Including information about his associates
page 1
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. )
) OPENING STATEMENTS
9 WILLIS CARTO, HENRY FISCHER, )
VIBET, INC., LIBERTY LOBBY, ) TRIAL PROCEEDINGS
10 INC., ET. AL., )
)
11 DEFENDANTS AND )
APPELLANTS. )
12 ______________________________)
13
REPORTER’s APPEAL TRANSCRIPT
14
OCTOBER 28-29, 1996
15 OCTOBER 31, 1996
16 VOLUME 1
17 PAGES 1-158
18
19 APPEARANCES:
20 FOR THE PLAINTIFF AND JACQUES BEUGELMANS AND
RESPONDENT: THOMAS MUSSELMAN
21 1901 AVENUE OF THE STARS
CENTURY CITY, CA 90067
22
FOR THE DEFENDANTS AND PETER J. PFUND
23 APPELLANTS: 2382 S.E. BRISTOL
SUITE A
24 NEWPORT BEACH, CA 92660
25
26
BARBARA J. SCHULTZ, CSR, RPR
27 CSR NO. 8021
OFFICIAL REPORTER
28 VISTA, CALIFORNIA
page 2
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 OCTOBER 28-29, 1996
OCTOBER 31, 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 3 1 VISTA, CALIFORNIA, OCTOBER 28-29, 1996, DEPT. 11: 2 3 (I, BARBARA J. SCHULTZ, DECLARE THAT MY NOTES 4 REFLECT AND THE COURT MINUTES CORROBORATE THAT 5 THERE WERE NO REPORTED PROCEEDINGS ON OCTOBER 28 6 AND OCTOBER 29, 1996.) 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
page 4 1 VISTA, CALIFORNIA, OCTOBER 31, 1996, DEPARTMENT 11: 2 3 THE COURT: ON THE RECORD IN THE — THE LEGION VERSUS 4 MR. WILLIS CARTO, ET AL. I DON'T HAVE THE FILE. GET THE 5 APPEARANCE, AND GO THIS WAY. 6 MR. BEUGELMANS: JACQUES BEUGELMANS AND THOMAS 7 MUSSELMAN FOR THE PLAINTIFF. 8 MR. WAIER: RANDALL WAIER AND BRIAN URTNOWSKI, NOT 9 PRESENT, REPRESENTING ALL OF THE DEFENDANTS EXCEPT LIBERTY 10 LOBBY. AND HE'LL BE MARK LANE FROM WASHINGTON, D.C. WILLIS 11 CARTO IS ONE OF THE DEFENDANTS IN THIS ACTION ON MY LEFT. 12 THE COURT: I UNDERSTAND YOU HAVE THE AUTHORITY ON 13 BEHALF OF ALL THE DEFENDANTS TO WAIVE JURY AND YOU ARE DOING 14 THAT; IS THAT RIGHT? 15 MR. WAIER: YES, I WAS COMMUNICATED THAT ON 2 DAYS AGO, 16 I BELIEVE TUESDAY. I HAVE MY CLIENT HERE. AND JUST SO WE 17 CAN PUT IT ON THE RECORD, I HAVE BEEN REPRESENTED BY 18 MR. CARTO THAT A JURY WOULD BE WAIVED. 19 IS THIS YOUR DECISION? 20 MR. CARTO: YES. I ASKED MR. WAIER TO WAIVE THE JURY. 21 THE COURT: AND HOW ABOUT THE PLAINTIFF? 22 MR. BEUGELMANS: YES, WAIVED. 23 THE COURT: AS FAR AS THE REPORTER IS CONCERNED, I 24 UNDERSTAND THE DEFENSE WOULD LIKE IT REPORTED. SO THAT WILL 25 BE YOUR FEE TO PICK UP. IF YOU ARE THE PREVAILING PARTY, IT 26 WILL BE A COST TO THEM. 27 MR. WAIER: CORRECT. 28 THE COURT: IF THEY — IF THEY WISH TO GET A RECORD ON
page 5 1 APPEAL, YOU ARE GOING TO HAVE TO PAY FULL COST. 2 MR. BEUGELMANS: OF COURSE. UNDERSTOOD. 3 THE COURT: GO OFF THE RECORD AND HAVE THE JURORS COME 4 IN. 5 (THE COURT EXCUSED THE PROSPECTIVE JURORS.) 6 THE COURT: ON THE RECORD THEN. WOULD THE PLAINTIFF 7 LIKE TO MAKE AN OPENING STATEMENT? 8 MR. BEUGELMANS: YES. 9 MR. MUSSELMAN: YOUR HONOR, I THOUGHT IF I WOULD MAYBE 10 RUN THROUGH AN OVERVIEW AND GO INTO THINGS IN MORE DETAIL 11 SENSE SO IT WILL MAKE SENSE. 12 THIS CASE IS ABOUT A MASSIVE MULTIMILLION DOLLAR 13 HEIST, A HEIST THAT DIDN'T INVOLVE MASKED MEN, BUT IS JUST 14 AS EFFECTIVE AS IF IT WOULD HAVE BEEN A HEIST OF ASSETS THAT 15 BELONGED TO THE PLAINTIFF AND NONPROFIT CORPORATION. 16 MR. WAIER: YOUR HONOR, I'M GOING TO OBJECT AT THIS 17 POINT. IF HE WOULD LIKE TO MAKE A CLOSING ARGUMENT, THAT'S 18 OKAY. THIS IS AN OPENING STATEMENT AND SHOULD BE RESTRICTED 19 TO THE FACTS. I NORMALLY DON'T USE THAT. WHEN HE USES THE 20 TERMS “HEIST” AND “A MASSIVE HEIST” AND THINGS, THAT'S 21 INAPPROPRIATE FOR AN OPENING STATEMENT. 22 THE COURT: OKAY. I AGREE WITH YOU. YOU CAN MAKE A 23 BRIEFER OBJECTION. IT’s ARGUMENTATIVE. TELL ME — I KNOW 24 THAT YOU MAYBE PREPARED IT FOR THE JURY AND I WOULD HAVE 25 SUSTAINED THE OBJECTION IN FRONT OF THE — OF THE JURY. 26 TELL ME WHAT YOU THINK THE ISSUES ARE, WHAT THE WITNESSES 27 ARE, AND WHAT YOU WILL CALL IT, RATHER THAN USING THE 28 PEJORATIVE WORDS LIKE “HEIST."
page 6 1 MR. MUSSELMAN: I'LL STICK TO LEGAL TERMS LIKE 2 “CONVERSION.” IT’s A CONVERSION FROM THE PLAINTIFF. AS OF 3 JUNE OF '91, WE KNOW AS AN EXCESS OF 7.1 MILLION DOLLARS 4 THAT WAS CONVERTED, CONVERTED BY A TRUST OF FIDUCIARY THAT 5 WOULD BE ENTRUSTED WITH THE TASK OF GOING TO SECURE THE 6 ASSETS FOR THE PLAINTIFF. THAT IS DEFENDANT WILLIS CARTO. 7 THE EVIDENCE WILL SHOW THAT THE CONVERSION, THE 8 BREACH OF TRUST, THE BREACH OF FIDUCIARY DUTY, THE FAILURE 9 TO ACCOUNT FOR HOW MUCH WAS TAKEN AND WHERE IT IS RIGHT NOW, 10 INCLUDING THE PROCEEDS, CONTINUES RIGHT TO THE VERY 11 PRESENT. IT INVOLVES, THE EVIDENCE WILL SHOW, CONSPIRACY 12 AMONG THE DEFENDANTS, SUCH AS DEFENDANT MR. CARTO, WHO NOW 13 PURPORTS TO BE THE PLAINTIFF’s PRESIDENT. AND IF HE 14 TESTIFIES CONSISTENTLY WITH WHAT HE STATED IN THE PAST, HE 15 HAS THE PLAINTIFF’s RECORDS CONCERNING THE ASSETS THAT 16 PLAINTIFF ALLEGES WERE CONVERTED. 17 IT ALSO WILL DEMONSTRATE HIS WIFE WAS PART OF THE 18 CONSPIRACY WHO, TOGETHER WITH LEWIS AND LAVONNE FURR, THE 19 DEFENDANT, ARE PURPORTING TO CONDUCT THE BUSINESS OF THE 20 PLAINTIFF EVEN NOW AS THE SUPPOSED BOARD AND HAD MEETINGS IN 21 1994 AND 1995 DESPITE THE FACT THE EVIDENCE WILL SHOW 22 THEY'RE NOT DIRECTORS. 23 THE EVIDENCE WILL ALSO SHOW THAT DEFENDANT LAVONNE 24 FURR, TOGETHER WITH MRS. CARTO, OPENED A BANK ACCOUNT SINCE 25 THE SUIT WAS FILED IN THE NAME OF THE PLAINTIFF AND HAS 26 RECEIVED DONATIONS, SO WE ARE UNABLE TO SHOW PRECISELY HOW 27 MUCH HAS BEEN CONVERSION. CONVERSION IS NOW GOING ON AND NO 28 ACCOUNTING HAS BEEN PROVIDED.
page 7 1 MR. WAIER: I OBJECT TO THE LATTER OPENING STATEMENT. 2 THOSE ARE NOT ISSUES RAISED IN THE LITIGATION. THE ONLY 3 ISSUES ARE THOSE INVOLVING THE JEAN FARREL ESTATE. 4 MR. MUSSELMAN: THAT’s NOT TRUE. 5 THE COURT: OVERRULED. 6 MR. MUSSELMAN: THE EVIDENCE WILL SO SHOW THAT THE 7 CONSPIRACY INVOLVES THE DEFENDANT LEWIS AND LAVONNE FURR, 8 ARE AN ARKANSAS RESIDING COUPLE WHO MR. FURR DESCRIBED AS 9 HAVING — HAVING BEEN MR. Carto’s PUPPET BOARD MEMBERS AND 10 THAT THEY WERE PUPPET BOARD MEMBERS SO MR. CARTO COULD DO 11 WHAT THEY WANTED WITH THE PLAINTIFF. ALSO IF HE TESTIFIES 12 CONSISTENTLY WITH WHAT HE STATED IN THE PAST, THE EVIDENCE 13 WILL DEMONSTRATE MR. CARTO HAS BELIEVED THAT CONSULTING WITH 14 THE BOARD OF DIRECTORS OF THE PLAINTIFF WAS A WASTE OF 15 TIME. AND HE’s ADMITTED THAT MEETINGS HAVE OCCURRED WITHOUT 16 A MAJORITY OF THE DIRECTORS BEING PRESENT. 17 DESPITE THE END OF THEIR AFFILIATION WITH THE 18 PLAINTIFF BACK IN THE FALL OF '93, THE — MR. AND 19 MRS. CARTO AND MR. AND MRS. FURR HAVE CONTINUED TO MAKE 20 DEMANDS FOR A TURNOVER OF ALL THE PLAINTIFF’s RECORDS AND 21 ASSETS AND CONTINUE TO HOLD THEMSELVES OUT TO BE — TO BE 22 SOLELY AND LEGALLY IN CONTROL OF THE PLAINTIFF, THUS 23 INTERFERING WITH PLAINTIFF’s ACTIVITIES. 24 THE EVIDENCE WILL DEMONSTRATE THAT THE CONSPIRACY 25 INVOLVES LIBERTY LOBBY IN WASHINGTON, D.C., OF WHICH 26 MR. CARTO IS DIRECTOR AND FOR WHICH HE’s BEEN A TREASURER 27 FOR MANY YEARS. THE EVIDENCE WILL DEMONSTRATE THEY CAUSED 28 THE TRANSFER OF THE CONVERTED ASSETS OF AT LEAST 2.75
page 8 1 MILLION DOLLARS TO OCCUR TO LIBERTY LOBBY, OF WHICH HE'S 2 TREASURER, AND A TRANSFER OF AT LEAST ANOTHER $750,000 TO AN 3 ENTITY CALLED FOUNDATION TO DEFEND THE FIRST AMENDMENT, 4 WHICH ACTUALLY HAS NO EMPLOYEES AND USES LIBERTY LOBBY'S 5 ADDRESS. 6 THE EVIDENCE WILL DEMONSTRATE THAT THE CONSPIRACY 7 INVOLVES AN ENTITY, VIBET, V-I-B-E-T, WHOSE DEFAULT HAS BEEN 8 TAKEN AND THAT VIBET WAS FORMED AT MR. Carto’s REQUEST BY A 9 SWISS LAWYER, PATRICK FOETISCH, F-O-E-T-I-S-C-H, TO LIFT THE 10 CONVERTED ASSETS AND THEN TO DISTRIBUTE THEM ONWARD TO 11 LIBERTY LOBBY, FOUNDATION TO DEFEND THE FIRST AMENDMENT, AND 12 OTHER ENTITIES THAT HAVE NOT BEEN IDENTIFIED BY ANY 13 ACCOUNTING. 14 CONSPIRACY ALSO INVOLVED THE ASSISTANCE OF 15 DEFENDANT HENRY FISCHER, FRIENDS OF MR. AND MRS. CARTO, AN 16 ACCOMPLICE WHOSE SIGNATORY POWER — HE WAS GIVEN SIGNATORY 17 POWER OVER THE ACCOUNT WHERE THE DISTRIBUTION OF THE ASSETS 18 OCCURRED. 19 THE EVIDENCE WILL DEMONSTRATE THAT THE MONEY AT 20 ISSUE WAS GIFTED TO THE PLAINTIFF BY A WEALTHY WOMAN NAMED 21 JEAN FARREL AND THAT, THEREAFTER, THE PLAINTIFF NEVER SOLD 22 THE ASSETS TO MR. CARTO. IT NEVER GIFTED THE ASSETS TO 23 MR. CARTO. IT NEVER ABANDONED THE ASSETS TO MR. CARTO. IT 24 NEVER GAVE HIM THE POWER TO DISPOSE OF THE ASSETS. AND THE 25 ASSETS CONSTITUTED 95 PERCENT OR MORE OF THE ASSETS OF THE 26 PLAINTIFF. THAT IS SUBSTANTIALLY ALL THE ASSETS OF THE 27 PLAINTIFF. THERE WAS NEVER NOTICE GIVEN TO THE DIRECTORS OF 28 ANY SUCH DISPOSITION.
page 9 1 THERE WAS NEVER A MEETING HELD WHETHER FORMALLY OR 2 INFORMALLY BY THE DIRECTORS TO APPROVE ANY SUCH DISPOSITION; 3 THAT FRAUDULENT MINUTES WERE CREATED AFTER THE FACT RECITING 4 MEETINGS THAT NEVER DID OCCUR, STATING THE PEOPLE WERE 5 PRESENT WHO WEREN'T PRESENT, INCLUDING BY CONFERENCE CALL, 6 AND NOWHERE WAS CONSENT APPROVED AFTER THE FACT EITHER BY 7 THE DIRECTORS. 8 THE EVIDENCE WILL DEMONSTRATE THERE WAS NEVER A 9 TRANSFER TO PLAINTIFF OF ANYTHING OF EQUAL VALUE TO ACCOUNT 10 FOR THE CONVERTED ASSETS, THE 7.1 MILLION PLUS INTEREST PLUS 11 AN UNKNOWN ADDITIONAL AMOUNT OF ASSETS. 12 MOST OF THE EVIDENCE WILL COME FROM THE 13 DEFENDANTS' OWN WORDS AND THEIR OWN WRITINGS. THEY'LL 14 DEMONSTRATE THAT REPEATEDLY OVER A COURSE OF YEARS, 15 MR. CARTO LED THE PLAINTIFF AND OTHERS TO BELIEVE THAT THE 16 ASSETS THAT HAD BEEN LEFT TO THE PLAINTIFF WERE STILL OWNED 17 BY PLAINTIFF AND THAT PLAINTIFF WAS STILL EXERCISING CONTROL 18 OVER THEM AND THEY WERE IN PLAINTIFF’s CONTROL AND WAS 19 ENTITLED TO THE FULL BENEFIT OF THEM. 20 THE EVIDENCE WILL ALSO DEMONSTRATE MR. CARTO NEVER 21 INFORMED THE PLAINTIFF’s BOARD OF DIRECTORS HOW MUCH MONEY 22 THE ASSETS WERE, NOR DID HE PROVIDE AN ACCOUNTING, NOR 23 PROVIDE THE DOCUMENTS TO DEMONSTRATE WHERE THE MONEY IS, HOW 24 IT WAS SPENT, WHAT BANK ACCOUNTS IT WAS DEPOSITED TO, WHO 25 HAS THE MONEY RIGHT NOW. MONEY, THE ASSETS, ALSO INCLUDED 26 GEMS. THERE’s BEEN NO ACCOUNTING FOR THE AMOUNT OF THE GEMS 27 AND WHERE THEY ARE. 28 THE EVIDENCE WILL FURTHER DEMONSTRATE THAT THE
page 10 1 PLAINTIFF HAD SUFFICIENT ASSETS TO HIRE A LAWYER AND TO PAY 2 THE ONLY FEES THAT WERE INCURRED TO PROSECUTE THE LITIGATION 3 THAT WAS A RESULT OF THE CONVERSION OF THE ASSETS, AND ALSO 4 IF HE TESTIFIES CONSISTENTLY WITH WHAT THEY STATED BEFORE, 5 THE PLAINTIFF BORROWED MONEY AS NEEDED TO PROSECUTE THE 6 LITIGATION, SO IT HAD THE ABILITY TO BORROW MONEY. THAT THE 7 EVIDENCE WILL SHOW THAT THE FINAL LEGAL BILL WAS PRIMARILY 8 PAID OUT OF THE PROCEEDS OF THE LITIGATION ITSELF. 9 IN ADDITION, THE EVIDENCE WILL SHOW THAT THE 10 PLAINTIFF NEVER GAVE 20 DAYS' ADVANCE WRITTEN NOTICE TO THE 11 CALIFORNIA ATTORNEY GENERAL’s OFFICE OF THE PURPORTED 12 TRANSFER, AS WOULD HAVE BEEN REQUIRED SINCE PLAINTIFF HAS 13 ITS PRINCIPAL PLACE OF BUSINESS IN CALIFORNIA, AND THE 14 ASSETS IN QUESTION WERE SUBSTANTIALLY ALL OF HIS ASSETS, 15 ALTHOUGH NOT ALL. 16 SOMETIMES THE PLAINTIFF IS REFERRED TO AS THE 17 LEGION OR L.S.F. YOU WILL SEE REFERENCE TO IT, TO A 18 PUBLICATION THAT IS THE INSTITUTE FOR HISTORICAL REVIEW OR 19 I.H.R. THOSE ARE INTERCHANGEABLE TERMS FOR THE PLAINTIFF 20 AND MOST COMMONLY REFERRED TO AS THE LEGION. IT WAS FORMED 21 IN 1952 OUT OF STATE BUT HAD THE OFFICE IN CALIFORNIA FOR 22 YEARS IN THE COSTA MESA AREA. IT HAD 2 SETS OF BYLAWS. ONE 23 SET IS UNDATED. SECOND SET IS DATED FROM JUNE 1966. 24 THE EVIDENCE WILL DEMONSTRATE THAT THE SECOND SET 25 WAS DRAFTED BY MR. CARTO AND THAT THAT SECOND SET ONLY 26 ALLOWS BOARD OF DIRECTOR MEETINGS TO OCCUR BY TELEPHONE IF 27 ACTION IS REDUCED TO WRITING AND APPROVED BY A MAJORITY 28 THEREAFTER. THE EVIDENCE WILL DEMONSTRATE THAT NEVER
page 11 1 OCCURRED HERE. THE EVIDENCE WILL ALSO DEMONSTRATE THAT 2 DIRECTORS WERE REELECTED UNLESS THEY SAID SOMETHING TO THE 3 CONTRARY YEAR AFTER YEAR. THE PLAINTIFF LATER MERGED WITH 4 ANOTHER ENTITY IN A DOCUMENT THAT RECITES THAT THE 5 ORGANIZATION IS A NONMEMBER, PUBLIC-BENEFIT CORPORATION. 6 THE PRINCIPAL ISSUE THAT INVOLVED MISS JEAN FARREL 7 AND STARTED IN APPROXIMATELY 1990, THE — PRIOR TO THAT, 8 THE ONLY TIME THAT MR. CARTO MET MISS FARREL WAS 1984 WHEN 9 SHE INDICATED TO HIM SHE WOULD BE LEAVING MONEY TO THE 10 PLAINTIFF. MARCH 1985 MINUTES OF THE CORPORATION WILL SHOW 11 THAT MISS FARREL HAD FOUNDED A CORPORATION, NECA, N-E-C-A, 12 WHICH SHE CREATED FOR THE PLAINTIFF, WHICH WAS TO COME INTO 13 THE PLAINTIFF’s CONTROL UPON HER DEATH AND THAT ENTITY WAS 14 TO RECEIVE HER ASSETS. 15 MISS FARREL DIED IN SWITZERLAND AUGUST 11, 1985. 16 THE CORPORATE MINUTES WILL REFLECT THE SIGNIFICANCE OF HER 17 DEATH WAS A DIRECT CONTROL OF THE COMPANY HOLDING THE ASSETS 18 PASSED TO THE PLAINTIFF. 19 THERE’s A DOCUMENT DATED SEPTEMBER 7, 1985, SIGNED 20 BY MRS. FURR AND THOMAS MARCELLUS THAT RECITES THAT THOMAS 21 MARCELLUS WAS THE DIRECTOR. THE EVIDENCE WILL DEMONSTRATE 22 HE NEVER PARTICIPATED IN ANY MEETING, NOR WAS ASKED TO -- 23 TO GIVE THESE ASSETS TO MR. CARTO OR ALLOW MR. CARTO TO DO 24 WITH THEM AS HE SAW FIT. 25 IT’s ANTICIPATED THAT THE DEFENDANTS MAY TRY TO 26 INTRODUCE INTO EVIDENCE A HEARSAY DOCUMENT, A LETTER DRAFTED 27 BY MR. CARTO ADDRESSED TO DEFENDANT LAVONNE FURR WHERE HE 28 STATES HE WISHES HE HAD THE POWER TO DISTRIBUTE THE ASSETS
page 12 1 AS HE SEES FIT. THERE IS NO BOARD MEETING EVER GRANTING HIM 2 AUTHORITY. THERE ARE MINUTES OF THE MEETING SEPTEMBER 19, 3 1985, FEW DAYS AFTER THAT LETTER, STATING THAT MR. CARTO 4 MADE A REPORT AS BUSINESS AGENT FOR THE PLAINTIFF AND THAT 5 RELATIVES OF JEAN FARREL WERE CONTESTING OWNERSHIP OF THE 6 ASSETS, EVEN THOUGH THEY WERE NOT PART OF JEAN FARREL'S 7 ESTATE AS A RESULT OF JEAN FARREL ALREADY HAVING GIFTED THE 8 ASSETS TO NECA, SEEKING RESOLUTIONS TO GIVE MR. CARTO AND 9 DEFENDANT HENRY FISCHER ONE YEAR POWER OF ATTORNEY TO SECURE 10 THE PROPERTY OF THE PLAINTIFF, NAMELY NECA CORPORATION. 11 AS THE EVIDENCE WILL DEMONSTRATE, AS OF THAT POINT 12 IN TIME THERE HAD BEEN NO DISPOSITION TO IN MR. Carto’s 13 POWER FOR OWNERSHIP OF THE ASSETS. 14 THE EVIDENCE WILL FURTHER DEMONSTRATE MR. CARTO, 15 AS OF THAT SEPTEMBER 20TH POWER OF ATTORNEY, HAD NOT 16 DISCUSSED WITH THE DIRECTORS THE AMOUNT OF THE ASSETS. THUS 17 THERE HAD BEEN NO DISCLOSURE THAT WOULD HAVE ALLOWED 18 DISPOSITION TO HIM OR AN ABANDONMENT TO HIM. 19 IN MARCH '86, THERE WAS ANOTHER BOARD MEETING. 20 AND AGAIN, THE MINUTES RECITE EFFORTS WERE MADE BY THE 21 PLAINTIFF TO RECOVER THE PROPERTY OF THE PLAINTIFF AND THAT 22 EXPENDITURES WERE CONTINUING DEFINITELY TO DO SO. THE 23 MINUTES RECITE THERE WERE SIX DIRECTORS, INCLUDING MR. AND 24 MRS. FURR. THUS, MR. AND MRS. FURR COULD NOT CONSTITUTE A 25 MAJORITY OF THE DIRECTORS. NOW, LIKEWISE, TRUE FOR MARCH 26 1985, THERE WERE FIVE DIRECTORS. MR. AND MRS. FURR COULD 27 NOT CONSTITUTE A MAJORITY OF THE DIRECTORS AT THAT TIME 28
page 13 1 EITHER, ACCORDING TO THE MINUTES. 2 THEN IN MAY OF 1986, MR. CARTO SIGNED A VERIFIED 3 COMPLAINT THAT WAS FILED IN NORTH CAROLINA, FILED BY THE 4 PLAINTIFF LEGION, AGAINST A BANK AND JOAN ALTHAUS, THE 5 PERSON WHO WAS CONTESTING THE GIFT TO THE LEGION BY MISS 6 JEAN FARREL. THAT COMPLAINT STATES THAT PLAINTIFF AGAIN 7 OWNED NECA AND THAT NECA WAS FORMED BY JEAN FARREL AND HAD 8 ASSETS IN EXCESS OF 16 MILLION DOLLARS AROUND THE WORLD 9 COMPOSED OF BEARER CERTIFICATES GIFTED TO THE PLAINTIFF BY 10 JEAN FARREL WHILE SHE WAS ALIVE AND THE CERTIFICATES WERE 11 STILL PLAINTIFF’s PROPERTY, AND THAT THE — THE 12 CERTIFICATES WERE IN SAFE DEPOSIT BOXES BY AN AGREEMENT 13 BETWEEN JEAN FARREL AND WILLIS CARTO AS AGENT FOR THE 14 PLAINTIFF. 15 ALSO, ANSWERS TO INTERROGATORIES IN THAT CASE 16 SIGNED BY MR. CARTO AGAIN STATING THE IDENTICAL THING. 17 MR. CARTO HAD DISCUSSED THE PURPOSE OF NECA, WHICH WAS TO 18 TRANSFER FARREL’s ASSETS TO THE PLAINTIFF, AND THAT KEYS TO 19 THE SAFETY DEPOSIT BOXES WERE DELIVERED TO MR. CARTO FOR THE 20 PLAINTIFF. 21 1986, MARCH OF '87, THERE WAS ANOTHER MINUTES OF 22 THE BOARD OF DIRECTORS MEETING PREPARED BY — THE MINUTES 23 WERE PREPARED BY MR. CARTO. AND THEY RECITE THAT A 24 SETTLEMENT OF THE LITIGATION IN SWITZERLAND AND OTHER PLACES 25 WOULD SOON BE REACHED AND WOULD DEPEND UPON THE LEGION 26 RELINQUISHING CLAIM ON A SIZEABLE PORTION OF THE JEAN FARREL 27 ASSETS, PERHAPS UP TO 50 PERCENT. IT ALSO RECITES THE 28 LEGION HAD BECOME INDEBTED BECAUSE OF LEGAL EXPENSES
page 14 1 ASSOCIATED WITH THAT PROSECUTION OF THE LITIGATION. 2 MAY OF '87, INTERROGATORY ANSWERS, THE NORTH 3 CAROLINA CASE, AGAIN STATING THAT MR. CARTO WAS AN AGENT FOR 4 THE LEGION AND THAT HE HAD FULL KNOWLEDGE THAT THE NECA 5 STOCK HAD BEEN GIFTED TO THE PLAINTIFF. AND ALSO THAT 6 TOM MARCELLUS, WHO WILL BE TESTIFYING LATER HE WAS 7 PREVIOUSLY CHIEF EXECUTIVE OFFICER OF THE PLAINTIFF; THAT HE 8 HAD THE SAME KNOWLEDGE. THOSE INTERROGATORIES ANSWERS ALSO 9 RECITE THE LITIGATION AROUND THE WORLD WAS SIMILAR IN ALL 10 RESPECTS TO THE NORTH CAROLINA CASE IN WHICH THE 11 INTERROGATORIES ANSWERS SIGNED BY MR. CARTO AND VERIFIED BY 12 MR. CARTO EXIST, AND THEY STATE THAT AN ATTORNEY IN LONDON, 13 DAVID HOOPER, HAD RECORDS OF ALL OF THE LAWSUITS AROUND THE 14 WORLD. 15 1988 THERE’s ANOTHER BOARD OF DIRECTORS MEETINGS 16 THIS TIME RECITING THAT EIGHT DIRECTORS EXISTED OR ELECTED 17 AGAIN. MR. AND MRS. FURR COULD NOT CONSTITUTE A MAJORITY. 18 1989 THERE’s A SIMILAR ELECTION OF DIRECTORS. THIS TIME, 19 SEVEN DIRECTORS. THEN 1990, MARCH 1990, AGAIN THERE’s A 20 BOARD OF DIRECTORS MEETING ELECTING SIX DIRECTORS. 21 JULY OF 1990 MR. CARTO RESPONDED TO 22 INTERROGATORIES STATING THAT HE HAD NOT WRITTEN OR SIGNED 23 DOCUMENTS ON BEHALF OF THE LEGION OTHER THAN SOME LETTERS ON 24 THE STATIONERY AND THAT HE HAD NO POWER TO MAKE ANY DECISION 25 ON BEHALF OF THE LEGION; THUS, DEMONSTRATING NO POWER HAD 26 BEEN GIVEN TO HIM TO DISPOSE OF THESE ASSETS. 27 THE LITIGATION IN EUROPE WAS SETTLED BY THE 28 SIGNATURE ON SEVERAL DOCUMENTS IN JULY 1990, INCLUDING A
page 15 1 SETTLEMENT AGREEMENT STATING THAT 45 PERCENT OF THE ASSETS 2 WOULD GO TO THE LEGION AND 55 PERCENT TO JEAN FARREL’s HEIR, 3 JOAN ALTHAUS, AFTER PAYMENT OF COSTS. 4 IF SHE TESTIFIES CONSISTENTLY WITH HOW SHE HAS 5 BEFORE, DEFENDANT LAVONNE FURR WILL TESTIFY THAT AT THE TIME 6 OF THE SETTLEMENT IT HAD NOT BEEN DISCLOSED TO HER HOW MUCH 7 MONEY WAS INVOLVED. EVEN NOW, SHE DOESN'T BELIEVE THERE WAS 8 MORE THAN 1 MILLION DOLLARS, AND ALSO THAT SHE’s NEVER SEEN 9 THE BANK ACCOUNT STATEMENTS OPENED TO RECEIVED THE MONEY, 10 NOR ANY INVENTORY. 11 THE SETTLEMENT ALSO INVOLVED AN AGREEMENT CALLED A 12 MANDATE AGREEMENT STATING THAT A MAN, ROLAND ROCHAT, 13 R-O-C-H-A-T, WAS TO BE NECA’s ONLY DIRECTOR AND WAS SUPPOSED 14 TO DIRECT THE — THE ASSETS IN TERMS OF THE SETTLEMENT 15 AGREEMENT. AFTER PAYING THE INHERITANCE TAXES, THE 16 PROVISIONS OF THE MANDATE AGREEMENT WERE CARRIED OUT AND THE 17 SIGNING OF MR. Carto’s NAME WITH HIS AUTHORIZATION AND, 18 AGAIN, RECITES THE SAME FACTS THAT MISS JEAN FARREL HAD 19 OWNED NECA CORPORATION AND IDENTIFIES VARIOUS ASSETS, 20 INCLUDING UNSET DIAMONDS IN SINGAPORE, ALL OF WHICH WAS TO 21 BE DIRECTED 45 PERCENT TO THE PLAINTIFF AND 55 TO 22 JOAN ALTHAUS. 23 THE EVIDENCE WILL DEMONSTRATE THAT THE ASSETS, 24 ACCORDING TO MR. CARTO, WERE WORTH IN EXCESS OF 10 MILLION 25 DOLLARS. ROLAND ROCHAT TRANSFERRED THE 45 PERCENT TO 26 PATRICK FOETISCH, WHO WAS HIRED BY MR. CARTO. BANK ACCOUNT 27 WAS SET UP, AND MR. FOETISCH AND DEFENDANT HENRY FISCHER WAS 28 GIVEN SIGNATORY POWER OVER THE ACCOUNT. ACCOUNT WAS SET UP
page 16 1 IN THE NAME OF VIBET AT BANQUE CANTRADE, C-A-N-T-R-A-D-E, 2 LAUSANNE, L-A-U-S-A-N-N-E, IN SWITZERLAND. VIBET NEVER HAD 3 ANY OTHER ASSETS OTHER THAN THIS MONEY THAT CAME FROM THE 4 SETTLEMENT. 5 THE EVIDENCE WILL DEMONSTRATE THAT DEFENDANT 6 LAVONNE FURR RECEIVED 5 THOUSAND DOLLARS FROM THE SETTLEMENT 7 AND THAT THE DEFENDANT, HENRY FISCHER, RECEIVED MONEY OVER 8 AND ABOVE OUT-OF-POCKET EXPENSES IN THE SUM MR. CARTO AND 9 FISCHER DECIDED WOULD BE SUFFICIENT. 10 THERE’s SOME BOARD MINUTE MEETINGS FROM JANUARY 11 1991 STATING THAT THE MONEY DUE TO BE LIBERATED DUE TO THE 12 PLAINTIFF WOULD BE LIBERATED SOON, AND AT WHICH TIME THE 13 PLAINTIFF WOULD BE ABLE TO PAY ITS MANY DEBTS, WHICH HAD 14 BEEN INCURRED OVER THE FIVE YEARS FOR ATTORNEYS. AND IT 15 WOULD BE ABLE TO ESTABLISH A RESERVE BEYOND THAT. FURTHER, 16 HE CITES MR. CARTO ASKED THAT HIS POWER OF ATTORNEY WOULD BE 17 CONFIRMED AND RENEWED. AND RESOLUTION WAS PASSED 18 AUTHORIZING TO TAKE WHAT MEASURES WERE NECESSARY TO SECURE 19 THE PLAINTIFF’s PROPERTY WAS DERIVED FROM MISS JEAN FARREL. 20 POWER OF ATTORNEY WAS SIMILARLY GIVEN TO HENRY FISCHER 21 STATING THE SAME THING. 22 THEN THERE COMES A CRUCIAL BOARD MEETING. 23 ACTUALLY, THERE ARE 2 SETS OF MINUTES THAT RECITE. THEY'RE 24 REPEATING WHAT HAPPENED AT THE MEETING OCCURING ON THE SAME 25 MOMENT ON THE SAME DAY. BOTH ARE DATED MARCH 5, 1991. 26 LAVONNE FURR WILL TESTIFY THAT FIRST SET OF THEM WAS 27 PREPARED BY MR. CARTO. AND THEY RECITE THERE WAS A BOARD 28 MEETING ATTENDED BY MR. AND MRS. FURR AND BY DIRECTORS
page 17 1 THOMAS KERR, HARVEY TAYLOR, AND THEY ELECTED THEMSELVES AND 2 ALSO JACK RINER, SAM DICKSON, AND NOEL MERRIHEW, 3 M-E-R-R-I-H-E-W, SEVEN DIFFERENT PEOPLE, AS DIRECTORS. 4 THEY RECITE MRS. FURR RAISED THE SUBJECT OF THE 5 INHERITANCE AND THERE WAS A DISCUSSION. A RESOLUTION WAS 6 PASSED AND ACKNOWLEDGING MR. Carto’s VOLUNTEER WORK 7 ACCEPTING HIS RESIGNATION AS AGENT AND THEN STATING THAT THE 8 FARREL ESTATE PROCEEDS NOT BE ACCEPTED IN PLAINTIFF, BUT 9 INSTEAD, DIVERTED. MR. FURR AUTHORIZED AND DIRECTED PATRICK 10 FOETISCH, THE ATTORNEY IN SWITZERLAND HIRED BY MR. CARTO, TO 11 CARRY OUT THE DIVERSION. 12 YOU WILL HEAR TESTIMONY FROM PEOPLE WHO ARE STATED 13 IN THOSE MINUTES TO HAVE BEEN PRESENT, NOT ONLY WERE THEY 14 NOT PRESENT, BUT THEY WEREN'T CONSULTED. THEY NEVER AGREED 15 TO THIS AFTER THE FACT OR BEFORE THE FACT. THAT INCLUDES 16 HARVEY TAYLOR AND THOMAS KERR. 17 MR. AND MRS. FURR, IF THEY TESTIFY CONSISTENTLY 18 WITH HOW THEY HAVE BEFORE TESTIFIED, THEY NEVER SPOKE TO 19 MR. KERR, WHO IS STATED AS BEING PRESENT AND VOTING FOR 20 THIS, AND INSTEAD, CARTO CLAIMED TO HAVE SPOKEN TO THEM. SO 21 THERE WASN'T A CONFERENCE CALL. THERE WASN'T A MEETING, 22 FORMAL OR INFORMAL. INDEED, SINCE THE SETTLEMENT HAD 23 ALREADY OCCURRED, THERE’s NO EVIDENCE THERE WAS ANY NEED TO 24 ABANDON THE ASSET. 25 IN ANY CASE, THERE ARE MINUTES OF ANOTHER SUPPOSED 26 MEETING OCCURRING AT PRECISELY THE SAME MOMENT SIGNED BY 27 MR. FURR RECITING THE ELECTION OF DIRECTORS AND STATING 28 THERE WAS NO OTHER BUSINESS AT THE MEETING OTHER THAN THE
page 18 1 ELECTION OF THE DIRECTORS, FURTHER DEMONSTRATING THAT THE 2 FIRST SET OF MINUTES SUPPOSEDLY APPROVING A DIVERSION OF THE 3 ASSETS IS FRAUDULENT. 4 THERE’s A MARCH 1991 LETTER DRAFTED BY MR. CARTO 5 THAT STATES THAT AN OFFSHORE TRUST, INTERNATIONAL LEGION FOR 6 THE SURVIVAL OF THE FREEDOM, WAS ESTABLISHED. WE HAVE NO 7 EVIDENCE ABOUT SUCH ENTITY. NO ACCOUNTING HAS BEEN PROVIDED 8 IF IT RECEIVED THE FUNDS OR NOT. 9 THEN JUNE 5, 1991, THERE’s A LETTER SENT BY DAVID 10 HOOPER, LEGION’s LAWYER IN LONDON, TO MR. CARTO, THE 11 LEGION’s AGENT, STATING THAT THE REMAINDER OF FUNDS WERE TO 12 BE DIVIDED 45 PERCENT AGAIN GOING TO THE LEGION, AND THE 13 AMOUNTS WERE TO BE REMITTED TO ROLAND ROCHAT AND THE 14 TRANSFER HAD BEEN COMPLETED LESS A PAYMENT OF 25,000 POUNDS 15 FOR MR. HOOPER’s FEES. AND THE LEGION HAD RECOVERED 45 16 PERCENT OF $16,855,000 — I'M SORRY $16,855,797. THAT HAS 17 OVER 7.5 MILLION DOLLARS. THAT MONEY HAD BEEN RECOVERED TO 18 THE ACTIONS OF MR. HOOPER. LETTER DOESN'T MENTION ANYTHING 19 IN REFERENCE TO THE GEMS, SO IT’s UNKNOWN WHAT HAPPENED TO 20 THE GEMS. PRESUMABLY THAT’s SOME UNKNOWN DOLLAR SUM ON TOP 21 OF THAT MONEY. 22 IF HE TESTIFIES CONSISTENT WITH HOW HE DID BEFORE, 23 THE EVIDENCE WILL DEMONSTRATE MR. CARTO KNOWS HOW THE FARREL 24 LITIGATION, 45 PERCENT THAT WENT TO VIBET, WAS SPENT. AND 25 HE HAS DOCUMENTS IN HIS CONTROL MEMORIALIZING HOW IT WAS 26 SPENT AND THE DISTRIBUTION OCCURRED UNDER HIS DIRECTION 27 HANDLED BY PATRICK FOETISCH IN EUROPE. 28 WE KNOW SOME OF THE INCIDENTS OF DIVERSION BECAUSE
page 19 1 THERE ARE SOME DOCUMENTS. ONE IS A SEPTEMBER 25, 1991 2 DOCUMENT OF $100,000 WIRED SUPPOSEDLY FOR THE PLAINTIFF TO 3 FIRST INTERSTATE BANK. THERE ARE ALSO SOME PROMISSORY 4 NOTES. THERE’s NO RESOLUTIONS AUTHORIZING ANY OF THE MONEY 5 GOING TO VIBET OR VIBET LENDING THE MONEY TO LIBERTY LOBBY, 6 THE FOUNDATION TO DEFEND THE FIRST AMENDMENT, BUT THERE ARE 7 PROMISSORY NOTES STATING THAT MONEY WAS LENT BY VIBET, WHICH 8 HAD NO OTHER SOURCE OF FUNDS TO LIBERTY LOBBY AND FOUNDATION 9 TO DEFEND THE FIRST AMENDMENT. 10 THEN IN MARCH 1992 THERE’s ANOTHER MINUTES OF THE 11 BOARD OF DIRECTORS MEETING AGAIN ELECTING DIRECTORS. THIS 12 TIME, SIX DIRECTORS. AGAIN, MR. AND MRS. FURR ARE NOT A 13 MAJORITY OF THE DIRECTORS. STATING THAT HARVEY TAYLOR AND 14 TOM KERR WERE PRESENT AND THEY APPROVED THE EARLIER YEAR'S, 15 MARCH 5, 1991 MINUTES. MARCH 5, 1991 IS WHEN THERE WERE 2 16 SETS OF FRAUDULENT MINUTES FOR MEETINGS THAT NEVER 17 OCCURRED. MR. TAYLOR AND KERR WILL TESTIFY THEY NEVER 18 PARTICIPATED IN THE MEETING APPROVING SUCH MINUTES. 19 THE TOTAL MONEY TO THE FOUNDATION TO DEFEND THE 20 FIRST AMENDMENT THAT WE SEEN DOCUMENTATION FOR, THE EVIDENCE 21 WILL SHOW, IS AT LEAST $750,000, TOGETHER WITH $2,750,000 AT 22 LEAST TO LIBERTY LOBBY. ACCORDING TO THE DOCUMENTS PRODUCED 23 TO DATE, THAT THERE’s AT LEAST 3.5 MILLION DOLLARS THAT WAS 24 DIVERTED THROUGH VIBET TO LIBERTY LOBBY AND FOUNDATION TO 25 DEFEND THE FIRST AMENDMENT. 26 THEN IN DECEMBER 1992 MRS. FURR SIGNED MINUTES OF 27 ANOTHER BOARD MEETING PREPARED BY MR. CARTO STATING THAT THE 28 OFFICIALS IN SWITZERLAND REQUIRED A NEW POWER OF ATTORNEY
page 20 1 FOR MR. FISCHER TO ACT ON BEHALF OF THE PLAINTIFF TO SECURE 2 THE PROPERTY OF LEGION DERIVED FROM JEAN FARREL; THUS, 3 FURTHER DEMONSTRATING THERE HAD BEEN NO APPROVAL OF ANY GIFT 4 OR SALE OR DIVERSION OF ASSETS TO MR. CARTO OR ANYONE ELSE. 5 MR. CARTO HAS ADMITTED THAT THE DIRECTORS INCLUDED 6 PERSONS BEYOND MR. AND MRS. FURR. 1993, FOR EXAMPLE, 7 INCLUDED TOM KERR AND HARVEY TAYLOR, THE PERSONS WHO WERE 8 NOT PRESENT AT THE MEETING STATED TO BE PRESENT IN THE 9 FRAUDULENT MINUTES. 10 ANOTHER MEETING WAS HELD MARCH 1993. THIS TIME, 11 SEVEN DIRECTORS WERE ELECTED. AGAIN, MR. AND MRS. FURR WERE 12 NOT THE MAJORITY OF THE DIRECTORS. THEN IN JUNE OF 1993, 13 MR. CARTO TOLD TOM MARCELLUS, WHO IS THE PLAINTIFF’s C.E.O., 14 THAT THE FARREL ESTATE MONEY WAS BEING TRANSFERRED TO, 15 QUOTE, “GOOD CAUSES,” CLOSED QUOTE. 16 JUNE 18, 1993, DEFENDANT LAVONNE FURR TOLD TOM 17 MARCELLUS, MR. CARTO HAD NO POWER OF ATTORNEY FOR THE LEGION 18 EXCEPT SPECIFIC MATTERS WHERE HE WAS GRANTED A FORMAL POWER 19 OF ATTORNEY. AND MR. CARTO WAS VAGUE AND EVASIVE AND DIDN'T 20 KEEP HER AND MR. FURR INFORMED ON MATTERS CONCERNING THE 21 PLAINTIFF. THE EVIDENCE WILL DEMONSTRATE MR. MARCELLUS 22 WROTE TO MRS. FURR SEEKING OTHER DOCUMENTS THAT FORMALIZED 23 WHAT MR. Carto’s CAPACITY AS AGENT WAS FOR THE BOARD. 24 ON JULY 13, 1993, MRS. CARTO TOLD TOM MARCELLUS 25 $250,000 HAD COME FROM THE FARREL ESTATE AND WAS PLACED INTO 26 THE VIBET BANK ACCOUNT BY THE LEGION SWISS ATTORNEY. IT WAS 27 THEN LOANED BACK TO THE LEGION TO CREATE THE APPEARANCE ON 28 THE BOOKS THAT THERE WAS A SUBSTANTIAL DEBT IN CASE THERE
page 21 1 WAS A FUTURE ADVERSE JUDGMENT BY A CREDITOR AGAINST THE 2 LEGION. 3 IN AUGUST OF 1993, THERE’s EVIDENCE THAT 100 4 THOUSAND DOLLARS WAS WIRED TO LIBERTY LOBBY FROM THE 5 LEGION’s BANQUE CANTRADE ACCOUNT. THE EVIDENCE DEMONSTRATES 6 CARTO ORDERED THE TRANSFER TO OCCUR. IN AUGUST 1993, 7 MRS. CARTO TOLD TOM MARCELLUS VIBET CONTROLLED THE FARREL 8 ESTATE PROCEEDS. 9 TOM MARCELLUS HAD A CONVERSATION WITH MRS. FURR ON 10 AUGUST 20 OR 21, 1993, WHERE SHE STATED SHE HAD NO INKLING 11 OF HOW MUCH MONEY THE LEGION HAD RECEIVED, WHERE THE MONEY 12 WAS, OR HOW IT WAS BEING DISBURSED; THAT MR. CARTO COULD NOT 13 SPREAD IT AROUND TO GOOD CAUSES, IT WASN'T HIS MONEY; AND 14 THAT MR. CARTO MIGHT TRY TO USE THE PLAINTIFF’s MONEY TO 15 HELP RECOVER LOSSES AT LIBERTY. 16 AUGUST 16, 1994, MRS. CARTO TOLD TOM MARCELLUS 17 THAT THE FARREL ESTATE PROCEEDS WERE BEING HELD IN 18 SWITZERLAND AND COULDN'T BE RELEASED UNTIL TAXES WERE PAID, 19 EXCEPT THAT $250,000 HELD BY VIBET COULD BE RELEASED, THAT 20 CARTO HAD SET UP VIBET TO KEEP THE MONEY FROM PLAINTIFF IN 21 CASE OF LITIGATION AGAINST THE PLAINTIFF. 22 AUGUST 27, 1993, TOM MARCELLUS HAD SEVERAL 23 TELEPHONE CONVERSATIONS WITH LEWIS AND LAVONNE FURR WHERE 24 MR. FURR STATED IT WAS HIS UNDERSTANDING THAT HE AND HIS 25 WIFE HAD BEEN USED AS PUPPET BOARD MEMBERS SO CARTO COULD DO 26 WHAT HE WANTED WITH PLAINTIFF; THAT THE 2 OF THEM DECIDED TO 27 RESIGN. 28 SEPTEMBER 16, 1993, THEY DID RESIGN IN A LETTER
page 22 1 THAT DATE. SEPTEMBER 24, 1993, MR. Carto’s AGENCY WAS 2 TERMINATED. SEPTEMBER 21, 1993, MR. CARTO WROTE A LETTER TO 3 MRS. FURR ACKNOWLEDGING THAT THE FURRS HAD RESIGNED AND 4 ASKING HER TO SIGN PURPORTED MINUTES OF A MEETING, A 5 BACKDATED MEETING FROM MARCH 1993, WHICH HE ADMITS DIDN'T 6 TAKE PLACE, AND ALSO ASKING THEM TO SIGN MINUTES OF A 7 SEPTEMBER 16 MEETING WHICH HE ADMITS DIDN'T TAKE PLACE, SO 8 HE COULD HAVE ON PAPER AN ELECTION OF HENRY FISCHER AND 9 MRS. CARTO BEFORE THE FURRS RESIGNED. 10 THEREAFTER, THE FURRS WERE REPLACED BY THE 11 REMAINING DIRECTOR, THOMAS KERR, AND MR. CARTO WAS INFORMED 12 OF HIS TERMINATION. DESPITE THE TERMINATION, THERE WERE 13 ADDITIONAL FRAUDULENT MINUTES OCCURRING AFTER THE 14 TERMINATION, FROM NOVEMBER 1993. MR. AND MRS. FURR AND 15 MRS. CARTO HAVE CONTINUED TO HAVE PUPPET BOARD OF DIRECTORS 16 MEETINGS IN 1994 AND I STATED IN OPEN BANK ACCOUNTS AND MADE 17 DEMANDS FOR TURNOVER OF ALL ASSETS. SUCH MEETINGS HAVE 18 OCCURRED IN 1995. 19 IN SUM, I BELIEVE THE EVIDENCE WILL DEMONSTRATE 20 THAT PLAINTIFF NEVER GAVE UP THIS ASSET, CONTINUES TO TRY TO 21 EXERCISE CONTROL OVER IT AND WAS DECEIVED BY THE DEFENDANTS 22 ABOUT THE LOCATION AND SIZE OF THE ASSETS, AND IT IS 23 CONTINUING TO BE DECEIVED TO THIS DAY. 24 THE COURT: THANK YOU, SIR. DID THE DEFENSE WANT TO 25 MAKE A STATEMENT NOW OR WAIT UNTIL LATER? 26 MR. WAIER: NO, WE WOULD LIKE TO MAKE A STATEMENT, AN 27 OPENING STATEMENT. 28 AT THIS JUNCTURE I MOVE FOR NONSUIT, YOUR HONOR.
