CHAPTER ONE: The
End of the Rainbow
The Cold War
strayed into the unassuming settlement of
Lithgow, Australia, one Sunday morning in a Mercedes-Benz.
Sergeant Neville Brown of the Lithgow Police recorded
the time as 4 A.M., January 27, 1980.
"I was patroling
the Great Western Highway south of Bowenfels
with Constable First Class Cross," Sergeant Brown said. "We saw a
1977 Mercedes sedan, parking lights on, parked on the south side of
the old highway, known as 'Forty Bends.'"
It was now three
months later, and Sergeant Brown was testifying
at the first day of a week-long inquest at the Lithgow courthouse.
Lithgow, about ninety miles inland from Sydney, had been of little
previous significance to Western civilization. Consequently, Sergeant
Brown was unused to reporters in the courtroom and television
cameras outside. But he maintained his official poise under the stern
questioning of the big-city lawyers.
Sergeant Brown and
Constable Cross had driven off the main
freeway that morning, through some woods and onto the old two-lane
road, which had been left open only for a few lonely homesteaders.
They approached the unrecognized Mercedes. "A male person
was sitting slumped over towards the center of the vehicle," Sergeant
Brown testified. "He was dressed in light, bone-colored slacks, a dark
blue shortsleeved shirt (January is summertime in Australia), and
casual, slip-on shoes."
leaned forward intently.
rifle was held by him," Sergeant Brown went on,
"the butt resting in the passenger-side floor well. His left hand held
the barrel, three or four inches from the muzzle, and near the right
side of his head. His right hand rested near the trigger. There was
lots of blood over the console, the front seats, and front and rear
wells. There was lots of blood on the head of the person. The rifle
had a live round in the breech, one in the magazine. There was a spent
cartridge in the right passenger-side floor well."
Of the throng that
crammed the little courthouse that week,.
Sergeant Brown and Constable Cross were among the few who
believed that Francis John Nugan, the man in the Mercedes, had
committed suicide. In the three months since the body had been
found, facts had leaked out about Frank Nugan's life that led most
people to suspect, even presume, murder.
But whatever the
facts of Nugan's life, the facts of his death told
the local police otherwise. The autopsy had found no trace of drugs,
poison, or prior injury. Nugan died of a single gunshot wound.
Given the moat of undisturbed gore that surrounded his body, there
seemed to be no way that someone else could have gotten into the
car, killed him, and left.
Later, all this
would be of great interest to politicians. But at this
juncture the debate was being staged by insurance lawyers. They had
been hired to try to establish facts that would relieve their clients,
various companies, of responsibility under Nugan's millions of dollars
in insurance policies. One large creditor had himself taken out
a $1-million policy on Nugan; this policy, which Nugan's intimates
weren't aware of, now stood to make the creditor rich for the first
time in his life, unless it was challenged.
"Would you agree
it is almost impossible to get yourself into that
position?" pressed lawyer Barry Edmund Mahoney of Commonwealth
replied Sergeant Brown.
"The one you
describe, with the head about a foot below the
muzzle, which was itself being held by the left hand," said Mahoney..
Then he spoke the words the gallery had been waiting for: "I suggest
to you one would have to be a contortionist!"
The reporters had
unfazed, replied, "It didn't appear to be any
great distortion, viewing it." But in the newspapers his reply got
second billing to the lawyer's "contortionist" remark. So did Sergeant
Brown's further observation that he had plotted a trajectory
from the rifle, through Nugan's head, to the bullet mark in the roof
of the Mercedes. "They were all very close to being in alignment,"
That all pointed
to suicide -- a scenario the United States Central
Intelligence Agency would be able to live with. Other aspects of
Brown's testimony, however, were much more disturbing, to the
CIA and others.
For example, there
was a list found in Nugan's briefcase-it came
to be known as "the body list" -- containing scores of typed names of
prominent Australian political, sports, business, and entertainment
personalities. Next to the names were handwritten dollar amounts,
mostly five- and six-figure sums. Were these debtors? Creditors? No
one knew yet.
Then there was the
Bible, a New Testament, found on the body.
