Sunday, May 3, 2020

Kenneth Burnstine's Strange Life and Associates

Who Was John Birch?

Checking this blog's timeline indicates that in October 2013 my research concerned the history of the John Birch Society created in 1958. 

Birch was actually a missionary student from Georgia, who went to a Fort Worth, Texas, Baptist seminary run by Dr. J. Frank Norris, who, according to the website catalog of his papers, corresponded with several U.S. Presidents, as well as many other powerful political and religious figures from the time. What was most intriguing to me on October 20 was how Norris sent Birch to Kunming, Yunnan, China--the same area of China where General Claire Chennault's Flying Tigers were based. 

Peter Dale Scott has written about the Strategic Service Unit--the "cloak and dagger" sections of the defunct OSS--in Kunming shortly after the end of WWII, whose Far East Division chief was Paul Helliwell, a Florida attorney we have written about before.

Sterling Seagrave wrote that Paul Helliwell 
allegedly "became the man who controlled the pipe-line of covert funds for secret operations throughout East Asia after the war." 
 Eventually, Helliwell would be responsible for the incorporation in America of the CIA proprietaries, Sea Supply Inc. and Civil Air Transport (CAT) Inc. (later Air America), which would provide support to both Phao Sriyanon of the Northern Army in Thailand and the KMT drug camps in Burma.
I had let myself be diverted from a promise to reveal how William S. Youngman's marriage into the Perkins and Forbes network of opium trading families from Massachusetts help to explain why America became so entrenched in Southeast Asia during the 20th century. Kruger did not seem to be aware of this historical opium link between FDR's lawyer, Tommy the Cork, and the Forbes/Delano network while he struggled to explain why, decades later, Nixon warred against French heroin traffickers. Yet, as Kruger acknowledged, the war against the French drug connection failed to eliminate the actual source of the opium, the Golden Triangle. 

When the French abandoned their colonial possession in Indochina in 1954, the United States moved in the "Saigon Military Mission" under its its Chief, Colonel Edward G. Lansdale, allegedly to prevent the area's being taken over by Soviet Communists, according to the Pentagon Papers documents. In this endeavor Lansdale had assistance from George McLean Hellyer, of the U.S. Information Agency. The Foreign Service had assigned him Hellyer, who lived in Tokyo, to Vietnam as early as 1953.  

The two former advertising PR men immediately began a program of psychological warfare, just as Lansdale had done in the Philippines at the close of WWII.

Hellyer's Background

The British Hellyer family became tea importers in Japan after William J. Alt, established the business in Nagasaki around 1860. George and his brother David had lived there as children. (See book by David Tirrell Hellyer, At the Forest's Edge: Memoir of a Physician-Naturalist.) 

George was born in Chicago in 1912, and his parents moved that same year to Kobe, Japan where his father, Harold Jesse Hellyer, had been born.  Two brothers, David and Walter, were born in Japan before the family relocated for awhile to  Lausanne, Switzerland. Frederick Hellyer died in 1925, and his widow, Dorothy, married Thomas Emerson Ripley in Santa Barbara, CA.

George M. Hellyer was working in advertising and public relations in Tacoma, Washington, when he enlisted at the outbreak of WWII. According to the 1940 census, in 1935 he had been living at the Hellyer's home in Lausanne.  A family website relates:
George Hellyer had a varied existence including an adventurous war career as an American liaison officer with British troops in Burma, and a stint in the tea business in Formosa (now Taiwan). He became an officer of the US Information Service and held senior positions in Saigon, Washington DC, North Africa and Brussels.
The same website also reveals that George's grandfather, Frederick Hellyer:
took a Japanese wife, apparently not an unusual custom at the time, and had c.2 children. When he married his American wife Georgiana, his Japanese family was provided for and he left them a business in the name of Hellyer which still exists. His daughter is said to have been the wife of Admiral Tojo (famous in the second World War). This aspect of Frederick's history was not generally known in the family, but details have been researched recently by Robert Hellyer (great grandson of Harold Hellyer, son of Georgiana).
Tessa Montgomery and husband
He [Robert] has been in contact with Viscountess [Tessa] Montgomery (daughter-in-law of the Field Marshall) who is a descendant of the Alt family. Alt House in Nagasaki is preserved in Glover Park with other colonial houses of the late 18th Century.
Alt played a huge role in helping to launch the Meiji government, introducing Western technology and boosting commercial activity in Japan--as they moved on to Osaka and then Yokohama. The Alts moved back to England and sent Hellyer nephews to Japan to operate the tea business. One of the nephews, Frederick Hellyer, family gossip reports, married a Japanese woman who bore him a daughter who later became the wife of Admiral Tojo. I have found nothing that documents this however. He did marry a Boston girl named Georgianna Tirrell and established an American-based branch of the tea company in Chicago. It is not known how closely Frederick Hellyer's American/Japanese family associated with relatives in both England and Australia, though it fascinates this blogger to discover that W.J. Alt's daughter Anne in 1894 married Frederick Arthur Montague Browning, "father of the British airborne forces." 

Their son, Frederick Arthur Montague "Boy" Browning, was educated at Eton and then Sandhurst until 1915, in time to fight in "the Great War," and returning in 1924 to Sandhurst as Adjutant. He met Daphne du Maurier in 1931 and they married in 1932. By the end of the second World War he had been placed in command of Headquarters Airborne Troops, later to become known as the 1st British Airborne Corps, consisting of the 1st and 6th Airborne Divisions, and the Special Air Service Brigade. He worked on the image of his unit and chose the maroon beret to "reinforce the feeling of their belonging to a brotherhood." He served from 1944 to 1946 as Chief of Staff to Admiral Lord Louis Mountbatten, the Supreme Allied Commander South East Asia (SACSEA), whose nephew married the future Queen Elizabeth II.

French entrepreneurs then set up their own heroin refineries in Marseille and began to launder profits through French banks and presenting the Bank for International Settlements with huge balance of trade surpluses. Because of the Bretton Woods agreement made in 1944, which, for purposes of currency exchange, pegged the value  all foreign currencies on the U.S. dollar. That worked fine until U.S. prices began to skyrocket, making Europeans very unhappy that their own currency values were negatively impacted. French President De Gaulle's decision to cash in his country's trade surpluses in gold at the set price of $35 per ounce quickly drained the gold reserves. By 1971 America had run out of it and unilaterally closed this window through which gold was freely handed out. 

