The Crimes of Patriots
A True Tale of Dope,
Dirty Money & The CIA
By Jonathan Kwitny
25
"Everybody Left Alive Is Innocent"
Donald Beazley, working to resurrect his respectable American banking career, continued to try to disassociate himself from the scandal. He told the Wall Street Journal* that Nugan Hand's only U.S. business was arranging mergers and acquisitions, and that he had quit the bank because "the merger and acquisition market went to hell." The Journal, at that early stage, was unaware of the American deposit-taking.
*Reporters E. S. ("Jim") Browning and Chris Pritchard.
George Farris, the Nugan Hand Washington representative who was reached in 1982 through the switchboard at Fort Bragg, North Carolina, where he was on secret assignment for the army, remembered Beazley in charge of the company. "After Frank Nugan's death, all things came out over Beazley's signature," Farris said. This lasted "at least through March of 1980."
According to the Stewart Royal Commission, Nugan Hand employe Andrew Wong talked February 4 in Hong Kong with Beazley, "who gave him the impression that the Nugan Hand Group was financially stable and that there was no need for concern about the future of the organization." The Stewart commission said that "in order to forestall any run on the bank following Mr. Nugan's death Mr. Beazley had made public statements in Hong Kong to the effect that the bank was sound." But it accepted his word that he was dissatisfied with the information available in Sydney, gave Hand his resignation, and left Australia February 13, 1980.
Says George Farris, "I know he said he submitted his resignation, but I know when he came to town [Washington] at the end of February he was still assuming his role as the big shot, reassuring me that everything was all right. Nugan Hand was still going to go on to great things." Questioned about what Farris said, Beazley acknowledges it is "possible."*
*My interviews with Farris and Beazley on this point came prior to the Stewart commission's interviews. John McArthur also told me that Beazley had telephoned him in Hong Kong from the United States on Nugan Hand business as late as March 21, 1980, still acting as if in control.
In August 1982, Beazley left his job as president of Gulfstream Banks and became president of City National Bank of Miami. City National was once one of Miami's largest banks, though it had begun to fade. The bank's new owner, who hired Beazley, was Alberto Duque, a Colombian coffee heir. Duque's, and the bank's, lawyer happened to be Stephen W. Arky, son-in-law of Marvin Warner, Beazley's old boss and benefactor at Great American Banks.
But a year after Beazley went to work for the Colombian, Duque's empire was in collapse as banks and other creditors sued him for fraud. He had pledged nonexistent coffee as collateral for some very big loans. In 1986, Duque was convicted in federal court, Miami, of sixty counts of fraud and conspiracy involving $108 million; he was sentenced to fifteen years in prison.
Beazley found himself once more defending a besieged institution. "City National Bank is a strong, solid financial institution," he insisted to the press (as quoted by reporter Mike Langberg of the Fort Lauderdale News/Sun-Sentinel in August 1983). Duque might lose his controlling interest, Beazley asserted, but the bank would do fine. Would the scandal cost Beazley yet another job? "It depends on who buys the bank," he replied.
Meanwhile, as late as March 1984, Stephen Arky's law firm continued to represent Beazley in threatening a libel action against a Wall Street Journal reporter** for articles published in that newspaper. Arky told the Journal it could mitigate damages by retracting the articles. The articles weren't retracted, and the suit wasn't brought.
**The author.
General LeRoy Manor wouldn't cooperate with the Journal reporter while a series of stories was being prepared in 1982. He asserted that he never had anything to do with Nugan Hand. But nine months after that series of articles, when the reporter was preparing another series based on the work of the Australian Joint Task Force, the general changed his stance.
Howard Landau, a retired colonel who, in the air force, had been Manor's personal public relations man, invited the reporter to meet the general at the general's comfortable but not palatial home in the Virginia suburbs of Washington. Sitting himself amidst a veritable museum of memorabilia attesting to a career as a fighter ace and honored commander, Manor ruminated that "It's demoralizing to have five months of your life really destroy a lot of that."
He recalled that he and Admiral Yates had worked and played tennis together in the military. He described conversations in which Yates seduced him into Nugan Hand. He told how impressed he was by the Nugan Hand offices, and by the October 1979 conference. He insisted he was never paid more than expense money.
He praised Wilf Gregory, his colleague in Manila, and Beazley, "a very highly respected individual in the banking business. I said, 'Don, you have very fine credentials. You know what my background is. Would I be over my head?' He said, 'No, give it a try.' He said, 'Even at your age there's a possibility of moving up in an organization like this, because we're going to expand. And if I didn't think that way I wouldn't be in it."
Manor told how he tried to work on commercial deals for Nugan Hand—a Swedish knitting mill, a Chinese plastic toy business, an Australian coconut oil sale—none of which ever came off. He insisted that soliciting deposits was "a very minor part of it. We weren't told to push that."
He says people like Colonel H. Kirby Smith and Colonel Jimmy Maturo, whose deposits he took, volunteered to invest, after hearing him talk about the bank. Why did he continue taking deposits after the bank was in collapse? The night he learned of Frank Nugan's death, he said, "I sat up late at night talking with Gregory, who assured me everything had to be okay." Still, General Manor said, he vowed not to do any business "till I got an explanation." He said he met Beazley in Bangkok, and Beazley told him, "I'm sure everything's all right, but I'm going to Australia and find out. And I'll come back and tell you."
Instead, Manor said, Beazley sent his regrets and went on to England. Mike Hand came instead, and said, "Let me assure you that our books have been examined. We have the backing of large financial institutions in Australia. As far as liquidity is concerned, you have no problems."
So, Manor said, he told Colonel Maturo it was okay to put in some more money in March 1980—the general added an "unfortunately" after recalling this fact. But he insisted that by the same token, his caution had protected the money of a pilot who served in the C-130 wing that Maturo commanded. Because he suspected trouble, Manor said, he had warned the pilot against making a deposit, and the pilot didn't.
"Nobody told Jimmy to invest," he said of Maturo. "I told him I had confidence in it. You can invest in stocks and lose everything, too."
Wilf Gregory says General Manor left the Philippines on the advice of William Quasha, their lawyer. Quasha, who calls himself an "old friend" of Manor, declines to comment on that statement, citing the attorney-client privilege. Manor, at his home, said he didn't flee at all. He said he went to the United States on leave, intending to return, but was prevented from doing so when he got the assignment to investigate the Iranian rescue mission.
"I just wish I hadn't been involved with it at all," he said of Nugan Hand. "But I can see why I made the decision. It looked good. Until Frank Nugan died, I enjoyed the work."
How could a three-star general not be smart enough to see through a fraud as thinly veneered as this one, he was asked. "I've asked myself that question a lot of times," Manor replied.
What does he think of Admiral Yates now? "I think he was taken in as I was. He's an honest individual. A hard worker. I don't think he was the kind of person painted in that [the Wall Street Journal's] article. He's very capable."
The admiral himself, president of the Nugan Hand Bank, told one reporter, "I was just an employee." "They never let me know what was going on," he told another. He said he didn't trust reporters enough to talk to them further. One time he said he didn't have time to talk because he wanted to take his wife sailing on Chesapeake Bay. But he stuck to his story that he had resigned effective with Beazley's appearance.
The Nugan Hand suite in a largely U.S. Government-occupied building by Manila Bay stayed open under the name International Planning & Development Corporation. Wilf Gregory kept his old office and ran it. An office in the suite was occupied by International Planning & Development Corp.'s chairman, Ludwig Peter Rocka, who also happened to be Ferdinand Marcos's brother-in-law.
"I took the office over because they owed me money," Gregory said in 1982. "We [International Planning] get involved in some of the things Nugan Hand used to be involved in." Asked to say what that might be, Gregory replied, "That's private information. I'd get in trouble."
A year after Manor welcomed the reporter into his home, his client, Colonel Smith was still trying to get his $20,000 back. On May 7, 1984, he wrote Manor, praising the accuracy of stories that had appeared in the Wall Street Journal, and again asking for his money:
I invested with you after your "pitch" for Nugan Hand Bank during your speech as the guest speaker before the PACAF/JAG [Pacific Air Force, Judge Advocate General, or military law] Conference at Hickam Air Force Base Officers' Club in December of 1979. My wife and I invested with you because I had been taught through the years and at the Air Command and Staff College as well as the Air War College that general officers obtain their respected rank based on hard work, intelligence, honesty, integrity, etc. . . .
As my investment broker at that time for Nugan Hand Bank, you owed me, my wife and all your other investors a fiduciary relationship to reveal Frank Nugan's murder/suicide as quickly as possible. You knew of Nugan's death when you gave me Nugan Hand Bank's International Certificate of Deposit for $20,000 at the Visiting General Officers Quarters at Clark Air Base in February of 1980! . . .
Why didn't you tell me?
Colonel Smith went on to recall that Manor "departed Manila quickly in late April," and later sent Colonel Smith a letter asking him to contact other depositors about sums exceeding $100,000. The letter, Colonel Smith said, was written "23 June 1980 from the Boiling Air Force Base, D.C., while you were heading up the Iranian Rescue Debacle Investigation."
The reply to Colonel Smith's letter came from a lawyer named Donald G. Smith, of Fairfax, Virginia. The lawyer said, "I represent Lieutenant General LeRoy Manor. . . . The charges that you have made in your letter are unfounded and may be libelous. Your insinuation that General Manor is less than an honorable man must be retracted immediately. Your request for payment of $20,000 is ludicrous and will not be made in whole or in part."
Colonel Smith wrote the lawyer back a more detailed and blistering letter, containing some labels for Manor that almost certainly were libelous, if they were not true. The next day he wrote the Journal reporter, complaining bitterly about the disinclination of the air force to respond to his complaints, and the difficulties under international law of trying to bring suit about a deposit taken in the Philippines, even if the deposit was suggested at a U.S. air base during a military function. He also said he thought the CIA was "probably" involved in covering the matter up.
And he seemed especially bitter that General Manor, having completed his report on the Iranian rescue mission, had been made executive vice-president—the full-time staff head—of the Retired Officers' Association, a prestigious armed forces alumni group that carries considerable political weight.
Colonel Smith enclosed a copy of Manor's message to the association's membership upon assuming office. "During recent years . . . we have witnessed a trend of diminishing respect and support for our military establishment," the message said. "This trend must be reversed ... if our nation is to remain strong and continue a meaningful leadership role among the other nations of the free world." [effin hypocrite DC]
Les Collings, the Nugan Hand Hong Kong representative, went to work for a company there that claimed to have perfected an engine that would burn grass. "It's a company that's about to be very big and well-known," Collings declared in 1982.
Kevin Shirlaw, a representative of the Australian provisional liquidator B. O. Smith, visited Hawaii a month after the bankruptcy. He later wrote a report of what he had found.
His first stop was to see Douglas Philpotts, Nugan Hand's account supervisor at Hawaiian Trust Company (as well as vice-president and treasurer of Hawaiian Trust). Shirlaw learned from Philpotts that the financial data for Nugan Hand Hawaii was prepared under the same standard George Brincat and Steve Hill had used. Regardless of the money actually paid and owed by the Hawaiian unit, Shirlaw's report said, in preparing the financial statements "he [Philpotts] and his associates had followed instructions from Frank Nugan."
Then Shirlaw visited poor Colonel Maturo. He reported telling Maturo "that there was little that I could do as it would appear that he is a creditor of Nugan Hand Cayman Islands Bank and should therefore contact the authorities" in the Caymans—who were already reported to be not cooperating.
The liquidator then went to General Black, old pal of Allen Dulles and Richard Helms, undercover agent against the Chinese, military advisor to the National Security Council, commander of all U.S. forces in Thailand during the Vietnam War, and executive director of the Freedoms Foundation.
Black "asked me who he should direct the depositors to contact," Shirlaw reported, and again Shirlaw suggested the Cayman Islands. Black "then advised me that it was his understanding that all deposits which had been taken were invested in commercial paper in Australia. ... I advised him that the provisional liquidators had not come across any short-term paper."
"He expressed some surprise at this," Shirlaw reported.
Two years later, at an outdoor lunch with the Journal reporter in the garden of the general's private club, Black declared his conscience was clean. The reporter brought up a letter written to Black by Edward F. Pietro, who said he had served with Black in the European Theater in World War II. After seeing a brochure with Black's picture in it as a representative of the bank, Pietro had deposited and lost $4,900 in Saudi Arabia April 8, 1980—more than two months after Nugan's death. "We need some help, General. Can you shed any light on the situation?" the letter said.
General Black had sent Pietro a handwritten note expressing his regrets over the bank's demise, and saying Black would forward Pietro's letter to the liquidators, which he did.
To the reporter, General Black replied, "Nobody I know ever gave me any money. I never took any deposits. Some soldier who served with me in Vietnam may have read my name and deposited money in the Philippines. But my name isn't well enough known around the world to convince many people. They were putting their money in to get higher interest and avoid tax. If somebody had given me money and this happened, I'd feel personally liable to pay them back, if it was a friend of mine. But I don't feel guilty that because of me some guy got swindled."
