SOUTHERN AIR TRANSPORT LINKED TO CIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP75B00380R000400050057-5
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 19, 2016
• Document Release Date: January 3, 2006
• Sequence Number: 57
• Publication Date: September 1, 1973
• Content Type: NSPR

WASHINGTON POST
Approved For Release .2006/02/19 If RI~P75BOO38OR000460050057-5
Southern Air
By William Chapman
T
Washington Post Staff Writer
For an airline which few
people have ever heard
about, Southern Air Trans-
port has had a lot going for
it the past few years.
It gets guaranteed loans
from some of the biggest
banks. It has some of the
choicest markets in the lu-
crative passenger charter
service field. And hovering
over it like a helpful big
brother, it seems, is the U.S.
Central lr_telli;,ence Agency.
The. CL.A's sponsorship
and apparent control of the
Miami-basect airline emerges
from the details of an unu-
sual and super-secret case
before the Civil Aeronautics
Board.
It's been widely known
for years that the CIA fi-
nanced its own airline,
called Air America. Now it
appears th.,tt the spooks of
Langley have another air-
line-one which was indi-
rectly financed through Air
America.
It.came out this summer
,
Southern Air's stock, Stan Ac?tus, charged the
Icy G. Williams, sous ...onipetitig air transport
corn-panics, is merely a "conduit"
mission to buy out the stock for money flowing from Air
held by two other supposed America to Soul horn Air.
owners. ? about one -third of
Instead of a public hear- Southern Air's fleet of
ing, CAB Administrative planes is leased from Air
America. And. it is charged,
Judge Milton Shapiro Southern Air also is depend-
granted a motion for cxecu- ent upon Air America a`ncl
tive sessions. It's noL U11- its subsidiaries for rnainie-
precedented, but there stance and ground handling
services.
seems to be only one other ? Southern Air has been
case of an acquisition hear- the recipient of loans from
ing being held in private be, two prominent banks total-
cause of "national defense" ing $6.6 million. The loans
Were guaranteed by the Pa-
considerations.
Other charter :,irlini, coin
panics got wind of Williams'
phut to buy outSoulhern
.Air, and filed objections.
'['heir main complaint: the
company had been built
with help from government
agencies and Would become
inked to CIA!
a "serious'-'competitorl' be-
cause of that federal sup-
port.
cific Corp., which is said
to be the parent company of
Air America.
The competing air trans-
port companies are trying to
block the sale to Williams
Lawyers for the compet
ing airlines-.World Air-
ways
. Inc., Trans Interna-
tional
Airlines, Inc., and oth-
bound in an oath
ers-were
%of silence administered by
Shapiro. They can't talk
about the case and Shapiro
won't either.
In the record, however,
are exhibits and docu-
mented pleadings which the
lawyers prepared to show
Southerii,Air's connection to
the CIAO
The exhibits show:
? In the past four years,
Sotilliern Air has received
about $6.7 million in loans
from a' corporation called
Actus Technology. Southern
Air still owes Actus S3 mil-
li-t. _Actus, it turns out. also
u tc.- 53,12.5001) to ;fir A;ner-
.,,n.
r;t !lie Cl \'s better 1
by arguing that the com-
pany has violated CAB law
in the past. It has done so,
legal briefs argue, by chang-
ing its stock ownership se-
veral times without getting
approval of the CAB.
For example, documents
show that in 1957 a man
named F. C. Moor owned 98
of the then 100 outstanding
shares of Southern Air
stock. A 1962 statement said
that the stock was then
shared by Moor. Williams,
Percival F. Brundage and
Perkins McGuire. There was
no record that the CAB had
authorized any t transfer
since the 1957 statement,
Southern Air's competitors
pointed out.
Brundage was director of
the Bureau of the- Budget
during the. Eisenhower ad-
ministration, and McGuire
was a deputy assistant secre-
tary of defense and later an
assistant secretary for inter-
national security affairs.
Sources close to the case
speculated that Brundage
and McGuire were holding
the Southern Air stock as
nominees for the real owner
-the CIA. McGuire acknowl-
edged yesterday, "I was a
nominee."
For whom?
"No further comment," he
said.
Approved For Release 2006/02/09 : CIA-RDP75B0038OR000400050057-5