Gangster Planet was published a year after Daniel Hopsicker's death. Linda Minor had been working with him on that project during the last four years of his life, while he fought prostate cancer. It was during the era of Covid-19, which made the project both easier and more difficult, as it focused the two writers. Those of us who lived through that time understand what I mean. After publication, Minor (me) continued her research, which would occasionally track back to Doole. One of those occasions appears at another post in this blog.
Below is a chapter Daniel Hopsicker and Linda Minor sent to their publisher, Trine Day Publishing, which later appeared in print without the pictures.
SPOOKS DON’T FLY SOUTHWEST
“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.”
Bob Fitrakis, “Jeffrey Epstein: There’s Much More to the Story,” 2020[1]
Part One of Gangster Planet is a tale of CIA-pedigreed drug planes I spent a big chunk of my life researching. It was personal for me. Don’t ask me why. I don’t have an answer. It just was. My search gave me a reason to get up every day and at the same time, it kept me from sleeping.
Everyone who knows that feeling of obsession is blessed.
Simultaneously, it’s a curse to find a question that nags you so much you can’t move on until it’s answered. People all around you don’t see the world you live in. In Florida, life is about fun and sun. They don’t get it. They don’t even want to get it. They hate being woke to the world as it really is.
In 2005, it was estimated that the global trade of illegal drugs topped over $400 billion dollars, or roughly the same amount that is spent on food.
Drug trafficking is the most widespread and lucrative organized crime activity in the US, accounting for an estimated 40% of their business.
In 2006, the estimated street value of cocaine seized by the United States Coast Guard was estimated at $3.1 billion dollars. Who knows what it is today, with inflation and all?
“One Big Goddam Masked Ball”
General and business aviation—the method of choice for the transportation of illegal drugs—SHOULD mean that aircraft ownership, acquisition and registration records are the best means of identifying the traffickers. But, surprisingly, the government knows a lot more about who owns automobiles than it does about who owns multi-million-dollar aircraft that can transport multi-ton loads of cocaine.
Automobiles are registered within the county where the owner lives, but because airplanes can move around with such great speed, and possibly because there are fewer of them than there are cars, aircraft owned by U.S. residents and companies are all registered in one place—the Federal Aviation Administration.
The FAA’s commitment to combating illegal activities is, however, often questioned. Its registration procedures are lax and riddled with loopholes that you could fly a DC9 through. This is not by accident, but by design.
Meaning: the government wants things that way.
Why would that be? Perhaps because general aviation is crucial to the government’s covert activities, most of which involve moving things in and out of countries without being detected. The best way to do that is by using planes. People, money, passports, weapons, drugs, and diamonds.
At the tiny Venice Airport, for example, there are no prying eyes in the control tower. Because there isn’t a control tower. Jets fly in and out at all hours of the day and night, and there’s nothing but 400 miles of water between Venice and Mexico’s Yucatan peninsula.
A frustrated-beyond-disillusionment state cop in Arkansas once asked rhetorically, “What do you do when you find out that the biggest drug smuggler in the country… is the country?”
Even today, most Americans probably believe the Securities and Exchange Commission—to cite an example that bleeds untold billions from Americans through the simple expedient of looking the other way—referees the markets like a line judge in football, watching for a foot stepping out of bounds on a kick-off return.
A long-time pilot—let’s call him Nick—in Florida said angrily, “The field of general aviation is one big goddamn masked ball.”
“The FAA’s job is to create doubt about the provenance of any American-registered airplane threatening to become a part of the current unpleasantness.”
“Everybody knows the best way to be shady is in a plane. Not a commercial plane, though, right?”
Nick sneers. “Spooks don’t fly Southwest.”
The Whittingtons and World Jet
Start with World Jet, in Fort Lauderdale, owned by the Whittington brothers—Don and Bill—notorious drug smugglers who in their early 1980’s heyday commanded fleets of fishing trawlers, sailboats, cigarette boats, and jets.
Tons of marijuana, and oceans of cash, flowed freely from the World Jet hangers at Fort Lauderdale Executive Airport through the streets and canals of Fort Lauderdale.
When federal indictments put the Whittington Brothers out of the game, their prized Learjet—at that time still something of a rarity—was “sold” to Barry Seal, soon to be the biggest drug smuggler in American history.
Was this just coincidence? Or are these vital clues to a vast but hidden. and still-unnamed, global network? The global financial network Prime Minister Tony Blair said had financed terrorists who pulled off 9/11, perhaps?
Hilliard’s Lear jet was carrying what is known in the drug trade as “heavy weight.” In fact, it was the largest heroin seizure ever in Central Florida, said the Orlando Sentinel. And although Hilliard had purchased the Lear less than a year before, it had already made over thirty weekly runs down and back to Venezuela, the pilot admitted to the DEA. So even though Hilliard lost his plane through seizure, he undoubtedly got his use out of it.
While we’re no experts on heroin trafficking, we figured that 43 pounds for one haul was a little steep for an individual. We figured that much dope no doubt belonged to an organization, a drug trafficking organization.
Wally Hilliard—Part of an Elite Network
We suspected, in fact, that the transfer to Hilliard of the Learjet before it was confiscated was not by accident. It was, instead, an exchange of assets within the organization.
And sure enough…when we looked up the previous owner of Hilliard’s Lear jet, we discovered a name we had already run across during research for Barry & the boys:’ the CIA, the Mob, and America’s Secret History.
The man who owned the Learjet that ended up in Wally Hilliard’s hands was an avid pilot and auto racer named Gary Levitz.
Old people still remember TV ads for a nationwide furniture chain from the 70’s featuring a mindless jingle with a stupid but memorable chorus— “You’ll Love It at Levitz”—that, once it got in your head, it seemed you could never get it out. You’d have to have that jingle surgically removed.
