ce399 | research archive: (anti)fascism

Exposing the Libyan Link by Seymour M. Hersh (NY Times – June 21, 1981)

Posted in Uncategorized by ce399 on 05/04/2011

Five years ago, two former operatives of the Central Intelligence Agency made a deal with Col. Muammar el-Qaddafi to supply the Libyan strongman with explosives for huge sums of cash. They also hired former Green Berets to set up a secret training school to teach the Libyans the latest techniques in assassination and international terrorism. As a cover for these operations, the two men, Edwin P. Wilson and Frank E. Terpil, operated several seemingly legitimate export companies. To head one such company, they hired another former C.I.A. employee, Kevin P. Mulcahy. For a long time, Mulcahy let himself believe that the entire operation was really part of an unofficial but approved American intelligence operation being carried out by an ”old-boy” network of former Government workers, intelligence agents and Green Berets with strong and lasting connections to Washington officialdom. In this, the second of a two-part series, Mulcahy discovers that the Qaddafi connection is illegal and not an intelligence operation, and, at considerable personal risk, goes first to the C.I.A. and then to the F.B.I. Seymour M. Hersh, a former reporter for The New York Times, is at work on a book about Henry Kissinger to be published by Summit Books. By Seymour M. Hersh hortly before midnight on a muggy Washington Sunday in September 1976, Kevin P. Mulcahy, a former C.I.A. analyst who was then in the export business, telephoned the duty officer at agency headquarters in McLean, Va. ”There are problems overseas,” Mulcahy said without elaboration, and he had to talk immediately to the agency’s assistant to the deputy director of clandestine operations.

Mulcahy would wait for a return call.

The call came within the hour. On the telephone was Theodore G. Shackley, one of the most influential men in the C.I.A. Mulcahy had a disturbing tale to tell. The firm of which he was president had agreed to sell the hardware of terrorism – explosives and delayed-action timers – to Libya’s Col. Muammar el-Qaddafi. Moreover, the firm had also agreed to set up a training school to teach Libyans the latest in the techniques of terrorism and political assassination. Only days before, Mulcahy told Shackley, he had been ordered to purchase an American-made Redeye missile, a weapon capable of shooting down a commercial airliner, for delivery to the Libyan ruler. Mulcahy’s two business partners, Edwin P. Wilson and Frank E. Terpil, who had brought Mulcahy into the firm, were themselves former C.I.A. operatives.

Now, on the telephone, Mulcahy asked Shackley: ”Is this a C.I.A. operation or not?” Shackley was noncommittal, and Mulcahy now knew that his worst suspicions were correct: The Wilson-Terpil operations did not have the sanction of the C.I.A. He knew that in the close-knit world of Government intelligence word would somehow get back within days to Mulcahy’s partners that he had gone to the authorities. So he quickly went into hiding, disguising his appearance and using a false name. But he anticipated that his partners and their associates would be quickly seized, convicted and imprisoned. He expected this would happen not only for his own well-being, but also to stop an operation he believed inimical to the national-security interests of his country and to world peace.

But things did not work out that way. The Federal law-enforcement agencies eventually became enmeshed in a long series of bureaucratic rivalries and intrigues that hampered and delayed the investigation. There was another complication: a lack of Federal statutes that expressly barred acts of terrorism by Americans abroad.

Mulcahy found himself in limbo, not a fugitive from justice but, in a sense, a captive of it. Over the coming months, there were no quick arrests. And while he was in hiding, Wilson and Terpil were steadily expanding the scope of their operations inside Libya. They arranged for illegal shipment of more than 40,000 pounds of explosives to Libya and continued to recruit former Green Berets and Government ordnance experts for their training school. Qaddafi is believed to have relied on the American-provided materiel and training in his efforts to expand his influence in the Middle East and North Africa, including the invasion earlier this year of neighboring Chad. The Libyan ruler is suspected, too, of having ordered the political assassination of 10 or more of his political enemies living in exile, with the aid, in at least one case, of Wilson and Terpil. It would be four years before the two men would be indicted by the United States Attorney’s office in Washington on charges that included illegal export of explosives as well as conspiracy and solicitation to commit murder. They are both at large to this day. As a result, Mulcahy has now, in frustration, decided to tell his story publicly for the first time. evin Mulcahy’s business partnership began to unravel in Europe in late August 1976 after he was ordered by his partners to purchase the Redeye missile for Qaddafi. He then left Wilson and Terpil and flew to Washington to find out all that his company, Inter-Technology, was doing in Libya. After he arrived, he went to the company offices and went through the files. It was what he found there – documents marked ”secret” which he, the firm’s president, had never seen – that led him to call the C.I.A. duty officer. There were contracts and correspondence which explicitly defined the corporation’s ostensible business dealings with Libya as cover operations, and which contained forgeries of Mulcahy’s signature.

