Whiteout

by Alexander Cockburn

  By now Barry Seal’s cover as a secret drug agent was completely blown and he went back to what he did best, running drugs and guns. Fortunately for Seal, Congress was not persuaded to renew Contra funding in the fall of 1984 and instead enacted the Boland amendment prohibiting any direct military aid. This meant Seal still had a job shuttling lethal contraband for North’s network from Mena to El Salvador, Honduras and Nicaragua. An Arkansas police officer investigating Seal’s operation in August 1985 wrote in his report: “Every time Bari [sic] Seal flies a load of dope for the US govt., he flies two for himself.”

  In late December 1984, Seal was caught flying a load of marijuana into Louisiana. He was released the next day after he posted a $250,000 cash bond. Seal made a call to his friends in the DEA, and on January 7 he was interviewed by Special Agent Dale Hahn of the FBI. According to Hahn’s notes, Seal offered to testify against low-level members of the Medellín cartel in exchange for a guilty plea and light sentence on the marijuana-trafficking charges. Over the next year, Seal testified in three major drug cases, helping the feds secure convictions. Seal was eventually sentenced to a six-month term in a halfway house in Baton Rouge.

  Shortly after Seal’s arrest in Louisiana, his old friend and co-pilot Emile Camp died when his Seneca plane, equipped with state-of-the-art navigational equipment, slammed into a mountain near Mena. Many of Camp’s associates believe that his plane had been sabotaged and point out that he was one of the few to witness many of Seal’s activities for the CIA and DEA.

  In the summer of 1985, Seal decided to sell his C-123K cargo plane for $250,000. The buyer was the same CIA contractor, Harold Doan, from whom Seal had acquired the plane a year earlier. The plane later ended up in the service of Oliver North’s Contra resupply program and entered aviation history on October 3, 1986, when it was shot down over Nicaraguan air space and its cargo kicker, Eugene Hasenfus, was taken into custody by the Sandinistas and paraded before the world as living proof of the Reagan administration’s war against their country.

  Although supposedly in a witness protection program, Seal said he considered himself “a clay pigeon.” He was eventually tracked down by a team of assassins working for Jorge Ochoa and Pablo Escobar. On February 19, 1986, Seal’s body was riddled with hundreds of bullets as he sat in his white Cadillac outside the Salvation Army Center in Baton Rouge.

  After Seal’s death, IRS agents examined his bank records. They determined his estate owed more than $86 million in back taxes, but ended up forgiving much of the debt, citing Seal’s “CIA-DEA employment.”

  By the mid-1980s, Arkansas was an important staging post in the Contra War against Nicaragua being run from Washington. One scheme for maintaining a cover-up for Oliver North’s network was, it appears, played out in the Governor’s Mansion in Little Rock, Arkansas occupied by a young Bill Clinton.

  Among the occupants of that same mansion was Buddy Young, the man in charge of Clinton’s security. According to court documents filed by Terry Reed, a former CIA asset involved in North’s Contra resupply effort, Young was a pivotal figure in a case designed to land Reed in prison not long after Reed had walked out of an arms-for-drugs operation in Guadalajara, Mexico, where he had been working with CIA man Felix Rodríguez.

  Arkansas’s role in the Contra War and in an arms-for-drugs supply network goes back to the early 1980s and the airport at Mena. A federal investigation aided by the Arkansas State Police established that Barry Seal had his planes refitted at Mena for drug drops, trained pilots there and laundered his profits partly through financial institutions in Arkansas. Seal at this time was in close contact with North, who acknowledged the relationship in his notebooks and his memoir.

  Among those recruited by North was – so the man subsequently asserted in court papers – Terry Reed, formerly with Air America in Thailand. Reed says he was working for North in 1983. North put Reed in touch with Seal, and by 1984 Reed had established a base at the hamlet of Nella, ten miles north of Mena in the Ouachita National Forest. There Nicaraguan Contras and other recruits from Latin America were trained in resupply missions, night landings, precision airdrops and similar maneuvers. Reed, familiar with the commercial affairs of Mena, asserts that large sums of drug money were being laundered through leading Arkansas bond brokers, an allegation also being considered by a federal investigator just as his researches were abruptly terminated.

