Part 3: Drugging America...Secret CIA Financial Institutions....Anatomy of a Secret CIA Airline

Drugging America 

A Trojan Horse 

By Rodney Stich

CHAPTER THREE 

Secret CIA Financial Institutions 

A primary CIA drug-money laundering operation was Nugan Hand Bank with headquarters in Sydney, Australia and branch offices in Far East countries. Drug money laundering was the primary function of this CIA operation, with offices conveniently located in the Golden Triangle drug producing area. Nugan Hand Bank was incorporated in 1976 in the Cayman Islands, a popular money-laundering location, and believed to be a replacement for Castle Bank & Trust that had been incorporated in Nassau, Bahamas. Secondary functions for Nugan Hand were arms sales and funding covert activities. 

Staffed By the CIA 

Most of the management personnel of Nugan Hand Bank were intelligence community personnel. The most visible partners were Francis Nugan, Michael Hand, and Maurice Bernard Houghton. When Nugan Hand shut down, most of the staff moved to other CIA operations, including Bishop, Baldwin, Rewald, Dillingham m and Wong in Hawaii. These players, with a long CIA and military intelligence background, included, for instance, Admiral Earl Yates, General Leroy Manor, and General Edwin Black. 

Nugan Hand had vast amounts of money hidden in assets and financial holdings throughout the world. Either to appear as a legitimate international investment operation, or to defraud people out of millions of dollars, Nugan Hand took deposits from individuals throughout the world. When the cover for this CIA operation was blown, these funds were quickly moved to other CIA proprietaries, inflicting financial losses upon the investors and depositors. Many of the individuals putting money into the CIA’s Nugan Hand Bank were military personnel, who eventually lost everything they deposited. 

Exposing the CIA’s Nugan 

Hand Drug Operation 

Nugan Hand’s cover was blown on April 11, 1980, by a reporter for Target, a Hong Kong financial newsletter. This exposure required Nugan Hand to immediately shut down the operation, destroy evidence of its CIA links, and for the key players to leave town. 

Francis Nugan was one of the most visible players in the Nugan Hand operation. He was an alcoholic with a reputation for talking too much, a trait that threatened to expose the CIA’s role in the operation. Assassins killed Nugan (January 27, 1980), leaving his body in a car alongside a lonely road outside of Sydney, Australia. A bolt-action rifle was found alongside the body, and the scene was made to look like a suicide. 

An unspent bullet remained in the firing chamber of the bolt-action rifle. For an unspent bullet to be in the chamber after firing the shot that was instantly fatal, someone—other than Nugan —had to manually operate the bolt handle. Nugan obviously did not do this. The bullet had killed Nugan instantly, blowing away much of his skull and scattering it throughout the car. There were no fingerprints on the gun, indicating that whoever fired the fatal bullet wiped the fingerprints from the rifle. 

Calling Card of CIA 

Director on Nugan’s Body 

The only identification on Nugan’ s body was a calling card apparently overlooked by the killers: William Colby, former Director of the Central Intelligence Agency, with a meeting date written on the back. Colby was legal counsel for Nugan Hand and had connections to the Wall Street law firm of Reid & Priest, suggesting that this firm was a front for the CIA or a CIA proprietary. 

Colby’s Mysterious Death 

Some years later, on May 6, 1996, Colby died under mysterious circumstances. With his dinner on the table, he allegedly went canoeing by himself, at night, in a fragile canoe, on the Wicomico River, a tributary of the Potomac River at Rocky Point, Maryland. His body washed ashore a week later. 

Colby knew of many CIA secrets and testified frequently before Congress. He revealed many CIA secrets, including killings by the CIA, and a list of prior CIA operations, which angered many people, including those who would be exposed in criminal activities. He headed Operation Phoenix in Vietnam that killed over 20,000 Vietnamese. President Nixon made Colby director of the CIA in 1973. After Ford took over the presidency following Nixon’s departure, President Ford replaced Colby because Colby was revealing to Congress too many CIA and other government secrets. 

Hand Surfaced in CIA activities 

in Iran and Caribbean 

Before Australian authorities started an investigation, Michael Hand disappeared, along with most of the Nugan Hand records. Although the media reported that Hand had disappeared, leaving no trace, one of my CIA sources, Trenton Parker, told how he and Hand had worked together in the early 1980s. Hand had first gone to Iran, working with the CIA, and then to the Caribbean. Parker stated that he and Hand took over one of the drug trafficking operations for the CIA in Central and South America. He said that Hand’s experience in developing the Golden Triangle drug operations for the CIA made him useful in expanding the drug operations from Central and South America into the United States. 

Most U.S. Media Kept Nugan 

Hand Affair Out of the News 

The CIA’s Nugan Hand affair received considerable media attention in Australia, but the mainstream media in the United States said virtually nothing about this CIA operation. Australian authorities conducted numerous investigations, but in their final report they whitewashed the Nugan Hand affair. 

