Ugandan Plane Deal Believed Key to Israeli Spy Operation

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Ugandan Plane Deal Believed Key to Israeli Spy Operation

Postby admin » Wed Oct 04, 2017 9:42 pm

Ugandan Plane Deal Believed Key to Israeli Spy Operation
by The Washington Post
September 11, 1978

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A mysterious Israeli tycoon and the Mossad, Israeli's intelligence service, appear to have provided Idi Amin's Uganda Airlines with its two Boeing 707 jetliners as part of an Israeli effort to spy on Libya.

The planes, which fly cargo between Uganda and Europe, make refueling stops several times a week at the military airport at Benkhazi, Libya. These visits to Libya, according to a source in the intelligence community here, are at the heart of this peculiar affair.

Sources say that "navigators" who accompany the planes' regular crews file reports that are later shared among Israeli, British and U.S. intelligence.

The operation, according to intelligence sources, yields few if any secrets of value. The sources here also believe that nobody is fooling anybody in this affair.

But Idi Amin must be delighted with a cut-rate service that transports Ugandan coffee, officials and their mistresses to Europe and brings back whiskey, machine tools, live stock, and Mercedes Benz limousines.

Intelligence sources here suspect that Libyan leader Col. Muammar Quaddafi also likes the idea of knowing what planes spies will be arriving on. The sources assume that Qudadafis agents provide Libya's visitors with appropriate "disinformation."

But the big winner in this operation appears to be Shaul Eisenberg, the reclusive Israeli entrepreneur at its center.

The two used Boeing 707s - which together with a used Lockheed C-130 comprise Uganda Airlines - got to Amin through several of Eisenberg's 80 or so companies.

The chief Eisenberg firm in these deals was Aircraft Trading and Services Inc., or Atasco. Headquartered in Asia House, Eisenberg's luxury building in Tel Aviv, Atasco also has branches in the "Eisenberg Building" in New York and in London.

Atasco was put together in 1971 by executives of Israeli Aircraft Industries, a wholly owned subsidiary of the Israeli Defense Ministry that makes planes and missiles.

Eienberg got into Atasco as an equal partner with Israeli Aircraft for $500,000 in cash. After the 1973 Middle East War, Israeli Aircraft, staggered by scandals, sold its share in Atasco to Eisenberg, leaving him its sole owner.


The rest of Atasco's original capital, $5 million, came from the U.S. Export-Import Bank, which is supposed to make loans to promote American exports.

The Ex-Im Bank certainly found the right man in Eisenberg. He quickly turned into an eager customer for Pan American Airways' used Boeing 797s.

Atasco bought 12 or 15 of the advances series "C" 707s that Pan Am was selling and purchased six out of ten earlier series "C" 707s being sold by the airline.

At its Israeli hangars, currently jammed with 707s bearing obscure markings, Atasco remodels the interiors to suit customers and paints on their proud colors - Iran Air, Tarom of Romania, Uganda Airlines.

In May 1976, Atasco sold the 707 that was once Pan Am's "Clipper Jupiter" to a firm in Zurich, which dealt it on the Amin.

Intelligence sources say that the head of this Zurich firm is a 15-year veteran of Mossad, the Israeli intelligence agency, and the firm is an agency, and that the firm is an agency "laundry." It exists, these sources say, to pass on Mossad funds for deals in which the Israeli secret service is interested.


By the time somebody decided in 1977 that Uganda Airlines should double its 707 fleet, the Carter Administration had taken office and the State Department was examining all export licenses to see if the product might be used in the suppression of human rights.

Since it seemed unlikely the sale of another 707 to Uganda would be approved, Atasco sold the plane that once flew as Pan Am's "Clipper Undaunted" to something called Ronair Inc., which then leased the 707 to Uganda Airlines.

Ronair - three people and President Fred Solomon - by remarkable coincidence shares an office with Eisenberg's Atasco in the Eisenberg Building at 4 E. 39th St. in New York City. Nobody at Ronair would talk to the Washington Post.

Since Amin, when he seized power, killed most of Uganda's trained pilots, his airline was short of crews. So to fly his 707s, Amin - or his suppliers - turned to a U.S. firm, Aviation Technical Assistance and Service Co., or Avtec, of Burlington, Calif.

