Including information about his associates
page 208
1 COURT OF APPEAL OF THE STATE OF CALIFORNIA
2 FOURTH APPELLATE DISTRICT
3 DIVISION ONE
4 ______________________________
)
5 LEGION FOR THE SURVIVAL OF )
FREEDOM, INC., ) DCA. NO. DO27959
6 )
PLAINTIFF AND ) FROM SAN DIEGO COUNTY
7 RESPONDENT, )
) HON. RUNSTON G. MAINO
8 VS. )
) TRIAL PROCEEDINGS
9 WILLIS CARTO, HENRY FISCHER, )
VIBET, INC., LIBERTY LOBBY, )
10 INC., ET. AL., )
)
11 DEFENDANTS AND )
APPELLANTS. )
12 ______________________________)
13
REPORTER’s APPEAL TRANSCRIPT
14
NOVEMBER 4, 1996
15
VOLUME 3
16
PAGES 208-385
17
18
APPEARANCES:
19
FOR THE PLAINTIFF AND JACQUES BEUGELMANS AND
20 RESPONDENT: THOMAS MUSSELMAN
1901 AVENUE OF THE STARS
21 CENTURY CITY, CA 90067
22 FOR THE DEFENDANTS AND PETER J. PFUND
APPELLANTS: 2382 S.E. BRISTOL
23 SUITE A
NEWPORT BEACH, CA 92660
24
25
26
BARBARA J. SCHULTZ, CSR, RPR
27 CSR NO. 8021
OFFICIAL REPORTER
28 VISTA, CALIFORNIA
page209
1 IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA
2 IN AND FOR THE COUNTY OF SAN DIEGO
3 DEPARTMENT 11 HON. RUNSTON G. MAINO
4
_____________________________
5 )
LEGION FOR THE SURVIVAL OF )
6 FREEDOM, INC., )
)
7 PLAINTIFF, ) NO. N64584
)
8 VS. )
)
9 WILLIS CARTO, HENRY FISCHER, )
VIBET, INC., LIBERTY LOBBY )
10 INC., ET. AL., )
)
11 DEFENDANTS. )
_____________________________)
12
13 REPORTER’s TRANSCRIPT
14 NOVEMBER, 4, 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
page210 1 VISTA, CALIFORNIA, NOVEMBER 4, 1996, DEPARTMENT 11: 2 3 THE COURT: BACK ON THE RECORD. 4 MR. LANE IS HERE FROM WASHINGTON, D.C., 5 REPRESENTING LIBERTY LOBBY. 6 MR. WAIER: FOR THE RECORD, LET ME INTRODUCE HIM. WE 7 INTRODUCED HIM INFORMALLY. THIS IS MARK LANE FROM 8 WASHINGTON, D.C., REPRESENTING LIBERTY LOBBY IN THE ACTION. 9 THE COURT: GLAD TO HAVE YOU HERE. 10 MR. LANE: THANK YOU. 11 12 CROSS-EXAMINATION (CONTINUED) 13 BY MR. WAIER: 14 Q GOOD MORNING, MR. MARCELLUS. 15 A GOOD MORNING. 16 Q WHEN WE LAST LEFT OFF, WE WERE TALKING ABOUT THE 17 ASSETS OF THE LEGION BEING ENCUMBERED. DO YOU RECALL THAT, 18 THAT TOPIC AREA? 19 A YES. 20 Q IN YOUR DIRECT TESTIMONY, YOU INDICATED THAT -- 21 AND YOU WERE SHOWN SOME BYLAWS. DO YOU RECALL THAT? 22 A YES. 23 Q AND IN FACT — I'M NOT SURE WHAT THE EXHIBIT 24 NUMBER WAS. 25 MR. BEUGELMANS: EXHIBIT 3. 26 27 BY MR. WAIER: 28 Q EXHIBIT 3. DO YOU HAVE THAT IN FRONT OF YOU?
page211 1 YOU IDENTIFIED THOSE AS THE BYLAWS? 2 A I IDENTIFIED THESE AS SOME BYLAWS OF THE 3 CORPORATION. 4 Q IN FACT, PRIOR TO SEPTEMBER 1993, YOU HAD NO 5 OCCASION TO ACTUALLY LOOK FOR ANY BYLAWS; ISN'T THAT TRUE? 6 A THAT’s NOT TRUE. 7 Q WHEN IS THE FIRST TIME YOU LOOKED FOR BYLAWS 8 RELATING TO THE LEGION? 9 A I BELIEVE IT WAS IN 1990, PERHAPS '91. 10 Q WHAT WAS THE PURPOSE OF LOOKING FOR THE BYLAWS AT 11 THIS TIME? 12 A THEY WERE REQUESTED BY THE LEGION’s ATTORNEY, AS I 13 RECALL, IN CONNECTION WITH THE MERMELSTEIN LITIGATION. 14 Q YOU HELPED IN PREPARING DOCUMENTS FOR THE 15 MERMELSTEIN LITIGATION; IS THAT CORRECT? 16 A YES. 17 Q AND YOU WERE REPORTING TO THE LEGION’s ATTORNEY AT 18 THAT TIME? 19 A NO. I WAS REPORTING TO MR. CARTO AT THE TIME. 20 Q WAS MR. — WHY WERE YOU REPORTING TO MR. CARTO 21 WITH RESPECT TO THE MERMELSTEIN LITIGATION? 22 A BECAUSE MY CONTRACT WITH THE LEGION SPECIFIED 23 THAT’s WHAT I WAS TO DO. 24 Q DID YOU SEE ANY — STRIKE THAT. 25 DID YOU REQUEST FROM ANYONE AT THE LEGION FOR ANY 26 WRITTEN DOCUMENTATION AUTHORIZING YOUR REPORTING TO 27 WILLIS CARTO WITH REQUEST TO THE MERMELSTEIN LITIGATION? 28 A THE QUESTION IS CONFUSING TO ME. I DON'T
page212 1 UNDERSTAND. I WAS UNDER A CONTRACT WITH THE LEGION. MY 2 UNDERSTANDING WAS LAVONNE FURR WAS THE SECRETARY AND THE 3 DIRECTOR AND TREASURER OF THE LEGION; THAT SHE HAD ACCESS TO 4 THE BOARD MEMBERS; THAT WHEN SHE TOLD ME TO REPORT TO 5 MR. CARTO, THAT WAS WHAT THE BOARD WANTED AND SO THAT’s WHO 6 I REPORTED TO. 7 Q AND AT ANY POINT IN TIME, DID YOU EVER REVOKE IN 8 WRITING THE TERMS OF THAT CONTRACT WHILE YOU WERE WITH THE 9 LEGION? 10 A I DID NOT, NO. 11 Q AND SO WHEN DID YOU LEAVE THE LEGION? 12 A IN FEBRUARY OF '94. 13 Q UP UNTIL FEBRUARY 1994, YOU WERE STILL WORKING 14 UNDER THAT CONTRACT WITH THE LEGION; ISN'T THAT CORRECT? 15 MR. MUSSELMAN: CALLS FOR LEGAL CONCLUSION. 16 THE COURT: OVERRULED. 17 THE WITNESS: YES. 18 19 BY MR. WAIER: 20 Q AND THAT CONTRACT CALLED FOR YOU TO REPORT TO 21 WILLIS CARTO AS A REPRESENTATIVE OF THE LEGION; ISN'T THAT 22 CORRECT? 23 A THAT CONTRACT DID, YES. 24 Q TAKE A LOOK AT EXHIBIT 2. YOU WERE SHOWN 25 EXHIBIT 2, WHICH, FOR PURPOSES OF THE RECORD, IS BYLAWS OF 26 THE LEGION FOR THE SURVIVAL OF FREEDOM. DO YOU SEE THAT? 27 A YES. 28 Q YOU HAVE SEEN THIS DOCUMENT BEFORE, HAVEN'T YOU?
page213 1 A YES. 2 Q AND YOU SAW THESE IN LEGION FILES? 3 A NO. 4 Q WHERE DID YOU SEE THESE? 5 A THESE WERE — I BELIEVE THIS IS — THESE ARE THE 6 BYLAWS THAT WERE HANDED TO ME BY MR. CARTO IN 1990 OR 1991. 7 Q WHEN YOU SAY THESE WERE THE BYLAWS HANDED TO YOU 8 IN 1990, 1991, ARE YOU SAYING WHEN YOU WERE REQUESTED FOR 9 THE MERMELSTEIN CASE TO PRODUCE BYLAWS, THAT YOU ASKED 10 MR. CARTO FOR THE BYLAWS? 11 A YES. 12 Q HE PROVIDED YOU WITH THE BYLAWS? 13 A AS I RECALL, THESE ARE THE BYLAWS — THERE WAS 14 ANOTHER SET OF BYLAWS, AND I AM A LITTLE CONFUSED TO WHICH 15 SET HE PROVIDED ME WITH. I BELIEVE IT WAS THESE. 16 Q AT THE POINT IN TIME IN 1990, 1991, YOUR POSITION 17 WITH THE LEGION WAS ONE OF MANAGER; IS THAT CORRECT? 18 A MANAGING DIRECTOR. MANAGER, YES. 19 Q WHEN YOU SAYMANAGING DIRECTOR,YOU WERE NOT ON 20 THE BOARD OF DIRECTORS? 21 A THAT’s CORRECT. 22 Q THERE WAS A SEPARATE BOARD OF DIRECTORS? 23 A YES. 24 Q YOU UNDERSTOOD THAT YOU WERE — THAT THE BOARD OF 25 DIRECTORS OF THE LEGION AT THIS POINT IN TIME RAN THE 26 DAY-TO-DAY AFFAIRS OF THE CORPORATION; ISN'T THAT TRUE? 27 A NO. 28 Q WELL, DID YOU READ THE BYLAWS?
page214 1 A I DID NOT AT THAT TIME. 2 Q WELL, ARE — WELL, TURN TO PAGE 2, ARTICLE 4 ON 3 EXHIBIT 2. DO YOU HAVE THAT IN FRONT OF YOU? 4 A YES. 5 Q DO YOU SEE SECTION 1? 6 A YES. 7 Q COULD YOU READ THAT FOR ME, PLEASE. 8 ATHE BUSINESS AND PROPERTY OF THE CORPORATION 9 SHALL BE MANAGED BY A BOARD OF THREE DIRECTORS AND/OR 10 TRUSTEES TO BE ELECTED BY THE INCORPORATORS PROVIDED THE 11 NUMBER OF DIRECTORS AND/OR TRUSTEES MAY BE INCREASED AT-- 12 (THE REPORTER ASKED TO REPEAT.) 13 THE WITNESS: —THE NUMBER OF DIRECTORS AND/OR 14 TRUSTEES MAY BE INCREASED AT ANY REGULAR ANNUAL OR SPECIAL 15 MEETING OF THE INCORPORATORS.16 17 BY MR. WAIER: 18 Q YOU UNDERSTOOD — DOES THAT HELP REFRESH YOUR 19 RECOLLECTION THAT THE DAY-TO-DAY AFFAIRS OF THE CORPORATION 20 WERE MANAGED BY THE BOARD OF DIRECTORS OF THE LEGION? 21 A IT DOES NOT. IN FACT, I MANAGED THE DAY-TO-DAY 22 AFFAIRS OF THE LEGION. 23 Q DO YOU SEE ANYWHERE IN THE ARTICLES THAT GAVE YOU 24 THAT AUTHORITY? 25 A I DO NOT. 26 Q AND YOU UNDERSTOOD THAT YOUR AUTHORITY CAME FROM 27 THE BOARD OF DIRECTORS? 28 A YES.
page215 1 Q WHILE YOU WERE THERE; IS THAT CORRECT? 2 A YES. 3 Q AND YOU ALREADY TESTIFIED LAVONNE FURR AND 4 LEWIS FURR WERE DIRECTORS IN 1985? 5 A YES. 6 Q AND THEY WERE ALSO DIRECTORS IN 1986? 7 A YES. 8 Q AND THEY WERE DIRECTORS IN 1987? 9 A YES. 10 Q AND THEY WERE DIRECTORS IN 1988? 11 A YES. 12 Q AND 1989 AS WELL? 13 A YES. 14 Q 1990? 15 A YES. 16 Q 1991? 17 A CORRECT. 18 Q AND YOU UNDERSTOOD THAT AS DIRECTORS, THEY HAD 19 CERTAIN AUTHORITIES TO MANAGE THE BUSINESS AND PROPERTY OF 20 THE CORPORATION, DIDN'T YOU? 21 MR. MUSSELMAN: CALLS FOR LEGAL CONCLUSION. 22 THE COURT: OVERRULED. 23 THE WITNESS: I UNDERSTOOD THAT THEY WERE THE BOARD AND 24 COULD DO WHAT THEY WANTED WITH THE CORPORATION WITH REGARD 25 TO ITS AFFAIRS, YES. 26 27 BY MR. WAIER: 28 Q THANK YOU. PRIOR TO SEPTEMBER OF 1993, YOU
page216 1 WEREN'T THE PRESIDENT OF THE LEGION, WERE YOU? 2 A NO. 3 Q WHO WAS THE PRESIDENT OF THE LEGION, FOR EXAMPLE, 4 JUST BEFORE? 5 A I THINK LEWIS FURR. 6 Q AND WHO WAS THE VICE-PRESIDENT? 7 A I'M NOT SURE THAT THERE WAS A VICE-PRESIDENT. 8 Q WHO WAS THE TREASURER? 9 A I BELIEVE LAVONNE FURR. 10 Q AND WHO WAS THE SECRETARY? 11 A I BELIEVE ALSO LAVONNE FURR. 12 Q FOR WHAT PERIOD OF TIME, WHILE YOU WERE AT THE 13 LEGION, WAS LEWIS FURR THE PRESIDENT OF THE LEGION? 14 A I DON'T RECALL HOW LONG HE WAS PRESENT. I'M 15 FAIRLY SURE IT COULD HAVE BEEN FROM '85 OR '86 ONWARD. I'M 16 NOT SURE PRIOR TO THAT PERIOD. 17 Q WITH RESPECT TO LAVONNE FURR, ISN'T IT TRUE THAT 18 SHE WAS SECRETARY/TREASURER FROM AT LEAST 1985 THROUGH THE 19 MIDDLE OF 1993? 20 A I BELIEVE THAT’s TRUE, YES. 21 Q IN FACT, DURING THAT ENTIRE PERIOD OF TIME, SAY, 22 FOR THE PERIOD OF TIME THAT YOU LEFT — YOU ALREADY 23 TESTIFIED, EARLY 1986 THROUGH ABOUT MID 1987, YOU LEFT THE 24 LEGION; ISN'T THAT CORRECT? 25 A THAT’s CORRECT. 26 Q UP UNTIL JULY OF 1993, YOU NEVER HELD ANY OFFICE, 27 YOU WEREN'T AN OFFICER OF THE LEGION; ISN'T THAT TRUE? 28 A I WAS THE — THE C.E.O. OR THE EXECUTIVE OFFICER.
page217 1 I DON'T KNOW IF THAT’s TECHNICALLY AN OFFICER LIKE A 2 TREASURER OR A SECRETARY OF THE CORPORATION. 3 Q YOU WEREN'T APPOINTED BY THE BOARD OF DIRECTORS, 4 WERE YOU, TO THAT POSITION? 5 A WELL, I BELIEVE I WAS. YES. 6 Q SIR, YOU REVIEWED VARIOUS MINUTES OF THE 7 CORPORATION; ISN'T THAT CORRECT? 8 A YES. 9 Q HAVE YOU FOUND ANY ONE MINUTE THAT APPOINTED YOU 10 BY THE BOARD OF DIRECTORS TO MANAGING OFFICER OF THE LEGION? 11 A I HAVEN'T SEEN SUCH A DOCUMENT. 12 Q NONE EXISTS, DO THEY? 13 A I DON'T KNOW. 14 Q YOU GUYS — STRIKE THAT. 15 IN FACT, YOU, MR. TED O’Keefe, MR. GREG RAVEN, 16 SOMETIME IN BETWEEN MARCH AND JULY OF 1993, INVESTIGATED 17 MR. Carto’s AUTHORITY WITHIN THE LEGION; ISN'T THAT CORRECT? 18 A YES. 19 Q IN FACT, IN YOUR — IN DOING THAT, YOU REVIEWED 20 VARIOUS MINUTES OF MEETINGS, DID YOU NOT? 21 A WE HAD ONLY A SCANT FEW AT THAT TIME. 22 Q SIR, DID YOU EVER ATTEND ANY BOARD OF DIRECTORS 23 MEETINGS WHERE YOU WERE ELECTED AS THE MANAGING OFFICER OF 24 THE LEGION? 25 A THAT WAS NOT MY INTEREST. I HAD NO INTEREST IN 26 WHAT THE BOARD DID. BASICALLY, I WAS THERE TO DO MY JOB. 27 AND DOING MY JOB, I TOOK DIRECTION FROM MR. CARTO. WHAT THE 28 BOARD DID WAS WHAT THE BOARD DID. I WAS NOT INVOLVED IN
page218 1 WHAT THE BOARD DID. 2 Q YOU TOOK THE DIRECTION BASED ON YOUR CONTRACT THAT 3 YOU ENTERED INTO THE LEGION WITH LAVONNE FURR; IS THAT 4 CORRECT? 5 A I TOOK MY DIRECTION BASED ON WHAT MR. CARTO WANTED 6 OR DIDN'T WANT. 7 Q WELL, YOU ALSO TOOK THAT DIRECTION BASED ON THE 8 CONTRACT, I BELIEVE YOU TESTIFIED TO, THAT YOU ENTERED INTO 9 EARLY ON WITH LAVONNE FURR; ISN'T THAT CORRECT? 10 A THAT’s WHAT THE CONTRACT SAID, YES. 11 Q BASED ON THAT, YOU TOOK DIRECTION FROM MR. CARTO; 12 ISN'T THAT CORRECT? 13 A CORRECT. 14 Q AND YOU ASSUMED THAT CONTRACT WAS VALID BECAUSE 15 LAVONNE FURR WAS A DIRECTOR AT THE TIME WHEN YOU ENTERED 16 INTO THAT CONTRACT; ISN'T THAT TRUE? 17 A AND AN OFFICER, YES. 18 Q SHE WAS ALSO SUBSTITUTE INCORPORATOR, WASN'T SHE? 19 A I HAD NO SUCH KNOWLEDGE. 20 Q DID YOU EVER COME TO ACKNOWLEDGE SHE WAS A 21 SUBSTITUTE INCORPORATOR OF THE LEGION? 22 A I HEARD ALLEGATIONS THAT SHE WAS. I HEARD AN 23 ARGUMENT THAT SHE WAS, BUT I DON'T BELIEVE IT. 24 MR. WAIER: MOVE TO STRIKE.I DON'T BELIEVE ITIS 25 NONRESPONSIVE. 26 THE COURT: SUSTAINED. 27 28
page219 1 BY MR. WAIER: 2 Q WITH RESPECT TO WILLIS CARTO, YOU UNDERSTOOD HE 3 WAS SUBSTITUTE INCORPORATOR; ISN'T THAT TRUE? 4 A I HAD NO SUCH UNDERSTANDING. 5 Q IN FACT, YOU WOULDN'T HAVE HAD SUCH AN 6 UNDERSTANDING. YOU NEVER WERE A DIRECTOR ON THE BOARD OF 7 DIRECTORS OF THE LEGION UP UNTIL SEPTEMBER 1993. ISN'T THAT 8 CORRECT? 9 MR. MUSSELMAN: CALLS FOR SPECULATION, YOU WOULD HAVE. 10 THE COURT: SUSTAINED. 11 12 BY MR. WAIER: 13 Q YOU HAVE NEVER — STRIKE THAT. 14 UP UNTIL SEPTEMBER 1993, YOU WERE NEVER ON THE 15 BOARD OF DIRECTORS OF THE LEGION; ISN'T THAT CORRECT? 16 A CORRECT. 17 Q AND YOU NEVER ATTENDED A BOARD OF DIRECTORS 18 MEETING; ISN'T THAT CORRECT? 19 A CORRECT. 20 Q AND YOU WERE NEVER ASKED TO VOTE ON ANY CORPORATE 21 MATTER INVOLVING THE LEGION UP THROUGH SEPTEMBER OF 1993; 22 ISN'T THAT CORRECT? 23 A THAT’s CORRECT. 24 Q NOW, IN 1985, SIR — STRIKE THAT. 25 WHAT WAS YOUR INVOLVEMENT WITH RESPECT TO 26 PREPARING FINANCIAL STATEMENTS IN 1985 FOR THE LEGION? 27 A VERY LITTLE, ACTUALLY. 28 Q IN FACT, ISN'T IT TRUE ELISABETH CARTO HANDLED
page220 1 MOST OF THAT FOR THE LEGION AT THAT TIME, 1985? 2 A ELISABETH CARTO AND THE ACCOUNTANT THAT DID THE 3 BOOKS FOR THE LEGION, YES. 4 Q THAT WAS STEVE RADNOVICH? 5 A ROBERT FENCHEL UNTIL PERHAPS '86 OR '87, AROUND IN 6 THAT TIME. AND MR. RADNOVICH BECAME THE ACCOUNTANT. 7 Q AND YOU WERE NOT INVOLVED IN THE PREPARATION OF 8 THE ANNUAL FINANCIAL STATEMENTS AT THIS TIME; ISN'T THAT 9 CORRECT? 10 A ONLY TO THE EXTENT THAT MR. RADNOVICH OR 11 MRS. CARTO WOULD — WOULD CONSULT WITH ME OR ASK ME 12 QUESTIONS ABOUT CERTAIN THINGS IN THE PROCESS OF PREPARING 13 THOSE STATEMENTS. 14 Q AND YOU WEREN'T INVOLVED IN THE PREPARATION OF TAX 15 RETURNS FROM 1985 THROUGH 1992; ISN'T THAT CORRECT? 16 A THAT’s CORRECT, YES. 17 Q THAT WAS ALL HANDLED BY ELISABETH CARTO; ISN'T 18 THAT CORRECT? 19 A I DON'T KNOW THAT. 20 Q WHO WAS HANDLING THE PREPARATION OF THE TAX 21 RETURNS? 22 A THE ACCOUNTANT. 23 Q EITHER MR. FENCIL (PHONETICS) -- 24 A FENCHEL. 25 Q FENCHEL AND/OR MR. RADNOVICH; IS THAT CORRECT? 26 A YES. 27 Q WHO REPORTED DIRECTLY TO MR. RADNOVICH AND 28 MR. FENCHEL WITH RESPECT TO THE PREPARATION OF THE TAX
page221 1 RETURNS? 2 A I DID TO A LIMITED EXTENT, MORE SO MRS. CARTO. 3 Q DID YOU — FOR WHAT PERIOD OF TIME DID YOU 4 ACTUALLY REPORT TO THE TWO ACCOUNTANTS IN THE PREPARATION OF 5 THE TAX RETURNS? 6 A I DIDN'T ACTUALLY REPORT TO THEM. I PERHAPS 7 ANSWERED QUESTIONS WHEN THEY CALLED. 8 Q WITH RESPECT TO THE TAX RETURNS FOR 1985, FISCAL 9 YEAR 1985, DID EITHER MR. FENCHEL OR MR. RADNOVICH PROVIDE 10 YOU A COPY OF THE TAX RETURN BEFORE IT WAS FILED? 11 A NO. 12 Q IN FACT, YOU NEVER SAW THAT TAX RETURN UNTIL 13 SOMETIME IN 1993; ISN'T THAT CORRECT? 14 A THAT’s NOT CORRECT. 15 Q WHEN WAS THE FIRST TIME YOU SAW THE 1985 TAX 16 RETURN FOR THE LEGION? 17 A I SAW THE TAX RETURN AT SOME POINT PROBABLY AFTER 18 I CAME BACK FROM MY 18-MONTH ABSENCE. THE TAX RETURNS WERE 19 ON FILE IN THE OFFICES, AND I DO RECALL HAVING LOOKED AT 20 THEM, NOT IN ANY DETAIL, BUT JUST LOOKED AT THEM. 21 Q SO THE TAX RETURNS FROM 1985 THROUGH 1993 WERE ON 22 FILE WITH THE CORPORATION AT ITS CORPORATE OFFICES? 23 A YES. 24 Q AND YOU ARE AWARE OF THAT BECAUSE THEY WERE KEPT 25 IN A CERTAIN AREA WITHIN THE OFFICES OF THE CORPORATION? 26 A THAT’s CORRECT. 27 Q AND YOU UNDERSTOOD WHEN I TALK ABOUT THE 28 CORPORATION, I'M TALKING ABOUT THE LEGION FOR THE SURVIVAL
page222 1 OF THE FREEDOM, INC.? 2 A THAT’s THE ONLY CORPORATION WE'RE TALKING ABOUT. 3 Q YOU INDICATED THAT THERE WAS SCANT MINUTES THAT 4 YOU REVIEWED SOMETIME IN MARCH '93 THROUGH JULY 1993 WHEN 5 YOU WERE CONDUCTING THE INVESTIGATION. DO YOU RECALL THAT? 6 A YES. 7 Q WHERE DID YOU LOCATE THE MINUTES? 8 A I DON'T RECALL WHERE THEY WERE. 9 Q DO YOU RECALL HOW YOU CAME ACROSS THOSE MINUTES? 10 A I DON'T BELIEVE I CAME ACROSS THEM. I BELIEVE 11 MR. O’Keefe FOUND THEM. IN LOOKING THROUGH VARIOUS 12 CORPORATE FILES, THERE WERE COPIES OF THE MINUTES OF, I 13 DON'T KNOW, PERHAPS ONE OR TWO OR THREE MEETINGS. 14 Q NOW, DO YOU HAPPEN TO RECALL WHERE MR. O’Keefe 15 FOUND THOSE? 16 A NO, I DON'T. 17 Q DID YOU ASK HIM? 18 A PROBABLY. 19 Q WHAT DID YOU DO TO INVESTIGATE WHAT MATERIALS YOU 20 NEEDED TO FIND OUT CONCERNING MR. Carto’s AUTHORITY BACK IN 21 MARCH 1993 THROUGH JULY 1993? 22 A VIRTUALLY NOTHING. 23 Q WHAT WAS — BETWEEN MARCH 1993 THROUGH JUNE OF 24 1993, WHAT WAS MR. O’Keefe’s ROLE IN THE — AT THE LEGION? 25 A HE WAS — HE WAS AN EDITOR. 26 Q HE WAS NOT AN OFFICER; ISN'T THAT TRUE? 27 A HE WAS NOT. 28 Q AND HE WAS NOT A DIRECTOR?
page223 1 A CORRECT. 2 Q AND HE WAS NOT AN INCORPORATOR? 3 A TRUE. 4 Q WHAT AUTHORITY DID YOU HAVE, SIR, TO REQUEST 5 MR. O’Keefe TO LOOK AT THE CORPORATE RECORDS BACK IN MARCH 6 1993? 7 A I HAD WHAT I THOUGHT WAS A KIND OF MORAL 8 AUTHORITY. 9 Q SIR, THAT’s THE ONLY AUTHORITY; ISN'T THAT 10 CORRECT? YOU FELT A MORAL AUTHORITY? 11 A THAT’s THE AUTHORITY I OPERATED ON. 12 Q THAT MORAL AUTHORITY WAS GENERATED BECAUSE OF YOUR 13 FEAR MR. WEBER WOULD BE FIRED BY MR. CARTO; ISN'T THAT TRUE? 14 A IT WAS GREATER THAN THAT, EVEN. I HAD WITNESSED 15 WHAT I THOUGHT WAS A PHENOMENAL ABERRATION ON THE PART OF 16 MR. CARTO AND IT GOT ME WORRIED. 17 Q WHAT ABERRATION WAS THAT? 18 A THAT ABERRATION WAS HIS SUDDEN AND INEXPLICABLE 19 DECISION TO CHANGE THE EDITORIAL COURSE OF THE LEGION'S 20 PUBLISHED MATERIALS AND TO FORCE THE EDITORIAL STAFF TO -- 21 TO SWITCH GEARS AND SWITCH RAILS AND SWITCH TRACK AND TAKE 22 OFF ON A NEW COURSE. 23 Q YOU FELT, AS AN EMPLOYEE, YOU HAD A RIGHT TO 24 CHANGE THAT; IS THAT RIGHT? 25 A I FELT, AS AN EMPLOYEE, I HAD THE RIGHT TO 26 DETERMINE WHETHER OR NOT MR. CARTO TRULY HAD THE AUTHORITY 27 TO CHANGE THE CORPORATION’s DIRECTION. 28 Q IN FACT, YOU WEREN'T, AT THAT POINT IN TIME,
page224 1 CONCERNED ABOUT THE FARREL ESTATE, WERE YOU? 2 A I WAS NOT. 3 Q IN FACT, THE REASON WHY YOU WEREN'T CONCERNED 4 ABOUT THE FARREL ESTATE BACK IN 1991, YOU RECEIVED A CHECK 5 FROM THE BANQUE CONTRADE FROM SWITZERLAND, YOURSELF, DIDN'T 6 YOU? 7 A I RECEIVED SEVERAL OF THOSE. 8 Q FROM THE BANQUE CONTRADE? 9 A YES, I BELIEVE THAT WAS THE BANK. 10 Q AND THAT WAS FROM APPROXIMATELY EARLY 1991 THROUGH 11 1992; ISN'T THAT CORRECT? 12 A YES. 13 Q AND IN FACT YOU UNDERSTAND THAT THAT WAS MONEY 14 COMING FROM THE FARREL ESTATE, DIDN'T YOU? 15 A I DIDN'T KNOW FOR SURE IT WAS COMING FROM THE 16 FARREL ESTATE. 17 Q SIR, WHERE DID YOU THINK THAT MONEY WAS COMING 18 FROM? 19 A I THOUGHT IT MAY — IT MIGHT HAVE EVEN BEEN COMING 20 FROM SOME KIND OF A LOAN SOMEBODY HAD MADE TO — TO SOME 21 GROUP, BASED ON THE PROCEEDS COMING FROM THE FARREL ESTATE 22 AT SOME POINT. I DIDN'T KNOW WHERE THE MONEY REALLY WAS 23 COMING FROM. 24 Q SIR, YOU KNEW, AT THAT TIME, MONEY COMING FROM THE 25 FARREL ESTATE HAD BEEN DEPOSITED INTO THE BANQUE CONTRADE, 26 DIDN'T YOU? 27 A I ASSUMED THAT WAS THE CASE. 28 Q IN FACT, MR. CARTO TOLD YOU THAT, DIDN'T HE?
page225 1 A I WAS ONLY TOLD THAT SOME FUNDS HAD BEEN 2 RELEASED. IT WAS ALL I WAS TOLD. AND THAT SOME 3 EXPENDITURES COULD BE MADE. AND MR. CARTO SAID OKAY, TOM, 4 WE'RE GOING TO PAY YOU YOUR SALARY OUT OF THIS ACCOUNT. AND 5 IT WAS A LITTLE BIT TOUGH ON ME. I HAD TO INVOICE THE 6 COMPANY EVERY THREE MONTHS FOR MY SALARY. I WAS WILLING TO 7 DO IT. MR. CARTO WANTED IT DONE THAT WAY. 8 Q YOU DIDN'T OBJECT TO RECEIVING THE CHECKS BACK IN 9 EARLY 1991 FROM THE BANQUE CONTRADE? 10 A I DIDN'T OBJECT TO RECEIVING MY PAY, NO. 11 Q WELL, YOU DIDN'T OBJECT TO THE SOURCE OF THE PAY, 12 DID YOU? 13 A NO. 14 Q IN FACT, HOW MUCH MONEY DID YOU RECEIVE FROM THE 15 BANQUE CONTRADE? 16 A I RECEIVED MY SALARY PROBABLY FOR A YEAR AND A 17 HALF TO TWO YEARS AND — AT $3,000 A MONTH, PLUS I THINK I 18 GOT A 2- OR $3,000 BONUS AT THE END OF ONE OF THOSE YEARS. 19 YOU DO THE MATH. 20 Q A LITTLE OVER $70,000? 21 A THAT MIGHT BE ABOUT RIGHT. MAYBE NOT QUITE 70-. 22 COULD HAVE BEEN BETWEEN 50- AND 70-, YES. 23 Q AND DURING THE PERIOD OF TIME YOU WERE RECEIVING 24 THE MONEY FROM EARLY 1991 THROUGH 1992, IS THAT EARLY 1991 25 YOU STARTED RECEIVING THE MONEY? 26 A SOMETIME IN 1991. 27 Q IN FACT, AT NO TIME DID YOU GO TO MR. WEBER, DID 28 YOU, AND TELL HIM HEY, THE FARREL ESTATE IS FUNDED AND I'M
page226 1 GETTING MONEY FROM THE ESTATE? YOU NEVER DID THAT, DID YOU? 2 A I DON'T RECALL ANY SPECIFIC INSTANCE OF LETTING 3 THE REST OF THE SENIOR STAFF KNOW WHERE THE PAY WAS COMING 4 FROM, BUT IT WASN'T A SECRET. I HAD NO DESIRE TO MAKE IT A 5 SECRET. 6 Q SIR, BACK IN 1991, NOT ONLY DID THE BANQUE 7 CONTRADE — DID YOU RECEIVE MONEY FROM YOUR SALARY FROM THE 8 BANQUE CONTRADE, DIDN'T YOU ALSO RECEIVE MONEY TO ONE OF THE 9 CAUSES THAT YOU REPRESENTED FROM THE BANQUE CONTRADE? 10 MR. MUSSELMAN: OBJECTION. INCOMPREHENSIBLE. 11 MR. WAIER: REPHRASE THE QUESTION. 12 13 BY MR. WAIER: 14 Q ISN'T IT TRUE, MR. MARCELLUS, BESIDES THE SALARY 15 YOU RECEIVED FROM THE BANQUE CONTRADE FUNDS, THAT YOU ALSO 16 ASKED MR. CARTO TO DIRECT SOME OF THAT MONEY TO ONE OF THE 17 CAUSES THAT YOU FOLLOWED; ISN'T THAT TRUE? 18 A INDEED. ON TWO OCCASIONS, I ASKED HIM TO, INSTEAD 19 OF MAKING THE CHECK OUT TO ME, HAVE THE CHECK MADE OUT TO 20 F.S.O., FLAG SERVICE ORGANIZATION. 21 Q THAT IS SCIENTOLOGY, ISN'T IT? 22 A THAT’s CORRECT. 23 Q YOU ASKED HIM TO GIVE SOME OF THE FARREL ESTATE 24 MONEY TO SCIENTOLOGY; ISN'T THAT CORRECT? 25 A NO, SIR. I ASKED HIM TO GIVE SOME OF MY SALARY 26 COMING OUT OF THE LEGION ACCOUNT TO AN ORGANIZATION THAT I 27 WANTED TO BENEFIT. 28 Q YOU DIDN'T THINK THAT WAS WRONG, DID YOU?
page227 1 A I'M SURE IT’s NOT WRONG. 2 Q YOU DIDN'T THINK IT WAS WRONG TO TAKE YOUR SALARY 3 FROM THE FARREL ESTATE; ISN'T THAT CORRECT? 4 A I DIDN'T THINK IT WAS WRONG FOR ME TO TAKE MY 5 SALARY FROM THE LEGION’s ACCOUNT, COMPANY’s ACCOUNT. WHAT 6 COULD BE WRONG WITH THAT? 7 Q WELL, DID YOU QUESTION MR. CARTO AT THE TIME WHEN 8 YOU FIRST GOT YOUR CHECK HOW MUCH MONEY WAS IN THAT ACCOUNT? 9 A I DID NOT. 10 Q DID YOU ASK HIM ANYTHING ABOUT THE FARREL ESTATE 11 AT THIS POINT IN TIME? 12 A HE MADE SOME REPRESENTATION TO ME ABOUT IT AND I 13 FELT THOSE ANSWERED MY QUESTIONS. 14 Q ISN'T IT TRUE THAT IN PRIOR DEPOSITION TESTIMONY, 15 NOT ONLY THIS CASE, BUT IN OTHER CASES, YOU TESTIFIED YOU 16 KNEW NOTHING ABOUT MONIES COMING FROM THE FARREL ESTATE 17 UNTIL SOMETIME IN 1993? 18 A I WASN'T SURE UNTIL 1993 WHAT THE SOURCE OF THAT 19 MONEY WAS, WHERE IT HAD ORIGINALLY COME FROM. 20 Q ISN'T IT TRUE MR. CARTO TOLD YOU THOSE WERE MONIES 21 RELEASED FROM THE FARREL ESTATE? ISN'T THAT WHAT YOU JUST 22 TOLD US? 23 MR. MUSSELMAN: OBJECTION. ASKING HIM TO REPEAT THE 24 TESTIMONY. 25 THE COURT: SUSTAINED. 26 27 BY MR. WAIER: 28 Q WELL, DIDN'T MR. CARTO TELL YOU IN 1991 THAT THESE
page228 1 WERE MONIES RELEASED FROM THE FARREL ESTATE THAT WENT INTO 2 THE BANQUE CONTRADE? 3 A I DON'T THINK HE SAID THAT, NO. 4 Q AND YOU NEVER ASKED HIM, DID YOU? 5 A NO. 6 Q DID YOU THINK MR. CARTO HAD A RIGHT AT THAT POINT 7 IN TIME TO AUTHORIZE PAYMENT OUT OF BANQUE CONTRADE TO YOU? 8 A I DIDN'T CONCERN MYSELF WITH THAT QUESTION. 9 Q NOW, IF YOU RECALL THE LAST TIME WE SPOKE, WHICH 10 WAS LAST FRIDAY, I ASKED YOU ABOUT A LETTER THAT MR. HULSY 11 HAD SENT TO YOU ON MAY 29, 1991. DO YOU RECALL THAT? 12 A YES. 13 Q I THINK WE ALREADY HAD THEM MARKED FOR 14 IDENTIFICATION AS 174. YES. DO YOU HAVE THAT IN FRONT OF 15 YOU? 16 A TELL ME WHICH EXHIBIT THAT WOULD BE. 17 Q EXHIBIT 174. I'M NOT SURE IT’s IN THE BOOK. 18 A I DON'T THINK IT GOES THAT HIGH. 19 Q LET ME HELP YOU OUT. 20 A MAYBE IT’s IN THAT PILE. WATCH OUT FOR THE WATER. 21 Q TRUST ME, I WON'T DRINK IT. 22 A I THOUGHT YOU — YOU MIGHT KNOCK IT OVER. 23 Q HERE, DO YOU SEE THAT? I BELIEVE IN YOUR 24 TESTIMONY TOWARD THE END OF FRIDAY, YOU DO RECALL RECEIVING 25 THE LETTER? 26 A YES. 27 Q AND THIS WAS IN RESPONSE TO A CONVERSATION YOU HAD 28 WITH MR. HULSY; ISN'T THAT CORRECT?
