My Great Big Source DumpJune 30th, 1989
July 7th, 1989: Washington Times
Washington Times wrote:POWER BROKER SERVED DRUGS, SEX AT PARTIES BUGGED FOR BLACKMAIL
Michael Hedges and Jerry Seper The Washington Times; Final Section: A Page: A1 Friday, June 30, 1989
Craig J. Spence, an enigmatic figure who threw glittery parties for key officials of the Reagan and Bush administrations, media stars and top military officers, bugged the gatherings to compromise guests, provided cocaine, blackmailed some associates and spent up to $20,000 a month on male prostitutes, according to friends, acquaintances and records.
The 48-year-old D.C. power broker has been linked to a homosexual prostitution ring currently under investigation by the U.S. Attorney's Office. Its clients included several top government and business officials from Washington and abroad.
Among the clients identified in hundreds of credit-card vouchers obtained by The Washington Times - and identified by male prostitutes and escort operators - are government officials, locally based U.S. military officers, businessmen, lawyers, bankers, congressional aides, media representatives and other professionals.
Mr. Spence's influence appeared unlimited, aptly demonstrated by his ability to arrange midnight tours of the White House, according to three persons who said they took part in those tours.
"It was a show-the-flag time for Craig Spence," said one person who went on a July 3, 1988, tour that included two male prostitutes. "He just wanted everyone to know just how damned powerful he was," said the person. "And when we were strolling through the White House at 1 o'clock in the morning, we were believers."
One man who was on the tour but asked not to be named for fear it would damage his business said it was cleared by a uniformed Secret Service guard whom the man had seen attending Mr. Spence's parties as a bodyguard.
"For once in his life, Craig was doing something nice. We just thought, neat, we get a free midnight tour of the White House," the man said. Another person on the tour said the group walked through all the public areas of the White House and "even took pictures of ourselves in the barber's chair."
After arriving in Washington in the late 1970s, Mr. Spence was hosting parties during the early Reagan years attended by, among others, journalists Eric Sevareid, Ted Koppel and William Safire; former CIA Director William Casey; the late John Mitchell, attorney general in the Nixon administration; conservative activist Phyllis Schlafly; Ambassador James Lilley; and Gen. Alfred M. Gray, the commandant of the Marine Corps.
Arnaud de Borchgrave, editor-in-chief of The Times, went to dinner once at Mr. Spence's home to honor Mr. Lilley.
Efforts to reach Mr. Spence in the past week were unsuccessful. He contacted The Washington Times yesterday in response to a telefaxed message but hung up when queried about his activities.
According to many current and former friends, Mr. Spence was a dangerous friend to cultivate. Several former associates said his house on Wyoming Avenue was bugged and had a secret two-way mirror, and that he attempted to ensnare visitors into compromising sexual encounters that he could then use as leverage.
One man described having a limousine sent to his home by Mr. Spence and being brought to a gathering at which several young men tried to become friendly with him. "I didn't bite; it's not my inclination," the man said. "But he used his homosexual network for all it was worth."
The man, a business associate of Mr. Spence who was on the White House tour, said: "He was blackmailing people. He was taping people and blackmailing them."
One former friend said he saw an 8-foot-long, two-way mirror overlooking the library of Mr. Spence's home which, he said, he was later told was used for "spying on guests."
Georgetown University law professor Richard Gordon said he was a close friend of Mr. Spence's until his "behavior began deteriorating quite markedly."
Mr. Gordon recalled being at a gathering at Mr. Spence's home and having a conversation with veteran NBC and CBS correspondent Liz Trotta.
"We were sitting in a corner, talking about our mutual concern about Craig's physical condition. He came down later and said he had been listening to us and didn't appreciate it at all," Mr. Gordon said.
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 she began to question Mr. Spence's emotional and physical stability.
"He was fragmenting right before our eyes," she said. "I was very concerned about him."
One former Reagan administration official who worked at the U.S. Information Agency and is an open homosexual said he went to private parties at Mr. Spence's home and saw a great deal of recording and taping equipment.
"It was my clear impression that the house was bugged," he said. Another man, an Air Force sergeant who worked for Mr. Spence as a bodyguard, said: "The house was definitely bugged. I can't say what he was doing with the information. I don't know that. But he was recording what occurred there."
Several others confirmed that Mr. Spence had bragged on several occasions that he had his house bugged and that conversations between guests often had been overheard. They said Mr. Spence often would come down late to parties he hosted and told close associates that he had been listening to what was being said about him.
Several people also said Mr. Spence boasted about getting control of the million-dollar home on Wyoming Avenue by blackmailing clients in Japan.
William Harbin, a former U.S. Foreign Service official who worked for Mr. Spence in the mid-1980s, said: "He pretty much blackmailed a Japanese client. He had represented this firm in Washington, the Policy Study Group.
"The Japanese put up the money for Spence to buy a big house on Wyoming Avenue," Mr. Harbin said. "I heard he later had a quarrel with this 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 transferred the money illegally, so it made the Japanese back down."
Another longtime friend confirmed that Mr. Spence bragged about the Wyoming Avenue deal, saying he had beaten "a very rich, old-line Japanese family."
Secret Service spokesman Bob Snow, when asked yesterday for records about Mr. Spence's visits to the White House, said only the White House counsel could authorize release of the material.
C. Boyden Gray, the White House counsel, said he did not know why Mr. Snow referred The Times to him, adding that he was unaware that his office was required to release such information. "I just don't know anything about that," Mr. Gray said. "But maybe there's something I don't know about." Federal law enforcement authorities, including the Secret Service, involved in the probe of the homosexual prostitution ring have told prostitutes and their clients that a grand jury will deliberate over evidence gathered in the ongoing investigation throughout the summer.
Hundreds of credit-card vouchers, drawn on both corporate and personal accounts and made payable to the Washington-based escort service operated by the homosexual ring, have been examined by The Washington Times.
Mr. Spence, a former ABC-TV correspondent who covered the war in Vietnam, was one of the biggest spending clients of the homosexual prostitution network, according to credit-card vouchers obtained by The Times. For example, on Oct. 5, 1988, he made four separate payments totaling $1,525 with his American Express card for male escorts from Professional Services Inc.
On. Oct. 8, he paid $600 for male escorts, and another $600 payment Oct. 20, the documents show. There were some months when Mr. Spence spent as much as $20,000 for male escorts hired to provide him sexual services, according to documents and interviews with prostitutes who served him.
Many of Mr. Spence's guests soured on his hospitality when his darker behavior emerged. A case in point is his relationship with former U.S. Attorney Joseph diGenova.
According to Mr. diGenova, he attended a few of Mr. Spence's parties both as U.S. attorney and after he left the government to enter private practice. He eventually traveled to Japan last December on a business trip with Mr. Spence and Wayne Bishop, chairman of the Washington law firm of Bishop, Cook, Purcell & Reynolds, where Mr. diGenova works.
"When I got back from Japan, some anonymous person suggested that he (Mr. Spence) might be using cocaine. Well, of course my antennae went up right away and I checked those rumors out . . . and found much to my surprise that people suspected the worst," Mr. diGenova said.
At that point, Mr. diGenova said, he severed his relationship with Mr. Spence. "When you compared it to his other eccentric behavior, it made sense. But I had no evidence whatsoever," he said.
Mr. diGenova said he never took his concern that Mr. Spence might be using drugs to authorities.
