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<conspiracyFile>Article 6208 of alt.conspiracy:
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Path: bilver!tarpit!peora!masscomp!usenet.coe.montana.edu!decwrl
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!uunet!sun-barr!cronkite.Central.Sun.COM!jethro!finess.Corp.Sun.COM
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!rburns
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From: rburns@finess.Corp.Sun.COM (Randy Burns)
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Newsgroups: alt.conspiracy
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Subject: Nugan Hand Bank--More Grist for the Mill
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Keywords: bank CIA corruption
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Message-ID: <7691@jethro.Corp.Sun.COM>
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Date: 13 Dec 91 <data type="time" timezone="GMT">23:08:26</data>
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Sender: news@jethro.Corp.Sun.COM
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Lines: 523
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Article: "Crimes of Patriots," by Jonathan Kwitny
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Date: 23 Jan 90 <data type="time" timezone="GMT">22:55:31</data>
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By popular email demand: more Conspiracy basics, reproduced out of
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further boredom from MOTHER JONES, Aug/Sept 1987.
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Says MoJo:
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Jonathan Kwitny is an investigative reporter for the WALL STREET
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JOURNAL. This article is adapted from his book, THE CRIMES OF PATRIOTS:
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A TRUE TALE OF DOPE, DIRTY MONEY, AND THE CIA (W.W. Norton & Co.).
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Congressional hearings provide us with daily glimpses into a shadowy
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world of arms dealers, middlemen, retired military officers, and spooks.
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The details of secret arms shipments to Iran and money transfers to the
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contras have provoked expressions of shock and outrage about the
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"privatization" of foreign policy and the president's obsession with
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covert activity, as if these were inventions of the Reagan
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administration. They weren't.
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The need, cited by the past eight presidents, to pursue a perpetual and
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largely secret global war against an ever-expanding Soviet empire has
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justified gross violations of American law for 40 years. What is new in
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1987 is that a window suddenly has been opened on this shadow world
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before the spooks who inhabit it could completely take over.
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What we are seeing today is not an aberration; the aberration is only
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that we are seeing it, and what we are seeing is still not most of it.
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To fight their perpetual war, successive administrations have required
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an army of men who live in a world of spying and secrecy. Wrapping
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themselves in a cloak of patriotism, they have carried out unlawful acts
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of violence against civilians in Asia, Africa, and Latin America. Many
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soldiers in this shadow army also have stretched the cloak of patriotism
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to cover criminal enterprises that turn a hefty profit. Indeed, "the
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enterprise" that has been the focus of this summer's hearings, run by
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Maj. Gen. Richard Secord and his partner, Albert Hakim, is now the
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subject of a criminal investigation.
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The subject of this story is another example of such an enterprise: the
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Nugan Hand Bank -- a mammoth drug-financing, money laundering, tax-
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evading, investor-fraud operation based in Sydney, Australia. Its
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global operations, spanning six continents, involved enough U.S.
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generals, admirals, CIA directors, and spooks to run a small war. Not
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surprisingly, their activities brought them into contact with men of
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similar military and intelligence backgrounds now facing possible
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indictment for their roles in the Iran-contra affair.
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xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
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Crimes of Patriots
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by
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Jonathan Kwitny
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The cold war strayed into Lithgow, Australia, one Sunday morning in a
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Mercedes Benz. Sgt. Neville Brown of the Lithgow Police recorded the
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time as 4 A.M., January 27, 1980. "I was patrolling the Great Western
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Highway south of Bowenfels with Constable First Class Cross," Sergeant
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Brown said. "We saw a 1977 Mercedes sedan parked on the south side of
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the old highway known as '40 Bends.'" It was now three months later,
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and Sergeant Brown was testifying on the first day of a week-long
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inquest at the Lithgow courthouse. Lithgow, a settlement about 90 miles
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inland of Sydney, had been of little previous significance to Western
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Civilization. Consequently, Sergeant Brown was unused to the reporters
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in the courtroom and the television cameras outside. But he maintained
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his official poise under the stern questioning of the big-city lawyers.
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The two officers approached the unfamiliar Mercedes stranded on the old
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two-lane road. "A male person was sitting slumped over toward the
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center of the vehicle," Brown testified. "A .30-caliber rifle was held
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by him, the butt resting in the passenger-side floor well. His left
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hand held the barrel, three or four inches from the muzzle and near the
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right side of his head. His right rested on the trigger."
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Frank Nugan, the autopsy concluded, died of a single gunshot wound.