page229 1 A YES. 2 Q AND WHERE YOU WANTED TO FIND OUT IF THERE WAS TO 3 BE SOME WAY THAT YOU COULD PREVENT A JUDGMENT CREDITOR FROM 4 ATTACHING OR ATTACKING THE ASSETS OF THE LEGION; ISN'T THAT 5 CORRECT? 6 A YES. 7 Q AND YOU DID THAT BECAUSE YOU WERE CONCERNED ABOUT 8 THE MERMELSTEIN CASE? 9 A I DID THAT BECAUSE MR. CARTO WAS OVERLY CONCERNED 10 ABOUT THE MERMELSTEIN. 11 Q YOU WERE CONCERNED, TOO; ISN'T THAT CORRECT? 12 A YES. 13 Q IN FACT, YOU SENT HIM A LETTER TO THAT EFFECT; 14 ISN'T THAT CORRECT? 15 A I DON'T KNOW THAT I SENT HIM A LETTER. I MAY 16 HAVE. I SEEM TO RECALL IT WAS A PHONE CONVERSATION. 17 Q WELL, IF YOU TAKE A LOOK AT THE VERY FIRST 18 SENTENCE OF THE LETTER -- 19 A OKAY. I DID SEND A LETTER. 20 Q DOES THAT HELP REFRESH YOUR RECOLLECTION? 21 A YES. 22 Q I UNDERSTAND IT’s BEEN SOME TIME SINCE ALL OF 23 THESE EVENTS TRANSPIRED. I UNDERSTAND MEMORIES SOMETIMES 24 WANE. IT SAYSI AM IN RECEIPT OF YOUR LETTER OF MAY 20, 25 1991— THIS IS FROM MR. HULSY —REGARDING PRESERVATION 26 OF ASSETS IN THE EVENT OF AN ADVERSE RULING AT THE TRIAL 27 COURT LEVEL.28 YOU UNDERSTOOD THAT AT THE TIME, THAT WAS THE
page230 1 MERMELSTEIN CASE? 2 A IS THAT A QUESTION? 3 Q YES. 4 A YES. 5 Q AND YOU WERE CONCERNED ALSO ABOUT THE PRESERVATION 6 OF ASSETS BECAUSE IF MERMELSTEIN WAS SUCCESSFUL AT TRIAL AND 7 WAS ABLE TO ATTACH ALL THE ASSETS OF THE LEGION, THE LEGION 8 WOULD BE OUT OF BUSINESS; ISN'T THAT CORRECT? 9 A YES. 10 Q SO YOU WANTED TO FIND — YOU ALSO WANTED — YOU 11 HAD AN INTEREST IN FINDING A WAY OF HIDING THE ASSETS IN 12 CASE OF A JUDGMENT CREDITOR ATTACKING THE ASSETS? 13 A YES. 14 Q AND IN FACT, HE WRITES YOU IN THE VERY FOURTH 15 PARAGRAPH,I'M ADVISED THAT THE INVENTORY IS PRESENTLY 16 UNENCUMBERED, BUT YOU OWE A COUPLE OF HUNDRED THOUSAND 17 DOLLARS TO A VARIETY OF PEOPLE. THAT INVENTORY CAN BE 18 ENCUMBERED, EVEN THOUGH IT’s PRESENTLY NOT SECURITY FOR 19 EXISTING INDEBTEDNESS. YOU SHOULD DO THAT AS SOON AS 20 POSSIBLE. I CAN ASSIST YOU IN THAT.DO YOU SEE THAT? 21 A YES. 22 Q YOU FOLLOWED THROUGH ON THE ADVICE, DIDN'T YOU? 23 MR. MUSSELMAN: OBJECTION. RELEVANCE. 24 THE COURT: PARDON? 25 MR. MUSSELMAN: RELEVANCE. 26 THE COURT: WHAT’s THE RELEVANCE? 27 MR. WAIER: HE TALKED ABOUT — YOUR HONOR, ON DIRECT 28 EXAMINATION, HE TALKED ABOUT THAT ALL OF THESE ASSETS WERE
page231 1 FROM — AND MY UNDERSTANDING IS THEIR OFFER OF PROOF 2 WITH — WERE THAT THE ASSETS WERE MADE AVAILABLE FOR THE 3 PURPOSE OF FUNDING LITIGATION OVERSEAS, MAKING SURE THIS WAS 4 DONE, AND THAT’s THE RELEVANCE. IT ALSO GOES TO 5 IMPEACHMENT. HE STATED IT CAME FROM MR. CARTO, WHEN IT 6 DIDN'T. IT CAME FROM ATTORNEYS. 7 THE COURT: OVERRULED. 8 9 BY MR. WAIER: 10 Q YOU FOLLOWED THROUGH ON THAT ADVICE, DIDN'T YOU? 11 A I BELIEVE I DID TAKE SOME ACTIONS AFTER CONSULTING 12 WITH MR. CARTO ON IT THAT — THAT WOULD QUALIFY AS HAVING 13 FOLLOWED THROUGH WITH THAT, YES. 14 Q YOU FILED THE UCC-1 IN JULY OF THAT YEAR; ISN'T 15 THAT CORRECT? 16 A NO, I WAS ASKED TO SIGN THE UCC-1 AND I DID SO. I 17 DID NOT FILE IT. 18 Q BUT YOU SIGNED THE UCC-1 AND YOU UNDERSTOOD THAT 19 ENCUMBERED EVERYTHING TO THE LEGION; ISN'T THAT CORRECT? 20 A AT THAT TIME, I DID, YES. 21 Q AND YOU UNDERSTOOD AT THE TIME THAT YOU SIGNED 22 THAT, THAT PREVENTED THE USE OF THOSE ASSETS BY THE LEGION; 23 ISN'T THAT CORRECT? 24 A I DIDN'T KNOW REALLY WHAT SIGNING THAT UCC DID OR 25 DID NOT DO WITH RESPECT TO THE ASSETS OF THE CORPORATION. I 26 WAS TOLD BY MR. CARTO THAT IT WOULD PROTECT THE ASSETS, BUT 27 THAT WAS ALL I UNDERSTOOD. 28 Q IN FACT, ISN'T IT TRUE THAT MR. HULSY ALSO ADVISED
page232 1 YOU THAT ANOTHER WAY OF PRESERVING THE ASSETS WAS TO SET UP 2 A SEPARATE CHARITABLE CORPORATION TO HOLD THE ASSETS; ISN'T 3 THAT CORRECT? 4 A COULD I LOOK AT THE LETTER TO REFRESH MY MEMORY? 5 I DON'T RECALL THAT SPECIFICALLY. 6 Q TAKE A LOOK AT THE SECOND PAGE OF THE LETTER. 7 A OKAY. 8 Q DOES IT HELP REFRESH YOUR RECOLLECTION THAT HE 9 TOLD YOU OR ADVISED YOU, MR. MARCELLUS, TO SET UP A SEPARATE 10 CORPORATION TO TAKE THE ASSETS? 11 A YES. 12 Q AND INCLUDING ALL FUTURE ACCOUNTS RECEIVABLE, DO 13 YOU RECALL THAT AS BEING PART OF THE UCC-1 THAT YOU DID 14 PREPARE? 15 A YES. 16 Q AND YOU DIDN'T THINK THERE WAS ANYTHING WRONG WITH 17 THAT, DID YOU? 18 A AT THE TIME, NO. I JUST ASSUMED SINCE MR. CARTO 19 WAS ASKING ME TO DO IT, IT WAS LEGAL AND VALID. 20 Q DID YOU THINK WHEN MR. HULSY TOLD YOU TO DO THIS, 21 THAT WAS LEGAL AND VALID? 22 MR. MUSSELMAN: OBJECTION. HEARSAY. MR. HULSY -- 23 WHAT MR. HULSY TOLD HIM OUTSIDE OF COURT IS HEARSAY. 24 THE COURT: OVERRULED. IT’s NOT FOR THE TRUTH OF THE 25 MATTER, BUT TO SHOW THE STATE OF MIND WHY YOU DO OR DID. 26 THE WITNESS: MR. HULSY ACTUALLY TOLD ME NOTHING. HE 27 TOLD ME TO DO NOTHING. MR. CARTO REQUESTED THAT I CONTACT 28 HULSY AND ASK HIM ABOUT THE MATTER. HULSY REPLIED IN THIS
page233 1 LETTER, AND I THEN SIMPLY PASSED THE LETTER TO MR. CARTO. 2 3 BY MR. WAIER: 4 Q I NOTICED YOU DIDN'T ASK MR. HULSY TO RESPOND TO 5 MR. CARTO IN THIS LETTER, DID YOU? 6 A THAT’s CORRECT. 7 Q AND IN FACT, MR. CARTO IS NOT EVEN CC'D ON THE 8 LETTER, IS HE? 9 A AS SO OFTEN THE CASE IN SUCH MATTERS, NO. 10 Q AND IN FACT, YOU DIDN'T THINK THERE WAS ANYTHING 11 WRONG OR ILLEGAL WITH MR. HULSY’s OPINION THAT THE MONIES 12 AND ASSETS OF THE LEGION SHOULD GO INTO ANOTHER CORPORATION, 13 DID YOU? 14 MR. MUSSELMAN: OBJECTION. WITHOUT FOUNDATION. THAT 15 WAS MR. HULSY’s OPINION. 16 THE COURT: SUSTAINED. 17 18 BY MR. WAIER: 19 Q WELL, WITH RESPECT TO THE SECOND PARAGRAPH ON 20 PAGE 2 OF THIS EXHIBIT 174, DO YOU RECALL HAVING A TELEPHONE 21 CONVERSATION WITH HIM WHERE HE EXPRESSED AN OPINION ABOUT 22 SETTING UP A CHARITABLE CORPORATION IN CALIFORNIA? 23 A I'M SORRY, I DON'T RECALL THAT CONVERSATION. 24 Q DOES THAT HELP REFRESH YOUR RECOLLECTION AS TO 25 THAT CONVERSATION? 26 A ALL I CAN RECALL IS THAT THERE WAS SOME DISCUSSION 27 OF SETTING UP A CHARITABLE CORPORATION. 28 Q AND WITH RESPECT TO THE OPINION MR. HULSY HAS
page234 1 EXPRESSED IN THE LETTER, YOU DIDN'T THINK ANYTHING WAS 2 ILLEGAL OR UNETHICAL ABOUT THAT, DID YOU? 3 A NO. 4 Q YOU DIDN'T THINK THERE WAS ANYTHING, AT THIS POINT 5 IN TIME, ILLEGAL OR UNETHICAL ABOUT SETTING UP A SEPARATE 6 CORPORATION TO PUT ALL OF THE ASSETS, INCLUDING FUTURE 7 ACCOUNT RECEIVABLES, OF THE LEGION INTO, DID YOU? 8 A NO. 9 Q IN FACT, YOU BELIEVED THAT IT WAS OKAY BECAUSE THE 10 ATTORNEY FOR THE LEGION WAS TELLING YOU IT WAS OKAY; ISN'T 11 THAT RIGHT? 12 A AND BECAUSE MR. CARTO APPEARED TO THINK IT WAS 13 OKAY. 14 Q AND YOU UNDERSTOOD THAT MR. CARTO, AT THIS TIME, 15 WAS TAKING THE ADVICE OF MR. HULSY IN TAKING ANY ACTIONS HE 16 TOOK AT THIS TIME? 17 A IF THE UCC WERE FILED SUBSEQUENT TO THE LETTER, 18 THEN I WOULD SAY YES. 19 Q YOU TESTIFIED YESTERDAY THERE WAS ONE FILED IN 20 JULY '91 AFTER THE LETTER. DOES THAT HELP REFRESH YOUR 21 RECOLLECTION THAT MR. CARTO WAS ALSO FOLLOWING THE ADVICE OF 22 MR. HULSY? 23 A THAT WOULD SEEM THE CASE. 24 Q NOW, FROM 1985 TO 1993, YOU WEREN'T RESPONSIBLE 25 FOR MAINTAINING THE MINUTES OF THE LEGION, WERE YOU? 26 A MINUTES OF THE LEGION BOARD? 27 Q LEGION BOARD, YES. 28 A NO.
page235 1 Q THAT WAS THE FUNCTION OF LAVONNE FURR; ISN'T THAT 2 TRUE? 3 A I DON'T KNOW WHO PREPARED THE MINUTES. 4 Q WELL, YOU TESTIFIED THAT YOU KNEW SHE, LAVONNE 5 FURR, WAS SECRETARY/TREASURER OF THE LEGION FROM A PERIOD OF 6 TIME OF APPROXIMATELY 1985 THROUGH — OR THROUGH THE MIDDLE 7 OF 1993; ISN'T THAT CORRECT? 8 A CORRECT. 9 Q AND YOU UNDERSTOOD THAT, BY YOUR READING OF THE 10 BYLAWS, THAT THE SECRETARY/TREASURER IS RESPONSIBLE FOR 11 MAINTAINING AND KEEPING THE MINUTES OF THE CORPORATION; 12 ISN'T THAT TRUE? 13 A I UNDERSTOOD THAT TO BE TRUE, YES. 14 Q YOU UNDERSTOOD THAT PURELY FROM YOUR EXPERIENCE IN 15 THE PAST WITH THE CORPORATIONS, TOO; ISN'T THAT RIGHT? 16 A NO. I HAD LITTLE EXPERIENCE WITH CORPORATIONS IN 17 THE PAST. 18 Q WHO DID YOU BELIEVE IN 1983 WAS RESPONSIBLE FOR 19 TAKING DOWN THE MINUTES OF THE BOARD OF DIRECTORS? 20 A WELL, JUST BY ASSUMPTION, I WOULD HAVE SURELY 21 ASSUMED IT WAS THE SECRETARY OF THE CORPORATION. 22 Q AND THAT WAS LAVONNE FURR? 23 A YES. 24 Q NOW, ISN'T IT TRUE THAT SOMETIME IN 1991, YOU WERE 25 AWARE OF A WIRE TRANSFER OF MONEY FROM BANQUE CONTRADE TO 26 ANOTHER ENTITY? 27 A I THINK — YES, I THINK THERE WAS A WIRE TRANSFER 28 OF — AT ABOUT THAT TIME.
page236 1 Q YOU WERE AWARE OF IT, TOO; ISN'T THAT CORRECT? 2 A YES. 3 Q BECAUSE YOU ACTUALLY SAW THE WIRE TRANSFER? 4 A NO. I'M SORRY. I WAS AWARE OF THE MONEY COMING 5 INTO THE CORPORATION, BUT I DON'T BELIEVE AT THAT TIME I SAW 6 ANY DOCUMENT THAT — THAT DETAILED WHERE THAT MONEY CAME 7 FROM. TYPICALLY, THESE KIND OF DOCUMENTS WOULD NOT BE SHOWN 8 TO ME. 9 Q WELL YOU WERE AWARE IN SEPTEMBER OF 1991 THAT THE 10 LEGION HAD RECEIVED $100,000, ISN'T THAT CORRECT, FROM THE 11 BANQUE CONTRADE? 12 A I'M NOT SURE OF THE AMOUNT. IF I COULD SEE A 13 DOCUMENT OR SOMETHING, IT MIGHT REFRESH MY MEMORY. 14 Q DO YOU RECALL THE TRIAL, HISTORICAL EDUCATION 15 FOUNDATION VERSUS THE INSTITUTE FOR HISTORICAL REVIEW IN 16 FRONT OF JUDGE ROSS? 17 A YES. 18 Q DO YOU RECALL YOU TESTIFIED? 19 A I TESTIFIED IN THAT CASE, YES. 20 Q AND DO YOU RECALL MY QUESTIONING YOU ABOUT THAT? 21 A YES, VAGUELY. 22 Q LET ME HAND YOU A COPY OF THE TRANSCRIPT OF THAT 23 CASE. REFER YOU TO PAGE 74, 75 AND 76, ASK YOU TO READ THAT 24 AND TELL ME IF THAT DOESN'T REFRESH YOUR RECOLLECTION TO 25 WHAT YOU TESTIFIED TO UNDER PENALTY OF PERJURY, STARTING -- 26 ACTUALLY, THIS STARTS FROM PAGE 71. IF YOU WOULD READ THAT 27 TO YOURSELF, STARTING WITH — I'M SORRY, LET ME GO BACK. 28 STARTING WITH LINE 26 ON PAGE 70, AND READ THAT TO PAGE --
page237 1 THE TOP OF LINE 1 PAGE 75, SEE IF THAT DOESN'T REFRESH YOUR 2 RECOLLECTION SEPTEMBER OF 1991, YOU WERE AWARE OF A $100,000 3 BANK TRANSFER OF FUNDS TO THE LEGION. 4 A I THINK I UNDERSTAND WHAT THIS IS NOW, YES. 5 Q AND YOU UNDERSTOOD, SEPTEMBER 1991, THE LEGION, 6 THROUGH H.E.F., HAD RECEIVED A BANK TRANSFER OF $100,000; 7 ISN'T THAT CORRECT? 8 A NO. I BELIEVE AS I TESTIFIED HERE, IT WAS MY 9 UNDERSTANDING THAT THAT MONEY WAS COMING FROM SOMETHING 10 HAVING TO DO WITH THE FARREL TRUST. 11 Q YOU UNDERSTOOD THAT MONEY WAS COMING FROM THE 12 FARREL ESTATE; ISN'T THAT CORRECT? 13 A THAT WAS MY UNDERSTANDING. 14 Q YOU GOT THAT UNDERSTANDING FROM MR. CARTO; ISN'T 15 THAT CORRECT? 16 A OR MRS. CARTO. 17 Q AND THEY HAD TOLD YOU THAT AS EARLY AS JANUARY OF 18 1991, THAT YOU WOULD BE RECEIVING THAT MONEY; ISN'T THAT 19 CORRECT? 20 A I DON'T RECALL THAT. 21 Q DID YOU ASK THEM AT THE POINT IN TIME THAT YOU SAW 22 THIS MONEY TRANSFER WHY IT WAS BEING TRANSFERRED? 23 A I DON'T RECALL THAT, NO. 24 Q YOU JUST TOOK THE MONEY? 25 A PROBABLY. 26 Q DID YOU BELIEVE THAT IT WAS WITHIN YOUR FUNCTION 27 AS THE MANAGING OFFICER TO FIND OUT ABOUT THE MONEY OF THE 28 FARREL ESTATE BACK IN 1991?
page238 1 A NO. 2 Q YOU DIDN'T BELIEVE THAT IN WHAT YOU ALREADY 3 PROFESSED AS RUNNING THE DAY-TO-DAY AFFAIRS OF THE LEGION IN 4 1990 AND 1991, YOU HAD NO DUTY ON BEHALF OF THE CORPORATION 5 TO FIND OUT WHAT MONIES HAD COME FROM THE FARREL ESTATE? 6 A NOT WHEN ELISABETH AND WILLIS WERE HANDLING IT. 7 Q I UNDERSTAND LAVONNE FURR WAS HANDLING IT, TOO? 8 A NO. 9 Q DID YOU EVER BOTHER — YOU UNDERSTOOD — STRIKE 10 THAT. 11 YOU UNDERSTOOD THAT LAVONNE FURR AND LEWIS FURR 12 WERE DIRECTORS IN 1990 AND 1991; ISN'T THAT TRUE? 13 A YES. 14 Q DID YOU EVER BOTHER, AS MANAGING OFFICER, TO 15 CONTACT THE LEGION, CONTACT LEWIS OR LAVONNE FURR TO FIND 16 OUT IF IN FACT MR. CARTO HAD ANY AUTHORITY WHATSOEVER TO 17 DISPENSE WITH THE FARREL ESTATE AS HE SAW FIT? 18 A NO. 19 Q BUT YOU KNEW AT THAT TIME HE HAD THAT AUTHORITY; 20 ISN'T THAT CORRECT? 21 A CERTAINLY APPEARED TO HAVE THAT AUTHORITY. 22 Q AND YOU UNDERSTOOD THAT? 23 A UNDERSTOOD IT? 24 Q YES. 25 A WHAT DO YOU MEAN? IT LOOKED TO ME AS THOUGH HE 26 HAD THAT AUTHORITY. IT WAS FINE WITH ME. 27 Q YOU UNDERSTOOD HE GOT THAT AUTHORITY FROM LEWIS 28 AND LAVONNE FURR; ISN'T THAT CORRECT?
page239 1 A I ASSUMED THAT. 2 Q AND DID YOU EVER BOTHER TO CALL LEWIS AND LAVONNE 3 FURR UP OR COMMUNICATE WITH THEM IN ANY FASHION TO MAKE SURE 4 THAT WAS CORRECT? 5 A YES. 6 MR. MUSSELMAN: VAGUE TO TIME. 7 8 BY MR. WAIER: 9 Q 1990, 1991. 10 A NO. 11 Q YOU KNEW IN 1990 THAT THE FARREL ESTATE WAS GOING 12 TO BE SETTLED; ISN'T THAT CORRECT? 13 A I DID, PROBABLY AS EARLY AS 1990, THAT — THAT 14 THERE WAS ENCOURAGING SIGNS OF A SETTLEMENT. YES, PROBABLY 15 NO EARLIER THAN 1990. 16 Q BUT AT LEAST AS TO JANUARY OF 1991, YOU KNEW THE 17 ESTATE WAS SETTLED? 18 A NO, I DID NOT KNOW THAT. 19 Q YOU KNEW IT WAS SETTLED WHEN YOU FIRST STARTED 20 RECEIVING MONEY FROM THE BANQUE CONTRADE, DIDN'T YOU? 21 A I DON'T KNOW HOW THE LAW WORKS, PARTICULARLY IT 22 BEING TAKING PLACE IN — IN THE FOREIGN COUNTRIES. I 23 THOUGHT MAYBE THERE WAS SOME PARTIAL RELEASE OR PARTIAL 24 SETTLEMENT OR WHAT. I DIDN'T KNOW WHAT THE SETTLEMENT WAS. 25 I DIDN'T SEE ANY SETTLEMENT DOCUMENTS UNTIL 1993. 26 Q AND YOU WEREN'T CONCERNED ABOUT IT IN 1990, WERE 27 YOU? 28 A IT WAS IN THE HANDS OF MR. CARTO. I HAD NO REASON
page240 1 TO BE CONCERNED. 2 Q IT WAS IN THE HAND OF THE LEGION BOARD OF 3 DIRECTORS AT THAT TIME; ISN'T THAT CORRECT? 4 A I ASSUMED IT WAS. YES. 5 Q IN 1985 — YOU INDICATED YOU WERE MANAGING OFFICER 6 IN 1985? 7 A DIRECTOR, MANAGING DIRECTOR. 8 Q SO WE DON'T GET CONFUSED, YOU WERE NEVER ON THE 9 BOARD OF DIRECTORS; IT WAS MERELY A TITLE? 10 A CORRECT. 11 Q YOU DIDN'T VOTE ON CORPORATE MATTERS; ISN'T THAT 12 CORRECT? 13 A I DID NOT. 14 Q OKAY. IN 1985, DID YOU — HAD YOU HEARD -- 15 STRIKE THAT. 16 AFTER YOU LEARNED THAT JEAN FARREL-EDISON HAD DIED 17 IN 1985, DID YOU HAVE ANY CONVERSATIONS WITH MR. CARTO? 18 A YES. 19 Q IN THE CONVERSATIONS, DID THOSE CONVERSATIONS DEAL 20 WITH THE FARREL-EDISON ESTATE? 21 A YES. 22 Q AND IN FACT, DIDN'T HE TELL YOU THAT THE WILL OF 23 JEAN FARREL-EDISON DID NOT BEQUEATH ANY OF HER ASSETS TO THE 24 LEGION, BUT RATHER, HAD BEQUEATHED THEM TO AN INDIVIDUAL BY 25 THE NAME OF JOAN ALTHAUS? 26 A NO, HE DID NOT MENTION THAT. 27 Q WHAT DID HE TELL YOU ABOUT THE FARREL-EDISON 28 ESTATE?
page241 1 A AFTER HER DEATH, WE HAD ONE OR TWO CONVERSATIONS 2 AND IT WAS MY UNDERSTANDING, FROM THE CONVERSATIONS WITH 3 MR. CARTO AND MRS. CARTO, THAT THE ESTATE WAS FANTASTIC. 4 THERE WERE PERHAPS, I WAS TOLD AT THIS TIME, SEVERAL 5 MILLIONS OF DOLLARS. AND THEN I THINK JUST ABOUT THE TIME 6 WHEN I — UP UNTIL THE TIME I LEFT THE CORPORATION, I 7 UNDERSTOOD FROM CONVERSATIONS WITH MR. AND MRS. CARTO THAT 8 THERE WAS GOING TO BE SOME — IT WAS GOING TO BE 9 CONTESTED. SOMETHING WAS GOING TO BE CONTESTED ABOUT, AND 10 IT MIGHT TAKE A BIT OF A FIGHT BEFORE THE LEGION COULD GET 11 WHAT MRS. FARREL INTENDED IT TO RECEIVE. 12 Q ISN'T IT TRUE MR. CARTO AND/OR MRS. CARTO TOLD YOU 13 AT THIS TIME THIS FIGHT WOULD HAVE TO BE WAGED OVERSEAS? 14 A I UNDERSTOOD, YES, IT WOULD BE SWITZERLAND WHERE I 15 HAD THE IDEA IT WOULD BE. 16 Q DIDN'T THEY TELL YOU THAT IT WAS GOING TO BE A 17 VERY RISKY TYPE OF LITIGATION, THAT IT WOULD BE DIFFICULT 18 BECAUSE IT WAS OVERSEAS? 19 A I WASN'T UNDER THE IMPRESSION THAT IT WAS RISKY, 20 BUT ONLY THAT IT WOULD BE SOMEWHAT DIFFICULT LOGISTICALLY 21 BECAUSE IT WAS TAKING PLACE OVERSEAS. 22 Q IN FACT, DIDN'T THEY TELL YOU IT WOULD BE 23 DIFFICULT BECAUSE HERE YOU HAVE A SWISS RESIDENT OR SOMEONE 24 EUROPEAN RESIDENT OVER IN EUROPE WHO WAS NAMED AS THE 25 BENEFICIARY AND YOU HAD TO GO UP AGAINST THOSE TYPE OF ODDS? 26 A WELL, SURELY THAT WAS MY UNDERSTANDING AT THAT 27 TIME. 28 Q AND IN FACT, MR. AND MRS. CARTO TOLD YOU THAT
page242 1 THERE WAS NO GIVENS THAT ANYTHING WOULD BE RECEIVED FROM THE 2 FARREL-EDISON ESTATE EVEN IF THEY CONTESTED IT; ISN'T THAT 3 TRUE? 4 A NO, THAT, ACTUALLY, QUITE THE OPPOSITE OF THAT. I 5 THINK MR. AND MRS. CARTO WERE EXACERBATED ABOUT HAVING TO BE 6 INVOLVED IN THE LITIGATION. BUT AT THE SAME TIME, THEY 7 ENCOURAGED ME THAT — THAT BECAUSE THE ESTATE WAS SO LARGE 8 AND BECAUSE — THAT JEAN HAD SPECIFICALLY INTENDED FOR THE 9 LEGION TO RECEIVE THE ASSETS, THAT WE WERE BOUND TO COME OUT 10 WITH SOMETHING QUITE SUBSTANTIAL, AS LONG AS WE GOT INVOLVED 11 IN THE LITIGATION AND FOUGHT FOR WHAT WAS RIGHT FOR THE 12 LEGION. 13 Q DID YOU CONTACT ANY ATTORNEYS AT THIS TIME AS PART 14 OF YOUR MANAGING DIRECTOR DUTIES TO SEE IF ANY ATTORNEYS 15 WOULD HANDLE THAT MATTER FOR YOU FOR THE LEGION? 16 A MR. CARTO HAD TAKEN THE ENTIRE THING OUT OF MY 17 HANDS. 18 MR. WAIER: I'M GOING TO MOVE TO STRIKE AS 19 NONRESPONSIVE. 20 THE COURT: SUSTAIN THE OBJECTION. I THINK IT CAN BE 21 ANSWEREDYESORNO,AND ON REDIRECT, THEY CAN GO INTO 22 IT. 23 THE WITNESS: THE ANSWER IS I DON'T RECALL CONTACTING 24 ANY ATTORNEYS, NO. 25 26 BY MR. WAIER: 27 Q DID YOU ASK MR. CARTO AT THAT POINT IN TIME HOW 28 MUCH IT WOULD COST TO WAGE THAT FIGHT OVERSEAS WITH RESPECT
page243 1 TO THE CONTEST ON THE FARREL-EDISON ESTATE? 2 A AT WHAT TIME PERIOD? 3 Q JUST BEFORE YOU LEFT, 1986. 4 A I DID HAVE A DISCUSSION WITH HIM ABOUT THE 5 POSSIBILITY OF RAISING FUNDS TO HELP SECURE THE ESTATE. BUT 6 I DID NOT ASK HIM SPECIFICALLY HOW MUCH IT WAS GOING TO COST 7 TO LITIGATE THE MATTER. NO, I DON'T THINK I DID. 8 Q YOU LEFT THAT IN WHOSE HANDS? 9 A IN MR. Carto’s HANDS. 10 Q THE REASON WHY YOU LEFT IT IN MR. Carto’s HANDS, 11 HE MADE AN AGREEMENT WITH THE CORPORATION, THE LEGION, 12 THROUGH THE BOARD OF DIRECTORS, CONCERNING HIS INVOLVEMENT 13 IN RECOVERY OF THAT ESTATE; ISN'T THAT TRUE? 14 A IT’s NOT ACTUALLY THAT I LEFT — YOU HAVE CAUSE 15 AND EFFECT REVERSED. I DIDN'T LEAVE IT IN MR. Carto’s 16 HANDS. MR. CARTO DID NOT WANT TO PUT IT IN MY HANDS, IS THE 17 WAY IT WORKED. 18 Q WELL, BECAUSE YOU WERE NOT AUTHORIZED; ISN'T THAT 19 CORRECT? 20 A MR. CARTO HAD FAR MORE AUTHORITY IN THE 21 CORPORATION THAN I DID. 22 Q HE GOT THAT AUTHORITY THROUGH THE BOARD OF 23 DIRECTORS; ISN'T THAT TRUE? 24 A THAT WAS MY UNDERSTANDING, YES. 25 Q THAT WAS LEWIS AND LAVONNE FURR? 26 A IT WAS WHOEVER THE BOARD WAS. AND LEWIS -- 27 LAVONNE FURR WAS THE SPOKESPERSON FOR THE BOARD. 28 Q GO BACK TO EXHIBIT 2.
page244 1 A ALL RIGHT. 2 Q YOU WILL RECALL THESE BYLAWS OF THE LEGION FOR 3 SURVIVAL OF THE FREEDOM, INC.? 4 A YES. 5 Q DO YOU SEEINCORPORATORS? WHEN YOU READ THESE 6 BYLAWS, WHO — DID YOU UNDERSTAND WHAT WAS MEANT BY THE 7 TERMINCORPORATORS? 8 A MR. WAIER, I DID NOT REVIEW OR READ THE BYLAWS 9 PROBABLY UNTIL 1993. 10 Q WELL, YOU UNDERSTOOD, DID YOU NOT, THAT THE BOARD 11 OF DIRECTORS WERE APPOINTED BY THE INCORPORATORS PRIOR TO 12 1993? 13 A NO, I HAD NO SUCH UNDERSTANDING. 14 Q YOU CERTAINLY BECAME AWARE OF THAT WHEN YOU READ 15 THE BYLAWS? 16 MR. BEUGELMANS: WHICH BYLAWS? 17 MR. WAIER: 1993, EXHIBIT 2. 18 MR. MUSSELMAN: IS THAT A QUESTION? 19 20 BY MR. WAIER: 21 Q YES. YOU UNDERSTOOD IN 1993 WHEN YOU READ THE 22 BYLAWS, EXHIBIT 2, THAT THE INCORPORATORS APPOINTED AND HAD 23 THE DUTY TO APPOINT DIRECTORS IN THE LEGION? 24 A I UNDERSTOOD THAT’s WHAT IT SAID ON THE PAPER, BUT 25 I DIDN'T KNOW IF THESE WERE VALID BYLAWS OR SUPERCEDED 26 OR — OR NOT. I KNOW THIS IS WHAT THIS PAPER SAID. 27 Q YOU UNDERSTOOD THAT PRIOR TO THE MIDDLE OF 1993, 28 THAT MR. CARTO, WHILE YOU WERE AT THE LEGION, APPOINTED
page245 1 DIRECTORS; ISN'T THAT CORRECT? 2 A PRIOR TO MR. Carto’s TERMINATION, I UNDERSTOOD 3 THAT? 4 Q YEAH, MR. CARTO. 5 A I UNDERSTOOD THAT’s WHAT THE BYLAWS SAID. I 6 DIDN'T UNDERSTAND THOSE WERE THE CORRECT BYLAWS, BUT I 7 UNDERSTOOD THAT’s WHAT THESE BYLAWS SAID. 8 Q YOU UNDERSTOOD MR. CARTO GOT HIS AUTHORITY FROM 9 THE BYLAWS TO APPOINT DIRECTORS; ISN'T THAT CORRECT? 10 A I'M NOT SURE IF THAT THOUGHT OCCURRED OR NOT. 11 MR. BEUGELMANS: OBJECTION. 12 13 BY MR. WAIER: 14 Q BUT YOU DID KNOW HE WAS APPOINTING DIRECTORS ON AN 15 ANNUAL BASIS; ISN'T THAT TRUE? 16 A OH, TO THE CONTRARY. AU CONTRAIRE. 17 Q YOU DID NOT KNOW HE EVER APPOINTED A DIRECTOR? 18 A NO. BASED ON THE SCANT MINUTES I RECEIVED, IT 19 LOOKED AS THOUGH THEY WERE SELF-PERPETUATING. 20 Q SO YOU ARE UNAWARE OF ANY DIRECTOR THAT 21 WILLIS CARTO APPOINTED TO THE BOARD? 22 A AS I SIT HERE, I CAN'T THINK OF A DIRECTOR THAT 23 WILLIS CARTO APPOINTED TO THE BOARD. I COULD BE SHOWN 24 WRONG, BUT I DON'T SEEM TO RECALL AT ANY TIME. 25 Q SIR, DIDN'T TOM KERR TELL YOU WILLIS APPOINTED HIM 26 TO THE BOARD? 27 A NO, HE NEVER SAID SUCH A THING. 28 Q WELL, HOW DID YOU UNDERSTAND MR. KERR TO BE
page246 1 APPOINTED TO THE BOARD? WHO APPOINTED TOM KERR TO THE 2 BOARD? 3 A IT WAS MY UNDERSTANDING HE AGREED TO BE ON THE 4 BOARD, AND THAT HE WAS — THEN, IN A BOARD MEETING, HE 5 WAS — HOWEVER THEY DO IT. THEY ELECT SOMEBODY TO BE ON 6 THE BOARD AND NOMINATE. 7 Q WHO DO YOU THINK BROUGHT MR. KERR TO THE BOARD FOR 8 THAT AGREEMENT? 9 A PROBABLY MR. CARTO. 10 Q IN FACT, ISN'T IT TRUE THAT EVERY SINGLE DIRECTOR 11 PRIOR TO WHAT YOU TERM MR. Carto’s TERMINATION WAS BROUGHT 12 TO THE BOARD, FOR WANT OF A BETTER TERM, BY MR. CARTO? 13 A THAT MAY VERY WELL BE TRUE. 14 Q YOU UNDERSTOOD THAT; ISN'T THAT CORRECT? 15 A NO. I DIDN'T KNOW WHO ALL THE DIRECTORS WERE. I 16 MEAN, THIS BOARD WAS SORT OF NEBULOUS. I DIDN'T KNOW WHO 17 REALLY WAS ON IT, WHO WASN'T ON IT DURING THAT TIME PERIOD; 18 WHAT TIME PERIODS THEY WERE OFF. I MEAN, PEOPLE WHO WERE 19 DEAD WERE ON THE BOARD. MR. WEBER WAS ON THE BOARD BUT 20 DIDN'T KNOW IT UNTIL THREE YEARS LATER. OTHER DIRECTORS 21 WERE ON THE BOARD. WE FOUND OUT IN 1993 THAT THEY DIDN'T 22 REALIZE THEY WERE ON THE BOARD. THEY HAD NEVER BEEN TOLD. 23 Q YOU FOUND THAT OUT THROUGH YOUR REVIEW OF VARIOUS 24 MINUTES IN 1993? 25 A NO. WE FOUND OUT BY TALKING TO THESE — TO THE 26 PEOPLE. YES, I'M SORRY, THAT IS CORRECT. YES, WE REVIEWED 27 THE MINUTES AND SAW THEIR NAMES AND SPOKE WITH THEM. 28 Q ISN'T IT TRUE THAT YOU WERE RESPONSIBLE FOR A
page247 1 PERIOD, OF FILING WITH THE CALIFORNIA SECRETARY OF STATE, A 2 STATEMENT FOR A NONPROFIT CORPORATION WHERE YOU LISTED THE 3 DIRECTORS? 4 A YES. 5 Q FOR WHAT PERIOD OF TIME DID YOU DO THAT? 6 A I'M NOT SURE IF I DID THOSE FILINGS. THEY WERE 7 PREPARED BY MRS. CARTO. I MAY HAVE SIGNED THEM. AND TO MY 8 KNOWLEDGE, THEY — I DID IT FROM PERHAPS '83, MAYBE AS 9 EARLY AS '83, ON THROUGH THE — WHEN I FINALLY RESIGNED 10 FROM THE CORPORATION IN '94. I HAD — I SAW THEM AT 11 LEAST — I SAW THESE FILINGS AT LEAST. 12 Q YOU KNEW WHO THE DIRECTORS WERE? YOU PUT YOUR 13 NAME TO IT, DIDN'T YOU? 14 A I KNEW WHO MRS. CARTO AND MR. CARTO REPRESENTED TO 15 ME TO BE THE DIRECTORS. 16 Q WELL, YOU PUT YOUR NAME AND YOU REPRESENTED TO THE 17 SECRETARY OF STATE BY PLACING YOUR NAME ON THAT DOCUMENT 18 THAT THOSE WERE THE DIRECTORS; ISN'T THAT TRUE? 19 A IF I DID SIGN THE DOCUMENTS, THEN YES, THAT’s WHAT 20 I DID. 21 Q AND YOU CERTAINLY WOULDN'T MISLEAD THE SECRETARY 22 OF STATE, WOULD YOU? 23 A NOT INTENTIONALLY, SIR. 24 Q YOU ARE AWARE THAT THERE IS AN AGREEMENT BETWEEN 25 THE LEGION AND WILLIS CARTO CONCERNING THE FARREL-EDISON 26 ESTATE; ISN'T THAT TRUE? 27 A I HAVE SEEN SOME MINUTES OR OTHER DOCUMENT 28 THAT — THAT PURPORTS OR SHOWS SOME KIND OF A CONTRACT OR
page248 1 RELATIONSHIP BETWEEN MR. CARTO AND THE LEGION WITH RESPECT 2 TO THE FARREL ESTATE, YES. 3 Q IN FACT, YOU ARE AWARE THAT LAVONNE FURR HAS 4 TESTIFIED UNDER OATH THAT SUCH AN AGREEMENT WAS IN 5 EXISTENCE; ISN'T THAT TRUE? 6 A I'M SORRY, I HAVEN'T READ ANY OF OR SEEN ANY OF 7 MRS. FURR’s TESTIMONY. 8 Q WEREN'T YOU TOLD THAT, THAT SHE STATED THAT THERE 9 WAS SUCH AN AGREEMENT? 10 MR. MUSSELMAN: OBJECTION. RELEVANCE TO WHAT WAS TOLD 11 BY WHOM. THE LAWYERS? 12 THE COURT: SUSTAINED. 13 14 BY MR. WAIER: 15 Q DID MRS. FURR TELL YOU THAT? 16 A I'M SORRY. TELL ME WHAT? 17 Q DID MRS. FURR TELL YOU THAT THE LEGION HAD ENTERED 18 INTO AN AGREEMENT WITH MR. CARTO IN THE FIRST PART OF 1986 19 CONCERNING THE FARREL-EDISON ESTATE AND RECOVERY OF THE 20 FARREL-EDISON ESTATE? 21 A THE ONLY CONVERSATION I HAD WITH MRS. FURR, SHE 22 EMPHATICALLY TOLD ME HE WAS NOT. 23 MR. WAIER: MOVE TO STRIKE. NONRESPONSIVE. 24 THE COURT: OVERRULED. 25 THE WITNESS: HE WAS NOT ENTITLED TO DO WHAT THEY 26 WANTED WITH THIS MONEY AND HE WAS NOT A GENERAL AGENT, THAT 27 HE WAS ONLY APPOINTED AGENT FOR SPECIFIC THINGS. 28 MR. WAIER: I'M GOING TO MOVE TO STRIKE THE TESTIMONY
page249 1 AS NONRESPONSIVE. 2 THE COURT: OVERRULED. 3 4 BY MR. WAIER: 5 Q NOW LET ME REFER YOU TO EXHIBIT 6 THAT YOU HAVE IN 6 YOUR BOOK. 7 A MINUTES OF MARCH 5, 1985. 8 Q THAT’s CORRECT. 9 A OKAY. I HAVE THEM HERE. 10 Q THIS IS BEFORE JEAN FARREL-EDISON DIED; ISN'T THAT 11 CORRECT? 12 A I THINK SO. SHE DIED IN AUGUST, WASN'T IT? I'M 13 NOT SURE EXACTLY. I THINK THIS WAS BEFORE SHE DIED. 14 Q YOU ORIGINALLY SAID 1994, AND YOU CORRECTED 15 YOURSELF TO — I MEAN 1984. YOU CORRECTED YOURSELF TO 16 1985. DO YOU RECALL THAT? 17 A YES. 18 Q THESE MINUTES REFER TO THE ARSON OF THE 19 CORPORATION’s OFFICE AND WAREHOUSE. DO YOU SEE THAT THAT 20 OCCURRED JULY 4, 1984? 21 A YES. 22 Q THAT PRETTY WELL DEVASTATED THE LEGION, DID IT 23 NOT? 24 A IT WAS A DEVASTATING BLOW. IT DID NOT DEVASTATE 25 THE LEGION. 26 Q NOT ONLY DID THE OFFICES BURN DOWN, THE INVENTORY 27 BURNED UP, TOO, DID IT NOT? 28 A PART OF THE INVENTORY.
