Francesco/who-killed-jfk huggingface dataset:
[157-10014-10144.pdf — page 88]
# SECRET - 85 -several non-profit organizations under Agency control. An unwritten condition of the sale was that the Agency would contract with the new organization for scientific research of interest to the Agency in the amount of about $900,000 over an eighteen month period. Only about $770,000 was so committed, and all Agency relations with the successor organization were terminated in 1968.LILISP/G - This media type proprietary provided cover for an Agency employee who arranged for a foreign motion picture firm run by an American to produce and distribute foreign language films throughout Latin America. For funding purposes, the proprietary borrowed working capital from another proprietary, LPBERRY/A, and paid production and distribution costs in anticipation of a return on the proceeds of film distribution. The proprietary was dissolved in 1961, and all rights to the net profits of distribution were assigned to LPBERRY/A in return for cancellation of the note it held from the proprietary. After much wrangling with the American owner of the film production and distribution company, it became evident that appropriate reports were not being submitted covering recoupments or net profits and the Agency negotiated a settlement which provided that LPBERRY/A and the distribution company would render no further claims against each other. Relations eased at that point.AMHIM - This media proprietary compiled, published, and distributed a newsletter overseas. In 1975, when the Agency withdrew its support, it was decided to discontinue the publication activity, and the assets of the company were turned over to AMHIM/1, the editor and manager, to enable him to maintain a status independent of the Agency as a commercial print shop.QKACTIVE - This proprietary radio broadcasting activity was turned over to the Department of State for support and subsequently placed under the control of the Board of International Broadcasters for continued operation with Congressional support.QRMASTER - This media type proprietary which was involved in radio and TV projects was established in 1963 and continued under Agency ownership until 1969 when it was sold
[157-10014-10144.pdf — page 89]
SECRET-86QRMASTER (Cont'd)to its manager with full expectation of continued operation with heavy Agency subsidy. At the time of sale, substantial funds were removed from the entity leaving it without sufficient working capital. Consequently, the Agency arranged for a line of credit through a bank guaranteed by the funds removed from the entity. Subsequently, the manager, with Agency permission, sold the entity to a group of foreign nationals. The manager formed his own corporation which contracted with the Agency for services including the continued management of the company sold of which he was still president. A management dispute resulted in the removal of the manager from the first corporation and the bank seized the guarantee for the line of credit which had been drawn down and used as working capital for the first entity. The manager, no longer supported by the Agency, is the channel through which the Agency is to receive repayment of loans which arose out of the line of credit. So far, the Agency has received no payments.TPTONICTPTONIC/FJINDULGELPTONIC/ZRNACARATThese three proprietary entities were part of a substantial radio broadcasting activity which was turned over to the Department of State for support and subsequently placed under the control of the Board of International Broadcasters for continued operation with Congressional support.ZRCANNYThis U.S. foundation type proprietary served as a funding mechanism for a labor organization supported by the Agency. In 1968 all assets plus a termination grant were turned over to the group of U.S. businessmen who backstopped the Agency entity. All Agency funds destined for the labor union were transferred to that organization, and the Agency created a foreign funding company (QRSPIDER) utilizing the same businessmen to continue support to the union. The foreign entity. is still in being, although inactive, and will be dissolved after all tag end negotiations are concluded with the former management of the labor organization which continues in revised form without Agency support.DTHABEASThis proprietary non-profit entity was supported by the Agency until. December 1974 when all Agency funds were withdrawn and the furniture and fixturesSECRET 4
[157-10014-10144.pdf — page 90]
# SECRETDTHABEAS (Cont'd)were given as a gift to the witting directors who proposed to continue the entity as a private organization. No further contact has been maintained with the entity.DTEMBARGOThis foundation was established in 1938 without Agency support. After a long period of inactivity, the Agency took over the entity in 1953 and used it to support a publication produced at a U.S. University and aimed at Latin America. In 1967, the Agency withdrew its support to the publication, withdrew Agency funds from the foundation, and gave the office furnishings to the witting directors of the foundation with the stipulation that the furnishings would be turned over to the university.ZRTINDERThis proprietary institute was supported by the Agency until 1968 when all assets and liabilities plus a termination grant was turned over to the management and ostensible owners of the entity to enable the organization to continue without Agency control or support. No further contact was maintained with the organization.QRTROWThis former proprietary is an institute located in Europe which seeks to influence and encourage moderate and pro-democratic youth leaders and government officials concerned with youth and higher education. The Agency withdrew its support from the institute in 1974 and turned over all assets to the management of the organization. In addition, the Agency provided surge funding in the amount necessary to enable the entity to exist in reduced form for about one year during which time the management would attempt to arrange private support. All Agency employees involved in the project terminated their employment relationship with the Agency or were reassigned, and the Agency has not rendered further assistance to the operation.PAFANFAREThis foundation type proprietary provided grants and other support to individuals and organizations of interest to the Agency in the Near East. At the project's termination residual funds were turned over to one of the witting trustees to permit the continuation of the activity for a period of time without Agency support. No further Agency support has been given to the organization.