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Given the moat of undisturbed gore that surrounded his body, there
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seemed to be no way that someone else could have gotten into his car,
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killed him, and left. The facts all pointed to suicide -- a scenario the
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U.S. Central Intelligence Agency would be able to live with. Other
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aspects of Sergeant Brown's testimony, however, were much more
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disturbing to the CIA and others.
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For example, a typed list was found in Nugan's briefcase, containing
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scores of names of prominent Australian political, sports, and business
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personalities. Next to the names were handwritten dollar amounts,
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mostly five- and six-figure sums. Were they the names of debtors?
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Creditors? No one knew yet.
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Sergeant Brown also testified that a calling card was in the wallet
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found in Nugan's right rear pocket. It bore the name of William E.
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Colby, a former CIA director and now a private consultant. Written on
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the back of the card was "what could have been the projected movements
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of someone or other," Brown testified: "From Jan. 27 to Feb. 8, Hong
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Kong at the Mandarin Hotel. 29th Feb.-8th March, Singapore." William
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Colby was in those places at roughly those times.
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Probably the most sensational testimony at the inquest came from Michael
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Hand, Nugan's American partner. Hand identified himself to the court as
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chair-man, chief executive, and <data type="percent" unit="%">50%</data> shareholder of Nugan Hand
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Ltd., "the major operating company of a worldwide group of companies
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with offices throughout the world." Most people still referred to the
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company by the name of its most prominent subsidiary, the Nugan Hand
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Bank.
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Hand's exploits had little to do with banking. A highly decorated
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member of the Green Berets in Vietnam, he went on to become a contract
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agent for the CIA in Vietnam and Laos, training hill tribesmen for
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combat and working closely with the CIA's Air America to see that the
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tribesmen were supplied. Bill Colby had run the program. In 1967 Hand
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migrated to Australia.
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How Michael Hand, just coming off active duty as a U.S. intelligence
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operative in Southeast Asia, happened to hook up with Frank Nugan -- a
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local lawyer and playboy heir to a modest food-processing fortune -- is
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still a mystery. Asked under oath at the inquest, Hand said he couldn't
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remember.
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Although Hand's CIA ties had helped lure the reporters to the courtroom,
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thousands of people were interested in his testimony for other reasons.
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They, or their families or their companies, had money invested with
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Nugan Hand. For weeks now, the bank's officers had stalled off
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inquiries from the panicky investors. Finally, from the witness stand,
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Hand let loose the bad news: the company would not be able to pay its
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depositors. Even "secured" deposits would not be paid, since the bonds
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"securing" them were phony. Indeed, Nugan Hand couldn't even pay its
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rent. "The company is insolvent," said Hand.
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Nugan Hand's unpayable claims amounted to some $50000000. Many more
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lost deposits never were claimed for one simple reason: the money had
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been illegal to begin with -- tax cheating or dope payments or the
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wealth of a few Third World potentates. Not money the losers would want
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to account for in open court. The grand total easily could have been in
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the hundreds of millions of dollars.
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One might expect that the police, faced with the mysterious death of the
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head of a large international bank, would take steps to seal off his
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house and office. In the days after Frank Nugan's death, however, the
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police stayed conveniently away, while the company's files were packed
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in cartons, sorted, or fed to a shredder. Present for the ransacking
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was a team of former U.S. military operatives in Southeast Asia, led by
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CIA veteran Michael Hand, and including the president of the Nugan Hand
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Bank, Rear Adm. Earl F. ("Buddy") Yates, and the mysterious puppetmaster
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of Nugan Hand, Maurice ("Bernie") Houghton.
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Prior to becoming president of Nugan Hand Bank in 1977, Admiral Yates, A
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Legion of Honor winner in Vietnam, commanded the aircraft carrier USS
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JOHN F. KENNEDY and served as chief of staff for plans and policy of the
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U.S. Pacific Command. He retired from active service in 1974. Though
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Nugan Hand's main offices were in Sydney and Hong Kong, and though its
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official address was the Cayman Islands (because of the weak regulatory
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laws there), Admiral Yates lived in Virginia Beach, Virginia -- an easy
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hop from Washington, D.C., where he helped maintain a Nugan Hand office.
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Bernie Houghton, a fleshy, gray-haired Texan, had been a camp follower
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of America's Asian wars, always as a civilian, after a few years in the
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Army Air Corps in World War II. He had been to Korea and Vietnam and
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had made a living buying and selling war surplus and supplying the
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"recreational" needs of GIs. Houghton arrived in Australia in January
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1967, eight months before Michael Hand, where he opened the Bourbon and
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Beefsteak Restaurant, the Texas Tavern, and Harpoon Harry's. All three
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establishments, on the seamy side of Sydney, catered to U.S. troops on
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leave from Vietnam.
