Full opinion text
CYNTHIA HOLCOMB HALL, Circuit Judge: Defendant-Appellant Ronald R. Rewald was convicted on ninety-four counts of a criminal indictment charging mail fraud, interstate transportation of stolen securities or money, false statement to a federal officer, perjury, falsely representing accounts as being insured by the Federal Deposit Insurance Corporation (FDIC), securities fraud, failure to maintain books and records as required by the Securities and Exchange Commission (SEC), fraud by an investment advisor, income tax evasion, and subscribing to a false document. Re-wald committed these crimes by swindling hundreds of investors in his investment firm out of millions of dollars. His principal defense at trial, and now on appeal, is that the Central Intelligence Agency (CIA) told him to spend the investors’ money extravagantly so as to cultivate relationships with foreign potentates and wealthy businessmen who would be useful intelligence sources. We reject all of Rewald’s arguments save one, which requires a remand to the district court for further proceedings. I In 1978, Rewald and a partner, Sunlin L.S. Wong, formed an investment firm named Bishop, Baldwin, Rewald, Dilling-ham and Wong (Bishop Baldwin), located in Honolulu, Hawaii. Rewald, a charming and captivating salesman, immediately began luring investors into Bishop Baldwin’s “investment savings account” with a promised guaranteed return of twenty percent and an additional five to seven percent, depending on Bishop Baldwin’s earnings. The investors ultimately numbered 400, and their investments — sometimes an individual’s life savings — totaled $22 million. After a group of investors filed an involuntary bankruptcy petition, a court-appointed bankruptcy trustee took over Bishop Baldwin on August 4, 1983, finding it virtually without assets to repay the $17 million owing to investors. Rewald’s misrepresentations about Bishop Baldwin and its investment savings account were bold and imaginative. He claimed that Bishop Baldwin was one of the largest and most venerable investment firms in Hawaii, with roots dating back sixty-five years. He falsely described the firm’s clientele as having included, among others, the last four presidential administrations and Elvis Presley, with individual investors having an average worth of $4 million. Rewald told of a two-year waiting list to become Bishop Baldwin clients and a reported ninety percent rejection rate of those who applied. Rewald sometimes described the investment savings accounts as merely a breakeven accommodation for the firm’s wealthiest clients. Despite this laissez-faire front, Bishop Baldwin’s investment consultants aggressively sought money from any and all sources, motivated by huge commissions of up to fifty percent. In addition to the enormous rate of return, Rewald promised investors that Bishop Baldwin pursued an “ultraconservative investment policy” and that the investment savings accounts were guaranteed by the FDIC, Lloyds of London, or some other insurer. A key aspect of the fraud scheme was to discourage investors from withdrawing their funds. Rewald told investors that their “earnings” were tax free unless withdrawn. In addition, Bishop Baldwin maintained the facade of investor prosperity through periodic mailings of letters and reports to investors, purportedly documenting the firm’s glowing financial performance. Rewald conceded at trial that he had made these and numerous other false promises to investors and that he spent investor money on countless luxuries, including the purchase of a polo club. His sole defense was that the CIA had directed him to create Bishop Baldwin and to operate it for the CIA’s benefit, and that the CIA had promised to reimburse Bishop Baldwin for all these expenses because they were incurred in initiating and maintaining intelligence contacts. In short, he argued that he lacked the criminal intent necessary for conviction. Prior to trial, Rewald filed an affidavit outlining his alleged relationship with the CIA, claiming to be a covert CIA agent. He said that all his actions relevant to the indictment were carried out on the orders of the CIA. Specifically, Eugene Welch, Chief of the CIA Domestic Collection Division’s (DCD) Honolulu Office, instructed him and Sunlin Wong to set up the Bishop Baldwin firm for the CIA’s benefit. Re-wald also stated that he was provided with fake degrees in business administration and law from Marquette University. His mission was to cultivate social and business contacts with wealthy and well-placed businessmen and government officials. Rewald’s affidavit also stated that the CIA expanded its use of Bishop Baldwin to include transferring funds through the firm’s investment savings accounts to covert foreign intelligence operations. The CIA also used the accounts to shelter funds of highly placed foreign diplomats and businessmen who sought to “export” currency to the United States. Rewald’s most dramatic accusation was that the CIA used Bishop Baldwin to facilitate arms sales to several foreign countries. II While Rewald did not take the stand, extensive evidence of his relationship with the CIA was introduced at trial, primarily through the testimony in the government’s case-in-chief of several former CIA officials. Welch of the Honolulu DCD office was the first to meet Rewald. The DCD’s mission is to collect intelligence data on foreign persons and matters from private American citizens (known as “contacts”) who voluntarily offer to assist the CIA. These contacts sometimes will telephone the DCD with unsolicited information that the contact feels would be of assistance to American intelligence officials. The DCD’s telephone number is listed under “Central Intelligence Agency” in the telephone book, and officers such as Welch are known as overt agents, because they are publicly acknowledged to be CIA officials. A contact usually develops information from meeting a foreign citizen while traveling abroad. After a long career in the CIA, Welch moved to Honolulu in September 1976 to become chief of the DCD’s field office there. This office had one clerical employee and one professional employee — the chief. Welch had never been to Hawaii before moving there in 1976, and as he approached retirement he considered Hawaii a desirable assignment. Before moving to Hawaii Welch had not heard of Re-wald. Indeed, he had not heard of Rewald until June 30, 1978, when he received a telephone call from him at the office. Rewald told Welch that he recently had returned from visiting a Far Eastern country that he thought would be of intelligence interest. Rewald asked to meet Welch, expressing great sympathy for the CIA and the intelligence community at large. Believing Rewald to be a potentially helpful contact, Welch agreed to meet him for lunch. At their meeting on July 6, 1978, Rewald told Welch that he owned a chain of retail sporting goods stores and that he planned to travel extensively throughout the Far East, including China and Japan, to establish manufacturing sources for sporting goods. Rewald said his company was called Consolidated Mutual Investment Corporation (C.M.I.), and that it originated in Wisconsin, although it had failed there. Rewald also said that he had been a professional football player with the Cleveland Browns, that he had B.A. and M.A. degrees from Marquette University, and a Ph.D. from the Massachusetts Institute