I began the research for this essay shortly after the crash of Enron in October 2001, less than a month after airplanes rammed into the World Trade Center in New York, the Pentagon near Washington, D. C. and in Johnstown, Pa.
I was friends at that time with Catherine Austin Fitts, whom I met as members of a social media forum back in the day before Facebook or Twitter existed. "CIA Drugs," as the forum was called was an e-mail based list run by Kris Millegan. Daniel Hopsicker and Michael Ruppert, among many others, were also members.
At that time I was a lawyer, having spent 25 years of my life examining real property titles at several abstract and title companies in Texas, as well as working for the County Attorney's Office in Harris County. I attempted on several occasions to become involved in a traditional law practice but found the interaction not to my liking. I enjoyed digging into the history of a piece of land, sorting out the various owners and changes over a period of decades.
Catherine, with her knowledge of corporate capitalism, introduced me to a new aspect of history. She motivated me to find out what I could about one man she believed was at the core of the "conspiracy" which had destroyed the company she had built.
I saw my mission as being not unlike Dorothy's objective in "The Wizard of Oz," to retrace the steps from her farmland home in Kansas to the foreign territory of Oz. As she set out to find her way back home, everyone she encountered along the way told her, simply, "Follow the yellow brick road. These well-marked bricks will take you to the wizard, and the wizard has the power to get you back home."
It is hard to believe more than two decades have passed since I cobbled the bricks together to create what was first published online at news-makingnews.com. Kate Dixon, a disbarred California attorney from Oakland, whom I never met, worked as an investigator for another California attorney named Virginia McCullough. A financial consultant named Lois Battuello wrote an anonymous column for the Newsmaking News website based on knowledge she had about Napa Valley where her family had owned vineyards for generations. Somehow the website began putting online the "data dumps" I referred to as "my research".
Lois had an MBA from Stanford Graduate School and had worked in a bank in San Francisco controlled by former CIA Director McCone. It was her opinion that McCone, through his CIA connections, was involved with Kermit (Kim) Roosevelt in shenanigans in the wine country. I didn't understand any of that at the time and have only gained an inkling about it in all the years since.
Lois worked as a researcher for Daniel Hopsicker before his second book, Welcome to Terror Land, was published, but even he was not allowed to use her name. They eventually became estranged, as I wrote in Gangster Planet, Daniel's last book, which I completed the year after his death. By the time it was in print, Lois too was deceased.
Each "brick" of the research I compiled led me back to a piece of history I wouldn't otherwise have learned. Catherine visited me numerous times at my little Texas lake hideaway to which my husband and I moved to care for elderly parents. She taught me about "the pop," which is how corporate money is made on the stock market by opening branches of a public company. What I did not fully realize at the time is that what she described was Moneylaundering 101.
Catherine wanted me to help her learn who Pug Winokur was and why he had been used to destroy Hamilton Securities, which she created after leaving the George H.W. Bush White House, serving in the Department headed by Jack Kemp. I obliged, working naively by instinct as I stepped from one brick to another, using the tools I'd acquired by that time.
Pug Winokur and his Father
Enron's board of directors had all resigned during 2001 and 2002 with one very notable exception--Herbert Simon "Pug"
Winokur, Jr., about whom very little was known at the time.
We set out to learn his background and how he--and seemingly nobody else--survived Enron's collapse.
Pug was born in 1943 in Columbus, Georgia, while his father--H. S. Winokur, Sr.--was stationed at Fort Benning. Frederick William Winokur, Pug's uncle, had been married there in 1941 to Eleanor Lipman in a high society Jewish wedding in which Herbert Sr. was best man
and Eleanor's sister, Marjorie, was her maid of honor. Herbert married Majorie a year later, while serving in the U.S. Army Air Force at Fort Benning, and their names appeared in the Roaming 'Round gossip column by Ima Roamer in the Columbus (Georgia) Ledger of February 6, 1944.
Pug's dad had been awarded the Order of the Cloud and Banner (China), which indicated his involvement
in the China Burma India Theatre--an honor presented from the Chinese government of Chiang Kai-shek,
who fled to Taiwan
when the Red Chinese took over China.
More than 30 of such decorations were also awarded to the
Flying Tigers of Clare Chennault.
American troops in the China-Burma-India
Theatre were
commanded by Fort Benning's General Joseph Stilwell, the Deputy
Allied Commander under
Lord Mountbatten of Great Britain—the last viceroy of the British
colonial
empire in India, who was then assigned to Burma.
Of the numerous books
written about American activities in that area during the war, including that of the Office of Strategic Services, the best one, in my opinion, was the book written by Alfred W. McCoy, first published as The Politics of Heroin in Southeast Asia in 1972, which was updated in 2003 as The Politics of Heroin: CIA Complicity in the Global Drug Trade. McCoy wrote:
During the early 1950s the CIA had backed the formation of a Nationalist Chinese guerrilla army in Burma, which still controls almost a third of the world's illicit opium supply, and in Laos the CIA created a Meo mercenary army whose commander manufactured heroin for sale to American GIs in South Vietnam. The State Department provided unconditional support for corrupt governments openly engaged in the drug traffic.
Inlate 1969 new heroin laboratories sprang up in the tri-border area where Burma, Thailand, and Laos converge, and unprecedented quantities of heroin started flooding into the United States. Fueled by these seemingly limitless supplies of heroin, America's total number of addicts skyrocketed.
Unlike some national intelligence agencies, the CIA did not dabble in the drug traffic to finance its clandestine operations. Nor was its culpability the work of a few corrupt agents, eager to share in the enormous profits. The CIA's role in the heroin traffic was simply an inadvertent but inevitable consequence of its cold war tactics. (emphasis added)
The blurb for the new edition states "Maintaining a global perspective, this groundbreaking study
details the mechanics of drug trafficking in Asia, Europe, the Middle
East, and South and Central America. New chapters detail U.S.
involvement in the narcotics trade in Afghanistan and Pakistan before
and after the fall of the Taliban, and how U.S. drug policy in Central
America and Colombia has increased the global supply of illicit drugs."
Back in Philadelphia Peter Winokur, who was the father of three sons--Frederick William, Herbert Simon and Peter, Jr.--and a daughter Maxine (later famed poet laureate Maxine Kumin) was a wealthy pawnbroker living in a posh Germantown residence at 152 W. Carpenter Lane with his wife, Belle Doll Simon Winokur. When Herbert returned from war with his bride and small son "Pug," his father was still working
for the pawnshops founded by his grandfather.
Herbert had worked for the family's loan companies before his enlistment and returned to his career in consumer
finance--first at Federal Loan Co. and also to Rettew's Money Loan beginning in
1958, and Executive Consumer Discount Company founded in 1967. All were in Philadelphia.
These work
relationships ended in 1974, followed by his short association with George S.
May International, a business consultancy originally formed to promote golf. Also in 1974 H.S. Winokur Associates began operating a firm called Commercial
Utility Consultants, to "advise corporate clients on matters of
electrical and telephone usage." In many ways this business became a a model for what
Enron did with natural gas.
