Including information about his associates
page 742
1 COURT OF APPEAL OF THE STATE OF CALIFORNIA
2 FOURTH APPELLATE DISTRICT
3 DIVISION ONE
4 ______________________________
)
5 LEGION FOR THE SURVIVAL OF )
FREEDOM, INC., ) DCA. NO. DO27959
6 )
PLAINTIFF AND ) FROM SAN DIEGO COUNTY
7 RESPONDENT, )
) HON. RUNSTON G. MAINO
8 VS. )
)
9 WILLIS CARTO, HENRY FISCHER, )
VIBET, INC., LIBERTY LOBBY, )
10 INC., ET. AL., )
)
11 DEFENDANTS AND )
APPELLANTS. )
12 ______________________________)
13
REPORTER’s APPEAL TRANSCRIPT
14
NOVEMBER 8, 1996
15
VOLUME 7
16
PAGES 742-908
17
18
APPEARANCES:
19
FOR THE PLAINTIFF AND JACQUES BEUGELMANS AND
20 RESPONDENT: THOMAS MUSSELMAN
1901 AVENUE OF THE STARS
21 CENTURY CITY, CA 90067
22 FOR THE DEFENDANTS AND PETER J. PFUND
APPELLANTS: 2382 S.E. BRISTOL
23 SUITE A
NEWPORT BEACH, CA 92660
24
25
26
BARBARA J. SCHULTZ, CSR, RPR
27 CSR NO. 8021
OFFICIAL REPORTER
28 VISTA, CALIFORNIA
page 743
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 8, 1996
15
APPEARANCES:
16
FOR THE PLAINTIFF: JACQUES BEUGELMANS AND
17 THOMAS MUSSELMAN
1901 AVENUE OF THE STARS
18 CENTURY CITY, CA 90067
19
20 FOR THE DEFENDANTS: WAIER AND URTNOWSKI
BY: RANDALL S. WAIER
21 1301 DOVE STREET
NEWPORT BEACH, CA 92660
22
23
FOR THE DEFENDANT MARK LANE
24 LIBERTY LOBBY, INC.: 300 INDEPENDENCE AVENUE, S.E.
WASHINGTON, D.C. 20003
25
26
BARBARA J. SCHULTZ, CSR, RPR
27 CSR NO. 8021
OFFICIAL REPORTER
28 VISTA, CALIFORNIA
page 744 1 VISTA, CALIFORNIA, NOVEMBER 8, 1996, DEPARTMENT 11: 2 3 THE COURT: BACK ON THE RECORD. MR. CARTO IS ON THE 4 STAND. 5 MR. LANE, ARE YOU GOING TO ASK SOME MORE 6 QUESTIONS? 7 MR. LANE: THANK YOU. 8 9 BY MR. LANE: 10 Q MR. CARTO, ARE YOU THE CONTROLLER OF LIBERTY 11 LOBBY? 12 A NO. 13 Q WHO IS THE CONTROLLER OF LIBERTY LOBBY? 14 A MR. BLAYNE, B-L-A-Y-N-E, HUTZEL, H-U-T-Z-E-L. 15 Q THAT HAD BEEN DISCLOSED TO THE PLAINTIFFS IN THIS 16 CASE? 17 A I'M SURE IT HAS. 18 Q HAVE THEY DEPOSED MR. HUTZEL? 19 A NO. 20 Q HAVE THEY SOUGHT TO DEPOSE MR. HUTZEL? 21 A NOT TO MY KNOWLEDGE. 22 Q HAVE YOU SECURED SOME INFORMATION FROM MR. HUTZEL 23 FOR YOUR TESTIMONY ABOUT THE DISTRIBUTION OF FUNDS? 24 A YES. 25 Q WHO ACTUALLY MADE THE DISTRIBUTION OF FUNDS FROM 26 THE ESTATE? WHO HAD THAT RESPONSIBILITY IN EUROPE? 27 A WELL, THAT WAS MR. ROLAND ROCHAT, R-O-C-H-A-T. 28 Q WHO RETAINED HIM?
page 745 1 A MR. FOETISCH. 2 Q DID MR. ROCHAT ACTUALLY BECOME INVOLVED IN THE 3 DISTRIBUTION? 4 A OH, YES. HE WAS RESPONSIBLE FOR IT. 5 Q HAVE YOU ASKED MR. ROCHAT FOR AN ACCOUNTING 6 REGARDING THE DISTRIBUTION? 7 A MR. FURR HAS. HE WROTE HIM AN INITIAL LETTER. 8 Q HAS THAT ACCOUNTING EVER BEEN RECEIVED? 9 A NO, IT HAS NOT. MATTER OF FACT, I BELIEVE 10 MR. FOETISCH ASKED HIM, TOO. 11 MR. BEUGELMANS: OBJECTION. CALLS FOR HEARSAY. 12 THE COURT: SUSTAINED. 13 14 BY MR. LANE: 15 Q HAVE YOU ASKED MR. FOETISCH TO ASK MR. ROCHAT FOR 16 AN ACCOUNTING? 17 A I'M NOT SURE IF I DID OR MR. FISCHER DID. HE WAS 18 REQUESTED, YES. 19 Q NOW, REGARDING FUNDS WHICH HAVE BEEN DISTRIBUTED 20 TO THE LEGION, WHAT IS THE BASIS OF YOUR KNOWLEDGE REGARDING 21 THOSE FUNDS? 22 A WELL, THE RECORDS THAT MRS. CARTO AND I HAVE 23 COLLECTED PRIMARILY LAST NIGHT OUT OF ALL THE LEGAL FILES 24 THAT WE HAVE. WE SPENT QUITE A BIT OF TIME GOING OVER IT. 25 Q LET’s GET INTO THE QUESTION OF THE BREAKDOWN OF 26 FUNDS WHICH WERE MADE, WHICH WERE YOUR SHARE — WHEN I SAY 27 “YOUR,” THE DISPUTED AMOUNT OF THIS CASE. DO YOU 28 UNDERSTAND WHAT I MEAN?
page 746 1 MR. BEUGELMANS: OBJECTION. 2 THE WITNESS: YES. 3 MR. LANE: BEG YOUR PARDON? 4 MR. BEUGELMANS: OBJECTION TO THE FORM OF THE QUESTION. 5 IT’s JUST A STATEMENT TO THE WITNESS. 6 THE COURT: OVERRULED. I THINK A QUESTION CAN BE A 7 QUESTION AND CAN FOCUS A WITNESS IN A PARTICULAR AREA. IT'S 8 NOT EVIDENCE. I ALWAYS KEEP THAT IN MIND. 9 10 BY MR. LANE: 11 Q HAVE YOU TRIED TO COMPILE — WITHDRAW THAT. 12 ARE ALL THE RECORDS AVAILABLE TO YOU? 13 A OH, NO. 14 Q WHERE ARE THE RECORDS? 15 A WELL, THANKS TO MR. WEBER, THEY'RE STILL IN THE 16 POSSESSION OF THE COSTA MESA POLICE. 17 Q BUT BASED UPON WHATEVER YOU HAVE BEEN ABLE TO PULL 18 TOGETHER, DO YOU — ARE YOU ABLE TO TESTIFY THIS MORNING 19 ABOUT WHAT HAPPENED — TO THE BEST OF YOUR KNOWLEDGE, WHAT 20 HAPPENED TO THE PART OF THE ESTATE WHICH IS YOUR SHARE? 21 A YES. 22 Q CAN YOU TELL US WHAT HAPPENED IN TERMS OF THE SUMS 23 OF MONEY THAT WERE EXPENDED? 24 A WELL, YES. 25 Q DID YOU MAKE ANY NOTES ABOUT THIS? 26 A YES. 27 Q WHEN DID YOU MAKE THE NOTES? 28 A THIS MORNING EARLY.
page 747 1 Q DO YOU HAVE THE NOTES WITH YOU? 2 A YES. 3 Q IS THAT NECESSARY FOR YOU TO CONSULT WITH THOSE 4 NOTES IN ORDER TO GIVE A SPECIFIC AND ACCURATE TESTIMONY? 5 A YES. 6 MR. LANE; ASK PERMISSION FOR HIM TO DO THAT. 7 THE COURT: YES. AND THE OTHER SIDE, PROBABLY NOT 8 HAVING SEEN THE NOTES, MAY COME UP AND SEE THEM. 9 MR. BEUGELMANS: THANK YOU. 10 11 BY MR. LANE: 12 Q I THINK THE COURT MEANT MR. BEUGELMANS CAN LOOK AT 13 IT WHILE YOU TESTIFY. 14 IS THAT THE COURT’s -- 15 THE COURT: YES, I THINK IT’s APPROPRIATE, SINCE 16 COUNSEL HAS NOT SEEN THIS BEFORE. 17 MR. LANE: ABSOLUTELY. WE DON'T OBJECT. I'M 18 SUGGESTING MR. CARTO CAN ANSWER THE QUESTION AND HAVE IT 19 FACE HIM. 20 THE COURT: YES, DEFINITELY. 21 MR. WAIER: MAY I SEE THAT, TOO, YOUR HONOR? 22 THE WITNESS: WHY DON'T WE MAKE A COPY. 23 THE COURT: OFF THE RECORD. 24 (OFF THE RECORD.) 25 THE COURT: BACK ON THE RECORD. 26 27 BY MR. LANE: 28 Q YOU TESTIFIED YESTERDAY TO EXPENSES WHICH WERE
page 748 1 TAKEN CARE OF IN ADVANCE OF THE SETTLEMENT; IS THAT CORRECT? 2 A YES, SIR. 3 Q NOW, I'M GOING TO ASK YOU ABOUT SUMS WHICH CAME 4 OUT OF THE SETTLEMENT AS EXPENSES. WERE THERE SUCH SUMS, IS 5 MY QUESTION. 6 A I'M NOT SURE I UNDERSTAND. 7 Q ALL RIGHT. I'M NOT ASKING YOU ABOUT ANY EXPENSES 8 THAT WERE INCURRED IN ADVANCE OF THE SETTLEMENT. I'M NOT 9 ASKING ABOUT THAT. I'M ONLY GOING TO ASK ABOUT EXPENSES 10 WHICH CAME OUT OF THE SETTLEMENT. 11 A I SEE. 12 Q WERE THERE SUCH SUMS? 13 A YES. 14 Q WHAT WERE THE SUMS — FIRST OF ALL, WHAT WAS THE 15 AMOUNT THAT WENT TO YOUR SHARE APPROXIMATELY? 16 A WELL, THE AMOUNT WAS APPROXIMATELY 7 AND A HALF 17 MILLION BEFORE EXPENSES -- 18 Q WHAT WERE THE EXPENSES? 19 A — AND DISBURSEMENTS. 20 ALTHAUS GOT AN EXECUTIVE’s FEE OF ONE MILLION 21 FRANCS, BREAKING DOWN TO ABOUT $300,000. AND THE FAMILY GOT 22 A MILLION DOLLARS. 23 Q WHAT FAMILY? 24 A MRS. FARREL’s — MISS FARREL’s FAMILY, 25 MRS. CHANCY’s FAMILY. 26 Q WHO IS MISS CHANCY? 27 A A NIECE OF MISS FARREL. 28 Q HOW MUCH DID SHE GET?
page 749 1 A THE FAMILY, I RECALL, GOT A MILLION. SO WE HAD TO 2 TAKE 450,000 OF THAT. 3 Q PAY THAT? 4 A WE HAD TO PAY THAT. 5 Q ALL RIGHT. 6 A MAURICE CRUCHON, A LAWYER REFERRED TO YESTERDAY, 7 200,000. 8 Q THIS IS FROM THE SETTLEMENT AMOUNT? 9 A THIS IS FROM — WELL, THIS IS TO REPAY WHAT HAD 10 ALREADY BEEN PAID. NO, I'M WRONG. IN THE CASE OF CRUCHON, 11 I BELIEVE THIS CAME DIRECTLY OUT OF THE SETTLEMENT, I 12 THINK. I THINK IT DID. IT CAME DIRECTLY OUT OF THE MONEY 13 THAT WE RECEIVED FROM -- 14 Q ANY OTHER SUM? 15 A OH, YES. THE OTHER SWISS LAWYERS, MORCIER-GENOUD, 16 VUILLEUMIER, AND THE OTHER SWISS LAWYERS AND SO ON, THAT 17 WOULD BE AT LEAST 300,000. NOW, THIS FIGURE IS HOOPER. 18 THAT IS MR. HOOPER OF LONDON, BIDDLE AND COMPANY, RECEIVED 19 125,000. I MUST POINT OUT WHEN THE CASE BEGAN, WHEN HE WAS 20 FIRST RETAINED, HE WORKED FOR ANOTHER FIRM CALLED PAYNE, 21 HICKS, WEBER OR SOMETHING LIKE THAT. THAT’s NOT HERE. I 22 CAN'T — MR. HUTZEL CAN'T FIND IT, BUT THAT WOULD HAVE TO 23 BE IN THE NEIGHBORHOOD OF 20,000 OR MORE. 24 THERE WAS A LOSS IN CAL FUTURES OF ABOUT HALF A 25 MILLION. 26 Q HOW DOES THAT WORK? 27 A WELL, THIS WAS A FUTURES THING IN LONDON. AND 28 PEOPLE THAT RUNNING IT WEREN'T TOO RESPONSIVE OR
page 750 1 RESPONSIBLE, AND THERE WAS A BIG LOSS IN THAT ACCOUNT. 2 MRS. CARTO WAS MUCH MORE FAMILIAR WITH — SHE CAN ANSWER 3 THAT IN GREATER DETAIL. 4 THERE WAS A LOSS IN EURO DISNEY WHICH HIT THE 5 SKIDS OVER THERE. THAT WAS A BIG DISNEYLAND PARK THAT WAS 6 BEING BUILT IN FRANCE, AND EVERYBODY WAS GETTING ON BOARD 7 AND THE PRICE WENT WAY UP. AND THEN IT TURNED OUT TO BE A 8 BUST, AND THEY — THE SHARES WENT IN THE TANK. WE LOST 9 ABOUT 54,000 ON THAT. THERE WAS A DOCTOR TRIEBEL IN 10 GERMANY, 25,000. 11 Q WHO IS DOCTOR TRIEBEL? 12 A A LAWYER. 13 THERE WAS A MAN IN SINGAPORE, A FIRM, MUTHN, 14 ARUSU, AND ALSO IN JAPAN. THAT COST MINIMUM OF $50,000. 15 THERE WAS AN EXPEDITOR WE HAD TO USE WHO COST $800,000. 16 I'LL BE HAPPY TO EXPLAIN THAT IN DETAIL. THERE WAS 17 REPAYMENT OF EXPENSES FOR MRS. CARTO FOR 20,000; 18 MR. FISCHER, 250,000; THE I.H.R., INCLUDING THE PAYMENTS TO 19 MARCELLUS AND MRS. FURR, 760,000; LIBERTY LOBBY, 2,650,000; 20 FOUNDATION TO DEFEND THE FIRST AMENDMENT, 500,000. 21 THE COURT: WAIT A SECOND. 22 GO AHEAD, SIR. 23 THE WITNESS: THEN THE FOUNDATION TO DEFEND THE FIRST 24 AMENDMENT, 500,000; AND THE FOUNDATION FOR ECONOMIC LIBERTY, 25 350,000. AND THE TOTAL IS 7,334,000. 26 27 BY MR. LANE: 28 Q WHO WAS THE EXPEDITOR?
page 751 1 A THE EXPEDITOR WAS A GENTLEMAN WHO IS A RETIRED 2 BANKER IN SWITZERLAND WHO HAD — WHO IS VERY, VERY WELL 3 KNOWN, VERY INFLUENTIAL AND SYMPATHETIC TO WHAT — WHAT WE 4 WERE DOING. AND HE REQUIRED CONSIDERABLE EXPENSES, MADE A 5 LOT OF CONTACTS. AND THIS MONEY WAS — I'LL BE HAPPY TO 6 EXPLAIN THIS TO THE JUDGE IN CAMERA AND IN COMPLETE DETAIL. 7 THE COURT: I'LL DECLINE THAT OFFER. 8 MR. LANE: BEG PARDON? 9 THE COURT: I'LL DECLINE THAT OFFER. 10 THE WITNESS: I MUST POINT OUT WHEN YOU ARE DEALING IN 11 OTHER COUNTRIES, IT’s THE — IT’s SORT OF BASED ON 12 FRIENDSHIP, REALLY. SWITZERLAND IS A CLOSE COUNTRY. 13 EVERYBODY KNOWS EVERYBODY ELSE AND THEY DON'T LIKE 14 FOREIGNERS. 15 16 BY MR. LANE: 17 Q WERE YOU ABLE TO SETTLE THE ESTATE WITHOUT THE 18 EXPEDITOR? 19 A ABSOLUTELY NOT. 20 Q AND AFTER THE EXPEDITOR CAME IN? 21 A EVERYTHING FELL INTO PLACE MAGICALLY. 22 Q WHO RETAINED THE EXPEDITOR? 23 A MR. FISCHER. 24 Q WAS HE RECOMMENDED BY ONE OF THE ATTORNEYS? 25 A NO. WELL, LET’s SAY ALL OF THE ATTORNEYS KNEW 26 HIM. AND MATTER OF FACT, HE WAS VERY WELL KNOWN. 27 MR. FISCHER KNEW HIM, HAD CONTACTS WITH HIM. 28 Q DID YOU GET EVEN ONE PENNY OF THAT $800,000?
page 752 1 A NO. 2 Q YESTERDAY YOU TALKED ABOUT SUMS OF MONEY THAT WENT 3 THROUGH LIBERTY LOBBY TO SUN RADIO. DO YOU RECALL THAT 4 TESTIMONY? 5 A YES, SIR. 6 Q WAS SUN RADIO IN EXISTENCE BEFORE THE FARREL 7 ASSETS WERE SETTLED? 8 A OH, YES. 9 Q WHAT WAS SUN RADIO DOING? 10 A WELL, THE SAME THING IT DID. IT WAS — IT WAS A 11 PROJECT OF LIBERTY LOBBY’s LASTING OVER MANY YEARS. THE 12 FARREL MONEY WAS EXTREMELY HELPFUL IN PERPETUATING AND 13 MAKING THAT PROJECT GROW. IT WAS EXTREMELY EXPENSIVE. WE 14 TRIED TWO STOCK OFFERINGS. THERE WERE — AT LEAST $200,000 15 HAD TO GO TO UNDERWRITERS AND TO WALL STREET LAWYERS, S.E.C. 16 LAWYERS. THERE WAS — IT WAS A VERY EXPENSIVE 17 PROPOSITION. 18 I WOULD BE VERY HAPPY TO EXPLAIN THE WHOLE PROJECT 19 IN DETAIL, HOW MUCH IT COST AND TO SHOW JUST WHAT PART THE 20 VIBET OR THE FARREL MONEY PLAYED IN THIS EFFORT, WHICH 21 EVENTUALLY BANKRUPTED. BUT ON THE OTHER HAND, I FEEL THAT 22 IT WAS WORTH THE — WORTH THE EFFORT, ALTHOUGH IT WAS A 23 CONSIDERABLE LOSS. 24 Q WAS LIBERTY LOBBY AN OWNER OF SUN RADIO? 25 A NO. 26 Q WERE YOU AN OWNER OF SUN RADIO? 27 A NO. 28 Q DID YOU HAVE ANY PERSONAL FINANCIAL INTEREST IN
page 753 1 SUN RADIO? 2 A NO. 3 Q DID LIBERTY LOBBY HAVE A FINANCIAL INTEREST IN SUN 4 RADIO? 5 A NO. LIBERTY LOBBY JUST MADE A LOT OF LOANS TO IT. 6 Q WHAT IS KAYLA, K-A-Y-L-A? 7 A K-A-Y-L-A, WAS THE INCARNATION OF THE SUN RADIO 8 NETWORK BEFORE IT WENT BANKRUPT. AT THAT TIME, IT WAS 9 PURCHASED BY SOUND COMMUNICATIONS, INCORPORATED, A FLORIDA 10 CORPORATION. KAYLA WAS IN WISCONSIN AND IT WAS CONTINUED 11 UNDER SUN, ETC. ETC. 12 Q SO THE VIBET MONEY WAS NOT THE ONLY SOURCE OF 13 SUPPORT FOR SUN RADIO; IS THAT CORRECT? 14 A BY NO MEANS. WE CONDUCTED MANY FUND-RAISING 15 CAMPAIGNS FOR THE PERPETUATING OF THIS CONCEPT. 16 Q WAS SUN RADIO USED IN ANY FASHION TO ADVANCE THE 17 PROGRAM OF THE LEGION? 18 A YES, INDEED. 19 Q WHAT RESPECT? 20 A WELL, SUN RADIO NETWORK WAS A TALK RADIO NETWORK. 21 ALL THE SHOWS WERE TALK SHOWS. THERE WAS NO MUSIC, NOTHING 22 ELSE. AND EVERY TALK SHOW WAS ON A DIFFERENT SUBJECT. 23 THERE WAS A LAWN AND GARDEN SHOW, A HOUSEHOLD SHOW, A PET 24 SHOW. THERE WAS SOME POLITICAL SHOWS, AMONG WHICH WAS RADIO 25 FREE AMERICA SPONSORED BY LIBERTY LOBBY AND TOM VALENTINE, 26 THE HOST. 27 AND AS SUCH, WHY, HE, AT MY SUGGESTION, GAINED 28 INTERVIEWS WITH NUMEROUS PERSONS ASSOCIATED WITH THE
page 754 1 INSTITUTE FOR HISTORICAL REVIEW, INCLUDING SUCH PERSON NAMES 2 AS DAVID IRVING AND ROBERT FORSAN (PHONETICS), AND JIM 3 MARTIN, BRADLEY SMITH AND EVEN — EVEN WEBER. THIS WAS -- 4 THIS WAS DONE AND NOT ONLY PUBLICIZED THE EFFORTS OF THE 5 INSTITUTE FOR HISTORICAL REVIEW, BUT ALSO POPULARIZED THE 6 CAUSE AND BROUGHT IN SUPPORTERS. 7 Q WOULD YOU SAY THAT ONE OF THE REASONS FOR THE 8 UNHAPPY ENDING WHICH SUN RADIO FELL UPON WAS ITS PROMOTION 9 OF THE LEGION? 10 MR. BEUGELMANS: OBJECTION. RELEVANCE, YOUR HONOR. 11 THE COURT: WELL, I DON'T THINK IT HAS MUCH RELEVANCE, 12 BUT OVERRULE IT. IT MAY HAVE SOME. GO AHEAD. 13 14 BY MR. LANE: 15 Q THAT MEANS YOU CAN ANSWER. 16 A IT DID PLAY A FACTOR. YES, IT DID PLAY A FACTOR. 17 Q HOW DO YOU KNOW THAT? 18 A WELL, BECAUSE THERE WAS CONSIDERABLE POLITICAL 19 OPPOSITION BY VERY, VERY POWERFUL PRESSURE GROUPS WHO WERE 20 DETERMINED TO STOP LIBERTY LOBBY AND THE I.H.R. AND ME FROM 21 HAVING ACCESS TO RADIO. AND THERE WAS THIS OPPOSITION 22 EXTENDED TO ADVERTISING AGENCIES IN A WHOLE RADIO FIELD. WE 23 FOUND THE CARDS PRETTY WELL STACKED AGAINST US, IN ADDITION 24 TO THE OPPOSITION THAT ANY RADIO ENTERPRISE HAS IN THIS 25 HIGHLY, HIGHLY COMPETITIVE, DOG-EAT-DOG, COMPETITIVE WORLD 26 OF COMMERCIAL RADIO. 27 Q NOW, WHAT IS THE HISTORICAL EDUCATION FOUNDATION? 28 A HISTORICAL EDUCATIONAL FOUNDATION WAS SET UP IN
page 755 1 1963 BY ME. IT WAS A — A COMMITTEE, UNINCORPORATED 2 ASSOCIATION. I SET IT UP WITH THE AID OF DOCTOR -- 3 REVEREND DALE CRAWLY, WHO WAS A VERY — A WELL-KNOWN 4 BROADCASTER IN WASHINGTON, D.C., AND THE NEW — THE FATHER 5 FOR OVER 50 YEARS. HE WAS ACTIVE IN THE NATIONAL 6 FOUNDATION. THE NATIONAL FOUNDATION HAD A LONG, LONG 7 LAWSUIT WITH THE I.R.S. AND FINALLY ESTABLISHED THEIR RIGHT 8 TO — TO HAVE ACCOUNTS OR TO GET COMMITTEES THEY COULD TAKE 9 IN AS AN ACCOUNT OF THEIR OWN AND WOULD HAVE AUTOMATIC TAX 10 EXEMPTION, TAX DEDUCTIBILITY. SO THAT — SO DALE TOLD ME 11 ABOUT THAT, AND I SET UP THE HISTORICAL EDUCATION FOUNDATION 12 AS AN ADJUNCT TO THE FUND-RAISING EFFORTS OF THE INSTITUTE 13 FOR HISTORICAL REVIEW. 14 Q WHAT YEAR WAS THAT SET UP? 15 A I BELIEVE 1983. 16 Q I THINK YOU SAID '63 A MOMENT AGO. DID YOU MEAN 17 '83? 18 A OH, YES. I'M SORRY. THAT WAS WRONG. 19 Q DID LIBERTY LOBBY HAVE A TAX-EXEMPT STATUS? 20 A NO. 21 Q WHY? 22 MR. BEUGELMANS: OBJECTION. RELEVANCE. 23 THE COURT: SUSTAINED. 24 25 BY MR. LANE: 26 Q YOU HEARD MR. TAYLOR TESTIFY, DID YOU? 27 A YES. 28 Q AND YOU HEARD MR. TAYLOR TESTIFY HE HAD A MEETING
page 756 1 WITH ELISABETH CARTO? 2 A YES. 3 Q AND HE DOESN'T RECALL TALKING WITH YOU BY 4 TELEPHONE AFTER THAT; IS THAT HIS TESTIMONY? 5 A YES. 6 Q DID YOU HAVE A CONVERSATION WITH HIM AFTER HE MET 7 WITH ELISABETH CARTO? 8 A WE CERTAINLY DID. I MET MISS CARTO AT THE 9 HACIENDA SOUTH OF L.A., WHICH ON THIS PARTICULAR DAY, THIS 10 EVENING, I WAS COMING IN FROM WASHINGTON. WE WERE GOING 11 NORTH AND WE WERE PLANNING TO STAY THAT NIGHT. MRS. CARTO 12 MET MR. TAYLOR, HAD A LENGTHY CONVERSATION OVER DINNER. 13 MR. BEUGELMANS: OBJECTION TO ANY CONVERSATIONS 14 ALLEGEDLY — ANY COMMUNICATIONS MADE BY MRS. CARTO TO 15 MR. CARTO. THERE’s BEEN AN ASSERTION OF SPOUSAL PRIVILEGE. 16 IF IT’s WAIVED ON ANY CONVERSATION THAT MR. AND MRS. CARTO 17 HAD CONCERNING CONVERSATIONS THAT MRS. CARTO HAD WITH 18 MR. TAYLOR, THEN IT WOULD BE A COMPLETE WAIVER. WE RECALL 19 MRS. CARTO TO THE STAND. 20 MR. LANE: WAIT A MINUTE. 21 THE COURT: HE HASN'T TOLD US THE CONVERSATION YET. 22 MR. LANE: YES, I UNDERSTAND. 23 THE COURT: UNTIL YOU ASK, HE WON'T. 24 MR. LANE: I WON'T ASK. I DON'T THINK A WAIVER OF ONE 25 CONVERSATION IS A COMPLETE WAIVER FOR ANYTHING ELSE, IN ANY 26 EVENT. THAT’s BASIC. 27 THE COURT: I AGREE WITH YOU. 28
page 757 1 BY MR. LANE: 2 Q HAVE YOU FINISHED THE ANSWER? 3 A I DON'T BELIEVE I GOT TO IT. 4 Q REMEMBER, I DID NOT ASK YOU ABOUT THE 5 CONVERSATION. 6 A DID YOU ASK ME DID I HAVE A CONVERSATION WITH 7 MR. TAYLOR? WAS THAT THE QUESTION? 8 Q AFTER HE MET WITH YOUR WIFE. 9 A I DID. SHE CHECKED INTO THE ROOM. I WENT TO THE 10 ROOM. SHE TOLD ME OF HER MEETING MR. TAYLOR AT THE AIRPORT, 11 AT THE MOTEL. I GOT THE NUMBER OF HIS ROOM. I CALLED HIM. 12 WE HAD A — AT LEAST A HALF-HOUR CONVERSATION. I FILLED 13 HIM IN TOTALLY AND COMPLETELY WITH EVERYTHING THAT WAS 14 HAPPENING. 15 MR. BEUGELMANS: OBJECTION. HEARSAY TO ANY 16 CONVERSATION MR. CARTO HAD WITH MR. TAYLOR. 17 THE COURT: PROBABLY IS HEARSAY. 18 MR. LANE: REBUTTING THE TESTIMONY. 19 THE COURT: IS IT GOING TO IMPEACH MR. TAYLOR? 20 MR. LANE: RIGHT. 21 THE COURT: OVERRULED. 22 MR. BEUGELMANS: MR. TAYLOR HAS BEEN EXCUSED. HE WAS 23 EXCUSED COMPLETELY, NOT SUBJECT TO RECALL. AT THIS POINT, 24 THIS IS IMPROPER USE OF IMPEACHMENT. THEY SHOULD -- 25 MR. TAYLOR IS NOT EXCUSED. HE HAS TO BE HERE. 26 THE COURT: THAT’s NOT MY UNDERSTANDING OF THE LAW. 27 WHEN THE WITNESS IS EXCUSED, IF THERE’s ANOTHER WITNESS THAT 28 SAYS WE DIDN'T SAY THAT, I THINK HE CAN TESTIFY AND I MAKE A
page 758 1 DETERMINATION TO WHO I BELIEVE, OR IF I CAN'T BELIEVE 2 ANYBODY OR BELIEVE BOTH, BUT THEY'RE BOTH WRONG, IT GOES 3 INTO THE MATRIX. 4 5 BY MR. LANE: 6 Q PLEASE CONTINUE ABOUT THE CONVERSATION WITH 7 MR. TAYLOR. 8 A I GAVE MR. TAYLOR A COMPLETE RUNDOWN OF WHAT WAS 9 GOING ON. I WAS GLAD TO BE ABLE TO TALK TO HIM AFTER 10 BECAUSE HE HADN'T HAD A CHANCE TO TALK TO ME. HE WAS 11 EXTREMELY BUSY, DIFFICULT TO GET BECAUSE HE WAS ALWAYS 12 RIDING AROUND IN AIRPLANES. AND CONTRARY TO WHAT HE SAYS, I 13 DID TALK TO HIM. I DID EXPLAIN TO IT. HE DOESN'T REMEMBER 14 IT. I'M SURE IF HE REFLECTS ON IT, HE'LL FINALLY -- 15 FINALLY REALIZE INDEED WE DID DISCUSS THIS. 16 Q WHAT DID YOU DISCUSS WITH HIM? 17 A I TOLD HIM ABOUT THE FARREL — THE EFFORTS TO 18 RECOVER THE FARREL FUNDS AT THAT TIME AND THERE WOULD BE 19 SOMETHING COMING — THERE WOULD BE SOME GOOD FUNDING COMING 20 TO THE LEGION. AND HE WAS VERY PLEASED. HE ASKED A FEW 21 QUESTIONS. AND HE HAD NOT HEARD ABOUT THIS BEFORE, 22 APPARENTLY. I'M SURE HE HADN'T. 23 Q I THINK MR. TAYLOR TESTIFIED, MR. CARTO, THAT IF 24 YOU HAD MENTIONED SOMETHING LIKE 7 AND A HALF MILLION 25 DOLLARS, HE WOULD HAVE REMEMBERED IT. DID YOU MENTION THAT 26 FIGURE? 27 A NO, I DID NOT. 28 Q WHAT DID YOU SAY ABOUT IT?
page 759 1 A I DIDN'T SAY I DIDN'T — AT THAT TIME, I DIDN'T. 2 EVERYTHING WAS IN FLUX. I HAD NO IDEA WE WERE GOING — THAT 3 WE WERE GOING TO MAKE A RECOVERY AT ALL. HE TOLD ME THAT HE 4 SAID THAT’s FINE. HE SAID YOU GO AHEAD, AS LONG AS WE ARE 5 GETTING SOMETHING OUT OF IT, I WILL BACK YOU OBVIOUSLY. 6 Q WERE YOU THE PERSON RESPONSIBLE FOR ENTERING INTO 7 THE SETTLEMENT FOR YOUR SHARE, WHICH I ALREADY DEFINED AS 8 THE CONTROVERSY IN THIS CASE FOR YOUR SHARE OF THE FARREL 9 ASSETS? 10 A YES, SIR. 11 Q IF YOU WISHED TO ON THAT OCCASION, COULD YOU HAVE 12 REQUESTED THAT THAT SUM BE PLACED IN YOUR NAME ALONE? 13 A YES. 14 Q WAS THERE ANY WRITTEN DOCUMENT FROM MISS FARREL, 15 THROUGH WRITTEN OR ANY OTHER WRITTEN DOCUMENT, WHICH SAID 16 THAT THE NECA FUNDS WERE TO GO TO THE LEGION? 17 A NO. 18 Q WHY DIDN'T YOU HAVE THE FULL AMOUNT SETTLED IN 19 YOUR NAME ALONE? 20 A WELL, THERE ARE TWO REASONS. FIRST OF ALL, 21 BECAUSE I HAD A COMMITMENT TO MISS FARREL. I FELT THAT I 22 WAS THE TRUSTEE OF THESE FUNDS TO BE DISBURSED THE WAY SHE 23 WANTED THEM TO BE OR WOULD HAVE WANTED THEM TO BE. 24 SECONDLY, BECAUSE I WAS INSTRUCTED BY THE LEGION TO ACT IN 25 THAT MANNER. 26 Q WHEN YOU SETTLED THE FARREL ESTATE, IN YOUR NAME 27 AND IN THE NAME OF THE LEGION, WERE YOU AWARE OF THE FACT 28 THAT YOU HAD AN AGREEMENT WITH THE LEGION GIVING YOU
page 760 1 COMPLETE AUTHORITY TO DISTRIBUTE THE FUNDS HOWEVER YOU WISH? 2 A YES. 3 MR. BEUGELMANS: OBJECTION. CALLS FOR A LEGAL 4 CONCLUSION. SELF-SERVING. 5 THE COURT: OVERRULED. IT’s HIS OPINION. I CAN ACCEPT 6 OR REJECT IT. 7 8 BY MR. LANE: 9 Q DID YOU RELY UPON THAT AGREEMENT WITH THE LEGION 10 WHEN YOU BOTH PURSUED THE ESTATE, WHEN YOU SETTLED THE 11 ESTATE? 12 A YES. 13 Q IN THE NAME OF THE LEGION AND YOURSELF? 14 A YES. 15 Q NOW, YOU MAY RECALL THAT IN THE FIRST LETTER IN 16 EVIDENCE IN THIS CASE FROM MISS FARREL, SHE MADE REFERENCE 17 TO WANTING TO HELP YOU, WHICH, AS THE JUDGE POINTED OUT, SHE 18 SAID MEANING THE I.H.R. DO YOU RECALL THAT? 19 A YES. 20 Q HOW SOON WAS THAT AFTER YOU HAD MET HER 21 ORIGINALLY? 22 MR. BEUGELMANS: OBJECTION. IRRELEVANT, YOUR HONOR. 23 THE COURT: OVERRULED. 24 THE WITNESS: WELL, IT WAS SHORTLY — I CAN'T GIVE THE 25 EXACT TIME FRAME. 26 27 BY MR. LANE: 28 Q SINCE THAT TIME, DID ANYTHING CHANGE IN YOUR
page 761 1 RELATIONSHIP WITH MISS FARREL AND IN YOUR WIFE'S 2 RELATIONSHIP WITH MISS FARREL? 3 MR. BEUGELMANS: OBJECTION. RELEVANCE. 4 THE COURT: OVERRULED. 5 THE WITNESS: WELL, AS SHE LEARNED — AS TIME WENT BY, 6 SHE LEARNED MORE ABOUT LIBERTY LOBBY. I HEARD HER MAJOR 7 CONCERN WAS THE FEDERAL INCOME TAX, WHICH NOT ONLY SHE FELT 8 WAS UNCONSTITUTIONAL, BUT SHE HAD MANY PERSONAL ENCOUNTERS 9 WITH IT. THIS IS WHY SHE MOVED OUT OF THE COUNTRY. SHE 10 MOVED OUT OF THE COUNTRY BECAUSE OF THE 16TH AMENDMENT AND 11 THE WAY IT WAS EXECUTED BY THE — BY THE INTERNAL REVENUE 12 SERVICE, NOT BECAUSE OF ANY OTHER REASON. 13 THIS IS WHAT PRIMARILY OCCUPIED HER THINKING, WHAT 14 SHE WAS PRIMARILY CONCERNED ABOUT WHEN SHE LEARNED THAT 15 LIBERTY LOBBY WAS ONE OF THE — IN SOME RESPECTS, THE MAJOR 16 ANTAGONISTS OF THE I.R.S. IN WASHINGTON. WE HAD EXPENDED 17 COUNTLESS EFFORT AGAINST IT. SHE WAS VERY MUCH TAKEN WITH 18 THIS, AND SHE WANTED TO SUPPORT. 19 MR. BEUGELMANS: MOVE TO STRIKE. NONRESPONSIVE. 20 HEARSAY. RELEVANCY. 21 THE COURT: OVERRULED. 22 23 BY MR. LANE: 24 Q NOW, MR. CARTO, YOU RECALL THERE HAS BEEN OFFERED 25 A DOCUMENT, A LETTER FROM YOU TO MISS FARREL IN WHICH YOU 26 STATED YOUR INTENTION TO FILE BANKRUPTCY FOR THE LEGION. DO 27 YOU RECALL THAT? 28 A YES.
page 762 1 Q AFTER YOU SENT THAT LETTER TO MISS FARREL, DID SHE 2 TELL YOU WHAT SHE WANTED YOU TO DO WITH THE NECA SHARES? 3 MR. BEUGELMANS: OBJECTION. CALLS FOR HEARSAY. 4 THE COURT: OVERRULED. 5 THE WITNESS: YES. SHE, AT THAT TIME, WAS EVEN MORE 6 ANXIOUS TO SUPPORT MY EFFORTS THAN BEFORE. SHE WAS MORE 7 DETERMINED THE EFFORT AT ALL BECAUSE SHE — SHE FIGURED IF 8 THE POLITICAL OPPOSITION WAS GOING TO THE VIOLENT EXTREMES 9 AS THIS, I MUST BE MAKING A DIFFERENCE IN THINGS. 10 11 BY MR. LANE: 12 Q WHAT DID SHE SAY TO YOU AFTER YOU TOLD HER THAT IT 13 WAS YOUR -- 14 MR. BEUGELMANS: OBJECTION. HEARSAY. 15 MR. LANE: I WOULD LIKE TO FINISH THE QUESTION. 16 THE COURT: OVERRULED. I KNOW WHAT’s COMING. HE DOES, 17 TOO. 18 MR. LANE: MAYBE I DON'T HAVE TO ASK ANYTHING. 19 THE COURT: WAIT UNTIL THE QUESTION IS OVER WITH. 20 MR. BEUGELMANS: I APOLOGIZE. 21 22 BY MR. LANE: 23 Q AFTER YOU TOLD MISS FARREL THAT IT WAS YOUR 24 INTENTION TO FILE BANKRUPTCY FOR THE LEGION, WHAT DID SHE 25 SAY TO YOU SHOULD BE DONE WITH THE NECA CERTIFICATES? 26 MR. BEUGELMANS: OBJECTION. HEARSAY. 27 THE COURT: OVERRULED. ADMITTING SOME, BY THE WAY, 28 BECAUSE THERE’s AN ALLEGATION HERE OF FRAUD AND PUNITIVE
page 763 1 DAMAGES, AND THIS GOES TO HIS GOOD FAITH IN DOING WHAT HE 2 DID, EVEN IF IT’s WRONG IN DOING IT. 3 THE WITNESS: SHE TOLD ME — AND SHE SAID THAT -- 4 THAT — THAT I SHOULD NOT FILE BANKRUPTCY AND THAT SHE -- 5 SHE INTENDED TO SUPPORT THE LEGION, TO FORESTALL THE 6 DESTRUCTION OF THE ORGANIZATION. 7 8 BY MR. LANE: 9 Q DID SHE TELL YOU WHAT SHE WANTED TO HAVE DONE WITH 10 THE NECA ASSETS IN ADDITION TO — WITHDRAW THAT. 11 AFTER YOU TOLD MISS FARREL THAT YOU MIGHT — THAT 12 YOU INTENDED TO FILE BANKRUPTCY FOR THE LEGION, DID 13 MISS FARREL GIVE YOU ACCESS TO THE NECA SHARES? 14 A YES. 15 Q DID SHE SEND YOU KEYS AFTER THAT? 16 A YES. 17 Q DID SHE MEET WITH YOUR WIFE AFTER THAT? 18 A YES. 19 Q DID SHE OPEN VAULTS WITH YOUR WIFE AND PUT SUMS IN 20 THERE? 21 A YES. 22 Q PREVIOUS TO THAT, DID SHE SUGGEST TO YOU IN A 23 LETTER THAT YOU — MAYBE YOU OUGHT TO GO THERE AND PICK UP 24 THE MONEY AND YOU PERSONALLY TAKE IT BACK TO AMERICA? 25 A YES. 26 Q DID YOU BELIEVE THESE ACTIONS INDICATED THAT SHE 27 WANTED YOU TO USE YOUR JUDGMENT TO UTILIZE THE ASSETS? 28 A YES.