This firm, which supplies air crews, is said to have no formal intelligence links. Its president, John McEvoy, initially told a reporter who called on him at Avtec's London office, that he could not remember who had brought him the Uganda Airlines contract. Then he remembered it was the Swiss firm.

Under questioning, he finally acknowledged that "we're a subcontractor" of the Swiss firm.

McEvoy was also certain that his firm had no ties with Eisenberg's Atasco. However at least one pilot hired by Avtec to fly for Uganda Airlines recalls that his training on the 707 was held up for lack of a $15,000 payment. This pilot simply called Atasco in Tel Aviv to pay Avtec's debt and the money arrived promptly. McEvoy said he thought there had been some mistake.


While McEvoy's firm supplies the pilots, however, it does not supply Uganda Airlines with navigators. Indeed, pilots assert that none are needed on the Uganda Airlines planes.

However, several have been spotted by other air crews. Intelligence sources here say it is the "navigators" who do the looking when Ugandan planes call in Benghazi, Libya.

Whether they see anything worthwhile is doubted here.

One of the most fascinating figures in this whole afffair is Eisenberg, the Yaddish-speaking tycoon who never speaks with the press.

In Israel, much is known of him, however. He was born in Munich in 1926, somehow got to Japan and there married the daughter of an Austrian painter and his Japanese wife. Eisenberg is thought to have sat out the war years in Japan.

After the war, like several other fabled international operators, Eisenberg started his fortune by dealing in surplus weapons.
He prospered. His family multiplied. So did his corporate entities.

Today he boasts comfortable homes in Tokyo, London, Zurich and Savyon, a wealthy suburb of Tel Aviv. Four of his married daughters live in Israel. A fifth lives in a villa at Hampstead, London's version of Cleveland Park.

Eisenberg himself maintains an apartment there in a substantial building nearby. Two floors below him live his [son?] Erwin and Erwin's wife. The Hampstead Eisenbergs are as untalkative with a reporter as are those in Israel. Like Eisenberg's various aides, his family profess never to know where he is or when he will be back.

Eisenberg's business empire, which operates all over the globe, includes at least 70 concerns in one holding company alone, United Development Inc. Atasco is one of the United's subsidiaries.

Outside United's grasp is Eisenberg's Eisenberg Export Co., Bargad Trading Co., Asia House and others.

Eisenberg is clearly a persuasive man. He is the sole beneficiary of what in Israel is called "the Eisenberg law." It exempts from tax certain companies who do business abroad. So far, it fits only Eisenberg.

Israeli experts say that a contribution of 10 million Israeli pounds for a hospital in Jaffa helped create a favorable political climate for enactment of the law.

It is not clear what nationality he really is. One report says he carries an Austrian passport. But Eisenberg is obviously eager to keep close to Israel's power elite. He staffs his companies with high-ranking former officers, diplomats and the like.

At the Israeli Aircraft Industries hangar where Atasco work is done, Eisenberg is currently outfitting one of his 707s for his own use. It will serve as a flying office to keep him in touch with his business world, more or less coterminus with the planet.

A recent and vain call to Atasco's London offfice turned up the report that Eisenberg was in Hanoi, "negotiating a big deal."

He does not always take all branches of the Israeli government into his confidence. When the late finance minister, Pinhas Sapir, first learned of Eisenberg partnership with Israeli Aircraft in Atasco, Sapir remarked: "We were shown a bride who is slightly pregnant."

But Eisenberg obviously has a charm that overcomes resentment. It was Sapir who pushed through the "Eisenberg law."

There are frequent but unsubstantiated reports that Eisenberg operates mostly from Central America these days. Among other things, he is the Panamanian honorary general consul in Tel Aviv.

Like Eisenberg, the Mossad could not be reached for comment on this affair. Israel, like Britain, pretends its intelligence services does not exist.

