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THE ORAL DEPOSITION OF RUSSELL FRANKLIN WELCH, a witness produced at the request of the Attorney General’s Office, taken in the above-styled and numbered cause on the 21st day of June, 1991, before Jeff Bennett, C. C. R., Certificate #19, of BUSHMAN COURT REPORTING, INC., Notary Public in and for White County, Arkansas at the Office of the Attorney General, 323 Center Street, Little Rock, Arkansas at 2:30 p. m.

* * * * * * * * * *

RUSSELL FRANKLIN WELCH, 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 EXAMINATION
2 BY MR. BRYANT:
3 Q. For the record, will you state your full name, please?
4 A. Russell Franklin Welch.
5 Q. And, Russell, where do you reside?
6 A. In Mena, Arkansas.
7 Q. And how old are you?
8 A. I’m forty-three.
9 Q. Would You briefly give us your educational background?
10 A. I’m a high school graduate, a college graduate. Was a
11 teacher in junior college prior to coming to Arkansas, at which
12 time I joined the Arkansas State Police and have been in the
13 Arkansas State Police for sixteen years now. And approximately
14 eight years of that have been spent in — approximately ten
15 years of that have been spent in the Criminal Investigation
16 Division.
17 Q. Okay. Where did you go to high school?
18 A. Filmore County High School in Crescent City, California.
19 Q. And what college did you graduate from?
20 A. San Francisco State.
21 Q. Did you have a degree in —
22 A. English literature.
23 Q. English literature. Then you taught for approximately how
24 many years?
25 A. Approximately two years.
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1 Q. And so you’ve been with the Arkansas State Police for
2 sixteen years?
3 A. Yes.
4 Q. Of which ten you’ve been an investigator?
5 A. Yes.
6 Q. Criminal investigator. And where have you been stationed
7 as a State Policeman?
8 A. I’ve been stationed in Foreman, Arkansas in Little River
9 County; Magnolia, Arkansas in Columbia County; and Mena,
10 Arkansas in Polk County.
11 Q. How long have you been in Mena, Polk County?
12 A. About twelve years.
13 Q. Russell, I want to direct your attention to Barry Seal and
14 the drug smuggling operations at the Mena Airport. Prior to
15 your testimony, Richard Brenneke has testified as well as Bill
16 Duncan. Do you know both of those individuals?
17 A. I know Bill Duncan well. I met Mr. Brenneke for the first
18 time a few minutes ago.
19 Q. I see. So you know Mr. Duncan well. How long have you
20 known Bill Duncan?
21 A. I’ve known Bill Duncan since about the middle of 1985.
22 Q. Russell, could you tell us in your own words just what
23 happened in Mena, and specifically at Rich Mountain Aviation,
24 beginning in the early 1980’s, relating to Barry Seal and the
25 drug smuggling operations that allegedly went on there?

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1 A. I was aware of Rich Mountain Aviation as a business at the
2 Mena Airport. I don’t know exactly when the business started.
3 I became aware of possible illegal activity at this particular
4 location in — sometime in 1984 when Jimmy Jacobs, Chief Deputy
5 for Sheriff Al Hadoway, who was the Sheriff of Polk County at
6 that time, came to me and told me that his boss, Sheriff Al
7 Hadoway, was involved in a criminal investigation of a cocaine
8 smuggler at the Mena Airport involving Rich Mountain Aviation,
9 and Freddie Hampton, and Joe Evans specifically at Rich Mountain
10 Aviation. He knew that the investigation involved somebody in
11 Louisiana. And that Sheriff Al Hadoway, working with an
12 auxiliary deputy and friend of his, Terry Capeheart, were
13 this investigation, communicating with some law
14 enforcement agency in Louisiana. He gave me this information to
15 let me know that the Sheriff was investigating this and wasn’t
16 using the Arkansas State Police. That he was going directly to
17 federal authorities, which didn’t concern me. I had plenty to
18 do. This went on for some time.
19 And then, a few weeks or months later, I don’t remember
20 exactly, my immediate supervisor, Lieutenant Finus Duvall,
21 approached me and asked me why Sheriff Al Hadoway was not
22 involving me in an investigation that he had heard about that
23 involved Louisiana authorities. And I explained to him that the
24 Sheriff apparently, according to the deputy, felt that the
25 investigation was — would be more expedient if he went directly

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1 to those authorities. At some point later Sheriff Hadoway came
2 to me and stated that he had gone to these authorities because
3 he felt that it should be kept — the investigation should be
4 kept secret, and that it was really beyond the scope of the
5 Arkansas State Police to investigate. Which satisfied
6 everybody, and we allowed him to continue whatever it was he was
7 doing. He never confided in me any part of the investigation.
8 And having had experience with narcotics and covert
9 investigations before, I didn’t want to know anything. You
10 know, the less I knew about it, the better I felt.
11 At some point in late 1984, an individual by the name of
12 Rudy Furr began calling me, who’s a person that I had known off
13 and on for years around Mena. He was a, I believe, business
14 manager of Rich Mountain Aviation. At that time Rich Mountain
15 Aviation was into — he had run for Sheriff, and was having
16 problems with Sheriff Al Hadoway after the election was over.
17 They were having personal problems. And he’s — in my opinion,
18 was a kind of paranoid type of person, and everytime be thought
19 the Sheriff was following him or something spooked him, be would
20 come to me and just tell me for whatever reason. And they had
21 gotten into a lawsuit over some involvement with the FBI over a
22 plane that had been left there as a result of a sting operation,
23 which I had nothing to do with. And I was afraid that they were
24 trying to make a witness out of me, by everytime they thought
25 they’d come up with some evidence, tell me, knowing that I would

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1 make a note of it, and later on get called into court to say,
2 yes, they made this information available to me at that time.
3 So around February 20, 1985, a person unknown to me before
4 that time by the name of Emile Camp, crashed an airplane near
5 Mena and was killed. I received a call first from Rudy Furr and
6 later, I think, from Freddie Hampton I don’t remember the
7 exact order on that. But they were both concerned that this had
8 been a murder, because Barry Seal was going to court — was in
9 court at that time in Miami, Florida on a — testifying for the
10 government in an operation that he had helped them to perform .
11 They felt like this — that the plane crash of Emile Camp was
12 somehow an assassination to expedite that trial, either for
13 Barry Seal or for the defense in the trial, stating that Emile
14 Camp — that with out Emile Camp, Barry Seal was the only person
15 who could testify as to what was going on at that particular
16 time.
17 Shortly after this I contacted my immediate supervisor and
18 — who was Finus Duvall, and told him that I wanted a
19 clarification of what our role in all this was, because there
20 was an $11,000,000 lawsuit and it involved a– a lot of tempers
21 were flaring. We had one death with a lot of allegations being
22 made about that. And I wanted my job and my position in all of
23 that defined. Lieutenant Duvall and I traveled to Little Rock,
24 met with Colonel Tommy Goodwin, Director of the Arkansas State
25 Police, explained the situation to him the best we understood it

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1 at that time. And he advised us to open an investigation to
2 find out what’s going on. And as well as I can briefly put it,
3 that’s how I became involved in the Rich Mountain Aviation
4 investigation.
5 From that time we found ourselves going through several
6 weeks and months of actually digging into other people’s
7 investigations cannibalizing, if you would, other people’s
8 investigation, to come up with — just to find out where we
9 stood,
10 There was a lot of — I’m just going to go over it
11 generally, and then we can go into specifics if you want. There
12 were a lot of allegations on the part of Freddie Hampton, Rudy
13 Furr, that they were involved in CIA activity, these are their
14 words, and they were involved in Defense Department activity.
15 But they had, in fact, not been smuggling as had been alleged by
16 Sheriff Hadoway.
17 When we began, I thought that that might well be the case,
18 not knowing anymore. As we were able to focus through other
19 people’s investigations more and more, we were able to find out
20 that Barry Seal was in fact working for a government agency,
21 specifically the DEA and the CIA was alleged, and that was way
22 beyond our ability to comprehend or learn anything about, so we
23 just put that in parentheses. But in the process of finding
24 this out, we were able to find out that he began working for the
25 government after he had been busted at least twice and a third

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1 investigation still going on. In cop talk, “he rolled over.”
2 He became an informant to keep himself out of prison as much as
3 possible and to get whatever consideration he could for it.
4 It’s very common in law enforcement, a very common tactic to
5 use, and a profitable tactic most of the time for law
6 enforcement.
7 So we looked at the period before he rolled over. We were
8 able to find out that Barry Seal came to Arkansas in 1981,
9 shortly after intense investigative pressure had been placed on
10 him in Louisiana. And that his operation continued and still at
11 this time in 1985, when we learned this, was still pretty much
12 intact. We were able to determine that after he moved to
13 Arkansas in 1981, that his system of operation at the airport
14 intensified, more planes, more people. But, yet, we still
15 didn’t have a handle on, and led that up to a point in, I
16 believe, March 24, 1984. At which time, once we discovered that
17 date ourselves, we were able to get a confirmation that -from
18 the Drug Enforcement Administration, I believe, that he did in
19 fact work as an informant for them in covert activities, and
20 that the, had granted him immunity from anything on — from
21 March 24th on in the future, but nothing before that. So we
22 focused our attention entirely an a date April — or maybe
23 November — no, April of 1982 through March of 1984 or Christmas
24 maybe even, just so we would have a margin. We tried to focus
25 attention strictly on Barry Seal’s smuggling activities, not

