Bad boys, part two: Scientology’s involvement with drug smugglers had a long legacy

Yesterday, historian Chris Owen explored how Scientology’s Guardian’s Office mounted a secret intelligence operation in cooperation with US Customs to break up an international drug smuggling ring involving ex-Scientologists and two Sea Org vessels. Today, he continues the story with a look at the fate of the man at the center of the operation, ex-Sea Org member Jerry McDonald, and why Scientology remained under investigation for smuggling.

The Makaira was raided by eight federal, state and Marin County narcotics agents on July 15, 1970 while at anchor in San Rafael in Marin County. The authorities had suspected that it was being used to smuggle marijuana but found, in addition to a very small quantity of the drug, an arsenal of firearms comprising 35 handguns, eight rifles and shotguns, a teargas gun and two AR-17 shotguns, most of them loaded. A large quantity of ammunition and a US Army sniper scope were also on board. The seized weapons were valued at $85,000 and had recently been stolen at a Garden Grove pawnshop. It was suspected that they were being trafficked to Mexico to exchange for marijuana. McDonald and five other people on board the Makaira were arrested.

Despite the finds, McDonald was cleared of all charges after a court ruled that the district attorney’s office had not presented enough evidence to hold him for trial on stolen property and weapons charges. Charges were dropped against the rest of the crew at the request of the district attorney’s office and guilty pleas were set aside. It seems likely, from what subsequently happened, that McDonald was being protected because of his value as an informant against higher-value targets. However, McDonald did not get the Makaira back; the vessel was seized by federal authorities and disposed of at auction in Los Angeles in May 1971.

A few days after McDonald was cleared, he testified before a Marin County grand jury. It indicted a Sausalito attorney, Michael Henry Metzger, who had been arrested on drugs charges relating to the illegal possession of marijuana, hashish, cocaine and various other pills, tablets and gelatin squares of suspected dangerous drugs. The case against Metzger, whose home had been raided by drugs agents a few days earlier, was spearheaded by the Marin Drug Abuse Bureau. Metzger was a former federal prosecutor in San Francisco who had gone into private practice with a focus on defending individuals charged with drug offenses. He had built a reputation as a hard-nosed district attorney in New York for five years before moving to San Francisco, where he clashed with local drug enforcement officials.

The Marin Drug Abuse Bureau recruited McDonald as an informant, paying him $25 for the “Metzger job.” According to later testimony, McDonald had been brought to the office of the Marin Drug Abuse Bureau by state narcotics agent Gerritt Van Raam three days days before the raid on Metzger and had phoned the attorney from there. McDonald swore in an affidavit that Van Raam promised to dismiss all criminal charges against him if he got information that would aid in the arrest of Metzger. McDonald was wired for sound and obtained access to Metzger’s home by telling him that he wanted to hire Metzger as an attorney. He claimed that he had seen Metzger offering marijuana to house guests and using it himself. McDonald offered to take the Makaira to the Greek island of Crete to aid the escape of five Americans, who had been arrested for smuggling drugs from Turkey and were awaiting trial. The five were being represented by Metzger, who said that he had rejected McDonald’s proposal.

Metzger’s lawyers claimed the raid on the Makaira was staged to provide a pretext for the later raid on Metzger’s house, and that the whole affair had been cooked up by Van Ramm as revenge for Metzger’s work in defending accused drug offenders. Metzger admitted smoking marijuana but claimed that the other drugs found in his house had been planted. The prosecution was eventually halted and he was instead given a year’s probation in September 1973. The charges were finally dismissed in March 1974. He continued to practice as a lawyer until at least 1992.

The GO’s ambition to use the affair to produce a “D.A. document” was frustrated when Agent Joel M. Taylor of the Department of Justice produced a letter of commendation that did not quite meet Scientology’s requirements. It was a fulsome letter of thanks but omitted one very important point – it thanked Terry Milner personally for his “untiring efforts, assistance and cooperation of [sic] January this year” but made no mention of Scientology:

Through your own efforts and those of your associates, we have been successful in a number of criminal prosecutions. In these parlous times it is a welcome relief to find citizens who are so willing to come to the aid of law enforcement agencies; especially when that aid is as able as yours has been. As you know, the war against crime is a cooperative venture, and all honest citizens should be heartened when the private and public sectors of our society work together to achieve the kind of success which we have enjoyed.

