANY THROUGH MR. ROCHAT HANDLED THE DISTRIBUTION.  NOW
 
15  THAT’s THE CONCEPT.
 
16            ONE, IT’s NEVER PLEADED IN THEIR PAPERWORK, AND IT
 
17  HAS TO BE PLEADED UNDER FRAUD CLAIM.  IT WASN'T PLEADED.
 
18  THEY HAVE TO PLEAD IN ABSENCE OF MEANS TO DO THAT.  WELL,
 
19  THE CORPORATION HAD THE MEANS.  THE FURRS HAD THE MEANS.
 
20  THE CORPORATION — THEY HAD ATTORNEYS THAT WERE HANDLING
 
21  THIS.  THAT WAS NO SECRET.  THERE’s NO EVIDENCE BEFORE YOU
 
22  THAT THE ATTORNEYS HANDLING THAT CASE WERE SECRET, NONE
 
23  WHATSOEVER.  THE MEANS WERE THERE IN 1990 AND 1991, AND IN
 
24  FACT MR. MARCELLUS TIPPED HIS HAND AND TESTIFIED THAT EVEN
 
25  IN LATE 1990 OR THE FIRST — THE FIRST COUPLE OF MONTHS 1991
 
26  HE SAW $100,000 TRANSFER OF MONEY, WHICH WOULD PUT ANYBODY
 
27  ON THIS.
 
28            YOU KNOW WHY MR. MARCELLUS’s TESTIMONY IS
			
			

page 637
 
 
 
 1  IRRELEVANT?  HE WAS MERELY AN EMPLOYEE.  HE HAD NO STANDING
 
 2  TO BRING ANYTHING.  HE WASN'T ENTITLED TO SEE MINUTES.  HE
 
 3  WASN'T ENTITLED TO SEE ANYTHING.  HE WAS — HE WAS SIMILAR
 
 4  TO A SECRETARY.  I'M NOT SAYING A SECRETARY, BUT HE’s VERY
 
 5  SIMILAR TO SOMEBODY ELSE WITHIN ANOTHER CORPORATION AT A
 
 6  DESK.  HE’s NOT GOING TO BE INVOLVED IN THE BOARD OF
 
 7  DIRECTORS.  HE’s NOT GOING TO BE INVOLVED.
 
 8            WHAT DID HE TESTIFY TO?  HE STATED, WELL, THE
 
 9  FURR’s ACTION, ANY TIME THEY DID A CONTRACT FOR ME IT'S
 
10  OKAY.  WE ALL UNDERSTAND THE FURRS, THAT AUTHORITY.  MY
 
11  CONTRACT IS VALID BECAUSE THE FURRS — LAVONNE FURR PUT HER
 
12  SIGNATURE OR PENNED HER SIGNATURE TO IT.  THAT’s THE POINT,
 
13  WHICH IS NOT DISCUSSED AND TOUCHED UPON IN THE NEW BRIEF,
 
14  THE MEANS.  THEY MUST FIRST OF ALL PLEAD AN ABSENCE OF MEANS
 
15  IN THE COMPLAINT.
 
16            I WOULD REFER THE COURT TO THE COMPLAINT.  THERE
 
17  IS NOWHERE IN THAT COMPLAINT EVEN GIVEN A LITERAL
 
18  INTERPRETATION TO IT SHOWING AN ABSENCE OF MEANS FOR THE
 
19  CORPORATION.
 
20            LET’s DON'T FORGET THE CORPORATION IS NOT
 
21  MR. MARCELLUS.  THE CORPORATION ISN'T MR. WEBER BACK THEN.
 
22  IT’s BACK THEN TOO.  WE'RE NOT TALKING ABOUT TODAY.  IT'S
 
23  BACK THEN.  NOTHING OF THAT.
 
24            SECOND OF ALL, THE TIME AND THE MANNER UPON WHICH
 
25  THEY FOUND THIS INFORMATION IS NOWHERE.  TIME AND MANNER.
 
26  NOWHERE IN THE COMPLAINT.  NOT ONLY HAVE THEY DONE THAT, BUT
 
27  THEY EVEN SHOWN THE TIME AND MANNER WHEN THEY FIRST BECAME
 
28  AWARE.  IT’s NOT THAT I COME UP TO YOU AND SAY OKAY, I JUST
			
			

page 638
 
 
 
 1  COMMITTED A FRAUD.  NOW YOU KNOW EVERYTHING.  IT’s TO PUT A
 
 2  PRUDENT MAN ON SUSPICION.  WELL, HE HAD ATTORNEYS
 
 3  TRANSFERRING TO OTHER CORPORATIONS.  YOU HAVE MINUTES BY THE
 
 4  FURRS, AT LEAST LAVONNE FURR AND LEWIS FURR, BY THE MARCH 5,
 
 5  1991 MINUTES, WHICH I BELIEVE IS EXHIBIT 42 OR 41.  TAKE A
 
 6  LOOK AT THOSE MINUTES.  I DON'T CARE WHO ATTENDED IT.  IT'S
 
 7  THE RESOLUTIONS THAT WERE DISCUSSED.
 
 8            LAVONNE FURR AT LEAST AS OF THAT DATE — SHE
 
 9  TESTIFIES TO THIS ALSO IN HER DEPOSITION — WHO IS A
 
10  DIRECTOR, WHOSE KNOWLEDGE IS IMPUTED TO THE CORPORATION,
 
11  STATED:  DOCTOR PATRICK FOETISCH, YOU GO AHEAD AND SET UP
 
12  THE CORPORATION, AND YOU FUNNEL THE MONEY IN THE
 
13  CORPORATION, THE CORPORATION, THE SAME ENTITY.  BECAUSE YOU
 
14  HAVE A DIFFERENT BOARD OF DIRECTORS DOESN'T MAKE IT A
 
15  DIFFERENT ENTITY.  THE SAME ENTITY THAT IS SUING HAD THE
 
16  KNOWLEDGE, THE MEANS OF KNOWLEDGE TO KNOW THAT MONIES WERE
 
17  GOING IN THIS DIRECTION AND NOT INTO THE COFFERS OF THE
 
18  LEGION.  AND KNEW ALSO THAT ATTORNEYS REPRESENTING THE
 
19  COMPANY WERE ACTING PURSUANT TO LAVONNE FURR’s REQUEST.
 
20  WHETHER IN FACT MR. CARTO HAD ANYTHING TO DO WITH IT IS
 
21  IRRELEVANT.  WHETHER — THERE WAS NO GUN TO THEIR HEAD, NO
 
22  EVIDENCE OF GUN TO THE HEAD, NO EVIDENCE OF SOMEBODY GOING
 
23  BEHIND THEIR BACK AND TELLING THEM IF YOU DON'T DO THIS, I'M
 
24  GOING TO KILL YOUR FIRST BORN.  THERE’s NOTHING LIKE THAT
 
25  DONE, AND THERE’s NO EVIDENCE OF THAT THERE.  NONE
 
26  WHATSOEVER.
 
27       THE COURT:  YOU TALKED ABOUT THIS, THE STATUTE OF
 
28  LIMITATIONS.  I WILL GIVE YOU ANOTHER FIVE MINUTES.  THEN
			
			

page 639
 
 
 
 1  GET ON WITH THE CASE.
 
 2       MR. WAIER:  THEREFORE THE STATUTE OF LIMITATIONS IS NOT
 
 3  TOLLED AND CAN ONLY BE TOLLED — WOULD NOT START TO ACCRUE
 
 4  UNLESS THERE’s AN ABSENCE OF MIND TO DETERMINE ANY
 
 5  DEFALCATIONS, FRAUD, CONVERSIONS.  THERE’s A THREE-YEARS
 
 6  STATUTE FOR CONVERSION AND THREE-YEAR STATUTE FOR FRAUD.
 
 7            WE KNOW MR. MARCELLUS TESTIFIED SPECIFICALLY THAT
 
 8  IN 1990 AND 1991, EARLY, HE HAD KNOWLEDGE OF TRANSFERS GOING
 
 9  OTHER THAN TO THE LEGION.  WE HAVE ALSO UNREFUTED TESTIMONY
 
10  BY LAVONNE FURR THROUGH HER DEPOSITION AND LEWIS FURR
 
11  THROUGH HIS DEPOSITION THAT YOU HAVE BEFORE YOU THAT THEY
 
12  KNEW WHERE MONIES WERE GOING, IN FACT, HAD COMMUNICATED WITH
 
13  ATTORNEYS IN 1990 AND EARLY 1991.
 
14            THE COMPLAINT WAS FILED.  GIVE THEM THE FIRST
 
15  COUPLE OF MONTHS IN 1991.  WAS FILED OVER 3 YEARS.  IT WAS
 
16  FILED IN JULY 22, I BELIEVE 1994.  THEREFORE THOSE CLAIMS
 
17  ARE GONE BECAUSE YOU HAVE A NEW BOARD.  DOESN'T MEAN YOU
 
18  AUTOMATICALLY GET AN ACCRUAL.  I AM UNAWARE OF ANY TOLLING
 
19  BECAUSE A NEW BOARD OF DIRECTORS COMES INTO PLAY IN A
 
20  CORPORATION.
 
21            IT’s INTERESTING, YOUR HONOR, THE NEW BOARD OF
 
22  DIRECTORS COME INTO PLAY IN SEPTEMBER 1993, YET THEY WAIT
 
23  HOW MANY MONTHS — 10 MONTHS TO BRING THE LAWSUIT.
 
24            BUT GETTING BACK TO IT, THEREFORE, THE REAL
 
25  CRITICAL ISSUE IS THE MEANS OF KNOWLEDGE.  YOU HAD
 
26  ATTORNEYS — THIS IS NOT A SECRET — IN 1990 AND '91 THE
 
27  THREE-YEAR STATUTE FOR CONVERSION AND FRAUD HAS RUN.
 
28  THERE’s NO QUESTION ABOUT IT.
			
			

page 640
 
 
 
 1            ALSO, YOUR HONOR, REAL QUICKLY, WHAT DOES THE
 
 2  EVIDENCE ALSO SAY?  THE LEGION HAS NO STANDING IN THIS
 
 3  LITIGATION, AND THEN THAT IS NOT ADDRESSED IN THE PAPERS.
 
 4  IT’s A CRITICAL.  THE STANDING REAL PARTY IN INTEREST FROM
 
 5  THE EVIDENCE YOU HEARD — I WANT YOU TO RECALL ALL THIS
 
 6  EVIDENCE, AND I KNOW YOU WILL — WHO IS THE REAL PARTY IN
 
 7  INTEREST IN THE LITIGATION?  IT DAWNED ON ME THIS MORNING IF
 
 8  ANYBODY IS A REAL PARTY IN INTEREST, IT’s VIBET.  WHY
 
 9  VIBET?  MR. BEUGELMANS AND MR. MUSSELMAN IN THEIR ARGUMENT
 
10  SAID WHAT VIBET IS IS AN INSTRUMENTALITY, IS A CORPORATION
 
11  OWNED BY THE LEGION BECAUSE IT WAS SET UP FOR THE LEGION.
 
12  WE WILL GIVE THEM THEIR DUE FOR THIS ARGUMENT.  I'M GOING TO
 
13  GIVE THAT TO THEM.
 
14            WHO IS THE REAL PARTY IN INTEREST?  VIBET.  YOU
 
15  KNOW THE REASON WHY?  IF I'M A SHAREHOLDER OF I.B.M. OR A
 
16  DIRECTOR OF I.B.M., AND ASSUME THAT THEY ARE THE SOLE OWNER
 
17  AND SHAREHOLDER OF VIBET, I HAVE NO RIGHT TO BRING SOMETHING
 
18  IN MY OWN NAME ON BEHALF OF I.B.M.  I HAVE TO BRING IT ON
 
19  BEHALF OF I.B.M.  THE REAL PARTY IN INTEREST TO ANY DAMAGES
 
20  IS VIBET OR IS I.B.M.
 
21            THERE IS NO STANDING ON BEHALF OF THE LEGION FOR
 
22  PURPOSES OF THIS ARGUMENT.  THEY HAVE NOT SHOWN OTHERWISE.
 
23  IN FACT, THEIR ARGUMENTS ARE DIRECTLY RELATED TO THAT
 
24  ISSUE.  THAT IS THE REASON WHY THEY SHOULDN'T EVEN BE
 
25  SITTING HERE.  IT SHOULD BE VIBET SITTING HERE.  STATUTE OF
 
26  LIMITATIONS HAS RUN.
 
27            ALSO ONE OTHER ISSUE, THE LAST CAUSE OF ACTION.
 
28  WE HAVE ASKED FOR A MOTION FOR JUDGMENT ON THE PLEADINGS
			
			

page 641
 
 
 
 1  AND/OR JUDGMENT.  THERE’s NO SUCH SECTION AS LISTED IN THAT
 
 2  LAST CAUSE OF ACTION.  I RAISED THIS ISSUE THEY NOT PUT ON
 
 3  PROOF WITH RESPECT TO THAT.  THERE IS NO CONFORMING TO
 
 4  PROOF.  THIS IS A — THEY SUED UNDER A STATUTE.  THAT
 
 5  STATUTE THEY NOW CLAIM CLERICAL ERROR.  THIS HAS BEEN GOING
 
 6  FOR HOW LONG.  THEY HAVE BEEN TOLD ABOUT THIS MORE THAN I
 
 7  DON'T KNOW HOW LONG NOW.  IF THEY ARE GOING TO GO ON THE
 
 8  BOOKS AND FOUND A STATUTE TO CONFORM, DO WHAT THEY HAVE
 
 9  ALLEGED, WE WOULD BE PREJUDICED.  WE WOULDN'T HAVE AN
 
10  OPPORTUNITY TO COME IN.
 
11            WE'RE ENTITLED TO JUDGMENT AT THE VERY LEAST AS TO
 
12  THAT CAUSE OF ACTION.
 
13            ONE SECOND.
 
14            TWO OTHER ISSUES.  BECAUSE I HAVEN'T PAID MR. — I
 
15  HAVE SEEN NO EVIDENCE — I POINTED THIS OUT IN THE BRIEF.
 
16  THERE HAS BEEN NO EVIDENCE OF ANYTHING HENRY FISCHER DID
 
17  OTHER THAN GO AROUND THE VARIOUS COUNTRIES IN EUROPE AND
 
18  HIRE ATTORNEYS, DO CONSULTATION WORK AND INTERFACE, FILE
 
19  COURT DOCUMENTS.  THERE HAS BEEN NOTHING OTHER THAN THE FACT
 
20  HE WAS PAID FOR THOSE SERVICES OVER A 6-YEAR PERIOD OF
 
21  TIME.  A THRESHOLD BASIS THEY MUST SHOW.
 
22            SECOND OF ALL, WITH RESPECT TO A CONSPIRACY, THEY
 
23  MUST SHOW THE CONSPIRACY, QUOTE, THE OVERT ACT HAS TO BEFORE
 
24  THE OTHER ACTIONS THEY MUST SHOW SOME AGREEMENT WAY IN
 
25  ADVANCE OF THIS.  IN 1985 THERE’s NO MENTION OF HENRY
 
26  FISCHER.  THE ONLY TIME YOU HEAR ABOUT HENRY FISCHER IS 1987
 
27  WHEN HE COMES TO THE LEGION OFFICE, AND MR. MARCELLUS
 
28  DOESN'T KNOW WHY.  BUT THERE’s BEEN NO EVIDENCE THAT HE --
			
			

page 642
 
 
 
 1  AND IT WASN'T SECRET, HIS ACTIVITIES.  THERE’s POWERS OF
 
 2  ATTORNEY, AND THERE’s BOARD MINUTES AUTHORIZING HIM TO DO
 
 3  WHAT HE DID DO BY THE LEGION.
 
 4            THE LEGION HAS NOT INDICATED THAT MR. FISCHER DID
 
 5  ANYTHING WRONG.  IN FACT, THE LEGION KNEW ABOUT WHAT HE WAS
 
 6  DOING BY THE POWERS OF ATTORNEY AND BY THE MINUTES, THE VERY
 
 7  MINUTES IN EVIDENCE BEFORE YOU.  I'M AT A LOSS TO FIND WHAT
 
 8  EVIDENCE IMPLICATES MR. FISCHER TO ANYTHING, AT LEAST WHEN
 
 9  YOU READ THE COMPLAINT, AND I WOULD ASK THE COURT TO DO
 
10  THAT.  MR. FISCHER SHOULD NOT BE IN THE LITIGATION AT THIS
 
11  JUNCTURE.  THERE HAS BEEN NO EVIDENCE FROM A THRESHOLD BASIS
 
12  IMPLICATING MR. FISCHER TO ANYTHING, AND THE BURDEN IS ON
 
13  THEM TO DO THAT.
 
14            IT IS NOT TREATED AS A NONSUIT FOR PURPOSES OF A
 
15  MOTION UNDER 631.8.  IT’s NOT TREATED AS A NONSUIT.  IT IS
 
16  ON THE MERITS.  YOU ARE ENTITLED TO WEIGH AND YOU USE THE
 
17  SUBSTANTIAL EVIDENCE STANDARD WITH RESPECT TO THAT.
 
18  MR. MUSSELMAN IS WRONG.  IF IT WAS A NONSUIT, I WOULD AGREE
 
19  WITH HIM ON CERTAIN ISSUES.
 
20            THE OTHER ISSUE IS ELISABETH CARTO.  THERE’s NO
 
21  EVIDENCE OTHER THAN THE FACT SHE’s MARRIED TO WILLIS CARTO,
 
22  NONE BEFORE YOU THAT SHE DID ANYTHING.  AND I DO SAY, YOUR
 
23  HONOR, I KNOW SOMETIMES WIVES CAN BE IMPLICATED WITH THE
 
24  HUSBANDS BECAUSE THEY'RE MARRIED TO THEM.  MAYBE MY WIFE
 
25  DOESN'T WANT TO BE IMPLICATED TO ME BECAUSE SHE’s MARRIED TO
 
26  ME.  I WILL TELL YOU THAT’s THE ONLY EVIDENCE YOU HAVE
 
27  BEFORE YOU.  THERE IS NOTHING THAT ELISABETH CARTO HAS DONE
 
28  ON ANY ISSUE, AND NOBODY TESTIFIED TO THAT.  IN FACT, THE
			
			

page 643
 
 
 
 1  ONLY THING THAT HAS BEEN TESTIFIED TO ELISABETH CARTO WHEN
 
 2  MR. MARCELLUS ASKED HER A QUESTION SHE TOLD HIM THE ANSWER.
 
 3  YES, THERE ARE MONIES COMING.  THAT’s THE ONLY THING SHE
 
 4  EVER SAID.
 
 5            SHE’s NEVER BEEN ACCUSED OF HIDING ANYTHING.
 
 6  SHE’s — THEY — THEY CLAIM SHE WASN'T ON THE BOARD OF
 
 7  DIRECTORS DURING THIS PARTICULAR PERIOD OF TIME, THE
 
 8  RELEVANT PERIOD OF TIME.  THERE’s NO EVIDENCE SHE WAS.  SHE
 
 9  INDICATES THAT SHE WAS A DIRECTOR DURING A CERTAIN PERIOD OF
 
10  TIME.  IT WASN'T WITH RESPECT TO THE ISSUES.  THERE IS
 
11  NOTHING.  THE RECORD IS BARE WITH RESPECT TO ELISABETH
 
12  CARTO.
 
13            WE WOULD REQUEST JUDGMENT ON THAT BASIS.
 
14       THE COURT:  IF THE PLAINTIFF WOULD LIKE TO SAY
 
15  SOMETHING, FINE, BUT I'M REALLY ONLY INTERESTED IN THREE
 
16  THINGS:  ANY COMMENTS ON MR. HENRY FISCHER, AND ANY COMMENTS
 
17  ABOUT ELISABETH CARTO?  WHAT ABOUT YOUR CAUSE OF ACTION
 
18  NUMBER SIX, WHICH YOU SAY IT’s CIVIL CODE 6215.  I COULDN'T
 
19  FIND ANYTHING IN CIVIL CODE SECTION 6215.
 
20       MR. BEUGELMANS:  YOUR HONOR, ON THAT FIRST ISSUE IT
 
21  SHOULD BE CIVIL CODE SECTION 5142.  WE ASK FOR LEAVE TO
 
22  AMEND THE COMPLAINT TO CONFORM TO PROOF.  I'M SORRY.
 
23  CORPORATIONS CODE 5142.
 
24       THE COURT:  PROBABLY IS IN THE CORPORATIONS CODE.
 
25       MR. BEUGELMANS:  I APOLOGIZE.
 
26       THE COURT:  I DON'T HAVE A CORPORATIONS CODE.  WHAT
 
27  DOES IT SAY?
 
28       MR. MUSSELMAN:  I HAVE A COPY.  DO YOU WANT ME TO READ
			
			

page 644
 
 
 
 1  IT IN THE RECORD OR GIVE IT TO YOU TO LOOK AT?
 
 2       THE COURT:  GIVE IT TO ME TO LOOK AT.
 
 3       MR. WAIER:  I AM GOING TO OBJECT TO THIS.  WE ASKED
 
 4  DISCOVERY ON THIS ISSUE.  WE HAVE DONE ALL OF THIS.
 
 5       THE COURT:  I KNOW, COUNSEL.  YOU TOLD ME FOUR TIMES
 
 6  YOU DID THAT, AND I KNOW THAT YOU HAVE DONE IT IN A WHOLE
 
 7  BUNCH OF VOLUMES.  YOU SAID, WHERE IS THIS SECTION 6215?
 
 8  AND YOU JUST TOLD ME THAT.
 
 9            HOW DOES THIS PREJUDICE THE DEFENSE?  YOU READ
 
10  5142 OF THE CORPORATIONS CODE.  THAT’s WHAT WE HAVE BEEN
 
11  TALKING ABOUT.
 
12       MR. WAIER:  I HAVEN'T SEEN IT.  IF YOU CAN SHOW IT TO
 
13  ME.
 
14       THE COURT:  WHY DOESN'T COUNSEL COME UP AND GET THIS.
 
15  IT’s NOTHING NEW HERE, NO NEW AREA OF LAW THAT’s DIFFERENT
 
16  BY CHANGING IT FROM CIVIL CODE SECTION 6215 TO CORPORATIONS
 
17  CODE 5142.
 
18       MR. WAIER:  WELL, WITHOUT RESEARCHING THIS, YES, THERE
 
19  ARE CERTAIN ELEMENTS THAT WE'RE TALKING ABOUT, AND WE
 
20  HAVEN'T BEEN APPRISED OF THE LAW.  THERE MAY NOT BE A PUBLIC
 
21  RIGHT OF ACTION TO THIS.  THERE MAY NOT BE A PRIVATE RIGHT
 
22  OF ACTION TO THIS CAUSE.  A NUMBER OF THESE NONPROFIT PUBLIC
 
23  BENEFIT CORPORATION CODE SECTIONS DEAL WITH A PRIVATE — NOT
 
24  WITH A PRIVATE BUT A STATE RIGHT OF ACTION.  I'M NOT SURE
 
25  THEY EVEN HAVE STANDING ON THE ISSUE.
 
26            HAD WE BEEN APPRISED OF THIS BEFOREHAND AND
 
27  INSTEAD OF IN THE MIDDLE OF TRIAL, WE MIGHT HAVE BEEN ABLE
 
28  TO ADDRESS THE ISSUES; BUT THIS IS NOT — RATHER HERE NOW
			
			

page 645
 
 
 
 1  AFTER THEY HAVE RESTED THEIR CASE.
 
 2            AND, YOUR HONOR, I'M NOT SURE IT SAYS “SHALL BE
 
 3  GIVEN OF ANY NOTICE BROUGHT BY PERSON SPECIFIED IN ONE."
 
 4            I THINK THERE’s A LOT OF ISSUES IN HERE.  IF YOU
 
 5  ARE TALKING ABOUT THIS, IT TALKS ABOUT “ANY OF THE FOLLOWING
 
 6  MAY BRING AN ACTION TO ENJOIN, CORRECT, OBTAIN DAMAGES FOR
 
 7  OR TO OTHERWISE REMEDY — OR TO OTHERWISE REMEDY A BREACH OF
 
 8  A CHARITABLE TRUST."
 
 9            IT SAYS: “AN OFFICER OF THE CORPORATION, A
 
10  DIRECTOR OF THE CORPORATION, THE CORPORATION, OR A MEMBER IN
 
11  THE NAME OF THE CORPORATION."
 
12            ALL OF THESE ISSUES COULD HAVE BEEN ADDRESSED AS
 
13  TO A STANDING ISSUE WITH RESPECT TO DISCOVERY AT THE VERY
 
14  BEGINNING.  WE DIDN'T DO THAT.
 
15            WE ALSO — IT WAS OBVIOUS THE ATTORNEY GENERAL
 
16  HADN'T BEEN GIVEN NOTICE OF THIS LITIGATION, EVEN BY WHAT
 
17  THEY PROPOUNDED TO YOU, BEFORE THIS LITIGATION HAPPENED.
 
18  HAD THIS BEEN DONE, WE MIGHT HAVE DEMURRED OR MOVED TO
 
19  STRIKE ON A DIFFERENT GROUND BECAUSE THEY HADN'T DONE THE
 
20  NOTICE, AND WE MIGHT HAVE BEEN IN A DIFFERENT BALL GAME WITH
 
21  RESPECT TO THIS ISSUE.
 
22       THE COURT:  LET ME HEAR FROM THE PLAINTIFF ON HENRY
 
23  FISCHER AND ELISABETH CARTO.
 
24       MR. BEUGELMANS:  WITH RESPECT TO HENRY FISCHER, IN
 
25  EVIDENCE BEFORE THE COURT IS EXHIBIT 37 GRANTING MR. FISCHER
 
26  A POWER OF ATTORNEY TO ACT AS AGENT FOR THE LEGION.  HE WAS
 
27  A FIDUCIARY AND HE HAD A DUTY TO ACCOUNT, AND HE HAD A DUTY
 
28  TO DEAL FAIRLY WITH THE LEGION.
			
			

page 646
 
 
 
 1            AS THE COURT HEARD FROM THE MOUTH OF MR. WILLIS
 
 2  CARTO, THERE WAS NO ACCOUNTING.  SOMEHOW MR. FISCHER HAS
 
 3  MADE OFF WITH MAYBE 2, $300,000 OF THE LEGION’s MONEY.  AND
 
 4  WE BELIEVE THAT IS AN ACT THAT’s NOT IN CONFORMITY WITH HIS
 
 5  OBLIGATIONS AS A FIDUCIARY.  IF THEY WERE TO COME TO COURT
 
 6  AND EXPLAIN WHY THE MONEY WAS GIVEN, WHAT THEY DID TO EARN
 
 7  IT, WE MIGHT BE IN A DIFFERENT POSITION; BUT THAT’s THE
 
 8  POINT.  THERE’s NOTHING IN THE RECORD TO SHOW MR. HENRY
 
 9  FISCHER IN FACT HONESTLY EARNED THIS MONEY; HE WAS ENTITLED
 
10  TO IT.  MOREOVER, THERE’s NOTHING IN THE CORPORATE RECORDS
 
11  THAT SHOWS ANY RESOLUTION ON BEHALF OF THE BOARD OF
 
12  DIRECTORS ACCORDING MR. FISCHER ANY MONEY.  WHAT WAS GIVEN
 
13  TO MR. FISCHER WAS DONE SO EXCLUSIVELY BY MR. WILLIS CARTO,
 
14  NOT BY THE LEGION.
 
15       THE COURT:  WHAT ABOUT ELISABETH — MISS ELISABETH
 
16  CARTO?
 
17       MR. BEUGELMANS:  WITH RESPECT TO ELISABETH CARTO, HER
 
18  TESTIMONY WAS A BIT VAGUE.  SHE TESTIFIED SHE WAS A DIRECTOR
 
19  FOR CERTAIN PERIOD AFTER 1985 AND BEFORE 1993.  SHE
 
20  TESTIFIED SHE WAS A TREASURER INTERMITTENTLY DURING THAT
 
21  PERIOD OF TIME.
 
22            SHE ALSO TESTIFIED, YOUR HONOR, THAT SHE’s THE ONE
 
23  WHO GAVE AN INSTRUCTION TO MR. MARCELLUS TO PUT $250,000 ON
 
24  THE BOOKS OF THE LEGION AS AN ALLEGED LOAN FROM VIBET.  SHE
 
25  OBVIOUSLY HAD KNOWLEDGE CONCERNING VIBET, WHO VIBET WAS,
 
26  GREATER THAN THE PLAINTIFF DID IN THIS ACTION.
 
27            MOREOVER, YOUR HONOR, ELISABETH CARTO TODAY
 
28  CONTINUES TO HOLD HERSELF OUT TO BE A DIRECTOR OF THE LEGION
			
			

page 647
 
 
 
