textfiles-politics/pythonCode/personTestingOutput/handbank.xml

<xml><p>Article 6208 of alt.conspiracy:
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!rburns
From: rburns@finess.Corp.<ent type='LOC'>Sun</ent>.COM (<ent type='PERSON'>Randy Burns</ent>)
Newsgroups: alt.conspiracy
Subject: <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent> Bank--More <ent type='PERSON'>Grist</ent> for the Mill
Keywords: bank <ent type='ORG'>CIA</ent> corruption
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Date: 13 Dec 91 23:08:26 GMT
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Article: "Crimes of Patriots," by <ent type='PERSON'>Jonathan Kwitny</ent>
Date: 23 Jan 90 22:55:31 GMT

By popular email demand: more Conspiracy basics, reproduced out of
further boredom from <ent type='PERSON'>MOTHER JONES</ent>, Aug/Sept 1987.

Says MoJo:

<ent type='PERSON'>Jonathan Kwitny</ent> is an investigative reporter for the WALL STREET
<ent type='ORG'>JOURNAL</ent>. This article is adapted from his book, THE CRIMES OF <ent type='ORG'>PATRIOTS</ent>:
A TRUE TALE OF DOPE, DIRTY MONEY, AND THE <ent type='ORG'>CIA</ent> (W.W. Norton &amp; Co.).

Congressional hearings provide us with daily glimpses into a shadowy
world of arms dealers, middlemen, retired military officers, and spooks.
The details of secret arms shipments to <ent type='GPE'>Iran</ent> and money transfers to the
contras have provoked expressions of shock and outrage about the
"privatization" of foreign policy and the president's obsession with
covert activity, as if these were inventions of the Reagan
administration. They weren't.

The need, cited by the past eight presidents, to pursue a perpetual and
largely secret global war against an ever-expanding <ent type='NORP'>Soviet</ent> empire has
justified gross violations of <ent type='NORP'>American</ent> law for 40 years. What is new in
1987 is that a window suddenly has been opened on this shadow world
before the spooks who inhabit it could completely take over.

What we are seeing today is not an aberration; the aberration is only
that we are seeing it, and what we are seeing is still not most of it.

To fight their perpetual war, successive administrations have required
an army of men who live in a world of spying and secrecy. Wrapping
themselves in a cloak of patriotism, they have carried out unlawful acts
of violence against civilians in <ent type='LOC'>Asia</ent>, <ent type='LOC'>Africa</ent>, and <ent type='LOC'>Latin America</ent>. Many
soldiers in this shadow army also have stretched the cloak of patriotism
to cover criminal enterprises that turn a hefty profit. Indeed, "the
enterprise" that has been the focus of this summer's hearings, run by
Maj. Gen. <ent type='PERSON'>Richard Secord</ent> and his partner, <ent type='PERSON'>Albert Hakim</ent>, is now the
subject of a criminal investigation.

The subject of this story is another example of such an enterprise: the
<ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent> Bank -- a mammoth drug-financing, money laundering, tax-evading, investor-fraud operation based in <ent type='GPE'>Sydney</ent>, <ent type='GPE'>Australia</ent>. Its
global operations, spanning six continents, involved enough U.S.
generals, admirals, <ent type='ORG'>CIA</ent> directors, and spooks to run a small war. Not
surprisingly, their activities brought them into contact with men of
similar military and intelligence backgrounds now facing possible
indictment for their roles in the <ent type='GPE'>Iran</ent>-contra affair.


Crimes of Patriots
by
<ent type='PERSON'>Jonathan Kwitny</ent>


The cold war strayed into <ent type='ORG'>Lithgow</ent>, <ent type='GPE'>Australia</ent>, one <ent type='LOC'>Sun</ent>day morning in a
<ent type='ORG'>Mercedes Benz</ent>. Sgt. <ent type='PERSON'>Neville Brown</ent> of the <ent type='ORG'>Lithgow</ent> Police recorded the
time as 4 A.M., January 27, 1980. "I was patrolling the Great <ent type='NORP'>Western</ent>
Highway south of <ent type='GPE'>Bowenfels</ent> with Constable First Class Cross," Sergeant
<ent type='PERSON'>Brown</ent> said. "We saw a 1977 <ent type='ORG'>Mercedes</ent> sedan parked on the south side of
the old highway known as '40 Bends.'" It was now three months later,
and Sergeant <ent type='PERSON'>Brown</ent> was testifying on the first day of a week-long
inquest at the <ent type='ORG'>Lithgow</ent> courthouse. <ent type='ORG'>Lithgow</ent>, a settlement about 90 miles
inland of <ent type='GPE'>Sydney</ent>, had been of little previous significance to <ent type='NORP'>Western</ent>
Civilization. Consequently, Sergeant <ent type='PERSON'>Brown</ent> was unused to the reporters
in the courtroom and the television cameras outside. But he maintained
his official poise under the stern questioning of the big-city lawyers.

The two officers approached the unfamiliar <ent type='ORG'>Mercedes</ent> stranded on the old
two-lane road. "A male person was sitting slumped over toward the
center of the vehicle," <ent type='PERSON'>Brown</ent> testified. "A .30-caliber rifle was held
by him, the butt resting in the passenger-side floor well. His left
hand held the barrel, three or four inches from the muzzle and near the
right side of his head. His right rested on the trigger."

