More Lies from The SPOTLIGHT — February 6, 2001
Liberty Lobby recently published an article on its web site titled “Good News, But Fight Far From Over.” Because there are so many misrepresentations in this article, I thought I would make some quick comments, for those who are unfamiliar with the other side of this controversy. Carto’s screed is in quotes; my commentary is indented. (posted February 2, 2001)
"Good News, But Fight Far From Over"
"There is good news to report about the fight to preserve the integrity of Liberty Lobby and The SPOTLIGHT. But first, some background.”
"Liberty Lobby did not enter into its bankruptcy lightly. However, after Mark Weber and his co-conspirators convinced Judge Runston G. Maino of the Superior Court in San Diego, Calif., to levy an $8.9 million judgment against our populist Institution on Nov. 26, 1996, and Weber’s lawyers moved to collect on that judgment, Liberty Lobby had to file for Chapter 11 bankruptcy protection in 1999.”
First, there are no “co-conspirators.” A “conspiracy” is an agreement between to perform together an illegal act (thus, there is no such thing as a “co-conspirator,” a term seized upon by those with small minds, such as Willis Carto). The Legion for the Survival of Freedom, for whom Mark Weber works, took only legal steps against Carto in the wake of Carto’s attempt to destroy the Legion, an attempt that involved the conversion of millions of dollars of Legion funds to Carto’s personal use. Dozens of court cases amply demonstrate that the Legion has the law and the facts on its side. Carto has lost virtually every lawsuit he has brought against the Legion, in addition losing the lawsuit that determined that he and others illegally converted millions from the Legion. Liberty Lobby was one of those others who gained by the illegal conversion (for which they have Carto to thank), so it has to repay the Legion, too. Second, the judgment against Liberty Lobby was less than $5 million.
"After lengthy and costly negotiations, a settlement was drafted and agreed to by the conspirators and Liberty Lobby — the amount: $1.2 million.”
What Carto fails to mention is that 1) this was not a settlement, but rather a forbearance agreement. That is, Legion would forbear from collecting the full amount owed as long as Carto and Liberty Lobby held up their end of the bargain, 2) the bargain included specific performances by Liberty Lobby and Carto, in addition to paying a small fraction of the money stolen, and 3) if Liberty Lobby and Carto did not hold up their end, they agreed to pay Legion the full amount of the original judgment, plus interest.
"Liberty Lobby has regularly made all of its obligated payments on the settlement. However, the California conspirators decided to take over Liberty Lobby and The SPOTLIGHT — obviously acting under orders from their handlers.”
Utterly false. Liberty Lobby never made either its monthly interest payments, nor its monthly principal payments, nor any of its penalty payments for failing to perform as it promised in the forbearance agreement. It is in fact hundreds of thousands of dollars behind in its payments.
"Maino declared that Liberty Lobby was in violation of its federal bankruptcy plan which had been approved by Judge S. Martin Teel of the U.S. Bankruptcy Court in the District of Columbia on Oct. 25, 1999.”
Utterly false. Maino ruled that Liberty Lobby was in default of the forbearance agreement, for not making monetary payments, for not dropping all lawsuits, for not producing documents, for not scheduling depositions, and for filing a new lawsuit.
"Maino’s ruling was wrong, not only be cause he based it entirely on untrue statements made by Bryan Sampson — Weber’s lawyer — but he had no authority to void a settlement ordered by a federal judge.”
Utterly false. First, Sampson’s statements were all backed up with hard evidence. Liberty Lobby’s attorney was in court, and could have produced contrary evidence had there been any. Instead, what he offered the court were his opinions. Maino compared the language of the forbearance agreement signed by Liberty Lobby, against their behavior under that agreement, and found that they were in breach on virtually every aspect. Second, the forbearance agreement was incorporated into the bankruptcy ruling by Teel in 1999. In this forbearance agreement, it specifically states that any disputes that arise out of the agreement are to be heard in California court. There is no conflict between Maino’s ruling and Teel’s acceptance of Liberty Lobby’s bankruptcy plan. Third, Teel did not order the settlement, he accepted it as part of Liberty Lobby’s bankruptcy reorganization. Liberty Lobby did not need to sign the agreement, but they did, and they promised the federal bankruptcy court that they would abide by it. If they had not promised to abide by it, their reorganization plan would not have been confirmed by the DC bankruptcy court.
"Sampson had told Maino — with no evidence — (1) that Liberty Lobby was behind on its payments (untrue); (2) that Liberty Lobby had not paid interest (exactly as he and our bankruptcy attorney, Tom Stanton, had agreed); (3) that Liberty Lobby had not dismissed its lawsuits against Weber et al as agreed (a flat-out lie); (4) that Elisabeth Carto had lots of money in some unspecified bank account somewhere (A flat-out lie Sampson told Maino, who usually believes anything Sampson tells him.).”
Carto is lying again. 1) Sampson provided ample evidence to all the particulars of Liberty Lobby’s multiple breaches. 2) Liberty Lobby isn't just behind on its payments, it’s almost $400,000 behind. 3) Legion agreed not to worry about the interest payments called for in the forbearance agreement, if Liberty Lobby make good on other promises. It never did. Carto wants to be able to break his promises and hold others to theirs, even when others' promises are conditional on his behavior. 4) Liberty Lobby never dismissed their “massive RICO suit” against Legion. 5) Elisabeth Carto has a bank account in Germany that had, the last time we looked, over $100,000 it in. 6) Maino is a very careful and intelligent judge, who does not let anyone pull the wool over his eyes. If anything, he has been extremely generous with the Cartos: he has had two opportunities to jail the Cartos for egregious contempt of court, but he always gives them one last chance.
"However, on Dec. 22, Liberty Lobby’s West Coast attorney, J. Bryan Urtnowski, convinced Maino that his action overturning the settlement in federal court in Washington was inappropriate and that he was required to issue a stay until Jan. 22, 2001.”
Utterly false. Urtnowski asked for a stay of the collections process while he drafted an appeal to the California Court of Appeal, regarding Maino’s finding that Liberty Lobby and Carto were in breach of the forbearance agreement. Maino did NOT have to grant the stay of collections, but — and this is typical for Maino — he gave the Carto group what they wanted. This had nothing to with the action of the DC court. Carto’s attorney never submitted his appeal, and the stay has now been lifted.
"In the meantime, in Washington, D.C., Tom Stanton swung into action and petitioned Teel to review the actions of Weber and his co-conspirators.”
False. Stanton made a motion to re-open Liberty Lobby’s bankruptcy. Teel accepted the motion, which puts Liberty Lobby back into bankruptcy, but wrote that Liberty Lobby’s motion was so poorly written that he couldn't understand what they were doing. He gave them 28 days to submit a new motion that was properly drafted.
Those with further questions can view the truth of these matters, including representations of many actual documents, elsewhere on this site.