In 1967 the product line was expanded to include manufacture of electronic countermeasure, surveillance, bomb detection and bomb disposal equipment. Each of these product categories has become widely accepted within the industry.

The company has provided equipment to and serviced many foreign, federal, state and local law enforcement agencies and industrial customers.

Martin L. Kaiser, Inc. has endeavored consistently to present a realistic approach to a wide variety of electronic security problems.

Their electronic countermeasure equipment is designed to cover the three basic categories of transmitters, hard wire systems and telephone alterations.

The Case of the Cozy Cutout

In J. Edgar Hoover's day, FBI agents knew full well that they would get a quick ticket to Butte, Mont., if they botched their paper work or got caught kiting their telephone vouchers by as much as a dime. But in recent weeks, the bureau's record for Boy Scout's honor has come in for some painful scrutiny, and the agency now faces a new embarrassment: an in-house investigation stemming from reports of questionable fraternization between G-men and businessmen, inflated contracts for snooping gear and a sudden fire in a woodsy rod-and-gun club that was once favored by some of the FBI's most powerful top brass.

Newsweek learned last week that FBI director Clarence M. Kelley has, ordered a special inquiry to clear up the murky affair. The principals all appear respectable. They include Joseph Tait, president of U.S. Recording Co., a Washington based electronics firm that has been supplying the FBI with gum shoe gadgets since 1937; John P. Mohr, who retired in 1972 as the FBI's No. 4 man; and Martin Kaiser an independent and spirited manufacturer of fountain pen microphones and other exotic electronic paraphernalia.

Kaiser told the House Intelligence committee last October that U.S. Recording had served as a front to funnel secret surveillance gear made by other contractors to the FBI. He also alleged that the firm had charged an exorbitant markup - up to 30 per cent - on about $100,000 worth of gear. What Sparked the interest of the committee investigators was the fact the Tait and Mohr (who had been in charge of the purchases for the bureau) had been friends for years, as well as poker partners with other FBI officials at the Blue Ridge Club in the Shenandoah Valley of Virginia; the retreat burned to the ground the night before a team of investigators from the House committee was due to inspect its books.

Both Tait and Mohr denied that they had engaged in any improprieties. But Kelley's investigation clearly set off a few alarms around the bureau. "There is no question," conceded one candid FBI man, "that this is a matter of some real concern."

There was also no doubt that U.S. Recording and the FBI had worked together as silent partners. As Kaiser told the story, when he started selling sophisticated surveillance gear to the FBI in the late 1960s, he was instructed by FBI operatives to write up his invoices in the name of U.S. Recording. After he pointed out that the procedure appeared to violate Federal laws banning the sale of his line of goods to private companies, the FBI gave him a rubber stamp ("This order complies with all the provisions of the Omnibus Crime Control and Safe Streets Act of 1968") and told him not to worry.

In 1972, Kaiser paid an office call on an FBI agent in Washington and noticed an invoice on the agent's desk indicating that a number of transmitters he had shipped to the FBI (at the going rate of $75 each) had been marked up on the invoice by a whopping 30 per cent. He broke off the business connection. And when the National Wiretap Commission examined his books last May, discovered the transactions and questioned their legality, he took his story to the House committee. "I wasn't about to go into the pokey for them [the FBI]," he explained.

Old intelligence hands around Washington said that Kaiser had run into a classic trick of the trade called a "cutout." In simple terms, a cutout in this case would be a go-between or front used to prevent a hostile foreign power from finding out the source and quality of secret surveillance gear purchased by U.S. intelligence agencies. (Existing U.S. laws provide that the government may buy top-secret hardware through "confidential suppliers," without taking bids.) Attorneys for U.S. Recording confirmed that the firm had been such a confidential supplier. They maintained that its markups had averaged only 12 per cent. House sources said they ran closer to 20 and attributed the price tag to paper work and other overhead expenses. The problem, observed one FBI source, was "whether all the equipment was really so sensitive that it required the use of a cutout." and no-bid contracts.

Kaiser said that many of his shipments had been run-of-the-mill stuff, and House sources maintained that since many of Kaiser's shipments had been made directly to the FBI (with only his invoices going to U.S. Recording), the overhead argument seemed at the very least open to question. "There is no way it's legitimate," said one well-versed committee source. The FBI denied that summation, but confirmed that, on Kelley's orders, it was studying the question of whether the markups were reasonable and legal.

