🚀 go-pugleaf

such=20
      names as <SPAN style=3D"BACKGROUND: #7fffd4"><B>Man-to-Man, Dream =
Boys,=20
      Ultimate First Class, Metrodate and Jovan.</B></SPAN>=20
      <P>In its own investigation of the male escort service raided in =
February=20
      and again May 18, The Times has obtained extensive financial =
records that=20
      reveal how the homosexual network handled its credit card and =
check=20
      cashing needs by using legitimate umbrella organizations in the =
<SPAN=20
      style=3D"BACKGROUND: #7fffd4"><B>Washington area, Florida, =
Kentucky and West=20
      Virginia.</B></SPAN>=20
      <P>Members of the law enforcement team investigating Professional=20
      Services, which includes the Secret Service and the Metropolitan =
Police,=20
      said a special federal grand jury is expected to hand up =
indictments based=20
      on violations of federal credit card statutes, mail fraud laws and =
banking=20
      regulations that bar illegal activities, such as prostitution.=20
      <P>Operators of the male escort service under investigation denied =
in=20
      dozens of interviews that they have broken any federal laws.=20
      <P>But credit card vouchers obtained by The Times reveal many =
instances of=20
      apparent double billing and what appear to be forged signatures.=20
      <P>As one law enforcement official explained, customers of such =
services=20
      are highly unlikely to call up credit card companies to complain =
that they=20
      had only one $150 session - not two - with one of Professional =
Services'=20
      prostitutes.=20
      <P>Call boys interviewed by The Times admitted that in the course =
of their=20
      work as "escorts" they regularly engaged in sex for hire with male =

      clients.=20
      <P>&nbsp;</P></FONT>
    <TD vAlign=3Dtop width=3D"50%"><FONT size=3D2>After paying =
"membership" fees in=20
      the $150 range, clients paid additional amounts for so-called =
"referrals"=20
      billed on an hourly basis. The vouchers reflected fees ranging =
from $60 to=20
      $1,100 for individual referrals. Most charges were in the $150 to =
$225=20
      range.=20
      <P>Clients and prostitutes said the amounts charged depend on the =
number=20
      of escorts procured (<SPAN style=3D"BACKGROUND: #7fffd4"><B> some =
clients=20
      hire several for big parties</B></SPAN>), the length of time =
prostitute=20
      services are used and the type of sexual service provided.=20
      <P><SPAN style=3D"BACKGROUND: #7fffd4"><B>Robert Chambers, who =
handled=20
      Professional Services' credit card processing, is a 35-year-old =
funeral=20
      director whose family owns and operates the Chambers Funeral Homes =

      throughout the Washington area.</B></SPAN>=20
      <P>Mr. Chambers used his family's funeral business to set up =
Professional=20
      Services' "sub-merchant" account with a Sovran Bank branch in =
Silver=20
      Spring. Credit card charges and checks were deposited in the =
Sovran=20
      account, while cash paid for escort services usually was deposited =
at=20
      other area banks, including Riggs, National Bank of Washington and =
First=20
      American.=20
      <P>These accounts were usually in the names of the escort =
operators -=20
      principally <SPAN style=3D"BACKGROUND: #7fffd4"><B>Henry W. =
Vinson, a=20
      28-year-old owner-dispatcher for the services, and Jimmy Mako, 27, =
who=20
      pleaded guilty to a misdemeanor drug charge stemming from the =
February=20
      police raid on the switchboard headquarters, 6004 34th Place=20
      NW.</B></SPAN>=20
      <P>Sovran canceled Professional Services' account after the =
comptroller of=20
      Chambers Funeral Home discovered the secret sex-for-hire card =
processing=20
      scheme. Mr. Chambers now funnels charge slips through another =
licensed=20
      credit card processing company, Executive Services, in Suitland.=20
      <P>Part of the regional escort network is directly linked to =
employees at=20
      dozens of hotels in the area, those interviewed said. Besides =
helping to=20
      arrange "special" rooms for clients, these hotel employees also =
help to=20
      expedite guest requests for male and female sex.=20
      <P>There also are special phone banks located in each of the =
hotels - some=20
      public pay phones and other private lines - reserved for the =
homosexual=20
      network. Telephone pagers are used extensively to send call boys =
from one=20
      liaison to another.=20
      <P>Operators of the homosexual escort ring confirmed that female=20
      prostitutes were occasionally provided if clients requested such =
services.=20

      <P>Among hundreds of charge vouchers obtained by The Times were =
those of=20
      about a half-dozen women who availed themselves of the male =
escorts.=20
      <P>Gay clubs throughout the Washington area are used by call boys =
to pick=20
      up clients. Many call boys also work at these clubs - some of them =
"strip"=20
      joints - and typically are recruited there by the escort services. =

      <P>Bars and clubs catering to a homosexual clientele include The=20
      Chesapeake House, Brass Rail, Knob Hill, The Follies, Lost and =
Found,=20
      Tracks, and La Cage Aux Follies.=20
      <P>Photo, This house, at 6004 34th Place NW in Washington, was the =

      switchboard center for a male-prostitution ring until it was =
raided Feb.=20
      28., By Gary M. Hopkins/The Washington=20
Times</P></FONT></TD></TR></TBODY></TABLE>
<P>=20
<HR>

<P><FONT size=3D2><B>Not for commercial use. Solely to be used for the =
educational=20
purposes of research and open discussion.</B></FONT>=20
<P>&nbsp;=20
<TABLE width=3D"100%">
  <TBODY>
  <TR>
    <TD vAlign=3Dtop width=3D"50%"><FONT face=3Darial color=3D#3366cc =
size=3D4>
      <CENTER><B>POWER BROKER SERVED DRUGS, SEX AT PARTIES BUGGED FOR =
BLACKMAIL=20
      </B></CENTER></FONT><FONT color=3D#000000 size=3D2>
      <CENTER><B>Michael Hedges and Jerry Seper The Washington Times; =
Final=20
      Section: A Page: A1 Friday, June 30, 1989</B></CENTER>
      <P><BR></FONT><FONT face=3Darial color=3D#3366cc =
size=3D4><B>C</B></FONT><FONT=20
      color=3D#000000 size=3D2><SPAN style=3D"BACKGROUND: =
#7fffd4"><B>raig J. Spence,=20
      an enigmatic figure who threw glittery parties for key officials =
of the=20
      Reagan and Bush administrations, media stars and top military =
officers,=20
      bugged the gatherings to compromise guests, provided cocaine, =
blackmailed=20
      some associates and spent up to $20,000 a month on male =
prostitutes,=20
      according to friends, acquaintances and records.</B></SPAN>=20
      <P>&nbsp;=20
      <TABLE cellPadding=3D20 width=3D200 align=3Dleft border=3D0>
        <TBODY>
        <TR>
          <TD>
            <HR>
            <FONT face=3Darial color=3D#3366cc><B>How a man whom even =
his closest=20
            friends describe as a flawed, malevolent personality managed =
to=20
            court Washington's biggest names is a quintessential =
Washington=20
            story.</B></FONT>=20
            <HR>
          </TD></TR></TBODY></TABLE>The 48-year-old D.C. power broker =
has been=20
      linked to a <SPAN style=3D"BACKGROUND: #7fffd4"><B>homosexual =
prostitution=20
      ring</B></SPAN> currently under investigation by the U.S. =
Attorney's=20
      Office. Its clients included several top government and business =
officials=20
      from Washington and abroad.=20
      <P><SPAN style=3D"BACKGROUND: #7fffd4"><B>Among the clients =
identified in=20
      hundreds of credit-card vouchers obtained by The Washington Times =
- and=20
      identified by male prostitutes and escort operators - are =
government=20
      officials, locally based U.S. military officers, businessmen, =
lawyers,=20
      bankers, congressional aides, media representatives and other=20
      professionals.</B></SPAN>=20
      <P><SPAN style=3D"BACKGROUND: #7fffd4"><B>Mr. Spence's influence =
appeared=20
      unlimited, aptly demonstrated by his ability to arrange midnight =
tours of=20
      the White House, according to three persons who said they took =
part in=20
      those tours.</B></SPAN>=20
      <P>"It was a show-the-flag time for Craig Spence," said one person =
who=20
      went on a July 3, 1988, tour that included two male prostitutes. =
<SPAN=20
      style=3D"BACKGROUND: #7fffd4"><B>"He just wanted everyone to know =
just how=20
      damned powerful he was," said the person. "And when we were =
strolling=20
      through the White House at 1 o'clock in the morning, we were=20
      believers."</B></SPAN>=20
      <P>One man who was on the tour but asked not to be named for fear =
it would=20
      damage his business said it was cleared by a uniformed Secret =
Service=20
      guard whom the man had seen attending Mr. Spence's parties as a =
bodyguard.=20

