Friday, March 31
FAX COVER SHEET
From: Jack Rawly
To: Ron Lamb
Subj.: Further newspaper clippings, as promised
Secret Airline Control Scheme Unravels
Indictments Prepared As Dutch and American Officials Press Investigations
(Washington, D.C.—Special to the Times) Pan American Airways, Inc., filed numerous federal lawsuits here this morning against a long list of defendants, including the principal lenders and the lessors of their air fleet, seeking damages that could theoretically run as high as $3 billion. The massive civil action charges the defendants with various acts of sabotage and criminal conspiracy designed to bring about the destruction of the year-old airline through purposeful financial interference and direct criminal acts against its aircraft and computer systems. The Pan Am move comes amid a burgeoning investigation of a giant Dutch multinational corporation, Van Zanten and Vetter, Ltd., which is suspected of illicitly and secretly trying to buy into and manipulate the North American airline market.
Van Zanten and Vetter, also known as VZV, is a two-hundred-year-old icon among Dutch trading firms which has historically enjoyed a reputation of unshakable honesty and incorruptibility. But that bastion of Dutch integrity stands accused this morning of having secretly designed and carried out a plan to circumvent U.S. laws that limit foreign investment in airlines. VZV, investigators allege, secretly purchased controlling interest in the three largest airlines in North America through “dummy” holding corporations set up for just that purpose. While there has been no reaction from VZV officials, the government of the Netherlands is said to be in an uproar as a result of the charges, with a major investigation of its own under way.
Tangled Web of Sabotage
Pan Am’s general counsel, Mr. Jack Rawly of Seattle, Washington, held a media briefing yesterday in New York in which he used a series of charts to trace the Byzantine web of alliances and transactions which Pan Am believes resulted, among other things, in the following:
The March 8 bombing of a Pan Am Boeing 747 on a Seattle-Tokyo flight.
The March 14 sabotage of a computer system aboard a Pan Am Boeing 767, which led to an unprecedented engine-out landing on a frozen lake above the Arctic Circle.
The attempted firebombing on March 27 of Pan Am’s inaugural round-the-world flight.
A highly effective scheme involving a network of banks and investors which led Pan Am to sell and lease back their aircraft and replace their critical revolving credit line, moves which made them dependent on the very corporate institution that was working to shut them down.
A massive and worldwide campaign to discourage financial institutions from lending money to Pan Am.
According to Mr. Rawly and court documents filed by Pan Am, the scheme went so far as to “plant” an insider in a high position at Pan Am to oversee an internal sabotage campaign that included tips of artificially created safety problems reported to the FAA, “dirty tricks” misprogramming of baggage and reservations computers, and the hiring of a professional terrorist. The vice-president of operations, Mr. Chad Jennings, the corporate officer allegedly responsible for the inside portion of the campaign, has been arrested and charged with numerous criminal violations, but is said to be cooperating with federal authorities. More arrests are pending within the United States and the Netherlands in a dragnet that is expected to result in indictments against several high-level financiers.
The Missing BCCI Link?
In addition to the likelihood of multinational criminal actions against VZV for its circumvention of U.S. laws, and its alleged commissioning of a sabotage campaign against Pan Am designed to stifle the growing threat of their competitive influence, there is a growing belief in Washington that VZV may have been the destination for several billion dollars in stolen funds from the bankrupt Bank of Credit and Commerce International. BCCI, the criminal enterprise disguised as a bank that for twenty years managed to stay in operation through bribery, was unmasked and shut down in 1990, but in the aftermath of the scandalous revelations of its operations, investigators for several governments were never able to uncover the repository of staggering amounts of missing funds.
Now, perhaps they have. A highly placed administration source speaking on condition of anonymity says that information being provided to the FBI and the Justice Department by a recently dismissed former employee of VZV validates the theory that when BCCI was shut down, VZV quietly and effectively picked up not only missing BCCI funds, but new deposits from Iraq, the Gulf Emirates, and other sources, which could include Iran. These funds were apparently invested in a brilliant long-range scheme to construct effective monopolies in various transportation markets around the world, and North America was to have been the crown jewel in that clandestine crown.
The Motive was Monopoly
Pan Am’s Mr. Rawly explained the motivation for the attack on his airline as simple greed on a staggering international scale. While he was quick to say that none of the three major U.S.-based air carriers nor their executive teams had any knowledge of outside influence or criminal activity, the three dominant airlines were being subtly guided by directors representing the dummy corporations to disengage increasingly in city-pair markets where they compete. At the same time, similar quiet movement toward higher and higher domestic fares and lower operating costs were being urged. As a consequence, profits had been rising concurrently. As Mr. Rawly put it, “The big three have learned to make themselves very lean in terms of operating expense. They run cattle-car interiors now, with high-density seating, minimal food service, minimal salaries and benefits for their people, and tight control over every penny spent on the passenger. Wherever those economies have diminished service, we attacked them wholesale, which is why passengers have flocked to Pan Am.” Indeed, Pan Am has successfully attacked its far larger cousins with revolutionary concepts in cabin seating, airborne compartments, and many different service innovations. “In a nutshell,” says Mr. Rawly, “Pan Am was threatening the increasingly profitable status quo, and the offshore interests who had invested billions in order to cash in on this monopoly saw the ugly head of competition looming in the near future. If they could stamp out Pan Am, they could stamp out that competition. That’s what they tried to do illicitly, and that’s what our various legal actions will prove.”