The problem did not come as a surprise. The fact that Richard Nixon chose John Connally to head the Treasury Department was no accident. This "long, tall Texan" had not only been a protege of Lyndon Johnson, but was also the favored successor chosen by an obscure little lawyer with glasses and a limp, tapped to be Dwight Eisenhower's Secretary of the Navy in 1953 and Deputy Secretary of Defense in 1954 until 1955, when Anderson "retired from government" to work for Ventures, Limited. 

Anderson traveled to Egypt as President Eisenhower's special emissary in 1956 to attempt to negotiate with Nasser (Nasr) about terms of the Baghdad Pact, and then in July that year after Egypt "nationalized" the Suez Canal, he went to talk to Saudis about what America proposed to do about Nasser. As a result of Anderson's secret talks, according to one historian, William J. Bowers:
President Eisenhower wrote Dulles at the NATO summit affirming his conviction to back Saud despite the temporary set back posed by Nasr’s popularity. At a meeting of the National Security Council a little over a week later the administration decided to support Saud instead of joining the Baghdad Pact. This was due primarily to the administration’s belief that Nasr was a communist threat, one which the pact was not conceived to oppose. So, a regional rival to Nasr needed to be created. In exchange for Saud’s leadership, the Americans were willing to promise the king that the U.S. would not longer pursue joining the pact...Eisenhower’s prime motivation in building up King Saud as a major figure in the Middle East was his concern to guarantee greater access to Middle Eastern oil for Western Europe. The president was convinced that the dissolution of Western Europe due to economic difficulties could be avoided by an infusion of Saudi petroleum.
In Chapter 20 of his book, The Great Heroin Coup, Henrik Kruger mentioned Mitchell Werbell's  purchase of the B.R. Fox Company as a front for some weapons transactions negotiated with the Central Intelligence Agency's Lucien Conein. Kruger profiled Conein in chapter 14, which QJ covered previously. 

Kruger, unfortunately, failed to follow up on the Fox Company, after quickly mentioning that it served as a link between WerBell and Lucien Conein in August 1976. 

Not only did Quixotic Joust explore exactly what that link was, but we dug up much more information about who set up the B.R. Fox Company, as well as who it was within the CIA who wanted to understand what was going on with WerBell.

Who was Mitch WerBell, really?

His Security File
The security file for Mitchell WerBell consists of 158 pages and was apparently compiled by Jerry G. Brown, Deputy Chief of the Security Analysis Group (SAG), at the request of Bruce L. Solie, Chief of the Office of Security (OS).*

On August 14, 1959 WerBell requested approval for volunteer status with Central Intelligence Agency, but two months later advised that he was no longer interested. That date in August the CIA was deeply involved with Trujillo in the Dominican Republic.

The first document furnished by the RIF check came from the War Dept, showing his service record in Army and application to OSS when he was stationed at Fort Monmouth, N.J. His application was dated on February 10, 1945 and signed in Kunming, China. This application provides a great deal of information about WerBell's background.

(Coincidentally, Bernard B. Spindel's military enlistment in the Signal Corps took place at this same Army base in November 1942.)

As "neighbors," he listed, then struck through, the name Gen. George L. VanDeusen (the General was commanding officer of the Eastern Signal Corps Training Center Fort Monmouth, New Jersey, from 1940 to 1944); Mrs. Geraldine Thompson, resident of Brookdale Farm, Lincroft, N.J. (a friend of Eleanor Roosevelt and then president of the Visiting Nurse Association at that location); and  Marshall P. Blankarn of nearby Rumson, from a family of stockbrokers. WerBell stated he attended the Stevens School in Philadelphia, 1924-30, then the Fork Union Military Academy in Virginia, 1932-36, followed by one year at VMI. 

He then returned to Philadelphia and studied advertising at Charles Morris Price until 1941. However, this seems to contradict the information he gave concerning where he lived during the same times. From 1934 until 1938, he lived in Ventnor, N.J.; 1938-42 in Philadelphia; September 1942 until April 1943 in Rutherford, N.J. and December 1943 until August 1944 at Brookdale Farms in Lincroft. In another section he admits to having been a member of a ship's crew for about nine months in 1937-38, spent traveling around Central and South America and parts of Europe.

However, a declassified CIA document clearly indicates that as early as July 1974 the CIA was using the space subleased by the DEA from WerBell's company, a Georgia corporation known as Central Investigative Agency, set up on May 31, 1973. The document is a cable sent to CIA Director William Colby to report that the CIA had been informed from George Kenny of the Atlanta FBI office that a former Atlanta policemen working for Werbell's company in Washington, D.C. had notified the FBI that Conein was using this office under name of a limited partnership called Electronic Surveillance LP out of Suite 1201-A of this building during July 1974, a few weeks before Richard Nixon resigned.

Less than a year after WerBell was acquitted of this conspiracy, along with several others, co-defendant John Nardi died when a shrapnel-filled car bomb, planted on a stolen car parked next to his Oldsmobile, was detonated by remote control. Nardi, was reputed to be vying to fill a Teamster post left vacant. More details of who was involved in this intrigue with WerBell are set out in Ronald L. Ecker's essay, "Our Man in Powder Springs."

We know from Robert Morrow's book, First Hand Knowledge, however, that somewhere in the building attorney, Mickey Wiener (a/k/a Myron Weiner), formerly of Roselle, N.J., had an office during the same time-frame to serve as a lobbyist for criminal associates like LJB's friend, Bobby Baker. Peter Whitmey wrote in his essay, "The Morrow-Kohly-Nixon Connection," published in November 1992 in The Third Decade, that, not only was Weiner's office in the LaSalle Building, but that Mario Garcia Kohly had an office across the street at 1025 Connecticut. Maybe someone in 1971 was afraid that Spindel was hinting that he knew something about who was working against President Kennedy from this very building.

One location brings all the scheming characters together. Strangely enough, they each had a separate connection to the Bahamas. Keep that island nation in mind as we explore each character who appears in our tale of intrigue. 

Bernard Bates Spindel

Bernard Spindel was born in 1923 to a Russian immigrant who worked as a longshoreman on New York City's docks. After three years of high school, in 1942 Bernie enlisted in the Signal Corps at Fort Monmouth Red Bank in New Jersey and was trained as an electrician. We're talking analog electronics in those days, and Bernie was among the greatest, we are told.

