CIA Plane in Big Aussie-American Heroin Bust

Newly-obtained FAA registration records reveal that the American “mystery plane” busted this July with 35 kilos of heroin at an airport outside Sydney, Australia was a CIA plane. At least, it had been when it rolled off the assembly line 40 years earlier,  courtesy a CIA deal with the U.S. Forest Service. And the CIA never sells off its planes. The American-registered ‘mystery plane’ in Australia was a Merlin III twin–engine turbo-prop ( tail number N224HR). 

FAA registration records show it was commissioned in the early 70’s by the U.S. Forest Service from aircraft manufacturer Swearingen in San Antonio, part of an operation to “sheep-dip” CIA planes through the U.S. Forest Service.

“Sheep-dip” is  spook-speak for concealing the source or true ownership of something, or, at the very least, hiding it from Congress.  When the plane was ordered, the CIA was merely anticipating Congressional calls for reining in the CIA, through (tellingly) forcing the Agency to divest  its proprietary airlines.

By the time the plane was delivered two years later, the calls had grown much louder. In another two years, they’d become successful. More on this in a moment.

Hmm. A “sophisticated” drug network…

The discovery of an American-registered plane delivering drugs at an Australian airport heralded, according to Australian law enforcement, a “sophisticated drug network” that had begun using the tiny Illawarra Regional Airport, 60 miles south of Sydney, to import guns and drugs.

The purchase in the U.S. of the Merlin III, and the plane’s subsequent two-month long saga on its journey “home” to Australia, an Australian law enforcement official told Sydney’s Daily Telegraph, were actions undertaken at the behest of a “major international crime syndicate.”

Police were said to be “close-mouthed;”and “tight-lipped.” After revealing they had confiscated 35 kilos, they refused to identify the drug involved, which is heroin.

But Police prosecutor Sergeant Sean Thackray gave things away when he let slip, ‘‘We’re talking about the organization of a plane to import a large amount of a substance …. to the value of $9 million.’’

(Note: Price quotes per kilo for heroin in consuming countries vary widely, from a low of $100,000 to a high, in Australia, of all places, of $375,000.  If we take a figure in the middle, $250,000, 35 kilos is worth $8.7 million, very close to Sgt. Thackray’s quote of $9 million.)

“Really? A major international syndicate?”

With the announcement that a global cartel was moving planes like chess pieces across a chessboard the size of the Outback, hope surged (in some circles) that a few American Drug Lords might finally achieve the recognition they deserve.

The twin-engine Merlin III was picked up in Punta Gorda, at the Charlotte County Airport, which is to general aviation what the Black Hole of Calcutta is to after-school detention.

Why were two Australian pilots picking up the Merlin III in Punta Gorda, Florida? The owner of the plane was a dentist in Colombia, Missouri.

A smart cop might have figured that pressing the flesh in Punta Gorda with a few  American Drug Lords “might could” have provided folks living a little further off the beaten path some valuable networking opportunities. 

Alas, smart cops are always the first to be let go. So the first well-publicized arrest in the Big Aussie-American Heroin Bust was a 43-year old Australian sky-diving instructor, Bernhard Stevermuer, charged with being part of a criminal organization and dealing with the proceeds of crime.

When Stevermuer was arrested, police found $70,000 in cash suspected of being the proceeds of drug trafficking. Authorities said that just days earlier, while they had him under surveillance, he had tried to buy an aviation business at a local Australian airport, making a $300,000 down payment…in cash.

Even middle schoolers just selling a little weed to pay for their Little League uniform, or fresh rugby togs, or a new cricket bat know this is an absolutely boneheaded play. It was not the kind of money-laundering move one expects to see from any self-respecting drug kingpin.  So, just who—and where—are the cartel heavies?

Fire on the Mountain

Before the American public learned of the cozy deal to sheep-dip airplanes between the CIA and the Forest Service, 14 people had to burn to death in a forest fire in Colorado.

In August 1994,  14 firefighters burned to death in an out of control forest fire in Colorado. The inferno was sparked by lightning at the base of Storm King Mountain. Local firefighters, hotshots and smoke jumpers jumped in to fight it.

Winds whipped flames that grew to be 100 feet tall. The fire raged uphill, right at the firefighters. They fled. Fourteen were trapped and died.

Survivor Eric Hipke was forced to flee for his life…uphill.