Changing Fortunes
For Pan Am, the turnaround could not have been more dramatic. Just one week ago, it faced financial disaster, with its $500-million revolving credit line canceled, a payment demand of $140 million it couldn’t raise, and the threat of being handed a declaration of default by its lenders—an act that would have triggered repossession of its entire fleet and an instant termination of service. All this followed a month of bad publicity for FAA safety violations, two near disasters in which heroic action by experienced Pan Am flight crews resulted in safe recoveries of both aircraft with no loss of life or injury, and various embarrassing episodes of lost bags, canceled reservations, canceled flights, and crashing public confidence.
In the blink of an eye—with the revelation of the alleged sabotage campaign—all that has changed. With a much-advertised and heralded resumption on March 27 of the famous round-the-world service abandoned some years back by the then-failing original Pan American World Airways, Pan Am’s fortunes are soaring again. Chief Financial Officer Elizabeth Sterling sums it up this way: “Our load factors are astronomical, the public knows we’ve got the best pilots, the best aircraft, and the best product, we’re motivated, and we’ve got new credit lines and the ability to retire our debt in record time. As a financial officer, I couldn’t be happier.”
Ms. Sterling adds that the freezing of any requirement to repay over $400 million in debt while litigation proceeds against Van Zanten and Vetter, Ltd., and others, will certainly assist Pan Am in continuing the growth and profitability that has astounded many observers on Wall Street.
Monday, April 3
Former
Airline Chief Charged
(Washington, D.C.) The expanding Pan Am sabotage investigation has resulted in criminal charges against one of America’s best-known corporate raiders and former airline chiefs. Nicolas Costas of Denver, Colorado, the former chairman and mastermind behind the expansion and eventual destruction of one of the nation’s oldest air carriers, Columbia Airlines, has been charged by federal prosecutors in Washington with numerous counts of criminal conspiracy, attempted murder, theft, securities and monetary violations, and many additional counts. The move, according to sources in the Justice Department, is merely the beginning of what is expected to be a hurricane of civil and criminal legal actions marking the collapse of a scheme to exert illicit foreign control over North American airlines.
Mr. Costas, described after the collapse of Columbia Air as “the most hated man in America” for his vitriolic attitude toward airline unions, was said to be out of the country. The charges will be presented to a grand jury within the next few days.
Wednesday, April 12
UPI—(Miami) BULLETIN
Fugitive financier Nicolas Costas, former chairman of defunct Columbia Airline Systems, was arrested early this morning by federal drug agents after attempting to leave the United States in his private jet. Costas was forced down by Air Force fighters after his aircraft blundered through restricted airspace near Hurlburt Air Force Base, Florida.
ACKNOWLEDGMENTS
The research for this novel cut a wide swath from Hong Kong through London, Amsterdam, Inverness, New York, Vancouver, and many American cities, as fellow airline people, financiers, government representatives, and those from a host of other professions unselfishly helped in a thousand ways, and I thank them all.
There are some people, however, whose contributions were particularly indispensable and appreciated:
My many friends and acquaintances with the Boeing Company, whose superlative products I have flown and trusted for thirty years;
Clark Stahl, pilot of KIRO-TV’s Chopper-7, who was brave enough to give this fixed-wing pilot some stick time in his Jet Ranger in order to validate Eric Knox’s flying technique;
Charlie Gibson, co-host of ABC’s “Good Morning America,” who helped impose some economic discipline on the model of my resurrected Pan Am;
My executive assistant, Patricia Davenport (to whom this book is dedicated), and to my wife, Bunny, for their invaluable editing throughout the project;
My editor at Crown, Jim Wade, for his steady hand, sage advice, and periodic citation of Ockham’s Razor;
… and,
My literary agents, George Wieser and Olga Wieser of New York.
About the Author
John J. Nance is the author of thirteen novels whose suspenseful storylines and authentic aviation details have led Publishers Weekly to call him the “king of the modern-day aviation thriller.” Two of his novels, Pandora’s Clock and Medusa’s Child, were made into television miniseries. He is well known to television viewers as the aviation analyst for ABC News. As a decorated air force pilot who served in Vietnam and Operation Desert Storm and a veteran commercial airline pilot, he has logged over fourteen thousand hours of flight time and piloted a wide variety of jet, turboprop, and private aircraft. Nance is also a licensed attorney and the author of seven nonfiction books, including On Shaky Ground: America’s Earthquake Alert and Why Hospitals Should Fly, which, in 2009, won the American College of Healthcare Executives James A. Hamilton Award for book of the year. Visit him online at www.johnnanceassociates.com
All rights reserved, including without limitation the right to reproduce this ebook or any portion thereof in any form or by any means, whether electronic or mechanical, now known or hereinafter invented, without the express written permission of the publisher.
This is a work of fiction. Names, characters, places, events, and incidents either are the product of the author’s imagination or are used fictitiously. Any resemblance to actual persons, living or dead, businesses, companies, events, or locales is entirely coincidental.
Copyright © 1994 by John J. Nance
Cover design by Andy Ross
ISBN: 978-1-5040-2793-9
This edition published in 2016 by Open Road Integrated Media, Inc.
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Phoenix Rising Page 44