Reckless Endangerment by Gretchen Morgenson and Joshua Rosner. Illustrated. 331 pp. Times Books/Henry Holt & Company. $30
It’s hardly news that the near meltdown of America’s financial system enriched a few at the expense of the rest of us. Who’s responsible? The recent report of the Financial Crisis Inquiry Commission blamed all the usual suspects — Wall Street banks, financial regulators, the mortgage giants Fannie Mae and Freddie Mac, and subprime lenders — which is tantamount to blaming no one. “Reckless Endangerment” concentrates on particular individuals who played key roles.
The authors, Gretchen Morgenson, a Pulitzer Prize-winning business reporter and columnist at The New York Times, and Joshua Rosner, an expert on housing finance, deftly trace the beginnings of the collapse to the mid-1990s, when the Clinton administration called for a partnership between the private sector and Fannie and Freddie to encourage home buying. The mortgage agencies’ government backing was, in effect, a valuable subsidy, which was used by Fannie’s C.E.O., James A. Johnson, to increase home ownership while enriching himself and other executives. A 1996 study by the Congressional Budget Office found that Fannie pocketed about a third of the subsidy rather than passing it on to homeowners. Over his nine years heading Fannie, Johnson personally took home roughly $100 million. His successor, Franklin D. Raines, was treated no less lavishly.
To entrench Fannie’s privileged position, Morgenson and Rosner write, Johnson and Raines channeled some of the profits to members of Congress — contributing to campaigns and handing out patronage positions to relatives and former staff members. Fannie paid academics to do research showing the benefits of its activities and playing down the risks, and shrewdly organized bankers, real estate brokers and housing advocacy groups to lobby on its behalf. Essentially, taxpayers were unknowingly handing Fannie billions of dollars a year to finance a campaign of self-promotion and self-protection. Morgenson and Rosner offer telling details, as when they describe how Lawrence Summers, then a deputy Treasury secretary, buried a department report recommending that Fannie and Freddie be privatized. A few years later, according to Morgenson and Rosner, Fannie hired Kenneth Starr, the former solicitor general and Whitewater investigator, who intimidated a member of Congress who had the temerity to ask how much the company was paying its top executives.
All this gave Fannie’s executives free rein to underwrite far more loans, further enriching themselves and their shareholders, but at increasing risk to taxpayers as lending standards declined. A company called Countrywide Financial became Fannie’s single largest provider of home loans and the nation’s largest mortgage lender. Countrywide abandoned standards altogether, even doctoring loans to make applicants look creditworthy, while generating a fortune for its co-founder, Angelo R. Mozilo. Meanwhile, Wall Street banks received fat fees underwriting securities issued by Fannie and Freddie, and even more money providing lenders like Countrywide with lines of credit to expand their risky lending and then bundling the mortgages into securities they peddled to their clients. The Street, Morgenson and Rosner say, knew lending standards were declining but maintained the charade because it was so profitable. Goldman Sachs even used its own money to bet against the bundles — making huge profits off the losses of its clients on the very securities it had marketed to them. Eventually, of course, everything came crashing down.
The authors are at their best demonstrating how the revolving door between Wall Street and Washington facilitated the charade. As Treasury secretary, Robert Rubin, formerly the head of Goldman Sachs, pushed for repeal of the Depression-era Glass-Steagall Act that had separated commercial from investment banking — a move that Sanford Weill, the chief executive of Travelers Group had long sought so that Travelers could merge with Citibank. After leaving the Treasury, Rubin became Citigroup’s vice chairman, and “over the following decade pocketed more than $100,000,000 as the bank sank deeper and deeper into a risky morass of its own design.” With Rubin’s protégé Timothy F. Geithner as its head, the New York Federal Reserve Bank reduced its oversight of Wall Street.
A tight web of personal relationships connected Fannie, Goldman Sachs, Citigroup, the New York Fed, the Federal Reserve and the Treasury. In 1996, Fannie added Stephen Friedman, the former chairman of Goldman Sachs, to its board. In 1999, Johnson joined Goldman’s board. That same year Henry M. Paulson Jr. became the head of Goldman and was in charge when the firm created many of its most disastrous securities — while Geithner’s New York Fed looked the other way. As the Treasury secretary under George W. Bush, Paulson would oversee the taxpayer bailout of Fannie Mae, Freddie Mac, Goldman, Citigroup, other banks and the giant insurer American International Group (A.I.G), on which Goldman had relied. As head of the New York Fed, and then as the Treasury secretary, Geithner would also oversee the bailout.
Morgenson and Rosner are irked that their key players got away with it. American taxpayers have so far shelled out $153 billion to keep Fannie and Freddie afloat and are still owed tens of billions from bailing out other financial institutions. Yet today James Johnson is a rich and respected member of Washington’s political establishment (although he was forced to resign from President-elect Obama’s advisory team after the press got wind of his cut-rate personal loans from Countrywide). Franklin Raines retired from Fannie with a generous bonus. Henry Paulson became a fellow at Johns Hopkins. Robert Rubin is affiliated with the Brookings Institution. Timothy Geithner remains Treasury secretary.
“The failure to hold central figures accountable for their actions sets a dangerous precedent,” the authors say. “A system where perpetrators of such a crime are allowed to slip quietly from the scene is just plain wrong.” True up to a point — but Morgenson and Rosner don’t show that any actual crimes were committed. Their major characters surely exhibited outsize ambition and greed, but these qualities are not exactly rare in modern capitalism. Curiously absent from their book are some other prominent people who have been suspected of perpetrating fraud, like Richard S. Fuld Jr., who ran Lehman Brothers into the ground, and Joseph J. Cassano, the former head of the financial products unit at A.I.G.
The real problem, which the authors only hint at, is that Washington and the financial sector have become so tightly intertwined that public accountability has all but vanished. The revolving door described in “Reckless Endangerment” is but one symptom. The extraordinary wealth of America’s financial class also elicits boundless cooperation from politicians who depend on it for campaign contributions and from a fawning business press, as well as a stream of honors from universities, prestigious charities and think tanks eager to reward their generosity. In this symbiotic world, conflicts of interest are easily hidden, appearances of conflicts taken for granted and abuses of public trust for personal gain readily dismissed.
All told, the nation appears to have learned remarkably little from the near meltdown. Fannie and Freddie, now wards of the state, currently back more than half of all new mortgages, and their executives are still pocketing fortunes. Wall Street’s biggest banks are a fifth larger than they were when they got into trouble, and the pay packages of their top guns as generous. Although the rest of America has paid dearly, we seem more recklessly endangered than ever. h
Trading With The Enemy
Matthew Swibel, 04.19.04
If you want to get round export controls, just sell the product to a front company in Dubai. The middlemen will take it from there.
On paper the shipment was harmless enough. Sixty-six American-made spark gaps–high-speed electrical switches used in medical devices to break up kidney stones–traveled from the manufacturer in Salem, Massachusetts late last summer to a buyer in Secaucus, New Jersey. From there, according to the export declaration, they were to be shipped to their ultimate destination in Cape Town, South Africa. But these spark gaps can also be used to detonate nuclear bombs–and it turned out that the goods were aimed at an end user in Pakistan, with a stopover in Dubai. The commercial capital of the United Arab Emirates, where trading activity accounts for the biggest single chunk (16.5%) of a $20 billion economy, has become a favorite diversion point on the Persian Gulf for shady cargo. With no export controls and hardly any bureaucracy at ports, airports and free zones, this entrepôt provides stellar cover for smugglers hoping to bypass U.S. embargoes.
On Oct. 3 U.S. investigators got a tip from a South African source. The shipment was headed for Islamabad via a DHL freight-forwarding service on Emirates Airlines–Dubai’s government carrier. Hours after the Emirates Airbus jet landed at Dubai International Airport on Oct. 20, a U.S. special agent there tracked down the spark gaps to the airline’s cargo shed, contacted its director of security and demanded to inspect the box. The response? Not a chance, according to the U.A.E.’s director of customs. The next day the goods, valued at $30,000, arrived in Pakistan aboard another Emirates flight.
The alleged shipper, an Israeli national named Asher Karni, was arrested in December at Denver International Airport. He awaits trial in the U.S. for conspiring to export goods without a license, a crime that could result in a ten-year sentence and a $250,000 fine per count. Neither Emirates Airlines nor the U.A.E. has been criticized publicly by U.S. officials.
That is particularly odd in light of the recent revelations of the region’s pivotal role in the spread of weapons of mass destruction. A Dubai-based computer firm arranged for Malaysian- and European-made gas centrifuge components, used to enrich uranium, to be sent on to Libya. The firm was part of a vast network devised by Pakistan’s Abdul Qadeer Khan.
Hardly a revelation to the U.S. government. “Dubai, as a major shipping hub with a large free-trade zone, is in close proximity to countries of concern, and that poses some challenges,” says Kenneth Juster, an undersecretary at the U.S. Department of Commerce. Among the world’s top five sea-air hubs, Dubai can accept cargo and send it off in less than four hours. It’s only 100 miles to the southern Iranian port of Bandar Abbas.
No matter how hard the U.S. tries to keep dual-use commodities like gas monitors, software and nuclear triggers out of transshipment hubs like Dubai, stuff gets through. The lure is quick profits. Traders easily pocket 40% markups just by flipping goods, illicit and otherwise. “Business-people [here] are like cats,” says Abbas Bolurfrushan, chairman of the Dubai-based Iranian Business Council. “They find their way out of any dilemma.”
The open secret is that Dubai buys far more than it keeps. More than a quarter of its $23 billion in annual nonoil imports are reexported, and Iran gets the biggest share. Interviews with private businesspeople and U.S. officials, along with court documents, reveal a simple scheme. Companies located around the world sell goods–from cigarettes to medical devices and PCs–to buyers in the U.A.E. Dubai traders repackage the items and send them along by air or ship to agents in, say, Tehran, Pyongyang, Damascus or Islamabad.
Smoking out the offenders is tough. Outside of free zones foreigners are not permitted to own a majority of a business in Dubai, and local partners aren’t subject to export-control laws. These realities leave bureaucrats in Washington pessimistic. “Whenever there are third-party transactions, there is only so much you can do to follow the path of the transaction,” admits a U.S. Treasury official.
Smuggling isn’t new to the Persian Gulf. But the system really took off around 1987, when the U.S. imposed its first trade embargo on Iranian goods and services in response to Tehran’s sponsoring of terrorism in the Middle East. By the time the 1995 oil sanctions took effect, it was a well-greased mechanism. Virtually all trade and investment with Iran was prohibited in 1997, though the ban on caviar, nuts, dried fruits and carpets was lifted in 2000. The penalties–fines of up to $250,000 for individuals and ten years in the slammer–should have deterred violators.
Yet it didn’t take long for U.S. products to seep through the cracks. As long as a decade ago, more than a quarter of the roughly $1 billion in American goods exported to Dubai ended up in Iran, estimates the Wisconsin Project on Nuclear Arms Control, a nonproliferation advocacy group in Washington, D.C. Last year U.S. companies sold $3.4 billion worth of goods to the U.A.E.; export licenses have jumped 47% over the last five years. “When you blow off the dust, the Dubai region sometimes means Iran and Libya,” says Paul DeBenedictis, chairman of the American Business Council of the Gulf Countries.
Today American companies are downright brazen about dodging the sanctions. And why not? On the list of Specially Designated Nationals and Blocked Persons maintained by the Office of Foreign Asset Control at the U.S. Department of Treasury, only 1% of 3,032 separate entries are Dubai-based individuals and entities designated under the Iraq, Libya and Iran terrorism sanctions programs. On the Commerce Department’s current list of 55 foreign end users specifically involved in proliferation activities, there is not one U.A.E. entity; the agency dispatched its first attaché to Dubai only 15 months ago. Since 1999 the government has turned down just 2% of applications to export to the U.A.E.–sometimes snaring unsuspecting entrepreneurs (see box). Officials do point out that 114 end-use checks were conducted in the region between 2000 and 2003, up from 63 checks from 1996 to 1999.
Still, “companies are playing fast and loose,” says Adam Pener of Conflict Securities Advisory Group, a Washington, D.C.-based consultancy to multinational businesses. Halliburton, for example, manages to do business with Iran obliquely. Its Dubai-based affiliate, Halliburton Products & Services Ltd., allegedly has no Americans on staff; the Houston oil services company claims it has no direct ownership of the operation. Nevertheless, FORBES has obtained documents showing how Kala Ltd., the British arm of the National Iranian Oil Co., solicited at least 17 separate bids from the affiliate during 1997 and 1998 (when Vice President Cheney was Halliburton’s chief executive). A few bids include handwritten notes that say “FOB [free on board] Dubai Airport” or “FOB Dubai port”–meaning that the U.A.E. was just a way station between Halliburton and Tehran. Halliburton would not comment on the bids. In any event, earlier this year the Treasury Department reopened a 2001 inquiry into Halliburton’s Iran operations and its Dubai-based partner.
Halliburton is far from the only brand that shows up in Tehran. Hewlett-Packard, Dell and Microsoft, among many other U.S. companies, keep Dubai offices and are favorites these days among Iranian traders in Dubai. Reason? Strong demand for “anything high tech for military or oil services,” says Bolurfrushan of the Iranian Business Council. “In compliance with U.S. trade laws, it is Microsoft’s policy to not sell products to Iran from any of its offices,” says a spokeswoman for the software colossus. (Dell says it follows export controls, too.) To curtail the proliferations, the Department of Commerce is strengthening its regulation that punishes U.S. companies that send goods and know–or have reason to know–those goods could contribute to weapons of mass destruction.
Dubai, for its part, is happy to wink and look the other way. Last month the emirate’s de facto ruler, Sheikh Mohammed bin Rashid Al Maktoum, met with Juster about the possibility of putting export controls on the books. The process “would require drafting laws and regulations, establishing a licensing and enforcement process and training personnel,” says Juster. It could take five years.
Baloney. The U.A.E. has acted swiftly in the past–when it has been in the state’s interest to do so. After a Georgian-flagged ship sank off Dubai’s coast in 2001, spilling smuggled Iraqi oil and forcing the closure of several water desalination plants, the U.A.E. foreign minister swiftly announced it would punish the shipowners and Dubai companies caught transporting illegal oil. Dubai authorities have squelched counterfeiting, another common practice in free zones, says Timothy Trainer, president of the International AntiCounterfeiting Coalition in Washington. One of its members, cigarette maker Philip Morris, worked on a three-month-long investigation with the Dubai police and in January 2002 seized 120 million knock-off cigarettes, worth $7.5 million. (None of the smugglers, however, faced jail time. Only one paid a fine, and that was negligible, Trainer says.)
Can’t the U.S. persuade the United Arab Emirates to police their middlemen? Apparently much of it comes down to docking privileges for U.S. forces and American arms sales ($8.1 billion from 1995 to 2002) to the U.A.E. Forcing the issue “would be incredibly stupid,” says a source at the U.S. Embassy in the U.A.E. “This is the one friend we have in the Gulf, except Kuwait.”
Protesters attend a demonstration against Spain’s economic crisis
Hispanic spring? Young ‘Indignados’ protesting last Sunday against high unemployment in central Madrid. The same day, voters suffering the effects of a severe downturn delivereda defeat for the ruling Socialist party in local and regional elections
After seven years of almost uninterrupted energy and optimism, José Luis Rodríguez Zapatero is finally on the ropes. The Spanish prime minister has suffered a humiliating blow dealt to other western leaders in charge during the post-2008 economic crisis. He has been badly beaten at the polls – in this case, regional and local – and his Socialist party is expected to lose again in the general election that must be held in the next 10 months.
“We have often won, and we know how to win. We also know how to lose,” said a subdued Mr Zapatero, conceding his party’s worst local election defeat since the restoration of democracy in the 1970s.
So far, so predictable. Gordon Brown, former UK prime minister, was voted out last year despite being praised for his management of the international financial crisis.
Yet Spain’s political upheaval is perceived – at home and abroad – as only the latest symptom of a particularly severe economic downturn far harder to resolve than mere popular disillusionment with the party in power.
This is a new, uncomfortable reality for Spaniards. After 15 years of outperforming Germany in terms of economic growth, only in the past two has Spain done worse. Until then, it was the toast of Europe, attracting nearly 5m immigrants and billions of euros of credit to build and finance housing stock revealed as surplus to requirements after the property bubble collapse.
Today many outsiders see the country as the eurozone’s next domino, the member most vulnerable to an international credit squeeze that would force it to follow Greece, Ireland and Portugal in seeking a European Union and International Monetary Fund bail-out. France’s Natixis this week became the latest investment bank to ask almost casually in a research report whether Spain should leave the euro and to speculate on what would happen if it did.
In Spain itself, people’s self-confidence has been badly dented by such unwelcome attention from the markets, as well as by the collapse of the domestic housing bubble in 2007. Even intelligent Spanish bankers and business leaders have started to see Anglo-Saxon or German conspiracies behind every lurch downwards in the value of their sovereign bonds.
Not that many plotters would benefit in the long run. Any bail-out of the eurozone’s fourth-largest economy, would stretch the EU’s resources to the limit, and put severe strain on the German and French banks that helped finance the rapid Spanish expansion of the past two decades.
A casual observer – a tourist wandering through the centre of Madrid, say – might conclude that the events of the past fortnight have confirmed Spain’s status as a specially weak economy and a fragile polity, making it a member of the “peripheral” nations’ club that is causing such consternation at the core of Europe.
A week before last Sunday’s elections, thousands of young Spaniards, organising themselves through Facebook and Twitter like Arab revolutionaries, took to streets nationwide to protest at high unemployment and the domination of politics by the Socialists and the rightwing Popular party. They occupied city centres, including Madrid’s Puerta del Sol and the Plaza de Catalunya in Barcelona, from which police yesterday tried to expel them using baton charges.
These self-proclaimed indignados (“the indignant ones”), mostly students and unemployed twenty-somethings, have plenty to complain about. Local politics is often steeped in corruption, and more than 100 candidates – some re-elected with increased majorities – are being prosecuted or investigated for such crimes. With unemployment at 21 per cent of the workforce, double the EU average, nearly 5m people are out of work. For those aged 24 or less, the rate is 45 per cent. For some political commentators, the only surprising thing about the youth uprising is that it did not happen sooner.
It would be wrong, however, to conclude that Spain’s economy is as weak as those of Greece or Portugal, that its banks are as loaded with bad property debt as those of Ireland or that its politics are dangerously unstable.
Almost without exception, the demonstrators have been peaceful and good humoured. They also lack a unifying cause akin to those of the Arab world’s pro-democracy protests.
This week the Puerta del Sol, lined with tents and makeshift stalls offering petitions and political manifestos, resembled London’s bourgeois-bohemian Camden Market more than Cairo’s Tahrir Square. On banners and posters, animal abuse, bankers, George Soros, racism, sexism and immigration controls get the thumbs down. Better education, revolution, the arts, recycling, organic food, solar power and political reform receive a clear thumbs up. Less clear is what they want to happen next.
“The main issue is that we are discontented and indignant at the system,” says Ana González, 23, a fine-arts student who works in a café, and sports a nose-ring and two studs next to her left eye. She says she is in favour of electoral reform to give smaller parties more representation. But as for how the protesters can achieve their aims: “We really don’t know.”
For the PP – the big winner in this week’s polls – the big problem is not some peculiar Iberian tendency towards failure and decay but the economic incompetence of Mr Zapatero.
Opinion polls suggest that Mariano Rajoy, the uncharismatic but competent leader of the resurgent party, is certain to be the next prime minister. Furthermore, such was the scale of the PP’s recent victory, and so deep are the divisions splitting the defeated Socialists, that an early election – probably in the autumn – now seems as least as likely as the prospect of Mr Zapatero hanging on until March 2012.
Bankers, business leaders and economists say Mr Zapatero was late in recognising the severity of the crisis but give him credit for vigorously pursuing since last May a plan to cut the budget deficit and restore Spain’s reputation in the financial markets. Without sufficient political support, however, there is no compelling reason for him to remain prime minister.
“With the coffers empty, people have ceased to believe in Zapatero fairyland,” says Manuel Arias Maldonado of the university of Málaga, recalling Mr Zapatero’s personal and ideological aversion to the public spending cuts he has been obliged to enforce. “To govern in Madrid [home of central government] against … the regions and the municipalities, that’s pretty hard. That’s the equivalent of paralysis.”
On a brighter note, Prof Arias says the sharp swing against the Socialists – in a country where most voters have liked to think of themselves as “centre-left” because of the taint left by Franco’s rightwing dictatorship – suggests the country is becoming more like a conventional western democracy. Many voters, it seems, simply switched their votes from the Socialists to the PP, which was founded by one of Franco’s ministers.
“Voting is less and less seen as an emotionally charged thing that has to do with family and alignments, and more as a pragmatic punishment or reward for the best and worst governments,” says Prof Arias.
The next government clearly faces a tough task in continuing the deficit-cutting begun by Mr Zapatero, and in laying the groundwork for future economic growth. But Mr Rajoy’s PP, far from laying out a detailed economic recovery plan, has said almost nothing about its intentions beyond calling for the early elections.
Both supporters and opponents of the party say its politicians fear they will suffer the fate of the UK Conservative party, which failed to win enough seats in parliament to govern alone, if they tell voters the truth about the economic hardship awaiting them.
“The PP has to make a very clear statement about where it stands in terms of economic policy,” says Jordi Canals of Barcelona’s Iese business school. “At some point you need a shadow government.”
Most economists think a Rajoy government would do little different from Mr Zapatero’s administration on deficit control, except perhaps enforcing regional budgets more rigorously. But they do expect a PP government to push for more radical liberalisation of the labour market and other measures to increase competitiveness.
In doing so, it would be able to build on an economic record that is not quite as grim as some bond market investors seem to think and exploit a democratic system more stable than the recent protests suggest.
During the years of crisis, Spain has reduced its dependence on foreign credit, halving its current account deficit. Multinationals in finance, energy and infrastructure have expanded overseas, exports have risen steadily and the tourism industry is expected to benefit this year from turmoil in rival destinations in north Africa.
“If the EU can somehow stave off the crisis – the currency issue, the restructuring of Greek debt – I think Spain will survive,” says Prof Canals. “It will be a slow process, but Spain will survive.”
Recently I published two articles pointing to suggestive similarities between the recurring deep events in recent American history – those events which, because of their intelligence aspects, are ignored, misrepresented, or covered up in the American media. The first article pointed to overall similarities in many deep events since World War II. The second pointed to surprising points of comparison in the two deep events which were followed shortly by major U.S. wars: the John F. Kennedy assassination and 9/11. In the background of all these events, I suggested, was recurring evidence of the milieu “combining intelligence officials with elements from the drug-trafficking underworld.”
In this essay I shall first attempt to lay out the complex geography or network of that milieu, which I call the global drug connection, and its connections to what has been called an “alternative” or “shadow” CIA. I shall then show how this network, of banks, financial agents of influence, and the alternative CIA, contributed to the infrastructure of the Kennedy assassination and a series of other, superficially unrelated, major deep events.
In this narrative, the names of individuals, their institutions, and their connections are relatively unimportant. What matters is to see that such a milieu existed; that it was on-going, well-connected, and protected; and that, with increasing independence from governmental restraint, it played a role in major deep events in the last half century.
This of course strengthens the important hypothesis to be investigated, that this on-going milieu may also have contributed to the disaster of 9/11.
Paul Helliwell, OPC, and the CIA
In areas where Communist forces have appeared strong, the United States, at least since 1945, has resorted repeatedly to supportive counterviolence from mobsters involved in the drug traffic. At first, as in post-war Italy, these arrangements were temporary and ad hoc, as when Vito Genovese, a New York mafia leader, was installed as interpreter in the Allied Military Government office of Col. Charles Poletti, a former New York Tammany politician. Then in 1947 William Donovan, now a corporate lawyer and no longer the head of the Office of Strategic Services (OSS), reportedly financed a May Day massacre of leftists in Sicily, organized by the recently deported Detroit mafia figure Frank Coppola.
Such arrangements became more centralized in 1948, after the newly created National Security Council created an Office of Policy Coordination (OPC) to carry out “subversion against hostile states” – i.e., conduct law-breaking as national policy. Thanks to OPC, the U.S. began giving significant covert support to organized drug-traffickers around the world, in the Far East, Europe, and eventually the Middle East and Latin America.
These world-wide activities became more and more inter-related. Since at least 1950 there has been a global CIA-drug connection operating more or less continuously. Especially with the passage of time, this connection has contributed to unexplained deep events and the consolidation of the global dominance mentality, at home as well as abroad. More specifically, the global drug connection is a factor underlying such unexplained deep events as the JFK assassination, the second Tonkin Gulf incident of 1964, and Iran-Contra.
The global drug connection is not just a lateral connection between CIA field operatives and their drug-trafficking contacts. It is more significantly a global financial complex of hot money uniting prominent business, financial and government as well as underworld figures. It maintains its own political influence by the systematic supply of illicit finances, favors and even sex to politicians around the world, including leaders of both parties in the United States. The result is a system that might be called indirect empire, one that, in its search for foreign markets and resources, is satisfied to subvert existing governance without imposing a progressive alternative.
One significant organizer of the post-war global drug connection — between CIA, organized crime, and their mutual interest in drug-trafficking — was former OSS officer Paul L.E. Helliwell. Helliwell, who was head of the Special Intelligence branch of OSS in Kunming, and later an officer of OPC and the CIA, was simultaneously the owner of the Bank of Perrine in Key West, Florida, “a two-time laundromat for the Lansky mob and the CIA,” and its sister Bank of Cutler Ridge. Here we shall see a number of interrelated mob-CIA money-laundering banks in the global drug connection, of which the greatest was undoubtedly the Bank of Credit and Commerce International (BCCI).
