Wednesday, May 15, 2013

An Off-the-Books Private War

[originally posted in 2013]


Excerpt from:

The Marcos Dynasty by Sterling Seagrave
©1988, Harper and Row, Inc
Ferdinand and Imelda Marcos Family

Reading between the lines of Lieutenant Colonel North's testimony, it is clear that CIA director William Casey was proud of having an "off the shelf" team of private operators funded by unofficial sources. This enabled Casey to avoid the kind of interference from Congress that had been blocking the Reagan administration's initiatives to topple the Sandinista government in Nicaragua. But Casey's gambit was not entirely new. The members of The Enterprise were all larger-than-life characters who had worked together for many years, a first generation of colorful old OSS hands, and a second generation of hard-nosed covert action types who cut their milk teeth at the Bay of Pigs. Some of their names have since become familiar:
    • John Singlaub, 
    • Richard Secord, 
    • Ray Cline, 
    • Theodore Shackley, 
    • Thomas Clines, and others.
Alan A. Block, Masters of Paradise
But no longer around is the man who, in a way, started it all going: the CIA's original overseas paymaster and Mister Black Bag. His name was Paul Helliwell.

Paul Helliwell, a lawyer, had been a colonel in the U.S. Army’s G-2 Intelligence unit in the Middle East, later transferring to O.S.S. as Chief of Intelligence in China, and he had a reputation for buying information with bars of opium. He reputedly met with Ho Chi Minh, leader of North Vietnam, three times in 1945 but was unable to reach an agreement for the U.S. to provide Ho with weapons to use against Japan because Ho would not swear not to use them against the French. When O.S.S. was disbanded, Helliwell stayed in intelligence in the War Department.
He left the military around 1947, when the CIA was created, and joined a Miami law firm — Bouvier, Helliwell and Clark — but still found time to work for the CIA.
[Cite: Alan A. Block, Masters of Paradise: Organized Crime and the Internal Revenue Service in The Bahamas (New Brunswick, N.J.: Transaction Publishers, 1991).]
Chennault with Mme Chiang
Helliwell’s first major assignment after the war was to find a way for the CIA to subsidize the airline, Civil Air Transport, owned by Major General Claire L. Chennault, which had been used to furnish materiel to the anticommunist Chinese in Southeast Asia.
In 1951 Helliwell set up Sea Supply as the CIA’s first proprietary company in order to transport weapons to the Nationalist Chinese troops in Burma and to Thailand police, whose Chief was involved in the opium trade. The planes were not returned empty after the guns were unloaded; they were filled with drugs destined for the United States — usually Florida. The money derived from the sale of the drugs had to be laundered for the CIA, and Helliwell figured out how to do it.
Tommy the Cork
His associates in Sea Supply, and later in the Caribbean area planning the overthrow of President Jacobo Arbenz of Guatemala, were New York attorney Thomas G. Corcoran ["Tommy the Cork"] (one of FDR’s "Brain Trust") and Frank Wisner.
In 1961 Helliwell became "paymaster" for operatives working covert intelligence operations in the Bay of Pigs, although his methods are not clearly apparent. However, in late 1963 he was involved with a bank in the Bahamas called Bank of the Caribbean Limited, which was "picked up" in 1965 by one of his clients, a CIA-connected "insurance conglomerate."
In 1968 the bank’s name was changed to Underwriters Bank Limited, which had been registered by Inge Gordon Mosvold, a Norwegian shipbuilder who may have been a front for an even wealthier man named Daniel K. Ludwig, for whom Mosvold had chartered the Mercantile Bank and Trust in Freeport in January 1962. The corporate shareholders of the Mercantile Bank were Cayship Investment Company, Inc. (Panama); Security (Bahamas) Limited; and Cia. de Navegacion Mandinga S.A. (Panama); as well as two nominees.
Mercantile Bank was parent company for the now-famous Castle Bank and Trust formed by Helliwell, alleged to be "one of the CIA’s finance channels for operations against Cuba," being managed from Andros Island in The Bahamas beginning in 1964. [Wall Street Journal, April 18, 1980.]
Thanks to the CIA's part in rescuing the regime of Generalissimo Chiang in 1949, Helliwell had access to its black resources. In 1949 Helliwell and a handful of other CIA agents salvaged Claire Chennault's Civil Air Transport (CAT) and other American and Chinese aircraft from the mainland, and transferred them by ship to Taiwan.
He spent the years immediately following Mao's victory reorganizing the U.S. line of defense around Red China. With war-surplus Victory ships and Liberty ships, and some of Chennault's planes, he set up Sea Supply Corporation and Air America, using the Philippines and Thailand as staging bases for secret operations throughout Southeast Asia. As a means of harassing Red China from the rear, and gathering intelligence, Sea Supply ferried materiel to Thailand to support the KMT opium armies in Burma and the rebellious Champa tribesmen in eastern Tibet. CAT and Air America flew these supplies from Thailand into the Golden Triangle poppy fields and across upper Burma to the Himalayas, and flew supplies from the Philippines for the beleaguered French at Dienbienphu.
It was an expensive business. The KMT and the CIA paid off General Phao, the commander of the Thai police, who obligingly transshipped heroin from the opium armies down to Bangkok for export. They also paid the KMT's General Li Mi what it took to keep his army of ten thousand going, which Li Mi was not about to do with his share of the opium proceeds. All this took a lot of gold bullion, but Helliwell rose to the occasion. He and other Agency financial experts in the field followed basic rules laid down by the original CIA director of covert operations, Frank Wisner. First get the rich people on your side, including the rich gangsters, then set up channels for black money so you can provide funds across borders to the people who need them to get the job done. Kim Philby said Wisner once told him, "It is essential to secure the overt cooperation of people with conspicuous access to wealth in their own right." The cooperation of rich people hid the transfer of black money.

