PanAm Scam   

How two self-styled intelligence agents took the news media for a ride.

Michael Schafer is a 39-year-old American who owns a floor cleaning company in Atlanta. In late April, he received a phone call notifying him that his photo was in the current issue of Time magazine. Schafer found a copy and began leafing through the cover story, "The Untold Story of Pan Am 103." Near the bottom of page 31 was a passport-size photo. It was his picture. But the caption identified the person as "David Lovejoy, a reported double agent for the U.S. and Iran."

"I just couldn't believe what I was looking at," says Schafer. "There it was in front of millions and millions of people – Time magazine accusing me of being a terrorist!"

Time obviously screwed up. Publications, even ones as reputable as Time, make mistakes. But in this case, misidentifying Schafer was only one indication that something was amiss. More troubling was the article's reliance on self-described "intelligence operatives" who had already convinced a number of news organizations, including ABC, NBC and Barron's, as well as the now-defunct Pan American World Airways, that they knew the true story behind the December 1988 bombing.

Time not only ignored evidence that contradicted key elements of its story, but it also discounted information that disputed the credibility of its two main sources. The fact that both sources had a financial interest in the story should have made the magazine even more skeptical: They were paid consultants for Pan Am attorneys fighting a multimillion - dollar negligence claim by the victims' families, who alleged the

airline's careless baggage handling allowed the tragedy to happen. If Time's sources were correct in their contention that U.S. undercover agents could have prevented the bombing, Pan Am probably would not be found liable.

The Time story and similar ones preceding it have been dismissed as baseless by U.S. and British officials who investigated the bombing. Nevertheless, Time editors insist their story is accurate. "We stand by this story as a good faith effort to explain the bombing," says John Stacks, Time's chief of correspondents. "This piece went through the same vetting procedure as all other articles."

The "Untold" Story

Time's April 27 cover story, written by veteran correspondent Roy Rowan, described a conspiracy involving U.S. agents of the CIA and Drug Enforcement Administration (DEA) who allegedly collaborated, wittingly and unwittingly, in a Byzantine plot in which terrorists and drug traffickers bombed Pan Am 103 on December 22, 1988. It killed all 259 passengers and crew members as well as 11 residents of Lockerbie, Scotland, where the plane crashed.

The story, according to Rowan, goes like this:

• In the late 1980s the CIA operated a "freewheeling" unit in the Middle East, known as COREA, that trafficked in "drugs and arms in order to gain access to terrorist groups." The CIA and the DEA also was secretly cooperating with a Syrian drug trafficker and arms dealer named Monzer al-Kassar. In return for his help in obtaining the release of U.S. hostages in Lebanon, COREA allowed al-Kassar to ship drugs to the United States on U.S. airlines. Meanwhile, the DEA was using al-Kassar's drug-smuggling ring in a sting operation designed to flush out drug dealers in Detroit, Los Angeles and Houston – cities with large Arab populations.

• At about the same time, Syrian terrorist Ahmed Jibril, head of the Popular Front for the Liberation of Palestine-General Command, was contracted by the Iranian government to avenge the downing of an Iranian Airbus by the U.S.S. Vincennes in July 1988. Jibril solicited and received al-Kassar's pledge to help by using his "CIA-assisted drug and arms business" to plant a bomb on an American plane. Al-Kassar was "reluctant" to get involved because he didn't want to disrupt his profitable smuggling operation, but he went along with the plan.

• Jibril had an additional motive for the bombing: He wanted to eliminate a U.S. "intelligence team" that was working on a plan to rescue American hostages in Beirut.

U.S. military intelligence official Charles "Tiny" McKee, who had been stationed in Beirut to collect information on the whereabouts of American hostages, learned of the CIA's secret COREA unit. McKee had complained to the CIA about COREA's ties to al-Kassar, but the agency had failed to respond. Furious at the agency's silence, McKee and four other U.S. intelligence operatives "decided to fly back to Virginia unannounced and expose the COREA unit's secret deal with al-Kassar."