It bore, in Nugan's handwriting, the inscription, "I place this day my
life, my work, my loved ones in the Lord's hands. He is so good and
it will be a good day I believe, I believe this will be a glorious
miraculous day, he is with me now, Jesus walks with me now. Visualize
one hundred thousand customers world wide, prayerize, actualize."
page 252 of the Bible were two pieces of paper. One
bore a telephone number in Long Beach, Florida. Nugan had just
been negotiating the purchase both of a swank home near Long
Beach and of controlling interest in a nationally chartered U.S. bank
near there; the bank's best-known customer was the U.S. Air Force.
The other piece of paper, by Sergeant Brown's description, was
"what looks like the remnants of a meat pie bag." On it, Brown
testified, were written "the names of Congressman Bob Wilson -- and
ranking Republican on the U.S. House of Representatives
Armed Services Committee. A few weeks before Nugan's death,
Congressman Wilson, his wife, fellow Congressman Richard Ichord, and
their staff had been out dining with Nugan's American business partner,
who had himself worked for the CIA.
Though now a lawyer in private practice, Colby was a career
professional covert operator of the highest order. A long rise through
ranks had brought him to command of the CIA's station in Saigon in the
1960s. He ran all U.S. "intelligence" operations in the Vietnam War
theater, including Operation Phoenix, a Stalin-like program that
and assassinated an estimated forty thousand South Vietnamese civilians.
Except for the inevitable cases of wrong identification. the
victims were local revolutionary leaders. If left alive, they would
have been predisposed to give South Vietnam some degree of independence
from the Communist party of North Vietnam after the French and
Americans were chased out; such an independent South Vietnam, of
course, is something the United States would love to see today. The
destruction by the Phoenix program 6f this natural barrier to North
hegemony typifies many mistakes made in the belief that the war
could be won. In retrospect, it was a colossal blunder. Colby, the man
in charge of this and other blunders, was then promoted to the top of
profession-United States Director of Central Intelligence. the ultimate
keeper of the secrets, guardian of the family jewels, director of the
supervisor of the National Security Agency, and the voice in the
ear. He was removed by President Ford after revelations of illegal
domestic spying by the agency, four years before his name was found
in Frank Nugan's Bible.
also testified that recent CIA boss Colby's calling
card was in the wallet found in Nugan's right rear pocket. On the
back of the card were "what could be the projected movements of
someone or other," Brown testified: From January 27 to February 8,
"Hong Kong at the Mandarin Hotel. 29th February - 8th March,
William E. Colby
was in those places at roughly those times.
This is not a book
for people who must have their mysteries
solved. It begins with unanswered questions, and it will end with
them. The men this book is mostly concerned with have lived their
lives in a world of spying and secrecy. Though they have been and
in some cases still are paid with U.S. tax dollars, they have been
trained to keep the taxpayers -- among others -- from finding out what
they do. Compunctions about lying have seldom impeded that effort.
They entered their
secret world under a cloak of patriotism. They
have stretched that cloak in various ways. Claiming a patriotic duty
to the United States, they have carried out unlawful and scarcely
believable acts of violence against civilians in Asia, Africa, and Latin
America. Like the CIA's assassinations of South Vietnamese leaders,
these acts repeatedly backfired, and on the whole seriously under-
mined the real international security and trade interests of the United
States; but that's another book. 
This book is about
the attempt of these men to stretch the cloak
of patriotism still further, to cover civil crimes against citizens of
United States and many foreign countries. Under the cloak of patriotism,
and with the help of local bankers like Frank Nugan, hundreds
of millions of dollars have been stolen by fraud from innocent
Billions of dollars have been moved illegally about the globe,
facilitating corruption and thwarting tax collectors in the United
States and many countries regarded as U.S. allies. The cost of
has often been taken off the shoulders of citizens who are
privileged enough to participate in such machinations, and transferred
to the shoulders of citizens who aren't.
supplies of narcotics have been pumped into
American cities for decades. As will be described in the pages that
follow, the two main sources of heroin in America since World War
II-the so-called "Golden Triangle" in Southeast Asia and the
"French Connection" in Marseilles--were established in the course
of operations by the U.S. Government's intelligence community.
