The Rapeutation of William Duncan, IRS Investigator

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The Rapeutation of William Duncan, IRS Investigator

Postby admin » Fri May 20, 2016 6:00 am

The Rapeutation of William Duncan, IRS Investigator
from "The Mena Coverup"

by Micah Morrison
Wall Street Journal
October 18, 1994
Updated: March 3, 1999

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MENA, Ark. -- What do Bill Clinton and Oliver North have in common, along with the Arkansas State Police and the Central Intelligence Agency? All probably wish they had never heard of Mena.

President Clinton was asked at his Oct. 7 press conference about Mena, a small town and airport in the wilds of Western Arkansas. Sarah McClendon, a longtime Washington curmudgeon renowned for her off-the-wall questions, wove a query around the charge that a base in Mena was "set up by Oliver North and the CIA" in the 1980s and used to "bring in planeload after planeload of cocaine" for sale in the U.S., with the profits then used to buy weapons for the Contras. Was he told as Arkansas governor? she asked.

"No," the president replied, "they didn't tell me anything about it." The alleged events "were primarily a matter for federal jurisdiction. 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."


It was Mr. Clinton's lengthiest remark on the murky affair since it surfaced nearly a decade ago, in the middle of his long tenure as governor of Arkansas. And while the president may be correct to suggest that Mena is an even bigger problem for previous Republican administrations, he was wrong on just about every other count. The state of Arkansas had plenty to do with Mena, and Mr. Clinton left many unanswered questions behind when he moved to Washington.

Anyone who thinks that Mena is not serious should speak to William Duncan, a former Internal Revenue Service investigator who, together with Arkansas State Police Investigator Russell Welch, has fought a bitter 10-year battle to bring the matter to light. They pinned their hopes on nine separate state and federal probes. All failed.

"The Mena investigations were never supposed to see the light of day," says Mr. Duncan, now an investigator with the Medicaid Fraud Division of the office of Arkansas Attorney General Winston Bryant. "Investigations were interfered with and covered up, and the justice system was subverted."


The mysteries of Mena, detailed on this page on June 29, center on the activities of a drug-smuggler-turned-informant named Adler Berriman "Barry" Seal. Mr. Seal began operating at Mena Intermountain Regional Airport in 1981. At the height of his career, according to Mr. Welch, Mr. Seal was importing as much as 1,000 pounds of cocaine a month.

By 1984, Mr. Seal was an informant for the Drug Enforcement Agency and flew at least one sting operation to Nicaragua for the CIA, a mission known to have drawn the attention of Mr. North. By 1986, Mr. Seal was dead, gunned down by Colombian hitmen in Baton Rouge, La. Eight months after Mr. Seal's murder, his cargo plane, which had been based at Mena, was shot down over Nicaragua with Eugene Hasenfus and a load of Contra supplies aboard.

According to Mr. Duncan and others, Mr. Clinton's allies in state government worked to suppress Mena investigations. In 1990, for example, when Mr. Bryant made Mena an issue in the race for attorney general, Clinton aide Betsey Wright warned the candidate "to stay away" from the issue, according to a CBS Evening News investigative report. Ms. Wright denies the report. Yet once in office, and after a few feints in the direction of an investigation, Mr. Bryant stopped looking into Mena.

Documents obtained by the Journal show that as Gov. Clinton's quest for the presidency gathered steam in 1992, his Arkansas allies took increasing interest in Mena. Marie Miller, then director of the Medicaid Fraud Division, wrote in an April 1992 memo to her files that she told Mr. Duncan of the attorney general's "wish to sever any ties to the Mena matter because of the implication that the AG might be investigating the governor's connection." The memo says the instructions were pursuant to a conversation with Mr. Bryant's chief deputy, Royce Griffin. In an interview, Mr. Duncan said Mr. Griffin put him under "intense pressure" regarding Mena.

Another memo, from Mr. Duncan to several high-ranking members of the attorney general's staff in March 1992, notes that Mr. Duncan was instructed "to remove all files concerning the Mena investigation from the attorney general's office." At the time, several Arkansas newspapers were known to be preparing Freedom of Information Act requests aimed at Gov. Clinton's administration.


A spokesman for Mr. Bryant, Lawrence Graves, said yesterday that he was not aware of the missing files or of pressure exerted on Mr. Duncan. In Arkansas, Mr. Graves said, the attorney general "does not have authority" to pursue criminal cases.