• Tehran found out about McKee's plans from an American double agent named David Lovejoy, "a one-time State Department security officer." Armed with this information, Jibril's group was able to target McKee and the other officials who had flown from Cyprus to London, where they changed planes, boarding Pan Am 103. To do this, the terrorists – with al-Kassar's assistance – switched a suitcase containing a bomb for a suitcase containing drugs and loaded it onto Pan Am 103 in Frankfurt. The plane picked up the McKee team and others in London.

• Al-Kassar wasn't involved in selecting the target or the date of the bombing. But after an Israeli agent warned German and U.S. intelligence agents about a terrorist attack on a U.S. airliner leaving Frankfurt "on or about December 18," al-Kassar – "playing both sides of the fence" – told COREA that Pan Am 103 was Jibril's "most likely target." The CIA could have foiled the plot, but, as one purported source charged, the agency "knew about it and screwed up."

The Mistold Story

In 1990 the independent President's Commission on Aviation Security and Terrorism examined the same allegations – initially raised in 1989 – and found "no foundation for speculation in press accounts that U.S. government officials had participated tacitly or otherwise in any supposed operation at Frankurt Airport having anything to do with the sabotage of Flight 103." More recently, officials at the Justice Department, FBI and DEA have called the Time story – and the stories by ABC, NBC and others that preceded it – fabrications. And the findings of the U.S.-British Pan Am 103 investigation – the most comprehensive counterterrorist probe in history – completely contradict the Time cover story. The bombing inquiry included hundreds of investigators who spent three years on the case, conducting more than 14,000 interviews in 53 countries.

Initially the investigators concluded that Syria and Iran were responsible. But in the summer of 1990 the investigation took a dramatic turn, and in November 1991 the U.S. Justice Department obtained the indictments of two Libyan intelligence agents, Abdel Basset Ali al-Megrahi and Lamen Khalifa Fhimah, on charges they conspired to bomb the plane.

According to the indictments and other government and airline records, a remnant from a microchip in the bomb's timer identified in mid-1990 showed that the timer was one of many acquired by Libyan intelligence operatives and that the suitcase containing the bomb was loaded onto an Air Malta flight and transferred twice : at Frankfurt Airport onto a Boeing 727 with the Pan Am 103 flight number, and again onto a Boeing 747, also called Pan Am 103, at London's Heathrow Airport. According to U.S. officials, the evidence was further buttressed by a Libyan government agent who defected to the United States last year.

The indictments generated some controversy, leading several critics to charge that the U.S. government might be engaged in a cover-up. Some victims' families alleged that the indictments of the Libyans – and the fact that no Syrians were named – were a reward for Syria's involvement in the Desert Storm campaign and an attempt to persuade Syria to help win the release of American hostages. President Bush rushed to claim that the indictments exonerated Syria. "Syria took a bum rap on this," he told reporters.

Time exploited this controversy to advance a radically different explanation for the bombing, one that was being promoted by, among others, an ex-Israeli named Juval Aviv.

In fact, Time's investigation appears to be drawn largely from a report assembled by Aviv, now a U.S. citizen. Aviv is president of Interfor, a New York-based international security firm hired by Pan Am's attorneys in June 1989 to build a case to defend the airline from negligence charges.

Less than three months after Pan Am hired Aviv, he "solved" the mystery of who carried out the bombing. Claiming to have collected information from his own sources – none of whom he would identify – Aviv assembled a 26-page report and later made it available to the press. Two-and-a-half-years later he would give a longer version to Time. A line-by-line reading of Rowan's article and the updated Aviv report shows that Rowan repeated many of its most controversial allegations.