Most people have never heard of Paul Helliwell. Mainstream books about CIA wrongdoings, like Tim Weiner’s Legacy of Ashes, make no mention of him, of his important CIA-related bank, Castle Bank in the Bahamas, or for that matter of an even more important successor bank to Castle, BCCI. In the flood of CIA documents released since 1992, one does not find the name of Helliwell in the archival indices of the National Archive, the National Security Archive, or the Federation of American Scientists. In the million declassified pages stored and indexed on the website of the Mary Ferrell Foundation, Helliwell’s name appears exactly once – and that is on a list of documents that were withheld from review during the CIA’s search in 1974 for records concerning, of all things, Watergate! This silence, even in internal CIA files, about the principal architect of the post-war CIA-drug connection, is eloquent.
Most of what we know about Helliwell derives from the press reaction to the successful CIA effort to block an IRS investigation in the 1970s, known as Operation Tradewinds, of his money-laundering banks. This struggle with Helliwell and the CIA began in 1972, when IRS investigator Richard Jaffe, tracing the funds of arrested marijuana and LSD dealer Allan George Palmer, learned that Palmer “had personally brought some of his money south to the Perrine-Cutler Ridge Bank for deposit.”
Jaffe learned also that the funds had been deposited in the account of a Bahamian entity called Castle Bank. According to Jim Drinkhall in the Wall Street Journal, this bank was “set up and principally controlled” by Helliwell, who “was instrumental in helping to direct a network of CIA undercover operations and ‘proprietaries.’” Drinkhall wrote that the CIA shut down Jaffe’s investigation of the Castle Bank because Castle was the conduit for millions of dollars earmarked by the CIA for the funding of clandestine operations against Cuba and for other covert intelligence operations directed at countries in Latin America and the Far East.
Drinkhall further noted what Helliwell is probably most famous for (and what I have written about in The War Conspiracy):
In 1951, Mr. Helliwell helped set up and run Sea Supply Corp., a concern controlled by the CIA as a front. For almost 10 years, Sea Supply was used to supply huge amounts of weapons and equipment to 10,000 Nationalist Chinese [KMT] troops in Burma as well as to Thailand’s police.
But Drinkhall did not point out what is now not disputed, that both the KMT troops in Burma and the Thai Police were the two main arms of the CIA-KMT-Burma-Thai drug connection, and were involved together in the growth and trafficking of opium for the world market, including the United States.
Helliwell’s favors for the CIA were not restricted to the Far East. Along with two old associates from the KMT-Burma drug connection, Frank Wisner of the CIA and General Claire Chennault of the CIA’s airline CAT, Helliwell “also worked CIA operations in Central America as early as 1953-54. In those days, the target was Guatemala and its government.”
Like Chennault and his old associates from his days in China, Whiting Willauer and William Pawley, Helliwell then assisted the CIA in operations against Guatemala in 1954, and after 1960 against Castro. According to Drinkhall,
One former federal official who helped scrutinize Castle says, “Castle was one of the CIA’s finance channels for operations against Cuba.” Mr. Helliwell reputedly was one of the paymasters for the ill-fated Bay of Pigs invasion in 1961, as well as for other “extensive” CIA operations throughout Latin America.
As for ex-convict Wallace Groves’ connection to the CIA, a number of CIA documents have since been released that confirm this relationship. According to one of them,
The Wallace GROVES, mentioned in the attachments as being connected with Meyer LANSKY and the Mary Carter Paint Co./Resorts International, Inc., is identical with the Wallace GROVES who is the subject of OS file #473 865. This file reflects that from April 1966 to April 1972, GROVES was of interest to the [CIA] Office of General Counsel for the utilization of GROVES as an advisor or possible officer of one of the Project ████ entities. Additional information in this file would suggest that GROVES was connected with Meyer LANSKY.
I suspect that these “Project ████ entities” involved the use of off-the-books funds not included in the authorized CIA budget.
Helliwell’s Connection to Off-the-Books Operations
Since the publication of Drinkhall’s article, almost every reference to Helliwell has described him as a paymaster for the Bay of Pigs, a claim which I am about to question. But a sense of the scale of Helliwell’s financial involvement with the CIA can be gathered from the CIA’s sequestering of almost $5 million from another Helliwell-related entity, Intercontinental Diversified (I.D.C.). Drinkhall again:
Although there is no reference to the CIA in the SEC proceeding concerning Intercontinental, a former CIA official in a recent interview made an astonishing statement. He said that between 1970 and 1976, almost $5 million of Intercontinental funds was siphoned out for the agency’s use “because we had friends there.” Indeed the CIA apparently had a better arrangement than mere friendship. CIA documents show that Wallace Groves, the founder of Intercontinental and holder of 46% of its shares until he sold his interest for $33.1 million in 1978, was secretly working for the CIA from 1965 to 1972.
Assuredly bankers do not transfer millions of dollars out of friendship. A more credible speculation is that Helliwell was the paymaster, not for officially authorized operations such as the Bay of Pigs, but for dispensing some of the funds from off-the-books operations such as the KMT drug traffic out of Burma supported by his own creations, the CIA proprietaries Sea Supply and Cat Inc. (later Air America).
Jonathan Marshall once wrote categorically that “Helliwell laundered CIA funds through the Bahamas-based Castle Bank.” But this claim may require clarification. I.D.C. was a spinoff from an Asian company, Benguet Mining, that was represented by Helliwell’s firm and partly owned by the Philippine dictator Ferdinand Marcos. Thus payments from Asia reached I.D.C., and it is my speculation that it was these off-the-books funds, rather than funds from the congressionally authorized CIA budget, that were used by Helliwell to finance off-the-books operations.
One of these may have been political payoffs, starting in the Bahamas itself.
In the early 1970s, IRS agents reported evidence, gleaned from taped conversations, that Intercontinental, operating through Castle Bank, had paid Bahamas Prime Minister Lyndon O. Pindling $100,000 to grant the holding company a two-year extension of its [Grand Bahama] casino gambling license.
But the CIA as well as the casino had a penchant for corruption, and Castle was only one part of a network of banks and agents corrupting governments worldwide.
Thus Castle also did mysterious transactions with a Cayman Islands firm, ID Corp. ID’s sole owner, the American Shig Katayama, became know as one of the key facilitators of Lockheed Corp.’s huge payoffs to Japanese politicians in return for airplane contracts. Of Katayama one Japanese journalist charged, “his real job (in the early 1950s) was to handle narcotics for the U.S. intelligence work.”
By the 1960s if not earlier, the CIA was using its global connection to distribute non-governmental funds through agents of influence like Adnan Khashoggi and Yoshio Kodama, in the form, for example, of payoffs added into international Lockheed sales contracts. In May 1965, five months before the anti-Sukarno coup of September 1965, Lockheed payoffs in Indonesia were redirected from a supporter of President Sukarno to a new middleman who was backing the anti-Sukarno General Suharto.
This was at a time when “Congress had agreed to treat U.S. funding of the Indonesian military (unlike aid to any other country) as a covert matter, restricting congressional review of the president’s determinations on Indonesian aid to two Senate committees, and the House Speaker, who were concurrently involved in oversight of the CIA.” Thus, Lockheed payments passed through middlemen were used to frustrate the expressed will of the U.S. Senate, which passed a resolution to cut off military aid to Indonesia altogether.
Helliwell’s Connections to the Mob
But if Helliwell’s CIA connections were big-time, his connections to the mob, and particularly Meyer Lansky, were no less so. The Bank of Perrine was the preferred depository of Lansky funds reaching America from the Bank of World Commerce in the Bahamas, established by Lansky’s point man John Pullman in 1961. One of the bank’s directors was Alvin Malnik, Lansky’s heir in Miami Beach, and a stockholder was Ed Levinson, a business partner of Lyndon Johnson’s Senate aide Bobby Baker, whose title, before he was arrested and convicted for tax evasion, was the Secretary of the Democratic Majority in the U.S. Senate. Helliwell had a second Lansky connection as legal counsel for the small Miami National Bank, used by Meyer Lansky to launder his foreign profits and skim from the Las Vegas casinos.
Though usually described as a mob bank controlled by Lansky, the Bank of World Commerce opened on to an international scene in which the CIA had an interest. Funds reached it from the International Credit Bank in Switzerland, which had been founded by the Israeli gunrunner Tibor Rosenbaum, and acted as banker to joint business ventures of European Jews and the state of Israel. But it also financed the acquisition and movement of weapons to Israel and its allies, particularly in Africa and central America, and reputedly acted as paymaster for Mossad, the Israeli secret service, in Europe.
According to Alan Block, Pullman’s bank had another subsidiary in the Bahamas, “united in some shadowy way with Intra Bank in Beirut, Lebanon.” Intra owned the Casino de Liban, “whose gambling concession was controlled by Marcel Paul Francisi, France’s top heroin dealer. Some investigators were convinced that Lansky and Francisi were partners in heroin racketeering, and that Lansky and his associates had a piece of the casino as well.” Francisi in turn teamed with a local Lebanese exporter of morphine base, Sami El Khoury, who in turn had “a long-term business relationship” with Lucky Luciano in Sicily, Lansky’s pre-war ally in New York City and now a major European trafficker.
Sami El Khoury had protection from the Lebanese police, and possibly the CIA as well. Alfred McCoy saw official correspondence of the Federal Bureau of Narcotics (FBN) discussing, in August 1963, “whether to use Sami El Khoury as an informant now that he had been released from prison.” One of the two FBN correspondents, Dennis Dayle, later told James Mills that El Khoury, “among the top international traffickers of all time,” did become an informant. And in the 1990s Dennis Dayle, having retired as a top DEA investigator in the Middle East, told an anti-drug conference that “in my 30-year history in the Drug Enforcement Administration and related agencies, the major targets of my investigations almost invariably turned out to be working for the CIA.”
The Castle Bank was yet another “dual purpose laundromat” serving both the CIA and the mob. The mob’s interest in Castle was seriously understated in Jim Drinkhall’s Wall Street Journal article, which mentioned only that among a lengthy list of account holders at Castle were “three men – Morris Dalitz, Morris Kleinman, and Samuel A. Tucker – who have been described in Justice Department documents as organized crime figures.” (Kleinman and Helliwell had numerous real estate investments in common with Burton Kanter, the Chicago lawyer who with Helliwell organized Castle Bank.)
Alan Block suggests that in fact Castle became an active bank when it was necessary rapidly to transfer funds from Mercantile Bank and Trust in the Bahamas, another Helliwell bank that, “like Castle…was a conduit for CIA money,” and was about to go under. The funds were moved “at the vigorous urging” of Kanter, because among the accounts in peril was one held by Morris Kleinman, a notorious organized crime figure since the days of Prohibition. On this matter, Castle’s president, Sam Pierson…stated it had to be done or “Kanter will end up face down in the Chicago River.”
Kanter seems to have specialized in handling the tax aspects of legitimating mob wealth. In addition to founding Castle Bank with Helliwell, he was “energetically at work in California” on the La Costa real estate development, which also involved former Cleveland syndicate member Moe Dalitz, “a part owner of several gambling casinos, including the Desert Inn and the Stardust Hotel.” Block links Kanter to La Costa’s ability to receive major funding from the corrupt Teamsters Central States Pension Fund: “Kanter’s access to the Pension Fund likely came from Allen Dorfman, a friend and business associate. Murdered in 1985 to prevent him from talking about mob investments, Dorfman was an important Fund official and racketeer.”
The CIA, the Mob, and Off-the-Books Operations
Helliwell was not the only CIA connection to the mafia, nor the most highly placed. Plots to assassinate Castro in 1960 were initiated from the CIA’s Office of Security through a go-between, Robert Maheu, whose independent business had been launched with the help of an Office of Security retainer. It was Maheu who transmitted the CIA assassination proposal to John Roselli.
A more on-going relationship to the mob was maintained by the CIA’s Counterintelligence (CI) Staff Chief, James Angleton. He too used a go-between–the New York lawyer Mario Brod–who, according to a CIA memo, was a CI Staff agent in New York City from 1952 to 1971. One of the sensitive CI Staff agents handled by Brod in New York was Jay Lovestone, the AFL-CIO International Affairs Chief who transmitted funds to strong-arm gangs in Marseille allied with Corsican drug traffickers who were part of the Lansky-Luciano global drug connection.
According to Doug Valentine, Lovestone’s assistant Irving Brown was implicated in drug smuggling activities in Europe, at the same time that he used CIA money to establish a “compatible left” labor union in Marseilles with Pierre Ferri-Pisani. On behalf of Brown and the CIA, Ferri-Pisani (a drug smuggler connected with Marseilles crime lord Antoine Guerini), hired goons to shellack striking Communist dock workers.
Lovestone, a former Communist turned militant anti-Communist, together with his mentor David Dubinsky of the International Ladies’ Garment Workers’ Union, had also fought the creation of the more militant CIO union movement in the 1930s, and the United Auto Workers of Walter and Victor Reuther in particular. The rival UAW-AFL, which Lovestone favored, turned to mobsters for muscle, and hired as its New York regional director John Dioguardi, a member of the Lucchese mafia family. Dioguardi was later blamed by U.S. Attorney Paul Williams for the blinding of labor journalist Victor Riesel and the subsequent murder of the man who threw acid in Riesel’s face.
Another sensitive agent handled by CI Staff agent Brod, Angleton’s go-between with the mob, was the Russian defector Anatoliy Golitsyn, whom Angleton segregated from the regular CIA bureaucracy in his unending search for a high-level mole inside the CIA. Angleton (according to his biographer Tom Mangold) was “quietly building an alternative CIA,” with its own communication system, archive, and vault, using very dubious information from Lovestone and Golitsyn. The heart of this alternative CIA was CI’s “inner sanctum: the super-secret Special Investigation Group” (CI/SIG), where were assembled files to show that Henry Kissinger and Averell Harriman were possible KGB moles.
A third sensitive agent handled by Brod was Herbert Itkin, a controversial double agent working with the mob on the one hand, and CIA and FBI on the other. But like Itkin, Brod himself “had contacts with the Mafia.” A CIA flap occurred in 1970 when Itkin was being used by the Justice Department and FBI to prosecute a number of mob figures with one-time connections to Havana, such as James Plumeri, Ed Lanzieri, and Sam Mannarino, for illegal kickback arrangements with the Teamsters. The U.S. Attorney telephoned the CIA’s Legal Counsel to advise that Mario Brod had entered the courtroom in order to work with the defense.
According to Court records, “The defense sought to call Mario Brod, who was described as Itkin’s contact with the Central Intelligence Agency. It was stated that Brod would testify that he would not believe Itkin under oath and that Itkin’s reputation for truthfulness was bad.” The CIA’s Legal Counsel concurred with the U.S. Attorney’s steps to block Brod from testifying. His office noted Brod’s explanation of his behavior for the record: “One of the defendants by the name of Lenzieri [(sic), i.e., Edward the Buff Lanzieri] was Brod’s only contact inside the Mafia who would alert Brod if he was in personal danger.”
But Brod may have been acting out of more than self-interest, for it has been suggested that some of the mafia defendants in the kickback trials also had a deeper CIA connection, even if off the books. According to Dan Moldea, two of the defendants, John La Rocca and Gabriel Mannarino, had been involved in Cuban gunrunning operations with Hoffa; and he suggests that Hoffa persuaded La Rocca and Mannarino, along with two other kickback defendants (Salvatore Granello and James “Jimmy Doyle” Plumeri), “to cooperate with the agency.” Moreover, all of the defendants in the kickback trials where Itkin testified, and Brod tried to intervene for the defense, were members of so-called “paper locals” in the Teamsters (and earlier the UAW-AFL), controlled by Plumeri’s nephew, John Dioguardi.
In June 1975, six months after the leak about Angleton and Operation CHAOS that led to Angleton’s ouster, Time magazine alleged that the CIA had used Brod’s mafia contacts, Plumeri and Granello, “to do some spying in Cuba in preparation for the 1961 Bay of Pigs invasion.” (I have found no corroboration for Time’s claim in released CIA documents.)
Like Brod, Angleton himself allegedly had mafia contacts, and on at least one occasion intervened to prevent another part of the CIA from investigating the banking of illegal Lansky skim from Las Vegas. A senior official in Robert Kennedy’s Justice Department asked John Whitten, the CIA’s one time chief of the Mexico/Panama desk in Western Hemisphere Division, to investigate numbered bank accounts in Panama because Las Vegas gamblers were using them to smuggle cash, “which they skimmed off the top of their daily take.” Using his CIA pseudonym “John Scelso,” Whitten testified to the Church Committee about Angleton’s actions.
At that time we were in an excellent position to do this…. I thought it was a great idea. And promptly this came to Mr. Angleton’s attention, and we had to brief him on it, and he said, well, we’re not going to have anything to do with this. This is the Bureau’s [FBI’s] business. And whammo, end of conversation. We were called off. I went to Colonel J.C. King, who was at that time the Chief of the WH Division, and told him this, and J.C. King said….well, you know, Angleton has these ties to the Mafia, and he is not going to do anything to jeopardize them. And then I said, I didn’t know that. And he said, yeah, it had to do with Cuba.
Angleton’s defense of Lansky’s skim cannot be separated from his second function in the CIA, as handler of the Israel desk. Angleton’s connections with Mossad dated back to World War II, when he had coordinated OSS operations in Italy with the Jewish underground headed locally by Teddy Kollek (later Israel’s Mayor of Jerusalem).
Angleton’s “Alternative CIA” and Its Legacy
Moreover CI/SIG, the “inner sanctum” of Angleton’s “alternative CIA,” affected U.S. history significantly in 1963. Its so-called 201 or “personality” file on “Lee Henry Oswald” (the man known to the world as Lee Harvey Oswald), had been filled with false and falsified information since it was opened in December 1960. And two messages in the 201 file were falsified again in October 1963, in such a way as to allow Oswald to be a credible “designated suspect” in the assassination of John F. Kennedy one month later.
The falsification of Oswald’s 201 file may have originated as a legitimate counterintelligence operation. I have argued that the uniquely falsified messages were part of a so-called “marked card” or “barium meal” test to determine if and where leaks of sensitive information were occurring. This was a familiar technique, and was the responsibility of the CI/SIG, which was responsible for the 201 file.
But by October 1963 we see signs that CIA cables on Oswald were also being manipulated, in order to enable him to become a designated suspect in the November 22 assassination of President Kennedy. A CIA teletype to the FBI in October 1963 (drafted by a CI/SIG officer) withheld the obviously significant information that Oswald had reportedly met in Mexico City with a Soviet Vice-Consul, Valeriy Kostikov, believed by CIA officers to be an officer of the KGB. This withholding helped ensure that Oswald would not be subjected to surveillance by the FBI after the alleged encounter, surveillance which presumably could have limited his ability to become a designated suspect by his presence at a particularly sensitive corner in Kennedy’s Dallas parade route. I have argued that similar CIA withholding from the FBI of information about two alleged 9/11 hijackers, Nawaz al-Hamzi and Khalid al-Mihdar, likewise made it possible for them to play the role of designated suspects by preventing FBI surveillance, as well.
CIA Director William Colby forced Angleton to resign from the CIA in the post-Watergate climate of December 1974, following public revelations about Angleton’s involvement in the CIA’s possibly illegal Operation CHAOS (the surveillance of Americans in the United States). This spelled the end of Angleton’s “alternative CIA” in the Counterintelligence Staff. For about another year leaks like the one we saw about CIA links to Brod’s mobsters continued to expose (and in this way help terminate) the morass of CIA links to Cuban exile terrorists and other members of the global drug connection.
But in 1976 the climate changed dramatically, after Donald Rumsfeld and Dick Cheney in the so-called “Halloween massacre” (managed from President Ford’s White House) replaced CIA Director Colby with George H.W. Bush, and sent Rumsfeld from the White House to be Secretary of Defense. If 1975 was the post-Watergate year of dramatic disclosures about CIA involvement with Cuban exiles and mobsters in assassination efforts, 1976 was the year in which mob-connected Cuban exiles and the Chilean intelligence agency DINA, both involved in drug trafficking, indulged in a wave of terrorist killings. These included the blowing up of a civilian Air Cubana airliner and the assassination in Washington of former Chilean foreign minister Orlando Letelier.
However, the CIA was now no longer the sole or perhaps even the chief point of U.S. contact with the DINA-sponsored international Operation CONDOR, which carried out multiple killings. U.S. Ambassador to Paraguay Robert White, a career State Department official whose antipathy to these murders cost him his job after Reagan was elected, heard from the Paraguayan Armed Forces Commander that “intelligence chiefs from Brazil, Argentina, Chile, Bolivia, Paraguay, and Uruguay used ’an encrypted system within the U.S. [military] telecommunications net[work],’ which covered all of Latin America, to ‘coordinate intelligence information.’”
Henry Kissinger, who in 1976 was in his last year as Secretary of State, played at best an equivocal role vis-à-vis this wave of right-wing violence. Before lecturing Chile publicly in Santiago for its human rights violations (“The condition of human rights…has impaired our relationship with Chile and will continue to do so.”), Kissinger privately assured Pinochet that he was compelled by U.S. politics to say this, and that in fact his main concern was the move in the U.S. Congress to cut off aid to Chile.
U.S. protection and even support for the terrorists of 1976 has continued to the present day. Luis Posada Carriles, the principal architect of the Air Cubana bombing, “served prison time in Venezuela for the Cubana bombing;” and “later, in the 1980s, he worked again on behalf of the CIA in Central America, helping to coordinate the Contra supply network.” Posada was arrested and convicted again in Panama in 2000 for an assassination attempt on Fidel Castro, this time with Guillermo Novo, one of Letelier’s murderers. Both men were promptly pardoned by Panama’s outgoing president. In May 2008, Posada was honored by 500 fellow Cuban Americans at a sold-out gala in Miami, after charges against him for illegal entry into the United States were thrown out by a federal judge in Texas.
CIA Director Bush also promoted Theodore Shackley, who for years had handled the CIA’s maverick Cuban exiles in Miami. According to Kevin Phillips,
In late 1976, Bush had also protected wayward or hot-triggered Agency operatives – veterans of everything from Chilean assassinations to Vietnam’s Phoenix Program and improper domestic surveillance – from indictment by President Ford’s Justice Department.
But the spirit of post-Watergate restraint returned to the CIA under President Carter and his CIA Director, Admiral Stansfield Turner. Thanks largely to a series of leaks about his friend, Edwin Wilson, Shackley’s standing in the CIA diminished until he left in 1978.
However, it is the argument of William Corson and Joseph Trento that the spirit of an alternative and more activist CIA survived under Shackley in exile. Trento writes that Shackley was supported by the Shah of Iran’s Safari Club (see below), and by Richard Helms, U.S. Ambassador to Iran. The regular CIA Station Chief in Iran “repeatedly complained that Helms seemed to be running his own intelligence operations out of the embassy,” and that CIA veterans who had worked under CIA officer Theodore Shackley, “formed the cadre of a private, shadow spy organization within America’s official intelligence service.”
Helliwell, Castle, and the Overworld
We have not yet dealt with the overworld connections of Castle Bank. The most affluent depositors there “were members of the fabulously rich Pritzker family from Chicago, clients of the Kanter firm.” Block observes that the Pritzkers, whose vast holdings include the Hyatt hotel chain, also obtained a loan from the Teamsters Pension Fund for a hotel-casino investment in Nevada, and that “Jimmy Hoffa and Allen Dorfman worked personally on Pritzker loans.”
Kanter and Castle Bank also planned developments with other members of the overworld, such as Henry Ford II and his wife, Christina. Mercantile, the predecessor bank to Castle, represented investments from two shipping magnates: the billionaire Daniel K. Ludwig, and the extremely wealthy Norwegian shipbuilder Inge Gordon Mosvold, who was perhaps fronting for Ludwig.
Mercantile and Castle interlocked closely with another Helliwell Bahamas bank, eventually called Underwriters Bank, Limited. Here the majority holder with 95 percent was the American insurance conglomerate American International Underwriters Corp. [AIUC], which began as part of the insurance empire headed by former OSS agent C.V. Starr, and is today part of the giant multinational AIG. Block correctly reports that AIUC “was an insurance conglomerate with suspected ties to the C.I.A. in Southeast Asia.”
I have written elsewhere how the C.V. Starr group was represented in Washington by Thomas (“Tommy the Cork”) Corcoran, and headed after World War II by Corcoran’s former law partner, William S. Youngman. It thus interlocked with the so-called Chennault circle (or Chennault’s “Washington squadron”), the powerful cabal put together with Roosevelt’s blessing in 1940 to enable the equipment, staffing, and financial support of General Claire Chennault’s Flying Tigers in China.
Corcoran had been a key figure in Washington since the 1930s, when he headed “FDR’s informal intelligence service and international spy operations long before there was an OSS.” By the 1950s, when he was said by Fortune to maintain “the finest intelligence service in Washington,” his lobbying activities had become intimately involved with influencing CIA covert operations:
Most of [his clients] are companies with international interests and he has a choice clientele in this field. It includes United Fruit Co., American International Underwriters Corp. (part of the C. V. Starr interests in Asia and elsewhere) and General Claire Chennault’s Civil Air Transport, Inc. In late 1951 Corcoran, for one example, was working his intelligence service overtime keeping up with American policy on Iran—what the State Department did in this affair would be a guide to what it might or might not do to keep his client, United Fruit, from being thrown out of Guatemala.
Helliwell and Corcoran played a crucial role together in the prolongation of Chennault’s Asian influence, when the two men persuaded Frank Wisner of OPC to purchase and refinance Chennault’s post-war airline CAT (later the CIA proprietary Air America). Also figuring in this important decision was William Pawley, a key figure in Chennault’s so-called “Washington squadron” during World War II. Together with Sea Supply Inc., Helliwell’s other creation, CAT became the chief logistic infrastructure for the KMT drug-trafficking troops in Burma.