Marjorie's parents in Columbus, Georgia, had operated Paramount Chemical Company for many years. Ralph and Bess Lipman Winokur worked with Bess'
unmarried brother, Meyer Goldstein, who lived with the family both before and after Ralph Lipman's death in 1934, until Meyer's own death in 1942. The
company manufactured cleaning supplies and pesticides.
Marjorie
Lipman, born in 1919 shortly after her parents
moved to Columbus, Georgia from Detroit, Michigan, had driven a truck to
support the war
effort while her husband (Pug's dad) was deployed to India during World
War II.
Pug, A Harvard Man
Pug himself went to Harvard, where he received a bachelor of arts in 1964, masters in 1965, and Ph.D. in 1967 in
applied mathematics (decision and control theory). His first job out of Harvard, thanks to the war in Vietnam,
was with the U.S. Army, assigned to the Department of Defense in Washington, D.C., then headed by Robert S. McNamara, who had first served President Kennedy, remaining in office after Kennedy's assassination, in Lyndon Johnson's Administration.
McNamara
left the office in March 1968 to head the World Bank, and Clark Clifford, whose early government career had been tainted because of accusations of ties to Truman's clique from Missouri, was appointed to succeed him.
Clifford, already a lawyer in St. Louis when he entered the Navy in 1944, he was assigned to the Pentagon as an aide to Truman's controversial non-Annapolis educated Naval Aide Capt. James K. Vardaman, also from Missouri. Before Clifford joined the Navy, he had been a private attorney, who sold the Vardamans' St. Louis residence under a power of attorney [St. Louis (Mo.) Globe-Democrat, June 13, 1943].
Vardaman and Clifford had known each other for years as trustees on the board of the opera guild in that city, and their wives were invited as "Matrons" to the annual Veiled Prophet Ball. The Queen in 1941 was Barbara Wear, whose father, James H. Wear, was a brother of Mrs. George Herbert ("Loulie Wear) Walker, an investment banker, who left St. Louis for New York in 1920 and lived at Old Westbury, Long Island.
Democrat--Clark Clifford--Dupe or Dope?
The James H. Wear family lived in the same small section of St. Louis as Clark Clifford, a Democrat, who was given major credit for drafting the National Security Act of 1947 (creating the Central
Intelligence Agency and Defense Department) for President Truman. According to the Truman Library:
In the Spring of 1948, Palestine became embroiled in American domestic politics. Jewish votes were important to President Truman in the coming election. Key advisers, especially Clark Clifford, pushed him to stand firmly for UN partition to win those votes....He
was urged to recognize the new Jewish state that was certain to be
proclaimed when partition occurred. Others counseled against
recognition, arguing it would antagonize Arab states and jeopardize
American access to oil.
President
Truman's regard for Secretary of State George C. Marshall was
tremendous. The Secretary's opposition to recognition of a new Jewish
state in Palestine troubled President Truman and resulted in the
sharpest disagreement the two ever had.
Ironically, since Clifford had been the one person most responsible for convincing President Truman to oppose the State Department's advice not to recognize the new State of Israel in 1948, this same man, three and a half decades later in 1982, secured a banking license for a group of Arab investors who first sought him out in 1978. Could he possibly get a license to operate their Bank of Credit and Commerce International (BCCI) through First American Bancshares of Georgia?
Victor Palmieri
Lucky Lester, 1951
As Nixon took office in January 1969, Pug and two other Defense Department analysts started a private
consulting firm in Washington, D.C. called Inner City Fund with a Black man as the figurehead. Clarence D. “Lucky” Lester, a former Tuskegee airman, was
its president, ostensibly to promote minority entrepreneurship. Lester was a military
science instructor at Howard
University while still in
the military, retiring as a colonel in 1969. Col. Lester was then assigned to
the Office of the Secretary of Defense at the same time the Inner City Fund was
created. (See Obituary 20 March
1986 Washington Post)
In the spring
of 1968 the National Advisory Commission on Civil Disorders (Kerner Commission) issued its Report following the Watts race riots in Los Angeles, predicting more violence in the inner cities. According to an essay called "The War for Living Space" by Frank Morales:
It was during the early stages of staff recruitment that commission Deputy Executive Director Victor H. Palmieri "described the process as a war strategy." And so he might, given the overwhelming presence within the commission by the US military and police. Some of those commissioners, consultants and advisors included: Commissioner Charles B. Thornton, Chairman of the Board, Chief Executive Officer, Litton Industries; Commissioner Advisor on Private Enterprise, John L. Atwood, President and CEO, North American Rockwell Corporation; Commission Director of Investigations, Milan C. Miskovsky, "formerly connected to the Central Intelligence Agency.
Victor Palmieri
Several years after that report, Pug Winokur went to work for the man who was in charge of getting the report written--Victor H. Palmieri--who served a year as Ambassador-at-Large and U.S. Coordinator for Refugee Affairs in Jimmy Carter's Department of State under Secretary of State Cyrus Vance.
Palmieri's family had relocated to Pasadena, California in 1934, and he grew up poor in the Los Angeles area before attending Stanford Law School and later working for law firm O’Melveny & Myers, which represented Los Angeles's oldest land developers, Janss Investment.
Janss Investments
Janss developers had first focused on model irrigated farms in the San Fernando Valley,
originally acquired for development by a syndicate led by Harry Chandler,
business manager of the Los Angeles Times. The syndicate included Isaac Van Nuys, Hobart
Johnstone Whitley, and James B. Lankershim. Chandler was also closely aligned with William Randolph Hearst. Together they built the infrastructure that allowed Southern California to survive. California's further expansion, however, was dependent at that time upon acquiring more land to build upon.
According to Thomas C. Hayes, who published a profile of Palmieri in the New York Times,
"Railroad stocks belonged in the dustbin," the cover screamed.
Charles Bates "Tex" Thornton of California. Thornton, the head of
Litton Industries, had cornered the market on a vast number of different categories of government contracting. Another Harvard MBA white shirted executive was CEO of North American Rockwell, John L. Atwood, who had been on the
Industry Advisory Councilstarted by Robert McNamara in 1962.
Ironically, McNamara had been President Kennedy's second choice, behind a Republican, whose father had run E.H. Harriman's railroads for years:
"Robert Lovett, who declined the Defense post when offered him by Kennedy, was the most prominent of those who brought McNamara's name to the attention of the Kennedys. Lovett remembered the young officer from his World War II Pentagon days as the brightest of the management group that he had brought down to Washington from the Harvard Business School. He told Clark Clifford, another veteran of the Truman administration, that he saw McNamara as "the prize of the lot, and the Kennedy people ought to consider him for either the Treasury or Defense." [Lawrence S. Kaplan Ronald D. Landa Edward J. Drea, Volume V of HISTORY OF THE OFFICE OF THE SECRETARY OF DEFENSE, Alfred Goldberg, General Editor]
So was Robert Lovett--a partner of Senator Prescott Bush, Averell and Bunny Harriman, Knight Woolley and others--just being helpful when he advised President Kennedy to put Robert S. McNamara in charge of the Department of Defense, where he served during all of Kennedy's tenure and continued into that of Johnson's?
