EX-C.I.A. AGENT'S ASSOCIATES RUN ARMS EXPORT CONCERNS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP09S00048R000100020114-5
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 4
• Document Creation Date: December 22, 2016
• Document Release Date: August 16, 2011
• Sequence Number: 114
• Publication Date: September 6, 1981
• Content Type: OPEN SOURCE

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ARTICLE APPEARED
ON PAGE
NEW YORK TIMES
6 SEPTEMBER 1981
.: x- .I.A.. Agent's Associates
Run Arrii.s. EX Port. Concerns
tors Inc., a petroleum services corpora---
t ion that has employed at least four for
mer C.I.A. agents, was established by
Mr. Wilson in 1978 for Thomas G. ClInes,
who was an active senioragency official
at the time, according to Mr. Clines. An-
other Clines company,. Mn Clines said,
was started with a fdan:`arranged? in
Switrerlai: i.thaf;bvo1ved.Mr. Wilson's.
GenevaaEm7ney.an6Mr_ id be:
could not. rule out the. possibility that-
Mr. Wilson was involved in the loan..
Another of the businesses, the Egyp.
tian American Transport and Services
Corporation, known as Eatsco, has an
sives to Libya.:
are operated by- a. group of, men once,
closely associated at the Central Intelli-
gence Agency with, Edwin P: Wilson, a.
former C.I.A. agent who has,been
charged. with illegally shipping.,_explo--
mer C.I.A. contract agent who had re-
ported to Mr. Clines, for a tee of $1 mil-
lion to assassinate a Libyan dissident
living in exile in Egypt.
Such an assassination plan, detailed'
in the 1980 indictment of Mr. Wilson,
was never carried out. In 1978, public
records in Texas show, Mr. Quintero be-
came secretary and director of A.P.I.
Distributors.
The establishment of the corporations
WASHINGTON. Sept- 5 - X. series of uonsMp with Mr.. Wilson. Mr. Wilson's 1 and the emergence of a network of for-
interlocking businesses here that trans-. name does not appear on any of the com- 1 ?mer Wilson associates in the Washing.
fer advanced technology, and. sensitive . parries' incorporation papers. Mr. Clines ton area occurred around 1978, at about
military equipment.to. foreign govern- said in an interview yesterday that. his the time Mr. Wilson was shifting ,his
meats, especially in the:: Middle East, `former ties to Mr. Wilson had "haunt. operations overseas, according to Wil-
The following article is based on reR'orting by Philip-Ti
and was written by hf r. TauZ man...:-s: ?
ed" him and hurt his business.
An Emerging Puzzle
The extent to which these men and Yer? and engaging in some of the same
'
companies may be linked to Mr. Wilson . business activities that Mr. Wilson did,
Already, that puzzle has raised ques- Wilson, the men and companies dis-
cussed here have not been systemati-
tiom for many senior Government otfi- callyscrutinized by Federal authorities,
dais about the Government's lack of Government officials said
The main
.
control over the transfer of sensitive reason, they said, is that the Justice De-
technology abroad by former senior partment investigation and prosecution 1
military and intelligence officials. They ' of Mr. Wilson have concentrated on ac.-
also say they are troubled by the tivitins that occurred between 1976 and
C.I.A.'s inability to prevent private mis. 19 n 1978, according to Justice De
use of intelligence and international ment officials, Mr. Wilson, a former
comtections by its current and former contract employee of the C.I.A. who was
employees. involved in the Bay of Pigs invasion and
The sale of advanced technology and ? other covert operations, closed a deal
military equipment abroad is carefully with the leader of Libya, Col. Muammar
controlled by Federal law and Govern- el-Qaddafi. The deal called for Mr. Wii- ;
meat re
ulations that a
f
t
d b
ll h
g
re en
orce
y son
o se
is expertise in intelligence,
exclusive contract- with the Egyptian I
Government to handle the. shipment to 1 the Department of Commerce and the arms and explosives, to the militant
Department of State,. but officials at. Arab nation in North Africa to train ter-
E
t
f billi
f d
Mr. Clines said he owned 49 percent of
Eatsco-
Federal investigators say there. is
additional evidence linking Mr. Wilson
to some of the companies. For example,.