Helliwell and the Politics of Influence
Helliwell and Corcoran’s law firm, Corcoran and Rowe, also cooperated with William Donovan in using Thai money to influence Congress. Helliwell himself was a key organizer for the Republican Party in Florida, helping to win the state for Eisenhower in 1952 and thus launching the Republican ascendancy in the South. (Helliwell later became close to Nixon’s companion, Bebe Rebozo.)
Corcoran and Rowe, meanwhile, were Democrats, the latter close to the upcoming Texas senator Lyndon Baines Johnson. Corcoran in the 1940s had managed the accounts and political business of Chiang Kai-shek’s brother-in-law, T.V. Soong, who by diverting millions in Chinese gold to his California accounts had become one of the richest men in the world.
Together with Soong, Corcoran lobbied successfully for a lend-lease program to Nationalist (KMT) China, and to a private American Volunteer Group recruiting pilots from the armed forces for a private company headed by Corcoran’s friend, William Pawley. In fact, the pilots were being recruited to fight in China as part of Chennault’s irregular Air Force, for Chiang Kai-shek and the KMT:
In effect, Corcoran was running an off-the-books private war in which a private company, China Defense Supplies, was diverting some of the war materiel destined for China to a private army, the American Volunteer Group.
After the war, Soong, Corcoran, and Pawley became strong backers of the pro-KMT China Lobby. The State Department officers unfortunate enough to be entered in T.V. Soong’s “black book” became targets of the purges conducted by J. Edgar Hoover and later Joseph McCarthy.
The Soong-backed China Lobby’s fortunes declined dramatically with those of McCarthy in 1954. At this point Corcoran and Donovan, who had previously collaborated on Chennault’s preemptive purchase via CAT of China’s commercial air fleet in 1949, collaborated again to maintain the flow of funds from Asia to influence Congress. The new source was the Thai dictator, Phao Sriyanon, a major beneficiary of the KMT drug network established by Helliwell, Sea Supply, and CAT. (At the time of his death as an exile in Switzerland, Phao was said to be “one of the richest men in the world.”)
After scandals and exposés had forced the revamping of the China Lobby in Washington,
the private arm of the Thai Lobby had mustered its own resources…. Through Donovan, [OSS veteran Willis] Bird [Sea Supply’s purchasing agent in Bangkok], or his other CIA connections, Phao had, by that time, hired lawyer Paul Helliwell…as a lobbyist in addition to Donovan. Donovan [who received a reported $100,000 from the Thai government] and Helliwell divided the Congress between them, with Donovan assuming responsibility for the Republicans and Helliwell taking the Democrats.
How did Helliwell, an influential Republican lawyer working full-time in Miami, “take” the Democrats? By acting in his role as Thai Consul in Miami: his annual reports as a foreign lobbyist reveal that he passed tens of thousands of dollars a year to James Rowe, of Corcoran and Rowe.
Helliwell, Resorts International, and the Politics of Corruption
Helliwell and his banks also handled real investments for the Lansky crowd:
Among the Florida real estate companies that benefited from Helliwell’s sleight of hand was General Development Corporation, controlled by Louis Chesler, a Florida real estate developer and associate of Lansky, and “trigger Mike” Coppola, a Lansky crony. Chesler was the partner of Wallace Groves….Chesler and Groves were partners in a gambling venture with Resorts International, through a Grand Bahamian company whose counsel was the law firm of Helliwell, Melrose, and DeWolf.
Resorts International, formerly the Mary Carter Paint Company controlled by James Crosby, was the majority owner of a Bahamas resort, Paradise Island, which was unable to obtain a license until Wallace Groves was brought in as a partner in 1966. The well-known reaction of a U.S. Justice Department official to this change of ownership was, “The atmosphere seems right for a Lansky skim.” Years later, “lawyers for New Jersey’s Gaming Enforcement Division would oppose the granting of a gambling license to Crosby and his company [Resorts International], citing ‘links with disreputable persons and organizations,’ and specifically their record on Paradise Island.”
Like Helliwell and Groves, so Resorts International was part of the global CIA-mob connection. According to a 1976 CIA memorandum included in its Meyer Lansky Security file, Resorts International, Inc., is the Subject of OS [Office of Security] file #591 722. This file reflects that Resorts International, Inc. was of interest to Cover and Commercial Staff, DDO [Operations Directorate], in 1972 and 1973.
As the same CIA memo makes clear, this was after a 1969 book, The Grim Reapers by Ed Reid, had exposed the company’s connections to Wallace Groves and, through its casino manager Eddie Cellini, to what the CIA memo called “the gambling activities of the organized crime boss Meyer LANSKY.” Resorts International, in other words, occupied a “cut-out” intermediary role between the CIA and Eddie Cellini, just as (we shall see in a moment) a similar cut-out role was performed in 1960 by the CIA’s Bay of Pigs leader, Tony Varona.
1972, the year in which Resorts became “of interest” to the CIA, was also the year in which Meyer Lansky was indicted in Miami, along with Dino Cellini (Eddie’s brother). One of the charges in the indictment was that “in 1968 Lansky maintained at least some control over running junkets (a profitable part of a casino operation) to the Paradise Island Casino.” I shall argue later that both Resorts and the Lansky indictment may have been “of interest” to the CIA in these two years because of the showdown at that time between Nixon and the CIA in the wake of the Watergate break-in.
The CIA may have been aware of the allegations, which surfaced in 1972, that funds from the Paradise Island casino were being secretly carried to Nixon and his friend Bebe Rebozo, by a casino employee. This was Seymour (Sy) Alter, an associate on the one hand of Lansky and his man Eddie Cellini, and on the other hand “a friend of Nixon and Rebozo since 1962.” The funds came from the Paradise Island Bridge Company, a company partly owned by an officer of Benguet International, a firm represented by Paul Helliwell. It is likely that Nixon himself had a hidden interest in the Bridge Company, which might explain the revelation through Operation Tradewinds that a “Richard M. Nixon” (not otherwise identified) had an account at Helliwell’s Castle Bank.
The CIA, Eddie Cellini, Edward K. Moss, and the CIA-Mafia Plots
But there was more to the CIA-Resorts connection. Back in 1967 Resorts casino (at that time, Paradise Island) had hired as its casino manager Eddie Cellini, who had formerly managed Lansky’s casino in Havana’s Hotel Internacional. 1967 was the year that the CIA’s Inspector-General, in his Report on CIA Plots to Assassinate Fidel Castro, had written that Eddie Cellini and his more famous brother Dino
were believed to be in touch with [Tony] Varona [member of the CIA’s front group for the Bay of Pigs Operation]… and were reported to have offered Varona large sums of money for his operations against Castro, with the understanding that they would receive privileged treatment ‘in the Cuba of the future.’
The Inspector-General’s Report was written to deal with the political flap raised by Jack Anderson’s spectacular charge in 1967 that John F. Kennedy might have possibly been killed as the result of an assassination plot against Castro “which then possibly backfired” against Kennedy himself. Jack Anderson’s ultimate source for the story was John Roselli, a mob member disgruntled that his cooperation with the CIA on the assassination plots had not protected him from conviction and possible deportation.
Researcher Alan A. Block notes that it was strangely imprudent of Paradise Island to have hired Eddie Cellini in 1967, when it had just weathered an organized crime scandal of its own. But the CIA was facing the even bigger organized crime scandal raised by Jack Anderson’s column, and the I-G Report had just told CIA Director Helms that Cellini was possibly a go-between in the assassination plots between the two plot principals Varona and Santos Trafficante. One possibility is that Resorts hired Cellini to ensure that he would not join Roselli in going public.
There is an important FBI report reproduced without demurrer in a CIA document contained in its Lansky Security file, which is almost devoid of references to Lansky but could very well be called a file on the CIA-mafia plots. According to this FBI report, the contact between Varona and the Cellini brothers, representing the mob, was through a Washington public relations agent named Edward K. Moss:
Verona [sic] has taken on Edward K. Moss as his assistant for raising funds to finance operations against Castro….Julia Cellini is alleged to be Moss’ mistress and operates a secretarial service [that] is really a front for Edward K. Moss’ activities….Julia Cellini’s brother, Dino Cellini and his brother (first name unknown), are active fronts for two of the largest casinos that operated in Cuba until the Batista regime….It is alleged that the Cellini brothers are in close contact with Tony Verona [sic] through Edward K. Moss and have offered to contribute considerable sums of money (reported as high as two million dollars) through Edward K. Moss to Tony Verona to finance operations against the Castro regime with an understanding that they would have the major slice “in the Cuba of the future.”
According to the same CIA memo, Moss was a past president of the Public Relations Society of America. At the same time, according to a verbal report from Dun and Bradstreet to then-CIA agent Edwin P. Wilson, “Moss’ operation seems to be government contracts for the underworld and possibly surfaces Mafia money in legitimate business activities.”
All this supplies some context to the decision of the CIA Office of Security, on November 7, 1962, to secure a Covert Security Approval (CSAS) for the use of Moss by the Political Action Group of the CIA’s Covert Action (CA) staff. This of course was more than a year after the FBI had advised the CIA that reportedly “the Cellini brothers are in contact with Varona through Moss and have offered to contribute as high as two million dollars to finance anti-Castro operations.” Furthermore, FBI information sent to the CIA indicated that Moss’s mistress Julia Cellini and her brother Dino Cellini were alleged to be procurers, while “the Cellini brothers have long been associated with the narcotics and white slavery rackets in Cuba.” The CIA itself had notified the FBI on December 16, 1960, that Julia “Cellino” had advised that her brothers “have long been associated in the narcotics and white slavery rackets in Cuba.”
Still further FBI information indicated that Dino Cellini “was formerly associated with Joseph Francis Nesline WFO [i.e., Washington] top hoodlum, in a gambling operation.” I have written elsewhere how Meyer Lansky and Joe Nesline “systematically used sexual blackmail [i.e., through white slavery] to compromise a number of people in Washington who were politically influential.”
The CIA remembered that Moss was a questionable character; a memo of November 28, 1962 referred to his “‘unscrupulous and unethical’ business practices.” According to the I-G Report and other memos, “A memorandum prepared by CA [Covert Action] staff in 1965 states that records do not show any use made of Moss;” but this carefully worded language would not of course rule out use made of Moss off the books. In fact, the Moss folder’s documents confirm the CIA’s interest in him, and many documents concern Julia, Eddie, Dino, and Goffredo Cellini.
The documents concerning Moss, the Cellinis, and Varona are very revealing. The FBI alerted the CIA to their relationship and the offer of two million dollars to Varona, “in view of the serious implications of [mob] infiltration of this CIA-supported activity [against Castro].” On January 23, 1961, the FBI communicated their concerns to the new Attorney General, Robert Kennedy, then in office for less than a week.
The response of the CIA was the opposite of what decorum might expect: instead of distancing itself from Moss and his associates, the CIA warmed to them. The CIA arranged for poison pills to be supplied via the mafia to Varona, who in February 1961 became the point man in the CIA-mafia plot to kill Castro. In 1962 Varona was selected again to participate, as ZRRIFLE-2, in William Harvey’s renewed assassination plots against Castro. And in the same year, as we have seen, the CIA took steps to use Moss himself.
More on the CIA, Moss, and the Politics of Corruption: Adnan Khashoggi
The indirect relationship of the CIA to Moss through a cut-out (Varona) appears to have survived into the 1970s. By this time the cut-out was Adnan Khashoggi, who for a while (like T.V. Soong and Phao Sriyanon before him) was known as “the richest man in the world.” Khashoggi was also listed in the Kerry-Brown BCCI Report as one of the “principal foreign agents of the U.S,” and at some point in the 1970s he engaged Edward K. Moss as his public relations agent.
Khashoggi replicated the politics of corrupt influence through money and sex which we have already encountered. His contributions to Nixon’s election campaigns – some legal, some illicit – were investigated by the Senate Watergate Committee. Khashoggi is said by some to have given $1 million to Nixon covertly in 1972, allegedly in a briefcase which he “mistakenly” left behind in Nixon’s San Clemente residence.
In addition, Khashoggi is known to have deposited several million dollars (some say $200 million) in the bank of Nixon’s friend, Bebe Rebozo. He then “withdrew all but $200,000 of it in the form of checks written to ‘cash’ and signed over to the Sands Hotel” in Las Vegas. It was as if Khashoggi was using the Sands as his personal laundromat. Known as “the biggest high roller ever to hit Las Vegas,” Khashoggi would lose as much as $250,000 in one fling.
The Sands was one of the Las Vegas casinos originally part-owned by Meyer Lansky, and from which proceeds were skimmed to be deposited (as we saw) in the Miami National Bank. In the 1970s the Sands was now owned by Howard Hughes; but two veterans of the Lansky era, Carl Cohen and Jack Entratter, continued to work in the casino. Khashoggi meanwhile involved in his business deals the manager of Hughes’ Vegas properties, F. William Gay; and eventually, when Hughes was spirited secretly out of Vegas to Wallace Groves’ resort in Freeport, Bahamas, it was in Khashoggi’s plane.
Even in the Hughes era, Las Vegas casinos continued to be preferred sites for the laundering of money (disguised as gambling losses). This practice was so well established that eventually, in Operation Casablanca, U.S. Customs actually created a fake casino near Las Vegas at which top-level Mexican bank officials congregated and “avidly discussed how to handle the latest half-billion dollars in drug proceeds already on hand.” In one important case, thousands of dollars in money wrappers from the Stardust casino (mentioned above) were found on a suspected drug-smuggling plane in Florida.
There are also reports that in addition to money, Khashoggi “used sex to win over U.S. executives.” The bill for the madam who supplied girls en masse to his yacht in the Mediterranean ran to hundreds of thousands of dollars.
The CIA’s interest in Khashoggi and Moss was not limited to the funds the two men had accessible. By the 1970s, Moss was Chairman of the elite Safari Club in Kenya, where he invited Khashoggi in as majority owner. And as former Saudi intelligence chief Prince Turki bin Faisal once revealed publicly, the intelligence chiefs of a group of countries (France, Egypt, Saudi Arabia, Morocco, and Iran under the Shah) met regularly at the Safari Club to conduct covert operations which the CIA was unable to carry out in the wake of the Watergate scandal.
CIA officers such as Miles Copeland and James Critchfield became part of Khashoggi’s milieu. They advised Khashoggi on diplomatic initiatives, such as a proposed Mideast Peace Fund that would reward both Israel and Palestine for recognizing each other. Khashoggi had the ability to negotiate with the Israelis; he is said to have been introduced to the Israelis by former gunrunner Hank Greenspun, the politically influential editor of the Las Vegas Sun.
In general, Khashoggi represented the post-war emigration offshore of immense wealth and the power it conveyed. He served as a “cut-out,” or representative, in a number of operations forbidden to those he represented. Lockheed, for one, was conspicuously absent from the list of military contractors who contributed illicitly to Nixon’s 1972 election campaign. But there was no law prohibiting their official representative, Khashoggi, from cycling $200 million through the bank of Nixon’s friend, Bebe Rebozo.
All this suggests that the CIA’s interest in Moss – as later in Khashoggi, in Wallace Groves, in Operation ███, and in Eddie Cellini’s employers at Resorts International – had to do with irregular funding for off-the-books covert operations. And if any such funds were passed, the context suggests that the man fingered to handle them would have been Paul Helliwell, the man the Wall Street Journal reported was “‘deeply involved’ in financing a series of covert forays between 1964 and 1975 against Cuba.”
Helliwell, Castle Bank, Bruce Rappaport, and BCCI
Through this rapid survey of Helliwell’s banks we have seen that he was central to a connection between the worlds of intelligence, organized crime, global drug trafficking, political influence, and speculative investment, often in hotel-casinos, with overworld figures. But the connection was not one engineered by Helliwell himself; there were other powerful people in the background, some of whom would maintain the connection after Helliwell died in 1976 (just as Castle Bank was beginning to attract the attention of journals like Newsweek).
One of the most important may have been former OSS Chief William Donovan (about whom we shall have more to say). According to Pete Brewton,
One of the attorneys in the One Flew Over the Cuckoo’s Nest case made the statement that Kanter was introduced to Helliwell by General William J. “Wild Bill” Donovan, the famous leader of the OSS during World War II, and Helliwell’s OSS boss. Kanter denied that. “I personally never met Bill Donovan. I believe I may have spoken to him once by phone at Paul Helliwell’s request…”
Another OSS figure, more directly involved, was Helliwell’s partner in the Florida bank holding company (called HMT and later Florida Shares) that owned the Bank of Perrine and the Bank of Cutler Ridge. This was
E.P. Barry, who had been a U.S. military intelligence officer in the Office of Strategic Services (OSS) during World War II. By the end of the war, he was the head of U.S. Counterintelligence (X-2) in Vienna…. Barry … was a longtime associate of [CIA Director] William Casey, according to a Castle Bank officer.
Barry was simultaneously a key shareholder in Florida Shares and in the Inter Maritime Bank of Bruce Rappaport, a close friend and business associate of William Casey. Rappaport, an oilman and oil tanker broker “thought to have ties to U.S. and Israeli intelligence,” had numerous connections to the world’s largest-ever intelligence-drug laundromat – the Bank of Credit and Commerce International (BCCI). The Gokal shipping family of Pakistan, leading BCCI investors who later contributed to BCCI’s bankruptcy, was also shareholders with Rappaport and Barry in the Inter Maritime Bank. Alfred Hartmann, a board member of BCCI, was both vice-chairman of Rappaport’s Swiss bank, Bank of New York-Intermaritime, and also head of BCCI’s Swiss subsidiary, the Banque de Commerce et de Placements (BCP).
And according to Block and Weaver, “Rappaport worked the National Bank of Oman (a BCCI/Bank of America joint venture), helping funnel millions of CIA and Saudi dollars to Pakistan for the Afghan rebels during its 1980s war with the Soviets.” Rappaport’s key man in Oman was Jerry Townsend, an alleged former CIA operative who now ran Colonial Shipping Co. in Atlanta, where he knew BCCI associate Bert Lance.
BCCI and an Israeli intelligence agent were also involved in Medellin arms sales, via a “melon farm” in Antigua partly financed by William Casey’s friend, Bruce Rappaport.
Bruce Rappaport … owned the land on which Maurice Sarfati, a former Israeli military officer, set up his melon farm. And one of Rappaport’s banks in Antigua made a large loan to Sarfati—which was never repaid. Sarfati (who also walked away from a loan guaranteed by OPIC, the U.S. government insurance agency) took it from there, first cultivating government officials and then providing entree to their offices to his compatriot Yair Klein.
Klein’s work [was] in Colombia, where his Israeli-licensed “security” company, Spearhead Ltd… trained the hit squads of the Medellin cocaine cartel in assassination and bombing techniques, was beginning to attract unwelcome attention. …. In 1988, Klein was in Antigua, looking for a new way to provide arms to his Medellin client, Jose Gonzalo Rodriguez Gacha.
Rappaport’s apparent links to Mossad raise the question whether Helliwell’s connections to Lansky’s Bank of World Commerce and Tibor Rosenbaum did not also constitute a connection to Mossad. The same question is raised by Helliwell’s legal representation (according to the Martindale-Hubbell Legal Register) of the Eastern Development Company: a firm of this name cooperated with Lansky, Hank Greenspun, and others in the supply of arms to the nascent state of Israel.
It is clear that Jews were, like many other minorities, a constituent in the global drug connection. More importantly, they were an important part of the financial infrastructure of that connection – but even at this level they did not operate alone. The global drug connection combined Jewish banks in Florida and Switzerland with those of Teochew, Fujian, and Hokkien Chinese in Southeast Asia and Hong Kong, the Muslims of Bank Intra and later BCCI in the Middle East, and furthermore Italian banks like those of Michele Sindona and Roberto Calvi, both members of the intelligence-linked Masonic Lodge P-2, and both murdered after their banks failed from mafia involvement. It is my impression that none of these ethnic minority elements ever surpassed in power the dominant role of figures from the mainstream, like Donovan and Helliwell.
(As a person deeply committed to nonviolence, I also have to acknowledge that the violence of the ethnic groups in the global drug connection, although later powerful and indeed intelligence-related, had its origins in redressive violence, against a system dominated above all by European and American interests.)
One of these mainstream figures was the mysterious E.P. Barry, an investor with both Helliwell and Rappaport. One of the very few things known about Barry is that he was in OSS during World War II, and that towards the end of the war Donovan appointed him head of OSS Counterintelligence (X-2) in Vienna.
OSS X-2, or Counterintelligence, was the most secretive and highly classified of the OSS branches, and the one whose precise mission was to penetrate the German Sicherheitsdienst [SD]. According to a 1946 OSS Report, “an equally interesting X-2 activity was the investigation of RSHA [SD] financial transactions” (Operation Safehaven). In the course of these investigations, the U.S. Third Army took an SD major “on several trips to Italy and Austria, and, as a result of these preliminary trips, over $500,000 in gold, as well as jewels, were recovered.” Some of the Nazi gold recovered under Barry’s supervision was subsequently used to finance U.S. intelligence operations in Germany in the immediate post-war years.
Barry, with this intriguing background, represents the continuity between the Helliwell intelligence-drug connection which flourished until 1972 (the year the IRS’s Operation Tradewinds began to investigate the Bank of Perrine) and the BCCI intelligence-drug connection which flourished after 1972 (the year BCCI was founded).
Like Khashoggi before it, BCCI had the ability to broker Arab-Israeli-China arms deals, as well as its contacts to western intelligence and politicians. Indeed, the bank seems to have largely inherited Khashoggi’s function as an agent of influence in the Middle East and elsewhere after the United States, by the Corrupt Federal Practices Act of 1978, outlawed direct payments by U.S. corporations to foreign individuals.
BCCI also inherited and vastly expanded Khashoggi’s use of money to influence and corrupt American politicians. BCCI’s Pakistani president, Agha Hasan Abedi, rescued Jimmy Carter’s Treasury Secretary Bert Lance from bankruptcy, and thereby developed a relationship with Carter himself.
A Senate report on BCCI concluded that
BCCI’s systematically relied on relationships with, and as necessary, payments to, prominent political figures in most of the 73 countries in which BCCI operated. …The result was that BCCI had relationships that ranged from the questionable, to the improper, to the fully corrupt with officials from countries all over the world, including Argentina, Bangladesh, Botswana, Brazil, Cameroon, China, Colombia, the Congo, Ghana, Guatemala, the Ivory Coast, India, Jamaica, Kuwait, Lebanon, Mauritius, Morocco, Nigeria, Pakistan, Panama, Peru, Saudi Arabia, Senegal, Sri Lanka, Sudan, Suriname, Tunisia, the United Arab Emirates, the United States, Zambia, and Zimbabwe.
And from two well-researched books by journalists from Time and the Wall Street Journal, we learn that among later highly-placed recipients of largesse from BCCI, its owners, and its affiliates, were
Ronald Reagan’s Treasury Secretary James Baker, who declined to investigate BCCI; and
Democratic Senator Joseph Biden and Republican Senator Orrin Hatch, the ranking members of the Senate Judiciary Committee, which declined to investigate BCCI.
The CIA, BCCI, and a “Long Tradition of Shady Banks”
But Barry is not the only link between the drug banks of Helliwell and BCCI. A more central figure is General George Olmsted, the head of the Washington bank holding company known as the International Bank. In March 1973 Olmsted had the International Bank (which “had a reputation as a CIA bank”) buy 66 percent of the capital stock of the failing Mercantile Bank in the Bahamas (Castle’s predecessor), even though “International’s officers knew the actual state of Mercantile’s financial health.” Starting in 1977, International started to sell its stock in Financial General Bankshares (later known as First American), a major American bank holding company, to BCCI front men, who later took over First American for BCCI.
The most common explanation is that the CIA not only used the bank, but had helped develop it. Journalists Peter Truell and Larry Gurwin, the authors of the definitive book on BCCI, speculated that the CIA’s relationship with its founder, Agha Hasan Abedi, might have gone back to before BCCI’s founding in 1972. They observed also that BCCI was only the latest in an overlapping series of money-laundering banks that did services for the CIA – Deak & Company, Castle Bank & Trust, and Nugan Hand.
The Global Connection and Narcotics
One of these interlocking banks, the World Finance Corporation in Florida, became the target of “perhaps the largest narcotics investigation of the decade.” But the investigation, “involving scores of federal and state agents, had to be scrapped after a year because the CIA complained to the Justice Department that a dozen top criminals were ‘of interest’ to it.”
Another drug-linked bank was the Australian Nugan Hand Bank, which chose as auditor Price Waterhouse in the Bahamas in 1976, the year that both Castle and Mercantile were collapsing. After its spectacular collapse in 1980, Australian investigators concluded that Nugan Hand had been involved in the financing of major drug deals, as well as the laundering of profits: two official investigations “placed Nugan Hand in the critical role of surreptitiously transferring drug income overseas, where it obviously could be reinvested in more illegal drugs.”
Nugan Hand collected an impressive number of former CIA officers, including its “mysterious puppetmaster” Bernie Houghton, who back in the 1950s allegedly took the place of Helliwell in Bangkok, and former CIA Director William Colby. Of particular interest is the involvement with Nugan Hand of Thomas Clines, a CIA officer in Laos under Theodore Shackley who later resigned to work in the outsourced intelligence network of Edwin Wilson. When the Nugan Hand Bank collapsed spectacularly in 1980 (with the suicide or murder of Frank Nugan), it was Thomas Clines who helped spirit Houghton quietly out of Australia, The two men, along with Edwin Wilson and Theodore Shackley and BCCI, then participated in off-the-books covert operations against the Soviets in Afghanistan, working not for the CIA but for the Safari Club.
The CIA office in Chiang Mai, when the main business of the city was opium trafficking, was on the same floor as the local office of the DEA. According to Jonathan Kwitny, “The DEA receptionist answered Nugan Hand’s phone and took messages when the bank’s representatives were out.” Nugan Hand’s representative there, Neil Evans
has said he was present when Michael Hand and Ron Pulger-Frame – the former Deak & Company courier who went to work at Nugan Hand – discussed the shipment of CIA money to the Middle East, Saudi Arabia, and Panama. Evans has said Nugan Hand moved $50 to $60 million at a time for the CIA, and also that Nugan Hand was involved in Third World arms deals.
