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.

**********

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.

A plan to opiate the boomer generation

The Third Rail – Part Three

By Kris Millegan

In the statist world in which we live, there is a very real tendency to accept as fact all that the official organs of propaganda emit.                       — Alan Milchman

My father, Lloyd S. Millegan, was associated with American intelligence gathering operations from 1936 until he left the CIA in 1959. On his 18th birthday, in August of 1936 he boarded a ship from Portland, Oregon to spend his sophomore year of college at the University of Shanghai. In August of 1937, he left Shanghai traveling to Vladiviostok to board the Tran-Siberian Railway [important historically because of the money that built it just prior to the Bolshevik takeover in Russia, loan funds negotiated for Morgan Bank by Willard Straight, Whitney son-in-law] and journey across the USSR, and Europe, eventually attending the 1937 Oxford Life and Work Conference, along with John Foster Dulles, before going back to Oregon to finish school.

After college, my father was scheduled for graduate studies in 1939 in Switzerland, but finances and the kindling of WWII, sent him instead to Washington, DC. He was soon working in the basement of the Library of Congress under Archibald MacLeish, first as a research analyst for the Library of Congress, then with the Office of the Coordinator of Information, and finally moving on to the Office of Strategic Services (OSS) in mid 1942.

Then in August of 1943, my father became involved in what Professor Peter Dale Scott calls “deep politics.” Dad was inducted into the military, given the shortest training available, as a medic, but placed into G-2, and then joined General MacArthur's staff as the personal secretary to Dr. Joseph Hayden, who was MacArthur's Civil Advisor on Philippine Affairs. Part of my father's work was to report back to OSS in Washington about MacArthur and his aide Colonel Willoughby.

Among my father's other duties was working with the Philippine guerrillas. After Dr. Hayden died, my father worked even closer with guerillas. He went into Manila ahead of the American troops to “sequester” the Japanese-puppet governments papers. For that act he was sued by the Japanese government and given the Legion of Merit by the US Army. He had became very friendly with the guerrillas and helped them set up a temporary government.

When MacArthur returned, he found that many of the native Filipino oligarchs (who were his friends) had collaborated with the Japanese and been jailed by the guerrillas, who had actually fought the Japanese. MacArthur proceeded to let his friends out of jail, and soon someone came to replace my father, a Lieutenant Ed Lansdale. My father moved on to do research and analysis for the invasion of Japan, and then his final job in the military was to gather information and write a report on the Japanese use of opium and narcotics before and during WWII. This was a months-long project that including traveling and interviewing many political figures as well as the major opium players in East Asia.

My father then came back to Washington, DC, first to work in the State Department and then the Central Intelligence Agency, where he worked overtly until April of 1951, his last position, serving as Branch Chief, Head of East Asia Analysis Office. He then went into “private business,” setting up Pacific Books, Inc., and taking our whole family with him to Indonesia. After about a year we were back in Fairfax, Virginia, outside DC, where my father “worked” in public relations and advertising sales.

Then in 1956, my father and mother took a 4-month long trip to East Asia. Us kids were told it was to gather information for a book. He never wrote the book. Late in 1957, he was asked to serve as the vice-president of Scarritt College in Nashville, Tennessee. Then, all of a sudden, in 1959, the president of the school quit, my father was asked to serve as president, he said no, and moved the whole family out to Oregon. He went back to college, and soon was teaching junior high school to earn income. I was ten years old, a kid just following his folks around.

Then in the late 1960's my father asked me what I thought of the Vietnam War, and I gave him a flip teen-age answer, “You have some rice paddies, and a sack of hand grenades. You throw the grenades and win the war for the guys in the white hats.” My father said we had to have a talk. Sometime later, in September of 1969, he said it was time to have that talk. By then I was married, had a young daughter, was a partner in a growing record store, and sponsoring rock and roll dances. On Sept, 21, 1969, the day before my 20th birthday, we had that talk.

It was amazing, even though, I had no idea what was being said. My father seemingly had waited until a friend of his, Dr. D.F. Flemming (who was out promoting his new book, The Cold War and its Origins) was in town to participate. My father straight off told me, “The VietNam war is about drugs,” and that there were secret societies involved.

I didn't understand, and since it was the late 1960s, and I had long hair, etc. I deduced my father was having a “drug talk” with me. It all seemed so serious, what with some professor and all. So, I proceeded to sit up straight, and got ready to say, “yes, sir," waiting for my dad to tell me not to smoke dope, etc. But that is not what happened.

My father continued talking about his intelligence career. He explained, how he had first worked with the State Department, when he was an exchange student, then his service in the OSS, being “sheep-dipped” into G2, and being put on MacArthur's staff. They also talked a bunch about the Viet Nam war. They both felt that “they” (the powers that be) were playing out a “lose scenario,” because of the U.S. actions taken so far. They talked about psychological warfare, about how the news wasn't the real news. That the stuff in the news was “sway pieces,” and that when I had been told he was an advertising/PR salesman, my dad was actually helping to put together a daily high-level briefing. That he had left the CIA in 1959, and was talking to me now because of some paper he had signed, that didn't allow he to reveal anything for ten years.

It soon became apparent that I had no frame of reference, and wasn't truly able to comprehend what they were saying. The meeting was over, and I went on with my life.

I had some other conversations, and arguments with my Dad where I learned some other things, but one of the most amazing came after he was gone. Even though I hadn't understood the talks, had inspired me to investigate “CIA-Drugs.” Going through my father's papers after his death in 1990, I found an itinerary for the 1956 trip and noticed that he had traveled to Chiang Mai, Thailand. At that time I was very interested in the history of Chiang Mai, because of the role the city has played in the opium/heroin trade. I had been told that the city had grown to over a million people from a very small town in the 1950s, and was looking for information. Now, I could simply ask my mother.

So the next time I visited my Mother, I asked her about Chiang Mai. She said that, “Yes, it was a small village. The biggest thing in town was the church.” She said she had some pictures in a book up on her bookshelf. I reached up to get the photograph album, and mom made a little aside, “That's when I stopped believing everything I read in the newspaper.”

That pricked up my ears, because I had asked my mother questions before, and she always just brushed them aside, saying she didn't know anything. So, I asked my mom, what did she mean?

She said that in 1956 they had been in Vietnam before going to Thailand, and while in Thailand the newspaper reported on a battle in Viet Nam, right where they had been. She said, “There was no battle, we were having a picnic.”

I turned back the pages of her photo book from Chiang Mai, and there were pictures of my parents, Ed Lansdale and a bunch of soldiers. They were obviously having a picnic.

I borrowed the photo book and photocopied the page. One was a picture of my mother where she was so radiant and vivacious that it was later used during her memorial. Also in that picture you can see Ed Lansdale and others sitting around having a good time – a picnic. The interesting item, is what my mother had written in the margin next to the picture:

“Eudora (my mother's name) out from Saigon with Col. Lansdale and North Vietnamese Military leaders.” North Vietnamese Military leaders? Having a picnic?

Lansdale is the guy sitting with the flattop. And it is in the historical record that he fought fake battles in the Philippines. Could it be that he did something similar in Vietnam? (Fletcher Prouty's JFK: The CIA, Vietnam, and the Plot to Assassinate John F. Kennedy has some amazing revelations about Lansdale's mock and fake battles) What else was going on in Viet Nam at that time?