      <P>"For once in his life, Craig was doing something nice. We just =
thought,=20
      neat, we get a free midnight tour of the White House," the man =
said.=20
      Another person on the tour said the group walked through all the =
public=20
      areas of the White House and "even took pictures of ourselves in =
the=20
      barber's chair."=20
      <P><SPAN style=3D"BACKGROUND: #7fffd4"><B>After arriving in =
Washington in=20
      the late 1970s, Mr. Spence was hosting parties during the early =
Reagan=20
      years attended by, among others, journalists Eric Sevareid, Ted =
Koppel and=20
      William Safire; former CIA Director William Casey; the late John =
Mitchell,=20
      attorney general in the Nixon administration; conservative =
activist=20
      Phyllis Schlafly; Ambassador James Lilley; and Gen. Alfred M. =
Gray, the=20
      commandant of the Marine Corps.</B></SPAN>=20
      <P>Arnaud de Borchgrave, editor-in-chief of The Times, went to =
dinner once=20
      at Mr. Spence's home to honor Mr. Lilley.=20
      <P>Efforts to reach Mr. Spence in the past week were unsuccessful. =
He=20
      contacted The Washington Times yesterday in response to a =
telefaxed=20
      message but hung up when queried about his activities.=20
      <P>According to many current and former friends, Mr. Spence was a=20
      dangerous friend to cultivate. <SPAN=20
      style=3D"BACKGROUND: #7fffd4"><B>Several former associates said =
his house on=20
      Wyoming Avenue was bugged and had a secret two-way mirror, and =
that he=20
      attempted to ensnare visitors into compromising sexual encounters =
that he=20
      could then use as leverage.</B></SPAN>=20
      <P>One man described having a limousine sent to his home by Mr. =
Spence and=20
      being brought to a gathering at which several young men tried to =
become=20
      friendly with him. "I didn't bite; it's not my inclination," the =
man said.=20
      "But he used his homosexual network for all it was worth."=20
      <P>The man, a business associate of Mr. Spence who was on the =
White House=20
      tour, said: <SPAN style=3D"BACKGROUND: #7fffd4"><B>"He was =
blackmailing=20
      people. He was taping people and blackmailing them."</B></SPAN>=20
      <P>One former friend said he saw an 8-foot-long, two-way mirror=20
      overlooking the library of Mr. Spence's home which, he said, he =
was later=20
      told was used for "spying on guests."=20
      <P>Georgetown University law professor Richard Gordon said he was =
a close=20
      friend of Mr. Spence's until his "behavior began deteriorating =
quite=20
      markedly."=20
      <P>Mr. Gordon recalled being at a gathering at Mr. Spence's home =
and=20
      having a conversation with veteran NBC and CBS correspondent Liz =
Trotta.=20
      <P>"We were sitting in a corner, talking about our mutual concern =
about=20
      Craig's physical condition. He came down later and said he had =
been=20
      listening to us and didn't appreciate it at all," Mr. Gordon said. =

      <P>Ms. Trotta, contacted in New York City, yesterday confirmed Mr. =

      Gordon's comments and said it was "one in a series of incidents" =
in which=20
      she began to question Mr. Spence's emotional and physical =
stability.=20
      <P>"He was fragmenting right before our eyes," she said. "I was =
very=20
      concerned about him."=20
      <P>One former Reagan administration official who worked at the =
U.S.=20
      Information Agency and is an open homosexual said he went to =
private=20
      parties at Mr. Spence's home and saw a great deal of recording and =
taping=20
      equipment.=20
      <P>"It was my clear impression that the house was bugged," he =
said.=20
      Another man, an Air Force sergeant who worked for Mr. Spence as a=20
      bodyguard, said: "The house was definitely bugged. I can't say =
what he was=20
      doing with the information. I don't know that. But he was =
recording what=20
      occurred there."=20
      <P><SPAN style=3D"BACKGROUND: #7fffd4"><B>Several others confirmed =
that Mr.=20
      Spence had bragged on several occasions that he had his house =
bugged and=20
      that conversations between guests often had been =
overheard.</B></SPAN>=20
      They said Mr. Spence often would come down late to parties he =
hosted and=20
      told close associates that he had been listening to what was being =
said=20
      about him.=20
      <P><SPAN style=3D"BACKGROUND: #7fffd4"><B>Several people also said =
Mr.=20
      Spence boasted about getting control of the million-dollar home on =
Wyoming=20
      Avenue by blackmailing clients in Japan.</B></SPAN>=20
      <P>William Harbin, a former U.S. Foreign Service official who =
worked for=20
      Mr. Spence in the mid-1980s, said: "He pretty much blackmailed a =
Japanese=20
      client. He had represented this firm in Washington, the Policy =
Study=20
      Group.=20
      <P>"The Japanese put up the money for Spence to buy a big house on =
Wyoming=20
      Avenue," Mr. Harbin said. "I heard he later had a quarrel with =
this=20
      Japanese because he was really using this house to advance his own =

      purposes, not for the Japanese. But he threatened to expose that =
they had=20
      transferred the money illegally, so it made the Japanese back =
down."=20
      <P>Another longtime friend confirmed that Mr. Spence bragged about =
the=20
      Wyoming Avenue deal, saying he had beaten "a very rich, old-line =
Japanese=20
      family."=20
      <P><SPAN style=3D"BACKGROUND: #7fffd4"><B>Secret Service spokesman =
Bob Snow,=20
      when asked yesterday for records about Mr. Spence's visits to the =
White=20
      House, said only the White House counsel could authorize release =
of the=20
      material.</B></SPAN>=20
      <P>C. Boyden Gray, the White House counsel, said he did not know =
why Mr.=20
      Snow referred The Times to him, adding that he was unaware that =
his office=20
      was required to release such information. <SPAN=20
      style=3D"BACKGROUND: #7fffd4"><B>"I just don't know anything about =
that,"=20
      Mr. Gray said. "But maybe there's something I don't know=20
      about."</B></SPAN> Federal law enforcement authorities, including =
the=20
      Secret Service, involved in the probe of the homosexual =
prostitution ring=20
      have told prostitutes and their clients that a grand jury will =
deliberate=20
      over evidence gathered in the ongoing investigation throughout the =
summer.=20

