A conservative political organization with ties to the Rev. Jerry Falwell covertly paid more than $200,000 to individuals who made damaging allegations about President Clinton's personal conduct, Salon has learned.

The money was paid out over a three-year period, between l994 and l996, by Citizens for Honest Government, headquartered in Orange County, Calif. The payments are detailed in the organization's confidential accounting ledgers and other internal records, copies of which were obtained by Salon.

The payments and the allegations -- some of which were either fabricated or grossly exaggerated -- were part of a covert and sophisticated political propaganda effort to influence public opinion against President Clinton.

One of the allegations, that Clinton protected an Arkansas-based cocaine-smuggling operation when he was governor of that state, spread from local talk radio shows to propaganda videos to the mainstream media, and eventually prompted an exhaustive, multimillion-dollar investigation by the House Banking Committee in 1994. The investigation concluded Clinton had nothing to do with the drug operation.

In another instance, in March, 1995, the Arkansas represenative of Citizens for Honest Government signed a contract agreeing to pay two Arkansa state troopers who had made questionable allegations supporting the theory that the late White House Counsel Vincent Foster had been murdered. The troopers, Roger Perry and Larry Patteson, who had previously told news organizations about Clinton's alleged extramarital affairs, had provided information about Foster's death to Kenneth Starr, the Whitewater independent counsel.

The drug smuggling and Vincent Foster allegations were prominently featured in "The Clinton Chronicles," a video produced by Citizens for Honest Government and co-financed, publicized and distributed by Falwell. The notorious 1994 video also insinuated that Clinton's political adversaries often met untimely and suspicious deaths.

Citizens for Honest Government also covertly paid individuals who provided information to media outlets such as the Wall Street Journal editorial page and the American Spectator magazine, which named them as sources. Publicists hired by Citizens helped these people get numerous appearances on right-wing talk radio shows.

Almost all of the people named as recipients of Citizens for Honest Government funds in the group's accounting ledgers confirmed to Salon that they had been paid by the organization. The ledgers listed them as "expert witnesses."

Patrick Matrisciana, president of Citizens for Honest Government, acknowledged that his organization had paid the individuals but denied they were encouraged to tell stories to the press and public that were untrue.

"We did not pay people to tell lies," Matrisciana told Salon. "We paid people so that they would no longer have to be afraid to tell the truth. Most of the folks whom we have paid money have been the victims of political persecution and political oppression. These people [told] ... the truth, and we wanted to compensate them for that."

A number of the people who received payments from Citizens for Honest Government also appeared in "The Clinton Chronicles," according to the organization's records.

A spokesman for Falwell, Mark Demoss, said in an interview that Falwell was unaware of the payments made by Citizens to its "expert witnesses." Matrisciana also said in an interview that he did not inform Falwell or anyone else in Falwell's organization about the various payments.

In an interview with Salon lasting several hours, Matrisciana insisted that Falwell had no role in Citizens' payments to people who have made allegations about the president. "I have not had contact with anyone associated with Rev. Falwell for at least a couple of years," he said. However, telephone records obtained by Salon show that shortly before meeting the Salon reporter that very same day, Matrisciana had a lengthy telephone conversation with an official in Falwell's organization.

Asked about that, Matrisciana said: "I guess I'm only a bit player in all of this, but that's all I am going to say."

Demoss gave conflicting accounts of Falwell's relationship with Matrisciana and Citizens for Honest Government. Initially, he said, "The Rev. Falwell and Pat Matrisciana have had a relationship for over 20 years, and Rev. Falwell thought that there might be merit to what Pat had produced." But in a subsequent interview, Demoss said that Falwell and Matrisciana had only "met each other about twice" in their lives.

According to Demoss and Matrisciana, the two men agreed that Falwell would promote "The Clinton Chronicles" on Falwell's "Old Time Gospel Hour" television show, as well as for a special half-hour infomercial.

"We had no involvement with the video until long after the fact," said Demoss. "The only role of Rev. Falwell was to tell the American people about it."

However, a direct-mail fund-raising appeal by Falwell suggests that Falwell was indeed involved with the video much earlier than he has acknowledged. The fund-raising appeal also shows that Falwell subsidized the production of the video as well. In the August 1994 direct-mail solicitation, Falwell asked supporters to "help me produce a national television documentary which will expose shocking new facts about Bill Clinton." The letter stated that Falwell was ready to make it available "as soon a I can raise approximately $40,000 needed to produce this video."

Despite being widely discredited, "The Clinton Chronicles," which contained all the lurid anti-Clinton allegations of cocaine trafficking and murder, was an effective piece of propaganda. With its sophisticated production and its adept film editing, the video imitates the style of an evening news program or television documentary. The video ends with former Republican Rep. William Dannemeyer urging that President Clinton be impeached, while a message flashes across the screen warning: "If any additional harm comes to anyone connected to this film or their families, the people of America will hold Bill Clinton personally responsible."