Others interviewed said they witnessed drug use and other crimes at parties thrown by Mr. Spence but also never shared their observations with law enforcement officials.
The saga of Mr. Spence, described by one friend as "Washington's Jay Gatsby," began unraveling when federal and D.C. police raided a male prostitution ring in Northwest Washington and discovered credit-card vouchers signed by Mr. Spence and others.
But for several years - even as publications such as The New York Times were describing Mr. Spence as Washington's ultimate power broker -acquaintences noticed bizarre behavior.
Mr. Spence was generous with cocaine at his parties, according to several people who said they witnessed drug use at the exclusive Kalorama house.
"I know he was a coke freak," said the business associate who was on the White House tour. "A lot of people saw it. His behavior spoke for itself."
Several friends said Mr. Spence bragged that U.S. military personnel, for whom he had built a gymnasium in El Salvador, had smuggled cocaine back to him when they returned to the United States.
"I heard he was selling drugs, or smuggling drugs into the country from El Salvador," said a friend who worked closely with Mr. Spence. "He went down there two or three times or maybe more. He was trying to interest a Japanese firm with buying a fishery in El Salvador.
"I found out the United Nations had rejected a similar scheme; they found if you put more boats in there the fish would just get smaller. So I told him that it was no good," the former associate said.
U.S. Drug Enforcement Administration officials said this week they had no evidence of any such operation.
Others said the drugs came from a more mundane source - midlevel dealers in Northwest Washington.
How a man whom even his closest friends describe as a flawed, malevolent personality managed to court Washington's biggest names is a quintessential Washington story.
Mr. Spence arrived in Washington in the late 1970s. Even intimate friends said his depiction of his background was as shifting as his guest list. What can be confirmed is that he attended Syracuse University and worked as a journalist with ABC in Southeast Asia during the Vietnam War.
One former friend, who became acquainted with Mr. Spence in Tokyo, said that the latter had a "falling out" with ABC News because of his political views. The former friend said Mr. Spence was a hard-line conservative and was opposed to what he described as "the liberal treatment of the news by the network."
Mr. Spence made good contacts in Japan and among Chinese expatriates, often bragging of his close association with former Japanese Prime Minister Yasuhiro Nakasone and appearing in public with a Chinese businessman who once served as an unofficial representative of Communist China in Washington, sources said.
The businessman said this week that he did not know exactly what work Mr. Spence did, but that he often bragged about his contacts with Japanese businessmen and political leaders, particularly Mr. Nakasone.
He described Mr. Spence as "strange," saying that he often boasted that he was working for the CIA and on one occasion said he was going to disappear for awhile "because he had an important CIA assignment."
According to the businessman, Mr. Spence told him that the CIA might "doublecross him," however, and kill him instead "and then to make it look like a suicide."
The businessman also said he attended a birthday bash for Roy Cohn at Mr. Spence's house. He said Mr. Casey was at the party. "One time he stormed into another party with a big, white hat and an entourage of security guards," the businessman said. "It was all rather bizarre."
Mr. Spence's trump card in courting the rich and famous apparently was his access to high-ranking orientals at a moment when Japan was flowering as an economic giant and relations with China were thawing.
"Craig had an interest in the Japanese economy," said Mr. Gordon. "He was very interested in breaking through the bureaucratic level and getting people to come to seminars.
"He developed a kind of genuine and effective influence among important doers and thinkers in Washington and from New York," Mr. Gordon said. "I met some interesting senators and representatives at his parties."
He was doing extensive business with Japan in the early 1980s, some of which former Reagan administration officials said appeared to violate trade laws.
Mr. Gordon said he warned Mr. Spence of the need to be registered as a lobbyist, and documents show that in January 1985 he became a registered agent lobbying for Japanese businesses.
A January 1982 New York Times profile of Mr. Spence was headlined "Have Names, Will Open Right Doors." The article quoted a Washington Post columnist in 1980 saying of Mr. Spence: "Not since Ethel(D-) Kennedy used to give her famous Hickory Hill seminars for great minds of our times during the days of Camelot has anyone staged seminars successfully on a continuing social basis in Washington. That's what Craig Spence has been doing."
Mr. Spence was described in the New York Times as "something of a mystery man who dresses in Edwardian dandy style, a former television correspondent who now wears many hats, including international business consultant, party host, registered foreign agent and something called 'research journalist.' "
Those who knew Mr. Spence best were astonished by his ability to court the rich and powerful.
"He conned people into going to parties - big people, Cabinet members and personalities and so forth," said Mr. Harbin, who wrote research papers that Mr. Spence peddled to Japanese clients.
"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," he said.
"He was quite secretive, but from what I could see these things had little or no substance," Mr. Harbin said. "Usually a grain of truth, but he'd build a pile of lies on top of it. Usually he'd start with a photograph of himself with some guy and build a lie around it that he was his top adviser. Nakasone was one."
Mr. Spence also bragged about social companions, telling friends that he had hosted Mr. Cohn, Rock Hudson and others at his Wyoming Avenue home.
The former Reagan administration aide said he decided to sever a friendship with Mr. Spence when he witnessed him trying to force his off-duty military bodyguards into homosexual acts.
"I'm openly gay myself," he said. "Most gays find that type of behavior reprehensible."
Several people who attended Mr. Spence's parties remarked at what one guest called "his personal honor guard." "I don't know where he got them, but he liked to surround himself with tall, handsome, stalwart young men. He liked to surround himself with decorations," one frequent guest said.
Mr. Spence has been living on Massachusetts Avenue in recent months, friends said. His legitimate business contacts have "one by one dropped away," said one close friend.
He has told a number of his friends that he plans to leave the country by Aug. 15. Mr. Spence also has said his health is failing.
"I can unhappily confirm that. He has been in ill health. I am not truly aware of what it is that is wrong with him," said Mr. Gordon.
White House mute on 'call boy' probe
Frank J. Murray The Washington Times; Part A; Pg. A1
July 7, 1989, Friday, Final Edition
Administration officials continued yesterday to stonewall reporters on the growing federal "call boy" investigation, apparently hoping the scandal will fade before President Bush is asked his view of a late-night White House tour that reportedly included two male prostitutes.
Treasury Secretary Nicholas Brady, who heads the Secret Service, reluctantly conceded yesterday at the White House that the agency is looking into the July 3, 1988, tour - one of several arranged by a Secret Service officer for lobbyist Craig J. Spence.
Meanwhile, White House sources confirmed that President Bush has followed the stories of the late-night visit and Mr. Spence's links to a homosexual prostitution ring under investigation by federal authorities since they were disclosed June 29 in The Washington Times. But top officials won't discuss the stories' substance, reportedly even among themselves.
"Mr. Bush knows about the story. Yes he does. He's aware of the story," said one White House source who, like virtually all the others, insisted on anonymity.
Press officers have rebuffed repeated requests to obtain Mr. Bush's reaction and decline to discuss investigations or fallout from the disclosures.
"I don't have anything on that," said Deputy Press Secretary B. Jay Cooper, the latest member of the press office to respond.
"There's no gain in talking about it," explained an official who declined to be quoted by name. "It only makes the story grow and helps keep it alive."
The president has not had "serious discussion" about the reports even with his most senior aides, including Chief of Staff John Sununu, according to another source.
Reports on the matter have been included in the Daily Press Summary, a comprehensive half-inch-thick digest of print and broadcast media stories and editorials prepared by a division of the White House press office for the president and aides throughout the complex.