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Though ostensibly occupied only as a hony-tonk bar impresario, Houghton
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displayed a smooth working relationship with high-ranking military
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officers and CIA and U.S. embassy personnel. Houghton's international
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travels were facilitated whenever he was needed by Australia's secret
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scrutiny agency, ASIO, which also gave him security clearance in 1969.
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Other high-level retired Pentagon and CIA officials associated with
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Nugan Hand included three-star Gen. LeRoy J. Manor, former chief of
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staff for the entire U.S. Pacific Command, who headed the bank's
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Philippine operation; Gen. Edwin Black, former high-ranking intelligence
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official and assistant Army chief of staff for the Pacific, who headed
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the bank's Hawaii office; Gen. Erle Cocke, Jr., former national
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commander of the American Legion, whose consulting office served as
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Nugan Hand's Washington office; Walter McDonald, former deputy director
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of the CIA, who devoted most of his consulting business to Nugan Hand;
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and several top former CIA field men. William Colby, former director of
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the CIA, was the bank's lawyer on a variety of matters.
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Perhaps Nugan Hand Bank's most brazen fraud was the theft of at least $5000000
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, maybe more than $10000000, from American civilian and
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military personnel in Saudi Arabia. The man in charge of Nugan Hand's
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Saudi operations was Bernie Houghton, the barkeep with high-level ties
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to U.S. and Australian intelligence.
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It was 1979, the year of OPEC's highest oil prices ever, and Saudi
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Arabia was awash with money. Whole new cities were planned, and
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thousands of American professionals and managers were arriving to
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supervise the hundreds of thousands of newly arriving Asian laborers.
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To get their services, Saudi Arabia had to offer much higher salaries
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than either the Americans or the Asians could earn back home. Most of
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the Americans were going over for a couple of years, braced to suffer
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the isolated, liquorless, sexless Muslim austerity in exchange for the
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big nest eggs they would have when they returned home.
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When they got to Saudi Arabia they faced a problem, however. Every week
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or two they got paid in cash, American or Saudi. And because Muslim law
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forbids the paying or collecting of interest, there were no banks in the
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Western sense of the word. So what to do with all that money?
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A claim letter from Tom Rahill, an American working Dhahran, Saudi
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Arabia, described how the operation worked: "Mr. Houghton's
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representatives would visit Aramco (Arabian American Oil Company)
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construction camps in Saudi Arabia shortly after each payday. We
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'investors' would turn over Saudi riyals to be converted at the
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prevailing dollar exchange rate, and receive a Nugan Hand dollar
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certificate...The moneys, we were told, were to be deposited in the
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Nugan Hand Hong Kong branch for investments in various 'secured'
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government bonds." Another claim letter, from a group of 70 American
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workers in Saudi Arabia (who among them lost $1500000), says that
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was their understanding as well.
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According to investors, Aramco, Bechtel, and other large U.S. concerns
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boosted the Nugan Hand connection by letting salesmen hold meetings on
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company property and use company bulletin boards. Bernie Houghton "only
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worked in cash," says Linda Geyer, who, along with her husband, a
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plumber on a large construction project, invested and lost $41481 with
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Nugan Hand. "One time he had to have two briefcases." Others remember
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Houghton actually toting away the loot in big plastic bags, slung over
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his shoulder like some reverse Santa Claus.
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By his own admission, Houghton hauled off the intended savings not only
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of private-contract American employees, but also of U.S. Air Force
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personnel stationed in Saudi Arabia. In fact, the record shows that
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Houghton quickly made contact with two colonels he'd known from Vietnam
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War days. One of them, R. Marshall Inglebeck, "showed Mr. Houghton
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around, introduced him, and explained that Mr. Houghton was a banker
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looking for business for Nugan Hand Bank," according to Australian
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investigators. The other was Col. Billy Prim, who served on Admiral
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Yate's staff at the Pacific Command in Vietnam days and introduced
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Houghton to Yates back then. It was at Colonel Prim's house in Hawaii
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that Bernie Houghton would meet Maj. Gen. Richard Secord.
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After word of Nugan Hand's collapse reached the Saudi press in 1980,
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Houghton and some of his banking staff fled the country, several aboard
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the last plane out before the Saudi police came searching for them.