page 764 1 Q DID SHE EVER SAY ANYTHING TO THE CONTRARY TO YOU? 2 A NO. 3 Q YOU SAID THAT THE SUN RADIO HAD VARIOUS PERSONS 4 FROM THE LEGION APPEAR. WAS THERE ALSO ADVERTISING ON THE 5 SUN RADIO FOR THE WORK OF THE LEGION? 6 A YES. 7 Q WAS THAT EVER PAID? 8 A NO. 9 Q WAS THAT FREE ADVERTISING MADE AVAILABLE TO THE 10 LEGION BY SUN RADIO? 11 A YES. 12 MR. LANE: CAN I HAVE ONE MOMENT? THIS COULD BE THE 13 LAST QUESTION. 14 15 BY MR. LANE: 16 Q DID YOU RELY UPON YOUR AGREEMENT WITH THE LEGION, 17 WHICH GAVE YOU PERMISSION TO DISTRIBUTE THE FUNDS, WHEN YOU 18 RAISED OVER $350,000 TO PROSECUTE THE ESTATE? 19 A INDEED. IT WAS OVER THAT, MORE THAN THAT. 20 MR. LANE: NO FURTHER QUESTIONS, YOUR HONOR. 21 THE COURT: MR. BEUGELMANS. 22 MR. BEUGELMANS: BRIEFLY. THANK YOU. 23 MR. WAIER: YOUR HONOR, I'M ONLY GOING TO PUT THIS 24 OBJECTION FOR THE RECORD. I HAVE A FEELING I KNOW HOW YOU 25 WILL RULE. 26 HAVE WE RESERVED OUR DIRECT BASED ON 27 CROSS-EXAMINATION OF MR. BEUGELMANS? MR. BEUGELMANS HAD 28 ALREADY CALLED MR. CARTO AS A 776 WITNESS AND, THEREFORE,
page 765 1 THAT WAS CROSS-EXAMINATION. THIS WAS MERELY DIRECT. NO 2 OTHER ISSUES THAT I AM AWARE OF WERE WENT INTO ON THE DIRECT 3 THAT WERE NOT COVERED BY HIS CROSS-EXAMINATION. I DON'T 4 BELIEVE IT’s PROPER TO GO INTO A REBUTTAL WHEN HE HAS DONE 5 CROSS-EXAMINATION. IN OTHER WORDS, IT’s OUT OF ORDER. HE 6 MADE THAT ELECTION WHEN HE CHOSE THE WITNESS AS A HOSTILE 7 WITNESS. 8 THE COURT: I KNOW OF NO LAW THAT SUPPORTS THAT WHAT 9 MR. CARTO TESTIFIED TO IN HIS DEFENSE WHEN HE WAS CALLED BY 10 HIS ATTORNEY IS MUCH MORE EXTENSIVE THAN WHAT WAS TESTIFIED 11 TO BEFORE. HOWEVER, I DON'T THINK IT’s APPROPRIATE TO ASK 12 THE SAME QUESTION TWICE, IF WE ASKED IT ONCE ALREADY. IT 13 SHOULD BE ONLY ON THE NEW INFORMATION. AND UNLESS YOU HAVE 14 BEEN BRIEFED WELL BY YOUR COCOUNSEL, YOU MAY BE — BE 15 SOMETHING OF A DISADVANTAGE. YOU DON'T KNOW WHAT HE 16 TESTIFIED TO. 17 MR. BEUGELMANS: MR. MUSSELMAN AND I SPENT SEVERAL 18 HOURS GOING OVER THE TESTIMONY. I PREPARED TWO PAGES OF 19 QUESTIONS THAT COVER GROUND THAT WAS ASKED YESTERDAY. 20 MR. LANE: I HATE TO DO THIS. I ASK THAT MR. WAIER, 21 INSTEAD, BE ASKED TO OBJECT. I WAS NOT HERE WHEN MR. CARTO 22 TESTIFIED ORIGINALLY. I HATE TO YIELD THIS TO MR. WAIER. I 23 DON'T KNOW OF ANY OTHER WAY TO DO IT. 24 MR. BEUGELMANS: NO OBJECTION. 25 THE COURT: THAT’s TRUE, YOU KNOW, BECAUSE WHEN 26 MR. CARTO FIRST TOOK THE STAND, I RESTRICTED ANYTHING 27 DEALING WITH LIBERTY LOBBY BECAUSE I DIDN'T THINK IT WAS 28 QUITE FAIR. GO AHEAD.
page 766 1 CROSS-EXAMINATION 2 BY MR. BEUGELMANS: 3 Q MAY I PUT THE EXHIBIT BOOK IN FRONT OF THE 4 WITNESS? 5 MR. CARTO, PLEASE TURN TO EXHIBIT 60. I'M SORRY, 6 MAKE THAT EXHIBIT 63. SIR, DID YOU PREPARE EXHIBIT 63? 7 A YES. 8 Q IS THAT YOUR SIGNATURE AT THE BOTTOM OF 9 EXHIBIT 63? 10 A YES. 11 Q DID YOU MAIL EXHIBIT 63 TO LAVONNE FURR? 12 A YES. 13 Q DID YOU ENCLOSE A BLANK MINUTE OF THE BOARD OF 14 DIRECTORS OF THE LEGION? 15 MR. WAIER: OBJECTION. BEYOND THE SCOPE OF DIRECT. 16 LACKS FOUNDATION. RELEVANCY. 17 THE COURT: OVERRULED. 18 MR. WAIER: YOUR HONOR, MAY I BE HEARD? 19 THE COURT: SURE. 20 MR. WAIER: HE NEVER WENT INTO THE SEPTEMBER 21, 1993 21 MINUTES ON DIRECT. IN FACT, THERE WAS NO ISSUE DEALING WITH 22 MINUTES OR THIS PARTICULAR DOCUMENT, 63. THIS COULD HAVE 23 BEEN RAISED AT THE TIME WHEN MR. BEUGELMANS FIRST BROUGHT 24 THIS ISSUE. IT’s NOT — IT’s BEYOND THE SCOPE. 25 THE COURT: OVERRULED. IT’s — CROSS-EXAMINATION CAN 26 BE PRETTY EXTENSIVE, AS LONG AS IT’s NOT THE SAME QUESTION 27 AS BEFORE. I WILL OVERRULE THE OBJECTION. 28
page 767 1 BY MR. BEUGELMANS: 2 Q DID YOU SEND MRS. FURR A BLANK MINUTE TOGETHER 3 WITH EXHIBIT 63? 4 A WELL, THIS DOESN'T REFER TO ANY ENCLOSURE THAT I 5 CAN SEE. 6 Q DO YOU SEE PARAGRAPH 2 WHERE IT SAYS “SO I ENCLOSE 7 A DRAFT WHICH I THINK SHOULD PLUG IN THE HOLES"? DO YOU SEE 8 THAT, SIR? 9 A PARAGRAPH 3, YOU MEAN? 10 Q PARAGRAPH 3, YES, SIR. 11 MR. WAIER: EXCUSE ME. 12 THE WITNESS: YES. OKAY. YOU ARE RIGHT. I'M SURE I 13 DID, YES. 14 15 BY MR. BEUGELMANS: 16 Q YOU SENT A DRAFT OF MINUTES TO LAVONNE FURR 17 TOGETHER WITH EXHIBIT 63? 18 A YES. 19 Q TAKE A LOOK AT EXHIBIT 60, SIR. HAVE YOU EVER 20 SEEN EXHIBIT 60 BEFORE? 21 A YES. 22 Q DO YOU RECOGNIZE LAVONNE FURR’s SIGNATURE ON THE 23 BOTTOM OF EXHIBIT 60? 24 A YES. 25 Q AND IS EXHIBIT 60 A FINAL VERSION OF THE BLANK 26 DRAFT MINUTES THAT YOU ENCLOSED WITH EXHIBIT 63? 27 MR. WAIER: OBJECTION. CALLS FOR HEARSAY. LACKS 28 FOUNDATION.
page 768 1 THE COURT: OVERRULED. 2 THE WITNESS: MAY I SEE THE OTHER — WHAT IS THE OTHER 3 ONE? 63, LET ME SEE IT. THIS APPEARS TO BE THE MINUTES 4 DRAWN UP AS A RESULT OF MY SUGGESTION ON SEPTEMBER 21, 5 1993. 6 7 BY MR. BEUGELMANS: 8 Q THANK YOU, SIR. BY THAT, YOU MEAN — STRIKE 9 THAT. 10 WHEN YOU SAY “THIS APPEARS TO BE THE MINUTES," 11 REFERRED TO IN EXHIBIT 63, CORRECT? 12 A YES. 13 Q LET ME LEAVE THIS IN FRONT OF YOU. EXHIBIT 60 14 REFLECTS THE FACT THAT ALLEGEDLY ON OR ABOUT SEPTEMBER 16, 15 1993, MRS. CARTO WAS ELECTED A DIRECTOR OF THE LEGION. DO 16 YOU SEE THAT, SIR? 17 A YES. 18 Q AND ALSO, MR. HENRY FISCHER WAS ELECTED, 19 UNANIMOUSLY ELECTED A DIRECTOR AT THAT MEETING? 20 A YES. 21 Q DID MR. FISCHER AND MRS. CARTO THEREAFTER SERVE AS 22 DIRECTORS OF THE LEGION? 23 MR. WAIER: OBJECTION. RELEVANCY. LACKS FOUNDATION. 24 BEYOND THE SCOPE. 25 THE COURT: OVERRULED. 26 THE WITNESS: MR. FISCHER, FOR A VERY SHORT TIME, AND 27 MRS. CARTO, YES. 28
page 769 1 BY MR. BEUGELMANS: 2 Q SIR, WITH RESPECT TO THE MONIES THAT WERE 3 DEPOSITED INTO VIBET, HAVE YOU PERSONALLY EVER ORDERED MONEY 4 TO BE TRANSFERRED FROM VIBET’s ACCOUNT AT BANQUE CONTRADE 5 LAUSANNE TO LIBERTY LOBBY’s ACCOUNT? 6 A NO. 7 Q I WOULD LIKE TO READ FROM YOUR RESPONSES -- 8 STRIKE THAT. 9 I WOULD LIKE TO READ FROM THE RESPONSES OF LIBERTY 10 LOBBY, INC., TO PLAINTIFFS FIRST SET OF SPECIAL 11 INTERROGATORIES IN THE MATTER. I WILL SHOW YOU THE 12 ORIGINAL, SIR, AND WE'LL MARK IT EXHIBIT 205 OR 206. 206. 13 MR. WAIER: TELL US WHICH ONE IT IS. 14 THE CLERK: COURT’s EXHIBIT 206. 15 16 BY MR. BEUGELMANS: 17 Q LET ME ASK YOU, SIR -- 18 THE COURT: DESCRIPTION, PLEASE. 19 MR. BEUGELMANS: 206, YOUR HONOR, IS DEFENDANT LIBERTY 20 LOBBY, INC.’s RESPONSE TO PLAINTIFFS FIRST SET OF SPECIAL 21 INTERROGATORIES IN THE INSTANT ACTION. 22 23 BY MR. BEUGELMANS: 24 Q I WILL ASK YOU TO LOOK AT PAGE 9. DO YOU SEE A 25 SHEET ENTITLED “VERIFICATION"? 26 A YES. 27 Q IS THAT YOUR ORIGINAL SIGNATURE? 28 A YES.
page 770 1 Q LET’s TURN TO SPECIAL INTERROGATORY NUMBER 23. 2 I'LL READ THE QUESTION AND THE ANSWER. 3 MR. WAIER: YOUR HONOR, I WANT TO INDICATE THAT THE 4 VERIFICATION IS UNDATED. I'M NOT SURE THERE’s BEEN 5 FOUNDATION OF WHEN THE — THESE CAME INTO PLAY. 6 MR. BEUGELMANS: I HAVE A COPY FOR YOUR HONOR. THE 7 VERIFICATION IS SIGNED BY MR. CARTO, STATES JANUARY, BLANK, 8 1993. THE PROOF OF SERVICE BY MAIL SIGNED BY DANA RAE, 9 R-A-E, ARMBRUESTER, A-R-M-B-R-U-E-S-T-E-R, REFLECTS ON 10 JANUARY 16, 1993, MISS ARMBRUESTER SERVED THE FOREGOING 11 DOCUMENT DESCRIBED AS DEFENDANT LIBERTY LOBBY’s RESPONSE TO 12 THE PLAINTIFFS FIRST SET OF INTERROGATORIES, BY U.S. MAIL TO 13 MY OFFICE. 14 THE COURT: I'M GOING TO OVERRULE THE OBJECTION 15 RELEVANT TO DATE BEING MISSING ON IT. 16 MR. BEUGELMANS: I HAVE A COPY IF YOU WOULD LIKE TO 17 LOOK AT IT. 18 THE COURT: THAT’s ALL RIGHT. 19 20 BY MR. BEUGELMANS: 21 Q SPECIAL INTERROGATORY NUMBER 23, “WHO ORDERED 22 $100,000 TO BE TRANSFERRED FROM BANQUE CONTRADE LAUSANNE, 23 S-A-S, PERIOD, “A,” PERIOD, ACCOUNT 12167300 TO LIBERTY 24 LOBBY, INC., ACCOUNT NUMBER 10022519, NATIONAL CAPITAL BANK 25 OF WASHINGTON, D.C., IN 19” — OF WASHINGTON, I'M SORRY, 26 “IN 1993?” RESPONSE, “WILLIS A. CARTO." 27 A MAY I SEE THAT? 28 Q BY THE WAY, DO YOU RECOGNIZE THE ORIGINAL
page 771 1 SIGNATURE BY RANDY WAIER ON THE BOTTOM, PAGE 8? 2 MR. WAIER: OBJECTION. RELEVANCY. 3 THE COURT: SUSTAINED. 4 THE WITNESS: I WAS -- 5 6 BY MR. BEUGELMANS: 7 Q NO QUESTION PENDING, SIR. 8 THE COURT: ANY OTHER QUESTIONS? 9 MR. BEUGELMANS: YES, SIR. 10 11 BY MR. BEUGELMANS: 12 Q MR. CARTO, WERE YOU MADE AWARE THERE HAD BEEN A 13 DEMAND FOR PRODUCTION OF DOCUMENTS AT TRIAL IN THIS MATTER? 14 A YES. 15 Q DID YOU REVIEW THAT NOTICE TO WILLIS CARTO TO 16 APPEAR AT TRIAL AND SUBPOENA AND DEMAND TO PRODUCE THERE AT 17 PRIOR TO TESTIFYING IN THIS ACTION? 18 MR. WAIER: WHAT DID YOU ASK HIM? 19 MR. BEUGELMANS: I WOULD LIKE TO MARK AS EXHIBIT 20 207 -- 21 THE COURT: GO OVER THE QUESTION AGAIN. COUNSEL DIDN'T 22 APPEAR TO HEAR IT. 23 MR. BEUGELMANS: I'LL WITHDRAW THE QUESTION AND LAY A 24 FOUNDATION. 25 MARK AS EXHIBIT 207, THE ORIGINAL OF A DOCUMENT 26 ENTITLED “NOTICE TO WILLIS CARTO TO APPEAR AT TRIAL IN LIEU 27 OF SUBPOENA AND DEMAND TO PRODUCE THERE AT,” PARENTHESIS, 28 “C.C.P. SECTION 1987,” CLOSED PARENTHESIS.
page 772 1 BY MR. BEUGELMANS: 2 Q HAVE YOU EVER SEEN THIS DOCUMENT BEFORE? 3 MR. WAIER: YOUR HONOR, THIS AREA OF QUESTIONING IS NOT 4 ONLY BEYOND THE SCOPE, BUT WE OBJECTED AND FILED OBJECTIONS 5 AND SEASONED OBJECTIONS TO THIS NOTICE TO PRODUCE, WHICH 6 WOULD HAVE TO BE RULED UPON BY THIS COURT. COUNSEL IS AWARE 7 OF THE OBJECTIONS WE DID LODGE WITH THE COURT CONCERNING 8 THAT HE’s NEVER — WITHIN THE FIVE-DAY PERIOD OF TIME, HE 9 DIDN'T BRING A MOTION TO COMPEL IT. HE BROUGHT NOTHING 10 ALONG THE LINES TO COMPEL ANYTHING. HE HAD FIVE DAYS IN 11 WHICH TO — UPON RECEIVING THE OBJECTIONS, TO DO THAT. HE 12 DIDN'T DO IT. 13 THE COURT: OKAY. I DON'T UNDERSTAND THE NATURE OF THE 14 OBJECTION. THE QUESTION IS SIMPLY DID HE GET THIS NOTICE. 15 MR. WAIER: I'M ASKING FOR RELEVANCY. 16 THE COURT: OVERRULED. 17 THE WITNESS: YOU SAY DID I GET THIS NOTICE? 18 19 BY MR. BEUGELMANS: 20 Q DID YOU REVIEW THIS EXHIBIT 207 BEFORE TESTIFYING 21 IN THIS MATTER? 22 A NO. 23 Q HAVE YOU EVER PRODUCED THE ORIGINALS OR DUPLICATE 24 ORIGINALS OF THE WRITINGS YOU RELIED UPON CONCERNING 25 DISBURSEMENT OF THE FARREL ESTATE MONIES TO WHAT YOU 26 TESTIFIED TO EARLIER THIS MORNING? 27 MR. WAIER: AGAIN, I'M OBJECTING. YOUR HONOR, WE HAD 28 FILED OBJECTIONS TO THIS ON RELEVANCY WITH RESPECT TO THAT
page 773 1 QUESTION. ALSO VAGUE AND AMBIGUOUS TO TIME. 2 THE COURT: OVERRULED. 3 MR. WAIER: AND ALSO, YOUR HONOR, ATTORNEY/CLIENT 4 PRIVILEGE WITH RESPECT TO ANY CONVERSATION THAT HE HAD WITH 5 COUNSEL IF COUNSEL HAD DISCLOSED WHAT HAD BEEN PRODUCED. 6 THE COURT: WELL, YES, IF YOU ARE TALKING ABOUT THE 7 CONVERSATIONS BETWEEN THE WITNESS AND MR. WAIER — MR. LANE, 8 I'LL SUSTAIN THAT OBJECTION. YOU HAVEN'T ASKED THAT YET. 9 MR. BEUGELMANS: BUT YOUR HONOR, BY THE NATURE OF THE 10 QUESTION, IT NECESSARILY MAY INCLUDE -- 11 THE COURT: OVERRULED. 12 THE WITNESS: YOUR QUESTION IS DID I — WOULD YOU 13 PLEASE REPEAT THE QUESTION? 14 MR. BEUGELMANS: YES. 15 16 BY MR. BEUGELMANS: 17 Q THIS MORNING, UNDER QUESTIONING BY MR. LANE, YOU 18 STATED THAT YOU REVIEWED DOCUMENTS AND PREPARED A ONE-PAGE 19 SHEET OR MEMO, IF YOU WILL, ALLEGEDLY REFLECTING THE 20 DISBURSEMENTS THAT WERE MADE FROM THE 45 PERCENT SHARE OF 21 THE FARREL — OF THE NECA DISTRIBUTION, WHICH WENT TO THE 22 LEGION, CORRECT? 23 A UH-HUH. 24 Q IS THAT “YES"? 25 A YES. 26 Q DID YOU BRING ANY OF THOSE ORIGINAL DOCUMENTS TO 27 COURT WITH YOU TODAY? 28 A WELL, ALMOST ALL, YES. I'M SURE WE HAVE SOME, BUT
page 774 1 MOST OF THIS, AS I THINK I SAID, WAS — WAS PURELY BY 2 MEMORY. WE SIMPLY PUT TOGETHER AS MUCH AS WE COULD IN OUR 3 MIND AND TRIED TO FIGURE OUT HOW MUCH, WHERE THIS, WHERE 4 THIS, WHAT THE VARIOUS EXPENDITURES WERE. IN THE CASE OF 5 THE LAWYERS, FOR EXAMPLE, YOU HAVE THAT INFORMATION. THAT 6 HAS BEEN PRODUCED. 7 IF YOU WISH, I CAN GO OVER ONE BY ONE AND I CAN 8 INDICATE WHAT — WHAT I'M SURE YOU — YOU ALREADY HAVE -- 9 HAVE HAD THE OPPORTUNITY TO SEE. YOU — YOU HAVE SEEN ALL 10 THE PAPERS. IT’s BEEN PRODUCED BY MR. HOOPER. THAT 11 CONTAINS — THAT CONTAINS THE MATTER ABOUT THE EXECUTOR'S 12 FEE, ALTHAUS. 13 MR. BEUGELMANS: YOUR HONOR, WOULD THE COURT INSTRUCT 14 THE WITNESS NOT TO RAMBLE ON. NO QUESTION PENDING. 15 THE COURT: THE QUESTION CALLED FOR “YES” OR “NO,” DID 16 YOU BRING THE ORIGINAL DOCUMENTS TO COURT. 17 THE WITNESS: WE HAVE ORIGINAL DOCUMENTS CONCERNING 18 MANY OF THESE THINGS, BUT MOST OF THEM ARE — WERE NOT 19 DERIVED FROM DOCUMENTS. AND MOST OF THE DOCUMENTS HAVE -- 20 YOU HAVE, EITHER HAVE BEEN PRODUCED BY US OR BY MR. HOOPER. 21 22 BY MR. BEUGELMANS: 23 Q SO -- 24 A IF YOU WOULD BE SPECIFIC, MAYBE I COULD TELL YOU. 25 WHAT DO YOU MEAN? 26 MR. BEUGELMANS: MAY I HAVE THE PERMISSION TO MARK THE 27 DOCUMENT THAT MR. CARTO USED TO REFRESH HIS RECOLLECTION AS 28 THE NEXT EXHIBIT, EXHIBIT 208.
page 775 1 MR. WAIER: NO OBJECTION. 2 THE COURT: VERY WELL. NUMBER 208. 3 4 BY MR. BEUGELMANS: 5 Q SIR, IS IT YOUR TESTIMONY THIS MORNING THAT MOST 6 OF THE FIGURES ON EXHIBIT 208 WERE ARRIVED AT BY YOU AND 7 YOUR WIFE FROM MEMORY? 8 A YES. 9 Q NOW LET’s TALK A LITTLE BIT ABOUT THE $800,000 10 THAT WAS PAID TO THE SO-CALLED EXPEDITER. THE EXPEDITER WAS 11 MR. FRANCOIS GENOUD, CORRECT, F-R-A-N-C-O-I-S -- 12 A I DON'T BELIEVE I GAVE HIS NAME. 13 Q — G-E-N-O-U-D? 14 A I DON'T BELIEVE I GAVE THE NAME. 15 THE COURT: THAT WASN'T THE QUESTION. THE QUESTION WAS 16 THAT THE EXPEDITER -- 17 THE WITNESS: YES. 18 19 BY MR. BEUGELMANS: 20 Q IS MR. GENOUD ALIVE OR DEAD TODAY? 21 MR. WAIER: OBJECTION. LACKS FOUNDATION. 22 THE COURT: OVERRULED. THE ANSWER WAS? 23 THE WITNESS: HE’s DEAD. 24 25 BY MR. BEUGELMANS: 26 Q SIR, EARLIER, YOU OFFERED TO TALK TO HIS HONOR IN 27 CHAMBERS CONCERNING THE IDENTITY OF THIS EXPEDITER, CORRECT? 28 MR. WAIER: NO. MISSTATES HIS PRIOR TESTIMONY.
page 776 1 THE COURT: OVERRULED. IT FAIRLY STATES IT. 2 THE WITNESS: I OFFERED TO DISCLOSE IN DETAIL THE 3 DISPOSITION OF THIS MONEY TO HIS HONOR, INCLUDING THE NAME 4 OF THE EXPEDITOR, YES. 5 6 BY MR. BEUGELMANS: 7 Q NOW, MR. GENOUD WAS A WELL-CONNECTED MAN? 8 A YES. 9 Q AND HE’s A WELL-RESPECTED BANKER, OR WAS WHEN HE 10 WAS ALIVE? 11 A YES. 12 Q WHY DID YOU CHOOSE MR. GENOUD TO BE YOUR 13 EXPEDITOR, SIR? 14 MR. WAIER: OBJECTION. MISSTATES PRIOR TESTIMONY. 15 ASSUMES FACTS. 16 THE COURT: OVERRULED. 17 THE WITNESS: BECAUSE IN KNOWING HIM AND DISCUSSING 18 THINGS WITH HIM AND — AND BECAUSE HE WAS AVAILABLE, I FELT 19 THAT HE WOULD BE EFFECTIVE IN PERFORMING THE PERSONAL 20 CONTACT THAT HE WAS CAPABLE OF. 21 22 BY MR. BEUGELMANS: 23 Q MR. GENOUD WAS A PERSONAL FRIEND OF ADOLF HITLER, 24 CORRECT? 25 MR. WAIER: OBJECTION. RELEVANCY AND ALSO VIOLATES THE 26 COURT’s PRIOR ORDER WITH RESPECT TO THAT. 27 THE COURT: I THINK IT DOES. IT DEFINITELY DOES. I 28 SAID BEFORE, I DON'T CARE IF THIS CASE IS BETWEEN THE
page 777 1 A.C.L.U. AND HAND GUN CONTROL. THIS IS A BUSINESS CASE. 2 IT’s NOT -- 3 MR. LANE: STAY AWAY FROM THAT. THAT’s A DIRECT 4 VIOLATION OF THE AGREEMENT HERE, AND MR. BEUGELMANS SHOULD 5 BE ADMONISHED NOT TO DO THAT AGAIN. 6 THE COURT: I AGREE. I DON'T WANT TO HEAR 7 RELATIONSHIPS BETWEEN — IT DOESN'T — IT ISN'T MATERIAL. 8 IT HAS NOTHING TO DO WITH THE CASE. I THINK YOU KNEW THAT, 9 COUNSEL. 10 11 BY MR. BEUGELMANS: 12 Q MR. CARTO, DID YOU CHOOSE MR. GENOUD TO ACT AS 13 YOUR EXPEDITER BECAUSE HE OWNED A BANK? 14 A BECAUSE HE WHAT? 15 Q OWNED A BANK. 16 A I CHOSE HIM BECAUSE HE WAS AVAILABLE. 17 Q MR. CARTO, DID ANY OF THE FUNDS FROM THE FARREL 18 ESTATE DISTRIBUTION GO INTO A BANK OWNED BY MR. GENOUD? 19 A NOT TO MY KNOWLEDGE. 20 Q DO YOU KNOW THE NAME OF THE BANK MR. GENOUD OWNED 21 BEFORE HIS DEATH? 22 A NOPE. 23 Q WHAT EXACTLY DID MR. GENOUD DO AS AN EXPEDITER IN 24 CONNECTION WITH THE FARREL SETTLEMENT? 25 A I WILL RESERVE THAT FOR A — I DON'T THINK I 26 SHOULD GET INTO THIS. THIS IS A MATTER THAT EVEN CONCERNS 27 THE FOREIGN RELATIONS PICTURE. AND I THINK IT’s SOMETHING 28 THAT I WOULD BE VERY HAPPY TO DISCUSS WITH HIS HONOR, BUT
page 778 1 I'M NOT GOING TO DISCLOSE IT IN OPEN COURT. 2 MR. LANE: YOUR HONOR, IF THE ANSWER CAN BE ONLY BASED 3 ON HEARSAY, I'D RATHER HAVE A RULING ON THAT QUESTION 4 FIRST. AND PROBABLY IT’s ALL BASED ON HEARSAY. 5 THE COURT: I THINK IT IS. IT’s — IN ALL DUE 6 RESPECT, IT’s NOT THAT MATERIAL TO ME. I AM AWARE OF THE 7 EVIDENCE CODE 412 THAT SAYS IF STRONGER EVIDENCE IS 8 AVAILABLE AND WEAKER EVIDENCE IS GIVEN TO ME, I CAN VIEW IT 9 WITH DISTRUST. I'M NOT GOING TO FORCE MR. CARTO TO TESTIFY 10 TO THAT, SO IF HE CHOOSES TO, I WILL ACCEPT WHATEVER HE 11 SAYS, PUT IT INTO THE MATRIX. IF HE CHOOSES NOT TO, I'LL BE 12 USING EVIDENCE CODE 412. 13 MR. LANE: OBJECTION IS HEARSAY. 14 THE COURT: SUSTAIN IT ON HEARSAY, TOO. I THINK IT'S 15 GOING TO ASK FOR A HEARSAY ANSWER. 16 17 BY MR. BEUGELMANS: 18 Q I'LL MOVE ON. MR. CARTO, AS OF SEPTEMBER 20, 19 1985, YOU BELIEVED THAT THE FARREL GIFT OF NECA STOCK WAS 20 FOR THE BENEFIT OF THE LEGION, CORRECT? 21 A PARTIALLY. 22 Q WAS ALL OF THE LITIGATION WORLDWIDE SIMILAR TO THE 23 LITIGATION FILED IN NORTH CAROLINA CONCERNING THE FARREL 24 ESTATE? 25 MR. WAIER: OBJECTION. VAGUE AND AMBIGUOUS, LACKS 26 FOUNDATION. 27 THE COURT: OVERRULED. 28 MR. WAIER: YOUR HONOR, MAY I BE HEARD? I'M NOT SURE
page 779 1 ABOUT WHAT “SIMILAR” MEANS. 2 THE WITNESS: I DON'T KNOW WHAT YOU MEAN BY “SIMILAR." 3 4 BY MR. BEUGELMANS: 5 Q WAS THE LITIGATION IN SWITZERLAND — STRIKE 6 THAT. 7 DID THE LITIGATION IN SWITZERLAND PARALLEL THE 8 ALLEGATIONS OF THE LITIGATION IN NORTH CAROLINA? 9 MR. WAIER: OBJECTION. VAGUE AND AMBIGUOUS. 10 THE COURT: I THINK I'LL SUSTAIN THE OBJECTION UNLESS 11 THE WITNESS UNDERSTANDS THE QUESTION. 12 MR. BEUGELMANS: WITHDRAW THE QUESTION. 13 14 BY MR. BEUGELMANS: 15 Q MR. CARTO -- 16 THE COURT: SUSTAINED. 17 18 BY MR. BEUGELMANS: 19 Q WERE YOU INVOLVED IN THE SWISS LITIGATION? 20 MR. WAIER: OBJECTION. VAGUE AND AMBIGUOUS AS TO THE 21 TERM “INVOLVED." 22 THE COURT: OVERRULED. 23 THE WITNESS: I DON'T KNOW WHAT YOU MEAN BY 24 “INVOLVED." 25 THE COURT: SIR, YOU ARE INVOLVED IN THIS CASE. YOU 26 KNOW THAT’s INVOLVEMENT, RIGHT? 27 THE WITNESS: WELL, THERE WERE NO — THERE WERE NO 28 COURT HEARINGS IN WHICH I TESTIFIED. THERE WERE JUST PAPER
page 780 1 GOING BACK AND FORTH. 2 THE COURT: MAYBE REPHRASE THE QUESTION. IF HE WASN'T 3 INVOLVED, WHAT DID HE DO. 4 5 BY MR. BEUGELMANS: 6 Q LET ME ASK THIS QUESTION: DID THE SWISS 7 LITIGATION INVOLVE THE ISSUE OF WHO OWNED NECA CORPORATION 8 STOCK? 9 A YES. 10 Q WAS THE POSITION TAKEN BY THE LEGION AND YOURSELF 11 IN SWITZERLAND WITH RESPECT TO OWNERSHIP OF NECA CORPORATION 12 STOCK SIMILAR TO THE POSITION WHICH YOU AND THE LEGION TOOK 13 IN NORTH CAROLINA? 14 MR. WAIER: OBJECTION. CALLS FOR LEGAL CONCLUSION. 15 POTENTIAL DISCLOSURE OF ATTORNEY/CLIENT PRIVILEGE 16 INFORMATION. 17 THE COURT: OVERRULED. 18 THE WITNESS: WHEN YOU SAY “SIMILAR,” I'M NOT TRYING 19 NOT TO ANSWER THE QUESTION, BUT I REALLY — I REALLY DON'T 20 KNOW WITHOUT — WITHOUT A GREAT DEAL OF STUDY. THIS IS A 21 VERY OPEN-ENDED QUESTION. IT WAS — IT WAS SIMILAR AND IT 22 WAS DISSIMILAR. THE ISSUE, IF YOU MEAN TO ASK THE QUESTION, 23 DID IT CONCERN THE OWNERSHIP OF — OF THE BEARER 24 CERTIFICATES FOR NECA CORPORATION, YES. 25 MR. BEUGELMANS: THANK YOU, SIR. THAT WAS THE 26 QUESTION. 27 28
page 781 1 BY MR. BEUGELMANS: 2 Q NOW, MR. CARTO, WERE YOU AWARE THAT LAVONNE FURR 3 HAD RESIGNED AS A DIRECTOR OF THE LEGION SOMETIME IN LATE 4 1979? 5 A OKAY. WHEN YOU MENTIONED THAT THE FIRST TIME, I 6 BELIEVE IT WAS LAST WEEK, I'D FORGOTTEN THAT. I DID REFRESH 7 MY MEMORY IN LOOKING AT THE MINUTES, AND FOR A BRIEF PERIOD 8 OF TIME AFTER SHE MOVED TO LOUISIANA, SHE DID RESIGN AS A 9 MEMBER OF THE BOARD, BUT NOT AS A MEMBER OF THE 10 CORPORATION. 11 Q DO YOU KNOW — STRIKE THAT. 12 ARE YOU ALLEGING THAT MARSHA HOYT BECAME A 13 SUBSTITUTE INCORPORATOR FOR THE LEGION? 14 A YES. 15 Q WERE YOU PRESENT WHEN SHE BECAME ONE? 16 A CERTAINLY NOT. 17 Q DO YOU KNOW WHERE SHE BECAME ONE? 18 A AFTER THE DEATH OF HER MOTHER AND FATHER-IN-LAW. 19 Q HAVE YOU SEEN ANY CORPORATE RESOLUTIONS IN WHICH 20 SHE WAS ELECTED A SUBSTITUTE INCORPORATOR? 21 A THEY ARE IN USE IN THE COURT CASE IN HOUSTON. 22 Q NOW, SIR, SUBSEQUENT TO JANUARY 1994, DID VIBET 23 HAVE ANY MONEY ON ACCOUNT AT ANY BANK? 24 A SUBSEQUENT TO WHEN? 25 Q JANUARY 1994. 26 A DID VIBET HAVE ANY MONEY ON ACCOUNT WHERE? 27 Q IN ANY BANK ACCOUNT WHATSOEVER, SIR. 28 A I DON'T BELIEVE SO.
page 782 1 Q SIR, MR. BLAYNE HUTZEL IS THE ACCOUNTANT FOR 2 LIBERTY LOBBY? 3 A NO. 4 Q WHAT IS HIS TITLE AGAIN, SIR? 5 A CONTROLLER. 6 Q CONTROLLER. WHAT DOES HE DO AS A CONTROLLER, SIR? 7 A HE HANDLES THE OVERSIGHT OF THE INCOME AND OUTGO 8 OF LIBERTY LOBBY. 9 Q HE’s FAMILIAR WITH THE FINANCIAL STATE OF LIBERTY 10 LOBBY? 11 A YES. 12 Q AND HE WAS FAMILIAR WITH LIBERTY LOBBY’s FINANCIAL 13 STATE AS OF 1994? 14 A YES. 15 Q I WOULD LIKE TO SHOW YOU A DOCUMENT WE'LL MARK AS 16 EXHIBIT NUMBER 208 AND ASK YOU, HAVE YOU SEEN THIS DOCUMENT 17 BEFORE? 18 THE COURT: COULD WE HAVE A DEFINITION? 19 THE CLERK: THE COURT’s NEXT IN ORDER IS 209. 20 MR. BEUGELMANS: EXHIBIT 209 IS A ONE-PAGE DOCUMENT, 21 DATED 3-23-94, ENTITLED “INTERCOMPANY BALANCES, 12-31-93." 22 MR. WAIER: I HAVEN'T SEEN THIS DOCUMENT. IT HAS NOT 23 BEEN PRODUCED TO US, NOR A COPY BEEN PROVIDED TO US. 24 MR. BEUGELMANS: IT’s AN EXHIBIT TO MR. Carto’s 25 DEPOSITION. I CAN TELL YOU WHICH ONE IT IS IN A SECOND. 26 THE COURT: TAKE A LOOK AT IT. 27 MR. BEUGELMANS: TO MAKE A CLEAR RECORD, YOUR HONOR. 28 THE WITNESS: IS THIS A DOCUMENT STOLEN BY
page 783 1 TOM MARCELLUS FROM THE UNITED STATES MAIL? 2 THE COURT: SIR, PERHAPS YOU SHOULD KEEP IN MIND YOU 3 ARE THE WITNESS AND YOU'RE ANSWERING QUESTIONS, NOT ASKING 4 THEM. YOU HAVE TWO FINE ATTORNEYS HERE, AND YOU MAKE IT 5 DIFFICULT FOR THEM WHEN YOU ACT THIS WAY. 6 MR. BEUGELMANS: YOUR HONOR, FOR THE RECORD, THIS WAS 7 ATTACHED AS EXHIBIT 14 TO THE DEPOSITION OF WILLIS CARTO 8 TAKEN IN THE INSTANT ACTION, OCTOBER 17, 1995. 9 10 BY MR. BEUGELMANS: 11 Q SIR, HAVE YOU SEEN EXHIBIT 209 BEFORE? 12 A NO. 13 MR. WAIER: YOUR HONOR, I AM GOING TO OBJECT TO THIS 14 DOCUMENT LIKE I DID DURING THE DEPOSITION IN THAT I OBJECTED 15 TO IT BECAUSE THIS DOCUMENT WAS PROCURED THROUGH THE ILLEGAL 16 TAKING OF MAIL, IN OTHER WORDS, ILLEGAL OPENING OF MAIL THAT 17 WAS DIRECTED TO MR. CARTO AT THE TIME. AND IT IS A CRIME. 18 IT WAS DONE BY MR. MARCELLUS; HE ADMITTED THAT. I OBJECT TO 19 THIS DOCUMENT BECAUSE OF THE WAY THEY GOT THIS DOCUMENT. IN 20 FACT, MR. CARTO HADN'T EVEN SEEN THE DOCUMENT. THEY HAD 21 STOLEN IT IN THE MAIL. 22 THE COURT: ASSUMING YOU ARE RIGHT, ASSUMING 23 MR. MARCELLUS COMMITTED A FEDERAL CRIME AND DID THIS, MY 24 UNDERSTANDING OF THE LAW IS THAT THE EXCLUSIONARY RULE 25 APPLIES TO STATE ACTION AND STATE CASES. IF THIS WERE THE 26 PROSECUTOR OVER HERE, IT WOULDN'T BE ADMITTED. THIS IS A 27 CIVIL CASE. I THINK IT CAN BE USED. 28 MR. WAIER: I DON'T HAVE ANY AUTHORITY FOR THIS. AT
page 784 1 THE TIME I DID IT, AT THE TIME WHEN I MADE THE ORIGINAL 2 OBJECTION DURING THE DEPOSITION, I DIDN'T BRING THAT BECAUSE 3 I WAS — THIS WAS NOT A DOCUMENT THAT WAS BROUGHT UP IN 4 MR. BEUGELMANS' CROSS, WHICH WAS DIRECT, AND IT WASN'T 5 TALKED ABOUT BY MR. LANE. IF IT’s USED FOR IMPEACHMENT 6 PURPOSES, I UNDERSTAND HE DIDN'T HAVE TO DISCLOSE IT TO US, 7 BUT IT WAS DISCLOSED DURING THE DEPOSITION AND I DID MAKE 8 THE OBJECTION. AND I DON'T HAVE THAT AUTHORITY RIGHT AT MY 9 FINGERTIP. 10 THE COURT: OVERRULE THE OBJECTION. 11 12 BY MR. BEUGELMANS: 13 Q SIR, HAVE YOU EVER SEEN THIS DOCUMENT PRIOR TO 14 TODAY? 15 A NO. 16 Q HAVE YOU EVER SEEN A COPY OF IT BEFORE TODAY, SIR? 17 A YES. 18 Q AND DID MR. BLAYNE HUTZEL PREPARE THAT DOCUMENT? 19 A YES. 20 Q IT’s IN HIS HANDWRITING, CORRECT? 21 A YES. HE PREPARED THE DOCUMENT. 22 Q AND MR. HUTZEL IS THE ACCOUNTANT FOR LIBERTY 23 LOBBY, INC., CORRECT? 24 A NO. 25 Q I WOULD LIKE TO READ FROM THE DEPOSITION, PAGE 26 118. 27 MR. WAIER: WHICH DAY? 28 MR. BEUGELMANS: PAGE 118.
page 785 1 MR. WAIER: COULD YOU IDENTIFY THE DATE AND TIME AND SO 2 FORTH. 3 MR. BEUGELMANS: DEPOSITION OF WILLIS A. CARTO, TAKEN 4 OCTOBER 17, 1995, IN THIS CASE. PAGE 118. 5 MR. WAIER: WHICH LINES? 6 MR. BEUGELMANS: I'LL BE READING FROM LINE 22, THROUGH 7 PAGE 119, LINE 3. 8 9 BY MR. BEUGELMANS: 10 Q WAS MR. HUTZEL THE ACCOUNTANT FOR LIBERTY LOBBY, 11 INC., AS OF OCTOBER 17, 1995? 12 A NO. 13 Q ALL RIGHT. 14 A 1975? NO. 15 Q '95, SIR. 16 A 1995. NO. 17 Q STARTING TO READ AT PAGE 118, LINE 22: 18 “QUESTION: WAS MR. HUTZEL THE ACCOUNTANT FOR 19 LIBERTY LOBBY, INC.? 20 “ANSWER: YES. 21 “QUESTION: AND HE WAS THE ACCOUNTANT FOR LIBERTY 22 LOBBY, INC., AS OF THE DATE SET FORTH IN THE UPPER 23 RIGHT-HAND CORNER OF EXHIBIT 14,” WHICH I IDENTIFIED AS THE 24 SAME AS EXHIBIT 209. 25 AND THE ANSWER IS, “YES." 26 A YOU ARE MAKING A DISTINCTION WITHOUT A 27 DIFFERENCE. MR. HUTZEL, AS I TESTIFIED ABOUT THREE 28 TIMES --
page 786 1 MR. BEUGELMANS: COULD THE COURT ADMONISH THE WITNESS 2 NOT TO VOLUNTEER ANY STATEMENTS ON THE RECORD. 3 THE COURT: YES, IF YOU COULD DO THAT, SIR. 4 THE WITNESS: MAY I STATE, MR. HUTZEL IS A CONTROLLER. 5 HE’s NOT THE ACCOUNTANT. HE HIRES ACCOUNTANTS. 6 THE COURT: YES, I'LL ACCEPT THAT STATEMENT. 7 GET ON WITH THE QUESTIONING. 8 9 BY MR. BEUGELMANS: 10 Q AS WE SIT HERE TODAY, DOES MR. FISCHER HAVE POWER 11 ON ANY ACCOUNT MAINTAINED BY VIBET, INC.? 12 A NO. 13 Q DID HE HAVE ANY SUCH POWERS AS OF THE DATE OF YOUR 14 DEPOSITION IN THIS ACTION? 15 A YES. 16 Q THAT WAS IN OCTOBER 1995, CORRECT? 17 A WELL, NO. LET ME LOOK. IF THERE IS A VIBET 18 ACCOUNT TODAY, MR. FISCHER WOULD — WOULD HAVE — WOULD AND 19 DOCTOR FOETISCH WOULD HAVE CONTROL OF IT. I DON'T BELIEVE 20 THERE IS A VIBET ACCOUNT TODAY. 21 MR. WAIER: I'M GOING TO MOVE TO STRIKE AS BEING 22 SPECULATIVE, YOUR HONOR. 23 THE COURT: SUSTAIN THE OBJECTION. THAT’s ONE OF THE 24 PROBLEMS YOU CAUSE FOR YOUR ATTORNEYS, SIR, WHEN YOU SORT OF 25 VOLUNTEER INFORMATION. I HAVE TO PERFORM THE INTERESTING 26 INTELLECTUAL FUNCTION OF STRIKING EVIDENCE AND PRETENDING I 27 NEVER HEARD IT WHEN I KNOW I HAVE HEARD IT. I CAN DO IT, 28 BUT IT ALWAYS CAUSES PROBLEMS.
