FORMER CIA AGENT IMPLICATED IN DP CONTRACT SCAM

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP04-00312R001001820008-4
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 21, 2016
• Document Release Date: September 15, 2008
• Sequence Number: 8
• Publication Date: November 16, 1981
• Content Type: OPEN SOURCE

Approved For Release 2008/09/15: CIA-RDP04-00312R001001820008-4
0 COMPUTERWORLD 7W
ARTICLE APPEARED 16 NOVEyIBER 1981
ON PAGEZ
Electronics Underirorld
Former CIA Agent Implicated in DP Contract Scam
By Christopher Simpson i
- apectai to C W ++
The amazing case of Ed Wilson and Frank Terpil -I What exactly was Task Force 157?
the two former Central Intelligence Agency agents ac-! According to documents obtained
cased of shipping explosives to Libya - has led tol from former naval intelligence offi-
criminal investigations on three continents, a congres-. cers; it was a "human source foreign
sional inquiry and a purge of senior U.S. intelligence I intelligence unit" staffed by "clan-
officials in the last three years. destine intelligence Case Officers."
But that may be only the beginning. !~! Task Force 157's tasks ranged from
Allegations of corruption in the traditionally top-se-. systematically infiltrating interna-
cret procurement of computers and other sophisticat- : tional maritime unions to collecting
ed electronics by U.S. intelligence agencies have been intelligence on Soviet nuclear bomb
brought to light recently by new press and govesst- shipments- It was involved in almost
meet inquiries. Such contracts are worth tens of mil- every ?rtalor intelligence operation in
lions of dollars each year to U.S. manufacturers. f the last 15 years, according to in-
The federal indictment of Wilson, Terpil and one formed sources, from the bloody
other defendant has focused on their alleged role in -overthrow of the. Allende govern-
supplying C-4 plastique explosives and military fuel orient in Chile- to HenFV Kissinger's
thickener (the basic ingredient in napalm) to Libya's secret trip to Peking in 1971. One im-
Muammar Qaddafi. Missing from the government's portant function of the group was
indictment, however, is the fact that Wilson was em- providing secure communications
ployed by the U.S. government long after he left the channels and data processing sup-
CIA. port for clandestine operations.
Interviews with former Wilson associates and a Most Task Force 157 agents worked
check of government records reveal that between 1971 for front companies - called "pro-
and 1976 Wilson was a top procurement officer for a, prietaries" - of the Naval Intelli- ,?
secret naval intelligence group known as Task Force gence Command.' These companies
157. Former Task Force 157 agents now allege that were often "nonexistent corporate
Wilson used his position on the task force both to en- entities ... created by federal offi-
rich himself and to lay the ground- cials under the guidance of U.S.
work for his later career as an export Navy auditors," according to former
"consultant" specializing in military Task Force. 157 Agent Gerald Walters.
technology. Two such proprietaries of particular
Along the way, according to Kevin interest to the computer industry
Mulcahy, a former Wilson business were Pierce Morgan Associates, , a !
associate, Wilson made a 'small for- now-defunct "computer systems
tune in kickbacks from companies consulting" firm whose offices in Al-
for which he arranged government exandria, Va., provided cover for
contracts both in the U.S. and I Task Force 157 agents, and Consul-
abroad. Mulcahy, a former CIA com- tants International, Inc., a Washing-
puter and electronics specialist hired- ton, D.C.-based import/export con-
by Wilson for his technical expertise, sulting firm.
also told a Washington, D.C., grand Wilson's Navy Job
jury that one of Wilson's best custom-
ers was Control Data Corp., the Wilson had a desk and his own staff
mainframe manufacturer. . at Task Force 157 headquarters, ac-
A spokesman for CDC denied that. 1 cording to eyewitnesses. His Navy
charge. Wilson himself is presently a j assignment included the creation of
fugitive in Libya and could not be 1 a network of corporations, many of
reached for comment. which he personally controlled, to
provide cover for sensitive .Task
Force 157 purchases and agents. Pur-
Approved For Release 2008/09/15: CIA-RDP04-00312R001001820008-4
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chases ranged from sophisticated One Wilsun/Task Force 157 compa- Confidential correspondence found I
communications and surveillance I ny of particular interest is Consul- in Consultants International files,
equipment to luxurious gifts and en- Cants International. Wilson assumed however, raises questions about
tertainment for maritime union offi- directorship of that company at the CDC's version of events. The'main-
cials and congressmen. same time he was hired by Task framer's contract with Consultants
It is virtually impossible today to. Force 157, and the company is be- 'International, for Wilson's ro'e as a private en- or example, says
P lieved to have provided cover for nothing about sales of subassemblies-
trepreneur from his work as a naval several Task Force 157 agents. in the Third World. The contract, No.
