CALIFORNIA ALBUM : Horror of Spiro Case Keeps Town Talking : Many in affluent enclave insist he could not have killed his wife and children. Some see a sinister political motive.

RANCHO SANTA FE — 

Set in a glorious profusion of eucalyptus, this lush community just inland from Del Mar is entangled in the drama of a whodunit that has captured the imaginations of those who live, work and visit here.

Everyone, it seems, has solved the mystery of the guilt or innocence of Ian Stuart Spiro. Spiro, 46, a former British commodities dealer with ties to the shadowy spy world, was found dead in the desert eight days after his wife and three children were murdered in their Rancho Santa Fe home last November.

The execution-style slayings sometime after midnight Nov. 1, 1992, of Gail Spiro, 41, and their three children--Sara, 16, Adam, 14, and Dina, 11--have had a profound effect on “The Ranch,” as the community is called by the CEOs, retired movie moguls and celebrated VIPs who are among its 4,300 residents.

Four months later, tile-roofed boutiques along the town’s charming main street still buzz with the latest Spiro development. Golfers still debate--often hotly--details of the case while traversing the emerald links of the Rancho Santa Fe Golf Club, and many are lured by Spiro headlines occasionally popping up on news racks.

Two main theories have become the talk of this wealthy enclave. One is that Spiro and his family were murdered by an outside force. Perhaps Middle East terrorists? Assassins from some disgruntled intelligence agency? The second is that Spiro went berserk in the face of dwindling resources and killed his family and himself rather than face financial ruin.

Most of the two or three dozen other versions circulated around town--with the exception of one that says Spiro is alive and well and waiting to collect a huge insurance policy--spin off these two.

What separates the Spiro murders from others, says Barbara Jane (B. J.) Gibson, owner of Executive Office Services, is that “people here are confronting the possibility of evil within themselves.”

“No one wants to think that a man would do that to his wife and children because we always want to believe in the good in people,” said Gibson, who has thought since the beginning “that Spiro did in truth do his family in. It was in his eyes.”

From Day One, the San Diego Sheriff’s Department has based its investigation on that premise. Almost no one who knew the Spiros accepted this scenario--at least not at the beginning.

Family and friends described Spiro as the perfect father, a solid husband and a shrewd wheeler-dealer. He was the kind of parent, they said, who helped out with domestic chores, packed his kids’ lunches, and ferried them to and from school.

As for funds, he was maybe down on his luck, that’s all. He’d been down a couple of million dollars before and recovered, they said.

Many are convinced that the killings stemmed from Spiro’s past espionage activities, and that the Brit was prepared to talk about sensitive issues, including the Iran-related scandals of the Reagan-Bush era, in return for money--either in a movie deal or to British tabloids. Accounts of Spiro’s role in aiding Lt. Col. Oliver North and Anglican Church envoy Terry Waite in negotiations for the release of Western hostages in Lebanon were documented in a book by BBC journalist Gavin Hewitt, several pointed out.

“The sheriff’s spokesman should have told us what happened in the first 72 hours in such a way that put that fire out,” said crime novelist Joseph Wambaugh, who moved to Rancho Santa Fe three years ago.

The lack of information has magnified a “garden-variety murder-suicide” to absurd proportions, he said, calling to mind claims that Elvis is still alive. As for Wambaugh, he said he “knew from the first day, the first hour that Spiro killed his family. Any rookie cop could have told you that.”

He has plenty of company who share that belief. Fred Reeves, a 35-year resident and retired special agent for the Office of Naval Reserve, believes that Spiro “lost control of himself and did commit the murders and suicide.”

“Most of us enjoy intrigue, and it’s intrigue if he was supposed to be a spy,” Reeves said. “I had no experience with him, but I think when everything is known, we will find he had very little to do with that sort of thing.”

Certainly, the women at the Rancho Beauty Salon--a barometer of community reaction to everything from politics to weather--come armed to defend Spiro against any aggressor.

Since November, the beauticians have lined up on Spiro’s behalf like defense attorneys plotting to overthrow a Supreme Court decision. Each week they produce a steady stream of testimony, rebuttals and documentation to prove Spiro’s innocence beyond a shadow of a doubt.

A couple of weeks ago, for example, Linda Kennedy proffered an article that quoted a Dec. 3 issue of Intelligence Newsletter, a Paris-based fortnightly of the espionage industry. Spiro’s death, according to the newsletter, has removed from the scene “probably one of the last embarrassing witnesses to the Irangate ‘Arms for Hostages’ negotiations.”

Kennedy, insisting that the majority of her customers back her up, suspects a cover-up and expresses distrust of any finding short of assassination because she “can’t believe Spiro killed his kids.” This article, she says, supports her point.

It speculates that Spiro was murdered because he was about to sell secrets to the People, a British tabloid where his cousin, Nigel Spiro, was a reporter. “By murdering his whole family,” Intelligence Newsletter said, “(the killers) have clearly sent out a bloody message to other Irangate witnesses who may be tempted to speak out.”

After the shootings, which caught Gail Spiro and her children in their bedrooms, at least one Rancho Santa Fe family was alarmed enough to buy another guard dog and apply to the town’s association for permission to ring their home with a perimeter fence. These people were friends of the Spiros, socialized with them, and were among the five who discovered the bodies of Gail and her children.

Although there has been a “general request for more (police) protection,” said Rancho Santa Fe Assn. manager Walt Ekard, most residents accept the sheriff’s theory that Spiro committed the crimes. “I feel most people here feel it was a tragic circumstance and they’ve moved on with their lives,” Ekard said.

Yet the idea of a conspiracy or cover-up persists, often argued most heatedly by those who didn’t know the Spiros.

Norman Cole, a retired mailman who drives a bus part time in Rancho Santa Fe, voices the most-heard reprise: “No matter what the evidence, you’ll never make me believe Ian Spiro killed his family.” A voracious follower of the case in newspapers and on television, Cole discusses the murders with his girlfriend, who is a “heavy reader” of books on the Kennedys and Marilyn Monroe.

Taking into consideration Spiro’s Middle East connections, his apparent ability to rebound repeatedly from bankruptcy and the fact that Spiro may have negotiated with terrorists on behalf of Western hostages, Cole says, “A guy who went through that doesn’t get stressed and kill his family.

“A parent goes bonkers and murders his family. It happens all the time,” said Wambaugh, predicting the case will spiral into “a repeat of the Oswald-killed-Kennedy” mania. “People like to believe in the Loch Ness monster too.”