page250 1 Q SUBSTANTIAL PORTION OF THE INVENTORY; ISN'T THAT 2 TRUE? 3 A I WOULD SAY TWO-THIRDS. 4 Q BUT THAT’s PRETTY SUBSTANTIAL, WOULDN'T YOU AGREE? 5 A THE INVENTORY THAT DID GET BURNED WAS NOT — WAS 6 MORE EASILY REPLACEABLE THAN WHAT DID NOT GET BURNED. IN 7 THAT SENSE, THOUGH, IT WAS DEVASTATING THAT INVENTORY GOT 8 BURNED AND THOUGH MANY WAS REPLACEABLE. 9 Q WHEN YOU SAYREPLACEABLE,IT WOULD COST MONEY TO 10 REPLACE THAT? 11 A SURELY. 12 Q AND IT WAS GOING TO COST MONEY TO FIND NEW 13 OFFICES; ISN'T THAT TRUE? 14 A YES. 15 Q IN FACT, IT DID COST A SUBSTANTIAL AMOUNT OF 16 MONEY; ISN'T THAT TRUE? 17 A TO — TO — FINDING OFFICES, NO, COST 18 PRACTICALLY NOTHING. 19 Q YOU WILL NOTICE HERE THAT THERE INDICATES A LOSS 20 ESTIMATED AT SOME $400,000. DO YOU SEE THIS? THIS IN 21 EXHIBIT 6. 22 A YES. 23 Q DO YOU HAVE ANY REASON TO DISBELIEVE THAT WAS THE 24 ESTIMATED LOSS? 25 A WELL, I BELIEVE IT’s AT A RETAIL FIGURE. 26 Q DO YOU BELIEVE THAT’s A CORRECT FIGURE? 27 A AT RETAIL? IT’s PROBABLY FAIRLY ACCURATE. 28 Q AND IT SAYS ALSO — SAID THAT VIRTUALLY ALL
page251 1 PROPERTY OWNED BY THE CORPORATION WAS DESTROYED. DO YOU 2 DISAGREE WITH THAT STATEMENT? 3 AVIRTUALLYMEANINGALMOST ALL,RIGHT? 4 Q YES. 5 A NO. NO, I WOULDN'T SAYVIRTUALLY.VIRTUALLY 6 COULD BE SAID, BUT SITTING HERE TODAY, I WOULDN'T SAY 7VIRTUALLYIS A CORRECT TERM. AND THERE’s A REASON FOR 8 THAT, IF YOU WOULD LIKE ME TO EXPLAIN. 9 Q YOU WILL HAVE PLENTY OF OPPORTUNITY TO EXPLAIN 10 WHEN COUNSEL ASKS YOU THOSE QUESTIONS, MR. MARCELLUS. 11 A VERY GOOD. 12 Q NOW, WITH REGARDING THAT, THAT DID AFFECT THE 13 CORPORATION FINANCIALLY, DID IT NOT? 14 A YES. 15 Q AND ALSO THE MERMELSTEIN LITIGATION WAS COMMENCED 16 AT THIS TIME; ISN'T THAT TRUE? 17 A I DIDN'T THINK IT WAS COMMENCED — MAYBE IT WAS. 18 Q TAKE A LOOK AT THE MINUTES OF MARCH 5, 1985. DOWN 19 ON THE FOURTH PARAGRAPH,THE UPCOMING MERMELSTEIN TRIAL WAS 20 ALSO DISCUSSED WHICH IS NOW SCHEDULED FOR TRIAL THIS YEAR. 21 THE TRIAL WILL BE VERY EXPENSIVE AND TIME CONSUMING.22 A YES, YOU SAIDCOMMENCED,AND THAT THREW ME OFF. 23 Q IT HAD ALREADY BEEN COMMENCED AT THIS TIME? 24 A THAT’s CORRECT. 25 Q YOU UNDERSTOOD THAT WAS GOING TO BE A VERY 26 EXPENSIVE AND TIME-CONSUMING TRIAL? 27 A PERHAPS NOT TO THE DEGREE IT’s STATED HERE. 28 Q THESE ARE THE BOARD — THESE ARE THE BOARD OF
page252 1 DIRECTORS THAT ARE — THAT ARE MAKING THESE STATEMENTS; 2 ISN'T THAT TRUE? 3 A NO. 4 Q WELL, IT SAYS — TAKE A LOOK AT THE SECOND PAGE, 5 LAVONNE FURR -- 6 A YES. 7 Q SHE WAS THE BOARD OF DIRECTOR AT THIS TIME? 8 A YES, MY UNDERSTANDING, SHE WAS. 9 Q DO YOU RECOGNIZE HER SIGNATURE? 10 A YES. 11 Q YOU ALREADY ACKNOWLEDGED SHE WAS THE 12 SECRETARY/TREASURER AT THIS POINT IN TIME, MARCH 1985? 13 A YES. 14 Q SO ARE YOU SAYING THAT HER UNDERSTANDING WAS 15 INCORRECT? 16 MR. MUSSELMAN: OBJECTION. WITHOUT FOUNDATION TO WHAT 17 HER UNDERSTANDING WAS. 18 MR. WAIER: WELL, THAT THE TRIAL, MERMELSTEIN, WAS TO 19 BE EXPENSIVE. 20 THE COURT: COUNSEL, YOU KNOW, WHEN THERE’s AN 21 OBJECTION, I GET TO RULE. 22 MR. WAIER: I APOLOGIZE. 23 THE COURT: OVERRULE THE OBJECTION. 24 THE WITNESS: YES. AS I SIT HERE, I CAN SEE HOW 25 LAVONNE FURR COULD HAVE THAT OPINION AND WRITE IT INTO THE 26 MINUTES, YES. 27 28
page253 1 BY MR. WAIER: 2 Q NOW THAT THE ASSETS OF THE LEGION WERE VIRTUALLY 3 DESTROYED, THE ONLY WAY THAT MONEY COULD COME TO FUND THAT 4 LITIGATION, WHICH WAS GOING TO BE EXPENSIVE AND TIME 5 CONSUMING, WOULD BE THROUGH DONATIONS; ISN'T THAT CORRECT? 6 A WE HAD ALREADY RAISED A BUNCH OF MONEY ON 7 DONATIONS. 8 Q WHERE DID THAT MONEY GO TO? 9 A MOST — A LOT OF IT MYSTERIOUSLY DISAPPEARED ON 10 MR. Carto’s F.D.F.A. IN 1985, I BELIEVE. 11 Q YOU SAYMYSTERIOUSLY.SIR, DID YOU TELL 12 DONATORS, YOURSELF — I DON'T KNOW HOW MYSTERIOUS IT IS -- 13 AS WE POINTED OUT THE OTHER DAY, DONATORS NOT TO PUT IT INTO 14 THE LEGION, TO PUT IT IN F.D.F.A.? 15 A TRUE, THAT’s NOT THE MYSTERIOUS PART. THAT WAS 16 THE — THE PART I KNEW ABOUT. 17 Q IN FACT, JEAN FARREL-EDISON WASN'T THE ONLY 18 INDIVIDUAL YOU TOLD TO PUT MONEY INTO THE F.D.F.A.; ISN'T 19 THAT TRUE? 20 A I MAY HAVE ASKED SEVERAL OTHERS TO MAKE CHECKS OUT 21 TO F.D.F.A., YES. 22 Q IN FACT, YOU WERE TELLING EVERYONE NOT TO PUT 23 MONEY INTO THE LEGION BECAUSE OF THE MERMELSTEIN LITIGATION 24 IN 1985, BUT TO PUT IT INTO ORGANIZATIONS SUCH AS F.D.F.A.; 25 ISN'T THAT TRUE? 26 A THERE MIGHT HAVE BEEN SOME POINT THERE IN WHICH I 27 WAS INSTRUCTED TO DO THAT AND DID DO IT, YES. 28 Q WELL, MR. CARTO DIDN'T WRITE THESE LETTERS. YOU
page254 1 WROTE THEM. ISN'T THAT TRUE? 2 A THAT’s RIGHT. 3 Q AND YOU SIGNED THEM? 4 A THAT’s RIGHT. 5 Q AND YOU WERE — AND YOU UNDERSTOOD THAT THE 6 VARIOUS DONATORS WERE GOING TO ACT ON THE LETTERS FROM YOU; 7 ISN'T THAT CORRECT? 8 A ABSOLUTELY. 9 Q SO THERE WAS NOTHING MYSTERIOUS ABOUT THAT? 10 A AS I SAID, NO. 11 Q IN FACT, IT WAS AT THIS POINT IN TIME THAT YOU 12 TESTIFIED THAT THERE WAS ANOTHER ACCOUNT OPENED UP CALLED 13 H.E.F., HISTORICAL EDUCATION FOUNDATION; ISN'T THAT TRUE, 14 1984? 15 A YES. 16 Q AND THAT WAS DONE BECAUSE OF THE MERMELSTEIN CASE? 17 A YES, I BELIEVE IT WAS PART OF THAT. 18 Q NOW, AS YOU SIT HERE TODAY, PRIOR TO THIS TIME, 19 HAVE YOU EVER SEEN A COPY OF JEAN FARREL-EDISON’s WILL? 20 A I WAS ASKED THAT QUESTION FRIDAY. I SAID IT WAS 21 IN FRENCH. I COULDN'T READ IT. 22 Q HAD YOU EVER SEEN IT PRIOR TO BEING ASKED ABOUT IT 23 ON FRIDAY? 24 A I DON'T RECALL EVER HAVING SEEN IT BEFORE. 25 CERTAINLY IF I SAW IT, I COULDN'T READ IT. 26 Q AS PART OF YOUR INVESTIGATION IN MARCH 1993 27 THROUGH JULY OF 1993, DID YOU TRY TO FIND OUT WHERE THIS 28 WILL WAS?
page255 1 A I BELIEVE WE DID TRY AND TRACK DOWN SOME OF THESE 2 DOCUMENTS RELATED TO THE FARREL ESTATE. BUT I DON'T RECALL 3 TO WHAT EXTENT, AND I THINK WE ONLY HAD — WE HAD LIMITED 4 OR NO SUCCESS AT ALL. 5 Q BY THE WAY, DO YOU HAPPEN TO KNOW HOW MUCH IT COST 6 TO HANDLE ALL OF THE MERMELSTEIN LITIGATION ATTORNEY’s FEES 7 AND COSTS? 8 A ALL THE MERMELSTEIN LITIGATION? 9 Q YES. 10 A BOTH OF THE MERMELSTEIN LITIGATION? 11 Q BOTH, YES, ONE THAT WE PREVIOUSLY TALKED ABOUT IN 12 1984-1985 ALL THE WAY THROUGH 1990. 13 A IT WOULD BE IMPOSSIBLE TO SAY. THEY WERE 14 CODEFENDANTS. I WOULD HAVE NO IDEA. I WILL — I THINK 15 LIBERTY LOBBY WAS NAMED, AND THEY HAD, I'M SURE, TO PAY 16 ATTORNEY’s FEES OR AT LEAST HAVE MR. LANE INVOLVED IN THE 17 THING. 18 I — I THINK I KNOW APPROXIMATELY WHAT THE LEGION 19 MIGHT HAVE PAID IN ATTORNEY’s FEES TO LITIGATE THE TWO 20 CASES. 21 Q WHERE DID YOU GET THAT INFORMATION? 22 A OH, THAT INFORMATION WOULD HAVE BEEN — AT LEAST 23 FOR PAYMENTS MADE TO ATTORNEYS BY THE LEGION, I WOULD BE 24 AWARE OF THOSE CHECKS, WOULD BE WRITTEN ON THE ACCOUNT. AND 25 I SIGNED THE CHECKS AND I WOULD — I KNEW WHAT MONIES WERE 26 COMING TO AND OUT OF THE ACCOUNTS. 27 Q YOU UNDERSTOOD THE MERMELSTEIN LITIGATION, THAT 28 MR. LANE REPRESENTED THE LIBERTY LOBBY THROUGH THE
page256 1 LITIGATIONS? 2 A I RECALL THAT BEING THE SECOND MERMELSTEIN 3 LITIGATION. I'M NOT SURE ABOUT THE FIRST ONE. 4 Q WHO REPRESENTED THE LEGION IN THE FIRST 5 LITIGATION? 6 A THERE WAS A GENTLEMAN NAMED BOWMAN. THEN THERE 7 WAS AN ATTORNEY CAME ON THE SCENE NAMED, I BELIEVE, 8 VON ESCH. I'M NOT SURE WHEN THE TRANSITION OCCURRED OR IF 9 BOTH WERE INVOLVED IN THE CASE. 10 Q ARE YOU AWARE THAT ANY OF THEIR PAYMENTS AND THEIR 11 REPRESENTATION OF THE LEGION CAME FROM OTHER SOURCES OTHER 12 THAN THE LEGION? 13 MR. MUSSELMAN: OBJECTION. RELEVANCE. 14 THE COURT: SUSTAINED. 15 MR. WAIER: YOUR HONOR, OFFER OF PROOF? 16 THE COURT: GO AHEAD. 17 MR. WAIER: WITH RESPECT TO THE OTHER SOURCES, WE'RE 18 GOING TO SHOW THEY WERE THE F.D.F.A., LIBERTY LOBBY, SO 19 FORTH. THESE WERE FUNDS WHICH THEY HAD, WHICH THE LEGION 20 CONTINUED TO OWE THEM TO ANY AMOUNTS OF MONEY, ASSUMING 21 THAT’s THE CASE OVER AND ABOVE AGREEMENTS OR OTHERWISE THAT 22 CAME FROM FARREL, WERE OWED TO THE ENTITIES. AND THERE WERE 23 PRIOR AGREEMENTS WITH RESPECT TO THE REPAYMENT OF THESE 24 FUNDS. 25 THE COURT: AS AN OFFER OF PROOF, YOU WILL SHOW ME ALL 26 THE ORGANIZATIONS GAVE THIS MONEY TO THE LEGION AND HE USED 27 IT IN THE MERMELSTEIN LITIGATION? 28 MR. WAIER: YES, WE WILL.
page257 1 THE COURT: OVERRULE THE OBJECTION. 2 3 BY MR. WAIER: 4 Q YOU ARE AWARE THAT THE SOURCE FOR THE ATTORNEY'S 5 FEES AND COSTS CAME FROM OTHER THAN THE LEGION WITH RESPECT 6 TO THE FIRST MERMELSTEIN LITIGATION? 7 A NO. 8 Q WERE YOU AWARE IN THE SECOND MERMELSTEIN 9 LITIGATION — STRIKE THAT. 10 WHO WAS THE ATTORNEY REPRESENTING THE LEGION IN 11 THE SECOND MERMELSTEIN LITIGATION? 12 A THAT WOULD BE MR. HULSY. 13 Q ARE YOU AWARE MR. HULSY WAS PAID FROM SOURCES 14 OTHER THAN THE LEGION? 15 A I DID HAVE AN UNDERSTANDING AT THE TIME THAT 16 HE — HE HAD RECEIVED SOME PAYMENTS OTHER THAN FROM THE 17 LEGION, YES. 18 Q ARE YOU AWARE HE RECEIVED OVER $65,000 FROM THE 19 FOUNDATION TO DEFEND THE FIRST AMENDMENT? 20 A NO. 21 Q WERE YOU AWARE LIBERTY LOBBY HAD CONTRIBUTED TO 22 HIS ATTORNEY FEES AND COSTS? 23 A NO. 24 Q WERE YOU AWARE THAT THE FOUNDATION TO DEFEND THE 25 FIRST AMENDMENT HAD PAID HIS ATTORNEY SOME — SOME OF HIS 26 ATTORNEY’s FEES AND COSTS? 27 A YOU ALREADY SAID F.D.F.A., LIBERTY LOBBY, AND YOU 28 SAID F.D.F.A.
page258 1 Q I USED A SPECIFIC AMOUNT BEFORE. ARE YOU AWARE OF 2 ANY AMOUNTS OF MONEY F.D.F.A. PAID TO MR. HULSY? 3 A I DON'T KNOW ANY SPECIFICS ABOUT AMOUNTS. BUT I 4 HAD THE GENERAL IMPRESSION DURING THAT TIME THAT MR. HULSY 5 WAS GETTING PAID TO SOME EXTENT FROM — BY THE F.D.F.A. 6 Q IN FACT, HE WAS GETTING PAID FROM OTHER SOURCES IN 7 THE LEGION BECAUSE THE LEGION HAD NO MONEY TO PAY MR. HULSY 8 ISN'T THAT CORRECT? 9 A WELL, THE LEGION’s MONEY HAD GONE INTO THE 10 F.D.F.A. POCKET. THE F.D.F.A. WAS PAYING THE LEGION. 11 MR. WAIER: MOVE TO STRIKE. NONRESPONSIVE. 12 THE COURT: OVERRULED. 13 14 BY MR. WAIER: 15 Q SIR, AGAIN, MY QUESTION TO YOU IS: THE LEGION HAD 16 NO MONEY TO PAY MR. HULSY; ISN'T THAT CORRECT? 17 MR. MUSSELMAN: ASKED AND ANSWERED. 18 THE COURT: SUSTAINED. 19 MR. WAIER: YOUR HONOR, THAT’s WHY I SAID MY QUESTION 20 WAS NONRESPONSIVE. HE DIDN'T ANSWER IT. 21 THE COURT: HE ANSWERED IT. LET’s GO ON. 22 MR. WAIER: YOUR HONOR, IF WE COULD TAKE A FIVE-MINUTE 23 BREAK, I COULD FIGURE OUT HOW MUCH I WILL DO TO WRAP IT UP. 24 THE COURT: SURE. MAKE IT 10. NOTHING OCCURS IN 5 25 MINUTES. SEE YOU IN 10. 26 27 (PROCEEDINGS RECESSED.) 28
page259 1 BY MR. WAIER: 2 Q A COUPLE OF MORE AREAS. MR. MARCELLUS, I BELIEVE 3 YOUR TESTIMONY WAS, EARLIER TODAY, THAT IT WAS MR. Carto’s 4 IDEA THAT YOU PRESENT INVOICES FOR YOUR SALARY AND THAT THEN 5 YOU WERE, THEREAFTER, PAID BY BANQUE CONTRADE? 6 A YES. 7 Q SIR, ISN'T IT TRUE IT WAS YOUR IDEA? 8 A NO. AS I RECALL, I DON'T RECALL IT BEING MY IDEA. 9 MR. WAIER: WHY DON'T WE MARK WHAT WE'LL HAVE AS A 10 MAY 31, 1990 MEMORANDUM TO WILLIS AND ELISABETH FROM 11 SOMEBODY INITIALED T., WITH A COPY OF A CONTRACT — MARK 12 THAT AS EXHIBIT 175. 13 MR. BEUGELMANS: THANK YOU. 14 15 BY MR. WAIER: 16 Q BEFORE I HAND YOU WHAT IS MARKED FOR 17 IDENTIFICATION AS 175, DID YOU EVER COMMUNICATE WITH 18 WILLIS CARTO SOMETIME IN MAY OF 1990 THAT YOU WANTED TO BE 19 AN INDEPENDENT CONTRACTOR AS OPPOSED TO A SALARIED EMPLOYEE? 20 A YES, I BELIEVE I DID. 21 Q YOU WANTED TO DO THAT BECAUSE YOU DIDN'T WANT TO 22 PAY TAXES ON THE MONIES YOU RECEIVED? 23 A NO, THAT’s NOT TRUE. 24 Q WHAT WAS THE REASON WHY YOU WANTED TO BECOME AN 25 INDEPENDENT CONTRACTOR? 26 MR. MUSSELMAN: OBJECTION. IRRELEVANT. 27 THE COURT: OVERRULED. 28 THE WITNESS: I WANTED TO BECOME AN INDEPENDENT
page260 1 CONTRACTOR SIMPLY BECAUSE I WANTED TO BE ABLE TO GET MY 2 SALARY IN FULL AND BE ABLE TO DO OTHER WORK ON THE OUTSIDE, 3 BECAUSE AT THAT TIME, I HAD BEEN DOING CONSULTATION WORK, 4 SOFTWARE-RELATED CONSULTATION WORK. I WAS THE EDITOR OF AN 5 OUTSIDE NEWSPAPER. I WAS PAID FOR THAT. I WAS RECEIVING 6 MONEY FROM OTHER SOURCES, AND I WISHED TO CONSOLIDATE THAT 7 AND BE AN INDEPENDENT CONTRACTOR TO WHOEVER I WORKED WITH. 8 9 BY MR. WAIER: 10 Q DID YOU COMMUNICATE THIS, ALL THE ACTIVITIES YOU 11 WERE DOING, TO EITHER LEWIS OR LAVONNE FURR IN 1990 WHEN YOU 12 WERE RECEIVING THIS OUTSIDE INCOME? 13 A MY CONTRACT SPECIFIED I REPORTED TO MR. CARTO, NOT 14 LEWIS AND LAVONNE FURR. WHY WOULD I DO THAT? 15 Q DID YOU REPORT THAT TO MR. CARTO? 16 A HE KNEW IT, SURE. 17 Q DID YOU REPORT THAT TO HIM? 18 A I GAVE HIM A COPY OF THE NEWSLETTER I WAS EDITING. 19 Q YOU FELT THAT WAS PROPER, THAT AS A MANAGING 20 DIRECTOR, YOU COULD HAVE THE OUTSIDE ACTIVITIES? 21 A CERTAINLY. 22 Q BECAUSE MR. CARTO SAID IT WAS OKAY? 23 A NO, BECAUSE I SAID IT WAS OKAY. 24 Q OKAY. YOU DIDN'T CARE IF MR. CARTO AGREED OR NOT; 25 YOU WERE GOING TO DO IT AS MANAGING DIRECTOR? 26 A IT DIDN'T OCCUR TO ME HE WOULD DISAGREE. IT WAS 27 WEEKEND AND EVENING WORK. 28 Q LET ME HAND YOU WHAT WE HAVE MARKED FOR
page261 1 IDENTIFICATION AS COURT’s EXHIBIT 175. SIR, THIS IS ON A 2 YELLOW PIECE OF PAPER. THIS IS THE ORIGINAL. AND THE VERY 3 FIRST PAGE DATED MAY 31, 1990 TO WILLIS AND ELISABETH, 4 THERE’s A T. ON THE BOTTOM. 5 A YES. 6 Q IS THAT YOU? 7 A LIKELY, YES. 8 Q WELL, YOU RECOGNIZE THAT AS YOUR INITIAL? 9 A NO, I DON'T. BUT IN MEMOS TO WILLIS AND 10 ELISABETH, I OFTEN PUT T, PERIOD. 11 Q DO YOU RECALL THIS MEMORANDUM? READ IT, PLEASE. 12 A OUT LOUD? 13 Q NO, READ IT TO YOURSELF FIRST. AND THEN I'LL 14 REFER TO SPECIFIC PORTIONS. 15 A OKAY. 16 I UNDERSTOOD THIS, YES. YEAH. 17 Q YOU WROTE THAT MEMORANDUM, DID YOU? 18 A YES. 19 Q AND YOU PREPARED THE AGREEMENT THAT’s ATTACHED, 20 TOO, DID YOU NOT, THE INDEPENDENT CONTRACTOR AGREEMENT? 21 A I DON'T KNOW FOR SURE IF I PREPARED THIS 22 AGREEMENT. IT LOOKS AS THOUGH I DID. 23 Q THAT CAME FROM YOUR COMPUTER? 24 MR. MUSSELMAN: IS THAT A QUESTION? 25 26 BY MR. WAIER: 27 Q ISN'T THAT TRUE? 28 A THE TEXT OF IT DID. AS FAR AS FILLING IT IN, YES,
page262 1 I SUPPOSE IT DID, ALTHOUGH I DON'T THINK I EVER USED THAT 2 TYPEFACE. I THINK WE CAN SAY THAT I PREPARED THIS CONTRACT. 3 Q WELL, YOUR SIGNATURE APPEARS, DOES IT NOT, ON THE 4 FOURTH PAGE OF THIS AGREEMENT? 5 A YES, IT DOES. 6 Q AND YOU BACKDATED THIS AGREEMENT, DID YOU NOT? 7 A YES, AS I SAID. 8 Q WHY DID YOU WANT TO BACKDATE THE AGREEMENT TO 9 1987? 10 A I DON'T RECALL AT THIS TIME WHY I DID THAT. 11 Q DID IT RELATE TO YOUR REPORTING OF TAXES? 12 MR. MUSSELMAN: OBJECTION. RELEVANCE. 13 THE COURT: OVERRULED. 14 THE WITNESS: I DON'T THINK SO. I'M SQUARE WITH THE 15 I.R.S. I DON'T OWE ANY TAXES. I DON'T KNOW THAT — I 16 CAN'T SEE WHY I WOULD HAVE DONE THAT FOR A TAX REASON. 17 18 BY MR. WAIER: 19 Q OKAY. IN THE AGREEMENT ON MAY 31, 1990, YOU 20 TESTIFIED THAT AFTER THIS POINT IN TIME, YOU PREPARED 21 INVOICES FOR YOUR PAYMENTS. AND YOU SAID THAT WAS QUITE A 22 BURDEN BECAUSE MR. CARTO HAD YOU DO THAT FOR PURPOSES OF 23 RECEIVING YOUR SALARY. ISN'T THAT TRUE? 24 A WELL, YES, EVERY THREE MONTHS. 25 Q SIR, AND YOU SAID THAT WAS MR. Carto’s 26 SUGGESTION. ISN'T IT TRUE THAT THAT WAS YOUR SUGGESTION 27 NOW? 28 A NO. THE MONEY — WHEN HE WANTED TO PAY ME OUT OF
page263 1 THE LEGION’s ACCOUNT IN SWITZERLAND AND WANTED ME TO INVOICE 2 EVERY THREE MONTHS, THAT BECAME A BURDEN. 3 Q WELL, SIR, LET ME READ TO YOU IN YOUR OWN 4 LANGUAGE. MAY 31, 1990, IT SAYSFROM HERE ON OUT, I WILL 5 SUBMIT REGULAR STATEMENTS TO THE COMPANY FULLY ITEMIZING ALL 6 WORK DONE DURING THE BILLING PERIOD AND THE CHARGES. THESE 7 CHARGES WILL ADD UP TO THE AMOUNTS LISTED IN ATTACHMENT A,8 PARENTHESIS,FOR YOUR REFERENCE AND MINE ONLY,9 UNDERLINED.THE,QUOTE,12 FIRST OF ALL, LET ME ASK YOU THIS: WHY DID YOU 13 STATE THAT YOU WANTED THIS DOCUMENT ONLY TO EXIST BETWEEN 14 WILLIS, ELISABETH AND YOURSELF AND NOBODY ELSE? 15 A BECAUSE WHILE EMPLOYED, SANDY SISSON WAS AN 16 INDEPENDENT CONTRACTOR, AND ELISABETH AND WILLIS WERE VERY 17 WORRIED THAT OTHERS IN THE COMPANY MIGHT ALSO WANT TO BE 18 EMPLOYED AS OR WANT TO WORK AS INDEPENDENT CONTRACTORS. AND 19 THEY DID NOT WANT THAT. SO THEY — THEY WANTED ME TO KEEP 20 THIS JUST BETWEEN MYSELF AND THEM. 21 Q YOU DON'T SAY THAT. YOU SAY THIS — THIS IS YOUR 22 SUGGESTION; ISN'T THAT RIGHT? 23 A I DIDN'T SEE THE POINT IN HAVING TO SAY THAT. IT 24 WAS ALREADY DISCUSSED. 25 Q YOU INDICATE DOWN HERE ABOUT 1099 FORMS. ISN'T IT 26 TRUE THAT YOU TOLD WILLIS AND ELISABETH CARTO YOU WANTED TO 27 BECOME AN INDEPENDENT CONTRACTOR AND YOU ALSO DIDN'T WANT 28 THE LEGION TO SUBMIT 1099 FORMS SO THAT THE I.R.S. WOULDDOCUMENTWILL OTHERWISE NOT 10 EXIST. THE TOTAL WILL ADD UP TO CURRENT COMPENSATION 11 LEVELS.
page264 1 HAVE NO UNDERSTANDING OF MONIES YOU RECEIVED? 2 A DID I SUGGEST SUCH A THING IN THERE? I DON'T 3 THINK I DID. 4 Q DO YOU RECALL THAT? 5 A NO, BECAUSE AT THAT TIME, I KNEW IN THE COURSE OF 6 BUSINESS THE COMPANY HAD TO PREPARE 1099’s FOR THE PEOPLE 7 THAT IT PAID. I DON'T SEE HOW I COULD HAVE ASKED THE 8 COMPANY TO ILLEGALLY SUPPRESS THOSE. 9 Q LET ME READ THE LAST PARAGRAPH. YOU SAYSANDY, 10 AS I MENTIONED, SUBMITS REGULAR INVOICES AS A COMPANY, NOT 11 AN INDIVIDUAL, AND HAS NOT BEEN REQUIRED TO PROVIDE EITHER A 12 SOCIAL SECURITY NUMBER OR A FED I.D. NUMBER; THUS, SHE DOES 13 NOT APPEAR ON ANY I.R.S. 1099 FORMS. WE CAN MAKE A SIMILAR 14 BACKDATED CONTRACT FOR HER IF YOU THINK IT’s NECESSARY. 15 SHE'LL COOPERATE GLADLY.16 WHY WOULD YOU MENTION THAT? 17 A AS I SIT HERE NOW, I DON'T RECALL WHAT MY THINKING 18 WAS. 19 Q ISN'T IT TRUE THAT YOU WANTED A SIMILAR SITUATION 20 AS SANDY SO YOU WOULDN'T HAVE TO REPORT YOUR INCOME TO THE 21 INTERNAL REVENUE SERVICE? 22 MR. MUSSELMAN: OBJECTION. RELEVANCE. 23 THE COURT: OVERRULED. 24 THE WITNESS: NO, BECAUSE I DID REPORT MY INCOME TO THE 25 I.R.S. AND I DID PAY TAXES. 26 27 BY MR. WAIER: 28 Q IT WAS AFTER THIS POINT IN TIME, THOUGH, THAT YOU
page265 1 STARTED PREPARING INVOICES FOR YOUR COMPENSATION; ISN'T THAT 2 TRUE? 3 A YES. 4 Q VERY SIMILAR TO WHAT YOU SAY — WAS THIS 5 AGREEMENT EVER SIGNED BY THE LEGION, BY THE WAY, EXHIBIT 6 175, THE CONTRACT THAT YOU PREPARED? 7 A I BELIEVE I HAVE A SIGNED COPY. 8 Q WHO SIGNED IT BESIDES YOURSELF? 9 A I THINK — I THINK IT BEARS WILLIS Carto’s 10 SIGNATURE. 11 Q NOW, SIR, AGAIN, YOU UNDERSTAND THAT YOU ARE UNDER 12 PENALTY OF PERJURY? YOU SWORE TO TELL THE TRUTH? 13 A YES. 14 Q AND YOU ARE SAYING THAT YOU HAVE FILED THE INCOME 15 TAX RETURNS AND YOU HAVE DONE EVERYTHING CONSISTENT WITH THE 16 I.R.S.? 17 MR. MUSSELMAN: OBJECTION. RELEVANCE. 18 THE COURT: SUSTAINED. ARGUMENTATIVE. 19 MR. WAIER: IT GOES TO IMPEACHMENT. 20 THE COURT: ARGUMENTATIVE. 21 22 BY MR. WAIER: 23 Q LET ME SHOW YOU WHAT WE'LL MARK AS EXHIBIT 176, 24 WHICH IS AN AUGUST 18, 1985 — LOOKS LIKE, I CAN'T TELL THE 25 EXACT DATE — BUT SIGNED BY SOMEONE NAMED TOM. 26 MR. BEUGELMANS: MAY WE SEE IT, COUNSEL? 27 MR. WAIER: I'M SORRY. 28
page266 1 BY MR. WAIER: 2 Q LET ME HAND YOU THIS DOCUMENT. DID YOU PREPARE 3 THIS DOCUMENT, MR. MARCELLUS? 4 A YES. 5 Q AND YOUR SIGNATURE APPEARS ON THE SECOND PAGE? 6 A YES. 7 Q SIR, IN LOOKING AT THE LAST TWO PARAGRAPHS, LET ME 8 READ THOSE. AND STARTING AT THE TOP PARAGRAPH, IT SAYS -- 9 THIS WAS A LETTER YOU WROTE TO WILLIS, IS IT NOT? 10 THE COURT: ARE YOU READING NOW OR NOT? 11 MR. WAIER: NOT YET. 12 13 BY MR. WAIER: 14 Q THIS IS A LETTER TO WILLIS FROM YOU? 15 A IT LOOKS LIKE A MEMO. THE DATE, I DON'T SEE THE 16 DATE. 17 MR. BEUGELMANS: COULD THE WITNESS HAVE A CHANCE TO 18 READ THE DOCUMENT? 19 THE COURT: CERTAINLY. 20 THE WITNESS: YES, OKAY. 21 22 BY MR. WAIER: 23 Q YOU PREPARED THIS LETTER? 24 A YES. 25 Q LET ME — LET ME ASK YOU — LET ME READ YOU THIS 26 QUESTION CONCERNING, QUOTE,TAX STUFF.27 A FINE. 28 Q “NOW, AS FOR THAT TAX STUFF, I REALLY DON'T LIKE
page267 1 THAT VERY MUCH EITHER. WE NEGOTIATED BASED ON MY WORKING 2 FOR NOONTIDE AS AN INDEPENDENT SUBCONTRACTOR. AND NOW ALL 3 OF A SUDDEN, THE RULES ARE BEING CHANGED ON ME. LOOK, IF 4 YOU GOT THE IDEA THAT YOU ARE SOMEHOW BEING FORCED TO IT, 5 WELL, DAVID’s NEVER FILED A TAX RETURN IN THIS COUNTRY. SO 6 IF YOU SET HIM UP AS AN EMPLOYEE AND HE DECIDED NOT TO FILE, 7 IT’s NO BIG DEAL BECAUSE THE I.R.S. NEVER HEARD OF HIM 8 ANYWAY. BUT FOR ME, THE CASE IS QUITE DIFFERENT. I STOPPED 9 FILING JUST THREE YEARS AGO.” 10 YOU STOPPED FILING WHAT? 11 A IN 1981, WHEN I WROTE THAT LETTER, I HAD NOT FILED 12 AN INCOME TAX RETURN, I BELIEVE, FOR THREE YEARS. 13 Q SO DOES THAT REFRESH YOUR RECOLLECTION THAT YOU, 14 FOR A PERIOD OF TIME, HAD NOT FILED TAX RETURNS? 15 MR. MUSSELMAN: AS TO WHAT PERIOD OF TIME? VAGUE. 16 MR. WAIER: AS TO ANY PERIOD. 17 MR. MUSSELMAN: IT’s IRRELEVANT. 18 THE COURT: THE QUESTION IS ASKED AND ANSWERED. ANSWER 19 STANDS. 20 21 BY MR. WAIER: 22 Q NOW, ISN'T IT TRUE THAT THE FIRST TIME THAT YOU 23 BECAME AWARE THAT MONIES WERE COMING FROM BANQUE CONTRADE 24 WAS STARTING IN APRIL OF 1991? 25 A 1991? 26 Q YES. 27 A YES, THAT WOULD BE ABOUT RIGHT. YEAH. THAT'S 28 RIGHT.
page268 1 Q IN FACT, LET ME SHOW YOU WHAT WE HAVE MARKED FOR 2 IDENTIFICATION AS COURT’s EXHIBIT 178. THIS IS A 3 PREPARATION — LOOKS LIKE SOMETHING PREPARED TO WILLIS, 4 JUNE 17, 1991, AND ALSO ATTACHED TO THIS IS A — LOOKS LIKE 5 A BANK TRANSFER TO F.S.O. DO YOU SEE THAT? DO YOU RECALL 6 JUNE 17, 1991, PREPARING AN INVOICE FOR YOUR PRIOR MONTH'S 7 WORK FROM 4-17-91 TO 6-17-91 TO WILLIS FOR PAYMENT THROUGH 8 THE BANQUE CONTRADE? 9 A ONLY TO WILLIS FOR PAYMENT OF MY SALARY, NOT 10 HAVING ANYTHING TO DO WITH THE BANQUE CONTRADE. 11 Q YOU KNEW IT WAS COMING FROM OVERSEAS? 12 A I ASSUMED SINCE PREVIOUS CHECKS HAD, THAT WOULD, 13 TOO. 14 Q YOU RECEIVED CHECKS FROM OVERSEAS PRIOR TO THIS 15 TIME, JUNE 17, 1991? 16 A FROM THE BANQUE CONTRADE? 17 Q YES. 18 A I DON'T KNOW WHEN I RECEIVED THE FIRST CHECK FROM 19 BANQUE CONTRADE. 20 Q IN FACT, YOU RECALL RECEIVING A BONUS IN FEBRUARY 21 1991 OF $6,000 FROM THE BANQUE CONTRADE, OR WHAT WAS 22 CLASSIFIED AS A BONUS TO YOU? 23 A I RECALL RECEIVING A BONUS ABOUT THAT AMOUNT. IT 24 SEEMED TO ME IT WAS LESS THAN THAT. COULD HAVE BEEN THAT 25 MUCH. AT ABOUT THAT TIME, IT WAS FROM BANQUE CONTRADE, YES. 26 Q YOU UNDERSTOOD THAT CAME FROM THE FARREL ESTATE? 27 A I UNDERSTOOD IT. I ASSUMED — I ASSUMED THAT IT 28 DID. I DIDN'T KNOW FOR SURE WHERE IT CAME FROM.
page269 1 Q AND DO YOU RECALL RECEIVING THESE VARIOUS VOUCHERS 2 FROM THE BANQUE CONTRADE LAUSANNE S.A. AT THE TIME THAT THE 3 AMOUNTS WERE SENT TO YOU? 4 A NO. I DID NOT RECEIVE THESE VOUCHERS. 5 Q BUT YOU KNEW IT CAME FROM THAT BANK? IT WENT INTO 6 YOUR ACCOUNT; ISN'T THAT CORRECT? 7 A NO, I SIMPLY RECEIVED A CHECK DRAWN ON THAT 8 ACCOUNT. IN THIS CASE, IT WAS MADE OUT TO F.S.O. INSTEAD OF 9 TOM MARCELLUS. 10 Q AT YOUR DIRECTION? 11 A YES. 12 Q NOW, YESTERDAY — I SHOULDN'T SAYYESTERDAY.13 IT’s BEEN A WEEKEND AGO. I ASKED YOU TO REVIEW A DOCUMENT. 14 LET ME PULL THAT OUT. HAD TO DO WITH THE H.E.F. 15 APPLICATION. 16 A UH-HUH. 17 Q DO YOU RECALL THAT? 18 A UH-HUH. H.E.F., THE ACCOUNT WITH NATIONAL 19 FOUNDATION. 20 Q YES. DO YOU RECALL THAT? I THINK WE HAVE IT. 21 THERE WE GO. WE MARKED THAT FOR IDENTIFICATION AS 172. AND 22 YOU SAID THAT YOU HAD A DIFFICULTY BECAUSE THERE WAS ONLY 23 ONE PAGE TO IT. DO YOU RECALL? 24 A NOT THAT. I DON'T RECALL HAVING SAID I WAS HAVING 25 DIFFICULTY WITH IT. I THINK I SAID THAT I THOUGHT THERE 26 MIGHT BE MORE THAN ONE PAGE. 27 MR. WAIER: OKAY. MARK THIS NEXT IN ORDER. 28 LET ME HAND YOU WHAT WE HAVE MARKED FOR
page270 1 IDENTIFICATION AS 179, WHICH IS A FRONT AND BACK PAGE OF THE 2 APPLICATION TO THE H.E.F. 3 MR. BEUGELMANS: YOUR HONOR, AT THIS TIME, WE OBJECT TO 4 COUNSEL TAKING EXHIBITS WE HAVEN'T SEEN BEFORE THAT HAS NOT 5 BEEN IDENTIFIED AND ATTEMPTING TO USE THEM — THEY'RE NOT 6 FOR IMPEACHMENT. IF THEY WERE, PERHAPS — BECAUSE HE'S 7 INTRODUCING EVIDENCE THAT HAS NOT BEEN MADE AVAILABLE TO THE 8 PLAINTIFF. 9 MR. WAIER: THEY HAD BEEN PROVIDED. THIS IS FOR 10 REFRESHING THE RECOLLECTION. 11 THE COURT: THEY HAVEN'T BEEN ADMITTED INTO EVIDENCE. 12 THAT MEANS I DON'T SEE THEM UNTIL THEY ARE. YOU SHOULD SHOW 13 THEM TO OPPOSING COUNSEL FIRST, UNLESS THEY WERE PRODUCED 14 PURSUANT TO ALL THE DISCOVERY RULES. THE ONLY EXCEPTION TO 15 THAT IS IMPEACHMENT. 16 MR. WAIER: THEY WERE PRODUCED THROUGH THE DISCOVERY 17 RULES. THESE WERE ALL PRODUCED WITH RESPECT TO DOCUMENTS 18 THAT THEY REQUESTED. WE FILED OBJECTIONS TO THOSE WITH 19 RESPECT TO — TO THIS TRIAL. THOSE OBJECTIONS NEED TO BE 20 RULED ON. THEY HAD WITHIN 5 DAYS TO BRING A MOTION 21 CONSISTENT WITH THE OBJECTIONS. THAT’s FOR ANOTHER TIME. 22 MR. BEUGELMANS: THEY HAVE NOT BEEN PRODUCED, NOR THE 23 LAST TWO EXHIBITS. 24 MR. WAIER: THIS HAS BEEN PRODUCED THROUGHOUT, YOUR 25 HONOR. 26 THE COURT: ANYWAY, SHOW IT TO OPPOSING COUNSEL BEFORE 27 YOU SHOW IT TO THE OTHER SIDE. 28 MR. WAIER: I DID ALREADY, YOUR HONOR.
page271 1 THE COURT: OKAY. 2 3 BY MR. WAIER: 4 Q TAKE A LOOK AT — YOU NOTICE THE FRONT PAGE IS 5 THE EXACT SAME AS EXHIBIT 172, DO YOU SEE THAT, WHICH YOU 6 IDENTIFIED PREVIOUSLY AS THE -- 7 A IT’s NOT THE SAME. THIS SAYS WILLIS ON IT, AND IT 8 SAYS E.X. 26. THIS DOES NOT. 9 Q OTHER THAN THE WRITINGS, THE PRINTED MATERIAL, 10 WHAT HAS BEEN TYPED IN? 11 A IT LOOKS LIKE THEY'RE THE SAME. 12 Q IN OTHER WORDS, THE SAME OTHER THAN SOMEBODY HAS 13 WRITTEN ON THE EXHIBIT 179; IS THAT CORRECT? 14 A THEY APPEAR TO BE, YES. 15 Q IF YOU TURN AROUND TO THE BACK SIDE OF THIS, 16 REMEMBER, YOU PREVIOUSLY TESTIFIED THAT YOU HAD SEEN THE 17 APPLICATION BEFORE? DO YOU RECALL THAT? 18 A YES. 19 Q DOES THE BACK SIDE OF THIS LOOK LIKE THE 20 APPLICATION YOU HAD SEEN BEFORE WITH RESPECT TO THE H.E.F. 21 ACCOUNT BY THE LEGION? 22 A THIS IS NOT CLEAR TO ME THAT I SAW THIS AT THE 23 TIME. 24 Q YOU KNEW THAT BOARD OF REGENTS WITH THE HISTORICAL 25 FOUNDATION AT THE TIME IT WAS PREPARED; ISN'T THAT 26 TRUE? 27 A NO. IN FACT, NOW THAT YOU MENTIONED IT HERE, THE 28 NAME REGENTS HASN'T OCCURRED TO ME IN CONSIDERATION WITH THE
page272 1 H.E.F. AT ALL. 2 Q YOU WERE A DONOR MANAGER, WERE YOU NOT? 3 A YES. 4 Q DO YOU RECALL THAT THE ORIGINAL DONOR APPLICANT 5 WAS JOHN L. KENT? 6 A NO. 7 Q DID YOU KNOW A JOHN L. KENT? 8 A I KNEW BY NAME THE DIRECTOR OF THE LEGION, I 9 BELIEVE. 10 Q WERE YOU AWARE THAT — WHO WERE YOU AWARE WAS THE 11 ORIGINAL DONOR APPLICANT WITH RESPECT TO H.E.F.? 12 A I DON'T KNOW. I KNOW, AT SOME POINT IN TIME, 13 WILLIS DID SOMETHING AND I BECAME THE DONOR APPLICANT. 14 Q YOU DID NOT SET UP H.E.F., DID YOU? 15 A NO. I BELIEVE MR. CARTO FILLED OUT THE 16 APPLICATION FOR ME, AS I PREVIOUSLY TESTIFIED. 17 Q YOU WEREN'T AT THE LEGION AT THE TIME THAT THIS 18 FORM WAS FILLED OUT? 19 A YES, I'M SURE I WAS. 20 Q DID YOU SEE THIS FORM BEFORE IT WAS FILED? 21 A I DON'T KNOW IF I DID OR DIDN'T. 22 Q DO YOU SEE MR. — MRS. LEWIS FURR, THAT'S 23 LAVONNE FURR, ON THE BACK SIDE UNDER THE BOARD OF REGENTS? 24 A YES. 25 Q DO YOU RECALL SHE WAS ON THE BOARD OF REGENTS OF 26 H.E.F. IN THE VERY BEGINNING? 27 A NO. 28 Q DO YOU SEE ANOTHER GENTLEMAN, KEITH STIMLY,
page273 1 S-T-I-M-L-Y? DO YOU KNOW WHO THAT IS? 2 A YES. 3 Q WHO IS KEITH STIMLY? 4 A HE WAS AN EDITOR AT THE LEGION FROM ABOUT, I 5 THINK, IN 1983 HE WAS THERE. 6 Q DID HE REPORT TO YOU? 7 A YES. 8 Q HOW ABOUT MR. LEWIS FURR, ARE YOU AWARE HE WAS A 9 DIRECTOR OF THE LEGION AT THIS TIME? 10 A YES, I BELIEVE HE WAS. 11 Q NOW, DO YOU SEE ANYWHERE — NOW YOU HAVE THIS, 12 YOU RECALL MY QUESTION ON FRIDAY WAS DO YOU SEE ANYWHERE ON 13 HERE THAT REFERENCES THE LEGION? DO YOU SEE ANYWHERE ON 14 THIS PARTICULAR APPLICATION THAT REFERENCES THE LEGION? 15 A I SEELEGION DIRECTORANDLEGION DIRECTOR-- 16LEGION DIRECTORANDLEGION EMPLOYEE.17 Q DO YOU SEE WHERE IT SAYS LEGION FOR THE SURVIVAL 18 OF FREEDOM, INC., AS THE APPLICANT? 19 A IT DOES NOT SAYLEGION.20 Q THE APPLICANT IS JOHN L. KENT? 21 A YES. 22 Q NOW, YOU INDICATED THAT MONIES WERE 23 MYSTERIOUSLY — YOU SAIDMYSTERIOUSLY— GOING TO 24 F.D.F.A., YOU DON'T KNOW WHY, FROM THE LEGION SOMETIME 25 IN — AFTER 1985; IS THAT CORRECT? 26 A I THINK THAT WAS THE TIME PERIOD, YES. 27 Q IT WASN'T MYSTERIOUS AT ALL TO YOU. YOU KNEW 28 MONEY WAS GOING TO THE F.D.F.A. BECAUSE YOU AUTHORIZED IT.