[157-10014-10144.pdf — page 91]
# 88SECRETQKFEARFULThis foundation type proprietary provided support to a bona fide international organization interested in international legal matters. At the time the Agency withdrew its support for the activity in 1969 the assets of the proprietary plus termination funding were turned over to the witting Board of Directors. The organization, now under a new name, continues to exist without Agency support.WSFLUFFERThis foundation type proprietary provided funds to a bona fide foundation involved with the development of international cooperatives. At the time the Agency withdrew its support from the cooperative program, the entity was dissolved, however, it had been anticipated that the entity would be the recipient of funds resulting from the sale of a proprietary lending institution in Europe. The bona fide foundation which was part of the funding channel for the European bank was allowed to retain the proceeds of the sale when WSFLUFFER was dissolved. See the write-up under DEINHAUL for more details of the sale of the European bank.DTPILLARThis foundation type proprietary supported individuals and organizations of interest to the Agency in the Far East. At the time the Agency withdrew its support for the activity in 1967, the assets of the organization with a substantial termination payment were turned over to the witting Board of Directors of the entity. The entity has continued its work without Agency support.DTLAMPREYThis foundation type proprietary supported an international organization concerned with individuals in the teaching profession. At the time the Agency withdrew its support from the international organization, the proprietary was dissolved after making one last termination grant to the international organization. The international entity has continued without Agency support.QKOPERA/DTGODOWNThis foundation type proprietary supported individuals and international organizations involved with cultural matters. To give the entity substance and provide funds for day-to-day administration, the Agency started the organization with a substantial grant which was invested in6SECRET
[157-10014-10144.pdf — page 92]
- 89 -  SECRETQKOPERA/DTGODOWN(Cont'd)- income producing securities. At the time the Agency withdrew its support, the assets of the entity were given to its witting Board of Directors with the understanding that approximately 60% of the portfolio of investments would be retained by the organization to sustain its continued operation without Agency support, and 40% of the proceeds of the portfolio would be immediately granted to other organizations and activities which fostered the objectives of the QKOPERA project.QRMUGWUMP- This small proprietary provided cover for one individual overseas. In 1972, the employee resigned and expressed a desire to continue the business without Agency support. Accordingly, the meager assets of the entity were sold to the resigned employee. Payment for the entity took the form of offset against funds due the employee on separation, lump sum leave payment, return travel, etc. The Agency has had no further interest in the entity.TGVIVID- This proprietary travel Agency provided cover for an Agency employee overseas. When the employee was reassigned in 1966, all assets were converted to cash and turned back to the Agency. Nevertheless, an indigenous employee of the entity, and a contact of the Agency Station in the country involved, was allowed to take over the name and clientele and continue the business. No commitments or agreements were made for continued use of the business, and no support was subsequently provided or sought from the business.AMOT- This proprietary, which produced economic and sociological reports in support of Cuban operations, was dissolved in 1973 and its assets turned over to another proprietary, SLIGO. SLIGO was subsequently dissolved in 1975 (see list of dissolved entities.)7SECRET
[157-10014-10144.pdf — page 93]
