Shadow Warrior (81 page)

Then, hard on the heels of the December 1979 Soviet invasion of Afghanistan, came the election of Ronald Reagan; the Cold War was on again. The president-elect chose as his DCI William J. Casey, an OSS veteran and a hardline anticommunist. Casey came to Langley determined to further marginalize the analysts, who were continuing to argue that the Soviets did not possess superiority in nuclear weapons and had no intention of launching a first strike. He was equally determined to rebuild the clandestine services. Indeed, the Reagan transition team made Jim Angleton one of its principal consultants on intelligence matters. It was a logical move. Reaganites were convinced that the Soviets were cheating on SALT II and that first Colby and then Turner had so weakened counterintelligence that the country was being overrun by KGB operatives.
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Colby remained undaunted. In 1982, he came out publicly in favor of a nuclear arms freeze, identifying himself with the nuclear freeze movement generally and with a letter from the Catholic bishops calling for an end to the arms race specifically. A freeze agreement was eminently enforceable, he told a press conference. Indeed, any nuclear arms accord with Moscow would make it “easier rather than harder” to keep tabs on what the Soviets were doing by empowering the United States to demand an explanation of any suspicious Soviet arms behavior. In a subsequent article in the
Washington Post
, the former DCI accused the Reagan administration of appeasement—both of the Soviets, by making concessions that allowed the development of new weapons systems, and of the American “nuclear priesthood, which thinks only of building new and more complex weapons systems.” In taking on the New Right and the military-industrial complex for which it spoke, Colby realized that he was running counter to form for a
former DCI. “If I were taking the other side, nobody would bat an eyebrow about it,” he said.”
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On the matter of covert operations, however, Colby was more in agreement with William Casey and the Reagan White House than not. Noting that in 1983 only 3 to 4 percent of the Agency's budget was allocated to covert operations, both political and paramilitary, he told the
Los Angeles Times
: “I hope it will increase because I think there are areas of the world where a little covert action can forestall much more serious problems later.” In an article in the
Washington Post
, he noted that the world was becoming an increasingly complex and dangerous place and called for the creation of an elite counterterrorist force. “Cuban, East German and other Soviet proxies proliferate in Africa, the Middle East and Central America, and ideologues such as Qaddafi, Khomeini, and Castro plot to isolate the United States by subverting its allies,” he wrote. Carter's disastrous effort to rescue the American hostages in Iran revealed just how unprepared the United States was. What was needed was an antiterrorist unit composed of volunteers from the military services and appropriate civilian agencies, such as the Foreign Service and the CIA, that would train continuously and report directly to the Joint Chiefs of Staff.
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No high official ever really retires from the CIA, especially DCIs. Their experience and contacts are too valuable. Colby was called upon to facilitate dozens of schemes and operations, most of which are still shrouded in secrecy. But in 1980, his name popped up in connection with an Australian banking firm, Nugan Hand merchant bank, an enterprise that had laundered money for the Agency. It had also played a role in the 1975 fall of Australia's left-leaning prime minister Gough Whitlam. Australia was arguably America's most important ally in the Pacific. Oil tankers bound for Japan, Western Europe, and the United States regularly passed through an area north of Australia between Malaysia and Indonesia. The country was host to ten American military installations, including the ultra-secret satellite-monitoring facilities at Pine Gap.

In 1972, Whitlam had formed Australia's first Labor government in twenty-three years. He and his deputy prime minister, a self-described “fellow-traveler” named James Cairns, denounced the war in Vietnam and called for restrictions on CIA operations in Australia. The new government established diplomatic relations with Cuba, North Korea, and the German Democratic Republic and received leaders of the Palestine Liberation Organization.
