Who's Who in the C-130 Scandal
by John Titus
[Editor's note: Consult flow chart for connections of components in this labyrinth of fraud.]
An estimated 42 former military planes, both Air Force C-130's and Navy P-3 Orions, were diverted into a long train of covert operations under cover of firefighting. Early attempts to obtain A-10 "Wart Hog" jet fighters were shut down by the Department of Agriculture's Office of Inspector General (OIG), but broker Roy Reagan did manage to obtain six Bell UH-1E "Huey" helicopters from a Naval museum.
In fact, all these military aircraft were exchanged for obsolete planes nominally destined for museums.
After leaving the Air Force, Reagan used a network of contacts to successfully broker former military aircraft on the open market. One C-130 obtained by Reagan in 1986 was sold to Detrich Reinhardt and Peter Turkelson, both of whom have been identified as CIA operatives by Congressman Curt Weldon (R-PA). Weldon investigated the affair following the crash of this C-130 in Angola while on a CIA mission. Robert Weldon, the congressman's nephew, died in the crash. Reinhardt had previously owned St. Lucia Airlines, which was used by Oliver North to smuggle missiles to Iran during the embargo.
As his payoff, Reagan received in excess of $1 million, including several C-130's which he later resold.
Reagan and Forest Service official Fred Fuchs have been indicted by a federal grand jury in Tucson, Arizona, for conspiracy and theft of government property.
Reagan has hired attorney Stuart Gerson to represent him. It was Gerson, as acting attorney general in the late Bush and early Clinton administrations, who ordered the tanks into the tragic siege of the Branch Davidian ranch in Waco, Texas.
As former director of the Forest Service aviation program, Fuchs (and Reagan, according to the indictment) met with and misled Department of Defense and General Services Administration officials as to who would ultimately retain title to the aircraft in question. Government officials believed that the planes would remain under Forest Service control, and that they would only be used for forest and rangeland fire management. As his payoff, Fuchs received flight-time upgrades to his pilot's license from the very contractors he negotiated on behalf of. He also received a vintage "Steerman" bi-plane aircraft.
James P. Ross
Ross, a business partner of Reagan's, is named as an unindicted co-conspirator in the case by the U.S. Attorney in Arizona. Ross delivered C-130 aircraft to one of the firefighting contractors, Hemet Valley Aviation of Hemet, California, and is identified in a 1983 Federal Aviation Administration document as the inspector of the C-123 cargo plane that was later shot down on a supply mission to CIA-backed Contra rebels in Nicaragua. (Eugene Hasenfus survived this crash and named the CIA agents he worked for, thus destroying the government lies that they did not run the Contras.) The same C-123 had also been used by CIA pilot Barry Seal in his cocaine-running operations.
Jack Chisum was a vice president of T&G Aviation of Chandler, Arizona. He is believed by an investigator to have been set up and turned in to authorities by Evergreen Aviation and Southern Air Transport for "muscling in on the [Middle East] C-130 action." It was Jack who provided the investigator with the outline of the C-130 mission to Kuwait, in which T&G Forest Service contracted C-130's went on missions in Kuwait at the close of the Gulf War. T&G was allegedly hauling oil-field equipment for Bechtel Corporation, but Evergreen and Southern Air claimed the company was illegally hauling whiskey into the Arab nations.
Whatever their cargo was, T&G was contracting for Bechtel through a company called MARTECH. The aircraft on the Kuwait mission were ordered to return to the U.S., and were flown to Evergreen's air complex at Marana, Arizona.
Jack Chisum was a long-time friend of Gary Eitel. Their association dated back to a time when they both flew for the Forest Service in the 1970s. It was Chisum who explained the details of rogue CIA missions involving the ex-military workhorses. And, sadly, many secrets have died with Chisum, who was struck and killed by a vehicle while walking down an Arizona highway. Gary Eitel has never been satisfied with the results of the accident investigation, and believes that Chisum may have been targeted, hit and silenced.
Eitel has spearheaded the investigation into the illegal uses of the former military aircraft. After military service, Eitel flew for the Forest Service, the Department of Defense, and private companies in Alaska. He is a decorated Vietnam combat pilot, and became a law enforcement officer and later an attorney in Texas.
In 1976, he was recruited to fly CIA missions in Angola, and other missions involving Lear Jets that were operated out of southern Oregon.
As early as 1989, while Eitel was employed at Evergreen Aviation, he observed that card-carrying CIA personnel were on Evergreen property acting as Evergreen employees.
