Contra aid shadow dance

At the quiet center of the Iran-contra affair is an air cargo company in the far corner of Miami International Airport, housed in a gray, corrugated metal hangar. Tropical trees stand out front. An American flag flutters in the breeze. Southern Air Transport, once a front company owned by the Central Intelligence Agency and used for covert supply runs in Asia, is a common thread in two supply programs for Nicaraguan rebels - one official and humanitarian, the other a private weapons network. The two operations are woven so closely together they are sometimes difficult to separate.

In an elaborate shadow dance, the secret arms supply network used much the same organization, and sometimes different legs of the same plane trips, as the official nonlethal aid program.

American officials monitored and promoted the arms network, the evidence suggests, and even indirectly subsidized it, but always one step removed from official involvement.

Or almost always. The diverting of Iranian arms payments to the contras crossed over into direct government support and may have broken laws barring such support last year.

Whether or not government involvement slipped its leash elsewhere in the contra supply program is not yet clear. Evidence, much of it circumstantial, is mounting, however, that Southern Air Transport was at the center of a network of former CIA employees and retired military men who kept in contact with sympathetic officials in the Reagan administration.

The far corner of the airport here was once dubbed the ``graveyard'' or ``corrosion corner,'' because of the ancient and makeshift fleets populating the tarmac.

But Southern Air Transport is doing very well these days, the grass around the hangar overflowing with cars. As of this fall, Southern Air's fleet is seven times as large as the three Hercules cargo planes it operated in 1983. Company revenues have grown at roughly the same pace. About half of Southern Air's contracts are with the Military Airlift Command.

Much of Southern Air's growth follows the growth of the supply networks to the contras, who have located an office across from the Southern Air hangar.

Both Southern Air and the contra organization deny that there is any relationship. The US State Department hired Southern Air for a series of deliveries this year of $27 million in nonlethal aid authorized by Congress for the contras. But documents captured by Sandinistas when they shot down an American plane and captured Eugene Hasenfus also illuminate the private weapons-supply operation based at Ilopango air base in El Salvador and link it to Southern Air.

The company serviced the downed plane and had employed the copilot, Wallace (Buzz) Sawyer, who was killed, until last April. Although the company claims not to have owned the plane, it was reportedly purchased with a Southern Air check, perhaps on behalf of a third party.

Mr. Hasenfus claims to receive his paychecks from Corporate Air Services, a company that shares Southern Air's address and that Hasenfus says was set up by Southern Air. The company has denied any relationship with Corporate Air Services.

The Southern Air connection closely intertwines with the nonlethal aid and private arms-supply operations. Contra sources reportedly claim that further legs of the same delivery trips arranged by the State Department were sometimes used to deliver weapons under private contract to contra bases. The State Department has responded that, if true, the contracts were separate and unrelated. Yet the double-duty trips serve to cut the cost of the arms-supply runs.

Similarly, Southern Air seems to have intertwined with the Iran-contra connection. The CIA reportedly hired Southern Air to ship arms from Kelly Air Force Base in Texas to Iran via Israel. Department of Transportation flight records are consistent with these reports, although the company will not discuss it.

Flight records from February also show what appear to be return flights from Iran via Lisbon, a center for the international arms trade, to Central America.

The routing suggests that the secret but official arms delivery to Iran and the use of the proceeds to arm the contras were accomplished partly on round-trip flights.

``It's a big mistake to have used Southern Air Transport,'' says James Prados, author of ``Presidents' Secret Wars,'' a history of covert operations. ``It's a dead giveaway.''

Southern Air was purchased in 1960 by the CIA, which needed a private-appearing air carrier for occasional use on covert missions. Two retired officials from the Eisenhower administration were listed as owners.

According to William Leary, a University of Georgia professor who is writing his second book on the CIA-owned airlines, only about 5 to 10 percent of the airlines' contracts were covert missions. The rest were overt military missions or commercial contracts.

In 1973, with the Vietnam war virtually over and Congress clamping down on covert activities, the CIA sold off its airlines, including Southern Air.

Since then, former CIA employees and managers of the airlines when they were CIA-owned have dominated Southern Air's management.

``Obviously there are going to be people in Southern Air who understand the needs of the CIA,'' says Dr. Leary, since many of them had worked in the agency.

The carrier's current owner is James Bastian, an aviation lawyer living in an exclusive waterfront development south of Miami and active in community philanthropy. Mr. Bastian represented Southern Air when it was owned by the CIA.

Occasionally other cargo contractors complain that Southern Air seems to enjoy favored status for government contracts. Too many of the same people are running the former CIA airlines now who ran the proprietary network then, says Leary, ``not to assume that they are very friendly.''

Although Southern Air declines to say whether the CIA is or has been a recent customer, CIA officials have testified to arranging the arms shipments to Iran.