One line of inquiry pointed to the relationship between Tait and Mohr, and it wasn't the first time the two had fallen into the limelight. Earlier this year, Mohr was accused of "fraud and deceit" by relatives of Hoover's friend and aide, Clyde Tolson, who had willed the bulk of his estate to a number of charities and large amounts to Mohr and other former colleagues. In connection with this civil suit, Mohr, who denied the charges, said he had played, poker with Tait and others at the Blue Ridge Club. The list of players named by Mohr included two dozen past and present FBI men and several CIA men (including the retired super spook James Angleton).

Guest: The tab for the friendly weekends ran about $600, committee sources said. Some investigators speculate that Tait might have been picking up the tab for room board and booze, a violation of Federal regulations against gifts for government. As a director of the club, Tait arranged quarters for the poker game and paid the bills by check from time to time. But he and Mohr both insisted last week that he had always been reimbursed by his guests.

It was to shed light on these arrangements that the House investigators sought to examine the club's books just before the place caught fire. Last week only the magnificent stone fireplaces of the old, 27-room lodge were left, towering above a hill overlooking the Potomac a few miles northeast of Harper's Ferry. The blaze broke out on a Sunday at dusk. Local fire marshals said the evidence suggested it had been an electrical fire, not the work of a professional torch.

The clubs records were saved and may ultimately clarify some of the ambiguities in the affair. With Mohr still retaining considerable influence within the bureau (assistant director Harold Bassett, the chief of the Inspection Division responsible for the current probe, is said to be an old friend), a few troubled FBI men wondered last week where it all might lead. "It may be nothing more than a stupid business practice," said one of them. But it also turn out to be the first serious money scandal in the bureau's long history.

The Evening Sun
Baltimore, MD
Monday, October 25, 1976

Witness's Business Suddenly Drops

When the House Select Committee on Intelligence invited Marty L. Kaiser to testify at its hearings on illegal wiretapping by government agencies, he did the statesmen a favor and accepted the invitation.

Now they can return it by helping him answer a question: Why is it that he averaged about $200,000 annual in business from these agencies before he testified just one year ago and has averaged zilch since then?

That's what has happened to Martin Kaiser since he went to Washington last October and startled the intelligence community. He offered evidence that prices for equipment he had sold to an FBI front had apparently been marked up by about 30 per cent before delivery from the front to the FBI.

Word later came that Edward H. Levi, Attorney General, ordered an investigation of links between several top-echelon FBI officials and the head of the firm serving as the original recipient of the equipment.

Citizen Kaiser is the slightly stout little fellow from Timonium who has been called "the Michelangelo of electronics" because of his Uncanny talent for making things out of juiced up wires and finding such things made by others to bug their fellow man. There was a time when his marvelous little devices - all assembled by his nimble brain and nimble fingers in a small block building next to Brooks Robinson's sporting goods shop - were the rage of the FBI, Secret Service, armed forces and private customers in the world of the superduper snoop and counter-snoop. His developments in electronic eavesdropping for law enforcement and government intelligence had made him one of the most widely publicized and sought after specialists in the field.

His equipment and techniques led to the discovery that bugs had been placed on telephones in the offices of Governor Mandel, at least four other governors, and Milton A. Allen, the Supreme Bench judge who was then state's attorney for Baltimore.

The big, red car in his driveway is known as his "President Sadat Cadillac" because he bought it after a lucrative service performed for the Egyptian chief, training his aides in electronic counter-intelligence.

Such foreign work and private assignments like countering industrial espionage, says Marty Kaiser, have enabled his company to survive the withdrawal of government business.

"I'm still busy, but most of my business comes from other sources," he says. "I've tried to find out why I was dropped so suddenly. After all, I didn't ask to talk to the committee. They invited me and made it clear that I'd be subpoenaed if I didn't accept the invitation.

"I even went over and talked to (FBI Director) Clarence Kelley about it for an hour. I was only doing my duty, which is something the FBI certainly ought to understand, and he certainly seemed to understand.

At one point Citizen Kaiser brought suit against officials of several intelligent and military agencies under the Freedom of information Act in an attempt to get an official reason for his freeze-out.

"About the only thing I got out of that was word from the Army that they have no file on me. I told that they must have, became I was in the Army once. I even gave- them my Trial number, but they said my file must have burned up in a fire at the records center.

For Martin Kaiser, who is more at home in the microcosmic world of transistors and printed circuits than n the mystical world of Washington politics, there is something familiar about it all.

