On The Take - From Petty Crooks to Presidents

On The Take - From Petty Crooks to Presidents

excerpts from:
On The Take - From Petty Crooks to Presidents
William J. Chambliss�1978
Indiana University Press
ISBN 0-253-34244-9
269 pps. � First Edition � In-print
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An amazing book. Quite interesting. Documents a national system of pay-off and corruption.
Om
K
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ON THE TAKE
From Petty Crooks to Presidents

By William J. Chambliss

"Money is the oil of our present-day machinery, and elected public officials are the pistons that keep the machine operating .... Crime is an excellent producer of capitalism's oil . . . . [It] is not a by-product of an otherwise effectively working political economy: it is a main product of that political economy." -from the Introduction

From bagman to businessman, from pusher to politician, this is the story of the billion-dollar ripoff built on gambling, drugs, usury, business fraud, prostitution, theft, and blackmail. Chambliss begins with a detailed study of Seattle, Washington, and shows how the local crime network has been connected to national business and political interests and even to the White House. He could have studied dozens of other cities and found the same corruption and national connections-in Arizona, Maryland, Georgia.

Trained in law and sociology, Chambliss disguised himself as a truck driver ("two days' growth of beard, a pair of khaki pants, and an old shirt") and began his years of research by talking to small-time operators on skid row: tavern owners, cardroom and bingo parlor licensees, porn dispensers, drug pushers, and prostitutes. Gradually he gained the confidence of the higher echelon of the crime networkpolicemen, businessmen, journalists, and politicians.

Chambliss's findings are at odds with the view of organized crime held by the general public and by most academics. He found clear evidence that organized crime really consists of a coalition of politicians, law-enforcement people, businessmen, union leaders, andperhaps least important of all-Mafia-type racketeers. There is no "godfather" or small controlling group of criminals but rather an elaborate payoff system from which many benefit.

The conclusions of this study have farreaching implications for all Americans. Chambliss believes that "it is the bureaucratic nature of law enforcement, the search for profit and capital dictated by the economy, and the peculiar organization of American politics which creates and sustains organized crime throughout the United States at all levels: municipal, state, and national." The author vividly describes his often dangerous experiences and quotes extensively from interviews he taped. This colorful document of social science field research is a shocking expose of crime, business, and politics in America.

--from book jacket--
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CHAPTER THREE

Profits and Payoffs

BOB WILLIAMS (P)[Pseudonym] was only nineteen years old when he was arrested 'in the black neighborhood that was his turf. He was only nineteen when he was beaten to death in a jail while in the custody of the police. Like many other nineteen-year-old black youths, Bob Williams, judged by white middle-class standards, was sophisticated beyond his years. He knew how to turn a honky around, how to survive in what he called "the jungle," and how to buy cheap, sell dear, especially when he was buying and selling dope.

"I'm an independent. Some of these guys have all kinds of strings on 'em. Not me, man. I'm my own boss. Ain't nobody gonna pull me around by the nose."

According to a police sergeant on duty the night Bob Williams was taken in, "We had been watching Williams for some time. We knew he was heavily implicated in the narcotics traffic and we were just waiting for our chance. An informant told us he would have a lot of the shit on him that Friday so we picked him up."

Williams was arrested "on suspicion." At the time of his arrest he had over fifteen hundred dollars worth of heroin in his possession. The heroin, like whoever beat him to death, disappeared.

According to the policemen who arrested him, Bob called them names and tried to jump out of the car. I do not know what happened between eight p.m. and midnight, but shortly after midnight Bob was brought into the emergency ward of General Hospital badly beaten and unconscious. He was released back to the police the next day at twelve noon. The same intern who had patched him up Friday evening was still on duty Saturday about four p.m. when Bob was returned to the hospital again badly beaten, this time with a concussion. The police told the intern that "inmates in the cell keep beating him up." Bob Williams died at three a.m. Monday from a-brain hemorrhage caused by blows to the head.

The intern told me he believed the police had beaten him to death. The coroner listed the cause of death as "accidental." No one was ever charged with any criminal offense in connection with Bob's death.

Friday night, while Bob was in jail, a white physician who had lived in the city for a number of years drove through the black ghetto. His car weaved down the street and stopped near a corner. He took a .38 caliber revolver out of his glove compartment and began shooting into the night air. The police came, stopped him, and took him to jail. The police called his wife and she came to the jail. The doctor was released to his wife's custody. He had spent a total of forty-five minutes in custody.

On Saturday night, as Bob Williams lay dying, I played poker in a high-stakes poker game where thousands of dollars were illegally bet. A sergeant from the vice squad of the police department participated in that poker game.

Bob Williams paid a heavy price for his involvement in the drug business. Others who made all or part of their livelihood from the drug business were more fortunate. The informant who told the police when to pick up Williams was generously supplied with heroin by the police.

Behind this tragic case lies a fundamental truth about policing in America: the small, unprotected, unconnected entrepreneur furnishes the arrests and the "crime problem" that provide a smoke screen behind which profitable, organized, politically connected groups commit more serious, more profitable, and more common crimes.

Why the enforcement of the criminal law takes this shape is quite complicated in some ways. In one sense, however, it is very simple because it all reduces to money and profits. The money flowing through the rackets is large, and the profits are doubtless the highest of any industry in the world.

Item: From 1956 to 1970 each of eleven bingo parlors grossed over $300,000 a year. The owner of one bingo parlor netted $240,000 a year after all expenses, including payoffs to police and politicians, were paid.

Item: From 1960 to 1970 there were over 3,500 pinball machines licensed in the state. These machines grossed over 7 million dollars a year. The investment necessary for purchasing and servicing the machines was miniscule. The taxes were nonexistent since all returns were in cash and could be hidden. There was one "master license" for the county. It gave one organization the right to place pinball machines in the amusement parlors, cabarets, and restaurants. This small group of businessmen, closely tied to political and law-enforcement people, had a monopoly on one of the most profitable businesses in the state.

Item: In 1968 Seattle had the highest number of federal gambling stamps issued in any state in the U.S. except Nevada.

Item: A jeweler in Seattle was a major source of short-term loans to people in the drug business. Typically he would loan large sums of cash for a short period of time and receive in return a very high interest on the money. One transaction alone involved the loan of $220,000, with the understanding that the jeweler would receive back $350,000 "within thirty days."

Item: A consortium of businessmen, bankers, politicians, and racketeers invested in an "amusement center" which fraudulently issued stocks and netted the six investors over $100,000 apiece in six months on a $10,000 investment.

Item: High-stakes poker games that went on each night in dozens of locations throughout the city had stakes bet in an evening that often exceeded $100,000 Seven nights a week, 350 days a year, the people who organized and managed these games took away 10 percent of the pot. On a bad night for the house the management took home only $1,000 but on good nights management grossed $10,000, which was the rule rather than the exception.

The list could be expanded.

One of the reasons we fail to understand crime is because we put crime into a category that is separate and distinct from normal business. Much crime does not fit into a separate category. It is primarily a business activity. The fact that it is an illegal business activity is an historical accident beyond the control of those who engage in the business. But the mere fact of this historical accident does not change the basic character of the enterprise. The place to start the analysis is with the profit structure and with the business expenses required to keep the profits coming in.

In Seattle the rackets constituted one of the largest industries in the state. Gross profits from gambling alone amounted to more than fifty million dollars a year. Of course, this is only a rough estimate pieced together from information supplied by people who ran various gambling enterprises. It is, however, consistent with an intriguing variety of information I gathered from diverse sources. The following fact should give more than casual confidence in the reliability of this figure. A recent national survey shows the U.S. adult spends an average of thirty dollars a year on gambling. Over a million people live in Seattle, and if everyone spent the average on gambling, the total would be close to forty million dollars a year. Seattle is a favorite convention and tourist city and could easily run the total amount spent on gambling up to the estimate of fifty million dollars a year.

The profits are for the most part tax free. A pinball operator told me: "At the outside, our reported income is only one-third of what we actually take in. There isn't a federal agent in the world who can tell how much I skim off the top of a pinball machine once I've gotten to the counters."

"Fun nights" at the fraternal clubs, high-stakes poker games, cardrooms, etc. contributed huge sums. Not counted were all the other illegal businesses associated with some of the same people who ran, owned, financed, or profited from gambling. They include drugs, prostitution, cabarets run illegally, real-estate transactions, illegal stock and bond transactions, and stolen liquor.

The total profits of these various illegal businesses exceeded a hundred million dollars a year in Seattle, and this placed gambling, narcotics, fraud, usury, and organized theft among the state's two or three largest industries.

Legitimate business relies on the support of the law and the courts to ensure predictability and adherence to contracts. Illegal business cannot openly "go to court" if a debtor refuses to pay a gambling debt or to make good on an agreement to purchase a large supply of narcotics. But illegal business must be able to accomplish the same end or else the risk to the capital investment will be too great. The simplest, most direct way to ensure that the investment will return its potential profits is to include as partners those whose job it is to see that the illegal acts are punished by law. That is what happened in Seattle and what happens everywhere. Politicians, law-enforcement officials, professionals (especially lawyers, accountants, bankers, and realtors), and "legitimate" businessmen become partners in the illegal industry.

If I asked any of the dozens of people who practised the arts and crafts of gambling why the police did not enforce the laws prohibiting such acts, they gave the same answer: payoffs. Payoffs gave the police "a piece of the action," a part of the profits. And even a part of the profits was a lot of money.

At the operational level the cooperation of politicians and law enforcers takes place through the payoff. A bagman collects an established payment from every enterprise engaged in illegal business. Cardroom operators were surprisingly consistent in their reports of how much they paid off. The large operators paid $350 a month to the police and $300 a month to "the syndicate." Smaller operators paid $250 a month. Bingo parlor operators, "social club" owners, and gamblers in the Chinese, Japanese, and black ghettos paid less. The amount depended on the size of the operation and the amount of protection received.

Fred Lindesmith (P), a seventy-two-year-old man dying of arterial sclerosis, was on the police force in Seattle for twenty years. He participated in the payoff system and retired financially secure at age sixty-five. Fred had earned enough "extra money" as a partner in illegal business to send his two children to college with all their expenses paid. By the time he was seventy years old, however, he had grown disillusioned with the bastardization of police work he had helped to create. He was, he said, wanting to "set the record straight."

Q: Can you describe the payoff system?

A: Whoever was acting as official or unofficial treasurer would have the responsibility to see to it that the right people got their share. Skip Tower (P) did it for a while. Then Bob Furman (P) took his turn. Everyone involved got their share. When Ben Cichy was killed they sent someone out from downtown to burglarize his place. Three black dudes went out and tore up the floor looking for where he kept the monthly payoff money hidden. They left twenty thousand dollars worth of jewelry just sitting on the table. They were obviously not burglars, but people sent out from downtown. They terrorized Cichy's wife to death.

Q: Who got the money?

A: Everyone. The beat cop, the vice-squad captain, the prosecutor. Everyone. It depended on the gig. Narcotics payoffs went through the vice squad and the patrol division. Sooner or later it all went up to the top.

Q: Anyone else?

A: Of course the city council had its people with their hands out also.

Q: But how exactly

A: Okay. It's like this. There's a bagman who collects the money from tavern owners, the cardrooms, or the whorehouses. He brings it in. He takes a small cut. Then the sergeant in charge of the division, say the vice squad, takes his cut and passes it on to the police department's bagman, who takes it on up�a piece here, a piece there. Then it goes to the assistant chief, and he takes it on to people in the prosecutor's office and sends some over to the city council. The patrol division had their own payoff system. The patrol division was required to make its payoff to the mayor's office depending on whether the particular mayor was cooperating, and they all have, except one in recent years.... And there was a separate payoff system for burglary and narcotics. Burglary was probably as big as gambling. And individual narcotics ripoffs, sporadic but very lucrative payoffs in major narcotics transactions. Thousands of dollars in a single payoff.

Q: Who to?

A: To the narcotics dicks, then to be divided right up through the chain of command to the majors and lieutenants, and the assistant chief and the city councilmen.

Q: All on the local level?

A: Yes and no. There was another line that went to the state, and the state had its own gigs. Liquor licenses and payoffs for illegal booze, stolen whiskey from the state warehouses, watered-down whiskey and all that stuff went straight to the state. Frank Schneider (P) has for years been going between the governor's office and local payoff systems. People in the House of Representatives got theirs as well. In fact the guy who flies the payoff money to San Francisco every week is in the House of Representatives.

Q: What about different counties?

A: I'm not too sure about that setup, but it figures that they cooperated with one another-talked about how much profit there was and what each got from it. You should talk to _____ about that.

Q: You mentioned narcotics ripoffs....

A: Yeah. Narcotics was really big. Even bigger than pinballs or cardrooms. It's kind of long and involved. The police would use this guy _____ to set up narcotics dealers.

Q: Like Bob Williams?

A: Yeah. Like Bob Williams. You know what happened
to him?

Q: Yeah.

A: Well, they'd set up a narc dealer and make the arrest. Then they'd confiscate his stuff and turn it over to -1 who'd sell it, and the police would get a big share of the profit. The police would also have a fat narcotics arrest record, but the heroin and pills and stuff would still get to the street. I know the names of all those guys. I'm particularly close to the latest one who managed this operation, former lieutenant of the narcotics squad.

Q: At the state level, who do they work out of?

A: The state patrol; State Highway Patrol.

An item in the daily paper gave an indication of what happened to some of the profits. Lt. T. Ryther (P), who had been a police officer for thirteen years, died suddenly of a heart attack at age forty-one. At the time of his death he left an estate valued at $241,786. During his thirteen years as a police officer, Ryther had lived in a large, seventy-five-thousand-dollar home, owned two fully paid for expensive automobiles, and taken vacations in Hawaii. He had never earned over twelve thousand a year in salary from the city. He had, however, earned more than twice that amount in payoffs from illegal businesses in return for the protection and cooperation he gave them.

Both the King County prosecutor and the sheriff owned expensive homes in the city's most prestigious neighborhoods. The prosecutor also owned a fifty-foot ocean-going yacht. The assistant chief of police lived in an expensive house and built another for his son in an even more expensive neighborhood. The county prosecutor also directed unknown sums of money to state and local politicians who supported his kind of politics and his kind of criminality.

Policemen told a standard Joke in the department: "If you cleaned this city up, we'd all have to go on welfare 'cause none of us could live on our salary." Some of the policemen, ironically, lost a good percentage of their illegal earnings to the gamblers who were paying them off or to other police officers. Others spent large sums on whiskey and nights in cabarets. Still others invested in businesses and left the force. One ambitious and clever young officer saved enough money in three years working on the narcotics squad to purchase a large retail store in the downtown section of the city.

In a sense the illegal businesses were paying taxes in the form of monthly and annual payoffs to people at all levels of law enforcement and government. It is, however, misleading to see this network of money-flow as involving only profits and payoffs. In fact, what took place was a complicated set of illegal and legal business relationships which were the flesh and bones of a network of people engaged in the systematic reaping of profits, from illegal businesses.

This cartel constituted a crime network that was a subterranean organization which greatly affected, as surely as it undermined, the political economy of Seattle.

CHAPTER FOUR

The Crime Network

THERE WERE over a thousand people in Seattle who profited directly from the rackets, bootleg whiskey, organized theft and robbery, drug traffic, abortion rings, gambling, prostitution, land transactions, arson, phony stock sales, and usury. Everyone who successfully engages in these criminal activities must share the profits with someone or some group of people. The more regulated the criminal activities and the more successful the participants, the more systematized the profit sharing. The entire system is simply a collection of independent operators who cooperate and compete according to their ability, their power, and their interests.

Disparate as it is, widely distributed among people in different walks of life, and changing all the time, there is nonetheless a hierarchy. Some people are more important than others. In times of crisis some people have the power to make critical decisions while others do not. Not surprisingly, those who profit the most from the rackets and who also have the power to take action are the most likely to meet and discuss problems and prospects. In Seattle the group of power-holders who controlled and set policy for the illegal business enterprises varied. Over the years the more active participants included a King County prosecutor, a Seattle city council president, an assistant chief of police, city police captains, the King County sheriff, the King County jail chief, undersheriffs, the president of the Amusement Association of Washington (who had the only master's license for pinball machines in the county), a Seattle police major, and an official of the Teamsters Union. In addition there were persons from the business and professional community who were members of the network and who in a quiet, less conspicious way were as influential over illegal business activities as were the more visible operatives listed above. They included a leading attorney who defended network members and joined them in investments in illegal enterprises, a realtor who arranged real-estate transactions and shared investments, an officer of one of the state's leading banks, a board member of a finance company that loaned money exclusively to businesses or individuals who were either members of or under the control of the network, and various labor union officials�mostly in the Teamsters Union, but high-level officials of other labor unions were also involved from time to time.

One of the problems with determining the real power sources in an enterprise as inherently secretive and variable as a crime cartel is of course the line between active participant (or policymaker) and compliant benefactor. For example, a prosperous retail store-owner in the city often invested in and profited from illegal enterprises ranging from real-estate frauds to drug traffic. He also financed and arranged for the transportation of stolen jewelry out of the United States to Europe, where it could be recut and sold on the European market. He never set policy, never became involved in the day-to-day decisions, never allowed himself even to be consulted about the handling of a particular problem within the ongoing enterprises. Yet he knew of most of the problems and could well have been influential had he cared to make his wishes known. He preferred to remain silent. His decision, he told me, was based on the "good old American tradition of selfpreservation." He felt that the less he was involved in "administration," the more likely he was to remain unconnected publicly with the "seamy side of business." He acknowledged, however, that when a newspaper reported the death of a member of the network due to "accidental drowning," he knew it was no accident.

A further problem is to decide the point at which one has enough information to feel confident that the rumors and allegations being put forward as "facts" by informants match sufficiently with other data to be acceptable. The people mentioned so far were all well established in the minds of all my informants in a position to know. These people also exhibited life-styles which clearly showed incomes in excess of anything they could have had from their legal incomes. (The county prosecutor claimed publicly that his standard of living exceeded that which his salary could support because of monies his wife had inherited.)

But it was also alleged by some informants, who should have known, that the real power in the illegal business enterprises lay with high-ranking officials in state politics, a close associate in Seattle, and a former Seattle city council member. I was unable to establish the validity of these claims. In the end the consistency of informant reports convinced me that the governor was indeed a beneficiary of heavy political campaign contributions from network principals. He, like many others, benefited from the profits and left the management to others.

At one time (1963-65) it was fairly easy to identify seven people who constituted the backbone of the network. This group shifted, however, and some of the seven became less involved while some new people emerged as principals. Both composition and leadership are variable; success is determined by connections and profits. When drug trading becomes more precarious, the people involved may lose considerable influence; when cardrooms come under fire, those people whose profits or payoffs are principally in cardrooms lose their influence.

Whatever the composition, this coalition of shifting membership (but fairly constant leadership) persisted and had more to say about how the rackets were run than anyone else. It also met more or less regularly, but here too the pattern was not akin to a monthly board of directors' meeting but was more a series of meetings between key players from different walks of life. Politicians who were deeply involved in the network met regularly at their "businessmen's club" with members of the city council, the county board of supervisors, and several key businessmen who were profiting from the rackets. Law-enforcement officers met monthly with a pinball operator who was the head of the Amusement Association, an association of pinball operators which was the official lobby for the pinball machine owners. The head of the Amusement Association in turn met with other businessmen, at least one of whom was reputed to be the bagman for state politicians.

Some sense of the organized- disorganized nature of the rackets can be gleaned from a series of incidents in the mid 1960s which involved an attempt by Bill Bennett(P) to take over part of the pinball operation in the city. Bill's brother Frank was one of the prominent racketeers in town, a man generally believed to be involved in prostitution and the collection of payoffs for state officials (including the governor) as well as the police. Bill decided that he wanted a piece of the action in the pinball business. He tried at first to demand a territory but he met with resistance. Pinballs were at the time concentrated pretty much in the hands of several people. The only master license in the county was held by the Amusement Association. As president, Ben Cichy represented not only his own interests as the major pinball operator in the state, but also the interests of other pinball operators. Ben Cichy was well protected in his position. As president of the association that looked out for the pinball interests, he met regularly with and allegedly paid substantial sums of money to politicians, to Frank Bennett(P), and to members of the police department * In addition, the Amusement Association collected from all pinball operators a monthly fee that was used to ply state and local politicians with liquor, parties, and women for favors, not the least of which were large campaign contributions to politicians who worked in the interests of pinball owners. Thus Bill Bennett was taking on some formidable opponents when he tried to muscle into the pinball business. On the other hand, Bill and his brother Frank were well connected in political and business circles. Among others, Frank was closely allied with politiclans who were the political and personal enemies of the county prosecutor and might well have been favorably disposed toward an attempt to undermine part of his political base.

When Bill's efforts to gain part of the pinball operation were turned down by Cichy and the other owners, he filed what is referred to as an "underworld anti-trust suit." He and some of his men began throwing Molotov cocktails through the windows of places containing Cichy's machines. Some restaurant owners were roughed up. This caused some attention in the press, so people were getting nervous. To ralm[sic] things down, the pinball operators offered to let Bill in if he would agree to pay them twenty thousand dollars for the loss of their territory plus a fee of two dollars a month for each machine over and above the fifty cents per machine that went to the Amusement Association for lobbying.

The agreement reached by the other pinball operators was, however, not satisfactory to the chief of police, who saw Bill as a "hoodlum." This was one of the few occasions when the chief put his foot down. An informant in the police department said that "in all likelihood" the chief vetoed the agreement as a result of support and instructions from the county prosecutor. Because of the trouble Bill had caused, the chief insisted that he leave the state, which he did.

Several features of this event are important. First, it underlines the competition between different persons acting primarily as individuals out to increase the size of their business and their profits. It also illustrates, however, that when the entire enterprise is threatened, it is possible for a coalition of the more powerful members of the rackets to force less powerful members to acquiesce. The incident also indicates an important element in the way any network protects itself. The two-fifty a month which Bill would have to pay for each machine was divided between protection (two dollars a month) and lobbying (fifty cents a month). The one activity is presumably criminal (by statute), the other legal.

Was This Crime Network, Then, the Local Mafia?

I talked with many people about the possibility that this network was a local branch of the Mafia. A professional thief who had also worked in the rackets (gambling, prostitution, drugs, etc.) told me, "You can forget that Mafia stuff. We are Hoosiers out here. There is no organized crime like they have back east, like in Kansas City and Cleveland. We're too independent out here."

This same feeling was expressed time and again by people at all levels. Virtually everyone in a position to know anything about the rackets in Seattle echoed these sentiments: "Every time you check the Congressional Record and you see the FBI diagramming the Mafia families in San Francisco, you can tell them to shove it up their ass, because you can't diagram this. If you do diagram it, you can't read your diagram when you're done. It's all squiggly lines: the chain of command and who's in charge of any operation and who's entitled to what cut of the graft, it's all very changeable."

Q: Is the police force more or less an independent thing,
not controlled?

A: No, everybody has a part of the police department's ass. Really the police department is the biggest corporate hooker in the whole establishment. The Teamsters Union used them; Democrats at the time; the city council uses them; the license committee uses them; the prosecuting attorney also had an occasion to use the vice squad to make sure he is getting an honest count, if someone gives him trouble on pinballs. Police chief, or assistant chief, would use the department sometimes at cross-purposes to what the mayor or the prosecutor might like. The mayor or the prosecutor might not want trouble, let's say, from a bar operator, like Charlie MacDaniel. They really probably hated that, when that thing came to a head the way it did. The cops, however, went right in and hassled Charlie, because the cops were smarter. The cops know what's going on out in the street, and they knew better to make an example out of Charlie, even if it gets in the newspaper, than to lose control. The prosecutor is like any other crime boss. Something is wrong out there: he looks at a lieutenant, and he says, "Fix it." He might also add the admonition, "Don't be messy, fix it." And the henchman is a technician. Like any technician, he knows that sometimes you have to get your hands dirty when you fix the machinery. And the boss may not want any machine oil on the floor, but he may have to get some to get the machine fixed. So, beyond a certain point, if it gets messy, tough shit. Because the technician is responsible, and he doesn't It want to be held responsible. And if somebody like Charlie MacDaniel gets too far out of line, you take whatever measures are necessary to cover your own ass. You worry about the boss later, see? Right now you're thinking about staying out of the newspapers, staying out of prison. So, on any given occasion, the loyalties of the policemen might be very divided; and this political structure that is controlling the rackets is very fractured. At times it is fractured along the straight Democratic against Republican lines. At times it is fractured along straight county bureaucracy against city bureaucracy. At times it was fractured along city lines, depending on who was contending for power and money. And that's why you can't chart it. It's not neat.

Q: And they're all dependent on each other.

A: And each one requires the silence of the other; no matter how ugly the fighting gets, they've got to keep it under and out of sight. This is one reason why I think there was very little killing, comparatively speaking. When people are killed, they were people within the apparatus, little people. Or people like Ben Cichy if he was, in fact, murdered, who admittedly are very visible, but for some reason somebody determined at that time that it was desperately important that he had to die.

But who exactly was it that could decide that so-and-so had to die?

I was advised by a telephone call from someone I had met in a high-stakes poker game that I should go to Vito's(P) Cafe on the second Thursday of each month and see who always ate lunch there at a table in an alcove.

For six months I went to the cafe as advised. It was indeed interesting to see, week after week, gathered at one table and talking low enough not to be heard by anyone else: the assistant chief of police, an assistant prosecuting attorney, an undersheriff, and an attorney from a firm of lawyers that specialized in criminal law.

These four people met regularly every other Thursday. Rarely, however, was the luncheon limited to just the four. A local contractor, a realtor, a businessman whose firm specialized in "investments," the head of the Far West Novelty Company and president of the Amusement Association, a hotel owner, a member of the city council, a member of the county board of supervisors, an official of the local Teamsters Union, and once a newsman from one of the city's leading newspapers.

A friend told me that one of the regulars at the Thursday luncheon would like to talk to me. A meeting was arranged, and I met Von Bennett (P) at a bar. While we were drinking beer, I taped our conversation:

Q: ____ said you would tell me about the Thursday lunch group.

A: That's the meeting of the local Mafia.

Q: What do you mean by that?

A: They're the boys that run the rackets: drugs, gambling, girls, bootleg whiskey, pinballs�all that stuff.

Q: Well, that doesn't make sense to me. I have heard that ____ is the major person in the rackets-at least in some of the rackets-and he never goes there, does he? I at least haven't seen him.

A: Yeah, you're right, but that doesn't mean these guys don't run the rackets. It's like this: they work for guys with either political or police pull. They control those guys either because the big guys take a cut or because they have something on them. So this group kind of coordinates things. And they keep in touch with people in diverse fields, from bingo to booze.

Q: But how are they a Mafia?

A: Well, not like you read about a Mafia with a tightly knit organization, but these guys are as close as we come out here. They've got the most�a finger in every pie-but still, as you say, there's lots of others . . . all getting rich from the rackets....

The people who are getting wealthy from the rackets are not the cafe, tavern, or cardroom owners. The people who are getting wealthy are the businessmen with capital to invest in an expanding, high-profit business, politicians and law-enforcement officers who can convert political or police power into wealth. It is an interesting, fascinating illustration of the two-faced nature of the adage that wealth is power. That is certainly true, but the other side is equally true: power makes wealth as well.

The network members who met regularly were more or less elected representatives of the business, political, and law-enforcement groups that profited most from the rackets. For a while Charlie MacDaniel was a problem for them when he was refusing to pay off and later when he tried (in vain) to publicize the existence of widespread corruption in the police department. The inner circle of the network, after consulting with their bosses and co-owners who stayed in the shadows, tried various strategies to deal with him.

The kind of publicity created by MacDaniel was extremely bad for some of the most important people in the network. Businessmen who thrived on the image of Seattle as a "clean city" and a "nice place to live" knew of the underlying life of crime, but they wanted to keep those realities from public inspection at all cost. Politicians knew of the potential careers ruined by public exposure of links to anything smacking of organized crime, so they wished to keep things quiet as well. But there were cross-pressures at work that were equally important to the smooth functioning of a crime network. A person who refused to pay his proper share (whether through the payment to the police or to the "syndicate") was a threat to the entire system. If Charlie MacDaniel didn't pay, there would be a lot more tavern, cafe, cardroom, and other business owners on the fringe of legality who would take Charlie as a model and refuse to pay as well. Thus, if someone caused trouble for the organization of vice in the city, a calculation had to be made as to how best to deal with the threat. In the case of Charlie MacDaniel the calculation that evolved out of dealing with his periodic balking at "playing the game straight" resulted in his being run out of business, out of the city, and eventually out of the state.

Notice, however, that the acts which constituted a "policy" with respect to a "problem" were the result of a process, not of a decision. True, someone decided what to do, but it was a matter of a series of individual decisions made by people who shared the same interests and views rather than a ruling passed down by a boss. To the extent that there was a boss, he may or may not have agreed with what finally constituted the policy. But whether he agreed or not, the policy resulted from the process of coping with a problematic situation. And, of course, some of the different people and groups involved in network activities had different interests.

One feature of criminality that is almost always overlooked is the extent to which businessmen who operate a presumably legitimate and wholly legal enterprise are involved either overtly or covertly in criminal activities. More often than is ever acknowledged by law enforcers or investigators, businessmen are the financiers behind criminal operations. In Seattle one of the city's leading jewelers served simultaneously as a financier for large drug transactions and as a fence for stolen jewelry. Often businessmen are co-opted by business and friendship ties to members of the network. A vice-president of one of the city's leading banks was a close associate of the county prosecutor, lunched with him, contributed his personal endorsement to the prosecutor's political campaigns, invested in things the prosecutor recommended, supplied links to other businessmen for the prosecutor, arranged loans, and so forth. Both the vice-president of the bank and a jeweler were key members of the network. Their money financed criminal activities and they reaped huge profits from them.

Newsmen on the city's leading newspapers were also implicated. In one case it was principally through receiving gifts from various members of the network. There were also rumors that an editor received a monthly income from the network. This seems unlikely, for the editor was not only co-opted by friendship and small favors, but the newspaper was opposed to exposing any graft or corruption lest the city reassess the value of the newspaper's property. A local politician and one-time candidate for sheriff possessed information linking an editor of one of the newspapers with a national wire service that reported racing results. The police were also aware of these links. This information was never made public, perhaps because the keepers of the news are in the end the safest possible mediums for conducting illegal business activities.

There is clearly no "godfather" in the crime network, no single man or group of men whose word is law and who control all the various levels and kinds of criminal activities. There is, nonetheless, a coalition of businessmen, politicians, law enforcers and racketeers (see diagram) who have a greater interest in the rackets than anyone else, who stand to lose the most if the operation is exposed, and who also have the power to do something when it is called for. These men do not have unlimited power, to be sure, and they must assess their power in each incident to see what is the best strategy to follow. Thus, when someone firebombed competitors, there were some in the network who wanted to acquiesce to his demands, some who wanted to wait and see, and others who wanted to "kill that crazy son of a bitch." Killing him was a very dangerous alternative since it would surely create adverse publicity and hostility between various groups involved in the rackets. Letting him in might have the same effect. Eventually the head of the pinball operation agreed to let him in for a high price, with the tacit agreement of the other pinball operators. But the chief of police resisted and was apparently able to force Bill out of the state.

Incidentally, a leading state politician who was also involved in the rackets arranged for Bill to obtain employment with a criminal syndicate in another state. Bill apparently decided that discretion was the better part of valor.

Bill's brother Frank owned a string of taverns and cabarets, a few hotels, and the major jukebox distribution company in the state; and he allegedly controlled most of the white prostitution rings in the city. After a visit to one of his cabarets I made this record:

Frank plays with his keys constantly as he sits on the edge of his chair in his Starfire Room Cabaret. The naked women dancing on three stages simultaneously and the waitresses serving watered-down liquor stop by occasionally and ask him a question. He hands one of them the keys and gets up from time to time to do something in the back room. One of the women occasionally disappears upstairs with a customer. Frank looks totally bored by the scene. The money he's making, the naked women he's employing, the conversation about the rackets and his role in them are all old hat. What interests him is the possibility that once again, at age fifty-three, he may be going back to prison. This time it will be hard time. This time he does not have the promise of something big when he gets out. This time he will lose rather than gain.

Frank spent eighteen months in prison in 1942-43. Those months were "no picnic," but he was sustained that time by a promise given, the promise by a young politician that if Frank "took the fall" and served the sentence he would be 11 amply rewarded" when he was released. It was a fair deal, fair for the politician, fair for the others involved, and fair for Frank.

Frank was the son of a vegetable farmer in the county. His family was comfortable but neither notorious nor wealthy. He and some of his young friends were untouched by crime or rackets to any significant degree, but they were touched by the sin of many American men-womanizing. One of the women that Frank slept with regularly was only sixteen years old. She was also sleeping with several of Frank's friends. The young woman was arrested, and she confessed to the police that the older men had been having sex with her for some time. The police threatened all four of them with jail sentences. The four men denied the charge, and the police had only the uncorroborated testimony of the girl.

A young lawyer who was active in politics managed the business affairs of Frank's family. The four accused rapists fell to arguing among themselves as to how to get out of the predicament. They called in the family's lawyer to mediate. The lawyer contacted the police, who told him that someone had to stand trial. The police agreed, however, to drop charges on all but one of the defendants in return for a guilty plea. The lawyer took out a checklist and added up the pros and cons of having one of the four plead guilty to the charge. Some were married, some had businesses that would suffer; Frank was single and could afford the stigma. He was also only twenty-three, so the effect of having sex with a sixteen-year-old would look less awesome. The lawyer promised there would be no jail sentence, only probation or a suspended sentence. He also promised that when it was over the other men would put up the money to set Frank up in business.

The lawyer's power to negotiate a deal was less than he indicated it would be. He did get the charges dropped on everyone but Frank, but Frank had to spend eighteen months in the state reformatory. On release, however, the lawyer kept his promise and set Frank up with a liquor license, a tavern, and a going business, without Frank's having to invest any money.

While Frank was building his tavern business, the young
lawyer was building a political career that led all the way to
the state legislature. Frank and the lawyer-politician re-mained close and trusted friends. Frank, it was said be came the state politician's personal bagman. He went to the various rackets in the city and collected a monthly tithe. He collected, for example, a thousand dollars a month from the owners of bingo clubs. It was a substantial amount of money, but the profits from the bingo operation were sufficient to easily underwrite this and numerous other profit shares the owner made.

The next thirty years were good ones for Frank. He expanded his first club into the ownership of numerous other clubs, part ownership of the major jukebox distributorship in the area, partial control of some of the pinball operations, and he handled some of the organized prostitution in the city, especially the prostitution that ran out of taverns and nightclubs.

Frank also became a force to contend with. He was one of the people in the rackets who could stand up to county politicians and come away intact. On one occasion a leading politician called Frank in to put him in his place. According to someone who witnessed the encounter, when Frank entered the room, the politician said, "I understand you are the biggest pimp in the state." Frank replied, "Yeah, and I hear you like to play with little boys."

The politician had probably expected a humble racketeer to grovel at his feet. But Frank's own position in the rackets and his connections with state politicians plus some important influence in Washington, D.C., were sufficient to make it impossible for the local politico to squash him.

This did not elevate Frank to a position of omnipotence. Both he and the others would have eliminated their opponents in a moment if it could have been done without jeopardizing their own operations. But they could not. So an unappealing alliance prevailed year after year. Occasionally harsh words were spoken; threats and attempts to oust leading political supporters of each other's camps were made. But the detente persisted and indeed would persist today were it not for the fact that in time another faction emerged with the power to squash both parties to this alliance, but that gets us ahead of the story.

Two members of Seattle's leading families were also implicated through various business transactions with members of the network. The business transactions invariably came recommended by a leading local politician and brought the investors huge returns on small investments. They certainly should have realized that the enterprises were illegal, but in any case they participated and showed their appreciation by supporting the politician in the face of all sorts of opposition. When, for example, their political-business ally was threatened with exposure by a newly appointed U. S. attorney, these two businessmen flew to Washington, D.C., where they consulted with a personal friend who was an adviser to President Nixon. They asked him to have Nixon stop the inquiry. For reasons that will be taken up later their request was refused and the inquiry continued.

There were other positions (rather than individuals) that were crucial to the network's success. Two bear particular attention: the head of licensing for the county and the tax assessor. The people in these positions were never very powerful. Their careers were entirely in the hands of politicians. Nonetheless, what they did at their behest was of considerable importance to the network's continuance.

There were "considerate" assessments made on the taxable property Of the two leading newspapers, the fact of which could then be used to keep them from publishing news the prosecutor did not want made public. There was also a payoff made to some politicians, a small part of which was sent down to the assessor through a firm in Portland, Oregon. This firm was hired by at least two of the state's largest industrial firms to keep the tax assessments on their corporation properties much lower than they should have been. Small wonder that the owners of these businesses always supported the cooperative politicians when they ran for office.

The head of the licensing division of the county also received a share of the profits, as well as some smaller payoffs he arranged by himself. To operate a tavern, a cabaret, a cardroom, a taxicab, or even a tow-truck company, it was necessary to have a license issued by the city's licensing division. These licenses were no less than a piece of very valuable property. They virtually guaranteed substantial profit from investment. The number of such licenses was kept to a level where anyone who had the license was certain to have his services heavily in demand. A tow-truck license cost ten thousand dollars "under the board." Depending on its location and potential, a tavern or a cabaret could cost fifty thousand dollars (plus monthly payments) to license. A cardroom might cost only one thousand dollars since there was not the certainty of profit accumulation from the cardroom. Monthly payments, however, would vary according to profits, as we have seen.

Liquor licenses were handled at the state level. The liquor board consisted of three men, all appointed by the governor for staggered nine-year terms. This board was the source of incredibly large sums for "campaign contributions" and outright graft for state politicians, especially those in positions influencing licensing and liquor policies.

At the root of the crime network's operation was the money that got shuffled from the people who operated the rackets-the bookie, the numbers man, the whorehouse operator, the drug trafficker, the cardroom manager, tavern owner, or pinball operator-to the politicians, law enforcers, and businessmen who protected the network and its enterprises. The amount of money shuffled, as we have seen, was staggering.

The day-to-day decisions might have rested in the hands of seven, nine, or ten men who consulted regularly with the other principals in the network. But for such a widespread and profitable system to persist, a set of relations far more extensive than this and beyond mere payoffs had to develop, especially since the task of maintaining control over the various enterprises and the people involved was a task of major importance to everyone. As we shall see in the next chapter, the problem of maintaining control was much more complicated than first met the eye.

CHAPTER FIVE

Maintaining Control

SHARED INTERESTS are the root of the forces of social control that maintain silence and ensure mutual cooperation among the members of the network and those who work for it. The device by which all these people come to share an interest in maintaining corruption and widespread criminality is the payoff. Principally payoffs are in cash, the oil of capitalism's machinery. This money provides cash to meet monthly bills, to pay gambling debts, to finance political campaigns, to send children to private schools, to bribe officials for special favors, or simply to pay wages somewhat above those earned by comparable workers in "legitimate" employment.

There are gifts that supplement payoffs: a color television given to the newscaster, an antique automobile for a bank vice-president, a loan to a local businessman. And there is the use of public office to gather information that gives someone a special advantage in making a handsome profit from a small investment.

Those who cooperate and join the network are well rewarded. A routine and moderately paid government job can be turned into a source of wealth or at least considerable luxury. Seattle police captains received monthly stipends of five to eleven hundred dollars from the network. These, however, were the more blatant and in many respects less important techniques by which the network maintained control. More important by far were the people who moved from one position of power and influence in the government-business structures to another, all the time maintaining links with or control over important segments of crime enterprises. A few cases illustrate the interpenetration of different political and economic structures of network members.

1. A police officer and police inspector who worked directly under officers who coordinated payoffs within the police department was handpicked by a leading local politician to run for the office of sheriff when there was an opening. He was successful in his campaign. Afterward he received his salary as sheriff and large monthly sums as his share of network profits from the county.

2. A U.S. Coast Guard commander who was friendly with network members, upon retirement from the Coast Guard, was appointed to the state liquor board.

3. A fireman from the city cooperated with the crime interests by inspecting and harassing businesses or businessmen who refused to cooperate with the network. He also assisted in the destruction of some property network members wanted to burn in order to collect insurance. After five years as a fireman he joined the police force and was appointed to the vice squad, where he continued to work as a network member for seventeen years. With the support of leading people in the political power structure of the city, he was elected to the city council, where, along with the president of the council, he worked diligently to protect the interests of network members. While on the city council he was appointed head of the licensing committee, from where he was able to control the licensing of both legitimate and illegal businesses.

4. Agents of the Federal Bureau of Investigation who either worked closely with network members or were suspiciously unconcerned about corruption were able to remain in the Seattle office for unusual lengths of time. On retirement they were offered attractive jobs in government and business. Contacts with network members were then used to bring in substantial business to their companies or law firms. The companies were of course pleased with the business and with the political contacts a former federal law officer brought to the business. For his part, the agent might be increasingly important in network policies and could direct several businesses central to network interests.

5. A former sheriff who worked closely (but not too wisely) with the network was appointed to the state parole board. In this position he was able to manipulate prison terms for network members as well as to punish persons who did not cooperate with them. He was also in a position to shorten prison sentences for people able to make payoffs to leading members, including, of course, himself. Most important, he could see that network members were able to "do a favor" for a politician or businessman who wanted to "help out a friend" by getting someone out of prison. Such mutual aid was a crucial ingredient in maintaining control.

This list of people who moved from position to position as the network solidified its control over local and state politics and law enforcement could be expanded to include judges, state legislators, and political officeholders at all levels. The examples selected are neither extreme nor unusual. They are, in fact, quite typical of how a crime network maintains control. They are typical of how American politics works. The fact that the profits that underlay the establishment of the network of crime were from business ventures that were illegal does not alter the fundamental fact that the process by which these interrelationships developed and persisted was no different from the process by which the same networks and interdependencies emerge and persist between enterprises that are legal and the political law-enforcement system.

For the system to work effectively there must be enough income to warrant mutually shared interests protecting and perpetuating illegal activities. Such a network would not arise to protect the interest of people devoted to the rehabilitation of derelict alcoholics.

The Business Community

People engaged in the manufacture, sale, or distribution of goods or services that are legal get involved with crime networks by pursuing profits in precisely the same way they pursue profits in legitimate business. The "decision" to join a network is often more an accident than a design:

I met Jay(P) at the Rainier Club. We liked each other. We both had played sports in college and had a lot in common. We also like to drink and horse around. Then one day he called and told me he knew of a possibility for turning a nice profit if I had some unused cash lying around. It was a perfectly natural thing. Businessmen are always doing things like that. So I invested a good deal of money on Jay's recommendation. I guess I should have looked into it more carefully, but I had no reason not to trust him. After all, he was a well known politician at the time. He told me it was to be used to import some things from Taiwan. I never saw a bill of lading though I see now I should have asked. Only later did I discover that I had purchased ten percent of a heroin shipment. I doubled my money in two months. Naturally, I didn't want to ask too many questions with that kind of profit. The next time Jay called I was ready to sell my wife to make the investment. We bought land together and some phony business connected with an amusement company, and Jay passed on tips to me about land deals. I liked the guy, and we agreed politically on most Issues though he was a little too conservative for my blood. Still, in view of our friendship and everything I contributed heavily to his political campaigns and even supported him publicly....

Similar patterns prevailed throughout the community. A realtor became involved by learning of an opportunity to invest in a hotel. The realtor was approached by a lawyer who did not identify his clients. The lawyer's clients, the realtor was told, were interested in purchasing an old hotel suitable for renovation. The location was not important, but the hotel did have to be in poor condition. The realtor found a suitable hotel, which the lawyer then authorized the realtor to buy for his clients. The realtor agreed to accept a share of the hotel as his commission.

The lawyer and his clients formed a corporation. They became a public corporation and sold stock. The proposed purpose of the stock was to raise capital to renovate the hotel. Few of those who invested over a million dollars ever saw the hotel. Nor were they ever aware of the caper in which they took part.

The corporation borrowed several million dollars (from the bank of which a member was vice-president) on the strength of the capital raised by selling stock. Contracts were granted for reconstruction. The principal contractor was a man who had moved to Seattle from Detroit, where he had been a member of a crime network that controlled much of the building industry in that city. The contractor agreed beforehand to kick back to the lawyer and his clients 50 percent of the value of the contract. When reconstruction of the hotel supposedly began, the insurance was increased commensurate with the construction that was allegedly taking place.

The insurance was prorated according to reports given to the insurance company by the contractor as to how far along construction had progressed. When the construction was supposedly nearly completed and insurance was close to its peak, the hotel burned down. In actuality, of course, the hotel had barely been touched. The money that was to have gone for reconstruction had mostly been skimmed off by those who formed the corporation and by the contractor. The insurance company paid the full amount. The stockholders were paid off, the company was liquidated, the state purchased the vacant lot on which the hotel had stood, and the stockholders profited a little. The criminal network profited a lot. Not only had they increased their capital by making a "shrewd investment," but they had along the way gained the friendship and allegiance of an important local realtor, who was most pleased that his commission had turned into such a handsome profit. The insurance company raised the price of next year's insurance by a fraction of a penny to cover the loss.

Property and the State

State, county, and municipal governments manage an enormous amount of property. They manage buildings that house government offices, municipal parking lots, jails, courts, roads, highways, and public buildings. They also manage and control licenses, franchises, and other forms of property that are the source of incredible profit to those who can acquire them.

Property, whether in the form of land, buildings, or franchises and licenses, is the cornerstone of capitalism. The property managed by the government for the most part (but not entirely) is "soft" property in the form of licenses, franchises, and information. The governor of the state, the county board of supervisors, the municipal governing board or mayor, the heads of licensing committees in the legislature or in the government control much of the soft property. It is used for a variety of purposes, of which the cementing of power and the conversion of power into wealth are the most important.

In 1964 a Republican replaced the incumbent Democrat who had been governor for two terms. One of the new governor's first official acts was to transfer over one million dollars in state insurance to the insurance company for which the governor had worked before his election.[5] The outgoing governor amassed a personal fortune while in office. In one instance he purchased a piece of land for $8,327 and sold it for $250,000.

There are good reasons in the legitimate business community for a crime network. Many of the city's legal businesses thrive or decline to the extent that goods and services provided by a crime network are available. One such industry is tourism. Hotels, restaurants, and taverns profit and thrive on vice.