page 23 1 HE’s NOT LAID OUT ESSENTIAL FACTS TO PROVE THE CASE AND THAT 2 HE’s NOT LISTED THE SPECIFICITY, OTHER THAN SPECULATION, ANY 3 DAMAGES AS A RESULT, WHICH ARE KEY AS TO ANY CLAIM THAT THEY 4 HAVE. 5 THE COURT: I'LL DENY THE MOTION. GO AHEAD. 6 MR. WAIER: OKAY. AS A PRELIMINARY BEFORE I START MY 7 OPENING STATEMENT, I WANT TO INDICATE TO THE COURT THAT I 8 DID HEAR IN PLAINTIFF’s OPENING STATEMENT THAT THEY INDICATE 9 THAT THEY ARE SEEKING REDRESS FOR DEFALCATIONS OR ALLEGED 10 DEFALCATIONS THAT TOOK PLACE SUBSEQUENT TO JULY 22, 1994, 11 THE DATE THE COMPLAINT WAS FILED. 12 UNDER THE LAW, THEY'RE NOT ENTITLED TO THAT. 13 UNDER THE LAW, THEY'RE NOT ENTITLED TO ANY CLAIM AFTER JULY 14 22, 1994, TO SEEK REDRESS. AT LEAST IN THIS PROCEEDING, 15 THAT’s THE LAW. THERE’s BEEN NO AMENDMENT TO THE 16 COMPLAINT. AND THEREFORE, YOUR HONOR, I'M RAISING THIS 17 ISSUE NOW IN CASE THIS BECOMES AN ISSUE DOWN THE LINE WHERE 18 I'M GOING TO OBJECT AS TO THAT EVIDENCE. 19 I DO A BETTER JOB STANDING, IF I COULD. 20 THE COURT: THAT’s FINE. THERE’s A PODIUM THERE. 21 MR. WAIER: LISTENED INTENTLY AS BEST I COULD TO 22 PLAINTIFF’s OPENING STATEMENT AS TO WHAT THEY INTEND TO 23 PROVE AT THE TIME OF THIS TRIAL. 24 I WANT TO CAUTION THE COURT IN LISTENING TO THE 25 EVIDENCE AND WEIGHING THE EVIDENCE AS TO THE NUMEROUS 26 EVIDENTIARY INFIRMITIES THAT ARE GOING TO SHOW UP DURING THE 27 COURSE OF THEIR PRESENTATION OF THEIR CASE. A LOT OF WHAT 28 THEY SAY, THEY WILL BE UNABLE TO PROVE EITHER BECAUSE OF A
page 24 1 LACK OF FOUNDATION FOR THE DOCUMENTS THEY INTEND TO BRING IN 2 OR OTHER PROOF INFIRMITIES. I WANT TO ALERT THE COURT TO 3 THAT IN THE VERY BEGINNING BECAUSE I DO NOT BELIEVE THAT 4 THEY CAN PROVIDE PROOF AS TO ANY OF THE CLAIMS ALLEGED IN 5 THE COMPLAINT OR AS TO WHAT THEY JUST TOLD THE COURT IN 6 OPENING STATEMENT. 7 ALSO, SINCE THIS IS NOT A JURY TRIAL AND I KNOW 8 YOU ARE SAVVY AT TRIAL, BUT I DO WANT TO INDICATE THERE ARE 9 2 SIDES OF THIS CASE AND THAT TO KEEP AN OPEN MIND IN 10 LISTENING TO THE CASE AS YOU HEAR THE EVIDENCE COME IN. 11 THERE’s ANOTHER SIDE TO THE STORY AND WE'LL PRESENT THE STORY. 12 LET ME START OFF AT THE VERY BEGINNING. WE'RE 13 DEALING WITH A PLAINTIFF CALLED THE LEGION FOR THE SURVIVAL 14 OF FREEDOM, INC., WHICH COUNSEL INDICATED TO YOU SOMETIMES 15 REFERRED TO AS L.S.F. IT DOES HAVE A PUBLICATION CALLED THE 16 INSTITUTION FOR HISTORICAL REVIEW, BUT ONE OF THE PRIMARY 17 PROBLEMS THAT WE HAVE HERE, AS HAS BEEN INDICATED EARLIER BY 18 ME, IS A STANDING ISSUE: WHO ACTUALLY IS THE LEGION? WHO 19 CONTROLS THE LEGION? AND IN FACT, THAT HAS BEEN BROUGHT OUT 20 IN OPENING STATEMENT BY MR. MUSSELMAN, AND THAT ISSUE IS 21 PRESENTLY PENDING IN HOUSTON, TEXAS, AND SHOULD BE DECIDED 22 ON NOVEMBER 8TH. 23 I BELIEVE THERE WILL BE A SUBSTANTIAL PROOF ISSUE 24 AS TO WHO IS THE LEGION AND THAT UNLESS THEY PASS OVER THAT 25 HURDLE, THEY DON'T GET TO ANY OF THE CLAIMS THEY ALLEGE IN 26 THEIR COMPLAINT. 27 MR. BEUGELMANS: YOUR HONOR, I OBJECT TO THIS 28 ARGUMENT. IT’s NOT GERMANE TO THE ISSUES IN THE COMPLAINT.
page 25 1 THERE IS NO AFFIRMATIVE DEFENSE IN THE ANSWER THAT RAISES 2 EITHER STANDING OR CAPACITY TO SUE. 3 SECONDLY, THE ISSUE OF WHO THE DIRECTORS OF THE 4 CORPORATION LAWFULLY ARE HAVE BEEN DECIDED BY THE DISTRICT 5 COURT, COURT OF APPEAL. MR. CARTO AND HIS WIFE BROUGHT SUIT 6 AGAINST THE DIRECTORS IN 1991. THE CASE WAS HEARD BY JUDGE 7 POLIS IN ORANGE COUNTY. THE PLAINTIFFS, MR. CARTO AND THE 8 ALLIES, LOST. THE CASE WENT TO APPEAL, AND THIS DECISION 9 COME DOWN. WE HAVE THIS MORNING A COPY OF THE COURT OF 10 APPEAL’s DECISION. 11 MR. WAIER: THIS IS NOT AN ISSUE BEFORE THE COURT, YOUR 12 HONOR. 13 THE COURT: LET ME READ THE DECISION, BUT I AM GOING TO 14 ALLOW THE ARGUMENT TO GO ON WITH — THE OPENING STATEMENT 15 TO GO ON OVER YOUR OBJECTION. I HAVE READ, BY THE WAY, THE 16 WHOLE STATEMENT OF DECISION IN THE CASE. 17 MR. WAIER: I TEND TO DISAGREE TO THE EXTENT AND SCOPE 18 OF WHAT COUNSEL PLACES ON THAT DECISION. 19 RETURNING FOR A MOMENT, BY WAY OF BACKGROUND -- 20 AND I DON'T KNOW IF YOUR HONOR HAS HAD THE OPPORTUNITY TO 21 READ THE VARIOUS BRIEFS WE SUBMITTED TO THE COURT. 22 THE COURT: I HAVE. 23 MR. WAIER: I WILL ATTEMPT TO SUMMARIZE AS OPPOSED TO 24 REGURGITATE. WE BELIEVE THE EVIDENCE WILL SHOW WHEN THE 25 COURT APPLIES THE LAW TO A NONPROFIT CORPORATION — AND 26 THAT’s WHAT WE'RE DEALING WITH HERE. THE LEGION FOR THE 27 SURVIVAL OF FREEDOM, INC., IS A TEXAS NONPROFIT CORPORATION 28 GOVERNED BY LAWS FAR STRICTER AND FAR DIFFERENT THAN YOUR
page 26 1 NORMAL PROFIT CORPORATIONS. IN KEEPING WITH THE LAWS ON THE 2 ISSUE, LET ME GO BACK AND EXPLAIN WHAT WE BELIEVE THE 3 EVIDENCE WILL SHOW. 4 WE BELIEVE THAT WHAT THE EVIDENCE WILL SHOW WAS 5 THAT THE BOARD OF DIRECTORS, THROUGH LAVONNE AND LEWIS FURR, 6 AMONG OTHERS, MADE A PRUDENT AND WISE DECISION IN 1985. 7 THAT PRUDENT AND WISE DECISION, WHICH, BY THE WAY, THE 8 EVIDENCE WILL SHOW IS THE ONLY DECISION THAT THEY COULD 9 LEGALLY HAVE MADE, WAS NOT TO GO OVERSEAS AND COMMIT 10 RESOURCES OF THE LEGION TO FIGHT A COSTLY AND A VERY RISKY 11 LITIGATION IN SWITZERLAND TO RECOVER ASSETS OR ALLEGED 12 ASSETS FROM THE ESTATE OF JEAN FARREL-EDISON. 13 WE BELIEVE THAT THE EVIDENCE IS GOING TO SHOW THAT 14 PRIOR TO THAT TIME THAT THERE WAS A RUNNING RELATIONSHIP 15 BETWEEN DEFENDANT WILLIS CARTO, HIS WIFE ELISABETH CARTO, 16 AND JEAN FARREL-EDISON. WE BELIEVE THAT THE EVIDENCE WILL 17 SHOW THAT JEAN FARREL-EDISON NOT ONLY WAS A MAJOR SUPPORTER 18 OF THE LEGION, BUT SHE WAS A MAJOR SUPPORTER OF OTHER 19 ORGANIZATIONS IN WHICH WILLIS CARTO WAS INVOLVED AND SUCH AS 20 LIBERTY LOBBY, INC. 21 ALSO, THE EVIDENCE IS GOING TO SHOW THAT SHE WAS 22 INVOLVED WITH ANOTHER ORGANIZATION, ONE THAT HAS BEEN 23 IDENTIFIED IN OPENING STATEMENT BY THE PLAINTIFF, AND THAT 24 IS AN ORGANIZATION — NONPROFIT ORGANIZATION CALLED THE 25 FOUNDATION TO DEFEND THE FIRST AMENDMENT; AND THAT THE 26 EVIDENCE WILL SHOW, THROUGH THE WORDS OF MR. MARCELLUS, THAT 27 MONEYS WERE TO GO TO THE FOUNDATION TO DEFEND THE FIRST 28 AMENDMENT AT THE EXPRESS DIRECTION OF MR. MARCELLUS.
page 27 1 THE EVIDENCE WILL SHOW ON JANUARY 14, 1985, 2 BEFORE — SHORTLY BEFORE JEAN FARREL-EDISON DIED, 3 MR. TOM MARCELLUS, WHO HAS BEEN IDENTIFIED IN THE OPENING 4 STATEMENT BY PLAINTIFF, WROTE JEAN FARREL-EDISON IN LUTRY, 5 SWITZERLAND, A LETTER. AND IN THIS LETTER TOWARD THE 6 BOTTOM, HE STATES: “TO JEAN FARREL-EDISON, AS FOR FUTURE 7 CONTRIBUTIONS, PLEASE CONTINUE TO MAKE YOUR CHECKS OUT TO 8 THE FOUNDATION TO DEFEND THE FIRST AMENDMENT OR JUST 9 F.D.F.A. AND MAIL THEM HERE TO THE I.H.R. AT P. O. BOX 1306, 10 TORRANCE, CALIFORNIA. THE ACCOUNT IS THE SAFEST ONE WE HAVE 11 AND CANNOT BE GRABBED BY OUR ENEMIES." 12 THE EVIDENCE WILL SHOW THAT ALL OF THE 13 ORGANIZATIONS WORK TOGETHER FOR A COMMON SCHEME TO PROMOTE 14 REVISIONISM, AMONG OTHER TOPICS, TO THE COMMON PUBLIC, TO 15 DISCUSS CONSTITUTIONAL ISSUES. AND THEY WERE ALL IN THE 16 SAME BALL PARK, AS THE EVIDENCE WILL SHOW, WITH RESPECT TO 17 THEIR EDITORIALS THAT INCLUDED LIBERTY LOBBY, WHO PUT OUT 18 THE SPOTLIGHT. YOU WILL SEE LETTERS FROM JEAN TALKING ABOUT 19 HOW SHE ENJOYED THE SPOTLIGHT, WHICH HAPPENED TO BE A 20 PUBLICATION OF LIBERTY LOBBY, INC., AND SHE WAS, THE 21 EVIDENCE WILL SHOW, A MAIN SUPPORTER OF LIBERTY LOBBY. SHE 22 WAS A MAIN SUPPORTER OF THE LEGION. SHE WAS A MAIN 23 SUPPORTER OF F.D.F.A. 24 COUNSEL POINTED OUT TO THE COURT THE EVIDENCE WE 25 BELIEVE WILL SHOW SHE DIED IN 1985. HOWEVER, WHAT WAS NOT 26 DISCUSSED IN THE OPENING STATEMENT BY COUNSEL WAS THAT SHE 27 LEFT A WILL, AND THIS BECAME THE SUBJECT OF MUCH 28 CONTROVERSY. THE EVIDENCE WILL SHOW THAT WILL LEFT NOTHING
page 28 1 TO THE LEGION. THEY WERE MERELY A SECONDARY BENEFICIARY. 2 IT WILL SHOW THAT SHE LEFT HER ENTIRE ESTATE TO JOAN ALTHAUS 3 WHO HAPPENED TO BE A HOUSEKEEPER AND NEIGHBOR OF JEAN 4 FARREL-EDISON; AND ONLY, IF JOAN ALTHAUS PREDECEASED HER, 5 THAT THE LEGION WOULD RECEIVE ANY MONIES. THE EVIDENCE WILL 6 SHOW THAT DIDN'T OCCUR. THAT’s WHERE THE SAGA BEGINS AS TO 7 WHY WE'RE HERE TODAY. 8 WILLIS CARTO AND LIZ HAD A RUNNING RELATIONSHIP 9 WITH JEAN FARREL-EDISON. ELISABETH CARTO, THE EVIDENCE WILL 10 SHOW, VACATIONED WITH JEAN FARREL-EDISON ON NUMEROUS 11 OCCASIONS. THE EVIDENCE WILL SHOW THAT SHE WANTED TO 12 CONTRIBUTE, ON HER DEATH, TO THE SAME CAUSES ESPOUSED BY 13 WILLIS AND ELISABETH CARTO, INCLUDING REVISIONISM, AMONG 14 OTHER ISSUES AND TOPICS. SHE WANTED TO MAKE SURE THAT 15 WILLIS’s VOICE WAS CONTINUED TO BE HEARD IN THIS COUNTRY, 16 AND SHE WAS WILLING TO SUBSIDIZE THAT ON HER DEATH. 17 UNFORTUNATELY, WHAT THE EVIDENCE IS GOING TO SHOW 18 AFTER SHE DIED AND AFTER THE WILL CAME TO THE HEAD, JOAN 19 ALTHAUS MADE A CLAIM SHE WAS ENTITLED TO ALL OF THE ESTATE; 20 NO ONE ELSE WAS ENTITLED TO IT. THAT INCLUDED CERTAIN BONDS 21 THAT WERE PLACED IN A CORPORATION BY THE WAY, THAT THE 22 EVIDENCE WILL SHOW THAT MR. CARTO, AMONG OTHERS, HELPED TO 23 FORM FOR HER BEFORE HER DEATH, AND THAT THESE BONDS WERE 24 VERY VALUABLE. 25 THE EVIDENCE WILL SHOW THAT SHE PLACED THESE BONDS 26 IN VARIOUS SAFETY DEPOSIT BOXES. AT LEAST ONE LETTER THAT 27 WILL COME INTO PLAY SHOWS THAT THERE WERE 10, ONLY ONE OF 28 WHICH WAS DIRECTED TO THE LEGION. THAT’s WHAT THE EVIDENCE
page 29 1 WILL SHOW. THE EVIDENCE WILL SHOW WHEN WILLIS HEARD ABOUT 2 THE WILL, WHICH WAS HANDWRITTEN, BY THE WAY, IN FRENCH, THE 3 EVIDENCE WILL SHOW THAT HE WENT TO LEWIS AND LAVONNE FURR. 4 AND RETURNING FOR A MOMENT AS TO WHO CONTROLLED 5 THE LEGION, BECAUSE THERE WAS MUCH BALLYHOO ABOUT THIS IN 6 THE OPENING STATEMENT OF COUNSEL, THE LAW SHOWS THAT THERE 7 IN A NONPROFIT CORPORATION IN TEXAS. AND THE EVIDENCE WILL 8 SHOW THIS. THERE ARE TIERS OF SUPERVISORS, SO TO SPEAK, OR 9 THOSE WHO CONTROL THE NONPROFIT CORPORATION. WE HAVE, AT 10 THE TOP RUNG, MEMBERS OR INCORPORATORS, THE EVIDENCE WILL 11 SHOW, AND THEY CONTROL — THEY THEN HAVE THE POWER TO ELECT 12 DIRECTORS. AND THOSE DIRECTORS HAVE THE POWER TO MAKE 13 CERTAIN DECISIONS. 14 BUT THE ULTIMATE DECISION LIES, AS THE EVIDENCE 15 WILL SHOW, IN THE INCORPORATORS. THERE WILL BE UNREFUTED 16 EVIDENCE AT THE TIME OF TRIAL THAT WILLIS CARTO AND LAVONNE 17 FURR WERE THE ONLY 2 MEMBERS OR INCORPORATORS IN EXISTENCE 18 FOR THE LEGION IN 1985. THEY WERE THE ONLY MEMBERS AND 19 INCORPORATORS IN EXISTENCE IN 1986. IN OTHER WORDS, THE 20 EVIDENCE WILL SHOW THEY HAD THE POWER TO MAKE DECISIONS. 21 NOTWITHSTANDING THAT, WILLIS, AS THE EVIDENCE WILL 22 SHOW, CAME TO LAVONNE FURR AFTER JEAN FARREL-EDISON’s DEATH 23 AND INDICATED TO HER THAT SHE BELIEVED OR THAT HE BELIEVED 24 THAT THOSE ASSETS OR SOME OF THOSE ASSETS SHOULD BELONG TO 25 THE VARIOUS CAUSES THAT HE REPRESENTED AND THAT THE LEGION 26 SHOULD BE ENTITLED TO SOME OF THAT ESTATE AS WELL. THE 27 EVIDENCE WILL SHOW THAT THE LEGION WAS ESSENTIALLY 28 BANKRUPT. THAT’s WHAT THE EVIDENCE WILL SHOW. IT COULD NOT
page 30 1 PHYSICALLY AFFORD COSTLY LITIGATION OVERSEAS AGAINST A 2 RESIDENT WHOSE VENUE THE LITIGATION WOULD BE PURSUED. 3 GIVEN THAT, WILLIS PROVIDED A PROPOSAL TO THE 4 LEGION. THE EVIDENCE WILL SHOW THAT PROPOSAL WAS ACCEPTED 5 IN WRITING. THAT PROPOSAL STATED WHATEVER IS RECOVERED, IF 6 ANYTHING, MUST FIRST BE USED TO PAY ALL OF THE EXPENSES, 7 WHATEVER THEY MAY BE, AND PRORATE TO THE SOURCES IF WE HAVE 8 TO. IN OTHER WORDS, IF THE LEGION WERE TO PROVIDE ANY TYPE 9 OF REVENUES, WITH RESPECT TO THE RECOVERY OF THOSE ASSETS, 10 TO THE EXTENT OF THEIR INVOLVEMENT, IT WOULD BE PRORATED TO 11 THEIR PERCENTAGE INTEREST. 12 THE EVIDENCE WILL SHOW THEY DIDN'T PAY ONE DIME 13 TOWARDS ANY RECOVERY. THE ONLY PROMISE THAT WILLIS MADE IN 14 CONNECTION WITH THE PROPOSAL THAT THE EVIDENCE WILL SHOW WAS 15 THAT HE WOULD CONTINUE TO SUPPORT FINANCIALLY FOR, QUOTE, 16 YEARS TO COME, THE LEGION EFFORTS. HE DID THAT UP UNTIL 17 1993 WHEN HE WAS IMPROPERLY OUSTED FROM WHAT WE NOW KNOW IS 18 THE LEGION. 19 FOLLOWING THE RECEIPT OF THIS PROPOSAL AGAIN, AND 20 THE EVIDENCE WILL SHOW IT WAS ACCEPTED AND, IN FACT, THERE 21 WAS A SPECIAL DIRECTORS MEETING CALLED AND THE EVIDENCE WILL 22 SHOW THAT THESE MEETINGS, THOUGH THEY SAY CERTAIN 23 INDIVIDUALS WERE PRESENT, THESE MEETINGS, THE MINUTES WILL 24 SHOW CERTAIN INDIVIDUALS WERE PRESENT. WHAT WAS MEANT BY 25 THAT AND THE EVIDENCE WILL SHOW WAS THAT PEOPLE WERE 26 CONSULTED. 27 THE EVIDENCE IS GOING TO SHOW MOST OF THE MEETINGS 28 OF THE BOARD OF DIRECTORS AND THE MEMBERS OF THE LEGION TOOK
page 31 1 PLACE BY PHONE, WERE INFORMAL, AND THE EVIDENCE WILL SHOW 2 THAT THAT WAS PERFECTLY LEGAL AND PERFECTLY PROPER, AND IN 3 FACT, MOST CORPORATIONS FOLLOW THOSE SAME TYPE OF 4 PROCEDURES. 5 BUT MORE IMPORTANTLY, THIS SPECIAL DIRECTORS 6 MEETING WAS CALLED. IN THAT DIRECTORS MEETING, IT WAS 7 AGREED PURSUANT TO THAT PROPOSAL FOR WILLIS CARTO, QUOTE, 8 “THAT THE BUSINESS AGENT OF THE CORPORATION, MR. W.A. 9 CARTO, IS HEREBY AUTHORIZED AND INSTRUCTED TO TAKE WHATEVER 10 MEASURES AS IN HIS JUDGMENT ARE REQUIRED TO SECURE THE 11 PROPERTY OF THE CORPORATION WHOLLY-OWNED SUBSIDIARY NECA 12 CORPORATION AND THAT THE POWER OF ATTORNEY FOR THIS 13 CORPORATION BE GIVEN BY THE CORPORATE SECRETARY TO MR. CARTO 14 FOR THIS PURPOSE.” WELL, NECA WAS NOT ANY WHOLLY-OWNED 15 SUBSIDIARY OF THE LEGION, NEVER HAS BEEN, NEVER WAS. 16 BUT NOTWITHSTANDING THAT, THE BOARD OF DIRECTORS 17 PROVIDED MR. CARTO WITH A POWER OF ATTORNEY. AND WHY IS 18 THIS IMPORTANT, YOUR HONOR? BECAUSE PLAINTIFF, IN HIS 19 OPENING STATEMENT, SAYS IT’s THE BASIS OF THIS POWER OF 20 ATTORNEY WHICH RAISES THE FIDUCIARY RELATIONSHIP UPON WHICH 21 THE CLAIMS AGAINST MR. CARTO EXIST. IN THE SAME BREATH, IN 22 THE OPENING STATEMENT, THE EVIDENCE — THEY SAY THE 23 EVIDENCE WILL SHOW THAT THE POWER OF ATTORNEY WERE ALL 24 RUSES. THEY WEREN'T PROVIDED BY THE BOARD OF DIRECTORS, 25 THEY WERE NEVER VOTED ON BY THE BOARD OF DIRECTORS, AND 26 THEREFORE, THE ACTIONS TAKEN BY THE BOARD OF DIRECTORS WERE 27 NOT LEGAL. 28 WELL, IF THAT IS THE CASE, THEY CAN'T HAVE THE
page 32 1 CAKE AND EAT IT TOO. THEY CAN'T SAY THAT THEY BASE THEIR 2 LAWSUIT ON A COMPLAINT BASED ON A FIDUCIARY RELATIONSHIP 3 ARISING OUT OF A POWER OF ATTORNEY AND, IN THE SAME BREATH, 4 SAY THERE’s NO POWER OF ATTORNEY BECAUSE IT WASN'T PROPERLY 5 AUTHORIZED. 6 THAT’s THE IMPORTANCE OF THIS. AS THE EVIDENCE 7 WILL SHOW, WHEN IT SUITS THE LEGION TODAY, FOR THEIR 8 PURPOSES OR FOR THE PURPOSES OF THE INSIDERS TODAY, THEY'LL 9 UTILIZE WHATEVER INFORMATION THEY HAD IN THE PAST. WHEN IT 10 DOESN'T SUIT THEM, THEY SAY IT’s A RUSE. AND THAT’s WHAT 11 THE EVIDENCE IS GOING TO SHOW. 12 IN ANY EVENT, THE EVIDENCE IS GOING TO SHOW, ARMED 13 WITH THE VARIOUS POWERS OF ATTORNEY, WILLIS AND ANOTHER 14 INDIVIDUAL BY THE NAME OF HENRY FISCHER WENT OVERSEAS AND 15 BATTLED JOAN ALTHAUS OUT OF THEIR OWN POCKETS, OUT OF COMING 16 OUT OF CORPORATIONS THAT WERE CONTROLLED — NONPROFIT 17 CORPORATIONS CONTROLLED, AND AGAIN, WITH THE SAME IDEOLOGY 18 AS THE LEGION, LIBERTY LOBBY, F.D.F.A., TO ATTEMPT TO 19 RECOVER SOME OF THESE ASSETS. 20 THE EVIDENCE IS GOING TO SHOW AFTER A 5-YEAR 21 QUEST, A SETTLEMENT WAS EVENTUALLY REACHED. THIS OCCURRED 22 IN 1990. THE EVIDENCE IS GOING TO SHOW, BY THE WAY, THAT 23 LEWIS AND LAVONNE FURR WERE KEPT AWARE OF EVERYTHING THAT 24 TOOK PLACE. THEY WERE IN CONSTANT CONTACT WITH MR. CARTO, 25 EVEN HAD AT LEAST ONE CONVERSATION WITH MR. FISCHER, 26 CONCERNING WHAT WAS TO TAKE PLACE. THE EVIDENCE WILL SHOW 27 THEY APPROVED OF THIS SETTLEMENT. THIS SETTLEMENT, THE 28 SETTLEMENT APPARENTLY ALLEGEDLY APPEARS IN VARIOUS
page 33 1 DOCUMENTS. 2 AS I CAUTIONED THE COURT BEFOREHAND, IT IS 3 EXTREMELY IMPORTANT ON EVIDENTIARY ISSUES THAT WE LOOK AT 4 THESE DOCUMENTS BECAUSE THE EVIDENCE IS GOING TO SHOW — I 5 DON'T — I THINK THE EVIDENCE WILL SHOW, FIRST OF ALL, THEY 6 WOULD BE UNABLE TO BRING IN THE DOCUMENTS INTO EVIDENCE 7 BECAUSE THERE WILL BE NO FOUNDATION LAID FOR IT; AND TWO, 8 MORE IMPORTANTLY, THE EVIDENCE WILL SHOW, UNLIKE WHAT 9 COUNSEL HAS SAID IN THE OPENING STATEMENT, THESE DOCUMENTS 10 WERE NOT SIGNED BY MR. CARTO. THE EVIDENCE IS GOING TO SHOW 11 THEY WERE SIGNED BY SOME THIRD PARTY. 12 YOU WILL RECALL COUNSEL DISCUSSED VARIOUS 13 ATTORNEYS THAT WERE HIRED. THEY WERE ALL HIRED BY 14 MR. CARTO. THAT’s WHAT THE EVIDENCE WILL SHOW. ATTORNEYS 15 HAD TO BE HIRED OVERSEAS, HAD A TREMENDOUS COST AND 16 OCCURRENCES OF FEES. ALSO, THE EVIDENCE IS GOING TO SHOW 17 THAT PAT FOETISCH, WHO YOU DID HEAR ABOUT IN OPENING 18 STATEMENT, WAS NOT HIRED BY MR. CARTO. HE WAS HIRED BY THE 19 BOARD, AND THAT TOOK PLACE CONSISTENT WITH BOARD MINUTES. 20 THESE ARE MARCH 5, 1991 MINUTES THAT WILL COME 21 INTO PLAY, THE LEGION MINUTES WHERE HE WAS TO -- 22 MR. FOETISCH WAS TO DIRECT, PURSUANT TO BOARD MINUTES, THE 23 ASSETS OF THE FARREL-EDISON ESTATE THAT WERE RECOVERED 24 THROUGH THE SETTLEMENT AT THE DIRECTION OF WILLIS CARTO IN 25 ANY FASHION HE DEEMED FIT. THAT’s WHAT THE LANGUAGE IS 26 GOING TO SAY TO THIS COURT. IN OTHER WORDS, THE BOARD, 27 ACKNOWLEDGING WILLIS’s CONTRIBUTIONS AND EFFORTS, ALLOWED 28 HIM TO DIRECT THESE ASSETS TO THOSE CAUSES THAT HE SAW FIT,
page 34 1 INCLUDING THOSE THAT WERE ESPOUSED BY JEAN FARREL-EDISON. 2 AND MORE IMPORTANTLY, AGAIN, I WANT TO INDICATE TO 3 THIS COURT THESE WILL BE COMING IN. I DON'T BELIEVE THEY'LL 4 BE ABLE TO BE BROUGHT INTO EVIDENCE. TO THE EXTENT THAT 5 THEY DO COME INTO EVIDENCE, AT LEAST FROM A FOUNDATIONAL 6 BASIS, YOU WILL SEE DOCUMENTS SUCH AS THIS ONE — AND THIS 7 IS ONLY THE LAST PAGE OF THIS DOCUMENT WHERE THERE ARE 8 SIGNATURES FOR WILLIS CARTO, AND LEGION FOR THE SURVIVAL OF 9 FREEDOM INC. THESE ARE NOT WILLIS Carto’s SIGNATURE, NOR 10 DID HE SIGN ON BEHALF OF THE LEGION. THESE WERE SIGNED BY 11 SOMEONE ELSE. THESE ARE NOT HIS SIGNATURES. 12 BY GOING BACK TO THE AGREEMENT, WHICH THE EVIDENCE 13 WILL SHOW WAS APPROVED BY THE LEGION, THE LEGION WAS 14 AUTHORIZED IN ADVANCE OF THE AGREEMENTS BEFORE THEY WERE 15 SIGNED BY WHOMEVER AND WAS AGREED TO AND RATIFIED BY THE 16 LEGION. AS THE EVIDENCE WILL SHOW, COUNSEL STATED THAT 45 17 PERCENT OF THE ASSETS, ACCORDING TO THE AGREEMENTS, WERE TO 18 GO TO THE LEGION. THAT’s NOT SO. THE EVIDENCE IS GOING TO 19 SHOW THAT’s NOT WHAT THE AGREEMENT SAYS. 20 THE AGREEMENT, CALLED THE DISTRIBUTION AGREEMENT, 21 HAS PARTIES BETWEEN THEM. JOAN ALTHAUS IS ONE PARTY AND TWO 22 OTHER — ACTUALLY, A NUMBER OF OTHER PARTIES. BUT MORE 23 IMPORTANTLY, THE LEGION FOR THE SURVIVAL OF FREEDOM, INC., 24 IS ANOTHER PARTY TO THE SETTLEMENT AGREEMENT AND WILLIS 25 CARTO, AN INDIVIDUAL. WHAT IS IMPORTANT TO THIS, THIS IS 26 THE VERY AGREEMENT, RATIFIED, STATES “PARTIES 2 AND 3 27 HEREINAFTER COLLECTIVELY REFERRED TO AS THE LEGION.” SO 28 FROM THIS POINT FORWARD IN THE AGREEMENT, BOTH ARE
page 35 1 CONSIDERED THE LEGION FOR NOMENCLATURE PURPOSES. 2 WHY IS THAT IMPORTANT? BECAUSE COUNSEL SAID THAT 3 THE AGREEMENT SAYS THAT THE LEGION GETS THE MONEY. 4 TECHNICALLY, HE’s CORRECT. BUT THE LEGION IS DEFINED 5 ACCORDING TO THE VERY DOCUMENT UPON WHICH THEY RELY. AND 6 THERE’s PAROLE EVIDENCE PROBLEMS THEY'LL HAVE TO GET OVER. 7 THEY'RE NOT GOING TO BE ENTITLED TO INCLUDE PAROLE EVIDENCE 8 IN THIS MATTER; STATE SPECIFICALLY, IF I CAN FIND QUICKLY, 9 THIS PORTION OF THE AGREEMENT, “IT IS HEREBY AGREED 10 THAT” — THIS IS ON PARAGRAPH 4 OF THE DISTRIBUTION 11 AGREEMENT — “M. ROCHAT” — AND YOU HEARD ABOUT 12 MR. ROCHAT. HE HELPED DISTRIBUTE THE ASSETS — “WILL 13 DISTRIBUTE THE NET ASSETS OF NECA AS TO 55 PERCENT TO J.A.," 14 JOAN ALTHAUS, “AND AS TO 45 PERCENT TO THE LEGION,” MEANING 15 BOTH THE LEGION AND WILLIS CARTO INDIVIDUALLY BY THE EXACT 16 LANGUAGE OF THE AGREEMENT, THE VERY AGREEMENT I MIGHT ADD 17 THAT THE LEGION IS NOW RELYING UPON CLAIMING THEY WERE 18 ENTITLED TO ALL OF IT WHEN THE AGREEMENT SAYS OTHERWISE. 19 AND IN FACT, THIS IS CONSISTENT WITH THE PROPOSAL THAT WAS 20 AGREED UPON BY MR. CARTO AND THE LEGION, AS THE EVIDENCE 21 WILL SHOW, BACK IN 1986, EARLY 1986. 22 NOW THE EVIDENCE IS GOING TO SHOW THAT MR. CARTO 23 DIDN'T RECEIVE ONE PENNY IN HIS OWN POCKET OVER THIS. THE 24 EVIDENCE, WE BELIEVE, SUBJECT TO SOME EVIDENTIARY 25 INFIRMITIES THAT THE PLAINTIFF MAY HAVE, IN SHOWING ANYTHING 26 THAT CAME OUT OF THAT ESTATE, WENT TO THE VERY CAUSES THAT 27 JEAN FARREL-EDISON WANTED THOSE FUNDS TO GO TO THOSE TO 28 EXPRESS AN EDITORIAL OVER THE RADIO AND PRESS, CONSTITUTIONAL
