FORMER CIA AGENT IMPLICATED IN DP CONTRACT SCAM

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP09S00048R000100020095-7
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 22, 2016
• Document Release Date: August 5, 2011
• Sequence Number: 95
• Publication Date: November 16, 1981
• Content Type: OPEN SOURCE

rich himself and to lay the ground-
work for his later career as an export
"consultant" specializing in military
technology.
Along the way, according to Kevin
Mulcahy, a former Wilson business
associate, Wilson made a 'small for-
tune in kickbacks from companies
for which he arranged government
contracts both . in the U.S. and
abroad. Mulcahy, a former CIA com-
puter and electronics specialist hired
by Wilson for his technical expertise,'
also told a Washington, D.C., grand
jury that one of Wilson's best custom-
ers was Control Data Corp., the
mainframe manufacturer. .
A spokesman for CDC denied that.
charge. Wilson himself is presently a
fugitive in Libya and could not be
reached for comment.
'Foreign Intelligence Unit'
What exactly was Task Force 157?
According to documents obtained
from former naval intelligence offi-
cers,,it was a "human source foreign
intelligence unit" staffed by "clan-
-destine intelligence Case Officers.
Task Force 157's tasks ranged from
systematically infiltrating interna-
tional maritime unions to collecting
intelligence on Soviet nuclear bomb
shipments. It was involved in almost
every nnajor intelligence operation in
the last 15 years, according to in-
formed sources, 'from the bloody
overthrow of the. Allende govern-
ment in Chile- to Henr, Kissinger's -1
secret trip to Peking in 1971. One im-
portant function of the group was
providing secure communications
channels and data processing sup-
port for clandestine operations.
Most Task Force 157 agents worked
for front companies - called "pro-
prietaries" - of the Naval Intelli-
gence Command. These companies
were often "nonexistent corporate
entities ... created, by federal offi-
cials under the guidance of U.S.
Navy auditors," according to former
Task Force. 157 Agent Gerald Walters.
Two such proprietaries of particular
interest to the computer industry
}
'.-ere Pierce Morgan Associates, .a
now-defunct -computer systems
consulting" firm whose offices in Al-
exandria, Va., provided ? cover for
Task Force 157 agents, and Consul-
tants International, Inc., a Washing-
suiting firm. .
Wilson's Navy job
Wilson had a desk and his own staff
at Task Force 157 headquarters, ac-
cording to eyewitnesses. His Navy
assignment included the creation of
a network of corporations, many of
which he personally controlled, to
provide cover for sensitive Task
Force 157 purchases and agents. Pur-
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ARTIC' 16 N0VZ:-WE? 1981
ON
ctrvnics Und i ,c 1d
Former CIA Agent Implicated in DP Contract Scam'
By Christopher Simpson
Special to CW
The amazing case of Ed Wilson and Frank Terpil -':
the two former Central Intelligence Agency agents ac-!
cased of shipping explosives to Libya - has.led to'
criminal investigations on three continents, a congres-
sional inquiry and a purge of senior U.S. intelligence
officials in the last three years.
Allegations of corruption in the traditionally top-se-.I
cret procurement of computers and other sophisticat-
ed electronics by U.S. intelligence agencies have been
brought to light recently by new press and govern-
-tnent inquiries.'Such contracts are worth tens of mil_;
lions of dollars each year to U.S. manufacturers.
The federal indictment of Wilson, Terpil and one
other defendant has focused on their alleged role in
supplying C-4 plastique explosives and military fuel
thickener (the basic ingredient in napalm) to Libya's
Muammar Qaddafi. Missing from the government's
indictment, however, is the fact that Wilson was em-
ployed by the U.S. government long after he left the
CIA.
Interviews with former Wilson associates and a
check of government records reveal that between 1971
and 1976 Wilson was a top procurement officer for a
secret naval intelligence group known as Task Force
157. Former Task Force 157 agents now allege that
Wilson used his position on the task force both to en-
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Interestingly, an early director of 95-W-143644
describ
>
'
,
es
r lson
su-
d
Consultants International was Rob- ties as simply"consulting services in
ert Keith Gray, an influential Repub- ` the area of Department of Defense j
lican party figure who has served programs. Specific responsibilities
more recently as cochairman of Pres- will be defined by the Contract r,.on_ i
I dent Reagan's Inaugural Committee. itor." According to Shaffer, such lan..
Gray now claims that he never knew gunge is "standard" in CDC con-
he was listed in corporate records as It tracts. However, another-person at I
a board member of Consultants in- CDC who served as -th
ternatioral e company's
4 . contact with Wilson was "flabber-
Another director of the firm was W. Basted" when he saw that "a secre-
Byron Sorrell, now a judge of the i tarp" had t
e
yp
r-,
vvashington, D.C., Superior Court. ! "contract, Shaffer said.
