DOT/FAA Denies Wrongdoing in the case of whistleblower Captain Dan Hanley - National Public Spokesperson for the Whistleblowing Airline Employees Association

The Office of the Department of Transportation Inspector General Calvin Scovel III just sent federal airline whisleblower Captain Dan Hanley, National Public Spokesperson for the Whistleblowing Airline Employees Association, a letter denying FAA wrongdoing regarding issues addressed in the affidavit below, which was also included as part of the FAA Whistleblower report submitted by him last year.

The DOT IG considers this case closed and deferred him to the Department of Labor. This affidavit is also part of public congressional record submitted as testimony associated with Senator Dorgan's congressional hearing on the Colgar Air 3407 disaster, which occurred in in Buffalo, New York last February. The issued addressed by Captain Hanley as early as 2003 were identified as contributory causes of the Colgan Air crash, which were ignored in 2003 by the FAA. He was medically grounded as an airline pilot for life as a result of federal reports submission.

The full letter and Captain Hanley's certified letter response will be posted on the 'Whistleblowing Airline Employees Association' website at http://wwww.airline-whistleblowers.org in the near future and the topic discussed on an upcoming Whistleblowing Airline Employees Blog Talk Radio Program to be announced shortly.

Once posted on this site, it is respectfully requested that each member of this cause kindly employ the 'Share' function on your facebook and the website page to ensure global disemmination of this information on the internet. Please assist Captain Hanley and the many members of the grassroots association protect YOU...the millions who travel by commercial air...and those dedicated safety professionals who serve you daily...airline, TSA, and FAA employees.

When one thinks of it, it's really pretty silly for our Department of Transportation and Federal Aviation Administration to deny wrongdoing, since Captain Hanley spent 9 hours with movie producer/director BJ Davis, President of Fleur De Lis Film Studios, and his Hollywood film crew a few weeks ago telling his entire story for the world to view on the upcoming blockbuster TV series "Whistleblowers...The Untold Stories"!

President Obama has been apprised of this matter since November 2006 while senator in the state of Illinois, which is the headquarters of United Airlines, the largest single employer in the state of Illinois. If you review the pages of our website, you will note that most Democratic members of key congressional committee chairs have been apprised of this matter as well.

Where is that greater openness of government and enhanced protection for federal whistleblowers promised by President Obama during his 2008 campaign? There will be much more to follow in the international news in the very near future concerning this and other legal matters. Please share these links with your facebook and other friends on twitter, MySpace, LinkedIn, etc through employment of the 'Share' tab provided on each page of our website.

UPDATE: FBI, DOJ refuse to investigate charges of judicial corruption
LINK

12/03/09 3:12 PM EST
Re: “SEC IG looks into United Airlines bankruptcy,” Nov. 24

For three years, the Federal Bureau of Investigation and the Department of Justice have refused to investigate material evidence of a nationwide criminal racket that has allegedly infiltrated state and federal courts and is unlawfully manipulating and exploiting litigants in bankruptcy, family and probate courts.

According to court documents filed in Chicago, the FBI and DOJ turned a blind eye to retaliation against citizens who attempted to expose the corruption, including “kidnapping of children, false incarceration after being ‘framed’ by criminal elements in civil and criminal authorities, impoverishment, coercion under duress, and serious physical injury up to and including death.”

The 2006 affidavit claims that “multiple judges and lawyers are aware of and/or involved in alleged criminal acts,” but have not reported wrongdoing to authorities in violation of the Rules of Professional Conduct. It specifically mentions four federal judges, including Eugene R. Wedoff, who was appointed chief bankruptcy judge of the Northern District of Illinois in 1986.

Judge Wedoff presided over the 2005 bankruptcy of United Airlines, in which 20 large unsecured creditors lost nearly $18 million. The airline also defaulted on $3.2 billion worth of pension obligations for over 134,000 United employees –the largest pension default in three decades – while its top executives walked off with millions in exit bonuses.

