Good afternoon, my name is Larry Klayman.  I am the Chief Counsel of Judicial Watch, a not-for-profit organization with offices in Washington, DC, the West Coast and around the country.  I represent U.S. Navy Lieutenant Commander Jack Daly, who is the Plaintiff in this case and is seated at our counsel table.  Next to him are Michael Hurley, a senior attorney with Judicial Watch.  Paul Orfanedes, also a senior attorney with Judicial Watch, is also present, along with Richard Bersin, our local counsel here in Seattle.


Commander Daly has brought this lawsuit to recover damages from the Defendants for laser-induced eye injuries that he sustained when the crew of a Russian vessel known as the Kapitan Man fired a laser at him as he was conducting a photo-surveillance mission against the Kapitan Man.  Incredibly, this attack by the Russians occurred in U.S. waters and in American territory.  The Defendants are the Far Eastern Shipping Company, known by the acronym FESCO.  FESCO is a Russian company headquartered in Vladivostok, Russia and owned in part by the Russian government.  The other two defendants are companies wholly owned by FESCO – FESCO Agencies N.A., Inc. and FESCO Intermodal, Inc.  Commander Daly sued these Russian-owned companies because they were the owners and operators of the Kapitan Man when the laser attack occurred.


At this point in the trial, I have the opportunity to tell you what this case is all about.  The purpose of an opening statement is to give you a preview of the evidence that will be presented in our case.  It’s like a preview of a movie.  While there are technical aspects of the case, the facts are really quite simple.  Like every story, they easily fit together like the pieces of a simple puzzle and make sense in the total context of what happened to Commander Daly.


This case is about a dedicated, highly decorated U.S. Navy intelligence officer who was seriously injured during a photo-reconnaissance mission against a suspected Russian spy vessel known as the Kapitan Man.  He was injured when the crew of the Russian ship fired a laser at him in the Puget Sound, Washington.  That Navy intelligence officer is Commander Jack Daly, a husband and father of three children.  Commander Daly, who was severely injured by this Russian attack on U.S. territory, is here today seeking the justice he is entitled to – money damages for the physical injury and emotional pain and suffering from the Russian companies that owned and operated the Kapitan Man whose crew injured him by firing a laser at him in American waters.


The story of this unprovoked laser attack by the Russians will unfold as each witness testifies.  Some witnesses will testify in person here in court, while others have given videotaped pretrial testimony that will be presented to you by video on the television screen.


Now, let me tell you what we will prove in our case.


This unfortunate story begins on Friday, April 4, 1997 in Victoria, British Columbia, about 2 hours north of Seattle.  Based on his considerable experience and expertise in U.S. counter-espionage, Commander Daly was the Office of Naval Intelligence’s Foreign Intelligence Liaison Officer attached to the Maritime Forces Pacific Command, a combined command staffed by U.S. and Canadian military personnel located in Esquimalt.  Commander Daly was hand picked by the Director of Naval Intelligence – Admiral Michael Cramer –for this very critical and choice assignment in Victoria.  On April 4, 1997, Commander Daly participated in an official U.S. Navy photo-surveillance mission against the Kapitan Man, which was owned and operated by the Russian Defendants.  The Kapitan Man was suspected of monitoring the movements of U.S. nuclear-powered, ballistic missile submarines and U.S. aircraft carriers for Russian intelligence.  Under the cover of passing itself off as a commercial vessel, routine intelligence collection by Commander Daly in his job as a Navy intelligence officer had revealed that, over the years, the FESCO-owned Kapitan Man had made course deviations, as well as departure time and arrival time deviations, to coincide with the movements of U.S. nuclear-powered ballistic missile submarines. 