Wally Hilliard got Gary Levitz’ Lear because Levitz didn’t need it anymore.
He was dead.
Levitz fatally flew into a pylon during the National Championship Air Races in Reno, Nevada in 1999, crashing his souped-up P-51 Mustang. It wasn’t the first time such a thing had happened at Reno, as we’ll see later.
CIA Tell #1—Good PR
If you’re taking notes, this is our first “CIA tell.” They are scattered throughout the book. Guys who are “connected” always get great PR. It must be a corporate benefit.
“Gary was a pretty amazing man,” one of his managers told reporters.
“He was a larger-than-life character. He would run the company day to day, and he flew warplanes and was a big-game hunter.”
Big-game hunter. Flying warplanes. Guys like that used to be called—in more innocent times— “soldiers of fortune.”
What Gary Levitz also was... was a big-time drug smuggler, at least by ‘70s standards. His brother, Mark Levitz, turned him in so he could get out of working for the Nicodemo D. “Little Nicky” Scarfo gang in 1986.[2]
He’d already been convicted of money laundering, admitting in court to “helping the Whittingtons disguise narcotics profits by investing in legitimate business ventures.” [3]
Twenty years later, the Whittington brothers will be selling a Learjet—which is soon busted—to Wally Hilliard. Is this the Great Circle of Life, or just another Day at the Office…, if you need to work off a beef for the Feds?
Hilliard’s purchase of Gary Levitz’s Lear, after Levitz’s death, from the Whittington Brothers—whose own Lear, when they went into “timeout” had been purchased two decades earlier by Barry Seal—can be seen as the work-a-day machinations of a secretive global organization at work…
Perhaps unsurprisingly, Gary Levitz had also been in business with people at the Venice Airport.
“Ben Bradley’s a DEA informant at the Venice Airport,” said Coy Jacob, owner of a Mooney dealership there, and no friend of Bradley, who, he said, “set people up in Fort Lauderdale. Gary Levitz got into the drug trade, then rolled on the Whittingtons. So did Ben Bradley. When his life was threatened, he moved to Polk County, and moored his boat in Venice.”[iv]
And the man who SOLD Gary Levitz his P-51 warbird air-racer, which he crashed at the air races in Reno in 1976?
His name was Kenneth G. Burnstine from Fort Lauderdale, Florida, a city which is famous for a lot more than inventing Spring Break. By the time I’d learned about Kenny Burnstine, I then knew for a fact that the field of general aviation operates with no effective adult supervision.
After more than two decades of specializing in an arcane area—drug trafficking through Florida—I’d just realized there was a whole other drug kingpin I’d never heard of. Either that, or I’d forgotten everything I’d learned—which was even worse.
What I knew about my chosen subject still didn’t amount to much. Maybe all the information keeps leaking out, or maybe they keep changing the rules without telling us.
On any given day, there are dozens—hundreds?—of pilots flying drugs or laundered money around the world. We just can’t seem to keep up.
During the Iraq War under President George W. Bush, Houston was home to three general aviation charter companies flying extraordinary renditions for the CIA, a fact I only discovered while investigating the ownership of the luxury jets which ferried Saudi Royals out of Las Vegas and Lexington, Kentucky, six days after the 9/11 attack.
Houston is also home to another aviation company that has become crucial in keeping the names of plane owners secret—Aircraft Guaranty Holdings & Trust of Houston—founded in 1997 by a Lieutenant Colonel (retired) in the Army named Connie L. Wood, formerly a senior FAA official. Despite its tiny size, his company, Aircraft Guaranty, was the registered “owner” of more than six hundred American aircraft. “Offshore Aviation Trust” was his brainchild.
The legality of getting around disguising a plane’s ownership is set out in a brief history which rationalizes the act.[5]
According to the Transportation Code, “only aircraft owners who are citizens of the United States are permitted to register an aircraft,” the writer tells us. The shareholders of a publicly traded entity (such as a U.S. airline) are constantly changing as its stock is traded. It’s therefore impossible at any given moment to know if the shareholders are citizens, so the public airline corporation does not technically qualify to be registered. See the legal conundrum here?
The FAA made a decision in the ‘70s to allow a corporation to register if “non-US citizen beneficiaries [do] not have more than 25% interest in the aircraft.” The FAA extended the regulations later to allow registration of aircraft owned by a trustee.
Lawyers do this type of thing all the time for clients with money and/or power, preferably both.
Aircraft Guaranty first achieved notoriety during the Iraq War when plane-spotters began noticing the company “owned” a large number of planes being used in CIA “extraordinary renditions.” They also saw American Guaranty Holdings planes downed in Central and South America plane crashes or drug busts... Or, more likely, plane crashes followed by drug busts.
The ownership became progressively less certain once Aircraft Guaranty took title to them.
“According to the Federal Aviation Agency in the United States, the aircraft is owned by Aircraft Guaranty Holdings & Trust of Houston,” The Miami Herald reported about a Venezuelan co-founder of Smartmatic voting systems based in Boca Raton, who died when his plane crashed into a house near Caracas airport in 2008.[6]
Well, not exactly. The downed plane was merely registered to Aircraft Guaranty, possibly a proprietary company whose job was to deliberately disguise ownership of planes into the wider world of general aviation—by holding title in trust for the real, unidentifiable, owner—often the CIA.
The process is called sheep dipping, after the practice of bathing sheep before they are sheared. This leaves unanswered the question, “Who’s getting sheared in this process?”
The term is commonly used for disguising a spy's identity with a day job. The agent—or airplane—is cleaned up, and subtly altered, so that nobody knows where he's been.
Instead of laundering money, they’re laundering protoplasm. The military even brags about it.[7] Plausible deniability (or lying) is considered a good thing.
