UNITED STATES COURT FOR THE DISTRICT OF OREGON

UNITED STATES OF AMERICA ex rel.

GARY R. EITEL,

Plaintiff,

vs.

ROY D. REAGAN, et al.,

Defendants

CIVIL NO. 94-425-JO

FOURTH DECLARATION OF GARY R. EITEL

I Gary R. Eitel, State as follows:

. I am the relator in this qui tam action on behalf of the plaintiff, United States of America, pursuant to the False Claims Act, 31 U. S.C. ~3730. I am a U.S. citizen over the age of 21 and am competent to make this declaration.

2. I am a former military combat pilot. I flew over 300 combat missions in Vietnam, totaling over 500 hours of flight time. For my service, I received a Presidential citation, the Air Medal with 12 Oak Leaf Clusters, and four Bronze Battle Stars.

3. I am currently a professional pilot with approximately 11,000 hours pilot time. I have the senior ratings of my profession, including airline transport pilot with jet ratings. I am also an FAA certified flight instructor, airframe and powerplant mechanic, and aircraft maintenance inspector.

1732Q134.MTN

In April-May 1989, while employed at Evergreen International Airlines, I was told that at some future time I could be asked to fly United States government C-130 aircraft for Evergreen. The aircraft were based at Evergreens Marana, Arizona base and operated under the guise of the Forest Service However, the planes were used by Evergreen for non-firefighting purposes, such as carrying cargo. I later learned that these aircraft (of which I gained knowledge in April-May 1989) were the same planes that were transferred to defendants, which were first delivered to Evergreen's Marana Airbase. See Paragraphs 31, 35

My knowledge that government C-130 aircraft were coming into Evergreen's Marana airbase under the guise of the Forest Service concerned me, because I might be required to fly the aircraft on questionable or illegal flights for non-firefighting purposes. I reported this to a Department Of Defense agent I had known for a number of years, Tom Miller. I have attached the declaration of Tom Miller hereto, which confirms my report to him. Exh. 1. I have known Mr. Miller for over 20 years. He has been an agent of the Department of Defense, and then the Federal Aviation Administration, for as long as I have known him.

6. From 1970 until his death in late 1992, I maintained contact with an individual named Jack Chisum, I first met Jack Chisum in 1970 while flying for the U.S. Forest Service. Jack was my immediate aviation supervisor. Through the years, Jack and I kept in contact concerning our friendship and business acquaintance. In 1990, I provided information to Mr. Chisum that Evergreen had access to surplus military C-130 aircraft, which I later learned were the aircraft at issue in this suit. Mr. Chisum needed access to C-130 aircraft and had inquired of my knowledge.

7. In the fall of 1991, I was pursuing government aviation opportunities for myself and certain consulting clients. I came across an industry magazine, Conservation Aeronautics, that reported a just started Forest Service C-130 and P-3 air tanker program.

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In Summer 1991, I read an article in the magazine that stated that C-130 and P-3 aircraft, former military planes, were being used by private contractors for firefighting for the US Forest Service. Through the fall of 1991, Mr. Wood and I maintained contact, and he gave me extensive information in our discussions which he asked I keep confidential. One piece of confidential information that he eventually gave me was that an individual by the name of Roy Reagan was involved in getting A-10s connected with the Forest Service.

8. Later in the fall of 1991, I communicated with Jack Chisum and learned he was having difficulties because he and others were operating C-130 aircraft in Kuwait and other surrounding countries,. Jack Chisum explained to me the following:

He and another man by the name of Woody Grantham had interests in a company called T&G Aviation a/k/a Douglas County Aviation. Jack indicated that he was a vice president in the company and that he had a financial interest in it as well. Jack went on to say that T&G's C130, aircraft were doing work for Southern Air and Evergreen in Saudi Arabia and Abu Dhabi. He said the paperwork was in place to show that the Bechtol Corp. and a company out of Alaska called Martech were using the C-130s for routine oil field work, when in fact, it was other kinds of work, including moving weapons. Jack said he had the proper paperwork in hand allowing T&G's operation of the C-130s in Kuwait and surrounding companies under the cover story, but that turf fighting between Evergreen and Southern Air had put a spotlight on T&G's operations. Jack went on to say that Southern Air and Evergreen were trying to eliminate T&G from doing the type of work that Southern Air and Evergreen had traditionally done, such as hauling guns and other contraband. In later conversations, Chisum told me the details of a related Forest Service exchange program cover story.

