According to Riconosciuto, Mena was part of a network of bases that evolved over time, rising and receding in importance with the changing needs of US covert operations. He says that at the time he was involved, Mena was crucial because of its central location relative to other bases, because of its retrofitting and maintenance facilities and because of its role as the administrative center of the operations. Finally, he says, Mena was the main drop-off point for narcotics shipments, the other bases serving as distribution points or as “nesting facilities” for the aircraft, mainly a fleet of about thirty C-130 transport planes.
Thus Riconosciuto is the third person who stepped forward with details of the covert military and narcotics operations at Mena, corroborating information already supplied by Barry Seal and Terry Reed. But unlike Seal, who was primarily a drug smuggler, and Reed, who supervised the training of pilots and participated in resupply operations, Riconosciuto served in a technical and administrative capacity that gave him a broader picture of the whole operation. He came to Mena with a background in computer technology and programming as well as intelligence experience, gained from working with the Wackenhut Corporation, a private security firm whose imbrication with the intelligence world is well known. In Mena, Riconosciuto supervised the transshipment of high-tech equipment (including infrared gun scopes and night-vision goggles) to the Contras, maintained the administrative computer network and developed accounting software to facilitate the electronic transfers of funds for the money-laundering side of the operation.
Riconosciuto says that to his knowledge no drugs were ever unloaded at the Mena airport itself. As with Seal’s setup in Louisiana, planes flying at low altitude would use drag chutes to drop containers of drugs in the surrounding countryside. Sometimes the dope would be dropped onto clearcuts in the Ouachita National Forest. More often it would be dropped onto farmland outside Mena. The drugs would be picked up by helicopter or truck and taken to a loading area, from which they would be sent to distribution points via truck or two-engine plane. He described a constellation of support facilities for both the shipment of drugs and for the manufacture of airplane parts. Independent sources for parts were especially necessary both to ensure a ready supply of equipment without attracting undue attention and to provide equipment that could not be easily traced if a plane crashed or was captured.
Riconosciuto’s account of these support facilities matched, in many of its particulars, the evidence gathered by state and federal investigators who were on the trail of the Mena operation from 1983 to 1988. But in the same way that his story augmented the picture drawn from Seal and Reed, so it extends the line of supporting actors beyond the environs of Mena. Which brings us back to the headquarters of POM.
POM, according to Riconosciuto, was not merely in the business of making parking meters. He says that beginning in 1981, the company also made ferry drop tanks – external fuel canisters – for use on C-130s. Drop tanks are essentially nothing more than aerodynamic metal containers, well within the production capabilities of a company set up to make parking meters. These tanks, attached to pylons on the wings and jettisoned when empty, are necessary to fuel long-range transport missions. While standard on C-130s and other military aircraft, they are virtually unknown in civilian use.
To this point, most of our discussion of Mena has centered on conventional weapons delivery and more or less conventional training. But Riconosciuto points to other, even more sinister, tactics that began to take shape in Arkansas. By 1983, he says, it was clear to US intelligence that the Contras were unable to inflict real damage on the Sandinista troops and needed a tactical advantage – either through the use of high-tech weaponry and equipment, such as the infrared and night-vision devices mentioned above, or through unconventional weaponry. To this end, Riconosciuto says, POM was enlisted in a project with the Stormont Labs of Woodland, California, and the Wackenhut Corporation to develop chemical and biological weapons that could be deployed in guerrilla warfare. POM was assigned the task of producing the munitions themselves.
Recall the configurations on the ground in that corner of Russellville described above. According to Riconosciuto, the Army Chemical unit had an arrangement to provide POM with the chemical agents once the prototypes had become advanced enough for testing. These prototypes were meant to be fairly simple devices – a hand-held grenade, a mortar shell, a small bomb – all of which could have been produced with the machinery on hand at POM.