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1 Barry Seal. We didn’t want to get involved in any immunity that
2 he might have. we concentrated strictly on Rich Mountain
3 Aviation and the employees who were knowledgeably performing
4 tasks necessary for Barry Seal’s drug smuggling method. And
5 during that process when anything came up that looked like it
6 might have been involved in his current activity at that time in
7 1985, we ignored it. We kept it out of our file. We didn’t
8 want to contaminate our case file with anything that he did
9 after the period of time that he rolled over and became a DEA
10 informant. So we had a very focused investigation for a lengthy
11 period of time.
12 Q. In your investigation, Russell, what specific evidence did
13 you find that would indicate to you as a professional law
14 enforcement officer that drugs were indeed brought into Mena?
15 A. We had a difficult problem actually showing that drugs came
16 into Mena. We learned that Barry Seal’s method of operation,
17 from people who had been involved with it and from Barry Seal
18 himself at that time, he was telling committees in Congress and
19 newspapers exactly what his method of operation was, which was
20 to go to Columbia in a plane that has an altered fuel system,
21 bladder tanks to carry extra fuel, it would fly to Columbia,
22 load up with cocaine and come back to this country, get over the
23 mainland, drop his cocaine in a duffel bag to a previously
24 undisclosed area that nobody knew, give the Loran coordinates to
25 a ground crew in a helicopter, who would go pick up the cocaine.

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1 The helicopter was essential to a great deal — a great part of
2 what he was.doing.
3 We know that the planes that he was using, we know they
4 were the same planes because of the information that we were
5 getting from Louisiana, were parked at the Mena.Airport at Rich
6 Mountain Aviation. We knew those planes approximately every
7 week or two would leave, be gone a day or two, would come back.
8 We knew that those planes had bladder tanks in them. We knew
9 that those planes had blankets covering their — over the
10 instrument panels in the cockpit to keep strangers from looking
11 in there and seeing the sophisticated equipment that was in the
12 cockpit, radios and Lorans and things that I don’t know a whole
13 lot about. But I was told that they were — had pretty specific
14 uses. And we know that — we had an informant who at that time
15 gave us at least some information that could be corroborated.
16 Unfortunately, the informant later became hostile. But at that
17 time the informant made statements to either Sheriff Al Hadoway
18 or Terry Capeheart that there was in fact cocaine at the
19 airport. We couldn’t confirm that, so — by “the airport,” I
20 mean Rich Mountain Aviation. We couldn’t confirm that, so that
21 didn’t become a major contributor to our investigation. But
22 most important in that aspect was that we know that Barry Seal’s
23 helicopters, two of them, were at Rich Mountain Aviation for a
24 period of time. But they had a rolling plank for lack of a
25 better word, that the helicopters would land on, they’d be

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1 rolled into the hanger. And the only thing that Barry Seal
2 needed those helicopters for was to pick up drugs after the drop
3 from the plane itself. We know that — and we knew that Joe
4 Evans helped Barry Seal license a flatbed truck with a large
5 fuel tank on the back of it in a fictitious business name. And
6 we know that this truck was used to purchase fuel, large
7 quantities of fuel at different areas surrounding Mena, also in
8 a fictitious business name, using fictitious tail numbers. This
9 led us to believe that possibly cocaine had been brought into
10 the area. But we never were able to establish that ourselves.
11 And never felt like it was necessary to — for his operation to
12 bring it to the area. What he had was a safe place for his
13 airplanes.
14 Q. How many planes did he hare there, Russell?
15 According to the information we have, he had four planes
16 that — at one time, and there were two Cessna and two Senicas,
17 I think that’s right, then there was two Panther Navahoes and
18 two, I believe it’s Senicas.
19 Q. So the physical evidence that you know about and observed
20 indicated that there was a large drug smuggling operation that
21 was using Mena as a — for those operations; is that correct?
22 A. Oh, yes. All the evidence that we gathered indicated that
23 that was exactly what was happening, and we found nothing to
24 indicate otherwise.
25 Q. Do you have any evidence, whether it’s hearsay or whether

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1 it’s real evidence, as to where the drugs went from Mena?
2 A. No. At that — during our investigation we were not able
3 to determine that at all,
4 Q. Are you familiar with the small airport that was cut in the
5 woods north of Mena?
6 A. I was aware of that airport before I ever became involved
7 in the investigation. And as we began our investigation and the
8 time period around that airport being built, it was built almost
9 contemporaneous with Barry Seal’s appearance in Arkansas, and it
10 was built by Freddie Hampton on his property it appeared. And
11 we new that Freddie Hampton was a — was broke, didn’t have a
12 pot to piss in. He was in bad shape, about to go under. And
13 then, by the time we got into it, of course, was a couple of
14 years after this, two or three years later, the airport never
15 appeared to play a factor in our investigation. We assumed for
16a long time that he had probably built this airport to play —
17 I’m talking about the Nella Airport, just a landing strip. The
18 assumption was that he built this to use in his drug smuggling
19 operation, But then got busted and rolled over, because it
20 never seemed to be used. It was a mystery, it just never fit
21 in. And I –as a result, I never went to the Nella Airport. I
22 have not been there to this day. But we kept getting reports of
23 airplane activity in the area that continued on, and continued
24 to be a mystery.
25 Q. Mr. Duncan testified previously, and he stated that there

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1 were civilian reports that indicated there was paramilitary
2 training in the Nella area, and that there were a number of
3 reports communicated by civilians that indicated they had seen
4 foreign nationals of Spanish descent, had seen people in
5 fatigues, fully armed, had seen a number of such sightings that
6 indicated there was paramilitary activity or paramilitary
7 training in that area. Did you bear any such reports?
8 A. Yes. There was a period of time, and I can’t remember the
9 exact dates, I want to say it was in the area of 1985 or ’86, it
10 was right around the time that we had — that Trooper Lewis
11 Bryant was killed at DeQueen, and I can’t remember to be the exact
12 dates on that, and prior to the siege of the CSA camp up in–
13 near Harrison, we were having a lot of paramilitary, Ku Klux
14 Klan type, paramilitary training by civilians. There was a lot
15 of that going on, that type activity, and it seemed to be
16 everywhere. And we had become interested in the State Police
17 trying to figure out what was going on, because we were getting
18 just deluged with it. Gordon Kahl was believed to have been in
19 the area, and found out he had been in the area. He lived in
20 Mena under an alias for a year. And we felt like it was just a
21 good area for that type of thinking, that type of activity, and
22 we knew that we had the type of people. So when we would hear
23 about military training in a certain area, it didn’t surprise
24 us. We thought we just had some more would-be mercenaries
25 training in an area. And we did get reports in that area,

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1 reports of machine gun fire. One deer was found riddled with
2 machine gun bullets. One silhouette target made out of steel,
3 if I remember right, it was approximately 3/4 of an inch thick,
4 regular silhouette target shaped, was found completely riddled
5 with large caliber bullets. I can’t remember if any of them
6 went through it or not, but they went — they were close to
7 going through it. They were found by Sheriff James Carmack, and
8 recovered by him in Montgomery County adjacent to Polk County.
9 where these silhouette target was found, we had reports of night
10 fire using tracers.
11About the time the trooper died, a woman called from
12 Minnesota, I believe, she was delivering a Winnebago trailer or
13 motor homes. She was driving through the area of Highway 71,
14 where you would turn off to go to the Nella community, about 2
15 o’clock one morning when she saw some suspicious activity, and
16 she thought it may have concerned the murder of the trooper, and
17 so she notified us. She described driving south on 71 in that
18 area when she described a pickup along side the road with long
19 boxes stacked about cab high in the back of the pickup. A man
20 wearing just farm clothes standing by the pickup or sitting in
21 it. When she drove by, the pickup turned its headlights on and
22 pulled in behind her. She drove a little further down the road.
23 And she was describing landmarks to help me understand about
24 where she was. She saw another pickup similar with long boxes
25 in the back of it piled high. This pickup pulled in behind the

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1 pickup behind her, and they continued south on 71. A little
2 further she saw a third pickup, and this pickup also had boxes
3 piled in the back, and one of the boxes didn’t have a lid on it,
4 and she said there were long guns in the box. She didn’t know
5 what kind of guns they were, couldn’t tell anything about it. I
6 believe this driver was out of the pickup and the other two were
7 in. After they drove by, he got in his pickup and fell in
8 behind the others and followed her to a point, based on her
9 description, would be just about where you’d turn off to go to
10 Nella road, she said, then the headlights disappeared. She
11 doesn’t know if they turned off the road or what they did. We had
12 received word of a — what sounded like .50 caliber machine gun
13 fire between Nella community and the Oklahoma state line. We
14 received a report from a dispatcher at the Mt. Ida Sheriff’s
15 Office, and I’m talking all in this same time period, that while
16 standing in front of the Sheriff’s Office in Mt. Ida he saw a
17 C-130 fly over. Which there are a lot of C-130’s that fly over
18 that area, they do apparently navigation training over the
19 Ouachita Mountains in that area. This C-130 flying over a strip
20 of — or an area of U. S. Forest Service land or National Park
21 land, I’m not sure which, took a sharp lean to the right and a
22 large box fell out of the airplane. No parachute, it just fell
23 straight out. He couldn’t describe how large the box was, but
24 he said it had to be very large because the plane was quite a
25 distance from him and he could see it falling, it came out the