As for the putative Mossad man in Zurich, his secretary said her boss was unreachable, "on a boat."
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Re: Ugandan Plane Deal Believed Key to Israeli Spy Operation

Postby admin » Thu Oct 05, 2017 2:20 am

The Case of the Flying Spies
by Murray Waas
The Nation
February 20, 1982
Approved for Release [cia.gov] 2011/08/17: CIA-RDP09S00048R000100020047-0

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Two weeks ago, the House Select Committee on Intelligence held hearings on the gunrunning operations of two former Central Intelligence Agency employees, Edwin Wilson and Frank Terpil. Although the case has raised questions about the C.I.A.’s complicity with the pair [see Waas, “The Terpil Transcripts,” and editorial, “The C.I.A. and the Rogue Agents,” The Nation, November 28, 1981], the committee focused on the agency’s internal investigations of the high-ranking intelligence officials who had business dealings with the two former agents. Now, previously undisclosed records in a legal action involving an aircraft company with suspected connections to the C.I.A. and Israeli intelligence throw new light on the Wilson-Terpil affair and the C.I.A.’s knowledge of it.

On April 8, 1980, the Securities and Exchange Commission quietly settled a two-year-old lawsuit against Page Airways, a Rochester, New York, firm. The commission had charged Page and its top executives with making more than $2.5 million in bribe payments and illegal currency transactions to officials of foreign governments in connection with overseas aircraft sales. In its announcement of the settlement, the S.E.C. said, “Nothing in the settlement constitutes evidence of or any admission with respect to the allegations of the commission’s complaint.”

Spokesmen for both the commission and Page Airways declined to comment at the time about why the lawsuit had been settled so suddenly. In its statement, however, the S.E.C. made a cryptic allusion to “concerns raised by another agency of the United States government regarding matters of national interest.”

Information to which I recently gained access points to the identity of that “concerned” government agency. It was the Central Intelligence Agency. The evidence suggests that the C.I.A. feared that if the case went to trial, a highly sensitive intelligence operation would be compromised. The court records do not specify the particular operation that had the agency worried, but they do show that Page had dealings with an Israeli intelligence agent. This agent has been identified as the mastermind of an operation directed against Libya’s Col. Muammar el-Qaddafi by the Mossad, an Israeli intelligence agency.

A few years ago, the Mossad pulled off a characteristically bold coup. Through Zimex Aviation, an aircraft firm it secretly owned in Zurich, it had sold the Libyan dictator an executive jet for his personal use. Under the sales agreement, Zimex provided flight crews and pilots, several of whom were Israeli agents, for the Grumman Gulfstream II. Eavesdropping devices were also planted aboard the plane, and these subsequently recorded Qaddafi’s conversations with his advisers and Arab leaders. From these conversations the Israelis learned of Qaddafi’s efforts to purchase atomic weapons and his fruitless attempts to gain possession of the eight C-130 transport planes that Libya had purchased from Lockheed and that the State Department had impounded.

These revelations about the Israelis’ spying mission and the settlement of the Page Airways lawsuit raise questions for the Congressional investigators in the Wilson-Terpil case. The C.I.A.’s review of its own handling of the affair concluded that there had been no misconduct by two high-level agency officials who had cooperated with Wilson and Terpil. But as I shall show, Terpil’s involvement with another Zimex-Mossad operation should have tipped off the C.I.A. to his arms transactions. Yet the agency took no action.

This brings up the question of whether Wilson and Terpil were acting in a secret capacity for the C.I.A. The agency has denied any ties with the pair, terming them “rogue agents.” It has said that it could not have been involved because the arms sales to Qaddafi were illegal. Yet Page Airways’ overseas bribery policies were also illegal, and the agency did not expose them, even though it was aware of them, and it did not hesitate to ask the Securities and Exchange Commission to quash its investigation.

Page Airways has admitted engaging in illegal operations overseas in the past. On June 4, 1979, it pleaded guilty to six violations of U.S. currency laws. The transactions involved the transfer of $46,647 to Uganda. Although the violations were technical and bribery was not charged, Page won the right to operate and service aircraft owned or leased by Idi Amin’s regime. Following Page’s guilty plea, the Justice Department terminated a Federal grand jury investigation of the firm’s overseas marketing and outfitting of Gulfstream II aircraft and its bribery of foreign government officials in regard to those sales.