 1  AND IN VIOLATION OF JUDGE POLIS’s RULING.  SHE DIDN'T APPEAL
 
 2  THE RULING.  SHE ABANDONED THE APPEAL.
 
 3            JUDGE POLIS FOUND SPECIFICALLY SHE WAS NOT A
 
 4  DIRECTOR FROM AND AFTER SEPTEMBER 1993, BUT SHE PERSISTS,
 
 5  ALONG WITH MR. CARTO AND THE FURRS, IN HOLDING HERSELF OUT
 
 6  TO BE A DIRECTOR ENGAGING IN FUND RAISING AND OPENING
 
 7  ACCOUNTS FOR THE LEGION.
 
 8       THE COURT:  ONE FINAL COMMENT FROM YOU, IF YOU WOULD.
 
 9  WHAT ABOUT THE PROBLEM YOU HAVE WITH CAUSE OF ACTION NUMBER
 
10  SIX?  YOU ARE USING A DIFFERENT CODE SECTION AND A WHOLE
 
11  DIFFERENT AREA OF THE CODE.
 
12       MR. BEUGELMANS:  YOUR HONOR, I THINK THAT’s A
 
13  TECHNICALITY.  THERE ARE NO FACTUAL ALLEGATIONS THAT ARE
 
14  DIFFERENT.  STICKING IN THE CORRECT CODE SECTION, CORPORATE
 
15  CODE SECTION, WOULD NOT MATERIALLY AFFECT THE BURDEN OF
 
16  PROOF WHATSOEVER.  SIMPLY THE ALLEGATION IS NOT A NECESSARY
 
17  ELEMENT OF THE CAUSE OF ACTION.
 
18            WHAT WE ARE CONTENDING IS THAT PRIOR TO THE
 
19  TRANSFER OF THE ASSETS, ALLEGED TRANSFER TO MR. WILLIS
 
20  CARTO, THAT OCCURRED AT SOME UNKNOWN DATE BETWEEN 1985 AND
 
21  1991, NO NOTICE WAS GIVEN TO THE ATTORNEY GENERAL.  THAT'S
 
22  AN ISSUE THAT’s BEEN LITIGATED EXTENSIVELY DURING THE COURSE
 
23  OF DISCOVERY IN THE MATTER MENTIONED FROM DAY ONE IN OPENING
 
24  STATEMENT MORE THAN 8 DAYS AGO IN THIS COURT.
 
25            I APOLOGIZE TO THE COURT THAT THE CODE SECTION IS
 
26  INCORRECT.  I BELIEVE THE DEFENDANTS HAD AMPLE NOTICE WHAT
 
27  WE WERE GETTING AT, WHAT THE ALLEGATION WAS.
 
28       THE COURT:  OKAY.  ANYTHING FROM THE DEFENSE, AND
			
			

page 648
 
 
 
 1  PLEASE, I DON'T NEED TO HEAR THINGS TWO OR THREE TIMES.
 
 2  SOMETHING NEW.
 
 3       MR. WAIER:  I WANT TO DISCUSS WHAT COUNSEL HAS RAISED
 
 4  AS TO THE EVIDENCE.  START WITH ELISABETH CARTO TO REFUTE
 
 5  WHAT HE HAS SAID.
 
 6            THE ONLY THING THAT, AGAIN, THAT SHE SAID
 
 7  SPECIFICALLY — THERE’s BEEN NO EVIDENCE THAT SHE WITHHELD
 
 8  ANY INFORMATION FROM ANYBODY, EVEN TOM MARCELLUS, WHO SHE
 
 9  DIDN'T HAVE TO TELL ANYTHING ABOUT.
 
10            TWO, THERE WAS NO EVIDENCE THAT SHE WAS CONNECTED
 
11  DURING THE RELEVANT PERIOD OF TIME.  YOU REMEMBER, THE
 
12  BURDEN IS ON THEM, ON THE PLAINTIFF.
 
13            TWO — THREE, THERE IS LITERALLY NOTHING IN THE
 
14  RECORD IMPLICATING ELISABETH CARTO TO ANYTHING OTHER THAN
 
15  TALKING TO MR. MARCELLUS.  THEY HAVE SHOWN NO EVIDENCE SHE
 
16  HID ANYTHING.  THEY SHOWN NO EVIDENCE SHE PUT HIMSELF --
 
17  THAT SHE PUTS HERSELF PRESENTLY AS A — PRESENTLY — NOT
 
18  PRESENTLY BUT VIOLATION OF ANY LAW OR ANY RULING OR ANYTHING
 
19  ELSE LIKE THAT.  THEY SHOWN ABSOLUTELY NOTHING.
 
20            BUT LET’s GO TO THE FARREL ESTATE.  THEY HAVE
 
21  SHOWN NOTHING WITH THE FARREL ESTATE.  THEY HAVE SHOWN
 
22  NOTHING WHATSOEVER.  THEY SHOWN NO MONEY COMING TO HER.
 
23  THEY HAVE SHOWN NOTHING.
 
24            MORE IMPORTANTLY, WITH RESPECT TO MR. FISCHER, LET
 
25  ME TELL YOU THE WEAKNESS IN THE CASE.  LOOK AT THE EVIDENCE,
 
26  NOT ARGUMENT.  THE EVIDENCE IS THE ONLY THING HE DIDN'T GIVE
 
27  TO MR. CARTO WERE TIME SHEETS.  MR. CARTO TESTIFIED THAT
 
28  MR. — I'M NOT GOING TO REGURGITATE EVERYTHING.  YOU KNOW
			
			

page 649
 
 
 
 1  WHAT HE DID; WHAT MR. CARTO TOLD YOU HE DID.  WITHOUT
 
 2  MR. FISCHER WE COULDN'T EVEN HAVE GOT TO FIRST BASE IN
 
 3  EUROPE BECAUSE HE HAD THE CONTACTS WITH EVERYBODY THERE.
 
 4            THREE, THEY DON'T CONTEST MR. Carto’s RIGHT TO PAY
 
 5  EXPENSES.  HE TESTIFIED ON THE STAND MR. FISCHER’s PAYMENT
 
 6  WAS AN EXPENSE FOR THE CORPORATION.  DID AUTHORIZE
 
 7  MR. FISCHER.  THERE’s A POWER OF ATTORNEY THAT WAS
 
 8  DISCUSSED, AND MR. CARTO DISCUSSED IT, AND IT HAPPENS TO BE
 
 9  IN THE EXHIBITS.  SO ALL OF THOSE POINTS ARE RED HERRINGS.
 
10  THERE’s NO EVIDENCE IMPLICATING MR. FISCHER TO ANYTHING.
 
11       THE COURT:  VERY WELL.  THE RULING WILL BE THE MOTIONS
 
12  FOR NONSUITS ARE DENIED OVER THE OBJECTION OF THE DEFENSE.
 
13            THE CAUSE OF ACTION NUMBER SIX CAN READ
 
14  CORPORATIONS CODE 5142.
 
15            WOULD THE DEFENSE LIKE TO PUT ON ANY WITNESSES?
 
16       MR. LANE:  YES.  CALL WILLIS CARTO.
 
17
 
18                          WILLIS CARTO,
 
19  CALLED AS A WITNESS, BY AND ON HIS OWN BEHALF, HAVING BEEN
 
20  PREVIOUSLY SWORN, TESTIFIED AS FOLLOWS:
 
21                        DIRECT EXAMINATION.
 
22       THE COURT:  HE HAS BEEN SWORN.
 
23
 
24  BY MR. LANE:
 
25       Q    WHAT IS YOUR NAME?
 
26       A    WILLIS A. CARTO.
 
27       Q    WHERE DO YOU LIVE?
 
28       A    IN ESCONDIDO.
			
			

page 650
 
 
 
 1       Q    CALIFORNIA?
 
 2       A    YES.  ACTUALLY NORTHERN SAN DIEGO COUNTY.  IT'S
 
 3  NOT REALLY ESCONDIDO.
 
 4       Q    HOW OLD ARE YOU?
 
 5       A    70.
 
 6       Q    WHAT IS YOUR EDUCATIONAL BACKGROUND?
 
 7       A    WELL, GRADE SCHOOL AND TWO YEARS UNIVERSITY AND
 
 8  FEW MONTHS IN CINCINNATI LAW SCHOOL.
 
 9       Q    DID YOU SERVE IN THE UNITED STATES ARMY?
 
10       A    YES, SIR.
 
11       Q    WHEN WAS THAT?
 
12       A    1944 THROUGH 1946.
 
13       Q    AND DID YOU RECEIVE ANY DECORATIONS?
 
14       MR. BEUGELMANS:  OBJECTION.  CHARACTER EVIDENCE, YOUR
 
15  HONOR.
 
16       THE COURT:  SUSTAINED.
 
17       MR. LANE:  BACKGROUND INFORMATION.
 
18       THE COURT:  WELL, WE CAN ALL GET INTO BACKGROUND
 
19  INFORMATION ON EVERYBODY.  MAYBE SOMEBODY IS A FIGHTER PILOT
 
20  AND SOMEONE IN THE MARINE CORPS.  IT’s NOT MATERIAL.
 
21
 
22  BY MR. LANE:
 
23       Q    WHAT IS YOUR PRESENT OCCUPATION, MR. CARTO?
 
24       A    I AM TREASURER OF LIBERTY LOBBY AND CHIEF
 
25  EXECUTIVE OFFICER, AS WELL AS PUBLISHER OF THREE
 
26  PUBLICATIONS.
 
27       Q    WHICH PUBLICATIONS DO YOU PUBLISH?
 
28       A    THE SPOTLIGHT, WHICH IS A WEEKLY NEWSPAPER; THE
			
			

page 651
 
 
 
 1  BARNE’s REVIEW, WHICH IS A MONTHLY MAGAZINE; AND THE
 
 2  NATIONAL INVESTOR, WHICH IS A MONTHLY NEWSLETTER.
 
 3       Q    IS YOUR BIOGRAPHY PUBLISHED IN WHO WHO’s IN
 
 4  AMERICA?
 
 5       MR. BEUGELMANS:  OBJECTION.  RELEVANT CHARACTER
 
 6  EVIDENCE.
 
 7       THE COURT:  WHAT IS THE RELEVANCE, MR. LANE?
 
 8       MR. LANE:  JUST BACKGROUND.  I KNOW MR. WEBER WAS
 
 9  PERMITTED TO TESTIFY ABOUT ALL THE SCHOOLS HE WENT TO AND
 
10  THAT KIND OF MATERIAL, YOUR HONOR.
 
11       THE COURT:  I THINK SCHOOLS ARE IMPORTANT.  WHETHER YOU
 
12  ARE IN THE WHO’s WHO IN AMERICA, WHO WASN'T WHO, OR
 
13  WHATEVER.
 
14       MR. LANE:  IT’s AN INDICATION HE’s RECOGNIZED AS A
 
15  PUBLISHER.
 
16       THE COURT:  I THINK YOU WOULD BE WILLING TO STIPULATE
 
17  TO THAT, WOULD YOU NOT?
 
18       MR. BEUGELMANS:  YES, SIR.
 
19
 
20  BY MR. LANE:
 
21       Q    DO YOU RECALL WHEN YOU FIRST MET LAVONNE FURR?
 
22       A    YES.
 
23       Q    WHEN WAS THAT?
 
24       A    WELL, THAT WAS IN THE LATE 70’s WHEN MY WIFE AND I
 
25  LIVED IN TACOMA PARK, MARYLAND, WHICH IS A SUBURB OF
 
26  WASHINGTON, D.C.
 
27            WE INVITED JASON MATTHEWS, WHO WAS THE FOUNDER OF
 
28  THE LEGION FOR SURVIVAL OF FREEDOM, TO DINNER ONE EVENING.
			
			

page 652
 
 
 
 1  HE BROUGHT ALONG HIS SECRETARY.  THE NAME WAS LAVONNE FURR.
 
 2            ALSO DOCTOR CHARLES CALLAN TANSILL (PHONETICS) WAS
 
 3  THERE THAT EVENING.  HE WAS A PROFESSOR IN HISTORY AT
 
 4  GEORGETOWN AND WROTE AN EXTREMELY VALUABLE BOOK, WHICH WAS
 
 5  RECOGNIZED AT THE TIME AS VERY DARING, CALLED, ROOSEVELT'S
 
 6  BACK DOOR TO WAR IN WHICH HE CITED THE HISTORY OF THE --
 
 7  LEADING UP TO WORLD WAR II.
 
 8       MR. MUSSELMAN:  OBJECTION.  STRIKE THE LAST PART.
 
 9  NONRESPONSIVE.
 
10       THE COURT:  OVERRULED.  IT SHOWS WHY HE WOULD REMEMBER
 
11  A PARTICULAR MEETING OF SOMEBODY.
 
12       MR. BEUGELMANS:  YOUR HONOR, I APOLOGIZE.  I HAVE TO GO
 
13  TO LOS ANGELES FOR THE FUNERAL.
 
14            WHAT TIME DOES THE COURT CONVENE TOMORROW
 
15  MORNING?
 
16       THE COURT:  OFF THE RECORD.
 
17
 
18                 (OFF-THE-RECORD DISCUSSION.)
 
19
 
20       THE COURT:  BACK ON THE RECORD.
 
21
 
22  BY MR. LANE:
 
23       Q    WHEN DID YOU — WHEN DID YOU FIRST HAVE CONTACT
 
24  WITH THE LEGION?
 
25       A    WELL, I KNEW JASON MATTHEWS FOR MANY YEARS PRIOR
 
26  TO THEN.  HE ACQUIRED BY PURCHASE A VERY --
 
27       MR. MUSSELMAN:  OBJECTION.  NO FOUNDATION.  ABOUT TO
 
28  STATE WHAT SOME OTHER PERSON DID.
			
			

page 653
 
 
 
 1       THE COURT:  I'M GOING TO OVERRULE IT, NOT FOR THE TRUTH
 
 2  OF THE MATTER, BUT TO SIMPLY SHOW WHY HE WOULD MEET
 
 3  MR. MATTHEWS AND REMEMBER HIM.
 
 4       THE WITNESS:  MR. MATTHEWS AND HIS WIFE, MARSHA, WERE
 
 5  FOUNDERS OF THE LEGION FOR SURVIVAL OF FREEDOM.  I MET THEM
 
 6  AT A MEETING.  I REMEMBER IT VERY WELL BECAUSE AT THIS TIME
 
 7  HE JUST PURCHASED THE AMERICAN MERCURY MAGAZINE, A MONTHLY
 
 8  MAGAZINE, WHICH I VERY MUCH WANTED TO ACQUIRE.  AND I ASKED
 
 9  HIM ABOUT TAKING IT OVER, AND HE SET A PRICE THAT WAS TOO
 
10  HIGH.  I FORGOT ABOUT IT.
 
11
 
12  BY MR. LANE:
 
13       Q    DID THERE COME A TIME WHEN THE AMERICAN MERCURY
 
14  MAGAZINE BECAME OWNED BY THE LEGION?
 
15       A    YES.  HE PURCHASED THAT IN, I WOULD SAY, PROBABLY
 
16  ABOUT 1962.
 
17       Q    AND DO YOU KNOW WHAT THE FINANCIAL AFFAIRS OF THE
 
18  LEGION WERE IN 1966?
 
19       A    THEY WERE BANKRUPT.  THEY HADN'T FILED.
 
20       MR. MUSSELMAN:  OBJECTION.  WITHOUT FOUNDATION, 1966.
 
21       THE COURT:  OVERRULED.  YOU CAN ASK HIM WHY HE BELIEVES
 
22  THAT TO BE SO.
 
23
 
24  BY MR. LANE:
 
25       Q    THE LEGION WAS BANKRUPT IN 1966; IS THAT CORRECT?
 
26       A    IT HAD NOT FILED FOR BANKRUPTCY.  THEY WERE GOING
 
27  TO FILE FOR BANKRUPTCY BECAUSE THEY WERE MORE THAN $20,000
 
28  IN DEBT AND COULDN'T PAY.
			
			

page 654
 
 
 
 1       MR. MUSSELMAN:  SAME OBJECTION.
 
 2       THE COURT:  SAME RULING.
 
 3
 
 4  BY MR. LANE:
 
 5       Q    DID THE LEGION AT THAT TIME APPROACH YOU TO SAVE
 
 6  THEM?
 
 7       A    YES.
 
 8       Q    AND DID YOU ENTER INTO AN AGREEMENT WITH THE
 
 9  PERSONS RESPONSIBLE FOR THE LEGION AT THAT TIME?
 
10       A    YES.
 
11       Q    AND WHAT WAS THE NATURE OF THAT AGREEMENT?
 
12       A    I ASSUMED THEIR OUTSTANDING INDEBTEDNESS WAS ALSO
 
13  OVER $20,000, A TOTAL OF $10,000 TO A MAN WHO LENT THEM THAT
 
14  MUCH; A TOTAL OF $5,000 TO TWO PRINTERS WHO PRINTED ISSUES
 
15  OF THE MAGAZINE, AND THEY WERE GOING TO SUE AND FORCE THEM
 
16  INTO BANKRUPTCY.  AND THEN THERE WAS A BACK DEBT TO LAVONNE
 
17  FURR TOTALING $20,000, AND THEY WERE ON THE ROPES.
 
18       Q    $20,000?
 
19       A    $5,000 TO LAVONNE.  THE TOTAL WAS 20.
 
20       Q    DID YOU ENTER INTO A WRITTEN AGREEMENT WITH THE
 
21  PERSONS WHO CONTROLLED THE LEGION IN 1966?
 
22       A    I BELIEVE SO.
 
23       Q    AND IN THAT AGREEMENT WHAT DID YOU RECEIVE?
 
24       A    I RECEIVED CONTROL OF THE — OF THE LEGION.  I WAS
 
25  APPOINTED A MEMBER.
 
26       MR. MUSSELMAN:  OBJECTION.  CALLS FOR LEGAL
 
27  CONCLUSION.
 
28       THE COURT:  OVERRULED.  IT DOES, BUT I THINK HE CAN USE
			
			

page 655
 
 
 
 1  IT IN THE LAY SENSE.
 
 2
 
 3  BY MR. LANE:
 
 4       Q    I'LL BE SPECIFIC.  DID THE AGREEMENT WHICH YOU
 
 5  SIGNED WHEN YOU AGREED TO ASSUME ALL THE DEBTS AND LIABILITY
 
 6  OF THE LEGION ACTUALLY WOULD STATE THAT YOU WILL BE GIVING
 
 7  QUOTE CONTROL OF THE LEGION FOR THAT PAYMENT?
 
 8       A    I BELIEVE IT DID.
 
 9       Q    AND DO YOU RECALL IF THAT WAS NEGOTIATED BY
 
10  COUNSEL REPRESENTING THE LEGION?
 
11       A    YES.  AS A MATTER OF FACT, HE’s STILL COUNSEL.
 
12  HE’s BEEN THE --
 
13       MR. MUSSELMAN:  OBJECTION.  WITHOUT FOUNDATION.  HOW
 
14  DOES HE KNOW THE PERSON IS COUNSEL?
 
15       THE COURT:  SUSTAINED.
 
16       MR. LANE:  THE OBJECTION?  I DIDN'T GET IT.
 
17       THE COURT:  THE OBJECTION IS WE DON'T KNOW WHO.  HE
 
18  DOESN'T HAVE PERSONAL KNOWLEDGE OF WHO THE ATTORNEY IS TODAY
 
19  FOR THE LEGION.
 
20       MR. LANE:  I THINK HE MEANT HE’s STILL A LAWYER.
 
21
 
22  BY MR. LANE:
 
23       Q    DID YOU MEAN HE’s STILL A LAWYER?
 
24       A    MR. KENNETH GRAHAM NEGOTIATED THE AGREEMENT.  HE
 
25  WROTE UP THE CONTRACTS, AND TODAY HE’s THE REGISTERED AGENT
 
26  FOR THE LEGION.
 
27       MR. MUSSELMAN:  OBJECTION.  WITHOUT FOUNDATION.
 
28       THE COURT:  OVERRULED.
			
			

page 656
 
 
 
 1
 
 2  BY MR. LANE:
 
 3       Q    WHO DID MR. GRAHAM REPRESENT WHEN YOU WENT INTO
 
 4  THE AGREEMENT WITH THE LEGION IN 1966?
 
 5       A    MR. GRAHAM REPRESENTED THE LEGION FOR THE SURVIVAL
 
 6  OF FREEDOM AND DREW UP THE CONTRACTS.
 
 7       Q    AND THE CONTRACT STATED THAT YOU WOULD FROM THAT
 
 8  POINT FORWARD HAVE CONTROL OF THE LEGION; IS THAT YOUR
 
 9  TESTIMONY?
 
10       A    THAT’s RIGHT.  I WAS ALSO MADE A MEMBER AND A
 
11  SUBSTITUTE INCORPORATOR, WHICH IS THE SAME THING.
 
12       MR. MUSSELMAN:  OBJECTION.  BEYOND THE SCOPE OF THE
 
13  QUESTION.
 
14       THE COURT:  SUSTAINED.
 
15
 
16  BY MR. LANE:
 
17       Q    IN ADDITION TO THE CONTRACT STATING THAT YOU FROM
 
18  THAT POINT FORWARD CONTROLLED THE LEGION, WHAT ELSE DID YOU
 
19  SECURE FROM YOUR AGREEMENT TO ASSUME ALL OF THE DEBTS AND
 
20  LIABILITIES OF THE LEGION?
 
21       A    WELL, I GOT OPERATING CONTROL OF THE AMERICAN
 
22  MERCURY.  I GOT ALL THE FILES OF THE LEGION, INCLUDING THE
 
23  ORIGINAL MINUTE BOOKS DATING BACK TO 1952, ALL OF THE
 
24  VALUABLE DOCUMENTS AND --
 
25       Q    DID YOU SECURE ANY?
 
26       A    AND THE MAILING LISTS.
 
27       Q    DID YOU SECURE ANY POSITION ON THE LEGION BOARD?
 
28       A    YES.
			
			

page 657
 
 
 
 1       Q    WHAT WAS YOUR POSITION?
 
 2       A    I WAS ON THE BOARD.  I WAS MADE A DIRECTOR.  AS I
 
 3  SAY, I WAS A MEMBER WITH THE POWER WITH THE OTHER MEMBERS TO
 
 4  APPOINT DIRECTORS.
 
 5       Q    AND WERE YOU — DID YOU RECEIVE ANY BENEFIT
 
 6  REGARDING YOUR STATUS AS AN INCORPORATOR?
 
 7       A    ANY BENEFIT?
 
 8       Q    WELL, WERE YOU NAMED INCORPORATOR?
 
 9       A    I WAS NAMED A SUBSTITUTE INCORPORATOR, WHICH BY
 
10  THE BYLAWS — THE CHARTER, I FORGET WHICH IS TANTAMOUNT, TO
 
11  SIMPLY KNOW THE NAME OF THE MEMBER WITH THE POWER TO APPOINT
 
12  DIRECTORS.
 
13       MR. MUSSELMAN:  OBJECTION.  WITHOUT FOUNDATION IN HIS
 
14  TESTIMONY THAT SOMEONE HAD POWER TO APPOINT HIM SUBSTITUTE
 
15  INCORPORATOR.
 
16       THE COURT:  HE’s GIVING HIS OPINION TO WHERE THE
 
17  AUTHORITY COMES FROM.  WHETHER I ACCEPT THAT OPINION OR NOT
 
18  IS STILL TO BE SEEN.
 
19
 
20  BY MR. LANE:
 
21       Q    DO YOU RECALL A LAWSUIT BROUGHT BY MR. MERMELSTEIN
 
22  IN CALIFORNIA AGAINST THE LEGION AND OTHERS?
 
23       A    INDEED THERE WERE TWO OF THEM, ACTUALLY THREE, I
 
24  THINK.
 
25       Q    WHAT WAS THE YEAR TIME FRAME?
 
26       A    I BELIEVE HIS FIRST LAWSUIT WAS ABOUT 1992, AND
 
27  THAT WAS LITIGATED FOR A NUMBER OF YEARS; AND FINALLY IT WAS
 
28  SETTLED.
			
			

page 658
 
 
 
 1       Q    1992?
 
 2       A    DID I SAY '92?
 
 3       Q    I THINK YOU DID.
 
 4       A    I WAS WRONG.  NO.  HIS FIRST LAWSUIT WAS ABOUT
 
 5  1982, EVEN 1981.  THAT WENT ON FOR A LONG TIME, WAS FINALLY
 
 6  SETTLED.  AND THEN HE SUED AGAIN, AND THAT ONE WAS WITH --
 
 7  WAS WHO WAS IN TRIAL WAS DISMISSED BY — BY JUDGE STEVEN
 
 8  LACKS IN SPITE OF ALL THE HARASSMENT HE GOT IN 1988 — 19 IN
 
 9  SEPTEMBER 19 — 1991.
 
10       Q    WHEN WAS THAT LAWSUIT BROUGHT?  I THINK YOU SAID
 
11  THAT WAS WHEN IT WAS DISMISSED BY JUDGE LACKS.  WHEN WAS IT
 
12  BROUGHT?
 
13       A    WELL, THAT WAS BROUGHT APPROXIMATELY 19-, I WOULD
 
14  SAY, 1987.
 
15       Q    WAS LIBERTY LOBBY A DEFENDANT IN THAT CASE AS
 
16  WELL?
 
17       A    YES.
 
18       Q    DID YOU REPRESENT LIBERTY LOBBY IN THAT CASE?
 
19       A    YES.
 
20       Q    WHO REPRESENTED THE LEGION IN THE LAWSUIT BROUGHT
 
21  IN 1987 FOR ALL THE DISCOVERY AND ALL OF THE ACTIVITY UP TO
 
22  THE DATE IT WAS DISMISSED SOME YEARS LATER?
 
23       A    WILLIAM HULSY.
 
24       Q    DID THE LEGION PAY MR. HULSY’s BILLS?
 
25       A    NO.
 
26       Q    WHY DID THE LEGION NOT PAY MR. HULSY’s BILLS?
 
27       A    THEY HAD NO MONEY.
 
28       Q    WHO PAID MR. HULSY’s BILLS FOR THAT CASE?
			
			

page 659
 
 
 
 1       A    PRIMARILY THE FOUNDATION TO DEFEND THE FIRST
 
 2  AMENDMENT, INCORPORATED.
 
 3       Q    DID THE LEGION CONSIDER THE MERMELSTEIN CASE TO BE
 
 4  AN IMPORTANT CASE, THE CASE WHICH BEGAN IN 1987?
 
 5       MR. MUSSELMAN:  OBJECTION.  VAGUE, DID THE LEGION.
 
 6  INSTITUTIONS DON'T BELIEVE THINGS.  PEOPLE DO.
 
 7       THE COURT:  I THINK HE WAS INTIMATELY INVOLVED WITH THE
 
 8  LEGION.  HE CAN TELL US WHETHER IT WAS OF IMPORTANCE TO THE
 
 9  LEGION OR NOT.  I REALIZE THEY DON'T HAVE FEELINGS EXCEPT
 
10  THROUGH THE MEMBERS.
 
11
 
12  BY MR. LANE:
 
13       Q    THAT MEANS YOU CAN ANSWER THE QUESTION,
 
14  MR. CARTO.
 
15       A    EVERYONE ASSOCIATED — EVERYONE ASSOCIATED WITH
 
16  THE LEGION, INCLUDING THE SUPPORTERS AND THE SUBSCRIBERS,
 
17  FELT THIS WAS OF EXTREME IMPORTANCE BECAUSE IF THE LEGION
 
18  HAD LOST, IT WOULD HAVE BEEN THE END OF THE LEGION.
 
19       Q    DURING THAT TRIAL WHO WAS PRESENT DURING — IN THE
 
20  COURTROOM?
 
21       A    WELL, MYSELF AND YOU.  YOU MEAN ON OUR SIDE OR ALL
 
22  SIDES?
 
23       Q    REPRESENTING ASSOCIATED WITH THE LEGION, NOT
 
24  REPRESENTING LIBERTY LOBBY.
 
25       A    AND MR. HULSY.  AND THEN THERE WAS A RESEARCHER
 
26  WHO AT THAT TIME WAS EMPLOYED BY THE LEGION BY THE NAME OF
 
27  TED O’Keefe.  I BELIEVE YOUR LEGAL SECRETARY WAS THERE,
 
28  MRS. TRISHA LANE.
			
			

page 660
 
 
 