On the April 4 surveillance mission, Commander Daly was a passenger in a Canadian CH-124 “Sea King” helicopter piloted by Captain Patrick Barnes of the Canadian Air Force.   Both Commander Daly and Captain Barnes were on the right side of the helicopter, wearing similar conspicuous light blue flight suits, while the rest of the aircrew was on the left side.  On April 4, at approximately 12 noon, the Russian Kapitan Man was in U.S. territorial waters, approximately five nautical miles north of Port Angeles, Washington, and was proceeding in an easterly direction in the inbound lane of the Strait of Juan de Fuca to the Port of Tacoma.  Not coincidentally, the USS Ohio, a U.S. nuclear-powered, ballistic missile submarine, had left the Bangor, Washington submarine base and heading out to sea through the Strait of Juan de Fuca in the same vicinity as the Kapitan Man.  The Strait of Juan de Fuca is a narrow bottleneck between Vancouver Island and Washington State.  The Russian ship obviously timed its arrival so that it passed within only 1,000 yards of the USS Ohio, as the surfaced submarine proceeded out to sea in a westerly direction in the outbound lane of the Strait.


The purpose of Commander Daly’s routine surveillance mission was to collect intelligence concerning the movements and intentions of Russian vessels in U.S. waters.  This mission was directed against this Russian “Special Interest Vessel” named the Kapitan Man.  During the surveillance mission, Commander Daly used a 35mm Nikon digital camera with the Kodak DCS-420 digital system to take photographic images of the Kapitan Man.  In addition to the built-in, internal infra-red filter in the camera, Commander Daly also used an optional feature called a Hot Mirror filter.  The purpose of these filters was to attenuate or lessen the impact of infra-red rays.  Commander Daly was seated on the same side of the helicopter – the right side -- behind the pilot, Captain Barnes. 




As shown in this pictorial exhibit, the Canadian helicopter took off from Pat Bay and proceeded over land to the Strait of Juan de Fuca .  As soon as the helicopter went “feet wet” – the naval term for flying over water – Commander Daly opened the side cargo door of the helicopter so that he could take photographs of the Kapitan Man.  The time was approximately 12:40 PM and the mission against the Russian ship Kapitan Man was under way.




As expected, the Russian ship was proceeding to the Port of Tacoma in the inbound lane of the Strait at the very same time that the USS Ohio was exiting the Strait in the outbound lane.  Commander Daly took images of the surfaced submarine in the Strait just after it had passed the Russian ship.  If Commander Daly and his helicopter had arrived just a few minutes sooner, he could have photographed both the U.S. nuclear ballistic submarine and the suspected Russian spy vessel in the same picture.  Establishing the proximity of the Kapitan Man to the submarine was a significant item of intelligence collection by itself.


The helicopter then proceeded to circle the Russian ship in clockwise oval flight path.  Commander Daly took images of the extensive and very unusual antenna array on this supposedly commercial vessel.  He also took images of the Russian ship from many other vantage points, including the port side and the starboard side of the vessel.  In nautical terms, the port side is the left side and the starboard side is the right side.


Because it was a bright, clear, sunny day, Commander Daly noticed many -- what he thought at the time were -- solar glints or reflections of the very bright sun off the metal surfaces of the Russian ship and the surrounding water.  One such flash of brilliant light even made him turn away and rub his eyes.  At that time, he did not suspect that he had been hit by a laser flash – he mistakenly thought that he had only been momentarily blinded by the bright sun, just as we all have at sometime in our life.


When he returned from the surveillance mission, Commander Daly handed the camera to Chief Petty Officer Scott Tabor, a U.S. Navy imagery analyst, who, like Commander Daly, also had been hand picked by the Director of Naval Intelligence for this critical assignment here in the Pacific Northwest. Chief Tabor downloaded the images from the digital camera to his computer and examined them.  One of the images – Image 16 on the camera -- showed a brilliant and intense red flash emanating from the area of the port side navigational light of the Kapitan Man.  SHOW THE JURY THE BLOWUP OF IMAGE 16.  The red flash had a white center and a halo around it.  Another image – image 21 on the camera -- showed the Kapitan Man’s starboard side running light, which upon close inspection by Tabor appeared to be turned OFF. 


