Four days before Christmas, 1988. A flight takes off from Heathrow, headed for New York. Thirty-eight minutes later, one blip on the radar becomes four.

Hidden in a Toshiba cassette player inside a brown Samsonite suitcase, a block of plastic explosive punches a 20-inch hole in the left side of the fuselage, right near the “P” of the Pan Am logo, sending shock waves through the craft and causing the nose to detach in less than three seconds. The cockpit flops on the ground near a churchyard outside Lockerbie, Scotland, looking like a severed fish head on a bed of brown and green grass. One of the wings, loaded with fuel, completely vaporizes upon landing, killing 11 Lockerbie residents instantly. Fire, metal and flesh rain from the sky.

The ground is strewn with the flight's crew and passengers, all 259 dead, all from less than one pound of plastic explosive.

With 189 Americans onboard, the bombing of Pan Am Flight 103 is the deadliest terrorist attack on U.S. civilians until the second Tuesday of September 2001. Libyan involvement is instantly suspected, seen as payback for President Ronald Reagan's decision to bomb Tripoli and Benghazi in 1986, and two Libyan nationals are eventually tried for the attack.

Barely a month after the incident, The Nation runs an article asking a question that's on the mind of many in the intelligence community: Was a former CIA agent indirectly responsible for the carnage?

“When E. Lawrence Barcella Jr. heard about the explosion of Pan American Flight 103, he immediately thought of Edwin Wilson, the Central Intelligence Agency's infamous renegade,” the article begins. “In particular, Barcella, the former Assistant U.S. Attorney who tracked down Wilson and put him behind bars, pondered the 40,000 pounds of C-4 plastic explosive that Wilson, well schooled by the agency in intrigue and arms dealing, sold to Col. Muammar el-Qaddafi in 1977.”

Wilson's involvement is a valid concern, one potentially rich with irony. And even though the explosive used in the Pan Am bombing turned out to be Semtex, a cousin of C-4 made in Czechoslovakia, Barcella still thinks of Wilson every time a bomb goes off anywhere in the world.

Here was a guy who had been trained by the U.S. government to set up fake proprietary companies and who turned around and used that knowledge to sell arms to a brazen sponsor of terrorism. Here was a rogue agent, a death merchant.

During his 1983 trial in Houston for shipping the explosives and his Virginia trial the year before for shipping guns, Wilson maintained his innocence, claiming he was still working under the aegis of the Company when dealing arms to Libya. The CIA called bullshit and produced an affidavit stating Wilson hadn't had any indirect or direct contact with the agency, save for one minor incident, since his retirement in 1971. The Houston jury asked for that affidavit to be reread right before bringing back a guilty verdict.

Wilson was sent away for a long time, sentenced to 57 years in all, the first ten spent in solitary confinement. Justice was served.

But there was just one problem: The CIA had lied when it said Wilson hadn't been in contact with the agency since 1971. He'd actually been in contact with CIA officials at least 80 times. And the Justice Department knew the CIA had lied and didn't do anything about it.

In 2003, U.S. District Judge Lynn Hughes vacated the Houston conviction, slapping the government for its willful use of false evidence. Wilson was freed in 2004. He now lives in Seattle. He's working on getting his Virginia conviction overturned, as well as a conviction in New York for conspiring to have witnesses and prosecutors killed. He filed a civil suit in 2005, but five weeks ago U.S. District Judge Lee Rosenthal declared that the former prosecutors  two of whom are now sitting federal judges  had immunity for their actions.

The history of what exactly happened 30 years ago will always be hazy, but Rosenthal's ruling makes one thing clear: The government lied and locked a man up, and there's not much he can do about it.

Like any good spy story, this one begins with murder: the 1976 assassination of a Chilean ambassador named Orlando Letelier in Washington, D.C. Letelier was rounding Sheridan Circle when a bomb exploded under his car, shredding him and his assistant. He had been a high-profile critic of Chilean dictator Augusto Pinochet.

Seven months later, Washington Post reporter Bob Woodward penned an article titled “Ex-CIA Aide, Cuba Exiles Focus of Letelier Probe.” The Ex-CIA aide was none other than Edwin Wilson, and in the article Woodward outlined how Wilson had been in contact with the Libyan government and how Wilson was being questioned in connection with the Letelier murder. Nothing ever came of the Wilson-Letelier connection, but the article sent Washington scrambling to figure out what exactly Wilson was doing over there in Qaddafi-land. And perhaps most important, Woodward's story placed Wilson's name in the mind of Assistant U.S. Attorney Barcella, whose eventual pursuit of the arms dealer would span three continents and almost four years.

