CHAPTER FOUR: The Education of a BankerMichael Hand was born in the Bronx, December 8, 1941. His father, a New York civil servant, still lives in a condominium in Queens, but absolutely will not discuss his son, or anything else, with reporters. Visitors are barred from the building by locked doors and security guards. A sister, reportedly severely handicapped, is also said to live in the New York area. Hand is said to have sent home money for her care regularly over the years.
The old Bronx neighborhood is now a slum, but when Hand was young it was upper middle class, and his high school, De Witt Clinton, was considered one of the city's best. He graduated 248th in a class of 695, won a scholastic achievement award, was appointed student prefect, and was starting receiver and defensive back on the football team. He passed every class he took, and was noted for exceptional character, courtesy, cooperation, and appearance. His IQ registered an also exceptional 131.
Graduating in 1959, he stated that his ambition was to become a forest ranger. Shortly afterward, his mother died in a fall from a third-floor window; the question of accident or suicide was never resolved. [1]
Mike Hand turned into a bearish man, with thick layers of muscle that melted largely to flab in later years. On the one hand, he developed an aggressive, macho, locker-room image that put more sensitive men off; on the other, he was known as a devout Christian Scientist and regular churchgoer, who rarely drank.
When Hand became a prominent banker in Australia, he told the world he was a graduate of Syracuse University, and mentioned to some that he had taught school in California before joining the army. The record shows instead that in 1961 he completed a one-year course at the New York State (forest) Ranger School. The school was attached to Syracuse University but hardly the equivalent of its B.A. program.
Hand's teacher, David Anderson, says Hand finished thirty-eighth in a class of forty-nine, though Anderson has a lasting impression of Hand as extremely personable. He must have been that, just to be remembered after all these years. Anderson says that Hand wrote from California in 1962 that he was managing a swim and sports school in the swank Los Angeles suburb of Palos Verdes Estates. The next year, Hand wrote back that he was taking Green Beret training at Fort Bragg, North Carolina. The record shows he enlisted in the army in May, 1963.
In Vietnam, Hand won a Silver Star, a Purple Heart, and the Distinguished Service Cross, second only to the Congressional Medal of Honor-as the nation's highest military award. On June 9, 1965 -- according to the Distinguished Service Cross citation-he almost single-handedly held off a fourteen-hour Vietcong attack on the Special Forces compound at Dong Xaoi.
According to newspaper accounts at the time, Hand braved a barrage of fire in an attempt to rescue a wounded buddy, then darted into a building and dragged to safety a wounded American captain -- Hand's commanding officer -- and another wounded soldier. Wounded by shrapnel himself, he still grabbed a machine gun and held the enemy off until the weapon jammed. Hit by another shrapnel blast, he was ordered to withdraw, but despite his wounds went under further fire to rescue one or two other wounded men. One account says he "acted as a live target to flush out enemy snipers."
A resume Hand later submitted to the State Department to keep his passport current says he left the army in May 1966. The next entry reads: "1966-1967, worked directly for U.S. Government." Banking associates say he sometimes referred fleetingly to his undercover activities in Laos during those years, and sometimes took a perverse joy in describing the bodily mutilations the local people had liked to perform on their slain enemies.
By accounts of men who say they encountered him back then, Hand helped train the mountain people-Montagnards-and worked closely with the Air America crews that supplied them. But there are no detailed accounts of his activities. He migrated to Australia in September 1967.
About the time Nugan Hand was organized, in the early 1970s, Hand married Helen Boreland, an Australian woman nine years his senior. By all accounts, they had a close and loving relationship, though an unusual one: people remark that Helen Hand seemed more like a mother than a wife to her husband. When he finally fled in June 1980, she stayed in Australia, worked for a while in a high-priced Sydney jewelry store, then disappeared from public view. Numerous requests for an interview with her were left with acquaintances and a lawyer who had represented her, but she didn't respond.