“Flames crackling mere millimeters behind him, Hipke clambered up the last steep stretch of a rugged mountainside engulfed in fire. Hipke screamed and hurled himself over the ridge.Investigators concluded later that he made it with five seconds to spare.”

The Federal Occupational Safety and Health Administration subsequently cited the Forest Service for “inadequate use of aviation resources. “Air support was inadequate for implementing strategies and tactics. Where were all the tankers?”

According to whistleblower, attorney and former CIA pilot Gary Eitel, they were out of the country. Forest Service aircraft were being used, illegally, in Europe and Latin America. Many of them were running drugs.

The Australian Connection

In the late 1970s, a number of military C-130’s were flown into the U.S. from the Australian Air Force, destined for use by private American air contractors. The company that brought them over was Southern Cross, owned by Multitrade International.

Multitrade International will later surface in the story of the SkyWay DC-9 carrying 5.5 tons of cocaine.

The US Attorney in New York indicted a Venezuelan drug trafficker named Walid Makled for his role in the big drug move, and seized bank accounts of his in a Caribbean Bank accused of laundering millions of dollars of drug money for him.  Multitude International also had their bank accounts seized.

When whistleblower and former military and CIA pilot Gary Eitel learned the CIA was planning to move a number of the Australian C-130s under CIA control into the private sector and then transfer them to Bogota Colombia, he took action.

“They were to be used for drug smuggling,” said Eitel. 

Eitel described himself as a former CIA pilot when he testified before a congressional committee looking into the allegations. After military service, Eitel flew for the Forest Service, the Department of Defense, and private companies in Alaska. He is a decorated Vietnam combat pilot, and became a law enforcement officer and later an attorney in Texas.

Forest Service deception goes back to end of WWII

He told the Seattle Post-Intelligencer that the Forest Service had an arrangement with the CIA dating from the early days of the Cold War to provide cover for certain covert operations.

The first Australian C-130 delivered into private hands by the Forest Service was flown into Hemet Valley by James Patrick Ross, a CIA pilot-mechanic who came to the U.S. at the time of the Australian C-130 transfer to service Barry Seal’s C-123.

At least one of the Australian C-130’s was used in the Mena, Arkansas, CIA gun-and-drug operation.  Another, tail number N69-P, was on contract for the U.S. military’s Nuclear Defense Agency.Later the plane was busted in Miami, Florida by the DEA while on a cocaine smuggling mission.

While Eitel was researching the Forest Service transfer at the Department of Justice, he was allowed to view classified materials relevant to the investigation.

“I saw a three-ring folder full of State Department Export certificates for C-130 and P-3 aircraft allowing them to leave the U.S. for foreign destinations,” he said.

“I logged 36 of the certificates and noted that at least one Forest Service aircraft was going to Panama to a company called Trans Latin Air, and another to a company named Aero Postale de Mexico.

“And what caught my attention was the certificates were signed by an attorney named John Ford, known to me as a CIA attorney in Australia who was involved in the C-130’s transferred from Australia to Bogota.”

“I questioned DoJ about the drug links and was assured the transfers were above board and not drug related,” Eitel continued. “I accepted their explanation, but in 1996 I did a data base search on a major drug trafficker named Luis Carlos Herrera-Lizcano, who had been John Ford’s partner at the time of the original C-130 transfers out of Australia.”

“Herrera was the owner and CEO of Trans Latin Air, and in 1994 he was indicted by the U.S. Attorney in Chicago for using C-130’s to move billions of dollars of cocaine into the U.S.”

Was the CIA black-mailing Smokey the Bear?

In October of 1973, the Forest Service officially took possession of the plane, when then bore tail number N199z. Sometime later that changed to N224HR. (But the plane’s aircraft serial number, 217, always stays the same.)

But airplanes weren’t the only thing the CIA was sheep-dipping through the Forest Service at this time.

A man who was working undercover at the U.S. Forest Service for the CIA when the Merlin III turbo-prop was delivered in 1973, will 30 years later become Chairman of a company whose DC-9 is involved in the biggest bust on an airplane, an astounding 5.5 tons of cocaine, in Mexican history.

His name is Glen Kovar. He was Chairman of SkyWay Communications in St Petersburg, Florida. In a profile, a business magazine touched on his resume:

“The senior Kovar worked for five U.S. presidents under the nebulous title of “director of special projects for the U.S. Forest Service.” Pressed for a more precise job description, he said: “I did a number of special projects. Let’s just leave it at that.” 