of Technology. Rewald said he had assisted the CIA in monitoring radical student groups while in college. After lunch, Welch returned to the office and filled out a standard “name check” request form. This form is sent to CIA headquarters in Langley, Virginia, and it requests a search of the person’s name in the files of certain federal agencies, including the F.B.I., for derogatory information. Basically, the name check entails only a preliminary search for information readily available in established channels. Once a name check is approved from headquarters, a field officer is permitted to alert a contact to the CIA’s “requirements,” or issues of particular interest to the CIA, relating to a particular foreign country or region. The contact can be made privy to classified information, up to the level of “secret.” Welch included on the name check form the biographical data Rewald had supplied at lunch. Welch also made an entry on Rewald’s “source contact card,” documenting their meeting and discussion for Welch’s files. Welch created this contact card for Rewald on June 30, after Rewald called for the first time. Welch telephoned Rewald near the end of July to see if he had made the travel plans he mentioned at lunch. Welch also told Rewald that he would be retiring and that his successor would be Jack Kindschi. Soon afterwards, Kindschi traveled to Honolulu to familiarize himself with the area and the office. Welch was still chief of the Honolulu office. It was Welch’s responsibility to introduce Kindschi to established contacts in Honolulu. While Rewald was not an established contact, Welch thought that his planned foreign travels would make him a useful source in the future. Welch also was impressed by Rewald’s patriotism and his great enthusiasm for the role of the intelligence community. In July, Rewald had invited Welch and Kindschi to his house for dinner during Kindschi’s upcoming visit in early August. The purpose of this dinner was to introduce Rewald and Kindschi. Kindschi testified that the dinner was simply social and that no CIA business was discussed. After dinner, Welch made another entry on Re-wald’s source contact card, where he reiterated that Rewald could be a useful source of foreign intelligence information. Welch never saw Rewald again after that dinner, and he left Honolulu on September 15, 1978. Kindschi took his place as chief of the Honolulu office. Before Welch’s departure, he had prepared a document summarizing Rewald’s background and potential usefulness as a contact, which was to be forwarded to headquarters in Washington. This was standard practice in the DCD. Kindschi signed this document on September 14, and forwarded it to headquarters. Kindschi received approval from headquarters on September 22 to use Rewald as a contact; his name check had been approved. Shortly after Kindschi and his wife arrived in Hawaii, Rewald invited them over for dinner with his wife and family. This initiated a strong friendship between the families, which saw each other socially two or three times a month. The Rewalds were the Kindschis’ closest friends in Hawaii. Professionally, Rewald repeatedly volunteered his services to Kindschi, professing to be eager to help the CIA in any way possible. The two met frequently; Kinds-chi’s records reflect ten meetings in the last three months of 1978, twenty-four meetings in 1979, and thirteen meetings in 1980. At many of these meetings they would discuss Rewald’s travel plans and the CIA’s requirements for particular countries. At other meetings, Rewald would report back on the substance of his conversations with foreign businessmen. In October 1978, an opportunity arose to accept Rewald’s offer to provide further assistance. Kindschi received a cable from headquarters seeking his assistance in obtaining a commercial cable address and telephone number in Hawaii for two covert agents operating in the Far East. Basically, the CIA needed a private company willing to provide light cover, known as backstopping in the intelligence community, for these foreign agents. Backstopping would require maintaining a telephone and telex, and confirming to any inquirers that the agent was associated with the commercial enterprise. Kindschi identified three possible persons for the job, but he recommended Rewald, who repeatedly had volunteered to assist the Honolulu office and whose company, C.M.I., had diversified business interests in the Far East. On November 6, headquarters agreed to use Rewald and asked him to create a backstop. The backstop initially was named H & H Enterprises, and later was renamed Canadian Far East Trading Corporation (Far East Trading) after it was learned that a legitimate company was named H & H Enterprises. It existed only on paper. Rewald arranged for a telex and telephone for the fictional company. If Re-wald received an inquiry, he was to say that the company was a general trading firm incorporated in Hawaii, and that the two agents were sales managers who had conducted their business in Vietnam and Cambodia prior to 1975. The CIA reimbursed Rewald for the telephone and telex expenses, but otherwise did not pay Re-wald for his assistance. On May 18, 1979, Kindschi sent a cable to CIA headquarters stating that Rewald had volunteered to provide any additional support services the CIA might need. Re-wald told Kindschi that his business was moving into a new building and that additional resources would be available. Kinds-chi included a description of Rewald’s business, identified as C.M.I., which stated that it was involved in financial planning, investments, real estate, and so forth, and that Elvis Presley was a former client. Rewald’s offer again came at an opportune time for the CIA, as it was seeking a commercial cover for a covert agent in the Foreign Resources Division (FRD) named Richard Richardson. Richardson used the alias Richard Cavanaugh, and was the chief of the FRD’s Southern California division. The FRD contacts foreign nationals living in the United States and seeks their assistance with intelligence gathering. John Mason assisted Richardson in securing commercial cover. Mason had been a covert CIA employee for twenty-five years. In 1979, he was assigned to the Corporate Cover Branch, which is responsible for obtaining cover for covert agents. Richardson contacted Mason sometime in May or June, requesting more information on Rewald and C.M.I. Richardson evidently had seen Kindschi’s cable offering Re-wald’s and C.M.I.’s services. On June 8, 1979, Mason requested immediate approval to contact Rewald about providing cover for Richardson. Mason was granted provisional approval for “contact and assessment only.” Mason learned from the CIA’s security office that Rewald had been involved in the sale of unregistered stock or franchises in Wisconsin. Mason contacted Rewald and arranged to meet him in Los Angeles, California, on June 25, 1979. As planned, the two men met for one hour in Los Angeles. Mason outlined Richardson’s cover needs, which were described in an internal CIA memorandum as a “well-backstopped cover identity.” The memorandum states in part: The cover should permit Mr. Richardson to portray himself [in alias] as a personal assistant or representative of the senior officer or owner of a substantial [or substantial appearing] company or other public organization. The senior or owner should be prepared, in case of an inquiry, either