They have been protected by that community, ostensibly to further
national security. A newer and more diffuse source of drugs, in Latin
America, has often been protected similarly.
The Contra army
the U.S. is now supporting to take over Nicaragua
has in half a dozen documented cases made mutual-benefit pacts
with big-time smugglers bringing cocaine and narcotic 'pills into the
United States. In every case, the Justice Department has turned a
blind eye to this activity. In country after country around the globe,
American policy-makers have decided that an alliance with gangsters
to help fight local wars against people considered Communist was
worth the addiction of American youth.
security interests of the United States certainly
require a large and efficient intelligence operation. There are powerful
forces that envy or oppose us, and we need constant, up-to-date
information about them. But the people and organizations that make
up what is called the intelligence community in the United States
Government have gone far beyond the gathering of intelligence. In
many cases, the word "intelligence" has been used as a cover for
covert and unconstitutional acts of war and civil crime.
The CIA has often
taken the rap, when things go wrong, when
in fact it was merely carrying out the instructions of civilian
For example, the training of Cuban expatriates and Lebanese
militiamen in terror bombing, which has brought about the killing
and maiming of hundreds of innocent civilian bystanders, was not a
renegade act by the CIA but rather the execution of policies set by
presidents from Eisenhower to Reagan.
Nor has the CIA
been alone in carrying out secret plans that
turned out to work against America. Other operatives, attached to the
Defense Department, the National Security Agency, and the White
House have also participated.
Decisions made at
the highest levels of government, by our past
eight presidents, have bestowed legitimacy on the stretching of the
cloak: men in the government service are expected to -- ordered
to -- secretly
violate our laws to further national policy.
Agents operate in
secrecy. Under Presidents Eisenhower and
Kennedy, there are vivid examples of times the president, like some
Mafia boss, was for his own protection intentionally kept in the dark
about exactly what his underlings were doing. Former Undersecretary
of State C. Douglas Dillon testified before the Senate Assassinations
Committee in 1975 regarding the attempted murder of foreign
leaders during the Eisenhower administration. He said that CIA chief
Allen Dulles "felt very strongly that we should not involve the
directly in things of this nature." Eisenhower, Dillon said,
would simply order "whatever is necessary" to be done, and Dulles
and his organization would. take it from there.
ordered a secret, illegal, and ultimately unwise
war against Cuba, involving probably thousands of covert operatives
and lasting many years beyond the public disaster at the Bay of
Pigs. There's no public record on whether he specifically ordered the
murder of Fidel Castro, though the CIA attempted it many times.
Kennedy's closest aides in those years have argued persuasively that
he wasn't aware that during one period the CIA hired some Mafia
bosses to perform the Castro assassination.
clear is that the policy, and its necessarily distanced
execution, resulted in setbacks both for our friendly relations
throughout Latin America and for our security against criminals at
home. Many of the ill-supervised operatives we hired were terrorists
and criminals, and went on to practice their craft against civilians
here and abroad while their "national security" links protected them
against law enforcement. One Mafia gangster the CIA hired was
actually sharing a bed partner with Kennedy at the time also, apparently
without his knowledge.
One may assume
that this distancing of presidential command
from the invited illegal execution has continued. President Reagan
became so obsessed with overthrowing governments in two relatively
small and remote countries, Angola and Nicaragua, that secret operations
were devised in his name to skirt federal laws that specifically
banned such activity. In early 1987, the overthrow attempts appeared
to be failing-in main part because of inadequate popular support in
Angola and Nicaragua. Thousands of innocent Angolan and Nicaraguan
civilians had been killed or wounded.
The secrecy around
the attempts inevitably collapsed, greatly
embarrassing the United States and perhaps mortally wounding the
Reagan administration politically. In the truly important country of
South Africa, the ability of future generations of Americans to trade
with a black majority government was endangered by the United
States's alliance with white minority South Africa over the Angolan
millions-possibly hundreds of millions-of American
taxpayer dollars were missing and unaccounted for. As these
words are written, investigations are underway to sort out what
appears to be a long chain of criminal acts. Already, three senior
government officials, including a general and an admiral, have invoked
their Fifth Amendment right not to incriminate themselves
rather than explain to the Congress what they've been doing with the
money it appropriates.
