Episode 8: The Political Shitstorm

word that they had Lee and custody. And once we got word, then we had Vogel's house, and Stephen Kaylish, the smooth talking gentleman smuggler who'd gotten cozy with General Noriega down in Panama, was also behind bars. If you recall, Stephen had an escape plan in place. He had a group of mercenaries forces guys that he kept on retainer for this very purpose. I had a serious escape plan, oh, I had one before I ever got arrested. A friend

of mine's brother ran a special Forces team. I put him on one hundred thousand dollars retainer to come and rescue me no matter where I was. But the Special Forces guys told him there was a catch. They could break him out, but in the process someone might get killed. This was a problem because the gentleman's smuggler was a declared pacifist. So what to do? Lee Rich and his partner, Stephen Kaylish decided to fight the charges against them, so

they were prosecuted together down in Tampa. The trial began in February of nineteen eighty seven. In his opening arguments, the assistant US attorney at the time, Robert Kennedy, described Lee Rich as the classic kingpin, living in a fancy house in the Caymans, throwing lavish parties, flying around in his lear jet, and raking in millions. And he depicted Stephen Kaylish as the field general quote, a leader who inspired other people to work for him and work for

him very efficiently. Quote. As the prosecution started making its case, Stephen wasn't hopeful. We've been in tramper about six weeks and they've been about fifty or sixty witnesses, and it was a joke because we were cooked. The prosecutors had an army of witnesses, truck drivers, pilots, boat captains, radio operators, and even the bail throwers who had unloaded the drugs.

Mountains of incriminating evidence started piling up. Stephen claims that at some point he began encouraging people to testify against him to save themselves, and turns out Stephen was making plans of his own. One day, a few weeks into the trial, Lee says that his partner in crime, the gentleman smuggler, kind of vanished. They had moved him out of the cell the night before, afraid, you know, somebody's going to stick him. So my lawyer says, yeah, he

rolled Lee. He's become an informant. When your lawyer says that you, what's your reaction. Well, I wasn't happy. I can tell you that I was thinking that that's a real dirt bag. I know he's saving his ass, but I was looking at life in prison, no parole, and so was he. Lee claims he would never have done this. I'd never testified in a courtroom against anybody ever, never will. It's not in my blood to turn in people and never will be. Stephen remembers this all differently in his

telling of events. He doesn't just disappear one day during the trial. Instead, he was candid with Lee and told him exactly what he intended to do. I said, I'm the only one that holds any cards here, and those cards in Noriega. In my relationship with Noriega, I said, I'm not going to sit through this trial any longer. In fact, Stephen had been talking with prosecutors for months sussing out the possibility of a deal because Stephen thought he might have a get out of jail free card.

I just knew that the information that I could divulge about Noriega and his activities were a bombshell. There's no doubt in my mind that there's ramifications. They go all the way to the top. I mean literally from Reagan on down. I'm Jake Halbern and this is Deep Cover, Episode eight, the Political shit Storm. Stephen Kaylish was a man who always had a backup plan. Long before he was ever arrested. He had hired those Special Forces guys to break him out if need be, But in the end,

he couldn't stomach the possibility that someone might die. I said, well that's a deal breaker. I said, I've never harmed anybody in my life. I'm not going to do it now. I said, if they can't get me out of here without somebody being hurt, then I'll figure out another way. And it turns out he did another way, or so he thought, and it involved his friend, General Noriega. General

