Showing posts with label wiretapping. Show all posts
Showing posts with label wiretapping. Show all posts

Monday, April 4, 2011

Who Was That White House Call Girl?

A must-read for those who want to understand Watergate
Now that Phil Stanford's book, White House Call Girl, is available for purchase, we repeat our tickler to give you a taste of the questions the author was looking to answer all those years ago--when John and Mo Dean were suing people right and left for attempting to disclose the real story. There were questions in Stanford's 1986 article, which appears below. Many books by insiders and interviews from outsiders later, we learn many of the answers to those questions in Stanford's book, White House Call Girl
Mr. and Mrs. Dean

What we don't get to the bottom of, unfortunately (in my opinion), is the role of the "Texans" in the whole sordid affair. If you want to learn more about who the Texans really were, you have to study Quixotic Joust and do some research of your own. We call this our real history; it's what you don't read in textbooks. Real historians are usually called conspiracy theorists.





Watergate Revisited
© 1986 by Phil Stanford

Columbia Journalism Review, March/April, 1986

When Jim Hougan's new Watergate book, Secret Agenda, was published last winter, it caused a brief but intense flurry of interest. Writing for the New York Times Book Review, Pulitzer Prize-winner J. Anthony Lukas faulted Hougan in several instances for jumping to what he considered unwarranted conclusions, particularly when it came to Hougan's theory that the real reason behind the Watergate burglary was a secret sex scandal. However, he also found that Hougan had presented some "valuable evidence."

"If even half of this is true," wrote Lucas - whose word carries particular weight in this instance because his own book on Watergate, Nightmare, is considered the definitive work on the subject - Secret Agenda will add an important new dimension to our understanding of Watergate.

"But," Lukas added, "it may be months before reporters can sort through this material, check Mr. Hougan's sources, and decide which of these revelations is solid gold, which dross."

Reviewing the book for the Washington Post Book World, Anthony Marro, himself an old Watergate hand and now managing editor of Newsday, criticized Hougan for mixing "diligent information gathering with questionable, even reckless, assumptions about motive and purpose." Nevertheless, he wrote, "Hougan has attacked the official record of Watergate with . . . considerable skill, pointing up scores of questions, flaws, contradictions, and holes."

"It likely will take some time for Hougan's reporting to be absorbed, cross-checked, challenged, and tested," Marro added, "and whether this proves to be an important book or simply a controversial one will depend on how well it survives the scrutiny that it is sure to receive."

Another review, by Robert Sherrill, appeared in the St. Petersburg (Fla.) Times. Sherrill, who has a reputation for being a hard-nosed investigative writer, found that Hougan "builds a compelling case even though some crucial parts, as he readily concedes, are based on circumstantial evidence."

"If nothing else," Sherrill concluded, Secret Agenda has raised enough questions to remind the press that no matter how conscientiously it tries to unravel scandalous riddles of government, it should wait a few years before boasting that the solution is complete" - and, like Lukas and Marro, he left no doubt that he expected the press to get to work.

That, of course, was more than a year ago - and to date, apparently, no one from any of the major news organizations has made an effort to test any of Hougan's findings. This seems odd, if only because the Watergate affair is one of the most important political and journalistic events of our time, and because, if Hougan is right, our knowledge of it is seriously flawed.

What Hougan presents in Secret Agenda is not so much a totally new version of Watergate as it is, to use Marro's words, "a significant new dimension and perspective." There is nothing in his account to suggest that Richard M. Nixon was not guilty of impeachable offenses. Nor does Hougan dispute that the break-in was planned in the White House, or that when the burglars were caught, the president and his men conspired to cover up their involvement.

What he does say is that all the while this was going on, the CIA, quite without the knowledge of the White House, was pursuing an agenda of it own. Hougan says that at least two of those involved in the break-in were actually spying on the White House for the CIA and conducting their own illegal domestic operations; that one of these domestic operations involved spying on the clients of a call-girl ring operating out of an apartment complex near the Watergate; and that when the White House-planned bugging of the Democratic National Committee's headquarters threatened to expose this operation - as it might have, since some of the clients for the call girls were being referred from the DNC - it was sabotaged in order to protect the CIA's role.

"Watergate," Hougan writes, "was not so much a partisan political scandal as it was . . . a sex scandal, the unpredictable outcome of a CIA operation that, in the simplest of terms, tripped on its own shoelaces."

Now, this is clearly a mind-boggling scenario, and there is a natural tendency for some to simply laugh it off. However, -considering the published statements of journalists such as Lukas, Marro and Sherrill, as well as Hougan's own reputation as a serious writer and investigator - he is a former Washington editor of Harper's magazine and the author of Spooks, a welldocumented study of the use of intelligence agents by corporations and other private entities - Hougan's findings cannot be so easily dismissed.

What's needed is a careful look at his facts: either they are correct or they aren't. And the logical place for such an investigation to begin is with Hougan's account of the break-in, since that is the keystone of his entire argument. My own inquiries indicate that Hougan is right on several crucial points.