Page Airways was founded in 1939 by James P. Wilmot and Elmer Page, a pilot. Born in Boston to a family of poor Irish immigrants, Wilmot became involved in Democratic Party politics and held a succession of government jobs before starting Page Airways. The fledgling corporation was awarded a Federal contract to train pilots for the Civilian Pilot Training Program, and in the years that followed, Wilmot continued to exhibit a knack for snaring government contracts. Page Airways and the Wilmorite Company, a Rochester, New York, construction firm started by Wilmot and now owned by his son, Thomas, have done more than $100 million in business with the Federal government. The two companies’ benefactors have included the Air Force, the Army Corps of Engineers, the General Services Administration and the Defense Department.

In its April 1978 suit, the Securities and Exchange Commission charged that Page Airways and its top officers had made more than $2.5 million in bribes and illegal currency transactions to foreign governments to promote its overseas aircraft sales and that Page had sold more than $15 million in goods and services to Idi Amin’s regime in Uganda without disclosing to its stockholders that it was doing so, as required by law. Considered an improper payment was a new Cadillac Eldorado that was presented to Amin. In depositions to the S.E.C., Page officials maintained that the Cadillac was unrelated to their business dealings with Uganda. In an interview with an investigator, a spokesman for Page denied that the automobile was intended as a gift. “Amin asked us to obtain a Cadillac for him,” he said. “We thought we were going to be reimbursed for it by him…. But we never got anything. We determined that it would not be in our best interests of the safety of our workers over there if we forced the issue” by demanding repayment.

Not long after Amin received the Cadillac, however, Wilmorite was awarded a $6 million contract to build a mansion in New York City that would be used as the Ugandan mission to the United Nations. According to a Page Airways internal memorandum dated April 5, 1976, a copy of which I obtained, Wilmorite also submitted proposals to Amin for building houses and high-rise apartments, rehabilitating a sugar plantation, a refinery and a steel mill, and developiong Uganda’s oil reserves. Through its dealings with Amin, Page maintained a $600,000 reserve fund, which was not entered in its books, “due to the uncertainty of doing business in Uganda.” Page’s accountants called the fund the “Big Daddy reserve.”

Charles Hanner, a former Page vice president, was the company official closest to Amin. At one point, Amin named Hanner “honorary counsel to Uganda.” But Hanner’s relationship with Amin might have gone beyond business and friendship. Asked under oath if he had ever provided information to the C.I.A., Hanner declined to answer, the court records show.

In all, Page and Wilmorite sold more than $22 million in goods and services to the Ugandan dictator, including two aircraft, a Gulfstream II and a Lockheed L-100-30. Page also provided flight crews and pilots for the planes and sold Amin $1.5 million in medical supplies in 1975.

In late 1979, Judah Best, a Washington, D.C. lawyer representing Page Airways, issued subpoenas to the C.I.A. and the State Department demanding all government records relating to Page Airways and its overseas bribery operations. Shortly after the subpoenas were issued, according to court records, S.E.C. officials initiated discussions with Best to settle the suit against Page. Court records also show that Hans Ziegler, the president of Zimex Aviation, was paid a commission by Page Airways on the sale of the first Gulfstream II to Amin. In 1978 Israeli sources identified Ziegler as a fifteen-year veteran of the Mossad. Zimex also sold and leased airplanes to a number of Arab leaders who were unaware of the ties between the company and Israeli intelligence.

Amin developed a yen for a private jet after flying in Qaddafi’s Gulfstream II. Ziegler learned of Amin’s interest from a member of the crew and passed on the information to Page, which immediately dispatched a team of executives to Kampala, Uganda’s capital. But they were unable to arrange a meeting with Amin. “They just sat around the swimming pool at the hotel for several days,” said one source familiar with the trip. “Amin didn’t meet with them for a while and when he finally did he told them it was because Ziegler had called him.”