Evans also told Australian television that the millions he handled were “garnered from the drugs transiting the area. The bank, he put it starkly, was a ‘laundry’ for Meo [Hmong] tribesmen and other poppy growers.”
In The Road to 9/11 I describe how Casey’s reliance on BCCI to distribute U.S. assistance to the Afghan mujahideen fighting the Russians led to most aid reaching the faction of Gulbuddin Hekmatyar, the leading drug trafficker in Afghanistan who soon (thanks to aid from the U.S. and Pakistan) became perhaps the leading heroin trafficker in the world.
This pattern of a drug connection repeated itself in the 1990s, after the USSR withdrew from Afghanistan and BCCI collapsed soon thereafter. In Azerbaijan (under oil company cover), veterans of CIA operations under Shackley and Clines in Laos, like Richard Secord, Heinie Aderholt, and Ed Dearborn, set up an airline on the model of Air America which soon was “picking up hundreds of mujahideen mercenaries from Afghanistan.” The Arab Afghans’Azeri operations were also financed with Afghan heroin.
Loretta Napoleoni has argued that there is an Islamist drug route of al Qaeda allies across North Central Asia, reaching from Tajikistan and Uzbekistan through Azerbaijan and Chechnya to Kosovo. This leads us to the paradoxical fact that in 1998 Clinton came to the support of the al Qaeda-backed Kosovo Liberation Army (KLA). He did so even though “[i]n 1998, the U.S. State Department listed the KLA … as an international terrorist organization, saying it had bankrolled its operations with proceeds from the international heroin trade and from loans from known terrorists like Osama bin Laden.”
Finally, if former FBI translator Sibel Edmonds is to be believed, this same flow of heroin has been financing the corruption of Congress under George W. Bush. Edmonds was fired from the FBI in 2002, after accusing a colleague of being a security threat. She has since contested her firing in a whistleblower suit which the government has blocked by invoking the State Secrets privilege. She has also been prohibited from speaking publicly about her case.
According to Daniel Ellsberg, Edmonds’ concern is the al Qaeda connection described by Napoleoni:
Al Qaeda, she’s been saying to Congress, according to these interviews, is financed 95% by drug money – drug traffic to which the U.S. government shows a blind eye, has been ignoring, because it very heavily involves allies and assets of ours – such as Turkey, Kyrgyzstan, Tajikistan, Pakistan, Afghanistan – all the ‘Stans – in a drug traffic where the opium originates in Afghanistan, is processed
in Turkey, and delivered to Europe where it furnishes 96% of Europe’s heroin, by Albanians, either in Albania or Kosovo – Albanian Muslims in Kosovo – basically the KLA, the Kosovo Liberation Army which we backed heavily in that episode at the end of the century….Sibel says that suitcases of cash have been delivered to the Speaker of the House, Dennis Hastert, at his home, near Chicago, from Turkish sources, knowing that a lot of that is drug money.
In 2005 Sibel Edmonds’ charges were partly aired in Vanity Fair. There it was revealed that she had had access to FBI wiretaps of conversations among members of the American-Turkish Council (ATC), about bribing elected U.S. officials, and about “what sounded like references to large-scale drug shipments and other crimes.”
Conclusion: A Continuous Succession of Drug-Related Deep Events
Mafias and empires have certain elements in common. Both can be seen as the systematic violent imposition of governance in areas of undergovernance. Both use atrocities to achieve their ends; but both tend to be tolerated to the extent that the result of their controlled violence is a diminution of uncontrolled violence. (I would tentatively suggest an important difference between mafias and empires: that, with the passage of time, mafias tend to become more and more part of the civil society whose rules they once broke, while empires tend to become more and more irreconcilably at odds with the societies they once controlled.)
In this book we have seen an overlap between the infrastructures of the American mafia and the indirect American empire. And in this chapter I have attempted to describe the epicenter of this overlap in a milieu, expanding at its outer limits into a global nexus that I have called the global drug connections, with intimate links to both the U.S underworld and U.S. overworld. The nexus links U.S. intelligence to the intelligence services of many other countries, including Taiwan, Israel, Italy, and Chile. It also oversees financial contributions to the leading politicians of many countries, including both parties of the United States.
All of the major deep events in recent American history, and all of the major expansions of the U.S. indirect empire since World War II, can be linked to this global drug connection:
— The first U.S. postwar presence in East Asia was established in conjunction with the drug-financed KMT in Taiwan.
— The U.S. presence in Southeast Asia began with Sea Supply’s support for KMT drug traffickers in East Burma, then expanded in the mid-fifties with the drug-financed PARU force into Laos, while the CIA secured Saigon by controlling drug distribution there.
— The interlocking finance company Deak & Company, founded by OSS veteran Nicholas Deak, “was reportedly used by the CIA to finance covert operations, including the 1953 overthrow of democratically elected Iranian Prime Minister Mohammed Mossadeq.”
— The 1954 overthrow of democratically elected Guatemalan President Jacobo Arbenz was partly achieved with the support of Nicaraguan dictator Anastasio Somoza, a major figure in Lansky’s arms pipeline to Israel in the 1940s, and whose Guardia Nacional was deeply involved in Caribbean drug trafficking thereafter.
— The introduction of CIA covert forces in Laos in 1960, which eventually grew into a drug-financed irregular army of tens of thousands, was achieved with a force that grew out of the Sea Supply operation in Thailand. The CIA’s private war in Laos, which President Kennedy sought vainly to contain, was the true starting point of the U.S. war in Vietnam.
— Angleton’s “alternative CIA,” CI/SIG, manipulated and falsified its “intelligence” about Lee Harvey Oswald in such a way as to prepare him to be the designated suspect in the assassination of President John F. Kennedy.
— The overthrow of democratically elected Indonesian President Sukarno in 1965 was achieved in part by covert assistance through Lockheed Corporation payoffs, and in part by the intervention of Sasakawa Ryoichi, a CIA agent of influence, along with his friend Kodama Yoshio, with the yakuza in Japan. Sasakawa and Kodama were also recipients of Lockheed payoffs facilitated partly by Deak & Company, and partly on the scene by Shig Katayama, whose ID Corp. in the Cayman Islands conducted mysterious business transactions with Helliwell’s Castle Bank.
— BCCI provided the initial infrastructure for the CIA intervention in Afghanistan in 1979, and the ensuing alliance with the major drug trafficker Gulbeddin Hekmatyar. Pakistan’s President Zia arranged for Zbigniew Brzezinski, Carter’s National Security Adviser, to work with Lt.-Gen. Fazle Haq; while a BCCI informant told U.S. authorities that Fazle Haq was “heavily engaged in narcotics trafficking and moving the heroin money through the [BCCI] bank.” Hekmatyar in the next decade received more CIA aid than any other CIA asset before or since.
— In 1970, a CIA officer with the pseudonym Henry J. Sloman, who was also “a high-risk smuggler directly linked to the Mafia,” was dispatched to Chile, where he became involved with the right-wing plotting to assassinate General René Schneider, commander-in-chief of the Chilean Army.
— Orlando Letelier was murdered in Washington in September 1976 by a team including Cuban exile drug-traffickers, working for the drug-financed Chilean intelligence agency DINA. Though the US Government was already aware of DINA’s Operation CONDOR for such foreign-based murders, CIA Director Bush chose publicly to deflect suspicion away from DINA.
— According to Robert Parry, Alexandre de Marenches of the Safari Club arranged for William Casey (a fellow Knight of Malta) to meet with Iranian and Israeli representatives in Paris in July and October 1980, where Casey promised delivery to Iran of needed U.S. armaments in exchange for a delay in the return of the U.S. hostages in Iran. (This was the so-called Republican “October Counter-surprise.”) Parry suspects a role of BCCI in both the funding of payoffs for the secret deal, and also the subsequent flow of Israeli armaments to Iran.
— In 1981 Mehmet Ali Agça, a member of the Turkish drug-trafficking Grey Wolves, attempted to assassinate Pope John Paul II. Le Monde diplomatique later reported that the assassination attempt was organized, at the request of Turkish mafia chief Bekir Celenk, by Abdullah Çatli, a drug-trafficking Grey Wolf leader of death squads for Turkish intelligence. Le Monde diplomatique added that Çatli conducted underground operations for the Turkish branch of the CIA’s Gladio (stay-behind) organization, and that one year later Çatli visited Miami with the notorious Operation CONDOR killer, Stefano delle Chiaie.
— Shackley, Khashoggi, and BCCI were instrumental in inaugurating the illegal Iran-Contra Connection of 1985-86, which diverted funds from arms sales to Iran to support of the Contras in Honduras and Costa Rica.
— The looting of Russia during the Yeltsin era in the 1990s saw funds channeled through Rappaport’s Inter Maritime Bank into the Bank of New York, where Rappaport also had an important if not controlling interest.
— In 1991, Shackley’s colleague Richard Secord created an airline in Azerbaijan which arranged to fly in hundreds of mujahideen from Afghanistan recruited by Gulbuddin Hekmatyar.
— U.S. support for the Kosovo Liberation Army in 1998, a group backed by al-Qaeda and financed in part by drugs, led to revelations that for years at least one of the KLA leaders had a longtime relationship with the U.S. private military company MPRI. (As late as 1997 the KLA had been recognized by the United States as a terrorist group supported in part by the heroin traffic.)
(The list could be indefinitely expanded. For example, the conversion of Australia into a dependable U.S. ally can be dated to the fall of democratically elected Labor Prime Minister Gough Whitlam in 1975, in which Penny Lernoux and others have seen the hidden hand of the Nugan Hand Bank.)
This deep continuity underlying U.S. expansion since World War II helps make credible the startling phenomenon described in our last chapter – namely, that deep events such as the Kennedy assassination and 9/11 are not unrelated, or the product of forces attacking America from outside. Rather, at least in part, they surface into public awareness out of the deep connection described in this chapter, a connection whose presence is ongoing but almost completely unacknowledged.
Further Conclusion: The Increasing Threat to Stable Democracy
But when this list of covert interventions and deep events is viewed synoptically, a pattern can be seen of increasing deviation from the policies of the public state. The assistance of the global connection for the CIA’s interventions in Iran (1953) and Guatemala (1954) was in support of operations previously sanctioned by the National Security Council (and before that the Council on Foreign Relations).
But the drug-financed evolution of a CIA-trained force in Thailand into an offensive force invading Laos was an operation explicitly not authorized by the National Security Council. As Daniel Fineman has noted,
JCS [Joint Chiefs of Staff] preference for direct aid to French forces forced the NSC [National Security Council] in September  to authorize implementation of only phase one [“strengthening Thailand’s will and ability to resist”], postponing indefinitely execution of the provisions in phase two taking the psychological war to neighboring countries.
And the falsification of Oswald’s file by Angleton’s CI/SIG, although it may have been initially authorized as a legitimate tool in the search for an alleged mole in the CIA, eventually facilitated the successful assassination of John F. Kennedy and the ensuing cover-up. At this point, the global connection was no longer simply a force acting in support of the public American state; it had developed relations with forces attacking the public state.
This pattern of increasing deviation can be used to refine our notion of the American deep state. Initially the deep state can be identified with the Office of Policy Coordination (OPC), the creation (invisible at the time) of the National Security Council that facilitated the original Helliwell-CIA-mob connection. With the absorption of OPC into the CIA in 1953, the American deep state ceased for many years to exhibit the relatively coherent and disciplined concentration of authority that one sees in the deep states of Turkey or Italy or Colombia, or at one time in Chile and Argentina. At this stage the American deep state was unified by the economy of drugs but not much else. Its nebulous connection to legitimate power had shrunk to Angleton’s “alternative CIA,” and even this ceased when Angleton was fired in December 1974.
But according to Joseph Trento, the connection was indirectly restored by a “shadow CIA” working for the Safari Club and Saudi intelligence; and by the 1980s this shadow CIA “was not only working for the Israelis but also was involved in covert operations from Central America to Iran.” It is certain that, with the blessing of Casey, – who had his own direct contacts with Rappaport, BCCI, and the global drug connection – Shackley, Khashoggi, and their contacts led to Iran-Contra. At least one member of Shackley’s group, Richard Secord, then created an airline which brought Islamist mujahideen to Afghanistan. Another, neocon Michael Ledeen, contributed not only to Iran-Contra but also, with Donald Rumsfeld and Dick Cheney, to the creation of the Project for the New American Century (PNAC).
Indeed, the decision of William Casey to work with the global connection, and more specifically BCCI and Theodore Shackley’s contacts in Iran-Contra, cannot be fully understood by focusing on the history of the global drug connection alone. Casey’s actions must be seen in the context of what Irving Kristol has called the intellectual counterrevolution of the 1970s, the successful reversal of Kissinger’s and Carter’s moves towards détente with the Soviet Union, and of the post-Watergate reforms introduced by Senator Frank Church and others. As I have written elsewhere, a key moment was the so-called Halloween massacre in 1975, which saw among other things the firing of Angleton’s nemesis, William Colby, the appointment of Rumsfeld to Secretary of Defense, and the end of Kissinger’s long tenure as National Security Adviser.
By 1976 the intellectual counterrevolution had consolidated a new anti-Kissinger coalition consisting of a) Cheney and Rumsfeld inside the Ford Administration, b) the Committee on the Present Danger lobbying for a vastly increased defense budget, and c) neocons like Richard Perle and Paul Wolfowitz, who came together to work against Kissinger’s SALT agreements and (with the help of the CIA’s new director, George H.W. Bush) to radically escalate the CIA’s estimate of the Soviet threat. Casey played an important role in this anti-Soviet coalition, and in 1976 he joined the CPD along with long-time members of the global connection like Ray Cline (Helliwell’s old OSS associate from Kunming), Jay Lovestone, and George Olmsted.
The anti-government bias of the new neocon right has extended to increased dislike for the CIA, now seen as an enemy rather than an ally. But even the new outsourced forces of violence in private security companies (PSCs) like Blackwater have recruited from the violent resources of the old global drug connection – specifically, in Blackwater’s case, from the paramilitary forces in countries like Colombia.
In short, the recourse to the illicit violence of the global drug traffic, which began in the panicked early years of the Cold War, has continued ever since to increase and metastasize, until it is now an increasing threat to constitutional democracy. It is not easy for most people to understand this. In the short run, illicit violence breeds the redressively violent opposition which justifies its existence – so that today the PSCs in Iraq and Afghanistan earn multimillion dollar contracts to fight the resistance they themselves have provoked.
But the new system of indirect empire does not appear to be a stable one: if there is a momentary respite in Iraq, it is because opposing cadres have found it more fruitful to fight in Afghanistan. Rather, indirect empire is a violent substitute for politics, to deal with situations which only politics can ameliorate.
If this country were serious in wishing to deal with the problem of terrorism, it would seek to reduce, rather than increase, the oppression which is producing redressive violence in Afghanistan, Iraq, Chechnya, Kashmir, Lebanon, and Palestine. The present course is more likely to aggravate the deteriorating status quo, and also to accelerate the waning of American resources, influence, and good will, even among our allies.
Is it utopian to think that the present course can be corrected? Probably yes, as long as most Americans believe that 9/11 was an attack engineered solely by a group of malevolent Arabs. But a saner policy might ensue if it were shown that 9/11, as Sibel Edmonds has intimated, was a deep event involving elements from America’s global drug connection.
What I have called America’s global drug connection has been responsible in the past for global terrorist activities like Operation Condor, and also for strengthening drug networks as so-called parallel governments in countries like Laos, Pakistan, Lebanon, Turkey, and Colombia. For decades this country has been largely in denial about U.S. complicity in this state of affairs, projecting responsibility for terrorism instead on the Soviet Union (“the Evil Empire”) and more recently Iraq and Iran (“the Axis of Evil”).
To overcome these decades of denial will not be easy. But it will be a necessary step towards diminishing terrorism, and restoring a saner world.
Peter Dale Scott Deep Events and the Global Drug Connection August 17, 2008
“9/11, Deep State Violence and the Hope of Internet Politics,” Global Research; cf. Peter Dale Scott, The Road to 9/11: Wealth, Empire, and the Future of America (Berkeley and Los Angeles: University of California Press, 2007), 4-7, 14-17, etc.
Alan A. Block, East Side-West Side: Organizing Crime in New York, 1930-1950 (New Brunswick, NJ: Transaction Books, 1983), 109.
Gaia Servadio, Mafioso (New York: Dell, 1976), 125-28.
R.T. Naylor, Hot Money and the Politics of Debt (New York: Linden/Simon and Schuster, 1987), 295 (“laundromat”). For Helliwell’s ownership, see Alan A. Block, Masters of Paradise (New Brunswick, NJ: Transaction Publishers, 1991), 165-66.
CIA Memo dated 24 April 1974, “RYBAT/JMSPUR/PLVWCADET Traffic Removed from C/WHD Personal Files during Watergate File Search. Traffic can be found in sealed sensitive envelope in safe No. 1322 located in WH/COG, Room 3D46,” NARA # 104-10095-10326. C/WHD (Chief of Western Hemisphere Division) in 1974 was Theodore Shackley, discussed below. All of the CIA and FBI documents discussed in this essay can be seen on the Mary Ferrell website, http://www.maryferrell.org/.
Block, Masters of Paradise, 161-62, 166.
Alan Block subsequently learned that it was the bank’s co-founder, Chicago lawyer “Burt Kanter, more so than Helliwell, who was instrumental in Castle’s formation.” He cites speculation that it was originally set up on behalf of the former Cleveland mob racketeer, Morris Kleinman (Block, Masters of Paradise, 172).
Jim Drinkhall, “IRS vs. CIA: Big Tax Investigation Was Quietly Scuttled By Intelligence Agency,” Wall Street Journal, April 18, 1980.
Wall Street Journal, April 18, 1980.
Alfred W. McCoy, The Politics of Heroin (Chicago: Lawrence Hill Books/ Chicago Review Press, 2001), 168-74; Block, Masters of Paradise, 169 (Thai police).
Alan A. Block and Constance A. Weaver, All Is Clouded by Desire: Global Banking, Money Laundering, and International Organized Crime (Westport, CN.: Praeger, 2004), 38; citing Stephen Schlesinger and Stephen Kinzer, Bitter Fruit: The Untold Story of the American Coup in Guatemala (Garden City, NY: Anchor Books, 1983), 119. Cf. Peter Dale Scott, The War Conspiracy: JFK, 9/11, and the Deep Politics of War (Ipswich, MA: Mary Ferrell Foundation Press, 2008), 47, 67.
Wall Street Journal, April 18, 1980.
CIA Memo of 18 August 1976 for Chief, Security Analysis Group, NARA #104-10059-10013. The margin of the memo carries the following handwritten reference to Sam Giancana, the major figure in the CIA-mafia assassination plots against Fidel Castro: “for file/ Sam GIANCANA/ not mentioned.”
Jonathan Marshall, Drug Wars: Corruption, Counterinsurgency and Covert Operations in the Third World (Forestville, CA: Cohan and Cohen, 1991), 54; citing Drinkhall, Wall Street Journal, April 18, 1980.
Block notes that the spinoff of I.D.C. from Benguet was accompanied by a “payment of $329,439 to a Hong Kong Bank” (possibly into a Marcos account) (Block, Masters of Paradise, 98).
Profits from the Philippine gold mine, and possibly gold itself, reached I.D.C. from Asia. But I have not seen corroboration for the claim of Sterling and Peggy Seagraves that Groves and Helliwell were actually moving parts of the Japanese wartime gold hoard to the Bahamas “out of the Philippines, masquerading as gold from Benguet Mines” (Sterling and Peggy Seagrave, Gold Warriors: America’s Secret Recovery of Yamashita’s Gold [London: Verso, 2003], 147). It is, however, of interest that the Marcos family also entered into business dealings with the CIA-related Nugan Hand Bank (see below), which some say included negotiations for the surreptitious shipment of Marcos’ gold (Jonathan Kwitny, The Crimes of Patriots [New York: Norton, 1987], 182, 186-87, 190).
Lernoux, In Banks We Trust, 83.
Marshall, Drug Wars, 54-55. Cf. U.S. Congress, House, Committee on Government Operations, Oversight Hearings into the Operations of the IRS (Operation Tradewinds, Project Haven, and Narcotics Traffickers Tax Program), Hearings (Washington: GPO, 1975, 909; Peter Dale Scott, Coming to Jakarta: A Poem about Terror (New York: New Directions, 1989), 99-103. It is not known if ID Corp. and I.D.C. were related.
For the CIA’s close involvement in Lockheed payoffs, see Anthony Sampson, The Arms Bazaar (New York: Viking, 1977), pp. 137, 227-8, 238. The U.S. Air Force was also involved. San Francisco Chronicle, October 24, 1983, p. 22, describes one such USAF-Lockheed operation in Southeast Asia, “code-named ‘Operation Buttercup’ that operated out of Norton Air Force Base in California from 1965 to 1972.”
“The United States and the Overthrow of Sukarno, 1965-1967,” Pacific Affairs, LVIII, 2 (Summer 1985), 239-64: “A 1976 Senate investigation into these [Lockheed] payoffs revealed, almost inadvertently, that in May 1965, over the legal objections of Lockheed’s counsel, Lockheed commissions in Indonesia had been redirected to a new contract and company set up by the firm’s long-time local agent or middleman. Its internal memos at the time show no reasons for the change, but in a later memo the economic counselor of the U.S. Embassy in Jakarta is reported as saying that there were “some political considerations behind it.” If this is true, it would suggest that in May 1965, five months before the coup, Lockheed had redirected its payoffs to a new political eminence, at the risk (as its assistant chief counsel pointed out) of being sued for default on its former contractual obligations. The Indonesian middleman, August Munir Dasaad, was `known to have assisted Sukarno financially since the 1930’s.’ In 1965, however, Dasaad was building connections with the Suharto forces, via a family relative, General Alamsjah, who had served briefly under Suharto in 1960, after Suharto completed his term at SESKOAD. Via the new contract, Lockheed, Dasaad and Alamsjah were apparently hitching their wagons to Suharto’s rising star: ‘When the coup was made during which Suharto replaced Sukarno, Alamsjah, who controlled certain considerable funds, at once made these available to Suharto, which obviously earned him the gratitude of the new President. In due course he was appointed to a position of trust and confidence and today Alamsjah is, one might say, the second important man after the President.’”
A Senate amendment in 1964 to cut off all aid to Indonesia unconditionally was quietly killed in conference committee, on the misleading ground that the Foreign Assistance Act “requires the President to report fully and concurrently to both Houses of the Congress on any assistance furnished to Indonesia” (U.S. Cong., Senate, Report No. 88-1925, Foreign Assistance Act of 1964, p. 11). In fact the act’s requirement that the president report “to Congress” applied to eighteen other countries, but in the case of Indonesia he was to report to two Senate Committees and the Speaker of the House: Foreign Assistance Act, Section 620(j).
Tom J. Farer, Transnational Crime in the Americas: An Inter-American Dialogue Book (New York: Routledge, 1999), 65.
Ed Reid and Ovid Demaris, The Green Felt Jungle (New York: Pocket Books, 1964), 217-20. Levinson had fronted for Lansky at the Sands casino in Las Vegas.
Peter Dale Scott, Drugs, Oil, and War: The United States in Afghanistan, Colombia, and Indochina (Lanham, MD: Rowman & Littlefield, 2003), 7, 60-61, 198, 207; citing Penny Lernoux, In Banks We Trust (Garden City, NY: Anchor/Doubleday, 1984), 42-44, 84.
Naylor, Hot Money and the Politics of Debt, 22.
Block, Masters of Paradise, 51. Intra Bank also had a Bahamian branch, Intra Bahamas Trust Ltd.
Newsday, staff and editors of, The Heroin Trail (New York: Holt, Rinehart and Winston, 1974), 137 (Francisi); McCoy, The Politics of Heroin, 39 (Luciano). El-Khoury “used Luciano’s money to buy off Lebanese police and customs agents” (Alexander Cockburn and Jeffrey St. Clair, Whiteout: The CIA, Drugs, and the Press [London: Verso, 1998], 131).
McCoy, Politics of Heroin, 541.
James Mills, The Underground Empire: Where Crime and Government Embrace (New York: Dell, 1978), 70.
Scott and Marshall. Cocaine Politics (paperback edition), x-xi. Dayle made this statement during a videotaped teleconference, in the presence of Marshall and myself.
Wall Street Journal, April 18, 1980. Dalitz, Kleinman, and Tucker, all veterans of the gambling scene in Cleveland, later had a controlling interest in the Desert Inn casino in Las Vegas (Investigation of Organized Crime in Interstate Commerce: Hearings before the [Kefauver] Special Committee to Investigate Organized Crime in Interstate Commerce, U.S. Senate, 81st Cong., 2nd Sess. and 82nd Congress, 1st Sess., Part 10, US Government Printing Office, [Washington DC: 1950], pp. 907-926). Block’s and Weaver’s later and more detailed study claims that Dalitz did not have an account at Castle, but adds former Lansky associate Lou Rothkopf to the list of mob figures who did (Block and Weaver, All Is Clouded by Desire, 45).
Block, Masters of Paradise, 189.
Penny Lernoux, In Banks We Trust (Garden City, NY: Anchor/Doubleday, 1984; citing Wall Street Journal, May 23, 1977, February 17, 1981; also, Parapolitics, Spring 1981), 88: “Like Castle, Mercantile was a conduit for CIA money, and Price Waterhouse accountants were `under orders’ to make sure `outsiders’ did not have access to the books. If they probed around, said a CIA source, they ‘could unravel a trail to the intelligence community.’”
Block and Weaver, All Is Clouded by Desire, 40; cf. Block, Masters of Paradise, 188-91, where Kleinman is called “perhaps a hidden owner” of Castle.