page 36 1 VIEWS SHE BELIEVED IN, SIMILAR TO THE DIRECTION SHE GAVE 2 WILLIS, AS THE EVIDENCE WILL SHOW, BEFORE SHE DIED AND TO 3 THE DIRECTION THAT THE LEGION APPROVED OF AFTER HER DEATH. 4 THE EVIDENCE WILL SHOW THAT LEWIS AND LAVONNE 5 FURR, AS EARLY AS 1990, CONSISTENT TO THE WAY THEY HAVE 6 TESTIFIED IN DEPOSITION, KNEW ABOUT THE ASSETS, KNEW ABOUT 7 THE DISTRIBUTIONS OF MR. CARTO, KNEW EXACTLY WHERE THESE 8 MONIES WERE GOING TO AND APPROVED THEM, WHICH CREATES A VERY 9 SERIOUS STATUTE OF LIMITATIONS PROBLEM, WHICH WE RAISED IN 10 CONNECTION WITH THE BIFURCATION MOTION WHEN WE WERE STILL 11 GOING TO HAVE A JURY. AND THOSE CONSIDERATIONS, WE BELIEVE, 12 WILL SHOW THAT THIS MATTER, ALL COUNTS OF THE LEGIONS ARE 13 BARRED BY THE PARTICULAR STATUTE OF LIMITATION. THESE ARE 14 THE 3-YEAR OR OUTSIDE 4-YEAR STATUTE OF LIMITATIONS. I URGE 15 THE COURT, IN REVIEWING THE EVIDENCE, TO KEEP THAT IN THE 16 BACK OF YOUR MIND THAT THE STATUTE IS LOOMING. 17 THE OTHER ISSUE THAT COMES TO PLAY IN THE 18 LITIGATION, EVEN THOUGH IT DEALS WITH ONE OF THE AFFIRMATIVE 19 DEFENSES IN THE DEFENDANT’s ANSWER, AND THAT DEALS WITH THE 20 TERM LACHES. I THINK IT’s AN IMPORTANT ISSUE HERE. IT ALSO 21 GOES AND COVERS ANOTHER MAJOR ISSUE, AND THAT IS CORPORATE 22 OPPORTUNITY. 23 THE EVIDENCE IS GOING TO SHOW THAT THERE WAS NO 24 CORPORATE OPPORTUNITY. IN OTHER WORDS, THE EVIDENCE IS 25 GOING TO SHOW THAT THE LEGION HAD TO HAVE THE WHEREWITHAL 26 WITHIN WHICH TO TAKE PART IN THIS SUPPOSED OPPORTUNITY. 27 REMEMBER, YOUR HONOR, THE REASON WHY I RAISE THE ISSUE NOW, 28 THE LEGION, IN THE OPENING STATEMENT — IN THE OPENING
page 37 1 STATEMENT, WANTS TO STAND ON THE GROUND OF 1990 WHEN THERE 2 IS, ALL OF A SUDDEN, SOMETHING CALLED AN ASSET — OR 1991 3 WHEN THERE’s SOMETHING CALLED AN ASSET SITTING HERE. 4 THAT’s WHAT THEY'RE STANDING ON. IT IS TO GET TO 5 THAT ASSET IS WHAT WE'RE TALKING ABOUT, AS TO WHO OWNS THAT 6 ASSET. WAS THERE AN OPPORTUNITY AT THE TIME IN 1985 UPON 7 JEAN FARREL-EDISON’s DEATH THAT COULD HAVE BEEN AVAILED BY 8 THE CORPORATION TO GET TO THAT 1991 ASSET. THAT IS THE 9 KEY. THE EVIDENCE WILL SHOW THAT THE LEGION DID NOT HAVE 10 THE WHEREWITHAL TO DO THAT. THE LEGION WILL SHOW IT 11 CONSIDERED THAT. THE LEGION — I MEAN, STRIKE THAT. 12 THE EVIDENCE WILL SHOW THAT THAT WAS CONSIDERED BY 13 THE LEGION. IT DECIDED NOT TO PARTICIPATE TO THE EXTENT OF 14 ONLY THE USE OF ITS NAME WITH COURT DOCUMENTS, TO THE EXTENT 15 THAT THAT WOULD HELP BENEFIT MR. CARTO IN HIS QUEST TO 16 RECOVER THE ASSET FOR THE PROMISE IN RETURN THAT THEY WOULD 17 RECEIVE SOME FINANCING FOR YEARS TO COME, SOME NONDESCRIPT 18 FINANCING FOR YEARS TO COME, WHICH THEY RECEIVED. THE 19 EVIDENCE WILL SHOW THEY RECEIVED APPROXIMATELY $750,000. 20 WE BELIEVE THE EVIDENCE WILL ALSO SHOW THAT OF 21 THE, QUOTE, 7.1 MILLION THAT COUNSEL HAS INDICATED IN 22 OPENING STATEMENT, WHICH I DON'T BELIEVE THEY CAN SHOW WITH 23 ANY COMPETENT EVIDENCE, THAT WAS NOT WHAT WAS RECOVERED. 24 THAT OF THE MONIES THAT WERE RECOVERED THERE WAS SUBSTANTIAL 25 TAXES AND 50 PERCENT TAXES PAID ON THAT AMOUNT. OF THAT, 26 THERE WERE ATTORNEY’s FEES THAT CAME OUT OF THAT AMOUNT. 27 THERE WAS REIMBURSEMENT OF COSTS THAT CAME OUT OF THAT 28 AMOUNT. THERE WAS REIMBURSEMENT CONSISTENT WITH THE
page 38 1 PROPOSAL TO THOSE PARTIES WHO CONTRIBUTED, AND $750,000 OF 2 WHICH ALSO WENT TO THE LEGION, INCLUDING, I MIGHT ADD, YOUR 3 HONOR, THE EVIDENCE WILL SHOW MR. MARCELLUS HIMSELF RECEIVED 4 SUBSTANTIAL FUNDS. 5 AND THE EVIDENCE WILL ALSO SHOW THAT THEY WILL BE 6 RELYING ON MR. MARCELLUS. FOR A LOT OF THIS TESTIMONY, 7 MR. MARCELLUS WILL BE SHOWN TO BE A FRAUD. MR. MARCELLUS 8 WILL BE SHOWN BY THE EVIDENCE THAT HE IS NOT IMMUNE FROM 9 GERRYMANDERING DOCUMENTS TO SUPPORT HIS POSITIONS, SUCH AS 10 SIGNING VARIOUS UCC-1 FORMS AND ENCUMBERING THE ASSETS OF 11 THE LEGION WHEN HE ENCUMBERED THEM ALREADY WITH ANOTHER UCC 12 FORM. HE WILL BE SUBSTANTIALLY IMPEACHED TO HIS 13 CREDIBILITY. AND I WANT TO ALERT THE COURT TO THOSE 14 CIRCUMSTANCES NOW BECAUSE THAT’s WHAT THE EVIDENCE WILL 15 SHOW. HE’s NOT A RELIABLE WITNESS. 16 THE EVIDENCE WILL SHOW, YOUR HONOR, THAT — I 17 SHOULDN'T SAY “THE EVIDENCE WILL SHOW.” DEFENDANTS BELIEVE 18 THAT THE LEGION WILL NOT BE ABLE TO SHOW ANY EVIDENCE AS TO 19 THE NET AMOUNT WITH RESPECT TO THAT ESTATE, THE NET AMOUNT 20 THAT WAS EVER RECOVERED. THE EVIDENCE WILL SHOW THAT 21 MR. WILLIS CARTO DOESN'T HAVE THAT ASSET. THE EVIDENCE WILL 22 SHOW THAT — THAT THOSE ASSETS BELONG TO SOMEONE OVERSEAS 23 WHO THEY NEITHER SUBPOENAED, NEITHER TAKEN A DEPOSITION OF, 24 NEITHER GOTTEN ANY INFORMATION FROM, THOUGH THEY HAVE 25 TRIED. 26 THERE WILL BE NO COMPETENT EVIDENCE AS TO WHAT IS 27 IN THAT ESTATE, WHAT WAS RECOVERED FROM THAT ESTATE, AND THE 28 DOCUMENTS UPON WHICH THEY RELY WILL BE — ARE HEARSAY, NOT
page 39 1 SUBJECT TO ANY EXCEPTION. IN OTHER WORDS, THEY WILL NOT BE 2 ABLE TO — WE BELIEVE THEY WILL NOT BE ABLE TO LAY A 3 COMPETENT FOUNDATION FOR THE INTRODUCTION OF ANY DOCUMENTS 4 ALLUDED TO IN THE OPENING STATEMENT BY COUNSEL. AGAIN, I 5 REFER THE COURT TO THE PROOF PROBLEMS THEY'RE GOING — THAT 6 WILL BE EXISTENT AND I WANT TO ALERT THE COURT TO THAT NOW. 7 IT IS TRUE, IN TALKING ABOUT VARIOUS MINUTES — I 8 WILL WRAP THIS UP IN 5 MINUTES, YOUR HONOR. I NOTICE YOU 9 ARE LOOKING AT THE CLOCK INTENTLY. 10 THE COURT: NOT INTENTLY. I GLANCED. I DON'T HAVE TO 11 LOOK AT A CLOCK INTENTLY. I CAN LOOK AT IT ONCE. 12 MR. WAIER: I'M SORRY. 13 ON MARCH 5, 1991, THE EVIDENCE IS GOING TO SHOW 14 THAT THE LEGION PASSED 3 RESOLUTIONS. THOSE 3 RESOLUTIONS 15 NOT ONLY CONFIRMED WILLIS' AUTHORITY TO DIRECT THE ASSETS OF 16 MRS. FARREL-EDISON’s ESTATE AT HIS DISCRETION, HE HAD 17 UNFETTERED RIGHT TO SEND THOSE IN ANY DIRECTION HE WANTED 18 TO, WHATEVER WAS THE LEGION WOULD BE ENTITLED TO. BUT THE 19 RESULT OF ANY FUNDS WOULD NOT BE ACCEPTED INTO THE LEGION. 20 THAT’s WHAT THE MINUTES SAY, “DON'T PUT THEM INTO THE 21 LEGION.” IN 1991, THAT’s WHAT THE MINUTES SAY. 22 THE EVIDENCE WILL ALSO SHOW THAT THEY SHOULD BE 23 DIRECTED TO AN INDEPENDENT SETUP CORPORATION. THIS IS THE 24 DIRECTION THAT THE LEGION BOARD GAVE TO MR. CARTO AND TO THE 25 GENTLEMAN NAMED MR. PATRICK FOETISCH, WHO WAS AN OVERSEAS 26 SWISS ATTORNEY. THE EVIDENCE WILL SHOW THAT IS EXACTLY WHAT 27 OCCURRED. THE EVIDENCE WILL SHOW THERE WAS A CORPORATION 28 CALLED VIBET, WHICH WAS SET UP FOR THIS PURPOSE, SO THAT THE
page 40 1 MONIES WOULD NOT COME IN — CONSISTENT TO WHAT 2 MR. MARCELLUS TALKED ABOUT IN THE 1985 LETTER TO JEAN 3 FARREL-EDISON, DO NOT HAVE THE MONIES COME IN TO THIS TO THE 4 LEGION FOR THE BENEFIT OF OUR ENEMIES. THAT’s WHAT THE 5 EVIDENCE WILL SHOW. 6 THE EVIDENCE WILL ALSO SHOW SOME TIME SHORTLY 7 THEREAFTER MR. CARTO INFORMED LEWIS AND LAVONNE FURR AND 8 THEY WILL TESTIFY AND HAVE TESTIFIED AT DEPOSITION THEY WERE 9 INFORMED ABOUT THE CORPORATION. THEY WERE INFORMED THIS HAD 10 TAKEN PLACE AND WHICH — AND THEY APPROVED AND RATIFIED THE 11 ACTIONS TAKEN BY MR. CARTO. THEY WERE — WERE THE LEGION. 12 AND THE EVIDENCE WILL ALSO SHOW, APART FROM WHAT COUNSEL HAS 13 STATED IN THE OPENING STATEMENT, THAT THE FURRS WERE 14 CONSTANTLY INFORMED AS TO WHAT WAS GOING ON WITH THE 15 RECOVERY AND HOW IT WAS BEING DIRECTED. 16 THE EVIDENCE WILL ALSO SHOW, YOUR HONOR, CONTRARY 17 TO WHAT COUNSEL STATED IN THE OPENING STATEMENT, THAT THE 18 LEGION ITSELF BELIEVED THAT THE FURRS WERE THE ONLY 19 DIRECTORS BECAUSE THE EVIDENCE IS GOING TO SHOW IN 1993, 20 PRIOR TO OUSTING MR. CARTO FROM THE LEGION, THAT CERTAIN 21 STAFF MEMBERS, I'M SAYING NOT BOARD MEMBERS, BUT STAFF 22 MEMBERS, TRIED TO DETERMINE WHO THE BOARD MEMBERS WERE. THE 23 EVIDENCE IS GOING TO SHOW THEY MADE A DETERMINATION THERE 24 WERE ONLY 3, LEWIS AND LAVONNE FURR AND TOM KERR. 25 BY THEIR OWN ADMISSION, THE EVIDENCE IS GOING TO 26 SHOW THEY CONSIDERED THE FURRS, DESPITE WHAT MINUTES MAY 27 SAY, AS BEING — I'M TALKING ABOUT THE INSIDERS TODAY, WHAT 28 WE NOW KNOW IS THE LEGION TODAY, CONSIDERED ONLY LEWIS AND
page 41 1 LAVONNE FURR DIRECTORS, SO MUCH SO THAT THEY THREATENED 2 LEWIS AND LAVONNE FURR, THE EVIDENCE WILL SHOW, IF THEY 3 DIDN'T RESIGN, THEY MAY FACE CRIMINAL PROSECUTION AND, THE 4 EVIDENCE WILL SHOW, LITERALLY SCARED THEM FROM THE POSITIONS 5 AND THEY RESIGNED THROUGH THAT THREAT. THAT’s WHAT THE 6 EVIDENCE IS GOING TO SHOW. 7 THE PURPOSE OF THAT SHOWING WHO THE LEGION 8 DIRECTORS WERE, THE LEGION DIRECTORS WERE ALWAYS LEWIS AND 9 LAVONNE FURR. THE MEMBERS FROM 1984 FORWARD WERE WILLIS 10 CARTO AND LAVONNE FURR. THOSE ARE THE INDIVIDUALS WHO THE 11 EVIDENCE WILL SHOW CONTROLLED THE LEGION. THE EVIDENCE IS 12 GOING TO SHOW, YOUR HONOR, THAT NONE OF THIS WOULD HAVE CAME 13 ABOUT HAD IT NOT BEEN FOR THE EFFORTS OF MR. CARTO OR 14 FISCHER, BECAUSE HAD THEY NOT BEEN SUCCESSFUL, WE WOULDN'T 15 BE HERE. MR. FISCHER AND MR. CARTO WERE SUCCESSFUL ON THEIR 16 OWN AT NO SUPPORT FROM THE LEGION OTHER THAN THE USE OF ITS 17 NAME IN VARIOUS COURT DOCUMENTS. 18 THAT’s WHAT THE EVIDENCE IS GOING TO SHOW, AND 19 THAT IS VERY CRITICAL WITH RESPECT TO THE ARGUMENTS THAT I 20 PLACED BEFORE THIS COURT IN OUR BRIEFS. IT’s AN OLD ADAGE 21 THAT IF — IF IT DOESN'T PROVE GOOD, IT’s NOT MINE; BUT IF 22 IT PROVES GOOD, IT’s MINE. THEY SAT BACK, AND THAT’s WHAT 23 THE EVIDENCE IS GOING TO SHOW, AND WAITED AND WAITED AND 24 WAITED UNTIL IT PROVED GOOD AND UNTIL WILLIS CARTO AND 25 HENRY FISCHER, AMONG OTHERS, AND INCLUDING ORGANIZATIONS 26 MR. CARTO CONTROLLED PUT SUBSTANTIAL RESOURCES, TIME, 27 EFFORT, FUNDS TO DO THIS. NOW THEY CLAIM THAT THEY'RE 28 ENTITLED TO IT ALL.
page 42 1 UNFORTUNATELY, THAT ISN'T THE LAW. AND THE 2 EVIDENCE WILL ALSO SHOW, YOUR HONOR, ONE FINAL POINT, THAT 3 HAD LEWIS AND LAVONNE FURR AGREED TO COMMIT RESOURCES OF THE 4 LEGION BACK IN 1985, 1986, 1987, 1988, 1989, THE RESOURCES 5 NECESSARY TO DO THIS, NOT ONLY WOULD THE ATTORNEY GENERAL BE 6 ON THEIR BACK FOR VIOLATING CALIFORNIA NONPROFIT LAW, BUT 7 REST ASSURED, AS I POINT OUT IN THE BRIEF, AS THE SUN WILL 8 RISE TOMORROW, THE SAME INSIDERS WOULD HAVE BEEN SUING LEWIS 9 AND LAVONNE FURR FOR NEGLIGENCE AND MALFEASANCE IN ALLOWING 10 THE LEGION TO PUT UP MONEY IT DIDN'T HAVE. 11 AS A FINAL WORD, YOUR HONOR, WHAT THIS LITIGATION 12 IS ALL ABOUT IS NOT THE JEAN FARREL-EDISON ESTATE. THE 13 EVIDENCE WILL SHOW IT’s MERELY AN ADDITIONAL POWER PLAY BY 14 PARTIES INSIDE TO CONTINUE TO CONTROL THE LEGION AND TRY TO 15 WIN ONE LAWSUIT THAT MAY GIVE THEM A FEATHER UP IN THEIR 16 CONTINUAL CONTROL, ABSENT SOME SORT OF — ABSENT THE 17 LITIGATION IN HOUSTON, WHICH WILL MAKE THAT DETERMINATION. 18 THAT’s ALL THIS LITIGATION IS ABOUT. 19 WE BELIEVE THAT THE EVIDENCE WILL SHOW THAT THE 20 DEFENDANTS ARE ENTITLED TO JUDGMENT ON THIS ISSUE. WE 21 BELIEVE THAT THE EVIDENCE SHOWS THAT THE — THE STATUTE OF 22 LIMITATIONS HAS RUN ON THE CLAIMS OF THE PLAINTIFF. AND IN 23 ANY EVENT — AND THAT THERE IS NO MERIT TO ANY OF THE 24 CLAIMS WAGED IN THE COMPLAINT. 25 THE COURT: ONE QUESTION AND I THINK I WILL TAKE A 26 BREAK. ARE YOU SAYING THAT THE LAW IS THAT THE 27 INCORPORATORS OF A CORPORATION, AFTER THE BOARD OF DIRECTORS 28 HAVE BEEN ELECTED, THEY STILL RETAIN A SUPERIOR POWER TO THE
page 43 1 BOARD OF DIRECTORS? 2 MR. WAIER: MEMBERS DO. AND IN NONPROFIT 3 CORPORATIONS — THIS IS NOT A FOR-PROFIT CORPORATION. 4 WE'RE TALKING ABOUT A NONPROFIT CORPORATION AND WHERE YOU 5 HAVE TIERS OF CONTROL. 6 THE COURT: IS IT YOUR LEGAL THEORY OR — THAT SINCE 7 YOUR CLIENT WAS AN INCORPORATOR OF THE CORPORATION, THAT HE 8 TODAY RETAINS — I DON'T WANT TO HEAR FROM YOU, SIR. YOU 9 HAVE A GOOD ATTORNEY — HE RETAINS POWER SUPERIOR TO THE 10 BOARD OF DIRECTORS TODAY? THAT’s WHAT THE ARGUMENT SEEMS TO 11 BE. 12 MR. WAIER: YES, IT IS. THAT’s AN ISSUE IN HOUSTON AND 13 WILL BE DETERMINED NOVEMBER 8. THAT WHOLE ISSUE IS BEFORE 14 THE COURT, WHICH WAS NOT DECIDED BY JUDGE POLIS, BY THE 15 WAY. 16 THE COURT: TAKE A BREAK HERE. 10 MINUTES. 17 18 (PROCEEDINGS RECESSED.) 19 20 MR. WAIER: A COUPLE OF PRELIMINARY MATTERS BEFORE WE 21 START. ONE, CAN WE HAVE SOME SORT OF — AND SAME THING 22 WILL BE WITH US WITH MARK LANE. CAN WE HAVE SOME SORT OF A 23 PROCEDURE WHEREBY WE DON'T HAVE BOTH COUNSEL OBJECTING TO 24 QUESTIONS? THAT ONE BE DESIGNATED PER WITNESS TO OBJECT? 25 MR. BEUGELMANS: SO STIPULATED. THAT WILL BE 26 RECIPROCAL. 27 MR. WAIER: YES. THE OTHER ISSUE, ALL WITNESSES BE 28 EXCLUDED FROM THE COURTROOM EXCEPT PARTIES AND THAT THE
page 44 1 LEGION DESIGNATED WHO THE REPRESENTATIVE IS FOR PURPOSES OF 2 BEING IN HERE? 3 THE COURT: I USUALLY GRANT THAT MOTION. DO YOU WANT 4 TO DESIGNATE? 5 MR. BEUGELMANS: YES, I THINK WITH THE CAVEAT WE SHOULD 6 NOT BE BOUND TO HAVE THE SAME REPRESENTATIVE HERE EVERY 7 DAY. FOR TODAY, YOUR HONOR, WE WILL DESIGNATE MR. MARK 8 WEBER TO BE THE REPRESENTATIVE. OTHER DAYS, WE SHOULD HAVE 9 DISCRETION TO HAVE OTHER REPRESENTATIVES OF THE CORPORATION. 10 THE COURT: WELL, THAT WOULD BE ALL RIGHT AS LONG AS 11 THAT WITNESS HAS ALREADY TESTIFIED. 12 MR. BEUGELMANS: CORRECT. VERY WELL. 13 THE COURT: ABOUT — ABOUT THE STATEMENT OF DECISION, 14 WHAT I USUALLY DO IS EITHER ANNOUNCE IT ORALLY AND IT 15 BECOMES FINAL IF YOU DON'T OBJECT WITHIN 15 DAYS. I SUSPECT 16 THIS IS A CASE I WILL HAVE TO SIT DOWN AND WRITE IT OUT. 17 AND WHAT I USUALLY DO IS SEND IT OUT AND IT BECOMES FINAL 18 WITHIN 15 DAYS OF MAILING UNLESS OBJECTED TO. 19 MR. WAIER: IF IT’s CONDUCIVE TO THE COURT, UPON 20 COMPLETION OF THE CASE, I KNOW CASES SIMILAR TO THIS WHERE 21 IT’s STRICTLY A BENCH TRIAL, THAT THE COURT SOMETIMES 22 REQUESTED ADDITIONAL BRIEFS AND SUPPLEMENTAL BRIEFING FOR 23 THE LAW OR THE LEGAL ISSUES. 24 THE COURT: I WILL ONLY IF I REALLY THINK I NEED IT. I 25 DON'T DO IT TO AVOID MAKING A DECISION AND TELLING SOMEONE 26 THAT’s MY DECISION. 27 WOULD THE PLAINTIFF LIKE TO CALL A WITNESS. 28 MR. BEUGELMANS: THE PLAINTIFF WILL CALL DEFENDANT
page 45 1 WILLIS CARTO UNDER 776 OF THE EVIDENCE CODE. 2 MR. WAIER: WILLIS CARTO IS NOT HERE RIGHT NOW. 3 THE COURT: WHERE DID HE GO? 4 MR. WAIER: HE HAD TO GO BACK. EVERY THURSDAY IS A 5 DEADLINE FOR THE PAPER BACK EAST. HE HAS TO GO BACK FOR 6 EDITORIALIZING. WE HAVE NOT BEEN NOTICED FOR HIM TO BE 7 HERE. 8 MR. BEUGELMANS: THERE WAS A DEMAND FOR HIM TO BE 9 PRESENT IN TRIAL. 10 THE COURT: HE’s NOT HERE. THERE’s NOT MUCH I CAN DO 11 EXCEPT NOT BE HAPPY. 12 MR. BEUGELMANS: COULD WE HAVE HIM ORDERED BACK AT 13 1:30? WE CAN FILL TIME. 14 MR. WAIER: HE'LL BE BACK AT 1:30. HE’s HERE IN THE 15 LOCAL AREA. HE HAS FAXES COMING OVER. HE HAS TO DO 16 EDITORIAL AND SO FORTH. THAT’s THE REASON WHY. THURSDAY IS 17 A DEADLINE. AND THIS SIDE KNOWS IT TOO. 18 THE COURT: YOU WANT TO PUT ON A WITNESS FROM NOW UNTIL 19 12:00? 20 MR. BEUGELMANS: YES, WITH THE UNDERSTANDING THAT THAT 21 WITNESS COULD BE TAKEN OUT OF ORDER. 22 THE COURT: CERTAINLY. 23 MR. BEUGELMANS: WE CALL THOMAS MARCELLUS. 24 25 THOMAS MARCELLUS, 26 CALLED AS A WITNESS ON BEHALF OF THE PLAINTIFF, HAVING BEEN 27 FIRST DULY SWORN, TESTIFIED AS FOLLOWS: 28 DIRECT EXAMINATION
page 46 1 MR. WAIER: YOUR HONOR, I WOULD LIKE, FOR PURPOSES OF 2 THIS, TO SEE THIS NOTICE MR. CARTO HAD TO BE HERE TODAY. 3 THE COURT: I'M NOT GOING TO GET INVOLVED IN THAT. 4 HE’s GOING TO BE HERE ONE WAY OR THE OTHER. THAT’s NOT MY 5 ISSUE. GO WITH MR. THOMAS MARCELLUS. 6 THE CLERK: STATE YOUR FULL NAME AND SPELL YOUR LAST 7 FOR THE RECORD. 8 THE WITNESS: THOMAS JAMES MARCELLUS. 9 M-A-R-C-E-L-L-U-S. 10 11 BY MR. MUSSELMAN: 12 Q GOOD MORNING, MR. MARCELLUS. 13 A GOOD MORNING. 14 Q MY NAME IS THOMAS MUSSELMAN. 15 A YES. 16 Q YOU ARE FAMILIAR WITH THE LEGION FOR THE SURVIVAL 17 OF FREEDOM, INC.? 18 A YES. 19 Q WHAT IS IT? 20 MR. WAIER: OBJECTION. BEST EVIDENCE. LACKS 21 FOUNDATION. 22 THE COURT: OVERRULED. 23 THE WITNESS: LEGION FOR THE SURVIVAL OF FREEDOM IS A 24 NONPROFIT CORPORATION THAT WAS FORMED IN THE 1950’s AND, 25 SINCE 19 — EARLY 1960, HAS OPERATED SOLELY IN CALIFORNIA. 26 AND IT’s ESSENTIALLY A PUBLISHER OF BOOKS, NEWSLETTERS AND 27 OTHER MATERIAL AND SPECIALIZES IN WHAT IS CALLED HISTORICAL 28 REVISIONISM, CONSTITUTIONALISM AND ISSUES DEALING WITH THE
page 47 1 FOUNDATION OF THIS COUNTRY. 2 3 BY MR. MUSSELMAN: 4 Q ARE YOU WORKING FOR THEM NOW? 5 A I AM NOT. 6 Q HAVE YOU IN THE PAST? 7 A I DID, YES. 8 Q AND WHEN DID YOU FIRST BECOME AFFILIATED WITH 9 THEM? 10 A IN 1978. 11 Q WHAT WAS THAT? 12 A I BEGAN AS ASSISTANT DIRECTOR IN 1978. AND THEN 13 IN 1981, I BECAME — I BECAME DIRECTOR OF THE ENTITIES, THE 14 TRADE ENTITIES, WHICH ARE I.H.R., INSTITUTE FOR HISTORICAL 15 REVIEW, AND THE NOONTIME PRESS. 16 Q HAVE YOU HAD OTHER JOBS WHILE YOU WERE THERE? 17 A I WORKED STRICTLY FOR THE LEGION FROM 1978 UNTIL 18 19 — LATE 1985. I LEFT THE CORPORATION FOR 18 MONTHS TO 19 PURSUE OTHER INTERESTS, AND I RETURNED TO THE CORPORATION IN 20 JUNE OF 1987, RESUMED MY POSITION AS DIRECTOR AND CONTINUED 21 IN THAT POSITION UNTIL 1994. 22 Q APPROXIMATELY WHAT — APPROXIMATELY WHEN IN 1994? 23 A I BELIEVE IT WAS FEBRUARY WHEN I RESIGNED. 24 Q AND DURING YOUR STINT AT THE LEGION, WERE YOU AN 25 OFFICER? 26 A YES, I WAS CHIEF OPERATING OFFICER. 27 Q WERE YOU EVER ALSO A DIRECTOR? 28 MR. WAIER: OBJECTION. LEADING.
page 48 1 THE COURT: OVERRULED. 2 THE WITNESS: YES, I WAS A DIRECTOR BEGINNING IN, I 3 BELIEVE, 1993, LATE 1993. AND I WAS ALSO PRESIDENT OF THE 4 CORPORATION AT ABOUT THAT SAME TIME. 5 6 BY MR. MUSSELMAN: 7 Q ARE YOU FAMILIAR WITH AN ENTITY, FOUNDATION TO 8 DEFEND THE FIRST AMENDMENT, INC.? 9 A YES. 10 Q AND WHAT IS THAT? 11 MR. WAIER: OBJECTION. LACKS FOUNDATION. 12 THE COURT: OVERRULED. 13 THE WITNESS: FOUNDATION TO DEFEND THE FIRST AMENDMENT 14 IS AN ENTITY THAT OPERATES OUT OF THE LIBERTY LOBBY BUILDING 15 IN WASHINGTON, D.C., HAS — TO MY KNOWLEDGE AND EXPERIENCE, 16 HAS OPERATED OUT OF THAT BUILDING. IT’s AN ENTITY 17 CONTROLLED BY WILLIS CARTO. 18 MR. WAIER: MOVE TO STRIKE. HEARSAY. LACKS 19 FOUNDATION. 20 THE COURT: SUSTAINED, CONTROLLED BY WILLIS CARTO. 21 THE WITNESS: OKAY. 22 THE COURT: NO QUESTION IS PENDING. HE'LL ASK ANOTHER 23 QUESTION. 24 25 BY MR. MUSSELMAN: 26 Q DID YOU HAVE ANY DEALINGS WITH THAT ENTITY WHILE 27 AT THE LEGION? 28 A YES, I DID.
page 49 1 Q AND WHAT TYPE OF DEALINGS? 2 A THE DEALINGS I HAD WITH THE F.D.F.A. WERE DEALINGS 3 THAT WERE — THAT WERE PROMPTED BY DIRECTION FROM WILLIS 4 CARTO AS TO WHAT DEALINGS TO HAVE WITH THE F.D.F.A. 5 MR. WAIER: OBJECTION. MOVE TO STRIKE AS BEING 6 NONRESPONSIVE. HEARSAY. LACKS FOUNDATION. COMPETENT. 7 THE COURT: OVERRULED. 8 9 BY MR. MUSSELMAN: 10 Q WHAT TYPE OF DIRECTION, IN REFERENCE TO FOUNDATION 11 TO DEFEND THE FIRST AMENDMENT, ARE YOU TALKING ABOUT? 12 MR. WAIER: OBJECTION. HEARSAY. 13 THE COURT: OVERRULED. 14 THE WITNESS: FOR EXAMPLE, APPROXIMATELY 1984, LATE 15 1984, '85, CARTO ASKED ME — I'M SORRY. EARLIER THAN 1984, 16 CARTO ASKED ME TO HAVE -- 17 MR. WAIER: OBJECTION. MOVE TO STRIKE. CALLS FOR 18 HEARSAY. 19 MR. MUSSELMAN: YOUR HONOR, MAY I HAVE AN INSTRUCTION 20 THAT THE ATTORNEY NOT INTERRUPT THE WITNESS, LET HIM 21 COMPLETE THE RESPONSE BEFORE THE OBJECTION IS MADE. 22 THE COURT: HE SHOULD PROBABLY INTERRUPT THE WITNESS 23 BEFORE THE WITNESS TESTIFIES; OTHERWISE, I HAVE TO FORGET I 24 HEARD THE ANSWER. OVERRULE THE OBJECTION. 25 THE WITNESS: AS I WAS SAYING, AN EXAMPLE WAS IN 1984, 26 MR. CARTO DIRECTED ME TO HAVE CERTAIN CONTRIBUTORS TO THE 27 LEGION DIRECT THEIR CONTRIBUTIONS TO THE F.D.F.A. INSTEAD OF 28 THE LEGION.