From February to May 1992, Mr. Duncan was involved in a series of meetings aimed at deciding how to use a $25,000 federal grant obtained by then-Rep. Bill Alexander for the Mena investigation. In a November 1991 letter to Arkansas State Police Commander Tommy Goodwin, Mr. Alexander urged that, at the current "critical stage" in the Mena investigation, the money be used to briefly assign Mr. Duncan to the Arkansas State Police to pursue the case full time with State Police Investigator Welch and to prepare "a steady flow of information" for Iran-Contra prosecutor Lawrence Walsh, who had received some Mena files from Mr. Bryant.

According to Mr. Duncan's notes on the meetings, Mr. Clinton's aides closely tracked the negotiations over what to do with the money. Mr. Duncan says a May 7, 1992, meeting with Col. Goodwin was interrupted by a phone call from the governor, though he does not know what was discussed. The grant, however, was never used. Col. Goodwin told CBS that the money was returned "because we didn't have anything to spend it on."


In 1988, local authorities suffered a similar setback after Charles Black, a Mena-area prosecutor, approached Gov. Clinton with a request for funds for a Mena investigation. "He said he would get on it and would get a man back to me," Mr. Black told CBS. "I never heard back."

In 1990, Mr. Duncan informed Col. Goodwin about Clinton supporter Dan Lasater, who had been convicted of drug charges. "I told Tommy Goodwin that I'd received allegations of a Lasater connection to Mena," Mr. Duncan said.

The charge, that Barry Seal had used Mr. Lasater's bond business to launder drug money, was raised by a man named Terry Reed. Mr. Reed and journalist John Cummings recently published a book -- "Compromised: Clinton, Bush and the CIA" -- charging that Mr. Clinton, Mr. North and others engaged in a massive conspiracy to smuggle cocaine, export weapons and launder money. While much of the book rests on slim evidence and already published sources, the Lasater-Seal connection is new. (Thomas Mars, Mr. Lasater's attorney, said yesterday that his client "has never had a connection" with Mr. Seal.) But when Mr. Duncan tried to check out the allegations, his probe went nowhere, stalled from lack of funds and bureaucratic hostility.

Not all of the hostility came from the state level. When Messrs. Duncan and Welch built a money-laundering case in 1985 against Mr. Seal's associates, the U.S. Attorneys in the case "directly interfered with the process," Mr. Duncan said. "Subpoenas were not issued, witnesses were discredited, interviews with witnesses were interrupted, and the wrong charges were brought before the grand jury."

One grand jury member was so outraged by the prosecutors' actions that she broke the grand-jury secrecy covenant. Not only had the case been blatantly mishandled, she later told a congressional investigator, but many jurors felt "there was some type of government intervention," according to a transcript of the statement obtained by the Journal. "Something is being covered up."

In 1987, Mr. Duncan was asked to testify before a House subcommittee on crime. Two days before his testimony, he says, IRS attorneys working with the U.S. Attorney for Western Arkansas reinterpreted Rule 6(e), the grand-jury secrecy law, forcing the exclusion of much of Mr. Duncan's planned testimony and evidence. Mr. Duncan also charges that a senior IRS attorney tried to force him to commit perjury by directing him to say he had no knowledge of a claim by Mr. Seal that a large bribe had been paid to Attorney General Edwin Meese. Mr. Duncan says he didn't make much of the drug dealer's claim, but did know about it; he refused to lie to Congress.

Mr. Duncan, distressed by the IRS's handling of Mena, resigned in 1989. Meanwhile, the affair was sputtering through four federal forums, including a General Accounting Office probe derailed by the National Security Council. At one particularly low point, Mr. Duncan, then briefly a Mena investigator for a House subcommittee, was arrested on Capitol Hill on a bogus weapons charge that was held over his head for nine months, then dismissed. His prized career in law enforcement in ruins, he found his way back to Arkansas and began to pick up the pieces.


Mr. Duncan does not consider President Clinton a political enemy. Indeed, he feels close to the president -- a fellow Arkansan who shares the same birthday -- and thinks Mena may turn out to be far more troublesome for GOP figures such as Mr. North than any Arkansas players.