Major Efforts to Destroy CIA Links 

After Nugan’s body was found, intense activities were initiated to destroy Secret CIA Financial Institutions 95 evidence linking Nugan Hand Bank to the CIA. Retired three-star U.S. General Leroy J. Manor (formerly chief of staff for all U.S. forces in Asia and the Pacific), who had been head of Nugan Hand’s Philippine office, tried to have the wire services block the reporting of Nugan’s death. Recently retired Rear Admiral Earl P. Yates (formerly chief of staff for strategic planning for U.S. forces in the Pacific and Asia) flew to Australia to direct the shredding of documents. Yates was president of Nugan Hand, and lived near CIA headquarters at Langley, Virginia. Michael Hand joined in the shredding. Maurice Houghton and his attorney, Michael Moloney, also arrived. Hand threatened lower-level employees, stating if Maloney’s orders to sanitize the files before the law arrived weren’t followed, “terrible things would happen; your wives would be cut up and returned to you in bits and pieces.” (Wall Street Journal, August 24, 1982) 

Two Wall Street Journal articles (August 25 and 26, 1982) described Nugan Hand Bank as a drug and arms-related operation, staffed by CIA and military personnel. The articles stated in part: 

Nugan Hand bank was deeply involved in moving funds about the world for big international heroin dealers...U.S. servicemen are big losers in failure of Nugan Hand Bank. 

Australia’s Royal Commission on Drugs found so much evidence of drug and drug-money trafficking by this CIA operation that it recommended a separate Royal Commission be appointed just for the bank’s operations. But Australia’s intelligence agency, ASIO, blocked an investigation, reflecting the common practice of intelligence agencies to protect each other rather than their own country. U.S. officials stymied every attempt by Australian authorities to obtain information about Nugan Hand Bank. 

During its investigation, the Royal Commission found that drugs were flown into a landing strip by former Air America pilot K.L. “Bud” King and Michael Hand. The strip was on a real estate development promoted by U.S. singer Pat Boone and financed by wealthy shipping magnate D.K. Ludwig. King, who also worked for the Boone-Ludwig project, whose testimony could have been very damaging to Nugan Hand and U.S. officials, died mysteriously in a fall. 

Australian authorities connected Nugan Hand not only to drug and arms transactions, but also to contract murders, of which there were several associated with Nugan Hand’s demise. Australian attorney John Aston and his law firm were found to represent Nugan Hand and various drug traffickers, and the law office was used as a drop point for money to be secretly deposited and moved by Nugan Hand. 

Disappearance of One Billion Dollars 

Hand disappeared as Australian authorities sought to question him about Nugan’s death, the Nugan Hand Bank operation, and the disappearance of approximately one billion dollars from the bank. 

Bishop, Baldwin, Rewald, 

Dillingham and Wong 

After Nugan Hand’s cover was blown and the operation abandoned, the CIA brought into existence another financial institution that was based in Hawaii. A name was fabricated, which included names famous in Hawaii: Bishop, Baldwin, Rewald, Dillingham and Wong (BBRDW ).

For appearances, the CIA placed in charge a Honolulu businessman who had previous CIA connections: Ronald Rewald. Rewald had worked for the CIA years earlier while attending Milwaukee Institute of Technology. That CIA college project was called Operation MH Chaos, and consisted of spying on student groups during the mid-1960s. The CIA gave Rewald the alias WINTERDOG. Other similar CIA operations were called Operation Mother Goose and Operation Back Draft. 

Rewald‘s first CIA station chief and handler was Eugene J. Welch, who was later replaced by Jack Kindschi, followed by Jack W. Rardin, all of whom coached Rewald on CIA operations. Several years later, Rewald would be the fall guy when the CIA cover was blown on BBRDW. 

The CIA used BBRDW as a international investment company cover, with 120 employees staffing offices in sixteen countries, including Hong Kong, India, Indonesia, Taiwan, New Zealand, Singapore, London, Paris, Stockholm, Brazil and Chile. CIA personnel opened and operated these far-flung offices. 

This CIA proprietary was started, operated, and funded by the CIA in 1979, using many of the same high-level people that had staffed Nugan Hand Bank. By the end of 1980, BBRDW began setting up offices in Hong Kong, Taiwan, Indonesia, Singapore, and Australia, all former Nugan Hand locations, staffing the offices with over 30 CIA agents. Some of these agents were the same high level people that operated Nugan Hand Bank (General Edwin Black, General Leroy Manor, Admiral Lloyd Vassey, Admiral Earl Yates, Walter McDonald, and Maurice Houghton). As in most CIA-related proprietaries, its key management was comprised of CIA-related personnel. 

Rewald entertained world-known figures, including the Sultan of Brunei, Ferdinand and Imelda Marcus, members of the Afghanistan Mujahideen. 