After Ziegler had put in a good word for Page, the Ugandan dictator placed an order for a Gulfstream II. Thus the profitable relationship between Page Airways and Amin was begun. Ziegler received a sizable commission from Page for providing an introduction to Amin, according to records in the S.E.C. suit. Zimex had previously sold Amin a Boeing 707 and had leased him another in 1976. As it did with Qaddafi, Zimex provided flight crews which spied on Amin and gathered intelligence during stopovers in Libya. According to Civil Aeronautics Boards records, Zimex purchased the Boeing 707 from the Aircraft Trading and Services Company (ATASCO), headquartered in Tel Aviv. ATASCO’s president is Shaul Eisenberg, an Israeli mining and shipping magnate who has made millions of dollars setting up industrial consortiums in the Third World. Eisenberg has close ties with a number of high-level Israel officials. When his daughter Elise was married in 1969, The Jerusalem Post reported that among the guests were Golda Meir, Shimon Peres, Chaim Herzog, Yitzhak Rabin and two Cabinet ministers. ATASCO was formed in 1971 by executives of Israeli Aircraft Industries, which is owned by the Defense Ministry. The company was subsequently sold to Eisenberg.

In 1977, Zimex leased a second Boeing 707 to Amin in a complicated transaction in which ATASCO first sold the airplane to a New York City-based firm, Ronair. According to Federal Aviation Administration records, Ronair then leased the 707 to Zimex Aviation, which in turn leased it to Uganda Airways. An F.A.A. memorandum dated May 23, 1977, noted: “During the lease period the maintenance with be conducted by Pan American which has signed a maintenance agreement with Zimex. Under this maintenance agreement, Pan American will supply manpower and spares…. The aircrews were supplied under separate contract between Zimex and Avtec, Inc. of Burlingame, California.” (Spokesmen for both Avtec and Pan American said they were unaware that any espionage operations had been conducted by the crews they supplied.)

The 707s often picked up military supplies and luxury goods for Uganda at Stanstead Airport in Essex, England. Frequently to be seen supervising the loading of the airplanes was Frank Terpil, who, in August 1977, had signed a contract to supply the Amin regime with $3.2 million worth of arms, explosives and electronic surveillance equipment.

Although there is still no hard evidence that Terpil was involved in a covert C.I.A. operation directed at either Qaddafi or Amin, the members of the flight crews of the 707s Terpil held load were Israeli intelligence agents. Thus, both the C.I.A. and the Mossad must have known about Terpil’s dealings with Amin and Qaddafi more than five years ago. But they did nothing to stop them or to inform U.S. law enforcement officials. It was only when Kevin Mulcahy, a former C.I.A. analyst who went to work for Wilson and Terpil, blew the whistle on Terpil’s activities that the Justice Department began its investigation of the pair. And, I have learned, a deep-cover C.I.A. agent was a member of Amin’s inner circle and lived at the Presidential Palace in Kampala. The C.I.A. could also have learned about Terpil’s relationship with Amin from this source.

Page Airways had other intelligence connections besides those with Ziegler and Zimex Aviation. In 1975, Page subcontracted with Southern Air Transport, an American firm that was secretly owned by the C.I.A. until 1973, to provide flight crews and engineers for Page’s aircraft in Uganda. Although Southern’s link to the Ci.A.I. had been broken, former C.I.A. proprietaries often continue to perform services for the agency after their formal ties are discontinued. According to a report of the Senate Intelligence Committee: “In a very real sense, it is nearly impossible to evaluate whether a link still exists between the agency and a former asset related to a proprietary.”

According to records of the Civil Aeronautics Board, Southern Air Transport was sold by the C.I.A. in 1973 to Stanley G. Williams, a Florida businessman who was president and chief executive officer of the company while it was secretly owned by the agency. Sources familiar with the deal say that Southern was sold to Williams even though another buyer offered $2 million more than he did.

The deal was consummated after three airlines had filed complaints with the C.A.B. charging unfair competition by Southern. The C.I.A. withdrew the company’s C.A.B. certification and the complaints were dropped. With the C.A.B. no longer involved, the agency was free to sell Southern with no oversight. Williams was presumably grateful to the agency, since he had acquired the firm for far less than it was worth.