equipment bought in the United States..
gyp
o
es o
ollars in military
both agencies ' acknowledge that the rorists, the officials said.
laws and regulations have frequently I Last Year, Mr. Wilson and another
been circumvented by Mr. Wilson and former C.I.A. agent, Frank E. Terpil,
others. were indicted by a Federal. grand jury
.I A officials say the ahas.no hereon charges of illegally shipping ex-
C
rn.I.A. officials to plosives to Libya and conspiring to mur-
:. prevent the agency g former h employ- der Umar Abdullah Muhayshi, a former
ees from capitalizing in private life on member of the Libyan Revolutionary
intelligence connections and informs- Council who )-AA
f
t
d
e
ec
e
to neighboring
appear in handwritten, notes made by a I tion they ~aim-J whil eworki g for Director Egypt, a country hostile to Libya.
man. charged with attempting to mur- Both Mr. Wilson and Mr. Terpil are I
der a Libyan dissident last year in. Fort: of Central Intelligence, announced fugitives. Mr. t, Terpil and s believed to be
earlier this summer that, largely in re-
Colliag; Colo ,Federal law enforcement sparse to Mr. Wilson's activities, he had living in Beirut, paMr. Wilson cur-
officials said. These officials said they' ordered a review of a en rentiy lives in Tripoli, the Libyan capi-
officials
evidence that made them. believe g C5' policies in tal, Federal Investigators said.
According to a survey of corporate
that the notes were made by the suspect, , Officials said, for example, that they
records Eugene A. Tafoya, diming or after a were concerned that Mr. Wilson had records i the United Sates and
sees. as well as interviews 'with more
more
meeting with Mr. Wilson. The officials used agency employees in his personal. than 50 businessmen, lawyers and gov-
believe Mr. Wilson may have arranged business activities. In one instance in ernment officials, the central figure in
and financed the assassination attempt:- 1976. Mr. Wilson,' who was no longer the network of individuals and compa-.
None of the men or corporations have working for the. Government, secured nie$ is Mr. Clines' who worked at
the help of key C.I.A. officials in an un- the
been accused of criminal conduct, ac-. successful effort to sell highly sensitive C.I.A. for 30 years. The companies are
cording to Federal authorities. All the surveillance equipment to Egypt, ac- involved and the Saudi Arabia, Latin Amer-
businessmen involved denied' having, cording to former Wilson associates. Ea a Far East as ,well as Libya,
Department offi- Egypt and Mexico.
any t~rreat business or. finansI; relay; According to Justice
dais, in another Instance, also in 1976, Chaos's Friendship With W11son
Mr. Wilson hired Rafael Quintero, a for-.m. Before Mr. Clines retired from the
agency in. October 1978, he served as'di-
rector of training. in the directorate of.
operatic a las kn wo as: the ciandes.
son associates. The people in this net-
work, clustered in the same Virginia of-
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y
II " IU in a court-0raered
and former business associates of Mr. search of the home of Mr. Tafoya, the I
Wilson. man charged with the attempted assay
Justice Department offldais
id
sa
that
former employees of the company,
Aroundworld Shipping and Chartering
Inc., are currently under investigation
and may be indicted for a role in the
shipment of 20 tons of plastic explosives
to Libyan 1977. i
After his retirement from the C.I.A.,
Mr. Clines said, he also founded two
other companies, Systems Services in.
j
ternational Inc., also called S.S.I., and
International Research and Trade Ltd.,
known by the initials I.R.T.
In an interview, Mr.. Salem said he
owned 51 percent of Eatsco through an.
other corporation, called Tersam U.S.A.
Inc. He said Mr. Clines, through S.S.I.,
owned 49 percent.
