that year told her that not only could she recoup her losses and then some but simultaneously serve her country. The U.S. Government, he said, farmed out contracts to private firms for an extraordinary purpose: returning to federal coffers some of the government bonds, gold, cash, and other valuable items distributed to America’s allies, in some cases going decades back. Whether they were first allocated as foreign aid, secret payments, or other forms of funding from Washington, D.C. was not evident.
Keller, according to Sholtz, explained that once the booty was returned to the U.S., they could be converted into high-yield securities able to generate revenue. Contractors involved in this so-called repatriation or extraction effort could use the interest from the securities for their own businesses and charitable purposes before delivering the items back to the U.S. Treasury. Sholtz said Keller introduced her in Las Vegas to a cadre of men supposedly able to pull off these sensitive extractions. Many of them had CIA and military special forces backgrounds, and she said Keller told her it was “normal business” to employ them. “He said, ‘You’re special, the government has been watching you.’ I fell for it hook, line and sinker.”
Sholtz wasn’t exactly dispassionate about the older Keller in those days. In fact, she was in a romantic relationship with him, impressed by his smarts, interests, and charms. “He swept me off my feet,” Sholtz said. “He had that Southern air about him.” So, during the same summer the Monica Lewinsky scandal exploded, Sholtz, then thirty-three, launched a money-retrieval mission dubbed Operation Bald-Headed Eagle. Its specific target was a pallet of boxes stashed near the Philippine capital of Manila allegedly containing $20 million in mid-1930s U.S. Federal Reserve notes, plus German bonds, platinum bars, and other commodities of mysterious origin and undisclosed value. Based on her correspondence, Sholtz seemed transfixed by it all.
With the money she expected to rake in, Sholtz said she hoped to pave over the financial hole she claimed Keller created for her, re-capitalize her companies and support local philanthropies. To accomplish this trifecta, she founded a “charitable trust” supposedly blessed by the United Nations to take initial possession of the goods, memos show. Sholtz said one of the lawyers assisting her set up Gold Ray Ltd., which was chartered in the British West Indies. Technically, her companies, Automated Credit Exchange and its parent, EonXchange, were not part of Gold Ray. Like the Iran-Contra scandal of the late-1980s, Operation Bald-Headed Eagle married profit to American foreign policy. In the place of the enterprising, buck-toothed Colonel as its shot-caller, it was an entrepreneurial economist who seemed to fancy herself as an Olivia North.
Mission financing was not quite as daring as selling arms for hostages, but it was dicey, nonetheless. According to a September 14th, 2004, memo by Kathy Phelps, the lawyer for the court-appointed trustee overseeing Sholtz’s bankruptcy proceedings, an outwardly normal series of RECLAIM trades actually was Sholtz misappropriating roughly 500,000 credits owned by clients Chevron Corporation, Mobil, and oil-and-gas producer Aera Energy, which she then sold to power maker Southern California Edison for $1,913,162. In a June 18th, 1998 letter from Sholtz to Edison, Sholtz instructed the utility to pay that amount to a Florida attorney assisting her with Eagle.
Phelps, approached about her memo entitled “EonXchange—analysis of stolen credits,” said she and the bankruptcy trustee handed over evidence about Eagle to the government because it wasn’t their focus. Even so, Phelps wondered if the losses Sholtz incurred from Eagle were a reason why she initiated some of the financial improprieties later alleged. “The depth of what [she] was involved in was extensive,” Phelps said. Shown Phelps’ memo, Sholtz adamantly denied the RECLAIM credits sold to Edison were stolen but conceded she lacked the records to pinpoint where they had originated. “The money we made from the Edison deal was our money!” Sholtz added. “We just sold [Edison] credits we got stuck with from another transaction. It wasn’t some grand scheme.”