Once the war was over in 1945, Bernie expected to be released from his military service, but had to sue the Army to force them to let him out of his commitment. The lawsuit made the news, which may have caught the attention of union officials, who quickly added the new civilian to their list of vendors. The best wiretapper in the business was hired by James R. Hoffa and, in the mid-50's was prosecuted as a co-conspirator with the union boss for wiretapping Teamsters Union's Local 337 offices in Detroit. Just before Christmas in 1957 the first trial ended in a hung jury--11 to 1 for conviction. Their second trial in 1958 resulted in acquittal.

Hoffa would be tried for conspiracy again in Nashville in 1962, and subsequently (after Jack Kennedy's death) for jury tampering. During the tampering trial Spindel testified that Hoffa's defense attorney hired him to counterspy on government agents (taking their orders possibly from Bobby Kennedy who was still Attorney General in LBJ's Cabinet), who had Hoffa's hotel under surveillance, and that he had monitored the agents' radio conversations. Spindel had also been the one to ask Fred Otash on the West Coast to wiretap Marilyn Monroe's bedroom to get evidence for Hoffa to prove the Kennedy brothers were each having sex with the star.

Throughout the 1960s his name was connected with an office in the LaSalle Building (demolished in 1980 to make way for a building with the address of 1717 K Street NW), just north of Farragut Square, where it was alleged he made and sold bugging and wiretap equipment. The May 20, 1966 issue of Life magazine gave him an amazing spread with full-page photos of him installing surveillance equipment as a salaried employee of his own corporation, B.R. Fox Co. According to Life, "Spindel claims to have vault full of vital tape recordings within easy reach of his beneficiaries, just in case...'Just say I'm well insured,' he says." 

" to have vault full of vital tape recordings within easy reach of his beneficiaries...well insured."

The "insurance" Bernie allegedly carried was the business called the B.R.Fox Co., which reportedly owned
a "vault full of vital tape recordings," left to his wife and children. As far as we have been able to ascertain, however, the company's name was not borrowed from his wife, despite what Luce's magazine as well as government documents have reported. 

Numerous genealogical studies reveal his wife's name was actually Martha Jean Stuart, an Army-trained nurse from Montana, whose mother was a Swedish national and her father was one of the sons of miner Granville Stuart and his Shoshone wife. Shortly before she was born her father was jailed for not supporting her mother and brother. 

The 1930 census shows Albertina (Lofgren) Stuart was confined in a mental hospital in Warm Springs, Montana, and the children were then placed in the Montana State Orphans' Home in Twin Bridges. Albertina died in 1941. 

Jesse Granville was adopted by the Hain family at the age of nine, and Martha, who went by Jean, was adopted by a different family--Monroe Judson and Myrtle Griswold, farmers in Cohagen, who adopted two other children as well. Jean ran away from her new home when she was 16, went back to Lewistown, Montana, and apparently joined the WACs under her birth name.

Nine years after Spindel's death, Martha married Franklin Kellogg "Ozzy" Glasier. Glasier had lived for years with his second wife, formerly Olive May Guillotte, in Ankara, Turkey, where, as it was reported in 1958 in a Salt Lake City newspaper, he was a "civilian attaché to the U.S. Military Aid to Turkey program ... as a special adviser to the Turkish army." Mrs. Glasier was quoted by the newspaper, which reported:
The Turkish people didn't seem much concerned about Russia's Sputnik, according to Mrs. Glasier. "They like America and I don't think they give Russia much credit for accomplishing anything." Turkish men, particularly in the rural areas, allow the women to do most of the hard labor such as field work and farming, she stated. However, she pointed out that, in the urbanized areas the upper classes live much like average Americans.
Glasier's first marriage to Gwendolyn Frances Glasier ended in divorce in 1942. They were married before 1935 and had lived in Honolulu, Atlanta, and Santa Cruz, California, before the divorce. They lived in Atlanta during the years 1937-39, at about the same time Mitchell WerBell first arrived there. We will return to WerBell shortly.

Three years after the spread appeared in Life, Bernie was convicted of using his bugging equipment to tap the phone of Kenneth Klein, attorney for Diane Brown Hartford, a former model from Philadelphia, who was then in the process of divorcing the millionaire grocery heir, G. Huntington Hartford II.

In May 1972, just a month before the Watergate break-in, whoever was the actual owner of Spindel's company sold it to Michael John Morrissey, who operated it as the B.R. Fox Electronics Company until 1974. At that point, who should appear on the scene but Mitchell WerBell?

In 1975, after names of persons involved in Spindel's former company hit the news, the CIA denied any involvement with them or any knowledge of the company known as B.R. Fox. ]
Burnstine had been born in Chicago but grew up in Florida, living in a $650,000 house in Fort Lauderdale, protected by a 350-pound lioness who mauled a small neighborhood boy, almost killing him in 1974. He was then president of Florida Atlantic Airlines, owned by Leasing Consultants, Inc., and was indicted that same year for a conspiracy with Congressman Bertram L. Podell (Democrat, New York) for activities dating back to 1968. 

Podell had been paid to influence federal agencies in selecting Burnstine's airline for an air taxi route to the Bahamas. Burnstine's earlier airline, Florida International Airways, Inc., made headlines in June 1973 when its Lockheed Lear Star was found abandoned on 47th Street of North Golden Gate subdivision outside Naples, Florida. 

Richard H. Silkey was piloting the plane during a training flight from the Bahamas to Tampa, when he "accidentally feathered the wrong engine when engine trouble developed in the port engine," Burnstine admitted to the Naples Daily News reporter. 

The airline had two prior emergency crash landings, in Jamaica and Bahamas, under its belt, resulting in deaths. Burnstine himself died in a June 1976 crash after introducing the WerBell's co-defendants Cunningham and Nardi to DEA agents posing as smugglers.]

Without Burnstine to testify for prosecution in the August conspiracy trial, the parties stipulated that "WerBell recruited Bell, who recruited Cunningham, who recruited Franklin, who recruited Nardi." What tied WerBell to the perpetrators of the drug deal was his connection to Lucien Conein, whom WerBell had known during their OSS days in Kunming, China. 

