U.S. MOBILIZED HOSTAGE RESCUE

Elite Force Alerted For Jungle Mission Before 4 Americans Freed In Ecuador

QUITO, Ecuador -- An elite U.S. Delta Force team was poised to attempt a
rescue of four kidnapped Americans being held in Ecuador's jungle by a band
of ex-guerrillas who had already killed an American hostage and declared
their intention to kill another, U.S. officials say.

Preparations for the high-risk operation, which had been suggested and
rejected twice before by U.S. officials following the kidnapping in
October, were revived after the murder of an American hostage on Jan. 31.

U.S. Army and Ecuadorean intelligence units believed they knew the
whereabouts of the four American and three foreign oil workers held in the
Ecuadorean Amazon region since Oct. 12, paving the way for a possible
attempt to rescue the group.

But rescue preparations were called off after the kidnappers agreed to a
$13 million ransom on Feb. 14, following weeks of hard bargaining that
often created strains among the three ransom-negotiating firms and
officials of four governments involved in the case, knowledgeable sources said.

The use of American forces to rescue private U.S. citizens held hostage is
rare. The U.S. invasion of Grenada in 1983, ostensibly designed to rescue
American medical students held under house arrest during a political crisis
on the island, is one of the few exceptions.

The U.S. Marshals Service sent a hostage rescue team to Quito in 1995 to
help rescue kidnapped American missionary Donald Coks, but an Ecuadorean
police team chanced on the kidnappers' camp and rescued Coks without U.S.
help, the team's chief said.

But the growing threat of kidnapping -- and the imminent arrival of more
U.S. oil workers in Ecuador -- could well mean that more Americans will be
at risk, posing a critical dilemma for U.S. policymakers: Use American
forces and inflame anti-American feelings in the region, or do nothing and
watch helplessly as U.S. citizens become easy prey for kidnappers.

In this case, the hostages were freed March 1, after 141 days in captivity
and delivery of the ransom in U.S. $100 bills.

The money was packed in seven boxes weighing more than 900 pounds and
pushed off a helicopter as it hovered over a jungle clearing.

But before the ransom was paid, the execution of hostage Ronald Sander, the
glacial pace of the ransom bargaining and disputes among the negotiators
had left the hostages' employers and relatives angry -- and threatening
lawsuits.

None of the principal players in the case would comment on the record.

But a dozen U.S. and Ecuadorean government officials, employees of the
firms involved and U.S. security industry experts interviewed by The Herald
provided an outline of the kidnapping.

NEGOTIATORS INTO ACTION

Employers had kidnap insurance that specified security firms

When 35 to 40 men armed with assault rifles and wearing army fatigues
seized the hostages Oct. 12 from the Pompeya oil drilling camp, 47 miles
south of the Colombian border, ransom-negotiating firms on three continents
swung into action.

The hostages' employers all had kidnap insurance, standard for firms
working in the region, where Colombia's guerrilla and drug violence often
spills across the border.

Their policies required them to use the ransom negotiators designated by
their insurers:

Sander, from Sunrise Beach, Mo., and David Bradley of Casper, Wyo., worked
for Helmerich & Payne (H&P), a Tulsa, Okla., oil drilling firm. Its
insurance company called in Corporate Risk International (CRI) of Fairfax,
Va., one of the top firms in the field.

Arnold Alford, Steve Derry and Jason Weber, all of Gold Hill, Ore., and
Dennis Corrin of New Zealand were employees of Erickson Air-Crane, an
Oregon heavy-lift helicopter company. Its insurance policy brought in
Control Risks of London, another leading security firm.

German Scholz of Chile, Juan Rodriguez of Argentina and Frenchmen Jean
Louis Froidurot and Jamy Marcelly worked for Schlumberger Ltd., a New York
oil-field services company.

Its policy required the use of Honor y Laurel, a security firm based in
Bogota, Colombia. The Frenchmen escaped four days after they were abducted.

The FBI sent agents to Quito to investigate the case and informally advise
the ransom negotiators.

The Ecuadorean police Anti-Kidnapping and Extortion Unit, known as UNASE,
and security officials from Chile and Argentina also joined the negotiating
process.

The involvement of so many participants from a variety of countries proved
to be a recipe for confusion.