More than 150,000 copies of the video have been sold, according to Matrisciana. As many as double that number are reportedly in circulation.

The video's commercial success is due in large part to its promotion on Falwell's "Old Time Gospel Hour," as well as in an infomercial for the video, which viewers could order through Falwell's Liberty Alliance.

During the infomercial, Falwell interviews a silhouetted individual whom he identifies only as an "investigative reporter."

"Could you please tell me and the American people why you think that your life and the lives of the others on this video are in danger?" Falwell asks the man.

"Jerry, two weeks ago we had an interview with a man who was an insider," the mystery man replies. "His plane crashed and he was killed an hour before the interview. You may say this is just a coincidence, but there was another fellow that we were also going to interview, and he was killed in a plane crash. Jerry, are these coincidences? I don't think so."

Falwell reassured the man: "Be assured, we will be praying for your safety."

During Salon's interview with Matrisciana, a reporter told him that his voice sounded familiar. When the reporter told Matrisciana that he sounded like the man in silhouette, Matrisciana acknowledged that he was the mystery man.

"Obviously, I'm not an investigative reporter," Matrisciana admitted, "and I doubt our lives were actually ever in any real danger. That was Jerry's idea to do that ... He thought that would be dramatic."

Another key player in the Citizens for Honest Government anti-Clinton scheme was an Arkansas state trooper, Larry Patterson, who in December l993, along with two other former members of Gov. Clinton's personal security detail, first made salacious allegations regarding the private life of the president to the American Spectator magazine and the Los Angeles Times. The American Spectator's "Troopergate" story, which included a reference to a woman named "Paula," was the root of the sexual harassment lawsuit filed by Paula Jones against Clinton. In the April issue of Esquire magazine, David Brock, the author of the American Spectator story, casts doubt on Patterson's and the other troopers' accounts. Admitting that he had an "ideological motive" for writing the original story, Brock says he now wonders whether the troopers "took me for a ride," and accuses them of being "greedy" and having "slimy motives." One of those troopers, Roger Perry, told Salon that he still believes the stories he told to Brock four years ago are true. But he has also become critical of the operation conducted by Citizens. "I came to believe that what they were up to was wrong," Perry told Salon. Trooper Patterson was closely associated in the anti-Clinton scheme with Larry Nichols, a disgruntled former Arkansas state employee who has waged a relentless campaign against Clinton ever since the then-governor fired him from an Arkansas state agency for malfeasance in 1987. In l994, Nichols joined Citizens for Honest Government. Beginning sometime in early l995, he opened up a joint bank account with Patterson. Out of the account, the two made modest payments to at least six other individuals who made allegations about the president, financial and other records indicate. Patterson and Nichols confirmed the existence of the bank account and details of the payments in separate interviews after Salon learned about them from other sources. The largest single recipient of funds from Citizens for Honest Government was Nichols, who received more than $89,000. Nichols, who narrated "The Clinton Chronicles," has repeatedly said in interviews that he has never received any money for his appearance in the video or his other anti-Clinton efforts. But according to records obtained by Salon, Nichols received more than $89,000 in l994 and l995 from Citizens for Honest Government and a film company called Jeremiah Productions. Jeremiah Productions shares offices with Citizens for Honest Government in Hemet, Calif. Matrisciana heads both entities. According to Citizens' records, beginning in 1996 Matrisciana and Christopher Ruddy, a conservative, conspiracy-minded journalist, maintained a joint bank account in the name of Jeremiah Productions that made modest payments to critics of the president. Ruddy is a reporter for the Pittsburgh Tribune-Review, a newspaper owned by Richard Mellon Scaife, the reclusive billionaire and vociferous critic of Clinton who has financed numerous investigations of the president. According to the internal records of Jeremiah Productions, which also were obtained by Salon, as of Sept. 1997 the bank account controlled by Matrisciana and Ruddy had "total assets of $3.069 million" and no liabilities. Scaife and Ruddy did not return numerous calls for comment. Matrisciana asserted in an interview that neither Citizens nor Jeremiah Productions had ever received money from Scaife. "I wish that was the case," he said. Matrisciana said the two organizations earn their income through an aggressive direct-mail campaign and by sales of their various films and videos. Three former employees of Citizens for Honest Government told Salon that Nichols received far more than the $89,000 he was paid by the organization. The former employees say that Nichols boasted of earnings as high as $200,000 from selling copies of "The Clinton Chronicles" and other anti-Clinton videos produced by Jeremiah Productions. In l995, Nichols, in turn, also began to make payments to other individuals who have made allegations about Clinton's personal life, according to banking records and sources familiar with the transactions. The payments were drawn from the joint bank account Nichols maintained with Patterson, the Arkansas state trooper, the documents show. In separate interviews with Salon, both Nichols and Patterson acknowledged they made at least a half dozen payments from the joint bank account to individuals in Arkansas who have made allegations about President Clinton's private life. Matrisciana denied in an interview with Salon that he or Citizens for Honest Government were behind the payments made by Nichols and Patterson: "We gave Larry Nichols an awful lot of money, but it does not follow that we directed him how to spend it," Matrisciana said. "He was not our cut-out. He was not our front. And we, in turn, were never a front for Rev. Falwell or anyone else."

