Henry Hudson Knew Judge Would Sign
Shut-down Order in LaRouche Bankruptcy Case

The presidential campaign committee of Democrat Lyndon H. LaRouche, Jr. announced on Nov. 2, 1995, that documents recently obtained through the Freedom of Information Act strongly indicate that U.S. Attorney Henry Hudson and his assistants knew in advance that a U.S. bankruptcy judge would approve and sign an order directing the seizure and shutting down, in 1987, of three publishing companies which were part of the political movement associated with Lyndon H. LaRouche, Jr. The shutdown led directly to the fraudulent prosecution of LaRouche and associates by federal and state courts; LaRouche served five years in federal prison and five of his associates remain jailed in the state of Virginia. The text of the release follows.


Documents recently obtained through the Freedom of Information Act strongly indicate that U.S. Attorney Henry Hudson and his assistants knew in advance that a U.S. bankruptcy judge would approve and sign an order directing the seizure and shutting down, in 1987, of three publishing companies which were part of the political movement associated with Lyndon H. LaRouche, Jr.

In an action unprecedented in U.S. legal history, on April 20, 1987, Hudson filed petitions with the United States government as the sole petitioning creditor, seeking to put the three companies into involuntary bankruptcy.

In a secret, closed-door ex parte proceeding that same day, Judge Martin V. B. Bostetter signed orders directing the appointment of trustees, who were to seize all property of the three companies, and prevent them from conducting any business, which meant also to terminate payments to creditors, and to terminate loan repayments as well.

Pretext for Prosecution

In so doing, federal prosecutors were intent upon creating a fraudulent pretext for a criminal prosecution of LaRouche et al. They were knowingly setting up LaRouche and associates to be indicted on criminal charges, which falsely alleged that they had conspired to not repay loans made by political supporters to the three companies. Prosecutors had previously expressed concern over the weakness of their attempts to concoct a loan-fraud case, because of the likelihood of repayment of the loans. The illegal bankruptcy seizure prevented such repayments.

The LaRouche campaign committee has now obtained original drafts of the press release which Hudson ultimately issued on April 22, the day that the three companies were seized and padlocked. The drafts of the press release (one of which is written out in long-hand on a yellow legal pad) marked April 17--during the week before Judge Bostetter signed the seizure orders--include the following predictions:

"On Monday, April 20, 1987, Henry E. Hudson, United States Attorney for the Eastern District of Virginia, filed in the United States Bankruptcy Court for the Eastern District of Virginia three separate involuntary bankruptcy petitions against three publishing companies, headquartered in Leesburg, controlled and operated by political extremist Lyndon LaRouche.

"Contemporaneously with the filing of the petitions, the United States Attorney filed a motion for appointment of interim trustees to immediately seize the business and property of each debtor pending the Bankruptcy Court's determination whether to grant the involuntary petitions....

"On April 20, 1987, United States Bankruptcy Judge Martin V.B. Bostetter granted the motion and directed Acting United States Trustee Norman Oliver to appoint interim trustees to seize the debtors' property.

"On Tuesday morning, April 21, 1987, the trustees, with the assistance of United States Marshal Roger Ray, his deputies, and agents of the Federal Bureau of Investigation, seized the debtors' businesses and property. Concurrently, United States Marshals in several other states seized assets and property of the debtors...."

Telltale Code-Phrase

The characterization of LaRouche as a "political extremist" in the first two drafts is also notable. "Political extremist" is one of the code-phrases used by a group of major news media and other co-conspirators against LaRouche, headed by New York banker John Train, a member of the group of LaRouche political enemies known as the "Iran-Contra" group, comprised of (then) Vice President George Bush, Maj.-Gen. (ret.) Richard Secord, Oliver North, and John Train. In the third draft of the press release, this characterization was deleted.

Observers note that Hudson's and Schiller's confidence that the seizure orders would be signed and executed without a hitch, is all the more remarkable, because the United States government had never before in history acted as a petitioner to put someone into involuntary bankruptcy. Why were they so sure that the judge would agree to this extraordinary and unprecedented legal procedure, unless they already had been assured that the orders would be signed?

Ultimately, on Oct. 25, 1989, Judge Bostetter dismissed the government's petitions, holding that Hudson and his office had committed "fraud on the court." But by that time, LaRouche and six associates had already been convicted on the fraudulent "loan fraud" conspiracy charges and were serving sentences in federal prisons.

The judge who railroaded LaRouche to prison, Albert V. Bryan Jr., himself had personally issued a ruling upholding the secret April 20, 1987 ex parte proceeding, and he then perpetuated the coverup of the roles of the prosecutors and himself in setting up the criminal charges against LaRouche et al., by preventing any mention of the illegal bankruptcy seizure during the autumn 1988 Alexandria federal frameup trial of LaRouche and his six associates.