The documents outlined a 26-week ”training program for intelligence and security officers in the field of espionage, sabotage and general psychological warfare,” and one page said the program’s emphasis would be ”placed on the design, manufacture, implementation and detonation of explosive devices.” Mulcahy further learned that his partners had proposed to Qaddafi that the first graduates of the terrorist school demonstrate their skills by blowing up an Aramco pipeline in Saudi Arabia.

Mulcahy knew he was in trouble. Wilson and Terpil, he says, ”had set me up beautifully. By then, I was in deep enough, and I knew they had me. I picked up an ashtray from Frank’s desk, threw it across the room, and broke a lamp.”

As president of the company, he knew he could be held criminally responsible for its activities, and, he says, ”I had to think – what the hell do I do now? I had to find out. Was this a C.I.A. operation or not? Did it involve national security? I still wanted to think there was a possibility that Ed and Frank were acting on behalf of the C.I.A. If it was a C.I.A. operation, I had two options – continue to do it, or get out. If it wasn’t C.I.A., then I could make up my mind: Do I want to make a lot of money or do I get out and take my chances?”

He knew only too well the dangers. A few months earlier, Terpil had passed a message to Wilson, through Mulcahy, reporting that ”the hit’s been taken care of.” Mulcahy learned from the talkative Terpil that Wilson felt he had been cheated six or seven years earlier by a merchant in Paris on a transaction involving British woolen uniforms in storage in Nova Scotia. The ”hit” referred to by Terpil apparently was a bomb that went off under the mer-chant’s auto, severely injuring his wife, who apparently was alone.

Kevin Mulcahy’s initial belief was that Wilson and Terpil were operating with the full sanction of the C.I.A. He had been told the exported explosives and other materials were to be used to clear mines planted in Libya’s harbors and battlefields during the 1973 Arab-Israeli war. Mulcahy clearly wanted to believe the cover story. His own allegiance to the C.I.A. was deep; he had worked for the agency as an intelligence analyst in the 1960’s, and his father had begun working there in 1947, the year it was chartered. In 1968, Mulcahy resigned to take a job in the electronics industry, and in 1976 Ed Wilson offered him a high-paying position in his export company. Mulcahy knew Wilson had served with credit in the C.I.A.; knew he was widely respected by his former agency associates, and was led to believe that important ties still existed.

Indeed, one night, not long after Mulcahy joined the business, Wilson took him to Theodore Shackley’s home. Shackley later said he welcomed such visits from Wilson because they produced useful intelligence. Among other things, Mulcahy recalls, Wilson and Shackley discussed Wilson’s forthcoming visit to Libya for a meeting with Qaddafi. Wilson’s main purpose for the meeting, however, Mulcahy says, was to seek Shackley’s intervention in the granting of a Government export license for a pending sale of high-grade communications gear, whose export was about to be disapproved by the State Department. It is not clear what significance Shackley gave to the visit, but Mulcahy certainly thought he understood the point: that the export business was covertly approved by the C.I.A.

After Mulcahy’s alarming discovery in his company’s files, he knew he needed help, that he had to talk to someone. ”My first instinct was not to hurt anybody,” he says. ”If it was a C.I.A. operation, I didn’t want to blow it by exposing it to an outsider or to some underling at the agency. I felt there was no one I could safely talk to about what I had found.” So he turned to Shackley. If the Wilson-Terpil operation was C.I.A., Mulcahy knew he could discuss it with Shackley without jeopardizing it.

But while waiting for Shackley to return his call, Mulcahy also telephoned an old family friend who worked in the C.I.A.’s Office of Security, and asked him to come over and review the Inter-Technology documents. ”My thought was that no matter what Shackley decided to do, or not do, I wanted someone else in the agency to be aware of the Libyan operation,” Mulcahy recalls. ”I wanted a second reporting source.”

Mulcahy’s family friend was particularly concerned that there was evidence linking Patry E. Loomis and William Weisenburger with the Wilson operation; Loomis and Weisenburger still were on active duty with the C.I.A. The Office of Security official suggested that Mulcahy report his information to the F.B.I. He did so with a sense of betrayal: Nothing in his life had prepared him to be disloyal to for-mer colleagues and associates, particularly in an agency so closely tied to the life of his family. It was that loyalty, perhaps, so widespread throughout the C.I.A., that enabled Wilson and Terpil to operate so openly for so long.

On the very day that he began talking to the Government, Mulcahy received a message from Wilson, who was still overseas: ”He told me to ‘shut up, just knock it off.’ He’ll explain everything when he returns.”

