Stealing Saigon (Metro Newspapers, April 7, 2010)

Stealing Saigon
Gas thieves and rampant corruption contributed to South Vietnam's collapse. Now, the only person convicted of corruption amidst the rampant kleptomania declares his innocence.
April 7, 2010 - by Larry Engelmann
ESCAPEES: On the morning of April 30, 1975, following the fall of Saigon, helicopters filled with frightened people fleeing South Vietnam landed on the deck of the USS Midway. After they were taken on board the choppers were pushed over the side of the ship to make room for more arrivals.
View more photos of South Vietnam's Collapse

GRAHAM MARTIN, the last U.S. ambassador to South Vietnam, was convinced of two things: first, David Simmons had one of the most disturbing and important accounts of the collapse and fall of South Vietnam, and second, Simmons very badly did not want to be found.

I spoke with a dozen other members of the Saigon Embassy staff and they too remembered Simmons and recommended I find him if I wanted a real insider's account of Saigon's last days. Gen. John Murray, the first American defense attaché in South Vietnam and Gen. Homer Smith, the second and last defense attaché, added their voices to the chorus. But nobody had any idea where he was living or even if he was living.

The most surprising assessments of Simmons came from two South Vietnamese generals—the former head of the Air Force and the last commander of Military Region III, the area around Saigon. Each was convinced also that if there was one man more responsible than any other for the defeat of South Vietnam, it was David Simmons.

I asked other witnesses about Simmons. Most didn't have a clue who he was. Not one journalist among the dozen members of the Saigon press corps I interviewed had heard the name before. No one in the CIA station in Saigon could identify him. But the diplomats and generals who knew him and the South Vietnamese officers who remembered him had never forgotten David Simmons.

After a timely tip from a friendly former South Vietnamese lieutenant colonel, I found him. He was not happy when I called and identified myself. He asked how I'd gotten his telephone number and I told him. It was a matter of persistence and luck, I said. I mentioned Gens. Murray and Smith and he responded positively to their names and asked what they'd said about him. After I told him, he said we could meet—once. He gave me his address. I told him I was not far away. I'd be there in 30 minutes.

At the time Simmons owned a small Vietnamese restaurant with his wife in Southern California. Simmons kept the books and supervised the staff—made up mostly of his own children. His wife, who is Vietnamese, was the cook. The family lived in an apartment above the restaurant. There were eight children, Simmons told me. And they were very happy. The children didn't know about his experience in Vietnam and after. He had maintained his anonymity and a low profile.

"Because Gen. Murray recommended you talk to me and because I respect Murray's judgment, we can talk," he said. He asked me to wait for a decent interval of time, though, before publishing his story. And he asked me not to say specifically where he lived. He did not want to be found again.

FAMILY ON THE LAM: David Simmons (bottom right) with his wife, four of his children, and a brother-in-law, in West Virginia after fleeing Saigon. Simmons established a residence near his childhood home, where federal and state authorities arrested him.
Oil for War

"It was so long ago," Simmons began. "It is another world, another life. Strange." He folded his hands on the table and stared down at them. "Gosh," he whispered, after a moment. "It's not easy talking about it."

He said that "the whole Vietnam thing" began for him in 1962 when he arrived in Saigon as a captain in the Army. He performed "a personnel management function" within the U.S. command until his overseas discharge in 1969. After that he remained in country and went to work as an installation manager for Pacific Architects and Engineers (PA&E) in Saigon. When PA&E's contract with the Army expired, Simmons went to work first for the Military Assistance Command Vietnam and then for the Defense Attaché's Office (DAO).

Simmons was hired to work on the military's quality control for petroleum import and distribution. "They offered me the position because I had a background in the petroleum field," he remembers. He worked his way up until he was appointed chief of the petroleum section for the DAO.

Simmons says he found everything "pretty cut and dried in that period of time—until the squeeze came." The squeeze was the decision of the Arab-led Organization of Petroleum Exporting Countries (OPEC) following the outbreak of the Yom Kippur War in October 1973 to embargo oil to the United States and to nations affiliated with it.

Because of Gen. Murray's concern about turning money over directly to governments in Southeast Asia to purchase petroleum, it was decided that Simmons would be the official "petroleum representative" from countries in the region designated "affiliates of the U.S." by OPEC: Thailand, Cambodia, Laos and South Vietnam. The appointment was approved and directed by the U.S. Department of Defense.