9. In October 1991, I contacted the US Forest Service concerning the aviation magazine article depicting a C-130 air tanker. The Forest Service officials responsible for the aircraft exchange were extremely uncooperative. I was told many things by the Forest Service which turned out to be untrue. For example, the Forest Service told me the new program merely involved 3 C130 aircraft (when it involved more than 22 C-130s and more than 6 P-3sand as many as 100 A-10 fighter jets and that, for all practical purposes, it was closed to all newcomers. I was told by the Forest Service the program could

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reopen if certain details could be worked out by the General Accounting Office concerning transfer of surplus military aircraft. Exhs. 2-6

10. I had been referred to the Forest Service Aviation office in Washington, D.C. by Tom Wood. I called this office and was told that Fred Fuchs was the Forest Service in charge of the air tanker program. I spoke with Mr. Fuchs briefly and followed up that same day with a letter by facsimile requesting information about the military aircraft exchange program. Exhs. 2-4 . In the ensuing month to two months, I repeatedly contacted Fuchs' office to gain information about the exchange program. Fuch's and his subordinates stonewalled, promising to but then not sending information about it. Exh 6

After originally communicating with the forest service in Oct. 1991, I contacted the General Services Administration about the new C-130 air tanker program and received an entirely different picture than what was told to me by the Forest Service. I was told by the General Counsels office of GSA that there were 22 C-130and 6 P-3A aircraft involved.

12. I was surprised at the coincidence between Chisum's disclosure about tags C-130s and Fuch's refusal to be more forthcoming about the Forest Service exchange program which involved C-130s. This reminded me of the use of C-130s by Evergreen for non-firefighting purposes under the guise of the Forest Service in 1989, and it turned out that I now was dealing with the same aircraft.

13. In Nov. 1991, in a phone conversation with Jack Chisum, we again discussed the subject of T&G's C-130 predicament. Chisum admitted at the time his own difficulties with flying C-130 aircraft in Kuwait was connected with the Forest Service program about which I had inquired to the government. Chisum expressed grave concerns for himself and his company and he stated he felt he was being set up by his competitors, with the help of certain people at the Forest Service.

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n November 1991, Chisum informed me there were other people and companies that were doing illegal things in the Forest Service air tanker program. He disclosed to me that the contractors who had received military aircraft from the Forest Service knew in advance that they would use the planes for profit on non-firefighting uses. He said that other people other than T&G were also doing things with the forest Service military aircraft other than firefighting, and that it was unfair that those entities, other than just T&G --were not the subjects of investigations. He specifically identified two of the defendant contractors—Hawkins and Powers Aviation and Aero Union Corporation. (See Exh. 7, 10). Furthermore, he identified specific illegal uses by Hawkins and Powers of the military aircraft, including leasing them for film production, using them in video commercials, and hauling fish in Alaska. He stated that the scheme to use the Forest Service aircraft for profit in non-firefighting purposes was organized out of Aero Unions’ offices in Chico, Calif. He also stated that the contractors had to use Reagan to get type certificate for the planes, and that Reagan was located at Aero Unions offices. I told Chisum that it did not make since that the contractors had to use Reagan for a type certificate, since if they were firefighting there was a “public use” exception to the FAA’s certificate requirements. Chisum acknowledged that the type certificate was needed to use the aircraft for purposes other than firefighting.

I related to Chisum that I believed that the Forest Service program was part of a scheme to direct surplus military aircraft to private companies for non-firefighting purposes. Chisum confirmed my conclusion. I told Chisum that I intended to file a formal complaint with the government against the Forest Service officials with whom I had recently communicated. I also told Chisum I was going after government records to expose the scandal, and, if I found documentation to vindicate him, I would pass it along.

Around this time, Tom Wood, the Conservation Aeronautics editor, referred me to Roy Reagan. He told me that Reagan was an Air Force engineer, and he gave me

5 Reagan’s phone number in Chico, California. Exh. 8,10 He stated to me that Reagan was working on a non-public project involving A-10 fighter jets to be used for the Forest Service. I found the idea that sophisticated, modern fighter jets were being considered by the Forest Service to be incredible, and this heightened my suspicion that a Forest Service military aircraft exchange program was going badly astray.

