Sep 17, 1989

The Gander mystery: Question of sabotage lingers in 1985 crash killing US soldiers | by Jerry Meldon | The Boston Sunday Globe, September 17, 1989

 

Nearly four years after 248 American soldiers died in a fiery plane crash in Gander, Newfoundland, the cause of the disaster remains shrouded in mystery and controversy. Was wing icing the cause of the crash, as the much-disputed official story goes? Or was the chartered DC-8 sabotaged, before it took off in Cairo, by an Iran-backed terrorist organization that claimed credit for the tragedy two days later?

            And if it was sabotaged, was it an act of retaliation because the White House, in the course of its infamous arms-for-hostage dealings, had sold Iran a planeload of missiles it could not use?

            Because of these unanswered questions, the Dec. 12, 1985, crash continues to have political fallout in both Canada and the United States. In Canada, Liberal Party critics have charged the Conservative Mulroney government with a coverup, saying it has accepted the wing-icing theory at the behest of Washington. And in the United States, the families of the victims, frustrated with the lack of answers, have turned to Congress, where Rep Robin Tallon (D-S.C.) is trying to drum up support for an official inquiry.

            Tallon criticized what he called “the almost callous indifference shown by federal agencies that should have been involved in this investigation and should be responding to the families of 248 of our service personnel.”

            The official investigation into the cause of the crash was handled by the Canadian Aviation Safety Board, which split 5-4. The majority, in a report finally issued last December, found the probable cause was ice on the wings. The minority rejected the ice theory and complained that alternative scenarios – including sabotage – were superficially examined. The flight recorders, which had previously been disabled, provided no clues.

            A US Army team scoured the crash site and reportedly requested it be bulldozed (it was not). The FBI conducted its own inquiry, which remains largely classified. The results of these investigations remain a mystery.

 

            Flight originated in Cairo

 

            If the true cause of the crash is ever to be found, the search must begin in Cairo, where, on the night of Dec. 11, 1985, the 248 members of the 101st Airborne Division began the first leg of their long flight home for Christmas after 6 months of peacekeeping duty in the Sinai desert.

            According to an FBI interview with Capt. Arthur Schoppaul, who piloted the Arrow Air DC-8 from Cairo to Cologne, West Germany, security in Cairo was lax. Egyptian guards disappeared from their posts for an hour at a time, and a fight broke out among the baggage handlers. A power loss left the DC-8 in darkness for 30 minutes while its cargo doors remained open.

            Security in Cologne was hardly any better. When Capt. Schoppaul left the plane, he found a cargo door open, its light on and no guards posted outside the aircraft. Schoppaul was relieved in Cologne by Capt. John Griffin, who took off for Gander 90 minutes after the plane landed.

            The DC-8 arrived in Gander shortly after 5:30 a.m. local time, Dec. 12, following an uneventful flight across the Atlantic. Seventy minutes later, it headed down the runway on the final leg of its journey to Fort Campbell, Ky. It rose from the tarmac, but climbed only 60 feet off the ground before stalling as it crossed the Trans-Canada Highway. The plane struck treetops 25 seconds after takeoff.

            Much of the DC-8 was consumed in a fireball. The carnage was so gruesome that, according to a report issued in June by the Canadian health minister, rescue workers have since suffered from “post-traumatic stress disorder,” an array of psychosomatic symptoms more commonly associated with combat.

            The Canadian Aviation Safety Board held public hearings in April 1986. A draft report of the findings, along with the conclusion that wing icing was the likely cause, was presented to the 10-member board in early 1987.

            The icing theory so split the board that one member resigned in protest later that year, reducing its number to nine. The chairman resigned and was replaced. It was only at the end of last year that a 100-page final report, which supports the staff’s wing-icing theory, was issued by a five-member majority. A minority report was also issued and signed by the four dissenting members.

