AUSTRALIAN MYSTERY FALL OF A BANKING FIRM SPOTLIGHTS THE ROLES OF HIGH U.S. OFFICIALS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84B00049R000902240019-0
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 4
• Document Creation Date: December 19, 2016
• Document Release Date: March 31, 2006
• Sequence Number: 19
• Publication Date: August 24, 1982
• Content Type: OPEN

OPE -ATIONSAp -Fg RAENT & 6F4 Foo1s@G/
News Bulletin WALL STREET JOURNAL,
Australian M y'stery This
that the
Fall of a Banking Firm work for
cial denia
refusedt
Spotlights the Roles- central ?d
tics.
Of High U.S. Officials hard t? r
tial recor
d
Frank Nugan's Violent Death ter the
telephone
tar
Opens Lid on Odd TrbLffic thew?
three-star
taz
rei
Ili Dope, Foreign Funds trolly n
forces in
24 August,
page 1.
24 August 1982
Item No. 1
h
as convinced many Australians Mr. Moloney in a recent interview said.
company was involved in secret "Sure, I advised Hand to take documents
the U.S. government. Despite offi- out .of the office. I was told there were seri-
fs from Washington, the issue has ous deficiencies in the accounts. Eve
die and has become one of the rything
ebating points in Australian poll- I did I talked about with Yates first." (Adm.
Yates refuses to discuss any part of his ac-
e of U.S. investment may be tivities with Nugan Hand.)
solve '
e
because many of the essen? a, A few months later, on April IL 1980, Nu-
d
s
were destroyed. Within hours af- gat Hand went into liquidation. And the se-
iscovery of Frank Nugan's body, carets that were so frantically being de-
s
an ringing urgently all over stToyed after Frank Nugan's death began to
One was an the desk in Manila of b& reconstructed. Exposed to view, like
U.S. Gen. LeRoy J. Manor, the re- maggots, were dozens of affiliated corpora-
red chief of staff for all U.S: dons, with little or no real assets, that Nu-
Asia and the Pacific. After his re-- gait Hand had set up to help its clients avoid
tirement, Gen. Manor had been on secret taxes and move money overseas secretly
-duty for the Air Force and at the time of and often illegally. Mr. Nugan had boasted
Politicians ChargeCdver-Up Mr. Nugan's death he was helping run Nu- that Si billion a year passed through these
gan Hand's Philippine office. companies.
By JONATiiAN KwiTNY Ransacking the Flies *Still unanswered Is the question of why so
StafJReponeroj Ts~ WA:,.. Sriu, r JUiJ NA..
According to Nugan Hand's public rela- rpany high-ranking U.S. military and intelli-
SYDNEY, Australia-At 4 a.m. Sunday,
liens man. Tony Zortlta, Gen, Manor called gene officials were working for the corn-
Jan. 27, 1980, a police sergeant and a consta-
him and told him to stop the wire services pony. The CIA has denied involvement, and
ble, according to their testimony, were pa-
from reporting Mr. Nugan's death. Mr. thb State Department says that Nugan Hand
trolling a lonely stretch of highway 90 miles
Zorilla says he replied that this would be un- wasn't any way a U.S. eenmper
ethical and impossible, But liquidators of th
e company and
from herie when they spotted the parking and
possible, and he refused. various Australian law-enforcement officers
lights of a Mercedes on an old road off in the
(Gen. Manor would describe his activities express anger and bewilderment that the
woods. Inside the car, slumped across the
with Nugan Hand only in general terms, and CIA, the FBI and the U.S. Customs Service,
front seat in a puddle of blood, was the body
he wouldn't discuss this Incident.) all of which have information on Nugan
of a 37-year-old man with a new rifle in his Halfway around the world, Rear Adm. Hand, have refused to release it to help'
hands.
elp in
Earl P. "Buddy" Yates, the recently retired the current criminal and civil investiga-
They searched his pockets and found the
chief of staff for strategic planning for U.S. tions.
business card of William Colby, the former
forces In Asia and the Pacific, heard the "
news and immediately jetted to Sydney. Nu- "It has osomeng u ,"s says that the somebody
gan Hand's main office. Adm. Yates was the covering something q; tor he court.
is the first of a series of
Australian liqui dator, John W.
