Kafka's Banker

Bob Maxwell's nightmarish slide from banker to bartender began with a simple question: Are you willing to do work for the CIA?

This is a spy story about a banker named Bob Maxwell.

Eleven years ago, Maxwell entered a frightening world of spooks, arms dealers, and money launderers when he unwittingly became involved with the Central Intelligence Agency. That chance encounter cost him his career and his health, and has propelled him into a legal battle that has gone all the way to the Supreme Court.

The CIA does business with many banks, not to mention law firms, airlines, computer companies, and corporations of all kinds. Some know they are dealing with the CIA, some don't. Most of us believe that if we found ourselves caught in the underworld of national espionage, the police or the courts would rescue us.

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That's what Bob Maxwell used to think, too. But like a character in an eerie Kafka novel, Maxwell awoke one morning so entangled with secret agents that he could not extricate himself. Justice has eluded him. He has been threatened, followed, photographed, and finally gagged by a U.S. court order at the CIA's request. "I feel that I'm fighting the entire federal government," he says.

Maxwell's story is a parable about the 1980s. Under Reagan, the CIA threw itself into covert operations from Angola to the Middle East. Some were run dutifully, with White House approval and congressional oversight; others were freelanced "off the books." Maxwell's story provides a small window into U.S. intelligence operations in the 1980s.

Perhaps that is what worries the CIA.

Maxwell is a most unlikely candidate to battle the CIA. When his world fell apart, he was a conservative Republican banker who lived in rural Pennsylvania and commuted to Baltimore to work at the First National Bank. He is a soft-spoken man who uses gestures sparingly.

Nonetheless, Maxwell has reluctantly come to see himself as a whistle-blower. He realizes that he can never get back the years he has lost. And it is unlikely his life will ever return to normal. But Maxwell is driven by an inner sense of justice that says: They can't get away with that!

"BY ORDER OF A CLIENT"

Maxwell's saga began in October 1983. After more than a decade in banking, Maxwell landed a job as a senior executive at the First National Bank of Maryland. During his first week, Maxwell was approached by his supervisor, Ronald Teather.

"It was after work, about 5:15," Maxwell recalls. "We were just talking off-the-cuff, and he said, 'Would you be willing to do work for the CIA?'"

Teather explained that a First National client, Associated Traders Corporation, was actually a CIA front. Teather handled the ATC account personally. Assuming that even the CIA needed bank accounts, Maxwell told Teather that he would be willing to handle ATC's letters of credit as long as they were properly documented and fell within his area of responsibility.

Teather asked him to fill out an unmarked biographical data sheet. The document, Maxwell believes, went to the CIA. At no time did Maxwell ask for or receive security clearance, nor did he agree, verbally or in writing, to a secrecy accord.

Almost immediately, Maxwell became worried about ATC's dealings. Letters of credit to finance weapons shipments lacked documentation from the Bureau of Alcohol, Tobacco, and Firearms. Maxwell was specifically asked not to copy bills of lading and commercial invoices. This meant that the bank could not verify what goods had been shipped.

Bank documents show that in December 1983, "60,000 Enfield rifles" were shipped from India. Britain and Portugal were listed as destinations, but there is no way to know where they ended up. Although Teather told him not to copy invoices or bills of lading, Maxwell did and quietly filed them away.

A year later, the bank's vice president for international operations, John Bond, asked Maxwell to route $5.3 million from ATC's account through Panama to a Swiss bank--without specifying ATC as the sender. A month later, the transfer went through "by order of a client"--who remained nameless.

Why in the world would anyone want to bounce millions of dollars around the world without specifying who it was from? Then it hit Maxwell: The CIA was laundering money, and he was helping them do it.

A SIMPLE MEMO

Maxwell became increasingly anxious about handling ATC's transactions. Then he discovered that the bank had listed his own name atop the ATC account. Mail was coming to the bank, marked "Associated Traders c/o Robert Maxwell." But it was routed to his supervisor's office, where an ATC representative would pick it up. Maxwell only found out about the letters when one mistakenly came to him via interoffice mail.

"They put my name on the account without even asking me," Maxwell remembers. "I thought to myself, 'I'm gonna get written authorization to handle this.'"

So Maxwell sent a simple memo, asking for authority to handle ATC's "out of the ordinary" dealings. His memo caused an uproar. "They were running around like chickens with their heads cut off," he says.

That same month, a representative of Associated Traders visited Maxwell and wanted to set up a "hidden" account in a Panamanian bank. Alarmed, Maxwell immediately wrote a second memo to bank officers, again asking for authorization to handle ATC's transactions.

Neither Teather nor Bond responded to Maxwell's memos. Instead, they grilled him: Who else had he told? Did he have a lawyer? Bond warned that they could fire him "tomorrow."

"I asked him, 'Do you work for the bank or for the CIA?'" Maxwell recalls. "He told me that if I continued [to make waves], a number of people would be hurt throughout the country. He told me that there were 26 other banks doing the same thing as we were."

Then came the bolt of lightning that changed Maxwell's life. On March 1, 1985, John Bond passed along word from the CIA: Maxwell and his family were "in no danger."

The threat rang in Maxwell's ears. Eighteen months earlier, he was a rising bank executive with a wife, children, a nice home. Now, he was implicated in international intrigue, his career seemed ruined, and his boss was threatening his family.

Relations between Maxwell and his colleagues deteriorated. "In the hallway, they would turn their heads. They wouldn't even look at me." Where he once had gotten sterling performance reviews, he now received lackluster ratings.

Under more and more stress, Maxwell felt dangerously exposed if the bank or ATC were ever investigated. "I would have been hung," he says. "I would have been like that guy down in Atlanta at Banco Nazionale del Lavoro. I was set up."

In August 1985 he joined another Baltimore bank.