***
Even more important than Hand's wife was the person he fairly adopted for a substitute father-Maurice Bernard Houghton (pronounced "How-ton"), the mysterious puppetmaster of Nugan Hand, who, while posing as a simple barkeep, moved intimately among diplomats, spies, and military brass in many countries. The circles Houghton traveled in included the covert action specialists who would become central figures in the foreign policy scandal that engulfed the Reagan Administration in 1987-air force generals Richard Secord and Harry C. ("Heinie") Aderholt, and former CIA officers Edwin Wilson and Thomas Clines.
Bernie Houghton had preceded Mike Hand to Vietnam. He then preceded Hand to Australia, by eight months, arriving in January 1967.
Today, Houghton is still there. Once again, he is ostensibly just a barkeeper, now with a few years of part-time banking in his past. A lot of people think Houghton is a spy, and he has been called one by the looser Australian press. Whatever his business, secrecy is a big part of it. And he is very good at secrecy.
A fleshy, gray-haired, outwardly unobtrusive man with eyeglasses, Houghton seems to pride himself on a quiet demeanor. He is missing a couple of fingers on one hand, and there is no explanation for it in general circulation. He will not talk to reporters. If one hangs out in his bar, or waits at the main entrance to his penthouse ocean- front condo, it doesn't help. Houghton has lookouts protecting him, a tightly knit circle of confidants. They observe visitors and profess ignorance of Houghton's whereabouts until the visitors go away.
Adopted sons, they seem to some. They work at one of his bars, or he sets them up in other enterprises. Often, one is staying at the condo with him. Some are ex-army men from Vietnam. Some are "boys" who appear to be in their late teens or early twenties. Houghton is not known as a womanizer.
Impressive as he is at avoiding reporters, Houghton is even more impressive in his ability to avoid police, even those who have subpoena power. During the most aggressive investigations into Nugan Hand, which lasted several years, he simply slipped out of Australia when the heat was on, and returned when the investigation was over. Amazingly, he alone among his colleagues at Nugan Hand continues to hang around Australia and has still stayed out of the criminal docks.
He did agree to one transcribed interview with the Joint Task Force on Drug Trafficking, a top-level police group that was mandated by the prime minister of Australia and the premier (like a governor) of the state of New South Wales to investigate the Nugan Hand collapse. But Houghton refused to go to the police. He insisted the cops come to him-in Acapulco, Mexico, where he was holing up on the twenty-sixth floor of the Princess Hotel. They did, in June 1981.
His vague and convoluted answers, as transcribed, reveal him as a master of conversational evasion-as other native Texans might put it, he is a virtuoso bullshitter-and one can only wonder at the extent to which he was simply pulling the cops' legs.
"I had come to Australia because in World War II I had served alongside Australian servicemen and had gained a great deal of fondness and appreciation for them," he said. He told the police that he had been "engaged in business activities in Southeast Asia, including Vietnam," for several years. But he never said what business. "In 1966 I became disenchanted with the activities in Southeast Asia and determined to return to the United States, but wanted first to stop off and see Australia since I had heard so much about it in my association with Australian military men."
He said he didn't meet Michael Hand until Hand arrived in Sydney in the fall of 1967. But Houghton said he'd "heard of his [Hand's] reputation as early as 1964 or 1965." Houghton said, "I had heard of Mike Hand's great combat exploits and courage, which was wel1-known in Vietnam. In fact, the image I had of him was comparable to that of the famous Sergeant York [2] in American history. He conducted himself in such a manner in the war as to receive high praise and commendation, including from the President of the United States," [3] Houghton said.
Houghton said he met Hand "casually and through some social acquaintance, the exact particulars of which I cannot now recall. . . . Since we both lived and worked in the Kings Cross area [of Sydney], thereafter I saw him almost daily when we would run into each other all the time."
As for himself, Houghton said he was born July 25, 1920, in Texas "and lived in various cities in the Southwest. My father was an oil driller, which meant we had to move from city to city. I graduated from all the elementary schools and high school and was going to Southern Methodist University, studying business management, when the United States went to war. [Southern Methodist says he attended during the fall semester of 1939-40, a year before the United States went to war, and that he received no degree. It says he also spent the summer of 1946 there.]
