WILLIAM BILLIE C. DUNCAN
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
Q. What was your conclusion from her instructions to you?
2A. It made no sence for me not to give full and complete
3testimony to the subcommittee on Crime.
4Q. Mr. Duncan, do you get the impression that she was ordering
5you to cover up the investigation?
6A. Absolutely.
7Q. If you were asked to state that in your own words, what
8would you say?
9A. I would say that we had conducted textbook investigations
10of all the individuals at Mena, there were a variety of legal
11issues involved, which I had always had them in loop on. We
had
12 proceeded very soundly. There was nothing for us to be ashamed
13of. The investigations were thorough, to the extent that we
14could conduct the investigation without subpoenas. And I would
15have thought that the Internal Revenue Service would have
wanted
16a complete disclosure to Congress about the problems that we
17encountered, but quite the opposite was true. They obviously
18did not want any negative testimony coming from me concerning
l9the U.S. Attorney's Office.
20At one point when we were arguing about the Meese
21allegation, she told me that she had discussed my frustrations
22with the personal assistant to the Commissioner of Internal
23 Revenue, who was Larry Gibbs at the time, and the personal
24 assistant's name was Bryan Sloan. And that Bryan Sloan told
25 her, "Bill is just going to have to get the big picture."
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1Q. Now, when you say "she" and "her" you're talking
about
2Mary Ann Curtin?
3A. Yes.
4MR. ALEXANDER: Any questions?
5FURTHER EXAMINATION
6BY MR. BRYANT:
7Q. Bill, let me ask you a few questions. I want to take you
8back to your investigation at the Mena Airport. How many
9federal agencies were involved in that investigation at the
time
10 you first went there?
11 A. I was aware that U.S. Customs
Service was involved..I was
12 aware that the FBI was involved, the Drug Enforcement
13 Administration. Those were federal agencies. The Arkansas
14 State Police was involved. The Polk County Sheriffs Office
was
15 involved and also the Louisiana State Police was involved in
16 investigating a link between Louisiana and Arkansas.
17 Q. In your opinion, were those agencies actively involved in
18 the investigation of the Mena operation and specifically Barry
19 Seal at that time?
20 A. Actively involved since at least
1982.
21 Q. And when did you first go to Mena?
22 A.In May of 1983.
23 Q. And after you were involved in the
investigation, when did
24 you make your presentation to the U.S. Attorney for the grand
25 jury laundering allegation that you had prepared?
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1A. The reports, the prosecutorial reports went to Mr.
Fitzhugh
2in December of 1985.
3Q. At that particular time were all federal agencies still
4actively involved in investigating the Barry Seal matter or
had
5they--had their interest cooled, or how would you describe it?
6A. It was a very strange thing, because we were dealing with
7allegations of narcotics smuggling, massive amounts of money
8laundering. And it was my perception that the Drug Enforcement
9Administration would have been very actively involved at that
10 stage, especially along with the Arkansas State Police. But
DEA
11 was conspicuously absent during most of that time. The FBI
12 appeared on the scene intermittently. Usually when Russell and
13 I were going to conduct some credible interviews, Tom Ross,
from
14 the Hot Springs FBI Office, would suddenly appear on the
scene.
15 He would make some trips to Baton Rouge with us. U.S. Customs
16 was conspicuously absent, also. It was primarily just Russell
17 Welch and myself.
18 . Q. Regarding the allegations of drug running and weapons
19 running and any other things that you might have heard, what
20 information do you have to, number one, substantiate that
there
21 might have been drugs brought to the Mena Airport?
