Just after the Sandy Hook murders we began hearing that a private weapons conglomerate called Freedom Group would be dismantled. Almost a year later, however, we learn the panic to sell was premature.

Freedom Group was formerly set up in 2006, two years before the end of George W. Bush's second term, although it first came on the scene prior to Dubya's election, in 1998, just as he was putting together the financing to spearhead his 2000 campaign. 

Cartoon from devinlong

Before 9/11/2001, we had no idea (did we?) that planes would eventually fly into the World Trade Center and allow Georgie the opportunity to charge into Saddam's Iraq to get even for what the bully had done to his daddy. 

We couldn't have known then about the future War on Terror. Could we? 

Unless ... there were members of his team who remembered how their own trust funds had been created by war. Were they, even then, whispering in Georgie's ear?

It was in September 2002 that he made a speech in Houston about Saddam, saying, 

"After all, this is the guy who tried to kill my dad at one time."  

The attempted assassination of former President Bush had occurred back in April, 1993, only two months after the elder Bush left office. Seventeen perpetrators, who had hidden explosives in a Toyota Landcruiser were caught and arrested before the Bush family even arrived in Kuwait. The visit itself took place and continued without noticeable incident, only being announced by the newly installed President Clinton after the trip was over. Two of the Bush sons, who were never named, were with their parents, as well as John Sununu, Houston lawyer James A. Baker III, and Dillon Read banker, Nicholas Brady. 

Dubya Bush was never satisfied with what he felt were Clinton's weak efforts at containing the Iraqis. He was looking for an excuse, even a flimsy one, to go back into Iraq, guns blasting. But the bankers had to get the money together to elect him to office. They would want to arrange capital investments in order to replenish their expenses as well.

Donald Rumsfeld jumped on the Cerberus bandwagon before January 2001, according to his financial disclosure form that year, which shows he owned a limited partnership interest in Cerberus Institutional Partners valued at more than half a million dollars, from which he earned $51,000 income during the disclosure period. The private equity fund had been managed by the ultra-secretive Stephen Feinberg since 1992.

Rummy's tax form in 2001

In an August 2012 issue of Rolling Stone, Matt Taibbi quoted the founder of the private equity firm as follows:

"We try to hide religiously," explained Steven Feinberg, the CEO of a takeover firm called Cerberus Capital Management that recently drove one of its targets into bankruptcy after saddling it with $2.3 billion in debt. "If anyone at Cerberus has his picture in the paper and a picture of his apartment, we will do more than fire that person," Feinberg told shareholders in 2007. "We will kill him. The jail sentence will be worth it."

John Snow and Dan Quayle also became involved with Cerberus, helping steer it to invest in 2004 in IAP Worldwide Services, Inc., which provided logistics for the Defense Department and  disaster-relief services for federal and state agencies. IAP's chief executive, Al Neffgen, was hired from Kellogg, Brown and Root, the Halliburton subsidiary Dick Cheney had chaired before leaving to help the second George Bush become the 43rd U.S. President.


The name Cerberus comes from Roman mythology. It was the name given to the three-headed dog who guarded the entrance to Hades (Hell), to keep the living from gaining access to their dead loved ones imprisoned there. Capturing this ravenous beast was the last and most difficult of the twelve labors Hercules was sentenced to perform. The symbolism seems above and beyond any intellectual acumen one would expect from Dubya Bush. Perhaps his Skull and Bones brothers at Yale were backing him up?

This is all simply part of how the military-industrial corporate complex we have often been warned about really works. Wall Street operatives see dollar signs whenever government does anything, and they insist on getting commissions when the government privatizes those functions and steers the contracts their way. Lobbyists are chosen from retiring military personnel and former Congressional staffs to promote the government's need for more and more contracts which they can capture. 

Actually, however, only the legal forms have changed from prior days. The process by which those with banking connections, i.e. inherited capital to invest, use their family and social ties to pool funds to elect political sycophants to do their bidding has not changed. The new corporate structure, however, does assist these elite banking types in keeping the names on the accounts hidden. 