It’s “a boon for well-heeled U.S. owners seeking personal liability protection and ownership anonymity,” Lt. Gen. Wood told “Mooney Pilot, an aviation magazine.[8]
“Soon,” he predicted, “full FAA-approved and legal Off-Shore (as in the Cayman Islands) Aviation Trusts will be THE way most liability conscious and financially established owner/pilots to take title to their aircraft… It promises to be far better than a typical corporate entity in protecting the beneficiary from personal liability exposure.”[9]
He was touting “licenses to non-residents outside the U.S. without the applicant ever entering the U.S.,” but claimed his “team of attorneys” were well-versed in all the U.S. laws to protect individuals behind the entities his company would set up.
Real world examples were strewn across the aviation landscape, not the least of which was the fact that Aircraft Guaranty “owned” a Lear Jet (N35NK)—that was previously registered to Huffman Aviation flight school owner Wally Hilliard’s aviation charter company “Plane 1 Leasing.”
The Lear made frequent flights to Rum Cay in the Bahamas, a sleepy little isle which suddenly was drawn into Big-Time Drug Trafficking when work was completed on Rum Cay’s new 5000-foot runway—that could take medium jets.[10]
After Hilliard was charged in 2004 for flying unauthorized flights for unspecified “Saudis,” he sold the Lear to Aircraft Guaranty, which used it on flights into and out of Guantanamo. It became briefly famous after a plane-spotter snapped its picture during a rendition flight in Portugal.[11]
It also regularly flew into Caribbean hot spots that were known drug transfer points: Venice, Florida; Treasure Cay, San Salvador; Marsh Harbor in the Bahamas, St. Maarten, the Netherlands Antilles, and Toluca, Mexico. Toluca was the ultimate hot spot at that time because the Mexican government controlled the airport. Toluca was, you may recall, where the DC-9 in the Yucatan with 5.5 tons of coke was supposed to be offloaded.
None of this is an accident.
Bill Pawley’s Excellent Adventure
William Douglas (Bill) Pawley, at 32 years of age, had already enjoyed more adventure than most men ever see.
Born in South Carolina in 1896 to an eighth-generation South Carolinian father, Pawley had few if any ancestors who’d ever lived anywhere else after arriving on colonial soil. Bill’s dad, notwithstanding bankrupting his cotton business by short-selling cotton futures, moved his family to a small island near Guantánamo, Cuba in 1903, soon after the U.S. had signed a treaty with Spain that gave us the Spanish colonies of Cuba and the Philippines.
E.P.’s contract to supply the naval base with a variety of commodities came with his designation as consul at Guantánamo, but in 1910 his business license was revoked on a technicality. He had to move again—200 miles southeast to Port-Au-Prince, Haiti.
Bill and his brother E.P., Jr., four years younger, were sent to Gordon Institute’s military academy (equivalent to high school) in Barnesville, Georgia, but it’s not clear whether he graduated. The highest level of education he received was the time he spent there. He seems instead to have dropped out in favor of forming a trading business in Venezuela.[12]
Nevertheless, he was in Georgia when he registered for WWI in 1918, claiming to be self-employed at age 22, but he did not enlist, nor was he drafted.
Pawley instead married Annie Dobbs from Marietta, Georgia a year later, and after living briefly in Quebec as a gold miner and in Delaware in the milk and tire business, he lived in Atlanta for a while before deciding to become a land developer in Florida during its big boom.
Hosting a huge party at Coral Gables Country Club in 1925 for his 29th birthday, according to his biographer, Anthony R. Carrozza: “He announced his retirement at the party, but ‘they begged me to stay until January 1st.’ His decision turned out to be costly because within four months the boom market bottomed out and Pawley lost $800,000.”[13]
Three lean years from that point to the time he was hired by the “Glenn Curtiss interests” did not daunt his enthusiasm. He began promoting air races in Miami as a sideline to buying airfields and starting flying schools in 1928 for Clement Keys, who had bought out Glenn Curtiss in 1920.
After opening a municipal airport that would grow into Miami International, he flew to Washington D.C. to convince top military brass to send air race teams to the air show to dedicate the airport the following January.
Much of the story that follows alternates between sublime adventure and mundane and tedious recitation of detail. I caution the reader not to ignore the mundane. Therein lies the answer to the riddle of how things really work. Pay close attention to the math and the legalese.
It's the four-eyed accountants and lawyers who do the dirty work of hiding things in plain sight while all the spectators are watching flying trapezers and sexy pilots doing nose-dives.
Annual Air Show in Miami
The first ever Miami Air Races were in January 1929 and became an annual event thereafter. Pawley, who tried to return to Miami for each race after the one he organized in 1929, had “missed the 1933 and 1934 shows,” Carrozza wrote.
“At the January 1935 air show, however, when Capt. Claire Lee Chennault led his ‘Men on a Flying Trapeze’ trio of acrobatic fliers in a spectacular performance,” Pawley had made a point to attend, bringing guests from China along. [14]
“Meeting the army aviator after the show, Pawley began a relationship with Chennault that lasted for years,” Carrozza continued. “Stormy and contemptuous, they were often at odds with each other, but together they were to achieve a shining moment in U.S. military aviation history.”[15]
Whether “shining” or not, it was indeed an historic moment. It was, in fact, that introduction which would rescue Chennault from an embarrassing early retirement two years later.
Intercontinent Aviation in Cuba and China
Before his auspicious meeting with Chennault, Pawley found himself in 1929 bidding against 27 others for the contract to carry mail between Havana and Santiago. Fulfilling the terms was less easy. Pawley moved back to Cuba where he had spent the first decade or so of his life, and he spent the next three years constructing an airport, expanding the airline from one route to eleven, and flying mail between fourteen airports—all by 1932.