These days, Mr. Duncan struggles to keep hope alive. "I'm just a simple Arkansan who takes patriotism very seriously," he says. "We are losing confidence in our system. But I still believe that somewhere, somehow, there is some committee or institution that can issue subpoenas, get on the money trail, find out what happened and restore a bit of faith in the system."
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Re: The Rapeutation of William Duncan, IRS Investigator

Postby admin » Fri May 20, 2016 7:51 am

Excerpt from "Arkansas Connections"
by Sam Smith

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Arkansas State Police investigator Russell Welch, who has been working with IRS investigator Bill Duncan on drug running and money laundering at Mena, develops pneumonia-like symptoms. The Washington Weekly later described the incident: "On the weekend of September 21, 1991, Arkansas State Police Investigator Russell Welch met with IRS Investigator Bill Duncan to write a report on their investigation of Mena drug smuggling and money laundering and send it to Iran-Contra prosecutor Lawrence Walsh. Returning to Mena on Sunday, Welch told his wife that he didn't feel too well. He thought he had gotten the flu . . . In Fort Smith a team of doctors were waiting. Dr. Calleton had called them twice while Welch was in transport and they had been in contact with the CDC. Later the doctor would tell Welch's wife that he was on the edge of death. He would not have made it through the night had he not been in the hospital. He was having fever seizures by now. A couple of days after Welch had been admitted to St. Edwards Mercy Hospital, his doctor was wheeling him to one of the labs for testing when she asked him if he was doing anything at work that was particularly dangerous. He told her that he had been a cop for about 15 years and that danger was probably inherent with the job description. She told Welch that they believed he had anthrax. She said the anthrax was the military kind that is used as an agent of biological warfare and that it was induced. Somebody had deliberately infected him. She added that they had many more tests to run but they had already started treating him for anthrax."

While in Washington, D.C., where he holds a permit to carry a gun, IRS agent Bill Duncan is arrested for weapons possession (his service revolver), roughed up and handcuffed to a pipe in the basement of a DC police station. After the incident he is taken off of the Mena investigation. Later, when he was asked to falsify testimony for a federal grand jury, he refuses and is fired on the spot.
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Re: The Rapeutation of William Duncan, IRS Investigator

Postby admin » Fri May 27, 2016 7:12 am

Excerpt from "Compromised: Clinton, Bush and the CIA: How the Presidency was Co-opted by the CIA"
by Terry Reed & John Cummings

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Even though, as Seal had told Terry, a lot of local people had been given "government subsidies" not to report anything strange they might see, there were some sightings reported nonetheless. For example, Arkansas State Police Investigator Russell Welch said that civilians in the area had sighted a platoon-sized group of camouflaged men crossing the Ouachita River east of Nella "as if they were on a mission."

One local game warden revealed to one of the authors that he had been told to "just keep going" when confronted in the area by two heavily-armed men with a "military bearing." Another was warned away by someone who claimed to be an FBI agent and who exhibited federal credentials.

Another such witness was Bill Duncan, a former Internal Revenue Service Agent who had been sent to Mena to investigate the massive amounts of cash the Agency was inadvertently transfusing into the area's banks. His target had become Rich Mountain Aviation, which he did not know had become a CIA proprietary. During his stay in Mena there, residents told him and other investigators of "numerous reports of automatic weapons fire" in the Nella area, and locals seeing "people in camouflage in the middle of the night, low intensity landing lights around the Nella airport, twin-engine airplane traffic in and about the Nella airport ..." Duncan said these reports came from "a variety of law enforcement sources."

And there was increased activity within the hangars of Rich Mountain Aviation at the Mena Airport as well. A secretary at Rich Mountain, Cathy Corrigan, told Duncan that employees were often "forced to stay inside their offices because airplanes would land and strange faces would be around. Folks of Spanish origin would be around that they had not seen before.

In a previously sealed and "classified" transcript of sworn testimony given by Duncan for the purpose of getting Independent Prosecutor Lawrence Walsh's office to investigate the Agency's activities at Mena, Duncan described "great secrecy surrounding the entire operation at Rich Mountain Aviation" in Mena. Duncan testified in his June, 1991, deposition given to the Arkansas Attorney General that there were "airplanes landing in the middle of the night, hangar doors opening, the airplanes going in, then leaving out before daylight ... numerous, dozens and dozens of accounts like that."

***

Bill Clinton had been pacified, and subdued -- for the time being at least. With this distraction behind him, Robert Johnson was anxious to get on to the new business. But there was still a lot of old business -- loose ends -- to be dealt with.

Akihide Sawahata wanted to make sure that Johnson grasped the significance of the overall money problems. Even though the federal prosecutors in Arkansas had "gotten religion," as Johnson had put it, and had been brought into line, the tenacity of some of the field investigators had been underestimated. They were refusing to be stonewalled. They really had religion and they refused to shut their eyes to what was happening.