page 787 1 MR. WAIER: IT’s THE SAME ADMONITION THAT YOU GIVE A 2 JURY. 3 THE COURT: AND WE, OF COURSE, KNOW THEY FOLLOW THAT, 4 DON'T WE, LIKE TELLING SOMEONE TO STAND IN THE CORNER AND 5 DON'T THINK ABOUT AN ELEPHANT. 6 THE WITNESS: MAY I MAKE A COMMENT? PROBABLY NOT. 7 THE COURT: NO, SIR. 8 MR. LANE: I THINK YOU ARE MISSING THE POINT, WILLIS. 9 THE COURT: YES. YOU HAVE TWO FINE ATTORNEYS HERE. IF 10 YOU JUST TRY TO ANSWER HIS QUESTIONS. ON CROSS-EXAMINATION, 11 MOST QUESTIONS ARE SUPPOSED TO BE FRAMED SO THEY CAN BE 12 ANSWERED “YES” OR “NO.” THEN ON REDIRECT, IF YOUR ATTORNEYS 13 THINK THAT IT SHOULD BE EXPANDED UPON, THEY ASK YOU A 14 QUESTION TO EXPAND ON IT. THAT GIVES YOU AN OPPORTUNITY TO 15 EXPLAIN A “YES” OR “NO” ANSWER, IF YOUR ATTORNEYS IN THEIR 16 WISDOM THINK THAT’s NECESSARY. 17 I WOULD SUGGEST THAT THEY ARE PROBABLY BETTER 18 JUDGES OF THAT THAN YOU SIMPLY BECAUSE, NUMBER ONE, THEY'RE 19 ATTORNEYS AND THEY'RE USED TO THIS SORT OF THING. ALSO, 20 THEY CAN BE MORE OBJECTIVE THAN YOU CAN AND THEY CAN PREVENT 21 MAYBE EVIDENCE COMING IN IN FRONT OF ME, WHICH IS 22 INAPPROPRIATE. 23 GO AHEAD WITH YOUR QUESTIONS. 24 25 BY MR. BEUGELMANS: 26 Q MR. CARTO, YOU TESTIFIED THAT YOU AND MRS. CARTO 27 SPENT YESTERDAY EVENING TRYING TO ARRIVE AT THE FIGURES THAT 28 ARE SET FORTH IN EXHIBIT 208, CORRECT?
page 788 1 A YES. 2 Q YOU TESTIFIED THAT YOU DIDN'T HAVE ALL THE 3 DOCUMENTS BECAUSE, APPARENTLY, THEY HAD BEEN SEIZED BY THE 4 POLICE AUTHORITY IN THE STATE OF CALIFORNIA? 5 A CORRECT. 6 Q THAT’s WHAT HAMPERED YOUR ABILITY TO GIVE A PROPER 7 AND CORRECT ACCOUNTING IN THIS MATTER? 8 A YES. 9 Q YOU HAD NO OTHER ACCESS TO DOCUMENTS THAT REFLECT 10 AND SHOW HOW THE 45 PERCENT THAT WAS RECEIVED AS THE LEGION 11 AND YOUR SHARE OF THE FARREL SETTLEMENT WAS DISBURSED? 12 MR. WAIER: OBJECTION. MISSTATES HIS PRIOR TESTIMONY. 13 HAS BEEN ASKED AND ANSWERED. 14 THE COURT: SUSTAINED. 15 16 BY MR. BEUGELMANS: 17 Q SIR, DO YOU HAVE ANY OTHER DOCUMENT ANYWHERE FROM 18 WHICH YOU COULD PREPARE AN ACCOUNTING OF HOW THE FUNDS WERE 19 DISBURSED? 20 A NO. 21 Q READ FROM YOUR DEPOSITION, SIR, STARTING AT 22 PAGE 195, LINE 10, THROUGH 196, LINE 14. 23 MR. WAIER: 196, LINE 14, IF I MAY READ THE QUESTION, I 24 MAY HAVE PROPER OBJECTIONS TO THESE. 25 THE COURT: SURE. 26 (PAUSE) 27 MR. WAIER: YOUR HONOR — YOUR HONOR, I READ THIS 28 PASSAGE — I WOULD BE HAPPY TO SHOW THE COURT. I DON'T
page 789 1 BELIEVE IT IS IMPEACHMENT. I UNDERSTAND COUNSEL CAN READ 2 FROM A PARTY’s DEPOSITION. I DO HAVE CERTAIN OBJECTIONS IN 3 HERE, BUT THE QUESTION WAS DO YOU HAVE IN YOUR POSSESSION 4 DOCUMENTS. THIS DOES NOT STATE THAT. WHAT IT STATES HE 5 CLAIMED — I OBJECTED TO THAT VERY QUESTIONED AS COMPOUND. 6 “REPHRASE YOUR QUESTION, COUNSEL.” AND THAT’s WHEN HE THEN 7 SAID, “DO YOU HAVE ANY OF THOSE UNDER YOUR CONTROL, SIR," 8 AND THAT ANSWER WAS “WELL, YES.” SO IT’s — THAT’s WHAT 9 I'M INDICATING TO THIS COURT. IT DOESN'T DO ANYTHING. 10 THE COURT: I'M GOING TO SUSTAIN THE OBJECTION UNDER 11 352. I THINK WE CAN MOVE ON. 12 MR. BEUGELMANS: THIS IS IMPORTANT. IT’s CRITICAL. IT 13 GOES TO THE ABILITY TO ACCOUNT. LET ME MAKE AN OFFER OF 14 PROOF. 15 HE STATES IN THE DEPOSITION THAT THE DOCUMENTS 16 THAT SHOW HOW THE FARREL ESTATE MONEY HAVE BEEN DISBURSED 17 ARE IN HIS CONTROL AT WASHINGTON, D.C. NOW HE’s SAYING HE 18 CAN'T DO AN ACCOUNTING. THE HORRIBLE CONSPIRACIES AND THE 19 POLICE AUTHORITIES HAVE STOLEN HIS DOCUMENTS. 20 THE COURT: HE ALREADY STATED THAT, I THINK. I THINK 21 HE STATED THAT ALREADY. 22 MR. BEUGELMANS: YOUR HONOR, I WOULD LIKE TO PUT THIS 23 ON THE RECORD. I BELIEVE IT’s KIND OF IMPORTANT. IF I 24 COULD READ IT, IT WON'T TAKE LONG. 25 MR. LANE: MAY I SAY SOMETHING? I KNOW IT SEEMS LIKE 26 WE'RE WINNING THIS ONE. HE’s ALREADY TESTIFIED THAT HE DOES 27 HAVE SOME OF THE DOCUMENTS. THE QUESTION WAS, “DO YOU HAVE 28 ANY OF THE DOCUMENTS?” HE SAID, “YES.” THAT’s NOT
page 790 1 IMPEACHMENT. 2 THE COURT: I AGREE. 3 MR. BEUGELMANS: YOUR HONOR -- 4 THE COURT: THAT’s ALL RIGHT. I KNOW YOU ARE UPSET. 5 MOVE ON. 6 7 BY MR. BEUGELMANS: 8 Q WELL, MR. CARTO, DO YOU KNOW HOW THE FARREL 9 PROCEEDS WERE SPENT, OR ARE YOU GUESSING? 10 A BOTH. 11 Q SO YOU DON'T KNOW HOW THE MONEY WAS SPENT, DO YOU? 12 MR. WAIER: OBJECTION. ASKED AND ANSWERED. 13 THE WITNESS: IF YOU WANT TO BE SPECIFIC -- 14 THE COURT: OVERRULED. 15 THE WITNESS: MR. BEUGELMANS, I WOULD BE HAPPY TO GO 16 OVER EACH — AS I OFFERED BEFORE, EACH ONE AND EXPLAIN IT 17 IN THOROUGH. I WILL TELL YOU IF — IF I HAVE ANY 18 DOCUMENTATION FOR IT HERE, IF I BELIEVE THERE MAY BE 19 DOCUMENTATION IN WASHINGTON, OR IF IT’s SPECULATION, OR IF 20 IT’s — IF THERE’s A HINT IN SOME CORRESPONDENCE SOMEWHERE, 21 OR IF IT’s FROM HOOPER’s PAPERS THAT HE UNETHICALLY 22 TRANSMITTED TO YOUR CLIENTS. BUT I CAN'T — YOU ASKED A 23 GENERAL QUESTION I CANNOT ANSWER. I'M SORRY. I HAVE TO -- 24 MAYBE I SAID TOO MUCH, BUT THAT’s THE WAY IT IS. 25 26 BY MR. BEUGELMANS: 27 Q THAT’s FINE. THAT’s A GOOD ANSWER. THANK YOU. 28 MR. CARTO, DID YOU EVER DISCUSS WITH MR. KERR THE
page 791 1 ISSUE OF HOW MUCH MONEY THE FARREL SETTLEMENT HAD GENERATED 2 PRIOR TO MARCH 5, 1991? 3 A PRIOR TO MARCH 5, 1991? NO. 4 Q DID YOU DISCUSS IT WITH MR. KERR ON MARCH 5, 1991? 5 A WELL, I KNOW I SHOULD NOT HAVE BEEN SO POSITIVE, 6 PERHAPS. I KNOW THAT IT WAS DISCUSSED WITH MR. FURR. I 7 CAN'T ASCRIBE THE DATE. 8 Q MR. KERR, SIR. 9 A MR. KERR. 10 Q BEFORE THE MARCH 5, 1991 MEETING OF THE BOARD OF 11 DIRECTORS WAS CALLED IN WHICH THE LEGION ALLEGEDLY DECIDED 12 NOT TO ACCEPT THE FARREL BEQUEST, DID YOU DISCUSS THE AGENDA 13 OF THE MEETING WITH MR. KERR? 14 MR. WAIER: OBJECTION. ASSUMES FACTS. LACKS 15 FOUNDATION. 16 THE COURT: OVERRULED. 17 MR. LANE: YOUR HONOR, I DON'T WANT TO SPEND A LOT OF 18 TIME. I DIDN'T DO ANY OF THIS AT ALL. THIS IS SUPPOSED TO 19 BE CROSS-EXAMINATION. 20 THE COURT: I KNOW YOU HAVEN'T. I THINK BECAUSE OF THE 21 WAY IT WAS SPLIT UP ON THE DIRECT EXAMINATION, THAT I'M 22 GOING TO ALLOW IT. 23 MR. LANE: THEY HAD THEIR DIRECT. THIS IS SUPPOSED TO 24 BE CROSS. IT HAS NOTHING TO DO WITH CROSS. 25 THE COURT: I'M GOING TO OVERRULE YOUR OBJECTION. 26 MR. LANE: YES. 27 THE WITNESS: WHAT WAS THE QUESTION, PLEASE? 28
page 792 1 BY MR. BEUGELMANS: 2 Q DID YOU DISCUSS THE AGENDA OF THE MARCH 5, 1991 3 MEETING WITH MR. KERR BEFORE THE MEETING OCCURRED? 4 MR. WAIER: SAME OBJECTION. ASSUMES FACTS. LACKS 5 FOUNDATION. 6 THE COURT: OVERRULED. 7 THE WITNESS: PROBABLY. 8 9 BY MR. BEUGELMANS: 10 Q DID YOU TELL MR. KERR THAT AT THE MEETING, THERE 11 WOULD BE A MOTION FOR THE LEGION NOT TO ACCEPT THE FARREL 12 BEQUEST? 13 A IF I DISCUSSED IT WITH HIM, I MOST CERTAINLY TOLD 14 HIM THAT. 15 Q DID YOU TELL MR. KERR THAT THE LEGION WOULD BE 16 DECLINING TO ACCEPT A SUM BETWEEN 3 TO 4 MILLION DOLLARS? 17 A IF I DISCUSSED IT WITH HIM, I WOULD HAVE — I 18 WOULD HAVE TOLD HIM ABOUT THAT THEN EXPLAINED THE REASON FOR 19 WHY THAT WAS NECESSARY IN LIGHT OF THE CURRENT PROBLEMS WE 20 HAD. 21 Q AND YOU TOLD MR. TAYLOR THAT THERE WOULD BE A 22 MEETING ON MARCH 5, 1991? 23 MR. WAIER: OBJECTION. ASSUMES FACTS. LACKS 24 FOUNDATION. RELEVANCY. 25 THE COURT: OVERRULED. 26 THE WITNESS: I DON'T REMEMBER THE PRECISE DATE THAT I 27 HAD THIS LENGTHY CONVERSATION WITH MR. TAYLOR. 28
page 793 1 BY MR. BEUGELMANS: 2 Q MR. -- 3 A BUT IF — IF TWO DATES ARE APPROXIMATE, THEN I'M 4 SURE THAT I DID DISCUSS THAT WITH HIM. 5 Q MR. CARTO, WHEN THE ALLEGED MEETING WITH 6 MR. TAYLOR AT THE HOTEL NEAR L.A.X. -- 7 MR. LANE: MOVE TO STRIKE THE WORD “ALLEGED." 8 MR. TAYLOR, THIS WITNESS TESTIFIED IT TOOK PLACE. 9 THE COURT: SUSTAINED. 10 11 BY MR. BEUGELMANS: 12 Q MR. CARTO, WHEN DID THE MEETING OCCUR BETWEEN 13 YOURSELF AND — STRIKE THAT. 14 WHEN DID THE PHONE CONVERSATION OCCUR BETWEEN 15 YOURSELF AND MR. TAYLOR WHEN HE WAS STAYING AT — ALLEGEDLY 16 STAYING AT A HOTEL NEAR LOS ANGELES INTERNATIONAL? 17 MR. WAIER: OBJECTION. HE STATED “ALLEGED.” THAT WAS 18 TESTIFIED TO BY MR. TAYLOR. 19 THE COURT: A QUESTION IS NOT EVIDENCE. BUT WHY DON'T 20 WE LEAVE OUT THE PEJORATIVE WORDS AND LEAVE OUT THE WORD 21 “ALLEGEDLY." 22 23 BY MR. BEUGELMANS: 24 Q WHEN DID THE TELEPHONE CONVERSATION OCCUR WHEN YOU 25 CALLED MR. TAYLOR AT THE HOTEL NEAR LOS ANGELES 26 INTERNATIONAL AIRPORT? 27 A I CALLED HIM IN THE HOTEL. WE WERE BOTH IN THE 28 HOTEL. I DIDN'T CALL HIM FROM OUTSIDE.
page 794 1 Q WHEN DID THAT OCCUR? 2 A I ALREADY TESTIFIED I DON'T RECALL. EARLY IN THE 3 DAY. 4 Q DO YOU REMEMBER WHAT YEAR IT WAS? 5 A I'M SURE I BELIEVE MRS. CARTO WOULD HAVE A BETTER 6 FIX ON THAT; THAT I'M SURE YOU WILL BE QUESTIONING HER ABOUT 7 IT. 8 Q AND CAN YOU TELL MR. TAYLOR HOW MUCH MONEY THE 9 LEGION WAS GOING TO RECOVER FROM THE SETTLEMENT OF THE 10 FARREL LITIGATION WHEN YOU TALKED TO HIM AT THE HOTEL ON THE 11 PHONE AT THE HOTEL? 12 MR. WAIER: OBJECTION. ASKED AND ANSWERED. 13 THE COURT: SUSTAINED. 14 15 BY MR. BEUGELMANS: 16 Q WHAT SUM DID YOU TELL MR. TAYLOR THAT THE LEGION 17 WAS GOING TO RECOVER FROM THE SETTLEMENT? 18 MR. WAIER: OBJECTION. ASKED AND ANSWERED. 19 THE COURT: OVERRULED AS TO THAT PARTICULAR QUESTION. 20 THE WITNESS: THAT’s THE SAME QUESTION, ISN'T IT? 21 THE COURT: I DON'T KNOW. IT’s CLOSE, SIR, BUT I'M 22 GOING TO OVERRULE THE OBJECTION. 23 THE WITNESS: MAYBE I MISUNDERSTOOD. COULD YOU ASK THE 24 QUESTION AGAIN. 25 26 BY MR. BEUGELMANS: 27 Q DID YOU GIVE MR. TAYLOR A NUMBER, A FIGURE AS TO 28 WHAT THE APPROXIMATE VALUE OF THE FARREL RECOVERY THAT WAS
page 795 1 GOING TO THE LEGION, SLASH, CARTO WAS GOING TO BE? 2 A NO. 3 Q SIR, IN EXHIBIT 84 IN FRONT OF YOU, THERE WERE A 4 NUMBER OF PROMISSORY NOTES MADE BY LIBERTY LOBBY INTO 5 VIBET. IF YOU WILL RECALL, WHEN I FIRST ASKED YOU QUESTIONS 6 LAST WEEK, WE WENT OVER THE NOTES. 7 MR. WAIER: OBJECTION. THIS WHOLE AREA WAS BROUGHT OUT 8 BY MR. BEUGELMANS ON DIRECT. 9 THE COURT: I THINK IT WAS. 10 MR. LANE: NOT TOUCHED BY ME AT ALL. 11 THE COURT: I THINK IT WAS. I THINK WE'RE GOING OVER 12 THINGS AGAIN. 13 MR. BEUGELMANS: NO. MAY I PLEASE MAKE AN OFFER OF 14 PROOF? 15 THE COURT: YES. WHAT IS THE OFFER OF PROOF? 16 MR. BEUGELMANS: I WANT TO ASK IF LIBERTY LOBBY WOULD 17 PAY THE MONIES BACK. I DIDN'T ASK IT. MR. LANE WAS NOT 18 HERE. I WANTED TO FIND OUT LIBERTY LOBBY’s INVOLVEMENT WITH 19 THE NOTES, HOW THE NOTES WERE MADE, IF THESE WERE BONA FIDE 20 NOTES. I WANTED TO. IN DEFERENCE TO THE COURT’s RULING, I 21 DIDN'T GET INTO IT. 22 THE COURT: THAT’s TRUE. OVERRULE IT. 23 24 BY MR. BEUGELMANS: 25 Q SIR, THE NOTES THAT ARE IN FRONT OF YOU IN 26 EXHIBIT 84, WERE THEY BONA FIDE NOTES? 27 MR. WAIER: OBJECTION. CALLS FOR LEGAL CONCLUSION. 28 LACKS FOUNDATION. ASSUMES FACTS.
page 796 1 THE COURT: OVERRULED. 2 THE WITNESS: WELL, ACCORDING TO MY KNOWLEDGE OF THE 3 LAW, THEY'RE BONA FIDE NOTES, I DON'T KNOW WHAT YOU MEAN. 4 THEY'RE SIGNED. IT STATES IT’s A NOTE AND GIVES AN INTEREST 5 AMOUNT. IT GIVES A TERMINATION, MATURITY DATE SIGNED BY 6 ME. THAT’s THE LEGAL QUESTION. MY KNOWLEDGE, THEY'RE BONA 7 FIDE NOTES. 8 9 BY MR. BEUGELMANS: 10 Q DID YOU NEGOTIATE THE NOTES WITH THE 11 REPRESENTATIVE OF VIBET? 12 A YES. 13 Q AND WHO DID YOU NEGOTIATE WITH, SIR? 14 A DOCTOR FOETISCH. 15 Q DO YOU KNOW OF ANY REASON WHY LIBERTY LOBBY IS NOT 16 OBLIGATED TO REPAY VIBET AS PER THE NOTES THAT WERE INCLUDED 17 IN EXHIBIT 84? 18 MR. WAIER: OBJECTION. CALLS FOR LEGAL CONCLUSION. 19 LACKS FOUNDATION. ASSUMES FACTS. MISSTATES EVIDENCE. 20 THE COURT: OVERRULED. 21 THE WITNESS: DO I KNOW? SORRY. 22 23 BY MR. BEUGELMANS: 24 Q DO YOU KNOW OF ANY REASON WHY LIBERTY LOBBY IS NOT 25 OBLIGATED TO REPAY THE VIBET NOTES IN EXHIBIT 84? 26 MR. WAIER: OBJECTION. YOUR HONOR, NOW IT’s VAGUE AND 27 AMBIGUOUS. THE NOTES HAVE A RETURN DATE OF 1997 AS WHEN 28 THEY'RE TO BE PAID. VAGUE AND AMBIGUOUS. IS HE TALKING
page 797 1 ABOUT NOW, 1997? THE DOCUMENTS SPEAK FOR THEMSELVES. 2 THE COURT: OVERRULED. WE'RE TALKING ABOUT REPAYMENT 3 IN ACCORDANCE WITH THE NOTES OBVIOUSLY. 4 THE WITNESS: DO I KNOW WHY THEY SHOULDN'T BE REPAID? 5 IS THAT YOUR QUESTION? 6 7 BY MR. BEUGELMANS: 8 Q IS THERE A REASON THAT YOU KNOW OF AS 9 TREASURER — LET ME FINISH THE QUESTION. 10 IN YOUR CAPACITY AS A DIRECTOR OR TREASURER AND 11 CHIEF EXECUTIVE OFFICER OF LIBERTY LOBBY, INCORPORATED, AS 12 YOU SIT HERE TODAY, DO YOU KNOW OF ANY REASON WHY LIBERTY 13 LOBBY IS NOT OBLIGATED TO REPAY THE NOTES IN EXHIBIT 84. 14 MR. WAIER: OBJECTION. ASSUMES FACTS. LACKS 15 FOUNDATION. CALLS FOR LEGAL CONCLUSION. 16 THE COURT: OVERRULED. 17 THE WITNESS: ASSUMING THAT VIBET CORPORATION IS STILL 18 IN EXISTENCE, ASSUMING THAT THEY HAVE NOT SIGNED THE NOTES, 19 ASSUMING THAT THE DEMAND IS MADE ON US FOR PAYMENT, I KNOW 20 OF NO OTHER REASON THEY SHOULDN'T BE PAID. 21 22 BY MR. BEUGELMANS: 23 Q AS YOU SIT HERE TODAY, YOU HAVE — AS YOU SIT HERE 24 TODAY, YOU HAVE NO KNOWLEDGE THAT VIBET HAS CEASED TO EXIST, 25 DO YOU? 26 A I DO NOT. 27 Q YOU HAVE NO KNOWLEDGE THAT VIBET, INC., OR VIBET, 28 LIMITED, WHATEVER THE APPROPRIATE DENOMINATION IS FOR THAT
page 798 1 ENTITY — YOU HAVE NO KNOWLEDGE THAT ENTITY HAS CEASED TO 2 EXIST AS A LEGAL ENTITY, DO YOU? 3 A NO. 4 Q WHEN THE FIRST NOTE COMES DUE, AND THAT'S 5 EXHIBIT 1, ON OR BEFORE DECEMBER 9, 1996 — DO YOU SEE 6 THAT, SIR? 7 A YES. 8 Q — WHERE WOULD LIBERTY LOBBY, INC., SEND PAYMENT 9 TO VIBET? 10 MR. WAIER: OBJECTION. ASSUMES FACTS. ALSO RELEVANCY. 11 THE COURT: OVERRULED. 12 THE WITNESS: I SUPPOSE FROM THE SOURCE THAT NOTIFIES 13 US THAT THE — THAT THE NOTE IS DUE, HAS NOT OR HAS BEEN 14 ASSIGNED, OR SUPPLIES THAT INFORMATION, MR. BEUGELMANS. 15 16 BY MR. BEUGELMANS: 17 Q IS THAT TRUE FOR ALL OF THE LOANS THAT HAVE BEEN 18 MADE BY VIBET TO LIBERTY LOBBY? 19 A YES. 20 Q DOES THAT INCLUDE ALL OF THE LOANS THAT ARE SET 21 FORTH IN YOUR RESPONSE TO INTERROGATORY NUMBER 16? 22 MR. WAIER: ONE SECOND. 23 24 BY MR. BEUGELMANS: 25 Q TO COURT EXHIBIT NUMBER 206. 26 A WHAT IS THAT AGAIN? 27 (THE RECORD WAS READ.) 28 MR. LANE: I THINK THAT’s THE SAME QUESTION. I THINK
page 799 1 IT’s THE SAME LIST, YOUR HONOR. HE JUST ANSWERED ABOUT THE 2 EXHIBIT 84. 3 THE COURT: IT MAY OR MAY NOT BE. I DON'T KNOW. I'M 4 GOING TO OVERRULE THE OBJECTION. 5 THE WITNESS: WELL, THE ANSWER WOULD BE THE SAME. 6 7 BY MR. BEUGELMANS: 8 Q THANK YOU, SIR. SIR, KAYLA CORPORATION WAS A 9 FOR-PROFIT CORPORATION, CORRECT? 10 A YES. 11 Q AND THERE WAS A TIME IN EARLY THE 1990’s WHEN 12 LIBERTY LOBBY OWNED STOCK IN KAYLA, CORRECT? 13 MR. WAIER: OBJECTION. CALLS FOR LEGAL CONCLUSION. 14 LACKS FOUNDATION. ASSUMES FACTS. 15 THE COURT: OVERRULED. 16 THE WITNESS: I DON'T THINK LIBERTY LOBBY EVER OWNED 17 ANY STOCK IN KAYLA. I COULD BE WRONG, BUT IT COULD BE. 18 HOWEVER, IT WENT BANKRUPT. 19 20 BY MR. BEUGELMANS: 21 Q F.D.F.A. ALSO WAS A STOCKHOLDER IN KAYLA IN THE 22 EARLY 1990'S, CORRECT? 23 MR. WAIER: OBJECTION. MISSTATES THE TESTIMONY BY THE 24 USE OF THE WORLD “ALSO." 25 THE WITNESS: I HAVE TO GIVE EXACTLY THE SAME ANSWER. 26 THE COURT: SUSTAINED. 27 THE WITNESS: I'M SORRY. 28 THE COURT: THAT’s ALL RIGHT.
page 800 1 BY MR. BEUGELMANS: 2 Q DID LIBERTY LOBBY INVEST IN KAYLA CORPORATION? 3 MR. WAIER: OBJECTION. VAGUE AND AMBIGUOUS TO THE TERM 4 “INVEST." 5 THE COURT: OVERRULED. 6 THE WITNESS: SAME ANSWER. 7 8 BY MR. BEUGELMANS: 9 Q WHAT IS THE ANSWER, SIR? MAY HAVE, MAYBE NOT, YOU 10 DON'T KNOW? 11 A SAME ANSWER I MADE BEFORE THAT I DON'T BELIEVE 12 THAT ANY STOCK WAS OWNED BY LIBERTY LOBBY OR THE FOUNDATION 13 FOR THE DEFENSE OF THE FIRST AMENDMENT. MY RECOLLECTION WAS 14 THAT MONEY WAS LENT, AND I DON'T THINK THAT — I DON'T 15 THINK IT HELD ANY STOCK. IN ANY EVENT, IT’s — THE 16 QUESTION IS MOOT BECAUSE KAYLA IS BANKRUPT. WENT BANKRUPT 17 YEARS AGO. 18 19 BY MR. BEUGELMANS: 20 Q NOW, YOU TESTIFIED THAT KAYLA INCURRED BIG 21 EXPENSES WITH WALL STREET LAWYERS BECAUSE THERE WERE STOCK 22 OFFERINGS, CORRECT? 23 A YES. 24 Q WHO PAID THE LAWYERS, LIBERTY LOBBY? 25 A CERTAINLY WAS. 26 Q YOU TESTIFIED YESTERDAY, SIR, THAT YOU DRIVE AN 27 OLD VEHICLE? 28 A CORRECT.
page 801 1 Q DOES YOUR WIFE DRIVE A NEW MODEL CADILLAC? 2 A NO. 3 Q WHAT YEAR CADILLAC DOES YOUR WIFE DRIVE? 4 A I BELIEVE 1990. 5 Q SIR, YOU TESTIFIED AT YOUR — YESTERDAY UNDER 6 MR. LANE’s EXAMINATION, YOU RESIDE IN NORTH COUNTY 7 SAN DIEGO, CORRECT? 8 A CORRECT. 9 Q AND THE RESIDENCE YOU LIVE IN IS OWNED BY -- 10 STRIKE THAT. 11 TITLE IN THE RESIDENCE YOU LIVE IN IS OWNED BY 12 HERFORD CORPORATION. 13 MR. WAIER: OBJECTION. RELEVANCY. LACKS FOUNDATION. 14 ALSO 352. 15 MR. LANE: WAY BEYOND THE SCOPE OF ANYTHING WE HAD SO 16 FAR. 17 THE COURT: I THINK I'M GOING TO OVERRULE THIS. HE 18 TESTIFIED HE BASICALLY DOESN'T HAVE ANY MONEY, THAT HE 19 DOESN'T HAVE A HOME AND ALL THIS SORT OF THING. 20 MR. LANE: I DON'T THINK WE WENT INTO THE QUESTION 21 WHETHER HE HAS A HOME, NOT WHILE I WAS HERE. 22 MR. WAIER: NO, HE NEVER TESTIFIED TO THAT. 23 MR. LANE: IT NEVER CAME UP. 24 MR. WAIER: THE ONLY TWO QUESTIONS WERE ABOUT THE CARS. 25 MR. BEUGELMANS: I ASKED ABOUT REAL PROPERTY ON 26 CROSS-EXAMINATION THE FIRST DAY AT THE END. I ASKED 27 MR. CARTO IF HE OWNED ANY REAL PROPERTY. HE STATED NO. HE 28 STATED BACK IN THE MID 80'S, HE OWNED LESS THAN $100,000
page 802 1 WORTH OF STOCK. 2 THE COURT: WELL, MY NOTES ARE THAT SINCE 1985, NO 3 SALARY, NO REAL PROPERTY, NO CAR HE SAID, AND NO STOCKS OR 4 BONDS. AND THEN HE SAID HE OWNED SOME — HAD SOME BOOKS 5 AND CLOTHES. STOCKS WERE IN THE LOW FIVE FIGURES. I'M 6 GOING TO LET YOU ASK THE QUESTION, BUT IT’s GETTING INTO 352 7 AREA, SO I THINK WE SHOULD GET THROUGH THIS RATHER QUICKLY. 8 MR. LANE: WERE THOSE QUESTIONS ASKED ON CROSS? 9 THE COURT: THEY WERE ASKED ON DIRECT. 10 MR. LANE: BY MR. BEUGELMANS AND NOW HE’s GOING TO ASK 11 THEM AGAIN? IN ORDER TO — HE’s ON CROSS-EXAMINATION. THE 12 WITNESS — HE DID DIRECT FIRST. I DON'T THINK THAT'S 13 ALLOWED, YOUR HONOR. 14 MR. MUSSELMAN: I WAS HERE YESTERDAY; MR. BEUGELMANS 15 WASN'T. MR. LANE INQUIRED ABOUT MR. Carto’s WEALTH. THE 16 FACT HE DIDN'T ASK THE SAME NUMBER OF QUESTIONS DOESN'T MEAN 17 HE DIDN'T OPEN THE DOOR. 18 THE COURT: I THINK MR. LANE HAS A GOOD POINT. 352, 19 I'LL SUSTAIN IT. MOVE ON. THE STATUS OF THE EVIDENCE RIGHT 20 NOW IS WHAT IT IS. 21 MR. BEUGELMANS: WELL, I WOULD LIKE TO IMPEACH HIM ON 22 THAT ISSUE. LET ME MAKE AN OFFER TO THE COURT. MR. CARTO 23 RESIDES IN A VERY BEAUTIFUL PROPERTY, GUARD GATED -- 24 MR. LANE: THIS OFFER IS COMMUNICATED INFORMATION TO 25 THE JURY, MEANING YOU, YOUR HONOR. 26 THE COURT: MEANING ME. OVERRULED. IT’s 352. WE GOT 27 TO MOVE ON. 28 MR. BEUGELMANS: COULD I MAKE AN OFFER OF PROOF ON THE
page 803 1 ISSUE OF PUNITIVE DAMAGES? I UNDERSTAND YOUR HONOR IS 2 PROBABLY NOT INCLINED TO DEAL WITH THAT. I WOULD LIKE TO 3 MAKE A RECORD, IF I COULD. 4 THE COURT: WE DON'T GET TO PUNITIVE DAMAGES UNTIL THE 5 SECOND PART OF THE TRIAL. I CAN TELL YOU BASED ON WHAT I 6 HEARD, I DON'T THINK IT’s A PUNITIVE DAMAGES CASE, FOR 7 WHATEVER THAT HELPS YOU OUT. 8 9 BY MR. BEUGELMANS: 10 Q MR. CARTO, DID YOU PREPARE EXHIBIT 208 LAST NIGHT? 11 A NO. 12 Q WHEN DID YOU PREPARE EXHIBIT 208? 13 A EARLY THIS MORNING. 14 Q YOU ARE A COLLEGE GRADUATE, CORRECT? 15 A NO. 16 Q YOU WENT TO COLLEGE? 17 A YES. 18 Q AND YOU TOOK ACCOUNTING, DIDN'T YOU? 19 A YES. 20 Q AND YOU FAILED ACCOUNTING, DIDN'T YOU? 21 A YES. 22 MR. WAIER: OBJECTION. RELEVANCY. 23 THE WITNESS: THAT’s RIGHT. 24 THE COURT: SUSTAINED. I'LL LET THE ANSWER STAND. 25 MR. BEUGELMANS: NOTHING FURTHER. 26 THE COURT: ANY REDIRECT? 27 MR. LANE: ONE MOMENT. 28 CAN WE HAVE FIVE MINUTES?
page 804 1 THE COURT: YES. 2 3 (PROCEEDINGS RECESSED.) 4 5 THE COURT: BACK ON THE RECORD. ANY REDIRECT? 6 MR. LANE: NO, I'M PLEASED TO ANNOUNCE WE HAVE NO 7 REDIRECT. 8 THE COURT: ANY OTHER WITNESSES FOR THE DEFENSE? 9 MR. WAIER: YES, WE JUST WILL BE CALLING TWO MORE 10 WITNESSES. ONE, MR. MARCELLUS, WHO WE REQUESTED TO BE HERE 11 TODAY, AS WELL AS ELISABETH CARTO. 12 CALL MR. MARCELLUS AT THIS POINT. 13 THE COURT: VERY WELL. THANK YOU, MR. CARTO, FOR YOUR 14 TESTIMONY. 15 16 THOMAS MARCELLUS, 17 CALLED AS A WITNESS ON BEHALF OF THE DEFENDANT, HAVING BEEN 18 PREVIOUSLY SWORN, TESTIFIED AS FOLLOWS: 19 DIRECT EXAMINATION 20 THE COURT: MR. MARCELLUS HAS BEEN ALREADY BEEN SWORN. 21 22 BY MR. WAIER: 23 Q GOOD MORNING, MR. MARCELLUS. 24 A GOOD MORNING, MR. WAIER. 25 Q I BELIEVE YOU RECALL TESTIFYING DURING THE 26 PLAINTIFF’s CASE THAT AT ONE POINT IN TIME, YOU WERE A DONOR 27 MANAGER TO THE HISTORICAL EDUCATION FOUNDATION? 28 A YES.
page 805 1 Q AND I BELIEVE YOU TESTIFIED, DID YOU NOT — ASK 2 YOU AGAIN, DID YOU KNOW ANY MONIES HAD GONE — WHILE YOU 3 WERE DONOR MANAGER, HAD GONE FROM H.E.F. TO THE FOUNDATION 4 TO DEFEND THE FIRST AMENDMENT? 5 A YES. 6 Q AND YOU KNEW THAT WHEN YOU BECAME — WHEN YOU 7 SUCCEEDED ROBERT BERKEL; ISN'T THAT TRUE? 8 A NO. 9 Q WHEN DID YOU FIRST LEARN THAT? 10 A I DIDN'T — I RECALL NOT REALIZING IT UNTIL AFTER 11 MR. Carto’s RELATIONSHIP WITH THE LEGION WAS TERMINATED. 12 Q SIR, ISN'T IT TRUE THAT YOU KNEW THAT MONIES WENT 13 FROM H.E.F. TO THE FOUNDATION TO DEFEND THE FIRST AMENDMENT 14 FOR LEASE PAYMENTS AND ADVANCE ON LEASE PAYMENTS? 15 A IT COULD BE TRUE, BUT I DON'T RECALL THAT. 16 MR. WAIER: YOUR HONOR, MAY I APPROACH THE WITNESS? 17 THE COURT: YES. 18 19 BY MR. WAIER: 20 Q LET ME SHOW YOU, THIS WILL REFRESH YOUR 21 RECOLLECTION. THIS IS A DOCUMENT THAT I BELIEVE IS IN 22 EVIDENCE. I DON'T BELIEVE IT HAS THE WRITING ON IT, A 23 NATIONAL FOUNDATION, INC., CONFIRMATION STATEMENT. LET ME 24 SHOW YOU, IT’s ON THE HISTORICAL EDUCATION FOUNDATION 25 ACCOUNT. 26 YOU SEE WRITINGS ON THE SIDE, SIR? 27 A YES. 28 Q IS THAT YOUR WRITING?
page 806 1 A YES. 2 Q IT SAYS “MONIES TO F.D.F.A. FOR ADVANCE LEASE 3 PAYMENTS ON I.H.R. BUILDING"? 4 A YES. 5 Q YOU KNEW ABOUT THOSE PAYMENTS GOING TO ADVANCE 6 LEASE PAYMENTS; IS THAT CORRECT? 7 A THAT, I DON'T THINK I WROTE THAT ON THERE UNTIL 8 1993 AFTER MR. CARTO WAS TERMINATED — THE RELATIONSHIP WAS 9 TERMINATED WITH THE LEGION. 10 Q WHERE DID YOU GET THIS INFORMATION AFTER MR. CARTO 11 WAS TERMINATED CONCERNING THESE MONIES FOR ADVANCE LEASE 12 PAYMENTS? 13 A WELL, AFTER THAT TERMINATION, WE BEGAN TO FIND OUT 14 EVERYTHING WE COULD ABOUT THE CORPORATION, THE FINANCES AND 15 SO ON, SO FORTH. THESE WERE AMONG THE DOCUMENTS THAT -- 16 THAT WE LOOKED AT. 17 Q WELL, WHO GAVE YOU THE INFORMATION THAT THEY WERE 18 FOR ADVANCE LEASE PAYMENTS? 19 A THAT APPEARS TO BE A STATEMENT, BUT I'M NOT SURE 20 AT THE TIME I WROTE IT IF IT WAS A NOTE TO CHECK THAT, OR IF 21 IT WAS A STATEMENT, OR IF I ALREADY KNEW THAT, OR TO CHECK 22 ON IT. 23 Q ISN'T IT TRUE YOU ALREADY KNEW ABOUT IT BEFORE YOU 24 MADE AN INVESTIGATION? 25 A I DON'T THINK SO. 26 Q NOW, YOU PREVIOUSLY TESTIFIED, I BELIEVE, ON 27 DIRECT THAT YOU TOOK DIRECTION FROM LEWIS AND LAVONNE FURR 28 WHILE YOU WERE MANAGING DIRECTOR?
page 807 1 A I TOOK NO DIRECT ACTION FROM LEWIS AND LAVONNE 2 FURR. 3 Q WHAT DID YOU MEAN YOU TOOK NO DIRECT ACTION? 4 A BECAUSE THERE WAS NEVER — THERE WAS NEVER AN 5 INCIDENT DURING THE COURSE OF MY TIME THERE WHEN LEWIS AND 6 LAVONNE FURR GAVE ME DIRECTION, TOLD ME WHAT TO DO, GAVE ME 7 SOME MARCHING ORDERS OR HAD ME DO SOMETHING. 8 Q THAT WAS BECAUSE OF YOUR AGREEMENT IN THE 9 BEGINNING WITH LAVONNE FURR YOU WOULD TAKE DIRECTION FROM 10 MR. CARTO; ISN'T THAT CORRECT? 11 MR. BEUGELMANS: OBJECTION. ASKED AND ANSWERED. 12 THE COURT: SUSTAINED. 13 14 BY MR. WAIER: 15 Q AT THE POINT IN TIME WHEN YOU WROTE TO JEAN FARREL 16 AND TOLD HER IN JANUARY 14, 1985, TO NOW START SENDING MONEY 17 TO THE F.D.F.A. FOR FUTURE CONTRIBUTIONS, DID YOU HAVE ANY 18 CONVERSATION WITH LEWIS AND LAVONNE FURR THAT YOU — THAT 19 YOU WERE GOING TO DO THIS? 20 A NO. 21 Q DID YOU HAVE ANY CONVERSATION WITH ANY DIRECTOR 22 OR — ANY OTHER DIRECTOR OF THE LEGION AT THAT TIME, 23 JANUARY 14, 1985, THAT YOU WERE GOING TO TELL JEAN FARREL 24 NOT TO MAKE CONTRIBUTIONS TO THE LEGION, BUT TO MAKE THEM TO 25 F.D.F.A.? 26 A NOT THAT I RECALL. 27 Q BUT YOU FELT IT WAS PERFECTLY PROPER TO DO THAT; 28 ISN'T THAT CORRECT?
page 808 1 A YES, BECAUSE MR. CARTO HAD INSTRUCTED ME TO DO 2 SO. 3 Q AND YOU BELIEVE TODAY THAT WAS CORRECT, ISN'T THAT 4 RIGHT, THAT IT WAS PROPER? 5 A NO. 6 Q NOW, ISN'T IT TRUE THAT PRIOR TO MARCH 1991, 7 MR. MARCELLUS, YOU KNEW THAT THE FARREL ESTATE WAS BEING 8 LITIGATED OVERSEAS? 9 A I HAD IT ON MR. AND MRS. Carto’s REPRESENTATION 10 THAT IT WAS, YES. 11 Q IN FACT, THEY TOLD YOU THAT, DIDN'T THEY? 12 A YES. 13 Q IN FACT, THEY TOLD YOU IT WAS BEING LITIGATED BY 14 ATTORNEYS IN LONDON, AS WELL AS IN SWITZERLAND; ISN'T THAT 15 TRUE? 16 MR. BEUGELMANS: OBJECTION. ASKED AND ANSWERED. 17 THE COURT: OVERRULED, BUT I'M GOING TO HAVE TO LEAVE 18 AT 12:00. I THINK WE CAN -- 19 MR. WAIER: I'LL FINISH HIM UP QUICK. 20 THE COURT: GET RIGHT TO IT. 21 22 BY MR. WAIER: 23 Q ISN'T THAT TRUE? 24 A I LOST THE QUESTION NOW. 25 Q ISN'T IT TRUE THAT MR. AND MRS. CARTO TOLD YOU 26 PRIOR TO MARCH OF 1991 THAT THIS MATTER WAS BEING LITIGATED 27 BY ATTORNEYS IN LONDON, AS WELL AS IN SWITZERLAND? 28 A YES.