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Depositors say that when they went to the old Nugan Hand office after
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that, they found it occupied and guarded by U.S. Air Force personnel,
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who assured them that everything would be straightened out.
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The claim letter from the 70 investors who lost $1500000 says, "We
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were greatly influenced by the number of retired admirals, generals, and
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colonels working for Nugan Hand."
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One of the bigger mysteries surrounding Nugan Hand, the answer to which
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may be almost self-evident, concerns its branch in Chiang Mai, Thailand.
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(Indeed, Australian investigators reported that the idea for a Chiang
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Mai branch was suggested to Michael Hand by Murray Stewart Riley, a
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major Australian-U.S. drug trafficker now in prison in Australia.)
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Chiang Mai is the colorful market center for the hill people of
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northwest Thailand. Like few other cities on earth, it is known for one
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thing. More than Detroit is known for cars, or Newcastle for coal, or
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Cognac for brandy, Chiang Mai is known for dope. It is the last outpost
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of civilization before one enters the law-unto-itself opium-growing
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world of the Golden Triangle.
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If it seems strange for a legitimate merchant bank to open an office in
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Chiang Mai, consider this: the Chiang Mai Nugan Hand office was lodged
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on the same floor, in what appears to be the same office suite, as the
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United States Drug Enforcement Agency office. The offices shared a
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common entrance and an internal connecting door between work areas. The
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DEA receptionist answered Nugan Hand's phone and took messages when the
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bank's representatives were out.
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The DEA has provided no explanation for how this came about. Its
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spokespeople in Washington have professed ignorance of the situation,
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and DEA agents in the field have been prevented by the superiors from
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discussing it with reporters.
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The Drug Enforcement Agency has a history of working with the CIA at
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home and abroad; with drug money corrupting the politics of many
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countries, the two agencies' affairs are often intertwined. Was that
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the case with the Nugan Hand office in Chiang Mai?
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It was, according to Neil Evans, an Australian whom Michael Hand chose
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as the bank's chief representative in town. In recent years Evans has
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made daring statements to Australian investigators and television, and
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to the CBS EVENING NEWS in the United States. Among other things, he
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has said that Nugan Hand was an intermediary between the CIA and various
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drug rings.
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Much that Evans says appears kooky. He claims to have attended
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important intelligence meetings in Hong Kong and Australia that he
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probably didn't attend, though the meetings may have occurred. But much
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else that he has said has proven to be true.
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In Chiang Mai he was surrounded by people with long backgrounds in U.S.
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intelligence who were working for Nugan Hand. They included Thais who
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until recently had been working in professional or executive jobs at
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U.S. bases or with a CIA airline, and Billy and Gordon Young, sons of
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missionaries, who worked for the CIA during the Vietnam War and who now
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have ties to a SOLDIER OF FORTUNE magazine project. And some very
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wealthy people whom Evans claims to have taken deposits from agree they
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talked often to him and were urged to make deposits.
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There is little doubt that many millions of dollars in deposits from
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numerous Thai citizens were taken out of Thailand; Nugan Hand's
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surviving records establish that. The only question is: Who were the
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depositors?
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When this reporter went to Chiang Mai with a list of local citizens whom
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Evans said he had taken drug money from, the DEA agents on the scene at
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first were eager to make a deal: the list, in exchange for whatever
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nonconfidential information the agents could share about the people on
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it. The agents, all new since Nugan Hand days, went on about how
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curious they had been since they'd arrived in town and heard stories
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about the bank that used to operate across the reception room; they
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wanted to hear more.
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Suddenly a phone call came from an embassy official in Bangkok who
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earlier had impeded my progress in every way possible (such as by
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postponing issuance of standard credentials). The official ordered the
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DEA agents not to talk to me. And that was that.
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The U.S. government stonewalling on the Nugan Hand issue continued all
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the way to Washington. At the Hong Kong office of U.S. Customs, the one
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federal agency that acknowledges it looked even briefly into Nugan Hand,
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senior investigator James Wilkie agreed to an interview. I was waved in
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to find Wilkie seated behind a desk next to a shredding machine and a
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large carton of papers bearing a red horizontal strip, outlining the
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white letters C-L-A-S-S-I-F-I-E-D.
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Wilkie was calmly feeding the documents into the shredder as he spoke,
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taking each batch of shreddings out and putting them through a second
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time.
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"We can't comment on anything that's under investigation or might be
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under investigation," he said.
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Was Nugan Hand under investigation?
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"There wasn't an investigation. We did make some inquiries. We can't
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comment."
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I asked what was being shredded.