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1 side door. We received reports of — one very credible report
2 near Oden, Arkansas given to Sheriff Carmack of a — said it
3 looked like a — possibly a platoon of camouflaged men crossing,
4 I believe it was the Ouachita River at that point, as if they
5 were on a mission. And this is an area that, by a local
6 resident, that said people that looked military, they had guns,
7 just didn’t fit in. We received reports of C-130’s, or at least
8 one C-130, maybe two, reports of flying the canyons around the
9 Ouachita Mountains in that area. And there are probably more.
10 This is the type of reports we were receiving.
11 Q. Do You know whether or not Barry Seal flew C-130’s?
12 A. I don’t know if he flew C-130’s. I knew he flew C-123’s
13 and, I believe, 707’s.
14 Q. You started investigating the situation in 1985. Do you
15 recall an instance in 1985 when the then U. S. Attorney Asa
16 Hutchinson convened a grand jury for money laundering at Mena,
17 do you recall that?
18 A. Concerning Rich Mountain Aviation?
19Q. Well, concerning — yes, money laundering in Mena —
20 A. Is this the Investigation that Bill Duncan was —
21 Q. Yes.
22 A. Yes
23 Q. Did you assist in any way with that investigation, Russell?
24 A. Shortly prior to that I had spoken to Steve Snyder with
25 FBI Agent Tom Ross over a sandwich in Fort Smith while we were

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1 preparing for court on a totally unrelated local drug offense,
2 at which time Agent Tom Ross and myself were amusing ourselves
3 with camouflaged C-130’s sitting at the Mena Airport. Steve
4 Snyder, an excellent prosecutor, overheard the conversation, he
5 was sitting right there with us, asked that we bring the
6 case file in, he wanted to see this. He said he didn’t know
7 what was going on, but he said, “We’re not going to have it
8 going on in western Arkansas.”
9 Sometime, it wasn’t long after that, probably within the
10 next month or so, that I had met Bill Duncan, and Bill Duncan
11 notified me that we were to meet with Asa Hutchinson in Fort
12 Smith to begin a grand jury investigation concerning a smuggling
13 activity and money laundering activity. And when I got to Fort
14 Smith at the arranged time, I actually went up the elevator with
15 Steve Snyder and was-carrying on like it was his meeting,
16 because I assumed that it was because he had said something to
17 me already. And we got to the top of the elevator, and he
18 walked off in the other direction, and I asked him where he was
19 going, were we having the meeting down there, and he said, “What
20 meetings?” I said, “Well, we’re having a meeting on the 123 and
21 the activity around it that we talked about before,” and he
22 said, “I don’t know anything about it,” and was, appeared to me,
23 slightly upset that it was going on without — that he wasn’t
24 involved. I never did get a chance to talk with him about that.
25 But we went into the meeting with Asa Hutchinson, and Asa was

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1 very up-tempo, asked what we knew about the events at that time,
2 which was precious little, embarrassingly little, and asked for
3 a witness list, and we were going to convene a grand jury. And
4 my part in it was — I knew less than Bill Duncan did about his.
5 Bill Duncan was going to pursue the money laundering
6 investigation, and I was going to pursue the other activities.
7 So that, with the explanation, I was — taken a very much
8 lesser role in Bill’s investigation.
9 Q. Were you subpoenaed for the grand jury in the fall of 1985
10 A. No. I’ve never been subpoenaed for grand jury in this
11 case.
12 Q. You were not asked to testify regarding the money
13 laundering in any shape, form or fashion before a grand jury; is
14 that correct?
15 A. No.
16Q. Did you have — what was your experience, Russell, with the
17 federal authorities relating to the — to their cooperation with
18 you in your investigation of the Mena situation?
19 A. It was a — it took me a long the to completely digest
20 what was happening to me. But it was a very disappointing,
21 humiliating experience.
22 Q. How do you mean — what do you mean?
23 A. When I went into this, I had never been involved in a
24 federal grand jury investigation, didn’t know what it meant. I
25 had some of my cases handled in Federal Court, but they were

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1 cases that had already been investigated. Most of them, we’d
2 let a federal agent come in and help us with them, then we’d go
3 to Federal Court. And they’d get them a case, and we’d — you
4 know, it was just an easy way to handle it.
5 This time, as I got involved in this investigation with
6 Bill Duncan, I was kind of following his lead a little bit. It
7 started out very well. Asa Hutchinson was very up-tempo and
8 things were good. And I knew Asa Hutchinson’s reputation was
9 top-notch before that.
10 I remember when he came in as U. S. Attorney, everybody was
11 really relieved in western Arkansas because we had had some
12 uneventful prosecutions prior to that apparently. And he did a
13 good job. He had a lot of prosecutions. Well liked.
14 My first uncomfortable experience was at the first grand
15 jury session concerning money laundering where two witnesses,
16 Jim Nugent and Kathy Corrigan, testified, and I was up there
17 just for moral support more than anything else, and to see what
18 was going on . And after they came out of the — out of their
19 session with the grand jury, each individually expressed concern
20 to Bill Duncan that they were disappointed, that they hadn’t
21 been asked the proper questions. They didn’t like what happened
22 to them in the grand jury room. And that concerned me a little
23 at the time. But Bill Duncan, I remember him telling them not
24 to worry, that Asa Hutchinson knows what he’s doing, and that
25 there’s a reason for what — the way he’s handling this. And
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1 they tentatively accepted that. That was my first concern. But
2 based on what Bill told them, I felt a little better about the
3 situation. And I don’t know what happened at the grand jury,
4 when they said they didn’t feel like they were asked the
5 questions that they had been led to believe were the pertinent
6 ones for their testimony.
7Shortly after that — I believe that’s the last session I
8 can remember that Asa Hutchinson held with the grand jury
9 concerning this investigation. Shortly after that, I learned
10 that he was quitting his position and was going to run for some
11 political office, and that Mike Fitzhugh would be taking over
12 United States Attorney. My contact with the United States
13 Attorney’s Office for the most part ended at that time.
14 There were a lot of frustration in that — in the lack of
15 communication. We were so busy, it wasn’t really noticeable at
16 first. By “we,” I mean myself and Bill Duncan, and myself and
17 the people in my department going — traveling to New Orleans,
18 or to Baton Rouge, to Texas, gathering information. We were
19 busy trying to find out what had happened and gather a case file
20 and see if there was something to investigate. And as the more
21 we went, the more we found out, just a little here and a little
22 there, and we slowly started building a case and saw at some
23 point that, yes, there is something here that needs to be
24 investigated. We have got cocaine smuggling that is not a
25 covert operation by somebody who feels that we don’t need to

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1 know. Which we wouldn’t have trouble with that, with somebody
2 who carried on a covert operation and not telling us, because
3 you just can’t be too safe.
4 By the time we decided that we did have an investigation,
5 that we did have a case, that we could focus on it, we could
6 show where a crime had been committed, we didn’t seem to be able
7 to get our evidence into grand jury. And I can’t really
8 pinpoint a place where it started, except that there were — I
9 remember a meeting of Mike Fitzhugh and a woman from the U.S.
10 Attorney’s Office in Miami concerning money laundering. She was
11 to be out here to instruct Mike Fitzhugh how to handle the money
12 laundering case. And Bill Duncan had asked me to be up there,
13 and my supervisor, Lieutenant Finus Duvall, came up, and it
14 seems like there was somebody else, but I can’t remember. And
15 we sat in a little office down the hall from Mike Fitzhugh’s
16 office all day thinking that we were going to be needed in his
17 office. And finally — and Bill Duncan would come in every once
18 in a while frustrated saying that — telling us that he didn’t
19 know what was going on, didn’t know what was wrong, but Mike
20 Fitzhugh didn’t want us in there. And at one point late in the
21 day somehow, however it happened, I don’t know whether it was
22 Bill Duncan or Mike Fitzhugh or whatever happened, but we were
23 allowed to come in and give the status for our investigation at
24 that time, present it to this lady. And she seemed obviously
25 interested. She was — she thought that that was — that needed

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1 to be pursued. She said, “This case needs to be pursued.” And
2 that — and I don’t remember if she made the statement at that
3 time or later, we were told that — out of her office, that they
4 had two other Assistant U.S. Attorneys that would like to come
5 out and help him prosecute the case. We did have a case
6 developing at that time for cocaine smuggling. There was some
7 concern over the way we were treated prior to the presentation
8 we gave her. Never heard from her again.
9 I don’t think it was too long after that, that I was
10 attending a grand jury session in Fayetteville where I knew that
11 the Rich Mountain Aviation case would be coming up. I had not
12 received a subpoena, but I had permission to go up and spend the
13 night in Fort smith on behalf of the Arkansas State Police,
14 Colonel Goodwin was very supportive in the investigation, and if
15 it hadn’t been for him I’d probably quit a long time before
16 things did finally come to an end.
17Q. And what do you mean by that, just because of your
18 frustrations?
19 A. Just from the frustrations, I — it wasn’t going anywhere.
20 I wasn’t getting support. I wasn’t getting subpoenas.
21 Q. Yeah, that was my question. What do you mean you weren’t
22 getting support; you weren’t allowed to issue subpoenas or what?
23 A. Right. Asa Hutchinson had originally asked for subpoenas,
24 and I didn’t know who to subpoena at the time, or I would have
25 given him a list. When I finally did get — find out who needed

