Mysteries: The Man Who Knew Too Much?

By Richard Lacayo

Joseph Daniel Casolaro believed he was on to a big story. He also thought it might be a dangerous one. Just a few weeks ago, the free-lance writer told his family in Fairfax, Va., that someone might try to kill him and make it look like an accident. On Aug. 10 he was found dead in a hotel room in Martinsburg, W. Va., where he had gone to meet an unnamed source. There were slash marks around his wrists and a note near his body. It read in part, "I'm sorry, especially to my son." The official verdict: suicide.

Last week West Virginia authorities were taking a second look. Relatives and friends are insisting that Casolaro, 44, might have been murdered in connection with a book he was writing. In recent months he had been looking into the eight-year legal battle between the Justice Department and Inslaw, Inc., a computer software company based in Washington. Inslaw executives charge that Reagan Administration officials pirated their software, designed for law-enforcement purposes, then sold it. Casolaro believed the Inslaw affair was just part of a much deeper tangle of intrigues that he called "the Octopus." They included the Iran-contra arms deals and operations of the renegade bank B.C.C.I.

In addition to his claims of high-level conspiracy, Casolaro did research that put him on the trail of some dangerous characters. A key part of his investigations, for example, centered on gambling and attempted arms deals at the Cabezon Indian reservation near Indio, Calif. One figure in Casolaro's proposed book would have been John Philip Nichols, a financial adviser to the Cabezons, who was sentenced to four years in prison in 1985 for attempting to hire a man to kill two people.

After a few hours of investigation into Casolaro's death, local police took his body to a funeral parlor. The body was immediately embalmed -- though police had not reached his family to get permission. That only heightened his family's suspicions. "I don't think Danny was depressed," insists his brother Anthony, an Arlington, Va., physician, who says Casolaro was convinced that he had succeeded in tying the Inslaw case into "the Octopus." "My sense was that he was very excited."

But Casolaro may have had a motive for suicide. In recent months he had been badly in need of money and spoke of refinancing his house. Just before he died, his book proposal was rejected by Little, Brown, the New York City-based publisher that he considered his best hope for getting his work printed. Little, Brown publisher Roger Donald told the writer that his conspiracy notion was not sufficiently well supported by the evidence he advanced.

After Casolaro's family raised questions, West Virginia authorities performed an autopsy, which found no signs on his body of a physical struggle. But because the body had been embalmed, pathologists may have had difficulty detecting any foreign substances in Casolaro's blood. "We're not ruling out foul play," said Dr. James Frost, deputy medical examiner, "but I have no evidence of it at this time." Former Attorney General Elliot Richardson, now an attorney for Inslaw, called last week for a federal probe of Casolaro's death. Perhaps nothing less will put to rest the questions that surround it: Did Casolaro know too much about a shady operation? Or did he know too much about himself?

With reporting by Jay Peterzell/Washington