CIA Cover Blown by 

Honolulu Television Reporter 

In the mid-1980s a Honolulu television reporter discovered irregularities about the operation and started reporting them, which threatened to expose it as a CIA operation. CIA personnel secretly transferred the funds into other secret CIA operations and then, working with Justice Department prosecutors, falsely charged Rewald with fraudulent diversion of millions of dollars in assets, indicting him on August 30, 1984. 

U.S. District Judge J. Fong refused to allow famed San Francisco lawyer Melvin Belli to represent and defend Rewald. Instead, he appointed a young law school graduate who had never tried a case. In addition, Fong barred Rewald from presenting documentary evidence of his CIA relationship and showing that BBRDW was a secret CIA operation. 

The court proceedings became known throughout the world as a CIA operation and cover-up, except in the United States where the media kept a lid on the events. 

The naive jury believed everything the prosecutor claimed, and was further influenced by Judge Fong’s hostile attitude toward Rewald. Rewald’s inexperienced lawyers tried, but wasn’t any match against the chicanery of the Justice Department and CIA personnel and the conniving judge. Even though the missing money could never be traced, the jury refused to believe that BBRDW was a CIA operation and decided that Rewald was guilty of having embezzled millions of dollars from BBRDW. They decided he was guilty and Judge Fong sentenced Rewald to prison for 80 years. [You have to have a defective brain to even work as a clown,national security my ass,what a joke DC]

After ten years in prison, Rewald came up before the parole board. I had sent to the parole board a draft of a chapter on Rewald, showing the fraud and corruption responsible for his incarceration. It is unknown whether this had anything to do with the parole board’s decision, but Rewald was released. 

Rewald then returned to his wife and children who had supported him throughout these trying times. Rewald became employed in the entertainment business and started leading a life as normal as possible after having suffered in this manner. 

Because this book focuses more on drug trafficking, a more detailed history of BBRDW can be found in the edition of Defrauding America. 

Rewald Became a Friend 

and Confidant 

In the early 1990s, Ron Rewald and I became good friends, and over several years he provided me a great amount of information on all forms of CIA activities, along with several boxes containing hundreds of CIA documents generated within the secret BBRDW operation. 

Funding Secret Bank 

Accounts for U.S. Officials 

In March 1996, Rewald gave me several boxes containing hundreds of CIA documents generated from the CIA’s secret operation in Hawaii. Within these boxes I found highly sensitive material, including notes that Rewald had made while the titular head of BBRDW. These notes and documents, including CIA papers, showed that the operation was definitely related to the CIA. 

Rewald, as titular head of BBRDW, was primarily involved in public relation type of activities. He stated that some of the CIA personnel in BBRDW were involved in drugs but that he did not get involved. I had the benefit of years of contacts with CIA and other deep-cover personnel and that I was far more aware of the extent of CIA drug trafficking than Rewald. I felt that he was unaware of the extent of these activities. 

Documents Bringing Down 

Officials—In Any Other County 

Deeply imbedded in these documents was an envelope labeled “Attorney Client information.” The information was dynamite, divulging secret bank accounts set up for well-known politicians and covert agency operatives. The notes in the envelope listed high-level people with secret CIA-funded accounts. The names on the left side of the notes were the aliases Rewald used to identify the people on the right for which there were secret bank accounts opened and funded by the CIA through BBRDW. 

Irwin M. Peach- George Bush 
Mr. Bramble- George Bush 
Commander Quinstar- General Hunter Harris 
Mr. Apan- Robert W. Jinks 
Mr. Grey- Robert Allen 
Farrah Fawn- Jackie Vos 
General Shake- Arnold Braswell 
Mr. Branch- Richard Armitage 
Mr. Denile- William Casey 
Slimey Affirm- Stanley Sporkin 
Captain Perjury- Ned Avary 
Attorney Doright- Robert Smith 

Arnold Braswell was commander-in-chief of U.S. Pacific Air Force (CINCPAC). Rewald‘s notes also indicated that fictitious names were used to hide money for B.K. Kim, Philippine President Ferdinand and Imelda Marcos, among others. Richard Armitage was U.S. Assistant Secretary of Defense and reportedly heavily involved with drug trafficking while in Vietnam. William Casey was Director of the Central Intelligence Agency. Stanley Sporkin was legal counsel for the CIA, and then a federal judge in Washington, D.C. In this capacity, he unlawfully dismissed one of my federal actions seeking to expose the government corruption in which he was involved. 

