The Taking of K-129

by Josh Dean

  And in fact it wasn’t. The Times story really began with the June 1974 break-in at the Summa office on Romaine Street, and that was obvious from the text. “Confidential files on the operation” were “believed to have been among” those stolen in the robbery, the LA Times story reported, and the thieves had singled them out in the hopes that the US government would pay the 1-million-dollar ransom for their safe return.

  Colby explained that when word reached the CIA that the files had allegedly vanished—files that really consisted of a single handwritten document that may or may not even have existed—he ordered his West Coast security staff to brief the FBI agents working the case, to alert them to the sensitivity of this document, and to ask them to make sure that the LAPD understood that if this document were to surface, it must be kept secret at all costs.

  Well, the FBI did brief the LAPD detectives, who listened and then did the complete opposite of what they were asked; they let the murky story behind the document slip out, and Farr got a tip about it from a contact at the district attorney’s office while reporting another story. With little more to go on than that rumor, Farr and Cohen spent several months on the investigation and managed, by February, to piece together a story with a basic premise juicy enough to occupy nearly the entire front page—even though beyond the CIA–Hughes connection, there was virtually no actual detail on the mission or its target.

  By the time the story reached Colby, it was too late to do anything. He raced back to Langley after the White House meeting and called the West Coast program office on the Donald Duck phone. The security officer on duty ran to answer the squawk.

  Colby ordered two security men to go straight to the LA Times office and tell the paper’s editor, Bill Thomas, “anything he needs to know about the program to stop publication.” The director said that he would call Thomas himself to alert him that they were on the way but that he wouldn’t be able to make a case himself because the Times didn’t have a secure line.

  The security officers arrived at the paper’s downtown headquarters and found that Thomas had already spoken to Colby. He knew that the CIA wanted him to kill the story and that the men had come to provide the reasons for this unusual request. Thomas, in his third year leading the powerful daily, was friendly and receptive, and when the two men told him that the operation was very much still in play, he agreed that this was a time when national security trumped news. But it was also too late—the late edition, with the story splashed across the front, had already been printed.

  What Thomas could do was downplay the story in the next day’s early edition and then drop the paper’s coverage. And that’s what he did. The next morning, a smaller version of the story appeared deep inside the front section, on page A18. There was no further coverage.

  Late on Friday, Colby heard from The New York Times. That paper was also preparing a story, based mostly on the LA Times’ reporting, and because it wasn’t scheduled to run until Saturday, Colby still had time to act. He traveled to New York and met with the paper’s publisher, Arthur Sulzberger. The situation there was a repeat of that in Los Angeles: Sulzberger told Colby that it was too late to fully kill the Times story but that it could be buried. It ran on page 30.

  The director wasn’t yet panicked. He strongly believed that if he could stifle the story fast, after just these two small leaks, the Soviets might miss it. So once he had successfully squashed the story at two of the country’s largest dailies, he sat back and waited for the blowback.

  • • •

  Almost immediately, the phone began to ring at several outposts of the Hughes empire. Paul Reeve, in Houston, was besieged with inquiries, and he had no idea what to say. He consulted with the Agency and also called Hughes’s personal PR rep, Arelo Sederberg. Sederberg was dumbstruck by the story. He’d been out dutifully trumpeting the Explorer and his boss’s experimental mining effort for more than two years, one of the few Hughes business ventures he was allowed (and even encouraged) to promote in the media. He was one of the only top Hughes deputies who hadn’t been told the truth, which made him a valuable part of the cover. “I was on a last-to-know status for the project,” he later wrote, “since in innocent ignorance, I could boost it as a commercial venture.”

  He hadn’t heard a word about the submarine salvage until William Farr called him the night before the story published and asked, obliquely, what he knew about the Glomar Explorer. A true PR man, Sederberg replied with a florid sales pitch of the ship’s remarkable innovation and the new industry it would help create. “Okay,” Farr replied. “Get what you have on it to me.”