The defense strategy was to have Conein testify that he was a high-level DEA intelligence official and former CIA agent, who engaged WerBell to create assassination devices for the DEA to use against drug smugglers. Then Werbell found the smugglers with Burnstine's help, apparently enticing one of them to find others. Conein's testimony revealed that at the time this so-called plot was hatched, the DEA was using office space in the same building--LaSalle Building at 1028 Connecticut Avenue NW, Washington, D.C.--where a deceased expert in wiretapping and bugging had his office for several years.

This office had once been that of Bernard Bates Spindel before his untimely demise in 1971 and appears to have been used by his successors, despite the attempt by Howard Ray Gibson to disguise that fact. Conein and Muldoon were in contact by June 1974 ostensibly, Conein claimed, for DEA to purchase surveillance equipment from the "former" CIA agent, now working for one of WerBell's companies.

Note from above continued: Five years after the pictures of Spindel appeared in Life, he died at the youthful age of 48, There is an insightful article about Mitchell WerBell written by Ronald L. Ecker entitled "Our Man in Powder Springs," and a fascinating 1981 interview with Robert Eringer from SAGA magazine. 

What other sources have failed to research, however, is WerBell's genealogy. His father, John Michael WerBell, was a bacteriologist who owned a laboratory in Philadelphia at N. 5th and Spring Garden--the WerBell Patho-Bacteriological Lab. 

The census record for 1920 lists John Michael as having been born in New York in about 1888 to a Jewish father from Strasbourg and a mother from Rumania. The infant Mitchell lived with his parents in the home of his grandmother, Sarah Goldich. 

Ten years later Mitchell WerBell's father claimed to be a physician, now with two live-in servants, though he had told census workers he had not been to school. His death, according to the American Jewish Year Book, occurred in Philadelphia on December 1, 1933, and it listed him as a 47-year-old "physician, cancer research worker, Russian Army veteran, cited for valor." 

It is not clear why he would have fought for the Russian Army since he had claimed to have been born in New York to French and Rumanian parents.

Less than three miles away from the Goldich residence, where this so-called lab was based, another mysterious family named Cummings lived in their row house at 2917 N. Hancock. The father aged 60 in 1910, had arrived in the United States from Ireland following the U.S. civil war and had raised three sons--Sam Jr., Thomas and Robert--with help from his second wife, Martha.

Mitchell's mother, Rebecca Goldich WerBell was born to a Jewish family of immigrants from Russia--Louis and Sarah Goldich--who operated a grocery store near the Delaware River waterfront in Philadelphia, the city where Mitchell would be born 19 years later. Louis died in 1907, survived by a large family of merchants. 

Rebecca (Reba or Beckie) married Philadelphian John Michael WerBell in 1916. By 1940 Max Goldich, Reba's brother was the superintendent of the Biarritz Apartments (owned by Herbert V. Apartments Corporation) in Atlantic City, New Jersey, one block from today's Tropicana Casino. Max's name was listed for about 12 years as a member of the Jewish Publication Society in Philadelphia, and he moved from that city (4618 N. 13th St.) before 1930 and turned up selling real estate for attorney Joseph Varbalow, whose Russian family had lived close to the Goldiches in Philadelphia. 

An honors graduate in law from the the University of Pennsylvania's class of 1917, Varbalow moved to Camden, N.J. and practiced at 227 Federal Street, almost directly across the river from where WerBell grew up--less than four miles away via the Benjamin Franklin Bridge. 

Camden is 60 miles west of the Atlantic seashore, where the Herbert V. Realty Company was primarily operated by Joseph's eldest brother Harry and his son Herbert, Mitch WerBell's maternal uncle and cousin. By 1926 Joseph was a prosecutor, and by 1934 a judge for Camden's city district court. 

China Burma India vets welcomed home.

As for Mitch WerBell himself, according to immigration records, by 1936 he was a junior officer aboard the Standard Fruit Company ship Gatun, operating to the ports of New Orleans and New York. In an oral interview, he revealed that he joined the OSS in 1942. By 1945 we find his name listed as a second lieutenant on the Army transport ship, General A.W. Greely, which ferried Chennault's veterans of the China-Burma-India campaigns from Calcutta to New York. In 1951, a listing appeared in the city directory of Atlanta for an advertising agency called WerBell and Magruder, the latter being Peyton M. Magruder, an aeronautical engineer, who designed the Glenn L. Martin Company's B-26 Marauder.

His wife, Hildegard, also was born in Pennsylvania, in Berks County, where her father, Hugo Hemmerich, German-born general manager of a company that manufactured hosiery in Reading and Wyomissing. Throughout the mid-thirties the mill dealt with union disputes and threats of strikes. Hildegard WerBell's brother, Rolf Hemmerich, was a chemical engineer at Shell Oil Co. and retired from there in Houston around 1990. 

*SAG was a branch of the Central Intelligence Agency's Domestic Contacts section, i.e. OS/SAG. Solie in 1978 succinctly described the OS function in a deposition:

His description is so succinct that it is of no help whatsoever in drawing a distinction between it and the other two security agencies in the Agency. It appears to mean that OS reviewed all relevant material in government archives to determine whether certain information should be "classified" to protect the identity of agents and assets or could be declassified, though Solie claimed to have counterintelligence duties also. His boss was the Director of Security, Howard J. Osborn.

SAG, however, was not part of the Counter Intelligence Division, which had its own Research and Analysis branch within the Domestic Contacts section, i.e. DC/CI/RA,  which was headed by Ray Rocca. The CI office assigned 201 file numbers to the subjects of their research; for example, when CI opened its "personality file" on Lee Henry [sic] Oswald on 9 December 1960 (more than a year after his defection to the USSR), his number became 201-289248, and the first document in that file was addressed to Headquarters, RI (short for Record Identification) to determine whether the subject could be identified in any government agency; all such files were collected, and each document in the 201 file also had an RIF number.

In Bill Simpich's excellent essay entitled, "State Secret: Wiretapping in Mexico City, Double Agents, and the Framing of Lee Oswald," he talks about yet another security division under the Domestic Contacts section -- Personnel Security Division (PSD) which dealt with outside activities of agents, each of which had to be cleared by a different section headed by W. A. Osborne. Thus, there were at least three distinct groups within the Agency creating different types of security files on persons of interest. A very fine line ran between them, which was not always well delineated, even to those who worked within each division, and the line is made even more difficult to discern because the information remains classified, e.g. see this 1965 annual report. Simpich has published a series of articles about security matters (republished in QJ here) and at OpEdNews, which offer great insight into the subject of security matters within the CIA.

