ART OF DECEPTION
MICHAEL HAND & THE CIA
MERCHANTS OF MENACE reveals that Michael Hand was seconded to the CIA following his service in Vietnam. After three months of intensive training, the CIA loaded Hand onto a Continental Air Services transport bound for Laos on a top-secret mission dubbed ‘Project 404’. Laos was a neutral country, but in 1965 intelligence reports warned Washington that Vietnamese communist forces were spilling over the border into Laos. By the time Hand arrived, Laos was in the thick of the largest covert military operation in the CIA’s history. He was assigned to a group called ‘Requirements Organization’, training Hmong hill tribesmen in the dark arts of counterinsurgency to oppose the North Vietnamese–backed Pathet Lao communists.
Hand's Special Forces buddy, Doug Sapper, told the author that being in Laos was like being in a war that didn’t exist: ‘I used to describe it as a place far, far away, populated by people that don’t exist, where things never happened. And Michael got thrust into that. He taught the Hmong different things about communications, about weapons, demolitions, about ambushes and then sent them out on patrols.’
In January 1975, barely 18 months after the creation of Nugan Hand, Michael Hand quit the bank. He said he was going turkey farming. He spent the next 14 months in Southern Africa. Within six months of his arrival, Hand telexed Nugan requesting the prices and availability of weapons and ammunition.
The numbers of weapons involved were staggering. At the time, the CIA was running a clandestine mission in Angola. The US Secretary of State, Henry Kissinger, and CIA director, William Colby, had concocted a super-secret mission, which was backed by the US National Security Council, to intervene in Angola and support two Angolan liberation movements by providing both with military hardware and training. Eighty-three CIA officers were soon spread across Angola, Congo, Rhodesia and South Africa, running a paramilitary operation, code-named IAFEATURE.
This remarkable portrait of Michael Hand by Admiral Earl Yates, the former president of the Nugan Hand bank, surfaced within days of the launch of Merchants of Menace.
In December 1979 - a month before Frank Nugan's death - Yates presented the painting to Michael Hand's wife, Helene.
Rich in coded symbolism, the metre square artwork is entitled 'Smiley's People'. A best selling spy novel of the same name by John leCarré had been published earlier that year.
Following the bank's collapse, the FBI interviewed Admiral Yates on behalf of the Australians. He denied allegations that Nugan Hand was doing business with the CIA, even though the bank employed at least five former CIA officers, communicated with codes and actively chased weapons deals in areas of CIA activity around the world.
Frank Nugan sent a staffer, Wilhelmus Hans across to meet with up Hand in South Africa. Hans later told investigators that Hand was obsessed with the weapons issue. He also said that he and Hand visited Angola at a time when journalists and travellers were being denied entry.
On 20 August 1975, US President Gerald Ford authorised the purchase of more arms and ammunition for Angola. The arms were to be untraceable foreign weapons. Around this time, Hand's correspondence regarding weapons increased markedly.
In February 1976, the US President called an end to the CIA's secret mission. Hand arrived back in Sydney in early March and returned to Nugan Hand and began a major expansion of its international branches.
In Hong Kong in mid-1977, Hand made a startling announcement at a meeting to the bank's executives and branch managers. Chiang Mai Manager Neil Evans later told Sixty Minutes, 'He told me that he’d been successful in arranging a contract with the CIA, whereby the bank was to become its paymaster, if you like, for disbursement of funds anywhere in the world on behalf of the CIA, and also for the taking in of money on behalf of the CIA.'
MERCHANTS OF MENACE details the explosion of former high-ranking military and CIA officers to the bank's executive, including the former director of the CIA, William Colby. The bank also started using codes to protect information. Telexes recovered from the ruins of Nugan Hand revealed that the bank maintained an interest in gunrunning until its collapse.
In the aftermath of Nugan's death, Middle East executive Bernie Houghton left a suitcase full of documents with Ed Wilson, a former rogue CIA officer turned gunrunner. Those documents were later picked up by a principal figure in the Iran-Contra Affair.
MERCHANTS OF MENACE also reveals, for the first time, an intelligence report locating fugitive Michael Hand - 18 months after his disappearance - involved in a paramilitary operation on the Honduras-Nicaraguan border. The top secret mission was run by the CIA.