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Intrigue Trails Airline Linked to Iran, Contras

December 26, 1986|BARRY BEARAK | Times Staff Writer

MIAMI — When U.S officials wanted to ship arms to Iran, they called 305-871-5171: Southern Air Transport, the "worldwide charter specialists" with "oversized cargo capabilities" and "remote site delivery."

And when the contras in Nicaragua needed supplies ferried from Portugal to air bases in Central America, they dialed the same number.

And when Americans running guns to the contras needed mechanics to fix their dilapidated planes, they too used Southern Air.

And now, when the House and Senate intelligence committees and a federal grand jury are handing out subpoenas, they also have remembered to call on the Miami-based airline, once owned by the CIA and now caught up in virtually every thread of scandal that has tightened around the Reagan Administration.

'We Fly Anywhere'

"We fly cargo anywhere in the world, and we are ready to go at a moment's notice. . . ," said company spokesman William Kress. "We pride ourselves on confidentiality. Our customers can rely on it."

But it is now time to talk. Investigators want to know what some of that cargo was, as well as where and when it landed and who paid the tab.

Last week, Southern Air's president, William G. Langton, denied that the airline has broken any laws and promised complete cooperation in all investigations.

Candor will be essential, for the airline's part in the scandal is a tangle. Not only is the company being investigated, but even the investigations into the company are being investigated.

The Justice Department has admitted that it held back a probe of Southern Air for 10 days in late October and early November at the request of Vice Adm. John M. Poindexter, then the President's national security adviser.

Poindexter feared, a Justice Department spokesman said, that the investigation would interfere with arms shipments to Iran and the possible release of American hostages in Lebanon. The department's internal inspector is looking into the delay.

But that subplot is only a bit of the intrigue that has enveloped the airline, which flies a fleet of 25 big-bellied cargo planes and does more than half of its business with the U.S. government.

"This whole thing is frustrating as hell," Kress said of the recent attention. "I get tired of denying all the allegations that we're subsidized by the CIA. It's totally untrue.

"I don't think we have any working relationship with the CIA. Well, I know we don't. With the (National Security Council), maybe. And if the NSC, well, maybe the CIA. But not a working relationship."

Southern Air was born in Miami in 1949, a small charter operation that hauled cargo to the Bahamas. Eleven years later, it still had only three planes and plenty of debts.

In 1960, it found an eager buyer. The CIA was looking to obtain airlines that could do covert work under legitimate cover. It purchased Southern Air for $300,000 and extended the airline's operations into the Far East and Latin America.

Far-Flung Empire

In the next decade, Southern Air joined with Air America, Air Asia, Civil Air Transport and dozens of tiny puddle-jumping lines to form a far-flung empire of airlines, together known as the CIA "proprietaries."

Most of their work was the routine, above-board hauling of freight and passengers. Yet when necessary, the planes could be used to drop an agent into Red China or supply a secret army in the mountains of Laos.

"All the airlines used the same air crew seniority list," said William M. Leary, a University of Georgia history professor and author of a book about the CIA airlines. "One day a guy worked for Southern Air and the next day Air America."

The proprietaries were operated under a single holding company, the Pacific Corp. Its chief executive was the late George A. Doole Jr., a brilliant, tight-lipped man who is something of a legend in CIA ranks.

As late as 1970, when there were plenty of suspicions about CIA connections to Pacific Corp., Doole coolly told a reporter: "If someone out there is behind all this, we don't know about it."

Fleet Sold

Finally, by 1973, newspaper stories and congressional hearings revealed so much about the proprietaries that there was hardly any cover left to blow. The huge fleet was sold to private companies.

But that did not mean the CIA entirely lost touch. "A pool of individuals stayed with the airlines, so they had a lot of experience for handling sensitive missions," Leary said.

Southern Air was sold for $2.1 million--only about half its stockholder equity. According to documents filed with federal officials, one of the company's chief customers then became the government of Iran.

In 1979, the airline was sold once again, this time to James H. Bastian, a top-notch Washington, D.C., aviation attorney who had worked with Doole at the Pacific Corp. from 1961 to 1974, as secretary, vice president and general counsel.

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