But in September a First National Bank official called to tell Maxwell that Associated Traders's "parent company" wanted to meet with him. When Maxwell refused, the official's response was ominous: "You'll be hearing from them."

At that point, Maxwell says, "My knees just crumbled." He suffered from cold sweats and trembling fits. A doctor told him his blood pressure was "sky-high." Unable to concentrate, Maxwell left his job and suffered a mild nervous breakdown.

GAGGED

At first, Maxwell consulted lawyers. Then in April 1986, out of work and unable to pay for aggressive legal representation, he contacted columnist Jack Anderson. After a six-month investigation, Anderson published a series of articles exposing ATC as a CIA front.

In 1988 Maxwell filed a $4 million lawsuit against First National Bank. His suit was stonewalled by bank officials. In a clumsy legal maneuver, they claimed that the bank did not have to comply with normal legal procedures because it was protecting national security. But the court ruled that, as a private entity, the bank could not hide behind such claims.

The CIA entered the case officially in December 1990. An affidavit from then-CIA Director William Webster asked for a sweeping gag order. Wrote Webster: "I hereby formally assert the privilege of Secrets of State to preclude from disclosure any information sought in this matter that would tend to confirm or deny the existence or nonexistence of any relationship or contacts between the CIA and either the First National Bank of Maryland or ATC."

After reviewing this affidavit, along with another, still-secret statement provided by Webster, U.S. Magistrate Judge Catherine C. Blake backed the CIA gag order in October 1991. In April 1992 the U.S. district court issued a protective order for First National, ATC, and the CIA. The U.S. Court of Appeals backed the lower court's action. In October 1993 Maxwell appealed to the Supreme Court, which in late January declined to hear the case.

Amazingly, the gag order not only prevents bank officials from testifying in court or offering any evidence linking First National or ATC to the CIA, it stops Maxwell as well. Outside the court, he is free to talk about everything he knows. But inside a courtroom, Maxwell cannot speak. And his lawyers cannot seek documents or question the parties in the case.

Not surprisingly, Maxwell feels betrayed by a system that he expected would protect him. "The entire judicial process has been a setup," he says.


Maxwell's is a small case linking an obscure Maryland bank with the CIA. But it raises big questions about the role of covert government operations in the 1980s.

SPOOKS AND BANKS

Maxwell's case is not the first to link banks with covert government operations during the 1980s. The CIA's involvement with the Bank of Credit and Commerce International has yet to be clarified. Ditto the scandal-plagued Atlanta branch of Italy's Banco Nazionale del Lavoro, which helped sell sophisticated weapons to Iraq.

Maxwell's own case could involve numerous U.S. financial institutions: If the appropriately named Mr. Bond is to be believed, 26 banks conducted overseas operations for the CIA.

Measured against the BCCI and BNL scandals, the CIA's involvement with First National Bank of Maryland may seem small. But it raises big questions: Were the transactions legitimate, or were they part of extralegal CIA adventures? Were the weapons shipped by Associated Traders used in sanctioned covert operations? Or did they end up in Nicaragua or Angola when the law banned CIA actions in those countries?

MAXWELL VS. "NATIONAL SECURITY"

Getting the other side of the story is difficult.

Contacted by phone, John Bond and Ronald Teather of First National declined to comment. So did the CIA.

Most of the principals from Associated Traders, which dissolved in 1988, have vanished. One former trustee, Maryland lawyer John Keating, said that he could not talk about ATC for "national security reasons." Asked whether ATC was a CIA front, he admitted, "Somewhere, back in the background, there may have been a government connection."

Keating acknowledges having represented CIA employees in divorce cases. In one case, a woman whose husband worked at the CIA sued for divorce. But when her lawyers questioned the man, the CIA stepped in with the state-secrets privilege, the same principle used against Maxwell. "It just closed everything down," said Keating. "That was the end of the case."

According to Keating, Maxwell's lawsuit will be similarly stymied. "A National Security Act shut-off order [is a] powerful act," he said. "Whether they are abusing it or not, I'm sure you'll never know."

WATCHED

Since Maxwell opened the Pandora's box of ATC, many demons have emerged to torment him.

His first lawyer, Baltimore attorney Thomas Dolina, was not on the case long when he was called by the bank's lawyer, Joseph Finnerty. Finnerty claimed to have members of the CIA, the FBI, and the Justice Department in his office. He said that Maxwell could face criminal charges for disclosing state secrets and that Dolina himself could be disbarred. (Finnerty denies making the threats.)

First National later offered Maxwell a $100,000 settlement, which he rejected. In the years since, Maxwell has been followed and once saw men photographing him with a telephoto lens near his home.

In 1990 a man came into the bar where Maxwell now works as a bartender, asked some questions about the case, and left $5 around a pen with a U.S. government insignia. "Just a little thing to let me know they're watching," Maxwell says.

And in 1991 Lynne Bernabei, Maxwell's current attorney, received a call from an Oklahoma man. He claimed that government agents had asked an acquaintance of his to set up Maxwell with drugs or a prostitute. The man declined the offer. Maxwell doesn't know whether any other attempts to discredit him have been made.

Maxwell now feels like he lives in a shadow world. His life, he says, is a "shambles." It is difficult for him to tell whether little incidents--like the time his car was ransacked while parked in his garage--are something more. Other banks won't consider him for a job. He and his family are under constant stress. "The kids would go out on dates, and if they weren't home by midnight I'd peer out the window and walk around," he says.

Bernabei says that if the CIA gets away with what it did to Bob Maxwell, the agency is "totally unaccountable."

"It would allow the CIA to escape responsibility for injuries they cause to private citizens they involve in their covert operations," she says. "It could happen to anyone."

Robert Dreyfuss is a Washington, D.C., writer.