page 50 1 BY MR. MUSSELMAN: 2 Q DID HE SAY WHY? 3 MR. WAIER: OBJECTION. HEARSAY. 4 THE COURT: OVERRULED. 5 THE WITNESS: YES. HE SAID THAT BECAUSE WE WERE -- 6 THE LEGION WAS INVOLVED IN LITIGATION AT THAT TIME, AND IN 7 THE CASE OF AN ADVERSE JUDGMENT, MR. CARTO DID NOT WANT THE 8 MONEY IN THE LEGION’s ACCOUNTS. 9 10 BY MR. MUSSELMAN: 11 Q ARE YOU FAMILIAR WITH LIBERTY LOBBY, INC.? 12 A YES. 13 Q AND DID YOU HAVE DEALINGS WITH THAT ENTITY WHILE 14 YOU WERE AT THE LEGION? 15 A YES. 16 MR. WAIER: OBJECTION. VAGUE AND AMBIGUOUS TO THE TERM 17 “DEALINGS." 18 THE COURT: OVERRULED. 19 20 BY MR. MUSSELMAN: 21 Q WHAT TYPE OF DEALINGS DID YOU HAVE WITH THEM? 22 MR. WAIER: OBJECTION. CALLS FOR A NARRATIVE. 23 THE COURT: OVERRULED. 24 THE WITNESS: THERE WERE OCCASIONS WHEN LIBERTY LOBBY 25 WOULD BUY BOOKS FROM THE LEGION, AND THERE WERE OCCASIONS 26 WHERE THE LEGION WOULD PURCHASE BOOKS FROM LIBERTY LOBBY. 27 THERE WERE OCCASIONS WHEN SOMEONE WORKING WITH ME AT THE 28 LEGION WROTE AN ARTICLE THAT WAS PUBLISHED IN LIBERTY
page 51 1 LOBBY’s PUBLICATION, THE SPOTLIGHT. THERE WERE FAXES AND 2 OTHER DOCUMENTS THAT CAME — THAT TYPICALLY AND REGULARLY 3 CAME THROUGH THE LEGION EN ROUTE TO MR. CARTO. OFTENTIMES, 4 I HAD TO — IF FAX TRANSMISSION WAS BAD, I HAD TO CALL 5 LIBERTY LOBBY AND SAY YOU HAVE TO REFAX THIS BECAUSE IT WAS 6 GARBLED IN THE TRANSMISSION. 7 8 BY MR. MUSSELMAN: 9 Q DID MR. CARTO TELL YOU WHAT HIS CONNECTION WITH 10 LIBERTY LOBBY WAS? 11 A YES. 12 Q WHAT WAS THAT? 13 A HE SAID THAT HE WAS TREASURER AND THAT HE WAS 14 FOUNDER ALSO. 15 Q DID YOU EVER HAVE COMMUNICATION WITH LIBERTY LOBBY 16 OTHER THAN THROUGH MR. CARTO? 17 A I DID, YES. 18 Q DID YOU EVER HAVE ANY DEALINGS WITH FOUNDATION TO 19 DEFEND THE FIRST AMENDMENT OTHER THAN THROUGH MR. CARTO? 20 A NO. 21 Q WHILE YOU WERE IN THE LEGION, DID YOU EVER LEARN 22 WHETHER THE FOUNDATION TO DEFEND THE FIRST AMENDMENT HAD ANY 23 EMPLOYEES? 24 MR. WAIER: OBJECTION. CALLS FOR HEARSAY. LACKS 25 FOUNDATION. 26 THE COURT: I'M GOING TO SUSTAIN THE OBJECTION. IF YOU 27 CAN SET A FOUNDATION HE HEARD FROM MR. CARTO, I'LL OVERRULE 28 IT.
page 52 1 BY MR. MUSSELMAN: 2 Q HAVE YOU EVER HEARD FROM MR. CARTO WHETHER 3 FOUNDATION TO DEFEND THE FIRST AMENDMENT HAD ANY EMPLOYEES? 4 A NO. 5 Q HAVE YOU EVER HAD ANY DEALINGS WITH ANYONE OTHER 6 THAN MR. CARTO WHEN YOU WERE DEALING WITH THE FOUNDATION TO 7 DEFEND THE FIRST AMENDMENT? 8 A I BELIEVE I ANSWERED THAT. NO. 9 Q HAVE YOU EVER MET MR. Carto’s WIFE ELISABETH? 10 A YES. 11 Q AND DO YOU KNOW WHERE THE CARTOS RESIDE? 12 A YES. 13 Q WHERE IS THAT? 14 A IT’s EAST OF HERE. 15 MR. WAIER: OBJECTION. RELEVANCY. 16 THE COURT: YES. WHAT IS THE RELEVANCE? 17 MR. MUSSELMAN: THE JURISDICTION, I'M DECIDING WHAT IS 18 THE BASIC FOUNDATION. 19 THE COURT: SUSTAIN THE OBJECTION. IT’s NOT AN ISSUE. 20 21 BY MR. MUSSELMAN: 22 Q ARE YOU FAMILIAR WITH AN ENTITY THE VIBET, 23 V-I-B-E-T? 24 A YES. 25 Q IS YOUR FAMILIARITY BASED UPON YOUR STINT AT THE 26 LEGION? 27 A YES. 28 Q DID YOU EVER HAVE ANY CONVERSATIONS WITH MR. CARTO
page 53 1 ABOUT VIBET WHILE AT THE LEGION? 2 A YES. 3 Q AND CAN YOU RECALL ANY OF THOSE CONVERSATIONS? 4 MR. WAIER: OBJECTION. HEARSAY. 5 THE COURT: OVERRULED. 6 THE WITNESS: YES. THE DISCUSSIONS WERE THAT -- 7 MR. WAIER: OBJECTION, MOVE TO STRIKE AS NONRESPONSIVE 8 EVERYTHING AFTER “YES." 9 THE COURT: OVERRULED. 10 THE WITNESS: THE DISCUSSIONS INVOLVED Carto’s 11 COMMUNICATING TO — MR. CARTO COMMUNICATING TO ME THAT 12 VIBET OR — VIBET WAS AN ENTITY SET UP TO HOLD THE LEGION'S 13 ASSETS RESULTING FROM THE SETTLEMENT OF THE FARREL ESTATE 14 BUSINESS IN EUROPE. 15 16 BY MR. MUSSELMAN: 17 Q AND WHEN YOU SAY “FARREL ESTATE BUSINESS,” WHAT DO 18 YOU MEAN? 19 A I MEAN, THE PROCEEDS FROM THE SETTLEMENT OF THOSE 20 CASES WHERE THEY TOOK PLACE IN EUROPE AND ENGLAND AND HERE. 21 Q DID YOU EVER HAVE DISCUSSIONS WITH MR. CARTO ABOUT 22 WHAT THE LITIGATION ENTAILED? 23 A NOT IN DETAIL. 24 Q DID HE TELL YOU WHO THE PLAINTIFF IN LITIGATION 25 WAS? 26 A YES. 27 Q WHAT DID HE SAY? 28 A LEGION.
page 54 1 MR. WAIER: OBJECTION. CALLS FOR DOUBLE HEARSAY. 2 THE COURT: OVERRULED. 3 MR. BEUGELMANS: IS THERE AN ANSWER? 4 THE WITNESS: THE LEGION. 5 6 BY MR. MUSSELMAN: 7 Q ARE YOU FAMILIAR WITH SOMEONE NAMED PATRICK 8 FOETISCH, F-O-E-T-I-S-C-H? 9 A I'M FAMILIAR WITH THE NAME. 10 Q HAVE YOU HAD DISCUSSIONS WITH MR. CARTO ABOUT 11 MR. FOETISCH? 12 A I HAVE NOT. 13 Q ARE YOU FAMILIAR WITH AN ENTITY, INTERNATIONAL 14 LEGION FOR THE SURVIVAL OF FREEDOM? 15 A IN NAME ONLY. 16 Q HAVE YOU EVER HAD ANY COMMUNICATION WITH MR. CARTO 17 ABOUT THAT ENTITY? 18 A NO. 19 Q HAVE YOU HAD ANY COMMUNICATION WITH MRS. CARTO 20 ABOUT THAT ENTITY? 21 A NO. 22 MR. MUSSELMAN: IF I COULD SHOW THE WITNESS SOME 23 EXHIBITS. 24 THE COURT: YES, ANYTIME. 25 MR. MUSSELMAN: I HAVE THE ORIGINALS. 26 27 BY MR. MUSSELMAN: 28 Q LOOK AT EXHIBIT 1. TELL ME WHAT YOU RECOGNIZE IT
page 55 1 TO BE. 2 A I DO. 3 Q AND WHEN DID YOU SEE IT? 4 A I BELIEVE I SAW THIS FIRST IN 1993. 5 Q UNDER WHAT CIRCUMSTANCES WAS THAT? 6 A IT WAS DURING THE COURSE OF AN INVESTIGATION BY 7 THE STAFF AT THE LEGION TO DETERMINE MR. Carto’s LEGAL 8 STANDING WITH THE CORPORATION. 9 Q WHERE DID YOU FIND THE DOCUMENT? 10 A THE DOCUMENT, I RECALL, WAS IN THE -- 11 MR. WAIER: OBJECTION. LACKS FOUNDATION. 12 THE COURT: OVERRULED. 13 THE WITNESS: IT WAS IN THE LEGION’s FILES. 14 15 BY MR. MUSSELMAN: 16 Q DID YOU EVER HAVE ANY DISCUSSIONS WITH MR. CARTO 17 ABOUT EXHIBIT 1? 18 A NO. THIS DOCUMENT WAS DISCOVERED AFTER HE HAD -- 19 MR. WAIER: I MOVE TO STRIKE AFTER THE WORD “NO." 20 THE COURT: SUSTAINED. 21 22 BY MR. MUSSELMAN: 23 Q OTHER THAN EXHIBIT 1, HAVE YOU SEEN ANY OTHER 24 DOCUMENT THAT PURPORTS TO BE ARTICLES OF INCORPORATION OF 25 THE LEGION? 26 A NO. 27 Q OTHER THAN EXHIBIT 1, HAVE YOU SEEN ANY DOCUMENT 28 THAT PURPORTS TO BE A CHARTER OF THE LEGION?
page 56 1 A NO. 2 Q BEFORE YOU LEFT THE LEGION, DID YOU EVER HAVE 3 DISCUSSIONS WITH MR. CARTO WHERE MR. CARTO TOLD YOU HE WAS 4 AN INCORPORATOR OF THE LEGION? 5 MR. WAIER: OBJECTION. LEADING QUESTION. 6 THE COURT: OVERRULED. 7 THE WITNESS: NO. 8 9 BY MR. MUSSELMAN: 10 Q DID YOU EVER HAVE ANY DISCUSSIONS, BEFORE YOU 11 LEFT, WITH HIM WHERE HE CLAIMED HE WAS A MEMBER OF THE 12 LEGION? 13 MR. WAIER: OBJECTION. LEADING. 14 THE COURT: OVERRULED. 15 THE WITNESS: NO. 16 17 BY MR. MUSSELMAN: 18 Q WHEN YOU LEFT, DID YOU EVER HAVE ANY DISCUSSION 19 WITH HIM WHERE HE CLAIMED THAT LAVONNE OR LEWIS FURR WERE 20 MEMBERS OF THE LEGION? 21 MR. WAIER: OBJECTION. LEADING. 22 THE COURT: OVERRULED. 23 THE WITNESS: NO 24 25 BY MR. MUSSELMAN: 26 Q OR THAT THEY WERE INCORPORATORS OF THE LEGION? 27 MR. WAIER: OBJECTION. LEADING. 28 THE COURT: OVERRULED.
page 57 1 THE WITNESS: NO. 2 3 BY MR. MUSSELMAN: 4 Q HAVE YOU MET LAVONNE FURR? 5 A YES. 6 Q HAVE YOU MET LEWIS FURR? 7 A YES. 8 Q AND ARE THEY MARRIED? 9 MR. WAIER: OBJECTION. LACKS FOUNDATION. 10 11 BY MR. MUSSELMAN: 12 Q DID THEY TELL YOU THEY WERE MARRIED? 13 THE COURT: OVERRULED. 14 THE WITNESS: THEY DID NOT TELL ME THEY WERE MARRIED. 15 16 BY MR. MUSSELMAN: 17 Q HAS MR. CARTO TOLD YOU THEY WERE MARRIED? 18 A YES. 19 Q WHEN DID YOU FIRST HAVE DEALINGS WITH THEM? 20 A I FIRST MET LAVONNE FURR IN 1978 WHEN I CAME TO 21 WORK FOR THE CORPORATION. 22 Q AND DID YOU HAVE ANY DISCUSSIONS WITH HER THEN 23 ABOUT HER ROLE AT THE LEGION? 24 A NO. 25 Q DID YOU HAVE ANY DISCUSSIONS WITH MR. CARTO ABOUT 26 HER ROLE AT THE LEGION? 27 A YES. 28 Q WHAT DID HE TELL YOU?
page 58 1 MR. WAIER: OBJECTION. HEARSAY. 2 THE COURT: OVERRULED. 3 THE WITNESS: HE INDICATED THAT LAVONNE WAS AND LEWIS 4 FURR WERE DIRECTORS OF THE CORPORATION. 5 6 BY MR. MUSSELMAN: 7 Q BETWEEN THE TIME HE TOLD YOU THAT AND THE TIME YOU 8 LEFT THE LEGION, DID HE EVER TELL YOU THAT THEY HAD SOME 9 ROLE OTHER THAN AS DIRECTOR? 10 MR. WAIER: OBJECTION. VAGUE AND AMBIGUOUS AS TO THE 11 TERM “HE." 12 THE COURT: SUSTAIN THE OBJECTION UNLESS YOU UNDERSTAND 13 THE QUESTION. 14 THE WITNESS: I DO. AND I BELIEVE THE ANSWER IS THAT 15 HE DID ALSO TELL ME THEY WERE OFFICERS OF THE CORPORATION. 16 17 BY MR. MUSSELMAN: 18 Q COULD YOU LOOK AT EXHIBIT 2, PLEASE. 19 THE COURT: IT’s GOOD IDEA TO IDENTIFY THE EXHIBITS. 20 MR. MUSSELMAN: EXHIBIT 2 IS AN UNDATED DOCUMENT 21 ENTITLED “BYLAWS,” COLON, “LEGION FOR THE SURVIVAL OF 22 FREEDOM.” EXHIBIT 1 WAS A DOCUMENT THAT SAYS “CHARTER OF 23 THE LEGION FOR THE SURVIVAL OF FREEDOM." 24 25 BY MR. MUSSELMAN: 26 Q HAVE YOU EVER SEEN EXHIBIT 2 BEFORE? 27 A YES. 28 Q WHEN WAS THAT?
page 59 1 A I BELIEVE 1989. 2 Q WHERE DID YOU SEE IT? 3 A MR. CARTO HANDED IT TO ME. 4 Q WHERE PHYSICALLY WERE YOU? 5 A AT THE OFFICES OF THE LEGION AT THAT TIME. 6 Q DID YOU EVER SEE IT THEREAFTER? 7 A YES. 8 Q WHERE ELSE HAVE YOU SEEN IT? 9 A WE KEPT IT ON FILE AT THE OFFICE. AND I HAD THE 10 OPPORTUNITY TO SEE IT AGAIN IN 1993. 11 Q MR. CARTO EVER HAVE ANY DISCUSSIONS WITH YOU ABOUT 12 IT? 13 A YES. 14 Q WHAT DID HE TELL YOU ABOUT IT? 15 A SUBSTANCE OF THE DISCUSSION WAS THIS WAS TO BE 16 GIVEN TO THE ATTORNEY WHO IS REPRESENTING THE LEGION IN A 17 CASE THAT THE LEGION WAS, AT THAT TIME, INVOLVED IN 18 LITIGATION WITH. 19 Q DID HE IDENTIFY WHAT IT WAS? 20 A HE SAID IT — THEY WERE THE BYLAWS OF THE 21 CORPORATION. 22 Q DID HE TELL YOU WHO DRAFTED THEM? 23 A NO. 24 MR. MUSSELMAN: I MOVE FOR THE ADMISSION OF EXHIBITS 1 25 AND 2, UNLESS YOU WANT TO WAIT UNTIL LATER. 26 THE COURT: I PREFER TO DO THAT AND WAIT UNTIL YOU ARE 27 THROUGH WITH YOUR CASE. THEN WE'LL DO IT AT ONE TIME. THE 28 SAME WAY WITH DEFENSE.
page 60 1 BY MR. MUSSELMAN: 2 Q WHILE YOU WERE AT THE LEGION, DID YOU EVER REVIEW 3 THE RECORDS OF THE LEGION? 4 A YES. 5 Q DID YOU EVER REVIEW THE RECORDS TO DETERMINE WHAT 6 MEETINGS HAD OCCURRED AT THE LEGION, WHAT BOARD OF DIRECTORS 7 MEETING HAD OCCURRED? 8 A YES. 9 Q DID YOU REVIEW THE RECORDS TO DETERMINE WHAT 10 OFFICER MEETINGS HAD OCCURRED? 11 A YES. 12 Q IN YOUR REVIEW, DID YOU EVER COME ACROSS ANY 13 DOCUMENT THAT PURPORTED TO BE A MEETING OF MEMBERS OF THE 14 LEGION? 15 MR. WAIER: OBJECTION. CALLS FOR HEARSAY. 16 THE COURT: OVERRULED. 17 THE WITNESS: I NEVER SAW SUCH A DOCUMENT. 18 19 BY MR. MUSSELMAN: 20 Q WHILE YOU WERE THERE, DID YOU COME ACROSS A 21 DOCUMENT THAT PURPORTED TO BE A MEETING OF THE INCORPORATORS 22 OF THE LEGION? 23 A I DID NOT. 24 Q DID YOU EVER COME ACROSS A DOCUMENT, WHILE YOU 25 WERE THERE, THAT PURPORTED TO ELECT MR. CARTO OR MRS. AND 26 MRS. FURR AS SUBSTITUTE INCORPORATORS OF THE LEGION? 27 MR. WAIER: I AM GOING TO OBJECT NOT ONLY HEARSAY AND 28 COMPETENCY GROUND, LACKS FOUNDATION, BUT RELEVANCE WITH
page 61 1 RESPECT TO THIS WITNESS. 2 THE COURT: OVERRULED. 3 THE WITNESS: I NEVER SAW SUCH A DOCUMENT. 4 5 BY MR. MUSSELMAN: 6 Q HAVE YOU EVER MET SOMEONE NAMED BRUCE HOLMAN? 7 A NO. 8 Q HAVE YOU HAD DISCUSSIONS WITH HIM? 9 A NO. 10 Q IF YOU CAN TAKE A LOOK, PLEASE, AT EXHIBIT 5. IT 11 STATES “MINUTES,” COMMA, “MARCH 25,” COMMA, “1966 LEGION FOR 12 THE SURVIVAL OF THE FREEDOM, INC." 13 A I HAVE IT. 14 Q DO YOU RECALL SEEING THIS BEFORE? 15 A MAY I TAKE A MOMENT TO LOOK IT OVER? 16 Q SURE. 17 A YES, I HAVE SEEN THIS. 18 Q WHEN WAS THAT? 19 A 1993. 20 Q WHERE WERE YOU? 21 A AT THE LEGION OFFICES. 22 Q WHAT WERE THE CIRCUMSTANCES OF YOUR SEEING IT? 23 A IT WAS IN CONJUNCTION WITH THE INVESTIGATION TO 24 DETERMINE MR. Carto’s STANDING WITH THE CORPORATION. 25 Q WAS THE DOCUMENT IN THE LEGION OFFICES? 26 A IT WAS NOT. 27 Q AND WHERE WAS IT OBTAINED FROM? 28 A I DON'T RECALL.
page 62 1 Q IF YOU COULD LOOK AT EXHIBIT 3, PLEASE, WHICH IS 2 ENTITLED “BYLAWS, LEGION FOR THE SURVIVAL OF THE FREEDOM, 3 INC." 4 A YES. 5 Q HAVE YOU SEEN THAT BEFORE? 6 A YES. 7 Q WHEN WAS THAT? 8 A 1993. 9 Q WHERE WERE YOU? 10 A IN THE LEGION OFFICES. 11 Q WAS THIS DOCUMENT IN THE LEGION FILES? 12 A IT WAS NOT. 13 Q DO YOU KNOW WHERE IT WAS OBTAINED FROM? 14 A I DON'T RECALL. 15 Q HAVE YOU EVER HAD ANY DISCUSSION WITH MR. CARTO 16 ABOUT EXHIBIT 3? 17 A NO. 18 Q DID YOU EVER HAVE ANY DISCUSSION WITH MR. CARTO 19 ABOUT EXHIBIT 5? 20 MR. WAIER: 5? 21 THE COURT: YES. 22 THE WITNESS: I THINK I ANSWERED THAT I DID. I DID 23 HAVE A BRIEF DISCUSSION WITH HIM ON EXHIBIT 5 WHEN HE HANDED 24 ME THE DOCUMENT THAT WAS TO BE GIVEN TO THE ATTORNEY IN 25 CONJUNCTION WITH LITIGATION. 26 MR. WAIER: I'M SORRY, CAN I HAVE THAT READ BACK, 27 PLEASE. 28 (THE RECORD WAS READ.)
page 63 1 THE WITNESS: THAT WAS MY MISTAKE. I WAS REFERRING TO 2 EXHIBIT 2. THAT’s THE DOCUMENT THAT MR. CARTO GAVE ME. AND 3 IT WAS EXHIBIT 2, NOT EXHIBIT — NOT THIS OTHER EXHIBIT 4 THAT I JUST STATED HE HAD GIVEN TO ME. THAT WAS NOT THE 5 CASE WITH THAT DOCUMENT. I GOT THEM CONFUSED. 6 7 BY MR. MUSSELMAN: 8 Q DID YOU HAVE A DISCUSSION WITH MR. CARTO ABOUT 9 EXHIBIT 5? 10 A NO. 11 Q IF YOU COULD LOOK AT EXHIBIT 4, PLEASE, WHICH 12 STATES “MERGER OF THE LEGION FOR THE SURVIVAL OF FREEDOM, 13 INC. WITH A COMMITTEE FOR RELIGIOUS DEVELOPMENT, INC." 14 A YES. 15 Q HAVE YOU SEEN THAT BEFORE? 16 A YES. 17 Q WHEN WAS THAT? 18 A IN 1993. 19 Q WHERE WERE YOU? 20 A AT THE LEGION OFFICES. 21 Q WAS THE DOCUMENT IN LEGION’s FILES? 22 A AS I RECALL, IT WAS NOT. IT HAD BEEN RECENTLY 23 OBTAINED. 24 Q DO YOU KNOW WHERE FROM? 25 A NO. 26 Q DID YOU EVER HAVE ANY DISCUSSIONS WITH MR. CARTO 27 ABOUT EXHIBIT 4? 28 A NO.
page 64 1 Q ARE YOU FAMILIAR WITH THE WOMAN NAMED JEAN FARREL, 2 J-E-A-N F-A-R-R-E-L? 3 A YES. 4 Q WHEN DID YOU FIRST BECOME FAMILIAR WITH HER 5 EXISTENCE? 6 A I MET HER — IT’s TOUGH TO RECALL THE EXACT TIME 7 FRAME, BUT I BELIEVE IN EARLY 1984 WHEN SHE VISITED THIS 8 COUNTRY. 9 Q HAD YOU TALKED TO HER ON THE PHONE BEFORE YOU MET 10 HER IN PERSON? 11 A NO. 12 Q BEFORE SHE — BEFORE YOU MET HER IN PERSON, HAD 13 YOU EVER DISCUSSED ANYTHING ABOUT HER WITH MR. CARTO? 14 A YES. 15 Q WHAT DID YOU DISCUSS ABOUT HER WITH MR. CARTO? 16 A I TOLD MR. CARTO THAT SHE HAD CONTACTED THE LEGION 17 AND THAT SHE HAD MADE A CONTRIBUTION AND PROMISED TO MAKE 18 CONTINUING CONTRIBUTIONS AND THAT SHE WAS PLANNING TO VISIT 19 THE UNITED STATES. 20 MR. WAIER: I'M GOING TO OBJECT. THAT CALLS FOR 21 HEARSAY, SHE STATED AND JEAN FARREL STATED. 22 THE COURT: OVERRULED. 23 24 BY MR. MUSSELMAN: 25 Q WHAT DID HE SAY TO YOU ABOUT HER? 26 A AT THAT POINT, IT WAS — HE SUGGESTED I JUST 27 SIMPLY KEEP CORRESPONDING WITH HER AND URGE HER TO MAKE 28 FURTHER CONTRIBUTIONS FOR THE CORPORATION.
page 65 1 Q WERE YOU WORKING FOR FOUNDATION TO DEFEND THE 2 FIRST AMENDMENT AT THE TIME? 3 A I WAS NOT. 4 Q WERE YOU WORKING FOR LIBERTY LOBBY? 5 A I WAS NOT. 6 Q WOULD YOU PLEASE LOOK AT EXHIBIT 7, WHICH IS A 7 DOCUMENT THAT HAS AN “X” DRAWN THROUGH IT AND THE LETTERS 8 B-I-F-F-E ON THE LEFT. 9 A YES. 10 Q WILL YOU LOOK AT THAT AND LET ME KNOW IF YOU 11 RECOGNIZE IT. 12 A I BELIEVE THIS IS THE FIRST TIME I HAVE SEEN THIS. 13 Q WILL YOU LOOK AT EXHIBIT 8. STATES AT THE TOP 14 “JEAN FARREL,” COMMA, “E,” PERIOD, AND HAS AN ADDRESS IN 15 SWITZERLAND. 16 A LET ME LOOK AT IT A MOMENT. ALL RIGHT. 17 Q HAVE YOU SEEN THAT BEFORE? 18 A I DON'T BELIEVE SO. 19 Q AT THE TIME MRS. FARREL VISITED AND YOU MET HER IN 20 1984, HAD YOU EVER HAD DISCUSSIONS WITH MR. CARTO ABOUT 21 WHETHER HE HAD MET HER? 22 A IF I DID, I DON'T RECALL THEM. 23 Q WOULD YOU LOOK AT EXHIBIT 6, PLEASE. STATES 24 “MINUTES MARCH 5, 1985." 25 A YES. 26 Q HAVE YOU SEEN THAT BEFORE? 27 A YES. 28 Q WHEN WAS THAT?
page 66 1 A I BELIEVE I SAW THIS ALSO IN 1993. 2 Q WHERE WERE YOU? 3 A LEGION OFFICES. 4 Q WAS IT IN THE LEGION’s FILES? 5 A I CAN'T SAY IT WAS. 6 Q MEANING ONE WAY OR THE OTHER? 7 A IT CAME TO THE LEGION IN SOME WAY. I DO NOT 8 RECALL IT BEING IN A LEGION FILE, BUT I RECALL SEEING IT IN 9 1993. AND WHETHER IT CAME FROM THE LEGION FILE OR NOT, I 10 CAN'T SAY. 11 Q HAVE YOU HAD ANY DISCUSSION WITH MR. CARTO ABOUT 12 EXHIBIT 6? 13 A NOT ABOUT THE EXHIBIT ITSELF, NO. 14 Q THERE’s A REFERENCE 4 PARAGRAPHS DOWN TO SOMEONE 15 NAMED MEL MERMELSTEIN. DO YOU KNOW THAT PERSON? 16 A YES. 17 Q HOW DO YOU KNOW THAT PERSON? 18 A HE WAS A PLAINTIFF IN 2 ACTIONS AGAINST THE 19 LEGION, ONE IN, I BELIEVE, 1982, AND AGAIN, I BELIEVE, IN 20 1987. 21 Q YOU SAY A PLAINTIFF IN LITIGATION, AGAINST CERTAIN 22 DEFENDANTS OR -- 23 A WELL, THE LEGION WAS AMONG THE DEFENDANTS, YES. 24 Q IN THE FIFTH PARAGRAPH DOWN, THERE’s A SENTENCE 25 THAT SAYS, “AMONG THE SUPPORTERS IS MISS JEAN FARREL." 26 MR. WAIER: OBJECTION, YOUR HONOR. READING FROM A 27 DOCUMENT THAT HAS NOT BEEN RECEIVED INTO EVIDENCE. 28 THE COURT: AND THE BASIS OF THE OBJECTION?
page 67 1 MR. WAIER: HEARSAY. THERE’s NO FOUNDATION. THERE'S 2 NO FOUNDATION FOR IT. 3 MR. MUSSELMAN: THE SENTENCE IS IN EVIDENCE. 4 THE COURT: SUSTAIN THE OBJECTION RIGHT NOW. 5 6 BY MR. MUSSELMAN: 7 Q DID YOU EVER HAVE ANY CONVERSATION WITH MR. CARTO 8 WHERE HE TOLD YOU THAT MISS JEAN FARREL WAS A SUPPORTER OF 9 THE LEGION? 10 A I TOLD HIM MISS JEAN FARREL WAS A SUPPORTER OF THE 11 LEGION. 12 Q DID YOU EVER HAVE DISCUSSIONS WITH HIM THEREAFTER 13 WHERE HE AGREED WITH THAT STATEMENT? 14 A YES. 15 Q WAS HE AT THE OFFICES — EXCUSE ME. WHEN YOU MET 16 HER, WHERE PHYSICALLY DID YOU MEET HER? 17 A I PHYSICALLY MET HER AT THE OFFICES ON — THEY 18 WERE IN TORRANCE ON 2539 237TH STREET, I BELIEVE. 19 Q YOU SAY “THE OFFICES.” WHOSE OFFICES? 20 A THE LEGION OFFICES. 21 Q AND WHEN WAS THE APPROXIMATE DATE? 22 A IT WAS THE SPRING OF '84, AS NEAR AS I CAN RECALL, 23 OR MAYBE EVEN EARLIER THAN THAT. 24 Q DID MR. CARTO TELL YOU THAT JEAN FARREL WAS THE 25 FOUNDER OF THE NECA CORPORATION? 26 MR. WAIER: OBJECTION. LACKS FOUNDATION. CALLS FOR 27 HEARSAY. 28 THE COURT: OVERRULED.
page 68 1 THE WITNESS: YES, HE DID MENTION THAT TO ME, YES. 2 3 BY MR. MUSSELMAN: 4 Q DID HE EVER TELL YOU MISS JEAN FARREL HAD CREATED 5 IT FOR — EXCUSE ME, THAT SHE CREATED IT FOR THE LEGION? 6 MR. WAIER: OBJECTION. LEADING. 7 THE COURT: OVERRULED. 8 THE WITNESS: HE TOLD ME AND ELISABETH TOLD ME THAT SHE 9 HAD CREATED IT SOLELY FOR THE BENEFIT OF THE LEGION, YES. 10 MR. WAIER: OBJECTION. MOVE TO STRIKE WITH RESPECT TO 11 ELISABETH CARTO. MOVE TO STRIKE. NONRESPONSIVE. 12 MR. BEUGELMANS: YOUR HONOR, ELISABETH CARTO IS ALSO A 13 DEFENDANT IN THE ACTION. 14 THE COURT: WAIT A SECOND. ONE AT A TIME. IS SHE OR 15 IS SHE NOT? 16 MR. BEUGELMANS: YES, SHE’s A DEFENDANT. SHE HAS BEEN 17 SERVED AND APPEARED. 18 MR. WAIER: THAT’s NOT THE QUESTION. 19 THE COURT: OVERRULE THE OBJECTION. 20 21 BY MR. MUSSELMAN: 22 Q DID MR. CARTO EVER TELL YOU THAT MRS. JEAN FARREL 23 HAD DIED? 24 A YES. 25 Q DID HE TELL YOU WHEN THAT OCCURRED? 26 A YES. IT WAS SHORTLY AFTER IT ACTUALLY HAPPENED IN 27 THE FALL. I BELIEVE HE TOLD ME LATE SUMMER OR FALL OF '84. 28 Q WOULD YOU LOOK AT EXHIBIT 10, PLEASE, WHICH SAYS
page 69 1 AT THE TOP “MINUTES OF SEPTEMBER 19, 1985." 2 MR. WAIER: WHICH EXHIBIT? 3 MR. MUSSELMAN: 10. 4 THE WITNESS: YES. 5 6 BY MR. MUSSELMAN: 7 Q HAVE YOU SEEN THAT BEFORE? 8 A YES. 9 Q WHEN WAS THAT? 10 A THIS WAS ALSO IN 1993. 11 Q WHERE WERE YOU? 12 A AT THE LEGION OFFICES. 13 Q WAS THAT IN THE LEGION’s FILES? 14 A I DON'T BELIEVE THIS ONE WAS, NO. 15 Q DO YOU KNOW WHERE IT CAME FROM? 16 A IT CAME TO THE LEGION IN CONJUNCTION WITH THE 17 INVESTIGATION. 18 MR. WAIER: I'M GOING TO OBJECT AS CALLING FOR 19 HEARSAY. LACKS FOUNDATION TO WHERE IT CAME FROM. 20 THE COURT: OVERRULED. 21 THE WITNESS: CAME TO THE LEGION’s HANDS IN CONJUNCTION 22 WITH THE INVESTIGATION THAT THE LEGION STAFF WAS PERFORMING 23 TO DETERMINE MR. Carto’s LEGAL STANDING WITH THE 24 CORPORATION. AND I SEE IT HERE JEAN FARREL IS — WAS WHO 25 SUCCUMBED ON AUGUST 11, 1985. 26 MR. WAIER: MOVE TO STRIKE AS BEING NONRESPONSIVE. 27 HEARSAY. LACKS FOUNDATION. 28 THE COURT: NONRESPONSIVE SUSTAINED.
page 70 1 BY MR. MUSSELMAN: 2 Q DO YOU KNOW WHETHER OR NOT JEAN FARREL DIED ON 3 AUGUST 11, 1985? 4 A I DON'T KNOW FOR SURE THAT SHE DID. 5 Q DID MR. CARTO EVER TELL YOU? 6 A YES. AND IT WAS '85, NOT '84 AS I PREVIOUSLY 7 TESTIFIED. 8 Q DID MR. CARTO EVER TELL YOU THAT HE VISITED LUTRY, 9 SWITZERLAND, WHERE MISS JEAN FARREL LIVED? 10 A NO. 11 Q DID HE EVER TELL YOU HE VISITED SWITZERLAND AS A 12 BUSINESS AGENT FOR THE LEGION? 13 A YES. 14 Q WHEN DID HE TELL YOU THAT? 15 A IT WAS SOMETIME AROUND 1987 WHEN HE ADVISED ME HE 16 WAS MAKING A TRIP OVER THERE. 17 MR. WAIER: I'M GOING TO OBJECT AND MOVE TO STRIKE IF I 18 UNDERSTAND. MAY I HEAR THE QUESTION? 19 (THE RECORD WAS READ.) 20 MR. WAIER: I'M SORRY. NEVER MIND. 21 22 BY MR. MUSSELMAN: 23 Q DID MR. CARTO TELL YOU THAT THE SIGNIFICANCE OF 24 MISS FARREL’s DEATH WAS THAT THE CONTROL OF NECA PASSED TO 25 LEGION? 26 MR. WAIER: OBJECTION. LEADING. HEARSAY. COMPETENCE. 27 THE COURT: OVERRULED. 28 THE WITNESS: HE DID INDICATE THAT, YES.