      <P>Hundreds of credit-card vouchers, drawn on both corporate and =
personal=20
      accounts and made payable to the Washington-based escort service =
operated=20
      by the homosexual ring, have been examined by The Washington =
Times.=20
      <P>Mr. Spence, a former ABC-TV correspondent who covered the war =
in=20
      Vietnam, was one of the biggest spending clients of the homosexual =

      prostitution network, according to credit-card vouchers obtained =
by The=20
      Times. For example, on Oct. 5, 1988, he made four separate =
payments=20
      totaling $1,525 with his American Express card for male escorts =
from=20
      Professional Services Inc.=20
      <P>On. Oct. 8, he paid $600 for male escorts, and another $600 =
payment=20
      Oct. 20, the documents show. There were some months when Mr. =
Spence spent=20
      as much as $20,000 for male escorts hired to provide him sexual =
services,=20
      according to documents and interviews with prostitutes who served =
him.=20
      <P>Many of Mr. Spence's guests soured on his hospitality when his =
darker=20
      behavior emerged. A case in point is his relationship with former =
<SPAN=20
      style=3D"BACKGROUND: #7fffd4"><B>U.S. Attorney Joseph =
diGenova.</B></SPAN>=20
      <P>According to Mr. diGenova, he attended a few of Mr. Spence's =
parties=20
      both as U.S. attorney and after he left the government to enter =
private=20
      practice. He eventually traveled to Japan last December on a =
business trip=20
      with Mr. Spence and Wayne Bishop, chairman of the Washington law =
firm of=20
      Bishop, Cook, Purcell &amp; Reynolds, where Mr. diGenova works.=20
      <P>&nbsp;</P></FONT>
    <TD vAlign=3Dtop width=3D"50%"><FONT size=3D2><SPAN=20
      style=3D"BACKGROUND: #7fffd4"><B>"When I got back from Japan, some =
anonymous=20
      person suggested that he (Mr. Spence) might be using cocaine. =
Well, of=20
      course my antennae went up right away and I checked those rumors =
out . . .=20
      and found much to my surprise that people suspected the worst," =
Mr.=20
      diGenova said.</B></SPAN>=20
      <P>At that point, Mr. diGenova said, he severed his relationship =
with Mr.=20
      Spence. "When you compared it to his other eccentric behavior, it =
made=20
      sense. But I had no evidence whatsoever," he said.=20
      <P>Mr. diGenova said he never took his concern that Mr. Spence =
might be=20
      using drugs to authorities.=20
      <P>Others interviewed said they witnessed drug use and other =
crimes at=20
      parties thrown by Mr. Spence but also never shared their =
observations with=20
      law enforcement officials.=20
      <P>The saga of Mr. Spence, described by one friend as =
"Washington's Jay=20
      Gatsby," began unraveling when federal and D.C. police raided a =
male=20
      prostitution ring in Northwest Washington and discovered =
credit-card=20
      vouchers signed by Mr. Spence and others.=20
      <P>But for several years - even as publications such as The New =
York Times=20
      were describing Mr. Spence as Washington's ultimate power broker=20
      -acquaintences noticed bizarre behavior.=20
      <P><SPAN style=3D"BACKGROUND: #7fffd4"><B>Mr. Spence was generous =
with=20
      cocaine at his parties</B></SPAN>, according to several people who =
said=20
      they witnessed drug use at the exclusive Kalorama house.=20
      <P>"I know he was a coke freak," said the business associate who =
was on=20
      the White House tour. "A lot of people saw it. His behavior spoke =
for=20
      itself."=20
      <P><SPAN style=3D"BACKGROUND: #7fffd4"><B>Several friends said Mr. =
Spence=20
      bragged that U.S. military personnel, for whom he had built a =
gymnasium in=20
      El Salvador, had smuggled cocaine back to him when they returned =
to the=20
      United States.</B></SPAN>=20
      <P><SPAN style=3D"BACKGROUND: #7fffd4"><B>"I heard he was selling =
drugs, or=20
      smuggling drugs into the country from El Salvador," said a friend =
who=20
      worked closely with Mr. Spence.</B></SPAN> "He went down there two =
or=20
      three times or maybe more. He was trying to interest a Japanese =
firm with=20
      buying a fishery in El Salvador.=20
      <P>"I found out the United Nations had rejected a similar scheme; =
they=20
      found if you put more boats in there the fish would just get =
smaller. So I=20
      told him that it was no good," the former associate said.=20
      <P>U.S. Drug Enforcement Administration officials said this week =
they had=20
      no evidence of any such operation.=20
      <P>Others said the drugs came from a more mundane source - =
midlevel=20
      dealers in Northwest Washington.=20
      <P>How a man whom even his closest friends describe as a flawed,=20
      malevolent personality managed to court Washington's biggest names =
is a=20
      quintessential Washington story.=20
      <P>Mr. Spence arrived in Washington in the late 1970s. Even =
intimate=20
      friends said his depiction of his background was as shifting as =
his guest=20
      list. What can be confirmed is that he attended Syracuse =
University and=20
      worked as a journalist with ABC in Southeast Asia during the =
Vietnam War.=20
      <P>One former friend, who became acquainted with Mr. Spence in =
Tokyo, said=20
      that the latter had a "falling out" with ABC News because of his =
political=20
      views. The former friend said Mr. Spence was a hard-line =
conservative and=20
      was opposed to what he described as "the liberal treatment of the =
news by=20
      the network."=20
      <P>Mr. Spence made good contacts in Japan and among Chinese =
expatriates,=20
      often bragging of his close association with former Japanese Prime =

      Minister Yasuhiro Nakasone and appearing in public with a Chinese=20
      businessman who once served as an unofficial representative of =
Communist=20
      China in Washington, sources said.=20
      <P>The businessman said this week that he did not know exactly =
what work=20
      Mr. Spence did, but that he often bragged about his contacts with =
Japanese=20
      businessmen and political leaders, particularly Mr. Nakasone.=20
      <P><SPAN style=3D"BACKGROUND: #7fffd4"><B>He described Mr. Spence =
as=20
      "strange," saying that he often boasted that he was working for =
the CIA=20
      and on one occasion said he was going to disappear for awhile =
"because he=20
      had an important CIA assignment."</B></SPAN>=20
      <P><SPAN style=3D"BACKGROUND: #7fffd4"><B>According to the =
businessman, Mr.=20
      Spence told him that the CIA might "doublecross him," however, and =
kill=20
      him instead "and then to make it look like a suicide."</B></SPAN>=20
      <P>The businessman also said he attended a birthday bash for Roy =
Cohn at=20
      Mr. Spence's house. He said Mr. Casey was at the party. "One time =
he=20
      stormed into another party with a big, white hat and an entourage =
of=20
      security guards," the businessman said. "It was all rather =
bizarre."=20
      <P>Mr. Spence's trump card in courting the rich and famous =
apparently was=20
      his access to high-ranking orientals at a moment when Japan was =
flowering=20
      as an economic giant and relations with China were thawing.=20
      <P>"Craig had an interest in the Japanese economy," said Mr. =
Gordon. "He=20
      was very interested in breaking through the bureaucratic level and =
getting=20
      people to come to seminars.=20
      <P>"He developed a kind of genuine and effective influence among =
important=20
      doers and thinkers in Washington and from New York," Mr. Gordon =
said. "I=20
      met some interesting senators and representatives at his parties." =

