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THE ORAL DEPOSITION OF WILLIAM C. DUNCAN, a witness produced at the request of the Attorney General's Office, taken in the above styled and numbered cause on the 21st day of June, 1991, before Jeff Bennett, C.C.R., Certificate ~19, of BUSHMAN COURT REPORTING, INC., Notary Public in and for White County, Arkansas at the Office of the Attorney General, 323 Center Street, Little Rock, Arkansas at 11:40 p.m.

the witness hereinbefore named, having been previously cautioned and sworn, or affirmed, to tell the truth, the whole truth, and nothing but the truth testified as follows:

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1 EXAMINATION

2 BY MR. ALEXANDER:

3 Q. Would you state your name, age, and address, please?

4 A. William C. Duncan, age forty-four, 513 Pine Bluff Street,

5 Malvern, Arkansas.

6 Q. Mr. Duncan, briefly would you tell us your educational

7 background, for the benefit of those who might read your

8 testimony?

9 A. I graduated from the University of Arkansas at

10 Fayetteville, December 1983, BS/BA marketing.

11 Q. And what was your first- job that you received after having

12 graduated from college?

13 A. Special agent with the U.S. Treasury Department,

14 Intelligence Division.

15 Q. Did you receive any special training with the Treasury

16 Department?

17 A. Yes, I did. A variety of Criminal Investigation Division

18 training and Internal Revenue Service training.

19 Q. You were a criminal investigator for the U.S. Treasury

20 Department?

21 A. Yes, perpetually from December of '73 through June 16,

22 1989.

23 Q. And as a criminal investigator for the Treasury Department,

24 did you have occasion to investigate matters surrounding

25 activities in Mena, Arkansas?




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1 A. Yes, I did.

2 Q. And were you assigned to Arkansas for that purpose?

3 A. I was already stationed in Arkansas at the Fayetteville,

4 Arkansas post of duty when I became involved in those

5 investigations

6 Q. Would you describe the nature of your instructions and the

7 manner in which you carried out those instructions as they

8 relate to activities surrounding the Mena Airport matter?

9 A. I was assigned to investigate allegations of money

10 laundering in connection with the Barry Seal organization, which

11 was based at the Mena, Arkansas airport.

12 Q. And can you -- how long a duration were you involved in

13 this investigation?

14 A. I received the first information about Mena and illegal

15 activities at the Mena Airport in April of 1983, in a meeting in

16 the U.S. Attorney's Office, Fort Smith, Arkansas. Asa

17 Hutchinson was the U.S. Attorney then. Also present at that

18 meeting was Drug Enforcement Administration Agent Jim Stepp,

19 S-T-E-P-P.

20 Q. Did you discover what you believed to be money laundering?

21 A. Yes, I did.

22 Q. Who was the object of your investigation, and what

23 institution?

24 A. Rich Mountain Aviation, Incorporated based at the Mena

25 Airport. Barry Seal was not actually a target. We had targeted




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1 the employees and cohorts of his which operated out of the Mena

2 Airport, including Freddie Lee Hampton, Joe Evans, Rudy Dale

3 Furr, and there was a banker that was also involved in

4 allegations of the money laundering, his name was Gary Gardner,

5 vice-President at Union Bank of Mena

6 Q. Now, all these persons that you mentioned, were they

7 residents in and around Mena, Arkansas?

8 A. Yes, they were.

9 Q. What did you do with the evidence of money laundering that

10 you gathered from your investigation?

11 A. Presented it to the United States Attorney's Office,

12 Western Judicial District, Fort Smith, Arkansas.

13 Q. And what were your recommendations to the U.S. Attorney?

14 A. That those individuals and corporation -- the corporation

15 be prosecuted for violations of the money laundering statutes,

16 also there were some perjury recommendations and some conspiracy

17 recommendations.

18 Q. Did you present to the U. S. Attorney a list of prospective

19 witnesses to be called?