Although the possible intelligence roles played by Page Airways and Southern Air Transport in Uganda still remain unclear, the C.I.A. was active in that country while both companies were doing business there. At first, the C.I.A. maintained “a friendly liaison with Amin,” according to one agency official: “He allowed us to use his good offices to conduct our activities and to a small extent we helped him set up his own intelligence service.” The relationship later deteriorated, however, though not because the agency was offended by Amin’s murderous behavior. That had become apparent long before the C.I.A. terminated its arrangement with Amin in April or May 1972. From then on, according to intelligence sources, the C.I.A.’s mission in Uganda generally involved spying on Amin and his henchmen. The first sale that Page Airways made to Amin was in early 1975, long after the C.I.A. and the Mossad had begun spying on him.

While we cannot be certain that Page Airways engaged in intelligence operations for the Israelis or the C.I.A., the new evidence in the S.E.C. suit suggests that it did. There is always the possibility that Page and Ziegler and Eisenberg were solely after profits in their convoluted dealings with Qaddafi and Amin – certainly they made millions off them. But the C.I.A.’s intervention in the S.E.C. suit, coupled with the other pieces of evidence I have presented, strongly indicated that profit was not their only motive.

The participation of Frank Terpil – and presumably his partner, Edwin Wilson – in Page’s operations is also a possibility. The new evidence offered in this article gives further confirmation that the C.I.A. was aware of Terpil’s illicit operations not long after Kevin Mulcahy blew the whistle. Certainly, this is one more lead the House Select Committee on Intelligence should follow up.

Murray Waas is an investigative reporter who writes frequently on intelligence matters.
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Re: Ugandan Plane Deal Believed Key to Israeli Spy Operation

Postby admin » Thu Oct 05, 2017 2:31 am

Team of Ex-Green Berets Trained Terrorists for Libyan Government
by Philip Taubman
The following article is based on reporting by Philip Taubman and Jeff Gerth and was written by Mr. Taubman.
New York Times
August 26, 1981

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HONOLULU, Aug. 24— Four years ago, 10 men trained by the Army Special Forces to be America's elite commando troops went to work for the Government of Libya, training terrorists.

According to participants in the operation, and Federal investigators who have since tried to reconstruct the events, the men went to Libya with the knowledge and endorsement of the United States Army. They apparently believed that they were infiltrating the Libyan Government on behalf of the Central Intelligence Agency.

Nine were retired members of the Special Forces, better known as Green Berets. The 10th, who recruited the others for the mission, was a master sergeant in the Green Berets and was on active duty. He had been recruited by a former agent for the Central Intelligence Agency.

The belief of the 10 men that the mission was intended by the C.I.A. as an infiltration of the Government of Col. Muammar el-Qaddafi was apparently shared by ranking Green Beret officers.

Whether it was remains uncertain. The C.I.A. denies any involvement; many participants, and some Federal investigators, believe the mission had at least the tacit approval of the agency.

Its Organizer Is a Fugitive

What is certain, say the Federal investigators and the participants, is that the operation was organized, financed and directed by Edwin P. Wilson, a former Central Intelligence agent. In 1976, according to the investigators, Mr. Wilson closed a business deal with Colonel Qaddafi to sell his expertise in intelligence, arms and explosives to Libya for the training of terrorists.

Mr. Wilson was indicted in 1980 by a Federal grand jury on charges of illegally exporting explosives to Libya. He is now a fugitive, believed to be living in the Libyan city of Tripoli.

Mr. Wilson's use of Green Berets, like other aspects of his relationship with Libya, has generated problems for the United States Government and raised questions about the way Federal authorities handled the matter.

The Justice Department, after investigating the case and calling many of the Green Berets before a grand jury for questioning in July 1979, produced no indictments. One reason, investigators said, was the lack of any Federal law prohibiting the training of terrorists outside the United States by American citizens.

Slow to Accept Responsibility

The Army and the intelligence agency, investigators said, have been slow to accept responsibility for the activity of those who were employees or former employees when the operation began in 1977.

An informal Army review of the case, begun after the Justice Department started its investigation, ended inconclusively, according to Defense Department officials.

Lieut. Col. Harold Isaacson, a spokesman for the Special Forces, with headquarters at Fort Bragg, N.C., said that the involvement of former Green Berets in the Libyan operation, like the activities of former Green Berets in general, was not the responsibility of the Special Forces. Army officials said that inquiries had determined that the one active-duty officer involved, and the superiors who endorsed his role, had apparently acted in good faith, believing the mission was sanctioned by Central Intelligence.

