vault backup: 2026-10-16 01:25:00

20 - ORGANIZATIONS/PRIVATE/Southern Air Transport.md

@@ -7,7 +7,7 @@ aliases:
   - Southern Air
   - Southern Air Holdings
 created: 2026-05-17
-updated: 2026-10-05
+updated: 2026-10-15
 category: "Private Organization"
 tags:
   - Organization
@@ -68,7 +68,7 @@ Southern Air Transport was incorporated in [[Florida]] on October 31, 1949, as a
 
 The Senate Select Committee to Study Governmental Operations with Respect to Intelligence Activities (the [[Church Committee]]) reported that the CIA bought Southern Air Transport because in June 1960 the [[U.S. Department of Defense|Department of Defense]] and the [[Civil Aeronautics Board]] changed the rules for [[Military Air Transport Service]] contracts, requiring a supplemental certificate and participation in the [[Civil Reserve Air Fleet]], which [[Air America]] could not obtain. Director of Central Intelligence [[Allen Dulles]] approved the purchase on July 15, 1960. Air America management surveyed the 18 remaining supplemental carriers and chose Southern Air Transport, which operated two C-46s; the ownership was kept completely separate from Air America to avoid public hearings, but the new company was to fly on equipment under conditional sale from Air America and with transferred personnel, and the Committee wrote that it "was actually an integral part of the complex from a management perspective," its management decisions made by the same CIA consultant and advisory team that set Air America policy. The Agency later acquired [[Boeing]] 727s that Boeing modified to enlarge the ventral exit for airdrops.[^1]
 
-By 1972 the Agency decided to sell. The DCI on May 5, 1972 approved selling the equity to current management; the Committee wrote that "none of the employees of SAT had ever been an employee of the Agency." An accounting firm valued the company, the asking price was set at $2.7 million for stock plus $3.2 million to pay off a note to Air America, and a former owner, who is not named in the report, made offers in December 1972 and January 1973. The DCI approved a sale at $5.605 million on January 19, 1973 ($2.145 million for stock, $3.125 million in debt and a $335,000 credit). Competing supplemental carriers lobbied [[Congress]], the [[General Accounting Office]] and the General Services Administration against the sale and one offered about $2 million more; on July 31, 1973 the DCI ordered the company dissolved, then on October 1 agreed to entertain a sale if the buyer obtained prompt financing. The sale closed on December 31, 1973 after a $4.5 million loan commitment from the [[First National Bank of Chicago]] on November 29. In early 1974 Southern Air Transport exercised its option on a [[Lockheed]] L-100-30 Hercules for $3.15 million and resold it to [[Saturn Airways]] for $4.35 million; the CIA read this as a breach of the agreement against windfall profit, an arbitrator ruled for Air America on September 5, 1974, and the Agency received an additional $1,304,243. Employees filed a class action in March 1974 alleging the sale was illegal; the federal court dismissed it with prejudice on July 17, 1974. The Agency received $6.47 million in total.[^1] *The [[The Christian Science Monitor]]* reported in 1986 that the buyer was [[Stanley Williams]], who had run the company for the CIA for 11 years, and that [[Lawrence Houston]], the CIA's general counsel at the time of the sale, said that as far as he knew there was no continuing relationship; a company spokesman, [[William Kress]], said Southern had "no contracts with the CIA, nor have we since they owned the airline prior to 1973."[^3]
+By 1972 the Agency decided to sell. The DCI on May 5, 1972 approved selling the equity to current management; the Committee wrote that "none of the employees of SAT had ever been an employee of the Agency." An accounting firm valued the company, the asking price was set at $2.7 million for stock plus $3.2 million to pay off a note to Air America, and a former owner, who is not named in the report, made offers in December 1972 and January 1973. The DCI approved a sale at $5.605 million on January 19, 1973 ($2.145 million for stock, $3.125 million in debt and a $335,000 credit). Competing supplemental carriers lobbied [[Congress]], the [[General Accounting Office]] and the General Services Administration against the sale and one offered about $2 million more; on July 31, 1973 the DCI ordered the company dissolved, then on October 1 agreed to entertain a sale if the buyer obtained prompt financing. The sale closed on December 31, 1973 after a $4.5 million loan commitment from the [[First National Bank of Chicago]] on November 29. In early 1974 Southern Air Transport exercised its option on a [[Lockheed Aircraft Company|Lockheed]] L-100-30 Hercules for $3.15 million and resold it to [[Saturn Airways]] for $4.35 million; the CIA read this as a breach of the agreement against windfall profit, an arbitrator ruled for Air America on September 5, 1974, and the Agency received an additional $1,304,243. Employees filed a class action in March 1974 alleging the sale was illegal; the federal court dismissed it with prejudice on July 17, 1974. The Agency received $6.47 million in total.[^1] *The [[The Christian Science Monitor]]* reported in 1986 that the buyer was [[Stanley Williams]], who had run the company for the CIA for 11 years, and that [[Lawrence Houston]], the CIA's general counsel at the time of the sale, said that as far as he knew there was no continuing relationship; a company spokesman, [[William Kress]], said Southern had "no contracts with the CIA, nor have we since they owned the airline prior to 1973."[^3]
 
 ### Contra resupply and the Enterprise, 1983 to 1986