Shortly before establishing his Timonium business 12 years ago, he helped develop a missile detection system heralded in 1964 by President Johnson using the bending beam principle in a device "seeing" beyond the horizon.

At the time, he says, he was making about $6,300 a year for Radio Corporation of America after starting at $3,900 about six years earlier. For his sterling work, he was rewarded with an assignment as manager of the anti-missile project when it was moved from Burlington, Mass., to Barbados, West Indies. But one day, be recalls, an Air Force officer asked him to compare RCA's efforts with Raytheon in similar work. "After evaluating their work against RCA, I really felt they were doing a better job, really outstanding. I said so, and the and the next thing we knew was that Raytheon had the project.

"I wasn't fired, because that wasn't to way they operate instead, they offered me a promotion - in Australia. "I said it was okay if they'd pay to move my wife and kids, too, but they said no "I'd have to pay. "I figured it out, and it would have come to about $14,000. So I didn't take the promotions."

There is something faintly similar between the Australia to which Martin Kaiser was to be assigned in 1964 for his compulsive candor with an Air Force officer and the Siberia of the intelligence world to which he has been relegated for speaking out before the House Select Committee on Intelligence in 1975.

For a man whose equipment may form the heart of the nation's defense and counter-intelligence system, he seems to be getting short shrift.

The least the committee owes him in return for his service is a little help in determining why.

Winston-Salem Journal
Tuesday, February 21, 1978

Jury May Get Case Today, Is Kaiser Object of FBI Vendetta?

Twelve jurors probably will begin deliberations today to decide whether Martin L. Kaiser is guilty of conspiracy and illegally bugging FBI agents while they investigated Northwestern Bank last year.

One thing the jury must decide is whether the FBI is carrying out a vendetta against Kaiser, one of the, country's foremost wiretap and bugging experts.

Kaiser, a manufacturer of surveillance devices - from Maryland, was once a major supplier of the FBI's surveillance equipment But his dealings with the FBI stopped when he publicly identified an FBI front company used to buy his products and resell them to government agencies at substantially higher prices.

Today, Kaiser no longer works with the FBI, but his clients include the ..., the Army, and Air Force, several foreign countries and more than 200 police departments.

Martin Kaiser is still one of the most respected makers of bugging equipment in the world - among his character references is the head of the CIA's procurement division. Kaiser still supplies the ... with a great deal of surveillance gear' and he still holds an agency rating of secret.

But Kaiser says that the FBI wants revenge on him. He alleges that the FBI seeks revenge because of his testimony before the presidentially appointed National Wiretap Commission and the House Select Committee on Intelligence in 1975. In his testimony before the panels Kaiser revealed links between the FBI and U.S. Recording Co., an electronic equipment purchasing company.

Kaiser told the committee that the recording company was actually an FBI front - an apparently legitimate private business. Which was in fact operated by high ranking FBI officials. Kaiser had done a considerable amount of business with the FBI, he said, but his business began to suffer greatly after he was instructed in 1969 to sell his equipment to U.S. Recording instead of directly to the FBI.

Kaiser testified that he first assured that the procedure was merely a security measure, - but he later discovered that the electronic devices he sold to U.S. Recording were being duplicated and resold at substantial markups.

Kaiser had sold the FBI many surveillance devices - among them the bug detection kit used to find the listening devices Kaiser is charged with installing at Northwestern's headquarters in Wilkesboro. After his testimony an investigation by the General Accounting Office revealed that the FBI front company had marked up the prices of Kaiser's gear from 12 percent to 280 percent.

Kaiser testified that the FBI was not the only group buying his products through U.S. Recording. In addition to federal agencies, Kaiser told the congressional committee foreign governments, including Canada and Iran bought the marked-up goods.

Kaiser now says that most - of his federal contracts were severed after he brought the front company to public attention. An affidavit Kaiser filed in federal court claims that his sales plummeted from $200,000 annually before his testimony to $450 afterward.

His allegations of a vendetta go beyond the U.S. Recording Co. payment scheme, though. Kaiser said that Thomas J. Brereton, the FBI agent in charge of the Northwestern investigation illegally attended grand jury proceedings while Kaiser was testifying.

Kaiser's allegations resulted in a special hearing called by Judge Hiram H. Ward in U.S. Middle District Court here last month. Ward ruled that Brereton had not improperly attended the grand jury hearings and that "a mistake had been made, honest or otherwise."

Brereton testified that he had been in the U S. attorneys law library during Kaiser's grand jury appearance.