page 809 1 Q AND IN FACT, THEY EVEN TOLD YOU THE NAMES OF THOSE 2 ATTORNEYS; ISN'T THAT TRUE? 3 A NO, I ONLY KNEW THE NAME OF ONE ATTORNEY. 4 Q WHO WAS THAT? 5 A IT WAS — IT WAS HOOPER, DAVID HOOPER. 6 Q AND YOU KNEW THAT PRIOR TO MARCH OF 1991, DIDN'T 7 YOU? 8 A YES. 9 Q AND IN FACT, IF YOU WANTED INFORMATION, ISN'T IT 10 TRUE, MR. MARCELLUS, YOU COULD HAVE WROTE TO MR. HOOPER AND 11 FOUND OUT ALL THE INFORMATION THAT YOU NEEDED CONCERNING THE 12 FARREL ESTATE? 13 MR. BEUGELMANS: OBJECTION. CALLS FOR SPECULATION. 14 THE COURT: SUSTAINED. 15 16 BY MR. WAIER: 17 Q SIR, DID YOU WRITE TO MR. HOOPER AT ANY TIME PRIOR 18 TO MARCH 1, 1991, CONCERNING ANYTHING ABOUT THE FARREL 19 ESTATE? 20 A I SAW NO NEED TO. NO, I DID NOT. 21 Q DID YOU — FROM MARCH 1991 UNTIL WHEN MR. CARTO, 22 ACCORDING TO YOU, LEFT THE LEGION IN 1993, DID YOU WRITE TO 23 MR. HOOPER TO FIND OUT WHAT HAD TRANSPIRED IN CONNECTION 24 WITH THE ESTATE OF JEAN FARREL-EDISON? 25 A I DID NOT. 26 Q DID ANYONE? 27 A I THINK — IN THE PERIOD PRIOR TO MR. Carto’s 28 TERMINATION?
page 810 1 Q YES. 2 A I DON'T — I DON'T KNOW IF IT OCCURRED DURING 3 THAT PERIOD OF TIME. 4 Q BUT YOU KNEW THAT MR. HOOPER DID HAVE INFORMATION 5 CONCERNING THE DISPOSITION OF THE JEAN FARREL-EDISON ESTATE 6 AS EARLY AS MARCH OF 1991; ISN'T THAT TRUE? 7 A WELL, MR. WAIER, I DIDN'T KNOW IT. I WOULD -- 8 COULD HAVE GUESSED MR. HOOPER WAS SINCE HE WAS INTRODUCED BY 9 THE CARTOS AS A BRITISH ATTORNEY HANDLING THE LITIGATION OF 10 THE FARREL GIFT IN ENGLAND. 11 Q WHEN DID HE INTRODUCE YOU TO THEM? 12 A I BELIEVE 1987. 13 Q SO YOU KNEW IN 1987 THAT MR. HOOPER WAS ONE OF THE 14 ATTORNEYS — IN FACT, YOU MET HIM AS ONE OF THE ATTORNEYS 15 REPRESENTING THE LEGION’s INTERESTS WITH RESPECT TO 16 JEAN FARREL-EDISON’s ESTATE; ISN'T THAT CORRECT? 17 A THAT WAS MY UNDERSTANDING, YES. 18 Q AND DID YOU ASK MR. HOOPER ANY QUESTIONS AT THAT 19 TIME IN 1987 WHEN YOU MET HIM? 20 A IT WAS A VERY BRIEF MEETING. NO, I DON'T BELIEVE 21 I DID. 22 Q AND DID MR. CARTO AND MRS. CARTO VOLUNTARILY BRING 23 MR. HOOPER TO YOU AND INTRODUCE YOU TO HIM? 24 A THAT, I BELIEVE, WAS THE CASE, YES. 25 MR. WAIER: ONE SECOND. I MAY HAVE ONLY ONE QUESTION. 26 27 BY MR. WAIER: 28 Q WHILE YOU WERE — A COUPLE OF QUESTIONS, SMALL
page 811 1 AREA. 2 WHILE YOU WERE AT THE LEGION, IT MAINTAINED A POST 3 OFFICE BOX, DID IT NOT? 4 A YES. 5 Q YOU HAD ACCESS TO THAT POST OFFICE BOX, ISN'T THAT 6 TRUE, WHILE YOU WERE THERE? 7 A YES. 8 Q DOES IT STILL HAVE A POST OFFICE BOX? 9 A YES, IT HAS TWO, I BELIEVE, OR — YEAH, I BELIEVE 10 TWO. 11 Q AND WHEN I SAY “ACCESS,” YOU HAD A KEY TO THE POST 12 OFFICE BOX? 13 A I DID NOT KEEP THE KEY. I COULD HAVE GOTTEN THE 14 KEY. 15 Q IN OTHER WORDS, ANY INFORMATION THAT WENT INTO 16 THAT BOX FROM 1985, NOT WHILE THE PERIOD YOU WERE GONE, THE 17 YEAR AND A HALF, BUT AFTER THAT POINT IN TIME, UP UNTIL THE 18 TIME MR. CARTO LEFT, YOU HAD ACCESS TO THAT POST OFFICE BOX; 19 ISN'T THAT TRUE? 20 A YES, I COULD HAVE ACCESSED THAT POST OFFICE BOX. 21 MR. WAIER: NO FURTHER QUESTIONS. 22 THE COURT: ANY RECROSS? 23 24 CROSS EXAMINATION 25 BY MR. BEUGELMANS: 26 Q SIR, PRIOR TO SEPTEMBER 1993, WERE YOU UNDER 27 CONTRACT WITH THE LEGION? 28 A YES.
page 812 1 Q DID THAT CONTRACT CALL FOR YOU TO REPORT TO 2 MR. CARTO? 3 MR. WAIER: OBJECTION. ASKED AND ANSWERED. OUTSIDE 4 THE SCOPE. 5 THE COURT: SUSTAINED. I THINK WE HAVE GONE INTO IT. 6 7 BY MR. BEUGELMANS: 8 Q PRIOR TO SEPTEMBER 1993, SIR, DID YOU BELIEVE 9 MR. CARTO WAS ACTING IN ACCORDANCE WITH THE INSTRUCTIONS OF 10 THE LEGITIMATE BOARD OF DIRECTORS OF THE LEGION? 11 MR. WAIER: OBJECTION. ARGUMENTATIVE. CALLS FOR A 12 LEGAL CONCLUSION. LACKS FOUNDATION. ASSUMES FACTS. 13 THE COURT: OVERRULED. 14 THE WITNESS: YES, I DID. 15 MR. BEUGELMANS: NOTHING FURTHER. THANK YOU. 16 THE COURT: REDIRECT? 17 18 REDIRECT EXAMINATION 19 BY MR. WAIER: 20 Q WHO DID YOU BELIEVE WAS THE LEGITIMATE BOARD OF 21 DIRECTORS WHEN YOU HAD THIS BELIEF DURING THIS PERIOD OF 22 TIME? 23 A I BELIEVED THAT LAVONNE FURR WAS THE SPOKESMAN FOR 24 WHAT I UNDERSTAND TO BE A LEGITIMATE BOARD OF DIRECTORS. 25 MR. WAIER: THANK YOU. 26 THE COURT: ANYTHING ELSE? 27 MR. WAIER: NOTHING. 28 THE COURT: REMEMBER ABOUT THE STEP. WITH THAT, I WILL
page 813 1 CONCLUDE THE MORNING. DID YOU HAVE A QUESTION? 2 MR. LANE: NO. I JUST WANT -- 3 THE COURT: GO OFF THE RECORD. 4 5 (PROCEEDINGS RECESSED.) 6 7 THE COURT: DO YOU WANT TO CALL MRS. CARTO? 8 MR. WAIER: YES. 9 10 ELISABETH CARTO, 11 CALLED AS A WITNESS ON BEHALF OF THE DEFENDANTS, HAVING BEEN 12 PREVIOUSLY SWORN, TESTIFIED AS FOLLOWS: 13 DIRECT EXAMINATION 14 MR. WAIER: MAY I PROCEED? 15 THE COURT: YES. 16 17 BY MR. WAIER: 18 Q GOOD AFTERNOON, MRS. CARTO. 19 A HI. 20 Q YOU ARE THE WIFE OF ELISABETH CARTO — I MEAN, THE 21 WIFE OF WILLIS CARTO, EXCUSE ME? 22 A YES, I AM. 23 Q HOW LONG HAVE YOU BEEN MARRIED TO WILLIS? 24 A 38 YEARS. 25 Q AND YOU RESIDE? 26 A IN SAN DIEGO COUNTY. 27 Q HOW LONG HAVE YOU RESIDED AT YOUR HOME? 28 A SINCE 1981.
page 814 1 Q AND YOU STILL RESIDE THERE? 2 A YES. 3 Q I WOULD ASK YOU YOUR AGE. I KNOW I WOULD GET 4 SLAPPED IN THE FACE. I'LL NOT DO THAT. 5 A OLD ENOUGH TO LIE. 6 Q AT ANY POINT IN TIME DID YOU EVER MEET JEAN 7 FARREL-EDISON? 8 A YES, I DID. 9 Q WHEN WAS THE FIRST TIME THAT YOU MET JEAN 10 FARREL-EDISON? 11 A 1984. 12 Q DO YOU KNOW APPROXIMATELY WHEN? 13 A I BELIEVE IT WAS LATE SEPTEMBER 1984. 14 Q CAN YOU RECOUNT THE OCCASION WHEN THAT OCCURRED? 15 MR. BEUGELMANS: OBJECTION. IRRELEVANT. 16 THE COURT: OVERRULED. 17 THE WITNESS: YES. SHE AND I HAD ARRANGED TO MEET — I 18 WOULD MEET HER AT THE AIRPORT IN HANOVER, GERMANY. I PICKED 19 HER UP THERE. 20 BY MR. WAIER: 21 Q HAD YOU SPOKEN WITH JEAN FARREL-EDISON BEFORE THE 22 MEETING AT ANY POINT IN TIME? 23 A YES. 24 Q WHEN WAS THE FIRST TIME THAT YOU EVER SPOKE WITH 25 MISS FARREL-EDISON? 26 A IT WAS MONTHS BEFORE, BUT I DON'T REMEMBER. 27 Q DO YOU RECALL THE OCCASION WHEN YOU FIRST SPOKE 28 WITH HER?
page 815 1 A I BELIEVE SHE CALLED MY HUSBAND AT ONE TIME, AND I 2 GOT ON THE PHONE. 3 Q AND YOU RECALL THAT SHE DIED SOME TIME IN 1985? 4 A YES, AUGUST. 5 Q DO YOU RECALL THE DATE? 6 A I THINK IT WAS AUGUST 13 OR 18. 7 Q SO FROM THE PERIOD OF TIME THAT YOU FIRST SPOKE 8 WITH JEAN FARREL-EDISON UNTIL THE TIME OF HER DEATH, DID YOU 9 HAVE OCCASION TO SPEAK WITH MISS FARREL-EDISON OTHER THAN 10 WHAT YOU TESTIFIED TO? 11 A YES. WE TRAVELLED TOGETHER. 12 Q HOW MANY TIMES DID YOU TRAVEL TOGETHER? 13 A WE TOOK ONE TRIP TOGETHER. 14 Q WAS THIS ON I.H.R. BUSINESS? 15 A NOT REALLY, NO. 16 Q WHAT WAS THE OCCASION OF YOU TRAVELING WITH HER? 17 A TO GET ACQUAINTED, TO SORT OF FEEL EACH OTHER OUT 18 IF WE LIKED EACH OTHER. AND SHE HAD A CERTAIN PURPOSE IN 19 MIND THAT SHE WANTED TO ACCOMPLISH. SHE ASKED ME TO HELP 20 HER. 21 Q WHAT WAS THAT PURPOSE THAT YOU UNDERSTOOD IT TO 22 BE? 23 A PARTICULARLY IN GERMANY SHE WANTED TO RENT A 24 SAFETY DEPOSIT BOX, AND SHE WAS GOING TO PLACE SOME NECA 25 SHARES IN THAT BOX AND ALSO DIAMONDS, WHICH SHE SUBSEQUENTLY 26 DID. 27 Q PRIOR TO THAT POINT IN TIME WHEN YOU TRAVELLED 28 WITH HER TO GERMANY TO DO THAT, DID YOU HAVE ANY DISCUSSIONS
page 816 1 WITH HER CONCERNING NECA CERTIFICATES? 2 A YES. SHE ASKED ME TO SET THIS UP IN HERFORD WITH 3 THE BANK. 4 Q WAS THIS OVER THE TELEPHONE? 5 A YES. 6 Q DO YOU RECALL ANY DISCUSSIONS WITH — THAT YOU HAD 7 WITH HER ABOUT SETTING UP THE ACCOUNT? 8 MR. BEUGELMANS: OBJECTION. CALLS FOR HEARSAY. 9 THE COURT: OVERRULED. IT’s NOT FOR THE TRUTH OF THE 10 MATTER BUT JUST WHY THEN SHE MIGHT DO THINGS. 11 THE WITNESS: IT WASN'T AN ACCOUNT. 12 13 BY MR. WAIER: 14 Q WHAT WAS — WHAT DISCUSSION DID YOU HAVE WITH HER 15 CONCERNING THE NECA CERTIFICATES WITH RESPECT TO THE SAFE 16 DEPOSIT BOX? 17 A THAT I — IT WOULD BE ACCESSIBLE TO ME EASILY IF 18 SHE DIED AND A BANKER THAT KNEW ME; THAT SORT OF THING. 19 Q NOW PRIOR TO THAT TIME WAS THERE ANY DISCUSSION 20 WITH MISS FARREL-EDISON BETWEEN YOURSELF AND HER CONCERNING 21 YOUR HUSBAND TAKING THE LEGION BANKRUPT? 22 MR. BEUGELMANS: OBJECTION. CALLS FOR HEARSAY. 23 THE COURT: OVERRULED. 24 THE WITNESS: IT HAPPENED ON THAT TRIP THAT WE 25 DISCUSSED THAT. 26 27 BY MR. WAIER: 28 Q WHAT WAS SAID?
page 817 1 A WELL, SHE — SHE DID NOT — SHE WAS NOT SET ON ONE 2 PARTICULAR VEHICLE OF SECURING HER ASSETS AFTER HER DEATH. 3 SHE SAID WHATEVER MY HUSBAND FELT HAD TO BE DONE WAS ALL 4 RIGHT WITH HER. IF IT WASN'T THE LEGION, IT WAS SOMETHING 5 ELSE, BUT THE MAIN POINT WAS THAT THE ASSETS WOULD BE 6 SECURED — USED FOR WHAT SHE WANTED THEM TO BE USED AFTER 7 HER DEATH. AND SHE TRUSTED MY HUSBAND TO DO THAT IN ANY 8 WHICH WAY OR FORM. 9 MR. BEUGELMANS: MOVE TO STRIKE. NONRESPONSIVE. CALLS 10 FOR CHARACTER EVIDENCE OR RELATES CHARACTER EVIDENCE. ALSO 11 HEARSAY. 12 THE COURT: I'M GOING TO OVERRULE THE OBJECTION. 13 14 BY MR. WAIER: 15 Q WHAT DID YOU UNDERSTAND WERE THE PURPOSES OF JEAN 16 FARREL-EDISON, WHICH SHE WANTED THE BEARER CERTIFICATES AND 17 DIAMOND USED FOR? 18 A SHE WANTED TO HAVE THESE ASSETS — ALL HER ASSETS 19 INTO THE NECA CORPORATION, AND MY HUSBAND WAS SUPPOSED TO 20 CONTROL ALL THE BEARER SHARES ON THE DEATH SO THESE ASSETS 21 COULD BE PUT UNDER HIS CONTROL, AND HE WOULD HAVE THE 22 OBLIGATION AND RESPONSIBILITY TO USE THEM AS SHE WOULD WANT 23 TO. 24 Q DID SHE EXPLAIN HOW SHE WANTED THOSE USED? 25 A YES. 26 MR. BEUGELMANS: OBJECTION. CALLS FOR HEARSAY. 27 THE COURT: OVERRULED. 28
page 818 1 BY MR. WAIER: 2 Q WHAT DID SHE TELL YOU? 3 A SHE — WE TALKED ABOUT FOR A WHOLE WEEK WHILE WE 4 WERE TOGETHER. 5 Q CONDENSE IT. 6 A THE POLITICAL INTERESTS SHE HAD. THE TAX THING 7 WAS OVERRIDING. SHE WANTED TO PRESERVE HER ASSETS ALL HER 8 LIFE. THIS WAS NOTHING UNUSUAL. EVEN AFTER THE DEATH SHE 9 WANTED TO BE PUT WHERE THERE WOULD BE MINIMUM TAX, ONLY WHAT 10 THE LAW ALLOWED. AND SHE WAS VERY INTERESTED IN — SHE WAS 11 ATTENDING FINANCIAL MEETINGS ALL OVER THE WORLD. SHE 12 ACTUALLY TOOK ME TO A PLACE WHERE SHE ATTENDED ONE. 13 AND WE TALKED ABOUT INVESTMENTS AND MY INTERESTS 14 AND I BELIEVED IN REAL ESTATE AND SHE DIDN'T. AND BUT SHE 15 KNEW THAT — THAT THE OVERRIDING INTERESTS TO HER WERE 16 REPRESENTED BY HER. 17 MY HUSBAND HAD TOLD HER WHAT HE HAD BEEN DOING FOR 18 THE LAST 30 YEARS POLITICALLY. IT JIVED WITH HERS. 19 Q WHAT WAS THAT? 20 A LIBERTY LOBBY, BEING — PARTIALLY WORKING ON WITH 21 BEING RESPONSIBLE FOR THE ISSUING OF A TAXPAYERS' BILL OF 22 RIGHTS, WHICH FINALLY CAME OUT OF CONGRESS OR PRELIMINARY 23 BILL THAT WE WORKED ON. SHE WAS INTERESTED IN HISTORY, 24 REVISIONISM, OBVIOUSLY, JUST THE GENERAL CONSERVATIVE 25 AGENDA. 26 Q DID SHE TELL YOU HOW SHE WANTED HER MONEY USED 27 UPON HER DEATH? 28 MR. BEUGELMANS: OBJECTION. CALLS FOR HEARSAY.
page 819 1 THE COURT: IT’s ALREADY BEEN ASKED AND ANSWERED, I 2 THINK. 3 4 5 BY MR. WAIER: 6 Q DID SHE DURING THE CONVERSATION WHERE YOU 7 INDICATED WE HAD THIS WEEK LONG CONVERSATION, WAS THIS IN 8 GERMANY? 9 A GERMANY AND SWITZERLAND. 10 Q NOW DURING THE WEEK LONG CONVERSATION AFTER THE 11 TOPIC CAME UP WITH WILLIS TAKING THE LEGION BANKRUPT, DID 12 SHE EXPRESS ANY CONCERN WITH THIS CONCERNING THE POTENTIAL 13 ESTATE? 14 A NOT REALLY CONCERN. SHE — WE TALKED ABOUT IT. 15 WHAT LET’s SAY IF THAT HAD HAPPENED. BUT SHE HAD MY HUSBAND 16 BEFORE. SHE DIDN'T WANT ANYTHING BAD TO HAPPEN TO THE 17 I.H.R., OBVIOUSLY, BUT SHE WANTED TO DISCUSS IT WITH ME 18 FURTHER, WHAT-IF. SO WE — SHE AND I TALKED ABOUT IT AND 19 HER. I CAN'T REMEMBER EVERYTHING WORD FOR WORD, OBVIOUSLY. 20 MY IMPRESSION STILL IS, AND I BELIEVE THAT 21 WHATEVER VEHICLE MY HUSBAND CHOOSE IF IT HAD TO BE TAKEN, IF 22 THE NECA SHARES WERE NOT LEFT TO THE LEGION, IT WAS FINE; 23 WHEREVER HE WANTED TO PUT IT IN CASE IT HAD TO BE PUT IN 24 BANKRUPTCY. 25 Q WAS THERE ANY DISCUSSION ABOUT THE MERMELSTEIN 26 CASE? 27 A YES. I REMEMBER EXACTLY. IT WAS FUNNY. 28 “I JUST DON'T WANT MY ASSETS TO SLUSH AROUND
page 820 1 WHERE MERMELSTEIN CAN GRAB THEM." 2 Q DID SHE INDICATE AT THIS POINT IN TIME SHE DID NOT 3 WANT — IF THAT WAS TO HAPPEN, SHE DID NOT WANT THE ASSETS 4 IN THE LEGION? 5 A YES. 6 MR. BEUGELMANS: OBJECTION. CALLS FOR HEARSAY. 7 THE COURT: LET THE ANSWER STAND. 8 9 BY MR. WAIER: 10 Q AT THE TIME THAT UP UNTIL THE TIME OF HER DEATH IN 11 AUGUST OF 1985 OF JEAN FARREL-EDISON’s DEATH, YOU WERE 12 INVOLVED IN LEGION ACTIVITIES? 13 A YES. 14 Q WHAT WAS YOUR STATUS UP TO THAT POINT IN TIME OF 15 HER DEATH? 16 A AT THAT TIME I WAS DOING VOLUNTEER WORK. 17 Q WHAT DO YOU MEAN BY THAT? 18 A I SPENT LOTS OF HOURS WORKING FOR THE I.H.R. 19 WITHOUT COMPENSATION. 20 Q WERE YOU ALSO WORKING FOR LIBERTY LOBBY AT THE 21 TIME? 22 A THAT WAS MY MAIN JOB. 23 Q WHAT WAS YOUR MAIN JOB WITH LIBERTY LOBBY? 24 A I WAS A SUPERVISOR. 25 Q WAS THERE — WHEN YOU WENT TO THIS — WENT ON THE 26 TRIP TO GERMANY TO MEET WITH JEAN FARREL-EDISON, WAS THERE 27 ANY DISCUSSION ABOUT LIBERTY LOBBY? 28 A YES.
page 821 1 MR. BEUGELMANS: OBJECTION. CALLS FOR HEARSAY. 2 THE COURT: I'M GOING TO OVERRULE THE OBJECTION. 3 4 BY MR. WAIER: 5 Q WHAT WAS THE DISCUSSION CONCERNING LIBERTY LOBBY? 6 A I EXPLAINED HOW IT WAS STARTED, WHICH SHE DIDN'T 7 KNOW THAT MY HUSBAND STARTED IT IN THE 50'S. JUST THE 8 GENERAL PROFILE OF LIBERTY LOBBY ANY SUPPORTER WOULD EXPECT, 9 ALL THE GOOD THINGS. 10 Q DID THERE COME A TIME PRIOR TO HER DEATH THAT YOU 11 ARE AWARE OF WHERE JEAN FARREL-EDISON QUIT MAKING 12 CONTRIBUTIONS TO THE LEGION BUT RATHER MADE CONTRIBUTIONS TO 13 THE FOUNDATION TO DEFEND THE FIRST AMENDMENT? 14 A YES. 15 Q HOW DID YOU BECOME AWARE OF THAT? 16 A I WOULD SEE HER CHECKS COME IN AT THE I.H.R. 17 OFFICE. THEY WERE MAILED TO CALIFORNIA, AND THEY WERE 18 MAILED OUT TO THE FOUNDATION TO DEFEND THE FIRST AMENDMENT, 19 AND SHE REFERRED TO IT AT TIMES IN THE LETTER TO THAT FACT. 20 Q DID YOU HAVE ANY DISCUSSIONS WITH HER IN 21 CONNECTION WITH HER MAKING CONTRIBUTIONS TO THE F.D.F.A., 22 FOUNDATION TO DEFEND THE FIRST AMENDMENT, AS OPPOSED TO THE 23 LEGION? 24 A I DID NOT DISCUSS THAT WITH HER. 25 Q DID YOU HAVE ANY UNDERSTANDING OF WHY SHE WAS 26 MAKING THOSE CONTRIBUTIONS? 27 MR. BEUGELMANS: OBJECTION. CALLS FOR SPECULATION. 28 THE COURT: SUSTAINED.
page 822 1 BY MR. WAIER: 2 Q AT THIS POINT IN TIME DID YOU HAVE ANY ROLE WITH 3 THE FOUNDATION TO DEFEND THE FIRST AMENDMENT? 4 MR. BEUGELMANS: OBJECTION. VAGUE AS TO TIME. 5 MR. WAIER: I SAID AT THIS TIME, THE TIME 1984 THROUGH 6 '85. 7 THE COURT: LET ME RULE BEFORE YOU START ARGUING. 8 DON'T ARGUE WITH HIM. IF YOU CONVINCED HIM YOU WOULDN'T 9 NEED ME I SAID A COUPLE OF TIMES. OVERRULED. 10 THE WITNESS: NO. 11 12 BY MR. WAIER: 13 Q DURING 1984-1985 AS A VOLUNTEER FOR THE LEGION, 14 DID YOU REPORT TO ANYBODY? 15 A YES. 16 Q WHO DID YOU REPORT TO? 17 A REPORTED TO MY HUSBAND AND ALSO TO TOM MARCELLUS. 18 Q NOW I WOULD LIKE TO HAND YOU A NUMBER OF 19 EXHIBITS. I WILL REVIEW THOSE IN SHORT ORDER. 20 A THE BOOK IS STILL LYING HERE. 21 MR. BEUGELMANS: MAY I APPROACH, YOUR HONOR? 22 MR. WAIER: I'M GOING TO CALL THEM OUT FOR YOU. 23 MR. BEUGELMANS: I WASN'T HERE YESTERDAY. I'M NOT 24 FAMILIAR WITH THEM. 25 MR. WAIER: THESE WEREN'T INTRODUCED YESTERDAY. 26 THE COURT: HE CAN LOOK AT THEM. 27 MR. WAIER: YOUR HONOR, SO I CAN GET THROUGH THIS 28 QUICKLY, MAY I SEE YOUR BOOKLET TO MAKE SURE THESE NUMBERS
page 823 1 ARE CORRECT? I BELIEVE THEY ARE. 2 THE COURT: SURE. 3 4 BY MR. WAIER: 5 Q I'M GOING TO HAND YOU A GROUP OF DOCUMENTS AND I 6 WILL DESCRIBE THEM. EXHIBIT 143 MARKED FOR IDENTIFICATION, 7 WHICH IS A LETTER PURPORTEDLY FROM JEAN FARREL-EDISON TO YOU 8 DATED DECEMBER 19, 1994. 9 I'M GOING TO HAND YOU ANOTHER LETTER, DATED 10 JANUARY 14, 1985 TO BOTH YOU AND WILLIS PURPORTEDLY FROM 11 JEAN, MARKED FOR IDENTIFICATION AS EXHIBIT 147. 12 I'M GOING TO HAND YOU ANOTHER LETTER THAT I 13 BELIEVE, AND I NEED TO CHECK THIS ONE, IT’s DATED MARCH 3, 14 1985 FROM ELISABETH I BELIEVE MARKED FOR IDENTIFICATION AS 15 151. 16 I WANT TO HAND YOU ANOTHER LETTER. 17 MR. BEUGELMANS: COUNSEL, HOW MANY PAGES IS THAT? 18 MR. WAIER: TWO PAGES. 19 20 BY MR. WAIER: 21 Q I WANT TO HAND YOU ANOTHER LETTER MARKED FOR 22 IDENTIFICATION AS EXHIBIT 158, DATED MAY 16, 1985 TO BOTH 23 YOU AND YOUR HUSBAND PURPORTEDLY FROM JEAN. 24 MR. WAIER: IS THAT RIGHT, YOUR HONOR? 25 THE COURT: WHAT NUMBER? 26 MR. WAIER: MAY 16. 27 THE COURT: 158 IS MAY 25, 1985. 28 MR. WAIER: THAT’s 157. AND THEN I HAD IT RIGHT, I
page 824 1 BELIEVE. 2 THE COURT: MAY 16, 1985 IS NUMBER 157. THE LETTER HAS 3 WRITTEN ON THE BOARD, “SPECIAL GREETINGS TO MUTTIE," 4 M-U-T-T-I-E. 5 MR. WAIER: I WANT TO HAND YOU ANOTHER HANDWRITTEN 6 LETTER, WHICH IS DATED JANUARY 28, 1985 TO YOU, MRS. CARTO, 7 I BELIEVE EXHIBIT 148. 8 MR. BEUGELMANS: DATE, COUNSEL? 9 MR. WAIER: JANUARY 28, 1985. 10 THE COURT: I HAVE — THAT’s RIGHT. 11 12 BY MR. WAIER: 13 Q I WOULD LIKE TO HAND YOU ONE OTHER LETTER, DATED 14 APRIL 24, 1985, PURPORTEDLY TO YOU, ELISABETH, SIGNED BY 15 PURPORTEDLY BY JEAN. I BELIEVE THAT IS EXHIBIT 154. APRIL 16 24. IT’s 15, EXCUSE ME. 17 MR. BEUGELMANS: APRIL 24, '85. 18 MR. WAIER: YES. 19 20 BY MR. WAIER: 21 Q LET ME HAND YOU THESE LETTERS MARKED FOR 22 IDENTIFICATION. ASK YOU TO TAKE A LOOK AT THESE. 23 WHILE YOU ARE LOOKING AT THESE, DID YOU CORRESPOND 24 FREQUENTLY DURING THE APPROXIMATELY TWO YEARS THAT YOU KNEW 25 JEAN FARREL-EDISON ON A PERSONAL LEVEL WITH HER? 26 A YES. 27 Q DID YOU BECOME FRIENDS WITH HER? 28 A YES.
page 825 1 Q DID YOU HAVE FOND AFFECTION FOR HER? 2 A YES. 3 Q DO YOU RECALL IF SHE HAD FOND AFFECTION FOR YOU? 4 A I THINK SHE LIKED ME. 5 Q IN FACT, ARE THOSE LETTERS FROM HER TO YOU? 6 A YES. 7 Q AND IF YOU WILL TAKE A LOOK AT THOSE LETTERS. FOR 8 THE MOST PART, DO THOSE LETTERS TALK ABOUT THINGS OTHER THAN 9 BUSINESS? 10 A YES. THAT IS THE FIRST ONE. 11 Q WHEN YOU — I'M SORRY. GO AHEAD. 12 A SOME ARE MIXED BAG. 13 Q FOR THE MOST PART ARE THEY PRIMARILY PERSONAL 14 DEALINGS BETWEEN YOU AND MISS FARREL-EDISON? 15 A YES. 16 Q NOW I'M GOING TO INTERCHANGE FARREL-EDISON AND 17 EDISON-FARREL. I'LL STICK WITH MISS FARREL. 18 A SHE DIDN'T USE THE NAME EDISON. 19 Q AT SOME POINT IN TIME DID YOU LEARN THAT SHE HAD 20 DIED? 21 A YES, I DID. 22 Q WHEN DID YOU FIRST LEARN SHE HAD DIED? 23 A WHEN MY HUSBAND TOLD ME. 24 Q DO YOU RECALL APPROXIMATELY WHEN? 25 A ABOUT A MONTH AFTER HER DEATH. 26 Q FROM THAT POINT IN TIME DID YOU HAVE ANY 27 DISCUSSIONS WITH ANYONE OVER IN EUROPE CONCERNING 28 MISS FARREL?
page 826 1 MR. BEUGELMANS: OBJECTION. CALLS FOR HEARSAY. 2 THE COURT: OVERRULED. THE ANSWER CAN BE “YES” OR “NO" 3 DEPENDING ON WHO OR WHAT WAS SAID. MAY OR MAY NOT BE 4 HEARSAY. 5 THE WITNESS: YES. 6 7 BY MR. WAIER: 8 Q WHO DID YOU SPEAK WITH? 9 A ATTORNEYS. 10 Q NOW DID THERE COME A TIME AFTER SHE DECIDED WHERE 11 YOU TRAVELLED TO EUROPE TO SPEAK WITH ATTORNEYS? 12 A YES. 13 Q WHAT WAS YOUR PURPOSE IN DOING THAT? 14 A WE HAD TO FIND A SUITABLE ATTORNEY TO CHALLENGE 15 MADAM ALTHAUS’s CONTENTION. WE HAD TO FIND AN ATTORNEY TO 16 TAKE OUR CASE. 17 Q WHO PAID — HOW MANY TRIPS DID YOU MAKE TO EUROPE 18 LOOKING OR TRYING TO LOCATE ATTORNEYS? 19 A WE CHANGED ATTORNEYS A NUMBER OF TIMES. I WENT 20 OVER THERE EVERY TIME. I WOULD SAY AT LEAST FOUR OR FIVE 21 TIMES JUST FOR THE ATTORNEY PART. 22 Q HOW MANY ATTORNEYS DID YOU INTERVIEW? 23 A FOUR OR FIVE. 24 Q AND WHO PAID FOR YOUR TRIPS WHEN YOU WENT OVER 25 THERE INTERVIEWING ATTORNEYS? 26 A I DID. 27 Q AND WHO PAID FOR YOUR ROOMS WHILE YOU STAYED 28 THERE?
page 827 1 A I DID. 2 Q WHO PAID FOR YOUR MEALS? 3 A I DID. 4 Q WAS THIS VERY EXPENSIVE? 5 A VERY EXPENSIVE. 6 Q HOW MANY — YOU SPOKE WITH FOUR OR FIVE SETS OF 7 ATTORNEYS; IS THAT CORRECT? 8 A YES. 9 Q DID YOU — DID ANY OF THEM OFFER A CONTINGENCY IN 10 HANDLING ANY LITIGATION IN EUROPE? 11 A NO. 12 Q DID THEY TELL YOU WHY NOT? 13 A YES. 14 Q WHAT DID THEY TELL YOU IN CONNECTION WITH A 15 CONSPIRACY? 16 MR. BEUGELMANS: OBJECTION. HEARSAY. 17 THE COURT: I'LL SUSTAIN THE OBJECTION. I HAVE 18 EVIDENCE IN IT’s ILLEGAL ANYWAY. 352. 19 20 BY MR. WAIER: 21 Q NOW YOU INDICATE DID YOU, AFTER YOU WERE AWARE 22 THAT LITIGATION WAS COMMENCED IN EUROPE WITH RESPECT TO THE 23 FARREL-EDISON ESTATE -- 24 A PLEASE REPEAT THAT. 25 Q ARE YOU AWARE THAT LITIGATION WAS ACTUALLY 26 COMMENCED IN EUROPE AFTER JEAN FARREL DIED? 27 A YES. 28 Q CONCERNING HER ESTATE?
page 828 1 A YES. 2 Q DID YOU TRAVEL TO EUROPE IN THE COURSE OF ANY OF 3 THOSE LITIGATIONS? 4 A YES. 5 Q HOW MANY TIMES DID YOU PERSONALLY TRAVEL TO EUROPE 6 DURING THAT TIME? 7 A FIVE, SIX TIMES. 8 Q WHO PAID FOR THOSE TRIPS? 9 A I DID. 10 Q AND WHO PAID FOR YOUR ROOMS WHILE YOU WERE ON 11 THOSE TRIPS? 12 A I DID. 13 Q WHO PAID FOR YOUR MEALS? 14 A I DID. 15 Q WHO PAID FOR THE TRANSPORTATION WHILE YOU WERE IN 16 EUROPE? 17 A I DID. 18 Q WAS THAT COSTLY? 19 A VERY COSTLY. 20 Q DID YOU ATTEND ANY OF THE COURT PROCEEDINGS THAT 21 WERE TAKING PLACE IN EUROPE? 22 A YES. 23 Q HOW MANY TIMES DID YOU ATTEND COURT PROCEEDINGS? 24 A THREE TIMES. 25 Q DID YOU ATTEND ANY COURT PROCEEDINGS IN LONDON? 26 A YES. 27 Q AND WHAT DID THAT CASE HAVE TO DO WITH? 28 A JURISDICTION.
page 829 1 Q JURISDICTION OVER WHAT? 2 A WHERE THE ESTATE SHOULD BE SETTLED. 3 Q DO YOU RECALL THE ATTORNEYS THAT WERE HANDLING 4 THAT ACTION? 5 A IN LONDON? 6 Q YES. 7 A IT WAS MR. HOOPER TOGETHER WITH MISS GLOUSTER 8 (PHONETICS) BARRISTER AND ANOTHER GIRL, LESLIE STUART. 9 Q DO YOU RECALL HOW THOSE ATTORNEYS WERE PAID DURING 10 THE PERIOD OF TIME? 11 A THEY WERE PAID BY MY HUSBAND. 12 Q HOW DO YOU KNOW THAT? 13 A BECAUSE I KNOW HE SENT THE MONEY. 14 Q DID YOU ACTUALLY SEE HIM SENDING THE MONEY? 15 A MAYBE NOT SEE THEM, BUT THEY WERE AT — THEY ASK 16 FOR THE MONEY, AND THEY WERE PAID IN ORDER TO GO TO COURT OR 17 THEY — THEY WOULDN'T HAVE GONE TO COURT. 18 Q DID THE LEGION PAY ANY OF THAT MONEY? 19 A NO. 20 Q AT THIS POINT IN TIME WERE YOU DOING VOLUNTEER 21 WORK AS A TREASURER FOR THE LEGION? 22 MR. BEUGELMANS: OBJECTION. OVERBROAD TO THIS TIME. 23 TALKING ABOUT A PERIOD OF 6 YEARS. 24 25 BY MR. WAIER: 26 Q WAS THERE A POINT IN TIME WHERE YOU WERE THE 27 TREASURER FOR THE LEGION? 28 A YES.
page 830 1 Q WHAT PERIOD OF TIME WAS THAT? 2 A I THINK THE SHORT TIME THAT THE FURRS LEFT IN '79 3 I WAS THE TREASURER UNTIL SHE CAME BACK ON BOARD. I MIGHT 4 HAVE BEEN THE TREASURER FOR A SHORT TIME LATE '85, EARLY 5 '86, BUT I WOULD HAVE TO CHECK THOSE DATES. 6 Q WHEN YOU WENT ON THESE TRIPS TO EUROPE BOTH TO 7 INTERVIEW ATTORNEYS AND TO ATTEND VARIOUS COURT PROCEEDINGS 8 AND BECOMING INVOLVED IN THE LITIGATIONS, DID YOU HAVE 9 ANY — UPON YOUR RETURN DID YOU HAVE ANY DISCUSSIONS WITH 10 EITHER LEWIS OR LAVONNE FURR? 11 A I ALWAYS TALKED TO MRS. FURR. I INVITED HER TO 12 COME ALONG WITH ME TO LONDON. I DIDN'T WANT TO GO ALONE. 13 Q WHEN DID THIS CONVERSATION TAKE PLACE? 14 A I THINK IT WAS THE SECOND TRIAL IN LONDON IN '89. 15 Q WHAT DID MRS. FURR TELL YOU? 16 MR. BEUGELMANS: OBJECTION. CALLS FOR HEARSAY, BOTH 17 DEFENDANTS. CONVERSATIONS BETWEEN DEFENDANT ITSELF ARE NOT 18 ADMISSIBLE. 19 THE COURT: SUSTAINED. 20 MR. WAIER: GOES TO THE STATE OF MIND, YOUR HONOR, WITH 21 RESPECT TO HOW SHE WOULD BE HANDLING ASSETS. IF YOU WOULD 22 LIKE ME TO ASK LEADING QUESTIONS I COULD. 23 THE COURT: NO. I'LL SUSTAIN THE OBJECTION. YOU CAN 24 ASK AFTER TALKING WITH THE FURRS WHAT DID SHE DO. 25 26 BY MR. WAIER: 27 Q AFTER TALKING WITH THE FURRS WHAT DID YOU DO? 28 A I WENT TO LONDON ON MY OWN.
page 831 1 Q AND YOU PAID FOR THAT TRIP? 2 A YES. 3 Q DID YOU REQUEST THE LEGION TO PAY FOR THAT TRIP? 4 A NO. 5 Q WHY NOT? 6 A I KNEW THEY DIDN'T HAVE THE MONEY. 7 Q ON ANY OF YOUR TRIPS TO EUROPE WITH RESPECT TO 8 MISS FARREL-EDISON’s ESTATE, DID YOU EVER ASK THE LEGION FOR 9 MONEY? 10 A NO. 11 Q WHY NOT? 12 A BECAUSE I KNEW THERE WASN'T ANY. 13 Q HOW DID YOU KNOW THAT? 14 A I WAS KEEPING THE CHECKBOOK. 15 Q WERE YOU AWARE THAT DURING 1986 THE ASSETS OF THE 16 LEGION WERE ENCUMBERED? 17 A YES. 18 Q WERE YOU AWARE THAT IN 1991 THE ASSETS WERE AGAIN 19 ENCUMBERED PURSUANT TO A PROMISSORY NOTE OF $187,000? 20 A YES. 21 Q WHY WOULD YOU, MRS. CARTO, OUT OF YOUR OWN POCKET 22 AND EXPENSE TRAVEL TO EUROPE BOTH TO INTERVIEW ATTORNEYS AS 23 WELL AS ATTEND COURT PROCEEDINGS? 24 MR. BEUGELMANS: OBJECTION. IRRELEVANT. 25 THE COURT: OVERRULED. 26 THE WITNESS: BECAUSE I WAS — I WAS DOING THE RIGHT 27 THING TO SECURE HER ASSETS THAT WOULDN'T GO TO PEOPLE SHE 28 HAD NOT MEANT THEM TO GO TO. I THINK I WAS REALLY SORT OF
page 832 1 TRYING TO FIGHT FOR HER IN HER MEMORY. 2 3 BY MR. WAIER: 4 Q WERE YOU AWARE THAT JEAN FARREL’s WILL DID NOT 5 LEAVE ANYTHING TO THE LEGION? 6 A YES. 7 Q WERE YOU AWARE THAT THE JEAN FARREL’s WILL LEFT 8 EVERYTHING TO JOAN ALTHAUS? 9 A YES. 10 Q DID ANY OF THE ATTORNEYS YOU INTERVIEWED — STRIKE 11 THAT. 12 DID YOU ENTER INTO ANY — STRIKE THAT. 13 WOULD YOU HAVE A CONVERSATION WITH EITHER LEWIS OR 14 LAVONNE FURR UPON RETURNING AFTER EACH AND EVERY ONE OF YOUR 15 TRIPS TO EUROPE? 16 A WITH LAVONNE, YES. 17 Q WHEN DID YOU STOP GOING TO EUROPE? 18 A AT THE TIME OF THE SETTLEMENT. 19 Q DO YOU RECALL THAT WAS SOMETIME IN 1990? 20 A YES. 21 Q SO FOR A PERIOD OF A LITTLE OVER 5 YEARS YOU WERE 22 MAKING THE TRIPS? 23 A YES. 24 Q APPROXIMATELY HOW MUCH TIME DID YOU SPEND ON YOUR 25 OWN TICKET ON THE FARREL ESTATE? 26 MR. BEUGELMANS: OBJECTION. RELEVANCE. 27 THE COURT: OVERRULED. 28 THE WITNESS: I TRIED TO FIGURE THAT OUT THE OTHER
page 833 1 NIGHT, AND I THINK I MUST HAVE PUT 3,000 HOURS INTO THIS 2 THING. 3 BY MR. WAIER: 4 Q DID YOU HELP WITH ANY OF THE — OF THE PAPERWORK 5 OVERSEAS IN CONNECTION WITH THE COURT PROCEEDINGS? 6 A YES. WE WERE INUNDATED WITH ABSOLUTELY TONS OF 7 PAPER BY THE OTHER SIDE. I FAMILIARIZED MYSELF WITH 8 EVERYTHING THAT WAS IN THERE BECAUSE MY HUSBAND DIDN'T HAVE 9 TIME TO DO THAT. 10 Q NOW YOU ALSO INDICATED THERE WAS SOME LITIGATION 11 IN SWITZERLAND, I BELIEVE? 12 A YES. 13 Q DID YOU ATTEND ANY OF THE PROCEEDINGS IN 14 SWITZERLAND? 15 A IT NEVER WENT TO TRIAL, BUT I ATTENDED THE 16 SETTLEMENT HEARING AGREEMENT, HEARING WHERE MRS. MADAM 17 ALTHAUS SHOWED UP IN 1990. 18 Q DID YOU REVIEW THE PLEADINGS AND OTHER COURT 19 PAPERS THAT HAD BEEN FILED IN THE LITIGATION? 20 A YES. 21 Q WHAT WAS THAT LITIGATION ABOUT? 22 MR. BEUGELMANS: OBJECTION. 23 THE WITNESS: ABOUT NECA SHARES. 24 MR. BEUGELMANS: WITHDRAW THE OBJECTION. 25 26 BY MR. WAIER: 27 Q IN MAKING THESE VARIOUS TRAVELS TO EUROPE AND 28 BEING INVOLVED IN THE SETTLEMENT OF THE ESTATE, WHO DO YOU
page 834 1 BELIEVE WAS THE BENEFICIARY WITH RESPECT TO THAT PORTION OF 2 THE FARREL ESTATE NOT GOING TO MISS ALTHAUS? 3 MR. BEUGELMANS: OBJECTION. NO FOUNDATION. 4 COMPETENCE. 5 THE COURT: OVERRULED. I WILL ALLOW HER TO GIVE THE 6 OPINION SINCE SHE PUT SO MUCH TIME AND EFFORT INTO THIS. 7 THE WITNESS: I BELIEVE IT WAS LEFT TO THE TOTAL 8 CONTROL OF MY HUSBAND. 9 10 BY MR. WAIER: 11 Q THAT WAS TO USE THE FUNDS IN ANY FASHION OR 12 DISCRETION AS LONG AS THEY PROMOTED JEAN FARREL-EDISON'S 13 CAUSES? 14 A TOTALLY WITH HER WISHES. 15 Q DID YOU TELL THIS TO LAVONNE FURR DURING THIS 16 PERIOD OF TIME FROM 1985 THROUGH 1990? 17 A YES. 18 MR. BEUGELMANS: OBJECTION. CALLS FOR HEARSAY. 19 THE COURT: OVERRULED. LET THE ANSWER STAND. 20 21 BY MR. WAIER: 22 Q DID LAVONNE FURR EVER OBJECT TO YOU WITH RESPECT 23 TO THAT? 24 A NO, SHE DIDN'T. 25 Q DID LEWIS FURR EVER OBJECT TO THAT? 26 A NO. 27 Q YOU WERE IN THE COURTROOM WHEN HARVEY TAYLOR 28 TESTIFIED?