Stormont confirmed in 1992 that in the early 1980s it was approached by Wackenhut in connection with the development of biological weapons, but denied that anything went beyond the talking stage. Wackenhut denied any involvement with Stormont, POM or Riconosciuto. When asked in 1992 about allegations by Riconosciuto that POM built aircraft drop-tanks and had been engaged to produce bio-chem munitions, “Skeeter” Ward, boss of POM, said breezily to Bryce Hoffman of the Nation, “Hell no. What we make is re-entry nose cones for the nuclear warheads on the MX missile and nozzles for rocket engines.” He also said, “We have got a contract with McDonnell Douglas to make aircraft parts, but I don’t even know what that’s about.” “Skeeter” Ward is the brother-in-law of Webster Hubbell, Clinton’s disgraced assistant attorney general. POM was founded by Seth Ward Sr., the father of Hubbell’s wife, Suzie. While an attorney at the Rose Law firm, Hubbell had shepherded POM’s application to become the first company to receive an industrial development loan from the Arkansas Development Finance Authority. This loan for $2.75 million was rushed to completion in the closing hours of 1985.
The Arkansas Development Finance Authority came into being in April of that year as part of Clinton’s sweeping Economic Development Initiative. What had previously been the Arkansas Housing Development Agency, which offered low-interest loans to develop single-family housing, was now revamped into a kind of full-service financial institution charged with attracting capital into the state for the purposes of industrial development, job creation, agricultural and even aquacultural financing. It advertised itself as an agency especially helpful to small companies “who have traditionally been excluded from the bond market by high issuance costs and servicing fees” but which under the umbrella of ADFA bond issues would be able to trim such costs.
The crux of ADFA’s mission was to offer companies long-term loans financed through the sale of tax-exempt bonds. Companies in need of capital would come to ADFA, which in turn arranged for the issuance of a bond from a private bondholder, which ADFA then offered for sale. (The state of Arkansas did not guarantee these bonds, but by virtue of ADFA’s involvement the bonds receive tax-free status.) When the bonds were sold, ADFA delivered the indenture and a record of the bond owners to a bank, which became the trustee of the deal. ADFA thus served as a kind of middleman in a deal between the trustee and the companies. The trustee was responsible for collecting the payments on the loan and interest and was also responsible for paying out dividends and ultimately the principal to the bond holders. In turn, the trustee bank was allowed to invest the money it got from the bond issue in Treasury bills, CDs, money market accounts, or even time deposit accounts at other banks.
The trustee had huge latitude in deciding where to invest these funds. According to ADFA’s standard contract the trustee was limited only by the stipulation that wherever the money was invested, it had to be guaranteed by the US government in some way. However, this stipulation was not always honored. There are records of a deal in which a trustee invested in Fuji Bank’s Grand Cayman Islands branch, a favorite depository of drug dealers.
Many of the beneficiaries of ADFA deals bore the aroma of Clinton’s inner circle. Among underwriters of the agency’s bond issues, Stephens Inc. featured prominently. The company’s chairman, Jackson Stephens, and his son Warren helped Clinton raise more than $100,000 for his 1992 campaign. In January of that year, the bank Stephens has a controlling interest in, Worthen National, extended to Clinton a $2 million line of credit. The name of the Worthen bank, represented by Hillary�
�s Rodham Clinton’s Rose Law firm on several occasions, appeared among institutions that have from time to time had liens on POM.
Another familiar name on the bond issues was the now-defunct Lasater and Co. Dan Lasater, who headed the company, is a long-time friend of Clinton and his brother, Roger. Both Roger Clinton and Lasater were convicted on cocaine charges.
Thus ADFA was at the center of financial dealings in which large amounts of money could be moved around easily and, it would seem, discreetly. Because ADFA was not subject to legislative oversight – being solely within the purview of the governor’s office – and because of the loose strictures upon the trustee bank, it also opened the gate for questionable, possibly illicit financial dealings. As IRS man Bill Duncan explained, theoretically, bonds could be issued to provide a loan to a company involved in laundering drug profits. That loan represented clean money. The loan could in turn be paid back with drug profits, slowly over time and in small increments. In this way drug money could be successfully filtered into the legitimate financial system. If the company in question did nothing more with the loan than redeposit it into its bank account, then the company had lost nothing but it had gained clean money. Thus, in effect, ADFA could serve as a washing machine – dirty money could be cleaned simply by passing through its system. Duncan suggested that it would also be possible for ADFA clients never to repay a loan and for the money simply to be circulated through the trustee’s investment end of the arrangement.