In late 1991, I contacted the U.S. Dept. of Agriculture Office of Inspector General in Washington D.C., an agency “hotline”, which has jurisdiction over the Forest Service. I revealed my knowledge of the abuses of the Forest Service’s military aircraft exchange program (as described in paragraph 14 above) and the refusal of Fuchs to deal honestly and openly with the details of the program. I specifically reported my knowledge of the improper uses of C-130’s by T&G and others in the Persian Gulf and Hawkins And Powers in Alaska, the other improper uses for movie productions and video commercials, Aero Unions Central role in the illegal scheme, and Reagan’s affiliation with Aero Union and efforts to use A-10 fighter jets in some way under a questionable Forest Service program.

Soon after filing a complaint in late 1991 against Forest Service officials and the air tanker program with t he Agriculture’s Office of Inspector General’s hotline, I began to pursue documents from the Forest Service under the Freedom of Information Act. I began this effort in early January 1992. Exh.13 The Forest Service’s response to my request was not candid or truthful. Initially, the agency falsely asserted that the aircraft belonged to the recipients and the Forest Service retained no control over them. Exh.14 I gave this letter to Jack Chisum, and he told me that he used it to show the FAA and State Dept. that T&G’s use of the aircraft in the Persian Gulf was authorized. See exh.11

6 On Feb. 6, I submitted a follow-up to my January FOIA request, demanding “black and white documents, not merely summations created as an FOIA response.” Exh. 15

In late Feb. 1992, Woody Grantham helped me as an expression of his appreciation for my providing Chisum with the Forest Service letter. He knew that I was investigating the aircraft exchange program, and he sent me by facsimile a letter on Hawkins and Powers letterhead that revealed that Hawkins and Powers was using its Forest Service C-130s for non-firefighting purposes. In the letter, Gene Powers, the president of Hawkins and Powers, thanks the representative of a company named Multitrade International, a firm not involved in firefighting, for the “care and attention” given to Hawkins & Powers’ c-130s during its lease of them. Exh.12

On Feb18, the Forest Service responded to my follow-up FOIA request. Exh.16 With this letter, the Forest Service provided me the actual Exchange Agreements between defendants T.B.M. Hemet Valley Flying Service, Hawkins & Powers, and T&G Aviation. These documents revealed an express false certification by the contractors who received the planes, made to obtain the military aircraft, that they would use the planes exclusively for firefighting purposes.

The Forest Service had still not provided me with the specific contracting data that I had requested. Frustrated with the Forest Service responses to my FOIA requests, I spelled out—in an FOIA appeal dated March 5, 1992—what I believed to be illegal.17 activities concerning the Forest Service aircraft. Exh.17 By letter dated March 24, 1992, forest service officials acknowledged my complaints.

Also in early 1992, I made contact with the Department of Agriculture Office of Inspector General’s audit division, based in Atlanta. An OIG investigator informed me that my hotline complaint in late 1991 related to what was now a full-blown audit of the Forest Service air tanker program. I was asked to cooperate and I did so,

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providing all the information and documentation that I possessed concerning T&G and the Kuwait incident, Southern Air and Evergreen involvement, and Roy Reagan and the A-10 program. I relayed the information that Chisum had told me about the true nature of the program to get former military aircraft into the hands of private contractors for non-firefighting purposes, including that Aero Union was headquarters for that program, that the contractors had to use Reagan to obtain type certificates, and that Reagan was located at Aero Union’s offices. I also forwarded to the OIG’s office that all of my FOIA requests and the Forest Service responses, including the C-130 exchange agreements. I spoke frequently with John Davis or two other auditors, agents Feester and Tyler. The auditors told me that they had not seen the Exchange Agreements before I had given the documents to them, nor did they know of Reagans involvement with A-10s. See Exh.20

Prior to the issuance of the OIG audit, I was asked by the investigators to explain what I knew about Del Rio Flying Service and Roy Reagan. I explained that Roy Reagan was involved with a highly improbable program to use A-10 fighter jets for the Forest Service. I had well-founded reasons to believe that the A-10 fighter jets were to be used for other purposes. I also revealed that Roy Reagan was connected with aircraft manufacturing operations near Ft. Worth, Texas and in Chico, Ca. I was told by an OIG investigator that portions of the audit report had been intentionally leaked to a news paper. In addition, one of the auditors told me during the audit of CIA footprints everywhere. In or about Oct. 1992, OIG auditors issued a formal audit report on the Forest Services aircraft exchange program. I obtained 3 copies of the report, one from the auditors personally, one from a member of congress, and one through a freedom of Information request.

