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TRAIL OF THE OCTOPUS -- FROM BEIRUT TO LOCKERBIE -- INSIDE THE DIA

Chapter 11:

Pan Am was getting a bad press -- rightly so for its slovenly security at Frankfurt, but wrongly so for its attempts to establish the truth of how the bomb got aboard. While the general presumption was that its negligence had let the terrorists through, the intelligence indications were that its security arrangements -- good, bad or indifferent -- had been bypassed.

In its sympathy for the families of the victims, the public was inclined to forget that any passenger aircraft with the Stars and Stripes on its tail would have served as a target as well as another. To that extent, Pan Am, its insurance underwriters and the 16 members of the Pan Am crew were also victims of an act of war against the United States.

It would therefore have followed civilized custom if the government of the United States had sought both to relieve the burden of the disaster on all those affected by it and to pursue and punish those responsible. But for reasons of its own, Washington in the end did neither. It sought, first, to exonerate itself from any general or particular blame for the tragedy and, second, to temper the pursuit of justice, for victims and murderers alike, with considerations of political expediency.

This failure to respond appropriately not only called the government's good faith into question, opening the way to all kinds of lurid speculation about its actions and motives, but further victimized Pan Am. No matter what the deficiencies were in its security arrangements at Frankfurt, the airline and its insurers were at least entitled to prepare their best defence against a charge of wilful misconduct. But with all the relevant documents and witnesses controlled by a government determined to evade any suggestion of responsibility for what had happened, no adequate defence was possible. Pan Am was delivered to the courts hamstrung, bankrupt and ripe for dispatch as a scapegoat.

When James M. Shaughnessy came to the case, ten days after the disaster, certain agents of the government already knew how and where the bomb had been placed on Flight 103. But it was soon evident that the government was not about to share any of its information or, indeed, to cooperate with Pan Am in any meaningful way. From day one, at a political level, the purpose of the investigation was, not to uncover the facts, but to 'prove' that Pan Am was to blame for letting the terrorists through.

Left with no choice but to accept the responsibility or to pursue its own independent inquiries, the airline instructed Windels, Marx, Davies & Ives to prepare its defence and to investigate the suggestions of government complicity that were already coming to light. If Washington was determined to show that Pan Am's deficiencies were solely to blame for the bombing, Pan Am's only defence was to show that Washington was at least equally at fault.

The telephone call on 29 December 1988, between Michael F. Jones, of Pan Am Corporate Security in London, and Phillip Connelly, assistant chief investigation officer of H.M. Customs and Excise, was the first substantial lead that Shaughnessy had to work with. With the methodical professionalism of a former detective sergeant with 20 years' experience in London's Metropolitan Police, Jones had made a full note of a conversation in which Connelly asked, 'Have you considered a bag switch at Frankfurt?'

A subsequent call, also noted down in detail at the time, established that before the disaster Connelly had attended a meeting in Frankfurt between various agencies monitoring a drug-trafficking operation through the airport which involved the switching of baggage. Follow-up inquiries leading to Cyprus ran into a dead end, however, when DEA Nicosia refused to discuss the matter on grounds of national security. (Two years later, Connelly would dispute Jones's recollection of these conversations, but by then the octopus had more or less got its act together. In the immediate aftermath of the tragedy, there was no reason why Connelly should not have been helpful or why Jones should have falsified an entry in his notebook.)

In April 1989, Shaughnessy learned from a colleague that Juval Aviv, an Israeli-American investigator with a reputation for getting results, had told him that some of his contacts in the intelligence community had important information about the crash of Flight 103. After nine prominent law firms had each recommended Aviv highly, Shaughnessy hired him and his company, Interfor, Inc. to develop those leads, and Aviv took off for Europe. Although some of his referees had said he was 'extremely zealous' and needed to be kept within specific guidelines, at the time, that had struck Shaughnessy as a commendation rather than a reservation.

Two months later, Aviv submitted his now notorious report.

