RICHARD J. BRENNEKE

the witness hereinbefore named, having been previously cautioned and sworn, or affirmed, to tell the truth, the whole truth, and nothing but the truth testified as follows:

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1blank.gif - 0.0 K drugs into the United States and using the cash generated from

2blank.gif - 0.0 K that to perform operations which I perceived to be not put

3blank.gif - 0.0 K before Congress in any form.

4blank.gif - 0.0 K Q. So you had two conversations with Mr. Gregg?

5blank.gif - 0.0 K A. Actually, I had more than that.

6blank.gif - 0.0 K Q. Well, can you tell us about the other conversations, and

7blank.gif - 0.0 K can you identify approximately the dates that they occurred?

8blank.gif - 0.0 K A. Between 1984 and 1986. And Iíd be happy to furnish you

9blank.gif - 0.0 K with copies of my telephone --

10blank.gif - 0.0 K Q. Sure.

11blank.gif - 0.0 K A. -- logs that -- the telephone bills that I still have.

12blank.gif - 0.0 K Q. And you can specifically identify more than one, several

13blank.gif - 0.0 K conversations with Mr. Gregg?

14blank.gif - 0.0 K A. Six or eight conversation with Mr. Gregg, and theyíre all

15blank.gif - 0.0 K on the telephone records that I have.

16blank.gif - 0.0 K Q. Right. Well, we will return to that. Okay. Off the

17blank.gif - 0.0 K record a minute.

18blank.gif - 0.0 K (Off-the-record)

19blank.gif - 0.0 K Q. Mr. Brenneke, Iíd like to return for a moment to the

20blank.gif - 0.0 K question of payment of money from the Gotti organization that

21blank.gif - 0.0 K you have stated went to the CIA. And Iím not certain that it is

22blank.gif - 0.0 K clear how you knew that the money, that the some $50,000,000,

23blank.gif - 0.0 K did you say --

24blank.gif - 0.0 K A. Yes.

25blank.gif - 0.0 K Q. -- in money, how you knew that money went to the Central

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1blank.gif - 0.0 K Intelligence Agency. Could you explain again what happened to

2blank.gif - 0.0 K the money that you took to Panama, where it was deposited, where

3blank.gif - 0.0 K it went, and how you knew where the money went to?

4blank.gif - 0.0 K A. Iíd be happy to. I set up, in 1969 or 1970, a number of

5blank.gif - 0.0 K corporations in Panama City. Those corporations in turn opened

6blank.gif - 0.0 K bank accounts. Those bank accounts were accounts that I would

7blank.gif - 0.0 K normally use in the course of my business with the CIA to

8blank.gif - 0.0 K transfer money into the accounts, and from there to transfer

9blank.gif - 0.0 K them into specific accounts in Spain or, as I say, in some cases

10blank.gif - 0.0 K other countries in Europe. The ultimate destination was

11blank.gif - 0.0 K Switzerland, where those funds were. I knew where they went,

12blank.gif - 0.0 K because Iím the person who went in and gave the order to the

13blank.gif - 0.0 K banker to move them.

14blank.gif - 0.0 K Q. And you had an arrangement with the CIA to organize those

15blank.gif - 0.0 K banks for the CIA, to open the account?

16blank.gif - 0.0 K A. That was what I specialized in doing. I laundered money

17blank.gif - 0.0 K there.

18blank.gif - 0.0 K Q. How long did you -- were you engaged in the activity of

19blank.gif - 0.0 K laundering money before you went to work for the CIA?

20blank.gif - 0.0 K A. Never. I mean, I -- we werenít laundering money at the

21blank.gif - 0.0 K point -- when I first was recruited, which was in Ď68, Ď69, all

22blank.gif - 0.0 K we were doing was selling mutual fund stock offshore.

23blank.gif - 0.0 K Q. So youíre saying that you were recruited by the CIA to

24blank.gif - 0.0 K organized and open accounts for the CIA for the purpose of

25blank.gif - 0.0 K laundering money?

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1blank.gif - 0.0 K A. Thatís correct.

2blank.gif - 0.0 K Q. And how many accounts did you open for the CIA, and can you

3blank.gif - 0.0 K identify where those accounts were opened and in which banks?

4blank.gif - 0.0 K A. Yes, I can. They were opened in Panama. The accounts --

5blank.gif - 0.0 K or the companies, if you wish, I will provide you with the

6blank.gif - 0.0 K Articles of Incorporation --

7blank.gif - 0.0 K Q. Yes.