Friction between Kaiser and Brereton seemed to continue throughout the seven days of testimony in the bugging trial. Kaiser's attorneys repeatedly asked Ward to admonish Brereton for speaking with Assistant U.S. Attorney Benjamin White during cross examination.

Brereton consulted with White before many questions were put to defense witnesses, and Kaiser's attorneys objected that the jury could overhear Brereton's comment's. Several times, Ward instructed Brereton to lower his voice when he spoke with the prosecutor.

A part of Kaiser's affidavit on the FBI vendetta matter said that two special FBI agents visited him in December 1975 to interview him on his U S. Recording Co. testimony. Kaiser said the two "literally held me for several hours hostage... to elicit a statement which repudiated my earlier congressional testimony and absolved the Bureau and U.S. Recording Co. of their wrongdoing."

The U.S. attorney's office filed a motion in federal court to deny Kaiser's allegations of a vendetta.

Kaiser's trial will continue at 9:30 a.m. today, with final arguments and instructions to the jury scheduled.

Winston-Salem Journal
Wednesday - February 22, 1978

Martin L. Kaiser has been found not guilty of bugging FBI agents, conspiracy and illegal transporting listening devices.

The verdict was returned by a jury of eight women and four men after 2.5 hours of deliberation yesterday afternoon in U.S. Federal District Court here.

Kaiser, an electronic surveillance expert from Cockeysville, MD, had been charged with helping Edwin Duncan Jr. and Gwyvn E. Bowers bug FBI agents who were investigating Northwestern Bank last year. Duncan, former bank board chairman, and Bowers, a former bank vice president, pleaded guilty to similar charges last November.

The bugging took place between April and July 1977 in an office in the bank's headquarters in Wilkesboro. "In all honesty," Kaiser said after the verdict was announced, "it's what we expected. Needless to say I'm satisfied."

Throughout the eight day trial Kaiser admitted installing bugging equipment in a bank office used by the FBI agents but denied knowing that Duncan and Bowers would use the equipment illegally. The government case contended that Kaiser was fully aware that bank employees would use the bugging system to illegally monitor the FBI investigation.

"What this case is really about is human rights - the right to human privacy," said Assistant U.S. attorney Benjamin White in his final argument yesterday morning. "There is nothing illegal about him installing these devices - many attorneys have them in their offices, many businessmen have them in their offices," said John Morrow, ore of Kaiser's attorneys.

Much of Kaiser's trial was marked by controversy over his past business dealings with the FBI. Kaiser, who is a major manufacturer of surveillance equipment for government agencies, filed a pretrial affidavit protesting that the FBI was seeking revenge against him.

Kaiser said the FBI wanted vengeance because of testimony he gave before congressional panels on surveillance matters. He had identified an FBI front company that bought his equipment and resold it to the FBI and other government agencies at marked-up prices.

Most of the defense witnesses were from law enforcement agencies, and most testified that Kaiser is reputable and trustworthy. Kaiser testified that at he Sells bugging equipment and bomb detection gear to more than 200 law enforcement groups. His clients, he said, include the CIA, the Army and Air Force and several foreign governments.

In his closing remarks, White questioned the nature of Kaiser's relations with his clients. After saying that Kaiser had once had the trust of law enforcement groups. White said, "Mr. Kaiser sold that trust, ladies and gentlemen, for $3,500 (Kaisers fee - for the Northwestern Bank bugging)."

Shortly after the end of the trial, one of Kaiser's attorneys told reporters that Northwestern has never paid Kaiser's fee. "We hope we don't have to sue them to get it - they're a big bank," said Bernard Fensterwald, a Washington lawyer who once defended James McCord, one of the Watergate burglars.

Kaiser said he plans to visit his daughter in Florida and then return to work. "I've really been out of business since July 29 (the date of his indictment)," he said. "I'm really looking forward to getting back to it."

The Sentinel
Winston-Salem, NC
Saturday, February 5, 1983

Defendants Claim Agents Abused Process

GREENSBORO, NC - Two FBI agents abused the criminal process to strengthen their position in a $22 million lawsuit stemming from the 1977 investigation and bugging at Northwestern Bank lawyers for defendants in the suit charged in federal court yesterday.

One defendant in the civil case also accused the FBI of tampering with evidence. In an affidavit, defendant Martin L. Kaiser, an Electronics expert from Cockeysville, MD., said bureau agents or, employees altered two tape recordings and switched tape recorders. He also claimed that one agent removed documents from FBI files which have never been recovered.