Transition of Private Banking

Bert Walker III

George Herbert Walker III (Yale, Skull and Bones, 1953), was the son of Poppy Bush's favorite Uncle Herbie--G.H. Walker, Jr. After Yale Bert got his law degree from Harvard, then enlisted in the JAG Corps in the Air Force for two years, before joining his grandfather's investment bank, G.H. Walker and Co. in 1958. He became the bank's chairman in 1972 and helped raise funds for his nephew to run for President.  

The private banking company had been founded in 1900 by Prescott Bush's father-in-law, Bert's grandfather, who was also a grandfather of Bert's first cousin, Poppy Bush. With 14 offices by 1973, G.H. Walker and Co. acquired the Laird brokerage firm at about the same time the events that led to the Watergate scandal were unfolding. Shortly thereafter the newly merged investment bank merged with White, Weld in 1974, only to be taken over by Merrill, Lynch within four years' time. 

Ten years younger than Poppy, Bert III was named the Missouri Finance Chairman for President Nixon in 1972, the year following Poppy's appointment to head the U.S. delegation to the United Nations in New York City.

Bert's Yale and Bones classmate, William Henry Donaldson, got an MBA from Harvard and took his first job at the Walker family's bank. Then in 1959 Donaldson had left Walker to start Donaldson, Lufkin and Jenrette (DLJ), which he co-headed until 1973. 
 

"Donaldson's first job on Wall Street was at the old brokerage G. H. Walker and Co, run by Bush's uncle Herbert Walker," we were informed in December 2002, just over a year after the Enron scandal erupted. Pres. George W. Bush apparently felt the need to send Donaldson to head the SEC at that time--not surprising, since researchers like Malcolm S. Salter have discovered many strange dealings going on at Enron through DLJ maneuvers. 

The Financial Times (FT) wrote in a 2002 special report:

"Chase and Citi both underwrote a lot, but the advisory work and the real brains behind [the partnerships] was from CSFB and DLJ," says a former Enron employee. As a result, they were well rewarded. CSFB and DLJ were the leading underwriters of Enron securities, managing $7.4bn of the $25bn of stocks and bonds it issued, according to data from Bloomberg News.

The Zurich subsidiary of White, Weld and Co. AG was subsequently renamed Clariden Finanz AG (and later still Clariden Bank). In 1970 Credit Suisse and White, Weld set up a holding company for Clariden called WW Trust. Four years later Credit Suisse became the largest shareholder in WW Trust, which was renamed Société anonyme financière du Crédit Suisse et de White Weld (CS andWW).


In 1978, when Merrill Lynch bought White Weld and Co., White Weld dropped out of its Eurobond partnership with Credit Suisse, prompting CS to approach Dillon Read, which turned it down. First Boston then stepped in, creating Financiére Crédit Suisse-First Boston, a 50-50 joint venture widely known as Credit Suisse First Boston. 


a couple decades later was acquired by Swiss Bank Corporation, to form the core of that firm's U.S. investment banking business. Swiss Bank Corporation itself subsequently merged with Credit Suisse arch-rival Union Bank of Switzerland to form UBS AG.


Swiss-born Robert L. Genillard became a general partner of White, Weld and Co. in 1958 and a member of its management committee in 1964. He moved to Geneva to establish in the early 1960s, as Chairman and Chief Executive, the firm of Credit Suisse White Weld. Genillard is regarded as one of the main architects and developers of the Eurocapital market (Eurobond) in which the firm he led played a dominant role, along with his colleague, John Cattier, of White, Weld in Zurich. His professional writings and accomplishments have been widely published. During the last twenty years, Genillard has also been quite active in industry, notably with ties – since 1970 – to the Thyssen-Bornemisza Group

Three men from the Credit Suisse branch at Chiasso were arrested in 1977 in a bank fraud scandal that initially estimated losses of at least $100 million. A month later prosecutors raised it to $400 million, and the scandal would eventually incur total losses of $1.2 billion.