"With Governor Clinton gone, Mr. Johnson, I would like to express concern about some loose money ends right here in Arkansas," Sawahata said. "Some unfinished business concerning 'Rose' and 'Bridge'. We have overzealous IRS-CID agent taking his job too serious. He is still pressing for indictments on money-laundering in the Mena area, and also pressing the U.S. Attorney to seek indictments against our assets at Rich Mountain Aviation and the local banker. He just won't back off!"

Sawahata was referring to Bill Duncan, an IRS investigator who had been sent to Mena after the Drug Enforcement Administration tipped the IRS about what appeared to them to be massive laundering of drug profits there. As usual in government, no one was really in charge and the right hand apparently did not know what the left hand was doing. Or did it?

Duncan did find evidence of money laundering involving officials of Rich Mountain, the fixed base operation at the Mena airport that Barry Seal had been running as a CIA front company. Try as Duncan would, however, the federal prosecutor was refusing to present the case properly to a grand jury sitting in Ft. Smith, Ark. [1]

Duncan would later say that his investigation was probably just a diversion, and that what he was really doing, without realizing it at the time, was protecting the Mena operations. The CIA, by helping to place him there and feeding Duncan what they wanted him to know, could watch and oversee what he was doing and be assured that his activities would preempt any other investigations.

They apparently and mistakenly thought Duncan's behavior would be predictable. That he would confine his evidence to within the law enforcement and federal judicial system. But he didn't. Now, through frustration, he was allowing his close associates to leak information to the media about the inexplicable stonewalling he was encountering with the prosecutor. Duncan felt he and other investigators had been put in harm's way. That was a correct assumption. He had been assigned, without his knowledge, to investigate an Agency black ops program that was employing Cuban exile criminal elements who were conducting political assassination training. At the same time, the operation carried with it a high-profile drug cover that could have easily produced a shootout between law enforcement agents unknown to each other.

The worst part, Duncan now says, was being kept in the dark. "If they had told me to stop, I would have," he told one of this book's authors. "But all I heard was 'sic 'em Fido.'"

This was nothing new. It's an old Agency technique to manipulate other federal agencies without them knowing they were being manipulated. It's what they do best. This is what Johnson had meant when he said "We fed them what we wanted to feed them, when we wanted to feed them; it was our restaurant and our menu."

The American public is led to believe that this is done only outside American territory because the CIA, by law, can only conduct operations on foreign soil. But in Arkansas, the Agency was applying their usual banana republic tactics on their own citizens. But Duncan still had to be contained. He was like a fly annoyingly buzzing around an elephant's ear.

And they thought they had a strategy for this. "Does this guy have a boss?" John Cathey asked. "Go tell his boss to have him back off. Tell the boss 'national security' and all that good stuff ... a high level federal matter."

Sawahata answered back. "Yes, boss' name is Paul Whitmore and his office is right here in Little Rock. Problem is we have contacted him already. He also determined to expose money laundering which he thinks is from drug proceeds."

"Jesus Christ!" Cathey said. "Just what we need. A couple of dumb-ass GS types out to get promoted. What's the field agent's name?

"Bill Duncan," Sawahata replied. "And his friend Russell Welch, an ASP (Arkansas State Police) officer are nirvana-bent on exposing all this. I'm afraid with Seal now gone, their attention will now focus on these other people and apply pressure until someone breaks."

Cathey decided it was something he would have to handle personally when he returned to Washington.

"I'll call Revell and see if they can't fix it," he said. *

Sawahata wanted to know what Cathey was planning.

"We'll toss 'em a bone," Cathey replied. "Maybe we'll have them promoted and transferred out of the field, at least the IRS guys, that is. The ASP officer? That's another story. You'd better contact Colonel Goodwin and have him sit on this guy. Maybe our FBI agent over there can help with that."

Cathey was referring to Col. Tommy Goodwin, the director of the state police. Welch was the resident state police investigator in Polk County where Mena is situated.

Whatever Cathey did back in Washington, coupled with the containment by the U.S. attorney in Ft. Smith, it worked. Duncan and Welch were testaments to that. Regardless of reams of incriminating evidence, no arrests or prosecutions ever resulted from the countless man hours spent investigating Mena.

Duncan later testified on June 21, 1991 that he had lined up 20 prospective witnesses and the U.S. Attorney called only three before the grand jury. Two of these witnesses, Duncan said, were inexplicably not allowed to furnish any evidence to the grand jury. [3]

One was a vice president of the Union Bank of Mena, who, Duncan said, had conducted a search of the bank's records and provided "a significant amount of evidence relating to the money-laundering transactions ... he [the banker] also was furious that he was not allowed to provide the evidence that he wanted to the grand jury."