Because the summary is an internal document, officials would not disclose its reports on the news stories. One official said, "I'm sure that the story was summarized, but the president also reads The Washington Times and The Washington Post."
Mr. Brady, the ranking administration official to speak publicly about the episode, appeared nonplussed when asked yesterday about Reginald A. deGueldre, a uniformed White House officer who moonlighted as Mr. Spence's bodyguard and arranged the late-night White House tours.
"Sir, were any Secret Service policies violated by Officer deGueldre's moonlighting relationship with Craig Spence, and, if so, what actions have you taken to correct that?" he was asked.
"Would you repeat that again?" Mr. Brady requested.
"Yes, sir, I'm talking about the UD [Uniformed Division] officer, Reginald deGueldre, who was working moonlighting for Craig Spence and who arranged the tours for him. I'm wondering if any Secret Service policies are violated by such moonlighting, and whether these visits to the White House are . . ."
Mr. Brady interrupted at that point and said, "I can't give you a precise answer on that now. We'll certainly look into it."
"You don't know if your own Secret Service is conducting an investigation into something that's been this prominent?" the secretary was then asked.
"I am sure they're looking into it," he said. "The nature of that investigation I cannot report to you at this time."
A Treasury Department spokeswoman said later, "The director of the Secret Service is looking into whether or not any policies have been violated" by the moonlighting or admission of outsiders to the White House compound.
She said neither Mr. Brady nor the Secret Service would comment on additional matters involved in a criminal investigation by the U.S. Attorney's Office of the homosexual prostitution ring that Mr. Spence patronized.
White House spokesman Marlin Fitzwater and several of his deputies have said repeatedly that they do not know if Mr. Bush considered it appropriate for male prostitutes to be touring the White House at 1 a.m.
Yesterday, while talking informally to several reporters at the White House, Mr. Fitzwater parried one question this way: "What are they saying, that you should have sexual-preference checks on people that come into the White House?"
He also said, "We don't have any involvement that I know of."
Although he has talked repeatedly to individual reporters, including those for The Washington Times, Mr. Fitzwater has not held a general briefing since before the prostitution ring stories broke, largely because of the holiday weekend and because administration experts gave briefings on Mr. Bush's European trip, which begins Sunday.
The last of those briefings was scheduled for today, but Mr. Fitzwater reportedly was considering holding a general briefing as well, his first in nine days.
Mr. Fitzwater and his staff have declined consistently to say if they would take the question to Mr. Bush, a practice done only rarely and generally only on matters they expect the president might be willing to discuss.
One senior official, who insisted on anonymity, said it was unlikely any staff member would ask Mr. Bush such a question, discounting any threats to security and portraying it as a sordid sex matter beneath presidential dignity.
Photo, Treasury Secretary Nicholas Brady concedes a probe is under way., Photo by Kevin T. Gilbert/The Washington Times,
[b][size=130]July 9th, 1989: Meet Reginald deGueldre
July 10th, 1989: Contours of an Investigation
White House Guard Who Gave Private Tours Is Investigated
OAKTON, Va. (AP) - The Secret Service searched the home of one of its White House guards after he acknowledged he had escorted a Washington businessman and his associates on late-night tours of the executive mansion.
Rich Adams, a spokesman for the Secret Service, confirmed on Friday that the service, which protects President George Bush and other high-ranking officials, searched the home of the guard, Reginald A. deGueldre, on Thursday night. Adams declined to provide details of the search.
July 18, 1989: Meet Motoo Shiina
Spence was target before raid on ring
Jerry Seper, and Michael Hedges The Washington Times; Part A; Pg. A1 July 10, 1989, Monday, Final Edition; Correction Appended
Craig J. Spence, the Washington lobbyist and power broker, was the subject of a Secret Service investigation even before a February raid on a homosexual prostitution ring to which he has been linked, The Washington Times has learned.
The Secret Service last week expanded its investigation with inquiries about friends and associates of Mr. Spence.
Two of those friends are former U.S. Attorney Joseph diGenova and his wife, Victoria Toensing, a former deputy assistant attorney general for the Justice Department's criminal division.
During interviews last week with friends and associates of Mr. Spence, the Secret Service made copies of photographs from a July 4, 1988, party showing him mugging for the camera with Mr. diGenova and Miss Toensing, who in one photo is draped in an American flag.
It was on that same weekend that Mr. Spence arranged a 1 a.m. tour of the White House, which one participant said included two male prostitutes.
The Secret Service also wants to talk to Mr. Spence, but has been unable to locate him, according to persons the agents have interviewed.
Mr. diGenova couldn't be reached yesterday for comment. He has been interviewed twice by The Times over the past two weeks. In the first conversation, he described a fleeting contact with Mr. Spence which, he said, was based solely on mutual business interests.
In a second conversation, he said he attended a few of Mr. Spence's parties, as U.S. attorney and later after he left the government to enter private law practice. He eventually traveled to Japan last December on a business trip with Mr. Spence and Wayne Bishop, chairman of the Washington law firm of Bishop, Cook, Purcell & Reynolds, where Mr. diGenova works. Business contacts made on the trip proved fruitful and are still being pursued, he said.
"When I got back from Japan, some anonymous person suggested that he [Mr. Spence] might be using cocaine. Well, of course my antennae went up right away, and I checked those rumors out . . . and found much to my surprise that people suspected the worst," Mr. diGenova said.
At that point, Mr. diGenova said, he severed his relationship with Mr. Spence. He said he didn't report his findings or concerns to authorities.
Although the Secret Service hasn't said what sparked its interest in Mr. Spence, one of the persons questioned by the Secret Service said investigators appeared to be "interested" in the connections the lobbyist had made.
The Secret Service was the lead agency in a Feb. 28 raid on a house on 34th Place NW used by a homosexual prostitution ring, a ring with which Mr. Spence spent up to $20,000 a month, according to call boys, his friends and documents obtained by The Times.
The federal investigation, headed by the office of U.S. Attorney Jay Stephens and conducted by Secret Service agents, appears to be aimed at determining whether Reagan and Bush administration officials and others were compromised by Mr. Spence, through the use of female and male prostitutes and with electronic audio and video eavesdropping at parties at his house in the fashionable Kalorama neighborhood in Northwest Washington.
Another focus of the probe, persons interviewed by the Secret Service have told this newspaper, is whether White House security was compromised by the late-night tours arranged by Mr. Spence.
Mr. Stephens has said only that his office is investigating "possible credit-card fraud" in connection with arrests made in the 34th Place raid. But numerous sources have told The Times that the Secret Service is asking about Mr. Spence's activities.
Secret Service agents on Friday also asked a former Spence colleague detailed questions about attempts by the lobbyist to obtain information about the Delta Force, an elite U.S. commando team involved in top-secret military operations.
The former friend said Mr. Spence had given a gold Rolex watch to a highly decorated Vietnam veteran who is now associated with Army anti-terrorist units. Later, according to the former friend, Mr. Spence alluded to the gift of the watch and asked the veteran detailed questions about the Delta Force operations.
The Vietnam veteran was one of six persons on the July 3 White House tour, arranged by Mr. Spence. A uniformed Secret Service guard, who admitted the group to the White House and served as an unofficial host, also told The Times that he had received a gold Rolex watch worth about $8,000 from Mr. Spence but said Mr. Spence had asked for nothing in return.
