Aide Linked T Esco SEC Not -Told of Extensive Dealings with Financier by Allen :Rfr.1
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CITY !:Ti tf WEDNESDAY. JULY 22, 1981 Telephone 929-fr:. Vol. 220. No, 2240 1981, Globe Newspaper Co. • O aide linked t esco SEC not -told of extensive dealings with financier by Allen :rfr.1 . By Brian McTigue dently hoping the White House would fugitive, charged with looting $224 mil- and Fred Strasser ( halt a burgeoning investigation of his ft- lion from American investors. Spec-Int to The Globe -nahcial dealings by the Securities and An irivest igat Eon for The Boston Globe • lc, WASHINGTON — At 10 a.m. on May Exchange Commission (SEC). has uncovered Allen-Vesco connections Including Vesco-pald helicopter rides, a 27, 1972. a helicopter landed In an open Ninety minutes later, Mien retraced flight on Vesco's private Jet. records of field behind the Boonton. N.J.. home nf ft- his steps down the curving road that phone calls to Allen's offices from Vesco's naneier Robert L. Vesco. Out of the air- passed Vesco's horse stable and climbed private line and reports of direct Allen craft. which Vest() had chartered from In- aboard the helicopter for a 45-minute re- dealings on behalf of Vesco. • terstate Helicopters. Inc.. stepped Richard turn trip to his Manahawkin. N.J., week- V. Allen, then a White House adviser to Moreover, sworn depositions made by end home, Vesco billed the flight tonne of 4 ij President Richard M. Nixon on interna- the companies whose assets he was skim- Allen and others to the SEC conflict with RICHARD V. ALLEN tional economic affairs and now Presi- ming. other Allen statements on his relation- Adviser to Nixon. too den! Ronald Reagan's national security ship with the financier. advhicr. Allen would describe his meeting that This new information. established has previously been reported and demon- It was Mien's first meeting with Saturday as a "social occasion" nearly through examinations of documents and strates that Mien, both in and out of of- Veseo, a flamboyant figure who six weeks six months later when he testified at the interviews, including one with Vesco. flee, utilized high-level national security earlier made an Illegal $200,000 contribu- SEC's probe into Vesco's affairs — an in- shows a more direct and extensive rela- contacts in Vesco-related matters. tion to Nixon's election campaign, evi- quiry that left the New Jersey financier a tionship between Allen and Vesco than ALLEN, Page 36 • eqi ALLEN a country willing to let them carve out a zone Continued from Page I where they could establish "laws suitable for them ... a combination of Monaco and Switzer- Allen did not disclose to the SEC that he rode land." With its proposed international banking on a helicopter chartered by Vesco to that first facilities - to be controlled by Vesco - the dis- meeting with the financier, though SEC investi- trict was to become a mechanism for Vesco to gators say it Is a fact that would have been rel- move the millions of dollars he was draining evant to their inquiry. Allen did not volunteer It from Investors. In short, the district was to be a In his sworn deposition Nov. 7, 1972, although ministate beyond the reach of all the world's "he was ordered to detail all of his dealings with troublesome regulatory authorities. 'Vesco and his knowledge of Vesco-controlled The first Allen-Vesco meeting {companies. Nor did Allen disclose In his deposi- lion that he tried to establish an "international Allen's first meeting with Vesco and Cerny business district" In the Azores Islands. which. took place May 27. 1972. while he was still as- -The Globe investigation shows, Vesco would sistant to President Nixon for international eco- 2tave used to headquarter his major operations nomic affairs. Allen described it as a Informal -beyond the reach of US law. gathering. Cerny testified Nov. 2, 1972. to the a^ following recollection: ti. In addition, a close comparison of Allen's SEC: Did Mr. Allen describe what sort of ser- sworn statements with other evidence shows he vices he proposed to render on that occassion? did not tell federal Investigators the complete CERNY: I think they were just discussing htory of his ties to Vesco. withholding informa- the International business-district concept. and tion on his role In several of the financier's de- I think Mr. Allen had some background famil- signs. Including an attempt to influence the iarity in that area, also. That was the prime SEC investigation. Some of that Information area of discussion. boncerned Allen's tie to Vesco while Allen was a Allen deepened his relationship with the White House official. Vesco organization only a few weeks after the -ft • Boonton meeting. PI: Allen refused to be interviewed by The Globe. Cerny was then looking for security person- nel for the Vesco organization. His handwritten This new information about Allen's ties to notes regarding that search, obtained by The