## THE SALE OF SOUTHERN AIR TRANSPORT, INC.: A CASE STUDY IN DISPOSAL OF A CIA PROPRIETARY.### BACKGROUNDSouthern Air Transport Incorporated (SAT) is a U.S. Air Carrier, incorporated in the State of Florida on October 31, 1949. From its inception until its purchase in 1960 by the Central Intelligence Agency (CIA), it was privately owned by Messrs. Fredrick C. Moor and Stanley G. Williams. It was purchased by the CIA on August 5, 1960, and owned by the CIA through December 31, 1973. CIA sold the firm back to Mr. Williams on December 31, 1973.The decision to acquire Southern Air Transport was triggered by a change in the regulations governing the award of Military Air Transport Service (MATS) contracts. On April 1, 1960, Air America (AAM) had begun flying a seven-month MATS contract operating out of Tachikawa AFB in Japan, to other Pacific locations. In June of 1960, the Department of Defense (DOD) and the Civil Aeronautics Board (CAB) changed the regulations governing the awarding of MATS contracts to require that bidders hold at least a Supplemental Certificate of Convenience and Necessity for an Air Carrier and that they participate in the Civil Reserve Air Fleet Program (CRAF). Air America did not meet either of these new criteria and could not obtain appropriate waivers to them. The Air America heavy airlift capability represented an asset for use by the U.S. Government in future operational contingencies throughout the Far East area. Loss of the MATS contract would result in under utilization of aircraft and air crews and the
[157-10014-10144.pdf — page 94]
MATS contract revenues were needed to sustain these assets. Therefore, it was proposed that either AAM should obtain the necessary certification or that the Agency should buy another commercial firm that already held these certifications. The October 1, 1960, contract date and the need for public hearings and lengthy proceedings militated against AAM applying for the certificate themselves. Also, again in order to avoid lengthy public hearings, which would be time-consuming and generate public exposure, it was decided that the ownership of the company to be acquired must be kept completely separate from AAM. This solution was concurred in by the CAB, the DOD, the CIA, and AAM management.It was anticipated that if the new company were awarded the ongoing MATS contract, it would actually perform the flying service but would use equipment under conditional sale from AAM and would employ personnel transferred from AAM. Under inter-company agreements Air America would provide all maintenance work, ground handling, and other services for which it would be reimbursed by the new company. In this way, Air America would share in the revenues generated by the MATS contracts.The proposal to purchase a supplemental carrier and operate it under the above arrangement was approved by Allen Dulles as Director of Central Intelligence (DCI) on July 15, 1960. Funds from the Clandestine Services budget for FY 61 were made available for the purchase.After World War II there had been over 200 supplemental carriers in existence. By 1960 there were only 18 still operating. Air
[157-10014-10144.pdf — page 95]
America management made a survey of the 18 and determined that Southern Air Transport in Miami, Florida was the most attractive as a purchase possibility. It operated two C-46s -- one owned, one leased -- between Miami and points in the Caribbean and South America. Its associated company owned the four-acre property on which SAT was located. Moreover, it operated at a modest profit and had no long-term debts.Negotiations for the purchase of SAT were successful and on August 5, 1960, the CIA exchanged $307,506.10 for all outstanding shares of capital stock of SAT and its real property owning affiliate. The Agency owned these shares in the name of Roger C. Hyatt, a former board member of Air America. Mr. Hyatt together with Percival Brundage and Perkins McGuire were added to the SAT board of directors.Under CIA management Southern Air Transport operated with two semi-autonomous divisions: the Pacific Division and the Atlantic Division. The Pacific Division performed the MATS contract and supported Agency heavylift requirements in East Asia. The Atlantic Division continued to operate in the Caribbean and South America; doing the same sort of flying SAT had done prior to Agency acquisition. The Atlantic Division was also able to furnish certain support for the Cuban and Congo operations. At the peak of its activities, the SAT fleet, comprised of both owned and leased aircraft, included Douglas DC-6, Boeing 727, and Lockheed L-100 Hercules aircraft.