page 71 1 BY MR. MUSSELMAN: 2 Q DID YOU EVER HAVE DISCUSSIONS WITH HIM WHERE HE 3 TALKED ABOUT WHERE ANYBODY HAD BEEN CONTESTING JEAN FARREL'S 4 WILL? 5 A YES, WE HAD SEVERAL SUCH DISCUSSIONS. 6 Q WHAT DID HE TELL YOU ABOUT THAT? 7 A HE TOLD ME THAT -- 8 MR. WAIER: I'M GOING TO OBJECT AS LEADING AND — NOT 9 LEADING, BUT HEARSAY. 10 THE COURT: OVERRULED. 11 THE WITNESS: MR. CARTO TOLD ME SPECIFICALLY ON SEVERAL 12 OCCASIONS THAT — AND MRS. CARTO, TOO, THAT — THAT WHAT 13 JEAN FARREL HAD GIFTED TO THE LEGION, WHICH WAS A LARGE 14 GIFT, WAS BEING CONTESTED IN EUROPE; THAT IT WAS GOING TO 15 HAVE TO BE OPPOSED OR FOUGHT. 16 17 BY MR. MUSSELMAN: 18 Q DID HE TELL YOU WHO WAS CONTESTING? 19 A YES. HE MENTIONED THE NAME JOAN ALTHAUS. 20 Q DID HE TELL YOU — DISCUSS WITH YOU WHETHER THE 21 CONTEST INVOLVED A FIGHT OVER THE CONTROL OF NECA'S 22 PROPERTY? 23 A NOT SPECIFICALLY. 24 MR. WAIER: OBJECTION. LEADING. 25 THE COURT: OVERRULE THE ANSWER. AND THE ANSWER CAN 26 STAND. 27 SEE YOU ALL AT 1:30. 28 MR. BEUGELMANS: BEFORE WE BREAK FOR LUNCH, THERE’s A
page 72 1 HOUSEKEEPING DETAIL. THE PLAINTIFF HAS OBTAINED SEALED 2 DOCUMENTS FROM THE COURT OF NORTH CAROLINA, EXHIBIT 15 3 THROUGH 19. IN THE RECORD, I WOULD LIKE TO MAKE COPIES OF 4 THOSE. WHAT COUNSEL AND I HAVE DONE IS WE KEPT THEM INTACT 5 WITH THE COURT’s SEAL TO SHOW COUNSEL AND THE COURT. I 6 WOULD LIKE THE OPPORTUNITY TO SHOW COUNSEL AND YOUR HONOR 7 AND MAKE DUPLICATE COPIES. THESE ARE THE SEALED RECORDS 8 FROM THE COURT IN NORTH CAROLINA, IF I COULD TAKE THESE 9 APART AT LUNCH. 10 MR. WAIER: I'VE NEVER SEEN THOSE. AND THEY HAVEN'T 11 BEEN INTRODUCED THROUGH DISCOVERY. WE ASKED FOR THE 12 DOCUMENTS. WE MAY HAVE OBJECTIONS WITH RESPECT TO THE FACT 13 THEY WERE NEVER PRODUCED EVEN THOUGH WE HAD NUMEROUS 14 DOCUMENT REQUESTS. 15 MR. MUSSELMAN: IN THE EXHIBIT BOOK -- 16 MR. BEUGELMANS: ALSO ATTACHED TO THE DEPOSITION 17 EXHIBIT -- 18 THE COURT: ONLY ONE AT A TIME. GIVE THEM TO HIM, AND 19 IF THERE’s SOME PROBLEM, I WILL SORT IT OUT OR NOT WORRY 20 ABOUT IT, WHATEVER. 21 MR. WAIER: YOUR HONOR, ONE OTHER HOUSEKEEPING, I 22 RAISED ISSUES AS TO HEARSAY. JUST BECAUSE A PARTY IS MAKING 23 THE STATEMENT DOESN'T MAKE IT -- 24 THE COURT: COUNSEL, I MADE MY RULING. THANK YOU VERY 25 MUCH. 26 27 (PROCEEDINGS RECESSED.) 28
page 73 1 THE COURT: WE WERE GOING TO STOP THE TESTIMONY OF 2 MR. MARCELLUS AND TAKE SOMEBODY ELSE; IS THAT CORRECT? 3 MR. BEUGELMANS: CORRECT. 4 THE COURT: GO AHEAD. 5 MR. BEUGELMANS: THE PLAINTIFF WILL CALL DEFENDANT 6 WILLIS CARTO TO THE STAND. 7 YOUR HONOR, THE PLAINTIFF’s SERVED ON DEFENSE 8 COUNSEL A DEMAND FOR LODGEMENT OF THE ORIGINAL TRANSCRIPT OF 9 MR. Carto’s DEPOSITION. WE ASK THAT BE LODGED AT THIS 10 TIME. THAT WAS SERVED AUGUST 22, 1996, UPON DEFENSE 11 COUNSEL. 12 MR. WAIER: YOUR HONOR, WE DO NOT HAVE THE ORIGINAL 13 HERE. SECOND, IT WAS SET FOR AUGUST 30TH, 1995. SECOND, 14 THE PROOF OF SERVICE SAYS IT WAS SERVED BY MAIL AS OF 15 AUGUST 22ND, WHICH MEANS WE HAVE 5 DAYS FOR MAILING, WHICH 16 MEANS IT’s UNTIMELY. YOU HAVE TO HAVE 5 DAYS TO MAKE THE 17 DEMAND BEFORE TRIAL FROM THE FIRST FILE DATE. THAT IS 18 UNTIMELY. 19 THE COURT: WHAT IS THE PROBLEM HERE? YOU WANT TO 20 CROSS-EXAMINE HIM ON HIS DEPOSITION, RIGHT? 21 MR. BEUGELMANS: YES. WE DEMANDED HE LODGE THE 22 ORIGINAL TRANSCRIPT FOR TRIAL. HE HASN'T BROUGHT IT TO 23 COURT TODAY. 24 THE COURT: WAS -- 25 MR. WAIER: WE HAD THE ORIGINAL HERE ON AUGUST 30. IT 26 DOESN'T MATTER. WE DO NOT WAIVE THE RIGHTS THAT THE DEMAND 27 WAS UNTIMELY. 28 THE COURT: ALL THE RULES ARE REALLY FOR ASCERTAINMENT
page 74 1 OF THE TRUTH, NOT JUST FOOLING AROUND. WERE YOU PRESENT 2 WHEN HIS DEPOSITION WAS TAKEN? 3 MR. WAIER: I BELIEVE I WAS PRESENT FOR — ON 4 OCTOBER 17TH, I THINK IT WAS. I WAS THERE, YES. 5 THE COURT: THAT’s THIS YEAR OR LAST YEAR? 6 MR. BEUGELMANS: 1995, YOUR HONOR. 7 THE COURT: OKAY. GO AHEAD AND CALL HIM. YOU MAY NOT 8 NEED IT. WHO KNOWS. IF YOU DO, I'LL PROBABLY OVERRULE THE 9 OBJECTION. 10 MR. BEUGELMANS: THANK YOU. 11 12 WILLIS ALLYSON CARTO, 13 CALLED AS A WITNESS UNDER EVIDENCE CODE 776, HAVING BEEN 14 FIRST DULY SWORN, TESTIFIED AS FOLLOWS: 15 CROSS EXAMINATION 16 THE CLERK: WOULD YOU PLEASE STATE YOUR FULL NAME AND 17 SPELL YOUR LAST FOR THE RECORD. 18 THE WITNESS: WILLIS ALLYSON CARTO, C-A-R-T-O. 19 20 BY MR. BEUGELMANS: 21 Q MR. CARTO, ARE YOU CURRENTLY EMPLOYED? 22 A AM I CURRENTLY WHAT? 23 Q EMPLOYED. 24 A YES. 25 Q WHAT IS YOUR EMPLOYMENT, SIR? 26 A I AM CHIEF EXECUTIVE OFFICER AND TREASURER OF 27 LIBERTY LOBBY, INCORPORATED. 28 EXCUSE ME, IF I MAY MAKE A STATEMENT FOR THE
page 75 1 RECORD. I JUST TALKED TO MR. MARK LANE, COUNSEL FOR LIBERTY 2 LOBBY, AND HE HAS ASKED ME TO ASK THAT I BE EXCUSED FROM 3 ANSWERING QUESTIONS ABOUT LIBERTY LOBBY UNTIL HE GETS HERE 4 ON MONDAY. 5 THE COURT: I MIGHT DO THAT. I MIGHT DO THAT. THE 6 WHOLE IDEA WAS WE WOULD PROBABLY START ON MONDAY WITH THE 7 EVIDENCE. WE CAN FILL IT IN WITH OTHER THINGS. 8 MR. BEUGELMANS: I WILL TRY TO. I'LL STAY AWAY FROM 9 THOSE QUESTIONS. 10 11 BY MR. BEUGELMANS: 12 Q SIR, DO YOU HAVE ANY OTHER EMPLOYMENT OTHER THAN 13 BEING CHIEF EXECUTIVE OFFICER AND TREASURER FOR LIBERTY 14 LOBBY AT THE PRESENT TIME? 15 A I'M INVOLVED IN MANY, MANY THINGS. DESCRIBE 16 “EMPLOYMENT." 17 Q DO YOU CURRENTLY CONSIDER YOURSELF TO BE A 18 DIRECTOR OF THE PLAINTIFF IN THIS ACTION? 19 A I AM A MEMBER AND A DIRECTOR AND THE PRESIDENT, 20 BUT I RECEIVE NO COMPENSATION. 21 Q AND WHAT IS A MEMBER AS YOU UNDERSTAND IT, SIR? 22 A A MEMBER IS, IT WOULD — WAS REQUIRED BY THE 23 NONPROFIT CORPORATION CODE OF THE STATE OF TEXAS. AND I 24 HAVE BEEN A MEMBER AND A SUBSTITUTE INCORPORATOR OF THE 25 LEGION FOR SURVIVAL OF FREEDOM SINCE 1966, BUT I HAVE NOT 26 RECEIVED COMPENSATION. 27 Q WHAT AUTHORITY, IF ANY, DOES A MEMBER OF PLAINTIFF 28 HAVE IN YOUR UNDERSTANDING?
page 76 1 A MEMBERS HAVE THE SOLE RIGHT TO ELECT DIRECTORS. 2 Q YOU HAVE ANY OTHER AUTHORITY? 3 A TO TERMINATE DIRECTORS. 4 Q ANYTHING ELSE? 5 A IN ESSENCE, TO RUN THE CORPORATION. ALL THIS IS 6 BEING LITIGATED IN HOUSTON NOW, AND ALL OF THESE MATTERS 7 HAVE BEEN THOROUGHLY DISCUSSED. AND THERE WOULD BE A 8 HEARING ON NOVEMBER 8TH, WHICH IS ONE WEEK FROM TOMORROW, 9 AND HOPEFULLY, WE'LL HAVE DETERMINATION OF WHO THE 10 LEGITIMATE BOARD IS. 11 MR. BEUGELMANS: MOVE TO STRIKE THE LATTER PART OF THE 12 ANSWER. NONRESPONSIVE. 13 THE COURT: SUSTAINED. 14 15 BY MR. BEUGELMANS: 16 Q IS IT YOUR TESTIMONY, SIR, THAT SINCE 1966, UP TO 17 THE PRESENT TIME, YOU HAVE BEEN A MEMBER OF THE BOARD OF 18 DIRECTORS OF LIBERTY LOBBY — I'M SORRY, LEGION FOR THE 19 SURVIVAL OF FREEDOM, INC.? 20 A YES. 21 Q YOU HAD THE AUTHORITY THAT VESTS IN A MEMBER SINCE 22 THAT TIME UP TO THE PRESENT? 23 A HAD THE AUTHORITY TO WHAT? 24 Q YOU HAD THE AUTHORITY THAT GOES WITH BEING A 25 MEMBER FROM 1966 UP UNTIL THE PRESENT TIME? 26 MR. WAIER: OBJECTION. VAGUE AND AMBIGUOUS, “MEMBER." 27 MEMBER OF THE BOARD OF DIRECTORS, A MEMBER AS INCORPORATED? 28 THE COURT: I WILL SUSTAIN THE OBJECTION.
page 77 1 BY MR. BEUGELMANS: 2 Q SIR, IS IT YOUR CONTENTION THAT YOU HAVE BEEN A 3 MEMBER CONTINUOUSLY SINCE 1966 UP TO THE PRESENT? 4 A YES. 5 Q IS IT YOUR CONTENTION AS A MEMBER, YOU ARE A 6 PERSON WITH A POSITION OF AUTHORITY OVER THE PLAINTIFF? 7 A NO. THERE’s ANOTHER MEMBER, MRS. FURR, WHO I 8 BELIEVE SHE WAS APPOINTED A MEMBER PRIOR TO 1966, POSSIBLY 9 '65. SO THIS RESPONSIBILITY AND AUTHORITY HAS BEEN SHARED. 10 MR. BEUGELMANS: MOVE TO STRIKE. NONRESPONSIVE, YOUR 11 HONOR. 12 THE COURT: OVERRULED. I THINK IT’s REASONABLY 13 RESPONSIVE. 14 15 BY MR. BEUGELMANS: 16 Q IS IT YOUR TESTIMONY, SIR, THAT YOU AND 17 LAVONNE FURR JOINTLY HAVE AUTHORITY OVER PLAINTIFF IN YOUR 18 CAPACITY AS MEMBERS OF THE CORPORATION? 19 A YES. 20 Q HAVE YOU MADE ANY STATEMENTS TO ANYBODY UNDER OATH 21 BETWEEN 1966 AND THE PRESENT TIME THAT YOU HAVE NO POSITION 22 OF AUTHORITY OVER THE LEGION? 23 A I DON'T THINK SO. 24 Q DO YOU RECALL YOUR DEPOSITION BEING TAKEN IN 1991 25 IN THE CASE NUMBER C 629224, MEL MERMELSTEIN VERSUS LEGION 26 FOR THE SURVIVAL OF FREEDOM, INC., ET AL., ACTION FILED IN 27 THE SUPERIOR COURT FOR THE STATE OF CALIFORNIA, COUNTY OF 28 LOS ANGELES?
page 78 1 MR. WAIER: YOUR HONOR, I WOULD LIKE TO SEE THIS 2 DEPOSITION IF HE HAS IT. IT HAS NOT BEEN PRODUCED. 3 THE COURT: SHOW IT TO HIM. 4 MR. WAIER: I WOULD OBJECT TO THE READING OF THE 5 DEPOSITION IN OTHER LITIGATION. 6 THE COURT: OVERRULED. 7 MR. BEUGELMANS: LET THE RECORD REFLECT I'M APPROACHING 8 COUNSEL. I HAVE A CERTIFIED COPY OF A DEPOSITION, THAT 9 THERE IS AN OFFICIAL SEAL OF THE COURT REPORTER, LANG 10 FAHLER, THE ORIGINAL, IF COUNSEL WANTS TO LOOK AT IT. 11 MR. WAIER: I WAGED THIS ARGUMENT BEFORE WITH RESPECT 12 TO DEPOSITION TRANSCRIPTS IN OTHER LITIGATION. THE ONLY 13 FOUNDATION TO BRING ANY DEPOSITION FROM — TRANSCRIPT FROM 14 ANOTHER LITIGATION IS TO CALL THE COURT REPORTER FOR 15 PURPOSES. CERTIFIED COPIES DON'T DO IT. YOU HAVE TO HAVE 16 THE CERTIFIED COURT REPORTER. IF NOT, IT’s HEARSAY. THAT'S 17 LAW. IN THIS LITIGATION, THAT’s ANOTHER STORY. WITH 18 RESPECT TO ANY LITIGATION, THE COURT REPORTER MUST BE 19 CALLED. 20 THE COURT: YOU CAN GET ME SOME AUTHORITY FOR THAT. 21 I'M NOT AWARE OF THAT. MAYBE SO. IN ANY CASE, PROCEED ON. 22 MR. WAIER: I HAVEN'T SEEN THIS, YOUR HONOR. 23 THE COURT: YOU CAN LOOK AT IT WHILE WE'RE PROCEEDING 24 WITH OTHER QUESTIONS. 25 26 BY MR. BEUGELMANS: 27 Q MR. CARTO, PLEASE TURN TO EXHIBIT 3 IN THE BOOK 28 BEFORE YOU, PLAINTIFF’s 3.
page 79 1 A YES. 2 Q DID YOU PREPARE EXHIBIT 3? 3 A I DON'T REMEMBER. THAT WAS 1966. THAT WAS 30 4 YEARS AGO. 5 Q TURN TO YOUR DEPOSITION, PAGE 174, THE DEPOSITION 6 TAKEN IN THIS ACTION, OCTOBER 17, 1995. 7 MR. WAIER: YOUR HONOR, I HAD AN OPPORTUNITY TO REVIEW 8 PAGE 112 YOU WANTED TO READ FROM. 9 THE COURT: THAT’s ON SOMETHING ELSE. HE’s GOING TO A 10 NEW DEPOSITION. 11 MR. WAIER: I WOULD LIKE TO SEE THE DEPOSITION, YOUR 12 HONOR. 13 THE COURT: DON'T YOU HAVE A COPY OF THE DEPOSITION? 14 MR. WAIER: NO. I DIDN'T PLAN ON CALLING WITNESSES 15 TODAY, AND I HAVE THE DEPOSITION ON ITS WAY DOWN HERE NOW. 16 I DIDN'T KNOW WHO HE WAS GOING TO CALL. IF HE HAD ADVISED 17 ME HE WOULD CALL WILLIS CARTO -- 18 THE COURT: I ASKED A QUESTION, DO YOU HAVE A COPY, AND 19 THE ANSWER IS “NO"? 20 MR. WAIER: “NO." 21 MR. BEUGELMANS: I HAVE A COMPRESSED TRANSCRIPT. I CAN 22 GIVE IT -- 23 THE COURT: YOU SPEAK RAPIDLY. I DIDN'T HEAR. 24 MR. BEUGELMANS: I HAVE A COMPRESSED TRANSCRIPT, A 25 SMALL ONE. IF I CAN FIND IT, I WILL GIVE IT TO COUNSEL. 26 THE COURT: GIVE HIM A COMPRESSED TRANSCRIPT. 27 (PAUSE) 28 THE COURT: WHY DON'T WE GO ON WITH SOMETHING WHILE
page 80 1 SOMEBODY ELSE LOOKS FOR THIS. DON'T WE HAVE 2 ATTORNEYS ON 2 THIS SIDE OVER HERE, THE PLAINTIFF’s SIDE? 3 MR. BEUGELMANS: I FOUND IT. I HAVE IT. 4 THE COURT: YOU DISAPPEARED. LET’s PROCEED ON. 5 MR. BEUGELMANS: YES, THANK YOU. I'M HANDING COUNSEL A 6 COMPRESSED TRANSCRIPT OF MR. Carto’s DEPOSITION IN THIS 7 CASE. 8 MR. WAIER: WHAT PAGE DO YOU WANT TO READ FROM? 9 MR. BEUGELMANS: PAGE — STARTING PAGE 173, LINE 13 10 THROUGH 174, LINE 4. 11 12 BY MR. BEUGELMANS: 13 Q “QUESTION” -- 14 MR. WAIER: CAN I READ IT, BECAUSE I MAY BE MAKING 15 OBJECTIONS TO SOME OF THE QUESTIONS. I AM ENTITLED TO DO 16 THAT. 17 THE COURT: GO AHEAD AND READ IT. (PAUSE.) 18 THAT SHOULD BE ENOUGH TIME. 19 MR. WAIER: I'M GOING TO OBJECT TO RELEVANCY WITH 20 RESPECT TO IMPEACHMENT. I AM NOT SURE WHAT — IF IT’s THE 21 RELEVANCY IMPEACHMENT, I DON'T SEE IMPEACHMENT WITH WHAT IS 22 BEING READ. 23 THE COURT: OVERRULED. WHAT IS IT GOING TO SAY? HOW 24 DO I KNOW UNTIL I READ AND HEAR IT? 25 MR. BEUGELMANS: YOUR HONOR, MAY I PROCEED OR MAKE AN 26 OFFER OF PROOF? 27 THE COURT: MAKE AN OFFER OF PROOF. 28 MR. BEUGELMANS: THE OFFER OF PROOF WILL BE IN THE
page 81 1 DEPOSITION, MR. CARTO STATES HE DID IN FACT PREPARE 2 EXHIBIT 3, BYLAWS OF JUNE 16, 1966. 3 THE COURT: OVERRULE THE OBJECTION. I OVERRULED THE 4 OBJECTION, COUNSEL. I'M NOT GOING TO ARGUE WITH YOU, LISTEN 5 TO ARGUMENT. IF I WANT IT, I WILL ASK FOR IT. IF YOU THINK 6 IT’s THAT IMPORTANT, SAY MAY I BE HEARD. I WILL PROBABLY 7 LET YOU ARGUE SOME. I'M NOT GOING TO SPEND DAYS AND DAYS 8 AND DAYS GOING THROUGH THIS CASE. THIS CASE WILL NOT TURN 9 INTO AN EIGHT-VOLUME CASE. IT WILL PROCEED SMARTLY LIKE A 10 TRIAL DOES. LET’s GO. 11 12 BY MR. BEUGELMANS: 13 Q “I WOULD LIKE TO SHOW YOU ANOTHER DOCUMENT MARKED 14 COLLECTIVELY AS EXHIBIT 189. IT’s A 3-PAGE DOCUMENT 15 ENTITLED BYLAWS.” AND THE BYLAWS WERE ATTACHED TO EXHIBIT 16 18 TO THE DEPOSITION. 17 “QUESTION: HAVE YOU SEEN THE DOCUMENT, SIR? 18 “ANSWER: YES." 19 “QUESTION: DID YOU PREPARE THAT DOCUMENT? 20 “ANSWER: THE BYLAWS? 21 “QUESTION: YES. 22 “ANSWER: AS FAR AS I CAN RECALL, I PREPARED 23 IT." 24 A DO YOU WANT ME TO ANSWER? 25 Q THERE’s NO QUESTION TO ANSWER. 26 MR. WAIER: I AM GOING TO MOVE TO STRIKE THE ANSWER AS 27 VAGUE AND AMBIGUOUS TO WHAT HE’s REFERRING TO, WHICH BYLAWS 28 AND SO FORTH.
page 82 1 THE COURT: OVERRULED. YOU CAN GO INTO THAT ON 2 DIRECT. 3 MR. BEUGELMANS: MAY I APPROACH THE WITNESS? I DON'T 4 WANT TO PLAY GAMES WITH COUNSEL AND THE COURT. HE SHOULD 5 HAVE BROUGHT THE DEPOSITION TRANSCRIPT. 6 THE COURT: DON'T COMMENT ON HIM. JUST PROCEED. ASK 7 QUESTIONS; GET ANSWERS. I WILL RULE ON THE EVIDENCE. 8 9 BY MR. BEUGELMANS: 10 Q YOUR HONOR — MR. CARTO, IS EXHIBIT 18 TO YOUR 11 DEPOSITION THE SAME AS EXHIBIT 3, PLAINTIFF’s EXHIBIT 3? 12 A YES. 13 Q THANK YOU, SIR. 14 A ALTHOUGH YOU HAVEN'T PERMITTED ME TO ANSWER THE 15 QUESTION. 16 THE COURT: SIR, ANSWER THE QUESTION HE ASKED. I DON'T 17 WANT ANY COMMENTS FROM YOU. YOU ARE GOING TO HURT YOUR CASE 18 IF YOU CONTINUE COMMENTING ON THINGS THAT AREN'T QUESTIONS. 19 YOU HAVE A GOOD ATTORNEY HERE. HE'LL GET THINGS OUT FOR 20 YOU. 21 22 BY MR. BEUGELMANS: 23 Q MR. CARTO, PLEASE TURN TO EXHIBIT 4, PLAINTIFF'S 24 4. 25 A YES. 26 Q HAVE YOU SEEN EXHIBIT 4 BEFORE? 27 A YES. 28 Q AND WHAT IS EXHIBIT 4?
page 83 1 A ARTICLES OF MERGER OF THE LEGION FOR SURVIVAL OF 2 FREEDOM, INC., AND THE COMMITTEE FOR RELIGIOUS DEVELOPMENT, 3 INC. 4 Q TURN TO PAGE 3 OF EXHIBIT 4. 5 A YES. 6 Q IS THAT YOUR SIGNATURE SHOWN ABOVE WILLIS A. 7 CARTO, VICE-PRESIDENT? 8 A YES. 9 Q THANK YOU, SIR. TURN TO EXHIBIT 5, PLEASE. 10 A RIGHT. 11 Q HAVE YOU HAD OCCASION TO READ EXHIBIT 5 IN THE 12 PAST? 13 A I'M SURE I HAVE. THEY'RE MINUTES, MARCH 25, 1966. 14 Q AT THAT TIME, SIR, WERE YOU DIRECTOR OF THE 15 LEGION? 16 A I BELIEVE. I BELIEVE I WAS. 17 Q AND IS IT YOUR SIGNATURE PAGE 3 OF EXHIBIT 5? 18 A YES. 19 Q DID YOU READ EXHIBIT 5 BEFORE YOU SIGNED IT? 20 A YES, I'M SURE I DID. IT’s 30 YEARS OLD. I DON'T 21 REMEMBER WHAT’s IN IT. 22 MR. BEUGELMANS: MOVE TO STRIKE AS NONRESPONSIVE, YOUR 23 HONOR. 24 THE COURT: SUSTAINED. 25 26 BY MR. BEUGELMANS: 27 Q MR. CARTO, IN 1989, DID — JUNE OF 1989, DID YOU 28 EVER HAVE OCCASION TO SEND A LETTER TO HONORABLE PAUL
page 84 1 MCCLOSKEY IN WHICH YOU TOLD THEM YOU HAD NO OFFICIAL 2 POSITION WITH THE LEGION? 3 MR. WAIER: OBJECTION. RELEVANCY. 4 THE COURT: OVERRULED. 5 THE WITNESS: I DON'T REMEMBER. 6 7 BY MR. BEUGELMANS: 8 Q FOR THE PURPOSE OF REFRESHING YOUR RECOLLECTION, 9 LET ME HAND YOU A COPY OF A LETTER DATED JUNE 3, 1989. 10 GIVE A COPY TO COUNSEL. 11 MR. WAIER: WHAT EXHIBIT IS THIS? 12 MR. BEUGELMANS: THIS IS NOT AN EXHIBIT. THIS IS 13 IMPEACHMENT. 14 THE COURT: WE OUGHT TO MARK IT SO WE KEEP TRACK OF 15 THINGS. 16 MR. BEUGELMANS: NEXT IN ORDER WILL BE EXHIBIT 181. 17 MR. WAIER: YOUR HONOR, WE HAVE NEVER SEEN THIS 18 DOCUMENT. IT WASN'T PROVIDED AS PART OF THE EXHIBIT. 19 THE COURT: IT’s IMPEACHMENT. IT DOESN'T HAVE TO BE IF 20 IT’s TRUE IMPEACHMENT. 21 MR. WAIER: I UNDERSTAND THAT. UNFORTUNATELY, THE 22 QUESTION WAS DOES HE RECALL THE LETTER. HE SAYS HE DOESN'T 23 RECALL A LETTER. WHAT, IS THAT IMPEACHMENT? 24 25 BY MR. BEUGELMANS: 26 Q SIR -- 27 THE COURT: I'M NOT GOING TO ARGUE WITH YOU. I MADE 28 THE RULING. YOU KNOW WHY IT’s IMPEACHMENT. I'M NOT GOING
page 85 1 TO TELL YOU WHY SO THE WITNESS KNOWS. 2 3 BY MR. BEUGELMANS: 4 Q SIR, DOES THE DOCUMENT YOU HAVE IN FRONT OF YOU 5 REFRESH YOUR RECOLLECTION AS TO WHETHER YOU SENT A LETTER TO 6 HONORABLE PAUL N. MCCLOSKEY STATING YOU HOLD NO OFFICIAL 7 POSITION WITH THE LEGION? 8 A YES. 9 Q AND DID YOU IN FACT SEND A LETTER TO THAT EFFECT? 10 A YES. 11 Q DO YOU RECALL, SIR, ON MAY 20, 1993, YOU SENT A 12 LETTER TO WILLIAM HULSY, ESQUIRE? DO YOU RECALL, SIR? 13 A NO. 14 MR. WAIER: WHAT DATE? 15 MR. BEUGELMANS: MAY 20, 1993. 16 17 BY MR. BEUGELMANS: 18 Q MAY I SHOW YOU, SIR, A LETTER — COPY OF A 19 LETTER, A FAX, AND ASK YOU IF THIS FAX, WHICH WE'LL MARK AS 20 THE NEXT EXHIBIT -- 21 THE CLERK: 182, YOUR HONOR. 22 23 BY MR. BEUGELMANS: 24 Q — REFRESHES YOUR RECOLLECTION TO WHETHER YOU SENT 25 A FAX TO BILL HULSY ON MAY 20, 1993. 26 A YES. 27 Q IN YOUR LETTER OF MAY 20, 1993, TO BILL HULSY, DO 28 YOU STATE “I AM AN OFFICER AND DIRECTOR OF LIBERTY LOBBY BUT
page 86 1 HAVE NO POSITION WHATEVER WITH L.S.F. EXCEPT THAT OF 2 SYMPATHIZER AND FRIENDS OF THE BOARD OF DIRECTORS"? 3 A YES. 4 Q WAS WILLIAM HULSY, ESQUIRE, THE ATTORNEY FOR THE 5 LEGION AS OF MAY 20, 1993? 6 A I DON'T KNOW. HE SAYS HE WAS, HE SAYS HE WASN'T. 7 HE’s NOT A TRUTHFUL PERSON. 8 MR. BEUGELMANS: MOVE TO STRIKE AS NONRESPONSIVE, YOUR 9 HONOR. 10 THE WITNESS: I DON'T KNOW HOW ELSE TO ANSWER, YOUR 11 HONOR. 12 THE COURT: JUST SAY — YOU DON'T HAVE TO COMMENT ON 13 HIS TRUTH AND VERACITY. THAT QUESTION WASN'T ASKED OF YOU, 14 SIR; YOU KNOW THAT. 15 STRIKE THE ANSWER AS TO MR. HULSY’s TRUTH AND 16 VERACITY. 17 18 BY MR. BEUGELMANS: 19 Q MR. CARTO, DID YOU CONSIDER --I'M GETTING OVER A 20 COLD, I'M SORRY. 21 MR. CARTO, DID YOU CONSIDER WILLIAM HULSY, 22 ESQUIRE, TO BE THE LEGION’s COUNSEL AT THE TIME YOU SENT THE 23 FAX OF MAY 20, 1993? 24 A DID I CONSIDER HIM TO BE? 25 Q YES. 26 A YES. 27 Q THANK YOU. NOW, SIR, IT’s TRUE, ISN'T IT, THAT 28 YOU BORROWED ALL OF THE MONEY THAT WAS USED TO FINANCE THE
page 87 1 LITIGATION IN EUROPE AND ELSEWHERE CONCERNING THE FARREL 2 ESTATE, CORRECT? 3 MR. WAIER: OBJECTION. RELEVANCY. 4 THE COURT: OVERRULED. 5 THE WITNESS: NO. 6 7 BY MR. BEUGELMANS: 8 Q I WOULD LIKE TO TURN TO YOUR DEPOSITION, SIR, 9 PAGE 208. 10 A PAGE WHAT? 11 Q PAGE 208. 12 A I DON'T HAVE THAT HERE. OH, THE DEPOSITION. 13 EXCUSE ME. 14 Q ACTUALLY, START PAGE 207, IF I COULD BACK UP TO 15 GIVE THE COURT SOME PRELIMINARY INFORMATION. 16 MR. CARTO, DID THE LEGION HIRE MR. REDDEN IN NORTH 17 CAROLINA TO PURSUE LITIGATION TO RECOVER THE FARREL ASSETS? 18 A YES. WELL, I HIRED HIM FOR THE LEGION. 19 Q DID THE LEGION PAY MR. REDDEN, R-E-D-D-E-N, FOR 20 HIS SERVICES? 21 A NO. AT LEAST NOT THAT I RECALL. I THINK — MAY 22 I EXPLAIN MYSELF, YOUR HONOR, BECAUSE THIS IS A -- 23 THE COURT: I THINK THE ANSWER WAS, WAS HE HIRED. IF 24 YOU DON'T KNOW, THAT’s FINE. 25 THE WITNESS: WELL, HE WAS HIRED. WHETHER THE LEGION 26 PUT UP MONEY OR NOT, I DON'T KNOW. I DON'T THINK IT DID. I 27 THINK IT WAS OUTSIDE MONEY THAT I BORROWED. 28
page 88 1 BY MR. BEUGELMANS: 2 Q NOW, THE MONEY USED TO PAY MR. REDDEN WAS 3 BORROWED, CORRECT? 4 A I THINK SO. 5 Q AND ALL OF THE OTHER MONEY USED IN THE LITIGATION 6 WAS BORROWED, WASN'T IT, SIR? 7 A YES. 8 Q AND IT WAS MOSTLY BORROWED FROM LIBERTY LOBBY, 9 INCORPORATED, SIR? 10 A WE'RE GETTING INTO LIBERTY LOBBY MATTERS NOW. I 11 UNDERSTOOD WE WOULDN'T GET INTO THAT. 12 THE COURT: THAT’s CORRECT. 13 14 BY MR. BEUGELMANS: 15 Q ALL RIGHT. OTHER THAN LIBERTY LOBBY, 16 INCORPORATED, THE ONLY SOURCE OF FUNDS — STRIKE THAT. 17 THE PRIMARY SOURCE OF FUNDS OTHER THAN LIBERTY 18 LOBBY, INCORPORATED, FROM WHOM YOU BORROWED FUNDS TO FINANCE 19 THE FARREL LITIGATION WAS F.D.F.A., CORRECT? 20 MR. WAIER: OBJECT TO VAGUE AND AMBIGUOUS. 21 THE COURT: OVERRULED. 22 THE WITNESS: I DON'T RECALL. MY RECOLLECTION, A 23 NUMBER OF ENTITIES THAT SUPPLIED MONEY, INCLUDING MYSELF 24 PERSONALLY. 25 26 BY MR. BEUGELMANS: 27 Q MR. CARTO, YOU HAVE NO RECORDS OF ANY MONIES THAT 28 YOU PERSONALLY LOANED TO ANY ENTITY TO PURSUE THE LITIGATION
page 89 1 INVOLVING THE FARREL ESTATE, DO YOU? 2 MR. WAIER: OBJECTION. VAGUE AND AMBIGUOUS. 3 THE COURT: OVERRULED. 4 THE WITNESS: I BELIEVE I DID BEFORE MY HOUSE WAS 5 RAIDED, THANKS TO MR. MARCELLUS AND MR. WEBER. AND 14 6 VOLUMES OF RECORDS WERE TAKEN, WHICH I CANNOT GET BACK. 7 8 BY MR. BEUGELMANS: 9 Q MR. CARTO, DID YOU PREPARE ANY TYPE OF AN 10 ACCOUNTING REFLECTING THE FACT THAT YOU USED YOUR OWN FUNDS 11 TO PURSUE THE FARREL LITIGATION? 12 A NO. WELL, JUST A MINUTE. I DON'T REMEMBER. I'M 13 SURE THAT I MUST HAVE MADE A RECORD OF IT SOMEWHERE. BUT I 14 CAN'T LAY MY HANDS ON IT. IT’s PROBABLY AMONG THE PAPERS 15 THAT WERE TAKEN. 16 Q SIR, HOW MUCH MONEY DID YOU BORROW TO PURSUE THE 17 FARREL BEQUEST? 18 A I THINK THAT GETS INTO THE QUESTION OF LIBERTY 19 LOBBY. 20 THE COURT: NO, SIR, I DON'T BELIEVE IT DOES. 21 THE WITNESS: YOU SAY HOW MUCH MONEY DID I BORROW IN 22 TOTAL? 23 24 BY MR. BEUGELMANS: 25 Q YES. 26 A I CAN'T TELL YOU WITH — WITH ANY ASSURANCE OF 27 COMPLETE ACCURACY. IT WAS HUNDREDS OF THOUSANDS OF DOLLARS. 28 Q IS IT A FIGURE APPROXIMATELY $400,000?
page 90 1 A AT LEAST. I WOULD SAY MORE. THERE WERE 10 2 ATTORNEYS INVOLVED. 3 Q PRIOR TO SEPTEMBER 20, 1985, DID YOU EVER OFFER AN 4 OPINION TO THE DIRECTORS OF THE LEGION AS TO THE APPROXIMATE 5 GROSS VALUE OF NECA? 6 A PRIOR TO WHAT? 7 Q SEPTEMBER 20, 1985. 8 MR. WAIER: OBJECTION. RELEVANCY. 9 THE COURT: OVERRULED. 10 THE WITNESS: 1985? 11 12 BY MR. BEUGELMANS: 13 Q YES. 14 A YES. 15 Q YOU DID? 16 A I BELIEVE SO, YES. 17 Q AND WHAT OPINION DID YOU OFFER THEM AS TO THE 18 VALUE OF NECA? 19 MR. WAIER: I'M GOING TO OBJECT, YOUR HONOR, AS TO 20 RELEVANCY. AND MAY I BE HEARD? 21 THE COURT: YES, GO AHEAD. 22 MR. WAIER: WE'RE TALKING ABOUT AN EVENT WHERE ASSETS 23 CAME INTO EXISTENCE AFTER 1991, THE VALUE OF WHICH IS BEING 24 COMPLAINED OF AS OF 1991, WHATEVER THOSE ASSETS WERE. 25 THERE’s BEEN NO FOUNDATION LAID AS TO WHAT THOSE ASSETS WERE 26 IN 1991. A VALUE IN 1985 OR AN OPINION AS TO A VALUE 1985 27 WAS IRRELEVANT AS TO ANY ISSUE THAT’s PRESENTLY BEFORE THIS 28 COURT.
page 91 1 THE COURT: WHAT’s THE RELEVANCE, IN YOUR OPINION? 2 MR. BEUGELMANS: YES. THE EVIDENCE WILL SHOW THAT THE 3 MAIN DEFENSE BEING PROFFERED BY THE DEFENDANTS IN THIS CASE 4 IS MR. CARTO MADE A DEAL WITH THE LEGION PRIOR -- 5 THE COURT: MADE A WHAT? 6 MR. BEUGELMANS: MADE A DEAL, ENTERED INTO A CONTRACT, 7 IF YOU WILL, WITH THE LEGION, ALTHOUGH THEY DENY THERE WAS A 8 CONTRACT PRIOR TO THE LEGION 1985. AND THE ALLEGED 9 AGREEMENT WAS THAT WILLIS CARTO WOULD FINANCE THE LITIGATION 10 IN RETURN FOR WHICH HE WOULD BE ENTITLED TO REIMBURSEMENT OF 11 HIS INVESTMENT AND A RIGHT TO THE FUNDS OR AT LEAST A RIGHT 12 TO DISTRIBUTE THE FUNDS. IT’s OUR POSITION THAT ANY SUCH 13 CONTRACT WOULD BE VOID WITHOUT A DISCLOSURE TO THE DIRECTORS 14 AS TO THE APPROXIMATE VALUE OF NECA. THERE’s NO 15 CONSIDERATION. 16 THE COURT: ANYTHING ELSE, BRIEFLY? 17 MR. WAIER: BRIEFLY, YOUR HONOR. FIRST, THAT IS NOT 18 OUR DEFENSE. THE DEFENSE IS 1986 THERE WAS AN AGREEMENT 19 MADE IN CONNECTION WITH MR. Carto’s INVOLVEMENT AS TO 20 CONSIDERATION FOR THE VALUE OF THE NECA STOCK. I DON'T 21 UNDERSTAND HOW THAT CONSIDERATION GOES WITH RESPECT TO THE 22 AGREEMENT COUNSEL HAS RECITED TO YOU. 23 THE COURT: OBJECTION OVERRULED. 24 25 BY MR. BEUGELMANS: 26 Q I WOULD LIKE TO READ FROM YOUR DEPOSITION, 27 PAGE 75, STARTING LINE 20 -- 28 THE COURT: I DON'T THINK HE HAS BEEN GIVEN AN
page 92 1 OPPORTUNITY TO ANSWER THE QUESTION. 2 THE WITNESS: WOULD YOU REPEAT THE QUESTION. 3 4 BY MR. BEUGELMANS: 5 Q I'M SORRY. WHAT ESTIMATE DID YOU TELL THE 6 FURRS — STRIKE THAT. 7 WHEN YOU GAVE THE FURRS AN OPINION TO THE VALUE OF 8 NECA PRIOR TO SEPTEMBER 20, 1985, HOW MUCH DID YOU TELL THEM 9 NECA ASSETS WERE WORTH AT THAT TIME? 10 A I HAVE NO IDEA. THIS INFORMATION WAS NOT 11 AVAILABLE TO ME. THE MARKET WAS FLUCTUATING. THERE WAS NO 12 POSSIBLE WAY TO TELL. I DID TELL THE DIRECTORS THAT -- 13 INCLUDING MRS. FURR, INCLUDING MR. FURR, INCLUDING HARVEY 14 TAYLOR, INCLUDING NOEL MERRIHEW AND INCLUDING TOM KERR, 15 THERE WAS A SUBSTANTIAL AMOUNT THERE AT STAKE, AND I WAS 16 GOING AFTER IT. I DON'T REMEMBER WHAT THE AMOUNT WAS. I 17 DON'T THINK I KNEW. 18 Q PRIOR TO JANUARY 1, 1991, DID YOU TELL THE 19 DIRECTORS WHAT THE APPROXIMATE VALUE OF NECA’s ASSETS WERE? 20 A I DON'T THINK SO. I CAN'T TELL YOU ABOUT THE 21 DATES SPECIFICALLY. BUT AS I DIDN'T KNOW, I CERTAINLY 22 COULDN'T TELL ANYBODY ELSE. 23 Q NOW, SIR, YOU TESTIFIED EARLIER THAT ON BEHALF OF 24 THE LEGION, YOU HIRED MR. REDDEN TO PURSUE LITIGATION IN 25 NORTH CAROLINA CONCERNING THE FARREL ESTATE, CORRECT? 26 A CORRECT. 27 Q I WOULD LIKE YOU TO TURN, PLEASE, TO EXHIBIT -- 28 MR. BEUGELMANS: I'M SORRY, YOUR HONOR, IF I COULD TAKE
page 93 1 A BRIEF RECESS HERE. FROM THE ORIGINALS FROM NORTH 2 CAROLINA, WE MADE COPIES DURING LUNCH. THESE WILL BE -- 3 THESE ARE EXHIBITS NUMBER 15 THROUGH 19 COLLECTIVELY, YOUR 4 HONOR. WE KEPT THEM WITH THE SEAL THE STATE OF CALIFORNIA 5 ON TOP. THEY'RE NOT IN THE BOOK. I HAVE A COMPLETE COPY 6 FOR COUNSEL. 7 THE COURT: MAYBE WE OUGHT TO GIVE IT A BRAND NEW 8 NUMBER. 109. 9 MR. BEUGELMANS: IT’s 18. 10 THE CLERK: 183, YOUR HONOR, IS THE NEXT IN LINE. 11 THE COURT: CALL THIS 183, WHICH IT APPEARS TO BE A 12 CERTIFIED COPY OF SOME RECORDS OUT OF THE STATE OF NORTH 13 CAROLINA. 14 15 BY MR. BEUGELMANS: 16 Q MR. CARTO, YOU HAVE A COPY IN FRONT OF YOU OF 17 EXHIBIT 183. PLEASE TAKE A LOOK AT IT. 18 A ANY PARTICULAR PAGE YOU WOULD LIKE ME TO LOOK AT? 19 Q LET ME APPROACH YOU, AND YOU WILL SEE THE 20 COMPLAINT, A VERIFIED COMPLAINT OF THE BACK OF THE FILE. 21 THESE WERE KEPT IN THE NORTH CAROLINA RECORDS IN REVERSE 22 CHRONOLOGICAL ORDER, YOUR HONOR. 23 DO YOU SEE, SIR, A DOCUMENT ENTITLED “COMPLAINT"? 24 A RIGHT. 25 MR. BEUGELMANS: YOUR HONOR, I DO HAVE AN EXTRA COPY 26 FOR THE COURT, IF THAT MAKES IT EASIER. 27 THE COURT: I CAN USE THIS COPY UNLESS YOU WANT TO KEEP 28 IT.