Vesco comes at a time when some Reaean ap- Globe from the SEC through the Freedom of In- pointees have come under fire for past business formation Act, indicate that on June 13 Allen, - practices before joining the Administration. utilizing his White House intelligence contacts- Last week, CIA operations chief Max Hugel re- suggested that Cerny approach White House signed after allegations of stock market manip- staff member John J. Caulfield, of the Water- ulation were published In the Washington Post. gate "plumbers" fame. and Col. Richard K. 11:hat same day. it was revealed that his boss at Brown, a lop Pentagon intelligence official. the CIA. William Casey. had been charged by a Brown. who according to the Cerny notes federal judge with knowingly misleading inyes- had a background in "CIA dummy corps" - cor- Ors In raising $3.5 million for a now-defunct porations operated by the agency - ran the Pen- New Orleans company. tagon's secret Special Plans Branch. In an inter- view, Brown said he has known Allen since At the very end of the presidential race last fall. Allen resigned from the Reagan campaign 1969, when Allen was a senior staff member of the National Security Council. after an article in the Wall Street Journal al- kiged that he used White House influence during Several days after Allen apparently made his the Nixon Administration to obtain clients for suggestion about Caulfield and Brown. Cerny met with Brown in a Washington hotel. Brown his private consulting firm, and that while on described the encounter as "sort of a blind situ- 0;...agan's staff. Allen maintained a relationship itith Nissan Motor Co., Ltd., maker of Datsun ation ... sort of spooky." a word used In the automobiles. The Journal said letters showed intelligence community to describe spy-related t:fiai Allen leaked confidential information activities. The Vesco lawyer was looking for about Nixon White House deliberations on US someone who could make "discreet travel ar- rangements," he said. "... which I presume e.N. port-Import policies to a Japanese business e...soclate with close ties to his country's prime were simillar to several classified (government] n'iinIster. After Reagan officials conducted their operations I was involved in. which I can't dis- cuss." own investigation, after the election. Allen was liiought back to take his present post as Rea- Cerny's notes of the meeting show Brown On's national security adviser, named "Dick Allen" as a personal reference and as among the "top Washington people" he -worked with. The notes also show he disclosed cesco's rise from obscurity to the lawyer his past Involvement with "CIA '' By the time of Allen's meeting with him In dummy corps" and his current work In the Spe- 1672. Vesco had risen from obscurity to head a cial Plans Branch with "secret slush funds- worldwide financial empire. Using a small New and "International monetary transfers" - clear- JVrsey tool-manufacturing company as his ly areas of keen Interest to Vesco. springboard. in 1970 he gained control of Inves- Brown refused to discuss this work with The t(Crs Overseas Services 110S1. a giant Geneva- Globe because it was "Intelligence business." bfased mutual-fund complex. The SEC had but he asserted Allen had never been "officially barred IOS from US activity In 1967, after Judg- involved" In the monetary transfers or slush rig its lack of external controls a danger to in- funds. i?estors and American capital markets. In any event. Brown said he never heard rough a chain of companies controlled from the lawyer again. That November. he re- t rough 10S, Vesco moved 5224 million of Inves- tired from the Special Plans Branch and became tors tunas out of the United states into banks Luropean sates manager ior Lockheed, kiting LAUREN. hi: controlled abroad. aircraft services to foreign governments. In his SEC testimony on Vesco-related mat- a Vesco's alleged theft slowed after the SEC ters, Allen did not mention any role he might Wed suit against him In November 1972. Within have had in connecting Brown to Cerny. three months. he left the country ahead of four .criminal indictments and has been a fugitive Casey' meeting arranged rince. Allen also utilized national security contacts A link between Allen and Vesco was first dis- to arrange a meeting between Cerny and Casey. t closed in Mother Jones Magazine during the the SEC's chairman at the time and now direc- F prcsiciential campaign last year. when Allen tor of the CIA. 'was Reagan's senior foreign-policy adviser. Casey. In an interview with the authors At the time, Allen conceded the accuracy of while he was In private practice after he left the oreports that he had met and traveled with Vesco SEC, said that soon before his meeting with ;while still on the Nixon White House staff, and Cerny he had made the acquaintance of Allen as that he later acted as a $10.000-a-month con- a "strategy, defense, national security expert" sultant to Howard Cerny.