Based on his examination and analysis of these images and the other images of the Russian ship, Chief Tabor approached Commander Daly and observed him rubbing his eyes.  Chief Tabor asked Commander Daly if he was experiencing any eye irritation or headaches.  Commander Daly responded that his eyes felt gritty and that he had a headache.  Chief Tabor then showed Commander Daly image 16 -- the image of the red flash -- and told CDR Daly that this could possibly be the image of a laser beam.  CDR Daly initially was skeptical but nevertheless advised the helicopter squadron’s operations officer of Tabor’s assessment.


As he proceeded home on the same evening, CDR Daly first began to experience symptoms associated with a laser-induced eye injury.  In addition to irritation and pain predominantly in his right eye, CDR Daly now was experiencing photophobia or extreme sensitivity to the on-coming headlights of cars – something he had never experienced before.  He sought immediate local medical assistance that evening.


On Saturday morning, CDR Daly awoke with a pool of blood in his right eye and further eye irritation and pain.  On the same morning, Captain Barnes (the helicopter pilot) also awoke with blood in his eye, eye irritation and pain.  That the same injury occurred in place and time to both Commander Daly and Captain Barnes was obviously no coincidence! 


On Sunday morning, April 6, 1997, CDR Daly notified his Canadian supervisors.  After being briefed by his Operations Office, MARPAC Commander, Rear Admiral Russell Moore directed that the highest levels in the U.S. and Canadian governments, including The White House and the State Department, be immediately notified.  


Our evidence will also show that on Monday, April 7, CDR Daly, Captain Barnes, and the other Canadian aircrew members were flown by the U.S. military to the U.S. Army Medical Research Detachment (“USAMRD”) in San Antonio, Texas.  Again, not coincidentally, this facility is the center of U.S. expertise in the assessment, diagnosis and treatment of laser-induced eye injuries.  Obviously, then, both the American and Canadian governments believed that their counter-intelligence servicemen had been attacked in U.S. waters with a laser by the Russians.  Commander Daly was thoroughly examined by Dr. David Scales, an Air Force ophthalmologist and retinologist who was highly experienced in diagnosing laser-induced eye injuries.  Many other ancillary areas of expertise at this facility also were used to assist Dr. Scales in the diagnosis of CDR Daly’s injuries, including institutional expertise in vision effects, laser bio-effects, laser psychophysiology, laser physics, and laser intelligence. 

CDR Daly complained of right eye pain, headaches, loss of vision and extreme sensitivity to light – symptoms that he had never previously experienced and that he began to experience shortly after the surveillance mission.  Based on these tests and examinations, Dr. Scales, one of the foremost experts in laser eye injuries in the world, found 5 small, threshold level lesions on the retina of CDR Daly’s right eye that were evidence of laser exposure. 


On April 14, based on these tests and examinations, the U. S. Army Medical Research Detachment concluded that there was a HIGH PROBABILITY that CDR Daly had suffered MULTIPLE LASER EXPOSURES to the retina of his right eye.  The experts also concluded that the retinal lesions on CDR Daly’s right eye were PROBABLY caused by a REPETITIVE PULSED laser, most likely a Neodymium:YAG laser.  This diagnosis was subsequently reconfirmed by Dr. Scales and the other experts at the U.S. Army Medical Research Detachment who examined CDR Daly on follow-up visits in May 1997, August 1997, June 1998, December 1998.  As Dr. Scales’ examinations occurred just after Commander Daly’s encounter with the Russian ship – the Kapitan Man – it is a very reliable and strong diagnosis.


In late 1998, the Director of the U.S. Army Medical Research Detachment referred CDR Daly to Dr. Howard Cohen, an ophthlmalogist specializing in laser eye injuries.  Dr. Cohen had previously helped found the U.S. Army Medical Research Detachment’s laser trauma center in the early 1990’s in San Francisco.  Dr. Cohen examined CDR Daly and found 6 to 7 threshold lesions on the retina of CDR Daly’s right eye and 2 threshold lesions on the retina of his left eye.  These lesions are permanent and, in Dr. Cohen’s independent opinion, are characteristic of laser scars.  He found that the history and clinical findings supported a laser injury, consistent with renowned expert Dr. Scales’ early diagnosis.