When carefully scrutinized, Aviv's report turns out to be a mixture of unsubstantiated declarations, previously reported arcane facts, and widely known information (such as the fact that passenger Khalid Jaffar initially was considered a suspect in carrying the bomb aboard the plane in Frankfurt) – all woven together in a tapestry of demonstrably false and largely uncorroborated theory. Aviv even asserts that German intelligence agents gave the CIA a videotape of the bomb being put aboard the plane. He claimed to have seen the video and promised reporters he would obtain a copy – a promise he has never kept.

Equally problematic is Aviv's background, which is decidedly different than what he told Pan Am and the press. Aviv says he worked for the Mossad, Israel's secret service. He also has claimed that he was personally responsible for tracking down and killing the Palestinian terrorists who massacred 11 Israeli athletes at the 1972 Munich Olympics. Rowan acknowledges that "Israeli and U.S. intelligence sources deny Aviv was ever associated with Mossad," but does not challenge further Aviv's background and repeats Aviv's claim that he was a Mossad agent.

Staff members of the the President's Commission on Aviation Security and Terrorism checked Aviv's background and concluded that he had "fabricated" his credentials. The commission also had received a May 1990 report from Yigal Carmon, Israel's top counterterrorism official, which states that Aviv "never worked for the intelligence community of the State of Israel" and that the only connection he had to security work was a job he held as a "junior security officer" for the Israeli airline El Al. He was fired in April 1974 after less than 18 months work for being "unreliable and dishonest." Aviv, the report further notes, "has been involved during the years (after being dismissed from El-Al) in various acts of fraud and impersonation."

Vincent Cannistraro, former head of the CIA's Pan Am 103 investigation, says Aviv was never in Israeli intelligence and that "none of his allegations have any basis in fact. He's a fabricator and a scam artist."

Aviv refused to be interviewed for this article.

The Observer Weighs In

Because his report lacked substantiation, Aviv might have been ignored by the media except for one development: Once Pan Am received his report in October 1989, its lawyers issued subpoenas to the CIA, DEA, FBI and other government agencies. The detailed descriptions in the subpoenas reiterated Aviv's claims.

To some journalists, the fact that Pan Am had issued subpoenas seemed to legitimize the charges. Within weeks, the combination of the subpoenas and the "leak" of Aviv's report resulted in a spate of headlines in Britain and the United States.

In response, the U.S. Senate and House intelligence committees asked for briefings from the CIA, FBI and Pentagon about Aviv's charges. In a series of classified briefings in November and December 1989, CIA and FBI officials told the committees there was no substance to the allegations.

The first journalists to report critically on the Aviv report were John Merritt and Simon de Bruxelles of the London-based Observer. In November 1989, Merritt began to scrutinize the few allegations that were subject to independent verification.

Merritt and de Bruxelles went over the report with painstaking detail. For example, Aviv had alleged that terrorist-drug trafficker al-Kassar had rented a car from a Paris car rental agency on November 25, 1988, and driven it to Frankfurt and back. But Merritt obtained the rental agency's records and found that no car rented at that time logged enough miles to cover such a trip. The Observer reporters also found that COREA – which Aviv (and later ABC, NBC and Time) claimed was a CIA unit or operation – was in fact the "designated code word for communications [among an official] group of police, customs, and intelligence services cooperating in Europe" on terrorism and violence. The group, TREVI, has an office in Brussels. Despite Merritt's findings, Aviv's misrepresentation of COREA as a renegade intelligence unit would be repeated by the media for the next two-and-a-half years.

Merritt also found that Aviv's report contained passages about European law enforcement surveillance of al-Kassar that were similar to those in an obscure 1984 German nonfiction book ("Der Pate Der Terroriste" by Manfred Mohrstein) that has never been translated into English.

"Aviv had pieced together known events and facts together in a wild conspiracy," Merritt says. "He's never been in the Mossad."

The Retold Story

The Aviv conspiracy story died down until late October 1990, when a slightly newer version was broadcast as the lead news item on NBC and ABC evening and morning news shows. Instead of blaming the CIA for allowing the tragedy to happen, the two networks shifted the spotlight to the DEA.