These notes, written by Rewald over ten years earlier when he was head of BBRDW, provided additional evidence of U.S. officials hiding their money in secret bank accounts overseas. The accounts were in financial institutions in Hong Kong, Switzerland, and the Caymans. Information on another sheet that I found in Rewald‘s papers revealed activities engaged in by CIA agents embedded into BBRDW and its various subsidiaries. These are the activities in which Rewald refused to get involved, including CIA drug trafficking. These notes revealed other activities that I hadn’t known about earlier. While Rewald was hospitalized in Honolulu, sources kept him informed of some activities being taken to remove and hide the funds from BBRDW and subsidiary accounts. General Hunter Harris called President George Bush to alert him that the cover on BBRDW had been blown, and wanted instructions as to how to proceed. CIA head, William Casey, then called Robert W. Jinks, and told him to work with Robert Allen. Jinks was then ordered to proceed to Texas to get bank account numbers and then go to the Cayman Islands where the accounts were located. 

Rewald‘s notes indicated that someone from CIA headquarters at Langley, or an associate of Robert Allen, eventually went to the Cayman Islands and moved BBRDW funds to another offshore country. Robert Smith, who wasn’t directly involved in the money transfer but aware something was going on, learned that a General in Texas was to give Robert Jinks bank account information and that he, Robert Smith, was to go to the Caymans to retrieve the hidden money. General Arnold Braswell was to assist in this removal, but because of stress and his drinking problem, he was too unreliable and was not used. 

Similar efforts were being taken to remove funds from BBRDW and subsidiary accounts in Hong Kong and Switzerland. About this time, funds were being received from secret arms sales and Rewald said that Ned Avary diverted these funds away from BBRDW. 

While these events were taking place, Robert Allen sought to force Jackie Vos to disclose the whereabouts of the Green Book that listed these accounts so as to destroy the records. 

Forbes Magazine Editor Reported 

Similar Financial Irregularities 

Former senior editor of Forbes magazine, James Norman, had reports (Media Bypass, February 1996) that a secret group in the intelligence community, outraged at what was going on, infiltrated bank money transfer systems and discovered large quantities of money sequestered in overseas bank accounts for government figures. One of these people was allegedly Vincent Foster, President Clinton’s personal attorney, who made a number of one-day trips to Switzerland to conduct bank activities. 

Rewald Invited to Washington 

by President George Bush 

Rewald wrote in his notes that he had met President George Bush twice in Hawaii, and had been invited to meet with the president in Washington for lunch or dinner, along with someone that Rewald identified as “Brady.” All of these people were described in Rewald’s notes by their code names, but a separate sheet of paper identified who they were, except for “Brady.” 

I asked Rewald about these, and he stated that he made the list of names with secret offshore bank account numbers. I asked Rewald, “Referring to the fictitious names for offshore bank accounts, do I correctly understand that you made up the alias names yourself?” 

You mean, Peach for Bush ? That was done well after the collapse [of BBRDW ] and was done to disguise my reference to the accounts so that someone picking it up wouldn’t know what I was talking about. These people certainly had these accounts. 

In 1995, some months before the downing of TWA Flight 800, Rewald provided me with information and documentation relating to surface-to-air missiles about to be acquired by Middle East terrorists. That same information could have possibly changed and improved U.S. involvement in Afghanistan. More about these matters in later pages. 

The CIA secrecy agreement signed by Ronald Rewald, recopied her for easier reading (original copy in my possession). 

SECRECY AGREEMENT 

1. I acknowledge the fact that because of the confidential relationship between myself and the U.S. Government, I will be the recipient of information which, in itself, or by the implications to be drawn therefrom, will be such that its unlawful disclosure or loose handling may adversely affect the interest and the security of the United States. I realize that the methods of collecting and of using this information, as well as the identity of persons involved, are as secret as the substantive information itself and, therefore, must be treated by me with an equal degree of secrecy. 

2. I shall always recognize that the U.S. Government has the sole interest in all information which I or my organization may possess, compile or acquire pursuant to this understanding. No advantage or gain will be sought by me as a result of the added significance or value such information may have, due to the Government interest in it. 

3. I solemnly pledge my word that I will never divulge, publish, or reveal either by word, conduct, or by any other means such information or knowledge, as indicated above, unless specifically authorized to do so, by the U.S. Government. 

4. Nothing in this understand is to be taken as imposing any restriction upon the normal business practices of myself or my organization: i.e., information normally possessed by us or gathered in the regular course of business will continue to be utilized in accordance with our normal practices. 
Signature Signature 
H. Mason Ronald R. Rewald 
25 June 1979 CMI Investment Corporation 
Declassified Date 8/25/85

CHAPTER FOUR 

Anatomy of a Secret CIA Airline 

In mid-1995, I started a friendship with a 15-year veteran of deep-cover CIA activities who provided me with detailed information on highly secret covert activities. Stephen Crittenden operated a CIA proprietary airline, Crittenden Air Transport (CAT), based in Bangkok, Thailand, with a small office at the Miami International Airport, and several subsidiaries. He described how the CIA starts up a secret proprietary airline and puts a figurehead in position as the titular head of the operation. 