Among the allegations spread by Citizens for Honest Government's paid "expert witnesses" was that Bill Clinton, as governor of Arkansas, provided protection for the cocaine trade.

Beginning in late 1993, Nichols and three other individuals who received payments from Citizens told the press that Clinton, while governor of Arkansas, ordered state law enforcement officials to turn a blind eye to a cocaine trafficking ring operating out of Mena, a small Arkansas airport 120 miles west of Little Rock. Nichols and the group's other paid "witnesses" alleged that Clinton protected the cocaine operation because one of the ring's backers was a Clinton campaign contributor. They also alleged the drug smuggling ring was connected to a covert U.S. intelligence operation in Central America.

The allegations quickly found their way to talk radio programs and onto the Internet and began moving into the mainstream via articles in the American Spectator and the conservative Washington Times.

But what ultimately legitimized the allegations was a series of editorials and articles on the subject that appeared in 1994 on the editorial page of the Wall Street Journal.

Rep. Jim Leach, (R-Iowa), chairman of the House Banking Committee, acknowledged in an interview in the fall of l996 that he had directed his committee staff to conduct a comprehensive investigation of the Mena allegations after first reading about them in the Wall Street Journal.

"I read the Journal editorial page with great interest," Leach told Salon. "They raised some very serious and interesting issues. And I made the decision that it should be an appropriate subject of a committee investigation."

Two committee sources told Salon that House Speaker Newt Gingrich, R-Ga., also had read about the Mena allegations on the Journal's editorial page and had learned more about them from conservative supporters of his political action committee, GOPAC. Gingrich personally urged that Leach investigate the matter, the sources said.

David Runkel, a spokesman for the House Banking Committee, said that despite an exhaustive two-year investigation, the committee found absolutely no evidence showing any Clinton involvement in Mena drug-smuggling operations. "We engaged in an appropriate inquiry that uncovered valuable information about money laundering and other issues," said Runkel. "Regarding the president, we found no evidence of wrongdoing."

An investigation by the CIA Inspector-General also concluded last year that there was no evidence that Clinton had any role in protecting the Mena cocaine ring. Leach's House Banking Committee requested the CIA investigation.

Rep. Henry Gonzalez, D-Texas, the House Banking Committee's ranking minority member, was highly critical of the investigation. Gonzalez said it took up more than 13,000 staff hours at the Department of Justice -- "the equivalent of about one year's worth of work by eight full-time employees," said Gonzalez.

The request by Leach to have the CIA Inspector-General investigate, Gonzalez said, led to "six [additional] full-time [CIA] people reviewing over 40,000 pages of documents." In addition, four banking committee staffers worked on the probe at the expense of other important committee business, Gonzalez said.

Among those who were cited as sources about the alleged Mena operation in the Wall Street Journal's editorial page -- and received generous payments from Citizens for Honest Government -- was John Brown, a former deputy sheriff of Saline County, Ark. In l994 and l995, Brown received more than $28,000 from the organization, according to the accounting records. Brown also appeared on a Citizens-produced video about Mena.

"I did investigative work for them," Brown told Salon, adding that Citizens paid him while he worked as a private investigator and not as a police officer.

On Sept. 21, l996, Brown received at least one additional payment of $1,000 from the joint bank account controlled by Matrisciana and Ruddy, according to a copy of the canceled check obtained by Salon.

Another recipient of Citizens funds was Jane Parks of Little Rock. Shortly before the l996 presidential election, the American Spectator published a story by the magazine's editor, R. Emmett Tyrrell Jr., that quoted Parks as saying that she had personally witnessed Clinton using cocaine in 1984, while he was governor of Arkansas. At the time, Parks said, she had been resident manager of an upscale Little Rock apartment complex. Parks claimed that her office was subdivided by a flimsy temporary wall. Parks told Tyrrell that she worked on one side of the partition while on the other side, the president's brother, Roger Clinton, maintained a bachelor pad.

"Mrs. Parks observed cocaine being brought into the apartment," Tyrrell wrote. "She also had to relay complaints to Roger about noise from his parties ... She stated: 'Once when I opened the door, Bill Clinton was sitting on the couch. He was staring straight ahead, looking stoned ... There were lines of cocaine on the table in front of him."