26
The Agency's Assets
In June 1985, Royal Commissioner D. G. Stewart completed more than two years of work on Nugan Hand by submitting his two-volume report to the governor-general of Australia. That his effort would fail to solve the Nugan Hand mystery was predictable almost from the start. Stewart had rejected the help of investigators like Geoffrey Nicholson of the Corporate Affairs Commission and Clive Small of the Joint Task Force, who had carried the ball halfway downfield and knew the yardage still to be covered. Stewart preferred his own neophyte staff.
Even so, the thoroughness of the failure was astonishing. There was an almost total lack of investigative effort to resolve major issues raised by the earlier investigations. Stewart apparently never tried to compel publicly accountable testimony from Douglas Schlachter, or William Prim, or the many people who had observed Bernie Houghton in Southeast Asia or who helped him leap to wealth and influence almost overnight in Australia—just to name a few obvious examples.
Stewart's report was full of elementary factual errors. Mike Hand was credited with a degree from Syracuse University he never got. Ed Wilson, the merchant of death, was identified as a U.S. Congressman. General Black, who had been dead two years, was described as "currently engaged as a consultant." There were dating errors of a kind unlikely to have been typographical, and other mistakes, some of which have already been noted.
More important was the whitewashing of various CIA connections. Long-identified CIA operatives like Ricardo Chavez were referred to without identification, as if they were ordinary businessmen. Dale Holmgren was said to have "managed all in-flight services for a group named Civil Air Transport," without any indication that Civil Air Transport was a wholly owned proprietary company of the CIA. William Colby was said to have gone to Vietnam for the State Department with the rank of ambassador; no doubt that was an effective cover for his real work in the 1960s, but to maintain that cover story in print in light of what is now known is absurd.
Frank Terpil, the CIA veteran who has been shown in and out of court to have reaped a fortune supplying all sorts of weapons to such lunatic dictators as Idi Amin and Muammar Qaddafi, was identified only as "a reputed arms dealer." Although Stewart claimed that his commission received full cooperation from the U.S. Government, he reported, "Whether Mr. Hand's assertions that he was employed by the CIA are true, the Commission has no way of knowing." Identifying Thomas Clines and Edwin Wilson (in a different section from the one identifying him as a congressman), the commission says they "are alleged to have been CIA agents."
The commission certainly lashed out at Nugan Hand as a corporate entity, which at least countered the continuing efforts of some right-wing groups in the United States to defend the bank. One such organization, called Accuracy In Media, asserted that Nugan Hand was really an honest but hard-luck banking organization that had been maligned by an anti-military press.
Said Stewart, Nugan Hand "depended upon a multitude of frauds and deceptions the like of which may not have been seen before, in this country [Australia] at any rate.... The . . . audited accounts were nothing other than gross untruths published year after year from the very first set of accounts as at 30 June 1974 to the last finalized set as at 30 June 1979.... Nugan Hand Ltd. was at all times insolvent (and in all probability so were all the other Australian companies within the group). . . .
"The group simply flouted the provisions of the legislation as it then stood in that large volumes of currency were moved in and out of Australia," the commission said. In Hong Kong, it said, "activity was recognized, even by the employees of the company, as being a blatant breach of the Banking Ordinance, in that Nugan Hand (Hong Kong) and the Nugan Hand Bank were carrying on a banking business in Hong Kong. . . .
"It is evident that at least until March 1977 the staff of Nugan Hand (Hong Kong) were involved in activities which were in breach of the local Securities Ordinance.... There is also evidence that Mr. Collings sent information concerning deposits to the company direct to Mr. Nugan for the purpose of rewriting" the accounts.
In general, however, the commission made shocking little effort to try to fix any blame except on men who were beyond the reach of legal action. It allowed Yates, Houghton, and McDonald to go on record, unchallenged, blaming Nugan for the fall of the bank. Contrary to all previous investigations, but apparently not based on any new evidence, it singled out the missing Mike Hand as "responsible for the shredding of documents ..., the instruction of others to shred documents and the concealment of records. . . ."
The commission freely laid blame on Hill and Shaw, who had already made their deal with authorities and testified, and on Brincat, who the commission said might be unprosecutable because of flaws it said needed to be remedied in the law regarding accountants. But other characters were allowed to claim that they simply believed what Hand and Nugan told them. While the commission didn't always say it believed them, neither did it marshal challenges.
The commission did write a section on who it thought should be prosecuted for violating the laws of Australia or New South Wales. The section consisted of 208 paragraphs. All but the first two introductory paragraphs were deleted from the report as released to the public.
On the subject of the CIA, the commission simply gave up the game by default. "It is difficult to imagine that a professional group such as the CIA would use or even think of using such a Group [as Nugan Hand] without first making a thorough check of its bona fides," Stewart wrote. "Even a cursory check would have revealed shortcomings which would undoubtedly make the CIA shy away from having anything at all to do with such a Group."
The commission never attempted to resolve the double standard by which it said the CIA would have recognized Nugan Hand's shortcomings as obvious from "a cursory check," while all the former CIA and Pentagon bosses who were engaged in promoting Nugan Hand were allowed to plead ignorance.
On the issue of whether the CIA used Nugan Hand, the commission quotes Admiral Yates saying, "It was too small for one thing, it was too visible for another . . . and if the CIA had been involved in it they certainly would not have let it fail." It quotes General Black saying that the CIA wouldn't use "a little fly-by-night operation like Nugan and Hand's bank."
"The Commission accepts the evidence of these witnesses," Stewart wrote. "None of these witnesses is contradicted by any credible evidence."
Apparently the commission hadn't heard of Paul Helliwell's Castle Bank—or of the Hawaiian investment banking firm of Bishop, Baldwin, Rewald, Dillingham & Wong.
In 1976, Ronald R. Rewald, who would become chairman of Bishop, Baldwin, Rewald, Dillingham & Wong, was convicted in state court, Wausau, Wisconsin, of theft and the illegal sale of franchises. Essentially, Rewald and an associate had conned two high school teachers into investing in a sporting goods business under false pretenses.
Rewald was ordered to pay $2,000 restitution and spend a year on probation. In 1978, both the sporting goods business and Rewald personally were declared bankrupt in federal court, Milwaukee. He had personal debts of $224,987.93 against assets of $1,429.50, and his company had debts of $126,559.19 against assets of $27,326, the court records show.
That same year, 1978, Rewald opened an investment concern in Honolulu. And the United States Central Intelligence Agency helped pay his office expenses and gave him work as a message relay station and a cover for covert operatives. His investment concern was originally called CMI Investments, but soon changed its name to Bishop, Baldwin.
And by 1983 it was thick with CIA and other intelligence men— one of them working on its payroll in his retirement. A couple of air force generals bearing a total of seven stars graced its roster of backers. That was the year Bishop, Baldwin, like the sporting goods business before it—and like Nugan Hand three years earlier—went into bankruptcy.
This time more than a hundred investors lost a total of more than $23 million. Most were Americans. Many were suckered in by the presence of so many military/intelligence heroes, just as the victims were at Nugan Hand. Once again, as at Nugan Hand, there were blatant lies, false financial statements, and gross theft of customer funds.
This time, however, there was no question that the CIA was involved with Rewald's business—though to what degree is still in debate. Rewald claims that Bishop, Baldwin was created and run by the CIA, and that everything he did at Bishop, Baldwin was on CIA orders. That is very unlikely, and as a defense it certainly failed to keep Rewald from being convicted of fraud. He was found guilty in federal court, Honolulu, in 1985, and sentenced to eighty years in prison.
But many boxes of records from the Rewald case were sealed at the CIA's request for national security reasons. And still, enough got on the public record to make a strong case that the CIA gave Rewald the credibility he needed to run his big fraud, and that the CIA knew or should have known what was going on.
Rewald says he was recruited by the CIA in the 1960s while a student at MIT: on questioning, that turns out to be the Milwaukee Institute of Technology, a two-year school from which he failed to graduate. He says he was hired to spy on campus war protesters, which the CIA was indeed doing then. The dean who Rewald says introduced him to the CIA flatly denies having done so, and Rewald has lied so much his word is worthless.
But if Rewald is lying about being a CIA man on campus in the 1960s, he told the same lie to friends and relatives back at the time. Rewald says that when he decided to relocate to Honolulu, his CIA contacts from those early days arranged for him to meet Eugene J. Welch, chief of the CIA office in Hawaii.
At Rewald's trial, Welch testified that Rewald called out-of-the-blue to the CIA's listed phone number in Honolulu in 1978 and volunteered his services. Of course, the word of Welch and other CIA men may not be worth any more than that of Rewald; Welch also testified that he thought his CIA secrecy oath protected him from prosecution for perjury if he lied in court. (Among other things, he also testified that the CIA hadn't reported on student dissidents in the United States, which it had, and that he had never heard of covert operatives being provided with false background credentials, which they have been.)
However the initial contact was made, Rewald wound up lunching with CIA chief Welch, welcoming Welch and his wife to his house for dinner, and meeting Welch's replacement, John C. (Jack) Kindschi. Rewald, new CIA chief Kindschi, and their wives became very close. Kindschi testified that from the fall of 1978, when they came to Hawaii, to 1983, the Kindschis were together socially with the Rewalds an average of two or three times a month.
"The [Rewald] children looked upon us sort of as almost grandparents," Kindschi testified. He participated with the Rewald family in backyard basketball and tennis games, he said. Meanwhile, Rewald was put to work for his country. Welch testified that the CIA's Hawaii office wasn't a covert station, such as existed overseas, but rather a field office such as existed in cities around the United States to collect data volunteered by American citizens traveling abroad. The office was supposed to be "discreet, perhaps, but not secret."
Rewald and his growing staff at Bishop, Baldwin were jet-hopping the globe, seeking investors and trade deals—often involving arms—from Argentina to India to the Philippines. So Welch, Kindschi, and Rewald made a deal whereby the Bishop, Baldwin staff would collect intelligence for the CIA. They would get questions, sometimes in writing, from Kindschi before leaving, then return with lengthy reports.
Welch testified that he asked CIA headquarters in Langley, Virginia, for a name check on Rewald, seeking derogatory information. Despite the criminal conviction and bankruptcies, Welch said nothing showed up, and a CIA file card on Rewald shows that he was approved for a "secret" security clearance in September 1978, and continued with it until the Bishop, Baldwin bankruptcy five years later.
Welch made no bones about the CIA's limited criteria for trustworthiness: he testified that the purpose of the name check was to make sure there was "no derogatory information on file—he is not a Communist, in other words." Mitchell P. Lawrence, Jr., the CIA's deputy director for personnel security and investigation, a thirty-year veteran of both undercover and administrative posts, testified that "based on the volume of work" the FBI didn't like to search criminal records for the CIA unless it was given a fingerprint card, and so normally checked only "what we referred to as the subversive files."
Theft, never mind.
Rewald's clearance meant he could participate in discussions of information classified as "confidential" or "secret," but not "top secret." Kindschi testified that when CIA headquarters asked him to provide a cover for covert operatives in Asia, he suggested Rewald; and headquarters approved the choice on November 6, 1978.
A phony company was established in Rewald's office, with telex and telephone. The CIA paid the bill. Messages could be passed back and forth, and whenever someone called to check on an agent's bona fides, Rewald and his staff would give a positive response.
Then in May 1979, Rewald got involved with the foreign resources section of the CIA, whose job is to recruit foreign nationals visiting the United States to spy on their own countries for the CIA when they go home. Charles Richardson, chief of the foreign resources section in the western United States, asked the CIA for a substantial international company to serve as cover employer for his attempts to persuade foreign nationals. Kindschi was asked for a suggestion, and volunteered Rewald. This time, instead of a phony company, the cover was to be CMI, the actual Rewald investment concern, which became Bishop, Baldwin.
This was a still more sensitive assignment, and the CIA dispatched John H. Mason, a twenty-five-year veteran formerly in the clandestine services, now assigned to headquarters, to check Rewald and his company out. Kindschi forwarded a glowing report, falsely asserting such nonsense as that "Former clients have ranged from Elvis Presley to professional athletes and millionaires."
A new security check was done. This time, the FBI evidently wasn't too busy to cooperate, and the franchise violation was discovered (though apparently not the theft or bankruptcy cases). Moreover, Rewald told Mason and other CIA officials that he had worked for the CIA as a student spy. In fact, he said that so much bad publicity had come upon him when the student spying operation was exposed that he wanted the CIA to forgo the usual questioning of his former neighbors while doing this new check. And the CIA men testified that they agreed!
Deputy Director Lawrence testified that CIA files were checked and showed that Rewald hadn't as he said, spied for the agency as a student. Despite that discrepancy, despite the criminal record, and despite such easily checkable lies on Rewald's resume as that he graduated from Marquette University and played football for the Cleveland Browns (neither of which was remotely true), the CIA renewed his secret clearance and okayed him for the new, more sensitive work.
As for CMI, the only checking that the officials of the free world's greatest spy agency said they did was to order a Dun & Bradstreet report. They relied on it, even though veteran agent Mason agreed that a typical D & B report "only reflects what the individual company submits to D & B."