The two men said they met 15 years
ago in the Far East. Both said Mr. Wil.
son had no interest and had played no j
role in Eatsco. Mr. Salem said he had,
never met Mr. Wilson and had never
heard his name before it wets raised in,
the i
te
i
n
rv
ew
lair. Tafoya's handwriting. Among them
appeared the following, according to
Federal investigators: "Salam Hussian
(former Egyptian intell ... EATS Egyp.
tian American Transport Svc Co. 77771
Leesburg Pike, Suite 307 Fails Church!
VA." ,
Investigators said Mr. Tafoya appar--1
ently meant Mr. Salem but partly mss..;
spelled the name. Mr. Salem denied that;
he wasever 'associated with Egypt-an
I
intelligence.
S.S.L. incorporated in Delaware in F.B.I. officials said they were looking!
September 1978, was founded to sell to for-explanations of these and other nota-'
security systems and to handle the pro. tions made by Mr. Tafoya on the same
cerement and sale of military hard- Piece of paper, including the names, a
f I. R.T. aaccor g toto an a ecutivoff e i was Foreign Minister, Kemal Htassan Ails
-._---.. an rd Defense M
_.__ .. .
involved with "lo
i
tic
ini
g
s
s
..raga.
Actually, according to incorporation
records, there are two I.R.T. compa-
nles. One was incorporated in Bermuda
in April 1979 and registered there with
Thee Registrar of Companiees. The other,
they believed that Mr. Tafoya had made
the notes either during or after a convert
sation with Mr. Wilson.
Evidence of Meeting Cited
The investigators say they ha
ware in December 1980 Mr. Clines said tries show rin
. g that M . Ta oya and Mr.
that earlier this year he paid b
Wilson we
k
i
ac
re
. the
n Malta and Libya at the
Swiss loan that involved Mr Wile.
'
same time T
l
''_-- _--
n
s
e
ep
by
B
erme-
da. -r ????...
rovesMtirgatorsTafinclude numerausl
calls finm
_ _
e
Inco rn August 1979, Mr. Clines established Mr. Wilson in Libya. 11
rporation papers, list Mr. Clines the Egyptian American Transport and The notes, in Mr. TafoyR,s handwrit-
as president, Mr. Quintero as secretary II Services Corporation Ing, include:
and director and Ricardo A. Chavez a as with a formeroffi-
and director
and director. An to cial in the Egyptian Government, Hus- "Defense Minister (underlined) often
treasurer efA Mr. igv o sein K. Salem. The company, which was finishes up his official business in a few
tae s e
also worked for the C.I.A. and, lCnh i incorporated in Delaware but has its days, and then takes time to clean up
r,
Quintero, reported directs to Mr. headquarters in Falls Church, Va., was notes, M business a EATS." IA the
Q lime who was both r ct s 'toonMr. founded at the time the United States te. n?es Mr. Tafoya identified Mr. Ali as
officer." dread restrictions on the sale of military Defense Minister. Mr. All held that job
Federal investigators said that in equipment to Egypt, when sales of such until June, when he became Foreign
equipment. were starting to grow rap. Minister.
military e Identified Mr. Ghazala as
1976, when Mr. Wilson, financed by idly. the militattache at the Egyptian
Libya, was looking. for someone to as- Embassy in Washington, sassinate Mr. Muhayshi, the Libyan a post he held
factor living in Egypt, de. Shortly after the formation of Eatsco, several years ago.
g he hired Mr. the Egyptian Government awarded it ' Former associates of Mr. Wilson said
Quintero, who the investigators say is an exclusive contract to handle the ship. that despite his close ties with Libya, a
the unnamed assassin described in the meat of all military equipment pur- nation viewed with extreme hostili
Wilson indictment. chased in the United States, with the ex: Egypt, he also had longstanding ties
The investigators said Mr. Wilson of. caption of aircraft flown to Egypt by the with Egypt. They said that in the mid
fered Mr. Quintero and two other United States Air Force and other sensi- 1970's, for example, after he had left the
Cubans $1. million for the assignment tive equipment, which is handled by the C.I.A., Mr. Wilson played a central role
and gave Mr. Quintero a check for American Government. Last year, ac- In trying to sell electronic
S30.Q00 to cover preparation expenses. cording to Defense Department records, Egypt on behalf of a California menu.