Dropping a dime on the Forest Service

In 1976 Senator Frank Church’s Committee grilled CIA General Counsel Lawrence Houston about the Agency’s questionable and illegal operation of proprietary airlines.  Church was clear that he wanted the CIA to divest itself of what had grown into the largest airline in the world.

The CIA has never been the kind of Agency to take the heat if there’s anyone else around to throw under the bus. Lawrence Houston offered that the CIA had routinely used the U.S. Forest Service to provide cover for its covert activities. And, he said…there was more.

The U.S. Forest Service had been successfully infiltrated by CIA, confessed Houston. The CIA even shared an address with the Forest Service’s Air Research and Development unit in Alexandria, VA. He allowed that perhaps a re-think was in order. Mostly of the Forest Service.

Back then, it was open season on the CIA. Over little nit-picky things like brainwashing, or drugging American citizens without their knowledge, or assassination.

But the Agency had anticipated a move to clip its wings.  It had quickly given away its clandestinely-owned air carriers, folding them into one of its lesser-known proprietary airlines, Evergreen International. Then it very publicly freed Evergreen from its state of indentured servitude, and set it up at Marana Air Base in Arizona, which the CIA owned.

It had already sheep-dipped a new fleet of planes through the U.S. Forest Service.  One of those planes— 40 years later—has just been seized at an airport in Australia.

Something about 35 kilos of heroin.

HBSC? Did they admit to laundering drug money, again?

Even from a distance of more than 9,000 miles, it seems abundantly clear that Bernard Stevermeur may be a  walking billboard for the hideous hypocrisy that lies at the heart of the phony drug war.

He has two or three kids, with another on the way, trying to make ends meet as a skydiving instructor. Not a big upside there.

So what? Mistakes were made. Things went wrong. Somebody’s gotta go down.

While Stevermuer was traveling 10,000 miles from Australia to Punta Gorda to arrange to buy the Merlin, another pilot—with a far more impressive resume—had been with him every step of the way.

David Baddams owns Snow Goose International, a flight ferry service that shuttles planes around the world. Early on, he carefully distanced himself from the imbroglio. His contract was to deliver the plane in the Philippines. He did. Then he went home.

Baddam has a sterling resume. He was an ace Australian military pilot and Commander.  He’s a  Member of the British Empire. To anyone who recalls Britain’s glory days of drug trafficking, this is catnip. The Opium Concession, the Yankee Clippers, throwing the American cousins a bone, while rolling in what a later time will describe as “gratifying profitability.”

And who can forget Jardine-Matheson?

They’re a big bank now. Changed their name to HBSC.  The  guys who last year admitted to laundering some $700 billion of dirty money for drug cartels, then paid the biggest fine in the history of fine-paying, in order to not have to go to prison.

Questions answered, questions remain

The FAA registration documents for the Merlin III (N224HR) clear up one big question, at least. Who the hell is Oregonian Aero Club LLC,” the supposed “company” that bought the plane before it left for Australia?

It’s Bernie.Yup. Bernie Stevermuer. He signs for the Oregonian Aero Club on the FAA form. But wait, what’s this? His signature is dated March 12. Till now, its been assumed the paperwork was done in early April, when they arrived to pick up the plane.

What was the point of traveling 10,000 miles to buy a 42-year old plane? Was there something about the handling characteristics of a Merlin III that makes them such intense objects of desire?

They are pretty fast, an aviation source told me, easily able to outrun the King Air’s fielded by narcotics agencies around the world. But they’re hard to handle, and otherwise not terribly special.

So the answer is no. The two Aussie pilot’s voyage to America must have had a different purpose, so far unknown.

And remember, the DEA asserts that there are no American Drug Lords. The fact that no Americans have so far been implicated in a case which police are calling the work of an international drug cartel is typical. There are two possible explanations.

U.S. elites and the more competent among America’s criminal element have been completely frozen out of the global drug trade,  often called the biggest business on the planet,  because U.S. prison sentences are draconian, and the DEA itself is too competent to make getting into the drug business an acceptable business risk.

Or the American Drug Lords receive “special treatment.” Think about it.

What’s the point of having an Empire if you can’t keep your people from going to jail?