Spooky Tales

The Crimes of Patriots

Jonathan Kwitny

W. W. Norton and Company; pp.

400; $19.95.

EARLY on the morning of January 27, 1980, two Austalian policemen patrolling a lonely stretch of highway came upon a parked Mercedes sedan. Approaching the car, they saw a man slumped over in the driver's seat with a rifle slug in the head, the victim of an apparent suicide. The man, a drug trafficker, arms trader and purveyor of secrets, was Francis Nugan, chairman of Nugan Hand, the widely respected international banking house.

In 1973, Nugan and Michael Hand founded the banking house in Sydney, Austrailia. By the time of Nugan's death seven years later, the concern was responsible for more than $1 billion and had opened offices in Hong Kong, the Cayman Islands, the Philippines, Hawaii, Panama, Saudi Arabia and Thailand. Customers included the United States Government, Wing On Bank, and the Bank of Austrlia-New Zealand.

When investigators looked into Nugan Hand's records, however, they discovered just $1 million in assets--and $746,000 of that sum was offset by checking account overdrafts.

How had Nugan Hand deceived so many? And more importantly, where had all the money gone?

IN THE Crimes of Patriots, Jonathan Kwitny uses an investigation by the Australian government as a point of departure for his own inquiry, which connects Nugan Hand to drug trafficking, illegal arms sales--and the Central Intelligence Agency. He presents what appeared to be the suicide of an Australian banker as a chapter in a tale of illegal activities undertaken by former and current United States intelligence personnel.

Kwitny, a Wall Street Journal reporter and author of Endless Enemies, finds the beginings of the Nugan Hand story in documents that establish the CIA's involvement with Chinese Nationist forces in the 1950s. During the war, according to official records Kwitny quotes, the CIA smuggled drugs to finance the forces of Chiang Kai-shek forces. "With the kind of people [CIA operatives] were dealing with up there, the whole economy was opium," according to John J. O'Neill, the Far East regional director of the Drug Enforcement Administration. "I have no doubt that Air America was used to transport opium."

Kwitny finds the CIA involved in impropriety across Asia. He argues that the CIA was a key player in a drug smuggling operation headed by President Diem's brother, Nhu, that poured heroin into the United States. And it was Nugan Hand that, during its solvency in the 1970s, laundered the operation's money.

Kwitny's research is formidable--so formidable, in fact that details of specific incidents tend to detract from his central purpose. While The Crimes of Patriots succeeds as an account of a series of interesting events, the events are not well enough connected to form a broad indictment of the CIA. The sometimes deadening effect of detail is evident when Kwitny recounts the questioning of Geort.

"In their attempts to follow this [the Nugan Hand investigation] up, Australian investigators questioned their star Nugan Hand witness, George Shaw, who recalled dealings within a Sydney outfit called the Loy Arms Corporation. Shaw hadn't been involved in the details. But Loy's proprietor, Kevin Joseph Loy, acknowledged he had been approached by Wilhelmus Hans on behalf of Nugan Hand. In fact, a search of Loy's records produced copies of a weapons import permit from South Africa, dated September 18, 1975, another import permit from Singapore dated November 4, and an Australian export permit dated November 10--all involving weapons, but the lists not identical."

KWITNY presents Nugan Hand as perhaps the most successful of the ventures disguised as private businesses through which the CIA pursues its ends beyond the scrutiny of the public, press or Senate. Brief autobiographies of players in Nugan Hand and other concerns show a flow of operatives between intelligence entitities and "the private sector." Lists of associates of Frank Nugan, scion of one of Australia's leading families, read like a Who's Who for the top reaches of the U.S. military. Admiral Earl Yates presided over Nugan Hand; General LeRoy Manor, former U.S. Government liason to Philippine President Macros, ran the Philippine Office; General Edwin F. Black, intimate of CIA bosses Allen Dulles and Richard Helms, ran the bank's Hawaii office.

Reviews of The Crimes of Patriots, as well as the book's own jacket, make much of its revelations about the Iran-Contra affair. But they shouldn't. As is the case with Bob Woodward's Veil, portions of this book that deal with the arms for hostages swap are somewhat afterthoughtish. After appearing on the jacket, the name Richard Secord does not come up again until page 273; Ollie North comes up at about the same point but figures even less prominently in Kwitny's narrative.

What The Crimes of Patriots does provide, however, is the disquieting realization that Oliver North and Richard Secord are merely a few of a much larger number who storm across the globe, advancing highly idiosyncratic versions of U.S. foreign policy. As Kwitny writes: "Actors come and go. It is the roles that stay, and that we need to be concerned with."