"This case was a failure because of the internal disputes," said retired
Col. Fausto Teran, the former head of UNASE, who rescued Coks.

"Any case that has multiple victims, from different organizations, from
different countries, becomes infinitely more complex," said Robert Klamser,
a California hostage negotiator not involved in the Ecuador case.

FIRST NEGOTIATING SESSION Kidnappers, via VHF radio, demand $80 million ransom

At the first negotiating session, over VHF radio, the kidnappers called
themselves the "Free America Commando" and launched a tirade against the
$1.3 billion in U.S. aid to Colombia's battle against its narcotics industry.

The kidnappers' leaders are former leftist Colombian guerrillas, but they
were bent purely on getting their hands on the ransom money and had no
political motives, U.S. and Ecuadorean government security experts say.

Then, in that first session, the kidnappers demanded an $80 million ransom.

"The room went quiet. Then everyone broke out laughing," said an employee
of one of the ransom negotiating firms who kept abreast of daily
developments in the case.

The last kidnapping of foreigners in Ecuador -- seven Canadians and one
American oil worker seized in the hamlet of Tarapoa in 1999 -- ended with a
$3.5 million ransom paid after 40 days.

The same kidnappers carried out the Tarapoa and Pompeya abductions, U.S.
and Ecuadorean government officials said.

Negotiators for CRI, Control Risks and Laurel argued that the $3.5 million
had been too high, and that by taking a tough stance they could win a lower
ransom, said two participants in some of the negotiations.

Their initial offer: $1 million for the eight hostages, according to
transcripts of some of the radio negotiations published by the Quito
newspaper El Comercio after the hostages' release.

As the bargaining went on, tensions arose among the hostage negotiators,
the hostages' employers and some of the government officials involved in
the process.

"There were arguments about who should lead the negotiations, what to
offer, how quickly to offer it, all kinds of complications," said the
employee of the ransom negotiating firm.

Col. Bolivar Cardenas, current chief of UNASE, added: "When you have
several companies, you have several concepts on how to proceed. But in the
end, there was agreement on the strategy to follow."

RESCUE: A RISKY OPTION U.S. considers military action as kidnappers stick
to demand

By early November, with the kidnappers sticking stubbornly to their $80
million demand, the negotiating team began considering the risky option of
a rescue attempt.

A 35-member team from a super-secret U.S. Army intelligence unit believed
it had pinpointed the kidnappers' location, said two U.S. government
officials who were kept well-informed on developments in the case.

Just before Christmas, Ecuadorean police captured an Ecuadorean peasant who
had worked as a camp cook for the kidnappers.

He passed two FBI lie-detector tests on the locations of their bases, the
U.S. officials said.

Ecuadorean Foreign Minister Heinz Moeller said in Washington last week that
his country's security forces had located the hostages, but did not attempt
to rescue them at the request of the United States and other governments.
His comments were confirmed by Ecuadorean security officials in Quito.

It would have been an extremely risky mission.

The Miami-based U.S. Southern Command had sent a team to Ecuador in late
November or early December to evaluate UNASE and its commando team, the
Intervention and Rescue Group, the two U.S. officials said.

UNASE had a good record. Under Teran, it had safely rescued two kidnapped
Americans in northern Ecuador -- Coks in 1995 and John Heidema in 1996 --
amid gun battles that left eight kidnappers dead.

Southcom concluded that an Ecuadorean rescue attempt would be too risky
because the hostages were being held in the deepest part of the Amazon
jungle, covered with thick underbrush and 200-foot trees, the U.S.
officials said.

Over the next few weeks, FBI officials handling the case twice suggested
calling in a U.S. rescue team such as Delta Force or Navy SEALs or the
FBI's own Hostage Rescue Team, in meetings with U.S. Ambassador to Ecuador
Gwen Clare, the two U.S. officials said.

Clare consulted with State Department officials in Washington, but it was
decided that any rescue attempt would be too risky and could spark a wave
of anti-American sentiment in Ecuador, they added. Clare is out of the
country, and the U.S. Embassy had no comment on the report.

"Our primary concern was always the safety of the hostages," said another
U.S. official knowledgeable about the case.