Not surprisingly, Shaughnessy found it 'extremely disturbing, because it suggested serious wrong-doing by the government and suggested that Pan Am employees placed the bomb on Flight 103'. Whereas the pending liability suit against the airline depended on the theory that the bomb had penetrated Pan Am's security, the Aviv report indicated that it had circumvented Pan Am's security. As this conclusion was supported to some extent by the earlier Jones-Connelly conversations and other intelligence data, Shaugnessy and his colleagues now felt obliged to put Aviv's findings to the test.

'In order to properly defend our clients,' Shaughnessy explained later, 'we decided that we should serve subpoenas on a number of Federal agencies in an effort to determine whether the government had any documentation which would either confirm or dispute what Mr. Aviv had reported.'

Because of its sensitive nature, access to the report was confined to the attorneys working on the case. At Pan Am, only the chairman and chief executive officer, Thomas G. Plaskett, the senior vice president, legal, John Lindsey, and Gregory W. Buhler, deputy general counsel, were allowed to read it, and only they were advised of Shaughnessy's decision to subpoena government records. (On first hearing of Aviv's findings, Plaskett reportedly exclaimed: 'You mean to tell me the CIA has been using Pan Am planes to run drugs? I thought I was running an airline.')

Significantly, Plaskett later told Shaughnessy 'that he had personally informed Secretary of State James Baker and Director of Central Intelligence William Webster of the contents of Mr. Aviv's report and of our intention to serve subpoenas on a number of Federal agencies'.

Whether or not this advance notice had any bearing on the government's response, when the subpoenas were served on 29 September, the FBI, the DEA, the State Department, the National Security Agency, the CIA and the National Security Council each made it clear that they had no intention of complying with them.

And whether or not this advance notice had any bearing on the leak of Aviv's confidential report to Congressman James Traficant and the media in November, the subsequent publication of its findings around the world undermined the credibility of Shaughnessy's attempt to test the report's conclusions to the point where no one seemed inclined to take it seriously.

Angry at being put at such a disadvantage, Shaughnessy twice confronted Aviv about the leak, and twice Aviv denied having had anything to do it.

In November, the government moved to quash Pan Am's subpoenas before Chief Judge Thomas C. Platt in United States District Court, Eastern District of New York. Two conferences were held in an attempt to resolve the dispute, with the court attempting to determine what privileges, if any, the government was claiming.

Based on papers submitted for review in camera, Judge Platt felt the government might have a valid claim that the subpoenaed documents were protected from discovery by the state secrets privilege, but counsel for the government seemed unwilling to accept the suggestion. Indeed, the government showed so little cause for its refusal to provide discovery that the court felt it might have to stay the civil litigation against Pan Am until the conclusion of the criminal investigation. Chief Judge Platt then directed the government to search for documents bearing on how and where the bomb was placed on Flight 103 and on warnings received by the government before the night of the disaster.

Instead of complying with this order, the government 'distilled the specific accusations' it had identified in Aviv's report and instructed each of the Federal agencies to respond to that 'distillation' with declarations that there was nothing to support it. As this severely restricted the scope of what the agencies had been directed to search for, Shaughnessy felt confirmed in his suspicions that the government had something to hide and sought to obtain depositions from the officials who had signed the declarations. At a further conference, however, on 5 April 1990, the court ruled against him because the original subpoenas, and the government's motion to quash, were still outstanding.

With both sides now hopelessly deadlocked, the court convened another conference on 27 July. After advising counsel for the government that Washington could not keep on withholding relevant evidence, Chief Judge Platt ordered the government to produce all documents relating to how and where the bomb was placed on Flight 103 for inspection in camera by 1 October 1990.

Convinced that he was getting somewhere at last in his search for admissible evidence, Shaughnessy now turned to several other lines of inquiry. After the strange indifference of the police investigators to the results of the polygraph examinations of Tuzcu and O'Neill in Frankfurt, and the even stranger attempt by the FBI to intimidate the ex-Army polygraph expert who had carried them out, Juval Aviv had played no further part in the preparation of Pan Am's defence. Already something of an embarrassment after the publicity surrounding the leak of his report, he became something of a liability when the results of the polygraph tests also leaked out to the press. Confronted yet again by Shaughnessy, Aviv yet again denied any hand in the disclosure and on 31 May 1990, resigned as Pan Am's investigator, mainly because Shaughnessy refused to take his advice.

