THE SPY WAR

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP91-00901R000500080017-0
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 4
• Document Creation Date: December 9, 2016
• Document Release Date: November 14, 2000
• Sequence Number: 17
• Publication Date: September 28, 1980
• Content Type: MAGAZINE

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In a dispute over whether the K.G.B had penetrated the C.I.A., counterintelli-
gence chief James Angleon (left) was fired by Director William Colby in 1974.
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ON G
24 September 1980
THE MAR
USINIZSZTE=
SPOOKS AND THE SINGLE SMILE
. . .
The Delightfully
Right jumped
with joy the
other night,
darlings. They'd
all sidled in to
hear Michael
Novak speak on
''Solzhenitsyn at Harvard," at
Ernie Lefever's Ethics and
Public Policy Center dinner. (E
& PP, as we must now call it, is
the hot Nouveau Right Think-
Tank. It has declared war on the
Institute for Policy Studies, hive.
and haven of the Nostalgic Left.)
Of course Solzhenitsyn, who.
can't bear anybody, didn't come.
But there, engulfing the spinach
soup, perched the entire Old
Intelligence Establishment: Ray
Wannall, once FBI counter-
intelligence; Two old CIA - '
Shoguns, Dick Helms and Bill -
Colbyzand James Jesus Angleton
(James Jesus, of course, was the
model for "Mother" in Aaron:
Latham's "Orchids for Mother.")
They all hooted with glee at the
Evening's Joke, as fluted by
Michael Novak: "Some say that
Solzhenitsyn is a prophet. But?
? this is a non-prophet ?
organization." Heh heh. Apart
from.that, Earwigs, everybody
behaved quite normally. Watch
that Think-Tank_
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LRI: I CL.E XxLr.5)
o PAGV.
THE WASHINGTON POST
16 September 1980
,
By- George Larciner. Jr.
Wa3hinirton Post. St at Writer
A little-noticed section of a con-
troversial new CIA secrecy bill could
lead-to a whole- new gamut of . artifi-
e'er government titles and phony posi-
tions for U.S. 'intelligence officials
working overseas. ? . . ?
- Some critics believe the bill could
even result in use of the Peace Corps
for-intelligence purposes, but CIA of-
cals insist that this would never hap-
pen.-..
-The. disa?eement involves some
-relatively obscure provisions of a
pending CIA bill devised primarily to
make it a criminal offense to disclose
any information that serves to identify.
U.S. intelligence operatives abroad.
? Under language tacked on by the
House Intelligence- Committee, the
president would be required to estab-
lish secret procedures ensuring that
intelligence officers and erriployes--
fram CIA station chiefs on -down-be
ven effective cover. Those proce-
dures, the bill adds, "shall provide
that any department or? agency desig-
nated by the president" must render
-whatever assistance is necessary.
At present, the Peace Corps, the
:Agency. for International Develop-
ment and the International Cornmuni-
.Cation Agency are all of limits to the
intelligence community. The tradition
of keeping spies out of its ranks is
strongest: in the ;Peace', erps,? which:
hasehad,ru/ek_since .it..1; inception'. in':
.1961 prohibiting: thee'ernploymerit?.!of .
anyonelfrom-the CI-
Thef:Forelgh Service-- also has 're?
sisted the designatien?bf anyone from
the CrIA'as a full-fledged Foreign Serv-
icei-offf6er '(FSO)Intelligence officers
Usually' are confined- he an FSR (For-
eign Service ?..LReserve) designation,.
along-With:others on: temporary assign-
ment::: ? ' ? O.., ,
The U.S. government and the Con-
gress have "excluded CIA from a
whole lot of official Covers." former
CIA director William E. Colby pro-
tested in House testimony early this
year. "[At] the State Department; wp
cannot use certain eicminations, -and.
therefore that is?,'a-furthei exclosion.
We have got. to open up the pos-
sibilities, at .leest within the govern:
. When Colby was-at the agency,
added:- in a. telephceiL interview, "we
were APPEQVG6LttornRai
floe-as far as cover was concerned."
Fronie the intelligeitge-'ecommitnity's
rnt'n vigva_ - the restrictions . also
y suggests . there's something I
dirty- about intelligence. when Cou,
gress -has voted it,". Colby says. 'In- :
telligence is an important part of our '
national structure, by congressional
fiat.".. _
_1
the!poent ef...yiew of other
..goVernment,' agencies'," ,hoWever,- their;
integritsofsZ,at:"--stakee--]As-:.the 'Peace '
Cortis hai." pht,it 'it's'rtrieS are 'meant
'Ito--aveid;.-previding any ,credence to
charges -;that, the ? Peaee .Corps is
front 'for-lintlf,eence. activities of the
United States governirient.", But when
the Peac,&.Corps proposed consolidat-
ing, the-regulations 2V2 years ago with
formal putilreation, ,in the Federal
Register, ;the CIA took umbrage. The
new, rules: were never ? prom ulgated.