page 94 1 BY MR. BEUGELMANS: 2 Q SIR, ATTACHED TO THE COMPLAINT, THERE’s A 3 VERIFICATION FORM. DO YOU SEE THAT, SIR, PAGE 7 OF THE 4 COMPLAINT? 5 A YES. 6 Q IS THAT YOUR SIGNATURE, SIR? 7 A PAGE 7? 8 MR. WAIER: I DON'T HAVE A PAGE 7. 9 THE WITNESS: THERE. 10 11 BY MR. BEUGELMANS: 12 Q DO YOU SEE? 13 A YES. 14 MR. WAIER: WHICH PAGE ARE YOU TALKING ABOUT? 15 16 BY MR. BEUGELMANS: 17 Q SIR, IS THAT YOUR SIGNATURE? 18 A YES. 19 Q IS IT NOTARIZED? 20 A YES. 21 Q DID YOU READ THE COMPLAINT ATTACHED TO EXHIBIT 183 22 BEFORE YOU SIGNED IT? 23 A I SUPPOSE I DID. I DON'T REMEMBER. 24 Q DID YOU UNDERSTAND THAT YOUR SIGNATURE WAS BEING 25 NOTARIZED, SIR? 26 A YES. 27 Q WHAT IS YOUR HIGHEST EDUCATION, SIR? 28 A MY HIGHEST EDUCATION?
page 95 1 Q YES, SIR. 2 A WELL, I ATTENDED 2 YEARS OF PRELAW IN 3 UNIVERSITY -- 4 Q SIR, IF YOU TURN TO PAGE 2 OF THE COMPLAINT, LOOK 5 AT PARAGRAPH 7. 6 A YES. 7 Q I'M SORRY, PARAGRAPH 6. 8 A YES. 9 Q DID YOU READ PARAGRAPH 6 BEFORE YOU SIGNED THE 10 COMPLAINT IN EXHIBIT 183? 11 A I'M SURE I DID. 12 Q ARE THE FACTS STATED IN PARAGRAPH 6 CORRECT, SIR? 13 A WELL, IF THEY WEREN'T CORRECT, I WOULDN'T HAVE 14 SIGNED IT AT THAT TIME. THAT WAS PROBABLY THE SIZE OF THE 15 ESTATE ON THE STOCK MARKET AND AFTER TAXES — BEFORE TAXES. 16 Q 16 MILLION DOLLARS? 17 A IT MUST HAVE BEEN TRUE, YES. 18 Q PLEASE, SIR, TURN — LOOK AT PARAGRAPH 7 OF THE 19 COMPLAINT. YOU SIGNED UNDER PENALTY OF PERJURY, SIR. 20 A RIGHT. 21 Q ARE THE FACTS -- 22 A PARAGRAPH 7? 23 Q YES, SIR. 24 A OKAY. 25 Q ARE THE FACTS THAT YOU STATE IN PARAGRAPH 7 TRUE 26 AND CORRECT? 27 A YES. 28 Q HOW ABOUT PARAGRAPH 8, SIR?
page 96 1 MR. WAIER: I'M GOING TO OBJECT AT THIS JUNCTURE. THIS 2 INVOLVES HEARSAY, PURPORTS TO BE HEARSAY WITHOUT ANY FURTHER 3 FOUNDATION. 4 THE COURT: OVERRULED. 5 MR. WAIER: MAY I BE HEARD ON THAT, YOUR HONOR? 6 THE COURT: NO. 7 THE WITNESS: ALL RIGHT. 8 9 BY MR. BEUGELMANS: 10 Q ARE THE ALLEGATIONS IN PARAGRAPH 8, TRUE? 11 A WELL, I BELIEVE SO. ARE YOU REFERRING TO ANY 12 SPECIFIC ALLEGATION? 13 Q IS THERE ANYTHING UNTRUE IN PARAGRAPH 8, SIR? 14 A WELL, I DON'T KNOW. I MEAN, THIS IS HEARSAY. 15 THIS REFERS TO ACTIONS — ALLEGED PURPORTED ACTIONS BY 16 JEAN FARREL AND HOW CAN I SAY -- 17 Q PLEASE TURN TO PARAGRAPH 15, SIR, PAGE 4. 18 A ALL RIGHT. 19 Q NOW, THE PLAINTIFF IN THIS ACTION WAS THE LEGION, 20 CORRECT? 21 A CORRECT. 22 Q IT WAS NOT YOU, WAS IT? 23 A NO. 24 Q ARE THE ALLEGATIONS IN PARAGRAPH 15 TRUE, SIR? 25 MR. WAIER: OBJECTION. CALLS FOR LEGAL CONCLUSION. 26 IRRELEVANT. LACKS FOUNDATION. 27 THE COURT: OVERRULED. 28 THE WITNESS: I THINK SO.
page 97 1 BY MR. BEUGELMANS: 2 Q THANK YOU, SIR. NOW, MR. CARTO, DO YOU 3 CONTEND — SINCE YOU BECAME A SUBSTITUTE INCORPORATOR OF 4 THE LEGION SOMETIME IN 1966, YOU HAVE APPOINTED ALL THE 5 DIRECTORS? 6 A NO. 7 Q I WOULD LIKE TO TURN TO YOUR DEPOSITION, SIR, 8 PAGE 161. MR. CARTO, SINCE YOU BECAME THE SUBSTITUTE 9 INCORPORATOR, HAVE YOU AND LAVONNE FURR APPOINTED ALL THE 10 DIRECTORS? 11 A OF COURSE. 12 Q SO ALL DIRECTORS TO THE CORPORATION SINCE 1966 13 UNTIL THE PRESENT TIME HAVE BEEN APPOINTED BY YOU AND YOU 14 ALONE, YOU AND LAVONNE FURR, CORRECT? 15 A WOULD YOU RESTATE YOUR QUESTION. IT'S 16 CONTRADICTORY. 17 Q IT’s YOUR POSITION, SIR, IT’s YOUR CONTENTION THAT 18 SINCE YOU BECAME SUBSTITUTE INCORPORATOR IN 1966, YOU AND 19 LAVONNE FURR HAVE APPOINTED ALL DIRECTORS TO THE LEGION? 20 A THAT IS CORRECT. 21 Q MR. CARTO, ISN'T IT TRUE THAT DIRECTORSHIPS TO THE 22 LEGION ARE A SELF-EXECUTING APPOINTMENT? IN OTHER WORDS, 23 UNLESS A PARTICULAR DIRECTOR SAYS THE CONTRARY, HIS OR HER 24 ELECTION IS AUTOMATIC EACH YEAR? 25 A ABSOLUTELY NOT. 26 Q SIR, I WOULD LIKE YOU TO TAKE A LOOK AT A DOCUMENT 27 ENTITLED “DECLARATION OF WILLIS CARTO” ATTACHED TO THE 28 ORIGINAL TRANSCRIPT OF THIS DEPOSITION. ASK YOU, SIR, IF
page 98 1 YOU HAVE SEEN THIS EXHIBIT 21 TO THE DEPOSITION, YOUR 2 DECLARATION OF WILLIS CARTO. HAVE YOU SEEN THIS DOCUMENT, 3 SIR? 4 A YES. 5 MR. WAIER: MAY I APPROACH THE WITNESS? 6 MR. BEUGELMANS: YES. 7 MR. WAIER: ANYTHING SPECIFIC? 8 9 BY MR. BEUGELMANS: 10 Q HAVE YOU HAD A CHANCE TO LOOK AT THIS DECLARATION? 11 A THIS IS A 7-PAGE DECLARATION DATED DECEMBER 20TH, 12 1993. 13 Q IS THAT YOUR SIGNATURE AT PAGE -- 14 A YES. 15 Q — 7? 16 A YES. 17 Q DID YOU READ THAT DECLARATION BEFORE YOU SIGNED 18 IT? 19 A YES. 20 Q I WOULD LIKE YOU TO LOOK AT PAGE 6 OF THE 21 DECLARATION, SIR. IF YOU WOULD, PLEASE START READING AT 22 LINE 20 WITH THE WORD “IN." 23 A “IN OTHER WORDS, UNLESS THE PARTICULAR DIRECTOR 24 SAYS TO THE CONTRARY, HIS OR HER ELECTION IS AUTOMATIC EACH 25 YEAR.” ANOTHER EXAMPLE OF HOW --HOW DIRECTORS MEETINGS” -- 26 Q THAT’s FINE. 27 A JUST A MINUTE. 28 Q THERE’s NO QUESTION PENDING, SIR.
page 99 1 AND WHAT DOES IT SAY, LINE 18 WITH THE WORD “AS"? 2 A “AS HAS BEEN POINTED OUT TO THE COURT, 3 DIRECTORSHIPS ARE SELF-EXECUTING APPOINTMENTS." 4 Q THANK YOU, SIR. 5 THE WITNESS: MAY I ELABORATE ON THAT, YOUR HONOR? 6 THE COURT: SIR, WAIT UNTIL YOUR ATTORNEY HAS A CHANCE 7 TO ASK YOU QUESTIONS ABOUT IT. 8 9 BY MR. BEUGELMANS: 10 Q DURING THE TIME THAT YOU HAVE ALLEGEDLY BEEN A 11 MEMBER OF THE LEGION, WHAT IS YOUR UNDERSTANDING OF THE 12 FUNCTION OF THE BOARD OF DIRECTORS OF THAT ORGANIZATION? 13 A THE FUNCTION OF THE BOARD OF DIRECTORS WAS TO 14 PROVIDE A LEGAL BACKSTOP IN THE NATURE OF INSURANCE TO 15 THE — TO THE CORPORATION SO THE CORPORATION WOULD NEVER BE 16 LEFT WITHOUT A LEGAL FOUNDATION. IT WAS THE OPPORTUNITY TO 17 HEAR THE VIEWS OF TRUSTED SUPPORTERS AND MEMBERS OF THE 18 I.H.R. IT WAS A LEGAL FRONTISPIECE SO IT COULD DO SUCH 19 THINGS AS APPOINT MEMBERS AND MAKE — AND MAKE OTHER 20 DECISIONS. AND THE DIRECTORS WERE — WERE LEFT ON THE 21 BOARD UNLESS THEY WERE — THEY EITHER DID NOT WANT TO 22 REMAIN OR THEY WERE NOT RENOMINATED. IN MANY CASES THE 23 DIRECTORS WERE NOT RENOMINATED. THEY, THEREFORE, WERE NO 24 LONGER DIRECTORS. I CAN CITE EXAMPLES OF THAT, IF YOU 25 WISH. 26 Q SIR, THE BYLAWS OF THE LEGION, BOTH THE ORIGINAL 27 BYLAWS AND EXHIBIT 3, REQUIRE AN ANNUAL MEETING OF THE 28 DIRECTORS, CORRECT?
page 100 1 A YES. 2 MR. WAIER: OBJECTION. VAGUE AND AMBIGUOUS. LACKS 3 FOUNDATION. 4 THE COURT: OVERRULED. 5 MR. WAIER: MAY I BE HEARD ON THAT? 6 THE COURT: NO. 7 8 BY MR. BEUGELMANS: 9 Q DURING THE TIME THAT YOU HAVE BEEN A MEMBER OF THE 10 LEGION, DID YOU AND LAVONNE FURR MAKE ALL IMPORTANT 11 DECISIONS CONCERNING THE LEGION’s BUSINESS BEFORE THE BOARD 12 OF DIRECTORS MEETING WAS CONVENED ON AN ANNUAL BASIS? 13 A MRS. FURR AND I WORKED TOGETHER EVERY DAY. WHEN I 14 WAS IN CALIFORNIA, ALL THE — ALL THE BUSINESS DETAILS WERE 15 ATTENDED TO BY — BY HER. ALL IMPORTANT DECISIONS WERE 16 EITHER MADE BY BOTH OF US, AND NORMALLY THE BOARD WAS NOT 17 CONSULTED. 18 Q SO BASICALLY, YOU AND LAVONNE MADE ALL THE 19 DECISIONS IN ADVANCE OF THE MEETING OF THE BOARD OF 20 DIRECTORS, CORRECT? 21 A I WOULDN'T SAY ALL OF THEM, BUT CERTAINLY MOST OF 22 THEM. 23 Q AND THE BOARD OF DIRECTORS WOULD RUBBER-STAMP WHAT 24 YOU AND LAVONNE DECIDED, CORRECT? 25 MR. WAIER: OBJECTION. VAGUE AND AMBIGUOUS TO 26 “RUBBER-STAMP." 27 THE WITNESS: I DON'T LIKE THE TERMINOLOGY AT ALL. 28 THE COURT: SUSTAIN THE OBJECTION. I AGREE, I DON'T
page 101 1 LIKE IT EITHER. THE QUESTIONS NEED NOT BE ARGUMENTATIVE. 2 THE WITNESS: THE BOARD OF DIRECTORS WAS — WE WERE 3 VERY CAREFUL TO MAKE IT COMPOSED OF PERSONS WE THOUGHT TO BE 4 HIGHLY REPUTABLE PERSONS, WE COULD TRUST, HAD SOME 5 INTEGRITY. AND THEY WERE TREATED ACCORDING TO THAT BELIEF. 6 MR. BEUGELMANS: MOVE TO STRIKE. NONRESPONSIVE, YOUR 7 HONOR. 8 THE COURT: OVERRULED. 9 10 BY MR. BEUGELMANS: 11 Q SIR, PRIOR TO THE ANNUAL MEETINGS THAT WERE 12 CONDUCTED BY THE LEGION BETWEEN 1984 AND 1993, WOULD YOU 13 DISCUSS THE AGENDA FOR THE MEETINGS WITH THE DIRECTORS IN 14 ADVANCE OF THE MEETINGS BEING CONVENED? 15 A NO. 16 Q WOULD LAVONNE FURR DISCUSS THE AGENDA WITH THE 17 DIRECTORS IN ADVANCE OF THE MEETING BEING CONVENED? 18 MR. WAIER: OBJECTION. CALLS FOR HEARSAY. LACKS 19 FOUNDATION. 20 THE COURT: SUSTAINED. 21 22 BY MR. BEUGELMANS: 23 Q DO YOU KNOW IF LAVONNE FURR WOULD DISCUSS THE 24 AGENDA WITH EACH AND EVERY DIRECTOR PRIOR TO THE ANNUAL 25 MEETING BEING CALLED? 26 MR. WAIER: OBJECTION. LACKS FOUNDATION. CALLS FOR 27 HEARSAY. SPECULATION. 28 THE COURT: HE CAN SAY YES OR NO IF HE KNOWS THE
page 102 1 REASON. WHY HE KNOWS MAY CALL FOR HEARSAY. 2 THE WITNESS: WELL, YOUR HONOR, I HAVE TO EXPLAIN THAT 3 MRS. FURR MOVED FROM LOUISIANA TO CALIFORNIA IN 19 -- 4 AROUND 1970. AT THE TIME, THE LEGION WAS PUBLISHING A 5 MAGAZINE, THE AMERICAN MERCURY. ALMOST ALL OF THE MEMBERS 6 OF THE BOARD LIVED IN THE AREA, AND SHE WOULD MAINTAIN 7 CONTACT WITH THEM ALL. THEY WERE ALL FRIENDS. AT THAT 8 TIME, GENERALLY ALL OF THE DIRECTORS SIGNED THE MINUTES. 9 WHEN SHE MOVED BACK TO LOUISIANA, IN 1981 OR 10 SOMETHING LIKE THAT, WHY, SHE SORT OF LOST CONTACT WITH THEM 11 AND FOR A WHILE REALLY WAS NOT REALLY ACTIVE IN THE AFFAIRS 12 WHICH WERE BEING ADMINISTERED, WE THOUGHT, RESPONSIBLY BY 13 THE EMPLOYEES. 14 MR. BEUGELMANS: MOVE TO STRIKE. NONRESPONSIVE, YOUR 15 HONOR. 16 THE COURT: IT’s NONRESPONSIVE. I AM GOING TO LET IT 17 STAND. IT’s IN MY MIND. I WILL NOT BE ABLE TO GET IT OUT. 18 19 BY MR. BEUGELMANS: 20 Q DID LAVONNE FURR EVER TELL YOU PRIOR TO 1993 SHE 21 WOULD NOT DISCUSS THE AGENDA OF THE ANNUAL MEETINGS WITH THE 22 DIRECTORS? 23 A NO. 24 MR. WAIER: OBJECTION. CALLS FOR HEARSAY. 25 THE COURT: LET THE ANSWER STAND. OVERRULED. 26 27 BY MR. BEUGELMANS: 28 Q THE ANSWER IS “NO,” SIR?
page 103 1 A YES. 2 Q SHE TOLD YOU THAT, CORRECT? 3 A NO. 4 Q SHE TOLD YOU SHE WOULD DISCUSS THE AGENDA WITH THE 5 DIRECTORS IN ADVANCE AT THE ANNUAL MEETINGS? 6 A NO. 7 Q WHAT DID SHE TELL YOU, SIR? 8 A I DON'T REMEMBER. 9 Q THANK YOU. I WOULD LIKE TO READ FROM THE 10 DEPOSITION, SIR, PAGE 165, LINE 2 THROUGH 10. 11 MR. WAIER: 165 TO WHAT LINE? 12 MR. BEUGELMANS: 2 THROUGH 10. 13 14 BY MR. BEUGELMANS: 15 Q “QUESTION: DO YOU KNOW IF LAVONNE FURR WOULD 16 DISCUSS THE AGENDA WITH EACH AND EVERY DIRECTOR PRIOR TO AN 17 ANNUAL MEETING BEING CALLED? 18 “ANSWER: YES. 19 “QUESTION: AND HOW DO YOU KNOW THAT? 20 “ANSWER: THE” -- 21 “QUESTION: AND HOW DO YOU KNOW THAT? 22 “ANSWER: THE ANSWER IS YES, I KNOW THAT SHE WOULD 23 NOT. 24 “QUESTION: SHE WOULD NOT? 25 “ANSWER: RIGHT. IS THAT WHAT I SAID?" 26 WHAT CRITERIA DID YOU AND LAVONNE FURR USE IN 27 DECIDING WHICH DIRECTORS TO CONTACT TO DISCUSS THE AGENDA IN 28 ADVANCE OF AN ANNUAL MEETING?
page 104 1 A WELL, WHEN THERE WERE -- 2 MR. WAIER: EXCUSE ME. MAY I HEAR THE QUESTION? I'M 3 SORRY. 4 THE COURT: YES. WE HAVE DONE THIS 3 OR 4 TIMES 5 TODAY. TRY TO LISTEN. I LISTEN. I THINK WE GET MAYBE ONE 6 OR TWO OF THESE PER DAY PER PERSON, INCLUDING ME; OTHERWISE, 7 WE'RE NOT PAYING ATTENTION. IF YOU WANT A BREAK, THEN WE 8 GIVE YOU A BREAK. TRY TO PAY ATTENTION. MAYBE THE REPORTER 9 WOULD GRACE US WITH READING THE QUESTION. 10 (THE RECORD WAS READ.) 11 MR. WAIER: OBJECTION. CALLS FOR SPECULATION WITH 12 RESPECT TO LAVONNE FURR. 13 THE COURT: SUSTAINED. 14 YOU CAN SAY WHAT HE DID, WHAT HE SAID. 15 MR. BEUGELMANS: THANK YOU. 16 THE WITNESS: SHALL I ANSWER? 17 MR. BEUGELMANS: NO. 18 THE COURT: YOU CAN REPHRASE THE QUESTION. 19 20 BY MR. BEUGELMANS: 21 Q SIR, PRIOR TO 1993, DID THE LEGION RELY ON THE 22 BOARD OF DIRECTORS TO DECIDE ITS BUSINESS AFFAIRS? 23 A NO. 24 Q NOW, AT THE CONCLUSION OF THE LITIGATION INVOLVING 25 THE FARREL ESTATE, 45 PERCENT OF THE NET PROCEEDS RECOVERED 26 WERE DEPOSITED INTO AN ACCOUNT OR ACCOUNTS OWNED BY VIBET, 27 INCORPORATED, CORRECT? 28 MR. WAIER: OBJECTION. LACKS FOUNDATION. CALLS FOR
page 105 1 LEGAL CONCLUSION. HEARSAY. 2 THE COURT: OVERRULED. 3 THE WITNESS: I THINK SO, BUT I'M NOT CERTAIN. I 4 WASN'T HANDLING THIS. 5 MR. WAIER: MOVE TO STRIKE, YOUR HONOR, SINCE THE 6 ANSWER IS OBVIOUSLY SPECULATION. 7 THE COURT: OVERRULED. 8 9 BY MR. BEUGELMANS: 10 Q DID YOU HIRE ATTORNEY FOETISCH, F-O-E-T-I-S-C-H, 11 TO ORGANIZE VIBET, INC.? 12 A I HIRED MR. FOETISCH TO ATTEND TO THE LITIGATION. 13 HE DID, AND DOING THAT, HE DID MANY THINGS. I DIDN'T HIRE 14 HIM SPECIFICALLY TO ORGANIZE VIBET. 15 Q DID MR. FOETISCH ORGANIZE VIBET, INC.? 16 A YES. 17 Q DO YOU KNOW WHETHER OR NOT VIBET, INC., IS A SWISS 18 CORPORATION? 19 A I'M NOT SURE. 20 Q DO YOU KNOW WHO PAID MR. FOETISCH TO ARRANGE 21 VIBET? 22 A HE WAS PAID BY THE FUNDS I RAISED. THAT WAS PART 23 OF HIS FEE. 24 Q ARE YOU SURE OF THAT, SIR? 25 A SURE OF WHAT? 26 Q LET ME ASK YOU THIS: DO YOU KNOW WHO PAID 27 MR. FOETISCH FOR LEGAL WORK INVOLVED IN ORGANIZING VIBET? 28 A I CAN'T RECALL.
page 106 1 Q THANK YOU, SIR. 2 BY THE WAY, HAVE YOU EVER SEEN A BALANCE SHEET FOR 3 VIBET, INC.? 4 A NOPE. 5 Q WHY WAS VIBET, INC., SET UP? 6 MR. WAIER: OBJECTION. CALLS FOR LEGAL CONCLUSION. 7 LACKS FOUNDATION. HEARSAY. 8 THE COURT: OVERRULED. 9 THE WITNESS: BECAUSE AT THAT TIME, THE LEGION HAD BEEN 10 UNDER EXTREMELY HEAVY ATTACK IN MANY WAYS, PARTICULARLY 11 INCLUDING A LAWSUIT WHICH WAS DESIGNED TO WRECK IT. THIS 12 WAS A YEAR, 2 — THIS WAS A YEAR AFTER THE TOTAL DESTRUCTION 13 BY ARSON OF THE INSTITUTE. THE INSTITUTE WAS BANKRUPT. 14 WITH THIS MONEY COMING IN, I DON'T THINK ANY RESPONSIBLE OR 15 HONEST PERSON CONNECTED WOULD OBJECT TO THE — TO THE 16 SEQUESTERIZATION OF ASSETS SO THEY WOULDN'T BE AVAILABLE TO 17 ANY PLAINTIFF WHO WAS TRYING TO DESTROY THE LEGION. 18 19 BY MR. BEUGELMANS: 20 Q SO IN OTHER WORDS, SIR, THE MONEY WAS PUT INTO 21 VIBET IN ANTICIPATION OF A POSSIBLE JUDGMENT AGAINST THE 22 LEGION, CORRECT? 23 A THAT IS CORRECT, UPON THE ADVICE OF MR. HULSY. 24 MR. BEUGELMANS: MOVE TO STRIKE THE LATTER PART OF THE 25 SENTENCE — RESPONSE. 26 THE COURT: I'LL SUSTAIN THE OBJECTION. 27 28
page 107 1 BY MR. BEUGELMANS: 2 Q SIR, HAVE YOU EVER HEARD OF A BUSINESS CALLED 3 BANQUE CANTRADE, C-A-N-T-R-A-D-E, LAUSANNE, L-A-U-S-A-N-N-E? 4 A YES. 5 Q IS IT INTO THE BANQUE CANTRADE LAUSANNE THAT VIBET 6 DEPOSITED THE 45 PERCENT RECOVERY OF THE FARREL ESTATE AFTER 7 DEDUCTION OF FEES, TAXES, ETC.? 8 MR. WAIER: OBJECTION. LACKS FOUNDATION. HEARSAY. 9 SPECULATION. RELEVANCY. 10 THE COURT: OVERRULED. 11 THE WITNESS: THAT WAS A VERY COMPLEX PROCESS. THE 12 ASSETS WERE, TO A LARGE EXTENT, IN VARIOUS ACCOUNTS, BROKER 13 ACCOUNTS IN ENGLAND. NOT SOLELY — HOWEVER, THE JOB OF 14 MR. ROCHAT WAS TO GATHER ALL THIS — ALL THE ASSETS 15 TOGETHER. IN DOING THAT, THERE WERE A LARGE NUMBER OF BANKS 16 THAT WERE USED, AND BANQUE CANTRADE PLAYED A PART IN THAT. 17 I DIDN'T HAVE ANYTHING TO DO WITH IT. IT WAS DONE BY 18 MR. FOETISCH AND THE NOTARY WHO WAS EMPLOYED BY AND TOOK 19 ORDERS FROM MR. FOETISCH. 20 MR. BEUGELMANS: MOVE TO STRIKE AS NONRESPONSIVE, YOUR 21 HONOR. 22 THE COURT: OVERRULED. 23 24 BY MR. BEUGELMANS: 25 Q DID YOU INSTRUCT MR. FOETISCH TO FORM VIBET, 26 INC.? 27 A I CAN'T SAY I DID. 28 Q DO YOU KNOW WHO DID?
page 108 1 A WHO INSTRUCTED HIM? 2 Q YES. 3 A WELL, I GUESS IT DEPENDS ON YOUR DEFINITION OF THE 4 WORD “INSTRUCT.” I — I REALLY DON'T RECALL PUTTING FORTH 5 AS A HYPOTHESIS. IT’s VERY POSSIBLE HE MIGHT HAVE SUGGESTED 6 IT AND — BUT MORE THAN THAT, I CAN'T SAY. 7 Q DO YOU KNOW IF HENRY FISCHER INSTRUCTED 8 MR. FOETISCH TO FORM VIBET? 9 A THAT COULD BE. 10 MR. WAIER: I'M GOING TO OBJECT, YOUR HONOR. CALLS FOR 11 HEARSAY. LACKS FOUNDATION. 12 THE COURT: HE SAYS HE DOESN'T KNOW. 13 14 BY MR. BEUGELMANS: 15 Q SIR, AS OF MARCH 1987, HAD THE LEGION RELINQUISHED 16 ITS INTEREST IN THE FARREL BEQUEST TO YOU? 17 A THAT CALLS FOR A LEGAL CONCLUSION. I CAN'T ANSWER 18 THAT. 19 Q HAVE YOU EVER MADE A STATEMENT, SIR, AS OF 20 MARCH 3, 1987, THE LEGION HAD RELINQUISHED ITS INTEREST IN 21 THE FARREL ESTATE TO YOU? 22 A WELL, IN LAYMEN’s TERMS, I THINK THAT WOULD BE A 23 FAIR APPROXIMATION OF WHAT HAPPENED. TO MY DIRECTION, NOT 24 TO ME. I NEVER GOT A CENT OUT OF IT. 25 Q I WOULD LIKE TO READ YOUR DEPOSITION, PAGE 70, 26 LINE 15 THROUGH 19. 27 “QUESTION: AS OF MARCH 3, 1987, HAD THE BOARD OF 28 DIRECTORS OF THE LEGION RELINQUISHED ANY INTEREST THEY MIGHT
page 109 1 HAVE, THAT THE CORPORATION MIGHT HAVE IN THE FARREL ESTATE 2 TO YOU? 3 “ANSWER: YES." 4 SIR, DO YOU RECALL WHETHER OR NOT YOU EVER 5 SUGGESTED TO THE FURRS THAT THE LEGION MIGHT HIRE AN 6 ATTORNEY ON A CONTINGENT FEE BASIS TO PURSUE THE FARREL 7 ESTATE? 8 MR. WAIER: YOUR HONOR, WE HAD A STANDING ORDER THAT 9 WITNESSES WERE TO BE EXCLUDED FROM THIS COURTROOM. 10 MR. MARCELLUS HEARD THAT ORDER AT THE TIME WHEN IT WAS 11 CALLED. HE’s BEEN SITTING IN HERE, I NOTICED, THIS ENTIRE 12 TIME. THERE’s A — HE’s VIOLATING THIS COURT ORDER. 13 THE COURT: THAT’s RIGHT. HE SHOULD BE OUTSIDE. I 14 DIDN'T NOTICE HIM. 15 MR. BEUGELMANS: I DIDN'T EITHER. 16 17 BY MR. BEUGELMANS: 18 Q SIR, DO YOU CONSIDER THAT YOU PERSONALLY WERE 19 ENTITLED TO 100 PERCENT OF THE 45 PERCENT RECOVERY THAT WENT 20 TO THE LEGION AFTER PAYMENT OF TAXES, EXPENSES AND ALL OTHER 21 FEES? 22 A IN MY OWN MIND, I'M ABSOLUTELY CONVINCED WITHOUT 23 ANY POSSIBILITY OF A DOUBT THAT I SHOULD HAVE HAD AND DID 24 HAVE TOTAL CONTROL OVER THE RECOVERY OF THE FUNDS. 25 MR. BEUGELMANS: MOVE TO STRIKE. NONRESPONSIVE. 26 THE COURT: OVERRULED. 27 28
page 110 1 BY MR. BEUGELMANS: 2 Q THE QUESTION IS, SIR, DO YOU CONTEND THAT YOU 3 PERSONALLY WERE ENTITLED TO A SHARE OF THE PROCEEDS OF THE 4 FARREL ESTATE? 5 A MR. BEUGELMANS, LET ME POINT OUT THERE’s A 6 DIFFERENCE IN LAW BETWEEN CONTROL AND OWNERSHIP. I NEVER 7 CONSIDERED I HAD OWNERSHIP OF THE FARREL ESTATE. NEVER. I 8 DID CONSIDER I HAD TOTAL CONTROL OVER IT, YES. 9 Q LET ME READ FROM THE DEPOSITION, PAGE 21 LINE 24 10 TO PAGE 22 LINE 8. 11 “QUESTION: DO YOU CONTEND, SIR, THAT YOU 12 PERSONALLY WERE ENTITLED TO A SHARE OF THE PROCEEDS OF THE 13 FARREL ESTATE?" 14 MR. WAIER: I'M SORRY. LINE? I'M SORRY. 15 MR. BEUGELMANS: LINE 24. 16 MAY I START AGAIN, YOUR HONOR? 17 18 BY MR. BEUGELMANS: 19 Q “QUESTION: DO YOU CONTEND, SIR, THAT YOU 20 PERSONALLY WERE ENTITLED TO A SHARE OF THE PROCEEDS OF THE 21 FARREL ESTATE? 22 “ANSWER: NO, UNLESS YOU CONSIDER 100 PERCENT 23 A SHARE. 24 “QUESTION: DO YOU CONSIDER, SIR, THAT YOU WERE 25 ENTITLED TO A 100 PERCENT PORTION OF THE FARREL ESTATE? 26 “ANSWER: YES." 27 AND WAS THAT 100 PERCENT TO BE 45 PERCENT THAT WAS 28 DISTRIBUTED TO VIBET?
page 111 1 MR. WAIER: I RAISED AN OBJECTION AT THAT TIME, YOUR 2 HONOR. LACKS FOUNDATION. CALLS FOR SPECULATION. ASSUMES 3 FACTS 45 PERCENT WAS DISTRIBUTED TO VIBET. THERE’s BEEN NO 4 TESTIMONY TO THAT EFFECT. VAGUE AND AMBIGUOUS AS PHRASED. 5 THE COURT: OVERRULED. 6 THE WITNESS: IS THAT A QUESTION? 7 8 BY MR. BEUGELMANS: 9 Q YES, SIR. 10 A WELL, I SAY I THINK YOU HAVE A CONFUSION IN YOUR 11 MIND, SIR, AS TO POSSESSION AND CONTROL. I NEVER TOOK ANY 12 MONEY OF THE FARREL ESTATE FOR MYSELF. I DID REPAY WHAT I 13 HAD ADVANCED AS FAR AS TRAVEL EXPENSES AS FAR AS I WAS 14 ABLE. I DIDN'T MAKE A DIME OUT OF THE FARREL ESTATE. I HAD 15 TOTAL CONTROL OVER IT. THAT’s ALL I CAN SAY. 16 Q SIR, IN YOUR CAPACITY AS CHIEF EXECUTIVE OFFICER, 17 TREASURER AND DIRECTOR OF LIBERTY LOBBY, INC. — ARE YOU 18 PAID A SALARY? 19 MR. WAIER: OBJECTION. I INDICATED THAT THIS INVOLVED 20 LIBERTY LOBBY AND INDICATED HE WOULD WAIT ON THE QUESTIONS. 21 THE COURT: THAT’s CORRECT. 22 23 BY MR. BEUGELMANS: 24 Q OKAY. SIR, DID YOU EVER PREPARE AN ACCOUNTING, 25 COMPLETE ACCOUNTING OF THE 45 PERCENT NET SHARE OF THE 26 FARREL ESTATE AFTER DEDUCTION OF ATTORNEY FEES, TAXES, COSTS 27 AND RELATED EXPENSES? 28 A NO.
page 112 1 Q SIR, IS IT TRUE THAT YOU HAVE STATED IN THE PAST 2 THAT THE NET RECOVERY, THE 45 PERCENT SHARE AFTER PAYMENT OF 3 FEES, TAXES AND COSTS, WAS BETWEEN 3 AND 4 MILLION DOLLARS? 4 A YES. 5 Q WAS THAT A TRUE STATEMENT? 6 A YES. 7 Q SIR, WHAT HAPPENED TO THE UNSET GEMS -- 8 MR. WAIER: OBJECTION. 9 10 BY MR. BEUGELMANS: 11 Q — THAT THE LEGION RECEIVED AS ITS SHARE OF THE 45 12 PERCENT OF THE DISTRIBUTION? 13 MR. WAIER: OBJECTION. LACKS FOUNDATION. 14 THE COURT: OVERRULED. 15 MR. WAIER: MAY I BE HEARD ON THAT? 16 THE COURT: NO. 17 THE WITNESS: MY UNDERSTANDING IS THAT THE LEGION DID 18 NOT RECEIVE THIS MONEY. THE MONEY WAS RECEIVED, AS 19 MR. WAIER POINTED OUT THIS MORNING BY A DOCUMENT, AS SHOWN 20 BY MYSELF AND THE LEGION. LEGION DIDN'T — YOUR QUESTION 21 DOES NOT REFLECT THAT FACT. 22 AS FAR AS THE DIAMONDS, THE GEMS, WHATEVER THEY 23 WERE — I'M NOT SURE THEY WERE ALL DIAMONDS. I FORGET. 24 BUT ALL THIS, THIS WAS MR. ROCHAT’s JOB TO GATHER ALL 25 THIS — ALL THE ASSETS TOGETHER AND TURN THEM INTO CASH IN 26 ORDER TO RECOVER THE MONEY INVOLVED, THE ASSETS OF NECA. 27 28
page 113 1 BY MR. BEUGELMANS: 2 Q SO THE ANSWER IS YOU DON'T KNOW WHAT HAPPENED TO 3 THE GEMS? 4 A I THINK I JUST EXPLAINED TO YOU WHAT HAPPENED TO 5 THE GEMS. MR. ROCHAT WOULD BE THE MAN THAT COULD SWEAR WHAT 6 HAPPENED TO THE GEMS. 7 Q DID — STRIKE THAT. 8 WHO WAS ROLAND ROCHAT? 9 A A NOTARY IN SWITZERLAND. I'M SURE YOU REALIZE, 10 MR. BEUGELMANS, A NOTARY IN MANY LATIN COUNTRIES OVERSEAS IS 11 QUITE DIFFERENT FROM A NOTARY PUBLIC HERE. THEY HAVE LEGAL 12 RESPONSIBILITIES. THEY ARE MORE OR LESS ON THE SAME LEVEL 13 OF AN ATTORNEY. 14 Q IS MR. ROLAND ROCHAT A NOTAIRE, N-O-T-A-I-R-E? 15 A WHAT? 16 Q IS HE A NOTAIRE? 17 A WELL, I THINK THAT’s WHAT IS ON HIS SHINGLE. 18 Q DO YOU KNOW WHAT A SOLICITOR IS UNDER ENGLISH LAW? 19 A IN SWITZERLAND, THEY DON'T HAVE THAT SYSTEM. 20 Q DO YOU KNOW IF A NOTAIRE UNDER SWISS LAW IS THE 21 SAME THING OR SIMILAR TO A SOLICITOR UNDER, I THINK, ENGLISH 22 LAW? 23 A I DON'T THINK SO. 24 Q DID YOU HIRE — PERSONALLY, DID YOU HIRE ANY 25 SOLICITORS IN ENGLAND TO PURSUE THE FARREL ESTATE? 26 A YES. FOR THE LEGION I DID, YES. 27 Q AND WHAT WAS THE NAME OF THE SOLICITOR YOU HIRED 28 IN ENGLAND, SIR?