From Gerald Posner's in Warlords of Crime:

French intelligence and the CIA became involved in clandestine activities that would seem far-fetched in a spy novel but that played a major role in making the Triads and the Golden Triangle the greatest factors in the narcotics business. French intelligence dealt in narcotics to bankroll their costly war against Ho Chi Minh. The CIA, obsessed with the perceived cold war threat of monolithic communism, assisted criminal empires on the assumption that they would provide a buffer to postwar Communist expansion. The policies of these intelligence agencies transformed the region into the leading heroin-producing and -smuggling center. The French led the way.

When the French government finally banned opium in Indochina, French intelligence (SDECE) took the trade underground. The French military had decided the best way to fight the North Vietnamese Was to employ tens of thousands of mercenaries in counterinsurgency warfare. But the problem was a lack of funds. The Indochinese war was tremendously unpopular in France and the government provided little money. Senior French intelligence operatives decided expediency outweighed legality and "Operation X" was born.

From 1951 to 1954 the French developed a sophisticated opium distribution network, a feat which won the loyalty of the hill tribes, the population from which the French hoped to recruit their counterinsurgency army. Each spring SDECE operatives bought opium at competitive prices from the hill tribes. Mountain guerrillas then avoided customs and police controls by flying the illegal drugs to a French military school. From there they were taken by truck to Saigon, where they were turned over to a syndicate of river pirates who worked for the SDECE. The river pirates transformed the raw opium into a smokable version in two large Saigon refineries. Then they distributed some to the city's underground dens and sold the substantial excess to Chinese merchants with Triad connections. The river pirates split the enormous profits with French intelligence.

Operation X initially boosted the military efforts with large infusions of money. And the hill tribes rallied to the French cause as long as they received high prices for their opium. But when the SDECE utilized non-highland minorities as middlemen, the hill tribes complained they were being cheated. The French ignored the complaints. As the money to the hill tribes dwindled, so did their support for the French. The intelligence service's opium policy unwittingly helped to end France's role in Indochina. The Meo hill tribes, the backbone of the mercenary army, were so dissatisfied with their opium prices, they allowed the North Vietnamese to infiltrate the surrounding jungles and surprise the French garrison at Dien Bien Phu. Without Meo reinforcements, the French surrendered on May 8, 1954, and signed an armistice two months later.

The entire SDECE opium experience was not lost on the CIA, which monitored the French operation and realized that opium was the key to hill tribe loyalty. In half a dozen years, when the CIA sent agents into the Laotian and Vietnamese hills to organize counterinsurgency armies, they offered the French colonel who created Operation X a senior position. Convinced the CIA would never give him real power, he refused. The SDECE, in financing its Indochina war, made the Southeast Asian narcotics trade international in scope. While some opium was smuggled out of the Golden Triangle before 1950, the sheer bulk restricted the amount exported. But when French intelligence used the air force to move unlimited quantities, they established the foundations for large-scale postwar trafficking. By selling to Chinese merchants with Triad connections, they accelerated a narcotics network that expanded and paralleled the booming Hong Kong Triads.

Although the French signed a 1954 armistice, they merely agreed to withdraw from the northern half of the country and held a nationwide referendum in 1956. The SDECE maintained its partnership with the Saigon river pirates, ensuring immense profits from the opium dens, gambling casinos, and prostitution houses, including the Hall of Mirrors, the largest whorehouse on the globe. The CIA wanted to cancel the referendum since the Communists were likely to win a popular election. The CIA asked French intelligence to abandon its underworld ventures and turn them over to the Americans. The SDECE refused.

By early 1955 the French mobilized the river pirates and some Corsican mercenaries into a wartime battalion. In April the CIA, together with the South Vietnamese Army, fought a pitched battle with the SDECE forces. It was the first and last time that two Western intelligence agencies entered open combat. [emphasis added] Colonel Lansdale, the CIA chief, directed operations from the presidential palace, while Captain Antoine Savani, the SDECE chief, moved into the river pirates' headquarters. For six days a savage house-to-house battle raged for Saigon.

The river pirates offered a reward to anyone who brought Colonel Lansdale to their headquarters, where they promised to cut open his stomach and stuff him with dirt. There were no takers. The river pirates had grown soft through a decade of vice and corruption, and the CIA forces pushed them back into the Run Sat swamp. The outnumbered Corsicans withdrew. At the battle's end more than 500 were dead, 2,000 wounded, and 20,000 homeless. Ngo Dinh Diem, the Americans' handpicked choice, was in firm control of Saigon's political machinery and its extensive underworld.

During the next fifteen years the United States allowed the South Vietnamese to become deeply involved in the narcotics trade. The chief of the air force, later Premier and Vice President, Nguyen Cao Ky, became a principal smuggler, disguising his trafficking as intelligence and surveillance forays. His brother-in- law ran the Saigon port and oversaw a massive import and export of drugs. South Vietnamese officials worked closely with a Triad based in Saigon's Chinese suburb, Cholon. The Vietnamese used government planes and trucks to transport opium from the Golden Triangle into Saigon. The Cholon Triad negotiated the price with the Chinese growers in the Triangle, refined the narcotic in jungle labs and then distributed it to Vietnam's addicts and sold the excess to large Hong Kong syndicates. During this time Bangkok became a key transshipment point, a role it retains to this day.

U.S. military files are replete with the names of South Vietnamese government leaders who spent more time dealing in narcotics than in fighting Communists. Money poured into a system held together by corruption. But the United States not only overlooked its allies' illegal activities, it also assisted them. The CIA followed the path of French intelligence. When operatives went into the Laotian hills to organize counterinsurgency units, CIA agents assisted the Meos in planning maximum harvests.

Posner does leave some of the story out. He lays the blame for the opium smuggling on our “allies,” and the Triads, and leaves out a major player, Corsican Lucien Conein (who we will see plays a role in later events), but the basic history lesson is correct: The US took over the Golden Triangle opium trade from the French in 1955.

The words my father used were,

“The Viet Nam War is about drugs. There are these secret societies behind it. Communism is all a sham, these same secret societies are behind it. It's all a big game.”

And that “they” were playing out a “lose scenario.”

Later in a discussion/argument he told me that there was a plan to opiate the boomer generation. I didn't understand what he was saying, but I can now comprehend, somewhat, of how he came to those opinions.

So, why would someone have a “picnic” and tell the world they were having a battle?

It is a psychological operation – psy-ops. The action forces people to choose sides, and that's one of the first steps to being manipulated. "They" want you to choose a side, any side, they don't care. Sides can then hardened, and soon there is a “conflict.” Then, American boys and girls are sent to “Hell,” for one year. If they survive that year they get to go home. And a significant number of those boys and girls became addicted, and took their addiction home, where many became dealers to sustain the habit … and an “infection” began.

This was part of the warm-up for Watergate.

But you see this wasn't the only “protected” drug flow. There were several, creating problems for the players.