'Here I am, leading the charge up the hill,' he was reported as saying, 'and I look back, and where are my troops? They are hiding behind bushes, waiting to see how Juval makes out.'

After the leak of the Interfor Report, counsel for the victims' families attempted to take a deposition from Aviv but Shaughnessy moved to quash the subpoena on the grounds that Aviv's work was protected from discovery by the so-called attorney work-product doctrine. In reply, the plaintiffs argued that either Pan Am or Aviv had waived that protection by knowingly leaking the report to the media, and Chief Judge Platt referred the issue to Magistrate Judge Allyne Ross for a ruling.

After hearing several witnesses, including Aviv and the Observer's reporter John Merritt, who had interviewed him in November 1989, Magistrate Judge Ross found that Aviv had divulged at least part of his report to Merritt and had thereby waived work-product protection. In her written opinion, dated 27 July 1990, Ross described Aviv's testimony as 'not credible', which most of the media took to mean that his leaked report was 'not credible'. In fact, she was referring only to his denials of having leaked the report. At no time had she addressed herself to the credibility or otherwise of anything in the report. (Curiously, although Magistrate Judge Ross ruled that plaintiffs did have the right to take a deposition from Aviv, their counsel never attempted to do so. The widespread belief that Ross had declared the Interfor Report 'not credible' was, perhaps, of greater value to their case than anything Aviv might have sworn to.)

But even before Aviv dropped out of the picture, Shaughnessy had substantially broadened the scope of his inquiries.

'As might be expected in an investigation involving international terrorism, the murder of 270 innocent people and a possible government cover-up,' he told the court, 'most of the individuals we contacted or who contacted us, demanded complete anonymity. For me to reveal the identities of those individuals would not only be a breach of confidence and trust in me but, in some cases, might jeopardize the careers of those involved or even jeopardize their safety.'

Though he offered to identify his sources to Chief Judge Platt in camera, Shaughnessy was only too well aware that the certainty he felt about Flight 103 had yet to be converted into a certainty he could prove in court. A former DIA agent, for instance, had confirmed the involvement of the U..S intelligence community in narcotics trafficking, but not for attribution. Similarly, a former CIA agent had given him a detailed, off-the-record account of the agency's involvement with arms and narcotics trafficking in the Middle East.

More dramatically, in the spring of 1990, a senior DEA intelligence analyst confirmed that most of what Aviv had said in his report about narcotics trafficking through Frankfurt airport was true.

At about the same time, Shaughnessy also commissioned a former German intelligence agent to carry out an investigation for him in Europe. When his report was submitted, it dwelt at length on the key figure of Monzer al-Kassar and his involvement with Palestinian terrorist groups, supporting Aviv's assertion of al-Kassar's connection with the bombing of Flight 103. Of even greater interest was the flat statement that the BKA, working with German intelligence, had established that the bomb had been carried to Frankfurt from Damascus via Cyprus.

Four other sources provided documents and information, mainly about warnings received before the bombing. One also supplied a report entitled 'Pan Am Flight 103', prepared in January 1989 by the intelligence unit of the Lebanese Forces, which had to do mainly with the substance of intercepted telephone calls to and from the Iranian Embassy in Beirut.

On page 10, the report stated: 'Two days after the downing of Pan Am 103, the Iranian embassy in Beirut receives a phone call from the Interior Ministry in Teheran, intercepted, during which the ambassador is told to hand over to the PFLP-GC the remaining funds, size and scope not specified, and is being congratulated for the "successful operation".'