      <P>He was doing extensive business with Japan in the early 1980s, =
some of=20
      which former Reagan administration officials said appeared to =
violate=20
      trade laws.=20
      <P>Mr. Gordon said he warned Mr. Spence of the need to be =
registered as a=20
      lobbyist, and documents show that in January 1985 he became a =
registered=20
      agent lobbying for Japanese businesses.=20
      <P>A January 1982 New York Times profile of Mr. Spence was =
headlined "Have=20
      Names, Will Open Right Doors." The article quoted a Washington =
Post=20
      columnist in 1980 saying of Mr. Spence: "Not since Ethel(D-) =
Kennedy used=20
      to give her famous Hickory Hill seminars for great minds of our =
times=20
      during the days of Camelot has anyone staged seminars successfully =
on a=20
      continuing social basis in Washington. That's what Craig Spence =
has been=20
      doing."=20
      <P>Mr. Spence was described in the New York Times as "something of =
a=20
      mystery man who dresses in Edwardian dandy style, a former =
television=20
      correspondent who now wears many hats, including international =
business=20
      consultant, party host, registered foreign agent and something =
called=20
      'research journalist.' "=20
      <P>Those who knew Mr. Spence best were astonished by his ability =
to court=20
      the rich and powerful.=20
      <P>"He conned people into going to parties - big people, Cabinet =
members=20
      and personalities and so forth," said Mr. Harbin, who wrote =
research=20
      papers that Mr. Spence peddled to Japanese clients.=20
      <P>"Everybody likes to go to a free party around here. He'd have a =

      photographer there, get his photo taken with a great man, and use =
that,"=20
      he said.=20
      <P>"He was quite secretive, but from what I could see these things =
had=20
      little or no substance," Mr. Harbin said. "Usually a grain of =
truth, but=20
      he'd build a pile of lies on top of it. Usually he'd start with a=20
      photograph of himself with some guy and build a lie around it that =
he was=20
      his top adviser. Nakasone was one."=20
      <P>Mr. Spence also bragged about social companions, telling =
friends that=20
      he had hosted Mr. Cohn, Rock Hudson and others at his Wyoming =
Avenue home.=20

      <P>The former Reagan administration aide said he decided to sever =
a=20
      friendship with Mr. Spence when he witnessed him trying to force =
his=20
      off-duty military bodyguards into homosexual acts.=20
      <P>"I'm openly gay myself," he said. "Most gays find that type of =
behavior=20
      reprehensible."=20
      <P>Several people who attended Mr. Spence's parties remarked at =
what one=20
      guest called "his personal honor guard." "I don't know where he =
got them,=20
      but he liked to surround himself with tall, handsome, stalwart =
young men.=20
      He liked to surround himself with decorations," one frequent guest =
said.=20
      <P>Mr. Spence has been living on Massachusetts Avenue in recent =
months,=20
      friends said. His legitimate business contacts have "one by one =
dropped=20
      away," said one close friend.=20
      <P>He has told a number of his friends that he plans to leave the =
country=20
      by Aug. 15. Mr. Spence also has said his health is failing.=20
      <P>"I can unhappily confirm that. He has been in ill health. I am =
not=20
      truly aware of what it is that is wrong with him," said Mr. =
Gordon.=20
      <P>=20
      <HR>

      <P><I>* Paul M. Rodriguez contributed to this report.</I>=20
      <HR>

      <P>Photo, Power broker Craig J. Spence demonstrated his influence =
by=20
      providing late night strolls through the White House for groups of =

      selected friends., By Richard Kozak/The Washington=20
  Times</P></FONT></TD></TR></TBODY></TABLE>
<P><!--end text-->
<HR>
<FONT size=3D2><B>Not for commercial use. Solely to be used for the =
educational=20
purposes of research and open discussion.</B></FONT>=20
<P>&nbsp;=20
<TABLE width=3D"100%">
  <TBODY>
  <TR>
    <TD vAlign=3Dtop width=3D"50%"><FONT face=3Darial color=3D#3366cc =
size=3D4>
      <CENTER><B>RNC CALLS SCANDAL A 'TRAGIC =
SITUATION'</B></CENTER></FONT><FONT=20
      color=3D#000000 size=3D2>
      <CENTER><B>George Archibald and Paul M. Rodriguez The Washington =
Times;=20
      Final Section: A Page: A1 Friday, June 30, 1989</B></CENTER>
      <P><BR></FONT><FONT face=3Darial color=3D#3366cc =
size=3D4><B>R</B></FONT><FONT=20
      color=3D#000000 size=3D2>epublican and conservative political =
leaders reacted=20
      cautiously yesterday to <SPAN style=3D"BACKGROUND: #7fffd4"><B>a =
report in=20
      The Washington Times that key Reagan and Bush administration =
officials are=20
      ensnared in a federal probe of homosexual prostitution.</B></SPAN> =

      <P>&nbsp;=20
      <TABLE cellPadding=3D20 width=3D200 align=3Dleft border=3D0>
        <TBODY>
        <TR>
          <TD>
            <HR>
            <FONT face=3Darial color=3D#3366cc><B>Rep. Barney Frank, =
Massachusetts=20
            Democrat and a self-proclaimed homosexual who several weeks =
ago=20
            threatened to reveal a list of Republican homosexuals in =
Congress,=20
            said he was "not surprised" by the revelations.</B></FONT>=20
            <HR>
          </TD></TR></TBODY></TABLE><SPAN style=3D"BACKGROUND: =
#7fffd4"><B>"There's no=20
      reason for cleaning anybody out (of office because they used =
homosexual=20
      prostitutes)," said Leslie Goodman, a spokeswoman for Republican =
National=20
      Committee Chairman Lee Atwater.</B></SPAN>=20
      <P>"It's a personal situation. It's a tragic situation if people =
have to=20
      resort to prostitutes," the GOP spokeswoman said. "But there's no =
standard=20
      for people in the federal government that's different than for the =
average=20
      Joe on the street."=20
      <P>However, <SPAN style=3D"BACKGROUND: #7fffd4"><B>a top Labor =
Department=20
      adviser to Secretary Elizabeth Dole resigned yesterday after =
acknowledging=20
      to The Times that he had procured male prostitutes and was =
subjected to=20
      blackmail threats by one of the call boys.</B></SPAN>=20
      <P>In a letter announcing his resignation as Mrs. Dole's political =