Years earlier, CIA operative Gunther Russbacher had told me about Crittenden Air Transport, describing it as a CIA operation, and I listed it as such in the second edition of Defrauding America. But it wasn’t until after that second edition was published that Crittenden contacted me. We spent dozens of hours in frequent deposition-like sessions and exchanged dozens of long detailed fact filled letters during which I learned more about the secret operation of that airline. Some CIA operatives referred to that airline as the “ghost” airline because it was often seen in covert operations but little was known of it, including where it was based. 

Start of A CIA Proprietary 

Crittenden joined the Army at 17, and was in the Army Special Forces program. He did four 9-month tours of duty in Vietnam from 1969 to 1973 and was with Air America from January 1974 to December 1975. Crittenden’s conduct in Vietnam drew the attention of the CIA, and he was selected to be the head of a new airline. At 24 years of age, Crittenden had much to learn about operating an airline, but the CIA provided management personnel and did most of the scheduling from CIA headquarters at McLean, Virginia. He was provided a mentor to organize and operate the airline that was given the name, Crittenden Air Transport (CAT). 

In January 1976, Crittenden Air Transport commenced operations with five C-123 aircraft, an office building in Bangkok (with offices in Sydney, Australia and Miami) and $20 million in start-up operating cash provided by the CIA. This high-level CIA involvement permitted Crittenden to fly many of the flights. It was a business-person’s dream. He had no mortgage payments to make, and engine replacements and aircraft upgrading were provided by the CIA at no charge. Most of the aircraft loads consisted of arms and drugs, with payment for full loads even when flying partial loads or empty.  

First Flight to China 

In January 1976, Crittenden Air Transport (CAT) made its first flight in a two-engine C-123, which was to Beijing, China, delivering a load of small arms and picking up a load of heroin. CAT received a $100,000 check from the CIA’s Shamrock Corporation in Ireland for that flight. Crittenden, a young man given an airline by the CIA, thought he had really hit the big time. Far bigger payments would be made in the future. (CAT should not be confused with an earlier CIA airline, Civil Air Transport out of Taiwan that also used the initials, CAT.) 

The drugs from that flight were unloaded at Bangkok, Thailand, where another CIA proprietary (or front) airline, Southern Air Transport (SAT), transported the drugs in its four-engine C-130 to Los Angeles. At that time, Crittenden Air Transport was only flying twin-engine short-range military C-123s, and Southern Air Transport was flying long-range four-engine C-130s. The C-123s flying from Bangkok to Clark Air Force Base near Manila carried approximately 10,000 to 12,000 pounds of heroin. 

CIA Provided CAT Additional Aircraft 

Several years after the formation of Crittenden Air Transport, the CIA provided Crittenden Air Transport with seven military C-130s and one Boeing 707, which came from Evergreen International Airline’s operation at Pinal Airport near Marana, Arizona, a small town north of Tucson. No money was paid for the aircraft, and no money was owed on them. Eventually, Crittenden Air Transport had over 15 large aircraft. 

After receiving the long-range C-130 aircraft, Crittenden Air Transport then handled much of the Pacific Rim cargo for the CIA that was formerly handled by Southern Air Transport. These flights usually flew from Hong Kong to the United States via Honolulu. After this change, Southern Air Transport confined its operations mostly to Central and South America (until it returned to the Pacific rim in approximately 1987). 

With the additional and longer-range aircraft, the CIA had Crittenden flying into additional countries, including the United States, Mexico, France, Germany, Great Britain, Egypt, Italy, Colombia, Bolivia, and Panama. Payments for these flights came through the CIA’s Shamrock Corporation, with checks written on various bank accounts, including the Bank of Credit and Commerce International (BCCI ), Valley Bank in Phoenix (a reported CIA proprietary), Bank One, and Barclays Bank in Miami. (Barclays is a major British bank headquartered in London, with offices throughout the world.) 

Common destinations in the Pacific were Sydney, Manila, and Singapore. Out of Miami, common destinations included San Salvador in El Salvador, Guatemala City in Guatemala, Managua in Nicaragua, San Jose in Costa Rica, and Panama City in Panama. A typical flight from Manila or Bangkok to the United States would make several fuel stops and proceed to various destinations in the United States, including Miami (where Crittenden had a small office) or Mena, Arkansas. Special codes were used during air traffic control procedures that advised Customs not to inspect that aircraft. 

Loads of Arms and 

Drugs for the CIA 

Crittenden went into detail describing the types of cargo he carried, the people he dealt with, and many specifics concerning logistics, fueling, billing, payments, and other data that could only be known by someone in a position held by Crittenden. Most of the loads were either arms or drugs, including heroin from Southeast Asia or cocaine and marijuana from Central and South America. Crittenden explained that other covert proprietary airlines, such as Southern Air Transport and Evergreen, also carried similar loads for the Drug Enforcement Administration. 

