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Where is Dennis Patrick?

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Charles Mott

Apr 29, 1998, 3:00:00 AM4/29/98

The following is an old story. Some will find
inaccuracies and others will quibble, but the article
is an expansive view that shows not Clinton at the
convergence of a crime network but Dan Lasater.

I am curious about the Dennis Patrick angle, since
very little more has ever come out about this.

The Economist is a British magazine in the style
of Time or Newsweek, only with more facts. I
would characterize it as center to left in recent


Ghosts of Carelessness Past: The Lasater Affair.
Copyrighted by The Economist
Reproduced for fair use only

The penny dropped for Dennis Patrick in February, when he heard
the names Dan Lasater and Patsy Thomasson mentioned on a radio
show about Whitewater. They provided one possible explanation of
why his life had turned into a living hell since a brokerage
account had been opened at Lasater & Co in 1985 in the name of his
company, Patrick & Associates.

The tale is a strange one, and it is only one man's story of what
happened to him. In July 1985 Mr Patrick, then living in the
mountains of eastern Kentucky, was telephoned by a former college
friend, Steve Love, to invite him on an all-expenses-paid deep-sea
fishing trip to Florida. Mr Patrick , a clerk at the Whitley
county circuit court, accepted. During the weekend his friend
urged him to open a brokerage account at Lasater & Co, a Little
Rock bond dealer, where Mr Love worked as a vice-president. He
promised Mr Patrick, who at the time had an estimated net worth
of at most $60,000 and no knowledge of securities investment, that
he would not lose a cent.

Mr Patrick says Mr Love telephoned him the next month to say he
had opened an account on his behalf (although Mr Patrick had
signed nothing and put up no money) and that he had already made
him a profit of about $20,000. A delighted Mr Patrick went to the
offices of Lasater & Co in Little Rock, where he says he was
reassured by Mr Love and Billy McCord, the sales manager, that
there was no risk of loss and that he could expect to make up to
$20,000 a week. He was instructed by Mr Love to deposit his
profits at the First American Bank in Little Rock. It was only
several weeks later, after Mr Love had pressed Mr Patrick to start
signing documents even though his signature had never been needed
before, that Mr Patrick grew uneasy enough to ask Mr Love to stop
trading on his behalf.

A few months later, Mr Love met Mr Patrick in Kentucky and handed
him a folder containing trading records, in the name of Patrick &
Associates, which Mr Patrick did not understand. Then in April
1986 Lasater & Co filed a lawsuit against Mr Patrick seeking
payment of a sum of $86,625. Mr Patrick, upset, telephoned Mr
Love, who told him he would take care of the matter. But the
litigation continued. In June 1987 Mr Patrick filed answers to
interrogatories raised by Lasater & Co in the lawsuit. He says he
was helped by Linda Nesheim, a former broker at Lasater & Co. The
Economist failed to find Mr Love and Miss Nesheim for their
version of these events.

Mr Patrick stated in his interrogatory, under penalty of perjury,
that Mr Love had opened an account without his permission or
knowledge, and that trades in his account had from time to time
exceeded $12m. Mr Patrick also supplied a list of names of people
who knew about this matter, including Mr Love and Mr McCord. He
says that Miss Nesheim told him that when Miss Thomasson --
a long- time associate of Mr Lasater who at the time had legal
responsibility for running his affairs -- saw these names she would
be most upset and that he would hear nothing more from Lasater &
Co. And that is what happened.

But Mr Patrick had other distractions. Within one year four men
were arrested by agents of the Treasury Department's Alcohol,
Tobacco and Firearms (ATF) division on charges relating to plots
to kill him.

First, Patrick Tully was arrested in Alabama armed with a gun and
carrying a map of the inside of Mr Patrick 's house and a picture
of his vehicle. Second, Danny Star Burson was arrested in
Tennessee for machine-gun violations after Mr Patrick had pursued
him down an interstate highway after what he alleges was an
attempt to kill him. Third, James Josey and Anthony Tricomi were
arrested in Texas in September 1986 by the ATF for conspiracy to
transport explosives across state lines. A federal indictment at
the time said Mr Josey had hired Mr Tricomi to kill Mr Patrick .

