Lawyers for the NBC television network, which is owed more than $3 million by Lyndon H. LaRouche Jr. because of a federal court judgment, say they are skeptical about LaRouche's assertions that he has only $5,000 in assets and would not be able to pay if he loses his appeal.
"If LaRouche is so tightly entwined with these other organizations that enable him to live on a multimillion-dollar estate and travel with an entourage . . . then somebody's got the money," NBC attorney Peter K. Stackhouse said. "We've got a right to find out who's got it."
Therein lies one of the most enduring questions about Lyndon LaRouche: Where does his organization get its money?
Interviews with former LaRouche associates and an examination of internal documents of LaRouche's group -- some filed in the NBC suit -- paint a portrait of an organization with considerable financial assets and fund-raising prowess.
The LaRouche group and its allied organizations raise money by gathering intelligence for corporations or individuals for a fee, selling literature, soliciting money over the telephone and getting loans and donations from members and supporters, according to ex-members, others familiar with the organization and published reports.
While ex-associates back up LaRouche's assertion that he has few assets in his name, they dispute his contention that he has no knowledge of the group's finances. "There's no important financial decision made without him," said one ex-member.' Poor Income Performance'
Memos LaRouche wrote to members in 1980 show that he was informed of the financial details of companies associated with the group and that he was highly critical of the companies' operations.
Internal documents also show that in 1981 LaRouche criticized group members for "a poor income performance" that he ascribed to members' "resistance" to his policies.
He praised members' money-raising in New York, Italy and France, but he said others must sharpen their political attacks on targets such as former secretary of state Henry Kissinger. Potential donors approached in public will be receptive and "will spend for such purposes," he wrote.
The 1981 internal documents show the group was taking in an average of $500,000 a month. Ex-members and other sources say that the money raised in election years, when LaRouche and many associates run for office, is much higher. They estimate the group raised about $2 million a month, some of it in loans, during most of 1984, when LaRouche ran for president.
LaRouche said the organizations tied to him survive financially because of his "dedicated and vastly underpaid" associates and a "hand-to-mouth publishing business."
Former members and other sources confirm that LaRouche's associates are low-paid, with many receiving tiny stipends. Jeffrey Steinberg, a top aide to LaRouche, said in a deposition that he receives an annual salary of $12,000. LaRouche's associates do publish a newspaper, New Solidarity, and numerous other publications and books.
The group's well-dressed and well-groomed members sell these publications in airports and shopping centers all over the country, and they are expected to maintain rigorous fund-raising quotas, according to ex-members, other knowledgeable sources and internal documents. Group leaders sometimes lecture members who do not reach their quotas, one ex-member said.
They also use the telephone to raise money. Various sources say the fund-raisers sometimes use the group's apocalyptic rhetoric, saying, for example, that saving the world from nuclear disaster is dependent on on the group's fund-raising campaign.
Some people have criticized their telephone tactics. The December issue of the Reserve Officer Association's magazine, The Officer, contained an article headlined, "Members be warned."
"A number of complaints have been received from ROA members reporting telephone solicitations from the Fusion Energy Foundation and the Schiller Institute," two LaRouche-affiliated groups, the article said. "Apparently both of these organizations have referred to ROA" in fund-raising. "ROA has not endorsed either organization."
Steinberg said criticism of the group's telephone fund-raising comes from LaRouche enemies who manufacture allegations.
The group makes some money gathering intelligence, according to LaRouche and former members. Among its clients are corporations, individuals and government agencies, they said. In a typical case, LaRouche associates might be hired by a French company to provide a report on the Mexican oil industry for, say, $5,000.
The group's electoral wing has received large sums from the Federal Election Commission in federal matching funds. In 1980, LaRouche's presidential campaign raised $2.14 million, of which $530,000 was in federal matching funds. Last year, his campaign raised $6.1 million, of which $494,000 was in matching funds.