Dan Hanley, public spokesperson the Whistleblowing Airline Employees Association (www.airline-whistleblowers.org) and a former United 777 captain was forced out of his job, alleges that United management fraudulently withheld information from the Pension Benefit Guarantee Corporation, which took over their pensions, and that PBGC never conducted the federally mandated analysis of the United pension fund before agreeing to its termination. The Securities and Exchange Commission has recently agreed to look into the matter.

The court affadavit also accuses Wedoff, who recently suffered a mysterious fractured skull, and other allegedly crooked judges of squirreling away $40 million in bribes at LaSalle National Bank in Chicago, Wells Fargo and Northern Trust Bank in Arizona. The affadavit further claims that payoffs to Wedoff eventually wound up in the ERW Living Trust, which purchased Lot 114 of Greenfield Place in Maricopa County, Arizona. The signature of ERW trustee “Richard E. Williams” is allegedly identical to Judge Wedoff’s.

The affidavit further charges that the criminal racketeering enterprise headquartered in Phoenix hacked into INSLAW, a court software program, and “through the systematic code-based creation of fraudulent documenhttp://www.sec.gov/ts and identity theft,” illegally hijacked it to funnel stolen private and government funds into two trusts – Omega and Anchor Pure Trusts – which ultimately dispersed the hot cash into personal trusts such as ERW, which then used fake mortgages for property that had already been bought with cash to further launder the money.

“Multiple lawyers of prominent law firms are allegedly members” of the racket, which uses phony federal marshal credentials to gain access to the Federal Court Building in Chicago, according to the affidavit.

Another signed affidavit, filed by court qualified document examiner Sidney Perceful, accused Wedoff of allowing a bankruptcy trustee to confiscate and destroy records and transfer “large sums of money” to his account at La Salle, which she called “highly irregular and illegal.”

These allegations, if true, point to a massive criminal infiltration of the federal court system. But so far, neither the FBI nor DOJ have bothered to look into them. The big unanswered question is: Why not?
Posted by Dan Hanley at 8:47 AM 0 comments Links to this post

Update: SEC IG looks into United Airlines bankruptcy
LINK

11/25/09 4:51 PM EST

David Kotz, inspector general of the Securities and Exchange Commission, acknowledged that the agency did not respond appropriately to allegations made in November 2007 by former pilot Dan Hanley that United Airlines violated the Sarbanes-Oxley Act during its post-9/11 Chapter 11 bankruptcy proceedings. The law was passed after financial shenanigans by Enron management cratered the energy company.

In a Nov. 3 letter, Kotz told Hanley, now head of the Whistleblowing Airline Employees Association (www.airline-whistleblower.com/) that after reviewing his complaint, “we did not believe that sufficient action was taken by the Office of Investor Education and Advocacy.” Kotz said he was referring the matter directly to SEC Enforcement Division senior counsel Michelle Barrans for possible criminal action.

One of Hanley’s allegations was that the Department of Justice worked out a deferred prosecution agreement with United management, essentially giving them a pass on criminal charges and allowing them to collect millions of dollars in exit bonuses while United vendors, shareholders and employees – who lost their pensions – were hung out to dry.

Hanley, a veteran pilot who was forced out of his job after complaining about lax safety at the airline, also alleges that the Chicago judge who presided over the United Airline bankruptcy proceedings maintained a $40 million bribery fund, part of which was held in a land trust in Arizona under his initials.

Pilots: United Airlines bankruptcy never should have happened
By: Barbara Hollingsworth, The Washington Examiner
Local Opinion Editor, 03/09/10 4:06 PM EST
LINK

The single largest pension default in U.S. history should never have happened, say former pilots who lost stock and the bulk of their pensions in the United Airlines bankruptcy.

The pilots say they are in the early stages of preparing to file a RICO lawsuit based on what they claim was the airline’s fraudulent listing of its frequent flyer Mileage Plus asset – worth an estimated $15 billion at the time - as a liability in documents submitted to a Chicago bankruptcy court and the federal Pension Benefit Guarantee Corporation (PBGC), which took over all of the airline’s pension obligations.

Jerry Summers, a former United pilot who involuntarily retired after 36 years of flying, told The Examiner he expected a pension of $10,000 per month, but now gets less than half that amount even though the pilots’ pension fund was 85 percent funded. “Nobody expected this bloodbath,” he said.