"This was all a ruse to find an avenue to continue purchasing refined petroleum products for use by the military in those four countries," Simmons says. His responsibilities were to negotiate contracts with petroleum-producing nations, have the raw product refined through Singapore and oversee imports. He had a staff of two, as well as some Vietnamese secretaries. "So it was a tremendous task to begin with," Simmons says.

"We had to disguise the ways and means of having money transferred so that it could not be traced directly to the U.S. government, and that involved getting the National Bank of Vietnam to accept the money transfers and checks, which I would hand-carry down to them.

"They in turn used an elaborate wire-transfer method to get these millions of dollars moved in two or three days'' time to accounts in Singapore and Hong Kong. Then I had authority to disperse those funds to refining companies and petroleum-producing companies in order to pay for the product."

Simmons was reminded daily that "if this mission fails, the war in Vietnam and in Indochina will stop. Without petroleum products a military effort cannot continue. It stops. It freezes with the engines."

ORPHANS OF THE STORM: South Vietnamese boat people fleeing their country in a small craft arrive in the coastal waters of Hong Kong. These people had been without food or water for several days when British authorities boarded the craft and took this photo of the passengers, some dead, some dying.
Missing Millions

Simmons purchased gasoline, diesel, jet fuel and the other aircraft fuels and lubricants. He was successful, he says, in providing everything the Defense Department approved for South Vietnam and the three other nations he represented.

"It was my job to determine how much was needed on a reality basis," he says. "It was also my job to assure that it was being distributed wherever it was most needed and to determine how much was needed for any particular types of operations that were planned. It was an overwhelming job, really. And no one was there to help me with it."

Eventually, Simmons says, he asked the DAO to assign a Government Accountability Office (GAO) auditor to his office to examine the numbers.

"The volume of things that were taking place, whether or not the product was getting to where it belonged and in the quantities that it was supposed to," he says, was unclear to him. The operation lost all transparency.

"Although we were getting hundreds of Vietnamese officer signatures on receipt documents—who really knew? It was an impossible task."

The product was tested at the delivery points by a Hong Kong contractor, Simmons recalls. "They were there for quality and quantity assurance. But who knows if the numbers they provided were accurate? I had no idea. It was these concerns that caused me to write a letter through Gen. Murray to the GAO saying, 'I think you guys really ought to come in and look at this.'

"First of all, I was concerned for my own tail end. So, GAO came in and took a look. And my attitude was, if GAO doesn't find anything wrong, I'm not going to worry about it."

Simmons says he requested the audit when he realized he'd lost control of a situation involving millions and millions of dollars.

"The majority of the expense of the military budget in any military operation like that is fuel," he says. "And because the price rose from 16 cents a gallon to 40 or 55 cents a gallon overnight, we stretched what was already a huge budget to out of bounds."

Problems multiplied.

Some of Simmons biggest troubles came from problems developed in acquiring lubricating oil. He says a contractor for quality assurance knew about those problems and he offered to get it. Simmons supplied him with a Request for Purchase, and the contractor returned with an offer. Simmons inspected the contractor's facilities, traveling twice to Singapore and once to Hong Kong. He saw storage areas with massive quantities of lubricating oil that met military specifications.

"So I gave him a contract," Simmons says. "And he never supplied the oil. I paid him the money. He disappeared. Who was at fault? I went to prison for it!" he says. Simmons says he still doesn't know if the oil was delivered or not.

He later learned that the contractor had borrowed money from two banks in Saigon. Simmons' wife was associated with one of them, and that made it easier for the contractor to get the loan—a fact Simmons didn't learn about until later.

"She came to me 90 days before we pulled out of Vietnam," he recalls. "And she asked, 'Have you paid this guy for his oil?' And that surprised me since I had never discussed my business with her. So I asked, 'How do you know about him?' Then she told me that he had defaulted on the payments of his loan. The bank asked his wife to find out what had happened, and Simmons told her that he had paid the contractor.

"That is when I should have reported, 'Hey, guys, we've got a conflict of interest.' I didn't do that."