  When Sederberg saw Farr’s story, he didn’t know what to think, and when Reeve called him for advice, it seemed like Summa’s mining operations guy was also confused. When Sederberg asked what he was telling reporters, Reeve replied, “I wish they’d go sit on a tack.” Reeve was playing dumb, and the two decided that the best way to respond was to discredit the story based on one of its central—and clearly incorrect—facts, that the Explorer had participated in a submarine salvage operation in the Atlantic Ocean. Maybe there had been a secret salvage, he would say, but it wasn’t our ship. We’ve never left the Pacific Ocean.

  Reporters liked Reeve. That was a big reason Walt Lloyd made him the single point of contact for the media. “He was accessible, friendly, and quotable,” according to Sederberg. And reporters in this case seemed to believe him, or at least were confused enough by what he was saying—that the ship never went east—that the Times story seemed murky and possibly just wrong. Even Sederberg was convinced, and he and Reeve doubled down on the mining story. “We insisted that the Explorer was a commercial mining venture,” he later wrote. “No dark lanterns or eye-shaded CIA operatives lurked around it.” This tack, he says, “added to the confusion, which perhaps was what the CIA wanted. When lies and deception no longer work, confusion might.”

  • • •

  Many of those inside the program who saw the paper were certain that this was the end of Azorian, but Colby wasn’t so sure. His hope was buoyed by a similar incident from the past: During World War II, a front-page story in the Chicago Tribune revealed that the United States had broken Japan’s top secret Navy code, and the story caused President Roosevelt to go bananas. But the Japanese either didn’t see the story or didn’t believe it, because they never stopped using the code, and the United States continued to intercept and crack messages until the war’s end.

  Colby felt there was a chance for a similar result here—that either the Soviets wouldn’t see it or they’d discount the report as ridiculous, which wasn’t just wishful thinking since the Los Angeles Times story hadn’t even named the right ocean. “There was a real chance that the stories would be dismissed as just another of the hysterical tales about the CIA then crowding the press,” Colby later wrote in his memoir. “And if the Glomar was careful to follow the manganese-nodule-collection scenario it could even escape another close inspection next summer.”

  What worried Colby more were the other investigative reporters who would notice this tantalizing story appear and then vanish literally overnight. In particular, he was concerned about Seymour Hersh, who had promised him nearly a year before to sit on his investigation only as long as no one else was reporting on it. Now Colby could no longer make that case.

  For the next few weeks, during the most tumultuous period of his directorship—as the Rockefeller Commission and Church Committee began to ramp up on Capitol Hill, probing alleged nefarious and possibly illegal activities by the CIA—Colby said, he “raced around from newsrooms to editorial offices to television stations, trying desperately to plug any leaks on the story and feeling as if I were rapidly running out of fingers and toes with which to do the job.”

  Everywhere he went, the director ran into reporters and editors whose skepticism of the US government, and especially the CIA, was at an all-time high. The ripples of Watergate were still sweeping through
Washington, and Colby’s own revelations about the “family jewels” had made distrust of the CIA even worse. He made a bold decision to try to counter those feelings. The director knew that legal action to stifle further stories about Azorian would be unpopular and was likely to fail. It might actually piss off and embolden reporters like Hersh. The only way to stop the stories, he decided, was to treat the editors as equals—as Americans who could be trusted with sensitive material.

  Colby was parsimonious with specifics, but he shared classified details with editors at twelve different publications, including the LA Times, The New York Times, and The Washington Post. As he later explained in his memoir, “I took the gamble of responding to their questions to the minimum degree necessary to show my good faith, and only then, when I was sure they comprehended the seriousness of it, did I request that they hold back stories on the Glomar. In practically every instance, my urgings paid off and the press held back.”