According to the generally accepted account of the break-in, the reason the Watergate burglars entered the headquarters of the Democratic National Committee on June 17, 1972, was to replace a defective bug on the telephone of the secretary of DNC chairman Larry O'Brien. As this version goes, in the course of a break-in two weeks earlier, James McCord had installed two bugs - one on the phone belonging to O'Brien's secretary, the other on the phone of another official, R. Spencer Oliver.

The Oliver bug worked, and for two weeks, we are told, a fellow named Alfred C. Baldwin III, sitting in a room in the Howard Johnson motor lodge across the street from the Watergate complex, monitored conversations from it.

Baldwin passed on summaries of those conversations - which he and others described as sexual in nature - to McCord, who passed them along to G. Gordon Liddy, who passed them on to Jeb Magruder. When the bug on O'Brien's phone failed to function, the Plumbers went back in to replace it, and that is when they were arrested. In any case, that is the standard version.

According to Hougan, however, the DNC was never bugged in the first place; when FBI technicians arrived on the scene later in the morning of the arrest they couldn't find a single bug in the DNC. And where does Hougan get this startling information? Hougan says it comes from FBI documents obtained through a freedom of information suit.

According to the documents he cites, neither FBI nor telephone company technicians were able to find the bugs that had supposedly been planted by the Watergate burglars - despite three top-to-bottom searches, which included the dismantling of every phone on the premises, and some urgent pleas from the prosecutor, assistant U.S. attorney Earl J. Silbert, who understood that the failure to find a bug could have serious consequences for his case. Furthermore, when an antiquated bug was actually discovered on a secretary's phone some three months later, the FBI tested it and concluded that it would have been incapable of transmitting outside the Watergate. They pronounced it a phony, probably a plant, and assigned it an entirely different case number.

Now, quite obviously, this raises some questions that demand answers. For example: Are the documents that Hougan cites genuine? Yes. They are on file at the FBI reading room in Washington, D.C., and I have examined them. Well, isn't it possible that these reports are merely interim reports, and that the FBI later reversed itself? Apparently not. I spoke with retired FBI special agent Wilbur G. Stevens, who was supervisor of the FBI laboratory during Watergate. He confirmed (a) that the FBI was never able to find a bug in the DNC and (b) that when one was later discovered after a call from a secretary at the DNC, the FBI considered it a fake.

"There's nothing that I know of that would change (these findings)," he said.

Then why haven't we heard of these FBI documents before? As Hougan points out in his book, the Justice Department under Nixon refused to release any of these reports to the Senate Watergate Committee. This is confirmed by Terry Lenzner, former assistant chief counsel for the committee. "We were concentrating on the cover-up," Lenzner told me. "It would have been useful to our investigation to have the documents in order to check them against any conflicts that might have risen." Nor were the documents given to the defendants in the Watergate trial, as noted in a pre-release story on Secret Agenda by the New York Times.

Hougan, who obtained a total of 16,000 documents through the Freedom of Information Act in 1980, was presumably the first person outside the Justice Department to examine them. But wasn't the prosecutor required by law to hand over material that might be exculpatory to the Watergate defendants? Anthony Lukas raises this question in his review for the New York Times, pointing out that, under the Brady rule, the prosecution is required to give all such evidence to the defense. In this case, the application of the rule seems especially obvious, because the government had charged the Watergate burglars with planting a bug that its own investigators said was a fake. When I asked the Watergate prosecutor, Earl Silbert, about this, he said he recalled the documents but had no clear recollection of whether they had been available to the defense. He went on to say that the Brady rule is only a "legalism," and that the prosecutor is required to turn over such material only if asked to do so by the defense.

"And, frankly, I just can't say that they asked," Silbert said. "If the memos weren't turned over to the defense, that was the reason."

"But how could they request them if they didn't know they existed?" I asked.

"I can see your point," Silbert said, "but some Brady requests are overbroad." What do the defense lawyers say about that? I sent copies of the FBI reports to one of them, Ellis S. Rubin. A prominent Miami trial lawyer, Rubin was retained to represent the four Cuban members of the burglary team - Eugenio Martinez, Frank Sturgis, Bernard -Barker and Virgilio Gonzalez - after they had pleaded guilty and been sentenced to prison.

When I called Rubin a few days later he expressed astonishment, stating categorically that his clients had never been given the information. "This is a definite violation of Brady vs. Maryland," he said, "and it could be cause for a new trial." He said he would take the matter up with his clients.

"You may have a bigger scoop than you imagined," Rubin added.

If, as my own abbreviated investigation shows, Hougan's facts on the break-in check out, this is obviously an important story in itself, as Rubin's comments would suggest. But, beyond this, even if Rubin and his clients decide not to seek a new trial, Hougan's version of the burglary is important because of the questions it raises about the rest of the Watergate affair. For example:
Since Alfred Baldwin was obviously listening to something in his room at the Howard Johnson, just what was he listening to? Hougan's answer - and this is where the sex-scandal theory begins to emerge - is that Baldwin was listening to transmissions from a bug that was planted elsewhere. Hougan concludes that the bug was situated in a prostitute's quarters in the Columbia Plaza, which is located near the Watergate complex. As Hougan himself points out, the evidence for this is circumstantial.