The allegations were made during three hours of argument In U.S. Middle District Court Federal Judge Frank W. Bullock Jr. held a hearing on numerous motions pending in the case which began almost five years ago.

In July 1978, FBI agents Thomas J. Brereton and Zachary T. Lowe filed suit alleging that their civil rights were violated and their privacy was invaded when their conversations were electronically recorded during their investigation of Northwestern Bank from April to July 1977. Brereton and Lowe charged that Edwin Duncan Jr., then Northwestern Bank chairman, and Gwyn E. Bowers, then bank vice president, conspired to intercept the agents oral and telephone communications.

They also claimed that Kaiser agreed to help Duncan and Bowers by possessing, selling, transporting, and installing electronic surveillance equipment or bugs to help them accomplish their sinister conspiratorial scheme." Northwestern Bank and Northwestern Financial Corp., the bank's holding company, also are defendants in the lawsuit.

The agents discovered they were being recorded while they were investigating financial irregularities at the North Wilkesboro-based bank. Duncan was convicted of misapplying bank funds and recording conversations of IRS agents who were reviewing bank records in October 1977, and in November 1977, he pleaded guilty to the bugging conspiracy against the FBI.

Bowers pleaded guilty to the conspiracy to record the FBI agents' conversations and to the actual bugging. However, Kaiser pleaded not guilty to charges related to the bugging and he was acquitted in federal court in Winston-Salem in February 1978.

Since Brereton and Lowe's suit was filed, it has become one of the most complicated civil cases ever in the U.S. Middle District. Three Greensboro attorneys - Bynum N. Hunter, Michael R. Abel, and Ben F. Tennille, have been released as defendants, and the remaining defendants and the plaintiffs have filed pages and pages of motions' affidavits and cross claims. There also is a similar case filed by former FBI agent Donald G. Wilson for $5.5 million in damages from Duncan, Bowers, Northwestern Bank and Northwestern Financial.

Lawyers for Duncan and Kaiser yesterday said Brereton and Lowe used the criminal investigation of their clients to prepare for their multi-million-dollar civil suit. "They were given access and power of the federal government they should not have been given," Stephen Spring, a Louisiana attorney representing Kaiser said. Duncan's attorney, Ted G. West, claimed that the former bank chairman Agreed to plead guilty to the bugging conspiracy during a meeting with Brereton and a former U.S. attorney.

"We contend that Mr. Brereton and Mr. Lowe abused the process," West said. "That's what it boils down to in instigating a guilty plea from Mr. Duncan so they could have something to hang their hat on in this civil case."

He also said, "This court must and should look closely at a situation where investigators of the U.S. government pursue their investigation knowing during the entire course of the investigation that they have a civil suit in mind".

But Mike Bailey, one of Brerelon's and Lowe's lawyers, said the agents were only fulfilling their obligations by investigating and helping prosecute the cases.

Kaiser filed a $720,000 counterclaim against Brereton and Lowe in 1978 and last year he asked to add the FBI to his suit. He is seeking $10.7 million from the FBI. Kaiser claimed the bureau "actually assisted and enabled... Brereton and Lowe to gain access to Information and records while on bureau time and through bureau resources of information directly bearing to the outcome of the civil action."

Duncan also has asked the court to allow him to add the FBI, a former U. S. attorney and a former assistant U.S. attorney to his cross-claim against Brereton and Lowe. However, Bullock questioned whether the statutory limitation on adding to the cross-claims has run out.

Kaiser made other allegations against the FBI in his affidavit. He accused the bureau of fraudulently concealing and manufacturing evidence.

The Panasonic tape recorder presented at his criminal trial played at one-third normal speed, Kaiser said, but he said the recorder being used as evidence in the civil case operated at one-fourth normal speed. He also said tests showed that two tape recordings of Brereton and Lowe were not made on the tape recorder provided to Northwestern Bank in 1977 and that the two tapes were made on two different recorders, he said.

Kaiser said, "It is my belief based upon a review of tests that these modifications or manufacturing of evidence was performed by agents and/or employees of the Federal Bureau of Investigation as part of a conspiracy wherein the FBI acted in concert with plaintiffs Brereton and Lowe by attempting to convict me of a crime I did not commit ... and instituting the present civil suit as a retaliatory measure designed to drain me of funds necessarily spent in my defense."