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"It's none of your business what's being shredded," Wilkie replied.
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And that, as far as the American voter and taxpayer is concerned, may be
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the whole problem.
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From the time of Frank Nugan's death in 1980, through four wide-sweeping
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investigations commissioned by the Australian government, the Nugan Hand
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Bank scandal has rocked Australian politics and dominated its press. To
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date, the investigations have revealed widespread dealings by Nugan Hand
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with international heroin syndicates and evidence of mammoth fraud
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|||
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against U.S. and foreign citizens. But many questions about the bank's
|
|||
|
operations remain unanswered.
|
|||
|
The law in Australia, and in most other countries where Nugan Hand
|
|||
|
dealt, restricts the export of money. Michael Hand himself boasted that
|
|||
|
Nugan Hand moved $1000000000 a year through its seemingly magical
|
|||
|
windows. How could the Australian security agencies have let an
|
|||
|
operation of that size break the exchange laws with impunity for so many
|
|||
|
years -- unless, of course, the Australian agencies were cooperating
|
|||
|
with the bank, or had been told that Nugan Hand had a powerful
|
|||
|
government sanction from abroad?
|
|||
|
The U.S. military officers who worked for Nugan Hand told Australian
|
|||
|
investigators they were unaware of the bank's illicit activities. They
|
|||
|
said they had been duped just like the depositors. [Ack! -jpg] But
|
|||
|
could that level of stupidity be ascribed to high officials who only
|
|||
|
recently were responsible for supervising BILLIONS of dollars in U.S.
taxpayer funds -- hundreds of thousands of troops and whole fleets of
|
|||
|
aircraft and aircraft carriers -- who specialized in, of all things,
|
|||
|
intelligence?
|
|||
|
Or was it more likely that these men, at least most of them, weren't
|
|||
|
thieves, and that there was some political motive behind their work?
|
|||
|
The presence of former U.S. military and intelligence officers in Nugan
|
|||
|
Hand's executive ranks raises obvious questions about the role of the
|
|||
|
U.S. government. But the CIA, the FBI, and the U.S. Customs Service,
|
|||
|
all of whom have information on Nugan Hand, have refused to release what
|
|||
|
they know to Australian investigators. When an Australian newspaper,
|
|||
|
the NATIONAL TIMES, petitioned the FBI for information on Nugan Hand
|
|||
|
under the Freedom of Information Act, the newspaper was told that it
|
|||
|
could only see 71 of some 151 pages of material in FBI files. When
|
|||
|
these papers arrived they resembled a collection of Rorschach tests,
|
|||
|
with page after page blacked out in heavy ink and bearing the notation
|
|||
|
"B-1," indicating that disclosure would endanger U.S. "national defense
|
|||
|
or foreign policy."
|
|||
|
The fragmentary records left by Nugan Hand and the testimony of some
|
|||
|
peripheral characters in this case suggest there was a political side to
|
|||
|
much of the bank's business -- from negotiations with the Sultan of
|
|||
|
Brunei about ways to protect the sultan's wealth in case of political
|
|||
|
upheaval, to lengthy reports from Nugan Hand's Thai representative
|
|||
|
describing Vietnamese troop movements and battle tactics in Cambodia.
|
|||
|
Australia's Joint Task Force on Drug Trafficking released a four-volume
|
|||
|
report on Nugan Hand to Parliament in 1983, which determined that Nugan
|
|||
|
Hand had participated in two U.S. government covert operations; the
|
|||
|
sale of an electronic spy ship to Iran and weapons shipments to southern
|
|||
|
Africa, probably to U.S.-backed forces in Angola.
|
|||
|
Both the Iranian and African operations involved Edwin Wilson, a career
|
|||
|
CIA officer, purportedly retired, who was then working as a civilian on
|
|||
|
the staff of a supersecret Navy intelligence operation called Task Force
|
|||
|
157. In 1983, Wilson began serving a 52-year sentence in federal prison
|
|||
|
for supplying tons of plastic explosives, assassination gear, high-tech
|
|||
|
weapons, and trained personnel to Libya. He is also the main link
|
|||
|
between Nugan Hand and key figures in the Iran-contra affair.
|
|||
|
The crowd around Edwin Wilson at the time of Frank Nugan's death in 1980
|
|||
|
included Maj. Gen. Richard Secord, then involved in U.S. military sales
|
|||
|
for the Pentagon worldwide; Thomas Clines, a high-ranking CIA official
|
|||
|
who went on to run a business founded with Wilson money; Ted Shackley,
|
|||
|
deputy chief of the CIA's clandestine services division until his ties
|
|||
|
to Edwin Wilson led to his resignation; and Rafael ("Chi Chi") Quintero,
|
|||
|
a Bay of Pigs veteran who was hired by Wilson in 1976 for an aborted
|
|||
|
plot to assassinate a political opponent of Col. Muammar Qaddafi.