This president of Nugan Hand. though he lived in O'Brien.
articles Virginia Beach, Va. En route to Sydney, he rien.
met Nugan Hand's vice- chairman, Michael h From its base in Sydney, Nugan
u Hand
U.S. director of central intelligence. On the Hand, a highly decorated Green Beret dur- od opened including at least
four offices around the
back of the card was the itinerary of a trip Ing the Vietnam War and a former U.S. in- company failed, fouin the U.S. After red
Mr. Colby planned to make to t,sia in the tell'gence o
peiative, comLig from London. in f om y dia u is who ha messaged money
next month. The two policemen also found a They raced to the Nugan Hand office and in from tmarket in who had n sd money
Bible with a meat-pie wrapper interleaved with a few other insiders began ransacking at
sold baboye- Nugan i Hand terest and and rates who es in stoodito
at page tit; on the wrapper were scribbled the files. now sofficial
fd to
the names of Mr. Colby and U.S. Rep. Bob According to witnesses, enough records shortfall everything.
reach say the Wilson of California. then the ranking Re- tin stfall could many Ser million. The von
publican on the House Armed Services Com? to fill a small room were fed to a shredder. time include many Amertcans, not only on
miller. Others were packed in cartons, with every- the U.S. mainland but also at construction
All this might sound like the one helping, and carried at night to the back sites in Saudi Arabia and at military bases
beginning of room of a butcher shop owned by Robert W.
a Hollywood spy movie, but the studios and legations throughout the Far East, Ha-
Gehring. in
would have to assign their most imaginative naa
m. Mr a fhringr Army sergeant Ber wait and the Pilino Mr. Gehring worked for Maurice er ppmes?
scriptwriters to produce a tale as startling nard Houghton, a mysterious Texan who has Nugan Hand carried out its operations
a; the real-life events that have followed owned several bar-restaurants in Sydney with intense secrecy. Cables and interoffice
that grisly discovery more than two years and who had played an active role in Nugamessages were In code and often were
ago. The body was quickly identified as that Hand's affairs since its inception in 1973. marked "Destroy After Perusal." Company
of Frank Nugan, the chairman of a group of employees
companies
companies affiliated with the private Aus- A Lawyer's Advice ' and customers were referred by
banking concern with
Hand Ltd. Mr. Houghton not only joined the rape of by coded serial numbers rather than by
trali . banking of Nugan have Hand to. the files, but also brought his lawyer, Mi? name, and even references to foreign cur-
Since terhanen i :e cone t--' o amazing swindle Otto' chael Moloney, to direct it. According to the rencies were disguised: "Oats" stood for
testimony of Stephen K. A. Hill, a Nugan francs, "grains" for U'S. dollars and
spanned six co:itinents and bilked investors Hand director who gan so forth down to "berries" for Porto
out of millions of dollars. joined the record rifling escuedos gorse
A Political Issue that week, Mr. Moloney urged the group on
by warning, "I am fully aware of what has An Impossible Job
More perplexing yet, evidence-has turned been going on. You all face jail terms of up 1-This, plus the obvious pimoniness of many
up that Nugan Hand bank was deeply in- to 16 years." c f the transactions carried on between corn-
volved in moving funds about the world for According to Mr. Hill's testimony, the ponies within the Nugan Hand galaxy,
big international heroin dealers and also burly Mr. Hand then broke in to say that if tsakes the job of settling claims by creditors
might have been involved in the shady world Mr. Moloney's orders to sanitize the files be. almost impossible. "We wouldn't be able to
of international arms traffic. To cap it off, fore the law arrived weren't followed, "ter- ilay 1076 " on outstanding claims, says a liqul-
the offices of Nugan Hand ar4 its affiliat Able
were loaded with former hip~/ For Rele 0X/0VretM % n 149Rd~'t 30~$~044$ Les aren't even bothering
military and intelligence officials and pieces." i,. ,+,0 ;/
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~,,pRroved
% A L/' ) )"/ y`5% c'./C'V
to file claims, apparently fearful that to do
so would expose them to prosecution for file-
~deals carried out with the aid of Nugan
Cdurrently, liquidators In. Sydney. Hong
'ong and the Cayman Islands are investi-
gating the company, and often working at
?oss purposes, seeking to recover assets.