      personnel liaison to the White House, <SPAN=20
      style=3D"BACKGROUND: #7fffd4"><B>Paul R. Balach</B></SPAN> wrote: =
"I hereby=20
      resign my position this date due to the public disclosure of =
activities=20
      concerning my personal life."=20
      <P>Mr. Balach said in an interview late yesterday he was told by =
the=20
      department's solicitor, Robert Davis, he must either resign or be =
fired.=20
      He said he was not allowed to talk to Mrs. Dole about the matter.=20
      <P>"They said they reached this decision with a great deal of pain =
because=20
      I was a valued employee. But they thought that the cloud =
surrounding me=20
      would not allow me to continue to hold a political job in the=20
      administration," he said.=20
      <P>"I think they are protecting Elizabeth, and frankly I would do =
the same=20
      thing," Mr. Balach said. "I live paycheck to paycheck. They =
promised me=20
      that they would try and find me another position somewhere in the=20
      government, but I just don't know. . . . Somebody else is going to =
clean=20
      out my office. They didn't want me to come back into the office."=20
      <P>According to documents obtained by The Times, <SPAN=20
      style=3D"BACKGROUND: #7fffd4"><B>the homosexual prostitution ring =
includes=20
      not only Reagan and Bush administration officials but military =
officers,=20
      congressional aides and U.S. and foreign businessmen with close =
social=20
      ties to Washington's political elite.</B></SPAN>=20
      <P>U.S. Attorney Jay B. Stephens confirmed in a statement =
yesterday that=20
      his office "has been investigating allegations involving credit =
card=20
      fraud" following a Feb. 28 raid on the call boy ring's Northwest=20
      Washington headquarters. But Mr. Stephens refused to discuss the =
matter=20
      further.=20
      <P>A Justice Department spokesman said the investigation was being =
led by=20
      the Secret Service.=20
      <P>But the spokesman denied that the government was investigating =
the=20
      possibility that homosexuals who held senior posts during the =
Reagan=20
      administration were compromised by blackmail or by Soviet agents =
who may=20
      have used young male prostitutes for espionage purposes.=20
      <P>The White House distanced itself yesterday from reports that =
top-level=20
      Republican officeholders and Pentagon brass were involved in the=20
      homosexual prostitution ring.=20
      <P>&nbsp;</P></FONT>
    <TD vAlign=3Dtop width=3D"50%"><FONT size=3D2><SPAN=20
      style=3D"BACKGROUND: #7fffd4"><B>"I don't know anything about it," =
said=20
      White House spokesman Marlin Fitzwater. "Nothing at =
all."</B></SPAN>=20
      <P>At the Pentagon, spokesman Pete Williams, commenting on The =
Times'=20
      article, said he was unaware of any Defense Department =
investigation into=20
      credit card fraud or homosexual conduct by members of the =
military.=20
      <P>Democratic National Committee officials declined to comment on =
GOP=20
      involvement with the call boy ring.=20
      <P><SPAN style=3D"BACKGROUND: #7fffd4"><B>But Rep. Barney Frank,=20
      Massachusetts Democrat and a self-proclaimed homosexual who =
several weeks=20
      ago threatened to reveal a list of Republican homosexuals in =
Congress,=20
      said he was "not surprised" by the revelations.</B></SPAN>=20
      <P>Because almost all Republican homosexuals are "in the closet," =
Mr.=20
      Frank said, "there's an impression that there aren't any =
Republicans. . .=20
      . This is the proof of the prejudice in our community."=20
      <P>Bias that forces homosexuals to maintain secrecy about their =
sexual=20
      orientation is an "obvious waste of human talent," he said. =
"People ought=20
      to be judged by their work, not whether they are gay. The whole =
blackmail=20
      issue wouldn't exist if we didn't have this fear of homosexuals."=20
      <P>The National Gay &amp; Lesbian Task Force and the Human Rights =
Campaign=20
      Fund, a gay and lesbian civil rights group, echoed Mr. Frank's =
remarks.=20
      <P>"The Washington Times story is a rank attempt to sensationalize =
a fact=20
      that should come as no surprise to anybody: that there are gay =
people in=20
      the Republican Party and in this Republican administration," the =
National=20
      Gay &amp; Lesbian Task Force said in a statement. "The story The =
Times=20
      does not tell is the story of the repression and fear that still =
mars the=20
      lives of gay individuals in politics."=20
      <P>The group also challenged the possibility raised in The Times' =
story of=20
      <SPAN style=3D"BACKGROUND: #7fffd4"><B>threats to national =
security from the=20
      blackmail of homosexuals in sensitive government =
positions</B></SPAN>,=20
      saying there has never been "even one single documented case of=20
      gay-related espionage" in the past 40 years.=20
      <P>In Republican political circles, there is a clear division =
between=20
      those who want to clean out homosexuals from government and "more=20
      pragmatic types" who are tolerant of their private behavior but =
hate any=20
      kind of scandal that will hurt the party, said one close adviser =
to Mr.=20
      Atwater.=20
      <P>"The pragmatists want it (disclosures of the homosexual =
prostitution=20
      ring) to go away. They hope there's no more to come," the adviser =
said.=20
      <P>"I had no idea such stuff was going on," said Morton Blackwell, =

      president of The Leadership Institute, which gives political =
training to=20
      young Republicans.=20
      <P>"I think it is time to sit down and write a paper for young=20
      conservatives who are washed over by all of this propaganda saying =
some=20
      people are naturally, genetically irresistably inclined to this =
kind of=20
      (homosexual) behavior," Mr. Blackwell said.=20
      <P>"We Republicans stand for traditional values and cannot =
continue to=20
      stand if we fall significantly away from them," he said.=20
      <P>"If this (The Times' disclosures) proves to be true, then it =
would=20
      explain a certain resistance to pro-family policies on the part of =
the=20
      Reagan administration which were popular and in the interests of =
the=20
      administration," said Paul Weyrich, president of Coalitions for =
America.=20
      <P>"You can understand an administration's reluctance to get =
involved in=20
      something if they're going to have to pay dearly to be on the =
unpopular=20
      side of an issue," he said.=20
      <P>"But it is hard to understand why they would resist certain =
policy=20
      decisions which were popular with the public and which were in the =

      national interest: for example, treating AIDS as a public health =
issue and=20
      requiring testing, which was vehemently opposed at the policy =
level of the=20
      administration,."</P></FONT></TD></TR></TBODY></TABLE>
<P><FONT size=3D2><B>Not for commercial use. Solely to be used for the =
educational=20
purposes of research and open discussion.</B></FONT></P>
<P>&nbsp;=20
<TABLE width=3D"100%">
  <TBODY>
  <TR>
    <TD vAlign=3Dtop width=3D"50%"><FONT face=3Darial color=3D#3366cc =
size=3D4>
      <CENTER><B>White House mute on 'call boy' probe =
</B></CENTER></FONT><FONT=20
      color=3D#000000 size=3D2>
      <CENTER><B>Frank J. Murray The Washington Times; Part A; Pg.=20
      A1</B></CENTER>
      <CENTER><B>July 7, 1989, Friday, Final Edition</B></CENTER>
      <P><BR></FONT><FONT face=3Darial color=3D#3366cc =
size=3D4><B>A</B></FONT><FONT=20
      color=3D#000000 size=3D2>dministration <SPAN=20
      style=3D"BACKGROUND: #7fffd4"><B>officials continued yesterday to =
stonewall=20
      reporters on the growing federal "call boy" investigation, =
apparently=20
      hoping the scandal will fade before President Bush is asked his =
view of a=20
      late-night White House tour that reportedly included two male=20
      prostitutes.</B></SPAN>=20
      <P>&nbsp;=20
      <TABLE cellPadding=3D20 width=3D200 align=3Dleft border=3D0>
        <TBODY>
        <TR>
          <TD>
            <HR>
            <FONT face=3Darial color=3D#3366cc><B>"Mr. Bush knows about =
the story.=20
            Yes he does. He's aware of the story," said one White House =
source=20
            who, like virtually all the others, insisted on=20
            anonymity.</B></FONT>=20
            <HR>
          </TD></TR></TBODY></TABLE><SPAN style=3D"BACKGROUND: =
#7fffd4"><B>Treasury=20
      Secretary Nicholas Brady, who heads the Secret Service, =
reluctantly=20
      conceded yesterday at the White House that the agency is looking =
into the=20
      July 3, 1988, tour - one of several arranged by a Secret Service =
officer=20
      for lobbyist Craig J. Spence.</B></SPAN>=20
      <P>Meanwhile, White House sources confirmed that President Bush =
has=20
      followed the stories of the late-night visit and Mr. Spence's =
links to a=20
      homosexual prostitution ring under investigation by federal =
authorities=20
      since they were disclosed June 29 in The Washington Times. But top =

      officials won't discuss the stories' substance, reportedly even =
among=20
      themselves.=20
      <P><SPAN style=3D"BACKGROUND: #7fffd4"><B>"Mr. Bush knows about =
the story.=20
      Yes he does. He's aware of the story," said one White House source =
who,=20
      like virtually all the others, insisted on anonymity.</B></SPAN>=20
      <P>Press officers have rebuffed repeated requests to obtain Mr. =
Bush's=20
      reaction and decline to discuss investigations or fallout from the =