Mr. Spence collected key officials of the Reagan and Bush administrations, media celebrities and high-ranking military officers, among others, for his glittery dinner parties at his Kalorama home. According to friends, visitors to Mr. Spence's Wyoming Avenue NW house and records, the host eavesdropped on some gatherings to compromise guests and blackmailed some associates with threats to disclose their indiscretions.
Efforts to reach Mr. Spence during the past three weeks have been unsuccesful. He telephoned The Times on June 29 in response to a telefaxed message but hung up when asked about his activities. His fax machine number has since been disconnected.
Mr. diGenova was nominated by President Reagan to be U.S. attorney in 1983. Prior to that, he was an assistant U.S. attorney in the Washington office, chief counsel and staff director of the Senate Rules Committee and chief minority counsel for the Senate Judiciary Committee.
In 1981, as chief counsel for the Senate Rules Committee, Mr. diGenova was responsible for overseeing the Reagan transition after Republicans gained control of the Senate in the 1980 elections. From June 1975 to April 1976, Mr. diGenova was counsel to the Senate Select Committee on Intelligence, the so-called Church Committee that investigated allegations of CIA and FBI wrongdoing.
Mr. diGenova announced his resignation as U.S. attorney in January 1988, and he left office to begin his private practice on March 1.
Miss Toensing, who also is in private practice, was chief counsel for the Senate Select Committee on Intelligence from 1981 to 1984 when she resigned to join the Justice Department as a deputy assistant attorney general.
At Justice, she headed the criminal division's procurement fraud unit and was instrumental in a number of high-profile indictments, including several involving General Dynamics. She also was responsible for the investigation and prosecution of terrorists.
A number of photographs, including more than a dozen from the 1 a.m. White House tour, were taken over the July Fourth weekend in 1988 by a participant in Mr. Spence's revelries. The photos, copies of which were obtained last week by The Times, have been reviewed by the Secret Service.
Of the several snapshots of the July 4, 1988, tour reviewed by the Secret Service, only two - both of which included Mr. diGenova and his wife - were copied.
Craig Spence was a registered lobbyist for several Japanese firms through 1987 and established close friendships with a number of leading Japanese politicians, including Motoo Shiina, considered by Tokyo analysts to be an inside favorite to replace scandal-plagued Sousuke Uno as prime minister.
Mr. Spence and Mr. Shiina were embroiled in a real estate deal involving the house in Kalorama, a two-story Victorian showpiece valued last year by real estate agents at $1.15 million.
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. Spence $345,000 in cash.
Mr. Spence has told several current and former friends that he obtained the money to buy the house by blackmailing Mr. Shiina. Mr. Shiina has denied he was blackmailed by Mr. Spence.
The lobbyist moved in November 1988 from the Kalorama house, on Wyoming Avenue, to an apartment on Massachusetts Avenue NW, but apparently his operations remained unchanged.
A female prostitute who worked for the escort service that supplied Mr. Spence with call boys, said he hired her to have sex with young military men in his part-time employ.
The prostitute, describing herself as retired, said Mr. Spence ordered her to engage in those assignations in certain specific locations in his Massachusetts Avenue apartment, enabling him to eavesdrop on the encounters. One of her clients, an enlisted man stationed at a local Army base, confirmed that he worked for Mr. Spence, and the prostitute's account.
"Some of the men were married," she said. "They told me he was using what I did with them against them."
Once, Mr. Spence's influence with the Washington power elite appeared almost limitless, demonstrated by his ability to arrange midnight tours of the White House. The Times has confirmed that Mr. Spence arranged at least four midnight tours of the White House, including one June 29, 1988, on which he took with him a 15-year-old boy whom he falsely identified as his son.
One man Mr. Spence apparently cultivated was a uniformed Secret Service officer assigned to the midnight shift at the White House. The officer, Reginald A. deGueldre, was interrogated for more than 10 hours last week about his association with Mr. Spence. Five Secret Service agents, armed with search warrants, searched his house for nearly two hours Friday night, although they wouldn't say what they were looking for. The agents seized several photographs from Mr. deGueldre's home.
Mr. deGueldre said he has been told he will be called to testify before a federal grand jury. According to one law enforcement official, Mr. deGueldre failed the portion of a polygraph test involving favors he may have done for Mr. Spence.
Photo, In a snapshot copied by the Secret Service, Craig J. Spence (right) and former U.S. Attorney Joseph diGenova watch Mr. diGenova's wife, former Deputy Assistant Attorney General Victoria Toensing, clown at 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 who were given a tour at 1 a.m. on July 3, 1988. The tour, arranged by Craig J. Spence, is the subject of a Secret Service probe. The photo was taken by another tour pa[rticipant.]
CORRECTION-DATE: July 14, 1989, Friday, Final Edition
Due to an editing error, a story Monday in The Washington Times incorrectly said that photographs of former U.S. Attorney Joseph diGenova and his wife, Victoria Toensing, an ex-deputy assistant attorney general, were taken during a July 3, 1988, tour of the White House arranged by former Washington lobbyist Craig J. Spence.
Mr. diGenova and Ms. Toensing did not go on the July 3 tour, which, according to one participant included two male prositutes. However, the couple did attend a party at Mr. Spence's house on the same weekend, during which the photographs were taken.
July 24th, TIME Magazine takes note
Spence ma[y] be Shiina's downfall
Edward Neilan The Washington Times, Part A; Pg. A1 July 18, 1989, Tuesday, Final Edition
apanese nuclear-physicist-turned-politician Motoo Shiina has been described here as "a good friend of the United States" - and as a shrewd businessman who may have passed U.S. aerospace secrets to the Soviet Union.
The magazine "Shukan Shincho," a popular weekly, raised past allegations that Mr. Shiina leaked sensitive U.S. information to the Soviet Union - allegations the magazine said have never been explained.
Mr. Shiina, 54, a member of Japan's lower House of Representatives, has been keeping an extremely low profile lately amid a swirling scandal involving his relationship with Craig J. Spence, a onetime U.S. lobbyist for Japan and business associate of Mr. Shiina's.
Mr. Shiina has declined to answer telephone inquiries on his dealings with Mr. Spence, but has responded cautiously to direct questions through a lawyer, Chikahiko Soda. The questions have dealt mainly with a loan by Mr. Shiina to Mr. Spence to purchase the Wyoming Avenue NW house where homosexual parties took place.
"If his [Mr. Shiina's] involvement in any of this is true, then it would create a serious political problem for Shiina and his political life will probably be damaged considerably," said Hisao Imai, a well-known Japanese political commentator.
Mr. Imai, head of the Japan Commentators Association and a former political editor of Sankei Shimbun newspaper, said yesterday that there is hope among younger ruling Liberal Democratic Party members that Mr. Shiina will be a future party leader or even prime minister.
"If we lose him, this is a great loss not only for the LDP [the ruling Liberal Democratic Party] but for the nation," Mr. Imai said.
"The reason that Mr. Shiina is touted as a rising star is that he has been previously untainted by any scandal and he is an internationalist," said another political commentator, Kan Ito.
With his own independent style of diplomacy he has established himself as a leading expert on U.S.-Japan relations, analysts said.
Although several Diet members speaking anonymously yesterday described Mr. Shiina as a "true internationalist" and "good friend of the United States," one Japanese magazine came close to calling him a spy for the Soviet Union.