Duncan said that the deputy grand jury foreman subsequently told him that the jurors "were not allowed to hear" the evidence. The juror also told Duncan that the U.S. Attorney J. Michael Fitzhugh refused the Jury's request to bring Agent Duncan in to testify, telling them Duncan was in Washington "which was not the truth."

When Duncan complained about Fitzhugh's actions to his superiors, including local IRS CID (Criminal Investigation Division) chief Paul Whitmore, Whitmore went to Fitzhugh to check on the allegations. Fitzhugh eventually wrote Whitmore telling him not to come to his office complaining, saying that it was "unprofessional behavior."

Whitmore called the entire matter "a cover-up." No indictments were ever returned and, to this day, no one connected with the Mena operation has been charged with a crime -- a testament to the CIA's long-standing efforts to pervert the justice system. And so the government-sanctioned cover-up goes on.

Welch, of the Arkansas State Police, later also provided further corroboration about the cover-up. In a sworn oral deposition given the Arkansas Attorney-General's Office on June 21,1991, he said that two FBI agents, Floyd Hayes and Tom Ross, came to him sometime in 1987 to discuss Mena. They told him that a CIA source of their's at the Hot Springs airport had received a phone call from the CIA in Miami saying the Agency had "something going on at the Mena airport involving Southern Air Transport" and the Agency didn't want the FBI "to screw it up like (they) had the last one." [4]

The "last one" was an obvious reference to the Nella operation, giving an outsider the definite impression that the FBI was involved in the overall security program for the Agency's operations. It was, after all, an FBI Special Agent that Terry had seen Seal hand a parcel to outside the Mena airport the previous fall when Seal went to "slop the hogs."

FBI agent Ross even showed Welch a classified FBI inter-office message to prove to him officially that an ongoing CIA operation would be in jeopardy of being compromised if Welch continued investigating.

Welch told author John Cummings that Ross now denies ever having had this conversation or showing Welch the secret FBI telex divulging CIA activity at Mena. Author Terry Reed has obtained under court discovery the secret FBI telex Ross had in his possession when he was cautioning Welch not to compromise the operation. (See chapter end.)

The message dated August 18, 1987, clearly outlines the government's concern about pending media exposure of not only the airport, but refers to Barry Seal as a "CIA operative." [5]

Duncan also revealed that Ross became his shadow during the IRS investigation. "Ross ... would suddenly appear on the scene," Duncan said, whenever he was about to conduct a critical interview. [6]

Sawahata shifted to money problems. "What about bribe money?" he asked. The others stared at him with confused looks on their faces.

"You mean the stuff that ended up in EM's personal account?" Cathey queried.

Johnson, by now totally confused, asked both to "cut out the code talk" and spell out to him what they were saying.

"Well, Bob, this is a little embarrassing," Cathey acknowledged. "It seems that Barry Seal, God rest his soul, had a very unique trait of being able to compromise damned near everyone he came into contact with. I attribute it to good intelligence training, but he had this knack of paying people 'commissions' as he liked to call them. And during his period in Arkansas, I guess he bribed ... uh ... paid commissions to damned near everyone over there."

Cathey noted that this normally wouldn't have been a problem since intelligence operations are built on bribing all kinds of people. "In fact, as you know, that's right out of the agent's handbook, Bribes 101."

But Seal, he said, was doing something different and quite unorthodox. He was paying bills and bribing people with dirty money. Seal wasn't laundering the money before using it for bribes and this left an embarrassing trail that Duncan was following. Sort of like the stones that led Hansel and Gretel out of the forest.

Cathey said one source of Seal's dirty money came from the DEA, part of which had been confiscated in drug raids in Florida and used to operate Rich Mountain and procure what he called "aviation services" for the Agency.

"He was using this dirty, or marked money if you will, to buy influence from high-ranking officials," Cathey said. "We don't know if Seal was just having fun or if we were setting some of our people up. But anyway his activities were putting this IRS agent, Duncan, on a very compromising and embarrassing trail."

Where does this trail lead?" Johnson asked in a slow, deliberate tone after listening with rapt attention. He seemed almost fearful of the answer.

Somberly, Cathey replied: "Oh right to Ed Meese's personal bank account as well as to several FBI, DEA, FAA and Customs officials."