page 835 1 A YES. 2 Q DO YOU RECALL HE TESTIFIED WITH RESPECT TO A 3 MEETING THAT TOOK PLACE BETWEEN THE TWO OF YOU? 4 A YES. 5 Q DO YOU RECALL WHERE THAT MEETING TOOK PLACE? 6 A HACIENDA HOTEL, L.A. 7 Q DO YOU RECALL WHEN THE MEETING TOOK PLACE, 8 APPROXIMATELY? 9 A I REMEMBER RACKING MY BRAIN. EITHER EARLY 1990 OR 10 LATE '89. IT WAS SHORTLY AFTER I HAD COME BACK FROM ONE OF 11 MY TRIPS OVER THERE. 12 Q WHAT WAS THE OCCASION OF YOU MEETING HIM? 13 A I HAD TO PICK UP MY HUSBAND AT THE AIRPORT. 14 Q YOU INDICATED THAT YOU HAD JUST COME BACK. COME 15 BACK FROM WHERE? 16 A I JUST COME BACK FROM SWITZERLAND JUST A FEW WEEKS 17 BEFORE. 18 Q WAS THAT ALSO WITH RESPECT TO THE FARREL-EDISON 19 ESTATE? 20 A YES. 21 Q WAS THIS A PREARRANGED MEETING? 22 A NO, IT WAS ACCIDENTAL. 23 Q HOW DID THAT OCCUR? 24 A I WAS SITTING IN THE RESTAURANT EATING DINNER 25 WAITING TO GO TO THE AIRPORT, AND SOMEBODY TAPPED ME ON THE 26 SHOULDER. IT WAS HARVEY TAYLOR, SO WE HAD A NICE CHAT. 27 Q HOW LONG DID YOU SPEAK WITH MR. TAYLOR? 28 A ABOUT AN HOUR.
page 836 1 Q WAS THIS IN THE RESTAURANT? 2 A YES. 3 Q AND DID YOU SAY ANYTHING TO HIM CONCERNING THE 4 FARREL ESTATE? 5 A YES. 6 MR. BEUGELMANS: OBJECTION. CALLS FOR HEARSAY. 7 THE COURT: I'M GOING TO OVERRULE IT. I THINK IT WILL 8 COME IN TO CONTRADICT WHAT MR. TAYLOR SAID, RIGHT? 9 MR. BEUGELMANS: FOR THE RECORD, MR. TAYLOR HAS BEEN 10 EXCUSED AS A WITNESS. 11 THE COURT: I THINK THE SAME RULING TOWARD YOU AS I DID 12 FOR HIM. 13 14 BY MR. WAIER: 15 Q WHAT WAS SAID AT THAT MEETING? 16 A IT WAS — I TOLD HIM I HAD JUST COME. BASICALLY 17 WE STARTED TO TALKING ABOUT THE MERMELSTEIN CASE. YOU CAN'T 18 CHITCHAT WITH MR. TAYLOR. I DON'T KNOW HIM WELL ENOUGH TO 19 CHITCHAT. WE HAD A GOOD CHAT ABOUT SUBSTANTIAL MATTERS. WE 20 WERE TALKING ABOUT THE MERMELSTEIN LITIGATION. HOW 21 DIFFICULT IT WAS TO KEEP THESE GOING. AND I TOLD HIM THERE 22 MIGHT BE A LIGHT AT THE END OF THE TUNNEL BECAUSE WE WERE 23 COMING HOPEFULLY IN A SITUATION WHERE MY HUSBAND COULD 24 PROVIDE SOME REAL MONEY TO FIGHT THIS THING PROPERLY. 25 Q MEANING THE MERMELSTEIN CASE? 26 A YES. 27 Q DID YOU EXPLAIN TO MR. TAYLOR WHERE THE MONEY 28 MIGHT BE COMING FROM?
page 837 1 A YES. 2 Q WHAT DID YOU SAY TO HIM? 3 A I SAID AN AMERICAN LADY IN SWITZERLAND WHO LEFT 4 HER ESTATE TO MY HUSBAND’s CONTROL, AND WE HAD A TERRIFIC 5 LITIGATION GOING, BUT WE WERE HOPING IT WAS WINDING OUT OR 6 WINDING DOWN. IT WAS ABOUT THAT TIME IT WAS WINDING DOWN, 7 AND THAT HOPEFULLY THERE WOULD BE SOME MONEY SOON. 8 Q WHAT DID MR. TAYLOR SAY? 9 A HE SAID, SOUNDS WONDERFUL. WHAT ELSE COULD HE 10 SAY? I DON'T REMEMBER THE EXACT WORDS. 11 Q ANYTHING ELSE YOU CAN RECALL IN YOUR DISCUSSION 12 WITH MR. TAYLOR IN THAT CONVERSATION? 13 A WELL, EVERYBODY WAS ALWAYS WORRIED THAT 14 MERMELSTEIN WAS GRABBING MONEY THAT SHOULDN'T HAVE GONE TO 15 HIM; AND SO WHEN I TOLD HIM ABOUT THE ESTATE, HE MADE THAT 16 SAME COMMENT: BE SURE THAT IT’s SAFE, AND MERMELSTEIN 17 DOESN'T GET IT. 18 Q NOW IS THAT ALL YOU RECALL BEING DISCUSSED? 19 A WELL, WE TALKED ABOUT OTHER THINGS BUT THAT'S 20 OBVIOUSLY THE MAIN THING. 21 Q NOW AT THAT POINT IN TIME WAS YOUR HUSBAND ALSO 22 STAYING IN THE HOTEL WITH YOU? 23 A HE HADN'T ARRIVED YET. 24 Q WERE YOU PRIVY TO ANY TELEPHONE CONVERSATION 25 BETWEEN YOUR HUSBAND AND MR. TAYLOR ON THAT TRIP? 26 A YES. 27 Q AND HOW WERE YOU PRIVY TO THAT CONVERSATION? 28 A I LEFT MR. TAYLOR ABOUT 9 O'CLOCK, AND I STARTED
page 838 1 TO LOOK FOR MY HUSBAND AT THE AIRPORT. WE MISSED EACH 2 OTHER. HE HAD GONE TO THE HOTEL. I WAS LOOKING AT THE 3 AIRPORT. I WENT TO MY ROOM 20 AFTER 10, AND MY HUSBAND WAS 4 SORT OF ANGRY BECAUSE I WASN'T WHERE I WAS SUPPOSED TO BE, 5 WHICH HAD SOMETHING TO DO WITH TALKING WITH MR. TAYLOR A 6 LONG TIME. I GOT CARRIED AWAY. 7 AND MY HUSBAND WAS — HE WAS TIRED. IT WAS THE 8 TIME WE WENT TO BED, READY TO GO TO BED. I CAME IN, AND I 9 SAID: “OH, AND GUESS WHO I SAW? HARVEY TAYLOR." 10 HE SAID: “HARVEY? I WANTED TO TALK TO HARVEY." 11 MR. BEUGELMANS: OBJECTION. CALLS FOR HEARSAY. 12 THE COURT: OVERRULED. 13 THE WITNESS: AND HE HAD GIVEN ME THE ROOM NUMBER AND 14 MY HUSBAND CALLED HIM. AND HE HAD SAID HE HAD GONE TO BED. 15 HE WAS FLYING OUT EARLY IN THE MORNING, SO HE WAS 16 APOLOGETIC. SO I DON'T THINK HE HAD BEEN IN BED BUT HE HAD 17 BEEN IN BED. 18 19 BY MR. WAIER: 20 Q DO YOU KNOW HOW LONG THAT CONVERSATION LASTED THAT 21 YOUR HUSBAND HAD WITH MR. TAYLOR FROM HIS END OF THE LINE? 22 A 20, 25 MINUTES. 23 Q DID YOU OVERHEAR ANYTHING YOUR HUSBAND SAID DURING 24 THE CONVERSATION? 25 A EVERYTHING. 26 Q WHAT DID YOUR HUSBAND SAY IN THAT CONVERSATION TO 27 MR. TAYLOR? 28 MR. BEUGELMANS: OBJECTION. CALLS FOR HEARSAY.
page 839 1 THE COURT: I THINK IT DOES, COUNSEL. 2 MR. WAIER: YOUR HONOR, IT GOES TO IMPEACHMENT. HE 3 CLAIMED MR. CARTO — MR. TAYLOR, ANYTHING, AND IT GOES TO 4 IMPEACHMENT TO WHAT MR. TAYLOR SAID. 5 THE COURT: I SUPPOSE IT DOES. I WILL CHANGE MY 6 DECISION. YOU CAN ANSWER THE QUESTION. 7 8 BY MR. WAIER: 9 Q WHAT DID YOU HEAR YOUR HUSBAND TELL MR. TAYLOR 10 OVER THE TELEPHONE? 11 A HE TOLD HIM THAT I HAD TOLD HIM WE DISCUSSED OUR 12 FINANCIAL SITUATION AND JUST TO LET HIM KNOW THAT IT LOOKED 13 GOOD THAT WE WOULD BE GETTING SOME MONEY IN. 14 AND MR. TAYLOR — MY HUSBAND TOLD MR. TAYLOR: “OF 15 COURSE WE DON'T KNOW HOW MUCH OR WHEN, BUT HOPEFULLY IT 16 WOULD DO SOME GOOD BEFORE THIS IS ALL OVER. AND YOU KNOW IT 17 HAS TO BE — IT SHOULD BE A GOOD AMOUNT, BUT WE DON'T KNOW." 18 WE COULDN'T TELL HIM WHAT — WE COULDN'T TELL HIM 19 WHAT BUT HE DID SAY A SUBSTANTIAL AMOUNT. 20 21 BY MR. WAIER: 22 Q AT THAT POINT IN TIME THE LITIGATION HAD NOT BEEN 23 SETTLED; IS THAT CORRECT? 24 A IT WAS EITHER AT THE TIME OF SETTLEMENT IN 19 -- 25 IF IT WAS IN 1990 — THIS IS WHEN I WENT OVER THE LAST 26 TIME — IF IT WAS '89, I HAD JUST GONE OVER IT WAS BETWEEN 27 THE NEGOTIATION WITH MADAM ALTHAUS. IT MIGHT HAVE BEEN 28 CONCLUDED THEN.
page 840 1 BY MR. WAIER: 2 Q BUT COMING CLOSE TO CONCLUSION? 3 A YES. 4 Q ARE YOU AWARE OF ANY ARRANGEMENT THAT THE LEGION 5 HAD WITH YOUR HUSBAND SHORTLY AFTER MISS FARREL HAD DIED 6 CONCERNING ANY RECOVERY OF HER ESTATE? 7 A YES. 8 Q HOW DID YOU BECOME AWARE OF THAT? 9 A I SAW THE LETTER THAT HE WROTE THE FURRS. 10 Q DID YOU HAVE ANY DISCUSSIONS WITH LAVONNE FURR 11 CONCERNING THAT ARRANGEMENT? 12 A WE TALKED ABOUT IT. 13 Q WHAT WAS SAID? 14 MR. BEUGELMANS: OBJECTION. CALLS FOR HEARSAY. 15 THE COURT: OVERRULED. 16 THE WITNESS: JUST WHAT ANY NORMAL PERSON WOULD SAY: GO 17 FOR IT, IF IT’s ALL RIGHT WITH YOU — WITH US. 18 19 BY MR. WAIER: 20 Q NOW BASED ON WHAT LAVONNE FURR TOLD YOU DID YOU 21 RELY UPON THAT AND YOUR HUSBAND’s ARRANGEMENT TO PUT UP YOUR 22 OWN COSTS IN TRAVELING OVERSEAS? 23 A YES, BUT I DIDN'T REALLY KNOW IF I WOULD GET IT 24 BACK. WE WERE ALL VERY DOUBTFUL. 25 Q WHY WAS THAT? 26 A THE ODDS SEEMED TO BE OVERWHELMING. 27 Q WHY DID YOU BELIEVE THE ODDS WERE OVERWHELMING? 28 A WE WERE DOING THIS LONG DISTANCE FOR ONE THING.
page 841 1 WE KNEW IT WOULD BE VERY EXPENSIVE. 2 Q THAT WAS BECAUSE OF YOUR INTERVIEWS WITH 3 ATTORNEYS? 4 A YES. 5 Q DID THERE COME A POINT IN TIME IN 19 — IN AUGUST 6 1993 WHERE YOU BECAME AWARE THAT MR. WEBER HAD ENDORSED YOU 7 TO GO OVERSEAS TO SECURE AN INHERITANCE FOR THE LEGION? 8 A YES. 9 Q DO YOU RECALL SPECIFICALLY WHEN THAT OCCURRED? 10 A HE WROTE A LETTER OF WHICH HE GAVE ME A COPY. HE 11 WROTE THIS LETTER ON AUGUST 25, 1993. HE GAVE ME A COPY OF 12 HIS LETTER, WHICH I TOOK WITH ME TO GERMANY AND TO GERMANY 13 FIRST, THEN SWITZERLAND. 14 Q DO YOU RECALL WHO YOU WENT TO SEE? 15 A I SAW A GENTLEMAN, A SWISS GENTLEMAN. I DON'T 16 THINK I SHOULD COMPROMISE HIS NAME. CALL HIM MR. F. I 17 DIDN'T WANT ANYBODY TO GET DRAWN INTO ANYTHING THAT DOESN'T 18 CONCERN THEM. 19 Q LET ME SHOW YOU WHAT WE HAVE MARKED FOR 20 IDENTIFICATION AS EXHIBIT 210, WHICH IS A LETTER DATED 21 AUGUST 23, 1993, PURPORTEDLY FROM MR. WEBER TO YOU — TO A 22 GENTLEMAN OVERSEAS, EXCUSE ME. 23 THE COURT: WE DO HAVE TO HURRY UP, IF YOU THINK YOU 24 WILL GET DONE. 25 MR. WAIER: THIS IS MY LAST AREA. 26 THE COURT: I'M HERE ON TUESDAY FOR FIVE MORE YEARS. 27 BY MR. WAIER: 28 Q IS THIS THE LETTER YOU PREVIOUSLY TESTIFIED TO?
page 842 1 A YES. 2 Q AND DID YOU GO OVERSEAS ON BEHALF OF THE LEGION? 3 A YES, I DID. ACTUALLY PAID FOR THAT TRIP. 4 Q THEY PAID FOR IT? 5 A YES, THEY DID. 6 Q DID THEY PAY FOR IT OR YOU SEEK REIMBURSEMENT FOR 7 IT? 8 A NO. YEAH, I PAID WITH MY CREDIT CARD. THEY GAVE 9 ME THE MONEY BACK FOR MY AIR FARE. 10 Q YOU TALKING ABOUT MR. WEBER AND MARCELLUS? 11 A MARCELLUS PROBABLY SIGNED THE CHECK. 12 Q THAT INDIVIDUAL YOU WENT OVER THERE FOR WHAT 13 PURPOSE? 14 A HE HAD WRITTEN — I BELIEVE IN MAY OF 1993 HE HAD 15 A SUBSTANTIAL ESTATE IN EXCESS OF 2 MILLION FRANCS HE WAS 16 CONSIDERING LEAVING TO THE I.H.R. CONTACT ME REGARDING 17 THIS. 18 AND MR. WEBER HAD GOTTEN THAT LETTER BECAUSE THE 19 GENTLEMAN HAD I BELIEVE WRITTEN TO HIM, AND I THINK HE KNEW 20 MR. WEBER KNEW OF THIS GENTLEMAN. AND SO THEY GAVE ME THE 21 LETTER. 22 I LOOKED IT OVER AND I SAID: “WHY DON'T YOU WRITE 23 BACK TO HIM THAT I WOULD BE COMING OVER THERE LATER ON THIS 24 SUMMER AND UNLESS SOMEBODY ELSE WANTS TO GO, AND I WILL BE 25 GLAD TO SEE AND TALK ABOUT IT." 26 Q AND THAT IS A LETTER YOU HAVE IN FRONT OF ME? 27 A THEN WHEN — BEFORE I LEFT I REMINDED MR. WEBER TO 28 SEND THE LETTER TO THE GENTLEMAN SO I WOULDN'T COME
page 843 1 UNANNOUNCED, AND WHICH HE DID GAVE ME THE COPY. I VISITED 2 WITH MR. F. FOR A DAY AND A HALF. HE TOLD ME — HE TOLD ME 3 WHAT HE OWNED ABOUT HIS ASSETS, AND HE WAS GOING TO A 4 HOSPITAL FOR AN OPERATION. HE WAS OF THE FIRM BELIEF -- 5 MANY PEOPLE DO WHEN THEY GO INTO THE HOSPITAL — THAT HE 6 WOULDN'T COME OUT ALIVE, AND HE WANTED TO MAKE A WILL THEN 7 AND THERE. 8 HE HAD CHECKED OUT ALL KINDS OF REVISIONIST 9 ORGANIZATIONS ON DOWN. HE DIDN'T TRUST ANYBODY. HE WAS A 10 SUSPICIOUS MAN, AND I DON'T THINK HE TRUSTED ME AT FIRST 11 EITHER; BUT I GUESS HE THOUGHT I WAS HARMLESS AFTER A 12 WHILE. 13 WE DISCUSSED POLITICS, AND I TOLD HIM ABOUT MY 14 HUSBAND AND HOW HE STARTED THE INSTITUTE. HE KNEW NOTHING 15 ABOUT THAT. HE DIDN'T KNOW ABOUT I DON'T THINK EVEN THE 16 SPOTLIGHTER. HE WAS A REVISIONIST, AND WE HAD THE CHATS AND 17 MET AGAIN THE NEXT DAY, AND HE SAID AT ONE POINT: 18 “MRS. CARTO, I HAVE THE WILL RIGHT HERE IN MY DESK DRAWER. 19 I'M GOING TO PUT YOUR NAME IN IT." 20 Q WHAT DID YOU SAY? 21 A “NO. PLEASE DON'T DO ME ANY FAVORS.” THIS WAS 22 BEFORE ANY OF THIS HAPPENED. I SAID: “YOU CAN'T LEAVE ME 23 ANY MONEY. YOU WANT TO LEAVE IT, YOU KNOW, TO” — I SAID: 24 “DON'T PUT MY NAME IN IT. PLEASE DON'T." 25 I DON'T KNOW WHAT HE DID, AND IT WAS REALLY, 26 “WRITE IT DOWN." 27 Q DID YOU RECEIVE ANY MONEY FROM THAT ESTATE? 28 A HE NEVER DIED AS FAR AS I KNOW. I'M GLAD HE
page 844 1 DIDN'T. HE WAS A NICE MAN. 2 MR. WAIER: NOTHING FURTHER. 3 MR. LANE: COULD WE HAVE A TWO MINUTE BREAK. I'M 4 FIGHTING THE TIME. 5 THE COURT: YOU ARE FIGHTING THE TIME. I DON'T CARE. 6 MR. LANE: THANK YOU. TWO MINUTES. 7 8 (PROCEEDINGS RECESSED.) 9 10 MR. WAIER: THERE’s THE STATEMENT TWO HEADS ARE BETTER 11 THAN ONE. A COUPLE OF AREAS. 12 13 BY MR. WAIER: 14 Q AT SOME POINT IN TIME, MRS. CARTO, DID YOU LOAN 15 THE LEGION ANY MONEY? 16 A YES, I DID. 17 Q HOW MUCH WAS THAT? 18 A $14,000. 19 Q WHEN DID YOU DO THAT? 20 A I BELIEVE '86 AND '87 OR ALL IN '86. 21 Q WHERE DID YOU GET THAT MONEY FROM? 22 A MY MOTHER. 23 Q AND WHY DID YOU LOAN THE LEGION MONEY AT THAT 24 TIME? 25 A BECAUSE THEY DIDN'T HAVE — THEY COULDN'T MAKE 26 PAYROLL OR PAY BILLS WITH OUT EXTRA INFUSION. 27 Q HAVE YOU BEEN PAID BACK THE MONEY? 28 A NO, I — AND I HAVEN'T DONATED IT EITHER AS
page 845 1 MR. MARCELLUS SAID. I DID NOT DONATE THE $14,000. 2 Q HAVE YOU MADE DEMAND UPON THAT? 3 A YES. 4 Q HAS IT BEEN RETURNED TO YOU? 5 A NO. 6 Q NOW WE ALREADY GONE THROUGH PRIOR TESTIMONY IN 7 YOUR BACKGROUND AND THE RELATIONSHIP WITH THE LEGION AND 8 YOUR VOLUNTEER WORK. 9 TO YOUR KNOWLEDGE DID THE LEGION FROM 1985 UNTIL 10 THE TIME OF SEPTEMBER 1993 HAVE A GENERAL LIABILITY 11 INSURANCE POLICY? 12 A YES. 13 Q WITH WHOM, IF YOU CAN RECALL? 14 MR. BEUGELMANS: OBJECTION. RELEVANCE. 15 THE COURT: IS THIS OVER THE BURNING? 16 MR. WAIER: THIS IS JUST HAVING A POLICY, AND THERE’s A 17 REASON FOR IT, A LEGAL SIGNIFICANCE TO THAT, YOUR HONOR. 18 THE COURT: OVERRULE IT BECAUSE I WANT TO GET THIS 19 DONE. 20 21 BY MR. WAIER: 22 Q WITH WHOM? 23 A I BELIEVE ALLSTATE. 24 Q AND HOW MUCH WAS THE POLICY LIMIT? 25 A IT WAS -- 26 MR. BEUGELMANS: OBJECTION. RELEVANCE. 27 THE COURT: OVERRULED. 28 THE WITNESS: I THINK, BUT I'M NOT ABSOLUTELY SURE, IT
page 846 1 MIGHT HAVE BEEN THE MILLION DOLLARS. 2 3 BY MR. WAIER: 4 Q DO YOU THINK IT COULD HAVE BEEN OVER A MILLION 5 DOLLARS? 6 A IT COULD HAVE BEEN. 7 Q WAS THE BUDGET OF THE LEGION — WITHDRAW THE 8 QUESTION. 9 THE COURT: ANY CROSS-EXAMINATION? 10 MR. BEUGELMANS: BRIEFLY YOUR HONOR. 11 12 CROSS-EXAMINATION 13 BY MR. BEUGELMANS: 14 Q MRS. CARTO, DO YOU TRUST YOUR HUSBAND? 15 A IMPLICITLY. 16 Q NOW SOME OF THE TRIPS THAT YOU TOOK TO EUROPE WERE 17 PAID BY LIBERTY LOBBY, CORRECT? 18 A I BELIEVE THEY REIMBURSED ME FOR PLANE TICKET AND 19 OTHER AMOUNT. 20 Q HOW MANY TIMES? 21 A I THINK TWICE. 22 Q ARE YOU SURE ONLY TWICE? 23 A I'M NOT SURE, NO. 24 Q COULD IT BE FOUR TIMES, CORRECT? 25 A COULD HAVE BEEN, BUT I DON'T THINK IT WAS. 26 Q COUNSEL SHOWED YOU A NUMBER OF LETTERS ALLEGEDLY 27 SENT BY MRS. FARREL TO YOU IN 1985. AND HAVE YOU READ THE 28 LETTERS IN THE LAST COUPLE OF WEEKS?
page 847 1 A NO. 2 Q TAKE A LOOK AT NUMBER 155, PLEASE. 3 A APRIL 24? 4 Q YES. 5 A HOLD ON. 6 MR. WAIER: WHAT IS THE DATE? APRIL 24 WHAT? 7 THE WITNESS: 1985. (PAUSE) YES. 8 9 BY MR. BEUGELMANS: 10 Q THAT LETTER DOES NOT MENTION LIBERTY LOBBY, DOES 11 IT? 12 A NO. 13 Q IT DOESN'T MENTION F.D.F.A., DOES IT? 14 A NO. 15 Q TAKE A LOOK AT EXHIBIT 148, PLEASE. 16 A YES. 17 Q DOES THAT LETTER MENTION LIBERTY LOBBY? 18 A NO, IT DOES NOT. 19 Q DOES THAT MENTION F.D.F.A.? 20 A NO, IT DOES NOT. 21 Q DOES IT MENTION REVISIONISM? 22 A NO, IT DOES NOT, I DON'T THINK. 23 Q LOOK AT EXHIBIT 15 -- 24 A -8. 25 MR. BEUGELMANS: WHICH ONE IS THIS? 26 MR. WAIER: 157. 27 28 BY MR. BEUGELMANS:
page 848 1 Q DOES 157 MENTION LIBERTY LOBBY? 2 A IT’s PARTIALLY CUT OFF, BUT I DON'T THINK IT DOES. 3 Q DOES IT MENTION F.D.F.A.? 4 A OH, BUT I THINK IT MENTIONED MAITRE GENOUD. 5 THAT’s NICE. NO. 6 Q AND IT DOESN'T MENTION I.H.R.? 7 A IT DOES MENTION THE I.H.R. WHAT DO YOU SAY? 8 Q THE 6TH REVISIONIST CONFERENCE? 9 A IT SAYS SHE BOUGHT THE TAPES FROM THE 6TH 10 REVISIONIST CONFERENCE. 11 Q NOW TAKE A LOOK AT EXHIBIT 151. 12 MR. WAIER: WHAT IS THE DATE OF THAT LETTER? 13 14 BY MR. BEUGELMANS: 15 Q MAY 3, 1985. 16 A YES, ALL RIGHT. 17 Q DOES THAT LETTER MENTION REVISIONISM? 18 A I HAVEN'T SEEN THE SECOND PAGE. I'M SORRY. NO, 19 IT DOES NOT. 20 Q DOES THE LETTER TALK ABOUT MR. FAURISSON? 21 A YES. 22 Q IS HE A REVISIONIST? 23 A YES. 24 Q DOES IT TALK ABOUT F.D.F.A.? 25 A NO. 26 Q TALK ABOUT LIBERTY LOBBY? 27 A NO, IT DOES NOT. 28 Q THANK YOU. YOU HAVE IN FRONT OF YOU 143, CORRECT?
page 849 1 A YES. 2 Q DOES EXHIBIT 93 — I'M SORRY, 143. DOES IT 3 MENTION I.H.R.? 4 A YES. SHE’s ASKING FOR THE PHONE NUMBER. 5 Q DOES IT MENTION F.D.F.A.? 6 A YES. 7 Q DOES IT MENTION LIBERTY LOBBY? 8 A NO. 9 Q THE LAST LETTER THAT WAS SHOWN TO YOU BY MR. WAIER 10 IS A LETTER DATED JANUARY 14, 1985, EXHIBIT 147. 11 A YES. 12 Q DOES IT MENTION THE I.H.R.? 13 A THE 6TH I.H.R. CONFERENCE, YES. 14 Q DOES IT MENTION LIBERTY LOBBY? 15 A NO, IT DOESN'T. 16 Q NOW GOING BACK TO EXHIBIT -- 17 A IT MENTIONS F.D.F.A., THOUGH. 18 Q GOING BACK TO 143, WHERE DOES IT MENTION 19 F.D.F.A.? 20 A HERE IT IS. IS IT SUPPOSED TO GO TO F.D.F.A. AND 21 TO A ADDRESS. 22 Q WHAT IS THE NEXT SENTENCE? 23 A “DO YOU WANT ALL THE MONEY JUST SLUSHING AROUND 24 FOR THE JEWS?" 25 MR. BEUGELMANS: THANK YOU. I HAVE NO FURTHER 26 QUESTIONS. THANK YOU. 27 THE COURT: REDIRECT? 28 MR. WAIER: NONE, YOUR HONOR.
page 850 1 THE COURT: THANK YOU, MRS. CARTO, FOR YOUR TESTIMONY. 2 REMEMBER ABOUT THE STEP. 3 MR. WAIER: WE REST. 4 THE COURT: WHAT ABOUT THE ITEMS OF EVIDENCE YOU 5 MARKED? 6 MR. WAIER: I WANT TO INDICATE ONE THING. I RESTED AND 7 MR. LANE HAS RESTED SUBJECT TO THE FACT YOU ARE GOING TO 8 TAKE INTO ACCOUNT ALL OF LAVONNE FURR’s AND LEWIS FURR'S 9 DEPOSITION; IS THAT CORRECT? 10 THE COURT: THAT’s CORRECT. 11 MR. BEUGELMANS: YOUR HONOR, BEFORE WE GET TO THE 12 EXHIBITS, I WOULD LIKE TO RECALL MR. CARTO ON REBUTTAL. 13 THE COURT: ALL RIGHT. 14 MR. BEUGELMANS: I HAVE A FEW QUESTIONS, BRIEF. IT 15 WON'T TAKE MORE THAN FIVE MINUTES. 16 MR. WAIER: YOUR HONOR, THE ONLY REASON I'M OBJECTING 17 IS HE HAD A FULL — YOU GAVE HIM A FULL RANGE OF OPPORTUNITY 18 TO TALK TO MR. CARTO. HE CALLED HIM BEFORE, AND I JUST -- 19 THIS IS 352 STANDPOINT. 20 THE COURT: YOU SAY 5 MINUTES. 21 MR. BEUGELMANS: I PROMISE IT WILL BE FIVE MINUTES OR 22 LESS. 23 THE COURT: IT HAS TO BE NEW. 24 MR. BEUGELMANS: BRAND NEW. 25 THE COURT: NOT SOMETHING TO GET THE LAST WORD. 26 MR. LANE: NO MATTER WHAT THE PERIOD OF TIME, WHICH IS 27 VERY IMPORTANT TO ME ALSO, BUT I SAID BEFORE NO MATTER WHAT 28 THE TIME IS HE HAD HIM ON AS A DIRECT WITNESS. THEN HE DID
page 851 1 CROSS-EXAMINATION FOLLOWING THE DIRECT EVIDENCE, WHICH HAD 2 NOTHING TO DO WITH ANYTHING. HE SAID THERE WOULD BE NO 3 REBUTTAL WITNESS, AND HE AGAIN ALREADY BREACHED THIS 4 COMMITMENT. 5 THE COURT: GIVE ME AN OFFER OF PROOF, WOULD YOU? WHAT 6 IS IT YOU'RE GOING TO TALK ABOUT? I REALIZE THAT TIPS YOUR 7 HAND TO MR. CARTO. REALLY, HE’s RIGHT. WE HAVE GONE OVER 8 THIS A LOT OF TIME. 9 MR. BEUGELMANS: MR. CARTO TESTIFIED THIS MORNING HE 10 COULD NOT — COULD NOT RECALL WHETHER KAYLA, THE ENTITY THAT 11 OWNED SUN RADIO AND MANAGED SUN RADIO, HAD ANY SHARES OF 12 STOCK THAT WERE OWNED BY F.D.F.A. AND/OR LIBERTY LOBBY. I 13 CAN PROVE THAT IN FACT THAT LIBERTY LOBBY, INC. AND F.D.F.A. 14 WERE SHAREHOLDERS OF KAYLA. I BELIEVE THAT’s RELEVANT. 15 IT’s RELEVANT. IT’s AN IMPORTANT FACT. 16 LIBERTY LOBBY IS A FOR PROFIT CORPORATION AND 17 ALLEGEDLY THE MONEY WAS COMMINGLED WITH THE FARREL MONEY -- 18 WAS COMMINGLED INTO THE LIBERTY LOBBY ACCOUNT AND ENDED UP 19 WITH KAYLA. 20 THE COURT: IT PROBABLY WILL TAKE LONGER TO ARGUE THAN 21 GET THE TESTIMONY. 22 MR. WAIER: HE HAD THAT OPPORTUNITY UPON THAT VERY SAME 23 QUESTION. 24 THE COURT: I'LL SUSTAIN THE OBJECTION. 25 ANYTHING ELSE? ANY OTHER REBUTTAL? 26 MR. BEUGELMANS: I HAVE A DOCUMENT HERE, WHICH I WOULD 27 LIKE TO INTRODUCE INTO EVIDENCE THROUGH MR. CARTO. 28 THE COURT: SHOW IT TO THEM. GO THROUGH THE ITEMS OF
page 852 1 EVIDENCE THAT WE'RE GOING TO HAVE. 2 MR. BEUGELMANS: THE DOCUMENT I'M SHOWING COUNSEL IS A 3 DOCUMENT I OBTAINED IT DURING THE LUNCH RECESS. IT’s A 4 BROCHURE, A KAYLA BROCHURE, ADVERTISING BROCHURE, THAT SAYS 5 WHO THE SHAREHOLDERS OF KAYLA ARE. 6 MR. LANE: WE OBJECT. 7 THE COURT: LET’s GO THROUGH THE ITEMS THAT DEFENSE 8 WANTS IN. HAVE YOU TWO SPOKEN ABOUT THIS? GO THROUGH THE 9 SAME DRILL AS WE DID YESTERDAY, WHICH TOOK A LONG TIME. 10 MR. MUSSELMAN: WE'RE NOT GOING TO OBJECT TO MOST 11 EXHIBITS. IT WON'T TAKE LONG. 12 THE COURT: GO OFF THE RECORD. THE TWO GO THROUGH THE 13 LIST AND DO IT THE SAME WAY. I ONLY HAVE TO MAKE A DECISION 14 ON WHAT YOU CAN'T AGREE ON COMES IN. 15 MR. WAIER: YOUR HONOR, AS A POINT OF ORDER, MR. LANE I 16 KNOW -- 17 MR. LANE: THAT’s FINE. 18 THE COURT: GO OFF THE RECORD. 19 20 (PROCEEDINGS RECESSED.) 21 22 THE COURT: ON THE RECORD. DOES THE CLERK HAVE A LIST 23 OF EXHIBITS THAT YOU AGREE ON? IF SO, I WON'T HAVE HER 24 RECITE IT. 25 MR. WAIER: YES. AND IF I REMEMBER WE PRESENTLY DO NOT 26 AGREE ON 105, 205, 60 AND 63. 27 MR. MUSSELMAN: YOU ALSO HAVE OBJECTIONS TO 206 AND 28 207.