 1       Q    WHO IS ALSO MY WIFE.
 
 2            DID THE LEGION PUBLISH ARTICLES OR STATEMENTS
 
 3  ABOUT THE TRIAL THAT WAS TAKING PLACE?
 
 4       A    YES, SIR.
 
 5       Q    DID THE LEGION CONDUCT FILMED INTERVIEWS WITH
 
 6  VARIOUS PERSONS BEFORE, DURING, AND AFTER THE TRIAL?
 
 7       MR. MUSSELMAN:  OBJECTION.  RELEVANCE.
 
 8       THE COURT:  WHAT IS THE RELEVANCE?
 
 9       MR. LANE:  I WANT TO SHOW HOW IMPORTANT IT WAS THAT
 
10  THEY COULDN'T AFFORD THE LAWYER.
 
11       THE COURT:  I'LL SUSTAIN THE OBJECTION.
 
12
 
13  BY MR. LANE:
 
14       Q    IN SPITE OF THE COMMITMENT BY THE LEGION TO THE
 
15  MERMELSTEIN CASE TO DEFEND HIMSELF, IS IT TRUE THAT THEY
 
16  WERE UNABLE TO PAY FOR A LAWYER TO REPRESENT THEM?
 
17       A    THAT’s ABSOLUTELY CORRECT.
 
18       Q    WHO ARRANGED FOR THE F.D.F.A. TO PAY MR. HULSY'S
 
19  SALARY?
 
20       A    I DID.
 
21       Q    WHO NEGOTIATED WITH MR. HULSY REGARDING THE
 
22  PAYMENT OF HIS SALARY?
 
23       A    I DID.
 
24       Q    WHEN DID YOU FIRST MEET MR. MARCELLUS?
 
25       A    OH, IT WOULD BE IN '79.
 
26       Q    UNDER WHAT CONDITIONS?
 
27       A    I RECALL HE WROTE A LETTER SEEKING EMPLOYMENT
 
28  GIVING HIS QUALIFICATIONS.
			
			

page 661
 
 
 
 1       Q    WHO DID HE WRITE TO?
 
 2       A    WELL, HE WROTE TO THE INSTITUTE FOR HISTORICAL
 
 3  REVIEW.
 
 4       Q    WHEN DID YOU MEET HIM?  AFTER THE LETTER WAS SENT?
 
 5       A    WELL, SHORTLY THEREAFTER.  HE SEEMED LIKE HE HAD
 
 6  QUALIFICATIONS.  WITHIN A MATTER OF A COUPLE OF WEEKS AT THE
 
 7  MOST.
 
 8       Q    AND WAS HE HIRED?
 
 9       A    YES.
 
10       Q    WHO HIRED HIM?
 
11       A    I DID.
 
12       Q    WHAT WAS HIS JOB AT THE LEGION?
 
13       A    WELL, AT THAT TIME HE WAS THE ASSISTANT DIRECTOR.
 
14  HIS JOB WAS CORRESPONDENCE AND ASSISTANCE IN THE
 
15  MANUFACTURING OF BOOKS, PROOFREADING OR COPY READ AND
 
16  PROOFREADING, BOTH, AND WRAPPING, PACKAGING, HANDLING
 
17  ORDERS, MAKING DELIVERIES.
 
18       Q    WHAT WAS HIS SALARY?
 
19       A    I DON'T RECALL.  I'M SORRY.  THERE IS AN
 
20  EMPLOYMENT CONTRACT I COULD FIND VERY EASILY.
 
21       Q    ARE YOU FAMILIAR WITH THE CHARTER OF THE LEGION
 
22  FOR THE SURVIVAL OF FREEDOM?
 
23       A    YES, SIR.
 
24       Q    I'M GOING TO SHOW YOU EXHIBIT 1.  ASK YOU HAVE YOU
 
25  EVER SEEN THAT BEFORE?
 
26       A    YES.
 
27       Q    WHAT IS THAT?
 
28       A    WELL, THIS IS A, I GUESS YOU MIGHT CALL IT, A
			
			

page 662
 
 
 
 1  BLUEPRINT, BUT IT’s BLACK, A COPY OF THE CHARTER.
 
 2       Q    AND WITHOUT GOING INTO THE SPECIFIC POLITICAL
 
 3  POSITION ITSELF THAT THE LEGION MIGHT TAKE, WHAT DOES THE
 
 4  CHARTER FOR THE LEGION DO?
 
 5       MR. MUSSELMAN:  OBJECTION.  CALLING FOR HIM TO RECITE
 
 6  THE DOCUMENT.  THE DOCUMENT IS THE BEST EVIDENCE.  THAT WAS
 
 7  THE ONLY QUESTION IS WHAT DOES IT SAY.
 
 8       THE COURT:  I SUSTAIN IT.  IF IT’s DIFFERENT FROM WHAT
 
 9  THE DOCUMENT SAYS, THEN I'LL HEAR ABOUT IT.
 
10
 
11  BY MR. LANE:
 
12       Q    DON'T READ THE DOCUMENT.  WHAT DOES THE LEGION'S
 
13  CHARTER CALL FOR IT TO DO?  WHAT WAS YOUR UNDERSTANDING AS
 
14  TO WHAT THE LEGION WAS SUPPOSED TO DO?
 
15       A    THE LEGION WAS ORIGINALLY ESTABLISHED BY MR. AND
 
16  MRS. MATTHEWS FOR PURPOSES OF PUBLICITY.  THEY WERE BOTH
 
17  SPEAKERS, AND THEY CONCEIVED THE IDEA OF, MORE OR LESS, A
 
18  PUBLIC RELATIONS AGENCY THAT WOULD OPERATE IN THE MEDIA,
 
19  SPECIFICALLY IN RADIO — THEY HAD A RADIO SHOW — AND
 
20  PROPAGATE IDEALS OF AMERICANISM.  AND ALL THIS WAS LAID OUT
 
21  IN PARAGRAPH 2.
 
22       Q    DOES THE — WAS IT YOUR UNDERSTANDING THAT ONE OF
 
23  THE RESPONSIBILITIES OF THE LEGION WAS TO UTILIZE RADIO
 
24  STATIONS, PROGRAMS, ETC., TO PRESENT THE VIEW OF THE LEGION?
 
25       A    THAT WAS REALLY THEIR MAIN — THEIR MAIN EFFORT
 
26  THAT THEY BEGAN THE LEGION FOR IN ORDER TO GIVE IT SOME
 
27  SHAPE AND BOTH, AS I SAY, BOTH MR. AND MRS. MATTHEWS WERE
 
28  EXPERIENCED SPEAKERS, AS WELL AS WRITERS, AND OFTEN APPEARED
			
			

page 663
 
 
 
 1  ON RADIO AND TELEVISION.  THAT WAS THE PURPOSE, THE ORIGINAL
 
 2  PURPOSE OF THE LEGION.  STILL IS.
 
 3       Q    DURING THE FIRST YEARS WHEN YOU WERE ASSOCIATED
 
 4  WITH THE LEGION, WAS IT POSSIBLE FOR YOU TO PROMOTE THE
 
 5  VIEWS OF THE LEGION THROUGH RADIO?
 
 6       A    NO.
 
 7       Q    WHEN DID IT FIRST BECOME POSSIBLE TO DO THAT?
 
 8       A    WELL, I HAD BEEN TALKING WITH VARIOUS PEOPLE,
 
 9  NAMELY, TOM VALENTINE, WHO WAS A RADIO PERSONALITY.  I WOULD
 
10  SAY BEGINNING 19 — ABOUT 1986.
 
11       Q    NOW WHEN DID YOU FIRST MEET MR. HULSY?
 
12       A    WELL, THAT WAS DURING THE COURSE OF THE SECOND
 
13  MERMELSTEIN ATTACK.
 
14       Q    YOU MEAN LAWSUIT?
 
15       A    YES.  AND THAT WOULD HAVE BEEN 19 — MAYBE '86,
 
16  SOMETHING LIKE THAT.  '87.
 
17       Q    HOW LONG DID YOU MEET HIM BEFORE HE WAS RETAINED
 
18  TO BE COUNSEL FOR THE LEGION?
 
19       A    WELL, I WENT OVER TO HIS OFFICE HAVING BEEN
 
20  RECOMMENDED BY A THIRD PARTY, AND I TOOK MR. MARCELLUS WITH
 
21  ME.  WE DISCUSSED THE TERMS, WHICH WERE AGREED TO, AND HE
 
22  WAS HIRED IMMEDIATELY.
 
23       Q    SO YOU MET HIM IN CONJUNCTION WITH THE MERMELSTEIN
 
24  LITIGATION; IS THAT RIGHT?
 
25       A    YES.
 
26       Q    DID THERE COME A TIME DURING THAT LITIGATION WHEN
 
27  MR. HULSY RAISED WITH YOU THE QUESTION OF THE FARREL ESTATE?
 
28       MR. MUSSELMAN:  OBJECTION.  HEARSAY WHAT MR. HULSY SAID
			
			

page 664
 
 
 
 1  OUT OF COURT.
 
 2       MR. LANE:  COUNSEL FOR THE LEGION, YOUR HONOR.
 
 3       THE COURT:  OVERRULED.
 
 4       THE WITNESS:  THAT WAS DURING, I THINK — I THINK IT
 
 5  WAS ONE DAY PRIOR TO THE END WHEN WE WERE — WHEN
 
 6  MERMELSTEIN’s CASE WAS FUNDAMENTALLY THROWN OUT OF COURT.
 
 7
 
 8  BY MR. LANE:
 
 9       Q    WHAT YEAR WAS THAT?
 
10       A    WASN'T IT 1991, SEPTEMBER 18, 1991?
 
11       Q    YOU CAN'T ASK ME.  BESIDES, I DON'T REMEMBER.
 
12            WHAT DID MR. HULSY SAY?
 
13       A    WELL, HE LITERALLY IMPORTUNED ME.
 
14       MR. MUSSELMAN:  SAME OBJECTION, YOUR HONOR.
 
15       THE COURT:  SAME RULING.
 
16       THE WITNESS:  PARDON?
 
17       THE COURT:  GO AHEAD.
 
18       THE WITNESS:  AND ASKED ME REPEATEDLY TO TELL HIM HOW
 
19  MUCH MONEY WAS RECOVERED FROM THE FARREL ASSETS, OR HE USED
 
20  THE WORD “ESTATE."
 
21
 
22  BY MR. LANE:
 
23       Q    WAS THAT AN ISSUE IN THE CASE AT THAT POINT?
 
24       A    NO.  IT HAD NOTHING TO DO WHATSOEVER WITH IT.
 
25       Q    WAS ANYONE PRESENT WHEN HE ASKED THE QUESTIONS?
 
26       A    YES.
 
27       Q    WHO WAS PRESENT?
 
28       A    YOU WERE.  MR. LANE WAS AND THERE WAS MR. MIKE
			
			

page 665
 
 
 
 1  PIPER, WHO WAS — WHO WAS IN BACK OF US.
 
 2       Q    HOW MANY TIMES DID MR. HULSY ASK THAT QUESTION OF
 
 3  YOU?
 
 4       A    AT LEAST THREE TIMES.
 
 5       Q    AND DID YOU FINALLY ANSWER HIM?
 
 6       A    I DID.
 
 7       Q    WHAT DID YOU FINALLY SAY?
 
 8       MR. MUSSELMAN:  OBJECTION, MR. CARTO.  OUT-OF-COURT
 
 9  STATEMENT IS HEARSAY.  THEY'RE THE ONES TRYING TO GET IT
 
10  INTO EVIDENCE.
 
11       THE COURT:  IT’s PROBABLY HEARSAY.  IS IT FOR THE TRUTH
 
12  OF THE MATTER?
 
13       MR. LANE:  THIS IS INFORMATION GIVEN TO THE LEGION'S
 
14  COUNSEL ABOUT THE ESTATE.
 
15       MR. MUSSELMAN:  HE TESTIFIED HE HIRED HIM.
 
16       THE COURT:  IT CAN STILL BE HEARSAY.  I'M GOING TO
 
17  OVERRULE THE OBJECTION.  I'M NOT SO SURE IT’s FOR THE TRUTH
 
18  OF THE MATTER BUT TO SHOW WHY MAYBE YOU WOULD DO SOMETHING
 
19  ELSE.  STATE OF MIND, REALLY.
 
20
 
21  BY MR. LANE:
 
22       Q    YOU CAN ANSWER THE QUESTION, IF YOU REMEMBER IT.
 
23       A    WELL, I FINALLY FIGURED THAT SINCE HE WAS COUNSEL
 
24  FOR THE LEGION, I SHOULD BE SQUARE WITH HIM.
 
25       MR. MUSSELMAN:  OBJECTION.
 
26       THE WITNESS:  AND TELL HIM, SO I DID.
 
27
 
28
			
			

page 666
 
 
 
 1  BY MR. LANE:
 
 2       Q    WHAT DID YOU TELL HIM?
 
 3       A    ABOUT THREE AND A HALF MILLION DOLLARS.
 
 4       Q    THEREAFTER DID MR. HULSY WORKING WITH
 
 5  MR. MARCELLUS AND MR. O’Keefe BRING ABOUT WHAT MR. HULSY
 
 6  DESCRIBED AS A COUP D'ETAT?
 
 7       MR. MUSSELMAN:  OBJECTION.  LEADING.
 
 8       THE COURT:  SUSTAINED.
 
 9  BY MR. LANE:
 
10       Q    DID THEREAFTER — WHAT DID MR. HULSY TAKE, IF
 
11  ANY --
 
12       MR. MUSSELMAN:  AS TO TIME.
 
13       THE COURT:  I KNOW IT’s AFTER 1991, SO OVERRULED AFTER
 
14  HE SAID IT WAS WORTH ABOUT THREE AND A HALF MILLION.
 
15
 
16  BY MR. LANE:
 
17       Q    YES.
 
18       A    IN CONJUNCTION WITH FOUR EMPLOYEES OF THE LEGION,
 
19  MR. HULSY AT THE SAME TIME THAT HE WAS COUNSEL FOR THE
 
20  LEGITIMATE BOARD OF DIRECTORS SOLICITED THEM.  EACH OF THEM
 
21  PAID HIM $200.
 
22       MR. MUSSELMAN:  OBJECTION.  WITHOUT FOUNDATION OF THIS
 
23  WITNESS’s KNOWLEDGE.
 
24       THE COURT:  SUSTAINED.
 
25       THE WITNESS:  WHAT WAS THE QUESTION?  I'M SORRY.
 
26       MR. LANE:  THERE’s BEEN TESTIMONY ABOUT THIS, YOUR
 
27  HONOR.  I DON'T THINK THAT IT IS WITHOUT FOUNDATION.  I
 
28  THINK MR. HULSY HAS TESTIFIED ABOUT THIS.
			
			

page 667
 
 
 
 1       MR. MUSSELMAN:  HE’s REPEATING SOMEONE’s ELSE'S
 
 2  TESTIMONY.  HEARSAY.
 
 3       THE COURT:  SUSTAINED.
 
 4
 
 5  BY MR. LANE:
 
 6       Q    WHAT DID MR. HULSY DO, IF ANYTHING, AFTER YOU TOLD
 
 7  HIM THAT THERE WAS THREE AND A HALF MILLION DOLLARS?
 
 8       A    MR. HULSY HASTENED TO FORM A CONSPIRACY.
 
 9       MR. MUSSELMAN:  SAME OBJECTION.
 
10       THE COURT:  OVERRULED.  I'LL LET THE WITNESS TESTIFY AS
 
11  TO WHAT HIS OPINION AS TO MR. HULSY DID, AND IT’s NOT
 
12  HEARSAY.  IT’s JUST WHAT HE — SOMETHING IS BEING SAID.
 
13       THE WITNESS:  WRITING DOCUMENTS FOR THEM, MAKING
 
14  INVESTIGATIONS, PREPARING A REPORT FOR THEM AND LITERALLY
 
15  LEADING AN EXERCISE, WHICH HE HIMSELF DESCRIBED AS A QUOTE
 
16  COUP D'ETAT, UNQUOTE.
 
17
 
18  BY MR. LANE:
 
19       Q    DID MR. HULSY PARTICIPATE IN WRITING THE LETTERS
 
20  TO LAVONNE AND LEWIS FURR, WHICH WE DISCUSSED THE OTHER DAY
 
21  IN THIS COURTROOM?
 
22       A    INDEED HE DID.
 
23       MR. MUSSELMAN:  OBJECTION.  VAGUE.  SO MANY LETTERS
 
24  FROM SO MANY PEOPLE.
 
25
 
26  BY MR. LANE:
 
27       Q    I'LL GO THROUGH THEM.
 
28       MR. MUSSELMAN:  NO EXHIBIT REFERENCES.
			
			

page 668
 
 
 
 1       THE COURT:  SUSTAINED.
 
 2       MR. LANE:  MAY I HAVE EXHIBITS 194?
 
 3
 
 4  BY MR. LANE:
 
 5       Q    WOULD YOU LOOK AT 194?
 
 6       THE COURT:  THAT MUST BE SOMEBODY ELSE'S.  IT’s NOT
 
 7  MINE.
 
 8
 
 9  BY MR. LANE:
 
10       Q    I'M GOING TO SHOW YOU EXHIBIT 195.  EXHIBIT 195,
 
11  WHO WROTE THAT?
 
12       MR. MUSSELMAN:  DOES COUNSEL HAVE COPIES FOR
 
13  PLAINTIFF’s COUNSEL?
 
14       MR. LANE:  IT’s IN EVIDENCE.
 
15       MR. MUSSELMAN:  I THINK IF THEY WANT TO SUBMIT A
 
16  DOCUMENT, THEY SHOULD PROVIDE A COPY.
 
17       THE COURT:  THEY SHOULD HAVE.
 
18       MR. WAIER:  I SUBMITTED TO MR. BEUGELMANS — THE VERY
 
19  DAY WHEN YOU ASKED ME TO SUBMIT ALL OF OUR DOCUMENTS, I
 
20  SUBMITTED THOSE DOCUMENTS.
 
21       MR. MUSSELMAN:  I HAVE THEIR EXHIBITS.  IT DOESN'T
 
22  INCLUDE ANYTHING ABOVE NUMBER 17 --
 
23       MR. WAIER:  I PROVIDED TWO STACKS OF DOCUMENTS TO
 
24  MR. BEUGELMANS.  HE ADMITTED YESTERDAY HE RECEIVED THEM.
 
25       THE COURT:  DON'T ARGUE AMONG EACH OTHER, COUNSEL.  YOU
 
26  CAN COME UP AND LOOK AT WHAT HE’s LOOKING AT.
 
27       MR. MUSSELMAN:  I NEED TO SEE THEM AS HE ASKED --
 
28  RATHER THAN A BUNCH OF DOCUMENTS.  HE’s ASKING ABOUT 194.
			
			

page 669
 
 
 
 1  THAT’s THE ONE I NEED TO SEE.  I HAVEN'T SEEN THAT.  THAT'S
 
 2  195.
 
 3       MR. LANE:  I ASKED ABOUT 195.
 
 4       MR. MUSSELMAN:  VERY WELL.
 
 5
 
 6  BY MR. LANE:
 
 7       Q    A MOMENT AGO I ASKED YOU ABOUT WHETHER OR NOT
 
 8  MR. HULSY PARTICIPATED IN PREPARING DOCUMENTS, WHICH WERE
 
 9  SENT TO THE FURRS.  OBJECTION WASN'T SPECIFIC ENOUGH.  I'M
 
10  TALKING ABOUT EXHIBIT 195, 196, 197, 198 AND 199.  ARE THOSE
 
11  THE DOCUMENTS YOU REFERRED TO?
 
12       MR. MUSSELMAN:  WITHOUT FOUNDATION.  THIS WITNESS
 
13  TESTIFIED THAT MR. HULSY PREPARED THE DOCUMENTS.
 
14       THE COURT:  HE CAN TELL US WHAT HE KNOWS ABOUT WHO
 
15  PREPARED THEM AND WHY HE KNOWS THAT.
 
16
 
17  BY MR. LANE:
 
18       Q    MR. HULSY TELL YOU HE PREPARED THE DOCUMENTS?
 
19       A    NO.
 
20       Q    DID MR. HULSY EVER TELL YOU HE SENT DOCUMENTS TO
 
21  LAVONNE FURR?
 
22       A    OH, INDEED HE DID.  I SEEN LETTERS THAT HE HAD
 
23  SENT MR. AND MRS. FURR.  THEY AREN'T AMONG THESE,
 
24  UNFORTUNATELY.
 
25       Q    DID MR. HULSY EVER TELL YOU DURING THE DEPOSITION
 
26  ABOUT WHY HE SENT THE DOCUMENTS TO THE FURRS?
 
27       A    I THINK THE DOCUMENTS — THE LETTERS SPOKE FOR
 
28  THEMSELVES.  THEY WERE IN AN ATTEMPT TO FRIGHTEN THE FURRS.
			
			

page 670
 
 
 
 1       MR. MUSSELMAN:  OBJECTION.  REPEATING AN OUT-OF-COURT
 
 2  DOCUMENT.
 
 3       THE COURT:  IT’s NONRESPONSIVE.  SUSTAINED.
 
 4
 
 5  BY MR. LANE:
 
 6       Q    NOW WHEN DID YOU FIRST MEET MARK WEBER?
 
 7       A    WELL, I'M NOT SURE WHEN THAT WOULD HAVE BEEN.  I
 
 8  DIDN'T MEET HIM PERSONALLY.  LET’s SAY I KNEW HIM BY
 
 9  CORRESPONDENCE PRIOR TO MEETING HIM PERSONALLY.
 
10       Q    DID YOU HIRE MR. WEBER?
 
11       A    YES.
 
12       Q    AND WHAT WAS HIS JOB WHEN HE WAS HIRED?
 
13       A    HE WAS HIRED IN 1991 TO BE — HE WAS PRESUMPTIVE
 
14  EDITOR OF THE JOURNAL OF HISTORICAL REVIEW, BUT HE WAS ALSO
 
15  HIRED TO WRITE LETTERS, PUBLIC RELATION PURPOSES.
 
16       Q    DO YOU RECALL WHAT HIS SALARY WAS?
 
17       A    NO, SIR.  IT WAS MORE THAN HE EVER MADE BEFORE.
 
18       Q    DID YOU HIRE — DID YOU KNOW A PERSON NAMED TED
 
19  O’Keefe?
 
20       A    YES.
 
21       Q    DID YOU HIRE HIM?
 
22       A    YES.
 
23       Q    WHAT WAS HIS BACKGROUND BEFORE YOU HIRED HIM?
 
24       A    WELL, TED HAD — HE WAS A — HE ATTENDED HARVARD
 
25  FOR A NUMBER OF YEARS.  HE WAS HISTORIAN.  HE WAS A
 
26  LINGUIST.  HE WAS A WRITER.  BUT I DON'T THINK HE HAD A
 
27  STEADY JOB UNTIL I HIRED HIM.
 
28       Q    DID YOU KNOW GREG RAVEN?
			
			

page 671
 
 
 
 1       A    NO, NOT PRIOR TO HIS BEING HIRED.
 
 2       Q    DURING WAS MR. — WHEN DID MR. WEBER TO YOUR
 
 3  KNOWLEDGE BECOME AN OFFICER OR DIRECTOR OR HAVE SOME
 
 4  AUTHORITY WITH THE LEGION OTHER THAN AS AN EMPLOYEE?
 
 5       A    PRIOR TO HIS BEING HIRED I ASKED IF HE WOULD WANT
 
 6  TO BE ON THE BOARD OF DIRECTORS OF THE LEGION.  I GUESS THAT
 
 7  WAS '85, AND HE ASSENTED, AND SO WE KEPT HIM FOR ONE YEAR,
 
 8  AND HE WAS NOT NOMINATED FOR THE SUBSEQUENT YEAR.
 
 9       Q    WHO ASSIGNED DUTIES TO THE EMPLOYEES?  YOU
 
10  TESTIFIED ABOUT THAT.  MR. MARCELLUS, WEBER AND O’Keefe?
 
11       A    WHO ASSIGNED THE DUTIES?
 
12       Q    YES.
 
13       A    I DID.
 
14       Q    DID YOU DISCUSS THAT WITH ANYONE ON THE BOARD?
 
15       A    NOT — I DISCUSSED IT WITH MR. AND MRS. FURR, OF
 
16  COURSE, BUT MAINLY WITH MRS. FURR IN HER CAPACITY AS THE
 
17  OTHER MEMBER OF THE CORPORATION.
 
18       Q    HOW LONG TO YOUR KNOWLEDGE HAD MRS. FURR BEEN
 
19  ASSOCIATED WITH THE LEGION?
 
20       A    SINCE APPROXIMATELY 195- — PROBABLY ABOUT 1958,
 
21  '59.
 