Clement Keys had earned his first air-mail contract in 1925 (New York to Chicago), and, determined to build a worldwide mail distribution network, he hired Bill Pawley three years later to create mail routes inside Cuba. Keys had arranged $10 million in financing in 1928 through Dillon, Read & Co., whose attorneys set up Intercontinent Aviation, Inc. as a subsidiary under the Curtiss corporate umbrella[16].
Pawley’s business in Cuba was a sub-subsidiary called Companie Nacional Cubana Curtiss. Like a game of hide-the-pea, the umbrella seemed to keep moving. Who knew where the pea would end up?
Keys had to build his own airfields in China and provide his own planes at great expense, but “on October 21 China Airways at last was able to open service. Three days later came Black Thursday. All stocks fell, but aircraft stocks nose-dived. Curtiss-Wright stock value dropped to $106 million…. Keys, his fortune nearly wiped out by the stock-market crash, relinquished control of Curtiss-Wright.”[17]
When Pawley traveled to China in 1933 for the first time, negotiations were ongoing between North American and Juan Trippe of Pan Am, the proposed buyer of Curtiss-Wright stock. Once a price was agreed to, attorneys for the banker—Dillon, Read & Co.—drafted documents to give Pan Am 50,000 shares of Intercontinent. CNAC, Intercontinent’s new subsidiary, was paid 3,000 shares of Pan Am stock.
Intercontinent’s Cuban subsidiary (Cubana Curtiss) had just been sold by Pawley’s apparent boss when he returned from Cuba to Florida. In January 1933 he headed off to China to sell airplanes on commission to the Chinese government.
A small item on page four of the Miami News announced in September that in those nine months, he’d sold 36 planes. The next time he went to China he had a different mission. Not simply to sell existing American aircraft made in America, Pawley’s task was to build and operate factories at the site of where Chinese pilots would be trained.
Under the name CAMCO—Central Aircraft Manufacturing Co.—Pawley and at least three of his brothers and one or more of his sons worked to establish these factories. Because China was at war with Japan all through the ‘30s, they had to keep moving the factory to safer locations. The last plant was built in India, close to the location where the Flying Tigers would take off to fly over the Hump to supply the Nationalist Chinese flyers.[18]
China National Aviation Corp.’s job was to carry mail, and initially its stock was wholly owned by the Nationalist Chinese government, according to Chinese law. Pawley’s job was to provide an airport and planes for their operation and to supervise pilot training. That’s what he’d brought Chennault in for, but the two men were often at odds because of their perspectives on how to do the work.
China Lobby’s Favorite Family
When Pawley arrived in China and met the finance minister, H. H. Kung, it was only the first of many introductions to members of the nepotistic Chinese government. The whole family was involved—as blatantly as Trump’s kids and spouses would be in his administration.
Kung introduced him to Madame (Mei-ling) Chiang, wife of Generalissimo Chiang-Kai-shek. Kung was married to Madame’s sister. The sisters were daughters of Charlie Soong, the first of a long line of American-educated members of the Soong family.
Historian Sterling Seagrave, who grew up as the son of a missionary surgeon on the Burma Road, wrote several important books on China’s history. The Soong Dynasty gives an inside peek at “Charlie” Soong, an 1885 graduate of then-Methodist-affiliated Vanderbilt in Tennessee.
Soong studied two years at Trinity College in North Carolina, living with the family of Julian Carr, the face of “Bull Durham” tobacco, sold in 1898 to the American Tobacco Company for a small fortune. A staunch Methodist, his money had helped found Duke University, and his network helped in bringing Charlie’s six children to universities in the United States.
Seagrave’s description of the grifting Soongs gives us insight into the reality of what was happening in those days as the Luce Press, a major part of the “China Lobby,” perpetually whipped up anti-Japanese propaganda in support of trade with the Chinese, seen as more amenable to Christianity than their communist counterparts.
In 1938 Mei-ling Soong, a graduate of Wellesley, and her husband were announced as Time’s Man & Wife of 1937: “Today Generalissimo & Mme Chiang have not conceded China's defeat, they long ago announced that their program for as many years as necessary will be to harass, exhaust and eventually ruin Japan by guerrilla warfare. If Generalissimo Chiang can achieve it, he may emerge Asia's Man of the Century.…
“Her brother, Mr. T.V. Soong, today China's greatest financier, informed General Chiang as courteously as possible that a husband with concubines was scarcely acceptable as a suitor in the Chinese Christian family of Soong. Mei-ling's father, famed ‘Old Charlie’ Soong, had made his fortune as a pioneer in printing and selling Bibles to Chinese as fast as the missionaries created a demand. Investing his profits at about 40% Chinese interest, he died a merchant prince.
“Old Mrs. Soong had not forgotten that her late husband had tumbled another of her daughters unceremoniously into the arms of old Dr. Sun Yat-sen (who also had another wife at the time) and that the marriage had been a master stroke for the House of Soong.
“Venerable Mother Soong therefore told General Chiang that if he would become a Christian, he could marry her attractive, Wellesley-graduated Mei-ling. The Conqueror replied that he would not adopt a new religion merely to win a bride, but that if Miss Soong would marry him, he would agree to study Christianity, and then do as he saw fit.
“No ordained Christian pastor could be found who thought General Chiang free to marry Miss Soong, so a lay Y.M.C.A. secretary united them in holy matrimony. From the day General Chiang thus took his No. 2 wife, both his character and his fortunes rapidly commenced to take on a certain grandeur. Eventually he also became a Christian.