22 A. We were receiving information from a variety of sources
23 that Barry was doing some work for the United States
Government,
24 but that be was smuggling on the return trips for himself. We
25 knew from his modus operandi in Louisiana that he many times
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1dropped the rugs in remote areas and retrieved them with
2helicopters. He bad helicopters in the hangers at Mena and a
3variety of aircraft, smuggling type aircraft on the ground in
4Mena. And we heard, you know, all the time that he was making
5on return trips -- Terry Capeheart, a Deputy at Polk County
6Sheriff's Department, had received information from an
informant
7on the inside at Rich Mountain Aviation that drugs were
actually
8brought into Rich Mountain Aviation, and on one occasion
guarded
9with armed guards around the aircraft. He had also received
10 information from this informant that Freddie Hampton had
11 personally transported a shipment of drugs to Louisiana from
12 Rich Mountain Aviation for Barry Seal.
13 Q. What specific physical evidence did you observe at the Mena
14 Airport that would indicate to you, that in your professional
15 opinion, drugs were brought to Mena or that Mena was being
used
16 as a base for drug smuggling?
17 A. primarily I was reviewing evidence gathered by the law
18 enforcement agencies, surveillance logs, their
representations
19 to me. I was focusing on the money laundering and financial
20 analysis end of it, and did not conduct a lot of physical
21 surveillance myself. But we had a lot of intelligence reports
22 and surveillance reports of various airplanes in there being
23 refueled, leaving in the middle of the night, N numbers being
24 changed, typical modus operandi of a smuggling.
25 We also had testimony that his aircraft had been plumbed
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1with longer range tanks and bladders, that illegal cargo
doors had
2been installed in the aircraft. And there was a lot of
evidence
3of that.
4And I was seeing on some of the cashier's checks, Barry
5Seal's name on cashier's checks.
6The secretary that was -- doing both secretaries, Lucia
7Gonzalez and Kathy Corrigan, stated that when Barry would come
8in in his airplanes, the next morning many times there would be
9stacks of cash to be taken to the bank and laundered.
10Q. In connection with your investigation into the laundering
11 activities, what -- how much money was laundered in your
opinion
12 through the Mena bank?
13 A. At the time we couldn't proceed any further because of the
14 lack of subpoenas. I would have to review the records, which
15 the Internal Revenue Service has now. But it seems like there
16 was a quarter of a million dollars, $300,000, something like
17 that that we had documented, that had been laundered through
the
18 Mena banks, just the Mena banks.
19 Q. And when you say "laundered," what specifically do you
20 mean; what happened?
21 A. They were obtaining cashier's checks in amounts of $10,000
22 or less at a variety of financial institutions in Mena and
some
23 further north from Mena or sometimes different tellers in the
24 same banks to avoid preparation of the Currency Transaction
25 Report. Kathy Corrigan testified that her instructions from
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1Freddie Hampton were, that they were to do this to avoid the
2Internal Revenue Service knowing about the money and to avoid
3payment of taxes on the money.
4Q. Now, are you saying the' someone from Rich Mountain
5Aviation would appear at a local bank with $10,000 or less in
6cash, and then give that to the bank in exchange for a
cashier's
7check, was that the typical arrangement, or what was the
typical
8arrangement?
9A. They would go with, say, $9,500, or they might go with
10 $30,000, but they would break it up in increments of $10,000
or
11 less.
12 And on one occasion Freddie Hampton personally took a
13 suitcase full of money, I think it was seventy some thousand
14 dollars, into this bank officer, and the testimony of the
15 tellers revealed that the bank officer went down the teller
16 lines handing out the stacks of $10,000 bills and got the
17 cashier's checks. Those cashier's checks, in that instance,
18 went to Aero House of Houston for the building of Barry Seal's
19 hanger. This, as I recall, was November of '82.
20 Q. Do you have any doubt in your mind that Mena was used as a
21 base for drug operation. headed by Barry Seal?
22 A. Do I have any personal doubt?
23 Q. Do you have any personal doubt in your mind that that is
24 not the case -- that that was not the case?
25A. I very much believe that was the case.
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1Q. You had an occasion to interview Mr. Seal yourself, did you
2not?
3A. That's correct.
4Q. Now, when was this?
5A. This was December of '85.
6Q. Was this prior to the laundering grand jury or after?