In Late 1992, I contacted, Congressman Rose’s Office because I believed that certain Forest Service Officials were involved in a cover-up of wrongdoing in the Forest

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Service airtanker program. In early 1993, Congressman Rose’s office informed me that a House Subcommittee investigation was underway concerning my 1992 complaints to congressman Rose’s office. I was asked to cooperate and testify, and I agreed. exhs. 21,22.

Also in late 1992, I learned that Mr. Chisum was killed in a hit and run car accident.

28. In early 1993, I made contact with Senior Special Agent in the criminal division of the Dept. Of Agriculture OIG office in Washington D.C. His name is Kim Widup. I then began a relationship with Agent Widup that has continued to this day. I provided Agent Widup with all the information I possessed, including the leaked Hawkins & Powers correspondence, the Exchange Agreements, and the information I had received from Chisum. Exh. 23 29. In early 1993, Congressman Rose’s office putoffice put me in contact with two media sources in the Portland, Oregon area, Jeff Manning and Eric Mason. Manning worked for the Portland Business Journal. With my assistance and documentation, Mr. Manning wrote an article on the Forest Service C-130 scandal. He provided me a courtesy copy of his story with a personal note attached thanking me for my assistance and pointing out the story could not have been written otherwise. Exh.27 I was contacted by numerous other journalists before they wrote stories on the aircraft exchange program. These included Jennifer Dixon in or around November 1992, Scott Sonner in or around July 1993, Dick Clever in or around Sept-Oct 1993, Doug Frantz in or around April-June 1993, the staff for Jack Anderson in or around July 1993, and several others.

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Starting in or around April 1993, I cooperated with James Long, who worked for the Oregonian newspaper in Portland. I was put in contact with Mr. Long through a mutual acquaintance – a professor Leary from the University of Alabama. With my help, Mr. Long prepared an extensive news article on the Forest service and C-130 air tanker program and his article is included with the August 5. 1993 congressional hearing chaired by Congressman Charlie Rose.

Just prior to my testimony before Congress that occurred on Aug. 5, 1993, I gained further information from industry contacts concerning the activity of all of the recipients of air tankers under the Forest Service Exchange Program that was the subject of my complaints to the OIG and to Congressman Rose. Later in 1993, from my confidential contacts, I learned that a company named Aerial Heavy Hauling headed up by an individual named Joe Kelso was going to create a fraudulent scheme to obtain owner ship of two C-130 aircraft previously in the Forest Service air tanke5r program. The Kelso operation would be a joint venture out of Bend, Oregon associated with a company named Butler Aviation. I learned from my confidential sources that Butler Aviation was an affiliate for T.B.M., a reci8pient of former military C-130 aircraft. Exh.32. I gave this information to Special Agent Widup, senator Sasser , Congressman Rose, and reporters with whom I worked previously.

One other source for information was a confidential contact I had initiated in Mena, Arkansas, Charles Hendricks. Exh.29, Mr. Hendricks’ son was involved with C-130 aircraft that originated from Roy Reagans efforts to skim surplus military aircraft for use in non-firefighting efforts. His son had died in a C-130 aircraft accident in Angola while operating to assist a military force in that country. Congressman Kurt Weldon stated on Aug. 5, 1993 in the record on the house floor after my testimony that the CIA was behind the flight and he wanted to have hearings to determine why, Mr. Hendricks referred me to a former T&G mechanic, who stated to me that Forest Service C-130’s had 10 been operating out of Mena, Ark. On non-firefighting activities. I also learned the names of individuals personally involved with Roy Reagan and Evergreen at a time in 1989 when I first learned that Evergreen was using the same surplus military C-130s belonging to the Forest Service for non-firefighting purposes. I provided all of this information to Agent Widup, Senator Sasser, Congressman Rose, and another representative Congressman Weldon.

From my Mena, Ark. Investigation and contacts, I made the acquaintance of Gene Wheaton who, like myself, had been asked by Congressman Rose to testify concerning his knowledge of non-firefighting uses of C-130 aircraft. My contact with Gene Wheaton occurred shortly after my Aug. 5, 1993 appearance before Congressman Rose’s committee.