 

            Little evidence of icing

 

            The majority view places probable blame on the deceased Capt. Griffin, who did not order the wings de-iced. A sandpaperlike ice layer can increase a plane’s drag so that it is unable to take off. The CASB majority concluded that “the failure of the aircraft to accelerate following liftoff” and “its failure to achieve a sustained climb … exemplify the known effects of ice-contaminated wings.”

            However, the question remains whether there was any significant icing.

            The majority noted that there had been a small patch of ice on a corner of the copilot’s windshield, “which confirms that ice accumulated on the accident aircraft during its approach” to Gander, but “the precise amount, type, and location of any ice adhering to the surfaces during the takeoff could not be determined.”

            During part of the time the DC-8 was on the ground, slight freezing drizzle was observed. However, Gander ground crew members responsible for de-icing the DC-8 reported there was no evidence of any ice. Of four other planes that took off or landed around the same time of day, two were not de-iced. The captain of a Boeing 737 that landed shortly before the fatal takeoff reported no ice following an inspection.

            This spring, the conclusion that icing was responsible for the crash was dismissed because of insufficient evidence after a review by Transport Canada, the equivalent to the Federal Aviation Administration. Then in July, William Estley, a retired Canadian Supreme Court justice, completed a “judicial review” and found the CASB unjustified in its use of the term “probable cause” in reference to ice.

            The same month, Harold F. Marthinsen, director of the Accident Investigation Department of the US Air Line Pilots Association, wrote a critical letter to the Canadian safety board’s director. Marthinsen charged that data used in a computer simulation, which had persuaded CASB staff that the flight path reflected wing icing, were “simply manufactured” from an arbitrary reading of accelerometer data.

            If icing was not the cause, then what was? In a recent phone conversation, retired Canadian Air Force Brig. Gen. Roger LaCroix, who is the CASB member who resigned in protest, posed the prospect of an engine-related problem. He expressed the view that “there was a catastrophic failure of a system, such as number four thrust reversal. I suspect that this was brought about either by fire or an explosion.”

            The CASB minority, which LaCroix would have joined, complained that investigators paid little attention to such possibilities and concentrated on building its case for icing.

            Remarkably, autopsy reports revealing elevated blood cyanide levels in some of the crash victims became known to the CASB only after the Canadian press uncovered them. Inhalation of cyanide indicates onboard fire. Its presence in the blood of even decapitated victims suggests a fire prior to the crash. Minority member Les Filotas, an aeronautical engineer, noted in a phone interview that the draft report he saw in 1987 neglected to mention such medical evidence.

            In fact, witnesses, including an airport car-rental agent and two truck drivers whose vehicles were nearly struck by the DC-8, reported seeing the plane on fire prior to impact. And the truck drivers claimed there was no engine noise.

            Indications of fire or sabotage should have been especially alarming in light of phone calls from purported members of the Islamic Jihad claiming responsibility for the disaster. After all, the Tehran-supported group had already been connected to numerous terrorist acts, including suicide bombings of US embassies in Lebanon and Kuwait, and of the US Marine Corps barracks in Beirut, as well as the hijacking of a TWA 747 and the kidnapping and murder of American hostages.

            Nonetheless, the Islamic Jihad’s claim of responsibility was rejected outright by Washington and the CASB staff.

            Intriguingly, a possible explanation for such reluctance to acknowledge the possibility of terrorism is that the DC-8 went down during a particularly sensitive period in the arms-for-hostage dealings with Iran.

            That fall, the National Security Council arranged the first shipment of Hawk missiles from Israel to Iran. On Nov. 24, 1985, eighteen missiles arrived in Tehran. However, the recipients discovered that the misssiles [sic], contrary to what they had been promised, could shoot down neither Soviet reconnaissance planes no Iraqi bombers. The Iranians were livid.

            When George Shultz and Caspar Weinberger argued against more shipments, Oliver North argued forcefully in favor. In a stark Dec. 4, 1985, message to national security adviser Adm. John Poindexter, North warned about the fate of the hostages: “None of us have any illusion about the cast of characters we are dealing with on the other side … If we do not at least make one more try at this point, we stand a good chance of condemning some or all to death and a renewed wave of Islamic Jihad terrorism.”