page274 1 IS THAT CORRECT? 2 A NOT MONEY FROM THE H.E.F. ACCOUNT, NO. 3 Q LET ME SHOW YOU A NATIONAL FOUNDATION, INC., 4 CONFIRMATION STATEMENT. 5 MR. BEUGELMANS: YOUR HONOR, AGAIN, WE OBJECT. 6 PLAINTIFF HAS STILL NOT RECEIVED A COPY OF DEFENDANT'S 7 EXHIBITS, YOUR HONOR. TO THIS DATE, I HAVEN'T SEEN THEM, 8 FIRST OF ALL. SECONDLY, THIS IS TRIAL BY AMBUSH. THIS WAS 9 NOT PRODUCED IN DISCOVERY. THE FIRST TIME I HAVE SEEN IT IS 10 TODAY. 11 MR. WAIER: SO WE'RE CLEAR, THERE WAS A MOTION BROUGHT 12 BY MR. BEUGELMANS WITH RESPECT TO THIS. THIS MOTION SOMEHOW 13 GOT PUT INTO SOME VORTEX, A BLACK VORTEX AT JAMS. NONE OF 14 HIS MOTIONS HAVE BEEN RULED ON; NONE OF HIS MOTIONS HAVE 15 BEEN SOLVED. HE’s NEVER GONE FORWARD. WE OBJECTED 16 PROPERLY. WITH RESPECT TO TRIAL DOCUMENTS, HE DID NOT -- 17 HE DID NOT FILE THE REQUISITE MOTION UNDER THE CODE OF CIVIL 18 PROCEDURE WITH RESPECT TO COMPELLING THE DOCUMENTS. 19 THEREFORE, HE’s OF NO STANDING AT THIS POINT. 20 THE COURT: HE HAS STANDING TO RAISE IT. HE CAN OBJECT 21 TO IT. BUT LET’s DO THIS. IF YOU HAVE EXTRA COPIES, GIVE 22 THEM TO HIM. I'M GOING TO LET IT IN. I'M NOT GOING TO GO 23 THROUGH A DISCOVERY DISPUTE HERE. I'M NOT REAL HAPPY ABOUT 24 THIS. GIVE HIM COPIES. YOU KNOW WHAT IS COMING UP. HE 25 NEEDS TO READ THIS. YOU ARE SLOWING THE TRIAL DOWN BY 26 HAVING THE ATTORNEY READ IT AND THEN THE WITNESS READ IT 27 AND -- 28 MR. WAIER: WELL, THIS IS AN IMPEACHMENT DOCUMENT, IN
page275 1 ANY EVENT. BESIDES, THIS IS AN — IN THE LEGION’s OWN 2 FILES. THIS HAS BEEN PRODUCED, UNLIKE WHAT COUNSEL SAID. 3 THE COURT: MY INSTRUCTIONS WERE TO SHOW IT TO OPPOSING 4 COUNSEL FIRST. IF YOU KNOW YOU ARE GOING TO BE USING 5 SOMETHING, HAVE AN EXTRA COPY, SHOW IT TO HIM. OTHERWISE, 6 WE'LL SPEND TOO MUCH TIME ON THE TRIAL. 7 8 BY MR. WAIER: 9 Q LOOK AT EXHIBIT 180. SIR, YOU WERE RECEIVING 10 COPIES OF THESE DOCUMENTS FROM THE NATIONAL FOUNDATION, INC. 11 THIS ONE SPECIFICALLY IS DATED IN THE EARLY PART OF -- 12 ACTUALLY, THROUGH 1985 — THROUGH 1986, I MEAN. STRIKE 13 THAT. 14 FROM JANUARY 1985 THROUGH DECEMBER 1986, DO YOU 15 SEE THAT? 16 A THE DATES RUN ON THIS FROM JANUARY '85 TO DECEMBER 17 '86, YES. 18 Q AND IT HAPPENED TO BE FROM THE HISTORICAL 19 EDUCATION FOUNDATION, CARE OF TOM J. MARCELLUS. DO YOU SEE 20 THAT? 21 A YES. 22 Q AND IT LISTS AN ADDRESS, 4009 PACIFIC COAST 23 HIGHWAY, TORRANCE, CALIFORNIA, 90505. THAT WAS YOUR OFFICE 24 ADDRESS AT THIS PERIOD OF TIME? 25 A THAT WAS THE H.E.F.’s ADDRESS. 26 Q WELL, YOU WERE THERE, TOO, WEREN'T YOU? 27 A I HAD — WELL, I HAD A — MY OWN P.O. BOX AT THAT 28 ADDRESS. THIS WAS NOT MY ADDRESS. THIS WAS MAILED TO
page276 1 H.E.F. AND SOMETIMES I WOULD PICK UP THE MAIL AND SOMETIMES 2 ELISABETH WOULD PICK UP THE MAIL. 3 Q SIR, H.E.F. HAD THE SAME PURPOSES AS THE LEGION; 4 ISN'T THAT TRUE? 5 A READING FROM THIS APPLICATION, I CAN SEE THAT THE 6 PURPOSE OF THE TWO ORGANIZATIONS ARE LISTED THERE, THEY'RE 7 SIMILAR, YES. 8 Q IN FACT, H.E.F. — YOU UNDERSTOOD WHEN YOU 9 RECEIVED — DID YOU OBJECT TO THE PURPOSES WHEN YOU 10 RECEIVED THIS DOCUMENT, EXHIBIT 180? 11 A WELL, THIS WAS A CHANGE IN THE PURPOSE. I MEAN, 12 HERE IT SAYS TO VIGOROUSLY DEFEND THE RIGHT OF FREEDOM. THE 13 ORIGINAL APPLICATION IS TO ADVANCE THE CAUSE OF HISTORY. 14 THERE’s A CONTRADICTION. TO ANSWER THE QUESTION, NO, I 15 DON'T BELIEVE I RAISED AN OBJECTION. 16 Q YOU UNDERSTOOD THAT WAS THE REASON FOR THE 17 HISTORICAL EDUCATION FOUNDATION; ISN'T THAT TRUE? 18 A NO. THE REASON I UNDERSTOOD FOR THE HISTORICAL 19 EDUCATION FOUNDATION WAS TO PROVIDE A PLACE FOR THE LEGION 20 TO PUT THE MONEY. 21 Q YOU WERE RESPONSIBLE FOR THE DISBURSEMENTS FROM 22 THE ACCOUNT, ISN'T THAT TRUE, WHILE YOU WERE DONOR MANAGER? 23 A SOME OF — SOME OF THE DISBURSEMENTS, OBVIOUSLY 24 NOT. I DON'T BELIEVE I AUTHORIZED SOME OF THESE 25 DISBURSEMENTS. 26 Q BUT YOU DID RECEIVE THIS DOCUMENT? 27 A THIS DOCUMENT PROBABLY WOUND UP IN THE LEGION'S 28 FILES. QUITE HONESTLY, I DIDN'T — OFTEN DIDN'T SEE THEM.
page277 1 THEY — SOMETIMES I SAW THEM, SOMETIMES MRS. CARTO SAW 2 THEM. THEY MAY OR MAY NOT HAVE BEEN FILED IN A CONSECUTIVE 3 FILE. WE RECEIVED THESE EVERY FEW MONTHS, AND I DIDN'T LOOK 4 AT THEM CAREFULLY, REALLY, UNTIL I CAME BACK AFTER MY 5 18-MONTH ABSENCE. 6 Q DO YOU RECALL A PERSON BY THE NAME OF JENNY? 7 A JENNY? 8 Q JEANNE. YES. 9 A JEANNE SCOTT, WHO WORKED THERE? 10 Q DO YOU UNDERSTAND SOMEBODY FROM THE NATIONAL 11 FOUNDATION, INC.? 12 A JENNY. I DON'T RECALL WHO THAT PERSON IS. 13 Q DOES THIS HELP REFRESH YOUR RECOLLECTION THAT YOU 14 RECEIVED THIS DOCUMENT, STATESMR. MARCELLUS, PLEASE ACCEPT 15 MY APOLOGIES? 16 A NO. NO, IT DOESN'T. 17 Q WELL, WHEN YOU RECEIVED THIS DOCUMENT THAT SHOWED 18 VARIOUS DISBURSEMENTS TO THE FOUNDATION TO DEFEND THE FIRST 19 AMENDMENT, DID YOU CONTACT MR. CARTO AND ASK HIM WHERE THE 20 MONIES WENT TO AND WHY? 21 MR. MUSSELMAN: MISSTATES THE TESTIMONY. HE SAID WHEN 22 YOU RECEIVED THIS DOCUMENT. THE TESTIMONY WAS THAT HE 23 DIDN'T KNOW IF HE EVER RECEIVED IT. 24 THE COURT: SUSTAINED. 25 26 BY MR. WAIER: 27 Q DO YOU RECALL RECEIVING THE DOCUMENT? 28 A NO.
page278 1 Q DID YOU UNDERSTOOD AT THE TIME YOU WERE DONOR 2 MANAGER, CERTAIN MONIES WERE GOING TO THE FOUNDATION TO 3 DEFEND THE FIRST AMENDMENT OR H.E.F.? 4 A NO, I DON'T RECALL MONIES FROM H.E.F. WERE GOING 5 TO F.D.F.A. 6 Q DO YOU RECALL SIGNING AN ESCROW WITH RESPECT TO A 7 BUILDING THAT WAS PURCHASED OR RENOVATED BY F.D.F.A. AROUND 8 THIS TIME? 9 A AROUND WHAT TIME, '86? 10 Q '85 THROUGH '86. 11 A YES. 12 Q AND DOES THAT HELP REFRESH YOUR RECOLLECTION 13 CERTAIN MONIES WERE PAID TO THE F.D.F.A. CONCERNING THAT 14 BUILDING? 15 A NO. NO. IT WAS MY UNDERSTANDING THAT THE 16 AGREEMENT WITH F.D.F.A. WAS THAT THEY WOULD BUY THE BUILDING 17 AS A GOOD INVESTMENT. THEY ALREADY HAD A TENANT WHO COULD 18 PAY TOP DOLLAR FOR IT. THAT WAS THE LEGION. 19 Q AND IN FACT, DO YOU RECALL THAT THE LEGION -- 20 THIS WAS AFTER THE ARSON; ISN'T THIS CORRECT? 21 A THIS WAS PROBABLY A YEAR AND A HALF TO TWO YEARS 22 AFTER THE ARSON. 23 Q AND THE LEGION HAD TO COME UP WITH THE SIZEABLE 24 RENT FOR THAT BUILDING, ISN'T THAT CORRECT, TO THE 25 F.D.F.A.? 26 A THE RENTAL PREMIUM WAS HIGH, ON THE HIGH SIDE. 27 BUT THE PROPERTY WAS GOOD PROPERTY FOR WHAT OUR PURPOSES 28 WERE. BUT I DON'T THINK WE HAD TO COME UP WITH A HUGE
page279 1 AMOUNT. WE HAD TO COME UP WITH SOME RENT. 2 Q DO YOU RECALL THAT YOUR FIRST RENT WAS ABOUT 3 $40,000? 4 A NO. 5 Q WHAT DO YOU RECALL YOUR FIRST RENT TO BE? 6 A I DON'T KNOW. 7 Q BUT YOU WERE DONOR MANAGER. YOU HAD ACCESS TO THE 8 VARIOUS CONFIRMATIONS, STATEMENTS FROM THE NATIONAL 9 FOUNDATION, INC., WHICH IS EXHIBIT 18; ISN'T THAT TRUE? 10 A I COULD MAKE DISBURSEMENTS FROM THAT ACCOUNT, BUT 11 ONLY IF THE DISBURSEMENT REQUEST FORM WERE PREPARED WITH 12 MRS. Carto’s INVOLVEMENT. I DIDN'T MAKE UNILATERAL 13 DISBURSEMENTS. 14 Q MY QUESTION — LISTEN CAREFULLY. YOU 15 RECEIVED — AS DONOR MANAGER, YOU WERE RECEIVING THE 16 CONFIRMATION STATEMENTS? 17 A THEY WERE COMING TO ME AND, FOR THE MOST PART, 18 BEING FILED, YES. 19 Q SO WHEN YOU SAW THESE STATEMENTS WHICH SHOWED THAT 20 MONIES WERE GOING TO THE FOUNDATION TO DEFEND THE FIRST 21 AMENDMENT, DID YOU EVER ASK MR. CARTO OR MRS. CARTO, 22 LEWIS FURR OR LAVONNE FURR WHY MONIES WERE BEING PAID TO THE 23 FOUNDATION TO DEFEND THE FIRST AMENDMENT? 24 A AS I STATED, I DIDN'T PAY ATTENTION TO THESE UNTIL 25 MUCH LATER. 26 Q DID YOU BELIEVE, AS DONOR MANAGER, YOU SHOULD HAVE 27 PAID ATTENTION? 28 A NO. WHEN I WOULD MAKE A DISBURSEMENT, I WOULD
page280 1 HAVE AN IDEA OF HOW MUCH WAS IN THE ACCOUNT AND I WOULD MAKE 2 THE DISBURSEMENT. IT NEVER CAME TO A POINT WHERE IT HAD TO 3 BE RECONCILED FOR ANY REASON. I DIDN'T HAVE MUCH ATTENTION 4 ON IT UNTIL LATER. 5 Q SIR, YOU HAD YOUR DEPOSITION TAKEN IN THIS 6 MATTER. DO YOU RECALL THAT? 7 A IN THE MATTER OF? 8 Q IN THIS CASE. 9 A IN THIS CASE HERE? 10 Q YES. 11 A OKAY. YES. 12 Q AND YOU DO RECALL THAT, IN FACT, I THINK IT LASTED 13 FOUR DAYS, DO YOU RECALL? 14 A I THOUGHT IT LASTED FOUR WEEKS. 15 Q FEELS THAT WAY WHEN YOU ARE IN DEPOSITION. 16 DO YOU RECALL TALKING ABOUT THIS, A BIG LEASE 17 PAYMENT THAT THE LEGION MADE TO THE F.D.F.A., WHICH REDUCED 18 THE RENT TO $666 PER MONTH? 19 A I DON'T RECALL THAT TESTIMONY. I MAY HAVE 20 TESTIFIED. AND THERE COULD HAVE BEEN SORT OF AN INITIAL 21 BALLOON PAYMENT OR SOMETHING. 22 Q DO YOU RECALL TESTIFYING THAT YOU PAID $666 IN 23 ADVANCE IN 1986 FOR FIVE YEARS, APPROXIMATELY $40,000? 24 MR. MUSSELMAN: OBJECTION. RELEVANCE OF HIS MEMORY OF 25 HIS PRIOR TESTIMONY. 26 THE COURT: SUSTAINED. 27 28
page281 1 BY MR. WAIER: 2 Q DID THE LEGION PAY $666 IN ADVANCE IN 1986 FOR 3 FIVE YEARS, WHICH APPROXIMATED $40,000? 4 A I DON'T RECALL WHAT AGREEMENT WE HAD IN THE TERMS 5 AND WHAT WAS PAID. 6 Q DO YOU RECALL AN ESCROW ACCOUNT SET UP BY 7 JOHN CURRY’s FATHER IN COLUMBUS, NEBRASKA, C-U-R-R-Y? 8 A IT RINGS NO BELL. 9 Q DID YOU EVER MAKE A COMMENT CONCERNING GOING AFTER 10 THE FARREL ESTATE MONEY, THE LEGION GOING AFTER THE FARREL 11 ESTATE MONEY TO THE EFFECT IF WE WANTED TO GO AFTER THE 12 MONEY, WE WOULD HAVE STARTED MOVING ON THIS IN 1990 OR 1991? 13 A SOUNDS LIKE A SENSELESS COMMENT. I DON'T KNOW 14 WHAT CONTEXT IT IS. 15 Q DO YOU RECALL YOUR DEPOSITION BEING TAKEN ON 16 AUGUST 17 IN THIS MATTER, 1994? 17 A I'LL TAKE YOUR REPRESENTATION THAT WAS ABOUT THE 18 TIME I WAS DEPOSED IN THIS CASE. 19 MR. BEUGELMANS: COUNSEL, WHICH VOLUME? 20 MR. WAIER: THE DEPOSITION TAKEN AUGUST 17, 1984 -- 21 1994. EXCUSE ME. 22 23 BY MR. WAIER: 24 Q LET ME READ TO YOU STARTING ON PAGE — ACTUALLY, 25 PAGE 84, LINES 18 THROUGH THE END OF PAGE 84, AND PAGE 85, 26 LINES 1 TO THE END, AND PAGE 86, LINES 1 THROUGH 3. 27 MR. BEUGELMANS: OBJECTION. IT’s NOT IMPEACHMENT. 28 IT’s IMPROPER TO USE THE DEPOSITION.
page282 1 THE COURT: I HAVEN'T SEEN IT. 2 MR. WAIER: IT DOESN'T MEAN — I CAN READ FROM A 3 PARTY’s DEPOSITION. 4 THE COURT: COUNSEL, YOU AND I WON'T GET ALONG IF YOU 5 KEEP INTERRUPTING. 6 MR. BEUGELMANS: I HAVE THE ORIGINAL TRANSCRIPT HERE. 7 THE COURT: THANK YOU. 8 COUNSEL, I'LL BE LIBERAL AND OVERRULE THE 9 OBJECTION. 10 MR. WAIER: I APOLOGIZE TO THE COURT. I WILL NOT DO 11 THAT AGAIN. 12 THE COURT: I TRUST YOU WON'T. 13 14 BY MR. WAIER: 15 QQUESTION: BUT MR. CARTO WASN'T RUNNING THE LEGION 16 PRIOR TO THAT TIME, WAS HE,REFERRING TO THE FARREL-EDISON 17 ESTATE. 18ANSWER: HE WAS. HE WAS. YES. HE WAS THE 19 PERSON I REPORTED TO.20QUESTION: SO YOU ARE SAYING HE WAS ACTUALLY 21 RUNNING THE LEGION PRIOR TO THE TIME OF SEEKING RECOVERY OF 22 THE FARREL ESTATE?23ANSWER: AS THE BUSINESS AGENT OR BUSINESS 24 MANAGER AND THE PERSON WHO I WAS TO REPORT TO, WHO THEN 25 REPORTED TO THE BOARD, IN THAT SENSE, HE WAS RUNNING IT, 26 YES.27QUESTION: AND HOW MUCH WAS HE GETTING PAID 28 DURING THAT PERIOD OF TIME THAT HE WAS THE BUSINESS AGENT?
page283 1ANSWER: I'M NOT AWARE OF ANY PAYMENT THAT WAS 2 MADE BY THE LEGION TO MR. CARTO.3QUESTION: IN FACT, ISN'T IT TRUE THAT HIS SOLE 4 SALARY DURING THAT PERIOD OF TIME WAS A DOLLAR A YEAR?5ANSWER: I WASN'T EVEN AWARE HE WAS PAID A DOLLAR 6 A YEAR. BUT HE WAS IN A POSITION WHERE HE COULD GAIN 7 CONTROL OF THE ASSETS, SUCH AS THESE, AND IT MAY BE 8 WORTHWHILE NOT TO TAKE PAY FOR 10 YEARS IF YOU CAN GET YOUR 9 HANDS ON MILLIONS OF DOLLARS.10QUESTION: AND IT MIGHT BE WORTH TAKING CONTROL 11 OF A COMPANY IF YOU CAN GET YOUR HANDS ON IT, TOO?12ANSWER: TRUE. THAT’s NOT WHY WE DID THIS, NO.13 AT THE TIME YOU SAID THAT STATEMENT, YOU WERE 14 TALKING ABOUT STARTING THE LITIGATION, ISN'T THAT CORRECT, 15 SUING MR. CARTO? 16 MR. MUSSELMAN: OBJECTION. THE TESTIMONY AND QUESTION 17 HE READ — HE MISSTATED THE FIRST QUESTION BY ADDING A 18 PARENTHETICAL NOT IN THE QUESTION. HE QUOTED IT AS SAYING 19 IN REFERENCE TO THE FARREL ESTATE, AND THE QUESTION DOES NOT 20 SAY THAT. 21 THE COURT: THE QUESTION DOES NOT, THAT’s TRUE. BUT HE 22 WAS REFERRING TO IT ABOUT TWO LINES ABOVE, I THINK, OR HE 23 THINKS THAT’s WHAT IS GOING ON. 24 MR. WAIER: I COULD READ BEFORE THAT. I'M SORRY. 25 THE COURT: I THINK HE’s RIGHT. 26 27 BY MR. WAIER: 28 Q YOU WERE REFERRING TO SUING MR. CARTO IN THIS
page284 1 LITIGATION, ISN'T THAT RIGHT, WHEN YOU MAKE THE STATEMENT 2TRUE. THAT’s NOT WHY WE DID THIS, NO,SEEKING THE 3 RECOVERY OF THE FARREL ESTATE? 4 A YES, THAT’s PROBABLY WHAT I MEANT. YES. 5 Q THEN MY QUESTION TO YOU SAID:WHY DID YOU DO IT?6ANSWER: IF WE WANTED TO GO AFTER THE MONEY, WE 7 WOULD HAVE PROBABLY STARTED MOVING ON THAT IN 1990 OR 1991. 8 WE BEGAN MOVING TO REMOVE MR. CARTO FROM THE CORPORATION NOT 9 UNTIL 1993, AND EVEN AFTER THE LAST HALF OF 1993, BECAUSE 10 HIS BEHAVIOR WAS BECOMING INCREASINGLY ERRATIC AND 11 IRRATIONAL. HE WAS TRYING TO CHANGE THE COURSE OF THE 12 CORPORATION. HE WAS THREATENING TO FILE A LAWSUIT AGAINST 13 MEL MERMELSTEIN, AND WE HAD A LONG, DISASTROUS HISTORY WITH 14 MR. MERMELSTEIN, THAT IT COST THE CORPORATION TENS OF 15 THOUSANDS, IF NOT HUNDREDS OF THOUSANDS OF DOLLARS. HE GOT 16 US INVOLVED IN TWO COPYRIGHT INFRINGEMENT SUITS. THESE WERE 17 THE REASONS THAT COMPELLED US TO MOVE TO HAVE MR. CARTO 18 REMOVED FROM THE BOARD OF THE LEGION.19 MR. MUSSELMAN: OBJECTION. MISSTATES THE -- 20 CORRECTION,REMOVED BY THE BOARD.21 22 BY MR. WAIER: 23 QREMOVED BY THE BOARD.NO,REMOVED BY THE BOARD 24 OF THE LEGION.25 NOW, SIR, THAT REFRESHES YOUR RECOLLECTION THAT 26 YOU KNEW EARLY ON IN 1990 THAT MR. CARTO WAS INVOLVED IN 27 DISPENSING FUNDS FROM THE FARREL ESTATE; ISN'T THAT TRUE? 28 A I THINK IT WAS PROBABLY IN '91 WHEN I SAW THE
page285 1 FIRST DISPENSATION FROM THAT ACCOUNT THAT I KNEW THAT, OR 2 UNDERSTOOD THAT. 3 Q BUT YOU INDICATED IN YOUR TESTIMONYIF WE WANTED 4 TO GO AFTER THE MONEY, WE WOULD HAVE PROBABLY STARTED MOVING 5 ON THAT IN 1990 OR 1991.6 A YEAH, 1990 OR 1991. 7 Q NOW, IN FACT, DOES THIS NOW REFRESH YOUR 8 RECOLLECTION THAT YOU HAD — THAT THE LEGION WAS 9 RESPONSIBLE AND/OR HAD PAID HUNDREDS OF THOUSANDS OF DOLLARS 10 IN CONNECTION WITH THE MERMELSTEIN LITIGATION? 11 A AT THE TIME I WAS SITTING THERE ANSWERING THE 12 QUESTION, I PROBABLY GAVE THAT RANGE. I DON'T KNOW HOW MUCH 13 WE ACTUALLY SPENT ON THOSE LITIGATIONS. I COULD PROBABLY 14 DETERMINE IT. IT MIGHT HAVE BEEN IN THE AREA OF TOTAL, 15 MAYBE, 75- OR EVEN $100,000. I DON'T THINK IT WOULD HAVE 16 BEEN HUNDREDS OF THOUSANDS OF DOLLARS. 17 Q YOU DIDN'T CORRECT YOUR DEPOSITION ON THOSE LINES, 18 DID YOU? 19 A THAT’s CORRECT. 20 Q YOU REVIEWED IT THOROUGHLY PRIOR TO SIGNING YOUR 21 NAME TO THAT UNDER PENALTY OF PERJURY, DID YOU NOT? 22 A I DID HAVE AN OPPORTUNITY TO REVIEW IT. I DID NOT 23 MAKE THE CORRECTION. 24 Q AT THIS POINT IN TIME, YOU WERE PRESIDENT OF THE 25 LEGION, ISN'T THAT TRUE, AT THE TIME YOU GAVE THE 26 DEPOSITION? 27 A YES, I BELIEVE I WAS. UH-HUH. 28 Q SO YOU HAD ACCESS TO ALL OF THE FINANCIALS AT THAT
page286 1 POINT IN TIME, DIDN'T YOU? 2 A YES. 3 Q AND YOU CERTAINLY HAD ACCESS TO MR. HULSY BECAUSE 4 HE WAS COUNSEL TO THE CORPORATION AT THIS TIME; ISN'T THAT 5 TRUE? 6 A YES, HE WAS RETAINED BY THE CORPORATION. 7 Q YOU WOULD HAVE KNOWN HOW MUCH HE WAS PAID? 8 A YES. 9 THE COURT: GOOD TIME TO STOP. 1:30. 10 MR. WAIER: PERFECT. 11 THE COURT: THIS OUGHT TO GET THIS CONCLUDED QUICK HERE 12 WITH THIS WITNESS. 13 14 (PROCEEDINGS RECESSED.) 15 16 THE COURT: BACK ON THE RECORD. 17 18 BY MR. WAIER: 19 Q MR. MARCELLUS, YOU INDICATED EARLIER ON IN YOUR 20 TESTIMONY THAT H.E.F. WAS MERELY AN ACCOUNT OF THE LEGION; 21 IS THAT CORRECT? 22 A YES. 23 Q AND YOU INDICATED THAT, IN OTHER WORDS, IT WAS A 24 BANK ACCOUNT? 25 A IT WAS AN ACCOUNT WITH A COMPANY CALLED NATIONAL 26 FOUNDATION. IT’s ON ONE OF THESE EXHIBITS HERE, NATIONAL 27 FOUNDATION, INCORPORATED. 28 Q SIR, CAN YOU TELL ME, IF IT WAS AN ACCOUNT OF
page287 1 LEGION, WHY WOULD THE LEGION BORROW MONEY FROM THAT ACCOUNT 2 IF IT WAS LEGION MONEY? 3 A ONLY IF MR. CARTO INSISTED THAT IT SHOULD. 4 Q SIR, DIDN'T YOU SIGN A PROMISSORY NOTE ON BEHALF 5 OF THE INSTITUTE OF HISTORICAL REVIEW WHICH YOU INDICATED 6 WAS PART OF THE LEGION; ISN'T THAT RIGHT? 7 A AS PER THE PREVIOUS LITIGATION, YES. YOU KNOW I 8 DID. 9 Q LET ME HAND THIS TO YOU, A PROMISSORY NOTE FOR 10 $187,000 DATED JULY 1, 1991, COURT EXHIBIT IDENTIFICATION 11 NUMBER 184. 12 A YES. 13 Q YOU SIGNED THAT PROMISSORY NOTE? 14 A I DID. 15 Q IN FACT, THIS WAS A PROMISSORY NOTE FOR WHICH YOU 16 ALSO SIGNED A UCC-1 FINANCING STATEMENT; ISN'T THAT TRUE? 17 A I BELIEVE THAT WAS ALSO FOR HISTORICAL EDUCATION 18 FOUNDATION, YES. 19 Q EVEN THOUGH THIS PURPORTEDLY WAS A LEGION ACCOUNT; 20 ISN'T THAT RIGHT? YOU SIGNED A PROMISSORY NOTE EVEN THOUGH 21 IT WAS LEGION MONEY? 22 A YES. 23 Q YOU TESTIFIED EARLIER YOU ARE AWARE OF AN 24 AGREEMENT BETWEEN THE LEGION AND WILLIS CARTO CONCERNING THE 25 RECOVERY AND DISPOSITION OF THE FARREL-EDISON ESTATE. DO 26 YOU RECALL THAT? 27 A I TESTIFIED RELATIVE TO IT, YES. 28 Q LET ME SHOW YOU WHAT WE HAVE MARKED FOR
page288 1 IDENTIFICATION AS EXHIBIT 185, A LETTER TO LAVONNE, DATED 2 SEPTEMBER 14, 1985, PURPORTEDLY SIGNED BY MR. CARTO. DO YOU 3 RECOGNIZE MR. Carto’s SIGNATURE ON THAT? 4 A IT LOOKS LIKE ONE OF HIS SIGNATURES, YES. 5 Q AND IN FACT, YOU'VE SEEN THAT DOCUMENT BEFORE, 6 HAVEN'T YOU? 7 A CAN I LOOK AT IT A MOMENT TO REFRESH MY MEMORY? 8 Q SURE. 9 A YES, I HAVE SEEN THIS. 10 Q AND YOU UNDERSTOOD THAT THAT IS THE AGREEMENT 11 BETWEEN THE LEGION, OR AT LEAST REPRESENTS THE AGREEMENT 12 BETWEEN THE LEGION AND WILLIS CARTO CONCERNING THE RECOVERY 13 AND DISPOSITION OF THE FARREL-EDISON ESTATE? 14 A IT LOOKS LIKE A ONE-SIDED NARRATIVE. IT DOESN'T 15 LOOK LIKE AN AGREEMENT TO ME. IT LOOKS LIKE A LETTER TO 16 LAVONNE FURR. 17 Q YOU UNDERSTOOD THAT THE TERMS OF THAT LETTER WERE 18 AGREED TO BY LAVONNE FURR, DON'T YOU? 19 A NO. 20 Q DID YOU EVER TALK TO LAVONNE FURR ABOUT THE 21 SPECIFIC LETTER DATED SEPTEMBER 14, 1985? 22 A I HAVE NOT SEEN THIS. WHEN I TALKED TO HER, I 23 DIDN'T KNOW IT EXISTED. 24 Q NOW, FINALLY, ONE LAST QUESTION AREA. YOU 25 INDICATED IN YOUR TESTIMONY, I BELIEVE YOU ARE ADAMANT ABOUT 26 IT, ONE OF THE REASONS WHY YOU REMOVED WILLIS CARTO OR YOUR 27 GROUP ATTEMPTED TO REMOVE WILLIS CARTO WAS BECAUSE OF THE 28 EDITORIAL DEPARTURE HE WAS TAKING?
page289 1 MR. MUSSELMAN: OBJECTION. MISSTATES THE TESTIMONY. 2 HE DIDN'T SAY HE HAD REMOVED. 3 MR. WAIER: I SAID HIS GROUP. 4 MR. MUSSELMAN: FOR — FOR HIS GROUP, THE BOARD OF 5 DIRECTORS. 6 THE COURT: NO QUESTION IS EVIDENCE. I'M GOING TO 7 OVERRULE IT. HE WILL EXPAND ON THE QUESTION BECAUSE IF IT 8 DOES NOT STATE HIS TESTIMONY. 9 10 BY MR. WAIER: 11 Q DO YOU RECALL THAT IN MARCH 1993, YOU TESTIFIED 12 THAT AT THAT POINT IN TIME, THAT YOU WERE LOOKING INTO 13 WILLIS CARTO AND HIS AUTHORITY? DO YOU RECALL THAT? 14 A THE SENIOR STAFF AT THE LEGION WAS, YES. 15 Q AND THE SENIOR STAFF WAS VERY CONCERNED ABOUT 16 ABERRATIONS BY MR. CARTO ABOUT CHANGING THE EDITORIAL 17 DIRECTION OF THE I.H.R.? 18 A YES. 19 Q ISN'T IT TRUE THAT IT WAS YOU, AS EARLY AS 1991, 20 THAT SUGGESTED THESE CHANGES TO THE EDITORIAL REVIEW, THE 21 JOURNAL OF HISTORICAL REVIEW? 22 A NO. 23 Q SIR, LET ME HAND YOU WHAT WE'LL MARK AS NEXT IN 24 ORDER, WHICH IS EXHIBIT MARKED FOR IDENTIFICATION 186. 25 MR. BEUGELMANS: AGAIN, THIS IS A DOCUMENT WHICH 26 PLAINTIFFS HAVE NEVER SEEN BEFORE. 27 MR. WAIER: THIS IS IMPEACHMENT DIRECTLY, YOUR HONOR. 28 THE COURT: GO AHEAD.
page290 1 BY MR. WAIER: 2 Q LET ME HAND YOU WHAT WE'LL MARK AS EXHIBIT FOR 3 IDENTIFICATION NUMBER 186, WHICH IS NOVEMBER 24, 1991, 4 PURPORTED MEMO TO WILLIS FROM TOM. LOOK AT THE SECOND PAGE 5 OF THIS. IS THAT YOUR SIGNATURE? 6 A YES. 7 Q DO YOU RECALL PREPARING THIS MEMO? 8 A YES. 9 Q IN FACT, DOES THIS NOT REFRESH YOUR RECOLLECTION 10 THAT IT WAS YOU AS EARLY AS NOVEMBER 1991 THAT SUGGESTED 11 THAT THE JOURNAL OUGHT TO TAKE A DIFFERENT DIRECTION FROM 12 THE STAGNATED POSITION? 13 A WELL, IT’s TRUE THAT I WAS ALWAYS MAKING 14 SUGGESTIONS ABOUT — ABOUT THE JOURNAL HAVING DIFFERENT 15 THINGS IN IT, BUT NOT — NOT THE TYPE OF SWITCHING RAILROAD 16 TRACKS AS MR. CARTO NOT ONLY WAS SUGGESTING BUT WAS 17 INSISTING ON. I ALWAYS SOUGHT WAYS TO TRY TO IMPROVE THE 18 JOURNAL, ITS LOOK, TO BROADEN THE CONTENT, SO FORTH. BUT 19 THESE WERE SUGGESTIONS ON MY PART. THESE WERE NOT 20 ULTIMATUMS. 21 Q BUT IT WAS YOU WHO MADE THE SUGGESTIONS; ISN'T IT 22 TRUE? 23 A I MADE SOME SUGGESTIONS. AND THEY WERE MAINLY 24 RELATIVE TO THE APPEARANCE OF THE JOURNAL TO MAKE IT LOOK 25 MORE MODERN, BUT THEY WERE NOT CONCERNING THE TOPIC AREAS, 26 THE RADICAL TOPIC AREA DEPARTURE MR. CARTO WAS INSISTING ON. 27 Q DIDN'T YOU, AT ONE POINT IN TIME, EMPHASIZE TO 28 MR. CARTO THE JOURNAL OUGHT TO CHANGE FROM THE EMPHASIS ON
page291 1 HOLOCAUST-RELATED HISTORY AND GO TO SOME OTHER FORMS OF 2 HISTORY? 3 A NO. I ONLY SUGGESTED THAT — NOT THAT IT SHOULD 4 CHANGE, BUT THAT IT COULD INCLUDE MORE AREAS, YES. 5 Q NOW, FINALLY, YOU INDICATED THAT YOU HAD MET WITH 6 MR. HENRY FISCHER, I BELIEVE YOU STATED SOMETIME IN 19 -- 7 WAS IT '87 OR SO? 8 A I MET MR. FISCHER A COUPLE OF TIMES. ONE OF THOSE 9 MEETINGS COULD HAVE BEEN IN 1987. 10 Q AND YOU INDICATED YOU DIDN'T KNOW WHY YOU MET 11 MR. FISCHER; IS THAT TRUE? 12 A WELL, I DON'T UNDERSTAND WHY — THE FIRST TIME, I 13 DIDN'T UNDERSTAND WHY MR. CARTO BROUGHT HIM TO THE OFFICE. 14 LATER, HE BEGAN DOING TRANSLATION WORK, SO I UNDERSTOOD WHAT 15 MR. FISCHER’s ROLE WAS. 16 Q YOU UNDERSTOOD BEFORE 1990 THAT MR. FISCHER WAS 17 INVOLVED IN THE RECOVERY OF THE FARREL-EDISON ESTATE; ISN'T 18 THAT TRUE? 19 A AS I SIT HERE, I DON'T THINK I WAS AWARE OF THAT. 20 Q IN FACT, DIDN'T MR. CARTO TELL YOU THAT ON THE FEW 21 OCCASIONS YOU MET WITH MR. FISCHER, HE WAS ALSO GOING TO BE 22 HELPING MR. CARTO IN THE RECOVERY OF THE FARREL-EDISON 23 ESTATE? 24 A NO, I DON'T BELIEVE THAT WAS MENTIONED. 25 Q WHEN WAS THE FIRST TIME YOU LEARNED MR. FISCHER 26 HAD ANYTHING TO DO WITH THE — WITH THE RECOVERY OF THE 27 FARREL-EDISON ESTATE? 28 A I THINK IT WAS WHEN THE — WHEN WE DISCOVERED A
page292 1 CHECK DRAWN ON THE LEGION ACCOUNT PAYABLE TO LIBERTY LOBBY, 2 MR. Carto’s ORGANIZATION, THAT WAS ENCLOSED WITH A COVER 3 LETTER TO MR. FISCHER. 4 Q THAT WAS THE FIRST TIME YOU UNDERSTOOD MR. FISCHER 5 HAD ANYTHING TO DO WITH THE RECOVERY? 6 A I COULD BE MISTAKEN. I BELIEVE SO. 7 Q NOW, YOU ALSO — IF YOU TAKE A LOOK AT EXHIBIT, I 8 BELIEVE, 46, DO YOU RECALL THAT IN FRONT OF YOU, COUNSEL 9 SHOWED YOU THAT ON DIRECT EXAMINATION? 10 A THIS IS THE BIDDLE AND COMPANY LETTER. 11 Q IT MIGHT HAVE BEEN EXHIBIT 45. I MIGHT HAVE 12 WRITTEN -- 13 MR. BEUGELMANS: 46, YOU ARE CORRECT, LETTER FROM 14 MR. HOOPER FROM BIDDLE AND COMPANY. 15 MR. WAIER: NO, I'M ASKING HIM — I BELIEVE IT WAS ONE 16 CONCERNING FRITZ BERG. 17 THE WITNESS: OH, NO, THIS IS NOT THE FRITZ BERG 18 LETTER. THAT’s 45. 19 20 BY MR. WAIER: 21 Q EXHIBIT 45, DO YOU HAVE THAT? 22 A YES. 23 Q WHEN WAS THE FIRST TIME YOU SAW THIS LETTER? 24 A I THINK I MAY HAVE SEEN THIS LETTER FIRST SOMETIME 25 IN THE SUMMER OF 1993. 26 Q WELL, YOU UNDERSTOOD THAT THE LEGION WAS SETTING 27 UP A SEPARATE ORGANIZATION TO — AT THIS PARTICULAR POINT 28 IN TIME IN MARCH 1991 CONSISTENT WITH MR. HULSY’s ADVICE FOR
page293 1 PURPOSES OF RECEIVING DONATIONS; ISN'T THAT CORRECT? 2 MR. MUSSELMAN: OBJECTION. MULTIPLE. COMPOUND. 3 THE COURT: SUSTAINED. 4 5 BY MR. WAIER: 6 Q YOU TESTIFIED THAT MR. HULSY ADVISED YOU, AS WELL 7 AS THE LEGION, THAT TO AVOID CREDITORS OR POTENTIAL JUDGMENT 8 CREDITOR, THAT YOU COULD SET UP A SEPARATE ORGANIZATION 9 ISN'T THAT CORRECT? 10 MR. MUSSELMAN: OBJECTION. MISSTATES THE TESTIMONY. 11 HE’s ASKING TO REPEAT HIS TESTIMONY. I OBJECT. 12 THE COURT: SUSTAINED. IT’s ASKED AND ANSWERED. 13 14 BY MR. WAIER: 15 Q ISN'T IT TRUE THAT YOU WERE AWARE IN MARCH OF 1991 16 THAT A SEPARATE ORGANIZATION WAS BEING SET UP FOR THIS 17 PURPOSE? 18 MR. MUSSELMAN: WHAT IS THE PURPOSE? 19 MR. WAIER: THE PURPOSE OF RECEIPT OF MONIES TO AVOID 20 THE PAYMENT OF A POTENTIAL JUDGMENT CREDITOR. 21 THE WITNESS: THERE WAS ONE — A POINT WHERE 22 MRS. CARTO TOLD ME ABOUT THIS VIBET ORGANIZATION, VIBET 23 COMPANY THAT HAD BEEN SET UP TO CHANNEL THE FUNDS THROUGH 24 THE LEGION OR SOMETHING. THAT’s THE FIRST I HEARD OF ANY 25 OTHER ORGANIZATION WHERE THE FARREL ESTATE GIFTS WERE GOING 26 TO COME TO THE LEGION. 27 28
page294 1 BY MR. WAIER: 2 Q SHE TOLD YOU THIS SOMETIME IN 1990; ISN'T THAT 3 TRUE? 4 A I HAVE TO SEE MY NOTE, REFRESH MY MEMORY. I'M NOT 5 SURE. 6 Q BUT IT WAS CERTAINLY WITHIN 1991; ISN'T THAT TRUE? 7 A IT COULD HAVE BEEN AS EARLY AS 1991. 8 Q WITH RESPECT TO THE LETTER, TALKING ABOUT THE 9 CONRAD GEIEB, G-E-I-E-B, MONIES — DO YOU SEE THIS? 10 A YES. 11 Q — NONE OF THAT MONEY WENT INTO ANYTHING OTHER 12 THAN THE LEGION FOR SURVIVAL OF THE FREEDOM, INC., 13 MR. GEIEB’s ESTATE? 14 A CONRAD — SHOULD BE GRIEB, G-R-I-E-B. YES, I 15 BELIEVE JUST BEFORE THIS, MR. GRIEB HAD DIED. HE HAD GIFTED 16 SOME FUNDS TO THE LEGION. FRITZ BERG WAS THE EXECUTOR, AND 17 THE LEGION RECEIVED THE CHECKS. 18 Q THE CHECKS WEREN'T MADE OUT TO ANY OTHER 19 ORGANIZATION EXCEPT THE LEGION? 20 A I DON'T RECALL WHO THE CHECKS WERE MADE OUT TO. 21 Q THEY WENT INTO THE LEGION ACCOUNT, NOT SOME 22 ACCOUNT CALLED THE INSTITUTE FOR HISTORICAL REVIEW; ISN'T 23 THAT TRUE? 24 A NO. THEY WOULDN'T HAVE BEEN MADE OUT TO THE 25 LEGION. THE LEGION HAD NO ACCOUNT. IT WOULD BE THE 26 INSTITUTE FOR HISTORICAL REVIEW OR THE NOONTIDE PRESS. 27 Q BUT NOT TO THE LEGION, FOR THE INSTITUTE OF 28 HISTORICAL REVIEW; IS THAT CORRECT?