Block, Masters of Paradise, 163; New York Times, September 1, 1989 (“part owner”).
Block, Masters of Paradise, 164.
CIA Inspector General’s Report of 1967 on CIA-Mafia Plots to Assassinate Castro, pp. 15-16, NARA #151993.08.11.16:44:08:750007, pp. 3-4.
Memo of 5 September 1975 to DDO from CI Staff Chief George Kalaris, NARA #104-1010-10003, p. 2.
Tom Mangold, Cold Warrior: James Jesus Angleton: The CIA’s Master Spy Hunter (New York: Touchstone/ Simon & Schuster, 1991), 314-15.
Douglas Valentine, “The French Connection Revisited: The CIA, Irving Brown, and Drug Smuggling as Political Warfare,” Covert Action, http://www.covertaction.org/content/view/99/75/.
Paul Buhle, “Lovestone’s Thin Red Line,” Nation, May 6, 1999, http://www.thenation.com/doc/19990524/buhle.
House Select Committee on Assassinations, Investigation of the Assassination of President John F. Kennedy, Appendix to Hearings, Volume IX (March 1978), 47.
Ed Reid, The Grim Reapers: The Anatomy of Organized Crime in America (New York: Bantam, 1969), 174.
Mangold, Cold Warrior, 329-30; cf. 305, 337. Other authors have written that Dulles and Angleton maintained a “second agency,” or “agency-within-the Agency;” see e.g. Mark Aarons and John Loftus, Unholy Trinity (New York: St. Martin’s Press, 1991), 260.
Mangold, Cold Warrior, 105.
Memo of 4 November 1970 from John K. Greaney, Assistant General Counsel, CIA, NARA #104-10106-10374.
“United States of America, Appellee, v. Leonard Russo, et al., Defendants-Appellants”
Memo of 4 November 1970 from John K. Greaney, Assistant General Counsel, CIA, NARA #104-10106-10374. Robert Sam Anson once claimed that two of the defendants in these kickback trials, John Larocca and Gabriel Mannarino, were acquitted in 1971 when “one of the star witnesses turned out to be the local head of the CIA” (Robert Sam Anson, “They’ve Killed the President,” [New York: Bantam, 1975], 296). Anson told me that this witness was Brod, but I have found no court record that Brod’s testimony was accepted into the court record.
Dan E. Moldea, The Hoffa Wars: Teamsters, Rebels, Politicians, and the Mob (New York: Paddington Press, 1978), 130-31.
Time, June 9, 1975, 14.
Church Committee, Testimony of John Scelso, 7 May 1976, 41-42, NARA #157-10014-10083, 45-46. Angleton’s response suggests that he may have believed what Hank Messick and others later charged: that Lansky had somehow obtained protection from the Bureau [Hank Messick, John Edgar Hoover (New York: David McKay Co., 1972], 229-31, etc).
William R. Corson, Susan B. Trento, Joseph J. Trento, Widows (New York: Crown, 1979), 71.
For details see Scott, War Conspiracy, 387; Peter Dale Scott, Deep Politics II: The New Revelations in U.S. Government Files, 1994-1995 (Ipswich, MA: Mary Ferrell Foundation Press, 2007), 30-33.
See Peter Dale Scott, Deep Politics II: The New Revelations in U.S. Government Files,
1994-1999 (Ipswich, MA: Mary Ferrell Foundation Press, 2007), 17-18, 92; also
Peter Dale Scott, “Oswald and the Hunt for Popov’s Mole,” The Fourth Decade, III,
3 (March 1996), 3; http://www.maryferrell.org/mffweb/archive/viewer/showDoc.do?absPageId=519798.
Peter Dale Scott, Deep Politics II, 30-33.
See discussion in Peter Dale Scott, “The JFK Assassination and 9/11: the Designated Suspects in Both Cases,” Global Research, July 5, 2008, http://www.globalresearch.ca/index.php?context=va&aid=9511.
J. Patrice McSherry, Predatory States: Operation Condor and Covert War in Latin America (Lanham, MD: Rowman & Littlefield, 2005), 139-75; John Dinges, The Condor Years: How Pinochet and His Allies Brought Terrorism to Three Continents (New York: New Press, 2004), 190-98, 248-50; Peter Kornbluh, The Pinochet File: A Declassified Dossier on Atrocity and Accountability.
McSherry, Predatory States, 95; citing White cable of October 13, 1978, foia.state.gov/documents/State/Chile3/000058FD.pdf (a URL inactive in 2008); also Diana Jean Schemo, “New Files Tie U.S. to Deaths of Latin Leftists in 1970s,” New York Times, March 6, 2001.
“I can do no less, without producing a reaction in the U.S. which would lead to legislative restrictions. The speech is not aimed at Chile…My evaluation is that you are a victim of all left-wing groups around the world, and that your greatest sin was that you overthrew a government which was going communist” (Dinges, The Condor Years, 159-62); citing Department of State Bulletin 75 (July 5, 1976), 4 (public speech).
McSherry, Predatory States, 159.
McSherry, Predatory States, 161.
Los Angeles Times, May 7, 2008, http://articles.latimes.com/2008/may/07/nation/na-posada7.
Kevin Phillips, American Dynasty: Aristocracy, Fortune, and the Politics of Deceit in the House of Bush (New York: Viking, 2004), 280.
Joseph J. Trento, The Secret History of the CIA (New York: Forum/Prima/Random House, 2001), 436-37. In 1978 Trento himself was the recipient of a leak linking Wilson to Shackley.
Trento, The Secret History of the CIA, 395 (Helms), 344 (cadre).
Block, Masters of Paradise, 191.
Block, Masters of Paradise, 192: “The major Pritzker link to the Teamsters was crafted by Stanford Clinton, “ a lawyer “who represented some of Chicago’s leading hoodlums” and also had a Castle account.
Block, Masters of Paradise, 195.
Block, Masters of Paradise, 171; cf. 32-33.
Block, Masters of Paradise, 172-73, 182.
Scott, The War Conspiracy, 46-47, 60, 64-68, 263, 278-79.
OSS officer and Corcoran friend Ernest Cuneo, quoted in David McKean, Peddling Influence: Thomas “Tommy the Cork” Corcoran and the Birth of Modern Lobbying (Hanover, NH: Steerforth, 2004), 286.
“Lawyers and Lobbyists.” Fortune, February 1952, p. 142; quoted in Scott, The War Conspiracy, 47.
Joseph J. Trento, Prelude to Terror: The Rogue CIA and the Legacy of America’s Private Intelligence Network (New York: Carroll and Graf, 2005), 9.
Scott, The War Conspiracy, 278-79
Block, Masters of Paradise, 170.
McKean, Peddling Influence, 140-43; Scott, War Conspiracy, 64-65.
McKean, Peddling Influence, 149-50.
Bruce Cumings, The Origins of the Korean War, Vol II (Princeton: Princeton UP, 1990), 107, 153; Trento, Prelude to Terror, 9.
Oral History Interview with Arthur R. Ringwalt, June 5, 1974, Truman Library, http://www.trumanlibrary.org/oralhist/ringwalt.htm.
Bertil Lintner, Burma in Revolt: Opium and Insurgency Since 1948 (Chiang Mai: Silkworm Books, 1999), 192; Scott, Drugs, Oil, and War, 51, 187, 192-93, etc.
Daniel Fineman, A Special Relationship: The United States and Military Government in Thailand, 1947-1958 (Honolulu: University of Hawai’i Press, 1997), 214-15; cf. 206.
Penny Lernoux, In Banks We Trust (Garden City, NY: Anchor/Doubleday, 1984), 82-83.
Anthony Summers with Robbyn Swann, The Arrogance of Power: The Secret World of Richard Nixon (New York: Viking, 2000), 242.
Memo of 18 August 1976 to Chief, Security Analysis Group, NARA #104-10059-10013; also partially released as p. 6 of Meyer Lansky Security File, 1993.08.13.17:42:12:560059.
Memo of 18 August 1976 to Chief, Security Analysis Group, NARA #104-10059-10013; Reid, The Grim Reapers, 119-23.
Jeff Gerth, in Sid Blumenthal and Harvey Yazijian (eds.), Government by Gunplay: Assassination Conspiracy Theories from Dallas to Today (New York : New American Library, 1976), 138.
Summers with Swan, The Arrogance of Power, 242, 252; Jim Hougan, Spooks, 398. Cf. Denny Walsh, New York Times, January 21, 1974; Gerth, in.Government by Gunplay, 137-39.
Block, Masters of Paradise, 94-96; Summers with Swan, The Arrogance of Power, 244-45.
Summers with Swan, The Arrogance of Power, 244-45, 253-54.
Block, Masters of Paradise, 46, 101.
Inspector-General’s report on CIA Plots to Assassinate Fidel Castro, 29-30; quoted in Peter Dale Scott, Deep Politics II: The New Revelations in U.S. Government Files, 1994-1995 (Ipswich, MA: Mary Ferrell Foundation Press, 2007), 60.
San Francisco Chronicle, March 3, 1967, 41; quoted in Scott, Deep Politics II, 67.
Block, Masters of Paradise, 100-01.
Inspector-General’s report on CIA Plots to Assassinate Fidel Castro, 29-30; quoted in Peter Dale Scott, Deep Politics II, 59
Some of the documents in this file, including the FBI Report quoted in this paragraph, are incorporated into the Inspector-General’s report on CIA Plots to Assassinate Fidel Castro, 29-30; quoted in Peter Dale Scott, Deep Politics II, 59. In addition, the CIA’s report on its interest in Resorts International, quoted above, carries the handwritten notation “for file/ Sam GIANCANA/ not mentioned.” The allusion to Giancana makes sense in the context of the CIA-mafia plots, but as far as I know not otherwise.
“MOSS, Edward K. #172 646,” CIA Memo of 14 May 1973, in Meyer Lansky Security File, p. 9, NARA #1993.08.13.17:42:12:560059. The CIA used the misspelling “Verona” which occurred just once in the FBI source document, and ignored the correct spelling “Varona” which was abundantly used as well. Note below their use of “Cellino” (rather than “Cellini”) and “Lenzieri” (for Lanzieri) in related CIA documents. By this device both the FBI and CIA could avoid responding to document searches for the correct name. For example in the 1940s the CIA told the French that they had no documents on the SS war criminal Klaus Barbie, whom they were harboring. The American documents referred to him systematically as “Barbier.”
“MOSS, Edward K. #172 646,” CIA Memo of 14 May 1973 from Jerry G. Brown for Deputy Chief, Security Research Staff, NARA #1993.08.13,17:42:12:560059.
“Moss, Edward K. #172 646,” CIA Memo of 19 April 1967 [at the time of the I-G Report mentioning Moss], NARA #104-10122-10006; Inspector General’ Report on CIA-Mafia Plots to Assassinate Fidel Castro (henceforth I-G Report), NARA # 104-10213-10101, p. 38. Cf. memo of 7 November 1962 in CIA’s Edward K. Moss folder, p. 26, NARA #1994.05.03.10:54:53:780005.
“Manuel Antonio Varona,” FBI Memorandum of January 16, 1961 to A. H. Belmont, 105-76826-20; NARA #124-90055-10139.
“Manuel Antonio Varona,” FBI Memorandum of January 16, 1961 to A. H. Belmont, p. 2, 105-76826-20; NARA #124-90055-10139. Cf. “Moss, Edward K. #172 646,” CIA Memo of 14 May 1973, in Meyer Lansky Security File, p. 9, NARA #1993.08.13.17:42:12:560059; CIA letter of 16 December 1960 to FBI, FBI file 105-76826-18; NARA #124-90055-10133.
CIA letter of 16 December 1960 to Director, FBI, FBI File 105-76826-18; NARA #124-90055-10133. Apparently no copy of this letter has been released from CIA files.
“Manuel Antonio Varona,” FBI Memorandum of January 16, 1961 to A. H. Belmont, p. 2, 105-76826-20; NARA #124-90055-10139.
Peter Dale Scott, Deep Politics and the Death of JFK (Berkeley: University of California Press, 1998), 145; cf. 238-40.
“Moss, Edward K. #172646,” CIA Memo of 28 November 1962, NARA #1994.05.03.10:54:53:780005.
I-G Report, p. 38.
“Manuel Antonio Varona,” FBI Memorandum of January 16, 1961 to A. H. Belmont,” p. 2, 105-76826-20; NARA #124-90055-10139.
FBI Memorandum to Attorney General, January 23, 1961, NARA # 124-90055-10140.
Anthony Summers with Robbyn Swann, The Arrogance of Power: The Secret World of Richard Nixon (New York: Viking, 2000), 194; citing I-G Report.
Don Bohning, The Castro Obsession: U.S. Covert Operations Against Cuba (Washington: Potomac Books, 2005), 181.
Summers with Swann, Arrogance of Power, 283 ($1 million); Robert Baer, Sleeping with the Devil (New York: Crown, 2003), 43 (briefcase); Kessler, The Richest Man in the World, 170 (“several million”); Renata Adler, “Searching for the Real Nixon Scandal,” Atlantic (December 1976), 76–84 ($200 million). Khashoggi admitted publicly to a gift of $43,000 to the Nixon campaign in 1972.
Kessler, Richest Man in the World, 170.
Kessler, Richest Man in the World, 142, 181.
It has been alleged that at the Sands in 1960 the FBI saw the casino’s courtesy prostitutes “running in and out of” Senator Jack Kennedy’s suite, and a million dollars was allegedly given to Kennedy in a brown leather satchel by the hotel’s owners (John William Tuohy, “The Sands,”AmericanMafia, August 2001, http://www.americanmafia.com/Feature_Articles_155.html).
Omar Garrison, Howard Hughes in Las Vegas (New York: Dell, 1970), 48-49, 56, 58; Peter Dale Scott, Crime and Cover-Up: The CIA, the Mafia, and the Dallas-Watergate Connection (Palo Alto, CA: Ramparts Press, 1977), 29.
Kessler, Richest Man in the World, 149-50.
Sally Denton and Roger Morris, The Money and the Power: The Making of Las Vegas and Its Hold on America, 1947-2000 (New York: Knopf, 2001), Prologue. Sally Denton later enlarged on the details: “When it became clear 70 United States, American, banks were involved, had the complicity, knew about every single one of the wire-transfers and transactions — banks including Chemical Bank, Bank of New York, CitiBank, American Express –… President Clinton and Madeline Albright stepped in and intervened and stopped the entire investigation and closed all of the cases” (Discussion at Taos Community Auditorium on October 12, 2002; http://www.taosplaza.com/taosplaza/2003/pages/tmff_drugs.php).
Gigi Mahon, The Company That Bought the Boardwalk (New York: Random House, 1980), 136.
Kessler, Richest Man in the World, 275–78. A friend of Khashoggi’s, Larry Kolb, reports that Khashoggi himself essentially corroborated the story that Khashoggi and John Kennedy had a friendship in the 1950s that “evolved primarily out of whoring together” (Larry J. Kolb, Overworld: The Life and Times of a Reluctant Spy [New York: Riverhead/Penguin, 2004], 236). The woman who destroyed the presidential aspirations of Senator Gary Hart in 1987 was one of Khashoggi’s many girls.
Kessler, The Richest Man, 238, 240.
Prince Turki bin Faisal gave Georgetown University alumni a frank account of the Safari Club’s formation in response to post-Watergate restrictions: “In 1976, after the Watergate matters took place here, your intelligence community was literally tied up by Congress. It could not do anything. It could not send spies, it could not write reports, and it could not pay money. In order to compensate for that, a group of countries got together in the hope of fighting Communism and established what was called the Safari Club. The Safari Club included France, Egypt, Saudi Arabia, Morocco, and Iran.”
Kolb, Overworld, 238, 242–43.
Sally Denton and Roger Morris, The Money and the Power: The Making of Las Vegas and Its Hold on America, 1947-2000 (New York: Knopf, 2001), 72; citing laudatory article on Greenspun in the Jerusalem Post, July 1993.
Investigative reporter Jim Hougan reports the incredulity of congressional investigators that Lockheed was the only large corporation not to have made a contribution to Nixon’s 1972 election campaign (Hougan, Spooks: The Haunting of America—The Private Use of Secret Agents [New York: William Morrow, 1978], 457–58).
Drinkhall, Wall Street Journal, April 18, 1980. Drinkhall also reported that “Helliwell reputedly was one of the paymasters for the ill-fated Bay of Pigs invasion in 1961,” a claim repeated in virtually every book dealing with Helliwell since that time (except my own). I have looked at dozens if not hundreds of CIA Bay of Pigs documents, many of them concerning financial payments to anti-Castro individuals and groups, and I have never seen any document involving either Helliwell or an unidentified cryptonym.
Pete Brewton, The Mafia, CIA and George Bush (1992), 296-97
Block and Weaver, All Is Clouded by Desire, 36-37; citing Robin Winks, Cloak & Gown: Scholars in the Secret War, 1939-1961 (New York: William Morrow, 1987), 377-78 (X-2 in Vienna).
Peter Truell and Larry Gurwin, False Profits: The Inside Story of BCCI, the World’s Most Corrupt Financial Empire (Boston: Houghton Mifflin, 1992), 384 (“ties”).
Block and Weaver, All Is Clouded by Desire, 86. Abbas Kassimali Gokal, whom British prosecutors accused of stealing $1.3 billion from BCCI, was a board member of the Inter Maritime Bank from 1978 through 1982. In 1997 Gokal was sentenced to 13 years by a UK court for his role in the BCCI fraud.
Truell and Gurwin, False Profits, 384. Truell and Gurwin claim that Hartmann went from Intermaritime to BCCI; the Kerry-Brown BCCI Report claims that Rappaport recruited Hartmann from BCCI/BCP for his own bank.
Block and Weaver, All Is Clouded by Desire, 85.
U.S. Congress. Senate, 102nd Cong., 2nd Sess. The BCCI Affair: A Report to the Senate Committee on Foreign Relations from Senator John Kerry, Chairman, and from Senator Hank Brown, Ranking Member, Subcommittee on Terrorism, Narcotics, and International Operations,… September 30, 1992, 1-2. Cited henceforth as the Kerry-Brown Report, 69.
Jane Hunter “Covert Operations: The Human Factor,” The Link , August 1992, Volume 25, Issue 3, 8, http://www.ameu.org/page.asp?iid=139&aid=183&pg=8.
Leonard Slater, The Pledge (New York: Pocket Books, 1971), 175.
Sindona had links to the Italian intelligence service SISMI, to drug traffickers like Rosario Gambino, and to the Nixon Administration. See Jonathan Marshall, Peter Dale Scott, and Jane Hunter, The Iran-Contra Connection: Secret Teams and Covert Operations in the Reagan Era (Boston: South End Press, 1987), 71, 73; Lernoux, In Banks We Trust, 178-79, 193-95, etc.
Block and Weaver, All Is Clouded by Desire, 36; citing Robin W. Winks, Cloak & Gown: Scholars in the Secret War, 1939-1961 (New York: William Morrow, 1987), 377-78.
Smith, OSS, 165.
Operation Safehaven began as a U.S. Treasury effort to trace the movements of stolen Nazi gold, and possibly implicate Nazi collaborators in America. Taken over by OSS X-2, it recuperated SS assets that were used instead to support former SS agents.
Anthony Cave Brown, The Secret War Report of the OSS / edited by Anthony Cave Brown (New York: Berkeley, 1976), 565-66.
Ronald Kessler, The Richest Man in the World (New York: Warner Books, 1986), 162, 300; Jonathan Beaty and S.C. Gwynne, The Outlaw Bank: A Wild Ride into the Secret Heart of BCCI (New York: Random House, 1993), 54, 80, 263-64.
Truell and Gurwin, False Profits, 83-87.
Beaty and Gwynn, 357.
Truell and Gurwin, False Profits, 373-77.
Olmsted’s intelligence connections dated back to wartime service on the staff of General Albert Wedemeyer in China, where he was in charge of clandestine operations and in that capacity worked with OSS. He was thus a senior figure in what I am tempted to call the OSS China connection, which united so many of the people who were prominent in Helliwell’s post-war global drug connection. We have already mentioned Helliwell himself, who was head of the Special Intelligence branch of OSS in Kunming before he created Sea Supply Corp in Bangkok. Willis Bird was the deputy chief of OSS China and then became the most important figure in Sea Supply after Helliwell’s return in 1951 from Bangkok to America. C.V Starr, later represented by Corcoran, opened his insurance empire in China to the creation of an OSS network outside the OSS-KMT cooperation agreement. See Richard Harris Smith, OSS: The Secret History of America’s First Central Intelligence Agency (Berkeley: University of California Press, 1972), 267 (Starr), 273 (Bird), 326 (Helliwell). But this is not the whole picture. Elsewhere I have dealt with the post-war activities of other members of the small OSS Detachment 202 under Paul Helliwell in Kunming: E. Howard Hunt, Ray Cline, Lou Conein, John Singlaub, and Mitchell WerBell. All of these men went on to develop post-war connections for the CIA with drug-traffickers: Hunt in Mexico, Cline in Taiwan, Conein in Vietnam, WerBell in Laos, and Singlaub with the World Anti-Communist League which Hunt and Cline had helped to create (Scott, Drugs, Oil, and War, 20, 207).
Block and Weaver, All Is Clouded by Desire, 41; cf. Block, Masters of Paradise, 191.
Block and Weaver, All Is Clouded by Desire, 41-42; Truell and Gurwin, False Profits, 40-43, etc.
Truell and Gurwin, False Profits, 123-24; cf. 128-29: Expanding over seven pages on these and many other intelligence connections, they asked whether the bank’s illegal acquisition of an American bank holding company, First American Bankshares, was not in fact serving the purposes of U.S. intelligence:
“No one can deny that virtually every major character in the takeover was connected in one way or another to U.S. intelligence: Olmsted who controlled the company [First American] for years; Middendorf, who headed the group that acquired it from him; Abedi, who arranged for clients of BCCI to buy the company from Middendorf’s group; [Mohammed Rahim Motaghi] Irvani,, the chairman of one of the dummy companies set up to carry out the acquisition; [his partner Richard] Helms, who advised Irvani; [former Saudi intelligence chief Kamal] Adham, the lead investor in Abedi’s group; [Clark] Clifford, who steered the deal through the regulatory maze and then became the chairman of the company….Can all this be a coincidence? Or is it possible that First American was affiliated with U.S. intelligence all along and that it was simply passed from one group of CIA associates to another, and then another? No proof has emerged that this is what happened, but it is certainly not a far-fetched theory.”
Jonathan Kwitny, The Crimes of Patriots (New York: Norton, 1987), 96.
Kwitny, The Crimes of Patriots, 162. BCCI also used Price Waterhouse as its auditor. In addition, BCCI and Nugan Hand used the same law firm and registered agent (Bruce Campbell & Company) in the Cayman Islands (Truell and Gurwin, False Profits, 125).
Kwitny, The Crimes of Patriots, 243.
Kwitny, The Crimes of Patriots, 334-35.
Trento, Prelude to Terror, 313-14.
Kwitny, The Crimes of Patriots, 207, 208.
James A. Nathan, “Dateline Australia: America’s Foreign Watergate?” Foreign Policy (Winter 1982-83), 183; quoted in Jonathan Marshall, Peter Dale Scott, and Jane Hunter, The Iran-Contra Connection: Secret Teams and Covert Operations in the Reagan Era (Boston: South End Press, 1987), 38.
Scott, The Road to 9/11, 126-27.
Thomas Goltz, Azerbaijan Diary: A Rogue Reporter’s Adventures in an Oil-Rich, War-Torn, Post-Soviet Republic (Armonk, NY: M. E. Sharpe, 1999), 272-75. Richard Secord was allegedly attempting also to sell Israeli arms, with the assistance of Israeli agent David Kimche, another associate of Oliver North. The mujahideen were recruited in Afghanistan by Gulbuddin Hekmatyar, the leading recipient of CIA assistance in Afghanistan in the 1980s, and most recently a leader of the al Qaeda-Taliban resistance to the U.S. and its client there, Hamid Karzai. See Scott, Drugs, Oil, and War, 7, 8, 20.
Loretta Napoleoni, Terror Incorporated: Tracing the Dollars Behind the Terror Networks (New York: Seven Stories Press, 2005), 90-97: “[IMU leader] Namangiani’s networks in Tajikistan and in Central Asia were used to smuggle opium from Afghanistan. It was partly thanks to Namangiani’s contacts in Chechnya that heroin reached Europe” (91)…. “It was thanks to the mediation of Chechen criminal groups that the KLA and the Albanian mafia managed to gain control of the transit of heroin in the Balkans” (96). Napoleoni does not mention Azerbaijan, which however lies between Uzbekistan and Chechnya.
“KLA Funding Tied To Heroin Profits,” Washington Times, 5/3/99.
Daniel Ellsberg with Kris Welch, KPFA, 8/26/06, http://wotisitgood4.blogspot.com/2006/10/ellsberg-hastert-got-suitcases-of-al.html .
Vanity Fair, September 2005. According to the ATC web site, “As one of the leading business associations in the United States, the American-Turkish Council (ATC) is dedicated to effectively strengthening U.S.-Turkish relations through the promotion of commercial, defense, technology, and cultural relations. Its diverse membership includes Fortune 500, U.S. and Turkish companies, multinationals, nonprofit organizations, and individuals with an interest in U.S.-Turkish relations.” It is thus comparable to the American Security Council, whose activities in 1963 are discussed in Scott, Deep Politics, e.g. 292.
Edmonds has been partially corroborated by Huseyin Baybasin, another Turkish heroin kingpin now in jail in Holland, in his book Trial by Fire: “I handled the drugs which came through the channel of the Turkish Consulate in England.” But as he adds: “I was with the Mafia but I was carrying this out with the same Mafia group in which the rulers of Turkey were part.” Baybasin claimed he was assisted by Turkish officers working for NATO in Belgium (“The Susurluk Legacy,” By Adrian Gatton, Druglink Magazine, Nov/Dec 2006, http://adriangatton.com/archive/1990_01_01_archive.html).