NBC's Brian Ross reported that terrorists may have infiltrated a DEA undercover drug sting in which a 20-year-old passenger with dual Lebanese-U.S. citizenship, Khalid Jaffar, had been working as an informant and courier for U.S. agents. NBC reported that terrorists had secretly switched a suitcase containing a bomb for Jaffar's suitcase, which contained heroin. NBC said the name of the DEA Beirut-Cyprus-Frankfurt-Detroit drug operation was "Courier." ABC's Pierre Salinger reported the same allegation, but said the DEA drug operation was called "Corea" and was discontinued two months before the bombing. Salinger also suggested the DEA was involved in a cover-up. Despite competitive pressures, CBS refused to air the story.

Ira Silverman, Ross' producer at NBC, says the network's story was triggered by the fact that DEA was "calling in their own people – sources and subsources – to determine for themselves whether DEA operations were connected to the bombing." He says that he and Ross were concerned that DEA may have lost control of some of its informants, who may have been providing terrorists information about DEA sting operations.

Salinger says he stands by his story. "The fact that there was a drug operation in Frankfurt and in Cyprus was verified and the fact that the drug operation was called off a month before the Pan Am 103 bombing also has been verified," he says. However, Salinger acknowledges, "There is no proof of the connection between the drug operation and the bombing."

Besieged by inquiries from the press and Congress – which announced it would hold hearings – the DEA accelerated its investigation. Within a week the agency reviewed every file from the previous five years and sent inquiries to its agents overseas. The evidence collected by the DEA – and independently confirmed by the FBI – showed that the allegations reported by NBC and ABC were baseless.

The DEA produced a 350-page classified report in November 1990, released information to reporters, and then sent agency officials to testify in open congressional hearings in mid-December. According to the agency, there was no DEA operation or unit named "Corea," "Courier" or anything similar to that name. Passenger Jaffar had never been used as an informant or subsource, and no DEA office or agent ever had any contact with him. According to FBI and Scotland Yard forensic analyses, Jaffar's two pieces of luggage showed no signs of explosives or drugs – a conclusion publicly confirmed by Scotland's Fatal Accident Inquiry Board. (If one of Jaffar's bags had been "switched" after checking in, then that bag would have remained in Frankfurt. But both of his bags were accounted for.) Finally, there had been no "controlled deliveries" of drugs or sting operations through Cyprus or Frankfurt since 1987. There had been three controlled deliveries through Frankfurt between 1983 and 1987, but none involved Pan Am planes.

Still, some journalists were not convinced. In its December 17, 1990 issue, Barron's published a lengthy article reporting virtually everything in the Aviv report. The conspiracy theory would not die.

A New Source

The reports by NBC and ABC were also based on information from a new player in the conspiracy story: Lester Coleman. Coleman, who said he was a top operative for both the Defense Intelligence Agency (DIA), an arm of the Pentagon, and the DEA in the Middle East, had been hired by Pan Am in mid-1990 to assist in the Pan Am 103 investigation.

To journalists and Pan Am attorneys, Coleman was a dream come true. He said he was willing to talk about everything he knew – including a purported DEA sting operation that he believed led to the bombing of Pan Am 103. Coleman alleged that passenger Jaffar was one of his "informants" who served as a U.S. courier from Lebanon via the Frankfurt Airport as part of a DEA-sanctioned sting operation.

Conspiracy supporters claimed that Coleman's allegations independently corroborated Aviv's story. But, in fact, Coleman had teamed up with Aviv earlier in 1990 after reading about Aviv's investigation. An internal November 1990 DEA memo reported that Aviv told a DEA agent that Coleman had contacted him several months before and that "Coleman was approaching different people offering to sell information about the Pan Am 103 bombing." Journalists who were in regular contact with Coleman also confirmed that he collaborated with Aviv. By the time NBC and ABC interviewed Coleman, he had worked out his story with Aviv.