A secretary at Inter-Technology later passed an explicit warning to Mulcahy: ”She knew it was not a C.I.A. operation and she said, ‘Ed is going to kill you.’ ” Mulcahy decided to go underground. He armed himself with an M-16 rifle and spent three weeks camping, shifting campsites every evening. Presently, he moved to a small town in the Shenandoah Valley and established a new identity for himself, with a birth certificate, driver’s license, passport and credit card, and took a job as a drug and alcoholism counselor. A few years earlier Mulcahy had successfully overcome a drinking problem with the aid of such counsel. e also began talking extensively to Federal agents from six investigatory agencies, traveling at his own expense to Washington as often as three days a week. The F.B.I. assigned a group of agents to the case, and Mulcahy was encouraged. ”They said they needed more stuff and we started going through all the paperwork I had. I was drawing diagrams for them, giving them organizational charts, the details of possible political payoffs. I gave them a long statement, agreeing that I would continue to cooperate with them as long as I would never have to testify publicly against Wilson and Terpil, and that my name would never be mentioned in the press. I knew these guys were looking for me. I was afraid of them. They had called members of my family and the woman I was seeing, trying to locate me.” A constant fear was the safety of his two sons, both of whom live in the Washington area with Mulcahy’s former wife and had visited Wilson’s farm.

Meanwhile, the Government received unsolicited first-hand corroboration of his allegations. In early October 1976, John Henry Harper, a former C.I.A. bomb technician who had been hired by Ed Wilson, returned from Libya and, after learning of Mulcahy’s defection, went to the C.I.A. where he, too, described the program that Wilson and Terpil were setting up for Qaddafi. Harper said that he and his fellow Americans had constructed a laboratory and were manufacturing assassination bombs disguised as rock formations, ashtrays, lamps and tea kettles.

Wilson and Terpil also hired three Cubans who had worked for the C.I.A. to carry out an assassination on behalf of Qaddafi. Wilson paid the three men $30,000 in expenses with a personal check drawn on his account in a Middleburg, Va., bank. Instead of carrying out their assignment, the Cubans returned from Europe and reported to the C.I.A.; they told the agency that they had initially believed that their assassination target would be the international terrorist Carlos Ramirez, known to police as the Jackal, the man who planned the 1972 Olympics massacre at Munich. However, after meeting in Geneva with Wilson, the Cubans said they learned that the target would be Umar Abdullah Muhayshi, a Libyan defector who had plotted to overthrow Qaddafi’s regime. The Cubans refused the assignment and returned to the United States. All of this information was made known to the Federal investigators by the C.I.A.

At about this time, Shackley was ordered by a superior to draft a memorandum of his late-night telephone conversation with Mulcahy, about which he had never made a formal report, senior C.I.A. officials discovered. Now Shackley depicted Mulcahy as being irrational, paranoid, alcoholic and an unreliable informant. A copy of the Shackley memorandum eventually was provided to the U.S. Attorney’s office in Washington and to Federal investigators. Shackley’s suggestion – that Mulcahy was not in full control of his faculties – would be taken at face value by many over the next few months. Mulcahy remains hurt and bitter today about the memorandum. ”It was a cheap shot to use my past illness, for which I’d long been treated, to discredit me.”

Wilson and Terpil continued to expand their operations inside Libya. Those in their employ included Pat Loomis, who was still under assignment with the C.I.A. as a liaison officer between its headquarters and its overseas stations; Loomis and others began meeting with Green Berets near the John F. Kennedy Special Forces training center at Fort Bragg, N.C., and urg- ing them to retire from the military and join the operations in Libya. In those contacts, the Green Berets later told a Federal grand jury, there once again was the suggestion that everything had been sanctioned by the agency.

Evidence in the Wilson-Terpil case had been forwarded by the F.B.I. to the Foreign Agents Registration section of the Department of Justice. Complicating the F.B.I.’s investigation was the fact that there are no Federal laws prohibiting the aiding and abetting of terrorist or presumed terrorist activities outside the United States. There was yet another factor that obviously inhibited the initial investigation and made the Wilson-Terpil case seem less urgent; this was the political assassination in September 1976 of Orlando Letelier, the former Chilean Ambassador to the United States. Solving Letelier’s murder, which took place in downtown Washington, became a high priority of the United States Attorney’s office in Washington, draining off manpower and the emotional energy of the staff.

The tension began to build for Mulcahy. He seemed to be unable to get anyone in the Federal Government to share his concern about the vital importance of rapidly stopping the flow of timers and explosives to Libya. Mulcahy knew that assassination weapons were being made in Libya by late 1976; there could be blood on his – and America’s – hands before long. Wilson and Terpil had responded to Mulcahy’s accusations by hiring prominent defense attorneys and depicting Mulcahy as an alcoholic Vietnam veteran for whom they had showed compassion by giving him a job – only to learn that he was unstable and irrational.

In April 1977, a report in The Washington Post on the Justice Department’s pending investigation of Wilson’s ties to Libya brought the matter to the attention of Stansfield Turner, the newly apppointed C.I.A. director. Turner moved to take personal charge of an inquiry into the Wilson operations and quickly learned of Mulcahy’s charges. The C.I.A. director then called in Pat Loomis and Bill Weisenburger (two active-duty employees who were moonlighting with Wilson and Terpil), questioned them and fired them. He also ordered a shake-up in the C.I.A.’s clandestine service, replacing Ted Shackley and his immediate superior, William Wells. ”They were both nice guys,” Turner says, ”but not right for the job.” He will not elaborate. The C.I.A. director further had a directive posted in the agency’s headquarters and sent to every office abroad warning that no employee was to associate with Ed Wilson.