Mr Patrick says he had no idea why these people were trying to
kill him. But ATF agents in Kentucky thought he was mixed up in
drug trafficking. They even offered him immunity from prosecution
if he would talk. Mr Patrick said he had no information to give.
One ATF agent assigned to his case, John Simms, now says Mr
Patrick was considered "a victim only". Mr Patrick moved away from
Kentucky in 1988, and still lives in semi-hiding.

Since moving, he has suffered no more attempts on his life. But
when he heard the familiar names of Mr Lasater and Miss Thomasson
on the radio, he searched out his old broking account records and
showed them to a bond-broker friend. The friend told him that the
bond trades in his account had amounted to about $50m.

Developing Arkansas

In Little Rock in the 1980s, Dan Lasater was renowned for his
extravagant parties and hard living. After a childhood of poverty,
he made his fortune in his 20s when he founded Ponderosa, a
steakhouse chain that went public in 1971. He had close ties with
Bill Clinton, who was then governor, through his friendship with
Mr Clinton's mother and brother. At one stage, Mr Clinton's
half-brother Roger was Mr Lasater's driver. When Roger was in
trouble with the law over drugs, Mr Lasater sent him to his
Florida horse-farm to lie low for a while. According to the farm
manager, John Fernung, Mr Lasater remarked at that point that he
owed the governor a lot of favours.

Although his family came from Arkansas, Mr Lasater was born in
Indiana. He moved to Little Rock in the 1970s to go into the
broking business, and set up Lasater & Co in 1983 after buying out
his partners, George Locke and David Collins. He was one of the
biggest contributors to Mr Clinton's election campaign in 1982,
when he won back the governorship after a term out of office. The
firm soon became a frequent underwriter of Arkansas municipal-bond
issues, including those of the Arkansas Development Finance
Authority (ADFA).

Roy Drew, a financial adviser based in Little Rock who has studied
the ADFA, says the agency--which was set up at Mr Clinton's urging
by the Arkansas legislature in 1985--took over much of the state's
bond-issuing power and gave the governor the ability "essentially
to create money". ADFA has no regulator and no legislative
oversight. The governor appoints the board and has the right to
approve or disapprove every bond issue. There is virtually no
limit on the value of bonds that can be issued, an arrangement
that Mr Drew describes as a "prescription for abuse".

A book published in March alleges that ADFA was also used as a
conduit to slip cash for the manufacture of untraceable weapons
parts. These were sent (in violation of American law) to the
contras in Nicaragua during the Reagan years. The book--
"Compromised: Reagan, Bush and the CIA"--was written by Terry
Reed, a former air force intelligence officer in Vietnam, and John
Cummings, an investigative reporter. Mr Reed himself says he
trained Nicaraguans to drop supplies. The laundered money, he
claims, was literally dropped into Arkansas by aircraft as part of
a successful smuggling operation based in Mena, in western
Arkansas. The operation was run by Barry Seal, a man who Mr Reed
reckons was working as a freelance agent for the CIA.

Mr Reed alleges that Seal made cash deposits directly into Lasater
& Co in Little Rock, and that Mr Lasater introduced Seal to him as
a client of his. Seal, a self-confessed drug-smuggler, was shot
dead in February 1986 before he was due to give testimony against
the Medellin cartel. Mr Lasater could not be reached for comment,
but George Locke, his former brokerage partner, says, "I can tell
you one thing, Mr Seal has never met Mr Lasater ."

Others, too, think there was something odd happening at Mena. In
October 1988 Charles Black, the deputy prosecutor for Polk County
(where Mena is), handed Governor Clinton a letter appealing for
state financing of an investigation into drug-smuggling at the
airport. At that point, according to the letter, the investigative
file on Mena contained around 20,000 pages. It was, he says, "the
biggest criminal case I ever came across." Mr Black says that Mr
Clinton agreed to get someone to look into it, but he never heard
anything more.