(,.,go role as purchaser for Task Force
157. It is 'through Consultants. Interna- i
On CDC P,:yrun
Accordin tonal that one gets a Elien
to Wilson's attorney, pee of the
"unavailable range of Wilson'
g s activities involv- Other confidential correspondence
john Keats, Wilson is 'ing the-computer and closely allied between *Consultants International
for comment" on these charges. industries. It was with Consultants
Keats, who said Wilson "retired vol- and CDC months after the contract
eats,ly" from Task Force 157, tom- Intro rrational, for example, that CDC was signed shows that Consultants
mented that Wilson "denies an i ^otia`ed a 1976 contract that is International had not received a list
menteda that with n Tank presently under investigation by I of the parts it was. supposed to sell.
Force 157 federal authorities. CDC admits that Wilson and Consul
procurements. Former Consultants I
Duri
t
h
ng t
ernational
e period h w n
eas em- officer Mulcahy alleges the contract
p!oyed by Task Force 157, Wilson was a cover for a scheme to bribe U.S.
purchased more than $3 million defense and intelligence procure-
worth of Prime real estate, according men, officials and gain secret mar-
to Virginia land records
It could n
t
.
o
kti if
engnormation for CDC. Accord-
be determined from public records
whether a direct correction exists
between Wilson's business affairs
during that period and the land pur-
tants International never did sell th
e
parts, but were kept on the CDC pay-
roll for three years nonetheless.
Be that as it may, it is worth
i
not
ng
that CDC's strict marketing ethic,
policy Was imnr-,cod
..t__
o
during negotiation of the scheme, expended more lthan $4.5 million had but discovered later that Wilson in- bribes and other questionable pay-
tended to bug meetings of the' U.S. meats overseas in order to obtain
Army Material Command-and had contracts between 1967 and 19
sev k
l
era
cu.,
e y curement authority to channel gov- !
y military officers on his The company was eventually con-
oa- ernment Contracts to payroll. Wilson's attorney described victed of related charge
companies he Mulcahy's charges as "a lot of h
taut factor g- CDC was not the nls ran 1975. -
set up and controlled was an im or- I ey A spokesman for rated company
only major corn_`
n the 19w decision by CDC had a dif- puter-rel involved 4n
tans fat r intelligencce e chief n b , ferent explanation for his company's making such payments. By late 197
Bobby then-naval
6,
Inman to n chi the Adtask association with Wilson. Wilson was Sperry Rand Corp., 0
torte. Inman'; move was opposed at hired in mid-1976, according to Burroughs Co Hon_ywelt, Inc.,
Ray the a In a several hwas rtking in at Bill Shaffer, to market obso- merous others had bee ITTand nu y forced time by -ra- il' telligence officials, Who argued that fete subassemblies. and parts for pre- the Securities and Exchange C by
vious-generation omputer technol- mission to admit to bribes tctati z
the task force wad an important asset. ogy to Third World countries. - tens of millions of dollars.
'Toe, I:lot to Handle' CDC "absolutely did not" know of
Sources ftitniliar with the debate at any scheme to provide bribes.to gov-
the time, hobvaver, told the Washing- ernment officials or bug meetings,
ton Post that the spy unit had become ' he maintained. Shaffer pointed to !
simply "too hot to handle." CDC's strict marketing ethics policy,
Wilson has bragged of holding a ? which provides for immediate termi-
controlling interest in more than 100 nation of any CDC. employee who j
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
des not have happened
Mulcahy could
ment, but worked full- or part-time A4ulcahv described them.
for Wilson.
son s companies ' enjoyed exclusive
contracts as "laundries" for Navy spy
money and equipment. Federal in-
vestigators are now looking into
charges that Wilson routinely re-
ceived kickbacks from American
chases ranged from sophisticated , 2
p One ~lilsan, Task Force I57 comps- ? Confiders -ial correspondence found
communications a nd surveillance ny of particular interest is Coma- in Consultants 1n
equipment to luxurious gifts and en- tants International. Wilson assumed however, raises questions'. flout i
tertainmer,t for about
maritime union offi- directorship of that company at the CDC's version of evenw. The'main=
cia!s and congressmen . same time Ise was hired It is vir. ble coda to. by Task framer's contract with Consultants
Y Force 157, and the company is be- - International, ? for example, save
separate Wilson's ro!e as a private en- lieved to have provided cover for nothing about sates of subassemblies.
trepreneur from his work as a naval several Task Fnrrn i 97 g
manufacturers and foreign govern-
ments in return for procurement
contracts 'handled. by his private
companies.' Some of these contracts
were allegedly financed by taxpayer
money allocated to hiai in his alte
Wilson's alleged abuse of his pro-
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