      disclosures.=20
      <P>"I don't have anything on that," said Deputy Press Secretary B. =
Jay=20
      Cooper, the latest member of the press office to respond.=20
      <P>"There's no gain in talking about it," explained an official =
who=20
      declined to be quoted by name. "It only makes the story grow and =
helps=20
      keep it alive."=20
      <P><SPAN style=3D"BACKGROUND: #7fffd4"><B>The president has not =
had "serious=20
      discussion" about the reports even with his most senior aides, =
including=20
      Chief of Staff John Sununu, according to another =
source.</B></SPAN>=20
      <P>Reports on the matter have been included in the Daily Press =
Summary, a=20
      comprehensive half-inch-thick digest of print and broadcast media =
stories=20
      and editorials prepared by a division of the White House press =
office for=20
      the president and aides throughout the complex.=20
      <P>Because the summary is an internal document, officials would =
not=20
      disclose its reports on the news stories. One official said, "I'm =
sure=20
      that the story was summarized, but the president also reads The =
Washington=20
      Times and The Washington Post."=20
      <P>Mr. Brady, the ranking administration official to speak =
publicly about=20
      the episode, appeared nonplussed when asked yesterday about =
Reginald A.=20
      deGueldre, a uniformed White House officer who moonlighted as Mr. =
Spence's=20
      bodyguard and arranged the late-night White House tours.=20
      <P>&nbsp;</P></FONT>
    <TD vAlign=3Dtop width=3D"50%"><FONT size=3D2>"Sir, were any Secret =
Service=20
      policies violated by Officer deGueldre's moonlighting relationship =
with=20
      Craig Spence, and, if so, what actions have you taken to correct =
that?" he=20
      was asked.=20
      <P>"Would you repeat that again?" Mr. Brady requested.=20
      <P>"Yes, sir, I'm talking about the <SPAN=20
      style=3D"BACKGROUND: #7fffd4"><B>UD [Uniformed Division] officer, =
Reginald=20
      deGueldre, who was working moonlighting for Craig Spence and who =
arranged=20
      the tours for him. I'm wondering if any Secret Service policies =
are=20
      violated by such moonlighting, and whether these visits to the =
White House=20
      are . . ."</B></SPAN>=20
      <P><SPAN style=3D"BACKGROUND: #7fffd4"><B>Mr. Brady interrupted at =
that=20
      point and said, "I can't give you a precise answer on that now. =
We'll=20
      certainly look into it."</B></SPAN>=20
      <P><SPAN style=3D"BACKGROUND: #7fffd4"><B>"You don't know if your =
own Secret=20
      Service is conducting an investigation into something that's been =
this=20
      prominent?" the secretary was then asked.</B></SPAN>=20
      <P>"I am sure they're looking into it," he said. "The nature of =
that=20
      investigation I cannot report to you at this time."=20
      <P>A Treasury Department spokeswoman said later, "The director of =
the=20
      Secret Service is looking into whether or not any policies have =
been=20
      violated" by the moonlighting or admission of outsiders to the =
White House=20
      compound.=20
      <P>She said neither Mr. Brady nor the Secret Service would comment =
on=20
      additional matters involved in a criminal investigation by the =
U.S.=20
      Attorney's Office of the homosexual prostitution ring that Mr. =
Spence=20
      patronized.=20
      <P><SPAN style=3D"BACKGROUND: #7fffd4"><B>White House spokesman =
Marlin=20
      Fitzwater and several of his deputies have said repeatedly that =
they do=20
      not know if Mr. Bush considered it appropriate for male =
prostitutes to be=20
      touring the White House at 1 a.m.</B></SPAN>=20
      <P>Yesterday, while talking informally to several reporters at the =
White=20
      House, Mr. Fitzwater parried one question this way: <SPAN=20
      style=3D"BACKGROUND: #7fffd4"><B>"What are they saying, that you =
should have=20
      sexual-preference checks on people that come into the White=20
      House?"</B></SPAN>=20
      <P>He also said, "We don't have any involvement that I know of."=20
      <P>Although he has talked repeatedly to individual reporters, =
including=20
      those for The Washington Times, Mr. Fitzwater has not held a =
general=20
      briefing since before the prostitution ring stories broke, largely =
because=20
      of the holiday weekend and because administration experts gave =
briefings=20
      on Mr. Bush's European trip, which begins Sunday.=20
      <P>The last of those briefings was scheduled for today, but Mr. =
Fitzwater=20
      reportedly was considering holding a general briefing as well, his =
first=20
      in nine days.=20
      <P>Mr. Fitzwater and his staff have declined consistently to say =
if they=20
      would take the question to Mr. Bush, a practice done only rarely =
and=20
      generally only on matters they expect the president might be =
willing to=20
      discuss.=20
      <P>One senior official, who insisted on anonymity, said it was =
unlikely=20
      any staff member would ask Mr. Bush such a question, discounting =
any=20
      threats to security and portraying it as a sordid sex matter =
beneath=20
      presidential dignity.=20
      <P>Photo, Treasury Secretary Nicholas Brady concedes a probe is =
under=20
      way., Photo by Kevin T. Gilbert/The Washington=20
  Times,</P></FONT></TD></TR></TBODY></TABLE>
<HR>

<P>&nbsp;=20
<TABLE width=3D"100%">
  <TBODY>
  <TR>
    <TD vAlign=3Dtop width=3D"50%"><FONT face=3Darial color=3D#3366cc =
size=3D4>
      <CENTER><B>Spence was target before raid on ring =
</B></CENTER></FONT><FONT=20
      color=3D#000000 size=3D2>
      <CENTER><B>Jerry Seper, and Michael Hedges The Washington Times; =
Part A;=20
      Pg. A1 July 10, 1989, Monday, Final Edition; Correction=20
      Appended</B></CENTER>
      <P><BR></FONT><FONT face=3Darial color=3D#3366cc =
size=3D4><B>C</B></FONT><FONT=20
      color=3D#000000 size=3D2>raig J. Spence, the Washington lobbyist =
and power=20
      broker, was the subject of a Secret Service investigation even =
before a=20
      February raid on a homosexual prostitution ring to which he has =
been=20
      linked, The Washington Times has learned.=20
      <P>&nbsp;=20
      <TABLE cellPadding=3D20 width=3D200 align=3Dleft border=3D0>
        <TBODY>
        <TR>
          <TD>
            <HR>
            <FONT face=3Darial color=3D#3366cc><B>Mr. Spence arranged at =
least four=20
            midnight tours of the White House, including one June 29, =
1988, on=20
            which he took with him a 15-year-old boy whom he falsely =
identified=20
            as his son.</B></FONT>=20
            <HR>
          </TD></TR></TBODY></TABLE>The Secret Service last week =
expanded its=20
      investigation with inquiries about <SPAN=20
      style=3D"BACKGROUND: #7fffd4"><B>friends and associates of Mr.=20
      Spence.</B></SPAN>=20
      <P><SPAN style=3D"BACKGROUND: #7fffd4"><B>Two of those friends are =
former=20
      U.S. Attorney Joseph diGenova and his wife, Victoria Toensing, a =
former=20
      deputy assistant attorney general for the Justice Department's =
criminal=20
      division.</B></SPAN>=20
      <P>During interviews last week with friends and associates of Mr. =
Spence,=20
      the Secret Service made copies of photographs from a July 4, 1988, =
party=20
      showing him mugging for the camera with Mr. diGenova and Miss =
Toensing,=20
      who in one photo is draped in an American flag.=20
      <P><SPAN style=3D"BACKGROUND: #7fffd4"><B>It was on that same =
weekend that=20
      Mr. Spence arranged a 1 a.m. tour of the White House, which one=20
      participant said included two male prostitutes.</B></SPAN>=20
      <P><SPAN style=3D"BACKGROUND: #7fffd4"><B>The Secret Service also =
wants to=20
      talk to Mr. Spence, but has been unable to locate him,</B></SPAN>=20
      according to persons the agents have interviewed.=20
      <P>Mr. diGenova couldn't be reached yesterday for comment. He has =
been=20
      interviewed twice by The Times over the past two weeks. In the =
first=20
      conversation, he described a fleeting contact with Mr. Spence =
which, he=20
      said, was based solely on mutual business interests.=20
      <P>In a second conversation, he said he attended a few of Mr. =
Spence's=20
      parties, as U.S. attorney and later after he left the government =
to enter=20
      private law practice. He eventually traveled to Japan last =
December on a=20
      business trip with Mr. Spence and Wayne Bishop, chairman of the =
Washington=20
      law firm of Bishop, Cook, Purcell &amp; Reynolds, where Mr. =
diGenova=20
      works. Business contacts made on the trip proved fruitful and are =
still=20
      being pursued, he said.=20
      <P>"When I got back from Japan, some anonymous person suggested =
that he=20
      [Mr. Spence] might be using cocaine. Well, of course my antennae =
went up=20
      right away, and I checked those rumors out . . . and found much to =
my=20
      surprise that people suspected the worst," Mr. diGenova said.=20
      <P>At that point, Mr. diGenova said, he severed his relationship =
with Mr.=20
      Spence. He said he didn't report his findings or concerns to =
authorities.=20
      <P>Although the Secret Service hasn't said what sparked its =
interest in=20
      Mr. Spence, one of the persons questioned by the Secret Service =
said=20
      investigators appeared to be "interested" in the connections the =
lobbyist=20
      had made.=20
      <P>The Secret Service was the lead agency in a Feb. 28 raid on a =
house on=20
      34th Place NW used by a homosexual prostitution ring, a ring with =
which=20
      Mr. Spence spent up to $20,000 a month, according to call boys, =
his=20
      friends and documents obtained by The Times.=20
      <P>The federal investigation, headed by the office of U.S. =
Attorney Jay=20
      Stephens and conducted by Secret Service agents, appears to be =
aimed at=20
      determining whether Reagan and Bush administration officials and =
others=20
      were compromised by Mr. Spence, through the use of female and male =