Charged with "misrouting" fiduciary accounts to a Liechtenstein-based holding company that invested the money in three Italian businesses, it seems likely the bank branch could be connected back to the 1973 kidnapping of the son of J. Paul Getty, when it was reported
that "ransom money from six Italian kidnappings, including that of Getty, grandson of the man reputed to be among the world's richest men, had been found in two banks in Chiasso" after a government magistrate had given the banks a list of names of people believed to have been behind numerous kidnappings in the border area. Events that led up to the scandal were described as follows:

In an operation that apparently has been going on for several years but was only publicly disclosed by the bank on April 14, more than $800 million in Italian lire had been transported illegally out of Italy by wealthy residents who were trying to hide the money, beat the taxes or protect their capital against a Communist take-over. The funds were deposited in the Credit Suisse branch at Chiasso, a picturesque Swiss village "within suitcase-carrying distance" of the Italian border. There, branch manager Ernst Kuhrmeier and two deputies allegedly put the funds into trust accounts that were not recorded on the bank's official books. They then allegedly funneled them, along with loan guarantees, to a front operation — nothing more than a mailing address — in the tiny principality of Liechtenstein.

Three Chiasso lawyers who acted as front men for the Vaduz, Liechtenstein, holding company named Texon-Finanzanstalt, were also arrested. Rainer Gut, a former partner in New York’s Lazard Freres, was second in line of those remaining, and he became chairman in 1983 following the retirement of Otto Aeppli.

In May 2007 a private equity firm with an intriguing name, Cerberus Capital Management, stepped in to relieve German car manufacturing corporation giant Daimler of an unsuccessful nine-year attempt to merge with Chrysler. Credit Suisse First Boston had represented the American company in that 1998 merger, while Daimler-Benz sought advice from Goldman Sachs and Deutsche Bank. 

Credit Suisse Bank, based in Basel with a New York branch, had, since 1962 often partnered in London Eurobond trades (a market in which companies raise funds by issuing bonds denominated in currencies other than their own) with White, Weld & Co., an investment bank with longstanding ties to Harvard, founded in Boston during the days of the old China trade. The partnership continued through a long chain of events that ended with a takeover in 1978.

In 1975 the scion of the Weld family, William Weld, a litigator at the Hill and Barlow firm in Boston, married Susan Roosevelt, a Harvard-educated attorney with the Boston law firm of Gaston Snow-Ely Bartlett. Susan's father, Quentin Roosevelt II, son Theodore Roosevelt Jr., was a grandson of President Theodore Roosevelt and first cousin of the famous spy Kermit (Kim) Roosevelt, Jr.

Susan Roosevelt Weld was born in 1949, shortly before her Uncle Kim, Middle Eastern expert in the Central Intelligence Agency, was up to his neck in Arab intrigue.

Copeland

A review of 1969 book, The Game Of Nations, written by Miles Copeland--a State Department employee and officer in the O.S.S. who allegedly helped set up the CIA--stated that it was an "open secret that Washington has been up to the elbows in Middle Eastern plots and counterplots but the degree of involvement and specific details are now for the first time exposed in a book just published in London." Delving into the CIA's role in the 1953 Iran coup, reviewer C.L. Sulzberger wrote for the NY Times Syndicate:

Kermit (Kim) Roosevelt, a C.I.A. Middle East expert, was loaned to Secretary of State John Foster Dulles to supervise "Operation Ajax" in August 1953, physically ousting the Mossadegh government of Iran and restoring the Shah. An American military attache helped arrange for a Nazi officer, Lt. Gen. Wilhelm Farmbacher, to assist Nasser in training his army. American officials were instrumental in getting to Cairo the famous Otto Skorzeny, an SS officer, and during his short Egyptian stay Skorzeny brought in "about a hundred Germans." 

Copeland says: "A certain well-known major general of the American Army" played a part in this affair.

Copeland's most fascinating revelations concern the Nasser revolution in Egypt. According to him Washington decided in 1952 that "Egypt was the place to start" an attempt to produce forward-looking, pro-American Arab governments. That February Roosevelt tried to organize a "peaceful revolution" under the umbrella of King Farouk. In March — four months before Nasser's coup — Roosevelt met representatives of Nasser's conspiracy. The plan to change things under Farouk was dropped.

American officials and Nasser's representatives reached "a private understanding that the preconditions for democratic government did not exist and wouldn't exist for many years" in Egypt. In July Nasser seized power (with no American assistance) and Nasser's right-hand man, Ali Sabri, immediately informed Ambassador Jefferson Caffery that Nasser wanted
"friendly relations" with Washington.