            Five days later, North added:

            “US reversal now in midstream could ignite Iranian fire – hostages would be our minimum losses.”

            Three days later, disaster struck in Gander.

 

            Link appears a tenuous one

 

            While it is tempting to connect the crash to the breakdown in negotiations with Iran, the likelihood of such a link is small, at least according to Gary Sick, the NSC’s Iran specialist from 1976 to 1981 and the author of “All Fall Down: America’s Tragic Encounter with Iran.”

            Sick noted in a recent conversation that when Pan Am Flight 103 went down last December over Lockerbie, Scotland, five months had elapsed since the presumed provocation – the shooting down of an Iranian airliner by a missile fired from the USS Vincennes. He finds it improbable that a similar bombing, in this case of a military charter, could have been arranged in considerably less time.

            Thus, despite the ample opportunity to sabotage the DC-8 in Cairo or Cologne, terrorism remains a long-shot explanation, and the search for a more plausible one goes on.

            The CASB’s Les Filotas says he would like to see his board officially disown the icing theory. However, he will encounter resistance from the members of the original majority.

            Meanwhile, the case remains agonizingly open for the victims’ families. Asked recently when she foresaw putting the death of her son behind her, Zona Phillips, cofounder of Families for the Truth about Gander, replied, “This is one plane crash that is just not going to go away. We’ve got to have some questions answered before we can put this matter to rest.”

 

 


 

Jul 21, 1989

A laissez-faire legacy: the rape and plunder at Reagan’s HUD | by Jerry Meldon | The Boston Phoenix, July 21, 1989

 

In May 1987 Paul Adams, inspector general of the Department of Housing and Urban Development (HUD), estimated up to $844 million could be saved if Washington refinanced HUD-subsidized home mortgages, at the time locked into interest rates as high as 17.5 percent. Reagan-administration officials rejected the proposal – leaving the Treasury owing banks $5 million extra each month – and justified their decision by pointing to a refinancing cost, which HUD analysts later estimated at one-twenty-fifth the size of the ultimate savings.

            The real reason behind the decision, of course, was concern that the windfall would be used to nourish the low-income housing program the administration was trying to kill. According to the Wall Street Journal, “Senior officials feared that any money saved would be plowed back into the subsidy program, which the Reagan administration wanted to pare back.”

·         One year earlier, the Journal reports, Walter Sevier, deputy administrator of HUD’s Fort Worth, Texas, regional office, had complained to his superiors about underwriting abuses – including inflated home appraisals – in the $5 billion multi-family “co-insurance” program, through which HUD assumes 81 percent of claim costs and private insurers the remaining 19 percent in cases of mortgage defaults. The losses from the program Sevier was referring to are now estimated to total more than $1 billion.

·         Wherever HUD inspectors look, they are stunned by impropriety and ineptitude. Auditors recently determined that fraud, loose management, and economic downturns have reduced the reserve account of HUD’s Federal Housing Administration fund – insurer of 5.5 million mortgages totaling $275 billion – to $2.8 billion. And current HUD Secretary Jack Kemp says 94 percent of HUD’s funds are similarly mismanaged.

***

For the first four years of the Reagan Revolution, then HUD secretary Samuel Pierce did as he was told and slashed funding for low-income housing, reversing HUD’s mandate – set when it was created in 1965 as part of Lyndon Johnson’s “Great Society” – to provide housing for the poor.

A Manhattan attorney who has served earlier Republican administrations in assorted capacities, Pierce cut the housing budget by two-thirds, raised the income percentage paid by subsidized low-income renters from 25 percent to 30 percent, and eliminated a quarter of HUD’s staff, including a slew of auditors who might have salvaged the fraud-plagued co-insurance program.

For the second four Reagan years, Pierce and his aides made rich men of developers whose poorly rated projects were touted by high-priced Republican “consultants.”