page 853 1 MR. WAIER: 206 AND 207. I THOUGHT THERE WERE FOUR. 2 THERE’s SIX. 3 THE COURT: EXHIBIT 105. THE PLAINTIFFS ARE OBJECTING 4 TO APPOINTMENT OF SUBSTITUTE INCORPORATORS; THE SUBSTITUTE 5 INCORPORATORS BEING LAVONNE FURR AND LEWIS CARTO. THIS IS 6 SECOND DAY OF MARCH, 1966. OBJECTION TO THAT IS WHAT? 7 MR. MUSSELMAN: RELEVANCE. HEARSAY. LACK OF 8 FOUNDATION. 9 THE COURT: OVERRULE THE OBJECTION. 105 WILL COME IN. 10 11 (COURT’s EXHIBIT NO. 105 RECEIVED IN EVIDENCE.) 12 13 THE COURT: WHAT IS 205? I DON'T HAVE THAT. 14 MR. MUSSELMAN: WHAT MR. CARTO — WE DON'T HAVE A COPY 15 EITHER, SPEAKING OF WHICH IF I COULD HAVE COUNSEL AGREE TO 16 SEND US A COPY REGARDLESS OF THE OUTCOME. WE HAVE ONE THAT 17 WAS IDENTIFIED DURING MR. LANE’s FOUNDATION. THAT WASN'T AN 18 ORIGINAL EXHIBIT. THAT’s WHAT MR. CARTO TESTIFIED TO BE HIS 19 CONTRACT. 20 MR. WAIER: 1966 AGREEMENT WHERE HE ASSUMED CONTROL OF 21 THE LEGION. 22 THE COURT: SAME OBJECTION TO 105? 23 MR. MUSSELMAN: YES. 24 THE COURT: SAME RULING. IT WILL BE ADMITTED OVER 25 OBJECTION. 26 27 (COURT’s EXHIBIT NO. 205 RECEIVED IN EVIDENCE.) 28
page 854 1 THE COURT: GO THEN TO 206. I DON'T HAVE THAT EITHER. 2 MR. MUSSELMAN: 206 WAS LIBERTY LOBBY’s RESPONSE TO. 3 MR. WAIER: THAT WAS THE RESPONSE TO INTERROGATORIES, I 4 BELIEVE. WE ARE OBJECTING TO THAT AS BEING CUMULATIVE. 5 MR. CARTO TESTIFIED TO IT. THE ANSWER WAS READ INTO THE 6 RECORD, THE ANSWER. AS FAR AS THE ENTIRE EXHIBIT TO COME IN 7 IT NOT ONLY WAS NOT TESTIFIED AND NOT RELEVANT, IT'S 8 CUMULATIVE. 9 THE COURT: NORMALLY I ONLY BRING THE PORTION OF THE 10 INTERROGATORY IN WHICH IS USED TO IMPEACH. 11 MR. MUSSELMAN: I DON'T THINK THEY READ WORD FOR WORD 12 THE ENTIRE RESPONSE, BUT THEY DID IDENTIFY THE RESPONSES AND 13 QUESTION. SO AS LONG AS THOSE RESPONSES ARE IN, REGARDLESS 14 OF WHETHER EVERY WORD OF THE PARTICULAR RESPONSES AND 15 QUESTIONS WERE READ INTO THE RECORD, THAT WOULD BE FINE. 16 THE COURT: I'LL KEEP 206 OUT. I'VE WRITTEN DOWN WHAT 17 THE RESPONSES TO INTERROGATORIES WERE. 18 HOW ABOUT 207? 19 MR. MUSSELMAN: 207, THE NOTICE TO APPEAR AT TRIAL IN 20 LIEU OF SUBPOENA. 21 MR. WAIER: OBJECTION. RELEVANCY ON THAT. I DON'T SEE 22 THE RELEVANCY. THERE WAS AN OBJECTION WE LODGED WITH THE 23 COURT IN CONNECTION WITH THAT. I DON'T KNOW THE RELEVANCY. 24 THE COURT: I THINK I SUSTAINED THE OBJECTION. 25 MR. WAIER: YES. 26 MR. MUSSELMAN: I DON'T REMEMBER IT BEING MOVED FOR 27 ADMISSION UNTIL THIS MOMENT. IN ANY CASE, IT’s RELEVANT TO 28 DEMONSTRATE THAT THERE’s BEEN A LACK OF ACCOUNTING EVEN TO
page 855 1 THIS VERY MOMENT. 2 MR. BEUGELMANS: ALSO UNDER EVIDENCE CODE SECTION 412. 3 THE COURT: I'LL LEAVE IT — I'LL KEEP IT OUT UNDER 4 352, IF NOT NOTHING ELSE. I THINK I HAVE THE EVIDENCE ON 5 THAT ISSUE. 6 WHAT ABOUT 60? 7 MR. MUSSELMAN: 60 AND 63. 8 MR. WAIER: THOSE ARE THE SEPTEMBER 1993 MINUTES, YOUR 9 HONOR. THEY WERE NEVER PROPERLY AUTHENTICATED NOR — CAN I 10 FINISH MY OBJECTION? 11 MR. MUSSELMAN: I'M SORRY. 12 MR. WAIER: NOR DO I BELIEVE THEY'RE RELEVANT. 13 MR. MUSSELMAN: MR. CARTO IDENTIFIED THEM AS BEING SENT 14 TO HIM IN RESPONSE TO HIS LETTER TO MRS. FURR. EXHIBIT 63, 15 IF YOU READ THE TWO IN CONJUNCTION, YOU SEE EXHIBIT 63. HE 16 TESTIFIED THAT HE INCLUDED DRAFT MINUTES FOR HER TO SIGN AND 17 SEND BACK. RELEVANCE IS THEY'RE BACKDATED TO A MEETING THAT 18 NEVER OCCURRED. 19 MR. WAIER: SUBSEQUENT CONDUCT IS NOT ADMISSIBLE TO 20 PROVE A PRIOR CONDUCT. THAT’s THE LAW. 21 MR. MUSSELMAN: IT’s BEING ADMITTED TO DEMONSTRATE HE 22 WAS WILLING TO GIVE THEM MINUTES FOR MEETINGS THAT DIDN'T 23 OCCUR TO GET THEM TO SIGN IT AFTER HE ACKNOWLEDGES THE 24 LETTER THEY HAD BEEN TERMINATED. 25 THE COURT: I THINK IT’s DEFINITELY RELEVANT. WHY 26 SHOULDN'T IT COME IN? 27 MR. WAIER: WELL, YOU CANNOT PROVE PRIOR CONDUCT BY A 28 SUBSEQUENT EVENT. IN OTHER WORDS, IN A CIVIL CASE --
page 856 1 CRIMINAL CASES ARE DIFFERENT — CIVIL CASES, FOR EXAMPLE, IF 2 I'M NEGLIGENT TODAY I CAN'T SHOW THAT I WAS NEGLIGENT THREE 3 WEEKS FROM NOW TO PROVE MY NEGLIGENCE TODAY. YOU CANNOT 4 SHOW SUBSEQUENT CONDUCT TO SHOW THAT SOMEBODY HAD A PATTERN 5 OF CONDUCT ON THIS PARTICULAR DAY. 6 MR. MUSSELMAN: WE'RE NOT TRYING TO SHOW A PATTERN OF 7 CONDUCT. 8 MR. WAIER: IT DOESN'T MATTER. 9 THE COURT: I'M GOING TO ADMIT IT OVER OBJECTION. ONE 10 OF THE ISSUES HERE I THINK IS THE INDEPENDENCE OF THIS 11 BOARD. WHETHER OR NOT THESE MINUTES OF MARCH 5TH WERE VALID 12 OR INVALID, I THINK THIS HAS SOME BEARING ON THAT. 13 MR. WAIER: WELL, YOUR HONOR THIS BOARD — THIS BOARD, 14 JUST TO CLARIFY, THESE MINUTES GO TO A BOARD MEETING WHICH 15 IF THE LEGION WANTS TO ADMIT THAT’s A PROPER BOARD MEETING 16 OR THOSE DIRECTORS WERE INVOLVED WITH THAT WERE BOARD 17 MEMBERS ON SEPTEMBER 16, 1993, GREAT. THAT’s AN ADMISSION 18 ON THEIR PART, FINE. THAT DOES NOT GO TO WHAT THE BOARD WAS 19 BACK THEN NOR TO ANYBODY THEY EVEN BELIEVE IS THE LEGION. 20 THEY DON'T CONTEND THAT’s THE LEGION BOARD. 21 THE COURT: 60 AND 6- — WHAT IS THE OTHER ONE? 22 MR. BEUGELMANS: -3. 23 THE COURT: WILL COME IN OVER DEFENSE OBJECTION. 24 25 (COURT’s EXHIBITS NOS. 60 AND 63 RECEIVED IN 26 EVIDENCE.) 27 28 MR. MUSSELMAN: WE STIPULATED — OH, THE CLERK HAS --
page 857 1 THERE’s NO OBJECTION TO 208 AND 209. THE PLAINTIFF WOULD 2 LIKE THE ADMISSION OF THOSE TOO SO THE RECORD IS CLEAR. 3 THE NOTES MR. CARTO BROUGHT TO COURT — THAT’s 208 4 AND 209 — IS THE DOCUMENT IDENTIFIED AS MR. HUTZEL'S 5 HANDWRITING. 6 THE COURT: 208 COMES IN. 209 COMES IN. 7 8 (COURT’s EXHIBITS NOS. 208 AND 209 RECEIVED IN 9 EVIDENCE.) 10 11 THE COURT: VERY WELL. I THINK THAT CONCLUDES THE 12 EVIDENCE THEN. 13 MR. WAIER: BOTH SIDES HAVE RESTED. 14 THE COURT: IT APPEARS THEY HAVE. I HOPE SO. I'M HERE 15 FOR ANOTHER FIVE YEARS. HAVE AT IT. I KNOW THAT SOMEBODY 16 HERE WANTS TO GET BACK EAST. 17 MR. MUSSELMAN: SO THE RECORD IS CLEAR, I DON'T KNOW IF 18 THIS WILL APPEAR IN THE CLERK NOTES, WE STIPULATED TO THE 19 ADMISSION OF 106, 107, 108, 111, 119, 123, 124, 125, 130, 20 132, 133, 138, 142, 143, 146, 147. 21 EXHIBIT 151, 155, 157, 158, 160 AND 62, ALL WHICH 22 ARE LETTERS BETWEEN MOSTLY BETWEEN THE CARTOS AND 23 MISS FARREL AND PLAINTIFFS, NOT OBJECTING WITH THE 24 UNDERSTANDING THAT THEY'RE NOT BEING ADMITTED FOR THE 25 TRUTH. THAT’s ALL. 26 OTHERS WE WOULD OBJECT ON HEARSAY GROUNDS. 27 28
page 858 1 (COURT’s EXHIBITS NOS. 106-108, 111, 2 119, 123-125, 130, 132-133, 138, 142, 3 146-147, 151, 155, 157-158, 160, 162 4 RECEIVED INTO EVIDENCE.) 5 6 MR. LANE: THERE’s SOME RULES ABOUT HOW LONG THE 7 ARGUMENTS ARE GOING TO BE. 8 THE COURT: NO. I DON'T SET A RULE. YOU KNOW MOST OF 9 THE TIME HUMAN BEINGS UNFORTUNATELY ONLY REMEMBER ABOUT THE 10 FIRST 15 MINUTES OF WHAT THEY WERE TOLD, AND THEY STOP 11 LISTENING. I HOPE I'M BETTER THAN THAT. ALL I CAN SUGGEST 12 YOU DON'T TELL ME THINGS I ALREADY KNOW. YOU TRY TO TELL ME 13 WHAT THE INFERENCES ARE TO DRAW FROM THE VARIOUS ITEMS OF 14 EVIDENCE. AND FOR THE PLAINTIFFS THAT YOU HAVE THE BURDEN 15 OF PROOF TO MAYBE GO OVER THE CAUSES OF ACTION, THE VARIOUS 16 ELEMENTS; HOW THEY'RE MET; WHAT TYPE OF PROOF MEETS THEM. I 17 DON'T SET A TIME LIMIT. 18 MR. WAIER: ALONG THOSE LINES, YESTERDAY YOU ALLOWED 19 THEM OR THE DAY BEFORE — I BELIEVE YESTERDAY, ALLOWED THEM 20 TO AMEND THE SIXTH CAUSE OF ACTION; AND I BELIEVE YOU SET 21 THE CODE SECTION ON THERE ON THAT PARTICULAR COMPLAINT. 22 THE COURT: YES, I SAID IF THEY COULD. 23 MR. WAIER: THE CODE SECTION THAT YOU PUT ON IT THEY 24 WANTED TO AMEND IT TO I BELIEVE WAS CODE SECTION -- 25 CORPORATIONS CODE SECTION WHAT? 26 MR. BEUGELMANS: I DON'T RECALL. 27 MR. WAIER: 52 -- 28 THE COURT: IT’s HERE SOME PLACE. WE OUGHT TO GET
page 859 1 STARTED. 2 MR. WAIER: I WANT TO MAKE A MOTION FOR JUDGMENT ON 3 THAT SECTION THAT WAS AMENDED. I'LL TELL YOU WHY. IT'S 4 VERY SIMPLE. 5 THE COURT: IT BETTER BE SIMPLE. 6 MR. WAIER: IT’s EXTREMELY SIMPLE. 7 THE COURT: YOU HAVE A GUY HERE THAT WILL BE DELAYED. 8 I'M PUSHING FOR HIS BENEFIT, NOT FOR MINE. 9 WHY DON'T WE DO THIS. ALLOW COUNSEL TO START 10 MAKING THE OPENING STATEMENT. YOU CAN FIND THE SECTION. 11 MR. BEUGELMANS: I BELIEVE IT’s 5913. I'M SORRY. 12 5142. 13 MR. WAIER: DO YOU HAVE A COPY OF THAT? 14 MR. MUSSELMAN: NO. 15 MR. WAIER: DO YOU HAVE A COPY OF THE SECTION? 16 THE COURT: I'M GOING TO DO THIS. I'LL MOVE THE CASE 17 ALONG. I WANT THE PARTIES TO ARGUE. I WILL CONSIDER YOUR 18 ARGUMENT TO BE AN ARGUMENT FOR NOT ONLY THE SAKE OF ARGUMENT 19 FOR A MOTION OF A NONSUIT ON THAT CAUSE OF ACTION, WHICH IS 20 THE SIXTH CAUSE OF ACTION -- 21 MR. WAIER: CAN I MAKE ONE STATEMENT? YOUR HONOR, 5142 22 WHICH THEY NOW AMENDED AFTER ALL THE YEARS, STATES: 23 “NOTWITHSTANDING SECTIONS IN ANY OF THE 24 FOLLOWING” -- 25 THE COURT: YOU DON'T HAVE TO READ IT. I CAN READ. 26 THAT’s ONE OF THE REQUIREMENTS OF THIS JOB. 27 MR. WAIER: THERE IS NO — THEY SAID VIOLATION OF THE 28 SECTION. THERE’s BEEN NO TESTIMONY THAT THIS SECTION HAS
page 860 1 BEEN VIOLATED BY ANYBODY. 2 THE COURT: THANK YOU. I'LL TAKE THIS UNDER 3 SUBMISSION. WE'LL ARGUE THE CASE, AND I WILL RULE. THANK 4 YOU. I'LL GIVE THIS BACK TO YOU. 5 MR. BEUGELMANS: OUT OF DEFERENCE FOR MR. LANE, I WOULD 6 BE HAPPY ON BEHALF OF PLAINTIFF TO SHARE THE TIME. PERHAPS 7 I CAN GO TO QUARTER TO 4; MR. LANE TO 4:15, AND I MIGHT HAVE 8 A FEW CLOSING COMMENTS. 9 MR. WAIER: I WILL GIVE A CLOSING ARGUMENT FOR OUR 10 DEFENDANTS. 11 MR. LANE: WHAT TIME DID YOU SAY? 12 MR. BEUGELMANS: I WAS THINKING MR. LANE. 13 THE COURT: OFF THE RECORD. 14 (OFF-THE-RECORD DISCUSSION.) 15 THE COURT: ON THE RECORD. 16 MR. BEUGELMANS: MAY IT PLEASE THE COURT, COUNSEL, YOUR 17 HONOR. I DON'T INTEND TO INDULGE IN FLIGHTS OF FANCY. I 18 KNOW YOUR HONOR HAS LISTENED PATIENTLY. THERE’s BEEN A LOT 19 OF EXHIBITS AND TESTIMONY. I OBSERVED THE COURT TO TAKE 20 COPIOUS NOTES DAY AFTER DAY. I WILL NOT REHASH THE FACTS AD 21 NAUSEAM. I PROPOSE TO DO IS SIMPLY WITH THE COURT'S 22 PERMISSION AND COUNSEL’s INDULGENCE TALK A LITTLE ABOUT THE 23 LAW THAT APPLIES TO THE FACTS OF THIS CASE. 24 WE ARE DEALING WITH A SITUATION WHERE A NUMBER OF 25 DEFENSES HAVE BEEN RAISED, AND I WOULD LIKE TO TALK ABOUT 26 SOME OF THE DEFENSES BRIEFLY TO CLEAR OUT SOME DEAD WOOD SO 27 WE CAN GET ON TO THE MEAT OF THE CASE. 28 ONE OF THE FIRST ARGUMENTS THAT HAS BEEN
page 861 1 INTRODUCED INTO THIS CASE AS A DEFENSE IS THE THEORY THAT 2 SOMEHOW WILLIS CARTO AS A SUBSTITUTE INCORPORATOR TOGETHER 3 WITH LAVONNE FURR HAVE SOME MAGICAL POWER TO RUN THE 4 CORPORATION WITH OR WITHOUT THE CONSENT OF THE BOARD OF 5 DIRECTORS AS THEY SEE FIT. 6 AS YOUR HONOR KNOWS FROM HAVING READ THE MEMORANDA 7 OF LAW MR. MUSSELMAN, MY COLLEAGUE, PREPARED, CALIFORNIA LAW 8 APPLIES TO THIS CASE. DEFENDANT IS A RESIDENT OF 9 CALIFORNIA. THE LEGION RESIDES IN CALIFORNIA, HAS DONE 10 BUSINESS FOR MANY YEARS IN CALIFORNIA, AND THE CALIFORNIA 11 LAWS APPLY. 12 UNDER CALIFORNIA CORPORATIONS CODE SECTION 5910 13 (A) SMALL (C): “WHEN ALL THE MEMBERS OF THE CORPORATION AT 14 THE TIME OF ITS INCORPORATION ARE DIRECTORS BY LAW, THERE 15 CAN BE NO DIRECTORS FROM AND AFTER THE TIME OF THE FIRST 16 MEETING OF THE BOARD OF DIRECTORS." 17 HERE, ALL THE ORIGINAL MEMBERS WERE ELECTED 18 DIRECTORS BY THE TERMS OF THE CHARTER. IT’s OUR POSITION 19 FROM ITS INCEPTION THE LEGION HAD NO MEMBERS. MOREOVER, 20 THERE’s NO EVIDENCE THAT THE ORIGINAL INCORPORATORS EVER 21 APPOINTED THE SUBSTITUTE MEMBERS OR INCORPORATORS BEFORE 22 THEY DIED. 23 THERE’s TESTIMONY THAT MARSHA HOYT, THE 24 DAUGHTER — ONE OF THE ORIGINAL INCORPORATORS, SOMEHOW 25 HERSELF BECOME AN INCORPORATOR. THAT’s JUST HEARSAY. THERE 26 IS NO EVIDENCE TO THAT EFFECT. 27 THERE’s NO PAPERWORK. NOTHING HAS BEEN INTRODUCED 28 TO SHOW MARSHA HOYT HERSELF EVER LEGALLY WAS A SUBSTITUTE
page 862 1 INCORPORATOR, ASSUMING ARGUENDO A THING CAN EXIST IN THIS 2 CORPORATION. HOWEVER, EVEN ASSUMING, WITHOUT CONCEDING THAT 3 MARSHA HOYT WAS A SUBSTITUTE INCORPORATOR, SUBSTITUTE 4 INCORPORATOR, ALREADY WILLIS CARTO PREPARED BYLAWS IN 1966. 5 THAT’s EXHIBIT 4, I BELIEVE — 3. I'M SORRY. MR. CARTO 6 TESTIFIED HE SIGNED EXHIBIT 3, PAGE 3. HE ALSO TESTIFIED HE 7 RECOGNIZED LAVONNE FURR’s SIGNATURE ON PAGE 3. 8 THESE BYLAWS ARE DATED 16TH DAY OF JUNE 1966 AND 9 THEY STATE RIGHT AT PAGE 2 — PAGE 1, I'M SORRY. 10 “ARTICLE 1, THERE SHALL BE NO MEMBERS OF THIS 11 CORPORATION." 12 SHORTLY BEFORE THOSE ARTICLES WERE PREPARED 13 MR. CARTO SIGNED SOME MINUTES OF THE LEGION FOR THE SURVIVAL 14 OF FREEDOM, AND THAT’s EXHIBIT 4, YOUR HONOR. 15 AT PAGE 2 OF EXHIBIT 4 MR. CARTO IS QUOTED TO 16 SAYING IT APPEARS TO HIM THAT NEW BYLAWS WOULD BE IN ORDER. 17 HE STATED, QUOTE — HE STATED THAT IT IS HIS BELIEF THAT 18 QUOTE, INCORPORATORS, CLOSED QUOTE, CANNOT CONTINUE TO 19 EXERCISE AUTHORITY AFTER THE ELECTION OF A BOARD OF 20 DIRECTORS. 21 YOUR HONOR, I WOULD LIKE TO CITE EVIDENCE CODE 22 SECTION 623, WHICH STATES: “WHENEVER A PARTY HAS, BY HIS 23 OWN STATEMENT OR CONDUCT, INTENTIONALLY AND DELIBERATELY LED 24 ANOTHER TO BELIEVE A PARTICULAR THING TO BE TRUE, OR TO ACT 25 UPON SUCH BELIEF, HE IS NOT, IN ANY LITIGATION ARISING OUT 26 OF SUCH STATEMENT OR CONDUCT, PERMITTED TO CONTRADICT IT." 27 I BELIEVE, YOUR HONOR, THAT MR. CARTO WAS ESTOPPED 28 AT THIS TIME FROM CLAIMING THAT SOMEHOW HE’s A SUBSTITUTE
page 863 1 INCORPORATOR. HE HAD POWERS OVER THE CORPORATION, AND HE 2 CONTINUES TO HAVE POWERS OVER THE CORPORATION TO NOMINATE 3 DIRECTORS AND CONTROL THE AFFAIRS OF THE PLAINTIFF. 4 EVEN AGAIN, YOUR HONOR, LET’s ASSUME ALL THIS WERE 5 NOT TRUE. WE READ INTO THE RECORD THE SWORN TESTIMONY OF 6 MR. WILLIS CARTER, THE MERMELSTEIN ACTION IN THE LOS ANGELES 7 COUNTY SUIT. IN THAT TESTIMONY MR. CARTO TESTIFIED UNDER 8 OATH THAT HE HAD NO POSITION OF AUTHORITY WITH THE LEGION. 9 THIS IS MARCH OF 1991, SHORTLY AFTER THE DATE THAT THE 10 LEGION ALLEGEDLY ENTERED INTO THE SETTLEMENT OF THE FARREL 11 LITIGATION. 12 IF THAT WASN'T ENOUGH, WE HAVE THE LETTER OF PETE 13 MCCLOSKEY, EXHIBIT 181, IN WHICH MR. CARTO SAYS: I HAVE NO 14 POSITION OF AUTHORITY OVER THE LEGION. 15 AND IF THAT WAS NOT ENOUGH, THERE’s THE LETTER TO 16 MR. HULSY, CORPORATE COUNSEL, EXHIBIT 182, IN WHICH 17 MR. CARTO STATES EMPHATICALLY HE HAS NO POSITION OF 18 AUTHORITY. THAT HE’s SIMPLY A CONSULTANT TO THE BOARD. 19 I BELIEVE, YOUR HONOR, UNDER ALL THE EVIDENCE THAT 20 THIS ARGUMENT OF MEMBER INCORPORATOR IS MERELY A STRONG 21 WIND. THERE’s NO LEGAL FOUNDATION THEREFOR. 22 THE SECOND DEFENSE PROPOUNDED BY THE DEFENDANTS IN 23 THIS CASE IS A CLAIM THAT MR. CARTO SOMEHOW PURCHASED THE 24 LEGION IN 1966 BY ASSUMING $20,000 IN DEBT. 25 I HAVE RESEARCHED THE LAW AND MR. MUSSELMAN AND I 26 CAN FIND NO AUTHORITY FOR THE PROPOSITION THAT AN INDIVIDUAL 27 CAN BUY A NONPROFIT CORPORATION. I DON'T BELIEVE THERE'S 28 SUCH AUTHORITY. IF COUNSEL CAN CITE ME TO SOME, I WOULD BE
page 864 1 INTERESTED IN FINDING THAT. 2 THE NEXT DEFENSE THAT’s PROFFERED, YOUR HONOR, IS 3 THERE WAS NO CORPORATE OPPORTUNITY. THERE’s BEEN TESTIMONY, 4 YOUR HONOR, THAT AT THE TIME OF JEAN FARREL’s DEATH IN 5 AUGUST OF 1985 THE LEGION WAS IMPECUNIOUS AND ACCORDING TO 6 THE DEFENDANTS, BANKRUPT. THE LEGION NEVER DID FILE FOR 7 BANKRUPTCY. 8 THERE’s BEEN TESTIMONY FROM MR. MARCELLUS, YOUR 9 HONOR, THAT ON THE CONTRARY THE LEGION WAS SOLVENT AFTER 10 JEAN FARREL’s DEATH. NOT ONLY WAS THE LEGION SOLVENT, MONEY 11 WAS GIVEN TO THE LEGION AND PUT IN AN F.D.F.A. ACCOUNT ON 12 THE INSTRUCTION OF MR. CARTO ALLEGEDLY SO THAT CREDITORS 13 SUCH AS MR. MERMELSTEIN WOULD NOT BE ABLE TO REACH THAT 14 MONEY. 15 NOW YOUR HONOR KNOWS A CONVEYANCE IN ANTICIPATION 16 OF A JUDGMENT IS A TORT, AND UNDER NO CIRCUMSTANCES SHOULD 17 THE THEORY THAT WE WILL PUT THE MONEY IN F.D.F.A. TO PROTECT 18 IT FROM CREDITORS BE COUNTENANCE OR GIVEN ANY KIND OF 19 AUTHORITY BY THIS COURT. 20 IN ANY EVENT, MR. MARCELLUS TESTIFIED THAT AT ALL 21 TIMES PRIOR TO THE NEW BOARD OF DIRECTORS BEING ELECTED IN 22 1993 HE TOOK ORDERS FROM MR. CARTO AS A DILIGENT EMPLOYEE 23 PURSUANT TO A WRITTEN CONTRACT. THE CONTRACT STATED THAT HE 24 WAS TO CONSULT WITH MR. CARTO, TO TAKE INSTRUCTIONS FROM 25 HIM. THAT’s WHAT HE DID. 26 I'M NOT SAYING MR. MARCELLUS IS WITHOUT FAULT IN 27 HAVING DIRECTED MONEY MEANT FOR THE LEGION TO GO INTO AN 28 F.D.F.A. ACCOUNT, BUT CERTAINLY MR. MARCELLUS’s WRONGDOING
page 865 1 AT THE ORDER OF MR. CARTO SHOULD NOT BE IMPUTED TO THE 2 CORPORATION AT THE PRESENT TIME BECAUSE CURRENTLY THE 3 CORPORATION IS ATTEMPTING TO LIVE UP TO THE LAW AND THE 4 OBLIGATIONS UNDER CALIFORNIA CORPORATIONS CODE. 5 MR. CARTO TESTIFIED THAT PRIOR TO JANUARY 1, 1990, 6 HE HAD NEVER DISCLOSED TO MR. OR MRS. FURR, TWO ALLEGED 7 OTHER DIRECTORS, THE ACTUAL VALUE OF NECA, THE GROSS VALUE 8 OF THE NECA ESTATE. UNDER THE CIRCUMSTANCES, HOW COULD 9 LAVONNE AND LEWIS FURR MAKE ANY KIND OF A REASONABLE 10 JUDGMENT AS TO WHETHER OR NOT THERE WAS A CORPORATE 11 OPPORTUNITY? 12 MR. MARCELLUS TESTIFIED, YOUR HONOR, THAT THE 13 LEGION HAD FUND-RAISING CAPACITIES AND COULD INDEED AND DID 14 RAISE FUNDS THROUGHOUT THE PERIOD OF TIME AFTER THE FIRE UP 15 UNTIL THE TIME OF THE SETTLEMENT OF THE FARREL ESTATE. THAT 16 TESTIMONY WAS UNREBUTTED. 17 MOST OF THE LAW ON OPPORTUNITY IS FOUND IN FEDERAL 18 CASES. THERE IS VERY LITTLE CALIFORNIA LAW. 19 WITH THE COURT’s INDULGENCE, I WOULD LIKE TO POINT 20 TO A FEW FED. CAL. CASES, NOT TOO MUCH. 21 MR. WAIER: WHAT DID YOU SAY? CORPORATE OPPORTUNITIES 22 COMES UNDER WHAT? 23 MR. BEUGELMANS: FEW CASES UNDER STATE LAWS. THE BULK 24 OF THE LAW IS FOUND IN FEDERAL CASES. 25 MR. WAIER: I'M GOING TO OBJECT AS BEING A SLIGHTLY 26 ERRONEOUS STATEMENT. 27 THE COURT: OVERRULED. 28 MR. BEUGELMANS: IN THE CASE OF GRONER, G-R-O-N-E-R,
page 866 1 VERSUS UNITED STATES, CITE ON THAT IS 73 F.2D, 126, A 1934 2 CASE, THE COURT MADE A VERY INTERESTING COMMENT. 3 MR. WAIER: MAY WE HEAR THE CIRCUIT? 4 MR. BEUGELMANS: YES. THIS IS AN 8TH CIRCUIT CASE. 5 THE COURT STATED: “THE DEFENDANT’s ARGUMENT 6 CONTRARY TO WING VERSUS DILLINGHAM, THAT THE EQUITABLE RULE 7 THAT FIDUCIARIES SHOULD NOT BE PERMITTED TO ASSUME A 8 POSITION IN WHICH THEIR INDIVIDUAL INTERESTS MIGHT BE IN 9 CONFLICT WITH THOSE OF THE CORPORATION CAN HAVE NO 10 APPLICATION WITH THE CORPORATION IS UNABLE TO TAKE THE 11 VENTURE IS NOT CONVINCING. IF DIRECTORS ARE PERMITTED TO 12 JUSTIFY THE CONDUCT ON SUCH A THEORY, THERE WILL BE 13 TEMPTATION TO REFRAIN FROM EXERTING THE STRONGEST EFFORTS ON 14 BEHALF OF THE CORPORATION." 15 DIRECTORS, FIDUCIARIES SUCH AS MR. CARTO, WHO IS 16 AN AGENT, WERE OBVIOUSLY IN A CONFLICT SITUATION. IF IN 17 FACT THEY CAN CLAIM THAT A CORPORATE OPPORTUNITY IS THEIRS 18 AT WILL, THEN OBVIOUSLY THEY'LL HAVE LITTLE INCENTIVE TO 19 FURTHER THE BENEFIT OF THEIR PRINCIPAL. 20 YOUR HONOR, MR. CARTO STATED THAT THE CORPORATION 21 COULD NOT TAKE ADVANTAGE OF NECA, AND THAT HE HAD TO GO AND 22 BORROW THE FUNDS, YET MR. CARTO HIMSELF WAS IMPECUNIOUS. AT 23 THE TIME HE OWNED VIRTUALLY NO ASSETS, HE CLAIMED HE HAD A 24 PORTFOLIO OF STOCKS IN THE FIVE FIGURES. DOES IT MAKE ANY 25 SENSE MR. CARTO COULD GO AHEAD AND BORROW THIS MONEY AND 26 LITIGATE THIS VERY RISKY VENTURE WHEN THE LEGION, WHICH HAD 27 AT LEAST $100,000 OR MORE PUT IN F.D.F.A. ACCOUNT COULD 28 NOT? I SUBMIT THAT’s NONSENSICAL.
page 867 1 MR. CARTO TESTIFIED THAT IN HIS OPINION THE MONEY 2 THAT CAME TO VIBET WAS HIS, WAS HIS MONEY, WEALTH. HE ONLY 3 SPENT 2 OR $3,000 OF HIS OWN MONEY PURSUING THE FARREL 4 ESTATE. THE REST OF THE MONEY CAME FROM LIBERTY LOBBY, 5 WHICH HE IS THE TREASURER, THE CHIEF EXECUTIVE OFFICER AND 6 DIRECTOR. 7 WHY COULD NOT MR. CARTO HAVE ARRANGED A LOAN FROM 8 LIBERTY LOBBY TO THE LEGION? 9 HE WAS ASKED: “DID YOU PROPOSE THIS TO THE 10 FURRS?" 11 HE SAID: “NO." 12 THE FURRS' DEPOSITION, WHICH YOUR HONOR HAS IN 13 EVIDENCE, I ASKED MR. AND MRS. FURR: “DID YOU DISCUSS 14 PERHAPS BORROWING MONEY TO PURSUE THIS NECA ESTATE, THE 15 FARREL LITIGATION?" 16 AND THE FURRS SAID: “NO. WE HAD NO DISCUSSION 17 WITH MR. CARTO TO THAT EFFECT." 18 I ASKED THE FURRS: “DID YOU DISCUSS WITH MR. CARTO 19 THE POSSIBILITY OF FINDING ATTORNEYS ON A CONTINGENCY 20 BASIS?" 21 “NO. THERE WAS NO SUCH DISCUSSION." 22 MR. CARTO TESTIFIED THAT THE ATTORNEYS IN EUROPE 23 WERE SOMEHOW PREVENTED FROM ACCEPTING WORK ON A CONTINGENCY 24 BASIS. I SUBMIT THERE’s NO IMPEDIMENT TO CONTINGENCY FEES 25 IN NORTH CAROLINA. 26 MR. CARTO TESTIFIED THIS MORNING THAT MOST OF THE 27 MONEY WENT TO BIDDLE AND COMPANY FOR ATTORNEY’s FEES. HE 28 TESTIFIED THAT THEY WERE PAID AT THE END OF THE LITIGATION.
page 868 1 THE NEXT DEFENSE THAT THE DEFENDANTS HAVE COVERED 2 IN THIS CASE IS THAT SOMEHOW THE LEGION THROUGH LAVONNE FURR 3 ENTERED IN A CONTRACT WITH MR. CARTO. THIS IS THE FAMOUS 4 SEPTEMBER 1995 — 1985 CONTRACT. I BELIEVE THAT THE 5 DEFENDANTS RELIED UPON EXHIBIT NUMBER — IF I COULD I 6 BELIEVE IT’s RIGHT UP HERE. I APOLOGIZE — THE LETTER IN 7 WHICH MR. CARTO ALLEGEDLY REPORTED TO THE FURRS AND STATED 8 THAT HE WOULD HAVE TO BE GIVEN A FREE HAND IN DECIDING ALL 9 DISTRIBUTIONS. 10 YOUR HONOR, UNDER CALIFORNIA LAW, FOR A BINDING 11 CONTRACT TO EXIST THERE MUST BE CONSENT OF THE PARTIES, BOTH 12 PARTIES. 13 CIVIL CODE SECTION 1567 — 1567 STATES: “THAT AN 14 APPARENT CONSENT IS NOT REAL OR FREE WHEN OBTAINED THROUGH 15 DURESS, MENACE, FRAUD, UNDUE INFLUENCE OR MISTAKE." 16 CIVIL CODE SECTION 1575 STATES: “UNDUE INFLUENCE 17 CONSISTS: ONE, IN THE USE, BY ONE IN WHOM A CONFIDENCE IS 18 REPOSED BY ANOTHER, OR WHO HOLDS A REAL OR APPARENT 19 AUTHORITY OVER HIM, OF SUCH CONFIDENCE OR AUTHORITY FOR THE 20 PURPOSE OF OBTAINING AN UNFAIR ADVANTAGE OVER HIM; 21 TWO, IN TAKING UNFAIR ADVANTAGE OF ANOTHER'S 22 WEAKNESS OF MIND; 23 OR THREE, IN TAKING A GROSSLY OPPRESSIVE AND 24 UNFAIR ADVANTAGE OF ANOTHER’s NECESSITIES OR DISTRESS." 25 YOUR HONOR, THERE’s NO DISCLOSURE TO THE FURRS 26 EVER PRIOR TO THE SETTLEMENT IN SWITZERLAND AS TO THE VALUE 27 OF NECA ASSETS. THE FURRS STATE THEY NEVER KNEW. BUT EVEN 28 MORE INTERESTING, YOUR HONOR, AND I FOUND THIS TO BE
page 869 1 DUMBFOUNDING, WHEN I WAS IN ARKANSAS TAKING THE FURRS' 2 DEPOSITION, LAVONNE FURR’s TESTIMONY IS IT’s HER 3 UNDERSTANDING THAT THE NET RECOVERY THAT THE LEGION SLASH 4 CARTO OBTAINED FROM THE FARREL LITIGATION WAS ABOUT ONE 5 MILLION DOLLARS. HOW CAN THERE HAVE BEEN A CONTRACT, YOUR 6 HONOR? THERE WAS NO CONSENT. THERE WAS NO KNOWLEDGE. 7 EVEN ASSUMING THAT THE FURRS — THAT LAVONNE FURR 8 AND/OR LEWIS FURR OR COMBINATION OF THEM COULD HAVE MADE A 9 CONTRACT, THERE’s SIMPLY NO EVIDENCE THEY HAD KNOWLEDGE. 10 AND MOREOVER, MR. CARTO WAS IN A FIDUCIARY POSITION WITH 11 RESPECT TO THE FURRS AND TO THE LEGION. 12 AN EXISTING LEGAL DUTY CANNOT BE CONSIDERATION FOR 13 A CONTRACT, YOUR HONOR. 14 PRIOR TO SEPTEMBER 1985 LETTER MR. FURR HAD 15 ALREADY MET WITH JEAN EDISON — JEAN FARREL RATHER AND SET 16 UP NECA. HE ALREADY ACCEPTED NECA ON BEHALF OF THE LEGION. 17 THAT IS CLEAR. FROM THE VERY GET-GO, YOUR HONOR, MR. CARTO 18 HAS REPRESENTED TO THE WORLD THAT NECA WAS AN ASSET OF THE 19 LEGION. THE MINUTES, WHICH I WILL READ IF I HAVE TIME LATER 20 ON — I WANT TO GIVE AMPLE TIME TO MR. LANE. I WILL GET 21 BACK TO THOSE IF I HAVE MORE TIME — TO GO THROUGH THE 22 MINUTES OF '85 AND '86 STATE UNAMBIGUOUSLY MR. CARTO WAS 23 GIVEN POWER OF ATTORNEY TO RECOVER — TO RECOVER NECA, WHICH 24 IS AN ASSET OF THE LEGION. THE POWER OF ATTORNEY GIVEN TO 25 MR. CARTO IN 1985 AND '86 STATES NECA IS A WHOLLY-OWNED 26 SUBSIDIARY OF THE LEGION. WHY WOULD THE FURRS HAVE STATED 27 THAT LANGUAGE IN MINUTES AND IN POWERS OF ATTORNEY IF THEY 28 MADE A DEAL TO GIVE AWAY THE LEGION TO MR. CARTO?