Another question posed by the new break-in evidence, however, is a bit easier to deal with:

If much of what we know about the break-in and bugging is false, then where did we get our original version of those events? Hougan's answer, supported in this instance by the records of the Watergate Commission, is - James McCord. If the standard version of the break-in is false, McCord was apparently lying.

But why?

According to Hougan, both McCord and E. Howard Hunt "were secretly working for the CIA while using the White House as a cover for domestic intelligence operations." Once again, this assertion is so contrary to what Hougan calls the "received version" of Watergate that we are tempted to dismiss it out of hand. However, Hougan's conclusions in this regard would seem to be based on the same kind of verifiable information as his break-in scenario, so that if anyone is interested it should be possible to check it out.

According to the generally accepted version of Watergate, Hunt is the somewhat buffoonish member of the White House Plumbers, a former CIA agent in disrepute, whose ineptitude contributed mightily to the bungling of the "third-rate burglary" at the DNC. As we have come to believe, Hunt left the agency in the spring of 1970 to take a job with a Washington public relations firm called the Robert R. Mullen Co. He continued in Mullen's employment after he got his job as a White House consultant, working as a publicity writer.

Marshaling information from several sources, Hougan argues that Hunt never really retired from the CIA. He presents evidence that two previous "retirements" by Hunt were acknowledged fakes; that shortly before Hunt ostensibly left the agency in 1970 his top-secret security clearance was actually extended in anticipation of his continued "utilization" by the CIA; that the Mullen company was no ordinary public relations firm but a CIA front with active CIA agents working out its office; and that during the Watergate period the president of the Mullen company, Robert Bennett, reported to his case agent at the CIA on his efforts to divert attention from any agency involvement in Watergate.

So, if Hunt was still working for the CIA, what was he doing at the White House? Hougan says he was there as an undercover agent, spying on the White House for the agency. In support of this, he introduces an internal CIA memorandum, written by an agency employee who worked at the White House CIA liaison office. According to the memo - which had been previously published as an addendum to House hearings, but in a vague, summary version, with the names of the author and its two addressees deleted - Hunt regularly used the office to send sealed envelopes back to CIA headquarters. On one occasion, according to this memo, a member of the liaison staff opened one of the envelopes and found it to contain "gossip" material.

Hougan found out the name of the author of the memo, Rob Roy Ratliff, and gave him a call. According to Ratliff, the gossip alluded to was about White House officials and other members of the administration. Hougan found another source, who described the gossip as "almost entirely of a sexual nature." He also discovered that the recipients of Hunt's missives, whose names had been deleted for reasons of "national security," were CIA director Richard Helms and the CIA's medical services division - the staff of which, as Hougan points out, uses such material to construct psychological profiles.

Hougan also succeeds in shedding new light on McCord, the chief Watergate burglar. Contrary to the popular conception of him as a plodding ex-agency gumshoe, Hougan writes, McCord was for years a high-ranking (GS-15) official in the CIA's Office of Security, which was responsible at various times for the agency's mind-control programs, plots to assassinate foreign leaders, and a variety of illegal domestic operations, such as the mail-opening project, the infiltration of the antiwar movement, and Operation Chaos. It is worth keeping in mind that at the time of Watergate none of these programs had been exposed.

As Hougan shows, McCord's supposed retirement from the CIA, which occurred in 1970, just three months after Hunt's, was also quite dubious. McCord's ostensible reason for retiring was to make more money than he earned on his GS-15 salary. However, before he signed on with the Republican National Committee and the Committee to Re-elect the President, McCord's only apparent sources of income were his pension, a part-time teaching job at a community college in Maryland, and a private security firm, McCord Associates, which had no clients until he was hired by the RNC.

Hougan cites several examples of McCord's activities during his tenure as a Republican security adviser that are difficult to explain, including the purchase in Chicago of several telephone bugs that would broadcast only via classified CIA communications satellites. There was also a suspicious incident that occurred at McCord's home just five days after the Watergate burglary; all of McCord's records were thrown into the fireplace and burned. Present for the event were McCord's wife (McCord was still in jail) and one Lee R. Pennington, Jr., a deep-cover contract agent who worked for McCord's old outfit, the Office of Security, and received his pay in the form of "sterile" checks. [According to Lukas,  he worked on a $250-a-month retainer under Howard Osborn (Chief of Security for the CIA), involved in Operation Chaos.]

A CIA memo, not made public until two years after the fire, indicates that Pennington went to McCord's home for the purpose of "destroying any indication of connections between the Agency and Mr. McCord." As Hougan points out, since it had already been reported in the press that McCord was a former employee of the CIA - McCord had testified to that effect at his arraignment - the only possible connection that might have concerned the agency would have been one subsequent to his retirement.

And what was McCord up to? Hougan says that, with the assistance of a down-and-out private investigator named Louis J. Russell, he was involved in bugging some prostitutes at the Columbia Plaza Apartments near Watergate, possibly to collect information that the CIA could use for political blackmail. At this point - as Hougan turns toward his sex-scandal theory - the facts are somewhat sketchier.