Copeland says Caffery arranged with Nasser "for the loan to the Egyptian government of perhaps the leading practitioner of 'black' and 'gray' propaganda in the western world, Paul Linebargcr," a former expert for the O.S.S. (forerunner of the C.I.A.).

Nasser asked for limited American military aid — up to $40 milhon. Copeland observes: 

"As I will show later on, it was the State Department's delays in granting this comparatively small amount which caused Nasser to turn to the Soviets — with the result, that he got many limes over the $40 million which he originally asked from us."

In August 1953 Roosevelt was sent on a secret mission (says Copeland) to try and end the impasse between Egypt and Britain on Suez base negotiations. In November 1954 two U.S. colonels, Albert Gebhardt and Wilbur Eveland, discussed an arms deal with Nasser "for internal security purposes."A tentative military agreement was announced in January 1955 but by September, when Washington had done nothing, Nasser sent a personal warning to Roosevelt that he was about to make an arms accord with Russia. Roosevelt and Copeland flew to Cairo.

 See also two excerpted interviews with Miles Copeland.

Cerberus paid $7.4 billion for the Chrysler shares.

Cerberus in mythology

Further details in the article revealed some history of Cerberus activity involving Canadian corporations:

Talks begin soon between the United Auto Workers and Detroit’s car makers on a national contract and analysts expect Cerberus, headed by former U.S. treasury secretary John Snow, to push for radical changes at its money-losing Chrysler, Jeep and Dodge operations.

The announcement sent shudders through much of Chrysler’s work force, despite assurances from Chrysler CEO Tom LaSorda that there are no major plans under discussion with Cerberus to cut jobs beyond a previously announced restructuring plan.

Magna chairman Frank Stronach formally announced last Wednesday his firm had teamed up with Toronto-based buyout firm Onex Corp. (TSX:OCX) to make an offer for Chrysler that was rumoured to be valued at about US$4.6 billion.

However, the partners were outbid by more than $2 billion by Cerberus, a company well known in Canada after leading a buyout of Air Canada (TSX:AC) and becoming the Montreal carrier’s largest shareholder.

The sale of 80.1 per cent of Chrysler to Cerberus Capital Management LP unwinds the messy $36-billion marriage in 1998 that was set up to create the ultimate global automotive powerhouse.

 Krisher hinted in the article, which was only one of many on that page concerning the deal, that it was concern about the responsibility for paying workers' pensions that led to the surprise agreement with Cerberus:

Germany-based DaimlerChrysler AG said it would keep a 19.1-per-cent stake in the renamed Chrysler Holdings LLC. The private company will be run by Cerberus, which said it would keep the present management in place.

So anxious was DaimlerChrysler to end the transatlantic tie-up that it could be on the hook to pay as much as $650 million — in exchange for being absolved for $19 billion in retiree healthcare costs that will be the responsibility of the new Chrysler owners.

The $7.4-billion deal works this way:

Cerberus will invest $5 billion in the new Chrysler’s automotive operations, $1.05 billion in Chrysler’s financial arm and pay $1.35 billion to DaimlerChrysler.

But the German automaker agreed to absorb $1.6 billion in restructuring-related costs and loan the new company $400 million. Depending on whether the loan is repaid, its out-of-pocket costs could ultimately total $650 million.

Cerberus has steadily been building strength in the automobile business. It led a consortium that bought a majority stake last year in General Motors Acceptance Corp., the financial arm of GM, and planned to invest in ailing auto parts giant Delphi Corp.

One of the other stories revealed powerful names connected to United States Republican political leaders during the post Nixon-phase that led up to the first President Bush:

 

Chrysler Bldg.

Research tells us that, historically, the car manufacturing company founded by Walter Percy Chrysler in 1925 acquired the Dodge Brothers Company three years later. Walter owned a huge estate on Long Island and also built in Manhattan what was then the world’s tallest skyscraper, named for himself, and was named by Time as the 1929 Man of the Year.