All four informants confirmed that the United States had the Iranian Embassy in Beirut under electronic surveillance prior to the disaster. They also confirmed that an American named David Lovejoy had made a series of calls to Hussein Niknam, the Iranian charge d'affaires, about a team of American agents, led by Charles Dennis McKee and Matthew Kevin Gannon, who had arrived in Beirut on a mission concerned with the hostages.

Lovejoy's last recorded call was on 20 December 1988, when he advised Niknam that the agents had changed their travel plans and would catch Pan Am Flight 103 from London next day, 21 December. Niknam at once put in a call to the Interior Ministry in Teheran and was monitored passing on Lovejoy's information.

One of Shaughnessy's sources, with close links to Israeli intelligence, actually claimed to have heard the tapes of these telephone intercepts, and another, well-connected with the U.S. intelligence community, confirmed not only that the Iranian Embassy's calls had been monitored at that time but also the substance of the Lovejoy-Niknam conversations.

Other documents to which Shaughnessy was given access included a series of DIA Defense Intelligence Terrorism Summaries (DITSUMs) issued in the second half of 1988 warning against renewed threats of attack on U.S. interests, particularly as a consequence of the shooting down of the Iranian Airbus in July. On 1 December, just three weeks before the disaster, a DIA DITSUM stated that 'reports of surveillance, targeting and planning of actions against U.S. persons and facilities are continuous'.

All four sources also independently confirmed that on 9 December 1988, Israeli Defence Forces had captured documents in a raid on a PFLP-CC base near Damour, Lebanon, which disclosed plans to bomb a Pan Am flight out of Frankfurt by the end of that month. One of the four said that Flight 103 was specifically mentioned, and all agreed that the Israelis had immediately warned the governments of the United States and West Germany.

The consensus was overwhelming, but Shaughnessy could call none of his informants to the witness stand, even if they had been willing to testify, because almost everything they had told him -- no matter how detailed and how well corroborated by information from other independent sources -- would have been ruled out as inadmissible hearsay.

Although there was little room to doubt that the government of the United States, with the assistance of the British and German governments, was engaged in the biggest cover-up of modern times, there was no possible way Shaughnessy could prove it to a judge and jury unless the US government opened its files, and thereby virtually incriminated itself.

Everything seemed to hinge, therefore, on Chief Judge Platt's decision to order the government to produce all documents relating to the bombing of Flight 103 by 1 October 1990, for his review in camera. But in December, Shaughnessy was astonished to learn that the subpoenas he had served on seven Federal agencies (the DIA had been added to the others in March 1990) had been quashed without further hearing of argument.

The circumstances were odd, to say the least. The court's order, signed 12 December 1990, showed that, after the 27 July conference, the government had approached Chief Judge Platt privately to suggest that, rather than produce the documents he had specified, its agents should simply brief the court on certain matters connected with the bombing.

Without advising Shaughnessy of this proposal, much less inviting his opinion of it, the court had agreed to the government's suggestion and, as Shaughnessy put it later, 'was briefed on undisclosed matters on unspecified dates by unidentified agents of the government ... I still do not know [September 1992] who briefed this court, when the briefings took place or what was told to this court during those briefings.'

All he knew was that 'in the end, this court quashed the subpoenas based upon ex parte in camera briefings given to it by the government'.

Chief Judge Platt had already shown signs of distress over the government's intransigence. A year earlier, when the discovery dispute was at its height, he had been asked to comment on the documents he had seen so far.

"I am troubled about certain parts [he had said], and I don't think anything can be -- there could be a redaction, but I think what was left after the redaction would be virtually useless. And I don't know quite what to do because I think some of the material may be significant. Some of the material I haven't seen, of course, because the government hasn't even shown me all of the material. They have just given me the reasons why, which, as I see it, I am not at liberty to reveal at this stage.