The Whitlam regime then began putting pressure on the Australian Security Intelligence Organisation (ASIO) to sever ties with its American counterpart. For once, Kissinger, Angleton, and Colby saw eye to eye. “We . . . entrusted the highest secrets of counter-intelligence to the Australian services and we saw the sanctity of that information being jeopardized by a bull in a china shop,” Angleton later declared. For his part, Colby viewed the “left-leaning and . . . antagonistic government in Australia” as a problem equal in importance to the Cyprus crisis and the Yom Kippur War. “Whitlam's a bastard,” James Schlesinger remarked at a 1973 White House meeting. “I agree,” Kissinger added.
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When Whitlam indicated that he might not renew the contract for America's crucial Pine Gap listening post, the CIA and ASIO had had enough. Langley money began pouring into opposition parties. A CIA team headed by Edwin P. Wilson, later accused of selling arms to Libya, fabricated some cables implicating the Whitlam government in a financial scandal. In December 1975, the Australian House of Representatives passed a no-confidence vote, and the Commonwealth Governor-General asked Conservative Party leader Malcolm Fraser to form a new government. In 1980, it came to light that the paymaster for the CIA effort to unseat the Whitlam government had been Nugan Hand.
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The bank had been founded in 1973 by an Australian lawyer, Francis John “Frank” Nugan, who was reputedly associated with the Australian Mafia, and Michael Jon Hand, a former US Green Beret who had worked in Vietnam in the Phoenix program and in Laos training the Hmong army. In February 1980, Nugan was found dead, shot in the head with a .30 caliber rifle, in his Mercedes Benz some 90 miles north of his $1 million harborside residence in Sydney. The following July, Hand skipped the country with an estimated $5 million of what was left of the bank's assets. News articles would claim that Nugan Hand was an international dealer in heroin as well as a money launderer for the CIA. Bill Colby's business card—with his itinerary for a forthcoming Asian trip written on it—was found on Nugan's body. As it turned out, Colby had signed on as Nugan Hand's US attorney in 1976. Even more mysterious, Arthur Paisley had been investigating the financial ties between the Agency and Nugan Hand at the time of his death, apparently at the request of Langley, which was worried about the use of possible illicit funds in the financing of political action against the Whitlam government. When questioned by newsmen, Colby claimed
that his connection with Nugan Hand was purely commercial, part of his international law practice.
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In 1982, at the age of sixty-two, Bill Colby fell in love. The object of his affection was a thirty-seven-year-old former US ambassador to Grenada, Sally Shelton. Smart, attractive, and self-assured, Shelton had been born in San Antonio in 1944, but had grown up in Monett, Missouri. She attended Southern Methodist University, earning a bachelor's degree in French. “I wanted to become an ambassador and change the world,” she recalled. After garnering a master's degree in international relations from Johns Hopkins, she spent a year in Italy, and then enrolled in the Institut d'Etudes Politiques de Paris to complete her doctorate. She never finished, instead marrying a young Mexican from a politically prominent family. The union ended after a year, and Sally returned to Washington, where she went to work for the newly elected Democratic senator from Texas, Lloyd Bentson, as his foreign policy expert.

Politics would be her vehicle for advancement. “If I had gone into the Foreign Service,” she later said, “I might still be waiting [for an ambassadorship].” Jimmy Carter named Shelton to be ambassador to Grenada and Barbados, where she served during the tumultuous period from 1979 to 1981. She remembered remarking to Secretary of State Cyrus Vance before her departure that she feared there would not be enough going on in the eastern Caribbean to occupy her time and energies. No sooner had the youthful ambassador arrived in Grenada, however, than the New Jewel Movement staged a military coup, replacing the existing pro–United States regime with a “People's Revolutionary Government” headed by Maurice Bishop. The new prime minister, who ruled by decree, immediately reached out to Cuba, which in turn dispatched economic and military aid. US forces would invade Grenada in 1983, but by then Shelton was gone, her tenure having ended with Reagan's election.

Shelton spent a year teaching and conducting research at the Kennedy School at Harvard University and then applied for a job with the International Business-Government Counsellors. Bill Colby was the person who interviewed her. “I remember the first time I laid eyes on him,” she later recalled. “I had seen his picture in the newspapers many times. I thought he was so attractive, physically very attractive and just the nicest person.” IBC offered Sally a job, and she and Bill quickly began an office romance.
