When and if retired Air Force Maj. Gen. Richard V. Secord and businessman Albert Hakim stand trial on Iran-contra conspiracy charges, the public will see only the tip of an iceberg.
Secord and Hakim belong to a network – along with fellow Iran-contra figures Theodore Shackley and Thomas G. Clines – that has long operated in the intelligence and arms-trade netherworld, the gray zone between covert action and crime.
Despite occasional run-ins with the law, some quite scandalous, the network has shown a remarkable capacity to survive. It has not hurt to have friends in high places, and they had many such friends in the Reagan administration.
Before Reagan entered the Oval Office, Justice Department officials had targeted the network in one major investigation and had been asked by Australian authorities to cooperate in another.
But the network not only survived the Reagan years, it engineered and profited from the supply of arms to Iran and the contras. That was possible because the Justice Department conveniently narrowed the scope of its investigation.
Reviewing the sequence of events that led to those earlier Justice Department investigations will make clear how important it is that Second [sic] and Hakim – as well as Lt. Col. Oliver L. North – stand trial, if only for the latest in a series of shady operations.
In the late 1960s, CIA cover operations chief Shackley, his deputy Clines and Secord – on loan to the CIA from the Air Force – together ran the “secret” war in Laos. Clines also happened to be the case officer for CIA agent Edwin P. Wilson, who is now serving a long prison sentence for shipping explosives to Libya.
Back then Wilson was setting up commercial fronts for the CIA worldwide and, by turning the intelligence operations into profit-making enterprises, becoming a millionaire. After Shackley, Secord and Clines returned from Indochina, they were frequent guests at Wilson’s sprawling Virginia estate, along with senators, congressmen, generals and admirals.
At one point, Clines sold Secord real estate. When it turned out to be a bad investment, Wilson bailed Secord out. When Wilson’s employment was abruptly terminated in 1976 because of his preoccupation with personal profits, Shackley reportedly appealed, unsuccessfully to Wilson’s taskmaster.
Dealings with Iran
But with or without cover, Wilson continued to ply his trade, which in the mid-1970s centered on weapons trafficking in the Middle East. Through Frank Terpil, another ex-CIA employee who would be convicted of arms trafficking, Wilson was introduced to Albert Hakim, Secord’s future business partner. Hakim was making his first million selling American-made surveillance equipment to the arms-hungry, oil-rich, shah of Iran.
The shah was offered an expanding menu of gadgetry and arms by US corporations that, according to federal court documents, relied on middlemen such as Hakim to stuff the right pockets, and on the CIA and Pentagon representatives to authorize weapons transfers. In charge of the Air Force effort from 1975 to 1978 was Richard Secord, working directly under the chief of the Pentagon’s Military Assistance Advisory Group, Erich von Marbod.
The billions the shah spent, and the payoffs to and through the middlemen, made Tehran a breeding ground for corruption. Convinced the Pentagon representatives were in cahoots with the contractors, the shah asked Donald Rumsfeld, who was then defense secretary, to fire von Marbod, who had already been reprimanded by Rumfeld’s predecessor for spending weekends at a hunting lodge owned by the contractors.
The US ambassador to Iran, Richard Helms, a former director of the CIA, told one visitor, according to the Washington Post, that he had “never seen … so many people out of control in the Pentagon.” In July 1976, he asked the CIA director, George Bush, to send CIA officials to Iran to hear the corruption charges firsthand.
What Bush did is unclear. Rumsfeld chose not to fire von Marbod. And according to a memorandum unearthed during the Iran-contra investigation, Shackley, Bush’s covert operations chief, sought to recruit Hakim as a CIA source.
But by the time the 1970s drew to a close, enforcement authorities had zeroed in on the network.
The principal target was Wilson, whom Terpil had introduced to the influential Libyans. Wilson was indicted in April 1980 on charges he sold explosives to Col. Moammar Kadafy’s military, but Wilson remained a fugitive until his arrest two years later.