page 114 1 A HOOPER, H, DOUBLE O, P-E-R. 2 Q WAS MR. HOOPER PAID FOR HIS SERVICES FROM THE NET 3 RECOVERY AFTER PAYMENT OF ATTORNEY FEES, COSTS AND EXPENSES? 4 A HE WAS OVERPAID. 5 Q IS THE ANSWER “YES,” SIR? 6 A HE WAS INDEED PAID. 7 Q AND HE DEFERRED RECEIPT OF FUNDS UNTIL THE 8 SETTLEMENT WAS EFFECTED, CORRECT? 9 A YES, I BELIEVE SO. 10 Q NOW, SIR, DID YOU EVER SUGGEST TO THE OTHER 11 MEMBER — SO-CALLED MEMBER OF THE LEGION THAT OTHER THAN 12 MR. HOOPER, THE LEGION MIGHT SECURE ATTORNEYS REPRESENTED IN 13 CONNECTION WITH THE FARREL LITIGATION ON A CONTINGENT FEE 14 BASIS? 15 MR. WAIER: OBJECTION. LACKS FOUNDATION. 16 SPECULATION. RELEVANCY, YOUR HONOR. 17 THE COURT: OVERRULED. 18 THE WITNESS: MR. BEUGELMANS, I DON'T KNOW. I MAY HAVE 19 DONE THAT. I MAY HAVE ATTEMPTED TO DO THAT. I SOON FOUND 20 OUT IT WAS IMPOSSIBLE TO DO THAT WITH ALL THE ATTORNEYS THAT 21 I DEALT WITH AND THERE WERE NUMEROUS. THEY ALL REQUIRED 22 PAYMENT UP FRONT. 23 24 BY MR. BEUGELMANS: 25 Q EXCEPT HOOPER, CORRECT? 26 A WELL, NO. HOOPER WAS PAID ALL ALONG. AT THE END, 27 HE SUBMITTED A HUGE BILL, WHICH WASN'T REFLECTIVE OF HIS -- 28 IN MY OPINION, WAS NOT REFLECTIVE OF HIS SERVICES. SO WE
page 115 1 DISPUTED THAT. 2 Q DID HOOPER EVER — STRIKE THAT. 3 DID HOOPER EVER PRESENT TO YOU, WILLIS CARTO, A 4 BREAKDOWN OF THE FARREL RECOVERY? 5 A WELL, THROUGH HIS OFFICES. WE WERE PRESENTED WITH 6 ACCOUNT STATEMENTS OF THE ACCOUNT, OF COURSE, BY — FROM 7 THE BROKERS. I DON'T KNOW IF THEY CAME TO HIM. NO, I THINK 8 THEY CAME TO ME DIRECTLY. 9 Q DID YOU EVER RECEIVE A LETTER FROM MR. HOOPER 10 DETAILING THE BREAKDOWN OF THE FARREL RECOVERY? 11 A I DON'T RECALL. 12 Q SIR, I WOULD LIKE YOU TO LOOK AT YOUR DEPOSITION, 13 EXHIBIT 5 TO YOUR DEPOSITION, AND ASK YOU IF EXHIBIT 5 TO 14 THE DEPOSITION REFRESHES YOUR RECOLLECTION AS TO WHETHER OR 15 NOT YOU RECEIVED A LETTER FROM MR. HOOPER DETAILING THE 16 BREAKDOWN OF THE RECOVERY OF THE FARREL ESTATE. 17 THE COURT: IS THAT THE SAME EXHIBIT AS 46? 18 MR. BEUGELMANS: YES, I BELIEVE. THAT’s THE LETTER OF 19 JUNE 5, 1991. 20 THE WITNESS: WHAT’s YOUR QUESTION? 21 22 BY MR. BEUGELMANS: 23 Q DID YOU RECEIVE THIS LETTER, SIR? 24 A I SUPPOSE I DID, IN 1991. 25 Q DID YOU READ THIS LETTER WHEN YOU RECEIVED IT, 26 SIR? 27 A I SUPPOSE. 28 Q DID YOU EVER SEND A LETTER BACK TO MR. HOOPER
page 116 1 DISPUTING THE CONTENTS OF EXHIBIT 46? 2 A I DON'T REMEMBER. 3 Q IS THE PERSON REFERRED TO AS “MAITRE ROCHAT” AT 4 PAGE 3 OF EXHIBIT 46 — IS THAT ROLAND ROCHAT? 5 A YES. 6 Q DID THE LEGION EVER BORROW MONEY TO FINANCE THE 7 FARREL LITIGATION? 8 A MY RECOLLECTION IS THAT THE FUNDS WERE BORROWED IN 9 MY NAME. I'M NOT — I'M NOT — I CAN'T ANSWER THAT 10 QUESTION. 11 Q SO THE ANSWER IS YOU DON'T RECALL, CORRECT? 12 A RIGHT. 13 Q TAKE A LOOK AT EXHIBIT 21. 14 A YES. 15 Q WOULD YOU LOOK AT THE LAST PAGE, SIR. 16 A YES. 17 Q IS EXHIBIT 21 A COPY OF AN ORIGINAL? 18 MR. WAIER: OBJECTION. LACKS FOUNDATION. 19 THE COURT: OVERRULED. 20 THE WITNESS: IS IT A COPY OF THE ORIGINAL? IS THAT 21 WHAT YOUR QUESTION IS? 22 23 BY MR. BEUGELMANS: 24 Q YES, AN AUTHENTIC COPY. 25 A IT SEEMS TO BE. I WOULD ACCEPT IT. IT LOOKS 26 FAMILIAR. 27 Q DO YOU SEE YOUR SIGNATURE UNDER YOUR NAME AT THE 28 LAST PAGE, PAGE 12?
page 117 1 A I CERTAINLY DON'T. 2 MR. WAIER: YOU SAY EXHIBIT 21? 3 MR. BEUGELMANS: THE DISTRIBUTION AGREEMENT. 4 MR. WAIER: EXHIBIT 21? 5 MR. BEUGELMANS: EXCUSE ME, EXHIBIT 20. 6 MR. WAIER: I DON'T HAVE EXHIBIT 20. 7 THE WITNESS: THE SAME THING AS UP THERE, DISTRIBUTION 8 AGREEMENT. 9 10 BY MR. BEUGELMANS: 11 Q DO YOU SEE THE DISTRIBUTION AGREEMENT, EXHIBIT 20? 12 A YES. 13 Q IS EXHIBIT 20 AUTHENTIC? 14 A YES, I BELIEVE IT TO BE SO. 15 Q DO YOU SEE AT PAGE 12 OF EXHIBIT 20 THERE’s A 16 SIGNATURE ON BEHALF OF THE LEGION AND ONE ON BEHALF OF 17 WILLIS CARTO? 18 A YES. 19 Q DID YOU AUTHORIZE ANYONE TO AFFIX THAT SIGNATURE 20 ON YOUR BEHALF? 21 A I'M SURE I MUST. 22 Q DO YOU RECALL WHO IT WAS THAT SIGNED THIS DOCUMENT 23 ON YOUR BEHALF? 24 A IT WOULD HAVE BEEN EITHER MR. ROCHAT, I WOULD 25 SUPPOSE — I'M SPECULATING. I THINK IT WOULD BE EITHER 26 MR. ROCHAT OR MR. FOETISCH. 27 MR. WAIER: MOVE TO STRIKE. WITNESS INDICATED HE'S 28 SPECULATING.
page 118 1 THE COURT: I'LL STRIKE HIS ANSWER. 2 3 BY MR. BEUGELMANS: 4 Q ARE YOU DISPUTING THAT THE PERSON WHO SIGNED 5 EXHIBIT 20 ON YOUR BEHALF WAS AUTHORIZED TO DO SO? 6 A NO. I'M ANSWERING YOUR QUESTION. 7 Q THANK YOU, SIR. IF YOU WOULD, SIR, PLEASE TURN TO 8 EXHIBIT 29. 9 A YES. 10 Q HAVE YOU SEEN THIS DOCUMENT BEFORE, SIR? 11 A I BELIEVE SO. 12 Q IS THIS DOCUMENT AN AUTHENTIC COPY OF AN ORIGINAL? 13 A I WOULD SUPPOSE. 14 Q DO YOU KNOW IF THIS DOCUMENT WAS EVER SIGNED BY 15 ANYBODY? 16 A WELL, I WOULD SUPPOSE THAT THE ORIGINAL — IT WAS 17 SIGNED BY MRS. FURR. THIS IS A COPY BEFORE SHE SIGNED IT. 18 Q THANK YOU, SIR. 19 NOW, WAS THERE A TIME WHEN LAVONNE FURR RESIGNED 20 AS A DIRECTOR OF THE LEGION? 21 A THAT IS A LEGAL QUESTION. SHE WAS FORCED OUT BY 22 THREATS, SHE AND HER HUSBAND, AND WHICH, IN OUR VIEW, WAS 23 NOT A LEGAL RESIGNATION. AND SHE REPUDIATED HER 24 RESIGNATION. 25 Q ARE YOU REFERRING TO THE RESIGNATION THAT OCCURRED 26 IN SEPTEMBER 1993, CORRECT? 27 A YES. 28 Q PRIOR TO THAT TIME, HAD LAVONNE FURR EVER RESIGNED
page 119 1 FROM THE POSITION AS A DIRECTOR OF THE LEGION? 2 A I REALLY DON'T RECALL. I DON'T THINK SO. I COULD 3 BE WRONG. 4 Q DO YOU RECALL THERE WAS A TIME MORE THAN 15 YEARS 5 AGO THAT LAVONNE FURR FELT SHE HAD A CONFLICT OF INTEREST 6 WITH THE LEGION? 7 A NO. 8 Q DID LAVONNE FURR TELL YOU SHE RESIGNED AS A 9 DIRECTOR? 10 MR. WAIER: OBJECTION. RELEVANCY. 11 THE COURT: OVERRULED. 12 THE WITNESS: WELL, MR. BEUGELMANS, IF I SEEM VAGUE 13 ABOUT THIS, IT’s BECAUSE MY MIND HAS BEEN FOCUSSED ON A LOT 14 OF OTHER THINGS IN THE PIDDLING DETAILS, NAMELY KEEPING THE 15 THING ALIVE, RAISING MONEY FOR IT AND KEEPING IT A VIABLE 16 INSTITUTION. AS FAR AS THE PAPERWORK, I JUST DON'T RECALL 17 ALL THE DETAILS. AND INCONSEQUENTIAL, THEY MEAN NOTHING TO 18 THE PROPER FUNCTIONING OF THE LEGION, WHICH, UNTIL IT WAS 19 DESTROYED, WAS VERY CONTROVERSIAL, BUT AN INSTITUTION 20 RESPECTED ALL AROUND THE WORLD. 21 MR. BEUGELMANS: MOVE TO STRIKE AS NONRESPONSIVE, YOUR 22 HONOR. 23 THE COURT: SUSTAIN THE OBJECTION. 24 25 BY MR. BEUGELMANS: 26 Q MR. CARTO, DID LAVONNE FURR EVER TELL YOU PRIOR TO 27 SEPTEMBER 1993 THAT SHE HAD RESIGNED AS A DIRECTOR OF THE 28 LEGION?
page 120 1 A AS I SAID, I BELIEVE I DON'T RECALL THAT SHE DID. 2 Q THANK YOU, SIR. 3 PRIOR TO SEPTEMBER 1993, DID LAVONNE FURR EVER 4 TELL YOU SHE FELT SHE HAD A CONFLICT OF INTEREST WITH THE 5 LEGION? 6 A I DON'T SEE HOW SHE COULD HAVE A CONFLICT OF 7 INTEREST. 8 Q DID SHE MAKE THAT STATEMENT TO YOU? 9 A I DON'T REMEMBER HER MAKING THE STATEMENT TO ME. 10 Q THANK YOU, SIR. 11 DOES VIBET, INC., STILL HAVE MONEY IN THE BANQUE 12 CANTRADE ACCOUNT IN SWITZERLAND? 13 MR. WAIER: OBJECTION. LACKS FOUNDATION. CALLS FOR 14 HEARSAY. SPECULATION. BEST EVIDENCE. 15 THE COURT: OVERRULED. 16 THE WITNESS: I DON'T KNOW. 17 18 BY MR. BEUGELMANS: 19 Q AS OF THE TIME OF YOUR DEPOSITION WHEN YOU 20 WERE — AS OF THE TIME OF YOUR DEPOSITION ONE YEAR AGO, 21 SIR, IN 1995, DID VIBET, INC., STILL HAVE MONEY ON ACCOUNT 22 AT BANQUE CANTRADE LAUSANNE, SWITZERLAND? 23 A WELL, I THINK IT DID. 24 Q DO YOU KNOW HOW MUCH? 25 A NO. 26 Q WAS IT APPROXIMATELY $200,000? 27 A I DON'T KNOW. 28 Q DID YOU EVER TELL ANYBODY ON OR ABOUT OCTOBER 17,
page 121 1 1995, THAT VIBET, INC., HAD APPROXIMATELY $200,000 ON 2 DEPOSIT AT BANQUE CANTRADE, LAUSANNE, SWITZERLAND? 3 MR. WAIER: OBJECTION. CALLS FOR POTENTIAL DISCLOSURE 4 OF ATTORNEY/CLIENT PRIVILEGE COMMUNICATION. 5 THE COURT: EXCLUDING TELLING YOUR ATTORNEY, 6 OBVIOUSLY. 7 MR. WAIER: ALSO, I WOULD — IT DEPENDS ON THE CONTEXT 8 WHICH THIS IS DONE. THIS MAY HAVE BEEN IN THE THROES OF A 9 SETTLEMENT NEGOTIATION. IN THAT REGARD, I OBJECT ON THAT 10 GROUND. SETTLEMENT NEGOTIATIONS ARE NOT RELEVANT. 11 THE COURT: THIS DOESN'T GET INTO ANY SETTLEMENT. IT'S 12 A SIMPLE QUESTION. WAS THERE MONEY? IF SO, HOW MUCH ON 13 OCTOBER 15, 1995? BANQUE CANTRADE HAS NOTHING TO DO WITH 14 THE SETTLEMENT I CAN SEE. HE MAY ANSWER THE QUESTION IF YOU 15 KNOW THE ANSWER. 16 THE WITNESS: THE QUESTION IS DID I EVER TELL ANYBODY 17 ON WHAT DATE? 18 19 BY MR. BEUGELMANS: 20 Q APPROXIMATELY OCTOBER 17, 1995, THAT VIBET, INC., 21 HAD ABOUT $200,000 ON DEPOSIT AT BANQUE CANTRADE LAUSANNE? 22 A I DON'T REMEMBER. 23 MR. BEUGELMANS: YOUR HONOR -- 24 THE COURT: 3 O'CLOCK. TAKE A BREAK. SEE YOU IN 10 25 MINUTES. 26 27 (PROCEEDINGS RECESSED.) 28
page 122 1 THE COURT: GO AHEAD. 2 MR. BEUGELMANS: YOUR HONOR, PROCEDURAL POINT. I USED 3 THE DEPOSITION FROM THE CASE OF MEL MERMELSTEIN VERSUS THE 4 OTHER COUNTY ACTION EARLIER. SHOULD I LODGE THAT WITH THE 5 COURT? 6 MR. WAIER: WHICH ONE? 7 MR. BEUGELMANS: MERMELSTEIN VS. LEGION, CASE 629224. 8 THE COURT: NO, I DON'T NEED IT. I'M NOT GOING TO READ 9 IT. 10 MR. BEUGELMANS: THANK YOU. 11 QUESTION TO THE COURT. I CAN'T GO INTO QUESTIONS 12 ABOUT LIBERTY LOBBY WITH THIS QUESTION. I WILL COVER A FEW 13 MORE POINTS. I WANT TO RESERVE THE RIGHT, PERHAPS, TO -- 14 DEPENDING ON THE ANSWERS HE GIVES WHEN HE QUESTIONS — HE 15 ANSWERS QUESTIONS ABOUT OTHER ENTITIES, MAY OPEN THE DOOR. 16 THE COURT: I'M TRYING TO BE FAIR TO MR. LANE, WHO 17 REPRESENTS LIBERTY LOBBY. IF IT GETS CLOSE TO LIBERTY 18 LOBBY, WE'LL ALL BE HERE NEXT WEEK. 19 MR. BEUGELMANS: I'LL STAY AWAY UNTIL NEXT WEEK. IF I 20 ASK A QUESTION, PERHAPS TANGENTIAL, NOT RIGHT ON POINT. 21 THANK YOU. 22 23 BY MR. BEUGELMANS: 24 Q MR. CARTO, AS OF THE DATE OF YOUR DEPOSITION, 25 OCTOBER 17, 1995, DID THE LEGION OWE VIBET $250,000? 26 A THERE WAS A CONSIDERABLE DEBT, MR. BEUGELMANS. I 27 CAN'T RECITE SPECIFICALLY THE AMOUNT. 28 Q I WOULD LIKE TO SHOW YOU YOUR DEPOSITION
page 123 1 TRANSCRIPT, PAGE 115, ASK IF THAT REFRESHES YOUR 2 RECOLLECTION TO THE AMOUNT OF THE DEBT WHICH YOU CONTEND 3 LEGION OWED VIBET AS OF OCTOBER 1985? 4 MR. WAIER: WHAT PAGE? 5 MR. BEUGELMANS: 115, SIR. 6 THE WITNESS: OKAY. THANK YOU. 7 8 BY MR. BEUGELMANS: 9 Q WAS IT YOUR TESTIMONY AT THAT TIME THAT LEGION, 10 THE PLAINTIFF IN THIS CASE, OWES VIBET, INCORPORATED, 11 $250,000? 12 A I THINK MY ANSWER REFERRED TO 187,000, AND THEN I 13 WAS CORRECTED BY MR. WAIER, I BELIEVE. YES, IT WAS A FIGURE 14 CLOSE TO THAT. 15 Q DIDN'T YOU ADOPT MR. WAIER’s STATEMENT THAT VIBET 16 OWES — STRIKE THAT, THE LEGION OWES VIBET $250,000? 17 A I BELIEVE I DID. 18 Q THANK YOU, SIR. EARLIER, MR. CARTO, IN YOUR 19 TESTIMONY, YOU STATED THAT YOU HAVE CONTROL OVER THE 45 20 PERCENT SETTLEMENT PROCEEDS FROM THE FARREL LITIGATION, BUT 21 YOU DON'T HAVE OWNERSHIP; IS THAT CORRECT? 22 A CORRECT. 23 Q WHO OWNED THAT MONEY? 24 A PARDON? 25 Q WHO DID OWN THAT MONEY? 26 A THE MONEY WAS DISTRIBUTED ACCORDING TO MY 27 DIRECTION, AND THEN WHEN IT WAS DISTRIBUTED EITHER AS LOANS 28 OR GIFTS, WHY, IT BECAME THE PROPERTY OF THE DISTRIBUTION.
page 124 1 Q AT THE MOMENT YOU MADE THE DISTRIBUTIONS, BEFORE 2 THE DISTRIBUTIONS WERE CONSUMMATED, WHO OWNED THE 45 PERCENT 3 SHARE OF THE FARREL ESTATE THAT WENT TO THE LEGION? 4 A AGAIN, THAT’s A LEGAL CONCLUSION. I THINK IT 5 WOULD BE VIBET. 6 Q BEFORE THE MONEY WAS TRANSFERRED BY FOETISCH TO 7 VIBET, WHO OWNED THAT MONEY? 8 MR. WAIER: OBJECTION. CALLS FOR LEGAL CONCLUSION. 9 LACKS FOUNDATION. HEARSAY. SPECULATION. 10 THE COURT: OVERRULED. 11 THE WITNESS: MR. BEUGELMANS, I CAN'T ANSWER THAT 12 QUESTION BECAUSE I JUST DON'T KNOW, BECAUSE I BELIEVE IT 13 IS — HAS TO BE ANSWERED BY AN ATTORNEY WHO WAS INVOLVED. 14 15 BY MR. BEUGELMANS: 16 Q SIR, IS THE MONEY THAT WAS DEPOSITED IN VIBET 17 ACCOUNTS YOUR MONEY? 18 A NO. 19 Q I WOULD LIKE TO READ FROM YOUR DEPOSITION, PAGE 20 116, LINE 19 THROUGH 21. 21 “QUESTION: NOW, THE MONEY THAT WENT TO VIBET WAS 22 YOUR MONEY, CORRECT? 23 “ANSWER: THAT’s CORRECT." 24 A MR. BEUGELMANS -- 25 Q NO QUESTION PENDING, SIR. 26 MR. WAIER: WHERE DID YOU READ THAT FROM? 27 MR. BEUGELMANS: PAGE 116, LINES 19 THROUGH 21. 28 THE WITNESS: I HAD CONTROL OVER IT, YES, SIR.
page 125 1 MR. BEUGELMANS: THERE’s NO QUESTION PENDING, SIR. 2 3 BY MR. BEUGELMANS: 4 Q ALL OF THE MONEY THAT WAS DEPOSITED IN THE VIBET 5 ACCOUNTS CAME FROM THE FARREL ESTATE, CORRECT? 6 A NO. 7 Q I WOULD LIKE TO READ FROM YOUR DEPOSITION, PAGE 8 117, STARTING LINE 3 THROUGH 7. 9 “QUESTION: HAS VIBET EVER RECEIVED MONIES FROM 10 ANY SOURCE OTHER THAN THE FUNDS WHICH WERE TRANSFERRED TO 11 VIBET FROM YOUR SHARE OF THE 45 PERCENT OF THE SETTLEMENT OF 12 THE FARREL ESTATE? 13 “ANSWER: I DON'T THINK SO." 14 MR. BEUGELMANS: YOUR HONOR, NO FURTHER QUESTIONS AT 15 THIS TIME. RESERVE THE RIGHT TO ASK FURTHER QUESTIONS ON 16 MONDAY WHEN MR. LANE IS HERE. 17 THE COURT: DID YOU WANT TO QUESTION THE WITNESS OR 18 WAIT UNTIL YOU PUT YOUR CASE ON? 19 MR. WAIER: I WAS GOING TO CALL HIM BACK IN ANY EVENT. 20 I WOULD BE HAPPY TO ASK HIM SOME QUESTIONS NOW IF -- 21 THE COURT: IT’s UP TO YOU. IT DOESN'T MATTER. WE 22 STILL HAVE THE OTHER WITNESS HERE. 23 MR. BEUGELMANS: HE’s BEEN WAITING ALL AFTERNOON. 24 THE COURT: MARCELLUS. IT’s YOUR OPTION, REALLY. 25 MR. WAIER: YOUR HONOR, THEN I WILL RESERVE MY DIRECT 26 EXAMINATION OF MR. CARTO UNTIL WE PUT ON OUR CASE. 27 THE COURT: HAVE A SEAT, AND THANK YOU. IF YOU WOULD 28 LIKE TO HAVE A SEAT WITH COUNSEL THERE.
page 126 1 CALL MR. MARCELLUS BACK. 2 3 THOMAS MARCELLUS, 4 CALLED AS A WITNESS ON BEHALF OF THE PLAINTIFF, HAVING BEEN 5 PREVIOUSLY SWORN, TESTIFIED AS FOLLOWS: 6 DIRECT EXAMINATION (CONTINUED) 7 BY MR. MUSSELMAN: 8 Q MR. MARCELLUS, THIS MORNING YOU WERE TESTIFYING 9 CONCERNING AN AMOUNT OF MONEY THAT WENT FROM THE LEGION TO 10 THE FOUNDATION TO DEFEND THE FIRST AMENDMENT. WE DIDN'T 11 DISCUSS THE AMOUNT, THE PRECISE AMOUNT OR THE MAGNITUDE 12 EITHER. DO YOU KNOW HOW MUCH MONEY WENT FROM THE LEGION TO 13 THE FOUNDATION TO DEFEND THE FIRST AMENDMENT? 14 MR. WAIER: OBJECTION. LACKS FOUNDATION. CALLS FOR 15 SPECULATION. NOT THE BEST EVIDENCE. 16 THE COURT: OVERRULED. 17 THE WITNESS: YES, IT WAS APPROXIMATELY $90,000. 18 19 BY MR. MUSSELMAN: 20 Q WHEN WAS THAT? 21 A THAT WAS 1984 THROUGH 19 — IT WOULD BE 1985 AND 22 EARLY 1986, PERHAPS LATE 1984. 23 Q PRIOR TO YOUR MEETING MISS JEAN FARREL IN 1984, 24 HAD YOU HAD ANY DEALINGS WITH HER? 25 A YES. WE HAD A VIGOROUS CORRESPONDENCE. 26 Q HOW DID THAT GET STARTED? 27 A IT GOT STARTED WHEN SHE WROTE TO THE LEGION, WROTE 28 TO THE I.H.R., THE LEGION. I READ THE CORRESPONDENCE AND
page 127 1 RETURNED IT, AND WE BEGAN A CORRESPONDENCE THAT WAY. 2 Q PRIOR TO HER MAKING ANY CONTRIBUTIONS TO THE 3 LEGION, HAD THE LEGION RAISED MONEY FROM ANYBODY ELSE? 4 A OH, YES. 5 Q WHAT’s THE MOST AMOUNT OF MONEY RAISED FOR ONE 6 PARTICULAR PURPOSE? 7 A 120,000. 8 Q WHAT DID YOU RAISE THAT FOR? 9 A BUILDING FUND. 10 Q YOU SAY “BUILDING FUND.” WHAT DO YOU MEAN? 11 A IN 1984, THE LEGION WAS BURNED DOWN AND THE 12 OFFICES WERE BURNED DOWN. SO WE COMMENCED A BUILDING FUND 13 IN THEN, JULY 1984, TO RAISE FUNDS FOR A NEW BUILDING. 14 Q HOW LONG A PERIOD DID IT TAKE TO RAISE THE FUNDS? 15 A 3 TO 4 MONTHS. 16 Q AT THE END OF 1984, DID THE LEGION HAVE ANY CASH 17 OR OTHER ASSETS? 18 MR. WAIER: OBJECTION. LACKS FOUNDATION. NOT THE BEST 19 EVIDENCE. CALLS FOR SPECULATION. HEARSAY. 20 THE COURT: OVERRULED. 21 THE WITNESS: YES, IT DID. 22 23 BY MR. MUSSELMAN: 24 Q DO YOU KNOW WHAT APPROXIMATE AMOUNT IT HAD IN 25 ASSETS? 26 A WITH INVENTORY AND CASH, I WOULD SAY IN THE 27 NEIGHBORHOOD OF 150,000. 28 Q DOES THAT DOLLAR NUMBER INCLUDE THE FARREL ESTATE?
page 128 1 A NO. 2 Q AT THE END OF 1985, DID LEGION HAVE ANY ASSETS 3 BESIDES THE FARREL LITIGATION OR THE FARREL ASSETS? 4 A YES. 5 Q YOU KNOW THE APPROXIMATE DOLLAR VALUE IT HAD IN 6 ASSETS AT THAT TIME? 7 MR. WAIER: OBJECT. LACKS FOUNDATION. CALLS FOR 8 SPECULATION. HEARSAY. 9 THE COURT: OVERRULED. 10 THE WITNESS: APPROXIMATELY 150,000 TO $200,000. 11 12 BY MR. MUSSELMAN: 13 Q THE END OF 1987, DID THE LEGION HAVE ANY ASSETS 14 BESIDES THE FARREL ASSETS? 15 A YES. 16 Q DO YOU KNOW THE APPROXIMATE VALUE OF THE ASSETS IT 17 HELD THEN? 18 MR. WAIER: OBJECTION. LACKS FOUNDATION. CALLS FOR 19 HEARSAY. SPECULATION. 20 THE COURT: OVERRULED. 21 MR. WAIER: MAY I BE HEARD ON THAT? 22 THE COURT: NO. 23 THE WITNESS: AGAIN, IT WOULD BE BETWEEN 150,000 AND 24 $200,000. 25 26 BY MR. MUSSELMAN: 27 Q HOW ABOUT THE END OF 1988? 28 A SAME.
page 129 1 Q HOW ABOUT THE END OF 1989? 2 MR. WAIER: OBJECTION AGAIN. HEARSAY. LACKS 3 FOUNDATION. SPECULATION. 4 THE COURT: OVERRULED. 5 THE WITNESS: 150,000. 6 7 BY MR. MUSSELMAN: 8 Q AND THE APPROXIMATE AMOUNT AT THE END OF 1990? 9 A JUST OVER 200,000 AT THAT TIME. 10 Q HOW ABOUT THE END OF 1991? 11 A 200,000. 12 Q HOW ABOUT THE END OF 1992? 13 A 200,000. 14 Q DID MR. CARTO EVER REVEAL TO YOU THE VALUE OF 15 NECA’s ASSETS? 16 A YES. 17 Q WHEN WAS THAT? 18 A FIRST IN 1985 AFTER JEAN FARREL’s DEATH AND THEN 19 ON SEVERAL OCCASIONS BETWEEN THEN AND 1993. 20 Q DID HE EVER TELL YOU IT WAS NECESSARY TO GO BORROW 21 MONEY TO PROSECUTE THE FARREL LITIGATION? 22 A NO, NOT THAT I RECALL. 23 Q DID HE EVER TELL YOU IT WAS NECESSARY TO HAVE A 24 FUND-RAISING CAMPAIGN TO RAISE THE MONEY FOR THAT PURPOSE? 25 A NO. 26 Q LOOK AT EXHIBIT 9, PLEASE, THE DATE AT THE TOP OF 27 SEPTEMBER 7 — I'M SORRY. MAYBE EXHIBIT 10, SEPTEMBER 7, 28 1985.
page 130 1 A I HAVE IT. 2 Q IS THAT EXHIBIT 10 IN YOUR BOOK? 3 A YES. EXHIBIT 9, I BELIEVE, IN MY BOOK. 4 Q HAVE YOU EVER SEEN THAT BEFORE? 5 A YES. 6 Q WHEN WAS THAT? 7 A I SAW IT IN 1993. 8 Q DID YOU EVER SIGN SUCH A DOCUMENT OR ORIGINAL OF 9 SUCH A DOCUMENT? 10 A NO. 11 Q WHAT WERE THE CIRCUMSTANCES OF YOU SEEING IT IN 12 1993? 13 A IT WAS DOCUMENTS OBTAINED IN CONJUNCTION WITH THE 14 LEGION STAFF’s INVESTIGATION OF MR. Carto’s LEGAL STANDING 15 WITH THE CORPORATION. MANY OF THESE DOCUMENTS CAME FROM THE 16 NORTH CAROLINA CASE. I BELIEVE — THIS, I BELIEVE, COULD 17 HAVE BEEN AMONG THEM. THAT IS THE MOST LIKELY SOURCE OF 18 IT. 19 MR. WAIER: I AM GOING TO OBJECT. MOVE TO STRIKE. 20 SPECULATION. 21 THE COURT: OVERRULED. 22 23 BY MR. MUSSELMAN: 24 Q WOULD YOU LOOK AT EXHIBIT 10, PLEASE. 25 A MINUTES OF SEPTEMBER 19, '85? 26 Q YES. HAVE YOU SEEN THAT PARTICULAR SET OF MINUTES 27 BEFORE? 28 A YES, I HAVE.
page 131 1 Q WHEN WAS THAT? 2 A IT WAS, AGAIN, I BELIEVE, 1993 OR COULD HAVE BEEN 3 1994. 4 Q DID MR. CARTO TELL YOU THAT HE HAD BEEN EMPOWERED 5 BY THE LEGION TO SECURE NECA FOR HIS OWN PERSONAL BENEFIT? 6 A NO. 7 Q DID HE EVER TELL YOU PRIOR TO 1993 THAT HE HAD 8 BEEN EMPOWERED TO DISTRIBUTE THE MONEY TO WHOMEVER HE SAW 9 FIT, THE FARREL MONIES? 10 A PRIOR TO 1993? 11 Q YES. 12 A NOT PRIOR TO 1993, NO. 13 Q DO YOU KNOW WHO HENRY FISCHER IS? 14 A YES. 15 Q WHO IS IT? 16 A HENRY FISCHER IS A MAN WHOM CARTO, MR. CARTO, ON 17 SEVERAL OCCASIONS BROUGHT INTO THE OFFICES AND INTRODUCED 18 MR. FISCHER TO ME AS A FRIEND OF MR. Carto’s. AND FIRST 19 TIME WAS — I MET MR. FISCHER WAS PROBABLY 1987. 20 Q COULD YOU LOOK AT EXHIBIT 11, PLEASE, SAYS AT THE 21 TOP “SEPTEMBER 20, 1985 POWER OF ATTORNEY." 22 A ALL RIGHT. 23 Q HAVE YOU EVER SEEN THAT BEFORE? 24 A I HAVE. 25 Q WHEN WAS THAT? 26 A AGAIN, 1993 WHEN I SAW MANY OF THESE KIND OF 27 DOCUMENTS. 28 Q WILL YOU LOOK AT EXHIBIT 12, WHICH HAS THE SAME
page 132 1 DATE. 2 A OKAY. 3 Q HAVE YOU EVER SEEN THAT? 4 A I DON'T RECALL SEEING THIS ONE SPECIFICALLY, NO. 5 Q LOOK AT EXHIBIT 15, PLEASE, ENTITLED “COMPLAINT." 6 A OKAY. 7 Q 15, HAVE YOU SEEN THAT BEFORE? 8 A YES. 9 Q WHEN WAS THAT? 10 A THIS WAS IN 1993 AFTER MR. CARTO HAD BEEN — HIS 11 RELATIONSHIP WITH THE LEGION HAD BEEN TERMINATED. 12 Q PRIOR TO SEEING THAT IN THAT YEAR, HAD YOU EVER 13 DISCUSSED WITH HIM THE CONTENTS OF EXHIBIT 15? 14 A I HAVE NO IDEA OF ANYTHING GOING ON IN NORTH 15 CAROLINA OR THIS CASE, SO THE ANSWER IS NO. 16 Q COULD YOU LOOK AT EXHIBIT 21, PLEASE. DOES YOUR 17 EXHIBIT HAVE A DATE OF MARCH 3RD, 1987, AT THE TOP? 18 A IT DOES. 19 Q HAVE YOU EVER SEEN THAT BEFORE? 20 A LET ME BRIEFLY REVIEW. 21 YES, I HAVE SEEN THIS. 22 Q WHEN WAS THAT? 23 A THIS WAS — I'M NOT CLEAR ON THE YEAR, '83 OR 24 '84. AND IT CAME TO THE LEGION FOLLOWING DEMAND FOR 25 PRODUCTION OF DOCUMENTS MADE ON MR. CARTO IN CONJUNCTION 26 WITH A LITIGATION. THIS WAS, I BELIEVE, AMONG THE DOCUMENTS 27 HE PRODUCED. 28 Q WHAT YEAR WAS THAT?
page 133 1 A '93 OR '94. 2 Q IN 1987, DID MR. CARTO DISCUSS WITH YOU THAT A 3 SETTLEMENT WAS GOING TO BE REACHED SOON IN THE SWISS 4 LITIGATION? 5 A NO, I DON'T BELIEVE THERE WAS A DISCUSSION WHERE 6 HE SAID THAT. 7 Q DID HE TELL YOU THAT THE LEGION HAD BECOME HEAVILY 8 INDEBTED BECAUSE OF THE LEGAL EXPENSES FROM THE LITIGATION? 9 A NO. 10 Q LOOK AT EXHIBIT 23, PLEASE, DATED MARCH 1, 1988. 11 TELL ME WHETHER YOU HAVE SEEN THAT BEFORE. 12 A MARCH 1, '88. LET ME REVIEW IT A SECOND. 13 YES, I HAVE SEEN THIS. 14 Q WHEN WAS THAT? 15 A AGAIN, 1993, WHEN I SAW MANY OF THESE MINUTES. 16 Q WHERE DID YOU SEE IT? 17 A THE OFFICE OF THE LEGION. 18 Q WOULD YOU LOOK AT EXHIBIT 27, PLEASE, DATED 19 MARCH 7, 1989. TELL ME IF YOU HAVE SEEN THAT BEFORE. 20 A YES, I HAVE SEEN THAT. 21 MR. WAIER: WHAT EXHIBIT IS THAT AGAIN? 22 MR. MUSSELMAN: 27. 23 24 BY MR. MUSSELMAN: 25 Q WHEN WAS THAT? 26 A THIS WAS ANOTHER OF THOSE COPIES OF MINUTES THAT I 27 SAW IN '93 OR '94 AFTER MR. Carto’s RELATIONSHIP WITH THE 28 LEGION HAD BEEN TERMINATED.
page 134 1 Q LOOK AT EXHIBIT 25. IT STATES THAT IT’s STATEMENT 2 BY — STATEMENT BY STOCK CORPORATION. 3 A YES. 4 Q HAVE YOU SEEN THAT BEFORE? 5 A YES. 6 Q WHEN WAS THAT? 7 A OH, I SAW THIS, I BELIEVE, AT THE TIME — IT WAS 8 AT OR ABOUT THE TIME IT WAS FILED. IT WOULD HAVE BEEN -- 9 NOT SURE WHAT YEAR. '88 OR '89, I SUPPOSE. 10 Q WOULD YOU LOOK AT EXHIBIT 28, DATED MARCH 6, 11 1990. 12 A I HAVE THAT. 13 Q TELL ME IF YOU HAVE SEEN THAT BEFORE. 14 MR. WAIER: 28. I DON'T HAVE THAT IN OUR EXHIBIT 15 BOOK. 16 MR. MUSSELMAN: MARCH 6, 1990 MINUTES. ONE IN EITHER 17 DIRECTION. 18 MR. WAIER: NO, I DON'T HAVE IT AT ALL. 19 MR. BEUGELMANS: MARCH 7 OR 6? 20 MR. MUSSELMAN: MARCH 6, 1990. 21 22 BY MR. MUSSELMAN: 23 Q TELL ME WHETHER YOU HAVE SEEN THAT. 24 A I HAVE SEEN THIS ONE, YES. 25 Q WHEN WAS THAT? 26 A THIS WAS IN 1993. 27 Q AGAIN, WHERE? 28 A AT THE OFFICE OF THE LEGION.
page 135 1 Q LOOK AT EXHIBIT 29, THE SETTLEMENT AGREEMENT. 2 A I SEE IT. 3 Q HAVE YOU SEEN THAT BEFORE? 4 A YES, I HAVE. 5 Q WHEN WAS THE FIRST TIME YOU SAW IT? 6 A I BELIEVE IT WAS THE SUMMER OF 1993 AT THE LEGION 7 OFFICES. 8 Q PRIOR TO SEEING IT, HAVE YOU HAD ANY DISCUSSION 9 ABOUT IT WITH MR. CARTO? 10 A NO, NOT ABOUT THE SETTLEMENT AGREEMENT, NO. 11 Q COULD YOU LOOK AT EXHIBIT 30 AND TELL ME, HAVE YOU 12 SEEN THAT? 13 A YES, I HAVE SEEN THIS. 14 Q WHEN WAS THAT? 15 A 1993. 16 Q PRIOR TO SEEING IT IN 1993, HAD YOU HAD ANY 17 DISCUSSIONS ABOUT IT WITH MR. CARTO? 18 A NO. 19 Q LOOK AT EXHIBIT 20, DISTRIBUTION AGREEMENT. 20 A 20? 21 Q YES. 22 A YES, I HAVE SEEN THIS. 23 Q WHEN WAS THAT? 24 A 1993. 25 Q PRIOR TO SEEING IT IN 1993, DID YOU HAVE ANY 26 DISCUSSIONS ABOUT IT WITH MR. CARTO? 27 A NO. 28 Q PRIOR TO 1993, DID MR. CARTO EVER GIVE YOU AN
page 136 1 ACCOUNTING OF THE MONIES THAT WERE GENERATED BY THE 2 SETTLEMENT OF THE FARREL LITIGATION? 3 MR. WAIER: OBJECTION. RELEVANCY. 4 THE COURT: OVERRULED. 5 THE WITNESS: A VERBAL ACCOUNTING, YES, A ROUGH VERBAL 6 ACCOUNTING. 7 8 BY MR. MUSSELMAN: 9 Q DID HE PROVIDE TO YOU ANY DOCUMENTATION TO 10 DEMONSTRATE WHICH ATTORNEYS HAD BEEN PAID? 11 A NO. 12 Q TO THIS DAY, DO YOU KNOW HOW MUCH THE TOTAL SUM OF 13 ATTORNEYS FEES WERE FOR THE LITIGATION? 14 A I DO NOT. 15 Q DID HE PROVIDE YOU ANY DOCUMENT DEMONSTRATING HOW 16 MUCH TAXES HAD BEEN PAID? 17 A NO. 18 Q TO THIS DATE, DO YOU KNOW HOW MUCH TAXES WERE PAID 19 AS A RESULT OF THE LITIGATION IN EUROPE? 20 A NO. 21 Q WILL YOU LOOK AT EXHIBIT 31. TELL ME IF YOU HAVE 22 SEEN THAT BEFORE, A RIDER TO THE DISTRIBUTION AGREEMENT. 23 A YES, I HAVE SEEN THIS. 24 Q WHEN WAS THAT? 25 A THAT WAS — WOULD BE THE SAME TIME, IN SUMMER, 26 FALL, 1993. 27 Q PRIOR TO THAT, DID YOU HAVE ANY DISCUSSIONS ABOUT 28 IT WITH MR. CARTO?