According to documents filed in Federal Court, it was Eitel who tipped government officials off to both the corruption in the Forest Service aircraft exchange program, and another scandal charging that Evergreen Aviation defrauded the U.S. Postal Service by over-billing that agency an estimated $52.6 million on a two-year contract. Court filings state "Evergreen exploited its CIA contracts by offering the CIA [services] over and beyond the primary CIA contract and, allegedly, on no charge to the CIA on the pretense Evergreen would be able to over-bill the Forest Service, Air Force, and United States Postal Services contract." In 1993, Gary Eitel testified before Congress concerning his knowledge of the C-130 scandal. (See July/August '94, "The Sky Pirates: Aerial Heavy Hauling," p. 1; January/February '95, "Cloak, Dagger and Cockpit -- An Evergreen Update," p. 17; July/August '95, "CIA Airlines Never Die," p. 4; and July-October '96, "Steal a C-130 -- Go to Jail" [an update], p. 7.)
Eitel has federal prosecutor status on behalf of the government in both of these cases. Until December 1996, the government held back and let him pursue the C-130 case alone. It was only after the recent indictments of Reagan and Fuchs by a U.S. Attorney in Arizona, that the Department of Justice entered the lawsuit to save face, and possibly manipulate it.
As the result of his investigation and lawsuits, Eitel has received a number of threats, and, considering the mysterious deaths of Jack Chisum and another Evergreen Aviation pilot, Dean Moss (see March/April '94 issue, "Evergreen Pilot Murdered on Weapons Flight," p. 1; May/June '95, "Air Force Investigates Evergreen," p. 4 [and sidebar, p. 5]; and update, May/June '96, p. 3), these threats are taken seriously.
In the 1980s, Joseph P. Russoniello was a U.S. Attorney in California. Presumably, a U.S. Attorney is a tough prosecutor who represents the best interests of the public; but Russoniello went soft when it came to a drug case involving the CIA.
Between 1981 and 1984, the DEA had compiled sufficient evidence to crack the biggest cocaine ring in California at that time. Police had nabbed several "frogmen" swimming onto a beachhead carrying at least four-hundred pounds of cocaine. Ultimately, 35 people were arrested, along with guns, drugs, catalogs for automatic weapons and silencers, and $36,800 in cash. Federal prosecutors declared that the money was evidence from the drug operation, and would be used for the trail. While this appeared to be a clean bust, the authorities were about to have a rug pulled out from under them.
The drug ring's alleged leader, Julio Zavala, claimed that the cash was not drug money, but was money earmarked to purchase weapons for the CIA's illegal Contra war in Nicaragua. Zavala requested that the money seized by the cops be returned to the Contras. According to Gary Webb of the San Jose Mercury News, Russoniello decided not to keep the cash as evidence, and did not want it forfeited to the government, which is the standard procedure in drug cases. The drug money was then returned to the Contras. In a 1996 Senate hearing, Senator Arlen Spector and investigator Jack Blum openly discussed Russoniello's capitulation to Contra drug-runners. Blum stated that Russoniello had angrily shouted at investigators and Senator John Kerry, who was chairing the committee investigating intelligence-community links to the drug trade. Russoniello accused them of being "subversive for wanting to go into it."
Some may say that Joseph Russoniello (now an attorney for companies that allegedly obtained government aircraft illegally) went from prosecuting criminals to representing criminals. Others may say that from the "frogman" cocaine case to the current aircraft scandal, Joseph P. Russoniello has always represented the best interests of the CIA.
It should be noted that documents filed in federal court indicate that Russoniello believed he had an agreement with the Justice Department that his clients would not be the target of any grand jury indictment, and that the government would not intervene in Gary Eitel's whistle-blower case. Has Rusoniello cut another deal with the devil?
Evergreen International Airlines
Originally based in McMinnville, Oregon, Evergreen expanded from a small helicopter company in the 1960s to a major international airline with secretive government contracts.
In 1975, after a series of revealing hearings led by Senator Frank Church, the CIA was pressured to sell off its lucrative business front companies. The result of this program was the privatization of those former government assets into corporate hands. It was Evergreen that was chosen to take over the CIA's airbase at Marana, Arizona, which led to decades of privileged treatment regarding Evergreen's government contracts. Top CIA aviation officers, including the legendary George Doole, worked for Evergreen. Prior to working for Evergreen, Doole had managed all of the CIA's proprietary airlines.
In the last few years, Evergreen has faced industry criticism and hard financial times. In 1994, the company defaulted on $125 million in junk bonds and found its books open to public scrutiny, not a comfortable situation for a CIA contract airline.
In late December 1996, Evergreen announced that an unnamed financial institution would help Evergreen buy back all $125 million of the defaulted junk bonds. The company, which is saddled with a tremendous amount of debt, is considered the recipient of a back-door government bailout.