The magazine "Shukan Shincho," a popular weekly, raised past allegations that Mr. Shiina leaked sensitive U.S. information to the Soviet Union - allegations the magazine said have never been explained.
The magazine quoted a newsman covering the Japan Defense Agency as saying that General Dynamics Corp. in 1979 allowed Mr. Shiina to photograph on microfilm specifications of the new F-16 fighter.
In exchange, the newsman was quoted as saying, Mr. Shiina agreed to lobby for the company's involvement in the joint U.S.-Japan production of the FSX jet fighter.
The magazine noted that stories surfaced in Japan that the technical data of the F-16 was leaked to the Soviet Union by "the son of an influential Japanese politician." No name was given, but the magazine followed with a description of Mr. Shiina's father, the late Etsusaburo Shiina, who was a former LDP kingmaker and holder of several key Cabinet posts.
But Mr. Ito said yesterday, "Any charges that he is soft on the Soviet Union doesn't add up in my opinion. He's always speaking out about the Soviet buildup in Northeast Asia."
Mr. Ito also said, "Mr. Shiina is regarded as well-informed on foreign affairs and defense matters and has been known to criticize both ruling and opposition members for talking nonsense on those subjects in the Diet."
Mr. Imai said political circles around Nagatacho - the Tokyo area akin to Washington's Capitol Hill - are talking more and more these days about stories in The Washington Times about Mr. Spence and Mr. Shiina.
He said some rumors hold that the Central Intelligence Agency cooked up the whole thing to discredit Mr. Shiina.
"I hope Mr. Shiina is not such a bad guy as was described in recent Japanese periodicals' reports," said Mr. Imai. "It has been believed that he will sooner or later become foreign minister. But because of this scandalous news, he may have some difficulties in reaching a Cabinet post or beyond.
"The news that Mr. Shiina was closely associated with Mr. Spence was quite a shock to LDP members and those in the Diet. But a possible examination into the matter will not come before the July 23 Upper House elections for which they are waging an unprecedentedly defensive campaign," he said.
An article profiling Mr. Shiina published 10 years ago in The Daily Yomiuri English-language newspaper began:
" 'What should I say about myself?' he asks smilingly, taking a slow, deep drag at his cigarette between sips of hot, steaming coffee which Hideko, his charming wife, had served. Meanwhile, outside, the gently falling snow had blanketed Shiina's quite ample garden, giving up an impression of serene quiet.
"In his well-modulated voice, Motoo talked of what he calls his 'humble' existence.
"Not so, for this diminutive (5 feet, 5 inches) man has been his father's active and devoted campaigner for a number of years. His father is Etsusaburo Shiina, former vice-president of the ruling Liberal-Democratic Party, Diet member, ex-Minister of Foreign Affairs, ex-Minister of International Trade and Industry (MITI) and ex-Minister of Finance."
The article said Mr. Shiina spent his campus days at Nagoya University, graduating in 1954 with a major in nuclear physics, a field in which he was awarded a scholarship by the U.S. State Department for one-year's study of nuclear reactors at the Argonne National Laboratory in Chicago.
Leaving his infant daughter behind with his mother, a friend was found to sponsor Hideko's stay in the United States. "It was quite tough for both of us, but somehow we managed," he told The Daily Yomiuri, crediting his success to his wife's devotion and care.
On his return to Japan in 1954, the younger Shiina set up his own company which manufactures precision instruments. He founded two other companies, one a joint venture with an American firm, according to newspaper reports that provided no additional details.
Mr. Shiina's lawyer said yesterday of his client's business affairs, only that he resigned as an officer of the Tokyo-registered company Samutaku Co. Ltd. on becoming a Diet member in 1979 but still holds a large number of shares in the company and remains an adviser.
In addition, Mr. Shiina in 1979 was a board member of two non-profit organizations - the World Economic Information Service and the Asian Club, the latter funded by MITI.
Mr. Shiina told a reporter at the time that World Economic Information Service collates and studies economic information from all over the world for the guidance of the Japanese government and business world."
The Asian Club, established in 1975, aimed at "promoting economic goals." Mr. Shiina told an interviewer prior to his first election that he devoted much time to a private organization called Participation which sent out Japanese artists and musicians to various Southeast Asian countries.
On July 5, The Washington Times published a story describing a business deal between Mr. Shiina and Mr. Spence in which the latter made more than $700,000 in four years working for Mr. Shiina's Policy Study Group.
Mr. Spence also bought a Kalorama house using cash loaned to him by Mr. Shiina. When he refused to pay back the loan, Mr. Shiina sued.
* Special correspondent Hiroyasu Tomaru contributed to this report.
July 29, 1989: Party's Over
''Hang a lamb chop in the window,'' was the advice legendary hostess Perle Mesta gave those who wanted to make a place for themselves in the capital.Craig Spence, a would-be power broker with a taste for Edwardian suits, took that advice to heart when he arrived in Washington in the late 1970s and hurled himself into high-intensity party-giving at his elegant town house in the fashionable Kalorama section of town. Before long, the man from nowhere (he was, in fact, briefly a reporter for ABC in Viet Nam, and was said to have ties to Asian businessmen who were paying for his house, two bodyguards and Mercedes) had reportedly been host to John Mitchell and William Casey, journalists Ted Koppel and William Safire, and several Congressmen. By 1982 he had served enough lamb chops to merit a profile in the New York Times. The story trumpeted his ability to open doors all over town, even though the paper could not quite put its finger on who he was. It called him an international business consultant, party host, foreign agent and research journalist. A city that remakes itself every four years is perfect for a Gatsbyesque creature like Spence, with a past he is unwilling to talk about and a present that consists of convincing mysterious clients that he has plenty of influence. Spence would probably still be throwing dinners at the posh Four Seasons Hotel for people like Donald Gregg, U.S. Ambassador to South Korea, as he did last spring, if the police had not raided a male prostitution service in February.The raid turned up thousands of dollars' worth of credit-card receipts signed by Spence. Though he was not the only Washington figure to use the service (the Washington Times, which broke the story, says some White House and congressional aides will be implicated), Spence must have been among its best customers. He ran up a $1,525 tab in one day, $20,000 in a month. To show off his clout last year, Spence took two clients and a pair of male prostitutes on a midnight July 4 tour of the White House.That same weekend, Spence gave Secret Service agent Ronald deGueldre, who arranged the tour, his $8,000 Rolex; deGueldre gave Spence his $22 Casio -- all out of friendship, says deGueldre. The agent's house in Virginia was searched last week for pieces of Truman china, a set of presidential cuff links and a tiepin that disappeared mysteriously after the tour. Officials will not say if anything was found. Evidence is being presented to a grand jury that will decide whether indictments are warranted. But Spence's days of trading on his guest list have ended, and he has gone underground. Those who once dined at his table are wondering out loud about the curious 8-ft.-long two-way mirror in his house, and the young men, and what exactly Craig Spence did to earn all the money he was throwing around. They wonder only now that the party is over.
By Margaret Carlson and Hays Gorey
August 10, 1989: Craig Spence Arrested
Party's Over An Influence Broker Vanishes Amid Sex Charges, Leaving Some D.c. Heavyweights Unnerved.
July 29, 1989|By Frank Greve and Nelson Schwartz, Inquirer Washington Bureau
WASHINGTON — "Millionaire" was the occupation Craig Joseph Spence gave last year when he was arrested on a charge of drunken driving.