<ent type='PERSON'>Frank Nugan</ent>, the autopsy concluded, died of a single gunshot wound.
Given the moat of undisturbed <ent type='PERSON'>gore</ent> that surrounded his body, there
seemed to be no way that someone else could have gotten into his car,
killed him, and left. The facts all pointed to suicide -- a scenario the
U.S. <ent type='ORG'>Central Intelligence Agency</ent> would be able to live with. Other
aspects of Sergeant Brown's testimony, however, were much more
disturbing to the <ent type='ORG'>CIA</ent> and others.

For example, a typed list was found in Nugan's briefcase, containing
scores of names of prominent <ent type='GPE'>Australia</ent>n political, sports, and business
personalities. Next to the names were handwritten dollar amounts,
mostly five-and six-figure sums. Were they the names of debtors?
Creditors? No one knew yet.

Sergeant <ent type='PERSON'>Brown</ent> also testified that a calling card was in the wallet
found in Nugan's right rear pocket. It bore the name of <ent type='PERSON'>William</ent> E.
<ent type='ORG'>Colby</ent>, a former <ent type='ORG'>CIA</ent> director and now a private consultant. Written on
the back of the card was "what could have been the projected movements
of someone or other," <ent type='PERSON'>Brown</ent> testified: "From Jan. 27 to Feb. 8, Hong
Kong at the Mandarin Hotel. 29th Feb.-8th March, <ent type='GPE'>Singapore</ent>." <ent type='PERSON'>William</ent>
<ent type='ORG'>Colby</ent> was in those places at roughly those times.

Probably the most sensational testimony at the inquest came from Michael
<ent type='ORG'>Hand</ent>, Nugan's <ent type='NORP'>American</ent> partner. <ent type='ORG'>Hand</ent> identified himself to the court as
chair-man, chief executive, and 50 percent shareholder of <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent>
Ltd., "the major operating company of a worldwide group of companies
with offices throughout the world." Most people still referred to the
company by the name of its most prominent subsidiary, the <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent>
Bank.

Hand's exploits had little to do with banking. A highly decorated
member of <ent type='ORG'>the Green Berets</ent> in <ent type='GPE'>Vietnam</ent>, he went on to become a contract
agent for the <ent type='ORG'>CIA</ent> in <ent type='GPE'>Vietnam</ent> and <ent type='GPE'>Laos</ent>, training hill tribesmen for
combat and working closely with the CIA's <ent type='ORG'>Air America</ent> to see that the
tribesmen were supplied. Bill <ent type='ORG'>Colby</ent> had run the program. In 1967 <ent type='ORG'>Hand</ent>
migrated to <ent type='GPE'>Australia</ent>.

How <ent type='PERSON'>Michael Hand</ent>, just coming off active duty as a U.S. intelligence
operative in Southeast <ent type='LOC'>Asia</ent>, happened to hook up with <ent type='PERSON'>Frank Nugan</ent> -- a
local lawyer and playboy heir to a modest food-processing fortune -- is
still a mystery. Asked under oath at the inquest, <ent type='ORG'>Hand</ent> said he couldn't
remember.

Although Hand's <ent type='ORG'>CIA</ent> ties had helped lure the reporters to the courtroom,
thousands of people were interested in his testimony for other reasons.
They, or their families or their companies, had money invested with
<ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent>. For weeks now, the bank's officers had stalled off
inquiries from the panicky investors. Finally, from the witness stand,
<ent type='ORG'>Hand</ent> let loose the bad news: the company would not be able to pay its
depositors. Even "secured" deposits would not be paid, since the bonds
"securing" them were phony. Indeed, <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent> couldn't even pay its
rent. "The company is insolvent," said <ent type='ORG'>Hand</ent>.

<ent type='PERSON'>Nugan</ent> Hand's unpayable claims amounted to some $50 million. Many more
lost deposits never were claimed for one simple reason: the money had
been illegal to begin with -- tax cheating or dope payments or the
wealth of a few Third World potentates. Not money the losers would want
to account for in open court. The grand total easily could have been in
the hundreds of millions of dollars.

One might expect that the police, faced with the mysterious death of the
head of a large international bank, would take steps to seal off his
house and office. In the days after <ent type='PERSON'>Frank Nugan</ent>'s death, however, the
police stayed conveniently away, while the company's files were packed
in cartons, sorted, or fed to a shredder. Present for the ransacking
was a team of former U.S. military operatives in Southeast <ent type='LOC'>Asia</ent>, led by
<ent type='ORG'>CIA</ent> veteran <ent type='PERSON'>Michael Hand</ent>, and including the president of the <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent>
Bank, Rear Adm. Earl F. ("Buddy") <ent type='PERSON'>Yates</ent>, and the mysterious puppetmaster
of <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent>, Maurice ("Bernie") <ent type='GPE'>Houghton</ent>.