The loans from the Saigon bank were not repaid. The money disappeared in wire transfers from Hong Kong to Saigon.

Even after leaving government service months before the fall of Saigon, Simmons anxiously tried to follow the money. Meanwhile, the North Vietnamese Army was approaching Saigon. The Vietnam War and America's role in Southeast Asia were rapidly coming to an end.

ON THE WAY TO SAN JOSE: Father Joseph Devlin, known as the 'Boat People Priest,' took this photo of three children who came ashore in a small boat on the coast of Thailand in 1979. Devlin, who lived and worked in San Jose, took thousands of photographs of the boat people.
Thievery on High

Simmons says he remembers confronting corruption on a daily basis. And, he adds, "It was by no means restricted to the Vietnamese government.

He recalls a meeting with a Vietnamese Air Force commander, Gen. Tran Van Minh. Simmons demonstrated how much fuel he needed, based on his inventory of aircraft, the number of sorties planned and other factors.

"General Minh's immediate comment," he says, was "'What do we do about people stealing it?"

Simmons says he was stunned by the question and responded, "That's your problem. It's got to be stopped." At that moment, an American Air Force colonel who was in the meeting said, "You have to give them 25 percent allowance for theft."

"I won't do that!" Simmons remembers responding. "But the colonel said, 'You god-damned will do that!'

"The colonels, the captains, the lieutenants in the Vietnamese Air Force were stealing fuel and supplies right along with the corporals, the privates, the sergeants," Simmons says. Every Honda in Saigon was being driven on stolen gasoline. And a lot of it was going to the other side—the enemy was getting it by the truckload from South Vietnamese army officers. We were fueling our enemies as well as our friends."

Simmons looked for some way to stop the theft and sale. "I thought that if I had a means of identifying it, separate from the gasoline on the civilian side, then we might have a means of detecting where it was coming from and perhaps confiscating it and getting it back.

"So I had all military gasoline dyed blue. Not red anymore. But blue. So then you drove down the streets of Saigon and out to Bienhoa and saw all the shops selling gasoline in little bottles, and they were all blue. Who was buying it? The policeman was buying it for his Honda and the sergeant would stop and buy a couple bottles for his Honda on the way home, knowing full well that it was stolen from the military. There was no other way it could have been blue."

There was an additional problem of fuel contamination. There was a slowdown of the military effort at one point because of fuel contamination. "We lost nine aircraft," Simmons says.

"The fuel at Tan Son Nhut Airbase was filthy all of the time. I was scared to death to fly out of there on a civilian aircraft."

He reports that the Vietnamese carried fuel around in decrepit trucks with dirty filters. Fuel quality, he points out, is crucial in aircraft.

"When the Vietnamese military tells you that at the end of the war they did not have enough jet fuel to get their airplanes into the air, that was, excuse the phrase, straight bullshit! Until the very last day they had fuel available to them, more than enough."

MASTERS OF WAR: One day after the fall of Saigon and the surrender of the South Vietnamese government, Col. Bui Tin (center) and the legendary Gen. Vo Nguyen Giap (left) flew to Saigon and celebrated their victory.
Stooge or Shyster?

That is how Simmons remembers it now. The Justice Department, however, has a dramatically different account of Simmons' activities in Southeast Asia. They say he was part of a network of criminal diversion of fuel intended to fight the enemy throughout Southeast Asia.

Corruption in the supply of petroleum products was not a new problem. In January of 1969 the GAO reported that millions of gallons of fuel shipped to US military units in Thailand had been stolen. The GAO was unable to determine the full extent of the losses, but it reported to Congress that its inquiry and a parallel military investigation indicated that more than 5 million gallons of fuel had been stolen in 1967 alone. "Further unidentified thefts of fuel may have occurred and the full extent of losses is not known," the GAO said in a report.

Sen. William Proxmire, a Democrat from Wisconsin, who asked for the investigation, said it was "a shocking and tragic situation." Investigators said government laxity in controlling the distribution of the fuels and in processing documents was partly to blame for the thievery, which "was perpetrated primarily by collusion and forgery." The GAO also said that the thievery might have gone undetected even by "a more sophisticated system, properly implemented."