      prostitutes and with electronic audio and video eavesdropping at =
parties=20
      at his house in the fashionable Kalorama neighborhood in Northwest =

      Washington.=20
      <P>Another focus of the probe, persons interviewed by the Secret =
Service=20
      have told this newspaper, is whether White House security was =
compromised=20
      by the late-night tours arranged by Mr. Spence.=20
      <P>Mr. Stephens has said only that his office is investigating =
"possible=20
      credit-card fraud" in connection with arrests made in the 34th =
Place raid.=20
      But numerous sources have told The Times that the Secret Service =
is asking=20
      about Mr. Spence's activities.=20
      <P><SPAN style=3D"BACKGROUND: #7fffd4"><B>Secret Service agents on =
Friday=20
      also asked a former Spence colleague detailed questions about =
attempts by=20
      the lobbyist to obtain information about the Delta Force, an elite =
U.S.=20
      commando team involved in top-secret military =
operations.</B></SPAN>=20
      <P>The former friend said <SPAN style=3D"BACKGROUND: =
#7fffd4"><B>Mr. Spence=20
      had given a gold Rolex watch to a highly decorated Vietnam veteran =
who is=20
      now associated with Army anti-terrorist units. Later, according to =
the=20
      former friend, Mr. Spence alluded to the gift of the watch and =
asked the=20
      veteran detailed questions about the Delta Force =
operations.</B></SPAN>=20
      <P><SPAN style=3D"BACKGROUND: #7fffd4"><B>The Vietnam veteran was =
one of six=20
      persons on the July 3 White House tour</B></SPAN>, arranged by Mr. =
Spence.=20
      A uniformed Secret Service guard, who admitted the group to the =
White=20
      House and served as an unofficial host, also told The Times that =
he had=20
      received a gold Rolex watch worth about $8,000 from Mr. Spence but =
said=20
      Mr. Spence had asked for nothing in return.=20
      <P>Mr. Spence collected key officials of the Reagan and Bush=20
      administrations, media celebrities and high-ranking military =
officers,=20
      among others, for his glittery dinner parties at his Kalorama =
home.=20
      According to friends, visitors to Mr. Spence's Wyoming Avenue NW =
house and=20
      records, the host eavesdropped on some gatherings to compromise =
guests and=20
      blackmailed some associates with threats to disclose their =
indiscretions.=20
      <P>&nbsp;</P></FONT>
    <TD vAlign=3Dtop width=3D"50%"><FONT size=3D2>Efforts to reach Mr. =
Spence during=20
      the past three weeks have been unsuccesful. He telephoned The =
Times on=20
      June 29 in response to a telefaxed message but hung up when asked =
about=20
      his activities. His fax machine number has since been =
disconnected.=20
      <P>Mr. diGenova was nominated by President Reagan to be U.S. =
attorney in=20
      1983. Prior to that, he was an assistant U.S. attorney in the =
Washington=20
      office, chief counsel and staff director of the Senate Rules =
Committee and=20
      chief minority counsel for the Senate Judiciary Committee.=20
      <P>In 1981, as chief counsel for the Senate Rules Committee, Mr. =
diGenova=20
      was responsible for overseeing the Reagan transition after =
Republicans=20
      gained control of the Senate in the 1980 elections. From June 1975 =
to=20
      April 1976, Mr. diGenova was counsel to the Senate Select =
Committee on=20
      Intelligence, the so-called Church Committee that investigated =
allegations=20
      of CIA and FBI wrongdoing.=20
      <P>Mr. diGenova announced his resignation as U.S. attorney in =
January=20
      1988, and he left office to begin his private practice on March 1. =

      <P>Miss Toensing, who also is in private practice, was chief =
counsel for=20
      the Senate Select Committee on Intelligence from 1981 to 1984 when =
she=20
      resigned to join the Justice Department as a deputy assistant =
attorney=20
      general.=20
      <P>At Justice, she headed the criminal division's procurement =
fraud unit=20
      and was instrumental in a number of high-profile indictments, =
including=20
      several involving General Dynamics. She also was responsible for =
the=20
      investigation and prosecution of terrorists.=20
      <P>A number of photographs, including more than a dozen from the 1 =
a.m.=20
      White House tour, were taken over the July Fourth weekend in 1988 =
by a=20
      participant in Mr. Spence's revelries. The photos, copies of which =
were=20
      obtained last week by The Times, have been reviewed by the Secret =
Service.=20

      <P>Of the several snapshots of the July 4, 1988, tour reviewed by =
the=20
      Secret Service, only two - both of which included Mr. diGenova and =
his=20
      wife - were copied.=20
      <P>Craig Spence was a registered lobbyist for several Japanese =
firms=20
      through 1987 and established close friendships with a number of =
leading=20
      Japanese politicians, including Motoo Shiina, considered by Tokyo =
analysts=20
      to be an inside favorite to replace scandal-plagued Sousuke Uno as =
prime=20
      minister.=20
      <P>Mr. Spence and Mr. Shiina were embroiled in a real estate deal=20
      involving the house in Kalorama, a two-story Victorian showpiece =
valued=20
      last year by real estate agents at $1.15 million.=20
      <P>By the time a lawsuit filed by Mr. Shiina over the property was =