An important ingredient in Seattle's economy is tourism. An important fact of tourism, in turn, is the attraction of conventions. Men who come to conventions are attracted to cities where gambling, prostitution, pornography, and various other "pleasures" are readily available. No one has to articulate this fact of life in order to have people in politics, business, and law enforcement adopt policies that conform to it:

... everybody knew that a decent city that is growing has to have whores, has to have accessible liquor, prohibition or not, has to have a place where a guy can go and shoot craps, either for penny ante or high stakes, has to have a place where a guy can go and play cards. There's no reason putting somebody in jail for it, because it is what all good, righteous Christians do.


Law-Enforcement Agencies

Shared interests stretch farther than mere economic ties. Shared interests occur on a very broad level and should be understood as stemming basically from contradictions which inhere in the political and economic structure of American cities. To understand this, it will help to view the role of laws in the shaping of crime networks. Laws prohibiting gambling, prostitution, pornography, drug use, and high-interest rates on personal loans are laws about which there is a conspicuous lack of consensus. Even persons who agree that such behavior is improper and should be controlled by law disagree on the proper legal response. Should persons found guilty of taking drugs, gambling, or visiting a prostitute be imprisoned or counselled? Reflecting this dissension, large groups of people, some with considerable political power, insist on their right to enjoy the pleasures of vice without interference from the law.

Those involved in providing gambling and other vices enjoy pointing out that their services are profitable because of the demand for them by members of the respectable square-John community. Prostitutes work in apartments located on the fringes of the lower-class area of the city, rather than in the heart of the slums, precisely because they must maintain an appearance of respectability so that their clients will not feel contaminated by poverty. Professional pride may stimulate exaggeration on the part of the prostitutes, but their verbal reports are always to the effect that "all" of their clients are "very important people." My observations of the comings and goings in several apartment houses where prostitutes work generally verified the women's claims. Of some fifty persons seen going to prostitutes' rooms in apartment houses, only one was dressed in anything less casual than a business suit.

Watching those who frequented panorama gave me the same impression that the principal users of vice are middle and upper class. During several weeks of observations (leaning against the wall), I observed that more than 70 percent of the consumers of these pornographic vignettes were well-dressed, single-minded visitors to the slums who came for fifteen or twenty minutes of viewing and left as inconspicuously as possible. The remaining 30 percent were poorly dressed, older men who lived in the area.

Information on gambling and bookmaking in the permanently established or floating games is less readily available. Bookmakers report that the bulk of their "real business" comes from doctors, lawyers, and dentists in the city:

A: It's the big boys-your professionals�who do the betting down here. Of course, they don't come down themselves; they either send someone or they call up. Most of them call up, 'cause I know them or they know Mr. ____ [one of the key figures in the gambling operation].

Q: How 'bout the guys who walk off the street and bet?

A: Yeah, well, they're important. They do place bets and they sit around here and wait for the results. But that's mostly small stuff. I'd be out of business if I had to depend on them guys.

The poker and card games held throughout the city are of two types: 1) the small, daily game that caters almost exclusively to local residents of the area or working-class men who drop in for a hand or two while they are driving their delivery route or on their lunch hour, and 2) the action games that take place twenty-four hours a day and are located in more obscure places, such as a suite in a downtown hotel. Like prostitution, these games are on the edges of the lower-class areas. In Seattle the action games were the playground of men who were by manner, finances, and dress clearly well-to-do professionals and businessmen.

Not all business and professional men partake of the vices. Indeed, some of the leading citizens sincerely oppose the presence of vice in their city. Even larger numbers of the middle and working classes are adamant in their opposition to vice of all kinds. On occasion, they make their views forcefully known to the politicians and lawenforcement officers, thus requiring public officials to express their own opposition and appear to be snuffing out vice by enforcing the law.

The law-enforcement system is thus placed squarely in the middle of two essentially conflicting demands. On the one hand, the job obligates police to enforce the law, albeit with discretion; at the same time, considerable disagreement rages over whether or not some acts should be subject to legal sanction. This conflict is heightened by the fact that some influential persons in the community insist that all laws be rigorously enforced, while others demand that some laws not be enforced, at least not against themselves.

Faced with such a dilemma and such an ambivalent situation, the law enforcers do what any well-managed bureaucracy would do under similar circumstances. They follow the line of least resistance. Using the discretion inherent in their positions, they resolve the problem by establishing procedures that minimize organizational strains and that provide the greatest promise of rewards for the organization and the individuals involved. Typically, this means that law enforcers adopt a tolerance policy toward the vices, selectively enforcing the laws when it is to their advantage to do so. Since the persons demanding enforcement are generally middle-class and rarely venture into the less prosperous sections of the city, the enforcers can control visibility and minimize complaints merely by regulating the location of the vices. Limiting the visibility of such activity as sexual deviance, gambling, and prostitution appeases those who demand the enforcement of applicable laws. At the same time, since controlling visibility does not eliminate access for persons sufficiently interested to ferret out the tolerated vice areas, those demanding such services are also satisfied.

Cooperation and Control

The policy of cooperating in order to control the vices is also advantageous because it renders the legal system capable of exercising considerable control over potential sources of real trouble. For example, since gambling and prostitution are profitable, competition among persons desiring to provide these services is likely. Since legal remedies are lacking, the competition tends to become violent. If the legal system cannot control those running the vices, competing groups may well go to war to dominate the rackets. If, however, law-enforcement agents unofficially cooperate with some, there will be enough concentration of power to minimize conflicts. Prostitution can be kept clean if the law enforcers cooperate with the prostitutes; the law can thus lessen the chance, for instance, that a prostitute will steal money from a customer. In this and many other ways the law-enforcement system maximizes its visible effectiveness by creating and supporting a shadow government that manages the rackets.

Initially, people may have to be brought in from other cities to help set up the necessary organizational structure. Or the system may have to recruit and train local talent or simply co-opt, coerce, or purchase the knowledge and skills of entrepreneurs engaged in vice operations. This move often involves considerable strain, since some of those brought in may be uncooperative. Whatever the particulars, the ultimate result is the same: a crime network emerges�composed of politicians, law enforcers, and citizens�capable of supplying and controlling the vices in the city. The most efficient network is invariably one that contains representatives of all the leading centers of power. Businessmen and bankers must be involved because of their political influence, their ability to control the mass media, and their capital. The importance of cooperating businesses was demonstrated in Seattle by the case of a fledgling magazine that published an article intimating that several leading politicians, in particular the county prosecutor, were corrupt. Immediately major advertisers canceled their advertisements in the magazine. One large chain store refused to sell that issue of the magazine in any of its stores. When one of the leading members of the network was accused of accepting bribes, a number of the community's most prominent businessmen sponsored a large advertisement declaring their unfailing support for and confidence in the integrity of this "outstanding public servant."

The network must also have the cooperation of lawyers and businessmen in procuring the loans which enable them individually and collectively to purchase legitimate businesses, as well as to expand the vice enterprises. One member not only served along with others in the network on the board of directors of a loan agency, but he also helped wash money and advise associates on how to keep their earnings a secret. He served as a go-between, passing investment tips from associates to other businessmen in the community. In this way a crime network serves the economic interests of businessmen indirectly as well as directly.

The political influence of the network is more directly obtained. Huge tax-free profits make it possible to generously support political candidates. Often the network members assist both candidates in an election, thus assuring influence regardless of who wins. While usually there is a favorite, ultra-cooperative candidate who receives the greater portion of the contributions, everyone is likely to receive something.

Like all activities of the criminal network, political influence is obtained in a variety of ways. An ambitious and talented young lawyer decides to run for senator. He is running behind his opponent. He knows that his main problem is inadequate campaign financing. One night he receives a telephone call from a lawyer acquaintance asking to talk with him. They go for a drive, and in an isolated parking lot outside the city the young candidate is given an envelope containing thirty-five thousand dollars in onehundred-dollar bills. The acquaintance tells him, "This is from some of the businessmen downtown who want to support you in your campaign."

pps. 50-93
=====

CHAPTER SEVEN

The Higher Circles

DURING ONE OF Seattle's seemingly endless winters, I began to feel permanently enveloped in the greyness of sunshineless days. Basking in the gloom cast by the drizzle, I sat with a prominent local attorney in one of the better restaurants in the city. The attorney had on occasion invested in illegal ventures. We had become friends during the course of my research, and he had helped me penetrate the upper echelons of the criminal network that managed Seattle's illegal businesses. On this occasion he had called and asked me to lunch. After an appropriately unfocused conversation of fifteen minutes he paused and said, "Did you know that Meyer Lansky was in town the other day? You know his son lives in Olympia?" This attorney and I had talked about Meyer Lansky before. We both knew him to be one of the major financiers of illegal businesses in the United States. He continued, "Meyer contacted ___ [a lawyer known to be a principal go-between for network members]. He told him to pass the word to Rosellini that Meyer would pay everything necessary for Rosellini to run for governor."

That was as gloomy as the weather. It nonetheless brightened the conversation. We talked at length about why Lansky would be willing to invest such a large sum of money in the state's governorship. We did not unravel the mystery that afternoon, but this information started me in the direction I needed to understand not only Lansky's unusual offer but the connection between what was happening in Seattle and what was happening elsewhere in the United States at that time.

Outside Connections

When the crime network was in full swing, on the fifteenth of every month a member of the state House of Representatives flew from Seattle to a city a thousand miles away carrying a satchel full of one-hundred-dollar bills. This was "washed money," which had been filtered from gambling profits through a bank. The amount in the satchel varied depending on how much of the bookmaking profits had to be "laid off' during the preceding month, how much the investors from other cities had coming as their share of profits from various illegal transactions in the city, and how much (if any) local profiteers wished to invest in businesses run by network operators in other cities.

Despite the mythical character of the idea of a Mafia, there is nonetheless a national crime network, the structure and organization of which parallels rather closely the structure and organization of the network in Seattle. That is to say, it is a loose affiliation of businessmen, politicians, union leaders, and law-enforcement officials who cooperate to coordinate the production and distribution of illegal goods and services, for which there is a substantial consumer demand.

The satchel the state congressman carried out of Seattle every month flew with him to an expensive bar, to a lawyer who represented illegal interests in that city. The lawyer took the satchel with him to his office, where he added its contents to an even larger amount gathered from his own city's illegal businesses. The entire amount was then flown to Las Vegas, where a representative took the money. A few days later the currency was converted to larger bills, added to the "skim" from Las Vegas casinos, and flown to Florida. Meyer Lansky took his share of the profits and sent the remainder off to investors and associates in other citiesNew Orleans, Cleveland, Detroit, and New York-whose investments entitled them to a certain share of the profits from Seattle, San Francisco, Las Vegas, and Miami.

Crime networks flourished in the cities of America during prohibition. Many of the leading personalities in these associations had begun their upwardly mobile ascent out of poverty earlier, when they were employed by businesses as strikebreakers. Some were later employed by or actively engaged as members of labor unions to combat the violence of businesses that tried to break union inroads.

But prohibition was the impetus for the emergence of organized efforts to provide the illegal commodities that people wanted, namely alcoholic beverages, and the services they were willing to pay for: gambling, prostitution, high-interest loans, and so forth.

Following World War II the growth in wealth and power of crime networks was unmatched by the growth rate of any other industry. The nation's economy, which was thriving on the discovery of credit buying, on the wealth to be had from the expropriation of resources of less-developed nations, and on the markets won by dividing the world up with the Soviet Union, created an affluence that seemed boundless. Commodities and services that were illegal were in heavy demand. Profits were incredible. Restrictions were minimal..

The associations shared similar problems of existence. They had incredibly high profits from gambling, drugs, and usury which they wanted to invest. But where? How? The economy and criminal operations were expanding everywhere, and the investment of excess capital was critical. Furthermore, with their expanded operations, they were also in need of federal influence. The growth of the bureaucracy in Washington posed an ever-increasing threat to criminal operations. Payoffs and cooperation of local and state governments were sufficient to ensure relatively trouble-free operations locally, but federal agencies, controlling drugs and federal crimes as well as federal legislation that could either facilitate or impede operations, became increasingly important. Crime networks benefited from the same economic and political climate that benefited other businesses from 1945 on.

The situation was replete with opportunities for someone who could provide investment opportunities and federal political clout. As is always the case in situations such as this, someone came along for the job. That person was a man long associated with criminal operations in New York and a close associate of most of the leading crime figures of the thirties, Meyer Lansky.

Meyer Lansky had a shrewd businessman's eye for discovering new territories and creating impressively high profits for his associates, namely people who ran or profited from network operations in cities like Cleveland, New York, Cincinnati, and Kansas City.

Lansky's empire began with a fairly modest investment in Broward County, Florida. The Colonial Inn was south Florida's first major gambling and entertainment establishment outside of Miami Beach. Investors in the club included the major figure in Detroit's crime network, Mert Wertheimer, who owned one-third of the Colonial Inn, and Joe Adonis, leading racketeer in one of New York's networks, who owned 15 percent. Lansky kept 16 percent for himself and distributed the remainder among his close friends and relatives. The profits were staggering, even by syndicate standards where profits less than 20 percent are considered losses. From Florida, Lansky moved into Cuba, where profits were even more impressive and where he also purchased the goodwill, friendship, and protection of Fulgencio Batista, the Cuban president before the socialist revolution. To top off these investments, Lansky invested heavily in the heroin traffic from Turkey and France and opened a hotel gambling casino in Las Vegas. By so doing, Lansky assured himself of the undying loyalty and admiration of even the most anti,-Semitic members of crime networks across the nation. Mark it, however, that he was no 1, godfather." He was simply a well-respected, trustworthy investor with excellent political connections-connections which were able to get even Lucky Luciano out of prison on a pardon.

Lansky also had an almost unerring eye for the political payoff system. He chose his candidates well, but he also covered himself (and those who depended on him for help) by financing candidates who competed with each other. Thus, he paid handsomely into the campaigns of both Thomas E. Dewey and Franklin Roosevelt. He contributed to the political campaigns of Lyndon Johnson, as well as Hubert Humphrey, George Smathers, Russell Long (and Huey Long before him), John Connolly, Richard Daley' Albert Rosellini, and Edmund Brown, to mention only a few.[10] But he paid more here than there, a fact that was ultimately to be his undoing. Those who play the political payoff game take the chance of financing the loser. When that happens, their fortunes fall as surely as they rose when they financed the winner.

Like his brothers and sisters in private industry, a syndicate leader is measured by the profits he produces. The stockholders are the profiteers from crime operations in New York, Trenton, New Orleans, Las Vegas, Seattle, Portland, and cities across the country. Also, like his brothers and sisters in private industry, a successful syndicate operator must manage political payoffs to ensure the protection of crime network interests. Meyer Lansky probably has done both jobs better than anyone in the history of organized crime.

The years from 1932 until 1964 were Democratic years almost everywhere. Naturally Lansky placed his money, at least a disproportionate amount of it, in the hands of Democrats. In Seattle as elsewhere he worked diligently for Democrats. It paid off. judges were appointed, legislation passed, and protection provided. Lansky's investments in the Democratic Party were often coordinated with, or given through, trade unions, especially the Teamsters.[11] Whether given directly or indirectly, the money funneled to politicians in the form of "campaign contributions" or bribes was designed to purchase influence. As newscaster David Brinkley observed:

George Meany of the AFL-CIO is fawned over in Washington but not entirely for his intellectual brilliance. And not because he can deliver labor's votes. He can't. What he can deliver and does deliver is political money.

The present U.S. Ambassador to Great Britain was not appointed for his contributions to creative foreign policy and diplomacy but for his contribution of political money. This is not new. Back in the fifties, the President appointed one of his big contributors ambassador to a country, then it was found he didn't even know where the country was.

So, jobs like that, and Washington influence, are in effect for sale. All it takes is money, political contributions in election years. If you give enough, Washington's favors can be yours�influence, flattery, social success, invitations to swell affairs, and even ambassadorships to countries with nice climates and cheap servants. Perhaps more important, influence on domestic policy, such as taxes, affecting your own business and income.

Running for office has become incredibly expensive, and candidates have to get money somewhere. The Democrats get a lot of it from the unions, and the Republicans get a lot of it from rich individuals and corporations.

No doubt, there are some rich unions and people charitable soul, who will give money expecting nothing return, but they are scarce. A big political contribution usually is seen as an investment. It's a scandal everyone admits. But it's worse now, because running for office costs more. Public cynicism about politics and politicians already runs high. If this is not cleaned up, the political system will come apart-with influence, dominance, and even control put up for sale to the highest bidder.[12]


It has been commonly accepted by those who play the political game seriously that a major source of Democratic Party revenue for the past fifty years has been a laborunion-crime network coalition.

The most important source of political money for the Democrats and Republicans alike is, of course, the contributions that flow from "legitimate" business, that is, from those businesses whose principal product is a legal one, although the means by which the business is conducted may be highly illegal. The means of conducting the business and the business itself may, in fact, be far more harmful to more people than the business of organized crime. Nonetheless, it makes sense to differentiate businesess whose main product or service is illegal, since this difference in legality does create important differences in the way the businesses are managed and how they function.

Despite the fact that both Democratic and Republican parties receive their major share of financing from legal businesses, the sad fact (from the Democratic Party's point of view) is that the Republicans receive the greater share of that political money. However, the labor-union-crime network funds that oil the Democratic Party's machinery help to equalize the disproportionate share of political money that legitimate business and industry give to the Republican Party.

From the 1930s and into the 1960s, there emerged an unspoken detente between Republican and Democratic leaders with respect to some of the major sources of campaign contributions. The Democratic and Republican parties came to control different sources of the available political money. Obviously, if either party could undermine a major source of the other party's political money, the balance of power so crucial to any workable detente would be severely threatened as the money shifted into the coffers of one party.

Shortly after his election to the Presidency in 1968, Richard Nixon began a campaign which, had it been successful, would have shifted much of the labor-union-crime-network political money from the Democratic to the Republican Party. Whether this was a knowledgeable plan on the part of Nixon and his political advisers is something we do not know. judging from the now available insights into how this group of men planned numerous political forays to increase their position of power, one suspects that the attempt to corner funds for their political interests may have been quite rationally made. In any case, whether by design or simply as a by-product of other decisions, the consequence for the balance of power between the Republican and Democratic parties would have been the same.

Nixon had long-standing and very close ties to a number of people whose business profits derived at least in part from illegal businesses. Regardless of how heavily involved in crime enterprises these associates and partners of Nixon were, it is tempting to speculate that they were involved enough in such places as Dade County, Florida; the Bahamas; Costa Rica; and Las Vegas, and in such enterprises as drug trafficking, stock frauds, bank swindles, and gambling casinos to have the wherewithal to run illegal businesses profitably.

The Nixon administration's campaign against "organized crime" was in fact a campaign against those crime networks that were most closely connected with Nixon's political foes, Republicans and Democrats. This campaign had the effect of eliminating the entrenched owners and managers of crime cartels, thus affording Nixon's associates and partners an opportunity to increase their share of criminal enterprises. To bring this about, the Nixon administration systematically exposed networks in Democratic Party strongholds, while ignoring networks who supported Nixon's wing of the Republican Party.[13] At the same time, the campaign against organized crime attempted to purge Meyer Lansky from his position as a major link between different organized crime interests and the Democratic Party.

Lansky's empire was vast. The Republicans' first attack was on his Las Vegas holdings. For this attack Howard Hughes was available to invest in the casinos and hotels, which Lansky was being forced to sell by state political pressure that threatened to end the skimming of profits which made the casinos so profitable, by subpoenas and indictments brought by Republican-appointed U.S. attorneys where Democrats had reigned heretofore, by Internal Revenue agents under Republican control, and by FBI agents under Republican control. So he sold out of Las Vegas, and Howard Hughes came in. Immediately the profits that were for political payoffs began moving into the Nixon campaign fund and out of the Democrats'.

In south Florida Lansky was indicted by a Republicancontrolled grand jury for perjury. In Las Vegas he was indicted for tax evasion.

Control of a Miami-based bank shifted from Lansky to Nixon associate Bebe Rebozo. Union funds that had gone to Lansky for investment and into Lansky's banks were transferred. Law firms that had had lucrative union contracts lost them to Republican firms; the Teamsters hired Nixon's own law firm. For all of this, the Republicans paid off. Nixon granted Jimmy Hoffa executive clemency, and Hoffa was released from prison. Frank Fitzsimmons, who was the replacement for Hoffa as head of the Teamsters, was publicly acknowledged by Nixon as being "welcome in my office any time; the door is always open to Frank Fitzsimmons."

It was not only the door to his office that was open; so too was the door to his airplane. In January 1973 the Los Angeles office of the Federal Bureau of Investigation learned that a syndicate leader from the Midwest was coming to Los Angeles to work with Teamsters officials to arrange a billion-dollar health insurance contract for Teamsters' members. Frank Fitzsimmons came to attend the final meeting. The FBI bugged the offices for seventytwo hours preceding the major meeting, but when they requested permission to continue the bug (which by federal law they had to do), the attorney general's office turned down the request. The meeting between Fitzsimmons, a Midwest associate, and insurance company officials took place, and the contract was signed. Fitzsimmons left immediately to meet Richard Nixon in Palm Springs, and they flew back to Washington, D.C., together. The International Herald-Tribune reported these events in the April 30, 1973, edition as follows:

Two ranking officials to the Department of justice eight weeks ago turned down a request by the Federal Bureau of Investigation to continue electronic surveillance that had begun to penetrate Teamsters's union connections with the Mafia, according to reliable governmental sources. Attorney General Richard G. Kleindienst and Assistant Attorney General Henry E. Petersen were said to have made the decision after 40 days of FBI wiretapping had begun to help strip the cover from the Mafia plan to reap millions of dollars in payoffs from the welfare funds of the International Brotherhood of Teamsters. The officials acted on the grounds that investigation had failed to show "probable cause" to continue eavesdropping, the sources said.

They reportedly acted after having received a memorandum, prepared at the direction of L. Patrick Gray III, who was then the bureau's acting director. The memorandum, which made no recommendations, indicated the sensitivity of the investigation, which was reportedly producing disclosures potentially damaging and certainly embarrassing to the Teamsters' president, Frank E. Fitzsimmons, the Nixon administration's staunchest ally within the labor movement.

Endorsement

The administration's cultivation of the two-million-member union culminated last year in a Teamster endorsement of the President's reelection, and Mr. Nixon has made it clear that the door to his office is always open to Mr. Fitzsimmons.

The Kleindienst- Petersen decision came less than a month before Charles W. Colson, special counsel to the President, left the White House to join a Washington law firm to which Mr. Fitzsimmons had transferred the union's legal business.

Before leaving the White House, Mr. Colson had been instrumental in formulating administration political strategy regarding organized labor.

The electronic surveillance began on January 26, under an order of the Federal District Court in Los Angeles authorizing the FBI to tap 11 telephone numbers in the offices of People's Industrial Consultant, 9777 Wilshire Blvd., Los Angeles, justice Department sources said.

The consulting firm is a Mafia front set up to channel Teamster welfare money to underworld figures, the sources said.

On February 14, the court authorized an extension of the tap until March 6. The taps were requested and installed under the omnibus Crime Control and Safe Streets Act of 1968.

FBI Affidavit

What was learned from the taps was described in an FBI affidavit submitted to justice Department lawyers. The affidavit asked for continuance of the existing surveillance for 20 days and installation of new taps on a public telephone and the office telephone of an alleged mobster implicated in the plot to siphon money from the Teamsters.

The affidavit said that investigation up to then, including the use of electronic listening devices, had indicated "a pattern of racketeering activity-that is, a series of payments of commissions or kickbacks" flowing from corporations controlled by a doctor in league with the mob through People's Industrial Consultants "to the officers and agents of the employee-welfare benefit plan," in violation of federal statutes.

Mr. Petersen and Mr. Kleindienst, however, would not allow an application for renewal of the court order.

A request Friday to the justice Department for comment from the two government officials went unanswered.

The FBI affidavit cited information reportedly given to the bureau by an informant in contact with an associate of Allen Dorfman, consultant to the Teamsters' billion-dollar Central States, Southeast and Southwest Areas Pension Fund, who began a federal prison term a month ago for conspiring to receive a kickback in connection with a loan application made to the pension fund.

"Source No. 3"

The informant, identified in the affidavit as "source No. 3," said that on February 8, at the Mission Hills Country Club in Palm Springs, California, Dorfman's associate introduced Mr. Fitzsimmons to Peter Milano, Sam Sciortino and Joe Lamandri, identified, by the FBI as southern California members of the Mafia. The Teamster leader was in Palm Springs participating in the Bob Hope Desert Classic golf tournament.

justice Department sources reported that, according to the informant, the three men presented to Mr. Fitzsimmons a proposal for a prepaid health plan, under which members of the union covered by its welfare program would be provided with medical care by Dr. Bruce Frome, a Los Angeles physician. Monthly medical fees for each union member would be paid by the central states fund from the millions of dollars contributed to it by employers under Teamster contracts.

In a 15-minute conference with the three, the informant added, Mr. Fitzsimmons gave his tentative approval and sent the group to a Palm Springs residence for definitive discussions with Dorfman.

The FBI were said to have learned that the next day Mr. Fitzsimmons met with Lou Rosanova, identified by justice Department sources as an envoy for a Chicago crime syndicate, which sought a percentage of the Los Angeles mob's take on the health plan.

Justice Department investigators say that they have evidence that the Chicago branch of the Mafia is determined to retain the access it had to the pension fund through Dorfman during James R. Hoffa's Teamster presidency. Hoffa was imprisoned after being convicted of tampering with a federal jury and pension fund fraud.

As a result, according to the federal agents, the Chicago Mafia members have kept a sharp eye on Dorfman and Mr. Fitzsimmons since Mr. Fitzsimmons gained clear control of the union.

In 1971, President Nixon commuted Hoffa's eight-year prison sentence, with a provision that precludes his holding union office until 1980.

Nixon's Plane

Rosanova and Mr. Fitzsimmons had talks again on February 12 at La Costa, a plush resort and health spa in San Diego County, according to the Orange County and San Diego County authorities. The same authorities reported that a few hours after that meeting Mr. Fitzsimmons boarded President Nixon's plane and flew to Washington with the President. Both Rosanova-Fitzsimmons meetings were reportedly observed by informants of the Orange County District Attorney's Office. On February 27, at La Costa, the same informants say that they heard Rosanova boast of a future payoff split between him and Mr. Fitzsimmons.

In its affidavit seeking an extension and a broadening of electronic surveillance, the FBI cited as a basis for its request Title 18, Section 1954, of the U.S. code, which prohibits commissions and kickbacks to union and welfare plan officials in return for the placement of union business.

Corroboration

During the 40 days the devices were in operation, the sources said, recorded conversations greatly supplemented and tended to corroborate information gathered in other phases of the investigation being carried on by the bureau and authorities in Los Angeles, Riverside, San Diego, and Orange Counties.

On February 9, the day after Milano, Sciortino and Lamandri allegedly met with Mr. Fitzsimmons and Dorfman in Palm Springs, the taps at People's Industrial Consultants were said to have picked up a conversation between Dr. Frome and Raymond de Derosa, identified by the California authorities as a muscle man for Milano, who operates out of the consulting company's offices.

The FBI affidavit said that de Derosa had told the doctor that "the deal with the Teamsters is all set." De Derosa indicated to Dr. Frome, according to the affidavit, that People's Industrial was in the line for a 7 percent commission, and they talked about a possible $1 billion-a-year business.

In other tapped conversations, de Derosa reportedly said the PIC would get a 10 percent cut of the medical payments. He reportedly complained that the concern had to "give away three points (3 percent) to get the deal."

This is apparently a reference to that part of the deal surrendered by the Los Angeles Mafia figures to pacify the Chicago representatives.

Meyer Lansky was left out of the Teamsters-Republican Party coalition. Several years later it was reported that Nixon could get $1 million from the Teamsters Union. He told John Dean that this fund could be used for hush money. The Washington Star reported on Sept. 29, 1977:

. . . the $1 million may have been what Nixon referred to in the March 21, 1973, White House meeting with Dean concerning the Watergate burglars, demands for huge sums [of] money in return for keeping quiet.

According to a transcript of a tape of that conversation, Nixon said to Dean: "What I mean is you could get a million dollars ... And you could get it in cash. I know where it could be gotten.... We could get the money. There is no problem in that."

But Lansky's empire was much more than a link with the Teamsters. His investments in Las Vegas were supplemented by major holdings of casinos and hotels in the Bahamas, which he helped open up after Cuba was brutally thrust outside the gambling circuit for American tourists. Businessmen who supported the Republican Party attempted to wrest control from Lansky in the Bahamas by manipulating political leadership. Bebe Rebozo made extensive investments in hotels and casinos and tried to buy up and compete with Lansky's enterprises. Someone attempted to murder a leading politician who was favoring Rebozo in the struggle.

The final attack on Lansky was probably the most successful and the most serious. The Republicans attempted to close off his sources of heroin. They did this by pressuring the Turkish government to enforce the law prohibiting the growing of opium, the plant from which all heroin is refined. At that time (late 1960s) Turkey accounted for probably go percent of the opium processed into heroin and shipped to the United States. By 1972 Turkey was accounting for less than 40 percent, and Lansky had lost control over a major source of his financial empire.[14] The Republican administration also pressured the Latin American governments whose countries were layover points in the heroin route to America, and Lansky's principal Latin American coordinator of heroin traffic, Auguste Ricord, was forced out of Argentina, where he had been managing the traffic for years. He was eventually arrested in Paraguay.[15]

Meanwhile, the heroin traffic from southeast Asia, especially from the Golden Triangle of northern Thailand, Burma, and Laos, expanded production and a new source of heroin for the incredibly lucrative American market opened up. It is unknown whether this new heroin source was linked to Republican politicians, but the fact that the CIA and the South Vietnamese governments under generals Ky and Thieu actively aided the development of this heroin source suggests that such a link is not beyond the realm of possibility.[16]

Lansky must have known he was fighting for his life. Always a heavy contributor to the Presidential election, in 1968 he outdid himself by a good margin. Through his agent, Sam Levinson, Lansky contributed at least $240,000 to Hubert Humphrey's campaign against Nixon. Lansky also contributed heavily in support of the Democratic governor of Washington. In fact, so heavily did he contribute that according to political observers there the Democratic candidate was able to ignore altogether the usually timeconsuming task of raising campaign contributions.

The format of the attack against Democrat-controlled crime networks was much the same everywhere. Newly appointed Republican U.S. attorneys called grand juries to investigate corruption and racketeering. In Chicago one of Illinois's leading Democratic politicians, Otto Kerner, who had formerly been the governor of Illinois and was at the time of his exposure a U.S. judge, was indicted, tried, found guilty, and sentenced to prison for accepting a payoff while he was governor. As we have seen, in Seattle the bulk of the political, law-enforcement network members and even a few of the racketeers were indicted.

In the state the Democrats lost the governorship despite Lansky's heavy financing. Moreover, the state attorney general's office was also won by a Republican, and to make matters totally unliveable for the existing network, a Nixon-affiliated Republican won the county prosecutor's office. These shifts in state and local political fortunes would mean considerably less money for Democrats in the state, because the new network would be formed around a moderate Republican-oriented group. It would thus mean considerably more money for the Republicans.

Thus it was that the network in Seattle came to its demise. Newspaper reporters who reported the comings and goings of the network, and law-enforcement officers who exposed the guilty culprits took well-deserved pride in their role. The county prosecutor and the U.S. attorney, who worked long hours to build cases against network members, were pleased with their role. It was a marvelous experience in which the righteous thought they were spearheading a campaign against evil. What they did not realize was that they, in fact, were only pawns in a much larger game that was going on at the highest levels of government.

This began to dawn on some when, after the indictments were brought and some key players in the network had been removed from their positions of power and sufficiently compromised so that new appointments could be made, the word came from Washington, D.C., to stop further investigations. The governor suddenly cooled on the idea of seeing the indictments through to prison sentences. The FBI and other investigative units denied the rumor that gambling, drug trafficking, and prostitution were coming in again under new management. The Republican judge, whom the defendants had all agreed on as presiding judge, dismissed the indictments on all but three of the key defendants.

Or maybe those most involved in the network's demise simply turned their heads and began looking to their careers and their political futures. Maybe the reaction of a reporter who early on tried to expose the network was typical: "It's all over. There is no more gambling." This same reporter, six years before, had gone to see whether or not there was gambling. Now he was willing to accept the myth that prevailed that the network had been broken, that Seattle was "clean."

The network's demise did not usher in a new era of freedom from the rackets or from the influence of crime. The evidence at hand suggests that the whole process of exposing the crime network resulted from political and economic struggles taking place outside of Seattle, King County, and the state.

pps. 150-169
=====

CHAPTER EIGHT

The Enemy Is Us


IN THE MIDDLE AGES, when Anglo-American criminal law was being formed, there was no pretense of applying the law uniformly across class lines. When prostitution, gambling, public intoxication, drug use, and the like were made criminal, it was not intended nor was it the practice to apply these laws indiscriminately to all social classes. The upper classes were free to gamble, engage prostitutes, or take drugs without fear of interference from the state.

In time the emerging commercial, mercantile, and industry-owning classes sought to use the state as a means of equalizing their position vis a vis the heretofore dominant landed aristocracy. The law was one of the means through which this struggle was resolved. By insisting on the right to a trial by jury, by establishing an adversary system of justice, by creating a set of social relations built around contractual obligations, the emerging class of businessmen and manufacturers was able to bring the landed aristocracy to heel; at least the two ruling classes were made more or less equal in the law. The lower classes were of course excluded from this equality. The necessity of paying an attorney for protection in the courts assured that neither the aristocracy nor the nouveau riche would have to share state power with the working classes.

Thus was a solution forged: but so too were the seeds of conflict planted by that solution. Relying on the moral,,' principle of equality before the law and depicting the state, .as a value-neutral organ for settling disputes gave rise to endless criticism from those who observed that "some are more equal than others."

This process is lived over and over in the history of law: a solution is forged which attempts to resolve conflicts that' arise out of basic contradictions in the structure of social relations created by the political and economic forms of the era. The solution, however, creates social relations which themselves generate further conflicts reflecting underlying contradictions which generate further attempts to resolve the contradictions.

The first laws prohibiting gambling, bribery, official corruption, vice, prostitution, drug use, and usury were each in their turn an attempt to resolve problems stemming from contradictions. Some were intended to help control the "teeming masses of urban dwellers who walk the streets. seeking money by any means fair or foul." Others, such as' anti-opium laws, came as a consequence of international competition as it developed into a worldwide, allencompassing economic system.

Laws against usury are illustrative. They helped stabilize, the banking industry by reducing competition. Laws were enacted that established legal limits to the amount of interest that could be charged. They solved a problem of competition among moneylenders, helped stabilize financing for both industry and banking, made life more predictable and monopolies better able to form in the banking industry. At the same time, usury laws opened up the possibility for people to operate illegally. If the banks could not charge excessively high rates of interest, then they would not loan to people who were highly risky. Alas, risky people have as much need for money as those with good credit. Not being able to get credit in a bank does not reduce one's desire to borrow, but it may increase one's willingness to pay higher than legally allowable interest. Enter the usurer. For the usurer can charge excessively high interest and therefore make a profit even from customers who are a greater risk than banks will accept as borrowers. Result: a structurally induced illegal business is created as soon as the solution to competition and "chaos" in the banking industry is solved by establishing legal limits to interest. All, of course, done with the best of intentions.

Notice, however, that those who engage in usury face a number of administrative problems not faced by banks. Most important is the fact that usurers, because they are engaged in illegal acts, cannot turn to the state and ask that the law be invoked to force debtors to pay back what they have borrowed. Usurers thus, in order to protect their investments and guarantee their profits, must establish their own law-enforcement arm. They must employ a staff of people who are capable of "persuading" those who have borrowed but failed to pay back their debts that it is better to pay the debts than to have them hanging over their heads. Usurers utilize many of the same techniques that the law employs in the service of banks: they confiscate property, threaten to expose the person to public shame, and if none of these are effective they resort to corporal or at times even capital punishment. The latter is of course utilized only as a means of demonstrating to other wouldbe renegers that it is unwise not to pay your debts. The same principle, need it be said, underlies the justification for capital punishment when it is imposed by the state on people who presumably have committed acts that are "beyond the tolerance limits of the community." The acts vary; the problem that gives rise to them is identical, namely, that some people are not living up to the standards others with more power think they should. To keep the heresy from spreading, a life is taken.

It is ironic that those who are least likely to be able to afford the high interest of usurers are those most likely to have to turn to them for loans: the poor as well as the rich are protected from being charged more than the legal limit on interest by banks and licensed financiers.

It is an ironic manifestation of political economic contradictions that the laws that keep many illegal activities from being rampant in the "better neighborhoods" have the effect of concentrating them in precisely those parts of the city where the people are most likely to be already disillusioned by "The System," that is, in the slums. Thus a further contradiction: laws which were not initially intended to be enforced against the rich result in pushing illegal businesses into areas where the poor and working classes live and are thereby exposed to the hypocrisy of the law in everyday life.

Other Networks, Other Times

Robert Winter-Berger was for five years a lobbyist in Washington. On one of his frequent visits to the office of John McCormack, Speaker of the House of Representatives, the back door to the Speaker's office suddenly burst open and Lyndon Johnson, President of the United States, exploded into the room. Winter-Berger in Washington. Pay-Off reports:

Johnson disregarded me, but I can never forget the sight of him, crossing the room in great strides. In a loud, hyster-ical voice he said: "John, that son of a bitch is going to ruin me. If that cocksucker talks, I'm gonna land in jail." By the time he had finished these words he had reached the chair at McCormack's desk, sat down, and buried his face in his hands. Then I knew why he had come here, and I realized how desperate the situation must be.

To the best of my recollection at that shocking moment, McCormack said: "Mr. President, things may not be that bad." He got up and went to Johnson and placed a hand on his shoulder.

"Jesus Christ!" Johnson exclaimed. "Things couldn't be worse, and you know it. We've talked about this shit often enough. Why wasn't it killed, John?" When Johnson looked up at McCormack, I could see he was crying. He buried his face again.

"We tried, Lyndon;' McCormack said. "Everybody did."

Johnson said: "I practically raised that motherfucker, and now he's gonna make me the first President of the United States to spend the last days of his life behind bars." He was hysterical.

"You won't," McCormack said helplessly.

"How much money does the greedy bastard have to make?" Johnson said. "For a lousy five thousand bucks, he ruins his life, he ruins my life, and Christ knows who else's. Five thousand bucks, and the son of a bitch has millions."

"We all make mistakes," McCormack said, glancing at me. "How could he have known, Mr. President?"

"He should have given him the goddam machines," Johnson said. "He should have known better. Now we're all up shit creek. We're all gonna rot in jail."

"We'll think of something," McCormack said. He rubbed Johnson's shoulder. "Please. Calm down. Control yourself."

In a burst, Johnson said: "It's me they're after. It's me they want. Who the fuck is that shit heel? But they'll get him up there in front of an open committee and all the crap will come pouring out and it'll be my neck. Jesus Christ, John, my whole life is at stake!"

"Listen, Lyndon," McCormack said, "remember the sign Harry had on his desk-THE BUCK STOPS HERE? Maybe we can make this buck stop at Bobby."

"You have to," Johnson cried out. "He's got to take this rap himself. He's the one that made the goddam stupid mistake. Get to him. Find out how much more he wants, for crissake. I've got to be kept out of this."

"You will, Lyndon:' said McCormack. "You will."

The President moaned. "Oh, I tell you, John, it takes just one prick to ruin a man in this town. just one person has to rock the boat, and a man's life goes down the drain. And I'm getting fucked by two bastards-Bobby and that Williams son of a bitch. And all he wants is headlines."

"It'll pass, Lyndon," McCormack said. "This will pass

Johnson got angry. "Not if we just sit around on our asses and think we can watch it pass. You've got to get to Bobby, John. Tell him I expect him to take the rap for this one on his own. Tell him I'll make it worth his while. Remind him that I always have."

"All right, Lyndon ."[17]


Johnson had gone through this tirade with scant notice that Winter-Berger was in the room. When he finally took note of him, he asked McCormack if he was "all right." Assured that Winter-Berger was all right and a friend of Nat Voloshen, a major Washington lobbyist, Johnson asked Winter-Berger to take a message to Voloshen: "Tell Nat that I want him to get in touch with Bobby Baker as soon as possible-tomorrow, if he can. Tell Nat to tell Bobby that I will give him a million dollars if he takes this rap. Bobby must not talk. I'll see to it that he gets a million-dollar settlement. Then have Nat get back to John here, or to Eddie Adams later tomorrow, so I can know what Bobby says.

Bobby Baker, the "motherfucker" Johnson had "practically raised," began his Washington career at age fourteen as a page for the Senate. By 1955 he had been hired by Johnson, then Senate majority leader, as his secretary. His salary was nine thousand dollars a year, and his net worth, he stated, was eleven thousand dollars. By 1963, only eight years later, his personal fortune had grown to over two million dollars. Presumably another million was added when he "took the rap" and did not implicate the President. Baker's rise to fortune came by selling favors and influence and information and by investing in businesses owned and managed by racketeers: among them the vending machine business, which was in the end his downfall. Among the racketeers Bobby Baker was closest to was his and Lyndon Johnson's neighbor, Sam Levinson, one of Meyer Lansky's closest associates and a partner with Lansky in Las Vegas holdings. Levinson contributed $250,000 to Hubert Humphrey's 1968 Presidential campaign against Nixon.

The crimes for which Lyndon Johnson thought he might be the first President to end his term of office in prisonthe crimes he was willing to pay Bobby Baker one million dollars to conceal-were never disclosed. Abe Fortas, one of Johnson's appointees to the U.S. Supreme Court, was less fortunate, and, when his links with a notorious financial wheeler-dealer in Florida were revealed, Fortas had to resign from the Supreme Court. It is even possible that had Baker revealed even part of what he knew about Johnson's involvement in criminal acts, they would have paled what is publicly known now about Richard Nixon's involvements.

Richard Nixon continued the Johnson tradition of selling favors and protecting investments for those who supported him politically. The textile industry contributed over $400,000 to Nixon's reelection campaign and the oil industry over five million just one day before the law went into effect requiring public disclosure of campaign contributions. For their contribution the textile industry won a tariff on the importation of textiles from Japan which assured them of a high stable price for their products for years to come. According to columnist, Jack Anderson, in 1972 the president of McDonald's hamburger chain contributed $250,000 to Nixon's election and won in return an exemption of high school employees from the minimum wage law-an exemption personally written in by President Nixon and one which exempted most of McDonald's employees in the race to cover America with hamburgers. (In 1968 he contributed only $1000.)

The milk industry contributed a million dollars to Nixon's campaign and was rewarded with a boost in milk prices during a period when prices on everything were frozen to curb inflation. ITT promised to contribute $400,000 to underwrite the expenses of the Republican National Convention. The Department of justice subsequently dropped an antitrust suit against ITT.

As Richard Kleindienst said: "I am not a prophylactic sack with respect to the White House."[18} Meanwhile, as assistant attorney general, Kleindienst, it will be remembered, was one of the principal people in the Justice Department giving the green light for the U. S. attorney in the state of Washington to investigate and expose the organization of illegal businesses there. He was not, however, quite so concerned about such phenomena elsewhere. During his confirmation for U.S. attorney general, when John Mitchell resigned to take over the management of Nixon's reelection campaign, it was revealed that Kleindienst had cleared a U. S. attorney, Harry Steward, who had been charged with obstructing investigations into corruption in San Diego: Nixon territory. [19]

Nixon, Johnson, Kleindienst, Mitchell: these men are not aberrations in an otherwise well-working machine. They are merely acting out roles that emerge time and time again. Lincoln Steffens was not writing about 1900, and I am not writing about 1970. The story is told over and over.

George Washington started us off by unashamedly using the office of the Presidency to enhance his personal fortune. During the administration of Ulysses Grant the Union Pacific Railway directors were caught pocketing money from government bonds, and Grant's vice-president was implicated in the plot. During Grant's second term of office, frauds totaling some seventy-five million dollars were unveiled, and Grant's secretary of war (who was forced to resign) as well as his personal secretary were involved.

In the 1840s Martin Van Buren was reported to be so corrupt that there were songs written eulogizing his willingness to sell anything he controlled.

Warren Harding was perhaps less fortunate than his predecessor or those to follow, since his administration's scandal ("Teapot Dome") has become a pseudonym for political corruption (perhaps soon to be replaced by "Watergate"). The Teapot Dome Scandal was only one of many rumored during Harding's administration, and he was spared much of the torture of the scandal by his well-timed death. The scandal involved the leasing of government land at Teapot Dome, Wyoming, to the oil magnate H. D. Sinclair. In the end, the secretary of the interior, Albert B. Fall, was proven to have personally benefited substantially from this and other land leases. Fall was eventually tried, convicted, and sentenced to jail (one year) for having accepted a bribe.

President Roosevelt's administration was relatively free from scandal, although this is probably more a result of the crises (Depression and World War 11) during that administration acting as a smokescreen than the purity of the politicians.

Harry Truman's administration saw a White House military general, Harry H. Vaughn, accepting a deep freeze in return for using his influence. Donald Dawson, a close Truman aide, was implicated in a scandal involving the misuse of public funds and influence by the Reconstruction Finance Corporation. The Internal Revenue Service was involved in yet another Truman-era scandal which culminated in a conspiracy trial against Truman's former appointments secretary.

Sherman Adams, one of Eisenhower's closest associates, was found to have accepted numerous gifts (among them a vicuna coat) from Bernard Goldfine, who was at the time trying to influence the Federal Trade Commission. Sher-man Adams ultimately resigned as Eisenhower's special assistant.

On the state and local levels corruption of police and politicians is revealed with a regularity that is as certain as physical laws. On August 3, 1974, the Knapp Commission, which had been investigating rumors of corruption in the New York City Police Department, reported:

We found corruption to be widespread. It took various forms depending upon the activity involved, appearing at its most sophisticated among plainclothesmen assigned to enforce gambling laws.... Plainclothesmen, participating in what is known in police parlance as a "pad," collected regular biweekly or monthly payment's amounting to as much as $3,500 from each of the gambling establishments in the area under his Jurisdiction, and divided the take in equal shares. The monthly share per man (called the "nut") ranged from $300 and $400 in midtown Manhattan to $1,500 in Harlem. When supervisors were involved they received a share and a half...