There was a flow through Texas, that Jack Ruby was involved with. There was one working through Albania, remnants of a “Nazi” network. There was an old one run by the mercantilists, with cover from the State and Justice Department. There were the operations run by Angleton. There was the one run through the old “China hands.” There were Mafia flows: All of these separate operations were causing problems, they were creating separate power centers.

Drug trafficking, gathers intelligence and money, which are always a nice commodity to have in one's corner. And with all these separate operations, hidden from each other by need-to-know and other spook and smuggler tricks, they kept on stepping on each others toes. Plus you had new people trying to get into the game.

Where did Nixon get his slush funds? What was all that about Mexican money laundering? From “Watergate to Whitewater Thrillride” by Daniel Hopsicker:

When the hush money finally gets paid to the arrested Cubans, it comes in the form of Mexican checks, turned over first to Maurice Stans of the CREEP, who transferred them in turn to Watergate burglar Gordon Liddy. Liddy then passed them on to Bernard Barker, one of the Miami station Cubans arrested on the night of the final Watergate break- in. Barker was actually carrying some of this "Mexican" cash left over from these checks when he was apprehended.

The money for the Plumbers had come from one of George Bush's intimates, and at the request of Bush, a member of the Nixon Cabinet from February, 1971 on. Just two days before a new law was scheduled to begin making anonymous donations illegal, $700,000 in cash, checks, and securities had been loaded into a briefcase at Pennzoil headquarters [a building formerly known as the Zapata Building] and picked up by a company vice president, who boarded a Washington- bound Pennzoil jet and delivered the funds to the Committee to Re-Elect the President at ten o'clock that night.

"A Suggestion From America’s Last Honest Man"

The U.S. House of Representatives Banking and Currency Committee, chaired by Texas Democrat Wright Patman, soon began a vigorous investigation of the money financing the break-in, large amounts of which were found as cash in the pockets of the burglars. The largest amount had gone into the Miami bank account of Watergate burglar Bernard Barker, a CIA operative since the Bay of Pigs invasion, $100,000 that had been sent in by Texas CREEP chairman William Liedtke, longtime business partner of George Bush.

On the day Nixon resigned the Presidency, Patman wrote to Peter Rodino, chairman of the House Judiciary Committee, asking him not to stop investigating Watergate. Though Patman died in 1976, his advice still holds good…but we won't hold our breath.

 

How much did George Bush himself know about the activities of the Plumbers, and when did he know it? George Bush? In 1972? Egad! But, apparently, Bush was knee-deep in things, as illustrated by the notorious White House meeting of June 23, 1972, whose exchange between Nixon and Haldeman--even without taking into consideration the unexplained 18-and-a-half minute gap in the same conversation-- provided the coup de grace to the agony of the Nixon regime. 

 

Haldeman says (on the tapes): "Now, on the investigation, you know the Democratic break-in thing, we're back in the problem area because the FBI is not under control, because [FBI chief] Gray doesn't exactly know how to control it and they have --their investigation is leading into some productive areas because they've been able to trace the money--not through the money itself--but through the bank sources--the banker. And, and it goes in some directions we don't want it to go."

 

To which Nixon's famous answer is, "When you get in-- when you get in (unintelligible) people, say, "Look, the problem is that this tracks back to the Bay of Pigs, the whole problem is that this will open the whole, the whole Bay of Pigs thing and the President just feels that ah, without going into the details--don't, don't lie to them to the extent to say there is no involvement, but just say this is a comedy of errors, without getting into it, the President believes that it is going to open the whole Bay of Pigs thing up again and, ah…they should call the FBI in and (unintelligible) don't go any further into this case period!

 

Based on Haldeman's later testimony, that Nixon's references to Howard Hunt and the Bay of Pigs are an oblique allusion to the Kennedy assassination, it seems that perhaps Mr. Nixon may have known more about the killing of Jack Kennedy than he was ever held accountable for--doubtlessly placing him in company with scores of others.

There then comes the one historical moment which, more than any other, delineates the character of George Bush. The scene was the Nixon White House during the final days of the Watergate debacle. White House officials, including George Bush, had spent the morning of that Monday, August 5, 1974, absorbing the impact of Nixon's notorious ``smoking gun'' tape, the recorded conversation between Nixon and his chief of staff, H.R. Haldeman, shortly after the original Watergate break-in, which could now no longer be withheld from the public. In that exchange of June 23, 1972, Nixon ordered that the CIA stop the FBI from further investigating how various sums of money found their way from Texas and Minnesota via Mexico City to the coffers of the Committee to Re-Elect the President (CREEP) and thence into the pockets of the “Plumbers” arrested in the Democratic Party headquarters in the Watergate building.

These revelations were widely interpreted as establishing a prima facie case of obstruction of justice against Nixon. That was fine with George, who sincerely wanted his patron and benefactor Nixon to resign. George's great concern was that the smoking gun tape called attention to a money-laundering mechanism which he, together with Bill Liedtke of Pennzoil, and Robert Mosbacher, had helped to set up.

When Nixon, in the “smoking gun” tape, talked about “the Texans” and “some Texas people,” Bush, Liedtke, and Mosbacher were to whom he was referring... The threat to George's political ambitions was great. The White House that morning was gripped by panic. Nixon would be gone before the end of the week. In the midst of the furor, White House Congressional liaison William Timmons wanted to know if everyone who needed to be informed had been briefed about the smoking gun transcript.

In a roomful of officials, some of whom were already sipping Scotch to steady their nerves, Timmons asked Dean Burch, ``Dean, does Bush know about the transcript yet?”

“Yes,” responded Burch. “Well, what did he do?” inquired Timmons. “He broke out into assholes and shit himself to death,” replied Burch.Why would Bush do that? Break out into assholes and shit himself to death? Could Barry Seal's arrest on explosives charges on July 2, 1972, have had something to do with the operations of Bush's Republican Texas money-raising squad of Hugh Liedtke, Pennzoil, and Robert Mosbacher?

Richard Nixon: Drug Kingpin?

Why not? Is anyone still so naive as to believe that the notorious practice of covert operatives "looking the other way" when drug trafficking is afoot began during the Contra Cocaine 80’s? Later in our story, we will even hear some persuasive evidence that Nixon’s buddy Bebe Rebozo had been the "money man" behind top Medellin cartel drug kingpin (and Barry Seal associate) Carlos Lehder.

According to "The Great Heroin Coup," Nixon's antidrug campaign was in reality a bid to establish his own intelligence network. Egil Krogh wanted the White House, instead of the CIA, handling the drug intelligence work, allowing Nixon's staff to decide which drug traffickers to pursue. So they reorganized.

When Howard Hunt told Krogh he could enlist for the office experienced CIA figures, starting with CIA veteran Lucien Conein at its head, it was a ballsy move, since the CIA had just been acutely embarrassed by the discovery that a huge proportion of the smugglers arrested in the big Justice Department Operation Eagle drug bust in 1970 were Cubans, and Bay of Pigs veterans to boot.

When Nixon chose William Sullivan instead, who had once been second to J. Edgar Hoover in the FBI, "the boys down at the Masonic Lodge," as we’ve heard them referred to, could not have been overjoyed. Clearly, the White House was out to gain control of narcotics intelligence at home and abroad. But even that wasn't enough. Nixon's staff also sought to control enforcement itself, and that required effective strike forces.