personally to substantiate that the individual exists and holds the claimed position, or have the person in his office to which queries would be likely directed do so. The head of the company should be the kind of individual who plausibly could have been a major political contributor before a strict limitation on donations to political candidates was imposed. Mason informed Rewald that the CIA would have to conduct a comprehensive background check before it could use him to backstop Richardson. Mason also showed Rewald a copy of a standard letter agreement, whereby a business person such as Rewald agrees to provide cover for a covert field agent, and the CIA agrees to reimburse the person for actual expenses associated with the cover. Rewald subsequently signed an agreement effective July 15, 1979, acting on behalf of C.M.I. The two men only discussed using C.M.I. as Richardson’s commercial cover, but Rewald mentioned that he recently had formed another firm, Bishop Baldwin. Finally, Mason had Rewald sign a secrecy agreement because he had been made aware of the CIA’s plans to provide cover support for a field operative. This particular secrecy agreement is different from the type of agreement used by the CIA for its employee staff officers. Rewald telephoned Mason a few days after their meeting and indicated that he was willing to have Richardson work in a cover position as C.M.I.’s fictional West Coast representative. Mason had suggested this position to Rewald. Rewald also expressed great consternation about the full background check Mason had mentioned. Rewald said that his participation was contingent upon the usual background check being waived. On July 3, Mason wrote to the security office and recommended that the background check be waived because “[n]o agency money will be advanced to Mr. Rewald, and the operational target and details will not be revealed to him.” Significantly, Richardson needed the cover immediately. Subsequently, the CIA authorized the expenditure of $2,000 a year to reimburse Rewald for providing Richardson with cover services. Although Mason did not hear back from the security office until October 25 regarding Rewald’s clearance to provide cover to Richardson, the FRD had arranged for Richardson to meet Rewald in July. On July 9, Kindschi received a cable informing him of Richardson’s impending visit to Hawaii and instructing him to introduce Re-wald and Richardson. Kindschi testified that he only acted as an intermediary in this transaction, a broker, and that he met Richardson for the first time when he came to Hawaii in July. After that, Kindschi had no involvement in Richardson’s relationship with Rewald or Richardson’s covert assignment. In August 1979, Richardson sent a memorandum to the Foreign Resources office handling his assignment, which provided the following description of Richardson’s cover: [c]an be described as a principal in a major Hawaiian and West Coast investment firm [C.M.I., subsidiary of BBRD & W] which has major interests in Asia as well as the U.S. The partners in this firm are from some of the oldest, wealthiest, and most influential families in Hawaii. As a result the company and these families are greatly concerned with matters relating to the political and financial affairs of the State of Hawaii, Asia and other locations where they have interests, as well as having extensive influence on the U.S. mainland. To protect their interests and the interests of the State of Hawaii these families have always maintained close political connections with any current administration, through major campaign contributions, appropriate discrete lobbying, and by providing advice, consultation and maintaining friendship with key political party and other central figures in the government. Rewald did not call Richardson as a witness at trial. The district court ruled to be admissible, however, documentary evidence relating to Richardson’s relationship with Rewald. Richardson recommended Bishop Baldwin as an investment to certain acquaintances and even opened a personal account for himself. In addition, certain Bishop Baldwin pamphlets identify Richardson, using his alias Cavanaugh, as an employee of Bishop Baldwin. As indicated in Richardson’s August memorandum to the FRD, Richardson evidently concluded that “C.M.I., subsidiary of Bishop Baldwin” presented a better commercial cover than did C.M.I. alone. Beyond that, Rewald’s failure to call Richardson as a trial witness leaves his actual relationship with Bishop Baldwin a matter of speculation. On July 26, 1979, Kindschi received a request that Far East Trading serve as a backstop for an additional foreign agent, and Rewald agreed. The expectation was that the backstop would be used infrequently, if at all. Far East Trading only received one inquiry during its entire existence, and that was a misdirected telex about a fashion show. Kindschi received a cable message from Washington on September 8, 1979, asking for his candid assessment of Rewald, in light of Rewald’s then-pending application for clearance to serve as a commercial cover for Richardson. In response, Kindschi wrote a long, glowing recommendation of Rewald, which noted that Rewald “sets high standards of moral conduct in everyday life,” “is a man with no apparent vices,” and had “no apparent evidence of deception in his character.” Kindschi’s letter also noted that the only area of skepticism was that Rewald originally contacted the CIA as a “walk-in.” “In other words, he came into the office without being invited.” Not long after coming to know Rewald, Kindschi and he developed a financial relationship in addition to their professional and personal ties. In early 1979, Rewald spoke to Kindschi about investing in his sporting goods store. Rewald said he had been successful in running a sporting goods chain in Wisconsin, and he showed Kindschi his new store in Kaneohe, Hawaii. Rewald said he planned to open up to six athletic stores on the island. Kindschi immediately invested $5,000 and agreed to buy a ten percent stake in the company for an additional $42,000. Rewald wrote to Kindschi on C.M.I. letterhead on January 31, 1979, and stated that the name of the chain in Hawaii would be “Hawaii Sports Centers,” and that its sales for 1978 were $936,318. Rewald also disclosed ambitious plans to manufacture athletic clothing in Taiwan. In March, Kindschi borrowed $42,000 from the Federal Credit Union and transferred it to Rewald. Rewald never told him that his Wisconsin sporting goods chain had gone bankrupt. Throughout that year and into the next, Rewald sent Kindschi periodic reports and newsletters describing the sporting goods chain’s dramatic financial success. In 1980, Kindschi and Rewald began to speak about Kindschi’s upcoming retirement. Kindschi originally had planned to go back to the mainland, but Rewald was anxious to have him stay in Hawaii, mentioning that a position might be available at Bishop Baldwin after his retirement. Kindschi retired on July 17, 1980. He left Hawaii for five months, returning in December. Kindschi testified that Rewald had suggested that after his retirement he should begin to take a draw on his previous investment in the sporting goods chain, and that he began to receive $1,000 a month in March 1981. Kindschi was unclear, however, whether this money was deducted from his aggregate investment, or whether it was a return on his