Prior to becoming president of <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent> Bank in 1977, Admiral <ent type='PERSON'>Yates</ent>, A
Legion of Honor winner in <ent type='GPE'>Vietnam</ent>, commanded the aircraft carrier USS
JOHN F. KENNEDY and served as chief of staff for plans and policy of the
U.S. <ent type='LOC'>Pacific</ent> Command. He retired from active service in 1974. Though
<ent type='PERSON'>Nugan</ent> Hand's main offices were in <ent type='GPE'>Sydney</ent> and <ent type='GPE'>Hong Kong</ent>, and though its
official address was the <ent type='GPE'>Cayman Islands</ent> (because of the weak regulatory
laws there), Admiral <ent type='PERSON'>Yates</ent> lived in <ent type='GPE'>Virginia</ent> <ent type='PERSON'>Beach</ent>, <ent type='GPE'>Virginia</ent> -- an easy
hop from <ent type='GPE'>Washington</ent>, D.C., where he helped maintain a <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent> office.

Bernie <ent type='GPE'>Houghton</ent>, a fleshy, gray-haired <ent type='NORP'>Texan</ent>, had been a camp follower
of America's <ent type='LOC'>Asia</ent>n wars, always as a civilian, after a few years in the
<ent type='ORG'>Army</ent> Air Corps in <ent type='EVENT'>World War</ent> II. He had been to <ent type='GPE'>Korea</ent> and <ent type='GPE'>Vietnam</ent> and
had made a living buying and selling war surplus and supplying the
"recreational" needs of GIs. <ent type='GPE'>Houghton</ent> arrived in <ent type='GPE'>Australia</ent> in January
1967, eight months before <ent type='PERSON'>Michael Hand</ent>, where he opened the Bourbon and
Beefsteak Restaurant, the <ent type='ORG'>Texas Tavern</ent>, and <ent type='ORG'>Harpoon Harry</ent>'s. All three
establishments, on the seamy side of <ent type='GPE'>Sydney</ent>, catered to U.S. troops on
leave from <ent type='GPE'>Vietnam</ent>.

Though ostensibly occupied only as a hony-tonk bar impresario, <ent type='GPE'>Houghton</ent>
displayed a smooth working relationship with high-ranking military
officers and <ent type='ORG'>CIA</ent> and U.S. embassy personnel. Houghton's international
travels were facilitated whenever he was needed by Australia's secret
scrutiny agency, <ent type='ORG'>ASIO</ent>, which also gave him security clearance in 1969.

Other high-level retired <ent type='ORG'>Pentagon</ent> and <ent type='ORG'>CIA</ent> officials associated with
<ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent> included three-star Gen. LeRoy J. Manor, former chief of
staff for the entire U.S. <ent type='LOC'>Pacific</ent> Command, who headed the bank's
<ent type='NORP'>Philippine</ent> operation; Gen. <ent type='PERSON'>Edwin Black</ent>, former high-ranking intelligence
official and assistant <ent type='ORG'>Army</ent> chief of staff for the <ent type='LOC'>Pacific</ent>, who headed
the bank's <ent type='GPE'>Hawaii</ent> office; Gen. <ent type='PERSON'>Erle Cocke</ent>, Jr., former national
commander of the <ent type='NORP'>American</ent> Legion, whose consulting office served as
<ent type='PERSON'>Nugan</ent> Hand's <ent type='GPE'>Washington</ent> office; Walter <ent type='PERSON'>McDonald</ent>, former deputy director
of the <ent type='ORG'>CIA</ent>, who devoted most of his consulting business to <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent>;
and several top former <ent type='ORG'>CIA</ent> field men. <ent type='PERSON'>William</ent> <ent type='ORG'>Colby</ent>, former director of
the <ent type='ORG'>CIA</ent>, was the bank's lawyer on a variety of matters.

Perhaps <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent> Bank's most brazen fraud was the theft of at least $5
million, maybe more than $10 million, from <ent type='NORP'>American</ent> civilian and
military personnel in Saudi Arabia. The man in charge of <ent type='PERSON'>Nugan</ent> Hand's
Saudi operations was Bernie <ent type='GPE'>Houghton</ent>, the barkeep with high-level ties
to U.S. and <ent type='GPE'>Australia</ent>n intelligence.

It was 1979, the year of OPEC's highest oil prices ever, and Saudi
Arabia was awash with money. Whole new cities were planned, and
thousands of <ent type='NORP'>American</ent> professionals and managers were arriving to
supervise the hundreds of thousands of newly arriving <ent type='LOC'>Asia</ent>n laborers.

To get their services, Saudi Arabia had to offer much higher salaries
than either the <ent type='NORP'>American</ent>s or the <ent type='LOC'>Asia</ent>ns could earn back home. Most of
the <ent type='NORP'>American</ent>s were going over for a couple of years, braced to suffer
the isolated, liquorless, sexless <ent type='NORP'>Muslim</ent> austerity in exchange for the
big nest eggs they would have when they returned home.

When they got to Saudi Arabia they faced a problem, however. Every week
or two they got paid in cash, <ent type='NORP'>American</ent> or Saudi. And because <ent type='NORP'>Muslim</ent> law
forbids the paying or collecting of interest, there were no banks in the
<ent type='NORP'>Western</ent> sense of the word. So what to do with all that money?