WerBell's security files were set up by OS/SAG, we will explore what meaning that fact has by looking at its own personnel.

What can we learn about Solie and his interest concerning WerBell and Resorts International? All that is publicly available comes from information learned about his wife:
Mary Elizabeth Matthews Solie
Birth:     Mar. 21, 1918, Peru, Nemaha County, Nebraska, USA
Death:     Mar. 7, 2009
Parents: Homer L. Matthews, Jr. and Clara Hosterman Matthews.
She graduated from Peru State Teachers College in 1939 with a Bachelors Degree in Education. She then taught school in Taylor, NE. She also attended Iowa State Univ. for one year. She was married Feb. 22, 1944 in Marion, AR to Lt. Bruce L. Solie. They lived in Memphis, TN and Homestead, FL. Her husband was then sent overseas. When he got back to the states they moved to Badger Village, WI, where he went to school. In 1951 they relocated to the Maryland suburbs of Washington, D.C. (where he worked for the Central Intelligence Agency) until he retired in 1979. Preceded in death by her husband, Bruce Leonard Solie (1917-1992), parents, and infant sister. Mary is survived by son John Solie and daughter in law Susan Solie Wachtler and son in law Frederick, daughter Nancy Solie and son in law Paul Logue; 5 grandchildren, and 3 great grandsons; a sister Louise Shires. Mary was almost 91 when she passed away.

Wednesday, February 5, 2020

Selecting an Ally from Oil Rich Countries

Middle school friends?
History tells us that America's choice of the most strategic ally in the oil-rich middle east in the twentieth century is not far different from choosing a best friend in middle school. All involved are uncomfortable and confused, and often erupt in jealousy and threats when they lose favor.

In August 2018 I published here a long-researched piece called "Within the Netherworld of International Currency Exchange Rates," which helps us understand the financial crisis that haunted Nixon on a daily basis during his time in office, as threats were hurled at him from trade partners and military allies alike. Another piece, "Saudi Arabia: the Nixon Years," gives a broader overview from an historical perspective.

During Nixon's first term, Secretary of State William P. Rogers had negotiated, and "international oil companies" had agreed with six of the ten OPEC countries in Tehran on February 14, 1971, to a five-year oil tax and price agreement. Those six countries of the Persian Gulf did not include Libya, Algeria, Indonesia or Venezuela. The terms gave the six countries (Abu Dhabi, Iran, Iraq, Kuwait, Saudi Arabia, and Qatar) a 30% increase on their price for oil with other increases through 1975. Just prior to that point in time, Nixon and his cabinet officials tried to maintain a balancing act between Iran and Iraq, but the balance began to tilt to Iran after the agreement was signed.

According to Foreign Relations, 1969–1972, Volume E–4, Iran and Iraq, in the Office of Historian Summary:
The Nixon administration’s tilt toward Tehran led to significant shifts in its policy toward Iran and Iraq in 1972. First, the United States abandoned its sporadic efforts to rein in the Shah’s extravagant military spending. During his May 1972 visit to Tehran, Nixon promised to sell the Shah any American arms (short of atomic weapons) that he desired. Second, at the same meeting, the President conceded the Shah’s point that Iraq, now a close Soviet ally, was a security danger to the Gulf region.

To help keep the Ba’athist regime [Iraq] off-balance, the U.S. Government began to support the Iraqi Kurdish rebellion under Mullah Mustafa Barzani in July 1972. Although the Shah had funded Barzani for years, Washington had resisted Kurdish appeals for aid on the principle of non-interference in the internal affairs of other countries. After the Iraqis signed a treaty with the Soviets in April 1972, however, U.S. officials “particularly in the Central Intelligence Agency (CIA)” agreed that the threat from Baghdad warranted U.S. attention.
Rogers resigned as Secretary of State as of September 3, 1973, about ten months after Nixon fired Richard Helms as Director of the CIA. Henry Kissinger replaced Rogers and, only a week after Rogers' departure, King Faisal of Saudi Arabia issued a dire warning to the Nixon administration:
"America's complete support of Zionism against the Arabs makes it extremely difficult for us to continue to supply U.S. petroleum needs and even to maintain friendly relations with America."
In simplest terms, the oil shortage enforced on Americans was caused by the U.S. trying to pick two "best" friends.

It was apparent that King Faisal was speaking not only for Saudi Arabia, but purportedly for all the OPEC countries (Abu Dhabi, Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Qatar, Saudi Arabia, Venezuela), which were bound by the terms of the 1971 Persian Gulf Agreement. At the same time, however, a counter-threat came from Israel to boycott U.S. oil companies should the U.S. government demand that Israel return Arab land occupied since 1967. Nixon decided to ignore the warning by Faisal, thus appearing to tilt in favor of Israel and to allow the Shah of Iran to control the balancing scale of Muslims and Christians in the Arab world. Roham Alvandi wrote in 2012 that Mohammad Reza Pahlavi (the Shah of Iran):
had normalized Iran’s relations with the Soviet Union and now sought Iranian primacy in the Persian Gulf in the wake of Britain’s with-drawal from the region in 1971. Mohammad Reza Shah had seen five American presidents  pass  through  the  White  House;  each  in  turn  had  frustrated  and disappointed him in his ambition to make Iran the region’s leading power. But now, under the Nixon Doctrine, the United States would rely on the shah to maintain stability in the Persian Gulf.
Kissinger and Nixon therefore ignored Faisal's warning, possibly believing the Saudis could be kept in line by the Shah of Iran, while they put more value on America's relationship with Israel. That decision, which would prove to be a mistake, was taken during the course of Nixon's desperate determination to be reelected in 1972--leading to the Watergate tragedy.