The Commission found evidence that payoffs were widespread (though not always so well organized) in the other divisions of the New York Police Department as well. Frank Tannenbaum wrote in Crime and the Community:

It is clear from the evidence at hand-that a considerable measure of the crime in the community is made possible and perhaps inevitable by the peculiar connection that exists between the political organizations of our large cities and the criminal activities of various gangs that are permitted and even encouraged to operate.[20]

Just as criminal liaisons between law, economics, and politics are a mainstay of buying and selling public favors, so are they also a mainstay of regular business practices. The Far East and African sales manager for a leading European business-machine manufacturer explained to me how he sells his company's products by bribing government officials. In some countries the bribes are exorbitant; in some they are "a reasonable five or ten percent," but everywhere, whether selling to government, large corporations, or retail outlets, the principle is the same: the people who give you large orders expect and receive a bribe.

An example of a particularly exorbitant (but not unusual) transaction consummated by the above-mentioned sales manager was the sale of one million dollars worth of business machines to the Congolese government. To secure the sale it was first necessary for him to meet and wine and dine the fifteen top government officials who would have to approve the order. Once the order was placed, the company kicked back $250,000 to the fifteen people, including the minister of finance, the purchasing agent, and so forth. To mark the final irony, the machines were unusable as delivered since the order did not include requisition of an auxiliary machine necessary for the base machine to be operative. No one complained; the company was delighted not just by the size of the order ($750,000 after kickback) but also because the corrupt nature of the purchase enabled the company to double its usual price and thus vastly increase its profits. And of course the sales manager received credit for making a very impressive sale. Only the farmers and workers whose taxes supplied the funds were harmed by the transaction.

Kickbacks, bribes, collusion, and corruption are as much a part of corporate business as they are a part of crime networks everywhere. So too are public lies and disclaimers of businessmen and politicians caught in the act. In 1967 and 1968 the top executives and accountants of Lockheed Aircraft, with the complicity of high-ranking officers of the Air Force, falsified public reports of the cost of overruns on the C-5A airplane. Complicity of the Pentagon was purchased by the favors Lockheed does for the high-ranking officers, including, perhaps most significantly, the prospect of high-paying jobs in the aircraft industry upon retirement from the service.

Investigative agencies such as the FBI and the IRS are co-opted in similar if not identical ways. Retired FBI agents become "special investigators" or are employed by banks, corporations, or state governments at high-paying jobs.

Meat inspectors for the U.S. Department of Agriculture are systematically bribed by the meat industry through extra pay for overtime, free meat, and a variety of smaller "courtesies."[21] Those who do not accept the bribes or who push too hard to enforce meat-processing requirements are isolated, fired, or in some cases even criminally charged for malfeasance of office.

We could of course go on indefinitely with such examples but the point would be the same: there is an inherent tendency of business, law enforcement, and politics to engage systematically in criminal behavior. This is so not because there are too many laws but rather because criminal behavior is good business, it makes sense, it is by far the best, most efficient, most profitable way to organize the activities and operations of political offices, businesses, law enforcement agencies, and trade unions in a capitalist democracy.

It should not surprise us, then, that crime networks in the larger cities of the nation are ubiquitous. City after city has been exposed and particular network members purged, usually the least powerful ones: the owners of the taverns, gambling halls, whorehouses, and businesses that produce illegal goods and services. Occasionally the cleanup includes some political and law-enforcement people, normally lower-level, relatively powerless ones in the political economy of the city, state, or nation. Occasionally higherlevel people are implicated, even at times the President of the United States.

At the turn of the century the cities were New York, Philadelphia, Minneapolis, St. Louis, Kansas City, and Chicago. In the last ten years scandals have broken in New York, Seattle, Portland, Newark, Philadelphia, Chicago, Detroit, and Miami, to name but a few. Like the persistent "white-collar crime," nothing changes as a result. Networks come and go but the process by which they are produced goes on and the consequences remain the same. Whether it is Meyer Lansky or Santo Trafficante, Lyndon Johnson or Richard Nixon, the network remains in control of large segments of America's political economy.

By now it should be clear that the logic of capitalism is a logic within which the emergence of crime networks is inevitable. Capitalism is based on the private ownership of property. Property is acquired by selling products, providing services, or selling one's labor. By law most of the products and services which can be exchanged for money at a profit are legal-that is, the state has decreed that it is permissible for people to buy, sell, and exchange these goods and services. At one time in American history most of the products and services which support the crime industry were legal: gambling, high-interest loans, even prostitution and heroin. Thomas Jefferson himself established a brothel near the University of Virginia for Virginia's young intelligentsia to have a readily available outlet for their sexual urges.

In time some commodities and services came to be defined as illegal. But the demand for these things did not disappear with their transference from legality to illegality, nor did the profits to be had. Indeed, in some cases the profits increased as a consequence of their newly established illegality. Marketing procedures had to be adapted to the fact that these things were now illegal-new methods of collecting debts for example-but the process remained the same. Businessmen and politicians and entrepreneurs invested in, coordinated, and managed these (now) illegal industries in the same way they had managed them when they were legal.

Capitalism provides the basic conditions, but it is the organization of politics in the U.S. that joins the capitalist mode of production to make the ground fertile for crime networks. The key feature of American political organization that combines with markets and profits in illegal goods and services to create networks is the peculiar necessity for American politicians to spend vast sums of money in order to get elected to office.

Only recently has it been necessary for politicians to declare the size and sources of their campaign contributions. The results of their declarations are staggering. Richard Nixon admits to spending over sixty million dollars on his 1972 Presidential campaign. Disclosures of unreported campaign contributions suggest that even this figure may be a gross underestimate of the actual amount spent.

Nelson Rockefeller is reported to have spent over sixty million dollars in his campaign for the Presidential nomination and the governorship of New York.

An American politician must obtain an incredible amount of money if he or she is to be successful. Sources of funds are or course limited. Individual donors giving ten and twenty dollars cannot begin to provide the necessary funds. Especially desperate are those politicians who would run on a platform that does not appeal to the interests and ideology of the wealthiest people in their area. Thus a great irony results: it may even be that the politicians most likely to be vulnerable to the influence of crime networks are those who espouse the more egalitarian, working-class, or populist economic and political principles.

So far as election to public office in the U.S. is concerned, money is everything. In 1974, out of thirty successful candidates for the Senate, twenty-eight of them spent more money than their opponents.

Crime networks with access to billions of dollars in untaxed, unreported, and unaccountable funds are a valuable source of money to oil capitalism's political machinery. In the natural course of events some politicians will come to cooperate more fully than others, some will come to compete for a larger share of network profits, and some will come to reap the profits for their personal as well as their political use. Still others will grow dependent on the money to finance campaigns and occasionally to meet "personal emergencies." Through it all the crime network becomes an institutionalized, fixed, and permanent link in the chain of a nation's political economy. That is what has happened in America. That is why crime networks persist year after year with only the faces and methods of operation changing.

Nor have other capitalist countries escaped the plague. In 1969-70 1 researched the relationship between illegal and legal businesses in Nigeria and found essentially the same sorts of interrelations between politics, business, and systematic violation of the law that one finds in America.

What is perhaps more surprising, given our biases, is to discover that crime networks are also pervasive throughout Europe and Scandinavia. In 1975-76, a team of sociologists- lawyers from Sweden and I researched illegal businesses there. Despite the constant claims by the Swedish National Police to the contrary, we discovered an immense and highly organized consortium of businessmen with international connections and local penetration of politics that was firmly entrenched in the illegal enterprises of drug trafficking, gambling, usury, and even the ancient shakedown of "legitimate" business for "protection."

This is not to deny that there are differences. For some purposes the differences may be more important than the similarities: the extent to which the police are corrupt from the top to the bottom may vary from place to place. The variations, however important they may be, should not obscure the fact that the systematic organization of illegal activities for profit is as characteristic of capitalism as bureaucracy is characteristic of the modern state.

Is this to say that capitalism alone creates the networks? Hardly. I did not research systematically in Eastern Europe, but I was not on land ten minutes in Poland before I was offered the opportunity to exchange U.S. dollars on the black market for ten times the official rate. Stories of high-level payoffs and corruption abound. A large percentage of people in Poland report that they have to pay bribes to obtain official favors. Whether these isolated facts add up to a crime network and the systematic penetration of the political economy by the organization of illegal activities for profit is only guesswork, but it is suggestive of that possibility.

Does this weaken the argument that it is the structural characteristics of capitalist democracies (especially the contradictions that inhere in these political economies) that create and sustain crime networks? Not at all. Cigarette smoking causes lung cancer but other things cause lung cancer as well. The kind of "socialism" that is extant in the Soviet Union and Eastern Europe shares with Western capitalism many essential features: a rigid class system, the use of money for exchange, and the alienation of workers from the product of their labor, to mention only a few. It may be that these essential characteristics are fundamental. Unfortunately we lack the systematic comparisons with other countries to be very confident about such speculations.

What can be done? The answer depends on the question implied. To stop gambling, drug taking, prostitution, and usury would require a change in the political economy possible only through revolution. At the moment, that possibility seems rather remote. We must then lower our sights substantially and recognize that, as Murray Morgan said with respect to prostitution in Seattle in the early days of that city's checkered history, "where demand was so sustained and so obvious somebody was certain to try to hustle up an adequate supply." As long as providing things that are heavily in demand is illegal, then, given the political economy of capitalist democracies, crime networks of one sort or another are inevitable. Thus, to eliminate or at least reduce the magnitude and change the character of crime networks requires first and foremost the decriminalization of these things.

There are already some clear lessons to be learned from other countries. Years ago Great Britain placed the problem of opiate addiction (heroin, morphine, etc.) squarely in the hands of the medical profession. While the results of this move have not been to abolish completely traffic in opiates in Great Britain, the extent to which the enterprise is profitable, the degree to which the market has been controlled, and the general effectiveness of the program have kept crime networks from forming around the illicit traffic in opiates in Britain in anything like the same way they have formed around opiates in the United States, France, Sweden, and The Netherlands-to mention but a few countries.

The proposal that heroin use should be decriminalized and medical doctors permitted to prescribe heroin for addicts has been made time after time. After an extensive inquiry into the subject, the American Medical Association and the American Bar Association proposed that this policy be "seriously considered" over twenty years ago. Opposition by the federal agencies responsible for enforcing the laws (whose agents benefit directly and indirectly from the existence of crime networks) has meant certain defeat for such proposals.

We may, however, be in a somewhat better position with respect to the possibility of legalizing gambling. As the economic recession�inflation we are presently witnessing puts pressure on state and federal governments to increase tax revenues, gambling is more and more attractive as a source of untapped revenue. In other words, there are some powerful interests (the state itself) capable of legalizing gambling in order to increase their own revenues. When this happens we would be naive to suppose that the networks that have previously profited from the gambling would suddenly be replaced by legitimate businessmen. The networks, it must be remembered, are already populated by legitimate businessmen. The management would not change but legalized gambling would provide taxes, a reduction of associated illegal actions dictated by the illegal nature of crime networks, and a somewhat greater ability to oversee network activities. In short, we could expect to have the government and its bureaucracies relate to the organizations which supply gambling in much the same way they relate to other businesses. Is it better to have ITT buy my congressman and lobby for its own peculiar selfinterests, or is it better to have Meyer Lansky and Company doing it? Perhaps it makes no difference in the long run. I suspect that at least having a small amount of tax benefit that goes into welfare or education or roads is better than the present situation.

It seems quite certain that if drugs and gambling were decriminalized, crime networks as we have known them since the turn of the century would disappear. The fortunes made in these illegal enterprises could then become respectable in the same way that the fortunes of the robber barons-the Mellons, Rockefellers, Vanderbilts, and Kennedys�have become respectable. It would then be possible for us to see, in another generation or two, those who inherit the wealth of Meyer Lansky, David Beck, and Jimmy Hoffa running against a Dupont, a Rockefeller, a Mellon, a Heinz, or a Kennedy for President of the United States. That may not be progress, but it is consistent with historical precedent.

Whatever changes might be forthcoming, one fundamental truth must be grasped: It is not the goodness or badness of the people that matters. The people who ran (or run) the crime network in Seattle were (and are) not amoral men and women. On the contrary, they are for the most part moral, committed, hard-working, God-fearing politicians and businessmen. It seems paradoxical perhaps that someone could kill, threaten, and coerce people to protect himself and still adhere to a set of moral principles to which "all of us" adhere. But from his point of view he may be protecting far more important things than merely his own skin. He may be protecting an ideology for which he stands. He may be protecting the community from being taken over by people whose ideas are, from his viewpoint, bound to lead the community and the nation down the road to ruin. "The Fourth of July oration is the front for graft," Lincoln Steffens wrote. It is often the sincere belief of the grafters that they are also performing a public service and living up to the principles of the Fourth of July oration.

The people in the crime network in Seattle and those who cooperated with it were simply acting within both the logic and the values of America's political economy. They were operating to maximize profits, to protect their investments from competition, to expand markets, and to provide services and goods demanded by "the people." These are all the logical implications of a capitalist economy. These-or closely related-ideas also become values. Profit is a value: something intrinsically worth striving for. Being shrewd, pragmatic people, they know that whatever value one chooses to stress inevitably involves a compromise with some other values. Profit may necessitate compromising strict adherence to the law, but then so does mere survival in the realities of political life. You use whatever resources you can to maximize profits and increase capital. Whenever possible, you also operate to help your friends and business associates. These are values which all persons in crime networks share with many if not most other contemporary Americans. The members of crime networks fought for the protection of these values; some even died for them. Not surprisingly, they were willing to violate many laws�"mere technicalities"�to live up to the logic and values of their world.

pps. 169-188
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Bebe the Bagman

Bebe Rebozo -- J. Edgar Hoover -- Dick Nixon

Bebe the Bagman

an excerpt from:
The Breaking of a President 1974 - The Nixon Connection
Marvin Miller, Compiler
Therapy Productions, Inc.�1975
LCCCN 7481547
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BEBE THE BAGMAN

Secret Manipulations of President's Crony Still Pose Question Mark

Even at this late date in the Watergate debacle-with President Nixon resigned in disgrace; with the Watergate cover-up trial certain to bring out new revelations of criminal conspiracy and corruption in the White House; with accusations, indictments, trials, jail sentences and lawsuits still reverberating in courtrooms from Washington to California�amid all this, the exact role of Ex-President Nixon's closest friend and confidant, Charles Gregory (Bebe) Rebozo), is still not "perfectly clear." With the White House gang effectively broken up by the Watergate indictments and sentences, and the President himself deposed, Bebe Rebozo remains, in the words of the late Winston Churchill in another connection, ". . . a riddle wrapped in a mystery inside an enigma."


Is the 61-year-old Florida banker, who has been called closer than a brother" to the President, simply the ultimate Nixon loyalist, sticking by his friend to the last ditch, trying his best not to do or say anything that would further embarrass the President and worsen his already dismal plight? Or is Rebozo closely involved up to his ears, along with Nixon, in the Watergate cover-up and associated crimes and corruption? Are there to be further revelations and possibly criminal charges against Rebozo? Bebe has been Richard Nixon's close crony for more than twenty years. For most of that time he has been Nixon's shrewd financial adviser and manipulator, the man mainly responsible for the wealth Nixon has accumulated while in office. Admittedly Bebe has played the role of bagman, handling the mysterious $100,000 undercover contribution by Howard Hughes and other secret and dubious donations of large sums of cash, allegedly earmarked as campaign funds but quite possibly used for other purposes. In this role, has the self-made millionaire Floridian been simply a trusted and discreet messenger-or has he been so deeply involved in the White House criminal machinations as to lay himself open to charges of perjury and violation of the Fair Campaign Practices Act, among others? And will he be found to be even further involved as Nixon's deeper connections with organized crime, masking as big business, are inexorably laid bare? Only time will tell; but time is running short, and it may well be that by the time this article appears in print, Bebe Rebozo may be the center of new charges and revelations of still unsuspected corruption.

The Florida banker, who parlayed his knack for making Washington connections into a tidy fortune, is notoriously self-effacing and unavailable to newsmen. For many years he stood in Nixon's shadow-the unobtrusive friend who was always around when his presence pleased Big Brother. Despite all the mounting Watergate revelations of 1972, it was not until more than a year later, in October 1973, that Bebe Rebozo was publicly mentioned as having a hand in the "political" fund-raising. This was when the story of the Hughes gift first broke-the $100,000 that Rebozo blandly swears he held for three years and then returned intact. And now, following the testimony of Herbert W. Kalmbach, Nixon's one-time private attorney, to Senate Watergate Committee investigators last April, Bebe's mysterious bag-carrying activities are under the full spotlight of investigation. Pandora's Box has at long last been openedand its contents are still being inventoried. The unhappy Bebe has been interrogated for several grueling days, and his financial records subpoenaed.

The stocky, wavy-haired, heavy-browed Florida financier, a first-generation Cuban-American, who lives next-door to the Southern White House on Key Biscayne, is so publicity-shy that be was not even listed in Who's Who until the 1971-72 edition, even though he was already a power behind the Washington scene and a manipulator of international finance. It was not until 1970 that Rebozo rated more than passing mention as Nixon's friend, always listed among guests at family parties and social events. But it was becoming evident just how close Bebe was to the President, and feature stories and articles about their brotherly relationship began to appear. The reporters had a hard time, however, in digging up any more than the surface facts. When the late Life magazine sent Colin Leinster to Key Biscayne in 1970 for a cover story on Rebozo, the veteran reporter had to admit that he was unable to interview Bebe personally. Everybody on the tiny island claimed to be a pal of Bebe's but most of what they "knew" about him turned out to be false, second or third-hand information. The man evidently had very few close friends, and these were not inclined to talk.

In those halcyon prehistoric days before Watergate, Bebe Rebozo's image was that of a faithful and trusted friend, the only man with whom Dick Nixon could relax and be himself, speak his mind without fear of being quoted in the morning paper. "He's the only person Nixon really trusts," one associate said at that time. "He can talk to Rebozo, ask him questions, and he knows Bebe will give him honest replies. They can talk about anything�about Agnew, the Cabinet, the White House staff. And nothing the President says is going to go any farther�Nixon knows that." Another mutual friend said: "He's the only one around him who doesn't want anything out of the President. He has everything he wants for himself, and he doesn't aspire to politics. He's simply Dick's best friend, that's all. They enjoy each other's company."

It was quite evident that Bebe was happy in his role of a devoted house-dog. He never pushed himself forward. On his visits to the White House, unencumbered by a wife�he was divorced long ago�he always made a hotel reservation, never assuming that he was going to spend the night in his usual third-floor guest room. Presumably this is still his habit. At Key Biscayne, playing the genial host, Rebozo mixed the President's martinis, broiled the steaks on his backyard grill, and whipped up spicy Spanish-style dishes. They frequently played golf together. "Make no mistake about it," a White House aide was quoted in Newsweek, "it's the President who calls the shots and Bebe who adjusts. If the President wants to talk, they talk; if the President wants to drink, they drink. Bebe may ask the President if he wants to go out on the Cocolobo (his boat), but it's the President who decides."

Frequently when he visits the White House, Bebe goes on to Camp David with the Nixon family. Frequently he has been the only "outsider" at intimate family gatherings. The Nixon daughters, Julie and Tricia, have always looked on him as a kindly uncle. He has attended their birthday parties since they were little girls, and of course was a guest at their. weddings.

All in all, it would seem that this image of Bebe Rebozo, by and large, is a valid one as far as it goes; he is a true and trusted friend of the Nixons. The image is tarnished a bit by the fact that he has profited in the past from relations with other politicians, and certainly is not suffering from being known as the President's closest friend.

To those of an inquiring turn of mind, it may seem odd that these two men from such radically different milieus-the earnest young Quaker lawyer and politician from rural Southern California, and the self-made Cuban-American businessman on Florida's Gold Coast-should have become friends in the first place, and soon become so close. Just who is Bebe Rebozo and what is his background?

Charles Gregory Rebozo was born in Tampa, Florida, on November 17, 1912�making him just three months older than Nixon. He was the youngest of nine children of a Havana cigar-maker who had brought his family from Cuba to the United States. By the time the family moved from Tampa to Miami, little Charles had already been nicknamed "Bebe." A brother of his had trouble saying "baby" in English, and the nickname stuck. (Most people pronounce it "Be-be"; the Nixons call him "Beeb."

Bebe worked hard to help support his parents and eight brothers and sisters. At the age of 10 he was delivering newspapers, and at 12, in the fifth grade, was working after school as a chicken plucker, a job he detested because he hated to kill anything. While still in school he displayed his money-wise nature by making his first real estate investment. He put $25 down on a lot in Canaveral, which be lost during the Depression when he couldn't keep up the payments.

Small and slightly built, Rebozo learned as a boy, according to old friends, that the way to avoid being bullied by the bigger boys was to keep quiet, smile a lot, and be generally charming. He was a bright boy, and his dark good looks and charm won him the vote as "best-looking boy" in his senior class of 1930 at Miami. After graduation, while many of his wealthier classmates went on to college, Bebe got a job with Pan-American Airways as one of their first 10 stewards. For a year he worked on the flying boats shuttling between Miami, the West Indies and Panama. It was during this time that he was secretly married at the age of 18 to a Miami girl named Clare Gunn. The marriage was annulled three years later. His young wife testified that they had never lived together, and that she had only married him because "he was very domineering, and kept insisting and insisting." Apparently this was a facet Bebe displayed only to his girl friend; to others he was charming and ingratiating.

In 1931 Bebe quit his job with the airline and went to work pumping gasoline at a filling station in Miami. After a year he quit this and took a job chauffeuring tourists around the Gold Coast. Living frugally and saving his money, restless and always looking for a better chance, in 1935 he invested his savings in "Rebozo's Service Station and Auto Supplies," specializing in the sale of retreaded tires. With his modest profits, he kept investing in real estate, buying raw land around Miami at two or three dollars an acre. He was one of the few who foresaw the coming Florida land boom.

With the outbreak of World War II, Rebozo went back to Pan-American as a navigator on contract flights for the Army's Air Transport Command, and made about 100 ferry trips across the Atlantic to Africa and India. While he was away, an elder brother ran the service station, which profited handsomely on the sudden wartime demand for retreaded tires. On his return from the airways, Bebe found himself in very good shape financially. The postwar land boom was already starting, and he concentrated on his real estate investments. At the same time, following his natural bent for advancement, the young Cuban-American garageman began to move into Miami social circles, where his natural Latin charm and unobtrusive manners quickly opened doors for him-with an assist from the rumors of his modest wealth and shrewd business instinct in real estate deals.

In 1946 Bebe was quietly married for the second time-curiously enough, to the same girl he had married at 18, who was now a widow named Clare Gentry. This time they lived together for two years, then separated, and were divorced two years after that. "We just didn't make it," Rebozo said later in one of his rare interviews. "It happened when I was young." A friend commented: "He'll never let on, but the whole thing upset him very much. He isn't going to try it again."

For some time after that the bachelor Bebe acquired a reputation as a bit of a ladies' man. He dated many of Florida's most beautiful women. One woman friend described him as a "suave man-about-town, with a lot of Old World charm�a fun guy,"

Increasingly in recent years, however, Bebe has cooled off the romantic image and devoted his energies to amassing money and being the President's best friend. He has indicated to his few intimates that he is very careful about his dates because he doesn't want to provoke any idle gossip that might reflect on the Nixon family. His latest steady date is Jane Ann Lucke, an attractive Miami divorcee who lives with her mother and two sons. Mrs. Lucke said in a recent interview that Bebe comes over to their house a couple of nights a week, and she and her mother give him piano lessons, or watch TV or play cards.

To get back to the late 1940's, Bebe's real estate investments prospered and prospered. The word went around that he had the Midas touch. Some of his boyhood friends, back from the war, several of them wealthy, invested their money with him and on his advice, and brought their friends in. Bebe soon became the central figure and guiding genius of a group of well-heeled, enthusiastic young men who poured their money into real estate speculation. They had their own private fun spots, in particular the old Cocolobo Cay Club on Adams Key, where they frolicked and entertained customers and associates. Among Bebe's cronies in this group was his old school chum, Rep. George A. Smathers, an ambitious young Florida Democrat, a colleague and friend of Nixon's in the House of Representatives, though they were of opposite parties. Rebozo himself was a Democrat at that time, during the Truman administration; he didn't switch to the GOP till some years later, after Eisenhower and Nixon were elected. George Smathers and other associates realized the value of their real estate enterprises, in the middle of the land boom, of cementing good relations with powerful local and national politicians. So Bebe Rebozo found himself cast in a new role: that of entertaining Democratic bigwigs aboard his boat and at lush private spots along the Gold Coast. Among his guests from time to time were Senators Russell Long, Lyndon Johnson and Stuart Symington. The Bebe had come a long way since the days only a few years before when he sold retreaded tires.

There is some question as to when Richard Nixon first met Charles Gregory Rebozo; and the very fact that there is such a question, leads to speculation that perhaps something is being covered up, for some reason still unknown. Nixon's official biographers, and the news feature stories of the early 70's, all agree that the two were introduced by George Smathers. Nixon and Smathers, who had entered the House together in 1947 from their separate States, were both elected Senators in 1950. Some say the meeting with Bebe took place in 1950 while they were campaigning for the November election-others that it was in early 1951, after they had been elected. At any rate, the story is that Nixon was worn out from overwork and nursing a cold, and his Democratic friend Smathers persuaded him to take a brief break in the sunshine of Florida. Several writers have stated that this was Nixon's first visit to Florida-that Smathers urged him to "take a look at our State."

Smathers told Nixon to call Bebe Rebozo on his arrival in Miami, promising that Bebe would "show him a good time." Nixon wasn't necessarily in search of a good time; he had brought a lot of work along with him. He duly phoned Rebozo, then worked all day in his Key Biscayne Hotel room, while Bebe discreetly hovered in the background, not wanting to bother the new GOP Senator from California. The next day Bebe invited Nixon to take a cruise on his houseboat, and the weary Nixon accepted. The Senator spent most of his time aboard the boat working on papers he had brought with him. "I doubt if I exchanged half a dozen words with the guy," Rebozo later recalled. However, on his return to Washington, Nixon wrote Bebe a warm letter of thanks, promising to visit Florida soon again, and their friendship was begun.

That is the officially approved account of how the oddly-assorted pair first met-approved by Nixon and Rebozo, with a discrepancy only regarding the date in various accounts. However, investigative reporter Jeff Gerth wrote recently in Penthouse magazine that he was informed in the summer of 1972 by an ex-FBI agent, John Madala, that Nixon, as a Congressman, made a number of pleasure excursions to Florida in the late '40s. According to Gerth, quoting Madala, Nixon went fishing first with Tatum "Chubby" Wofford, a Florida hotel owner and real estate speculator, and later with Bebe Rebozo�at least a couple of years before 1950. Madala said the arrangements for some of Nixon's visits had been made by Richard Danner, an automobile dealer who was city manager of Miami from 1946 until 1948, when he was dismissed in a dispute over gangland control of the police force. Danner and Gerth's informant, Madala, had worked together in the Miami FBI office in the 1940's. Danner later joined the Howard Hughes organization and became head of the Sands Casino in Las Vegas.

Jeff Gerth went on to state that Richard Danner later in 1972, in an interview in his plush Las Vegas office, confirmed Madala's story of Nixon's visits to Florida in the 1940's. He recalled one particular visit in 1948. According to his story, George Smathers, who had introduced Danner to Nixon in Washington in 1947, called from Washington to tell Danner, in Miami, that Dick, who was involved in prosecuting the Alger Hiss case, was on the verge of a breakdown and needed a rest. Danner agreed to take care of Nixon in Miami; Smathers put him aboard the train, and Danner met him in Miami. According to Danner's account, after the ailing Senator had spent a week in the sun at Vero Beach, Danner took him to an osteopath in Miami. From the doctor's office Danner called Bebe Rebozo, who came over in his boat, and the three men went sailing together.

Danner confirmed Madala's information that Nixon's first Florida yachting companion, before he became chummy with Rebozo, was Chubby Wofford. But Wofford had some pressing personal problems at that time, and shortly moved to Georgia; it was then that Rebozo took over as Nixon's sea-going host. Jeff Gerth noted that Wofford's Miami hotel was named in the celebrated Senate hearings of the Kefauver Committee on Organized Crime in 1950-51. It was testified that the Wofford Hotel was headquarters for crime syndicate figures from New York, who owned an interest in the hotel. The Kefauver Committee probed deeply into the operations of organized crime in Florida, with known gangsters working hand-in-glove with public officials. Abe Allenberg, the syndicate's Miami representative, was a friend and former employer of Richard Danner.

Danner is currently a principal figure in the investigation of the mysterious $100,000 donation to Nixon by Howard Hughes; it was Danner who delivered the money to Bebe Rebozo in two installments of $50,000 each, either in 1969 and 1970, or in mid-70; there is a question about the dates.

Jeff Gerth in his Penthouse article revealed further that Danner in 1952 accompanied Nixon on a hasty visit to a casino in Cuba, operated by the syndicate; and he stated that Danner got his lucrative job as head of the Sands in Las Vegas due to his closeness to Nixon.

Winding up our scrutiny of Nixon's visits to Florida in the 1940's, we may note that it has been reported that Nixon visited the Sunshine State as early as 1942, on government business, when he was a young lawyer working for the wartime Office of Emergency Management in Washington. There is no indication whether he met Bebe Rebozo at that time; probably not, since the young tire dealer was with the Air Transport Command during most of the war.

Danner has testified under oath that it was he rather than Smathers who introduced Nixon to Rebozo; he estimated the date as "about 1950"; but in his interview with Gerth in September 1972, before the Watergate avalanche got really going, he was quite definite that it was in 1948. It seems as through there is a conspiracy, or at least some sort of tacit agreement between those concerned, to cover up and bury any activities of the future President in Florida in the 1940's. An educated guess is that it has to do with Nixon's links, as a young Congressman, with big-time organized crime and gambling, which were notoriously entrenched in the Miami area at that time. Certainly Nixon's friends Danner and Wofford were deeply involved in this picture, and he must have known it. As for Rebozo, these men were his friends also. It may be noted that in 1968, when the Bebe was building his big shopping center in Miami's Cuban community, out of scores of construction firms available, he picked the one operated by "Big Al" Polizzi, a former Cleveland mobster. One way or another, it seems that the ambitious Senator-and-President-to-be was hobnobbing with some very dubious people indeed, and today Nixon prefers to cloud over that period in his life, for fear he will be tarred with the same brush.

At any rate, Nixon did meet Bebe Rebozo in those days, and their peculiar friendship blossomed. One explanation by one of Nixon's aides is that both men were "the same methodical, hard-working type"�their personalities appealed to each other, and they had many tastes in common. They both liked boating, golf and football. By the time Senator Nixon was elected Vice-President in 1952, the oddly assorted pair were fast friends, and Nixon was a frequent visitor to the free-wheeling Gold Coast with its yachting, partying set; a strange milieu for a Quaker boy from Whittier, California. On those visits he stayed at Bebe's house, sometimes bringing his family along, and they went cruising on Bebe's boat.

While Nixon's political star was rising, Bebe Rebozo's fortunes were going up too. He was constantly expanding his real estate and financial dealings, and his Midas touch persisted. Was it a coincidence that he was a close crony of Nixon and other -influential politicians? One Key Biscayne businessman recently told a Newsweek reporter with blunt candor; "Rebozo is a fumbling tire salesman. He's not really that good at business. He would never made it without political clout." And political clout the ingratiating CubanAmerican certainly had. He had hitched his wagon to the right star, put his money on the right horse.

The friendship was cemented during the years of Nixon's vice-presidency from 1953 through 1960, when Nixon made numerous visits to Florida, and Bebe to Washington. It was during that period, of which not too many details are known, that the Bebe became Nixon's "shadow," his closest confidant. Their association was not spotlighted at that time; no one much cared who the Vice-President's friends might be.

Bebe Rebozo was the only "outsider" sticking closely to the Nixon family on election night in 1960, when Nixon lost the presidential race to John F. Kennedy. When Nixon ran for Governor of California in 1962, the Bebe actually moved from Florida to California�"at some financial sacrifice," according to friends-to help Dick unofficially in his campaign, which was marked by a phony Red smear and other "dirty tricks" on Nixon's part. Rebozo was standing at Nixon's side when he glumly told newsmen, after his resounding defeat by Governor Edmund G. Brown, that he was retiring from politics: "You won't have Nixon to kick around any more!"

It seemed that Nixon had lost his own political clout-or had he? Bebe remained his close friend when the Nixons moved to New York City and Dick went into a lucrative law practice. There is reason to believe that he very soon reconsidered his decision to quit politics, and used his law practice to solidify his connections with big business and high finance, with his eye still on the Big Chance. In 1964 Nixon hit the campaign trail for Barry Goldwater, and was back once more in the public eye.

In 1965 Bebe Rebozo was with Dick and Pat when they celebrated their silver wedding anniversary in Mexico; in 1966 he went around the world with the future President; in 1967 Nixon and Rebozo traveled to South America together. When Nixon definitely decided to make a second try for the presidency in 1968, Rebozo originally was against the idea, according to mutual friends. Says one: "Bebe was afraid of the impact another major defeat would have on his friend." But as it turned out, Bebe's faithfulness paid off, and the rest is history. Incidentally, it was not until late 1968 that the cautious Bebe changed his registration from Democrat to Republican.

During those same 1960's, while he was following Nixon around, Rebozo was steadily building up his own fortune in Florida, to his present worth of approximately $3 million. He founded his own bank, the Key Biscayne Bank, of which he has been president and chairman since 1964. The one-story modern bank building is complete with American flags, pictures of Richard Nixon and even a smiling bust of the President. The Rebozo bank enjoys a monopoly position on wealthy Key Biscayne; repeated attempts by rival financial groups to open another bank have been turned down by the Comptroller of the Currency, despite favorable recommendations by a federal field examiner.

Another instance of the Bebe's good luck in dealing with the federal government was the favored treatment he received from the Small Business Administration in the early 1960's. According to several Miami businessmen, it was the intercession of Senator Smathers and the Bebe's well-known friendship with Nixon, that enabled him to use SBA money to help him acquire the prosperous Monroe Abstract and Title Co. of Key West, and to finance a shopping center and a string of laundromats in Miami.

Rebozo's Midas touch is largely responsible for the building of Nixon's personal fortune. In a financial statement before the 1968 election, Nixon placed his gross assets at $800,000 and his liabilities at $300,000. He said $400,000 of his assets stemmed from Florida real estate investments. Among other deals, in 1962 Nixon on Rebozo's advice had bought 185,891 shares of stock in the Fisher's Island resort community being developed by Rebozo off the tip of Miami Beach. He paid one dollar per share. Development plans were stalled, and after the 1968 election, to avoid conflict of interest with federal projects in the area, Nixon sold his stock back to Rebozo's holding company at two dollars a share, for a neat profit of $175,000.

In 1967, at Bebe's urging, Nixon was persuaded to pose for a publicity picture for a sub-division being developed by Don Berg on Key Biscayne. In return for this favor, which paid off handsomely by placing Key Biscayne in the national limelight, Berg sold Nixon two choice lots for a bargain price of $53,100. Five years later Nixon sold the lots to William E. Griffin, an attorney for the President's other millionaire chum, Robert H. Abplanalp the Aerosol magnate, for $150,000. This was the devious deal spotlighted in the Congressional investigation of Nixon's personal finances: Nixon's daughter Tricia. had loaned her father $20,000 of the purchase price; when the loan was repaid and she was given part of the profit, her share was transferred to Bebe Rebozo's account as a loan to him.

It was Bebe the Magnificent who shortly after Nixon was elected to the presidency, put together almost single-handedly the Southern White House retreat on Key Biscayne's opulent Bay Lane, where Rebozo has lived for years. The deal involved a five-house compound. Rebozo first arranged for Nixon to buy Senator Smathers' house, next-door to his own, plus another house. Robert Abplanalp bought another house and leased it back to the Secret Service at a handsome figure for Nixon's two terms. Then a complex deal was worked out whereby a stockholder in Rebozo's bank bought the fifth and last house, and leased it back to the White House as a communications center.

Columnist Jack Anderson revealed only last May that back in 1969, while Bebe Rebozo was already collecting secret cash contributions for Nixon's 1972 re-election campaign, he was also paying some of the President's bills. Anderson reported that he had traced to Rebozo's personal account an $11,978 check, which went to pay for electrical, air-conditioning, and painting work on Nixon's home in Bay Lane. He said he was also informed that Rebozo paid for a swimming pool, a pool table, and architectural services for the President. The check for $11,978, signed by Rebozo, was dated August 6, 1969. On August 7th another check for $11,307, this time a cashier's check drawn on Rebozo's bank and bearing Nixon's name as remitter although he was not in Florida at the time, was delivered to the same construction company; and on October 9th the company received payment for a $6299 bill it bad submitted to Rebozo for air-conditioning work on another of Nixon's Key Biscayne houses. Columnist Anderson noted that these payments were made just about the time the first $50,000 of the mysterious Howard Hughes $100,000 contribution was reported to have been delivered to Rebozo by Richard Danner, ostensibly to be used for campaign purposes. As one Senate investigator recently complained: "Rebozo's affairs are so commingled with Nixon's, that we cannot separate them."

Bebe Rebozo was also directly involved in the planning and purchase of Nixon's Western White House at San Clemente, California. In 1969, when it seemed Nixon might have difficulty in meeting the mortgage payments on the $1.5 million, 29-acre estate, Rebozo and Abplanalp formed an investment company and bought all but 5.9 of the seaside acreage for $1,249,000. Rebozo also bought a home for Julie Nixon Eisenhower and her husband David in Bethesda, Maryland.

This brings us into the 1970's, when Bebe Rebozo's friendship with Nixon first began to be publicized and spotlighted by the media, to the acute discomfort of the publicity-shy Cuban-American banker. Speculation arose as to the self-effacing Bebe's exact role in the President's life, both official and personal. U.S. News & World Report posed the question: "Is he a policy-shaping adviser reminiscent of Colonel House of the Woodrow Wilson era? Or is he just a non-political friend to a man who-outwardly at least-has few close friendships?" Reporters dug into the association of the two men; mutual friends were interviewed; the question was not fully answered, but the best information seemed to be that Rebozo was simply a close friend who refrained from dabbling in politics-though no one denied that he was Nixon's personal financial adviser. The President enjoyed relaxing in Bebe's company. It was duly noted that Bebe had profited in a business way by being known as the President's pal, just as Nixon's personal fortunes had prospered on Bebe's shrewd advice. One hand washed the other. This was before Watergate, before the revelation of Bebe's role as a bagman for secret political funds, and of the pair's joint connection with organized crime figures.

A feature story in Life magazine in 1970 pointed up Rebozo's touchiness about anyone trying to capitalize on his relationship to Nixon. Shortly after the 1968 election, Life reported, Rebozo took a telephone call at the yacht club, and came back to the table fuming. "Son of a bitch!" he said. "That was a guy I haven't seen since high school. Now he wants me to help him out in a deal by putting in a good word with the President!" And one White House aide said not long ago: "Bebe would endure having his nails pulled out one by one, rather than reveal anything but commonplaces about the President."

Rebozo himself said solemnly, in a rare interview with U.S. News in 1971: "Naturally, the justification for my high regard for the President should be apparent to everyone by now. It is my feeling that, if he were given credit for just a fraction of his accomplishments, he would already be heralded as one of the all-time great Presidents. I am sure history will recognize him accordingly." And a Nixon associate commented: "Mr. Rebozo's main role is to take some of the pressure off the President. Bebe is the kind of friend all of us want and need�a person who likes us for ourselves, and is not with us to use us."

Pat Nixon told interviewers that "the President is comfortable with Beeb." Close friends said she had a sister-like affection for the ingratiating banker, and the two Nixon daughters looked upon him as a favorite uncle. The President himself described Rebozo as "a great guy."

In those "innocent" pre-Watergate years of 1970-71�while the illegal undercover machinations to re-elect the President in '72 were going ahead full steam and the top-secret Plumbers Squad was bard at work with its break-ins, bugging and espionage, a rash of news photos appeared picturing Bebe Rebozo at happy family gatherings with the Nixons; entertaining them aboard his houseboat the Cocolobo (named after a tropical shrub); cooking steaming Spanish-style picadillo for the Nixons on his backyard grill; playing golf with the President; escorting the Nixon daughters and their fiances[sic]. There was even a picture of two pewter tankards engraved with the names of Nixon and Rebozo, still standing in a place of honor behind the bar in Key Biscayne's English Pub, where the two chums many years before had joined the exclusive Pewter Vessel Drinking Society.

All this publicity was good for Nixon's image as a family man, a good fellow devoted to his friends. But Bebe Rebozo didn't like it; he dodged interviewers on general principles; the media then were publicizing good things about him and the President; but the day might come when they would stumble onto something bad, so it was best to discourage their prying into the Nixon-Rebozo relationship. In standing by this attitude of shunning the limelight and keeping himself in the background, which some reporters called "the Howard Hughes syndrome," the Bebe was displaying prophetic vision. It wouldn't be long before their beautiful relationship would be tarnished by the Watergate disclosures.

Bebe Rebozo received his first bad publicity in September of 1970, when the New York Times and the Washington Post belatedly got onto the story of a lawsuit based on shady dealings that linked Rebozo and his fat little bank directly with organized crime, even with-that ugly word-the Mafia.

It had long been whispered in financial circles that there was something peculiar about the operations of the Key Biscayne Bank, with its limited assets and its policy of discouraging loans to ordinary customers. The bank, in which the President has his personal accounts, ranks at the bottom of the list of Florida banks in percentage of deposits loaned out to customers; yet the bank had lent large sums of money and handled accounts for officials of the syndicatelinked company that owns the Paradise Island Casino in the Bahamas. And now it was revealed that the Rebozo bank had loaned $195,000 to an Atlanta businessman-on the security of 900 shares of IBM stock which it developed had been stolen by Mafia hoodlums.

According to sworn testimony by Rebozo, the Atlanta man, one Charles L. Lewis, who apparently had no ties in the Miami area, applied for the loan in July of 1968, offering the IBM stock as collateral. Bebe said he "checked" on the stock and on Mr. Lewis-including, interestingly enough, making a phone call to the President's brother F. Donald Nixon in Newport Beach, California. Apparently the light was green, and the mysterious Mr. Lewis got his $195,000.

Some time later it was discovered that the stock had been stolen from E.F. Hutton & Company of New York by Mafia agents, allegedly for the express purpose of using it as collateral for the Florida loan. But Bebe couldn't return the stolen stock; it seems he had become suspicious of the loan at some point, and called it in. He said Lewis had told him to sell the stock-which had increased in value-to cover the loan and Bebe did so.

Meantime, before the whole story was known, Fidelity & Casualty Company of New York had covered Hutton for its loss of the stock, and in May of 1970 the insurance company sued Rebozo and his bank for $248,000 to reimburse the loss. The suit, filed in U.S. district Court in Miami, was not reported in the Florida or national press- at that time; perhaps its significance was not realized under all the legal verbiage, or perhaps there was a deliberate cover-up to spare embarrassment to the President's chum. Rebozo asked dismissal on the grounds that he had not known the stock was stolen at the time he sold it. Dismissal was denied, and a pre-trial conference was set for October.

When the story finally broke that September, Washington Post reporter Ron Kessler stated in an exclusive story that Rebozo had sold the stock after an insurance investigator had informed him that it was stolen. The investigator had testified to this under oath in a pre-trial deposition, and he had written a report to the company on his interview with Bebe in which he stated: "This would appear to me to be a shady deal, and I suspect that Mr. Rebozo was aware of this and did not want to become involved." Rebozo continued to deny that he had known the stock was stolen before he sold it; he specifically denied the insurance investigator's testimony.

The FBI meantime had been probing the original theft of the stock for more than a year, and eight Mafia figures were finally charged with the theft. Rebozo would have had to testify under oath in their trial; but he was spared this ordeal when in 1971 the Justice Department quietly settled the criminal case out of court. With equal lack of fanfare, the insurance company's lawsuit against Rebozo and his bank was "terminated" after a one-day trial by U.S. District Judge James King. The judge, who had been appointed to the bench in Miami by Nixon in 1970, summarily cut off discussion of the methods normally used by banks to determine whether stock offered as collateral is actually owned by the loan applicant. Judge King, a former lawyer, it may be noted, had been a director of the Miami National Bank during the time when, as charged in a federal indictment, mob kingpin Meyer Lansky was using the bank to hide and transfer illegal funds.

That was the end of the murky case of the stolen IBM stock-or not quite the end. Rebozo, in righteous indignation over the besmirching of his name and that of his opulent little bank, filed a $10 million libel suit against the Washington Post. The suit is still pending in Miami Federal Court; a Post motion to transfer it to Washington was denied, and the suit has dragged on. In retrospect, it certainly seems there was a deliberate cover-up and playing down of the still unresolved case, and the fact remains that Rebozo's name, and that of the President's brother, were directly linked with syndicate crime.

The picture was different in late October of 1973, when the mysterious Howard Hughes "campaign' contribution was revealed, and Bebe Rebozo was plumped right into the middle of the Watergate mess, in the role of Nixon's secret bagman for questionable funds. This time no cover-up was possible; the self-effacing Key Biscayne banker suddenly found himself in the full glare of the national limelight.

The disclosure came as the Senate Watergate Committee was winding up its investigation of dirty political tricks and focusing its attention on Republican campaign financing. Senate investigators, following up persistent rumors that Howard Hughes was somehow involved in Watergate, finally made the connection: the eccentric billionaire had secretly sent $100,000 to Bebe Rebozo�at a time when Hughes was trying to iron out some anti-trust problems with the Justice Department, involving his multi-million-dollar Las Vegas hotel and casino properties.

