Excerpt from "Compromised: Clinton, Bush and the CIA: How the Presidency was Co-opted by the CIA"
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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. 
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. 
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." 
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." 
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. 
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."