I had a number of confidential phone conversations with Gene Wheaton and we exchanged documentation. We both discovered the early roots of the new 1991 Forest Service air tanker program. The program was not new whatsoever, but followed a lengthy history whereby questionable operators obtained surplus military C-130s that originated in the U.S. and later were used by the Royal Australian Air Force in the late 70s and early 80s. This predated the current Forest Service exchange program by a number of years. Many of these aircraft made their way back into the U.S. and into the hands of T&G and John Ford, and they were operated for profit doing the same type of work as T&G had done in Kuwait. See para. 38

In late summer or Fall 1993, I obtained a copy of a C-130 tracking catalog which records activity of all C-130 aircraft ever manufactured. I obtained this from Mr. Wheaton, who had given it to a reporter we both knew, Eric Mason, to share with me. It reflected that T.B.M. had transferred certain of its C-130s to an affiliate, Butler Aviation. 11. To my surprise, I also discovered multiple transfers of those aircraft involved in the Forest Service program individuals within and outside of the air tanker program. This revealed repeated switching of registration of the aircraft by defendants, a scheme known in the aviation industry to hide aircraft ownership while doing improper activities. See Exh. 31 All of this to include a copy of the catalog given to me by Special Agent Kim Widup of the criminal division, Dept. of Agriculture OIG in 1993.

Through my confidential sources and investigation efforts, I learned that when Jack Chisum’s 2 C-130s returned from Kuwait, they were flown to and parked at Evergreen’s Marana Airbase. A phoney finance scheme had been put into place so that the aircraft would appear to have been repossessed by a lending institution which would appear to be an “innocent” third party. This transaction was an illegal scheme to steal U.S. property, and I reported this to the OIG investigators, Senator Sasser, and Congressman Rose. Evergreen appeared as a sales agent putting the two C-130s on the market for $5.6 million each and retained operational control over the aircraft.

Through my confidential sources and investigation efforts, I also learned of an attorney in California named John Ford, who was involved with the Australian C-130s one of which he owned(mena n*****80, for those keeping a list)In fact, one of Ford’s C-130s was seized by U.S. Customs for hauling drugs. Ford appears in documentation possessed at one point as an officer of T&G, at other places as an attorney for both T&G and Roy Reagan. I also learned that Ford put together the financing scheme for kickbacks paid Reagan by T&G.

Through my investigative efforts that began in late 1991, I learned that Roy Reagan and key principals in Aero Union had been longstanding friends going back to high school at Medford, Oregon. I also discovered that Roy Reagans A-10 fighter program was going to be masqueraded as a Forest Service air tanker program that would be based in Medford, Oregon and associated with a company I had flown a CIA mission for in 1989. 12 The C-130, P-3, and A-10 scheme was developed at Aero Union by Reagan and his friends with the help of Evergreen. In early 1993, Special Agent Kim Widup halted the A-10 fighter plane conversion program, in part with information provided by me. I testified as to the A-10 program at Congressman Rose’s hearing in 1993. Initially, Forest Service officials denied or avoided the subject; but under pointed questioning by Congressman Rose, they admitted to the A-10 fighter jet air tanker program. This revelation was solely brought about by my investigation, which I had reported to the OIG auditors in 1992, Congressman Rose in 1993 and Agent Widup in early 1993. One of my concerns was that an A-10 fighter jet had no useful purpose as a Forest Service air tanker, especially equipped so that it could be quickly converted again into a jet aircraft “tank killer”. I additionally discovered through my investigations, that A-10 aircraft contained harmful radiation because of spent uranium munitions. I also uncovered evidence to shoe that he A-10 program was secretly further along than previously admitted by government officials. I obtained documentation showing at least 100 A-10 aircraft were involved in the program and more than 40 C-130s under a phoney air tanker program mastered by Roy Reagan and others. I provided all of this information to the OIG, Senator Sasser, and Congressman Rose.

in late 1993, I used the same documentation to show that Forest Service Chief Dale Robertson testified falsely before Congress in connection with his testimony regarding the A-10 program before Congressman Rose on Aug. 5 1993. Forest Service Chief Robertson subsequently was fired for this and other reasons, Exh.33 13 Pursuant to 28 USC ~ 1746, I certify this 29th day of June, 1995, under penalty of perjury under the laws of the United States, that the foregoing is true and correct to the best of my knowledge. (signed) Gary R. Eitel Date and place of execution: 6\29\95, State of Washington

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