Testified Deputy Director Lawrence, "We had to weigh what we had against the need for Mr. Rewald." The work, he testified, was "very important." Agent Mason had argued that the cover was "needed badly."
So much for the contention that the CIA would not have needed Nugan Hand because larger companies were available! Nugan Hand may not have been Chase Manhattan, but it was big enough to dwarf Rewald's operation. And yet Rewald's Hawaiian company had been "needed badly."
Mason introduced Rewald to secret agent Richardson, who was using the alias Richard Cavanaugh. Rewald evidently met other covert operatives, but Kindschi, not having a need to know, testified that he didn't get further involved with that.
While covering for agents and taking in millions from duped investors, Rewald was hardly living in the obscurity that people like Royal Commissioner Stewart say they expect of the CIA. Rewald spent about $400,000 a month to keep lavish offices around the world and a high-salaried staff of prominent Hawaiians, including lawyers and CPAs. He spent $250,000 a month to please himself and his family.
He owned a fleet of twelve limousines and other luxury cars worth up to $50,000 each (an Excalibur, a Jaguar, two Mercedes, a Rolls, a Continental, and three Cadillacs, among others), and he hired chauffeurs not just for himself but also to take his five children to baseball practice, or to lessons with their $9,000-a-month private tutors.
He owned ranches, and polo clubs, and an oceanfront villa with its own lagoon and gardens. He displayed fine art and antiques, threw eye-popping parties, and surrounded himself with gorgeous women, some of whom were supplied with their own Mercedeses.
His CIA contacts didn't seem to be dummies. Welch had joined the CIA in 1952, and spent a career procuring and managing overseas safe-houses and running several domestic intelligence collection offices. Kindschi had been a State Department foreign service officer in Moscow and Cairo, then entered the CIA's clandestine services branch in 1957, and stayed there until he got the Honolulu job for his last two years before retirement. (He also testified that he was forced out of the clandestine services in part because CIA turncoat Philip Agee exposed him as a CIA man.)
When retirement came, in 1980, Kindschi became a $60-an-hour consultant for Bishop, Baldwin, with an office in the firm's luxury suite and plenty of expense-account travel. Eventually he began receiving a $4,000-a-month salary on top of the consultant's fees. He brought an old friend from his CIA days in Stockholm onto the staff as a business consultant, too.
Kindschi's replacement as head of the Hawaii CIA office, Jack W. Rardin, went into the CIA immediately upon graduation from the prestigious Georgetown University School of Foreign Service in 1950. He worked first in foreign broadcast operations, then in the domestic collection division. From the time he arrived in Hawaii, he was frequently seen in the swank Bishop, Baldwin office, conferring with Rewald.
Among other matters, they discussed the influential millionaire businessmen Rewald was soliciting investments from in Indonesia, the Philippines, and elsewhere— men Rewald would also milk for political gossip. They also discussed the arms deals Rewald was trying to finance in India and Taiwan, apparently without success.
On official reports, Rardin rated Rewald "from good to excellent" as a source, and on what he acknowledged was "a number of occasions" he called Rewald's information "excellent." For example, about the time of the British-Argentine war over the Falklands in 1982, Rewald visited Argentina armed with a list of CIA questions. Under the guise of Bishop, Baldwin business, he queried Argentine bankers about their financial plans.
Rewald also reported to a CIA man identified in court only as "John Doe 5" at a "Far East location." More than a dozen CIA "John Does" were involved in the Rewald trial.
As time passed, several other Bishop, Baldwin staffers were referred for security clearances to the "secret" level. Some of them, it turned out, already had it. Rardin testified that when he applied for clearance for Captain Edwin Davis Avary, retired chief pilot of Pan American World Airways, and now a Bishop, Baldwin consultant, he was told that Avary was already in a relationship with the agency. Avary* gives a sly no-comment on whether he did CIA work at Pan Am. But he says he and others wrote "damned good reports" for the CIA while on trips for Bishop, Baldwin. (He cites an analysis he did of German election prospects.) He also worked on the Taiwanese arms deal.
*Interview with the author.
Sue Wilson, Rewald's blond executive assistant (with check-writing authority), had—after being a semifinalist in the Miss Teenage America pageant—served nine years with the National Security Agency (the CIA's high-technology twin) in Washington and Honolulu before joining Bishop, Baldwin. Her resume shows she handled highly sensitive cryptoanalysis, missile trajectory data, and space data.
One lawyer on the Bishop, Baldwin staff, Lieutenant Clarence Gunderson, was a reserve air force intelligence officer. On the investment firm's collapse, he was quickly back in uniform, giving intelligence briefings to the commander-in-chief of the air force's Pacific Command, and dealing in highly classified Soviet data.*
*Author interviews with Gunderson and others in Hawaii.
One commander Gunderson briefed was three-star General Arnold Braswell, who was widely identified as among Rewald's circle of allies. Braswell acknowledges** he was weighing going to work for Bishop, Baldwin when he retired from the air force. He filed a six-figure claim in bankruptcy court for loss of his savings, which he said he had invested with the firm.
**Interview with the author.
A prior air force Pacific Commander, four-star General Hunter Harris, the highest ranking officer in Hawaii, was close to Rewald and frequently in his office. Through Harris, Rewald met an aide of Lieutenant Colonel James ("Bo") Gritz, who was raising money with Pentagon help for a secret expedition into Laos to look for U.S. prisoners of war Gritz believed were still being held there; the mission was highly publicized after it failed.
General Harris and the Gritz aide say Rewald merely donated $2,000 of Bishop, Baldwin money to the cause. Rewald told investors and potential investors that he was financing the Gritz mission, and they were impressed when they read about the mission in the newspapers months after Rewald had confided to them that it was going to occur.
Clients who lost fortunes in the Bishop, Baldwin fraud say Rewald would call them aside privately, either in his office or at his lavish parties at the private polo club he bought, and would point out the high government officials around. He would single out CIA and FBI personnel for particular attention. He would note that Bishop, Baldwin was part of the CIA, though cautioning the clients never to repeat it.
The CIA connection proved their money was safe, he assured them. "If you can't trust the government, who can you trust?" they recall him saying.
His parties were attended not only by federal officials, but by Governor and Mrs. George Ariyoshi and other Hawaiian dignitaries. The office of then Lieutenant Governor, now Governor John Waihee, has acknowledged that Waihee received a $10,000 canceled check to him that Rewald has shown around. (The governor's staff says the check was a down payment on a business transaction that was never completed, and that the money was returned to Rewald.)
Were all these officials and service leaders suckered in by Rewald's fraud? As with Nugan Hand, that explanation requires one to believe that people who are supposed to be experts in intelligence, who are charged with protecting the United States from the deceptive practices of the Kremlin, are pretty easily led.
For example, while operating for three years directly in the eye of CIA officials, Rewald advertised that Bishop, Baldwin's deposits were protected by the Federal Deposit Insurance Corporation for up to $150,000 for each depositor. The FDIC, of course, insures only banks, not private investment firms like Bishop, Baldwin, and its limit was $100,000 for each depositor, as any bank advertisement would have revealed.
Kindschi recalled at the trial that he had asked Rewald about this, and was told, "Well, we have a special relationship with the banks to increase it to $150,000." Kindschi acknowledged that after that, he had reassured Bishop, Baldwin clients who asked about the FDIC limit. Kindschi testified that he didn't question Rewald further because "I trusted him."
This was the same fearless and resourceful covert operative who also told the jury, "When you serve overseas under deep cover, you do not have the full force of the United States behind you. . . . You are on your own. So if things had gone a-cropper in places where I served, I would have been left to get out of that situation with my own wits, and I understood that."
Kindschi, employing those wits at Bishop, Baldwin for $60 an hour, eventually helped prepare brochures containing some of the more outrageous Rewald lies. Though the CIA men knew Rewald had just come to Hawaii in 1978, Kindschi acknowledged that he "edited" a brochure calling Bishop, Baldwin "one of the oldest and largest privately held international investment and consulting firms in Hawaii. . . . Over the last two decades we have served the investment and consulting community with an average return to our clients of 26% a year."
Merely the name of the firm was a gross deception. Bishop, Baldwin, and Dillingham are old-line aristocratic names in Hawaii, as almost everyone there knew. It was as if someone had started a firm in New York City with the name "Rockefeller, Vanderbilt, Rewald, Roosevelt & Mellon."
Kindschi testified that he believed Rewald's explanation that somehow Bishop, Baldwin "came directly from the bowels of the old Bishop Investment Company."
Asked why he wrote, "The brick and mortar foundation of Bishop, Baldwin, Rewald, Dillingham & Wong has been deeply rooted in Hawaii for more than four decades," he testified, "It could have been just a typographical error."
He wrote—or "edited"—that the company's clients had an average worth of $4 million, and that 90 percent of those who tried to invest with the firm were turned down. (Rewald made it seem a personal favor to people, done out of friendship, to take their mere five-figure investments.) Bishop, Baldwin "has served the last four national administrations as White House consultants on subjects ranging from small business matters to the complex international relations of Asia," the brochure Kindschi edited said.
He told the jury he simply accepted Rewald's word for all this. He also testified that he was aware by 1979 that Rewald had a court record in Wisconsin for franchise violations. And he acknowledged that the brochures he helped prepare showed CIA agent Richardson as a Bishop, Baldwin consultant.
Bishop, Baldwin also advertised widely that its investment accounts "have been available since Territorial days," and that the firm worked for committees of both houses of Congress and "a former president of the United States," all of which was nonsense.
Bishop, Baldwin offered two financial statements with figures differing by one decimal place, apparently geared to differing levels of gullibility. One statement, for example, put accounts receivable at $187.9 million and total assets at $1.42 billion, while another put accounts receivable at $18.7 million and total assets at $142 million. (There hasn't been any evidence that Kindschi helped prepare the financial statements.)
Neither statement had a standard auditor's certification letter; one statement said "audited by Price-Waterhouse" under the figures, and the other just said "audited by a 'Big Eight' accounting firm." Apparently neither Price Waterhouse nor anyone else audited Bishop, Baldwin. The bankruptcy trustee said its checkbook was never even balanced.
Rewald says the CIA ordered the phony statements and approved them; he did produce documentary evidence that the CIA concocted a phony financial statement for the phony company that was set up in Rewald's office to serve as a cover for CIA operatives in the Far East. But the CIA men who testified all denied telling Rewald to do anything fraudulent in connection with Bishop, Baldwin.
Rewald told investors and his adulators in the local press that the company had two dozen offices with multimillion-dollar investments scattered around the world. Captain Avery, who prepared reports for the CIA while on Bishop, Baldwin's staff at $4,000 a month, says he helped establish "mail-drop" offices for Bishop, Baldwin in various cities by hiring an executive "front" firm to collect mail or telephone calls at a prestigious address. CIA documents produced in court show that unspecified Bishop, Baldwin offices overseas were in contact with CIA stations there.
Surely the case of Rewald is enough to disprove the Stewart commission's contention that someone who had real CIA connections would never advertise them. Rewald was the least secret agent imaginable. He cultivated his reputation for being wired into the agency. He acquired title to his first Honolulu home from former Cambodian Prime Minister Lon Nol, and spread the word that the house was really a CIA-owned "safe house." When he moved to his oceanfront villa, he deeded the supposed "safe house" over to Russell Kim, a Bishop, Baldwin consultant from Korea, whom Rewald says is a Korean intelligence agent, and who did receive a security clearance from the CIA up to the "secret" level.
A typical victim, Nella Van Asperen, says her impression that Rewald was an important CIA figure led her and her parents to invest—and lose—$400,000 in the firm, mostly her parents' retirement money. Mrs. Van Asperen—a commercial artist and another gorgeous blonde—had been approached by Rewald to design advertisements for a sporting goods chain he was starting in Honolulu.
Right after the Soviet invasion of Afghanistan, she was introduced to a traveling Afghan jeweler who was desperate to extend his thirty-day visa to the United States so he wouldn't have to return home. Says Mrs. Van Asperen, "Ron had told me he was with the CIA, and I thought if anybody can help he could." Rewald arranged a meeting for the Afghan with "the CIA," under conditions worthy of a Graham Greene spy novel.
"You will walk down this block, you will turn here, you will wait at this place," Mrs. Van Asperen says he told her. She and the Afghan wound up at an outdoor cafe with Rewald and two strange men. The Afghan, now working in San Diego, says he was asked a lot of questions about his father, an army general, and about the use of chemical weapons and Chinese arms. Then, he says, a "Mr. Anderson" gave him a business card and told him to take it to the U.S. immigration office, where he would be given political asylum. He says the immigration office seemed to recognize the card and gave him a long-term visa, and that he never heard from "Mr. Anderson" again.
"It's hard for me to believe someone would set all this up as a charade," says Mrs. Van Asperen. She saw Rewald all too often after that, as he persuaded her and her father to deposit their cash. Often she and Rewald had lunch, but she says he always excused himself in time to return for what he said was his daily 3:30 P.M. briefing from the CIA. Once, she says, he even invited her to join the CIA, but he later advised her not to because of "the danger." (He did sign up two men, however, administering secrecy oaths to them; the CIA officials who testified at his trial said the oaths and ceremonies were worthless.)