Further Description of Drug Trafficking 

Crittenden described numerous CIA flights transporting drugs into the United States. He described his contacts with Fernando Canles, then head of the Bolivian Air Force, who transported cocoa paste in their own aircraft to Medellin, where it was then off-loaded for further processing into cocaine. Crittenden described flying Canles to La Paz in 1984 in a newly overhauled Lodestar 500 (a converted piston-powered Lockheed Lodestar). Crittenden said that he gave Canles flying lessons in the Lodestar, and that Canles had an expensive condo in Key Colony in Key Biscayne, Florida. 

Meeting with Colombian Drug 

Trafficker Pablo Escobar 

Crittenden described the many drug loads that he flew for the CIA out of Southeast Asia and Central and South America. He described various contacts that he had with known high-level drug traffickers. He described his Miami meeting with Pablo Escobar in 1990 to arrange payment for a CIA drug flight out of Colombia. 

Paymaster for Drug Cartels? 

Crittenden described Colombian and Bolivian drug cartel people landing their Cessna Citations and Lear jets at Marana Airport, arriving to obtain payments for prior drug shipments. These were usually flights from Colombia and Bolivia, and which usually took off from an airport outside of Mexico City and then on to Marana, 50 miles into the United States from the Mexican border. Stephen said these planes never cleared Customs. 

State Police Protecting Drug Loads 

Crittenden went into detail about drug loads that he flew for the CIA into Mena Airport in Arkansas. He described the practice of Arkansas State Police guarding the unloading operations, closing off the airport access roads during unloading, which coincided with what other pilots had told me who had flown drugs into Mena. 

Shamrock Corporation, CIA Paymaster 

Other CIA assets, including Gunther Russbacher, had described the role played by the CIA’s Shamrock Corporation in Ireland, disbursing money for various CIA operations, including bribe money to federal judges and other covert agency assets. Crittenden described his relationship with Shamrock that focused on other areas of Shamrock’s activities. He said that the Shamrock Corporation paid his airline for the flights flown, which he said totaled over $500 million for flights from 1976 to 1988. 

Orders from CIA Headquarters 

Crittenden described how he received his instructions from the CIA for his various missions. In some cases, he called his handler, Ross Lipscomb, at CIA headquarters in McLean, Virginia. Crittenden remembered the confidential Drugging America—A Trojan Horse 104 phone number as 202-357-1100, and when the switchboard operator answered, Crittenden would respond, “Access code 4613,” after which he would be switched to his CIA contact. Stephen said that the “3” in the code signified that he was Level Three. 

Instructions for Avoiding 

Radar Detection 

In some cases his instructions came on disks that he would put into his computer. He described receiving disks on some occasions from CIA asset G. Gordon Liddy, sometimes receiving the disks in the garden area of the DuPont Center in Miami. Included in the disk data was information about avoiding radar detection while flying drugs into the United States from Central and South America. 

CIA Stolen Aircraft Operation 

Crittenden described another facet of how the CIA (and the National Security Council under Oliver North ) used stolen aircraft in the Contra arms and drug-smuggling operation. CIA assets Gunther Russbacher and Terry Reed described this practice. Crittenden described how twin-engine Beech D-18's were stolen and then sent to Volpar Aviation at Van Nuys Airport in California for a Volpar conversion to nose-wheel from tail-wheel configuration. Crittenden stated that a Sam Virse from Memphis, Tennessee, took many of these aircraft to Volpar. 

Elaborating more on this operation, Crittenden stated that Aviation Materials on Sweeney Road in Memphis, Tennessee, was an aircraft salvage yard containing wrecked Beech 18s, Queen Airs, King Airs, Barons and Cessna 366 and 377s. Reportedly, the owner, Graham Lotts, would give the aircraft manufacturer’s data plates that were riveted onto the fuselages of the wrecked aircraft to Virse, who owned an airport at Bud Island in Memphis. Virse reportedly had a couple of assistants who would steal identical aircraft. The manufacturer’s identification plates would be removed from the stolen aircraft and replaced with the data plates from the wrecked aircraft. The aircraft would then be flown to Volpar in Van Nuys to be repainted and modified. 

Crittenden stated that Volpar knew the CIA was picking up the aircraft after modification, but was probably unaware that the aircraft were stolen. He said that this practice continued from 1976 to 1988, during the time of the CIA, State Department, and National Security Council’s arms and drug trafficking in the Contra operation. 

Requiring FAA Assistance 

Crittenden described how someone within the FAA at its Oklahoma City registration division cooperated in this scheme by furnishing Sam Virse presigned aircraft Airworthiness Certificates to be used in the stolen aircraft having the substituted manufacturer’s identification plates. 

Companies Cooperating with the CIA 

Crittenden described several airlines that were involved with the CIA in a cooperating relationship, including Eastern and Braniff when they were still operating, and Continental. These cooperating airlines received various benefits for their covert role with the CIA, including fuel allotments and fuel discounts, mail contracts, hidden subsidies or payments.  