William J. Casey, the Director of Central Intelligence, recently ordered a review of agency policies to guard against the transfer of information and technology by former agents to such countries as the Soviet Union and Libya. The review was prompted by the case of Mr. Wilson and Frank Terpil, another former agent, in which agency connections were used in getting the explosives to Libya illegally and in the training of terrorists there. Mr. Casey said the agency's general counsel was ''reviewing our contracts to develop additional protections against the kind of moonlighting and use of our contractors and technology which occurred in the Wilson-Terpil situation.''

Call to Fayetteville

The involvement of the Green Berets in the Libyan training operation began on July 21, 1977, when Luke F. Thompson, then a Special Forces master sergeant, received a phone call at his home in Fayetteville, N.C., from a man who identified himself as Patry Loomis. Mr. Thompson played a key role in numerous covert operations in Vietnam and Latin America in the 1960's and 1970's, according to intelligence officials.

According to Mr. Thompson, whose account was confirmed by other participants and Federal investigators, Mr. Loomis said he was calling from Washington.

''He asked if I could go abroad to discuss a contract,'' Mr. Thompson, now retired, recalled in an interview here yesterday. ''He said it involved big money and asked if I could get a hold of four or five other men with Special Forces specialties who were prepared to travel fast.''

Mr. Thompson conditionally accepted Mr. Loomis's offer. At the same time, he called military counterintelligence officials at Fort Bragg to report on the conversation. ''I thought it might be something subversive, you know, maybe a foreign power trying to lure us into something,'' he said.

Talked All Night, He Says

That evening two counterintelligence officials from Fort Bragg drove to Mr. Thompson's house and the three talked over the conversation that Mr. Thompson had had until early the following morning, Mr. Thompson said.

The next day, Mr. Loomis called again, this time to arrrange a meeting with Mr. Thompson and the men he was recruiting. They picked the Sheraton Motor Inn in Fayetteville. The time was to be the following day, July 23.

Mr. Thompson notified the counterintelligence officiers. ''They told me to keep cooperating,'' he said. On the day of the meeting, the counterintelligence officers called Mr. Thompson. He recalled: ''They said: 'We've checked this to the top and it's legal and aboveboard. You can pursue it as you desire.' '' Satisfied that he was dealing with a Government operation, he said, he went to the meeting.

Says He Was in Deep Cover

Mr. Loomis and a Washington lawyer, the account by Mr. Thompson continued, escorted Mr. Thompson and three recently retired Green Berets to his room. After turning up the volume on the television, according to Mr. Thompson, Mr. Loomis identified himself as a Central Intelligence agent. ''He said he was with the agency and had just recently come out of deep cover in Indonesia in the aircraft industry,'' Mr. Thompson said.

Mr. Loomis offered no details about the operation, saying that information would be provided outside the United States, but he did explain that the men would receive $4,500 a month, plus bonuses. He told them to fly to Washington several days later and he gave each man several $100 bills.

Investigators later determined that Mr. Loomis had approached Mr. Thompson shortly after being dismissed from the C.I.A. for helping Mr. Wilson obtain explosive timers for Libya.

After the meeting, Mr. Thompson said he again called the counterintelligence office at Fort Bragg. He told them of his plans to proceed to Washington and to go abroad from there. ''They said to go ahead,'' recalled Mr. Thompson.
Mr. Thompson requested, and was granted, a special leave by his commanding officer.

Reports They Went to Zurich

In Washington, on July 25, Mr. Thompson and three former Green Berets were given travel documents, $1,000 in cash, airplane tickets to Zurich via New York, and a description of a man who would meet them at the Zurich airport. ''We were told to stay in the international zone and not to go through customs in Zurich,'' Mr. Thompson said.

He added: ''We had our war bags packed in a 400-pound locker, everything we figured we might need for a direct action mission.'' The man waiting in Zurich was identified as Mr. Wilson. After introductions, Mr. Thompson ran through a list of questions he had prepared. ''As leader of the group, I wanted answers to several key questions,'' he said. ''I wanted to know who exactly we were working for, what the terms of our contract would be, what arrangements had been made for health care, and what escape and evasion plans had been prepared.''