page 870 1 MR. CARTO TESTIFIED THAT BY JANUARY 1987 HE 2 CONSIDERED THE FARREL ESTATE TO BE HIS. 3 BUT MORE INTERESTING, YOUR HONOR, ASSUMING THAT 4 SUCH A DEAL HAD BEEN MADE, WHY THE CHARADE MR. CARTO IS 5 PURSUING THIS LITIGATION ON BEHALF OF THE LEGION? IF IN 6 FACT HE WAS SO CONCERNED ABOUT CREDITORS POSSIBLY GRABBING 7 THE ASSETS, WHY WOULD REPEATEDLY DID HE STATE HE WAS ACTING 8 ON BEHALF OF THE LEGION? AND WHY, YOUR HONOR, DID HE FILE 9 SWORN STATEMENTS, NOTARIZED STATEMENTS, IN NORTH CAROLINA TO 10 THE FOLLOWING EFFECT IF IT WAS NOT TRUE? THIS WAS IN 1986 11 AND 1987. 12 READING FROM THE COMPLAINT — THIS IS EXHIBIT 183, 13 PARAGRAPH 5: 14 “THAT NECA CORPORATION, WHICH IS PRINCIPALLY THE 15 SUBJECT OF THIS ACTION, IS A CORPORATION FORMED BY THE 16 DECEASED, JEAN FARREL, E., AS A LIBERIAN CORPORATION ON OR 17 ABOUT NOVEMBER 25, 1983. 18 SIX: THAT NECA CORPORATION HAS SUBSTANTIAL 19 ASSETS, HAVING A VALUE IN EXCESS OF 16 MILLION DOLLARS, 20 U.S., WHICH ASSETS ARE HELD IN MANY DIFFERENT COUNTRIES AND 21 CITIES IN THE WORLD. NECA CORPORATION STOCK WAS COMPOSED OF 22 20 BEARER CERTIFICATES, ALL OF WHICH CERTIFICATES OF STOCK 23 WERE GIFTED TO THE LEGION FOR THE SURVIVAL OF FREEDOM, INC. 24 DURING THE LIFETIME OF JEAN FARREL, E., AND WHICH 25 CERTIFICATES ARE STILL PROPERTY OF THE LEGION FOR THE 26 SURVIVAL OF FREEDOM, INC." 27 AGAIN, YOUR HONOR, EVIDENCE CODE SECTION 623. THE 28 ALLEGED CONTRACT OF 1985 IS VAGUE. IN ANY EVENT, WHAT DOES
page 871 1 IT MEAN WHERE MR. CARTO SAYS: WE'LL HAVE TO PAY ALL AS ONE 2 WORD INVESTORS PRO RATA, IF NECESSARY. WHAT DOES THAT 3 MEAN? THEY GET THE COSTS BACK PRO RATA IF THERE’s NOT 4 ENOUGH RECOVERY, OR DOES THAT MEAN THEY GET TO SHARE THE 5 BONANZA WHEN THE GOODS COME IN? 6 IT’s A STRANGE FORM OF BARRISTRY INVESTING IN A 7 LAWSUIT. IT’s PECULIAR. THE SO-CALLED LETTER OF SEPTEMBER 8 1985 PROPOSAL MADE BY MR. CARTO TO THE FURRS IS VAGUE AND 9 UNCERTAIN. AND NOWHERE IN ALL THE RECORDS PRODUCED BY THE 10 DEFENDANTS IN THIS ACTION IS THERE A CORPORATE MINUTE THAT 11 RATIFIED A CONTRACT OR SPECIFIES THE MEANING OF THIS 12 CONTRACT. THIS WAS UNILATERALLY IN MR. Carto’s MIND. 13 MR. CARTO TOOK ADVANTAGE OF THE FURRS. HE DIDN'T 14 DISCLOSE TO THEM THE FULL VALUE OF NECA EVER. AND WHEN HE 15 CAME DOWN TO THE VALUE OF WHAT HAD BEEN RECEIVED FROM THE 16 FARREL ESTATE, HE LIED TO THEM AND TOLD THEM IT WAS A 17 MILLION DOLLARS OR LESS AND $750,000 HAD GONE TO THE 18 LEGION. 19 OH, MR. CARTO IS A GENEROUS MAN. BACK IN 1966 20 WHEN HE ACQUIRED THE LEGION, ASSUMED DEBTS OF $20,000, AND 21 OF THOSE DEBTS WAS A $5,000 DEBT OWING TO LAVONNE FURR. 22 WHEN HE GOT THE MILLIONS SOME TIME AFTER 1991 WHEN 23 THE DEAL CAME THROUGH AND MR. ROCHAT DISTRIBUTED THE FUNDS, 24 WHAT DID MR. CARTO DO? LOW AND BEHOLD HE PAID THE FURRS 25 BACK. GOT THEIR 5 GRAND BACK. YES, SIR, $5,000 WAS SENT 26 FROM THE VIBET ACCOUNT BACK TO THE FURRS. PRETTY NICE. 27 ODDLY ENOUGH THE FURRS DON'T MENTION THIS IN THE 28 DEPOSITION. THEY SAY WILLIS SENT US $5,000 FROM THE SWISS
page 872 1 BANK. 2 LET’s ASSUME, YOUR HONOR, A CONTRACT HAD BEEN MADE 3 IN 1985 OR THEREABOUTS BETWEEN LEWIS CARTO AND A 4 DULLY-FORMED BOARD OF DIRECTORS AND A MEETING THAT HAD BEEN 5 PROPERLY NOTICED AND CALLED, WHICH NEVER HAPPENED. LET'S 6 ASSUME SUCH A THING HAD OCCURRED FOR THE SAKE OF ARGUMENT. 7 I WOULD MAINTAIN, YOUR HONOR, THAT THE DELEGATION OF 8 AUTHORITY TO WILLIS CARTO PURSUANT TO SUCH A CONTRACT IS 9 VOID AS A MATTER OF LAW. CORPORATIONS IN CALIFORNIA MUST 10 ACT THROUGH THE BOARD OF DIRECTORS. 11 THERE WAS A RECENT CASE, YOUR HONOR, WHICH IS 12 QUITE INTERESTING, QUITE LENGTHY, WHICH SOME WAYS HAVE 13 PARALLELS TO THE CASE BEFORE US, A CASE BROUGHT BETWEEN 14 EXTREME LEFT WING PEOPLE, COMMUNISTS, AND THEIR SATELLITES. 15 THE CASE OF COMMUNIST PARTY OF THE UNITED STATES OF AMERICA 16 VERSUS 522 VALENCIA. I THINK 35 CAL. APP. 4TH 980. 17 IN COMMUNIST PARTY VERSUS 552 VALENCIA THE 18 DEFENDANTS ADVANCED A THEORY THAT THEY WERE ENTITLED TO 19 CERTAIN PROPERTY BECAUSE AUTHORITY HAD BEEN DELEGATED TO AN 20 AGENT BY THE DEFENDANT. AND THE COURT STATES AT 35 CAL. 21 APP. 4TH 990, 994-995, QUOTE: 22 “A CONTRACT PURPORTING TO DELEGATE ULTIMATE 23 AUTHORITY AND CONTROL OVER A CORPORATION FROM THE BOARD OF 24 DIRECTORS TO OUTSIDE PARTIES WITH NO OWNERSHIP INTEREST IN 25 THE CORPORATION IS VOID AND UNENFORCEABLE. INASMUCH AS THE 26 DIRECTORS OF A CORPORATION MUST EXERCISE AND MAINTAIN 27 CONTROL OVER CORPORATE AFFAIRS IN GOOD FAITH, THEY ARE 28 PROHIBITED FROM DELEGATING SUCH CONTROL AND MANAGEMENT TO
page 873 1 OTHERS, AND ANY CONTRACT SO PROVIDING IS VOID." 2 THE DEFENDANTS MAINTAIN THAT THE LEGION WAS 3 BANKRUPT AT OR ABOUT THE TIME THAT THIS ALLEGED CONTRACT WAS 4 MADE. WELL, IF THE LEGION WAS BANKRUPT, THEN ITS ONLY 5 SUBSTANTIAL ASSET WAS ITS INTEREST IN NECA. AND BEFORE THEY 6 COULD GIFT IT, DELEGATE IT, OR SOMEHOW GET RID OF IT, THEY 7 HAD TO GIVE NOTICE TO THE ATTORNEY GENERAL OF THE STATE OF 8 CALIFORNIA PURSUANT TO CORPORATIONS CODE 5913. THAT WAS 9 NEVER DONE. 10 AND IN MARCH 1991 WHEN THERE IS THE ALLEGED 11 MEETING OF THE BOARD OF DIRECTORS — I'LL GET TO IN A 12 SECOND — ON MARCH 5, 1991 AGAIN THERE WAS AN ABANDONMENT OF 13 THIS 7 MILLION, SEVEN AND A HALF MILLION DOLLAR RECOVERY 14 ALLEGEDLY MADE BY THE LEGION TO WILLIS CARTO. 15 WELL, I SUBMIT, YOUR HONOR, THAT CERTAINLY IN 16 MARCH 1991 THIS RECOVERY WAS SUBSTANTIALLY ALL OF THE ASSETS 17 OF THE LEGION, AND THERE WAS NO COMPLIANCE WITH THE 18 REQUIREMENT THAT NOTICE BE GIVEN AT LEAST 20 DAYS PRIOR TO 19 THE TRANSFER TO THE ATTORNEY GENERAL OF THE STATE OF 20 CALIFORNIA. THIS WAS NEVER DONE. 21 NOW MR. WAIER YESTERDAY WAS USING THIS, THE PODIUM 22 HERE, AND MADE A DRAWING AND HE GOT A BRAINSTORM ALL OF A 23 SUDDEN THERE WAS NO ASSET. THERE WAS NO ASSET HE SAID. 24 MR. WAIER: I DON'T THINK I LOOKED THAT WAY BUT GO 25 AHEAD. 26 MR. BEUGELMANS: SAID COME TO HIM IN THE MORNING THAT 27 THE REAL PARTY IN THE CASE SHOULD HAVE BEEN VIBET 28 CORPORATION. I DIDN'T QUITE FOLLOW IT, BUT I THINK THERE
page 874 1 WAS AN ASSET HERE. THE ASSET WAS THE NECA BEARER 2 CERTIFICATES THAT HAVE BEEN GIFTED TO THE LEGION BEFORE JEAN 3 FARREL DIED. THAT’s AN ASSET. THOSE BEARER CERTIFICATES 4 WERE GIFTED TO THE LEGION. THEY'RE A CHOSEN ACTION. 5 I WAS RACKING MY BRAIN TRYING TO UNDERSTAND 6 MR. WAIER’s ARGUMENT, AND PERHAPS HE WAS TRYING TO ARGUE 7 CONTRARY TO MR. Carto’s ASSERTION THAT NECA HAD BEEN GIFTED 8 SOMEHOW. THERE WAS NO GIFT OF NECA. THERE WAS AN INCHOATE 9 CAUSE OF ACTION. BUT EVEN AN INCHOATE CAUSE OF ACTION IN 10 CALIFORNIA IS A THING IN ACTION. I CITE THE COURT TO CIVIL 11 CODE SECTION 953. 12 IT’s OUR POSITION, OF COURSE, THAT THE DEFENDANT 13 IS BOUND BY ITS PRIOR ADMISSIONS THAT NECA HAD BEEN GIFTED 14 TO THE LEGION BEFORE THE DEATH OF JEAN FARREL. BUT EVEN IF 15 THAT WERE NOT THE CASE, EVEN IF SOMEHOW THERE WAS JUST A 16 RIGHT OF ACTION OR CAUSE OF ACTION, THAT WAS A THING IN 17 ACTION. IT WAS OWNED BY THE CORPORATION. IT WAS NOT OWNED 18 BY MR. CARTO AND BEFORE THE LEGION COULD GIFT IT TO HIM OR 19 ENTER IN A CONTRACT, THERE HAD BEEN FULL DISCLOSURE. IF 20 THERE WAS A TRANSFER TO HIM, THERE HAD BEEN NOTICE TO THE 21 ATTORNEY GENERAL. 22 WE HAVE GONE AROUND, YOUR HONOR, AND AROUND ON THE 23 ISSUE OF JEAN FARREL — JEAN FARREL’s INTENTION OR STATE OF 24 MIND. I SUBMIT ON THE UNDERLYING CAUSE OF ACTION IT'S 25 IRRELEVANT TO WHETHER OR NOT PLAINTIFFS ARE ENTITLED TO A 26 JUDGMENT. I UNDERSTAND THE COURT’s REASONING, THOUGH, THAT 27 IT GOES TO ENTITLEMENT TO PUNITIVE DAMAGES, IF ANY. 28 THE COURT: YES. FOR EXAMPLE, I THINK IN THIS CASE IF
page 875 1 MR. CARTO HAD TAKEN THE MONEY AND GIVEN IT TO SOME 2 ORGANIZATION WE CAN ALL AGREE IS LEFT WING, THEN YOU WOULD 3 HAVE A GOOD ARGUMENT. THAT’s WHAT I WAS LOOKING AT A LOT OF 4 THIS. 5 MR. BEUGELMANS: I THINK, YOUR HONOR, TRYING TO ANALYZE 6 THE SITUATION, MR. CARTO SAID THAT HE HAD THE RIGHT TO 7 CONTROL THIS MONEY. HE DIDN'T OWN IT. AND AGAIN, THAT'S 8 KIND OF STRANGE. 9 I LOOKED UP OWNERSHIP IN PREPARATION FOR THE 10 ARGUMENT IN BLACK’s LAW DICTIONARY AND OWNER IS DEFINED AS 11 HE WHO HAS DOMINION OVER THING, REAL OR PERSONAL. 12 IT’s A LITTLE BIT LIKE I HAVE A CLIENT TRUST 13 ACCOUNT LIKE EVERY MEMBER OF THE BAR. I ASSUME MR. LANE 14 PROBABLY IN WASHINGTON, D.C. HAS A CLIENT TRUST ACCOUNT. 15 AND I'M A FIDUCIARY WITH RESPECT TO THAT ACCOUNT. I DON'T 16 THINK IT WOULD MAKE A DIFFERENCE, YOUR HONOR, IF I EMBEZZLED 17 50,000 BUCKS FROM THAT ACCOUNT AND GAVE IT TO A CONVENT OR 18 WENT TO A CASINO. I DON'T THINK THAT THE USE OF PROCEEDS 19 THAT HAVE BEEN CONVERTED MAKES A DIFFERENCE. IF THERE'S 20 BEEN A CONVERSION OF ASSETS BELONGING FROM ONE ENTITY, IT'S 21 REALLY IRRELEVANT WHAT USE HAS BEEN MADE. BUT WHAT IS 22 INTERESTING ABOUT JEAN FARREL’s INTENT IS THAT CONTRARY TO 23 ORAL TESTIMONY OVER ELISABETH CARTO AND WILLIS CARTO WHO 24 OBVIOUSLY HAVE AN INTEREST IN THE ACTION, THE WRITTEN 25 DOCUMENTATION, EXHIBIT 106, 132, 133, 138, THE LETTERS THAT 26 WERE SUBMITTED THIS AFTERNOON SENT BY MISS FARREL TO 27 ELISABETH CARTO, TALK OVER AND OVER AND OVER EACH AND EVERY 28 ONE WITH THE EXCEPTION OF TWO ABOUT THE I.H.R. REVISIONIST
page 876 1 CAUSES, REVISIONIST CONFERENCE. NOT ONE OF THEM MENTIONS 2 LIBERTY LOBBY, AND ONE OF THEM MENTIONS F.D.F.A. IN 3 CONNECTION WITH THE AMOUNT THAT HAD BEEN SENT BY 4 MR. MARCELLUS. THAT — AT MR. Carto’s REQUEST THAT 5 CONTRIBUTIONS BE MADE TO F.D.F.A. THE CONTRIBUTIONS TO THE 6 LEGION, I.H.R., BE MADE TO F.D.F.A. 7 SO IF WE'RE LOOKING AT MISS FARREL’s STATE OF MIND 8 OR HER INTENT — I'M NOT TALKING ABOUT PUNITIVE DAMAGES. I'M 9 TALKING ABOUT GETTING DOWN TO THE TRUTH, THE NITTY GRITTY OF 10 WHAT HAPPENED BASED ON THE EVIDENCE, BASED UPON THIS WOMAN 11 SPEAKING FROM THE GRAVE. IT WAS HER INTENT TO LEAVE THE 12 MONEY TO THE INSTITUTE FOR HISTORICAL REVIEW, A REVISIONIST 13 PUBLICATION. THAT WAS HER INTEREST. 14 SHE WROTE TO MRS. CARTO ABOUT MUTTIE, ABOUT THIS 15 AND THAT, ABOUT GOING DOWN THE RHINE; BUT THE WRITTEN 16 EVIDENCE IS, YOUR HONOR, HER TESTAMENTARY OR THE INTENTION 17 AS A BENEFACTOR WAS THE INSTITUTE FOR HISTORICAL REVIEW. 18 I HAVE ONE LAST POINT, YOUR HONOR, I WOULD LIKE TO 19 TALK ABOUT. IT GOES TO THE MAIN THRUST OF THE LITIGATION IN 20 THE CASE. THERE IS A CAUSE OF ACTION FOR CONSPIRACY TO 21 COMMIT A FRAUD. AT THE TIME I DRAFTED THE COMPLAINT I 22 BELIEVE I WAS NOT AWARE OF THE CONSPIRACY IS NOT A SEPARATE 23 CAUSE OF ACTION IN CALIFORNIA. THERE IS NO SUCH THING AS A 24 CIVIL CONSPIRACY CAUSE OF ACTION. THERE IS A CAUSE OF 25 ACTION FOR FRAUD AND A CAUSE OF ACTION FOR CONVERSION. WHAT 26 IS INTERESTING IS IN THE CIVIL CONTEXT THE CONSPIRACY 27 BECOMES SUBSUMED WITHIN JOINT AND SEVERAL LIABILITY. THE 28 THEORY OF JOINT AND SEVERAL LIABILITY ACTS IN THE CIVIL
page 877 1 CONTEXT THE WAY THE ELEMENTS OF THE CRIMINAL CONSPIRACY ACT 2 IN A CRIMINAL CASE. 3 I'M QUOTING A LITTLE BIT FROM WITKIN, AND I WILL 4 TRY TO BE BRIEF AND HIT SOME HIGH POINTS. 5 I AM READING FROM WITKIN ON TORTS, I BELIEVE, 6 VOLUME 6. I DIDN'T COPY THIS CAREFULLY. I BELIEVE IT'S 7 VOLUME 6, WITKIN ON TORTS, NINTH EDITION, BEGINNING AT 8 SECTION 42 — ACTUALLY SECTION 43. I'LL HIT A FEW 9 HIGHLIGHTS WHICH ARE RELEVANT TO WHO IS RESPONSIBLE IN THIS 10 CASE. 11 “THE TERM 'JOINT TORTFEASORS' HAS BEEN NARROWLY 12 DEFINED TO APPLY ONLY TO THOSE WHO ACT IN CONCERT TO 13 ACCOMPLISH SOME COMMON PURPOSE OR PLAN, OR WHOSE CONCERTED 14 ACT” — I'M SORRY, “WHOSE CONCERTED ACTS CAUSE THE HARM." 15 TO ESTABLISH LIABILITY IT MUST BE SHOWN THAT THE 16 DEFENDANT IS PROCEEDING TORTIOUSLY WITH INTENT OR 17 NEGLIGENCE. 18 “OCCASIONALLY, IN ACTIONS AGAINST JOINT 19 TORTFEASORS, THE DEFENDANTS ARE CHARGED WITH 20 CONSPIRACY. . . STRICTLY SPEAKING, HOWEVER, THERE IS NO 21 SEPARATE TORT OF CIVIL CONSPIRACY, AND THERE IS NO CIVIL 22 ACTION FOR CONSPIRACY TO COMMIT A RECOGNIZED TORT UNLESS THE 23 WRONGFUL ACT ITSELF IS COMMITTED AND DAMAGES RESULT 24 THEREFROM. 25 HENCE, WHERE THE COMPLAINT CHARGES A CONSPIRACY 26 AND THE COMMISSION OF A WRONGFUL ACT, THE ONLY SIGNIFICANCE 27 OF THE CONSPIRACY CHARGE IS THAT EACH MEMBER MAY BE HELD 28 RESPONSIBLE AS A JOINT TORTFEASOR, REGARDLESS OF WHETHER OR
page 878 1 NOT HE DIRECTLY PARTICIPATED IN THE ACTS. 2 THE REQUISITE CONCURRENCE IN TORTIOUS SCHEME WITH 3 KNOWLEDGE OF ITS UNLAWFUL PURPOSE MAY BE INFERRED FROM THE 4 NATURE OF THE ACTS DONE, AND THE RELATION OF THE PARTIES, 5 THE INTERESTS OF ALL THE ALLEGED CONSPIRATORS, AND OTHER 6 RELEVANT CIRCUMSTANCES." 7 IN SECTION 45 OF WITKIN ON TORTS HE TALKS — CITES 8 TO A CASE OF WYATT, W-Y-A-T-T, VERSUS UNION MORTGAGE COMPANY 9 (1979) 24 CAL. 3D 773, 784 AND 785. 10 MR. WITKIN STATES IN THE WYATT CASE: “AN ACTION 11 BASED ON FRAUD AND BREACH OF FIDUCIARY DUTY, THE STATUTE OF 12 LIMITATIONS HAD RUN ON EACH OF THE WRONGFUL ACTS OF 13 MISREPRESENTATION AND CONCEALMENT. HOWEVER, THE ALLEGATION 14 AND PROOF OF A CIVIL CONSPIRACY BROUGHT IN THE LAST” QUOTE 15 “LAST OVERT ACT DOCTRINE,” DASH “THAT THE STATUTE DOES NOT 16 BEGIN TO RUN UNTIL AFTER THE CULMINATING ACT IN THE 17 CONSPIRACY." 18 LATER SECTION 45 WITKIN STATES: “A CONSPIRACY IS 19 NOT ACTIONABLE UNLESS A WRONGFUL ACT WAS COMMITTED WITH 20 RESULTING DAMAGE." 21 “THE GIST OF THE TORT IS THE DAMAGE RESULTING TO 22 THE PLAINTIFF FROM AN OVERT ACT OR ACTS DONE PURSUANT TO THE 23 COMMON DESIGN. HENCE, IN TORT A CONSPIRATOR IS A JOINT 24 TORTFEASOR LIABLE FOR ALL DAMAGES IRRESPECTIVE OF WHETHER HE 25 WAS A DIRECT ACTOR." 26 YOUR HONOR, DEFENDANTS ELISABETH CARTO, WILLIS 27 CARTO, LAVONNE FURR, LEWIS FURR AND HENRY FISCHER ARE 28 CONTINUING THIS CONSPIRACY TO THIS DAY.
page 879 1 MR. CARTO TESTIFIED THAT HE BELIEVED THERE ARE 2 STILL ASSETS IN VIBET. VIBET IS UNDER HIS CONTROL. HE 3 GIVES ORDERS TO VIBET. WE HEARD HIM STATE THIS MORNING HE 4 ORDERED AUGUST 1993 THAT VIBET TRANSFER $100,000 FROM ITS 5 ACCOUNT PURSUANT TO LIBERTY LOBBY’s ACCOUNT IN WASHINGTON, 6 D.C. 7 THE CONSPIRACY IS ONGOING. THESE DEFENDANTS ARE 8 PERSISTING IN THEIR POSITION DESPITE THE FACT THAT ELISABETH 9 CARTO LOST THE ACTION IN ORANGE COUNTY AND DID NOT APPEAL 10 JUDGE POLIS’s RULING WHERE JUDGE POLIS SAID SHE WAS NOT A 11 DIRECTOR. SHE PERSISTS IN ACTING AS A DIRECTOR IN DIRECT 12 VIOLATION OF A COURT ORDER. TO THIS DATE SHE COMES BEFORE 13 THIS COURT, YOUR HONOR, AND STATES, “I'M A DIRECTOR OF THE 14 LEGION FOR THE SURVIVAL OF FREEDOM.” THIS IS OUTRAGEOUS 15 CONDUCT, YOUR HONOR. 16 THE FURRS PERSIST IN REPRESENTING THEMSELVES AS 17 DIRECTORS OF THE CORPORATION TO THIS DAY. THERE ARE 18 EXHIBITS, YOUR HONOR, LETTERS IN '84 AND '85 SIGNED BY THE 19 FURRS AND BY THE CARTOS PURPORTING TO ORDER MR. WEBER, 20 MR. MARCELLUS AND RAVEN TO TAKE CERTAIN ACTION AND TO DESIST 21 FROM REPRESENTING THEMSELVES. MY CLIENTS ARE THE ONLY 22 LEGITIMATE BOARD AS THE LEGION. 23 IT’s OUR POSITION, YOUR HONOR, THAT THE CONVERSION 24 IS ONGOING. THE CONVERSION PROBABLY BEGAN SOMETIME IN 25 MID1991 WHEN THE MONEY STARTED COMING IN AFTER THE HOOPER 26 LETTER. AND THE CONVERSION CONTINUED THEREAFTER MONTH AFTER 27 MONTH. MONEY WAS SPENT FOR VARIOUS PURPOSES WITHOUT AN 28 ACCOUNTING. $2,650,000 WAS ALLEGEDLY LENT TO LIBERTY
page 880 1 LOBBY. AS LATE AS LATE 1993 THE LOANS KEPT COMING IN FROM 2 VIBET TO LIBERTY LOBBY. 3 IN HIS TESTIMONY THIS MORNING MR. CARTO SAID THAT 4 ABOUT $500,000 WENT TO F.D.F.A. MR. CARTO TESTIFIED 5 YESTERDAY THAT THE LEGAL EXPENSES ABROAD WERE EXPENSIVE 6 BECAUSE THERE WERE MANY PEOPLE TO MANIPULATE. AND HE'S 7 COMING TODAY WITH EXHIBIT 208, WHICH I GUESS HE AND HIS WIFE 8 PREPARED EARLY THIS MORNING OR LATE LAST NIGHT, PURPORTING 9 TO BE AN ACCOUNTING OF WHAT HAPPENED TO THE $7,334,000 10 RECOVERY. IT’s INTERESTING, YOUR HONOR, EVERYTHING IS 11 ROUNDED OFF TO THE LAST $100,000 EXCEPT FOR ELISABETH 12 Carto’s EXPENSE OF $20,000 LOOKS LIKE — I'M SORRY. I 13 APOLOGIZE. EVERYTHING IS ROUNDED OFF TO THE CLOSEST 14 $10,000. WHAT IS A FEW $10,000 BETWEEN FRIENDS, RIGHT? 15 IT’s OUR POSITION, YOUR HONOR, THAT BEGINNING IN 16 1991 SOME TIME, EXACT DATE IS NOT CLEAR, BUT SOMETIME IN THE 17 SUMMER OF 1991 WHEN MONIES STARTED TO APPEAR FROM THE VIBET 18 ACCOUNT, THE CONVERSION OF THE ASSETS, WHICH IS THE MONEY, 19 BEGAN. 20 WE HAVE A DEFAULT AGAINST VIBET IN THIS CASE AS WE 21 DO AGAINST THE FURRS. WITH RESPECT TO ALL OF THE 22 DEFENDANTS, YOUR HONOR, THE PLAINTIFF IS WILLING TO GIVE 23 MR. CARTO THE BENEFIT OF THE DOUBT ON THIS DUBIOUS 24 ACCOUNTING, AND IT’s AGREED $7,334,000 WAS THE AMOUNT THAT 25 WAS CONVERTED, AND IN THE ABSENCE OF A PROPER ACCOUNTING 26 FROM THIS TREASURER OF LIBERTY LOBBY, I BELIEVE, YOUR HONOR, 27 THAT PLAINTIFF IS ENTITLED TO AN AWARD IN THAT AMOUNT AS OF 28 JUNE 1, 1991 WITH INTEREST THEREON AT THE LEGAL RATE OF
page 881 1 INTEREST. 2 YOUR HONOR HAS ALREADY STATED IT’s NOT INCLINED TO 3 AWARD PUNITIVE DAMAGES, AND I WILL — I WON'T BELABOR THE 4 COURT. I'LL DEFER TO THE COURT’s INTENDED ACTION IN THAT 5 REGARD. I SIMPLY SAY THAT IN GOING THROUGH THE FACTS OF 6 THIS CASE I WOULD LIKE THE COURT TO KEEP IN MIND A COUPLE OF 7 EXHIBITS. I THINK THESE EXHIBITS PULL A MASK OF DECEIT OFF 8 THE FACE OF THE DEFENDANTS IN THIS CASE. 9 IF YOUR HONOR WOULD PLEASE TAKE A CLOSE LOOK AT 10 EXHIBIT 41 AND 42. 11 THE COURT: THOSE ARE THE MARCH 5TH MEETING? 12 MR. BEUGELMANS: RIGHT. YOUR HONOR, MARCH 5 MEETINGS 13 ARE INTERESTING BECAUSE THERE’s TWO OF THEM ON THE SAME 14 DATE. HOW VERY PECULIAR THERE ARE TWO DIFFERENT MEETINGS OF 15 THE BOARD OF DIRECTORS ON ONE DAY: ONE PREPARED BY LEWIS B. 16 FURR, SIGNED BY HIM; AND ONE BY LAVONNE FURR, SIGNED BY HER, 17 AND THEY BOTH OCCURRED AT THE SAME TIME, YOUR HONOR, 10 A.M. 18 ON THE SAME DATE, THE SAME TIME. 19 ONE MEETING, THE ONE PREPARED BY LEWIS FURR, MAKES 20 NO MENTION OF THE FARREL ESTATE. THE OTHER MEETING, THE ONE 21 PREPARED BY LAVONNE FURR, STATES THAT THE LEGION HAS 22 RESOLVED THAT THE FUNDS FROM THE ESTATE OF MISS JEAN FARREL 23 NOT BE ACCEPTED INTO THE CORPORATION. PECULIAR. 24 WE ALSO KNOW, YOUR HONOR, THAT MR. KERR DID NOT 25 ATTEND THE MEETING, BUT HIS NAME APPEARS AS BEING PRESENT. 26 MR. TAYLOR STATES HE DIDN'T ATTEND EITHER MEETING, BUT HIS 27 NAME APPEARS ON BOTH MINUTES AS BEING PRESENT. SOMETHING IS 28 ROTTEN, YOUR HONOR.
page 882 1 THEN WE HAVE EXHIBIT 60 AND 63, YOUR HONOR. ON 2 SEPTEMBER 21, 1993 MR. CARTO SENT A LETTER TO LAVONNE FURR. 3 HE STATES: 4 “DEAR LAVONNE: YOUR RESIGNATIONS REALLY SHOCKED 5 ME." 6 THEN HE GOES ON ON PAGE 3 TO SAY HE ENCLOSED A 7 BLANK OR A DRAFT MINUTES OF THE MEETING OF THE BOARD OF 8 DIRECTORS. “PLEASE TYPE THIS UP ON THE SAME MACHINE OF YOUR 9 RESIGNATIONS AND ALSO SEND IT BACK TO ME WITH THE ENCLOSED 10 LABEL." 11 WHAT COMES BACK TO HIM IN RESPONSE, A BACK-DATED 12 MINUTE OF SEPTEMBER 16, 1993. AND THIS BACK-DATED MINUTE 13 PURPORTEDLY ELECTS HENRY FISCHER AND ELISABETH CARTO AS 14 DIRECTORS OF THE LEGION. 15 YOUR HONOR, THE DEFENDANTS HAVE BEEN WILLFULLY 16 FALSE IN THIS MATTER. NOTHING THEY SAY CAN BE BELIEVED. 17 THIS ACCOUNTING IS A JOKE. I'M TALKING ABOUT EXHIBIT 208. 18 AND I'LL CLOSE, YOUR HONOR, BY ASKING YOU THAT THE 19 COURT TAKE A LOOK AT EXHIBIT 209 BEFORE IT MAKES THE RULING 20 IN THIS MATTER. THIS IS THE MEMORANDUM SENT BY MR. HUTZEL, 21 THE LEGION’s ACCOUNTANT CONTROLLER — I'M SORRY. ONCE HE 22 WAS AN ACCOUNTANT, NOW A CONTROLLER. I GUESS HE GOT A PAY 23 INCREASE. BUT WHAT IS INTERESTING ABOUT THE LETTER, YOUR 24 HONOR, IT’s DATED MARCH 23, 1994 AFTER — AFTER THE LAST OF 25 THE $2,650,000 LOAN HAD BEEN MADE BY VIBET TO LIBERTY 26 LOBBY. AND IT PROPOSES THAT LIBERTY LOBBY AND G.E.F. CAN 27 CLEAR THE ACCOUNTS WITH F.E.L. BY BORROWING FROM VIBET THE 28 SUM OF $2,303,000. WHERE IS ALL THIS MONEY, MR. CARTO?
page 883 1 MR. LANE: YOUR HONOR, I THINK THAT’s REALLY IMPROPER 2 TO ADDRESS MR. CARTO, LOOK DIRECTLY AT HIM AND ASK HIM A 3 QUESTION. HE CAN'T — HE’s NOT ALLOWED TO ANSWER. WE KNOW 4 THAT. 5 THE COURT: NO, BUT -- 6 MR. LANE: IT CERTAINLY TEMPTED HIM TO DO IT. 7 THE COURT: MR. CARTO HAS BEEN TEMPTED TO GIVE THE 8 CLOSING STATEMENT. THROUGHOUT THIS CLOSING STATEMENT I HAVE 9 BEEN WATCHING HIM. HE KEEPS TALKING TO BOTH OF YOU AND 10 SAYING THIS AND THAT. IT’s SORT OF LIKE A CRIMINAL CASE 11 WHEN THE ATTORNEY TURNS TO THE DEFENDANT AND SAYS, YOU KNOW, 12 HOW DID YOU GET YOUR FINGERPRINT ON THE DEAD BODY? 13 MR. WAIER: IT’s IMPROPER CLOSING ARGUMENT. 14 THE COURT: I DON'T THINK SO, COUNSEL. IT’s PERFECTLY 15 WITHIN THE AMBIT OF ARGUMENT. 16 COUPLE OF QUESTIONS. NUMBER ONE, THE CAUSE OF 17 ACTION NUMBER 6, THE 5142 SECTION OF THE CORPORATIONS CODE, 18 ASSUMING I'M RIGHT ON THAT SECTION. I DON'T HAVE IT. 19 DOESN'T THAT ONLY JUST GIVE YOU A CAUSE OF — IT DOESN'T 20 GIVE A CAUSE OF ACTION. IT JUST SAYS YOU CAN SUE SOMEBODY. 21 THEN YOU HAVE TO REPORT. I DON'T THINK IT’s A SEPARATE 22 CAUSE OF ACTION. 23 MR. BEUGELMANS: NO, IT DOESN'T. IT’s A PREREQUISITE 24 TO BRINGING THE SUIT TO COURT. WE HAVE TO GIVE NOTICE. AND 25 WE HAVE DONE THAT. WE SHOWED THE LETTERS TO THE SECRETARY 26 OF STATE. 27 ONE LAST POINT AND I'LL CLOSE AND GIVE MR. LANE A 28 CHANCE BEFORE HE HAS TO LEAVE. ALSO UNDER 5142 IT IS
page 884 1 IMPORTANT. IT GIVES US, GIVES PLAINTIFF IN THIS CASE, NOT 2 ONLY AN ACTION FOR DAMAGES BUT THE RIGHT TO BRING AN 3 INJUNCTION WHICH WE SOUGHT. 4 THE COURT: IT DOES DO THAT. IT GIVES A RIGHT TO BRING 5 AN INJUNCTION TO NOTIFY THE ATTORNEY GENERAL AND GIVES YOU 6 SOME OTHER THINGS, BUT IT IS NOT A SECOND CAUSE OF ACTION. 7 I DON'T BELIEVE THAT IT IS. 8 MR. BEUGELMANS: NO. 9 THE COURT: THE OTHER THING IS THIS. THERE’s AN ACTION 10 FOR CONVERSION NUMBER TWO, CAUSE OF ACTION NUMBER TWO. IS 11 IT YOUR ARGUMENT LIBERTY LOBBY IS RESPONSIBLE FOR THE 7.2 12 MILLION CONVERSION, OR ARE THEY ONLY RESPONSIBLE FOR WHAT 13 THEY HAVE BORROWED FROM VIBET, $2,600,000? 14 MR. BEUGELMANS: $2,650,000. IT’s OUR POSITION THAT AS 15 CO-CONSPIRATORS SINCE THEY'RE ACTING THROUGH THE AGENT, 16 MR. CARTO, WHO IS A DIRECTOR, WHO IS AN OFFICER, AND WHO IS 17 THE SECRETARY OF THE CORPORATION, IT’s OUR POSITION THAT 18 THEY'RE JOINTLY AND SEVERALLY RESPONSIBLE UNDER THE STATUTE 19 AND UNDER THE PORTIONS OF WITKIN I CITED TO THE COURT. THE 20 COURT CAN READ WITKIN MORE CLOSELY. I BELIEVE THAT’s WHERE 21 THERE HAS BEEN CONCERTED ACTION. THANK YOU. 22 MAY I MAKE ONE MORE POINT? THIS IS ON DAMAGES. 23 THEN I'LL BE QUIET AND SIT DOWN. 24 THERE’s A CASE, AMERICA LOAN CORPORATION VERSUS 25 CALIFORNIA COMMERCIAL CORPORATION, 1963 CASE, 211 CAL. 26 APP. 2D 515. IN THE DECISION STATES: “ONE WHOSE 27 WRONGFUL” -- 28 MR. WAIER: WHAT IS THE YEAR?
page 885 1 MR. BEUGELMANS: 1963. “ONE WHOSE WRONGFUL CONDUCT HAS 2 RENDERED DIFFICULT THE ASCERTAINMENT OF DAMAGES CANNOT 3 ESCAPE LIABILITY BECAUSE THE DAMAGES CANNOT BE MEASURED WITH 4 EXACTNESS." 5 THANK YOU VERY MUCH. 6 THE COURT: MR. LANE, WOULD YOU LIKE — DO YOU PREFER 7 TO GO FIRST? 8 MR. LANE: YES. MAY IT PLEASE THE COURT, YOUR HONOR, I 9 REPRESENT LIBERTY LOBBY, A NOT-FOR-PROFIT CORPORATION. 10 DESPITE THE STATEMENT MADE BY MR. BEUGELMANS, IT IS NOT SUCH 11 AN ORGANIZATION. OFFERED NO EVIDENCE, NOTHING IN THE 12 RECORD, BUT HE MADE THAT STATEMENT, AND WE WILL GET TO OTHER 13 STATEMENTS WHICH MR. BEUGELMANS MADE WHICH HE KNEW TO BE 14 FALSE. 15 WHEN IT COMES TO THE QUESTION OF WHO ONE CAN 16 BELIEVE IN THIS CASE, IT’s INTERESTING TO EXAMINE WHAT 17 MR. WEBER HAS SAID, WHAT MR. BEUGELMANS HAS SAID, WHAT THE 18 REST OF THOSE ON THAT SIDE HAVE DONE AND SAID. 19 THE COURT: LET’s NOT MAKE THIS A FIGHT BETWEEN 20 ATTORNEYS. 21 MR. LANE: NO, I RATHER NOT DO THAT. I DON'T WANT MY 22 CLIENT POINTED AT. I WON'T DO THAT TO THEM. I'LL ADDRESS 23 THE COURT. I THINK THAT’s WHAT A CLOSING STATEMENT IS 24 SUPPOSED TO BE. 25 THIS IS A CASE WHERE A LITTLE CORPORATION WORTH 26 NOTHING, ALMOST NOTHING WHEN MR. CARTO ACQUIRED IT, EXCEPT 27 IT HAD THE AMERICAN MERCURY MAGAZINE. 28 IT WAS A CLOSE CORPORATION, AND THE RULES APPLY TO
page 886 1 A SMALL CLOSE CORPORATION HERE. IT WAS A LITTLE CORPORATION 2 THAT DID SOME INTELLECTUAL WORK. SOMEONE SAID IT WENT ON 3 DECADE AFTER DECADE AFTER DECADE DOING THAT WORK UNTIL THE 4 EMPLOYEES DISCOVERED THERE WAS MONEY, AND NOW WE HEAR THAT 5 MR. WEBER SAID THIS AND MR. MARCELLUS SAID THAT. THEY WERE 6 EMPLOYEES. THEY WEREN'T TOLD. WELL, I AM SURE IF MR. TRUMP 7 DOES SOMETHING HE DOESN'T TELL THE EMPLOYEES EVERYTHING HE 8 DOES OR GENERAL MOTORS OR THE LARGE CORPORATIONS OR THE 9 SMALL CORPORATIONS. THESE WERE EMPLOYEES. THEY HAD NO 10 RIGHT TO THE KNOWLEDGE WHICH THEY WERE SO UPSET ABOUT NOT 11 RECEIVING. 12 MISS FURR HAS BEEN THE OPERATING FORCE WITH HER 13 HUSBAND IN THIS CORPORATION FOR 30 YEARS. EVERYTHING THEY 14 DID DURING THAT WHOLE TIME WAS DONE IN THE SAME FASHION, THE 15 BOARD OF DIRECTORS MEETINGS, THE MINUTES, ETC. THAT WAS 16 DONE THE WAY SMALL CORPORATIONS DO THESE THINGS. NO ONE 17 EVER COMPLAINED UNTIL GREED RAISED ITS HEAD BECAUSE THERE 18 WAS A POSSIBILITY TO SECURE SOME MONEY. 19 I KNOW THAT MR. BEUGELMANS HAS TOLD THAT YOU THERE 20 ARE ALMOST NO CALIFORNIA CASES. I WENT NEXT DOOR TO THE 21 LIBRARY OVER THERE, AND I'M FORTUNATE I LIVE IN WASHINGTON, 22 D.C. ACROSS THE STREET FROM THE UNITED STATES SUPREME 23 COURT. THAT’s MY HOUSE, MY OFFICE, AND THAT IS A WONDERFUL 24 LIBRARY. I'M USED TO UNDERUSED WONDERFUL LIBRARIES WITH 25 LARGE STAFFERS, AND THIS DOESN'T FALL INTO THAT CATEGORY 26 OVER HERE BUT -- 27 THE COURT: YOU WIND UP 13 MILES FROM THE PACIFIC OCEAN 28 IN A TRAILER.
page 887 1 MR. LANE: RIGHT. 2 MR. WAIER: BUT A NICE TRAILER. 3 MR. LANE: I NEVER HAD A JUDGE MORE PATIENT AND APPEARS 4 TO BE MORE FAIR DURING THIS WHOLE PROCEEDING. I WILL TELL 5 YOU I TRIED CASES, AND MR. BEUGELMANS TOLD US 20 YEARS HE 6 NEVER SEEN SUCH CHICANERY. I'M IN THE 46TH YEAR OF PRACTICE 7 NOW. I HAVE SEEN CHICANERY, EVERYTHING, AND SOME IN THIS 8 COURTROOM AND SOME IN THE COMPLAINT. 9 I WANDERED TO THE LIBRARY AND GOT 12 CALIFORNIA 10 CASES PLUS A WHOLE SLEW OF CALIFORNIA LAW REVIEW CITATIONS. 11 I DON'T KNOW WHY MR. BEUGELMANS COULDN'T FIND THEM ON THE 12 QUESTION OF THE DOCTRINE OF CORPORATE OPPORTUNITIES. THAT'S 13 BASICALLY WHAT IS BEING DISCUSSED HERE. 14 THE LAW IS VERY, VERY CLEAR. IF A CORPORATION IS 15 FINANCIALLY OR OTHERWISE UNABLE TO TAKE ADVANTAGE OF AN 16 OPPORTUNITY, OR AFTER BEING OFFERED IT REFUSES, THERE’s NO 17 OBJECTION TO THE DIRECTORS' ACQUISITION OF IT. AND IT CITES 18 RANKIN V. FREBANK, F-R-E-B-A-N-K, COMPANY, 1975 CASE, 47 19 C.A. 3D 75. GOES ON. AND NUMEROUS OTHER CASES TAKE THE 20 SAME POSITION. 21 THERE’s AN INTERESTING CASE UNDER THERE WHICH IS 22 DIFFICULT FOR ME TO BELIEVE. I DIDN'T HAVE A CHANCE TO 23 RESEARCH IT. KLEINSASSER, K-L-E-I-N-S-A-S-S-E-R, 24 V MCNAMARA, 1933 CASE, 129 C.A. 49 IN WHICH THE DEFENDANT, 25 DIRECTORS OF AN OIL COMPANY, WERE CONDUCTING DRILLING 26 OPERATIONS. AND WHEN THEY STRUCK OIL THEY STOPPED THE 27 DRILLING PER SE, BOUGHT UP ALL THE LAND OPTIONS AND THE 28 LEASES IN THE VICINITY. THAT I THOUGHT WOULD BE THE CLASSIC
page 888 1 CASE WHERE REALLY THEY HAVE DONE SOMETHING WRONG. 2 THEY — THEN THEY CONTRACTED WITH THE THIRD PARTY 3 TO BUY BOTH THEIR LANDS AND THE CORPORATION PROPERTY. HELD 4 THE CONTRACT WAS VALID. THAT BEING NO AFFIRMATIVE EVIDENCE 5 OF FRAUD OR UNFAIRNESS. 6 I AM GLAD I DIDN'T HAVE TO ARGUE THAT CASE. THIS 7 ONE IS A LOT EASIER. WHAT IS CLEAR HERE, YOUR HONOR, THERE 8 WAS NO CORPORATE OPPORTUNITY. ELISABETH Carto’s MOTHER 9 DIED, AND SHE GOT A $14,000 ESTATE AND GAVE IT TO THE LEGION 10 BECAUSE THEY HAD NO MONEY TO MEET PAYROLL. 11 I KNOW ABOUT THAT MERMELSTEIN, WHICH HAPPENED AT 12 THE SAME TIME. I TRIED THE CASE BEFORE JUDGE LACKS, AND I 13 KNOW THAT MR. HULSY AND I REPRESENTED LIBERTY LOBBY IN THAT 14 CASE, NOT THE LEGION, NOT THE — NOT THE LEGION, NOT THE 15 I.H.R. 16 MR. BEUGELMANS: THIS I WOULD OBJECT TO, MR. LANE 17 TESTIFYING. THIS IS NOT WITHIN THE RECORD. 18 THE COURT: HE’s NOT TESTIFYING. IT’s — AGAIN, I WILL 19 ALLOW PRETTY WIDE DISCRETION IN CLOSING ARGUMENT. 20 MR. LANE: THANK YOU. 21 THE COURT: ANYTHING THAT’s REASONABLE. 22 MR. LANE: THANK YOU. AND DURING THAT TRIAL — I'M 23 TALKING ABOUT THE RECORD HERE — DURING THAT TRIAL, YOUR 24 HONOR, MR. HULSY WAS COUNSEL FOR THE LEGION. THE LEGION HAD 25 NO MONEY TO PAY HIM, NOT A NICKEL. THAT’s THE SAME TIME 26 FRAME. DURING THAT TRIAL THEY HAD NO MONEY. LIBERTY LOBBY 27 PAID THE BILL. 28 MR. CARTO ARRANGED FOR LIBERTY LOBBY TO PAY THE
page 889 1 BILL. THEY COULDN'T EVEN DEFEND THEMSELVES AGAINST A 2 MULTIMILLION DOLLAR LAWSUIT BROUGHT AGAINST THEM, WHICH 3 LIBERTY LOBBY WAS AGAIN DRAGGED INTO AFTER HAVING DONE 4 NOTHING, AS THE COURT RULED, AND WE DID THE BASIC WORK. 5 MR. HULSY WAS PAID, I THINK THE TESTIMONY IS, $60,000. THE 6 LEGION DIDN'T HAVE ONE NICKEL TO PAY HIM. LIBERTY LOBBY 7 PAID THE LAW BILLS. 8 NOW THEY SAY THEY KNOW THEY HAD ALL THE MONEY AT 9 THAT TIME. WHO KNEW? MARCELLUS AND WEBER? TWO EMPLOYEES? 10 OR LAVONNE FURR? WILLIS CARTO? MR. FURR? LEWIS FURR? WHO 11 HAD — WHO WAS IN A POSITION TO KNOW WHAT THE SITUATION 12 WAS? WHAT ASSETS THEY HAD WILLIS CARTO GOT FOR THEM FROM 13 1966 UNTIL THE TIME HE WAS DEPOSED BECAUSE GREED STRUCK 14 MR. MARCELLUS AND WEBER AND O’Keefe AND THE REST OF THEM AND 15 THEY DISCOVERED WITH THE HELP OF MR. HULSY THEY COULD TAKE 16 THIS OVER AND GET THESE MILLIONS OF DOLLARS. 17 AFTER THE FACT. LET’s TALK ABOUT BEFORE THE FACT 18 WHEN THEY HEAR OF THIS OPPORTUNITY, THIS CORPORATE 19 OPPORTUNITY. WHAT IS THE OPPORTUNITY? A WILL HAS BEEN LEFT 20 FOR THE ENTIRE ESTATE OF JEAN FARREL, AND THE LEGION IS NOT 21 A BENEFICIARY. THAT’s THE RECORD AT THAT TIME. IT’s EASY 22 NOW. THEY CAN MAKE FUN — MR. BEUGELMANS CAN MAKE FUN OF 23 THIS ACCOUNT. WHERE DID THE MONEY COME FROM? HOW DID IT 24 GET HERE? TELL YOU WHAT MR. CARTO SHOULD HAVE DONE. HE 25 SHOULD HAVE SAID: LISTEN. YOU CAN'T DO IT. IF YOU CAN DO 26 IT, FINE. IF YOU CAN'T, FORGET IT. I'M NOT DOING 27 ANYTHING. AND WE WOULDN'T BE HERE TODAY. LEGION WOULD NOT 28 HAVE GOTTEN A PENNY. THEY GOT $760,000, BUT THEY WOULDN'T
page 890 1 HAVE GOT A PENNY IF MR. CARTO WALKED AWAY. 2 AND NOW LET’s TALK ABOUT THE DECEIT WORD USED BY 3 MR. BEUGELMANS. MR. BEUGELMANS, I BELIEVE, SIGNED THIS 4 COMPLAINT. IT WAS NOT VERIFIED, AND I KNOW WHY IT WAS NOT 5 VERIFIED BECAUSE IT CONTAINS TOTALLY FALSE STATEMENTS IN AN 6 EFFORT TO DECEIVE THIS COURT SIGNED BY MR. BEUGELMANS. IT 7 SAYS -- 8 MR. BEUGELMANS: YOUR HONOR -- 9 MR. LANE: I'LL CONTINUE, PLEASE. 10 THE COURT: LET HIM CONTINUE. I ALLOW PEOPLE TO BE AS 11 ELOQUENT AS THEY CAN. 12 MR. LANE: I KNOW HE DOESN'T LIKE THESE. INDEED PAGE 13 86, THE COMPLAINT: “TO DATE THE LEGION HAS RECEIVED ONLY 14 $250,000 FROM THE ASSETS, EVEN THOUGH THE ASSETS ARE 15 BELIEVED TO HAVE TOTALED MORE THAN 7.5 MILLION." 16 THAT WAS A GUESS ABOUT THE 7.5 MILLION, AND THEY 17 WERE RIGHT. BUT THE 250,000, HOW MUCH THE LEGION RECEIVED 18 WAS NOT SUBJECT TO GUESSWORK. THEY KNEW. MR. WEBER, 19 MR. MARCELLUS, THEY HAD THE RECORDS OF THE LEGION. BOOKS. 20 THEY KNEW EXACTLY HOW MUCH. WE DIDN'T KNOW. OUR RECORDS 21 ARE GONE. THE POLICE HAVE THEM AND THE LEGION HAS THEM. 22 WE DON'T HAVE — THAT IS MR. CARTO CERTAINLY -- 23 LIBERTY LOBBY. WE DON'T HAVE THE RECORDS OF EVERY PENNY; 24 BUT WHEN THE CARTOS GOT TOGETHER AND PUT IT DOWN AND PUT -- 25 PIECED THINGS TOGETHER, THEY SAID IT WAS $760,000, WHICH 26 FOLLOWED MR. Carto’s TESTIMONY THE DAY BEFORE THAT HE 27 THOUGHT IT WAS APPROXIMATELY THREE-QUARTERS OF A MILLION 28 DOLLARS.
