The Franklin child prostitution ring allegations began in June 1988 in Omaha, Nebraska and attracted significant public and political interest until late 1990, when separate state and federal grand juries concluded that the allegations were unfounded and the ring was a “carefully crafted hoax.”
In 1988, authorities looked into allegations that prominent citizens of Nebraska, as well as high-level U.S. politicians, were involved in a child prostitution ring. Alleged abuse victims were interviewed, who claimed that children in foster care were flown to the East Coast of the United States to be sexually abused at “bad parties”. The claims primarily centered on Lawrence E. King Jr., who ran the now defunct Franklin Community Federal Credit Union in Omaha, Nebraska, and alleged that the ring was “a cult of devil worshipers involved in the mutilation, sacrifice and cannibalism of numerous children”. Numerous conspiracy theories evolved, claiming that the alleged abuse was part of a widespread series of crimes including devil worship, cannibalism, drug trafficking, and CIA arms dealing.
The Nebraska State Foster Care Review Board submitted the results of a two-year investigation into the alleged physical and sexual abuse of foster children to the Executive Board of the Nebraska Legislature, who were investigating reports of child sexual abuse linked to the credit union. After investigation, a grand jury in Douglas County, where Omaha, Nebraska is situated, determined the abuse allegations were baseless, describing them as a “carefully crafted hoax” and indicting two of the original accusers on perjury charges. The grand jury suspected that the false stories originated from a fired employee of Boys Town, who might have “fueled the fire of rumor and innuendo” because of personal grudges. A federal grand jury also concluded that the abuse allegations were unfounded and indicted 21-year-old Alisha Owen, an alleged victim, on eight counts of perjury. Owen served 4-1/2 years in prison. Separately, the federal grand jury indicted multiple officers of the credit union for embezzlement of funds, including King.
Historian Philip Jenkins explored how cases such as the Franklin allegations can acquire credibility, even if they lack any credibility inherently, when reported in various media in a credible voice. He also explored how such allegations can be seized on by political opportunists for their own purposes.
A homosexual prostitution ring is under investigation by federal and District authorities and includes among its clients key officials of the Reagan and Bush administrations, military officers, congressional aides and US and foreign businessmen with close social ties to Washington’s political elite, documents obtained by The Washington Times reveal.
One of the ring’s high-profile clients was so well-connected, in fact, that he could arrange a middle-of-the-night tour of the White House for his friends on Sunday, July 3, of last year. Among the six persons on the extraordinary 1 a.m. tour were two male prostitutes.
Federal authorities, including the Secret Service, are investigating criminal aspects of the ring and have told male prostitutes and their homosexual clients that a grand jury will deliberate over the evidence throughout the summer, The Times learned.
Reporters for this newspaper examined hundreds of credit-card vouchers, drawn on both corporate and personal cards and made payable to the escort service operated by the homosexual ring. Many of the vouchers were run through a so-called “sub-merchant” account of the Chambers Funeral Home by a son of the owner, without the company’s knowledge.
Among the client names contained in the vouchers – and identified by prostitutes and escort operators – are government officials, locally based US military officers, businessmen, lawyers, bankers, congressional aides and other professionals.
Editors of The Times said the newspaper would print only the names of those found to be in sensitive government posts or positions of influence. “There is no intention of publishing names or facts about the operation merely for titillation,” said Wesley Pruden, managing editor of The Times.
The office of US Attorney General Jay B. Stephens, former deputy White House counsel to President Reagan, is coordinating federal aspects of the inquiry but refused to discuss the investigation or grand jury actions.
Several former White House colleagues of Mr. Stephen are listed among clients of the homosexual prostitution ring, according to the credit card records, and those persons have confirmed that the charges were theirs.
Mr. Stephen’s office, after first saying it would cooperate with The Times’ inquiry, withdrew the offer late yesterday and also declined to say whether Mr. Stephens would recuse himself from the case because of possible conflict of interest.
At least one highly placed Bush administration official and a wealthy businessman who procured homosexual prostitutes from the escort services operated by the ring are cooperating with the investigation, several sources said.
Among clients who charged homosexual prostitutes services on major credit cards over the past 18 months are Charles K. Dutcher, former associate director of presidential personnel in the Reagan administration, and Paul R. Balach, Labor Secretary Elizabeth Dole’s political personnel liaison to the White House.
In the 1970s, Mr. Dutcher was a congressional aide to former Rep. Robert Bauman, Maryland Republican, who resigned from the House after admitted having engaged in sexual liaisons with teen-age male prostitutes. Mr. Dutcher also worked on the staff of Vice President Dan Quayle when he represented an Indiana district in the House.
A charge also was discovered against the credit card of a former White House staffer who prepared the president’s daily news summary in the Reagan administration. Todd A Blodgett said he had not made the charge.