Call me a cynic. I think there was much more to the recommendation.
Inner City Fund (ICF)
One modern writer, who has clearly bought what the establishment has been selling us for decades, wrote a piece I came across while editing my old research. In introducing Oliver Thomas, the preface states:
Secretary of Defense Robert McNamara, National Security Adviser McGeorge Bundy, and Secretary of State Dean Rusk employed a “hyper-logical” method by which they believed they could correctly assess the outcome of an engagement in Vietnam. JFK’s stellar advisors adhered to a genealogy that found its roots in the “Wise Men” who were also considered the best advisors of their time during and after World War Two. Their names were William [Averell] Harriman, Robert Lovett, Dean Acheson, John McCloy Jr., George Kennan, and Charles Bohlen. Having found themselves in high ranking positions as lawyers, diplomats, and bankers after graduating from Ivy League institutions such as Yale and Harvard, they held an infallible air about them that made them extremely trustworthy.
I needed the laugh I had after reading that paragraph, dripping with hagiographic propaganda. Those in power thought they could trust the whiz kids and the wise men because they believed in the institutions that spat them out. They believed that men who worked for $1 a year actually forfeited any other income available to them from insiders trading on power. Those were the days before Donald Trump took office and played his hand out in the open, for all the world to see.
After Kennedy was assassinated in 1963, and LBJ had served one elected term, Nixon was inaugurated in 1969--the same year Pug Winokur's next employer--the Inner City Fund--was reconfigured into ICF International, which would be renamed ICF Incorporated in 1972. ICF was a successor seeking to take the place of many of the Litton-sponsored entities contracting with President Johnson's "war on poverty," not to mention the real war then building up in Vietnam, which fell into McNamara's bailiwick as Secretary of Defense.
Robert McNamara had received his MBA from Harvard Business School in 1939, where he returned to teach from 1940 to 1943. Then he joined the Air Force as a Captain in the Office of Statistical Control. He analyzed the efficiency and effectiveness of bombers, leaving us to wonder whether he may have been used by Joseph Heller as the prototype for General Peckham and his enthusiasm for bomb patterns.
Another younger Harvard Graduate School of Government professor, Richard G. Darman, later became a partner in ICF
Inc., by then called a management and economic consulting company. Darman had loads of government experience, having served previously under Nixon from 1970 to 1977 in five Cabinet
Departments (HEW, Defense, Justice, Commerce, and State).
Then there was James O. Edwards, who got an MBA at Harvard Graduate School of Business Administration in 1967 two years after getting his degree in Industrial Engineering (Operations Research) from Northwestern University. He went on to work in the Office
of Management and Budget (OMB) and was a deputy assistant secretary at the Department
of Health, Education and Welfare under Nixon, joining ICF in 1974.
Edwards took the company from being one with only $300,000 in annual revenue to a company that made $14.3million a year by 1982, mostly from federal contracts on energy and environmental issues. He also helped the company acquire 13 other firms as subsidiaries, which added their revenues to the holding company's total income.
That year, 1982, seems to have been the exact time Reaganites began looking for ways to transnationalize government contracting. At the same time the ubiquitous term "new world order" was raising suspicion that something extraordinary was about to take shape. It was also while George H.W. Bush was Vice President and put in charge of raising funds for President Reagan's foreign policy agenda of fighting an undeclared war in Central America.
Globalization, or Transnational Business
Meanwhile, in Australia, a company which would help to expand ICF's international horizons was also broadening its scope--Elders IXL--consisting of 35% of the equity in Elders Brewing, Elders Agribusiness and Elders Finance Groups. It was being floated by Elders Investments Limited, based in Hong Kong. Elders IXL had just acquired Courage Breweries (UK) and Carling O'Keefe Breweries (Canada), to make "Elders the sixth largest brewer in the world with Foster’s Lager fast becoming a global brand," according to the Financial Times of London.
What we discover, actually only now as we write this blog, is the following:
Kaiser Engineers Group, Incorporated, a construction, engineering and
design firm, operated in Oakland, CA, in 1973. Herbert F. Wulfekamp was
appointed Manager of the Architectural Department, Commercial and
Institutional Division of Kaiser Engineers in early 1973. (See
"Notices," Progressive Architecture, vol. LIV, no. 2, 02/1973, p. 132.)
Kaiser performed engineering work in Australia under the name of its subsidiary, Elders Group IXL Limited.
On
06/17/1988, Kaiser President Granville W. Holman announced that the
firm had agreed to a buyout by the Fairfax, VA-based firm, American
Capital and Research Corporation, for about $50 million.
The Washington Post
reported of this acquisition: "Kaiser, which had sales last year of
$550 million, participated in building such famous projects as the
Hoover Dam and the San Francisco Bridge. Both Kaiser Engineers and ACR
are privately held companies. Elders, a partner in the deal, will retain
control of Kaiser Engineers' Australian and Asian operations, while ACR
will take control of the rest of the engineering firm. Kaiser
Engineers, which has experienced financial difficulties in recent years,
will benefit from the money and contracts that ACR and its subsidiaries
will bring to the merger. For ACR, the acquisition of Kaiser will
provide additional engineering and manpower expertise.
Kaiser Engineers,
established in 1814, has expertise in solving problems involving
hazardous and nuclear wastes." (See Washington Post.com, "American Capital Acquires Kaiser Engineers Group," published 06/17/1988, accessed 11/04/2019.)
The American Capital and Research Corporation (ACR) was formed in Delaware on February 2, 1988, with its address shown as 9300 Lee Highway, Fairfax, Virginia. It was in the same building, no longer extant, as Triton Systems, which later moved to 10201 Fairfax Blvd, Ste 300, Fairfax, VA. Before a year was up, ACR was made a subsidiary of ICF, Incorporated. According to the Los Angeles Times on March 2, 1989:
"Kaiser
Engineers Group, one of the largest engineering firms in the West, is
being merged with another subsidiary of its corporate parent, American
Capital & Research, the holding company announced Wednesday. Kaiser
will combine with ICF Inc., a Fairfax, Va., consulting firm, and the
resulting company will be called ICF Kaiser Engineers. Its headquarters
will be in Oakland, where Kaiser is now based. American Capital &
Research, also of Fairfax, acquired financially troubled Kaiser last
June from a consortium of banks led by Bank of America. Kaiser’s
Australian and Asian operations were then spun off.
ICF Kaiser Engineers
will be a subsidiary of another new firm, ICFcorp International, which
is wholly owned by American Capital. Before the merger, Kaiser
had apparently been losing $1 million per month, but was earning that
much by March 1989. In 1984, Kaiser Engineers Group erected the Raymond Kaiser Engineering Building at 1800 Harrison Street in Oakland, CA.