However, even with the sex scandal there are plenty of intriguing leads that would seem to warrant further inquiry. To start with, there is the call-girl ring itself, which operated out of the Columbia Plaza, catering to an assortment of Washington types, including a U.S. senator and a clutch of foreign intelligence agents. Hougan knows this because he got the "trick books." When the call-girl ring was exposed in the weeks before the Watergate break-in, it created a minor scandal. But until Hougan came along no one ever saw any reason to connect it to the Watergate affair. Hougan finds several possible links, including evidence of high-level White House interest in the case. [One person interested was the man in charge of hiring White House personnel and clearing them, Peter Flanigan, whose sister was married to the head of the investment firm which employed Larry O'Brien at about the time he went to work for Howard Hughes, at the same time he became head of DNC to run the 1972 election for the Democrats.]

More to the point, Hougan establishes through interviews with Phillip Mackin Bailley, the lawyer who pled guilty to running the call-girl operation, that clients for the prostitutes at the Columbia Plaza were being referred on a regular basis by a woman who worked in the DNC offices.

Next, Hougan produces another of the FBI documents he obtained through the FOIA - which reveals that when the burglars were arrested at the DNC, one of them, Eugenio Martinez, was caught by the police trying to get rid of a key he had in his coat pocket. And the key? As the FBI quickly determined, it belonged to the desk of Ida "Maxie" Wells. Wells was the secretary of R. Spencer Oliver, who, it will be remembered, was the DNC official whose phone was supposedly bugged.

What does the key mean? Hougan takes it as additional evidence for his thesis that Watergate was not so much a political scandal as it was a sex scandal. Maybe he's right, and maybe not; and maybe he's partly right, which strikes me as more likely.

At this point there's not enough information to come to any conclusion. However, the documents are on file at the FBI reading room for anyone interested in pursuing the matter. The key itself - along with copies of the FBI documents and other Watergate records - is to be found at the National Archives.

Without stopping to list several other evidentiary steps here, we can now go straight to Hougan's conclusion: that James McCord had been monitoring the prostitutes at the Columbia Plaza, possibly to obtain blackmail information for the CIA; that when the call-girl ring was busted, the White House saw a chance to collect some dirty stories of its own and launched the Plumbers on its own fact-finding mission; and that, in order to preserve the secrecy of this project, which amounted to nothing less than an illegal domestic operation by the CIA, McCord sabotaged the burglary, causing all hands to be arrested.

As should be clear, even from this brief summary, Hougan's sex-scandal scenario has some holes in it - the biggest being the lack of any positive proof that the CIA was involved in the call-girl operation, or that Baldwin was in fact listening in on the Columbia Plaza. However, it should be equally obvious that the real worth of Secret Agenda does not depend on this one rather sensational theory.

Especially for journalists, the importance of Hougan's book lies in the questions it raises about all the old theories that we have accepted as fact. In Secret Agenda, Hougan makes a convincing argument that at least some of what we think we know about Watergate is wrong.

It is high time that the press started facing up to the possibility.

Reprinted by Proquest with the permission of the Columbia Journalism Review; used here for non-commercial purposes only. 

Wednesday, March 30, 2011

Deep Politics in Dallas

An excerpt from Peter Dale Scott, Deep Politics and the Death of JFK:

                                                                                            
No one has yet documented the rumors one hears in Dallas that Ruby's relationship to the wealthy oilmen and "high rollers" of the Del Charro derived from his practice of supplying girls for them, their parties, and their private clubs.
What remains unexplained is the story of Ruby's relationship in 1963 to Candy Barr, a nationally known stripper and protegee of Mickey Cohen in Los Angeles. In 1957, Barr had been arrested and convicted on trumped-up marijuana charges, by the same players (prosecutor Bill Alexander and Judge Joe B. Brown) who in 1964 would convict Ruby on evidence that led to a reversal; Barr's defense attorneys, Joe Tonahill and Mel Belli, also represented Ruby. 27
In 1963 Ruby was regularly in telephone contact with Candy Barr, who was then out on parole but not permitted to visit Dallas. The rumor persists that the phone calls related to the stripper's attempt to blackmail someone of prominence. The rumor is reinforced by the knowledge that sexual blackmail was a practice for which Mickey Cohen was famous. 28
For some reason the Barr case also drew the attention of Gordon McLendon, who was one of those who told me in 1977 that she [Barr] had been framed on the marijuana charge (by members of the Dallas Police Narcotics Squad). McLendon's brother-in-law Lester May became her first attorney. McLendon told me this when I asked him for information about his friend Bedford Wynne.

