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.

After the two went their separate ways, the agents pulled over Bartel's 1987 Mercedes-Benz. They found twelve kilos of cocaine packed into a gym bag in the car's trunk.

The agents then went to Bartel's home. There, his wife, Jody, took them to another 25 kilos of high-grade coke hidden inside a freezer. According to the FBI, the mother of two young daughters tried to explain the presence of the cocaine by saying: "My husband and I have other businesses and investments, and I don't want you to think that that's the only thing we do."

Shortly afterward, a federal grand jury indicted the Bartels on cocaine-conspiracy charges. The panel also indicted two other Valley residents--Stan Akers Jr., son of a deceased speaker of the Arizona House of Representatives, and restaurateur Mitchell Singer. FBI agents alleged that Bartel had used Singer as a middleman, and that he'd planned to sell fifty kilos of cocaine to Akers Jr.

Singer and Akers Jr. later plea-bargained with the feds. Bill Bartel, staring at a life sentence, also plea-bargained. He pleaded guilty to reduced felony drug charges after promising to testify against his sister Betty Lindstrom and Callahan. Bartel faces a maximum sentence of seven and a half years. Jody Bartel pleaded guilty to felony cocaine charges, was placed on probation last year and fined $5,000; she, too, agreed to testify for the feds. In the meantime, Bill Bartel's dentistry license has been suspended, and prosecutors say he is working as a technician at a Valley dental lab. Bartel's deal was typical of U.S. drug cases: The dentist-cum-dealer would sing as loud and long as prosecutors wanted. Only then would he be sentenced.

"There's nothing less pleasant than turning one individual against another, especially a family member," says Ivan Abrams, the assistant U.S. attorney in Phoenix who is prosecuting the coke ring. "In this case, it's brother against sister, unfortunately. This isn't a fun business. But it's just a fact of life at present that we work snitches to make drug cases."

Abrams weighs his next words carefully. "I think the people in New Zealand have a repugnance to the way we do drug prosecutions here," he says. "Perhaps they don't have the problem with drugs there that we do here, or perhaps they have a greater tolerance for drug usage. I don't know. I'm not saying we can't get a fair shake over there. But I really didn't expect what happened to happen, believe me."

THE CASE AGAINST Gary Callahan became public in June 1989. The scheme as alleged by the feds went as follows: In mid-1988, Callahan had arrested a Mexican cocaine smuggler in the desert near the Arizona border town of Naco. Callahan had turned over some of the contraband to authorities, but FBI agents accused him of having stolen 36 kilos--about 81 pounds--from the low-level "mule." They conservatively estimated the cocaine's wholesale value at about $500,000.

Callahan's girlfriend, Betty Lindstrom, was accused of transporting the coke from Cochise County to her brother, dentist Bill Bartel. The feds say Bartel distributed it. (The mule eventually served a short prison term.)

Over the strong objections of prosecutor Abrams, a federal magistrate released Callahan on $45,000 cash bail soon after his 1989 arrest. Within weeks, the FBI rearrested Callahan, charging him with obstruction of justice. The new arrest stemmed from a meeting at which Callahan and fellow Border Patrol agent and next-door neighbor Glenn Waltz allegedly urged prospective government witness Katie Montano to lie on the stand.

"Don't worry about us," Callahan told Montano during the session, which FBI agents secretly taped. "I mean, we are going to beat this. My lawyer says we are going to beat this."

Despite the new charges, U.S. District Judge Charles Hardy ordered Callahan's release, saying he didn't consider the ex-border cop a flight risk.

But in July 1990, days before his scheduled trial on the cocaine charges, Callahan fled to New Zealand. While he was gone, the feds filed a new marijuana conspiracy case against him and Waltz. Prosecutors accused the agents of having taken loads of marijuana from smugglers over a five-year period and then letting the smugglers slip back into Mexico. Bill Bartel was to be the government's key witness in that case, too. (A judge last October dismissed the pot charges against Waltz on technical grounds. Waltz's trial in the obstruction-of-justice case is scheduled to start March 26.)  

Callahan entered New Zealand with a phony passport that showed the name of "James Alonzo Harmon." His papers listed Harmon's profession as "navigator" and "retired civil servant." Police reports indicate that soon after he got there, Callahan paid a New Zealander about $50,000 for a handsome, ocean-worthy yacht.