page 137 1 A NO. 2 Q MR. CARTO EVER SHOW YOU ANY SIGNATURE CARDS 3 DEMONSTRATING WHO HAD SIGNATORY POWERS OVER ANY ACCOUNT AT 4 BANQUE CANTRADE LAUSANNE? 5 A NO. 6 Q HAS HE SHOWED YOU ANY BANK STATEMENTS FROM SUCH 7 ACCOUNT? 8 A NO. 9 Q HAS HE EVER SHOWN YOU ANY BOARD OF DIRECTORS' 10 RESOLUTIONS AUTHORIZING THE OPENING OF SUCH ACCOUNT? 11 A NO. 12 Q HAS MR. CARTO EVER TOLD YOU WHETHER MR. FISCHER 13 WAS PAID IN CONNECTION WITH MR. FISCHER’s EFFORTS IN THE 14 FARREL LITIGATION? 15 A NO. 16 Q COULD YOU LOOK AT EXHIBIT 35, PLEASE, JANUARY 9, 17 1991. 18 A OKAY. 19 Q HAVE YOU SEEN THAT BEFORE? 20 A I DON'T BELIEVE SO. 21 Q DID HE TELL YOU IN JANUARY — DID MR. CARTO TELL 22 YOU IN JANUARY 1991 THAT THE LEGION WOULD SOON BE ABLE TO 23 PAY ITS MANY DEBTS THAT HAD BEEN INCURRED OVER THE LAST 5 24 YEARS FOR ATTORNEYS IN CONNECTION WITH THE FARREL 25 LITIGATION? 26 A NOT FOR ATTORNEYS, NO. 27 Q COULD YOU LOOK AT EXHIBIT 36, WHICH IS ENTITLED 28 “POWER OF ATTORNEY.” TELL ME IF YOU HAVE SEEN THAT
page 138 1 BEFORE. 2 A YES. 3 Q WHEN WAS THAT? 4 A 1993. 5 Q WHERE WAS THAT? 6 A IN THE LEGION OFFICES. 7 Q PRIOR TO 1993, DID MR. CARTO EVER DISCUSS WITH YOU 8 THIS DOCUMENT? 9 A NO. 10 Q LOOK AT EXHIBIT 37, PLEASE, WHICH STATES “POWER OF 11 ATTORNEY” AT THE TOP, MAKES REFERENCE TO HENRY FISCHER. 12 A OKAY. 13 Q HAVE YOU SEEN THAT BEFORE? 14 A YES. 15 Q WHEN WAS THAT? 16 A AGAIN, I SAW THIS IN 1993. 17 Q IN 1991, DID MR. CARTO TELL YOU MR. FISCHER HAD 18 BEEN GIVEN A POWER OF ATTORNEY TO SECURE THE FARREL ESTATE 19 ASSETS OR NECA FOR THE LEGION? 20 A I'M SORRY, I DIDN'T UNDERSTAND THE FIRST PART OF 21 THAT QUESTION. 22 Q IN 1991, DID MR. CARTO DISCUSS WITH YOU THAT 23 MR. FISCHER HAD BEEN GRANTED A POWER OF ATTORNEY TO HELP 24 SECURE THE FARREL ASSETS FOR THE LEGION? 25 A NO. 26 Q LOOK AT EXHIBIT 38, PLEASE, A LETTER DATED 15 27 FEBRUARY 1991. TELL ME IF YOU HAVE SEEN THAT BEFORE. 28 A YES, I HAVE.
page 139 1 Q WHEN WAS THE FIRST TIME? 2 A I BELIEVE IT WAS IN LATE 1993 AFTER WE HAD 3 SECURED — OBTAINED SOME OF THE DOCUMENTS FROM VIBET AND 4 COMPANY. THIS WAS MONEY — THEN THAT’s WHEN I SAW IT. 5 Q LOOK AT EXHIBIT 39, DATED 21ST FEBRUARY 1991. 6 TELL ME WHEN — IF YOU HAVE EVER SEEN THAT. 7 A I DON'T BELIEVE I HAVE EVER SEEN THIS DOCUMENT. 8 Q COULD YOU LOOK AT EXHIBIT 40, DATED 22ND FEBRUARY 9 1991. LET ME KNOW IF YOU HAVE SEEN THAT BEFORE. 10 A I DON'T BELIEVE I HAVE. 11 Q LOOK AT EXHIBIT 41. PLEASE TELL ME IF YOU HAVE 12 SEEN IT BEFORE. 13 A YES, I HAVE. 14 Q WHEN WAS THAT? WHEN WAS THE FIRST TIME? 15 A 1993. 16 Q PRIOR TO 1993, DID MR. CARTO EVER TELL YOU THAT 17 THE LEGION HAD DECIDED NOT TO ACCEPT THE FARREL ASSETS? 18 A NO. 19 Q LOOK AT EXHIBIT 45, PLEASE, A LETTER DATED 20 MARCH 23, 1991. 21 A I HAVE IT. 22 Q HAVE YOU EVER SEEN THAT BEFORE? 23 A YES, I HAVE. 24 Q WHEN WAS THE FIRST TIME? 25 A JULY OF '93. 26 Q PRIOR TO 1993, DID YOU EVER DISCUSS WITH MR. CARTO 27 THAT THE LEGION HAD ESTABLISHED AN ENTITY CALLED THE 28 INTERNATIONAL LEGION FOR THE SURVIVAL OF THE FREEDOM TRUST?
page 140 1 A NO, I WASN'T AWARE OF SUCH AN ENTITY. 2 Q LOOK AT EXHIBIT 46, PLEASE, DATED 5 JUNE 1991. 3 A OKAY. 4 Q HAVE YOU SEEN THAT BEFORE? 5 A YES. 6 Q WHEN WAS THE FIRST TIME? 7 A 1993, 1994. 8 Q COULD YOU LOOK AT EXHIBIT 48, PLEASE, DATED 9 MARCH 10, 1992. 10 A OKAY. LET ME LOOK AT IT A SECOND. 11 OH, YES, I REMEMBER THIS ONE WELL. 12 Q HAVE YOU SEEN IT BEFORE? 13 A YES. 14 Q WHEN WAS THE FIRST TIME? 15 A I SAW IT IN — IT WAS 1993, 1994 IN CONNECTION 16 WITH THE PRODUCTION OF DOCUMENTS DEMANDED OF MR. CARTO IN 17 SOME LITIGATION. THIS WAS AMONG THE DOCUMENTS. 18 Q THERE’s A REFERENCE TO YOUR NAME -- 19 A YES. 20 Q — HAVING BEEN PRESENT AT THE MEETINGS THAT'S 21 RECITED BY THE DOCUMENT. WERE YOU PRESENT AT SUCH A 22 MEETING? 23 A I WAS NOT. 24 Q HAS ANYONE ASKED YOU TO APPROVE LEGION BOARD 25 MINUTE MEETINGS OF MARCH 3, 1991? 26 A NO. 27 Q HAS ANYONE ASKED YOU TO APPROVE THESE MINUTES? 28 A NO.
page 141 1 Q LOOK AT EXHIBIT 49, PLEASE, DATED DECEMBER 9, 2 1992. LET ME KNOW IF YOU HAVE SEEN THAT BEFORE. 3 A YES. 4 Q WHEN WAS THE FIRST TIME? 5 A AGAIN, THIS WAS AMONG THE DOCUMENTS THAT WERE 6 OBTAINED, I BELIEVE, IN THE DEMAND FOR PRODUCTION OF 7 DOCUMENTS. I SAW IT FIRST, I THINK, IN 1993 OR EARLY 1994 8 AT THE LEGION OFFICES. 9 Q LOOK AT EXHIBIT 51, PLEASE, DATED MARCH 2ND, 10 1993. TELL ME WHETHER YOU HAVE SEEN THAT BEFORE. 11 A I DON'T RECALL SEEING THIS DOCUMENT BEFORE. 12 Q DID MR. CARTO EVER TELL YOU THAT THE FARREL ASSETS 13 FOR — THE PROCEEDS OF THE FARREL ASSETS WERE BEING 14 TRANSFERRED TO GOOD CAUSES? 15 A YES. 16 Q WHEN WAS THAT? 17 A THAT WOULD BE ON OR ABOUT JULY OF 1993. 18 Q DID HE SHOW YOU DOCUMENTS DEMONSTRATING THAT TO BE 19 THE CASE? 20 A NO. 21 Q DID YOU HAVE ANY DISCUSSIONS WITH LAVONNE FURR ON 22 THAT SUBJECT AFTER HE TALKED TO YOU ABOUT IT? 23 A SUBSEQUENT TO THAT, YES, I DID. 24 Q WHEN WAS THAT? 25 A THAT WOULD HAVE BEEN DURING THE PERIOD, I WOULD 26 SAY, FROM JULY TO SEPTEMBER 1993. 27 Q COULD YOU LOOK AT EXHIBIT 52, PLEASE, STATES “MEMO 28 TO FILE."
page 142 1 MR. WAIER: WHAT? 2 MR. MUSSELMAN: 52. 3 THE WITNESS: I HAVE IT. 4 5 BY MR. MUSSELMAN: 6 Q HAVE YOU SEEN THAT BEFORE? 7 A YES, I HAVE. 8 Q WHEN DID YOU FIRST SEE IT? 9 A I WROTE IT. 10 Q WHEN DID YOU WRITE IT? 11 A I WROTE IT ON JUNE 18, 1993. THAT’s MY 12 HANDWRITING ON THE TOP NOTING THE DATE. 13 Q DID YOU SPEAK TO LAVONNE FURR ON THAT DAY? 14 A YES. 15 Q DOES THE CONTENTS OF EXHIBIT 52 REPEAT THE 16 CONVERSATION? 17 A YES. 18 Q WERE YOU RECORDING IT DURING THE CONVERSATION? 19 A THE ANSWER TO THAT IS NO. 20 Q DID YOU PREPARE IT SOON THEREAFTER? 21 A YES. 22 Q WHAT DID YOU DO WITH THE MEMO AFTER YOU PREPARED 23 IT? 24 A I GAVE COPIES TO THE OTHER STAFF MEMBERS WHO WERE 25 INVOLVED IN THIS INVESTIGATION OF MR. Carto’s LEGAL STANDING 26 WITH THE CORPORATION. 27 Q LOOK AT EXHIBIT 53, PLEASE, A LETTER DATED 28 JUNE 22ND, 1993.
page 143 1 A I HAVE IT. 2 Q HAVE YOU SEEN THAT BEFORE? 3 A YES. 4 Q WHEN DID YOU FIRST SEE IT? 5 A I WROTE THIS LETTER ON JUNE 22ND, 1993. 6 Q DID YOU SEND IT? 7 A YES. 8 Q WHY DID YOU WRITE THE LETTER? 9 A LET ME REVIEW IT QUICKLY. 10 MR. WAIER: I AM GOING TO OBJECT TO RELEVANCY. 11 THE COURT: OVERRULED. 12 THE WITNESS: THERE WERE 2 REASONS FOR WRITING THIS 13 LETTER TO LAVONNE FURR, 2 DISTINCT AND SEPARATE REASONS. 14 15 BY MR. MUSSELMAN: 16 Q WHAT WERE THEY? 17 A ONE WAS MR. CARTO HAD — HAD PROMPTED THE LEGION 18 TO PUBLISH A BOOK, AGAINST THE RECOMMENDATIONS OF THE 19 STAFF. AND THE LEGION WAS SUBSEQUENTLY SUED BY THE AUTHOR 20 OF THAT BOOK OR AT LEAST THE PERSON WHO CLAIMED TO BE THE 21 AUTHOR OF THAT BOOK. AND THE LEGION WAS INVOLVED IN 22 LITIGATION, AND I WAS PERSONALLY NAMED IN THE SUIT. AND SO 23 I ASKED MR. CARTO TO SIGN AN AGREEMENT INDEMNIFYING ME IN 24 THE LAWSUIT. IN OTHER WORDS, IF A JUDGMENT WAS RENDERED 25 AGAINST ME PERSONALLY, THE LEGION WOULD PAY IT. 26 AFTER HE SIGNED THAT AGREEMENT, I THEN SPOKE WITH 27 MRS. FURR BECAUSE I WAS QUITE WORRIED ABOUT THIS AND ASKED 28 HER IF THAT SIGNATURE OF WILLIS ON THAT INDEMNITY AGREEMENT
page 144 1 WAS LAWFUL OR VALID. AND SHE SAID NO, TO SEND THE INDEMNITY 2 AGREEMENT TO HER AND SHE WOULD SIGN IT. THAT WAS THE FIRST 3 REASON. 4 Q WHAT WAS THE SECOND REASON? 5 A THE SECOND REASON WAS AT THIS TIME, WE WERE 6 PERFORMING THIS INVESTIGATION TO DETERMINE MR. Carto’s LEGAL 7 STANDING WITH THE CORPORATION. 8 Q WHEN YOU SAY “WE,” WHO IS “WE"? 9 A TED O’Keefe, GREG RAVEN, MARK WEBER AND MYSELF. 10 Q WHO ARE THOSE PERSONS OTHER THAN YOURSELF? 11 A TED O’Keefe, AT THE TIME, WAS AN EDITOR EMPLOYED 12 BY THE LEGION. MARK WEBER WAS AN EDITOR AND STILL IS 13 EMPLOYED BY THE LEGION. AND GREG RAVEN, AT THAT TIME, WAS 14 ASSISTANT EDITOR, IS STILL EMPLOYED BY THE LEGION. 15 Q OTHER THAN THESE PEOPLE, WERE THERE ANY — WAS 16 THERE ANYONE OTHER THAN CLERICAL STAFF? 17 A I BELIEVE JUST THE FOUR OF US OUTSIDE OF THE 18 CLERICAL STAFF. 19 Q I'M SORRY, I INTERRUPTED YOU WHEN YOU WERE 20 DESCRIBING THE SECOND PURPOSE OF THE LETTER. 21 A THE REASON I WROTE THIS, THE SECOND REASON WAS 22 BECAUSE FOR SOME REASON IN — DURING THE EARLY SUMMER, THE 23 LATE SPRING, EARLY SUMMER OF 1993, MR. CARTO GOT WHAT WE 24 CALL A BEE IN HIS BONNET. HE WAS VERY ANXIOUS TO — TO 25 OVERHAUL THE WHOLE EDITORIAL DIRECTION OF THE INSTITUTE AND 26 THE JOURNAL. THERE WERE THREATS MADE THAT MR. WEBER WAS 27 GOING TO BE REMOVED AS EDITOR. THERE WAS A DISCUSSION WITH 28 MR. CARTO. HE SAID SPECIFICALLY HE WAS GOING TO TRY TO
page 145 1 REPLACE MR. WEBER. HE WOULD NOT TELL ME — MR. CARTO WOULD 2 NOT TELL ME THE REASON WHY HE WAS CAUSING ENORMOUS UPSET. 3 THE WHOLE ORGANIZATION WAS UPSET. WE WERE ALL PREPARING TO 4 LEAVE THE ORGANIZATION IF MR. CARTO FIRED MR. WEBER. 5 MR. WAIER: OBJECTION. MOVE TO STRIKE. CALLING FOR 6 HEARSAY. NONRESPONSIVE. 7 THE COURT: OVERRULED. 8 THE WITNESS: I WAS VERY INTERESTED AT THAT POINT IN 9 TIME TO FIND OUT EXACTLY WHAT AUTHORITY MR. CARTO HAD TO 10 CHANGE THE EDITORIAL DIRECTION OF THE ORGANIZATION AND 11 TO — TO FIRE PEOPLE. I WAS THE DIRECTOR; I HAD TO KNOW 12 THIS. I HAD TO FIND OUT IF HE HAD CORPORATE STANDING TO DO 13 THESE KIND OF THINGS. I WAS ALSO APPEALING TO MRS. FURR TO 14 TAKE A LITTLE CLOSER LOOK AT WHAT IS GOING ON WITH THE 15 ORGANIZATION. I WAS POINTING OUT TO HER THAT MR. CARTO HAD 16 DIRECTED ME TO REPRINT A COUPLE OF BOOKS THAT WE HAD BEEN 17 SUED ON — WE HAD THREATENED TO BE SUED ON BY THE COPYRIGHT 18 OWNERS, AND I WANTED HER HELP AND ADVICE. 19 20 BY MR. MUSSELMAN: 21 Q THE BOTTOM OF EXHIBIT 53, THE SECOND TO THE LAST 22 PARAGRAPH, PART OF THE SENTENCE SAYS “I NEED TO KNOW WHERE 23 WILLIS STANDS." 24 DO YOU HAVE ANY RECOLLECTION WHAT YOU INTENDED BY 25 THAT PHRASE WHEN YOU USED IT? 26 A YES. 27 Q WHAT IS IT? 28 A I INTENDED TO GET AN ANSWER FROM LAVONNE AS TO
page 146 1 WHAT MR. Carto’s LEGAL STANDING WAS WITH THE CORPORATION, 2 WHAT SHE — WHAT THE CORPORATION ACTUALLY AUTHORIZED HIM TO 3 DO. 4 Q LOOK AT EXHIBIT 54, PLEASE, DATED JULY 13, 1993. 5 A YES. 6 Q TELL ME IF YOU HAVE SEEN THAT BEFORE. 7 A YES, I WROTE THIS. 8 Q WHEN DID YOU WRITE IT? 9 A JULY 13, 1993. 10 Q THERE’s A REFERENCE IN THE FIRST SENTENCE TO 11 ELISABETH. WHO IS THAT? 12 A ELISABETH CARTO, MR. Carto’s WIFE. 13 Q DID YOU HAVE ANY CONVERSATIONS WITH HER ON JULY 14 13, 1993? 15 A YES. 16 Q DOES THIS MEMO REPEAT THE CONVERSATIONS? 17 A LET ME REFRESH MY MEMORY. 18 YES. 19 Q AND THE FOURTH PARAGRAPH, AS OF OCTOBER 1992, THAT 20 SENTENCE, IS THAT SOMETHING SHE TOLD YOU OR YOU TOLD HER? 21 A THIS IS WHAT SHE TOLD ME. 22 Q DID SHE USE THE EXACT WORDS, “AS OF OCTOBER 1992, 23 LIBERTY LIFE LINE 158,000"? 24 A NO. THAT’s MY PARAPHRASING WHAT SHE SAID TO ME. 25 Q DID SHE USE THE EXACT WORDS, “LEGION OWED F.D.F.A. 26 $30,000"? 27 A I'M SORRY, I DON'T RECALL IF SHE USED THOSE EXACT 28 WORDS.
page 147 1 Q OR “THE LEGION OWED HISTORICAL EDUCATION 2 FOUNDATION $58,000"? 3 A NO. I BELIEVE THIS WAS ALL IN THE CONTEXT OF HER 4 NARRATING TO ME WHAT SHE WANTED ME TO BELIEVE THE LEGION 5 OWED, AND I WAS SIMPLY REPEATING IT HERE. 6 Q DID SHE TELL YOU THAT THE LEGION OWED VIBET 7 $250,000? 8 A IN SO MANY WORDS, YES. 9 Q DID SHE TELL YOU WHY THERE WAS THAT DEBT? 10 A YES. SHE HAD EXPLAINED TO ME, EITHER ON THAT 11 OCCASION OR EARLIER, WHAT THE NATURE OF THIS, QUOTE, 12 UNQUOTE, “DEBT” WAS. 13 Q DID SHE TELL YOU THE LEGION HAD IN FACT BORROWED 14 FUNDS OWNED BY VIBET? 15 A YES. 16 Q DID SHE SAY WHERE THE MONEY CAME FROM? 17 A YES. 18 Q WHERE WAS THAT? 19 A IT CAME FROM THE FARREL GIFT TO THE LEGION. 20 Q DID SHE TELL YOU WHY THE MONEY WAS BEING LOANED BY 21 VIBET TO THE LEGION? 22 A YES. 23 Q WHY WAS THAT? 24 A SHE CLAIMED THAT THE REASON THE MONEY WAS BEING 25 LOANED TO THE LEGION WAS TO MAKE IT APPEAR — TO APPEAR AS 26 A DEBT ON LEGION’s BOOKS IN ORDER TO, I SUPPOSE, PROTECT THE 27 LEGION AGAINST ANY CREDITORS THAT MIGHT ARISE OUT OF AN 28 ADVERSE LITIGATION OR ADVERSE JUDGMENT IN THE LITIGATION, TO
page 148 1 MAKE THE LEGION APPEAR BANKRUPT OR NEARLY BANKRUPT. 2 Q LOOK AT EXHIBIT 57, PLEASE, THE DATE OF 17 AUGUST 3 1993. 4 A I SEE IT. 5 THE CLERK: I MISSED THAT EXHIBIT NUMBER. 6 7 BY MR. MUSSELMAN: 8 Q 57. HAVE YOU SEEN THAT BEFORE? 9 A YES. 10 Q WHEN WAS THE FIRST TIME? 11 A IT WAS AROUND THE DATE THAT’s ON IT, AUGUST 1993. 12 Q WHERE WERE YOU? 13 A AT THE LEGION OFFICES. 14 Q DID YOU HAVE ANY DISCUSSIONS WITH MR. CARTO ABOUT 15 IT? 16 A NO. 17 Q EXHIBIT 55, PLEASE. IT DOESN'T HAVE A DATE, 18 STARTS OUT SAYING “MEMO OF TOM MARCELLUS, TELEPHONE 19 CONVERSATION WITH LAVONNE FURR." 20 A I HAVE IT. 21 Q HAVE YOU SEEN THAT BEFORE? 22 A YES. 23 MR. WAIER: I'M SORRY, WHAT EXHIBIT? 24 25 BY MR. MUSSELMAN: 26 Q 55. DID YOU COMPOSE THIS? 27 A I DID. 28 Q WHEN WAS THAT?
page 149 1 A IT WOULD HAVE BEEN ON AUGUST 21 OR ON THE 2 FOLLOWING DAY. 3 Q DID YOU HAVE A CONVERSATION WITH LAVONNE FURR ON 4 AUGUST 21, 1993? 5 A I DID. 6 Q DID SHE TELL YOU SHE AND HER HUSBAND HAD RECENTLY 7 FILED FOR BANKRUPTCY? 8 A YES. 9 Q DID SHE TELL YOU THAT SHE GOT $900, WHICH ENABLED 10 HER TO FILE BANKRUPTCY? 11 A YES. 12 Q DID SHE TELL YOU WHERE THE MONEY CAME FROM? 13 A I DON'T BELIEVE SO. I SPECULATED ON IT HERE, BUT 14 I DON'T THINK SHE TOLD ME. 15 Q DID SHE TELL YOU THAT SHE HAD NO INKLING OF HOW 16 MUCH MONEY THE LEGION FINALLY RECEIVED IN EUROPE? 17 A I'M SORRY, FINISH THE QUESTION. 18 Q THAT’s IT. 19 A SHE DID TELL ME. 20 MR. WAIER: OBJECT. LEADING. 21 THE COURT: WELL, IT IS, BUT IT’s THE ONLY WAY TO GET 22 TO IT. OVERRULED. 23 THE WITNESS: IT’s IN THE TEXT. 24 25 BY MR. MUSSELMAN: 26 Q DID SHE TELL YOU SHE HAD NO INKLING WHERE THE 27 MONEY IS OR HOW IT WAS BEING DISBURSED? 28 A THAT’s CORRECT.
page 150 1 Q WHAT DID SHE TELL YOU ABOUT WHETHER OR NOT WILLIS 2 CARTO COULD SPREAD THE MONEY AROUND TO GOOD CAUSES? 3 A SHE SAID — AND I QUOTED HER BECAUSE IT WAS SO 4 MEMORABLE. SHE SAID, “HE CAN'T DO THAT. IT’s NOT HIS 5 MONEY." 6 Q DID SHE OFFER ANY EXPLANATION ABOUT WILLIS'S 7 BEHAVIOR TO YOU? 8 A SHE INDICATED TO ME, TO MY SURPRISE, THAT SHE 9 THOUGHT IT MIGHT BE DUE TO WHAT SHE BELIEVE TO HAVE BEEN 10 SOME HEAVY FINANCIAL LOSSES THAT MR. CARTO HAD EXPERIENCED 11 AT LIBERTY LOBBY. 12 Q DID YOU HAVE ANY DISCUSSION WITH HER ABOUT WHAT 13 MR. Carto’s POWER WAS AT THE LEGION? 14 A SHE SAID SHE DIDN'T THINK HE HAD SUCH POWER. 15 Q DID YOU INFORM HER YOU HAD CONSULTED WITH AN 16 ATTORNEY? 17 A YES, I SEE THAT I DID MAKE A NOTE OF THAT HERE, 18 YES. SO I DID TELL HER THAT. 19 Q DID YOU TELL HER WHAT THE ATTORNEY HAD TOLD YOU 20 ABOUT WHAT A BOARD OF A NONPROFIT CORPORATION COULD DO IN 21 REFERENCE TO APPOINTING AGENTS? 22 A YES. 23 Q WHAT DID YOU TELL HER? 24 A I TOLD HER A NONPROFIT CORPORATION CANNOT APPOINT 25 AN AGENT TO RUN THE CORPORATION. THAT’s WHAT WE WERE TOLD 26 BY THE ATTORNEY. 27 MR. WAIER: I AM GOING TO OBJECT. MOVE TO STRIKE THE 28 LAST PHRASE, WHAT ATTORNEY SAYS, AS BEING HEARSAY.
page 151 1 THE COURT: SUSTAIN THE OBJECTION. 2 3 BY MR. BEUGELMANS: 4 Q LOOK AT EXHIBIT 56, PLEASE, DATED AUGUST 26, 5 1993. 6 A I SEE IT. 7 Q HAVE YOU SEEN THAT BEFORE? 8 A YES. 9 Q WHEN DID YOU SEE IT FIRST? 10 A I WROTE IT ON AUGUST 26, 1993. 11 Q WHAT CAUSED YOU TO WRITE IT? 12 A IT WAS A DISCUSSION WITH ELISABETH CARTO. 13 Q ABOUT WHAT? 14 A ABOUT THE FARREL ESTATE GIFT AND THE PROCEEDS AND 15 WHAT HAPPENED TO THEM. 16 Q DID SHE TELL YOU HOW MUCH OF THE FARREL ESTATE 17 PROCEEDS WAS GENERATED FOR THE LEGION? 18 A YES. 19 Q WHAT DID SHE SAY? 20 A SHE SAID APPROXIMATELY 4 MILLION — I'M SORRY, 21 YEAH, ORIGINALLY WORTH APPROXIMATELY 15 MILLION. AND 22 APPROXIMATELY 4 MILLION, SHE SAID, WAS TO GO TO THE LEGION. 23 THEN THERE WAS AN AFTER-TAX — SHE SAID SOMETHING, 2.75 24 MILLION AFTER TAX. THAT’s WHAT SHE TOLD ME. 25 Q DID SHE TELL YOU THERE WERE FUNDS THAT STILL 26 COULDN'T BE RELEASED TO THE LEGION? 27 A YES. 28 Q DID SHE TELL YOU WHO HAD THE FUNDS?
page 152 1 A YES. SHE -- 2 Q WHO? 3 A SHE MENTIONED THE NAME ROCHAT, WHICH IS “ROCHAT," 4 BUT I DIDN'T HEAR IT RIGHT. SO I THOUGHT I HEARD “ROSHAD." 5 Q COULD YOU TURN TO EXHIBIT 58, PLEASE. 6 HAVE YOU SEEN THAT BEFORE? 7 A YES. 8 Q DID YOU WRITE IT? 9 A YES. 10 Q DID YOU HAVE A CONVERSATION WITH LAVONNE FURR ON 11 AUGUST 27, 1993? 12 A I DID. 13 Q DID YOU HAVE ANY DISCUSSION WITH HER ABOUT HER AND 14 MR. FURR ARE HAVING NO INVOLVEMENT WITH THE LEGION BUSINESS 15 OTHER THAN OCCASIONALLY SIGNING CHECKS AND HOLDING BOARD 16 MEETINGS? 17 A YES. THIS IS WHAT SHE TOLD ME. 18 MR. WAIER: YOUR HONOR, I HAVE BEEN VERY PATIENT. I 19 SAID — I MADE MY OBJECTION ABOUT LEADING QUESTIONS THE 20 WAY, WITH RESPECT TO A WITNESS CALLED BY THE OTHER SIDE, 21 WOULD BE. YOU HAVE A CONVERSATION, WHAT DATE, WHAT WAS 22 DISCUSSED, AS OPPOSED TO TELLING THEM WHAT WAS DISCUSSED AND 23 HAVING HIM ANSWER “YES” OR “NO". 24 THE COURT: YOU ARE RIGHT. 25 MR. MUSSELMAN: I'M MOVING AS FAST AS I CAN, YOUR 26 HONOR. 27 28
page 153 1 BY MR. MUSSELMAN: 2 Q DID YOU HAVE ANY DISCUSSIONS WITH MR. FURR ON 3 AUGUST 27, 1993? 4 A YES. DURING THAT CONVERSATION WITH LAVONNE, SHE 5 GOT LEWIS ON THE PHONE. 6 MR. WAIER: I'M GOING TO OBJECT AND MOVE TO STRIKE. HE 7 WAS ASKED A STRAIGHT-OUT QUESTION. HE WAS NOT ASKED TO 8 REFER TO A DOCUMENT. HE’s BEEN REFERRING TO THE DOCUMENT ON 9 HIS TESTIMONY. HE WAS NOT ASKED TO HAVE THE RECOLLECTION 10 REFRESHED. 11 THE COURT: SUSTAINED. 12 13 BY MR. MUSSELMAN: 14 Q HAVE LEWIS OR LAVONNE FURR TOLD YOU THEY WERE 15 MANIPULATED BY MR. CARTO AS BOARD MEMBERS OF THE LEGION? 16 A YES. 17 Q DID THEY TELL YOU THAT ON AUGUST 28, 1993? 18 MR. WAIER: I'M GOING TO OBJECT. IT’s A LEADING 19 QUESTION. 20 THE COURT: SUSTAINED. 21 22 BY MR. MUSSELMAN: 23 Q DO YOU RECALL AT ANY TIME HAVING A DISCUSSION WITH 24 MR. FURR CONCERNING MR. Carto’s INFLUENCE ON HIM AS A BOARD 25 MEMBER OF THE LEGION? 26 A YES. 27 Q WHEN DO YOU RECALL HAVING THAT DISCUSSION? 28 A DURING THIS CONVERSATION ON AUGUST 28TH.
page 154 1 Q WHAT DID HE TELL YOU ON THAT SUBJECT? 2 A HE SAID THAT HE AND LAVONNE HAD BEEN SERVING AS 3 PUPPETS FOR MR. CARTO AND THEY WERE — WANTED TO BE DONE 4 WITH THIS ALL, AND THEY WERE PLANNING ON RESIGNING. 5 Q EXHIBIT 59, PLEASE, DATED SEPTEMBER 16, 1993. 6 A YES. 7 Q HAVE YOU SEEN THAT BEFORE? 8 A YES. 9 Q WHEN DID YOU FIRST SEE IT? 10 A COPY CAME TO US — I'M NOT SURE IF IT CAME IN THE 11 MAIL OR IF IT CAME FROM ONE OF THE CARBON-COPIED PEOPLE ON 12 THE BOTTOM. BUT I'VE SEEN THIS IN THE FALL OF 1993, AROUND 13 SEPTEMBER 18 OR 20TH. 14 Q DO YOU KNOW WHETHER OR NOT THE RESIGNATIONS WERE 15 EVER ACCEPTED? 16 MR. WAIER: OBJECTION. CALLS FOR HEARSAY. 17 THE COURT: SUSTAINED. 18 19 BY MR. MUSSELMAN: 20 Q ANYONE EVER TELL YOU THAT THE RESIGNATIONS WERE 21 ACCEPTED? 22 MR. WAIER: OBJECTION. CALLS FOR HEARSAY. 23 THE COURT: SUSTAINED. 24 25 BY MR. MUSSELMAN: 26 Q DID THE FURRS EVER TELL YOU THAT THEY KNEW THAT 27 THE RESIGNATIONS WERE ACCEPTED — STRIKE THAT. 28 DID MR. CARTO EVER TELL YOU THAT THE FURRS HAD
page 155 1 RESIGNED? 2 A NO. 3 Q LOOKING AT EXHIBIT 63, PLEASE, DATED SEPTEMBER 21, 4 1993, TELL ME IF YOU HAVE SEEN THAT BEFORE. 5 A I HAVE. 6 Q WHEN DID YOU FIRST SEE IT? 7 A I WOULD SAY AROUND OCTOBER OF 1993, EARLY OCTOBER. 8 Q DID YOU EVER DISCUSS THIS LETTER WITH MR. CARTO? 9 A NO. BY THEN, MR. CARTO WAS NO LONGER WITH THE 10 CORPORATION. 11 Q WERE YOU FORMALLY APPOINTED AS PRESIDENT OF THE 12 LEGION AT ANY TIME? 13 A YES. 14 Q WHERE WAS THAT? I'M SORRY. WHEN? 15 A I'M NOT SURE IF IT WAS SEPTEMBER OR OCTOBER OF 16 1993, ONE OF THOSE 2 MONTHS. 17 Q COULD YOU LOOK AT EXHIBIT 64, PLEASE, WHICH IS 18 DATED 1 OCTOBER 1993. 19 MR. WAIER: I DON'T HAVE EXHIBIT 64. 20 21 BY MR. MUSSELMAN: 22 Q HAVE YOU SEEN THAT BEFORE? 23 A I HAVE. 24 Q WHEN DID YOU FIRST SEE IT? 25 A I SAW IT FIRST ON FRIDAY, OCTOBER 1ST, 1993. 26 Q WHO WROTE IT? 27 A I BELIEVE MARK WEBER WROTE IT, DRAFTED IT, AND WE 28 ALL LOOKED AT IT AND THEN WE DECIDED ON A FINAL COPY. SO IT
page 156 1 WAS A GROUP EFFORT. 2 Q DID YOU SIGN IT? 3 A I DID. 4 Q WAS IT SENT TO MR. CARTO? 5 A YES. 6 Q SUBSEQUENT TO THE SENDING OF THAT LETTER, DID 7 MR. CARTO EVER TURN OVER TO THE LEGION THE FARREL ESTATE 8 ASSETS? 9 A NO. 10 Q HAS HE EVER TURNED OVER TO THE LEGION THE RECORDS 11 DEMONSTRATING WHERE THE FARREL ESTATE ASSETS ARE? 12 A NO. 13 Q WOULD YOU LOOK AT EXHIBIT 68, PLEASE, DATED 14 AUGUST 6, 1994. 15 A I HAVE IT. 16 Q HAVE YOU SEEN THAT BEFORE? 17 A YES. 18 Q WHEN DID YOU FIRST SEE IT? 19 A AUGUST 6 OR THEREABOUT, 1994. 20 Q AND WHO WROTE IT? 21 A IT’s — I DON'T KNOW WHO WROTE IT. I CAN SEE WHO 22 IT’s SIGNED BY. 23 Q HOW WAS IT THAT YOU WERE SEEING IT? 24 A IT CAME TO — THROUGH THE FAX MACHINE AT THE 25 LEGION’s OFFICE. 26 Q HAVE YOU EVER SEEN LAVONNE FURR’s SIGNATURE 27 BEFORE? 28 A YES.
page 157 1 Q IS THE SIGNATURE ON THIS PAGE SIMILAR TO THE 2 SIGNATURE YOU HAVE SEEN IN THE PAST? 3 A YES. 4 Q HAVE YOU EVER SEEN LEWIS FURR’s SIGNATURE BEFORE? 5 A YES. 6 Q IS IT SIMILAR TO THE SIGNATURE YOU HAVE SEEN FOR 7 HIM IN THE PAST? 8 A YES. 9 Q HAVE YOU EVER SEEN ELISABETH Carto’s SIGNATURE 10 BEFORE? 11 A YES, I HAVE. 12 Q IS THE SIGNATURE SIMILAR TO THE SIGNATURE YOU HAVE 13 SEEN FOR HER IN THE PAST? 14 A YES. 15 MR. MUSSELMAN: ONE MOMENT, YOUR HONOR. IT MAY BE THE 16 END, HERE. 17 18 BY MR. MUSSELMAN: 19 Q WHILE YOU WERE DIRECTOR OF THE LEGION, DID YOU 20 FEEL IT WAS WITHIN YOUR POWER TO COMMENCE LITIGATION FOR THE 21 LEGION? 22 MR. WAIER: I'M SORRY. SPEAK UP. 23 THE WITNESS: I HEARD YOU FINE. 24 MR. WAIER: I AM GOING TO OBJECT. HIS OPINIONS ARE 25 IRRELEVANT. I DON'T KNOW WHAT HE ASKED HIS OPINION OF. 26 THE COURT: YES, IT’s LATE IN THE DAY. RESTRAIN 27 YOURSELF. 28 MR. MUSSELMAN: I THINK THAT’s IT.
page 158 1 THE WITNESS: I HAVEN'T ANSWERED THE QUESTION YET. 2 MR. MUSSELMAN: THAT’s ALL I HAVE, YOUR HONOR. 3 THE COURT: HOW LONG IS YOUR CROSS-EXAMINATION GOING TO 4 BE? 5 MR. WAIER: QUITE LENGTHY, YOUR HONOR. 6 THE COURT: OKAY. SEE EACH OTHER TOMORROW. 7 MR. WAIER: I DO HAVE A PROBLEM. I TOLD YOU I HAVE TO 8 LEAVE AT 11:30 TO GO TO REDLANDS FOR A PRELIMINARY HEARING 9 AT 1:30. ORIGINALLY, WE HAD MOTIONS IN LIMINE SCHEDULED FOR 10 THE MORNING AND I COULD HAVE HANDLED THAT. 11 THE COURT: WE CAN BE OFF THE RECORD. 12 13 (PROCEEDINGS RECESSED.) 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
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