22       Q    HOW LONG?
 
23       A    YES.  THAT’s RIGHT.  PARDON.
 
24       Q    HOW LONG DID MR. FURR BEEN ASSOCIATED WITH THE
 
25  LEGION?
 
26       A    WELL, THE SAME LENGTH OF TIME.
 
27       Q    DURING THE TIME THAT YOU WERE ASSOCIATED WITH THE
 
28  LEGION, WHILE MR. AND MRS. FURR WAS ASSOCIATED WITH THE
			
			

page 672
 
 
 
 1  LEGION, WHAT WAS THE POSITIONS, THE FURRS AND THE LEGION?
 
 2       A    WELL, THEY WERE ON THE BOARD FROM ABOUT 1965, OR
 
 3  AT LEAST SHE WAS.  I THINK HE CAME ON MAYBE A YEAR OR TWO
 
 4  AFTER THEN.
 
 5       Q    HOW LONG DID THEY REMAIN ON THE BOARD?
 
 6       A    ALL THE WAY THROUGH.
 
 7       Q    UNTIL WHEN?
 
 8       A    THEY STILL ARE.
 
 9       Q    THERE’s A CONFLICT BETWEEN THE TWO GROUPS HERE,
 
10  BUT I'M TALKING ABOUT THE BOARD WHICH IS BRINGING THE
 
11  LAWSUIT.  ARE THEY ON THAT BOARD?
 
12       A    OH, NO.
 
13       Q    WHEN DID THEY LEAVE THE LEGION?
 
14       A    THEY WERE FORCED OFF BY THREATS BY THE
 
15  CONSPIRATORS IN SEPTEMBER 1993.
 
16       MR. MUSSELMAN:  OBJECTION TO THE FIRST PART OF THE
 
17  STATEMENT.  BEYOND THE SCOPE.
 
18       THE COURT:  IT’s NONRESPONSIVE.  SUSTAINED.
 
19
 
20  BY MR. LANE:
 
21       Q    WHY DID THEY LEAVE THE BOARD?
 
22       A    BECAUSE THEY WERE TOLD BY --
 
23       MR. MUSSELMAN:  OBJECTION.  CALLS FOR HEARSAY.
 
24       THE COURT:  I THINK IT’s REALLY AN OPINION AND BY
 
25  SOMEONE WHO CLAIMS THAT HE IS THE LEGION.  OVERRULED.
 
26
 
27  BY MR. LANE:
 
28       Q    YOU CAN ANSWER THE QUESTION, MR. CARTO.
			
			

page 673
 
 
 
 1       A    YOU SAY WHY DID THEY LEAVE THE BOARD?
 
 2       Q    YES.
 
 3       A    BECAUSE THEY BEGAN RECEIVING TELEPHONE CALLS AND
 
 4  TELEPHONE — WHICH IS NOT DENIED FROM TOM MARCELLUS, MARK
 
 5  WEBER, GREG RAVEN, TED O’Keefe AND WILLIAM HULSY, WHO TOLD
 
 6  THEM IF THEY --
 
 7       MR. MUSSELMAN:  SAME OBJECTION.  HEARSAY.
 
 8       THE COURT:  OVERRULED.
 
 9       THE WITNESS:  WHO TOLD THEM, AS THE EVIDENCE SHOWS,
 
10  THAT IF THEY DID NOT MAKE A RADICAL CHANGE IN THE BOARD,
 
11  NAMELY, BY LETTING THEM TAKE OVER, THEY WOULD BE GUILTY OF
 
12  VERY DIRE CONSEQUENCES.  COULD EVEN GO TO JAIL.
 
13
 
14  BY MR. LANE:
 
15       Q    DID ALL THIS CONTACT TAKE PLACE AFTER MR. HULSY
 
16  WAS TOLD THERE WAS THREE AND A HALF MILLION DOLLARS THAT HAD
 
17  BEEN RECOVERED?
 
18       A    CERTAINLY DID.
 
19       Q    FOLLOWING THE DEATH OF MRS. FARREL?
 
20       A    YES, SIR.  WHEN THERE WAS NO MONEY, EVERYTHING WAS
 
21  GOING FINE.
 
22       MR. MUSSELMAN:  OBJECTION.  MOVE TO STRIKE.
 
23       THE COURT:  SUSTAINED.
 
24
 
25  BY MR. LANE:
 
26       Q    HOW WERE THINGS GOING WHEN THERE WAS NO MONEY,
 
27  MR. CARTO?
 
28       A    EVERYTHING WAS GOING FINE.  THE INSTITUTE FOR
			
			

page 674
 
 
 
 1  HISTORICAL REVIEW, WHICH I AM THE FOUNDER, HAD BECOME
 
 2  WELL-KNOWN THROUGHOUT THE WORLD IN ITS FIELD, CERTAINLY
 
 3  CONTROVERSIAL, BUT IT WAS RESPECTED.
 
 4            THE QUARTERLY JOURNAL, THE JOURNAL OF HISTORICAL
 
 5  REVIEW, WAS PUBLISHED REGULARLY EXCEPT FOR A LAPSE AFTER THE
 
 6  ARSON OF JULY 4, 1984 THAT TOTALLY DESTROYED THE INSTITUTE
 
 7  EXCEPT FOR A FEW BOOKS, AND THERE WERE OTHER LOCATIONS.  IT
 
 8  WAS GAINING IN SUPPORT.  IT WAS RESPECTED, AND IT HAD — IT
 
 9  WAS RECOGNIZED AS A SCHOLARLY APPROACH TO SOME VERY
 
10  CONTROVERSIAL SUBJECTS IN HISTORY.
 
11       Q    YOU HEARD SOME TESTIMONY, I THINK, HERE ABOUT THE
 
12  MERGER BETWEEN THE LEGION FOR THE SURVIVAL OF FREEDOM WITH
 
13  THE COMMITTEE FOR RELIGIOUS DEVELOPMENT.
 
14            ARE YOU FAMILIAR WITH THAT TESTIMONY?
 
15       A    YES.
 
16       Q    ARE YOU FAMILIAR WITH THE FACTS?
 
17       A    YES.
 
18       Q    TELL US ABOUT THE FACTS.  WAS THERE A MERGER?
 
19       A    YES.
 
20       Q    WHAT WAS THE BASIS OF THAT?
 
21       A    THE COMMITTEE FOR RELIGIOUS DEVELOPMENT WAS
 
22  ANOTHER NONPROFIT CORPORATION THAT HAPPENED TO HAVE SOME
 
23  PROPERTY — I MEAN, BOOKS, INVENTORY OF BOOKS, AS I RECALL.
 
24  AND SO IT WAS MERGED INTO THE LEGION.  IT’s MINUTIAE.
 
25       Q    WERE YOU ACTING AS AN AGENT FOR THE LEGION WHEN
 
26  THAT MERGER TOOK PLACE?
 
27       A    YES, SIR.
 
28       Q    WHEN WAS THAT, DO YOU KNOW?
			
			

page 675
 
 
 
 1       A    I WOULD SAY THAT WAS PROBABLY ABOUT 1968, '69,
 
 2  SOMETHING LIKE THAT.
 
 3       Q    AND WHAT WAS THE AGREEMENT ABOUT THE BYLAWS OF THE
 
 4  LEGION AT THAT TIME?  WERE THEY TO BE CHANGED?
 
 5       A    MR. LANE, AS I RECALL, I DON'T KNOW THAT IT HAD
 
 6  ANYTHING TO DO WITH IT AT THE TIME.
 
 7       Q    DID THE LEGION ADOPT AND ACCEPT INTO IT THE
 
 8  COMMITTEE FOR RELIGIOUS DEVELOPMENT?
 
 9       A    YES.  IT WAS VERY BENEFICIAL FOR THE LEGION.
 
10       MR. MUSSELMAN:  NO QUESTION PENDING, YOUR HONOR.
 
11       THE COURT:  SUSTAINED.
 
12
 
13  BY MR. LANE:
 
14       Q    DID THE NAME OF THE LEGION FOR THE SURVIVAL OF
 
15  FREEDOM CHANGE WHEN IT ADOPTED THE PROPERTY OF THE COMMITTEE
 
16  FOR RELIGIOUS DEVELOPMENT?
 
17       A    NO, SIR.
 
18       Q    NOW WERE YOU EVER AN OFFICER OF THE LEGION OR
 
19  MEMBER OF THE BOARD OF DIRECTORS?
 
20       MR. MUSSELMAN:  COMPOUND.
 
21       MR. LANE:  I THINK HE CAN FIGURE IT OUT, YOUR HONOR.
 
22       THE COURT:  OVERRULED.
 
23       THE WITNESS:  YES.
 
24
 
25  BY MR. LANE:
 
26       Q    WHICH WERE YOU?
 
27       A    WELL, I WAS, AS I MENTIONED, I'VE BEEN A MEMBER
 
28  OF — A VOTING MEMBER OR A SUBSTITUTE INCORPORATOR SINCE
			
			

page 676
 
 
 
 1  1966.  I ALSO JOINED THE BOARD OF DIRECTORS AT THAT TIME AND
 
 2  MAINTAINED THAT POSITION FOR A COUPLE OF YEARS.  BUT I WAS,
 
 3  AS I RECALL, I WAS NOT A MEMBER.  I'M SORRY.  I WAS NOT AN
 
 4  OFFICER AND NEVER HAVE BEEN AN OFFICER UNTIL JUST LAST YEAR
 
 5  WHEN I WAS — WHEN THE MEMBERS HELD ANOTHER MEETING, VOTED
 
 6  MYSELF AND LAVONNE AND MRS. CARTO AS DIRECTORS AND OFFICERS,
 
 7  AND I'M NOT PRESIDENT OF THE LEGION FOR THE SURVIVAL OF
 
 8  FREEDOM.
 
 9       Q    HAVE YOU EVER IN THE PAST SOUGHT TO MAKE PUBLIC
 
10  YOUR CLOSE WORKING RELATIONSHIP WITH THE LEGION?
 
11       A    NO.
 
12       Q    WHY?
 
13       A    WELL, THERE WERE SOME VERY, VERY GOOD REASONS.
 
14       Q    WE'LL, WE WILL JUDGE THAT.  YOU JUST TELL US THE
 
15  REASONS, MR. CARTO.
 
16       A    BECAUSE OF MY RATHER PUBLIC POSITION WITH LIBERTY
 
17  LOBBY, WHICH IS A POLITICAL ORGANIZATION, AND IS ACTIVELY
 
18  PURSUING THE ACTIVITIES IN ACCORDANCE WITH THE NAME, A
 
19  LOBBY.  IT MAINTAINED CONSTANT CONTACT WITH CONGRESSMEN AND
 
20  SENATORS, TESTIFIED BEFORE CONGRESS, PUBLISHES A WEEKLY
 
21  NEWSPAPER, HAS A BUILDING ACROSS FROM THE LIBRARY OF
 
22  CONGRESS TWO BLOCKS FROM THE SUPREME COURT, TWO BLOCKS FROM
 
23  THE HOUSE OFFICE BUILDING AND THE NATIONAL CAPITOL.
 
24            IT WAS HIGHLY INADVISABLE FOR ME TO BECOME
 
25  PERSONALLY ASSOCIATED WITH ANOTHER ORGANIZATION WHO ALTHOUGH
 
26  CERTAINLY ESPOUSING THE SAME BASIC VIEW, THAT IS, FREEDOM OF
 
27  SPEECH, THE FIRST AMENDMENT, STILL WAS CONCENTRATING ON
 
28  CONTROVERSIAL HISTORICAL QUESTIONS THAT HAD ABSOLUTELY
			
			

page 677
 
 
 
 1  NOTHING TO DO WITH POLITICS.
 
 2            IT WAS OBVIOUS THAT SHOULD I BECOME PUBLIC IN MY
 
 3  ASSOCIATION WITH THE INSTITUTE OTHER THAN JUST GIVING IT MY
 
 4  PERSONAL APPROVAL, WHICH I DID, AND OF COURSE MANY, MANY,
 
 5  MANY THOUSANDS OF HOURS OF VOLUNTEER HELP, WHY THIS WOULD BE
 
 6  DEFINITELY CONTRARY TO THE INTERESTS OF LIBERTY LOBBY AS
 
 7  WELL AS TO THE INSTITUTE, OBVIOUSLY TO LIBERTY LOBBY.
 
 8            LIBERTY LOBBY HAD NOTHING, DID NOT GET INTO
 
 9  THESE — INTO EDUCATION AND THE FIELD OF HISTORY.  AND ALSO
 
10  CONTRARY TO THE INTERESTS OF THE LEGION FOR THE SURVIVAL OF
 
11  FREEDOM AND THE INSTITUTE FOR HISTORICAL REVIEW BECAUSE MANY
 
12  OF THE SUPPORTERS, MANY OF THE SUPPORTERS OF THE INSTITUTE
 
13  WERE NOT, YOU MIGHT SAY, CONSERVATIVE IN THEIR OUTLOOK.  WE
 
14  HAD SOME SOCIALISTS, SOME ANARCHISTS WHO HAVE BEEN
 
15  SUPPORTING THE HISTORICAL INSTITUTE FOR REVIEW.  FOR
 
16  EXAMPLE, ROBERT FORSANS (PHONETICS) OF FRANCE WOULD NOT BE
 
17  CONSIDERED CONSERVATIVE.  HE DIDN'T WANT TO GET MIXED UP
 
18  WITH LIBERTY LOBBY FOR THAT REASON.  I MADE IT MY POLICY TO
 
19  MAINTAIN A PERSONAL DISTANCE BETWEEN MY — BETWEEN MYSELF
 
20  AND THE INSTITUTE.
 
21       Q    WAS THAT A PERSONAL DISTANCE WHICH YOU MAINTAINED,
 
22  OR WAS IT PERSONAL DISTANCE WHICH YOU MAINTAINED PUBLICLY?
 
23       A    I'M SORRY, SIR.  I DON'T UNDERSTAND.
 
24       Q    WERE YOU DISTANT FROM THE LEGION, OR WERE YOU
 
25  TAKING THE POSITION PUBLICLY OF DISTANCE?
 
26       A    WELL, I MEAN, TAKING A POSITION PUBLICLY, NO. I
 
27  WAS HARDLY DISTANT FROM THE LEGION IN THAT WHEN I WAS IN
 
28  CALIFORNIA I WOULD GO TO THE OFFICES AT LEAST ONCE A WEEK
			
			

page 678
 
 
 
 1  WHERE I HAD AN OFFICE.  OF COURSE MRS. CARTO SPENT UNCOUNTED
 
 2  HOURS ALSO VOLUNTEERING THERE, AND WITHOUT HER VOLUNTEER
 
 3  HELP AND WITHOUT MINE, IT’s INCONCEIVABLE THAT THE LEGION
 
 4  COULD HAVE EXISTED.  I WAS THE ONE THAT RAISED THE MONEY.  I
 
 5  WAS THE ONE THAT GAVE THE DIRECTION.  I WAS THE ONE THAT
 
 6  HIRED PEOPLE.  UNFORTUNATELY, I DIDN'T FIRE THEM FAST
 
 7  ENOUGH.
 
 8       Q    FROM 1985 FORWARD FOR ABOUT 8 OR 9 YEARS, WHERE
 
 9  DID YOU SPEND YOUR TIME?  IN CALIFORNIA?  IN WASHINGTON OR
 
10  BOTH PLACES?
 
11       A    BOTH PLACES.
 
12       Q    ABOUT HOW DID YOU ALLOCATE YOUR TIME, ROUGHLY
 
13  SPEAKING, BETWEEN CALIFORNIA AND WASHINGTON?
 
14       A    I WOULD SAY ONE-THIRD OF THE TIME IN WASHINGTON
 
15  AND TWO-THIRDS HERE.  SOMETHING LIKE THAT.
 
16       Q    WHAT DID YOU DO WHEN YOU WERE IN WASHINGTON?
 
17       A    WELL, I HAVE AN OFFICE.  I AM THE C.E.O. OF
 
18  LIBERTY LOBBY.  I'M THE PUBLISHER OF THE SPOTLIGHT.  MY TIME
 
19  IS VERY WELL-TAKEN UP WITH EVERYTHING THAT IT TAKES TO RUN
 
20  AN INSTITUTION WITH AND PAY THE SALARIES OF UPWARDS OF 30
 
21  PEOPLE WHO WERE INVOLVED IN A WIDE RANGE OF ACTIVITIES ALL
 
22  PERTAINING TO THE POLITICAL INTERESTS OF LIBERTY LOBBY.
 
23       Q    THAT WAS ONE-THIRD OF YOUR TIME, GENERALLY
 
24  SPEAKING?
 
25       A    WELL, THAT WAS — I WAS IN WASHINGTON.  YES, OF
 
26  COURSE.  HERE I SPENT MOST OF MY TIME ON LIBERTY LOBBY
 
27  BUSINESS.
 
28       Q    WHEN YOU ARE IN CALIFORNIA YOU DO THAT?
			
			

page 679
 
 
 
 1       A    YES.
 
 2       Q    WHEN YOU ARE IN CALIFORNIA, HOW MUCH TIME DO YOU
 
 3  DEVOTE TO THE LEGION DURING THAT TIME FRAME?
 
 4       A    HOW MANY HOURS A WEEK WOULD YOU SAY WHEN I'M IN
 
 5  CALIFORNIA?
 
 6       Q    THAT WOULD BE A GOOD ANSWER, IF YOU HAVE IT.
 
 7       A    I WOULD SAY 8 TO 10 HOURS A WEEK ON THE AVERAGE.
 
 8  VAST DIFFERENCE DEPENDING ON WHAT IS GOING ON, OF COURSE.
 
 9       Q    DO YOU KNOW HOW MANY HOURS ELISABETH CARTO HAS
 
10  DEVOTED TO THE LEGION DURING THAT TIME FRAME?
 
11       A    MORE THAN THAT.
 
12       Q    HAVE YOU BEEN PAID FOR YOUR WORK BY THE LEGION?
 
13       A    NO, SIR.
 
14       Q    HAS ELISABETH CARTO BEEN PAID FOR HER WORK FOR THE
 
15  LEGION?
 
16       A    SHE’s NOT.
 
17       Q    TELL ME ABOUT THE FUND RAISING YOU HAVE DONE FOR
 
18  THE LEGION.  YOU SAID YOU RAISED FUNDS FOR THE LEGION?
 
19       A    YES, SIR.
 
20       Q    DURING THE TIME THAT YOU WERE ASSOCIATED WITH --
 
21  WE'LL CALL THE UNIFIED LEGION, AS OPPOSED TO THE TWO GROUPS
 
22  NOW — DURING THAT TIME WHAT PORTION OF THE FUNDS WOULD YOU
 
23  SAY THAT WERE RAISED BY THE LEGION YOU RAISED?
 
24       A    WELL, LET’s SAY WITHOUT ME I WOULD SAY NO FUNDS
 
25  COULD HAVE BEEN RAISED.  THAT DIDN'T MEAN THAT I HAD THE
 
26  FULL — I PERFORMED THE FULL RESPONSIBILITIES IN FUND
 
27  RAISING.  IT WOULD MEAN THAT — THAT WHEN IT WAS — WHEN I
 
28  FELT IT WAS THE PROPER TIME, I LAID OUT SCHEDULES FOR FUND
			
			

page 680
 
 
 
 1  RAISING BY LETTERS.  I WROTE THE LETTERS AND --
 
 2       Q    WHO SIGNED THE LETTERS?
 
 3       A    GENERALLY TOM MARCELLUS.  I CONCEIVED THE IDEA OF
 
 4  THE CONFERENCES, WHICH WERE EACH OF THEM HIGHLY SUCCESSFUL
 
 5  AND NOT ONLY FOR THE LEGION, BUT IT WAS INTERNATIONAL EVENT,
 
 6  AND IT WAS WIDELY WATCHED.  THESE WERE ALL MY IDEAS.
 
 7       Q    WHAT WAS YOUR RELATIONSHIP WITH THE JOURNAL OF
 
 8  HISTORICAL REVIEW?
 
 9       A    THE JOURNAL OF HISTORICAL REVIEW WAS THE DIRECT
 
10  DESCENDENT OF THE AMERICAN MERCURY, AND THAT WAS WHY WE
 
11  DECIDED TO DETERMINE TO SUSPEND THE AMERICAN MERCURY.  WHY
 
12  WE SOLD IT.
 
13       Q    YOU PURCHASED THE AMERICAN MERCURY IN 1966?
 
14       A    YES.
 
15       Q    AS PART OF YOUR CONTRACT YOU HAVE CONTROL OF THE
 
16  LEGION; IS THAT RIGHT?
 
17       A    YES, SIR.
 
18       Q    AND THEN WHEN DID YOU SELL THE AMERICAN MERCURY?
 
19       A    IT WAS SOLD, I BELIEVE — I BELIEVE IT WOULD BE
 
20  1978.  THAT WAS PUBLISHED REGULARLY ON A QUARTERLY BASIS OR
 
21  ABOUT, OR THERE WERE — IT WAS PUBLISHED FROM 19- — WELL,
 
22  FROM 1966.  THE FIRST ISSUE THAT I PUT OUT I THINK WAS
 
23  PROBABLY FALL '66 UP THROUGH '79 WHEN IT WAS SOLD.  AT THAT
 
24  TIME WE BEGAN PUBLICATION OF THE JOURNAL FOR HISTORICAL
 
25  REVIEW.
 
26       Q    WHOSE CONCEPT WAS IT TO PUBLISH THE JOURNAL FOR
 
27  HISTORICAL REVIEW?
 
28       A    MINE.
			
			

page 681
 
 
 
 1       Q    WHO RAISED THE MONEY TO PUBLISH THAT?
 
 2       A    I DID.
 
 3       Q    HOW WOULD YOU RATE THE IMPORTANCE OF THE JOURNAL
 
 4  OF HISTORICAL REVIEW REGARDING THE OTHER WORK OF THE LEGION
 
 5  AT THAT TIME?
 
 6       A    IT WAS THE PRIMARY ACTIVITY OF THE LEGION
 
 7  BEGINNING AT THE TIME OF THE PUBLICATION.
 
 8       Q    DURING THE WHOLE TIME FRAME WHAT ROLE DID LAVONNE
 
 9  FURR PLAY?
 
10       MR. MUSSELMAN:  VAGUE AS TO THIS WHOLE TIME FRAME.
 
11
 
12  BY MR. LANE:
 
13       Q    WE CAN SET IT DOWN FROM 1985 FOR A PERIOD OF 9
 
14  MORE YEARS, AS I SAID EARLIER.
 
15       A    HER WORK WAS WITH-- ESSENTIALLY AFTER I TOOK OVER
 
16  THE LEGION AND BECAME RESPONSIBLE FOR THE PUBLICATION OF THE
 
17  AMERICAN MERCURY, THE POINT OF VIEW INCIDENTALLY WHICH WAS
 
18  IDENTICAL TO THAT OF LIBERTY LOBBY, AT THAT TIME THEN SHE
 
19  MOVED FROM TEXAS.  SHE ACTUALLY — ANYWAY, SHE MOVED TO
 
20  CALIFORNIA IN 1967 OR '68 AND SET UP AN OFFICE.  AND ALL OF
 
21  THE BUSINESS ACTIVITIES WERE CARRIED OUT IN THAT OFFICE,
 
22  WHICH WAS PART OF HER HOME.  THE GARAGE WAS DEDICATED TO A
 
23  SHIPPING AND STORAGE AND A LARGE AREA IN THE HOME WAS THE
 
24  OFFICE.  AND SHE WROTE THE LETTERS.  SHE SORT OF OVERSAW THE
 
25  PRODUCTION OF THE AMERICAN MERCURY.
 
26            THERE WAS ANOTHER NEWSLETTER AT THAT TIME
 
27  PUBLISHED CALLED THE WASHINGTON OBSERVER.  SHE WAS INVOLVED
 
28  IN ALL OF THE ACTIVITIES.  WHEN I WAS IN CALIFORNIA WE SPOKE
			
			

page 682
 
 
 
 1  ON A DAY-TO-DAY BASIS.  WE MADE ALL THE DECISIONS ALONG WITH
 
 2  THE ADVICE OF MY WIFE, ELISABETH, JOHN KENT, WHO IS EDITOR
 
 3  OF THE JOURNAL OR EDITOR OF THE MERCURY AT THAT TIME AND
 
 4  BRUCE HOLMAN, WHO TOOK A VERY ACTIVE POSITION ON THE BOARD
 
 5  AT THAT TIME AND VARIOUS OTHER PEOPLE.  ALL EDITIONS WERE
 
 6  MADE JOINTLY WITH MYSELF AND MRS. FURR.
 
 7       Q    WAS MR. FURR A BOARD MEMBER AT THAT TIME?
 
 8       A    YES.
 
 9       Q    DID HE PARTICIPATE IN THE DISCUSSIONS?
 
10       A    YES.
 
11       Q    IS IT FAIR TO SAY THAT DURING THE PERIOD OF TIME
 
12  FROM 1985 UNTIL THERE WAS NO LONGER A UNIFIED BOARD THAT
 
13  MR. AND MRS. FURR WERE THE TWO CONSTANT BOARD MEMBERS?
 
14       A    YES.
 
15       Q    DO YOU REMEMBER WHEN THEY WERE — FIRST BECAME
 
16  BOARD MEMBERS?
 
17       A    YES.  MRS. FURR IN 1965, I BELIEVE, AND MR. FURR
 
18  ABOUT '67, '68.
 
19       Q    FROM 1967 AND 1968 UNTIL MR. HULSY REFERRED TO THE
 
20  COUP D'ETAT, WERE MR. AND MRS. FURR THE ONLY TWO PERSONS WHO
 
21  REMAINED AS BOARD MEMBERS FROM THE BEGINNING ON THROUGH THE
 
22  DECADES?
 
23       A    YES, SIR.
 
24       Q    DID YOU TAKE LEADERSHIP AND DIRECTION FROM THEM?
 
25       A    WELL, I WOULD CALL IT — I WOULD CALL IT NOT
 
26  MUTUAL BUT, OF COURSE, THEY WERE THE ONES I DEFERRED TO, OF
 
27  COURSE.
 
28       Q    YOU WERE FROM 1966 UNTIL VERY RECENTLY THE
			
			

page 683
 
 
 
 1  INCORPORATOR OF THE LEGION; IS THAT CORRECT?
 
 2       A    SUBSTITUTE INCORPORATOR, MEANING MEMBER.  SAME
 
 3  THING BUT ACCORDING TO BYLAWS OF THE LEGION.
 
 4       Q    HAS THE WRITTEN AGREEMENT WHICH YOU WENT INTO IN
 
 5  1966 WITH THE PERSONS AT THAT TIME REPRESENTING THE LEGION
 
 6  THROUGH COUNSEL AN AGREEMENT WHICH GAVE YOU CONTROL OF THE
 
 7  LEGION, HAS THAT EVER BEEN REPUDIATED TO YOUR KNOWLEDGE BY
 
 8  THE LEGION?
 
 9       A    NO.
 
10       Q    DO YOU REMEMBER A WOMAN NAMED JEAN FARREL?
 
11       A    YES, SIR.
 
12       Q    WHEN?
 
13       A    1984, I BELIEVE.  COULD BE '83.  I'M NOT CERTAIN.
 
14       Q    WHERE DID YOU MEET HER?
 
15       A    WELL, I MET HER PERSONALLY IN CALIFORNIA WHEN SHE
 
16  WAS MAKING A VISIT FOR THE FIRST TIME.
 
17       Q    DID YOU KNOW ANYTHING ABOUT HER BACKGROUND?
 
18       A    AT THAT TIME, NO.
 
19       Q    DID YOU EVER FIND OUT ANYTHING ABOUT HER
 
20  BACKGROUND?
 
21       A    NOT — BELIEVE IT OR NOT, NOT UNTIL AFTER SHE
 
22  DIED.
 
23       Q    THEN WHAT DID YOU DISCOVER?
 
24       A    I FOUND OUT THAT SHE WAS A DESCENDENT OF A VERY
 
25  FAMOUS FAMILY, EDISON.  THOMAS EDISON.
 
26       Q    HOW DID YOU MEET HER IN CALIFORNIA?
 
27       A    SHE WAS MAKING A VISIT.  THIS PRECEDED SOME
 
28  CORRESPONDENCE.  AND SHE WAS MAKING A VISIT.  SHE WANTED TO
			
			

page 684
 
 
 
 1  SEE — SHE WANTED TO SEE ME.  SHE WANTED TO SEE THE OFFICE
 
 2  OF THE INSTITUTE FOR HISTORICAL REVIEW.
 
 3            THIS WAS, AS IT TURNED OUT, HER PREREQUISITE TO
 
 4  LEAVING HER ASSETS AFTER HER DEATH.
 
 5       Q    WHEN WAS IT YOU MET HER?
 
 6       MR. MUSSELMAN:  ASKED AND ANSWERED.
 
 7       THE COURT:  I THINK HE ANSWERED THAT.  1983-- 1984.
 
 8
 
 9  BY MR. LANE:
 
10       Q    1983?
 
11       A    LET’s SEE.  HOLD ON.  YES.  I GUESS THAT’s RIGHT.
 
12       Q    DID YOU SPEND MUCH TIME WITH HER WHEN YOU FIRST
 
13  MET HER?
 
14       A    WELL, THE — YES.  WHEN SHE CAME TO CALIFORNIA SHE
 
15  STAYED AT A HOTEL THERE ON HAWTHORNE BOULEVARD.  OVER A
 
16  PERIOD OF A COUPLE OF DAYS WE HAD CONSIDERABLE AMOUNT OF
 
17  TIME TO BECOME ACQUAINTED ON THE FIRST VISIT.
 
18       MR. MUSSELMAN:  WELL, AT THIS POINT I HAVEN'T OBJECTED
 
19  TO SOME OF THE LINE OF INQUIRY.  IT SEEMS LIKE BACKGROUND
 
20  NOW.  I'M OBJECTING TO THE RELEVANT GROUNDS.
 
21       THE COURT:  OVERRULED.
 
22
 
23  BY MR. LANE:
 
24       Q    DO YOU KNOW IF YOUR WIFE MET JEAN FARREL?
 
25       A    INDEED SHE DID.
 
26       Q    WHEN DID SHE MEET HER?
 
27       A    SHE WAS BORN IN GERMANY, AND SHE VISITED GERMANY,
 
28  AND SHE THEN WITH HER MOTHER, ELISABETH’s MOTHER, TOOK A
			
			

page 685
 
 
 
 1  TRIP THROUGH GERMANY VISITING THE WINE COUNTRY AND THAT SORT
 
 2  OF THING FOR ABOUT A WEEK, I GUESS.
 
 3       Q    WHEN WAS THE NEXT TIME YOU HAD CONTACT WITH JEAN
 
 4  FARREL EITHER IN WRITING, TELEPHONE CALLS, OR PERSONAL
 
 5  VISIT?
 
 6       A    WELL, WE MAINTAINED A CONSTANT CORRESPONDENCE.
 
 7       Q    YOU DID WITH JEAN FARREL?
 
 8       A    WITH JEAN FARREL, BUT I — I DIDN'T — I DID NOT
 
 9  SEE HER ALIVE AFTER HER VISIT.  I DIDN'T VISIT WITH HER
 
10  PERSONALLY.
 
11       MR. LANE:  JUST A MINUTE.
 
12
 
13  BY MR. LANE:
 
14       Q    I'M GOING TO SHOW YOU WHAT HAS BEEN MARKED AS
 
15  106.  ASK YOU TO READ THAT.
 