In the case of POM, records concerning the $2.75 million loan were curiously incomplete. One ADFA document stated that twenty-four jobs had been created; another cited total wages paid of $2.56 million. No repayment records for POM were available in 1992, when ADFA’s operations were under our scrutiny, though ADFA officials said that POM had paid off the loan in 1991, two years ahead of schedule.
The Mena story was going critical in the spring of 1992 amid Clinton’s bid for the Democratic nomination. The major networks were poised to do big probes. Then beneath the banner headline “Anatomy of a Smear,” Time took up the Mena saga in its April 15, 1992 issue. Time’s reporter, Richard Behar, took a full page to suggest that the story was all nonsense and that Governor Bill Clinton had been maligned.
Leaving aside for the moment the matter of Behar’s motives, Time’s story was ludicrous, claiming that all reports of Contra resupply and CIA activities in western Arkansas stemmed from allegations by Terry Reed, the former pilot, trainer of the Contras and associate of George Bush’s pal Félix Rodríguez. Reed, according to Behar, said that the drugs and arms “enterprise” in Mena was “personally supervised” by Clinton. Reed had never said that to anyone. In an extensive clip file on Mena, including many stories in the Arkansas press dating back to 1987, no trace of any such claim can be found, even in the form of dismissals of assertions too silly to be taken seriously.
But Time’s hit piece was successful. The networks abandoned the story in those important weeks. Later one of Time’s senior editors, Strobe Talbott, was appointed to a high-level post in the Clinton State Department. Talbott’s wife, Brooke Shearer, also landed a job in the administration.
The suppression of the Mena story did not end with the election of Bill Clinton. In 1994, while researching a book on Bill and Hillary Clinton, investigative reporter Roger Morris came across a mound of new information on Mena, including Barry Seal’s notebooks, tax filings and bank records. Morris was a former National Security Adviser to Richard Nixon who resigned his position in protest of the invasion of Cambodia. He went on to write a biography of Nixon, as well as trenchant books on Henry Kissinger and Alexander Haig.
To pursue the Mena story, Morris joined forces with another investigative reporter, Sally Denton. Denton was the author of The Bluegrass Conspiracy, a gripping account of political corruption and drug dealing in Kentucky. By the fall of 1994, Morris and Denton had amassed a 2,000-page file on Seal, Clinton and Mena. They wrote up part of the story and submitted it to the op-ed page of the New York Times. The story was swiftly rejected. When Morris asked the Times’s op-ed page editor, Michael Levitas, why the paper turned down the article, Levitas replied that this was a “Wall Street Journal kind of story.” Levitas also pointed out that the Times’s news staff had looked at Mena and declined to cover it.
So Morris and Denton took their piece to the Outlook section of the Washington Post, whose deputy editor, Jeffrey Frank, accepted the story, praising the authors for writing an explosive and extraordinary article. But the story ran into innumerable roadblocks. Over the next eleven weeks the article was edited, re-edited, fact-checked and reviewed by the Post’s legal team. Morris and Denton were subject to detailed questioning from Post reporters and editors from the news section. Finally, on January 25, 1995, the story seemed ready to go. The galleys were set, contracts were signed and the story was scheduled to run on Sunday, January 29, 1995.
As the Outlook section was headed to press, Jeffrey Frank called Morris, leaving a message on his answering message to the effect that the Post’s managing editor, Robert Kaiser, had killed the story. Morris called Kaiser for an explanation, but the Post editor refused to take his call. Kaiser’s secretary told the exasperated writer, “He doesn’t want to talk to you.”
Why did Kaiser kill the piece? Morris doesn’t know. But a former Washington Post staffer tells us that Walter Pincus, the paper’s long-time intelligence reporter, had dismissed the story as “garbage.” Editors at the Post had leaked the substance of Morris and Denton’s story to both the White House and the CIA, which furiously denied the story.