The paper trail suggests otherwise. Within days of receiving the windfall from the Edison transaction, it became the down payment on her plan to ferry former U.S. aid from the Philippines, records show. At its core, Eagle involved retrieving the treasure in a meticulously choreographed, special-access transfer from a holding company near Clark International Airport outside of Manila and flying it 7,400 miles to McCarran International Airport in Las Vegas without the usual inspections.
An aviation outfit on Imperial Highway in El Segundo that called itself Air America Holdings, Inc. agreed to transport the goods on an executive Boeing 707. Sholtz negotiated with the firm’s president, who claimed to have been a veteran CIA pilot for the agency’s Air America charter airline, which gained notoriety as an American paramilitary asset during the Vietnam War. The airline later disbanded.
This pilot, in a missive on a conspiracy-focused website, said that after Vietnam ended the CIA formed a new, covert airline under his last name. With the agency’s assistance, he flew missions from 1974 to 1988, delivering arms to Asia, the Middle East, even the Soviet Union. By the late-1980s, he said he shut the charter down because he believed CIA operations were harming U.S. interests. Two years later, he asserted the Justice Department charged him with wire fraud to “silence and discredit” him. The book, Drugging America: A Trojan Horse, also captured his story. The pilot, whose name and others the Weekly is withholding because none of them were charged for their participation in Eagle, did not return phone calls seeking comment.
EAGLE LANDS (SORTA)
Sholtz said this pilot not only told her he was still associated with the CIA; he instructed her on what to write in operational documents. Whether you believe her insistence she was merely the front, and not a ringleader, this was no standard mission. Members of her Eagle team declared holding “diplomatic immunity” and other high-level governmental protections freeing the 707 from customs, immigration, and security scrutiny, Gold Ray letters signed by Sholtz stressed repeatedly.
The team itself was no less formidable. A retired U.S. Army lieutenant colonel with fourteen years in U.S. Special Forces and a Philippine colonel were two of the point men. Another, the overseas lawyer representing the Philippine company maintaining the booty, was once connected to Philippine President Ferdinand Marcos’ administration, several knowledgeable sources said. Sholtz recalled meeting this lawyer to discuss Eagle in Sri Lanka, where she said he told her the loot was given to Marcos’ people by U.S. authorities who supported them. Marcos was deposed in 1986. Emails and calls to the Philippines embassy about the colonel and to the Philippine Bar Association about the lawyer went unreturned.
Sholtz and Air America Holdings settled on a $200,000 fee for the chartered 707 to make the three-leg trip that would take it from Los Angeles International Airport to the Philippines and finally to Las Vegas, invoices show. On June 26th, 1998, the pilot warranted in a short memo to Sholtz that their aircraft would not face the usual restrictions and protocols landing in Las Vegas, implying Nevada airport personnel were in on the caper and that they had lined up a protected spot to unload the plane’s cargo. “This is to certify that entry into and departure from the drop off point of the merchandise has been cleared and traditional formalities for the personnel and merchandise will not be observed,” the pilot wrote. No government body, in other words, was going to be hassling them about the contents of the 707’s belly.
But three weeks later, Eagle had yet to lift off. The jet they intended to use had experienced “severe mechanical malfunctions,” the pilot wrote in a “sincere” apology to Sholtz. “Obtaining an alternate aircraft is not as simple as telephoning a [typical] charter service,” he said in a July 13th letter. “The only aircraft we can utilize must meet rather narrow parameters of ownership, nationality, crew requirements and most importantly range.” As an alternative, the pilot suggested switching to an older, slower, propeller-driven DC-6 or another Boeing 707 standing by in London. Sholtz would only have to pay $25,000 more for the round trips. “Air America also owns a C-130 but this aircraft is considered too high profile for this mission, and is too expensive to operate,” the pilot wrote. “We therefore have discontinued its use.”
Despite the hiccups and apparent pressure that Sholtz felt to hasten the mission, her plan still retained its VIP access in and out of international airports. The retired lieutenant colonel working with the ex-CIA pilot, she wrote July 17th, had “full diplomatic papers” that conferred on him “full diplomatic immunity,” a flag,