  The director’s frantic road show resulted in agreements from the LA Times, The New York Times, The Washington Post, Newsweek, Time, and Parade. In each case, Colby successfully argued that printing stories about Azorian—a name he never revealed—would cause the entire operation to fall apart, putting valuable intelligence critical to the US national interest at risk. The Washington Post’s Katharine Graham told Colby that “it is not anything we want to get into” and that “we have no problem not doing it,” but admitted that other Post reporters could be working in secret and that it was possible, even likely, that she wouldn’t yet know about their projects.

  One of Colby’s most challenging encounters was with Parade writer Lloyd Shearer, who called the director shortly after the LA Times story to inquire about something called Project Jennifer.

  At the mention of that name, Colby bristled. “We can’t discuss this on the telephone,” he said. “I’ll have someone out to see you in a few hours.”

  Shearer slowly came around. “You are onto something very, very delicate,” Colby told him on a subsequent call, after the writer had been briefed. “This one I really would like you to sit on.” When Shearer warned the director that “entire news bureaus” were aware of the story, he replied that a cooperative media would later be rewarded in other ways. “And that is, I suspect, the best story—maybe in a year or so—the performance of the press,” he said. “It will make a hell of a story, and I would be the first to give it.” Later, Shearer told a lower-ranking Agency representative who’d called to follow up, “If he contains it, all you guys should be given a Medal of Honor.”

  Every time an editor or reporter agreed to sit on the story, Colby added his or her name to a list that he carried in his wallet—a list of people who would be called and told to go ahead with their stories the minute the cover was blown.

  On February 19, an official Agency memo summed up his success: “To date, all of those in the mass media who have been briefed and whose cooperation was solicited have honored their commitments.”

  63

  More Legal Troubles

  JANUARY 1975

  LA County tax assessor Philip Watson looked up from his desk in the Hall of Administration in downtown Los Angeles to see an FBI agent he knew walking into his office along with four men in suits, three of whom he’d never seen before.

  “These men are representatives of the Central Intelligence Agency,” the agent said quietly, then left the office, shutting the door on his way out.

  Watson was preparing his case against Howard Hughes’s Summa Corporation, which he was still sure had been ignoring a large tax bill it rightly owed on the massive mining ship that had been docked at Long Beach on and off for more than a year.

  The four men introduced themselves as David Toy, Steven Schoenbaum, Clinton Morse, and George Kucera. Two were locals—including Toy, a lawyer whom Watson had previously met—one was from Houston, and the fourth said he’d come from Washington, but he offered no business card or other identification.

  The man from Houston was Clinton Morse, a partner in a law firm who had come to represent Summa. Dave Toy was there to represent Global Marine, and Schoenbaum and Kucera were both with the Agency.

  “We’re here today to talk about the Hughes Glomar Explorer,” Schoenbaum said, assuming the role of spokesperson. “To acquaint you with certain facts concerning its ownership.”

  He snapped open a briefcase and withdrew a short stack of paper.

  “Before we go any further, you need to sign this,” Schoenbaum said. He placed a piece of paper with an embossed seal that Watson couldn’t immediately identify on the table. On the top were the words SPECIAL PROJECT SECRECY AGREEMENT. It went on in very clear language to lay out the terms that the person signing this paper was agreeing to. He was being cleared to receive information that was beyond top secret, and if he signed it and later disclosed that information, he was subject to prosecution under the espionage law (title 18, sections 793 and 794).

  Watson scanned the paragraphs, one of which said: “I have also been informed that extraordinary security measures and controls have been established to protect Project information and that access to such information is restricted to those who ‘must know’ based upon their present position.” He told the men that he was confused. He understood the Glomar Explorer to be a mining vessel owned by Summa worth 40 million dollars, and based on this, the company owed his county taxes—lots of taxes.

  “The Glomar Explorer is and always has been the property of the United States government,” Schoenbaum replied. “It is not owned by Summa Corporation, nor has it ever been operated by Summa Corporation, despite the fact that official documents—documents you’ve seen—state precisely that.” Summa, Schoenbaum explained, was acting as an agent for the government, on a classified project. “It’s our desire to cooperate in any way we can to protect the secret project and at the same time prevent embarrassment for your office or the city of Los Angeles.”

