SELLING OUT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00965R000504170004-4
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 9
• Document Creation Date: December 22, 2016
• Document Release Date: January 11, 2012
• Sequence Number: 4
• Publication Date: April 13, 1986
• Content Type: OPEN SOURCE

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ON PAGE 13 April 1986
SELLING
IKE MOST PEOPLE,
I first read about Edwin
P. Wilson in the newspa-
pers in 1981. He was said
to be a former operative
for the Central Intelli-
gence Agency who had
placed himself in the
service of the Libyan
dictator and godfather of
international terrorism,
Col. Muammar el-Qaddafi.
In these accounts, Wilson was portrayed as a
mysterious figure, sort of a Great Gatsby of the
espionage world. What especially caught my eye
was that he owned a huge estate called Mt. Airy
Farms in the fashionable northern Virginia hunt
country - an estate, I would learn, that abutted
those of neighbors like the tycoon Paul Mellon,
Virginia's Senator John Warner and his then-
wife Elizabeth Taylor and Jack Kent Cooke, the
multimillionaire owner of the Washington
Redskins.
Wilson had acquired the estate while still in
the United States intelligence service, and I
wondered how this could be. I knew that C.I.A.
pay grades were the same as those for other
Federal agencies and departments. Then I dis-
covered that the most Wilson had ever gotten in
salary from the C.I.A. was $25,000 a year, and
that his salary in his later employment with
an ultrasecret Navy spy operation known as
Task Force 157 never rose higher than $32,000
annually.
Just a decade before, I had begun work on
"Serpico," the storyof the brave officer who had
exposed pervasive corruption in the New York
City Police Department. Even in those bad
days, a cop who suddenly bought a house on a
couple of acres in the suburbs with a pool, say,
or a tennis court would have at least attracted
some raised eyebrows. At least some questions
would have been asked.
All told, Wilson's net worth was more than $15
million, including approximately $1 million in
numbered Swiss bank accounts and South Af-
rican gold. Yet nobody in the dark, sensitive, se-
curity-conscious circles in which Wilson moved
seemed to care how any of this had been made
possible.
The C.I.A. remained silent about Wilson,
where he had come from, what his role in the
agency had been. But as his name continued to
be embarrassingly coupled with the C.I.A. in
headline after headline, other stories, attributed
to unnamed intelligence sources, started ap-
pearing - in the news media and then in a book
by a Washington author, Joseph C. Goulden -
that dismissed Wilson as a fringe player whose
How an Ex - C.I.A. Agent
Made Millions
Working for Qaddafi
low-level agency contract was subject to re-
newal every couple of years. According to these
accounts, Wilson had been recognized early on
as a rotten apple and had been promptly tossed
out.
When I began researching "Manhunt," about
the eventual pursuit and capture of Wilson, who
by then had become an international fugitive, it
was crucial to know what his true role in the
C.I.A. had been, how he had operated in its
ranks, and to determine what circumstances
within the agency itself had apparently allowed
him to slip so easily and so profitably into his
terrorist activities. Did he have confederates?
Was he an aberration?
Although my previous investigative work had
led me into areas of organized crime as well as
law-enforcement and political corruption, my
sole connection with the spy business had been
when I was a reporter and the C.I.A. tried to re-
cruit me in hopes of using my journalistic
credentials for its own purposes.
Still, I had developed trusted sources over the
years, and through them I met others who ena-
bled me to gain access to classified documents
that detailed Wilson's intelligence career. These
included career summaries and evaluations
from the C.I.A. and the Office of Naval Intelli-
gence, as well as reports by the Federal Bureau
of Investigation; the Bureau of Alcohol, Tobacco
and Firearms; the Defense Investigative Serv-
ice, and the C.I.A.'s Office of the Inspector
General.
Through these documents, and through dozens
of interviews with people who had worked or
dealt with Wilson, I discovered that he had in
fact been a highly valued agent who had not
been fired at all, but rather had left the C.I.A.
because he wanted to. Even more astonishing, I
learned that for a long period of time both the
C.I.A. and the F.B.I. had a very good idea of
what Wilson was up to in Libya and had done es-
sentially nothing to stop him.
Far from hindering his activities, in fact, the
traditions and procedures of the intelligence
community were in many ways Wilson's great-
est asset, even after the true nature of his deal-
ings was disclosed. Although the personal char-
acteristics that were to shape Wilson's career
were evident even before he joined the C.I.A.,
the agency afforded him the opportunity to act
upon those traits, especially when he got into
covert paramilitary operations. There he
learned the fine art of falsification, of creating
dummy business entities, of moving funds
through the international banking system so
they couldn't be traced.
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Wilson became adept at manipulating the
agency's internal practices for his own benefit
- its reverence for achieving results regardless
of the means required, and its "compartment-
ed" structure, which forbids intelligence offi-
cers to inquire into each other's activities. And
when he started getting bad press notices, he
skillfully exploited the "us-versus-them" syn-
drome that so characterizes the agency in the
face of outside criticism - in the same way the
police banded together in a conspiracy of silence
during the Serpico revelations, despite clear evi-
dence of massive corruption.
To this extent, Wilson's story invites alarming
questions about the ongoing potential for abuses
within the C.I.A. and other American intelli-
gence organizations. The ease with which Wil-
son was able to misuse his intelligence training
and connections for private gain, and his suc-
cess in winning the cooperation and complicity
of other officials who were eager to cash in on
their influence, raise the likelihood that his case
was no aberration. The inability or unwilling-
ness of the C.I.A. and other intelligence agencies
to police themselves threatens to insure that
Wilson's dangerous brand of espionage and en-
trepreneurship will pose a continuing threat to
the integrity of the intelligence community -
and to American lives and interests abroad.
EDWIN WILSON WAS
born into a dirt-poor
family in Idaho in 1928.
In high school, he was a
member of the Future
Farmers of America.