“Chiang Conquers All. The marriage of General Chiang was important because it made him the post-mortem brother-in-law of the Kuomintang's late sainted Sun; brother-in-law of Big Banker T.V. Soong; and brother-in-law of Dr. H.H. Kung, famed descendant of China's greatest sage Confucius, who also married a Soong girl.”[19]
Miami’s Air Races 1935
During Miami’s seventh annual Air Races in January 1935, after their performance the three trapezers met with “Col. Mao Pang-chu, Chinese Air Force, along with several members of the Chinese Commission on Aeronautical Affairs, [who] attended the January show as Pawley’s guests,” according to Carrozza.[20]
“Pawley invited the trio to a party he hosted for the Chinese aboard his yacht in Miami harbor. Mao, impressed by their precision flying, offered all of them positions as flight instructors at the Hangchow aviation school. Williamson and McDonald declined because they hoped to receive U.S. Army Air Corps commissions, but after being passed over, both accepted and left for China in July 1936.”[21]
When Chennault publicly applauded his “boys,” in their endeavors in China, Army brass, not amused, transferred him from Alabama to Shreveport, Louisiana, in 1936, to await retirement. It didn’t help that he was confined to a Louisiana hospital bed—suffering from low blood pressure, partial deafness, and chronic bronchitis.[22]
At the hospital Chennault received a letter from Lucius Roy Holbrook, Jr. offering him a three-month job—to evaluate, on behalf of the Chinese Commission of Aeronautical Affairs, the capabilities of the Chinese air force. Holbrook was then working for Pawley at CAMCO, as well as having a consulting contract with Kung, soon replaced by Madame Chiang.
Chennault accepted the offer and immediately agreed to retire. In the meantime, a new offer came from Madame Chiang herself, who offered to put Chennault in charge of training Chinese pilots for the airline her husband had placed under her supervision.
Again, he did not hesitate. This was his big chance to rejoin Billy McDonald, one of the Trapezers from Maxwell Field, who had been hired in China two years earlier by William Pawley.
The two aviators arranged to meet at Chennault’s last stop before reaching to take a quick tour around Japan, gathering whatever intelligence they could on the Japanese military, the KMT’s enemy in the second Sino-Japanese war. McDonald, like Chennault, was understandably wary about entering Japan—essentially as a spy—and needed a cover story to prevent capture.[22]
What happened next is told in the book “Shadow Tigers” with a wide-eyed innocence which subsequent events would seem to have made difficult to maintain. Their cover story was a version of the circus coming to town.
Drinking in a bar in Shanghai, MacDonald had supposedly “ran into” an old fraternity brother, a guy who now was the manager of a circus troupe filled with Russian singers, Chinese jugglers, and from the Philippines, a trio called the Dixie Girls.[24]
And—what luck! The guy said the troupe was on its way to Japan for a few shows. And—way cooler even! —McDonald could come along, posing as the manager.
Chennault tagged along. After finishing up backstage, McDonald would slink away to meet with him, and pass along whatever intel he’d gathered. It was their idea of fun.
Holbrook met up with the men in Shanghai to escort Chennault to meet Madame Chiang at the French Concession in Shanghai, and from there to Hangchow. It was the summer of 1937, four and a half years before the United States was officially at war with Japan and bound by the Neutrality Act.
“While Chennault was evaluating the Chinese Air Force, Pawley was steadily becoming the main source of military aircraft for the Chinese,” according to Carrozza. But Chennault was employed by the Chinese, and they were at war against what was then a superior power, Japan, with which we were legally neutral. Talk about sticky wickets!
Chennault’s job was to train Chinese pilots in the 14th International Squadron all the tactics of flying he knew. That was as far as he could go. The problem was, according to Carrozza, that the “mercenaries channeled into the squadron seemed more interested in paychecks and the $1,000 bonus for every Japanese plane they downed than the honor of fighting for the defense of China.”[25]
One would have thought if the Chinese really wanted capitalism to flourish in China, they would not have had to hire mercenaries, right? The truth was that only a small percentage of Chinese even considered economic systems at the time, and those were the ones who had been propagandized by Americans, either missionaries in China or in schools in the United States.
This mercenary Chinese squadron committed suicide in March 1938 when the idiots in charge left all their planes lined up, bomb-loaded the night before they were to make a raid. Before they could take off the next morning, there was a Japanese attack. It destroyed all their planes in one go. At that point, Pawley put his three brothers in charge of managing CAMCO.
The French, pressured by Japan, closed the Burma Road to war matériel, so Pawley hauled his shipments back to Haiphong and loaded themt on ships to Rangoon, Burma. Factory crates were unloaded on the Burmese docks, reloaded onto railroad cars for a journey to Lashio. From there the crates were taken by barge and elephant to their final destination at CAMCO’s new factory at Loiwing.”[26]
Hundreds of Chinese workers at each factory site assembled each American plane from a kit Pawley purchased from American corporations with a 20% discount.
“In the three factories he operated in China, Pawley built and repaired $30 million worth of aircraft for the Chinese, resulting in profits as high as $1 million a year.”[27] He certainly didn’t pass the discount on to the Chinese. That’s true capitalism.
Chennault and Pawley constantly argued over whether the planes his CAMCO factories put together met the manufacturer’s specs. The State Department kept getting complaints that they hadn’t been allowed to bid on the contract. Pawley’s deal with Kung was called a “squeeze.”
The solution to this problem wouldn’t come for several years, as the U.S. inched closer to ending its neutrality with the Japanese. Chennault was getting letters and Christmas cards from pilots he’d worked with in the States. Elwyn Gibbon, “a former pilot with the Fourteenth International Squadron,” sent him a card, to which Chennault replied: “write W. D. Pawley, Intercontinent Corporation, Hong Kong, for job as a pilot in a special squadron.”[28]
The squadron began coming together as early as January 1940 by allowing the Chinese to purchase planes with credit established with American banks and obtain fifty Army and Navy pilots if the U.S. government allowed them to be recruited.