Nonmember supporters of the organization provide much of the campaign money, and a lot of the funds to support the group's other enterprises.
J. Scott Morrison, a farmer in Lebanon, N.J., gave $2,500 to LaRouche's presidential campaign last year, according to FEC records. Morrison said he also invested in Lafayette/Leesburg Ltd. Partnership, the LaRouche-affiliated firm developing its new Leesburg printing plant.
Morrison declined to say how much he invested or on what terms. But he said he thinks LaRouche is "an interesting guy, a philosopher." He said he supports many of LaRouche's goals and considers LaRouche "pro-American, prodevelopment, proconservative."
Members of the group are also heavily urged to give and lend money, ex-members said. Many members come from well-to-do families and have parted with substantial trust funds, they said.
"I've known people who had trust funds and liquidated them, sometimes up to $100,000," said one ex-member in an NBC interview filed in U.S. District Court in Alexandria.
"A good deal of psychological and emotional pressure would be put on them, and they would eventually cave in and donate the money," said the ex-member. "I've known people who have donated every penny of savings they had, taken all their credit cards and lent them up till the limit, and put themselves on the brink of financial ruin."
Other ex-associates said they know of similar cases.
The group usually paid back members' credit card or bank debts, but it would not pay off the outstanding debts of people who left the organization, according to ex-members and published reports. They said that members have left the group with $10,000 or $20,000 debts run up by the group, and a bad credit rating.
Such tactics provided strong incentive not to leave the group, ex-members and published reports said.
Steinberg, the group's spokesman, said these allegations are "garbage." He added that "the policy is to pay loans back as promptly as possible."
William Weld, the U.S. attorney in Boston, said his office is investigating complaints by some contributors to LaRouche's presidential campaign that after they made credit-card payments to the LaRouche group, much larger amounts were charged to their accounts without their permission.
One person who complained to federal authorities is Frank Murray, a Massachusetts restaurant employe. Murray said in an interview that in August, during a visit to a motor vehicle registration office, he subscribed to a LaRouche-affiliated publication for $25. The man selling the subscription put the charge on Murray's credit card, Murray said.
Murray said that in the next two months, he received numerous phone calls from people identifying themselves as LaRouche supporters telling him to watch presidential candidate LaRouche on television.
"Every conversation ended the same way, 'Could I loan them $1,000?' " Murray said. "There's no way I could afford that."
But in October Murray said he found a $1,000 charge to Independents for LaRouche, one of LaRouche's presidential campaign groups, on his credit card -- a charge he said he had not authorized. Murray said he called his bank and stopped payment on the $1,000. Credit Card Charges
Murray is not alone in his complaints, documents on file in U.S. District Court in Newark show.
The Newark-based First Fidelity Bank, which processed credit card charges for LaRouche campaign organizations, said in court papers that numerous people have complained that the LaRouche campaign made unauthorized charges on their credit cards and that the allegedly unauthorized charges total more than $540,000.
"The reasons stated by the credit card holders for such disputed charges strongly suggested impropriety or wrongdoing by the LaRouche organizations in their solicitation of campaign contributions," the bank said in documents in connection with a lawsuit it filed in November against LaRouche and his campaign organizations.
The LaRouche campaign denied that it misused credit accounts.
It filed suit against the bank in November for placing $200,000 of its funds in an escrow account, alleging that removing the money from its control hurt its campaign. On Nov. 15, the LaRouche campaign also filed suit in federal court in Boston to try to stop Weld's investigation, charging that the FBI, the Justice Department and certain banks were biased against LaRouche and were encouraging people to make the complaints. The investigation and the lawsuits are pending.
The LaRouche newspaper, New Solidarity, said Weld is corrupt, a liar and a "Harvard punk."
LaRouche associates in New Jersey have been handing out leaflets alleging that First Fidelity Bank is tied to organized crime and narcotics dealing. They also posted "Wanted" posters for the bank's president, claiming he had committed grand larceny.