Mr. Clines said Mr. Quintero ques. Egypt ordered $2.5 billion worth of mils facturer. In that period, these former
tioned whether the C.LA. was involved tary equipment from the United States.. - . associates said, Mr. Wilson dealt fre.i
and reported the assisttunentto him. Mr; gLently with senior officials in the
Egyptian int
.!Pgence service.
.CO y +.
officials. Before "' ` anes in turn told two senior officials at
supervising the min- f the agency, he said. They sent word
ing of covert agents and other intelli- ba
k
c
that the planned murder was not
Bence olretives, Mr. Clines served sanctioned by the agency, Mr. Clines
under cover himself as an agent in said, and Mr. Quintero and the two
Southeast of Asia and played a role in the Cubans never attempted to execute a
Bay Pigs invasion, intelligence offi- contract. -
cfaissaid.
Mr. Clines met Mr. Wilson at the Distributors, after the whichf osells oildrillig
C.I.A., and the two men became close
friends, according to former associates. equipment and explores fdr, f f c es .In 1976, when Mr. Wilson, no.longer 'warily in Mexico, it opened offices in
working for the C.I.A., was arranging ouston, sharing quarters with a
for the manufacture of explosive tiing Wilson helped ilson hellped ped to to establish tablish company severthat.
devices to sell to Libya, aars , Jr.
e several r.
al
said
he was sitting with Mr. Wilson in a
gnia bra,. as production plans for the
timers were worked out with represent-
atives of Scientific Communications
Inc. of Dallas, a longtime supplier to the
f^ T A 1.- - .
Wilson, and that he felt he was "used"
L
In an interview last month, Mr. Clines
five months before his..
departure from
the r? t A L _
asked
According to incorporation records in
Texas, the paperwork to create A.P.I.
Distributors was handled for Mr. Clines
by the Washington law firth of Dick-
stein, Shapiro & Malin, which repre.
sented Mr. Wilson at the time.
Mr. Clines also said yesterday that in
an effort to remove any Wilson connec-
tion from A.P.I., he moved quickly after
he retired from the C.I.A. in October
1978 to change the company's attorneys,
who held the corporation's records.
However, records of the CT Corporation
System, which assisted in the registra.
tion of A.P.I., show that attorne
s we
y
re,
not switched until April 29, 1980, a few
days after the indict.. _. _. ~._ .....
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Help for Other WllecnFriends
As Mr. Clines has expand his activi-
ties in private business, he has helped
other friends of Mr. Wilson from inside
and outside the C.I.A. to get started or
established in business.
The most prominent is Theoiore G.
Shackley, former deputy to the director
of operations at the agency, one of the
C.I.A.'s most powerful and sensitive
posi..ons. As with Mr.. Clines,' Mr.
Shackley met Mr. Wilson at the agency
and the two men became friends.
According to senior intelligence offi.
cials, Mr. Shackley indirectly came to
Mr. Wilson's defense when Mr. Wilson
was tinder attack or investigation.. In
1977, when charges of misconduct on the
part of Mr. Wilson and other intelligence
operatives were first brought to the at:
tention of the C.I.A., Mr. Shackley wrote
a memo to Stanfield Turner, then Di.
rector of Central Intelligence, quegtion.
ing the credibility of Kevin P. Mulcahy,
a former agency employees and Wilson
business associate who was making the
charges.
Intelligence officials.. also said that
Mr. Shackley played a role in 1977 in dis-
couraging the Senate Intelligence Com-
mittee from opening- an investigation
into Mr Wilson's conduct and his rela-
tionship to the C.IA..In an interview
last month, Mr. Shackley declined to
discuss his activities while at theC.IA.
In May 1976, at the time Mr. Wilson
was becoming heavily involved in
Libya, he arranged a meeting with Mr.