16       A    OUT LOUD?
 
17       Q    TO YOURSELF.
 
18       A    (PAUSE) YES, SIR.
 
19       Q    THIS IS A LETTER, WHICH APPEARS TO BE WRITTEN TO
 
20  YOU ON AUGUST 31, 1983 BY JEAN FARREL; IS THAT CORRECT?
 
21       A    YES.
 
22       Q    DID YOU RECEIVE THAT LETTER?
 
23       A    YES, SIR.
 
24       Q    CAN YOU IDENTIFY THIS AS A LETTER YOU DID RECEIVE?
 
25       A    YES.
 
26       Q    NOW IN THIS LETTER DOES MRS. FARREL TALK ABOUT
 
27  LEAVING ASSETS TO YOU?
 
28       MR. MUSSELMAN:  OBJECTION.  HEARSAY AND RELEVANCE.
			
			

page 686
 
 
 
 1  ASKING TO REPEAT A NONPARTY’s LETTER.
 
 2       THE COURT:  I'M GOING TO OVERRULE IT.  IF THE LETTER
 
 3  COMES IN, I SUSPECT I'LL LET IT COME IN, I'LL READ THE
 
 4  LETTER.  WHATEVER IT SAYS, IT SAYS.
 
 5       THE WITNESS:  YES.  THAT WAS ONE OF THEM.
 
 6
 
 7  BY MR. LANE:
 
 8       Q    NO.  THE QUESTION IS IN THIS LETTER DOES
 
 9  MRS. FARREL — MISS FARREL TALK ABOUT LEAVING HER ASSETS TO
 
10  YOU PERSONALLY?
 
11       A    YES.
 
12       THE COURT:  DO YOU HAVE A COPY OF THAT LETTER SO I CAN
 
13  SEE IT?
 
14       MR. WAIER:  IT’s EXHIBIT --
 
15       MR. LANE:  I KNOW WHAT EXHIBIT, 106.
 
16       THE COURT:  THIS IS A LETTER.  I TAKE IT YOU ARE
 
17  REFERRING TO THE SECOND PARAGRAPH?
 
18       MR. WAIER:  LAST PARAGRAPH.
 
19       THE COURT:  MISS FARREL SAYS: “I WILL SIMPLY SEND IT TO
 
20  YOU.  OF COURSE, I MEAN, I.H.R."
 
21       MR. LANE:  I'M GETTING TO IT, YOUR HONOR.
 
22       THE COURT:  MR. CARTO SAYS THAT MEANS HE’s SUPPOSED TO
 
23  GET IT PERSONALLY.  IS THAT HIS TESTIMONY?
 
24       THE WITNESS:  MY TESTIMONY IS SHE MADE ME TRUSTEE FOR
 
25  THE MONEY.
 
26       MR. WAIER:  THOSE ARE PREMARKED, YOUR HONOR.
 
27       THE COURT:  GO AHEAD, MR. LANE.
 
28
			
			

page 687
 
 
 
 1  BY MR. LANE:
 
 2       Q    TAKE A LOOK AT EXHIBIT 107.  WHAT IS THAT?
 
 3       A    A LETTER FROM MISS FARREL TO ME, DATED OCTOBER 17,
 
 4  1993.
 
 5       THE COURT:  WE HAVE A PROBLEM HERE.  THE EXHIBIT THAT I
 
 6  HAVE MARKED 106 IS CALLED A RECORD OF THE ORGANIZATION OF
 
 7  CORPORATION, LEGION FOR THE SURVIVAL OF FREEDOM.  THAT'S
 
 8  WHAT IS ON THIS THING.
 
 9            NOW WE'RE ON 107.  107 I HAVE IS APPOINTMENT OF
 
10  SUBSTITUTE INCORPORATORS, AND YOU HAVE A LETTER.  WE HAVE
 
11  THESE EXHIBITS FOR THE DEFENSE ALL MESSED UP.
 
12       MR. WAIER:  THAT’s MY FAULT.  I HAD SOMEBODY DO THAT,
 
13  YOUR HONOR.  THAT IS — THAT’s WHAT I GET FOR HAVING
 
14  SOMEBODY ELSE DO THAT.  THAT’s MY PROBLEM.
 
15       THE COURT:  THAT MIGHT BE A GOOD IDEA.  WE CAN BREAK
 
16  AND SORT THIS OUT.  OFF THE RECORD.
 
17
 
18                   (PROCEEDINGS RECESSED.)
 
19
 
20       THE COURT:  BACK ON THE RECORD.
 
21       MR. LANE:  MAY I PROCEED?
 
22       THE COURT:  YES.
 
23
 
24  BY MR. LANE:
 
25       Q    MR. CARTO, TO YOUR KNOWLEDGE, HAS ANYONE BROUGHT
 
26  AN ACTION AGAINST THE PRESENT MEMBERS OF — THE LEADERS OF
 
27  THE LEGION FOR HAVING ACCEPTED — HAVING CONVERTED $60,000
 
28  TO F.D.F.A. FUNDS WHEN THEY ACCEPTED THE FUNDS FROM THE
			
			

page 688
 
 
 
 1  F.D.F.A. TO PAY MR. HULSY’s FEE?
 
 2       A    HAS ANYONE BROUGHT AN ACTION AGAINST THE LEGION
 
 3  FOR --
 
 4       Q    CONVERTING F.D.F.A. FUNDS.
 
 5       A    NO.
 
 6       Q    NOW, EARLIER, YOU TESTIFIED THAT 1966, YOU WENT TO
 
 7  THE — YOU MENTIONED THE AGREEMENT, AND PART OF THE RESULT
 
 8  OF THAT AGREEMENT WITH THE LEGION WAS THAT YOU WERE MADE AN
 
 9  INCORPORATOR; IS THAT RIGHT?
 
10       A    YES.
 
11       Q    LET ME SHOW YOU EXHIBIT 105 AND ASK YOU TO TELL ME
 
12  WHAT THAT IS.
 
13       A    THIS IS THE AGREEMENT DATED MARCH 2ND, 1966.  I
 
14  WAS APPOINTED A SUBSTITUTE INCORPORATOR AND MEMBER OF THE
 
15  LEGION, ALONG WITH MRS. FURR.
 
16       Q    THAT’s THE APPOINTMENT; IS THAT CORRECT?
 
17       A    YES.  THAT’s ALSO REFLECTED IN THE MINUTES.
 
18       Q    AND WHAT IS THIS DOCUMENT, 205?
 
19       A    THIS IS A CONTRACT, DATED MARCH THE 14TH, 1966, A
 
20  COPY OF THE ORIGINAL NOTARIZED MARCH 14, BETWEEN MYSELF AND
 
21  MARSHA HOYT, WHO WAS THE SOLE SURVIVING INCORPORATOR OR SOLE
 
22  SURVIVING MEMBER OF THE LEGION, APPOINTING ME AND LAVONNE AS
 
23  SUBSTITUTE MEMBERS — SUBSTITUTE INCORPORATORS AND MEMBERS
 
24  AND GIVING ME CONTROL OF THE CORPORATION.  I CAN READ THAT
 
25  PORTION TO YOU.
 
26       Q    WELL --
 
27       A    GIVE ME A MOMENT.
 
28       MR. MUSSELMAN:  BEFORE YOU ASK THE NEXT QUESTION,
			
			

page 689
 
 
 
 1  OBJECTION.  NONFOUNDATION, THE TESTIMONY THAT MARSHA HOYT
 
 2  WAS THE SOLE SURVIVING MEMBER OR INCORPORATOR.  NO
 
 3  FOUNDATION LAID.
 
 4       THE COURT:  OVERRULED.
 
 5       MR. LANE:  BEG YOUR PARDON?
 
 6       THE COURT:  OVERRULED.
 
 7
 
 8  BY MR. LANE:
 
 9       Q    YOU SAY THIS DOCUMENT GAVE YOU CONTROL OF THE
 
10  LEGION; IS THAT YOUR TESTIMONY?
 
11       A    YES, SIR.
 
12       Q    WHY DO YOU SAY THAT?
 
13       A    FOURTH PARAGRAPH READS: “WHEREAS IT IS THE DESIRE
 
14  OF MARSHA J. HOYT TO TRANSFER CONTROL OF THE CORPORATION,
 
15  LEGION FOR THE SURVIVAL OF FREEDOM, INC., TO WILLIS CARTO BY
 
16  APPOINTING HIM AND A PERSON NOMINATED BY HIM, LAVONNE D.
 
17  FURR, AS SUBSTITUTE INCORPORATOR, MEMBERS OF THE BOARD OF
 
18  DIRECTORS."
 
19       MR. MUSSELMAN:  MOTION TO STRIKE.  HEARSAY.
 
20       THE COURT:  OVERRULED.
 
21
 
22  BY MR. LANE:
 
23       Q    AND DOES THE DOCUMENT ASSERT THAT MARSHA HOYT IS
 
24  THE SOLE SURVIVING INCORPORATOR OF THE NONPROFIT LEGION FOR
 
25  SURVIVAL OF FREEDOM?
 
26       A    IT DOES IN THE FIRST SENTENCE OF THE SECOND
 
27  PARAGRAPH.
 
28       MR. MUSSELMAN:  SAME OBJECTION.
			
			

page 690
 
 
 
 1       THE COURT:  OVERRULED.
 
 2       MR. MUSSELMAN:  COULD WE BE PROVIDED WITH A COPY BEFORE
 
 3  THE CLOSE OF DEFENDANT’s CASE?
 
 4       MR. WAIER:  I DID PROVIDE MR. BEUGELMANS.  WE'LL
 
 5  PROVIDE ANOTHER ONE.
 
 6       MR. MUSSELMAN:  I HAVE WHAT MR. BEUGELMANS CLAIMS TO BE
 
 7  EXHIBITS AND I DON'T HAVE IT.
 
 8       THE COURT:  YOU HAVE BEEN USING NUMBER 205.  I HAVE
 
 9  NUMBER 105.
 
10       THE CLERK:  HE ASKED ME TO MARK IT NEXT IN ORDER.
 
11       MR. LANE:  105 IS THIS ONE AND 205 IS THE AGREEMENT.
 
12       THE COURT:  I HAVEN'T SEEN 205.
 
13       MR. LANE:  LIKE TO SEE IT?
 
14       THE COURT:  SURE.
 
15
 
16  BY MR. LANE:
 
17       Q    IS 205 THE DOCUMENT THAT YOU JUST EXAMINED?
 
18       A    YES, SIR.
 
19       Q    ONE THAT YOU REFERRED TO THIS MORNING WHEN YOU
 
20  TALKED ABOUT A CONTRACT THAT YOU MADE TO ASSUME ALL OF THE
 
21  DEBTS AND OBLIGATIONS AND LIABILITIES OF THE LEGION IN
 
22  WRITING?
 
23       A    THE SAME.
 
24       Q    TO YOUR KNOWLEDGE, HAS THAT DOCUMENT, 205, EVER
 
25  BEEN REPUDIATED BY THE LEGION FOR THE SURVIVAL OF FREEDOM?
 
26       A    ABSOLUTELY NOT.
 
27       Q    HAS IT EVER BEEN CHALLENGED BY THE LEGION?
 
28       A    NO.
			
			

page 691
 
 
 
 1       Q    BY ANY OF THE COMPETING FORCES OF THE LEGION?
 
 2       A    NOPE.
 
 3       Q    NOW, DID THERE COME A TIME WHEN YOU AND MR. WEBER
 
 4  HAD DIFFERENCES REGARDING THE WORK THE LEGION WAS DOING?
 
 5       A    YES.
 
 6       Q    WHEN WAS THAT?
 
 7       A    THAT WAS IN EARLY 1992 AFTER I APPOINTED HIM
 
 8  EDITOR OF THE JOURNAL.
 
 9       Q    WHAT WAS THE DIFFERENCE THAT AROSE?
 
10       A    WELL, ASIDE FROM THE FACT THAT HE DID NOT WANT TO
 
11  ACCEPT THAT HE HAD ANY SUPERVISION FROM THE BOARD, ALTHOUGH
 
12  LEWIS FURR WROTE HIM A LETTER, I REMEMBER, INSISTED ON
 
13  FILLING THE JOURNAL WITH MATERIAL TO THE POINT OF EXHAUSTION
 
14  ABOUT THE HOLOCAUST.  I WAS VERY MUCH OPPOSED TO THAT, BUT
 
15  HE SEEMED TO BE FIXED ON THIS SUBJECT AND COULD NOT BE
 
16  REASONED WITH.
 
17       Q    DID YOU AND THE FURRS MAKE ANY — DRAW ANY
 
18  CONCLUSION ABOUT WHAT THE NEXT STEP SHOULD BE REGARDING
 
19  MR. WEBER’s EMPLOYMENT?
 
20       MR. MUSSELMAN:  OBJECTION.  HEARSAY, ASKING HIM TO SAY
 
21  WHAT THE FURRS SAID.
 
22       THE COURT:  AS TO WHAT THE FURRS SAID, SUSTAIN THE
 
23  OBJECTION.
 
24       THE WITNESS:  YES.
 
25
 
26  BY MR. LANE:
 
27       Q    WHAT CONCLUSION WAS REACHED?
 
28       A    I BEGAN LOOKING AROUND FOR REPLACEMENT.
			
			

page 692
 
 
 
 1       Q    FOR MR. WEBER?
 
 2       A    FOR MR. WEBER.
 
 3       Q    WHEN WAS THAT?
 
 4       A    WELL, THAT WAS ABOUT MID 1992.  I'M SORRY, 1993.
 
 5       Q    YOU TESTIFIED — EXCUSE ME?
 
 6       A    EXCUSE ME.  EARLIER I SAID 1992.  I WAS WRONG.  I
 
 7  MEANT 1993.
 
 8       Q    NOW, DID YOU DISCUSS THIS MATTER WITH THE FURRS?
 
 9       A    CERTAINLY.
 
10       Q    WHAT DID THE FURRS SAY?
 
11       MR. MUSSELMAN:  OBJECTION.  HEARSAY.
 
12       MR. LANE:  THESE ARE THE BOARD MEMBERS GIVING THEM
 
13  INSTRUCTIONS.
 
14       THE COURT:  SUSTAINED.
 
15       THE WITNESS:  WELL, I REMEMBER THAT --
 
16       THE COURT:  THAT’s ALL RIGHT.  I SUSTAINED THE
 
17  OBJECTION.
 
18
 
19  BY MR. LANE:
 
20       Q    IT’s SUSTAINED.
 
21            DID YOU HAVE A DISCUSSION WITH THE FURRS ABOUT THE
 
22  CONDUCT OF MR. WEBER?
 
23       A    YES.
 
24       Q    AFTER HAVING THAT DISCUSSION WITH THE FURRS, DID
 
25  YOU THEN REACH A CONCLUSION ABOUT WHAT SHOULD BE DONE WITH
 
26  MR. WEBER?
 
27       A    YES.
 
28       Q    WHAT WAS THAT CONCLUSION?
			
			

page 693
 
 
 
 1       A    TERMINATE HIM.
 
 2       Q    NOW, YOU TESTIFIED EARLIER TODAY ABOUT A COUP
 
 3  D'ETAT WHICH TOOK PLACE --
 
 4       A    YES.
 
 5       Q    — I THINK SOMEONE SAID YESTERDAY, THE DAY BEFORE,
 
 6  THAT YOU WERE DEPOSED; IS THAT CORRECT?  THAT WAS MR. --
 
 7       A    WELL, NOT REALLY.  THEY ATTEMPTED TO DO SO.  THEY
 
 8  THREW ME OUT OF THE BUILDING.
 
 9       Q    WHEN DID YOU LEARN ABOUT THE COUP D'ETAT OR THE
 
10  CHANGING OF THE GUARD?
 
11       A    ON OCTOBER THE 4TH, 1993.
 
12       Q    HOW DID YOU LEARN ABOUT IT?
 
13       A    I RECEIVED A LETTER WHICH HAS BEEN ENTERED INTO
 
14  EVIDENCE, WHICH WAS SIGNED BY MARCELLUS, WEBER, O’Keefe AND
 
15  RAVEN, WRITTEN BY HULSY AS PART OF HIS REPRESENTATION OF
 
16  HIM.
 
17       MR. MUSSELMAN:  OBJECTION.  NO FOUNDATION.
 
18       THE COURT:  SUSTAINED.
 
19       THE WITNESS:  IN WHICH — EXCUSE ME.
 
20       THE COURT:  GO AHEAD.
 
21       THE WITNESS:  WHICH I WAS INFORMED I NO LONGER HAD ANY
 
22  POSITION IN THE LEGION.
 
23
 
24  BY MR. LANE:
 
25       Q    WAS ANY REFERENCE MADE TO THE 1966 DOCUMENT WHICH
 
26  GAVE YOU CONTROL OF THE CORPORATION?
 
27       A    WELL, NO.  WHEN I RECEIVED THIS LETTER, I WAS --
 
28       MR. MUSSELMAN:  OBJECTION.  HE ANSWERED THE QUESTION.
			
			

page 694
 
 
 
 1  MOVE TO STRIKE.
 
 2       THE WITNESS:  NO, THERE WAS NO REFERENCE.
 
 3       MR. LANE:  YOUR HONOR, HE WAS SAYING A WORD AFTER
 
 4  “NO.”  I DON'T KNOW IF IT WAS RELEVANT OR NOT.
 
 5       THE COURT:  I THINK THE ANSWER “NO” WAS RELEVANT.  ASK
 
 6  ANOTHER QUESTION.
 
 7
 
 8  BY MR. LANE:
 
 9       Q    WERE YOU GIVEN ANY REASON FOR YOUR BEING
 
10  TERMINATED OR DEPOSED?
 
11       A    AT THAT POINT, I WAS TOTALLY BAFFLED.  I HAD NO
 
12  IDEA WHAT HAD BEEN GOING ON.
 
13       Q    EARLIER, WE WERE TALKING ABOUT YOUR RELATIONSHIP
 
14  WITH MISS FARREL AND EXCHANGE OF CORRESPONDENCE.
 
15       A    YES.
 
16       Q    YOU TESTIFIED THAT YOU FIRST MET HER IN
 
17  CALIFORNIA?
 
18       A    YES.
 
19       Q    DID SHE VISIT THE I.H.R. AT THAT TIME?
 
20       A    YEAH.
 
21       Q    SUBSEQUENT TO THAT TIME, DID SHE LEARN OF THE WORK
 
22  THAT YOU WERE DOING IN OTHER AREAS OTHER THAN THE I.H.R.?
 
23       A    YES.
 
24       Q    HOW DID SHE LEARN ABOUT THAT?
 
25       A    I TOLD HER.
 
26       Q    DID SHE EXPRESS ANY INTEREST IN THE WORK OF
 
27  LIBERTY LOBBY?
 
28       MR. MUSSELMAN:  OBJECTION.  HEARSAY.
			
			

page 695
 
 
 
 1       THE COURT:  OVERRULE THE OBJECTION.  I'M NOT SURE
 
 2  EXACTLY WHY.  OVERRULE IT.
 
 3       MR. LANE:  I DON'T THINK IT’s NECESSARY TO KNOW, YOUR
 
 4  HONOR.
 
 5       THE COURT:  IT’s NOT.  IT’s GOING YOUR WAY.
 
 6       THE WITNESS:  DID SHE EXPRESS INTEREST IN LIBERTY
 
 7  LOBBY?  IS THAT THE QUESTION?
 
 8
 
 9  BY MR. LANE:
 
10       Q    YES.
 
11       A    VERY, VERY DEFINITELY.
 
12       Q    DID SHE WRITE ABOUT THE INTEREST IN LIBERTY LOBBY?
 
13       A    YES, SHE WROTE ME.
 
14       Q    DID SHE WRITE ABOUT THE CONCERN ABOUT TAXES?
 
15       MR. MUSSELMAN:  SAME OBJECTION.  GETTING INTO
 
16  STATEMENTS BY A DECEDENT MADE OUT OF COURT, NEVER BEEN A
 
17  PARTY TO THIS LAWSUIT.
 
18       THE COURT:  I'M GOING TO OVERRULE THE OBJECTION BECAUSE
 
19  OF SOME OTHER THINGS THAT HAVE BEEN TESTIFIED TO.
 
20       THE WITNESS:  MR. LANE, THAT WAS THE PRIMARY, I THINK
 
21  TAXES.  THAT’s WHY SHE LEFT THE COUNTRY, BECAUSE OF HER
 
22  EXTREMELY UNPLEASANT RELATIONS WITH THE — WITH THE I.R.S.
 
23  SHE TOLD ME — GAVE ME HINTS ABOUT WHAT HAD HAPPENED TO
 
24  DRIVE HER OUT OF THE COUNTRY.  THAT WAS HER NUMBER ONE THING
 
25  THAT SHE WAS MAINLY INTERESTED.  WHEN SHE LEARNED ABOUT
 
26  LIBERTY LOBBY AND THE SPOTLIGHT AND THE INTEREST WE TOOK IN
 
27  THAT SUBJECT. SHE WAS EXTREMELY INTERESTED.
 
28
			
			

page 696
 
 
 
 1  BY MR. LANE:
 
 2       Q    DID THERE COME A TIME WHEN YOU TOLD HER THAT
 
 3  BECAUSE OF THE MERMELSTEIN PENDING CASE, THAT YOU WERE VERY
 
 4  LIKELY GOING TO PUT THE I.H.R., THE LEGION FOR THE SURVIVAL
 
 5  OF THE FREEDOM, INTO BANKRUPTCY?
 
 6       MR. MUSSELMAN:  OBJECTION.  HEARSAY.
 
 7       MR. LANE:  WHAT HE SAID?
 
 8       MR. MUSSELMAN:  YES.
 
 9       THE COURT:  OVERRULED.
 
10
 
11  BY MR. LANE:
 
12       Q    DID YOU?
 
13       A    YES.
 
14       Q    SUBSEQUENT TO THAT TIME --
 
15       THE COURT:  I'M ADMITTING THIS NOT FOR THE TRUTH OF THE
 
16  MATTER, BUT TO SHOW WHY SHE WOULD WRITE A WILL IN A CERTAIN
 
17  WAY.
 
18       MR. LANE:  ALTHOUGH THE WILL, YOUR HONOR, IS NOT THE
 
19  ISSUE HERE.  MAYBE IT IS AN ISSUE TO YOU.
 
20       THE COURT:  ONE OF THE ARGUMENTS HERE IN THE WILL IS
 
21  THAT I'M CARRYING OUT JEAN FARREL’s DUTIES.  IF I GIVE IT TO
 
22  LIBERTY LOBBY OR GIVE IT TO THE LEGION, IT DOESN'T MAKE ANY
 
23  DIFFERENCE.  I HAVEN'T VIOLATED A TRUST BECAUSE I HAVE THAT
 
24  RIGHT.  I FIND THAT TO BE AN ARGUMENT.  THAT DOESN'T, TO ME,
 
25  HAVE ANY LEGAL VALIDITY, BUT I THINK YOU SHOULD BE ABLE TO
 
26  DEVELOP YOUR DEFENSE.
 
27       MR. LANE:  I'M SAYING IT’s NOT THE WILL.  THE WILL LEFT
 
28  ALL THE ASSETS TO JOAN ALTHAUS AND NOTHING TO ANYONE ELSE.
			
			

page 697
 
 
 
 1       THE COURT:  I AGREE THERE.  IT DOES MENTION THE LEGION
 
 2  AS A RESIDUAL BENEFICIARY.
 
 3
 
 4  BY MR. LANE:
 
 5       Q    AFTER YOU WROTE TO MISS FARREL AND TOLD HER THAT
 
 6  YOU MIGHT VERY WELL PUT THE LEGION INTO BANKRUPTCY, DID SHE
 
 7  SEND YOU KEYS TO SAFE DEPOSIT BOXES WHERE THE BEARER
 
 8  CERTIFICATES WERE?
 
 9       A    INDEED SHE DID.
 
10       Q    WHEN YOU FIRST MET MISS FARREL AT THE I.H.R.
 
11  OFFICES, DID SHE INDICATE AN INTEREST AT THAT TIME IN
 
12  HELPING TO SUPPORT THE WORK OF THE I.H.R. OR THE LEGION?
 
13       A    YES.
 
14       Q    DID YOU TELL HER ABOUT LIBERTY LOBBY AT THAT TIME?
 
15       A    YES.
 
16       Q    THEREAFTER, DID YOU SEND HER COPIES OF THE
 
17  SPOTLIGHT?
 
18       A    YES.
 
19       Q    DID YOU SEND HER DOCUMENTS ABOUT THE F.D.F.A.?
 
20       A    I DID.
 
21       Q    DID SHE OFTEN COMMUNICATE WITH YOU AT THE LIBERTY
 
22  LOBBY OFFICE IN WASHINGTON, D.C.?
 
23       A    YES.  ALSO TELEPHONED ME A COUPLE OF TIMES.
 
24       Q    WHO WAS FLEMING LEE?
 
25       A    HE WAS A GENERAL COUNSEL OF LIBERTY LOBBY AT THAT
 
26  TIME.
 
27       Q    DID HE HAVE AN ASSOCIATION WITH THE LEGION?
 
28       A    NO.
			
			

page 698
 
 
 
 1       Q    DID MISS FARREL CONTACT MR. LEE TO TALK ABOUT
 
 2  WHERE THE KEYS WOULD BE AND HOW THE STOCKS COULD BE LEFT?
 
 3       MR. MUSSELMAN:  OBJECTION.  WITHOUT FOUNDATION.
 
 4       THE COURT:  SUSTAINED AS TO WHAT SHE MIGHT HAVE SAID.
 
 5
 
 6  BY MR. LANE:
 
 7       Q    DID SHE WRITE A LETTER TO YOU WHERE SHE SAID THAT?
 
 8       A    YES.
 
 9       Q    NOW, WHAT WAS YOUR JUDGMENT ABOUT MISS FARREL?
 
10  WAS SHE AN INTELLIGENT WOMAN?
 
11       A    YES.
 
12       Q    AN ASSURED WOMAN?
 
13       A    VERY.
 
14       MR. MUSSELMAN:  RELEVANCE.
 
15       THE COURT:  OVERRULED.
 
16
 
17  BY MR. LANE:
 
18       Q    DID SHE TELL YOU WHAT ESTATE WAS LEFT TO HER
 
19  ORIGINALLY?
 
20       A    NOPE.
 
21       Q    THE AMOUNT?
 
22       A    NO.
 
23       Q    DID SHE EVER TELL YOU SHE BUILT UP WHAT WAS LEFT
 
24  TO HER TO A MUCH MORE SIZEABLE FORTUNE?
 
25       A    YES.
 
26       MR. LANE:  THESE NUMBERS ARE IN ORDER, YOUR HONOR.
 
27
 
28
			
			

page 699
 
 
 
 1  BY MR. LANE:
 
 2       Q    I'M GOING TO SHOW YOU WHAT HAS BEEN MARKED AS 107
 
 3  AND ASK IF YOU RECEIVED THE LETTER DATED OCTOBER 17, 1983.
 
 4       A    YES.
 
 5       Q    HAVE YOU EVER SEEN THAT LETTER BEFORE?
 
 6       A    YES.
 
 7       Q    WHAT IS IT?
 
 8       A    EXHIBIT DATED OCTOBER 17, 1983, TO ME IN TORRANCE,
 
 9  CALIFORNIA.  SHE RELATES THAT SHE WENT TO SEE MR. COUGHLIN,
 
10  ED COUGHLIN, AN AMERICAN LAWYER IN GENEVA I RECOMMENDED TO
 
11  HER, TO WORK OUT A METHOD FOR TRANSFERRING HER ASSETS.  AND
 
12  SHE TELLS ABOUT THE LIBERIAN CORPORATION THAT SHE WAS, AT
 
13  THAT TIME, CONSIDERING ESTABLISHING.  AND SHE ASKED IF I
 
14  WANTED COPIES OF ALL THE CORRESPONDENCE WITH ED AND --
 
15  BECAUSE I MIGHT BE ABLE TO MAKE SUGGESTIONS.
 
16       Q    SHE INVITED YOU TO MAKE SUGGESTIONS HOW SHE MIGHT
 
17  HELP DISPOSE OF HER ASSETS?
 
18       A    YES.
 
19       Q    AND DID YOU WRITE A LETTER ON OCTOBER 27, 1983,
 
20  WHICH IS MARKED 108?
 
21       MR. WAIER:  DOES THAT MATCH UP WITH YOUR EXHIBITS?  I
 
22  TRIED TO GO THROUGH SOME OF THESE.
 
23       THE COURT:  YES.
 
24       THE WITNESS:  YES.
 
25
 
26  BY MR. LANE:
 
27       Q    DID YOU WRITE THAT LETTER?
 
28       A    YES.
			
			

page 700
 
 
 
 1       Q    DID YOU RESPOND TO HER REQUEST THAT YOU MAKE
 
 2  SUGGESTIONS?
 
 3       A    YES.
 
 4       Q    AND WHAT DID YOU SUGGEST?
 
 5       MR. MUSSELMAN:  IRRELEVANT.  HEARSAY.  AND RELEVANCE.
 
 6  I DON'T SEE HOW THIS IS RELEVANT TO THIS DISPUTE.
 
 7       THE COURT:  I'M HAVING TROUBLE SEEING IT, TOO.  HE
 
 8  DOESN'T NEED TO TELL ME WHAT IS IN THE LETTER, ASSUMING I
 
 9  ADMIT THE LETTER, WHICH I'M LIKELY TO DO, FOR WHATEVER
 
10  LIMITED RELEVANCE IT MIGHT HAVE.  IT SAYS WHAT HE WANTS.
 
11
 
12  BY MR. LANE:
 
13       Q    DID YOU WRITE A LETTER TO HER ON DECEMBER 5, 1983,
 
14  MARKED EXHIBIT 111?
 
15       A    YES.
 
16       Q    AND DID YOU RECEIVE A LETTER FROM MISS FARREL
 
17  DATED APRIL 18, 1984, EXHIBIT 119?
 
18       A    YES.  WELL, NO, I DON'T THINK THIS IS AN ANSWER TO
 
19  THIS.
 
20       Q    JUST DID YOU RECEIVE A LETTER FROM MISS FARREL
 
21  DATED APRIL 18, 1984?
 
22       A    YES.
 
23       Q    AND IN THAT LETTER, MISS FARREL MAKES REFERENCE TO
 
24  MR. RYAN AND HER MEETING WITH HIM, DID SHE NOT?
 
25       A    YES.
 
26       Q    WHO IS MR. RYAN?
 
27       A    HE IS AT THIS TIME?  AT THAT TIME?
 
28       Q    AT THAT TIME.
			
			

page 701
 
 
 
 1       A    HE WAS A CHAIRMAN OF THE BOARD OF POLICY OF
 
 2  LIBERTY LOBBY.
 
 3       Q    DID HE HAVE ANY RELATIONSHIP WITH THE I.H.R.?
 
 4       A    NO.
 
 5       Q    DID YOU RECEIVE A LETTER FROM MISS FARREL DATED
 
 6  MAY 11, 1984, EXHIBIT 192?
 
 7       A    YES.
 
 8       Q    AND --
 
 9       THE CLERK:  I'M SORRY.  I HAVE 192 AS A FAX WITH A
 
10  RESPONSE, DATED OCTOBER 30, 1996.
 
11       MR. WAIER:  THAT’s 112 OR 120.  121 OR 122.
 
12       MR. LANE:  122.
 
13       THE CLERK:  THE DATE, PLEASE.
 
14       MR. LANE:  MAY 11, 1984.
 
15       THE CLERK:  THAT WOULD BE 123.
 
16
 
17  BY MR. LANE:
 
18       Q    EXHIBIT 123, MR. CARTO, AND ASK YOU IF YOU
 
19  RECEIVED THAT LETTER.
 
20       A    YES.
 
21       Q    IN THAT LETTER, DOES MISS FARREL STATE THAT SHE'S
 
22  ASKED HER LANDLADY TO LET ONLY JOAN AND WHOEVER YOU,
 
23  MR. CARTO, SEND INTO HER APARTMENT AFTER HER DEATH?
 
24       A    YES.
 
25       Q    I'M SHOWING YOU A LETTER DATED MAY 25, 1984,
 
26  EXHIBIT 124.  ASK IF YOU HAVE SEEN THAT BEFORE.
 
27       A    YES.
 
28       THE COURT:  I THINK THAT’s 125.
			
			

page 702
 
 
 
 1       MR. LANE:  THANK YOU, YOUR HONOR.
 
 2
 
 3  BY MR. LANE:
 
 4       Q    IN THAT, DOES SHE MAKE REFERENCE TO KEYS TO THE
 
 5  BOX WHERE THE DOCUMENTS ARE KEPT AND SAYING THAT SHE WILL
 
 6  SEND THEM TO YOU?
 
 7       A    YES.
 
 8       Q    HERE IS THE LETTER, NUMBER 129, DATED JUNE 21,
 
 9  1984.  DID YOU RECEIVE THAT LETTER FROM JEAN FARREL?
 