Betty Lindstrom was about to join him, according to the FBI, and the fugitives apparently planned to sail away. Lindstrom had wired thousands of dollars to a New Zealand bank account in advance of her trip.

Thanks to an informant, however, New Zealand authorities nabbed Callahan last October 1 in the North Island port city of Whangarei. Callahan said at first from his cell at Auckland's Mount Eden Prison that he wouldn't fight extradition. But his lawyers convinced him he had an excellent chance to win because of New Zealand's defendant-friendly extradition laws.

TURNING DEFENDANTS against each other is how prosecutors in the States often earn convictions, especially in drug cases. Prosecutors here offer plea bargains in exchange for testimony against co-conspirators. Most snitches, such as dentist Bill Bartel, are sentenced only after they testify.

Conventional wisdom says snitches are more likely under this format to testify truthfully--or at least stick to the story that got them the deal. If they don't, prosecutors may reinstate the original, more serious charges.

In New Zealand, however, judges won't let prosecutors hold that sword over snitches. Snitches in New Zealand customarily are sentenced before testifying against someone else. It's not the law there, but it's been practiced that way for as long as anyone remembers. New Zealand judges tend to look at the U.S. system as one of coercion to make snitches tell the "right" story to cement their deals with prosecutors.

Callahan's Tucson-based lawyer, Bill Walker, says, "They are less likely in New Zealand to take the most skeptical view of a case against a defendant. The prosecution has to prove their case with more exactitude than they do here. And they have to be up-front about what they have."

And that turned out to be a major problem for the U.S. government.
New Zealand District Court Judge R.L. Kerr accused prosecutor Ivan Abrams of intentionally hiding from him key details of the U.S. government's plan to use Bill Bartel as a snitch against Callahan.

And Kerr expressed anger that U.S. prosecutors mentioned Bartel's status only briefly in lengthy affidavits they filed as part of their extradition request. Abrams further riled the judge by not mentioning in the affidavits the dismissal of the pot conspiracy charge against Callahan's co-defendant Glenn Waltz.

"I can only conclude," Judge Kerr wrote, "that [Abrams'] failure to set out what had happened to charges against a co-conspirator was deliberate . . . . The failure to make the disclosures shows bad faith."

Abrams, who wasn't present in New Zealand to argue his case, is frustrated. "The New Zealand judge was offended by our standard criminal justice techniques, and by what he perceived to be a willful attempt to deceive him," Abrams says. "We did not attempt to deceive him. Not mentioning the Waltz dismissal was an oversight by me, not deliberate. The Bartel plea bargain was a sealed document, and I was told by the Department of Justice not to send it."

One of Callahan's biggest breaks in this tangled affair had nothing to do with the law. The Gulf War broke out two weeks before Callahan's extradition hearing and the U.S. Department of Justice wouldn't allow its representative Su Zann Lamb to fly to New Zealand.

Instead, attorneys from the New Zealand Crown Prosecutor's Office represented the feds. The war didn't stop Callahan from flying his lawyer Bill Walker in from Tucson. Walker wound up testifying as a "witness" for his client and was praised by the judge as "an expert in American criminal law, particularly in relation to narcotic and conspiracy offenses." Walker made sure that the judge learned the details of dentist Bill Bartel's role as the U.S. government's snitch against Callahan.

Walker describes Ivan Abrams as an "ethical, honest prosecutor," but adds, "Someone in the U.S. government didn't want New Zealand to know about the terms of Bartel's plea because they knew New Zealand wouldn't like it. They told me over there that the U.S. is the sloppiest and the worst at presenting extradition cases. I believe them after this."

As the hearing went on, Walker says, he began to realize that Callahan's extradition on the obstruction-of-justice charges wouldn't be a bad idea.

"We didn't at all mind an extradition on the obstruction thing," Walker says. "If those obstruction charges hadn't been there, Callahan would have won the whole extradition. But then he would have been deported because of the way he got into New Zealand--the passport thing.  

"They could have deported him anywhere, maybe to the Republic of Tonga, where the treaties are more favorable to the U.S. Then the feds would have gone there and grabbed him and could have tried him on all the big charges."

Walker won't say how much Callahan has paid him, but he's been worth every cent. If he hadn't testified in New Zealand, Walker says, the judge probably wouldn't have known the details of Bartel's plea bargain and may have extradited Callahan on the drug charges.