Criminal investigations are being conducted
yy- the New South Wales attorney general's
office and by a joint task force of the New
South Wales police and the Commonwealth
police. The Royal Commission on Drugs ran
ipto Nugan Hand so much that it has recom-
t~tended a separate Royal Conunission be
aytpointed just for Nugan. Hand.
-In June 1980. Mr. Hand. disguised and us?
hg a Pbeny Passport. flew to the U.S., ap-
phrentiy via Fiji and Vancouver. He hasn't
been seen since.
Leaving. Australia about the same time
c Mr. Hand was his closest friend and ad-
viser, Bernie Houghton. Mr. Houghton has a
broad acquaintanceship with many high-
ranking U.S. officials. As a civilian, he dar-
ingly traded goods all over the southeast
4sian war zone in the 19606. Though his res-
taurant is in a sleazy district of Sydney that
$warms with prostitutes and sex shows, he
has frequently welcomed congressmen, CIA
gfficials and military brass there. A few
weeks before Mr. Nugan died, Mr. Houghton
played host, at a luncheon and later a din-
ner, to five members of the House Armed
Services Committee who were in Australia
to inspect defense and intelligence-gathering
facilities. He arranged for Rep. Wilson and
another congressman and their wives to
dine with Mr. Hand. Last year, Mr.
Houghton returned to Australia, Authorities
have questioned him at length, but he avoids
reporters.
Exhuming a Body
;With the scandal refusing to the down in
Australia, reports began to circulate that
the body in Frank Nugan's grave wasn't his
and that he was still alive and hiding out in
the U.S. Once he was reported having been
seen in a bar in Atlanta. Finally, in Febru?
ary 1981, officials ordered the body ex-
bumed. With gruesome diligence, Australian
TV covered the event by interviewing prac-
tically everyone in the area. ("Some are
dry, some are wet," one gravedigger told in-
terviewers, complaining that Mr. Nugan
was "wet" and therefore "very messy.") A
dentist definitely identified the remains as
those of Mr. Nugan.
Stymied by the lack of progress in the in.
ivestigation of the company's affairs, the Na-
tional Times, an Australian newspaper, Petl-
itioned the FBI under the U.S. Freedom of
Information Act for information it had on
Nugan Hand. The newspaper was told that
bf some 151 pages of material in FBI files, it
'could see 71. But when the papers arrived,
they resembled a collection of Rorschach
tests, with page after page blacked out in
heavy ink and bearing the notation "B-1;
Approved For
indicating that disclosure would endanger
U.S. "national defense or foreign policy,"
What was left was a few pages of more or
less routine information, such as a copy of a
Nugan Hand subsidiary's petition for incor
poration in Hawaii.
In response to more-official Australian
demands, the State Department sent a two.
man FBI delegation to Sydney in April, 19V_
But the two men stonewalled, telling law-en-
forcement officials that the FBI had already
given its information to an appropriate Aus-
tralian agency: they wouldn't say which
agency or re-release the material. Austra-
lian state and national police investigating
Nugan Hand say that they have never re-
ceived the information. The only other likely
recipient would appear to be the Australian
e
Security Intelligence Organization (ASIO), a
secret counterspy group that long has
worked closely with the CIA.