More tragic was the case of Mary Lou McKenna, a blonde former Playboy model who had just moved to Hawaii because of devastating medical problems. Living in Los Angeles, divorced and raising three children, she had undergone cancer surgery. Then her back was broken in two places in a car accident, leading to spinal fusion operations that were only partially successful, and left her hampered in movement and requiring long-term therapy. Finally, she contracted a rare, life-threatening lung disease that required her to live in a warm, non-smoggy climate.
With about $150,000 put together from savings and from the jury award in her accident case, she moved her family to Hawaii, and happened to land in the same apartment building where Jacqueline Vos lived. Vos, a Farrah Fawcett look-alike, was keeping books for Rewald.* Soon, McKenna was being invited to polo parties where Vos and Rewald introduced her to General Harris and Governor Ariyoshi, and pointed out "all these men in dark-looking suits" as being CIA and FBI agents.
*She says she believed what he said as everyone else did, and she hasn't been charged with a crime.
Soon, Rewald had Mary Lou McKenna's nest egg. On advice from his legal staff, she sold some property in California, so this, too, could be invested in Bishop, Baldwin. When the firm collapsed, she was forced to move out of her Honolulu apartment, sell her furniture, stop the physical therapy, and take a store clerk's job that caused her severe back pain. She was visibly aching and despondent.
There were scores of other cases.
In 1982, the Internal Revenue Service smelled something fishy and started a criminal investigation of Rewald and his company.
When Rewald was asked to produce records, Rardin, with Kindschi's help, had the CIA intervene with the IRS to hold up the audit. Rewald told Rardin he had received not only business expense money from the CIA, but also funds for passing to various people around the globe.
Two officers from CIA headquarters in Langley, Virginia, visited Hawaii in January 1983. In front of them, Rewald changed his story, saying that the only money he had received was for business expenses. The flip-flop didn't bother Rardin. The CIA gave Rewald phony cover stories to tell both the IRS and his accountant about the source of the money. Asked at the trial why Rewald's status continued unchanged, Rardin simply testified, "At the time, we trusted Mr. Rewald's integrity."
The CIA says its hold-up of the IRS criminal investigation was merely temporary, to allow time to create a cover story for the small amounts of expense money it gave him. But the fact is that ten months after the IRS had moved to investigate, the investigation was still frozen, and Rewald was still stealing.
At that point, in late July 1983, a local consumer protection agency, troubled by Rewald's FDIC claims, subpoenaed his books and records. Moreover, it leaked its suspicions—along with its discovery of Rewald's bankruptcy record in Wisconsin—to a local TV news reporter. The reporter confronted a Rewald aide with a camera crew and played the embarrassing interview on the air.
That day, Kindschi withdrew $170,000 of what he said was $291,000 that he and his mother had on deposit at Bishop, Baldwin. (The bankruptcy court later forced him to return it. He filed a claim for the money, but the court-appointed trustee filed a counterclaim against him. The trustee argued that almost all the money that Kindschi claimed was still on deposit represented fictitious interest and dividends that Rewald had credited to the Kindschis' accounts, or else was money that Kindschi had in effect already reclaimed through the high fees and salary he was collecting. The case is still pending.)
For his part, Rewald, after hearing about the TV interview, quickly emptied out Bishop, Baldwin's bank account with a $200,000 check to his lawyer, apparently as a defense fund, and sent his wife and children back to Wisconsin. His security guards began removing files from the Bishop, Baldwin office.
Rewald checked into a large Waikiki hotel. The next afternoon, the hotel's assistant manager, making her routine rounds of rooms whose occupants were due to check out but hadn't, found Rewald amidst a lot of blood. His wrists and forearms had been slit by a razor found nearby. Police took him to a hospital, where doctors described the wounds as "superficial" and said no vascular or nerve damage had been done.
He had reacted like a gutless Frank Nugan. He may well have known about Nugan. Remarkably, police later said they never checked to see if the blood found in the room had come from Rewald's body or had been brought there.
As the huge scandal dominated the Hawaiian press, efforts were made to cover up all traces of the CIA. Rardin denied to the police that he even knew Rewald. A federal judge put blanket restrictions on visitors to Rewald in prison, where he was held on an astronomical $10 million bail. The judge issued gag orders barring Rewald's lawyers from repeating what he told them. Case records, normally public information in a criminal matter, were sealed from public view, and Rewald was ordered not to talk about the CIA. The CIA won't comment on whether it disciplined any of its agents.
Most remarkably, the U.S. Attorney in Hawaii, Daniel Bent, turned this, his biggest case, over to a brand new lawyer on his staff, John Peyton. Peyton had come to work at the office just days after Rewald slashed his wrists. Peyton's grand jury investigation of the Rewald case was distinguished by its careful avoidance of any reference to the CIA; Rardin, for example, was identified to the grand jury as just a federal civil servant.
Once you learn Peyton's background, however, none of this seems so strange. From 1976 to early 1981, it turns out, Peyton had been chief of the litigation section of the CIA. After that, he had worked on the government's narcotics task force in Florida, which intelligence community sources say was heavily laced with CIA personnel. Suddenly, then, Peyton decided to seek work as an assistant prosecutor in Hawaii.
Peyton insists that it was just "pure, utter coincidence" that he wound up on the Rewald case.* The U.S. Government's explanation for both the Bishop, Baldwin and Nugan Hand cases, to the extent it has provided one at all, seems to rely in large part on an almost mystical faith in the power of "pure, utter coincidence."
*Interview with the author.
Late in 1986, American citizens got still better evidence of the damage wrought by their government's foreign policy of perpetual covert war. For the second time in eight years, Iran humiliated the United States and crippled a president.
We had given Iranians every reason to want to do that. Back in 1953, at the behest of an oil monopoly, and blinded by a foreign policy that mistakes other countries' independence for communism, the United States overthrew the only even semi democratically elected government in Iranian history. In its place, we installed a brutal and unpopular dictatorship. That all this was done covertly merely kept the American electorate from finding out about it; the Iranians knew damn well that the U.S. was behind the restoration and maintenance of the Shah.
Among those American officials who did the most to help the Shah preserve his regime of repression and torture was General Richard Secord, who headed the U.S. military assistance program there while palling around with the likes of Bernie Houghton and Edwin Wilson. There was a certain delicious irony in the fact that it was Secord who organized and went along on the arms-running mission with national security advisor Bud McFarlane that the Iranians used to entrap President Reagan. But as an American, it's hard to get much satisfaction from it.
From the day he took office President Reagan had preached about the need to isolate "terrorist states," and specifically identified Iran as one of them. We must, he repeated at every opportunity, refuse even to bargain with hostage-takers, let alone pay ransom to them. Then, it turns out, he arms them. And with the arrival of the Secord McFarlane arms shipment, an Iranian-influenced group in Lebanon releases one American hostage while holding on to a half-dozen others. And soon seizes more.
At first the president denied the arms shipments were ransom for hostages. Then he rather acknowledged they could be fairly interpreted that way.
At first he insisted that only a few "spare parts" were involved. Then he acknowledged that we shipped Iran planeloads of "defensive" antiaircraft missiles (which could just as well attack a 747) and antitank missiles (which could just as well attack an American official's bulletproof limousine).
For purposes of deception—not of the Soviets, but of Congress and the American public—the income from these sales and other money was channeled through numbered Swiss bank accounts. Among those deceived, inadvertently, were two of the plotters, Colonel Oliver North and Assistant Secretary of State Elliott Abrams, who lost $10 million by getting the account numbers wrong.
And who was put in charge of the secret Swiss accounts? Why, General Richard Secord, who two years earlier had resigned from the Pentagon under a cloud for his involvement with Edwin Wilson in what former CIA officer Thomas Clines admitted in federal court was a fraud against the U.S. Government; Clines paid, on behalf of his company, more than $3 million in fines and penalties for the fraud. And who did Secord hire as his chief aide in the Iran-Contra mission? Why, Thomas Clines, of course—the same Thomas Clines who, in the wake of the Nugan Hand collapse, jetted to Australia and accompanied Bernie Houghton on his flight from the country so he could hide out until the heat was off.
By his own testimony before Congress, Secord (or the company he owned 50-50 with his partner Hakim) collected $30 million from Iran for weapons he simultaneously bought from the U.S. Treasury for $12 million. Of the difference, he testified, only $3.5 million went to help the Contras (some of whom complained they hadn't received a dime). Secord testified that the Contras were desperately short of funds and that Colonel North was scrounging for donations for them; yet he testified that $8 million from the arms sales remained unspent in the Swiss account he controlled (not to mention the $10 million from the Sultan of Brunei that was lost in transit). Why wasn't the $8 million sent to the Contras if Secord and his partner didn't intend to keep it? The question didn't come up.
Of even more concern to common decency was the hiring of assassination experts like Chi-Chi Quintero and Luis Posada from Clines's old anti-Cuban campaigns to work in the supply program in Central America. Posada, a CIA operative, had been in jail in Venezuela for blowing up a Cuban civilian airliner in mid-flight over Barbados, killing seventy-three persons. (Venezuelan justice had not seen fit to bring him to trial in nine years, but the evidence against him, including tape-recorded telephone conversations, was substantial.) Though the CIA disclaimed responsibility for that terrorist act, when Posada escaped his Venezuelan jail (apparently through bribery, not derring-do), the CIA, or the Secord-Clines network it set in place, hired him back to help kill Nicaraguans.
Meanwhile, evidence was building that the Contra program was supported not just by arms shipments to Iran, but also by dope trafficking. In October 1986, a Contra supply plane crashed in Nicaragua killing most of its crew and leaving one a prisoner in Managua. Reporters found all sorts of links between the plane and the CIA, from its registration to the phone numbers found in the cockpit. They also discovered that it was the same plane that convicted dope dealer Barry Seal had used to fly cocaine in while he was working as part of a federal "sting" operation. Witnesses then placed Seal in the Contra supply program while he was earning a self-declared $50 million running cocaine into the U.S.
Other witnesses reported seeing cocaine stored at a south Florida house where Contra arms were warehoused before being shipped out. One woman reported seeing cocaine being loaded in Colombia onto a Contra supply plane that had dropped off weapons in Central America and was headed back to the U.S. Gerardo Duran, a pilot who ferried arms and personnel around for many Contra groups, was named by Costa Rican and American authorities as a cocaine trafficker. (He wasn't charged in court.)
Costa Rican-based Contras were also involved in a 400-pound cocaine seizure in San Francisco in 1983. Two Nicaraguan natives convicted in the case, Carlo Cabezas and Julio Zavala, who are brothers-in-law, later claimed that at least $500,000 of their drug profits was sent to Contras in Costa Rica. Some $36,000 found by federal agents in Zavala's house—along with cocaine, a military rifle, and a grenade—was seized as drug profits. But amazingly, the money was returned to Zavala by the Justice Department on certification by a Contra group in Costa Rica that the money belonged to it. (And the person whose signature was on the certification later claimed it was forged.)
The most clear-cut case of all involved a Costa Rica-based Contra group that struck a deal with George Morales, a multimillionaire Colombian-born cocaine kingpin living in Miami, right after Morales was indicted on multiple federal drug charges in 1984. According to both Morales and members of the Contra group, the Contras promised to use their CIA connections to take care of Morales's case if he helped them out.
Federal Aviation Administration and other aviation records confirm that Morales provided the Contras at least two aircraft, one of them costing $264,000 and the other of undetermined value, as well as trained pilots (including Duran). There is some corroboration for his statements that he also provided large amounts of cash, both his own drug money and contributions he solicited in the Miami Cuban community.
Aircraft maintenance receipts show that while Morales awaited trial, and while he continued to bring large amounts of cocaine into the U.S. (according to federal charges he was later convicted on), an airplane he gave to the Contras regularly refueled at Ilopango Air Force base in El Salvador. The receipts show that the fuel was supplied by the Salvadoran Air Force, though the base is under joint American-Salvadoran security. Ilopango has been a main transshipment point for arms going from the U.S. to the Contra bases in southern Honduras and northern Costa Rica.
In the spring of 1987, a variety of House and Senate committees plunged hastily and at first, at least, ineptly into investigations that might answer some questions about the Contra operations. Somewhere in the files of one such panel, the Senate Intelligence Committee, however, there is probably still a list of other unanswered questions. The author of this book provided the list at the committee's request after a series of articles he wrote about Nugan Hand appeared in the Wall Street Journal in 1982.
Robert Simmons, then chief counsel to the committee, praised the list as "extremely valuable" and said it formed the basis for closed-door testimony the committee took from CIA director William Casey and others. "Unfortunately," Simmons explained, "the answers can never be made known to you." They were all secret.
An edited set of the questions is appended on the pages following. Some original questions, whose answers have since been tracked down independently and are published in this book, are deleted from the list.
What was the nature and duration of the relationship?
2. What were the dates of Michael Hand's employment by any U.S. intelligence agency, whether on a permanent or contract or other ad hoc assignment, and what was his work?
3. Did the CIA ever have a relationship with Frank Nugan?
What was the nature and duration of the relationship?