Another Side of CIA

Evergreen Operations 

Crittenden described the practice of stealing jet engines and other valuable equipment and avionics from Eastern Airlines aircraft that were stored at Marana Airport after Eastern went into Chapter 7 bankruptcy. He described how low-time jet engines were removed from Eastern Airlines’ Lockheed 1011s and other aircraft and then replaced with high-time nearly run-out engines, and the records altered to cover up for these activities. 

This mindset could be expected to be accompanied by similar conduct in other aircraft maintenance practices, such as placing worn parts on aircraft and counting on averages that they would not be discovered. A former Evergreen mechanic, Andy Anderson, based in Australia, filed a lawsuit against Evergreen Airlines (Portland Free Press ) charging that he was fired for objecting to the practice of installing worn-out parts on Boeing 747s and other aircraft and falsely showing them as meeting replacement specifications. 

One of Evergreen’ s government contracts involved the “Logair” contract, flying military equipment and supplies from one air force base to another. (I also flew this contract operation as a pilot for Transocean Airlines in the 1950s.) 

A video was produced about Evergreen’ s covert activities and CIA connections that were titled, “Welcome to Evergreen.” The video caused the Air Force Office of Special Investigations (AFOSI) to conduct a secret investigation of Evergreen in 1995. 

Revolving Door: Congressional 

CIA Oversight As CIA Employee 

Former Congressman Denny Smith, who had oversight responsibilities for the CIA, later became a member of Evergreen‘s board of directors. 

Another CIA operator in Houston, Ted Smith, sold and traded military equipment throughout the world. When a deal was made, Crittenden Air Transport would load the military equipment at Fort Hood, Texas, and at that time the list was given to a Major Robert Cooper. Often, the goods were unloaded in San Salvador, El Salvador. Crittenden said the CIA people responsible for subsequent distribution were James Pennington and John Forsyth. 

Ports-Of-Call Airline 

Crittenden said his airline did business with Ports-of-Call Airline that flew passengers to vacation destinations and also had cargo flights for hauling arms and various cargo, such as food to Ethiopia. He said the airline hauled drugs for the CIA. The airline was based in Denver and had a fleet of Boeing 707 and Convair 880 and 990 jets. After Congress conducted closed-door hearings into the Iran-Contra affair, and after Denver papers carried stories of its questionable operation, the CIA shut down the operation. 

Crittenden said his C-130 aircraft hauled four loads of cocaine during 1983 and 1984 to Guatemala City, where the loads were transferred to Ports-of-Call Convair 990 jets. Each C-130 carried approximately 20,000 pounds of drugs that were distributed into two Convair 990s. Ports of Call operated in close liaison with Evergreen International. 

Contact with CIA’s Evergreen Airline 

Evergreen International Airlines was known to be a CIA proprietary or front, and was first told to me in the early 1990s by CIA operative Gunther Russbacher. Crittenden had frequent contacts with top management people at Evergreen’s McMinnville, Oregon, headquarters, and Evergreen’s more secretive operation at the Marana Airport. Crittenden thought that the McMinnville operation was relatively clean as far as drug trafficking was concerned and that the drug shipments went through Marana. 

Crittenden described how CIA money was flown from CIA headquarters at McLean, Virginia to Marana, sometimes using a Boeing 707 with NASA markings, flown by CIA pilots, including himself. Part of this money was reportedly used to pay for drug shipments arriving from Central and South America. 

Crittenden had dealt personally many times with Evergreen‘s president, Dale Smith. Stephen said that Smith was more of a figurehead and that for many years the main person was Mike Irwin who provided Stephen with a card authorizing his presence at the heavily guarded Marana operation. Crittenden said Don Doss was head of aircraft scheduling, and was a level-two CIA asset. Doss’ immediate boss was Walt Burnett. 

Listening to CIA Conversations 

A practice that I had with Gunther Russbacher was repeated several times with Crittenden. While I had either of them on the phone I would use my telephone conference-call capabilities to call CIA assets and CIA companies that they knew, and I would then listen to the conversations, which provided further support of Crittenden’s CIA status. During a June 1995 telephone conversation between Crittenden and Evergreen‘s Walt Burnett, the conversation clearly established that they knew each other and had engaged in CIA-related activities. During another call that I placed to Evergreen’s Walt Vernon in June 1995, it was equally obvious that they had both engaged in CIA activities. 

The same was done with other CIA proprietaries and assets. Calls were made to Southern Air Transport (SAT) headquarters in Miami, during which he talked CIA business with a key management person whom he had known for the past 12 years. It was obvious they knew each other and had worked for the CIA. Other secret conference calls were made to other CIA proprietaries and to present and former CIA assets, each of which discussed prior or present CIA activities. Similar calls were made to other CIA assets with whom Crittenden was familiar. 