The Reagan team had hit Washington vowing to eliminate waste in social welfare. It ended by elevating waste to creed. If Iran-contra was the fruit of the New Right’s cold-war dialectic and its contempt for the democratic process, then the plundering of HUD was its domestic counterpart.

The bill for HUD’s blunders cannot match the Reagan administration’s masterpiece, the $125-billion-to-$150-billion savings-and-loan bailout. But the Republican insiders who sold developers access to HUD brass were clearly major-league influence peddlers.

Those whose names won them lucrative consulting contracts include former secretary of the Interior James Watt, who made more than $400,000, and former Massachusetts senator Ed Brooke, who earned $150,000. Their clients were developers with projects regional HUD offices had deemed unfundable. When a Watt or a Brooke phoned Pierce or one of his aides, local administrators were overruled and projects were quickly bankrolled. Once lauded by conservatives as “the unsung hero of the Reagan Revolution,” Pierce bears primary responsibility for a monumental betrayal of public trust.

Pierce’s failures alone, however, would not have been so catastrophic without numerous accomplices, including politically appointed aides who ignored early warnings of the fraud and mismanagement riddling HUD’s mortgage-insurance programs. But perhaps the most insidious contributor to the agency’s disintegration was old-fashioned venality, repackaged as the modern-day consulting/public relations/lobbying firm.

When Ronald Reagan vowed ours would again be a land of opportunity, the opportunists at PR firms were listening. On the inside track was the Washington-based consulting firm of Black, Manafort, Stone and Kelly, which advised presidential aspirants Reagan, George Bush, and Kemp, and whose ex-partner Lee Atwater parlayed Willie Horton and the Pledge of Allegiance into a presidency for Bush and the Republican National Committee chairmanship into a position for himself.

After helping to mastermind both Reagan-Bush campaigns, BMS&K was hot. Offering access to Republican officeholders, the firm won six-figure lobbying contracts to polish the image of the Philippines’ Marcos and the Bahamas’ drug-tainted Pindling administrations.

But BMS&K’s balance sheet really took off when it caught a whiff of HUD’s carcass.

In 1986, according to published reports, BMS&K partner Paul Manafort, another top campaign strategist for George Bush, met with Sam Pierce’s top aide, Deborah Gore Dean, and former HUD official Laurance Gay, who was by then on the BMS&K payroll. The subject was a 326-unit low-income housing development in Seabrook, New Jersey, which local officials had rejected as wasteful and unnecessary. Within a week, HUD overruled the locals and awarded $31 million in federal subsidies to the project’s developer, CFM Corporation, which proceeded to pay BMS&K $1000 for each of the 326 apartments. Although not an unusual move for HUD, this time the cronyism was particularly incestuous. A one-third interest in CFM Corporation is held by none other than Paul Manafort.

Manafort’s friend Deborah Dean emerges as the Oliver North of HUD. Although she graduated 507th in a Georgetown University class of 509, Dean rapidly made up for her academic performance with pedigree. Her father was chairman of the Atomic Energy Commission, her mother the paramour of Nixon attorney general John Mitchell, and her uncle a Maryland gubernatorial candidate.

Mitchell, who died in November, had served 20 months for Watergate crimes. But despite the jail time, his influence had remained intact. Before passing away, Mitchell landed Deborah Dean on the federal express track.

By age 34, Dean was Pierce’s right-hand woman. He even recommended her for assistant secretary of HUD. But Pierce’s opinion of Deborah Dean took a 180-degree turn when he was called to testify before the House Government Operations Committee, chaired by Congressman Tom Lantos (D-California), which began investigating HUD in April. If Pierce is now to be believed, Republican insiders had charmed Dean, and not himself, into shoveling millions in HUD low-income housing funds to developers, one of whom paid former attorney general Mitchell $75,000 for consulting services.

When Dean was called before the Committee, she took the Fifth. And like former lieutenant colonel North, she wants immunity before she testifies. As for Sam Pierce, contrary to reputation, he did more than trim his budget, accumulate frequent-flier miles, and watch soap operas.