Noriega had always been Steven's ace in the hole. When Stephen was a fugitive living in Panama, Noriega gave him a safe haven, a way to launder his money, a way to keep smuggling drugs. And now once again, Stephen's relationship with Noriega might come in handy. I didn't know how it was going to work out. I didn't know if they would drop charges. I had no idea how everything was going to play out. By going public with

his story, Stephen understood he might make some enemies. He knew that Noriega had allies in Washington, DC, people who might not want this getting out. I mean a lot of trepidation, you know, I have to be really careful about you know, who I disclosed, as to how it's disclosed, whether it's going to become public. So it's very very secret and very concerning. Stephen wouldn't be the first person

to offer up dirt on Noriega. The famous investigative journalist Seymour Hirsch had written a front page article in the New York Times about Noriega about eight months before the trial. It was damning. Hirsh wrote that Noriega was involved in money laundering and that he was quote a secret partner end quote in a drug smuggling business. The article seemed to be describing Noriega's arrangement with Stephen Kaylish exactly, but it was all pretty vague. Hirsch relied entirely on anonymous

sources in theory Stephen could change all of that. He could give these allegations a name and a face and a storyline. So at least six months before he went on trial down in Tampa with Lee Rich, Stephen had already been gone to talk with prosecutors, hinting at what he knew that one of America's top allies was actually a drug trafficker. One prosecutor in particular took a keen interest. Doug McCullough. McCullough was the first US attorney for the

Eastern District of North Carolina. He had his own case against Stephen. Remember that ghost ship from episode four, the one that gets abandoned in the harbor with all the marijuana in it. Doug was working on that case. He'd been in touch with Stephen's lawyers and had gotten word that Stephen had secrets to tell that went far beyond the ghost Ship. Well, I knew Kaylish had this evidence

that would implicate Noriega and money laundron. His lawyers had told us that in what's called a proffer, But I wanted to hear it from Kaylish's own mouth and see what kind of person he was. So Doug arranges for Stephen to travel up to North Carolina. Well, they put me in some shitty gel I mean it just typical red and at shit home. And then Doug takes me back to his officers, right, and he goes, well, we want to take you to secure location and sit down

with the INDEP review. Stephen knew what Doug wanted to talk about. The question was what did Doug want to do with it? This information was currency, and one way or another, Stephen wanted to profit from it. Either way. If they want me to talk, I want something for it. If they want me to shut up, I want something for it. I don't give a shit. They it's their call, it's not my call. Well, I'm just going to tell the story and then let the cards fall the way

however they fall. So they all get out to Camp Lejeerne, the big Marine Corps base in North Carolina. Doug McCullough, the prosecutor, his team, along with Stephen and his defense lawyers. Doug has arranged for two trailers, one for the prosecution and one for the defense team. Stephen remembers the Marine

Guards were stationed all over with their M sixteens. Everyone piles into one of the trailers and Stephen starts telling his story high detail, my smuckling operations, obviously in North Carolina, which is one of the things that concerned him. But it leaked all up to me getting to Panamall, and then about me going to Panamall and me paying off Noriega, and then me buying helicopters and jets for Noriega. Doug's basically almost shell shocked. I mean, he's visibly shaken by

it all. Doug wasn't naive he understood that a guy like Noriega might be corrupt. What blew him away was Stephen. Here was a runaway kid from Texas who become a drug tycoon and was apparently Noriega's business partner. And he had evidence. He had airplane logs that showed on his private jet him flying Noriega around. These logs show that Noriega used Stephen's plane during a trip to the United States, and this trip it was a big deal. Noriega went to d C. I met with the Secretary of Defense

and then the director of the CIA. There's a celebratory lunch for him at the Pentagon. It's pretty much a hero's welcome. So yeah, Stephen's evidence would make a lot of people look very bad. The debriefing session goes on and on until finally Stephen says, okay, guys, I've talked for five or six hours. I said, now it's my turn. I want to see my wife. Are you all satisfied? Stephen's wife was actually waiting to meet with him. That was part of the deal that Stephen says he worked

out with Doug ahead of time. Ever, the gentleman smuggler, Stephen had asked for some very gentlemanly terms. He wanted dinner, and he wanted a trailer overlooking the Atlantic. And I said, okay, well, if you're satisfied, I want my wife and I have several hours together. And Duck goes more than satisfied. They brought me a nice steak dinner and beautiful meal. I think a bottle of champagne, and my wife made love

