Former Baltimore banker in CIA case loses appeal

January 25, 1994|By Lyle Denniston | Lyle Denniston,Washington Bureau

WASHINGTON -- The Supreme Court turned aside yesterday the appeal of a former Baltimore banker who claimed that he was driven to a nervous breakdown by being forced to arrange arms purchases he thought were illegal for a "front" company of the Central Intelligence Agency.

Without comment, the court voted to leave intact a decision by U.S. District Judge William N. Nickerson of Baltimore, who threw out the lawsuit of the ex-banker, Robert J. Maxwell, because of the CIA's concern that secrets might be compromised.

Mr. Maxwell, who now lives in Shrewsbury, Pa., had sued First National Bank of Maryland and one of its customers, Associated Traders Group.

Associated Traders is a now-defunct company that Mr. Maxwell said he had been told by superiors was a CIA "proprietary" company, set up to look like a regular business but actually to carry on covert operations for the agency.

From 1981 to 1985, while working at First National's main office in Baltimore, Mr. Maxwell said, he used Associated Traders' account to buy $25 million in arms and equipment for secret delivery to rebel forces in Central America, Angola and Afghanistan.

In his lawsuit, the former executive said that when he tried to get the bank to stop the transactions or to absolve him formally of any violations of federal laws, he was intimidated and threatened by the bank. He contended that the bank was acting at the urging of the CIA and the Justice Department.

He sued the bank and Associated Traders in federal court, claiming violations of his civil rights and claiming liability for a nervous breakdown that, he said, made it impossible for him to get another job.

The Justice Department claimed, however, that "state secrets" might be jeopardized if the case went forward. Then-CIA Director William Webster filed a statement with Judge Nickerson saying that the CIA should not be put into the position of denying or conceding that Associated Traders was one of its secret operations.

Judge Nickerson agreed and threw out the lawsuit. His decision, reached in September 1992, was upheld last July by the 4th U.S. Circuit Court of Appeals in Richmond. In refusing to hear the case yesterday, the justices appeared to be unanimous.

Mr. Maxwell could not be reached immediately last evening at his home in Shrewsbury.

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