Coleman also was a principal source for Time's cover story a year-and-a-half later. Rowan reported Coleman's allegations as facts, repeating his description of himself as a top DIA agent working undercover for the DEA in Cyprus and intimately involved in covert "controlled drug operations" for the U.S. government. Calling Coleman Pan Am's "key witness," Rowan wrote that Coleman "spotted a newspaper picture of one of the Pan Am victims" and recognized him as one of his "drug-running informants" from Lebanon – Khalid Jaffar. Coleman, said Rowan, then contacted Pan Am.

Rowan quoted a source who suggested that Coleman was arrested in May 1990 in the United States on "trumped-up charges" in order to keep him quiet. Coleman, Rowan wrote, is now "hiding in fear of his life in a small town in Europe." In fact, Coleman fled the United States rather than stand trial after his arrest for passport fraud.

The charge of passport fraud is a minor indication that Coleman may not be completely honest. DEA documents, court records and interviews with journalists and government officials show him to be someone who operated at the periphery of U.S. government agencies but repeatedly exaggerated his work and involvement in anti-terrorist and anti-drug operations.

Rather than serving as an agent, DEA files state that Coleman was a freelance journalist in the Middle East who also worked as a U.S. informant. Coleman is married to a Lebanese woman, and therefore has an identity card that allowed him to move freely in and out of Lebanon.

An internal DEA memo states the agency hired Coleman on January 31, 1986 as a "confidential informant" in Cyprus for a 10-month period and again between February 1987 and June 1988. He was hired, according to the memo, after he "offered to video record the opium/cannabis production in Lebanon." But in June 1988, Coleman was "deactivated" by the DEA for "unsatisfactory behavior," which included selling DEA information illegally to Soldier of Fortune magazine and "obtaining goods and services" on Cyprus under "false pretenses." Coleman's file at DEA states that he had been "caught up in a quagmire of fabrications with DEA, the Cyprus Police Force and his] subsources and other associates in Cyprus."

To bolster Coleman's credibility, Rowan reported that Micheal Hurley, DEA's country attaché in Cyprus, "admitted in a Justice Department affidavit that he had paid Coleman $74,000 for information." But Rowan omitted nearly everything else in Hurley's detailed nine-page affidavit. Hurley stated flatly that there was no substance to Coleman's assertions and that Coleman had misrepresented his activities, bounced checks to subsources, and had been banned from Cyprus for failing to pay his bills.

Furthermore, Rowan didn't contact Hurley. Had he done so, Hurley says he would have provided him with a transcript of a tape-recorded telephone call between Coleman and a friend in which Coleman admitted that he never met Pan Am 103 passenger Jaffar – whom Coleman had identified as "one of his drug-running informants" to Time, NBC and ABC.

Besides U.S. government agencies, several journalists also have discovered Coleman has credibility problems. For example, Atlanta Journal-Constitution reporters Ron Martz and Lloyd M. Burchette Jr. went to Cyprus in 1988 to do research for a story on drug trafficking and terrorism. They hired Coleman as a consultant.

"Les promised to provide us access to all sorts of people and it's clear that he had greatly exaggerated his contacts," Martz says. "We soon found out what the Cypriot police already knew: He was a wannabe, scurrying around on the fringes... He was a great fabricator; he had a great ability to spin a yarn. I'm embarrassed to say that he even convinced me."

Burchette, now a screenwriter, recalls that Coleman continuously ran up hotel and telephone bills without delivering on any of his promises. "We were suckered," he says. "Coleman was a first-rate liar."

Following his arrest for passport fraud in May 1990, Coleman unsuccessfully tried to get DEA officials to quash the case against him. Embittered both by his termination from DEA and by the agency's refusal to protect him, Coleman apparently sought revenge, in particular against DEA agent Hurley, who had fired him. Revenge – in the form of the phony Pan Am story – would prove to be financially rewarding as well.