7A. After.
8Q. After. Was there any particular reason why Barry Seal was
9not called to testify at the grand jury?
10 A. I never received an explanation from the U.S. Attorney's
11 Office as to why he was not called. Because we were given
12 assurances that he would be called to the grand jury. He was
on
13 the witness list, and I issued him a subpoena at the time I
14 interviewed him for appearance at the grand jury.
I5You've already stated you, as a law enforcement official
16 did not testify?
17 A. That's correct.
18 Q. Did any law enforcement official testify before the grand
19 jury, to your knowledge?
20 A. It's my understanding that Larry Carver with DEA testified
21 before the grand jury sometime maybe in '87 or '88. Russell
22 Welch testified before the grand jury, and also Terry
Capaheart
23 testified before the grand jury.
24 Q. And when was this?
25 A. The last--one of the last two grand jury --
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1Q. But in. 1985, when the first grand jury was convened, no
law
2enforcement official testified; is that correct?
3A. Not to my knowledge.
4Q. In your professional opinion as a law enforcement official
5with extensive experience, is that -- wouldn't it be highly
6unusual in extreme cases where law enforcement officials who
7investigated the case would not be called to testify?
8A. Every grand jury case that was ever presented where I
9conducted the investigation, I was the law enforcement officer
10 who summarized the evidence before the grand jury. I find it
11 highly unusual.
12 Q. And isn't it highly unusual that Barry Seal was not called
13 to testify in view that he was - - in view of the fact that he
14 was the principal involved in the investigation?
15 A, We found it highly unusual.
16 Q. You had an opportunity to interview Mr. Seal. Did Mr. Seal
17 make any admissions regarding drug operations that he headed?
18 A. I would have to review a copy of that transcript. he
19 basically admitted that he had been a smuggler, that he had
20 smuggled drugs. he told -- he said that he told the people at
21 Rich Mountain Aviation that they were guilty of money
laundering
22 and should be prepared to plead guilty to it. That he provided
23 instructions to them that resulted in them getting involved
in
24 money laundering. "Not to put his business on the street," I
25 think is the way he put it. And I think probably the copy of
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1his testimony could be introduced into the record. I believe
I
2have a copy of that.
3MR.. BRYANT: Could we make that Exhibit Numbers 2
4or Exhibit B to Mr. Duncan's deposition.
5(Deposition Exhibit 2 was identified. )
6Q. (BY MR. BRYANT) Bill, is there any other information that
7you are aware of that might assist whoever reads this
deposition
8to understand the case that either Congressman Alexander or I
9have not asked?
10 A. I interviewed two witnesses in Fort Smith, Arkansas, named
11 one Horton Elzea, E-L-Z-E-A, and Carl Smith. Carl Smith is an
12 architect in Fort Smith, Arkansas and Horton Elzea is a
13 draftsman, I believe. Those individuals related to me a
14 conversation they had with Assistant U.S. Attorney Steve
Snyder,
15 who was with the Fort Smith U.S. Attorney's Office. Those
16 witnesses stated that Mr. Snyder told them that they received
a
17 call from Miami telling them to shut down the Mena
18 investigations at a point in time when they were ready to
indict
19 and present information to a grand jury. Both of those
20 witnesses have stated that they would be willing to submit to
a
21 polygraph exam concerning that conversation with Mr. Snyder.
22 Q. And, in fact, Mr. Duncan, weren't those two witnesses
23 interviewed on television?
24 A. Yes., they were.
25 Q. Okay.
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1A. And they were also interviewed by the House Judiciary
2Subcommittee on Crime investigator Ralpheal Maiestri and
myself,
3also, in my capacity as a House Judiciary Subcommittee on Crime
4investigation.
5MR. BRYANT: Okay.
6MR. ALEXANDER: I've got a couple of
questions.