When Chrysler (a "minnow") bought Dodge (the "whale") in 1928, he "rescued a failing business which was barely meeting its payrolls" from the investment bank of Dillon, Read & Company, which was "unfamiliar with the automobile industry and as absentee owners were not able to keep the firm operating efficiently." One year before the great crash which served as the death knoll of many financial fortunes, 1928 was a year which saw Clarence Dillon climb steadily higher as he linked his investments to the family whose wealth rose exponentially as demand for petroleum, the automobile's fuel source, climbed ever higher.

Dillon had bought the Dodge manufacturer in 1924, accumulating $55 million in debt owed primarily to the Dodge family heirs, which Chrysler assumed in 1928, as well as giving Dillon, Read & Co. $170,000,000 in Chrysler stock. This transaction thus assured Anna Thomson Dodge Dillman, a widow of one of the Dodge Brothers, of being able to purchase the former residence of Samuel Prescott Bush in Columbus, Ohio.

Hugh Dillman McGaughey, an actor who had dropped his last name, had lived with his parents near the Bushes' Marble Cliff mansion--at 1903 Concord Road in Upper Arlington. Prescott Bush's father, Samuel P. Bush, president of Buckeye Steel Casting, had purchased a 2.7-acre building site at 1550 Roxbury Road in 1907 and the following year completed construction of the family's home overlooking the bluff of Marble Cliff in Columbus, Ohio. The two homes were less than a half mile from each other, and the McGaugheys moved to the Roxbury home following the purchase by the new Mrs. Dillman.

When Dillman [McGaughey] married Mrs. Dodge in 1926, newspapers speculated that "her share of the $145,000,000 estate left by her husband is believed to have made her the richest woman in the world." Mr. James B. McGaughey had been a tailor in Columbus, where his daughters worked with him in his business. Perhaps he had gone to school briefly with Flora Bush's brother, Robert E. Sheldon, Jr., who was a year or two older and lived at 1599 Roxbury, just down the street from the Bush residence:

Samuel built his family’s home, one of the first to be built in Upper Arlington, in 1908. All of the Sheldon siblings lived within walking distance from Flora and Samuel, and they all belonged to Arlington Golf and Riding Club, later to be known as Scioto Country Club, of which Samuel, along with developers of the new suburb, was a founding member.  By far the grandest home was the mansion at 1599 Roxbury, owned by Flora’s brother, Butler Sheldon, who also served as mayor of the community in 1909. Butler succeeded his father as President of Columbus Railroad, Columbus Light and Power, Columbus Traction and  Sheldon Dry Goods.  Their sister, Mary Sheldon, married Carl J. Hoster, a grandson of a native of Germany and operator of the family brewery in downtown Columbus.  He also was president of the Hoster-Columbus Associated Breweries, the U.S. Brewers Association, vice-president of the Ohio Trust Company and director of Columbus Railway & Light Company—no doubt a result of his marriage into the Sheldon family. 

 

 

 

 

Grombach and the Pond

Some Unknown History of the United States: The FDR years 1933 to Apr. 1945, 2nd edition. By Richard L . McManus (Published 2019)

THE POND

Richard L. McManus

In the spring of 1942, Brigadier General Hayes Kroner, the head of the Intelligence Branch, G2, Department of War selected Army Captain John V. Grombach to head a new foreign intelligence organization in addition to the Office of Strategic Services. Major General George V. Strong agreed to this new foreign intelligence group known by the name the “POND”. It functioned as a semi-autonomous contractor for the State Department after World War Two and ended its days as a contractor for the CIA with links to J. Edgar Hoover's FBI.

Captain Grombach had spent five years as an assistant provost marshal and assistant G2 and left the Army in 1928. In 1941, he got back into the Army, working in Army, G2 staff.  He also worked at the Coordinator of Information (COI) in early 1942. On June 13, 1942, Roosevelt split the functions and created two new agencies: the Office of Strategic Services (OSS), and the Office of War Information. That latter worked to worked to promote patriotism, warn about foreign spies and recruiting women into war work.  Those who supported POND would not work with the OSS because it was necessarily integrated with British and French Intelligence.

The POND's day-to-day connection with the State Department was through its Division of Foreign Activity Correlation, which, during the war, fell under the authority of Assistant Secretary Adolf Berle, the department's intelligence coordinator. The Army never told the Navy about the POND.  Only those who had a need to know in the War Department, State, the President's office, knew that the POND intelligence outfit existed.