Thus, as we will show, the nature and cause of CDR Daly’s eye injuries is exposure to a laser on April 4, 1997 during the surveillance mission of the Russian ship Kapitan Man.


Not insignificantly, our evidence also will show that Captain Barnes suffered a laser exposure injury too.  On subsequent visits to the U.S. Army Medical Research Detachment, Dr. Scales concluded that Barnes likely had suffered laser exposure too because his symptoms were similar to CDR Daly’s symptoms, he had been seated on the right side of the helicopter as had CDR Daly and he had looked repeatedly toward the Kapitan Man to monitor the helicopter’s distance from the vessel as it pursued a clockwise flight path around the ship.  Unlike Commander Daly, during the surveillance mission, Captain Barnes had worn his protective aviator visor, which may have lessened the impact of the laser exposure.   Like CDR Daly, Captain Barnes had never previously experienced any of these symptoms.    Furthermore, as an aviator whose career depended upon his eyesight, Captain Barnes had passed rigorous flight physicals to keep his license to fly.  It was unlikely that he would complain about his eye pain after the surveillance mission unless that pain had been real and severe.  To have an eye injury would put an end to Captain Barnes’ career as a pilot.  Indeed, this is was later happened. 


Importantly, the evidence will also show that Canadian authorities believed Captain Barnes was attacked by a laser – and he received early retirement and a medically-based pension as a result.  The U.S. and Canadian governments also began to provide new, more laser resistant visors to its pilots after the attack.  However, for reasons of diplomacy and so-called good relations between the United States, Canada, and Russia, each country sought to downplay public discussion of the Russian attack. 


We will prove that CDR Daly has at least 5 small, threshold level laser-induced lesions on the retina of his right eye and 2 threshold level laser-induced lesions on the retina of his left eye, all of which were caused by the Russians’ laser attack.  As a result of the laser exposure, CDR Daly continues to experience chronic eye pain and periodically has surges of pain in his eyes, sometimes so intense it is as if a needle were being elbowed in his eye.  He continues to experience headaches and he sees spots in his vision, which the medical doctors specifically found were consistent with laser injury.  He can no longer drive at night because he has photophobia or extreme sensitivity to light, such as on-coming car headlights at night.  He also has suffered post-traumatic stress syndrome.


In short, Commander Daly has experienced and continues to experience both severe physical and emotional injury from the Russian laser attack on American territory.


Because of his eye pain, he is often in so much pain that he must miss work and stay in a dark room.  He has a real and reasonable fear that he could lose his eyesight.  He will be unable to obtain health insurance from any future employer covering his eye problems.  Finally, his employability has been seriously and adversely affected because of the amount of time that he requires to be away from work because of sometimes almost unbearable eye pain.  To date, there is no known treatment available to alleviate his pain.


 There were 2 other vessels in the immediate vicinity of the Kapitan Man during the surveillance mission – the USS Ohio, the nuclear-powered ballistic missile submarine that was exiting the Strait – and a U.S. commercial vessel named the President Jackson.  We will prove that neither the USS Ohio nor the President Jackson vessel had any optical systems – including laser devices -- in operation on that day, nor did they have any conceivable reason to fire a laser at CDR Daly or the Canadian helicopter conducting the surveillance mission.


So, our evidence will narrow the laser source to the very subject of the April 4 surveillance mission – this Special Interest Vessel owned and operated by the Russians -- the Kapitan Man.  We will show you images of the Russian ship taken by CDR Daly during the surveillance mission. 