Marshall, Drug Wars, 55; citing Tad Szulc, “The Money Changer,” New Republic, April 10, 1976, 10-11.
See Scott, The War Conspiracy.
Peter Dale Scott, “The United States and the Overthrow of Sukarno, 1965-1967” Pacific Affairs (Vancouver, B.C.) 58.2 (Summer 1985), pp. 239-64.
AMPO (Japan), January 1974, 44 (Indonesia); David E. Kaplan and Alec Dubro, Yakuza [New York: Macmillan, 1986], 90 (Deak); Marshall, Drug Wars, 54-55 (Katayama, Kodama). Kodama and Sasakawa were both arrested by the U.S. for war crimes but not prosecuted. In 1941 Kodama had plotted the assassination of Japan’s Prime Minister Konoye by dynamite, to block his attempted peace negotiations with the U.S. Kodama then made a fortune in Shanghai during World War II, allegedly in part through his control of the drug traffic in conjunction with the kempeitai. Kodama and Sasakawa both became staunch supporters of the Asian People’s Anti-Communist League,that as we have seen has had persistent connections to the post-war Asian drug traffic.
Beaty and Gwynn, The Outlaw Bank, 48.
Seymour Hersh, The Price of Power: Kissinger in the White House (New York: Summit, 1983), 279, 290.
Dinges, The Condor Years,, 190-98.
Robert Parry, Secrecy & Privilege: Rise of the Bush Dynasty from Watergate to Iraq (Arlington, VA: Media Consortium, 2004), 112-38, etc.; Scott, Road to 9/11, 99-107. According to Parry, Michael Ledeen was also part of this effort.
HYPERLINK “http://en.wikipedia.org/wiki/Abdullah_%C3%87atl%C4%B1” \l “cite_ref-Diplo_3-1” \o “” “Turkey’s pivotal role in the international drug trade,” HYPERLINK “Le Monde diplomatique” Le Monde diplomatique (July 1998), HYPERLINK “http://mondediplo.com/1998/07/05turkey” http://mondediplo.com/1998/07/05turkey. Cf. Daniele Ganser, NATO’s Secret Armies: Operation Gladio and Terrorism in Western Europe (London: Frank Cass Publishers, 2005), 237-38. Author Claire Sterling attempted to blame the KGB for the assassination attempt, and her view that the KGB was the heart of what she called a global “terror network” was forced on CIA analysts by William Casey and Robert Gates (see final footnote below).
Iran-Contra Affair, Report of the Congressional Committees Investigating the Iran-Contra Affair, 100th Congress. 1st Session, H. Rept No 100-433, S. Rept No. 100-216, pp. 164, 166, 228, etc.
Block and Weaver, All Is Clouded by Desire, 95-116, etc. Burt Kanter, the co-founder of Castle Bank, was recurringly involved in Rappaport’s IMB-BONY dealings (Block and Weaver, 100, 102, 193, 105, 113).
Scott, Road to 9/11, 163-65, 351; Thomas Goltz, Azerbaijan Diary, 272-75.
Scott, Road to 9/11, 167-68, citing Michel Chossudovsky, “Macedonia: Washington’s Military-Intelligence Ploy,” Transnational Foundation for Peace and Future Research, http://www
Lernoux, In Banks We Trust, 72; cf. Mother Jones, March 1984.
Daniel Fineman, A Special Relationship: The United States and Military Government in Thailand, 1947-1958 (Honolulu: University of Hawai’i Press, 1997), 179-80; cf. FRUS, 1952-1954, 12, 1, 689-90.
Trento, The Secret History of the CIA, 410.
Report of the Congressional Committees Investigating the Iran-Contra Affair, 100th Congress. 1st Session, H. Rept No 100-433, S. Rept No. 100-216, p. 164.
Trento, Prelude to Terror, 283-84.
Scott, Road to 9/11, 52-53.
See Rowan Scarborough, Sabotage: America’s Enemies Within the CIA (Washington: Regnery, 2007); Kenneth R. Timmerman, Shadow Warriors: The Untold Story of Traitors, Saboteurs, and the Party of Surrender (New York: Crown/ Random House, 2007),
“It works like this: Blackwater, for example, will win a U.S. government contract; it will then subcontract with itself–that is, with Greystone–to do the job. From there, Greystone looks to its network of international affiliates, firms like Pizarro’s Grupo Tactico in Chile or ID Systems in Colombia, which maintain informal relationships with what are known in the trade as “briefcase recruiters”–individuals with connections to the local paramilitary scene” (Bruce Falconer and Daniel Schulman, “Blackwater’s world of warcraft,” Mother Jones, March-April 2008). Cf. Jeremy Scahill, Blackwater: The Rise of the World’s Most Powerful Mercenary Army (New York: Nation Books, 2008).
This false ideology was enforced even inside the CIA. Author Claire Sterling wrote a book called The Terror Network, claiming “that all major terrorist groups were controlled by the Soviet Union.” The book, with little credibility today, was warmly endorsed by then Secretary of State Alexander Haig, who passed it to William Casey, who presented its thesis to the Senate Select Committee on Intelligence. Casey also assigned top CIA terrorist analysts and Soviet experts to prepare a special national intelligence estimate, or SNIE, based on Sterling’s book. When the experts reported there was no merit to Sterling’s claims, Casey’s Deputy Director of Intelligence, Robert Gates, had their negative assessment rewritten and reversed by new low-level personnel who had just arrived in the Agency. See Mark Perry, Eclipse: The Last Days of the CIA (New York: William Morrow, 1992), 47-49, 319-320. Today Robert Gates is America’s Secretary of Defense.
Two senators claimed on Thursday that the Justice Department had secretly interpreted the so-called Patriot Act in a twisted way, enabling domestic surveillance activities that many members of Congress do not understand.
At the same time, Congress and the White House were rushing to enact legislation to prevent a lapse in several of the federal government’s investigative powers under the Patriot Act that were set to expire at midnight. The Senate passed the bill 72 to 23 late in the afternoon, and within hours the House approved it 250 to 153. In an unusual move, a White House spokesman said that President Obama, who was in Europe, would “direct the use” of an autopen machine to sign the bill into law without delay.
During the debate, Senator Ron Wyden, an Oregon Democrat and a member of the Intelligence Committee, said that the executive branch had come up with a secret legal theory about what it could collect under a provision of the Patriot Act that did not seem to dovetail with a plain reading of the text. “I want to deliver a warning this afternoon: When the American people find out how their government has secretly interpreted the Patriot Act, they will be stunned and they will be angry,” Mr. Wyden said. He invoked the public’s reaction to the illegal domestic spying that came to light in the mid-1970s, the Iran-contra affair, and the Bush administration’s program of surveillance without warrants.
Another member of the Intelligence Committee, Senator Mark Udall, Democrat of Colorado, backed Mr. Wyden’s account, saying, “Americans would be alarmed if they knew how this law is being carried out.”
The Obama administration declined to explain what the senators were talking about. Dean Boyd, a Justice Department spokesman, said that Congressional oversight committees and a special panel of national security judges — known as the FISA Court — were aware of how the executive branch was interpreting and using surveillance laws.
“These authorities are also subject to extensive oversight from the FISA Court, from Congress, from the executive branch,” Mr. Boyd said.
Mr. Wyden has long denounced the idea of “secret law” — classified memorandums and rulings about the meaning of surveillance law developed by executive branch officials and the FISA Court. He and Mr. Udall had proposed requiring the Justice Department to make public its official interpretation of what the Patriot Act means. The chairwoman of the Intelligence Committee, Dianne Feinstein, Democrat of California, agreed to hold a hearing on their concerns next month.
The two had also sponsored a proposal to tighten the circumstances in which one of the expiring provisions, known as Section 215, could be used. It allows the F.B.I. to obtain “any tangible things” — like business records about customers.
Mr. Udall criticized Section 215, saying it lets the government get private information about people without a link to a terrorism or espionage inquiry.
In a 2009 debate over the Patriot Act, another member of the Intelligence Committee, Russell Feingold, Democrat of Wisconsin, also hinted that Section 215 was being used in a secret way that, he said, “Congress and the American people deserve to know” about. He was defeated for re-election in 2010.
The business records section of the Patriot Act had been set to expire, along with provisions allowing the F.B.I. to obtain “roving” wiretap orders to follow suspects who change phone numbers, and to obtain national security wiretaps against noncitizen terrorism suspects who are not connected to any foreign power.
Congressional leaders had agreed to extend the provisions before they expired. But Senator Rand Paul, a libertarian-leaning Republican from Kentucky, initially blocked an expedited vote on the bill because he wanted Senate leaders to allow a vote on several amendments. The Senate majority leader, Harry Reid, Democrat of Nevada, allowed votes on two Paul amendments, which would have offered greater privacy protections for records involving gun sales and banking.
Dollar bears are getting nervous. Only a few weeks ago, the US currency was sliding towards record lows. It has since rebounded, a move some believe could herald a sustained recovery as the Federal Reserve pulls the plug on the cheap money it has pumped into financial markets.
Many investors remain short dollars, especially against Asian and commodity-linked currencies. But dollar bears are trimming positions before the end of June, when the Fed ends its second round of quantitative easing, dubbed “QE2”.
Since the Fed began buying bonds – its aim being to bring down borrowing costs and breathe life into the US recovery – the dollar has declined significantly. The effect was to flood the banking system with free reserves. Thus the dollar became an attractive way to fund “carry trades”, in which low-yielding currencies are sold to finance the purchase of higher-yielding assets such as equities, commodities and commodity-linked currencies.
The stock of money in the US has tripled from $844bn in August 2008, before the start of the Fed’s first round of quantitative easing, to more than $2,390bn.
“Currency dilution, perhaps more than any other single factor, has provided speculators with a convincing reason to sell the dollar on the global foreign exchange market,” says Michael Thompson, head of valuation and risk strategy at Standard & Poor’s.
Caught short? Dollar long and short positions “In our opinion, the conclusion of QE2 removes a great deal of the fundamental pressure that has been weighing on the dollar in recent years.”
Mr Thompson says this could trigger a wave of short covering as investors buy back the dollars they sold, a phenomenon that can signal the bottom of a downtrend. There are signs that this process is already under way.
Data from the Chicago Mercantile Exchange, often used as a proxy for hedge fund activity, show speculators reduced the value of their bets against the dollar by $8bn to $25.5bn in the week to May 17. This means bets against the dollar were at their lowest since January and down from record levels this month.
It is not just hedge funds that have been trimming their bets against the dollar. Mansoor Mohi-uddin, managing director of foreign exchange strategy at UBS, says money managers such as pension funds have also been reducing their positions in recent weeks.
This has been reflected in the price action on global currency markets. The dollar index, which tracks its progress against a basket of six leading currencies, has rallied nearly 5 per cent since hitting a 33-month low of 72.696 on May 4 and currently stands at 76.077.
The minutes of the Fed’s last policy meeting provided the trigger for the rebound. They laid out principles to guide monetary policy in the future, while assuring the market that QE2 would, as planned, stop at the end of this quarter.
Mr Mohi-uddin says that has prompted investors to consider not only the end of QE2, but also the Fed’s next steps to tighten monetary policy. These could include ceasing to reinvest the Fed’s maturing assets back into bond markets, the dropping of the phrase “extended period” of considerably low interest rates in the Fed’s policy statement and the first actual rise in the Fed’s main lending rate.
“This matters because currency markets continue to price in Fed policy staying super loose for the foreseeable future while other foreign central banks start to raise rates,” he says.
“The Fed’s latest communications show that the currency market is mistaken in assuming the Fed to be super-loose indefinitely.”
Mr Mohi-uddin believes the dollar has room to rally as the Fed’s resolution to end QE2 lessens demand for carry trades and improves the confidence of Asian central banks and reserve managers in the US currency.
Other factors have been pushing the dollar higher. The eurozone debt crisis and fears over global growth have been supportive, with investors drawn to the US currency and other havens such as Treasuries and the Swiss franc.
Lee Hardman, forex strategist at Bank of Tokyo-Mitsubishi UFJ, says the wrangling over legislation to raise the US debt ceiling was unnerving investors. “In these circumstances, the safe haven currencies of the dollar, Swiss franc and yen are likely to extend their outperformance in the coming months,” he says.
But, given the impasse over the US Treasury’s borrowing limit, not everyone is so upbeat on the dollar. If Congress does not act to increase the debt ceiling by early August, the US faces the theoretical prospect of defaulting on its debt.
Axel Merk, president and chief investment officer of Merk Investments, says irreparable harm may have been done to the dollar and its reserve status.
At the moment, the US government may roll over existing debt, but cannot issue new debt, he says. This has created a situation where fear may spread that there simply will not be a large enough supply of debt to meet investor demand.
Mr Merk’s concern is that the growing scarcity of Treasuries will force foreign central banks to deploy reserves outside the US government bond market.
“As foreign central banks gain operational experience in less liquid markets, they may not revert back to US Treasuries once the gridlock in Congress is resolved. They may accelerate their diversification away from the dollar.”
The impasse over the US debt ceiling may, counter-intuitively, have provided the dollar with support, as rising risk aversion boosted haven demand for the US currency, writes James Politi.
Technically the first vote in the US House of Representatives to resolve the issue is next week. But it is expected to fail. Republicans will vote against a proposal to raise the ceiling by $2,400bn without any spending cuts to show there is not enough support for Democrat spending plans.
The real vote to approve a debt ceiling increase will probably be in July, though Democrats would like to see it earlier.
When Oliver Stone’s movie JFK opened in December 1991 a huge PR campaign was mobilized against the film. Even progressives spoke out. Noam Chomsky wrote in support of the Warren Commission’s findings – in contrast Michael Parenti gave one of his highly acclaimed talks criticizing the lone assassin theory. The bitter questions that haunted defenders and critics alike was whether government agencies of a democratic country would do such a thing as assassinate an elected President.
In this talk Michael Parenti turns to that question first – he examines, in part one, what he calls “the gangster nature of the state.” In part two he goes over details of the assassination and critiques The Nation, The Progressive, Chomsky and Cockburn. He spoke in Berkeley, CA, on the 30th anniversary of the JFK assassination.
This is one of many “standing ovations” talks by Parenti. The master for this program was lost and this appears to be the only copy of the original recording.
Nazis depended on the willingness of the French police, industrialists and managers to carry out their bidding
The case illustrates the continued sensitivity here about the German occupation, in which Hitler imposed his will on the French nation from 1940 to 1944, turning the country into an appendage of the Nazi war machine. The Germans depended in large measure on the willingness of the French police, industrialists and managers to carry out their bidding.
On a more fundamental basis, millions of people faced regular choices about whether or how far to compromise with the occupiers to survive. That makes black-and-white assessments of many actions difficult.
Charles J. Dunlap, JR.
From Parameters, Winter 1992-93, pp. 2-20.
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The letter that follows takes us on a darkly imagined excursion into the future. A military coup has taken place in the United States–the year is 2012–and General Thomas E. T. Brutus, Commander-in-Chief of the Unified Armed Forces of the United States, now occupies the White House as permanent Military Plenipotentiary. His position has been ratified by a national referendum, though scattered disorders still prevail and arrests for acts of sedition are underway. A senior retired officer of the Unified Armed Forces, known here simply as Prisoner 222305759, is one of those arrested, having been convicted by court-martial for opposing the coup. Prior to his execution, he is able to smuggle out of prison a letter to an old War College classmate discussing the “Origins of the American Military Coup of 2012.” In it, he argues that the coup was the outgrowth of trends visible as far back as 1992. These trends were the massive diversion of military forces to civilian uses, the monolithic unification of the armed forces, and the insularity of the military community. His letter survives and is here presented verbatim.
It goes without saying (I hope) that the coup scenario above is purely a literary device intended to dramatize my concern over certain contemporary developments affecting the armed forces, and is emphatically not a prediction. — The Author
Dear Old Friend,
It’s hard to believe that 20 years have passed since we graduated from the War College! Remember the great discussions, the trips, the parties, the people? Those were the days!!! I’m not having quite as much fun anymore. You’ve heard about the Sedition Trials? Yeah, I was one of those arrested–convicted of “disloyal statements,” and “using contemptuous language towards officials.” Disloyal? No. Contemptuous? You bet! With General Brutus in charge it’s not hard to be contemptuous.
I’ve got to hand it to Brutus, he’s ingenious. After the President died he somehow “persuaded” the Vice President not to take the oath of office. Did we then have a President or not? A real “Constitutional Conundrum” the papers called it. Brutus created just enough ambiguity to convince everyone that as the senior military officer, he could–and should–declare himself Commander-in-Chief of the Unified Armed Forces. Remember what he said? “Had to fill the power vacuum.” And Brutus showed he really knew how to use power: he declared martial law, “postponed” the elections, got the Vice President to “retire,” and even moved into the White House! “More efficient to work from there,” he said. Remember that?
When Congress convened that last time and managed to pass the Referendum Act, I really got my hopes up. But when the Referendum approved Brutus’s takeover, I knew we were in serious trouble. I caused a ruckus, you know, trying to organize a protest. Then the Security Forces picked me up. My quickie “trial” was a joke. The sentence? Well, let’s just say you won’t have to save any beer for me at next year’s reunion. Since it doesn’t look like I’ll be seeing you again, I thought I’d write everything down and try to get it to you.
I am calling my paper the “Origins of the American Military Coup of 2012.” I think it’s important to get the truth recorded before they rewrite history. If we’re ever going to get our freedom back, we’ve got to understand how we got into this mess. People need to understand that the armed forces exist to support and defend government, not to be the government. Faced with intractable national problems on one hand, and an energetic and capable military on the other, it can be all too seductive to start viewing the military as a cost-effective solution. We made a terrible mistake when we allowed the armed forces to be diverted from their original purpose.
I found a box of my notes and clippings from our War College days–told my keepers I needed them to write the confession they want. It’s amazing; looking through these old papers makes me realize that even back in 1992 we should have seen this coming. The seeds of this outrage were all there; we just didn’t realize how they would grow. But isn’t that always the way with things like this? Somebody once said that “the true watersheds in human affairs are seldom spotted amid the tumult of headlines broadcast on the hour.” And we had a lot of headlines back in the ’90s to distract us: The economy was in the dumps, crime was rising, schools were deteriorating, drug use was rampant, the environment was in trouble, and political scandals were occurring almost daily. Still, there was some good news: the end of the Cold War as well as America’s recent victory over Iraq.
All of this and more contributed to the situation in which we find ourselves today: a military that controls government and one that, ironically, can’t fight. It wasn’t any single cause that led us to this point. Instead, it was a combination of several different developments, the beginnings of which were evident in 1992. Here’s what I think happened:
Americans became exasperated with democracy. We were disillusioned with the apparent inability of elected government to solve the nation’s dilemmas. We were looking for someone or something that could produce workable answers. The one institution of government in which the people retained faith was the military. Buoyed by the military’s obvious competence in the First Gulf War, the public increasingly turned to it for solutions to the country’s problems. Americans called for an acceleration of trends begun in the 1980s: tasking the military with a variety of new, nontraditional missions, and vastly escalating its commitment to formerly ancillary duties.
Though not obvious at the time, the cumulative effect of these new responsibilities was to incorporate the military into the political process to an unprecedented degree. These additional assignments also had the perverse effect of diverting focus and resources from the military’s central mission of combat training and warfighting. Finally, organizational, political, and societal changes served to alter the American military’s culture. Today’s military is not the one we knew when we graduated from the War College.
Let me explain how I came to these conclusions. In 1992 not very many people would’ve thought a military coup d’etat could ever happen here. Sure, there were eccentric conspiracy theorists who saw the Pentagon’s hand in the assassination of President Kennedy, President Nixon’s downfall, and similar events. But even the most avid believers had to admit that no outright military takeover had ever occurred before now. Heeding Washington’s admonitions in his Farewell address about the dangers of overgrown military establishments, Americans generally viewed their armed forces with a judicious mixture of respect and wariness. For over two centuries that vigilance was rewarded, and most Americans came to consider the very notion of a military coup preposterous. Historian Andrew Janos captured the conventional view of the latter half of the 20th century in this clipping I saved:
A coup d’etat in the United States would be too fantastic to contemplate, not only because few would actually entertain the idea, but also because the bulk of the people are strongly attached to the prevailing political system and would rise in defense of a political leader even though they might not like him. The environment most hospitable to coups d’etat is one in which political apathy prevails as the dominant style.
However, when Janos wrote that back in 1964, 61.9 percent of the electorate voted. Since then voter participation has steadily declined. By 1988 only 50.1 percent of the eligible voters cast a ballot. Simple extrapolation of those numbers to last spring’s Referendum would have predicted almost exactly the turnout. It was precisely reversed from that of 1964: 61.9 percent of the electorate did not vote.
America’s societal malaise was readily apparent in 1992. Seventy-eight percent of Americans believed the country was on the “wrong track.” One researcher declared that social indicators were at their lowest level in 20 years and insisted “something [was] coming loose in the social infrastructure.” The nation was frustrated and angry about its problems.
America wanted solutions and democratically elected government wasn’t providing them. The country suffered from a “deep pessimism about politicians and government after years of broken promises.” David Finkle observed in The Washington Post Magazine that for most Americans “the perception of government is that it has evolved from something that provides democracy’s framework into something that provides obstacles, from something to celebrate into something to ignore.” Likewise, politicians and their proposals seemed stale and repetitive. Millions of voters gave up hope of finding answers. The “environment of apathy” Janos characterized as a precursor to a coup had arrived.
Unlike the rest of government the military enjoyed a remarkably steady climb in popularity throughout the 1980s and early 1990s. And indeed it had earned the admiration of the public. Debilitated by the Vietnam War, the US military set about reinventing itself. As early as 1988 U.S. News & World Report heralded the result: “In contrast to the dispirited, drug-ravaged, do-your-own-thing armed services of the ’70s and early ’80s, the US military has been transformed into a fighting force of gung-ho attitude, spit-shined discipline, and ten-hut morale.” After the US military dealt Iraq a crushing defeat in the First Gulf War, the ignominy of Vietnam evaporated.
When we graduated from the War College in 1992, the armed forces were the smartest, best educated, and best disciplined force in history. While polls showed that the public invariably gave Congress low marks, a February 1991 survey disclosed that “public confidence in the military soar[ed] to 85 percent, far surpassing every other institution in our society.” The armed forces had become America’s most–and perhaps only–trusted arm of government.
Assumptions about the role of the military in society also began to change. Twenty years before we graduated, the Supreme Court confidently declared in Laird v. Tatum that Americans had a “traditional and strong resistance to any military intrusion into civilian affairs.” But Americans were now rethinking the desirability and necessity of that resistance. They compared the military’s principled competence with the chicanery and ineptitude of many elected officials, and found the latter wanting.
Commentator James Fallows expressed the new thinking in an August 1991 article in Atlantic magazine. Musing on the contributions of the military to American society, Fallows wrote: “I am beginning to think that the only way the national government can do anything worthwhile is to invent a security threat and turn the job over to the military.” He elaborated on his reasoning:
According to our economic and political theories, most agencies of the government have no special standing to speak about the general national welfare. Each represents a certain constituency; the interest groups fight it out. The military, strangely, is the one government institution that has been assigned legitimacy to act on its notion of the collective good. “National defense” can make us do things–train engineers, build highways–that long-term good of the nation or common sense cannot.
About a decade before Fallows’ article appeared, Congress initiated the use of “national defense” as a rationale to boost military participation in an activity historically the exclusive domain of civilian government: law enforcement. Congress concluded that the “rising tide of drugs being smuggled into the United States . . . present[ed] a grave threat to all Americans.” Finding the performance of civilian law enforcement agencies in counteracting that threat unsatisfactory, Congress passed the Military Cooperation with Civilian Law Enforcement Agencies Act of 1981. In doing so Congress specifically intended to force reluctant military commanders to actively collaborate in police work.
This was a historic change of policy. Since the passage of the Posse Comitatus Act in 1878, the military had distanced itself from law enforcement activities. While the 1981 law did retain certain limits on the legal authority of military personnel, its net effect was to dramatically expand military participation in anti-drug efforts. By 1991 the Department of Defense was spending $1.2 billion on counternarcotics crusades. Air Force surveillance aircraft were sent to track airborne smugglers; Navy ships patrolled the Caribbean looking for drug-laden vessels; and National Guardsmen were searching for marijuana caches near the borders. By 1992 “combatting” drug trafficking was formally declared a “high national security mission.”
It wasn’t too long before 21st-century legislators were calling for more military involvement in police work. Crime seemed out of control. Most disturbing, the incidence of violent crime continued to climb. Americans were horrified and desperate: a third even believed vigilantism could be justified. Rising lawlessness was seen as but another example of the civilian political leadership’s inability to fulfill government’s most basic duty to ensure public safety. People once again wanted the military to help.
Hints of an expanded police function were starting to surface while we were still at the War College. For example, District of Columbia National Guardsmen established a regular military presence in high-crime areas. Eventually, people became acclimated to seeing uniformed military personnel patrolling their neighborhood. Now troops are an adjunct to almost all police forces in the country. In many of the areas where much of our burgeoning population of elderly Americans live–Brutus calls them “National Security Zones”–the military is often the only law enforcement agency. Consequently, the military was ideally positioned in thousands of communities to support the coup.
Concern about crime was a major reason why General Brutus’s actions were approved in the Referendum. Although voter participation by the general public was low, older Americans voted at a much higher rate. Furthermore, with the aging of the baby boom generation, the block of American voters over 45 grew to almost 53 percent of the voters by 2010. This wealthy, older electorate welcomed an organization which could ensure their physical security. When it counted, they backed Brutus in the Referendum–probably the last votes they’ll ever cast.