Still a teen-ager, he
shipped out as a sailor in
the merchant marine in
the Pacific. He worked
his way through the Uni-
versity of Portland, a Catholic school run by the
Holy Cross order. It was, he told me, the first
time he had seen men wearing "dresses." As a
Marine Corps lieutenant, he arrived in Korea
after the fighting was over, but tore up his knee
so badly leading a patrol along the demilitarized
zone that he was informed that he would be dis-
charged with a 10 percent disability.
Hitching a ride on a Navy plane to Washington
in an effort to save his commission, Wilson
began telling a civilian passenger next to him
about his past. The man said that if things didn't
work out with the Marines, Wilson ought to give
some thought to the C.I.A. The agency might be
in the market for someone like him, the man
said, without identifying himself, and he gave
Wilson a contact number and name to call.
Wilson filled out a personal history statement;
underwent a battery of medical and psychologi-
cal tests, scoring well as the kind of adaptive,
self-reliant, action-oriented personality the
C.I.A. especially prizes, and waited while a
lengthy security check determined that he was
"a person of good character, of the highest in-
tegrity, opposed to Communist ideals and loyal
to the U.S." Finally, he passed an exhaustive
polygraph examination designed to ferret out
what intimate secrets might still remain hidden,
and formally joined the C.I.A. on Oct. 27,1955.
cers at a remote Air Force base in the Nevada
desert north of Las Vegas, listening as the leg-
endary director of the C.I.A., Allen Dulles, told
the officers that they were embarking on a mis-
sion that would revolutionize the gathering of in-
telligence, and forever change its nature.
Behind Dulles as he spoke, so ungainly on the
ground with its long, drooping wings, was what
the Russians would come to call the "Black
Lady of Espionage" - the high-altitude U-2 spy
plane, whose existence was then the agency's
most closely held secret.
Wilson had been assigned to the C.I.A.'s Office
of Security as a member of a special 60-man de-
tachment that would guard the U-2 planes and
keep tabs on the pilots, the support crews and
their families. Since he would be going overseas,
he was given a fake identity as an international
representative for Maritime Survey Associates.
with a mail-drop address at 80 Boylston Street,
Boston, Mass.
Four U-2's were based near Adana on the
southern coast of Turkey, and Wilson went with
them. Among the pilots he watched over was
Francis Gary Powers, whom the Russians
would manage to shoot down in May 1960.
In January 1959, newly married, Wilson was
transferred to the C.I.A.'s Washington field of-
fice. For a time, he guarded a K.G.B. defector
who exposed one of the most important Russian
spies the United States ever nabbed, Col. Rudolf
Abel. There was a nice irony to this; Abel would
eventually be traded back to the Soviet Union for
the captured U-2 pilot, Gary Powers.
The C.I.A. at this time was engaged in wide-
spread illegal domestic mail intercepts and
wiretaps, and one day while tapping the phone of
a foreign affairs specialist for Newsweek maga-
zine, Wilson found himself recording a call with
Vice President Richard M. Nixon. It was a
heady experience for Wilson. "You'll never
guess who I was listening to today," he said to
his wife.
Although Wilson was later reported to have
played a role in the Bay of Pigs invasion, he was
actually an undercover graduate student at Cor-
nell University - in its School of Industrial and
Labor Relations - when the ill-fated landing
took place. He knew that, for a man of his ambi-
tions, the office of security was a dead end. What
he coveted - and got - was entry into the clan-
destine services, especially the international or-
ganizations division, which ran labor opera-
tions, penetrated student groups and infiltrated
the media under a famous C.I.A. figure, Cord
Meyer.
His status in the agency also changed. Agents
working under deep cover were placed on con-
tract. This gave the C.I.A. an opportunity for
"plausible denial" if questions were raised
about whether the operative was an employee.
And it gave the agency a way to beat budgetary
staff limits, which didn't apply to contract
personnel.
Many of these contracts were for a specific
time or task, but Wilson's was a "permanent ca-
reer contract," subjecting him only to the same
performance scrutiny that every staff officer re-
ceived and providing him with the same medical
and pension benefits. Barring across-the-board
budget cutbacks, he was in the C.I.A. as long as
he wished.
With his merchant marine background and
newly acquired academic credentials, Wilson
got a job as the European representative of the
Seafarers International Union of North Amer-
ica, and with his wife and two young sons settled
in a small village in the Netherlands just outside
Antwerp, one of the Continent's busiest ports.
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For his other life, in the C.I.A., he monitored
cargoes being shipped out of Antwerp for Cas-
tro's Cuba; he set up a network of informants to
identify key Communists on the Antwerp docks,
and on a sophomoric level that gave him great
glee, he would make life miserable for visiting
Soviet-bloc labor delegations by seeing to it that
the toilets in their hotel rooms were plugged and
that pests like ants and roaches were let loose in
them.
Six feet five and rawboned, with enormous
hands, hands that could easily break your neck,
he also took on hazardous side assignments,
packing a pistol, for instance, on trips to Mar-
seilles for agency payoffs to Corsican mobsters
to keep Communist dockworkers in line.
From the first, money preoccupied him. Al-
though he was being paid by both the union and
the agency, he wrote a bitter letter of protest to
the union president, Paul
Hall, about the cancellation
of an agreement that allowed
him to take $25 per week out
of expenses as a salary sup-
plement. Wilson needed it, he
said, "because of foreign
taxes."
After a year abroad, the
C.I.A. brought him to Wash-
ington and found him a job in
the international department
of the A.F.L.-C.I.O., which
functioned for organized
labor in America as a kind of
miniature Department of
State. He was dispatched to
Latin America to help fight
left-wing union organizing
drives. Then he went to the
Far East. In 1963, he was in
Saigon when the President of
South Vietnam, Ngo Dinh
Diem, was overthrown and
assassinated. An important
Vietnamese labor leader and
supporter of Diem, who the'
C.I.A. thought might be
turned into a collaborator to
serve its interests, wound up
in jail. The agency wished to
hide its hand, even from em-
bassy officials, so Wilson, as
the A.F.L.-C.I.O.'s represent-
ative on the spot, was ordered
to get the man out. He went
right to the top, demanding
and receiving an audience
with Ambassador Henry
Cabot Lodge, and promptly
obtained the man's release.