page295 1 A NOT TO THE WHAT? 2 Q NOT TO THE INSTITUTE FOR HISTORICAL REVIEW? THOSE 3 MONIES DID NOT GO INTO ANY ACCOUNT FOR THIS INSTITUTE; ISN'T 4 THAT CORRECT? 5 A THEY PROBABLY DID GO — GO INTO THE — THE 6 INSTITUTE FOR HISTORICAL REVIEW ACCOUNT. 7 Q WHY DO YOU BELIEVE THAT? 8 A THAT’s WHERE THE MAJORITY OF THE FUNDS WE WERE 9 RECEIVING WENT INTO THAT. THAT WAS OUR CHECKING ACCOUNT. 10 THAT WAS OUR MAIN TRADE NAME. 11 Q THE INSTITUTE FOR — STRIKE THAT. 12 I'M TALKING ABOUT THE — I'M TALKING ABOUT THE 13 INTERNATIONAL LEGION FOR THE SURVIVAL OF FREEDOM TRUST. 14 A YES. 15 Q GRIEB’s MONEY DIDN'T GO INTO THAT ACCOUNT, DID IT? 16 A I DON'T BELIEVE SO. 17 Q AND IN FACT, THERE WAS NO CHECK MADE OUT TO THE 18 INTERNATIONAL LEGION FOR THE SURVIVAL OF FREEDOM TRUST FROM 19 THE CONRAD GRIEB ESTATE, WAS THERE? 20 A I NEVER SAW A CHECK MADE OUT TO INTERNATIONAL 21 LEGION FOR THE SURVIVAL OF FREEDOM. 22 Q TRUST? 23 A TRUST. 24 MR. WAIER: I HAVE NOTHING FURTHER. 25 THE COURT: REDIRECT? 26 MR. MUSSELMAN: YES. 27 MR. LANE: MAY I INQUIRE ON BEHALF OF THE LOBBY? 28 THE COURT: THIS IS INTERESTING. WE REALLY HAVE TWO
page296 1 PARTIES HERE. I THOUGHT WE ARE — THE AGREEMENT WAS WE 2 WOULD HAVE ONE PERSON DO THE DIRECT AND ONE PERSON DO THE 3 CROSS ON EACH SIDE. I REALIZE YOU WEREN'T HERE WHEN WE DID 4 THAT. 5 MR. WAIER: THAT WAS WITH RESPECT TO THE PLAINTIFF. 6 AND WE HAD WITH RESPECT TO — THERE WAS ONLY ONE 7 PLAINTIFF. THERE ARE NUMEROUS DEFENDANTS. THERE’s A 8 BIFURCATION DUTY BECAUSE OF THE NUMEROUS DEFENDANTS. THERE 9 ARE SEVERAL ORGANIZATIONS BEING REPRESENTED BY SEPARATE 10 COUNSEL. 11 MR. BEUGELMANS: MAY I BE HEARD? THERE’s ONLY ONE SIDE 12 FOR THE DEFENDANTS. THERE’s A UNIT OF INTEREST BETWEEN 13 WILLIS CARTO AND LIBERTY LOBBY. HE’s THE PRESIDENT, 14 TREASURER, MEMBER OF THE BOARD OF DIRECTORS. IT WILL BE AN 15 UNDUE CONSUMPTION OF TIME AND UNDUE PREJUDICE TO ALLOW 16 DOUBLE CROSS-EXAMINATION OF WITNESSES ON THAT SIDE. 17 THE COURT: I'M GOING TO OVERRULE YOU AND LET MR. LANE 18 ASK QUESTIONS. BUT I DON'T WANT TO HEAR THE SAME 19 QUESTIONS. I THINK THAT’s A POINT WELL TAKEN. I DON'T HAVE 20 TO HEAR THE SAME ANSWER TWICE UNLESS, FOR SOME REASON, IT'S 21 SOMETHING YOU THINK I MISSED. 22 MR. LANE: THANK YOU. THIS WILL BE DIFFERENT. 23 MR. WAIER: I WILL BE EXCUSED FOR TWO MINUTES. BE 24 RIGHT BACK. 25 MR. LANE: MAY I PROCEED? 26 THE COURT: YES. 27 28
page297 1 CROSS-EXAMINATION 2 BY MR. LANE: 3 Q GOOD AFTERNOON, MR. MARCELLUS. 4 A GOOD AFTERNOON, MR. LANE. 5 Q YOU TESTIFIED THAT YOU LEFT THE LEGION IN FEBRUARY 6 OF 1994; IS THAT CORRECT? 7 A '95, I THINK. 8 Q SO — YOU DID TESTIFY FEBRUARY 1994. ARE YOU 9 CHANGING YOUR ANSWER, THEN? 10 MR. MUSSELMAN: ASKED AND ANSWERED IF IT’s THE SAME 11 QUESTION. 12 THE COURT: OVERRULED. 13 THE WITNESS: IT MUST HAVE BEEN — IT MUST HAVE BEEN 14 '95, FEBRUARY OF '95. 15 16 BY MR. LANE: 17 Q HAVE YOU RECEIVED — DID YOU RECEIVE 18 APPROXIMATELY $73,000 FROM A BANK IN SWITZERLAND DURING 19 1991, '92 AND 93? 20 MR. MUSSELMAN: ASKED AND ANSWERED. 21 MR. LANE: NO, WE DON'T HAVE AN ANSWER. 22 THE COURT: OVERRULED. WE DIDN'T KNOW WHERE THE MONEY 23 CAME FROM, AS I REMEMBER IT. 24 THE WITNESS: DID I RECEIVE? 25 26 BY MR. LANE: 27 Q YOU OR THE DESIGNEE. 28 A THAT — YEAH, THAT’s ABOUT — I'M SURE THAT'S
page298 1 FAIRLY ACCURATE. 2 Q AND THAT INCLUDED A $6,000 BONUS, DOES IT? 3 MR. MUSSELMAN: ASKED AND ANSWERED. 4 THE COURT: OVERRULED. 5 THE WITNESS: I FORGET WHAT THE BONUS WAS, BUT I'LL 6 TAKE YOUR WORD FOR IT. IT WAS $6,000. 7 8 BY MR. LANE: 9 Q WHAT WAS THE BONUS FOR? 10 A PROBABLY FOR GOOD PERFORMANCE. 11 Q I BEG YOUR PARDON? 12 A PROBABLY FOR GOOD PERFORMANCE. 13 Q GOOD PERFORMANCE, OKAY. DID YOU SWEAR THAT YOU 14 HAD NOT RECEIVED ANYTHING CLOSE TO $73,000 PREVIOUSLY? 15 MR. MUSSELMAN: VAGUE AS TO TIME. 16 THE COURT: SUSTAINED. 17 18 BY MR. LANE: 19 Q DO YOU RECALL APPEARING BEFORE JUDGE SHAW IN 20 NEWPORT BEACH, CALIFORNIA, ON FRIDAY, JUNE 16, 1995, 21 REGARDING THE SEARCH WARRANT EXAMINATION? 22 MR. BEUGELMANS: SEARCH WARRANT? 23 24 BY MR. LANE: 25 Q SEARCH WARRANT EXAMINATION, THAT’s CORRECT. 26 DO YOU RECALL THAT? 27 A I RECALL IT BEING AT THE COURT. I RECALL JUDGE 28 SHAW. I DON'T RECALL BEING ON THE STAND, BUT I MAY HAVE
page299 1 BEEN ON THE STAND BRIEFLY. 2 Q BRIEFLY. DO YOU RECALL BEING ASKED THIS QUESTION 3 REGARDING WHAT YOU TOLD DETECTIVE ROOKER, R-O-O-K-E-R, IF 4 YOU — DO YOU RECALL BEING ASKED IF YOU WERE — ADVISED 5 DETECTIVE ROOKER THAT YOU HAD BEEN PAID FROM THIS SWISS BANK 6 ACCOUNT? 7 A I'M SORRY, WAS THAT A QUESTION? 8 Q YES. 9 A I DIDN'T GET THE QUESTION. 10 Q DO YOU RECALL BEING ASKED IF YOU TOLD 11 DETECTIVE ROOKER THAT YOU HAD RECEIVED FUNDS FROM THE SWISS 12 BANK? 13 A I DON'T RECALL THAT. NO. 14 Q AND YOU RECALL AT ONE POINT BEING ASKED, IN FACT, 15 YOU HAD RECEIVED APPROXIMATELY $73,000; ISN'T THAT CORRECT? 16 DO YOU RECALL BEING ASKED THAT QUESTION? 17 A NO, I DON'T. 18 Q AND DO YOU RECALL ANSWERINGNO, NO, NOT ANYTHING 19 CLOSE TO THAT? 20 A I DON'T RECALL. I DON'T RECALL. 21 Q ALL RIGHT. LET ME SHOW YOU THE TRANSCRIPT OF THE 22 PROCEEDING. 23 MR. BEUGELMANS: WHICH PAGE, COUNSEL? 24 MR. WAIER: I'LL SHOW YOU. 25 (PAUSE) 26 MR. BEUGELMANS: YOUR HONOR, MR. LANE HAS PROVIDED 27 PLAINTIFF WITH A COMPRESSED COPY OF A TRANSCRIPT STARTING 28 PAGE 274. THERE’s NO REFERENCE IN THE PORTION THAT YOU
page300 1 PROVIDED TO US WHICH ACCOUNT IS BEING REFERENCED IN THE 2 EXAMINATION, WHOEVER CONDUCTED THIS EXAMINATION, SIR. SO I 3 DON'T THINK YOU CAN USE IT FOR THIS PURPOSE. 4 MR. LANE: I DON'T THINK THAT’s TRUE, YOUR HONOR. 5 THE COURT: I DON'T KNOW. I DON'T SEE THESE THINGS. 6 MR. BEUGELMANS: WOULD YOU PLEASE TAKE A LOOK AT WHAT 7 MR. LANE HAS. THERE’s NO REFERENCE TO ANY BANQUE CONTRADE 8 LAUSANNE ACCOUNT. 9 MR. LANE: TOP OF THE PAGE, YOUR HONOR. 10 THE COURT: I'M GOING TO OVERRULE THE OBJECTION. YOU 11 CAN — IT IS SOMEWHAT AMBIGUOUS. YOU CAN GO INTO THAT ON 12 DIRECT. I DON'T KNOW THAT IT MAKES A LOT OF DIFFERENCE. 13 14 BY MR. LANE: 15 Q I'M GOING TO SHOW YOU PAGE 274 FROM THE HEARING I 16 MADE REFERENCE TO. PLEASE TAKE YOUR TIME AND READ THAT TO 17 YOURSELF. 18 A WANT ME TO READ THIS WHOLE -- 19 Q TO YOURSELF. THE PART THAT’s 274 IS THIS ONE PART 20 HERE. YOU CAN READ AS MUCH AS YOU WISH. 21 A OKAY. I CAN SEE IT THAT IT STATES THAT IN THE 22 TRANSCRIPT. 23 Q ALL RIGHT. THE BANK ACCOUNT YOU WERE BEING ASKED 24 ABOUT WAS THE SWISS BANK ACCOUNT WE HAVE TALKED ABOUT 25 EARLIER TODAY; ISN'T THAT CORRECT? 26 A YES, IT SOUNDS LIKE IT WOULD HAVE BEEN. YES. 27 Q WASN'T THIS A SEARCH WARRANT WHICH WAS BASED UPON 28 ALLEGATIONS YOU MADE ABOUT THAT BANK ACCOUNT, THAT BANK
page301 1 ACCOUNT? 2 A WELL, I THINK AS THAT STATES, I DIDN'T TELL 3 MR. ROOKER ABOUT THE MONEY I HAD BEEN PAID FROM THAT 4 ACCOUNT. 5 Q WE UNDERSTOOD YOU DIDN'T TELL HIM, BUT YOU DID 6 MAKE ALLEGATIONS TO HIM, DID YOU NOT, WHICH LED TO THE 7 SEARCH WARRANT BEING ISSUED? 8 MR. BEUGELMANS: YOUR HONOR, I OBJECT. WHAT IS THE 9 RELEVANCE OF THIS? 10 THE COURT: I DON'T KNOW. I SUSPECT IT WILL BE TIED 11 IN. I WILL OVERRULE THE OBJECTION. WE'RE GOING TO GET 12 THROUGH IT QUICKLY. 13 MR. LANE: IT’s JUST BECAUSE — I SAY BECAUSE 14 PLAINTIFF’s COUNSEL DOUBTED THAT IT WAS THE SAME BANK 15 ACCOUNT. IF THEY WOULD CONCEDE THAT, WE WOULD NOT NEED THE 16 BACKGROUND. 17 THE COURT: YOU DON'T NEED TO EXPLAIN THE QUESTIONS. 18 19 BY MR. LANE: 20 Q ISN'T THAT TRUE THAT THE MATTER BEFORE JUDGE SHAW 21 WAS A SEARCH WARRANT REGARDING THIS FARREL ESTATE FUNDS? 22 A THAT WAS THE SUBSTANCE, YES. 23 Q AND YOU WERE BEING ASKED BEFORE THE SEARCH WARRANT 24 WAS ISSUED IF YOU TOLD DETECTIVE ROOKER THE TRUTH YOU 25 RECEIVED $73,000 FROM THAT ACCOUNT; ISN'T THAT CORRECT? 26 A WHAT I BELIEVE IT STATES, THAT I DIDN'T SAY SUCH A 27 THING TO MR. ROOKER. DIDN'T I STATE THAT? 28 Q WILL YOU ANSWER MY QUESTION. IS THAT WHAT YOU --
page302 1 A YOUR QUESTION IS INCOMPREHENSIBLE. 2 Q I'LL TRY TO MAKE IT SIMPLE, MR. MARCELLUS. WAS 3 THIS QUESTION ASKED OF YOU:WHEN YOU MET WITH 4 DETECTIVE ROOKER, ON MARCH 6, 1995, DID YOU EXPLAIN TO HIM 5 OR ADVISE HIM THAT YOU RECEIVED MONEY FROM THE BANK AND PUT 6 IT IN YOUR PERSONAL ACCOUNT?WERE YOU ASKED THAT QUESTION? 7 A YES. 8 Q DID YOU SAYNO? 9 A YES. 10 Q AND THEN WERE YOU ASKED — IN FACT, THEN WERE YOU 11 ASKED YOU HAD; ISN'T THAT CORRECT? AND DID YOU ANSWERYES? 12 A YES. 13 Q THEN WERE YOU ASKED,IN FACT, YOU HAD RECEIVED 14 APPROXIMATELY $73,000; ISN'T THAT CORRECT?IS THAT CORRECT? 15 A YES. 16 Q STILL UNDER OATH, DID YOU ANSWERNO, NOT ANYTHING 17 CLOSE TO THAT? 18 A WELL, IT MIGHT NOT HAVE BEEN QUITE WITH THAT 19 DRAMA. IT MIGHT HAVE BEENNO. THINKING ABOUT IT FOR THE 20 FIRST TIME, IT MIGHT NOT HAVE SEEMED LIKE IT WAS THAT MUCH 21 MONEY. 22 Q DID YOU ANSWERNO, NOT ANYTHING CLOSE TO THAT? 23 A IT’s RIGHT THERE IN BLACK AND WHITE. I MUST HAVE. 24 Q AND NOW TODAY, YOU SAY YOU WERE PAID $73,000? 25 A I ADMIT WITHOUT THE CALCULATIONS THAT IT COULD 26 HAVE BEEN IN THAT AREA, YES. 27 Q DID YOU DELIBERATELY TRY TO MISLEAD THE COURT? 28 A I DID NOT.
page303 1 Q DID MR. CARTO TELL YOU AT ONE POINT FUNDS FROM THE 2 FARREL ESTATE WERE AVAILABLE FOR THE LEGION? 3 MR. MUSSELMAN: OBJECTION TO TIME. VAGUE AS TO TIME. 4 5 BY MR. LANE: 6 Q DID HE EVER TELL YOU THAT? 7 A YES. BOTH HE AND ELISABETH CARTO INDICATED TO ME 8 SOME FUNDS WOULD BE AVAILABLE, YES. 9 Q DID MR. CARTO SAY TO YOU,MR. MARCELLUS, TELL ME 10 ABOUT THE PRESSING DEBTS OF THE LEGION BECAUSE WE'LL PAY 11 THOSE RIGHT NOW FROM THE SWISS BANK ACCOUNT? 12 A NO. NO, HE DIDN'T SAY ANY SUCH THING. 13 Q DID YOU GIVE HIM A LIST OF DEBTORS WHO YOU THOUGHT 14 SHOULD BE PAID? 15 A WELL, I WORKED WITH ELISABETH ON PREPARING A LIST 16 OF INDIVIDUAL CONTRIBUTORS, INDIVIDUALS WHO HAD LOANED MONEY 17 TO THE INSTITUTES WHOSE NOTES WERE COMING DUE. 18 Q DID YOU SUGGEST K&I, INC., BE PAID? 19 A K&I WAS A PRINTER. I WOULD HAVE PROBABLY 20 SUGGESTED THEY BE PAID, YES. 21 Q DO YOU KNOW HOW MUCH WAS PAID BASED ON YOUR 22 RECOMMENDATION? 23 A I DO NOT. 24 Q DID YOU DISCUSS GENERAL PUBLISHING PAID? 25 A GENERAL PUBLISHING. I DON'T RECALL WHO GENERAL 26 PUBLISHING WAS. IT COULD BE A VENDOR, SOMEONE WE BOUGHT 27 BOOKS FROM THAT WE OWED MONEY TO. 28 Q OKAY. DID YOU SUGGEST THAT ARCATA, A-R-C-A-T-A,
page 304 1 GRAPHICS BE PAID? 2 A THAT WOULD BE LIKELY BECAUSE THEY DID A LOT OF THE 3 PRINTING, YES. 4 Q TODAY, YOU TESTIFIED THAT YOU FIRST HEARD ABOUT 5 FUNDS BEING AVAILABLE FOR THE SWISS BANK DURING 1991, RIGHT? 6 A YES. 7 Q IN FACT, EARLIER IN THE DAY WHEN MR. WAIER ASKED 8 ABOUT IT, YOU SAID 1991, I FIRST BECAME AWARE THAT FUNDS 9 WERE COMING FROM BANQUE CONTRADE; IS THAT RIGHT? 10 A AS CLOSE AS I CAN RECALL TO THE TIME, IT WAS 1991. 11 Q AND THAT MR. WAIER ASKED YOU — SAID TO YOU, IN 12 FACT, YOU KNOW — YOU KNEW IN 1990 WILLIS CARTO HAD ACCESS 13 TO THE FUNDS DISTRIBUTION. YOU CORRECTED HIM AND SAID NO, 14 IT WAS 1991. IS THAT CORRECT? 15 MR. BEUGELMANS: OBJECTION. ASKED AND ANSWERED. WE 16 ARE GOING OVER THE SAME TERRITORY. 17 THE COURT: I DON'T NEED WHAT HE TESTIFIED TO BEFORE. 18 JUST ASK SOME QUESTIONS. 19 MR. LANE: JUST TAKE ONE WORD. CAN WE GET THE ONE 20 WORD? 21 THE WITNESS: I SAID 1990 OR 1991. 22 23 BY MR. LANE: 24 Q WHICH IS IT, DO YOU KNOW? 25 A I DIDN'T. 26 Q NOW, YOU DON'T KNOW WHICH IT WAS? 27 A IT SEEMS MORE LIKELY TO BE 1991. 28 Q DO YOU RECALL PREPARING AND SIGNING A 51-PAGE
page305 1 DECLARATION IN THE CASE — IN SUPERIOR COURT NUMBER 720973, 2 ORANGE COUNTY LAWSUIT BROUGHT BY WILLIS AND ELISABETH CARTO 3 AGAINST THE LEGION? 4 A THE POLIS COURT — JUDGE POLIS' COURT? 5 Q I BELIEVE SO. I'M SUPPOSED TO ASK THE QUESTIONS. 6 YOU ARE SUPPOSED TO ANSWER THEM. 7 A THEN I CAN ANSWER YES. 8 Q YOU DID. ALL RIGHT. YOU WEREN'T ON A WITNESS 9 STAND WHEN YOU WROTE THE DECLARATION, WERE YOU? 10 A NO. 11 Q YOU HAD TIME TO GO OVER EACH OF THE POINTS OF 12 THAT, DID YOU NOT? 13 A YES. 14 Q AND YOU SWORE TO THE ACCURACY OF EVERY STATEMENT 15 IN THERE, DID YOU NOT? 16 A YES. 17 Q THAT WAS SUBMITTED TO THE COURT, WAS IT NOT? 18 A YES. 19 Q AND THEREAFTER, YOU THEN HAD THAT PRINTED AS THE 20 DOCUMENT AND SENT THROUGHOUT THE UNITED STATES; IS THAT 21 CORRECT? 22 MR. BEUGELMANS: OBJECTION. RELEVANCE, YOUR HONOR. 23 THE COURT: WHAT’s THE RELEVANCE? BIAS AGAINST THE 24 LEGION, IS THAT IT? 25 MR. LANE: I'LL GET TO IT IN A MOMENT. 26 27 BY MR. LANE: 28 Q ISN'T THAT CORRECT?
page306 1 A YES, WE DID PRINT THAT AND SEND IT. 2 Q YOU EDITED DOCUMENTS IN THE PAST? 3 A YES. 4 Q YOU WENT OVER THIS SWORN STATEMENT OF YOURS BEFORE 5 IT WAS SENT OUT WIDELY THROUGHOUT THE UNITED STATES? 6 A NO. 7 Q DIDN'T GO OVER IT? 8 A NO, I WENT OVER IT WHEN I DECLARED IT TO BE TRUE. 9 AND THEN ONCE I DID THAT, I HAD NO NEED — I DON'T BELIEVE 10 I HAD A NEED TO EDIT IT FURTHER. I MAY HAVE EDITED IT FOR 11 SPACE. 12 Q WHO WOULD YOU CONSIDER TO BE THE SENIOR STAFF OF 13 THE LEGION BACK IN 1990? 14 MR. BEUGELMANS: OBJECTION. RELEVANCE, YOUR HONOR. 15 MR. LANE: TIE IT UP IN A MOMENT. 16 THE COURT: IF I NEED ARGUMENT, I WILL ASK FOR IT. 17 OVERRULED. 18 THE WITNESS: I BELIEVE AT THAT TIME, IT WAS MYSELF AND 19 TED O’Keefe. I DON'T THINK MR. WEBER AND MR. RAVEN HAD COME 20 ON BOARD YET. 21 22 BY MR. LANE: 23 Q IN THE DOCUMENT THAT YOU SWORE TO AND SUBMITTED TO 24 THE COURT AND LATER HAD DISTRIBUTED, DID YOU SWEAR, 25MOREOVER, THE FUNDS FROM THE FARREL-EDISON BEQUEST WERE 26 UNDERSTOOD BY LEGION SENIOR STAFF TO HAVE BEEN AVAILABLE AS 27 EARLY AS 1990, THREE YEARS BEFORE THE STAFF MADE ANY MOVE TO 28 INVESTIGATE CARTO?
page 307 1 A COULD BE TRUE. YES. I MEAN, IF I SEE IT IN BLACK 2 AND WHITE, I WOULD ADMIT I COULD HAVE SAID AS EARLY AS '90. 3 Q PAGE 16. 4 MR. MUSSELMAN: COULD WE HAVE A COPY, PLEASE. 5 MR. LANE: EXCUSE ME. IT’s IMPEACHMENT. I DIDN'T KNOW 6 HE WOULD MAKE THE STATEMENT. 7 MR. BEUGELMANS: I OBJECT TO THIS COURSE OF INQUIRY. 8 IT’s NOT IMPEACHMENT. IT’s SIMPLY WHAT THIS DECLARATION 9 STATES IS MR. MARCELLUS REALIZED SOMETIME IN 1994 THAT THE 10 FUNDS WERE PROBABLY AVAILABLE IN 1990. IT DOESN'T IMPEACH 11 ANYTHING HE SAID IN COURT TODAY. THIS IS ALICE IN 12 WONDERLAND. IT’s NOT EVEN IMPEACHMENT. IT’s SO COLLATERAL, 13 IT’s TRYING TO CONFUSE THE COURT. 14 THE COURT: I THINK IT IS IMPEACHMENT. WHEN YOU ARE 15 GOING TO IMPEACH SOMEONE, SHOW THE SIDE THE DOCUMENT. 16 MR. LANE: HE HAS IT. 17 MR. MUSSELMAN: 51-PAGE DOCUMENT, YOUR HONOR. 18 MR. LANE: I ONLY QUOTED ONE SENTENCE AND I TURNED IT 19 TO THAT PAGE. 20 THE COURT: COUNSEL, I DON'T NEED TO HAVE YOU ARGUE 21 WITH THE ATTORNEYS AND RESPOND TO EVERYTHING THEY SAY. 22 DIRECT YOUR COMMENT HERE. IF YOU TWO COULD AGREE, YOU 23 WOULDN'T NEED ME. 24 MR. LANE: RIGHT. 25 THE COURT: CAN WE GO ON? 26 27 BY MR. LANE: 28 Q WHEN YOU SAID IN THAT SWORN STATEMENT THAT SENIOR
page308 1 STAFF KNEW AS EARLY AS 1990 THAT THE FUNDS WERE AVAILABLE 2 FROM SWITZERLAND, YOU WERE REFERRING, WERE YOU NOT, TO 3 YOURSELF, MR. WEBER, AND WHO ELSE? 4 MR. BEUGELMANS: OBJECTION. MISSTATES THE DECLARATION. 5 THAT IS COMPLETELY AN ATTEMPT TO CONFUSE THE WITNESS. 6 UNFAIR, YOUR HONOR. 7 THE COURT: WELL -- 8 MR. BEUGELMANS: THAT’s NOT WHAT THE DECLARATION SAYS. 9 YOU SEE, YOUR HONOR, IF I CAN MAKE AN OFFER OF PROOF, IN 10 APRIL 1993, WHEN THE INVESTIGATION BEGAN BY SENIOR STAFF, 11 THEY DISCOVERED THAT FUNDS WERE PROBABLY AVAILABLE AS EARLY 12 AS 1990. THAT’s WHAT THE GIST OF THE DECLARATION — THAT'S 13 WHAT WAS SUBMITTED TO JUDGE POLIS, YOUR HONOR. THE 14 DECLARATION DOES NOT SAY THAT STAFF KNEW IN 1990 THAT THE 15 FUNDS WERE AVAILABLE. 16 THE COURT: WHATEVER IT SAYS, IT SAYS. AND THE WITNESS 17 CAN EXPLAIN IT. 18 MR. BEUGELMANS: I THINK HE’s CONFUSED THE WITNESS TO 19 WHAT THE CONTENTS ARE. HE DOES NOT HAVE THE DECLARATION IN 20 FRONT OF HIM. HE’s PUTTING THE WORDS IN HIS MOUTH. THAT'S 21 UNFAIR. 22 THE COURT: I DON'T THINK HE'LL PUT MUCH IN 23 MR. MARCELLUS' MOUTH HE DOESN'T WANT TO SAY. 24 25 BY MR. LANE: 26 Q PARAGRAPH 64, PAGE 16 OF YOUR SWORN STATEMENT. 27 (PAUSE) DOES IT SAY “MOREOVER, THE FUNDS FROM THE 28 FARREL-EDISON BEQUEST WERE UNDERSTOOD BY LEGION SENIOR STAFF
page309 1 TO HAVE BEEN AVAILABLE AS EARLY AS 1990, THREE YEARS BEFORE 2 THE STAFF MADE ANY MOVE TO INVESTIGATE CARTO”? DOES IT SAY 3 THAT? 4 A YES. 5 Q AND IS THE GIST OF THAT PARAGRAPH AN EFFORT ON 6 YOUR PART TO SAY, IN ESSENCE, WE KNEW IN 1990 ABOUT THE 7 FUNDS AND YOU CAN'T CHARGE US WITH GREED BECAUSE WE DIDN'T 8 MOVE THEN; WE DIDN'T MOVE UNTIL CARTO DID OTHER BAD THINGS? 9 ISN'T THAT WHAT THAT PARAGRAPH SAYS? 10 A IN A SENSE, YES. BUT ONLY BECAUSE MR. CARTO HAD 11 BEEN ACCUSING US CONSTANTLY IN THE SPOTLIGHT OF GOING AFTER 12 THE MONEY. 13 Q YOUR ANSWER WAS IT WASN'T GREED ON OUR PART 14 BECAUSE WE KNEW ABOUT THE MONEY BEING AVAILABLE IN 1990 AND 15 WE DIDN'T ACT THEN? ISN'T THAT WHAT THE PARAGRAPH SAYS? 16 A YES. 17 Q OKAY. AND THE FOLLOWING PARAGRAPH, DOES THAT 18 INDICATE THAT YOU WERE SUSPICIOUS ABOUT CARTO WAY BACK IN 19 1990? I'LL GIVE IT TO YOU TO READ PARAGRAPH 65. 20 I'LL SHOW IT TO THE ATTORNEYS. 21 MR. BEUGELMANS: THANK YOU. 22 23 BY MR. LANE: 24 Q MR. MARCELLUS, WE JUST READ PARAGRAPH 64; IS THAT 25 RIGHT? 26 A YES. 27 Q NOW I ASK YOU TO LOOK AT PARAGRAPH 65. 28 A OKAY. (PAUSE).
page310 1 I READ 65. 2 Q ALL RIGHT. IS THE GIST OF THAT PARAGRAPH 3 FOLLOWING THE LANGUAGE WE JUST READ THAT YOU WERE SUSPICIOUS 4 OF CARTO. HE WOULDN'T GIVE YOU INFORMATION. YOU WERE 5 SUSPICIOUS WAY BACK THEN? 6 A NO. 7 Q DOESN'T SAY THAT? 8 A NO. 9 Q DOES IT SAYSENIOR STAFF MADE EFFORTS TO 10 ASCERTAIN THE TRUE STATUS OF Carto’s AUTHORITY? 11 A YES. 12 Q THAT YOU MADE EFFORTS TO DETERMINE ACTUAL 13 CORPORATE POLICIES? 14 A YES. 15 Q THAT YOU MADE EFFORTS TO VERIFY Carto’s PET 16 PROJECTS TO SEE IF THEY WERE AUTHORIZED BY THE LEGION BOARD 17 OF DIRECTORS, BUT THESE WERE PROVED IMPOSSIBLE BECAUSE CARTO 18 NEVER PERMITTED THE SENIOR LEGION STAFF MEMBERS TO SEE THE 19 MINUTES OF THE LEGION BOARD MEETINGS? 20 A YES. 21 Q AND WHEN YOU QUESTIONED — WHEN THE SENIOR STAFF 22 QUESTIONED CARTO, HE REFUSED TO REVEAL THE OFFICERS AND 23 DIRECTORS OF THE CORPORATION? 24 A YES. 25 Q SO DOES THAT INDICATE THAT YOU WERE THEN 26 SUSPICIOUS OF HIM? 27 A RELATING TO THE MATTERS AT HAND, YES, BUT NOT 28 REGARDING THE MONEY.
page311 1 Q YOU THOUGHT HE WOULD -- 2 A BUT THAT WAS IN '93, NOT '91 OR 90. 3 Q NOW, WHAT PART, IF ANY, DID YOU PLAY IN DRAFTING 4 THE COMPLAINT IN THIS CASE? 5 MR. MUSSELMAN: OBJECTION. ATTORNEY/CLIENT PRIVILEGE. 6 THE COURT: SUSTAINED. 7 8 BY MR. LANE: 9 Q WERE YOU THE SOURCE OF ANY INFORMATION FOR THE 10 COMPLAINT? 11 MR. MUSSELMAN: ATTORNEY/CLIENT PRIVILEGE, YOUR HONOR. 12 THE COURT: SUSTAINED. 13 14 BY MR. LANE: 15 Q WERE YOU THE PRESIDENT OF THE LEGION WHEN THE 16 COMPLAINT WAS PREPARED? 17 A YES. 18 Q ALL RIGHT. DID YOU HAVE A COPY OF THE COMPLAINT? 19 A I DO NOT. 20 MR. BEUGELMANS: PLAINTIFF WOULD OBJECT TO 21 MR. MARCELLUS BEING QUESTIONED CONCERNING THE COMPLAINT. 22 IT’s AN UNVERIFIED COMPLAINT. 23 THE COURT: WELL, I'LL OVERRULE THE OBJECTION. 24 I THINK WE OUGHT TO BE ABLE TO BE DONE WITH THIS 25 IN HALF AN HOUR. 26 MR. LANE: I WILL BE DONE IN HALF AN HOUR. THIS IS THE 27 LAST AREA. 28
page312 1 BY MR. LANE: 2 Q YOU HAVE THE COMPLAINT IN FRONT OF YOU? 3 A YES. 4 Q WHEN WAS THE FIRST TIME YOU SAW IT? 5 A PROBABLY JUST AFTER IT WAS PREPARED, WHICH WOULD 6 HAVE BEEN SOMETIME IN JULY OF '94. POSSIBLY I MIGHT HAVE 7 SEEN A DRAFT BEFORE THAT. 8 Q ALL RIGHT. YOU SEE IT ON PAGE 1, LIBERTY LOBBY IS 9 THE DEFENDANT? 10 A I SEE LIBERTY LOBBY THERE, YES. 11 Q DO YOU SEE ANOTHER LISTED AS THE — IDENTIFIED AS 12 A CORPORATION; IS THAT CORRECT? 13 A I SEE IDENTIFIED AS A CORPORATION. 14 Q AND IS THERE ONE OTHER CORPORATION AS A DEFENDANT, 15 VIBET, INC.? 16 A YES, I SEE THAT. 17 Q IS THAT THE ONLY OTHER CORPORATION LISTED? 18 MR. MUSSELMAN: OBJECTION. RELEVANCE, HIS 19 INTERPRETATION OF WHAT THE CAPTION OF THE COMPLAINT SAYS. 20 THE COURT: WHATEVER IT SAYS, IT SAYS. I'LL TAKE 21 JUDICIAL NOTICE OF THE COMPLAINT, WHICH IS IN FILE NUMBER 22 ONE OF THE EIGHT VOLUMES. 23 24 BY MR. LANE: 25 Q WOULD YOU TURN TO PAGE 6, PLEASE. DO YOU SEE THE 26 INSERTION ON PAGE 6, LINE 20, COMPLAINT:IN PARTICULAR, ON 27 INFORMATION AND BELIEF, ONE OR MORE OF THE DEFENDANTS HAVE 28 CAUSED THE TRANSFER OF 100 THOUSAND DOLLAR— DOLLAR IT
page313 1 SAYS. I TAKE IT, IT MEANS DOLLARS —OF THE ASSETS TO THE 2 DEFENDANT, LIBERTY LOBBY, FOR NO CONSIDERATION.3 A I SEE THAT. 4 Q DO YOU KNOW WHAT THAT MEANS,CAUSED THE TRANSFER 5 OF 100 THOUSAND DOLLARS OF THE ASSETS TO THE DEFENDANT 6 LIBERTY LOBBY FOR NO CONSIDERATION? 7 MR. MUSSELMAN: OBJECTION. RELEVANCE TO HIS 8 INTERPRETATION. AND CALLS FOR LEGAL CONCLUSION. 9 THE COURT: OVERRULED. 10 11 BY MR. LANE: 12 Q WHAT DOES THAT MEAN? 13 A TO ME, IT MEANS $100,000 OF MONEY OR ASSETS 14 BELONGING TO THE LEGION WERE TRANSFERRED TO LIBERTY LOBBY, 15 AND LIBERTY LOBBY AND LEGION DID NOT RECEIVE ANYTHING IN 16 EQUAL SHARE OR EQUAL VALUE. 17 Q DO YOU KNOW HOW MUCH, IF ANY, SUMS LIBERTY LOBBY 18 PAID TO LAWYERS THROUGHOUT THE WORLD SO THAT THE FARREL 19 ESTATE COULD BE SECURED IN PART? 20 A I DO NOT. 21 Q YOU DON'T KNOW IF THERE WAS ANY CONSIDERATION, DO 22 YOU? 23 MR. MUSSELMAN: CALLS FOR LEGAL CONCLUSION. 24 THE COURT: SUSTAINED. 25 26 BY MR. LANE: 27 Q IF YOU KNEW THAT LIBERTY LOBBY HAD PAID OVER 28 $300,000 TO LAWYERS TO PROSECUTE THE ESTATE, WOULD YOU HAVE
page314 1 STILL HAVE SAID THAT IT WAS — THERE WAS NO CONSIDERATION? 2 MR. MUSSELMAN: CALLS FOR SPECULATION. AND WITHOUT 3 FOUNDATION HE SAID THIS. 4 THE COURT: SUSTAINED. 5 6 BY MR. LANE: 7 Q WOULD YOU HAVE — WOULD YOU HAVE SAID THAT IT'S 8 NOT CORRECT TO PUTNO CONSIDERATION,I, AS PRESIDENT OF 9 THE LEGION, DON'T WANT THAT IN THERE, IF YOU KNEW LIBERTY 10 LOBBY SPENT OVER $300,000? 11 MR. MUSSELMAN: SAME OBJECTION. 12 THE COURT: MAKE THE SAME RULING. THIS IS AN 13 UNVERIFIED COMPLAINT. HE DOESN'T SAY ANYTHING IN THE 14 COMPLAINT. 15 16 BY MR. LANE: 17 Q WHEN YOU READ THIS IN 1994, JULY, I THINK YOU 18 SAID, DID YOU BELIEVE THAT STATEMENT WAS CORRECT AT THAT 19 TIME? 20 MR. MUSSELMAN: OBJECTION. 21 22 BY MR. LANE: 23 Q THAT LIBERTY LOBBY HAD NOT DONE ANYTHING WHICH 24 ENTITLED IT TO RECEIVE $100,000? 25 MR. MUSSELMAN: OBJECTION. RELEVANCE WHAT HE BELIEVED 26 WHEN HE READ THE COMPLAINT. 27 THE COURT: SUSTAINED. 28 MR. LANE: YOUR HONOR, MAY I JUST SUGGEST HE WAS THE
page315 1 PRESIDENT OF THE CORPORATION AT THE TIME. 2 THE COURT: THAT MAY WELL BE TRUE. THIS IS AN 3 UNVERIFIED COMPLAINT. HE DIDN'T SIGN IT. I DON'T REALLY 4 CARE WHAT HE THINKS ABOUT THIS ISSUE, HIS OPINION. 5 6 BY MR. LANE: 7 Q WOULD YOU TURN TO PAGE 9, PLEASE. 8 A OKAY. 9 Q THIS IS THE FIRST CAUSE OF ACTION BEGINNING ON 10 LINE 22 OF THAT PAGE; IS THAT CORRECT? 11 A LINE 22 SAYS FIRST CAUSE OF ACTION. 12 Q IT’s AGAINST ALL DEFENDANTS. DOES IT NOT SAY THAT 13 ON LINE 24? 14 A YES. 15 Q AND THIS IS A CAUSE OF ACTION FOR DAMAGES DUE TO 16 CIVIL CONSPIRACY TO DEFRAUD; IS THAT CORRECT? 17 MR. MUSSELMAN: SAME OBJECTION. RECITING THE CONTENTS 18 OF THE COMPLAINT. 19 THE COURT: SUSTAINED. I KNOW WHAT THE COMPLAINT 20 SAYS. I READ IT. YOU DON'T HAVE TO ASK HIM WHAT IT SAYS. I 21 DON'T CARE WHAT THEY THINK. 22 23 BY MR. LANE: 24 Q WHAT DID LIBERTY LOBBY DO TO PARTICIPATE IN THE 25 CIVIL CONSPIRACY TO DEFRAUD? 26 MR. BEUGELMANS: OBJECTION TO THE FORM OF THE QUESTION. 27 THE COURT: OVERRULED. IT WILL CALL FOR A NARRATIVE 28 QUESTION. AND YOU ASKED A GENERAL QUESTION. HE CAN GO ON
page316 1 IN A GENERAL WAY. 2 3 BY MR. LANE: 4 Q WHAT DID LIBERTY LOBBY DO TO ENGAGE IN A CIVIL 5 CONSPIRACY TO DEFRAUD? 6 A WELL, I BELIEVE THAT MR. CARTO ARRANGED THE 7 LEGION’s FUNDS TO BE TRANSFERRED TO HIS ORGANIZATION, 8 LIBERTY LOBBY. 9 Q AND WHAT DID LIBERTY LOBBY DO? 10 A SPENT IT, I'M SURE. 11 Q DO YOU KNOW THAT? 12 A I DON'T KNOW THAT FOR A FACT. 13 Q WHAT DID LIBERTY LOBBY DO WHICH LEADS YOU TO 14 CONCLUDE THAT THE SECOND CAUSE OF ACTION AGAINST ALL 15 DEFENDANTS, INCLUDING LIBERTY LOBBY, IS FOUND THAT THEY WERE 16 INVOLVED IN CONVERSION? 17 THE COURT: I THINK YOU OUGHT TO ASK IF HE KNOWS WHAT 18 CONVERSION IS. IT’s A LEGAL WORD OF ART, REALLY. 19 20 BY MR. LANE: 21 Q DO YOU KNOW WHAT CONVERSION IS? 22 A I CAN STAKE A STAB AT IT. 23 Q THAT’s NOT THE BEST WAY. DO YOU KNOW WHAT IT IS? 24 A WELL, I HAVEN'T BEEN TRAINED IN THE LAW. I DON'T 25 KNOW THE LEGAL DEFINITION. 26 Q WHAT IS IT THAT LIBERTY LOBBY DID — TO YOUR 27 KNOWLEDGE, WHAT DID LIBERTY LOBBY DO TO BRING IT INTO THE 28 COURT AS A DEFENDANT UNDER ANY ALLEGATION OF THE COMPLAINT?