  One of Reed’s contacts in North’s network was William Cooper, another Air America veteran then working for Southern Air Transport. Cooper was at the controls of the C-123K once owned by Seal that was shot down by a Sandinista soldier in October 1986. That plane had been serviced at Mena. Cooper died in the crash. His crewman, Eugene Hasenfus, survived.

  Back in 1985, Cooper had suggested to Reed that he go to Mexico and set up an operation expanding the supply network. Reed agreed, traveled to Vera Cruz for discussions with Félix Rodriguez and, in July 1986, set up a front company, Machinery International, in Guadalajara.

  Three months later Cooper was dead and Hasenfus was being paraded by the Sandinistas before the Managua press corps. Reed says that Machinery International’s business, “trans-shipping items” in “support of our foreign politics,” was put on hold until January 1987, this at a time when the Iran/Contra cover-up was pressing forward in Washington. Seven months later, Reed says, he became aware that drugs were part of the shuttle passing through Machinery International’s premises in Guadalajara and that he himself was a likely candidate for fall guy if things came unglued.

  Reed says he confronted Rodriguez and told him he was quitting. By early September 1987 he had returned to the United States. A month later Governor Clinton’s security chief, Buddy Young, was activating – from the governor’s mansion – a sequence of events seemingly designed to land the potentially troublesome Reed in prison.

  The instrument at hand was a plane owned by Reed.

  On March 24, 1983, Reed’s plane had been stolen from a repair shop in Joplin, Missouri (Reed’s home state). Prior to this, Reed says, Oliver North had asked him to contribute this same plane to Project Democracy, a scheme by which individuals would allow their fully insured planes and boats to “disappear” for the sake of counterrevolutionaries in Nicaragua. Reed claims he had refused the request. At all events, the plane was removed while Reed was out of town. Reed duly reported the theft to his insurance company and received compensation. He says that in 1985 North’s people contacted him in Mena, told him that his plane was being returned after having been in Central America for two years and asked that he not report its return because they might need to “borrow” it again. Reed consented. He had the plane stored at his hangar in the North Little Rock Airport and left for Guadalajara soon thereafter.

  On October 8, 1987, Tommy Baker, a former Arkansas State Police officer and longtime friend of Buddy Young, says he happened to be passing Reed’s hangar when a powerful gust of wind blew the door open, revealing a plane. Baker said he thought the plane looked “suspicious” and so called his pal Young at the Governor’s Mansion. Young later claimed in testimony that he contacted the National Crime Information Center to check if the plane’s registration number came up on a list of stolen planes, found no record of this and then instructed Baker to check if the plane’s markings had been changed, a common practice of plane thieves (also a routine practice at Mena and in North’s Project Democracy). Baker established that they had been altered, and by October 21, the two claim, they turned the case over to the FBI.

  Under scrutiny, the sequence of events as set out by Baker and Young did not stand up. On October 5, three days before that fortuitous gust blew open the hangar door, Young was phoning Reed’s parents masquerading as an old friend of their son, according to legal papers filed by Reed. Young had called in the plane’s correct registration number to the National Crime Information Center – so the center’s records show – on October 7, before Baker had, by his own account, even set eyes on the plane (and before Young had called in with t
he doctored number). That same evening Young had called Joplin to inquire about the plane’s original disappearance. In June 1988, Reed was indicted on mail fraud charges in connection with his 1983 insurance claim on the plane.

  Reed accused Young and Baker of preparing and presenting false evidence for the purpose of furthering a false prosecution. This much is clear. In efforts to discredit someone familiar with the Mena operation, Buddy Young made his calls from Bill Clinton’s mansion. Young and Baker have admitted to entering Reed’s hangar three times without a warrant. They have also admitted to tampering with the plane. When they finally did obtain a warrant, it was on the basis of misrepresentations. According to court documents, they subsequently made false statements to a federal grand jury as well as, on more than one occasion, in hearings related to United States v. Reed. Finally, evidence that might have helped Reed’s case was secreted in Young’s office in Clinton’s mansion when it was supposed to have been in federal court. A federal judge involved in the case, Frank Theis, declared that Baker and Young had acted with “reckless disregard for the truth.” Reed was acquitted when the court determined that the government did not have enough legitimate evidence to convict him.