|
|||
|
(Quintero says he backed out when he found out the assassinations were
|
|||
|
not authorized by the CIA.)
|
|||
|
All of these men would later resurface as players in the Iran-contra
|
|||
|
mission: Richard Secord as the man who ran the operation for the White
|
|||
|
House; Thomas Clines as Secord's chief aide; Ted Shackley as a
|
|||
|
consultant to a company that subsequently was used to fund the contras;
|
|||
|
and Chi Chi Quintero as one of the men who supervised the distribution
|
|||
|
of arms shipments to the contras in Central America.
|
|||
|
The 1983 Australian Joint Task Force report listed them all as people
|
|||
|
whose "background is relevant to a proper understanding of the
|
|||
|
activities of the Nugan Hand group and people associated with that
|
|||
|
group." The ties between Wilson and his associates, on the one hand,
|
|||
|
Nugan Hand, on the other, were many:
|
|||
|
* Shortly after Ted Shackley retired from the CIA and went on to a
|
|||
|
career in private business, he began meeting with Michael Hand, the
|
|||
|
former Green Beret and CIA contract agent turned banker. Surviving
|
|||
|
correspondence between the two men indicates that their relationship
|
|||
|
was well established and friendly.
|
|||
|
* Richard Secord told Australian investigators that he had met Bernie
|
|||
|
Houghton in 1972 at the home of Colonel Prim. The task force
|
|||
|
reported that they saw each other occasionally and socially in
|
|||
|
Washington, D.C., Saudi Arabia, and the Netherlands throughout the
|
|||
|
middle and late 1970s.
|
|||
|
* In 1979 Secord introduced Houghton to Thomas Clines. The two men
|
|||
|
then met repeatedly with Ted Shackley in Washington, which eventually
|
|||
|
led to a deal to sell Philippine jeeps to Egypt. (About a year
|
|||
|
later, in June, 1980, when criminal investigations into Nugan Hand
|
|||
|
were getting under way in Australia, Thomas Clines traveled all the
|
|||
|
way to Sydney to accompany Bernie Houghton on his hasty flight out of
|
|||
|
Australia.)
|
|||
|
* Bernie Houghton met repeatedly with Edwin Wilson during this period.
|
|||
|
About the time of Frank Nugan's death, in January 1980, Thomas Clines
|
|||
|
and Chi Chi Quintero dropped by Wilson's Geneva office. There they
|
|||
|
found a travel bag full of documents left by Bernie Houghton.
|
|||
|
According to task force witnesses, Richard Secord's name was
|
|||
|
mentioned as they searched the bag and removed one document. "We've
|
|||
|
got to keep Dick's name out of this," said Clines.
|
|||
|
Several of the men associated with Edwin Wilson came close to federal
|
|||
|
indictment in 1982 in a deal that brought in $71000000 in Defense
|
|||
|
Department fees for delivering military equipment to Egypt. The
|
|||
|
shipments were made by Clines's company and were overseen by Secord at
|
|||
|
the Pentagon. According to Wilson, his bookkeeper-girlfriend, and a
|
|||
|
female companion of Clines, profits were to be shared by Secord, Clines,
|
|||
|
Shackley, Wilson, and another Pentagon official, Erich von Marbod. And
|
|||
|
memos from Wilson's lawyer at the time -- first unearthed by Peter Maas
|
|||
|
for his book MANHUNT -- say the profits were to be shared among a
|
|||
|
corporation, apparently controlled by Wilson, and four U.S. citizens.
|
|||
|
But federal prosecutors decided the word of these witnesses might fail
|
|||
|
against the denials of senior Pentagon officials. Besides, the careers
|
|||
|
of Secord and von Marbod seemed -- at least until the Iran-contra affair
|
|||
|
-- to have been effectively derailed. Both had resigned from their
|
|||
|
posts. So instead of indicting the individuals, the prosecutors
|
|||
|
indicted only Clines's company, without saying who, besides Clines and
|
|||
|
an Egyptian partner, were thought to be the other investors. (Secord,
|
|||
|
Shackley, and von Marbod denied involvement in the company.)