Wilson maintains his Libyan ventures were monitored by longtime case officer Thomas Clines, and Clines’ boss, Shackley. Neither Clines nor Shackley has ever admitted knowledge of deals like those for which Wilson was convicted. Richard Secord appeared as Wilson’s character witness. But Wilson was sentenced to 52 years behind bars.
Between his arrest and his conviction, Australian authories were feverishly investigating another of Wilson’s ventures, involving a mysterious bank that financed US intelligence operations including the subversion of the government of Australia, a close ally. In that effort, Wilson apparently took direct orders from Shackley.
The investigation began after the body of Australian Frank Nugan was discovered next to his rifle in his Mercedes, 100 miles outside of Sydney, and after the Sydney-based Nugan-Hand Bank collapsed. Nugan’s partner, former Green Beret Michael Hand, who served under Shackley in Indochina, has not been seen since. On Nugan’s body was the card of former CIA director William Colby, who performed legal services for the bank.
Australian officials were startled to discover that the bank’s president was retired Adm. Earl “Buddy” Yates, the former chief of staff for plans and policy of the US Pacific Command, and that one of its branch managers was Gen. Ed Black, the former Army chief of staff in the Pacific. They discovered the bank was a money laundry for drug traffickers, and that one branch, in the heart of Indochina’s heroin-producing Golden Triangle, was located in the same building as the US Drug Enforcement Administration.
If that were not enough, the Australians also heard testimony that the bank was used by Edwin Wilson, both to finance the shipment of arms to CIA-supported forces in Angola and to arrange payoffs for the destabilization of the administration of Australian Prime Minister Gough Whitlam, a troublesome critic of US policy in Vietnam.
When the Nugan-Hand Bank collapsed, according to the Australian investigation, Clines, by then no longer at the CIA, arranged the escape from Australia of the bank’s No. 3 man, Bernard Houghton. Houghton, according to “The Crimes of Patriots” by Wall Street Journal reporter Jonathan Kwitney, had been introduced to Clines by Richard Secord.
Clines and Rafael “Chi-Chi” Quintero – a CIA-trained assassination expert who later helped Secord and Clines run the Nicaraguan contra supply operation – reportedly went to Nugan Hand’s Geneva office to recover Houghton’s travel case. According to the official report of the Australian investigation, Clines said, after removing a document, “We’ve got to keep Dick’s name out of this” – which the Australians took to mean Richard Secord.
Australians were stonewalled
When the Australians requested the assistance of the CIA and the Justice department, they were stonewalled. In retrospect, it was not surprising despite the fact that the Justice Department in the early ‘80s was, like the Australians, hot on the trails of Secord, Shackley and Clines. But the three were too well-connected to the Reagan administration and its brewing Iran-contra operation. As a result, the Justice Department investigations were curtailed.
The Justice Department had been pursuing Wilson’s allegation that Shackley, Secord, Clines and von Marbod were his partners in a shady arms shipping venture.
In 1979, Wilson lent Clines $500,000 to start up Egyptian American Transport Services Inc. – a claim Clines does not deny. EATSCO was then awarded $71 million in federal funds to ship arms to Egypt, a contract approved by the Pentagon’s Erich von Marbod, Secord’s boss then as in Iran and Indochina earlier.
EATSCO was later charged with overbilling the Pentagon several million dollars. The company repaid $3 million and Clines, who had made a million dollars on the controversial contract, paid $110,000 in fines.
The more sinister angle is that Wilson insists Cline’s [sic] silent partners – in addition to himself – were Shackley, Secord and von Marbod, the last two of whom were still in government. All four vehemently deny Wilson’s claim.
Secord sent Clines a check for $30,000 just after Clines paid the fines, but Secord claims it covered an old loan. Still Secord was relieved of his Pentagon duties pending investigation of Wilson’s allegations. However, he was spared the insult of a Justice Department lie detector test, and reinstated, by Frank C. Carlucci, who was then assistant defense secretary and had been deputy director of the CIA. Carlucci is the outgoing secretary of defense.
As to Erich von Marbod, he retired in 1981 when the Justice Department targeted him. He was later hired as a $200,000-a-year consultant by Carlucci, who between Washington appointments had assumed the presidency of an affiliate of Sears, Roebuck and Co., Sears World Trade.