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1 subpoenas. I requested the subpoenas by either calling Mike
2 Fitzhugh directly or sending word through Bill Duncan, and was
3 denied the subpoenas. At that time the denial was based on, I
4 believe it was the Graham Rudman Act was in the air at that
5 time, and he said he just didn’t have the money to subpoena
6 people for this case.
7 Q. Did you ever get those subpoenas issued?
8 A. Towards the end, you know, there eventually was something
9 take place in grand jury. Subpoenas were issued. When I —
10 when some of the key people were in grand jury, I never got a
11 subpoena. I wasn’t asked to show up. And I felt like I was
12 probably the most knowledgeable person or able to give the most
13 help as to what those individuals should be saying, what they
14 said in interviews, what their history is concerning Barry Seal.
15 I didn’t feel like anybody else that was there at the time would
16 have known the questions to ask them. When I finally did get a
17 chance to testify in front of a grand jury myself, it was
18 because one lady on the grand jury was from Mena, worked at Mena
19 Airport, and she saw me hanging out in the hall outside the
20 grand jury room in Fayetteville, Arkansas, and told the others
21 that if they wanted to know something about the Mena Airport
22 they ought to ask that guy out there in the hall. At which time
23 Mike Fitzhugh, somewhat angrily, told me that the grand jury
24 wanted to talk to me. At that time, I didn’t know, I thought it
25 was Mike Fitzhugh that was wanting me to come in, and later

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1 found out that it wasn’t. I was still optimistic that we had an
2 investigation going on. And I told him that I could at the
3 time, the best I could. And after that grand jury hearing that
4 I testified in, Mike Fitzhugh asked me into the judge’s chambers
5 next to the grand jury room in Fayetteville, and asked me if I
6 could accept a — two misdemeanor counts on the — concerning
7 the allegations being made against Rich Mountain Aviation. He
8 didn’t mention any names. He just said would I accept two
9 misdemeanor counts on individuals and maybe something on the
10 corporate. But I told him that I couldn’t, but I didn’t care
11 what he did, and I wouldn’t hold him accountable or criticize or
12 talk behind his back or anything concerning what he did, because
13 he was the U.S. Attorney and I was just an investigator, and
14 that’s the way I felt about it. I said, “personally, I can’t
15 accept two misdemeanor counts because the way I interpret the
16 case it demands more than that.” And then he said, “Well, will
17 you accept one misdemeanor count and one felony?” And I asked
18 if were talking about conspiracy to smuggle drugs, and he
19 said yes. And I said, “No, I can’t do that.” Just knowing the
20 characters that we’re talking about, Joe Evans and Freddie
21 Hampton, I was up front with him, I said, “Give Joe Evans the
22 felony count because he’s always been an outlaw anyway and he
23 doesn’t care one way or the other, and give the Freddie the
24 misdemeanor.” But I said, “The case just merits more than that.
25 There’s more than that to it.” And I reiterated that I can’t

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1 accept it, but if you want to do it, go ahead. You don’t need
2 my blessing. And he — we spent a long time in that room, and a
3 good part of it was spent with him walking back and forth
4 looking out the window not saying anything. It was a — it was
5 a very strained period of time that wee were in that office
6 together. And that was all there was to that.
7 Q. So actually no one was ever indicted, were they?
8 A. No.
9 Q. And how would you describe the cooperation of other federal
10 agencies?
11 A. Mixed. The Drug Enforcement Administration in Florida,
12 absolutely zero. They’re just as useless to us as tits on a
13 boar hog. We had no use for them at all. I mean, they had
14 just from what they gave us, there were almost to the point of
15 rudeness. We did not get anything out of them. I went to an
16 agent conference in Savannah, Georgia during that time period,
17 which this group, Group 6 or Group 7, whatever it is, did not
18 show up. But there were other Customs agents there and other
19 DEA groups represented, and they were all pretty open that they
20 were surprised that this group from Miami DEA didn’t show up.
21 They stated that they were unable to get any use out of them as
22 far as sharing information or working cases. It was just a
23 problem for everybody. And we all rationalized that they had a
24 major problem there, and probably don’t have time to mess with
25 us. The amount of drugs that we would get excited about, they

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1 wouldn’t even go into court with. Rationalized to keep things
2 going smooth.
3 The two DEA officers in Baton Rouge were very helpful, Mike
4 Long and another one, I can’t remember his name, They had been
5 investigating Barry Seal for some time, and they were extremely
6 helpful and gave us information for a while that we would never
7 have got from any other source. And they gave us a witness who
8 was in — at that time was in a safehouse or was being kept in
9 an isolated area because he was about to or had testified
10 against Barry Seal, and they gave us this witness. Which just
11 amazed us. And they gave us a couple of others, a guy named
12 LeBlanc and some others that we had no idea how to get ahold of.
13 The DEA in Arkansas, they were pleasant, easy to get along, but
14 they had no interest in the Barry Seal case at all.
15 As we observed Barry Seal fly into Mena one cold December
16 night, a young pilot by the name of Earl, Billy Earl, I
17 believe. WE had the airport under surveillance. We had
18 received word that either a smuggling operation was going to be
19 consummated there, or was — something was about to happen
20 concerning Barry Seal. And this was from the operation Coin
21 Roll investigation out of the task force in New Orleans. We set
22 up, we had the FBI, DEA, State Police, and probably about any
23 other investigative agency you can think of, we were all out
24 there in force. I think Arkansas Game and Fish was represented.
25 And the plane did come in. And we observed what later was

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1 described as changing of a bladder tank. It was snowing that
2 night. and the DEA wasn’t on the airport. They never pulled a
3 surveillance mission. One of the FBI agents commented to me
4 that his partner had stated to him later on, he said, “This is
5 the last time I go on surveillance for an air smuggling mission
6 that the DEA stays in the motel while the rest of us are out in
7 the snow,” and he said, “that’s got to be a clue.” so we didn’t
8 get a lot of support from the Arkansas Drug Enforcement
9 Administration.
10 And from other areas it was mixed. We dealt with a lot of
11 agents and agencies who were burned out on investigating Barry
12 Seal, because it had ended in — all of their efforts had just
13 ended in futility and frustration, sometimes lawsuits. And when
14 they felt like they had cases, things just fell out from under
15 them, and they just wouldn’t investigate him and didn’t want to
16 hear about it, and certainly didn’t want to hear about him from
17 us.
18 One Customs agent told me that, after I was trying to get
19 some help from him, he said “look, we’ve been told not to touch
20anything that has Barry Seal’s name on it, just to let it go.”
21 And he said, “That’s fine. We’ve got plenty of other work to
22 do.” I could go on and on.
23 Q. So basically would it be a fair summary to say that in your
24 professional opinion Barry Seal moved his entire drug smuggling
25 operation to Mena, Arkansas in the early 1980’s and operated

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1 there for how long, until his death?
2 A. Oh, yeah.
3 Q. Until 1986?
4 A. Yeah, past 1984 there was obvious government involvement
5 with him.
6 Q. And although you never physically seized any cocaine, in
7 your professional opinion there were shipments of cocaine that
8 came into Mena Airport and/or Mr. Seal had brought those
9 shipments — or had brought cocaine in from Columbia and let
10 them out in isolated areas to be picked up with his helicopters
11 which were based at Mena at various times?
12 A. We’ve got reason to believe that that’s exactly what
13 happened.
14 Q. And based on reports to you, there was at least some
15 evidence of paramilitary operations or trainings in the Mena
16 vicinity, at least during some of the time?
17 A. Yes, there definitely was.
18 Q. This, in my opinion, Mr. Welch, is essentially the same
19 testimony that Bill Duncan has given, and it is essentially the
20 testimony that Richard Brenneke has given, except that he’s gone
21 further in some areas. And I don’t think you’ll be able to
22 testify to this from your own knowledge, but I want to ask you
23 if it might be consistent with what you’ve seen at the Mena
24 Airport. Mr. Brenneke, if I can paraphrase his testimony, has
25 testified that he, himself, flew shipments of cocaine into the

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1 Mena Airport and that, according to his personal knowledge, some
2 of those cocaine shipments were delivered to representatives of
3 organized crime in this country. In your opinion as a
4 professional law enforcement officer, could this have happened
5 at the Mena Airport?
6 A. Absolutely. I would want to add that since I have ended my
7 investigation of cocaine smuggling and have been listening to
8 the allegations of training, military training having taken
9 place at the Nella Airport, whether that took place or not I
10 don’t know. I can say that that does have explanative value to
11 otherwise unexplained events that took place during the time
12 period.
13 Lester Campbell, who was a friend of mine and was a
14 supervisor of the Game and Fish Officers in that area,
15 enforcement officers, was chased off from the Nella Airport area
16 by, I believe he described them as camouflaged subjects who
17 rudely told him to leave. There were reports of the Game and
18 Fish officers who were told the same thing. And during that
19 time period we were getting reports of air traffic at the Nella
20 Airport. And it was during that same time that I was testifying
21 at a murder trial in Waldron, Arkansas, which is the county seat
22 for Scott County where Nella Airport is located. An FBI agent
23 from Fort smith — the Fort Smith Office asked me to visit with
24 him in the Sheriff’s Office at the Waldron, Scott County
25 Courthouse, and asked me to tell him everything I knew about the