20 A. Yes, I did.

21 Q. For a grand jury?

22 A. Yes.

23 Q. And do you have the names of those witnesses?

24 A. There were a variety of witnesses. There were some 20

25 witnesses. He called three witnesses. The witnesses including




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1 -- included the law enforcement personnel who had participated

2 in the investigations, Barry Seal, members of his organization,

3 people who were involved in the money laundering, and various

4 financial institution officers who had knowledge.

5 Q. Mr. Duncan, the money laundering to which you refer, did

6 that arise out of an alleged drug trafficking operation managed

7 from the Mena, Arkansas airport?

8 A. It did.

9 Q. And it has been alleged that the Central Intelligence

10 Agency had some role in that operation. Is that the same

11 operation that you investigated?

12 A. Yes.

13 Q. And when you submitted the witnesses, the names of the

14 prospective witnesses to the U. S. Attorney in Arkansas, are you

15 referring to Mr. -- what was the name of the U. S. Attorney?

16 A. Asa Hutchinson.

17 Q. Asa Hutchinson. And what was his reaction to your

18 recommendations?

19 A. It had been my experience, from my history of working with

20 Mr. Hutchinson, that all I had to do is ask for subpoenas for

21 any witness and he would provide the subpoenas and subpoena them

22 to a grand jury. His reaction in this case was to subpoena only

23 three of the 20 to the grand jury.

24 Q. Now, of the three witnesses, who were -- what was the

25 nature of the evidence that would have been elicited from those




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1 witnesses?

2 A. Direct evidence in the money laundering.

3 Q. And did those witnesses testify for the grand jury?

4 A. yes, they did.

5 Q. Were you present at the time of the grand jury?

6 A. No, I was not.

7 Q. You were not?

8 A. I was in the witness room, but I was not in the grand jury.

9 Q. I see. What was the result of the testimony given by the

10 three witnesses to the grand jury?

11 A. As two of the witnesses exited, one was a secretary who had

12 received instructions from Hampton, Evans, and I think on some

13 occasions had discussed with Barry Seal, the methodology. She

14 was furious when she exited the grand jury, was very upset,

15 indicated to me that she had not been allowed to furnish her

16evidence to the grand jury.

17 Q. Which witness was this?

18 A. Kathy Corrigan Gann.

19 Q. Kathy Corrigan Gann. Do you know her address?

20 A. She is in Mena, Arkansas.

21 Q. Mena, Arkansas. Now, she was a witness?

22 A. She was the secretary for Rich Mountain Aviation, who

23 participated in the money laundering operation upon the

24 instructions of Hampton, Evans.

25 Q. You talked to her about her evidence given to the grand




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1 jury?

2 A. Yes. I had taken two sworn statements, recorded sworn

3 statements prior to the grand jury, and those transcripts were

4 furnished to the U. S. Attorney.

5 Q. And what did she say about the evidence that she was

6 allowed to give the grand jury as it might have been different

7 from the evidence that you wanted her to give to the grand jury?

8 A. She basically said that "she was allowed to give her name,

9 address, position, and not much else.

10 Q. Mr. Duncan, are you saying that the prospective witness was

11 not permitted in your judgment to give evidence of the money

12 laundering to the grand jury?

13 A. That's what this witmess told me.

14 Q. And there were two other witnesses, I believe you made

15 reference to, did you talk with them?

16 A.I talked to another one, his name was Jim Nugent, who was a

17 Vice-president at Union Bank of Mena, who had conducted a search

18 of their records and provided a significant amount of evidence

19 relating to the money laundering transactions. He was also

20 furious that he was not allowed to provide the evidence that he

21 wanted to provide to the grand jury.

22 Q. And was there a third witness?

23 A. There was a third witness, I don't recall her name

24 off-hand. She was an officer at one of the financial

25 institutions in Mena, and she did not complain to me.




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1 Q. She did not complain?

2 A. No.

3 Q. What was the result of the grand jury inquiry into the

4 money laundering investigation which you had conducted?

5 A. There were never any money laundering indictments.

6 Q. There was no indictment?

7 A. No.

8 Q. Did you have occasion to talk to any of the jurors that

9 were impaneled on the grand jury that heard the evidence?