Kaiser further charged that Brereton took documents out of the FBI files and that the bureau claims those papers are lost. He also said Brereton made misrepresentations to a grand jury which led to Kaiser's indictment on charges related to the buggings Brereton did that Kaiser said, so he could use the criminal trial to gather evidence for the civil case.

Duncan and Kaiser have filed motions for summary judgment and have asked for dismissal of the actions against them. Yesterday, attorneys for Northwestern Bank and Northwestern Financial Corp. also argued for summary judgment and dismissal.

"The bank was the one who was losing from this illegal activity" not just the customers, The bank," Richard Vanore, Northwestern attorney, said. "Because (Duncan) benefited is not sufficient to say the bank benefited and should be held responsible for his action."

He also charged that Brereton and Lowe are "seeking monetary damages as the real fruit of their criminal investigation"

Bugging Expert Adds FBI To His Suit Against Agents

The Sentinel
Winston-Salem, NC

GREENSBORO, NC - A Maryland electronics expert is asking for more than $10 million in damages from the FBI, claiming that the agency as assisted two of its agents who were planning a lawsuit against him.

Martin L. Kaiser specializes in electronic surveillance (bugging), counter-surveillance and bomb detection equipment says in a document filed in federal court here that agents Thomas J. Brereton and Zachary T. Lowe were contemplating a lawsuit against him while they were involved in prosecuting him on criminal charges.

The FBI "actually assisted and enabled... Brereton and Lowe to gain access to information and records while on bureau time and through bureau resources of information directly bearing to the outcome of their proposed civil action", Kaiser claims.

He says in the document which is an amendment to an earlier counterclaims against the agents, that the FBI's action represents a "malicious motive for the institution and prosecution" of the criminal case against him "in violation of federal statutes which require federal agents with a conflict of interest to excuse themselves from such investigation".

Brereton and Lowe sued Kaiser in U. S. Middle District Court in July 1978, five months after he was found not guilty of charges of bugging them while they were conducting an investigation at Northwestern Bank in Wilkesboro in 1977.

The agents also sued the bank and its former president Edwin Duncan Jr., claiming that their right to privacy was violated by the bugging of the room they were using at the bank head quarters. The agents claim a total of $22 million in damages.

Several months later Kaiser filed a counterclaim against the agents claiming they abused the criminal process against him and asking for $720,000 in damages. The agents responded by denying that they had acted improperly in the criminal investigation and they asked for a dismissal of the counterclaim.

Kaiser's addition to the counterclaims filed this week asks that the United States be brought into the suit to represent the FBI, and he asks for an additional $10.7 million in damages.

U. S. Attorney Kenneth W. McAllister said this morning that "I certainly wouldn't comment on any pending civil actions".

Duncan and the bank have filed motions for dismissal of the agents' suit, and Duncan has asked the court for permission to file his own counterclaim against the government and prosecutors in a 1977 criminal case against him.

Duncan pleaded guilty to charges of conspiring to bug the agents. He spent several months in prison as the result of convictions on other charges stemming from the agents investigation.

No trial dates have been set in the lawsuit, which has become one of the most complex civil cases now pending in the district.

The Daily Telegraph
London, England

Bugged FBI Men with Hemorrhoids Sue for 11 Million

A telephone tapping expert who supplied the Federal Bureau of Investigation with electronic eavesdropping devices is being sued for alleged "bugging of two FBI agents." The agents, Thomas Brereton and Zachary Lowe, are claiming eleven million pounds compensation They say their right as private citizens were "grossly violated" and they are suing Mr. Martin Kaiser and a bank in North Carolina.

They were investigating the bank's affairs after allegations that an executive was misusing funds, and according to Mr. Kaiser a vice president of the bank sought his assistance, wanting recorders installed to tape conversations and interviews in the bank involving the officers.

Devices were provided, Mr. Kaiser said, on the understanding that the equipment would be used legally with the consent of the agents.

The FBI men have now named him together with the bank in a lawsuit filed at Greensboro, North Carolina. In a court deposition Mr. Brereton tells of finding five bugging devices, including special transmitters and amplifiers, in the building.

He recalled: "That night there was tremendous anger and frustration". He remembered one of the bank's executives sitting "smirking at me when he pulled all the mikes out of the wall. He went on: "You wouldn't believe the anger that took place in here that night when I found out... you go home and all you do is think about it." "You know you've been bugged... It keeps playing on your mind".

As a result he was humiliated and embarrassed as a special agent and suffered, he said, increased hypertension and cysts in his eyes.

His colleague said in his deposition that after the incident his hemorrhoid condition worsened.