Then, in the summer of
1964, the C.I.A. sent Wilson
down a path that dramati-
cally altered his life profes-
sionally and personally. He
was assigned to Special
Operations, which combined
some of the activities of his
old division with covert para-
military operations around
the globe. The groundwork
for his new role was painstak-
ingly laid. With the blessings
of the agency, the A.F.L.-
C.I.O. recommended him as
an advance man in Hubert H.
Humphrey's candidacy for
Vice President.
After the election, Wilson
told a key Humphrey cam-
paign official, a Washington
lawyer named Martin
McNamara, that he wanted
to start up his own freight-for-
warding business, and
McNamara agreed to do the
legal paperwork. So if anyone
looked into the history of Wil-
son's firm, it would appear
quite aboveboard. It actually
was a C.I.A. "proprietary" -
one of the front companies the
agency financed to disguise
its black arts. Special Opera-
tions had a logistics branch
for land, sea and air support,
and Wilson would be in
charge of the maritime end of
things.
McNamara wouldn't see
Wilson again for some time,
and when he did, he spotted
him in a Washington restau.
rant lunching with a super-
star lobbyist and public rela-
tions man - Robert Keith
Gray. "Well, well," Mc-
Namara remembers think-
ing, "Ed Wilson's really mov-
ing into the big time."
Gray had been appoint-
ments secretary to President
Dwight D. Eisenhower. He
would go on to form his own
firm, Gray & Company, with
an unforgettable address:
"The Powerhouse, Washing-
ton, D.C." In the 1980 Reagan
campaign, he would play a
key advisory role, reporting
directly to campaign man-
ager William J. Casey, who
was himself to become direc-
tor of the C.I.A.
At the time McNamara saw
Wilson with Gray, Wilson was
on the verge of forming an-
other C.I.A. proprietary
called Consultants Interna-
tional. Years later, when Wil-
son began cropping up regu-
larly in the headlines, it was
discovered that Gray was
listed on the firm's board of
directors. But Gray told re-
porters that being on the
board was news to him, that
he barely knew Wilson.
When I interviewed Gray,
he insisted that he and Wilson
had merely been "elevator
buddies," referring to the
fact that they once had offices
in the same building.
But this was not quite the
case. I obtained classified in-
telligence documents that
showed Wilson and Gray had
had a close relationship for at
least nine years, during
which they had contact "pro-
fessionally about two or three
times a month." Once they
had even made a two-week
trip together to Taiwan while
Wilson was on an agency mis-
sion. Gray had also sponsored
Wilson's membership in the
chic George Towne Club,
where he rubbed shoulders
with such other members as
Tongsun Park, the notorious
South Korean wheeler-dealer
who was at the center of a
Congressional influence-buy-
ing scandal in the late 1970's.
Best of all for Wilson, his
C.I.A. controller, or case offi-
cer, in his new clandestine job
was Thomas G. Clines, who
had joined the agency in 1949.
Clines was always short of
cash and every so often he
would touch Wilson for a loan,
$50 here, $100 there. After all,
Wilson had the expense ac-
count from his proprietary -
and Clines was the one who
wrote up his evaluation re-
ports.
[Clines would go on to be-
come the C.I.A.'s director of
training. While he was still in
the C.I.A., according to confi-
dential Federal investigative
records, Clines was negotiat-
ing a private $650,000 con-
tract with the Nicaraguan ty-
rant, Anastasio Somoza, to
create a "search and de-
stroy" apparatus against
Somoza's enemies. Unfortu-
nately for Clines, Somoza was
forced into exile before the
deal could be concluded.]
Wilson's job was to ship in
cargoes wherever the C.I.A.
wanted its participation un-
traceable, in Latin America,
Africa, the Middle East and
Southeast Asia. He sent in-
cendiary, crowd dispersion
and harassment devices to
Chile, Brazil and Venezuela.
Arms to the Dominican Re-
public when a Castro-like
takeover was feared. Ad-
vanced communications gear
to Morocco. Weapons of all
kinds to Angola.
A whole range of high-tech
electronic equipment went to
Iran. Weapons for a C.I.A.-
backed coup in Indonesia.
Military parts and supplies to
Taiwan and the Philippines.
Logistical support for the so-
called "secret war" the
C.I.A. had begun to wage in
Laos. He also arranged for
boats, flotillas of them if re-
quired, such as the ones used
in continuing raids against
Cuba.
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In many of the countries re-
ceiving agency consign-
ments, he hustled other busi-
ness. The C.I.A. was de-
lighted - such activities only
deepened Wilson's cover. Wil-
son would nudge up the true
costs of these transactions,
even those ordered by the
C.I.A. There was minimal
auditing and little thought
given to what he was doing so
long as he delivered the
goods. And if the Internal
Revenue Service nosed
around, the fact that he was
running a covert C.I.A.
operation took care of that.
For Wilson, being in the
C.I.A. was like putting on a
magic coat that forever made
him invisible and invincible.
He was ostensibly earning
$25,000 from the agency when
he began negotiating for the
first major acquisition in
what would become his Mt.
Airy Farms showplace.
But suddenly the smooth
road Wilson was traveling got
very rocky. President Nixon,
always paranoid about the
C.I.A., had ordered a com-
plete budgetary review and
many of the proprietaries, in-
cluding Wilson's, had to go.
The C.I.A. wanted to re-
train him as a staff case offi-
cer and send him to Vietnam
where American involvement
was at its critical stage. But
that meant no more fat subsi-
dies, no more freedom to
wheel and deal on the side, no
prospect of gentleman farm-
ing in Virginia.