7RE-EXAMINATION
8BY MR. ALEXANDER:
9Q. Mr. Duncan, we've talked about -- you have testified that a
10 one Barry Seal, in your judgment, laundered money from -- that
11 was derived from the sale of drugs --
12 A. Yes.
13 Q. -- in several banks in and around Mena, Arkansas. He had
14 to get those drugs -- "he," Barry Seal, , had to get those
drugs
15 from somewhere. Do you know the source of those drugs?
16 A. The specific drugs in the Mena operation?
17 Q. Well, Barry Seal got drugs that he sold for money. Are
18 those the drugs that came to Mena from Central America?
19 A. I don't have direct evidence of that.
20 Q. Do you have any evidence as to where Barry Seal might have
21 gotten the drugs that he sold for money that was laundered at
22 Mena?
23 A. I believe that he testified that he had a history of
24 smuggling narcotics, marijuana and cocaine, from Central
25 America.
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1Q. Did Barry Seal have a connection with the so-called Mena
2operation, drug smuggling operation?
3A. The evidence that we have indicates that his entire base of
4operation moved from Baton Rouge to the Mena Airport in
5approximately 1982, late 1982.
6Q. Mr. Richard Brennecke testified earlier today that he was a
7former contract employee with the CIA, and that as a pilot he
8transported guns and munitions from Mena, Arkansas to Panama.
9And that on the same airplane returned with a cargo of drugs,
10 mostly cocaine but some marijuana, that was brought back to Mena
11 and delivered to one Hampton, Freddie Hampton, and to
12 representatives of the Gotti New York crime syndicate operation,
13 the Mafia from New York. Do you know whether or not any of
14 those drugs that were described by Mr. Brenneke went to Mr.
Seal
15 as well and were sold in the United States in exchange for the
16 money that he laundered at Mena?
17 A. I have no personal knowledge of that.
18 MR. ALEXANDER: Thank you very much.
19 FURTHER RE-EXAMINATION
20 BY MR. BRYANT:
21 Q. Even though, while you do not have personal knowledge of
22 that, Bill, would Mr. Brenneke's scenario, based on what you
23 personally know happened at Mena, be consistent?
24 A. What Mr. Brenneke has related concerning the Mena operation
25 would be consistent with testimony from a variety of
individuals
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1and additional information that we received concerning the
2method of operation at Rich Mountain Aviation. For instance,
3Kathy Corrigan related that on numerous occasions they would be
4forced to stay inside their offices because airplanes would
land
5and strange faces would be around, Central American or Mexican,
6Spanish origin folks would be around that they had not seen
7before. But on those occasions they were given instructions by
8Hampton and/or Joe Evans to stay in the office and make no
9contact with those individuals. Airplanes landing in the middle
10 of the night, hanger doors opening, the airplanes going in, then
11 leaving out before daylight, numerous, dozens and dozens of
12 accounts like that. Great secrecy surrounding the entire
13 operation at Rich Mountain Aviation.
14 Q. So if everything that Mr. Brenneke stated regarding his
15 relationship with the Mena operation were true, it would fit
16 into the overall picture as you understand the situation at
17 Mena, would it not?
18 A. Yes, It would. With respect to the training at Nella, we
19 hat numerous reports of automatic weapons fire, of people in
20 camouflage in the middle of night, low intensity landing lights
21 around the Nella Airport, twin-engine airplane traffic in and
22 about the Nella Airport. Reports as far as 30 something miles
23 away of non-American type of troops in camos moving quietly
24 through streams with automatic weapons, numerous reports like
25 that from a variety of law enforcement sources. Also, reports
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1that -- from the Arkansas Game and Fish Commission people that
2they found vast quantities of ammunition hulls secreted in
3shacks around the Nela Airport. On one occasion the Game and
4Fish officer was warned away from the Nella Airport by someone
5who purported to be an FBI agent and exhibited a badge, On and
6on and on.
7Q. Regarding the Nella Airport, have you been there
8personally?
9A. Yes, I have.