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1 Nella Airport. I proceeded to do that. One of our
2 investigators, Don Taylor, who is now Chief of Police at Fort
3 Smith, was in there and I thought that they were investigating
4 the allegations that I had been hearing concerning Game and Fish
5 officers being rudely evicted from the area and the air traffic
6 in the area. And the Sheriff at that time had also got these
7 same reports. Several months later, I asked Don Taylor — or
8 weeks, I asked Don Taylor how that investigation was going, and
9 he told me that he wasn’t involved in any investigation. He was
10 just there on something else, and just happened to be in the
11 room with this FBI agent when I came in. That he had no idea
12 what I was talking about. Nothing ever developed from that.
13 MR. BRYANT: Okay. Let’s go off the record.
14 (Off-the-record.)
15 Q. BY MR. BRYANT) So following up on your answer that drugs
16 could have been delivered to representatives of organized crime
17 at the Mena Airport. Is there any other reasonable explanation
18 as to what would have happened to drugs that were brought into
19 Mena?
20 A. We were never able to come up with any explanation
21 whatsoever as to what happened to the drugs. We just knew that
22 definitely a lot of cocaine was coming into the country. And
23 where it went, we had no idea.
24 Q. And it’s almost inconceivable to think that that amount of
25 cocaine was used locally or in the general area of Mena,

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1 Arkansas?
2 A. Oh, definitely. We’re talking one to two trips a week, or
3 two weeks, however it varied, with 250 to 350 pounds of cocaine
4 each trip. I’ve got no idea how that much cocaine would be
5 disseminated.
6 Q. And, in fact, Mr. Welch, you interviewed Barry Seal
7 himself, did you not?
8 A. Yes.
9 Q. And did he not admit that he brought in billions of dollars
10 of cocaine and drugs into this country over about an eight to
11 ten year period of time?
12 A. Yes, he did.
13 Q. And –
14 A. And stated that during the year 1983, the center of his
15 operation was the Mena Airport.
16 Q. So it’s even likely that organized crime or some type of
17 entity would have been the recipient of such large amounts of
18 cocaine, would it not?
19 A. I’ve never even known of a dealer who could handle that
20 quantity.
21 Q. Then, in your opinion as a professional law enforcement
22 officer, you would not think it unreasonable for Barry Seal to
23 bring drugs into Mena and sell those drugs to organized crime?
24 A. No. Whether it’s true or not, it has a lot of explanative
25 value to me. And I don’t know who else would take the drugs.

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1 Q. Okay.
2 A. It would take tremendous organization to disseminate that
3 amount.
4 Q. Now, let’s go back to the case that you were working up
5 that never resulted in any indictments whatsoever. Did the U.S.
6 Attorney, Mr. Fitzhugh, ever tell you that a federal judge
7 wouldn’t allow these cases to be presented?
8 A. The meeting that I had with him at the first grand jury
9 session that I had testified before in Fayetteville, during that
10 meeting, when we were discussing possible misdemeanor charges,
11 he told me that we might get an indictment, and we probably
12 could get an indictment, but a federal judge would never let it
13 get to court, and we would be wasting our time.
14 Q. Who is Matt Fleming?
15 A. Matt Fleming was an Assistant U.S. Attorney.
16 Q. In the Fort smith Office?
17 A. In the Fort Smith Office.
18 Q. Did he ever tell you that you had enough evidence for a
19 conspiracy case against the individuals at Mena?
20 A. During one of our meetings that I and others were present
21 at, Matt Fleming and Mike Fitzhugh discussed in our presence the
22 charges that they might want to pursue to the grand jury. Mike
23 Fitzhugh said that he thought we had a good conspiracy case,
24 that he was going to try to get an indictment on during the next
25 session. But he reviewed and discussed with us the merits of

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1 aiding and abetting a case as opposed to conspiracy, and thought
2 that — and asked us if we would approve that. He said it’s —
3 the penalty is just the same, very similar, and that it would be
4 easier to handle in court. And in that session, I believe one
5 other, Matt Fleming told him that he thought the conspiracy case
6 would be — you could go with. And that, I believe, Larry
7 Carver with the DEA was at — in one of those sessions with us,
8 also.
9 Q. Did the deputy foreman of the grand jury ever express
10 concerns to you about a coverup or not being able to get the
11 evidence they needed?
12 A. Yes.
13 Q. And who was that?
14 A. That was P.J. Pitts, Patty Pitts.
15 Q. And basically what did she tell you?
16 A. She was — had expressed concern that they weren’t being
17 allowed to investigate the Mena Airport. That Mike Fitzhugh
18 wasn’t giving them the evidence that they needed to have, and
19 wasn’t giving them the witnesses they needed to have. She felt
20 like that they were being hindered. That they wanted to indict,
21 but were being kept back from it. And that what she finally
22 realized was that he was asking for — the indictments that he
23 was asking them to give, he had not given the evidence on. She
24 stated that they wanted to indict for conspiracy. But he —
25 when it come up for vote, what he presented to them was a case

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1 for cocaine actually being there at the Mena Airport, which we
2 never proved. And he never gave them the opportunity to indict
3 for conspiracy. I believe that’s the gist of what — and money
4 laundering. Money laundering was a big thing. They never got
5 the evidence on money laundering.
6 Q. Did the FBI come to Mena and warn you not to screw up the
7 CIA operation?
8 A. I’m not sure what the purpose was for their appearance.
9 Floyd Hayes and Tom Ross were the FBI agents assigned to the Hot
10 Springs Office. This was a period in 1987, which I wasn’t
11 investigating. I had it behind me, and didn’t want to mess with
12 it anymore, and I had other cases to go on to, and heard all of
13 Barry Seal I wanted to hear. And there was some new activity at
14 the airport with the appearance of what appeared to be an
15 Australian business by the name of Southern Cross, and C-130’s
16 had appeared at the Mena Airport. And this was right on the
17 heels of Barry Seal’s assassination and the 123 being there. So
18 there was almost an unconscious association. And I still didn’t
19 want to mess with it. I didn’t see a crime. If you’re not
20 going to show me a crime, don’t expect me to investigate, was my attitude
21 at the time. And the two agents showed up one Friday
22 afternoon and asked me to — or to have coffee with me. And we
23 met at a local coffee shop, and they explained that a friend of
24 theirs at the Hot Springs Airport, who is — was in the CIA, and
25 they had checked on it and confirmed that he was with the CIA,

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1 and that he was a source of theirs, had come to them stating
2 that he received a telephone call from a current CIA member in
3 Miami who was involved with the Southern Air Transport
4 operation. And the Miami agent told the Hot Springs Airport
5 contact that they had something going on at the Mena Airport
6 involving Southern Air Transport, and what had been going on at
7 Southern Air Transport. And they didn’t want us to screw it up
8 like we had the last one.
9 At that time Oliver North was being intensely investigated.
10 And I was under the impression that he was being investigated
11 for illegal activity that did take place, whether he was
12 involved or not. And I felt like the FBI was telling me that
13 there may be illegal activity going on here. When I asked them
14 why they were telling me, they said they just wanted me to know.
15 And I asked specifically, “Do we need to investigate
17 it?” They said they didn’t know. I felt like I was being —
18 kind of requested to keep an eye on it, which I did, and kept
19 notes, and pretty much unwillingly followed it for a while. And
20 then, later on, when they were asked about that conversation,
21 they both denied it.
22 Q. As a law enforcement officer, how did you feel after
23 investigating the situation at Mena for a number of years and
24 nothing ever happened?
25 A. I’ve got a lot of different feelings. Bitterness is

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1 certainly one of them, because if there was something there that
2 they didn’t want investigated, all they ever had to do was tell
3 me to take a hike, and I would never have asked any questions.
4 We have operations all the time — our own agents in the State
5 Police come into Mena and do undercover operations and don’t
6 tell me. I don’t need to know, and I don’t want to know. I
7 don’t get put on an investigation investigating my own people
8 and wasting my time. I could have quit anytime.
9 A local law enforcement officer came to me at one point
10 a couple of years ago and asked if they could put some kind of
11 group together of law enforcement agencies to try to contact
12 somebody, to lobby, or whatever, because they just didn’t feel
13 like busting somebody for an ounce of marijuana, when they felt
14 like there were -they knew that so much cocaine transportation
15 had gone unpunished with — when there was evidence to pursue
16 it. I don’t know how to explain it. It’s not a good feeling to
17 be used that way.
18 Q. In other words, you feel that you were used in this entire
19 operation, and that the responsible officials never intended to
20 pursue any criminal charges against responsible people?
21 A. That’s absolutely the way I feel. At one time we were
22 trying to get Colonel Goodwin’s name on the 6-E list so I could
23 brief him as to what I was doing with what I thought was a grand
24 jury investigation. In a conference room at State Police
25 Headquarters in Little Rock, I called Mike Fitzhugh and — to

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1 ask him if I could tell the Colonel the status of the
2 investigation, and he said no. And I asked him if there was a
3 grand jury investigation, and he paused for a minute and said
4 no, said there wasn’t a grand jury investigation. And this was
5 after I thought I had been involved in one for probably a year
6 and a half at that time and had been keeping secrets. You know,
7 at least he could tell me that I’m not involved in a grand jury
8 investigation.
9 MR. BRYANT: Let’s go off the record.
10 (Off-the record.)
11 MR. BRYANT: That’s all. Thank you.
12 (WHEREUPON, at 3:45 p.m., the taking of the
13 above entitled deposition was concluded.)
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THE ORAL DEPOSITION OF WILLIAM C. DUNCAN, a witness produced at the request of the Attorney General’s Office, taken in the above styled and numbered cause on the 21st day of June, 1991, before Jeff Bennett, C.C.R., Certificate ~19, of BUSHMAN COURT REPORTING, INC., Notary Public in and for White County, Arkansas at the Office of the Attorney General, 323 Center Street, Little Rock, Arkansas at 11:40 p.m.