Because he uncovered this alleged bribe concerning Attorney General Meese, Duncan invoked the wrath of his IRS superiors in Washington. Duncan testified at a Congressional hearing in 1989 that the IRS wanted him to perjure himself before another Congressional committee if they asked him about his knowledge of any Meese payment.7 Duncan resigned from the IRS in 1989 because he did not want to be part of an organization that wanted him to lie under oath.

Duncan confided to author John Cummings that a confidential source of Welch's told him that Seal bragged on several occasions about bribing Meese with sums of money running into the hundreds of thousands of dollars. Meese's identity was revealed in closed session testimony Duncan gave before the House Subcommittee on Crime in 1988.

"Goddam," Johnson snapped as he referred back to Seal. "Seal's still gonna have the last laugh in this if we're not careful. It wasn't enough for him to get the governor's brother addicted and bring down half the Arkansas elite in a drug investigation. Shit! What was wrong with this guy? He bought off the Attorney General? What the hell for?"

"We thought maybe you could answer that," Cathey said to Johnson. "But it seems Barry had a death wish. That only makes about four federal agencies, a governor, an attorney-general, at least two foreign governments, the Medellin Cartel and 50 or 60 individuals that had motive to kill him."

Terry could understand the confusion in the minds of Cathey and Johnson as he sat and listened. He had seen first hand the complexity of Seal's thought process and behavior. Seal had been through too many handlers, too many objectives and, clearly, had an agenda of his own. If these were the people investigating Seal's motives and his death, it was clear they had no simple answers. What confused Terry was why Seal would purposely bring attention to a successful covert operation? The men sitting with Terry in the bunker wanted the program to be a success. Was Barry being controlled, not just by these men, but by the Republican Party and the Bush family as well? He recalled Barry's conversation about transporting "some stuff" through Mena and into Arkansas that would "end up in the noses of some very prominent Democrats." Was it possible the Vice President of the United States would jeopardize a CIA operation just to retaliate for his own family's behavior and "dirty up some Democrats?"

Terry knew now why the Arkansas operation was being shut down. It was out of control. There had been too many cooks and the chef took the secret ingredients to his grave. There was no other way to say it: The recipe was now fucked up!

Representative Bill McCollum (R-Florida) would later write a new epitaph for Seal. Referring to the knowledge he gained during Congressional hearings on Seal's death, McCollum would say: "Barry Seal was a tough informant to handle, and he would have become even tougher. In short, the DEA had a monster on its hands."

Terry spoke for the first time. "I'm glad you brought this up, John," he said to Cathey. "This Seal killing really bothers me. People having motive is one thing, but opportunity and means are two others. I'm not buying this Colombian hitman story. I grew to know Barry quite well during Rose and Bridge and something still doesn't fit. From what I've read and been told, Seal was under some sort of house arrest when he was killed. Can you explain that for me?"

Cathey answered: "It was part of his ongoing cover. He was placed there (in a Louisiana halfway house) by a pissed off do-gooder judge who hadn't gotten the word from our guys. We were in the process of getting him out of there without blowing his cover when he was hit. You know the rest. Like the papers say ... some Colombian hitmen. We guess Seal must have been trafficking on the side. He certainly had opportunity, and he must have crossed someone down there. We're still checking it out."

Cathey was lying, but Terry had no reason at the time to suspect otherwise. He did not know at the time that Cathey was really Oliver North, and it was North who helped leak the information about Seal to the media, and blew Seal's cover. So Cathey could not honestly answer, fearful that Terry would see that agents are expendable under the right circumstances.

"But what about those photos on television that President Reagan was showing?" Terry asked, referring to what he had seen on TV. "Wasn't that The Fat Lady the photos were taken from?"

On March 16th, a little less than a month after Seal was murdered, Reagan went on television and revealed the secret photographs taken by Seal showing Cartel officials helping load drugs aboard Seal's plane, a military C-123 called The Fat Lady, which had been outfitted with cameras by the CIA. Seal was given no credit and was never mentioned by the President despite his undercover activities conducted at great peril.

"Yes," Cathey said, responding to Terry's question about the plane. "But you've got to keep in mind Seal had a multi-mission, if you will. His drug cover gave him the ability to move around freely in several areas for us. It's very unfortunate, but someone at DEA or the White House level made the decision to use the photo, or they just plain old fucked up. I suspect that Reagan didn't even know what he was doing that day. That guy's scary. Just wind him up, give him some props, point him towards a teleprompter and it's action on the set. You know what I mean. If it wasn't for Bush and Casey and guys like Johnson here, I'd be really frightened."