Almost at once, though,
Wilson was back in business,
with Task Force 157, an espio-
nage unit so secret that
hardly anyone in the Office of
Naval Intelligence knew
about it. Among its missions
was placing agents in foreign
ports to monitor Soviet ship-
ping and launching a series of
extremely sophisticated
oceanic spying operations. To
cloak these activities, the
task force decided to make
regular use of proprietaries
and went to the C.I.A. for ad-
vice in setting them up. The
task force executive officer at
the time recalled the word
that came back from C.I.A.
headquarters in Langley,
Va.: "Ed Wilson is the man
you need."
If the C.I.A.'s auditing of
expenses was minimal, the
Navy's was virtually nonex-
istent in a project totally un-
prepared to deal with some-
one like Wilson. In a covert
arrangement with the Shah of
Iran, he acquired a trawler
which was to fly the Iranian
flag, cruising the Persian
Gulf to scan for nuclear
weapons the Soviet Union
might be bringing into coun-
tries friendly to Moscow,
principally Iraq, and to as-
certain the nuclear capability
of the Soviet fleet in the In-
dian Ocean. He also handled
the shipment of all the sensi-
tive gear that was installed in
the trawler. For his part in
the venture, Wilson charged
- and got from the Navy with
practically no substantiation
-$500,000.
His most highly classified
assignment was to measure
the earth's gravitational pull
in the Mediterranean off
North Africa so that a missile
- one from a submarine, say
- could be fired accurately.
The cover story for the small
freighter Wilson bought was
that the ship was searching
for undersea oil deposits.
After the months-long survey
was completed, Wilson re-
ceived a lot of kudos from his
superiors. He also made a lot
of money. He had seen to it
that the oil exploration part of
the secret project was com-
pleted, and he sold the data to
several petroleum compa-
nies.
Meanwhile, he continued to
enlarge his Mt. Airy holdings,
eventually possessing 2,338
acres of lush, rolling, white-
fenced land upon which show
horses roamed and Black
Angus cattle grazed. A long,
curving driveway led up to
the three-story main house.
The basement contained a
poolroom, a sauna and a
steam bath, and on the
ground floor, in addition to
the paneled living and dining
rooms and library, there was
a huge kitchen lined with
handcrafted cherry-wood
cabinets. Of the kitchen, an
appraiser familiar with
stately residences in the area
said, "To be honest, I have
not seen a kitchen as elabo-
rately finished as this one is."
Wilson kept a perpetual
open house. Former Vice
President Humphrey would
come on occasion, as would
Congressmen like Silvio O.
Conte of Massachusetts, John
M. Murphy of New York,
Charles Wilson of Texas and
John D. Dingell of Michigan;
Senators like Strom Thur-
mond of South Carolina and
John Stennis of Mississippi -
all there to enjoy the elabo-
rate barbecues, the riding,
hunting and fishing. But the
people Wilson most wanted to
charm and seduce were Capi-
tol Hill aides, anonymous ad-
mirals and generals, civil
service employees at the
highest Government grades,
GS-17 and GS-18. No one was
more important to him than a
GS-18. Politicians and politi-
cal appointees could come
and go, but, as permanent
Government employees, GS-
18's stayed on, savvy insid-
ers, executing policy if not in-
deed forming it.
Others gathered at Mt. Airy
as well. One was Wilson's old
case officer, Thomas Clines.
Another was Theodore G.
Shackley, who had been in
charge of C.I.A. stations in
Miami, Laos and South Viet-
nam, and who was widely
considered to be a sure-fire
candidate for the C.I.A.'s di-
rectorship some day. A third
was a decorated Air Force
officer, Richard Secord, who
as a general was to become
chief Middle East arms-sales
adviser to Secretary of De-
fense Caspar W. Weinberger.
Still a fourth was Erich F.
von Marbod, who, after a dis-
tinguished Pentagon career,
would be appointed director
of the United States Defense
Security Assistance Agency.
They shared a special
camaraderie. Clines had
worked for Shackley in
Miami and Laos. In Laos, Se-
cord had been an ace spotter-
pilot in the C.I.A.'s secret war
against the Communist Pa-
thet Lao. And in Vietnam, von
Marbod and Shackley had
been in close contact. As they
relaxed around Wilson's pool
at Mt. Airy, they all saw that
he could do something they
couldn't - which was to
make money. Soon they had
another common bond; all
four would be listed in Wil-
son's secret code book of
names when he began his ter-
rorist operations for Colonel
Qaddafi.
T HE FIRST MENTION
of Wilson in the press
was in 1977 when a
story in The Washington Post
erroneously linked him to the
bomb murder of Orlando
Letelier, the former Chilean
Ambassador who had become
a leading critic of the mili-
tary dictatorship that over-
'threw his Government. The
story identified Wilson as an
ex-C.I.A. operative and also
noted that he reportedly had
links with Qaddafi's Libya.
But what caught the eye of
Adm. Stanfield Turner,
President Carter's newly ap-
pointed C.I.A. director, was
that Wilson "may have had
contact with one or more cur-
rent C.I.A. employees."
When he arrived at C.I.A.
headquarters in Langley
after seeing The Post's arti-
cle, Turner demanded to
know who Wilson's contacts
were. To his chagrin, just
about everybody, it ap-
peared, except him, knew
about them. One was William
Weisenburger, whose job was
to acquire exotic equipment
for the agency and who had
supplied Wilson with 10
miniature detonators of the
most advanced design. The
second C.I.A. man, Patry E.
Loomis, while operating
under deep commercial cover
in the Far East, had been dis-
covered only a few months
earlier working for Wilson on
the side.
Weisenburger, Turner was
told, had already received a
reprimand and Loomis would
probably get the same treat-
ment. "That's pretty mild,
isn't it?" Turner asked.
