16. NUGAN HAND, THE CIA, AND AUSTRALIA

An American spy story with more intrigue than James Bond's best has been unraveling in Australia since 1975 but yet has to grab the attention of our press. While the story is more complex than the proverbial can of worms, it involves:

-- CIA involvement in the overthrow of an Australian Prime Minister, Gough Whitlam, representative of the Labor Party;

-- Pine Gap, a U.S. satellite and communications base in Australia, said to be our single most important installation for monitoring the Soviet Union and Asia'; Prime Minister Whitlam was trying to shut Pine Gap down when he was ousted;

-- Nugan Hand, an American-owned merchant bank, which employed a number of former U.S. intelligence and military officers when it collapsed four years ago; the bank has been variously described as handling illicit arms deals, laundering drug traffic profits, and operating as a front for U.S. intelligence operations;

-- Frank Nugan, one of the bank's founders, was an "apparent suicide" in 1980; the other founder, Michael Hand, disappeared at the same time and hasn't resurfaced since;

-- William Colby, former director of the CIA, was an attorney for the bank briefly working on tax matters and other legal problems; his business card was found on Nugan's body;

-- convicted gun-runner Edwin Wilson, a former CIA agent who was then working with the Navy's super-secret Task Force 157, in Australia, which used shipping companies for espionage; Wilson also was linked with Nugan Hand.

The Australians recently released "Volume 4: Nugan Hand (Part II)," a report by the Commonwealth-New South Wales Joint Task Force on Drug Trafficking; it is making headlines in Australia about the CIA connection. Almost every major scandal uncovered in Australia since Frank Nugan's death has been connected in the public's mind with the Nugan Hand affair.

One thing the Australian investigators and citizens do not understand is why every U.S. intelligence and law enforcement agency they approached has steadfastly refused to cooperate in their three-year investigation into the Nugan Hand Bank.

The American public also might be interested in knowing what the CIA is doing in Australia.

SOURCES:

MACLEANS, 9/6/82, "The Scandal of Nugan Hand," by Philip Grenard; FOREIGN POLICY, Winter 1982, "Dateline Australia;" THE NATION, 3/3/84, "Australia: The Nugan Hand Investigation;" JACK ANDERSON, San Francisco Chronicle, 4/2/84, "Banking on Drug Traffic."