What Turner did not do was call in Kevin Mulcahy. If he had, he might have learned the extent of Wilson’s contacts in Libya and that Wilson’s access inside the C.I.A. transcended Loomis and Weisenburger. Turner also might have learned that the clandestineoperations division had been warned that Wilson was attempting to arrange a political assassination on behalf of Qaddafi, as the Cubans had told the C.I.A. control officers. Moreover, no one in the agency seems to have bothered to inform Turner of John Harper’s account of the weapons laboratory and training programs in Libya undertaken by Wilson and Terpil. The failure of the lower-level officials of the C.I.A. to report fully to Stansfield Turner does not mean that Wilson’s activities were approved of or endorsed in any way, but it does reveal an astonishing and not fully understood modus vivendi of the intelligence business: The primary loyalty of the men in the clandestine service was to Ed Wilson, their former colleague and associate and not to the new Director of Central Intelligence, who was viewed as an outsider who could not understand the mentality of an operative in the field. Kevin Mulcahy had violated the code.

Shipments of explosives for use in terror weapons continued to flow into Libya, and a second generation of timers – far more sophisticated than the first group shipped in 1976 -began arriving in Tripoli. Ed Wilson, with his charm and his C.I.A. expertise, had struck up a warm personal friendship with Qaddafi and he emerged by the end of 1977 as the man in charge. Frank Terpil became disenchanted with his reduced role -and the reduced personal profits – and began spending less time in Libya. Terpil eventually moved on to Uganda, where he received a $3.2 million contract to provide arms, explosives and torture devices, among other things, to the regime of Idi Amin.

Wilson’s contacts with Jerome S. Brower, a California explosives manufacturer, intensified during this period and Brower – who had supplied the first shipment of explosives to Libya in the summer of 1976 -began recruiting bomb experts for the Wilson operations. Federal authorities learned later that two of the experts recruited by Brower – Robert E. Swallow and Dennis J. Wilson (no relation to Ed Wilson) – were civilian Navy employees at the China Lake Naval Weapons Center in the Mojave Desert in California, where some of the Navy’s and C.I.A.’s most sensitive ordnance research is conducted. Swallow and Dennis Wilson, Federal authorities say, spent their annual leave in 1977 on site at Ed Wilson’s training camp in Tripoli. Both men returned to their Government jobs without informing anyone about what was going on in Libya. The men are now under investigation by the United States Attorney’s office.

Not everyone kept his peace. One of the Green Berets reported to military intelligence that he had been approached by Loomis. In another case, as later told to a Federal grand jury, a former Green Beret who had worked in the Wilson-Terpil operations in Libya was extensively debriefed by military intelligence upon his return and referred to the F.B.I. for further questioning. None of these reports seemed to make any difference: The F.B.I. investigation continued at a slow pace; Wilson and Terpil continued their terrorist-supply operations, and Mulcahy continued to hide and to worry every time he started his car.

By mid-1977, Mulcahy had been hired to design and implement a residential treatment program for alcoholics and drug addicts in suburban Washington. But his past association with Wilson and Terpil continued to be a major part of his life, and he began to be annoyed with the F.B.I., not only by the slowness of its investigation, but also by the manner of some of the agents. ”I was sick and tired of talking to the F.B.I. We had a falling out. They kept me totally in the dark about what they were doing, but began to accuse me of holding out on them.” Mulcahy particularly was angered by the agents’ insensitivity: ”They would walk into our treatment center unannounced, right into the middle of the house, looking like Mutt and Jeff, with their trench coats on and their collars turned up.” Such visits inevitably alarmed the patients in the center, many of whom had unresolved problems with the law, and some began to view Mulcahy as a Government informant or under investigation himself.

Mulcahy had no illusions about his status inside the C.I.A. that summer. He had telephoned the Office of Security to see if the agency would provide some protection in case Wilson and Terpil decided to move against him. ”They flatly refused,” Mulcahy recalls. ”It was almost like I was a turncoat. I felt it was National Igloo Week.”

In December 1977, after more than a year of inquiry, the Foreign Agents Registration Office of the Justice Department concluded that Wilson and Terpil, despite conducting ”nefarious” business activities, had violated no American laws. They wrote pro forma notes, known as letters of declination, to the United States Attorney’s offices in Alexandria, Va., and Washington, recommending that the case be dropped. A copy of the letter was shown to Eugene M. Propper, an aggressive assistant United States Attorney who was then directing the Letelier prosecution in Washington. Propper had interviewed Wilson briefly the previous April, and Wilson emphatically denied any involvement in the sale of the timers to Libya; it was a lie that Propper vividly recalled when the Justice Department sought to drop the case. Propper learned that the Justice Department attorneys had relied solely on F.B.I. interviews in their investigation and he thought he could ask better questions and get better answers if he could bring witnesses before a grand jury.