In a telephone conversation with Burchette in November 1990, Coleman said that he had provided information to ABC and NBC and that Pan Am was paying him for his information. "Coleman was snickering that he had pulled the wool over the networks' eyes," Burchette recalls. "He even admitted to me that he didn't know who Khalid Jaffar was." Coleman had just told ABC and NBC – and they reported – that Jaffar was a drug courier for the DEA.

The two networks were the first of many media outlets to be misled by Coleman over the next year. For example, in the Sunday (London) Times on July 22, 1991, Coleman's assertions – ranging from his claims about being an intelligence agent to his allegations about a drug sting aboard Pan Am 103 – were again reported uncritically.

The payoff for Coleman, who along with Aviv was working for Pan Am, has been significant. The two men have been paid tens of thousands of dollars by Pan Am's attorneys, according to officials close to the case. Pan Am's law firm, Windels, Marx, Davies & Ives, would not comment.

Having conned journalists about their inside knowledge of the bombing of Pan Am 103, Aviv and Coleman began plugging into other conspiracies fanned by various American reporters. INSLAW, a small company that alleges the Justice Department stole computer software from it, retained Aviv as an investigator. Prominent television shows such as "Nightline" and "60 Minutes" also have used Aviv as a consultant. Meanwhile, Coleman provided INSLAW with an affidavit claiming he has evidence linking the DEA, the Iran-contra scandal, the BCCI scandal and the INSLAW affair.

Like Aviv, Coleman refused to be interviewed for this article.

More Problems

Aside from its acceptance of Aviv and Coleman's allegations, Rowan's story had a number of other half-truths, misstatements and omissions. Among them:

• Rowan reported that in January 1990, Aviv, a Pan Am attorney and a "polygraph specialist" administered lie detector tests to two Frankfurt Airport Pan Am baggage handlers suspected of allowing the bomb on board. Rowan reported that both men had flunked their tests and that the polygraph specialist said one was "not truthful" when he denied that he switched suitcases.

Rowan neglected to point out that all of the court rulings in the Pan Am 103 case, in addition to FBI and Scotland Yard investigators, have dismissed as totally baseless allegations that the baggage handlers had anything to do with the bombing.

• Rowan also reported that the terrorists got the bomb aboard Pan Am 103 because they knew in advance which flight the targeted intelligence agents would be taking. In fact, at least three of the agents made their travel arrangements within 48 hours of the flight. Moreover, the agents flew from Cyprus to London. Rowan never explained how or why terrorists would place a bomb on a plane in Frankfurt in order to target agents travelling on a different route. Moreover, Rowan failed to report that the first leg of Pan Am 103's flight from Frankfurt to London was on a Boeing 727. In London, 49 out of the 125 passengers transferred to a Boeing 747 – also called Pan Am 103 – bound for New York. It was the second plane that blew up over Lockerbie.

U.S. and British investigators concluded that the fact that McKee and four other U.S. intelligence agents were aboard Pan Am 103 was a tragic coincidence.

• Time did not reveal a potential conflict of interest. Aviv, a key source for Time's Pan Am story, had been working on a project with Rowan for Time's sister company, Warner Books. The publishing company had paid "seed money" to Rowan and Aviv to explore the possibility of the two collaborating on a book about Aviv's life, according to Rowan and Nancy Neiman, a Warner Books executive vice president. Rowan says he could not substantiate enough of Aviv's biography to warrant the project, so he returned the unused portion of the money he had received. Aviv, however, did not return his unused portion, according to sources at Time. Neiman would not comment.

Time Chief of Correspondents Stacks said the Warner deal was completely separate from Time. "Time did not pay Aviv anything," he said. "This wasn't checkbook journalism."

The Lawsuit

The civil lawsuit pitting the victims' families against Pan Am's insurers was scheduled to begin last spring. The Aviv-Coleman conspiracy theory – essentially Pan Am's defense – would be put to the test. The stakes were enormous: If the jury found that the airline's security program had been negligent, Pan Am's insurers would be liable for hundreds of millions of dollars. Pan Am itself had gone bankrupt in January 1991 and went out of business last December.