Summers added that PBCG inexplicably agreed to hold United “harmless” against future guaranteed claims, even though “no one can make sense of how the numbers were computed.” Airline employees were also told that it would take a “few months” to issue final determination letters from PBGC regarding their reduced pensions. Five years later, they’re still waiting.

“The bottom line, based on the undisclosed Mileage-Plus asset, estimated at $15 billion, is that this bankruptcy should never have been allowed,” Summers added.

“Employee owned stock was allowed to plummet to near zero value before it was sold with the bankruptcy judge’s approval,” former United 777 captain Dan Hanley, now national spokesman for the Whistleblowing Airline Employees Association, charged in an Oct. 18, 2007 letter to SEC chairman Christopher Cox, a copy of which was also delivered to then Illinois Sen. Barack Obama. “The employees were prevented from selling their stock during this time frame.”

Hanley’s letter also alleges that investment banks, in particular major creditor Goldman Sachs, participated in falsifying the publicly-traded airline’s financial records to obfuscate its true financial picture. The airline’s lead bankruptcy attorney accepted a job with Goldman Sachs immediately after Chicago Seventh Circuit Chief Bankruptcy Judge Eugene R. Wedoff declared United bankrupt in 2005, approving a plan to terminate employee pensions in what was the largest corporate pension default in American history.

In a scenario eerily reminiscent of Enron, top-level corporate officers cashed out as their lower-level employees lost billions. The pension liabilities were then transferred to taxpayers via PBGC, which is now close to insolvency itself.

Wedoff was the same judge presiding over the 2001 bankruptcy of McCook Metals, whose owner, Michael Lynch, asserted in a 2006 sworn affadavit submitted to the court that he had evidence “confirming the existence of an alleged, organized nation-wide criminal enterprise involving officers of state and federal courts who exploit litigants for the personal financial gain and who unlawfully manipulate and exploit the judicial system at the expense of state and federal taxpayers.”

A key witness in an ongoing SEC investigation into the United bankruptcy, Lynch is on the verge of being arrested in Chicago for “contempt of court” in another Cook County court proceeding, The Examiner has learned.

Lynch said he turned over material evidence, including “bank accounts, real estate holdings, trust accounts, and fake real estate deeds of multiple allegedly corrupt judges and attorneys” to authorities, including what he said was evidence of a $40 million “bribery fund” Wedoff allegedly used to hide money from federal authorities in a trust, including fake real estate transactions he says were covered up by LaSalle Bank, Wells Fargo and Northern Trust Bank.

Judge Wedoff refused to recuse himself in a current case involving a company owned by Lynch’s brother, which Lynch claims is retaliation for his allegations of judicial corruption.

SOME EXCERPTS FROM FINDINGS ON THE INSLAW INVESTIGATION

Based on the committee's investigation and two separate court rulings, it is clear that high level Department of Justice officials deliberately ignored INSLAW's proprietary rights in the enhanced version of PROMIS and misappropriated this software for use at locations not covered under contract with the company. Justice then proceeded to challenge INSLAW's claims in court even though it knew that these claims were valid and that the Department would most likely lose in court on this issue. After almost 7 years of litigation and $1 million in cost, the Department is still denying its culpability in this matter. Instead of conducting an investigation into INSLAW's claims that criminal wrongdoing by high level Government officials had occurred, Attorney Generals Meese and Thornburgh blocked or restricted congressional inquiries into the matter, ignored the findings of two courts and refused to ask for the appointment of an independent counsel. These actions were taken in the face of a growing body of evidence that serious wrongdoing had occurred which reached to the highest levels of the Department. The evidence received by the committee during its investigation clearly raises serious concerns about the possibility that a high level conspiracy against INSLAW did exist and that great efforts have been expended by the Department to block any outside investigation into the matter.