Importantly, you will see from those images that the Kapitan Man’s starboard side navigational light was turned OFF.  This is significant because Coast Guard LCDR Tolbert, who was a member of the boarding team that searched the Kapitan Man, will testify that ONE SWITCH controlled BOTH the Kapitan Man’s port side (left side) and starboard side (right side) running lights and that the remaining running lights on the bow and stern of the vessel were controlled by another, DIFFERENT switch.  We will show you that the port side running light could not be turned ON when the starboard side navigational light was turned OFF.  

The configuration of the Port Side running light is important. We will show you pictures of the strange or unusual configuration of the navigational lights of the Russian ship on April 4, 1997.  Importantly, the navigational lights on the port side and the starboard side of the Russian ship were identical in configuration except for the color of the lens or globe.  The port side lens is red so that the light emitted appears red in color and the starboard side lens is green so that the light emitted from the right side appears green in color.  The navigational lights are housed in a black-colored recessed niche just under the front bridge windows of the ship.  There are two light structures on each side, one stacked on top of the other.  The bottom light is fixed to the floor of the recessed niche area, while the top light is mounted on an assembly affixed to the outside of an access door which is hinged on one side and can be opened from inside the bridge by pulling the door toward you, just as you would open a closet door.  The bridge of the ship is where the ship’s navigator drives the vessel.  When the access door is closed the top light is positioned just above the bottom light.  When the access door is opened from inside the bridge, the top light can easily be repaired or maintenance can be performed, and, importantly, quickly removed and replaced.


Our evidence regarding miniature lasers, small enough to fit within the port side running light, is important to you because of the unfortunate fact that on April 7 the Kapitan Man and the Russian Consulate were given at least 11 hours advance notice that the Russian ship would be searched to determine if a laser could be found aboard the ship.  The Russians obviously had a motive to remove the laser.  Not surprisingly, they obviously did not wait for the search party to come and find the laser and, therefore, no laser was found.   We will also show that the search party was not properly trained to find a laser, that the effort was “hit or miss,” looked primarily at things in plain sight and there was no reasonable expectation that a compact laser could be found in 2 to 4 hours on this huge ship by a boarding team looking for a large, bulky laser, not a compact one.


  Here is how the Russians were negligently and carelessly “tipped-off” to remove the laser before the American search party arrived.  On Sunday April 6, after Commander Daly had advised his superiors at MARPAC and after Canadian Admiral Moore had directed that the highest levels in the U.S. and Canadian governments be notified, the U.S. Coast Guard Commander for the Thirteenth District in Seattle, Rear Admiral John Spade, had discussions with higher authorities in Washington, D.C. about the suspected Russian laser attack on Commander Daly and the Canadian helicopter during the photo-surveillance mission of the Russian ship.  Admiral Spade immediately called Captain Myles Boothe, the Coast Guard Captain of the Port of Tacoma to brief him on what Boothe called a “national security” issue.   Based on Admiral Spade’s high level discussions of this “national security issue” with Washington, D.C., it was decided on Sunday evening, April 6, that the U.S. Coast Guard would conduct a search of the Russian ship to determine if there was a laser aboard.   

On Monday, April 7, 1997, the Russian ship was prevented from departing the Port of Tacoma at its scheduled departure time of 6 A.M.  So, the Russians had knowledge of the impending search at least as early as 6 A.M. on April 7 – more than 10 hours in advance of the search.  At approximately 9 A.M. on Monday, April 7, Captain Boothe of the U.S. Coast Guard issued a written order detaining the Russian ship.  It was Coast Guard Standard Operating Procedure to immediately fax a copy of inspection orders to the local agent of the ship, in this case the defendant Russian –owned FESCO Agencies here in Seattle.


As astonishing as it may seem, we will prove that even though the Russian owned Kapitan Man was detained in port to be searched for a dangerous weapon that was suspected to have been used to attack a Navy officer in the line of duty in American waters, and even though this was considered by Captain Boothe to be a “national security” issue, neither the U.S. Coast Guard nor any other authority imposed any surveillance on the Russian ship on Monday April 7 or at any other time during that weekend to ensure that the crew did not dispose of or remove a laser device from the ship before the search could be conducted.