10       A    YES.
 
11       THE COURT:  THIS IS 130.  TRY TO GET THE RIGHT EXHIBIT
 
12  NUMBERS.  THIS WILL BE TERRIBLY CONFUSING.
 
13       MR. LANE:  I'LL CHANGE THEM NOW.  THIS IS WHAT I WAS
 
14  GIVEN.
 
15
 
16  BY MR. LANE:
 
17       Q    IN THIS ONE, DID MISS FARREL OFFER TO GIVE YOU
 
18  WHAT SHE REFERS TO AS “THE WHOLE FUND” FOR YOU TO TAKE BACK
 
19  TO AMERICA AT ONCE?
 
20       A    YES.
 
21       Q    THIS LETTER IS ADDRESSED TO YOU, ISN'T IT?
 
22       A    YES.
 
23       Q    THIS IS EXHIBIT 132, A LETTER ADDRESSED TO YOU.
 
24  DID YOU RECEIVE THAT LETTER?
 
25       A    YES.
 
26       Q    IN IT, MISS FARREL TALKS ABOUT BEARER BONDS TO BE
 
27  MADE AVAILABLE TO YOU, MR. CARTO.
 
28       A    YES.  SHE ACTUALLY MEANT BEARER SHARES, OF COURSE.
			
			

page 703
 
 
 
 1       MR. MUSSELMAN:  OBJECTION.  WITHOUT FOUNDATION TO WHAT
 
 2  SHE MEANT.
 
 3       THE COURT:  SUSTAINED.
 
 4
 
 5  BY MR. LANE:
 
 6       Q    SHE DOES REFER TO THEM AS NECA, N-E-C-A; IS THAT
 
 7  CORRECT?
 
 8       A    YES.
 
 9       Q    DOES IT SAY WHY SHE MET WITH MR. LEE, WHO SHE HAD
 
10  MET WITH MR. RYAN?
 
11       A    YES.
 
12       Q    WHO IS MR. LEE?
 
13       A    HE WAS THE GENERAL COUNSEL OF LIBERTY LOBBY AT
 
14  THAT TIME.
 
15       Q    WHO WAS MR. RYAN?
 
16       A    HE WAS THE CHAIRMAN OF THE BOARD OF POLICY OF
 
17  LIBERTY LOBBY AT THAT TIME.
 
18       Q    DOES SHE SAY SHE TALKED WITH MR. LEE AFTER MEETING
 
19  WITH MR. RYAN REGARDING MAKING THE NECA CERTIFICATES
 
20  AVAILABLE TO YOU?
 
21       A    YES.
 
22       Q    I'M SHOWING YOU EXHIBIT MARKED 133.  HAVE YOU SEEN
 
23  THAT BEFORE?  IT’s DATED JULY 8, 1984.
 
24       A    YES.
 
25       Q    WHAT IS THAT?
 
26       A    THAT’s A LETTER FROM ME TO JEAN.
 
27       Q    IN THAT LETTER, DID YOU SAY WE'LL PROBABLY
 
28  BANKRUPT THE LEGION FOR THE SURVIVAL OF FREEDOM?
			
			

page 704
 
 
 
 1       A    YES.
 
 2       MR. MUSSELMAN:  AGAIN, IS THAT BEING ADMITTED FOR SOME
 
 3  PURPOSE OTHER THAN THE TRUTH?
 
 4       THE COURT:  YES.
 
 5
 
 6  BY MR. LANE:
 
 7       Q    THIS IS EXHIBIT 138, A LETTER ADDRESSED TO YOU ON
 
 8  SEPTEMBER 3RD, 1984, IS IT NOT?
 
 9       A    YES.
 
10       Q    AND HAVE YOU SEEN THIS BEFORE?
 
11       A    YES.
 
12       Q    WHAT IS IT?
 
13       A    THIS IS A COVER LETTER ON A CHECK WHICH SHE
 
14  ENCLOSED, PERSONAL CHECK ON — MADE OUT TO THE FOUNDATION
 
15  TO DEFEND THE FIRST AMENDMENT FOR $6767.
 
16       Q    AND DOES SHE DISCUSS THE FACT THAT YOUR WIFE IS
 
17  COMING OVER TO SWITZERLAND?
 
18       A    YES.
 
19       Q    DID SHE SAY THAT SHE WILL INTRODUCE YOUR WIFE TO
 
20  THE BANK OFFICIALS SO THEY WILL RECOGNIZE HER IN CASE SHE,
 
21  MISS FARREL, DIES?
 
22       A    YES.
 
23       Q    AND DOES SHE SAY FURTHER WE'LL GET SOME SHARES OUT
 
24  AND THEN SHE AND I COULD GO TO GERMANY AND PUT THEM IN THE
 
25  BANK THERE AND SHE CAN TAKE ONE KEY BACK TO YOU AND LEAVE
 
26  THE SINGAPORE KEY WITH ME?
 
27       MR. MUSSELMAN:  WELL, IF THE DOCUMENT IS ADMISSIBLE, I
 
28  MOVE TO ADMIT.  IF THEY'RE ASKING TO REPEAT THE CONTENTS,
			
			

page 705
 
 
 
 1  IT’s THE BEST EVIDENCE.
 
 2       THE COURT:  SUSTAINED.
 
 3
 
 4  BY MR. LANE:
 
 5       Q    DO YOU KNOW IF, FOLLOWING THIS LETTER, YOUR WIFE
 
 6  WENT TO EUROPE AND MET MISS FARREL?
 
 7       A    YES.
 
 8       Q    EXHIBIT 140 IS A LETTER — WITHDRAW THAT.
 
 9       THE COURT:  GIVE US THE DATE OF THE LETTER.  WE CAN
 
10  CHECK TO MAKE SURE WE HAVE THE SAME EXHIBIT NUMBER.
 
11
 
12  BY MR. LANE:
 
13       Q    THIS IS AN UNDATED ONE, 124.  MR. CARTO, HAVE YOU
 
14  SEEN THIS LETTER IN FRENCH AND ENGLISH?
 
15       A    YES.
 
16       Q    THESE INSTRUCTIONS ARE TO ALLOW ONLY YOU OR YOUR
 
17  AGENT OR JOAN ALTHAUS INTO MISS FARREL’s APARTMENT ON THE
 
18  EVENT OF HER DEATH?
 
19       A    YES.
 
20       Q    EXHIBIT 141, A LETTER DATED DECEMBER 11, 1984,
 
21  HAVE YOU SEEN THAT BEFORE?
 
22       A    YES.
 
23       Q    AND WAS IT RECEIVED BY YOU?
 
24       A    YES.
 
25       THE CLERK:  COUNSEL, I'M SORRY, LETTER DATED
 
26  DECEMBER 11, '84, IS 142.
 
27       THE COURT:  WE GOT TO DO A BETTER JOB, FOLKS.  YOU ARE
 
28  DISORGANIZED.
			
			

page 706
 
 
 
 1  BY MR. LANE:
 
 2       Q    THIS IS A MAILGRAM, JULY 3RD, 1985?
 
 3       THE COURT:  ARE WE TALKING ABOUT AN EXHIBIT?
 
 4       MR. LANE:  YES.
 
 5       THE COURT:  THE NUMBER, PLEASE.
 
 6       MR. LANE:  I DON'T KNOW.
 
 7       THE CLERK:  THAT WOULD BE 160.
 
 8       MR. LANE:  TWO MORE.  ONE IS SEPTEMBER 14, 1985.
 
 9       THE CLERK:  EXHIBIT 162.
 
10       MR. LANE:  LAST ONE, MAY 25, 1985.
 
11       THE CLERK:  158.
 
12
 
13  BY MR. LANE:
 
14       Q    NOW, 158, A LETTER TO YOU FROM JEAN FARREL, DATED
 
15  MAY 25, 1985, HAVE YOU SEEN THAT BEFORE?
 
16       A    YES.
 
17       Q    WHO SENT THAT TO YOU?
 
18       A    JEAN FARREL.
 
19       Q    THERE’s A REFERENCE BACK IN 1985 BY MISS FARREL,
 
20  OBVIOUSLY WHO WAS STILL ALIVE, TO SOMEONE NAMED HENRY, IS
 
21  THERE NOT?
 
22       A    YES.
 
23       Q    AND SHE MAKES A REQUEST OF YOU TO ASK HENRY
 
24  SOMETHING?
 
25       A    YES.
 
26       Q    DO YOU KNOW WHO HENRY IS?
 
27       A    YES.
 
28       Q    WHO IS HENRY?
			
			

page 707
 
 
 
 1       A    HENRY FISCHER.
 
 2       Q    WHAT IS EXHIBIT 160, MR. CARTO?
 
 3       A    THIS IS A MAILGRAM FROM JEAN TO — THAT'S
 
 4  INTERESTING.  THIS IS TO F.D.F.A., AND THAT’s POST OFFICE
 
 5  BOX 1306, TORRANCE, WHICH IS THE LEGION ADDRESS.  SHE SAYS
 
 6  IT’s VERY IMPORTANT THAT I CONTACT F.D.F.A. AS RAPIDLY AS
 
 7  POSSIBLE.  PLEASE GIVE HER A PHONE NUMBER OR OTHER MEANS.
 
 8       Q    AND THAT’s SEPTEMBER?
 
 9       A    NO, THAT’s — I BELIEVE THAT’s JULY THE 3RD,
 
10  1985.
 
11       Q    DID MISS FARREL DIE THE NEXT MONTH?
 
12       A    YES.
 
13       Q    DO YOU KNOW WHY MISS FARREL WANTED TO MAKE CONTACT
 
14  WITH THE F.D.F.A. FOUR WEEKS OR SO BEFORE SHE DIED?
 
15       MR. MUSSELMAN:  HEARSAY.  RELEVANCY.
 
16       MR. LANE:  HE MAY KNOW.
 
17       THE COURT:  OVERRULED.
 
18
 
19  BY MR. LANE:
 
20       Q    DO YOU KNOW?
 
21       A    I COULD ONLY — I DO NOT KNOW, BUT FOR CERTAIN,
 
22  SHE DIDN'T TELL ME.  I BELIEVE THIS IS THE LAST
 
23  COMMUNICATION I RECEIVED FROM HER.
 
24       MR. MUSSELMAN:  OBJECTION.  MOVE TO STRIKE.  HE STATED
 
25  HE DOES NOT KNOW.
 
26       THE COURT:  SUSTAINED.  SUSTAIN THE OBJECTION.
 
27  BY MR. LANE:
 
28       Q    WHAT IS 162?
			
			

page 708
 
 
 
 1       A    THIS IS A COPY OF A LETTER I WROTE TO MRS. FURR
 
 2  AFTER — AND ON SEPTEMBER 14, 1985, WHICH WAS A LITTLE OVER
 
 3  TWO MONTHS AFTER THE MAILGRAM AND AFTER I RETURNED FROM
 
 4  SWITZERLAND, HAVING BEEN NOTIFIED OR HAVING FOUND OUT — I
 
 5  WAS NOT NOTIFIED UNTIL SEPTEMBER, ABOUT THE 10TH, THAT
 
 6  MISS FARREL DIED ON AUGUST 11.
 
 7       MR. MUSSELMAN:  THE COPY I HAVE HAS NO DATE.  WHAT IS
 
 8  THE DATE?
 
 9       THE WITNESS:  SEPTEMBER 14, 1985.
 
10       MR. LANE:  SEPTEMBER 14.
 
11       THE COURT:  CAN'T TALK AT THE SAME TIME.  IT’s NOT FAIR
 
12  TO ME OR FAIR TO THE REPORTER.
 
13       THE WITNESS:  MAY I ANSWER THE QUESTION, YOUR HONOR?
 
14       THE COURT:  IT ISN'T A QUESTION BY THE ATTORNEY.  IT'S
 
15  A COMMENT.  HE SAYS HE DOESN'T HAVE ONE.  I SEE A FILE COPY,
 
16  HALF OF A “SEPTEMBER,” IT LOOKS LIKE “14,” “1985” PROBABLY.
 
17       MR. LANE:  YES.
 
18       THE COURT:  IT’s NOT A GOOD REPRODUCTION.
 
19
 
20  BY MR. LANE:
 
21       Q    HOW DID YOU LEARN OF THE DEATH OF MISS FARREL?
 
22       A    NOT HAVING HEARD FROM HER IN TWO MONTHS, I
 
23  SUDDENLY REALIZED THAT I HAD, WHICH WAS QUITE UNUSUAL, NO
 
24  TELEPHONE CALLS, NO LETTER.  I TELEPHONED ED COUGHLIN, THE
 
25  ATTORNEY IN GENEVA, AND HE ACTED NONPLUSED THAT I DIDN'T --
 
26  I HADN'T BEEN TOLD OF IT BY JOAN ALTHAUS, WHO WAS COMMITTED
 
27  TO TELL ME.  SHE TOLD ME THAT — HE TOLD ME THAT JEAN HAD
 
28  DIED LAST MONTH.
			
			

page 709
 
 
 
 1       Q    WHAT DID YOU DO THEN?
 
 2       A    I HOPPED THE FIRST PLANE TO GET OVER THERE.
 
 3       Q    TO WHERE?
 
 4       A    TO LUTRY, SWITZERLAND.
 
 5       Q    WHAT DID YOU DO WHEN YOU ARRIVED?
 
 6       A    I WENT TO HER APARTMENT AND CONTACTED THE JUSTICE
 
 7  OF THE PEACE, MAN BY THE NAME OF MINGARD, M-I-N-G-A-R-D, OF
 
 8  COURSE, AFTER CONTACTING ED COUGHLIN WAS THE FIRST THING I
 
 9  DID.  FOLLOWING — WELL, DO YOU WANT ME TO TELL YOU WHAT
 
10  HAPPENED?
 
11       Q    YES.  WHAT HAPPENED THEN?
 
12       A    THEN THE FOLLOWING DAY — I HAD JUST GOTTEN THERE
 
13  JUST IN TIME.  AND THE FOLLOWING DAY HER APARTMENT WAS
 
14  OPENED.  THE SEAL HAD BEEN BROKEN NEITHER HERE OR THERE, I
 
15  GUESS, BUT I THEN ENTERED THE APARTMENT WITH THE OFFICIAL
 
16  PARTY AND FOR THE POST MORTEM INSPECTION THAT IS CARRIED OUT
 
17  BY THE JUSTICE OF THE PEACE.
 
18       Q    WERE YOU THERE DURING THE INSPECTION?
 
19       A    YES, I WAS.
 
20       Q    WHAT TRANSPIRED?
 
21       A    WELL, ALTHAUS WAS THERE, OF COURSE, ALSO JEAN'S
 
22  NIECE, MISS CHANCY, AND HER ATTORNEY FROM MASSACHUSETTS, I
 
23  THINK.  I CAN'T REMEMBER THE ATTORNEY’s NAME.  AND ALSO AN
 
24  ATTORNEY THAT I HAD — THAT WORKED WITH ED COUGHLIN,
 
25  CHRISTOPH DREHYER, D-R-E-Y-E-R — D-R-E-H-Y-E-R.
 
26            THEN ALTHAUS HAD AN ATTORNEY THERE.  AND THE
 
27  JUDGE — THE JUSTICE OF THE PEACE INVENTORIED THE
 
28  PROPERTY.  AND IN HER STUDY, THERE WAS A FOUR-DRAWER FILING
			
			

page 710
 
 
 
 1  CABINET, WHICH HAD A STICKER ON IT, SAID NECA CORPORATION.
 
 2  AND I TRIED TO TAKE POSSESSION OF THAT AND MINGARD WOULD NOT
 
 3  PERMIT ME TO DO THAT.
 
 4       Q    WHY DID YOU TRY TO TAKE POSSESSION OF THE FILE
 
 5  THAT SAID NECA?
 
 6       A    BECAUSE IT WAS MY PROPERTY.
 
 7       Q    HOW DID YOU KNOW THAT WAS YOUR PROPERTY?
 
 8       A    ALL THE CORRESPONDENCE AND CONVERSATION, AND IT
 
 9  WAS MISS FARREL AND ALL THIS WE HAD BEEN THROUGH ABOUT HER
 
10  PUTTING THE KEYS AND THE SAFETY DEPOSIT BOXES AND HER TRIP
 
11  WITH MRS. CARTO, ETC.
 
12       Q    YOU SAID YOU HAD DISCUSSIONS WITH MISS FARREL
 
13  ABOUT THE NECA CERTIFICATES?
 
14       A    OH, YES, INDEED.
 
15       Q    WHAT WERE THE DISCUSSIONS?
 
16       A    WELL, IN THE CORRESPONDENCE.  ALSO, I SAY FROM
 
17  TIME TO TIME, SHE WOULD CALL.
 
18       Q    WHAT DID SHE SAY?
 
19       A    AND THEN SHE WENT ON THE TRIP OF HERS AND LEFT --
 
20  DROPPED OFF KEYS AT THE BANKS AND SENT THEM TO ME FOR THE
 
21  SAFETY DEPOSIT BOXES.  AND THEN SHE --
 
22       Q    DID SHE TELL YOU WHAT WAS IN THE SAFETY DEPOSIT
 
23  BOXES?
 
24       A    YES.
 
25       Q    WHAT?
 
26       A    IN EACH SAFETY DEPOSIT BOX, SHE WOULD LEAVE TWO OR
 
27  THREE OF THE BEARER SHARES OF NECA.  AND OF COURSE, SHE HAD
 
28  MANY CONVERSATIONS WITH MRS. CARTO ON THIS TRIP THEY TOOK.
			
			

page 711
 
 
 
 1       Q    WERE YOU PRESENT ON THAT TRIP?
 
 2       A    NO.
 
 3       Q    WHERE DID MISS FARREL LEAVE THE CERTIFICATES IN
 
 4  BANKS, WHERE IN TERMS OF WHAT SHE TOLD YOU, RATHER THAN WHAT
 
 5  YOU LEARNED FROM YOUR WIFE?
 
 6       A    YES, SHE SENT ME THE KEYS.  SHE LEFT IN — THERE
 
 7  WAS A — ONE IN — OF COURSE, IN LUTRY, SWITZERLAND.
 
 8  THERE WAS ONE IN HERFORD, GERMANY, THAT SHE DEPOSITED ON
 
 9  THIS TRIP WITH MRS. CARTO.  WHEN I — I SAY ONE.  I THINK
 
10  THERE WERE THREE CERTIFICATES IN THAT BOX.  I CAN'T REMEMBER
 
11  HOW MUCH EACH BOX.  THERE WERE CERTIFICATES IN A BOX IN
 
12  LONDON WITH WESTMINSTER BANK, PERHAPS.
 
13            THERE WAS ALSO CERTIFICATES IN A — IN A BOX IN
 
14  NORTH CAROLINA.  SHE ALSO LEFT THEM IN SINGAPORE.  AND WE
 
15  WERE APPARENTLY NOT IN TOKYO.  MR. FISCHER HAD TO GO THERE.
 
16  AND THEN EACH BOX, I SAY SHE LEFT TWO OR THREE
 
17  CERTIFICATES.  HOWEVER, SHE HAD NOT FINISHED THE
 
18  DISTRIBUTION BECAUSE SHE HAD NINE OF THESE CERTIFICATES THAT
 
19  SHE HAD NOT DISTRIBUTED AT THE TIME OF HER DEATH.
 
20       Q    AFTER YOU WROTE TO MISS FARREL AND TOLD HER THAT
 
21  YOU WERE PROBABLY GOING TO PUT THE LEGION INTO BANKRUPTCY,
 
22  DID SHE SEND THE KEYS TO THE BOXES?
 
23       A    OH, YES.
 
24       Q    DID SHE DISCUSS WITH YOU THE WORK THAT SHE HOPED
 
25  WOULD BE CARRIED OUT FROM THE ASSETS WHICH COULD BE DERIVED
 
26  FROM THE CERTIFICATES?
 
27       A    YES.
 
28       Q    WHAT DID SHE SAY?
			
			

page 712
 
 
 
 1       MR. MUSSELMAN:  RELEVANCE.  HEARSAY.
 
 2       MR. LANE:  IT’s A FRAUD CAUSE, YOUR HONOR.
 
 3       THE COURT:  OVERRULED.
 
 4       THE WITNESS:  I DON'T KNOW HOW MUCH TO ANSWER THIS, BUT
 
 5  SHE HAD BECOME TOTALLY DISGUSTED AND DISILLUSIONED.  WHEN
 
 6  SHE DISCOVERED HER MONEY WOULD BE ABLE TO — TO DO SOME
 
 7  GOOD IN THE CAUSES SHE BELIEVED IN, WHICH IN GENERAL WERE
 
 8  CONSERVATIVE CAUSES, SHE THEN — MATTER OF FACT, SHE
 
 9  SAID — I THINK IN THE EVIDENCE SOMEWHERE, SHE SAID NOW
 
10  THAT I — NOW I FEEL THAT I CAN GO TO WORK AND EARN SOME
 
11  MORE MONEY.
 
12            SHE EMBRACED EVERYTHING THAT LIBERTY LOBBY AND THE
 
13  I.H.R. WAS DOING — WERE DOING, AND, OF COURSE, THE
 
14  FOUNDATION FOR DEFENSE OF THE FIRST AMENDMENT, WHICH, YOU
 
15  KNOW, SHE SENT A LARGE CHECK EVERY THREE MONTHS.  SHE WOULD
 
16  SEND A DIVIDEND CHECK AMOUNTING TO ROUGHLY 7,000, $6500.
 
17
 
18  BY MR. LANE:
 
19       Q    TO WHO?
 
20       A    THE FOUNDATION FOR DEFENSE OF THE FIRST AMENDMENT.
 
21       Q    WAS THERE ANY OPPOSITION TO YOUR RECEIVING
 
22  THESE — THE CERTIFICATES?
 
23       A    YES.
 
24       Q    WHAT WAS THE OPPOSITION, MR. CARTO?
 
25       A    WELL, YOU WANT ME TO GET IN EVERYTHING I HAD TO DO
 
26  TO PROSECUTE THIS THING?
 
27       Q    YES.  HOW DID YOU PROSECUTE THIS MATTER?
 
28       A    WELL, AFTER WRITING THIS LETTER TO MRS. FURR
			
			

page 713
 
 
 
 1  RETURNING — AFTER RETURNING TO THE UNITED STATES, THEN I
 
 2  TALKED WITH HER AFTER SHE GOT THE LETTER.  AND SHE TOLD ME
 
 3  TO GO AHEAD.  THERE WERE MINUTES DRAWN UP, AND I WAS MADE A
 
 4  POWER OF ATTORNEY.  I ALSO DISCUSSED THIS AT SOME LENGTH
 
 5  WITH MR. FISCHER, WHO LIVED ABOUT 10 MILES FROM ME.  HE WAS
 
 6  IN A UNIQUE POSITION TO HELP.
 
 7            I WOULD NOT HAVE DONE IT IF IT HADN'T BEEN FOR
 
 8  HIM.  I COULDN'T HAVE DONE IT.  I KNEW NOTHING ABOUT
 
 9  SWITZERLAND.  HE HAD GONE TO SCHOOL THERE.  HE HAD MANY
 
10  FRIENDS THERE.  HE SPOKE FRENCH LIKE A NATIVE BECAUSE HE
 
11  WAS — HE WAS A NATIVE FRENCH OR A NATIVE FRANCO.
 
12       Q    DID HE KNOW MISS FARREL?
 
13       A    YES, HE KNEW MISS FARREL.
 
14            HE WAS FLUENT IN GERMAN AND SPANISH.  HE HAD A LOT
 
15  OF CONTACTS IN BRITAIN.  HE’s THE ONE THAT GOT THE ATTORNEYS
 
16  IN LONDON, THE ATTORNEYS IN SWITZERLAND.  HE’s THE ONE THAT
 
17  MADE THE ROUND-THE-WORLD TRIP ON HIS OWN NICKEL.  AND HAD IT
 
18  NOT BEEN FOR THE EXPERTISE AND KNOWLEDGE IN THE FIELDS THAT
 
19  I HAD NO KNOWLEDGE WHATSOEVER, OF COURSE I WOULDN'T HAVE
 
20  BEEN SO FOOLHARDY TO UNDERTAKE IT, EVEN SO IT WAS SO RISKY.
 
21       Q    DID YOU EVER SEE THE WILL THAT MISS FARREL LEFT?
 
22       A    YES.
 
23       Q    WAS THE LEGION A BENEFICIARY IN THAT WILL?
 
24       A    NO.
 
25       Q    DID THE WILL LEAVE ALL OF THE ESTATE,
 
26  MISS FARREL’s ESTATE, TO JOAN ALTHAUS?
 
27       A    YES.
 
28       Q    WHAT WAS MISS ALTHAUS' POSITION ABOUT THE WILL?
			
			

page 714
 
 
 