As a result of the lack of any mention of Scientology, the GO’s PR section did not want to make use of the document and no dead agenting was done. The omission was almost certainly an unintended consequence of Milner’s own cover. He was in an awkward position as the head of the US branch of a secret intelligence organization that, even then, was targeting the same US government from which it was seeking to obtain a commendation. He could hardly admit to the government that he was the head of a nationwide network of covert intelligence operatives. Instead, Milner appears to have presented himself as a private investigator operating as “TM Investigative Services” under an apparently genuine California PI license. The DoJ, not knowing any better, thus thanked Milner personally rather than Scientology.

Milner nonetheless attempted to redress the omission in the mid-1970s when the GO published a booklet giving “Evidence on Religious Bona Fides and Status of the Church of Scientology,” which was intended for the use of US government agencies and diplomatic services. It was intended to serve as a so-called “false report correction” to rebut uncomplimentary media articles and government reporting on Scientology’s activities. The booklet included an affidavit by Milner claiming that the drug smugglers had tried to link their activities to Scientology to undermine its drug rehabilitation efforts – Narconon had just been launched in 1969. He wrote: “The Board of Directors of the Church requested that I conduct an extensive investigation into the matter at the same time giving me leave to use their considerable resources as necessary. Their concern was directed to insuring that neither the Church nor its drug rehabilitation programs suffered a loss of repute. They also requested that I liaise with appropriate law enforcement, in this case Mr. Joel Taylor, so that effective use of information gained could be made.” This was quite likely mostly true, except that the request would have been made to Milner in his capacity as Scientology’s US intelligence chief, not as a Californian private eye.

Despite his links to organized crime, McDonald appears to have returned to Scientology, probably some time in 1971. He was no doubt motivated by his wife and children still being members; it was more remarkable that he was accepted back. He appears to have returned to his old job of training Sea Org recruits in its Pacific Flotilla. While his naval experience likely benefited the Sea Org, his presence may have caused Scientology more problems than it solved.

On January 19, 1972, Customs agents boarded another Sea Org vessel, the Asia (previously the USS Rexberg, and later renamed Excalibur), which was anchored in Los Angeles Harbor at the time. One of the agents had been involved in the earlier Long Beach smuggling case and recognized McDonald, who was aboard the Asia at the time. They searched the vessel and seized a gun belonging to McDonald. He was served a subpoena, ostensibly to provide further information on the earlier drug smuggling case. McDonald, however, claimed to have told Customs he would not testify without the Guardian Office’s permission. The same vessel was boarded again by Customs and Secret Service agents the following month and was searched for drugs. The two searches were a sign that Customs continued to suspect that Scientology was involved in smuggling. A year later, a member of the vessel’s crew reported that a friendly LA harbor patrolman had warned him that the Excalibur was still being watched by Customs because it was believed to be carrying contraband.

Customs were right about the smuggling, but wrong about what kind it was or how it was being carried out. The United Kingdom had imposed restrictions on currency exports in 1968, causing problems for the Sea Org fleet in the Mediterranean, which relied on cash to pay its bills. Money was couriered illicitly from Scientology’s lucrative operations at Saint Hill Manor in England by Scientologists travelling to join the fleet. One Sea Org member, Mary Maren, later recalled: “They gave me about £3,000 in high-denomination notes to take out to the ship. I hid it in my boots.” Mike Goldstein, who was appointed Banking Officer aboard the Apollo, recalled that there “were drawers full of money everywhere and more than a million dollars in the safe, but no proper accounts. We paid for everything in cash and were working with three different currencies – Spanish, Portuguese and Moroccan – and it seemed that if anyone wanted money for something they just asked for it.” The United States, too, had restrictions on exporting currency; amounts over $5,000 had to be declared. Not surprisingly, the UK and US authorities were suspicious of the sealed packages that were regularly being couriered to the Sea Org fleet. The British Inland Revenue and the American Internal Revenue Service were independently and simultaneously carrying out investigations of suspected money smuggling.