Committee investigators inverviewed the flustered Rebozo for five hours, and further pieced the still somewhat obscure and contradictry[sic] story together from other sources. Rebozo told them the "campaign gift" was suggested by Richard Danner, who at that time was managing director of the Hughes-owned Frontier Hotel, and delivered to him in two equal installments of cash, one in late 1969 and another in mid-1970. According to Rebozo, Hughes intended the money to be used in Nixon's 1972 re-election campaign. Danner confirmed the $100,000 gift, telling investigators he had delivered $50,000 in $100 bills to Bebe at San Clemente late in 1969, and another $50,000 to him at Rebozo's home in Key Biscayne in July of 1970. Danner said the money was a run-of-the-mill political contribution, earmarked for the 1970 off-year Republican Congressional campaigns; in this he contradicted Rebozo's statement that it was meant for the still-distant 1972 campaign. And the bizarre fact was that Rebozo claimed the $100,000 had never been used; he said he had kept it in its original packages of $100 bills, in a safe-deposit box in his bank-and returned it in the spring of 1973. According to Rebozo, the money was returned to the Hughes organization by a roundabout route: he said he gave it to William Griffin, the attorney for Robert Abplanalp, Nixon's other millionaire friend. The reason for this was not made clear. Rebozo said he decided to return the money, after hearing that Robert Maheu, the deposed head of Hughes' Nevada gambling empire, had mentioned the $100,000 contribution in a deposition connected with Maheu's $17.5 million defamation of character lawsuit against Hughes in Los Angeles.

Maheu reportedly said in his deposition that the money actually was intended to influence two pending federal cases involving the Hughes interests. Two such cases were decided in favor of Hughes, during the time in question: the Civil Aeronautics Board okayed the Hughes purchase of Air West, and the Justice Department cancelled an anti-trust action seeking to prevent Hughes from acquiring additional gambling casinos in Las Vegas. The Senate investigators began a full-scale probe of these allegations. Another odd coincidence also came under investigation: the fact that at the exact time the second installment was delivered in July 1970, Rebozo and Abplanalp were concluding a phase of their deal to buy Nixon's San Clemente estate to ease his mortgage problems�a phase involving the purchase of 2.9 acres for exactly $100,000. Rebozo denied that any of the Hughes money was used for this deal or for any other purpose; he said the funds lay idle in his safe-deposit box for three years, without even earning interest.

Following these disclosures, President Nixon at his press conference on October 27, 1973, declared that he felt Bebe Rebozo had shown "very good judgment" in holding the $100,000 Hughes contribution for three years, and finally returning it when it seemed that it might become embarrassing. Calling Rebozo a "totally honest man," the President said he trusted him implicitly. Nixon told reporters that he himself had not heard about the Hughes gift until early in 1973. Although it "might sound incredible to many people," Nixon said, he had a firm policy during campaigns, of not wanting to know about financial gifts till after the election.

Bebe Rebozo's efforts at self-effacement and dodging publicity no longer availed anything; he was now under the full spotlight of investigation by the press as well as by official probers. Senate investigators, subpoenaed the $100 bills and some of Bebe's financial records. In the wake of revelation of his handling of the Hughes gift, new details were unearthed about the operation of Rebozo's bank. In January 1974, Denny Walsh of the New York Times reported that Seymour Alter, who had hosted Nixon in 1962 on the first of the President's many visits to the Bahamas, was under investigation on suspicion of "skimming" funds from the Paradise Island Casino through the Key Biscayne Bank.

In February 1974, testifying in a deposition in a lawsuit by Common Cause against the Nixon re-election committee, Rebozo swore that the only person he had told about the $100,000 during the time he was holding it was the President's secretary, Rose Mary Woods. In March Rebozo was interrogated for two long days by the Senate Committee. It had been reported that Rose Mary Woods, while confirming that Bebe had mentioned a secret contribution he was holding, did not tell her the money was from Hughes nor that it totaled $100,000. Bebe insisted that he had told her all about the $100,000, and advised her to instruct his lawyer that in the event of his death, the money should be turned over to the re-election committee. "I don't think there is any discrepancy," Bebe told the Senate Committee, but when you are asked to relate details of matters that occurred years ago, there are bound to be discrepancies."

The possible extent of the "discrepancies" was revealed a month later, in April, when Herbert Kalmbach, the President's former personal attorney and principal cam-paign fund raiser, while awaiting a prison sentence for violation of federal election laws, dropped a bombshell in secret testimony to Senator Sam Ervin and a few staff members. Kalmbach said Rebozo had told him that he had handed out some of the Hughes money to Miss Woods, and some to Nixon's brothers, F. Donald and Edward, "and others." Kalmbach had been called for questioning after Terry Lenzer, a young Watergate Committee counsel, had been tipped that Rebozo had talked with Kalmbach about the Hughes money shortly before it was returned. Kalmbach told Senator Ervin that he had met secretly with the Bebe at the Madison Hotel on April 30, 1973�an appointment set up under Rebozo's code name "Mr. Gregory"�after Nixon had told Rebozo to seek the attorney's advice. According to Kalmbach's sworn testimony, Bebe told him the IRS was pressing him to prove that the $100,000 was not undeclared income, and he was in a sticky position, having disbursed some of it to the President's secretary and brothers, and then sworn that he had kept it intact. Kalmbach quoted the worried Bebe as telling him: "This touches the President and the President's family, and I just can't do anything to add to his problems. . . "

Kalmbach went on to say that after advising him to return what was left of the fund, and tell the IRS the full story, he had asked and received Bebe's permission to consult another lawyer, a tax expert, and had done so and received an opinion on the hypothetical question he presented without naming Rebozo. But the very next day-after that eventful night of April 30th on which Nixon announced the resignations of John Ehrlichman and Bob Haldeman and the firing of John Dean-Kalmbach said, he saw Rebozo at the White House; the Bebe seemed more relaxed and told him cryptically that there was no longer any problem. He next met the Bebe nine months later at San Clemente, Kalmbach said, and Rebozo told him his memory must have tricked him in their earlier conversation. "Since we last talked," Bebe told Kalmbach, "I opened the safe-deposit box and found the wrappers around the bills, and I realized that I couldn't have given any of that money out." (The $100,000 by this time had been turned over to the Senate Committee by Chester Davis, a Hughes counsel. Investigators were checking the serial numbers of the $100 bills to determine if any had been issued after the dates in question. It was reported that the original wrappers had been replaced with rubber handsand also that an extra $100 bill had mysteriously been added-making it $100,100).

Bebe Rebozo through his attorney admitted meeting Kalmbach at the White House to talk about the $100,000, but he categorically denied having said anything about giving part of it to anyone. Miss Woods and Nixon's brothers likewise denied they had received any such money from Rebozo.

Investigators, concentrating on "who put the money back," now focused on a series of meetings in the middle of May 1973, culminating in one at Camp David between Rebozo, Danner, and Nixon himself. Sources close to the investigation said Rebozo tried to persuade Danner to replace the "missing" part of the $100,000 with a further contribution. Another theory, according to Newsweek reporters, was that the "replacement" money might have come from Robert Abplanalp. Investigators learned of a meeting in June at an up-state New York fishing retreat, between Rebozo, Abplanalp and his lawyer Griffin. The following week, Griffin returned the supposedly intact $100,000 cash to Chester Davis, the Hughes attorney in New York. One investigator said the Committee had no adequate explanation why Griffin, to whom Rebozo had returned the $100,000, should have been connected with the matter at all-unless Abplanalp himself were involved.

Bebe Rebozo, the Florida yachtsman, was now in deep waters, and he knew it. If Herbert Kalmbach's story should be proven true, or if the Senators decided to accept his word against Rebozo's the Bebe could face possible criminal charges and a prison sentence-in which he would of course not be alone among those involved in the Watergate Scandal. Rebozo, who appeared before the Senate Committee in his seventh closed-door session of testimony on May 10th, adopted strike-back tactics similar to those of Dick Nixon. He filed suit in federal court alleging that the committee had obtained "false information" from Kalmbach and released it "maliciously" to the press. He charged the committee with harassment, and asked that its subpoena for his financial records be declared void. The subpoena asked him to produce any records dealing with unsecured loans to or from Richard Nixon, Tricia, Nixon Cox, and the President's two brothers, specifically between January 1. 1969, and March 31, 1974. Also sought were records of bills paid by Rebozo on behalf of the President, his brothers, or Rose Mary Woods. In fighting the subpoenas, Rebozo's attorney, William Frates, said: "He was trying to protect the President from Donald Nixon. That's tough to say, but that's the truth. To say that he (Rebozo) would take money from Howard Hughes and give it to Donald Nixon is incredible!"

While the House Judiciary Committee was proceeding with its impeachment hearings, the Senate Watergate Committee pushed ahead with its investigation. The IRS agreed to let the committee staff inspect the income tax returns of Bebe Rebozo and Donald Nixon. Subpoenas were issued for the President's two brothers. And a new "bagman" operation involving the Bebe was revealed, when the Senate Committee disclosed that A.D. Davis, vice-president of the Winn-Dixie food chain, had given Rebozo a secret contribution of $50,000 before the 1972 presidential campaign. A committee source said Rebozo had in his possession a letter from former Commerce Secretary Maurice H. Stans, Nixon's re-election fund raiser, acknowledging receipt of the $50,000. This contradicted a story in the Washington Post, quoting "informed sources" as saying that the money had never reached the re-election committee. Rebozo told investigators he had handed the $50,000 cash in an envelope to Frederick C. LaRue, one of the campaign officials who has pleaded guilty to obstructing justice.

Press reports in mid-May quoted Senate investigators as saying they believed the $100,000 contribution by Howard Hughes supplied the "missing motive" for the Watergate break-in itself, and thus stood at the very heart of the whole mess. According to these sources, Nixon's re-election committee feared it would be disclosed that the then Attorney General John Mitchell had "tampered" with an anti-trust case involving the Dunes Hotel in Las Vegas. The GOP campaign officials, it was reported, were afraid that Lawrence M. O'Brien, the Democratic National Chairman, knew about this matter, because he had formerly been a public relations consultant to the Hughes organizationhence they broke into Watergate to tap O'Brien's phone and search his files.

It was disclosed that Richard Danner had met several times with Mitchell in early 1970, to discuss anti-trust aspects of Hughes' proposed acquisition of the Dunes. These meetings were before the second installment of $50,000 was paid. (By this time there was some confusion as to the date of the first installment payment-some witnesses said it was in early 1970 rather than mid-69). Assistant Attorney General Richard McLaren, head of the Anti-trust Division, had already informed Mitchell that the proposed Hughes deal would violate the Justice Department's guidelines concerning mergers. However, soon after the Danner-Mitchell meetings-which were recorded in Mitchell's office log but not in the Department's files-Hughes received "a high-level go-ahead." Ironically, Hughes never did buy the Dunes.

On June 7th, Bebe Rebozo was still further implicated in Watergate, in secret testimony "leaked" by the Senate investigators. Lawrence M. Higby, formerly one of Bob Haldeman's chief assistants in the White House, testified that President Nixon told Haldeman on or about April 30, 1973, the day Haldeman resigned, that a secret fund would be made available for Haldeman's defense in the Watergate case. According to Higby, the President told Haldeman the money was being kept by Bebe Rebozo, and that as much as $400,000 was available. Gerald L. Warren, the deputy White House press secretary, refused to confirm or deny this latest revelation, merely taking occasion to condemn the Senate Committee for its "leaks" to the press.

In an amended complaint to their suit in federal court seeking to stop the committee from probing Rebozo's affairs, the Bebe's attorneys charged that the committee's special investigators were using "calculated deceits" to induce committee members to keep on investigating the embattled Florida banker. They also charged that Herbert Kalmbach bad given "false testimony" and violated the attorney-client privilege when he testified about his conversations with Rebozo.

On June 17th, Herbert Kalmbach was sentenced to six to 18 months in jail and fined $10,000 for his election law violations.

On June 18th, with the House impeachment committee hearings in full blast, the Senate Watergate Committee announced it had decided to complete its report without reaching any conclusions about President Nixon's role in the scandal. "Time has passed us by," Vice-Chairman Howard H. Baker Jr. (R-Tenn.) said, referring to the House Judiciary Committee's impeachment proceedings. "There will be no separate section on presidential involvement, in our report."

The committee also voted to wind up its work without further investigation of the activities of Bebe Rebozo or the President's two brothers. The committee rejected a motion that subpoenas for Rebozo and the Nixons should be quashed-but at the same time Chairman Sam Ervin said the panel had no intention of citing them for contempt of Congress for refusing to testify further.

It was revealed in June that Rebozo had sold his Key West-based Monroe Land and Title Company for an undisclosed amount, to the First Federal Savings and Loan Association of the Florida Keys. A spokesman for the purchaser said the negotiations had begun in August 1973. At the same time it appeared that Rebozo's banking monopoly on Key Biscayne might be breaking up. It was reported that Rebozo had been talking merger with the Southeast Banking Corp. and other financial institutions.

On June 22nd, the Senate Watergate Committee staff investigators, in a 47-page report to the Senators, stated that the second $50,000 contribution from Hughes was set in motion after John Mitchell secretly approved the $35 million Hughes bid to buy the Dunes Hotel. The investigators called the Attorney General's action "a classic case of governmental decision-making for friends."

It was duly noted that the money was delivered to Rebozo by Danner, the same Hughes agent who had dealt with Mitchell about the Dunes purchase. "As the evidence indicates, the apparent decision by Mitchell to approve the Dunes purchase is clothed with the appearance of impropriety," the report said. Investigation continued as to whether the $100,000 Hughes donation was actually a political contribution, or was for Nixon's personal use, in the pattern of the classic "slush fund."

On June 25th, Bebe Rebozo turned up in Brussels, Belgium, where the President, on his way to the summit conference at Moscow, was attending a meeting of NATO allies. He bad arrived secretly but was spotted by reporters. The President's press secretary said the Bebe had been in Brussels for about a week, on a combined business and vacation trip, and had dropped by briefly to visit Nixon at the U.S. Embassy. Rebozo refused to talk to newsmen.

Testifying in his $17.5 defamation suit against the Hughes-owned Summa Corporation in Los Angeles, Robert Maheu, deposed chief of the Hughes Nevada operations. supplied further details of the maneuvers leading to the $100,000 campaign gift in Rebozo's care. Maheu testified that the $100,000 was originally pledged for Nixon's 1968 campaign, but the "first attempt" to deliver the initial $50,000 was not made until a month after the election, and the money did not get to Rebozo until mid-1969.

"Why did it take so long?" asked U.S. District Judge Harry Pregerson. "The injection of third persons," Maheu replied. He explained that the contribution originally was solicited by Richard Danner, who in 1968 was a Nixon campaign fund-raiser assigned to the Miami area. He testified that Danner and Rebozo consulted with another ex-FBI agent, Washington attorney Edward P. Morgan, on how the delivery should be made. Morgan, according to Maheu, insisted that a receipt must be obtained, to insure that Nixon knew the money came from Hughes. When he was told that a receipt could not be furnished, Morgan refused to act as intermediary, Maheu said. Later the names of Donald Nixon and John H. Meier, at that time a Hughes aide, was discussed as intermediaries, but dropped; finally Danner gave the money in cash to Rebozo himself.

Robert Maheu further testified that he had ousted John Meier from the Hughes Nevada operations in 1969, when Bebe Rebozo relayed a White House request to Danner, for the breakup of Meier's close association with Donald Nixon. "We were requested by the White House to break up what they called a 'romance' between Mr. Meier and Mr. Donald Nixon," Maheu told the jury. He explained that Rebozo told Danner that Meier and the President's brother had traveled extensively together. Rebozo was quoted as saying that this didn't look good�"one representing Hughes and the other with the name of the President." Maheu said Rebozo asked Danner for the cooperation of the Hughes organization in putting a stop to this close association. Maheu said John Meier had originally been brought into the Hughes organization, on the payroll of Robert Maheu Associates, in 1966, when Howard Hughes, who had recently arrived on the Las Vegas scene, was trying to persuade the government to stop its underground nuclear testing in Nevada. Meier was hired because of his scientific background. At this writing he is under indictment on charges of conspiracy and tax evasion in connection with Nevada mining claims sold to Hughes. He also has been sued by the Hughes organization.

On July 1st the Los Angeles federal court jury decided that Robert Maheu had indeed been defamed when Howard Hughes said in a 1972 telephonic press conference that he had fired Maheu "because he's a no-good, dishonest son of a bitch and he stole me blind." The amount of damages to which Maheu is entitled will be decided in a further phase of the trial before the same jury, set for October 8th. In interim proceedings, Maheu's attorneys sought to force Summa Corporation to disclose its true financial worth, estimated in the billions.

On July 2nd District Judge John Lewis Smith Jr. denied Bebe Rebozo's plea for an order restraining the Senate Watergate Committee from further probing into his affairs or citing him for contempt. The judge commented that the issue was now moot, since the Senate panel's authority had lapsed on June 28th and the committee had would up its investigations. Senator Sam Ervin said there was no intention to pursue the Rebozo matter any further.

The Senate Watergate Committee on July 10th issued a massive three-volume report on its probe of the White House scandals. The report termed Watergate "an American tragedy," and blamed it on men who shared "an alarming indifference ... to concepts of morality and public responsibility and trust."

The committee's most potentially damaging shot against President Nixon was a special section in the 350-page report containing the allegation that between 1968 and 1972 Bebe Rebozo had paid out some $50,000�some of it in "laundered" campaign funds�for the private benefit of the President and his family. The Senate panel charged that Rebozo had spent $45,621 from four secret trust accounts, for improvements on Nixon's Key Biscayne property, using at least $23,500 in election campaign funds to do so. Among the Bebe's benefactions, the report alleged, were an $18,435 swimming pool, an $1138 billiard table, a $3586 fireplace, a $243 Arnold Palmer putting green, and $11,979 for co[n]verting a garage into living quarters. In addition, the report claimed, Rebozo paid $4562 toward a $5650 pair of diamond earrings Nixon gave Pat for her 60th birthday two years ago. The Senate report uncovered new ground in the unraveling of Rebozo's intricate financial involvement with Nixon, and revealed part of the Bebe's closed-door testimony. According to the committee, Rebozo had used a complex set of bank accounts in the name of his lawyer. Thomas H. Wakefield, to funnel more than $50,000 for the President's personal use; and the implication was that at least part of that sum may have come from the mysterious $100,000 cash gift of Howard Hughes.

Relatively minor in the amount of money involved, but important for other considerations, was the allegation that Bebe had spent $4562.28 in leftover campaign funds for earrings for the First Lady. This was perceived by the committee as a graphic symbol, calling to mind the young Nixon's boast on the famous "Checkers" telecast 22 years ago, that his wife wore "a respectable Republican cloth coat." The information about the earrings also helped investigators trace the pattern by which much of Nixon's campaign funds had apparently been "laundered" for his personal use.

The Senate report charged that the $4562.28 portion of the $5650 spent on the earrings originally came from campaign funds Rebozo had collected, and that the Bebe had attempted to disguise the source of the money by transferring it in and out of four separate Florida bank accounts. The $4562.28, the report alleged, was part of $6000 that Rebozo withdrew on April 15, 1969, from the Florida Nixon for President Committee account in his Key Biscayne Bank, and immediately deposited in a trust account in the name of attorney Wakefield. Then on June 28, 1972, the report went on, either Rebozo or Wakefield transferred $4562.28 to another Wakefield trust account in the same bank, then on the same day transferred $5000 from this account to still another Wakefield trust account in the First National Bank of Miami, and finally purchased a $5000 cashier's check payable to New York jeweler Harry Winston.

Balance of the cost of the $5650 earrings was covered by two personal checks, one from Nixon himself for $560, the othe[r] from his personal secretary, Rose Mary Woods, for $90. The earrings, containing 20 diamonds, were delivered by Winston's Washington representative, the late Don Carnavale, to Lieut. Commander Alex Larzelere, a White House aide, and the bill was marked "Please send to Rose Mary Woods." The earrings were subsequently appraised by Carnavale at $9000�the jeweler had given the President a handsome discount.

Bebe Rebozo admitted in testimony to the committee that the $4562 had originally come from campaign funds, but contended it was partial reimbursement to him of the $6000 incidental expenses he had incurred during the 1968 campaign�and that he had made the President a gift of it for the First Lady's diamond earrings. The committee commented in its report: "This complex four-page process of payment for this gift concealed the fact that the funds originated from contributions to the 1968 campaign, and were ultimately used by Rebozo on behalf of President Nixon."

The report also charged that Rebozo used various trust accounts, again in the name of Thomas Wakefield, for the deposit and transfer of at least $20,000 in $100 bills, and that these funds were used to pay for part of the $45,621.15 improvements to Nixon's Key Biscayne properties.

It was also revealed that Herbert Kalmbach had told the committee that Nixon's two brothers, Edward and Donald, had both received money from the 1968 presidential campaign funds. Kalmbach testified that a $25,000 contribution from shipping magnate D.K. Ludwig was the source of a $3000 payment to Edward Nixon, at a time when he was "between jobs." The payment, Kalmbach testified, was approved by Maurice Stans, the campaign treasurer. Kalmbach further said that after he was made trustee for $1.8 million in leftover 1968 campaign funds, he discovered that $5000 was missing from an envelope containing cash in a safety deposit box. The envelope bore the notation that $5000 had been paid to Donald Nixon for "expenses."

The committee did not go into the question of whether any specific laws had been violated by this wholesale juggling of campaign funds for private use. Department of Justice sources told reporters that such use of campaign funds for personal expenditures is not a violation of election laws, but in some instances could be considered fraud or misappropriation. Also the committee noted it could find no records showing that the President bad paid income tax on any of these "gifts," or that Rebozo had filed the seemingly required gift tax returns. The only record of any reimbursement by Nixon to Rebozo was a check for $13,642.52, issued in August 1973, when Rebozo's affairs were being scrutinized by the IRS as well as by the Watergate Committee.

Among other revelations about Bebe Rebozo's role as a volunteer political fund-raiser and bagman, was a White House memorandum of February 1969, in which Nixon asked Rebozo to solicit billionaire J. Paul Getty in London for a "major" campaign contribution�three months after the President had been elected. Getty subsequently contributed $125,000 to Nixon's 1972 re-election campaign. It was also revealed that in early 1969 Rebozo set up a special account in his Key Biscayne Bank, with Wakefield as trustee, to pay what he described as "Administration-connected costs." This was the account from which the money for Pat's diamond earrings was withdrawn in June 1972.

The Ervin Committee fell short in what had been the primary purpose of its investigation of Rebozo: to prove a definite link between Rebozo's expenditures in the President's behalf and the $100,000 contribution by Howard Hughes. The report alleged, but failed to provide proof, that Rebozo did not keep the $100,000 intact in a safe deposit box for three years before returning it. The report cited the testimony by Kalmbach, which Rebozo had vigorously denied, that the Bebe had told him that he gave part of the $100,000 to the President's brothers, to Rose Mary Woods, and "others." Thus Rebozo's possible manipulation of the Hughes campaign gift still remained-like Bebe Rebozo, himself�"a riddle wrapped in a mystery inside an enigma."

When Nixon resigned on August 8th and returned to San Clemente, among his first visitors were Bebe Rebozo and Robert Abplanalp. There was no announcement as to what they discussed, but the press noted that both of the ex-President's millionaire friends have an interest in the San Clemente estate, on which a balloon mortgage payment of $226,440 plus $17,000 in interest is due in January 1975.

On August 19th, Special Prosecutor Jaworski filed an affidavit in federal court in Washington, stating that evidence indicated that Bebe Rebozo had diverted at least $41,000 in Nixon campaign funds to the personal benefit of Nixon and his family- including the diamond earrings and the Key Biscayne home improvements. The affidavit, signed by Assistant Special Prosecutor Paul Michel, alleged that the evidence indicated that the money in question was diverted from $150,000 in Nixon campaign funds collected by Rebozo, including the $100,000 contribution by Howard Hughes and $50,000 from food-chain magnate A.D. Davis. During the period in question, the affidavit said, Rebozo "apparently did not have sufficient cash available to make these deposits from any known source other than the campaign contributions."

The affidavit was filed by the special prosecutor in support of the subpoenas he had issued for Rebozo's three attorneys to produce records bearing on the transactions in question, as detailed above. The trust accounts covered by the subpoenas, Michel alleged, "Were used to conceal the source of payments made at Mr. Rebozo's instructions, and to 'launder' political campaign contributions."

Jaworski's action, a little more than two weeks before President Ford's surprise move in pardoning Nixon before he was formally accused of anything, indicated that criminal prosecutions were being contemplated. The affidavit stated that the documents sought from Rebozo's Florida attorneys would "assist the grand jury and the special prosecutor in determining whether and what currency received as political campaign contributions was subsequently used for the personal benefit of Mr. Rebozo, former President Nixon or others, and what federal criminal laws, if any, may thereby have been violated."

On August 22nd, U. S. District Judge George L. Hart Jr. I after hearing arguments, refused to quash the subpoenas, and also ordered the three attorneys, Thomas H. Wakefield, Robert Hewitt and Garth A. Webster, to testify before the grand jury. Hart's ruling was particularly important because the material that Rebozo's lawyers were ordered to produce was far more extensive than the documents the Senate Watergate Committee had been able to obtain. The attorneys had successfully invoked the attorney-client privilege to limit the Senate inquiry. They had attempted to resist the grand jury subpoenas on the same grounds, but Judge Hart turned them down, ordering them to appear for questioning and to produce the documents Jaworski requested. Questioning was expected to center on the recollection of Wakefield, Rebozo's attorney for 20 years, of statements Rebozo made to him concerning the source of the funds, and why the transactions were handled in such a devious manner.

A Washington Post story on August 25th reported that confidential financial statements showed that Bebe Rebozo's wealth had increased nearly seven-fold during the first five years that his friend Nixon was President. Just before Nixon took office in 1969, Rebozo reported his net worth as $673,000. By September 1973 his net worth, largely in real estate and holdings in his bank and other companies, had jumped to $4.5 million. His 1968 income, according to his 1969 statement, was $35,800; in 1973 it was "in excess of $200,000."

The New York Times reported in an exclusive story that a stillsecret report of the Senate Watergate Committee supported the theory, already expressed, that the Watergate break-in and the intelligence -gathering plot that inspired it were the end-result of a White House effort to suppress public knowledge of the $100,000 payment to Rebozo by Howard Hughes. The 42-page document, the only part of the committee's final report not yet released, was said to be based on an analysis by Senate staff lawyers of the millions of words of published and unpublished testimony during the panel's 18-month investigation. The report was not released with the committee's other findings because of reported objections by the chief minority counsel, Fred D. Thompson, that it was inconclusive. It was expected to be made public later.

According to the Times story, the evidence assembled in the unreleased report points out that the first public mention of the $100,000 Hughes contribution was made by syndicated Washington columnist Jack Anderson in August of 1971, about a year after the second installment was paid to Rebozo. Later Herman M. Greenspun, publisher of the Las Vegas Sun, tried to obtain further details, and John Ehrlichman sent Herbert Kalmbach to assure Greenspun that the Hughes funds had not entered into the San Clemente purchase-and also to find out how much Greenspun knew about the Hughes contribution and Donald Nixon's relations with the Hughes organization.

According to the report, the White House was greatly concerned lest some of the less easily explained details of the Hughes-Rebozo transaction might surface to embarrass Nixon in his 1972 campaign; and it was this that inspired the Watergate break-in, to find out what the Democratic Committee might know about it. Thus, by this theory, Bebe Rebozo and his murky activities were behind the whole Watergate mess. At this writing the grand jury investigation is still going on, and many questions remain to be answered.

pps. 505-518

=====



Charles Gregory (Bebe) Rebozo, the President's closest friend, confidant and financial adviser, who has become increasingly involved in the Watergate investigation. Rebozo has admitted handling the controversial$] 00, 000 contribution of Howard Hughes, and other secret gifts of cash to President Nixon, allegedly for campaign purposes, which have come under Congressional scrutiny.

Bebe Rebozo with his steady date, Jane Ann Lucke, a Miami divorcee. They are pictured petting a tiger cub at a zoo party in Miami in December 1969.

Bebe Rebozo pictured in 1960, relaxing in the yard of his Key Biscayne home. He was a close friend of Vice-President Nixon at that time, and stood by him when Nixon was defeated by Kennedy for President.

Vice-President Nixon (right) and his close confidant and constant companion Bebe Rebozo are pictured in their fringe-topped golf-cart at Miami's Riviera Country Club in 1958.

President Nixon declines a sandwich offered by a vendor at Miami's Orange Bowl, as he and his friend Bebe Rebozo watch a night football game in 1969.

President Nixon and Bebe Rebozo wave from the stern of Nixon's government yacht "Julie," cruising in Biscayne Bay in March 1969.

Bebe Rebozo, (right) receives a safety sticker for his 40-foot houseboat the "Cocolobo," from U.S. Coast Guard Auxiliary Commander William Streeter in 1969.

Churchgoers: President Nixon leaves the Community Church at Key Biscayne with Bebe Rebozo (left) and pastor, the Rev. J.A. Geschwind, in February 1969.

Rare interview: Charles Gregory (Bebe) Rebozo smiles during an exclusive interview with the Miami Herald in October 1973. The interview, conducted in the offices of one of Rebozo's Miami lawyers, was the first granted by Rebozo in five years.

"Take good care of him": Bebe Rebozo (right) huddles with Dr. Walter Tkach, the presidential physician, as they leave Bethesda Naval Hospital where President Nixon was confined with viral pneumonia in July 19 73.

Bebe Rebozo smiles as he arrives to testify before an executive session of the Senate Watergate Committee in March 1974. He was called before the panel to testify about the mysterious $100,000 campaign donation by Howard Hughes.

Second appearance: Bebe Rebozo walks to the Senate Watergate Committee's executive session for the second day, to testify concerning contributions to Nixon's 1972 re-election campaign.

Break for lunch: Bebe Rebozo, flanked by security men, goes out for lunch, while testifying before the Senate Watergate Committee for the seventh time in May 1970. Rebozo admitted receiving a $100,000 campaign contribution from Howard Hughes and holding it for three years before returning it. Rebozo's attorney said of Bebe's action: "He was trying to protect the President from his brother Donald."

Close security: Bebe Rebozo is sandwiched between Capitol policemen after being interrogated under oath behind closed doors by the Senate Watergate Committee.

President and friend-President Nixon walks with his arm around his long-time friend "Bebe" Rebozo, as the Nixons arrive at the Key Biscayne helicopter pad for a weekend in Florida.

Testimony over: Bebe Rebozo leaves the Senate Watergate Committee's executive chambers after concluding his testimony about his handling of Nixon campaign contributions' Rebozo filed suit to stop the Committee from investigating his affairs or compelling him to testify further. The Committee later voted to wind up its investigation without calling Rebozo again.

Former Presidential Attorney Herbert W. Kalmbach testified to the Senate Watergate Committee that Rebozo had told him he had "disbursed" part of the $100,000 campaign contribution by Howard Hughes. Bebe swore he had kept it intact. Kalmbach is pictured leaving the U. S. Courthouse after pleading guilty to violating federal election laws through his handling of campaign contributions. He was sentenced to 6-to-18 months in prison and fined $10,000.

-----
Aloha, He'Ping,
Om, Shalom, Salaam.
Em Hotep, Peace Be,
Omnia Bona Bonis,
All My Relations.
Adieu, Adios, Aloha.
Amen.
Roads End
Kris

Texans, Germans and Saudis. Oh, my!

Texans, Germans and Saudis. Oh, my!

A Nation in Peril? Tuesday July 12th, 2005

There is a significant likelihood that the United States is going to experience a nuclear attack. This attack will probably take the form of the destruction of more than one American city, and will be designed to cause maximum casualties.

This seems inevitable because the steps necessary to prevent it have not been taken, and perhaps cannot be taken. While some efforts have been made by Homeland Security to secure our borders and ports against the importation of illegal nuclear materials, the reality is that a determined enemy will eventually get such things through.

But who has both the motive and the means? Certainly, al Quaeda would appear to have the motive, as would any number of other terrorist groups, Islamic and otherwise. There is more to it than that, though.

While I cannot prove it with documentary evidence, I can speculate that there is a hidden group, not really organized in any overt way, that, taken together, possesses both the motive and the will to engage in this horrific act.

The reasons for this are many, chief among them the fact that there would seem to be elements within the United States government who are deeply committed to destroying this free society, and rendering it powerless to prevent their larger aims in the world, which are to fulfill a modified version the racial and social objectives that were formed in Germany during the twenties and thirties of the last century.

The power centers of this group are three: Saudi Arabia, Munich, and Texas. Elements of these three communities are connected by a secret bond of loyalty that was forged during and after World War II, in the German prisoner of war camps in South Texas, in the Islamic Center of Munich, and among Texas oil men and the Saudi kingdom.

Beginning in 1942, the British began to be unable to house all the German prisoners they were taking in North Africa, then, as the war wound down, in Europe. By late 1944, the western Allies were refusing the surrender of German soldiers, and simply disarming them and sending them home. The Russians were briefly interning them and then killing them like cattle.

Prior to this 650,000 German prisoners were sent to internment camps in the United States. A number of these camps were located in Texas, in Hearne, in San Antonio and other places, mostly in South Texas, because the soldiers had been captured in North Africa and the Geneva Convention required that they be interned in areas similar to those in which they had been captured.

Soldiers in these camps were governed by their own officers, which meant that a powerful Nazi presence existed in the camps. In fact, they were run by Nazis, with the full co-operation of the US government. Again, it was required under the Geneva Convention that officers of captured troops be allowed to remain responsible for the welfare of their prisoner-soldiers.

Also in South Texas was a substantial settlement of Germans who had come as a result of the urging of an early colonist of German extraction, Fredrick Diercks. At present, there are about 2.5 million Texas Germans, located mostly in the hill country north of San Antonio, San Antonio itself, and throughout south Texas.

I am, myself, a Texas German, and I do not mean to imply by anything that follows that I think that the majority of Texas Germans are in any way disloyal Americans, or even that people of German descent in Texas form the core of the present post-Nazi group I am discussing here.

However, Naziism was brought to Texas by Germans, and it has taken root there, not as a conscious ideology, but as a set of beliefs, attitudes, and political methods that amount to the same thing. At least, this is my belief. I cannot provide documentary evidence, only that of my own experience and memories of what went on in Texas before and during the war, as told me by my father.

Prior to World War II, there was a significant Nazi movement in the United States. The FDNA, the American Nazi Party, was run from Germany until 1936, when it became the German-American Bund, an American-run replacement that was designed to be less unpopular with the American people.

In South Texas, there were about 2,000 registered Bund members when war broke out between Germany and the US. Most of them were in south Texas, specifically in San Antonio and the counties to the south and east of that city. Some of them were were interned in camps in Crystal City and Kenedy, Texas, along with German aliens who had been in the United States at the time war was declared.

This was done to prevent them from sending money to Germany via Mexico. Like the more public Union Bank, which had been created by Prescott Bush with the support of influential Germans, the purpose of this was to enable Germany to replenish its gold reserves, which had been severely depleted after World War I. After WWII began, Germany�s need for gold became more urgent, because of the demands of the war.

There was much communication between German nationals and US Bund members interned in Kenedy and Crystal City, and Nazi officers interned at Fort Sam Houston in San Antonio. This was monitored by US Army officers who moved between the three groups trying to find out how US dollars were moving from South Texas to Mexico, where they were being used to buy gold to send to Germany.

Profoundly loyal relationships were developed between some Texans, Germans and others, and members of the Nazi party interned in the various camps. These relationships survived the war, and after it was over, the overseers of Project Paperclip, which was a program that brought German scientists of use to the United States into this country, determined that Air Force installations near San Antonio would be a good place to base such scientists, who would find a relatively more receptive community in which to live.

At the same time in Germany, an event was taking place that would form the basis for the connection between Saudi Arabia and the Nazis and, ultimately, oilmen among the Texas Germans, who have brought their loyalties forward, at this point, two generations.

During the war, large numbers of Red Army soldiers deserted to the Wehrmacht, and many of these soldiers ended up in West Germany after the war. As they learned more about Nazi ideology, they discovered in its occult roots a connection to Islam that drew them toward that religion, but not entirely because they believe in the words of the Prophet in the same sense that an ordinary Muslim does.

By 1958, ex-Nazis founded a mosque in Munich, which, on the surface, was a place of Moslem worship, but which was also a center for Nazi recruitment and maintenance of the Nazi organization throughout the world. It is my belief that there was a need for funding, and this was found by following the traces of the old gold path back through Mexico to the Texas Germans. The movement took on its Moslem appearance and character when it became clear that existing Arab ad-hoc financial systems, which primarily involved cash transfers based on coded telegrams, would be an ideal means of funding substantial activities, which included, by that time, very extensive political operations throughout Latin America, as well as a slow process of infiltration of the American political system.

Information about how to access these Arab financial systems, and how to gain the confidence of the Saudis was provided by representatives of ARAMCO, the Arab-American Oil Company, Texas Germans who were sympathetic to the larger aims of the Munich group.

The infiltration of the American political system was accomplished by reconstructing the links that had existed before the war between the German-American Bund and the followers of Father Charles Coughlin, an influential Nazi sympathizer of the thirties.

Originally a supporter of the New Deal, by the late thirties Father Coughlin had abandoned his National Union of Social Justice and created the Christian Front, which is the foundation, in one way or another, of many modern extremist political organizations that characterize themselves as Christian.

Increasingly, in the late thirties and early forties, Father Coughlin became more pro-Nazi and anti-Semitic. An FBI raid on Coughlin�s headquarters in 1940 revealed evidence that the group planned the murder of many Jews and other political leaders, and Father Coughlin faded from the national scene.

After the war, many of Father Coughlin�s followers sought other means of expressing their anti-Communism and anti-Semitism, and their relationships with members of the German-American Bund.

There is no structured organizational link between the old Bund, Father Coughlin, and modern extremists on the left and the right in the United States who, mostly without realizing it, are members of groups that support the larger objectives of Naziism, which is a vitally alive and active, if concealed, political presence in the modern world.

However, when you see members of the left claiming that they are �anti-Zionist,� not anti-Semitic, and sometimes defending blood-soaked forgeries such as the �Protocols of the Elders of Zion,� a fabrication created in the late nineteenth century by elements of the Okrana, the Czarist secret service, to justify economic expropriation of Jewish assets by cash-strapped Imperial Russia, you are seeing unconscious Nazis doing the work of the larger group, which remains to eliminate democracy as a form of government, and to eradicate the Jewish race.

Similarly, when you see radical Christian groups claiming that the Nazi stronghold Colonia Dignidad in Chile had innocuous aims, and calling for the replacement of the American republic with a �Bible republic,� you are seeing groups carrying out, for the most part unconsciously, the objectives of world Naziism.

Modern Nazis do not express their sympathies openly. The American Nazi Party, for example, has no more to do with them than do publicly visible racist organizations in Germany and Russia. Rather, they are Nazi by their sympathies and their beliefs, not in name or by virtue of membership in political organizations. In fact, most of them would argue strenuously that they were not Nazis, despite the fact that there had been Nazis in their pasts.

Whether conscious admirers of Hitler or not, these people, with their shared beliefs and loyalties, and their successful avoidance of discovery by the press, have come very close to Hitler�s objective, which is world domination by a central authoritarian government that would function as an umbrella over all other governments. However, there is a difference now. In order for such a profoundly inhuman, not to say inhumane, organization to control the life of man, it would need to be a deep secret. In fact, it would need almost to be tacit, an organization of shared beliefs and agreements, rather than anything on paper.

This is what it is, in fact. Its members, at this point, are bound more by family ties and a belief that they have a superior ability to govern, than by any sentimental connection to Adolf Hitler. They are Nazis, however, in that their personal ideology is authoritarian and racist in the same ways, and for the same reason, that Nazism was authoritarian and racist, and arises from the same deep currents of fear, personal arrogance and tribalism that gave rise to the Nazi movement.

The link with Saudi Arabia has three roots: money, Islam and anti-Semitism. The mosque in Munich appears now to be a thriving center of radical Islam and anti-Semitism, carefully concealed to avoid violating German law. Money travels freely around the world, borne on the tide of an ancient system of finance that is cash based and, at this point, completely untraceable. It gets its cash from the Saudis and from counterfeiting operations located throughout the world, most notably in Syria, Iran and Myanmar. Indeed, counterfeit dollars are at this point so perfect that they cannot be distinguished from real currency at all. Nobody knows how much American cash is fake, but billions of dollars a year are poured into the world economy in the form of artificial American cash.

Returning to the roots of Nazi influence in modern America, and why this is leading to a nuclear attack on the United States, it is necessary to explore the current situation, so that we can understand why these people, as close as they are to goals they have been pursuing for generations, would suddenly feel so threatened.

It is first necessary to understand that they began the process of gaining control of the United States back in the fifties, when they began to act, behind the cover of an extensive and cancerous system of �classification,� through which all important information was routinely withheld from the public, to consolidate their power within the military, the cutting edge of space science, and the human behavioral arm of the intelligence community.

Dwight Eisenhower was well aware of this problem, and in his last speech as president of the United States warned against the growth of the very �military-industrial complex� that has come to dominate American society, and has preserved itself past the cold war by manufacturing an artificial atmosphere of crisis, without regard for the welfare of the nation or the lives of its citizens, or those of any other nation.

After John F. Kennedy was elected to office, Eisenhower warned him that these people had taken over a small piece of American soil called No-Name Key, where the International Penetration Force was being trained. Kennedy accordingly put a stop to activities on No-Name Key and aborted the planned invasion of Cuba.

This outraged a group of right-wing Texas oilmen, among them H. L. Hunt and others, who began to seek the assassination of Kennedy. Whether they succeeded or not remains a source of controversy, but certainly they wanted Kennedy dead.

During the fifties, also, various CIA-sponsored mind control experiments, among them Operation Bluebird, MK-ULTRA and others, sought to create, and did create, assassins, of whom Robert Kennedy�s murderer, Sirhan Sirhan, was almost certainly one.

The Kennedys were killed not only because of Cuba, but because they did not intend to extend American operations in Vietnam, and, above all, were aware of the fact that people with what were essentially Nazi sympathies were getting involved in the American political process, most particularly in Texas.

There are deep sympathies among some Texas, especially connected to the oil industry, that coincide with the interests of the Munich mosque, the Saudis, and American authoritarians who seek to establish a world government that controls local puppet states across the planet, without regard to how they function locally, as long as they act toward the great corporations that are the real seat of elite power, as they are bidden to act.

Over time, the objective of this elite is to establish itself as a kind of international royalty that will rule a planet of what will essentially be pacified slaves. In general, human beings will no longer be able to move between countries freely, will no longer have access to a free exchange of ideas, and will be caught in an economic trap from which, without any meaningful organizations among the general population to balance the power of this authority, there will be no escape.

As was true when the Roman republic collapsed, the appearance of free government will be maintained. The Roman senate continued to sit, and apparently to govern a republic, for hundreds of years after all power had, in fact, passed to the emperors. City officials continued to be elected as before, throughout the empire. But, in fact, it was not a free society, and eventually succumbed, as this new one will, too, to the cumbersome inefficiencies of authoritarianism.

Sadly, we will face, on a larger scale, the same fate that befell the Romans, who celebrated in the streets when the brutal imperial tax collectors came no more. Within two generations, most of the western Roman empire had degenerated into starved and miserable communities isolated from each other by a lack of roads, by the decline of Latin into a polyglot of slangs, by the isolation of government to the point that the only real order any leader could impose, for example, in Gaul, extended only as far as a soldier could march in a day. Money was forgotten to the point that, when it began to be reintroduced a few hundred years later, it was regarded as a form of magic. Literature, the arts and science declined into a confusion of superstitions that led to the dictatorship of the church, a malign barbarism that lasted a thousand years.

It is impossible to estimate just how much mankind lost of hope and freedom when the Roman republic collapsed, or how much more with the collapse of the empire, but certainly we are as we are today, mired in this strange and malignant state of wars, alarms, disasters, and concealed leaderships because we have never managed to truly democratize, to finally establish an economic and governmental system that flows from the individual and not the various institutional forms that have arisen, in endless variety, over the millennias-long struggle of this species to free itself from those who would impose the will of the few on the many.

It may seem a long leap from there to the Kennedy assassinations, the shoot-down of TWA Flight 800, 911, the London bombings and the threat to Carl Rove that has emerged in recent months, but it is not.

It is difficult not to think that this silent, almost ad-hoc movement of authoritarians is not deeply invested in the United States military and in the government, and acting to further its objectives from positions of power, that are protected by the political leadership because it is no longer powerful enough to dislodge them, or does not care to do so, or cannot find them.

Despite the absurd explanation for the presence of a missile track in a video of the Flight 800 disaster offered by the CIA after the event, it still remains true that the plane was shot down. The one vessel known to be in the area at the moment the plane exploded that was probably involved�a small boat that headed out to sea at high speed immediately after the incident�was the only craft not investigated by the FBI. The CIA�s explanation of the missile track is childish propaganda, as silly as the explanation for why the 757 that struck the Pentagon on 911 mysteriously vaporized.

It is my belief that Flight 800 was shot down by elements operating within the United States government, and using its facilities and resources, in order to prevent documents that had been placed aboard the plane from reaching Kennedy associate Pierre Salinger in France. I fear that these documents would have proven connections between people like Roy Hargraves of No-Name Key fame, H. L. Hunt, and a number of other Texas millionaires who have been heavy political contributors over the years to both US political parties, both of which have accepted this tainted money and become its victims.

Judging from his statements at the time, Mr. Salinger was well aware of what was coming his way, which was why he so vociferously maintained that the plane had been shot down. He knew it, I suspect, certainly, but was led, through a lack of sophistication, into making a fool of himself over the matter.

What happened on 911 is that a consortium involving the Bin Laden family and their friends in Texas engaged in an operation that was, to an extent, co-opted by the errant Bin Laden brother into a much more extensive attack than the rest of the conspirators had expected. They did not count on suicide bombers, nor on the fact that the World Trade Center could be entirely destroyed. They sought a spectacular and terrifying event, not a catastrophe on the scale that actually unfolded. However, they did receive the benefit of the event, which was exactly the same benefit that Adolf Hitler received after the burning of the Reichstag in 1933: a transformation in popularity inspired by public fear.

I do not know if the president--or any president, for that matter--has been consciously aware of the existence of this malign structure. I'm not suggesting that the Bush administration would engage in an act of terrorism to boost its popularity.

What I am suggesting is that there are elements who operate within the government, subverting and misusing its power, who might well do that.

It is possible that some of these people are close to the administration, and using it, without its knowledge or full understanding, to carry out very malign aims.

This could have happened during any previous administration from Eisenhower's on.