"I enlisted in the U.S. Air Force Cadet Training Program and went to many schools," Houghton told the police. "I was discharged in 1946 and went into business, restaurants, clubs, surplus war material and miscellaneous." He said he "went to Vietnam, early in the 1960s, and I went to work for a construction material expediter [apparently in Vietnam] until such time as I came to Sydney, Australia, in January 1, 1967 [sic]."
In 1969, a problem with Houghton's visa caused him to give a statement to Australian immigration officials. He said then that he had spent the early 1960s with two San Francisco-based companies-the East India Company and J. G. Anderson, neither of which lists a telephone there now. He said he then went to Saigon to work for a Bruce Ficke "who is now a resident of Anchorage, Alaska." There is no telephone listing for a Ficke in Anchorage now.
In another brief interview with police in 1980, Houghton told a different story. He said he went to Saigon after seeing "job offers" in U.S. newspapers. "The same day I arrived," he said, "I got a job with an individual, by that I mean he ran his own company, named Green. He was later killed with his wife in Saigon."
This is how the Australian Joint Task Force on Drug Trafficking reported the rest of that police interview: "Asked to elaborate, Houghton said Green was an American whose Christian name was William. According to Houghton, his job with Green entailed 'traveling.... I was in Saigon for a while and then I went to Bangkok and did the same thing there. All this time I was working for Green.' Houghton described this work as being involved in a minor way in the construction of airport and military bases. He maintained that he worked for no one else whilst in South East Asia.
"Later, when asked about Bruce Ficke-the person referred to in his 1969 reply to the Department of Immigration-Houghton said, 'I met him years ago in Alaska. I was working for a company called East India and he was a distributor for goods I was selling. That association goes back over twenty years.'"
Efforts by the author to locate the companies or people Houghton" said he knew back then have failed.
Returning to his 1981 formal interview in Acapulco, Houghton gave this account of what happened after he landed in Australia in January 1967: "I went to work for Parkes Development as a real estate salesman and opened the Bourbon and Beefsteak Bar and Restaurant."
Even the date of the Bourbon and Beefsteak opening is mysterious. Houghton said it opened "November 4, 1967." The task force that interviewed him, however, determined in its final report that the restaurant actually opened in September. The date is significant, because the Bourbon and Beefsteak was designed to cater to the U.S. military.
To relieve the growing strain on the honky-tonk neighborhoods of Hong Kong and Bangkok, the U.S. Government had negotiated a deal with the Australian Government whereby Sydney would open its doors for U.S. soldiers to receive the rest and recreation periods their Vietnam War service entitled them to. According to the task force, Houghton somehow learned of Sydney's selection as an "R and R" center "prior to it becoming public knowledge." The task force said "Houghton did not explain how it was" that he found out early about the Rand R deal. But before the first soldiers arrived, in October 1967, Houghton had arranged to be at the center of the action.
That's as far as the cops got regarding Houghton's history before Nugan Hand. It leaves out a lot.
***
Alexander Butterfield, a former Asian-intelligence officer, had some helpful advice for a reporter asking questions about Bernie Houghton. In 1973, Butterfield had attained instant celebrity by revealing to Congress and the world that Richard Nixon's Watergate conversations were secretly taped in the Oval Office. (Little if anything was made of the curious circumstance that a career intelligence operative had played such a pivotal role in the downfall of a president.)
Asked about Houghton, Butterfield quickly said to call Allan Parks, a retired air force colonel who now runs the flying service at Auburn University in Alabama. Sure enough, Parks remembered Houghton well, mostly, he said, from his days as intelligence officer at the U.S. Embassy in Bangkok during the war. Parks recalls constantly stumbling over Houghton's name in cable traffic.
Military secrecy still prevents Parks from telling all he knows, he says, but he remembers meeting Houghton-and he places Houghton in Asia well after Houghton allegedly retired to Australia to become a barkeep.