A claim letter from <ent type='PERSON'>Tom Rahill</ent>, an <ent type='NORP'>American</ent> working <ent type='GPE'>Dhahran</ent>, Saudi
Arabia, described how the operation worked: "Mr. Houghton's
representatives would visit <ent type='ORG'>Aramco</ent> (Arabian <ent type='NORP'>American</ent> Oil Company)
construction camps in Saudi Arabia shortly after each payday. We
'investors' would turn over Saudi riyals to be converted at the
prevailing dollar exchange rate, and receive a <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent> dollar
certificate...The moneys, we were told, were to be deposited in the
<ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent> <ent type='GPE'>Hong Kong</ent> branch for investments in various 'secured'
government bonds." Another claim letter, from a group of 70 <ent type='NORP'>American</ent>
workers in Saudi Arabia (who among them lost $1.5 million), says that
was their understanding as well.

According to investors, <ent type='ORG'>Aramco</ent>, <ent type='ORG'>Bechtel</ent>, and other large U.S. concerns
boosted the <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent> connection by letting salesmen hold meetings on
company property and use company bulletin boards. Bernie <ent type='GPE'>Houghton</ent> "only
worked in cash," says <ent type='PERSON'>Linda Geyer</ent>, who, along with her husband, a
plumber on a large construction project, invested and lost $41481 with
<ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent>. "One time he had to have two briefcases." Others remember
<ent type='GPE'>Houghton</ent> actually toting away the loot in big plastic bags, slung over
his shoulder like some reverse <ent type='PERSON'>Santa Claus</ent>.

By his own admission, <ent type='GPE'>Houghton</ent> hauled off the intended savings not only
of private-contract <ent type='NORP'>American</ent> employees, but also of U.S. <ent type='ORG'>Air Force</ent>
personnel stationed in Saudi Arabia. In fact, the record shows that
<ent type='GPE'>Houghton</ent> quickly made contact with two colonels he'd known from <ent type='GPE'>Vietnam</ent>
War days. One of them, R. <ent type='PERSON'>Marshall Inglebeck</ent>, "showed Mr. <ent type='GPE'>Houghton</ent>
around, introduced him, and explained that Mr. <ent type='GPE'>Houghton</ent> was a banker
looking for business for <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent> Bank," according to <ent type='GPE'>Australia</ent>n
investigators. The other was Col. <ent type='PERSON'><ent type='PERSON'>Billy</ent> <ent type='PERSON'>Prim</ent></ent>, who served on Admiral
Yate's staff at the <ent type='LOC'>Pacific</ent> Command in <ent type='GPE'>Vietnam</ent> days and introduced
<ent type='GPE'>Houghton</ent> to <ent type='PERSON'>Yates</ent> back then. It was at Colonel Prim's house in <ent type='GPE'>Hawaii</ent>
that Bernie <ent type='GPE'>Houghton</ent> would meet Maj. Gen. <ent type='PERSON'>Richard Secord</ent>.

After word of <ent type='PERSON'>Nugan</ent> Hand's collapse reached the Saudi press in 1980,
<ent type='GPE'>Houghton</ent> and some of his banking staff fled the country, several aboard
the last plane out before the Saudi police came searching for them.
Depositors say that when they went to the old <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent> office after
that, they found it occupied and guarded by U.S. <ent type='ORG'>Air Force</ent> personnel,
who assured them that everything would be straightened out.

The claim letter from the 70 investors who lost $1.5 million says, "We
were greatly influenced by the number of retired admirals, generals, and
colonels working for <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent>."

One of the bigger mysteries surrounding <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent>, the answer to which
may be almost self-evident, concerns its branch in <ent type='PERSON'>Chiang Mai</ent>, <ent type='GPE'>Thailand</ent>.
(Indeed, <ent type='GPE'>Australia</ent>n investigators reported that the idea for a Chiang
Mai branch was suggested to <ent type='PERSON'>Michael Hand</ent> by <ent type='PERSON'>Murray Stewart Riley</ent>, a
major <ent type='GPE'>Australia</ent>n-U.S. drug trafficker now in prison in <ent type='GPE'>Australia</ent>.)

<ent type='PERSON'>Chiang Mai</ent> is the colorful market center for the hill people of
northwest <ent type='GPE'>Thailand</ent>. Like few other cities on earth, it is known for one
thing. More than <ent type='GPE'>Detroit</ent> is known for cars, or <ent type='GPE'>Newcastle</ent> for coal, or
<ent type='ORG'>Cognac</ent> for brandy, <ent type='PERSON'>Chiang Mai</ent> is known for dope. It is the last outpost
of civilization before one enters the law-unto-itself opium-growing
world of the Golden Triangle.

If it seems strange for a legitimate merchant bank to open an office in
<ent type='PERSON'>Chiang Mai</ent>, consider this: the <ent type='PERSON'>Chiang Mai</ent> <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent> office was lodged
on the same floor, in what appears to be the same office suite, as the
United States Drug Enforcement Agency office. The offices shared a
common entrance and an internal connecting door between work areas. The
<ent type='ORG'>DEA</ent> receptionist answered <ent type='PERSON'>Nugan</ent> Hand's phone and took messages when the
bank's representatives were out.