The key was Mulcahy, who reluctantly agreed now to testify – taking a step he had vowed he would never do. ”I liked Gene,” Mulcahy recalls. ”He’s an impressive guy, so I said, ‘All right, I’ll go before the grand jury, but I’m not going into court and testify publicly against these guys.’ I gave the grand jury everything I had” – Propper was doing the questioning – ”and I did it without immunity. What I was telling them was the truth. If I did something wrong I was willing to pay for it.’ ” Federal officials acknowledged in recent interviews that Mulcahy’s grand-jury appearance provided the core of the subsequent indictments.

They also said that Mulcahy had little to fear in refusing immunity. ”Kevin wasn’t a criminal,” one Federal official said. ”He was just doing what his employer wanted.” Mulcahy had committed technical violations of the Munitions Control Act, the official added, but the United States Attorney’s office viewed them as not prosecutable. ”What we had on Kevin showed that he had not done anything to bother anybody,” one official said.

Mulcahy spent much of 1978 working intensely with lawyers in the United States Attorney’s office. Still nothing happened, and by the end of year, he wanted out: ”The whole thing was a farce as far as I was concerned; no one was telling me what was coming down and yet I know that Wilson and Terpil were still doing business in Libya.” He was reassured somewhat, he says, when a Federal official told him that Government authorities had visited Wilson at his farm in Virginia and graphically warned Wilson of reprisal in case anything happened to Mulcahy or his children. ”It made me feel better,” Mulcahy says. ”The Feds paid a visit to Ed late in the night, and told him that if anything happened, they would come looking for him.”

Federal officials subsequently explained that the delay in obtaining indictments did not reflect adversely on Mulcahy or his testimony, but resulted from a basic gap in the law, which does not specifically make it a crime to use American equipment and know-how to further terrorism overseas – as long as no overt acts are done in the United States. Wilson and Terpil were careful, as much as possible, to strike their business deals out of the country. When Eugene Propper initially began his investigation, the jurisdiction of the United States Attorney’s office was limited because of the lack of statutes. Though there was evidence through the Cubans that Wilson and Terpil had conspired with Qaddafi to assassinate one of his political enemies, solicitation to commit murder – that is, asking or hiring someone else to do the killing – is not a Federal crime, and there was no criminal statute in the District of Columbia barring such solicitation.

Propper got an inspiration. He had discovered in prosecuting an earlier case that any crime in the Maryland code not in conflict with the District of Columbia code could be charged in Washington, since the District of Columbia had adopted all of its criminal law from Maryland in 1801. Using that precedent, Propper was able to investigate Wilson and Terpil on solicitation charges in the District of Columbia. Another provision in the Washington code also enabled Propper to make the solicitation charge a Federal violation. So the United States Attorney’s office had its jurisdiction after all, but, once again, there were problems. The Letelier case was going to trial and Propper and a chief aide, E. Lawrence Barcella Jr., were unable to handle both cases at the same time.

By this time, Mulcahy had become deeply embittered, especially toward the F.B.I., which, he said, ”never assigned Special status to this case – which means that the agents assigned to it are working exclusively on it. At first, the F.B.I. didn’t believe me,” Mulcahy insists. ”Every person they interviewed supported Wilson’s and Terpil’s cover story and made me look like a guy with a wild tale to tell. Then if I ever asked the F.B.I. anything, one agent would look at the other to decide whether they could answer the question. It was a one-way street and I felt I couldn’t help them anymore without some kind of dialogue, without their willingness to tell me what they wanted and what they didn’t know.”

Officially, the F.B.I. does not comment on pending investigations, but one agent who did spend much time on the case disputed Mulcahy’s assessment in an interview. ”Kevin is very impatient,” the agent said. ”He thinks he can give us some facts one day and we should begin making arrests on the next.” ”He doesn’t understand the complexity of the case and the fact that no one is exactly cooperating with us. It’s been a long drawn-out affair, trying to get some of these witnesses to give us a straight line. This is not a very easy case to make. We had to start from the beginning, and I think it’s very unfair to criticize us or the United States Attorney’s office. We’ve been working hard on this for a long time.” Other Federal officials, however, echoed Mulcahy in raising questions about the Justice Department’s decision not to give the case higher priority, which would have meant the authorization of more F.B.I. agents for field work. Even now, only one agent in Washington is assigned to monitor developments in the case, and he was pulled off that for months early this year to handle background investigations of pending Reagan Administration appointments.