Shackley at Mr. Shackley's homa in Be-
thesda to discuss, among other things,
his hopes of selling electronic military
equipment to Egypt on behalf of the
California manufacturer, according to
Mr. Mulcahy, who attended the meet-
ing.
Military Hardware Discoed
Mr. Mulcahy, who was working for
Mr. Wilson at the time, said he and Mr.
Wilson were joined by Harry Rastatter,
a business associate of Mr. Terpil who
had recently returned from a trip to
Egypt, Turkey and Iran. "We talked
about Turkish, Iranian and Egyptian in.
terests in acquiring sophisticated mill-
tary and intelligence hardware," Mr.
Mulcahy recalled in an interview.
Mr. Mulcahy said Mr. Wilson had told
him that the meeting was designed to so.
licit Mr. Shackley's aid and the aid of
the C.I.A. to persuade the State Depart-
ment to issue export licenses for sale of
advanced electronic.- equipment to
Egypt, Iran and Turkey, some of which
was barred from export at the time.
"At the end of the meeting," Mr. Mul-
cahy said, "Shackley told us he wanted
some of this to come in the front door of
the agency. He said to pass through all
the Egyptian stuff in wrltl9 through
the agency's contacts office.' That of.
fice, in downtown Washington, is where
outsiders can make contact with the
CIA
Several days later, according to Mr_
Mulcahy, he and Mr. Rastatter went to
the office for an appointment with Col..
Jack Weyand_ Later;: on_June.1. 1.978,.
Mr. Mulcahy wrote a memo to Colonel I I Mr. Lowers, who declined to be inter.
Weyand outlining the "wish list" of viewed further unless his name was
products Mr. Wilson hoped to sell. to withheld from publication, described
Egypt. himself as marketing director of the
Mr. Mulcahy gave a copy of the memo company. He refused to identify Its own-'
to The New York Times. It lists a num. 1 ers or directors.
ber of highly advanced electronic de-''
Others. familiar with the company'
vices used for the interception of corn-said one its top executives is a former.'
munications that were banned from sale I C.I.A. official. Sources familiar withto Egypt. at the time, according State Seico said that the company, which has
Department officials. These officials, in, sold security systems to the United
the Office of Munitions Control, said' States and forcign governments, was set
they duld find no evidence that the l up to replace another security-systems
items proposed for sale were approved company that.was started in part wih.
at the time. 1 funding from Mr. Wilson:.
Mr. Shackley has acknowledged that {
he attended the May meeting at his A business associate of Mr. Clines.(
house, but said his purpose in talking to , said that Mr. Clines was thinking of buy.
Mr. Wilson was to collect information:1-ing Seico, which has sold security equip.
from non-C.I.A. sources. He said he was tent to Eatsco.
unaware at the time of Mr. Wilson's as
ea s
o b
h
M
I
ag
y
..,......a
o-- -- -...- ,
y,
s
When Shackley. left the C.I.A. in Sep. far from complete. Investigators expect
tember 1979, he went to work for 1V1r.lf new indictments shortly involving the
Clines at A.P.I. Distributors, S.S.I., and'I 1977 sale of explosives to Libya. And I
I.R.T. Ltd. Friends of Mr. Shackley some senators have privately expressed
'familiar with his business activities said .I an interest in exploring Mr. Wilson's ac-
he viewed the association with Mr. tivities as well as the Government's1
Clines as a way of getting established in ' handling of the case.
private business. They said that after
Mr. Wilson was indicted, Mr. Shackley
decided to reduce his association with
Mr. Clines and his ventures.
? Last September, Mr. Shackley
founded Research Associates Interne-,
tional, a consulting company. Research
Associates currently shares office space
in Rosslyn, Va., with S.S.I. and I.R.T.
Ltd., and the incorporation paperwork
for Mr. Shackley's company was han-
dled by the Washington law firm of
Shaw, Pittman, Potts & Trowbridge,
which represents A.P.I., I.R.T:, S.S.I.
and Eatsco, according to company offs.
cials. -
Friends of Mr. Shackley said he was
looking for separate office space for Re.
search Associates.