"He ferried C-47s, cargo airplanes, from Thailand," Parks says. "The man, he was running everything. Between Australia and Thailand. I met him in Bangkok in a bar. I was involved in Laos in some things I can't discuss in '70 and '71. There was traffic I read relating to that. But I can't go into it because it's all secret." It was something to do, Parks says, with "Project 404," which is still "classified." (Asked about Michael Hand, Parks has the same response: "I can't tell you. It's classified. No comment.")
But the mention of Houghton elicits reminiscences from Parks: "There's no doubt about it, he'd fly anything. The Golden Triangle, that's where he got his opium from. There was one flight, he flew in slot machines. He did some deals over in India."
Asked the name of Houghton's airline, Parks just laughs, and says, "He didn't call his planes anything. Nobody could track his airplanes. He didn't have an airline, like. The embassy was always trying to run him down. It was funny." Asked for other sources, Parks says, "Anybody who would know would give you the same answer I would."
Then he refers a reporter to General Aderholt, who he says also observed Houghton from the U.S. Embassy in Bangkok. Aderholt went on to become commanding general of the U.S. Military Assistance Command in Thailand, and, with General John K. Singlaub, ran covert air operations throughout the Vietnam-Laos-Thailand war zone. Retiring from active duty after the war, generals Aderholt and Singlaub took command of various right-wing paramilitary groups in the United States.
During the mid-1980s, when the Reagan administration was barred by Congress from supplying and directing Contra rebels trying to overthrow the Government of Nicaragua, but was determined to do so anyway, Generals Singlaub and Aderholt played important roles in keeping the Contra rebellion alive. Though they were supposedly working through private channels, their efforts were coordinated by the White House through Lieutenant Colonel Oliver North, and the source of their funds was open to question during the Contra scandal investigations of 1987.
Aderholt seems to have been in good position to know what was going on in Southeast Asia during Bernie Houghton's days there. Aderholt had combined his air force career with work on the side for little airlines and medical relief agencies overseas, creating the aura of someone involved all along in private "front" operations for the CIA or some related U.S. intelligence agency. But Aderholt's recollections of Houghton contradict with the accepted chronology of Houghton's life.
Bernie Houghton? "There was a guy named Bernie Houghton with the Nugan Hand Bank," Aderholt says. But Nugan Hand wasn't officially chartered until 1973, and really didn't begin to burgeon until 1976-well after the time Parks said Aderholt had encountered Houghton in Thailand during the Vietnam War. It was even after Aderholt had supposedly retired from the air force. But Aderholt is vague on dates.
"I had lunch with him," Aderholt recalls. Describing the lunch, he continues to set off alarm bells. Also present, he says, was an American named William Bird. Bird, the reporter knows, was the almost legendary operator of a seat-of-the-pants southeast Asian airline called Bird Air, and was involved with other concerns linked to U.S. military and secret paramilitary involvement there. Although Bird's precise relationship with the CIA has never (to the author's knowledge) been publicly documented, he is widely believed to have had such a relationship for many years. [4]
"Mr. Bird and I had run an airlift out of Bombay," Aderholt continues. "Houghton was with a company in Bangkok [Aderholt names a company, the Alkemal Company; it couldn't be located]. He was interested in opening a restaurant in Bangkok." Aderholt also confirms that William Young, who worked briefly for Nugan Hand in Chiang Mai, Thailand, was for many years a CIA agent (more on Young later). But Aderholt says he is unable to supply further information or leads on Bernie Houghton.
Looking into Houghton's past, all you can come up with is mystery. "He was doing something in Vietnam, but he won't say what," says Houghton's lawyer in Sydney, Michael Moloney. "Nobody really knows. He won't talk about his past."
***
Even for those who enjoy fairy tales, the available version of Houghton's first weekend in Australia may seem fanciful. Supposedly he was broke and on the street. The police task force report says, "Asked if he had had introductions to Sydney people on his arrival in the city, Houghton said, 'No.'"