On February, 13, 1942, Adolf Berle received information from the FBI that a British Security Coordination (BSC), MI-6 officer Dennis Paine, had been investigating him in order to get dirt on him. Paine was expelled from the United States.

Berle reported to Sumner Welles on March 31,1941: the head of the British Security Coordination, William S. Stephenson is nominally, in charge of providing protection for British ships, supplies etc. But in fact a full size secret police and intelligence service is rapidly evolving. BSC had officers in Boston, New York City, Philadelphia, Baltimore, Charleston, New Orleans, Houston, San Francisco, Portland and probably Seattle.

Berle said, “We know that to the existing offices there are now reporting a very considerable number of regularly employed secret agents and a much larger number of informers, etc. we likewise know that the information is by no means limited to the work of safeguarding ships and munitions, but enters into the whole field of political, financial, industrial, and probably military intelligence... I have reason to believe that a good many things being done are probably in violation to our espionage acts." 

Berle warned Welles that "should anything go wrong at any time, the State Department would be called upon to explain why it permitted violation of American laws and was compliant about an obvious breach of diplomatic obligation... Were this to occur and a Senate investigation should follow, we should be on very dubious ground if we have not taken appropriate steps." However, Roosevelt refused to close BSC down.

Berle had already warned Cordell Hull, the Secretary of State that "British intelligence has been very active in making things appear dangerous in South America. We have to be a little on our guard against false scares."

Grombach became a businessman who specialized in selling political and economic intelligence derived in large part from old boy networks of former German SS officers, former Hungarian Axis spies, and members of the National Alliance of Russian Solidarists (a group of young Russian far-right anti communist, to the State Department, the CIA, and corporate customers in the United States and Western Europe.

After the war Grombach would establish the Universal Service Corporation in New York, but it is not clear if the POND's wartime offices there were under commercial or official cover. Grombach's espionage network operated through, and was partially financed by, the N. V. Philips corporation of the Netherlands and its American affiliate, Philips North America. 

Grombach worked under the cover as a public relations consultant for Philips.This was the same major electronics manufacturer that had provided a channel for his clandestine wartime operations. The Pond also worked with the American Express Co., Remington Rand, Inc. and Chase National Bank, according to documents at the National Archives. It had clandestine officers in Budapest, London, Lisbon, Madrid, Stockholm, Bombay, Istanbul and elsewhere.

The POND reached an agreement with the State Department which allowed foreign service officers to serve as case officers. These foreign service officers had their own sources of funds and did not have to tell the chief of mission what they were doing, although some did. They had remarkably little training and a great deal of independence.

During the late 1940s one of Grombach's contract agents was SS General Karl Wolff, a major war criminal who had gone into the arms trade in Europe after the war.  A second primary component of Grombach's private intelligence apparatus was a large group of Hungarian anti-communists. Grombach worked simultaneously under contract to the Department of State and the CIA.

According to former CIA Inspector General Lyman Kirkpatrick, ex-military intelligence man working in POND succeeded in creating "one of the most unusual organizations in the history of the federal government. It was developed completely outside of the normal governmental structure, [but it] used all of the normal cover and communications facilities normally operated by intelligence organizations, and yet never was under any control from Washington." By the early 1950s the US government was bankrolling Grombach's underground activities at more than $1million annually (about $9 million in 2015 dollars).

The POND produced some reports pertaining to domestic security. Mickey Ladd, the chief of the FBI's Domestic Intelligence Division, was an ally of Grombach. POND was involved in an attempt to negotiate the surrender of Germany with Hermann Goering, more than six months before the war ended. 

 

It was also involved in an effort to enlist mobster Charles “Lucky” Luciano in a plot to assassinate Italian dictator Benito Mussolini. Pond conducted an operation to identify the location of the German heavy water plants doing atomic research in Norway; and an operation that provided advance information on Russia's first atomic bomb explosion. There were other tangible successes, such as planting a high-level mole in the Soviet secret police and, in a major operation code-named Empire State, the Pond paid a group of dissidents behind the Iron Curtain with CIA funds to obtain cryptographic systems to break coded messages from Moscow.