The IRS and Customs investigators had a breakthrough on April 9, 1974 when they received a taped interview between John McLean, a Canadian Scientologist who had left the Sea Org two years previously, and an IRS agent. On the same day and presumably as a result of what McLean had told them, the IRS’s chief counsel Lew Hubbard ordered that Customs was to intercept money being illegally exported to Madrid for use by the Sea Org. Customs undertook an investigation of Scientology for currency violations and the use of couriers to transfer funds illegally to Hubbard. At the same time, suspicions still lingered that Scientology was also involved in drug smuggling as a result of the McDonald affair.

The issue came to a head on October 30, 1974 when the Apollo headed for Charleston, South Carolina. The ship was supposed to arrive there unannounced but its cover was blown due to a communications mix-up; its band, the Apollo All Stars, inadvertently turned up ahead of it and publicized its arrival. A welcoming party consisting of agents from the Immigration Office, Drug Enforcement Agency, US Customs, Coast Guard, and US Marshals was assembled to wait for the ship. A local newspaper reported that there were “enough U.S. Customs Service agents in Charleston Wednesday to keep each of the crew members of the vessel Apollo under surveillance for possible drug smuggling, according to an official source. The customs agents had gathered here from as far away as California to keep watch on the Apollo which was suspected of carrying large quantities of narcotics.” The Guardian’s Office found out just in time and a frantic Mary Sue Hubbard persuaded her husband not to make landfall. Five miles out from the harbor, while still in international waters, the vessel reversed course and headed to the Bahamas instead.

Hubbard’s apoplectic rage at the incident can readily be imagined, and it had far-reaching consequences. Jane Kember, the deputy head of the GO, issued a Guardian Order (no. 1344) ordering the GO to begin a large-scale operation to “handle” Customs and the Coast Guard. It formed part of Scientology’s Snow White Program, the audacious plan formulated by Hubbard the year before to scrub government files worldwide of so-called ‘false reports’ on Scientology. The GO’s legal section was instructed to sue both agencies to obtain their files on Scientology, Meanwhile, the B1 intelligence bureau was told to “penetrate 11th District Coast Guard and obtain the files on Scientology, ships, LRH, etc.” Coast Guard Intelligence’s National HQ was also to be infiltrated and information exfiltrated. This was accomplished by September 1975 by a GO agent named Sharon Thomas. Two years later, when the infiltration plot was discovered by the FBI, Thomas and Kember were among the eleven GO officials indicted and eventually convicted of conspiracy against the US government. Mary Sue also went to prison, but Hubbard himself was only named an “unindicted co-conspirator.”

As for McDonald, he came to an untimely end – though not the kind that might have been expected for someone involved in the drugs trade. Having left Scientology again, he joined the US Army on July 22, 1983. Just two weeks later, on August 3, he died in an apparent accident and was buried in Arlington National Cemetery at the age of only 44.

— Chris Owen

 
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Chris Shelton on why people leave Scientology

Says Chris: ” This week, I answer a viewer question about the attitude of people leaving Scientology and how this relates to the abuses they have witnessed or engaged in as Scientologists. There were a couple of points I wanted to make about this, so instead of putting this in my regular Q&A videos, I put this video together. Am happy to hear feedback on this one.”

 
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Make your plans now!

HOWDYCON UPDATE

Hey, we’re less than a month away from this year’s HowdyCon in Chicago, June 21-23. As in past years, we’re looking forward to meeting readers of the Bunker, culminating in Saturday night’s main event.

The biggest difference this year is that our Saturday night event is separate from that evening’s dinner. Chee Chalker is setting up an inexpensive pizza dinner that you don’t need to pay for ahead of time, after which we’ll walk over to the theater where our event, hosted by Chicago Fire star Christian Stolte, will take place. Because it’s a separate event, we’re asking that you pay $10 each to get into the Saturday night event, which will help us recoup what the Bunker paid for the venue. (We have never made a penny on our HowdyCon meetups, we only try to break even.)

Please email your proprietor (tonyo94 AT gmail) in order to reserve your spot for Saturday night’s main event. Seating is limited, and we’re going to have some really interesting people on stage and they may make a few announcements that you don’t want to miss.

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Posted by Tony Ortega on May 31, 2018 at 07:00

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