So in January of 1972 the White House set up the Office For Drug Abuse Law Enforcement (ODALE), according to a plan conceived by Gordon Liddy. Nixon named the soon-to-resign-in-disgrace Myles Ambrose to head of the newly created Drug Enforcement Office, which later became the Drug Enforcement Administration.

There is much more in the article, such as one particular Mexican drug run/cash flow that was rudely interrupted until Nixon was out of office. The full article can found online. The story and more are also in Hopsicker's book, Barry and "the Boys," The CIA, the Mob and America's Secret History.

And what was Nixon really doing in 1964 out in a Vietnam jungle with a box of gold that was so heavy it took three people to carry?

Watergate is much more than a “third-rate burglary”:  at its core, it's all about endgame.

Land and Loot: A How-To on Money Laundering - Part 3

Copyright 2011 by Linda Minor, all rights reserved

General Homes* was a large publicly traded land development company operating in Houston, which had an option to buy the Texas land mentioned in the previous segments. The feasibility of the project from General Homes’ perspective depended totally upon the cost of constructing a road and necessary drainage through the property, as required under the option. In addition to getting control of VisionBanc, Corson also had to be responsible for having a road and drainage work constructed through the General Homes property, and since he did not have the money for that, he spent a great deal of time entertaining a certain judge in Houston, who had the authority to make recommendations to the governing body in charge of roads and bridges in Harris County.

County Attorney Mike Driscoll’s civil lawsuit filed in 1993 against County Judge Jon Lindsay, alleged that the judge, who was chief administrator for the county, had accepted numerous favors from Robert Corson in exchange for Lindsay’s agreement to “cause the county to build a road through the Park 45 land and thereby improve the value of the land.”

The first evidence of the complicity of the judge in the developer’s scheme was not made public until seven years later by Corson’s former employee, Billy Wayne Chester, who brought the information to Mike Driscoll in the hope of protecting himself from future federal prosecutorial misconduct in a guilty plea to bank fraud. Chester was influenced in this decision by his friend, John Ballis, a dentist (who got into land development at the behest of his father-in-law) who was then appealing a U.S. District Court conviction on charges brought after Ballis had completed his probation under his own guilty plea. The feds’ position was that Ballis had failed to reveal all crimes in which he had participated, thereby releasing them from the terms of the plea agreement prohibiting further prosecution. Ballis argued that, though he repeatedly attempted to provide evidence of his having paid a million-dollar bribe to Commissioner Bob Eckels, the prosecutors refused to investigate the allegations.

Billy Chester had been a high school teacher and coach when he was approached in the late 1970’s by Carl Stockholm, an old friend working in one of Walter Mischer’s banks. Stockholm hired Chester and trained him in the real estate field, where he soon came in contact with Corson. During the Houston land boom that occurred, Chester left banking to work in the land development company Corson had formed with his mother, B.J. Garman. Prior to Chester’s employment, Corson had worked with a man named Andy Howard, a vice-president at General Homes, buying unrestricted reserves in General Homes subdivisions and developing them for commercial use—either selling or leasing to convenience stores and other enterprises. According to Chester, it was Howard who first introduced Corson to Jon Lindsay, during a luncheon meeting at a restaurant Lindsay frequented in the American General Insurance Co. building. Andy Howard was also intricately involved in the contract negotiations between Corson and General Homes on the Park 45 property.

Andy Howard was obviously acquainted with Jon Lindsay because in April 1985 Lindsay appointed him to the boards of the Harris County Housing Authority and the Housing Finance Corporation (HFC).[1] If we assume that Andy Howard’s appointment was consistent with the other appointments Lindsay made and with the proponents of those who favored creation of the Housing Finance Corporation, from whom was Jon Lindsay getting his instructions?

How are all the Lindsay appointees related? For clues, here’s a quote from a lawsuit Howard filed against Robert Corson on August 2, 1986:

Previously in 1985, Plaintiff, Andy Howard was employed by General Homes Corporation* in the position of Vice-President. His duties primarily revolved around analysis of, purchase and sale of real property and the development of same. In connection with this employment, Andy Howard enjoined [sic] a substantial salary, numerous financial benefits and the various advantageous attributes incident to this employment.

In connection with this employment, Andy Howard met Robert Corson. Robert Corson, B.J. Garman, Individually and d/b/a Corson & Garman, Defendants herein, were also actively engaged in Real Estate Development and sale. In connection with the business dealings that brought them together, Robert Corson became familiar with the capabilities of Andy Howard. Impressed by these capabilities, Robert Corson requested Andy Howard to leave General Homes and to take an employment position with Robert Corson and his organization. After a series of discussions, during which Andy Howard made known to Robert Corson a reluctance to give up the significant benefits and advantages that were inurring [sic] to Andy Howard as a result of his employment with General Homes, Robert Corson induced Andy Howard to sever his relationship with General Homes and to become employed by Robert Corson’s organization by virtue of a promise that Andy Howard would receive fifteen percent (15%) of the benefits arising out of and incident to the various business dealings and transactions that Andy Howard was to engage in (and that Andy Howard was to work on). * * *[fn]

Additionally, in a prior business transaction, individuals by the name of Clyde M. Speed and Robert M. Ley desired to convey to Andy Howard certain property. It was desired that this property be taken and held in the name of Robert Corson, Trustee. At all times Andy Howard was the beneficiary of this Trust and Robert Corson was the Trustor [?] owing feduciary [sic] duties to Andy Howard in connection with this transaction. Further to this, Clyde M. Speed and Robert M. Ley conveyed this property into the name of Robert Corson, Trustee. . . . At all times, however, Andy Howard was the beneficial and equitable owner of the property and the interest of Robert Corson was solely holding Title in the capacity as a Trustee.

The problem arose, according to the petition, when “[s]uddenly, in the spring of 1986, and without any explanation or prior warning, Robert Corson advised Andy Howard that Robert Corson no longer desired that Andy Howard be affiliated with Robert Corson, B.J. Garman or Corson & Garman.”

From this information, it can be seen that at the time Andy Howard was appointed to the board of the HFC he worked for General Homes, and thereafter for Robert Corson, whose primary source of business was from General Homes. If we assume for purposes of argument that Andy Howard and Robert Corson were working on behalf of the controlling shareholders of General Homes in their attempt to have the road and drainage work through Park 45 constructed at county expense, then Corson’s actions of using sham corporations to purchase land from himself makes more sense, BECAUSE it was General Homes which ultimately benefited from the looting of the savings and loan companies which made the loans to the straw borrowers who never made a single payment. General Homes kept a first lien on the property in the sale to Corson and also received cash from the proceeds of loans secured by second liens. When General Homes foreclosed on the first lien, the savings and loans (taxpayers) were wiped out, but General Homes got to keep the proceeds of those loans and also got the land back free and clear, with a new road in place. It was left to receivers for the creditors to sue to get back any fraudulently induced loan funds.

birth of general homes

General Homes was formed as a subsidiary of First General Realty, which was itself a subsidiary of First Mortgage Co.[1] According to a 1984 Houston Post story, First General began as a residential developer in Harris County with the Meyerland Additions and with Meyerland Plaza Shopping Center. The Post article stated:

The George Meyer family owned the land and was a partner in the development, but later sold out of the project, as did First General, and the Meyerland Co. was purchased early this year [1984] by the Houston-based Development Group, Inc.[2]

That one paragraph thus connects General Homes, the Meyer family and Mike Adkinson. The article continues:

Other Houston communities developed by First General include Nottingham, Ponderosa Forest, Ashford Forest, the Villages of Lakeside and four early subdivisions developed in the Clear Lake area in partnership with the firm then called the Humble Co. and now known as the Exxon Corp.* * *

Tom Robinson, originally with First Mortgage, is the actual founder of First General, which started as a sideline to the mortgage business in the 1950s. First General employees bought the company from Robinson in the 1970s. He is now retired.

