INSLAW

INSLAW, Inc. is a software company founded by William A. Hamilton and Nancy Hamilton as the commercial successor to the Institute for Law and Social Research (ILSR), a Washington, D.C. non-profit think tank that originally developed the PROMIS (Prosecutor's Management Information System) software under grants from the Law Enforcement Assistance Administration. The company became the center of the PROMIS Software Scandal following its allegation that the U.S. Department of Justice systematically stole its proprietary software, drove it into bankruptcy, and distributed modified versions internationally to foreign intelligence agencies.

Origins: The Institute for Law and Social Research

The Institute for Law and Social Research (ILSR) was incorporated as a nonprofit corporation on October 15, 1973, by William A. Hamilton and Dean C. Merrill at 1125 15th Street, N.W., Suite 6000, Washington, D.C. Hamilton had previously served as a senior consultant at Peat, Marwick, Mitchell & Co and was a former NSA analyst who had served as project manager for the original PROMIS development effort funded by LEAA beginning in 1969. ILSR received ongoing LEAA funding to serve as the steward of the PROMIS software, to enhance it for adoption by other jurisdictions, and to conduct empirical criminal justice research using the data the system generated.¹

C. Madison Brewer, who later became the DOJ project manager for INSLAW's federal implementation contract, served as ILSR's General Counsel from November 1974 through April 1976. His subsequent role administering the same software he had once helped protect on behalf of INSLAW became a central issue in the litigation that followed.²

PROMIS Research Project

Under three successive LEAA and National Institute of Justice grants (74-NI-99-0008, 75-NI-99-0111, and 76-NI-99-0118), ILSR conducted a multi-year empirical research initiative using PROMIS data to analyze approximately 100,000 "street crime" cases processed through the District of Columbia court system over a six-year period. Researchers on the project included S.H. Brounstein, K.B. Brosi, S.J. Cox, J. Deroy, W.D. Falcon, K. Falkner, and B.E. Forst. The project produced 17 published reports, with topics spanning repeat offenders, robbery and burglary prosecution, sexual assault prosecution, recidivism prediction, plea bargaining, pretrial release decisions, court delay, geographic and demographic crime patterns, processing of female defendants, and sentencing practices. Separately, ILSR published 21 operational PROMIS Briefing Papers covering implementation and system design for prospective adopting jurisdictions.⁵

Transition to For-Profit: INSLAW, Inc.

When the Reagan administration took office in January 1981 and accelerated cuts to LEAA funding, Hamilton reorganized the enterprise as a for-profit corporation. INSLAW, Inc. was incorporated in Delaware in January 1981, with ILSR's assets transferred to the new entity. Hamilton and Nancy Hamilton held ownership of the company. Dean C. Merrill continued as a Vice President through at least April 1982. Outside legal counsel included Harvey G. Sherzer as government contracts attorney and Roderick Hills to advise on intellectual property protections for INSLAW's proprietary software enhancements.¹²

The DOJ Contract

In March 1982, INSLAW signed a three-year, $10 million contract with the DOJ's Executive Office for United States Attorneys to install PROMIS in 20 large U.S. Attorneys' offices and word-processor systems in 74 smaller ones. The contract specified installation of a public-domain version of PROMIS; however, INSLAW argued the version it delivered incorporated substantial proprietary enhancements developed with private capital after May 1981, including a relational database structure and recidivism-risk assessment capabilities. DOJ maintained the contract entitled it only to the public-domain base version.¹²

C. Madison Brewer was assigned as the EOUSA project manager for the contract, a conflict of interest noted by Senate investigators given his prior tenure as ILSR's general counsel. Contract administrator Peter Videnieks took consistently adversarial positions on INSLAW's proprietary claims throughout the contract period. On April 11, 1983, Videnieks executed Modification 12 to the contract with INSLAW, which restricted DOJ from distributing PROMIS "beyond the Executive Office for United States Attorneys, and to the 94 United States Attorneys' Offices covered by the contract, pending resolution" of the rights dispute. Nine days later, on April 20, 1983, INSLAW delivered the VAX-platform version of enhanced PROMIS under that modification.²

DOJ withheld advance payments beginning in November 1982, citing a contractual violation after INSLAW disclosed it had pledged government invoices to the Bank of Bethesda as collateral for a line of credit. INSLAW alleged the withheld payments were pretextual, designed to exacerbate a financial crisis the Department had helped engineer. Under continuing financial duress, INSLAW filed for Chapter 11 bankruptcy protection in February 1985.¹²