Lowers Has Offices in Building
Another former associate of Mr. Wil-
son, Donald Lowers, who managed Mr.
Wilson's farm in Virginia and later han.
dled administrative duties for Mr. Wil-
son, recently moved into the same Falls
Church building that houses Eatsco.
Mr. Lowers's employer, the Systems
Engineering'International Corporation,
known as Seico, was founded in June in
Delaware. Incorporation paperwork
was handled by Shaw, Pittman Potts & j
Trowbridge, according to incorporation
documents.
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-C.I.A. Agents and International Ties
EDWIN P. WILSON
Former agent for the Central Intelligence Agency
who has been charged with illegally shipping explo-
sives to Libya as part of an operationtotrain terror-
ists there. Federal investigators say they have evi-
dence that he commercially exploited his intelli-
gence connections while employed by the U.S. gov-
ernment.
i~r. Wilson's Former Associates
TNCMAS G. CLINES
Former senior C.I.A. official
companies, joining
one of them while
~e was still with
the intelligence
agency.
"VEODORE G,
:~I.acxJ.Ey
Former deputy to the
uirector of operations
i at the C.I.A.; one of the
agency's most powerful
and sensitive jobs. He held
a meeting at his home in 1976
.4;'h Mr. Wilson and others at which
the sale of electronic military
equipment to Egypt was discussed.
. RAFAEL QLWfrERO
An ex-C.I.A. contract employee
.whose "contact officer" in
..the Intelligence agency
was Mr. Clines-
Accnrrling to Federal
Mr. Quintero was hired by
Mr. Wilson in 1978 to as-
sassinate a Libyan dissi-
dent living in exile in Egypt.
RC A. CHAVEZ
Ex-C.I.A. contract employee
whose "contact officer" in the
intelligence agency. was
. Mr. Clines.
DONALD LOW M
Managed Mr. Wilson's farm in
Virginia, and later handled administrative
and financial duties for several of
Mr. Wilson's corporations.
The Corporate Connection
Eb-Ohm American Transport OW Services CorporetJQ.n (;moo)
Handles the shipment to Egypt of billions of dollars in military equipment purchased in
the United States.
Principal shareholder with 51 %: Hussein K. Salem
Owner with 49% share: Thomas G. Clinoo
A.P.J. Inc. DWaftt=s Supplies oil drilling equipment and explores for oil, primarily in Mexico. The company
was set up for Mr, Clines by Mr. Wilson while Mr. Clines was a C.I.A. employee. A.P.I.
shared quarters in Houston with a freight-forwarding company, Aroundworld Shipping
and Chartering Inc., that Mr. Wilson helped establish earlier, according to corporate
records and associates' statements. U.S. officials say Aroundworld employees may
have handled the shipping of 20 tons of plastic explosives to Libya in 1977 for Mr. Wit-
son.
President. Thomas G. Clines
Secretary and Director: Rafael Quintero
Treasurer and Director: Ricardo A. Chavez
Consultant: Theodore G. Shockley
Systems Services Internattomal IM
Founded to sell security systems and handle the procurement and sale of military hard-
ware.
?o V. VIi(iU5 +
Consultant., Theodore G. Shockley
IntOr+satinn61 Research and Trade (3erirsuda) ibi (LR
Ta
.
Involved with logistics systems and storage. The corporation was founded originally in
Bermuda with financing from unknown Swiss sources
President: Thomas G. Clines
Consultant: Theodora G. Shockley
~e~o'er$. lyae..e.3.d,,.m r ? - _aa---~ .. ~ ..
A consulting company that shares office space with S.S.I. and I.R.T., two companies.
founded by Mr. Clines.
President Theodore G. Shackle.y
Sallrity s&hereand ab oad Inc~or (~) } d'ied that represents LR.T., S.S.1., Eatsco and. Research Assoc aces. The companyyhlaw firm
as sup-.
plied equipment to Eatsco, and has its offices one floor above that corporation.
Marketing Director. Donald Lowers
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