page317 1 A WELL, THERE WAS EVIDENCE THAT WE KNEW THAT 2 MR. CARTO HAD BEEN INSTRUMENTAL IN WORKING WITH THESE 3 FARREL — WITH THE FARREL GIFT. HE WAS INVOLVED IN THAT. 4 WE KNEW HE WAS THE TREASURER OF LIBERTY LOBBY. WE SAW 5 EVIDENCE THAT ASSETS OF THE LEGION AND THE FORM OF ITS FUNDS 6 IN THE SWISS ACCOUNTS WERE BEING TRANSFERRED OR CONVERTED TO 7 LIBERTY LOBBY’s USE. AND THAT’s YOUR ANSWER. 8 Q WHAT FUNDS DID YOU SEE -- 9 A WE SAW AN -- 10 Q — EVIDENCE OF? 11 A — ADVISEMENT FROM THE SWISS BANK THAT $100,000 12 HAD BEEN TRANSFERRED. 13 Q IS THAT YOUR TOTAL KNOWLEDGE OF WHAT LIBERTY LOBBY 14 DID, THAT IT RECEIVED $100,000? 15 MR. MUSSELMAN: OBJECTION. VAGUE WHAT LIBERTY LOBBY 16 DID. 17 18 BY MR. LANE: 19 Q TO BRING IT INTO THE COURTROOM? 20 THE COURT: OVERRULED. 21 THE WITNESS: I DON'T RECALL HAVING ANY ADDITIONAL 22 EVIDENCE OF ANY SUBSEQUENT OR PREVIOUS CONVERSIONS THAN THAT 23 ONE. 24 25 BY MR. LANE: 26 Q DO YOU KNOW WHO PAID THE BILLS FOR THE LAWYERS TO 27 PROSECUTE THE ESTATE ON BEHALF OF THE LEGION OR ANYONE 28 ASSOCIATED WITH THE LEGION?
page318 1 MR. MUSSELMAN: OBJECTION. WITHOUT FOUNDATION THAT 2 ANYONE PROSECUTED THE ESTATE. 3 THE COURT: ALSO ASKED AND ANSWERED. SUSTAIN THE 4 OBJECTION. 5 MR. LANE: NO FURTHER QUESTIONS. 6 THE COURT: REDIRECT. 7 MR. MUSSELMAN: YES. 8 9 REDIRECT EXAMINATION 10 BY MR. MUSSELMAN: 11 Q LOOK AT EXHIBIT 89, 21 AUGUST 1986 AFFIDAVIT. 12 MR. WAIER: EXCUSE ME, I DON'T HAVE AN 89. 13 MR. BEUGELMANS: YES, YOU DO. 14 MR. MUSSELMAN: I GAVE IT TO YOU. 15 16 BY MR. MUSSELMAN: 17 Q TELL ME IF YOU HAVE SEEN IT BEFORE. 18 A YES, I HAVE. 19 Q WHEN WAS THAT? 20 A IT WAS IN AUGUST OF '86 WHEN I PREPARED IT. 21 THE COURT: LET ME INTERRUPT A MOMENT SO WE GET AN 22 IDENTIFICATION OF IT FOR THE BENEFIT OF THE CLERK. IT SAYS 23 AFFIDAVIT, 21 AUGUST 1986, AND SIGNED BY THOMAS J. 24 MARCELLUS. I'M NOT SAYING HE SIGNED IT. THAT’s WHAT THE 25 DOCUMENT IS. 26 MR. WAIER: YOUR HONOR, I MIGHT ADD ON THIS BASIS, I'LL 27 OBJECT. THIS WAS NEVER PRODUCED IN DISCOVERY IN THIS 28 MATTER. IT ALSO WAS NOT PRODUCED AS PART OF THE EXHIBITS IN
page319 1 OUR BOOK. THE SAME OBJECTIONS THAT THEY HAVE BEEN RAISING, 2 WE'RE RECEIVING THIS FOR THE FIRST TIME. I DON'T BELIEVE 3 THERE’s ANY THEORY ABOUT IMPEACHING THEIR WITNESS UNLESS 4 THEY WANT TO CALL MR. MARCELLUS AS A HOSTILE WITNESS. THIS 5 IS OUTSIDE THE SCOPE, IN ANY EVENT. 6 MR. MUSSELMAN: CAN I BE HEARD? I'M NOT IMPEACHING 7 HIM. THEY OPENED THE DOOR TO WHAT THEY KNEW, WHEN HE KNEW 8 IT ABOUT THE FARREL ESTATE AND MISS FARREL’s INTENTION. 9 MR. WAIER: WELL, YOUR HONOR, THE ONLY BASIS OF THIS 10 DOCUMENT — ONE, THEY NEVER PROVIDED IT TO US. WE ASKED 11 FOR EVERY DOCUMENT. THIS WAS NEVER PROVIDED. MORE 12 IMPORTANTLY, THE ONLY TIME THAT THIS WOULD COME INTO PLAY 13 IS — IS IF HE NEEDED TO HAVE HIS RECOLLECTION REFRESHED. 14 THERE’s BEEN NO FOUNDATION FOR THIS IN CONNECTION WITH 15 HAVING THE RECOLLECTION REFRESHED. THERE’s NO RELEVANCY TO 16 THE DOCUMENT. 17 THE COURT: I'LL SUSTAIN THE OBJECTION. YOU CAN USE IT 18 TO REFRESH HIS RECOLLECTION. I HAVE READ IT, FOR WHATEVER 19 THAT’s WORTH. 20 21 BY MR. MUSSELMAN: 22 Q DID YOU HAVE ANY DISCUSSIONS WITH MR. CARTO IN 23 1986 ABOUT THE NEED FOR YOU TO PREPARE ANY LEGAL DOCUMENTS 24 FOR THE DISPUTE IN EUROPE? 25 A YES, I MET WITH HIM AND HIS WIFE AND MR. HOOPER IN 26 1986. 27 Q WHAT DID HE TELL YOU ABOUT THE NEED FOR A LEGAL 28 DOCUMENT?
page320 1 A MR. HOOPER AND MR. CARTO TOLD ME THAT THE 2 LITIGATION PROCEEDING IN THE BRITISH HIGH COURT, IT WAS 3 NECESSARY — BECAUSE I HAD HAD AN INVOLVEMENT WITH 4 MISS FARREL AND I HAD BEEN IN TOUCH WITH HER AND HAVE 5 CORRESPONDED WITH HER REGULARLY AND SHE HAD COMMUNICATED HER 6 INTENTIONS WITH REGARD TO THE LEGION, THAT IT WOULD BE 7 NECESSARY AND HELPFUL FOR ME TO PREPARE AN AFFIDAVIT STATING 8 THOSE FACTS TO HELP THE LEGION OBTAIN ITS FUNDS IN — WIN 9 THE CASE IN THE BRITISH COURT. 10 Q DID THEY TELL YOU WHETHER YOU SHOULD PUT ANYTHING 11 IN THE AFFIDAVIT ABOUT HER INTENTION TO LEAVE THE MONEY TO 12 THE LEGION? 13 MR. WAIER: OBJECTION. LEADING. 14 THE COURT: OVERRULED. 15 THE WITNESS: IT WAS MR. HOOPER AND MR. CARTO SPELLED 16 OUT WHAT POINTS I SHOULD MAKE IN -- 17 MR. WAIER: I'M GOING TO OBJECT WITH RESPECT TO WHAT 18 MR. HOOPER SAYS. THAT IS HEARSAY. MR. CARTO IS A PARTY; 19 MR. HOOPER IS NOT. 20 THE COURT: SUSTAIN THE OBJECTION TO MR. HOOPER. 21 22 BY MR. MUSSELMAN: 23 Q WAS MR. HOOPER AND MR. CARTO PRESENT AT THE SAME 24 MOMENT WITH YOU? 25 A YES. 26 MR. MUSSELMAN: I THINK THAT WOULD MAKE MR. HOOPER'S 27 STATEMENTS TO MR. CARTO ADMISSIBLE TO THE INTENT. 28 THE COURT: IT WAS AN ADOPTIVE ADMISSION.
page321 1 BY MR. MUSSELMAN: 2 Q WHAT DID THEY TELL YOU? 3 A I WAS — THEY LAID OUT THE BASIC POINTS THEY 4 WANTED ME TO MAKE IN AN AFFIDAVIT. AND I WAS ASKING THEM 5 QUESTIONS. MR. CARTO ASKED ME SOME QUESTIONS ABOUT WHAT I 6 RECALLED FROM THE MEETING WITH HER. MR. HOOPER ASKED SOME 7 QUESTIONS. AND AFTER I RESPONDED, THEY — THEY THEN TOLD 8 ME WHAT POINTS WOULD BE REQUIRED AND WHAT POINTS I WOULD 9 NEED TO MAKE IN THE AFFIDAVIT. AND SINCE ALL THE POINTS 10 THEY WANTED ME TO MAKE WAS SIMPLY STATING THE FACTS AS I 11 RECALL THEM, I AGREED. I WAS WILLING TO DO IT. 12 Q CAN YOU REMEMBER WHAT THEY TOLD YOU TO INCLUDE, 13 WITHOUT LOOKING AT EXHIBIT 89? 14 A YES. I THINK THAT THE ESSENCE IS THAT THEY WANTED 15 ME TO ESTABLISH A RELATIONSHIP, SHOW THE COURT, THE BRITISH 16 COURT, I HAD A RELATIONSHIP WITH MISS FARREL, THAT WE HAD 17 CORRESPONDED, THAT SHE HAD ALWAYS EXPRESSED THE INTENTION TO 18 KEEP SUPPORTING THE LEGION. 19 MR. WAIER: I'M GOING TO OBJECT WITH RESPECT TO THIS 20 TESTIMONY. MOVE TO STRIKE. IT’s CALLING FOR HEARSAY WHAT 21 MISS FARREL-EDISON SAID TO MR. MARCELLUS. 22 THE COURT: OVERRULED. IT’s NOT FOR THE TRUTH OF THE 23 MATTER. IT’s SHOWING WHAT IS IN THE MIND WHEN HE MAKES AN 24 AFFIDAVIT, WHAT IS IN MR. Carto’s MIND. OVERRULED. 25 THE WITNESS: WHERE WAS I? IT WAS SUGGESTED THAT I 26 INCLUDE IN THE AFFIDAVIT THE NATURE OF THE CORRESPONDENCE I 27 HAD WITH MISS FARREL, THE NATURE OF HER — THE GIFT SHE HAD 28 MADE TO THE LEGION DURING THE TIME THAT I WAS AT THE LEGION,
page322 1 THAT I ALSO INCLUDE IN THE STATEMENT WHAT SHE TOLD ME WHEN I 2 MET HER ABOUT MAKING FUTURE SUBSTANTIAL GIFTS TO THE 3 LEGION. IT ONLY CONCERNED THE LEGION. SO THESE ARE THE 4 MAIN POINTS THAT I WANTED TO MAKE IN MY LETTER TO SHOW THE 5 COURT THAT IN FACT MISS FARREL INTENDED FOR THE LEGION TO 6 BENEFIT SUBSTANTIALLY FROM HER GIFT. 7 8 BY MR. MUSSELMAN: 9 Q DID YOU PREPARE A LETTER OR SOME OTHER DOCUMENT? 10 A I PREPARED — I MADE OUT — I TYPED AN AFFIDAVIT 11 AND THEN SIGNED IT. I TITLED ITAFFIDAVITAND I TYPED OUT 12 THE FACTS AS I RECALLED THEM, AND THEN I SIGNED IT AT THE 13 BOTTOM. 14 Q WHO DID YOU GIVE THE ORIGINAL TO? 15 A I GAVE IT TO — EXPRESSED IT TO MR. AND 16 MRS. CARTO AT THEIR REQUEST. 17 Q COULD YOU LOOK AT EXHIBIT 54, PLEASE. 18 MR. WAIER: YOUR HONOR, SO THE COURT IS AWARE, I KNOW 19 YOU READ THIS, SUPPOSED MARKED FOR IDENTIFICATION 20 EXHIBIT 86. IT’s NOT AN AFFIDAVIT. IT’s NOT SIGNED UNDER 21 PENALTY OF PERJURY. THERE’s NOTHING IN HERE THAT INDICATES 22 AN AFFIDAVIT OTHER THAN THE NOMENCLATURE AT THE TOP. 23 THE COURT: I BELIEVE IT WAS 89. 24 MR. WAIER: IF IT’s 89, I'M SORRY. YEAH, 89. 25 THE COURT: AND I DID NOT READ 89. I LOOKED AT THE 26 TOP. IT SAID AFFIDAVIT. AND I LOOKED AT THE BOTTOM. I 27 HAVE NOT READ IT. DON'T TRY TO PRESUME I DO SOMETHING. 28 MR. WAIER: I THOUGHT YOU SAID YOU READ IT.
page323 1 THE COURT: MAYBE I DID. IF I DID, I'M SORRY. I SAID 2 I READ THE TOP AND THE DATE. AND I HAVEN'T READ THE TEXT AT 3 ALL. 4 MR. WAIER: THANK YOU. 5 6 BY MR. MUSSELMAN: 7 Q EARLIER, YOU WERE BEING QUESTIONED BY DEFENSE 8 COUNSEL AND THEY ASKED YOU WHETHER YOU HAD A CONVERSATION 9 WITH MRS. CARTO WHERE SHE TOLD YOU ABOUT VIBET. AND YOU 10 STATED THAT YOU DIDN'T KNOW WHAT IT WAS, AND YOU MIGHT WANT 11 TO LOOK AT A MEMO THAT YOU WROTE. IS THIS THAT MEMO? 12 A YES. 13 Q THIS MORNING OR EARLIER, WITHOUT LOOKING AT THE 14 MEMO, YOU DISCUSSED SHE MIGHT HAVE TOLD YOU AS EARLY AS 15 1991. DOES THIS EXHIBIT 54 REFRESH YOUR RECOLLECTION ABOUT 16 WHEN SHE TOLD YOU? 17 A YES. THIS MAY BE THE FIRST TIME I HEARD ABOUT 18 VIBET, JULY 1993. 19 Q YOU RECALL TELLING YOU ABOUT IT BEFORE THAT -- 20 WITHDRAW THE QUESTION. 21 AT WHAT POINT DID YOU BECOME A DIRECTOR ON THE 22 BOARD OF DIRECTORS, AS OPPOSED TO A MANAGER DIRECTOR OF THE 23 LEGION? 24 A BY SEPTEMBER 1993. 25 Q AND PRIOR TO BECOMING A DIRECTOR, DID YOU EVER 26 FEEL YOU HAD THE AUTHORITY TO HIRE ATTORNEYS AND FILE 27 LAWSUITS FOR THE LEGION? 28 MR. WAIER: OBJECTION. RELEVANCY. LACKS FOUNDATION.
page324 1 THE COURT: OVERRULED. 2 THE WITNESS: NO. 3 4 BY MR. MUSSELMAN: 5 Q WHAT WAS YOUR UNDERSTANDING PRIOR TO YOU BECOMING 6 A DIRECTOR ABOUT WHO HAD THAT TYPE OF POWER? 7 A THAT WOULD BE VESTED IN — I FIGURED THAT WOULD 8 BE VESTED IN THE BOARD. THE BOARD WOULD HAVE THAT 9 AUTHORITY. 10 Q AND PRIOR TO YOUR BECOMING A MEMBER OF THE BOARD 11 OF DIRECTORS, WHO DID YOU REPORT TO THAT YOU UNDERSTAND HAD 12 AUTHORITY TO SPEAK TO YOU ON BEHALF OF THE BOARD? 13 A MR. CARTO. 14 Q WAS IT YOUR UNDERSTANDING HE WAS REPORTING TO SOME 15 OTHER GROUP OF PERSONS? 16 A YES. 17 Q WHAT GROUP? 18 A THE BOARD OF DIRECTORS OF THE LEGION. 19 Q COULD YOU LOOK AT EXHIBIT 46, PLEASE, JUNE 5, 1991 20 LETTER. 21 A YES. 22 Q DID YOU SEE THE COPY OF THIS LETTER BEFORE YOU 23 BECAME A MEMBER OF THE BOARD OF DIRECTORS? 24 MR. WAIER: WHICH LETTER WAS THIS? 25 MR. MUSSELMAN: 46. 26 THE WITNESS: NO. NO. 27 28
page325 1 BY MR. MUSSELMAN: 2 Q WHEN DID YOU FIRST SEE A COPY? 3 A I BELIEVE I FIRST SAW THIS PROBABLY IN LATE 1993. 4 Q EARLIER, YOU WERE ASKED IN EXHIBIT 173, UCC, WHAT 5 LOOKS LIKE A UCC FORM -- 6 A YES. 7 Q DID YOU EVER HAVE ANY DISCUSSIONS WITH MR. CARTO 8 WHERE HE TOLD YOU WHAT THE PURPOSE OF IT WAS? 9 A YES. 10 Q WHAT WAS THAT? 11 A THE PURPOSE WAS TO PUT THE LEGION’s ASSETS WHERE 12 THEY COULD NOT BE OR NOT EASILY BE TAKEN IN THE EVENT OF AN 13 ADVERSE JUDGMENT. 14 Q AND DO YOU HAVE AN UNDERSTANDING ABOUT WHETHER 15 THERE WAS A DEBT TO THE H.E.F.? 16 MR. WAIER: OBJECTION. OUTSIDE THE SCOPE. LACKS 17 FOUNDATION. RELEVANCY. ASKED AND ANSWERED. 18 THE COURT: I THINK IT’s ASKED. SUSTAINED. 19 20 BY MR. MUSSELMAN: 21 Q COULD YOU LOOK AT THE EXHIBIT — I THINK IT HAS A 22 DATE OF JULY '91. 173. IT MIGHT BE LOOSE. 23 A JULY — TELL ME ABOUT IT. 24 Q I THINK IT’s THE UCC FORM. 25 A OKAY. 26 Q IN ANY CASE -- 27 A I THINK WE HAVE IT. 28 Q DID YOU KNOW AS OF JULY 1991 THAT THE FARREL
page326 1 ESTATE LITIGATION HAD SETTLED? 2 A NO, I DIDN'T KNOW IT HAD SETTLED. I DIDN'T KNOW. 3 I HAVE NOT SEEN ANY DOCUMENTS ON IT. THERE WERE 4 REPRESENTATION FROM THE CARTOS THAT SOME MONIES HAD BEEN 5 RELEASED AND THAT IT WOULD BE SETTLED. BUT I DON'T THINK I 6 HAD THE UNDERSTANDING AT THAT TIME THAT IT WAS A DONE DEAL, 7 IT WAS ALL SETTLED. MONEY WAS STILL TIED UP IN PLACES, AND 8 I DIDN'T KNOW WHAT IT MEANT. 9 Q THERE WAS SOME TESTIMONY FROM YOU EARLIER ABOUT 10 THE F.D.F.A. RECEIVING MONEY FROM THE LEGION. DID MR. CARTO 11 EVER TELL YOU HOW F.D.F.A. SPENT THAT MONEY? 12 A NO. 13 Q AS OF AUGUST 1993, DID YOU HAVE AN UNDERSTANDING 14 WHETHER THERE WERE DIRECTORS OF THE LEGION OTHER THAN 15 MR. AND MRS. FURR? 16 A YES. 17 Q WAS IT YOUR UNDERSTANDING THAT THERE WERE OTHER 18 DIRECTORS? 19 A YES. 20 Q BETWEEN THE TIME THAT YOU FIRST STARTED THERE AND 21 AUGUST OF '93, WAS THERE A TIME THAT YOU UNDERSTOOD THERE 22 WAS NO DIRECTORS OTHER THAN THEM? 23 MR. WAIER: OBJECTION. LACKS FOUNDATION. 24 THE COURT: OVERRULED. 25 MR. WAIER: YOUR HONOR, HE STATED AUGUST, WHEN HE 26 STARTED THERE IN AUGUST 1993. I DON'T BELIEVE THAT WAS HIS 27 PRIOR TESTIMONY. 28 MR. MUSSELMAN: THE ENDING DATE OF AUGUST '93. I CAN
page327 1 REASK THE QUESTION. 2 3 BY MR. MUSSELMAN: 4 Q FROM THE TIME YOU STARTED THROUGH AUGUST '93, WAS 5 THERE A POINT IN TIME THAT YOU THOUGHT THAT THE FURRS WERE 6 THE ONLY DIRECTORS AND THERE WERE NO OTHER DIRECTORS? 7 A NO. 8 Q EITHER OF THE FURRS EVER TELL YOU THERE WERE NO 9 OTHER DIRECTORS IN THAT TIME FRAME? 10 A NO. 11 Q DID MR. CARTO? 12 A NO. 13 Q EARLIER, YOU WERE INTERROGATED IN REFERENCE TO 14 SOME DEPOSITION TESTIMONY, VOLUME 3, PAGE 85, LINES 18 15 ET SEQ. WHERE THERE WAS A QUOTE THAT SAID, QUOTE,IF WE HAD 16 WANTED TO GO AFTER THE MONEY.DO YOU RECALL THAT 17 QUESTIONING? 18 A YES. 19 Q DO YOU RECALL WHAT YOU MEANT WHEN YOU SAIDIF WE 20 HAD WANTED TO GO AFTER THE MONEY? 21 A WELL -- 22 MR. WAIER: OBJECTION. ASKED AND ANSWERED. 23 THE COURT: OVERRULED. 24 THE WITNESS: YES. AT THE TIME, THERE WERE, I THINK, 25 QUESTIONS IN THAT DEPOSITION, PREVIOUS QUESTIONS IN THAT 26 DEPOSITION THAT IMPLIED THAT WE DID IT TO GRAB THE MONEY, 27 THAT WE TRIED TO TERMINATE MR. Carto’s RELATIONSHIP WITH THE 28 LEGION TO GET THE MONEY. AND MR. CARTO HAD BEEN ON A LONG
page328 1 CAMPAIGN IN HIS NEWSPAPER ACCUSING US OF BEING MONEYGRUBBERS 2 AND TRYING TO STEAL THE MONEY AND SO ON, SO FORTH. I WANTED 3 TO SAY THAT TO INDICATE THAT IF WE HAD ONLY BEEN INTERESTED 4 IN THE MONEY, WE WOULD HAVE PROBABLY BEEN INTERESTED LONG 5 BEFORE THE SPRING OF 1993. 6 7 BY MR. MUSSELMAN: 8 Q DO YOU RECALL THERE WAS SOME DISCUSSION ABOUT 9 CONVERSATIONS YOU HAD WITH MR. HULSY ABOUT DEALING WITH 10 LEGION CREDITORS, DEALING WITH LEGION ASSETS DUE TO THE 11 EXISTENCE OF LEGION CREDITORS. DO YOU RECALL THAT? 12 A YES. 13 Q DID MR. HULSY EVER TELL YOU THAT IT WOULD BE OKAY 14 IF THE LEGION TRANSFERRED ALL THE FARREL ASSETS TO SOME 15 OTHER PARTY? 16 MR. WAIER: OBJECTION. OBJECTION. CALLS FOR HEARSAY. 17 CALLED FOR POTENTIAL ATTORNEY/CLIENT PRIVILEGED 18 COMMUNICATION. IT CALLS FOR WHAT MR. HULSY SAID. 19 THE COURT: YES. SUSTAIN IT AS TO WHAT MR. HULSY MIGHT 20 HAVE SAID. I DON'T THINK YOU CAN — THE ATTORNEY/CLIENT 21 PRIVILEGE APPLIES HERE. 22 MR. WAIER: WELL, HE CAN'T WAIVE IT BECAUSE HE’s NOT 23 WITH THE CORPORATION ANY LONGER. THAT’s THE ONLY REASON WHY 24 I RAISED IT. 25 THE COURT: ALL RIGHT. 26 MR. BEUGELMANS: WE DO HAVE A CORPORATE OFFICER IN 27 COURT. WE CAN WAIVE IT IF THAT’s NECESSARY. 28
page329 1 BY MR. MUSSELMAN: 2 Q PRIOR TO AUGUST 1993, DID MR. CARTO EVER TELL YOU 3 THAT HE WAS CAUSING THE LEGION TO TRANSFER THE FARREL ASSETS 4 TO SOMEONE OTHER THAN THE LEGION? 5 MR. WAIER: OBJECT AS LEADING. 6 THE COURT: I THINK IT’s ASKED AND ANSWERED ALSO. I 7 THINK WE HAVE GONE OVER THIS. 8 9 BY MR. MUSSELMAN: 10 Q YOU WERE INTERROGATED IN REFERENCE TO LITIGATION 11 CONCERNING H.E.F. YOU KNOW WHAT THE OUTCOME OF THE H.E.F. 12 LITIGATION WAS? 13 A YES. 14 Q WHAT WAS THAT? 15 A THE LEGION PREVAILED IN BOTH ACTIONS, BUT I 16 BELIEVE THAT ONE OF THE ACTIONS WAS APPEALED AND HAS GONE 17 BACK TO THE ORIGINAL COURT FOR SOME CORRECTION OR SOME 18 RETRYING OF SOME ISSUE. 19 YOU JUMPED UP TOO SOON. 20 Q LOOK AT EXHIBIT 3. 21 A OKAY. 22 Q TURN TO THE LAST PAGE. 23 A YES. 24 Q DO YOU RECOGNIZE ANY OF THE SIGNATURES? 25 A I RECOGNIZE TWO OF THEM. 26 Q WHICH TWO? 27 A WILLIS CARTO AND LAVONNE FURR. 28 Q AND IN TERMS OF ORDER FROM TOP TO BOTTOM DOWN THE
page330 1 PAGE, WHICH IS HIS? 2 A LAVONNE FURR’s COME FIRST, AND ANOTHER SIGNATURE, 3 LOOKS LIKE BRUCE HOLMAN, I DON'T RECOGNIZE HIS, AND THERE'S 4 WILLIS Carto’s ON THE BOTTOM. 5 Q BEFORE YOU LEFT THE LEGION, DID YOU HAVE AN 6 UNDERSTANDING ABOUT WHETHER OR NOT EXHIBIT 3 WAS A VALID 7 BYLAWS OF THE LEGION? 8 MR. WAIER: OBJECTION. CALLS FOR LEGAL CONCLUSION. 9 LACKS FOUNDATION. 10 THE COURT: OVERRULED. 11 THE WITNESS: I DON'T THINK I EVER SAW THESE BYLAWS 12 PREVIOUS TO 1993. 13 14 BY MR. MUSSELMAN: 15 Q HAVE YOU REPORTED TO THE TAXING AUTHORITIES ALL 16 THE INCOME THAT YOU RECEIVED FROM THE LEGION? 17 A YES. 18 Q AND DID THAT REPORTING INCLUDE PAYMENTS MADE ON 19 YOUR BEHALF TO F.S.O.? 20 A YES. 21 MR. MUSSELMAN: ONE MOMENT, YOUR HONOR. 22 23 BY MR. MUSSELMAN: 24 Q PRIOR TO THE FURRS' DEPARTURE IN THE FALL OF 1993, 25 DID YOU BELIEVE THAT THE ACTIVITY THAT YOU UNDERTOOK WAS 26 AUTHORIZED WITHIN THE SCOPE OF YOUR POWERS? 27 MR. WAIER: OBJECTION. LACKS FOUNDATION. CALLS FOR 28 LEGAL CONCLUSION. ASKED AND ANSWERED. RELEVANCY.
page331 1 THE COURT: JUST TOO GENERAL. SUSTAIN IT ON THAT. 2 MR. MUSSELMAN: NO FURTHER QUESTIONS. 3 THE COURT: ANY RECROSS? 4 MR. WAIER: YES, BRIEFLY. 5 THE WITNESS: IF IT’s BRIEF, FINE; OTHERWISE, I HAVE TO 6 REALLY GO TO THE BATHROOM. 7 THE COURT: NOTHING HAS BEEN BRIEF AROUND HERE. 8 THE WITNESS: I CAN RUN AND BE BACK IN 5 MINUTES. 9 MR. WAIER: IT’s AN OXYMORON WHEN THE ATTORNEY SAYS IT 10 WILL BE BRIEF. 11 THE WITNESS: I LEARNED THAT THE HARD WAY. 12 THE COURT: SEE YOU IN 10 MINUTES. 13 14 (PROCEEDINGS RECESSED.) 15 16 MR. WAIER: MAY I PROCEED? 17 THE COURT: YES, SIR. 18 19 RECROSS EXAMINATION 20 BY MR. WAIER: 21 Q MR. MARCELLUS, I HAVE A COUPLE OF QUESTIONS FOR 22 YOU ON RECROSS. FROM THE TIME THAT YOU RETURNED TO THE 23 LEGION IN 1987 UNTIL MID 1993, YOU KNEW WHO THE DIRECTORS 24 WERE FOR THE LEGION BECAUSE YOU FILED WITH THE SECRETARY OF 25 STATE THE STATEMENT WITHIN CALIFORNIA THAT DISCLOSED THAT 26 INFORMATION; ISN'T THAT TRUE? 27 MR. MUSSELMAN: ASKED AND ANSWERED. 28 THE COURT: SUSTAINED.
page332 1 BY MR. WAIER: 2 Q TAKE A LOOK AT EXHIBIT 46, WHICH IS THE JUNE 5, 3 1991 LETTER FROM WILLIS CARTO COUNSEL POINTED OUT TO YOU, TO 4 WILLIS CARTO FROM BIDDLE AND COMPANY. 5 A YES. 6 Q YOU HAD NO KNOWLEDGE, DO YOU, WHETHER THIS LETTER 7 WAS SHOWN TO LAVONNE FURR AT THIS POINT IN TIME, DO YOU? 8 A NO. 9 MR. BEUGELMANS: AT WHICH TIME? 10 11 BY MR. WAIER: 12 Q 1991. 13 A NO. 14 Q AND YOU HAVE NO KNOWLEDGE AS TO WHETHER THIS 15 LETTER WAS SHOWN TO LEWIS FURR; ISN'T THAT CORRECT? 16 A THAT’s CORRECT. 17 Q IN FACT, IT VERY WELL COULD HAVE BEEN SHOWN TO 18 THEM AT THIS POINT IN TIME; ISN'T THAT RIGHT? 19 A I SUPPOSE. 20 Q YOU UNDERSTOOD THAT WILLIS CARTO TOOK HIS 21 DIRECTION FROM THE BOARD OF DIRECTORS OF THE LEGION AT THIS 22 POINT IN TIME, 1991? 23 A YES. 24 Q IN 1990, HE TOOK THE DIRECTION FROM THE BOARD OF 25 DIRECTORS, TOO; ISN'T THAT CORRECT? 26 A THAT WAS MY UNDERSTANDING. 27 Q SIR, ONE LAST AREA. YOU TESTIFIED THAT YOU HAD A 28 MEETING, AND YOU WERE PRETTY PRECISE IN THE TESTIMONY, THAT
page333 1 YOU HAD A MEETING WHERE YOU SAT DOWN WITH MR. CARTO AND 2 MR. HOOPER, THE ATTORNEY FROM BIDDLE AND COMPANY. DO YOU 3 RECALL? 4 A YES. 5 Q AND AS A RESULT OF THAT CONVERSATION, IT WAS A 6 PRETTY LENGTHY CONVERSATION, WASN'T IT? 7 A NO. 8 Q WELL, IT WAS ENOUGH TO GO OVER TO TELL YOU WHAT 9 THEY WANTED IN THE, QUOTE,AFFIDAVIT; ISN'T THAT CORRECT? 10 A YES. 11 Q AND IN FACT, MR. HOOPER TALKED WITH YOU; IS THAT 12 CORRECT? 13 A I BELIEVE MR. HOOPER, YES. 14 Q ISN'T IT TRUE YOU NEVER HAD A DISCUSSION WITH 15 MR. HOOPER? 16 A NOW I THINK ABOUT IT, IT COULD HAVE BEEN ANOTHER 17 BRITISH ATTORNEY WHO WAS WORKING ON THE CASE. BUT I BELIEVE 18 IT WAS MR. HOOPER. 19 Q SIR, DO YOU RECALL YOUR DEPOSITION WAS TAKEN IN 20 THIS CASE AUGUST 15, 1994? 21 A YES. 22 Q AND YOU WERE UNDER OATH; ISN'T THAT RIGHT? 23 A YES. 24 Q AND EVERYTHING YOU TOLD THEM THERE WAS THE TRUTH? 25 A YES. 26 MR. WAIER: YOUR HONOR, I WOULD LIKE TO READ FROM THE 27 DEPOSITION ON PAGE 95, STARTING ON LINES 16 THROUGH THE END, 28 TO PAGE 96, ALL THAT PAGE, AND THEN THROUGH 97 TO LINES 1
page334 1 THROUGH 11. 2 MR. BEUGELMANS: STARTING WHERE? 3 MR. WAIER: STARTING PAGE 95. 4 MR. BEUGELMANS: LINE? 5 MR. WAIER: 16, THROUGH 97 LINE 11. 6 IN FACT, I WILL RESTRICT THAT TO LINE 96, LINES 1 7 THROUGH 9. 8 9 BY MR. WAIER: 10 Q PAGE 95, LINE 16: 11QUESTION:— THIS WAS TO YOU, MR. MARCELLUS -- 12WERE YOU AWARE HOW MUCH MR. HOOPER WAS PAID?13ANSWER: NO.14QUESTION: DID YOU HAVE ANY DISCUSSIONS WITH 15 MR. HOOPER?16ANSWER: NO.17QUESTION: HAVE YOU EVER HAD ANY DISCUSSIONS WITH 18 MR. HOOPER?19ANSWER: YES, I MET HIM ONCE BRIEFLY.20QUESTION: WHERE WAS THIS?21ANSWER: AT THE L.A. AIRPORT IN 1985 OR '86. I 22 DON'T RECALL THE YEAR.23 PAGE 96, LINE 1: 24QUESTION: WHAT WAS THE OCCASION OF MEETING 25 MR. HOOPER?26 “ANSWER: HE WAS FLYING INTO TOWN, LOS ANGELES, 27 AND I MET HIM AT THE L.A. AIRPORT WITH WILLIS AND ELISABETH 28 CARTO. I THINK HE WAS BETWEEN FLIGHTS AND HE HAD TO RUSH.
page335 1 AND I BASICALLY SHOOK HANDS WITH HIM AND THAT WAS --” 2QUESTION: NO CONVERSATION WAS INDULGED IN?3ANSWER: NOT THAT I CAN RECALL.4QUESTION: DO YOU HAPPEN TO KNOW WHO HIRED 5 MR. HOOPER?6ANSWER: NO.7 MR. WAIER: NOTHING FURTHER OF THIS WITNESS. 8 THE COURT: MR. LANE, ANY QUESTIONS? 9 MR. LANE: NO THANK YOU, YOUR HONOR. 10 THE COURT: THANK YOU FOR YOUR TESTIMONY. THERE’s BEEN 11 A MOTION TO EXCLUDE WITNESSES, MR. MARCELLUS, I SHOULD -- 12 HE CAN STAY IF HE’s NOT GOING TO BE A WITNESS. 13 MR. WAIER: WE ASK THAT HE BE ORDERED BACK. WE INTEND 14 TO PRESENT HIM IN A SMALL AREA IN OUR CASE IN CHIEF IF IT 15 GOES THAT FAR. 16 THE COURT: WHY DON'T WE DO THAT RIGHT NOW. SAVE HIM A 17 TRIP BACK, UNLESS HE’s GOING TO BE HERE ANYWAY. 18 THE WITNESS: NO, I LIVE IN ORANGE COUNTY. IT’s A BIT 19 OF A TRIP. I'M SELF-EMPLOYED. I HAVE TO WORK. 20 MR. WAIER: WE CAN'T. WE HAVE TO ESTABLISH FURTHER 21 FACTS, PART OF THE OBJECTIONS THAT HAVE BEEN RAISED AS A 22 RESULT OF CERTAIN FACTS WE HAVEN'T ESTABLISHED TO THIS 23 DATE. ALSO WITH RESPECT TO TRIAL STRATEGY, AS WELL AS WITH 24 THE WORK PRODUCT, WE INTEND TO CALL HIM IN THE CASE IN 25 CHIEF. HE’s HERE, AND — HE’s HERE. I REQUEST THE COURT 26 ORDER HIM BACK. WE INTEND TO ONLY CALL HIM FOR A CERTAIN 27 LENGTH. 28 THE COURT: I DON'T HAVE THE AUTHORITY TO ORDER HIM
page336 1 BACK AT A CERTAIN TIME. STAY IN TOUCH WITH THE ATTORNEYS 2 HERE. AND WHEN — IF WE NEED YOU, WE'LL CALL YOU. AND I 3 INTEND TO MAKE IT AS PAINLESS AS POSSIBLE. HE’s BEEN HERE A 4 LONG TIME. I THINK WE OUGHT TO BE ABLE TO DO IT AND GET IT 5 OVER WITH. 6 THE WITNESS: AGREEABLE WITH ME. 7 MR. BEUGELMANS: PLAINTIFF WOULD CONTINUE WITH 8 MR. CARTO. 9 THE COURT: VERY WELL. MR. CARTO, IF YOU WOULD RESUME 10 THE STAND. 11 12 WILLIS CARTO, 13 CALLED AS A WITNESS ON BEHALF OF THE PLAINTIFF, HAVING BEEN 14 PREVIOUSLY SWORN, TESTIFIED AS FOLLOWS: 15 16 DIRECT EXAMINATION (CONTINUED) 17 BY MR. BEUGELMANS: 18 Q MR. CARTO, DO YOU UNDERSTAND THAT YOU ARE STILL 19 UNDER OATH? 20 A YES. 21 Q NOW, WHEN WE CONCLUDED ON THURSDAY, I BELIEVE, OR 22 FRIDAY MORNING, I ASKED YOU IF VIBET WAS ORGANIZED BY 23 PATRICK FOETISCH. DO YOU RECALL THAT? 24 A YES. 25 Q WAS VIBET ORGANIZED BY PATRICK FOETISCH? 26 QUESTION, VIBET WAS ORGANIZED TO PUT THE FARREL MONEY 27 ELSEWHERE OTHER THAN THE LEGION ACCOUNTS; IS THAT CORRECT? 28 A THAT WAS CERTAINLY ONE OF THE CONSIDERATIONS.
page337 1 Q WAS IT ORGANIZED FOR THAT PURPOSE, SIR? 2 A THAT WAS CERTAINLY ONE OF THE CONSIDERATIONS. 3 Q I WOULD LIKE TO READ FROM THE DEPOSITION, PAGE 16, 4 STARTING LINE 12 THROUGH 18. 5 MR. WAIER: ON OCTOBER 17, 1995? 6 MR. BEUGELMANS: CORRECT. 7 MR. WAIER: WHAT PAGE? 8 MR. BEUGELMANS: 16, STARTING LINE 12. 9 MR. WAIER: NO OBJECTION TO HIM READING IT. 10 11 BY MR. BEUGELMANS: 12 QQUESTION: FOR WHAT REASON WAS VIBET ORGANIZED?13ANSWER: I THINK THAT’s EXPRESSED IN THE MINUTES 14 THAT ARE IN — IN YOUR POSSESSION WHEN THE DECISION WAS MADE 15 TO — FOR VERY GOOD, VALID AND APPROPRIATE REASONS TO PUT 16 THE FUNDS IN THE FARREL ESTATE ELSEWHERE THAN THE BANK 17 ACCOUNT OF THE LEGION OR ELSEWHERE IN THE COUNTRY.18 SIR, TO YOUR KNOWLEDGE, HAS VIBET MAINTAINED A 19 BANK ACCOUNT? 20 A I'M SORRY, WHAT? 21 Q HAS VIBET MAINTAINED A BANK ACCOUNT? 22 A YES. 23 Q DID YOU HAVE ANYTHING TO DO WITH SETTING UP 24 VIBET’s BANK ACCOUNT? 25 A NO. 26 Q AND DID THE VIBET BANK ACCOUNT — WAS IT SET UP 27 AT THE BANQUE CONTRADE LAUSANNE, SWITZERLAND? 28 A YES.
page338 1 Q IS IT TRUE ALL THE MONEY THAT WENT INTO THE VIBET 2 ACCOUNT AT BANQUE CONTRADE LAUSANNE, SWITZERLAND, CAME FROM 3 THE FARREL ESTATE? 4 A NO, NONE OF THE MONEY CAME FROM THE FARREL ESTATE. 5 Q I WOULD LIKE TO READ, SIR, FROM YOUR DEPOSITION, 6 PAGE 117. 7 MR. WAIER: WHAT LINES? 8 MR. BEUGELMANS: STARTING LINE 3. 9 MR. WAIER: TO WHERE? 10 MR. BEUGELMANS: LINE 7. 11QUESTION: --12 MR. WAIER: CAN I READ IT? 13 MR. BEUGELMANS: I'M SORRY? 14 MR. WAIER: TO LINE? WHAT LINE? 15 MR. BEUGELMANS: 7. 16 MR. WAIER: YOUR HONOR, I'M NOT SURE WHY HE’s READING 17 IT. IF IT’s FOR IMPEACHMENT, IT DOESN'T IMPEACH HIS 18 TESTIMONY. IT’s A PARTY, SO HE CAN READ IT. 19 THE COURT: I WON'T KNOW UNTIL I HEAR IT. OVERRULE THE 20 OBJECTION. 21 22 BY MR. BEUGELMANS: 23 QQUESTION: HAS VIBET EVER RECEIVED MONIES FROM 24 ANY SOURCE OTHER THAN THE FUNDS WHICH ARE TRANSFERRED TO 25 VIBET FROM YOUR SHARE OF THE 45 PERCENT OF THE SETTLEMENT OF 26 THE FARREL ESTATE?27ANSWER: I DON'T THINK SO.28 A MR. BEUGELMANS --
page339 1 Q NO QUESTION PENDING, SIR. 2 A NO, I THINK I HAVE TO SAY THIS FOR THE BENEFIT OF 3 EVERYONE. I THINK YOU, AS WELL AS PERHAPS OTHERS, ARE 4 LABORING UNDER A BIG MISCONCEPTION. AT NO TIME DID VIBET 5 EVER GET ANY MONEY FROM THE FARREL ESTATE. THE FARREL 6 ESTATE WAS DEVISED BY WILL TO JOAN ALTHAUS AND HAD NOTHING 7 TO DO WITH VIBET. VIBET WAS A — WHAT IS — I MEAN, 8 NOTHING TO DO WITH NECA CORPORATION, WHICH WAS SET UP BY 9 MISS FARREL AND INTO WHICH SHE TRANSFERRED ALL OF HER OTHER 10 ASSETS, OTHER THAN HER HOUSEHOLD GOODS AND A FEW — SOME 11 GOLD COINS, WHICH SHE THEN DEVISED BY WILL TO JOAN ALTHAUS 12 FOR THE PURPOSE OF HER SEEING THAT NECA CORPORATION WAS PUT 13 INTO MY HANDS. AT NO TIME DID VIBET EVER RECEIVE ANY OF 14 THAT MONEY. ALL OF THE ESTATE MONEY WENT 100 PERCENT TO 15 JOAN ALTHAUS. I THINK WE HAVE TO BE VERY CAREFUL ABOUT OUR 16 NOMENCLATURE HERE. 17 MR. BEUGELMANS: MOVE TO STRIKE. NONRESPONSIVE. 18 THE COURT: SUSTAINED. 19 20 BY MR. BEUGELMANS: 21 Q SIR, NECA WAS SET UP TO TRANSFER JOAN FARREL'S 22 ASSETS TO THE LEGION, CORRECT? 23 MR. WAIER: OBJECTION. LACKS FOUNDATION. 24 THE COURT: OVERRULED. 25 THE WITNESS: PART OF HER ASSETS. 26 27 BY MR. BEUGELMANS: 28 Q SIR, YOU HAD IN FRONT OF YOU THE EXHIBIT BOOK.
