Mention the CIA around Mena, Ark., and the response is likely to be an exasperated sigh and a pep talk about the local economy.

It's not that the 5,475 residents of this mountain village have anything against spying per se. But after a decade of being placed at the center of a purported CIA-backed gun, drug and money-laundering conspiracy, they'd like to forget the 1980s and get back to the important things. Like last month's Lum 'n' Abner festival honoring two hometown radio stars.

Conspiracies, says Mayor Jerry Montgomery, are bad for business, and the residents of Mena are weary of hearing their home talked about like the root of all evil. They've seen their town on "Geraldo." It has been featured on Pat Robertson's "700 Club." And now it finds itself at the center of a new book that's become something of an underground classic. If all the stories are true, it's as if the town were founded by the CIA, funded by BCCI and maintained for the amusement of investigators and journalists.

"It's absurd," Montgomery said of the publicity Mena has received over the last 10 years as an alleged center of covert operations. "It's all going on strictly because of politics."

Though he is not sure whose politics.

"First it was the Reagan administration. Then the Bush administration. And now we're into the Clinton administration. I don't know whether it's Democrats versus Republicans or Republicans versus Democrats. ... It is utterly absurd."

Most recently, alleged dark deeds at Mena have helped foster the cult of conspiracy that has taken root among some of Clinton's more virulent opponents. From ugly speculation about the "real story" behind White House aide Vincent Foster's death to menacing videotapes being marketed by the Rev. Jerry Falwell linking Clinton to a series of deaths in Arkansas, the result has been a steady undercurrent of gossip in talk show, televangelist and other circles about supposed Faustian deals Clinton cut on his way to the top.

Is the president a murderer? A dope fiend? A stooge of the CIA? Were his campaigns enriched by money funneled through some secret BCCI pipeline to Arkansas?

It's all out there, and more, and in most cases the goings-on at the Mena airport figure at least peripherally into the equation.

Like any good conspiracy theory, the one surrounding Mena is a potent blend of fact and hypothesis, with enough of one to keep some people credulous, and enough of the other to render the big picture mostly unverifiable. Key people die. Others disappear. What is left in the end are fragments that mean everything to the believers and little to anyone else.

In the case of Mena, there are more than a few who have kept the faith.

The small town in western Arkansas has been the source of big-time speculation since the early 1980s, and not without some reason. According to investigative records compiled by the Arkansas State Police and other agencies, the Mena Intermountain Municipal Airport served as a second home for Barry Seal, a drug-smuggler-turned-undercover-agent.

Seal's presence at the airport beginning in the early 1980s led some local, state and federal investigators to try to figure out what he was doing there. The effort left several of those involved frustrated and convinced that someone higher in the government was running interference.

At the very least, according to court and investigative records, Seal's work for the Drug Enforcement Administration entailed his presenting to the outside world the image of a rambunctious high-tech pirate, while transferring cocaine and cash between Colombian cartel members and his government "handlers" in the United States. He helped the DEA penetrate the Colombian cocaine network and testified in high-level cases in Nevada and Miami -- until he was assassinated in 1986, a crime for which three Colombian nationals were convicted.

End of story?

Not according to Terry Reed, a former Little Rock businessman who claims it is only the beginning. In "Compromised: Clinton, Bush and the CIA," Reed writes that he was an intimate of Seal's, and says they were both at the center of an extensive, Arkansas-based CIA effort to train pilots for the Nicaraguan contra forces, manufacture and ship thousands of illegal weapons and parts to the contras, and help launder hundreds of millions of dollars in agency funds.

Co-written with John Cummings and published by a small New York firm that specializes in intelligence and conspiracy stories, it's a tale in which duffel bags of cash are dumped into the Arkansas night and funneled into the local bond market, businessmen conspire and feud to make thousands of M-16 automatic-weapons parts, and Oliver North and other Washington officials lurk in the background.

Then-Gov. Bill Clinton even has a cameo role or two, as do many of the people in his circle, including the Rose firm and former associate attorney general Webster Hubbell. In one memorable scene in the book, the future president pops into a meeting in an abandoned Army ammunition bunker to complain to North and future U.S. attorney general William P. Barr that he had taken great risks to accommodate the CIA's covert trade and didn't want it to end. According to the book, the state collected a 10 percent "commission" on all of the CIA's "black money," some of which allegedly was laundered through close Clinton ally and once prominent bond broker Daniel Lasater.


From Barr and North to Reed's social and business contacts in Little Rock, the people mentioned in the book have labeled it a work primarily of Reed's fancy.

"It's Oliver North meets Oliver Stone," said White House spokesman John Podesta. "It's 8:30 on a Friday night and I'm sitting in the White House and you're asking me if he {Clinton} was in a bunker with Oliver North. It's a bad joke."