Rough orders are
given by presidents--prevent such-and-such
from happening at all costs--and left for interpretation straight down
the intelligence community's chain of command.
So when agents
steal, when they facilitate drug deals, how far
does the patriotic cloak granted by national policy stretch to cover
them? Does it cover an agent who lines his pockets in side deals while
working in the name of national security?
What are the
boundaries of law and morality when it comes to
helping foreigners who are regarded as our "friends," and hurting
those who are regarded as our "enemies"? What acts lie beyond a
presidential directive to do "whatever is necessary"? When has license
been granted, and when simply taken?
Should any act, no
matter how wrong, be covered up to avoid
embarrassing our national security program? Who decides--the very
people who run the program? And by what measure? Is the cover-up
really to protect our country's security-or just to protect the
and bureaucrats who should be held to account?
What about the
innocent people-including countless Ameri
cans-who suffer from all this? Is their only compensation to be the
dubious honor of having been sacrificed to a remote battle some men
chose to fight against communism? How many sins can be washed
by the word "anticommunism"?
Is there a clear
line at all between the authorized and the unauthorized
national-security operation? Or are there men in the middle-
who play both ways?
Probably the most
sensational testimony at the Frank Nugan
inquest came from Michael Jon Hand, Nugan's American partner.
Hand identified himself to the court as chairman, chief executive, and
50 percent shareholder of Nuhan Ltd., "the major operating company
of a worldwide group of companies with offices throughout the
world." Most people still referred to the company by the name of its
most prominent subsidiary, the Nugan Hand Bank.
In the three
months since Frank died, Michael Hand had given
contradictory accounts of who really owned Nugan Hand. He
seemed to create whatever story suited him best at the moment. He
had at times portrayed himself as merely a minority shareholder. But
today, under oath, he said he and Frank Nugan had been 50-50
partners. Hand also reported that he was executor of Nugan's estate.
highly decorated member of the Army Special Forces, or
Green Berets, in Vietnam, he went on to be a contract agent for the CIA
in Vietnam and Laos, training hill tribesmen for combat and seeing they
were supplied. A few levels removed, Colby had been his boss. Next,
Hand headed to Australia, met up with Nugan, a local lawyer, and
founded Nugan Hand in 1973.
CIA attachment had helped lure the reporters
to the inquest, thousands of people were interested in Hand's testimony
for reasons that had nothing to do with the CIA or tabloid.
sensationalism. They, or their families or companies, had money
invested with Nugan Hand. For weeks now, Hand and other officers
and directors had stalled off investors who were growing increasingly
itchy about their savings.
Finally, on April
10, a reporter for Target, a Hong Kong financial
newsletter, entered the bank's Hong Kong office, was mistaken for
an investor, and was told that withdrawals had been suspended for
two weeks pending an audit. The next day the story spread through
the international press. Still, depositors were assured, everything was
all right and everyone would be paid.
Now Hand, on the
witness stand, let loose the bad news--not the
truth, not nearly the scope of the disaster, nor the reason for it, but
the bad news. "I understand from enquiries made by me," he said,
"that the company owed about $1.5 million to unsecured depositors.
To my knowledge, certain of these depositors have approached the
company and requested payment of their deposits, and the company
has been unable to repay them and has attempted to make alternative
arrangements. . . .
"The company has
in excess of $5 million of secured deposits,
such deposits being secured by bank-endorsed bills of exchange [like
bonds] to face value. However, most of these deposits are on call, and
each time a secured depositor calls a deposit, the bills of exchange
have to be sold and the company is unable to meet the deficiency and
payout each secured creditor...." More double-talk, but the message
was clear. Even the allegedly "secured" depositors wouldn't be paid.
"I have inspected
a schedule of the bills of exchange, and from
enquiries made by me the drawers, acceptors and endorsers of those
bills of exchange are insolvent companies, and the bills of exchange
will not be met on maturity...." Translation: the bonds allegedly
"securing" the secured deposits were phony.
"Enquiries made by
me indicate that the company owes approximately
$2.8 million to its subsidiary in Hong Kong.... I understand
from the resident director of Nugan Hand Hong Kong .Ltd., Mr.