The <ent type='ORG'>DEA</ent> has provided no explanation for how this came about. Its
spokespeople in <ent type='GPE'>Washington</ent> have professed ignorance of the situation,
and <ent type='ORG'>DEA</ent> agents in the field have been prevented by the superiors from
discussing it with reporters.

The Drug Enforcement Agency has a history of working with the <ent type='ORG'>CIA</ent> at
home and abroad; with drug money corrupting the politics of many
countries, the two agencies' affairs are often intertwined. Was that
the case with the <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent> office in <ent type='PERSON'>Chiang Mai</ent>?

It was, according to <ent type='PERSON'>Neil Evans</ent>, an <ent type='GPE'>Australia</ent>n whom <ent type='PERSON'>Michael Hand</ent> chose
as the bank's chief representative in town. In recent years <ent type='PERSON'>Evans</ent> has
made daring statements to <ent type='GPE'>Australia</ent>n investigators and television, and
to the <ent type='ORG'>CBS</ent> EVENING NEWS in <ent type='GPE'>the United</ent> States. Among other things, he
has said that <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent> was an intermediary between the <ent type='ORG'>CIA</ent> and various
drug rings.

Much that <ent type='PERSON'>Evans</ent> says appears kooky. He claims to have attended
important intelligence meetings in <ent type='GPE'>Hong Kong</ent> and <ent type='GPE'>Australia</ent> that he
probably didn't attend, though the meetings may have occurred. But much
else that he has said has proven to be true.

In <ent type='PERSON'>Chiang Mai</ent> he was surrounded by people with long backgrounds in U.S.
intelligence who were working for <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent>. They included <ent type='NORP'>Thais</ent> who
until recently had been working in professional or executive jobs at
U.S. bases or with a <ent type='ORG'>CIA</ent> airline, and <ent type='PERSON'>Billy</ent> and <ent type='PERSON'>Gordon Young</ent>, sons of
missionaries, who worked for the <ent type='ORG'>CIA</ent> during the <ent type='GPE'>Vietnam</ent> War and who now
have ties to a SOLDIER OF FORTUNE magazine project. And some very
wealthy people whom <ent type='PERSON'>Evans</ent> claims to have taken deposits from agree they
talked often to him and were urged to make deposits.

There is little doubt that many millions of dollars in deposits from
numerous <ent type='NORP'>Thai</ent> citizens were taken out of <ent type='GPE'>Thailand</ent>; <ent type='PERSON'>Nugan</ent> Hand's
surviving records establish that. The only question is: Who were the
depositors?

When this reporter went to <ent type='PERSON'>Chiang Mai</ent> with a list of local citizens whom
<ent type='PERSON'>Evans</ent> said he had taken drug money from, the <ent type='ORG'>DEA</ent> agents on the scene at
first were eager to make a deal: the list, in exchange for whatever
nonconfidential information the agents could share about the people on
it. The agents, all new since <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent> days, went on about how
curious they had been since they'd arrived in town and heard stories
about the bank that used to operate across the reception room; they
wanted to hear more.

Suddenly a phone call came from an embassy official in <ent type='GPE'>Bangkok</ent> who
earlier had impeded my progress in every way possible (such as by
postponing issuance of standard credentials). The official ordered the
<ent type='ORG'>DEA</ent> agents not to talk to me. And that was that.

The U.S. government stonewalling on the <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent> issue continued all
the way to <ent type='GPE'>Washington</ent>. At the <ent type='GPE'>Hong Kong</ent> office of U.S. Customs, the one
federal agency that acknowledges it looked even briefly into <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent>,
senior investigator <ent type='PERSON'>James Wilkie</ent> agreed to an interview. I was waved in
to find <ent type='ORG'>Wilkie</ent> seated behind a desk next to a shredding machine and a
large carton of papers bearing a red horizontal strip, outlining the
white letters C-L-A-S-S-I-F-I-E-D.

<ent type='ORG'>Wilkie</ent> was calmly feeding the documents into the shredder as he spoke,
taking each batch of shreddings out and putting them through a second
time.

"We can't comment on anything that's under investigation or might be
under investigation," he said.

Was <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent> under investigation?

"There wasn't an investigation. We did make some inquiries. We can't
comment."

I asked what was being shredded.

"It's none of your business what's being shredded," <ent type='ORG'>Wilkie</ent> replied.

And that, as far as the <ent type='NORP'>American</ent> voter and taxpayer is concerned, may be
the whole problem.

From the time of <ent type='PERSON'>Frank Nugan</ent>'s death in 1980, through four wide-sweeping
investigations commissioned by the <ent type='GPE'>Australia</ent>n government, the <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent>
Bank scandal has rocked <ent type='GPE'>Australia</ent>n politics and dominated its press. To
date, the investigations have revealed widespread dealings by <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent>
with international heroin syndicates and evidence of mammoth fraud
against U.S. and foreign citizens. But many questions about the bank's
operations remain unanswered.