"Shouldn't we be getting rid
of them?"
But to his amazement,
Turner found a solid wall of
opposition - from his top
deputy, who was a longtime
C.I.A. professional; from the
chief of the clandestine serv-
ices and, most surprisingly,
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from the C.I.A.'s inspector
general. Weisenburger had
simply been duped into doing
a favor for an old friend and
Loomis was just moonlight.
ing, not unheard-of among
agency personnel. It wasn't
such a big deal. C.I.A. rela-
tionships were complex. This
wasn't the Navy.
Turner, however, was look-
ing for a way to make his
presence felt. The day of the
freewheeling covert "cow-
boys," as he put it, was over,
and he ordered the firing of
both Loomis and Weisenburg-
er. He convened 500 C.I.A. of-
ficials in the "bubble,". the
auditorium at the agency's
Langley headquarters, and
advised them that Wilson was
persona non grata. He then
sent a "book cable," a C.I.A.
message to agency stations
around the world, warning
them not to have any dealings
with Wilson. Wilson, Turner
said, had been abusing his
past affiliations with the
agency and he ordered
agency employees to report
back to Langley any ap-
proaches Wilson may have
made.
As Turner probed further,
he learned of Wilson's close
ties to Ted Shackley and Tom
Clines. By now, Shackley, as
the No. 2 man in the C.I.A.'s
Directorate of Operations, oc-
cupied one of the agency's
most sensitive positions.
Turner also knew that if Ger-
ald Ford had defeated Carter
in the 1976 Presidential elec-
tions, Shackley would prob-
ably be sitting in his chair.
In a private meeting,
Shackley told Turner that his
connection with Wilson was
purely social, that while he
had spent weekends at Mt.
Airy, it was mainly because
his wife and Wilson's were
such good friends. He had
never spoken to Wilson about
the slightest professional
matter. Turner didn't believe
him, but the most he felt he
could do at the time was to
take Shackley out of clandes-
tine operations and appoint
him deputy head of the Na-
tional Intelligence Tasking
Center, whose mission, to
coordinate intelligence gath-
ering, sounded more impor-
tant than it really was.
Turner found Clines even
less credible. During the in-
vestigation of Patry Loomis,
Clines had been spotted at a
table with Loomis and Wilson
in a coffee shop not far from
Langley. Clines claimed it
was a happenstance encoun-
ter. He had, he said, dropped
in for a solitary breakfast,
seen the two men and sat with
them. Since the inspector
general, who came out of the
clandestine branch himself,
had exonerated Clines of any
purposeful wrongdoing,
Turner's hands were pretty
much tied.
In gathering information
for my book, I asked Turner if
he had taken any action at all
against Clines. He recalled
with some satisfaction that he
had determined at least to re-
move Clines from the Wash-
ington scene and ordered him
assigned to a "small Carib-
bean nation."
"Which one?" I inquired.
"I can't tell you. It's classi-
fied."
I told Turner that I thought
I had a record of every post
Clines had served with the
C.I.A. and no Caribbean na-
tion was mentioned, but still
he said, "I'm sorry. I can't
help you."
I then told one of my agency
sources about my encounter
with Turner. "Oh, right," he
said. "It was Jamaica. Ex- i
cept Clines never went."
"He never went?"
"No. "
Clines had been removed as
head of the C.I.A.'s office of
training all right, but he
ended up in an equally sensi-
tive spot as the agency's Pen-
tagon liaison. And Turner
still didn't know about it. It
was a perfect illustration of
how "the Company" could
run rings around a director
when it felt like it, even a di-
rector who was a former
Rhodes scholar fresh from
commanding North Atlantic
Treaty Organization forces in
southern Europe.
Eventually, on bulletin
boards at C.I.A. headquar-
ters, anonymous notices went
up likening Turner to Captain
Queeg.
E DWIN WILSON
first met Frank E.
Terpil at a 1975 Christ-
mas party for current and
former intelligence opera-
tives in Bethesda, Md. Terpil
was a C.I.A. communications
man who had been phased out
under a cloud, suspected,
among other things, of using
diplomatic pouches to smug-
gle contraband.
Terpil obviously knew
plenty about Wilson and told
him that he had a really good
hook into Libya through Qad-
dafi's first cousin, Sayed Qad-
dafadam, who was handling
military procurement out of I
the Libyan Embassy in Lon-
don. His connection, Terpil
said, was "this Pennsylvania
guy," Joseph McElroy, one of
the earliest entrepreneurs to
cash in on the money-flush oil
nations in Africa and the Mid-
dle East. McElroy began sup-
plying everything from Pam-
pers to pistols. Gradually, his
best customer became Libya;
and Pampers yielded, more
and more, to pistols. Terpil
had just helped McElroy
bring 50 handguns to the Lon-
don embassy, but now McEl-
roy wanted out.
[In 1984, the world was
treated on television and in
the press to the picture of a
young British policewoman
sprawled mortally wounded
on the street, cut down by a
fusillade of shots from
Libya's London embassy dur-
ing an anti-Qaddafi demon-
stration. Britain broke diplo-
matic relations with Libya
and after an 11-day standoff,
the Libyans in the embassy
were forced to leave the coun-
try. A search of the embassy
then turned up several Amer-
ican guns with discharged
chambers and, although it
was never announced public-
ly, they were traced by the
Bureau of Alcohol, Tobacco
and Firearms to the shipment
Terpil had helped deliver.]
In the fall of 1976, Wilson
and Terpil set up a bomb fac-
tory for the Libyans about 25
miles south of Tripoli. He sup-
plied a variety of explosives
and programmable detona-
tors, along with a cadre of in-
structors that included an ex-
C.I.A. explosives man, then
two technicians on leave from
a secret Navy weapons test-
ing facility and two Army
bomb disposal experts whose
services had often been used
by the United States Secret
Service on Presidential se-
curity details. Years later,
when one of the Army men, a
sergeant, was questioned by
Federal authorities, he said,
tears sliding down his face, "I
don't know why I did it. I guess
it was the money."