Richard H. Skinner, First General chairman, and H. Fred Schoenberg, president, along with John L. Mattern, vice president and treasurer, were hired away from Arthur Andersen & Co. as accountants and management consultants in the late 1970s and are now among the owners of First General.

Richard G. Carlson, vice president for marketing, who is now buying in as an owner, notes that the sellers kept a piece of the action when First General was acquired three years ago by the Milwaukee-based Northwestern Mutual Life Insurance Co.

We will return to Northwestern Mutual’s name repeatedly as this study continues.

---

[fn] General Homes Corporation was affiliated with the American Savings & Loan Association of Miami, which was dragged down in 1985 by the ESM Government Securities fraud.

 

[1] The HFC was organized as a non-profit county-sponsored corporation which was authorized by Texas law to issue tax-exempt bonds to fund construction and purchases of low and moderate income housing--both single and multi-family. Jon Lindsay is the official who recommended its creation by Harris County in 1980, after ordering a study conducted by municipal bond brokers Underwood Neuhaus & Company and First Southwest Company. The first of these brokerage firms had connections to W.S. Farish III and his relatives; the second was at that time being operated in Houston by Howard Pulver and his Manhattan associates with ties to Mainland Savings--ably documented in chapter 4 of Pete Brewton's book. According to Houston Chronicle reporter Bill Mintz, Lindsay's friend Tom Masterson "ran the bond and public finance operations at Underwood, Neuhaus & Co. for 29 years before leaving in 1985 to start his own investment and brokerage firm. In 1991, the firm [Masterson Moreland Sauer Whisman] bought the public finance operations of the Houston investment firm Lovett Underwood Neuhaus & Webb." According to the January 12, 1996 article by Mintz, Masterson's firm was considering merging with First Southwest of Dallas, headed by Hill Feinberg, who was managing director in the Dallas office of Bear Stearns & Co. for 14 years before buying First Southwest in 1991 with Bob Utley. Utley "is a developer who participated in financier Ronald Perelman's 1988 acquisition of First Gibraltar."

                    Interestingly enough, the Underwood, Neuhaus study was ordered to be done by commissioners court on June 9, 1980, although legal documents prepared by Vinson & Elkins drafting the articles of incorporation and bylaws, were forwarded to the brokerage firm five days earlier by V&E attorney Bob Randolph.  The creation of the corporation was approved on June 24, 1980.  Rather than have only the same five board members who were then sitting on the Housing Authority Board, Lindsay proposed increasing the board to nine, and the names of Billy Burge, Richard S. Slocomb, Jack Fields and Paul W. Davis were added.  Davis, Lindsay's appointee and president of Mortgage and Trust, Inc. of 3100 Travis, resigned from the board in July 1981.  In his place Lindsay appointed W.E. Daniels, president of First Continental Mortgage, a Mischer-controlled investment trust.  Andy Howard replaced O.J. Streigler, a prior appointee, but Howard served only until August 12, 1986, two months after the Park 45/Florida closing.  He was replaced by Steve Krueger, a banker employed by Joe Russo's Ameriway Savings.

                    W.E. Daniels resigned in January 1988, citing his commitment to "Rice Center" for allowing him insufficient time to serve.  His resignation was on letterhead of D&L Investments of 1360 Post Oak Blvd., Suite 2100.  Daniels' replacement was Robert M. Dawson, who was at that time president of Liberty Savings Association, and who had previously been a consultant for First Texas Savings of Dallas and president of SGF Investment Service Corporation, a subsidiary of United Savings.  His earliest work history was with Holland Mortgage from 1955 to 1972.

                    Harris County HFC made numerous loans for apartment construction which benefited Continental Savings, a company about which Pete Brewton had much to say in his book.  Continental loaned money to a company called Landmark Developers, Inc., with loans guaranteed by the HFC, which had to be restricted for low income tenants.  In at least one instance Landmark conveyed the property to a limited partnership, of which E. Trine Starnes, Jr. (whom Brewton classed in the same category as Robert Vesco) was general partner [J054366].  Starnes conveyed the apartments a year and a half later to an individual, and the next month there was a foreclosure.  By the end of 1986 the HFC had issued more than $278 million in multi-family bonds and more than $254 million in single-family bonds.  It is unknown how many of the loans went into default, but it appears that the apartments ended up being owned by investors in California.

[2] General Homes' mortgage lending company, FGMC, stands for First General Mortgage Corporation.  In 1981, FGMC's address was 5353 W. Alabama #401 [G924489].  In deeds of trust dating back to the 1950's Charles Foley was named as trustee for First Mortgage Co. and for a company called Fidelity Mutual Life Insurance.  In that same year, Charles Foley was appointed as substitute trustee by New York Life Insurance Co., Crown Life, Connecticut General and First General Realty.  In the late 1950's First Mortgage assigned a great many mortgage loans to Sun Life Insurance Co. of Canada, which had offices in Massachusetts.

[3] Houston Post, August 20, 1984.  DGI was the company Mike Adkinson allegedly controlled which was used to loot several savings and loans.

Land and Loot: A How-To on Money Laundering - Part 2

Ships, Planes and Mules:  Getting Drugs to their 

Destination and Banking the Cash

Copyright 2011 by Linda Minor, all rights reserved

In his ground-breaking book, Masters of Paradise, published in 1991, Alan A. Block wrote:

[I]t is the separation between organized and white-collar crime that most often puzzles me. I wonder which category to invoke when considering crimes such as loan sharking committed in tandem by racketeers and bankers; or how to define criminality associated with the looting of union pension and welfare funds, in which cabals of organized criminals, government and private lawyers, and accountants are prominent? Which term is appropriate when analyzing financial schemes designed to evade taxes and "launder" money for corporate executives, mobsters, drug smugglers, politicians, attorneys, etc., carried out in offshore banks in tax-haven countries such as The Bahamas, the Netherlands Antilles, Panama, and the Cayman Islands? Clearly such situations involve organized criminals often doing white-collar-type crimes, and white collar criminals frequently acting like racketeers.

 Block's book was newly published when I first discovered it in the early days of my research into allegations pertaining to whether a government official was engaged in crimes that seemed not to fit into an easily defined category. Those allegations were eventually set out in a 1992 book written by former Houston journalist Pete Brewton.

Paul Helliwell, "Mr. Republican" in 1952 Florida

Paul Helliwell Had Role in Banking Scheme.

