America’s Unknown Hostage : Arvey Drown’s Latest Shady Scheme to Get Rich Quick Lands Him in the Makeshift Jail of Filipino Rebels

The sound is scratchy and the video a little shaky, but there’s no mistaking the toothy grin and deep baritone voice of Arvey Duane Drown, America’s least-known political hostage.

“As you can see, I’m still breathing,” he says slowly. “And the reports of my death are in error. About my being alive, I’m alive.”

He pauses, then pleads with a nervous laugh, “So do what you have to do, boys. Get me out of here!”

Forgotten altogether in the frenzy when Western hostages were finally freed in Lebanon, the strange case of Colorado gold hunter Arvey Drown, 64, has attracted little attention ever since he was abducted at gunpoint on Oct. 19, 1990, by communist guerrillas in the rugged mountains of northern Luzon.

Nearly 17 months later, Drown is confined to a crude wooden cage, with bars made of wrist-thick branches, in a remote camp of the New Peoples’ Army. He says he’s been in nine jungle “gulags.” He’s tried to escape three times and once wandered four days before recapture. Usually cleanshaven, he’s grown a shaggy white beard and lost considerable weight. His exasperated guards say he is “hardheaded” and sometimes throws his food at them or refuses to talk for days.

That, at least, is the story brought back to the rustic provincial capital of Tuguegarao by two Filipino reporters who hiked eight days with the rebels to interview Drown in a jungle hide-out Dec. 31. Their photos and videotape of Drown and his captors, made available to The Times, are the first clear proof that he has survived his ordeal.

“He looks so very sad and so very lonesome,” says Drown’s wife, Ruth, 54, who cried when she viewed the tape. “He has a look of such despair.”

The case has stumped U.S. officials, not least because Drown is not your average hostage: He’s a convicted con man with a talent for tall tales and million-dollar swindles. Even his wife, who now stays at the archbishop’s residence in Tuguegarao, is suspicious of the bizarre cast of local treasure hunters, flimflam artists and a mysterious Lebanese-born American businessman who claim inside information--usually for a fee.

“There are wheels within wheels, and a lot of stuff we simply don’t know,” says a frustrated U.S. Embassy official in charge of the case.

Still, one thing is clear: Negotiations for Drown’s release broke down after a planned release in the jungle last Christmas collapsed. The NPA insurgents and the Philippine military accused each other of violating a 72-hour cease-fire called to facilitate the hand-over to church officials.

Since then, the NPA has stepped up its demands. Rebels now insist that government troops withdraw from most of the eastern Cordilleras, a major NPA stronghold in the 23 years it has fought to create a Marxist state. Government offensives and near-daily bombings since September, 1990, by aging “Tora-Tora” planes and helicopter gunships have turned two valleys, and villages around Conner and Pinucpuc, into bloody war zones.

“These demands are simply not acceptable,” says Brig. Gen. Edgardo D. Batenga, the gruff-speaking commander of the 5th Infantry Division, which does much of the fighting and dying. “We would like to see Mr. Drown released. But the NPA is using him as a political weapon to attain tactical objectives.”

Now, the State Department says, Drown is America’s only confirmed political hostage.

Recently, Drown’s case has been overshadowed by the Jan. 17 kidnaping in Manila of California oil executive Michael Barnes, general manager of Philippine Geothermal, a subsidiary of Unocal Corp.

American and Philippine investigators believe a separate NPA faction is holding Barnes, of Long Beach, for a multimillion-dollar ransom, and the Philippine Daily Inquirer reported today that a videotape had been sent to Barnes’ family to underscore the demand. But there has been no official confirmation from the rebels.

If Drown’s abduction remains shrouded in mystery, so does much of his life.

Raised in Fresno and Modesto, Calif., Drown told his wife he fought in Burma with Merrill’s Marauders, the famed Army commandos, although he was barely 17 when World War II ended. He also said his family was paid life insurance after he was declared dead of a broken back from a parachute jump in the Korean War. He wasn’t really dead, he explained, merely captured. He later led 20 POWs on a daring mass escape by using extrasensory perception to find the way out, he told her.

Dubious U.S. officials say it’s impossible to confirm Drown’s dramatic claims, because his military records were destroyed in a fire at a government archives in St. Louis several years ago. Ruth Drown concedes that, among others, her husband’s 89-year-old mother in Sonora, Calif., remain skeptical.

“She says, ‘Oh that’s a lie, Arvey, why do you lie so much?’ ” Ruth Drown says. “And I guess he never told his children. Whenever I mention it, they say, ‘Oh, that’s just a big lie.’ ”

In September, 1980, the U.S. Securities and Exchange Commission had a similar response. An SEC complaint filed in Los Angeles alleged a commercial finance company headed by Drown had defrauded investors of $5.3 million in a classic “Ponzi scheme,” in which dividends are paid with money gained from new investors rather than from earnings. He also was accused of selling fraudulent investment contracts, debentures and profit-sharing agreements.