10 A. At a later date, I came in contact with the deputy foreman

11 of the grand jury, who had previously given testimony to an

12 investigator for the House Judiciary Subcommittee on Crime,

13 concerning her frustrations as the deputy foreman of the grand

14 jury.

15 Q. Do you remember her name?

16 A. P. J. Pitts.

17 Q. Do you know her address?

18 A. She's in Mena. I don't have her current address.

19 Q. And could you relate to us any other conversation you might

20 have had with her concerning her appearance before the grand

21 jury?

22 A. Well, she was perpetually involved in the grand jury as it

23 heard evidence concerning the Barry Seal matter, and she related

24 to me the frustrations of herself and the entire grand jury

25 because they were not allowed to hear of money laundering




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1 evidence.

2 Q. Do you recall any statements that she made to you

3 concerning that grand jury, her service on the grand jury?

4 A. .She stated to me that they specifically asked to hear the

5 money laundering evidence, specifically asked that I be

6subpoenaed, and they were not allowed to have me subpoenaed.

7 Q. What was her reaction to the unavailability of you as a

8 witness?

9 A. She said the whole grand jury was frustrated. She

10 indicated that Mr. Fitzhugh, who at that time was the U. S.

11 Attorney, explained to them that I was in Washington at the time

12 and unavailable as a witness, which was not the truth.

13 Q. Mr. Duncan, are you saying that the grand jury that was

14 impaneled to hear your investigation, hear evidence of the

15 investigation that you had conducted for the U.S. Treasury as a

16 special investigator, was compromised?

17 A. The evidence was never presented to the grand jury. The

18 evidence gathered during that investigation was never presented

19 to the grand jury.

20 Q. What was your reaction to the failure of the grand jury to

21 receive the evidence?

22 A. Well, I was frustrated for a long period of time because I

23 expected to be called and expected to summarize the evidence

24 over several years there that we gathered with respect to the

25 money laundering to the grand jury.

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1 Q. There were no indictments?

2 A. Never any indictments.

3 Q. There were no prosecutions?

4 A. None.

5 Q. In effect, the evidence that you gathered has not been

6 acted on by the U. S. Attorney's Office?

7 A. Not to my knowledge.

8 Q. Did you complain to your superior?

9 A. Yes.

10 Q. What was his name?

11 A. Paul Whitmore, Chief of Criminal Investigation. I also

12 complained to my group managers, Tim Lee, Charles Huckaby and

13 Max Gray.

14 Q. And what did they -- what was their response?

15 A. They were very frustrated, also. Mr. Whitmore, in fact,

16 made several trips to Fort Smith, Arkansas to complain to the

17 U. S. Attorney's Office.

18 Q. Did he relate to you the conversation he had had with the

19 U. S. Attorney?

20 A. On several occasions, and also related to me that the U.S.

21 Attorney wrote him a letter telling him not to come to his

22 office anymore complaining, that that was unprofessional

23 behavior.

24 Q. What was the conclusion of Mr. Whitmore concerning your

25 investigation and the manner in which it was handled by the U. S.




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1 Attorney in Arkansas?

2 A. That there was a coverup.

3 Q. Are you saying -- do you agree with his-with Mr.

4 Whitmore's conclusion?

5 A. Absolutely.

6 Q. Are you stating now under oath that you believe that the

7 investigation in and around the Mena Airport of money laundering

8 was covered up by the U. S. Attorney in Arkansas?

9 A. It was covered up,

10 Q. Would you state that succinctly for the record in your own

11 words, so that we might -- to have the benefit of how you would

12 state your opinion and conclusions as a result of your

13 activities as a special investigator -- as to this

14 investigation?