If the public wakes up, a vast historical change could then begin to unfold. As ordinary people across the world realize that the whole system of beliefs, dogmas, ideologies, hostilities, battles and rivalries by which we live are an illusion created by a cynical leadership, and do not emerge out of the hearts of the people, it could be that mankind will refocus on the only thing that has ever mattered, from the beginning of history: that each individual obtain sufficient prosperity and happiness, in a peaceful context, to express all of his potential into the world, and taste of this life to the fullest.

This desire is the great current of human life, the vast, unstoppable river, as it were, of souls seeking to ascend into a new realm of freedom. Standing against it, and thinking of themselves as carrying the banner of a desperate elite against the torrent of a despised horde, are the inheritors of the traditions of race and entitlement that go as deep, and were briefly given voice by Adolf Hitler.

If these people do not get what they need, and fast, they are going to falter. The US midterm elections will be a catastrophe for the Christian right, and thus also for them, for they hide themselves among the many good and sincere people who give that movement its importance by their loyalty to it.

This will result in a new congress, one that is about evenly divided between moderate Republicans and Democrats, that will be willing to pursue investigations that must not be pursued, if the elite is to continue to hold sway. It will lead to a revitalization of the press, which has been in thrall to the power of government since 9/11.

It will lead, in short, to the destruction of a system that has, from the assassination of Kennedy to 911 and beyond, come within inches of the goal it has held for generations, which is domination of this planet.

Another small terrorist attack in the US will not be sufficient to stop the unraveling that is threatened. In fact, that will only weaken an administration whose one area of popularity remains its effectiveness against terrorism. No, something much larger is needed now, and the sudden expansion of discussion about the possibility of nuclear terrorism should be taken as a sign and a warning. There is great peril now. If the administration begins to collapse, and that does not seem far off, given Mr. Rove�s troubles, a gigantic terror attack on American soil would seem to be one way this malign presence might choose to shore it up.

The president will act as he did last time, doing everything he can by his own lights to help the people, and, I would hope, never imagining for a moment that elements within the government were involved in the catastrophe, any more than Bill Clinton knew that Flight 800 was an act of terrorism, or that this fact was protected by a skillfully disempowered FBI investigation.

We can only hope that they will hesitate to pull the trigger until it is too late for them to do so, in the event, by the grace of God, that time might come.

http://www.unknowncountry.com/journal/?id=188

The company they keep

The company they keep

The company they keep

By nessie

That Germany lost the Second World War is not in doubt. That Germans suffered as a result is obvious. Some suffered more than others. The rich suffered least. Few were surprised. That is the way of suffering, war or peace. The Poles, the French, the Belgians, the Dutch, the Serbs, et. al., and especially the Russians certainly suffered while they were losing. Then the tide turned. This is the way of war. Tides turn. Winning now is no guarantee against losing later. Somebody always loses eventually. Civilians start losing on day one.

The Wehrmacht lost the war. The Luftwaffe lost the war. The civilians lost the war. The Nazis, however, did not lose the war. The Nazis got away. It is true that a tiny minority of individual Nazis lost the war. Goebbels, Goering, Kaltenbrunner, and the man claiming to be Hess lost the war. Perhaps it is even true that Hitler and Himmler lost the war as well, though forensic evidence to the effect is notably scant.

The Nazi Party and the S.S., as organizations, got away intact. They got away with the money, the Reichsbank treasury, $15,000,000,000 in 1945 money. This included the tooth gold. Guinness calls it the world's largest unsolved robbery. Then there was all the stolen art, pieces of which, to this day, occasionally surface. The Nazis did very well in the war, from a business viewpoint. War is a business. It is fought for material gain. The Nazis gained materially, and lived to spend it � thus, they won the war. They did not win as much as they wanted to win, but who does? They did win a great deal. What they lost was territory. What they gained was treasure, new friends, and experience.

The treasure included a couple of U-boats full of bearer bonds, numbered stock shares and patent certificates.

This represented:

" ... the hard core of Nazi wealth in Latin America. In 1944 a great treasure had been sent secretly across the Atlantic, the famous 'Bormann treasure.' Toward the end of 1943, Bormann gave orders for Aktion Fuerland � "Operation Land of Fire" � to begin. This operation involved the transport from Germany to Argentina of several tons of gold, some securities, shares, and works of art ...

... Several U-boats arrived in Argentine waters after the capitulation of Germany. They were the carriers of bundles of documents, industrial patents, and securities. On July 10, 1945, the U-530 surfaced at the mouth of the River Platte and entered the port of La Plata. The following month, on August 17, the U-977 also arrived at La Plata. In accordance with international conventions, both U-boats were interned by Argentina and later handed over to the United States authorities."
� The Avengers, by Michael Bar-Zohar, Hawthorn Books, 1967, p 101

To the surprise of few, they were found to be empty of treasure.


"Two more U-boats, according to reliable sources, appeared off an uninhabited stretch of the coast of Patagonia between July 23, and 29, 1945."
� Ibid., p. 101

In occupied Germany one could neither vote with these shares nor could one collect interest, dividends, nor royalties. When (West) Germany again "took its place among the nations of the World" in 1955, the Bundestag immediately changed all this. The holders of these once worthless scraps of paper suddenly, once again, possessed incredibly wealth.

Consider the case of I.G. Farben:

David M. Nichol, of the Chicago Daily News Foreign Service, writing in 1947, observed:

"The trial of I.G. Farben's leading officials for war crimes is like Topsy. It just 'growed.' It is still growing.

Some of the more starry-eyed in Nuernberg and throughout the world would like to see it as a crusade against "monopoly" and "big business." Others, including Farben's 24 crotchety and dyspeptic executives in the dock, believe it is purely persecution... .

... No trial at all was planned in the beginning... .

... Investigating teams were interested in German finances, as such, in the possible sources of reparations for Nazi damages to other countries, and in tracing as much as possible of the loot that the Germans had concealed outside their borders.

Not the least of their interests was Farben's huge headquarters building in Frankfurt. Almost undamaged by bombs and fighting, it has served as the administration center for American occupation forces ever since... .

... German Army headquarters had ordered Farben's records destroyed. Many of them were. One official has compiled from memory a list of the most important ones he burned. It runs 14 pages of single space typing... .

... A handful of officials, were held for detailed but routine questioning... . One of them in particular, 63-year-old Georg von Schnitzler, one time head of Farben's entire sales organization ... began to 'talk.' From Farben's standpoint, the damage was done... .

... Justice Robert W. Jackson, United States prosecutor for the original Nuernberg trial against Goering and his mates felt industry was heavily involved in the crime with which the Nazi leaders were charged.

He proposed at first to include one Farben official among the defendants. But the case against Farben was so complex in itself that it might have overshadowed the more general charges. Gustav Krupp Von Bohlen und Halfbach, Germany's gun maker for a half century was indicted instead.

But the aging Krupp upset the plans by taking so seriously ill that he could not be tried. An unsuccessful move was made to substitute his son. In the end, big business went unrepresented before the international tribunal, except indirectly through Hitler's financial wizard, Hjalmar Schacht. And Schacht was acquitted... .

... Meantime, the Farben officials themselves can't believe it has happened. They've been accustomed too long to dictating � even to the Nazis... .

... Their American friends haven't come so far, except by mail. Letters are delivered in prison, but they go through regular censorship channels. In an effort to avoid this, some had been sent to prison officials through APO numbers, but these have been returned."
� Oakland Tribune, 11/2/47

I.G. Farben was broken up (on paper) into

" ... nine companies: the Big Three (Bayer, BASF, Hoechst) and nine smaller firms, including Agfa, Kalle, Casella, and Huels. Those in Allied countries who demanded the dissolution of I.G. 'as one means of ensuring world peace' were bitterly disappointed."

� The Crime and Punishment of I.G. Farben, by Joseph Borkin, The Free Press, A Division of Macmillan Publishing Co., Inc. 1978, p 160

When these firms, still owned and controlled by the same families, organizations and in many cases the same individuals, are considered as a whole, I.G. Farben is bigger and more powerful than ever.

"Corporate camouflage, the art of concealing foreign properties from enemy governments, has a special place in the history of I.G. Farben. Unlike I.G.'s involvement in mass murder and slave labor, which was a wartime aberration, I.G.'s program of camouflage long predated and outlived the war. Its political effects will persist for years to come."
� Ibid., p 164

In German they call this Tarnung, the magic hood that renders its wearer invisible. Camouflage really does work. It's still working.

Consider the case of party member Hermann Schmitz, who became the chairman of Farben's managing board in 1935.

"It is a good bet that if Hermann Schmitz were alive today he would bear witness as to who really won. Schmitz died contented, having witnessed the resurgence of I.G. Farben, albeit in altered corporate forms, a money machine that continues to generate profits for all the old I.G. shareholders and enormous international power for the German cadre directing the workings of the successor firms. To all appearances he died in relatively reduced circumstances, in 1960, at the age of seventy-nine, though immensely wealthy during his lifetime. Any information about his fortune seemingly vanished with his death; but those who knew him believe it still exists. He was the master manipulator, the corporate and financial wizard, the magician who could make money appear and disappear, and reappear again.

... Schmitz's wealth � largely I.G. Farben bearer bonds converted to the Big Three successor firms, shares in Standard Oil of New Jersey (equal to those held by the Rockefellers), General Motors, and other U.S. blue chip industrial stocks, and the 700 secret companies controlled in his time by I.G., as well as shares in the 750 corporations he helped Bormann establish during the last year of World War II � has increased in all segments of the modern industrial world. The Bormann organization in South America utilizes the voting power of the Schmitz trust along with their own assets to guide the multinationals they control, as they keep steady the economic course of the Fatherland.

... the resurgence of West Germany was due to hard work by its people, assistance from the Marshall Plan, an infusion of buying orders from the United States military establishment during the Korean War, and a(n) ... economic policy that enabled business and industry to wheel and deal in world markets and come up with profits ... Allowing business to have its head was, to go back, the formula adopted by Hitler during the 1930s; he harnessed the people instead of nationalizing industry ..."

� Martin Bormann, Nazi in Exile, by Paul Manning, Lyle Stuart, 1981, pp. 280-281
It is also true that the resurgence of West Germany was financed in part by Nazi blood money, some of it looted with pliers from the mouths of its rightful owners.

It is easy and profitable to blame a dead, "crazy" man for one's mistakes and crimes. Consider, for example, the enormous mileage the Contras and their friends got out of CIA chief Bill Casey's convenient demise. Hitler has assumed mythic proportions since his death. In life, he was mainly a front man, a mouthpiece, a lightning rod, and above all, the Nazi's "great communicator."

While the masses worshipped him like a god, his friends plotted behind his back, used him as a cat's paw and scapegoat, and (perhaps) cynically sacrificed him to save their own skins and fortune. Hitler had cleverly parlayed his position as figurehead into control over the military by rewording the soldiers oath. However, military power has always been subordinate to economic power, if for no other reason than because lead cannot be mined with bayonets. The purse strings of the Nazi Party were controlled by Bormann, and Bormann got away. So did the purse.

" ... the alleged Bormann skull is that of a grisly stand-in a substitute ...
... Substituting one body for another has been a ploy much used by General Heinrich Mueller of the Gestapo. It was he who coordinated the details of Bormann's disappearance."
� Ibid

When Mueller's grave was exhumed by court order in 1963, the grave held three skeletons, none of which even remotely resembled Mueller's short stature and high forehead.

" ... it was Mr. Brandt and his government that provided Martin Bormann with what amounted to a 'passport to freedom' in 1973 by stating that the former Hitler aide had perished in Berlin in 1945."
� Ibid, p 227

Bormann had help from his friends. Consider, if you will, Herman Abs:

"While Germany's bankers were collectively responsible for the financing of Hitler's war effort, the dean of them all is Herman Josef Abs. Money was his life, and his astuteness in banking and international financial manipulations enabled Deutsche Bank to serve as leader in fueling the ambitions and accomplishments of Adolf Hitler and Martin Bormann. His dominance was retained when the Federal Republic of Germany picked itself up from the ashes; he was still there as chairman of Deutsche Bank, director of I.G Farben, and of such others as Daimler-Benz and the giant electrical conglomerate, Siemans. Abs became a financial advisor to the first West German chancellor, Konrad Adenauer, and was a welcome visitor in the Federal Chancellery under Mr. Adenauer's successors, Ludwig Erhard and Kurt George Keisinger ...

... (Bormann's) friendship with Dr. Herman Josef Abs predated Abs's move into the management of Deutsche Bank. Dr. Abs had been a partner in the prestigious private bank of Delbruck, Schickler & Co. in Berlin. Recalling those days, Abs has written:

'The Reich Chancellery in Berlin was its largest account, and it was through this account that Adolf Hitler received his salary as Chancellor of the Reich.'

... Reichsleiter Bormann knew that his relationship with Abs would tighten as his own power grew ... He knew in 1943 that with his Nazi banking committee well established, he had the means to ... set new Nazi state policy when the time was ripe for the general transfer of capital, gold, stocks, and bearer bonds to safety in neutral nations."
� Ibid, p 87

History has largely ignored bankers in favor of other subjects. History, and those who write it (and their masters) apparently want us to think politicians and generals are more important to the state. Bankers, of course, feel differently. They tend, and not with out reason, to be as furtive as much as possible. While we are cheering the politicians and saluting the generals, we are not noticing the bankers, who are picking our pockets. This suits the bankers' ends, thus history slants their relative importance.

"Baron Kurt von Schroeder, a well-known banker ... and economic advisor to Bormann's economic committee, commented that Dr. Herman Josef Abs, chairman of Deutsche Bank, was particularly important to the government of the Third Reich.

His influence was mainly with the Reichsbank and with the Ministry of Economics. Abs proved very valuable to the party and to the government by using his bank to assist the government in doing business in the occupied countries and other foreign countries. Abs enjoyed excellent relations with Walther Funk, who was both president of the Reichsbank and head of the Ministry of Economics ...
... Branch managers of Deutsche Bank were to a man members of the party ..."
� Ibid., p 69

This is the same Hermann Abs who was chosen by Pope John Paul II to oversee the reorganization of the Vatican Bank when it was caught red-handed laundering counterfeit securities and heroin profits for the Gambino crime family. It is worth noting that in his youth J.P. II was, according to the official version, once a slave laborer for I.G. Solvay, a Farben subsidiary specializing primarily in pharmaceuticals. He is supposed to have labored in the Solvay quarries near Auschwitz. It's a rare slave indeed who becomes pope at all, let alone then hires his former master to keep track of his money. Wonders truly never cease.

It is equally worthy of note that despite the name, dyes alone were not the source of the wealth upon which I.G. Farben was founded. Pharmaceuticals played a major rule.

"In 1898 ... the Bayer Company ... began mass production of diacetylmorphine and coined the trade name heroin to market the new remedy ... Bayer described heroin as a nonaddictive panacea for adult ailments and infant respiratory diseases...

... During the late nineteenth century, the same manufacture also promoted another narcotic, cocaine."
� The Politics of Heroin in South East Asia, by Alfred McCoy, Lawrence Hill Books, 1972, p 5-6

If one overlooks its narrow threshold to LD50 range, its price, and its addictive properties, heroin does indeed make a dandy cough remedy. It is the only known cure for the common cold. In the long run, though, you're better off with the cold. Cocaine is totally useless.

"In October 1978 the Marshall Foundation was utilized as a platform for Dr. Herman J. Abs, now honorary president of Deutsche Bank A.G. as he addressed a meeting of businessmen and Bankers and members of the Foreign Policy Association in New York City on the 'Problems and Prospects of American-German Economic Co-operation.' This luncheon was chaired by his old friend, John J. McCloy, Wall Street banker and lawyer, who had worked closely with Dr. Abs when McCloy served as U.S. High Commissioner for Germany during those postwar reconstruction years. At that time, Hermann Abs, as chief executive of Deutsche Bank was also directing the spending of America's Marshall Plan money in West Germany as the chairman of the Reconstruction Loan Corporation of the Federal Republic of Germany."
� Manning, p 261

This is the same McCloy who designed the Pentagon building and served on the Warren Commission. While Undersecretary of War, he had forbidden bombing of the rail lines to Auschwitz on the grounds that it might provoke retaliation against the Jews. One cannot but wonder what he had in mind.

Auschwitz was intended, first and foremost, to be a synthetic rubber and synthetic fuel factory complex. The more well-known dead Jews were to be merely a byproduct. Abs had arranged the financing of its construction. In charge of synthetic rubber production was Otto Ambros, who also developed the root technology on which magnetic data storage is based. He was convicted of 25,000 counts of slavery and mass murder, and was sentenced to eight years in prison. After three and a half years, McCloy freed him. The head of the W.R. Grace & Co., J. Peter Grace (a Knight of Malta) hired Ambros as a research chemist and petitioned Congress to allow his emigration to the United States. This is the same J. Peter Grace who President Reagan appointed to head the so-called "Grace Commission" to make the United States government more "efficient."

"Grace: 'I admire Ambros's integrity.'"
� Esquire, 12/19/78

Hermann Schmitz's nephew, Robert was employed by W.R. Grace & Co. in the early 1950s to help in its plans for diversification. W.R. Grace paid alleged cocaine dealer John DeLorean $25,000 a month as a consultant. Delorean advised W.R. to invest in a luxury RV project. Grace is reported to have dropped a $1,000,000 on the project. The RV never materialized.

Companies are known by the people they keep.

"The Assistant Secretary of War, until 1940 was a member of the law firm of Cravath, de Gersdorff, Swain & Wood, which firm ... had been representing I.G. Farben or its affiliates in the United States. It may appear to be a coincidence that Mr. McCloy should have turned up in the War Department in 1941 in a position in which he could speak with authority on such matters as handling the destruction of that mainstay of Germany's war potential � I.G. Farben."
� Treason's Peace, by Howard Watson Armbruster, Beechurst Press, New York, 1947, p 386

Consider the Flicks:

"Friedrich Flick, the Howard Hughes of West Germany's mighty postwar industrialists, was a man of few public words. But when he spoke people remembered.

Defending his financial support of the Nazi party at the Nuremberg war-crime trials, Mr. Flick uttered one of the most quoted statements of the day: 'I was of the opinion necessarily, that political insurance would not do me any harm.' And hardly any of the men who worked for him could ever forget Mr. Flick's guiding business motto: 'Either change the numbers or the faces.'

The one paying the closest attention to the words of 'the old gentleman' was his son, Friedrich Flick, who has been adhering to every letter of those precepts since taking over this country's largest family-owned concern after his father died in 1972. Friedrich Karl dared to make one change � replacing the picture of Bismarck that had hung in his father's office with a portrait of Dad himself � but otherwise it has been pretty much like father, like son... .

... The son's most audacious move was to sell a 29 percent stake in Daimler-Benz AG, the maker of Mercedes cars, to Deutsche Bank in 1975 for $789.77 million, which amounted to a huge capital gain of $714.55 million on what his father had paid for 40 percent of Daimler stock in the early 1950s.

Under West German law, the profit from the Daimler transaction would have normally been taxed at a rate of 56 percent unless Flick reinvested the money before the end of 1978 in projects judged by the government to be 'especially beneficial to the national economy.' Mr. Flick went on a rapid spending spree, and although more than half the money flowed into the U.S., including some $400 million for a 29 percent stake in W.R. Grace & Co. of New York, the West German Economics Ministry granted tax-exempt status to all but a fraction of the new investments."
� The Wall Street Journal, 9/21/83

Then there are the Thyssens.

"... the Thyssen family learned the facts of corporate life at an early age. Count Fredrico Zichy-Thyssen acquired his knowledge from grandfather Fritz Thyssen; his cousin Baron Hans Heinrich Thyssen-Bornemisza acquired similar corporate wisdom from his father, old Fritz's brother, Heinrich Thyssen. The latter became Baron Heinrich Thyssen-Bornemisza and took up residence in Lugano, Switzerland, gaining Swiss citizenship. As Count Zichy represents the largest shareholder group in Thyssen A.G. From his home in Buenos Aires, the young baron directs his interest from his Villa Favorita in Lugano.

One such holding in the United States is Indian Head Inc., with American corporate headquarters at 1200 Avenue of the Americas, New York City. Thyssen Inc. has its U.S. offices farther down this avenue at number 1114, in the W.R. Grace & Co. building. Indian Head is a wide-ranging manufacturing conglomerate, with 42 plants in the United States and 10,400 employees. It enjoys annual net sales of close to $604 million. For an industrial corporation of such size it has a remarkably low profile. It distributes no annual report � 'We are a privately held corporation.' Like Thyssen Inc. in the United States it has no background ownership file with the SEC because it has never had to go public. When Thyssen bought Budd Manufacturing for $275 million, it was in cash, and there was no requirement for corporate disclosures to the Securities and Exchange Commission.
Still, good will is cherished, and German industrials and bankers continue to strive to project a friendly German image in the United States. One noteworthy announcement, made from Washington, D.C., in March 1979 was that 57 priceless Old Masters paintings from the collection of Baron Thyssen-Bornemisza would be taken on a tour of the United States in 1979 and 1980. This collection of great masterworks is said to be � except for the Royal Collection of the queen of England� the greatest private art collection now in existence. This public traveling exhibit constituted a major achievement as a public relations ploy. Ever cautious, however, no German firm underwrote the tour: Indian Head kept out of the picture. Instead, a major U.S. corporation was chosen to underwrite the masterworks tour, United Technologies of Hartford, Connecticut (152,000 employees, 200 plants, and a worldwide marketing operation in power, flight systems, industrial products and services), agreed to underwrite the cost of the venture as a favor to its German friend in Lugano, Switzerland. The project was initiated from Lugano; the baron, after consulting with his corporate image advisors, agreed to United Technologies rather than Indian Head with its hidden shareholders. The foundation that made all the arrangements was another privately endowed, nonprofit organization, International Exhibitions Foundation. It made the approach to United Technologies and also brought aboard the prestigious Andrew W. Mellon Foundation and the Federal Council on the Arts and Humanities,"
� Manning, p 263

The Mellons, Morgans and DuPonts have been a close-knit financial axis for generations. In 1936, they attempted to finance a coup d'etat in America. The plot was foiled by retired Marine Corps commandant Smedley Butler whom they had approached as a potential front man, offering to make him the "American Mussolini." He snitched them out to F.D.R. Though congressional hearings were held, nobody hung, and some of the testimony was suppressed for years. They had the right friends. Money might not buy happiness, but it sure as hell does buy friends.

For a revealing account of the '36 coup attempt read The Plot to Steal the White House, by Jules Archer. For a contemporary's account of the testimony suppression, see: Facts and Fascism , by George Seldes, In Fact, Inc., 1943, pp. 111-114.

" ... in June 1943 antitrust again went into action against Farben with a lengthy indictment of National Lead Company, Titan Company and du Pont, along with four of their officers, for having engaged in a world-wide cartel conspiracy with I.G. Farben and some twenty other foreign companies to restrain the production and distribution of titanium and titanium compounds. These pigments for the manufacture of paints, rubber, glass, paper, and other articles are important in peace and are strategic war materials... .

... the law firm of Cravath, Swaine and Moore, representing du Pont ..."
� Armbruster, p 345
Coincidence? Perhaps.

"... the J. Henry Schroder bank acted as financial agent for the Nazi Government just prior to the start of the war and also was reported to be a financial backer for one of the firms in Farben's international nitrogen cartel; also the London Schroder had close business and family ties with the notorious General Kurt von Schroeder, of the Stein Bank of Cologne, Germany, that particular member of the Schroeder clan having been one of the strongest financial links between Hitler and his Farben industrial backers.

By another coincidence, Sullivan & Cromwell, the law firm of John Foster Dulles (advisor to Mr. Crowley as Custodian and Counsel for General Dyestuffs stock claimants), is reported to be counsel for Schroder bank; and Allen W. Dulles, brother of John Foster and a member of that law firm, likewise is one of the directors of the J. Henry Schroder bank."
� Ibid., p 366

More than Nazi money went underground.

" ... Himmler was quoted as summing up his talk with Bormann to his most trusted lieutenants in these words: 'It is possible that Germany will be defeated on the military front. It is even possible that she may have to capitulate. But never must the National Socialist German Workers' Party capitulate. That is what we have to work for from now on.'"

� The Nazis Go Underground, by Curt Riass, Doubleday, Doran, and Co., Inc.1944, p. 4-5
"Ex"-S.S. men infiltrated, among other things, every major intelligence apparatus on earth. They have been major players in postwar history. Spy master Reinhardt Gehlen, for example, created the rationale for starting the Cold War out of whole cloth. As we now know, had the Red Army actually been intending to continue their drive westward, as Gehlen said they did, they would not have been tearing up railroad track in front of themselves. They relied heavily on rail to transport their troops. Our leaders didn't know; they believed Gehlen, and acted accordingly. Or they knew, and they lied to us. There is no third possibility. This comes as no surprise to those who have actually studied war. Truth is the first casualty.

"Adolf Hitler's top intelligence officials worked with U.S. intelligence officials worked with U.S. intelligence during World War II, according to a transcript made available Tuesday of secret testimony by Allen Dulles before a House Select committee in 1947."
� UPI, 9/29/82

This is the same Dulles who served on the Warren Commission, investigating the assassination of the President who had fired him just prior to the murder in Dallas that enabled the success of the coup of '63. It is interesting to note that Dulles's law firm, Cromwell and Sullivan, also represented I.G. Farben before the War.

The S.S. was designed from inception to stand alone, a thing apart. It was, and is, more of a religious institution than a political or military one. Think of it as one of those "cults that kill."

Shadows of its continued existence can be seen in the various "ex"-S.S. officer's benevolent associations: the Odessa, Die Spinne, the "Kommeradenwerk," etc., in such mercenary armies as the "Fiancees of Death," and in the "various" cocaine cartels. Now they wear white shirts; camouflage works again. The organization lives on, though the "old fighters" have by and large died off. They had no more trouble recruiting new blood than they had finding new soil. The organization is stronger than ever. It too is a business. In part, its business is protection. "Ex"-S.S men flooded South America, where they were met with open arms. They took over day to day operation of the lucrative cocaine trade. Germans have maintained a monopoly on the South American pharmaceutical business since the middle of the last century. Their fortunes have multiplied enormously. One good alchemist is worth a forest of knights.

"Dr. Josef Mengele, the nazi 'angel of death,' was a major dealer in the international drug traffic for many years ... according to testimony in a U.S. Senate investigation ...
... Because of the partial blackout of the CIA reports, the senators said, many questions are unanswered.

It is difficult to determine to what extent ... U.S. agencies attempted on a serious determined basis to bring Mengele to Justice.

... The CIA unit, which had prepared an article on Mengele's activities for the International Narcotics Review, withdrew the article, which has since been 'misplaced.'"
� Heritage, 4/1/85

It is difficult to believe that any U.S. agency made a serious attempt to bring Mengele to justice, or justice to him, until it was too late.

" ... according to declassified CIA documents released by two Republican senators.
Mengele's reported involvement in drugs could explain how he was able to finance his life and travels in South America for years, according to one of the senators, Alphonse M. D'Amato of New York. One CIA document said Mengele may have used a farm machinery business in Paraguay 'as a mechanism to move or launder large sums of money, as well as to cover the movement of illicit narcotics.'

But the 28 heavily censored pages of long hidden CIA records were often vague and inconclusive, D'Amato and Sen. Arlen K. Specter of Pennsylvania acknowledged at a news conference. Because many sentences were blacked out to conceal the CIA's sources of information about Mengele, it is difficult to determine what data in the documents might be credible ...

... Referring to the documents, Specter said, 'They're vague, but that's the starting point for our investigation.'"
� Los Angeles Times News Service, 2/27/85

Vague, censored documents are a not unfamiliar concept to Specter who was once counsel for the Warren Commission.

"Some of the CIA documents and cables spoke of Mengele living at 'a well-guarded ranch' and enjoying 'the protection of Stroessner' � a reference to Paraguayan dictator Walter Stroessner."
� Ibid

The coca-fascistas are major players on the world economic stage. With all that money, how could they not be? Their money buys a lot of protection. Their power is immense. Their intentions have been made abundantly clear to all those who pay attention.

Nazi roots run deep in Paraguay. Paraguay, you may recall, became home to South America's first Nazi party, in 1929. Not all Nazis are German. Not all German Nazis are in exile.

"Following the biggest ever crackdown on neo-Nazis in West Germany, authorities have uncovered a web of international right-wing contacts stretching from the United States through Europe that also touched the PLO and Iran.

The network came to light in a diary police seized from a leading West German neo-Nazi, Manfred Roeder...

Roeder and Karl-Hienze Hoffman, leader of a neo-Nazi group banned last year, also had contacts in Lebanon ...

... Hoffman has for several years sold second-hand military vehicles to Lebanon and other Middle East countries.

One such shipment was seized on the Austrian border after a young member of Hoffman's group planted a bomb at the Munich Oktoberfest last September, blowing himself up and killing 12 others."
� Mainichi (Tokyo) Daily News, 3/31/81

"The raids turned up thousands of banned neo-Nazi and anti-Semetic pamphlets smuggled from the United States and Canada."
� Houston Post, 3/31/81

Don't believe for one moment that the storm troopers we see on the evening news, rioting in the streets of modern Germany, are a new phenomenon, or that they arose solely out of reaction to the seizure of East Germany's economy by the West. They have deep historical roots. They have very powerful friends.

Who is behind the resurgence of fascism in Russia and America? Are we seeing the simultaneous rise of spontaneous, indigenous movements? Or are we looking at a coordinated effort? To answer this question, first consider the proclivity and aptitude of the fascist, and particularly the Nazi, underground to undertake coordinated efforts out of the light of day. Consider their track record. Then ask yourself what we are going to do when they make their big move here.
The camps are already built. The paint is kept fresh. The grass is neatly trimmed. The round up plan, code named Rex 84, is ready to go. Administration is to be handled through FEMA. The plan was drawn up mainly by Ollie North, when he was still in power. He drew heavily on a plan from the sixties called Operation Garden Plot. Ollie's first plan, Rex 83, was run in computer simulation and found lacking in man power.

Bodies called State Defense Forces were then set up to supplement law enforcement and the national guard. They are to be essentially armed and deputized civilians. Cadre elements meet and train regularly. They are recruited from the fascist/racist para-militaries, and from the floating pool of freelance mercenaries who advertise in Soldier of Fortune magazine. Some suspicious types have considered the possibility that the name itself may be an allusion to the infamous "King Alfred Plan" to round up Americans of African descent.

Rex 84 was originally drawn up to deal with the expected massive resistance to a planned invasion of Central America. America stuck its toe in the water. Operation Big Pine was an "exercise" involving the landing of 60,000 troops just north of the Nicaraguan border. The degree of protest it sparked caused the government to back down. In San Francisco we filled the streets four nights in one week. The extent of protest in other cities was blacked out of national, though not local news. The most reliable reports were on the Internet. Broadcast journalism was grossly disfeasant, but the protests spread anyhow. They were clearly not "copy-cat" protests. They were spontaneous, sincere and broad-based. No wonder the crypto-fascists (and their so-called "democratic" interventionist allies) in government backed down. Home front resistance to American fighting on the ground in Central America would have been massive.

Never the less, Rex 84 is still ready to go in case wide spread civil unrest results from the clamp down following, oh say, a coup, perhaps introduced by a Reichstag-Fire-like fake (nuclear? biological?) terrorist incident. This is a time-tested scenario. Better to be prepared for it than not. Fascism is not a dead threat. Fascism is alive and well and not just living in Argentina. Fascists, Nazis, Klansmen and their new found allies the totalitarian (so-called) "Christian" Right have infiltrated America's government, military, law enforcement, and business at every level from the cop on the corner to the Joint Chiefs of Staff.

If their official plan, the one they admit to, calls then for "dissidents" to have their doors kicked in by a bunch of deputized Klansmen and Nazis, you can imagine what it is that they plan but do not admit also. The lesson of history is clear. These people are cold-blooded killers. They are ruthless, tenacious, and very well financed. They are adept liars and past masters of camouflage. Today they wear white shirts, but only for effect. Under their Tarnung they are who they ever were. Best to plan with that in mind.

Copyright � 1994-99 San Francisco Bay Guardian

The Power Elite

Stimson & Ike

The Power Elite

an excerpt from:
The Power Elite

C. Wright Mills
Oxford University Press�1956
LCCN 56-5427
423 pps. - -Reprint1969--

The Constitution of the United States was constructed in fear of a powerful military establishment The President a civilian, was declared commander-in-chief of all the armed forces,, and during war, of the state militia's as well. Only Congress could declare war, or vote funds for military use-and for only two years at a time. The individual states maintained their own militia, separate and apart from the national establishment. There was no provision for a flow of advice from military to civilian chiefs. If there were provisions for violence in the constitution, they were reluctant provisions, and the agents of violence were held to a strictly instrumental role.

After the revolutionary generation, the upper classes were not of a military stamp; the American elite did not systematically include among its members high-ranking military figures; it developed no firm tradition of military service; prestige was not rendered to military servants. The ascendancy of economic over military men in the sphere of 'honor' was made quite apparent when, during the Civil War, as indeed up to World War I, the hiring of a substitute for the draft was not looked down upon. Military men, accordingly, on their often isolated posts along the old internal frontier, did not enter the higher circles of the nation.

No matter what hardships, and they were often severe, were encountered by those who crossed the hemisphere and no matter how military their expeditions and communities�and in many ways they were for considerable periods definitely camps of war�still those who headed the nation were not stamped with the military mind and the military outlook.

And yet, considering the whole of United States history, we are confronted with a rather curious situation: we are told that we have never been and are not a militarist nation, that in fact we distrust the military experience, yet we note that the Revolution led to the ascendancy of General Washington to the Presidency, and that there were bids among certain rejected officers, in the Order of Cincinnati, to form a military council and install a mili-tarist king. Then too, frontier battling and skirmishes had some-thing to do with the political success of Generals Jackson, Harrison, and Taylor in the Mexican War. And there was also the Civil War, which was long and bloody and split American society across the middle, leaving scars that still remain much in evidence. Civilian authority, on both sides, remained in control through it and after it, but it did lead to the ascendancy of General Grant to the Presidency, which became a convenient front for economic interests. All the Presidents from Grant through McKinley, with the exceptions of Cleveland and Arthur, were Civil War officers, although only Grant was a professional. And again, with the little Spanish-American War, we note that the roughest, toughest of them all-perhaps because he was not a professional--Theodore Roosevelt--emerged in due course in the White House. In fact, about half of the thirty-three men who have been President of the United States have had military experience of some sort; six have been career officers; nine have been generals.

From Shays' Rebellion to the Korean War there has been no period of any length without official violence. Since 1776, in fact, the United States has engaged in seven foreign wars, a four-year Civil War, a century of running battles and skirmishes with Indians, and intermittent displays of violence in China, and in subjugating the Caribbean and parts of Central America.* All of these occurrences may have been generally regarded as nuisances interferring with the more important business at hand, but, at the very least, it must be said that violence as a means and even as a value is just a little bit ambiguous in American life and culture.
[* In 1935, the editors of Fortune wrote: "It is generally supposed that the American military ideal is peace. But unfortunately for this highschool classic, the U.S. Army, since 1776, has filched more square miles of the earth by sheer military conquest than any army in the world, except only that of Great Britain. And as between Great Britain and the U.S. it has been a close race, Britain having conquered something over 3,500,000 square miles since that date, and the U.S. (if one includes wresting the Louisiana Purchase from the Indians) something over 3,100,000. The English-speaking people have done themselves proud in this regard.'[4]]


The clue to this ambiguity lies in this fact: historically, there has been plenty of violence, but a great deal of it has been directly performed by 'the people! Military force has been decentralized in state militia almost to a feudal point. Military institutions, with few exceptions, have paralleled the scattered means of economic production and the confederate means of political power. Unlike the Cossacks of the Eurasian Steppes, the technical and numerical superiority of the American frontiersman who confronted the American Indian made it unnecessary for a true warrior stratum and a large, disciplined administration of violence to emerge. Virtually every man was a rifleman: given the technical level of the warfare, the means of violence remained decentralized. That simple fact is of the greatest consequence for civilian dominance as well as for the democratic institutions and ethos of earlier times in America.

Historically, democracy in America has been underpinned by the militia system of armed citizens at a time when the rifle was the key weapon and one man meant one rifle as well as one vote. Schoolbook historians, accordingly, have not been prone to think about changes in American military institutions and weapons systems as causes of political and economic changes. They bring out military forces for an Indian skirmish and a distant war, and then they tuck them away again. And perhaps the historians are right. But the first armies in Europe based on universal conscription, it ought to be remembered, were revolutionary armies. Other countries armed their populations reluctantly; Metternich at the Congress of Vienna urged the abolition of mass conscription; Prussia adopted it only after her professional army suffered defeats without it; the Tzars, only after the Crimean war; and Austria, only after Bismarck's recruits defeated Franz Josef's troops.[5]

The introduction of mass conscript armies in Europe involved the extension of other 'rights' to the conscripts in an effort to strengthen their loyalties. In Prussia, and later in Germany, this was a quite deliberate policy. The abolishment of serfdom and later the development of social-security plans accompanied the establishment of mass conscription. Although the correspondence is not exact, it seems clear that to extend the right to bear arms to the population at large has involved the extension of other rights as well. But in the United States, the right to bear arms was not extended by an arms-bearing stratum to an unarmed population: the population bore arms from the beginning.

Up to World War I, military activities did not involve the discipline of permanent military training, nor a monopoly of the tools of violence by the federal government, nor the professional soldier at the top of a large and permanent military establishment. Between the Civil War and the Spanish-American War, the army averaged about 25,000 men, organized on a regimental basis, with regiments and companies largely scattered on posts along the internal frontier and farther west. Through the Spanish-American War, the United States Army was militia-organized, which meant decentralized and with an unprofessional officer corps open to much local influence.

The small regular army was supplemented by state militias formed into The US Volunteers, the commanders of these troops being appointed by the governors of the, states. In this quite unprofessional situation, regular army men could be and often were jumped to generalship in The Volunteers. Politics�which is also to say civilian control-reigned supreme. At any given time, there were few generals, and the rank of colonel was often even the West Pointer's height of aspiration.

3

Around the old army general of the late nineteenth century, in his neatly disheveled blue uniform, there hang wisps of gun smoke from the Civil War. In the Civil War he had distinguished himself, and between that war and the Spanish-American fracas he had fought Indians in a most adventurous way. The dash of the cavalry has rubbed off on him-even if at times making him something of a dashing imbecile (Remember Custer and the Little Big Horn!). He lives something of the hardy life which Theodore Roosevelt esteemed. He often wears a mustache, and sometimes a beard, and usually he has a certain unshaven look. Grant had worn a private's uniform with unshined buttons and ancient boots and the manner carried on. This old army man has fought up-close: it was not until World War I that an official effort was made 'to conserve trained personnel'; many generals and dozens of colonels were killed in Civil War battles or afterward in Indian skirmishes.

He did not earn the respect of his men by logistical planning in the Pentagon; he earned it by better shooting, harder riding, faster improvisation when in trouble.

The typical general of 1900[6] was of an old American family and of British ancestry. He was born about 1840 in the northeastern section of the United States and probably grew up either there or in the north central section, in a rural area or perhaps a small town. His father was a professional man, and the chances are fairly good that his father had political connections-which may or may not have aided him in his career. It took him a little more than thirty-eight years to become a major-general from the time he entered the army or West Point. When he came into top command, he was about sixty years old. If he was religious, he probably attended the Episcopal church. He married, sometimes twice, and his father-in-law, also a professional, might also have had some political connections. While in the service, he did not belong to a political party; but after retirement, he may have dabbled a bit in Republican politics. It is as unlikely that be wrote anything as that someone wrote very much about him. Officially, he had to retire at sixty-two; and he died, on the average, at the age of seventy-seven.

Only a third of these old army generals had been to West Point and only four others had completed college; the old army did not go to school. But we must remember that many southerners�who had been West Pointers and who had predominated in the old federal army-had gone home to fight in the Confederate army. Sometimes the army general of 1900 had been commissioned during the Civil War, sometimes he had come up through the volunteers of the state militia, sometimes he had personally recruited enough men and then he was a colonel. After he was in the regular army, his promotion was largely by seniority, which was greatly speeded up during wars, as during his jump from colonelcy during the Spanish-American War. At least half of the old army generals had higher connections with generals and politicians. General Leonard Wood, for example, who was a medical captain in 1891, became White House physician, and later, under his friends, Theodore Roosevelt and William Howard Taft, ended up in 1900 as Chief of Staff.

Only three of the top three-dozen army men ever went into business�and two of these were non-regulars. Local merchants in frontier towns often loved this old army; for it fought Indians and cattle thieves and the army post meant money for the local economy. And in larger towns, the army was at times authorized to break strikes. Small boys also loved it.

Between the Civil War and the naval expansion under Theodore Roosevelt, the army was more in the public eye and its claims for status were cashed in by the lower classes. But the navy was more like a gentleman's club, which occasionally went on exploring and rescuing expeditions, and the prestige of the navy was among the upper classes. This explains, and is in part explained by, the higher level of origin and more professional training of its officer corps.

Apart from the British inheritance of sea power, there was the prestige of Admiral Mahan's theory, linking the greatness of the nation to her sea power, and falling easily upon the ears of Navy Undersecretary Theodore Roosevelt. The higher prestige of the navy, coming to a wider public during the Spanish-American War, has been due to the fact that the skills of the naval officer were more mysterious to laymen than those of the army�few civilians would dare try to command a ship, but many might a brigade. Since there was not, as in the army, a volunteer system�there was the prestige of skill augmented by the prestige of a formal, specialized education at Annapolis. There was also the fact of heavy capital investment, represented by the ships in the naval officer's command. And finally, there was the absolute authority that 'Me Master of a ship exercises�especially in view of the sea tradition of contempt for the deckhand, which, applied to the enlisted sailors, lifted the officers high indeed.

The typical admiral of 1900 was born about 1842 of colonial stock and British ancestry. His father had a professional practice of one kind or another; but more important, he was of the upper levels of the northeastern seaboard, more likely than not of an urban center. The future admiral had the academy education plus two years on a receiving ship. He was only fourteen years old when he entered the navy; and if he was religious, he was definitely Protestant. Some forty-three years after he was accepted at the Academy he became a rear admiral. He was then fifty-eight years old. He had married within his own class level. He probably wrote one book, but chances were less that someone wrote a book about him; he may, however, have received an honorary degree after the war of 1898; and he retired from the navy at sixty-two years of age. He had held the rank of rear admiral for only three years; and he died ten years after compulsory retirement at the average age of seventy-two.

Even in 1900, the top of the navy was strictly Annapolis, and gentlemanly too. Recruited from higher class levels than the army, residing more in the East, having had better preparatory training and then the Academy, the admiral had also served in the Civil War, after which he slowly rose by avoiding innovation, in personal life or in military duties. Given the meticulous crawl of his career, it was important that he be commissioned early and live long, in order to reach admiralcy before compulsory retirement at sixty-two. It usually took some twenty-five years to become a captain. 'Officers spent so long a time in the lower subordinate grades that they never learned to think for themselves. They usually reached command ranks so late that they bad lost their youth and ambition and had learned only to obey, not to command...'*
[*�In December 1906, the age of the youngest captain in the American Navy was 55 and the average time spent in that grade was 4.5 years; in Great Britain the youngest captain was 35 and the average time spent in that grade was 11.2 years! The figures for France, Germany, and Japan are similar to the British. 'The same situation was true of the flag officers. In the United States they usually averaged only 1.5 years in that rank before retirement,' but in Great Britain, France, Germany, and Japan, between 6 and 14 years.[7]]

From one-third to one-half of the duty of the top officers was spent at sea, occurring of course mainly while of lower rank. About half of the top thirty-five naval men bad returned at one time or another to Annapolis as instructors or officials. And some took postgraduate work there. But the key to the bureaucratic snafu that has often characterized the navy is that as the ships and the guns and the logistics became more technically complicated, the men who ran them acquired rank less by technical specialty than by seniority. Accordingly, the skipper became somewhat alienated from his ship and had to take responsibility for matters which he did not altogether understand. The bureau heads, who ran the navy, had access to the Secretary, and were often thick with congressmen. But despite the prominent connections, only one adadmiral[sic] of this period went into business, and only two went into (local) politics.

Such, in brief, was the civilian controlled military establishment of the United States in the later nineteenth century, with its half-professionalized high officer corps, whose members were not in any important sense of the American elite of businessmen and politicians. But this is not the later nineteenth century, and most of the historical factors which then shaped the military roles within the nation no longer exert the slightest influence on the shape of the higher echelons of America.

pps,178-183
-----
Aloha, He'Ping,
Om, Shalom, Salaam.
Em Hotep, Peace Be,
All My Relations.
Omnia Bona Bonis,
Adieu, Adios, Aloha.
Amen.
Roads End

Hidden Fortunes - Drug Money, Cartels and the Elite Banks

Hidden Fortunes - Drug Money, Cartels and the Elite Banks


an excerpt from:
Hidden Fortunes - Drug Money, Cartels and the Elite Banks
Eduardo Varela-Cid�1999 All Rights Reserved cid@mail.com
w/Fabian Baez
Michael C Berman; translator
Hudson Street Press
New York � Miami
ISBN 0-935016-00-0
398 pps. � First Edition � In-print
-----

Preface

THE MAFIAZATION OF SOCIETY

"The problem is not so much that there are a lot of corrupt people, but rather that there are so many that the honest are scared of the corrupt." This is how Frank Serpico, an ex-police official in New York, began his narrative. They no longer hide out, but rather attack and accuse those who have not come to terms with them, an agreement they usually call "loyalty."

What happens when corruption gets to the point where it controls the police, appoints judges, and runs congress? The corrupt even have their own armies of journalists and lawyers.

In Mexico, the brother of ex-president Salinas owns foreign bank accounts containing unexplained millions; he worked with partners in privatization deals carried out by his brother's government � and, to top it off, an undercover agent of the DEA has connected the accounts with money laundering for a drug cartel.

It is impossible to tell the whole story of what happens in Mexico. Let's just say that as the result of an investigation, all the Ministers of a particular state had to resign, all having been implicated in a cartel in the area. A drug trafficker was in prison, and after completing his sentence, he was made director of a bank. It would appear that requirements are not very strict for such a position.