By law, ASIO can give information only
to Prime Minister Malcolm Fraser or his at-
torney general. Mr. Fraser says the U.S. has
assured him that it had no connections with
Nugan Hand, and he has rejected opposition.
Party demands for a top-level probe. But the
continuing parliamentary debate could re.
kindle the once-hot political controversy
over vital CIA bases here. These bases
mon-
itor U.S. satellites watching the U.S.S.R.
and China and direct the U.S.'s nuclear sub.
marines.
The opposition Labor Party-which now
leads Mr. Fraser's Liberal Party in some
polls-has openly questioned whether the
CIA, through ASIO, helped topple Aus-
tralia's last Labor government, led by
Prime Minister Gough Whitlam
Th
CIA
.
e
has denied this. Now suspicions have been
raised that Nugan Hand, which handled en-
ormous amounts of money, may have hw+n
When Vice President George Bush visited
Australia this April, Labor Party leader Bill
Hayden-a strong possibility to become
prime minister-used his 30-minute meeting
with Mr. Bush mostly to press for the re-
lease of details on the Nugast Had and
Whitlam affairs. Mr. Bush only gave his as-
isurances that the CIA wasn't involved in ei-
Jther matter. Mr. Bush was the CIA director
in 1976, succeeding W. Colby, who later was
to become a lawyer for Nugan Hand.
A S
?winuuas or a government cover-up
could be heightened by a disclosure by Aus.
tralian liquidator O'Brien. He says that he
has learned from the government-run tele-
phone company that Frank Nugan's phone
conversations were secretly recorded the
last two years of his life on a device in-
stalled at the phone company. apparently by
a government agency. Mr. O'Brien says
phone-company officials have told him that
the tapes-which s
Who wa behind Nugan Hand-aren't ttatt the .
company anymore.
Wiretap authority is tightly restricted in
Australia, being allowed only in cases in-
volving national security or narcotics inves-
tigations, according to the Commonwealth
attorney general's office. State and national
police have reported that they don't know
anything about a wiretap on Mr. Nugan.
Again, this points the finger at ASIO.
Australian immigration records show
that a senior ASIO official, Leo Carter,
vouched for Nugan Hand's ubiquitous Mr.
Houghton when he entered Australia in Feb-
ruary 1972 with an expired visa. On ASIO's
word, Mr. Houghton received a visa allow-
ing rim to come and go from Australia at
will. Mr. Carter has died, and ASIO won't
comment on this.
Presumably the most sensitive of Nugan
Hand's records were shredded right after
Mr. Nugan died. But the remaining records
bold many suggestions that the company
may have been much more than a banking
venture.
Notes on Troop Movements
The records contain long, periodically
filed reports about military and political ac-
tivities, mostly in Kampuchea (Cambodia),
but also In Laos, Vietnam and Thailand.
There is no concrete evidence that Nugan
Hand was an active participant in U.S. co-
vert operations. However, these detailed re-
ports of troop movements appear unconnec-
ted to any banking or business activity.
They were prepared by Nugan Hand's Bang-
kok representative, John Owen, a former ca-
reer British navy officer, and bear notations
that they were to be shown to Mr. Hand.
The files also show that Nugan Hand
worked on big international arms deals,
though it isn't clear what, if anything, was
shipped.
For example, there were proposed trans-
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one letter, Prince Panya took three pages to
list available weapons. including missiles,
light and heavy armor, tanks, combat heli-
copters and F-104 lighter planes and naval
patrol planes. Nugan Hand memos indicate
that the weapons were intended for delivery
to Indonesia and Thailand. They also discuss
creation of a private. freight-oriented airline
.in Southeast Asia (to be calied "Sky of
Siam") and other deals with Prince
Panya.
Memos show that in 1975 Mr. Hand was
arranging the sale to Rhodesia of recoilless
rifles, mortars, grenade launchers and ma-
chine guns, and was negotiating for ship.
ments of Rhodesian ivory.