4. Admiral Yates has said that Dale Holmgren, while an officer of Nugan Hand and officially retired from the intelligence service, continued to work actively to develop "a close relationship with the U.S. military forces and the business and government community" on Taiwan.
What was the exact nature of Holmgren's relationship with the U.S. military or intelligence community, or the U.S. Government at all, while he worked for Nugan Hand?
5. How and when did Bernie Houghton meet Admiral Yates? What was the nature and duration of their relationship?
Did Houghton, as Sir Paul Strasser has said, have letters of recommendation from Admiral Yates and other high-ranking U.S. military officers when he arrived in Australia in 1967?
If so, how did this come about?
6. Colonel Allan Parks, U.S. Air Force (ret.), has said that while serving undercover for U.S. intelligence as an official of the U.S. embassy in Vientiane, Laos, in the 1960s, he became aware that Bernie Houghton was generally known by U.S. intelligence to be transporting contraband such as drugs and gambling devices around Southeast Asia, along with surplus military equipment and other goods.
Talks with numerous persons make clear that Houghton had such a reputation. Colonel Parks has said that Houghton's movements were frequently recorded on cable traffic he saw at the embassy, and that General Aderholt was also aware of it. What did the U.S. intelligence agencies do with their information and records on Houghton?
Did the United States ever attempt to stop his trafficking in contraband? If so, how? If not, why not?
Did the United States make its knowledge of Houghton's trafficking in contraband available to Yates and others who met with him while on active duty, and who later went to work for Nugan Hand?
7. It seems inevitable that U.S. intelligence would have developed further information on Houghton during the years when he was the primary caterer to the social needs of U.S. servicemen on R & R in Sydney. There is abundant evidence that he was well known to various U.S. political, military, and intelligence officials. This period overlapped several years when Houghton was a critical factor in the operation of Nugan Hand, though not yet an officer of it. Were any records kept of his relationships with U.S. officials?
If so, what do they reflect, and what use has been made of them? If not, considering his friendships with so many important people— including at least two CIA station chiefs, Milt Wonus and John Walker—why not?
8. What was the nature and duration of the CIA's relationship with Kermit L. ("Bud") King (former Air America pilot)? Does any U.S. Government agency have a file on King's mysterious death during his business association with Michael Hand?
If so, does it—or any other intelligence file—reveal participation by Hand in any illegal activities, including but not limited to bringing drugs out of Asia?
What use was made of this information?
Were U.S. military and intelligence officers who dealt with Hand before and after their retirement informed of this?
9. Does any U.S. intelligence or law enforcement agency have a record of any drug transactions that Hand or Houghton carried on with people from the Asian mainland, including, but not limited to, Khun Sa, the military leader from the Shan States of Burma?
Were U.S. military and intelligence officers who dealt with Hand before and after their retirement informed of this?
10. When did U.S. intelligence agencies first become aware that Nugan Hand was soliciting large deposits in violation of the foreign exchange control laws of many countries?
That it was moving money for illegal drug dealers?
That it was soliciting deposits from U.S. citizens in Saudi Arabia and elsewhere?
That it was soliciting deposits from U.S. servicemen, including on U.S. military bases?
What use was made of this knowledge?
11. Why was Michael Hand allowed to keep his U.S. passport after he accepted Australian citizenship?
12. Why were the Australian visa problems of Bernie Houghton, a U.S. citizen, in February 1972, solved by the intervention of a top official (Leo Carter) of the Australian Security Intelligence Organization?
What do U.S. intelligence agencies know of any relationship that Houghton, or any other Nugan Hand figure, had with ASIO?
When and how did U.S. intelligence agencies become aware of this?
13. Has any oversight authority examined records of cable traffic that Christopher Boyce might have seen while working for TRW Corp., to see if the facts might justify his charges that the cable traffic indicated U.S. involvement in Australian political and labor affairs?
What records were located, who examined them, and what were the findings?
Do records of any cable traffic or other records from any U.S. intelligence organization provide evidence to support charges, made by Boyce, by several officials of the Australian Labor Party, and by others, that the U.S. involved itself in Australian domestic political or labor activities, or provided covert impetus for the removal of Prime Minister Gough Whitlam from office in 1975?
14. Did any U.S. intelligence agency ever have a relationship with, or arrange for money to be paid to or on behalf of, former Australian Governor General John Kerr?
If so, please provide details. Did any representative of the U.S. Government communicate, directly or indirectly, with Kerr in the week prior to his dismissal of Gough Whitlam?
What was the nature of the communication?
15. People who knew Bernie Houghton well in Australia say that he was given access to U.S. military transport at Richmond Air Base there. Is this true?
Why did it happen?
16. Was there any official relationship, on a contract basis or otherwise, between Houghton and the former Australian CIA station chiefs Walker and Wonus?
17. After Hand's tour of duty in Laos with the CIA, did he at any time return to the U.S. for further training or briefing by any U.S. intelligence agency?
Did Houghton ever get such training or briefing?
18. During Hand's time in southern Africa or Rhodesia, and during his time in Panama, did he have any contact with, or relationship with, anyone in any U.S. intelligence agency?
19. Did any employe or contract agent of any U.S. intelligence agency ever use the Nugan Hand organization to finance or otherwise arrange arms deals in southern Africa or elsewhere?
20. Did any employe or contract agent of a U.S. intelligence agency ever use Joe Judge to finance or arrange arms deals?
21. Did any U.S. intelligence agency ever use Nugan Hand to make payments to any individual or company for any purpose?
22. Was there any relationship between Patry Loomis and any person associated with Nugan Hand prior to Loomis's retirement from the CIA? Or after?
Is there truth to a report in Foreign Policy magazine (winter 1982-83) that Loomis, perhaps using another name, was a director of a company in the Nugan Hand group?
23. What was the nature and duration of any relationship between Hand or Houghton and Theodore Shackley before Shackley left the CIA? What do U.S. intelligence agencies know of their relationships with Shackley after he retired from the CIA?
24. When and how did any U.S. intelligence agency become aware of a relationship between Thomas Clines and anyone associated with Nugan Hand, particularly Houghton?
What is known about the nature and duration of the relationship? Did it exist before Clines left the CIA?
Did Clines have any relationship with any U.S. intelligence agency after his announced retirement from the CIA?
When and how did any U.S. intelligence agency become aware that Clines went to Australia shortly after Nugan Hand failed, and left Australia with Houghton?
Has anyone looked for records of cable traffic between Clines and anyone involved in Nugan Hand? (Australian authorities say there was cable traffic between Clines and Hand while Clines was still with CIA.) Were any records found? Do any exist? What do they disclose?
25. When and how did any U.S. intelligence agency become aware of a relationship between Ricardo Chavez and anyone associated with Nugan Hand, particularly Houghton?
What is known about the nature and duration of the relationship? Did it exist while Chavez was still a contract agent for the CIA?
Did Chavez have any relationship with any U.S. intelligence agency after his service as a CIA contract agent?
26. When and how did any U.S. intelligence agency become aware that Chavez was planning to work with Nugan Hand?
What is known about their relationship?
27. Was any instruction given by any employe of any U.S. intelligence agency to any Australian, or to any Australian security agency, about Hand, Houghton, or Nugan Hand in general?
28. How and when did any U.S. intelligence agency first learn the identity of the mysterious "Charlie" who entered Australia and helped Michael Hand leave under a phony identity?
29. Has any U.S. intelligence agency been in contact with Hand since he left Australia in June 1980? When, how, and what happened?
30. When was the last contact that a U.S. intelligence agency had with Houghton? How did it occur, and what happened?
31. Did Naval Task Force 157 ever have representatives in Australia? Who were they and what did they do? Was Edwin Wilson ever one of them?
32. When and how did any U.S. intelligence agency become aware that Wilson and Houghton were meeting? What does U.S. intelligence know about the purpose and content of the meetings?
33. Did U.S. intelligence attempt to warn anyone working for Nugan Hand or any customers of Nugan Hand concerning what it knew about the people involved? Who was warned, and what was the nature and content of the warnings?
34. If any relationship between Houghton and U.S. intelligence or military agencies is denied, what could account for the frequent visits of important U.S. officials to such a seedy spot as the Bourbon and Beefsteak Bar?
35. Why were the FBI's files on Nugan Hand withheld from disclosure, even to Australian law enforcement authorities, on the ground that they would endanger U.S. "national defense or foreign policy"? How would our national defense or foreign policy be endangered by the release of these documents to anyone, particularly to many properly constituted authorities assigned to investigate and prosecute Nugan Hand's violations of Australian law, specifically: the National Police, the joint state federal police task force, the Corporate Affairs Commission inquiry under Geoffrey Nicholson, the New South Wales Attorney General's office, and the official liquidator, John O'Brien?
36. Why did FBI agent John Grant refuse to look at evidence of possible violation of U.S. law that John O'Brien, the official Australian liquidator for Nugan Hand, tried to show him?
37. To whom, and at what Australian government agency, does the FBI say it disclosed all its information on Nugan Hand? Why would it not do so to other authorized Australian law enforcement agencies with whom the FBI normally does exchange information on criminal matters?
38. When and how did U.S. intelligence or law enforcement agencies become aware of Nugan Hand's activities in the drug center of Chiang Mai, Thailand? What is known about these activities? Since there is abundant evidence that this activity involved criminal violations, at the very least of the law of Thailand, why has the information not been disclosed? Why did Richard Virden, information officer with the International Communications Agency, intervene to block Drug Enforcement Agency officers in Chiang Mai who were seeking to exchange information about Nugan Hand with a reporter? What information could they have disclosed if Virden had not intervened?
39. When and how did any U.S. intelligence agency become aware that Frank Nugan's telephone calls were being electronically intercepted? What is known about this? Does any U.S. intelligence agency know the contents of any intercepted conversations? Has any inquired?
40. Does any U.S. intelligence agency know any reason why John Owen, a former career British Navy officer working for Nugan Hand in Thailand, would prepare long, detailed reports of military capabilities and troop movements of the various armed factions in Southeast Asia, particularly Cambodia? Has U.S. intelligence ever obtained information from these reports? How?
41. Did any U.S. intelligence service ever receive information from any officer, director, employe, or agent of Nugan Hand on any subject?
42. Has U.S. intelligence had any dealings involving Prince Panya Souvanna Phouma? Has Nugan Hand played a part in any such dealings? Have any U.S. intelligence dealings with Prince Panya involved arms sales, or the possible operation of an air freight service, or a cloud-seeding service?
43. Has any U.S. intelligence agency ever had any dealings with Neil Evans, the Australian who represented Nugan Hand in Chiang Mai? What was the nature and duration of these dealings?
44. Has any U.S. intelligence agency ever had any dealings with Donald Beazley? What was the nature and duration of these dealings?
45. Has any U.S. intelligence agency ever had any dealings with George Shaw, or with relatives of his in Lebanon? What was the nature and duration of these dealings?
46. How did so many employes of Air America and Continental Air Service become shareholders of Australian and Pacific Holdings Ltd., the company Nugan and Hand founded before launching the Nugan Hand group? Did any U.S. Government agency facilitate these investments?
47. Has any U.S. intelligence agency ever had any dealings with Clive ("Les") Collings, Nugan Hand's Hong Kong representative? What was the nature and duration of these dealings?
48. Has any U.S. intelligence agency ever had any dealings with Wilfred Gregory, Nugan Hand's Philippine representative? What was the nature and duration of these dealings?
49. Has any U.S. intelligence agency ever had any dealings with John Needham, a co-founder of Nugan Hand? What was the nature and duration of these dealings?
50. Has any U.S. intelligence agency ever had any dealings with George Farris, a Nugan Hand Washington representative? What was the nature and duration of these dealings?
51. Has any U.S. intelligence agency ever had any dealings with the Wing-On Bank, Nugan Hand's Hong Kong bankers? What was the nature and duration of these dealings?
52. Has any U.S. intelligence agency ever had any dealings with the Inter-Alpha group of banking companies, which handled international accounts for Nugan Hand? What was the nature and duration of these dealings?
53. Has any U.S. intelligence agency ever had any dealings with Elizabeth Thomson, Nugan Hand's lawyer? What was the nature and duration of these dealings?
54. Has any U.S. intelligence agency ever had any dealings with Neil Scrimgeour, a Nugan Hand confidant in Western Australia? What was the nature and duration of these dealings?
55. When and how did U.S. intelligence become aware of Nugan Hand's plan to move Asian refugees to an island in the Caribbean? What thoughts, if any, did it render about this plan?
56. Does the U.S. Government know why millions of dollars were transferred from Nugan Hand accounts in Asia to a Nugan Hand account in Hawaii and then transferred on to Panama? Does the U.S. Government know what use was made of this money?
57. Has any U.S. intelligence agency ever had a relationship with the Hawaiian Trust Company, or Douglas Philpotts, an officer of that bank?