The military’s constituency was larger than just the aged. Poor Americans of all ages became dependent upon the military not only for protection against crime, but also for medical care. Again we saw the roots of this back in 1992. First it was the barely defeated proposal to use veterans’ hospitals to provide care for the non-veteran poor. Next were calls to deploy military medical assets to relieve hard-pressed urban hospitals. As the number of uninsured and underinsured grew, the pressure to provide care became inexorable. Now military hospitals serve millions of new, non-military patients. Similarly, a proposal to use so-called “underutilized” military bases as drug rehabilitation centers was implemented on a massive scale.
Even the youngest citizens were co-opted. During the 1990s the public became aware that military officers had the math and science backgrounds desperately needed to revitalize US education. In fact, programs involving military personnel were already underway while we were at the War College. We now have an entire generation of young people who have grown up comfortable with the sight of military personnel patrolling their streets and teaching in their classrooms.
As you know, it wasn’t just crises in public safety, medical care, and education that the military was tasked to mend. The military was also called upon to manage the cleanup of the nation’s environmental hazards. By 1992 the armed services were deeply involved in this arena, and that involvement mushroomed. Once the military demonstrated its expertise, it wasn’t long before environmental problems were declared “national security threats” and full responsibility devolved to the armed forces.
Other problems were transformed into “national security” issues. As more commercial airlines went bankrupt and unprofitable air routes dropped, the military was called upon to provide “essential” air transport to the affected regions. In the name of national defense, the military next found itself in the sealift business. Ships purchased by the military for contingencies were leased, complete with military crews, at low rates to US exporters to help solve the trade deficit. The nation’s crumbling infrastructure was also declared a “national security threat.” As was proposed back in 1991, troops rehabilitated public housing, rebuilt bridges and roads, and constructed new government buildings. By late 1992, voices in both Congress and the military had reached a crescendo calling for military involvement across a broad spectrum of heretofore purely civilian activities. Soon, it became common in practically every community to see crews of soldiers working on local projects. Military attire drew no stares.
The revised charter for the armed forces was not confined to domestic enterprises. Overseas humanitarian and nation-building assignments proliferated. Though these projects have always been performed by the military on an ad hoc basis, in 1986 Congress formalized that process. It declared overseas humanitarian and civic assistance activities to be “valid military missions” and specifically authorized them by law. Fueled by favorable press for operations in Iraq, Bangladesh, and the Philippines during the early 1990s, humanitarian missions were touted as the military’s “model for the future.” That prediction came true. When several African governments collapsed under AIDS epidemics and famines around the turn of the century, US troops–first introduced to the continent in the 1990s–were called upon to restore basic services. They never left. Now the US military constitutes the de facto government in many of those areas. Once again, the first whisperings of such duties could be heard in 1992.
By the year 2000 the armed forces had penetrated many vital aspects of American society. More and more military officers sought the kind of autonomy in these civilian affairs that they would expect from their military superiors in the execution of traditional combat operations. Thus began the inevitable politicization of the military. With so much responsibility for virtually everything government was expected to do, the military increasingly demanded a larger role in policymaking. But in a democracy policymaking is a task best left to those accountable to the electorate. Nonetheless, well- intentioned military officers, accustomed to the ordered, hierarchical structure of military society, became impatient with the delays and inefficiencies inherent in the democratic process. Consequently, they increasingly sought to avoid it. They convinced themselves that they could more productively serve the nation in carrying out their new assignments if they accrued to themselves unfettered power to implement their programs. They forgot Lord Acton’s warning that “all power corrupts, and absolute power corrupts absolutely.”
Congress became their unwitting ally. Because of the popularity of the new military programs–and the growing dependence upon them–Congress passed the Military Plenipotentiary Act of 2005. This legislation was the legacy of the Goldwater-Nichols Defense Reorganization Act of 1986. Among many revisions, Goldwater-Nichols strengthened the office of the Chairman of the Joint Chiefs of Staff and mandated numerous changes intended to increase “jointness” in the armed services. Supporters of the Military Plenipotentiary Act argued that unity of command was critical to the successful management of the numerous activities now considered “military” operations. Moreover, many Congressmen mistakenly believed that Goldwater-Nichols was one of the main reasons for the military’s success in the First Gulf War. They viewed the Military Plenipotentiary Act as an enhancement of the strengths of Goldwater-Nichols.
In passing this legislation Congress added greater authority to the military’s top leadership position. Lulled by favorable experiences with Chairmen like General Colin Powell, Congress saw little danger in converting the office of the Chairman of the Joint Chiefs of Staff into the even more powerful Military Plenipotentiary. No longer merely an advisor, the Military Plenipotentiary became a true commander of all US services, purportedly because that status could better ameliorate the effects of perceived interservice squabbling. Despite warnings found in the legislative history of Goldwater-Nichols and elsewhere, enormous power was concentrated in the hands of a single, unelected official. Unfortunately, Congress presumed that principled people would always occupy the office. No one expected a General Brutus would arise.
The Military Plenipotentiary was not Congress’s only structural change in military governance. By 2007 the services were combined to form the Unified Armed Forces. Recall that when we graduated from the War College greater unification was being seriously suggested as an economy measure. Eventually that consideration, and the conviction that “jointness” was an unqualified military virtue, led to unification. But unification ended the creative tension between the services. Besides rejecting the operational logic of separate services, no one seemed to recognize the checks-and-balances function that service separatism provided a democracy obliged to maintain a large, professional military establishment. The Founding Fathers knew the importance of checks and balances in controlling the agencies of government: “Ambition must be made to counteract ambition. . . . Experience has taught mankind the necessity of auxiliary controls . . . [including] supplying opposite and rival interests.”
Ambition is a natural trait of military organizations and their leaders. Whatever might have been the inefficiencies of separate military services, their very existence served to counteract the untoward desires of any single service. The roles and missions debates and other arguments, once seen as petty military infighting, also provided an invaluable forum for competitive analysis of military doctrine. Additionally, they served to ensure that unscrupulous designs by a segment of the military establishment were ruthlessly exposed. Once the services were unified, the impetus to do so vanished, and the authority of the military in relation to the other institutions of government rose. Distended by its pervasive new duties, monolithic militarism came to dominate the Darwinian political environment of 21st-century America.
Why did the uniformed leadership of our day acquiesce to this transformation of the military? Much of the answer can be traced to the budget showdowns of the early 1990s. The collapse of the Soviet Union left the US military without an easily articulated rationale for large defense budgets. Billions in cuts were sought. Journalist Bruce Auster put it bluntly: “Winning a share of the budget wars . . . require[s] that the military find new missions for a post-Cold War world that is devoid of clear military threats.” Capitulating, military leaders embraced formerly disdained assignments. As one commentator cynically observed, “the services are eager to talk up nontraditional, budget-justifying roles.” The Vietnam-era aphorism, “It’s a lousy war, but it’s the only one we’ve got,” was resuscitated.
Still, that doesn’t completely explain why in 2012 the military leadership would succumb to a coup. To answer that question fully requires examination of what was happening to the officer corps as the military drew down in the 1980s and 1990s. Ever since large peacetime military establishments became permanent features after World War II, the great leveler of the officer corps was the constant influx of officers from the Reserve Officers Training Corps program. The product of diverse colleges and universities throughout the United States, these officers were a vital source of liberalism in the military services.
By the late 1980s and early 1990s, however, that was changing. Force reductions decreased the number of ROTC graduates the services accepted. Although General Powell called ROTC “vital to democracy,” 62 ROTC programs were closed in 1991 and another 350 were considered for closure. The numbers of officers produced by the service academies also fell, but at a significantly slower pace. Consequently, the proportion of academy graduates in the officer corps climbed. Academy graduates, along with graduates of such military schools as the Citadel, Virginia Military Institute, and Norwich University, tended to feel a greater homogeneity of outlook than, say, the pool of ROTC graduates at large, with the result that as the proportion of such graduates grew, diversity of outlook overall diminished to some degree.
Moreover, the ROTC officers that did remain increasingly came from a narrower range of schools. Focusing on the military’s policy to exclude homosexuals from service, advocates of “political correctness” succeeded in driving ROTC from the campuses of some of our best universities. In many instances they also prevailed in barring military recruiters from campus. Little thought was given the long-term consequences of limiting the pool from which our military leadership was drawn. The result was a much more uniformly oriented military elite whose outlook was progressively conservative.
Furthermore, well-meaning attempts at improving service life led to the unintended insularity of military society, representing a return to the cloistered life of the pre-World War II armed forces. Military bases, complete with schools, churches, stores, child care centers, and recreational areas, became never-to-be-left islands of tranquillity removed from the chaotic, crime-ridden environment outside the gates. As one reporter put it in 1991: “Increasingly isolated from mainstream America, today’s troops tend to view the civilian world with suspicion and sometimes hostility.” Thus, a physically isolated and intellectually alienated officer corps was paired with an enlisted force likewise distanced from the society it was supposed to serve. In short, the military evolved into a force susceptible to manipulation by an authoritarian leader from its own select ranks.
What made this all the more disheartening was the wretched performance of our forces in the Second Gulf War. Consumed with ancillary and nontraditional missions, the military neglected its fundamental raison d’etre. As the Supreme Court succinctly put it more than a half century ago, the “primary business of armies and navies [is] to fight or be ready to fight wars should the occasion arise.” When Iranian armies started pouring into the lower Gulf states in 2010, the US armed forces were ready to do anything but fight.
Preoccupation with humanitarian duties, narcotics interdiction, and all the rest of the peripheral missions left the military unfit to engage an authentic military opponent. Performing the new missions sapped resources from what most experts agree was one of the vital ingredients to victory in the First Gulf War: training. Training is, quite literally, a zero-sum game. Each moment spent performing a nontraditional mission is one unavailable for orthodox military exercises. We should have recognized the grave risk. In 1991 The Washington Post reported that in “interview after interview across the services, senior leaders and noncommissioned officers stressed that they cannot be ready to fight without frequent rehearsals of perishable skills.”
The military’s anti-drug activities were a big part of the problem. Oh sure, I remember the facile claims of exponents of the military’s counternarcotics involvement as to what “valuable” training it provided. Did anyone really think that crew members of an AWACS–an aircraft designed to track high-performance military aircraft in combat–significantly improved their skills by hours of tracking slow-moving light planes? Did they seriously imagine that troops enhanced combat skills by looking for marijuana under car seats? Did they truly believe that crews of the Navy’s sophisticated antiair and anti-submarine ships received meaningful training by following lumbering trawlers around the Caribbean? Tragically, they did.
The problem was exacerbated when political pressures exempted the Guard and the Reserves from the harshest effects of the budgetary cutbacks of the early 1990s. The First Gulf War demonstrated that modern weapons and tactics were simply too complex for part-time soldiers to master during their allotted drill periods, however well motivated. Still, creative Guard and Reserve defenders contrived numerous civic-action and humanitarian assignments and sold them as “training.” Left unexplained was how such training was supposed to fit with military strategies that contemplated short, violent, come-as-you-are expeditionary wars. Nice-to-have Guard and Reserve support-oriented programs prevailed at the expense of critical active-duty combat capabilities.
Perhaps even more damaging than the diversion of resources was the assault on the very ethos of military service. Rather than bearing in mind the Supreme Court’s admonition to focus on warfighting, the military was told to alter its purpose. Former Secretary of State James Baker typified the trendy new tone in remarks about the military’s airlift of food and medicine to the former Soviet republics in early 1992. He said the airlift would “vividly show the peoples of the former Soviet Union that those that once prepared for war with them now have the courage and the conviction to use their militaries to say, `We will wage a new peace.'”
In truth militaries ought to “prepare for war” and leave the “peace waging” to those agencies of government whose mission is just that. Nevertheless, such pronouncements–seconded by military leaders–became the fashionable philosophy. The result? People in the military no longer considered themselves warriors. Instead, they perceived themselves as policemen, relief workers, educators, builders, health care providers, politicians–everything but warfighters. When these philanthropists met the Iranian 10th Armored Corps near Daharan during the Second Gulf War, they were brutally slaughtered by a military which had not forgotten what militaries were supposed to do or what war is really all about.
The devastation of the military’s martial spirit was exemplified by its involvement in police activities. Inexplicably, we ignored the deleterious effect on combat motivation suffered by the Israeli Defense Forces as a result of their efforts to police the West Bank and Gaza. Few seemed to appreciate the fundamental difference between the police profession and the profession of arms. As Richard J. Barnet observed in The New Yorker, “The line between police action and a military operation is real. Police derive their power from their acceptance as `officers of the law’; legitimate authority, not firepower, is the essential element.”
Police organizations are understandably oriented toward the studied restraint necessary for the end sought: a judicial conviction. As one Drug Enforcement Administration agent noted: “The military can kill people better than we can [but] when we go to a jungle lab, we’re not there to move onto the target by fire and maneuver to destroy the enemy. We’re there to arrest suspects and seize evidence.” If military forces are inculcated with the same spirit of restraint, combat performance is threatened. Moreover, law enforcement is also not just a form of low-intensity conflict. In low-intensity conflict, the military aim is to win the will of the people, a virtually impossible task with criminals “motivated by money, not ideology.”
Humanitarian missions likewise undermined the military’s sense of itself. As one Navy officer gushed during the 1991 Bangladesh relief operation, “It’s great to be here doing the opposite of a soldier.” While no true soldier relishes war, the fact remains that the essence of the military is warfighting and preparation for the same. What journalist Barton Gellman has said of the Army can be extrapolated to the military as a whole: it is an “organization whose fighting spirit depends . . . heavily on tradition.” If that tradition becomes imbued with a preference for “doing the opposite of a soldier,” fighting spirit is bound to suffer. When we first heard editorial calls to “pacify the military” by involving it in civic projects, we should have given them the forceful rebuke they deserved.
Military analyst Harry Summers warned back in ’91 that when militaries lose sight of their purpose, catastrophe results. Citing a study of pre-World War II Canadian military policy as it related to the subsequent battlefield disasters, he observed that instead of using the peacetime interregnum to hone their military skills, senior Canadian military officers sought out civilian missions to justify their existence. When war came they were woefully unprepared. Instead of protecting their soldiers’ lives they led them to their deaths. In today’s post-Cold War peacetime environment, this trap again looms large. . . . Some today within the US military are also searching for relevance, with draft doctrinal manuals giving touchy-feely prewar and postwar civil operations equal weight with warfighting. This is an insidious mistake.
We must remember that America’s position at the end of the Cold War had no historical precedent. For the first time the nation–in peacetime–found itself with a still-sizable, professional military establishment that was not preoccupied with an overarching external threat. Yet the uncertainties in the aftermath of the Cold War limited the extent to which those forces could be safely downsized. When the military was then obliged to engage in a bewildering array of nontraditional duties to further justify its existence, it is little wonder that its traditional apolitical professionalism eventually eroded.
Clearly, the curious tapestry of military authoritarianism and combat ineffectiveness that we see today was not yet woven in 1992. But the threads were there. Knowing what I know now, here’s the advice I would have given the War College Class of 1992 had I been their graduation speaker:
* Demand that the armed forces focus exclusively on indisputably military duties. We must not diffuse our energies away from our fundamental responsibility for warfighting. To send ill-trained troops into combat makes us accomplices to murder.
* Acknowledge that national security does have economic, social, educational, and environmental dimensions, but insist that this doesn’t necessarily mean the problems in those areas are the responsibility of the military to correct. Stylishly designating efforts to solve national ills as “wars” doesn’t convert them into something appropriate for the employment of military forces.
* Readily cede budgetary resources to those agencies whose business it is to address the non-military issues the armed forces are presently asked to fix. We are not the DEA, EPA, Peace Corps, Department of Education, or Red Cross–nor should we be. It has never been easy to give up resources, but in the long term we–and the nation–will be better served by a smaller but appropriately focused military.
* Divest the defense budget of perception-skewing expenses. Narcotics interdiction, environmental cleanup, humanitarian relief, and other costs tangential to actual combat capability should be assigned to the budgets of DEA, EPA, State, and so forth. As long as these expensive programs are hidden in the defense budget, the taxpayer understandably–but mistakenly–will continue to believe he’s buying military readiness.
* Continue to press for the elimination of superfluous, resource-draining Guard and Reserve units. Increase the training tempo, responsibilities, and compensation of those that remain.
* Educate the public to the sophisticated training requirements occasioned by the complexities of modern warfare. It’s imperative we rid the public of the misperception that soldiers in peacetime are essentially unemployed and therefore free to assume new missions.
* Resist unification of the services not only on operational grounds, but also because unification would be inimical to the checks and balances that underpin democratic government. Slow the pace of fiscally driven consolidation so that the impact on less quantifiable aspects of military effectiveness can be scrutinized.
* Assure that officer accessions from the service academies correspond with overall force reductions (but maintain separate service academies) and keep ROTC on a wide diversity of campuses. If necessary, resort to litigation to maintain ROTC campus diversity.
* Orient recruiting resources and campaigns toward ensuring that all echelons of society are represented in the military, without compromising standards. Accept that this kind of recruiting may increase costs. It’s worth it.
* Work to moderate the base-as-an-island syndrome by providing improved incentives for military members and families to assimilate into civilian communities. Within the information programs for our force of all-volunteer professionals (increasingly US-based), strengthen the emphasis upon such themes as the inviolability of the Constitution, ascendancy of our civilian leadership over the military, and citizens’ responsibilities.
Finally, I would tell our classmates that democracy is a fragile institution that must be continuously nurtured and scrupulously protected. I would also tell them that they must speak out when they see the institution threatened; indeed, it is their duty to do so. Richard Gabriel aptly observed in his book To Serve with Honor that when one discusses dissent, loyalty, and the limits of military obligations, the central problem is that the military represents a threat to civil order not because it will usurp authority, but because it does not speak out on critical policy decisions. The soldier fails to live up to his oath to serve the country if he does not speak out when he sees his civilian or military superiors executing policies he feels to be wrong.
Gabriel was wrong when he dismissed the military’s potential to threaten civil order, but he was right when he described our responsibilities. The catastrophe that occurred on our watch took place because we failed to speak out against policies we knew were wrong. It’s too late for me to do any more. But it’s not for you.
1. The Twenty-fifth Amendment to the Constitution provides that in the case of “death . . . the Vice President shall become the President.” But Section 1 of Article II requires the taking of the oath before “enter[ing] the Execution of his Office.”
2. Daniel J. Boorstin, “History’s Hidden Turning Points,” U.S. News & World Report, 22 April 1991, p. 52.
3. Oliver Stone’s movie, JFK, is one example. See Joel Achenbach, “JFK Conspiracy: Myth vs. Facts,” The Washington Post, 28 February 1992, p. C5.
4. See Len Colodny and Robert Gettlin, Silent Coup (New York: St. Martin’s, 1991).
5. George Washington in his “Farewell Address” dated 19 September 1796 counseled: “Overgrown military establishments . . . under any form of government are inauspicious to liberty and . . . are to be regarded as particularly hostile to republican liberty.” As quoted in The Annals of America (Chicago: Encyclopedia Britannica, 1976), p. 609.
6. Author Geoffrey Perret expressed the traditional view as follows: “The antimilitaristic side of the American character is forever on guard. Americans are so suspicious of military ambition that even when the armed forces win wars they are criticized as robustly as if they had lost them.” A Country Made By War (New York: Vintage, 1989), p. 560.
7. Andrew C. Janos, “The Seizure of Power: A Study of Force and Popular Consent,” Research Monograph No. 16, Center for International Studies, Princeton University, 1964, p. 39.
8. Mark S. Hoffman, ed., The World Almanac & Book of Facts 1991 (New York: Pharo Books, 1990), p. 426; Royce Crocker, Voter Registration and Turnout 1948-1988, Library of Congress, Congressional Research Service Report No. 89-179 (Washington: LOC, 1989), p. 11.
9. E. J. Dionne, Jr., “Altered States: The Union & the Campaign,” The Washington Post, 26 January 1992, p. C1. Fordham University researcher Marc Miringoff reports that the Index of Social Indicators fell to its lowest point in 20 years. He describes the Index, which is an amalgamation of social and economic data from government sources, as “sort of a Dow Jones of the national soul.” See Paul Taylor, “`Dow Jones of the National Soul’ Sours,” The Washington Post, 16 January 1992, p. A25. The nation’s frustration was the cause, according to columnist George F. Will, of a rising level of collective “national stress.” George F. Will, “Stressed Out in America,” The Washington Post, 16 January 1992, p. A27. See also Charles Krauthammer, “America’s Case of the Sulks,” The Washington Post, 19 January 1992, p. C7.
10. A 1989 Harris poll revealed that 53% of Americans believed that Congress was not effectively fulfilling its responsibilities. See Robert R. Ivany, “Soldiers and Legislators: Common Mission,” Parameters, 21 (Spring 1991), 47.
11. Mortimer B. Zuckerman, “Behind Our Loss of Faith,” U.S. News & World Report, 16 March 1992, p. 76. Many believed that democracy’s promise didn’t include them. Ninety-one percent of Americans reported that the “group with too little influence in government is people like themselves.” See “Harper’s Index,” Harper’s Magazine, January 1991, p. 17.
12. David Finkle, “The Greatest Democracy on Earth,” The Washington Post Magazine, 16 February 1992, p. 16. Forty-three percent of those who failed to vote didn’t see any important differences between the two major parties. See “Harper’s Index,” Harper’s Magazine, March 1992, p. 13. One in eight Americans was so pessimistic as to conclude that the country’s domestic problems were “beyond solving.” “Harper’s Index,” Harper’s Magazine, October 1991, p. 15.
13. A ten-year rise in public confidence was reported by Tom Morganthau, et al., in “The Military’s New Image,” Newsweek, 11 March 1991, p. 50.
14. Michael Satchell, et al., “The Military’s New Stars,” U.S. News & World Report, 18 April 1988, p. 33.
15. A survey of 163 new Army brigadier generals revealed that their IQ was in the 92nd percentile of the population. See Bruce W. Nelan, “Revolution in Defense,” Time, 18 March 1991, p. 25. In many instances the curricula vitae of military personnel was more impressive than that of their civilian counterparts. For example, over 88% of brigadier generals had an advanced degree compared with 19% of top civilian business leaders. See David Gergen, “America’s New Heroes,” U.S. News & World Report, 11 February 1991, p. 76. Similarly, 97% of enlisted personnel were high school graduates, the highest percentage ever. See Grant Willis, “DoD: Recruits in ’91 Best Educated, Most Qualified,” Air Force Times, 27 January 1992, p. 14. The services “had become practically a drug-free workplace.” See David Gergen, “Bringing Home the Storm,” The Washington Post, 28 April 1991, p. C2. Military sociologist Charles Moskos explained that the reason for the great decline in disciplinary problems is “simply better recruits.” Peter Slavin, “Telling It Like It Is,” Air Force Times, 14 March 1988, p. 60.
16. Ivany, 47; David Gergen, “America’s New Heroes,” p. 76; Grant Willis, “A New Generation of Warriors,” Navy Times, 16 March 1991, p. 12.
17. 408 U.S. 1, 17 (1972).
18. At least one observer sensed the peril which arises when power and respect converge in the military: “Our warriors are kinder and gentler, and have not shown the slightest inclination to lust for political power. But that potential always lurks where power and respect converge, and the degree of military influence in society is something to watch carefully in the years ahead.” Martin Anderson, “The Benefits of the Warrior Class,” The Baltimore Sun, 14 April 1991, p. 3F.
19. James Fallows, “Military Efficiency,” Atlantic, August 1991, p. 18.
20. Civilian law enforcement agencies were intercepting only 15% of the drugs entering the country. See U.S. Code Congressional & Administrative News (St. Paul: West, 1981), p. 1785; Public Law 97-86 (1981) codified in 10 U.S.C. 371 et seq.
21. Newsweek reports: “The Pentagon resisted the [counternarcotics] mission for decades, saying that the military should fight threats to national security, and the police should fight crime.” Charles Lane, “The Newest War,” Newsweek, 6 January 1992, p. 18. See also U.S. Code Congressional & Administrative News (St. Paul: West, 1981), p. 1785.
22. The original purpose of the Posse Comitatus Act (10 U.S.C. 1385) was to restrain Federal troops who had become deeply involved in law enforcement in the post-Civil War South–even in areas where civil government had been reestablished. See U.S. v. Hartley, 486 F.Supp. 1348, 1356 fn. 11 (M.D.Fla. 1980). The statute imposes criminal penalties for the improper uses of the military in domestic law enforcement matters. See U.S. Code Congressional & Administrative News (St. Paul: West, 1981), p. 1786.
23. Additional amendments were added in 1988. See Public Law 100-456 (1988).
24. Although anti-drug spending will decrease in FY 93, the rate of decline is slower than that of the DOD budget as a whole. William Matthews, “Counternarcotics Request Increased,” Air Force Times, 24 February 1992, p. 2. See also Lane, “Newest War,” p. 18.
25. “Combatting Drugs,” National Military Strategy of the United States (Washington: GPO, 1992), p. 15.
26. Some were suggesting the need for greater military authority in 1992. See Dale E. Brown, “Drugs on the Border: The Role of the Military,” Parameters, 21 (Winter 1991-92), 58-59.
27. The rise in the rate of violent crime continued a trend begun in the 1980s when such offenses soared by 23%. See John W. Wright, ed., “Crime and Punishment,” The Universal Almanac 1992 (Kansas City: Andrews and McMeel, 1991), p. 255.
28. “Harper’s Index,” Harper’s Magazine, July 1991, p. 15.
29. George Will observed that “urban governments are failing to perform their primary function of protecting people from violence on streets and even in homes and schools.” George F. Will, “Stressed Out in America,” p. A27.