Helliwell's Family and College Days

What Seagrave failed to reveal, however, are a few small details about Helliwell before he joined the Army. Could any of these facts have contributed to placing him where he ended up later--as the center man in the dirty money laundry for the CIA?



Paul Helliwell’s father, Lionel H. Helliwell, was an English cloth buyer from Yorkshire when he settled in New York. He advanced within the trade to become a broker in the textile industry. In North Andover, Massachusetts, in 1910 he married Nola Harless, a dedicated school teacher and administrator at Hampden Sydney School in Knoxville, Tennessee, who had recently been replaced in her position by a man.

North Andover was where Lionel's brother, William Helliwell, a textile designer at Worsted Mills, lived since his immigration  from Leeds in 1902.
 
See map online
When Paul was five, the 1920 Census found his family in rural New Jersey, ten miles north of Morristown, living in a scenic neighborhood in a home they owned. It appears they remained there until at least past the  date the Florida census would have been taken in 1925. The 1930 Census shows he had relocated his family to Seffner, Florida, a small town east of Tampa, Florida. His brother was also a resident of Seffner when he died in 1929. William's wife then returned to her family back East. Eventually, Lionel and Nola Helliwell would move to Miami.
 
In Tampa Lionel worked for the United States Customs House, then located on the third floor of the building facing Florida Avenue, between Twiggs and Zack Streets (see inset map left). The city directories, however, show more than one location for Customs offices. During these years Paul was attending high school at Plant City, where he graduated in 1933 and still living with his parents.

A 1934 listing in the Tampa, Florida, City Directory, shows him living alone, however, while working for Cuban Rum, Inc., the only company listed under liquor importers those months following the repeal of Prohibition. 
 
Intriguingly, immigration records indicate that Helliwell had a plane ticket for a return trip from Cuba in 1934, but didn't make the flight. 1934 was the same year he began as a freshman at the University of Florida in Gainesville, where he was soon in position to make even more powerful contacts. However, Cody Fowler, his partner at Cuban Rum in downtown Tampa appears to have helped him financially with college and law school, and stood ready to give him a job upon graduation.
 
 

Click image to enlarge.
Living in the Chi Phi House in Gainesville, Paul was one year behind future Florida governor, George Smathers, a member of the Sigma Alpha Epsilon House, where his roommate in 1933-34 was Philip Graham. Pulled out of college for a year because he had developed dissolute habits, according to Carol Felsenthal's biography of Graham's future wife, Phil was allowed to return in the fall of 1934, which placed him in the 1936 graduating class with George Smathers, who would continue law school in Gainesville until 1938. Helliwell completed his law studies there a year later. 
 
Phil Graham got into Harvard Law only after his father sought help from Florida Congressman Claude Pepper, but the young genius had proven himself by the end of his second year when he was named head of the Harvard Law Review. 
 
Another Harvard Law scholar, Ed Prichard, Jr., soon introduced him to Felix Frankfurter, the Harvard professor whom FDR named in 1939 to the Supreme Court, and also key recruiter into FDR's brain trust. It was an auspicious year. 
 
Phil Graham and George Smathers both married in 1939. Paul Helliwell graduated from law school and married Majorie Mae Muller, whose father had relocated his family to Florida and sold insurance. Her mother managed the Astoria Apartments at 1367 S.W. 5th Street (at 14th Avenue), where Marjorie grew up.

By 1945 Paul and Marjorie Helliwell were living in Miami, along with his parents. Paul had joined the military during the war and was already a Lieutenant Colonel. His father still worked as a Customs inspector.


Peter Dale Scott sums up who was directing Helliwell in this one sentence:

In effect, Corcoran was running an off-the-books private war in which a private company, China Defense Supplies, was diverting some of the war materiel destined for China to a private army, the American Volunteer Group. 
 
We'll pick up there later.

 

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