Wilson also got an inkling of
the riches in store for him. His
principal contact was Maj. Ab-
dullah Hajazzi of Libyan mili-
tary intelligence. For his first
payment of $350,000 - in cash
- Wilson dispatched an em-
ployee, Douglas M. Schiach-
ter, to Hajazzi's headquarters.
Schlachter was ushered into a
vault-lined room and a drawer
was pulled out packed with
$100 bills.
When it was learned that the
money was for deposit in
Switzerland, Schlachter was
asked if Swiss francs wouldn't
be more convenient, and when
he said he guessed so, another
drawer was opened filled with
them, and then he was shown
other drawers loaded with
French francs, German
marks and British pounds.
"You see," he was told, "we
have whatever you want."
[Hajazzi now is Libya's liai-
son with the infamous Abu
Nidal Palestinian terrorist
group, which is believed to
have been responsible for the
wholesale slaughter of passen-
gers at airports in Rome and
Vienna. Most recently, the
group was implicated in this
month's bombing of a T.W.A.
flight to Athens - and a re-
lated terrorist faction claimed
responsibility for the March 31
Mexican airliner crash that
left 166 dead.]
The initial cash payments
caused an almost immediate
split between Wilson and Ter-
pil when Wilson discovered
that his partner was skim-
ming. As much as 10 percent
of each payment was found to
be missing by the time the
money reached Switzerland.
Wilson told Hajazzi that Terpil
claimed the missing money
went for bribes he had to pay
to Libyan officials, among
them Hajazzi, and Terpil was
ordered out of the country.
What the Libyans most
yearned for was American-
made composition C-4, a whit-
ish, puttylike explosive of
enormous power which was
under the strictest export con-
trols. Its main ingredient,
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 destructive potential save for
nuclear weapons. Commer-
cially, explosives made of
RDX were in demand for
demolition projects because of
their malleability and the way
their force could be directed.
These same features made
RDX a favorite for terrorists,
who could use it to blow up a
building (preferably in Is-
rael), or a car, or to turn ordi-
nary household items - an
ashtray, a lamp, a radio- into
instruments of death.
The versatility of RDX did-
n't stop there. It could be
manufactured in sheets, usu-
ally a foot wide and a quarter-
inch thick. The sheets were
pliable and could be cut to
any desired size or shape. A
classic terrorist tactic was to
mail such an explosive in an
envelope wired to a miniature
detonator. When the recipient
opened the envelope flap, he
or she was torn apart.
If Wilson could supply C-4,
Hajazzi told him, the sky was
the limit on other contracts.
And on April 2, 1977, 500
pounds of C-4, hidden in cans
of DAP glazing compound,
left Los Angeles aboard a
Lufthansa flight bound for
Frankfurt where it was trans-
ferred to another flight des-
tined for Tripoli.
Exactly six months later,
on Oct. 2, a chartered DC-8
took off from Houston laden
with a staggering 21 tons of
C-4 hidden in cans labeled as
oil drilling mud. It was the
biggest private shipment of
the explosive in history and it
was going to the center for
world terrorism, Qaddafi's
Libya, on orders from Edwin
P. Wilson.
Once Hajazzi was able to
finger a chunk of C-4 at the
bomb factory Wilson was op-
erating, to smile at the pros-
pect of the bodies it would dis-
member, he was as good as
his word about additional
contracts. For $8 million a
year, Wilson was asked to
supply restricted parts for
Qaddafi's fleet of American-
made C-130 military trans-
port planes and, for another
$1.2 million, American and
British pilots to fly them.
He received an order for
long-range surveillance vans
designed for desert patrols
and equipped with day/night
vision TV cameras that had
an image-intensification tube
whose unregulated export
was forbidden by Federal
law. In between social events,
Wilson demonstrated one of
the cameras for Libyan intel-
ligence officers right at Mt.
Airy Farms.
He entered into an agree-
ment to provide veterans of
the United States Special
Forces, Green Berets, to
train commando teams. The
Libyans paid $100,000 per
Green Beret; Wilson in turn
recruited each of them for
half as much.
The Berets were a natural
choice for Wilson. For years,
the C.I.A. had been using Spe-
cial Forces men on covert
missions that required mili-
tary expertise. And the way
he would frame it, this would
appear to be just another offi-
cially sanctioned operation.
The first batch of former
Green Berets - four of them,
toting war bags - were met
by Wilson in Switzerland, in
Zurich airport's international
zone. He took them to a coffee
shop. They would later recall
how impressed they were by
him; he was their kind of guy.
Tough, down-to-earth, au-
thoritative. He told them they
were going into Libya. "I
want you to ingratiate your-
selves with those people. Get
in tight with them, whatever
it requires."
One of the Green Berets had
participated in many C.I.A.
missions in Southeast Asia
that included the assassina-
tion of suspected Vietcong
sympathizers and secret
search-and-destroy attacks in
Cambodia. He remembers
thinking that this sounded
like an infiltration mission.
There would be no signed con-
tracts, Wilson said. "If I
welsh, you'll come looking to
kill me. If you welsh, I'll be
coming after you. That's our
contract. You got any ques-
tions?"
"Who are we working for?"
"Me," said Wilson, and
they appreciated how profes-
sionally cryptic his response
was. Nothing more than nec-
essary. No elaborate expla-
nations. No pep talks. And the
truth was that this was no
weirder than dozens of
agency ventures they had
known about in the past.
Before Wilson was through,
he would bring in more than
100 ex-Berets, Marine black-
belt karate masters and pilot
instructors for Libya's Amer-
ican-made Chinook cargo-
and troop-carrying helicop-
ters. He then contracted to
outfit one of Qaddafi's pet
projects - a 3,500-man mo-
bile strike force - from com-
bat boots to heavy machine
guns. The weaponry alone
added up to $23 million.