  Watson nodded. “Okay.”

  Schoenbaum handed the tax assessor a photograph of the HMB-1 and told him it was a “submarine tractor,” used in conjunction with the Glomar Explorer. It was a submersible barge, containing “electronic gear and other equipment which is used on the ocean floor.” He said that the barge could also be used as “a storage bin for materials that have been picked up from the ocean floor.”

  “This barge is owned by the Lockheed Corporation,” Schoenbaum said. “And your equivalent in San Mateo County, where the barge is based, has assessed a tax of 1 percent of its full cash value as an oceanographic research vessel pursuant to Section 227 of the California Revenue and Taxation Code.”

  Watson nodded, a little puzzled. He didn’t quite know what the man was getting at.

  The men would prefer Watson not tax the Explorer at all, but if he insisted, he should follow the lead of San Mateo.

  “Assess taxes at 1 percent of the full cash value,” Schoenbaum said, as he reached into a briefcase and pulled out a small, clear container about the size of a box of checks and handed it to Watson. Inside, a lump of black rock had been mounted.

  “That’s a manganese nodule,” Schoenbaum said. “The Glomar Explorer sucked that up from the floor of the ocean, 17,000 feet down. There aren’t many of these. And there never will be, at least from the Explorer. We went out with another ship and collected just enough to convince people that this is something Howard Hughes was really serious about.”

  He produced a flyer from Sun Shipbuilding welcoming the recipient to a “Family Day, featuring the launching of the Hughes Glomar Explorer, constructed for Global Marine.” The flyer gave the ship’s remarkable specifications and listed a few notes, the first of which was this: “The HUGHES GLOMAR EXPLORER is a deep ocean mining vessel built for Hughes. When delivered, Global Marine will operate the 51,000-ton ship.”

  “Actually,” Schoenbaum said, “the Glomar is worth about $300 million and we”— meaning the CIA—“had it bui
lt for laying sensors on the ocean floor.” These sensors, he explained, were designed to detect the test launch of Polaris-type missiles, fired from submarines, as well as other ship movements and activities.

  Watson was surprised by this. He didn’t actually need to know the true purpose of the ship’s secret work in order to waive the taxes; he needed only to know that it belonged to the US government.

  Most important, the man said, Watson couldn’t mention this actual value to anyone. The boat’s true cost was such an unusual—even outrageous—figure that public disclosure would certainly arouse suspicion. “Somebody is going to ask, ‘Who the hell owns a $300 million boat?!’”

  The man from Washington had been sitting quietly, but he spoke now. “Mr. Watson, we need your help here,” George Kucera said. As Azorian’s contracting officer, he had executed the original arrangements between the Agency, Global Marine, and Hughes. “We need you to trust us that this is not Howard Hughes’s ship. It belongs to the United States government. Summa Corp does and should not owe any taxes to Los Angeles County.” As a result, no one was going to pay the 25 percent tax that a typical commercial ship owner would owe. If necessary, the government would pay the same 1 percent rate paid to San Mateo County, based on a rate granted to privately owned oceanographic vessels conducting scientific research.

  “But if it’s a government-owned ship, you don’t need to pay any taxes,” Watson replied.

  Kucera smiled. “I know. But it’s not a government-owned ship.” He held the silence after that statement a few seconds to let Watson absorb the subtext. “It’s a mining research vessel and its owners should pay their fair tax.”

  Watson got the message. The Agency was asking him to play along with a story, the story he’d already fallen for when he went after Howard Hughes for unpaid taxes. He laughed. “I have to say this is the first time in my career as a tax assessor that anyone offered to pay me taxes they don’t owe.” Watson said that he was willing to accept the men’s explanation, but he wanted a letter from the Agency—or from some federal agency—stating that the ship in his port belonged to the United States and not to Howard Hughes.