In Colombia, there are eleven legislators in jail. Until recently, I had kept a count: one hundred one legislators dead and two hundred seventy journalists murdered. However, it is really impossible to keep a count of the workers who have died and those who are in jail, and those who are not, but who have been indicted. The hero of this story is ex-Minister of justice, Rodrigo Lara Bonilla, the politician who wanted to extradite drug traffickers because he found himself powerless to fight against them in his own country. First, they deposited $12,000 in an account to finance his campaign for senator; then they harassed him for months in congress using their own journalists who accused him daily of corruption; finally, they murdered him. The corrupt have their problems, but anyone who fights seriously against drug trafficking gets killed. Mafia operations to discredit those who work against their interests are impressive and discourage even the most valiant.

In Peru, President Fujimori put the Armed Forces to work in the struggle against drug trafficking. First, an army captain asked for refuge and confessed that the army was charging smugglers $15,000 for each helicopter that left with drugs, and then they split up the proceeds. Top authorities denied the story. A short time later, an imprisoned drug dealer appeared before the prosecutor, and the charges against him were such that it took eight long hours just to read the indictment. A lot of people seemed to be involved. A few weeks later an Air Force plane was detained in Canada with 250 kilos on board, and a few days after that, two Navy boats were found to contain drugs.

In Bolivia, when ex-President Jaime Paz Zamora took office, he said that he himself did not have a quorum, but that the drug traffickers did have one. He said that he would govern honestly the part of Bolivia that he controlled, but that there was another part under the control of others.

In Brazil, I once visited a slum in the company of a legislator and a policeman. We had to ask permission of a gentleman who had a machine gun on a tripod and who let us through only grudgingly.

In Argentina, a non-producing country due to its climate, and until recently of low consumption and without cartels as they are known elsewhere, there was a businessman, Alfredo Nallib Yabran. Everybody was afraid of him, and both politicians and journalists were careful not to go against his interests. Some worked directly for him, and others simply wanted to survive. Many know the journalists who work for him; if someone should happen to go against his interests, they immediately attack mercilessly. There is proof of his press operative giving out money at a table in a bar.

Three important men of the financial world, a Swiss banker, a Spanish banker, and an ex-Minister of the Economy from Argentina, told me that in 1993 Yabran offered 800 million in cash to buy a majority share of stock in Aerolineas Argentinas.

But this is not the most significant fact. Between 1994 and 1995, he managed to get so much control of parliament that he was having a law passed that would have privatized the post office, which he called a "custom-tailored suit." Everyone knew that Yabran would be the future owner of the post office, and the privatization law had a provision that would have authorized him to offer secret monetary services. This means money orders, transfers in Argentine pesos or any other currency, within the country or abroad, without limitation, with a legal prohibition against informing monetary authorities about who sends money to whom, and when it is sent (Article 4, paragraph 5).

In other words, in a country without bank secrecy laws, a businessman was going to have the ability, from the post office, to send and/or receive transfers from or to any part of the world, and monetary authorities were prohibited by law from exercising any control. Something like this: Welcome Money Launderers. Come, criminals of the world.

A good question would be: Who is the real author of the bill that would create such a singular law? It is actually known that it was one of Yabran's lawyers, but this has not been duly proven. The two senators who introduced the bill understood nothing of its subject matter and they were never even able to debate it.

No less strange is the attitude of the Radical Party (U.C.R.), which has been against all privatization's carried out by the Menem government (petroleum, gas, electricity, telephones, etc.), but supported without objection the privatization of the state-owned post office.

The internal workings of congress were also notable, in that one year before the attempt to pass the law, several members of the Communications Committee were removed, a necessary step for the bill to get to the floor without objection.

Finally, the law was not approved, thanks to the courage of a few legislators who opposed it even at the risk of destroying their political careers, Minister of the Economy Cavallo, who called things as he saw them, and the dignity of ex-President Raul Alfonsin, who, embarrassed by the orgy of corruption among parliamentarians, ordered a vote against it.

The climate of impunity and resignation is such that all those legislators continue enjoying high prestige as politicians, as if nothing had happened. Some time later, in January, 1997, news photographer Jose Luis Cabezas was killed, apparently on the orders of Yabran, and the radicals accused Menem supporters of being Yabran's partners. They may not have been very far off, for when the FBI brought in Excalibur, it was discovered that more than 500 telephone calls had been made between Yabran and various of Menem's ministers and legislators, including calls to the President's own residence.

Money gets laundered in all countries, but in few has criminal control of congress been so evident.

The United States makes reports, certifies or decertifies, in accordance with its belief regarding the way a country is cooperating in the war on drugs, but within its borders it shows just as many contradictions as the other countries mentioned. The Bank of Boston laundered $1.2 billion over five years, while at the same time it went through an inspection by a representative of the Treasury Department; the inspector was a fool. The bank pled guilty and paid a fine of $500,000. Now it has just been discovered that the money laundered by Raul Salinas de Gortari went through Citibank of New York and its subsidiaries in London, Switzerland, and Mexico, using investment funds that lend out money to the very countries from which it has been collected.

If we divide the world between the winners and losers, without asking how, we create an unmerciful and amoral philosophy of life. In defense of this position, the road taken by a large segment of society is a nihilistic ethic. "I don't get involved and I survive."

What occurred during totalitarian periods under the communists and the Nazis is occurring again within the circles of corruption. Who would dare to have denounced Stalin or Hitler? Although totalitarianism does not reign today, the armies of corrupt politicians, journalists and lawyers can generate the same type of intimidation.

The lawyers of the Mafia write books in the United States and produce television programs, which hail the United States as a great country. But those who die (the losers) in the clutches of their clients (the winners) write no such books. Meanwhile, publicly, this whole process is being framed as a war on drugs.

The residual discourse from this "war on drugs" has become a political exposition; however, none of the politicians in power explain what road we should follow to really exterminate this problem. Only between 5 and 10% of the drugs and between 2 and 3% of laundered money is seized. The problem of drugs and its resulting institutional corruption has been explained again and again. But what is the solution? More war?

There are 1,300,000 people in prison in the United States, 59% of whom are tied directly to drugs. How many people are we going to put in jail? To the above figure, we need to add 2,700,000 more who are either out on bail or on probation.

The Mafia bosses die of old age in their mansions; the prisoners are drivers, prostitutes, minor gunmen who cannot afford a good lawyer. But the lawyer of the BCCI was Clark Clifford, probably one of the most important lawyers in Washington, aide to President Truman (1948-1952), and Secretary of Defense under President Johnson.

Money laundering is going to be the most important political topic in the next few years. In a meeting of the Latin American Parliament in 1991, a Uruguayan lawmaker voted in favor of a proposal to fight drug trafficking, but against one that opposed money laundering. For that legislator, drugs were bad and he did not want them in his country, but let the money come.

The same discussion took place in the House of Lords in the United Kingdom. They would not allow opium to come in, but money from the sale of opium was welcome.

A famous Argentine journalist said repeatedly: "It doesn't matter where the money comes from, only where it goes," perhaps convinced that the traffickers were going to give it to him to buy radio stations to put on democratic programs criticizing corruption.


REAL POWER AND APPARENT POWER

Under capitalism, real power is concentrated in the hands of the few. Moreover, with the rise in technology, unemployment and gaps in opportunity have increased. The establishment wants neither to socialize nor democratize its power. However, drugs cannot become a vehicle of social mobility and power. The millionaires want politicians to remain in office only a short time, with no chance of threatening their fortune or their power; then they want another inexperienced politician to enter the political arena for another short while. Although the politicians can argue the newspapers, the real power, the permanent power, is money, which is something else entirely.

The debate over how to approach this situation is an important one. It is clear, however, that we cannot attempt to challenge the power of drug traffickers or money launderers by playing their game. That is, we cannot fight fire with fire, or in this case, money with money. Society would perish, strangled between the old establishment and the new Mafia.

The story of Robert Kennedy's struggle against the Mafia is noteworthy. Kennedy had the infamous drug trafficker of New Orleans, Carlos Marcelo, exiled for two years. There is now evidence that indicates that Kennedy was one of the persons whom Marcelo marked for death. Marcelo died of old age at 83 in his mansion. So was Bobby Kennedy a loser and Marcelo a winner? Marcelo's lawyer wrote a book (Mob Lawyer), in which he basically concluded that if you want to be a politician, first make friends with a crime boss.

Are politicians who adopt the alternative destined for transitory, unreal, and superficial power? Or to be cynical, must they be unscrupulous friends of the Mafia? Is this the only way to approach election campaigns? Where will this road of political incredulity take us? If a politician wants to be decent, how long before organized crime chokes him?

Is it possible that anyone in Colombia believed that the minister of justice could have been bought for $12,000? Nevertheless, Lara Bonilla passed the last months of his life declaring that he had not endorsed the check. The journalist who was attacking him was the spokesman of the cartel, with a direct line to Pablo Escobar.

This book will perhaps shed light on events that perhaps you were not familiar with. It supports the view that if we do not rethink this war on drugs, we will never win, or that there really never has been such a war, only maneuvers to increase prices. In sum, if we know we are in a war in which we know we will not win, why don't we try another approach to the problem?

This war is full of heroes who have sacrificed their lives. It is also full of unserving bureaucrats and dozens of security organizations who waste the majority of their time fighting amongst themselves, perhaps trying to secure a bigger budget for themselves or increase the boundaries of their power.

The police do their best to confiscate kilos of drugs, which go into tediously calculated statistics. All this takes place as if they did not know that the person whom they just arrested with the drugs is unimportant, that if he were important, then he would not have been there with the drugs in the first place. He is a driver or a triggerman.

Is the Mafiazation of society inevitable?

When Jose Oberholzer was vice president of the Union Bank of Switzerland, he advised many Latin American clients, among them Raul Salinas de Gortari. In the shady game of moving money, he helped create fronts in order to conceal the real origin of the funds. Now Oberholzer finds himself charged with laundering $150 million of the Medellin cartel's money.

He was arrested by police in Canton de Vaud, Switzerland in February, 1994, together with Sheila Arana de Nasser, wife of Julio Cesar Nasser David, an operative of Pablo Escobar, the late leader of the Medellin cartel. Two months after his arrest, upon the request of the United States under the Legal Mutual Assistance Treaty, Swiss Authorities confiscated the $150 million.[1]

A judge of Canton de Vaud, Jackes Antenen said that "this is the biggest confiscation of drug money in Swiss history." According to the DEA, David Nasser smuggled more than 25 tons of cocaine into the United States. Consequently, the police continued to look for another $755 million.

Dieter Jann Cerrodi, the Swiss detective who continued with the investigation, accused Oberholzer of laundering money, which originated in Latin America. The Swiss attorney general confirmed this accusation. Oberholzer after spending 48 hours in jail, remained under house arrest. However, the judge, considering the Swiss Penal Code of 1990, predicted that "maybe they'll give him a few months in jail."

BETWEEN OPERATION CASABLANCA AND THE BANK OF BOSTON

It looked like a meeting of more than a dozen rich and well-dressed business executives, who had traveled on their private jets to discuss some important agreement over dinner at a casino. After dinner, a convoy of limousines arrived from across 80 miles of desert to take the "executives" from the Casablanca Casino Resort, in Mesquite, Nevada, to Las Vegas, where they were to spend the night. But the vehicles crossed the brightly lit streets at high speed and returned to the highway, where police in patrol cars signaled them to pull over.

Victor Manuel Alcala Navarro's chauffeur lowered the window that separated him from the passangers [sic] and offered this excuse: "I'm sorry. I'm afraid I was speeding." Alcala Navarro, presumably the most important money launderer of the most powerful drug cartel of Mexico, looked through his window at the group of civilian dressed agents that was coming toward the car and said, I believe that this is something more than a speeding ticket."

The haul of limousines brought in on that Saturday night in the suburbs of Las Vegas�as it was described on Tuesday by U.S. Customs agents familiar with the operation�was part of what prosecutors describe as the biggest case of money laundering in the history of the U.S., which for the first time tied the Mexican banking system to the laundering of drug smuggling profits.

The three-year operation, directed by the U.S. Customs Service, implicated some of the largest and most prestigious banks in Mexico and penetrated the drug cartel in Juarez. Details of the operation, in which more arrests were made on Tuesday, surprised Mexican prosecutors, politicians, and financiers, none of whom were informed about the operation until the formal announcement was made from Washington on Monday.

While Mexican and U.S. authorities had tried in the past to bring people involved in specific cases of money laundering to justice, and had documented the extensive corruption existing within political and justice circles in Mexico, never before had any government put together an investigative team that tried to document systematic corruption based on drug trafficking in Mexican financial institutions. American authorities indicated that the investigation could involve up to $152 million, in no fewer than one hundred bank accounts in the U.S., Europe, and the Caribbean. This is nothing, of course, compared to the $1.2 billion that the Bank of Boston laundered, but this money had come from outside the U.S., so was considered to be much more serious.

Operation Casablanca started three years ago as a small-scale investigation that attempted to "locate and infiltrate those who were invisible to us." That is to say, entrepreneurs who moved millions of dollars in profits through complex financial paths that converted the cash into earnings from apparently legitimate businesses, as explained by an important supervisor from the Customs Service who led the operation.

The operation really got under way when undercover agents set up a front, a business they called Emerald Empire Corporation, with offices in the Los Angeles suburb of Santa Fe Springs, according to the indictment presented in the federal court of that city on Monday. Agents who passed for executives of the company had gone looking for Mexican banks willing to accept their "dirty money." The fact that the money was always clearly identified as drug profits was never a reason for Mexican bankers to refuse it; the only matter discussed involved the commission to be paid to the banks for handling the money. The figure most often cited was around four per cent of the amount of the transaction.

The supposed drug money was deposited later in Mexican bank accounts under false company and individual names. After the deposit was made, a corrupt bank official, sometimes a branch vice president or a division head, would call an unsuspecting colleague in an American branch of the same bank to say that he had approved a transfer of money involving the false individual or company.

Alcala Navarro, who quickly realized that he had been caught there at the side of the highway on that Saturday night in Las Vegas, was one of the best contacts for the undercover agents, as the indictment points out: "Alcala Navarro was able to locate bankers who worked for banks headquartered in Mexico and ask for their help in laundering money representing profits from the illicit sale of narcotics" and played a key role in recruiting other bankers, according to the indictment.

The indictment describes a series of meetings between Alcala Navaro and Justice Department informants and undercover agents in which they presumably arranged for the laundering of tens of millions of dollars on behalf of the Juarez cartel and the cocaine and heroine Mafia of Cali.

The indictment recounts a series of six money transfers that totaled six million dollars that were initiated by Alcala Navarro and which were deposited by money order in the Mexican bank Banorte between November 11 and December 16, 1997. Morover [sic], the indictment lists dozens of deposits that exceeded $10,000, which by law should have been reported as suspicious, but which were not. The side of the deposits varied between $32,000 and $3.9 million.

The indictment further states that on August 29, 1997, Alcala Navarro, in a meeting with drug traffickers and an undercover agent, sketched out the close ties between people from the Juarez cartel-including its one-time boss Amado Carrillo Fuentes�with "high-level Mexican authorities." At the same time that U.S. prosecutors were looking into the involvement of Mexican banks, they were carrying out a parallel investigation of the biggest and most influential drug Mafia of Mexico, the Juarez cartel, which had been led by Carrillo Fuentes up until his mysterious death during a plastic surgery operation last July.

These were not people dressed in brightly colored tee shirts with their hair greased back. They looked like well-dressed businessmen with diplomas from top-notch schools. They traveled throughout the United States, Europe, and South American, dressed well and eating and staying in the finest hotels�a whole enterprise.

These were the same men who were invited by undercover agents to spend a business weekend discussing and closing deals, while having a good time at the Casablanca Casino Resort. The customs agents chose their Mexican contacts very carefully, so that they would mix easily in a meeting of this type. Some of them arrived at the private airstrip near the casilno[sic] in jets belonging to the Customs Service, thinking they were the property of Emerald Empire.

The men were later arrested and taken by limousines supplied by the U.S. government.

Immediately following the arrest in Las Vegas of Victor Alcala Navarro, the "right hand man" of the financial director of the Juarez cartel, Jose Alvarez Tostado, the U.S. urged Mexico to arrest Tostado as being involved in the scandal made public on Monday.

The acting U.S. prosecutor in Los Angeles, Julie Shemitz, told the New York Times that American authorities had never "shared any information with Mexico during the investigation for fear of risk to the safety of their undercover agents." Shemitz said, "It is not that we don't believe the Mexicans. In reality we did not speak with anybody. These kinds of operations are so dangerous that we can end up playing with the lives of the agents.

Those first arrested were kept in jail until Tuesday, the twenty-sixth, when they were formally indicted. They were accused of laundering amounts of money between $212,000 and $19 million from drug trafficking. Judge Rosalyn Champan decided that they should remain in custody because they had few financial or family ties in Southern California that might reduce their risk of flight. She added that she would consider later on the possibility of bond.

More than one hundred people are included in the indictment presented on that Monday concerning money laundering in six countries. Operation Casablanca pointed to employees of twelve of the largest nineteen Mexican banks. The case will produce a number of trials that may go on for months.

In the first stage, $35 million were captured, but it is hoped that another $122 million can be seized in bank accounts in the U.S. and other countries. The first eight people indicted, all Mexican nationals, are facing money laundering and conspiracy charges, and if convicted, could be subject to life imprisonment.

Only one of those indicted denied the charges immediately. Jose Angel Cazares' attorney requested dropping of charges against his client, claiming that authorities lacked probable cause to arrest him. The Magistrate dismissed his request "without prejudice," which means that it may be brought up again later.

In spite of supposedly having received juicy commissions for helping to hide the origin of drug money, the eight people appeared before the Los Angeles federal court and made sworn statements that they did not have the economic resources to pay for their own defense; thus, they were assigned public defenders.

The U.N. Office of Drug Inspection and Crime Prevention held a seminar under the auspices of Bolivian organization, the United Nations, and the governments of the United States, Great Britain, and Citibank. (This was the same bank, which supposedly is being investigated for laundering the money of Salinas de Gortari and the Juarez Cartel, an investigation rarely mentioned.)

The Panamanian Association of Banks (Apabancos) jumped the gun and announced that it would come out clean from any association with the Mexican "scandal," although there had been no indication that Panama was involved.

The U.S. government announced that Operation Casablanca reached Venezuela with the bringing of charges against five employees of four banks of that country. Those five were accused of laundering $9.5 million through the Banco del Caribe, Banco Industrial de Venezuela, International Finance Bank and Banco Consolidado.

Three of the five who were arrested were identified as Carmen Salima Irigoyen, Esperanza de Saad and Carlos Izurieta Valery. The other two are Roberto Vivas and Marco Tulio Henriquez, who were in Venezuela, according the Justice Department. Would it not be cheaper just to investigate the banks that did not launder money? These days we are witnessing an international spectacle of institutionalized cynicism.

Undercover agents of the U.S. Border Police were able to infiltrate drug traffickers and money launderers from Mexico and Venezuela. Everything was carefully filmed and recorded, and in all recordings it was made clear that the money came from drugs; however, the bankers at no point expressed the least concern at that fact, preferring to limit discussions to their commissions.

A U.S. government agency, working surreptitiously in other countries, and using a subterfuge, was able to bring the bankers to the U.S. and put them in jail. Power is what matters. Only the United States can do something like that. Not because the U.S. is better, but because it has greater power.

The Bank of Boston laundered $1.2 billion for the drug trafficker Angiulo, but his drugs came from outside the country. Following this criteria, it would have been possible to invite the president of the Bank of Boston to Mexico and put him in jail there. But no one could imagine that scenario; such a procedure would open up mechanisms of reprisal that are available only to those in power.

How did the investigation of Citibank, Raul Salinas, and Confidas end up?

IBM

In 1995, it was discovered in Argentina that IBM, in order to sell a computer system to the Banco Nacion, had paid $34 million in bribes to various officials of the bank. The Minister of Economy at that time, Domingo Cavallo, provided information to the Argentine judge that made it possible to detect the funds in distant accounts in Swiss banks and in Luxemburg, where the corrupt officials had sacked away their money. After the investigation, several ex-employees of the bank and the local branch of IBM were imprisoned. The problem became apparent when it was discovered, during the same investigation, that there were four employees of the main office of IBM in the United States that had the same responsibility: two Brazilians, Robeli Libero and Marcio Kaiser, an Australian, Peter Rowley, and the American Steve Lew. The Argentine judge asked Interpol to arrest them.

The home office of IBM came to the defense of its corrupt executives. It is strange that the Department of State, which so often complains about corruption, repeated the same tired speech given by the corrupt company. In the United States, they make a sport of talking about corruption in Latin America, but just wait until it appears among top executives of the U.S. Even before the judge requested it, the Department of State spoke out against any order for international capture.

IBM had been in first place internationally in terms of trustworthiness. Now, with the support of the U.S. government, it was determined to sabotage justice in a country where it had made a lot of money, using strategies against the laws of Argentine and the U.S. It was also posed to ignore an international legal order, with the support of its own government.

In other words, IBM was acting just like the Bank of Boston, only a little smaller. The message given to South Americans would be: If you want to bribe, don't do it among yourselves, hurting our interests; if you want to launder money, don't you do it in detriment to our banks, but let us do it, because we have a special patent.

Since 1977, the United States has had a law against Foreign Corrupt Practices. An executive of an (American) multinational who bribes a foreigner will be tried in the United States.

Argentine Senator Leopoldo Moreau stated that "The speed with which the North American Department of justice reacted to the request from Argentine prosecutors contrasts with the slowness with which the organization acted on the matter of providing information to Judge Banasco concerning bribe money deposited in American bank accounts.

�[notes]�
1 Charles Intrago, Money Laundering Alert. This is a specialized monthly bulletin published out of Miami.


Colombia:

The Culture of Death

The origin of the Antioquians goes back to the era of the Conquest, when the Catholic Kings of Spain expelled the Moors and demanded that any Jews wishing to remain in Spain convert to Catholicism. Many Jews preferred to flee the Old World and arrived in this region in central Colombia, changing their surnames. Therefore, they were called "transplanted Jews." The Antioquians have particular characteristics that differentiate them from other Colombians. One such trait is their great affinity for activities related to trade. Another is their devotion to the breeding of pure-bred horses.

Because of its geographical position, Colombia is a bridge between large consumer markets and drug-producing regions. This "privileged" position for drug trafficking, as well as its social environment of dispossession and poverty, made Colombia a sitting duck for the flourishing of organized crime. And so, Colombia played host to these organizations, where their bases of power were established.

The Secret Architecture of our Nation's Capital

The Secret Architecture of our Nation's Capital

an excerpt from:
The Secret Architecture of our Nation's Capital
David Ovason
�1999, 2000
HarperCollins
10 E. 53rd St. New York, NY 10022
ISBN 0-06-019537-1
516 pps - First US Edition -- In-print
-----

Foreword

"As above, so below." These words, attributed to Hermes Trismegistus, lie at the heart of the Western esoteric tradition. In brief, they mean that the universe and all it contains is reflected in some manner not only on Earth, but also in man and his works. The chief quest of all ages has been man's attempt to understand the mystery of existence and to find his place in it. He keenly observed the movement of the stars, as we read in Genesis 1: 14, "for signs, and for seasons." Not only have the stars guided the traveler on the earth and seas, but their constellations are archetypes that have been viewed as guides for the lives of men and nations.

In this fascinating and well-researched book, David Ovason presents the remarkable thesis that Washington, D.C., is a city of the stars. He demonstrates that there are over 30 zodiacs in the city, and that the majority of them are oriented in a meaningful way. Even more astonishing is it to learn that these zodiacs were designed to point to the actual heavens-thus marrying the Capital City with the stars. This discovery parallels the recent finding in Egypt that the three Great Pyramids correspond to the three stars in Orion's belt, while the Nile River occupies the same relative position as the Milky Way. It is still debated whether this was intentional, yet the correlation is undeniable. Similarly, the assignment, position and meaning of Washington, D.C.'s zodiacs bespeak a relationship between heaven and earth.

Recent scholarship, such as Steven C. Bullock's Revolutionary Brotherhood: Freemasonry and the Transformation of the American Social Order, 1730-1840 (University of North Carolina Press, 1996), demonstrates the undeniable influence Freemasonry exerted on the American system of government and lifestyle. Aware of these influences, David Ovason discovered what may be Masonic influences in the architecture and layout of the city. He does not assert that all his correspondences or discovered secrets were laid down by Masons, but there is some support for his argument in documents preserved in the Archives and Library of the Supreme Council, 33', Southern jurisdiction. As in other Scottish Rite Blue Lodge ("Symbolic" or "Craft") rituals, Albert Pike's Book of the Lodge contains recommendations for decorating the lodge ceiling with constellations and planets. The star map, which is to be painted on the ceiling, is replete with Masonic symbolism that was influenced by French designs in the early 19th century

The astonishing thing is that Pike's ceiling design reflects precisely the same mysteries observed by David Ovason in this book. These mysteries relate to the constellation Virgo. Pike's map is entirely schematic-which is to say that it does not reflect the actual positions of the stars in the heavens (Leo could in no way be represented as following Ursa Majoris, for example). Even so, Pike is very clear in allocating his symbolic placing of planets and stars. For example, he places the full Moon between the constellations Scorpio and Virgo. This means that the full Moon is in the constellation Libra, and the star Spica is just above the lunar crescent.

What does this mean to us? The star Spica happens to be the one that David Ovason has shown to be symbolically linked with both Washington, D.C., and the United States as a whole. As the reader will learn, Ovason also suggests that this star may be the origin of the five-pointed star that adorns the American flag. He also suggests that Spica may have been the origin of the Blazing (or Flaming) Star of Freemasonry.

Certainly, it would be far-fetched to draw too many conclusions for a schematic map, but it is evident that Pike visualized his star map as marking the setting of Virgo, along with the constellation Bootes, to its north. This is precisely the cosmic setting that David Ovason suggests represents the secret star plan of Washington, D.C. While Pike engineered a schematic time for his star map, Ovason shows that it relates to a number of days centering upon August 10 of each year. The significance of this and other "mysteries" is fully explored in this work. In view of the meanings that may be traced in Albert Pike's map, we can only wonder if he observed the same correspondences of the city, noted by Ovason, yet for reasons of his own never divulged them.

In any case, David Ovason presents us with a fascinating work that will be sure to captivate and entertain readers interested in architecture, esotericism, Freemasonry, and our nation's capital. His thesis may be controversial, but it is well thought out and presented.

-C. Fred Kleinknecht, 33', Sovereign Grand Commander, The Supreme Council, 33' (Mother Council of the World), Southern jurisdiction, U.S.A., Washington, D.C.
=====

Chapter One

Come let me lead thee o'er this second Rome ...
This embryo capital, where Fancy sees
Squares in morasses, obelisks in trees;
Which second-sighted seers, ev'n now, adorn,
With shrines unbuilt and heroes yet unborn ...

(Thomas Moore, "To Thomas Hume, from the City of Washington,"
1804, in The Poetical Works of Thomas Moore, 1853, vol. II, p. 296)[1]

The shrouding mists have gone, and with them the frogs and the mud turtles, yet their presence still lives on in the name. Foggy Bottom is the area where the western reaches of Washington, D.C., used to meet with the Potomac River to the southeast of Rock Creek. In modern times, it includes the once-infamous Watergate Complex, and its evocative name has survived in a Metro station, south of Washington Circle.[2]

If you were to walk or drive from this Metro, down to the Watergate Complex and on to the John F. Kennedy Center for the Performing Arts, even as far as the western edge of Constitution Avenue, you would be unlikely to discover the reason for the name Foggy Bottom. The drainage engineers, the landfill experts and the architects of the late 19th century have done their work well, turning pestilential mudflats into habitable land.[3]

Foggy Bottom was originally called Hamburg by a Dutch gunmaker named Jacob Funk, who had settled the area in the mid-18th century with grandiose plans for its development.[4] However, Nature proved intractable, and the plans he had drawn up for a township came to nothing of real substance. The place remained almost uninhabited because of its deafening frog choruses and cough-inducing mists: settlers Were deterred, and only duck hunters and fishermen found the mudflats of use.[5] Incredibly, when, almost 100 years later, in 1859, a gasworks was built in the area, the few householders of Foggy Bottom were delighted:

they imagined that the gas fumes would disinfect the muddy land, and somehow make the fogs kinder on their throats.

Although officially Hamburg, it was called Funkstown by the early residents for a considerable time, yet it was scarcely even a village, and certainly not a town. Only a few wood-frame buildings and even fewer brick houses are recorded at Foggy Bottom, as late as 1800. Surprisingly, a pair of red-brick, two-story houses have survived from this time, to the southwest of George Washington University. These were built originally by John Lenthall (who was in charge of the construction of the U.S. Capitol) on 19th Street. At that time, they must have been near the northern edge of the ancient Foggy Bottom. In the 1970s they were moved, brick by brick, to their present location on 21st Street, and in spite of this enforced reconstruction are sometimes said to be among the oldest surviving dwellings in Washington, D.C.

About 1800, a large glassmaking factory � essentially for the windows of the new city buildings � was constructed on the southern edge of Foggy Bottom from bricks kilned in Holland. This factory was located on the square sold as lot 89 in the sales map of 1792 (1 have marked this position in black on the map below) which had been drawn up at the behest of George Washington to attract capital and speculators to the

By one of those curious coincidences with which the history of Washington, D.C., is punctuated, this is exactly the site where, nearly 200 years later, a bronze statue of the mathematical genius Einstein was erected, outside the National Academy of Sciences (plate 1). The great man is shown contemplating a star-spangled marble horoscope for April 22, 1979, which is spread out at his feet: he is casually resting his right foot on the stars of two cosmic giants � Bootes and Hercules. As we shall see, this is probably the largest marble horoscope in the world.

The surprising link forged between Foggy Bottom and the stars does not end with Einstein. Behind his statue, in the National Academy of Sciences building, are 12 signs of the zodiac, along with their corresponding symbols, which have been built into the structure of the metal doors (plate 2). In the adjacent building to the east � the Federal Reserve Board Building � are two other zodiacs, cut by the great glass designers Steuben, as decorative flanges for lightbulbs (plate 3 and figure 12). These zodiacs � the marble floor of the Einstein statue, the metal doors of the Academy and the glass light fixtures of the Federal Reserve � are just 4 of the 20 or so zodiacs in central Washington, D.C.[6]

At a later point, I shall examine each of these zodiacs more closely, but even at this stage we must stop and ask the obvious question: why do we find zodiacs in the formerly unhealthy stretches of Foggy Bottom, where frogs croaked night and day, and where young boys would hunt for mud turtles?

Today, the air around Einstein is fresh and wholesome, and even the River Potomac has disappeared. The silting of the waters, and the extensive landfills of the late 19th century, explain why the Potomac wharfage has been moved, and why, from the windows of the Academy, one looks onto a greensward extension of the Mall, landscaped with trees and dotted with a variety of war memorials, including that of the Vietnam Veterans. In many ways, this extension of Foggy Bottom, born of the waters of the Potomac, has witnessed greater change than almost any other part of Washington, D.C.

It would be pleasant to think that Einstein would know that behind him there had once been a site called Observatory Hill. Had perhaps the earlier inhabitants � first the Algonquins, and later the early settlers from Elizabethan England � studied the stars from this rise?[7] The reality is probably more prosaic, for in 1843 the site had been taken over by the U.S. Naval Observatory (next page), and an enormous viewing-dome was constructed with a movable frame that swung easily on bearings of huge cannonballs, mounted on greased cast-iron grooves.

Fifty years later this same site, which had been earmarked by George Washington not for an observatory but for a university, would be proposed for an extraordinary museum by a scarce-remembered architect named Franklin W. Smith, whose highly original architectural ideas would help revolutionize the appearance of the city.[8]

If one of the night-shift workers in the glass factory had chosen to step out to look into the clear night skies in wintertime, he would have seen much the same stellar pattern in the skies as Einstein now contemplates on the marble at his feet � in the skies on Christmas Eve, 1800, at about 7:30 in the evening, he would have seen the gibbous Moon almost overhead, with bright Venus setting over the Potomac, in the west.

The constellation of Canis Major, the Greater Dog, would have risen over Jenkins Heights, where the north wing of the Capitol was almost completed. Dominating this part of the skies would be the scorching dog star, Sirius, a brilliant white and yellow star. In 1800, this was the only star known to have been represented in the Egyptian hieroglyphics. Some modern scholars trace the name of the star in the hieroglyphic of a dog, evoking the god Anubis; however, the ancient Egyptians tended to call Sirius Spdt, and represented it with hieroglyphics that resembled an obelisk and a five-pointed star [9] The ancient Greeks, who took over so much of the Egyptian Wisdom, called Spdt by the name Sothis, yet it remained the dog star in their calendars, and it was used by both Greeks and Egyptians in the orientation of important temples.[10] I pay attention to the five-pointed hieroglyphic here because, as we shall see, it seems to have been the source of the five-pointed star adopted for the American flag.

Sirius is 23 times as luminous as our own Sun, and even though its distance from the Earth of eight and a half light-years dims this luminosity, it is still the brightest star in the sky. The ancient Egyptians may have known that it was a double � a two-star system � yet this was forgotten for centuries, until the invention of powerful telescopes. Its companion, known as Sirius B, seems to have a density more than 90,000 times greater than our own Sun, and has become one of the great mysteries of modern occult literature.[11]

To the northwest the cross-stars of the constellation of the Swan, the Cygnus [12] of the ancients, would be visible, seeming to mark Masons Island (which is now called Theodore Roosevelt Island) with the sign of the cross.[13] The two great stars Castor and Pollux, distinguishing the constellation Gemini, would have been rising over Jenkins Heights, where the new Capitol building was still being erected. A little higher, the mighty constellation of giant Orion would be hovering in the southeastern skies � marked by that tight triple belt of stars to which the ancient Egyptians are supposed to have oriented their pyramids. Its orange star Betelgeuse, which marks the armpit of the giant, has a diameter about 400 times larger than our own Sun, yet because it is 470 light-years from our Earth, it seems to be no larger than a red pinprick in the skies. It is moving away from Earth at the rate of over 10 miles per second, yet so illusory is the cosmos that the ancients wisely called it "fixed," and the star seems scarcely to have moved since Babylonian astrologers named it Gula, about 4,000 years ago.

Two hundred years separate the marble chart of Einstein from the night sky of the glassworker, yet it would seem as though nothing had changed in the heavens in a period which man must measure in less than a dozen generations.[14] It was this promise of stellar immutability which had first led the ancient Egyptian priests, and their pupils the Greek architects, to orientate their temples to the stars. It was this same promise which led the designers of Washington, D.C., to ensure that their own new city was also laid out in accordance with a geometry which reflected the wisdom of the stellar lore.

Had you stood on this water-edge of Foggy Bottom on April 3, 1791, before the glass factory was built, you would have witnessed a most remarkable event � one which seems to have been involved in the magic of the building of Washington, D.C. On the morning of that day, an "African-American" astronomer named Benjamin Banneker was making observations not very far from this spot. Wherever he stood, he would have been looking directly to the east, watching the sunrise, knowing full well that within a few minutes there would be an eclipse, when the Sun, newly risen over the hill which was then called Jenkins Heights, would be blacked out by the body of the Moon.[15]

This is not poetic fantasy: Banneker was a historic personage (in modern Washingon, D.C., he has a city park named after him) and did record that eclipse in his own notebooks.[16] He was working on this land with the surveyor Andrew Ellicott, making the preliminary observations so essential to laying out the boundaries for the new federal district. Ellicott was following the instructions of George Washington himself, and Banneker was his temporary assistant: the two were taking the first giant steps towards designing the city which would be named after the most famous man in America.

Banneker worked on the project for only a few months: it seems that his age told against him in such a strenuous and demanding enterprise.

Besides knowing a little about surveying, Banneker was a self-taught mathematician and astronomer, with some knowledge of astrology: indeed, in the following year he published an almanac, containing planetary positions, and observations on lunar and solar eclipses for the year to come.

In one of his ephemerides, Banneker published a crude woodcut of a zodiacal man (see opposite) � an image depicting the cosmic human being marked with the 12 signs of the zodiac that rule parts of the body. This woodcut (from the almanac for 1795) was borrowed by Banneker's printers from a design used by the almanac maker Benjamin Franklin.[17] The image displays one item which relates it to a symbolism that still proliferates in Washington, D.C. The flower in the hand of Virgo (on the right of the image) has five petals, or leaves. This may not sound very important at this stage, but as our investigation of Washington, D.C., proceeds, the implications will become very clear. It is entirely fitting that, at the end of the 18th century, an American image of the ancient zodiacal sign of the Virgin should hold a five-petaled flower.

As Banneker witnessed the predicted eclipse, he would have known full well that the ancients had always insisted that such a cosmic event would have a profound influence upon earthly events. He would have known, too, that the nature of that influence would depend upon the planetary patterns in the skies at the time when the eclipse took place.[18] The eclipse of 1791 was in Aries � a certain portent that the destiny of Washington, D.C., would be filled with pioneering endeavor and excessive (not to say belligerent) enthusiasms. Aries had been the golden Ram of the ancient mythologies � the Argonauts of myth and poetry were the ancient Greeks who chose to face the savagery of the guardian dragon, in an attempt to steal the magical golden fleece of this celestial Ram. The Latin word Aries means Ram � yet, for astrologers, it is the courage of the Argonauts which is signified by the word.[19]

In fact, the augury on that morning of April 3, 1791, was remarkable. The Sun and Moon were not the only pair in Aries at that time: no fewer than five of the known planets were in that zodiacal Ram � the sign which favors brave undertakings.[20]

Such cosmic curiosities are a sign that the city had begun in a kind of dream � as a vision. Some historians will tell you that it began as a dream in the mind of George Washington.

When George Washington first rode over the woody site he had visualized as the future federal capital, the highest hill was owned by Daniel Carroll. In his youth, Washington had trained as a surveyor, and he would have perceived immediately the importance of these heights as the federal heart for the new nation. He may even have learned, from local gossip in Georgetown, that at the foot of this hill had been held the tribal grand councils of the Algonquins. Perhaps he had even heard rumors of the most curious thing about Jenkins Heights � that in earlier times the hill had been called Rome.

Other historians will tell you that the beginnings of this second Rome may be traced to a much earlier dream, in the imaginative "second-sight" faculty of a man who lived on this land long before George Washington was born. In 1663, the owner of this tract of land had been one Francis Pope. It has been suggested that Pope was slyly joking with his own name when he called the hill Rome � and the inlet marking the western boundary of his land the Tiber, after the famous river of the ancient city. That may have been the case, but local tradition twisted the story into something altogether more marvelous. From such tradition, we learn that Francis Pope had the power of prophecy: he predicted a more mighty capital than Rome would occupy the hill, and foresaw that later generations would command a great and flourishing country in the new world. He related that he had had a dream, a vision, in which he had seen a splendid parliament house on the hill ... which he purchased and called Rome, in prophetic honor of the great city to be.[21]

It would be reasonable to take this as a quaint yet entertaining story � sufficiently charming, perhaps, to excite the imagination of the Irish poet, Thomas Moore, who probably heard a version of the tale when he visited Washington, D.C., in 1804.[22] Indeed, the story might easily be taken for the stuff of myth were it not supported by a long manuscript in the Maryland State Archives, at Annapolis. The deed, dated June 5, 1663, is in the name of Francis Pope, and sets out the basis for a survey and granting of a strip of land called Rome, bounded by the inlet called Tiber.[23]

This tenuous link between Pope and Rome was to resurface in Washington, D.C., during 1851, but in a more humorous form. The United States Legation in Rome had been approached by the representatives of the pope, who was prepared to share with other nations in contributing a block of marble (taken from the Temple of Concord in Rome) to help in the building of the Washington Monument. The official in charge of the operation, George Watterson, accepted the proposal, but a little later this was opposed by a Mr. J. T. Weishampel of Baltimore, who interpreted the inscription on the marble (which read, "Rome to America") as pointing to the aim of the papacy to move lock, stock and barrel to the United States .[24] Weishampel was not the only one to object to this supposed profanation of religious freedom in America, and a "deed of barbarism" was enacted when a group of men (who were never identified) broke into the storage shed near the Monument and carried off the stone: they broke it up, eventually dropping its remains over the side of a boat in the manner of a latter-day Boston Tea Party. [25]

Records in England show that an Englishman called John Pope had settled at Dorchester, Massachusetts, in 1630.[ 26 ] It would be pleasant to think that this John Pope was related in some way to our own visionary Francis Pope, because the family name would then tie together two noteworthy strands of history in Washington, D.C. As a matter of fact, this John Pope of Dorchester was a distant forebear of the architect John Russell Pope, who, besides designing the Jefferson Memorial which stands on land liberated from the marshland of the Potomac across from Foggy Bottom, also built the most esoteric structure in Washington, D.C., once known to Masons as the House of the Temple, or the Supreme Council, Southern jurisdiction (figure 1). This has rightly been called by an American historian of architecture "one of the most vital buildings erected in modern times here or in Europe."[27]

What is most remarkable about this merging of history with mythology is that ancient Roman astrologers had linked the foundation of their own city with a fixed star in Leo. This was Regulus, whose name means "little ruler" � perhaps a reasonable association for a city that was to rule the world for so many centuries. The star Regulus is said to have entered the zodiacal sign Leo in 293 B.C., and has been taken ever since by astrologers as the guiding star of the Eternal City.[28] Perhaps Francis Pope, or whoever named the parcel of land Rome and the river Tiber, was interested in stellar things, and perhaps he even knew about this ancient connection between the star and the city whose name he adopted for the hill. However, what Francis Pope certainly did not know � and what no one has realized until modern times � is that this same star, Regulus, was also adopted by the early founders of Washington, D.C., as one of their prime marking stars. As we shall see, Regulus is one of three stars which link the federal city indissolubly with the stellar realms.

It seems, then, that history making and stellar mythologizing meet in the beginnings of Washington, D.C. One consequence of this meeting of dreams is very concrete, very tangible. It is a matter of historical fact, as I have said, that there are more than 20 zodiacs in the center of the city: I know of no other city in the world with such a multitude of public zodiacs displayed in so small a space. In London, for example, there are presently four public zodiacs of which the Bracken House zodiac, in Cannon Street, is probably the most beautiful. In Oxford (England) there is only one � that on the Fitzjames Arch in Merton College which, by its very placing, should not really be called public. In Boston, Massachusetts, I know of three zodiacs � the two most impressive being the atrium zodiac in the floor of the Public Library, and the Egypto-Babylonian zodiac in the ceiling painting by John Singer Sargent, on the second floor. In New York, the most beautiful public zodiac is that encircling the statue of Prometheus by Paul Manship, in the Rockefeller Plaza. Even Florence � that ancient city which gave birth to the Renaissance in the 15th century � has only three public zodiacs.[29]

As we shall see, the mythology of the stellar lights plays an essential part in the foundation and history of the federal city. The deeper meaning of the zodiacal symbolism which radiates through Washington, D.C., is so subtle that it has remained hidden until even today � secretly enshrined in zodiacs set in marble, plaster, concrete, glass and paint within the fabric of the city. This raises a number of vital questions. Is there some secret behind the efforts of the builders of this city to ensure that so many stars should fall to Earth? Why should astronomers and astrologers make so much effort to weave their magic art in this city?

Furthermore, what is it about Washington, D.C., that, in 200 years of colorful history, has made it the focus of zodiac builders, and, so far as arcane lapidary symbols are concerned, the richest city in the world? Could the zodiacs have been set in place to remind those who run the United States that the Spiritual World, which the light of the stars symbolizes, is all around, and may never be ignored with impunity? Or is it possible that the city is still embryonic � still secretly being prepared for some future time when the stars will be seen as the living mysteries they really are?

pps. vii-11

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Onward to the utmost of futures!

Peace

Aloha, He'Ping,
Om, Shalom, Salaam.
Em Hotep, Peace Be,
All My Relations.
Omnia Bona Bonis,
Adieu, Adios, Aloha.
Amen.
Roads End

The Ancient Science of Geomancy

The Ancient Science of Geomancy

an excerpt from:
The Ancient Science of Geomancy
Nigel Pennick
CRCS Publications
PO Box 1460
Sebastopol, California, 95472
ISBN 0-916360-38-5
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Divination and definition of boundaries

From the earliest times, when man began altering the primeval features of the landscape in the pursuit of agriculture, boundaries have been drawn between areas of different usage. A single homestead surrounded by its plot of land might not require any precise definition of its size and area, but adjoining pieces of land belonging to different owners certainly did. The apportionment of newly cleared land to several potential owners, and the checking of boundaries between plots, required a method available to all. The simplest boundaries were natural features: rivers, streams, coastlines, ridges and hills; and to this day many primary boundaries, such as county or national boundaries, are still formed by such features. But these are generally too crude and inflexible for the intricate complexities of human life, and soon completely artificial methods of land division were established, involving the use of measure and number.

If boundaries were to be maintained unchanged against the forces of dissolution, natural, human or supernatural, some sort of definition was essential. They were to be marked in a permanent or semi-permanent way, in relation to independent reference points which could be used, if necessary, to verify and renew the boundary's course. Positions of boundaries were primarily defined by natural features and forces, reinforced by the placing of sticks, stones, trees, ditches, hedges and walls. As they were defined by divinatory methods, including dowsing and astronomical sighting, the lines related directly to the forces in the earth and heavens. Moreover, these same divinatory methods could be used at a later date to check whether the boundary had been correctly maintained and was still performing its geomantic function of marking and dividing the earth. The direct relationship of the boundaries with natural features and the psychic attributes of the place was a concrete expression of the belief, underlying all aspects of geomancy, that any modification of the land must accord with the natural The initial construction of boundaries, the enclosure of hitherto open space, was carried out with rituals and sacrifices. It was believed that th ese sacrifices were necessary to placate or neutralize the guardian spirits of the place, which would otherwise punish man for restricting their liberties. Interference with the original condition of the land was kept at as low a level as possible, in order that its natural attributes might be permitted to function unhindered. The shapes of individual enclosures, if made incorrectly, might wreck a whole scheme, channeling malevolent energies, which would hinder the growth of crops, cripple livestock and create disharmony in human affairs. Geomancy aimed to enhance the inherent properties of the favorable place divined by the augur � amplifying rather than modifying. In the case of unfavora ble tendencies, the intention was to reduce or nullify the malevolent influence.

Once a boundary was created, a special place was made, set aside in space and time from the surrounding, undefined, areas. The inauguration of such a special area, whether a sacred fane a homestead or a city, was an act which in microcosmic form paralleled the creation of the world � the setting up of a new order. In the case of towns, planned according to the archetypal image of the cosmic city, the parallel was even more explicit, so it is not surprising to find that the Roman calendar commenced with the foundation day of the city of Rome.