By bringing in a Pentagon
intelligence analyst, Wilson
was able to supply Hajazzi
with a variety of top-secret
documents including contin-
gency plans for the Army's
82d Airborne Division in case
of trouble in the Middle East.
And when Hajazzi asked for a
few American guns to be de-
livered to Libyan embassies
here and there, Wilson threw
them in at no extra charge.
[During 1979 and 1980, 11
anti-Qaddafi Libyans were
murdered in Europe. One of
them, newly married with an
infant daughter and living in
West Germany, was shot in
the back while exiting from
an underpass at the Bonn
railroad station. The weapon,
a .357 Magnum, was re-
covered and traced back to
Fayetteville, N.C., where it
had been purchased by a for-
mer Green Beret working for
Wilson.]
N JAN. 11, 1979,
Thomas Clines met in
Geneva with Wilson's
attorney, Edward Coughlin.
Clines had resigned from the
C.I.A. and Shackley would do
so shortly. Clines had set up a
company specializing in se-
curity and was about to form
another one to be incorpo-
rated in Bermuda. In both
firms, Clines was the presi-
dent and Shackley would be
listed as a consultant.
In Geneva, Clines pre-
sented Coughlin with a hand-
written summary of a loan
proposal. Among its points
was that a Liberian corpora-
tion "not identified with Wil-
son" would transfer money to
a custodial account in Bermu-
da.
"If I understand correct-
ly," Coughlin wrote Wilson in
a Jan. 18 memo, "it is pro-
posed that an offshore corpo-
ration be organized with,
eventually, five equal share-
holders. Four of these 20 per-
cent shareholders are indi-
vidual U.S. citizens, and the
fifth would be a foreign corpo-
ration, not controlled by U.S.
persons."
In February, $500,000 was
sent to Bermuda in two in-
stallments. Later, Wilson
confided to his mistress, Ro-
berta J. Barnes, whose code
name in the Wilson organiza-
tion was "Wonder Woman,"
that his unnamed partners
were Clines, Shackley, the
Pentagon's Erich von Mar-
bod and Air Force General
Secord. The $500,000, he said,
was "seed money" for a com-
pany that would make mil-
lions shipping American
arms to Egypt.
Egypt, as a result of the
Camp David peace accords,
was going to get boatloads of
military aid worth roughly $1
billion a year, and, in an un-
paralleled move, Washington
agreed to advance the money
to ship these armaments. For
anybody in the freight-for-
warding business who could
get a lock on the contract, the
bonanza would be extraordi-
nary.
Von Marbod - "Redhead"
in Wilson's code book - had
the job of making sure the
arms sales got off to a fast,
smooth start. Unexpectedly,
though, an Egyptian named
Hussein K. Salem showed up
with a letter signed by
Egypt's Defense Minister au-
thorizing him to handle the
shipments. Von Marbod
refused on the grounds that
Salem had no visible track
record as a freight forward-
er. Then Salem formed a cor-
porate partnership with
Clines called the Egyptian
American Transport and
Services Corporation, or Eat-
sco for short. Like magic, an
exclusive contract with Eat-
sco was approved.
By the spring of 1980, Wil-
son was an indicted fugitive
and thus unable to operate
from his usual bases in the
United States, Britain and
Switzerland. Holed up in
Libya, he sent a former
Green Beret to warn Clines
that he wanted his $500,000
back - or else. And eventu-
ally he was repaid.
[The same Green Beret,
Eugene A. Tafoya, was dis-
patched by Wilson on a re-
quest from Hajazzi to assassi-
nate a dissident Libyan stu-
dent in Colorado. The stu-
dent, although blinded in one
eye, survived. Tafoya was ap-
prehended and sentenced to
two years' imprisonment for
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4.
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 Declassified in Part - Sanitized Copy Approved for Release 2012/01/11: CIA-RDP90-00965R000504170004-4
assault and criminal conspir-
acy. In explaining why Ta-
foya had escaped conviction
on charges of attempted mur-
der, one juror cited confusion
over Tafoya's claim that he
had been working for the
C.I.A.]
Roberta Barnes later re-
peated to Federal authorities
what Wilson had told her. But
there was, as they say, "no
smoking gun" - no evidence
of a criminal conflict of inter-
est that would stand up in
court. Clines said that his un-
named American partners
didn't exist; they were sim-
ply "John Does" required for
the filing of incorporation
papers. Shackley said that he
didn't know any of the details
of what Clines was doing. Von
Marbod's denial of wrongdo-
ing was absolute. The same
went for Secord. On Dec. 1,
1981, von Marbod ended a
brilliant Defense Department
career, citing narcolepsy. Se-
cord also cut short his mili-
tary career, resigning in 1983.
The Egyptian Government,
for its part, exhibited little
doubt that Edwin P. Wilson -
a man now being publicly
identified with Libya,
Egypt's bitterest foe in the
Arab world - had been in-
volved with Eatsco, and Hus-
sein Salem was ordered to cut
all relations with Clines.
On top of everything else,
United States Government
auditors finally determined
that Eatsco, during the
period when Clines was still a
visible partner, had fraudu-
lently billed the Pentagon for
some $8 million. In a plea bar-
gain, Clines got off with
$110,000 in corporate fines
and received a letter inform-
ing him that no further indict-
ments against him were con-
templated. While it was also
announced that Salem had
paid more than $3 million in
claims and fines, United
States-Egyptian relations
were at a tender stage follow-
ing the assassination of Presi-
dent Anwar el-Sadat, and I
discovered that, in a sealed
court agreement, the $3 mil-
lion was immediately cred-
ited back to Egypt.
T IS MORE THAN
I conceivable that Wilson
himself would be at large
today aiding Qaddafi had it
not been for a young assistant
United States attorney in
Washington named E. Law-
rence Barcella Jr.