      settled, the Japanese official had admitted in court papers to =
giving Mr.=20
      Spence $345,000 in cash.=20
      <P><SPAN style=3D"BACKGROUND: #7fffd4"><B>Mr. Spence has told =
several=20
      current and former friends that he obtained the money to buy the =
house by=20
      blackmailing Mr. Shiina. Mr. Shiina has denied he was blackmailed =
by Mr.=20
      Spence.</B></SPAN>=20
      <P>The lobbyist moved in November 1988 from the Kalorama house, on =
Wyoming=20
      Avenue, to an apartment on Massachusetts Avenue NW, but apparently =
his=20
      operations remained unchanged.=20
      <P>A female prostitute who worked for the escort service that =
supplied Mr.=20
      Spence with call boys, said he hired her to have sex with young =
military=20
      men in his part-time employ.=20
      <P>The prostitute, describing herself as retired, said Mr. Spence =
ordered=20
      her to engage in those assignations in certain specific locations =
in his=20
      Massachusetts Avenue apartment, enabling him to eavesdrop on the=20
      encounters. One of her clients, an enlisted man stationed at a =
local Army=20
      base, confirmed that he worked for Mr. Spence, and the =
prostitute's=20
      account.=20
      <P><SPAN style=3D"BACKGROUND: #7fffd4"><B>"Some of the men were =
married,"=20
      she said. "They told me he was using what I did with them against=20
      them."</B></SPAN>=20
      <P>Once, Mr. Spence's influence with the Washington power elite =
appeared=20
      almost limitless, demonstrated by his ability to arrange midnight =
tours of=20
      the White House. <SPAN style=3D"BACKGROUND: #7fffd4"><B>The Times =
has=20
      confirmed that Mr. Spence arranged at least four midnight tours of =
the=20
      White House, including one June 29, 1988, on which he took with =
him a=20
      15-year-old boy whom he falsely identified as his son.</B></SPAN>=20
      <P>One man Mr. Spence apparently cultivated was a uniformed Secret =
Service=20
      officer assigned to the midnight shift at the White House. The =
officer,=20
      Reginald A. deGueldre, was interrogated for more than 10 hours =
last week=20
      about his association with Mr. Spence. Five Secret Service agents, =
armed=20
      with search warrants, searched his house for nearly two hours =
Friday=20
      night, although they wouldn't say what they were looking for. The =
agents=20
      seized several photographs from Mr. deGueldre's home.=20
      <P>Mr. deGueldre said he has been told he will be called to =
testify before=20
      a federal grand jury. According to one law enforcement official, =
Mr.=20
      deGueldre failed the portion of a polygraph test involving favors =
he may=20
      have done for Mr. Spence.=20
      <P>Photo, In a snapshot copied by the Secret Service, Craig J. =
Spence=20
      (right) and former U.S. Attorney Joseph diGenova watch Mr. =
diGenova's=20
      wife, former Deputy Assistant Attorney General Victoria Toensing, =
clown at=20
      a party.; Photo, Reginald A. deGauldre, a uniformed Secret Service =

      officer, holds the door to the White House open for two of the six =
persons=20
      who were given a tour at 1 a.m. on July 3, 1988. The tour, =
arranged by=20
      Craig J. Spence, is the subject of a Secret Service probe. The =
photo was=20
      taken by another tour pa[rticipant.]=20
      <P>CORRECTION-DATE: July 14, 1989, Friday, Final Edition=20
      <P>CORRECTION:=20
      <P>Due to an editing error, a story Monday in The Washington Times =

      incorrectly said that photographs of former U.S. Attorney Joseph =
diGenova=20
      and his wife, Victoria Toensing, an ex-deputy assistant attorney =
general,=20
      were taken during a July 3, 1988, tour of the White House arranged =
by=20
      former Washington lobbyist Craig J. Spence.=20
      <P>Mr. diGenova and Ms. Toensing did not go on the July 3 tour, =
which,=20
      according to one participant included two male prositutes. =
However, the=20
      couple did attend a party at Mr. Spence's house on the same =
weekend,=20
      during which the photographs were =
taken.</P></FONT></TD></TR></TBODY></TABLE>
<HR>

<P>&nbsp;=20
<TABLE width=3D"100%">
  <TBODY>
  <TR>
    <TD vAlign=3Dtop width=3D"50%"><FONT face=3Darial color=3D#3366cc =
size=3D4>
      <CENTER><B>Spence ma[y] be Shiina's downfall =
</B></CENTER></FONT><FONT=20
      color=3D#000000 size=3D2>
      <CENTER><B>Edward Neilan The Washington Times, Part A; Pg. A1 July =
18,=20
      1989, Tuesday, Final Edition</B></CENTER>
      <P>TOKYO<BR>apanese nuclear-physicist-turned-politician <SPAN=20
      style=3D"BACKGROUND: #7fffd4"><B>Motoo Shiina</B></SPAN> has been =
described=20
      here as "a good friend of the United States" - and as a shrewd =
businessman=20
      who may have passed U.S. aerospace secrets to the Soviet Union.=20
      <P>&nbsp;=20
      <TABLE cellPadding=3D20 width=3D200 align=3Dleft border=3D0>
        <TBODY>
        <TR>
          <TD>
            <HR>
            <FONT face=3Darial color=3D#3366cc><B>The magazine "Shukan =
Shincho," a=20
            popular weekly, raised past allegations that Mr. Shiina =
leaked=20
            sensitive U.S. information to the Soviet Union - allegations =
the=20
            magazine said have never been explained.</B></FONT>=20
            <HR>
          </TD></TR></TBODY></TABLE>Mr. Shiina, 54, a member of Japan's =
lower House=20
      of Representatives, has been keeping an extremely low profile =
lately amid=20
      a swirling scandal involving his relationship with Craig J. =
Spence, a=20
      onetime U.S. lobbyist for Japan and business associate of Mr. =
Shiina's.=20
      <P>Mr. Shiina has declined to answer telephone inquiries on his =
dealings=20
      with Mr. Spence, but has responded cautiously to direct questions =
through=20
      a lawyer, Chikahiko Soda. <SPAN style=3D"BACKGROUND: =
#7fffd4"><B>The=20
      questions have dealt mainly with a loan by Mr. Shiina to Mr. =
Spence to=20
      purchase the Wyoming Avenue NW house where homosexual parties took =

      place.</B></SPAN>=20
      <P><SPAN style=3D"BACKGROUND: #7fffd4"><B>"If his [Mr. Shiina's] =
involvement=20
      in any of this is true, then it would create a serious political =
problem=20
      for Shiina and his political life will probably be damaged =
considerably,"=20
      said Hisao Imai, a well-known Japanese political =
commentator.</B></SPAN>=20
      <P>Mr. Imai, head of the Japan Commentators Association and a =
former=20
      political editor of Sankei Shimbun newspaper, said yesterday that =
there is=20
      hope among younger ruling Liberal Democratic Party members that =
Mr. Shiina=20
      will be a future party leader or even prime minister.=20
      <P>"If we lose him, this is a great loss not only for the LDP [the =
ruling=20
      Liberal Democratic Party] but for the nation," Mr. Imai said.=20
      <P>"The reason that Mr. Shiina is touted as a rising star is that =
he has=20
      been previously untainted by any scandal and he is an =
internationalist,"=20
      said another political commentator, Kan Ito.=20
      <P>With his own independent style of diplomacy he has established =
himself=20
      as a leading expert on U.S.-Japan relations, analysts said.=20
      <P><SPAN style=3D"BACKGROUND: #7fffd4"><B>Although several Diet =
members=20
      speaking anonymously yesterday described Mr. Shiina as a "true=20
      internationalist" and "good friend of the United States," one =
Japanese=20
      magazine came close to calling him a spy for the Soviet =
Union.</B></SPAN>=20
      <P><SPAN style=3D"BACKGROUND: #7fffd4"><B>The magazine "Shukan =
Shincho," a=20
      popular weekly, raised past allegations that Mr. Shiina leaked =
sensitive=20
      U.S. information to the Soviet Union - allegations the magazine =
said have=20
      never been explained.</B></SPAN>=20
      <P>The magazine quoted a newsman covering the Japan Defense Agency =
as=20
      saying that General Dynamics Corp. in 1979 allowed Mr. Shiina to=20
      photograph on microfilm specifications of the new F-16 fighter.=20
      <P>In exchange, the newsman was quoted as saying, Mr. Shiina =
agreed to=20
      lobby for the company's involvement in the joint U.S.-Japan =