Richard Helms, Director of the CIA, was also caught up in Watergate by refusing to tell the FBI not to investigate Nixon's imbroglio at Watergate for national security reasons. He was fired shortly after the election, in the second week of November 1972. But because he did not tattle about it, he was allowed to become the next Ambassador to Iran. Thomas Powers would later write in Rolling Stone:
Because the CIA put the shah in power, Iran is an important bulwark in the defense of the Persian Gulf oil states, the U.S. embassy in Tehran is huge, demanding the talents of an administrator, and the CIA runs a number of major programs in Iran such as electronic listening posts and the like. It was a congenial job of importance, in other words, and Helms may also have concluded it would not be a bad idea to get out of Washington.

When Powers published his article and book about Helms in 1976, nobody seemed to know that the Iranians, who had always been so important to British oil interests, were even then in the process of being replaced by the Saudis, with whom the Americans were becoming more and more dependent for oil. Helms probably knew that, when he asked to be posted to Iran where as Ambassador he not only continued to work with the Shah's secret police force, SAVAK, but he secretly monitored and mentored his replacements from his post in Iran.

George Bush, too, must have known. He did not directly succeed Helms as CIA Director, but he was not far behind, appointed by Gerald Ford to replace William Colby, who had just revealed  to Democrat Frank Church's Senate Committee a multitude of evils committed by the intelligence agency.

Between the time Bush, as head of the Republican National Committee, had advised Nixon to resign in August 1974, and Colby's resignation from the CIA, Bush had been very busy recruiting young Saudis to set up CIA-sponsored businesses in the United States, to ensure their oil wealth would be invested here rather than abroad.

Training Saudis to Develop Their Oil

 Ever since 1938, when oil was discovered in Saudi Arabia, American men have recognized a need to control the family who owned the wealth that flowed from that oil. Americans were not the first however. The British had discovered oil in Persia (now Iran) in 1908.

The first American-educated Saudis were scholarship students sent by Saudi Aramco shortly after WWII to study petroleum engineering. They often chose Princeton (near the former headquarters of Standard Oil of New Jersey) or the University of Texas. None of the big universities shunned them, however. California, whose big oil companies owned shares in Aramco, also courted princes such as Ali Abdallah Alireza, who attended UC Berkeley in 1945 and completed a master's degree in geology by 1947. President Gerald Ford would welcome Alireza to U.S. as Saudi Ambassador in 1975.

Another Saudi scholar, Ghaith Pharaon, whose father was an important adviser to King Faisal, had received an MBA from Harvard, as well as having studied at Colorado School of Mines (1958-61) and Stanford (1961-63).

Occidental board chairman Armand Hammer, fighting a corporate takeover by Standard Oil of Indiana,  had at first mentioned unnamed Arab interests as having purchased a million shares of Occidental Petroleum, identifying the individual investors by name in late December that year, the first time Pharaon's name saw print, only a few months after President Nixon's resignation.

In 1975 Pharaon achieved even more recognition when he acquired shares in Detroit's Bank of the Commonwealth -- 80% of the Barnes family's controlling stock in that bank, which resulted in his owning 42.4% of the preferred shares and 31.2% of the common, according to AP reporting.

On May 7, 1975 President Ford signed E.O. 11858 entitled "Foreign investment in the United States," which created the Committee on Foreign Investment in the United States (CFIUS). Only then did  George H. W. Bush officially relinquish his position as head of the Republican National Committee, moving into his office at the Central Intelligence Agency.

Deep Politics and John Connally

The most intriguing reporting about the new Arab wealth appeared in Texas Monthly magazine (April 1975), where an unidentified author indicated that Pharaon, as a foreign national who was forbidden to take a seat on the board of directors of the Detroit Bank of the Commonwealth, would be represented on that board by Frank Van Court, an attorney associated with the Houston law firm of Vinson, Elkins, Searls, Connally & Smith--of which John Connally was senior partner.

Cashing in on Saudis' oil weath
Harold Melvin Hyman, in his book, Craftsmanship and Character: A History of the Vinson & Elkins Law Firm, identified Van Court as one of Connally's close associates (pp.357, 378).

Frank Van Court had been born in San Angelo, Texas, but grew up on a ranch just outside of Crane, Texas. He earned a  place at Rice University, studying economics, before obtaining his law degree at the University of Texas in 1968. Within less than ten years, he left former Governor John Connally's Houston law firm to work for only one client--Saudi Arabia's wealthiest businessman in the United States, Ghaith Pharaon. In 1978 Van Court represented Pharaon in his investment in Dallas' Plaza of the Americas.

Khalid bin Mahfouz
Texas Monthly writer Robert Barnstone reported two and a half years later, in November 1977, that John Connally, former Secretary of Treasury for Nixon (Feb. 1971-June 1972) was entering into a partnership with Saudi businessmen Ghaith Pharaon and Khalid bin Mahfouz, to buy a Houston bank--Main Bank of Houston--along with Frederick Erck of Alice, Texas. Since 1973 Erck had also been Connally's partner in the First City National Bank of Floresville. Main Bank would be mentioned again in 1991when evidence surfaced linking that bank to the Bank for Credit and Commerce International (BCCI) scandal.

Fred Erck was married to Ann McGill Erck and managed his wife's ownership of a one-third interest in La Paloma Ranch, —22,000 acres of land in Kenedy and Kleberg counties (King Ranch country), together with  a 1/3rd of 1/8th non-participating royalty interest in the cotenants' share. Bankruptcy by the McGills in 1990 put the property into the hands of Lee M. Bass, one of the notorious heirs of the Sid Richardson fortune.

The Ercks--in Texas' heyday of oil production--saw more oil and gas income than they knew what to do with, but by 1973 Texas crude production had been supplanted by Saudi Arabia. In September 1973 Fred Erck, then a 33-year-old rancher, expanded his banking portfolio by buying control of the First City National Bank of Floresville with former Texas governor, John B. Connally. A life-long Democrat, Connally had first been appointed Secretary of the Navy and later picked to head the Treasury Department during Nixon's first term, following in the footsteps of his mentor, Robert Bernerd Anderson.