8blank.gif - 0.0 K A. -- as they were drafted at that time.

9blank.gif - 0.0 K Q. We will ask you to submit those as an exhibit to your

10blank.gif - 0.0 K testimony. And, of course, we will have to come together again

11blank.gif - 0.0 K in order for that to be presented, those documents to be

12blank.gif - 0.0 K presented.

13blank.gif - 0.0 K And just describe for the moment, since weíre going to have

14blank.gif - 0.0 K to come back again with these documents, the countries, the

15blank.gif - 0.0 K names of the banks that you recall that you opened, where you

16blank.gif - 0.0 K opened accounts for the CIA?

17blank.gif - 0.0 K A. Panama City, Banquo DeMexico, at one point we were using a

18blank.gif - 0.0 K Citibank correspondent down there whose name escapes me. I just

19blank.gif - 0.0 K donít recall it. We had a man on-site who worked for us, as

20blank.gif - 0.0 K well as worked for Ron Martin, a man named Johnny Mollina,

21blank.gif - 0.0 K M-O-L-L-I-N-A, I believe. John was -- would spend a lot of his

22blank.gif - 0.0 K time in Panama City there and worked in one of the banks that we

23blank.gif - 0.0 K used. I set up an account in -- well. I set up more than one

24blank.gif - 0.0 K account in Madrid that was used. I set up an account in

25blank.gif - 0.0 K Brussels at Bank Lambert that was regularly used. I set up

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1blank.gif - 0.0 K accounts at Credit Suisse and --

2blank.gif - 0.0 K Q. Is that a Swiss bank?

3blank.gif - 0.0 K A. That is a Swiss bank. And Bank of Credit & Commerce,

4blank.gif - 0.0 K commonly referred to as BCCI, also a Swiss bank. A bank that no

5blank.gif - 0.0 K longer exists called Bank Hoffman. And to facilitate matters --

6blank.gif - 0.0 K not to drag this out, to facilitate matters I set up a bank in

7blank.gif - 0.0 K Panama City on behalf of the mutual fund company I worked for so

8blank.gif - 0.0 K that I could ultimately control how the transfers were handled.

9blank.gif - 0.0 K Q. And you organized a bank in Panama for the CIA?

10blank.gif - 0.0 K A. I organized it for the company I worked for, that was -- it

11blank.gif - 0.0 K was subsequently used by the CIA and it was used by members of

12blank.gif - 0.0 K the organized crime families. The bank was called U.S.

13blank.gif - 0.0 K Investment Bank. It really existed in Panama City. You could

14blank.gif - 0.0 K actually go in and open a checking account there.

15blank.gif - 0.0 K Q. And the money that you got from the Gotti organization that

16blank.gif - 0.0 K you put on the airplane and returned to Panama on the next trip,

17blank.gif - 0.0 K you personally took to a bank in Panama City?

18blank.gif - 0.0 K A. You bet, I did.

19blank.gif - 0.0 K Q. And you deposited that money. And can you tell us the

20blank.gif - 0.0 K amount of those deposits, and the directions that you would give

21blank.gif - 0.0 K to the officers at the bank, and the name of the bank, and where

22blank.gif - 0.0 K the money would go? Just detail that for us?

23blank.gif - 0.0 K A. All right. The money would go into -- letís take Banquo

24blank.gif - 0.0 K DePanama, the Panamanian National Bank down there, as an

25blank.gif - 0.0 K example. I would go in. I would meet with -- at times I would

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1blank.gif - 0.0 K meet with, for instance, Johnny Mollina. John worked for one of

2blank.gif - 0.0 K the banks down there, I think it was City that he worked for at

3blank.gif - 0.0 K one time. In any case, I would go in. I knew the bank officers

4blank.gif - 0.0 K by name. Unfortunately, I donít recall all their names since

5blank.gif - 0.0 K itís been many years ago. And I would provide them with

6blank.gif - 0.0 K directions as to how the money was to be transferred and where

7blank.gif - 0.0 K to transfer, that is, is it to be transferred by cashierís check

8blank.gif - 0.0 K and courier to Madrid in a specific account there or is it to be

9blank.gif - 0.0 K just wire transferred to Madrid as a transfer of funds from

10blank.gif - 0.0 K IFMA, a Panamanian corporation, to IFMAís affiliate in Madrid or

11blank.gif - 0.0 K Brussels at Bank Lambert. They needed to know that. And then I

12blank.gif - 0.0 K would have to tell them at the other bank that money was coming

13blank.gif - 0.0 K into that account.

