The Marine's Private Army

By John F. Stacks

As Oliver North rushed about hatching schemes to free American hostages and $ topple Marxist regimes, the hyperkinetic lieutenant colonel increasingly came to depend on the help of a network of private companies founded and staffed by former military and intelligence agency officers. "As his power started to grow," says Neil Livingstone, a colleague of North's and an expert on counterterrorism, "North's biggest problem was where to get people and staff of his own." Turning away from regular Government channels, North reached into the shadowy world of former spooks and oddball operatives who were pressed into service as the cause demanded.

The most prominent of Ollie's operatives was Richard Secord, the retired Air Force major general who had helped to create several private companies, including Lake Resources Inc., a Panamanian shell corporation with a Swiss bank account. Through Secord's companies, North was able to move Iranian arms money, buy planes, charter ships and perform myriad tasks that seemed beyond the abilities of the Government bureaucracies. Says Livingstone: "Ollie was in a white rage all the time over the help the CIA gave him." In a computer note to National Security Adviser John Poindexter, North wondered, "Why Dick can do something in five minutes that the CIA cannot do in two days is beyond me -- but he does."

Secord's outfit, Stanford Technologies Trading Group International, was only one of many such firms that have grown up around the Washington Beltway in the past decade, most of them staffed with veterans of the huge CIA covert operations of the Viet Nam era. Reacting both to the end of the war and to congressional investigations of covert activities, Jimmy Carter's CIA director Stansfield Turner purged nearly 800 people from the agency. Some of them turned up in the Beltway firms. "One result of the purge was that many of the former agents set up private companies that began working for the agency and the Defense Department as independent contractors," says a former high-level intelligence official.

A number of recently retired CIA and Pentagon officials, having been through the wars together in Southeast Asia, formed a kind of old-boys network. Theodore Shackley, who knew Secord in Laos and had been the CIA's station chief in Saigon, worked from 1981 to 1983 as a consultant for Secord's business partner Albert Hakim. Shackley had been a candidate to become head of covert operations before his career was sidetracked by Turner. Another former Shackley associate at the CIA, Thomas Clines, helped Secord establish logistics for North's operation to supply the Nicaraguan contras.

Shackley was also used as a conduit by Iranian Middleman Manucher Ghorbanifar in 1984, when the Iranian first proposed swapping money for the release of the American hostages in Lebanon. Shackley dutifully reported the offer to the State Department, where it languished. But from that initiative grew the arms-for-hostages deal that North ran.

But Shackley denies any wrongdoing in the Iran-contra affair. "I have had nothing to do with what Secord has chosen to call 'the enterprise,' " Shackley told TIME last week. "I have had nothing to do with North." Nonetheless, North's projects freely used private operators. Secord, for example, retained the services of American National Management Corp. to fly supplies to the contras in Nicaragua. That company was founded and run by Colonel Richard Gadd, a retired Air Force cargo-plane pilot who was a longtime associate of Secord's. Gadd had also worked for the U.S. Army Special Operations Forces, which hired him in 1983 to transport helicopter pilots to Barbados prior to the invasion of Grenada.

The Grenada invasion was the occasion for North's involvement with a particularly amateurish group of private agents. Senate investigators have learned that North used a Macy's department store maintenance engineer named Kevin Kattke in covert operations in Grenada.

Kattke, 38, a self-described anti-Communist and American patriot, had befriended a band of Grenadian exiles plotting to overthrow the leftist regime of Prime Minister Maurice Bishop. Seeking help in planning a coup, Kattke called on retired Army Colonel George Morton, an employee of the Vinnell Corp. in Washington, which for years has supplied military special training to Saudi Arabia. According to Kattke, Morton turned him over to Gadd, who was then working for Vinnell. But Kattke's coup plans were aborted when the Prime Minister was killed by his rivals in the government. When North began planning his own operation to support a possible U.S. invasion to oust Bishop's successors, he turned to Kattke's group for help.

Before the Oct. 25, 1983, invasion, North ordered Kattke to organize a public protest in New York City demanding the removal of the hard-line Marxist government in Grenada. North also asked Kattke to have his Grenadian contacts instigate riots on the island as a diversion. Kattke tried, also at North's request, to obtain the names of the 650 American students at St. George's | University School of Medicine in Grenada, which had its home offices on Long Island. The safety of the students was one of the ostensible reasons for the U.S. intervention.

Kattke has told Senate investigators that he failed in all three tasks North had given him, but he did provide useful intelligence about conditions on the island. After the invasion, North sent Kattke to Grenada as his personal emissary. When plans to use a Coast Guard boat's secure radio to contact North fell through, Kattke persuaded State Department officials on the island to send his messages to North in cipher on protected lines.

Nor is Kattke through with the world of international diplomacy. His latest project: a plan to unify factions in Iran.

With reporting by Jonathan Beaty and Jay Peterzell/Washington