investment. He testified to both, but he filed a claim in Bishop Baldwin’s bankruptcy proceeding for the entire amount of his initial investment. During cross-examination, it became clear that Kindschi actually began to receive $1,000 a month from Rewald in October, 1980. These checks were drawn on a Bishop Baldwin account. In addition, Kindschi received several lump sum payments totaling over $8,000, which he had failed to recollect in his direct testimony. His first payment of $3,000 came on June 30, 1980, while he still was chief of the DCD. He thought that this was reimbursement for the expense of leasing an automobile, which Rewald had insisted on providing for Kindschi after his retirement. He leased a 1980 Buick. Kindschi was uncertain what the other payments were for. In March 1981, Rewald fulfilled his promise to bring Kindschi on board at Bishop Baldwin. Rewald asked Kindschi to work as a contract consultant on special projects. Kindschi was paid $60 per hour for his work. His first two projects involved research assignments for a couple of Rewald’s wealthy foreign associates. Kindschi’s work involved some travel, sometimes with Rewald. Kindschi also began to write special and quarterly reports, which were sent to Bishop Baldwin investors and addressed a variety of topics, usually focusing on particular geographic regions. Rewald also asked Kindschi to edit Bishop Baldwin’s publicity pamphlet, called Directions, and an article that featured Bishop Baldwin in the local Chamber of Commerce publication. Rewald supplied the predicate factual information. Kindschi also recommended that Rewald hire a person referred to as “John Doe 14” at trial. Rewald hired John Doe 14 as a consultant, who eventually took charge of an overseas office of Bishop Baldwin. At the time he was hired, and for three months thereafter, John Doe 14 was a contract agent for the CIA. He made investment suggestions and identified individuals who might invest or offer investment opportunities. The jury was told that “Bishop-Baldwin did not implement any of the investment suggestions, and no investment was made as a result of John Doe 14's contact with people.” During the time Kindschi worked as a contract consultant to Bishop Baldwin, he also became an investor. In June 1981, Rewald told Kindschi that he had opened an account in Kindschi’s name at Bishop Baldwin for $1,000. Rewald said that Bishop Baldwin was going to stop opening new investor savings accounts, and that it was a great opportunity to invest in before they were unavailable. Rewald said that he had advanced the money out of personal funds. Kindschi agreed and repaid Rewald soon afterwards. Subsequently, Kindschi became a major investor, investing $124,000 for his parents, and an additional $139,000 of his own funds. He borrowed $100,000 to make this investment. He lost it all after Bishop Baldwin went bankrupt. On September 22, 1982, Kindschi accepted an unexpected invitation to join Bishop Baldwin’s executive committee, which included a $2,000 a month consultant fee. He also continued to receive $60 an hour for work on particular projects. He attended a total of four meetings of the executive committee. He was an observer, learning about the firm’s investment projects. In January or February 1983, he received a raise to $4,000 a month. Kindschi’s successor as chief was Jack Rardin. Rardin arrived in Hawaii by July 6, 1980, and Kindschi introduced him to Rewald soon afterwards because Rardin was to meet Kindschi’s “primary contacts.” Kindschi testified that, on July 10, 1980, the Far East agents informed him that the backstopping services were no longer needed, and that he informed Rewald that the telex and telephone should be disconnected. Rardin testified that the Far East cover was an “ongoing operation” when he arrived and that he discussed its continuation with Rewald in July. Rardin recalled that the Far East cover had been stopped for a couple of months, but that he was asked to renew it. Rardin continued to process the monthly telephone and telex expenses incurred in this cover. As did Kindschi, Rardin spoke with Re-wald about Rewald’s foreign travels. Re-wald occasionally would come by Rardin’s office and ask for a briefing on a particular country he planned to visit. Rardin testified: “I always stressed to him that you are going there primarily for your business and not for me, but if in your conversations and meetings with foreign businessmen and so on, if you would hear these kind of things, we’d be interested.” While Rardin considered Rewald a friend and generally an excellent source of foreign intelligence, he did not develop the sort of extensive relationship with Rewald that Kindschi had. Rardin made a one-time $1,500 investment in Bishop Baldwin, which he later withdrew. During his tenure, Rardin recalls requesting name checks from headquarters for several Bishop Baldwin employees, including Rewald’s secretary, Sue Wilson, who handled the paperwork for the telephone and telex backstop. Rewald had introduced Rardin to three or four of his employees, and Rardin requested name checks after concluding that they might also be able to provide useful information developed through their private travels abroad. He spoke with a couple of these employees once or twice about the DCD’s interest in other countries. Rardin also recalls meeting Richardson on one occasion about a month after he became chief. He knew generally that Re-wald was providing some sort of cover for Richardson, although Richardson did not report to him and Rardin was unfamiliar with the nature of Richardson’s assignment. Rardin believed that a Bishop Baldwin pamphlet that listed Richardson’s name as an employee (using his alias Cavanaugh) was part of Richardson’s cover. In November 1982, Rewald telephoned Rardin about an on-going IRS investigation into Rewald’s financial affairs. He said that he was unsure how to explain the telex and telephone expenses for the Far East cover operation to his accountant and requested direction. Rardin passed Re-wald’s request along to headquarters, which in turn asked Rardin to obtain further information from Rewald. Rardin spoke with Rewald and sent a cable to headquarters outlining their conversation. Significantly, Rewald said that he received payments not only for the telephone and telex, “but also for passing funds to individuals in the Middle East, Argentina, Hong Kong, Taiwan, Indonesia, California, and Hawaii.” In his cable, Rardin said that he had no knowledge of these alleged payments, but that he had no reason to doubt Rewald’s veracity. Rardin said that Re-wald was a “patriotic individual who tended to quickly follow instructions to the letter.” In response to Rardin’s cable, two CIA officers traveled to Hawaii twice in January 1983 to speak with Rardin and Rewald. At the first January meeting, Rewald did not refer to passing funds to foreign sources and specifically said that the only money he had received was for the telephone, teletype, and miscellaneous expenses associated with the Far East backstop. Subsequently, CIA headquarters advised Rardin of three possible cover stories that Rewald could tell his accountant about Far East Trading and its predecessor, H & H Enterprises. Generally, Rewald was advised to describe these companies as existing only on paper. At a subsequent meeting with Rewald in January, the officials told him that the IRS investigation would