 1       MR. MUSSELMAN:  HEARSAY AND RELEVANCE.
 
 2       THE COURT:  OVERRULED.  IT’s NOT FOR THE TRUTH OF THE
 
 3  MATTER, BUT TO SHOW WHY HE’s GOING TO HAVE TO DO SOME WORK
 
 4  TO GET THE MONEY.
 
 5       THE WITNESS:  I MUST SAY THAT IMMEDIATELY UPON HER
 
 6  DEATH, WHICH WAS RATHER UNEXPECTED, JOAN ALTHAUS, WHO HAD
 
 7  COMMITTED TO MISS FARREL, WHO TOLD ME AND TOLD MY WIFE THAT
 
 8  SHE HAD TOLD JOAN ALTHAUS AND JOAN ALTHAUS HAD AGREED UPON
 
 9  HER DEATH SHE WOULD CONTACT ME AND AID ME IN DOING
 
10  EVERYTHING NECESSARY TO COLLECT THE ASSETS OF NECA.
 
11
 
12  BY MR. LANE:
 
13       Q    NECA?
 
14       A    OF NECA CORPORATION.
 
15       Q    RIGHT.
 
16       A    INSTEAD OF DOING THAT, HOWEVER, UPON HER DEATH,
 
17  SHE NOT ONLY FAILED TO CONTACT ME, BUT AFTER I — I
 
18  RELATED — BECAME CURIOUS AND CALLED ED, TOLD ME SHE HAD
 
19  DIED, THEN I CALLED JOAN ALTHAUS.  AND SHE EFFECTED AN
 
20  OUTRAGE THAT I WAS BOTHERING HER.  WHAT RIGHT DID I HAVE TO
 
21  BOTHER HER.  SO I KNEW THAT THERE WAS DIRTY WORK AFOOT.  SO
 
22  I THEN MADE THE TRIP TO SWITZERLAND AND — AND SUBSEQUENTLY
 
23  DECIDED TO GO AFTER THE MONEY IN SPITE OF THE OPPOSITION.
 
24            SHE HIRED A VERY, VERY WELL KNOWN, VERY IMPORTANT
 
25  ATTORNEY IN LAUSANNE, LAST NAME BOURGEOIS (PHONETICS).  I
 
26  CAN'T THINK OF THE FIRST NAME.  AND HE WAS A FORMIDABLE
 
27  FORCE.  HE WAS VERY, VERY WELL CONNECTED.  MATTER OF FACT,
 
28  HE WAS THE BOYFRIEND OF A HIGH SWISS OFFICIAL AT THAT TIME
			
			

page 715
 
 
 
 1  WHO SUBSEQUENTLY WAS DRIVEN OUT OF OFFICE FOR CORRUPTION.
 
 2       Q    ALL RIGHT.  BACK TO THE ESTATE.  IT’s AN
 
 3  INTERESTING STORY, IT SEEMS.  SEE IF THE JUDGE WANTS TO HEAR
 
 4  THE WHOLE STORY.
 
 5       THE COURT:  JUST BECAUSE SOMETHING IS INTERESTING
 
 6  DOESN'T MAKE IT RELEVANT.
 
 7       MR. LANE:  THIS ISN'T AN EXCEPTION TO THE HEARSAY RULE
 
 8  ALSO, YOUR HONOR.
 
 9
 
10  BY MR. LANE:
 
11       Q    WHAT WAS THE STATE OF THE FINANCES OF THE LEGION
 
12  AT THE TIME OF THE DEATH OF MISS FARREL?
 
13       A    THE LEGION, OF COURSE, WAS EFFECTIVELY BANKRUPT,
 
14  NOT — AND WOULD YOU LIKE ME TO EXPLAIN WHY?
 
15       Q    YES.
 
16       A    BECAUSE, OF COURSE, THAT TIME THIS WAS, THIS WAS
 
17  AFTER THE ARSON OF JULY 4, 1984, WHICH TOTALLY DESTROYED THE
 
18  OFFICE.  ALL THE BOOKS THAT WERE NOT BURNT UP WERE RENDERED
 
19  JUNK BY — BECAUSE THEY GOT SO WET.
 
20       Q    DID ANY BOOKS SURVIVE?
 
21       A    A FEW BOOKS SURVIVED THAT WERE IN A DETACHED
 
22  STORAGE AREA IN TORRANCE ON CRENSHAW — CABRILLO.  BUT
 
23  OTHERWISE, IT WAS — IT WAS TOTALLY DESTROYED, EVERYTHING.
 
24       Q    WERE THE BOOKS THE MAJOR ASSET OF THE LEGION
 
25  BEFORE THE FIRE?
 
26       A    YES, INDEED.
 
27       Q    WERE THERE ANY OTHER ASSETS OF THE LEGION?
 
28       A    YES, THERE WERE.  I THINK JUST AT THAT TIME,
			
			

page 716
 
 
 
 1  PROBABLY ONLY TWO COMPUTERS AND DESKS AND, OF COURSE, FILES
 
 2  AND VALUABLE FILES, RESEARCH FILES AND OFFICE FILES,
 
 3  BUSINESS FILES.  AND ALL THE DESKS WERE DESTROYED AND
 
 4  UNUSABLE.
 
 5       Q    DID ANY ASSETS SURVIVE THE FIRE OTHER THAN THE FEW
 
 6  BOOKS?
 
 7       A    THERE WERE NONE.  THE BANK ACCOUNT WASN'T WORTH
 
 8  ANYTHING.
 
 9       Q    HOW MUCH WAS THE BANK ACCOUNT?
 
10       A    IT WAS — I DON'T KNOW.  I THINK PROBABLY
 
11  MRS. CARTO COULD TELL YOU BETTER THAN THAT.
 
12       Q    WAS IT UNDER $5,000?
 
13       A    WHATEVER IT WAS, I CAN ASSURE YOU THE OBLIGATIONS,
 
14  EVEN WITHOUT THE FIRE, WERE IN EXCESS OF THAT.
 
15       Q    WHAT WERE THE OBLIGATIONS, IF YOU RECALL?
 
16       A    IN 1984, I — I DON'T KNOW.  IT WAS — IT WAS
 
17  DURING THE TIME OF THE FIRST MERMELSTEIN TRIAL, AND WE WERE
 
18  MAKING --
 
19       MR. MUSSELMAN:  OBJECTION.  HE TESTIFIED HE DOESN'T
 
20  KNOW WHAT THE OBLIGATIONS WERE.
 
21       THE COURT:  SUSTAINED.
 
22       MR. LANE:  THESE ARE THE FACTORS, THOUGH.
 
23       THE COURT:  SUSTAINED IT.  IT’s TOO SPECULATIVE.
 
24
 
25  BY MR. LANE:
 
26       Q    WAS THE LEGION EVER PAYING ITS OWN LAWYERS --
 
27       A    NO.
 
28       Q    — TO DEFEND ITSELF?
			
			

page 717
 
 
 
 1       A    ABSOLUTELY NOT.
 
 2       Q    I THINK YOU HEARD IT SUGGESTED IN THE COURTROOM
 
 3  THAT THE — YOU COULD HAVE GONE OUT AND GOTTEN SOME LAWYERS
 
 4  ON A CONTINGENCY BASIS.  YOU HEARD THAT SUGGESTED?
 
 5       A    YOU MEAN IN SWITZERLAND?
 
 6       Q    YES.  DID YOU HEAR IT SUGGESTED?
 
 7       A    YES.
 
 8       Q    DID YOU TRY TO SECURE COUNSEL ON A CONTINGENCY
 
 9  BASIS?
 
10       A    ONLY ONCE.
 
11       Q    WHAT WERE YOU TOLD BY THE LAWYER?
 
12       A    IT’s ILLEGAL IN SWITZERLAND.
 
13       MR. MUSSELMAN:  OBJECTION.  CALLS FOR LEGAL CONCLUSION
 
14  AND OBVIOUSLY HEARSAY.  IF IT’s TRUE, IT’s HEARSAY.
 
15       THE COURT:  OVERRULED.  I'M NOT TAKING IT FOR THE TRUTH
 
16  NECESSARILY.
 
17
 
18  BY MR. LANE:
 
19       Q    BEFORE YOU EMBARKED UPON THIS — WITHDRAW THAT.
 
20            WHO PAID FOR YOUR TRIP TO SWITZERLAND FOLLOWING
 
21  THE DEATH OF MISS FARREL?
 
22       A    WELL, I DID PERSONALLY, PUT A LOT ON MY PERSONAL
 
23  CREDIT CARD.  AND LIBERTY LOBBY.
 
24       Q    BEFORE YOU EMBARKED UPON THIS SEVERAL-YEAR EFFORT
 
25  TO REALIZE SOME OF THE ASSETS OF THE — FOLLOWING THE DEATH
 
26  OF MISS FARREL, DID YOU ENTER INTO AN AGREEMENT WITH THE
 
27  LEGION REGARDING THAT EFFORT YOU WERE CONSIDERING MAKING?
 
28       A    I CERTAINLY DID.
			
			

page 718
 
 
 
 1       Q    WHAT DID YOU DO?  WHAT WAS SAID?
 
 2       A    WELL, IT’s PRETTY WELL OUTLINED IN THE
 
 3  EXHIBIT 162.
 
 4       Q    THAT’s A LETTER TO MISS FURR FROM YOU?
 
 5       A    THIS IS MY LETTER TO MRS. FURR, DATED
 
 6  SEPTEMBER 14, 1985, WHICH I WROTE THE DATE AFTER RETURNING.
 
 7  AND THIS IS — THE TERMS THERE ARE REFLECTED IN THE --
 
 8  EVERYTHING — EVERYTHING THAT HAPPENED SUBSEQUENTLY.
 
 9       Q    WHAT DID YOU TELL MISS FURR?
 
10       A    I TOLD THEM THAT --
 
11       MR. MUSSELMAN:  OBJECTION.  VAGUE AS TO TIME.
 
12       THE COURT:  OVERRULED.  TO THIS DATE HERE.
 
13       THE WITNESS:  WHAT DID I TELL IN THE LETTER?
 
14
 
15  BY MR. LANE:
 
16       Q    YES.
 
17       A    I TOLD HER IN THE LETTER THAT THERE WAS — THERE
 
18  WAS NO WAY THE LEGION COULD PROSECUTE THIS CLAIM, NO MATTER
 
19  HOW — JUST THAT WE HAD EVERY RIGHT TO NECA CORPORATION AND
 
20  WE WERE COMPLETELY ON THE DEFENSIVE BECAUSE OF WHAT WAS
 
21  GOING ON IN SWITZERLAND, AND THAT IN ORDER TO DO ANYTHING
 
22  ABOUT IT, I WOULD HAVE TO FIND A NEW LAWYER IMMEDIATELY IN
 
23  SWITZERLAND.  I POINTED OUT THAT WAS EXTREMELY EXPENSIVE AND
 
24  WOULD TAKE A LOT OF MY TIME, WHICH I DIDN'T HAVE MUCH OF.
 
25  AND I SAID THAT I HAD NO IDEA WHAT THIS WOULD COST, WHETHER
 
26  WE COULD RECOVER ANYTHING, BUT IF I WAS GOING TO DO IT, I
 
27  HAD TO HAVE COMPLETE ASSURANCE AND BACKING OF THE BOARD THAT
 
28  IF I WERE TO RAISE THE MONEY, I WOULD HAVE TOTAL SAY-SO ON
			
			

page 719
 
 
 
 1  HOW THE FUNDS WERE DISTRIBUTED.
 
 2       Q    DID YOU INDICATE SOME OF THE FUNDS WOULD GO TO THE
 
 3  LEGION?
 
 4       A    OH, YES.
 
 5       Q    AND HOW DID MISS FURR RESPOND?
 
 6       MR. MUSSELMAN:  HEARSAY.
 
 7       THE COURT:  OVERRULED.
 
 8       THE WITNESS:  I CALLED HER IN A COUPLE OF DAYS AFTER
 
 9  SHE HAD RECEIVED THIS.  IN THE MEANTIME, I HAD A
 
10  CONVERSATION WITH HENRY FISCHER.  AND MRS. FURR SAID IF YOU
 
11  THINK YOU CAN DO IT, YOU CAN RAISE THE MONEY TO DO IT, WHY
 
12  THEN, GO AHEAD.  WE NEEDED MONEY VERY BADLY.  SO I DID.  I
 
13  DECIDED TO GO AHEAD WITH IT.
 
14
 
15  BY MR. LANE:
 
16       Q    IN YOUR JUDGMENT AS THE — AS AN INCORPORATOR OF
 
17  THE LEGION, A MAN WHO HAD BEEN ASSOCIATED WITH THE LEGION
 
18  FOR MANY, MANY YEARS, A MAN WHO HAD A CONTRACT THAT SAID YOU
 
19  CONTROLLED THE LEGION, DID THE LEGION HAVE THE CAPACITY TO
 
20  PROSECUTE THE FARREL ESTATE?
 
21       A    NO WAY.
 
22       Q    DID YOU BELIEVE IT WOULD BE MORE EXPENSIVE AT THAT
 
23  TIME TO PROSECUTE THE FARREL ESTATE THAN IT WOULD BE TO
 
24  DEFEND THE LEGION AGAINST MR. MERMELSTEIN?
 
25       A    DID I THINK IT WOULD BE MORE EXPENSIVE TO GO AFTER
 
26  THE FARREL ESTATE THAN IT WOULD BE TO DEFEND AGAINST
 
27  MERMELSTEIN?
 
28       Q    YES.
			
			

page 720
 
 
 
 1       A    YES.
 
 2       Q    AFTER MISS FARREL AGREED TO YOUR PROPOSAL, WHAT
 
 3  DID THE BOARD DO, IF ANYTHING?
 
 4       A    THE BOARD PASSED SOME MINUTES MEMORIALIZING THIS
 
 5  AND GAVE ME A — A POWER OF ATTORNEY TO GO AHEAD WITH THIS.
 
 6       Q    ANYONE ELSE GIVEN A POWER OF ATTORNEY?
 
 7       A    MR. FISCHER WAS, OF COURSE, AND ALSO MRS. CARTO
 
 8  WAS AT ONE TIME.
 
 9       Q    DID THE LEGION INVEST ANY MONEY IN THE PURSUIT OF
 
10  THE FARREL ASSETS?
 
11       A    NO.
 
12       Q    NOT ANY MONEY AT ALL?
 
13       A    WELL, I DON'T THINK SO.  MAYBE SOME POSTAGE
 
14  STAMPS.
 
15       Q    OTHER THAN POSTAGE STAMPS, OTHER THAN POSTAGE
 
16  STAMPS?
 
17       A    I DON'T THINK SO.
 
18       Q    THAT WAS YOUR AGREEMENT --
 
19       A    THAT WAS IT.
 
20       Q    — WITH THE LEGION, WAS IT NOT?
 
21       A    YES, SIR.
 
22       Q    WHAT DID YOU DO TO PROSECUTE THE MATTER?  YOU SAID
 
23  YOU ALREADY TALKED WITH HENRY FISCHER.  YOU HAD AN
 
24  ARRANGEMENT WITH THE LEGION.  WHAT DID YOU DO NEXT?
 
25       A    WELL, FISCHER WENT OVER THERE AT HIS OWN EXPENSE
 
26  AS PER OUR AGREEMENT.
 
27       Q    WHEN WAS THAT?  WHAT YEAR?
 
28       A    THAT WAS RIGHT AFTER THAT.  HE WENT OVER THERE AND
			
			

page 721
 
 
 
 1  STARTED TALKING IF A LAWYER — TO FIND A LAWYER.
 
 2       Q    HOW LONG DID MR. FISCHER DEVOTE TIME TO THIS
 
 3  MATTER?
 
 4       A    WELL, THAT WAS 19- — MID 1984 UP THROUGH — UP
 
 5  THROUGH 1971 (SIC).
 
 6       Q    NOW --
 
 7       A    1991, EXCUSE ME.
 
 8       Q    YEARS?
 
 9       A    SEVEN.
 
10       Q    SEVERAL YEARS?
 
11       A    YES.
 
12       Q    AND WHERE DID MR. FISCHER LIVE AT THAT TIME?
 
13       A    AT THAT TIME, HE WAS LIVING IN SAN DIEGO COUNTY.
 
14       Q    I MEAN DURING THE PERIOD OF TIME THAT HE WAS
 
15  PROSECUTING, WAS HE — DID HE MOVE TO EUROPE OR TRAVEL TO
 
16  EUROPE?
 
17       A    YES.  HE’s A NOTORIOUS INTERNATIONAL TRAVELER.
 
18       Q    DO YOU KNOW HOW MANY TRIPS HE TOOK TO EUROPE?
 
19       A    DURING THIS PERIOD OF TIME, HE HAD TO TAKE FOUR OR
 
20  FIVE.
 
21       Q    AND STAYED AT HOTELS?
 
22       A    YES, YES.
 
23       Q    PAID FOR HIS OWN AIRFARE?
 
24       A    YES.
 
25       Q    MADE FREQUENT TELEPHONE CALLS TO YOU?
 
26       A    YES.
 
27       Q    WHAT WAS HE DOING WHEN HE WAS IN EUROPE --
 
28  WITHDRAW THAT.
			
			

page 722
 
 
 
 1            DID YOU SAY HE ALSO WENT TO TOKYO?
 
 2       A    YES.
 
 3       Q    WHAT OTHER PLACES DID HE GO TO?  SINGAPORE?
 
 4       A    YES.
 
 5       Q    WHERE ELSE DID HE GO IN PURSUIT OF THE NECA BEARER
 
 6  CERTIFICATES, IF YOU KNOW?
 
 7       A    I DON'T THINK ANYWHERE ELSE ON THAT PARTICULAR
 
 8  PROJECT.
 
 9       Q    WHAT DID HE DO — WHAT DID MR. FISCHER DO TO
 
10  PURSUE THIS ESTATE, THE ASSETS?
 
11       A    WELL, HE NOT ONLY KEPT IN TOUCH WITH ME, KEPT ME
 
12  ABREAST OF WHAT WAS GOING ON, WE CONFERRED ABOUT NEXT
 
13  MOVES.  HE ALSO COORDINATED MANY OF THE MOVING PARTS.  HE
 
14  HAD ASSOCIATES IN SWITZERLAND WHO HE SENT IN GATHERING
 
15  INFORMATION, SORT OF INTELLIGENCE, WHAT WAS GOING ON, WHAT
 
16  TO EXPECT.  AND THEN — AND ALSO IN LONDON, HE WENT THERE A
 
17  COUPLE OF TIMES.  AND HE WAS — HE, OF COURSE, PUT ME IN
 
18  TOUCH WITH THE — IN SWITZERLAND, THERE WERE ONE, TWO,
 
19  THREE, FOUR, FIVE — THERE WERE SIX DIFFERENT LAWYERS
 
20  INVOLVED IN SWITZERLAND.
 
21       Q    ON YOUR SIDE?
 
22       A    YES, MY SIDE.
 
23       Q    WERE THERE LAWYERS IN ENGLAND?
 
24       A    THAT DOESN'T INCLUDE THE EXPERTS THAT THEY HAD TO
 
25  HIRE.  THEY HAVE A SYSTEM IN SWITZERLAND, THEY CAN'T DO
 
26  ANYTHING WITHOUT THE ADVICE OF AN EXPERT AND GET SOME
 
27  COLLEGE PROFESSOR TO WRITE A PAPER ON IT.  SO IT WAS A LARGE
 
28  NUMBER OF PEOPLE THAT HAD TO BE MANIPULATED.
			
			

page 723
 
 
 
 1       Q    DID MR. FISCHER LOCATE THE ATTORNEYS AND EXPERTS?
 
 2       A    YES.
 
 3       Q    DID YOU MEET — WHEN DID YOU MEET THE FIRST
 
 4  ATTORNEY WHO BECAME INVOLVED IN THIS CASE ON YOUR SIDE?
 
 5       A    WHEN I WENT OVER THERE RIGHT AFTER HER DEATH.
 
 6       Q    DID YOU PAY THAT LAWYER?
 
 7       A    YES.  HE WOULDN'T EVEN GO TO LOS ANGELES WITHOUT
 
 8  BEING PAID.  I HAD TO GIVE HIM 1,000, $2,000 TO ACCOMPANY ME
 
 9  RIGHT ON THE SPOT.
 
10       Q    DID HE MENTION ANYTHING ABOUT A CONTINGENCY FEE ON
 
11  THAT OCCASION?
 
12       A    NO.
 
13       Q    DIDN'T COME UP?  DID YOU MEET ANY OTHER LAWYERS IN
 
14  EUROPE DURING THE FIRST TRIP?
 
15       A    NO, I DON'T THINK I DID.  MRS. CARTO WENT OVER
 
16  THERE AND --
 
17       Q    SHE'LL TESTIFY, PERHAPS.
 
18       A    OKAY.
 
19       Q    I'M ASKING ABOUT YOU.
 
20       A    I DON'T THINK SO, MR. LANE.
 
21       Q    APPROXIMATELY HOW MUCH WAS PAID TO THESE LAWYERS?
 
22       A    WELL, ONE LAWYER ALONE, LAST NAME IS — DO YOU
 
23  WANT THE NAMES?
 
24       Q    YES.
 
25       A    V-U-I-L-L-I-M-I-E-R (SIC), I BELIEVE, FRANCOIS.  I
 
26  BELIEVE HIS FINAL BILL WAS $163,000.
 
27       Q    DID THE LEGION PAY FOR THAT?
 
28       A    OH, NO.
			
			

page 724
 
 
 
 1       Q    WHO PAID FOR THAT?
 
 2       A    I DID.
 
 3       Q    WHERE DID YOU GET THE MONEY?
 
 4       A    I BORROWED THE MONEY.
 
 5       Q    FROM WHO?
 
 6       A    FROM LIBERTY LOBBY.
 
 7       Q    I'M GOING TO SHOW YOU A PART OF WHAT HAS BEEN
 
 8  MARKED A COMPOSITE EXHIBIT, NUMBER 84, AND ASK YOU WHAT
 
 9  THESE DOCUMENTS ARE PAGES 16, 17, 18, 19.
 
10       MR. WAIER:  BEFORE WE GET INTO THAT, YOU HAD REQUESTED
 
11  THE PLAINTIFF TO SEPARATE THOSE OUT.  WE HAVE NOT YET SEEN A
 
12  SEPARATED VERSION.  THAT’s WHY THE REFERENCE TO EXHIBIT 84.
 
13       THE WITNESS:  FOR THE BENEFIT OF MADAM SECRETARY, MY
 
14  MEMORY HAS BEEN REFRESHED.  THE FIRST NAME OF MONSIEUR OR
 
15  MAITRE VUILLEUMIER IS JACQUES, NOT WHAT I SAID,
 
16  J-A-C-Q-U-E-S.
 
17
 
18  BY MR. LANE:
 
19       Q    DO THOSE FOUR PAGES ASSIST YOU IN DETERMINING HOW
 
20  MUCH MONEY WAS PAID TO THE LAWYERS BY YOU FROM ONE SOURCE TO
 
21  ANOTHER OTHER THAN THE LEGION?
 
22       A    YES.
 
23       Q    APPROXIMATELY HOW MUCH MONEY WAS THERE?
 
24       A    THE TOTAL AMOUNT HERE, TOTAL AMOUNT HERE.
 
25       Q    I DON'T THINK THERE’s A TOTAL AMOUNT.
 
26       A    I DON'T THINK THERE’s A TOTAL HERE.  THE TOTAL
 
27  AMOUNT WOULD BE ABOUT CLOSE TO $400,000, BUT THIS DOESN'T
 
28  ACCOUNT FOR ALL OF IT.
			
			

page 725
 
 
 
 1       Q    LET’s GO THROUGH EACH OF THE LAWYERS.  WHO IS THE
 
 2  FIRST LAWYER?
 
 3       A    JACQUES VUILLEUMIER, I'M SORRY, BIDDLE,
 
 4  B-I-D-D-L-E, AND COMPANY.
 
 5       Q    WHAT IS BIDDLE AND COMPANY?
 
 6       A    THE LAW FIRM IN LONDON.
 
 7       Q    WHO RETAINED BIDDLE AND COMPANY?
 
 8       A    MR. FISCHER.
 
 9       Q    DID YOU MEET WITH BIDDLE AND COMPANY?
 
10       A    I MET WITH THE ATTORNEY ON THE ACCOUNT, YES, OR
 
11  THE BARRISTER.
 
12       Q    BARRISTER.  AND HOW MUCH DID YOU PAY THAT FIRM?
 
13       A    ACCORDING TO THIS ACCOUNT, $112,396.97.
 
14       Q    WAS THAT PAID BEFORE THE ESTATE WAS SETTLED?
 
15       A    YES.
 
16       Q    ALL OF IT?
 
17       A    YOU BET.
 
18       Q    WAS THAT ONE OF THE TERMS AND CONDITIONS OF
 
19  THE — THE EMPLOYING THIS BARRISTER?
 
20       A    CASH IN ADVANCE.  WELL, NO, THAT’s NOT TRUE.  THEY
 
21  ALL REQUIRED A SUBSTANTIAL RETAINER AND THEN SUBSEQUENT
 
22  BILLINGS.
 
23       Q    BUT WAS IT ALL PAID FOR THE ESTATE ITSELF?
 
24       A    YES.
 
25       Q    WHO IS THE SECOND ATTORNEY?
 
26       A    JACQUES VUILLEUMIER.
 
27       Q    WHERE WAS HE LOCATED?
 
28       A    LAUSANNE.
			
			

page 726
 
 
 
 1       Q    DID YOU RETAIN HIM?
 
 2       A    (NO ANSWER.)
 
 3       Q    IS THAT A HARD QUESTION?
 
 4       A    IT REALLY IS.  I'M NOT SURE.  ALL I DID WAS PAY
 
 5  THE BILLS.  I DON'T THINK — I DON'T THINK I ACTUALLY --
 
 6  I'M NOT SURE IF I ACTUALLY RETAINED HIM OR NOT, OR MAYBE
 
 7  MRS. CARTO DID.
 
 8       Q    IF YOU ARE NOT SURE, FINE.
 
 9            HOW MUCH WAS HE PAID, ACCORDING TO YOUR RECORDS?
 
10       A    $165,146.97.
 
11       Q    WAS THAT PAID BEFORE THE ESTATE WAS SETTLED?
 
12       A    YES.
 
13       Q    ALL OF IT?
 
14       A    THE LAST PAYMENT WAS MADE ON NOVEMBER 7, 1988.
 
15       Q    WHEN WAS THE FIRST PAYMENT?
 
16       A    NOVEMBER 17, 1986.
 
17       Q    AND REGARDING BIDDLE AND COMPANY, WHEN WAS THAT
 
18  FIRST PAYMENT?
 
19       A    JUNE 23, 1986.
 
20       Q    AND THE LAST PAYMENT?
 
21       A    JANUARY THE 17, 1990.
 
22       Q    DID ANY FUNDS FOR THE — HOW DO YOU PRONOUNCE THE
 
23  GENTLEMAN’s NAME?
 
24       A    “VUILLEUMIER."
 
25       Q    DID ANY OF THE FUNDS FOR PAYING MR. VUILLEUMIER
 
26  COME FROM THE LEGION?
 
27       A    NO.
 
28       Q    DID ANY ONE OF THE LEGION PLAY ANY PART IN RAISING
			
			

page 727
 
 
 
 1  FUNDS TO PAY ANY OF THE LAWYERS?
 
 2       A    NO.
 
 3       Q    WHERE DID THE FUNDS COME FROM TO PAY
 
 4  MR. VUILLEUMIER?
 
 5       A    LIBERTY LOBBY.  THIS IS AN ACCOUNT, I BELIEVE,
 
 6  ONLY OF LIBERTY LOBBY’s EXPENSES.  I DON'T THINK THIS
 
 7  INCLUDES F.D.F.A. EXPENSES.
 
 8       Q    ALL RIGHT.  AND THE NEXT LAW FIRM?
 
 9       A    THAT’s ANOTHER JACQUES, M-O-R-I-E-R, HYPHEN,
 
10  G-E-N-O-U-D.
 
11       Q    WHERE WAS THAT GENTLEMAN LOCATED AT THE RELEVANT
 
12  TIME?
 
13       A    LAUSANNE.
 
14       Q    WHEN WAS THE FIRST PAYMENT MADE TO HIM?
 
15       A    JUNE 30, 1986.
 
16       Q    AND THE LAST PAYMENT?
 
17       A    FEBRUARY — MARCH 13, 1987.
 
18       Q    HOW MUCH WAS PAID TO HIM?
 
19       A    18,000.
 
20       Q    AND THE NEXT ONE?
 
21       THE COURT:  THIS IS A GOOD TIME TO TAKE AN AFTERNOON
 
22  BREAK.  SEE YOU IN 10 MINUTES.
 
23
 
24                   (PROCEEDINGS RECESSED.)
 