10 Q. And so there is another airport not far from the Mena
11 Airport?
12 A. Yes, there is, approximately ten miles north.
13 Q. And would there be any other reason for the Nella Airport
14 other than clandestine activities, paramilitary training, use by
15 planes to bring in drugs, illegal contraband and so forth?
16 A. Not to my knowledge. There are no hangers out there. The
17 type of reports that we had from individuals living around the
18 airport would indicate that type of an operation. Some of those
19 people said that there were frequent visits by people from Rich
20 Mountain Aviation basically asking what they were seeing and
21 hearing. There was a large expenditure of money in preparation
22 of the strip by Freddie Lee Hampton. The type of expenditure
23 that you wouldn't make just for an out-of-the-way little country
24 airport.
25 MR. BRYANT: Okay.
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1FURTHER RE-EXAMINATION
2BY MR. ALEXANDER:
3Q. Mr. Duncan, you've made some statements in the nature of
4corroborating the evidence that has been presented here today by
5Mr. Richard Brenneke that is consistent with your understanding
6of the Mena operation that has been described and discussed here
7today. Do you recall the names of other persons with whom you
8have discussed the Mena drug operation, the smuggling operation,
9that might also add some evidence in the nature of corroborating
10 what we have heard here today?
11 A. A variety of law enforcement officials --
12 Q. Can you give us their names?
13 A. Russell Welch, criminal investigator for the Arkansas State
14 Police; Terry Capeheart, former Deputy Sheriff of Polk County;
15 Al Hadoway, former Deputy Sheriff of Polk County; a variety of Arkansas
16 Game and Fish Commission personnel. I can't recall their names
17 off-hand. I can provide those names at a later date. Other
18 Polk County law enforcement officials. Mr. -- let's see, the
19 FBI agent involved primarily in the Mena investigation was Tom
20 Ross from the Hot Springs Office of FBI. He conducted several
21 interviews in and about the Nella Airport. Discussed the Mena
22 operations with Larry Carver, Drug Enforcement Administration.
23 Several Louisiana State police investigators, including Bob
24 Thommason, Jack Crittenden. Discussed the operation with Brad
25 Myers, Assistant U.S. Attorney in Baton Rouge. Al Winters,
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1Strike Force Attorney at the time for the United States.
2Government. There are others, I just can't recall their names
3right now.
4Q. Mr. Duncan, would you attempt to provide us with the
5locations of some of these persons that you have mentioned?
6A. Yes, I will.
7Q. And together with any additional names that come to mind of
8persons with whom you have discussed the Mena drug smuggling
9operation, that would be very helpful?
10 A. Yes, I will.
11 MR. ALEXANDER: Thank you, very much.
12 FURTHER RE-EXAMINATION
13 BY WINSTON BRYANT:
14 Q. Mr. Duncan, do you have copies of statements under oath of
15 individuals who had some contact with the Mena situation, other
16 than Barry Seal that we've already talked about and whose
17 statement will be made an exhibit to this deposition?
18 A. Yes, I do.
19 Q. Do you recall which individuals you may have statements
20 from?
21 A.When I was functioning in the capacity of congressional
22 investigator for the Subcommittee on Crime, I visited on numerous
23 occasions with State Police Investigator Russell Welch. I
24 obtained copies from the Arkansas State Police files of a number
25 of statements including Kathy Gann, I believe Jim Nugent. I
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1have copies of the Arkansas state police thesis concerning Mr.
2Welch's investigation, and a variety of other statements that
3I'll be glad to make available.
4Q. I would like those to be part of your testimony, and they
5may be sufficiently extensive enough that we would want to make
6just a supplement to your testimony and include them in a bound
7volume, might be the best way to do that.
8A. Okay.
9Q. But if you would, just make those available to the court
10 reporter.
11 Mr. Alexander: that's all I have.
12 Mr. Bryant: that' all.
13 (WHEREUPON, at 1:00 p.m., the taking of the
14 above-entitled deposition was concluded.)
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