In 1961 Paul Helliwell became “paymaster” for operatives working covert intelligence operations in the Bay of Pigs, although the methods he used to obtain and disperse funds are not clearly apparent. However, in late 1963, according to Alan A. Block's book, All Is Clouded by Desire, at page 40, Helliwell was involved with a bank in the Bahamas called Bank of the Caribbean, Ltd. This bank was “picked up” in 1965 by one of Helliwell's clients, a CIA-connected “insurance conglomerate,” and three years later the bank’s name was changed to Underwriters Bank Limited (UBL), its new directors being Helliwell; a man named Anthony James Tullis Gooding, who moved in 1973 to St. Peter Port, Guernsey, in the Channel Islands; May Gilmour; and Ernest J. Foster, a British subject who had also lived in Argentina.[1] UBL was registered by Inge Gordon Mosvold, a Norwegian shipbuilder, who may have been a front for an even wealthier man named Daniel K. Ludwig, for whom Mosvold had chartered the Mercantile Bank and Trust in Freeport in January 1962. 

The corporate shareholders of the Mercantile Bank were Cayship Investment Company, Inc. (Panama); Security (Bahamas) Limited; and Cia. de Navegacion Mandinga S.A. (Panama); as well as two nominees. Mercantile Bank was parent company for the now-famous Castle Bank & Trust formed by Helliwell, alleged to be “one of the CIA’s finance channels for operations against Cuba,” being managed from Andros Island in The Bahamas beginning in 1964.[2]

Daniel Ludwig was a Michigan-born shipowner who built a fortune in the 1930s before the repeal of Prohibition. Little is known about Ludwig, since he “deliberately avoid[ed] public notice, attempting to blend, chameleonlike, into the background,”[3] except that he was a partner in real estate ventures and horse racing with Edward Plunkett Taylor, founder in Canada of Argus Corporation (which later became the Toronto-based media company, Hollinger Corporation). Taylor allegedly associated with a network of persons involved in Permindex and the 1001 Club, and Ludwig may have made his initial fortune shipping whiskey for the Bronfmans to the Purple Gang during Prohibition--according to LaRouche associates' research.

After World War II, when huge profits were to be made by the "Seven Sisters" on oil imported from the Middle East, Ludwig began to face competition from Aristotle Onassis and Stavros Niarchos, who received encouragement to become shipbuilders who were given short-term loans from National City Bank of New York and long-term loans from Metropolitan Life Insurance Co. Onassis’ first oil tankers were built in Maryland and Massachusetts in 1947, but ships dating from 1953 were assembled in Hamburg, Germany, where wages were cheaper.[4]

Pete Brewton became familiar with some of the names mentioned above as he investigated a strange transaction Houston land developers made in the mid 1980s with Florida land development companies and their bankers. Attorney Lawrence Freeman's law clerk, for example, was named president of a somewhat ephemeral corporation called "Panhandle Coast," which assigned its contractual right to purchase land owned by St. Joe Paper Co. to a joint venture composed of a Houston developer, Mike Adkinson, and Southmark. One week later, Lawrence Freeman was indicted for laundering drug money for a pilot named Jack DeVoe, whom U.S. Customs accused of smuggling Colombian cocaine into the landing strip at Opa-Locka Airport in Miami owned by Key Largo's Ocean Reef Club (at that time being operated by Carl Lindner’s American Financial Corp. of Cincinnati). According to a government report issued, The President's Commission on Organized Crime, 1986:

The Devoe organization's methods for avoiding interdiction between South America and the United States were relatively simple and typical of such smuggling operations. A Devoe pilot learned the frequencies of DEA surveillance aircraft on one occasion by "acting like a helicopter buff" inspecting a DEA Cobra pursuit helicopter parked near the Devoe hangar. Inside the helicopter the pilot copied the frequencies from a clipboard hanging on the instrument panel. As the pilot explained to the Commission:

By [subsequently] using our scanner and our knowledge of the frequencies in use, we could monitor the activities of DEA planes . . . we could learn not only the activities of the planes, but also go up and check the plane out. By learning what types of aircraft DEA was using we could plan our own strategy more effectively... [See other amazing government reports on America's drug habits.]

Within a month after the DeVoe's indictment, Atkinson's partner, Southmark, was prohibited by the FSLIC from obtaining financing for its purchases from subsidiary, San Jacinto Savings, of Houston. Alternative financing was considered from Hill Financial Savings of Red Hill, Pennsylvania and BancPlus Savings of Pasadena, Texas. BancPlus (controlled by Houstonian Kenneth Schnitzer) eventually dropped out, to be replaced by Vision Banc Savings, an institution acquired by Robert L. Corson (mentioned in Part 1) in February of 1986 and declared insolvent four months later to the tune of about $60 million. Corson would later be linked by investigator/author Cheri Seymour to a top-secret drug running spooky organization which she traced back to the death of journalist Danny Casolaro. According to Seymour's book, The Last Circle:

An Associated Press news story entitled, "Deaths Linked to Spy Network," published in the Merced Sun Star newspaper, outlined the death of Ian Stuart Spiro, 46, who was found dead of cyanide poisoning in the Anza Borrego desert on November 8, 1992, one week after his wife and children were found shot to death in their Rancho Santa Fe home.

The news story, originating from the Oceanside Blade Citizen, noted that "documents and U.S. intelligence sources implicated Spiro in the Iran Contra arms-for-hostages affair and an alleged Justice Department conspiracy to pirate software from a private company and sell it to foreign intelligence agencies."

Spiro's name also appeared in Lt. Col. Oliver North's personal notebooks documenting the Iran-Contra affair, according to the National Security Archives in Washington D.C. Former hostage David Jacobsen told the Blade Citizen shortly after Spiro's death that Spiro helped negotiate the release of hostages in the Middle East. After obtaining a copy of a follow-up Blade Citizen article dated June 3, 1993, entitled, "Spiro Probers Want to Talk to North" by Wade Booth, Stacy Finz and Michael Williams, I learned that Ian Spiro lived in Beirut, Lebanon during the 1970's and 1980's where he "made contacts with Lebanese religious leaders and the Islamic Jihad."

Greg Quarton, Spiro's [Canadian-born] brother-in-law, told reporters at the Blade Citizen that Spiro maintained communication with Lebanese business associates until the time of his death, but investigating officers had possession of Spiro's phone bills, and as of this writing, they had not released them.

San Diego sheriff's Capt. Jim Marmack said detectives were investigating allegations by Spiro's relatives that his file cabinets and business papers were missing.

The week of the Spiro family's death, Robert Corson, a business associate of Spiro's indicted in a savings and loan scam, was found dead in an El Paso, Texas, motel room. Corson, who reportedly worked for the CIA, died of a heart attack, officials said. The Blade Citizen reported that Corson once carried money to South America in a deal to deliver covert weapons. Corson also allegedly associated with California investor Wayne Reeder who was seen at a Wackenhut/Contra meeting in Riverside county...

The newspaper article went on to say that Alan Michael May, age 50, (a former Northern California field director in Richard Nixon's presidential campaign and attorney for Nixon's brothers Donald and Edward) was found dead in his San Francisco home on June 19, 1991, four days after a newspaper story in the Napa Sentinel outlined his role in an alleged plot by Republican Party officials to bribe Iranian officials to delay the release of U.S. hostages until after President Reagan's inauguration.