  Three months before his assassination Barry Seal described in sworn testimony to federal and state investigators a nexus of airstrips, front corporations, “legitimate” Arkansas companies and banks participating in the shipment of drugs and laundering of drug profits. His interrogators – IRS agent Bill Duncan and Russell Welch of the Arkansas State Police – had hoped to get Seal to gradually detail the bigger picture and were frustrated in their efforts when Seal, then under a drug conviction in Louisiana, was returned to that state for sentencing. When he was killed, one important path toward uncovering the Contra resupply operation in Arkansas turned cold.

  Nevertheless, Duncan and Welch were determined to continue their investigation and follow the trails leading out from Mena into the rest of the state. Where the money trail ultimately led, the investigators never were able to discover fully because their investigation was abruptly halted. One alleged money launderer, conspicuous in Arkansas’s politico-financial world and profitably involved in state business, was – according to a source whose information had proved reliable in the past – in receipt of large sums of drug money from Seal. Duncan and Welch eventually prepared a 3,000-page file on Mena, documenting widespread money laundering and drug running. Duncan prepared thirty-five indictments for the US Attorney, but they were never acted upon and in 1988 the Arkansas State Police began shredding its Mena files, including all documents linking Oliver North to Seal and Seal’s associate Terry Reed.

  There is every indication that many of the illicit activities linking intelligence agencies to drug traffickers continued into the 1990s. An IRS report from the fall of 1991, three years after Duncan left the agency, notes that the “CIA has ongoing operations out of Mena, Arkansas airport … one of the operations at the airport is laundering money.”

  Duncan, a special agent in the IRS’s criminal division, was assigned to the Mena investigation in 1983. In 1989, he was called to testify before the House Judiciary Committee about the goings-on at Mena. The committee had convened to probe the lack of criminal indictments and the possible hampering of the investigations by the CIA and Clinton’s gubernatorial staff in Little Rock. Another agency under scrutiny was the US Attorney’s office, which had been empowered to convene a grand jury and bring indictments in the affair, but did not do so.

  Duncan had learned of an alleged payoff to US Attorney General Ed Meese by suspects in the Mena investigation. He was told by the IRS’s attorneys to deny to congressional investigators that he had any knowledge of this allegation and to state that he had “no opinion” on the reluctance of the US Attorney to convene a grand jury. He refused. Shortly thereafter Duncan was transferred from his IRS job to a position with the Subcommittee on Crime of the House Judiciary Committee, where he continued to probe Mena. Later that year, Duncan was arrested at the Capitol Building in Washington for possession of a concealed weapon (his service pistol) as he tried to enter his office. The case went to the US Attorney General’s office, where it was held in limbo for more than a year, effectively preventing Duncan from pursuing the Mena case. He quit the House Judiciary Committee and went to a position with the Arkansas Attorney General’s office.

  Russell Welch also suffered a similarly rocky career. He had been a criminal investigator for the Arkansas State Police and had worked closely with Duncan on the Mena case since 1983. When the federal government closed down its inquiry, Welch’s superiors in Arkansas also took him off the case. Welch claims that an attempt was made on his life in 1991 while he was meeting with Duncan in Little Rock.

  In 1992 Clinton spokeswoman Max Parker was asked why Clinton had never responded to the 1990 request of Deputy Prosecutor Charles Black for assistance in forwarding a state inquiry into “the rather wide array of illegal activities” centering on the Mena airport. Black, whose jurisdiction includes Mena, suspected a federal cover-up of activities there. Parker claimed that Black was merely a subordinate in the prosecutor’s office and that Clinton went straight to the top. She said Clinton told State Police commander Tommy Goodwin that he would allow $25,000 to be released to the chief prosecutor in Black’s district, Joe Hardagree. Hardagree, Parker said, rejected Clinton’s offer of funds as proffered by Goodwin, presumably (according to Parker) because $25,000 was insufficient for such a probe.