Based on the evidence presented in this report, the committee believes that extraordinary steps are required to resolve the INSLAW issue. The Attorney General should take immediate steps to remunerate INSLAW for the harm the Department has egregiously caused the company. The amount determined should include all reasonable legal expenses and other costs to the Hamiltons not directly related to the contract but caused by the actions taken by the Department to harm the company or its employees. To avoid further retaliation against the company, the Attorney General should prohibit Department personnel who participated in any way in the litigation of the INSLAW matter from further involvement in this case. In the event that the Attorney General does not move expeditiously to remunerate INSLAW, then Congress should move quickly under the congressional reference provisions of the Court of Claims Act to initiate a review of this matter by that court.

Finally, the committee believes that the only way the INSLAW allegations can be adequately and fully investigated is by the appointment of an independent counsel. The committee is aware that on November 13, 1991, newly confirmed Attorney General Barr finally appointed Nicholas Bua, a retired Federal judge from Chicago, as his special counsel to investigate and advise him on the INSLAW controversy. However, at that time the Attorney General had not empowered Judge Bua to subpoena witnesses, convene a grand jury or compel the Department to produce key documents.

INSLAW officials have voiced concerns that Judge Bua, lacking independent counsel status, would not be able to entice Department employees who were knowledgeable of the INSLAW matter to come forward and assist Judge Bua in bringing this matter to closure. Consequently, they are concerned that Judge Bua will not be able to get to the bottom of the matter, and they believe his investigation will end up being subverted by the Department.

The inability to subpoena and/or to convene a grand jury was apparently of concern to Judge Bua and, after a meeting on January 28, 1992, the Attorney General granted Judge Bua broad investigative authority which included the power to subpoena witnesses and to convene special grand juries. However because of the actions by the Department regarding potential whistleblowers such as Anthony Pasciuto, it is very likely witnesses will still feel intimidated by the Department. This problem was present throughout the committee's investigation and remains a potential problem today.

Without independent counsel status, Judge Bua remains an employee of the Department of Justice. The image problem is illustrated in a recent interview with Roger M. Cooper, Deputy Assistant Attorney General for Administration. In an interview with the Government Computer News, Mr. Cooper stated that:

The judge (Bua) will do as the attorney general wants him to do, and that's fine. I think all of us in the department would like to get it (the INSLAW matter) behind us. It's sort of an albatross.

Mr. Cooper may have meant that Attorney General Barr wants Judge Bua to conduct a thorough investigation. The committee has no reason to doubt the commitment of Judge Bua or Attorney General Barr to do a thorough investigation of this matter - the problem rests with the fact that, as long as the investigation of wrongdoing by former and current high level Justice officials remains under the control of the Department, there will always be serious doubt about the objectivity and thoroughness of the work.

This matter has caused great harm to several individuals involved and has severely undermined the Department's credibility and reputation. Congress and the executive branch must take immediate and forceful steps to restore the public confidence and faith in our system of justice which has been severely eroded by this painful and unfortunate affair. As such, the independent counsel should be appointed with full and broad powers to investigate all matters related to the allegations of wrongdoing in the INSLAW matter, including Mr. Casolaro's death (read about it: the death of Danny Casolaro in Steamshovel Press and other underground sources. -- my note) and its possible link to individuals associated with organized crime.