"The prosecutors deliberately hid the plea bargain from the judge," Walker says. "They knew the judge wouldn't like the deal with Bartel--the way our prosecutors do business with their snitches. Isn't it ironic that Gary Callahan is facing obstruction charges in the U.S. when a New Zealand court found that our government tried to obstruct justice by hiding evidence about witnesses?"

PROSECUTOR IVAN ABRAMS, looking at the debris of his once-tidy case, seems at a loss when asked to describe the big picture. "The manner in which the government proceeded in this case was normal," he says.

But the relationship between the U.S. and New Zealand in extradition matters is not normal. Most nations return captured fugitives to the States without considering the merits of a case. But not liberal, antinuke New Zealand.

Judges there conduct hearings on the facts of a case before they order someone extradited. Judge Kerr ruled against the U.S. government on the cocaine charges, he wrote, because prosecutors had "abused" the extradition process, not because he's convinced of Callahan's innocence or guilt.

The situation doesn't surprise attorney Victor Folsom, an international-law expert living south of Tucson in the retirement community of Green Valley.

"There's a certain attitude in New Zealand that's known to many criminals," says Folsom, speaking in general. "They traditionally haven't been tough on narcotics cases there. Most treaties say that if the person is facing a felony, you don't judge his case--you send him back. New Zealand is not bound by such a treaty obligation. It's a hot spot in international law."

The Callahan case has made it hotter, even within the New Zealand justice system. On March 6, the New Zealand High Court reversed Judge Kerr's ruling, with Judge J. Robertson writing in part, "I find no evidence to support the finding that the failure to provide detail of the plea bargain could be an abuse of the court process." Does that signal a change in the way New Zealand will handle its extradition matters with the U.S.? Abrams feels partly vindicated but still unsure about the eventual outcome because more appeals are forthcoming.

Callahan lawyer Bill Walker speaks of the March 6 ruling as evidence of a "power struggle" in the court system.

"The High Court apparently doesn't want the District Court to take on such a powerful role," says Walker. "This ruling may be more about their internal situation than about extradition."

Callahan's New Zealand attorney, Barry Hart, says he plans to take the High Court's recent ruling to his nation's highest judicial body, the Court of Appeal. If that fails, Hart says, he will ask for a hearing in London before an appellate body known as the Privy Council.

"We've got a long way to go in this," says Hart from his office in Auckland. "In my experience, this is the first time this has happened in an extradition case. We don't think the U.S. had the right to appeal Judge Kerr's order, and we plan to litigate it on the basis that the High Court was wrong."

If the U.S. eventually loses in New Zealand, outraged cops here wonder what's to keep a grand jury from reindicting Callahan on the cocaine charges. But Ivan Abrams says the U.S. government won't refile if that happens.

"If we refiled, it would cause an international incident," Abrams says. "We have to respect the treaty. Countries as apparently dedicated to individual freedoms as New Zealand apparently is are very cautious about signing treaties that would allow countries requesting extradition to impose draconian-type punishments. I'm not being sarcastic. We can't have any hidden agendas."

And what of Callahan's yacht and his dream of sailing away with his paramour and evading his worldly troubles?

"I had no knowledge that Gary was going to leave for New Zealand," Bill Walker says. "And I have no idea whether Gary knew about the extradition treaty when he took off."

Some Arizona cops speculate--only partly in jest--that the next thing Callahan will pay for will be boating lessons for Bill Walker's family.  

"I have a family," Walker deadpans. "But I don't have a boat."
Cochise County Sheriff Jimmy Judd, in whose county Callahan lived and operated, is incredulous. "I don't understand it," Judd says. "A guy flees the country, buying yachts and all that stuff, and he has a chance of walking? What gives? You get this bad cop and he skates. What's to keep any officer from asking himself, `Why don't we try smuggling ourselves? We'll walk just like him.'"

New Zealand traditionally has taken a dim view of the American way of using snitches to win drug cases.

Many in Cochise County viewed Callahan as an antidrug zealot.

"I think the people in New Zealand have a repugnance to the way we do drug prosecutions here," prosecutor Ivan Abrams says.

Callahan's papers listed him as a "navigator" and a "retired civil servant."

Some Arizona cops speculate--only partly in jest--that the next thing Callahan will pay for will be boating lessons for his lawyer's family.

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