The revelation that a former CIA agent was running around Libya wasn't good PR for the agency, but no one could deny Wilson had been part of the Company. An Idaho farm boy, he became a spook after a stint with the Marines in Korea, where he suffered a leg injury. On a hop to D.C., he told his story to a stranger who gave him a number to call if he ever needed work. Wilson did call, and next thing he knew, he was taking a battery of tests, the last of which involved a lie detector. When asked if he'd ever engaged in a homosexual relationship, Wilson became livid.

“I just remember the time on the ship when a guy in the middle of the night reached up and I had to take care of him,” he says, making clear his abhorrence for same-sex relations.

Even though Wilson still didn't know exactly what he was applying for, he was sure he'd failed the test. He was wrong. From 1955 to 1971 he had a variety of assignments for the CIA, working security for the U-2 program and infiltrating the labor movement by means of a Master's program at Cornell. But it was in Special Ops that he found his niche, setting up proprietary companies that enabled the agency to wheel and deal without attracting too much attention.

Let's say Country X wants to procure some intelligence equipment, so it asks the CIA for help. The agency would be happy to oblige, at the very least to keep the Soviets out of the equation, but at the same time it knows Country Y will get really pissed if it ever finds out. No problem. Just have a corporation that's, ahem, completely unaffiliated with the agency make the deal.

Wilson has always had a knack for making money  he graduated college with ten grand in his pocket, thanks to summers spent running grain harvesters through the Idaho farm country  and setting up cover companies was a natural fit for the man who would become an arms dealer. After leaving the CIA, he was recruited for a top-secret Navy operation known as Task Force 157, where he worked from 1971 to 1976.

Wilson set up several companies for Task Force 157 and began hauling coal to Europe. He tried to give the profits back to the Navy, he says, but accounting wasn't equipped to handle the funds, so he wound up using the cash to hire more people. One of his biggest projects involved measuring the pull of gravity along the coasts of Morocco, Algeria, Tunisia, Libya and Egypt. This information was crucial for figuring out the desired trajectory of a missile fired from a submarine. As a cover, Wilson outfitted his ship with equipment for measuring oil deposits, a move that ultimately proved profitable.

“Actually, the thing made enough money by selling the information to the oil companies to pay for it,” he says. “Worked out good.”

C-4 is a highly malleable explosive capable of taking a bullet without going off, making it one kick-ass weapon. It can be sliced, twisted and shoved into any crevice, and once set off by a detonator it expands at a rate of 26,400 feet per second. All it takes is an ounce to blow open an airplane window. You can stick a dab in an envelope and tear off a pen pal's face. When stored properly, it lasts up to 20 years.

On October 12, 1977, a demolitions expert named Jerome Brower arranged for 856 five-gallon cans to be loaded onto a chartered DC-8 at Houston Intercontinental Airport. The cans were labeled as oil-drilling mud, and inside each there were three or four inches of the brown-gray gunk. Underneath the mud, however, was white-gray clay, C-4, 21 tons in all, the largest known private shipment in history. Its destination was Libya, where Edwin Wilson had set up a one-stop shop for Qaddafi's regime.

Wilson imported handguns and detonators to Libya. He brought over retired Green Berets to train the country's commandos. He helped arrange land-mine-clearing operations. He says every deal was done with the implicit permission of the CIA, primarily through conversations he had with Theodore Shackley, the agency's associate deputy director for operations. The CIA looked the other way, he says, in exchange for having an inside man.

Those deals gave him incredible access, he says. “Plus I made a lot of money out of it.”

Wilson primarily dealt with Libya as a broker, using his CIA training to make shipments disappear, but there was one instance when his involvement was particularly hands-on. In 1978 several units of the Ugandan army mutinied and bolted to Tanzania, prompting despot Idi Amin to declare war on his southern neighbor. Amin invaded the northern province of Kagera and soon realized he needed help, so Libya responded with 3,000 troops, which was far from enough, since, as Wilson says, “the Tanzanians whipped everybody.”

Libya needed its troops out, so it contracted Wilson, he says, to hop on a 707 and fly down to drop off supplies and scoop up soldiers. Upon landing, Wilson told the pilot to keep the engine running while he handed food through the passenger plane's small doors. “All of a sudden, nobody's taking the food from the door,” he says, “and I can't figure out what's wrong, so I grab an AK and I tell the pilot, ‘Don't you leave without me or else.'” And that's when Wilson exited the plane and saw the soldiers tearing apart the packages and chowing down. They were too famished to even bother unloading the rest of the cargo.

“They had been pretty hungry,” he says. “So with a little emphasis I get the plane unloaded and I must've taken  I don't know how many people we had on that damn plane.”