At his peak, Spence, 48, earned more than $300,000 a year at a job highly prized in Washington. He was a people broker who introduced Japanese businessmen informally to American decision-makers.
No one knew where he came from, and Spence was no help. He "constantly reinvented himself," as a friend put it, telling Washington friends he was a Boston Brahmin and Boston Brahmins he was a New Yorker.
Nobody cared. They called him a Gatsby and let him send his Cadillac limousine for them. They sipped the chardonnay that his white-gloved butler served and stayed late at his big fieldstone home on elegant Embassy Row.
"There was always freshly squeezed orange juice and interesting people to talk to, and in Washington that's an irresistible combination," explained partygoer Scott Thompson.
Spence's decade-long party ended recently when a favorite guest, Washington Times editor Arnaud de Borchgrave, published a story that Spence spent up to $20,000 a month on homosexual prostitutes. In a second story, headlined ''Power Broker Served Drugs, Sex at Parties Bugged for Blackmail," Spence was said by unnamed sources to have blackmailed participants in sex acts secretly videotaped through a two-way mirror.
Spence did not respond to the charges. He has not returned repeated phone calls, and a doorman said he had not been seen for weeks.
No known evidence has linked Spence's famous guests to X-rated parties. Nor have blackmail victims surfaced. In fact, federal investigators announced this week that they had uncovered no evidence that would link high-ranking government officials to the alleged homosexual prostitution ring or to blackmail.
But the events have sent shock through Spence's party cast, including media supernovas Ted Koppel and Eric Sevareid, and a score of senators, ambassadors, generals, academics, senior bureaucrats and hangers-on.
And the vulnerability of Washington VIPs to the flattery, hospitality - and sometimes the money - of a rich pretender has been made embarrassingly clear. So has the subtlety of Japan's lobbying.
With the backing of its government and industrialists, Spence played host for parties and seminars - even a radio show - that exalted decision-makers, particularly big and fading names. What they got was flattering attention. What Japan got was sympathetic ears. What Spence got was the seat at the head of the table, flanked by the powerful, which he hungered for more than money.
"He was a madman who thought he was Napoleon and had the ability to persuade other people that he was Napoleon," said William Harbin, a retired Foreign Service officer who sometimes worked for him.
That could be said of lots of Washingtonians. What was extraordinary, friends and enemies agree, was Spence's approach: the non-stop party. Dressed like an Edwardian dandy, snapping his fingers at dawdling help, guiding sheepish Japanese guests toward Washington's celebrated ones, Spence appeared to own the town.
PHALANX OF GIS
Late at night, his limousine would draw up to the Four Seasons Hotel in Georgetown, where $25 is a moderate breakfast tab. A half-dozen muscled young men, mostly off-duty GIs from nearby bases, were instructed to precede Spence through the lobby and peel off at the dining room so Spence could enter first, wearing a black cape lined in red silk.
In retrospect, most of his social effects seem equally calculated.
After arriving in Washington in 1979, Spence adopted as his mentor John Mitchell, former President Richard M. Nixon's attorney general. "Mitchell opened up to him like a flower," recalled Spence partygoer Timothy Dickinson.
With Mitchell as co-host, Spence threw parties in honor of bigger fish, such as Robert G. Neumann when he was U.S. ambassador-designate to Saudi Arabia.
To woo VIPs, Spence paid them up to $5,000 to address seminars on topics his Japanese sponsors picked. Black-tie dinners at Spence's home followed naturally.
Other guests were drawn, or met, through a Saturday afternoon radio talk show Spence hosted for a year. TV commentator Sevareid, another flattered
mentor, often was his high card, party invitees said.
Spence would tell them he "was having a party for Eric Sevareid and say, 'Sevareid wants you to come,' whether or not that was true," according to Robert Cassidy, an international trade lawyer. Sevareid declined to comment.
Japan's VIPs were easy to come by. The Japanese ambassador coaxed staff to go, a Japanese correspondent recalled, "and once Japanese businessmen saw officials from the embassy going to Spence's seminars and events, they were afraid they would miss out on something if they did not attend."
Few guests knew it, but Spence for several years was paid a $12,000-a-month retainer, plus thousands more in living expenses and fees, by the Japanese Policy Study Group, a think tank sponsored by more than 30 Japanese bankers, industrialists and traders, according to Justice Department records.
Its president is Motoo Shiina, the leading defense thinker in the Japanese Diet and the Liberal Democratic Party. In addition to hiring Spence as the study group's "overseas representative," Shiina lent him $345,000 cash from personal savings and Spence used the money to buy his Embassy Row home, according to court records.
Unlike most Washington influence vendors, Spence was neither lawyer nor lobbyist. He had been neither an elected official nor an appointed one. He did not, as the pros say, "follow legislation." He simply put people together.
Gossip columnist Maxine Cheshire was so impressed with Spence's skills as a host that she compared him to Ethel Kennedy. Wrote Phil Gailey of the New York Times in 1982: "What most impresses, if not benefits, his clients is his ability to master the social and political chemistry of this city, to make and use important connections and to bring together policy makers, power brokers and opinion shakers at parties and seminars."
They included Sens. John H. Glenn Jr. (D., Ohio) and Alan Cranston (D., Calif.), CIA Director William J. Casey, influence broker Roy Cohn, anti- abortion leader Phyllis Schlafly, Marine Corps Gen. Alfred M. Gray, former Attorney General Elliot L. Richardson, ambassador to China James R. Lilley and scores of senior bureaucrats.
Spence's foundation cracked badly in April 1983 when his principal Japanese backer backed off. Just what went wrong in the relationship is unclear. ''Having a representative in a foreign capital," Shiina wrote him, was considered "dubious behavior" in Japan. He would be terminated in a month.
In court action that followed, Spence faced down Shiina's demand that the $345,000 cash loan be repaid. Instead, they reached an out-of-court settlement just as Shiina was ordered to appear with financial records for a deposition.
Ultimately, in May 1988, Spence sold the Embassy Row house, repaid Shiina's $345,000 plus 6 per cent interest - and kept the difference.
By then, the limousine was gone and Spence reduced to a 1,700-square-foot apartment. Some clients remained, principally Becton Dickinson & Co., a New Jersey biomedical supplies firm which recently completed a plant in Japan. Becton Dickinson hired Spence in 1980 for about $100,000 a year to provide unspecified assistance, according to a spokesman, and the latest in an unbroken series of contracts pays him $250,000 a year plus expenses until May 1990.
But the party was winding down. Spence, to demonstrate his influence, resorted to extravagant gimmicks such as having his off-duty military friends pose as bodyguards, associates said.
On one memorable occasion, Spence insisted that White House Secret Service guard Reginald A. deGueldre remove his $22 Casio wristwatch and replace it with Spence's $8,000 gold Rolex, according to a search warrant affidavit.
A Secret Service agent claimed in the affidavit that deGueldre "admitted" stealing green and gold Truman china from the White House pantry. A plate was ''prominently displayed at his home," it stated.
In addition, on four occasions Spence and friends, according to published reports, entered the White House for unauthorized nocturnal tours, at least once with deGueldre's cooperation.
In an interview with the Washington Post, deGueldre denied stealing the china and said he had done no special favors for Spence.
Spence's social circle shrank until "the more often you came to Craig's house, the more likely you were a misfit," Scott Thompson concluded. "The more you were a real catch, the less likely you were to come back."
It seemed that his life - the real life nobody in Washington knew about - was coming full circle.