|
|||
|
Clines, on behalf of his company, pleaded guilty to submitting $8000000
|
|||
|
in false expense vouchers to the Pentagon, and he and his
|
|||
|
partner agreed to pay more than $3000000 in fines and reimbursements.
|
|||
|
That, however, did not dissuade Richard Secord from hiring Clines as his
|
|||
|
deputy in the Iran-contra operation.
|
|||
|
Edwin Wilson, the man who unites all these figures, is the only one who
|
|||
|
went to jail, along with a former assistant, Douglas Schlachter.
|
|||
|
Schlachter agreed to testify about Wilson's dealings, served a brief
|
|||
|
prison term, and then went into the federal witness protection program.
|
|||
|
He also led the Australian Joint Task Force to information about Nugan
|
|||
|
Hand's involvement in the two covert deals in Iran and Southern Africa.
|
|||
|
Schlachter remembered meeting Secord's friend Bernie Houghton in
|
|||
|
Wilson's Washington office with two career CIA officers around the time
|
|||
|
of the spy ship sale. Immigration records show that Houghton then
|
|||
|
traveled to Iran, in March 1975, apparently for the only time in his
|
|||
|
life. And, according to the task force report, he was accompanied by "a
|
|||
|
senior serving member of the U.S. Armed Forces." Immigration records
|
|||
|
also show that Wilson traveled to Iran twice in subsequent months, once
|
|||
|
stopping over first in Sydney. At the time of the spy ship sale, in
|
|||
|
1975, the U.S. military program in Iran was being run by General Secord.
|
|||
|
The Pentagon's reply to all this is simple and straightforward: "Any
|
|||
|
sort of a sale of that sort would have been under the auspices of Naval
|
|||
|
Intelligence Command, and, of course, their activities are classified,"
|
|||
|
a spokesman says. And he won't comment further.
|
|||
|
By 1975, Michael Hand was bored with banking. He told friends he wanted
|
|||
|
to leave his desk and neckties behind for new challenges. He talked of
|
|||
|
places where combat, which he dearly loved to reminisce about, was still
|
|||
|
going on. He left Australia to go fight "communism" in Africa.
|
|||
|
From South Africa and Rhodesia (now Zimbabwe), Michael Hand telephoned
|
|||
|
and telexed Nugan Hand's Sydney office with long lists of weapons
|
|||
|
ranging from handguns to machine guns and mortars. A Nugan Hand staffer
|
|||
|
was dispatched from Sydney to discuss these needs directly with Hand.
|
|||
|
The timing of these activities coincides exactly with the CIA's raising
|
|||
|
of arms and men on the black market for covert intervention in Angola's
|
|||
|
civil war.
|
|||
|
Meanwhile, Bernie Houghton held a series of meetings with Edwin Wilson
|
|||
|
at Wilson's Washington office. Wilson then placed Nugan Hand's order
|
|||
|
for 10000000 of rounds of ammunition and 3000 weapons. The weapons
|
|||
|
were believed to have been shipped from Boston to a phony destination in
|
|||
|
Portugal. (False documentation filed in Portugal was also used in the
|
|||
|
Iran-contra arms shipments.) Ultimately, according to the task force
|
|||
|
report, the shipment was probably received by Michael Hand in southern
|
|||
|
Africa and then shipped to CIA- supported fighters in Angola.
|
|||
|
The final judgment rendered by the task force shows some naivete about
|
|||
|
how the CIA has actually conducted covert operations over the years.
|
|||
|
"All things taken into account," the task force report states, "the
|
|||
|
operation is considered likely to have been carried out as a result of
|
|||
|
private entrepreneurial activity as opposed to one officially sanctioned
|
|||
|
and executed by U.S. intelligence authorities."
|
|||
|
For those who haven't paid much attention to CIA style over the years,
|
|||
|
perhaps the main problem in understanding Nugan Hand has been this
|
|||
|
seemingly analytical choice between "private entrepreneurial activity"
|
|||
|
on the one hand and "officially sanctioned" activity on the other. In
|
|||
|
fact, as the Iran-Contra operation clearly shows, the two have never
|
|||
|
been clearly distinguished. In phrasing the choice, one may
|
|||
|
inadvertently rule out what is really the most likely explanation.
|
|||
|
It is possible, in fact customary, for a CIA-related business to be both
|
|||
|
private and for-profit, and yet also have a close, mutually beneficial
|
|||
|
relationship with the agency. The men running such a business are
|
|||
|
employed exactly as if it were a private concern -- which it is. But
|
|||
|
they may have been steered to their jobs by the CIA, and they never
|
|||
|
forget the need to exchange favors.