A major development, in Mulcahy’s view, came in mid-1978, when the Bureau of Alcohol, Tobacco and Firearms assigned a new two-man team to the case. Richard Wadsworth and Richard Pedersen decided early in their investigation that Mulcahy was telling the truth. Now, for the first time, Mulcahy believed that he had someone inside the investigation with whom he could communicate. Mulcahy agreed to cooperate in an undercover investigation with Pedersen and Wadsworth, aimed at gathering first-hand evidence of Wilson’s illegal weapons dealings in Washington – the kind of specific evidence that seemed essential to a prosecution. The operation failed after five months, but the B.A.T.F. agents developed a close relationship with Mulcahy and learned vast amounts about the way Wilson operated, information and insight that later helped them crack the case.

Mulcahy continued to live in low profile, routinely changing his appearance. His fears were compounded late one night when he saw a truck owned by one of Wilson’s trusted associates parked across the street from his home. Mulcahy fled the scene and stayed away from the area for two days. ”It was over three years and I wanted out again,” he said, ”and so I disappeared – just went to Arizona under another name and worked in the construction business.”

Meanwhile, Wilson and Terpil began spending some of the money they were earning. By the end of 1978, they had purchased more than $4 million of real estate in the United States and England, paying in cash. They spent another million dollars for a hotel in Crewe, England, and a town house in London’s posh Lancaster Mews. Federal authorities believed the hotel was to serve as a stop on an underground railway for terrorists. By that time, Qaddafi had set up ”hit teams” that began to terrorize the Libyan exile community in Europe. At least 10 of Qaddafi’s political enemies were assassinated by the gunmen, who later would have access to the hotel to hide from authorities.

Another factor in the investigation of Wilson was his continued high-level political lobbying in the United States, which revolved around the social use of his estate in Virginia. By the mid-1970’s, Wilson was regularly throwing parties and offering hunting excursions at the estate, where senior members of the Carter Administration mingled with influential politicians and members of the intelligence community. Ted Shackley was also one of the guests. ”The name of the game is legitimacy,” one Federal official said. ”Ed Wilson brings three guys from the C.I.A. and Carter’s man brings two senators. Everybody’s legitimizing everybody else.”

”Every place we went,” the official added, ”Ed Wilson popped up – not on the surface, but if you looked far enough, it led to Wilson.”

In early June 1979, the United States Attorney’s office told Wadsworth and Pedersen of the B.A.T.F. that there was not enough evidence to charge Wilson and Terpil with illegally exporting explosives to Libya. The Government had no evidence that any explosives had in fact been shipped to Libya without the proper licenses and without accurate labeling and bills of lading, which are required to insure proper storage of the materials during shipment. All of the witnesses interviewed by the F.B.I. had stuck to the cover story in connection with the shipments to Libya; as far as they were concerned, all that Inter-Technology had undertaken was a contract with the Libyan Government to manufacture timers for use in mine-clearing operations. No explosives had been shipped, the witnesses claimed. Rick Wadsworth decided to make one final effort to find evidence of the shipment before bowing out of the case. He spent most of the Memorial Day weekend in the Federal courthouse in downtown Washington reviewing all of the documents and testimony. He found a work sheet buried in the files that had been turned over by Mulcahy to the F.B.I. in 1976. The work sheet with Brower’s handwriting on it stemmed from the meeting in August 1976 at which the California manufacturer agreed to ship RDX (cyclotrimethylene trinitramine) and the other explosives, suspended in 55-gallon drums, to Libya.

At this point, Eugene Propper was in the process of resigning from the United States Attorney’s office to practice law in Washington and write a book on the Letelier case; Lawrence Barcella suddenly found himself in charge of the Wilson-Terpil case. Barcella agreed, after being shown the work sheet, to permit Wadsworth and Pedersen to fly to California and interview Brower once again. Wadsworth and Pedersen had discovered that the work sheet, on which Brower had listed the type and weights of the explosives ordered by Wilson and Terpil, precisely matched the bills of lading for a shipment of explosives that week from Brower’s factory. The Government now had its evidence.

Over the next year, however, Brower stubbornly continued to insist that he knew nothing about illegal activity in the United States. In two appearances before the Federal grand jury in Washington, he denied that the conspiracy meeting in August 1976, as described by Mulcahy, ever took place. But the evidence, in his own handwriting, proved to be overwhelming and Brower eventually agreed to cooperate with the prosecutors in return for dismissal of all but one of the charges against him – conspiring to ship explosives with the intent to use unlawfully. When he did testify in late 1980, Brower acknowledged that Mulcahy was right; that there had been a key meeting in August which resulted in the initial shipment of the timers and explosives to Libya. He is now serving a four-month prison sentence.

Mulcahy describes Pedersen and Wadsworth as the heroes in the case that no one in the Federal Government seemed to want: ”They worked on their own time, in their own cars, because they knew there was truth in what I was telling them. What they didn’t have was proof. … They were constantly being told to close the investigation, but they told their superiors that if they wanted it closed, they could sign the file shut themselves.”