Phoenix Rising out of Rubble
Henry J. Kaiser, the man, was an engineer, who was once known for a car he invented. My family owned a used one for a year or so, and I swear I [born in 1948] used to ride in its folding back seat, though I can't find any pictures online today showing anyone sitting in such a seat.
The car had been built by the engineering unit of Henry J. Kaiser's industrial empire, and after its acquisition by ICF, the old company became an ICF subsidiary, operated as "ICF Kaiser," maintaining its consulting
unit largely intact. ICF planners, getting set to issue its IPO within two years, added three high-powered outsiders, all known for their ability to raise
money, to its board of directors:
1.Canadian
investor Samuel Belzberg, who also
owned 500,000 shares of the company's stock;
2.Frederic V. Malek, a former Nixon White
House staffer who was part of an investor group that acquired Northwest
Airlines; and
3.Tony Coelho, a former Democratic House
Whip who once ran the Democratic Congressional Campaign Committee and later became managing director of the investment banking firm Wertheim Schroder & Co.
Inc.
Richard G. Darman’s entry in Who’s Who
indicates he was the principal director of ICF, Inc., in Washington, D.C. during 1975 and again from 1977 through
1980, having begun his career in government at the Dept. of Health, Education
& Welfare in 1971-72 during Nixon’s first term in office. He went to
Defense in 1973 and soon moved to work in the special assistant’s office in the
Justice Department during Watergate investigation.
During Gerald Ford’s tenure, Darman became a fellow at the Woodrow
Wilson International
Center before moving into
ICF after Pug Winokur left there. A Harvard graduate from the class of 1970, “Richard Gordon Darman grew up in Wellesley Hills, Mass.,
the son of an industrialist who owned textile mills and marketed oil and gas.
After graduating from Harvard
College and Harvard Business School,
he began a career that has taken him through five Cabinet agencies.” (Phil Gailey, The New York Times 11 January
1985)
The Intelligence Advisory Committee (IAC) meetings (which Pug may have attended) were usually
conducted by the Deputy Secretary of Defense—William Putnam Bundy at that time—whose
Yale and Harvard and family background was closely aligned with the
opium-running Cabot, Lowell and Acheson families, as well as being molded by
the Skull and Bones society to which the Harriman, Bush, Lovett and Bundy families
belonged.
ICF, ostensibly a venture capital firm, did not finance any
minority businesses but was, however, awarded numerous consulting government contracts as
a sole-source provider without competitive bidding. It reorganized into a
consulting group in 1972 and began branching into engineering as administrations changed from Democratic to Republican.
Pug left ICF in 1974, the same year that the Defense Industry
Advisory Council (otherwise known as the "Blue Ribbon Defense Panel," chaired by insurance executive, Gilbert Fitzhugh, and appointed by Melvin Laird, disbanded because its secret meetings were thereafter required to be open to
the public. The panel included James R. Kerr, president and
chairman of the Executive committee of Avco corporation. Kerr also served as chairman of the Board of Governors of the Aerospace Industries
association. Two years earlier, Kerr had been desperate to find ways to diversify his company, even to the extent of creating a subsidiary called Cartridge Television, Inc. (Cartrivision) in Indiana. It clearly had gone the way of Betamax before we heard of it.
ICF issued its IPO in 1988--14 years after
Pug left--at about the same time it became ICF-Kaiser through a merger
with Kaiser Engineering, spun off of another of Henry J. Kaiser's companies, Kaiser Aluminum company, sold in 1988 to Charles Hurwitz as Maxxam, Inc. Hurwitz acquired the land assets of the McCulloch company, renamed as MCO Holdings Inc.
Despite his riling up "Frank Sinatra and other wealthy denizens of Rancho Mirage, Calif., ... and building a $75-million resort hotel amid scenic hills of the wealthy desert playground, Hurwitz avoided personal publicity," according to Al Delugach of the LA Times on May 30, 1988. Everything was handled through his private development company, Federated Development Corp., which eventually built the Ritz-Carlton Rancho Mirage Hotel.
Charles Hurwitz of Maxxam
Hurwitz and Maxxam were often in the news just as the writer of this blog, Linda Minor, was living in Houston and just beginning her historical research. Charles Hurwitz had been attracting public attention, motivating Texas Monthly to do an in-depth study of him for its September 1994 issue.
"Maxxam headquarters, from its vast and sparsely decorated waiting room
on the twenty-sixth floor of an office building in Houston’s Galleria
area to the conference room on the twenty-seventh floor, where CEO
Charles Hurwitz is demonstrating the art of reticence to a visiting
journalist. The opening subject is the Houston Rockets, one of Hurwitz’s
few loves outside of his work," the writer, Robert Draper, began without going very far after that. His interview was short but not very sweet--at least on the first day.
Whether the subject is his childhood in Kilgore, his acquisition in
1988 of Kaiser Aluminum (which accounts for 85 percent of Maxxam’s
revenue), the redwood clear-cutting practices of Maxxam’s Northern
California firm, Pacific Lumber, or his pivotal role in bringing horse
racing to Texas, Hurwitz maintains a genial demeanor that is defensive
to the core.
The lightest moment comes when the controversial
Maxxam boss is asked whether he’s tired of all the bad press. His smile
widens. “I’d rather have neither bad press nor good press,” he fairly
booms. “I’d rather have no press.”
The second day of Robert Draper's 1994 interview of Hurwitz brought up a subject I had in fact been somewhat versed in as one of several assistants of County Attorney Mike Driscoll, Houston's County Attorney for Harris County--the newly constructed Sam Houston Race Park being built on a new segment of the Sam Houston Toll Road northwest of the sprawling city. Draper reported that Hurwitz owned 34% of the stock of the racetrack, making him the principal owner.
Driscoll's office had been the bane of existence of whoever had instigated building the racetrack with financing from the county. I was at one meeting between a few colleagues of mine and county officials, who brought in a few outside attorneys to discuss why our office had opined that the financing project was illegal. It was not authorized by any existing Texas statute, we explained.
Their attorney from Vinson & Elkins, whose name I've forgotten for the moment, said, paraphrasing here: "No problem. We can get that changed by the Legislature. We do that all the time." My reply was that I had seen some of their custom-made legislation, which I described with one word--sloppy. They had simply "incorporated by reference" one prior statute dealing with a different subject into a new statute, without bothering to make sure the old text applied to the new situation. Sloppy!
Since I had begun working for the County Attorney in December 1989, I had observed how the County was used by movers and shakers then living in Houston, in particular the county judge, Jon Lindsay, but that's a part of the story explored in Land and Loot on this blog.
Litton Industries
Charles Bates "Tex" Thornton, mentioned previously, had been Robert McNamara's boss at
Ford Motor Co. in Detroit. Both men had similar educational backgrounds to Pug Winokur. They and eight other
people hired in 1945, answering directly to Henry Ford II, arrived at Ford straight from the U.S.