Pacific Harbor Capital / PacifiCorp
To understand the complexity of this aircraft-laundering
operation, consider this exchange:
This operation was obviously intended to "wash away" Forest Service ownership and to help "sheep-dip" sophisticated military aircraft, some of which were equipped with electronic surveillance gear. [Sheep-dip is spook-speak for concealing the source, purpose or nature of something so that it can be used in ways that would otherwise be impossible.]
PacifiCorp, a Northwest financial giant, is the parent company of Pacific Harbor Capital, and according to the 25 October 1993 issue of the Seattle Post Intelligencer, PacifiCorp is also linked to the CIA. And not surprisingly, the 1975 Senate hearings led by Frank Church identified the holding company for all the CIA airlines as "The Pacific Corporation."
Independent Firefighting Contractors
This company appears to be a major hub of the conspiracy to obtain government aircraft. Roy Reagan maintained an office at Aero Union and his associate, John Ford, is a key attorney is handling aircraft sales for him. Joseph Russoniello is the corporation's top legal talent.
Hemet Valley Aviation
C-130 aircraft were delivered to Hemet Valley Aviation by James P. Ross, who inspected and certified aircraft linked to Oliver North's and Barry Seals' gun- and drug-running operation for the Contras.
Hemet Valley sold two C-130s to Michael Zincka Leasing in 1989. The registration numbers of these aircraft identify them as "C-130-A Modified versions" that were equipped with sophisticated electronic reconnaissance gear.
Zincka Leasing put them to work for French Securite' Civile, the French CIA, for two years.
Reagan, Fuchs, and the other companies cited in this article are attempting to dump on T&G Aviation. While Woody Grantham and Jack Chisum contracted out for the missions in Kuwait, they had State Department approval for that work.
However, the Forest Service mandate for the use of the aircraft stated that they could only be used stateside for fire-suppression use.
T&G's Jack Chisum had related much of this information
to Eitel before his death; Eitel is pitted against the former acting
Attorney General of the United States Stuart (Waco) Gerson and former
California U.S. Attorney Joseph Russoniello (who returned CIA drug money
to the Contras.)
Hawkins and Powers
This company leased one of the Forest Service C-130's to British Aerospace Corporation, and another to Multitrade International, a company linked to a previous C-130 sale.
In the late 1970s, a number of military C-130's were flown in from the Australian Air Force, destined for use by private American air contractors. The company that brought them over was Southern Cross (owned by Multitrade). Most of the planes were brought under the control of the law firm Ford & Vlahos. Mr. Ford in this case is John Ford, a powerful attorney who is listed as an assistant secretary for T&G Aviation, as well as attorney for Pacific Gas & Electric (a California energy corporation), and attorney for Pacific Harbor Capital (a subsidiary of PacifiCorp, another financial giant that is linked to the CIA). At least one of these former Australian C-130's was involved in the Mena, Arkansas, CIA gun-and-drug operation. Another, tail number N69-P, was being operated on Roy Reagan's certificate (a sort of operating license), on contract for the U.S. military's Nuclear Defense Agency. This same aircraft was later busted by the DEA in Miami, Florida, on a cocaine smuggling mission.
The plane was then sold to a U.S. Customs agent and flown to T&G Aviation to be refitted, and then went on to work in Africa.
TBM, of Tulare, California, was one of the first companies to deal with Roy Reagan. They gave two of their Forest Service C-130's to Reagan in a complex series of aircraft sales. TBM owns about 70% of Butler Aviation of Redmond, Oregon.
In 1994, after the tragic deaths of 14 firefighters in a Colorado wildfire, the owner of Butler Aviation, Cal Butler, wrote the governor of Colorado a revealing and disturbing letter.
Butler, who pioneered early techniques using aircraft to fight forest fires, told Governor Roy Romer that the loss of lives could have been avoided had airtankers been available to drop fire-retardant material. This was at a time when Forest Service aircraft were being used, illegally, in Europe and Latin America.
Butler, the only apparent co-conspirator with a conscience, maintains the skeletonized hulk of one Forest Service C-130, stripped of its electronics and running gear, at his facility at Redmond, Oregon.
This criminal conspiracy is evolving on a day-by-day basis, and parallel court cases are being pursued in both Oregon and Arizona. Here is the short list of what we do know:
- According to private and congressional investigators,
the CIA has been using some of the Forest Service aircraft.
Sources close to the case have told the Free Press that a veil of national security has been wrapped around the trial, and that U.S. Attorney Claire Lefkowitz, who has been very candid with reporters in the past, will provide no further comments!