While not giving me the answers I was hoping for, he volunteered the detail, which seemed trivial at the time, that Wynne's intimate friend George Owen, later the first [sic] husband of Maureen Dean, had been the man present at Candy Barr's arrest who may have helped set it up. 29

He also volunteered to me the detail, which at the time seemed unrelated, that when Bobby Baker emerged in 1972 from his time in prison for tax evasion and fraud, he went to stay with McLendon at his Cielo Ranch north of Dallas. I thought later that McLendon here was possibly standing in for Bedford Wynne and Clint Murchison, Jr., two of McLendon's friends who had been mentioned in the Bobby Baker hearings and were now unwilling to be publicly associated with Baker.

Since recent revelations about Watergate, I now wonder if the real link was not George Owen. Owen was extremely close to Bedford Wynne, and would party with him in Mexico, or even in his law office, where William McKenzie (of whom more in Chapter 18) was a partner.

George Owen also introduced to Bedford Wynne (the friend of Bobby Baker and member of his Quorum Club) to the woman Owen would later marry: Maureen Biner, who played a much-underestimated role in Watergate as the girlfriend, and then the wife, of John Dean.

27. Gary Mills and Ovid Demaris, Jack Ruby (New American Library, 1968), 64-68.

28. Davis, Mafia Kingfish, 262, where it is asserted that Marilyn Monroe knew both Mickey Cohen and John Roselli.

29. Mills and Demaris, Jack Ruby, 66.
~~~~~~~~~~~~~

A second excerpt from Peter Dale Scott, Deep Politics and the Death of JFK (1993), p. 236:
White House Call Girl
The most important of these [scandals in Washington involving politicians, call girls, and assignations recorded by intelligence experts for intelligence purposes] is Heidi Rikan's call-girl operation, a few doors from the Democratic National Committee headquarters in Watergate, which two separate and well-researched books have now seen as the key to the 1972 Watergate break-in and scandal.
According to both books, the phone line inside the DNC which was supposed to be tapped by Howard Hunt's Watergate burglar (including Frank Sturgis) was a special line (not going through the central switchboard), which DNC staffers and friends used to phone the Heidi Rikan call-girl operation. 37 Jim Hougan adds that the phone line was already being tapped by a stringer for Jack Anderson, Lou Russell. 38

Lou Russell was a former FBI agent who had helped Nixon with the Hiss case when he was both HUAC's committee counsel and also Hoover's informant on the Committee. 39 An employee in 1963 of Watergate burglar James McCord, Russell was close to Heidi Rikan's call girls whose line was the target of the Watergate burglars. Russell also had an unexplained financial relationship to McCord's attorney, Bernard Fensterwald (a longtime backer of the Garrison and other investigations of the John F. Kennedy assassination) and may have been working for Fensterwald as well.
Bernard Fensterwald

Fensterwald
At this point it should be pointed out that Fensterwald, as early as 1957 was employed as an aide to Democratic Senator Thomas Hennings of Missouri, who became John Dean's father-in-law in February 1962 when Dean married Karla Hennings. An attorney from Nashville, Tennessee, where his father was manager of a clothing store, Fensterwald became an administrative assistant to the Senate subcommittee on Constitutional Rights chaired by Hennings, resigning in January 1959 to become the top aide of Senator Estes Kefauver of Tennessee.

Sen. Kefauver's subcommittee had conducted an investigation into the professional sport of boxing and proposed legislation creating a national boxing commissioner with "power to clean  up the fight game by withholding licenses from boxers, managers and promoters in interstate bouts," a bill not supported by Attorney General Robert Kennedy. Soon after that Fensterwald was fired by Kefauver, and soon found a job working for Democratic Senator from Missouri--Senator Edward V. Long, a defender of Jimmy Hoffa.

Fensterwald would also show considerable animosity against RFK in March 1965 over the Jimmy Hoffa case:

MARCH 3, 1965
By JACK C. VANDENBERG
WASHINGTON (UPI) — Sen. Robert F. Kennedy, D - N.Y , clashed with a Senate subcommittee today over its airing of charges that he mishandled an investigation of Teamster boss James R. Hoffa while he was attorney general. Kennedy appeared before the judiciary subcommittee to protest what he called the "implication that I handled myself in some shocking manner while I was attorney general." The former cabinet member made no attempt to hide his irritation over the way the sub-committee handled the charge leveled against him by New York attorney Thomas A. Bolan, a witness at Tuesday's hearing.
Bolan said Kennedy had tried to influence public opinion against Hoffa by instigating unavorable publicity while the Teamster boss was under indictment. 
Makes Special Appearance
Kennedy, who denied the charge Tuesday, made a special appearance before the subcommittee today to repeat his denial and object to this handling of the matter.
He told the subcommittee he believed it was improper for Chairman Edward V. Long, D-Mo., to make statements about the matter "after hearing only one side of the story. After hearing Bolan's charge Tuesday, Long said he considered it a "shocking matter." The chairman said he would refer the testimony to the Senate Judiciary Committee for whatever action that group might want to take. Kennedy, a former chief counsel for a Senate investigation subcommittee, said he believed it was standard practice —when it was known a matter was coming up — to try to present both sides of a story.