Mulcahy says now he believes that the laggard pace of the prosecution was not due to a Government cover-up but rather – more frustrating – was the result of bureaucratic inefficiency, rivalries, petty jealousies and what he saw as ”a simple lack of commitment” in the United States Attorney’s office. He says, too, that the F.B.I., the Bureau of Alcohol, Tobacco and Firearms and the Customs Service were reluctant to share information with one another at a time when Wilson and Terpil were continuing to expand their involvement in Libya: ”My most vital concern was that Wilson’s and Terpil’s activities eventually would result in a lot of deaths in the United States. Only then would the full resources of the United States Attorney’s office be committed.”

The revolving door in the United States courthouse was still another complication. Carol Bruce was assigned to the case in 1979. It was her first assignment to a major crime, and she began, as her predecessors had, by reviewing the files and spending hours with Mulcahy. He was encouraged once again: ”She was like a breath of fresh air. She understood the case and grasped its importance.” Coming to it late had an advantage; Carol Bruce was able to add objectivity to what had evolved into an emotional dispute and series of competitions among the investigative agencies. ”She came in with a chain saw,” Mulcahy says, ”and got things on track again.” In late 1979, Carol Bruce and Mulcahy had lunch, and the young prosecutor explained to Mulcahy that he had to continue to cooperate, and that he had to testify publicly against Wilson and Terpil at a trial. If he continued to insist that he would not do so, she warned, he could be indicted himself for his technical violations of the law as president of Inter-Technology.

The grand jury was convened and witnesses again started to come in for questioning. Seymour Glanzer, Wilson’s attorney, made clear that he would involve the C.I.A. as a major component in his client’s defense if the Government chose to indict Wilson. At one point, Federal officials said, Glanzer seemed to suggest that he would offer the prosecutors valuable information about the Letelier case in return for the dropping of charges against Wilson. The prosecutors also were offered a chance to interrogate Wilson in Europe, but they refused to do so and insisted that any plea bargaining would have to include a jail term. Glanzer, asked for his view of the matter, said, ”I can’t comment on the Federal prosecutors’ thought processes, and I’m not commenting on mine.” In late December

1979, Frank Terpil and an accomplice were arrested in New York in the culmination of a secret operation in which two New York City undercover detectives posed as Latin American revolutionaries anxious to purchase any kind of weapons. The investigation, led by the office of Robert M. Morgenthau, the Manhattan District Attorney, accumulated hours of taped conversations involving Terpil, who was trying to impress, as usual. In one tape, Terpil bragged of his ability to sell any weapons, including missiles, and told of his team of former Green Beret experts who were willing to travel anywhere to train terrorists. By then, Wilson’s and Terpil’s team had been at work for more than three years in Libya. The New York evidence was shared with Washington, and was considered essential – although much of what Terpil revealed had already been provided to the Government by Mulcahy. ”I heard Frank was singing like a bird,” Mulcahy says.

Terpil was charged shortly after his arrest with illegal weapons possession. Some of the New York authorities who handled the Terpil investigation privately raised questions about the slow pace of the Federal inquiry in Washington. ”This is one time,” said one senior official in New York, ”that I’d want to be appointed as a special prosecutor (in Washington) or an assistant United States Attorney for about six months.” His obvious point was that the Washington case against Wilson and Terpil should have been handled much more expeditiously. The New York official acknowledged, however, that the case in Washington had been severely hampered by a ”lack of help from the investigative agencies.”

In April 1980, four months after the arrests in New York, Wilson, Terpil and Brower finally were indicted by a Federal grand jury in Washington. Terpil, who had been released on bond after pleading not guilty in the New York case, was arrested a few days later by Wadsworth and Pedersen at the Secret Service training academy in suburban Maryland. At the time, characteristically, Terpil was attending an industrial-security show, looking for equipment that he could sell overseas. The Federal indictment centered around conspiracy charges stemming from the August 1976 meeting in the office of Inter-Technology, as depicted in Mulcahy’s grand-jury testimony. The indictment also accused Wilson and Terpil of conspiring to assassinate the Libyan dissident. Mulcahy’s relief over the indictments was short-lived, however, because a Federal magistrate subsequently reduced Terpil’s bond from $500,000 to $75,000, of which only $15,000 had to be put up in cash. ”To me, it was the most absurd thing in the world,” Mulcahy recalls. ”I knew he was going to split – I knew him, his life style, the fact that he had at least six different passports.” Mulcahy also knew that Wilson and Terpil had been quietly disguising their ownership of their business ventures and properties in the United States to avoid Federal seizure. ”I took the reduced bond as a reflection of the importance the Government attached to this case – a $15,000 cash bond when millions of dollars and the resources of the Libyan Government were at his disposal.”

On Sept. 3, 1980, more than four months after his indictment in Washington and the day before he was to begin trial on the New York charges, Terpil fled to Europe.

With Terpil jumping bond, and Wilson choosing to remain abroad as a fugitive, Mulcahy concluded that it was time to get out. He had accomplished very little by his four years of cooperation. So he moved to the Middle West.