Phone Contacts with China’s Chung 

Family Several calls were made to the Los Angeles representatives of China’s powerful Michael Chung family with whom Crittenden‘s CIA airlines did considerable drug hauling in the past. Crittenden described how the Chung family flew drugs from China to Hong Kong, and then his C-123s would fly the drugs to Clark Air Force Base near Manila, where Southern Air Transport‘s long range aircraft would fly the drugs into the United States. 

During the phone calls that I listened to, Crittenden was dealing with representatives of the Chung family in Los Angeles, who were seeking to have Crittenden obtain for them a fleet of Boeing 727 aircraft to start an airline in China. One of the loads that would be carried by the airline would be drugs. During a series of telephone conversations, Crittenden arranged for a Cesar Resurreccion to inspect 727s in Tucson at Hamilton Aircraft Sales. 

The Same Chung Family 

Bribing Clinton and Democratic Party 

Several years later, Johnny Chung was implicated in funding large amounts of political campaign funds to President Clinton and the Democratic Party, which many people claimed was bribe money. 

Describing a Crittenden 

Air Transport Subsidiary 

Crittenden described another subsidiary of Crittenden Air Transport, Saarkes Air Cargo, based in Abu Dhabi, whose main cargo was drugs. The CIA furnished the proprietary with three Boeing 707s, which were used to fly drugs to Bangkok, Shanghai, Miami, and Mena Airport in Arkansas. Even though Saarkes was listed as a Crittenden Air Transport subsidiary, Crittenden, who was the titular head of the airline, had no control over it. (Russbacher had told me years earlier about this covert CIA airline.) 

During various telephone conversations, Crittenden stated names of people with whom he had contact. These included Captain Jack, the alias for the CIA pilot flying for Rowan Drilling out of Houston, and who was reportedly a SR71 pilot for the CIA. Crittenden said his real name was Sonny Knoles. 

CIA Smuggling Guns to the IRA 

Crittenden told me of a 1988 C-130 flight to Ireland carrying CIA arms and a stinger missile for the Irish Republican Army. The flight originated at Fort Hood and then flew to Dublin, where it cleared Customs. The C-130 then took off and landed in a field south of Dublin, where the arms were off-loaded. 

During one of several phone calls I made connecting Crittenden to a secret IRA location in Ireland, we had a prisoner, Michael Martin, place a call to the IRA location (which was in a bar in Ireland). 

A special security code was used to get the phone operator to connect to the secret IRA location. When the call was over, Crittenden asked me what I thought. I said that I couldn’t understand a single word Martin or the person in Ireland said because of their heavy Irish brogue. (At that time, Crittenden was in prison. An interesting story as to how he was released, following my filing of an amicus brief in court, is found in the third or later edition of Defrauding America.) 

Martin had introduced himself to Crittenden while at the federal prison at Phoenix, asking if he was Stephen Crittenden. Martin had helped in the unloading of the arms in Southern Ireland on the flight flown to Ireland. 

Crittenden explained that the Evergreen Shipping Lines based in Taiwan was part of the Evergreen Group, which included the CIA’s Evergreen International Airlines. He described people who worked with him, including Robert Newbould, who was chief pilot for Crittenden Air Transport and after its shutdown, flew for Rowan Drilling out of Houston, Texas. 

Crittenden Described Some of 

the People He Dealt With 

Crittenden named people and businesses with whom he worked and their drug activities. Activities, most of whom I’ve left unnamed in this book. He described his friendship, through the CIA, with various drug cartel people, including Hernando Villarell, Cardehana, Colombia. Crittenden described his Mafia contacts made through the CIA, especially in the St. Louis area. When I asked what the CIA did for the Mafia, he said, “We haul weapons and drugs to them.” He described being given by the CIA the names of judges and Mafia people,  especially in Missouri and Illinois, to contact if he encountered trouble. He gave me the names and phone numbers of many Italian and Mexican Mafia people who worked routinely with the CIA, including assassins that did sanctions (murders) for the Agency. 

Checking His Credibility 

I checked Crittenden‘s credibility in several ways. I had already been advised by other deep-cover people of the existence of Crittenden Air Transport. I had listened to telephone conversations that I placed to known CIA proprietaries. I quizzed Crittenden repeatedly about minute details of his operations, the aircraft specifications, the type of navigation systems installed on the aircraft, and other specifics that covered intricate areas of CIA activities during the 15 years that Crittenden operated the CIA proprietaries. 

No one could have been so well informed, and so quick with the answers, if that person hadn’t been directly involved. When Crittenden didn’t know about a particular area that I asked, and which he had no reason to have known, he quickly admitted it, rather than fabricate, which could have easily been done. I had Crittenden’s address book containing the names and phone numbers of his many contacts, including drug kingpins with whom he and the CIA did business. More is stated about Crittenden in the third edition of Defrauding America. 

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DOJ-Protected Drug Smugglers & Terrorists