14blank.gif - 0.0 K Q. So you would notify the CIA bank, or the bank having the

15blank.gif - 0.0 K CIA account in Spain or in Switzerland?

16blank.gif - 0.0 K A. Yes.

17blank.gif - 0.0 K Q. That the deposit had been made in Panama?

18blank.gif - 0.0 K A. Correct.

19blank.gif - 0.0 K Q. How would you notify them?

20blank.gif - 0.0 K A. Generally by telephone. And they would be told that --

21blank.gif - 0.0 K there were a variety of codes that were used, but the message

22blank.gif - 0.0 K was very simple, youíre going to receive money in this account,

23blank.gif - 0.0 K the money will probably stay in the account anywhere from 24 to

24blank.gif - 0.0 K 72 hours, at which time it will be transferred out of that

25blank.gif - 0.0 K account.

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1blank.gif - 0.0 K Q. Did you ever utilize bearer bonds for the purpose of

2blank.gif - 0.0 K laundering money?

3blank.gif - 0.0 K A. Sure did.

4blank.gif - 0.0 K Q. Can you tell us how that was handled?

5blank.gif - 0.0 K A. Sure. It was handled in two ways; when U.S. Investment

6blank.gif - 0.0 K Bank was active in Panama it would issue bonds, no names on

7blank.gif - 0.0 K them, which was common. Itís common in Europe, itís common in

8blank.gif - 0.0 K Central and South America. And those bonds actually belong to

9blank.gif - 0.0 K the individual that is carrying them; as, for instance, the

10blank.gif - 0.0 K stock in IFMA belongs only to the person who happens to have it

11blank.gif - 0.0 K in his hand at that moment. You lose it, you lose your money.

12blank.gif - 0.0 K Q. And what would you do with the bearer bonds?

13blank.gif - 0.0 K A. The bearer bonds would be taken generally by courier to --

14blank.gif - 0.0 K in some cases to Banque DeMexico in Mexico City and transferred

15blank.gif - 0.0 K from there or sent from there by their couriers. By 1985, late

16blank.gif - 0.0 K 1985, it was getting uncomfortable in Panama, and so some of the

17blank.gif - 0.0 K Venezuelan banks in Caracas were used. And they would -- the

18blank.gif - 0.0 K same procedure was followed, though; the money would be

19blank.gif - 0.0 K deposited into an account, you would walk into the bank, for

20blank.gif - 0.0 K example, and sit down with the Vice-President or Managing

21blank.gif - 0.0 K Director of the bank. You were clearly a large depositor and a

22blank.gif - 0.0 K large customer for that bank. And you just simply explained that

23blank.gif - 0.0 K you wanted to deposit this money in this bag, and he would just

24blank.gif - 0.0 K kindly go ahead and do so for you.

25blank.gif - 0.0 K Q. Mr. Brenneke, under whose direction were you working in

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1blank.gif - 0.0 K order to carry out the function of depositing the money from the

2blank.gif - 0.0 K sale of the drugs to the New York --

3blank.gif - 0.0 K A. Bob Kerritt, an officer of the Central Intelligence Agency

4blank.gif - 0.0 K in Washington, D.C..

5blank.gif - 0.0 K Q. All right. Now, would you spell his name for us?

6blank.gif - 0.0 K A. K-E-R-R-I-T-T.

7blank.gif - 0.0 K Q. And would you talk with him regularly about his operation?

8blank.gif - 0.0 K A. Yes, I would.

9blank.gif - 0.0 K Q. And do your telephone logs --

10blank.gif - 0.0 K A. Probably would not show it, because I never made the calls

11blank.gif - 0.0 K from my home phone.

12blank.gif - 0.0 K Q. I see. But you do recall the conversations?

13blank.gif - 0.0 K A. I have notes of the conversations.

14blank.gif - 0.0 K Q. You have notes of the conversations?

15blank.gif - 0.0 K A. Yes, sir. I certainly do.

16blank.gif - 0.0 K Q. And you can -- do you remember the dates? Will those notes

17blank.gif - 0.0 K bear the dates?

18blank.gif - 0.0 K A. The notes bear dates.