[157-10014-10144.pdf — page 96]
# THE SALEIn 1972 it became apparent that the Agency's air capabilities were becoming excess to its needs, and that political realities and future operational requirements in the post-war era of Southeast Asia would not require large air proprietary assets. On April 21, 1972, the Director of Central Intelligence approved in principle the divestiture of CIA ownership and control of the Air America complex and Southern Air Transport. He approved recommendations calling for Air America to be retained until the end of the war in Southeast Asia, the immediate elimination of the Pacific Division of SAT, the sale of the two 727 aircraft leased to SAT by Air America, and subsequent divestiture of Agency ownership and control of the remainder of SAT.* Specific note was made that conflict of interest should be avoided and that no employee should receive a windfall benefit as a result of these transactions.**In May 1972, Agency officials (Charles Kane and Lawrence Houston) met with the Chairman of the Civil Aeronautics Board, Secor D. Browne, and his Administrative Assistant, Edwin Rector, to seek informal advice as to the best way to disengage from SAT. Three alternatives were discussed: (1) dissolve the company and sell the assets; (2) sell the assets to the current operators of the company; (3) sell SAT to, or merge SAT into, one of the other supplemental carriers.* The Director determined that 'we no longer should retain air proprietaries purely for contingent requirements and that on the record, therefore, the Agency should divest itself of the Southern Air Transport complex entirely. He stated the opinion that the desirable course of action would be dissolution, although he realized that the problems were many and complex. Also, he did not rule out other solutions which might achieve the end and yet better satisfy the interests of all concerned."** A condition imposed by the DCI was that"in the disposition of any of the assets involved nothing inure to the benefit of Agency employees or former employees or persons whose relationship with the Agency has been or is of such a nature as might raise a question of conflict of interest!"
[157-10014-10144.pdf — page 97]
The CAB chairman discouraged option (3) because it would involve public hearings and would be subject to criticism by the other supplementals. Option (1), although least troublesome from the legal and exposure standpoints, would further reduce the shrinking number of U.S. supplementals (by 1972, there were only eleven supplemental carriers left) and would be unfair to SAT employees. The CAB officials had no problem with option (2). On 5 May 1972, the DCI was presented with the results of the meeting with the CAB chairman. He approved the recommendation to explore the sale of the equity in SAT to the current management. It was noted that SAT had been operating as a supplemental carrier for 25 years, none of the employees of SAT had ever been an employee of the Agency and that both the Department of Defense and the chairman of the CAB considered it in their best interests to keep SAT as a viable carrier rather than dissolving the company and selling the assets. The rationale behind selling SAT intact to its management was:a. Liquidation would deprive the U.S. of a useful air carrier and would be unfair to the employees.b. Sale of SAT as a going concern on the open market would generate an unacceptable level of public interest and scrutiny. A publicly advertised disposition would run contrary to the Director's statutory mandate to protect intelligence sources and methods.c. Although a potential for conflict of interest and windfall profit existed, sale of SAT to its management would best satisfy the requirements of everyone involved.The DCI was, apparently, allowed this flexibility in method of disposal by statute. 40 U.S.C. § 474(17) provides that nothing in the regulations relating to disposal of surplus government property
[157-10014-10144.pdf — page 98]