“He was very troubled by the age difference,” Sally recalled. “He was twenty-four and a half years older than I. I wasn't bothered by it at all. . . . It didn't take him very long to realize he wanted to marry me.” Jenonne Walker, who had been friends with Sally before she met Colby, was surprised at the match. “I thought Bill Colby had all the charisma of a shoe clerk,” she said. “Sally is a very outgoing woman, even flamboyant. She found him a sex object and with her he was.”
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By the spring of 1983, Bill had decided to end his marriage to Barbara. His father, Elbridge, had died the previous December removing that New-manite obstacle. Accounts differ as to where he broke the news. Barbara remembers him telling her in their living room at home; daughter Christine believes it was aboard
Eagle Wing II
. Apparently, Barbara was taken completely by surprise. “People like us don't get a divorce,” she blurted out. A Catholic marriage conceived in the years immediately after World War II, replete with five children, should last. Paul remembered that his mother nearly died of humiliation: “In front of all of her friends, she is now repudiated. I say this only half in jest; she would rather have died than to have had inflicted on her that shame among all her friends.”
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In June, Bill called the family together at the lodge at Thompson's Point, Vermont, on Lake Champlain. While Barbara was on a walk, he told the children that the marriage was over. The news did not go down well. John remembered standing at the foot of the stairs looking up at his father on the landing. “I'm disappointed in you,” he said. He subsequently groused, “Why didn't you just do what the French do—have an affair?” Christine stayed mad. “He divorced my mother so that he could be free to be the person he wanted to be,” she said. “He didn't have to obey the rules anymore.” Her father had first sacrificed family to career and was now doing it to a midlife crisis. In the weeks after her husband moved out, Barbara became obsessed with the breakup. She would call Tom McCoy, Stan Temko, and their wives, old family friends, and talk for hours about her personal tragedy. Temko and his wife, Francine, remembered that Barbara was convinced that both she and Bill were going to hell.
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Bill and Sally were married in Venice on November 20, 1984. He insisted on having the ceremony abroad so the children would not have to choose whether or not to attend. “He organized the whole wedding, including my bouquet,” Sally recalled. “He set up one of those special Venetian wedding gondolas draped in yellow and white silk, the wedding colors
of Venice. And the gondola was full of flowers. He hired a musician to come along and play Venetian love songs.” For her part, Sally believed that the love affair simply unleashed the romantic that had been hiding beneath the surface. Jenonne Walker agreed: “Sally had a great impact on Bill's personality.”
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By this point, Sally had taken a job with Bankers Trust in New York. At the end of six months, she told her superiors that she wanted to live with her husband, and they agreed to let her work from home. The couple bought a brownstone in Georgetown and set up house. “We did not go to the movies very often,” Sally said. “We never went to the theater. We liked to just talk about each other's days. We both had such public lives that at the end of the day we just wanted to be quiet and be private.” The romance never seemed to lose its intensity. “You know he loved to dance,” Sally recalled. “We frequently danced after dinner just right there in our dining room.” There were the little touches. “He gave me a charm bracelet and the first little gold charm was a sailboat. . . . And everywhere we went together, he bought a little gold charm that reflected that place. . . . Once he gave me a diamond pin in the shape of the Big Dipper. And he said, that's so you'll always be able to find your way home.”
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It did not hurt that the couple saw eye to eye on public issues. Both were Democrats, favored a nuclear freeze, supported measures to promote social and economic justice, and continued to speak out on foreign policy matters as liberal anticommunists. Colby kept driving his little red sports car, and the two got to New Orleans as often as possible to take in jazz performances at Preservation Hall. In the spring they would plant maroon and yellow tulips in their tiny garden in remembrance of South Vietnam. Sally never recalled Bill going to Mass after they were married.
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In May 1987, James Jesus Angleton died; the personal feud was over, but the larger issues that underlay it survived.