In hindsight, once Terry discovered that Cathey was actually North, he realized that North had been feeding him lies about his knowledge of how the leak was made that led to Seal's death.

Terry was surprised to note that Ronald Reagan's name had been strangely missing from all this. Only Bush and Casey's names were being discussed in a respectful tone. But Terry was no fan of Reagan's, and had always assumed he was only a puppet. Maybe he was discovering who really ran the White House .... Bush and Casey.

Terry was still dubious about what Cathey was saying regarding Seal, and Johnson quickly picked up on that. Now Johnson was applying the balm to Reed. Johnson shifted quickly to the need for trust.

"Mr. Reed, if I could add," Johnson began. "I'm aware of your friendship for Mr. Seal. He always spoke highly of you and he is a main reason you're going to Mexico for us. He was your sponsor, as we say in the Agency. We viewed Barry as we view you now, an asset to our activities, an asset to our common objectives, an asset to our national agenda, an asset to our foreign policy. This has to be a relationship built on trust, however."

Johnson apparently felt the need to stress the difference between Terry's structured Air Force intelligence service and what he would now be doing, outside that structured environment, as an asset in charge of a proprietary CIA front company.

"At the CIA, we're under constant monitoring and scrutiny. We're structured and regimented. Christ, we're a government agency, understand? And there'll be times we will have to insulate you from certain information in order to not compromise ourselves." He was defining what spooks call a deniable link, but he was also effectively diverting Terry from pressing further about Seal.

"You were in Air Force Intelligence. As you know, the government side is just a chicken-shit outfit full of rules and regulations. But your side, that's different. The side you and Barry come from. You're the operational side of the CIA as Bill Casey and others before him envisioned, you're deniable. You can move around unobserved and undetected. You can hold meetings like this without 20 idiots armed with machine guns guarding you. Understand?"

Johnson added that Seal had become a liability by violating the basic rule of trust, one that controls assets. By doing so, he said cryptically, Seal had grown outside the Agency's control by trying to go into business for himself in Mexico, an allusion perhaps to the Agency's fear that Seal was trying to force himself on the Mexican operation with his "small Air America operation" duplicating Southern Air Transport. To support the premise that Seal was possibly going into business for himself, Terry recalled how Seal originally had sworn Terry to secrecy about plans for weapons manufacturing in Mexico. Manufacturing had not been part of the plan Terry had originally drawn up for Johnson. Maybe Seal had learned enough about weapons manufacturing from Terry and was planning to go into production without the Agency ... or with someone else.

"It's very unfortunate about Barry's death, and we had nothing to do with it," Johnson assured. "These problems have a way of taking care of themselves. "

What did he really mean by that, Terry wondered. Had they conveniently allowed Seal to be murdered? In any case, Terry got the message. He would be trusted as long as he was not caught going his own way and screwing the Agency. It was becoming, from what he had read, like the Mafia whose rules were simple: you don't go outside the organization and freelance without prior approval of the bosses.

Maybe Barry's fate was proof of the underworld saying: You live with the Mob, you die with the Mob.

But Terry persisted with his questions. He still wanted to know why the Agency had allowed the IRS and the Arkansas State Police to question Seal under oath on December 27th, 1985, just two months before his death. Bruce, at OSI in Little Rock, had informed him of this interrogation, flabbergasted that the Agency had allowed it. "Isn't that just inviting problems to allow an agent to be scrutinized ... that way?" Terry asked Johnson.

Cathey intervened. "Barry handled himself quite well with that legal orgy you're referring to. And, yes, it's unfortunate that happened. Remember the old saying in the military, there's always someone who doesn't get the word. Well, in this case, that someone is that IRS agent, Bill Duncan."

Gomez jumped into the conversation. "There's another way for people like this guy Duncan to 'get the word.'"

This upset Cathey. "Now Max, with talk like that, Terry might get the wrong idea. We're not like the Mob, Maximo. We don't kill people. So explain that last comment for the benefit of Terry and the group."