**********

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 EXAMINATION
2 BY MR. ALEXANDER:
3 Q. Would you state your name, age, and address, please?
4 A. William C. Duncan, age forty-four, 513 Pine Bluff Street,
5 Malvern, Arkansas.
6 Q. Mr. Duncan, briefly would you tell us your educational
7 background, for the benefit of those who might read your
8 testimony?
9 A. I graduated from the University of Arkansas at
10 Fayetteville, December 1983, BS/BA marketing.
11 Q. And what was your first- job that you received after having
12 graduated from college?
13 A. Special agent with the U.S. Treasury Department,
14 Intelligence Division.
15 Q. Did you receive any special training with the Treasury
16 Department?
17 A. Yes, I did. A variety of Criminal Investigation Division
18 training and Internal Revenue Service training.
19 Q. You were a criminal investigator for the U.S. Treasury
20 Department?
21 A. Yes, perpetually from December of ’73 through June 16,
22 1989.
23 Q. And as a criminal investigator for the Treasury Department,
24 did you have occasion to investigate matters surrounding
25 activities in Mena, Arkansas?

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1 A. Yes, I did.
2 Q. And were you assigned to Arkansas for that purpose?
3 A. I was already stationed in Arkansas at the Fayetteville,
4 Arkansas post of duty when I became involved in those
5 investigations
6 Q. Would you describe the nature of your instructions and the
7 manner in which you carried out those instructions as they
8 relate to activities surrounding the Mena Airport matter?
9 A. I was assigned to investigate allegations of money
10 laundering in connection with the Barry Seal organization, which
11 was based at the Mena, Arkansas airport.
12 Q. And can you — how long a duration were you involved in
13 this investigation?
14 A. I received the first information about Mena and illegal
15 activities at the Mena Airport in April of 1983, in a meeting in
16 the U.S. Attorney’s Office, Fort Smith, Arkansas. Asa
17 Hutchinson was the U.S. Attorney then. Also present at that
18 meeting was Drug Enforcement Administration Agent Jim Stepp,
19 S-T-E-P-P.
20 Q. Did you discover what you believed to be money laundering?
21 A. Yes, I did.
22 Q. Who was the object of your investigation, and what
23 institution?
24 A. Rich Mountain Aviation, Incorporated based at the Mena
25 Airport. Barry Seal was not actually a target. We had targeted

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1 the employees and cohorts of his which operated out of the Mena
2 Airport, including Freddie Lee Hampton, Joe Evans, Rudy Dale
3 Furr, and there was a banker that was also involved in
4 allegations of the money laundering, his name was Gary Gardner,
5 vice-President at Union Bank of Mena
6 Q. Now, all these persons that you mentioned, were they
7 residents in and around Mena, Arkansas?
8 A. Yes, they were.
9 Q. What did you do with the evidence of money laundering that
10 you gathered from your investigation?
11 A. Presented it to the United States Attorney’s Office,
12 Western Judicial District, Fort Smith, Arkansas.
13 Q. And what were your recommendations to the U.S. Attorney?
14 A. That those individuals and corporation — the corporation
15 be prosecuted for violations of the money laundering statutes,
16 also there were some perjury recommendations and some conspiracy
17 recommendations.
18 Q. Did you present to the U. S. Attorney a list of prospective
19 witnesses to be called?
20 A. Yes, I did.
21 Q. For a grand jury?
22 A. Yes.
23 Q. And do you have the names of those witnesses?
24 A. There were a variety of witnesses. There were some 20
25 witnesses. He called three witnesses. The witnesses including

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1 — included the law enforcement personnel who had participated
2 in the investigations, Barry Seal, members of his organization,
3 people who were involved in the money laundering, and various
4 financial institution officers who had knowledge.
5 Q. Mr. Duncan, the money laundering to which you refer, did
6 that arise out of an alleged drug trafficking operation managed
7 from the Mena, Arkansas airport?
8 A. It did.
9 Q. And it has been alleged that the Central Intelligence
10 Agency had some role in that operation. Is that the same
11 operation that you investigated?
12 A. Yes.
13 Q. And when you submitted the witnesses, the names of the
14 prospective witnesses to the U. S. Attorney in Arkansas, are you
15 referring to Mr. — what was the name of the U. S. Attorney?
16 A. Asa Hutchinson.
17 Q. Asa Hutchinson. And what was his reaction to your
18 recommendations?
19 A. It had been my experience, from my history of working with
20 Mr. Hutchinson, that all I had to do is ask for subpoenas for
21 any witness and he would provide the subpoenas and subpoena them
22 to a grand jury. His reaction in this case was to subpoena only
23 three of the 20 to the grand jury.
24 Q. Now, of the three witnesses, who were — what was the
25 nature of the evidence that would have been elicited from those

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1 witnesses?
2 A. Direct evidence in the money laundering.
3 Q. And did those witnesses testify for the grand jury?
4 A. yes, they did.
5 Q. Were you present at the time of the grand jury?
6 A. No, I was not.
7 Q. You were not?
8 A. I was in the witness room, but I was not in the grand jury.
9 Q. I see. What was the result of the testimony given by the
10 three witnesses to the grand jury?
11 A. As two of the witnesses exited, one was a secretary who had
12 received instructions from Hampton, Evans, and I think on some
13 occasions had discussed with Barry Seal, the methodology. She
14 was furious when she exited the grand jury, was very upset,
15 indicated to me that she had not been allowed to furnish her
16evidence to the grand jury.
17 Q. Which witness was this?
18 A. Kathy Corrigan Gann.
19 Q. Kathy Corrigan Gann. Do you know her address?
20 A. She is in Mena, Arkansas.
21 Q. Mena, Arkansas. Now, she was a witness?
22 A. She was the secretary for Rich Mountain Aviation, who
23 participated in the money laundering operation upon the
24 instructions of Hampton, Evans.
25 Q. You talked to her about her evidence given to the grand

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1 jury?
2 A. Yes. I had taken two sworn statements, recorded sworn
3 statements prior to the grand jury, and those transcripts were
4 furnished to the U. S. Attorney.
5 Q. And what did she say about the evidence that she was
6 allowed to give the grand jury as it might have been different
7 from the evidence that you wanted her to give to the grand jury?
8 A. She basically said that “she was allowed to give her name,
9 address, position, and not much else.
10 Q. Mr. Duncan, are you saying that the prospective witness was
11 not permitted in your judgment to give evidence of the money
12 laundering to the grand jury?
13 A. That’s what this witmess told me.
14 Q. And there were two other witnesses, I believe you made
15 reference to, did you talk with them?
16 A.I talked to another one, his name was Jim Nugent, who was a
17 Vice-president at Union Bank of Mena, who had conducted a search
18 of their records and provided a significant amount of evidence
19 relating to the money laundering transactions. He was also
20 furious that he was not allowed to provide the evidence that he
21 wanted to provide to the grand jury.
22 Q. And was there a third witness?
23 A. There was a third witness, I don’t recall her name
24 off-hand. She was an officer at one of the financial
25 institutions in Mena, and she did not complain to me.