Recently, defense secretary Carlucci was part of a six-member panel of Reagan administration appointees that voted unanimously to withhold classified documents from Oliver North’s trial, compelling special prosecutor Lawrence E. Walsh to drop the major charges against him.
Besides Carlucci, the network had another friend in Michael Ledeen, a State Department terrorist consultant who in 1980 penned a scathing attack on Stansfield Turner, President Carter’s CIA chief, for forcing out Theodore Shackley for his Wilson ties. Ledeen also warned Lawrence Barcella, who was prosecuting the EATSCO case, that the overbilling might have financed a covert operation. Soon thereafter the Justice Department took Barcella off the case.
The covert operation Ledeen referred to was in all likelihood the fledgling Iran-contra affair. The Reaganites, particularly CIA director William Casey and his protege, National Security Council aide Oliver North, had little regard for conventional military and intelligence resources, and instead turned to Secord.
Secord had officially retired from the Air Force in 1983 with the exalted rank of deputy assistant secretary of defense to become a director of Hakim’s Stanford Technology Inc. Hired as a consultant to Stanford Technology was the retired CIA covert operations chief, Theodore Shackley.
Arms for Iran
In November 1984, Shackley met in Hamburg, West Germany, with the Iranian arms dealer, Manucher Ghorbanifar, who reportedly fabricated the 1981 story that Libyan hit men had entered the United States to assassinate President Reagan. Shackley’s friend Michael Ledeen, who by then had become a terrorism consultant to the National Security Council, later vouched for Ghorbanifar. The arms-for-hostages deals – which freed few hostage [sic] but earned millions in arms profits for Secord and Hakim – were on their way.
Secord was put in charge of the contra supply operation, for which he brought in his old friend Thomas Clines. According to Hakim, he, Secord and Clines were business partners on those deals.
Secord and Hakim’s “enterprise” made $22 million in profits by selling US arms to Iran. About $14 million was diverted to the contras and the remaining $8 million was apparently profit for Secord and Hakim. The diversion of the $14 million was the principal crime for which North, Secord and Hakim were charged. They were also charged with conspiracy to defraud the American taxpayers.
About $14 million was diverted to the contras and the remaining $8 million was apparently profit for Secord and Hakim. The diversion of the $14 million was the principal crime for which North, Secord and Hakim were charged. They were also charged with conspiracy to defraud the American taxpayers.
North, Casey and North’s bosses at the National Security Council, Col. Robert McFarlane and Rear Adm. John M. Poindexter, must have known that Shackley, Secord and Clines had been tainted by their connections with Edwin Wilson, connections that brought early retirement to all three.
All of this should also have been known to the joint congressional committees that investigated the Iran-contra affair. Committee members should have at least read the bestseller on the Wilson case, “Manhunt,” by Peter Maas, published the summer before the scandal broke. Maas later told US News and World Report that the committee “really flubbed it on the Secord-Clines thing … They were ill-prepared.”
At one point, in an angry letter to the publisher of “Manhunt,” Secord threatened to sue the author for libel, and labeled as a “malicious charge not supported by any evidence” Maas’ suggestion that the general had been involved with Wilson in dubious activities. But Maas, a thorough investigator, told the New York Times: “I’m not retracting anything. I have double and triple sources.”
More recently, an associate of Thomas Clines told me that Clines had confided that Secord was indeed his silent business partner in the EATSCO venture along with Shackley, who triggered the arms-for-hostages deal through his contract with Ghorbanifar, and Wilson and von Marbod, who played no apparent role in the Iran-contra affair.
The congressional Iran-contra committee never interrogated Clines, who refused to testify without immunity and was never granted it. Why Clines was not subpoenaed – and, unlike Secord and Hakim, was not indicted – are additional intriguing questions to bear in mind when and if the Iran-contra trials begin.
But we should have learned by now that justice inevitably loses out when the suspects are part of the government’s own shadow network. And in the end it is not surprising that North and Casey turned to the network to do their dirty work. But Congress still has to explain why, in its official investigation, it became an accomplice to the cover-up.