The law in <ent type='GPE'>Australia</ent>, and in most other countries where <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent>
dealt, restricts the export of money. <ent type='PERSON'>Michael Hand</ent> himself boasted that
<ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent> moved $1 billion a year through its seemingly magical
windows. How could the <ent type='GPE'>Australia</ent>n security agencies have let an
operation of that size break the exchange laws with impunity for so many
years -- unless, of course, the <ent type='GPE'>Australia</ent>n agencies were cooperating
with the bank, or had been told that <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent> had a powerful
government sanction from abroad?

The U.S. military officers who worked for <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent> told <ent type='GPE'>Australia</ent>n
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 <ent type='PERSON'>Nugan</ent>
Hand's executive ranks raises obvious questions about the role of the
U.S. government. But the <ent type='ORG'>CIA</ent>, the <ent type='ORG'>FBI</ent>, and the U.S. Customs Service,
all of whom have information on <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent>, have refused to release what
they know to <ent type='GPE'>Australia</ent>n investigators. When an <ent type='GPE'>Australia</ent>n newspaper,
<ent type='ORG'>the NATIONAL TIMES</ent>, petitioned the <ent type='ORG'>FBI</ent> for information on <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent>
under the Freedom of Information Act, the newspaper was told that it
could only see 71 of some 151 pages of material in <ent type='ORG'>FBI</ent> files. When
these papers arrived they resembled a collection of <ent type='PERSON'>Rorschach</ent> 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 <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent> 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
<ent type='GPE'>Brunei</ent> about ways to protect the sultan's wealth in case of political
upheaval, to lengthy reports from <ent type='PERSON'>Nugan</ent> Hand's <ent type='NORP'>Thai</ent> representative
describing <ent type='GPE'>Vietnam</ent>ese troop movements and battle tactics in Cambodia.

Australia's <ent type='ORG'>Joint Task Force</ent> on Drug Trafficking released a four-volume
report on <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent> to Parliament in 1983, which determined that <ent type='PERSON'>Nugan</ent>
<ent type='ORG'>Hand</ent> had participated in two U.S. government covert operations; the
sale of an electronic spy ship to <ent type='GPE'>Iran</ent> and weapons shipments to southern
<ent type='LOC'>Africa</ent>, probably to U.S.-backed forces in <ent type='GPE'>Angola</ent>.

Both the <ent type='GPE'>Iran</ent>ian and <ent type='LOC'>Africa</ent>n operations involved <ent type='PERSON'>Edwin Wilson</ent>, a career
<ent type='ORG'>CIA</ent> officer, purportedly retired, who was then working as a civilian on
the staff of a supersecret <ent type='ORG'>Navy</ent> intelligence operation called Task Force
157. In 1983, <ent type='ORG'>Wilson</ent> began serving a 52-year sentence in federal prison
for supplying tons of plastic explosives, assassination gear, high-tech
weapons, and trained personnel to <ent type='GPE'>Libya</ent>. He is also the main link
between <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent> and key figures in the <ent type='GPE'>Iran</ent>-contra affair.

The crowd around <ent type='PERSON'>Edwin Wilson</ent> at the time of <ent type='PERSON'>Frank Nugan</ent>'s death in 1980
included Maj. Gen. <ent type='PERSON'>Richard Secord</ent>, then involved in U.S. military sales
for the <ent type='ORG'>Pentagon</ent> worldwide; Thomas <ent type='PERSON'>Clines</ent>, a high-ranking <ent type='ORG'>CIA</ent> official
who went on to run a business founded with <ent type='ORG'>Wilson</ent> money; <ent type='PERSON'>Ted Shackley</ent>,
deputy chief of the CIA's clandestine services division until his ties
to <ent type='PERSON'>Edwin Wilson</ent> led to his resignation; and Rafael ("<ent type='PERSON'>Chi Chi</ent>") Quintero,
a Bay of Pigs veteran who was hired by <ent type='ORG'>Wilson</ent> in 1976 for an aborted
plot to assassinate a political opponent of Col. <ent type='PERSON'>Muammar Qaddafi</ent>.
(Quintero says he backed out when he found out the assassinations were
not authorized by the <ent type='ORG'>CIA</ent>.)

All of these men would later resurface as players in the <ent type='GPE'>Iran</ent>-contra
mission: <ent type='PERSON'>Richard Secord</ent> as the man who ran the operation for the White
House; Thomas <ent type='PERSON'>Clines</ent> as Secord's chief aide; <ent type='PERSON'>Ted Shackley</ent> as a
consultant to a company that subsequently was used to fund the contras;
and <ent type='PERSON'>Chi Chi</ent> Quintero as one of the men who supervised the distribution
of arms shipments to the contras in Central <ent type='GPE'>America</ent>.

The 1983 <ent type='GPE'>Australia</ent>n <ent type='ORG'>Joint Task Force</ent> report listed them all as people
whose "background is relevant to a proper understanding of the
activities of the <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent> group and people associated with that
group." The ties between <ent type='ORG'>Wilson</ent> and his associates, on the one hand,
<ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent>, on the other, were many:

* Shortly after <ent type='PERSON'>Ted Shackley</ent> retired from the <ent type='ORG'>CIA</ent> and went on to a
career in private business, he began meeting with <ent type='PERSON'>Michael Hand</ent>, the
former Green Beret and <ent type='ORG'>CIA</ent> contract agent turned banker. Surviving
correspondence between the two men indicates that their relationship
was well established and friendly.