He was not from a Boston Brahmin family and patrician money.
He was one of three children of a middle-class, widowed nurse, according to contemporaries who grew up with Spence in Kingston, N.Y., 50 miles north of Manhattan.
He was also, according to William Dedrick, a 1959 classmate at Kingston High School, the senior who walked alone, carrying a major briefcase.
He had attended Syracuse University, then Boston University and earned a degree in broadcasting. He and anchorman Koppel, a sometime party guest, met as Vietnam correspondents for ABC-TV in 1969.
He arrived in Tokyo in 1971, colleagues recalled, and for some years worked both sides of the street: They said he sold to Western publications adaptations of articles produced by Japan's Ministry of International Trade and Industry. And they said he sold to MITI reports that were based on English language articles.
Shiina, in recent interviews with Japanese reporters, did not detail how he met Spence. Washingtonians who once enjoyed his orange juice and glamour are hastening to forget him. And Spence has disappeared after boarding his white Maltese terrier, Winston, with a friend.
November 12, 1989: Craig Spence Found Dead
Lobbyist Is Arrested in New York
Published: August 10, 1989
Craig J. Spence, a Washington lobbyist who is a subject of a Federal investigation of male prostitution in Washington, is facing cocaine and gun possession charges in New York, the Manhattan District Attorney's office said yesterday.
Mr. Spence, 48 years old, was arrested July 31 at the Barbizon Hotel at 140 East 63d Street in Manhattan. Gerald McKelvey, a spokesman for District Attorney Robert M. Morgenthau, said Mr. Spence had called the police to say a man in his room had just robbed him of $6,000 at gunpoint.
When the police arrived, Mr. McKelvey said, they found Mr. Spence and another man, Casey Regan, 22, in the room arguing. Mr. Spence told the police that Mr. Regan had stolen a gun from him and then used it to rob him. The police also found a small amount of cocaine in an envelope, Mr. McKelvey said.
Mr. Spence was charged with criminal possession of a loaded .32-caliber pistol, a felony that carries a maximum seven-year sentence, and with criminal possession of an illegal drug. He was released on his own recognizance. Mr. Regan was charged with possession of the gun and the drug and also with armed robbery.
At his arraignment in Manhattan Criminal Court on Aug. 1, Mr. Spence said that he met Mr. Regan on Times Square and that they returned to his hotel room.
Mr. Regan lives in Brooklyn and works as a loader in a warehouse, Mr. McKelvey said.
Mr. Spence's court-appointed lawyer did not return a reporter's telephone calls, and his business in Washington, Craig Spence Associates, does not have a listed number.
The Secret Service, the District of Columbia Police Department and the United States Attorney's office in Washington are investigating Mr. Spence's alleged patronage of a homosexual escort service there. In the 1980's, he built a reputation as an influential lobbyist who represented many Japanese concerns and threw extravagant parties but who kept his private life to himself.
November 13, 1989: Seper & Hedges Again
Lobbyist Linked to Sex Case Is Found Dead
AP November 12, 1989
Craig Spence, a lobbyist linked to a homosexual escort service under Federal investigation, was found dead in a hotel room here, the police said today.
Mr. Spence, 49 years old, was found in the Ritz-Carlton Hotel on Friday after firefighters used a saw to cut open his door, which was barricaded with a bed. Leonard Atkins, the Suffolk County Medical Examiner, said that an autopsy had been completed but that it might be weeks before a cause of death was announced.
The Washington Times reported in August that Mr. Spence disclosed he had AIDS and had threatened to commit suicide.
Mr. Spence was identified by the paper as a customer of a homosexual escort service being investigated by the Secret Service, the District of Columbia police and the United States Attorney's office for suspected credit card fraud. The newspaper said he spent as much as $20,000 a month on the service. He has also been linked to a White House guard who has said he accepted an expensive watch from Mr. Spence and allowed him and friends to take late-night White House tours.
SPENCE AS MUCH AN ENIGMA IN DEATH AS HE WAS IN LIFE
by Jerry Seper and Michael Hedges
The Washington Times, 11/13/89
The room where Craig J. Spence died was awash in the small mysteries and ironies that had followed him - and that he had perpetuated - since he came to Washington in the late 1970s, already an enigmatic figure with strange Asian connections and friends in high places.
The sergeant, who also participated in the July 3 White House tour, allegedly was asked by Mr. Spence for information on Delta Force, a special forces counterterrorism unit based in Fort Bragg, N.C.
On the bed was a newspaper clipping referring to CIA undercover agents. Scrawled on the mirror was a note written to some unnamed "chief," which also contained an obscure phrase in Japanese, "Nisei Bei," which means second-generation American.
But hidden from view, in the room's false ceiling, were personal papers, including a birth certificate describing his arrival as a small-town, middle-class boy - a heritage he spent his life trying to restyle.
"Death, you know, is only painful to the ones you leave behind," Mr. Spence told The Washington Times during an interview in August. "As a matter of fact, I'm looking forward to it. At 48, I'll still look good in hell."
The focus of a summer sex scandal, Mr. Spence was found dead Friday in his room at the Ritz Carlton Hotel in Boston. He had celebrated his 49th birthday just three weeks ago at a lavish Washington party.
The Ritz was among Mr. Spence's favorite hostelries, one of several posh accommodations he demanded in his frequent travels throughout the United States, Europe, South and Central America and the Orient.
"I've always been a first-class person in a second-class world, but I've learned to adjust," he said in the interview. "But there are places I've found where a civilized man can exist with some style and dignity."
Mr. Spence's name surfaced this summer after The Times identified the former lobbyist and prominent social host - who could arrange unauthorized late-night tours of the White House for his friends with a single telephone call - as a major client of a homosexual prostitution service being investigated by the Secret Service, Metropolitan Police, the U.S. Attorney's Office and a federal grand jury.
That investigation centered on a homosexual call-boy service that operated out of a house on 34th Place NW. The ring's clients, according to hundreds of credit-card vouchers obtained by The Times, included government officials, military officers, foreign and U.S. businessmen, lawyers, bankers, congressional aides, media representatives and other professionals.
The vouchers showed that Mr. Spence spent as much as $20,000 a month for call boys from various escort services run by the ring, including Man-to-Man, Dream Boys, Ultimate First Class and Jovan. He admitted in the interview with The Times that he had used credit cards to purchase sexual services, but strongly hinted of having "firsthand information" about people "high in government" who also were involved.
During the past few weeks, Mr. Spence told several friends that he knew "for a fact" that the call-boy operation was being investigated by the U.S. Attorney's Office and other federal authorities as a CIA front. He told the friends the CIA used the service to compromise other federal intelligence officials and foreign diplomats.
Mr. Spence claimed in the interview that he had worked for the CIA on numerous occasions and had been instrumental in a number of covert actions in Vietnam, Japan, Central America and the Middle East - a claim denied by the agency.
"How do you think a little faggot like me moved in the circles I did?" he said. "It's because I had contacts at the highest levels of this government.
"They'll deny it. But how do they make me go away, when so many of them have been at my house, at my parties and at my side?"
The grand jury investigation begun in June by U.S. Attorney Jay Stephens was described as a "credit card" probe. It is not clear, however, how vigorous federal prosecutors have been nor where the case may be headed.