be held in abeyance temporarily as a result of an understanding in Washington between the CIA and the IRS. The officials told Rewald that more time was needed to investigate the facts of his relationship to the CIA. The CIA informed the IRS within several weeks that it had no objection to a resumption of the Rewald investigation. Also at this meeting the official from Washington suggested that Rewald return any CIA documents that he had in his possession. As a result, Rardin spoke to Rewald and learned that he did have some intelligence-related documents in his office. Rardin retrieved a stack of documents provided to him by Rewald. Rardin told Re-wald that the documents would be more secure in his office. Some of the papers pertained to the briefing requirements that Rardin had discussed with Rewald before his travels. Rardin commented that the documents could connect Rewald to the CIA “colder than a mackerel.” Rardin was instructed to sever ties with Rewald until the IRS’ tax investigation was completed. Thereafter, the CIA terminated its relationship with Rewald. Rardin also was instructed to withdraw the $1,500 he had invested in Bishop Baldwin. On July 29, 1983, television station KHON aired a story by reporter Barbara Tanabe that raised serious questions about Bishop Baldwin’s legitimacy. The following day, Rewald attempted suicide using a razor blade to slash his forearm in the Sheraton Hotel in Waikiki. A grand jury returned a 100-count indictment against Rewald on August 30, 1984. Ill The district court entered numerous pretrial orders in response to Rewald’s repeated requests for classified information and CIA documents relating to Bishop Baldwin. Subsequently, the district court ruled that certain evidence would be inadmissible at trial. We review the district court’s evidentiary rulings for an abuse of discretion. See United States v. Rubio, 727 F.2d 786, 798 (9th Cir.1983). Rewald bears the burden of establishing the relevance of classified information. See United States v. Miller, 874 F.2d 1255, 1276 (9th Cir.1989). While Rewald devotes many pages in his brief to this issue, his argument can be summarized as follows: by precluding Re-wald from introducing any evidence whatsoever of the specific intelligence activities that either he or CIA agents associated with Bishop Baldwin engaged in, the district court improperly excluded evidence having a tendency to prove that Rewald was a long-time agent of the CIA and was thoroughly enmeshed in many large-scale covert operations, thereby fatally undermining the credibility of Rewald’s claim that the CIA created Bishop Baldwin and instructed Rewald to spend millions of dollars of investor money for the CIA’s benefit. A As Rewald’s pretrial discovery requests involved classified information and documents, the district court followed the procedures outlined in the Classified Information Procedures Act (CIPA), 18 U.S.C.App. IV §§ 1-16 (1982). “Congress passed CIPA to prevent the problem of ‘greymail,’ where defendants pressed for the release of classified information to force the government to drop the prosecution.” United States v. Sarkissian, 841 F.2d 959, 965 (9th Cir.1988); Senate Rep. 96-823, 96th Cong., 2d Sess. 1-4 (1980), reprinted in 1980 U.S.Code & Cong.News 4294-98. CIPA establishes a comprehensive procedural framework for the discovery and admission of classified documents in a criminal prosecution. CIPA section four governs the discovery of classified documents. Where a defendant is permitted to discover information under the Federal Rules of Criminal Procedure, CIPA permits the district court to authorize the government to redact information from classified documents, to substitute a summary of the information in the documents, or to substitute a statement admitting relevant facts. The United States, however, must make a written request for such limits on otherwise discoverable evidence, which the court reviews ex parte. Rewald sought discovery of documents pursuant to Fed.R.Crim.P. 16(a)(1)(C). CIPA section five requires that a defendant notify the government and the court in writing if he reasonably anticipates the disclosure of classified information in pretrial or trial proceedings. See Miller, 874 F.2d at 1276. Under CIPA section six, following such notice, the government may request a mandatory hearing to determine “the use, relevance, or admissibility of classified information.” If the district court authorizes the disclosure of classified information, the government may request to substitute a statement admitting relevant facts or a summary of the classified documents “in lieu of the disclosure of such specific classified information.” CIPA § 6(c). Where this statement or summary provides the defendant with “substantially the same ability to make his defense,” the district court “shall” accept the substitution. Id. However, if the district court determines that the substitution is inadequate, and the government files an affidavit objecting to the disclosure of the information, the court is empowered to dismiss the indictment or to take other appropriate action to minimize the prejudice to the defendant. Id. at § 6(e)(2). The district court below held several section six CIPA hearings. The court stated that “[t]he fact that the proposed evidence before the court contains classified information has no bearing on this court’s determinations.” Rewald urges this court to endorse the district court’s ruling that CIPA only permits a district court to judge the admissibility of classified evidence under traditional standards of relevancy. The government did not argue below, nor does it argue on appeal, that national security interests can trump a defendant’s right of access to relevant information absent CIPA section 6(e)(2) sanctions. Nor did the district court purport to exclude the evidence on this basis. But see United States v. Smith, 780 F.2d 1102 (4th Cir.1985) (en banc). Under these circumstances, we decline Rewald’s invitation to undertake an all-encompassing analysis of this issue, and simply confine our review to the relevancy and admissibility of the classified materials under Federal Rules of Evidence 401 and 403. B Rewald propounded 1,717 interrogatories on January 18, 1985, and sought the production of hundreds of classified CIA documents. The district court ordered the government to respond to each interrogatory by March 29, 1985, and to produce documents relevant to any of six possible defenses: (a) truth, as a defense to the perjury counts; (b) no scheme to defraud; (c) lack of specific intent; (d) reasonable reliance on apparent authority; (e) outrageous government conduct; and (f) entrapment. The district court also ruled that pursuant to Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963), and Fed. R.Crim.P. 16, Rewald was entitled to discover eleven categories of information. As stated by the district court: 1. Whether the CIA told Rewald to set up a firm specializing in Far East investments, or directed that the firm should contain names synonymous with Hawaii. 2. Whether the CIA instructed Re-wald to claim that [Bishop Baldwin] had been established since territorial days, was capitalized at $300,000, and had gross sales in excess of $1 million. 3. Whether CIA officials told Rewald that the CIA would provide him with false degrees from Marquette University- 4. Whether CIA officials directed Re-wald to make representations regarding FDIC insurance. 