The simplest form of continuous artificial boundary is the ditch, a deepening of the plough furrow. In ancient Greece, and later in Rome, the laying out and defining of the bounds of cities w ere done by means of ploughing between the four corner markers which had been set up by the geomancer. The plough team was driven around the site, creating the sulcus primigenius the primary furrow. At the plough was a government representative, who held it obliquely so that the earth fell inwards towards the centre of the enclosure. The plough was lifted free of the earth over the areas intended as gateways, so that no interruption of the surface had ever existed on the roads leading through the boundary at these points. The sulcus primigenius was then laid out with the appropriate boundary stones, and areas within the city, now officially founded, were allocated by the drawing of lots, involving the hand of fate, rather than the backhand of influence, to decide who should have the best plots of the city.

Boundaries were specially contrived with the use of ritual magic to exclude undesirable forces and entities. Consequently the crossing of a sacred boundary without authorization was an act, which desecrated the place's sanctity, destroying its psychic shield spiritually if not physically, permitting entry to the unwanted entities. Such an act could only be expiated by death, and those whose entry desecrated Egyptian temples, or who entered the Holy of Holies in the Jewish Temple without permission, were punished by death. Julius Caesar's crossing of the Rubicon, the boundary river of Italy, constituted in Roman law an irreversible act of invasion and was therefore considered in the same way. The preservation of the bounds was irrevocably tied up with the destiny of the people, the fertility of the fields and the fecundity of livestock, so their breach was a psychic attack on those things, which were essential for survival. As late as the eighteenth century, the rules of siege stated that a town or city must surrender to t he enemy if a 'practicable breach' in the wall � one large enough for the army to march through � was made. Once the bounds had been breached to that extent, all was lost, and further conflict was futile.
Having been laid down, the bounds of an area were kept in the popular consciousness and maintained by ritual walks, 'perambulations', on certain sacred days of the year � perhaps originally related to the day the boundary was established. The best recorded example of such a ritual in ancient times is the Ambarvalia, a Roman festival which survives to this day as the ceremony of 'beating the parish bounds.' At the Ambarvalia, the Magister Pagi, an annually appointed official invested with the powers of the priestly office, led the local inhabitants in a procession along the boundary line, visiting holy groves, stones and altars which marked the way. In the main the altars were dedicated to Silvanus, the deity of the fields, the homestead and the Orientalis � the sacred grove on the boundary. A sheep, a pig and a bull were driven thrice around the fields, after which they were sacrificed. Originally, this threefold sacrifice was made in honor of Mars, but by the time of the emperor Augustus it had become dedicated to Ceres, with the intention of ensuring a successful harvest. In north Europe, the Roman sacrifices to Ceres were paralleled by the sacred circuit of the holy island of Walcheren by the fertility goddess Nehalennia. Of this ritual, Tacitus writes:

In an island in the ocean stands a sacred grove, and in the grove stands a carriage draped with a cloth that none but the priest may touch. The priest can feel the presence of the Goddess in this Holy of Holies, and attends her, as her carriage is drawn by oxen w ith great ceremony around the island.

Similar fertility-inducing carriage processions were held in honor of Frey by the Norse priesthood.
Terminus, the Roman protector of boundaries, was honored at the Terminalia, a festival in which his symbol, a phallic post or standing stone marking the boundary, was garlanded by the cultivators of the adjoining land, each on his own side of the post or stone, in acknowledgement of the continuation of the boundary. Such garlanding of phallic objects at the appropriate time of the year was carried out in order to reinvigorate their properties, which had been used up over the previous season.

When pagan worship was banned by- an edict of the emperor Theodosius in A D 391, the perambulation of boundaries became inc orporated into Christian ritual, as such an efficacious practice could hardly be abandoned without incurring disaster. Thus the Ambarvalia became transformed into the Rogationtide ceremony, which redefined the parishes of the new churches 'beating the parish bounds,' a ritual still observed in many places. So strong was its power, intended to preserve the geomantically defined boundaries and hence to promote fertility, that even during the English Reformation, when fanatics wrecked churches, shattered tombstones, demolished stone crosses and desecrated churchyards, the custom was maintained. An injunction of Queen Elizabeth I (1565) on Ancient General Customs reads: '� The people shall once a year with their curate walk about the parish as they were accustomed � the curate in certain convenient places shall admonish the people to give God tha nks.'

These 'convenient places' were, of course, the ancient markers, the gospel oaks, thorns or yew trees, boundary stones, crosses and their sites, all geomantically sited remnants of a former age.

The boundaries of most parishes must seem to the impartial observer to be irrational or even downright perverse. The unusual courses of many boundary lines are shown by several curious recorded features from bounds which are no longer ceremonially traversed. These demonstrate a deviation from the 'logical' mechanistic technique using straight-line grids, the parish bounds being determined by direct divinatory methods. For example, at Hornshayne, an old house on a trifinium (junction of three parishes) in Farway, East Devon, the participants in the ceremony made a small boy crawl along an old beam in the roof, in order that the boundary might be followed in its entirety. This ritual was last enacted on 7 May 1884, a period when many old country traditions intimately connected with the land and its fertility were dwindling because of industrialization and the consequent depopulation of the countryside. At Coly House, Colyford, South Devon, the parish boundary intersected a wall where there was a hole through which a child was required to climb. Both Hornshayne and Coly House obviously dated from a period when the finer points of geomancy were no longer understood (otherwise the houses would not have been built at such sites), yet the traditional ceremonies were still observed as a necessity to ensure the continuity of the guardian boundary.

Before starting the walk, it was customary for each participant in the ceremony of beating the bounds to cut a wand of willow, withy or hazel, for the purpose of striking, and hence re-energizing, the boundary stones and other markers. Children in the party were always beaten with the wands at important landmarks, bumped against stones, or thrown into ditches and ponds where the boundary crossed them. Boys were stood upon their heads on stones and in 'crosses' shallow cross-shaped trenches dug at traditional sites specifically for the purpose. These trench rituals are probably a memory of human sacrifice performed when the boundary was originally laid out at those places. On each perambulation, a different boy was put in each cross, as it was obviously impossible to sacrifice somebody twice. In Celtic times, human sacrifice sometimes involved ritual drowning or burial in a shaft in the ground. The Gundestrup Bowl, an ancient Celtic cauldron depicting a variety of scenes, shows a figur e being thrust into what is probably a sacrificial shaft of the kind excavated at Holzhausen, Bavaria, and Long Wittenham, Berkshire. Such shafts contained votive offerings, and, according to the Middlesex antiquary, Sir Montagu Sharpe, were used as mark-points in the Roman survey of Middlesex. Before passing on to the next mark-point, each member of the party dropped in a stone, a survival of the votive offering, and the cross was filled in.

As late as 1895, 'Urbs Camboritum', a columnist in the Cambridge Daily News, could write of the ceremonies at Houghton in Huntingdonshire:

Houghton parish being bordered on one side by the Ouse, some of the 'Rogationing' party have to traverse the bounds in a boat, and one at least of the party, generally a new member of the Rogation Guild, is treated to a dip in the river. � Thus from time immemorial the remembrance of the water boundary � the scientific frontier � has been 'washed i n'.... In some country places the rustics believe there is magic in this business, and that the crops show up better for this periodical farce, fondly fancying that the goddess of nature rewards the observance of the custom.

Thus, after almost two thousand years of Christianity, the 'goddess of nature' was still believed in and worshipped in the cause of the promotion of fertility.

Of all the various objects used for permanent boundary markers, the most durable have been stone. Injunctions and taboos against moving the stones have existed wherever they have been set up. In the Commination in the Church of England's Book of Common Prayer, there is a passage, 'Cursed be he who moveth his neighbour's land-mark', referring to the mark-stones which, despite the wholesale destruction of many centuries, continuing to this day, can still be found by the wayside.

Each boundary mark-stone was traditionally identified by a name, reflecting the positioning and personal attributes of the stone. Although most of these individual names are now lost, some lists of boundary markers for certain parishes fortunately still survive. At Okehampton, Devon, which was last ritually perambulated in 1950, the following twelve boundary stones are listed: Iron Gate, Sandy Ford, Outer Dinger, Dinger Ridge, Inner Dinger, Cirtory Clitters, New Bridge, Rough Tor Combe, Hartor Corner, Cullever Steps, Alstock Corner and Symond's Ditch. The tradition of named stones is recorded in the Edda. At the entrance to Eljudnir, the Hall of Hel, daughter of Loki, in Niflheim, was a named door-stone, Drop-to-Destruction. In this case, the stone was a boundary marker which warded off good.

Along roads, which often delineate boundaries, milestones set up by Roman surveyors occasionally doubled as boundary markers, and were car ved with the names of the parishes. However, between the fourth century AD and 1663 no milestones were set up in Britain. They became increasingly common with the construction of turnpike roads, until they were made compulsory on most roads by an Act of Parliament in 1744, and on all roads in 1766. Such milestones, now moved or with their inscriptions obliterated, can prove misleading to the unwary fieldworker.

The ritual perambulations of parish or city bounds were generally marked by stones, and the practice of marking pathways or tracks by this means is of considerable antiquity. The great megalithic shrine at Avebury in Wiltshire was formerly approached by two serpentine avenues, each defined by a double row of stones. Only one avenue now survives, but enough of it has been erected in the original position to enable us to judge the avenues' pristine condition. Until a century ago, a processional way marked by megaliths linked Aylesford in K ent with the archaic burial chamber at Kit's Coty House. One of the last of these stones was destroyed as recently as 1976. Perhaps the most interesting and controversial discovery of stone markers along a trackway was that made by Dr E. Rudge, formerly principal of West Ham Technical College. In 1949, whilst checking the work of Alfred Watkins, he discovered the remains of a trackway of considerable length, marked at intervals by conglomerate 'puddingstones'. These flinty stones, a kind of natural concrete, are known locally as breedingstones, motherstones and growingstones, because as they weather the pebbles embedded in the matrix fall out, a phenomenon believed in earlier times to generate the pebbles found in fields. This attribute made them sacred to the Earth Mother goddess. Stones were placed in full view upon hilltops and beside fords, with their spacing and frequency determined by the features of the terrain. Rudge believed that the trackway, which connected Thatc ham in Berkshire with Grimes Graves in Norfolk, a neolithic flint mine of utmost importance, was a trade route to and from the mines, and beyond to the coast. However, no fewer than eighteen of the markstones are associated with churches, that at Chesham forming part of a stone circle which was incorporated into the church fabric. It is thus quite possible that this trackway was an ancient processional route of undetermined purpose, or perhaps a series of routes.

Ritually perambulated routes, integrating the manmade and the natural with the intention of harmonizing the activities of the human race with the patterns of time, were not restricted to beating the bounds. Little studied, their routes are scarcely known, but we can determine that they took exactly the same path each time they were performed, as each variation of Morris Dance has its own steps and routes between villages, and annual fairs had their own boundaries and streets, l aws and customs. This close adherence to the fine detail of traditional ritual ensured the direct continuity of otherwise readily destroyed boundaries, positions esoterically related to both the macrocosmic order of the heavens, and to the microcosmic reenactment of its active phase in the sacred dance or procession. The gyratory dances associated with geomantically sited maypoles represented the annual whirling of the heavens about the fixed earth, the axle-tree founded on the central place which remains steady and endures while all else moves. The patterns traced upon the ground by the dancers, ever approaching the central pole as the ribbons create interlaced forms, are repeated by the gyres of unicursal labyrinths, whose fixed paths lead, between invo luted boundaries, from the external world to the internal. Generally made of earth (though appearing on a variety of objects from Cretan coins to wall-tiles) the turf and pavement forms can usually be walked upon. At least 44 are known to have existed in England alone, and hundreds of others are known from all over the globe.

English turf labyrinths, few of which now remain, are believed to date from the Bronze Age or earlier. In design, they have much in common with very ancient rock-scribings. The most ancient dated labyrinth is that which formerly existed in Egypt, from the middle of the nineteenth century before the present era. It was still there at the time of Herodotus, in the fifth century BC, as he left an account of its magnitude. However, it was a building which, although its function may have been religious or initiatory, was not anything like the turf, stone or pavement labyrinths which are so well known. The Egyptian plan was square, with four entrances, one at each cardinal point. In this respect it was a microcosm of the world in the same way as the other mazes. However, it was not unicursal.

The Cretan labyrinth is naturally the best known of all, not least because of the tale of Theseus and the Minotaur. As the simplest archetype, its pattern is reproduced on numerous coins, the same pattern which has been found in the stone mazes of Finland, in the symbolism of the Hopi tribes of North America, and, in more complex forms, as turf and pavement labyrinths.

The design of m `any labyrinths reproduces, in the main, the cosmic city layout in tangible form, a plan microcosmically related to the archetypal city (Jerusalem or Troy), which was itself a microcosm of the first concept of the world, whose centre was traditionally Jerusalem. The native American Hopi tribe refer to the labyrinth figure as Mother Earth, being the universal plan of the Creator, protecting an especially sacred spot.

The maze at Saffron Walden in Essex has such a form, being circular with four peripheral 'stations'. Most of the gyres traverse only a quadrant, leaving four baulks across the centre, giving the appearance of the Celtic cross, or fourfold division of the world. This microcosmic reference is not fanciful, as the four quarters of the maze were given the names of the towns to which they point � Newmarket, Cambridge, Stortford and Chelmsford. Pe rhaps the maze was meant to represent the whole district in microcosm.
The Cretan labyrinth, constructed by Daedalus, perhaps an embodiment of the Great Architect of the Universe, may well have represented the journey of the initiate through the tribulations of life, to the centre, and, overcoming death in the form of the Minotaur, being reborn by means of the 'clue' � the thread which enables the soul to travel from the trial plane to another level of existence.

Labyrinths, being primarily religious objects, were, like wells, menhirs and pagan gods, incorporated into the Christian Church, with examples ranging from the simple key-pattern square spiral at Thornton, Leicestershire, to the world-famous lieue or league at Chartres Cathedral. Tradition has it that to tread these labyrinth paths (or to crawl them on bended knees) was held, in Christian times, to be spiritually equivalent to a pilgrimage to Jerusalem. The pilgrimage along the labyrinth, which in the case of Chartres is not, despite its name, a lieue (the old French league of 2086.66 metres) but more like 150 metres, would have to be made at times when the currents beneath the omphalos were at their height, e.g. on the church's patronal festivals, or solar solstices. Barefoot, so as to absorb the sacred energies (as one removes one's shoes when entering a mosque), the dance to the centre would be a solemn yet joyous occasion, when enlightenment or spiritual experiences might be received by the pilgrim.

In turf and pavement labyrinths, the patterns of forces in the earth below are translated into material form, two-dimensional renderings of the waterlin e spirals below and tourbillons, vortices of energy, above. Tourbillons are the transition places from the physical to the astral world, whose points of support are generated by the sacred dance on the sacred omphalos.

On these multiple levels, physical, psychological, spiritual and astral, the labyrinth acts as a boundary between various states of being, preventing the unauthorized from treading on the holy place, defining its nature to the initiate, acting as a practical channel of energy for the adept.

Not defined by drawn figures or earthworks, but equally real, are the processional paths inside sacred edifices. In many Roman Catholic churches there is the ritual of the Stations of the Cross, where the congregation reenact the sac red drama of the last hours of Christ. Again, the imitative element is in evidence, reproducing the events at a certain time, in a certain place, in a certain way. Thus we can detect common features which link together all these religious processions, from the redefinition of boundaries, through the pilgrimage, to the burial of the dead and the reenactment of sacred history.

In order that malevolent influences might be excluded, and that fertility and well-being might be promoted, such consecrated boundaries were set up which had to be maintained intact. However, a boundary with no access points defeats its own object, in that nothing can enter or leave. To overcome this, and yet to maintain the effectiveness of the boundary, special places were set aside as points of entry. These entrances, placed where the plough had been lifted during the ritual of the sulucus primigenius, were gaps in the protective enclosure, and hence susceptible to attack. To protect them, they were shielded by guardian devices flanked by consecrated poles, pillars, obelisks or effigies, and adorned with magical carvings.

Gateways in all cultures were protected by such special devices. Chinese practitioners of Feng-Shui, believing that spirits traveled in straight lines, combated them by making winding paths to prevent demons from approaching temple doors. For additional protection, they constructed a spirit wall in front of the entrance, creating a corner unnegotiable by straight-line fliers. Shinto shrines in Japan were protected by torii, gates of entry with a form similar to the Stonehenge trilithons, the Gate of the Sun at Tiahuanaco, Christian lychgates, the entrance to Buddhist stupas and ancient Egyptian p ylons. Each Shinto enclosure has three torii, the first marking the entrance to the sacred precincts, the second and third being between the first and the Holy of Holies, a hierarchical reinforcement of guardianship. Additional protection was afforded in Japanese and Chinese temple precincts by the presence of running water, channelled into tortuous courses and traversed at special points by humpbacked bridges which traditionally the spirits could not cross.

Of great influence in the Western mystery tradition were the two sacred guardian pillars which flanked the entrance of the Temple in Jerusalem constructed by Solomon. Being on important geomantic points, their ornament, of nets and wreaths of chequerwork, symbolized their tying down of the earth's energies at that point. Named Boaz and Jachin, they represented the immovable pillars which s upport the sky and the Gates of Dawn, gates to the underworld which exclude the demons and wraiths from entering this world of their own volition. The two holy pillars have been consciously reproduced ever since in many buildings constructed in the masonic tradition. Symbolically they represent the guardians of the arcane secrets.
Almost invariably, sacrificial foundations were laid in gateways, special attention being essential in such important places. Skeletons of sacrificial victims have often been unearthed at entrances to the sacred enclosures. The Celtic Saint Odhran volunteered to be the first person to be buried on the holy island of Iona, to become its spirit guardian. Lest a less worthy person should predecease him, it is said that he was buried alive - a strange custom for Christians, but an obvious survival of pagan lore.

Akin to this sacrificial practice was the placing of severe d human heads in gateway niches in Celtic times. The famous Celto-Ligurian sanctuary gateway found at Roquepertuse, Bouches-du-Rhone, France, contained human skulls and was surmounted by a guardian bird of stone. The skulls' presence in the sanctuary, in addition to terrifying the neophyte and preventing the entry of malevolent spirits, ensured that the place remained the permanent residence of the spirits of the departed, who became its guardians. In the absence of human sacrifice, animal skulls performed a similar function.

A survival of this practice was in evidence in London until the eighteenth century, where the gates of the City sported the severed heads of the executed, ostensibly as a warning to other potential malefactors, but also an unconscious continuation of the geomantic practice of guardianship of entrances. Another remnant of this tradition are the carvings of small human heads in the Romanesque and Gothic periods of church a rchitecture. These guard the apertures in church walls, windows and doors. In the correct form, looking towards the door, there is a male head on the left and a female head on the right, an arrangement found in the positions of the holy guardian pillars, Jachin and Boaz, at the entrance to the Temple of Solomon, and in the position of the bridegroom and the bride at Christian weddings.

In addition to their exclusive function, gateways were often orientated to receive the beneficial rays of the sun on special days. From this practice is derived a curious usage whereby doors were used only for certain rituals, or at certain times. In astrological terms, different times have different auspices, and consequently certain guardian doors may only be effective under certain astrological conditio ns.

Originally, a particular door would only be opened on the day of the dedicatory sunrise, so that the sun's rays could enter the sanctuary and reactivate the temple's energies. As the temple had been orientated on the auspicious day, the reopening would reproduce these beneficial conditions. In East Anglia, houses built before the nineteenth century were orientated north-south, a southward-facing door being considered for some forgotten reason unlucky and never put in a building. In country districts, cottages can still be found whose front door is obviously rarely used, tradition being to use it only for weddings and funerals. Even in the Vatican, there is a certain door which is usually sealed, only being opened by the Pope every 25 years as the symbol ic and literal opening of a Holy Year. The northward-facing door in English churches was traditionally opened only during baptisms; when the Devil, who was inhabiting the unbaptized infant, left the body, he was supposed to flee through this door to the northern regions which were traditionally his abode. Once expelled through this door, there was no re-entry, as it was closed until the next baptism.

Thus what may appear to be a simple delineation of a special area for worship or habitation in reality incorporated numerous magical processes at each stage of its construction and dedication, with the intent of ensuring safety from psychic attack. The purpose of geomancy was to define and construct such areas in the best method suitable for the place.
pp53-69

Silent Coup

Silent Coup

from:
http://www.silentcoup.com/

On June 17, 1972, five men broke into the headquarters of the Democratic National Committee at the Watergate office building in Washington, D.C. That event, the circumstances that created it, and the cover-up that followed, toppled Richard M. Nixon from the presidency.

While much has been written about Richard Nixon's government and his resignation, the powerful forces behind his removal from office have never been exposed. In "Silent Coup", Len Colodny and Robert Gettlin have written an explosive new history of the fall of the president. The product of an extraordinary seven-year investigation, "Silent Coup" documents the political and personal agendas that combined to destroy Richard Nixon.

The truths unearthed by Colodny and Gettlin are shocking: They show the president at war with the government of his own making. Among many revelations in "Silent Coup" are these:

• The military spy ring, reporting to the Chairman of the Joint Chiefs of Staff, that penetrated the White House while opposing Nixon's foreign policy goals.


• The presidential aide really behind Watergate: the details of his own clandestine and unauthorized intelligence operation; how he engineered the Watergate cover-up, lied to Congress, and placed the blame on everyone but himself.


• A woman whose name in a private address book may have helped cause Nixon's downfall.


• The Watergate burglar (speaking here for the first time) who was given a special floor plan and a key to a desk that was the true target of the break-in.


• The reporter who has concealed his real military background and long-standing Pentagon and White House contacts, and how he protected them - and their motives - with the cover name "Deep Throat."


• The White House Chief of Staff to whom Nixon turned for help, but who worked mightily to conceal the military spy ring and in the end was a moving force behind the president's resignation.


• The true target of the breakin was in fact "NOT" Larry O'Brien's phone, Chairman of the DNC, but that of an escort service the Democrats set up for out of town male visitors.

"Silent Coup" contains exclusive new material gathered from hundreds of interviews, from still unreleased government documents, from the complete Oval Office logs of Nixon's presidency, and from a painstaking cross-examination of the books and testimonies of the major and minor players in the story. The result is a major revision of history, one that will forever change our understanding of how and why Richard Nixon was forced to resign his office.

Len Colodny, an investigator and political analyst, has been working on "Silent Coup" since 1984. He was a businessman, public official, campaign manager, and political consultant before beginning the investigation that produced this book. He is a member of the Society for Professional Journalists.

Robert Gettlin was a national reporter in the Newhouse Newspapers Washington Bureau. He has been involved in investigative reporting for seventeen years, covering Congress, politics, the environment, the military, national defense, NASA, and virtually every major federal agency.

Colodny lives in Tampa, Florida; Gettlin lives in Fredericksburg, Virginia.

Read he whole book online here: http://www.nixonera.com/etexts/silentcoup/contents.asp

Dick Nixon's Secret Link To The Underworld!

Dick Nixon's Secret Link To The Underworld!

From:
Behind the Scene
March 1956 Vol. 1, No 12
JB Publishing Corporation�1956
220 w 42nd St
New York, 36, NY

-----

Dick Nixon's Secret Link To The Underworld!
by Marvin Higgins

In his swift rise to the top of the' political heap, young Richard has picked up some strange companions! But none stranger than a certain Influential gentleman who pulls the strings backstage for "Tricky Dick" Nixon . . .

Sometime during the early morn-ing of December 11th, 1950, a lawyer named Samuel Rummel was blasted into eternity by a 12- gauge. shotgun in the driveway of his swank Hollywood home.

The day after lawyer Rummel was wafted to the Supreme Bench, the police got a clue.

It was a strong clue. It might have cleared up a lot of mysteries. But the cops never' got the chance to follow It up.

An attorney named Murray Chotiner made a few phone calls, talked to a few influential people and, when he was finished, the clue became a dead end.

Rummel's death and a whole story of gangland violence, illegal gambling syndicates, police corruption and vice in California ended in a blank wall.

The Man Behind Nixon

Murray Chotiner, who was instrumental in building that wall, is the right-hand man of Richard M. Nixon, Vice-President of the United. States!

And if, through the sudden death of the President, Nixon should take over the White House, the same Murray Chotiner will probably be the chief adviser to the nation's Chief Executive!

What kind of secrets did Sam Rummel take to his grave�secrets which Murray
Chotiner apparently did not want revealed?

Between 1945 and 1950, seven important figures in the West Coast underworld died violent deaths. With the exception of Bugsy Siegel, their names were not well known to the public.

They included such picturesque characters as Benny "Meatball" Gamson, Harry Hooky" Rothman and �Needle� Herbert.

All had one thing in common. In one way or another, all were involved with Mickey Cohen, Rummel's client. And Mickey Cohen, In turn, was involved with the West Coast gambling syndicate, which masqueraded under the name of the Guarantee Finance Co.

At the time of Rummel's death, however, three separate agencies were investigating the operations of Guarantee Finance.

A special-grand jury, for instance, was scheduled to open its sessions on the very morning Sam Rummel was killed. One of the questions it wanted answered was:

"What cop or cops got a $108,000 payoff from Guarantee Finance, the bookie syndicate?"

To help answer this question, the grand jury had subpoenaed Sheriff's Capt. Carl H. Pearson. But before Pearson could testify, Rurnmel�who knew where all the bodies were buried�was killed.

Meeting Ends In Death

Then came the clue the police had been waiting for.

Pearson admitted that he and Sheriff's Deputy Lawrence C. Schaffer were probably the last persons to see Sam Rummel alive!

Pearson confessed that he, Schaf-fer and Rummel had, held a conference, at the lawyer's request. Pearson said that he had brought with him, to the meeting, the complete police files on the Guarantee Finance Co.!

The meeting ended at 10:40 p.m., December 10th. And the following morning, some time around 1:30 a.m., Rummel was dead.

Pearson and Schaffer knew what had been discussed at that meeting with the gamblers' lawyer. And when they appeared before the grand jury, many things about the syndicate's op-erations were bound to come to light.

The Big Fix

Schaffer, realizing the spot he was in, picked up a phone and called Murray Chotiner. What he said will probably never be known. But Chotiner�who packs a lot of weight in California�fixed it, so that Schaffer got off the hook.

That doused any light that might have been shed on gangland violence,- the $108,000 payoff and the compli-cated operations of California's book-ies.

And the man who engineered the blackout�Murray Chotiner�is a key figure In California's Republican hierarchy. He Is the �man to see" if you want any favors from the Vice President of the United States!

Why should Murray Chotiner�who pulls the strings for Nixon�be interested in helping to cover up the workings of a giant bookie syndicate?

One clue was recently unearthed by a West Coast reporter from the files of the Superior Court of Los Angeles County.

Between 1949 and June, 1952, a single law firm represented defendants in 220 bookmaking cases in that court.

The Bookies' Friend

The name of the firm�the bookies' friend, for a price�was, of course, Chotiner & Chotiner!

The same reporter could not find a single criminal case of any other type in which Murray Chotiner's firm acted during the same period!

In other words, the professional career of a man who may one day be a White House advisor depends largely on defending illegal bookmakers!

How did this singular circumstance come to be?

Young Dick Nixon first came to Chotiner's attention in 1946, when the future Vice President first decided to throw his hat in the political arena.

Chotiner was already well established in California politics. In 1942, he had been campaign manager for Gov. Earl Warren. Two years later, he got himself elected president of the state's Republican assembly.

And in 1946, at the very time Nixon came to see him, Chotiner was, directing the campaign of another rising California Republican�Sen. William S. Knowland, now GOP leader in the Senate.

A Campaign Gimmick

Chotiner is a shrewd lawyer and a shrewder politician. He looked Nixon over and weighed the odds. The election of this political newcomer was not going to be easy.

Nixon had picked himself a whopper for his first battle. He was running for Congress against a veteran campaigner, the Democratic incumbent, Jerry Voorhis.

Also, Chotiner decided, Nixon had other odds against him. He lacked campaign funds, an organization and an issue. Most of all, he needed a smart handler.

And, in the estimation of Murray Chotiner and of less-interested observers, Chotiner is among the smartest.

The lawyer had already worked out what looked like a perfect campaign gimmick for Knowland. There was no reason, he decided, why it wouldn't work for Nixon as well.

Smear Target

So, with Murray Chotiner doing the tailoring And, fitting, Richard Nixon donned the shining white armor of an anti-Communist crusader. And with slight alterations by the master, as occasion demanded, the armor carried him through Congress and the Senate all the way to the nation's second-highest job.

Possibly from his bookie clients, Chotiner had learned never to give a sucker�in this case the voters�an even break. He had discovered, long before other political manipulators, how effective it was to smear the opposition with a Red brush.

Chotiner did it much more efficiently than his later imitators ever, dared hope for. He got the opposition Democrats to smear their own candidate!

In 1946, Knowland had an especially tough opponent, former Rep. Will Rogers, Jr., son of the late humorist and very popular in Southern California in his own right. But the People's World, a pro-Communist daily, had once boasted publicly that�long before�Rogers had made a contribution to its fund drive.

Chotiner took the Reds' word for it. He also "arranged" to get the information to the State Democratic committee. The news raised hell among the Democrats, tearing them into two camps.

And for the rest of the campaign, Will Rogers, Jr.�who had amply demonstrated his patriotism by resigning from Congress to join the army during World War II�had to carry on without the organized support of his own party.

Knowland, of course, was a shoo-in. And with Chotiner employing similar tactics, Nixon, too, went to Washington.

Murray Chotiner�mouthpiece of the bookies�was on his way to the big time!

The GOP Overruled

Chotiner appointed a good friend and fellow-lawyer, Dave Cannon, to the key job of chairman of the lawyer's committee for Knowland.

The only trouble with Dave Cannon was that�like Chotiner�he was a bookies� attorney, having been the chief counsel for the aforementioned Guarantee Finance Co.

To be precise, Cannon had defended certain officials of the syndicate, when they were finally brought to book before the bar. His clients were convicted. But Cannon's work had apparently been satisfactory, he got Chotiner's nod.

California Republican bigwigs blew their stacks about Cannon's appointment�but he stayed.

Chotiner convinced the GOP bosses that Cannon was harmless. And what was even better, the illicit gambling crowd on the Coast could do much�in a quiet way�to swing votes in the right direction.

Chotiner's sucqess in getting Nixon the Vice Presidential nomination was his biggest coup and a masterpiece of slick maneuvering in a, field where candidates are usually the result of cut-and-dried deals in smoke-filled rooms.

Wanted � A Veep

The battle between Dwight Eisenhower and the late Sen. Robert A. Taft occupied the attention and talents of the politicians during the 1952 GOP convention. Only after that issue was settled did they start looking around for a suitable running mate for Ike.

It was the President himself who revealed that he was only indirectly involved in picking the No. 2 man on the Republican slate.

Eisenhower was asked point-blank at a recent news conference if Richard Nixon was "your personal selection?"

The President candidly admitted that he was a novice in politics at the time, "And so I wrote down the names of five, or maybe it was six, men, younger men that I admired, that seemed to me to have made a name for themselves.

"And I said, 'Any of these will be acceptable to me,' and he [Nixon] was on the list."

But how Nixon got on the list and how every other rival was eliminated during a three-hour parley among 30 GOP big-wigs is a sort of left-handed tribute to the ability of Murray Chotiner, master puppeteer.

During the top-level huddle at Ike' headquarters on the 11th floor of Chicago's Conrad Hilton Hotel, it was finally agreed that the Vice Presidential candidate must come from the West. Only Nixon and Knowland filled the bill.

In the end, it was Nixon who got the nod. Chotiner's behind-the-scene string pulling had paid off, but it also led to what was perhaps the biggest challenge in his career of backstage machinations.

That was when the press uncovered that nasty business about a $16,000 private slush fund, raised by certain real estate and business Interests to cover Nixon's senatorial "campaign expenses."

TV Soap Opera

Nixon's opponents dug up his Senate voting record. Many of his; votes on important domestic bills could be viewed as benefiting the interests of the contributors to his secret campaign fund.

There was an understandable public demand that Nixon tell what had been done with the money, since it had not been listed among regular campaign contributions as required by law.

Murray Chotiner outdid himself. Faced with a tidal wave of questions which the GOP, couldn't afford to ignore, the bookies' lawyer became a dramatic impresario.

"We'll give 'em a soap opera," he decided. And that was just what he did.

It was Chotiner who was instrumental in dreaming up the script for the famous television appearance of "Poor Richard" Nixon, in which the clean-cut boy wonder confessed that his wife Pat didn't even have a mink cost.

It was Chotiner who saw the dramatic possibilities in the Nixon dog, Checkers, and made the poor beast the most famous pooch in the country. (Although nobody could ever figure out what Checkers had to do with the $16,000).

In short, it was the sophisticated Chotiner who cast the Vice Presidential candidate in the role of Rube, the barefoot farmboy�pulling a TV rabbit out of a hat and Nixon out of a hole.

The opposition mollified Chotiner then turned to dangers in Nixon's own camp.

McCarthy Out-Maneuvered


A lot of people had been borrowing Chotiner's anti-Commie technique to get themselves elected. And several of these were threatening to wrest the title of No. 1 Red-hunter from Chotiner's boy, Nixon.

One of these, of course, was Joe McCarthy. Chotiner took care of him by advising Nixon to play an on-again, off-again game during the 1952 race.

Nixon proclaimed at first that he would support all GOP candidates everywhere. Then he decided�with an eye on the Wisconsin Whirlwind�that maybe he wouldn't support all of them.

Then Nixon switched again. And again. And again, until not even McCarthy�much less his constituents�knew whether he had the backing of the No. 2 man on the GOP ticket.

In California, too, a lightweight Commie-hunter was making a strong bid for the middleweight title. That�in Chotiner's mind�represented a distinct threat to his own champ, Nixon.

Rivals Eliminated

So, although State Sen. Jack Tenney was also a Republican, Chotiner set out to blast him from the ring.

Tenney entered the GOP congressional primary on his record as chairman of the state legislature's unAmerican activities committee. Running against him was Joseph E. Holt, son of one of the men who had kicked in to the $16,000 Nixon fund.

Although already burdened with running the Knowland and Nixon campaigns, Chotiner also became the mastermind behind Holt's primary race. Against that kind of behind-the-scenes maneuvering, Tenney didn't stand a chance. When the ballots were in, he was just another former Commie-chaser.

But Chotiner�who has had no trouble defending bookies against the law and "natural" candidates against flyweights�is facing the biggest job of his. String-pulling career in 1956.

When the GOP national convention opens in San Francisco next year, California's 70-vote delegation will be headed by Gov. Goodwin J. Knight. That means trouble for Nixon�and Chotiner.

Goody Knight and the boy Vice President have been rivals in California Republican circles for a long time. And there are many who say Knight is against Nixon only because Chotiner is for him.

Nixon vs. Ike?

In any case, the governor has made no secret of his feud with the Vice-President. Not too long ago, Knight was invited to attend a luncheon honoring Nixon. Instead, he very pointedly appeared at a teamsters' union affair held at the same time.

Adding insult to injury, the Nixon luncheon was snubbed also by the lieutenant governor and the whole state Republican committee.

When the convention rolls around, Goody Knight can make lots of trouble for Chotiner's man.

With the approach of 1956, Nixon�probably on Chotiner's advice�has been feeling his Vice Presidential oats. He has gone so far as to challenge President Ike Eisenhower himself.

When Ike returned from the Big Four meeting in Geneva, for instance, he and all the brass that met him at the airport got a thorough soaking in a summer downpour.

The reason was that Nixon had ordered all umbrellas confiscated from the greeting party�because, he said, umbrellas might be taken as a, symbol of appeasement, harking back to the famous rolled umbrella of Neville Chamberlain when he returned from the Munich conference in 1938!

Another Rabbit Trick?

Washington circles were astounded at this obvious crack by Nixon. It seemed to have occurred to nobody but the Vice President that umbrellas would have any significance. And many felt that it was Nixon himself�or was it the ubiquitous�Chotiner?�who wanted by this stratagem to connect Eisenhower with appeasement in the public mind.

Ike, to be sure, didn't miss the point, either.

The unexpected illness of Eisenhower knocked the Republican Party's plans into a cocked hat. Even from this distance, politicos see the GOP convention as a free-for-all.

For at the same time as they deplore the 'calamity that befell Ike, Republican hopefuls are springing up all over the country.

If Eisenhower should decide not to run, the GOP convention certainly will turn into a free-for-all.

But Nixon�who reportedly wants the Presidency so bad he can taste it�will have a tough job cornering California's 70 votes, controlled by Goody Knight.

It's not even certain that Murray Chotiner could help him, since the bookie bloc does not yet control the California GOP delegation.

Still, Murray Chotiner has pulled a lot of rabbits out of his hat,

He was instrumental in squelching an important probe into California's underworld, a probe, which conceivably could have ruined some big political people, including the legal voice of the bookies himself.

And if anyone can squeeze Nixon in the Presidential race, that man is Murray Chotiner.

From there on in, it's tip to the people. And if the vote should go to Richard Nixon, you can be sure that Murray Chotiner�mouthpiece for gamblers�will be around the White House, running things for the Chief.

pps.14,15, 62-66
-----
Aloha, He'Ping,
Om, Shalom, Salaam.
Em Hotep, Peace Be,
All My Relations.
Omnia Bona Bonis,
Adieu, Adios, Aloha.
Amen.
Roads End

Smack

Smack

an excerpt from:
Smack
Editors of RAMPARTS Magazine and Frank Browning
Noah's Ark, Inc�1972
Harrow Books
Harper & Row
LCCN 75-187046
212 pps. - First Edition - Out-of-print
-----

1.
The CIA and the New Opium War

by Frank Browning and
Banning Garrett

Banning Garrett is Asian editor for Ramparts magazine; Frank Browning is an associate editor of Ramparts. Reprinted from Ramparts (May 1971). Researchers for the report were Michael Aldrich, Adam Bennion, and Joan Medlin. Special thanks go to author Peter Scott for permission to draw on unpublished material regarding Laos and the China Lobby.

"Mr. President, the specter of heroin addiction is haunting nearly every community in the nation." With these urgent words, Senator Vance Hartke spoke up on March 2, 1971, in support of a resolution on drug control being considered in the U.S. Senate. Estimating that there are 500,000 heroin addicts in the U.S., he pointed out that nearly 20 percent of them are teen-agers. The concern of Hartke and others is not misplaced. Heroin has become the major killer of young people between eighteen and thirty-five, outpacing death from accidents, suicides, or cancer. It has also become a major cause of crime: to sustain their habits, addicts in the U.S. spend more than $15 million a day, half of it coming from the 55 percent of crime in the cities which they commit and the annual $2.5 billion worth of goods they steal.

Once safely isolated as part of the destructive funkiness of the black ghetto, heroin has suddenly spread out into Middle America, becoming as much a part of suburbia as the Saturday barbecue. This has gained it the attention it otherwise never would have had. President Nixon himself says it is spreading with "pandemic virulence." People are becoming: aware that teen-agers are shooting up at lunchtime in schools and returning to classrooms to nod the day away. But what they don't know�and what no one is telling them�is that neither the volcanic eruption of addiction in this country nor the crimes it causes would be possible without the age-old international trade in opium (from which heroin is derived), or that heroin addiction�like inflation, unemployment and most of the other chaotic forces in American society today�is directly related to the U.S. war in Indochina.

The connection between war and opium in Asia is as old as empire itself. But the relationship has never been so symbiotic, so intricate in its networks, and so vast in its implications. Never before has the trail of tragedy been so clearly marked as in the present phase of U.S. involvement in Southeast Asia. For the international traffic in opium has expanded in lock step, with the expanding U.S. military presence there, just as heroin has stalked the same young people in U.S. high schools who will also be called on to fight that war. The ironies that have accompanied the war in Vietnam since its onset are more poignant than before. At the very moment that public officials are wringing their hands over the heroin problem, Washington's own Cold War crusade, replete with clandestine activities that would seem far-fetched even in a spy novel, continues to play a major role in a process that has already rerouted the opium traffic from the Middle East to Southeast Asia and is every day opening new channels for its shipment to the U.S. At the same time the government starts crash programs to rehabilitate drug users among its young people, the young soldiers it is sending to Vietnam are getting booked and dying of overdoses at the rate of one a day. While the President is declaring war on narcotics and on crime in the streets, be is widening the war in Laos, whose principal product is opium and which has now become the funnel for nearly half the world's supply of the narcotic, for which the U.S. is the chief consumer.

There would have been a bloodthirsty logic behind the expansion of the war into Laos if the thrust bad been to seize supply centers of opium the Communists were hoarding up to spread like a deadly virus into the free world. But the Communists did not control the opium there: processing and distribution were already in the hands of the free world. Who are the principals of this new opium war? The ubiquitous CIA, whose role in getting the U.S. into Vietnam is well known but whose pivotal position in the opium trade is not; and a rogues' gallery of organizations and people-from an opium army subsidized by the Nationalist Chinese to such familiar names as Madame Nhu and Vice President Nguyen Cao Ky�who are the creations of U.S. policy in that part of the world.

The story of opium in Southeast Asia is a strange one at every turn. But the conclusion is known in advance: this war has come home again�in a silky gray powder that goes from a syringe into America's mainline.

Most of the opium in Southeast Asia is grown in a region known as the Fertile Triangle, an area covering northwestern Burma, northern Thailand, and Laos. It is a mountainous jungle inhabited by tigers, elephants, and some of the most poisonous snakes in the world. The source of the opium that shares the area with these exotic animals is the poppy, and the main growers are the Meo hill tribes-people who inhabit the region. The Meo men chop back the forests in the wet season so that the crop can be planted in August and September. Poppies produce red, white, or purple blossoms between January and March, and when the blossom withers, an egg-sized pod is left. The women harvest the crop and make a small incision in the pod with a three-bladed knife. The pod exudes a white latex-like substance, which is left to accumulate and thicken for a day or two. Then it is carefully gathered, boiled to remove gross impurities, and the sticky substance is rolled into balls weighing several pounds. A fraction of the opium remains to be smoked by the villagers, but most is sold in nearby rendezvous with the local smugglers. It is the Meos' only cash crop. The hill tribe growers can collect as much as $50 per kilo, paid in gold, silver, various commodities, or local currency. The same kilo will bring $200 in Saigon and $2,000 in San Francisco.

There are hundreds of routes, and certainly as many methods of transport by which the smugglers ship opium-some of it already refined into heroin -through and out of Southeast Asia. But there are three major networks. Some of the opium from Burma and northern Thailand moves into Bangkok, then to Singapore and Hong Kong, then via military aircraft, either directly or through Taiwan, to the United States. The second, and probably major, route is from Burma or Laos to Saigon or to ocean drops in the Gulf of Siam; then it goes either through the Middle East and Marseilles to the U.S. or through Hong Kong and Singapore to the West Coast. A final route runs directly from outposts held by Nationalist Chinese troops in Thailand to Taiwan and then to the U.S. by a variety of means.

One of the most successful of the opium entrepreneurs who travel these routes, a Time, reporter wrote in 1967, is Chan Chi-foo, a half-Chinese, half-Shan (Burmese) modern-day warlord who might have stepped out of a Joseph Conrad adventure yam. Chan is a soft-spoken, mild-mannered man in his late thirties who, it is said, is totally ruthless. He has tremendous knowledge of the geography and people of northwestern Burma and is said to move easily among them, conversing in several dialects. Yet be is also able to deal comfortably with the bankers and other businessmen who finance his operations from such centers as Bangkok and Vientiane. Under Chan Chi-foo's command are from 1,000 to 2,000 well-armed men, with the feudal hierarchy spreading down to encompass another 3,000 hill tribesmen, porters, hunters, and opium growers who pay him fealty and whom he regards about the same as the more than 500 small mules he uses for transport.

Moving the, opium from Burma to Thailand or Laos is a big and dangerous operation. One of Chan's caravans, says one awe-struck observer, may stretch in single file for well over a mile, and may include 200 mules, 200 porters, 200 cooks and camp attendants, and about 400 armed guards. Such a caravan can easily carry 15 to 20 tons of-opium, worth nearly a million dollars when delivered to syndicate men in Laos or Thailand.

To get his caravans to market, however, Chan must pay a price, for the crucial part of his route is heavily patrolled not by Thais or Laotians but by nomadic Nationalist Chinese or Kuomintang (KMT) troops. Still supported by the ruling KMT on Taiwan, Generalissimo Chiang Kai-shek�s 93d Division controls a major part of the opium flowing out of Burma and Thailand. Roving bands of mercenary bandits, they fled to northern Burma in 1949 as Chiang's armies were being routed on the Chinese mainland, and have maintained themselves since by buying opium from the nearby Meo tribesmen which they then resell, or by exacting tribute payments from entrepreneurs like Chan Chi-foo. As travelers to the area attest, these troops also supplement their income by running Intelligence operations into China and Burma for the US.

The Burmese government regularly complained about all this activity to the United Nations, the Taiwan government, and the United States, charging the Americans and Taiwanese with actively supplying and supporting the KMT, which in turn has organized antigovernment guerrillas. In 1959 Burmese ground troops seized three opium-processing plants set up by the KMT guerrillas at Wanton; the troops also took an airstrip the Chinese had used to fly in reinforcements. By February 1961 the Burmese had pushed the KMT troops southeast into the Thai-Burmese and Thai-Laotian border areas, where they now hold at least eight village bases. Just last year a reporter was at Chieng Mai, Thailand, saw Thai troops and American advisers as well as military supplies provided by the Taiwan government. The Taiwan government, he noted, maintains an information office there and regularly accompanies the KMT troops on their forays into China to proselytize among the peasants of Yunnan province, These sorties are coordinated by the CIA (which is feverishly active if not wholly successful in this area), and the United States even provides its own backwater R&R for the weary KMT, flying its helicopters from hilltop to hilltop to pick up the Chinese (and the Establishment reporter who supplied this information) for organized basketball tournaments.

Although the KMT troops are often referred to as "remnants," they are not just debris left behind by history. They are in fact an important link in American and Taiwan policy toward Communist China. Not only does Chiang Kai-shek maintain direct contact with his old 93d., but fresh recruits are frequently sent to maintain a troop level of from 5,000 to 7,000 men, according to a top-ranking foreign aid official in the U.S. government. And, as the New York Times has noted, Chiang Kai-shek's son, Chiang Ching-Kuo, is widely believed to be in charge of the KMT operations from his position as chief of the Taiwan secret police.