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1 Q. She did not complain?
2 A. No.
3 Q. What was the result of the grand jury inquiry into the
4 money laundering investigation which you had conducted?
5 A. There were never any money laundering indictments.
6 Q. There was no indictment?
7 A. No.
8 Q. Did you have occasion to talk to any of the jurors that
9 were impaneled on the grand jury that heard the evidence?
10 A. At a later date, I came in contact with the deputy foreman
11 of the grand jury, who had previously given testimony to an
12 investigator for the House Judiciary Subcommittee on Crime,
13 concerning her frustrations as the deputy foreman of the grand
14 jury.
15 Q. Do you remember her name?
16 A. P. J. Pitts.
17 Q. Do you know her address?
18 A. She’s in Mena. I don’t have her current address.
19 Q. And could you relate to us any other conversation you might
20 have had with her concerning her appearance before the grand
21 jury?
22 A. Well, she was perpetually involved in the grand jury as it
23 heard evidence concerning the Barry Seal matter, and she related
24 to me the frustrations of herself and the entire grand jury
25 because they were not allowed to hear of money laundering

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1 evidence.
2 Q. Do you recall any statements that she made to you
3 concerning that grand jury, her service on the grand jury?
4 A. .She stated to me that they specifically asked to hear the
5 money laundering evidence, specifically asked that I be
6subpoenaed, and they were not allowed to have me subpoenaed.
7 Q. What was her reaction to the unavailability of you as a
8 witness?
9 A. She said the whole grand jury was frustrated. She
10 indicated that Mr. Fitzhugh, who at that time was the U. S.
11 Attorney, explained to them that I was in Washington at the time
12 and unavailable as a witness, which was not the truth.
13 Q. Mr. Duncan, are you saying that the grand jury that was
14 impaneled to hear your investigation, hear evidence of the
15 investigation that you had conducted for the U.S. Treasury as a
16 special investigator, was compromised?
17 A. The evidence was never presented to the grand jury. The
18 evidence gathered during that investigation was never presented
19 to the grand jury.
20 Q. What was your reaction to the failure of the grand jury to
21 receive the evidence?
22 A. Well, I was frustrated for a long period of time because I
23 expected to be called and expected to summarize the evidence
24 over several years there that we gathered with respect to the
25 money laundering to the grand jury.
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1 Q. There were no indictments?
2 A. Never any indictments.
3 Q. There were no prosecutions?
4 A. None.
5 Q. In effect, the evidence that you gathered has not been
6 acted on by the U. S. Attorney’s Office?
7 A. Not to my knowledge.
8 Q. Did you complain to your superior?
9 A. Yes.
10 Q. What was his name?
11 A. Paul Whitmore, Chief of Criminal Investigation. I also
12 complained to my group managers, Tim Lee, Charles Huckaby and
13 Max Gray.
14 Q. And what did they — what was their response?
15 A. They were very frustrated, also. Mr. Whitmore, in fact,
16 made several trips to Fort Smith, Arkansas to complain to the
17 U. S. Attorney’s Office.
18 Q. Did he relate to you the conversation he had had with the
19 U. S. Attorney?
20 A. On several occasions, and also related to me that the U.S.
21 Attorney wrote him a letter telling him not to come to his
22 office anymore complaining, that that was unprofessional
23 behavior.
24 Q. What was the conclusion of Mr. Whitmore concerning your
25 investigation and the manner in which it was handled by the U. S.

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1 Attorney in Arkansas?
2 A. That there was a coverup.
3 Q. Are you saying — do you agree with his-with Mr.
4 Whitmore’s conclusion?
5 A. Absolutely.
6 Q. Are you stating now under oath that you believe that the
7 investigation in and around the Mena Airport of money laundering
8 was covered up by the U. S. Attorney in Arkansas?
9 A. It was covered up,
10 Q. Would you state that succinctly for the record in your own
11 words, so that we might — to have the benefit of how you would
12 state your opinion and conclusions as a result of your
13 activities as a special investigator — as to this
14 investigation?
15 A. I was involved from April of 1933, really to this date, in
16 gathering information, gathering evidence, until 1987-1988. I,
17 on a perpetual basis, furnished all the evidence, all the
18 information to the U. S. Attorney’s Office. In January of 1986,
19 a Special Assistant U.S. Attorney from Miami, I believe, who was
20 a money laundering specialist, came to Fort Smith, met with then
21 U. S. Attorney Fitzhugh and myself and drafted a series of
22 indictments. I think there were 29 indictments, charging the
23 aforementioned individuals and Barry Seal, as I recall, as an
24 unindicted co-conspirator in the money laundering scheme. At
25 that point in time I had every indication that the cases would

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1 go to the Grand Jury, that the evidence would be presented to a
2 grand jury. We experienced a variety of frustrations, mid ’85
3 on, not able to obtain subpoenas for witnesses we felt were
4 necessary. I had some direct interference by Mr. Fitzhugh in
5 the investigative process. Specifically he would call me and
6 interrupt interviews, tell me not to interview people that he
7 had previously told me were necessary to be interviewed.
8 Q. Did you have any interferences or interruptions from anyone
9 within the U. S. Treasury Department that would interfere with
10 your investigation?
11 A. They interfered with my testimony before the House
12 Judiciary Subcommittee on Crime.
13 Q. Would you tell us about that?
14 A. In late December of 1987, I was contacted by Chief Counsel
15 for the House Judiciary Subcommittee on Crime, Hayden Gregory,
16 who told me that they were looking into the reason why no one
17 was indicted in connection with the Mena investigations. The
18 Internal Revenue service assigned to me disclosure litigation
19 attorneys, which gave me instructions which would have caused me
20 to withhold information from Congress during my testimony and to
21 also perjure myself.
22 Q. And how did you respond to the Treasury Department?
23 A. Well, I exhibited to them that I was going to tell the
24 truth in my testimony. And the perjury, subornation of perjury
25 resulted in an — resulted because of an allegation that I had

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1 received, that Attorney General Edwin Meese received a several
2 hundred thousand dollar bribe from Barry Seal directly. And
3 they told me to tell the Subcommitte on Crime that I had no
4 information about that.
5 Q. What is this about Meese? Where did you get that
6 information?
7 A. I received that from Russell Welch, the State Police
8investigator.
9 Q. Mr. Welch will be deposed subsequently by — in this —
10 during this line of questioning.
11 Mr. Duncan, did your experience at the Mena — in the Mena
12 case interfere with your employment with the Department of
13 Treasury?
14 A. Yes, it did.
15 Q. Could you tell us what happened, how it affected it?
16 A. I received a subpoena, in July or August of 1983 from
17 Deputy Prosecutor Chuck Black from Mt. Ida, who was going to
18 present evidence that Mr. Fitzbugh and Mr. Hutchinson had not
19 presented to the grand jury for the purposes of seeking
20 indictments against the individuals at Mena. The Internal
21 Revenue Service Regional Office told me just to have him send a
22 subpoena, and that I would be allowed to testify or assist him
23 in his investigation. About the same time, I believe, that you
24 were making inquiries also attempting to interview me. The
25 Internal Revenue Service told me I would have to go back and

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1 deal with the same disclosure litigation attorneys who attempted
2 to get me to withhold information from Congress and perjure
3 myself, and I refused to do that. At the time my
4 responsibilities were — as Special Operations Coordinator for
5 the Southeast Region, my responsibilities included oversight for
6 aviation activities for the Criminal Investigation Division also
7 undercover and technical operations. They withdrew support for
8 the operations and basically kept me in the regional office in
9 Atlanta and did not allow me to fulfill my responsibilities.
10 This ultimately resulted in my resignation in June of 1989.
11 Q. Did you resign by forwarding any particular communication
12 to the Treasury Department; did you write them a letter?
13 A. Yes, I submitted a formal resignaton.
14 Q. Do you have a copy of that letter?
15 A. Yes, I do.
16 Q. Do you have it with you?
17 A. No, I do not.
18 Q. Would you make that part of this record?
19 A. I’d be glad to.
20 Q. Okay. We would ask that Mr. Duncan’s letter of resignation
21 be submitted as a supplement to this record as Exhibit 1.
22 (Deposition Exhibit 1 was identified. )
23 MR. ALEXANDER: Let’s go off the record a minute.
24(Off-the-record. )
25 Q. (BY MR. ALEXANDER) Mr. Duncan, prior to your resignation

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1 from the Department of Treasury, do you recall any other
2 conversations you may have had with your superiors concerning
3 the investigation of Mena?
4 A. With respect to what?
5 Q. With respect to the manner in which the case was attempting
6 to be covered up?
7 A. We had continuing discussions because none of us, my
8 managers nor myself, had ever experienced anything remotely akin
9 to this type of interference. I had a very good working
10 relationship with all the Assistant United States Attorneys and
11 the U.S. Attorney’s Office, Western Judicial District, never any
12 problems. The office was open to me, and I visited with them
13 everytime I was in Fort Smith. And we couldn’t understand why
14 there was this different attitude. I had found Asa Hutchinson
15 to be a very aggressive U.S. Attorney in connection with my
16 cases, then all of a sudden, with respect to Mena, it was just
17 like the information was going in but nothing was happening over
18 a long period of time. Mr. Hutchinson did not directly
19 interfere as did Mr. Fitzhugh. But just like with the 20
20 witnesses and the complaint, I didn’t know what to make of
21 that. Alarms were going off. And as soon as Mr. Fitzhugh got
22 involved, he was more aggressive in not allowing the subpoenas
23 and in interfering in the investigative process. He was
24 reluctant to have the State Police around, even though they were
25 an integral part of the investigation.