John McArthur, that unless these moneys are repaid forthwith,
Nugan Hand Hong Kong Ltd. will be unable to meet its obligations
"Enquiries by me
indicate [that the Hong Kong deposits] should
have been secured by bank-endorsed bills of exchange. but the deposits
are totally unsecured.... The company is not in a position to repay
any part of the amount outstanding." Translation: the overseas investors
had been taken, too.
unpayable claims mounted to some $50 million.
And many other deposits were lost, but were never claimed, for the
simple reason that the money had been illegal to begin with. Much
of the money Nugan Hand received consisted of tax cheatings, dope
payments, Marcos family money, and, rumored, the hoarded wealth
of a few other Third World potentates--not something the losers
would want to account for in an open bankruptcy court. The missing
money could easily have been in the hundreds of millions of dollars.
Now, Hand, on the
witness stand, laid the blame on a party who
wasn't likely to object: "I have ascertained over the last two months
that the late Mr. F. J. Nugan has fraudulently misappropriated a vast
amount of money from the company and other companies in the
group without my knowledge." The embezzled money, Hand said,
was paid "to certain of his personal companies and to himself."
Hand said legal
advisors had told him it would be "a long and
involved process to recover these moneys, if at all."
Up to $3 million
had been "loaned out to persons or companies
whose identity is either unknown, or without formal documentation.
. . . Prospects of recovering these moneys is extremely remote." Hand
also complained that Nugan's surviving records "were incomplete
and misleading." (Later, it would become clear that Hand himself
played no small part in making sure the records were incomplete.)
embezzlement, on top of a stock fraud indictment that was
pending against Nugan, might seem to create a motive for him to
have committed suicide. But when lawyer Alexander Shand, representing
Sun Alliance Life Assurance Ltd., repeatedly suggested as
much, Hand denied it. Hand argued that his partner more likely had
been murdered. "I believe that Mr. Nugan was a fighter and would
have kept on going," he insisted.
In response to
further questions, Hand disclosed the appallingly
slipshod police investigation into Nugan's death. Hand was surprised,
he said, "that the Police Department have not come down
there [to the Nugan Hand office] and tried to look for his diary.
. . . We certainly have not seen it. I would like to know what his last
notes were, and where he has been and who he has been speaking to."
Hand said police
hadn't even talked to him until two days before
the inquest began, and then just to ask him "if I would be kind enough
to put together a very brief and concise statement because they had
a very short period of time." He said the police had never visited his
Before Hand was
through, the lawyers made him squirm some.
They revealed through their questions the fact that he had been called
to testify one month earlier before an Australian royal commission
looking into the drug racket. They made public certain sections of
his testimony revealing that large amounts of money had been transferred
by Nugan Hand from Australia to Hong Kong secretly, in
apparent violation of exchange control and tax regulations.
Hand stuck by the
same tortured excuses he had given to the drug
inquiry. He was just following orders.
"Mr. Nugan advised
me that it was part of a tax plan," Hand
"And you accepted
it as being part of a tax plan?"
he was a solicitor [lawyer]."
"But now you say
you regard them as improper purposes?"
"I cannot find,
because 1don't have adequate facts available at my
fingertips to determine what in essence the purposes were of such
transactions ... Mr. Nugan would call me up from time to time or
send me a note and ask me to pay a bill or to send money to a
particular direction. 1would have no knowledge of whether the client
was in Australia or in Timbuctoo, and Mr. Nugan continually assured
me that he would not breach any Reserve Bank regulations."
Hand was lying,
and events would prove it. The law in Australia,
and most other countries where Nugan Hand dealt, forbade the
export of money. Hand himself had boasted earlier that Nugan Hand
moved $1 billion a year through its magical windows. It certainly
didn't do this with Reserve Bank approval.
The real questions
should have been asked of the Australian security
agencies: how they could have let an operation the size of Nugan
Hand break the exchange laws with impunity for so many years -- unless,
of course, the Australian agencies were cooperating with it,
or had been told that Nugan Hand had a powerful government
sanction from abroad. There was reason to suspect that.
But for now, Hand
was reduced to inventing new lies that the
insurance lawyers in Lithgow would be unprepared to challenge.