Later, she told the London Daily Telegraph that her husband, a private investigator who once did security work for the l992 Clinton presidential campaign, was killed because he had been involved with drug smuggling at the Mena airport. Parks also claimed she found hundreds of thousands of dollars in cash in the trunk of her late husband's car. She said that her husband had told her that Vincent Foster had directed him to smuggle drugs at Mena.

In l994 and l995, Parks and other members of her family received more than $16,000 from Citizens for Honest Government, according to the organization's accounting records. In 1995 Parks received an additional $6,000 from the joint bank account maintained by Nichols and Patterson, according to records and individuals with direct knowledge of the transactions.

Parks declined to comment for this article, but her son told Salon that she stands by her stories.

A former employee of the American Spectator told Salon that Tyrrell had several conversations with conservative activists in the closing days of the l996 presidential race to discuss ways to publicize Parks' charges against Clinton. The former employee said in an interview that "a lot of us had serious questions about the 'the president is a cocaine addict story,' and [Tyrrell's] sources ... But he does believe in these things, and it is his magazine."

Tyrrell did not return several phone calls from Salon.

The death of White House counsel Vincent Foster also played a prominent part in the anti-Clinton campaign financed by Citizens for Honest Government. Just days after Foster committed suicide in Fort Marcy Park, Va., on July 20, l993, Larry Nichols regaled listeners of radio talk shows with tales of how Foster had been murdered and his body had been moved to Fort Marcy Park from somewhere else. Nichols claimed that a secret contact of his working on the White House staff had seen White House employee Helen Dickey sobbing uncontrollably in the middle of the afternoon on July 20, l993. Nichols said his contact reported that Dickey told people she was sobbing because she had just learned that Foster had died. Foster's body was not discovered by police until 6:35 P.M., according to investigators, and not identified for another couple of hours. That Dickey knew about the death hours earlier, Nichols said, seemed to prove that Foster had been murdered and his body moved. In an interview, Nichols recalled that he had lost all hope of corroborating the story until he told it to Roger Perry and Larry Patterson, the two Arkansas state troopers who, along with Nichols, were honored guests at the Citizens for Honest Government conference in February 1995. Perry told Nichols that he remembered Dickey had called the Arkansas governor's mansion early in the evening the night of Foster's death, before the body had been identified. "Roger was always real loose on the time," Nichols noted, but Patterson and Lynn Davis, an attorney for the two troopers, were certain that Perry called them early in the evening with the news. It was then that Nichols told the troopers and Davis that he had a business proposition for them, according to Perry: If they would tell their sensational story about the Foster death on a video sequel to "The Clinton Chronicles," he would share the profits from its sale with them. Nichols, according to Perry, had complained that he had not been fairly compensated for his role as the narrator of the "Chronicles," so he wanted to produce the next one by himself. Perry and Patterson signed a contract with Nichols that called for Nichols to pay both troopers a dollar for each video sold. Davis was to be compensated a lesser amount. In separate interviews, Perry, Patterson, Nichols and Davis all confirmed the existence of the contract and corroborated other details originally provided by Perry. A copy of the contract was made available to Salon by an person familiar with the agreement. After signing the contract, Perry and Patterson told their stories about Foster's death to investigators in independent counsel Kenneth Starr's office. Sources inside Starr's office say that they were unaware of the financial relationship that Nichols had with Perry and Patterson. "We simply never thought to ask the question," said an investigator. "We never suspected that witnesses might have been paid or had [financial] relationships. Looking back at it, I guess the only thing we have to say is, 'Duh.'" Nichols promised hefty profits for the Foster video. He boasted, according to Perry, that Falwell had agreed to purchase between 50,000 and 75,000 copies of his video and promote it on television. Citizens for Honest Government also had agreed to buy a substantial number of the videos, Nichols said, as had several radio talk show hosts on whose programs Nichols was a regular guest. "We sold 100,000 copies of 'The Clinton Chronicles.' There's no reason that we couldn't sell that many of a new video," Perry quoted Nichols as telling him. But Perry says he received no compensation from Nichols, who told him the video made no profits. Nichols told other people, however, that he made more than $150,000 from the sales of the video, and Perry says he believes Nichols cheated him. At one point, facing bankruptcy, Perry said he asked Nichols and Patterson to help him out financially. They wrote a $3,000 check to him from the joint bank account that Patterson and Nichols had together, according to Perry. When he deposited the check, Perry said, it bounced, and Nichols and Patterson said they had no funds to cover it. Perry describes going through what he calls "a very painful experience." "I've been in restaurants with my boys, and have been asked to leave because of speaking out about Clinton. "And when I learned about the kind of things that Larry Nichols and Pat Matrisciana were doing, I came to believe that what they were up to was wrong, too ... And now there is going to be a price to be paid again for speaking out again."