Mr. Houghton has acknowleged in testi-
mony that iu 1979 he met in Switzerland with
Edwin Wilson. the former CIA officer who is
now In U.S. custody. who is charged with
selling -explosives in Libya and who is al.
leged to have supplied trained men, arms
and technology to Libya and other military
buyers. A former Nugan Hand representa.
tive in Thailand. Neil Evans, has testified
that Mr. Wilson went to Bangkok to discuss
arms deals with Mr. Hand. Other Nugan
Hand officials, however. deny Mr. Evans's
story.
There seems no denying, however, that
Nugan Hand was heavily involved with drug
dealers. Murray Stewart Riley, a former
Sydney policeman now serving time in Aus-
tralia for attempting to import a boatload of
marijuana from Thailand, was a regular
customer of the firm. So were Riley's asso-
ciates, who deposited drug money in Sydney
and withdrew it in Asia.
Riley's business was brought to the bank,
according to extensive testimony, by Harry
Wainwright, a former San Francisco crimi-
nal lawyer who fled to Australia in 1973 after
being indicted in the U.S. for income-tax
evasion.
Testifying from prison two years ago for
an Australian Royal Commission looking
into drug trafficking, Riley said his heroin
and marijuana imports were intended for
!the U.S. market. In the words of the corn-
mission, he said "that he had been informed
that Nugan Hand offered a facility to trans-
fer funds from Hong Kong to the United
States."
Over $1 Million of Drugs
Investigators say that they have traced
about $230,000 that Riley moved to Asia via
Nugan Hand and that they believe the final
figure will exceed $1 million. They say they
believe that much of the heroin was trans-
shipped to the U.S. in containers that were
repaired by a dockside welding firm in Aus-
tralia that was closely tied to the dope deal-
ers. They believe that another heroin ring
tied to Nugan Hand used a similar sys-
tem.
Apart from their connection with the
bank, Michael Hand and Frank Nugan had
been viewed suspiciously by narcotics
agents for some time. As early as 1973, the
Australian Narcotics Bureau began a We on
Mr. Hand based on reports that he and K.L.
"Bud" King. a former pilot for Air America
airline had been flying dope in from Asia to
an Australian airstrip. Air America was a
Vietnam war-era airline, with close connec-
tions with the CIA. U.S. drug-enforcement
officials now acknowledge that the airline
also occasionally ran heroin out of Southeast
Asia's famed "Golden Triangle" poppy-
growing area.
The landing strip Involved in the 1973
Australian Narcotics Bureau report was on
a real-estate development promoted by
American singer Pat Boone and financed by
millionaire shipping magnate D.K. Ludwig.
Mr. Hand had worked as a salesman for the
project for several years after he came t,-,
Australia in 1967 and later asserted that he
bad made a fortune from his land sales.
The report of the illegal drug flights
came from a lawyer representing Mr.
King's housekeeper. Mr. King, who also
worked for the Boone-Ludwig project, has
since died in a fall. The report was released
recently among many files turned over to
the Australian parliament by three former
narcotics officers who contend that the nar-
cotics bureau covered up information on Nu-
gan Hand drug dealings.
Meeting an Opium Overlord
Other released files include information
on alleged Nugan Hand drug deals supplied
by Andrew Lowe, formerly Sydney's biggest
heroin dealer (by his own assessment), who
recently completed a prison sentence for his
dope deals. Mr. Lowe has testified that he
arranged a meeting between Mr. Hand and
Khan Sa, the Golden Triangle's biggest
opium overlord, though there is no way to
verify that.
Through meticulous police work, how-
ever, Australian officials have documented
in a still unreleased report a series of trans-
actions tying Nugan Hand not only to drug
dealing but also possibly to a series of con-
tract murders in which the so-called Mr.
Asia heroin syndicate eliminated at least
three persons who were informing Austra-
lian police about drug activities. Authorities
say the -"Mr. Asia" group's heroin circu-
lated in the U.S. and elsewhere and brought
at least $100 million cash to the syndicate's
operators.