Calling the various stated conspiracies "a cumulative distraction," Podesta added, "You can only state over and over again the outrage that it is."

Several others mentioned in the book have contacted lawyers about possible libel suits. One, J.V. Brotherton, has filed suit on behalf of himself and his manufacturing firm, which the book says was involved in the illegal weapons scheme.

Reed, a pilot who in the book and in follow-up interviews insists he trained contra fliers at a makeshift airfield and helped Seal drop cash onto a farm near Little Rock, says the truth will come out in court. His publisher also asserted the truth of the tale in its response to Brotherton's lawsuit.

"There was something going on there that the government desperately wanted to hide," said Reed's co-author, John Cummings. He noted that a trial has been slated for September in a civil action Reed brought against law enforcement officials who charged him with insurance fraud several years ago. A judge tossed out that case and Cummings predicted the new trial will show "who's lying and who isn't."

According to others around Arkansas, it is possible Reed may have been up to something during his days in Little Rock. The owner of one Arkansas machine tool company, for example, remembers Reed asking questions about how to manufacture an M-16 part. But at this point it is hardly clear what he was actually doing.

The book "is totally false, and crackpot," said Barr, who was described in it as using the code name "Robert Johnson" to conduct CIA business while in private practice. "I never have been in Arkansas. I have never met Clinton. I have never even met {former CIA director William} Casey, much less had a relationship" to represent him in meetings, as the book describes.

"The only thing that's wrong is it should be labeled fiction," said Lasater, a once-prominent bond broker whose cocaine indictment -- he pleaded guilty to conspiracy to possess cocaine for distribution -- is woven into the book as part of a CIA effort to damage Clinton. In nonpartisan style, the book contends President Bush was also deeply involved in the Arkansas program.

"The guy has got a real problem with the truth," said Wally Hall, sports editor of the Arkansas Democrat-Gazette, and a social acquaintance of Reed's. According to the book, he and his wife were dining with Hall and his wife at a Mexican restaurant in Little Rock one night when a Clinton aide summoned Reed to a van outside. There, according to the book, Clinton sat in a swivel chair smoking a marijuana cigarette and discussing CIA business. Hall said he never dined with Reed at that restaurant, or anywhere else where Clinton was present.

The Seal Connection

Whatever the ratio of fact to theory, the book has struck a minor nerve, playing off the sort of anything's-possible-in-Arkansas sentiments that have fueled some of the wilder notions about Clinton's Whitewater land deal and his rise to power. The 550-pager hit the bestseller list briefly in California, and has been one of the biggest hits, with 50,000 copies in print, for publisher SPI Inc. Reed says he has done more than 100 hours of local radio interviews and is negotiating for a book tour of the Wal-Mart chain.

One of the reasons for the interest, perhaps, is that the book combines enough verifiable facts with Reed's theorizing to keep the story rolling. Reed did work for several years in Little Rock, part of the time in a business with Hubbell's father-in-law. Some of the key relationships described in the book did exist in some form, though the individuals involved say the book's interpretation of them is wildly inaccurate.

Barr, for example, once worked for the CIA as a lobbyist, but says he did no work for the agency after a stint on Capitol Hill in the 1970s.

The Iver Johnson arms company near Little Rock, which the book portrays as being at the center of the gun-manufacturing effort, did ship a load of weapons to Nicaragua through a Mexican distributor, according to former plant engineer J.A. Matejko. But Matejko, described in the book as part of the CIA plan, says the rifles were M-1s, not M-16s, and that the incident led the company to at least temporarily lose its export privileges.

Russellville, Ark.-based Park-O-Meter Inc., owned by Webb Hubbell's brother-in-law Seth "Skeeter" Ward Jr., did make some gun parts for Iver Johnson, another relationship characterized in the book as part of the CIA weapons scheme. But Ward said the parts were firing pins, not M-16 bolts as the book contends, and that it was casual business arranged by a company salesman, not, as the book describes, CIA work strong-armed out of the agency by Ward's father, Seth Ward Sr.

Reed "is a perfect example of someone who is a legend in their own mind," said the younger Ward, attributing the stir over Reed's book to "Clinton hype."

Finally, there is the enduring mystery of Seal, which lies at the core of the tale and makes almost anything seem possible. Seal was a garrulous smuggler who, facing a prison sentence in Florida in the mid-1980s, instead went undercover for the DEA, according to Robert Joura, the assistant special agent in charge of the agency's Houston office and the agent who coordinated Seal's undercover work. According to Joura and Arkansas State Police investigative records, Seal was based in Baton Rouge, La., but frequently visited Mena to have his planes, including a C-123 transport, serviced and modified for long-range flight.