Army Air Corps' unit of Statistical Control.
The Army had created "a joint program with the Harvard Business School to manage the burgeoning logistics around the air war effort. The Air Corps’ air force statistical control program was managed by Charles B. 'Tex' Thornton, an officer with close ties to an assistant secretary of war Robert A. Lovett." (Source: Abhijnan Rej, "The Other Legacy of Robert McNamara," June 10, 2016)
Thornton had eventually convinced McNamara to join Ford Motor Company "to aid in applying war-time management techniques to the reorganization of a large corporation," according to Indian scholar Rej. The unit's method of "treating industrial and defense bureaucracies with the same set of analytical techniques" is what was desired at that time before computers were widely available. That same ability, as we've since learned, is what caused so much excitement when the PROMIS software was created a decade or two later. After beginning their post-war careers in Detroit with Ford, the whiz kids branched out, experimenting in an assortment of industries, often utilized by the federal government which sought to accomplish the policy goals of whichever administration was in power.
The significance of this combination of military and business school intellectual experimentation was lost on me at the time I was first writing the Yellow Brick Road project. It only began to hit home after Gangster Planet was almost ready to print. I was engaged in writing what was supposed to be a brief summary called "About the Authors" for the book. Anyone who has read my work knows what an impossible task that was for me. "Brief" is not my middle name. Daniel Hopsicker aptly described my writing as "prolix," a term with which I was then unfamiliar. But it does fit me to a tee--"lengthy, protracted, long and wordy."
What better place to end this segment before readers nod off to sleep?
The Jeffrey Epstein files have been the topic at the top of the news cycle for months now, if not years. Sex attracts the public's interest, it seems, long after those following the flow of drugs for weapons have fallen by the wayside. Having following the theme of CIA Drugs for the last nearly 30 years, I've concluded sexual blackmail is simply another component of a conglomerate of power-seeking that also includes controlling weapons, using addictive drugs as the commodity by which to acquire the craved power.
Part of the control mechanism within a democratic nation requires that those craving power keep the public distracted, which they do by corporatizing the ownership of professional sports teams, combining that with advertising media and concessions, sponsorships and the like--rolling them all into one category, "entertainment," just another word in today's world for distraction from reality.
Although it has been a gradual progression, the loss of independence has been a threat since even before Benjamin Franklin declared the oft-repeated mantra: "A republic, if you can keep it." Ben Franklin, before he was a Founding Father, was a newsman. He was a friend of Patrick Henry and Thomas Paine. Even without "social media," they knew how to inform the public about the importance of liberty and independence. They began their fight, not solely against their colonial rulers, but against the biggest corporation of that time--the British East India Company--then known as a joint-stock company, which had a government-granted monopoly on trade.
America lost its way when we lost our ability to free and open debate about the issues. Debate that is financed by special interests and paid propagandists with unlimited funds and deep pockets is not independent journalism. It was lost when we began equating national security with secret intelligence agencies during and after World War II. When the CIA budget and spending practices were shielded from the public, and leaking of such secrets became a crime. When Dollar-a-Year men were put into positions of trust within the government and allowed to set up the infrastructure for the Central Intelligence Agency and all the three-letter agencies like the CIA, which are today being protected by those whose names are redacted in the Jeffrey Epstein files.
Perhaps it began with the sons of the tycoons in the railroad industry used their inherited funds to invest in the new airline industry at the time of WWI, and then escalated when bankers who managed inherited wealth got into the game in the years between the two wars. It expanded globally when Wall Street's bankers and attorneys accumulated political power and learned how to keep certain financial transactions away from public scrutiny. Democrats like FDR and Harry Truman, excited by the promise of power perhaps, started the ball rolling. One of the first front companies they created is the subject of what follows.
George A. Doole, Architect of Air America
We
found George Doole captaining a Panam World Airways flight in March
1945, listed on a Flight Manifest from Brazil to New York. Doole was a
civilian pilot, who later operated deep within the bowels of the
civilian aviation intelligence conglomerate known as Air America.
Click image to enlarge.
Evan
Thomas wrote Doole's obituary for Time Magazine, which revealed more about Doole's life than had ever been disclosed while he was alive:
...At the Chevy Chase Club, a Wasp bastion in a well-to-do Maryland suburb,
Doole sometimes liked to while away afternoons playing bridge and
back-gammon... Doole lived in one of the most elegant apartment buildings in
Washington, the Westchester, but he never invited any guests there, and
he refused to give the management a key. ...
Winning
a commission in the Army in 1931, Doole learned how to fly airplanes.
He later became a pilot for Pan Am, at first flying old Ford Tri-motors
on the Guatemala-to-Panama run. Along about 1953–no one seems quite sure
when – Doole made an unusual career move. He went to work for the
Central Intelligence Agency.
Officially,
the CIA says it has no record that Doole ever worked there, but among
old agency hands, he is a legend. Operating out of a small, nondescript
office on Connecticut Avenue, he founded and ran a far-flung network of
airlines that the agency used to carry out its covert operations all
over the world. Owned by a holding company, the Pacific Corp., that was
itself a CIA front, Doole’s empire included Air America, Civil Air
Transport, Southern Air Transport, Air Asia and dozens of small
puddle-jumper lines. Together, at their peak in the mid ’60s, these CIA
“proprietaries” added up to an airline that was almost the size of TWA,
employing nearly 20,000 people (as many as the CIA itself) and operating
some 200 planes. Even the CIA was not sure just how many. Asked by then
Deputy Director Helms to account for all the planes in Doole’s regime, a
staffer spent three months on the project before confessing that he
could never be more than 90% certain. The problem, explained the
exasperated staffer, was that Doole was forever leasing planes between
his shell corporations and changing their markings and tail numbers.
Traveling
around the world, orchestrating his vast air armada, Doole kept his
airplanes busy. Under the cover of legitimate freight and charter
services, Doole’s airlines supplied a 30,000-man secret army in the mountains of Laos for
a ten-year war against the Pathet Lao, dropped scores of agents into
Red China, and helped stage an unsuccessful revolt in Indonesia. Not
surprisingly, all this flying about aroused curiosity. In 1970 a New
York Times reporter asked Doole if Air America had any connection with
the CIA. “If ‘someone out there’ is behind all this,” Doole airily
replied, “we don’t know about it.”
Doole’s
pilots, who flew in and out of tiny jungle fields in abysmal weather
and sometimes under enemy fire, were a raffish lot. They referred to the
CIA as “the customer,” the ammunition they dropped as “hard rice” and
being under heavy fire as “sporty.” Brushes with death were described as
“fascinating.” To be “absolutely fascinated” meant scared witless.
Doole
would appear from time to time at CIA bases from Vientiane to Panama
City, but he stayed aloof from the pilots, many of whom regarded him as a
bit of a snob. “I never saw the man without a tie on,” scoffs one.