One of the ring’s big spending clients is Craig J. Spence, Washington socialite and international trade consultant, according to documents and interviews with operators and prostitutes who say they engaged in sexual activities with Mr. Spence.
Mr. Spence spent upwards of $20,000 a month for male prostitutes who provided sex to him and his friends, said to include military personnel who also acted as his “bodyguards.” It was Mr. Spence who arranged the nocturnal tour of the Reagan White House. Repeated attempts to reach Mr. Spence by telephone, fax machine and personal visits to his home, were unsuccessful.
Credit card vouchers confirm that Mr. Spence charged thousands of dollars on American Express and Visa cards, sometimes making $600 charges against his cards several times a day, drawn in behalf of an escort service called Professional Services Inc.
Members of major news organizations also procured escort services from the ring, credit card documents show. These include Stanley Mark Tapscott, who was an assistant managing editor of The Washington Times.
Mr. Tapscott, whose resignation on June 20 was accepted, said he had not procured homosexual escorts or sexual services of any kind. He said in an interview that he had talked to two women he arranged to meet through the escort service as part of an investigation of a dial-a-porn services he had initiated a year earlier when he was editor of the newspaper’s Money section. The charges were made against his company American Express card. His editors knew of no such investigation.
Before joining The Times, Mr. Tapscott worked for the Office of Personnel Management in the Reagan administration.
Managers of the escort ring said that “a few women” were used for clients who called with specific requests but that the regular stable was altogether male.
The documents show that a number of clients — lawyers, doctors and business executives — used corporate credit cards to procure escort services and that a number of military officers from the United States and allied countries — including one foreign officer using a “Department of Defence” credit card — charged male escort services.
One former top-level Pentagon officer said that for the past eight years, military and civilian intelligence authorities have been concerned that “a nest of homosexuals” at top levels of the Reagan administration may have been penetrated by Soviet-backed espionage agents posing as male prostitutes, said one former top-level Pentagon official.
A major concern, said the former official with longtime ties to top-ranking military intelligence officers, was that hostile foreign intelligence services were using young male prostitutes to compromise top administration homosexuals, thus making them subject to blackmail.
“We have known for many, many years that there is a department of the KGB [Soviet intelligence] whose job it is to prey on sexual deviants,” said retired Lt. Gen. Daniel Graham, former head of the Defense Intelligence Agency.
Because “closet” homosexuals in government service can be easily “turned” through blackmail for espionage purposes, Gen. Graham said, “we have always in intelligence tried very hard not to be giving classified information to known homosexuals.”
Those interviewed by The Times confirmed that there were blackmail attempts by male prostitutes who wanted money and other favors to protect clients’ sexual lives.
The clients interviewed say a Feb. 28 police raid on a house at 6004 34th Place NW was set off by reports of blackmail and possible credit-card fraud complaints and by District hotel operators about prostitution activities.
In the raid, spearheaded by the Washington Field Office of the U.S. Secret Service, authorities found a telephone switchboard operation serving a half-dozen homosexual escort services.
Secret Service agents and District police vice investigators confiscated financial records, as well as ledgers, photos, diaries, telephone records, Rolodexes and client lists of the prostitution network, during the raid and with subsequent subpoenas issued by D.C. Superior Court.
Although the confiscated material was turned over to District police on the scene, witnesses and law enforcement agents say the Secret Service kept one box containing names and other information about high-level government officials who were clients of the male escort business.
District police officials say that, to their knowledge, this is the first time the Secret Service has ever become involved in such a raid in this area.
Initially, the Secret Service denied it was involved in the raid, but after a second raid of the 34th Place house on May 18, the agency acknowledged its involvement in the investigation.
Secret Service spokesman Bob Snow said the agency participated in the search and seizure operation because of its jurisdiction over credit card fraud. “We come into such operations usually at the request of a U.S. attorney … if the fraud involves $10,000 or more … We are not involved in any local prostitution investigation,” said Mr. Snow.
Witnesses to the February raid said 12 Secret Service agents in blue parkas entered the house and spent several hours collecting and removing boxes of files.
Federal and District investigators have since interrogated several prostitutes working for the ring, as well as clients of homosexual escort services operating under such names as Jovan, Man-to-Man, Metrodate, Ultimate Models and Ultimate First Class.
In addition to credit-card fraud, the investigation is said to be focused on illegal interstate prostitution, abduction and use of minors for sexual perversion, extortion, larceny and related illicit drug trafficking and use by prostitutes and their clients.
One of the chief operators of Professional Services Inc. and a regular client of the service speculated in separate interviews that the investigation would be restricted because “big names” were involved.
“Henry Vinson [the operator] said a high level official is going to try to block the investigation and may succeed,” said Mr. Balach, the labor secretary’s liaison to the White House. Mr. Vinson said he believes a highly placed federal official, whom he would not name, is working to derail the investigation, but he would not elaborate.
Authorities have been investigating possible credit card fraud by the ring operators since last fall.