15 A. I was involved from April of 1933, really to this date, in

16 gathering information, gathering evidence, until 1987-1988. I,

17 on a perpetual basis, furnished all the evidence, all the

18 information to the U. S. Attorney's Office. In January of 1986,

19 a Special Assistant U.S. Attorney from Miami, I believe, who was

20 a money laundering specialist, came to Fort Smith, met with then

21 U. S. Attorney Fitzhugh and myself and drafted a series of

22 indictments. I think there were 29 indictments, charging the

23 aforementioned individuals and Barry Seal, as I recall, as an

24 unindicted co-conspirator in the money laundering scheme. At

25 that point in time I had every indication that the cases would




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1 go to the Grand Jury, that the evidence would be presented to a

2 grand jury. We experienced a variety of frustrations, mid '85

3 on, not able to obtain subpoenas for witnesses we felt were

4 necessary. I had some direct interference by Mr. Fitzhugh in

5 the investigative process. Specifically he would call me and

6 interrupt interviews, tell me not to interview people that he

7 had previously told me were necessary to be interviewed.

8 Q. Did you have any interferences or interruptions from anyone

9 within the U. S. Treasury Department that would interfere with

10 your investigation?

11 A. They interfered with my testimony before the House

12 Judiciary Subcommittee on Crime.

13 Q. Would you tell us about that?

14 A. In late December of 1987, I was contacted by Chief Counsel

15 for the House Judiciary Subcommittee on Crime, Hayden Gregory,

16 who told me that they were looking into the reason why no one

17 was indicted in connection with the Mena investigations. The

18 Internal Revenue service assigned to me disclosure litigation

19 attorneys, which gave me instructions which would have caused me

20 to withhold information from Congress during my testimony and to

21 also perjure myself.

22 Q. And how did you respond to the Treasury Department?

23 A. Well, I exhibited to them that I was going to tell the

24 truth in my testimony. And the perjury, subornation of perjury

25 resulted in an -- resulted because of an allegation that I had




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1 received, that Attorney General Edwin Meese received a several

2 hundred thousand dollar bribe from Barry Seal directly. And

3 they told me to tell the Subcommitte on Crime that I had no

4 information about that.

5 Q. What is this about Meese? Where did you get that

6 information?

7 A. I received that from Russell Welch, the State Police

8investigator.

9 Q. Mr. Welch will be deposed subsequently by -- in this --

10 during this line of questioning.

11 Mr. Duncan, did your experience at the Mena -- in the Mena

12 case interfere with your employment with the Department of

13 Treasury?

14 A. Yes, it did.

15 Q. Could you tell us what happened, how it affected it?

16 A. I received a subpoena, in July or August of 1983 from

17 Deputy Prosecutor Chuck Black from Mt. Ida, who was going to

18 present evidence that Mr. Fitzbugh and Mr. Hutchinson had not

19 presented to the grand jury for the purposes of seeking

20 indictments against the individuals at Mena. The Internal

21 Revenue Service Regional Office told me just to have him send a

22 subpoena, and that I would be allowed to testify or assist him

23 in his investigation. About the same time, I believe, that you

24 were making inquiries also attempting to interview me. The

25 Internal Revenue Service told me I would have to go back and




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1 deal with the same disclosure litigation attorneys who attempted

2 to get me to withhold information from Congress and perjure

3 myself, and I refused to do that. At the time my

4 responsibilities were -- as Special Operations Coordinator for

5 the Southeast Region, my responsibilities included oversight for

6 aviation activities for the Criminal Investigation Division also

7 undercover and technical operations. They withdrew support for

8 the operations and basically kept me in the regional office in

9 Atlanta and did not allow me to fulfill my responsibilities.

10 This ultimately resulted in my resignation in June of 1989.

11 Q. Did you resign by forwarding any particular communication

12 to the Treasury Department; did you write them a letter?

13 A. Yes, I submitted a formal resignaton.

14 Q. Do you have a copy of that letter?

15 A. Yes, I do.

16 Q. Do you have it with you?

17 A. No, I do not.

18 Q. Would you make that part of this record?

19 A. I'd be glad to.

20 Q. Okay. We would ask that Mr. Duncan's letter of resignation

21 be submitted as a supplement to this record as Exhibit 1.