19blank.gif - 0.0 K Q. We will ask you at some future, subsequent date to refresh

20blank.gif - 0.0 K your recollection so that you can produce a memorandum of dates

21blank.gif - 0.0 K and times and any other information concerning your

22blank.gif - 0.0 K conversations with Mr. Kerritt?

23blank.gif - 0.0 K A. Iíll be happy to do that. Iíll also be happy to furnish

24blank.gif - 0.0 K you with memoranda that I sent to government agencies

25blank.gif - 0.0 K specifically complaining about the use of drugs in this

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1blank.gif - 0.0 K operation.

2blank.gif - 0.0 K Q. One further question, before I defer to my associate. You

3blank.gif - 0.0 K mentioned a Mr. Rupp that was a co-pilot that went with you.

4blank.gif - 0.0 K Have we identified who he is, and where he might be located?

5blank.gif - 0.0 K A. Yeah. Harry Rupp, Heinrich Rupp is his correct name,

6blank.gif - 0.0 K H-E-I-N-R-I-C-H, Rupp, R-U-P-P, lives in the Denver, Colorado

7blank.gif - 0.0 K area. I think he lives in the city of Aurora, which is near

8blank.gif - 0.0 K Denver.

9blank.gif - 0.0 K Q. Have you seen him subsequent to his being a co-pilot with

10blank.gif - 0.0 K you on these operations?

11blank.gif - 0.0 K A. Of course. Iíve been at his home frequently, and I

12blank.gif - 0.0 K testified in his behalf when he was indicted and tried two years

13blank.gif - 0.0 K ago, 1988.

14blank.gif - 0.0 K Q. What was he indicted for?

15blank.gif - 0.0 K A. Bank fraud.

16blank.gif - 0.0 K Q. Was he acquitted?

17blank.gif - 0.0 K A. No, he was found guilty on destroying -- well, along with

18blank.gif - 0.0 K the president and the officers of the savings and loan, of

19blank.gif - 0.0 K basically looting it.

20blank.gif - 0.0 K Q. Okay.

21blank.gif - 0.0 K A. And I testified on his behalf, saying that since that was

22blank.gif - 0.0 K common in our line of work, what was the problem.

23blank.gif - 0.0 K Q. All right. Let me just ask a couple of general questions

24blank.gif - 0.0 K in order to try to reach a conclusion here. Did you ever

25blank.gif - 0.0 K discuss your concerns with the CIA Director, the late Bill

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1blank.gif - 0.0 K Casey?

2blank.gif - 0.0 K A. Yes, I did on a number of occasions. And Mr. Caseyís

3blank.gif - 0.0 K telephone logs would reflect phone calls to me, made to me in --

4blank.gif - 0.0 K specifically in Lake Oswego, which was at that time the location

5blank.gif - 0.0 K of my office.

6blank.gif - 0.0 K Q. So Mr. Casey called you?

7blank.gif - 0.0 K A. Yes, sir, he did.

8blank.gif - 0.0 K Q. On how may occasions?

9blank.gif - 0.0 K A. Two that I can recall specifically.

10blank.gif - 0.0 K Q. What was the nature of the conversation with Mr. Casey?

11blank.gif - 0.0 K A. What went wrong in Central America.

12blank.gif - 0.0 K Q. Can you relate to us that discussion; tell us what he said

13blank.gif - 0.0 K and what you said?

14blank.gif - 0.0 K A. Certainly. Bill Caseyís main concern -- there were two

15blank.gif - 0.0 K main concerns to him; one, exposure of the operations in Central

16blank.gif - 0.0 K America; and two, why did the system breakdown. To me he

17blank.gif - 0.0 K sounded like sort of a general or supervisor who doesnít have

18blank.gif - 0.0 K his hands on the pulse of whatís really happening out in the

19blank.gif - 0.0 K trenches. And by this time I had caused sufficient problems for

20blank.gif - 0.0 K CIA and others in South and Central American that the Israelis

21blank.gif - 0.0 K had in fact sent over a team of people to shut down the Israeli

22blank.gif - 0.0 K involvement in anything that closely resembled the drug

23blank.gif - 0.0 K business. I could get no assistance of any kind similar to that

24blank.gif - 0.0 K from the United States Government, and I explained that to Mr.

25blank.gif - 0.0 K Casey. And his first question was, why I had gone to Israel,

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