The thefts had been carried out by putting fictitious military units on delivery receipts and by using fictitious vehicle numbers, vehicle identification numbers of cars no longer in use, and delivery receipts showing excessive refilling. Other thefts were made from service stations that supplied fuel for American vehicles.

When auditors of the GAO looked at Simmons' records they concluded that there was an organized ring at work diverting Pentagon funds to private bank accounts. They reported their findings to the Justice Department.

Simmons was unaware of the final report of the GAO, and by the beginning of 1975 he was optimistic about the future. He thought he had been cleared of wrongdoing. His feeling of invulnerability was enhanced by the fact that he had become financially and politically well connected within South Vietnam. He married a young woman whose family owned real estate in Danang and Saigon, rubber plantations outside Saigon, beauty shops, banks and jewelry stores around the country, and a controlling interest in Air Vietnam, the South Vietnamese airline, and in a Saigon bank—the National Bank of Vietnam.

The military situation in South Vietnam disintegrated rapidly in the spring of 1975. Simmons seemed to think that when the actual end of the Saigon regime came, he would gather his family and fly away and leave all of his difficulties behind.

Simmons was in Hong Kong when the North Vietnamese Army began closing in on Saigon in April. But suddenly, out of nowhere, it seemed, on April 8, the Justice Department filed a civil action in Hong Kong, against Simmons, Pietro Marini, Richard Sakai, Tim Koon Hung Wong, Petroleum Management Consultants of Hong Kong and Wong's International Trading. The action involved the theft of $4.4 million in Pentagon funds earmarked for the South Vietnamese military and diverted to Hong Kong.

Andrew Davenport, reporting on the case for the Far Eastern Economic Review concluded first of all that it was "an extremely complicated affair." Adding to the opaque nature of what had happened and what was going on, the case was heard privately in chambers in Hong Kong and so there was no public record of the proceedings for reporters. Davenport found also that the American consul in Hong Kong had strict instructions not to comment on the defendant.

Tim Wong spoke to Davenport, and told him that the case was all about consignments of lubricating oil for the South Vietnamese Army that had been stolen before reaching its consignee. He knew only that oil had been ordered by Simmons and Sakai and their orders were placed through Marini who had once lived in Saigon but disappeared when the suit was filed. Marini left behind the address of "c/o Caltex Oil (Kenya), Mombasa." A spokesman for Caltex said he'd never heard of Marini and to the best of his knowledge the man was not in Kenya. Marini was never seen again.

Wong claimed not to know the ins and outs of what happened.Sakai and Simmons set up another company, Pan Asia Engineering Consultants, in "1973 or early 1974," and that company had been legally registered in Hong Kong.

Davenport found Simmons and described him as "young and bearded, and dressed in a tailored khaki suit." Simmons said he was unable to comment on the case since it was in the hands of "his solicitors." He would only confirm that he had been in Vietnam.

The next day, like Marini, Simmons disappeared.

Fraud Schematics

Bruno Ristau of the Civil Fraud Division of the Justice Department explained to a reporter for the Associated Press that the fraud began in early 1974 after Simmons was given the power to authorize payments drawn on the US account at the National Bank of Vietnam. Ristau said he had evidence that Simmons was the prime mover among the conspirators in a system authorizing payments for products that were never delivered. The Simmons-Sakai company in Hong Kong, Ristau said, was a "paper company."

The Justice Department was successful in freezing the bank accounts of the defendants and their companies until the case was adjudicated.

But defendants Marini and Simmons were gone. The Justice Department said that Simmons purchased $500,000 in precious gems before leaving Hong Kong. The gems, they claimed, might serve as untraceable liquid capital for an international fugitive.

Simmons took a commercial flight from Hong Kong to Saigon. He arranged for his wife and four children and four members of her extended family to depart from the besieged city on April 28 on a regularly scheduled commercial flight to Manila.

From Manila they flew to Los Angeles and then on to Washington, D.C. In Washington, Simmons acquired a van to drive the group to his parents' home in Porterwood, W. Va. They moved into a mobile home on his father's farm.

By the time Simmons arrived in West Virginia, South Vietnam was no more. Saigon had become Ho Chi Minh City. The past was dead and buried, Simmons thought. Who cared about oil consignments in South Vietnam anymore? He had escaped and was safe and at home among friends and family in West Virginia. He spoke to a local reporter from an Elkins, W. Va., newspaper and discussed the government charges against him. He said he was confident and intimated he would return to Hong Kong to defend himself. "We feel we have the case whipped," he said.