22 (Deposition Exhibit 1 was identified. )

23 MR. ALEXANDER: Let's go off the record a minute.

24(Off-the-record. )

25 Q. (BY MR. ALEXANDER) Mr. Duncan, prior to your resignation




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1 from the Department of Treasury, do you recall any other

2 conversations you may have had with your superiors concerning

3 the investigation of Mena?

4 A. With respect to what?

5 Q. With respect to the manner in which the case was attempting


6 to be covered up?

7 A. We had continuing discussions because none of us, my

8 managers nor myself, had ever experienced anything remotely akin

9 to this type of interference. I had a very good working

10 relationship with all the Assistant United States Attorneys and

11 the U.S. Attorney's Office, Western Judicial District, never any

12 problems. The office was open to me, and I visited with them

13 everytime I was in Fort Smith. And we couldn't understand why

14 there was this different attitude. I had found Asa Hutchinson

15 to be a very aggressive U.S. Attorney in connection with my

16 cases, then all of a sudden, with respect to Mena, it was just

17 like the information was going in but nothing was happening over

18 a long period of time. Mr. Hutchinson did not directly

19 interfere as did Mr. Fitzhugh. But just like with the 20

20 witnesses and the complaint, I didn't know what to make of

21 that. Alarms were going off. And as soon as Mr. Fitzhugh got

22 involved, he was more aggressive in not allowing the subpoenas

23 and in interfering in the investigative process. He was

24 reluctant to have the State Police around, even though they were

25 an integral part of the investigation.




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1 For instance, when the money laundering specialist was up

2 from Miami, Mr. Fitzhugh left Mr. Welch in the hall all day

3 until late in the afternoon and refused to allow him to come in.

4 We were astonished that we couldn't get subpoenas. We were

5 astonished that Barry Seal was never brought to the grand jury,

6 because be was on the subpoena list for a long time. And there

7 were just a lot of investigative developments that made no sense

8 to us.

9 One of the most revealing things, I suppose, was that we

10 had discussed specifically with Asa Hutchinson the rumors about

11 National Security involvement in the Mena operations. And Mr.

12 Hutchinson told me personally that he had checked with a variety

13 of law enforcement agencies and people In Miami, and that Barry

14 Seal would be prosecuted for any crimes in Arkansas. So we were

15 comfortable that there was not going to be National Security

16 interference.

17 Q. Did you discuss the Mena investigation with anyone in

18 Washington?

19 A. I discussed the Mena investigation with people in the

20 national office.

21 Q. And with whom did you discuss it?

22 A. With Joe Pagani, who was the Deputy Assistant Commissioner

23 for Criminal Investigation, with a variety of other of his

24 staff. Now, this was at the point of interference by the

25 disclosure litigation attorneys.




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1 Q. Anyone else in the, say, the Commissioner's Office that you

2 discussed this with?

3 A. Peter Filpi.

4 Q. Peter Filpi?

5 A. Who was Mary Ann Curtin's supervisor.

6 Q. Now, did you discuss it with Mary Ann Curtin?

7 A. She was the briefing attorney. She was the one that I was

8-- was supposed to be involved in preventing disclosure of tax .

9 return information and grand jury information.

10 Q. Can you think of anyone else that you talked with up in

11 Washington? Did you receive any orders from any of the

12 higher-ups in Washington concerning this investigation?

13 A. None.

14 Q. Did you ever talk to a Mary Ann Curtin?

15 A. Yes, I did.

16 Q. What was her job?

17 A. She was the disclosure litigation attorney in Washington

18 assigned to counsel me, provide legal advice with respect to my

19 testimony before the House Judiciary Subcommittee on Crime.

20 Q. What was her advice to you?

21 A. Told me not to offer any opinions, even if specifically

22 asked for my opinion by the Subcommitte on Crime. Told me not

23 to volunteer any information. Basically did not want me saying

24 anything that would reflect badly on the U.S. Attorney's Office

25 in the Western Judicial District of Arkansas.




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