As first reported by the Journal, in 1985 Pierce and his aides funded a multi-million-dollar project in Durham, North Carolina, that had been pushed by Durham mayor Charles Markham, one of Pierce’s former colleagues at a New York law firm. Besides cronyism, the Durham affair is a showcase for the revolving door between government and private industry.

Pierce had told federal housing commissioner Shirley Wiseman he wanted the project funded, notwithstanding concerns that the proposed site was next to active train tracks and was used to store sulfuric acid and cyanide. Over Wiseman’s objections, HUD awarded the developer, Myerson/Allen & Company, of Boston, a $2.3 million urban development grant and $11.5 million in rent subsidies. Wiseman resigned in protest.

The project’s principal advocates were Markham, himself a HUD official in the Nixon administration, and Louis Kitchin, a top adviser to the Reagan-Bush campaigns, who earned $25,000 for helping Myerson/Allen. Their supporters at HUD included Deborah Dean and Assistant Secretary Alfred Moran.

Moran went into private legal practice in 1986 with fellow former HUD official Lynda Murphy, who then happened to be bond counsel for Myerson/Allen for the Durham project; she was also a close friend of Deborah Dean. Furthermore, prior to leaving HUD, the Journal reports, Moran had signed off on a unique policy waiver that allowed Myerson/Allen to add HUD rent subsidies to its own cash flow in establishing its equity base. Without the waiver, the Boston developer would not have qualified for HUD funding because of insufficient capital reserves.

The toxic chemicals were dealt with similarly. This time the rule waiver was authorized by Janet Hale, who now claims Deborah Dean pressured her into signing on Hale’s first day as Shirley Wiseman’s successor. Morton Myerson, spouse of Massachusetts State Representative Eleanor Myerson (D-Brookline), told the Phoenix that since his retirement in 1985 from Myerson/Allen, the company has been fully owned by his former partner, John Allen. Myerson, who says he currently has no financial interest in the Durham project, added that in his extensive dealings with HUD over a 25-year period, its leadership during the Reagan administration was “easily the most corrupt and worst I ever encountered.”

Because of the discrepancies between his testimony and that of Wiseman and Hale, Pierce is being recalled by Lantos’s committee. Under oath, Pierce is likely to be asked the following.

·         Why Island Park, Long Island, the 97 percent white hometown of Senator Alphonse D’Amato, a fellow New York Republican, received six times its just share of community-development funds while Pierce was running HUD.

·         Why those who purchased HUD-subsidized Island Park homes for $40,000 to $45,000 include D’Amato’s cousin and the son of Geraldine McGann, a village board member named regional HUD administrator after lobbying by D’Amato.

·         Why minority families with incomes under the stated $30,000 limit were denied access to the same homes, one of which has been resold for $270,000.

·         Why, after meeting with then DRG, Inc., legal counsel Carla Hills, Ford-administration HUD secretary and currently the US trade representative, Pierce waived restrictions on mortgages HUD could co-insure with DRG, a Washington insurance firm, imposed because of past DRG abuses. Those transgressions have since multiplied and now are estimated to have cost the co-insurance program several hundred million in mortgage defaults.

·         Why, as the New York Times reports, a Waterbury, Connecticut, developer who paid BMS&K $47,000 to help secure federal rent subsidies was told by a BMS&K housing consultant that the money went to the Republican National Committee “for funds to elect the president.”

Conjuring up Watergate visions may seem far-fetched, but the comparison is lent credence by one former HUD official’s claim that Deborah Dean was ordered to steer contracts toward BMS&K as a payoff for its role in Republican presidential campaigns.

But like the scene when the light goes on in a roach-infested kitchen, the HUD scandal offers more than anything else a unique glimpse of the Reagan Revolution in action.  The tragedy of it is that the taxpayers are footing the bill, and that HUD was plundered while homelessness became an American institution.