There were really two Nugan Hands, he suddenly said, one in Australia,
controlled by Nugan, and one in Asia, controlled by Hand.
This was certainly something the customers had never been told
before. But now Hand was blaming all the problems on the Australian
end of the business.
admitted how bare the cupboard really was. He told
shocked onlookers that the Nugan Hand Bank, which had believably
claimed to move more than $1 billion a year, owed $20,000 rent for
the Sydney headquarters "and the company is unable to pay this.
. . . The company is insolvent."
There was no meat
on Nugan Hand's platter anymore. But there
was still plenty of spice, and Sergeant William Leslie McDonnell
gave the newspapers one more thing to write about when he testified
about the scene at Nugan's multimillion-dollar waterfront villa just
hours after the body was discovered and identified.
didn't find the widow, Frank's wife Lee, at
the house. Lee still hadn't returned from her home town of Nashville,
Tennessee, where she had gone with the couple's two children to live
six months before. Charlotte Lee Nugan always maintained that it
was perfectly natural for her to take the children to live with her
parents half a world away, and that it wasn't a sign anything was
wrong with her marriage. But friends assumed she just couldn't take
any more of her husband's mercurial swings from a fifth-a-day Scotch
habit to teetotalism, and from tireless pursuit of money to religious
Even with Mrs.
Nugan gone, however, Sergeant McDonnell
found the lights on. Ken Nugan, Frank's older brother, was there
with his own wife. Ken had taken over their father's fruit-and-vegetable
business while Frank had gone to law school and become an
Recently, Ken had
invb1ved the fruit-and-vegetable business in a
stock scandal that was getting wide publicity in Australian newspapers.
The name of a prominent drug racketeer had popped up.
Worse, Nugan Hand money had financed the business, and Frank
had advised Ken on a scheme to block outside shareholders from
taking control. As a result, a month before he died, Frank Nugan had
found himself indicted with Ken on charges of stock fraud. Their
name was so sullied that just before Frank's death the Nugan Hand
holding company, Nugan Hand Ltd., had changed its name to
Ken's lawyer also
was at the house the night of Frank's death -- not
unusual in itself, but what interested Sergeant McDonnell was
the identity of the lawyer Ken had chosen. To assist him at this trying
time, Ken Nugan had brought to his brother's house a solicitor
named Brian Alexander. McDonnell knew that Alexander was under
summons from a Commonwealth police inquiry-similar to a grand
jury subpoena in the United States. He also knew that Australian
customs officials wanted to talk to Alexander.
The reason for all
this attention was that Alexander had become
very close to a major international heroin syndicate whose members
he was representing, including the leader, a man known as "Mr.
Asia." The ring was British in origin, but operated in the United
States, Australia, New Zealand, and, of course, southern Asia, where
the heroin came from. Police had begun to suspect that Alexander
himself was part of the "Mr. Asia" syndicate.
their suspicions confirmed a year later when
Alexander disappeared. His body wasn't found-not surprising, perhaps,
since the Mr. Asia syndicate was already known to go to extraordinary
lengths to disguise and hide bodies. But Alexander's car
was located, abandoned, at a park overlooking the ocean near Sydney.
It created a sensational news story.
against which Alexander had been defending the
heroin bosses included half a dozen murders of turncoat syndicate
members who had been secretly talking to narcotics officers. Police
were now building a case that Alexander, by bribing some corrupt
Australian narcotics officers, had fingered the victims. At this point,
they hadn't even come close to guessing that the widely advertised,
supposedly reputable Nugan Hand operation was a vehicle for the
suspected bribe money.
One might expect
that the police, faced with the mysterious
shooting death of the head of a large international bank, would try
to seal off the house to prevent Ken Nugan and his lawyer, Brian
Alexander, from removing any papers. But Sergeant McDonnell just
interviewed Ken, learning that the recent indictment had "weighed
very heavily" on Frank Nugan. On the other hand, Ken told McDonnell
that he saw his brother hours before the shooting. Frank had just
returned from Europe, where he said he sealed a big bank expansion
deal. He "was quite happy and untroubled except that he was so
terribly tired and suffering from jet lag," Ken told the policeman.
testified that he was the chief investigating
officer in the case, he said he didn't go to the Nugan Hand office. He
said that a manager on the Nugan Hand staff, Graham Arthur Leighton
Edelsten, had assured him that no important papers were to be
evidently thought otherwise. He testified that he
went into the Nugan Hand office tbe very next morning, January 28.