But through a deus ex machina unworthy of a made-for-TV movie, the story has Houghton quickly falling in with a circle of Australia's leading businessmen. They were friends and business associates of transportation tycoon Sir Peter Abeles, who owns Australia's biggest trucking, shipping, and airline companies.
Sir Peter's shipping and trucking operations extend to the United States and throughout the world. Publishing and television tycoon Rupert Murdoch, perhaps Australia's premier international citizen, is Sir Peter's sometime bridge partner. Murdoch is also Sir Peter's 50-50 partner in ownership of Ansett Airlines, Australia's biggest.
Among the circle of business and card-playing associates of Sir Peter's, besides Rupert Murdoch, are another Knight of the Realm, Sir Paul Strasser, and John Charody, who, with Strasser, was involved in some real estate development companies and an oil company based in Sydney. Sir Paul remembers the weekend in January 1967, when "a friend, I can't remember who" brought Houghton into the coffee shop where Sir Paul was sitting.
Houghton told police that the "friend" was the manager of the not-particularly-elegant hotel Houghton had happened to check into. The hotel was in the honky-tonk King's Cross section of Sydney, a district of B-girl bars and sex shows, where Houghton would eventually become the impresario of U.S. military Rand R. What landed him at the King's Cross Hotel just off the boat? And what led him to immediately seek the hotel manager's help in finding work? Unan swered questions. But it is doubtful that everyone who stumbles into the King's Cross finds himself having coffee a few hours later with a knighted multimillionaire tycoon like Sir Paul Strasser.
Sir Paul remembers [5] that Houghton was described as just out of Vietnam, flat broke and desperate. "Somebody who couldn't find work, he didn't have any money," Sir Paul remembers. Yet, says Sir Paul, Houghton "gave as a reference two high-ranking army people. Admiral Yates was one. Yates gave him an excellent reference." [6] So Sir Paul agreed to take Houghton on as a condominium salesman for one of his development companies.
The police had asked Houghton who his references were, and he had replied, "I'm sorry, I don't remember." But Sir Paul told the police that he sent two telex cables to verify Houghton's credentials, "one to the military in Hawaii and one to Washington.... Both cables were sent to army departments." The replies, he said, "were in glowing terms."
Later, Sir Paul said, Houghton introduced him to both General Black and Admiral Yates. Sir Paul became convinced that Houghton had a "top connection with the U.S. administration." Sir Paul has also told Australian reporters that Houghton was recommended to him by CIA associates and a "top politician in Washington."
This was a pattern that almost everyone around Houghton noticed quickly. As Sir Paul put it, "He was connected with top army people. I have no doubt about that. He was very close to the American embassy. I was once invited by him to the American embassy and he introduced me to all the top people. When [U.S.] senators or top officials came to town they would always see him. I heard he got flights to the States on U.S. military aircraft from Richmond Air Base [in Australia]."
"All the time I asked him about Vietnam," Sir Paul recalls. "But he didn't want to talk about it. He was the best salesman I ever had in my life. I always wondered. He came in literally without a penny in his pocket. I had to give him a loan on Friday [to tide him over] till Monday morning."
***
Houghton's arrival in Sydney in 1967 could not have been better timed for him or the military. The Bourbon and Beefsteak was soon overflowing with incoming shiploads of America's fighting men, and with the prostitutes they picked up in the neighborhood. Houghton soon opened two similar establishments nearby: the Texas Tavern, and Harpoon Harry's.
Because "loose lips sink ships," and because the toughest front the Pentagon had to face in the Vietnam War was in the press back home, Washington doubtless would have wanted eyes and ears on its vacationing troops. As much as their play could be controlled, Washington would have wanted to control it. And no one was better positioned to do that than Bernie Houghton.
Houghton became close friends with Lieutenant Colonel Bobby Keith Boyd, whom the U.S. Army assigned to be commanding officer of the Rand R center in Sydney. Houghton told police, "We are both Texans and that automatically makes you friends."