30. Using Guardsmen in a law enforcement capacity during riots and other emergencies was not unusual, but a regular presence in a civilian community in that role was unusual in those days. Guard members usually performed law enforcement activities in their status as state employees. This is distinct from their federalized status when they are incorporated into the US military. See U.S. Code Congressional & Administrative News (St. Paul: West, 1988), p. 2583; and K. R. Clark, “Spotlighting the Drug Zone,” Pentagram, 30 January 1992, pp. 20-21.
31. Indeed, one of the specific purposes of the DC program was to “work with police to increase the uniformed presence in the neighborhood at night to cut down on illegal activity.” See Clark p. 21.
32. For example, persons over the age of 65 vote at a rate 50% higher than that of the 18-34 age group. See George F. Will, “Stressed Out in America,” p. A27.
33. The number of baby boomers in the population is expected to peak in 2020. See Marvin J. Cetron and Owen Davies, “Trends Shaping the World,” The Futurist, September-October 1991, p. 12. Persons over 65 were estimated to constitute 18% of the electorate by 2010. This group, together with the boomers over 45 years, would constitute 53% of the electorate by 2010. These percentages were computed from statistics found in the Universal Almanac 1992, “The U.S. Population by Age,” John W. Wright, ed. (Kansas City: Andrews and McMeel, 1991), p. 207.
34. Deidre Fanning, “Waiting for the Wealth,” Worth, February/March 1992, pp. 87, 89.
35. A 1990 poll of Americans aged 50 years and older showed that nearly 23% believed that use of the military was the best way to combat the growing problems of drug abuse and crime. See Mark S. Hoffman, ed., The World Almanac & Book of Facts 1991 (New York: Pharo Books, 1990), p. 33.
36. “Plan to Open Veterans Hospitals to Poor is Dropped,” The New York Times, 23 February 1992, p. 17.
37. Scott Shuger, “Pacify the Military,” The New York Times, 14 March 1992, p. 25.
38. Andy Tobias, “Let’s Get Moving!” Time, 3 February 1992, p. 41.
39. U.S. News & World Report noted that “a third of the officers leaving the Army are qualified to teach high school math, and 10 to 20 percent can teach physics.” David Gergen, “Heroes For Hire,” U.S. News & World Report, 27 January 1992, p. 71.
40. For example, a District of Columbia National Guard unit entered into a “Partnership in Education” agreement with a local school district. Under the memorandum the Guard agreed to “institute a cooperative learning center providing tutoring in science, English, mathematics, and other basic subjects.” See “Guard Enters Partnership with School,” Pentagram, 13 February 1992, p. 3. For another example, see “Arlington Schools Join Forces with Defense Department Agency,” The Washington Post, 12 December 1991, p. Va. 1.
41. The DOD budget for environmental cleanup for FY 93 was $3.7 billion. Anne Garfinkle, “Going Home is Hard to Do,” The Wall Street Journal, 27 January 1992, p. 12. See also Peter Grier, “US Defense Department Declares War on Colossal Pollution Problem,” The Christian Science Monitor, 2 March 1992, p. 9. The Army, at least, saw this activity as a “vital mission” as early as 1991. The National Journal reported: “Outside the Storm, a pamphlet heralding the Army’s post-Persian Gulf war `vital missions and important work’ touches on the war on drugs and `protecting the planet Earth’ (even reprinting a syrupy ode to environmentalism from the 1989 Sierra Club Wilderness Calendar).” David C. Morrison, “Operation Kinder and Gentler,” National Journal, 25 May 1991, p. 1260.
42. In February 1992 Trans World Airlines became the eighth major airline to go bankrupt since 1989. Martha M. Hamilton, “Trans World Airlines Files for Bankruptcy,” The Washington Post, 1 February 1992, p. C2. By 1992 US-flagged commercial shipping had virtually disappeared. See James Bovard, “The Antiquated 1920 Jones Act Slowly Sinks U.S. Shipping,” Insight, 6 January 1992, p. 21. In the wake of Desert Storm, $3.1 billion was spent to build and convert ships for the military’s cargo fleet. Michael Blood, “An Idea to Use Shipyard as a U.S. Sealift Base,” Philadelphia Inquirer, 16 February 1992, p. B-1. The precedent for “leasing” military resources can be traced to 1992. Just such an arrangement occurred in Germany following reunification: “A shortage of German [air] controllers and their unfamiliarity with newly reunified Berlin’s busy skies prompted Germany to hire a squadron from the US Air Force at a cost of $35 million for four years. . . . It is the only US military unit that guides civilian air traffic on foreign soil.” Soraya S. Nelson, “AF Controllers in Berlin Keep Eye on Civilian Sky,” Air Force Times, 10 February 1992, p. 22.
43. See, e.g., Helen Dewar, “Nunn Urges Military Shift: Forces Would Aid Domestic Programs,” The Washington Post, 24 June 1992, p. A17; Rick Maze, “Nunn Urges Military to Take Domestic Missions, Army Times, 21 September 1992, p. 16; Mary Jordan, “Bush Orders U.S. Military to Aid Florida,” The Washington Post, 28 August 1992, p. A1; George C. Wilson, “Disaster Plan: Give Military the Relief Role,” Army Times, 21 September 1992, p. 33; and Rick Maze, “Pentagon May Get Disaster-relief Role Back,” Army Times, 21 September 1992, p. 26. See also note 64.
44. See Shuger, p. 25. Similarly, noting the growing obsolescence of the Guard’s combat role, a National Guard officer proposed an alternative: “The National Guard can provide a much greater service to the nation by seeking more combat support and combat service support missions and the structure to support them. Such units can participate in nation building or assistance missions throughout the world, to include the United States. . . . Much of our national infrastructure, streets, bridges, health care, water and sewer lines, to name just a few, particularly in the inner cities of the United States, are in disrepair. Many of the necessary repairs could be accomplished by National guard units on a year-round training basis.” Colonel Philip Drew, “Taking the National Guard Out of Combat,” National Guard, April 1991, p. 38. Also jumping on the bandwagon are National Guard officers Colonel Philip A. Brehm and Major Wilbur E. Gray in “Alternative Missions for the Army,” SSI Study, Strategic Studies Institute, USAWC, 17 July 1992.
45. Eric Schmitt, “U.S. Forces Find Work As Angels Of Mercy,” The New York Times, 12 January 1992, p. E3.
46. See the legislative history of Public Law 99-661, U.S. Code Congressional & Administrative News (St. Paul: West, 1986) p. 6482. Public Law 99-661 codified in 10 U.S.C. 401 et seq.
47. Ken Adelman, “Military Helping Hands,” Washington Times, 8 July 1991, p. D3; Bruce B. Auster with Robin Knight, “The Pentagon Scramble to Stay Relevant,” U.S. News & World Report, 30 December 1991/6 January 1992, p. 52.
48. It was predicted that the AIDS epidemic would hit Africa especially hard with infection rates in some cities as high as 40% by the year 2000. See Marvin J. Cetron and Owen Davies, “Trends Shaping the World,” The Futurist, September-October 1991, p. 12. Some experts have predicted that African famine might present a requirement for a military humanitarian mission (Weiss and Campbell, pp. 451-52). See also Richard H. P. Sia, “U.S. Increasing Its Special Forces Activity in Africa,” The Baltimore Sun, 15 March 1992, p. 1. Long-term military commitments to humanitarian operations have been recommended by some experts (Weiss and Campbell, p. 457).
49. US troops assigned to African countries in the early 1990s were tasked to “help improve local health-care and economic conditions.” See Sia, p. 1. Similarly, the notion of using the expertise of US military personnel to perform governmental functions in foreign countries was also suggested in the 1990s. For example, when the food distribution system in the former Soviet Union broke down during the winter of 1991-92, there were calls for Lieutenant General Gus Pagonis, the logistical wizard of the First Gulf War, to be dispatched to take charge of the system. See “A Man Who Knows How,” editorial, The Los Angeles Times, 5 February 1992, p. 10.
50. As quoted in Dictionary of Military and Naval Quotations, Robert Debs Heinl, Jr., ed. (Annapolis: US Naval Institute, 1966), p. 245.
51. Public Law 99-433 (1986). Under the Goldwater-Nichols Defense Reorganization Act, the Chairman of the JCS was given much broader powers. Not only is he now the primary military advisor to the President, he is also responsible for furnishing strategic direction to the armed forces, strategic and contingency planning, establishing budget priorities, and developing joint doctrine for all four services. Edward Luttwak and Stuart L. Koehl, eds., The Dictionary of Modern War (New York: Harper Collins, 1991), p. 320. The law also mandated that joint duty be a requirement for promotion to flag rank. See Vincent Davis, “Defense Reorganization and National Security,” The Annals of the American Academy of Political Science, September 1991, pp. 163-65. This facilitated development of senior military cliques which transcended service lines.
52. Many praised Goldwater-Nichols as the source of success in the Gulf War. See, e.g., “Persian Gulf War’s Unsung Hero,” editorial, Charleston, S.C., News & Courier, 4 April 1991, p. 6. See also Sam Nunn, “Military Reform Paved Way for Gulf Triumph,” Atlanta Constitution, 31 March 1991, p. G5. But the Gulf War was not a true test of either Goldwater-Nichols or joint warfare. About all that conflict demonstrated was that poorly trained and miserably led conscript armies left unprotected from air attack cannot hold terrain in the face of a modern ground assault.
53. One study concluded that because of Powell’s background he was “especially well qualified” for the politically sensitive role as CJCS. See Preston Niblock, ed., Managing Military Operations in Crises (Santa Monica: RAND, 1991), p. 51.
54. Representative Denton stated as to Goldwater-Nichols: “This legislation proposes to reverse 200 years of American history by, for the first time, designating by statute . . . a single uniformed officer as the “Principal Military Advisor” to the President. That change in the role of the Chairman of the Joint Chiefs of Staff is profound in its implications. Similar proposals have been specifically and overwhelmingly rejected in the past–in 1947, 1949, 1958–on the grounds that, in a democracy, no single military officer, no matter what his personal qualifications, should have such power.” U.S. Code Congressional & Administrative News (St. Paul, Minn.: West, 1986), p. 2248. See also Robert Previdi, Civilian Control versus Military Rule (New York: Hippocrene Books, 1988).
55. In The Federalist No. 51 the Founding Fathers warned against the folly of constructing a governmental system based on assumptions about the good character of individuals who might occupy an office.
56. William Matthews, “Nunn: Merge the Services?” Air Force Times, 9 March 1992, p. 6.
57. This belief was enshrined in Joint Pub 1, Joint Warfare of the United States (Washington: Office of the JCS, 11 November 1991). It states (p. iii) that “joint warfare is essential to victory.” While joint warfare might usually be essential to victory, it cannot be said that it is essential in every instance. For example, rebels–composed entirely of irregular infantry–defeated massive Soviet combined-arms forces in Afghanistan. Equipped only with light arms, Stinger missiles, and light antiaircraft guns, they triumphed without benefit of any air or naval forces, and indeed without unity among themselves. Furthermore, even in the case of Western nations, there are likely to be plenty of hostilities involving single-service air or naval campaigns.
58. Former Secretary of the Navy John Lehman described the value of this creative tension in discussing his criticism of the “unified” Chairman of the Joint Chiefs of Staff occasioned by Goldwater-Nichols. According to Lehman: “Franklin Roosevelt . . . wanted to hear Admiral King argue with Marshall in front of him. He wanted to hear MacArthur argue against Nimitz, and the Air Corps against the Army, and the Navy against all in his presence, so that he would have the option to make the decisions of major strategy in war. He knew that any political leader, no matter how strong, if given only one military position, finds it nearly impossible to go against it. Unfortunately . . . now the president does not get to hear arguments from differing points of view.” John Lehman, “U.S. Defense Policy Options: The 1990s and Beyond,” The Annals of the American Academy of Political and Social Science, September 1991, pp. 199-200.
59. See, e.g., Arthur C. Forster, Jr., “The Essential Need for An Independent Air Force,” Air Force Times, 7 May 1990, p. 25.
60. Alexander Hamilton, James Madison, and John Jay, The Federalist, as reprinted in the Great Books of the Western World, Robert M. Hutchins, ed. (Chicago: Encyclopedia Britannica, 1952), XLIII, 163.
61. Shakespeare called ambition “the soldier’s virtue.” Antony and Cleopatra, Act III, Scene 1, as reprinted in the Great Books of the Western World, Robert M. Hutchins, ed. (Chicago: Encyclopedia Britannica, 1952), XXVII, 327.
62. Samuel P. Huntington, The Soldier and the State (Cambridge: Harvard Univ. Press, 1959), p. 87, said “If the officer corps is originally divided into land, sea, and air elements, and then is unified under the leadership of a single, overall staff and military commander in chief, this change will tend to increase its authority with regard to other institutions of government. It will speak with one voice instead of three. Other groups will not be able to play off one of the officer corps against another.”
63. Bruce B. Auster with Robin Knight, “The Pentagon Scramble to Stay Relevant,” U.S. News & World Report, 30 December 1991/6 January 1992, p. 52. Despite the Gulf War, defense outlays were scheduled by 1997 to shrink to their lowest percentage of the federal budget since the end of World War II. Sara Collins, “Cutting Up the Military,” U.S. News & World Report, 10 February 1992, p. 29. See also John Lancaster, “Aspin Seeks to Double Bush’s Defense Cuts,” The Washington Post, 27 February 1992, p. A16; and Helen Dewar, “Bush, Mitchell Take Aim at Slashing the Defense Budget,” The Washington Post, 17 January 1992, p. B1.
64. Morrison, “Operation Kinder and Gentler,” p. 1260. Most revealing, on 1-2 December 1992, the National Defense University at Fort McNair in Washington, D.C., hosted a symposium titled “Non-Traditional Roles for the U.S. Military in the Post-Cold War Era,” featuring presentations on disaster relief, refugee evacuation, humanitarian medical care, engineering assistance to infrastructure and environment, counternarcotics, riot control, emergency preparedness, civil unrest, national assistance, etc.
65. Military analyst Harry Summers insists that ROTC is a key reason military coups have not occurred in the United States as they have in other countries. He notes: “ROTC was designed to produce a well-rounded officer corps inculcated with the principles of freedom, democracy, and American values through close contact with civilian students on an open college campus, and through a liberal education taught by a primarily civilian academic faculty. And that’s just what has happened.” Harry Summers, “Stalking the Wrong Quarry,” Washington Times, 7 December 1989, p. F-3.
66. The Army plans to cut ROTC officer acquisitions from 7,778 in 1990 to 5,200 in 1995. See Peter Copeland, “ROTC More Selective in Post-Cold War Era,” Washington Times, 27 May 1991, p. 3.
67. David Wood, “A Breed Apart, Volunteer Army Grows Distant from Society,” The Star Ledger (Newark, N.J.), 24 April 1991, p. 1.
68. The armed services will shrink at least 25% by 1995. Richard Cheney, “U.S. Defense Strategy for An Era of Uncertainty,” International Defense Review, 1992, p. 7. But service academy graduates are expected to decline by only 10% during the same period. Eric Schmitt, “Service Academies Grapple With Cold War Thaw,” The New York Times, 3 March 1992, p. 12. Just after the Vietnam War, West Point was supplying about 8% of new Army officers, compared to the current 24%, a new study by the congressional General Accounting Office (GAO) suggests. To roll back the officer stream from West Point, the GAO says, enrollment might have to be limited to 2,500 cadets, a 40% drop from today. Larry Gordon, “Changing Cadence at West Point,” Los Angeles Times, 25 March 1992, p. 1.
69. See, e.g., Tom Philip, “CSUS May End ROTC Over Anti-Gay Policy,” Sacramento Bee, 15 February 1992, p. 1.
70. As of November 1991, 89 law schools prohibit or restrict on-campus military recruiting. See “Sexual Preference Issue,” HQ USAF/JAX Professional Development Update, November 1991, p. 9. Such bans are not legal in most cases. See 10 U.S.C. 2358; and U.S. v. City of Philadelphia, 798 F.2d 81 (3d Cir. 1986). Furthermore, by condoning the exclusion of military recruiters from campuses–billed as “marketplaces of ideas”–these universities legitimized censorship of “politically incorrect” views.
71. An article by journalist David Wood grasped this trend. He quoted an Army officer as stating, “We are isolated–we don’t have a lot of exposure to the outside world.” Wood goes on to observe: “The nation’s 2 million active duty soldiers are a self-contained society, one with its own solemn rituals, its own language, its own system of justice, and even its own system of keeping time. . . .Only a decade ago, life within the confines of a military base might have seemed a spartan existence. But improving the garrison life has been a high priority. As a result, many bases have come to resemble an ideal of small-town America. . . . There is virtually no crime or poverty. Drug addicts and homeless are mere rumors from the outside.” David Wood, “Duty, Honor, Isolation: Military More and More a Force Unto Itself,” The Star-Ledger (Newark, N.J.) 21 April 1991, p. 1. See also Laura Elliot, “Behind the Lines,” The Washingtonian, April 1991, p. 160.
72. Wood, p. 1.
73. Studies indicate that defeat in war may actually increase the likelihood of a military coup. Ekkart Zimmermann, “Toward a Causal Model of Military Coups d’Etat,” Armed Forces and Society, 5 (Spring 1979), 399.
74. United States ex rel. Toth v. Quarles, 350 U.S. 11, 17, 76 S.Ct. 1 (1955). Of course, Carl von Clausewitz had put it even better: “The end for which a soldier is recruited, clothed, armed, and trained, the whole object of his sleeping, eating, drinking, and marching, is simply that he should fight at the right place and the right time.” On War, Michael Howard and Peter Paret, eds. (Princeton: Princeton Univ. Pres, 1976), p. 95.
75. Barton Gellman, “Strategy for the ’90s: Reduce Size and Preserve Strength,” The Washington Post, 9 December 1991, p. A10.
76. See, e.g., Brown, “Drugs on the Border: The Role of the Military,” p. 50.
77. According to one report, the effort was futile and wasteful: “We’re getting so little of the drug traffic for such a great expenditure of effort,” lamented one Navy officer; “We’re pouring money into the ocean, at a time when resources are scarce.” William Matthews, “Drug War Funds Would Shrink Under Budget Proposal,” Air Force Times, 17 February 1992, p. 33.
78. John Lancaster reported that proposals to cut Guard and reserve funding “inflame passions on Capitol Hill,” causing Congress to resist cutting the part-time forces. “Pentagon Cuts Hill-Favored Targets,” The Washington Post, 24 January 1992, p. A6. Art Pine reported that the Guard and reserves “exercise stunning political power and influence, both among state and local governments and in the power centers of Washington.” Pine quoted Brookings Institute expert Martin Binkin as saying that the Guard/Reserve lobby “makes the gun lobby led by the National Rifle Association look like amateurs.” Art Pine, “In Defense of 2nd Line Defenders,” Los Angeles Times, 13 March 1992, p. 1.
79. Former Director of Operations for the Joint Staff, Lieutenant General Thomas Kelly, believed there was simply not enough training time to keep Guard units ready for the kind of highly complex warfare the Army now conducts. He said, “There is nothing on earth harder to teach than the maneuver function in combat.” As quoted by Grant Willis, “A New Generation of Warriors,” Navy Times, 16 March 1991, p. 12. The motivation of some Guardsmen toward fulfilling their military responsibilities was called into question when up to 80% of the Guardsmen in California units called up for Desert Storm reported for duty unable to meet physical fitness standards. Steve Gibson, “Guards Flunked Fitness,” Sacramento Bee, 18 June 1991, p. B1.
80. “Decisive Force,” National Military Strategy of the United States (Washington: GPO, 1992), p. 10; “Contingency Forces,” National Military Strategy of the United States (Washington: GPO, 1992), p. 23. Secretary of Defense Richard Cheney and Chairman of the Joint Chiefs of Staff Colin Powell testified before the Senate Armed Services Committee on 31 January 1992 that the military of the future “would be smaller and more mobile and flexible. . . . Its likely target would be regional conflicts, in which American firepower might still be needed on short notice.” As reported by Eric Schmitt, “Pentagon Says More Budget Cuts Would Hurt Combat Effectiveness,” The New York Times, 1 February 1992, p. 9.
81. Military analyst and decorated combat veteran David Hackworth sized up the Guard and Reserves as follows: “Except for the air and Marine combat components, these forces aren’t worth the billions paid each year to them. The combat service and support units are great, but there are too many of them.” “A Pentagon Dreamland,” The Washington Post, 23 February 1992, p. C3.
82. Operation Provide Hope was a two-week humanitarian aid effort involving 64 US Air Force sorties carrying approximately 4.5 million pounds of food and medicine. Michael Smith, “First of Up to 64 Relief Flights Arrives in Kiev,” Air Force Times, 24 February 1992, p. 8. For Baker quotation, see David Hoffman, “Pentagon to Airlift Aid to Republics,” The Washington Post, 24 January 1992, p. A1.
83. The Vice Chairman of the Joint Chiefs of Staff also saw the military’s future role in non-combat terms. Stating that there was “no plausible scenario” in which the United States would be involved in a military conflict in Europe or with elements of the former Soviet Union, he maintained that the likeliest use of military forces would be to address instability that could arise from migrations by poor peoples of the world to wealthier regions. He envisioned the military’s role: “You would like to deal with this on a political and social level. The military’s role should be subtle, similar to the role it plays now in Latin America–digging wells, building roads, and teaching the militaries of host nations how to operate under a democratic system. . . . When prevention fails, the military can be called to the more active role of running relief operations like the current one at Guantanamo Bay, Cuba, for fleeing Haitians. Operation Provide Comfort, the giant US military rescue mission to save Kurdish refugees who fled from the Iraqi army to the snow-covered mountains of southeastern Turkey last spring, may have been a precursor of what we can look forward to in the next decade if not the next century.” As quoted by William Matthews, “Military Muscle to Shift to Humanitarian Help,” Air Force Times, 6 January 1992, p. 14.
84. Leon Hader, “Reforming Israel–Before It’s Too Late,” Foreign Policy, No. 81 (Winter 1990/91), 111.
85. Richard J. Barnet, “Reflections–The Uses Of Force,” The New Yorker, 29 April 1991, p. 82.
86. Charles Lane, “The Newest War,” p. 18.
87. Newsweek reported the following incident: When a Marine reconnaissance patrol skirmished with smugglers near the Arizona-Mexico border last December–firing over their heads to disperse them–one colonel near retirement age shook his head. He argued that combat-trained Marines shouldn’t be diminishing hard-learned skills by squeezing off warning shots. “That teaches some very bad habits,” he said. Bill Torque and Douglas Waller, “Warriors Without War,” Newsweek, 19 March 1990, p. 18.
88. Charles Lane, “The Newest War,” p. 18.
89. As quoted by David Morrison in the National Journal. This relief operation involved 8,000 sailors and marines tasked to help millions of Bangladeshi survivors of a 30 April 1991 cyclone. See Morrison, “Operation Kinder and Gentler,” p. 1260.
90. Barton Gellman, “Strategy for the ’90s: Reduce Size and Preserve Strength,” The Washington Post, 9 December 1991, p. A10.
91. Shuger, “Pacify the Military,” p. 25.
92. Harry Summers, “When Armies Lose Sight of Purpose,” Washington Times, 26 December 1991, p. D3.
93. See “Warnings Echo from Jefferson to Eisenhower to Desert Storm,” USA Today, 1 March 1991, p. 10A.
94. A caller to a radio talk show typified this view. She stated that while she appreciated the need for a military in case “something like Iraq came up again,” she believed that the military ought to be put to work rebuilding the infrastructure and cleaning up the cities instead of “sitting around the barracks.” “The Joel Spevak Show,” Station WRC, Washington, D.C., 11 March 1992.
95. One example of the dangers of lowering standards to achieve social goals is “Project 100,000.” Conceived as a Great Society program, youths with test scores considered unacceptably low were nevertheless allowed to enter the armed forces during the 1966-1972 period. The idea was to give the disadvantaged poor the chance to obtain education and discipline in a military environment, but the results were a fiasco. See Marilyn B. Young, The Vietnam Wars, 1945-1990 (New York: Harper Collins, 1991), p. 320.
96. Richard A. Gabriel, To Serve with Honor (Westport, Conn.: Greenwood, 1982), p. 178.
Lieutenant Colonel Charles J. Dunlap, Jr., USAF, is the Deputy Staff Judge Advocate, US Central Command, at MacDill AFB, Florida. He is a graduate of St. Joseph’s University (Pa.), the Villanova University School of Law, and the Armed Forces Staff College, and he is a Distinguished Graduate of the National War College, Class of 1992. He has taught at the Air Force Judge Advocate General’s School, and served tours in Korea and the United Kingdom. In 1987 he was a Circuit Military Judge, First Judicial Circuit, and was subsequently assigned to the Air Staff in the Office of the Judge Advocate General. Lieutenant Colonel Dunlap was recently named by the Judge Advocates’ Association as the USAF’s Outstanding Career Armed Services Attorney of 1992. The present article is adapted from his National War College student paper that was co-winner of the Chairman of the Joint Chiefs of Staff 1991-92 Strategy Essay Competition, in which students from all the senior service colleges compete.
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Du Pont’s Race of Supermen (Trading with the Enemy: An Expose’ of the Nazi-American Money Plot 1933-1949)
Commerce, is our goal here at Tyrell. More human than human is our motto. -Tyrell, Blade Runner script. (1982)
Irénée du Pont was the most imposing and powerful member of the [du Pont] clan. He was obsessed with Hitler’s principles. He keenly followed the career of the future Fuhrer in the 1920’s, and on September 7, 1926, in a speech to the American Chemical Society, he advocated a race of supermen, to be achieved by injecting special drugs into them in boyhood to make their characters to order. He insisted his men reach physical standards equivalent to that of a Marine and have blood as pure as that in the veins of the Vikings. Despite the fact that he had Jewish blood in his own veins, his anti-Semitism matched that of Hitler.
Trading with the Enemy: An Expose’ of the Nazi-American Money Plot 1933-1949 by Charles Higham. Pg. 162