An Afterword by Yates @ page 393 on the scroll
source
https://ia600406.us.archive.org/31/items/KwitnyTheCrimesOfPatriotsATrueTaleOfDopeDirtyMoneyAndTheCIAIranContraScandal1987_201605/Kwitny%20-%20The%20Crimes%20of%20Patriots%20-%20A%20True%20Tale%20of%20Dope%2C%20Dirty%20Money%20and%20the%20CIA%20%28Iran-contra%20scandal%29%281987%29.pdf
While covering for agents and taking in millions from duped investors, Rewald was hardly living in the obscurity that people like Royal Commissioner Stewart say they expect of the CIA. Rewald spent about $400,000 a month to keep lavish offices around the world and a high-salaried staff of prominent Hawaiians, including lawyers and CPAs. He spent $250,000 a month to please himself and his family.
He owned a fleet of twelve limousines and other luxury cars worth up to $50,000 each (an Excalibur, a Jaguar, two Mercedes, a Rolls, a Continental, and three Cadillacs, among others), and he hired chauffeurs not just for himself but also to take his five children to baseball practice, or to lessons with their $9,000-a-month private tutors.
He owned ranches, and polo clubs, and an oceanfront villa with its own lagoon and gardens. He displayed fine art and antiques, threw eye-popping parties, and surrounded himself with gorgeous women, some of whom were supplied with their own Mercedeses.
His CIA contacts didn't seem to be dummies. Welch had joined the CIA in 1952, and spent a career procuring and managing overseas safe-houses and running several domestic intelligence collection offices. Kindschi had been a State Department foreign service officer in Moscow and Cairo, then entered the CIA's clandestine services branch in 1957, and stayed there until he got the Honolulu job for his last two years before retirement. (He also testified that he was forced out of the clandestine services in part because CIA turncoat Philip Agee exposed him as a CIA man.)
When retirement came, in 1980, Kindschi became a $60-an-hour consultant for Bishop, Baldwin, with an office in the firm's luxury suite and plenty of expense-account travel. Eventually he began receiving a $4,000-a-month salary on top of the consultant's fees. He brought an old friend from his CIA days in Stockholm onto the staff as a business consultant, too.
Kindschi's replacement as head of the Hawaii CIA office, Jack W. Rardin, went into the CIA immediately upon graduation from the prestigious Georgetown University School of Foreign Service in 1950. He worked first in foreign broadcast operations, then in the domestic collection division. From the time he arrived in Hawaii, he was frequently seen in the swank Bishop, Baldwin office, conferring with Rewald.
Among other matters, they discussed the influential millionaire businessmen Rewald was soliciting investments from in Indonesia, the Philippines, and elsewhere— men Rewald would also milk for political gossip. They also discussed the arms deals Rewald was trying to finance in India and Taiwan, apparently without success.
On official reports, Rardin rated Rewald "from good to excellent" as a source, and on what he acknowledged was "a number of occasions" he called Rewald's information "excellent." For example, about the time of the British-Argentine war over the Falklands in 1982, Rewald visited Argentina armed with a list of CIA questions. Under the guise of Bishop, Baldwin business, he queried Argentine bankers about their financial plans.
Rewald also reported to a CIA man identified in court only as "John Doe 5" at a "Far East location." More than a dozen CIA "John Does" were involved in the Rewald trial.
As time passed, several other Bishop, Baldwin staffers were referred for security clearances to the "secret" level. Some of them, it turned out, already had it. Rardin testified that when he applied for clearance for Captain Edwin Davis Avary, retired chief pilot of Pan American World Airways, and now a Bishop, Baldwin consultant, he was told that Avary was already in a relationship with the agency. Avary* gives a sly no-comment on whether he did CIA work at Pan Am. But he says he and others wrote "damned good reports" for the CIA while on trips for Bishop, Baldwin. (He cites an analysis he did of German election prospects.) He also worked on the Taiwanese arms deal.
*Interview with the author.
Sue Wilson, Rewald's blond executive assistant (with check-writing authority), had—after being a semifinalist in the Miss Teenage America pageant—served nine years with the National Security Agency (the CIA's high-technology twin) in Washington and Honolulu before joining Bishop, Baldwin. Her resume shows she handled highly sensitive cryptoanalysis, missile trajectory data, and space data.
One lawyer on the Bishop, Baldwin staff, Lieutenant Clarence Gunderson, was a reserve air force intelligence officer. On the investment firm's collapse, he was quickly back in uniform, giving intelligence briefings to the commander-in-chief of the air force's Pacific Command, and dealing in highly classified Soviet data.*
*Author interviews with Gunderson and others in Hawaii.
One commander Gunderson briefed was three-star General Arnold Braswell, who was widely identified as among Rewald's circle of allies. Braswell acknowledges** he was weighing going to work for Bishop, Baldwin when he retired from the air force. He filed a six-figure claim in bankruptcy court for loss of his savings, which he said he had invested with the firm.
**Interview with the author.
A prior air force Pacific Commander, four-star General Hunter Harris, the highest ranking officer in Hawaii, was close to Rewald and frequently in his office. Through Harris, Rewald met an aide of Lieutenant Colonel James ("Bo") Gritz, who was raising money with Pentagon help for a secret expedition into Laos to look for U.S. prisoners of war Gritz believed were still being held there; the mission was highly publicized after it failed.
General Harris and the Gritz aide say Rewald merely donated $2,000 of Bishop, Baldwin money to the cause. Rewald told investors and potential investors that he was financing the Gritz mission, and they were impressed when they read about the mission in the newspapers months after Rewald had confided to them that it was going to occur.
Clients who lost fortunes in the Bishop, Baldwin fraud say Rewald would call them aside privately, either in his office or at his lavish parties at the private polo club he bought, and would point out the high government officials around. He would single out CIA and FBI personnel for particular attention. He would note that Bishop, Baldwin was part of the CIA, though cautioning the clients never to repeat it.
The CIA connection proved their money was safe, he assured them. "If you can't trust the government, who can you trust?" they recall him saying.
His parties were attended not only by federal officials, but by Governor and Mrs. George Ariyoshi and other Hawaiian dignitaries. The office of then Lieutenant Governor, now Governor John Waihee, has acknowledged that Waihee received a $10,000 canceled check to him that Rewald has shown around. (The governor's staff says the check was a down payment on a business transaction that was never completed, and that the money was returned to Rewald.)
Were all these officials and service leaders suckered in by Rewald's fraud? As with Nugan Hand, that explanation requires one to believe that people who are supposed to be experts in intelligence, who are charged with protecting the United States from the deceptive practices of the Kremlin, are pretty easily led.
For example, while operating for three years directly in the eye of CIA officials, Rewald advertised that Bishop, Baldwin's deposits were protected by the Federal Deposit Insurance Corporation for up to $150,000 for each depositor. The FDIC, of course, insures only banks, not private investment firms like Bishop, Baldwin, and its limit was $100,000 for each depositor, as any bank advertisement would have revealed.
Kindschi recalled at the trial that he had asked Rewald about this, and was told, "Well, we have a special relationship with the banks to increase it to $150,000." Kindschi acknowledged that after that, he had reassured Bishop, Baldwin clients who asked about the FDIC limit. Kindschi testified that he didn't question Rewald further because "I trusted him."
This was the same fearless and resourceful covert operative who also told the jury, "When you serve overseas under deep cover, you do not have the full force of the United States behind you. . . . You are on your own. So if things had gone a-cropper in places where I served, I would have been left to get out of that situation with my own wits, and I understood that."
Kindschi, employing those wits at Bishop, Baldwin for $60 an hour, eventually helped prepare brochures containing some of the more outrageous Rewald lies. Though the CIA men knew Rewald had just come to Hawaii in 1978, Kindschi acknowledged that he "edited" a brochure calling Bishop, Baldwin "one of the oldest and largest privately held international investment and consulting firms in Hawaii. . . . Over the last two decades we have served the investment and consulting community with an average return to our clients of 26% a year."
Merely the name of the firm was a gross deception. Bishop, Baldwin, and Dillingham are old-line aristocratic names in Hawaii, as almost everyone there knew. It was as if someone had started a firm in New York City with the name "Rockefeller, Vanderbilt, Rewald, Roosevelt & Mellon."
Kindschi testified that he believed Rewald's explanation that somehow Bishop, Baldwin "came directly from the bowels of the old Bishop Investment Company."
Asked why he wrote, "The brick and mortar foundation of Bishop, Baldwin, Rewald, Dillingham & Wong has been deeply rooted in Hawaii for more than four decades," he testified, "It could have been just a typographical error."
He wrote—or "edited"—that the company's clients had an average worth of $4 million, and that 90 percent of those who tried to invest with the firm were turned down. (Rewald made it seem a personal favor to people, done out of friendship, to take their mere five-figure investments.) Bishop, Baldwin "has served the last four national administrations as White House consultants on subjects ranging from small business matters to the complex international relations of Asia," the brochure Kindschi edited said.
He told the jury he simply accepted Rewald's word for all this. He also testified that he was aware by 1979 that Rewald had a court record in Wisconsin for franchise violations. And he acknowledged that the brochures he helped prepare showed CIA agent Richardson as a Bishop, Baldwin consultant.
Bishop, Baldwin also advertised widely that its investment accounts "have been available since Territorial days," and that the firm worked for committees of both houses of Congress and "a former president of the United States," all of which was nonsense.
Bishop, Baldwin offered two financial statements with figures differing by one decimal place, apparently geared to differing levels of gullibility. One statement, for example, put accounts receivable at $187.9 million and total assets at $1.42 billion, while another put accounts receivable at $18.7 million and total assets at $142 million. (There hasn't been any evidence that Kindschi helped prepare the financial statements.)
Neither statement had a standard auditor's certification letter; one statement said "audited by Price-Waterhouse" under the figures, and the other just said "audited by a 'Big Eight' accounting firm." Apparently neither Price Waterhouse nor anyone else audited Bishop, Baldwin. The bankruptcy trustee said its checkbook was never even balanced.
Rewald says the CIA ordered the phony statements and approved them; he did produce documentary evidence that the CIA concocted a phony financial statement for the phony company that was set up in Rewald's office to serve as a cover for CIA operatives in the Far East. But the CIA men who testified all denied telling Rewald to do anything fraudulent in connection with Bishop, Baldwin.
Rewald told investors and his adulators in the local press that the company had two dozen offices with multimillion-dollar investments scattered around the world. Captain Avery, who prepared reports for the CIA while on Bishop, Baldwin's staff at $4,000 a month, says he helped establish "mail-drop" offices for Bishop, Baldwin in various cities by hiring an executive "front" firm to collect mail or telephone calls at a prestigious address. CIA documents produced in court show that unspecified Bishop, Baldwin offices overseas were in contact with CIA stations there.
Surely the case of Rewald is enough to disprove the Stewart commission's contention that someone who had real CIA connections would never advertise them. Rewald was the least secret agent imaginable. He cultivated his reputation for being wired into the agency. He acquired title to his first Honolulu home from former Cambodian Prime Minister Lon Nol, and spread the word that the house was really a CIA-owned "safe house." When he moved to his oceanfront villa, he deeded the supposed "safe house" over to Russell Kim, a Bishop, Baldwin consultant from Korea, whom Rewald says is a Korean intelligence agent, and who did receive a security clearance from the CIA up to the "secret" level.
A typical victim, Nella Van Asperen, says her impression that Rewald was an important CIA figure led her and her parents to invest—and lose—$400,000 in the firm, mostly her parents' retirement money. Mrs. Van Asperen—a commercial artist and another gorgeous blonde—had been approached by Rewald to design advertisements for a sporting goods chain he was starting in Honolulu.
Right after the Soviet invasion of Afghanistan, she was introduced to a traveling Afghan jeweler who was desperate to extend his thirty-day visa to the United States so he wouldn't have to return home. Says Mrs. Van Asperen, "Ron had told me he was with the CIA, and I thought if anybody can help he could." Rewald arranged a meeting for the Afghan with "the CIA," under conditions worthy of a Graham Greene spy novel.
"You will walk down this block, you will turn here, you will wait at this place," Mrs. Van Asperen says he told her. She and the Afghan wound up at an outdoor cafe with Rewald and two strange men. The Afghan, now working in San Diego, says he was asked a lot of questions about his father, an army general, and about the use of chemical weapons and Chinese arms. Then, he says, a "Mr. Anderson" gave him a business card and told him to take it to the U.S. immigration office, where he would be given political asylum. He says the immigration office seemed to recognize the card and gave him a long-term visa, and that he never heard from "Mr. Anderson" again.
"It's hard for me to believe someone would set all this up as a charade," says Mrs. Van Asperen. She saw Rewald all too often after that, as he persuaded her and her father to deposit their cash. Often she and Rewald had lunch, but she says he always excused himself in time to return for what he said was his daily 3:30 P.M. briefing from the CIA. Once, she says, he even invited her to join the CIA, but he later advised her not to because of "the danger." (He did sign up two men, however, administering secrecy oaths to them; the CIA officials who testified at his trial said the oaths and ceremonies were worthless.)
More tragic was the case of Mary Lou McKenna, a blonde former Playboy model who had just moved to Hawaii because of devastating medical problems. Living in Los Angeles, divorced and raising three children, she had undergone cancer surgery. Then her back was broken in two places in a car accident, leading to spinal fusion operations that were only partially successful, and left her hampered in movement and requiring long-term therapy. Finally, she contracted a rare, life-threatening lung disease that required her to live in a warm, non-smoggy climate.