“Intercontinent would employ the pilots through a private contract with China ‘without any direct participation by the United States Government.’”[29]
It was not a simple negotiation process. China’s finance minister, T. V. Soong, lobbied for aid in a manner that wouldn’t upset currency stability, with help from FDR’s assistants, Lauchlin Currie and Joe Alsop, a cousin in the press. Thomas “Tommy the Cork” Corcoran “would steer the Chinese minister through the quagmire of governmental policies….”[30]
“Soong’s initial request was for a $50 million credit against tungsten exports to purchase nonmilitary supplies and improve conditions along the Burma Road, a vital supply route to southwest China during the Japanese invasion. But when Soong met with Secretary Morgenthau on July 9, the ante was raised to $140 million in credit and Soong now wanted to purchase three hundred fighter planes and a hundred light bombers.” By November Soong’s request was upped to $200 million.[31]
The conduit for the money was Universal Trading Corporation, originally set up in 1938 to receive monies and credit from a loan processed between the RFC and Soong’s bank. It had been repaid by exports of metals from China to the U.S. Like Intercontinent Aviation, its headquarters was 30 Rockefeller Center. The president of Universal Trading was Archie Lochhead, the first head of the U.S. Exchange Stabilization Fund. Chennault’s partner Whiting Willauer was secretary.[32]
By the time the terms of the contract were finalized, CAMCO had moved its plant from Yunnan to Rangoon in Burma. On April 15, 1941, Roosevelt signed a “secret, unlisted executive order” authorizing a private corporation holding a contract with a foreign government to hire U.S. military officers.[33] The contract was between the Chinese and CAMCO, and the officers they hired became the American Volunteer Group (AVG), better known as the Flying Tigers.
Whatever the source of the symbol—perhaps a Chinese proverb about “giving wings to the tiger” has been suggested—Disney Studio in Hollywood designed a logo of a winged Bengal tiger with outstretched claws which got promoted in Time magazine three weeks after the Pearl Harbor attack. That was when the United States went to war for real against Japan. After that there was no further need to worry about violating the Neutrality Act.
Sticky Wickets Aren’t Cricket
Trippe himself answered only to his board of directors, chairman of which was Cornelius Vanderbilt “Sonny” Whitney, the largest investor from the time it was founded, who’d always been a director, along with America’s other wealthiest men like William Rockefeller and William H. Vanderbilt—his first cousins.
Sonny’s palatial home on Long Island, was at Old Westbury, almost next door to Poppy Bush’s maternal grandfather, Bert Walker, a close friend of Sonny’s dad, Harry Payne Whitney. When Sonny was 26, his father named him as his replacement as director on numerous boards, including the Guaranty Trust. He did very little actual business, though he did play lot of polo, got married and divorced a few times. Things like that. Even got into the movie business with his cousin Jock.
Unfortunately for Juan Trippe and his fellow Pan Am board members—cousins Sonny and Jock Whitney, Sloan Colt, Bobby Lehman, E. O. McDonnell, FDR’s first cousin Lyman Delano, and Sherman Fairchild, for example—on October 1, 1949, the Central People’s Government of China proclaimed itself the real Chinese Government. To get Pan Am’s investment back required a lawsuit and an appeal.
CNAC’s Chinese president had absconded, quickly transferring his allegiance to the new Communist Government in Peking. He’d abandoned the Nationalist government of Chiang, which was even then being forced onto the most southern Chinese island of Formosa (Taiwan).
Chiang’s government announced its new name and, at the same time, claimed to own the aircraft CNAC’s president had handed over to the Reds. A tug of war ensued.
The cricket term “sticky wicket” indeed fit the situation. If you’ve ever watched a cricket match, you know the two plus years it took to reach a result was about average. The Supreme Court of Hong Kong, still a British colony at that time, in 1951 decided in favor of the Red Chinese.
Pan American Airways found itself temporarily in partnership with the Reds! While the appeal was pending, title to the aircraft was in limbo. A number of the aircraft had to be “pickled” in Hong Kong, placing CAT itself in a bit of a pickle.
They couldn’t use the pickled planes to deliver mail under the contract, and they were in desperate need for money. Harry S Truman’s new CIA came to the rescue.
Documents transferring the ownership of CAT and its assets to the Central Intelligence Agency were drafted—but classified as secret—and not disclosed until after Watergate in the Church hearings of 1975. The first step, however, was in figuring out the value of the two Chinese squadrons, while factoring in the 20% interest Pan Am acquired in 1943 when it bought out the Curtiss-Wright interest in China Airways.
The negotiation process was discussed in Robert Daley’s book about Juan Trippe:
“There was only one way for the Nationalist [Chinese] government, as majority stockholder, to unblock the airline's frozen dollar assets, and that was to buy out Pan American's 20 percent share. Negotiations began in November 1949 and lasted most of the month. T. V. Soong represented China; [William Langhorne] Bond and a company lawyer spoke for Pan American. Most negotiating sessions took place in Soong's luxuriously appointed apartment on Fifth Avenue overlooking Central Park.
“Bond had his instructions from Trippe. CNAC's assets had recently been appraised, and 20 percent of these assets came to just under $2 million. This was to be Bond's asking price. Soong's first firm offer was $1 million. Bond said he could not even take such an offer back to Trippe. After much haggling, Soong agreed on a purchase price of $1.25 million, adding, "Tell Mr. Trippe I wouldn't give that to him—not to anybody else in the world, Bondy, but you.”[34]
The CIA officially took over the airline as a proprietary in a document signed November 1, 1949, agreeing to pay $1,200,000 each year to maintain it. Thomas G. Corcoran, who had been involved in all sorts of legal sleight-of-hand since Franklin Roosevelt’s first days in office, now got help in doing the legal work from Paul Helliwell, a Florida lawyer then in the OSS.[35]
The Miami lawyer would later go on to set up Southern Air Transport (SAT) and Air Asia as CIA proprietaries.
