BANK'S LINKS TO EX-CIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00552R000302760002-3
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 22, 2016
• Document Release Date: August 9, 2010
• Sequence Number: 2
• Publication Date: August 17, 1983
• Content Type: OPEN SOURCE

Sanitized Copy Approved for Release 2010/08/09: CIA-RDP90-00552R000302760002-3
D.RT1CLE APPEARED I
ON PAGE
WALL STREET JOURNAL
1, August 1983
Bank 's Links to Ex-CLAM
Australian Probe Ties
Defunct Nugan Hand
To Former U. S. Agents
By JONATHAN Kwtm-Y
Sial(Reporterof THE WALL STREET JOURNAL
WASHINGTON - Few men have had
more to do with U.S. covert operations in
the cold war than Theodore G. Shackley.
Before he retired from the Central Intelli-
gence Agency after 30 years' service in
September 1979, Mr. Shackley had led the
secret war against Cuba, the secret war in
Laos, been CIA station chief in Saigon at
the height of the Vietnam war and then No.
2 man running the clandestine services di-
vision at CIA headquarters in Langley,
Va.
And according to an Australian govern-
ment report. Mr. Shackley is among sev-
eral high-level U.S. spies, or former spies.
who dealt with the scandal-ridden Nugan
Hand international banking group much
more extensively than was previously
known. The group of intelligence agents
with ties to Nugan Hand also includes Mr.
Shackley's longtime CIA subordinate, Ed-
win Wilson, recently convicted of illegal
arms sales to co,. Muammar Qadhafi's
Libya
The Australian government report, pre-
pared and released to Parliament in
March by the Commonwealth-New South
Wales Joint Task Force on Drug Traffick-
ing, cites Mr. Shackley as one of the lead-
ing characters whose "background is rele?
'ant to rroper understanding of the
ac- c,: Nugan Hand group and peo?
ple ssociatec with that group...
Mr. S,AaC}ley, declined to be interviewed
for this story, but a letter from his attor-
ney says Mr. Shackley was "formally ad-
vised" by an Australian detective who
helped compile the report that he wasn't
gunshot wound in January. 1980, later
ruled a suicide, and Nugan Hand failed a
few months later.
Investigations following Mr. Nugan's
death and the failure of the bank revealed
widespread dealings by Nugan Hand with
international heroin syndicates, and evi-
dence of mammoth fraud against U.S. and
foreign citizens. Many retired high-ranking
Pentagon and CIA officials were execu-
tives of or consultants to Nugan Hand.
The Australian report says Mr. Shack-
ley corresponded and occasionally met
with Mr. Hand in "the second half of 1979."
Among the arrangements they reportedly
discussed was an aborted plan to sell
valves and flanges used in the oil industry.
That plan involved Dale Holmgren, former
manager at a CIA-owned airline in Asia,
who had become the Nugan Hand repre-
sentative in Taiwan. -
The report says several other .promi-
nent people dealt with the Wilson group
during the years. Mr. Wilson was earning
millions of dollars supplying high-technol-
ogy weapons, trained experts and explo-
sives to Libya. Among them are Donald
Beazley, president of the Nugan Hand
group in 1979 and 1980, and now president
of City National Bank in Miami, and re-
tired Rear Adm. Ear] P. "Buddy" Yates,
former deputy chief of, staff for the U.S.
Pacific command and president of the Nu-
gan Hand Bank from '197, on.
Bail Fund Proposal
Adm. Yates, who lives in Virginia
Beach, Va., as he did throughout his Nu-
gan Hand service, declined to be inter-
viewed for this story. In a written state-
ment, he denied he had ever knowingly
met Mr. Wilson or Mr. Wilson's partner,
Frank Terpil. currently a fugitive. The
Australia report says Adm. Yates met with
Mr. Wilson, and later with Mr. Terpi!. to
discuss Nugan Hand participation in port
and airport construction projects in Libya.
A deal never materialized.
The report also says that Adm. Yates
was approached to establish a $1.4 million
the A
factioi
ties a
Beazl
beca
City
is no
suits
ing o
throw
Coffee charges and Mr. Beazley has said he isn't
affected by the sinks against Mr. Duque.)
The new Nugan Hand report raises par-
ticular questions about Mr. Beazley's 1980
purchase of a London bank- (The bank was
then known as London Capital Securities
Ltd., it was best known under its former
name, Stonebouse Bank, because of an
earlier financial scandal, and is currently
known as City Trust Ltd.) The purchase
began as a Nugan Hand acquisition, and
concluded with Mr. Beazley "as the nomi-
nee for" a Cuban-born former CIA con-
tract agent named Ricardo Chavez, and
possibly other members of Mr. Wilson's
group, who apparently used Nugan Hand
money, the report - says.
Sale to Libya
Mr. Chavez was in the CIA's anti-Castro
program, which Mr. Shackley helped su-
pervise. At the time of the London banking
deal, both Mr. Chavez and Mr. Shack)e'
were working for A.P.I. Distributors, an
international 'trading firm funded with
$500,000 lent by Mr. Wilson. According to
the report, it shared office space in Hous-
ton with a Wilson company that helped sell
20 tons of plastic explosives to Libya, for
which Mr. Wilson was convicted. A.P.I.
was headed by Thomas Clines, who had
just retired after 30 years with the CIA,
most recent),- as training director of the
clandestine services branch under Mr.
Shackey. Another former coven agent,
Rafael "Chi Chi" Quintero, also was an ex-
ecutive at A.P.I.
The report says Mr. Beazley helped run
the London bank for Mr. Chavez until Mr.
Beazley resigned in October 1980 to run
Gulfstream Banks in Florida. It says that
Mr. Chavez was "quite likely" little more
than a nominee for Mr. Clines in the Lon-
don bank, as Mr. Chavez himself lacked
funds.
The report says Mr. Beazley purchased
the London bank with $300,000 in cash and
travelers checks brought by Maurice Ber-
nard Houghton, a mysterious Texan who
showed up in Australia as a saloon impres-
sario during the Vietnam war "R and R"
program, and stayed to become a Nugan
Hand executive. Mr. Houghton was inexpli-
suspected of illegalities. bail fund through Nugan Hand for interna-
Contacts with Michael Hand tional dope couriers caught in the U.S. The
The report says that Mr. Shackley had money was to be deposited overseas and
worked closely with Mr. Wilson in the CIA drawn out in the U.S.
since 1965 and that Mr. Shackley "contin According to the report. Adm. Yates re-
ued a close relationship with him (Wilson) ' jected the proposal, saying it would be le-
whilst Wilson was employed by (U.S.) Na gal but bad for Nugan Hand's reputation.
" from 1971 to 1976, "and The report says Adm. Yates couldn't recall
val intelligence" investigators who
after that." The report refers to contacts made this proposal.
between Mr. Shackley and Michael Hand, Mr. , has y, in said interviews iews with this
the currently missing former CIA operator newspaper, Nugan Hand
who founded, owned and managed the Nu- affair began that he was unaware of any
gan Hand banking group. Mr. Hand's part- wrongdoing at the bank or any involve-
ner, Australian Frank Nugan, died of a menu with intelligence organizations. But
,C0.Ar LNUED
Sanitized Copy Approved for Release 2010/08/09: CIA-RDP90-00552R000302760002-3