Judge dismisses lawsuit involving state secrets Ex-bank employee plans to appeal

October 06, 1992|By Norris P. West | Norris P. West,Staff Writer

A federal judge has thrown out a lawsuit filed by a former Baltimore bank employee because the evidence needed to prove the case might breach national security.

U.S. District Judge William N. Nickerson dismissed a lawsuit filed by Robert J. Maxwell alleging that the Central Intelligence Agency used its account at First National Bank of Maryland to ship illegal arms.

"The focus of the court's inquiry in a situation involving state secrets is . . . whether the state secrets are so central to the case that the litigation would create the risk of disclosure of the secrets," Judge Nickerson said in his opinion, issued last week.

Mr. Maxwell, former senior international banking executive at First National, sued the bank four years ago claiming abusive discharge, intentional infliction of emotional distress and other violations by the bank. He said he resigned after becoming suspicious that the bank's transactions were being made to pay for illegal arms shipments to other countries.

Lawrence S. Ottinger, Mr. Maxwell's lawyer, yesterday said he will seek a review in the 4th U.S. Circuit Court of Appeals, calling the ruling "a huge extension of the national security privilege."

However, the judge relied on previous decisions by the federal appellate court holding that national security interests are more important than individual cases.

Mr. Maxwell, 52, of Shrewsbury, Pa., says he and his former lawyer were threatened by the CIA, FBI and the Justice Department. He charges in the suit that the three government agencies violated his civil rights.

"As far as I'm concerned, that judge is saying the CIA could go out and kill people, claim state secrets and walk away," Mr. Maxwell said.

Paul Bridenhagen, a Justice Department attorney, said he could not comment. Joseph G. Finnerty Jr., the bank's lawyer, could not be reached.

This was the second major national security, or state secrets, ruling in the case by Judge Nickerson. Last year, he issued a protective order prohibiting Mr. Maxwell from using information that could link the CIA to bank transfers.

The judge, in his ruling, said he dismissed the suit because Mr. Maxwell would not be able to prove his case against the bank without running the risk of exposing national security secrets.

"I feel like I'm fighting the whole government down there," said Mr. Maxwell, who now works as a bartender.

Mr. Maxwell, 52, alleges in papers in U.S. District Court in Baltimore that one of the bank's customers, Associated Traders Corp., was a front company for the CIA. He says the CIA paid for weapons through its First National account.

He charges that his supervisor told him in 1983 that Associated Traders was a CIA company when he was asked to handle the firm's account.

Mr. Maxwell charges the bank made three transactions for arms shipments by Associated Traders between December 1983 and February 1985. One of those transactions required at least five banks to transfer money to First National, he said. At that point First National sent $5.3 million to a bank in Panama and then to Switzerland, he charges in court documents.

Mr. Maxwell said yesterday that he and his family were threatened by the CIA before he resigned from the bank in 1985. He said his first lawyer quit the civil case after a lawyer for the bank threatened to seek his disbarment with the help of the FBI and Justice Department. The bank's lawyer has previously denied the allegations.

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