There were suggestions, never clearly confirmed, that Ken had obtained
keys to the office from police, who had got them off Frank's
body. Ken Nugan testified that he removed various documents from
the office, but he assured the court that the only documents he took
were from Frank Nugan's private law office, which was inside the
bank. The papers concerned the brothers' joint criminal defense to
the stock manipulation charges, and nothing else, Ken said.
The inquest didn't
have the benefit of testimony from Patricia
Swan, Frank Nugan's longtime secretary and administrative aide.
But later, in a statement that was filed during the government's
attempt to prosecute her, she gave a version of the looting that makes
Ken Nugan's testimony seem a bit tame. That Monday, January 28,
was a public holiday in Australia and all offices were closed. But Swan
(according to her statement) got a call at 8:30 A.M. from Stephen Hill,
a thirty-four-year-old Australian who had joined Nugan Hand six
years earlier as assistant money manager and was now its vice-president
and financial officer. Hill asked Swan to run in to work despite
"I arrived at the
office about 9: IS A.M. to find Steve Hill, Dennis
Pittard, and Ken Nugan already in the office," she said. (Pittard was
a well-known Australian football hero who, on retirement from the
sport, went to work as goodwill ambassador for Nugan Hand.) Swan
went on: "When I went into my office I found my desk drawers
open-to my surprise. Only I and Frank Nugan had keys to those
drawers. I can only assume Ken Nugan had obtained Frank Nugan's
keys from the police.
"Ken Nugan was
taking out of the office the masses of papers
pertaining to the Nugan Group [the fruit company] litigation. He
also asked me if 1 could find the document that Frank and he had put
together, showing dates and amounts of money that Frank had advanced
to Ken, and what amounts Ken had paid back. I was unable
to locate this document and to my knowledge Ken Nugan did not
"Steve Hill then
told me to go through' all the filing cabinets and
drawers in my room and Frank's room and 'take out anything that
might implicate you or go against you.' I asked Steve if he could be
more specific, as I had no idea what I was meant to be looking for,
and he just repeated what he first said.
knowing what I was looking for, 1 quickly went
through the filing cabinets in my room-quickly, as both Ken and
Steve seemed to think the Corporate Affairs [Commission, the Australian
counterpart to the U.S. Securities and Exchange Commission]
or the police might arrive at any moment. Steve was in his room
putting papers, and I remember in particular either cash books or
ledgers or journals, in cartons, and Dennis Pittard was taking them
downstairs--presumably to put in a vehicle to take away."
Swan said she
didn't remember taking any documents out of the
office herself, and that she left with Hill, Pittard, and Ken Nugan
after about an hour and a half, "The other thing I remember Ken
Nugan telling me was that the next day, the first working day after
Frank's death, would be horrific, that the police and Corporate Affairs
would be down and things wouldn't be easy."
But the lawmen
weren't nearly so diligent. They didn't even
show up the next day, when the more methodical ransacking of the
files took place. Present for that job was a team of former U.S.
military operatives in Southeast Asia, led by former CIA-man Mi-
chael Hand and including the president of the Nugan Hand Bank,
Rear Admiral Earl P. ("Buddy") Yates.
Nineteen forty-three graduate of the U.S. Naval Academy,
Legion of Honor winner in Vietnam, commander of the aircraft carrier
USS John F. Kennedy. then chief of staff for plans and policy of the
U. S. Pacific Command. in charge of all strategic planning from
to the Persian Gulf, until his retirement from active service in July
He became president of the Nugan Hand Bank early in 1977.
1. Seymour M.
Hersh, in his landmark The Price of Power cites South Vietnamese
government statistics listing Phoenix casualties at 40,994, and
concludes that the
victims numbered "far more than the 21,000 officially listed by the
2. Jonathan Kwitny,
Endless Enemies (1984).
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