* <ent type='PERSON'>Richard Secord</ent> told <ent type='GPE'>Australia</ent>n investigators that he had met Bernie
<ent type='GPE'>Houghton</ent> in 1972 at the home of Colonel <ent type='PERSON'>Prim</ent>. The task force
reported that they saw each other occasionally and socially in
<ent type='GPE'>Washington</ent>, D.C., Saudi Arabia, and the <ent type='GPE'>Netherlands</ent> throughout the
middle and late 1970s.

* In 1979 <ent type='PERSON'>Secord</ent> introduced <ent type='GPE'>Houghton</ent> to Thomas <ent type='PERSON'>Clines</ent>. The two men
then met repeatedly with <ent type='PERSON'>Ted Shackley</ent> in <ent type='GPE'>Washington</ent>, which eventually
led to a deal to sell <ent type='NORP'>Philippine</ent> jeeps to <ent type='GPE'>Egypt</ent>. (About a year
later, in June, 1980, when criminal investigations into <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent>
were getting under way in <ent type='GPE'>Australia</ent>, Thomas <ent type='PERSON'>Clines</ent> traveled all the
way to <ent type='GPE'>Sydney</ent> to accompany Bernie <ent type='GPE'>Houghton</ent> on his hasty flight out of
<ent type='GPE'>Australia</ent>.)

* Bernie <ent type='GPE'>Houghton</ent> met repeatedly with <ent type='PERSON'>Edwin Wilson</ent> during this period.
About the time of <ent type='PERSON'>Frank Nugan</ent>'s death, in January 1980, Thomas <ent type='PERSON'>Clines</ent>
and <ent type='PERSON'>Chi Chi</ent> Quintero dropped by Wilson's <ent type='GPE'>Geneva</ent> office. There they
found a travel bag full of documents left by Bernie <ent type='GPE'>Houghton</ent>.
According to task force witnesses, <ent type='PERSON'>Richard Secord</ent>'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 <ent type='PERSON'>Clines</ent>.

Several of the men associated with <ent type='PERSON'>Edwin Wilson</ent> came close to federal
indictment in 1982 in a deal that brought in $71 million in Defense
Department fees for delivering military equipment to <ent type='GPE'>Egypt</ent>. The
shipments were made by Clines's company and were overseen by <ent type='PERSON'>Secord</ent> at
the <ent type='ORG'>Pentagon</ent>. According to <ent type='ORG'>Wilson</ent>, his bookkeeper-girlfriend, and a
female companion of <ent type='PERSON'>Clines</ent>, profits were to be shared by <ent type='PERSON'>Secord</ent>, <ent type='PERSON'>Clines</ent>,
<ent type='ORG'>Shackley</ent>, <ent type='ORG'>Wilson</ent>, and another <ent type='ORG'>Pentagon</ent> official, <ent type='PERSON'>Erich von Marbod</ent>. And
memos from Wilson's lawyer at the time -- first unearthed by <ent type='PERSON'>Peter Maas</ent>
for his book <ent type='ORG'>MANHUNT</ent> -- say the profits were to be shared among a
corporation, apparently controlled by <ent type='ORG'>Wilson</ent>, and four U.S. citizens.

But federal prosecutors decided the word of these witnesses might fail
against the denials of senior <ent type='ORG'>Pentagon</ent> officials. Besides, the careers
of <ent type='PERSON'>Secord</ent> and <ent type='PERSON'>von Marbod</ent> seemed -- at least until the <ent type='GPE'>Iran</ent>-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 <ent type='PERSON'>Clines</ent> and
an <ent type='GPE'>Egypt</ent>ian partner, were thought to be the other investors. (<ent type='PERSON'>Secord</ent>,
<ent type='ORG'>Shackley</ent>, and <ent type='PERSON'>von Marbod</ent> denied involvement in the company.)

<ent type='PERSON'>Clines</ent>, on behalf of his company, pleaded guilty to submitting $8
million in false expense vouchers to the <ent type='ORG'>Pentagon</ent>, and he and his
partner agreed to pay more than $3 million in fines and reimbursements.
That, however, did not dissuade <ent type='PERSON'>Richard Secord</ent> from hiring <ent type='PERSON'>Clines</ent> as his
deputy in the <ent type='GPE'>Iran</ent>-contra operation.

<ent type='PERSON'>Edwin Wilson</ent>, the man who unites all these figures, is the only one who
went to jail, along with a former assistant, <ent type='PERSON'>Douglas Schlachter</ent>.
<ent type='PERSON'>Schlachter</ent> 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 <ent type='GPE'>Australia</ent>n <ent type='ORG'>Joint Task Force</ent> to information about <ent type='PERSON'>Nugan</ent>
Hand's involvement in the two covert deals in <ent type='GPE'>Iran</ent> and Southern <ent type='LOC'>Africa</ent>.