5. Whether the CIA directed Rewald to maintain an extravagant lifestyle to contact and maintain relations with wealthy individuals from other countries for intelligence purposes. 6. Whether any money was paid to defendant by CIA officials as a result of his CIA-related activities or whether any such promises were made to defendant by CIA officials. 7. Whether CIA officials made representations to Rewald that the CIA would cover any of [Bishop Baldwin’s] losses. 8. Whether any of the [Bishop Baldwin] investors [invested] at the direction of the CIA. 9. Whether any of the [Bishop Baldwin] employees were CIA agents who acted in a role and capacity in that company of managing and handling any of the functions of that company, and were involved in the distribution and disbursement of any portions of any of the monies of that company. 10. Whether Rewald was told to make specific investments at the direction of CIA officials. 11. Any exculpatory information discoverable under Brady. Prior to the district court’s March 15th order, the government had released 220 CIA-related documents to the defense. In response to the court’s order, the government released an additional 189 documents and provided twenty-nine “substitutions” pursuant to CIPA section four. Finally, the government responded to each of Re-wald’s 1,717 interrogatories. Rewald objected to certain of the government’s interrogatory responses, its production of some documents with redactions, and its failure to produce other documents. Pursuant to CIPA section six, the district court held a closed-to-the-public hearing on Rewald’s motion to compel discovery and denied it. Rewald filed a motion for reconsideration, which the district court denied on June 10, 1985. The court reaffirmed that Rewald “is entitled to discover information related to whether CIA officials directed him to engage in any of the activities charged in the indictment ..., for example, whether the CIA directed him to create [Bishop Baldwin], or whether the CIA promised to cover any of his investment losses.” The district court’s theory of dis-coverability is critical to the propriety of its rulings, and thus we reproduce it in full: Information which shows that employees of the CIA solicited investors for [Bishop Baldwin] or directed the investments of the company may be material to Rewald’s defense. The very fact that an employee of the CIA was a consultant or director of the company may likewise be material. If, however, while serving as a consultant for [Bishop Baldwin] a CIA employee engaged in covert activities for the CIA and those activities in no way involved the disposition of the investors’ funds, the defendant is not entitled to discover the nature of those covert activities. Those activities simply have no relevance to charges of mail and securities fraud. Disclosing such information to the trier of fact would not make “more probable or less probable” the proposition that the CIA directed the disposition of $20,000,000 of privately invested funds. See Fed.R.Evid. 401. The fact that an investor in [Bishop Baldwin] may have been an employee of the CIA may be relevant to Rewald’s defense. That fact alone, however, does not entitle the defendant to discover the extent of the investor’s affiliation with the CIA or to discover information detailing the nature of the covert agent’s activities for the CIA. That information would have absolutely no bearing on the criminal acts alleged in the indictment. Similarly, the fact that the defendant may have supplied information to the CIA regarding foreign countries he visited is immaterial to the financial management of [Bishop Baldwin]. The court is not persuaded that such evidence is even circumstantially related to the creation and management of the defendant’s company. The district court’s orders on the scope of discovery were followed by pretrial orders addressing the admissibility of certain evidence, including both evidence the government had produced and evidence Re-wald sought to introduce through testimony and otherwise. Rewald filed CIPA section five notices on May 13, 1985, and June 5, 1985, of his intent to disclose classified information. The court held a hearing on this matter on June 5, 1985, issuing a written order on June 14, 1985. The district court’s admissibility rulings were based on its assessment of relevancy, balanced against Fed.R.Evid. 403’s concerns for unfair prejudice, confusion of the issues, misleading the jury, waste of time, undue delay, or needless presentation of evidence. C The court adhered to its theory of the scope of discoverable evidence: specific instances of covert activities were inadmissible unless they indicated the CIA directed Rewald to spend Bishop Baldwin funds for CIA activities. Yet the district court gave Rewald some latitude in proving his defense. The court found a variety of evidence admissible for either the charges in the indictment or Rewald’s possible defenses. The factual account presented in section II of this opinion provides some insight into the evidence of Rewald’s relationship with the CIA that the court ultimately admitted at trial. 1 The court stated that it would permit evidence of Rewald’s work for the CIA in the mid-1960s as an infiltrator of student organizations at the University of Wisconsin at Madison. The court also ruled admissible evidence of Rewald’s initial contact in 1978 with Welch. Significantly, the district court permitted evidence of Rewald’s formation at the CIA’s behest of the two fictitious companies, H & H Enterprises and Far East Trading. The court also found to be admissible all evidence relating to Rewald’s expenses incurred in maintaining this backstop, including CIA reimbursements for telephone and telex expenses. The court also permitted Rewald to offer evidence that substantiated his claim that the CIA had asked him to form Bishop Baldwin as another notional company. The court ruled that it would permit Re-wald to offer evidence establishing that CIA official Richardson was linked to C.M.I. and Bishop Baldwin. Rewald contended that the CIA asked him to relinquish C.M.I. to Richardson for use as a CIA cover company, and that this arrangement caused Rewald to transfer C.M.I.’s business affairs to Bishop Baldwin. The district court also ruled admissible a letter from Richardson to Rewald in which he requested that a Bishop Baldwin account be established for a certain individual, and another letter from Rewald to Richardson regarding this account. Moreover, the court ruled admissible various documents establishing that Richardson solicited investors for Bishop Baldwin. Rewald sought to introduce documents describing Bishop Baldwin’s offices in certain foreign locations, including London, Paris, Stockholm, Hong Kong, and Taiwan, and revealing the CIA’s knowledge of these foreign offices. Rewald claimed that the CIA directed him to set up these offices to further covert intelligence activities. The court permitted introduction of the documents Rewald identified, finding that “the fact that the CIA was cognizant of the existence of [Bishop Baldwin] foreign offices is probative of defendant’s claim that the CIA directed him to set up foreign offices of his company.” The court also permitted evidence that Rewald hired an individual overseas who was connected to the CIA as a Bishop Baldwin consultant. The court permitted Rewald to offer evidence