Doole played bridge, flew airplanes and did business deals the same way:
slowly and deliberately. “The Chinese liked to negotiate with him,”
recalls a former CIA official. “He was polite; he never showed any
excitement. But he was tough.”
When the extent of the CIA’s
covert operations was revealed by newspaper exposes and congressional
hearings in the early ’70s, the agency was forced to dismantle Doole’s
huge aerial empire and sell off the various planes and airfields. It was done at a profit;
the agency turned over $20 million to the U.S. Treasury. Doole also did
well by himself. Though he earned a government salary as a CIA
employee, he augmented his income by investing, shrewdly, in the stock
market. His estate when he died was worth “several million dollars,”
according to a sister.
In 1971 Doole retired from the CIA. Formally, that is. He kept his hand in the aviation business as a director of Evergreen International Aviation, a company that refits and charters airplanes. Though Evergreen bought Intermountain Aviation,
one of Doole’s CIA “proprietaries,” in 1975, the company insists that
it has had nothing further to do with the agency. Perhaps. But when
the dying Shah of Iran wanted to fly from Panama to Egypt in 1980, he
flew on a chartered Evergreen DC-8. Doole arranged the charter.
The
airfield in the Arizona desert where Evergreen opened its huge hangar
last year, the George A. Doole Aviation Center, was once owned by the
CIA. Today Evergreen workmen repair and refit commercial airliners from
Pan Am, American and Emery Air Freight. It all seems perfectly ordinary
and unexceptional, rather like the George Doole who enjoyed playing
bridge at the Chevy Chase Club and dancing with wealthy widows. There is
probably nothing remarkable about those two unmarked black Chinook
helicopters that took off from a far corner of the airfield not long ago
and headed south.
Managing Drug-Importing Airlines
George Doole's death left his
proprietary empire in disarray, crumbling in the hands of
Oliver North and his minions--men far less capable than George Doole had been.
Their mismanagement of the secret airlines resulted in its exposure three
decades after Doole had helped to create it.
Evan Thomas wrote an obituary for Doole in 1985, but--although it was written after Ronald Reagan's Executive Order 12356
[April 1982], as implemented in HR 10-24(c)4, which required a reporter
seeking access to classified files to sign a secrecy agreement and
allow the CIA to review and redact what the reporter wrote before it was
published--Thomas did not have full access to CIA files at the time he wrote Doole's obit. Even if he had such access, he would never have been cleared to expose the documents he found. Years later in 1996, Thomas described the process he went through in "A
Singular Opportunity: Gaining Access to CIA's Records," an article that
appeared in Studies in Intelligence.
Doole's
path from Pan Am to the Central Intelligence Agency in 1953 was likely similar to that many other military and aviation intelligence
operatives followed as the U.S. began its cold war strategy against The Soviet Union, our former ally. Jack Crichton, for example, had been stationed at
Coolidge AFB in Antigua in 1944, according to the flight manifest we discovered when doing Jack Crichton's genealogy, still an ongoing research project.
From Doole to Wexner
It took me years to notice something quite fascinating, though it may be merely coincidental. The year George Doole died--1985--is the same year Leslie Wexner was introduced to Jeffrey Epstein, and it was that same year, Bob Fitrakis tells us, that Les Wexner and Epstein combined forces with others in Wexner's hometown of Columbus, Ohio, to move the allegedly "privatized" formerly CIA-owned airline, Southern Air Transport, from Miami to Columbus. Fitrakis aptly labeled the airline "Spook Air," in his article that appeared in the Columbus Free Press in 2018, originally published at Columbus Alive 4-22-1999.
Shortly after meeting Epstein, Wexner began the development of a new city, New Albany, northeast of Columbus, where the small town of that name then existed. At the same time he signed up to establish the old Southern Air Transport CIA airline at Rickenbacker (cargo-focused) International Airport south of Columbus. Assistance came from the McCoy family of Banc One.
John G. McCoy, followed by his son John B. McCoy, helped
"Banc One ... [to become] one of the country’s largest banks after acquiring First Chicago Bank for $21 billion. After the merger, the bank moved its headquarters to Chicago. John B. McCoy resigned in 1999 after the bank had earnings shortfalls. Jamie Dimon was hired as chief executive in 2000.
JPMorgan Chase – by then led by Dimon – bought Banc One in 2004. Chase later changed the name of its two-million-square-foot corporate offices in Columbus to the McCoy Center."
Although it has been claimed that Jeffrey Epstein first became a JPMorgan client in 1998, a retired FBI agent named Shaun O'Neill stated in a report read by Russ and Pam Martens that "William Langford, an anti-money-laundering (AML) executive at JPMorgan Chase" stated under oath in a deposition in connection with SDNY Case No. 1:22-cv-10904-JSR that Epstein's relationship with the bank actually began in 1985. The report at footnote 14 cited Langford's Deposition as Exhibit 3, adding that "Epstein became a JPMC client in 1985, yet some 25 plus years later JPMC AML [Anti-Money Laundering (AML)] Group was unable to identify Epstein’s source of wealth or his clients, effectively rendering useless their KYC [know your customer] compliance component as it regards Epstein. On January 14, 2011, the primary JPMC AML Investigator looking into Epstein emailed senior management, 'Here is why I would like to know who his clients are' in response to an article about whether Epstein was running a Ponzi scheme." [Langford Dep. Ex. PM11 (JPM-SDNYLIT-00152808)].
From this the Martenses concluded:
"If Langford is correct, that would mean that JPMorgan Chase has financial transaction files on Epstein dating back 40 years–which would certainly open a window into who provided Epstein’s early seed money and who his largest financial funders were over the decades." (italics added)
As we stated at the beginning of this blog post, 1985 was the critical year--the year that George Doole died just before Iran Contra exploded in the news; the year Leslie Wexner met Jeffrey Epstein, and the two men began working together to move Southern Air Transport to Columbus, Ohio. It was also in 1985 that Barry Seal was arrested in Florida and began, as we said in Gangster Planet to "work off his beef," only months before he was murdered. Before his death, Rodney Stich wrote:
Reed described how Oliver North and William Barr authorized him to start a CIA proprietary in Mexico posing as a high technology trading and consulting firm. Reed moved his family to Mexico, thinking the operation was legitimate and of long duration. Reed worked closely with Oliver North, Felix Rodriguez, and Barry Seal. Before long, Reed discovered that the CIA front company he operated was being used by the CIA for gun-running and drug smuggling and this was confirmed in July 1987. He advised his CIA handler that he wanted out of the operation, and under cover of darkness, Reed moved his family back to Arkansas where he went into hiding. He then became targeted for retaliation by one of Arkansas’s state police officers who was on Governor Bill Clinton‘s staff.
There's Something Hinky about Columbus
Bob Fitrakis zeroed in on the men Wexner and Epstein gathered around them to build a civilian airport south of Columbus where an Air Force base once operated, stating:
As the logistics man for Wexner, Epstein arranged the arrival of Southern Air Transport (SAT) to Rickenbacker Air Force Base in Columbus, Ohio. The airline, formerly Air America, was infamous as an illegal gun- and drug-running operation. SAT filed for bankruptcy in Columbus on October 1, 1998, the same day the Central Intelligence Agency Inspector General issued a report linking the cargo hauler to allegations of drug-running in connection with U.S.-backed Contra rebels in Nicaragua in the 1980s.