NEGOTIATIONS GO SLOWLY Kidnappers send an ultimatum: They will kill one hostage

By January, the kidnappers had grown impatient with the lack of progress in
the negotiations.

They had bombed Ecuador's lone oil pipeline five times between Oct. 30 and
Dec. 13, killing eight people in a bus that was driving past one of the
explosions, as added pressure on the ransom negotiators to increase their
offer.

And on Jan. 15, they sent an ultimatum: They would kill a hostage on Jan.
31 unless they received $80 million. Then they cut off radio contact with
the negotiators.

"Everyone was frustrated. They couldn't do anything. They just hoped that
the kidnappers would sort of forget the deadline and that nothing would
happen," said a U.S. official who was briefed on the standoff just hours
before the deadline.

On Jan. 31, Ronald Sander's body was found, covered a white sheet inscribed
with the message, "I am a Gringo. For nonpayment of ransom."

He was shot five times in the back, with two AK-47 assault rifles and a 9mm
pistol.

He was the first hostage executed in the 148 kidnappings reported in
Ecuador since 1994, Cardenas said.

After the killing of Sander, the ransom negotiators raised their offer to
$4 million on Feb. 2 and $9 million on Feb. 10, according to the
transcripts published by El Comercio.

The kidnappers initially held to their $80 million demand, but on Feb. 11
they reduced it to $40 million. The next day, the negotiators offered $10.5
million and the kidnappers dropped to $20 million -- but added a warning:

Another hostage would be killed unless a deal was reached Feb. 15.

The White House's National Security Council quickly put Delta Force, the
most elite commando unit in the U.S. military, on a two-hour alert for a
possible rescue attempt, the two knowledgeable U.S. officials said. This
condition requires soldiers to be packed and ready to deploy from their
U.S. base on two hours' notice.

"It was all 'Go' when I went to bed on the 14th. I expected to wake up the
next morning, turn on the TV and watch the reports on CNN," one of the U.S.
officials said.

But on the afternoon of Feb. 14, the ransom negotiators increased their
offer to $13 million, and the kidnappers accepted.

The money was wired to a Quito bank Feb. 19. The negotiators sent the
kidnappers "proof of life" questions on Feb. 21 that only the hostages
could answer, and received satisfactory replies the following day.

On Feb. 23, an oil company helicopter carrying seven boxes packed with the
money and wrapped in waterproof plastic dropped off the ransom at a jungle
clearing marked by the kidnappers with a red tarpaulin.

The seven men were released six days later, escorted by four kidnappers to
a trail head and told to walk on until they reached the village of Santa
Rosa and its police station.

They left Ecuador the next evening.

IT'S OVER -- BUT IT ISN'T

U.S. vows to bring killers of American hostage to justice

"Normally, when hostages are released, it's over. You go home and rest,"
said one U.S. official involved in the case. "But not this time. Not with
an American dead."

A U.S. Embassy statement on the day of the hostages' release vowed that
"the U.S. government will continue working with the Ecuadorean government
to locate, arrest and bring the perpetrators of this horrible crime to a
court of law to be prosecuted to the fullest extent possible."

Just who the "Free America Commando" is remains unclear.

U.S. government officials and U.S. security industry experts who have
followed the trail of the kidnapping gang's leaders insist that they are
former leftist Colombian guerrillas out to score money rather than
political points.

But some of the evidence suggests a more complex picture -- one that mixes
the profit motive with a typical guerrilla structure and resentment against
the growing U.S. involvement in Colombia.

Now armed with assault rifles, grenade launchers, shoulder-fired anti-tank
weapons and night-vision goggles, the kidnapping gang is certainly a cut
above common criminals, said UNASE chief Cardenas.

And their success in this case could embolden them to try again.

"We celebrate their liberation, but this is a bad sign that could
eventually promote a perverse industry of abduction," Ecuadorean Air Force
Gen. Oswaldo Dominguez said after the seven hostages were released.

It is not an unfounded fear.

In July, a consortium of seven foreign companies, including U.S.-based
Occidental Petroleum, is scheduled to begin construction of a new oil
pipeline from northeastern Ecuador to the Pacific coast.

Several hundred new foreign oil technicians are expected to work on the
project.