of the CIA’s alleged role in: drafting all the literature distributed by Bishop Baldwin, including financial reports and the firm brochure; directing Rewald to lead a “high profile lifestyle” to cultivate wealthy business persons and foreign politicians; ordering Rewald to increase Bishop Baldwin’s investment activities so that the firm would appear to be more legitimate; placing CIA officials into positions at Bishop Baldwin with financial management responsibilities; and permitting Rewald to use the telex at his office for intelligence communications purposes. Rewald also sought to introduce additional evidence linking a former CIA official to Bishop Baldwin. The district court concluded that evidence establishing that a person associated with Bishop Baldwin was a former CIA official is relevant. Bishop Baldwin had prepared a report entitled the “Hong Kong Capital Flight Study,” which analyzed the financial consequences of the upcoming return of Hong Kong to China. Rewald contended that this report was prepared at the CIA’s request using Bishop Baldwin funds. The court ruled that the report would be admitted into evidence for this purpose. The court ruled that evidence of the CIA’s intervention on Rewald’s behalf in the IRS investigation was “relevant to establishing the significance of the CIA involvement with [Bishop Baldwin].” This evidence included three taped conversations between Rardin and Rewald. Following Bishop Baldwin’s collapse, former CIA official Kindschi wrote to CIA official Rardin regarding Kindschi’s expectation that he would be subpoenaed. The court ruled this letter admissible to demonstrate the extent of CIA involvement with Bishop Baldwin. 2 The district court, however, refused to admit evidence of the details of specific intelligence activities. Consequently, Re-wald was prevented from presenting evidence of the nature of his intelligence-related activities abroad, including the specific intelligence requirements provided to him by the CIA for various foreign countries. In addition, he was unable to offer details of the specific covert activities of CIA officials who had invested in Bishop Baldwin, as well as CIA officials for whom Rewald had provided backstopping services through Bishop Baldwin, C.M.I., or Far East Trading. Finally, he was precluded from describing the intelligence activities of Bishop Baldwin employees, who like Re-wald, were informed of the CIA’s requirements for particular foreign countries. The jury did not hear a variety of evidence relating to Rewald’s specific intelligence activities. While certain information remains classified, we can provide a rough sketch of various activities. In his travels to Japan, Rewald obtained documents describing a high speed levitation train under development by Japan Air Lines. He provided these documents to the CIA Honolulu office. In 1980, Rewald met an Afghan refugee in Honolulu and spoke with Kindschi about obtaining political asylum for the refugee. Kindschi related this information to CIA headquarters. In 1982, Rewald met with persons planning a mission by Bo Gritz in search of American Prisoners of War in Laos. Gritz was the former Commander of the United States Special Forces in the Panama Canal Zone, and he sought Rewald’s financial assistance. Rardin knew of Rewald’s involvement. Rewald also reported back to Rardin about his contacts with Enrique Zobel, a wealthy Filipino banker, and others, after Rewald had traveled to the Philippines in 1982. Rardin communicated the substance of Rewald’s briefing to CIA headquarters. Rewald also met with a person claiming to be Prince Sauud Mohammad, Royal Crown Prince of Dubai, United Arab Emirate, whose father is the King of that country. Rewald formed a corporation with this person, and another corporation with Zobel. Rewald spoke with Rardin about his discussions with the alleged prince, and Rardin relayed this information to CIA headquarters. Rewald visited Argentina and Chile during 1982. Argentina was embroiled in the Faukland Islands dispute with Great Britain, and after Rewald returned to Hawaii, he spoke with Rardin about his meetings with various prominent Argentinian businessmen. Rewald also visited Chile, and he informed Rardin about his discussions with various leaders of the Chilean military, which included a proposal to purchase a Chilean bank. Later that year, Rewald met in Hawaii with a reputed associate of Rajiv Ghandi, son of then-Prime Minister Indira Ghandi. Rajiv’s associate spoke with Rewald about India’s purported desire to purchase military equipment. Rewald spoke with Rardin about this matter, and he informed CIA headquarters. Rewald also spoke to Rardin about his knowledge of other countries’ desires to purchase military weaponry. Rewald’s travels also brought him to the Far East location for which he provided backstopping cover. He met with the CIA agents and they expressed an interest in any intelligence Rewald could provide. Rewald sought to document these and other adventures by introducing written reports of Rardin’s daily activities, which documented and briefly summarized numerous meetings between Rewald and Rardin. Re-wald argued that these reports were essential to defeat the CIA’s claim that Rewald only provided incidental cover for unrelated CIA covert activities. But the district court concluded that because so many of the entries on the activity reports made reference to specific covert activities, their introduction would confuse the issues and mislead the jury. The court noted that Rardin would be available to testify at trial, and that it would consider use of the documents to impeach Rardin should a dispute arise at trial over the frequency of Rardin’s contacts with Rewald. The district court also rejected Rewald’s renewed attempt to introduce numerous classified documents formerly in Rewald’s possession that generally dealt with specific intelligence requirements for certain countries Rewald had visited. The court rejected Rewald’s argument that his mere possession of these classified documents demonstrated his trusted relationship with the CIA. The district court also ruled on other pretrial evidentiary matters, including the appropriateness of government-supplied substitutions and redactions for classified documents, and several government in li-mine motions. The court accepted most of the government’s redactions and substitutions. Rewald successfully moved the court to reject the government’s attempt to preclude admission of statements made in the media; to reject the government’s last-minute attempt to exclude evidence previously ruled admissible; to reject the order proposed by the government to limit trial evidence and enter an order more narrowly focused on its pretrial rulings; and to grant in part Rewald’s motion to modify a government substitution. D Federal Rule of Evidence 402 provides that all relevant evidence generally is admissible. Rule 401 defines “relevant evidence” as “evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.” Rule 403 permits a district court to exclude relevant evidence “if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence.” In the Miller case, this court recently reviewed a district court’s ruling that classified evidence was inadmissible under Rules 401 and 403. The defendant was charged with transferring classified documents to the Soviet Union. He sought to introduce numerous classified documents discovered