While Wilson was operating
unrestrained in Libya, the
F.B.I. conducted a 14-month
investigation into his activi-
ties and in a report dated
Nov. 17, 1977, concluded, with
Justice Department concur-
rence, that he had committed
no prosecutable crimes.
By accident, Barcella read
the report and with growing
indignation began to consider
its implications. If Wilson
could get away without pun-
ishment, how many others
might soon be involved in the
same sort of activity - or
perhaps were involved al-
ready?
Often in the face of official
indifference, Barcella began
a relentless pursuit of Wilson
that lasted for nearly four
years over three continents -
in America, Britain, West
Germany, Switzerland, Libya
and, finally, the Dominican
Republic. It was like a West-
ern, the lawman after the out-
law, one on one, toward a
final confrontation. The
chase was personal in every
sense of the word. The two
men met secretly in Italy in a
temporary truce. They corre-
sponded and talked over in-
ternational telephone lines,
each trying to outwit the
other.
Barcella's marriage would
be severely strained, his life
disrupted in countless ways,
vacation wiped out. Saturday
became just another work-
day, taking him away from
his young daughter upon
whom he doted. He began
waking up in the middle of the
night, wondering where Wil-
son was at that moment, what
he was thinking, what he was
plotting.
A friend of Barcella's had
seen the movie "Butch Cas-
sidy and the Sundance Kid"
on television. In the movie,
the principals, having robbed
one train too many, are
tracked down by a dogged
sheriff whose trademark hat
is a white skimmer. Wher-
ever the two outlaws go, de-
spite every stratagem they
can devise, they always find
themselves on some hilltop,
looking back in growing
amazement, alarm and anger
at a shimmering white dot -
the sheriff's skimmer - fol-
lowing them in the distance.
It was known that one of Wil-
son's favorite pastimes in his
Tripoli villa was watching
taped movies. "Boy," said
Barcella's friend, "if he's got
that picture in his library, it'll
really give him the willies."
Using an international con-
fidence man as a go-between,
Barcella at last devised a
plan to entice Wilson out of
his Libyan sanctuary. After
10 months of tense maneuver-
ing, Wilson was lured to the
Dominican Republic, where,
by prearrangement, he was
denied entry and placed on a
flight to the United States.
On June 15, 1982, Wilson,
still unable to comprehend
quite what had happened to
him, was arraigned in Fed-
eral court in Brooklyn. In a
series of trials that followed,
he was sentenced to 32 years
in prison on a variety of weap-
ons-smuggling charges.
Still, in custody, Wilson
tried to strike back. Believing
that he was hiring the serv-
ices of the Aryan Brother-
hood, a vicious gang of killers
operating both inside and out-
side prison, he made a down
payment to kill Barcella, as
well as another prosecutor
and several key prosecution
witnesses. The promised
price on Barcella's head was
$250,000. But a prison inform-
ant was a party to the plot,
and Wilson was subsequently
convicted on multiple counts
of conspiracy to commit mur-
der, bringing his total sen-
tence to 52 years. He could not
reasonably expect considera-
tion for parole for about 18
years.
What has not been disclosed
is that Wilson tried again to
do away with Barcella. While
he was being held at the
Metropolitan Correctional
Center in New York City, he
met another inmate, William
J. Arico, a professional Mafia
hit man. Arico was awaiting
extradition to Italy for an as-
sassination he had carried
out there while in the employ
of the Italian financial swin-
dler, Michele Sindona.
Arico was planning an es-
cape and Wilson arranged to
give him $50,000 in cash. The
money, in English pounds,
was passed to Arico's wife in
a hotel at London's Heathrow
Airport.
Along with two accom-
plices, Arico attempted an es-
cape down sheets tied to-
gether from an upper floor of
the center. The first man
landed safely and Arico had
just six feet to go when the
third, an overweight Cuban
drug dealer, caught his belt
buckle in the sheets after
coming out a window and
plummeted on top of Arico,
surviving himself, but crush-
ing Arico to death in the pro-
cess.
A FTER WILSON'S AR-
rest, there was a
flurry of soul-search-
ing in the C.I.A. about how
best to prevent a repetition of
his sort of activity. As this
and other newspapers have
noted, there appears to be a
new kind of intelligence trai-
tor - operatives who, like
Wilson, are motivated by
greed rather than ideology,
and who, as Barcella notes,
"are patriots until cash gets
in the way."
Given the agency's present
structure, with its continued
emphasis on covert opera-
tions, and with secrecy and
"compartmentalization"
more in vogue than ever,
many of the elements that
permitted Wilson to launch
his career with terrorists re-
main difficult to change. But
even modest proposals - to
require, for instance, that for-
mer members of the intelli-
gence community register
any relationships with for-
eign governments, compa-
nies or individuals - have
gone by the boards.
When I asked Stanley Spor-
kin, the C.I.A.'s general coun-
sel who recently resigned to
become a Federal judge,
what happened to such re-
forms, he insisted that he
knew of no organized opposi-
tion to them. "There were
just more important things to
focus on," he said.
7
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In the meantime, Lawrence
Barcella, in conjunction with
the criminal division of the
Justice Department, has
been conducting grand jury
investigations concerning the
hijackers of T.W.A. Flight 847
last summer and the cruise
ship Achille Lauro last fall in
the hope, however slim, that
they will be apprehended.
And whenever terrorist
bombs go off - in a Paris
delicatessen, for instance, or
a London department store,
or on this month's T.W.A.
flight, where plastic explo-
sives are thought to have
been used - he thinks of that
huge store of C-4 that Wilson
brought to Qaddafi's Libya in
1977.
It has a shelf life of 20
years. ^
Peter Maas is the author of "The Valachi
Papers" and "Serpico," among other works.
This article is adapted from "Manhunt," to be
published next month by Random House.
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