According to Mr. Thompson, Mr. Wilson told the men they would be working for him. He did not elaborate. He also told them they would be going to Libya where they should make themselves ''indispensable.'' Mr. Thompson said that they assumed that Mr. Wilson's meant that through being indispensable they would gain intelligence information useful to the United States. Health care, if necessary, would be provided at the best hospitals in Europe, and insurance coverage for the men would be $250,000 for loss of life and $125,000 for loss of limb.

Contract Not Necessary

No contract was necessary, Mr. Wilson said, because neither party was likely to walk away from the project. ''If I welsh, you'd kill me,'' Mr. Thompson said that Mr. Wilson had asserted, ''and if you welsh, I'll kill you.''

Mr. Wilson was reported to have said the payment would be $6,500 per month, payable in any currency the men wanted. He also offered to set up Swiss bank accounts for the men, according to Federal investigators.

From Zurich, the four men flew to Tripoli, Mr. Thompson said, where they were greeted by a representative from the Delex International Corporation, a Virginia company owned by Mr. Wilson. They were escorted out of the airport without a customs check, the account continues, and taken to a military compound where they met the chief of Libyan intelligence, Abdul Senussi.

''He wanted to know if we could supply a gas that would subdue 800 men for several hours in a desert environment,'' Mr. Thompson said. ''We told him that there was no such agent. He then wanted to know all about the principles of land warfare, things like vertical envelopment and the elements of surprise.''

When the session ended, the former sergeant said, the Americans were driven to the Beach Hotel, where Douglas M. Schlacter, a friend and business associate of Mr. Wilson, told them to relax. Mr. Schlacter is under Federal investigation on charges of involvement in illegally exporting explosives to Libya. He is believed to be living in Africa.

They See Explosives Laboratory

About a week after their arrival in Tripoli, in the first week in August, Mr. Thompson said, the Americans were taken to a palace outside Tripoli where they were shown an explosives laboratory.

The investigators later determined that Mr. Wilson had hired another group of Americans with expertise in explosives and had taken them to Tripoli to manufacture terrorist bombs. The investigation of this operation led to the indictment of Mr. Wilson and two others last year.

After touring the explosives shop, Mr. Thompson said, he and and his colleagues were told to prepare a training course for Libyan commandos.

By this point, Mr. Thompson said, he was seriously concerned about the mission. ''I know the agency does bizarre things,'' he said, ''but working for Libyan intelligence was too much.''

He decided he must return to the United States and tell the Special Forces about his misgivings. Leaving his companions behind, Mr. Thompson returned. When he reached Fort Bragg, early in September, his superiors told him that the Federal Bureau of Investigation, having been notified by military intelligence, was investigating the Libyan operation. Mr. Thompson was told to cooperate with the investigation.


Requests for Supplies

While he was doing so, he said, several requests arrived from Tripoli for supplies. Mr. Thompson told the military intelligence authorities, he said, and was instructed to ship the requested goods, which included training manuals and combat boots. The materials went during September and October.

After this, Mr. Thompson said, ''I got a call from the guys I knew in counterintelligence. They told me it wasn't an Agency operation after all. At that point, I didn't know what the hell was happening.''

Mr. Thompson eventually severed his connections to Mr. Wilson, but a half-dozen other retired Green Berets went to Libya to train terrorists after his return to Fort Bragg. It is not clear what they thought the operation was supposed to be or whom they thought was sponsoring it. Federal investigators believe that several may still be in Libya working for Mr. Wilson.


A major unresolved question is how the counterintelligence officers at Fort Bragg decided that the mission was legitimate when Mr. Thompson first spoke to them.

Several Federal investigators said they believed that Mr. Wilson might have secured unofficial approval from friends who held senior positions in the clandestine services of Central Intelligence. In return, according to this unconfirmed theory, the agency would benefit from intelligence collected by the Americans working in Libya.

''Whatever happened, it's a sorry episode,'' one senior Justice Department official said. Mr. Thompson, for his part, says he lives on ''full alert,'' concerned that death threats he has received since he left Libya may become a reality.
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