Connally had launched Democrats for Nixon in August 1972, just weeks after burglars were busted in the Watergate offices of the Democratic National Committee. Fortunately for Connally, the burglary, though detected, did not prevent Nixon's re-election. The Texas Democrat, as Secretary of the Treasury, became the man who implemented Nixon's decision to end the Bretton Woods Agreement, originally negotiated by FDR's administration in 1944:
Nixon directed the suspension of the dollar’s convertibility into gold. He also ordered that an extra 10 percent tariff be levied on all dutiable imports; like the suspension of the dollar’s gold convertibility, this measure was intended to induce the United States’ major trading partners to adjust the value of their currencies upward and the level of their trade barriers downward so as to allow for more imports from the United States....
Group of Ten (G–10) industrialized democracies agreed to a new set of fixed exchange rates centered on a devalued dollar in the December 1971 Smithsonian Agreement. Although characterized by Nixon as “the most significant monetary agreement in the history of the world,” the exchange rates established in the Smithsonian Agreement did not last long. Fifteen months later, in February 1973, speculative market pressure led to a further devaluation of the dollar and another set of exchange parities. Several weeks later, the dollar was yet again subjected to heavy pressure in financial markets; however, this time there would be no attempt to shore up Bretton Woods. In March 1973, the G–10 approved an arrangement wherein six members of the European Community tied their currencies together and jointly floated against the U.S. dollar, a decision that effectively signaled the abandonment of the Bretton Woods fixed exchange rate system in favor of the current system of floating exchange rates.
Actually, only the U.S. Dollar would "float," while the other currencies would be pegged to it under an agreed ratio. The U.S. was given the power to set the price of crude oil in dollars, a power that, according to James Norman, the U.S. would exercise in following years as an economic weapon against "enemy" nations, notably China and the U.S.S.R.

John Connally would be forced out of office by the "milk scandal" and tried in Washington, D. C. in April 1975. His indictment, announced in late July 1974 made headlines only two weeks before Nixon's resignation. Texas Monthly also ran an intriguing piece about Connally's trial for accepting two bribes of $5,000 each to influence an increase in milk price supports from an American association of dairy farmers. Those were the days before anyone dreamed foreign money could corrupt our politics.

The link between these seemingly disparate events is another Texan -- President Eisenhower's favorite--Secretary of Treasury Robert Bernard Anderson--who had long been John Connally's business and financial mentor. Anderson taught Connally that oil and money, unlike oil and water, do in fact mix quite well.

Wednesday, October 23, 2019

Saudi Arabia: the Nixon Years

"Politics, as we all know, is a game played by the powerful on a field of irony. 
And irony, just like politics, makes for curious bedmates…" Al Reinert
"Bob and George Go to Washington," Texas Monthly (April 1974).

Long Live the Saudi King 

Abdulaziz ibn Saud (full name Abdulaziz bin Abdul Rahman, or just Ibn Saud for short) had founded the House of Saud in 1932--deposing his half-brother, Muhammad Ibn Talal, the previous king. Once Ibn Saud deposed Ibn Talal, he arranged a marriage between one of his own son's and a daughter of the deposed King. This daughter, Watfa, married Musaed (Musa'id), a son of Ibn Saud, born in 1923 to wife, Jawhara of the Al Sudairi family. Jawhara's sister Haya was another wife of Ibn Saud and the mother of three of his approximately 40 sons by assorted wives. Ten of those sons rose to hold the title of Crown Prince and are pictured below.

Crown Princes of Saudi Arabia (click to enlarge)
Rashidi family, published 1997

Musaed and Watfa had a son, Faisal bin Musaed, born in 1944 before they divorced. Faisal was then sent to live with his mother's family, the Rashidis, of which Muhammad Ibn Talal, who died in exile in 1952, was a member. Meanwhile Faisal's father, Prince Musa'id, remarried, had other children, and did not hold any significant administrative positions--never viewed as a possible successor.

King Faisal bin Abdulariz was shot and killed in March 1975 by an estranged nephew, Prince Faisal bin Musaed bin Abdulaziz. By June 18 the nephew had been convicted and beheaded by Saudi leaders, who were quick to label him "deranged."

The 27-year-old assassin had lived in the United States from 1966 until 1973 while studying political science and obtaining a degree from the University of Colorado at Boulder in 1971. He then moved to UC Berkeley for graduate studies. Called a "radical" by his Saudi countrymen, he had attempted unsuccessfully to convince Saudi Arabia to put an end to Islamic rule.

Nixon's Balancing Act in the Middle East

In August 2018 I published a long-researched piece about the history between the United States and Saudi Arabia called "Within the Netherworld of International Currency Exchange Rates." That research helps to understand the financial crisis that haunted Nixon on a daily basis at the end of his first term and into his re-election.

During Nixon's first term, Secretary of State William P. Rogers had negotiated, and "international oil companies" had signed on, with six of the ten OPEC countries in Tehran on February 14, 1971, to a five-year oil tax and price agreement. The six countries of the Persian Gulf did not include Libya, Algeria, Indonesia or Venezuela. The terms of the agreement gave the six countries (Abu Dhabi, Iran, Iraq, Kuwait, Saudi Arabia, and Qatar) a 30% increase on their price for oil with further increases through 1975.

Just prior to that point in time, Nixon and his cabinet officials were attempting to maintain a balancing act between Iran and Iraq, achieved somewhat with help from the Kurds' resistance in Iraq. According to Foreign Relations, 1969–1972, Volume E–4, Iran and Iraq, in the Office of Historian Summary:
The Nixon administration’s tilt toward Tehran [Iran] led to significant shifts in its policy toward Iran and Iraq in 1972. First, the United States abandoned its sporadic efforts to rein in the Shah’s extravagant military spending. During his May 1972 visit to Tehran, Nixon promised to sell the Shah any American arms (short of atomic weapons) that he desired. Second, at the same meeting, the President conceded the Shah’s point that Iraq, now a close Soviet ally, was a security danger to the Gulf region. To help keep the Ba’athist regime [Iraq] off-balance, the U.S. Government began to support the Iraqi Kurdish rebellion under Mullah Mustafa Barzani in July 1972. Although the Shah had funded Barzani for years, Washington had resisted Kurdish appeals for aid on the principle of non-interference in the internal affairs of other countries. After the Iraqis signed a treaty with the Soviets in April 1972, however, U.S. officials “particularly in the Central Intelligence Agency (CIA)” agreed that the threat from Baghdad warranted U.S. attention.