X. FINDINGS

1. The Department, in an attempt to implement a standardized case management system, ignored advice from vendors-including INSLAW-that PROMIS should not be adapted to word processing equipment. As predicted, problems arose with adapting PROMIS to word processing equipment. The Department immediately set out to terminate that portion of the contract and blamed INSLAW for its failure.
2. The Department exhibited extremely poor judgment by assigning C. Madison Brewer to manage the PROMIS implementation contract. Mr. Brewer had been asked to leave his position as general counsel of INSLAW under strained relations with INSLAW's owner, Mr. William Hamilton. INSLAW's problems with the Department, which started almost immediately after the award of the contract in March 1982, were generated in large part by Mr. Brewer, with the support and direction of high level Department officials. The potential conflict of interest in the hiring of Mr. Brewer was not considered by Department officials. However, Mr. Brewer's past strained relationship with Mr. Hamilton, and the fact that he lacked experience in ADP management and understanding of Federal procurement laws, raises serious questions about why he was selected as the PROMIS project manager.
3. Mr. Brewer's attitude toward INSLAW, combined with Mr. Videnieks' harsh contract philosophy, led to the rapid deterioration of relations between the Department and INSLAW. Any semblance of fairness by key Department officials toward INSLAW quickly evaporated when Mr. Hamilton attempted to protect his companies' proprietary rights to a privately funded enhanced version of the PROMIS software. In a highly unusual move, Mr. Brewer recommended just 1 month after the contract was signed that INSLAW be terminated for convenience of the Government even though INSLAW was performing under the contract. From that point forward there is no indication that Mr. Brewer or Mr. Videnieks ever deviated from their plan to harm INSLAW. The actions taken by Messrs. Brewer and Videnieks were done with the full knowledge and support of high level Department officials.
4. Peter Videnieks, the Department's contracting officer, negotiated Modification 12 of the contract which resulted in INSLAW agreeing to provide its proprietary Enhanced PROMIS software for the Department's use. This negotiation was conducted in bad faith because Justice later refused to recognize INSLAW's rights to privately financed PROMIS enhancements. Mr. Videnieks and Mr. Brewer, supported by Deputy Attorney General Jensen and other high level officials, unilaterally concluded that the Department was not bound by the property laws that applied to privately developed and financed software.
5. Thereafter, the Department ignored INSLAW's data rights to its enhanced version of its PROMIS software and misused its prosecutorial and litigative resources to legitimize and coverup its misdeeds. This resulted in extremely protracted litigation and an immense waste of resources both for the Government and INSLAW. These actions were taken even though the Department had already determined that INSLAW's claim was probably justified and that the Department would lose in court. In fact, Deputy Attorney General Burns acknowledged this fact to OPR investigators.
6. Department of Justice documents show that a "public domain" version of the PROMIS software was sent to domestic and international entities including Israel. Given the Department's position regarding its ownership of all versions of PROMIS, questions remain whether INSLAW's Enhanced PROMIS was distributed by Department officials to numerous sources outside the Department, including foreign governments.
7. Several witnesses, including former Attorney General Elliot Richardson, have provided testimony, sworn statements or affidavits linking high level Department officials to a conspiracy to steal INSLAW's PROMIS software and secretly transfer PROMIS to Dr. Brian. According to these witnesses, the PROMIS software was subsequently converted for use by domestic and foreign intelligence services. This testimony was provided by individuals who knew that the Justice Department would be inclined to prosecute them for perjury if they lied under oath. No such prosecutions have occurred.
8. Justice had made little effort to resolve conflicting and possibly perjurious sworn statements by key departmental witnesses about the alleged attempt by high level Department officials to liquidate INSLAW and steal its software. It is very possible that Judge Blackshear may have perjured himself and even today his explanations for his recantation of his sworn statement provided to INSLAW are highly suspicious. The investigation of this matter by the Department's Office of Professional Responsibility was superficial.
9. The Department's response to INSLAW's requests for investigations by an independent counsel and the Public Integrity Section was cursory and incomplete
10. The reviews of the INSLAW matter by Congress were hampered by Department tactics designed to conceal many significant documents and otherwise interfere with an independent review. The Department actions appear to have been motivated more by an intense desire to defend itself from INSLAW's charges of misconduct rather than investigating possible violations of the law.
11. Justice officials have asserted that, as a result of the recent ruling by the Appeals Court and the refusal of the Supreme Court to hear INSLAW's appeal, the Findings and Conclusions of Bankruptcy Judge George Bason and senior Judge William Bryant of the District Court are no longer relevant. The Appeals Court decision, in fact, did not dispute the Bankruptcy Court's ruling that the Department "stole . through trickery, fraud and deceit" INSLAW's PROMIS software. Its decision was based primarily on the narrow question of whether the Bankruptcy Court had jurisdiction; the Appeals Court ruled that it did not. This decision in no way vindicates the Department nor should it be used to insulate Justice from the criticism it deserves over the mishandling of the INSLAW contract.
12. The Justice Department continues to improperly use INSLAW's proprietary software in blatant disregard of the findings of two courts and well established property law. This fact coupled with the general lack of fairness exhibited by Justice officials throughout this affair is unbefitting of the agency entrusted with enforcing our Nation's laws.
13. Further investigation into the circumstances surrounding Daniel Casolaro's death is needed.
14. The following criminal statutes may have been violated by certain high level Justice officials and private individuals:
* 18 U.S.C. S 371-Conspiracy to commit an offense.
* 18 U.S.C. S 654-Officer or employee of the United States converting the property of another.
* 18 U.S.C. S 1341-Fraud.
* 18 U.S.C. S 1343-Wire fraud.
* 18 U.S.C. S1505-Obstruction of proceedings before departments, agencies and committees.
* 18 U.S.C. S 1512-Tampering with a witness.
* 18 U.S.C. S 1513-Retaliation against a witness.
* 18 U.S.C. S 1621-Perjury.
* 18 U.S.C. S 1951-Interference with commerce by threats or violence (RICO).
* 18 U.S.C. S 1961 et seq.-Racketeer Influenced and Corrupt Organizations.
* 18 U.S.C. S 2314- Transportation of stolen goods, securities, moneys.
* 18 U..S.C. S 2315-Receiving stolen goods.
15. Several key documents subpoenaed by the committee on July 26, 1991, were reported missing or lost by the Department. While Justice officials have indicated that this involves only a limited number of documents, it was impossible to ascertain how many documents or files were missing because the Department did not have a complete index of the INSLAW materials. The Department failed to conduct a formal investigation to determine whether the subpoenaed documents were stolen or illegally destroyed.