Wilson was indicted on April 23, 1980, charged with shipping explosives and soliciting the murder of a Libyan dissident. The latter rap was the only one he wound up beating. Also indicted were two of his associates: Jerome Brower, the demolitions expert, and Frank Terpil, another former CIA agent turned arms dealer.

At the time Assistant U.S. Attorney Lawrence Barcella didn't know exactly how much C-4 had been shipped, but Brower soon freaked out and fessed up to the whole amount. He eventually got off with a four-month sentence. Terpil fled to Lebanon, Syria and ultimately Cuba, where he's still said to live. Wilson stuck it out in Tripoli, the Libyan capital, farting around, playing tennis with oil workers. “I don't mean to be blasé, but I have fun where-the-hell-ever I am,” he says. “So I got along fine.”

Wilson did want to clear his name, however, so he agreed to a meeting with Barcella in Rome on July 7, 1981. It was a détente of sorts. Wilson would provide information on the Letelier assassination in return for not being arrested the minute he got off the plane. He also had some intel, including details on Libya's search for an atomic bomb, that he considered far more important than the charges levied against him. How useful the information actually was depends on whom you ask.

Wilson: “I gave him a complete rundown of everything the Libyans were doing.”

Barcella: “The information he was offering was crap.”

Wilson went back to Tripoli, and the chase resumed.

Barcella soon employed a secret weapon, a con artist named Ernest Keiser, to try to lure Wilson back out of Libya. Originally from Germany but also claiming New York or Brazil whenever it was convenient, Keiser was having passport problems when he happened upon a New York Times article about Wilson. If he could trick the rogue agent out of Libya, he figured, the U.S. government would overlook his sketchy paperwork, so Keiser posed as an employee of the National Security Council and began corresponding with the former spy.

Keiser claimed the council wanted Wilson's help in setting up a cover company to mount attacks against pro-communist guerrillas in Central America, a move that would surely help wipe Wilson's slate clean with the Justice Department. Wilson says he always knew Keiser wasn't completely on the up-and-up, but he'd fallen out of favor with the Libyans after returning from Rome, so he decided to take a chance in June 1982.

“I had to get out of there,” he says. The Libyans were done with him. “They were either going to get me out of the country or execute me, and I had to leave.”

Before departing, Wilson had given Keiser a half million dollars to start up the front company. He would never see the money again. When Wilson landed in the Dominican Republic with a 40-page plan for the Central American operation in his suitcase, U.S. marshals stuck a gun in his back and escorted him onto another plane bound for New York.

Even on the ride back, Wilson wasn't too worried about being prosecuted, he says. He figured the CIA would stand up for him.

The CIA didn't. During the Houston trial, prosecutors presented an affidavit signed by Charles Briggs, executive director of the CIA, stating “with one exception while he was employed by Naval Intelligence in 1972, Mr. Edwin P. Wilson was not asked or requested, directly or indirectly, to perform or provide any services, directly or indirectly, for the CIA.”

Wilson knew he had no defense against that, so he opted not to testify. The jury convened, asked to be read the affidavit one more time, and came back with a guilty verdict on February 5, 1983.

Wilson was also convicted in Virginia for shipping arms to Libya and in New York for conspiring to have his prosecutors killed. His prison stint began in solitary confinement at the federal pen in Marion, Illinois, where one of his neighbors was Christopher Boyce, the affluent twentysomething who sold secrets to the Soviets and was immortalized in the book and movie The Falcon and the Snowman.

Wilson was locked up at least 23 hours a day in a 12-by-12-foot cell at Marion. “Cement beds are tough, because the mattress is about that thick,” he says, holding his large thumb and larger forefinger less than an inch apart. “The first ten years were miserable.”

But he did have a lot of free time, so he began requesting boxes upon boxes of documents through the Freedom of Information Act, often asking for the same information multiple times in the hope the good stuff wouldn't always be blacked out. Folder by folder, sheet by sheet, he began to uncover proof of his contacts with the CIA after he'd left the agency and proof the federal prosecutors knew about those contacts.

In 1997, U.S. District Judge Lynn Hughes brought in local attorney David Adler to represent Wilson in his motion to vacate the 1983 Houston conviction. A former CIA man himself, Adler could get the clearance to view all the documents, plus he could weed through all the abbreviations dotting them. He started digging, and finding, and adding to the case.

Adler admits he initially thought of Wilson as just another guy in prison swearing his innocence. “But going through that warehouse of materials,” he says, “all of a sudden you come across this stuff that starts to support his claims, and you start thinking, ‘My God, this guy really was screwed over.'”

One gun that spewed smoke was a memo from a low-level employee of the CIA's inspector general's office, sent just three days after Wilson was convicted in Houston, that outlined several agency requests for Wilson's services after his retirement. “That started the whole house of cards that took 20 years to collapse,” says Adler.