The KMT are tolerated by the Thais for several reasons: they have helped in the counterinsurgency efforts of the Thai and U.S. governments against the bill tribes people in Thailand; they have aided the training and recruiting of Burmese guerrilla armies for the CIA; and they offer a payoff to the Border Patrol Police (BPP), and through them to the second most powerful man in Thailand, Minister of the Interior General Prapasx Charusathira. The BPP were trained in the fifties by the CIA and now are financed and advised by AID and are flown from border village to border village by Air America. The BPP act as middlemen in the opium trade between the KMT in the remote regions of Thailand and the Chinese merchants of Bangkok. These relationships, of course, are flexible and changing, with each group wanting to maximize profits and minimize antagonisms and dangers. But the established routes vary, and sometimes double crosses are intentional.

In the summer of 1967 Chan Chi-foo set out from Burma through the KMT`s territory with 300 men and 200 packhorses carrying nine tons of opium, with no intention of paying the usual fee of $80,000 protection money. But troops cut off the group near the Laotian village of Ban Houei Sai in an ambush that turned into a pitched battle. Neither group, however, bad counted on the involvement of the kingpin of the area's opium trade: the CIA-backed Royal Lao government army and air force, under the command of General Ouane Rathikoune. Hearing of the skirmish, the general pulled his armed forces out of the Plain of jars in northeastern Laos, where they were supposed to be fighting the Pathet Lao guerrillas, and engaged two companies and his entire air force in a battle of extermination against both sides. The result was nearly. 30 KMT and Burmese dead and a half-ton windfall of opium for the Royal Lao government

In a moment of revealing frankness shortly after the battle, General Rathikoune, far from denying the role that opium bad played, told several reporters that the opium trade was "not bad for Laos." The trade provides cash income for the Meo hill tribes, be argued, who would otherwise be penniless and therefore a threat to Laos' political stability. He also argued that the trade gives the Lao elite (which includes government officials) a chance to accumulate capital to ultimately invest in legitimate enterprises, thus building up Laos' economy. But if these rationalizations seemed weak, far less convincing was the General's assertion that, since he is in total control of the trade now, when the time comes to put an end to it he will simply put an end to it.

It is unlikely that Rathikoune, one of the chief warlords of the opium dynasty, will decide to end the trade soon. Right outside the village of Ban Houei Sai, hidden in the jungle, are several of his refineries�called "cookers"�which manufacture crude morphine (which is refined into heroin at a later transport point) under the supervision of professional pharmacists imported from Bangkok. Rathikoune also has "cookers" in the nearby villages of Ban Khwan, Phan Phung, and Ban Kheung (the latter for opium grown by the Yao tribe). Most of the opium be procures comes from Burma in caravans such as Chan Chi-foo's; the rest comes from Thailand or from the hill tribes people (Meo and Yao) in the area near Ban Houei Sai. Rathikoune flies the dope from the Ban Houei Sai area to Luang Prabang, the Royalist capital, in helicopters given by the United States military aid program.

Others in the Lao elite and government own refineries. There are cookers for heroin in Vientiane, two blocks from the king's residence; near Luang Prabang, on Khong Island in the Mekong River on the Lao-Cambodian border; and one recently built by Kouprasith Abhay (bead of the military region around Vientiane, but also from the powerful Abbay family of Khong Island) at Phou Khao Khouai, just north of Vientiane. Other Lords of the Trade are Prince Boun Oum of Southern Laos, and the San. Anikone family, called the "Rockefellers of Laos." Phoui Sananikone, the clan patriarch, beaded a U.S, backed coup in 1959 and is presently president of the National Assembly. Two other Sananikones are deputies in the Assembly, two are generals (one is chief of staff for Rathikoune), one is minister of public works, and a host of others are to be found at lower levels of the political, military, and civil service structure. And the Sananikones' airline, Veha Akhat, leases planes and pilots from Taiwan for paramilitary operations which lend themselves easily to commerce with opium-growing tribes people. But the opium trade is popular with the rest of the elite, who rent RLG aircraft or create fly-by-night airlines (such as Laos Air Charter or Lao United Airlines) to do their own direct dealing.

Control of the opium trade has not always been in the hands of the Lao elite, although the U.S. has been at least peripherally involved in who the beneficiaries were since John Foster Dulles' famous 1954 commitment to maintain an anti-Communist Laos. The major source of the opium in Laos has always been the Meo growers, who were selected by the CIA as its counterinsurgency bulwark against the Pathet Lao guerrillas. The Meos' mountain bastion is Long Cheng, a secret base 80 miles northeast of Vientiane, built by the CIA during the 1962 Geneva Accords period. By 1964 Long Cheng's population was nearly 50,000, comprised largely of refugees who had come to escape the war and who were kept busy growing poppies in the hills surrounding the base.

The secrecy surrounding Long Cheng has bidden the trade from reporters. But security has not been complete: Carl Strock reported in, the January 30, 1971, Far Eastern Economic Review.

Over the years eight journalists, including myself, have slipped into Long Cheng and have seen American crews loading T-28 bombers while armed CIA agents chatted with uniformed Thai soldiers and piles of raw opium stood for sale in the market (a kilo for $52). It's old hat by now, but Long Cheng is still so secret that in the past year both the U.S. embassy press attach� and the director of USAID's training center were denied clearance to visit the mountain redoubt.

The CIA not only protects the opium in Long Cheng and various other pickup points, but also gives clearance and protection to opium-laden aircraft flying out.

For some time, the primary middlemen in the opium traffic bad been elements of the Corsican Mafia, identified in a 1966 United Nations report as a pivotal organization in the flow of narcotics. In a part of the world where transportation is a major problem and where air transport is a solution, the Corsicans were able -to parlay their vintage World

War II airplanes (called "the butterfly fleet" or, according to "Pop" Buell, U.S. citizen-at-large in the area, "Air Opium") into a position of control. But as the Laotian civil war intensified in the period following 1963, it became increasingly difficult for the Corsicans to operate, and the Meos started to have trouble getting their crop out of the hills in safety.

The vacuum that was created was quickly filled by the Royal Lao Air Force, which began to use helicopters and planes donated by the U.S. not only for fighting the Pathet Lao but also for flying opium out from airstrips pock-marking the Laotian hills. This arrangement was politically more advantageous than prior ones, for it consolidated the interests of all the anti-Communist parties. The enfranchisement of the Lao elite gave it more of an incentive to carry on the war Dulles had committed the U.S. to back, the safe transport of the Meos' opium by an ideologically sanctioned network increased the incentive of these CIA-equipped and CIA-trained tribesmen to fight the Pathet Lao. The U.S. got parties that would cooperate with its foreign policy not only for political reasons, but on more solid economic grounds. Opium was the economic cement binding all the parties together much more closely than anti-Communism could.

As this relationship has matured, Long Cheng has become a major collection point for opium grown in Laos. CIA protege General Vang Pao, former officer for the French colonial army and now head of the Meo counterinsurgents, uses his U.S.-supplied helicopters and STOL (short-take-off-and-landing) aircraft to collect the opium from the surrounding area. It is unloaded and stored in hutches in Long Cheng. Some of it is sold there and flown out in Royal Laotian government C-47's to Saigon or the Gulf of Siam or the South China Sea, where it is dropped to waiting fishing boats. Some of the opium is flown to Vientiane, where it is sold to Chinese merchants who then fly it to Saigon or to the ocean drops. One of Vang Pao's main sources of transport, since the RLG Air Force is not under his control, is the CIA-created Meng Khouang Airline, which is still supervised by an American, though it is scheduled soon to be tamed over completely to Vang Pao's men. The airline's two C-47's (which can carry a maximum of 4,000 pounds) are used only for transport to Vientiane.

Prior to Nixon's blitzkrieg in Laos, the opium trade was booming. Production bad grown rapidly since the early fifties to a level of 175-200 tons a year, with 400 of the 600 tons produced in Burma, and 50-100 tons of that grown in Thailand, passing through Laotian territory. But if the opium has been an El Dorado for the Corsicans, the Lao elite, the CIA, and others, it has been a nemesis for the Meo tribesmen. For in becoming a pawn in the larger strategy of the U.S., the Meos have seen the army virtually wiped out, with the average age of recruits now fifteen years, and their population reduced from 400,000 to 200,000. The Meos' reward for CIA service, in other words, has been their destruction as a people.

Both the complexity and the finality of the opium web which connects Burma, Thailand, Laos, and South Vietnam stretch the imagination. So bizarre is the opium network and so pervasive the traffic that were it to appear in an Ian Fleming plot we would pass it off as torturing the credibility of thriller fiction. But the trade is real, and the net has entangled governments beyond the steaming jungle of Indochina. In 1962, for instance, an opium-smuggling scandal stunned the entire Canadian Parliament. It was in March of that year that Prime Minister Diefenbaker confirmed rumors that nine Canadian members of the immaculate United Nations International Control Commission bad been caught carrying opium from Vientiane to the international markets in Saigon on UN planes.

The route from Laos to Saigon has long been one of the well-established trails of the heroin-opium trade. In August 1967, a C-47 transport plane carrying two and a half tons of opium and some gold was forced down near Da Lat, South Vietnam, by American gunners when the pilot failed to identify himself. The plane and its precious cargo, reportedly owned by General Rathikoune's wife, were destined for a Chinese opium merchant and piloted by a former KMT pilot, L. G. Chao. Whatever their ownership, the dope-running planes usually land at Tan Son Nhut airbase, where they are met in a remote part of the airport with the protection of the airport police.

A considerable part of the opium and heroin remains in Saigon, where it is sold directly to U.S. troops or distributed to U.S. bases throughout the Vietnamese countryside. One G.I. who returned to the states an addict was August Schultz. He's off the needle now, but how he got on is most revealing. Explaining that he was "completely straight, even a right-winger" before he went into the Army, August told Ramparts how be fell into the heroin trap: "It was a regular day last April [1970] and I just walked into this bunker and there were these two guys shooting up. I said to them, 'What you guys doing?' Believe it or not I really didn't know. They explained it to me and asked me if I wanted to try it. I said sure."

Probably a fifth of the men in his unit have at least tried junk, August says. But the big thing, as his buddy Ronnie McSheffrey adds, was that most of the officers in his company�including the MP's�knew about it. McSheffrey saw MP's in his own division (6th Battalion, 31st Infantry, 9th Division) at Tan An shoot up, just as he says they saw him. He and his buddies even watched the unit's sergeant major receive payoffs at a nearby whorehouse where every kind of drug imaginable was available.

An article by Kansas City newspaperwoman Gloria Emerson inserted into the Congressional Record by Senator Stuart Symington on March 10, 1971, said:

In a brigade headquarters at Long Binh, there were reports that heroin use in the unit had risen to 20 percent . . . . .. You can salute an officer with your right hand and take a 'hit' [of heroin] in your left," an enlisted man from New York told me . . .. Along the 15-mile Bien Hoa highway running north to Saigon from Long Binh, heroin can be purchased at any of a dozen conspicuous places within a few minutes, and was by this reporter, for three dollars a vial.

Adding glamour to the labyrinthine intrigue of Vietnam's opium trade throughout the late 1950's and early 1960's was the famous Madame Nhu, the Dragon Lady of Saigon. Madame Nhu was in a position to be very likely coordinator for the entire domestic opium traffic in Vietnam; yet so great is the power she still wields from her palatial exile in Paris that she has intimidated one American publisher and kept him from publishing the story. In his book Mr. Pop, Don Schancbe, former editor of Horizon and former managing editor of the Saturday Evening Post, recounts the following interchange on the Plain of jars during August 1960 between Edgar "Pop" Buell�the Indiana farmer who left his home to work with the Meo tribes people�and a local restaurateur:

�Buell drove with Albert [Foure] to Phong Savan and watched from the side of the airstrip as a modem twin-engined plane took on a huge load of opium. Beneath the wing, talking heatedly with the plane's Corsican pilot, was a slender woman dressed in long white silk pants and ao d'ai, the side-slit, high-necked gown of Vietnam. Her body was exquisitely formed, and her darkly beautiful face wore a clear expression of authority. Even Buell could see that she was Vietnamese, not Lao,

"Zat," said Foure, "is ze grande madame of opium from Saigon." Edgar never learned her name, but he recognized the unforgettable face and figure when the picture of an important South Vietnamese politician appeared months later in an American news magazine.

Though Schanche's publisher, David McKay Co., refused to publish her name for fear of reprisals, the unforgettable face was that of Madame Nhu.

But Saigon's opium trade is not new. Its history stretches back to 1949, when the French appointed former Vietnamese Emperor Bao Dai as chief of state. Bao Dai brought with him as chief of police Bay Vien, the undisputed leader of Saigon's criminal underground, which controlled not only the gambling and narcotics trade in Saigon but also, the important Chinese suburb of Cholon. Bao Dai and Bay Vien held power until they were displaced after the 1954 Geneva Accords by Ngo Dinh Nhu, Diem's brother. Nhu had gained prominence in Vietnam as an organizer of a Catholic trade union movement modeled after the French Force Ouvriere, which the CIA bad helped supply in the 1940's to break France's Communist dockworkers' union, the CGT.

At first Nhu feigned support for Bay Vien and Bao Dai, but by the end of 1955 be bad taken control of the Saigon secret police and�thereby�the city's opium and heroin trade as well. Just as the Nhus were consolidating their own power, a little-known figure entered the Diem military apparatus�a man who through the years would carefully extend his control over the air force and end up eventually heir not only to the South Vietnamese government but to the opium and heroin trade as well. That man was Nguyen Cao Ky, who bad just returned from Algeria to take charge of the South Vietnamese air transport's C-47 cargo planes.

At what particular point in time Ky became involved with the Nhus in the opium trade is not known, but by the end of the fifties be was cutting quite a figure in Saigon's elite circles. In an interview with Ramparts, retired Marine Corps colonel (and author of the book The Betrayal) William Corson described Ky's life in the late 1950's in the following fashion:

Ky of course was a colonel in the Air Force back then and he used to have these glittering cocktail parties at the top of the Caravelle [Hotel) in Saigon. He laid out a fantastic spread-which was all very interesting because the amount of money be made as a soldier was maybe $25 to $30 a month and he didn't have any other outside income.

The first real light shed on the possible sources of Ky's extracurricular income came only in the spring of 1968, when Senator Ernest Gruening revealed that four years earlier Ky had been in the employ of the CIA's "Operation Haylift," a program which flew South Vietnamese agents "into North Vietnam for the purpose of sabotage, such as blowing up railroads, bridges, etc:' More important Ky was fired, Gruening's sources claimed, for having been caught smuggling opium from Laos back into -Saigon. Significantly, Ky and his flight crews were replaced by Nationalist Chinese Air Force pilots.

Neither the CIA, the Pentagon, nor the State Department ever denied Ky worked on Operation Haylift. Nor did they deny that be bad smuggled opium back into Saigon. However, a U.S. embassy spokesman categorically denied Ky was ever fired from "any position by any element of the U.S. Government for opium smuggling or for any other reason." When Ky came to power in February 1965, most observers supposed he bad relinquished participation in the opium traffic (although it was "common knowledge" that Madame Ky had replaced Madame Nhu as Saigon's Dragon Lady and dealt in opium directly with Prince Boun Oum in Southern Laos). However, a high Saigon military official to whom Ky at one time offered a place in the opium traffic says Ky continued to carry loads ranging from 2,000 to 3,000 kilos of opium from Pleiku to Saigon in the spring of 1965 after he had assumed power and after Operation Haylift had been discontinued. Those runs included regular pickups near Dak To, Kon Turn, and Pleiku. Since then -there has been no indication that Ky has in any way altered the transport. Corson, who returned to Vietnam in 1965, observed that Ky's involvement in the trade bad become so routine that it had lost almost all its adventure and intrigue.

With gross returns from the Indochinese traffic running anywhere from $250 million to $500 million per year, opium is one of the kingpins of Southeast Asian commerce. Indochina has not always bad such an enviable position. Historically most of the world's supply of opium and heroin came through well-established routes from Turkey, Iran, and China. Then it was refined in chemical kitchens and warehouse factories in Marseilles. The Mediterranean trade was controlled by the Corsican Mafia (which itself has long been related to such American crime lords as Lucky Luciano, who funneled a certain amount of dope into the black ghettos). But high officials in the narcotics control division of the Canadian government, and in Interpol, the International Police Agency, confirm that since World War II�and paralleling the U.S. expansion in the Pacific-there has been a major redirection in the sources and routing of the world-wide opium traffic.

According to the United Nations Commission on Drugs and Narcotics, since at least 1966, 80 percent of the world's 1,200 tons of illicit opium has come from Southeast Asia-directly contradicting most official U.S. claims that the primary sources are Middle Eastern. In 1966 Interpol's former secretary general Jean Nepote told investigators from Arthur D. Little Research Institute (then under contract to the U.S. Government Crime Commission) that the Fertile Triangle was a principal production center of opium. And last year an Iranian government official told a United Nations seminar on narcotics control that 83 percent of the world's illegal supply originated in the Fertile Triangle-the area where opium is controlled by the U.S.-supplied troops of Laos and Nationalist China.

It is odd that the U.S. government with the most massive Intelligence apparatus in history could miss this innovation. But though it may seem to be an amazing oversight, what has happened is that Richard Nixon and the makers of America's Asian policy have completely blanked Indochina out of the world narcotics trade. Not even Joe Stalin's removal of Trotsky from the Russian history books parallels this historical reconstruction. In his recent State of the World address, Richard Nixon dealt directly with the international narcotics traffic. "Narcotics addiction has been spreading with pandemic virulence," he said, adding that "this affliction is spreading rapidly and without the slightest respect for national boundaries." What is needed is "an integrated attack on the demand for [narcotics], the supply of them, and their movement across international borders . . .. We have," he says, "worked closely with a large number of governments, particularly Turkey, France, and Mexico, to try to stop the illicit production and smuggling of narcotics" (italics-added).

It is no 'accident that Nixon has ignored the real sources of narcotics trade abroad and by so doing has effectively precluded any possibility of being able to deal with heroin at home. It is he more than anyone else who has underwritten that trade through the policies he has formulated, the alliances he has forged, and most recently the political appointments he has made. For Richard Nixon's rise to power has been intricately interwoven with the rise of proponents of America's aggressive strategy in Asia, a group of people loosely called the China Lobby who have been in or near political power off and on since 1950.

Among the most notable members of the China Lobby are Madame Anna Chennault, whose husband, General Claire Chennault, founded Air America; columnist Joe Alsop; FBI Director J. Edgar Hoover, former California Senator William Knowland, and Ray Cline, currently Chief of Intelligence for the State Department. They and such compatriots as the late Time magazine publisher Henry Luce and his widow, Congresswoman Claire Boothe Luce, have been some of the country's strongest proponents of the Nationalist Chinese cause.

In 1954 Chiang Kai-shek formed the Asian People's Anti-Communist League (APACL), which was to become one of the vital links between the China Lobby and the Taiwan government. (It was also *in that year that Nixon urged that U.S. troops be sent into Indochina following the French defeat in Dien Bien Phu�a. proposal which failed because of the lack of public support for such policy following the Korean War.) As soon as the APACL was formed, Chiang announced that it had established "close contact" with three American politicians-the most important of whom was Vice President Richard Nixon.

Over the years the China Lobby has continued to spring to Nixon's support. It was Madame Chennault, co-chairman in 1968 of Women for Nixon-Agnew Advisory Committee, who helped raise a quarter of a million dollars for the campaign; it was she who just before the election entered into an elaborate set of arrangements to sabotage a White House peace plan. Within 30 hours of the announced plan, South Vietnam President Thieu rejected the new negotiations it proposed�a rejection Madame Chennault had helped arrange as a last-minute blow at Hubert Humphrey and the Democrats.

It is not only his debts, associations, and sympathies to the China Lobby which have linked Nixon with Kuomintang machinations in Indochina and helped plunge the U.S. deeper into the morass there. One of his most important foreign policy appointments since taking office has been the reassignment of Ray Cline as State Department director of intelligence and research. Cline, the controversial CIA station chief in Taiwan who helped organize KMT forays into Communist China, in 1962 promoted Nixon's old project of a Bay of Pigs invasion of China. Within a month of Clines recent appointment, the resumption of pilotless Intelligence flights over mainland China was approved.

The entire cast of the China Lobby has relied on one magic corporation, the same corporation established just after World War II by General Claire Chennault as Civil Air Transport and renamed in the 1950's Air America. Carrier not only of men and personnel for all of Southeast Asia, but also of the policies that have turned Indochina into the third bloodiest battlefield in American history, Air America's chief contract is with the American Central Intelligence Agency.

Air America brings Brahmin Bostonians and wealthy Wall Streeters who are the China Lobby together with some of the most powerful men in Nationalist China's financial history. One of its principal services has been to fly in support for the "remnant" 93d Division of the KMT, the "opium army" in Burma; another has been as a major carrier of opium itself. Air America flies through all of the Laotian and Vietnamese opium pickup points, for aside from the private "butterfly fleet!' and various military transports, Air America is the "official" Indochina airline. A twenty-five-year-old black man recently returned from Indochina told Ramparts of going to Vietnam in late 1968 as an adventurer, hoping to get in on the dope business. But he found that the business was all controlled by a "group like the Mafia. It was tight and there wasn't room for me." The only way he could make it in the dope trade, he says, was to go to work for Air America as a mechanic. He found there "was plenty of dope in Laos�lots of crystals [heroin] all over the place." Air' America was the only way to get in on it.

What has taken place in Indochina is more than a flurry of corruption among select dramatis personae in America's great Asian Drama. The fact that Meo tribesmen have been nearly wiped out, that the Corsican Mafia's Air Opium has been supplanted by the CIA's Air America, that Nationalist Chinese soldiers operate as narcotics bandits, that such architects of U.S. democracy for the East as the Nhus and Vice President Ky have been dope runners-these are only the bizarre cameo roles in a larger tragedy that involves nothing less than the uprooting of what bad been the opium trade for decades-through the traditional lotus land of the Middle East into Western Europe�and the substitution of another network, whose shape is parallel to that of the U.S. presence in Southeast Asia. The ecology of narcotics has been disrupted and remade to coincide with the structure of America's Asia strategy-the stealthy conquest of a continent to serve the interests of the likes of the China Lobby.

The shift in the international opium traffic is also a metaphor for what has happened in Southeast Asia itself. As the U.S. has settled in there, its presence radiating a nimbus of genocide and corruption, armadas of airplanes have come to smash the land and lives of a helpless people; mercenary armies have been trained by the U.S.; and boundaries reflecting the U.S. desires have been established, along with house of 'commerce and petty criminality created in the American image. One of the upshots has been that the opium trade has been systematized, given U.S. technological expertise and a shipping and transportation network as pervasive as the U.S. presence itself. The piratical Corsican transporters have been replaced by pragmatic technocrats carrying out their jobs with deadly accuracy. Unimpeded by boundaries' scruples, or customs agents, and nurtured by the free flow of military personnel through the capitals of the Orient, the United States has�as a reflex of its warfare in Indochina�built up a support system for the trade in narcotics that is unparalleled in modem history.

The U.S. went on a holy war to stamp out Communism and to protect its Asian markets, and it brought home heroin. It is a fitting trade-off, one that characterizes the moral quality of the U.S. involvement. This ugly war keeps coming home, each manifestation more terrifying than the last; home to the streets of the teeming urban ghettos and the lonely suburban isthmus where in the last year the number of teen-age heroin addicts has taken a quantum leap forward. Heroin has now become the newest affliction of affluent America�of mothers in Westport, Connecticut, who only wanted to die when they traced track marks on their daughters' elegant arms; or of fathers in Cicero, Illinois, speechless in outrage when their conscripted sons came back from the war bringing home a blood-stained needle as their only lasting souvenir.

pps.1-27
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Aloha, He'Ping,
Om, Shalom, Salaam.
Em Hotep, Peace Be,
All My Relations.
Omnia Bona Bonis,
Adieu, Adios, Aloha.
Amen.
Roads End

The Strange Tale of Eugene Dinkin

The Strange Tale of Eugene Dinkin

from:
Blacklisted News—Secret Histories from Chicago to 1984
©1983 Youth International Party
ISBN 0-9128973-00-0
Bleecker Publishing
8.5x11in. Paperback - 723 pages

The Strange Tale of Eugene Dinkin
by Robert Mitchell

The amazing facts contained in the following F.B.I. document, which we are reprinting in full, are true. Dinkin’s story has been verified through the existence of cablegrams between the CIA’s Geneva and Washington offices, both before and after the Kennedy assassination. Careful examination of those cablegrams, as well as other documents, reveal that the CIA actively tried to cover-up the fact that prior to November 22, 1963 PFC Dinkin was attempting to reveal the existence of a plot to assassinate Kennedy. The cablegrams also, reveal that efforts were made to silence Dinkin and suppress the story.

Following the assassination, published reports revealed that someone had advance information of the assassination and the Warren Commission requested to be furnished documents relative to the allegation. In a secret memo to J. Lee Rankin, Chief Council of the Warren Commission, CIA Deputy Director Richard Helms states, “Immediately AFTER the assassination (our source in) Geneva, Switzerland reported allegations concerning a plot to assassinate President Kennedy were made by PFC Eugene Dinkin, U.S. Army, on 6 and 7 November. 1963.” But Helms appeared to be withholding the fact that the Agency had knowledge of Dinkin’s allegations prior to the assassination.

One of the cablegrams, titled “IN CABLE No. 56631, dated November 7 1963.” reported on Dinkin’s background and allegations of a plot. At the end of the cable, Geneva asked: “DIRECTOR: Advise any action desired. Will continue to monitor developments via army attaché, FBI, Geneva contacts, but will not become involved vis-à-vis Swiss unless so directed.” Thus, the CIA and others in the intelligence community had full knowledge of Dinkin’s assertions prior to the assassination.

Evidence abounds that the cables were weighted with subliminal suggestions, designed to give a predisposition to the notion that PFC Dinkin was mentally unstable. For example, cablegrams tend to be written in short, choppy sentences, often including abbreviations, omitting articles, and avoiding adjectives. However, when Dinkin is referred to, adjectives are freely added, intending to imply that Dinkin was a crackpot. “IN CABLE 56631 dated November 16. 1963 refers to Dinkin’s “Wild but amazing coincidence …” and states that Dinkin “… had given his wild story in Souisee”(Switzerland). Later, it states that a Time-Life stringer “… RECOLLECTED. OR THOUGHT SHE RECOLLECTED TALE TOLD BY SUBJ.” This wording subtly-throws a shadow of doubt on the corroborating reporter. Dinkin is further referred to as “unbalanced” on two separate occasions in this one, short cable.

Evidence that the CIA tried to suppress the story and keep it from coming to the attention of the Secret Service, also, emerges. In early cable communications, pertinent facts are conspicuously absent, thus carefully suppressed. Coupled with evidence that the cables were weighted in an obvious attempt to discredit Dinkin indicates that the C. I. A. was trying to cover up the matter prior to the Kennedy assassination in an effort to silence the many who were attempting to expose the plot. But for the two journalists in Geneva, the story might never have surfaced.

The shocking tale of what happened to Eugene Dinkin following his revelations has finally come to light. It includes frame up, false arrest and imprisonment, unlawful medical treatment, and medical malpractice. Dinkin has also suffered libel and misrepresentation at the hands of the Government.

Mr. Eugene B. Dinkin, 534 West Oakdale, Chicago. Illinois, advised that he had been recently discharged from the United States Army after having been in detention for four months while undergoing psychiatric tests. Dinkin advised that while stationed in Europe with the U.S. Army in 1963, he had begun a review of several newspapers including the Stars and Stripes as an exercise in psychological sets. He explained that he had taken courses in psychology at college and was extremely interested in this subject matter. He advised that psychological sets was a term referring to a series of events, articles, etcetera which, when coupled together, set up or induce a certain frame of mind on the part of a person being exposed to the series. He stated that this method of implanting an idea was much in use by the Madison Avenue advertising people who attempted to influence one who was expos- ed to these psychological sets to buy the product being advertised, whether this produce was physical or an idea.

Dinkin stated that while so reviewing the newspapers for psychological sets he discovered that Stars and Stripes, as well as certain unidentified Hearst newspapers, were carrying a series of psychological sets which he believed were deliberately maneuvered to set up a subconscious belief on the part of one reading these papers to the effect that President John F. Kennedy was soft on communism or perhaps a communist sympathizer. Further study of these newspapers and the psychological sets contained therein made it evident to Mr. Dinkin that a conspiracy was in the making by the military of the United States, perhaps combined with an ultra-right economic group, to make the people of the United States believe that President Kennedy was, in fact, a communist sympathizer and further, that this same group planned to assassinate the President and thus was preparing these psychological sets to pave the way for this assassination to the point where the average citizen might well feel that President Kennedy was sympathetic to communism and should have been killed. In addition, Dinkin believed the psychological sets were adjusted to present a subliminal predisposition to the effect that a communist would assassinate President Kennedy.

Dinkin advised that he discussed his theories with certain individuals stationed with him in the Army, but had declined to furnish this information to persons of authority in the United States Army since he believed that the plot against President Kennedy was being set in motion by high-ranking members of the military. He said that in October 1963, his research had not, in fact, reflected a certain date, but that he believed the assassination would take place on or about a religious or semi-religious occasion which he felt would be picked by the group behind this plot in order that the murder itself would become even more reprehensible to the average citizen because of the religious connotations, since he believed that the plot consisted in part of throwing blame for the assassination onto radical left-wing or communist suspects, he stated that the religious tie-in would lead the average citizen to accept more readily the theory that a communist committed the crime since they were an atheistic group anyway.

Dinkin advised that he had been in trouble with the officers of his military group, the 599th Ordinance Group stationed in Germany, due to his refusal to purchase United States savings bonds. He stated that he was against the enforced purchase of these bonds because of his political convictions which made him believe that the United States should not spend 52 per cent of its income for material of war, part of which would be financed by any enforced purchases made by him. He stated that he had been outspoken in his views concerning these bond purchases, and that he and others who felt that compulsory purchase of bonds was an infringement on their civil rights, had been denied passes as a result of their stand.

As a result of his opposition to the bond purchases, according to Dinkin, he was removed from his position in the code section and transferred to an Army Depot at Metz. France. On October 25, 1963, Dinkin went to the United States Embassy at Luxembourg where, he stated, he attempted for several hours so see a Mr. Cunningham, the Charge D”Affaires at the Embassy. He stated that he sent word to Mr. Cunningham that he had information concerning a plot to assassinate President Kennedy, and at one point spoke to Mr. Cunningham by phone. He said that Cunningham refused to see him in person or to review the newspapers and research papers, which Dinkin said were evidence proving his theory of the impending assassination. Dinkin advised that he spent approximately two hours with the United States Marine Corps guard at the Luxembourg Embassy and had generally set forth his theories to this individual, whose name he did not know.

Following this incident, Dinkin was notified by his superiors that he was to undergo psychiatric evaluation on November 5, 1963. Due to this pending development, Dinkin said he went absent without leave to Geneva Switzerland, where he attempted to present his theory to the editor of the Geneva Diplomat, a newspaper published in Geneva. Switzerland. In addition to this editor, Dinkin spoke to a Mr. Dewhirst (phonetic), a Newsweek reporter based at Geneva. Dewhirst would not listen to Dinkin’s theories. While in Switzerland,

Dinkin attempted to contact officials of Time-Life publications and succeeded in speaking to the secretary, name unknown, of this organization in Zurich. According to Dinkin, all of his efforts in Luxembourg and Switzerland were made to present to appropriate officials his warning of the impending assassination of President Kennedy. He stated that he did not attempt to see these people in connection with his personal dissatisfaction with the program of the United States Army in regards to bond purchases.

When he was unable to accomplish his purpose in Switzerland, Dinkin advised that he then returned to Germany where he gave himself up to the custody of the military authorities.

Dinkin advised that he first became aware of this plot to assassinate President Kennedy in September. 1963. At first, he did not have enough facts, as taken from the newspapers, to support his theory, but as of October 16. 1963, he felt that his research into the psychological sets had substantiated his theory. As of October 16. 1963 he wrote a registered letter to Attorney General Robert F. Kennedy in which letter he set forth his theory that President Kennedy would be assassinated, adding that he believed that this assassination would occur on or about November 28. 1963. He stated that he signed this letter with his own name, and requested he be interviewed by a representative of the Justice Department. He said that on the envelope, he placed the return address name of PFC Dennis De Witt an Army friend. He said he did this to preclude anyone from intercepting this letter since he felt that Army authorities might well be censoring his mail. He stated that he never received any answer to this letter, nor was he ever contacted by any representative of the Justice Department prior to his interview with agents of the Federal Bureau of Investigation.

Dinkin advised that on his return to the custody of the United Sates Army in November 1963, he was held in detention. While in detention, he stated he was contacted by a white male who identified himself verbally as a representative of the Defense Department. This individual asked Dinkin for the location of the newspapers, which Dinkin had compiled as his proof of the theory of the assassination of President Kennedy. This individual stated that he desired to obtain these proofs and would furnish Dinkin a receipt for the papers. Dinkin advised that he instructed this individual as to where the papers were located at the base, at which point this man left. Dinkin advised that on his release from detention, he discovered that all of his papers and notes were missing and presumed that the individual mentioned above had taken them. He never received any receipt for his papers.

Mr. Dinkin advised that he had undergone numerous psychiatric tests at Walter Reed Army Hospital in Washington. D.C. He stated that he was aware that the Army psychiatrist had declared him to be psychotic and a “paranotic.” He said that several of the tests given him were familiar to him from his studies in psychology at the University of Chicago. Because of his familiarity with these tests, and his background knowledge as to what the test answers should be, he believed it impossible that the results of these tests could have shown him to be psychotic and “paranotic.” He stated that: if he had desired, he could have faked the answers to prove he was sane even if he were, in fact, mentally disturbed. Mr. Dinkin stated he believed that the psychiatric evaluation given him by the Army psychiatrist was, in fact, and attempt on their part to cover up the military plot, which he had attempted to expose.

Dinkin advised that during his detention at Walter Reed Army Hospital, arrangements had been made through his family for him to be given a psychiatric test by a private psychiatrist chosen by his family. He stated when these arrangements were finally made; he had declined the services of this private physician. Dinkin explained that he had reached a point where his only desire was to be released from custody and discharged from the Army. He stated that in order to do this, he had felt it necessary to “go along” with the examining Army psychiatrist and pretend that he had, in fact, been suffering from delusions but was now cured. He was afraid that if an outside psychiatrist should examine him and be told by Dinkin the facts as set forth herein, that this psychiatrist would probably believe Dinkin to be mentally disturbed, and this would result in further detention. Mr. Dinkin stated that he was well aware that his theory and the facts surrounding his attempts to bring the theory to the proper authorities was extremely wild and could be construed by a person untrained in psychology to be crazy. Despite this, Mr. Dinkin advised he was still of the belief that there had been, in fact, a plot perpetrated by a military group in the United States and aided and abetted by newspaper personnel working with this military group, which plot had to do with the assassination of President John F. Kennedy.

-YIPster Times, Jan/Feb. 1977

pps. 52-55

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Onward to the utmost of futures!

Om
Kris Millegan

-----
Aloha, He'Ping,
Om, Shalom, Salaam.
Em Hotep, Peace Be,
All My Relations.
Omnia Bona Bonis,
Adieu, Adios, Aloha.
Amen.
Roads End

Drugs, the U.S., and Khun Sa

Drugs, the U.S., and Khun Sa

an excerpt from:
Drugs, the U.S., and Khun Sa
Francis W. Belanger©1989
Editions Duang Kamol
Siam Square,
Bangkok, Thailand
ISBN 974-210-4808
146 pps. – First Edition – Out-of-print
--[1]--

THE ROLE OF THE CIA

THE CIA AND THE DRUG INDUSTRY

The mid-1960s marked the peak of the European heroin industry, and shortly thereafter it went into a sudden decline. In the early 1960s the Italian government launched a crackdown on the Sicilian Mafia, and in 1967 the Turkish government announced that it would begin phasing out cultivation of opium poppies on the Anatolian plateau in order to deprive Marseille’s heroin laboratories of their most important source of raw material. But, unwilling to abandon their lucrative narcotics racket the Corsican syndicates—and the American Mafia—shifted their sources of supply to Southeast Asia, where surplus opium production and systematic government corruption created an ideal climate for large scale heroin production.

And once again American foreign policy played a role in creating these favorable conditions. During the early 1950s the CIA had backed the formation of a Nationalist Chinese guerilla army in Burma, a group which still controls as much as half of the world's opium supply, and in Laos the CIA created a Meo mercenary army whose commander manufactured heroin for sale to, among others, American GIs in South Vietnam. The State Department provided unconditional support for corrupt governments known to be engaged in the international drug traffic. In late 1969 new heroin laboratories sprang up in the tri-border and where Burma, Thailand, and Laos converge, and unprecedented quantities of heroin started flooding into the United States. Nurtured by a seemingly limitless flow of heroin, America's total number of addicts skyrocketed.

The bloody Saigon street fighting of April-May 1955 marked the end of French colonial rule and the beginning of direct American intervention in Vietnam. When the First Indochina war came to an end, the French government had planned to withdraw its forces gradually over a two- or three-year period in order to protect its substantial political and economic interests in southern Vietnam. The armistice concluded at Geneva, Switzerland, in July 1954 called for the French Expeditionary Corps to withdraw into the southern half of Vietnam for two years, until an all-Vietnam referendum determined the nation's political future. Convinced that Ho Chi Minh and the Communist Viet Minh were going to score an overwhelming electoral victory, the French began negotiating a diplomatic understanding with the government in Hanoi.

But America's moralistic cold warriors were not quite so flexible. Speaking before the American Legion Convention several weeks after the signing of the Geneva Accords, New York's influential Catholic prelate, Cardinal Spellman, warned that:

“If Geneva and what was agreed upon there means anything at all, it means ... taps for the buried hopes of freedom in Southeast Asia! Taps for the newly betrayed millions of Indochinese who must now learn the awful facts of slavery from their eager Communist masters!"

Rather than surrendering southern Vietnam to the "Red rulers' godless goons," the Eisenhower administration decided to create a new nation where none had existed before. Looking back on America's post-Geneva policies from the vantage point of the mid 1960s, the Pentagon Papers concluded that South Vietnam" was essentially the creation of the United States.

The French had little enthusiasm for this emerging nation and its premier, and so the French had to go. Pressured by American military aid cutbacks and prodded by the Diem regime, the French stepped up their troop withdrawal. By April 1956 the once mighty French Expeditionary Corps had been reduced to less than 5,000 men, and American officers had taken over their jobs as advisers to the Vietnamese army. The Americans criticized the French as hopelessly "colonialist" in their attitudes, and the French officials retorted that the Americans were naive. During this difficult transition period one French official denounced "the meddling Americans who, in their incorrigible guilelessness believed that once the French Army leaves, Vietnamese independence will burst forth for all to see."

But America's fall from innocence was not long in coming. Only seven years later, the U.S. Embassy and the CIA engineered a coup that toppled Diem and left him murdered in the back of an armored personnel carrier. And by 1965 the United States found itself fighting a war that was almost a carbon copy of France’s colonial war. The U.S. Embassy was wearisomely trying, but effectually unable, to manipulate the same clique of corrupt Saigon politicos that had confounded the French in their day. The U.S. Army looked just like the French Expeditionary Corps to most Vietnamese, only instead of Senegalese and Moroccan colonial levies, the U.S. Army was assisted by Thai and South Korean troops. The CIA and the U.S. special forces (the "Green Berets") were assigned to train the very same hilltribe mercenaries that the French MACG (the "Red Berets") had recruited ten years earlier.

Given the striking similarities between the French and American war machines, it is hardly surprising that the broad outlines of "operation X" (Although the French colonial government initiated a program to eliminate opium addiction, the French intelligence and paramilitary agencies took over the opium traffic in order to finance their covert operations during the First Indochina War of 1946-1954.) reemerged after U.S. intervention. As the CIA became involved in Laos in the early 1960s it became aware of the truth of Colonial Trinquier's axiom, "To have the Meo, one must buy their opium." At a time when there was no ground or air transport to and from the mountains of Laos except CIA aircraft, opium continued to flow out of the villages of Laos to transit points such as Long Tieng. There, government forces, this time Vietnamese and Lao instead of French, transportcd narcotics to Saigon, where parties associated with the Vietnamese political leaders were involved in the domestic distribution and arranged for export to Europe through Corsican and CIA syndicates. And just as the French high commissioner had found it politically expedient to overlook the Binh Xuyen's involvement in Saigon's opium trade, the U.S. Embassy, as part of its unqualified support of the Thieu Ky regime, looked the other way when presented with evidence that members of the regime were involved in the GI heroin traffic.

In Laos, CIA clandestine intervention produced changes and upheavals in the narcotics traffic. When political infighting among the Lao elite, coupled with the escalating war in Vietnam, forced the small charter airlines owned by the Corsican syndicates out of the opium business in 1965, the CIA's airline, Air America, began flying Meo opium out of the hills to Long Tieng and Vientiane. CIA cross-border intelligence missions launched Into China from Laos reaped an unexpected dividend in 1962 when the Shan rebel leader who had organized the forays for the agency began financing the Shan nationalist cause; he did so by selling Burmese opium to another CIA protege, Laotian General Phoumi Nosavan. The business alliance between General Phoumi and the Shans opened up a new trading pattern that diverted increasingly significant quantities of Burmese opium from their normal marketplace in Bangkok. By the late 1960s U.S Air Force bombing had further disrupted opium production in Laos by forcing the majority of the Meo opium farmers to become refugees. In response, flourishing Laotian heroin laboratories—which were the major suppliers for the GI users in Vietnam—simply increased their imports of Burmese opium through pre-existing trade relationships.

The importance of these CIA clients in the subsequent growth of the Golden Triangle's heroin trade was revealed inadvertently, by the Agency itself when it leaked a classified report on the Southeast Asian opium traffic to the New York Times. The CIA analysis identified twenty-one opium refineries in the tri-border area where Burma, Thailand, and Laos converge and reported that seven were capable of producing 90 to 99 percent pure No. 4 heroin. Of these seven heroin refineries, "The most important are located in the areas around Tachilek, Burma; Ban Houei Sai and Nam Keung in Laos; and Mae Salong in Thailand."

Although the CIA did not see fit to mention it, many of those refineries were located in areas totally controlled by paramilitary groups closely identified with American military operations in the Golden Triangle. Mae Salong was headquarters of the Nationalist Chinese Fifth Army, which had been continuously involved in CIA intelligence and counterinsurgency operations since 1950. According to a former CIA operative who worked in the area for a number of years, the heroin laboratory at Na Kueng was protected by Major Chao La, commander of Yao mercenary troops for the CIA in northwestern Laos. One of the heroin laboratories near Ban Huay Sai reportedly belonged to General Ouane Rattikone, former commander in chief of the Royal Laotian Army—the only army in the world, except for the U.S. army itself, to be entirely financed by the U.S. government. The heroin factories near Tachilek were operated by rebel units from Burma and Shan rebel armies who even now control a large percentage of the narcotics traffic out of Burma. Although few of these Shan groups still have any relation with the CIA, one of the most important chapters in the history of the Shan States' opium trade involves a Shan rebel army under Khun Sa, who is still receiving CIA support, either directly or indirectly.

Other sources have revealed the existence of an important heroin laboratory that operated near Vientiane under the protection of General Ouane Rattikone. And finally, the U.S. Bureau of Narcotics had reports that General Vang Pao, commander of the CIA's 'secret army', had been operating a heroin factory at Long Tieng, headquarters for CIA sponsored operations in northern Laos.

In the fertile minds of the geopolitical strategists in the CIA's Special Operations division, potential infiltration routes stretched from the Shan hills of north-eastern Burma, through the rugged Laotian mountains, and then southward into the Central Highlands of South Vietnam. According to one retired CIA operative, Lt. Col. Lucien Conein, Agency personnel were sent to Laos in 1959 to supervise eight Green Beret teams who were then training Meo guerrillas on the Plain of Jars. In 1960 and 1961 the CIA recruited elements of Nationalist Chinese Paramilitary units based in northern Thailand to inf[i]ltrate into China-Burma border areas; they also sent Green Berets into South Vietnam's Central Highlands to organize hilltribe commando units for intelligence and sabotage patrols along the Ho Chi Minh Trail. Finally, in 1962 one CIA operative based in northwestern Laos began sending trained Yao and Lahu tribesmen into the heart of China's Yunnan Province to monitor road traffic and tap telephones.

While the U.S. military required half a million troops to fight a conventional war in South Vietnam, the mountain war had needed only a handful of Americans. American paramilitary personnel in Laos tended to serve long tours of duty, some for a decade or more, and had been given an enormous amount of personal power. If the nature of the conventional war in South Vietnam is best analyzed in terms of the faceless bureaucracies that spewed out jargonized policies, the secret war in Laos is most readily understood through the men who fought it.

THE OPERATIVES

Three men, perhaps more than any of the others, have left their personal imprint on the conduct of the secret war: Edgar Buell, Anthony Poe, and William Young. And each in his own way illustrates a different aspect of America's conscious and unconscious complicity in the Laotian opium traffic.

William Young, perhaps one of the most effective agents ever, was born in the Burmese Shan States, where his grandfather had been a missionary to the hill tribes. A gifted linguist, Young spoke five of the local languages and probably knew more about mountain minorities than any other American in Laos; the ClA rightly regarded him as its "tribal expert." Because of his deep and sophisticated understanding of the hill tribes, he viewed the opium problem from the perspective of a hilltribe farmer. He felt nothing should be done to obstruct the opium traffic. Young explained his views: "As long as there is opium in Burma, somebody will market it."

Anthony Poe was indifferent to the problem. A marine in the Pacific during World War II, Poe joined the CIA's Special Operations division sometime after the war and quickly earned a reputation as one of its crack clandestine warfare operatives in Asia, playing an important role in the CIA's Tibetan operations. Poe's first assignment in Indochina was with anti-Sihanouk mercenaries along the Cambodian border in South Vietnam, and in 1963 he was sent to Laos as chief advisor to General Vang Pao. Several years later he was transferred to northwestern Laos to supe