Bill Duncan, now the chief investigator at the Medicare fraud
divison of the Arkansas attorney-general's office, carried out a
criminal investigation of goings-on at Mena between 1983 and 1986
for the Internal Revenue Service. Mr Duncan says he uncovered
evidence of a "tremendous amount of money-laundering". His own
investigation focused on how the flow of arms was financing drug-
sale proceeds washed clean through what appeared to be legitimate
businesses. His findings were never submitted to a grand jury, and
he was not granted subpoenas to pursue the money trail in central
Arkansas, which includes Little Rock.

Mr Reed says that the first recipient of a tax-free low-interest
ADFA bond issue was Park-O-Meter, a parking-meter company based
in Russellville, Arkansas. Seth Ward, the company's president and
one of its owners, is the brother-in-law of Webb Hubbell, a former
law partner of Hillary Clinton who recently resigned from a high
position in the Justice Department during investigations of
overcharging of clients at their law firm. In his book, Mr Reed
claims Park-O-Meter made weapons parts as a subcontractor for
Iver Johnson's Firearms (now bankrupt), of Jacksonville, Arkansas.
It was this company which, by Mr Reed's account, was the primary
contractor for building the untraceable weapons components.

The S&L connection

One motive for setting up ADFA, according to Roy Drew, was to
reduce the sway held by Stephens Inc of Little Rock over the
Arkansas municipal-bond underwriting market. Stephens is one of
America's biggest non-New-York based investment banks; it is often
said to "own" the state of Arkansas. Lasater & Co was one of the
competitors that benefited most from ADFA's creation. According to
the Washington Times, the firm underwrote $664m in Arkansas
municipal-bond issues, not all of them ADFA's, before Mr Clinton
was compelled to distance himself from Mr Lasater when his friend
fell foul of a drug charge.

Mr Drew, himself a Stephens employee for six years, says that
Stephens had become "real nervous" at the amount of business
Lasater & Co was receiving. But Stephens did not have to worry for
long. Mr Lasate, who was by then a heavy cocaine-user, was
charged with "social distribution" of drugs and sentenced to 2.5
years in prison. He served six months, and in 1990 Mr Clinton
pardoned him.

Mr Lasater's links with the president have continued, albeit
indirectly, up to now. Miss Thomasson, who did not return The
Economist's calls about this story, now serves as director of
administration in the White House. She worked for Lasater & Co
with the title of executive president and was given legal
responsibility for managing Mr Lasater 's affairs after he went to
prison in 1987. Miss Thomasson was also one of the two aides who
accompanied Bernard Nussbaum, the former White House counsel, on a
search of Vincent Foster's office on July 20th last year less than
three hours after his body was found in a Virginia park.

Mr Lasater is now back in Little Rock and still active in
business. His Phoenix Group has been bidding for distressed assets
sold by the Resolution Trust Corporation, the federal agency
charged with cleaning up the savings-and-loan mess. There is irony
in this, since frenzied bond trading by Lasater & Co played a part
in the failure of more than one savings and loan.

For example, the Federal Savings and Loan Insurance Corporation
(FSLIC), the former thrift deposit insurance fund, sued Lasater &
Co for $3.3m for its part in the failure of First American Savings
and Loan, a Chicago-based thrift. Lasater & Co paid the government
$200,000 in an out-of-court settlement. Bizarrely, in view of Mr
Lasater 's connections, FSLIC hired the Rose Law Firm of Little
Rock to represent it in the lawsuit. Even more extraordinary,
given Mr Lasater 's ties to Mr Clinton, the two top lawyers
assigned to the case were Mr Foster and Mrs Clinton.

The activities of Lasater & Co and of ADFA are only now coming
into the spotlight. It is clear that the money trail involving
them has never been thoroughly investigated, and that many
unanswered questions remain. At the least, they suggest Mr Clinton
was not over-punctilious about either the friends he made or the
institutions he backed. That carelessness, combined with eagerness
to please, continues to haunt him in the White House.

May 14, 2020, 12:51:18 AM5/14/20
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