shall affect any authority of the CIA. In addition, 50 U.S.C. § 403(d)(5) provides that the Director of Central Intelligence is responsible for protecting intelligence sources and methods from unauthorized disclosure. It was determined that sale of SAT stock to Mr. Williams in a confidential manner would best prevent damage to national security and foreign relations of the United States which could result from disclosure of CIA ownership.Agency officials began exploring ways in which SAT could be sold to its management without permitting a windfall to accrue to the buyer and in a way that could not be construed as a conflict of interest. To establish a reasonable selling price, the Agency asked the Certified Public Accounting firm of Lybrand, Ross Brothers and Montgomery (now doing business as Coopers & Lybrand) to perform a valuation study. They in turn engaged R. Dixon Speas Associates, Inc., aviation consultants, to establish an evaluation for the aircraft. The following values were developed:a. Book Value of SAT $3.9 millionb. Estimated Total Value of SAT $2.645 millionCapital Stock on Open Marketc. Disposal as going concern $2.1 milliond. Liquidation Value $1.25 millione. Agency Investment $1.5 millionBased on these figures, the Executive Director-Comptroller on August 17, 1972, approved an asking price of $2.7 million. Sale at this price to the management would require simultaneous payment in full of the $3.2 million note payable to Air America through
[157-10014-10144.pdf — page 99]
Actus Technology (as the associated land holding company had been renamed) and would not include any equity in the least/purchase agreement between SAT and Air America for a Lockheed L 100-30 Hercules aircraft. Although this $2.7 million price was less than the $3.9 million book value, it did exceed the fair market value of the company as calculated by professional appraisers. The appraisals were based not on depreciated purchase prices for assets, as reflected in book values, but rather on either the earning power of the assets adjusted to "present value" or the current resale value for all assets.On August 23, 1972, Mr. Williams was advised of the asking price for SAT of $2.7 million for the acquisition of stock and $3.2 million for payment of debt to Air America or a total of $5.9 million. A deadline date of October 1, 1972, was established; otherwise Mr. Williams was advised that the firm would be dissolved and the assets liquidated. Although Mr. Williams contended the asking figure should be reduced since the outstanding loan to Air America had been reduced since the date of the study by Coopers & Lybrands, Mr. Williams stated he would attempt to work out financing within the deadline date of October 1, 1972. This deadline was extended by the Agency to December 4, 1972.On December 5, 1972, Mr. Williams submitted an offer for SAT of $5 million which comprised $1.875 million for the acquisition of SAT and $3.125 million to pay off the debt to AAM. On December 26, 1972, the Executive Director-Comptroller approved the recommendation that Mr. Williams' offer be rejected and that if Mr. Williams was
[157-10014-10144.pdf — page 100]
unable to raise by January 20, 1973, the additional funds required for the original purchase price of $5.9 million, including the Air America debt, that the Agency proceed with liquidation plans and dismissal of SAT employees not later than February 1, 1973.On January 11, 1973, Mr. Williams submitted a new proposal to purchase SAT for a total price of $5,605,000. Mr. Williams cited a tentative commitment for a loan of $4.0 million and his offer was contingent upon an additional loan. The offer called for a total payment of $5,605,000 broken down as follows:Acquisition of stock for Actus and SAT $2.145 millionPayment of debt to Air America 3.125 millionCredit for payments to AAM since (10 June) 1972, in liquidation of long term debt .335 millionTotal payment $5. 605 millionPrior to accepting Mr. Williams' offer, CIA representatives with the CAB again discussed the sale of SAT to Mr. Williams, Mr. R. Tenney Johnson of CAB indicated that the board would be interested in seeing SAT continued. Mr. Johnson stated it would not be necessary to surface the Agency's name as the true owner of SAT in the CAB proceedings, and that he did not anticipate any problems with other supplemental carriers as a result of the sale to Mr. Williams.On January 19, 1973, the DCI approved the sale of SAT to Mr. Williams. It was noted that Mr. Williams' offer was within 5 percent of the original asking price, was above the independent evaluation for sale as a going concern and was at a figure which would not seem to give the buyer windfall profit. Such sale would constitute a