CL Ae Officials contend -that the sec-
recy bill's- call for-"better cover" is
"purely :hortatory;' that it doesn't ,
give the presidentfany more a.uttiority ,
than he has now. A CIA lawyer iri-
sisted that the Peace' Corps would !
never be opened up to intelligence
agency operatives.
However, Mortoe Halperin; director
of the privately funded- Center for Na-
tional-Security Studies, which is fight-
ing the.bill, maintains that its enact-
ment would represent "a .very clear
signal from Congress to the-president,
telling-him that he should be direct-
ing- more agencies te provide cover
to the CIA."
!`I would_ certainly be worried. if I.
,Were in. the Peace Corps," Halperin
said. 'Because, the bill states that the
neW?_procedures:tO be established by?
. the, president?would be ? exempt from
niitiblicatioe. or disclosurer,lialperip,
also pointed out that it. could result?fn
the undercutting of _restrictions that-i
most people would'assume- were' still' !
in ;effect' ? ? " ? I
-main worry iseone- of ithage' )
-:-.rather than of substances" added one,
j
Peace Corps official. If the bill. were 1
enacted,? he 'said, "we could, have a;
problem 'with people pointing at the i
? Peace- Corps and saying-It could be !
used'" b' the CIA, even if it weren't,',:
7-7 The bill itself has a strong head of
steara; in View of the July. Cmaclaine,f
?
egunning of the home of the; CIA 'sta?:'
'ttitet chief _in Jamica shortly after his
ffaine 'arid ? other 'personal deta-- were;
disclosed ? at, 'an . anti-CIA-news COI-.
-,ference' in Kingston. The :measure,
would outlaw the disclosure of any
I-information, even 'from 'publie doci.tel
. :'
-- Proponents hope to bring It WI the I
House floor for a vote Thursday. A-:
sirniiar -version is pending before the 1
Senate Judiciary Committee, where!
criticS- who, contend it is unconstitu-
tional are concentrating their efforts.
.In a letter to committee members last 1
,week: 31- law professors from across ?
the 'country charged that the provis- !
sions criminalizing the disclosure of
nriclaSsified information were a clear i
violation of ?the l'irst Amendment. i
The First -.Amendment does not' :
permit_ using a, ,shotgun because you
I
may hit- semething that is penishable," .
one of the signers, Prof. Laurence E.
Tribe of Harvard eUniversity' s' law
school; said 'at' a- news -.'conference '
here .7.:es;erday. He predicted that the
Supreme Court would strike the
measure down if Congress should en-
a...:t. it. , -: i ': ' ? ?
In addition,' the. Center for. National
Security Studies maintains in a recent '
study that some of the nation's most !
prominent journalists--and at least
one member of the Senate Intelligence ,
Committee-have written or broad-
cast articles that could have resulted -
in their prosecution if the. bill had
been in effect at the time of publica-
tion.
Among the report- that. could have-.
resulted in oriminal sanctions.- Hal- '
perip said, ...Jere a 1977 Washington
Post story by Bob IlToodwaid about
secret clA payments to Jordan's .
King,.,k-kt ssein over a 20-year period-
and a 1977 CBS broadcast by con- .
respondent Bill Moyers, who named
several CIA officials and Cuban allies
in the CIA's _campaiga against Cu- _
ban Premier Fidel Castro .,
Also in potential jeopardy,. the.
center concluded, would have been
Sen.? Daniel :Patoiek Moynihan. (D- ;
N.Y.). As fOrhier.arnhassador to India,-
Moynihan disclosed in a 1975! book ?
that the Cy. bed contributed money
to one of India's political parties and
that on One occasion. the payment
was made.directly to Indira Gandhi:,
?1_ .Whether disclosures-would:2a,
,liable for .erimirial; penalties::wo?Ict
Halperin Anted. deeend 'on the Con-,
duct and intent of the. authors,, but
he said. 'there is no doubt that reve-
lations of this.kind Would be chilled'
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eagents?who. have beep,wqr_king,n17road. ;
SHOLV:41X40.0140
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BOSTON GLOBE
7 September 1980
WORLD IRIOS
? By: ALAN BERGpt:
.?.
'Last Week; ,while American news-
'papers- were describing congressional
? effOrts to pass tough new laws protect-
...-. ing the CIA, a front-page article in the
:::Lcmdon Sunday Times implicated the
agency in shady dealings reminiscent
? nf the disclosures made five years ago
in' ? the Senates.. Church committee
hearings on intelligence activities.