a couple of times. After I finished with my wife, Duck comes in and he goes, We're going to Washington, d C. Because I've been ordered by my boss that they won't you at Main Justice in Marshington, d C. For deep briefing. A few days later, they all fly up to DC together to the headquarters of the Department of Justice. According to Stephen, they go to a big conference room and meet with a whole host of officials, and once again Stephen tells his story. When it's all over,

they basically just thank him for his time. Seemed like a dead end, but toward the end of the day, Doug McCullough remembers an assistant Attorney General pulling him aside and saying, all of this information has been passed up to the National Security Council, so apparently people were taking notice. For all of his efforts, Stephen gets pretty much zilch. No one gives him a get out of jail free

card or really anything close to it. So in February of nineteen eighty seven, Stephen goes on trial in Tampa alongside his old partner Lee Rich. For a few weeks they're fighting it out together, but by mid March, Stephen says he sees the writing on the wall. There's no winning this case. So he reaches a deal with prosecutors. As they say in the business, he joins Team USA and agrees to testify for the government. In return, he gets well less than he hoped for. He's promised a

jail sentence of no more than twenty years. Meanwhile, Lee Rich keeps defending himself at trial, but in the end he loses. He's found guilty of running a continuing criminal enterprise. His sentencing hearing was brutal. The prosecutor said, good old mister Beach Club had quote no redeeming social value end quote. He was sentenced to thirty years. So it seemed like Steven's big move and the whole story of the General went pretty much nowhere, a big dud. But that wasn't

the case. By peddling his story around in DC and elsewhere, he'd gotten people talking and started something much much bigger than he ever imagined. More on that after the break, so Stephen's story was slowly making its way through the grape vine in Washington, d C. And it turns out totally independent of this, another investigator named Jack Blum was

also taking a closer look at Noriega. Jack was special counsel for the Senate Form Relations Committee under John Carey, and Jack, like everybody else, had heard the rumors and read the article in the New York Times about Noriega and his alleged drug trafficking. To Jack, it was intriguing, but not an open and shut case. I didn't have a smoking gun the time, certainly didn't have a smoking gun, but there was enough there. So glad anybody who really

wanted to know could find out a lot more. Jack was interested not just in Noriega, but in all the particulars of how drugs were being smuggled and how money was being laundered, and so in the mid eighties this became Jack Blum's mission. But he was not just some policy walk sitting in some room with his whiteboard. Jack was more like, well, a detective. I went to visit these people in jail, spending time talking to them. So I actually became quite a visitor to the federal prison system.

And of all the people that he interviewed. One in particular still stands out to this day. I remember, particularly Lee Rich. The words that come to mind are clean cut, nice guy. I could go out drinking with them, I could have him as a business partner. One of the things that came clear was how normal and routine and pleasant some of these five star criminals turned out to be. And Lee starts to tell his story all about how he smuggled his drugs and how he laundered his money

with the help of the General Manuel Noriega. It was quite a revelation. People were talking about Noriego was in charge of everything in Panama and he was our guy. Well you heard this, and it was like, wait a minute,

he's not our guy. It was one thing to have a newspaper article with a bunch of unnamed sources, but it was another thing entirely to have a guy like mister Beach Club who could verify it all and say basically, yeah, General, Mammo Noriega, he was our business partner, and here exactly is how he helped us launder our money. The further into this mess that I got more apparent, it became that it was a very tangled mess. You start looking

at the awards that were given to Noriego. There are photographs of the top man in the giving plaques to Noriega in Panama, congratulating him for sustain various busts. Jack began to piece it all together what exactly Noriega had been doing. He'd been cooperating with the US War on Drugs kind of Basically, Noriego would apprehend some drug smugglers, but he was being very selective about which bad guys he went after, namely the guys who didn't use his

money laundering services. Those guys they got busted. All the while, Noriego is providing valuable info to the CIA, because well, he did know all kinds of things. Noriego's talking to Fidel Castro, Noriego's relating to all of the heads of state and the characters who were all over Central America one way or another. He's got his hands in every pie. Now, of course, the stupidity of it is he's really working