Lead Counsel Controversy

INSLAW's lead litigation counsel, Leigh Ratiner of the Washington firm Dickstein, Shapiro & Morin, was dismissed by his firm during the litigation under disputed circumstances. Hamilton alleged that Robert Maxwell had contributed $600,000 from a joint U.S.-Israeli intelligence fund to secure Ratiner's removal after Maxwell learned that Ratiner's aggressive litigation strategy threatened to expose the international distribution of enhanced PROMIS. The dismissal occurred following a meeting between Dickstein partner Leonard Garment and Deputy Attorney General Arnold Burns. Ratiner subsequently settled a wrongful dismissal suit against his firm for $600,000. The Bua Report found no credible evidence supporting Hamilton's account of Maxwell's involvement.²⁴

Bankruptcy and Litigation History

Bankruptcy Judge George Francis Bason, Jr. presided over two landmark proceedings in the INSLAW case. In June 1987, he found that DOJ had "unlawfully, intentionally and willfully" attempted to convert INSLAW's Chapter 11 reorganization into a Chapter 7 liquidation "without justification and by improper means," based in part on testimony from DOJ official Anthony Pasciuto, who stated that DOJ director Thomas Stanton had pressured U.S. Trustee Edward White to force the company into liquidation. In September 1987, after a two-week liability trial, Bason ruled that DOJ had "taken, converted, stole, INSLAW's enhanced PROMIS by trickery, fraud, and deceit," awarding approximately $6.8 million in damages and attorneys' fees.¹

The D.C. Circuit Court affirmed Bason's ruling in November 1989, with Judge William Bryant finding "convincing, perhaps compelling support" for the bankruptcy court's conclusions. The Court of Appeals reversed all lower court rulings in May 1991 on jurisdictional grounds, finding the bankruptcy court lacked jurisdiction because DOJ held PROMIS under a claim of right at the time of the bankruptcy filing. The Supreme Court declined review.²

The Senate Permanent Subcommittee on Investigations (PSI) issued a report in September 1989 finding "no proof" that Lowell Jensen and Edwin Meese had conspired to ruin INSLAW or steal its software. The Senate report nonetheless found that DOJ official Thomas Stanton had improperly sought special handling for INSLAW's bankruptcy and criticized the Department for placing Brewer in charge of the implementation contract given his prior employment by INSLAW.³

The House Judiciary Committee, chaired by Representative Jack Brooks, conducted a three-year investigation from 1989 to 1992. Its September 1992 report (House Report 102-857) found "strong evidence...that the Department of Justice 'acted willfully and fraudulently,' and 'took, converted and stole,' Inslaw's Enhanced PROMIS by 'trickery fraud and deceit.'" A key basis for this conclusion was testimony from Deputy Attorney General Arnold Burns, who had told DOJ's Office of Professional Responsibility in 1986 that INSLAW's proprietary rights claim was "legitimate" and that the government "would probably lose the case in court on this issue," yet DOJ continued litigating against INSLAW for another decade.¹

Special Counsel Nicholas J. Bua issued a 267-page report in March 1993 finding no credible evidence that any DOJ official had committed criminal wrongdoing in connection with the INSLAW matter. The Senate subsequently referred INSLAW's remaining claims to the U.S. Court of Federal Claims in May 1995. Judge Christine Miller ruled on July 31, 1997, that all versions of PROMIS were in the public domain and that the government had always been entitled to use the software as it wished. A three-judge Review Panel upheld that ruling in August 1998. INSLAW received no compensation from the federal government.²⁶

FBI Systems Analysis

In mid-1979, the Federal Bureau of Investigation sought congressional approval for acquisition of a new front-end processor, a communications controller device that manages data flows into and out of a central computer. To evaluate the request, the Senate Judiciary Committee commissioned independent technical analyses from both the Office of Technology Assessment and INSLAW. INSLAW's involvement in this evaluation demonstrated the organization's recognized expertise in criminal justice information systems during the period preceding the DOJ contract dispute.⁷

Later Operations

INSLAW, Inc. continued to operate as a going concern after the conclusion of all federal litigation. The company pivoted to commercial case management software, marketing products under the names Modulaw and CJIS to courts, prosecution agencies, law enforcement agencies, correctional facilities, corporate law departments, and insurance claims offices. Hamilton maintained his public allegations regarding PROMIS throughout the post-litigation period. As of 2024, INSLAW operates from Potomac, Maryland, with approximately 20 employees.