He explained that all of the allegedly missing petroleum products had been paid for and delivered to the South Vietnamese Army and Air Force and only after that did they disappear. He said it had been very difficult to provide America's allies in Southeast Asia with oil products after both the OPEC oil embargo and the restrictions on the use of fuels produced in the United States to support military operations. "I found a solution," he said. "Not a very popular one, but it would ensure fuel to continue to flow."

Simmons went on to explain that in Southeast Asia "I put my neck on the line " to secure petroleum products for America's allies. Government money was often not available when payments fell due, he said. "I was in continuous default with the commercial suppliers."

Simmons said that he was not worried because he was worth more than the frozen assets in Hong Kong. Trying to explain how he'd become a wealthy man while working for the government, he said it came from his wife's family. Simmons said that he planned to build a home for himself and his family in Parsons and take up permanent residence in West Virginia, even if it meant turning over "his Asian business" to others to operate.

But he never got the chance. On June 26, 1975, Simmons was arrested by state police, FBI agents and a deputy U.S. marshal at his parents' home. They had tracked him 10,000 miles to the hills of West Virginia. He was formally charged with conflict of interest for receiving money, illegally concealing receipt of that money, and 19 other federal crimes. He was remanded to the Randolph County jail in Elkins, W. Va.

In Hong Kong, one of Simmons' business partners cut a deal with the government, and provided evidence against Simmons. He testified that the company, Petroleum Management and Consultants, "never supplied nor intended to supply the products." He also swore that the major portion of the misappropriated money had been turned over to Simmons.

The Justice Department concluded that Simmons personally received at least $1.2 million in the scam. He faced a maximum two year prison sentence and $10,000 fine on the conflict of interest charge and five years in prison and a $10,000 fine on the charge of concealing facts from the government. His bail was set at $300,000 and he was placed in the Randolph County jail to await trial.

Simmons hired a local attorney, Delroy Harner, to represent him. He also flew his Hong Kong barrister, Gordon Hampton, to West Virginia to represent him in the case. But there was a cash flow shortage that he had not counted on. His visible assets were frozen and he could not afford to post bond.

Simmons appeared before a federal magistrate on June 29 to request bail reduction. The magistrate denied the reduction, stating that Simmons had shown a "high degree of mobility, sophistication and physical capacity" to flee.

Assistant US Attorney Steve Jory told the judge, "We believe he will leave the United States and draw upon his vast amount of assets," if bond was lowered. Jory pointed out that the government believed that Simmons had $900,000 in personal frozen assets in a Hong Kong bank. Simmons offered to surrender his passport if the bond was reduced. Jory said that Simmons had two passports. Simmons responded that his willingness to stay in the United States was proven by the fact that he had not fled before his arrest at his parents' home, despite his prior knowledge that charges would be filed.

Simmons appeared before Federal Judge Robert Maxwell in U.S. District Court in Elkins one week later, again asking for bail reduction. This time he said his wife and family were having a difficult time because of their inability to read or speak English. Worlie Simmons, David's father, offered to put up the 155-acre family farm as security for the release of his son. The farm was valued at between $80,000 and $100,000.

Mawell said that if Simmons surrendered his passport and reported daily to an officer of the court he would grant bail. Simmons agreed.

On Sept. 8, Simmons surprisingly waived a grand jury hearing. The waiver meant the Justice Department could present its case against him before Judge Maxwell in U.S. District Court within three to 14 days.

One week later Simmons appeared before the judge and pleaded guilty to one of the 21 charges against him. He admitted to the judge that he had siphoned off $4.3 million in a kickback scheme he'd put together while acting as a purchasing agent for the South Vietnamese armed forces. Half of the money was immediately converted into condominiums, jewelry and cars.

As part of a plea bargain, Simmons acknowledged that he was the mastermind behind the misappropriation of funds and agreed to begin restitution of the money by turning over the "cash, jewels, fancy cars, and condominiums he had stashed away in Hong Kong." He also agreed to the confiscation of all of the remaining funds in his Hong Kong bank accounts. Simmons assigned to the government the loans due to him through a finance company he'd established in Hong Kong. Those assets were estimated at $417,000 in secured loans and $750,000 in unsecured loans.