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1 For instance, when the money laundering specialist was up
2 from Miami, Mr. Fitzhugh left Mr. Welch in the hall all day
3 until late in the afternoon and refused to allow him to come in.
4 We were astonished that we couldn’t get subpoenas. We were
5 astonished that Barry Seal was never brought to the grand jury,
6 because be was on the subpoena list for a long time. And there
7 were just a lot of investigative developments that made no sense
8 to us.
9 One of the most revealing things, I suppose, was that we
10 had discussed specifically with Asa Hutchinson the rumors about
11 National Security involvement in the Mena operations. And Mr.
12 Hutchinson told me personally that he had checked with a variety
13 of law enforcement agencies and people In Miami, and that Barry
14 Seal would be prosecuted for any crimes in Arkansas. So we were
15 comfortable that there was not going to be National Security
16 interference.
17 Q. Did you discuss the Mena investigation with anyone in
18 Washington?
19 A. I discussed the Mena investigation with people in the
20 national office.
21 Q. And with whom did you discuss it?
22 A. With Joe Pagani, who was the Deputy Assistant Commissioner
23 for Criminal Investigation, with a variety of other of his
24 staff. Now, this was at the point of interference by the
25 disclosure litigation attorneys.

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1 Q. Anyone else in the, say, the Commissioner’s Office that you
2 discussed this with?
3 A. Peter Filpi.
4 Q. Peter Filpi?
5 A. Who was Mary Ann Curtin’s supervisor.
6 Q. Now, did you discuss it with Mary Ann Curtin?
7 A. She was the briefing attorney. She was the one that I was
8– was supposed to be involved in preventing disclosure of tax .
9 return information and grand jury information.
10 Q. Can you think of anyone else that you talked with up in
11 Washington? Did you receive any orders from any of the
12 higher-ups in Washington concerning this investigation?
13 A. None.
14 Q. Did you ever talk to a Mary Ann Curtin?
15 A. Yes, I did.
16 Q. What was her job?
17 A. She was the disclosure litigation attorney in Washington
18 assigned to counsel me, provide legal advice with respect to my
19 testimony before the House Judiciary Subcommittee on Crime.
20 Q. What was her advice to you?
21 A. Told me not to offer any opinions, even if specifically
22 asked for my opinion by the Subcommitte on Crime. Told me not
23 to volunteer any information. Basically did not want me saying
24 anything that would reflect badly on the U.S. Attorney’s Office
25 in the Western Judicial District of Arkansas.

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Page 19
1 Q. What was your conclusion from her instructions to you?
2 A. It made no sence for me not to give full and complete
3 testimony to the subcommittee on Crime.
4 Q. Mr. Duncan, do you get the impression that she was ordering
5 you to cover up the investigation?
6 A. Absolutely.
7 Q. If you were asked to state that in your own words, what
8 would you say?
9 A. I would say that we had conducted textbook investigations
10 of all the individuals at Mena, there were a variety of legal
11 issues involved, which I had always had them in loop on. We had
12  proceeded very soundly. There was nothing for us to be ashamed
13 of. The investigations were thorough, to the extent that we
14 could conduct the investigation without subpoenas. And I would
15 have thought that the Internal Revenue Service would have wanted
16 a complete disclosure to Congress about the problems that we
17 encountered, but quite the opposite was true. They obviously
18 did not want any negative testimony coming from me concerning
19 the U.S. Attorney’s Office.
20 At one point when we were arguing about the Meese
21 allegation, she told me that she had discussed my frustrations
22 with 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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1 Q. Now, when you say “she” and “her” you’re talking about
2 Mary Ann Curtin?
3 A. Yes.
4 MR. ALEXANDER: Any questions?
5 FURTHER EXAMINATION
6 BY MR. BRYANT:
7 Q. Bill, let me ask you a few questions. I want to take you
8 back to your investigation at the Mena Airport. How many
9 federal 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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1 A. The reports, the prosecutorial reports went to Mr. Fitzhugh
2 in December of 1985.
3 Q. At that particular time were all federal agencies still
4 actively involved in investigating the Barry Seal matter or had
5 they–had their interest cooled, or how would you describe it?
6 A. It was a very strange thing, because we were dealing with
7 allegations of narcotics smuggling, massive amounts of money
8 laundering. And it was my perception that the Drug Enforcement
9 Administration 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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1 dropped the rugs in remote areas and retrieved them with
2 helicopters. He bad helicopters in the hangers at Mena and a
3 variety of aircraft, smuggling type aircraft on the ground in
4 Mena. And we heard, you know, all the time that he was making
5 on return trips — Terry Capeheart, a Deputy at Polk County
6 Sheriff’s Department, had received information from an informant
7 on the inside at Rich Mountain Aviation that drugs were actually
8 brought into Rich Mountain Aviation, and on one occasion guarded
9 with 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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1 with longer range tanks and bladders, that illegal cargo doors had
2 been installed in the aircraft. And there was a lot of evidence
3 of that.
4 And I was seeing on some of the cashier’s checks, Barry
5 Seal’s name on cashier’s checks.
6 The secretary that was — doing both secretaries, Lucia
7 Gonzalez and Kathy Corrigan, stated that when Barry would come
8 in in his airplanes, the next morning many times there would be
9stacks of cash to be taken to the bank and laundered.
10 Q. 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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1 Freddie Hampton were, that they were to do this to avoid the
2 Internal Revenue Service knowing about the money and to avoid
3 payment of taxes on the money.
4 Q. Now, are you saying the’ someone from Rich Mountain
5 Aviation would appear at a local bank with $10,000 or less in
6 cash, and then give that to the bank in exchange for a cashier’s
7 check, was that the typical arrangement, or what was the typical
8 arrangement?
9 A. 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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1 Q. You had an occasion to interview Mr. Seal yourself, did you
2 not?
3 A. That’s correct.
4 Q. Now, when was this?
5 A. This was December of ’85.
6 Q. Was this prior to the laundering grand jury or after?
7 A. After.
8 Q. After. Was there any particular reason why Barry Seal was
9 not 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.
15 You’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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1 Q. But in. 1985, when the first grand jury was convened, no law
2 enforcement official testified; is that correct?
3 A. Not to my knowledge.
4 Q. In your professional opinion as a law enforcement official
5 with extensive experience, is that — wouldn’t it be highly
6 unusual in extreme cases where law enforcement officials who
7 investigated the case would not be called to testify?
8 A. Every grand jury case that was ever presented where I
9 conducted 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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1 his testimony could be introduced into the record. I believe I
2 have a copy of that.
3 MR.. BRYANT: Could we make that Exhibit Numbers 2
4 or Exhibit B to Mr. Duncan’s deposition.
5 (Deposition Exhibit 2 was identified. )
6 Q. (BY MR. BRYANT) Bill, is there any other information that
7 you are aware of that might assist whoever reads this deposition
8 to understand the case that either Congressman Alexander or I
9 have 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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1 A. And they were also interviewed by the House Judiciary
2 Subcommittee on Crime investigator Ralpheal Maiestri and myself,
3 also, in my capacity as a House Judiciary Subcommittee on Crime
4 investigation.
5 MR. BRYANT: Okay.
6 MR. ALEXANDER: I’ve got a couple of questions.
7 RE-EXAMINATION
8 BY MR. ALEXANDER:
9 Q. 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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1 Q. Did Barry Seal have a connection with the so-called Mena
2 operation, drug smuggling operation?
3 A. The evidence that we have indicates that his entire base of
4 operation moved from Baton Rouge to the Mena Airport in
5 approximately 1982, late 1982.
6 Q. Mr. Richard Brennecke testified earlier today that he was a
7 former contract employee with the CIA, and that as a pilot he
8 transported guns and munitions from Mena, Arkansas to Panama.
9 And 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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1 and additional information that we received concerning the
2 method of operation at Rich Mountain Aviation. For instance,
3 Kathy Corrigan related that on numerous occasions they would be
4 forced to stay inside their offices because airplanes would land
5 and strange faces would be around, Central American or Mexican,
6 Spanish origin folks would be around that they had not seen
7 before. But on those occasions they were given instructions by
8 Hampton and/or Joe Evans to stay in the office and make no
9 contact 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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1 that — from the Arkansas Game and Fish Commission people that
2 they found vast quantities of ammunition hulls secreted in
3 shacks around the Nela Airport. On one occasion the Game and
4 Fish officer was warned away from the Nella Airport by someone
5 who purported to be an FBI agent and exhibited a badge, On and
6 on and on.
7 Q. Regarding the Nella Airport, have you been there
8 personally?
9 A. 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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1 FURTHER RE-EXAMINATION
2 BY MR. ALEXANDER:
3 Q. Mr. Duncan, you’ve made some statements in the nature of
4 corroborating the evidence that has been presented here today by
5 Mr. Richard Brenneke that is consistent with your understanding
6 of the Mena operation that has been described and discussed here
7 today. Do you recall the names of other persons with whom you
8 have discussed the Mena drug operation, the smuggling operation,
9 that 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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1 Strike Force Attorney at the time for the United States.
2 Government. There are others, I just can’t recall their names
3 right now.
4 Q. Mr. Duncan, would you attempt to provide us with the
5 locations of some of these persons that you have mentioned?
6 A. Yes, I will.
7 Q. And together with any additional names that come to mind of
8 persons with whom you have discussed the Mena drug smuggling
9 operation, 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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1 have copies of the Arkansas state police thesis concerning Mr.
2 Welch’s investigation, and a variety of other statements that
3 I’ll be glad to make available.
4 Q. I would like those to be part of your testimony, and they
5 may be sufficiently extensive enough that we would want to make
6 just a supplement to your testimony and include them in a bound
7 volume, might be the best way to do that.
8 A. Okay.
9 Q. 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.)
15
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