The Times, in contacting a number of principal witnesses and active participants in the case, discovered that few of them had been interviewed and only a handful asked to testify before the grand jury. Several key figures had not been contacted at all. Those who were questioned were being asked mainly about national security concerns and possible security breaches at the White House.
Among those not contacted by law enforcement officials or the grand jury were:
* Officials of the Reagan and Bush administrations who were identified in The Times as having used the call-boy service and paid with credit cards.
* Those running the prostitution ring raided in February, and persons who kept the credit-card records of visits with prostitutes by people who worked in the Reagan and Bush White Houses.
* Any of several high-profile friends of Mr. Spence's who attended parties at his Kalorama home or spoke for pay at numerous seminars he sponsored as a registered foreign agent.
* Prostitutes who said they serviced Mr. Spence and military personnel whom the former lobbyist hired as bodyguards.
"I haven't heard one word from the U.S. attorney, the FBI or anyone else," said one of the men whom Mr. Spence got into the White House for a 1 a.m. visit on July 3, 1988. "The Secret Service talked to me back in the summer, after the stories were out, but nothing since then."
Mr. Spence was one key figure who was handed a subpoena more than two months ago but had yet to testify. What arrangements had been made with the former lobbyist are not known. Mr. Spence vowed during the August interview, however, that he would "never be brought back alive before any damned hearing."
Mr. Stephens has declined to comment on the case. Assistant U.S. Attorney Alan Strasser, who is handling the matter before the grand jury, also has refused comment. A spokeswoman, Judy Smith, said yesterday that the U.S. Attorney's Office would have no comment on Mr. Spence'sdeath or its potential impact on the investigation.
A participant in one of the late-night White House tours testified before the grand jury two weeks ago and was asked about the tours, missing china out of the presidential mansion and Mr. Spence's interest in the U.S. military's top-secret Delta Force. The witness, a longtime acquaintance of Mr. Spence's who had spent considerable time as a guest in his home, was not asked any questions about credit cards, Mr. Spence's alleged involvement with the homosexual call-boy ring or about the ring itself.
The witness - who was among those taking the July 3 White House tour - also described a lengthy interview with Mr. Strasser, Secret Service agents and then a brief questioning period before the federal panel.
"They pulled out a picture book containing the White House china collection and asked me about the Truman china," said the witness, who asked not to be identified. "They wanted to know if I had seen anything like that. They strongly intimated that more things were missing."
Mr. Strasser, according to the witness, also asked during the private discussion and before the grand jury about the gift by Mr. Spence of an expensive Rolex watch to a U.S. Army sergeant. The sergeant, who also participated in the July 3 White House tour, allegedly was asked by Mr. Spence for information on Delta Force, a special forces counterterrorism unit based in Fort Bragg, N.C.
"They asked me what I thought Spence wanted to know about the Delta project," the witness said. "I said it could mean he was just interested in the young guys there or something else."
The questioning by federal authorities became most detailed when it turned to the subject of the late-night tours. "They asked if we went in any offices, if I had seen any documents or if any documents had left the White House," the witness said.
Secret Service officials have publicly stated there was no breach of security during the tours and that they had no concern that entry was made by the late-night visitors into unauthorized areas of the White House.
Mr. Spence also gave an $8,000 Rolex watch to Secret Service uniformed officer Reginald A. deGueldre, who was assigned to the White House security detail. Mr. deGueldre has admitted in an affidavit that he gave Mr. Spence a piece of Truman china from the White House collection.
In August, Mr. deGueldre and another Secret Service officer, who has not been identified, were suspended indefinitely without pay and a third was placed on administrative leave with pay. Secret Service officials said at the time that the suspensions were the first step to possible criminal prosecution of the two men, although none has yet taken place.
Mr. deGueldre said recently he had not been approached by any federal authorities for an interview or asked to testify before the grand jury. "I have no idea what is going on," he said. "I have not heard from anyone at all."
The grand jury witness said federal authorities also inquired about Mr. Spence's alleged drug use. In his interview with The Times, Mr. Spence admitted to being a heavy cocaine user. He was arrested for possession of cocaine in New York last summer.
The witness also was shown a collection of photographs of male youths between "14 and 17 or 18 years old" and asked if any were a youth Mr. Spence lived with and introduced as his son. "They were a rough bunch of customers," the witness said. "The photographs looked like things that might have been found in the house they raided. I was asked if Craig had a son, and I said I didn't believe he did."
In the August interview, Mr. Spence admitted to using the 34th Place call-boy service, but said the amounts of the charges had been inflated by someone connected with the operation. As a result, he said, he fired his accountant over charges he said he had not authorized.
The accountant, Peter Chase, denied he had been fired and said all the credit-card charges had been verified and each contained Mr. Spence's signature. He steadfastly has declined to comment specifically about his former client, but did confirm that records involving Mr. Spence had been subpoenaed by the Secret Service, that no one from the U.S. Attorney's Office had talked with him and that he was not scheduled to appear before the grand jury.
Mr. Spence, who said in August that he had AIDS and who threatened to commit suicide rather than die of the disease, was scheduled for a hearing Feb. 2 in New York City on weapons and drug charges. He was arrested July 31 at the Barbizon Hotel on East 63rd Street with a 22-year-old Brooklyn man identified by police as Casey Regan, an alleged male prostitute. Two other hearings, one in September and the other last week, had been postponed.
Police seized a loaded .32-caliber pistol and confiscated a small quantity of a white powder believed to be cocaine after a report of a disturbance at the hotel.
During his days as one of Washington's premier hosts, Mr. Spence dressed in finery and lived extravagantly, affecting touches like scarlet-lined capes and stretch limousines.
Among those who attended his parties and were featured at seminars he sponsored were journalists Eric Sevareid, Ted Koppel, William Safire and Liz Trotta; former Ambassadors Robert Neumann, Elliott Richardson and James Lilly; the late John Mitchell, attorney general in the Nixon administration; Mr. Casey and other CIA officials, including Ray Cline, former deputy director of intelligence for the agency; former Lt. Gen. Daniel O. Graham, an expert on the Strategic Defense Initiative who now heads High Frontier Inc.; Sen. John Glenn, Ohio Democrat, and Sen. Frank Murkowski, Alaska Republican; and Joseph diGenova, former U.S. attorney in Washington, and his wife, Victoria Toensing, a former deputy assistant attorney general.
Arnaud de Borchgrave, editor-in-chief of The Times, attended a party for Mr. Lilly hosted by Mr. Spence at the former lobbyist's Kalorama home.
Following the August interview in New York, Mr. Spence returned to Washington and reportedly stayed with friends. He maintained a high profile on the bar and restaurant circuit, and was spotted at several places during the past two months.
Meanwhile, several members of Congress, federal officials, military officers and others have told The Times that they are concerned that the lavish parties and Japanese-sponsored seminars thrown by Mr. Spence, at which the elite of Washington and officials from Japan, China and elsewhere mingled, might have compromised U.S. security.
Rep. Helen Delich Bentley, Maryland Republican, for one, recently questioned the former lobbyist's ties to the Japanese government in a speech on the floor of the House. Citing news articles in the United States and Japan, Mrs. Bentley asked whether plans for the F-16 jet had been transferred by Mr. Spence to a Japanese government official, Motoo Shiina, and later turned over to the Soviet Union.
"I bring this to the floor today, Mr. Speaker, because I am frankly puzzled that these stories are out - in print both in Japan and in America -and there seems to be no official investigation into what to me are very grave charges," she said.