Eventually, Morris and Denton’s excellent article appeared in Penthouse magazine and hardly met with the explosive reception that such a story deserved. A similar fate awaited Morris’s book on the Clintons, Partners in Power, which was greeted by reviewers in the mainstream press with a mixture of indifference and hostility.
For his part, Bill Clinton has studiously avoided the subject, mentioning Mena in public only once since being elected president. His statement came in response to a question at an October 1994 press conference from the Associated Press White House correspondent, Helen Thomas, who asked the president what he knew about the use of Mena as an outpost for gun/drug runners associated with the Contra War. “They didn’t tell me anything about it,” Clinton said. “The state really had next to nothing to do with it. The local prosecutor did conduct an investigation based on what was in the jurisdiction of state law. The rest of it was under the jurisdiction of the United States attorneys who were appointed successively by previous administrations. We had nothing – zero – to do with it.”
But Clinton’s claim of ignorance didn’t ring true. One of his state prosecutors, Charles Black, brought the issue to Clinton’s attention in 1988, emphasizing its role as a nexus for international drug operations. Five years before that there was a federal investigation into drug money laundering at Mena – an investigation joined by Clinton’s own state police. As part of that investigation, a federal grand jury was assembled. This grand jury was eventually dismissed, and the local press carried reports that members of the panel had been prevented from seeing crucial evidence, hearing important witnesses and even seeing the 29-count draft indictment on money laundering drawn up by an attorney with the Justice Department’s Operation Greenback. In 1989 Clinton received petitions from Arkansas citizens demanding that he convene a state grand jury and continue the investigation. Winston Bryant made Mena an issue in his successful campaign for attorney general in 1990. A year later Bryant turned over the state files involving Mena, along with petitions from 1,000 citizens, to Iran/Contra prosecutor Lawrence Walsh. Later that year, on August 12, 1991, Clinton’s adviser on criminal justice wrote to a concerned citizen to say that Clinton understood the matter of criminal activity in Mena was being studied by Bryant, Walsh and Arkansas Representative Bill Alexander.
Yet with all this knowledge Clinton did nothing. The state attorney general did not have the power to conduct an investigation, bu
t the state prosecutors did. When Charles Black urged Clinton to allocate funds for such an investigation, Clinton refused his request. The Arkansas State Police were taken off the case and their files shredded.
Clinton’s protestations of ignorance on the matter also don’t square with the story told by a former Clinton friend and Arkansas state trooper L. D. Brown. Brown worked on Clinton’s security detail in the 1980s. He says that in 1984 Clinton encouraged the 29-year-old trooper to apply for a position with the CIA. Clinton, Brown claims, even helped prepare a writing sample to accompany his application to the intelligence agency. The paper was an analysis of Marxist movements in El Salvador and Nicaragua. Brown says the essay took a hard-line Reaganite approach and did not display any sympathy for the cause of the Sandinistas or the Salvadoran revolutionaries.
In a 1995 court case, Brown testified that he was contacted by the CIA in October 1984 and instructed to meet with Barry Seal at the Cajun Wharf restaurant outside Little Rock. At the meeting, Seal asked Brown to fly with him on a mission to Central America. Brown testified that he and Seal left Mena airport on October 23 in Seal’s C-123K transport, dropped cartons of M-16s over Contra base camps and landed for refueling at an airstrip in Honduras. There, Brown said, he saw Seal take on board more than a dozen duffel bags, which were kicked out of the plane over fields near Mena on the return flight. Brown later learned these bags were filled with cocaine.
After two more of these flights, Brown says he confronted Clinton about Seal’s operation. Clinton, Brown testified, didn’t seem surprised, telling the trooper, who was an admirer of George Bush, “Your hero Bush knows about it.” Of the cocaine coming into Mena, Brown testified that Clinton snapped, “That’s Lasater’s deal.” The reference appears to have been to long-time Clinton intimate Dan Lasater, the Little Rock–based bond magnate who was one of the governor’s biggest campaign contributors. Lasater had also been convicted of distributing cocaine and was suspected, according to Roger Morris’s account, of using his deals with ADFA to launder some of his drug profits.
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