King Faisal Issues a Threat

Rogers resigned as Secretary of State as of September 3, 1973, and Henry Kissinger replaced him. Only a week after Rogers' departure, King Faisal of Saudi Arabia issued a dire warning to the Nixon administration:
"America's complete support of Zionism against the Arabs makes it extremely difficult for us to continue to supply U.S. petroleum needs and even to maintain friendly relations with America."
Balance in the Middle East could no longer be achieved on a binary scale. With King Faisal, purportedly speaking not only for Saudi Arabia, but for all six OPEC countries bound by the terms of the 1971 Persian Gulf Agreement, the scale was almost impossible to manipulate, especially with Israel re-entering the fray--threatening to boycott U.S. oil companies if the U.S. government conceded to Faisal's additional demand that Israel "return Arab land it had been occupying since 1967."

Nixon had to choose between the demands of two strong allies--Israel or Saudi Arabia--while also keeping the Shah of Iran as a friend. All that had to be done for the Shah was to open the door for him to buy all the weaponry he could wish for.

Roham Alvandi wrote in 2012 that Mohammad Reza Pahlavi (the Shah of Iran):
had normalized Iran’s relations with the Soviet Union and now sought Iranian primacy in the Persian Gulf in the wake of Britain’s withdrawal from the region in 1971. Mohammad Reza Shah had seen five American presidents  pass  through  the  White  House;  each  in  turn  had  frustrated  and disappointed him in his ambition to make Iran the region’s leading power. But now, under the Nixon Doctrine, the United States would rely on the shah to maintain stability in the Persian Gulf.

Two Crown Princes Passed Over

Faisal had been the third King of the Saudis following the death of Ibn Saud. After Faisal was assassinated in 1975, as shown in the chart above, the succession followed in an orderly process until Salman became the new King of Saudi Arabia on January 23, 2015 following the death of his half-brother. Note that two crown princes were ahead of him to be king, one of whom was already deceased:
  • Talal bin Abdulaziz (died December 2018) and 
  • Nayef bin Abdulazriz (died June 2012).
Why were Talal bin Abdulaziz (whose son was the well-known and wealthy pro-American  Alwaleed bin Talal) and the sons of Nayef (notably Mohammad bin Nayef) skipped from the line of succession?

Reports leaked out in 2017 (shortly after President Donald Trump's inauguration) that Nayef was removed as a result of a plot organized by the man commonly known today as MbS, Mohammed bin Salman about whom it was said at the time:
The decision to oust Mohammed bin Nayef and some of his closest colleagues has spread concern among counterterrorism officials in the United States who saw their most trusted Saudi contacts disappear and have struggled to build new relationships.
And the collection of so much power by one young royal, Prince Mohammad bin Salman, has unsettled a royal family long guided by consensus and deference to elders.
Jamal Khashoggi
As early as 1989 while "Saudi intelligence ... was coordinating aid to the fighters as part of its cooperation with the CIA against the Soviet Union in Afghanistan," Jamal Khashoggi, who had traveled with the Arab mujahideen in Afghanistan, "criticized Prince Salman, then governor of Riyadh and head of the Saudi committee for support to the Afghan mujahideen, for unwisely funding Salafist extremist groups that were undermining the war." Jamal's rise "was linked with the Faisal clan — Turki and his brother Saud al-Faisal, the longtime Saudi foreign minister. Educated at Georgetown and Princeton, respectively, the Faisal brothers represented the thoughtful, moderate face of the royal family."

As for the Talal branch, James Wynbrandt wrote in 2010:
The attack [on September 11, 2001]  brought long-festering antagonisms between the two nations to the fore. The Saudis were blamed for exporting an intolerant brand of Islam and donating large sums to groups that supported terrorism. The United States was blamed for its unbending support for Israel, which was seen as the root cause of the attacks. Prince Alwaleed bin Talal, son of the founder of the Free Princes movement [formed in 1962 and ended in 1964], came to New York to express his sympathy and offered a $10 million donation for the victims, along with advice for the United States to rethink its Middle East policy. New York mayor Rudolph Giuliani rejected the advice and the $10 million donation, and the episode came to represent the vast gulf that had suddenly opened between the two longtime allies.
Prince Alwaleed bin Talal
Prince Talal and his son, in short, were, according to David Ottaway, "liberals" compared with their countrymen--a term traditionally used to mean those advocating more democratic reforms and limiting autocratic power of leaders. The father had been forced out the cabinet for his suggested reforms in 1961, but in 2007 he was again a member of the Allegiance Council, which was supposed to be consulted when one of the members of the ruling family died before another was admitted in his place. When Prince Nayef ascended as Crown Prince in November 2011 without consulting anyone, Talal resigned from the Council, watching his country became ever more undemocratic until Talal's death two months after Jamal Khashoggi's murder.

In 2015 Jamal had convinced the son of Crown Prince Talal bin Abdulaziz, Prince Alwaleed bin Talal, whom the Washington Post referred to as "a reform-minded Saudi billionaire," to finance a news channel in Bahrain. It was unfortunately removed from the airwaves by Bahrain after only 24 hours for featuring an "interview with a prominent Bahraini Shiite politician who had criticized the regime."

Jamal Khashoggi at Alwaleed's news channel

Two years after Jamal's plan to liberalize the media failed, Prince Alwaleed was arrested "plus at least 10 other princes, four ministers and tens of former ministers," as part of Crown Prince Mohammed bin Salman's plan to consolidate power, and Jamal fled the country.

Greg Olear wrote in Medium, after reports of Jamal's murder began to surface, that "Trump and Kushner both have skin in the game." He continued:
Saudi Arabia was the first state visit Trump made as president, a trip organized and pushed for by Kushner, who is chummy with MbS and has acted as the de facto ambassador to Saudi Arabia. Khashoggi was not banned from Saudi media for his criticisms of MbS, but rather for his criticisms of Donald Trump. More importantly, U.S. intelligence knew of a plan to lure Khashoggi back to arrest him, so the president and the de facto ambassador to Saudi Arabia must have also known. If they knew and did not share the information with Khashoggi, they are liable.
Alwaleed was released in January 2018, ten months before Jamal Khashoggi's murder. When he spoke in an interview with Fox News the following December, he sounded like a defeated man, one who had made a deal with his captors, whom he now insisted were honorable. It was a secret deal, so we may never know the truth.


"Saudi Arabia: Creation of the Petrodollar" has been in draft form for several years, being added to and edited as time permitted. Because of the length and complexity, I have decided to divide it into several parts. The next segment will follow soon.