With about $150,000 put together from savings and from the jury award in her accident case, she moved her family to Hawaii, and happened to land in the same apartment building where Jacqueline Vos lived. Vos, a Farrah Fawcett look-alike, was keeping books for Rewald.* Soon, McKenna was being invited to polo parties where Vos and Rewald introduced her to General Harris and Governor Ariyoshi, and pointed out "all these men in dark-looking suits" as being CIA and FBI agents.
*She says she believed what he said as everyone else did, and she hasn't been charged with a crime.
Soon, Rewald had Mary Lou McKenna's nest egg. On advice from his legal staff, she sold some property in California, so this, too, could be invested in Bishop, Baldwin. When the firm collapsed, she was forced to move out of her Honolulu apartment, sell her furniture, stop the physical therapy, and take a store clerk's job that caused her severe back pain. She was visibly aching and despondent.
There were scores of other cases.
In 1982, the Internal Revenue Service smelled something fishy and started a criminal investigation of Rewald and his company.
When Rewald was asked to produce records, Rardin, with Kindschi's help, had the CIA intervene with the IRS to hold up the audit. Rewald told Rardin he had received not only business expense money from the CIA, but also funds for passing to various people around the globe.
Two officers from CIA headquarters in Langley, Virginia, visited Hawaii in January 1983. In front of them, Rewald changed his story, saying that the only money he had received was for business expenses. The flip-flop didn't bother Rardin. The CIA gave Rewald phony cover stories to tell both the IRS and his accountant about the source of the money. Asked at the trial why Rewald's status continued unchanged, Rardin simply testified, "At the time, we trusted Mr. Rewald's integrity."
The CIA says its hold-up of the IRS criminal investigation was merely temporary, to allow time to create a cover story for the small amounts of expense money it gave him. But the fact is that ten months after the IRS had moved to investigate, the investigation was still frozen, and Rewald was still stealing.
At that point, in late July 1983, a local consumer protection agency, troubled by Rewald's FDIC claims, subpoenaed his books and records. Moreover, it leaked its suspicions—along with its discovery of Rewald's bankruptcy record in Wisconsin—to a local TV news reporter. The reporter confronted a Rewald aide with a camera crew and played the embarrassing interview on the air.
That day, Kindschi withdrew $170,000 of what he said was $291,000 that he and his mother had on deposit at Bishop, Baldwin. (The bankruptcy court later forced him to return it. He filed a claim for the money, but the court-appointed trustee filed a counterclaim against him. The trustee argued that almost all the money that Kindschi claimed was still on deposit represented fictitious interest and dividends that Rewald had credited to the Kindschis' accounts, or else was money that Kindschi had in effect already reclaimed through the high fees and salary he was collecting. The case is still pending.)
For his part, Rewald, after hearing about the TV interview, quickly emptied out Bishop, Baldwin's bank account with a $200,000 check to his lawyer, apparently as a defense fund, and sent his wife and children back to Wisconsin. His security guards began removing files from the Bishop, Baldwin office.
Rewald checked into a large Waikiki hotel. The next afternoon, the hotel's assistant manager, making her routine rounds of rooms whose occupants were due to check out but hadn't, found Rewald amidst a lot of blood. His wrists and forearms had been slit by a razor found nearby. Police took him to a hospital, where doctors described the wounds as "superficial" and said no vascular or nerve damage had been done.
He had reacted like a gutless Frank Nugan. He may well have known about Nugan. Remarkably, police later said they never checked to see if the blood found in the room had come from Rewald's body or had been brought there.
As the huge scandal dominated the Hawaiian press, efforts were made to cover up all traces of the CIA. Rardin denied to the police that he even knew Rewald. A federal judge put blanket restrictions on visitors to Rewald in prison, where he was held on an astronomical $10 million bail. The judge issued gag orders barring Rewald's lawyers from repeating what he told them. Case records, normally public information in a criminal matter, were sealed from public view, and Rewald was ordered not to talk about the CIA. The CIA won't comment on whether it disciplined any of its agents.
Most remarkably, the U.S. Attorney in Hawaii, Daniel Bent, turned this, his biggest case, over to a brand new lawyer on his staff, John Peyton. Peyton had come to work at the office just days after Rewald slashed his wrists. Peyton's grand jury investigation of the Rewald case was distinguished by its careful avoidance of any reference to the CIA; Rardin, for example, was identified to the grand jury as just a federal civil servant.
Once you learn Peyton's background, however, none of this seems so strange. From 1976 to early 1981, it turns out, Peyton had been chief of the litigation section of the CIA. After that, he had worked on the government's narcotics task force in Florida, which intelligence community sources say was heavily laced with CIA personnel. Suddenly, then, Peyton decided to seek work as an assistant prosecutor in Hawaii.
Peyton insists that it was just "pure, utter coincidence" that he wound up on the Rewald case.* The U.S. Government's explanation for both the Bishop, Baldwin and Nugan Hand cases, to the extent it has provided one at all, seems to rely in large part on an almost mystical faith in the power of "pure, utter coincidence."
*Interview with the author.
Late in 1986, American citizens got still better evidence of the damage wrought by their government's foreign policy of perpetual covert war. For the second time in eight years, Iran humiliated the United States and crippled a president.
We had given Iranians every reason to want to do that. Back in 1953, at the behest of an oil monopoly, and blinded by a foreign policy that mistakes other countries' independence for communism, the United States overthrew the only even semi democratically elected government in Iranian history. In its place, we installed a brutal and unpopular dictatorship. That all this was done covertly merely kept the American electorate from finding out about it; the Iranians knew damn well that the U.S. was behind the restoration and maintenance of the Shah.
Among those American officials who did the most to help the Shah preserve his regime of repression and torture was General Richard Secord, who headed the U.S. military assistance program there while palling around with the likes of Bernie Houghton and Edwin Wilson. There was a certain delicious irony in the fact that it was Secord who organized and went along on the arms-running mission with national security advisor Bud McFarlane that the Iranians used to entrap President Reagan. But as an American, it's hard to get much satisfaction from it.
From the day he took office President Reagan had preached about the need to isolate "terrorist states," and specifically identified Iran as one of them. We must, he repeated at every opportunity, refuse even to bargain with hostage-takers, let alone pay ransom to them. Then, it turns out, he arms them. And with the arrival of the Secord McFarlane arms shipment, an Iranian-influenced group in Lebanon releases one American hostage while holding on to a half-dozen others. And soon seizes more.
At first the president denied the arms shipments were ransom for hostages. Then he rather acknowledged they could be fairly interpreted that way.
At first he insisted that only a few "spare parts" were involved. Then he acknowledged that we shipped Iran planeloads of "defensive" antiaircraft missiles (which could just as well attack a 747) and antitank missiles (which could just as well attack an American official's bulletproof limousine).
For purposes of deception—not of the Soviets, but of Congress and the American public—the income from these sales and other money was channeled through numbered Swiss bank accounts. Among those deceived, inadvertently, were two of the plotters, Colonel Oliver North and Assistant Secretary of State Elliott Abrams, who lost $10 million by getting the account numbers wrong.
And who was put in charge of the secret Swiss accounts? Why, General Richard Secord, who two years earlier had resigned from the Pentagon under a cloud for his involvement with Edwin Wilson in what former CIA officer Thomas Clines admitted in federal court was a fraud against the U.S. Government; Clines paid, on behalf of his company, more than $3 million in fines and penalties for the fraud. And who did Secord hire as his chief aide in the Iran-Contra mission? Why, Thomas Clines, of course—the same Thomas Clines who, in the wake of the Nugan Hand collapse, jetted to Australia and accompanied Bernie Houghton on his flight from the country so he could hide out until the heat was off.
By his own testimony before Congress, Secord (or the company he owned 50-50 with his partner Hakim) collected $30 million from Iran for weapons he simultaneously bought from the U.S. Treasury for $12 million. Of the difference, he testified, only $3.5 million went to help the Contras (some of whom complained they hadn't received a dime). Secord testified that the Contras were desperately short of funds and that Colonel North was scrounging for donations for them; yet he testified that $8 million from the arms sales remained unspent in the Swiss account he controlled (not to mention the $10 million from the Sultan of Brunei that was lost in transit). Why wasn't the $8 million sent to the Contras if Secord and his partner didn't intend to keep it? The question didn't come up.
Of even more concern to common decency was the hiring of assassination experts like Chi-Chi Quintero and Luis Posada from Clines's old anti-Cuban campaigns to work in the supply program in Central America. Posada, a CIA operative, had been in jail in Venezuela for blowing up a Cuban civilian airliner in mid-flight over Barbados, killing seventy-three persons. (Venezuelan justice had not seen fit to bring him to trial in nine years, but the evidence against him, including tape-recorded telephone conversations, was substantial.) Though the CIA disclaimed responsibility for that terrorist act, when Posada escaped his Venezuelan jail (apparently through bribery, not derring-do), the CIA, or the Secord-Clines network it set in place, hired him back to help kill Nicaraguans.
Meanwhile, evidence was building that the Contra program was supported not just by arms shipments to Iran, but also by dope trafficking. In October 1986, a Contra supply plane crashed in Nicaragua killing most of its crew and leaving one a prisoner in Managua. Reporters found all sorts of links between the plane and the CIA, from its registration to the phone numbers found in the cockpit. They also discovered that it was the same plane that convicted dope dealer Barry Seal had used to fly cocaine in while he was working as part of a federal "sting" operation. Witnesses then placed Seal in the Contra supply program while he was earning a self-declared $50 million running cocaine into the U.S.
Other witnesses reported seeing cocaine stored at a south Florida house where Contra arms were warehoused before being shipped out. One woman reported seeing cocaine being loaded in Colombia onto a Contra supply plane that had dropped off weapons in Central America and was headed back to the U.S. Gerardo Duran, a pilot who ferried arms and personnel around for many Contra groups, was named by Costa Rican and American authorities as a cocaine trafficker. (He wasn't charged in court.)
Costa Rican-based Contras were also involved in a 400-pound cocaine seizure in San Francisco in 1983. Two Nicaraguan natives convicted in the case, Carlo Cabezas and Julio Zavala, who are brothers-in-law, later claimed that at least $500,000 of their drug profits was sent to Contras in Costa Rica. Some $36,000 found by federal agents in Zavala's house—along with cocaine, a military rifle, and a grenade—was seized as drug profits. But amazingly, the money was returned to Zavala by the Justice Department on certification by a Contra group in Costa Rica that the money belonged to it. (And the person whose signature was on the certification later claimed it was forged.)
The most clear-cut case of all involved a Costa Rica-based Contra group that struck a deal with George Morales, a multimillionaire Colombian-born cocaine kingpin living in Miami, right after Morales was indicted on multiple federal drug charges in 1984. According to both Morales and members of the Contra group, the Contras promised to use their CIA connections to take care of Morales's case if he helped them out.
Federal Aviation Administration and other aviation records confirm that Morales provided the Contras at least two aircraft, one of them costing $264,000 and the other of undetermined value, as well as trained pilots (including Duran). There is some corroboration for his statements that he also provided large amounts of cash, both his own drug money and contributions he solicited in the Miami Cuban community.
Aircraft maintenance receipts show that while Morales awaited trial, and while he continued to bring large amounts of cocaine into the U.S. (according to federal charges he was later convicted on), an airplane he gave to the Contras regularly refueled at Ilopango Air Force base in El Salvador. The receipts show that the fuel was supplied by the Salvadoran Air Force, though the base is under joint American-Salvadoran security. Ilopango has been a main transshipment point for arms going from the U.S. to the Contra bases in southern Honduras and northern Costa Rica.
In the spring of 1987, a variety of House and Senate committees plunged hastily and at first, at least, ineptly into investigations that might answer some questions about the Contra operations. Somewhere in the files of one such panel, the Senate Intelligence Committee, however, there is probably still a list of other unanswered questions. The author of this book provided the list at the committee's request after a series of articles he wrote about Nugan Hand appeared in the Wall Street Journal in 1982.
Robert Simmons, then chief counsel to the committee, praised the list as "extremely valuable" and said it formed the basis for closed-door testimony the committee took from CIA director William Casey and others. "Unfortunately," Simmons explained, "the answers can never be made known to you." They were all secret.
An edited set of the questions is appended on the pages following. Some original questions, whose answers have since been tracked down independently and are published in this book, are deleted from the list.
APPENDIX
The Questions Whose
Answers Are Secret
1. Did any U.S. intelligence agency ever have a relationship with Bernie Houghton? What was the nature and duration of the relationship?
2. What were the dates of Michael Hand's employment by any U.S. intelligence agency, whether on a permanent or contract or other ad hoc assignment, and what was his work?
3. Did the CIA ever have a relationship with Frank Nugan?
What was the nature and duration of the relationship?
4. Admiral Yates has said that Dale Holmgren, while an officer of Nugan Hand and officially retired from the intelligence service, continued to work actively to develop "a close relationship with the U.S. military forces and the business and government community" on Taiwan.