A Los Angeles Times story November 13, 1992 revealed:

Lt. John Tenwolde of the sheriff's homicide detail said Thursday that detectives completed their search of Spiro's vehicle "and found several grams of granular sodium cyanide in a bag between the front seats."

...After a memorial service for the family Wednesday at the St. James-by-the-Sea Episcopal Church in La Jolla, Gail Spiro's brother, Ken Quarton, told reporters he believed that all of the family members, including Ian Spiro, were murdered.

Quarton said he believed the deaths were linked to threatening telephone calls that Ian Spiro said he was receiving less than a week before the deaths.

Quarton quoted Spiro as saying: "Something has come back to haunt me, and if you want to know what it is, read the book by Terry Waite."

Spiro would have been referring to a book being written by former Anglican Church envoy Terry Waite, who worked to release Western hostages held in Lebanon before he was taken captive in 1987. London newspapers have reported that Spiro worked for the CIA and British intelligence in Lebanon in the 1980s and assisted Lt. Col. Oliver North and Waite in attempts to free hostages.

---

[1] Authorized signatories for the Castle Bank account at American National Bank in Chicago were A. Aliprnati, A.R. Bickerton, L.A. Freeman, E.J. Foster, M.S. Gilmour, A.J.T. Gooding, H.M. Wolstencroft, Burton W. Kanter, and Helliwell.  Block, p. 162.

[2] Wall Street Journal, April 18, 1980.

[3] Ferdinand Lundberg, The Rich and the Super-Rich:  A Study in the Power of Money Today (New York:  Lyle Stuart, Inc. 1968), p. 51.

[4] Nicholas Fraser, Philip Jacobson, Mark Ottaway and Lewis Chester, Aristotle Onassis (Philadelphia & New York:  J.B. Lippincott Co., 1977), p. 90. 

Land and Loot: A How-To on Money Laundering - Part 1

St. Joe Paper’s Beach for Sale

by Linda Minor 

Copyright 2011, all rights reserved 

In the summer of 1986 a land sale occurred which, if analyzed correctly, can reveal the missing links between the actual smuggling and trafficking of illegal drugs in America, the laundering of drug proceeds through offshore banks and the reinvestment of those funds into land development projects. Coming as it did after the peak of the loans—Hill Financial of Red Hill, Pa. and Vision Banc Savings of Kingsville, Texas.

The seller was St. Joe Paper Co., a corporation whose stock was owned by the “charitable” DuPont de Nemours Foundation controlled from 1935 to 1981 by Ed Ball, brother-in-law of Alfred I. DuPont.[1] One of the foundation’s assets, held in Ball’s name (he had purchased it as nominee for Alfred DuPont who set up the foundation) was 21,000 acres of virgin beachfront property between Panama City and Pensacola, Florida. After Ball died, his successor, Jake Belin, stated in 1981 that he planned to develop the acreage himself, rather than sell the property as had once been indicated.

Belin began negotiating with William Michael Adkinson, a native Floridian living in Texas, the proposed buyer/developer for the land. Adkinson had relocated to Texas a few years before and had an office in the Arena Tower One, built by Mel Powers, a notorious alleged murderer in 1964 when he and his aunt, Candace Mossler, were prosecuted for the murder of her husband Jacques Mossler.[2] The core tenant in Arena One was General Homes Corporation, while Jake Belin’s nephew, Bruce Belin, a Harris and Fort Bend County land developer, had an office in the adjacent Arena Two.

Adkinson’s plan was to buy and simultaneously sell the Florida land—known in those days of the real estate boom as a land flip. Therefore, he went about looking for a buyer before ever committing himself to the purchase. As part of his marketing strategy he had glitzy designs of a development on the beachfront property with a hotel projected to be built by the Princess Hotel chain, which, he boasted, was already committed to the project. All he needed was a straw man to flip the property once or twice in order to support an increasing value, thus allowing him to siphon money out of some cooperative federally insured de-regulated savings and loans.

Robert Corson became that shill. He hired a lawyer in Houston to incorporate several sham corporations and brought in a few buddies to be named as presidents. Then, as part of the overall deal, Corson agreed to buy some useless land just north of Houston from General Homes which he would convey to the sham corporations which would then exchange it for the Florida land. General Homes would retain a first lien in the sale to Corson, but he would borrow additional funds from VisionBanc (which would be paid to General Homes) secured by a second lien. He would then resell the property to the sham corporations and retain liens to himself. Then these corporations would trade the land, which was given a greatly inflated value in spite of the liens against it, as credit on the purchase price on the Florida land.

The sales price in the Florida land contract was $200 million, none of which was cash to be put up by the buyer. St. Joe was to receive $70 million in cash, to come from proceeds of loans from Hill Financial and Vision Banc. Adkinson would purchase the St. Joe property much as Corson had done the Texas land, with first liens securing the notes payable back to the seller. In an unusual maneuver he convinced two lenders to make loans secured by second and third liens with the cash proceeds of those also going to St. Joe.

Not a single payment was ever made on any of the loans, and the proceeds paid to the seller at closing ended up in an account at Bank Cantrade on the British Isle of Jersey—a subsidiary of Union Bank of Switzerland. This transaction single-handedly destroyed both VisionBanc Savings and Hill Financial of Red Hill, Pennsylvania.

Following the bank failures, indictments were handed down against the persons whose names were reflected on the closing documents, and routine lawsuits were filed by attorneys appointed by the Resolution Trust Corporation to investigate whether directors of the financial institutions had violated their duties to their shareholders and the taxpayers. But it was Pete Brewton, investigative journalist for the Houston Post, who would not let the story go away. His research into the use by the CIA and Mafia of deregulated Texas savings and loan institutions was aimed at discovering for whom these indicted conspirators were fronting, and he zeroed in on similarities between this Florida transaction and a previous one in Houston, Texas, involving Adkinson.[3]

Brewton’s research disclosed that Mike Adkinson grew up in Florida and, after serving two years in the Army, went to work in his home state for a construction company. He joined Taylor Construction Co., building houses on Air Force and Army bases from 1974 to 1977, when he moved to San Antonio to work for Regal Homes until being transferred in 1979 to Houston, where he worked for two years as a vice president. According to Brewton [at page 333 of The Mafia, the CIA and George Bush], Adkinson “formed” Development Group, Inc. in July 1981 with Frank M. Gammon, Jr., Regal’s treasurer.

Harris County’s real property records, however, reveal that a corporation called Development Group, Inc. (DGI), with connections to Charter Financial Group, Inc., a subsidiary of Raymond Mason’s The Charter Company, based in Jacksonville, Florida, was operating as early as 1977. Mason was a very good friend and business associate of Ed Ball, the trustee of the estate left by Ball’s brother-in-law, Alfred I. Du Pont. Mason wrote Ball’s biography entitled Confusion To the Enemy, deriving the book’s title from a favorite toast Ball often made. 

