THIS COP MAY SAILFUGITIVE EX-FEDERAL AGENT FINDS A HAVEN--AND MORE-- IN NEW ZEALAND

Gary Callahan never had time to name his yacht. Too bad. He might have called it "Lady Luck."

First, the bad luck: The veteran U.S. Border Patrol agent was accused of ripping off a cocaine smuggler and sending the drugs to Phoenix, where they were peddled by a Paradise Valley dentist. Callahan had been set to go to trial in Phoenix last July and faced a possible life sentence in prison. But he fled to New Zealand on a phony passport just before the trial started.

Callahan's plan, according to federal agents, was to sail the Pacific with his mistress, Betty Lindstrom--the dentist's sister. But New Zealand authorities nabbed him before he left port.

The Callahan case already had been the topic of conversation from corporate boardrooms to crossroad gas stations, and it would have seemed routine for the Kiwis to return the disgraced cop to the jaws of Yankee justice.

However, since Callahan's arrest last October in New Zealand, the case has taken some astonishing turns. Some would call it astonishing luck; others might call it cunning. In this unusual case, even the outbreak of the Gulf War has worked in Callahan's favor, and his extradition could mean freedom.

As it stands now, the erstwhile 43-year-old antidrug warrior has a real chance of walking on the coke charges--if New Zealand Judge R.L. Kerr has a say in it. Kerr's February 5 ruling in effect wiped out the drug charges.

"Why should we have to obey some judge from 12,000 miles away or whatever it is?" asks a Cochise County sheriff's deputy familiar with Callahan's case. "And I thought our justice system was screwed up."

Because of the delicious legal machinations and international intrigue, no one is sure if Callahan ever can be prosecuted on the coke charges. He's more likely to spend only a few years behind bars on far less serious charges.

But the battle isn't over. The U.S. is fighting hard to keep the case alive. On March 6, a higher court in New Zealand took steps to reverse Judge Kerr's ruling.The outcome is uncertain.

For now, Callahan is in a New Zealand jail, waiting for the outcome of his unprecedented legal fight.

The problem for prosecutors is that New Zealand's controversial extradition treaty with the U.S. allows its judges to do far more than rubber-stamp the return of fugitives. New Zealand's judges can consider the merits of a case before ordering a defendant's extradition. And New Zealand traditionally has taken a dim view of the American way of using snitches to win drug cases.

Because of this unique situation, Gary Callahan may walk. He may even sail.

GARY CALLAHAN'S CHUTZPAH knows no bounds, according to his friends and foes. He walked it as he talked it for nearly two decades in rural Cochise County, courting a reputation as a butt-kicking agent and bona fide survivalist.

A Vietnam War vet, Callahan bragged of having been trained in tracking techniques in South Africa and was known as a political hard-liner. One of his vehicles once sported this bumper sticker: "I'd Rather Be Killing Communists in Nicaragua."

Sometimes, his aggressiveness came back to bite him. In October 1986, he pulled over a car west of Bisbee and accused the driver of having illegal drugs in the trunk. The man refused to open his trunk. Callahan suddenly reached inside the man's car and snatched his keys. He opened the trunk and searched it, but found nothing. He then let the man go.

Unfortunately for Callahan, the "smuggler" was a Cochise County public defender who was innocent and didn't take kindly to the illegal search. He complained to Callahan's Border Patrol supervisors. They apologized for Callahan's "lack of professionalism" and reprimanded their agent. Not satisfied, the attorney sued, and later settled out of court for $2,500.

Records show the Border Patrol had conducted at least four internal investigations over the years after hearing allegations that linked Callahan to corruption. Nothing ever came of the probes, and in fact many in Cochise County viewed Callahan as an antidrug zealot.

"I would hear Gary talk about the scum that was dealing dope," says a Bisbee resident who has known Callahan for years. "I'll bet one part of him still feels that way. But he was a big shot and he always wanted a big bank account. That side of him kind of won, I guess."

It didn't escape the attention of Callahan's fellow agents that he lived quite well for a man with a yearly salary of less than $40,000. He traveled often. He owned four cars. And he and his wife, Maureen, had built their own home, valued at more than $100,000, a high price for the Bisbee area. An FBI agent dryly described the indoor pool at Callahan's home as "a bit smaller than Olympic size."

Callahan had an explanation for his lifestyle: He had won the California lottery, he told those who asked.

In fact, he hadn't, but things went swimmingly for Callahan until the spring of 1989. That May, FBI agents acting on a tip watched at a Scottsdale restaurant as 46-year-old dentist Bill Bartel negotiated a large coke sale with another man.

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