page340 1 A EXCUSE ME. I WAS WRONG. IT WAS SET UP TO 2 TRANSFER NECA CORPORATION INTO VIBET, BUT NOT THE ASSETS OF 3 HER ESTATE. 4 Q DID VIBET EXIST PRIOR TO JEAN FARREL’s DEATH? 5 A NO. 6 Q DID YOU EVER DISCUSS VIBET WITH JEAN FARREL? 7 A NO. 8 Q NOW, NECA CORPORATION, THE OWNERSHIP OF NECA WAS 9 EVIDENCED BY 20 SHARES OF STOCK; IS THAT CORRECT? 10 A BEARER STOCK, YES. 11 Q AND THEY WERE GIFTED TO THE LEGION FOR THE 12 SURVIVAL OF FREEDOM, INC., DURING JEAN FARREL’s LIFETIME, 13 CORRECT? 14 A THAT’s A TOUGH LEGAL QUESTION. THE OWNERSHIP, OF 15 COURSE, RESIDED IN THE BEARER SHARES THEMSELVES, WHICH SHE 16 REFERRED TO AS MINE, MEANING WILLIS CARTO. 17 Q SIR, PLEASE TURN TO THE COMPLAINT THAT YOU SIGNED 18 IN THE PRESENCE OF NOTARY PUBLIC, EXHIBIT 183, PLEASE. 19 NORTH CAROLINA COMPLAINT. I HAVE A COPY I CAN SHOW. IT 20 WILL BE FASTER. 21 MR. WAIER: COULD YOU WAIT UNTIL WE PULL IT OUT? 22 MR. BEUGELMANS: SURE. 23 MR. WAIER: I HAVE IT NOW. 24 25 BY MR. BEUGELMANS: 26 Q TURN TO THE COMPLAINT, VERY END, PAGE 2. WOULD 27 YOU PLEASE READ PAGE 2 OF THE COMPLAINT, WHICH IS CONTAINED 28 IN EXHIBIT 183, PARAGRAPH 5 AND PARAGRAPH 6.
page341 1 A (PAUSE) RIGHT. 2 Q READ THAT INTO THE RECORD. 3 MR. WAIER: WHICH LINES, PLEASE? 4 MR. BEUGELMANS: PARAGRAPH 5 AND PARAGRAPH 6. 5 MR. WAIER: YOUR HONOR, I WILL OBJECT WITH RESPECT TO 6 THIS TESTIMONY. AND IT LACKS FOUNDATION. CALLS FOR A LEGAL 7 CONCLUSION. RELEVANCY. AND POTENTIAL HEARSAY WITH RESPECT 8 TO BOTH. ALSO NOT THE BEST EVIDENCE WITH RESPECT TO 9 PARAGRAPH 6. AND ALSO RELEVANCY. 10 THE COURT: THIS IS THE COMPLAINT FILED IN 11 NORTH CAROLINA, CORRECT? 12 MR. BEUGELMANS: CORRECT. 13 THE COURT: I THINK I REMEMBERED IT. 14 MR. BEUGELMANS: THE VERIFIED COMPLAINT SIGNED IN FRONT 15 OF A NOTARY PUBLIC. THE COMPLAINT IS THE LAST PAGES. IT'S 16 IN REVERSE CHRONOLOGICAL ORDER. WE RECEIVED IT FROM THE 17 COURT IN NORTH CAROLINA. 18 THE COURT: WHAT PAGE? 19 MR. BEUGELMANS: TURNING BACK FROM THE VERY, VERY BACK 20 OF THE EXHIBIT, IT WILL BE PAGE 2 OF THE COMPLAINT. IF I 21 COULD APPROACH, YOUR HONOR. 22 THE COURT: I READ OVER THIS EXHIBIT. THIS IS 23 SOMETHING MR. CARTO SIGNED. I WILL OVERRULE THE OBJECTION. 24 MR. WAIER: MAY I BRIEFLY BE HEARD, YOUR HONOR? 25 THE COURT: VERY BRIEFLY. 26 MR. WAIER: WITH RESPECT TO THE AFFIDAVIT, WHERE HE 27 SIGNS THIS PARTICULAR AFFIDAVIT, IT DOES NOT STATE THAT -- 28 HOW HE OBTAINED HIS KNOWLEDGE. THERE’s NO FOUNDATION HOW HE
page342 1 OBTAINED HIS KNOWLEDGE. IF THE KNOWLEDGE CAME FROM HEARSAY, 2 YOUR HONOR, THEN IT’s HEARSAY. IF IT CAME FROM SOMEBODY 3 ELSE, CAME FROM ATTORNEYS, IT’s HEARSAY. IT ALSO STATES A 4 LEGAL CONCLUSION. IT DOESN'T STATE THAT HE DID ALL OF IT, 5 STATES THAT THIS IS HIS KNOWLEDGE. WHERE HE GETS THE 6 KNOWLEDGE, THERE HAS TO BE A FOUNDATION LAID. 7 THE COURT: OBJECTION WILL BE OVERRULED. 8 9 BY MR. BEUGELMANS: 10 Q PLEASE READ PARAGRAPH 5 AND 6. 11 A FIVE:THAT NECA CORPORATION, WHICH IS PRINCIPALLY 12 THE SUBJECT OF THIS ACTION, IS A CORPORATION FORMED BY THE 13 DECEASED, JEAN FARREL, E., AS A LIBERIAN,L-I-B-E-R-I-A-N, 14CORPORATION ON OR ABOUT NOVEMBER 25, 1983.15 SIX:THAT NECA CORPORATION HAS SUBSTANTIAL 16 ASSETS, HAVING A VALUE IN EXCESS OF 16 MILLION DOLLARS, 17 U.S., WHICH ASSETS ARE HELD IN MANY DIFFERENT COUNTRIES AND 18 CITIES IN THE WORLD. NECA CORPORATION STOCK WAS COMPOSED OF 19 20 BEARER CERTIFICATES, ALL OF WHICH CERTIFICATES OF STOCK 20 WERE GIFTED TO THE LEGION FOR THE SURVIVAL OF FREEDOM, INC. 21 DURING A LIFETIME WITH JEAN FARREL, E., IN WHICH 22 CERTIFICATES ARE STILL PROPERTY OF THE LEGION FOR THE 23 SURVIVAL OF FREEDOM, INC.24 Q THANK YOU. IN THE NORTH CAROLINA LITIGATION DID 25 YOU HAVE OCCASION TO ANSWER WRITTEN INTERROGATORIES? 26 A WELL, I BELIEVE SO. 27 Q IF YOU WOULD, PLEASE, SIR, IN THE BEGINNING OF 28 EXHIBIT 183, THERE IS A SET OF RESPONSES, PLAINTIFF'S
page343 1 ANSWERS TO DEFENDANTS' SECOND SET OF INTERROGATORIES. RIGHT 2 BEFORE THAT, A VERIFICATION. DO YOU SEE THAT, SIR? 3 MR. WAIER: WHICH PAGE? 4 MR. BEUGELMANS: BEGINNING OF THE FOURTH PAGE, 5 EXHIBIT 183. 6 7 BY MR. BEUGELMANS: 8 Q VERIFICATION ON PAGE 4. 9 A YES. 10 Q IS IT YOUR SIGNATURE, THE VERIFICATION ON PAGE 5? 11 A YES. 12 Q DID YOU READ THE RESPONSES, THE PLAINTIFF'S 13 ANSWERS TO DEFENDANTS' SECOND SET OF INTERROGATORIES BEFORE 14 YOU SIGNED THE VERIFICATION ON PAGE 5, 183? 15 A I THINK SO. 16 MR. WAIER: MAYBE I'M MISSING SOMETHING. I'M NOT SURE 17 WHAT HE’s READING. PAGE FOUR OF THE DOCUMENT HE’s TALKING 18 ABOUT IS SIGNED BY WILLIAM M. ALEXANDER, JUNIOR. 19 THE COURT: WHY DON'T THE TWO OF YOU COME UP TOGETHER 20 AND MAYBE LOOK AT IT. 21 22 BY MR. BEUGELMANS: 23 Q SIR, DID YOU RECEIVE PLAINTIFF’s ANSWERS TO THE -- 24 MR. CARTO, DID YOU REVIEW PLAINTIFF’s ANSWERS TO DEFENDANTS' 25 SECOND SET OF INTERROGATORIES BEFORE YOU SIGNED THE 26 VERIFICATION HERETO? 27 A I'M SURE I DID. 28 Q SIR, WILL YOU PLEASE READ ANSWER CAPITAL 6-C.
page344 1 MR. WAIER: OBJECT, YOUR HONOR. THERE ARE NO 2 INTERROGATORIES FOR WHICH -- 3 MR. BEUGELMANS: YES, SIR, THE INTERROGATORIES ARE 4 RIGHT BELOW THAT. THE ENTIRE FILE FROM NORTH CAROLINA HAS 5 BEEN PRODUCED. TAKE THE TIME AND READ THE EXHIBIT AND SEE 6 IT. 7 THE COURT: POINT IT OUT TO HIM. 8 MR. WAIER: YES, PLEASE. 9 THESE EXACTLY, I DON'T HAVE COPIES OF THE 10 INTERROGATORIES AND THEY WEREN'T PROVIDED TO US. 11 MR. BEUGELMANS: I BELIEVE THEY DO. IT’s PLAINTIFF'S 12 EXHIBIT -- 13 THE COURT: I'M GOING TO OVERRULE THE OBJECTION, IF 14 THAT’s AN OBJECTION FOR NOT SHOWING IT. YOU CAN COME UP AND 15 LOOK AT WHAT YOUR CLIENT IS LOOKING AT. 16 MR. WAIER: IT’s IRRELEVANT WITHOUT THE 17 INTERROGATORIES. 18 MR. BEUGELMANS: THE INTERROGATORIES ARE HERE, 19 COUNSEL. 20 THE COURT: OVERRULED. 21 22 BY MR. BEUGELMANS: 23 Q SIR, PLEASE READ ANSWER 6, CAPITAL C. 24 A YES. NOW, THIS IS DATED 1987; IS THAT RIGHT? 25 MR. WAIER: ONE SECOND, YOUR HONOR. I HAVE AN 26 OBJECTION. WITHOUT THE QUESTION THERE, HE’s ASKING TO READ 27 STATEMENTS THAT ARE VERIFIED ANSWERS OR PURPORTED VERIFIED 28 ANSWER TO INTERROGATORIES. THERE’s NO INTERROGATORIES WHICH
page345 1 STATES, THEREFORE, IT’s IRRELEVANT. 2 THE COURT: MAYBE I CAN SOLVE THE PROBLEM. I'M GOING 3 TO TAKE JUDICIAL NOTICE OF THIS ENTIRE DOCUMENT. 4 MR. BEUGELMANS: THANK YOU. WITHDRAW THE QUESTION. 5 THE COURT: THAT DOESN'T MEAN I'LL NECESSARILY BELIEVE 6 EVERYTHING IN IT, BUT I'LL TAKE JUDICIAL NOTICE OF IT. 7 MR. WAIER: I DO WANT TO INDICATE, I DON'T BELIEVE 8 THERE WAS A PROPER REQUEST IN WRITING UNDER THE CODE OF 9 CIVIL PROCEDURE TO REQUEST YOU FOR THAT PURPOSE AND I 10 BELIEVE THAT HAD TO BE DONE, WHICH HAD NOT. THEREFORE, WE 11 OBJECT TO YOU TAKING JUDICIAL NOTICE. 12 MR. BEUGELMANS: MAY I PROCEED? 13 THE COURT: GO AHEAD. 14 15 BY MR. BEUGELMANS: 16 Q MR. CARTO, IS THE MONEY THAT WENT TO THE VIBET 17 ACCOUNT YOUR MONEY? 18 A YES. 19 Q IN HER WILL, DID JEAN FARREL LEAVE A BEQUEST TO 20 WILLIS CARTO? 21 A NO. 22 MR. WAIER: OBJECTION. THE BEST EVIDENCE IS THE WILL 23 ITSELF. RELEVANCY. 24 THE COURT: I'M SORRY, I DIDN'T HEAR THE ANSWER OR THE 25 QUESTION. 26 (QUESTION AND ANSWER READ.) 27 MR. WAIER: I OBJECTED BEFORE THE ANSWER AS BEING NOT 28 THE BEST EVIDENCE. LACKS FOUNDATION. THE WILL IS THE BEST
page346 1 EVIDENCE. 2 THE COURT: YES, I READ THE WILL. THE ANSWER ISNO3 TO IT, THAT QUESTION. 4 COUNSEL, ON JUDICIAL NOTICE, IF YOU LOOK, IT'S 5 451, MANDATORY JUDICIAL NOTICE, PERMISSIBLE JUDICIAL NOTICE 6 WHEN YOU HAVE TO GIVE NOTICE. YOU DON'T HAVE TO GIVE IT FOR 7 MANDATORY JUDICIAL NOTICE. 8 MR. WAIER: THERE’s RULES OF COURT WITH RESPECT TO 9 REQUESTING THE COURT TO TAKE PERMISSIVE JUDICIAL NOTICE. 10 THE COURT: THAT’s TRUE. THEY DON'T OVERRIDE THE 11 EVIDENCE CODE. 12 LET’s PROCEED. 13 14 BY MR. BEUGELMANS: 15 Q NOW, MR. CARTO THE I.H.R. IS SIMPLY A TRADE NAME 16 OF THE LEGION, CORRECT? 17 A YES. 18 Q I.H.R. NEVER MAINTAINED A BANK ACCOUNT IN ITS OWN 19 NAME, HAS IT? 20 A YES, IT HAS. 21 Q WAS THAT BANK ACCOUNT IN EXISTENCE IN THE YEAR 22 1985? 23 A OF COURSE. 24 Q AND WHO HAD SIGNATORY POWER IN THAT BANK ACCOUNT? 25 A WELL, MR. MARCELLUS DID. I FRANKLY DON'T RECALL. 26 I DON'T THINK I DID. I TRUSTED MR. MARCELLUS AND THE OTHER 27 EMPLOYEES TO ADMINISTER THE BANK ACCOUNT, PAY THE BILLS AND 28 PUT THE MONEY IN IT THAT BELONGED IN IT.
page347 1 Q DID YOU EVER INSTRUCT MR. MARCELLUS TO TRANSFER 2 MONEY FROM AN I.H.R. ACCOUNT TO AN ACCOUNT OWNED BY LIBERTY 3 LOBBY? 4 MR. WAIER: OBJECTION. RELEVANCY. 5 THE COURT: OVERRULED. 6 THE WITNESS: I CERTAINLY DON'T THINK SO. 7 8 BY MR. BEUGELMANS: 9 Q DID YOU INSTRUCT MR. MARCELLUS TO TRANSFER MONEY 10 FROM AN I.H.R. ACCOUNT TO AN F.D.F.A. ACCOUNT? 11 MR. WAIER: OBJECTION. RELEVANCY. 12 THE COURT: OVERRULED. 13 THE WITNESS: I — WITHOUT SAYING FOR CERTAIN, BUT I 14 BELIEVE I DID. 15 16 BY MR. BEUGELMANS: 17 Q NOW, AS OF MARCH 1987, HAD THE BOARD OF THE LEGION 18 FOR THE SURVIVAL OF FREEDOM, INC., RELINQUISHED ITS INTEREST 19 IN THE FARREL ESTATE TO WILLIS CARTO? 20 MR. WAIER: OBJECTION. CALLS FOR LEGAL CONCLUSION. 21 LACKS FOUNDATION. 22 THE COURT: OVERRULED. 23 THE WITNESS: AS OF THAT TIME, THERE HAD BEEN AN 24 AGREEMENT BETWEEN MYSELF AND THE OTHER MEMBER, MRS. FURR, 25 AND WHO HAPPENED TO BE THE SECRETARY/TREASURER OF THE BOARD 26 AS WELL, AND HER HUSBAND IN REGARD TO THAT MATTER. 27 MR. BEUGELMANS: MOVE TO STRIKE. NONRESPONSIVE. 28 THE COURT: OVERRULED.
page348 1 BY MR. BEUGELMANS: 2 Q MR. CARTO, HAD THE BOARD OF DIRECTORS OF THE 3 LEGION RELINQUISHED ANY INTEREST IT MIGHT HAVE — THAT THE 4 LEGION MIGHT HAVE IN THE FARREL ESTATE TO YOU AS OF MARCH 5 1987? 6 A YES. 7 Q SIR, ARE YOU ABLE TO DISTINGUISH BETWEEN THE 8 PERSONAL FUNDS THAT YOU USED IN THE FARREL LITIGATION FROM 9 THE FUNDS THAT YOU BORROWED TO PURSUE THE FARREL LITIGATION? 10 A YES. 11 Q I WOULD LIKE TO READ FROM YOUR DEPOSITION, PAGE 12 54. 13 MR. WAIER: WHAT LINES? 14 15 BY MR. BEUGELMANS: 16 Q BEFORE I ASK THAT, SIR, HOW MUCH DO YOU CONTEND 17 WILLIS CARTO SPENT IN PURSUING THE FARREL LITIGATION ABROAD? 18 A MY OWN MONEY? 19 Q YES, SIR. 20 A WELL, I DON'T KNOW, JUST A FEW THOUSAND, WHICH I 21 REIMBURSED MYSELF. 22 Q AND THE REST WAS MONEY FROM F.D.F.A. AND FROM 23 LIBERTY LOBBY, CORRECT? 24 A NO. THERE WERE OTHER ENTITIES AS WELL. 25 Q ISN'T IT TRUE THAT THE GREAT BULK OF THE MONEY 26 CAME FROM F.D.F.A. AND LIBERTY LOBBY TO PURSUE THE FARREL 27 ESTATE? 28 A YES.
page349 1 Q AND IN ESSENCE, THE LEGION BORROWED FROM F.D.F.A. 2 TO FINANCE THE FARREL LITIGATION, CORRECT? 3 MR. WAIER: OBJECTION. CALLS FOR LEGAL CONCLUSION. 4 LACKS FOUNDATION. ASKED AND ANSWERED. 5 THE COURT: SUSTAINED ON ASKED AND ANSWERED. 6 7 BY MR. BEUGELMANS: 8 Q DID THE LEGION BORROW FROM F.D.F.A. TO LITIGATE 9 THE FARREL LITIGATION? 10 MR. WAIER: OBJECTION. ASKED AND ANSWERED. 11 THE COURT: OVERRULED. 12 THE WITNESS: WITHOUT REVIEWING THE FIGURES, I COULDN'T 13 SAY. I DON'T — I DON'T BELIEVE SO. HOWEVER, THAT’s MY 14 OPINION AT THIS TIME. 15 16 BY MR. BEUGELMANS: 17 Q THAT, IN FACT, THE LEGION, PLAINTIFF IN THIS 18 ACTION, BORROWED FROM F.D.F.A. TO FINANCE THE FARREL 19 LITIGATION, CORRECT? 20 A ISN'T THAT THE SAME QUESTION? 21 MR. WAIER: OBJECTION. ASKED AND ANSWERED. 22 MR. BEUGELMANS: I DON'T BELIEVE WE HAD AN ANSWER, YOUR 23 HONOR. 24 THE COURT: SIR, IF YOU PLEASE, JUST LET THE ATTORNEY 25 MAKE THE OBJECTION. YOU ARE A WITNESS. YOU JUST ANSWER 26 QUESTIONS IF YOU CAN. IF YOU CAN'T, FINE. 27 ANY OBJECTION TO THE QUESTION? 28 MR. WAIER: OBJECTION. ASKED AND ANSWERED. SECOND
page350 1 TIME ASKED. 2 THE COURT: SUSTAINED. 3 MR. BEUGELMANS: YOUR HONOR, MAY I HAVE THE ANSWER READ 4 BACK. IT WENT BY ME. 5 6 BY MR. BEUGELMANS: 7 Q YOU DON'T BELIEVE SO? 8 MR. WAIER: OBJECTION. ASKED AND ANSWERED. 9 THE COURT: IS THAT A QUESTION? I DON'T BELIEVE SO. 10 11 BY MR. BEUGELMANS: 12 Q NO, IS THAT THE ANSWER? YOU DON'T BELIEVE THAT 13 THE LEGION BORROWED MONEY FROM F.D.F.A. TO PURSUE THE FARREL 14 LITIGATION? 15 MR. WAIER: OBJECTION. ASKED AND ANSWERED. 16 THE COURT: SUSTAINED. 17 18 BY MR. BEUGELMANS: 19 Q I WOULD LIKE TO READ FROM THE DEPOSITION, PAGE 20 157, BEGINNING AT LINE 22, TO 157, LINE 7. 21 MR. WAIER: NO OBJECTION. 22 23 BY MR. BEUGELMANS: 24 QQUESTION: DID YOU EVER MAKE A PROPOSITION TO THE 25 FURRS, LEWIS AND LAVONNE FURR, OR EITHER OF THEM, THAT THE 26 LEGION FOR THE SURVIVAL OF FREEDOM, INC. SHOULD BORROW MONEY 27 FROM F.D.F.A.?28 AND THERE’s COLLOQUY.
page351 1ANSWER: I'M SORRY, THERE’s A PLANE GOING OVER. 2 I CAN'T HEAR YOU.3QUESTION: SHOULD BORROW MONEY FROM F.D.F.A. TO 4 FINANCE THE FARREL LITIGATION.5ANSWER: WELL, IN ESSENCE, THAT’s WHAT HAPPENED, 6 AS I RECALL. SO I MUST HAVE DONE THAT OR MUST HAVE 7 DISCUSSED IT.8 NOW, SIR, YOU NEVER HAD AUTHORITY TO WITHDRAW ANY 9 FUNDS FROM THE BANQUE CONTRADE ACCOUNT THAT VIBET 10 MAINTAINED, CORRECT? 11 A CORRECT. 12 Q AND YOU NEVER HAD AUTHORITY TO DIRECT PAT FOETISCH 13 TO WITHDRAW MONEY FROM THE BANQUE CONTRADE ACCOUNT, DID YOU? 14 A WELL, THE — I WOULD HAVE TO ANSWER THAT QUESTION 15 AS TO NEGATIVE. I BELIEVE I DID HAVE THE AUTHORITY TO DO 16 IT, AS WELL AS THE — AS WELL AS THE BOARD OF DIRECTORS. 17 Q DID YOU EVER GIVE INSTRUCTIONS TO PATRICK FOETISCH 18 TO WITHDRAW ANY FUNDS FROM BANQUE CONTRADE, LAUSANNE? 19 A YES. WHEN I SAYINSTRUCTIONS,I HAVE TO AMEND 20 THAT I REQUESTED HIM FROM TIME TO TIME TO DO THAT. 21 Q ALL RIGHT. I'D LIKE TO READ FROM DEPOSITION PAGE 22 20, STARTING LINE 22, THROUGH PAGE 21, LINE 2. 23 MR. WAIER: I'M SORRY, I DID HAVE AN OBJECTION, YOUR 24 HONOR, WITH RESPECT TO THE QUESTION STARTING LINE 13 AND 25 ENDING LINE 16 THAT I WOULD REQUEST A RULING ON BEFORE IT'S 26 READ. 27 MR. BEUGELMANS: I'M NOT ASKING TO READ LINE 13 OR 16. 28 IT’s PAGE 20, LINE 23 TO PAGE 21, LINE 2.
page352 1 MR. WAIER: I THOUGHT YOU SAID TO LINE 22. I 2 APOLOGIZE. I HAVE NO PROBLEMS WITH THAT. 3 4 BY MR. BEUGELMANS: 5 QQUESTION: DID YOU EVER GIVE MAITRE FOETISCH-- 6 STRIKE THAT. 7QUESTION: DID YOU EVER GIVE INSTRUCTIONS TO 8 MAITRE FOETISCH TO WITHDRAW ANY FUNDS FROM BANQUE CONTRADE, 9 LAUSANNE?10ANSWER: I DON'T BELIEVE I HAD AUTHORITY TO GIVE 11 HIM INSTRUCTIONS ON THAT MATTER.12 SIR, YOU DON'T KNOW WHICH LAW VIBET WAS ORGANIZED 13 UNDER, DO YOU? 14 MR. WAIER: OBJECTION. VAGUE AND AMBIGUOUS. 15 THE COURT: OVERRULED. 16 THE WITNESS: MY RECOLLECTION IS THAT IT WAS AN 17 OFFSHORE, NOT A CORPORATION. THE BAHAMAS, I BELIEVE. 18 19 BY MR. BEUGELMANS: 20 Q I WOULD LIKE TO READ FROM THE DEPOSITION, SIR, 21 PAGE 10, LINE 7 THROUGH 9. 22QUESTION: DO YOU HAVE ANY INFORMATION AS TO WHAT 23 LAW VIBET, INCORPORATED, IS INCORPORATED UNDER?24ANSWER: NO.25 DO YOU HAVE ANY KNOWLEDGE, SIR, AS TO WHO THE 26 DIRECTORS OF VIBET, INC., BAHAMIAN CORPORATION, MAY HAVE 27 BEEN SINCE IT FIRST INCORPORATED UP TO TODAY? 28 A AT THE TIME, I WAS NOT CONSULTED AT ALL AS TO THE
page353 1 IDENTITY OF THE DIRECTORS, AND I DO NOT KNOW WHO THEY WERE 2 OR WHO THEY ARE. 3 Q AND THESE DIRECTORS — STRIKE THAT. 4 DO YOU KNOW IF THERE WAS A NOMINEE APPOINTED UNDER 5 THE LAWS OF BAHAMA? 6 MR. WAIER: OBJECTION. LACKS FOUNDATION. 7 MR. BEUGELMANS: IF I COULD MAKE AN OFFER OF PROOF. 8 FROM OTHER LITIGATION MY UNDERSTANDING THAT WHEN YOU 9 ORGANIZE A LAW — OR ORGANIZE A CORPORATION UNDER THE LAW 10 OF BAHAMA OR OTHER OFFSHORE NATIONS OF THAT TYPE, THE 11 CORPORATION IS RUN BY WHAT IS CALLED A NOMINEE. THAT’s THE 12 PERSON IN CHARGE OF THE CORPORATION. 13 THE COURT: YOU WANT TO FIND OUT IF HE KNOWS WHO THE 14 NOMINEE IS? 15 MR. BEUGELMANS: YES. 16 MR. WAIER: OBJECT, YOUR HONOR. IT LACKS FOUNDATION HE 17 KNEW WHAT THE LAW WAS, LET ALONE WHETHER THERE WAS A NOMINEE 18 OR EVEN A TERMNOMINEE.I'M UNFAMILIAR WITH THE TERM. 19 THE COURT: HE CAN TELL US. OVERRULED. 20 THE WITNESS: NO. 21 22 BY MR. BEUGELMANS: 23 Q SIR, IS IT VIBET, INCORPORATED, OR VIBET, LIMITED? 24 A I DON'T KNOW. 25 Q NOW, IS VIBET — STRIKE THAT. 26 WAS VIBET, LIMITED, UNDER THE UMBRELLA OF AN 27 ENTITY, THE INTERNATIONAL LEGION FOR THE SURVIVAL OF 28 FREEDOM, INC.?
page354 1 MR. WAIER: OBJECTION. VAGUE AND AMBIGUOUS. LACKS 2 FOUNDATION. ASSUMES FACTS NOT IN EVIDENCE. 3 THE COURT: SUSTAINED. 4 5 BY MR. BEUGELMANS: 6 Q SIR, DO YOU KNOW WHAT THE INTERNATIONAL — STRIKE 7 THAT. 8 DO YOU KNOW IF THERE EVER WAS AN ENTITY BY THE 9 NAME OF INTERNATIONAL LEGION FOR THE SURVIVAL OF FREEDOM, 10 INC.? 11 A YES. 12 Q HOW DO YOU KNOW THAT, SIR? 13 A BECAUSE MY UNDERSTANDING IS — BUT I MAY BE 14 WRONG, IT MIGHT BE THE OTHER WAY AROUND, THAT THE 15 INTERNATIONAL LEGION FOR THE SURVIVAL OF FREEDOM WAS THE 16 FOUNDATION OR THE MOTHER CORPORATION OF VIBET. 17 Q DO YOU KNOW IF IT’s A CORPORATION OR A TRUST OR 18 SOME OTHER TYPE OF ENTITY? 19 A I BELIEVE -- 20 MR. WAIER: OBJECT. LACKS FOUNDATION. CALLS FOR 21 HEARSAY. 22 THE COURT: OVERRULED. IF HE KNOWS PERSONALLY. 23 THE WITNESS: I'M SORRY, I DON'T RECALL. 24 25 BY MR. BEUGELMANS: 26 Q DO YOU KNOW UNDER WHICH LAWS THE INTERNATIONAL 27 LEGION FOR THE SURVIVAL OF FREEDOM WAS FORMED? 28 A NO.
page355 1 Q DO YOU KNOW IF IT’s AN OFFSHORE CORPORATION? 2 A NO. 3 Q DO YOU KNOW IF IT STILL EXISTS? 4 A NO. 5 Q HAVE YOU EVER HAD ANY KNOWLEDGE AS TO WHO THE 6 DEBTORS OF INTERNATIONAL LEGION ARE? 7 A IF I DID, I DON'T RECALL WHO THEY WERE AT THE 8 TIME, NOR WHO THEY MAY BE AT THIS TIME, IF IT’s STILL IN 9 EXISTENCE. 10 Q SIR, HAVE YOU EVER OPENED AN ACCOUNT ON BEHALF OF 11 THE INTERNATIONAL LEGION FOR THE SURVIVAL OF FREEDOM? 12 A NO. 13 Q ARE YOU AWARE OF ANY SUCH ACCOUNT EVER EXISTING? 14 MR. WAIER: OBJECTION. CALLS FOR HEARSAY. LACKS 15 FOUNDATION. 16 THE COURT: OVERRULED. 17 THE WITNESS: NO. 18 19 BY MR. BEUGELMANS: 20 Q ISN'T IT TRUE, SIR, THAT THE INTERNATIONAL LEGION 21 FOR THE SURVIVAL OF FREEDOM IS A TRUST ORGANIZED UNDER THE 22 LAWS OF THE BRITISH VIRGIN ISLANDS? 23 MR. WAIER: OBJECTION. ASKED AND ANSWERED. LACKS 24 FOUNDATION. RELEVANCY. 25 THE COURT: ASKED AND ANSWERED. SUSTAINED. 26 27 BY MR. BEUGELMANS: 28 Q MAY I READ FROM THE DEPOSITION PAGE 98, LINE 10
page356 1 THROUGH 13. TO GIVE CONTEXT, GO TO LINE 6. 2QUESTION: DOES EXHIBIT 13 REFRESH YOUR 3 RECOLLECTION TO THE TYPE OF ENTITY WHICH THE INTERNATIONAL 4 LEGION FOR THE SURVIVAL OF FREEDOM IS?5ANSWER: YES. AND IT IS IN FACT A TRUST 6 ORGANIZED UNDER THE LAWS OF THE BRITISH VIRGIN ISLANDS.7 MR. WAIER: OBJECTION. VAGUE AND AMBIGUOUS WITHOUT 8 REFERENCING TO WHAT EXHIBIT 13 IS. 9 THE COURT: OVERRULED. 10 11 BY MR. BEUGELMANS: 12 QANSWER: I WILL ASSUME THAT IT IS. OTHERWISE, I 13 WOULDN'T HAVE SAID THAT IT WAS.14 A IS THAT A QUESTION? 15 THE COURT: NO, SIR, IT’s NOT. HE’s READING FROM THE 16 DEPOSITION. 17 18 BY MR. BEUGELMANS: 19 Q NOW, MR. CARTO, YOU HAVE BEEN THE TREASURER OF 20 LIBERTY LOBBY FOR MORE THAN 40 YEARS, CORRECT? 21 A YES. 22 Q ARE YOU CURRENTLY ALSO AN OFFICER OF LIBERTY 23 LOBBY, INCORPORATED? 24 A YES. 25 Q AND WHAT POSITION DO YOU HOLD AS AN OFFICER 26 CURRENTLY? 27 A I'M TREASURER. 28 Q AND ANY OTHER OFFICE?
page357 1 A I'M CHIEF EXECUTIVE OFFICER. 2 Q AND ALSO A DIRECTOR, CORRECT? 3 A YES. 4 Q HOW LONG HAVE YOU BEEN A C.E.O. OF LIBERTY LOBBY, 5 INC.? 6 A SINCE 1955. 7 Q AND HOW LONG HAVE YOU BEEN A DIRECTOR ON THE BOARD 8 OF LIBERTY LOBBY, INC.? 9 A SINCE 1955. 10 Q SIR, IS LIBERTY LOBBY INDEBTED TO VIBET? 11 MR. WAIER: OBJECTION. LACKS FOUNDATION. RELEVANCY. 12 THE COURT: OVERRULED. 13 THE WITNESS: NOT TO MY KNOWLEDGE. 14 15 BY MR. BEUGELMANS: 16 Q SIR, WOULD YOU PLEASE TURN TO EXHIBIT 84 IN FRONT 17 OF YOU, SIR. 18 MR. WAIER: I DON'T HAVE A EXHIBIT 84 IN MY BOOK. 19 THE WITNESS: THERE’s NOTHING IN THERE. IT’s BLANK. 20 THIS IS BLANK. NO EXHIBIT HERE. 21 THE COURT: DO YOU WANT TO USE MY BOOK? 22 MR. BEUGELMANS: YOUR HONOR, LET ME USE MY BOOK SO YOU 23 CAN FOLLOW ALONG. MAY I APPROACH? 24 THE COURT: YES. 25 26 BY MR. BEUGELMANS: 27 Q SIR, THE PAGES OF EXHIBIT 84 HAVE BEEN NUMBERED. 28 AND PAGE NUMBER 1 IS A DOCUMENT ENTITLEDPROMISSORY NOTE.
page358 1 HAVE YOU EVER SEEN THIS DOCUMENT BEFORE, SIR? 2 A YES. I SIGNED IT. 3 Q AND DOES THAT NOTE EVIDENCE A LOAN IN THE SUM OF 4 $200,000 FROM VIBET CORPORATION TO LIBERTY LOBBY, INC.? 5 A YES. 6 MR. WAIER: OBJECTION. DOCUMENT SPEAKS FOR ITSELF. 7 THE COURT: OVERRULED. 8 THE WITNESS: YES. 9 10 BY MR. BEUGELMANS: 11 Q HAS THAT LOAN BEEN REPAID, SIR? 12 A NO. 13 Q PAGE 2 IS A DRAFT AMOUNT OF $200,000 PAYABLE TO 14 LIBERTY LOBBY, INC. DO YOU SEE THAT, SIR? 15 A YES. 16 Q DID LIBERTY LOBBY, INC., RECEIVE THE $200,000 17 REFLECTED IN EXHIBIT 2? 18 MR. WAIER: OBJECTION. LACKS FOUNDATION. 19 THE COURT: OVERRULED. 20 MR. WAIER: HEARSAY. 21 THE WITNESS: APPARENTLY, THIS IS — IS THE VOUCHER, 22 WHICH THIS NOTE OF DECEMBER 10, 1991 REFLECTS. 23 24 BY MR. BEUGELMANS: 25 Q THANK YOU, SIR. HAVE YOU EVER SEEN EXHIBIT 3 26 BEFORE, SIR? 27 A THAT’s MY SIGNATURE. 28 Q AND DID LIBERTY LOBBY, INC., IN FACT BORROW
page359 1 $200,000 FROM LIBERTY LOBBY, INC., ON THE DATE THAT THE NOTE 2 WAS MADE, JANUARY 3, 1992? 3 A YES. 4 Q HAS THAT NOTE BEEN REPAID, SIR? 5 A NO. 6 THE COURT: EXCUSE ME. YOU SAID EXHIBIT 3. YOU MEANT 7 PAGE 3. 8 9 BY MR. BEUGELMANS: 10 Q TURNING, SIR, TO PAGE 5, HAVE YOU EVER SEEN PAGE 5 11 BEFORE? 12 A YES. THAT’s MY SIGNATURE. 13 Q AND ON OR ABOUT FEBRUARY 3, 1992, DID LIBERTY 14 LOBBY, INC., BORROW $200,000 FROM VIBET CORPORATION? 15 A YES. 16 Q HAS THAT NOTE BEEN REPAID, SIR? 17 A NO. 18 Q TAKE A LOOK AT PAGE 7. HAVE YOU SEEN THAT 19 DOCUMENT BEFORE, SIR? 20 A YES. 21 Q IS THAT YOUR SIGNATURE? 22 A YES. 23 Q ON OR ABOUT MARCH 3, 1992, DID VIBET 24 CORPORATION — STRIKE THAT. 25 DID LIBERTY LOBBY, INC., BORROW $200,000 FROM 26 VIBET CORPORATION? 27 A APPARENTLY. 28 Q HAS THAT NOTE BEEN REPAID, SIR?
page360 1 A I DON'T THINK SO. 2 Q SIR, LOOKING AT PAGE 14, HAVE YOU SEEN PAGE 14 3 BEFORE? 4 A YES. 5 Q IS THAT YOUR SIGNATURE, SIR? 6 A YES. 7 MR. WAIER: WHAT PAGE? 8 MR. BEUGELMANS: PAGE 14. 9 10 BY MR. BEUGELMANS: 11 Q DID LIBERTY LOBBY, INC., BORROW $200,000 FROM 12 VIBET CORPORATION ON OR ABOUT APRIL 1, 1992? 13 A APPARENTLY. 14 Q HAS THAT DEBT BEEN REPAID? 15 A NO. 16 Q SIR, PAGES 8, 9, 10, 11, 12, AND 13 REFLECT 17 TRANSFERS OF MONEY FROM BANQUE CONTRADE LAUSANNE, TO LIBERTY 18 LOBBY, INC., ON VARIOUS DATES; IS THAT CORRECT? 19 MR. WAIER: OBJECTION. 20 THE WITNESS: ASSUMING THESE ARE COPIES, YES INDEED. 21 MR. BEUGELMANS: YOUR HONOR, I WOULD LIKE TO MAKE AN 22 OFFER OF PROOF. I DON'T KNOW IF THE COURT WANTS ME TO PULL 23 OUT THE VERIFICATIONS FROM MR. CARTO TO THE DOCUMENT. THIS 24 IS A DISCOVERY RESPONSE FROM LIBERTY LOBBY, INC., WE'RE 25 LOOKING AT. DOES THE COURT WANT ME TO INTRODUCE THE SIGNED 26 VERIFICATION INTO EVIDENCE? 27 THE COURT: WELL, I'M GOING TO WAIT UNTIL YOU ARE DONE 28 WITH THE CASE TO SEE IF THERE’s AN OBJECTION TO THE COPIES
page361 1 COMING IN. 2 3 BY MR. BEUGELMANS: 4 Q SIR, BEGINNING AT PAGE 16 OF EXHIBIT 84, THERE'S 5 SOME HANDWRITTEN NOTES THAT APPEAR TO BE AN ACCOUNTING OF 6 MONIES PAID. DO YOU SEE THAT, SIR? 7 A YES. 8 Q AND WERE THOSE PREPARED BY MR. HUTZEL, THE 9 ACCOUNTANT FOR LIBERTY LOBBY? 10 A THAT APPEARS TO BE HIS WRITING. 11 Q THROUGH PAGES 16 THROUGH 19 CONSTITUTE AN 12 ACCOUNTING OF THE SUMS THAT WERE PAID TO PURSUE THE FARREL 13 LITIGATION ABROAD? 14 A A GOOD PART OF IT. 15 Q AS WELL AS MONIES PAID IN NORTH CAROLINA, CORRECT? 16 A EXHIBIT 84, PAGE 16. YES. WELL, NO. THIS IS 17 RIDICULOUS. IT COSTS MORE THAN $138. MULLINAX AND 18 ALEXANDER PERFORMED MORE THAN $138, SO THIS ISN'T — THIS 19 IS NOT COMPLETE. 20 Q SIR, DO YOU RECALL A REQUEST BEING MADE TO YOU TO 21 PRODUCE AN ACCOUNTING OF THE MONIES SPENT BY WILLIS CARTO TO 22 PURSUE THE FARREL LITIGATION? 23 MR. WAIER: OBJECTION. RELEVANCY, VAGUE AND AMBIGUOUS 24 TO TIME. 25 THE COURT: OVERRULED. 26 THE WITNESS: THE REQUEST WAS TO ME PERSONALLY? 27 28
page362 1 BY MR. BEUGELMANS: 2 Q YES. 3 A YES. 4 Q AND DO YOU RECALL A REQUEST BEING MADE TO LIBERTY 5 LOBBY, INCORPORATED, TO PRODUCE ACCOUNTING OF MONEY SPENT IN 6 PURSUIT OF THE FARREL BEQUEST? 7 A YES. 8 Q ARE THE DOCUMENTS PAGE 17 THROUGH — PAGES 16 9 THROUGH 19 OF EXHIBIT 4 THE DOCUMENTS WHICH YOU PRODUCED IN 10 RESPONSE TO THOSE REQUESTS? 11 A WELL, I PRESUME. 12 Q THANK YOU, SIR. 13 I WOULD LIKE YOU TO TAKE A LOOK AT EXHIBIT 48. 14 HAVE YOU EVER SEEN EXHIBIT 48 BEFORE, SIR? 15 A NO. 16 Q HAVE YOU EVER SEEN EXHIBIT 49 BEFORE, SIR? 17 A NO. 18 Q DO YOU KNOW IF -- 19 MR. WAIER: WHAT EXHIBIT, EXHIBIT 48 AND 49? 20 MR. BEUGELMANS: I'M SORRY. I APOLOGIZE. PAGE 48 AND 21 49 OF EXHIBIT 84. I APOLOGIZE. 22 23 BY MR. BEUGELMANS: 24 Q SIR, DO YOU KNOW IF ON OR ABOUT THE DATE THAT 25 PAGE 48 WAS PREPARED, WHETHER OR NOT THE SUM OF $200,000 WAS 26 TRANSFERRED FROM THE VIBET, INC., ACCOUNT AT BANQUE CONTRADE 27 LAUSANNE TO AN ACCOUNT MAINTAINED BY FOUNDATION TO DEFEND 28 THE FIRST AMENDMENT?