Once lauded as a coup for central Ohio development, landing Southern Air Transport’s business at Rickenbacker eventually turned into a nightmare, as the enterprise became mired in massive debt and was closed under a cloud of suspicion about its true activities.
Whitney Webb and Ed Berger clearly realized what was going on. It was money laundering and blackmail, and she revealed in 2023 at her website that:
the same powerful players who brought Epstein to prominence were largely responsible for the rise of JPMorgan CEO, Jamie Dimon.
Evidencing the power JP Morgan Chase wielded worldwide is the fact that the US Attorney Denise George, who brought the bank into a RICO lawsuit along with Epstein and others, was almost immediately fired, even though by November 2022 she had settled a case against Epstein's Estate, bringing more than $105 million into the coffers of the Virgin Islands, while "all 150 victims’ claims against Epstein were satisfied in separate private settlements with the Epstein Estate."
It was only when she found substantial evidence against "Epstein’s primary bank, JP Morgan Chase, alleging that the bank facilitated and profited from Epstein’s criminal sex trafficking enterprise," that she filed the civil lawsuit, and four days later "George was abruptly dismissed from office on December 31, 2022, by Governor Albert Bryan, Jr. who appointed her and later expressed his dismay over the J.P. Morgan lawsuit," according to her website. Despite her being fired, the lawsuit was allowed to continue under a different attorney.
Wexner's Bankers
Whitney Webb dug much deeper, examining "top executives and directors of Bank One, which boasts incredibly close ties to The Limited’s Leslie Wexner and his right-hand man for many decades, Columbus-area real estate developer John W. Kessler."
Also called Banc One, its directors were called out in 1986 for being involved in a pay-to-play fund-raiser Leslie Wexner hosted for Democratic governor Richard Celeste's re-election campaign. It was only a coincidence that all those men on the host committee just happened to be doing business with the State of Ohio, in addition to being Republicans, according to his opponent in the primary, whom UPI reported as saying, "We all know that Celeste expects people doing business with the state to kick into his campaign and to front for him."
From Bush's Russo to Reagan's Earl Brian
Perhaps it was that very expose that prompted Vice President George Bush to spur his Houston friend and landlord, Joe Russo, to partner with a Mexican media magnate, Mario Vasquez Rana, in buying UPI out of Chapter 11, which it had been forced into in April 1985. Russo's and Vasquez' competitor in the bidding was none other than Earl W. Brian's Financial News Network.
All the sale managed to do was delay Earl Brian's acquisition, forcing him to buy from Vasquez and Russo in 1989. During that time, as we know, Brian also got all knotted up in Iran Contra and the Promis software scandal, forcing them back to bankruptcy court. What remained of UPI's corpse was scavenged by the Saudi-owned group (ARA International) in 1992.
By 1998, almost nobody remembered that UPI had once been "a major presence in the global news business, a training ground for a generation of journalists that included Walter Cronkite," according to Forbes.
Back in Columbus, Ohio
Alan D. Fiers Jr., according to Fitrakis, who had been a member of the "1961 Ohio State University football team and a Buckeye assistant coach in 1962, who later became the chief of the CIA Central American Task Force." Fiers was also connected to the move of the airline, as was "retired Air Force Major General Richard Secord, head of air logistics for the CIA-owned Air America’s covert action in Laos between 1966 and 1968, and air logistics coordinator in the illegal Contra resupply network for Oliver North in the ’80s."
Fitrakis subtly added: "According to the recent CIA report on Southern Air Transport [Volume II of the Hitz Report], Fiers informed U.S. Senate investigators that the CIA told the DEA early on about Contra leaders being involved in drug smuggling. Secord, who is a 1954 graduate of Columbus’ South High School, pleaded guilty in 1989 to a felony charge in connection with the cover-up of the Iran-Contra affair." [Note: Volume I of the report dealt with the drug operations taking place in South Central Los Angeles, California under the guise of the Nicaraguan Democratic Force (FDN), commonly known as the Contras.]
When Fitrakis cited the October 1998 CIA report on Southern Air Transport, he was referring to Hitz's Volume II, which contained the paragraphs excerpted below, which referenced Southern Air Transport:
Southern Air Transport
Robert Gates, left
905. Background. Southern Air Transport (SAT) carried a variety of equipment, supplies and humanitarian aid for the FDN during the 1980s. 906. Allegations of Drug Trafficking. A January 21, 1987 memorandum from ADCI Robert Gates to Morton Abramowitz, Assistant Secretary of State for Intelligence and Research, stated that the U.S. Customs Service had advised CIA that the Customs office in New Orleans was investigating an allegation of drug trafficking by SAT crew members. The Gates memorandum noted that the source of the allegation was a senior FDN official. The memorandum indicated that the FDN official was concerned that "scandal emanating from Southern Air Transport could redound badly on FDN interests, including humanitarian aid from the United States."
Morton Abramowitz, diplomat
907. A February 23, 1991 DEA cable to CIA linked SAT to drug trafficking. The cable reported that SAT was "of record" in DEA's database from January 1985-September 1990 for alleged involvement in cocaine trafficking. An August 1990 entry in DEA's database reportedly alleged that $2 million was delivered to the firm's business sites, and several of the firm's pilots and executives were suspected of smuggling "narcotics currency." 908. Information Sharing with Other U.S. Government Entities. As previously noted, a January 21, 1987 memorandum from ADCI Robert Gates to Morton Abramowitz, Assistant Secretary of State for Intelligence and Research, reported that U.S. Customs had informed CIA that the Customs office in New Orleans was investigating an allegation of drug trafficking by SAT crew members. ***
1081. CIA only disseminated three finished intelligence products during the 1980s that related at all to potential Contra involvement in narcotics trafficking. These were: (i) a 1985 National Intelligence Estimate (NIE) concerning the international narcotics trade; (ii) an April 1986 Memorandum for Vice President George Bush; and (iii) the January 1987 Memorandum from Acting DCI Robert Gates to Assistant Secretary of State for Intelligence and Research Morton Abramowitz. ***
1084. 1986 Memorandum for Vice President Bush. On April 6, 1986, a Memorandum entitled "Contra Involvement in Drug Trafficking" was prepared by CIA at the request of Vice President Bush. The Memorandum provided a summary of information that had been received in late 1984 regarding the alleged agreement between Southern Front Contra leader Eden Pastora's associates and Miami-based drug trafficker Jorge Morales. Morales reportedly had offered financial and aircraft support for the Contras in exchange for FRS pilots to "transship" Colombian cocaine to the United States. CIA disseminated this memorandum only to the Vice President. 1085. DI/OGI analyst who drafted the Memorandum says that there was no follow-up. Furthermore, the analyst recalls no further DI discussion of the Contras' alleged involvement in drug trafficking until the Memorandum that was written for Assistant Secretary of State Abramowitz in 1987. 1086. 1987 Memorandum for Abramowitz. The most comprehensive discussion of alleged Contra narcotics trafficking was included in a January 21, 1987 Memorandum from Acting DCI Robert Gates to DoS Assistant Secretary for Intelligence and Research Morton Abramowitz. The genesis of this Memorandum, entitled "Assessment of Alleged Connections Between Drug Traffickers and Anti-Sandinista ('Contra') Groups," was a January 9, 1987 memorandum from Abramowitz to then-Deputy Director of Central Intelligence Gates indicating that Assistant Secretary of State Elliott Abrams had expressed concern about the possible involvement of Contras in narcotics trafficking and had requested an Intelligence Community study "on an urgent basis." The memorandum from Abramowitz indicated that Abrams wanted the study "to pull together all foreign and domestically-generated information that is available, rumors and all, and provide an assessment of the credibility of the charges." Further, the memorandum to Gates indicated:
The Assistant Secretary believes that it is essential that we know before the rest of the world if any of those whom we have funded are engaged in this business so that they can be expelled from the ranks of the resistance."