|
|||
|
According to Victor Marchetti, a former CIA officer who coauthored a
|
|||
|
best-selling book on the agency whose accuracy has never been
|
|||
|
questioned, Nugan Hand seems to fall in the category of an independent
|
|||
|
organization, closely allied with the CIA. "It doesn't seem to be a
|
|||
|
proprietary in the full sense of the word, that is, owned and controlled
|
|||
|
by the agency, nor does it seem to be a simple front organization. It
|
|||
|
seems to be more of an independent organization with former CIA people
|
|||
|
connected with it, and they're in business to make money, but because of
|
|||
|
their close personal relationship with the agency, they will do favors
|
|||
|
for the agency." These favors might include laundering money and
|
|||
|
providing cover for agents, or for any highly secret activity the agency
|
|||
|
is involved in but doesn't want to be connected to. The agency, in
|
|||
|
turn, might use its influence to throw business the company's way, or to
|
|||
|
offer the company protection from criminal investigation.
|
|||
|
CIA men on covert missions do not identify themselves as such. But
|
|||
|
those exposed to the culture of spying learn how to interpret the word
|
|||
|
of members of the spying community, whether active or retired. They
|
|||
|
know, as any Mafia member does, that the business of the organization
|
|||
|
cannot always be identified by an official seal. But it can be
|
|||
|
recognized nonetheless.
|
|||
|
It is in this sense that one must judge what Nugan Hand was, and what
|
|||
|
moral responsibility the United States government has for what Nugan
|
|||
|
Hand did.
|
|||
|
No one has been convicted of a crime for the Nugan Hand Bank's
|
|||
|
activities. Frank Nugan died in his Mercedes -- although gossipy
|
|||
|
newspapers, consumed by the scandal, would occasionally report that he'd
|
|||
|
been spotted in far-flung places. Suspicion grew so wild that in
|
|||
|
February 1981 Australian officials ordered Nugan's body exhumed, just to
|
|||
|
put everyone's mind at ease. Michael Hand fled Australia in June 1980,
|
|||
|
with a false passport and a fake beard, accompanied by another former
|
|||
|
U.S. intelligence operative. His whereabouts are still unknown. Bernie
|
|||
|
Houghton disappeared at roughly the same time (accompanied by Thomas
|
|||
|
Clines). But unlike Hand, Houghton had done most of his stealing
|
|||
|
outside Australia. Once it was clear that the investigations were
|
|||
|
rather toothless, he returned there in October 1981, again as a barkeep,
|
|||
|
with a few years of part-time banking in his past. Admiral Yates,
|
|||
|
General Manor, and the other retired military officers stayed beyond the
|
|||
|
reach of Australian authorities and have never testified under oath.
|
|||
|
The legitimate security interests of the United States certainly require
|
|||
|
a large and efficient intelligence operation. [snort -jpg] But the
|
|||
|
people and organizations that make up what is called the intelligence
|
|||
|
community in the U.S. government have gone far beyond the gathering of
|
|||
|
intelligence. In many cases, the word *intelligence* has been used as a
|
|||
|
cover for covert and unconstitutional acts of war and civil crime.
|
|||
|
The public, here and abroad, knows it, and respect for law itself is
|
|||
|
dissipated. Dope peddlers and weapons smugglers almost universally
|
|||
|
claim to be working for the CIA, and many can prove they really are.
|
|||
|
The connections have prevented prosecution even in cases where the
|
|||
|
crimes themselves were never authorized, and law enforcement is confused
|
|||
|
and corrupted.
|
|||
|
When agents of the United States steal, when they get involved in drug
|
|||
|
deals, how far should the patriotic cloak be granted by national policy
|
|||
|
stretch to cover them? Does it cover an agent who lines his pockets in
|
|||
|
side deals while working in the name of national security? What acts
|
|||
|
lie beyond a presidential directive to do "whatever is necessary"? When
|
|||
|
has license been granted, and when has it simply been taken?
|
|||
|
What the Nugan Hand affair should have established, and what the Contra-
|
|||
|
gate scandal makes even clearer, is that the license to commit crimes in
|
|||
|
the name of national security has been granted too often and too
|
|||
|
lightly. Without a recognition of this central fact, scandal will follow
|
|||
|
scandal. The nation's moral capital will continue to be squandered. And
|
|||
|
the country's real, legitimate security interests will be seriously and
|
|||
|
repeatedly damaged by the twisted values of self-appointed "patriots."
|
|||
|
</conspiracyFile>
|