Bolan had said that Kennedy arranged in March, 1961, to have Life magazine publish a story based on an interview with Sam Baron, a disgruntled Teamster Union official, at a time when Hoffa was under indictment.
Definition Of 'Fink'
In an exchange today with subcommittee counsel Bernard Fensterwald Jr., Kennedy said he saw nothing wrong with his actions as attorney general. Fensterwald asked Kennedy if he believed it was proper for a government official to "act as an intermediary between the press and a fink."
"What's your definition of a fink?" Kennedy demanded. "A person who is a stool pigeon." Fensterwald  retorted. "That's your definition," Kennedy snapped. "I consider Mr. Baron as a public spirited person who was doing his duty."
Fensterwald asked if Kennedy thought it was proper for a public official to arrange for publicity unfavorable to a person under indictment. "I never did anything like that and that is the implication of the testimony and remarks made by the subcommittee yesterday," Kennedy said heatedly.
At Tuesday's hearing, Kennedy's methods in prosecuting New York attorney Roy M. Cohn also were questioned. Bolan represented Cohn in New York last year when the former McCarthy committee counsel was tried and acquitted of charges of attempting to bribe a U.S. attorney. Cohn, who also testified Tuesday, made only indirect references to Kennedy. But Bolan told the subcommittee that Kennedy planted an article about a dissatisfied Teamster official in Life magazine. 
Denies Charge
Kennedy denied the charge, the New York Democrat said the Teamster official—Sam Baron—came to him "in fear of his life." According to Kennedy, Baron said he wanted to get in touch with some non-governmental official to tell his story. Kennedy said he set up a meeting with Life magazine with the understanding that nothing would be published until something happened to Baron. At the same time, Hoffa was under indictment, and Baron was "cooperating with the FBI." Kennedy said. Bolan was testifying before the subcommittee about a mail over placed on him. Bolan said he came across the information about Kennedy's involvement in the Life story while investigating the circumstances surrounding a similar story on Cohn.
Senator Ed Long, for whom Fensterwald worked for several years as counsel for his committees and subcommittees, would later be accused of business relationships with Hoffa's attorney, Morris Shenker of St. Louis. Shenker's 1989 obituary stated:
Shenker, a Russian immigrant who grew up in north St. Louis, first made a name for himself as a young lawyer by doing free legal work for the poor and getting involved in Democratic politics.
He had been recurrently in the national spotlight since representing gambling figures before the Estes Kefauver hearings on organized crime in the early 1950s.
Hoffa, his most famous client, had links to organized crime and disappeared in 1975. He is presumed dead.
Because of his Teamsters connection, Shenker, who operated the Dunes Hotel and Casino in the 1970s, ran afoul of the Nevada Gaming Commission. (Shenker's name had also surfaced often in connection with loans from the Teamsters Pension Fund.)
Despite state and federal investigations, however, Shenker escaped indictment until this year. In February, a federal grand jury accused him of conspiring to conceal hundreds of thousands of dollars from the Internal Revenue Service and bankruptcy creditors. The money supposedly was diverted from a California partnership owned by his children to individuals in Canada and then back to Shenker's secretary in Las Vegas in an elaborate scheme to avoid creditors. Shenker denied any wrongdoing.
Shenker had filed for bankruptcy in 1984 after a $34-million court verdict against him for money he borrowed from the Culinary Workers Pension Fund for resorts in Southern California and other projects. He had been involved in court battles over his finances ever since.

Wednesday, March 23, 2011

Nixon and the ITT Scandal of 1972

Sosthenes Behn and International Telephone

During the administration of Richard Nixon, one of the worst scandals to arise prior to Watergate was that involving the merger between International Telephone and Telegraph Co. and the Hartford Insurance Co. ITT had been founded by a man from an island purchased by the U.S. and renamed the Virgin Islands, thus making him an American citizen. He had considerable interests in Cuba, as well as Spain, and his outlook was in favor with that of Germany during the Nazi regime, as shown below in an excerpt from author Anthony Sutton, Wall Street and the Rise of Hitler


Peter Flanigan was caught up in the middle of the flap over I.T.T. just at the time John Mitchell resigned as Attorney General to take over the re-election of Nixon at CREEP headquarters.


From Chapter Five of Anthony Sutton, Wall Street and the Rise of Hitler:
The multi-national giant International Telephone and Telegraph (I.T.T.)1 was founded in 1920 by Virgin Islands-born entrepreneur Sosthenes Behn....In 1930 Behn acquired the German holding company of Standard Elekrizitäts A.G., controlled by I.T.T. (62.0 percent of the voting stock), A.E.G. (81.1 percent of the voting stock) and Felton and Guilleaume (six percent of the voting stock). In this deal Standard acquired two German manufacturing plants and a majority stock interest in Telefonfabrik Berliner A.G.I.T.T. also obtained the Standard subsidiaries in Germany, Ferdinand Schuchardt Berliner Fernsprech-und Telegraphenwerk A,G., as well as Mix and Genest in Berlin, and Suddeutsche Apparate Fabrik G,m.b.H. in Nuremburg.