1087. The Memorandum to Abramowitz was written under the auspices of the NIO/Narcotics and was drafted jointly by officers from the DO and the DI's Office of African and Latin American Analysis. In addition to DO reporting, the assessment relied heavily on DEA information. Six topics were addressed, including:
Allegations discussed in three disseminated DO reports of October, November and December, 1984 concerning Pastora, Adolfo Chamorro, Gerardo Duran, David Mayorga, and Jorge Morales;
Statements to FBI and DEA undercover agents by Orlando Bolanos, who claimed to be in command of an anti-communist movement in Nicaragua called the "Internal Front," that he planned to smuggle cocaine into the United States;
The Frogman Case, which involved Nicaraguan drug traffickers who had been apprehended in early 1983 while swimming ashore near San Francisco, including information indicating that an unnamed suspected drug trafficker had placed 51 calls to a telephone in the FDN office in San Francisco that was later learned to have been listed to one of the defendants in the case. The defendant's name was not given;
"Suspicious activities" at Ilopango air base in El Salvador;
An allegation that Roger Herman, political director for the Contra group, KISAN, was involved in cocaine smuggling into the United States; and
Allegations that the ranches of "two [unnamed] U.S. nationals" in Costa Rica, were used to smuggle weapons to the Contras and cocaine into the United States.
1088. The Memorandum prepared for Abramowitz concluded that there was "no indication that anti-Sandinista groups that have received or now are receiving support from the U.S. Government have engaged in drug trafficking to fund their operations." Moreover, according to the Memorandum, DEA and FBI officials, along with Intelligence Community leaders, said that "no credible information exists to support" allegations of Contra involvement in drug trafficking that "have surfaced over the past four years, particularly when renewed funding for the Nicaraguan insurgency was under consideration in the U.S. Congress."
1089. The Memorandum also concluded that, if Contra organizations had unwittingly received donations from sympathizers who derived the funds from drug trafficking:
". . our best judgment is that the donations probably reflected personal decisions on the part of the donor rather than an organizational effort on the part of an anti-Sandinista group."
Further, the Memorandum stated that "we have no information suggesting Pastora's personal involvement" in the alleged agreement between his associates and Miami drug trafficker Morales, but "he may have been aware of them given his apparently close association with these individuals."
1090. A January 21, 1987 transmittal letter that ADCI Gates attached to the Memorandum when it was sent to Abramowitz indicated that the Memorandum was being released with two qualifications:
DEA Headquarters planned to follow up on the matter of the adequacy of a DEA investigation of alleged drug trafficking at Ilopango.
The U.S. Customs Service was investigating allegations by Mario Calero that crew members working for Southern Air Transport might have been involved in drug trafficking.
The transmittal letter concluded with the observation that: ". . . as future drug trafficking cases surface it is likely that we will see more assertions of Contra connections. Such assertions may take the form of self-serving stories by traffickers for use in their legal defenses as well as allegations by the Sandinistas to discredit the insurgents. "
Adolfo Calero had been dealt with earlier in the report at Paragraph 891:
"Background. According to the December 1988 Kerry Report, one of the pilots who flew Contra resupply missions for SETCO was Frank Moss. The Kerry Report also noted that Moss had been under investigation since 1979 for drug trafficking but reportedly was never indicted. In 1985, Moss formed his own company, Hondu Carib, which flew supplies to the FDN. The Kerry Report indicated that the FDN's arrangement with Moss and Hondu Carib was based on a commercial agreement between Moss and Mario Calero, the FDN's chief supply officer. Under that agreement, Calero was to receive an ownership interest in Moss' company. "
The airline, Hondu Carib, owned one of the many airplanes that shipped drugs to Port Charlotte, Florida, just a few miles from Venice, where Daniel Hopsicker lived when he began researching drug planes there, shortly after he finished Barry and 'the boys'. Port Charlotte drug smuggling had been prolific in the area, as we indicated in Gangster Planet.
"I've done nothing illegal. All I ever wanted to do was fly," Frank Moss said.
Frank Moss, a SETCO pilot, was mentioned in Peter Dale Scott's book, Cocaine Politics, which on page 58 stated that the DC-4 plane Moss used "was listed to Hondu Carib in a 1983 Customs report that linked the aircraft to several individuals said to be 'involved in large-scale narcotics smuggling.' The plane was also being watched because an informant said it dropped narcotics on the isolated Louisiana farm of Adler 'Barry' Seal, an American who managed the Colombian cartels' shipping operations into the United States."
The KISAN group referred to above was described in a CIA document released in 2009, which stated:
"... FDN has been particularly active in central Nicaragua, astride the Rama-Managua road that serves as a crucial artery in the transfer of weaponry from the Soviet Bloc to the Sandinista regime. On the Atlantic coast, the Indian resistance -- which dates from the regime's repression and forced relocation of the Miskito Indian population in 1981-82 -- continues harassment actions against the Sandinistas. The Indian umbrella organization KISAN, with about 1,000 combatants, relies heavily on donations of supplies from the FDN. Eden Pastora's forces have dwindled to some 600 men and have largely been sidelined since the Sandinistas drove them from their base camps in southern Nicaragua during the summer. Sandinista Response Managua has responded to the increased pressures by seeking additional economic and military assistance from the Soviet Bloc, cracking down on domestic opponents, and stepping up its counterinsurgency efforts. Only a massive increase in financial support from the Soviet Bloc is keeping the economy afloat."
Approved For Release 2009/09/16: CIA-RDP87M00539RO01802780006-7 Approved For Release 2009/09/16: CIA-RDP87M00539RO01802780006-7 TOP SECRET
It All Leads Back to Columbus, OH in 1985. We will pick up there in a subsequent post.