What was the exact nature of Holmgren's relationship with the U.S. military or intelligence community, or the U.S. Government at all, while he worked for Nugan Hand?
5. How and when did Bernie Houghton meet Admiral Yates? What was the nature and duration of their relationship?
Did Houghton, as Sir Paul Strasser has said, have letters of recommendation from Admiral Yates and other high-ranking U.S. military officers when he arrived in Australia in 1967?
If so, how did this come about?
6. Colonel Allan Parks, U.S. Air Force (ret.), has said that while serving undercover for U.S. intelligence as an official of the U.S. embassy in Vientiane, Laos, in the 1960s, he became aware that Bernie Houghton was generally known by U.S. intelligence to be transporting contraband such as drugs and gambling devices around Southeast Asia, along with surplus military equipment and other goods.
Talks with numerous persons make clear that Houghton had such a reputation. Colonel Parks has said that Houghton's movements were frequently recorded on cable traffic he saw at the embassy, and that General Aderholt was also aware of it. What did the U.S. intelligence agencies do with their information and records on Houghton?
Did the United States ever attempt to stop his trafficking in contraband? If so, how? If not, why not?
Did the United States make its knowledge of Houghton's trafficking in contraband available to Yates and others who met with him while on active duty, and who later went to work for Nugan Hand?
7. It seems inevitable that U.S. intelligence would have developed further information on Houghton during the years when he was the primary caterer to the social needs of U.S. servicemen on R & R in Sydney. There is abundant evidence that he was well known to various U.S. political, military, and intelligence officials. This period overlapped several years when Houghton was a critical factor in the operation of Nugan Hand, though not yet an officer of it. Were any records kept of his relationships with U.S. officials?
If so, what do they reflect, and what use has been made of them? If not, considering his friendships with so many important people— including at least two CIA station chiefs, Milt Wonus and John Walker—why not?
8. What was the nature and duration of the CIA's relationship with Kermit L. ("Bud") King (former Air America pilot)? Does any U.S. Government agency have a file on King's mysterious death during his business association with Michael Hand?
If so, does it—or any other intelligence file—reveal participation by Hand in any illegal activities, including but not limited to bringing drugs out of Asia?
What use was made of this information?
Were U.S. military and intelligence officers who dealt with Hand before and after their retirement informed of this?
9. Does any U.S. intelligence or law enforcement agency have a record of any drug transactions that Hand or Houghton carried on with people from the Asian mainland, including, but not limited to, Khun Sa, the military leader from the Shan States of Burma?
Were U.S. military and intelligence officers who dealt with Hand before and after their retirement informed of this?
10. When did U.S. intelligence agencies first become aware that Nugan Hand was soliciting large deposits in violation of the foreign exchange control laws of many countries?
That it was moving money for illegal drug dealers?
That it was soliciting deposits from U.S. citizens in Saudi Arabia and elsewhere?
That it was soliciting deposits from U.S. servicemen, including on U.S. military bases?
What use was made of this knowledge?
11. Why was Michael Hand allowed to keep his U.S. passport after he accepted Australian citizenship?
12. Why were the Australian visa problems of Bernie Houghton, a U.S. citizen, in February 1972, solved by the intervention of a top official (Leo Carter) of the Australian Security Intelligence Organization?
What do U.S. intelligence agencies know of any relationship that Houghton, or any other Nugan Hand figure, had with ASIO?
When and how did U.S. intelligence agencies become aware of this?
13. Has any oversight authority examined records of cable traffic that Christopher Boyce might have seen while working for TRW Corp., to see if the facts might justify his charges that the cable traffic indicated U.S. involvement in Australian political and labor affairs?
What records were located, who examined them, and what were the findings?
Do records of any cable traffic or other records from any U.S. intelligence organization provide evidence to support charges, made by Boyce, by several officials of the Australian Labor Party, and by others, that the U.S. involved itself in Australian domestic political or labor activities, or provided covert impetus for the removal of Prime Minister Gough Whitlam from office in 1975?
14. Did any U.S. intelligence agency ever have a relationship with, or arrange for money to be paid to or on behalf of, former Australian Governor General John Kerr?
If so, please provide details. Did any representative of the U.S. Government communicate, directly or indirectly, with Kerr in the week prior to his dismissal of Gough Whitlam?
What was the nature of the communication?
15. People who knew Bernie Houghton well in Australia say that he was given access to U.S. military transport at Richmond Air Base there. Is this true?
Why did it happen?
16. Was there any official relationship, on a contract basis or otherwise, between Houghton and the former Australian CIA station chiefs Walker and Wonus?
17. After Hand's tour of duty in Laos with the CIA, did he at any time return to the U.S. for further training or briefing by any U.S. intelligence agency?
Did Houghton ever get such training or briefing?
18. During Hand's time in southern Africa or Rhodesia, and during his time in Panama, did he have any contact with, or relationship with, anyone in any U.S. intelligence agency?
19. Did any employe or contract agent of any U.S. intelligence agency ever use the Nugan Hand organization to finance or otherwise arrange arms deals in southern Africa or elsewhere?
20. Did any employe or contract agent of a U.S. intelligence agency ever use Joe Judge to finance or arrange arms deals?
21. Did any U.S. intelligence agency ever use Nugan Hand to make payments to any individual or company for any purpose?
22. Was there any relationship between Patry Loomis and any person associated with Nugan Hand prior to Loomis's retirement from the CIA? Or after?
Is there truth to a report in Foreign Policy magazine (winter 1982-83) that Loomis, perhaps using another name, was a director of a company in the Nugan Hand group?
23. What was the nature and duration of any relationship between Hand or Houghton and Theodore Shackley before Shackley left the CIA? What do U.S. intelligence agencies know of their relationships with Shackley after he retired from the CIA?
24. When and how did any U.S. intelligence agency become aware of a relationship between Thomas Clines and anyone associated with Nugan Hand, particularly Houghton?
What is known about the nature and duration of the relationship? Did it exist before Clines left the CIA?
Did Clines have any relationship with any U.S. intelligence agency after his announced retirement from the CIA?
When and how did any U.S. intelligence agency become aware that Clines went to Australia shortly after Nugan Hand failed, and left Australia with Houghton?
Has anyone looked for records of cable traffic between Clines and anyone involved in Nugan Hand? (Australian authorities say there was cable traffic between Clines and Hand while Clines was still with CIA.) Were any records found? Do any exist? What do they disclose?
25. When and how did any U.S. intelligence agency become aware of a relationship between Ricardo Chavez and anyone associated with Nugan Hand, particularly Houghton?
What is known about the nature and duration of the relationship? Did it exist while Chavez was still a contract agent for the CIA?
Did Chavez have any relationship with any U.S. intelligence agency after his service as a CIA contract agent?
26. When and how did any U.S. intelligence agency become aware that Chavez was planning to work with Nugan Hand?
What is known about their relationship?
27. Was any instruction given by any employe of any U.S. intelligence agency to any Australian, or to any Australian security agency, about Hand, Houghton, or Nugan Hand in general?
28. How and when did any U.S. intelligence agency first learn the identity of the mysterious "Charlie" who entered Australia and helped Michael Hand leave under a phony identity?
29. Has any U.S. intelligence agency been in contact with Hand since he left Australia in June 1980? When, how, and what happened?
30. When was the last contact that a U.S. intelligence agency had with Houghton? How did it occur, and what happened?
31. Did Naval Task Force 157 ever have representatives in Australia? Who were they and what did they do? Was Edwin Wilson ever one of them?
32. When and how did any U.S. intelligence agency become aware that Wilson and Houghton were meeting? What does U.S. intelligence know about the purpose and content of the meetings?
33. Did U.S. intelligence attempt to warn anyone working for Nugan Hand or any customers of Nugan Hand concerning what it knew about the people involved? Who was warned, and what was the nature and content of the warnings?
34. If any relationship between Houghton and U.S. intelligence or military agencies is denied, what could account for the frequent visits of important U.S. officials to such a seedy spot as the Bourbon and Beefsteak Bar?
35. Why were the FBI's files on Nugan Hand withheld from disclosure, even to Australian law enforcement authorities, on the ground that they would endanger U.S. "national defense or foreign policy"? How would our national defense or foreign policy be endangered by the release of these documents to anyone, particularly to many properly constituted authorities assigned to investigate and prosecute Nugan Hand's violations of Australian law, specifically: the National Police, the joint state federal police task force, the Corporate Affairs Commission inquiry under Geoffrey Nicholson, the New South Wales Attorney General's office, and the official liquidator, John O'Brien?
36. Why did FBI agent John Grant refuse to look at evidence of possible violation of U.S. law that John O'Brien, the official Australian liquidator for Nugan Hand, tried to show him?
37. To whom, and at what Australian government agency, does the FBI say it disclosed all its information on Nugan Hand? Why would it not do so to other authorized Australian law enforcement agencies with whom the FBI normally does exchange information on criminal matters?
38. When and how did U.S. intelligence or law enforcement agencies become aware of Nugan Hand's activities in the drug center of Chiang Mai, Thailand? What is known about these activities? Since there is abundant evidence that this activity involved criminal violations, at the very least of the law of Thailand, why has the information not been disclosed? Why did Richard Virden, information officer with the International Communications Agency, intervene to block Drug Enforcement Agency officers in Chiang Mai who were seeking to exchange information about Nugan Hand with a reporter? What information could they have disclosed if Virden had not intervened?
39. When and how did any U.S. intelligence agency become aware that Frank Nugan's telephone calls were being electronically intercepted? What is known about this? Does any U.S. intelligence agency know the contents of any intercepted conversations? Has any inquired?
40. Does any U.S. intelligence agency know any reason why John Owen, a former career British Navy officer working for Nugan Hand in Thailand, would prepare long, detailed reports of military capabilities and troop movements of the various armed factions in Southeast Asia, particularly Cambodia? Has U.S. intelligence ever obtained information from these reports? How?
41. Did any U.S. intelligence service ever receive information from any officer, director, employe, or agent of Nugan Hand on any subject?
42. Has U.S. intelligence had any dealings involving Prince Panya Souvanna Phouma? Has Nugan Hand played a part in any such dealings? Have any U.S. intelligence dealings with Prince Panya involved arms sales, or the possible operation of an air freight service, or a cloud-seeding service?
43. Has any U.S. intelligence agency ever had any dealings with Neil Evans, the Australian who represented Nugan Hand in Chiang Mai? What was the nature and duration of these dealings?
44. Has any U.S. intelligence agency ever had any dealings with Donald Beazley? What was the nature and duration of these dealings?
45. Has any U.S. intelligence agency ever had any dealings with George Shaw, or with relatives of his in Lebanon? What was the nature and duration of these dealings?
46. How did so many employes of Air America and Continental Air Service become shareholders of Australian and Pacific Holdings Ltd., the company Nugan and Hand founded before launching the Nugan Hand group? Did any U.S. Government agency facilitate these investments?
47. Has any U.S. intelligence agency ever had any dealings with Clive ("Les") Collings, Nugan Hand's Hong Kong representative? What was the nature and duration of these dealings?
48. Has any U.S. intelligence agency ever had any dealings with Wilfred Gregory, Nugan Hand's Philippine representative? What was the nature and duration of these dealings?
49. Has any U.S. intelligence agency ever had any dealings with John Needham, a co-founder of Nugan Hand? What was the nature and duration of these dealings?
50. Has any U.S. intelligence agency ever had any dealings with George Farris, a Nugan Hand Washington representative? What was the nature and duration of these dealings?
51. Has any U.S. intelligence agency ever had any dealings with the Wing-On Bank, Nugan Hand's Hong Kong bankers? What was the nature and duration of these dealings?
52. Has any U.S. intelligence agency ever had any dealings with the Inter-Alpha group of banking companies, which handled international accounts for Nugan Hand? What was the nature and duration of these dealings?
53. Has any U.S. intelligence agency ever had any dealings with Elizabeth Thomson, Nugan Hand's lawyer? What was the nature and duration of these dealings?
54. Has any U.S. intelligence agency ever had any dealings with Neil Scrimgeour, a Nugan Hand confidant in Western Australia? What was the nature and duration of these dealings?
55. When and how did U.S. intelligence become aware of Nugan Hand's plan to move Asian refugees to an island in the Caribbean? What thoughts, if any, did it render about this plan?
56. Does the U.S. Government know why millions of dollars were transferred from Nugan Hand accounts in Asia to a Nugan Hand account in Hawaii and then transferred on to Panama? Does the U.S. Government know what use was made of this money?
57. Has any U.S. intelligence agency ever had a relationship with the Hawaiian Trust Company, or Douglas Philpotts, an officer of that bank?
An Afterword by Yates @ page 393 on the scroll
source
https://ia600406.us.archive.org/31/items/KwitnyTheCrimesOfPatriotsATrueTaleOfDopeDirtyMoneyAndTheCIAIranContraScandal1987_201605/Kwitny%20-%20The%20Crimes%20of%20Patriots%20-%20A%20True%20Tale%20of%20Dope%2C%20Dirty%20Money%20and%20the%20CIA%20%28Iran-contra%20scandal%29%281987%29.pdf
No comments:
Post a Comment