intelligence officer. Some of Wil- Interestingly, an early director of 9540-143644, describes Wilson's du-
son's companies enjoyed exclusive Consultants International was Rob- ties as simply "consulting services in
contracts as "laundries" for Navy spy ert Keith Gray, an influential Repub- the area of Department of Defense
money and equipment. Federal in- lican party figure who has served programs. Specific responsibilities
vestigators are now looking into more recently as cochairman of Pres- will be defined by the Contract Mon-
charges that Wilson routinely re- ident Reagan's Inaugural Committee, itor." According to Shaffer, such Ian-
ceived kickbacks from American ;ray now claims that he never knew guage is "standard" in CDC con-
manufacturers and foreign govern- he was listed in corporate records as tracts. However, another-person at
ments in return for procurement a board member of Consultants In- I CDC who served as-the company's
contracts 'handled by his private ternational. contact with Wilson was "flabber-
companies. Some of these contracts Another director of the firm was W. gasted" when he' saw that "a secre-
were allegedly financed by taxpayer Byron Sorrell, now a judge of the tary" had typed it into the Wilson
money allocated to hiai in his alter- Washington, D.C., Superior Court. contract, role as purchaser for Task Force , Shaffer said.
157 It is 'through Consultants. Interne- Qn CDC Payroll
tional that one gets a glimpse of the
According to Wilson's attorney, ranee of Wilson's activities involy- ! Other confidential correspondence
John Keats, Wilson is "unavailable ing the computer and closely allied between `Consultants International
for comment" on these charges. industries. It was with Consultants and CDC months after the contract
Keats, who said Wilson "retired vol- International, for example, that CDC was signed shows that Consultants
untarily" from Task Force 157, com- -negotiated a 1976 contract that is International had not received a list
mented that Wilson "denies any presently under investigation by of the parts it was supposed to sell.
wrongdoing" with respect to Task federal authorities. CDC admits that Wilson and Consul-
Force 157 procurements. Former Consultants International tants International never did sell the
During the period he was em- officer Mulcahy alleges the contract parts, but were kept on the CDC Pa
p.oyed by Task Force 157, Wilson was a cover for a scheme to bribe U.S. roll for three years nonetheless. y
purchased more than $3 million defense and intelligence procure- Be that as it may, it is worth noting
worth of prime real estate, according ment officials and gain secret mar- that CDC's strict marketing ethics
to Virginia land records. It could not 'keting information for CDC. Accord- policy was imposed only in the wake
be determined from public records ing to Mulcahy, he was a dupe, of disclosures that the company had
whether a direct connection exists during negotiation of the scheme, expended more than $4.5 million in
between Wilson's business affairs but discovered later that Wilson in- bribes and other questionable pay-
during that period and the land pur- tended to bug meetings of the U.S.
ments overseas in order to obtain
chases. Army Material Command 'and had contracts between 1967 and 1976.
Wilson's alleged abuse of his pro- several key military officers on his The company was eventually con-
curement authority to channel gov- payroll. Wilson's attorney described victed of related charges in 1978.
ernment Contracts to companies he Mulcahy's charges as "a lot of hoo- CDC was not the only major com=
set up and controlled was an impor- ey." A spokesman for CDC had a dif- puter-related company involved jn
tant factor in the 1976, decision by ferent explanation for his company's making such payments. By late 197 6,
Bobby R ai inteelligence chi association with Wilson. Wilson was Sperry Rand Corp., Honeywell, Inc.,!
bb Inman', move was opposed the ask hired in mid-1976, according to Burroughs Corp., AT&T, ITT and nu-
force. In a ppose task
in at CDC's Bill Shaffer, to market obso- merous others had been forced by
the time severe! hwas
n that ' lete subassemblies and parts for pre- the Securities and Exchange Com-
officials, who argued g
the task force was an important asset. I vious-generation computer technol- mission to admit to bribes totaling
ogy to Third World countries. tens of millions of dollars.
'Pon Hot to Handle' CDC "absolutely did not" know of
Sources familiar with the debate at any scheme to provide bribes to gov-
the time, however, told the Washing- ernment officials or bug meetings,
he maintained. Shaffer pointed to
ton Post that the spy unit had become
simply "too hot to handle." CDC's strict marketing ethics policy,
Nilson has bragged of holding a which provides for immediate termi-
controlling interest in more than 100 nation of any CDC. employee who
corporations. Some provided cover knows of such schemes and does not
employment for Task Force 157 report them; as further proof that the
agents who were paid by the govern- incidents could not have happened
ment, but worked full- or part-time Mulcahy described them.
for Wilson.
Approved For Release 2008/09/15: CIA-RDP04-00312R001001820008-4
Approved For Release 2008/09/15: CIA-RDP04-00312R001001820008-4