Besides being a Texan, Boyd had been a former U.S. embassy military attache in Latin America, among other assignments. The prime minister's police task force concluded thus about him: "It would be extremely naive to suggest that with a military career of this type ... that Boyd was not closely allied with U.S. intelligence, if not more directly involved." In 1971 Boyd resigned from active duty-and went to work helping Houghton run his bar-restaurants. He also occupied various positions in the corporations Houghton set up as holding companies.
During Rand R, Houghton received all sorts of special benefits. When the troops came to port, Sydney residents recall that Houghton was sometimes helicoptered out to the flagship to greet his prospective customers and meet their commanding officer.
And as Houghton grew bigger and more visible, so did his friendship with Michael Hand.
***
Despite his denials, a circumstantial case has been made by some that Bernie Houghton was wearing the cloak of patriotism as a U.S. intelligence agent. The case is furthered by his otherwise hard-to-explain relationship with the Australian Security Intelligence Organization, a government agency best known to Australians by its acronym, ASIO. While doing for Australia some of the work that the CIA does for the United States, ASIO also functions domestically, much as the FBI's counterintelligence branch does in the U.S.
ASIO's name showed up when, after the collapse of Nugan Hand, Houghton's immigration file was investigated. Curious references were found both by the police task force and by the local press, which obtained documents through devices of its own. It was learned that on October 21, 1969, ASIO had given Houghton a security clearance; this was after he applied for permanent residency status in Australia.
Then, on February 12, 1972, ASIO did Houghton a very special favor. He had been traveling abroad-to "Saigon to check on the feasibility of buying surplus war material," he later explained. But he had neglected to obtain a re-entry visa for his passport. His original Australian visa had expired November 10, 1971. In the palaver at the airport immigration desk, he gave the officers two references, who quickly saw to it that he was admitted. One was John Charody, Sir Paul's business partner.
The other was Leo Carter of ASIO-not just an ordinary ASIO agent, but the director of ASIO for the whole state of New South Wales, the largest in Australia. Why did one of the handful of top intelligence officials in Australia, one who had direct contact with U.S. intelligence agencies, personally take time out to clear a simple barkeep for admission to Australia? Carter cannot be asked; he died of a heart attack in 1980. The immigration officer who signed Hough" ton in died the same year.
ASIO declined to talk about it with a reporter. In a written statement to the police task force, ASIO said it couldn't explain "the apparent references to ASIO on Bernie Houghton's Department of Immigration papers . . . since he does not appear in our records. . . . It is only possible to speculate that Carter may have known Houghton privately as a restaurateur," ASIO said.
Maybe-except that when the police task force asked Houghton if he knew an Australian named Leo Carter, he replied, quite unequivocally, "No."
Not only did Houghton get admitted to Australia on Carter's word, he also received an immediate and very special "A" stamp -- permission for unlimited re-entries to Australia in the future. One can imagine the embarrassment of the immigration officer who dared question Houghton as he went through the. line, only to have senior government and business leaders roll out the red carpet for him on receipt of a telephone call.
Another item stands out from the police task force's report on Houghton's immigration file. There are records of Houghton leaving Australia only twice in the early years he was there. Yet if the recollections of the former U.S. military officers in Southeast Asia are correct, he must have been gone more than that. The story, relayed by Sir Paul Strasser and others, that Houghton flew in and out from a military air base on U.S. military aircraft provides one possible explanation. His apparent connection with ASIO provides another.
***
Nor is it likely that the regional head of ASIO, along with assorted generals, admirals, high-ranking senators and congressmen, U.S. Embassy officials, and two CIA station chiefs in Australia (Milton Corley Wonus and John Walker), all of whom socialized with Houghton, did so because of his establishments' haute cuisine and ambiance.
His Texas Tavern and Harpoon Harry's have long since folded, but around the corner from their old locations the Bourbon and Beefsteak, where all the dignitaries came to dine, still swings. Just inside the doorway to the left of the entrance are women in thick makeup, tight tops, miniskirts, and fishnet stockings. You know why they're there.