Along with helping the DEA, Seal, according to Joura, was enlisted by the CIA for one sensitive mission -- providing photographic evidence that the Sandinista regime was letting Colombian cocaine move through Nicaragua. Joura said he and Seal met with two CIA agents to arrange for remote-controlled camera equipment and plan the trip.

North, now a candidate for the U.S. Senate from Virginia, said recently through a campaign aide that he was kept aware of Seal's mission through "intelligence sources." And ultimately the pictures Seal brought back helped build support for American military aid to the contras.

The pictures were later published, which compromised Seal's identity and ruined two other missions the DEA was planning, Joura said. Seal, said Joura, had purposefully placed himself in all the pictures as proof of his involvement. In 1986 he was gunned down outside a Salvation Army halfway house in Baton Rouge.

In yet another conspiracy-stoking morsel, the C-123 used by Seal was the same one later piloted by Eugene Hasenfus when he was shot down over Nicaragua while piloting illegal U.S. arms shipments to the contras in 1986. That event helped ignite the Iran-contra scandal. Hasenfus, in a phone interview from his home in Wisconsin, said his use of Seal's old plane was sheer coincidence.

Seal was a flesh-and-blood adventurer. His brother Wendell says he may have helped transport government goods as far back as the Bay of Pigs, and by the end of his life had become entangled in so many relationships "it was hard to tell who were the good guys and who were the bad guys."

He was also, first and foremost, an entrepreneur. His wife, Deborah, said she was not privy to all of his activities, but assumed they ran the gamut. She believes she overheard him once discussing a shipment of guns to South America on the telephone, but also saw "shopping lists" around the house for such items as bluejeans and rubber rafts. Joura said he once helped Seal load his plane with Froot Loops and other consumer goods in demand among the cartel.

But, according to Joura, Seal almost certainly was not at the center of any larger conspiracy. Far from being deep into work for the CIA, Joura said Seal would break down crying sometimes out of fear of being sent to prison. He agreed to the one mission for the CIA in a vain hope that the agency would write a letter helping him avoid jail, Joura said. When Seal came up for sentencing in a separate case in Louisiana, Joura said, the agency shunned him completely, to the point of even denying any knowledge of the agents Seal and Joura met with.

Seal "was no James Bond," Joura said. "There were a lot of desperate days with Barry. ... If he had an ace in the hole and had been doing all this stuff for the CIA ... he would have alluded to something."

Guilty by Association?

Seal's frequent trips to Mena did arouse the suspicion of local, state and even some federal officials, who began investigating a possible smuggling ring.

The agents involved say the investigations were never completed to their satisfaction, nor were they given a full explanation of Seal's work for the government. To this day they suspect Seal's work in Mena went beyond his ties to the DEA, its true nature sheltered by authorities higher in the government.

Former IRS investigator William Duncan, for example, says he documented about $250,000 that was laundered through local banks in Mena by associates of Seal's, cash Seal apparently used to pay for modifications to his planes.

But Duncan, who is now a Medicaid fraud investigator with the Arkansas attorney general's office, says he was never allowed to follow what he suspected was a larger trail of funds to financial institutions in Little Rock, and it plagues him still.

"I can assure you there was a coverup. ... Everything I did tells me there was," said Duncan.

But was it the CIA's money, as Reed's book contends? Barry Seal's? Or someone else's?

Seal testified before Congress once that he earned as much as $50 million during his years as a smuggler. The IRS took him at his word and billed him for it, but his wife and her attorney say that if he collected that much, he left no map to the treasure. The money was either spent, Joura and others speculate, on Seal's endless array of vehicles, boats and electronic gadgets or hidden somewhere only he knew about. Seal always acted as if money was no concern to him, Joura said. He handled his own substantial plane repair bills while working for the DEA, Joura said, and spoke of the apparent theft of $1 million in Krugerrands as if it was unfortunate but not devastating.

Meanwhile, Mena Mayor Jerry Montgomery said he suspects the town's reputation is a drag on its economy. Otherwise why, after seven years of begging, is the federal government still unwilling to help Mena expand its notorious airstrip?

Seems a CIA covert landing base ought to get some respect, but Montgomery said the city has had no luck so far, even though the airport and various painting, upholstery and mechanical companies located around it are economic mainstays.

Mena's connections, however, may finally be of use. Montgomery said he recently wrote White House Chief of Staff Thomas F. McLarty for help in securing the $2 million Mena needs to start landing bigger planes.

"People here are very peaceful and quiet," said Montgomery. "We feel we have a very clean environment."

Of course, shortly thereafter, McLarty was demoted ...