In April, 1983, a federal judge in Denver sentenced Drown to three years in prison on three counts of mail fraud. Prosecutors said he and a partner bilked hundreds of investors of $11.2 million by selling nonexistent gold bullion in Colorado mines and promising them huge, tax-free profits at a bank in the Cayman Islands.

Drown’s interest in gold apparently brought him to the Philippines from his home in Berthoud, Colo., on Sept. 28, 1990. He soon met Yolley Laurel, a businesswoman who took him to inspect two gold-mining claims she has filed in Bicol province, south of Manila.

“He told me he’s a mining engineer and he wanted to invest,” she says.

Instead, for reasons still unclear, Drown and two friends hired a jeep and drove north along the two-lane, potholed highway that flanks western Luzon. They arrived at Bagnag, a farming village on the northern coast, late on Oct. 19, 1990. Traffic was backed up behind a roadblock manned by uniformed troops.

“It was getting dark, and Arvey knew they had to get going,” says his wife, who later talked to his companions. “So he got out of the jeep and began to direct traffic. And these men were wearing uniforms. So Arvey went over . . . and said he was in the U.S. military. But it was the NPA. So they grabbed him.”

Drown’s friends continued to the town of Aparri, where they quickly contacted a local resident, Ibrahim Dagher. In increasingly implausible stories over the next few months, he offered to broker Drown’s release. Dagher was previously identified in congressional testimony in Manila as a “leading Lebanese businessman” allegedly involved in a scheme to sell “huge volumes of gold bars” owned by the late President Ferdinand E. Marcos. Dagher now has dropped from sight, leaving unpaid hotel bills and unanswered questions.

Others have their own unlikely stories:

“Drown is now working with these NPAs to teach them guerrilla warfare, especially explosives,” confides regional police chief Agerico Kagaoan.

“We heard he is looking for buried treasure,” says Melvin P. Vargas, the provincial governor.

“He’s American. He’s ex-military. Therefore, people think he must be CIA,” says Father Ricardo Baccay, a parish priest.

Ofelia Castro, a member of a local negotiating team seeking Drown’s release, just shakes her head. As provincial administrator, she’s none too impressed with the foreigners she meets in a rugged region best known for illegal logging, blatant smuggling and Wild West shootouts.

“Here, you’re a missionary, or a Peace Corps guy who stays behind and wears a loincloth, or a treasure hunter,” she says. “These are not normal people.”

It wasn’t until last Oct. 16, a year after Drown’s capture, that members of the NPA’s Joel Sibbaluca Command, named for a fallen comrade, finally admitted they were holding him on suspicion of aiding the Philippine military. But in a communique, the rebel spokesman confessed they, too, were confused: Drown carried no IDs and had “dubious reasons” for wandering in a war zone. He appealed for someone to provide “his proper identification.”

NPA contacts approached Laurel, the gold-claim owner. And the U.S. Embassy quickly sent word that Drown had no ties to the CIA, the Defense Department or any other government agency.

“He’s a private individual,” one embassy official says. “There’s no diamond in this lump of coal.”

Apparently the NPA agrees--or is just tired of its cantankerous captive. The rebels announced in December that Drown was tried and cleared of “espionage charges” in an NPA-run “people’s court” deep in the jungle. Plans were soon made: Drown and two Philippine soldiers held at another camp would be released over Christmas.

The U.S. Embassy sent a plane from Manila, 220 miles to the south. On board was Ruth Drown, who had arrived in the Philippines a month before. The church prepared a “mercy mission” of food and doctors. A welcome group hiked into the jungle and waited. The holiday cease-fire began--and failed. A week later, another try collapsed. Drown never appeared.

For now, Drown’s five adult children, scattered in California and Colorado, wait and wonder. In Modesto, daughter Sharon Roberts, 37, has a free ticket to the Philippines, but says, “Hopefully, I won’t need to use it. This doesn’t sound like a place you really want to go to.”

Brian Drown, 34, a heavy construction equipment operator in Sonora, complains that the United States should do more to stop hostage-takers. His father would agree, he says, even if he was killed “by us trying to go in and get them out. It would be better than us playing tiddlywinks with these terrorists who decide to grab people.”

In Denver, salvage yard owner Jason Drown, 28, also complains. “I’d like to see at least as much effort going into his release as they put into the hostages in the Middle East,” he says. “As far as I can tell, they haven’t done much of anything. . . . He’s not going to be able to take too much of this.”

Back in Tuguegarao, Ruth Drown says she’s running low on cash and may return to Colorado if her husband isn’t freed this month.

“I say to myself, ‘How long do I sit here and wait?’ ” she muses.

Then she pulls out a wallet photo of her husband from happier days. He wore a Western string tie, a salt-and-pepper mustache and a broad grin under twinkling eyes. She stares at it and smiles.

“Oh, there’s just so many stories about Arvey,” she says softly. “What the truth is, sometimes I don’t even know.”

Times researcher Ann Rovin in Denver contributed to this story.