for himself. The more that Jack looked into who Noriega was and how he operated, the more troubling it became. At one point, Jack interviewed one of Noriega's pilots, who detailed the murder of Hugo Spataphora. Spataphora was a prominent doctor and revolutionary who'd criticized Noriega for his involvement in the drug trade, and he paid for it. In nineteen eighty five, some Panamanian soldiers abducted him, and his decapitated

body was later found in a ravine. The notion of torturing and beheading his opponent and doing it the way he did it, this man is really evil from top to bottom. Up until now, Jack says, Noriega's bad behavior had been tolerated because he was so helpful to agencies like the CIA. I actually found an internal CIA document from the time marked secret that's since been declassified. It said, quote, we have no smoking gun on Noriega, but he is

closely associated with some connected to the drug trade. So yeah, they had an inkling. So the CIA had its agenda for Panama. They were interested in their mission and nothing else. And their response, if you ask why are you doing business with all these terrible characters was pretty simple. Terrible characters or are stock and trade. It's the criminals who know how to get around the law and get around all of the systems and who can help us do our job. It was kind of like what Ned Timmins

had told me from the very beginning. If you wanted to get intel on the bad guys, well, then you also had to play with the bad guys. For Jack Blum, the only way to blow all of this open was to hold congressional hearings and use guys like mister Beach Club to go public and make some headlines. More on that. After the break In early nineteen eighty eight, about a year after they'd gone on trial down in Tampa, Lee Rich and Stephen Kaylish went public with their story about Noriega,

and they did so in the biggest possible way. In Washington, d C. Before the Senate in front of live TV cameras. The US Congress today heard about a strange partnership between Panama's military rule, Manuel Noriega, and a convicted American drug dealer. At this point, many senators were interested in the subject of narco trafficking in general. There were multiple sets of hearings. Jack Blum organized one of them. Altogether. They created a specticle.

A parade of former criminals showed up to tell their stories. Stephen and Lee hope that by talking publicly, they'd get their jail sentences reduced. On TV, Stephen is super clean cut, perfectly combed hair, huge black grim classes a dark suit. He looks like he could be a stockbroker on his lunch break, and he's telling a story, but he's reading it, checking his script constantly, not nervously, just like he doesn't

want to get a single detail wrong. In his testimony, Stephen explains how exactly he'd become friends with the General. I was taken to General Noriega's private home. I had been instructed bring a gift for the General large enough to show how serious I was about doing business in Panama. I placed three hundred thousand dollars cares in my briefcase. The briefcase stuff with cash would become an icon for this scandal that unfolded, kind of like Monica Lewinsky's dress

or Richard Nixon's White House tapes. It was a singular image that people could picture and that told the whole story. Here was the head of state hosting a drug dealer in his house and accepting a briefcase stuffed with bills. A few months later, at a separate set of hearings. Lee Rich, mister Beach Club, also testified. He backed up Stephen Kaylish's account, corroborating the now famous story of the three hundred thousand dollars in the briefcase Mike Vogel, the

Detroit grocery guy. He testified two. In the time between Stephen Kaylish and Lee Rich's testimonies, there was big news. The US Justice Department was going after Noriega, the military leader of Panama, General Manuel Noriega, was indited today on charges of drug smuggling and racketeering. In all of US history, this was only the time that the Justice Department had indicted the head of a foreign nation. Only problem was, Noriega was still safely situated in Panama, very much in control.