"Like we say in Cuba, the most precious gift a person can receive is a gift of the rest of his life," Gomez responded, with laughter filling the bunker. "I simply meant that a direct warning in many cases takes care of problems like these ... sometimes."
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Re: The Rapeutation of William Duncan, IRS Investigator

Postby admin » Tue Oct 11, 2016 4:10 am

Excerpt from Partners in POWER: The Clintons and Their America
by Roger Morris

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Only hours before his gangland-style assassination, Seal had been making his habitual calls to Mena. After the killing, activities in the Ouachitas continued unabated, proving the operation went far beyond a lone smuggler. In October 1986 the Fat Lady was shot down over Nicaragua with a load of arms for the Contras. In the wreckage was the body of copilot Wallace "Buzz" Sawyer, a native of western Arkansas; detailed records on board linked Fat Lady to Seal and Area 51, a secret nuclear weapons facility and CIA base in Nevada. It would be the headline-making confession of the Fat Lady's lone survivor, Eugene Hasenfus, that would hasten a partial public airing of the Iran-Contra affair. Though the Mena operation remained largely concealed in the ensuing expose, records showed that there had been several calls around the time of the Fat Lady's ill-fated mission from one of the CIA conspirators in Iran-Contra to Vice President Bush's office in Washington and to operatives in western Arkansas.

"After the Hasenfus plane was shot down, you couldn't find a soul around Mena," remembered William Holmes, who now found that the CIA refused to pay him, reneging also on one of the last gun orders. The hiatus at Intermountain Regional was brief. By early 1987 an Arkansas state police investigator noted "new activity at the [Mena] airport," the appearance of "an Australian business [a company that would be linked with the CIA] and C-130s." At the same moment two FBI agents warned the trooper, as he later testified under oath, that the CIA "had something going on at the Mena airport involving Southern Air Transport [another concern linked to the CIA] ... and they didn't want us to screw it up."

Since the CIA is expressly prohibited by law from conducting any such operations within the US, the documented actions constituted not only criminal activity by the intelligence agency, but also suborned collusion in it by the FBI. In August 1987, eighteen months after Barry Seal's assassination, an FBI telex advised the Arkansas State Police that "a CIA or DEA operation is taking place at the Mena airport."

In the late 1980s, as intelligence sources eventually confirmed to the Wall Street Journal, a secret missile system was tested, CIA planes were repainted, and furtive military exercises were carried out in the Ouachitas. As late as the fall of 1991 an IRS investigative memorandum would record that "the CIA still has ongoing operations out of the Mena, AR airport . . . and that one of the operations at the airport is laundering money." When the story of those more recent activities leaked in 1995, the rival agencies behaved in time-honored Washington manner with the media, the CIA furtively explaining Mena as "a rogue DEA operation," the DEA and FBI offering "no comment."


Months before Seal's murder, two law enforcement officials based in western Arkansas -- IRS agent Bill Duncan and state police detective Russell Welch -- had begun to compile what a local county prosecutor called a "mammoth investigative file" on the Mena operation. Welch's material became part of an eventual thirty-five-volume, 3,000-page Arkansas State Police archive dealing with the crimes. Working with a US attorney from outside Arkansas, a specialist in the laundering or "churning" of drug proceeds, who prepared a meticulous presentation of the Mena case for a grand jury, including detailed witness lists, bookkeeping records from inside the operation, numerous other documents, and an impressive chain of evidence, Duncan drafted some thirty federal indictments on money laundering and other charges. "Those indictments were a real slam dunk if there ever was one," said someone who saw the extensive evidence.

Then, in a pattern federal and state law enforcement officers saw repeated around the nation under the all-purpose fraudulent claim of "national security," the cases were effectively suppressed. For all their evidence and firsthand investigation, Duncan and Welch were not even called to testify before appropriate grand juries, state or federal. At one point a juror from Mena had happened to see hometown boy Russell Welch, a former teacher, at the courthouse and "told the others that if they wanted to know something about the Mena airport," as one account described it, "they ought to ask that guy out there in the hall." But "to know something about the Mena airport" was not what Washington or Little Rock would want. Though the Reagan-appointed US attorneys for the region at the time, Asa Hutchinson and J. Michael Fitzhugh, repeatedly denied, as Fitzhugh put it, "any pressure in any investigation," Duncan and Welch watched the Mena inquiry systematically quashed and their own careers destroyed as the IRS and state police effectively disavowed their investigations and turned on them. "Somebody outside ordered it shut down," one would say, "and the walls went up." Welch recorded his fear and disillusion in his diary on November 17, 1987: "Should a cop cross over the line and dare to investigate the rich and powerful, he might well prepare himself to become the victim of his own government. ... The cops are all afraid to tell what they know for fear that they will lose their jobs."
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Re: The Rapeutation of William Duncan, IRS Investigator

Postby admin » Fri Nov 11, 2016 10:22 pm

The Clinton Chronicles

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