It is interesting to note in passing that while Sosthenes Behn's I.T.T. controlled telephone companies and manufacturing plants in Germany, the cable traffic between the U.S. and Germany was under the control of Deutsch-Atlantische Telegraphengesellschaft (the German Atlantic Cable Company). This firm, together with the Commercial Cable Company and Western Union Telegraph Company, had a monopoly in transatlantic U.S.-German cable communications.

W.A. Harriman and Company took over a block of 625,000 shares in Deutsch-Atlantische in 1925, and the firm's board of directors included an unusual array of characters, many of whom we have met elsewhere. It included, for example, H. F. Albert, the German espionage agent in the United States in World War I; Franklin D. Roosevelt's former business associate yon Berenberg-Gossler; and Dr. Cuno, a former German chancellor of the 1923 inflationary era. I.T.T. in the United States was represented on the board by yon Guilleaume and Max Warburg of the Warburg banking family.
Baron Kurt von Schroder and the I.T.T.
There is no record that I.T.T. made direct payments to Hitler before the Nazi grab for power in 1933. On the other hand, numerous payments were made to Heinrich Himmler in the late 1930s and in World War II itself through I.T.T. German subsidiaries. The first meeting between Hitler and I.T.T. officials — so far as we know — was reported in August 1933,3 when Sosthenes Behn and I.T.T. German representative Henry Manne met with Hitler in Berchesgaden. Subsequently, Behn made contact with the Keppler circle (see Chapter Nine) and, through Keppler's influence, Nazi Baron Kurt von Schröder became the guardian of I.T.T. interests in Germany. Schröder acted as the conduit for I.T.T. money funneled to Heinrich Himmler's S.S. organization in 1944, while World War II was in progress, and the United states was at war with Germany.4

Through Kurt Schröder, Behn and his I.T.T. gained access to the profitable German armaments industry and bought substantial interest in German armaments firms, including Focke-Wolfe aircraft. These armaments operations made handsome profits, which could have been repatriated to the United States parent company. But they were reinvested in German rearmament. This reinvestment of profits in German armament firms suggests that Wall Street claims it was innocent of wrongdoing in German rearmament — and indeed did not even know of Hitler's intentions — are fraudulent. Specifically, I.T.T. purchase of a substantial interest in Focke-Wolfe meant, as Anthony Sampson has pointed out, that I.T.T. was producing German planes used to kill Americans and their allies — and it made excellent profits out of the enterprise.

In Kurt von Schröder, I.T.T. had access to the very heart of the Nazi power elite. Who was Schröder? Baron Kurt von Schröder was born in Hamburg in 1889 into an old, established German banking family. An earlier member of the Schröder family moved to London, changed his name to Schroder (without the dierisis) and organized the banking firm of J. Henry Schroder in London and J. Henry Schroder Banking Corporation in New York. Kurt von Schröder also became a partner in the private Cologne Bankhaus, J. H. Stein and Company, founded in the late eighteenth century. Both Schröder and Stein had been promoters, in company with French financiers, of the 1919 German separatist movement which attempted to split the rich Rhineland away from Germany and its troubles. In this escapade prominent Rhineland industrialists met at J. H. Stein's house on January 7, 1919 and a few months later organized a meeting, with Stein as chairman, to develop public support for the separatist movement. The 1919 action failed. The group tried again in 1923 and spearheaded another movement to break the Rhineland away from Germany to come under the protection of France. This attempt also failed. Kurt yon Schrader then linked up with Hitler and the early Nazis, and as in the 1919 and 1923 Rhineland separatist movements, Schröder represented and worked for German industrialists and armaments manufacturers.

In exchange for financial and industrial support arranged by yon Schrader, he later gained political prestige. Immediately after the Nazis gained power in 1933 Schrader became the German representative at the Bank for International Settlements, which Quigley calls the apex of the international control system, as well as head of the private bankers group advising the German Reichsbank. Heinrich Himmler appointed Schroder an S.S. Senior Group Leader, and in turn Himmler became a prominent member of Keppler's Circle. (See Chapter Nine.)

In 1938 the Schroder Bank in London became the German financial agent in Great Britain, represented at financial meetings by its Managing Director (and a director of the Bank of England), F.C. Tiarks. By World War II Baron Schrader had in this manner acquired an impressive list of political and banking connections reflecting a widespread influence; it was even reported to the U.S. Kilgore Committee that Schrader was influential enough in 1940 to bring Pierre Laval to power in France....

This was the Schröder who, after 1933, represented Sosthenes Behn of I.T.T. and I.T.T. interests in Nazi Germany. Precisely because Schröder had these excellent political connections with Hitler and the Nazi State, Behn appointed Schröder to the boards of all the I.T.T. German companies: Standard Electrizitatswerke A.G. in Berlin, C. Lorenz A.G. of Berlin, and Mix and Genest A.G. (in which Standard had a 94-percent participation).