In the doorway to the right of the Bourbon and Beefsteak, through the dinner hour and late into the evening, stands a barker. Sometimes it is a man, sometimes a woman, but always the barker is advertising a sex show that occurs at the top of the stairway behind him. During the show, the barker says loudly enough for anyone entering the Bourbon and Beefsteak to hear, you can see "two young Asian girls shooting Ping-Pong balls out of their pussies."
Inside the restaurant, the lighting and furnishings are reminiscent of a steakhouse not exactly like, say, Christ Cella or Peter Luger, but more like, say, Tad's. So are the steaks--thin and greasy. No one but a sailor long marooned at sea would ever come here for the food. If there is one thing Sydney abounds with, it is truly wonderful places to eat, with seafood and fine local wine that thrill the palate and well occupy the expense account; the Bourbon and Beefsteak is not, by any stretch, one of those places.
***
Operating the most notable bars in King's Cross, where the biggest rush of customers in years scooped up every prostitute in sight and sought every form of vice that could be crammed into a weekend, Bernie Houghton probably needed approvals that even the U.S. and Australian Governments were unequipped to provide. Abe Saffron, the local version of the Mafia, has long run King's Cross the way that Matthew ("Matty the Horse") Iannello runs Times Square in New York.
The police task force described Saffron as "a man who by reputation has for many years dominated the King's Cross vice scene. He has been described in the Parliament of this State [New South Wales] and elsewhere as 'Mr. Sin,' and is reputedly involved in vice and other questionable activities in other states of this country.... His activities are carefully hidden behind complex corporate structures."
Judges and state governors have attested on the record to the foulness of Saffron's character, and to his role, in the words of the South Australia attorney general in 1978, as "one of the principal characters in organized crime in Australia." In a cover story headlined "Who Is Abe Saffron?," the National Times, a major Australian newsmagazine, said in 1982, "The New South Wales Licensing Courts over 30 years have heard police officers rise to their feet to argue against Saffron, his family or associates getting one more liquor license-yet he and his associates still own or control a string of licensed bars, restaurants, clubs and hotels throughout the country."
The article noted that Saffron hadn't been convicted of a crime since 1940-but then, of course, close to the same could be said until recently of Matty the Horse.
Saffron became front-page news in Australia in 1982 for two reasons. One was his meetings with high-ranking police officers caught up in a corruption scandal. But his name also kept cropping up in the Nugan Hand affair.
A royal commission assigned by Parliament to investigate crooked unions was pursuing a former Nugan Hand executive, Frank Ward. The commission turned up a memorandum written to Ward by an associate at Ward's new investment bank: "Abe Saffron phoned 8:30 A.M.-is in city-has balance sheets-wants to settle Friday. He confirmed in no uncertain terms that the fee . . . is agreed at 5 cents. I have enough regard for my knees to agree! ... I/we should clarify today to avoid future problems-physical or financial."
Before the ink from the resultant headlines had dried, news came that the police task force investigating Nugan Hand had uncovered another memo regarding Saffron. It was clearly in Michael Hand's handwriting, and said: "$50,000 Aust in H.K. to be repaid at $5000 per month for 10 months. It is Bank T.N.? Call 322215. Abe Saffron. Referred by Bernie Houghton. regarding yesterday's discussion -- ABE SAFFRON."
The phone number 322215 was Saffron's headquarters.
The memo had been produced by former Nugan Hand executive Stephen Hill, who was giving investigators selective information to try to save his skin. Hill said he had no personal knowledge of the transaction referred to in the note. (Hand and Houghton had both left the country for undisclosed locations when the investigations began.) Hill said he kept the note because "I was interested in what association Saffron had with Hand."
Asked if the note indicated that Saffron wished to transfer $50,000 in Australian money overseas-the kind of illegal deal Nugan Hand specialized in -- Hill replied, "That may be the case." He said, "T.N." may have referred to Treasury note, and "H.K." to Hong Kong.