page 891 1 THEY'RE TALKING ABOUT REBUTTAL WITNESSES WITH 2 KAYLA, THE LITTLE PIECE OF PAPER THEY FOUND. WHERE IS THE 3 REBUTTAL WITNESS FROM THE LEGION WITH MR. MARCELLUS IN THE 4 COURTROOM AND MR. WEBER IN THE COURTROOM TO GET UP AND SAY 5 IT WASN'T 760? THAT’s THE SINGLE MOST IMPORTANT ALLEGATION 6 MADE BY A WITNESS REGARDING THE CLAIMS BY THE LEGION IN 7 THEIR COMPLAINT. AND THEIR CORPORATE EXPERT IS HERE THE 8 WHOLE TIME, THEIR REPRESENTATIVE, ONE OR THE OTHER, 9 SOMETIMES BOTH, AND THEY'RE ENTITLED TO REBUTTAL, BUT THEY 10 DON'T REBUT IT BECAUSE THEY KNOW IT’s TRUE, AND THEY KNOW 11 MR. BEUGELMANS PUBLISHED A FALSE STATEMENT IN THE 12 COMPLAINT. 13 YOU CAN LAUGH NOW. I DON'T THINK IT’s FUNNY. 14 NOW WE GET TO THE CORPORATE OPPORTUNITY. WHAT 15 OPPORTUNITY WAS AVAILABLE TO A COMPANY THAT CORPORATION 16 WHICH HAS NO ASSETS IS BORROWING MONEY FROM MRS. CARTO FROM 17 HER MOTHER’s ESTATE TO MEET THE PAYROLL. THEY COULD HAVE 18 BORROWED IT FROM LIBERTY LOBBY. OH, REALLY. FIRST THEY SAY 19 THAT’s WRONG. THEN THEY SAY THE LEGION SHOULD HAVE DONE 20 IT. IT WAS WRONG FOR LIBERTY LOBBY TO DO IT, FOR MR. CARTO 21 TO DO, BUT IT WOULD HAVE BEEN RIGHT IF THE LEGION DID IT 22 SOMEHOW. MR. CARTO UNDERTOOK A GREAT PERSONAL RISK THAT 23 WHICH THE CORPORATION COULD NOT DO AND WOULD NOT DO. 24 NOW MR. MARCELLUS AND MR. WEBER CAN NOW SAY IF WE 25 WERE ON THE BOARD WE WOULD HAVE DONE IT. RIGHT. THAT'S 26 SEVEN AND A HALF MILLION DOLLARS LATER. LET’s GO BACK A FEW 27 YEARS WHEN ALL THAT WE HAVE IS A WILL, WHICH SAYS THE MONEY 28 GOES TO JOAN ALTHAUS, PERIOD, IF SHE’s ALIVE. SHE WAS ALIVE
page 892 1 AT THAT TIME. PROBABLY STILL IS. AND THEREFORE THERE WAS 2 NOTHING IN THE ESTATE, NOTHING WHICH COULD GO TO ANYONE 3 OTHER THAN TO JOAN ALTHAUS. EXCEPT FOR THE PERSEVERANCE OF 4 WILLIS CARTO AND HIS WIFE AND ALL THE LAWYERS THAT THEY GOT 5 EVERYWHERE, IF ANYONE THINKS THAT STATEMENT IS WRONG BECAUSE 6 MR. CARTO IS EXAGGERATING, LET ME TELL YOU THAT MR. CARTO 7 DOES NOT LIKE TO SPEND HUGE SUMS OF MONEY FOR LAWYERS. IF 8 HE PAID THAT AMOUNT OF MONEY, IT’s BECAUSE THAT’s WHAT WAS 9 REQUIRED TO GET THIS MATTER ARRIVED AT. I'M NOT TESTIFYING 10 NOW. I COULD TESTIFY TO THAT, YOUR HONOR. 11 THIS WAS A HOPELESS SITUATION. IT WAS HOPELESS. 12 THERE’s NOT ONE PERSON IN THIS COURTROOM NOW, NOT ONE OF US, 13 WHO IF GIVEN — NOT ME I KNOW, GIVEN THE OPPORTUNITY 14 MR. CARTO COMES TO ME, LET’s SAY, AND HE SAYS TO ME AT THAT 15 TIME: MARK, I WANT — HE DOES CALL ME BY THE FIRST NAME, 16 EVEN THOUGH I'M — I THINK I'M A YEAR OR TWO YOUNGER THAN HE 17 IS — MARK, I HAVE AN IDEA THERE IS — THIS WILL WE JUST GOT 18 WHICH SAYS WE DON'T GET ANY MONEY. THE LEGION DOESN'T GET 19 ANY MONEY. JOAN ALTHAUS IS ALIVE, BUT THERE ARE THE NECA 20 THINGS WHICH SHE SAID SHE WOULD LIKE TO ARRANGE FOR US TO 21 GET. IT’s NOT MENTIONED THERE, AND IT SAYS THE WHOLE ESTATE 22 GOES TO JOAN ALTHAUS. WOULD YOU LIKE TO LEND ME $400,000 SO 23 I CAN PURSUE THIS OR WOULD YOU LIKE TO SPEND THE NEXT SIX 24 YEARS OF YOUR LIFE AS OUR LAWYER WITHOUT MONEY AND PUT OUT 25 YOUR MONEY WHEN YOU GO TO EUROPE ON THE TRIPS? 26 I SAID: I'M REALLY COMMITTED TO SOME OTHER 27 MATTERS. I CAN'T DO THAT. THERE’s NOBODY IN THE COURTROOM 28 THAT’s — NOT A REASONABLE PERSON WHO WOULD HAVE TAKEN THAT
page 893 1 OPPORTUNITY. 2 MR. BEUGELMANS: I WILL, YOUR HONOR. 3 MR. LANE: ANYONE WILL DO IT NOW. THAT’s MY POINT. 4 AND ANYONE WILL DO IT NOW BECAUSE MIRACULOUSLY MR. CARTO WAS 5 ABLE TO GET THIS SUM OF MONEY. 6 STARTING WITH THE WILL, WHICH SAYS YOU GET 7 NOTHING, THERE WAS NO CORPORATE OPPORTUNITY WHICH THEY 8 COULD — NO REASONABLE PERSON — I'M SAYING TO YOU THAT IF 9 THE CORPORATION HAD THE MONEY, IT COULD WELL HAVE BEEN 10 CONSIDERED TO BE BAD JUDGMENT, MAYBE MALFEASANCE ON THEIR 11 PART, IF THEY SPENT 5, 6, $700,000 TO ACQUIRE THIS. THAT 12 WOULD HAVE LIKELY TO BE CONSIDERED BAD JUDGMENT IF THEY 13 RECOVERED NOTHING; BUT THEY DIDN'T HAVE THAT OPPORTUNITY TO 14 THINK ABOUT IT. THEY DIDN'T HAVE A NICKEL. THEY DIDN'T 15 HAVE A NICKEL. 16 ANYONE CAN SAY NOW WE KNOW IN HINDSIGHT HOW 17 EFFECTIVE THAT IS, BUT LET’s START BACK THERE AND LOOK 18 FORWARD AND INSTEAD OF THIS POINT AND LOOK BACKWARD. NO ONE 19 WOULD HAVE TAKEN THAT OPPORTUNITY. AND EVEN IF THE LEGION 20 WANTED TO, THEY COULDN'T. THEY DIDN'T HAVE A NICKEL. 21 COULDN'T PAY THEIR OWN LAWYER WHEN THEY WERE BEING SUED. 22 NOW THEY'RE GOING TO SUE THE REST OF THE WORLD IN 23 SWITZERLAND. 24 COULDN'T PAY THE CALIFORNIA LAWYER WHEN THEY WERE 25 BEING SUED. I AM SPEAKING FOR LIBERTY LOBBY. BUT IF THE 26 FURRS DID NOTHING WRONG, NOBODY DID ANYTHING WRONG. 27 EVERYTHING IS DERIVATIVE FROM THE FURRS. IF THEY DID 28 NOTHING WRONG, NOBODY DID ANYTHING WRONG.
page 894 1 I KNOW MR. BEUGELMANS IS NOT FAMILIAR WITH SECTION 2 5047.5. I TALKED ABOUT IT A COUPLE OF DAYS AGO. BUT IT HAS 3 GREAT APPLICATION HERE. IT IS THE STANDARD WHICH THE COURT 4 MUST CONSIDER IN THIS CASE. I KNOW HE’s NOT FAMILIAR WITH 5 IT. WHEN THE QUESTION WAS ASKED TODAY ABOUT WHETHER OR NOT 6 THERE HAD BEEN A GENERAL INSURANCE POLICY, LIABILITY 7 POLICY. HE SAID IT WAS IRRELEVANT. IT’s THE HEART OF THE 8 STATUTE. 9 STATUTE DOESN'T COME INTO PLAY UNLESS THERE IS 10 GENERAL LIABILITY INSURANCE THAT AMOUNTED TO A MILLION 11 DOLLARS. HE SAYS THAT’s IRRELEVANT WHY THEY DIDN'T ASK THE 12 QUESTION, BUT THERE WAS THE TESTIMONY THAT THERE WAS — IF 13 THERE WASN'T, I WAS GOING TO SAY SO. THE COURT — WE WILL 14 NOT DISREGARD THE ARGUMENT I MADE EARLIER UNTIL IT WAS 15 DETERMINED THE TESTIMONY OF MISS CARTO THAT THERE WAS IN 16 FACT THAT. THIS IS WHAT THE STATUTE SAYS. THIS IS THE 17 STANDARD THE COURT MUST APPLY WHEN CONSIDERING THE FURRS, 18 AND WHEN YOU CONSIDER THE FURRS, YOU HAVE TO CONSIDER 19 EVERYBODY. IF THEY DID NOTHING WRONG, NOBODY DID ANYTHING 20 WRONG. 21 THIS IS THE SECTION. “IT IS THE PUBLIC POLICY OF 22 THE STATE OF CALIFORNIA TO PROVIDE INCENTIVE AND PROTECTION 23 TO INDIVIDUALS WHO PERFORM THESE IMPORTANT FUNCTIONS." 24 MAKING REFERENCE TO NONPAID DIRECTORS OF NONPROFIT 25 CORPORATIONS. SPECIAL SECTION JUST ON THAT. 26 “EXCEPT AS PROVIDED IN THIS SECTION, NO CAUSE OF 27 ACTION FOR MONETARY DAMAGES SHALL ARISE AGAINST ANY PERSON 28 SERVING WITHOUT COMPENSATION AS A DIRECTOR OR OFFICER OF A
page 895 1 NONPROFIT CORPORATION,” AND GOES ON WITH SOME LANGUAGE. 2 THEN IT STATES: “THIS THAT ON ACT OF” — WITHDRAW 3 THAT. GO BACK. 4 “SERVING WITHOUT COMPENSATION AS A DIRECTOR OR 5 OFFICER OF A NONPROFIT CORPORATION SUBJECT TO PART 2 6 (COMMENCING WITH SECTION 5110), PART 3, (COMMENCING WITH 7 SECTION 7110), OR PART 4, (COMMENCING WITH SECTION 9110.)" 8 SO WE DON'T HAVE ANYTHING LEFT OUT OF THIS: “ON 9 ACCOUNT OF ANY NEGLIGENT ACT OR OMISSION OCCURRING WITHIN 10 THE SCOPE OF THAT PERSON’s DUTIES AS A DIRECTOR ACTING AS A 11 BOARD MEMBER, OR WITHIN THE SCOPE OF THAT PERSON’s DUTIES AS 12 AN OFFICER ACTING IN AN OFFICIAL CAPACITY; IN GOOD FAITH; IN 13 A MANNER THAT THE PERSON BELIEVES TO BE IN THE BEST INTEREST 14 OF THE CORPORATION; AND IS IN THE EXERCISE OF HIS OR HER 15 POLICYMAKING JUDGMENT.” BOTH THAT APPLIES. 16 IN OTHER WORDS IF THAT APPLIES, YOU MAY NOT SUE 17 THEM. IT’s NOT A STANDARD ABOUT HOW DO YOU JUDGE IT. IT 18 SAYS YOU CAN'T BRING AN ACTION AGAINST THEM AND I THINK ALL 19 THIS CLEARLY APPLIES. 20 NOW THERE IS SOME EXCEPTIONS, AND THAT IS IF 21 THERE’s A CONFLICT INVOLVED FOR THEMSELVES AND INVOLVED 22 THEMSELVES IN DEALING OR THERE’s ANOTHER EXCEPTION FOR A 23 CHARITABLE TRUST, WHICH DOESN'T APPLY HERE. 24 THE COURT: MR. LANE, WHAT ABOUT THE BOARD? SUPPOSING 25 THEY DON'T HAVE ENOUGH INFORMATION, AND THEY AREN'T GIVEN 26 THAT INFORMATION BY THE AGENT TO KNOW WHETHER THEY SHOULD OR 27 SHOULDN'T SEE IF THERE’s AN OPPORTUNITY? 28 MR. LANE: THAT’s AN ACT OF OMISSION, AND YOU MAY NOT
page 896 1 SUE THEM. 2 THE COURT: AN ACT OF OMISSION BY THE BOARD? THEY 3 DON'T KNOW. 4 MR. LANE: THEY'RE THE BOARD MEMBERS. 5 THE COURT: BEAR WITH ME A SECOND. HERE IS THE WAY I'M 6 LOOKING AT IT. YOU HAVE A 16 MILLION DOLLAR ESTATE. 45 7 PERCENT OF THAT IS 7.2 MILLION. THEN TAKE 208, WHICH WAS 8 GIVEN TO US TODAY, AND EVEN IF YOU PUT IN THE EXPEDITOR AND 9 ADD UP THE EXPENSES, THAT ADDS ABOUT THREE MILLION DOLLARS 10 LEAVING ABOUT FIVE AND A HALF MILLION; IS THAT RIGHT? FOUR 11 AND A HALF MILLION DOLLARS TO -- 12 MR. LANE: MY FATHER WAS AN ACCOUNTANT. 13 THE COURT: FOUR AND A HALF MILLION DOLLARS. AFTER 14 THEY SETTLED THE ESTATE AND PAID THE LAWYERS AND PAID THE 15 EXPEDITOR, THEY STILL HAVE FOUR AND A HALF MILLION DOLLARS. 16 ISN'T SOMEBODY OBLIGATED, IF YOU ARE AN AGENT FOR 17 THE BOARD, TO SAY: LOOK, WE HAVE THIS MONEY. AND THEN TO 18 WORK BACKWARDS. ISN'T AN AGENT OBLIGATED WAY BACK IN THE 19 BEGINNING TO SAY WE HAVE A CORPORATE OPPORTUNITY HERE? IT'S 20 45 PERCENT OF 16 MILLION OR 4.2 MILLION DOLLARS. IT WILL 21 COST US MILLIONS TO DO THIS. SHOULDN'T WE PUT THIS OUT AND 22 TRY TO SEE IF WE CAN GENERATE FUNDS? IF YOU CAN'T, YOU HAVE 23 NO CORPORATE OPPORTUNITY. 24 HOW DO YOU KNOW IF YOU HAVE A CORPORATE 25 OPPORTUNITY TO GET THE INFORMATION ABOUT IT AND TRY TO 26 EXHAUST YOUR VARIOUS WAYS OF GETTING MONEY INCLUDING, AS 27 POINTED OUT, BORROWING MONEY FROM LIBERTY LOBBY MAYBE AT A 28 HIGH RATE OF INTEREST AND A CERTAIN BONUS IF YOU RECOVER,
page 897 1 BUT DO SOMETHING. 2 MR. LANE: TWO QUESTIONS THERE. NUMBER ONE, I DON'T 3 THINK THERE WAS A LOT OF TIME TO ACT. YOU ARE TALKING ABOUT 4 RAISING FUNDS, AND THEY HAVE BEEN INVOLVED IN FUND RAISING 5 ACTIVITIES. I KNOW ABOUT IT. IT SEEMS A YEAR SOMETIMES TO 6 GENERATE TO GET MONEY. BUT THIS ESTATE WOULD HAVE BEEN 7 SETTLED UNLESS SOMEONE DID SOMETHING IMMEDIATELY. THEY 8 HEARD ABOUT IT AND FLEW OVERSEAS. THAT’s THE FIRST. 9 SECONDLY, LET’s SAY, GOING BACK TO THE FURRS -- 10 I'M TRYING TO DEAL WITH YOUR QUESTION. MR. AND MRS. FURR, 11 LET’s SAY, THAT THEY, FIRST OF ALL, THERE WAS — THE MONEY 12 WAS NOT AVAILABLE, AND I THINK IT WAS NOT A GOOD RISK, AND I 13 DON'T THINK THEY SHOULD HAVE DONE IT. WE CAN'T USE THAT 14 JUDGMENT FOR THEM IF THEY ACTED. I MEAN, THEY GOT 15 THREE-QUARTERS OF A MILLION DOLLARS FOR THE LEGION. 16 $760,000 FOR THE LEGION. THEY WOULD HAVE GOT NOTHING IF IT 17 WASN'T FOR WILLIS CARTO. 18 IT’s INTERESTING. YOU ARE TALKING ABOUT THE 19 FIGURE NOW. NOBODY — NOBODY KNEW WHAT NECA CERTIFICATES 20 WERE WORTH. THEY COULD HAVE BEEN WORTH $100,000 ALL 21 TOGETHER. NOBODY KNEW UNTIL THE VERY END WHEN THEY FOUND A 22 DIAMOND HERE AND DID VARIOUS OTHER THINGS WHAT THIS WAS 23 WORTH. NO ONE HAD THE FAINTEST IDEA IT WOULD BE HALF A 24 MILLION DOLLARS OR A HUNDRED THOUSAND DOLLARS. NOBODY WAS 25 GOING TO PUT OUT 6 OR $700,000 WITHOUT THE FAINTEST IDEA. 26 I UNDERSTAND THE PREMISE YOU HAVE MAYBE THE 6 27 MILLION DOLLARS AND MAYBE 7 WE'LL HAVE TO PAY, BUT NOBODY 28 KNEW THAT THEN IN 1985. HOW DO YOU RAISE MONEY? SAY WE
page 898 1 NEED $500,000 TO PURSUE A CLAIM, AND WE DON'T KNOW WHAT'S 2 REALLY IN THE NECA CERTIFICATE OR WHAT IT WILL BE WORTH. 3 MORE THAN THAT, LET’s SAY THE FURRS SHOULD HAVE DONE THAT. 4 YOU ARE SAYING MAYBE THEY SHOULD HAVE DONE THAT. THIS IS 5 WHAT THE SECTION SAYS. 6 THE COURT: NOT THE FURRS, THE AGENT. SHOULDN'T THE 7 AGENT HAVE TOLD THEM? EVEN IN THE STATE OF NORTH CAROLINA 8 WHEN THEY FILED THE COMPLAINT THAT WAS IN '87 HE THOUGHT IT 9 WAS WORTH 16 MILLION SO — YEAH, RIGHT. 10 MR. LANE: WHAT YEAR? 11 THE COURT: I THINK '87. 12 MR. BEUGELMANS: '86. THE COMPLAINT WAS FILED IN '86. 13 THE VERY BOTTOM YOU SEE THE DATE STAMPED. AND IT’s REPEATED 14 IN '87, THE RESPONSES. 15 MR. LANE: IF IT WAS WORTH — NO MATTER WHAT IT WAS -- 16 MIGHT HAVE BEEN WORTH, IT WAS AT BEST A VERY RISKY VENTURE. 17 AND THE OBLIGATION BY THE FURRS — I'M TALKING ABOUT THE 18 FURRS. YOU ARE TALKING ABOUT MR. CARTO. 19 THE COURT: I'M TALKING ABOUT THE FURRS CAN ONLY ACT, 20 AS I SEE THE EVIDENCE, BASED UPON WHAT MR. FURR TELLS THEM. 21 THEY HAVE NO INDEPENDENT — MR. CARTO TELLS THEM. THEY HAVE 22 NO INDEPENDENT SOURCE OF INFORMATION. 23 MR. LANE: THEN THEY OMITTED TO DO SOMETHING I THINK 24 THE COURT IS SAYING? 25 THE COURT: RIGHT. WHY DID THEY OMIT? 26 MR. LANE: THEN THEY'RE NOT RESPONSIBLE IF THEY 27 OMITTED. THAT’s MY POINT, YOUR HONOR. THAT IF THEY OMITTED 28 TO DO THIS, ACTED IN GOOD FAITH BUT OMITTED IT, I THINK THE
page 899 1 COURT IS SAYING MAYBE THEY SHOULDN'T, OR I THINK THE COURT 2 IS SAYING NOT MAYBE THEY HAVE — SHOULD NOT HAVE RELIED ON 3 MR. CARTO AS THE SOLE SOURCE. 4 MR. BEUGELMANS: I HATE TO INTERRUPT. 5 MR. LANE: PLEASE SIT DOWN. 6 MR. BEUGELMANS: THE FURRS ARE DEFAULTED IN THE ACTION. 7 MR. LANE: THAT HAS NOTHING TO DO WITH ANY ISSUE HERE. 8 THE QUESTION IS THE DIRECTORS. MAYBE THEY, THE DIRECTORS, 9 NOT MR. CARTO. HE WASN'T THE DIRECTOR. HE IS TAKING 10 LEADERSHIP FROM THEM NO MATTER HOW THE INFORMATION IS 11 REACHING THEM. 12 I MEAN, WE HAD A PRESIDENT USED TO HAVE AN 13 ASTROLOGER TELL HIM WHAT TO DO, HIS ACTION. HE SIGNS THE 14 DOCUMENT. WHAT THE PRESIDENT SIGNS, THAT’s THE LAW. HE 15 SIGNS IT. IF IT’s PASSED SOME PLACE BEFORE THEN, IT’s NOT 16 HOW THEY GOT THE INFORMATION, I THINK. AND WHEN THIS 17 DECISION WAS MADE BY THE FURRS, WILLIS CARTO WAS NOT AN 18 AGENT OF THE CORPORATION. THAT HAPPENED IN 1986. SOMETHING 19 HAD TO BE DONE LONG BEFORE THEN. AND ALL ONE CAN SAY IS 20 THAT PERHAPS THE FURRS OMITTED TO DO SOMETHING THEY SHOULD 21 HAVE DONE. IF SO, IF THAT IS SO, THE ARGUMENT THAT IS TO 22 SECTION 5047.5 OF THE CORPORATIONS CODE SAYS THAT THERE CAN 23 BE NO CAUSE OF ACTION AGAINST THEM FOR MONETARY DAMAGES IF 24 IT’s AN ACT OR OMISSION, NEGLIGENCE, BUT IT’s WITHIN THEIR 25 SCOPE AND THEY DIDN'T DO IT FOR THEMSELVES, AND THEY DID IT 26 IN GOOD FAITH. I DON'T THINK THERE’s ANY INDICATION THEY 27 DIDN'T ACT IN GOOD FAITH. THEY MAY HAVE ACTED BY OMITTING 28 TO GET INFORMATION BEFORE THEY ACTED. BUT IF SO, THEY
page 900 1 CANNOT BE SUED. THAT’s WHAT THE STATUTE SAYS AND STATUTE IS 2 BASED UPON THE FACT THAT THEY -- 3 THE COURT: POOR MR. LANE, HAVE ME ASKING 4 MORE QUESTIONS, AND MR. WAIER TELLING YOU WHAT TO DO AND 5 MR. CARTO. 6 MR. LANE: I'M AWAY FROM MR. CARTO THE BEST PART OF THE 7 DAY. 8 THE COURT: GO AHEAD. 9 MR. LANE: MR. CARTO IS ONE OF MY BEST FRIENDS. I ONLY 10 SAY THAT BECAUSE I HAVE KNOWN HIM A LONG, LONG TIME. I HAVE 11 GREAT RESPECT FOR HIM. 12 ASSUMING THAT, YOU KNOW, THIS IS A SUBSTANTIAL 13 AMOUNT OF MONEY, YOUR HONOR, KIND OF LIKE THE LOTTERY. 14 THERE’s 32 MILLION DOLLARS IS DECIDED, AND IT DOESN'T MEAN 15 YOU HAVE A GREAT CHANCE OF GETTING IT JUST BECAUSE IT’s A 16 LARGE SUM OUT THERE. AND LOOKING AT THIS CASE FROM THE 17 PERSPECTIVE THAT THE LEGION HAD TO LOOK AT IT FROM, THE 18 BOARD MEMBERS IN 1985, THERE WAS A WILL WHICH SAID THEY GET 19 NOTHING. THERE WAS SOME PEOPLE WHO WERE NOT AGENTS OF THE 20 LEGION — MR. CARTO PRIMARILY WHO HAD BEEN TALKING TO JEAN 21 FARREL. HE WAS NOT AN AGENT. WHEN HE GAVE THE INFORMATION 22 TO THE FURRS, HE WAS NOT AN AGENT. AND HE AND THE LEGION 23 HAD NO OPPORTUNITY TO TAKE ADVANTAGE OF THE OPPORTUNITY. 24 AND I THINK IF THEY DID HAVE THE MONEY THEY COULDN'T 25 ANYWAY. 26 THERE’s ANOTHER ISSUE I WOULD LIKE UNLESS THE 27 COURT HAS MORE QUESTIONS. 28 THE COURT: NO. GO AHEAD.
page 901 1 MR. LANE: I FOUND AN INTERESTING CITATION BY 2 MR. BEUGELMANS OF THE EVIDENCE CODE OF 623, WHICH IS 3 INTERESTING, AND IT’s — I DON'T KNOW IF IT APPLIES 4 ELSEWHERE. WHERE I PRACTICE LAW I DON'T RECALL SEEING 5 THIS. IT’s INTERESTING ABOUT WHEN A PARTY LEADS ANOTHER 6 PARTY TO BELIEVE ONE THING IS TRUE AND TO ACT UPON THE 7 BELIEF IN ANY LITIGATION, HE’s NOT PERMITTED TO CONTRADICT 8 IT. 9 TAKE A LOOK AT MR. WEBER’s TESTIMONY. MR. WEBER 10 IS AN OFFICER, HIGH-RANKING OFFICER, OF THE LEGION. 11 MR. WEBER IS THE CORPORATE REPRESENTATIVE OF THE LEGION IN 12 THIS COURTROOM. AND WHAT DID HE SAY DURING THE DEPOSITION? 13 DURING THE DEPOSITION — LET’s SEE IF WE CAN APPLY EVIDENCE 14 CODE SECTION 623 TO HIS STATEMENT. 15 MR. WEBER TESTIFIED THAT NONE OF US ARE 16 QUESTIONING MR. Carto’s RIGHT TO GET THE MONEY, TO BE AN 17 AGENT AND GET THE MONEY. NO ONE IS QUESTIONING THE PAYMENTS 18 THAT HE MADE, THE PAYROLLS AND ALL THAT, THE LAWYERS. NO 19 ONE IS QUESTIONING THAT. 20 AND THEN THERE WAS A QUESTION BY MR. WAIER — I 21 THINK IT WAS MR. URTNOWSKI. I FORGOT WHO DID THE 22 QUESTIONING, AND MR. MUSSELMAN GOT UP AND SAYS: THAT NOT IN 23 CONTENTION. 24 AND THEN MR. WEBER WENT ON TO SAY: WE'RE NOT 25 NECESSARILY EVEN QUESTIONING THE DISTRIBUTION OF THE FUNDS 26 BEFORE SEPTEMBER 1963. WHAT WE'RE TALKING ABOUT IS SINCE 27 THAT TIME — THAT’s HIS SWORN STATEMENT — THE 28 REPRESENTATIVE OF THE CORPORATION.
page 902 1 AND THEN HE WROTE A LETTER TO ANDREW GRAY, WHO IS 2 ONE OF THE CLERKS AROUND THE MOVEMENT, WHICH HE SAID 3 BASICALLY THE SAME THING, WENT EVEN FURTHER, AND HE SAID: 4 THE ONLY QUESTION HERE — AND HE KNEW MR. GRAY WAS GOING TO 5 CONTRACT WITH MR. CARTO — THE ONLY QUESTION HERE IS DID 6 WILLIS CARTO KEEP THE MONEY OR DID HE DISTRIBUTE IT IN 7 ESSENCE THE WAY JEAN FARREL WANTED TO DISTRIBUTE IT FOR 8 PUBLIC PURPOSES; THESE PUBLIC PURPOSES WE BELIEVE IN? 9 I ASKED MR. WEBER — IT’s A LONG LETTER AFTER THAT 10 OR BEFORE THAT: DID YOU EVER SAY IT SHOULD HAVE GONE TO THE 11 LEGION? DID YOU EVER EACH MENTION THAT OR JUST TALK ABOUT 12 THESE GROUPS, THESE PUBLIC GROUPS THAT SHOULD GET IT? 13 WELL, THAT WAS — THAT APPARENTLY IS THE LEGION'S 14 POSITION. MR. CARTO HAD THE ABSOLUTE RIGHT — I MEAN, THE 15 CURRENT PEOPLE CALL THEMSELVES THE LEGION. WHERE ARE THE 16 LEGION, THE PRESENT BOARD THAT’s BRINGING THIS ACTION? 17 THEIR CORPORATE REPRESENTATIVE SAID IT. WE DON'T CHALLENGE 18 ANYTHING HE DID UNTIL SEPTEMBER 1993 — UNTIL SEPTEMBER 19 1994, EXCUSE ME. 20 WE'RE TALKING ABOUT — HE WENT ON TO SAY: WHAT'S 21 HE GOT NOW? WE WANT TO GET WHAT HE HAS GOT NOW. THAT WAS 22 THEIR POSITION THEN. 23 THE COURT: I DON'T WANT TO GO BEYOND FIVE. 24 25 (PROCEEDINGS RECESSED.) 26 27 THE COURT: BACK ON THE RECORD. 28 MR. LANE: THANK YOU, YOUR HONOR. WILLIS CARTO WENT
page 903 1 INTO AN AGREEMENT WITH THE BOARD. 2 FIRST OF ALL, LET ME GO BACK TO THE EARLIER TIME, 3 1966. IT’s BEEN SAID YOU CANNOT PURCHASE A NONPROFIT 4 ORGANIZATION. OF COURSE YOU CAN. YOU CAN. JUST THERE’s A 5 CAPITALIST SOCIETY LETS YOU PURCHASE ANYTHING. YOU CANNOT 6 MAINTAIN IT AS A NONPROFIT ORGANIZATION ONCE YOU BUY IT. IF 7 YOU OWN IT, IF YOU CONTROL IT, YOU CAN'T CONTINUE TO SAY, 8 AND THEY DID. MAYBE SOMEBODY SHOULD LOOK INTO THAT. THE 9 STATUTE — THE STATUTE OF LIMITATIONS PASSED IN THE LAST 30 10 YEARS. YOU CAN BUY IT. YOU CAN PAY FOR IT AND HAVE 11 CONTROL, AND THEN IT COMES TO WHATEVER IT IS. IT'S 12 SOMETHING THAT YOU BOUGHT AND CONTROLLED AND MAYBE YOU OUGHT 13 TO DROP — MAYBE SHOULDN'T CALL IT A CORPORATION. MAYBE YOU 14 SHOULDN'T TRY TO GET TAX EXEMPT STATUS, BUT YOU CAN OWN IT, 15 AND HE BOUGHT IT AND CONTROLLED IT. THAT’s WHAT THEY DID. 16 OR IF THAT’s NOT WHAT HAPPENED, THEN HE DIDN'T CONTROL IT, 17 AND IT WAS A REAL NONPROFIT ORGANIZATION, AND TWO PEOPLE 18 WERE ON THE BOARD FOR 30 YEARS UNTIL THEY WERE THREATENED. 19 OH, YEAH, LET’s TALK ABOUT THAT FOR JUST A MOMENT, 20 THE THREATS. THIS WAS A CIVIL LITTLE ORGANIZATION OF 21 SCHOLARS WHO HELD CONFERENCES OF PEOPLE FROM ALL AROUND THE 22 WORLD ON A SUBJECT WHICH DOES NOT INTEREST ME VERY MUCH BUT 23 INTERESTS SOME PEOPLE, AND THEY UNCOVERED SOME INTERESTING 24 INFORMATION. I LOOKED INTO THAT WHEN I WAS TRYING THE 25 MERMELSTEIN CASE BEFORE JUDGE LACKS. WE LEARNED A GREAT 26 DEAL ABOUT SOME OF THE IMPORTANT WORK DONE BY THE GROUP. 27 AND THAT’s WHAT IT WAS, A LITTLE GROUP OF PEOPLE DOING THAT 28 CIVILLY WITH EACH OTHER.
page 904 1 THEN ALL OF A SUDDEN WE HAVE MARCELLUS AND WEBER, 2 THE EMPLOYEES WITH HULSY, AND THEY DECIDE WE'LL GRAB THIS 3 THING. IT’s GOT MONEY NOW. IT’s WORTH SOMETHING, SO WE'LL 4 GRAB IT. 5 AND SO THEY GO TO THE FURRS. THEY DESCRIBE THEM 6 AS AN ELDERLY, RETIRED COUPLE. YOU HEARD THE LANGUAGE, YOUR 7 HONOR. THE A.D.L. WILL GET YOU. YOUR LEGACIES WILL BE 8 ATTACKED. YOUR TAXES. WELL, THESE ARE THE BUZZ WORDS OF 9 OBVIOUSLY IN A CERTAIN AREA YOU TELL PEOPLE ABOUT THEIR 10 LEGACIES AND ABOUT THE TAXES. YOU MIGHT AS WELL SAY THEY'RE 11 GOING TO TAKE YOU OUT AND SHOOT YOU TOMORROW MORNING. THEY 12 KNOW EXACTLY WHAT THEY'RE SAYING TO THESE PEOPLE. THEY 13 TERRORIZE THEM. THESE ARE THE MEANS THAT THEY CHOSE WITH 14 THEIR LAWYER — NOT THESE LAWYERS, WITH ANOTHER LAWYER, 15 MR. HULSY, WHO IS ALSO REPRESENTING MR. CARTO AND THE LEGION 16 AT THE SAME TIME THAT HE WAS LEADING WHAT HE THEN PUBLICLY 17 DESCRIBED AS A COUP D'ETAT AGAINST THE LEADERSHIP, AND HE 18 SAID — IT CERTAINLY COULD BE SAID IT WAS, QUOTE, “TERRIBLY 19 DISLOYAL FOR PEOPLE WHO HAD BEEN HIRED BY MR. CARTO AND PAID 20 ALL THE YEARS." 21 THAT’s THE WAY IT GOES. THAT’s — THEY USE THESE 22 MEANS TO FRIGHTEN THE PEOPLE INTO GETTING OUT OF THE 23 ORGANIZATION, THE TINY CORPORATION BECAUSE IT HAD MONEY. 24 EVERYTHING WAS FINE UNTIL THEN. AND BUT BEFORE 25 SOME TIME BEFORE THEY LEFT THE FURRS ENTERED INTO AN 26 AGREEMENT WITH WILLIS CARTO AND SAID: DO NOT PUT THE MONEY 27 IN THE CORPORATION. THAT WAS THE SAME THING BASICALLY THEY 28 SAID EARLIER IN A CONTRACT WITH HIM. NOW THEY HAVE A
page 905 1 RESOLUTION. DON'T PUT THE MONEY IN THE CORPORATION. WHAT 2 YOU SHOULD USE IT FOR THE GOOD PURPOSES. 3 THE CORPORATION IS THE LEGION. I DON'T BELIEVE 4 THE LEGION HAS ANY STANDING TO BRING THE ACTION. I THINK IF 5 MR. CARTO PUT THE MONEY IN HIS POCKET I'M NOT SURE THE 6 LEGION WOULD HAVE ANY STANDING BECAUSE I THINK WHATEVER THE 7 ORGANIZATIONS WERE THAT WERE SUPPOSED TO GET IT OTHER THAN 8 THE LEGION MAYBE THEY WOULD HAVE STANDING TO BRING AN ACTION 9 BECAUSE MR. CARTO DIDN'T GIVE THEM THE MONEY, BUT HE WASN'T 10 SUPPOSED TO GIVE IT TO THE LEGION. THAT’s WHAT THE BOARD OF 11 DIRECTORS SAID IN THEIR MINUTES. AND THERE WERE TWO SETS OF 12 MINUTES. ONE WAS A SUMMATION. ONE WAS A LONGER ONE. THEY 13 ARE BOTH IN EVIDENCE. THE COURT WILL READ THEM, I'M SURE, 14 AND I'M SURE THE COURT WILL FIND OUT. 15 SO MR. CARTO DID WHAT THEY SAID HE WOULD DO. HE 16 DID WHAT HE SAID HE WOULD TRY TO DO. HE RAISED A LOT OF 17 MONEY. GOD KNOWS HE SPENT A LOT OF MONEY ON LAWYERS OVER 18 THERE, AND HE ENDED UP WITH THE MIRACLE OF ACHIEVING 19 SUBSTANTIAL AMOUNTS OF MONEY AFTER SEVERAL YEARS OF 20 TENACIOUS WORK AND GREAT EXPENSE AND GREAT TIME AND EFFORT 21 AND WEAR AND TEAR ON HIMSELF, HIS WIFE, AND THE OTHER PEOPLE 22 INVOLVED IN IT, AND HE GAVE $760,000 TO THE LEGION, EVEN 23 THOUGH THE ONLY BREACH OF THE AGREEMENT THAT I CAN FIND IS 24 THAT HE WASN'T SUPPOSED TO GIVE IT TO THE LEGION, AND HE 25 GAVE IT TO THEM. 26 HE SAID: “DON'T PUT IT IN THE CORPORATION.” HE 27 GAVE IT TO THEM ANYWAY, THOUGH THEY GOT IT. THEY HAVEN'T 28 CONTESTED THAT. THEY DIDN'T QUESTION HIM ABOUT IT.
page 906 1 YOU SAY 760. HOW DID THAT COME? HOW CAN YOU 2 PROVE IT? THEY DIDN'T ASK THAT BECAUSE THEY KNEW THE ANSWER 3 ALL ALONG. YOU HAVE THE 760. THEN THEY WERE WILLING TO 4 TAKE IT, AND THEN THEY LIED ABOUT IT IN THE COMPLAINT, 5 UNVERIFIED COMPLAINT. 6 IF WILLIS CARTO AND ELISABETH CARTO HAD NOT 7 SECURED PERMISSION FROM THE BOARD FROM LAVONNE FURR, IF THEY 8 HAD NOT ACTED ON THAT RESOLUTION, WHICH TENDS TO CONFIRM THE 9 RESOLUTION THEIR ACTION BASED UPON IT, IF THEY HAD NOT DONE 10 THAT THE LEGION WOULD NOT HAVE GOTTEN $760,000. THEY WOULD 11 HAVE GOTTEN NOTHING. I THINK THAT IS THE HEART OF WHAT IT 12 MEANS WHEN YOU TALK ABOUT CORPORATE OPPORTUNITY. 13 ONE OR TWO POINTS, YOUR HONOR. WE HEARD THAT 14 WILLIS CARTO ORDERED $100,000 FROM VIBET. THAT IS A FALSE 15 STATEMENT MADE BY MR. BEUGELMANS IN CLOSING. THERE’s NO 16 TESTIMONY THAT THE MONEY CAME FROM VIBET, AND IN FACT IT 17 DIDN'T COME FROM VIBET. IT CAME FROM THE OTHER 18 CORPORATION. DIDN'T ASK ABOUT IT ON — IN THE MANY 19 CROSS-EXAMINATIONS, DIRECT EXAMINATIONS. AND IN THE EFFORT 20 TO REBUT MR. CARTO BY QUESTIONING HIM AND REBUTTING HIMSELF, 21 WHATEVER, THEY NEVER DID RAISE THAT QUESTION. THE MONEY 22 NEVER CAME. THEY NEVER PROVED IT CAME FROM VIBET, AND IT 23 DID NOT COME FROM VIBET. THEY SAY HE KEEPS GETTING MONEY 24 FROM VIBET, BUT IT DIDN'T COME FROM VIBET. HE DIDN'T ORDER 25 IT. 26 THE IRONY OF ALL OF THIS I SUPPOSE IS THAT ALL 27 THAT WILL BE LEFT OF THE MEMORY OF JEAN EDISON-FARREL OR 28 FARREL-EDISON, A WOMAN I NEVER MET OR HEARD OF BEFORE THIS
page 907 1 BEGAN, WILL BE THE BATTLE OVER HER ESTATE AND WILLIS — NOT 2 FOR WILLIS CARTO AND NOT FOR ELISABETH CARTO WHO SPENT A 3 GREAT DEAL OF TIME WITH HER, TALKED WITH HER, AND ALL WE 4 HAVE FROM THE PLAINTIFFS IN THIS CASE — PLAINTIFFS IN THIS 5 CASE IS THE LAST QUESTION ASKED BY MR. BEUGELMANS. THIS IS 6 AFTER THE REFERENCE TO ADOLPH HITLER, THE LAST QUESTION HE 7 ASKED OF MRS. CARTO. HE SAID: “DIDN'T SHE WRITE IN HERE WE 8 HAVE TO KEEP THE MONEY FROM GOING TO THE JEWS?” THAT WAS 9 MR. BEUGELMANS. OF ALL THE THINGS AND ALL OF THOSE LETTERS, 10 THAT’s WHAT MR. BEUGELMANS WANTED TO PULL OUT AS HIS 11 TESTAMENT TO THE MEMORY OF THIS WOMAN WHOSE FUNDS HE'S 12 TRYING TO ILLEGALLY AND IMPROPERLY GOBBLE UP. 13 HE TALKS ABOUT INDECENCY AND DECEIT. I THINK HE 14 PERSONIFIES IT IN TERMS OF THAT KIND OF ACTION. I CAN TELL 15 YOU I TRIED CASES ALL AROUND THE COUNTRY IN THE 40'S. I WAS 16 A FREEDOM FIGHTER IN JACKSON, MISSISSIPPI, AND I WAS A 17 MEMBER OF THE STATE LEGISLATURE. I TRIED CASES IN MOST OF 18 THE STATES OF THIS COUNTRY. I NEVER BEEN IN A CASE WHERE I 19 HAVE BEEN ATTACKED BECAUSE OF MY RELIGION EVER BEFORE, AND I 20 HOPE IT WILL NEVER HAPPEN AGAIN. THANK YOU, YOUR HONOR. 21 THE COURT: ALL RIGHT. I NEVER TOOK THAT AS AN ATTACK 22 UPON YOU PERSONALLY, ALTHOUGH I HAVE TO ADMIT THE HITLER 23 REMARK WAS MOST INAPPROPRIATE, AND THE OTHER REMARK I THINK 24 WASN'T NEEDED. IT MAY HAVE -- 25 MR. LANE: I'M TALKING ABOUT PUBLISHED AROUND THE 26 COUNTRY, ME BEING MR. Carto’s EASTERN JEWISH LAWYER. THAT 27 ONE, YOUR HONOR. 28 THE COURT: ALL RIGHT. WE ARE NOW AT A QUARTER TO 5.
page 908 1 HOW DO YOU WANT TO HANDLE THIS? 2 MR. WAIER: I HAVE ABOUT ONE HOUR’s WORTH OF 3 SUMMATION. 4 THE COURT: I FIGURE YOU DID. 5 MR. WAIER: I HAVE TO GO OVER LAW, INCLUDING THE 6 ELEMENTS. 7 THE COURT: GO OFF THE RECORD. 8 9 (OFF-THE-RECORD DISCUSSION.) 10 11 THE COURT: SEE YOU AT 9. WE DID OUR BEST. 12 13 (PROCEEDINGS RECESSED.) 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28