After detaining the Russian ship, Captain Boothe assembled a boarding team to conduct the inspection of the vessel.  The boarding team was composed of personnel from the U.S. Coast Guard, Port Security, the Navy and the FBI.  However, the evidence will show that none of the boarding party members had any education, training or experience in the identification or use of lasers.  Some boarding team members were told to look for a large, bulky laser device with big cables and a large power source, notwithstanding that laser range finders capable of causing eye damage can be smaller than a pack of cigarettes.  None of the boarding team members had any experience conducting a criminal investigative search of a vessel as large as the Kapitan Man.  As the U.S. Coast Guard personnel testified, the search was really just a routine safety inspection, which is all that the boarding team members were trained to do.


The boarding of the vessel took place at approximately 5:30 P.M. on April 7 – incredibly, approximately 11 ½ hours after the ship had been detained -- and the entire search of this huge vessel lasted only 2-4 hours.  Captain Boothe observed in the oral testimony, which we obtained from him prior to this trial, that it would take 2 to 3 days to conduct a thorough inspection.  Because this was a “national security” issue, certain boarding team members were armed with weapons for security reasons.  One boarding team member described parts of the search as being “hit or miss” and all the boarding team members that previously testified recounted looking for things in plain sight but not thoroughly looking in every box, cabinet or drawer in every space on the vessel.  The boarding team never gained access to the ship’s library, never searched the numerous, large cargo containers on the vessel, never searched in the motor vehicles that were part of the ship’s cargo, and never looked in the cabinets and drawers of the crew quarters, let alone searching all of the crew quarters.


A Navy photographer who was a boarding team member took photographs of the Russian ship during the search.  One of these photographs – SHOW BLOWUP OF PHOTO -- showed the starboard side running light, which, as you can see, was mounted on an assembly affixed to the outside of an access door on the right side of the bridge of the ship.  Testimony by the Russian ship’s captain indicates that the port side running light and the starboard side running light were identical except for the color of the lens or globe.  POINT TO THE LENS. 


Two boarding team members who examined the port side navigational light area of the Kapitan Man, however, did not recall seeing any running light mounted on an assembly affixed to the outside of the access door on the left side in the bridge area.  We will show that because these boarding team members were not familiar with the Russian ship’s running light configuration – which Coast Guard Captain Boothe called a “strange configuration” -- they had no way of knowing that the absence of a running light attached to the outside of the port side access door was “unusual” or that the light had been removed.  Indeed, the boarding team members who inspected this port side running light area testified that they thought nothing had been removed. 


The evidence will show:


n    because the Russians had advance notice of the search,

n    because the boarding party members lacked education, training or experience with lasers,

n     because the boarding team was unfamiliar with the running light configuration on the Russian ship, 

n    because the search was conducted in 2-4 hours in stead of 2-3 days, and

n    because many areas of the Russian ship were not searched,


the boarding party, which was hardly a skilled military operation, did not find any laser device.  But the evidence will clearly establish that the Russian crew of the Kapitan Man had more than ample time to remove or conceal a laser before inspection began.  The laser attack occurred on April 4 and the search did not take place until April 7 at 5:30 P.M., three and a half days later.


          The facts of this case thus fit simply and logically together, like the pieces of a simple puzzle.  Unfortunately for Commander Daly, the facts prove that he was the victim of a hostile laser attack by a foreign power – Russia – against an American serviceman in the line of duty in U.S. territory.  While for diplomatic reasons the U.S. and Canadian authorities have been reluctant to discuss this attack on their servicemen – as relations with Russia are perceived to be important – the regrettable result is that Commander Daly has been severely injured, both physically and emotionally.  This damage continues each and every day, for the rest of Commander Daly’s life.  The Russians must pay large damages to compensate Commander Daly for his injury, pain and suffering.  This is only fair.  Under our system of justice, no one is above the lawnot even the Russians!