? The Sunday Times article; was an
:.:-Investigative report looking in to-"a se-
, rieS. of mysterious disappearances and .
? violent -deaths around the -world."
Heroin traffickers and couriers as well ?
'? as ?bank-:nfficers and- CIA- personnel
ha- been among the "dozen or so"
orile who disappeared mysteriously
or died violently. "police on four con-
tinents are trying to find the exact.
link between these deaths, the .CIA
--'and the collapse of a:Sydney (Austra.-
Ha)-based bank, Nugan H?lnterna-
tional
.'
the Times reported.--, ,
Saying the story has ,a plot ,.-Wdr;,,.
-:thy of John Le Carre," the Tirnes'in-,.
'-vestigative team offered these ',Initial
' conclusions": from its inquiries
-.4-
; ? "Nugan Hand which boasted
Lof-
fices or representatives in: a :dozen:-
_
; countries :and an annual turnoverof
'.:81 billion, was a banker for the heroin
?
,trade
?And there ,IS evidence that the
; bank was nurtured. and May. even,.
....have been set up by the
. One strand of theintricate'."Nugah'
',Hand affair" begins in Australia with
. a Melbourne;.corpner's inquest -into ?
:.;the murder of a young couple, the Wit-
-
Sons, whose bodies were dbg up reTI
xently from? shallow graves near ."a.
,surfing beach.,The Wilsons. who were
both .';shot in the- had:been
:courlers for Terrence John Clark.a&,alleged heroin trafficker Who "Irn rt-:
l'ed 48 kilograms of heroin -- Wort $2
. _ ?..
'4""lahlti?14, {024XNAV
,tgin r
tant commissioner for crime in the
:-..,:Australian city of Vict or
Before their death, the Wilsons
told Australian police everything
knew about Clark's heroin ol
,tions..Subsequently, two senior
dais of Australia's Federal Narc
Pureau who ?vere in the pay of(
"handed him tapes of the Wilsons
? making their statements." Clark has
long since disappeared, but, according'
to the Times, "Melborne's coroner I
_ ?
said fie was in no doubt that Clark-
hired hit men to kill the Wilsons."
? Official investigations of those re-
cords that survived the collapse of the
Nugan Hand bank revealed that Nu-
gan Hand had been "banker to big
heroin traffickers ... but, undoubted-.
the senior-and most sinister traf-
ficker was Terrence Clark_"
On Jan. 27 of this year, Frank Nu-
gan cofounder of Nugan Hand, "was
found shot dead in hi a Mercedes-Benz
sedan on a lonely_road in the Blue
Mountains, 100 miles west of
Sydney." After. Nugan's death, his
American partner, Mike Hand,
phoned the bank's business associ-
ates and told them, according to the
Times account: "You're not going to
believe this, but it looks like Frank
ripped off a stack of money."
, .
?
:There. after calling in a liquidator
and "blaming his former partner for'
- everkthing that had gone -wrong,
Hand disappeared." In his wake he
left :What the -Times described as
chaos Records were missing, and
there were debts totaling,$50 million.
But most puzzling of all fo the Times
?
was that "almost no creditors have
publicly.emerged to tatie their
claIma. Why?
, ??
The Times explanation was that
Nugan's Hand's chief client was the
f-:GiA, and that the bank *as setup. to
'glove:A Covert , funda, Into Southeast
;??`" ?=. .
I--
resentative' who had served with the
? OSS (a forerunner of the CiAl and
?been a commander in Vietnam. Nu-
?gan Hand's man in Taiwan was flight
services manager for Civil Air Trans-
port, another CIA-owned company.
And the Manila's 'consultant' was
Gen. Ray Manors, a Vietnam veteran,
who is now helping the CIA to analyze
the failed attempt to rescue the Ameri-
can hostages in Iran."
Another associate of the bank
mentioned in the Times investigation
was Walt McDonald, an economist
who was a CIA "consultant" for 25
years and a close friend of John Ar-
thur Paisley, the CIA's deputy head of
the Office of the Office of Strategic
Research. "whose bloated body was
fished out of Chesapeake Bay. Md.. in
1978" with "40 pounds of diving
weights .strapped to his waist and a
buillet hole behind the left ear," Spec-
ulatively,. the Teams raised the possi-
bility of a link from the Nugan Hand
affair to Paisley that would run
through McDonald, - ? -;`,. .... .----
? :A less speculative link was to for
?
mer CIA director William 'Colby;
whose visiting card was found on the
dead body 9if Frank Nugan. Colby fold
the Times he "was simply Nugan's U
legal advisor. "There was :no conne4
'Um between Mr. Nugan and my Intel;
ligence background, he said." j
... I
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