The Time cover story appeared a week before the opening of the trial on April 27. Much of Rowan's story was taken from court records and exhibits filed by Pan Am's attorneys before the trial, which included material supporting the Aviv-Coleman allegations. But Pan Am's attorneys never introduced their "key witness" Coleman, Aviv, or the allegation that terrorists infiltrating a CIA-DEA drug sting.

According to sources familiar with the defense strategy, Pan Am's attorneys began having doubts about Aviv and Coleman two years ago. Even so, they went along with the conspiracy story because it was their only hope of winning the case. But when the defense attorneys apparently realized that their prize witnesses and their story would be torn to shreds under cross examination, they withdrew the witnesses. Even so, the Aviv-Coleman story showed up on the cover of Time just one week before the trial.

Rowan's story was not the first time allegations similar to those outlined in the Aviv report surfaced just before judicial proceedings on the bombing. As David Leppard, author of "On the Trail of Terror," a book on the bombing, pointed out in an article he wrote for the Washington Post in late April, Time's "untold story of Pan Am 103" "appeared twice before under similar circumstances... In autumn 1989, in the midst of evidence-taking in Frankfurt that proved highly critical of Pan Am, the story surfaced in the British and U.S. media. A year later, on the eve of the 1990 inquiry in Scotland, an identical item was reported on NBC-TV."

Two days after the Time story appeared, attorneys for the victims' families, in a letter to the court, charged that Pan Am's attorneys were trying to sow confusion in an effort to influence the 550-member jury pool. In the letter, lead attorney Lee Kreindler stated that "false information..appears to have been given to Time by the defendants."

Nevertheless, the strategy didn't work. On July 11, a jury found Pan Am liable for "willful misconduct" in its sloppy baggage handling that allowed the bomb on Pan Am 103.

False Accusation

Time's Rowan stands by his story. He says he independently confirmed the substance of his article and cites the fact that other "stories had also reported these things."

He says Aviv and Coleman correctly identified COREA as a secret CIA unit dealing with drugs and weapons. "I buy the notion that COREA was a rogue unit," he says. "I have talked to another intelligence agent. But I can't tell you his name."

As for the other allegations in his article, Rowan says, "I only used from Aviv what I could corroborate from another source. There were a lot of things in his report that I could not substantiate and I did not report them. In the case of Coleman, I used things for which I had documentation either from him or from other sources. A lot of people in the government would like to discredit Coleman. I haven't found anything that he told me that was proven wrong.

"We made one mistake in identifying [Schafer as] Lovejoy," he acknowledges, "but that wasn't Coleman's error."

Michael Schafer and his attorney complained to Time about the false accusation. Time acknowledged in a one-paragraph "correction" four weeks after the Pan Am story was published that the photo was actually that of Schafer and stated it "regrets that Schafer's photograph was used in error." Time said that the photo was "identified in court documents as being of David Lovejoy, a reported double agent for the U.S. and Iran." But how did the photo get into the court records?

Former Atlanta Journal-Constitution reporter Burchette believes the picture was given to Pan Am by Coleman, who had worked with Schafer when the latter was a cameraman for the Christian Broadcasting Network (CBN) in Lebanon in 1985. Burchette recalls that one day in May 1988 in Cyprus, Coleman showed him a letter of identification stating that Michael Schafer "is a representative of CBN News assigned to the Beirut bureau." It included a photo of Schafer – the same photo Time said was "David Lovejoy" – and was signed by Coleman, who was a CBN senior correspondent at the time. A copy of this letter of identification shows that the photo of Schafer and that of "Lovejoy" are exactly the same.

"Coleman never thought the picture would ever end up in Time," says Burchette. "He just thought that Pan Am would buy it and that would be it." l