in searches of his two residences and his work desk. Miller, 874 F.2d at 1276. He argued that the various documents were relevant to his theory of defense because they tended to indicate “that he was not collecting classified documents in order to pass them to the Soviet Union, but rather that he was a disorganized ‘pack-rat’ who simply failed to properly file all of his documents.” Id. The district court agreed that the defendant’s “pack-rat” defense was viable, but it concluded that the contents of the documents were irrelevant. The Miller court affirmed, finding that “introduction of the entire contents of all of these documents might confuse and mislead the jury and waste the court’s time.” Id. at 1277. The Miller court relied extensively upon the Second Circuit’s decision in United States v. Wilson, 750 F.2d 7 (2d Cir.1984), cert. denied, 479 U.S. 839, 107 S.Ct. 143, 93 L.Ed.2d 85 (1986). In Wilson, the defendant’s sole contention on appeal was that “the district court erred in precluding him from proving in detail his alleged participation in certain classified intelligence and counterintelligence activities of the United States.” Wilson, 750 F.2d at 8. The defendant in Wilson was convicted of attempted murder, obstruction of justice, and witness tampering, among other crimes. He had attempted to arrange the assassination of various witnesses who were to testify against him at several criminal trials. He argued that evidence of his previous covert intelligence activities was relevant to proving that he had no motive for tampering with these witnesses, because he reasonably believed that convictions were unlikely in light of his previous activities on behalf of the United States. Id. at 9. The district court in Wilson ruled that the defendant would be permitted to introduce evidence of his previous employment with government intelligence agencies and of his involvement in covert operations. But the district court ruled that pursuant to Rule 403, it would not permit evidence of the details of the defendant’s previous intelligence operations. The appellate court examined for itself the classified material at issue, and concluded that the district court did not abuse its discretion in rejecting prejudicial, confusing, or misleading evidence of the defendant’s specific covert operations. Id. at 9. E This court has examined each and every classified document filed by Rewald in this appeal. We are least troubled by the district court’s exclusion of documents and other evidence relating to the intelligence activities of persons other than Re-wald. Specifically, the activities of CIA agents for whom Rewald provided backstopping services are minimally probative of Rewald’s claim that the CIA instructed him to spend investor money extravagantly. The same is true for the various CIA agents who invested in Bishop Baldwin at Richardson’s urging. The district court did not abuse its “wide discretion” in determining that the slight probative value of this evidence was substantially outweighed by the danger of confusion of the issues and misleading the jury. Hill v. Rolleri, 615 F.2d 886, 890 (9th Cir.1980). • The foreign intelligence activities of Re-wald and several others at Bishop Baldwin is a much closer question. The specific details of Rewald’s meetings with foreign businessmen and government officials lend some credence to his contention that he was a bona fide CIA agent. Likewise, if Rewald were permitted to establish that his activities mirrored the requirements provided to him by the CIA, the jury might find his CIA agent defense more credible. However, the ultimate anchor of Rewald’s defense is not that he was a CIA agent, but that the CIA ordered him to spend investor money. Thus, evidence of Rewald’s specific intelligence activities is twice removed from his defense that he lacked specific intent to defraud the investors. Rule 403 recognizes that as the probative value of evidence decreases, the potential increases for it to be substantially outweighed by the dangers identified in the rule. See Lucas v. Bechtel Corp., 800 F.2d 839, 849 (9th Cir.1986). Miller and Wilson establish that not even bona fide government agents necessarily are permitted to divulge classified information of specific intelligence activities. The district judge excluded this evidence on the basis that the details of Rewald’s specific intelligence activities and those of his associates did not prove that the CIA had instructed Rewald to spend Bishop Baldwin investor money to cultivate foreign intelligence contacts. Our independent review of the relevant documents supports this assessment. While evidence of his intelligence activities undoubtedly has some tendency to make this proposition more likely than not, it also would require delving into particular transactions and events that are far afield from this prosecution. Initially, extensive documentary and testimonial evidence of Rewald’s foreign travels may have considerably delayed an already lengthy trial. Rule 403 establishes that considerations of undue delay may justify the exclusion of relevant evidence. See Poling v. Morgan, 829 F.2d 882, 888 (9th Cir.1987). Of course, the government would be permitted to offer rebuttal evidence, thereby further drawing out the proceedings. See Ford v. Sharp, 758 F.2 1018, 1023 (5th Cir.1985). These developments would have turned the jury’s attention away from the issues of Rewald’s misrepresentations and the CIA’s alleged instruction to him to pilfer investor funds, to events transpiring many hundreds of miles away with little or no connection to this case. The district judge faced a quandry. Admission of this evidence posed the substantial risk of permitting the trial to degenerate into an unfocused presentation of facts and testimony that would confuse the issues and mislead the jury. See Lucas, 800 F.2d at 849. The jury heard from the government’s own witnesses that the CIA provided Re-wald with specific intelligence requirements and that Rewald traveled to foreign countries and reported back to the CIA about his meetings and observations. These witnesses also testified to their frequent contact with Rewald and their high regard for his usefulness and character. The district court permitted Rewald to introduce all evidence having any tendency to prove that the CIA was aware of the expenditure of investor funds for CIA purposes. Under these circumstances, we cannot say that the district court abused its discretion by excluding evidence of the specific covert intelligence activities engaged in by Rewald and other Bishop Baldwin employees. IV Rewald raises other issues concerning the exclusion of evidence and the district court’s conduct of CIPA proceedings. We address his arguments below. A Rewald argues that he was denied his constitutional right to be present at the court’s June 5,1985, CIPA section six hearing. Specifically, he faults the district court for not obtaining an “on the record” waiver by Rewald of his alleged constitutional right to be present at this hearing. The court held this hearing in camera with both government and defense counsel present. Rewald did not attend this hearing; Rewald earlier had sought and obtained bail conditions that permitted him to reside in Los Angeles, California, where he had a job paying $1,000 per week. “The right of an accused to be present at his trial is an ancient and well-established one which draw