George Doole’s Spook Airline
George Doole, who had been a civilian employee of PanAm for years, transferred over to CAT, which later became known as “Air America, Inc.” In the aftermath of Church Committee revelations about the CIA’s assassination and mind control programs, the Agency was under strong pressure to sell off the front companies used to hide their fleet of planes.
George Doole was just your average farm-bred boy in western Illinois until he graduated from the University of Illinois in Urbana. Born in 1909, a year already ushering in a new age of transportation technology—airways—he dreamed of making a new niche for air transport.
He received his sheepskin in general agricultural in 1932, at the same time he was awarded a commission in the Army Reserves, having been in ROTC. Though his dad’s middle name was “Andrew,” and George had a different middle name—Arntzen, his mother’s maiden name—shown in his military records and on his gravestone, he was often known simply as G. A. Doole, Jr.
Eight months of regular pilot training during his senior year of college (likely at Randolph Field in San Antonio, Texas) qualified him for an additional four months of advanced pilot training at Kelly Army Air Corps base in San Antonio.
Designated as a flight cadet, Doole was technically a civilian when hired by Pan American Airways Corporation at the end of his advanced training, and he shipped off to Honolulu in October 1932. Pan Am was a private corporation, cooperating with the federal government toward a dual purpose—building a commercial transnational airline service that could be converted to military purposes in the event of war.
For income in the meantime, Pan Am’s corporate directors would use contacts with the political power structure to gain concessions and contracts with the federal government—to ferry mail, materiel or even to transport charter passengers if needed. They agreed to convert to military use in event of war, a provision of the contract that enabled the company to be subsidized by the feds.
Doole was a mere grunt in the operation in those days, with assignments in Panama and Brownsville, Texas in addition to Hawaii. Pan Am flew only to certain countries in South America at first, leading up to its goal of expanding to China and the Far East.
Most of us never heard of Doole at all until 1975, when his name came up in Congressional House and Senate Reports after hearings had been held to investigate the CIA’s aviation activities—and abuses—worldwide. By that time, Doole was the head of Air America, known by some as “Spook Air.” How did Lt. George Doole rise to the top?
We’ve tracked his life to Hawaii in 1933, where generals, colonels and majors in the Army Air Corps got to spend their peacetime years right alongside admirals, captains, and commanders in the Navy. They all preferred to keep military use of airplanes within their own branch’s control, though there was another more powerful force that wanted to create a separate air force with a separate leadership, which finally won out.
What the directors of Pan Am wanted was to use every funding stream possible to build up their commercial enterprise—including whatever income they could finagle from military connections. Between 1932 and 1936 a great many of those connections were enjoying life in the middle of the Pacific Ocean, building up Pearl Harbor and the Hickham air base, initially under Army control.
While making jaunts between San Francisco, Panama, and Honolulu, Doole found his way to Brownsville, Texas, where one of his Pan Am colleagues with a slightly higher rank than his was Henry C. Kristofferson—the father of later Rhodes Scholar and country pop musician, Kris—cohort of the legendary Willie Nelson and the Highwaymen.
In mid-November 1936 Doole was a member of a reserve unit designated as the 42nd Reserve Bombardment, which was being given $30,000 from the federal government to build a new hangar adjacent to an unused municipal airport in Brownsville, near the border with Mexico. Doole was then the communications officer, while Kristofferson was assistant engineering officer. Later that month both men were transferred to Panama.
From Panama their paths would separate. During war years Doole’s status changed from reserve to active, as he served in the Air Force Transport Service in the India-China-Burma Theater. For several years Kristofferson would ferry executives of Saudi Aramco from place to place on Pan American Airways planes, even living in Saudi Arabia himself in 1962. We see his service as a model of how the plan’s design worked for Doole as well.
In 1943-45 Doole was captain of a Pan Am plane, busily transporting Naval Air troops between New York and Ireland, Portugal, Bermuda, and Brazil. Brazil was a fueling stop on the way to the Far East Theater—Philippines, Kunming and Indochina—dominated by Claire Chennault’s Flying Tigers and the OSS forces there.
There were many characters in our book who found themselves in that area during those same years: David Breed Lindsay, Sr. and Jr., Lucien Conein, Mitchell Livingston WerBell III.
More Proprietaries
Claire Chennault’s CAT may have been the first CIA proprietary created, but it was far from the last one. Air America itself actually started as two private companies founded by pilots trained to fight in World War II and the Korean War. One of those pilots headed back home after the war to McMinnville, Oregon, the home base for Evergreen Helicopters, Inc. founded in 1959. It sustained its existence by doing contracts with the U.S. Forest Service and Bureau of Land Management—fighting fires and reseeding forests using helicopters.
Similarly, Intermountain Aviation leased space at a county-owned airport in Pinal County, Arizona, also contracting with federal agencies in need of helicopters, in a desert area 90 miles southeast of Phoenix.
Marana, Arizona was a remote airbase which seemed to appear out of an unbroken vista of cactus and tumbleweed. One journalist trying to unravel the mystery of how the Agency hid, or “sheep-dipped,” planes acquired by the CIA from early days through the Vietnam War thought he found the key there in the desert.
The Watergate scandal opened up a Pandora’s Box of covert activities that had been going on for decades, so secret it shocked even hardened members of Congress. Nixon’s “smoking gun” tape—reminding the CIA about the “whole Bay of Pigs thing,” released shortly before he resigned in 1974—gave Congress an excuse to investigate all sorts of covert intelligence activities, just as the snakes began to slither into the brush for deeper cover.
So the CIA’s new director told the public that, since there was no further need for Air America, Southern Air Transport, Air Asia, and other CIA-owned airlines, they would sell them off. What they didn’t say is that they would just modify the form of ownership and not disclose how it was done.