. According to testimony from dope ring
and bank Insiders, corroborated by tele-
phone logs and other evidence, the syndicate
was linked to the bank through a two-man
Sydney law firm that represented both Mr.
Nugan and various members of the heroin
syndicate. The firm's senior partner, John
Aston, used Nugan Hand for personal finan-
cial dealings and helped bring in other cli-
ents. And the law office was used as a drop-
:off point for bank clients who wished to re-
main secret; they left parcels of cash or
other items at the law office for pick-up by
bank representatives.
One parcel that bank director George
Shaw, a major operational figure at Nugan
Hand, says he picked up at the law office
March 26, 1979, contained $2&5,000 in small
bills. This money has been traced through a
laundering process involving a soft-drink
firm that Nugan Hand had acquired (appar-
ently because it dealt in big quantities of
cash) and through accounts at different
banks in Hong Kong, New York. Boston and
Singapore.
Eventually the $285,000 was paid out in
checks from Nugan Hand's Singapore office
to a man identified by British police as the
Singapore leader of the heroin syndicate,
The payout was personally arranged by Mr.
Hand in Singapore as instructed to a coded
telex from Mr. Nugan in Sydney. This com-
plicated money movement was a standard
procedure Nugan Hand used for clients
wishing to evade Australia's strict currency
control laws, designed to keep capital at
home.
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f f 0r cAL/ /J u/y77ey_________________
Admirals, Generals, Ex-CIA Men Took
Prominent Roles in'Nugan Hand Bank
? SYDNEY, Australia-Enough top-rank-
ing U.S. military and intelligence officers
worked for Nugan Hand to run a small-
sized war. The list includes:
ADM. EARL "BUDDY" YATES, a 1943
graduate of the U.S. Naval Academy, I.e-
glon of Honor winner in Vietnam, and com-
mander of the aircraft carrier USS John F.
Kennedy. Then he was the chief of staff for
plans and policy of the U.S. Pacific Com-
mand, in charge of all strategic planning
from California to the Persian Gulf. until
his retirement In July 1974. He became the
president of Nugan Hand bank early in
1977. recruited by Maurice Bernard
Houghton, who apparently is an old
friend.
GEN. LEROY J. MANOR, the chief of
staff for the entire Pacific Command until
he retired in July 1978 to undertake new
duties that the Air Force says are so secret
that it can't talk about them. These duties
are generally known to have included ne.
gotiating the 1979 agreement with the Phil-
ippine government for continuance of the
U.S. military bases there (which Gen.
Manor used to command) and Investigat-
ing the failed hostage rescue raid in Iran
In 1980 (an assignment that apparently
stemmed from his having designed and
commanded the 1970 raid on a North Viet-
namese prison camp that failed to find any
U.S. prisoners). A much-decorated Air
Force th_?ee-sta: general, he also had been
the special assistant to the Joint Chiefs of
Staff at the Pentagon for "counterinsur-
gency and special activities." He joined
Nugan Hand's Manila office, allegedly to
run it (which he denies), in 1979.
GEN. EDWIN F. BLACK a 1940 gradu-
ate of West Point He entered the Office of
Strategic Services (OSS), which later be-
came the CIA, and was the OSS com-
mander in Berlin. He was the chief admin-
istrative aide to and frequent chess oppo-
nent of Allen Dulles, who became the head
of the CIA. He was the wartime boss and
then tennis partner of Richard Helms, who
also became the head of the CIA. He was
on the National Security Council staff un-
der President Eisenhower and later the
commander of all U.S. troops in Thailand
during the Vietnam war, before becoming
assistant Army chief of staff for the Pa-
cific. He retired in 1970 to become execu-
tive vice president of the Freedoms Foun?
dation in Valley Forge, Pa., a group pro-
moting conservative politics. He also
worked for LTV Corp.. an Important CIA
contractor. In 1977, he became the presi-
dent of Nugan Hand Inc., Hawaii, and spe-
cial representative of the overall organiza-
tion_ makinv frequent trine to Acin uo
Nugan and Hand. He, in.`furn, introduced
them to Mr. McDoaald.?Mr. Pauker says
he wasn't involved in any-completed deals
for the bank.