XI. RECOMMENDATIONS

1. The committee recommends that Attorney General Barr immediately settle INSLAW's claims in a fair and equitable manner.
These payments should account for the Department's continued unauthorized use of INSLAW's Enhanced PROMIS and other costs attributed to INSLAW's ongoing attempt to obtain a just settlement for its struggle with the Department, including all reasonable attorneys' fees. If there continue to be efforts to delay a fair and equitable result, the committee should determine whether legislation is required to authorize a claim by INSLAW against the United States, pursuant to 28 U.S.C. S 1492.
2. The Attorney General should require that any person in the Department that participated in any way in the litigation of the INSLAW matter be excluded from further involvement in this case, with the exception of supplying information, as needed, to support future investigations by a independent counsel or litigation, as appropriate.
3. The committee strongly recommends that the Department appoint an independent counsel to conduct a full, open investigation of the INSLAW allegations of a high level conspiracy within the Department to steal Enhanced PROMIS software to benefit friends and associates of former Attorney General Meese, including Dr. Earl Brian, as discussed in this report. Among other matters, the investigation should also:

* Ascertain whether there was a strategy by former Attorneys General and other Department officials to obstruct this and other investigations through employee harassment and denial of access to Department records.
* Investigate Mr. Casolaro's death.
* Determine whether current and former Justice Department officials and others involved in the INSLAW affair resorted to perjury and obstruction in order to coverup their misdeeds.
* Determine whether the documents subpoenaed by the Committee and reported missing by the Department were stolen or illegally destroyed.
* Determine if private sector individuals participated in (1) the alleged conspiracy to steal INSLAW's PROMIS software and distribute it to various locations domestically and overseas, and (2) the alleged coverup of this conspiracy through perjury and obstruction.

Also it must be determined if other criminal violations occurred involving:

* 18 U.S.C. S 371-Conspiracy to commit an offense.
* 18 U.S.C. S 654-0fficer or employee of the United States converting the property of another.
* 18 U.S.C. S 1341-Fraud.
* 18 U.S.C. S 1343-Wire fraud.
* 18 U.S.C. S 1505-Obstruction of proceedings before departments, agencies and committees.
* 18 U.S.C. S 1512-Tampering with a witness.
* 18 U.S.C. S 1513-Retaliation against a witness.
* 18 U.S.C. S 1621-Perjury. 18 U.S.C.
* S1951-Interference with commerce by threats or violence (RICO).
* 18 U.S.C. S 1951 et seq.-Racketeer Influenced and Corrupt Organizations.
* 18 U.S.C. S 2314-Transportation of stolen goods, securities, moneys.
* 18 U.S.C. S 2315-Receiving stolen goods.