There were questions that still disturbed him. ”Why didn’t the C.I.A. cooperate fully and aggressively with the United States Attorney’s office? Why didn’t the Government ask the agency for its assistance in locating and apprehending Wilson and Terpil? Why wasn’t a combined Federal task force set up to coordinate the investigation? Why wasn’t a special prosecutor used? Why did the F.B.I. give this case such low priority? Where are we going to find Qaddafi’s bombs in the future? What does it take – short of a big body count – to get the attention of the Congress and the White House to a potentially lethal situation? What is the responsibility of the United States to the world in a case like this?”

Mulcahy returned to Washington late last year ready to end his own involvement with the prosecutors. ”I had been forced to live a lie,” he says. ”I had often lived under an assumed name, with a car and a business registered in other people’s names.” By that time, Mulcahy had set up a successful construction business, specializing in historical restorations. He began research for a book on his experiences, but that did not solve what he viewed as his immediate problem: ”How to exorcise my entire involvement with the case.” What he learned in early 1981 convinced him that it was time to take a step he had not contemplated before – going to the news media. A former C.I.A. colleague – Mulcahy will not say who – told him that Wilson and Jerome Brower had conspired in late 1977 to ship 40,000 pounds of C4 plastique to Libya, the largest illegal shipment of explosives known to Federal investigators. Mulcahy later confirmed that what he had heard was true -the shipments had been made from a Texas airport in the fall of 1977, aboard a chartered DC-8 cargo jet. An employee of one of Wilson’s firms, Around World Shipping and Chartering, of Houston, Tex., was known to have been involved.

Brower and his California company had made a profit of $1 million on the C4 shipment alone, Mulcahy was told. ”What I felt was absolute horror,” Mulcahy recalls. ”I was horrified that they could have shipped explosives in that quantity, involving as many people as they did – lawyers from two different states, commercial airlines, commercial freight forwarding companies – and not have been detected. There had to be a cast of characters of more than 10 people, including pilots and the companies that sold the C4. When I learned of it, the shipment was more than three years old and the F.B.I. and the United States Attorney’s office were fully aware of it. Yet no one had been charged, or even called before a grand jury. That was the final factor in my decision to go public. The only option left to me was the press.”

In interviews a few weeks ago, prosecutors at the United States Attorney’s office declared that the case still was open and that more indictments would be issued before the end of summer, expanding the ranks of those known to have been involved in the Wilson-Terpil operations. Some former C.I.A. officials, among them Ted Shackley, are known to have been talking with the prosecutors, and apparently have been shedding new light on Wilson’s connection – or lack of connection – to the agency. Meanwhile, Frank Terpil was tried in absentia by New York City authorities on 10 conspiracy and weapons charges, found guilty and sentenced, June 8, to 17 2/3 to 53 years in prison, the maximum.

Mulcahy believes the Government is now focusing its attention on the lesser lights who flitted about the Wilson-Terpil operations. He knows that Wilson operated in Washington so freely because of his ability to reach into the top layer of Government and Congress; because of his connections in a city where connections are so important. Mulcahy also knows that Wilson and Terpil are not the only former C.I.A. and military men selling information and materiel to the highest bidder. Most important, Mulcahy believes that the United States Attorney’s office in Washington was guilty of what he calls ”Government complicity by omission” by not demanding that Federal agencies, at the very least, cut off the flow of men and terrorist equipment to Libya.

Mulcahy remains a believer: He believes in the value and importance of the C.I.A. and the due process of the American judicial system. ”The system can work,” he says, ”but it can’t work unless the people who are the system put it to work.” If he had it to do again, he says, ”I know I wouldn’t have approached any Government agencies. I would have taken every document I had to the White House or hand-delivered them to the most responsible journalist I could find. I’d never go to a Government agency again – because of the way I was treated, the lack of commitment and the half-truths that I’ve heard for the last five years.”

Edwin Wilson could not be reached for comment. Someone who answered the telephone at his office in Tripoli declined to give his name and hung up when asked to take a message.

Despite the formal disavowal by the C.I.A., Wilson remains an outsider who knows a great deal about secret American intelligence activities. Last August, four months after his indictment, he was seized by officials in Malta and held in custody for more than three days. Somehow, before he could be turned over to American authorities for extradition to Washington, he managed to flee, flying from Malta to Heathrow Airport near London on his revoked passport. Federal officials now suspect a $10,000 payoff through a laundered bank account was made in Malta on Wilson’s behalf. There are those in Washington who believe that, even today, there are some elements in the C.I.A. who protected Wilson in Malta and will continue to shield him.

Illustrations: photo of Libyan mission in U.S. photo of Theodore Shackley C.I.A. official photo of Sayad Qaddafi, Mulcahy, Wilson, Terpil in Britain photo of Frank Terpil, 1979, arrested in New York photo of Kevin Mulcahy in May 1976 photo of Edwin Wilson’s Virginia estate

Related Archive:

The Qaddafi Connection by Seymour M. Hersh (NY Times – June 14, 1981)

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