DALE HOLMGREN, a former U.S.
:Army officer in Taiwan who became man-
ager of flight services for Civil Air Trans-
port, a CIA-run airline in the Far East. He
then went into business in Taiwan. He
opened the Nugan Hand branch in Taipei
in 1978 as a one-man representative. Adm.
Yates once said that Mr. Holmgren had
long worked with the U.S. military in Tai-
wan to develop "within the social structure
of the Chinese in Taipei a close relation-
ship with the U.S. military forces and the
business and government community."
Adm. Yates also said that Mr. Ho)mgren
had worked for Nugan Hand without pay at
least for a while because he had an inde-
pendent income.
ROBERT "RED" JANSEN, a former
CIA station chief in Bangkok who advised
Thai governments through almost daily
meetings with the prime minister in the
early 1970s, according to persons close to
them. He worked for Nugan Hand there in
1978, although he apparently severed his
relationship that year (according to a col-
league. because he was warned by the U.S.
embassy that his presence at the bank had
aroused suspicioni. Mr. Jansen apparently
has an unlisted number and couldn't be
reached or comment.
Approved For ReleaV- introduced
tes 498000902240019-t) him to Messrs.
says he was recruited by Adm. Yates and
another admiral.
GEN. ERLE COCKE JR., whose entry
In Who's Who in America says that during
World War II he was "prisoner of war
three times, actually 'executed' by a Ger-
man firing squad and 'delivered the coup
de grace but survived 1945." He held vari-
ous posts with the Defense Department
and as an executive with Delta' and then
Peruvian airlines. He is a former national
commander of the American Legion. hon-
orary commander of the Nationalist Chi-
nese Air Force and holder of the French
Legion of Honor and top medals from
Spain, the Philippines and Italy. Now listed
as a retired menwral -4th the U.S. National
Guard and a consultant. His consulting of-
fice served as Nugan Hand's Washington
office.
WILLIAM COLBY, the U.S. director of
central intelligence, 1973.76. He ran intelli-
gence programs in Vietnam during the
war. In 1979 and 1980, as a lawyer with the
Wall Street firm of Reid & Priest, he
worked for Nugan Hand on a variety of
matters-tax problems; the Foreign Cor-
rupt Practices Act; an abortive project to
relocate Indochinese refugees on an island
in either the Caribbean or the Pacific; an
attempt to take over a Florida bank; the
operations of Nugan Hand's mysterious
Panama branch. and the problems sur-
rounding Mr. Nugan's death. Mr. Colby
submitted $46,000 in bills, which weren't
paid. A $10,000 check for his retainer was
Issued but never cashed.
WALTER McDONALD, a career CIA
officer since 1975 and deputy director in
charge of economic research from 1972 to
77. Then, while still In 'the CIA. he helped
his former boss, onetime CIA Director
James Schlesinger, set up and run the U.S.
Energy Department. - He served . on the
National Foreign Intelligence Board, the
senior advisory group in the intelligence
community. He announced his retirement
In 1979, went Into consulting and almost
Immediately by his own account began
spending most of his time with Nugan
Hand, traveling in the U.S. and Europe
with Mr. Nugan and talking with him
daily.
GUY PAUKER, a Rand Corp. staff
member who has advised the CIA and
other government agencies since the 1950s,
although he denies reports that he is a ca-
reer employee of the CIA. Mr. McDonald,
whom he calls his "good friend," once said
that Mr. Pauker has long bad frequent per-
sonal access to White House national secu-
rity advisers, including Henry Kissinger
and Zbigniew Brzezinski. Mr. Pauker went