In the mid-1930s another link was forged between Wall Street and Schröder, this time through the Rockefellers. In 1936 the underwriting and general securities business handled by J. Henry Schroder Banking Corporation in New York was merged into a new investment banking firm — Schroder, Rockefeller and Company, Inc. at 48 Wall Street. Carlton P. Fuller of Schroder Banking Corporation became president and Avery Rockefeller, son of Percy Rockefeller (brother [sic] of John D. Rockefeller) [Note: Avery was Percy's son; Percy was son of William A. Rockefeller, Jr.-- John D.'s brother, and both he and his brother, William G. Rockefeller, married daughters of James Stillman, founder of the City National Bank of NY--Citigroup] became vice president and director of the new firm. Previously, Avery Rockefeller had been associated behind the scenes with J. Henry Schroder Banking Corporation; the new firm brought him out into the open.7

Westrick, Texaco, and I.T.T.

I.T.T. had yet another conduit to Nazi Germany, through German attorney Dr. Gerhard Westrick. Westrick was one of a select group of Germans who had conducted espionage in the United States during World War I. The group included not only Kurt von Schröder and Westrick but also Franz von Papen — whom we shall meet in company with James Paul Warburg of the Bank of Manhattan in Chapter Ten — and Dr. Heinrich Albert. Albert, supposedly German commercial attache in the U.S. in World War I, was actually in charge of financing yon Papen's espionage program. After World War I Westrick and Albert formed the law firm of Albert and Westrick which specialized in, and profited heavily from, the Wall Street reparations loans. The Albert and Westrick firm handled the German end of the J Henry Schroder Banking loans, while the John Foster Dulles firm of Sullivan and Cromwell in New York handled the U.S. end of the Schroder loans.

Just prior to World War II the Albert-Papen-Westrick espionage operation in the United States began to repeat itself, only this time around the American authorities were more alert. Westrick came to the U.S. in 1940, supposedly as a commercial attache but in fact as Ribbentrop's personal representative. A stream of visitors to the influential Westrick eluded prominent directors of U.S. petroleum and industrial firms, and this brought Westrick to the attention of the FBI.

Westrick at this time became a director of all I.T.T. operations in Germany, in order to protect I.T.T. interests during the expected U.S. involvement in the European war.8 Among his other enterprises Westrick attempted to persuade Henry Ford to cut off supplies to Britain, and the favored treatment given by the Nazis to Ford interests in France suggests that Westrick was partially successful in neutralizing U.S. aid to Britain.

Although Westrick's most important wartime business connection in the United States was with International Telephone and Telegraph, he also represented other U.S. firms, including Underwood Elliott Fisher, owner of the German company Mercedes Buromaschinen A.G.; Eastman Kodak, which had a Kodak subsidiary in Germany; and the International Milk Corporation, with a Hamburg subsidiary. Among Westrick's deals (and the one which received the most publicity) was a contract for Texaco to supply oil to the German Navy, which he arranged with Torkild Rieber, chairman of the board of Texaco Company.

In 1940 Rieber discussed an oil deal with Hermann Goering, and Westrick in the United States worked for Texas Oil Company. His automobile was bought with Texaco funds, and Westrick's driver's license application gave Texaco as his business address. These activities were publicized on August 12, 1940. Rieber subsequently resigned from Texaco and Westrick returned to Germany. Two years later Rieber was chairman of South Carolina Shipbuilding and Dry Docks, supervising construction of more than $10 million of U.S. Navy ships, and a director of the Guggenheim family's Barber Asphalt Corporation and Seaboard Oil Company of Ohio.9. ...In short, during World War II International Telephone and Telegraph was making cash payments to S.S. leader Heinrich Himmler.10 These payments enabled I.T.T. to protect its investment in Focke-Wolfe, an aircraft manufacturing firm producing fighter aircraft used against the United States.

The interrogation of Kurt von Schröder on November 19, 1945 points up the deliberate nature of the close and profitable relationship between Colonel Sosthenes Behn of I.T.T., Westrick, Schröder, and the Nazi war machine during World War II, and that this was a deliberate and knowledgeable relationship....


For footnotes, see Chapter Five, of Wall Street and the Rise of Hitler, by Anthony Sutton.

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Peter Flanigan also found himself criticized over one of his aides, a Military Intelligence officer named Jonathan Chapman Rose, who seemed to be avoiding his military service as the Vietnam War raged, spending his days in a cushy job at the White House, assigned to Flanigan's office. Just as Jack Anderson had attacked the Nixon staffers for how they handled ITT, reporters also sniped about what this seemingly healthy attorney was doing instead of dodging bullets in Vietnamese ride paddies. It would turn out that Rose's father had been a high official in Eisenhower's administration, serving as deputy to the Secretary of the Treasury, George Humphrey. Chappie Rose, as he was called, had been an attorney during World War II, handling the same type of termination contracts for the Army that Nixon had handled for the Navy. He was a partner in a law firm founded in Ohio with a branch in Washington, D.C. to handle Rose's former boss' lobbying interests for the Hanna Mining Co., of which Humphrey was the controlling shareholder.

Jonathan C. Rose, Skull and Bones 1963, hid out in Peter Flanigan's office instead of serving in Vietnam, allegedly because of an injured left shoulder. He and Nixon's daughter, Tricia, had a mutual acquaintance in Cleveland.