But depending on what is behind that material, those reasons, if you will, there may be -- it might change this case completely (author's italics). There is a possibility. I don't say that it's a reality. There is a possibility, depending on what hypothesis you assume and I have no way of knowing which hypothesis is correct ... "

A year later, he resolved his uncertainty in favour of Washington. But Shaughnessy had lost a battle, not the war. As any claim under the Federal Tort Claims Act had to be filed within two years -- in other words, by 21 December 1990 -- he obtained leave from the court to commence a third-party action against the United States government. The thrust of this was that if the passenger liability suits went against Pan Am, the airline would seek to recover the cost of the compensation awards from the government on the grounds that the Flight 103 disaster had been due to the misconduct of government agencies.

The complaint, filed on 19 December, stated that the government had had a duty to inform Pan Am of information in its possession that a terrorist organization was planning to place a bomb on a Pan Am flight from either Frankfurt or London, specifically on Flight 103 on 21 December 1988, and had 'negligently failed to inform Pan Am'.

Secondly, the complaint charged that the government had been 'negligent in supervising and controlling an operation utilizing criminals, terrorists and terrorist sympathizers at various locations, including Frankfurt Rhein-Main airport, which circumvented all baggage security controls and which was utilized by a terrorist organization to place the bomb on Flight 103'.

Support for this theory, of an unexpected kind, had been provided a few weeks earlier by network television.

On 30 October, NBC News reported: 'Officials of the Drug Enforcement Administration told NBC News today they are conducting an inquiry of a top secret undercover heroin operation in the Middle East to find out whether the operation was used as cover by the terrorists who blew up Pan Am 103 almost two years ago.'

The report went on to say that

NBC News has learned that Pan Am flights from Frankfurt, including 103, had been used a number of times by the DEA as part of its undercover operation to fly informants and suitcases of heroin into Detroit as part of a sting operation to catch dealers in Detroit.

The undercover operation, code-named Operation Courier, was set up three years ago by the DEA in Cyprus to infiltrate Lebanese heroin groups in the Middle East and their connections in Detroit. According to law-enforcement and intelligence sources, the Pan Am baggage area in Frankfurt was a key to the operation. Informants would put suitcases on the Pan Am flights, apparently without the usual security checks, according to one airline source, through an arrangement between the DEA and German authorities.

Law-enforcement officials say the fear now is that the terrorists that blew up Pan Am 103 somehow learned about what the DEA was doing, infiltrated the undercover operation and substituted the bomb for the heroin in one of the DEA shipments.

The following evening, 31 October, Pierre Salinger of ABC News, weighed in with a story of his own:

In 1987, the US Drug Enforcement Administration Set up a dummy company called Eurame here in Nicosia, on the Mediterranean island of Cyprus. According to law-enforcement sources, it was part of Operation Corea, an undercover operation designed to track the flow of heroin. The DEA recruited undercover couriers who would be monitored as they carried the drugs from Lebanon, through Cyprus and Europe and on to drug dealers in Detroit. ABC News has confirmed that one of those couriers was a young Lebanese-American named Khalid Jafaar.

He was one of those killed aboard Pan Am 103.

The report went on: 'Operation Corea worked like this. German police would be notified that an undercover courier was arriving at Frankfurt airport. German agents would escort his baggage through all security checks, and one of them would personally place the baggage on the plane.'

Before the broadcasts, both Brian Ross of NBC News and Pierre Salinger of ABC News had contacted Gregory W. Buhler, deputy general counsel of Pan Am, to inform him that they had obtained evidence from sources within the United States government that a DEA undercover operation was involved in the crash of Flight 103.

They also told him that they had talked to Lester Knox Coleman, a former agent of the Defense Intelligence Agency in the Middle East, seeking confirmation of certain details of the story before airing their reports -- in Salinger's case, at a face-to-face meeting in London.

A couple of months earlier, Buhler had been introduced to Coleman by Marshall Lee Miller in Washington, and since then had been urging Shaughnessy to talk to Coleman because he had a great deal of interesting information concerning the crash of Flight 103.

As they were both due in London in connection with the case, and as Coleman was also there seeing Salinger, Buhler suggested that it might be a good opportunity for the three of them to get together.

Shaughnessy agreed, and on 1 November 1990, met his first -- and so far his only -- independent witness for dinner at the Hyde Park hotel.

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