Assured that the Justice Department would get all of Simmons' assets, Judge Maxwell handed down the maximum penalty for the single crime—a five-year prison term and a $10,000 fine. The judge recommended that Simmons serve his term in a minimum security federal prison.

Crime & Punishment

A local reporter, Strat Douthat,, watched the proceedings and tried to put them in a tragic historical context. Everyone in the area, he wrote, remembered the day in 1960 when Simmons, "a fuzzy cheeked farm boy of 17," joined the Army "and went off to seek his fortune." When he came home in May 1975, Douthat wrote, "he had acquired a Vietnamese wife, four children and approximately $3 million."

The way Simmons had won and lost his fortune, Douthat said, "provides a revealing glimpse of at least one way in which U.S. tax dollars were spent during this country's involvement in Vietnam."

Simmons remembers bitterly the rumors that circulated about him in the local press. "They said I was stealing fuel and selling it to the communists," he said, "and because of things like that we lost the war. It was all my fault. And there I was sitting in a jail cell not being able to say a word to anybody except my attorney."

Lt. Col. William E. LeGro, who worked with Simmons in the DAO, says that although Simmons did not alone provide much of the cause for the collapse, he was surely not blameless. But Simmons saw himself as the most convenient scapegoat—and in time, the only scapegoat.

He says that the U.S. attorney's office offered him a deal. He could plead guilty to a conflict of interest and concealment of a material fact. He decided to accept the deal, he says, not because he was guilty but because of a visit to his cell by a member of the U.S. Military investigations team who warned him that if he did not take the deal or if he revealed the top secret scheme to coerce OPEC into selling petroleum products, he would never see his family again. "The inference was that they would be harmed in some way," he says. "The penalty for the crime might be as high as five years in prison but the prosecutor suggested I might serve as little as 18 months before my release." Charges of fraud and embezzlement would be dismissed if he pled guilty to the lesser charge. So he copped the plea.

While he was in prison the IRS sent him a $3 million bill for unpaid taxes and penalties, based upon the amount of money he was said to have embezzled from oil contracts. They eventually settled, he says, for the entire content of his commissary account—$3.

U.S. Attorney Jory spoke with reporters after the sentencing and said that the government now had a better picture than before of the scope and extent of black market and other illegal activities involving US funds in South Vietnam. The problem, of course, was that South Vietnam no longer existed and only the local West Virginia press had any interest at all in what Jory had to say.

No major metropolitan newspaper carried a story on Simmons after his indictment. The New York Times ran one item on the case after the Hong Kong filing by the Justice Department. John Chancellor of NBC Nightly News read a 15-second item on the indictment of Simmons but there were no other stories on the trial or its outcome outside West Virginia.

"I doubt this is an isolated case," Jory said of American corruption in South Vietnam. But nobody was listening. Simmons said to local reports that he would tell "his side of the story" following the sentencing. But he never told anyone about his experience until I found him in his restaurant.

David Simmons was the only American to be tried, convicted and imprisoned for crimes committed in South Vietnam in the last year of that nation's existence. Simmons spent 39 months in prison for malfeasance.

Lt. William Calley, convicted of 55 murders in the village of My Lai in the spring of 1968, spent four and a half months in prison for his crimes. Calley won public support during his trial, including that of Gov. Jimmy Carter of Georgia and Gov. George Wallace of Alabama. A 1971 poll indicated that 79 percent of Americans disagreed with the Calley verdict.

There was no widespread support for David Simmons. No governor came forward to express sympathy for him and no major newspaper or news network followed his trial. Simmons had become something like the Vietnam War itself: yesterday's news that was best forgotten.

Following his release from prison Simmons joined his family in Southern California. He worked in his restaurant with his wife and sent his children to college and tried to forget everything that happened to him in South Vietnam.






Larry Engelmann is the author of six nonfiction books including 'Tears Before the Rain: An Oral History of the Fall of South Vietnam.' He lives in San Jose, and is currently writing a book titled 'Our Share of Night,' on the Snoozy/Furlong/Bilek/Mallicoat serial murders in San Jose in 1969–71.