page363 1 A WELL, YOU WILL HAVE TO — I MEAN, THE DOCUMENT 2 SPEAKS FOR ITSELF. I HAVE NO INDEPENDENT RECOLLECTION OF 3 THAT. 4 Q DO YOU HAVE ANY REASON TO BELIEVE THAT EXHIBIT 48 5 IS NOT A TRUE AND CORRECT COPY OF AN ORIGINAL DOCUMENT? 6 MR. WAIER: OBJECTION. LACKS FOUNDATION. 7 THE COURT: OVERRULED. 8 MR. WAIER: CALLS FOR SPECULATION ALSO, YOUR HONOR. 9 10 BY MR. BEUGELMANS: 11 Q DO YOU HAVE ANY REASON TO BELIEVE THAT PAGE 48 IS 12 ANYTHING OTHER THAN A TRUE AND CORRECT COPY OF AN ORIGINAL 13 DOCUMENT? 14 A NO. 15 Q EXHIBIT 49? 16 THE COURT: I THINK PAGE 49. 17 MR. BEUGELMANS: I'M SORRY. I KEEP MAKING THAT 18 MISTAKE. 19 20 BY MR. BEUGELMANS: 21 Q PAGE 49, MR. CARTO, REFLECTS A TRANSFER OF 22 $250,000 FROM THE BANQUE CONTRADE LAUSANNE ACCOUNT TO THE 23 F.D.F.A. DO YOU SEE THAT, SIR? 24 A YES. 25 MR. WAIER: OBJECTION. ASKING FOR THE WITNESS TO READ 26 FROM A DOCUMENT THAT’s NOT — AND ALSO TESTIFIED TO A 27 DOCUMENT NOT IN AS AN EXHIBIT. 28 THE COURT: OVERRULED.
page364 1 BY MR. BEUGELMANS: 2 Q DO YOU HAVE ANY REASON TO BELIEVE THAT EXHIBIT -- 3 PAGE 49 OF EXHIBIT 84 IS NOT A CORRECT COPY OF AN 4 AUTHENTICAL ORIGINAL DOCUMENT? 5 MR. WAIER: OBJECTION. LACKS FOUNDATION. RELEVANCY. 6 BEST EVIDENCE. 7 THE COURT: OVERRULED. 8 THE WITNESS: NO. 9 10 BY MR. BEUGELMANS: 11 Q SIR, BY THE WAY, THE F.D.F.A. AT ALL RELEVANT 12 TIMES HAD ITS OFFICES IN THE SAME BUILDING AS LIBERTY LOBBY, 13 CORRECT? 14 A YES. 15 Q AND IT’s IN FACT A BUILDING WHICH ONE TIME WAS 16 OWNED BY LIBERTY LOBBY. THE ONLY TENANT OF THAT BUILDING 17 HAS BEEN LIBERTY LOBBY AND F.D.F.A., CORRECT? 18 A NO. 19 Q AS OF 1991, WAS F.D.F.A. A TENANT OF LIBERTY 20 LOBBY, INC.? 21 A YES. 22 Q AS OF 1990, WAS IT A TENANT? 23 A WELL, YOU SAY A TENANT OF LIBERTY LOBBY, INC. IT 24 WAS A TENANT OF THE BUILDING. 25 Q LET ME ASK THE QUESTION THIS WAY: FROM 1983 UP TO 26 TODAY, HAS THE FOUNDATION TO DEFEND THE FIRST AMENDMENT 27 MAINTAINED ITS PRINCIPAL PLACE OF BUSINESS, SOLE PLACE OF 28 BUSINESS AT THE LIBERTY LOBBY, INC., HEADQUARTERS,
page365 1 WASHINGTON, D.C.? 2 A YES. 3 Q AND IN FACT, AT NO TIME SINCE 1993 TO TODAY HAS 4 THE FOUNDATION TO DEFEND THE FIRST AMENDMENT HAD ANY 5 EMPLOYEES, CORRECT? 6 A WHAT’s AN EMPLOYEE? 7 Q DID YOU UNDERSTAND THE QUESTION WHEN I ASKED IN 8 YOUR DEPOSITION, SIR? 9 A PARDON? 10 Q DID YOU UNDERSTAND THAT QUESTION WHEN I ASKED IN 11 YOUR DEPOSITION? 12 MR. WAIER: OBJECTION. VAGUE AND AMBIGUOUS. LACKS 13 FOUNDATION. WHAT DEPOSITION? 14 THE COURT: SUSTAINED. 15 16 BY MR. BEUGELMANS: 17 Q DO YOU RECALL YOUR DEPOSITION BEING TAKEN ON 18 OCTOBER 17, 1995 IN THIS CASE? 19 A YES. I'M SIMPLY ASKING FOR THE TECHNICAL 20 DEFINITION OFEMPLOYEEBEFORE I ANSWER THE QUESTION. 21 Q ON OCTOBER 17, 1995, WHETHER F.D.F.A. HAD ANY 22 EMPLOYEES. 23 A DO I RECALL ANSWERING THAT? 24 Q YES. 25 A I MAY HAVE ANSWERED IT WITHOUT REALLY KNOWING WHAT 26 IS IN YOUR MIND. IT HAS — LET’s SAY THIS F.D.F.A. HAS NO 27 PAYROLL. IT DOESN'T HAVE ANY EMPLOYEES WHO HAVE THEIR 28 WITHHOLDING TAX TAKEN OUT AND SOCIAL SECURITY AND THAT SORT
page366 1 OF THING. SO IF THAT’s WHAT YOU MEAN BY EMPLOYEES, THEN IT 2 HAS NO EMPLOYEES. 3 Q SIR, PLEASE LOOK AT PAGE 50 OF EXHIBIT 84. 4 A YES. 5 Q HAVE YOU EVER SEEN PAGE 50 BEFORE? 6 A NO. 7 Q DO YOU RECOGNIZE THE SIGNATURE ON PAGE 50? 8 A I RECOGNIZE THE NAME. 9 Q WHO IS THAT? 10 A THE NAME IS BILL SWEET. 11 Q BY THE WAY, DID YOU LOOK AT THE PRODUCTION OF 12 DOCUMENT RESPONSE BEFORE YOU SIGNED THE VERIFICATION? 13 MR. WAIER: OBJECTION. LACKS FOUNDATION THAT A 14 VERIFICATION WAS SIGNED BY MR. CARTO. 15 MR. BEUGELMANS: MAY I GET THE VERIFICATION? 16 THE COURT: PARDON? 17 MR. BEUGELMANS: DOES THE COURT WANT ME TO GET THE 18 VERIFICATION NOW? I CAN DIG IT UP. THANK YOU. 19 (PAUSE) 20 YOUR HONOR, IF I CAN MAKE AN OFFER OF PROOF, I 21 HAVE IT SOMEWHERE IN THE MASSIVE FILES. I WILL FIND IT AT A 22 BREAK AND GIVE TO THE COURT. 23 MR. WAIER: I OBJECT. LACKS FOUNDATION. HE’s ASKING 24 THE WITNESS -- 25 THE COURT: HE’s GOING TO ANOTHER QUESTION, COUNSEL. I 26 DON'T NEED TO HEAR ARGUMENT ON SOMETHING NOT IN FRONT OF 27 ME. 28
page367 1 BY MR. BEUGELMANS: 2 Q MR. CARTO, DO YOU KNOW HOW MUCH F.D.F.A. RECEIVED 3 FROM THE VIBET ACCOUNT AT BANQUE CONTRADE LAUSANNE SINCE 4 THAT ACCOUNT WAS FIRST OPENED? 5 MR. WAIER: OBJECTION. CALLS FOR HEARSAY. LACKS 6 FOUNDATION. 7 THE COURT: OVERRULED. 8 THE WITNESS: NO. 9 10 BY MR. BEUGELMANS: 11 Q SIR, DID YOU BORROW THE MONEY FROM LIBERTY LOBBY, 12 INC., THAT WAS USED TO PROSECUTE THE FARREL LITIGATION? 13 MR. WAIER: OBJECTION. ASKED AND ANSWERED. 14 THE COURT: SUSTAINED. 15 16 BY MR. BEUGELMANS: 17 Q SIR, DID YOU GIVE LIBERTY LOBBY, INC., ANY TYPE OF 18 COLLATERAL FOR THE LOANS THAT LIBERTY LOBBY ALLEGEDLY MADE 19 TO WILLIS CARTO? 20 MR. WAIER: OBJECTION. RELEVANCY. 21 THE COURT: OVERRULED. 22 THE WITNESS: NO. 23 24 BY MR. BEUGELMANS: 25 Q AND WITH RESPECT TO THE MONEY THAT WAS ALLEGEDLY 26 BORROWED FROM F.D.F.A. BY WILLIS CARTO TO PURSUE THE FARREL 27 LITIGATION, DID YOU GIVE F.D.F.A. ANY COLLATERAL? 28 A NO.
page368 1 MR. WAIER: OBJECTION. LACKS FOUNDATION. RELEVANCY. 2 THE COURT: OVERRULED. 3 4 BY MR. BEUGELMANS: 5 Q AND IN FACT, SIR, AS OF 1985, YOU PERSONALLY OWNED 6 NO ASSETS, CORRECT? 7 A AS OF 1985, I PERSONALLY OWNED NO ASSETS? 8 Q IS THAT CORRECT, SIR? 9 A WELL, I HAVE ASSETS. 10 Q AS OF 1985, WERE YOU RECEIVING A SALARY FROM ANY 11 SOURCE? 12 A NO. 13 Q AS OF 1985, SIR, DID YOU OWN ANY REAL PROPERTY? 14 A NO. 15 Q AS OF 1985, SIR, DID YOU OWN A CAR? 16 A NO. 17 Q DID YOU OWN ANY STOCKS OR BONDS? 18 A NO. 19 MR. WAIER: OBJECTION. RELEVANCY TO THIS LINE OF 20 QUESTIONING TO WHAT ASSETS MR. CARTO HAD. 21 THE WITNESS: EXCUSE ME. SO YOU DON'T — IN 1985, I 22 THINK I DID OWN SOME STOCK, YES. 23 24 BY MR. BEUGELMANS: 25 Q DID YOU PLEDGE THAT STOCK AS COLLATERAL? 26 A NO, I DID NOT. 27 Q DO YOU KNOW THE APPROXIMATE VALUE OF THAT STOCK IN 28 1985?
page369 1 A WELL, IT WAS IN THE LOW FIVE FIGURES. 2 Q BETWEEN THE TIME THAT JEAN FARREL DIED IN 1985 AND 3 SEPTEMBER — STRIKE THAT. 4 BETWEEN THE TIME JEAN FARREL DIED IN 1985 AND THE 5 DATE THAT THE SETTLEMENT AGREEMENT WAS ENTERED INTO 6 CONCERNING THE FARREL ESTATE IN SWITZERLAND, DID YOU OWN ANY 7 REAL PROPERTY? 8 A NO. 9 Q DID YOU OWN ANY STOCKS OR BONDS OTHER THAN THE 10 ONES YOU MENTIONED BEFORE THAT WERE WORTH LESS THAN $100,000? 11 A NO. 12 Q DID YOU OWN ANY REAL PROPERTY? 13 A NO. 14 Q DID YOU OWN ANY OTHER TANGIBLE ASSETS WHATSOEVER? 15 A YES. 16 Q WHAT OTHER ASSETS? 17 MR. WAIER: OBJECTION. RELEVANCY. OFFER OF PROOF. 18 THE COURT: OVERRULED. 19 20 BY MR. BEUGELMANS: 21 Q BANK ACCOUNT, SIR? 22 A YES. 23 Q AND AT ANY TIME DURING THAT TIME FRAME, SIR, DID 24 YOU HAVE MORE THAN $25,000 IN AN ACCOUNT, AT THAT BANK 25 ACCOUNT? 26 MR. WAIER: OBJECTION. VIOLATES RIGHTS OF PRIVACY. 27 RELEVANCY. 28 THE COURT: SUSTAIN THE OBJECTION.
page370 1 BY MR. BEUGELMANS: 2 Q AT ANY TIME, SIR, BETWEEN THE DEATH OF JEAN FARREL 3 AND THE TIME THAT THE FARREL LITIGATION WAS SETTLED, DID YOU 4 OWN MORE THAN $25,000 IN CASH? 5 MR. WAIER: OBJECTION. RIGHTS OF PRIVACY. VAGUE AND 6 AMBIGUOUS. LACKS FOUNDATION. RELEVANCY. 7 THE COURT: OVERRULED IF HE HAD CASH RATHER THAN AN 8 ACCOUNT. 9 THE WITNESS: NO. I HAD BOOKS, CLOTHES, TYPEWRITER. 10 11 BY MR. BEUGELMANS: 12 Q IN 1985, YOU DIDN'T FILE A TAX RETURN, DID YOU? 13 MR. WAIER: OBJECTION. RELEVANCY. 14 THE COURT: SUSTAINED. 15 MR. BEUGELMANS: NOTHING FURTHER. THANK YOU. 16 THE COURT: DO YOU WISH TO ASK ANY QUESTIONS NOW OR 17 NOT? 18 MR. LANE: MAY WE HAVE A BRIEF RECESS? 19 THE COURT: OKAY. TAKE A BRIEF RECESS. 20 21 (PROCEEDINGS RECESSED.) 22 23 MR. WAIER: YOUR HONOR, WE WERE GOING TO RESERVE 24 QUESTIONS OF MR. CARTO UNTIL WE PUT ON OUR CASE IN CHIEF IF 25 THAT’s NECESSARY. 26 THE COURT: THAT’s PERFECTLY ALL RIGHT. 27 MR. CARTO, IF YOU WOULD LIKE TO STEP DOWN AND BE 28 WITH MR. LANE AND MR. WAIER, THAT’s FINE. WE STILL HAVE AN
page371 1 HALF HOUR. CAN WE CALL SOMEBODY ELSE? 2 MR. BEUGELMANS: AT THIS POINT, WHAT PLAINTIFF WOULD 3 PROPOSE TO DO IS READ ONE OF TWO DEPOSITIONS OF UNAVAILABLE 4 WITNESSES. THAT WOULD BE THE DEPOSITION OF MR. HARVEY 5 TAYLOR AND DEPOSITION OF MR. THOMAS KERR. 6 MR. WAIER: YOUR HONOR, THERE’s BEEN NO FOUNDATION LAID 7 FOR THE READING OF THESE DEPOSITIONS OR UNAVAILABILITY. 8 UNDER THE EVIDENCE CODE, THEY MUST SHOW THEIR 9 UNAVAILABILITY. THEY MUST SHOW THEY ATTEMPTED TO SUBPOENA 10 THE WITNESSES AND THAT THEY HAVE BEEN UNSUCCESSFUL IN 11 SUBPOENAING THE WITNESSES. THERE HAS TO BE A PROPER 12 FOUNDATION BEFORE THEY CAN READ NONPARTY TESTIMONY. 13 MR. BEUGELMANS: MAY I MAKE AN OFFER OF PROOF? 14 THE COURT: THAT’s THE LAW. YES. 15 MR. BEUGELMANS: WITH RESPECT TO MR. THOMAS KERR, THE 16 DEPOSITION WAS TAKEN IN MR. WAIER’s OFFICE. MR. KERR HAD 17 NEUROSURGERY SINCE THEN. HE WAS SUBPOENAED. I HAVE SPOKEN 18 TO HIM. MR. WEBER, WHO IS PRESENT -- 19 THE COURT: WHO IS PRESENT? 20 MR. BEUGELMANS: MR. WEBER IS PRESENT IN COURT, HAD 21 COMMUNICATIONS WITH HIM. I HAVE MR. KERR’s TELEPHONE NUMBER 22 AND THE CLERK CAN VERIFY MR. KERR IS PRESENTLY UNWELL. HE'S 23 UNDER SUBPOENA. I TOLD HIM IF HE HAD TO BRING HIM HERE, 24 POSSIBLY COULD BE ARRANGED SO WE COULD DRIVE HIM. BUT THE 25 COURT CAN VERIFY HE’s VERY, VERY ILL AT THIS TIME. SO IT'S 26 UP TO THE COURT. 27 MR. WAIER: WE COMMUNICATED WITH MR. KERR. 28 MR. KERR — I REPRESENTED MR. KERR IN ANOTHER ACTION IN
page372 1 THIS MATTER. HE’s WILLING TO TESTIFY. HE’s BEEN 2 SUBPOENAED. THE UNDERSTANDING WAS WHEN THEY WERE GOING TO 3 ATTEMPT TO CALL HIM, WE BE GIVEN PRIOR NOTICE. 4 MR. BEUGELMANS: I DON'T WANT TO ARGUE THE POINT. THEN 5 I ASK COUNSEL TO HAVE MR. KERR PRESENT TOMORROW AT 9:30 TO 6 QUESTION HIM. I DON'T WANT TO MAKE A SICK MAN — IN THAT 7 CASE, MR. TAYLOR, HARVEY TAYLOR RESIDES IN SACRAMENTO. HIS 8 DEPOSITION WAS TAKEN IN SACRAMENTO. IT’s — THE ORIGINAL 9 TRANSCRIPT IS LODGED WITH THE COURT. HE’s UNAVAILABLE 150 10 MILES FROM THE COURT. 11 THE COURT: HE’s ONLY UNAVAILABLE IF YOU SEND HIM MONEY 12 AND HE DIDN'T WANT TO RESPOND AND ALL SORTS OF THINGS. SO 13 IT DOESN'T SOUND LIKE TO ME YOU HAVE SHOWN HE'S 14 UNAVAILABLE. 15 MR. BEUGELMANS: YOUR HONOR, AGAIN, I CAN CONTACT HIM 16 AND MAYBE HE'LL COME DOWN. I DOUBT HE WILL. WE HAD TO GO 17 TO SACRAMENTO TO TAKE THE DEPOSITION. THEN RECESS TODAY TO 18 9 O'CLOCK TOMORROW MORNING AND PUT MR. KERR ON AND BRING 19 MR. TAYLOR DOWN. 20 THE COURT: ALL RIGHT. IS THERE ANY OTHER WITNESS WHO 21 IS IN THE COURTROOM WE CAN CALL? 22 MR. BEUGELMANS: YOUR HONOR, MR. WEBER IS PRESENT, BUT 23 I WOULD LIKE TO HAVE SOME TIME TO SPEAK TO HIM. I THOUGHT 24 THERE WOULD BE MORE EXAMINATION OF MR. CARTO TODAY. I'M NOT 25 REALLY PREPARED TO GO FORWARD WITH MR. WEBER THIS 26 AFTERNOON. IF THE COURT WANTS, I'LL GIVE IT A TRY. 27 THE COURT: GIVE IT A TRY. YOU KNOW YOUR CASE. 28 MR. BEUGELMANS: THANK YOU.
page373 1 THE COURT: TIME IS OUR STOCK AND TRADE AROUND HERE. 2 3 MARK EDWARD WEBER, 4 CALLED AS A WITNESS ON BEHALF OF THE PLAINTIFF, HAVING BEEN 5 FIRST DULY SWORN, TESTIFIED AS FOLLOWS: 6 DIRECT EXAMINATION 7 THE CLERK: PLEASE STATE YOUR FULL NAME AND SPELL YOUR 8 LAST FOR THE RECORD. 9 THE WITNESS: MARK EDWARD WEBER, W-E-B-E-R. 10 MR. BEUGELMANS: YOUR HONOR, MAY I TROUBLE THE COURT 11 FOR THE COURT’s COPY OF THE EXHIBITS. 12 THE COURT: UH-HUH. 13 14 BY MR. BEUGELMANS: 15 Q MR. WEBER, WHAT IS YOUR CURRENT EMPLOYMENT? 16 A I'M CURRENTLY AN EMPLOYEE OF THE LEGION FOR THE 17 SURVIVAL OF FREEDOM, INCORPORATED. 18 Q WHAT IS YOUR CAPACITY? 19 A I AM THE DIRECTOR OF THE I.H.R., OF THE INSTITUTE 20 FOR HISTORICAL REVIEW, AND I AM THE EDITOR OF ITS MAIN 21 PERIODICAL, THE JOURNAL OF HISTORICAL REVIEW. 22 Q ARE YOU CURRENTLY A MEMBER OF THE BOARD OF 23 DIRECTORS OF THE PLAINTIFF? 24 A YES, I AM. 25 Q WHEN WERE YOU FIRST A DIRECTOR, TO YOUR KNOWLEDGE? 26 A I BECAME A DIRECTOR IN 1995, I THINK. THE BOARD 27 NAMED ME AS THE DIRECTOR TO FILL THE VACANCY LEFT BY THE 28 RESIGNATION OF TOM MARCELLUS.
page374 1 Q HOW WOULD YOU — STRIKE THAT. 2 WERE YOU PRESENT AT A MEETING WHERE YOU WERE 3 ELECTED TO BE A DIRECTOR? 4 A YES, I WAS. 5 Q AND HOW LONG WERE YOU A DIRECTOR AFTER 1985 UNTIL 6 YOU CEASED BEING A DIRECTOR? 7 A OH, WELL, IN ADDITION TO THAT, THERE’s EVIDENCE 8 THAT I WAS SUPPOSEDLY A MEMBER OF THE BOARD OF DIRECTORS. 9 MR. WAIER: OBJECT. AND MOVE TO STRIKE AS BEING 10 NONRESPONSIVE. 11 THE COURT: SUSTAIN THE OBJECTION. 12 13 BY MR. BEUGELMANS: 14 Q SIR, HAVE YOU BEEN ADVISED — STRIKE THAT, BY 15 WILLIS CARTO YOU WERE DIRECTOR OF THE LEGION IN THE MID 16 1980'S? 17 A YES, I WAS. 18 Q AND WHEN DID MR. CARTO SO ADVISE YOU? 19 A IN 1986, I BELIEVE WILLIS CARTO PHONED ME AND 20 ASKED ME IF I WOULD BE WILLING TO SERVE AS A MEMBER OF THE 21 BOARD OF DIRECTORS. 22 Q AND DID YOU AGREE AT THAT TIME? 23 A I TOLD HIM THAT I TENTATIVELY AGREED AND I WISHED 24 HE WOULD CALL ME THE NEXT DAY AFTER I HAD SOME TIME TO THINK 25 ABOUT IT. HE DID THAT. AND THE NEXT DAY, I SAID I AGREED. 26 Q WHY DID YOU ASK FOR TIME TO THINK ABOUT IT? 27 A I WAS CONCERNED ABOUT ANY POSSIBLE LEGAL 28 COMPLICATIONS THAT MIGHT ARISE FROM THAT, WHAT MY
page375 1 RESPONSIBILITIES MIGHT BE. 2 Q DID YOU HAVE OCCASION TO CONSULT WITH AN ATTORNEY 3 BETWEEN THE FIRST AND SECOND TELEPHONE CALLS? 4 A YES, I DID. 5 Q THE FOLLOWING DAY, YOU ACCEPTED MR. Carto’s 6 PROPOSITION? 7 A I ACCEPTED HIS PROPOSITION, YES. 8 Q WERE YOU PRESENT AT A MEETING OF THE BOARD IN 1985 9 OR '86 WHERE YOU WERE ELECTED TO THE BOARD OF DIRECTORS? 10 A NO. 11 Q DID MR. CARTO INFORM YOU SOMETIME IN 1985 OR 1986 12 THAT YOU HAD, IN FACT, BEEN ELECTED A DIRECTOR? 13 A NO, I WAS NOT SO INFORMED. 14 Q DID YOU HEAR ANYTHING FURTHER FROM MR. CARTO IN 15 1985 TO 1986 TO THE EFFECT YOU HAD BECOME A MEMBER? 16 A NO, I WAS NOT SO INFORMED. 17 Q AND AT THAT TIME, MID 1980'S, WAS IT YOUR 18 UNDERSTANDING THAT YOU WERE, IN FACT, A DIRECTOR OF THE 19 LEGION? 20 A WILLIS CARTO ASKED ME IF I WOULD BE WILLING TO 21 SERVE. 22 MR. WAIER: OBJECTION. MOVE TO STRIKE AS BEING 23 NONRESPONSIVE. CALLS FORYESORNOANSWER. 24 THE COURT: OVERRULED. 25 THE WITNESS: WILLIS CARTO ASKED ME IF I WOULD BE 26 WILLING TO SERVE AS A MEMBER OF THE BOARD OF DIRECTORS. I 27 SAID I WOULD. THAT’s THE LAST I HEARD FROM WILLIS CARTO OR 28 ANYONE ELSE ABOUT THAT APPOINTMENT OR ABOUT THAT
page376 1 RELATIONSHIP UNTIL I WAS, MYSELF, NAMED A DIRECTOR IN 1995. 2 3 BY MR. BEUGELMANS: 4 Q SUBSEQUENT TO THE FURRS RESIGNING AS DIRECTORS IN 5 1993, DID YOU LEARN THAT ON PAPER YOU HAD, IN FACT, BEEN 6 DESIGNATED AS A DIRECTOR OF THE LEGION IN MID 1980? 7 MR. WAIER: OBJECTION. LEADING. ASSUMES FACTS NOT IN 8 EVIDENCE. 9 THE COURT: OVERRULED. 10 THE WITNESS: AFTER 1993, AFTER SEPTEMBER 1993, I SAW 11 WHAT PURPORTED TO BE MINUTES OF A BOARD MEETING IN 1986, 12 MARCH, AT WHICH I WAS SUPPOSEDLY ELECTED AS A MEMBER OF THE 13 BOARD OF DIRECTORS. AND I ALSO SAW WHAT PURPORTS TO BE 14 MINUTES OF A BOARD MEETING IN MARCH 1987 IN WHICH I'M 15 REFERRED TO AS A MEMBER OF THE BOARD BUT SUPPOSEDLY ABSENT 16 AT THE BOARD MEETING. 17 18 BY MR. BEUGELMANS: 19 Q IN EITHER 1986 OR 1987, DID YOU EVER ATTEND A 20 MEETING OF THE BOARD OF DIRECTORS OF THE LEGION FOR THE 21 SURVIVAL OF FREEDOM, INC., EITHER IN PERSON, TELEPHONICALLY, 22 OR OTHERWISE? 23 A NOT ONLY DID I NOT ATTEND ANY SUCH MEETING, I WAS 24 NOT INFORMED OF ANY MEETING OF THE BOARD OF DIRECTORS. 25 MR. WAIER: OBJECTION. MOVE TO STRIKE THAT PORTION 26 ABOUT INFORMED. NONRESPONSIVE. 27 THE COURT: OVERRULED. 28
page377 1 BY MR. BEUGELMANS: 2 Q SIR, PRIOR TO THE FURRS RESIGNING AS DIRECTORS IN 3 SEPTEMBER 1993, WHAT POSITIONS DID YOU HOLD WITH THE LEGION? 4 A I BEGAN WORKING FULL TIME FOR THE LEGION IN 5 JANUARY 1991. AND I WAS AN EDITOR AT THAT TIME, ASSOCIATE 6 EDITOR OF THE JOURNAL OF HISTORICAL REVIEW. I BELIEVE IN 7 APRIL 1992, I BECAME THE EDITOR, MAIN EDITOR OF THE JOURNAL 8 OF HISTORICAL REVIEW. THAT WAS MY MAIN POSITION AS OF 9 SEPTEMBER 1993 AS WELL. 10 Q WHAT WERE YOUR JOB RESPONSIBILITIES AS EDITOR? 11 A WELL, I WAS RESPONSIBLE FOR DECIDING WHAT WENT 12 INTO THE JOURNAL OF HISTORICAL REVIEW; OF COURSE, 13 MAINTAINING A RELATIONSHIP WITH THE VARIOUS CONTRIBUTORS OF 14 THE JOURNAL; ANSWERING CORRESPONDENCE. IN ADDITION, I ALSO 15 ANSWERED QUESTIONS OF JOURNALISTS. I CONDUCTED INTERVIEWS 16 ON BEHALF OF I.H.R. AND SIMILAR THINGS. 17 Q WHAT IS YOUR EDUCATIONAL BACKGROUND, SIR? 18 A I HOLD A BACHELOR’s DEGREE IN HISTORY WITH HIGH 19 HONORS FROM PORTLAND STATE UNIVERSITY IN PORTLAND, OREGON, 20 AND A MASTER’s DEGREE IN HISTORY FROM INDIANA UNIVERSITY, 21 BLOOMINGTON, INDIANA. 22 Q PRIOR TO SEPTEMBER 1993, HAD YOU EVER KNOWINGLY 23 BEEN A MEMBER OF THE BOARD OF DIRECTORS OF ANY INSTITUTION? 24 A NO. 25 Q DO YOU HAVE ANY FORMAL LEGAL TRAINING, SIR? 26 A NO FORMAL LEGAL TRAINING. 27 Q PRIOR TO SEPTEMBER 1993, DID YOU HAVE ANY 28 INVOLVEMENT IN MAINTAINING THE BANK ACCOUNTS OF THE LEGION?
page378 1 A PRIOR TO 19 — SEPTEMBER 1993, NO. 2 Q PRIOR TO SEPTEMBER 1993, DID YOU HAVE ANY 3 INVOLVEMENT WHATSOEVER IN TERMS OF THE LITIGATION INVOLVING 4 THE ESTATE OF JEAN FARREL? 5 A I THINK IT WAS IN 1992 I ASKED FIRST TOM MARCELLUS 6 ABOUT THE JEAN FARREL ESTATE. I HAD READ SOMETHING ABOUT IT 7 IN A NEWSPAPER THERE WAS ALREADY SOME PUBLIC NOTICE ABOUT. 8 MR. WAIER: OBJECTION. MOVE TO STRIKE AS 9 NONRESPONSIVE. ALSO NARRATIVE. 10 THE COURT: I THINK IT’s NONRESPONSIVE. I THINK YOU 11 CAN GO BIT BY BIT SO COUNSEL CAN OBJECT IF HE WISHES TO. 12 13 BY MR. BEUGELMANS: 14 Q MR. WEBER, WHEN DID YOU FIRST BECOME AWARE THERE 15 WAS SUCH A THING AS THE FARREL BEQUEST OR THE FARREL LEGACY, 16 IF YOU WILL? 17 A I BELIEVE IN 1992, PROBABLY THE SPRING OR SUMMER 18 1992. 19 Q HOW DID YOU BECOME AWARE OF THAT FACT, SIR? 20 A AS I RECALL, I SAW SOMETHING IN A NEWSPAPER 21 ARTICLE ABOUT IT. 22 MR. WAIER: OBJECTION. CALLS FOR HEARSAY. 23 THE COURT: OVERRULED. IT’s NOT WHETHER THIS ARTICLE 24 IS TRUE OR NOT. IT’s WHY SOMETHING IS IN HIS MIND. 25 BESIDES, HE’s NOT TELLING US WHAT IS IN THE ARTICLE. 26 27 BY MR. BEUGELMANS: 28 Q AFTER LEARNING THAT THERE WAS A FARREL BEQUEST
page379 1 WHAT, IF ANYTHING, DID YOU DO, SIR? 2 A WELL, I HAD CONCERN NOT JUST ABOUT THAT, BUT ALSO 3 BECAUSE I RECEIVED INQUIRIES FROM PEOPLE ABOUT THE FARREL 4 BEQUEST. 5 MR. WAIER: OBJECTION. MOVE TO STRIKE. 6 NONRESPONSIVE. 7 THE COURT: SUSTAIN THE OBJECTION. 8 9 BY MR. BEUGELMANS: 10 Q LET ME WITHDRAW THE QUESTION, MR. WEBER. PLEASE 11 JUST RESPOND TO THE QUESTION. WE'LL GET TO EVERYTHING. 12 IN YOUR CAPACITY AS AN EDITOR FOR THE I.H.R., DID 13 YOU HAVE OCCASION TO RESPOND TO MEMBERS OF THE PUBLIC OR THE 14 PRESS CONCERNING THE AFFAIRS OF THE LEGION? 15 A YES. 16 Q AND SOMETIME BEGINNING 1992, DID YOU RECEIVE 17 INQUIRIES FROM THE MEDIA CONCERNING THE SO-CALLED FARREL 18 LEGACY? 19 A EITHER MEDIA OR FROM SUPPORTERS OF THE I.H.R. WHO 20 ASKED ME ABOUT THIS. 21 Q WHEN YOU FIRST BEGAN RECEIVING SUCH INQUIRIES, 22 WHAT KNOWLEDGE, IF ANY, DID YOU HAVE CONCERNING THE FARREL 23 BEQUEST OTHER THAN WHAT YOU READ IN THE NEWSPAPER? 24 A I — PERHAPS NONE. PERHAPS I HAD HAD A 25 SUPERFICIAL CONVERSATION WITH ANOTHER MEMBER OF THE STAFF 26 ABOUT IT. BUT ESSENTIALLY, I KNEW NOTHING ABOUT IT AT THAT 27 TIME. 28 Q PRIOR TO SEPTEMBER 1993, DID YOU HAVE ANY
page380 1 DISCUSSIONS WITH WILLIS CARTO CONCERNING THE FARREL BEQUEST? 2 A YES. 3 Q DO YOU RECALL WHEN THE FIRST DISCUSSION WAS, SIR? 4 A PROBABLY IN SPRING OR SUMMER OF 1992. 5 Q DO YOU RECALL IF ANYBODY WAS PRESENT DURING THE 6 FIRST DISCUSSION WITH MR. CARTO CONCERNING THE FARREL 7 BEQUEST? 8 A YES. 9 Q WHO WAS PRESENT? 10 A TOM MARCELLUS. 11 Q ANYBODY ELSE? 12 A NO. 13 Q DO YOU RECALL WHAT MR. CARTO SAID, IF ANYTHING, 14 CONCERNING THE FARREL BEQUEST AT THAT MEETING IN 1992? 15 A YES. 16 Q WHAT DID HE SAY? 17 A AT FIRST, HE REFUSED TO ANSWER ANY QUESTIONS ABOUT 18 THE FARREL ESTATE. WHEN I POINTED OUT OR MENTIONED WHAT I 19 FELT WAS THE ABSURDITY OF KNOWING LESS ABOUT THE MATTER THAN 20 WHAT JOURNALISTS KNEW ABOUT IT, HE RELENTED A BIT AND HE 21 GAVE ONLY A VAGUE ANSWER ABOUT THE BEQUEST. HE WOULDN'T SAY 22 ANYTHING ABOUT THE AMOUNTS, AND ALL HE SAID WAS THAT WELL, 23 THERE’s MONEY COMING, BUT IT’s SORT OF TIED UP. 24 Q AFTER THAT, DID YOU HAVE ANY FURTHER DISCUSSIONS 25 WITH MR. CARTO CONCERNING THE FARREL BEQUEST? 26 A NOT THAT I RECALL. 27 Q PRIOR TO SEPTEMBER 1993, DID YOU HAVE ANY 28 CONVERSATIONS WITH EITHER LEWIS FURR OR LAVONNE FURR?
page381 1 A YES. 2 Q DID YOU DISCUSS WITH THEM THE FARREL BEQUEST? 3 A NOT SPECIFICALLY. 4 Q DID YOU EVER MENTION THE FARREL BEQUEST TO 5 LEWIS FURR PRIOR TO SEPTEMBER 1993? 6 A I HAD ONE TELEPHONE CONVERSATION WITH LEWIS FURR. 7 I THINK IT WAS IN EARLY SEPTEMBER 1993. WE SPOKE ABOUT 8 LEGION MATTERS, AND IT BECAME A KIND OF EMOTIONAL 9 CONVERSATION. WE MIGHT HAVE TALKED ABOUT THE FARREL 10 BEQUEST, BUT IT WAS A MORE GENERAL CONVERSATION ABOUT ISSUES 11 OF RESPONSIBILITY AND DIRECTION OF THE CORPORATION. 12 Q DURING THE CONVERSATION YOU HAD WITH MR. LEWIS 13 FURR IN SEPTEMBER OF 1993, DID MR. FURR INDICATE TO YOU 14 WHETHER OR NOT THE FARREL LITIGATION WAS SETTLED? 15 MR. WAIER: OBJECTION. LEADING. 16 THE COURT: OVERRULED ON THAT GROUND. 17 THE WITNESS: NO, HE DID NOT. 18 19 BY MR. BEUGELMANS: 20 Q PRIOR TO SEPTEMBER 1993, DID YOU HAVE ANY 21 DISCUSSIONS WITH LAVONNE FURR CONCERNING THE FARREL ESTATE? 22 A NO. 23 Q PRIOR TO SEPTEMBER 1993, DID YOU HAVE ANY 24 KNOWLEDGE FROM ANY SOURCE WHATSOEVER THAT THE LITIGATION 25 INVOLVING THE LEGION AND JOAN ALTHAUS CONCERNING THE FARREL 26 BEQUEST HAD BEEN SETTLED? 27 MR. WAIER: OBJECTION. RELEVANCY. CALLS FOR HEARSAY. 28 LACKS FOUNDATION.
page382 1 THE COURT: OVERRULED. 2 THE WITNESS: PRIOR TO SEPTEMBER 1993? 3 4 BY MR. BEUGELMANS: 5 Q YES, SIR. 6 A NO. 7 Q SIR, DID THERE COME A TIME WHEN YOU PERSONALLY 8 FORMED AN OPINION THAT WILLIS CARTO WAS PERHAPS EXERCISING 9 AN AUTHORITY OVER THE LEGION WHICH HE DID NOT LEGALLY HAVE? 10 MR. WAIER: OBJECTION. RELEVANCY. LACKS FOUNDATION. 11 THE COURT: OVERRULED. 12 MR. WAIER: YOUR HONOR, MAY I BE HEARD ON THAT? 13 THE COURT: NO. 14 THE WITNESS: YES, I DID. 15 16 BY MR. BEUGELMANS: 17 Q WHEN WAS THAT SIR? 18 A THAT WAS ON APRIL 6, 1993. 19 Q WHAT WERE THE CIRCUMSTANCES OF YOU FORMING THAT 20 OPINION IN YOUR MIND? 21 A THERE WAS A VERY DRAMATIC EMOTIONAL MEETING THAT 22 TOOK PLACE ON THAT DAY AT WHICH I WAS PRESENT, WILLIS CARTO 23 WAS PRESENT, TOM MARCELLUS AND TED O’Keefe AND GREG RAVEN. 24 AT THAT MEETING, CARTO INSISTED THAT ALL DISCUSSION OR 25 DEALINGS WITH THE HOLOCAUST ISSUE WERE TO EVENTUALLY BE 26 REMOVED ENTIRELY FROM THE JOURNAL BY THE END OF THE YEAR. 27 AT THAT MEETING, CARTO WAS ASKED FOR THE BASIS OF — FOR 28 HIS AUTHORITY TO MAKE THAT DEMAND.
page383 1 WILLIS CARTO EMOTIONALLY SAID I'M AN AGENT OF THE 2 BOARD OF DIRECTORS. HE WAS THEN ASKED WHO WERE THE MEMBERS 3 OF THE BOARD OF DIRECTORS, AND CARTO ANGRILY SAID YOU DON'T 4 NEED TO KNOW THAT. AND HE REFUSED TO PROVIDE ANY FURTHER 5 INFORMATION ABOUT THE MEMBERSHIP OF THE BOARD OF DIRECTORS. 6 AND I FELT — AND SUBSEQUENTLY, WE DISCUSSED IT WITH 7 OTHERS. I FELT VERY STRONGLY THIS WAS ENTIRELY IMPROPER AND 8 WRONG AND ILLICIT. 9 MR. WAIER: OBJECTION. MOVE TO STRIKE THE LAST PORTION 10 AS TO WHAT THEY FELT AND THOUGHT AS NONRESPONSIVE AND 11 IMPROPER OPINION TESTIMONY. 12 THE COURT: OVERRULED. IT’s GOES TO WHY HE WOULD 13 REMEMBER THIS PARTICULAR DATE. IT’s NOT FOR THE TRUTH OF 14 THE MATTER. AND HIS OPINION DOESN'T MATTER, ONLY MATTERS 15 THAT HE HAD AN OPINION THAT WAS STRONGLY HELD AND THAT’s WHY 16 HE MIGHT REMEMBER SOMETHING. 17 18 BY MR. BEUGELMANS: 19 Q AS OF THE DATE OF THAT MEETING, APRIL 1993, WERE 20 YOU AWARE OF THE IDENTITY OF THE DIRECTORS OF THE LEGION? 21 A NO, I WAS NOT. 22 Q DID YOU UNDERSTAND THAT THE LEGION WAS A NONPROFIT 23 CORPORATION AT THAT TIME? 24 A YES, I UNDERSTAND THAT. 25 Q PRIOR TO SEPTEMBER 1993, HAD YOU EVER SEEN ANY 26 BYLAWS OF THE LEGION? 27 MR. WAIER: OBJECTION. LACKS FOUNDATION. RELEVANCY. 28 THE COURT: OVERRULED.
page384 1 THE WITNESS: I THINK SO. I SAW BYLAWS OF THE LEGION, 2 THE 1966 BYLAWS, PROBABLY SOMETIME IN THE SUMMER OR SPRING 3 OF 1993. BUT I CAN'T SAY FOR SURE. 4 5 BY MR. BEUGELMANS: 6 Q AND AM I CORRECT, SIR, THAT THE 1966 BYLAWS YOU 7 ARE REFERRING TO ARE EXHIBIT 3 IN THE BOOK IN FRONT OF YOU? 8 MR. WAIER: OBJECTION. LEADING. 9 THE COURT: OVERRULED. 10 THE WITNESS: THAT’s CORRECT. 11 12 BY MR. BEUGELMANS: 13 Q PRIOR TO THE LITIGATION BEING INITIATED IN THIS 14 LAWSUIT, HAD YOU EVER SEEN ANY OTHER BYLAWS, ALLEGED BYLAWS 15 OF THE LEGION? 16 A I SAW — AT SOME POINT, I SAW, I THINK, THE 17 BYLAWS THAT PRECEDED THESE. BUT I DON'T REMEMBER WHEN I 18 FIRST SAW THEM. 19 Q PRIOR TO SEPTEMBER 1993, DID YOU EVER INQUIRE FROM 20 LAVONNE FURR AS TO THE NATURE OF WILLIS Carto’s AUTHORITY 21 OVER THE LEGION? 22 A YES. 23 Q WHEN WAS THAT, SIR? 24 A I, ALONG WITH TOM MARCELLUS, WHO WAS — AND 25 OTHERS, SENT A LETTER TO LAVONNE AND LEWIS FURR ASKING OR 26 STATING OUR BELIEF THAT THERE WAS A PROBLEM ABOUT AUTHORITY 27 AND RESPONSIBILITY WITH THE CORPORATION. 28 Q WHEN WAS THAT, SIR?
page385 1 A THERE WERE SEVERAL LETTERS. AND AS I RECALL, THEY 2 WERE ON OR ABOUT — IN AUGUST 1993. 3 THE COURT: EXCUSE ME A MINUTE. I HAVE A CALL FROM 4 ANOTHER JUDGE WHO SAYS IT’s AN EMERGENCY. SHE’s ON THE CAR 5 PHONE. (PAUSE) SEE YOU TOMORROW AT 9:30. 6 7 (PROCEEDINGS RECESSED.) 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28