Thursday, April 27, 2000 FBI settles privacy lawsuit by paying $6 million http ://w ww.postnet.com/postnet/stories.nsf/ByDocID/6C540D1BC312F9EA862568CE00084CDD By Philip Dine Post-Dispatch Washington Bureau WASHINGTON - The Justice Department has agreed to pay $6 million to a former McDonnell Douglas consultant who says his privacy was invaded and his reputation damaged by the FBI. The settlement, reached Wednesday, is believed to be the largest ever given by the government for violation of the Privacy Act. The matter was set to go to trial early next week. The former consultant, Thomas C. Stewart, who is based in Portland, Ore., had accused the FBI of circulating false information about him in 1996 as he tried to help the St. Louis-based defense contractor sell fighter jets in Eastern Europe. That material, including suggestions that Stewart had tried to bribe a Czech defense official, made its way to the Czech press. This led to such headlines as: "Beware of the Man From Douglas" and "McDonnell Douglas Bid Clouded by FBI Allegations." As a result, McDonnell let Stewart go in April 1997. That fall, Stewart sued the FBI. His attorney, Carol Emory, on Wednesday called the settlement "a long overdue vindication." But Stewart and his attorneys said that the government's conduct, and its refusal even now to admit a mistake and take corrective action, point to a need to make the FBI more accountable. "When this began, all I wanted was for the FBI to clear my name," Stewart said. "They had made a mistake, and at that time had the power to easily admit and correct that mistake. The fact that it took almost four years of litigation and the intervention of a federal judge to bring the case to closure speaks strongly for the need for substantial reform in monitoring FBI misconduct." The Justice Department, which oversees the FBI, said Wednesday that it was admitting no wrongdoing and had agreed to settle as a way of "resolving without further litigation" the complaint by Stewart. "We maintain that we did not violate the Privacy Act," Justice Department spokesman Charles Wilson said. At the time the events took place, Stewart was trying to help McDonnell sell 30 St. Louis-built F/A-18 fighter jets - worth about $1 billion - to the Czech Republic. McDonnell was subsequently bought by Boeing, which continues to make the F/A-18s, or Hornets, in St. Louis. Stewart was decorated for missions flown as a Navy Reserve commander during the Persian Gulf War. He was using his contacts to try to help McDonnell get the contract amid competition from French, Swedish, British and other U.S. companies. But there had been a falling out between Stewart and a business associate. The partner told the FBI that Stewart had misrepresented himself as a U.S. official in the Czech Republic and had sought to pay off a Czech defense figure, Otakar Vychodil. Stewart said his problems began after the FBI's Portland office sent an eight-page unsigned document to Czech officials in the summer of 1996, purportedly to see whether any of the country's laws had been violated. A copy also went to the U.S. Embassy in Prague. The document painted a colorful picture of Stewart as a braggart and as someone willing to endanger others for his own purposes. It made its way to the Czech press, resulting in highly negative publicity about McDonnell Douglas and about Stewart. The allegations were unrelated to Stewart's work for McDonnell, but they led the company to decide not to renew his contract in April 1997, a year after he'd been hired. Stewart contended that the FBI acted irresponsibility in never interviewing him or verifying the allegations, which he and Vychodil strenuously denied. The Post-Dispatch reported in 1997 that Air Force officers at the embassy were secretly trying to pressure the Czechs into choosing a competing plane built by Lockheed Martin. That plane, the F-16, is a U.S. Air Force plane, while the Hornet is used by the Navy, and additional overseas sales of the F-16 would have lowered Air Force costs. Following the Post-Dispatch reports, Defense Secretary William Cohen issued a worldwide directive that U.S. representatives abroad observe strict neutrality in commercial transactions where two or more American companies were competing for a contract. The Czechs have yet to award a contract for the fighter jets. Stewart's trial attorney, Christopher Kent, said the settlement efforts got a boost when federal judge in Oregon found last year that the FBI had violated the Privacy Act in releasing the report about Stewart, who is an investment banker outside Portland. The trial next week would have been to assess how much he had been damaged by those actions. Kent said he was told by government officials that the $6 million is the largest settlement ever agreed to for violation of the Privacy Act. Wilson, the Justice Department spokesman, said the agency knew of none bigger. <A HREF="http://www.ctrl.org/">www.ctrl.org</A> DECLARATION & DISCLAIMER ========== CTRL is a discussion & informational exchange list. Proselytizing propagandic screeds are unwelcomed. Substance—not soap-boxing—please! 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