This first DGI had sold all its land by September 1980 and failed to pay its corporate franchise taxes due through April 1981, resulting in the forfeiture of the state corporate charter.[4]  Adkinson somehow came up with the same name in 1981, when new articles of incorporation were filed by Marc Gordon, an attorney at Lackshin & Nathan of Houston, reportedly acting on behalf of his client, Ben Koshkin. 

The coincidence of names is intriguing because in 1972 Charter Oil and St. Joe paper swapped stock, giving Charter 8% of St. Joe and St. Joe 23% of Charter. In 1983 after Ball’s death, the swap was reversed. Three years after Charter declared bankruptcy in 1984, the stock was sold to Carl Lindner’s American Financial Corporation. Lindner has a history of buying companies with CIA connections, and those that have been looted. Examples are United Fruit Company, the Great Southwest Corporation, the Penn Central Railroad, and even Houston’s own Splashtown USA, which was another recipient of a loan from VisionBanc. St. Joe’s president, W.L. Thornton, signed a contract on October 3, 1985 to sell the 21,000 acres in Florida to an investment company (Panhandle Coast), whose president was Michel Beauvais-Wagoner.

Brewton discovered that Beauvais-Wagoner was the office manager and legal assistant for a Miami attorney named Lawrence Freeman, a front for persons named on the offshore account which ultimately received the biggest portion of the proceeds of the sale. These men were Raymond Harvey and Keith Alan Cox, whose address was #2 Tavistock in London.

Who was Keith Alan Cox?

The initial real estate contract provided that the initial purchaser, Panhandle Coast, would subsequently assign all its rights to buy the property to a joint venture composed of Mike Adkinson and Southmark, a conglomerate which began as a real estate investment trust held by Citizens and Southern Bank in Atlanta, notable, according to Brewton, for its CIA connections. We learn from the 1998 11th Circuit Court opinion, which reversed the convictions of certain players, that "Cox represented a group of Kuwatis who invested internationally through a multi-billion dollar company called Compendium Trust." This trust was a party to a 1987 lawsuit:

In Gheewala v Compendium Trust Company Ltd the plaintiff brought an action in Jersey seeking to establish his entitlement to a share of his family’s substantial assets following the death of his father who had died domiciled in Kenya. The basis of the plaintiff’s claim was that he was a member of a joint Hindu family as recognized in Hindu law. The first defendant was a Jersey company alleged to hold assets for the joint family, but all the other defendants were descendants of the deceased father who were domiciled in Kenya albeit half were resident there and half in England. Initially after the father’s death, some family members had held a mediation in London to settle the matter, but the settlement reached was then purportedly repudiated following which proceedings were issued in London, Kenya and Jersey. The disputed assets were scattered throughout East Africa, Europe (including substantial assets in the Channel Islands) and North America with the relevant documents in the same country as the asset in question.

 Another lawsuit in 1997 named the plaintiff as Mahesh Gheewala.

 One of Cox's partners was a man named Donald Martin Clitheroe, who was disciplined by the Law Society in the United Kingdom in 2006 for a long list of allegations including money-laundering and mortgage fraud and determined "not fit to be a solicitor." According to the facts of the case, Clitheroe was "born in 1955, was admitted as a solicitor in 1978. At the times material to the application the Respondent practised as a solicitor in partnership under the style of Cox, Clitheroe & Bond at Dilke House, 1 Malet Street, London WC1E 7JN. The Respondent ceased so to practise on or about 5th December 2002." It should be noted that both Tavistock Place and Malet Street are located near the Tavistock Square Gardens in London, south of Euston Station. King's Cross tube station, where the  July 7, 2005 bombing occurred, is just more than a mile to the northeast.

Freeman’s name set off alarm bells for Pete Brewton. This lawyer had been the in-house counsel for the Bahamian Castle Bank and Trust which gained notoriety in 1980 when the Wall Street Journal exposed its connection to Paul Helliwell. Helliwell, also a lawyer, had been a colonel in the U.S. Army’s G-2 Intelligence unit in the Middle East, later transferring to the O.S.S. as Chief of Intelligence in China. He had a reputation for buying information with bars of opium and reputedly met with Ho Chi Minh, leader of North Vietnam, three times in 1945. Despite his determined negotiation, Helliwell was unable to reach an agreement for the U.S. to provide Ho with weapons to use against Japan because Ho would not swear not to use them against the French as well. When O.S.S. was disbanded, Helliwell went back to his work in War Department (now euphemistically known as “Defense”) intelligence. He left the military around 1947, when the CIA was created, and joined a Miami law firm—Bouvier, Helliwell and Clark—but still found time to work for the CIA.[5]

His first major assignment after the war was to find a way for the CIA to subsidize the airline, Civil Air Transport, owned by Major General Claire L. Chennault, which had been used to furnish materiel to the anticommunist Chinese in Southeast Asia. In 1951 Helliwell set up Sea Supply as the CIA’s first proprietary company in order to transport weapons to the Nationalist Chinese troops in Burma and to Thailand police, whose Chief was involved in the opium trade. The planes were not returned empty after the guns were unloaded; they were filled with drugs destined for the United States—usually Florida. 

The money derived from the sale of the drugs had to be laundered for the CIA, and Helliwell figured out how to do it.  His associates in Sea Supply, and later in the Caribbean area planning the overthrow of President Jacobo Arbenz of Guatemala, were New York attorney Thomas G. Corcoran (one of FDR’s “Brain Trust”) and Frank Wisner.

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[1] The actual beneficiary under the will of Alfred Du Pont was a tax-exempt charitable trust which was to be managed for the benefit of a hospital for the elderly and for crippled children, held in trust by his wife Jessie and her brother, Ed Ball, as trustees. In 1981 when Ball died, his personal estate was also bequeathed to the foundation, with the executor and successor trustee being Jake Belin, a second cousin of Harris and Fort Bend County land developer Bruce Belin. When questioned about the distribution of Ball's property to the foundation, Belin admitted to selling some land held in Ed Ball's name to McDonnell-Douglas and Hughes Aircraft, the proceeds from which sales were "reinvested" into government securities.


[2] Candace had contacts with a number of sleazy attorneys: Melvin Belli handled a sale of a business known as United Surgical & Dental to her. The shares in this corporation were held by a San Francisco investment trust made up of himself and partners Lou Ashe and Richard Gerry; Percy Foreman represented Candace and Mel Powers in the murder trial, in which they were acquitted. The attorneys for United Surgical were Clyde Woody and Marian Rosen; Rosen came to Houston from Florida and later represented Edwin P. Wilson in his trial for selling explosives to Libya. Woody and Rosen were replaced by Lackshin and Nathan, who also represented Central National Bank, Continental Savings, Frank and Alec Hudson (Cadillac Development), John Riddle and Robert Corson. They had a variety of offices over the years--first with William Ladin, Houston Natural Gas Building, Shell One, Central National Bank Building, and Gibraltar after the S and L relocated to Northborough.


[3] Pete Brewton, The Mafia, the CIA and George Bush.


[4] according to a notice of State Tax Lien filed November 13, 1980 [File No. G54945]


[5] Most of the account which follows of Helliwell's career is taken from Alan A. Block, Masters of Paradise: Organized Crime and the Internal Revenue Service in The Bahamas (New Brunswick, N.J.: Transaction Publishers, 1991).