<ent type='PERSON'>Schlachter</ent> remembered meeting Secord's friend Bernie <ent type='GPE'>Houghton</ent> in
Wilson's <ent type='GPE'>Washington</ent> office with two career <ent type='ORG'>CIA</ent> officers around the time
of the spy ship sale. <ent type='ORG'>Immigration</ent> records show that <ent type='GPE'>Houghton</ent> then
traveled to <ent type='GPE'>Iran</ent>, in March 1975, apparently for the only time in his
life. And, according to <ent type='ORG'>the task force report</ent>, he was accompanied by "a
senior serving member of the U.S. Armed Forces." <ent type='ORG'>Immigration</ent> records
also show that <ent type='ORG'>Wilson</ent> traveled to <ent type='GPE'>Iran</ent> twice in subsequent months, once
stopping over first in <ent type='GPE'>Sydney</ent>. At the time of the spy ship sale, in
1975, the U.S. military program in <ent type='GPE'>Iran</ent> was being run by General <ent type='PERSON'>Secord</ent>.

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, <ent type='PERSON'>Michael Hand</ent> 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 <ent type='GPE'>Australia</ent> to go fight "communism" in <ent type='LOC'>Africa</ent>.

From South <ent type='LOC'>Africa</ent> and <ent type='GPE'>Rhodesia</ent> (now <ent type='GPE'>Zimbabwe</ent>), <ent type='PERSON'>Michael Hand</ent> telephoned
and telexed <ent type='PERSON'>Nugan</ent> Hand's <ent type='GPE'>Sydney</ent> office with long lists of weapons
ranging from handguns to machine guns and mortars. A <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent> staffer
was dispatched from <ent type='GPE'>Sydney</ent> to discuss these needs directly with <ent type='ORG'>Hand</ent>.
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 <ent type='GPE'>Houghton</ent> held a series of meetings with <ent type='PERSON'>Edwin Wilson</ent>
at Wilson's <ent type='GPE'>Washington</ent> office. <ent type='ORG'>Wilson</ent> then placed <ent type='PERSON'>Nugan</ent> Hand's order
for 10 million of rounds of ammunition and 3000 weapons. The weapons
were believed to have been shipped from <ent type='GPE'>Boston</ent> to a phony destination in
<ent type='GPE'>Portugal</ent>. (False documentation filed in <ent type='GPE'>Portugal</ent> was also used in the
<ent type='GPE'>Iran</ent>-contra arms shipments.) Ultimately, according to the task force
report, the shipment was probably received by <ent type='PERSON'>Michael Hand</ent> in southern
<ent type='LOC'>Africa</ent> and then shipped to <ent type='ORG'>CIA</ent>-supported fighters in <ent type='GPE'>Angola</ent>.

The final judgment rendered by the task force shows some naivete about
how the <ent type='ORG'>CIA</ent> has actually conducted covert operations over the years.
"All things taken into account," <ent type='ORG'>the task force report</ent> 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 <ent type='ORG'>CIA</ent> style over the years,
perhaps the main problem in understanding <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent> 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 <ent type='GPE'>Iran</ent>-<ent type='NORP'>Contra</ent> 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 <ent type='ORG'>CIA</ent>-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 <ent type='ORG'>CIA</ent>, and they never
forget the need to exchange favors.

According to <ent type='PERSON'>Victor Marchetti</ent>, a former <ent type='ORG'>CIA</ent> officer who coauthored a
best-selling book on the agency whose accuracy has never been
questioned, <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent> seems to fall in the category of an independent
organization, closely allied with the <ent type='ORG'>CIA</ent>. "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 <ent type='ORG'>CIA</ent> 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.

<ent type='ORG'>CIA</ent> 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 <ent type='ORG'>Mafia</ent> 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 <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent> was, and what
moral responsibility <ent type='GPE'>the United</ent> States government has for what <ent type='PERSON'>Nugan</ent>
<ent type='ORG'>Hand</ent> did.

No one has been convicted of a crime for <ent type='ORG'>the <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent> Bank</ent>'s
activities. <ent type='PERSON'>Frank Nugan</ent> died in his <ent type='ORG'>Mercedes</ent> -- 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 <ent type='GPE'>Australia</ent>n officials ordered Nugan's body exhumed, just to
put everyone's mind at ease. <ent type='PERSON'>Michael Hand</ent> fled <ent type='GPE'>Australia</ent> 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
<ent type='GPE'>Houghton</ent> disappeared at roughly the same time (accompanied by Thomas
<ent type='PERSON'>Clines</ent>). But unlike <ent type='ORG'>Hand</ent>, <ent type='GPE'>Houghton</ent> had done most of his stealing
outside <ent type='GPE'>Australia</ent>. 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 <ent type='PERSON'>Yates</ent>,
General Manor, and the other retired military officers stayed beyond the
reach of <ent type='GPE'>Australia</ent>n authorities and have never testified under oath.

The legitimate security interests of <ent type='GPE'>the United</ent> 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. <ent type='PERSON'>Dope</ent> peddlers and weapons smugglers almost universally
claim to be working for the <ent type='ORG'>CIA</ent>, 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 <ent type='GPE'>the United</ent> 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 <ent type='PERSON'>Nugan</ent> <ent type='ORG'>Hand</ent> affair should have established, and what the <ent type='NORP'>Contra</ent>-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."
</p></xml>