  But this claim contradicts what Hardagree said in a 1992 letter to Mark Swaney of the Arkansas Committee, a group of citizens looking into the Mena affair: “During my tenure as prosecuting attorney, I did not receive $25,000 in State funds, or any part of this amount of money, nor did I hear anything concerning these State funds, from Colonel Goodwin or anyone at Arkansas State Police or anyone in the Governor’s office. The only investigation that I am aware of which has expended funds or resources has been the Grand Jury investigation of the Federal Court for the Western District of Arkansas.”

  In October 1991 the US Congress appropriated another $25,000 upon the intervention of Arkansas Representative Bill Alexander. The money languished unused in the State Police headquarters. Parker said that it was just a matter of completing some paperwork and that Goodwin would straighten everything out.

  But Goodwin was less than forthcoming on the matter in an interview during the 1992 election season. Where once the policeman had been enthusiastic about the resumption of an investigation, now he said he wasn’t sure there would be any “value” to it, adding that even if the Mena investigation was to proceed, the chief investigator, Duncan – who was at that time sequestered from reporters’ inquiries by his superiors in the Attorney General’s office – would not have subpoena power.

  Hardagree said that it looked as if political pressure had been exerted on Goodwin. “These are all good people, but they are too involved in politics,” Hardagree said. “I think the world of Tommy Goodwin, but someone’s put the heat on him.”

  At a crucial stage in the Contra War, Governor Bill Clinton’s personal creation, the Arkansas Development Finance Authority, made its first industrial development loan. The year was 1985, and the recipient of the loan was Park on Meter, Inc., or POM, a parking meter manufacturer based in Russellville, Arkansas. POM, it has been alleged by Michael Riconosciuto, a computer expert serving a prison sentence on drug charges in Washington state, was under secret contract to make components of prototype chemical and biological weapons for use by the Contras, as well as special equipment for C-130 transport planes. Such planes were at that time ferrying drugs and weapons in and out of Mena, which is just a few miles away in western Arkansas. Clinton’s state was thus an important link in the Contra supply chain at a time when military aid to the Contras had been banned by Congress.

  About a mile north of the airport in Russellville on Highway 331 sits POM’s headquarters and factory in a low building made of corrugated metal. POM began making parking meters at
this site in 1976. Except for some superficial alterations, its premises are the same ones once owned and occupied by defense giant Rockwell International. Back when POM took over the site from Rockwell, its property covered a little more than thirty-six acres. But between 1976 and 1992 a complicated series of real estate transactions (the county court documents fifteen mortgages or deeds concerning this property over this period) left POM itself owning only about eight acres. The remainder of the property POM deeded to a partnership called MBVG. In 1990, one of the partners in MBVG, a man named Mac Van Horn, leased a portion of this property to the US Army Reserve. A plot of land northwest of POM’s property housed the 354th Chemical Company of the 122nd Army Reserve Command.

  When Mark Swaney of the Arkansas Committee investigated the site he saw two camouflaged trucks with trailers mounted with what looked like generators for creating smoke screens, along with some military transport trucks and a number of industrial drums. Swaney talked to some of the soldiers there, who told him that they were part of a “smoke unit.” A few days later former IRS investigator Bill Duncan took a trip out to Russellville. Duncan saw the drums sitting next to two corrugated metal sheds without windows or markings of any kind. Duncan also saw what he described as “chemical tanker trucks” at the Army Reserve Post. In short, here in a scruffy corner of Russellville was a kind of military/industrial landscape, a setting appropriate to our tale.

  Southwest of Russellville there is another kind of military/industrial landscape, this one in a wooded valley that surrounds Mena. So far we have described Mena as a center for covert operations involving Contra training and resupply missions, as well as drug smuggling and money laundering. Mena was also important as a base for aircraft maintenance and retrofitting.

  We come now to Michael Riconosciuto, a former contract employee of the CIA, who says he worked at Mena on and off between 1980 and 1989. Riconosciuto was arrested on drug charges shortly after being named as a witness in the Inslaw Corporation’s case against the US government for the latter’s alleged unauthorized use of the PROMIS software, which Riconosciuto wrote for Inslaw. Riconosciuto claims he was set up. He is now in prison in Washington state.