A POND source, Marcel Petiot, a Parisian doctor, learned from a Polish patient that the Soviet NKVD had massacred 18,000 Polish officers in the Katyn Forest. Petiot also reportedly identified a number of Nazi spies who had been sent to the US, and this aided the FBI to arrest and to turn some of them (make double agents out of them). According to Grombach, in May 1942, Petiot reported that the Germans were producing missiles at Peenemunde; the information, he asserted, allowed other POND assets to photograph the site from Norwegian fishing boats.

In the summer of 1946, foreign service officer, James McCargar who was stationed in Budapest, Hungary inherited a network of POND’s Hungarian contract agents. Hungary was a major target of POND operations both during and after the war. During the war the POND had a network of sources in the Hungarian government and Hungarian army intelligence providing information from places such as Berlin, Warsaw, and Budapest, including order of battle information provided by Hungarian military attachés and Hungarian observers with the Wehrmacht (the German Army). The Hungarian reporting flowed through Lisbon, a key hub of POND activity.  They were even able to provide transcripts of Hungarian cabinet meetings.

In 1947, James McCargar exfiltrated Hungarian anti-communist party's political leaders out to Western Europe. When the communists finally consolidated their power later that year, McCargar, working with a Central Intelligence Group officer posted in Vienna, exfiltrated 75 Hungarians.

McCargar with the help of fellow State Department employee Edmund Price, was ordered to get Zoltan Pfeiffer and his family out of the country. Zoltan Pfeiffer was the Hungarian leader of a small but increasingly popular anti-communist party that had made gains in August 1947 elections, and he had begun to get death threats. The family drove to Vienna and from there they were taken to an airfield and spirited away to Frankfurt and arrived in New York on November 12, 1947.

There were other tangible successes, such as planting a high-level mole in the Soviet secret police and, in a major operation code-named Empire State, the Pond paid a group of dissidents behind the Iron Curtain with CIA funds to obtain cryptographic systems to break coded messages from Moscow.

In September 1951, the POND started a collection effort in Uruguay and Argentina centered on a "tested reliable European diplomat" with extensive intelligence experience.

Ruth Fischer, code-named Alice Miller, was considered a key Pond agent for eight years, working under her cover as a correspondent. She had been a leader of Germany's prewar Communist Party and was valuable to the Pond in the early years of the Cold War, pooling intelligence from Stalinist, Marxists and socialists in Europe, Africa and China. 

In 1945 Grombach began to work an operation codenamed, Project 1641, a study of communist subversion in the US government. He wrote reports that included names of numerous alleged communists to the FBI, and they investigated these people. Grombach passed to the House Committee on Military Affairs the names of fifteen War Department, G2 officers whom he suspected of disloyalty. The committee talked with Grombach and investigated his allegations. In March 1946, the committee made public Grombach's charges. Grombach had developed connections to US Senator Joseph McCarthy’s right-hand man, Roy Cohn and with columnist George Sokolsky, a confidant of McCarthy.  Cohn was the chief counsel to the Government Committee on Operations of the Senate. McCarthy was trying to discredit Robert Stevens, the Secretary of the Army.

During the McCarthy-CIA fight, Dulles organized a group to keep tabs on McCarthy's activities and to feed US Senator McCarthy disinformation. James Angleton described his concerns about Grombach to James McCargar who ran the POND Hungarian operation in Budapest.

Angleton arranged to provide McCargar with false information, supposedly acquired in France, which would appear derogatory to CIA. Angleton hoped Grombach would pass the materials to McCarthy, who then would use them. They could then be discredited, embarrassing the senator and hopefully throwing him off the CIA. McCargar's mission was successful. 

A Select Senate Committee recommended that McCarthy be censured on two of the 46 counts for contempt of the Subcommittee on Rules and Administration and for his abuse of Major General Ralph W. Zwicker in 1954. MG Zwicker  had refused to answer some of Senator McCarthy's questions. Thereupon McCarthy retorted that Zwicker's intelligence was that of a "five-year-old child," and that he was "not fit to wear that uniform."  Army Secretary Stevens ordered Zwicker not to return to testify at the McCarthy's hearing.  