25
 
26  BY MR. LANE:
 
27       Q    WHAT WAS THE LAST ONE WE TALKED ABOUT?
 
28       A    I THINK MORIER-GENOUD.  THAT FIGURE IS SHORT
			
			

page 728
 
 
 
 1  DEFINITELY.  $18,000 IS ONLY PARTIAL.
 
 2       Q    IS THAT — YOU MEAN HE WAS PAID MORE MONEY BY
 
 3  LIBERTY LOBBY OR HE WOULD HAVE BEEN PAID MORE MONEY BY OTHER
 
 4  SOURCES?
 
 5       A    HE WAS PAID MORE BY OTHER SOURCES.  I'M SURE
 
 6  MR. HUTZEL IS CORRECT AS FAR AS THE LIBERTY LOBBY
 
 7  DISBURSEMENT.
 
 8       Q    WAS HE PAID BY THE LEGION?
 
 9       A    OH, NO.
 
10       Q    WHOSE THE NEXT?
 
11       A    MAURICE CRUCHON, C-R-U-C-H-O-N.
 
12       Q    WHO IS MAURICE CRUCHON?
 
13       A    BRILLIANT BUT TROUBLED LAWYER.
 
14       Q    EDITORS TEND TO DO THESE THINGS.
 
15            HE WAS A LAWYER IN WHAT CITY?
 
16       A    GENEVA.  HE HAD AN OFFICE IN LAUSANNE.
 
17       Q    DID YOU RETAIN HIM?
 
18       A    YES.
 
19       Q    AND HOW MUCH DID LIBERTY LOBBY PAY TOWARD HIS FEE?
 
20       A    2,000, BUT THAT IS ONLY PARTIAL.  HE WAS PAID AT
 
21  THE FINAL SETTLEMENT, I THINK, AROUND AT LEAST $50,000 AT
 
22  LEAST.
 
23       Q    AND IS THIS THE GENTLEMAN YOU PAID ONE OR TWO
 
24  THOUSAND DOLLARS TO, DID YOU SAY?
 
25       A    NO.  THAT WAS MR. CHRISTOPH DREHYER.
 
26       Q    WE HAVEN'T COME TO THAT?
 
27       A    NO.  WE'RE GETTING THERE.
 
28       Q    PAGE 16; IS THAT RIGHT?  NOW PAGE 17.
			
			

page 729
 
 
 
 1       A    THE FIRST PAYMENT THERE WAS DAVID HOOPER, $2500.
 
 2  THAT WOULD BE PART OF THE BIDDLE AND COMPANY EXPENDITURE.
 
 3  HE WAS A PARTNER WITH THEM.
 
 4       Q    DID YOU EVER AUTHORIZE HIM TO SEND DOCUMENTS TO
 
 5  ANYBODY?
 
 6       A    NO, NOT INDEED.  HE’s IN TROUBLE.
 
 7       Q    LIBERTY LOBBY PAID HIM $2500; IS THAT CORRECT?
 
 8       A    YES.
 
 9       Q    WHAT YEAR WAS THAT?
 
10       A    HIM PERSONALLY?  THAT WAS DECEMBER 31, 1985.
 
11       Q    AND THE NEXT LAWYER ON THE LIST, EXHIBIT 84,
 
12  PAGE 17?
 
13       A    THAT WAS MR. ED COUGHLIN, THE AMERICAN LAWYER IN
 
14  GENEVA.  AND THE TOTAL IS $5909.35 FROM OCTOBER '85 THROUGH
 
15  MAY OF '87.
 
16       Q    AND THAT WAS ALL PAID BY LIBERTY LOBBY; IS THAT
 
17  CORRECT?
 
18       A    YES.
 
19       Q    AND THE NEXT LAWYER?
 
20       A    THAT WAS MR. DREHYER, WHO IS A PARTNER OF
 
21  MR. COUGHLIN.
 
22       Q    HOW MUCH WAS HE PAID?
 
23       A    HE WAS PAID $2671.
 
24       Q    THAT WAS PAID BY LIBERTY LOBBY?
 
25       A    YES.
 
26       Q    WHEN WAS THE FIRST PAYMENT MADE?
 
27       A    THE FIRST APRIL 25, 1985, AND THE LAST ONE,
 
28  JUNE 27, 1986.
			
			

page 730
 
 
 
 1       Q    AND THE NEXT LAWYER?
 
 2       A    MULLINAX, M-U-L-L-I-N-A-X, AND ALEXANDER.  THOSE
 
 3  ARE THE LAWYERS IN NORTH CAROLINA.  AND THE FIGURE HERE IS
 
 4  ONLY PARTIAL.  IT’s ONLY 138.  ACTUALLY, IT WAS IN THE
 
 5  THOUSANDS, BUT APPARENTLY LIBERTY LOBBY ONLY PAID 138.
 
 6       Q    AND IS THAT TOTAL WELL OVER $300,000?
 
 7       A    YES.  PRETTY CLOSE TO IT.
 
 8       Q    WHAT IS PAGE 18?
 
 9       A    YES, IT IS OVER $300,000.
 
10            PAGE 18?
 
11       Q    YES, SIR.
 
12       A    ALL RIGHT.  NOW, THAT WAS — OH, THESE ARE
 
13  EXPENSES FOR TRAVEL FOR BOTH MYSELF AND MRS. CARTO.
 
14       Q    WHAT DO THEY REVEAL?
 
15       A    TRAVEL EXPENSES, HOTEL, AIR, PAYMENT OF CREDIT
 
16  CARDS; LONDON, LAUSANNE, AND GENEVA.
 
17       Q    IT’s BROKEN BY MONTHS?
 
18       A    YES.
 
19       Q    WHAT IS THE AMOUNT SPENT IN SEPTEMBER 1985?
 
20       A    WELL, THE AMOUNT HERE APPEARS TO BE $11,257.24.  I
 
21  TAKE IT THAT’s THE TOTAL OF THE LISTED EXPENDITURES.
 
22       Q    DOES THAT COVER SEPTEMBER '85 TO NOVEMBER '85?
 
23       A    IT HAS A DATE OF JULY THE 20TH, 1989.  BUT YOU ARE
 
24  RIGHT.  OKAY.  SEPTEMBER, NOVEMBER '85, APRIL '86, FEBRUARY
 
25  '87 AND JUNE '87.
 
26       Q    AND DO THEY REPRESENT TRIPS THAT EITHER YOU OR
 
27  MRS. CARTO TOOK?
 
28       A    YES.
			
			

page 731
 
 
 
 1       Q    AND ACTUAL EXPENSES FOR THOSE TRIPS?
 
 2       A    PARDON?
 
 3       Q    ACTUAL EXPENSES FOR THE TRIPS?
 
 4       A    ACTUAL OUT-OF-POCKET EXPENSES.
 
 5       Q    WHO PAID FOR THAT?
 
 6       A    THIS WAS PAID BY LIBERTY LOBBY.
 
 7       Q    DID YOU HAVE ADDITIONAL EXPENSES OF YOUR OWN WHICH
 
 8  WERE NOT PAID FOR BY LIBERTY LOBBY?
 
 9       A    I'M QUITE SURE.
 
10       Q    THEY'RE NOT ON THE LIST PROVIDED BY LIBERTY LOBBY?
 
11       A    THAT’s CORRECT.
 
12       Q    WHAT IS PAGE 19, EXHIBIT 84?
 
13       A    THAT’s JULY 1986, MAY 1988, AND APRIL 1986.  AND
 
14  THESE ARE, AGAIN, AIR TICKETS AND HOTEL.  AND THESE COULDN'T
 
15  POSSIBLY BE COMPLETE, BUT THE TOTAL IS APPROXIMATELY ABOUT
 
16  3600.  I THINK — NO, THAT’s RIGHT.
 
17       Q    NOW THIS, THEN, REPRESENTS TRIPS THAT YOU OR
 
18  MRS. CARTO TOOK AND ONE, TWO, THREE, FOUR, FIVE, SIX,
 
19  SEVEN — EIGHT TRIPS TO EUROPE; IS THAT RIGHT?
 
20       A    YES, SIR.
 
21       Q    THERE’s NOTHING ON THERE ABOUT TAXIS OR FOOD OR
 
22  OTHER INCIDENTALS OF TRAVEL, IS THERE?
 
23       A    NO.
 
24       Q    WHO PAID FOR THAT?
 
25       A    THE TRAVELER, MYSELF.
 
26       Q    YOU OR YOUR WIFE?
 
27       A    MYSELF OR MRS. CARTO.
 
28       Q    NOW, IN ADDITION TO THE MORE THAN $300,000 PAID BY
			
			

page 732
 
 
 
 1  LIBERTY LOBBY, THE SUMS THAT YOU AND THE WIFE PAID
 
 2  YOURSELVES, DID ANYONE ELSE CONTRIBUTE TO THE COST OF THE
 
 3  LITIGATION?
 
 4       A    YES.
 
 5       Q    WHO?
 
 6       A    THE FOUNDATION FOR THE DEFENSE OF THE FIRST
 
 7  AMENDMENT.
 
 8       Q    HOW MUCH DID THE FOUNDATION CONTRIBUTE?
 
 9       A    I'M SORRY, I CAN'T — I CAN'T TELL YOU.  I DON'T
 
10  HAVE THAT.
 
11       Q    YOU DON'T KNOW OR WON'T TELL US?
 
12       A    I DON'T HAVE THE INFORMATION.
 
13       Q    ANY IDEA?  I DON'T WANT YOU TO GUESS.
 
14       A    NO, I REALLY COULDN'T DO THAT BECAUSE, FOR
 
15  EXAMPLE, I KNOW THAT MORIER-GENOUD, HIS FEE WAS IN THE --
 
16  HAD TO BE IN THE HIGH FIVE FIGURES.
 
17       MR. MUSSELMAN:  HE ALREADY TESTIFIED.  HE CAN ANSWER
 
18  THE QUESTION.
 
19       THE COURT:  SUSTAINED.
 
20
 
21  BY MR. LANE:
 
22       Q    NOW, WHAT IS IT THAT YOU DID AND WHAT DID YOUR
 
23  LAWYERS DO TO SECURE THE NECA CERTIFICATES?
 
24       A    WELL, I, ALONG WITH MR. FISCHER AND ALONG WITH
 
25  MRS. CARTO, WE HAD TO COORDINATE, KEEP ALL THE BALLS IN THE
 
26  AIR.  WE HAD TO MEET ALL THE DEADLINES, BE SURE THAT THEY
 
27  WERE MET FOR THE COURT.  WE HAD TO BE SURE THAT THE CASES
 
28  WERE PRESENTED AS WELL AS POSSIBLE, ALTHOUGH, OF COURSE,
			
			

page 733
 
 
 
 1  IT’s NOT EASY TO OPERATE IN SWITZERLAND.  THE LEGAL SYSTEM
 
 2  IS COMPLETELY DIFFERENT, BASED ON THE NAPOLEONIC CODE.  MANY
 
 3  TELEPHONE CALLS, TRANSCONTINENTAL CALLS, LETTERS.  IT WAS A
 
 4  MATTER OF CONSTANT PREOCCUPATION THAT I FIT IN WITH OTHER
 
 5  THINGS THAT I WAS DOING.
 
 6            I HAD TO PERSONALLY DISCUSS THIS WITH THE LAWYERS
 
 7  WHEN I WENT OVER TO SWITZERLAND, IN NORTH CAROLINA.  I
 
 8  DIDN'T GO TO SINGAPORE.  I DIDN'T GO TO LONDON.  BUT IT WAS
 
 9  CONSTANT COMMUNICATION AND DECISIONS AS TO — AS TO THE
 
10  NEXT STEP TO TAKE IN A LEGAL WAY, LAYING OUT STRATEGY AND
 
11  FINDING PEOPLE TO FULFILL THE — THE NICHES THAT WERE
 
12  CREATED IN THAT, WORRYING ABOUT WHEN LAWYERS WOULD MISS
 
13  DEADLINES AND NEW LAWYERS WOULD, VIRTUALLY FULL TIME.
 
14       Q    IF YOU HAD — WITHDRAW THAT.
 
15            WHO MADE THE DETERMINATION AS TO HOW FUNDS SHOULD
 
16  BE DISTRIBUTED FOR THE LEGION?
 
17       A    I DID.
 
18       Q    IF ALL OF THE FUNDS REALIZED FOR YOUR SHARE --
 
19  AND THAT INCLUDES ANYONE ASSOCIATED WITH YOU — OF THE
 
20  ASSETS FROM THE FARREL OR NECA CERTIFICATES, IF THEY WERE
 
21  ALL PAID TO THE LEGION FOR THE SURVIVAL OF FREEDOM, WHO
 
22  WOULD HAVE DISTRIBUTED THOSE FUNDS?
 
23       A    I WOULD.
 
24       Q    WOULD YOU HAVE DISTRIBUTED THEM ANY DIFFERENTLY
 
25  FROM THE WAY YOU DID DISTRIBUTE THEM?
 
26       MR. MUSSELMAN:  CALLS FOR SPECULATION.
 
27       THE COURT:  OVERRULED.
 
28       THE WITNESS:  NO.
			
			

page 734
 
 
 
 1  BY MR. LANE:
 
 2       Q    WHY IS THAT?
 
 3       A    BECAUSE I PUT THEM WHERE I FELT THEY WOULD DO MOST
 
 4  GOOD IN THE SPECTRUM OF ACTIVITIES THAT I WAS ENGAGED IN.
 
 5       Q    DID YOU KEEP ANY OF THE FUNDS FOR YOURSELF?
 
 6       A    NO.
 
 7       Q    WHAT KIND OF CAR DO YOU DRIVE?
 
 8       A    I DRIVE A 1985 — AT THAT TIME, I HAD A 1981
 
 9  DODGE DART WITH 300,000 MILES ON IT.  I HAVE A — I NOW
 
10  DRIVE A 1985 CUTLASS WITH ONLY 180,000 MILES ON IT.
 
11       Q    YOU HAVE BEEN UPGRADED?
 
12       A    YES.
 
13       Q    THERE WAS TESTIMONY THAT — FROM THE DOCUMENTS
 
14  OFFERED BY THE PLAINTIFFS, WHICH PROVIDED BY THE DEFENDANT,
 
15  THAT $1,750,000 WENT TO LIBERTY LOBBY FROM VIBET AND THAT
 
16  NOTES ACCOMPANIED EACH PAYMENT.  IS THAT CORRECT?
 
17       A    YES.
 
18       Q    HAVE ANY OF THOSE NOTES COME DUE YET?
 
19       A    NO.
 
20       Q    NO SUM IS NOW DUE TO VIBET OR OVERDUE; IS THAT
 
21  CORRECT?
 
22       A    YES.
 
23       Q    OF THAT $1,750,000 ABOUT WHICH THERE HAS BEEN
 
24  TESTIMONY HERE, HOW MUCH REMAINED IN LIBERTY LOBBY?
 
25       A    NOTHING.
 
26       Q    DID YOU ARRANGE FOR THE MONEY TO GO FROM VIBET TO
 
27  LIBERTY LOBBY?
 
28       A    YES.
			
			

page 735
 
 
 
 1       Q    DID YOU ARRANGE FOR THE MONEY TO GO FROM LIBERTY
 
 2  LOBBY SOMEWHERE ELSE?
 
 3       A    YES.
 
 4       Q    DID LIBERTY LOBBY EVER GET PAID BACK ITS OVER
 
 5  $300,000?
 
 6       A    MR. LANE, THAT WOULD BE A MATTER OF ACCOUNTING.
 
 7  MR. HUTZEL WOULD HAVE, I PRESUME, RETIRED THAT DEBT.  I
 
 8  DIDN'T — I DON'T REMEMBER SPECIFYING IT BE DONE.  I DIDN'T
 
 9  THINK IT WAS THAT IMPORTANT, AS LONG AS LIBERTY LOBBY WAS
 
10  PAID MORE THAN PUT OUT.
 
11       Q    WELL, WAS IT — WHAT MONEY — WHAT HAPPENED TO
 
12  THE $1,750,000 WITH VIBET, THROUGH YOU, PUT INTO LIBERTY
 
13  LOBBY?
 
14       A    COULD I BE SPECIFIC?
 
15       Q    YES.
 
16       A    WELL, OF COURSE, IT WAS COMMINGLED WITH LIBERTY
 
17  LOBBY FUNDS.
 
18       Q    WHAT HAPPENED?
 
19       A    NO SEPARATE ACCOUNTING WAS KEPT THEREAFTER.
 
20  HOWEVER, THE MAJOR DRAIN ON LIBERTY LOBBY FOR — FOR THAT
 
21  PERIOD OF TIME AND UP UNTIL LAST — LATE LAST YEAR WAS AN
 
22  AMBITIOUS RADIO PROJECT WE HAD UNDERTAKEN THAT CONCERNED A
 
23  RADIO NETWORK AND OUR EFFORTS TO ESTABLISH THAT AS A GOING
 
24  CONCERN, WHICH WAS ALMOST SUCCESSFUL, BUT THAT’s NOT GOOD
 
25  ENOUGH.  FINALLY RESULTED IN BANKRUPTCY OF THE ENTERPRISE.
 
26       Q    IS IT FAIR TO SAY LIBERTY LOBBY WAS USED AS A
 
27  VEHICLE TO ACCEPT FUNDS FROM VIBET AND PAY THEM OUT TO THIS
 
28  RADIO --
			
			

page 736
 
 
 
 1       A    YES.
 
 2       Q    LIBERTY LOBBY DID NOT PROFIT ONE IOTA FROM THAT
 
 3  TRANSACTION?
 
 4       A    NO.  ALL THE BOOKS WILL CERTAINLY SHOW WE SPENT
 
 5  MORE OVERALL ON THIS PROJECT, WHICH — WHICH WAS FROM, I
 
 6  WOULD SAY, UNTIL OCTOBER OF '95, BEGINNING IN 1988.  THEN WE
 
 7  TOOK IN FROM VIBET.
 
 8       Q    DID YOU BELIEVE THAT THIS RADIO NETWORK APPROACH
 
 9  THAT YOU EMBRACED FOR THAT PERIOD OF TIME WAS CONSISTENT
 
10  WITH THE OBJECTIVES AND GOALS OF THE LEGION?
 
11       A    100 PERCENT.
 
12       Q    WHY?
 
13       A    WELL, THE CHARTER ITSELF, AS I READ EARLIER,
 
14  REFERS TO THE MEDIUM OF RADIO AS BEING ONE OF THE MEDIA THAT
 
15  THE ORIGINAL INCORPORATORS, MR. AND MRS. MATTHEWS, WERE --
 
16  WERE GOING TO USE IN THEIR PUBLICITY CAMPAIGN, WHICH IS ALL
 
17  SPELLED OUT THERE.  SO CERTAINLY, NO INCONSISTENCY AS FAR AS
 
18  THE LEGION FOR THE SURVIVAL OF FREEDOM IS CONCERNED.  ALSO,
 
19  THERE’s NO INCONSISTENCY WITH MISS FARREL’s WISHES BECAUSE
 
20  SHE WAS INTENTLY DESIRING A PROPAGATION OF EDUCATION,
 
21  EDUCATIONAL MESSAGES TO THE AMERICAN PEOPLE THROUGH THE MOST
 
22  ECONOMIC MEANS, WHICH IS RADIO.
 
23       Q    DID YOU DISPENSE SOME FUNDS TO THE LEGION?
 
24       A    YES.
 
25       Q    HOW MUCH?
 
26       A    ABOUT $750,000.
 
27       Q    DOES THAT INCLUDE PAYMENT OF $73,000 TO
 
28  MR. MARCELLUS?
			
			

page 737
 
 
 
 1       A    WELL, TO SCIENTOLOGY, I GUESS.
 
 2       Q    DID MR. MARCELLUS DIRECT YOU TO MAKE THE PAYCHECKS
 
 3  OUT TO THE CHURCH OF SCIENTOLOGY?
 
 4       A    IN THOSE CASES, HE DID, RIGHT.
 
 5       Q    AND DID THAT $750,000 INCLUDE A BONUS FOR
 
 6  MR. MARCELLUS?
 
 7       A    YES.
 
 8       Q    DO YOU KNOW HOW THE REST OF THE MONEY REACHED THE
 
 9  LEGION?  THAT’s APPROXIMATELY 10 PERCENT OF THE 750,000?
 
10       A    WELL, REQUISITIONS FOR CHECKS WERE SENT DIRECTLY
 
11  TO SWITZERLAND TO BE MADE OUT TO PRINTERS, SUPPLIERS, BOOK
 
12  MANUFACTURERS.
 
13       Q    FOR BOOKS WHICH WENT TO THE LEGION?
 
14       A    YES, FOR BOOKS, TO PAY BILLS FOR BOOKS WHICH HAD
 
15  BEEN PRINTED IN WHICH HAD TO BE PAID.  AND THE LEGION COULD
 
16  NOT PAY THESE BILLS.
 
17       MR. LANE:  MAY I HAVE A MOMENT?
 
18       THE COURT:  CERTAINLY.
 
19                             (PAUSE)
 
20  BY MR. LANE:
 
21       Q    PRIOR TO THE SETTLEMENT OF THE FARREL ESTATE, DID
 
22  YOU HAVE TOTAL CONTROL OVER THE ASSETS OF THE LEGION?
 
23       A    YES.
 
24       Q    DID YOU HAVE TOTAL CONTROL OF THE FINANCES OF THE
 
25  LEGION?
 
26       A    YES.
 
27       Q    IF YOU HAD PUT THE MONEY FROM VIBET INTO THE
 
28  LEGION INSTEAD OF THE LIBERTY LOBBY, WHAT WOULD YOU HAVE
			
			

page 738
 
 
 
 1  DONE WITH THE MONEY ONCE IT WAS IN THE LEGION?
 
 2       MR. MUSSELMAN:  CALLS FOR SPECULATION.
 
 3       THE COURT:  OVERRULED.
 
 4       THE WITNESS:  I BELIEVE I ANSWERED THAT QUESTION.  I
 
 5  WOULD DO — HAVE DONE EXACTLY THE SAME THING THAT I DID
 
 6  WITH IT.  I SAY TOTAL CONTROL.  I HAVE TO AMEND THAT.  OF
 
 7  COURSE, AS A — AS MRS. FURR WAS THE SECOND MEMBER, AND
 
 8  PROPERLY NOTHING COULD BE DONE WITHOUT HER CONSENT, BUT SHE
 
 9  GENERALLY AGREED WITH MY OPINIONS.
 
10
 
11  BY MR. LANE:
 
12       Q    SHE HAD, IN WRITING AND VERBALLY, HAD SHE NOT,
 
13  SAID YOU CAN DO WHATEVER YOU WANT WITH THE MONEY WITHOUT
 
14  PUTTING IT INTO THE LEGION?
 
15       A    THAT’s CORRECT.
 
16       Q    ONE MOMENT.
 
17            HOW MANY ATTORNEYS WERE EMPLOYED IN
 
18  NORTH CAROLINA?
 
19       A    WELL, THERE WAS A MR. MONROE REDDEN AND
 
20  MR. ALEXANDER.  AND THEY HAD THEIR PARALEGALS AND
 
21  ASSISTANTS.  I BELIEVE THAT’s ALL.
 
22       Q    WHO PAID FOR THEIR SERVICES?
 
23       A    WELL, I'M NOT SURE, BUT SURELY NOT THE LEGION.
 
24       Q    NOT THE LEGION?
 
25       A    NO, SIR.
 
26       Q    WERE THE LAWYERS WHO WERE ADVOCATING YOUR
 
27  CAUSE — THEY WERE ON YOUR SIDE?
 
28       A    WELL, THEY WERE MY ATTORNEYS, YES.
			
			

page 739
 
 
 
 1       Q    AND DID YOU PAY THEM, YOU KNOW, OR ARRANGE TO HAVE
 
 2  THEM PAID?
 
 3       A    OH, YES.
 
 4       Q    YOU TOLD MRS. FURR ABOUT THE PAYMENTS TO SUN
 
 5  RADIO?
 
 6       A    OF COURSE.
 
 7       MR. MUSSELMAN:  NO FOUNDATION WITH A SUN RADIO SO FAR.
 
 8
 
 9  BY MR. LANE:
 
10       Q    WHAT IS SUN RADIO, MR. CARTO?
 
11       A    SUN RADIO NETWORK WAS THE TRADE NAME FOR SOUND
 
12  COMMUNICATIONS, INCORPORATED, AND THE LAST REINCARNATION,
 
13  WHICH PRODUCED A RADIO TALK SHOW ONE TIME FOR 24 HOURS A DAY
 
14  AND MADE AGREEMENTS WITH RADIO STATIONS AROUND THE COUNTRY,
 
15  GIVING THEM THE RIGHT TO PICK UP THE SIGNAL OF THESE
 
16  HIGH-QUALITY RADIO TALK SHOWS ON VARIOUS SUBJECTS, IN RETURN
 
17  FOR WHICH THEY WOULD BE GRANTED COMMERCIAL TIME ON THE --
 
18  ON THE RADIO STATION.  AT ONE TIME THERE WERE 200 RADIO
 
19  STATIONS PICKING UP THE SIGNAL OF SUN RADIO.  AND IT WAS IN
 
20  EVERY WAY A MODERN, UP-TO-DATE, PROFESSIONAL, VERY, VERY
 
21  WELL MANAGED OPERATION.  AND I CAN GO ON FROM THERE AND GIVE
 
22  YOU A LOT MORE INFORMATION WHY IT FAILED, BUT THAT’s WHAT IT
 
23  WAS.
 
24       Q    THAT’s FINE.
 
25       A    I HAVE A REAM OF DESCRIPTIVE MATERIAL IN
 
26  ADVERTISING FOLDERS AND EVERYTHING IF — IF THE JUDGE WOULD
 
27  LIKE TO SEE IT.  IT HAD A STAFF AT ONE TIME OF 30 PEOPLE.
 
28       MR. MUSSELMAN:  I DON'T THINK THERE’s A QUESTION NOW.
			
			

page 740
 
 
 
 1       THE COURT:  GO AHEAD AND ASK ANOTHER QUESTION.
 
 2
 
 3  BY MR. LANE:
 
 4       Q    THAT IS SUN RADIO YOU JUST DESCRIBED?
 
 5       A    YES.
 
 6       Q    DID YOU TELL MRS. FURR ABOUT THE MONEY WHICH YOU
 
 7  MADE AVAILABLE TO SUN RADIO?
 
 8       A    YES.
 
 9       Q    DID YOU KEEP UP TO DATE WITH WHAT WAS TAKING PLACE
 
10  WITH SUN RADIO?
 
11       A    YES.  NOT EVERY DETAIL, BUT WE DISCUSSED IT ALL
 
12  THE TIME.
 
13       Q    AND YOU TOLD — DID YOU TELL MRS. FURR THAT THE
 
14  MONEY FOR THE SUN RADIO CAME FROM THE FARREL ASSETS?
 
15       A    YES.
 
16       Q    AND SHE TESTIFIED TO THAT, DIDN'T SHE?
 
17       MR. MUSSELMAN:  OBJECTION, YOUR HONOR.  CALLS FOR
 
18  DOUBLE HEARSAY.
 
19       THE COURT:  SUSTAINED.
 
20       THE WITNESS:  IF I MAY --
 
21       THE COURT:  ASKING HIM WHAT SHE SAID IN HER DEPOSITION
 
22  IS IN THERE.  I'LL READ IT IF IT’s IN THERE.
 
23       THE WITNESS:  MAY I POINT OUT ONE THING?
 
24       MR. LANE:  NO.
 
25       THE COURT:  YOU HAVE A GOOD ATTORNEY.  LISTEN TO HIS
 
26  QUESTIONS.
 
27       MR. LANE:  I WONDERED IF WE COULD BREAK FOR THE DAY.  I
 
28  CAN FINISH TOMORROW IN 10 MINUTES.  AND THE CASE WOULD BE
			
			

page 741
 
 
 
 1  FINISHED AS FAR AS OUR CASE, ALL OF OUR WITNESSES, BY NOON.
 
 2       THE COURT:  DO YOU HAVE ANY FEELINGS ON THIS?
 
 3       MR. MUSSELMAN:  I HAVE NO OBJECTION.  WHATEVER YOUR
 
 4  HONOR PREFERS IS FINE.
 
 5       THE COURT:  ARE YOU GOING — GO OFF THE RECORD.
 
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 7                   (PROCEEDINGS RECESSED.)
 
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