The indictment only created more controversy. The legendary Congressman Charles Wrangel accused the Reagan administration of quote, a full blown cover up of the facts end quote. At last, the political shit storm had arrived. Noriega didn't just stand by and watch all of this silently. In the press, he defended himself. He said that the US was really just interested in getting rid of him so it could keep control over the Panama Canal beyond nineteen ninety nine when

the US was supposed to be out of there. Noriega actually did an interview with Mike Wallace of CBS to make his case. As you know, general, the American people are being told at this moment, but Monde Noriega is a criminal, a drug dealer, He is an arms dealer, He is a money launderer. Question why Noriega and why now? But precisely in the interview, Noriega said, essentially, look, all

of this is political conspiracy. This is retribution because I wouldn't do the US's dirty work in Nicaragua and help the contrast. During the sixty minutes interview, Wallace asked about Stephen Kaylish. You know Stephen Michael Kaylish a kive Banama here, Banama. Many people come by when you work in my profession, and also as a politician, you see a lot of people, not that you know them. I would know Kaylish if

he gave me three hundred thousand dollars. And he said that the first time he met you, he left a bag behind the three hundred thousand dollars inside. And he also said that you were a full scale co conspirator in his drug operation that he paid you eventually millions. You were talking about two gunvicts. That's say they both gave money. If that doesn't invalidate it, the money for what does? This was a big part of Noriega's defense. Stephen Kalish is a convict. You can't believe a word

he says. Look, some of Noriega's critiques were legit, like the fact that the US messed around in small countries in order to advance its own sketchy interests. Yeah, fair enough. But when it came to the drug and money laundering charges, the evidence against Noriega was pretty damning. The real question on a lot of people's minds was how could the US allow this? How could it buddy up with a drug trafficker like Noriega because our intelligence services knew what

he was up to. Two years before the congressional hearings, John Poindexter, the National Security Advisor at the time, went to Panama. According to The New York Times, he told Noriega to quote cut it out. So, Yeah, people knew. In fact, as far back as the early nineteen seventies,

US officials were in the know. They'd heard the allegations of Noriega's involvement in the drug trade, and this evidence was actually passed along to the US Senate at the time when it was negotiating a new treaty with Panama. But for years and years, the US had opted to do very little about this, not anymore, not after the story of the Gentleman's Smuggler and his briefcase. That was it.

While all of this is going on, the congressional hearings, the indictment against Noriega, the growing scandal, Ned Timmins was back in Detroit. No one had asked him to testify before Congress. Apparently he was just another cog in the machine that had helped bring all of this to light. But Ned was still plenty busy at work thanks to his time on the Lee Rich case. Ned had all kinds of contacts in the drug world. One of them was a beautiful young woman from Columbia who knew things.

She was connected with the biggest people in the cartels and talked a good game. She knew what she was talking about, She knew the right names. These are the people that would have supplied the drugs to Likely Rich. They are the people that controlled everything on the Earth coast to Columbia. It seemed like this could be the

final piece in the puzzle. After all, Ned and the FBI had busted the distributor with the big warehouse in Detroit, They'd gotten the master smuggler with his armada of ships. They'd gotten the kingpin from his safe haven, and the Caymans, even the money launderer Noriega had been indicted, and now Ned had a shot at the source. Next time on deep Cover, our final episode in the series, A real reckoning for Ned with his marriage Anne with the FBI.

I mean, she was a strikingly beautiful woman and now she's sitting here with no husband. She's got no other connections besides Ned. Not a good situation to have your husband involved in. I mean, you can almost predict trouble. Deep Cover is produced by Jacob Smith and edited by Karen Schakerjee. Our story editor is Jack hit Original music and our theme was composed by Luis Gara and Flawn Williams is our engine year fact checking by Amy Gaines.

Mia Lobell is Pushkin's executive producer. Ned's novel is read by Walton Goggins. Special thanks to Julia Barton, Heather Fame, Carly mcgliori, Lee to Mullad, Maya Kanig, Eric Sandler, Maggie Taylor, Kadija Holland, Zoe Gwenn and Jacob Weisberg at Pushkin Industries. Special thanks also to Jeff Singer at Stowaway Entertainment. Additional thanks to John Dingis, who wrote Our Man in Panama, A meticulously researched, an excellent book. I'm Amuel Noriega. I'm Jake Halbern