A decade later we observed that new form of sheep-dipping when Eugene Hasenfus appeared out of nowhere in Nicaragua, claiming to be working for the CIA. One more Congressional Report revealed not only the new ways to hide intelligence agency ownership, but also how funds can be disguised through Swiss banks and Caribbean entities.
William J. Casey, Stanley Sporkin and William P. Barr, to name only three lawyers, were there to give the Agency, as well as that era’s Republican Administration, tips on how to extort funds from foreign nationals to fund an illegal war.
When the Marana base was privatized in 1975, top CIA aviation officers, including the Agency’s legendary George A. Doole, Jr., “retired” and went to work for the now-private Evergreen International—the company resulting from the merger of Evergreen Helicopters and Intermountain Aviation.
The CIA’s far-flung aviation operations, which span the globe, would continue to be based there. Thousands of airplanes sitting parked, waiting to be reactivated. Inside the largest hanger hangs a plaque dedicated to Doole, who died in Washington, D.C. in 1985.
The subsequent privatization of government assets into private hands had the same result as it did when Russia began to privatize 15 years later. The aviation wing of American crony capitalism was born. Soon retired Generals, like Richard Secord and John Singlaub, became instant corporate CEO’s, running aircraft charter and aviation companies that continued doing the CIA’s bidding.
Who’s been doing their bidding ever since? Suffice it to say it’s a bit murky at this time.
As you read this, my work is done. I have, as Shakespeare said, “shuffled off this mortal coil.”
The next generation must pick up where the boomers leave off.
All I have to leave you with is a clue. Reread the excerpt at the beginning of this chapter. Then start digging.
Hasta la vista, Baby.
[1] Bob Fitrakis, “Jeffrey Epstein: There’s Much More to the Story,” Columbus Free Press, June 18, 2020. https://columbusfreepress.com/article/jeffrey-epstein-there%E2%80%99s-much-more-story-2
[2] Believe it or not, “Little Nicky” will be mentioned again later in connection with Donald Trump’s associate, Leslie Greyling.
[3] “WHITTINGTONS, LEVITZ PLEAD GUILTY, FORFEIT MILLIONS IN SMUGGLING CASE,” South Florida Sun Sentinel, March 15, 1986. https://www.sun-sentinel.com/1986/03/15/whittingtons-levitz-plead-guilty-forfeit-millions-in-smuggling-case/
[4] Interview with author.
[5] Tracey Cheek, “The History of Aircraft Trusts,” March 28, 2018. https://agcorp.com/2018/03/the-history-of-aircraft-trusts/
[6] Smartmatic had earlier merged with Sequoia Voting Systems, and it was regularly accused by the CIA of rigging elections. “Venezuela election bets on Florida voting machine,” Tampa Bay Times, 20 Jul 2004, Page 31. Also see crash report in The Miami Herald, 01 May 2008, Page 29.
[7] Blake Stilwell, “‘Sheep Dipping’ is the worst name for the military’s best job,” We Are The Mighty Military News, December 29, 2022. https://www.wearethemighty.com/mighty-culture/sheep-dipping/
[8] Volume I Issue III December 2000 Mooney Pilot 39.
[9] Ibid.
[10] Daniel Hopsicker, “Terror Flight School Owner’s Lear Flew Saudis on Unsupervised Flights, May 4, 2004. https://www.madcowprod.com/2004/05/04/terror-flight-school-owners-lear-flew-saudis-on-unsupervised-flights/
[11] https://www.shannonwatch.org/content/aircraft-linked-cia-extraordinary-rendition-flights
[12] Anthony R. Carrozza, William D. Pawley: The Extraordinary Life of the Adventurer, Entrepreneur, and Diplomat Who Cofounded the Flying Tigers (Potomac Books 2012).
[13] Ibid.
[14] Anthony R. Carrozza, William D. Pawley: The Extraordinary Life of the Adventurer, Entrepreneur, and Diplomat Who Cofounded the Flying Tigers (p. 14). Potomac Books. Kindle Edition.
[15] Ibid.
[16] Daley, Robert. An American Saga - Juan Trippe and his Pan Am Empire . Riviera Productions Ltd.. Kindle Edition.
[17] Ibid.
[18] Carrozza, Anthony R. (p. 53). Potomac Books. Kindle Edition.
[19] “Man & Wife of the Year,” Time magazine, Monday, Jan. 03, 1938. https://content.time.com/time/subscriber/article/0,33009,847922-5,00.html
[20] Carrozza, Anthony R. (p. 39). Potomac Books. Kindle Edition.
[21] Carrozza, Anthony R. (p. 40). Potomac Books. Kindle Edition.
[22] Carrozza, Anthony R (p. 38). Potomac Books. Kindle Edition.
[23] Carrozza, Anthony R. (p. 42). Potomac Books. Kindle Edition.
[24] William C McDonald III and Barbara L Evenson, The Shadow Tiger: Billy McDonald, Wingman to Chennault (July 24, 2016).
[25] Carrozza, Anthony R. (p. 53). Potomac Books. Kindle Edition.
[26] Carrozza, Anthony R. (p. 53). Potomac Books. Kindle Edition.
[27] Carrozza, Anthony R (p. 54). Potomac Books. Kindle Edition.
[28] Carrozza, Anthony R. (p. 61). Potomac Books. Kindle Edition.
[29] Carrozza, Anthony R. (p. 62). Potomac Books. Kindle Edition.
[30] Carrozza, Anthony R. (p. 64). Potomac Books. Kindle Edition.
[31] Carrozza, Anthony R. (p. 64). Potomac Books. Kindle Edition.
[32] Carrozza, Anthony R. (p. 70). Potomac Books. Kindle Edition.
[33] Carrozza, Anthony R. (p. 81). Potomac Books. Kindle Edition.
[34] Daley, Robert. An American Saga - Juan Trippe and his Pan Am Empire. Riviera Productions Ltd. Kindle Edition.
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