Two days later a memo titled “Duty to Disclose Possibly False Testimony” was drafted by someone in the Justice Department and included a handwritten note: “Plain meaning of services > the affid. is inaccurate.”

The next day U.S. Attorney Daniel Hedges wrote a memo defending the affidavit, stating the use of the term “services” was not meant to be taken in a broad sense. And anyway, the logic went, Wilson already knew about his contacts with the agency, so it wasn't really new evidence and didn't have to be disclosed.

A week later the government drafted a letter to Wilson's attorneys that stood by the affidavit but mentioned several of Wilson's post-1971 contacts. The letter was never sent.

Within three months of the conviction, the Justice Department knew of at least 80 contacts between Wilson and the agency after he'd retired. These included a meeting with associate deputy director Shackley about providing potential Libyan contacts and another about acquiring a Soviet surface-to-air missile system, not to mention contacts with agency personnel about securing antitank weapons and Iranian body armor.

During Wilson's appeal, the government slipped in a quick mention of two of his more innocuous contacts with the agency: procuring desalinization plants for Egypt and helping a Laotian general find a house in the United States. Wilson's conviction was upheld.

The former spy sat for two decades before Judge Hughes vacated his conviction on October 27, 2003. “America did not defeat the Axis because it locked up Japanese Americans,” the judge wrote. “America did not defeat the Soviet Union because it tried to lock up its philosophic fellow-travelers here. America will not defeat Libyan terrorism by double-crossing a part-time, informal government agent.”

Wilson walked out of prison on September 15, 2004.

We'll probably never know if the CIA actually encouraged the sale to Libya of enough plastic explosive for 40,000 Pan Am Flight 103s, but it's not tough to imagine a current scenario in which the agency might look at the big picture and okay the deal.

“I'm telling you right now,” says Adler, “if I was an agency officer and somebody told me, ‘Give me 40,000 pounds of explosives that I can pass on to Osama bin Laden and I'll tell you where he is or whether he's got a nuclear bomb,' I would say, ‘We need to doctor it up some way so it becomes inert after about a week,' but I would say, ‘Let's do it.' I don't think you're doing your job as an American intelligence officer if you don't jump on that kind of stuff.”

Now 78 years old, Wilson is busy working on appealing his convictions for shipping guns in Virginia and soliciting murder in New York. His argument in Virginia is roughly the same as it was in Houston, and he’s got Adler on the case. Getting the New York conviction overturned is going to be more difficult, although last year the undercover FBI agent who lured Wilson into arranging the hits was charged with complicity in four gangland-style slayings, so that’ll probably help his chances.

And then there's the civil lawsuit, which Seattle superstar attorney Steve Berman, winner of more than $340 million for former Enron employees, filed on Wilson's behalf in October 2005. The defendants include Lawrence Barcella and Daniel Hedges, who went on to become big-time private-practice attorneys in D.C. and Houston, respectively, not to mention former prosecutors Stephen Trott and Daniel Jensen, now both sitting federal judges.

The suit alleges Wilson's Fifth Amendment rights were violated when federal prosecutors knowingly fabricated evidence against him. It details how the government stripped Wilson of tens of millions in tax court. It implies Barcella leaked classified documents to author Peter Maas during research for the book Manhunt: the Incredible Pursuit of a CIA Agent Turned Terrorist, which heroized the lawman's quest for Wilson.

“The information that Maas got was not classified,” says Barcella, who claims the author, now deceased, constructed his narrative from grand-jury transcripts to which Wilson also had been privy. But none of that really matters anymore, because five weeks ago U.S. District Judge Lee Rosenthal dismissed Wilson's civil suit outright, ruling the behavior of the prosecutors, “even if improper, is entitled to absolute immunity.”

When asked to comment on the decision, Houston attorney Hedges said he'd rather not, since there is likely to be an appeal, although the Houston Press did manage to coax from him a bland acknowledgement that Rosenthal's opinion was “thoroughly researched and very clearly explained.”

Wilson's civil attorney says he definitely plans to appeal the decision. “There is a doctrine of immunity that applies to prosecutors, but we believe Judge Rosenthal erred in that he gave it more legs than it has,” says Berman. “The court is saying, ‘Oops, sorry. They're allowed to do that.' That's third-world country stuff. You expect it in Panama, maybe, that government officials could lie and get someone locked up for 20 years and walk away, not in the United States. It's just outrageous.”

As for Barcella, he won't comment on what went down during Wilson's prosecution, but he does say the judge made “a correct decision in the law, although from a personal standpoint, it's slightly frustrating” because the former assistant U.S. attorney will likely never get the chance to defend his actions in court.

You've got to wonder what he'd have to say.