Houghton's acquaintance with Saffron should have come as a surprise to no one. It seems unlikely that Houghton could have moved so heavily into the King's Cross vice district without making his peace with Abe Saffron. The buildings where Houghton's restaurants were housed had a tangle of corporate owners, but two were connected to associates of Saffron. Furthermore, the soldiers who flocked to Houghton's drinking establishments were referred for further recreation to Saffron's nearby gambling dens. When one of these dens, the Aquatic Club, declared bankruptcy in the mid-1970s to escape paying creditors, it was kept in operation by a new team of owners, including Houghton.
Houghton admitted to the police task force that he had known Saffron for many years "as a result of visits by Saffron to the Bourbon and Beefsteak restaurant." Houghton told the cops, "I would have a social drink with him. Our interests in the restaurant [business] are mutual." But, the task force report said, "Apart from one instance, unrelated to this inquiry, Houghton said that he was unable to recall ever having had any business dealings with Saffron."
Houghton recalled luncheons at which he had introduced Frank Nugan, and "visiting military personnel," to Saffron. Whether the "visiting military personnel" knew exactly whose hand they were shaking when they met Abe Saffron isn't spelled out, but the contact alone could have been embarrassing for some, if publicized. Houghton also said that Mike Hand met Saffron "under similar circumstances," after which "they had a very casual relationship."
Saffron, however, denied to the police that he had ever met Hand, and said he met Nugan only once, socially. Commented the task force, "This claim is, of course, irreconcilable with the statements of Houghton."
The police task force showed both Houghton and Saffron the memo from Michael Hand about the $50,000. "Each denied any knowledge of it," the task force reported. Saffron denied he had ever had "any association with the Nugan Hand group of companies," and Houghton said he wasn't aware of any.
The task force concluded, "It is not clear from the note whether the money was 'loaned' to Saffron or was paid by him into Nugan Hand, but there is little doubt that Saffron was at one time involved in at least this one transaction with Nugan Hand.... That at least Saffron chose to lie about his association with Hand, and both Houghton and Saffron chose to lie about the transaction, only adds to suspicion that there was something either illegal or improper about it," the task force said in its final report to the prime minister and governor.
That report went on:
"A number of observable strands existed within Nugan Hand.
"First ... there is some evidence that Hand retained with U.S. intelligence personnel ties throughout the 1970s and into the 1980s.
"Second, on the evidence available there is little or no doubt that Houghton was until at least the early 1970s and perhaps is involved, in Australia and elsewhere, in some way with U.S. and Australian intelligence personnel.
"Third, Houghton was and still is closely associated with two other U.S. citizens resident in Sydney. Both have military backgrounds and there is strong reason to believe that at least one of them, Bobby Keith Boyd, was in the 1960s-70s and perhaps is still connected in some way with U.S. intelligence activity. The other, Robert Wallace Gehring, if not at that time then later, became exposed to intelligence personnel through his close association with Houghton, Boyd and Hand, and his later role in the 'disappearance' of Hand from Sydney.
"Fourth, Houghton and Hand were extremely close by the early 1970s and there is every indication that Hand regarded Houghton as a 'father figure.' More probable than not it was because of Houghton's U.S. armed services and intelligence connections that Hand regarded him so highly. It was frequently said that Hand's view was that 'anything is all right so long as it is done in the name of America.'"
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Notes:1. Thanks to an unidentified researcher for the National Times of Sydney, Australia, who dug all this out in 1981, making it much easier for me to verify later. The researcher also reported talking to former neighbors, who "have only fond memories of Hand, his father and his mother."
I tried to augment the researcher's findings, but was blocked by the New York City Department of Health, which suddenly, in 1986, perhaps because of pressure from the families of AIDS victims, banned public access to previously available death records. These records clearly seem public under the state's open information law, but there wasn't time to fight that legal battle before publication.
2. Alvin York of World War I, probably the greatest noncommissioned combat hero the United States has had.
3. Like the Sergeant York comparison, the remark must be recorded as of questionable accuracy.
4. Bird was always in some other country when the author tried to find him, both in the United States and in Thailand.
5. In telephone interviews with the author.
6. Yates denies knowing Houghton. that long ago.