MG Zwicker was a distinguished officer and highly-decorated battlefield hero of World War Two, and McCarthy’s abuse provoked anger from many quarters, including the Army and President Eisenhower, who shortly thereafter initiated the Army–McCarthy hearings that led to McCarthy's downfall and censure. McCarthy had also charged three members of the Select Committee with “deliberate deception and fraud “... that the special Senate session ... was a “lynch party,” and had characterized the committee "as the “unwitting handmaiden, involuntary agent and attorneys in fact of the Communist Party”…  On December 2, 1954, the Senate voted to condemn McCarthy on both counts by a vote of 67 to 22.

On August 15, 1954 the CIA Inspector General Lyman Kirkpatrick decided to have it out with Colonel John Grombach. He confronted him about the contacts with McCarthy. And on January 1, 1955 all POND operations came to an end after thirteen years of operations, except two operations that were briefly continued by the CIA. 

*** 

 http://www.nbcnews.com/id/38470605/ns/us_news-security/t/cia-there-was-pond/

(Blowback; Christopher Simpson; Collier [Macmillan] {SC}

Another author who has written about Grombach is Glen Yeadon, with research from John Hawkins, in the book called The Nazi Hydra in America: Wall Street and the Rise of the Fourth Reich. Excerpt:

John Grombach headed another Nazi infested organization with close ties to this group. Grombach a former G2 officer recruited former Nazi SS officers, Hungarian Axis Quislings, and Russian nationalists. His network of former Nazis produced intelligence offerings for the State Department, the CIA and corporations. Grombach’s operation originally began as a G2 operation to rival the CIA but soon evolved beyond that. Although much of Grombach’s funding did come from the United States government, he received a large amount of funding from N. V. Philips Gloeilampenfabrieken corporation of the Netherlands and its American affiliate, Philips North America. One of Grombach’s prized assets was Karl Wolff, a major war criminal.

Grombach had visions of grandeur with his eye on holding the position of Director of the CIA. High on his list of political targets were those that implemented President Truman’s containment policy. Grombach viewed people such as George Kennan and Charles Bohlen as too soft on communism. He found ready allies in McCarthy and Jenner. By the 1950s, Grombach and his network of Nazis specialized in gathering dirt. He would then leak the smears to his political allies. The chief beneficiary being Joe McCarthy.

 *****

The Pond spent most of its existence not as a government agency, but as a private sector organization, operating within real companies with names such as the Universal Service Corporation, a company mentioned in a book written in 1936 by Arthur L. Bell, who ran a "cult" called Mankind United. Mankind United was a classic Ponzi money-raising scheme operating primarily in California. IRS sued for tax evasion, and Bell filed a lawsuit to remove liens filed against him in 1940. According to UPI in a December 1940 story:

Bell contended that "Mankind United" was not a personal moneymaking scheme but a non-profit organization composed of many men working under the same philosophy of life and business, but Henry Wallace, former deputy collector of internal revenue and the first witness, estimated Bell's income at $200,000 a year for five years.

He said he followed Bell around the San Francisco area to various "Mankind United" meetings and that he had seen as much as $4,000 collected at a single meeting. The money went into various bank accounts maintained by Bell under aliases and one of the accounts received $55,000 within three months, Wallace said.

Convicted of sedition in 1944, Bell went to jail while his followers in 1948 organized Christ's Church of the Golden Rule, with headquarters at the 3,100-acre Palomarin ranch on Bolinas Bay in California. 

The government claimed it owed $95,000 in back taxes for 1956, about $1,800 for 1957 and about $2,000 for 1958. Mankind United  had raised $4,000,000, at least $3,000,000 of which was used to purchase real estate, including the Continental Building on 4th and Spring Street in Los Angeles--which claimed to be tax-exempt. By 1961 Christ's Church had stacked up some $98,800 in back taxes allegedly owed, plus a $4,750 penalty, on profits from business operations of businesses like the Petaluma Laundry: 

At the age of 18, the young John (or Jean) Grombach--born in 1901, son of the French consul in New Orleans--became an American citizen and went to West Point. Leaving the Army, in which he was in G2 intelligence, in 1928, he joined the New York National Guard. A year later he went to work for a subsidiary of CBS and Paramount Publix. In April 1928 the Charleston Gazette wrote of the various movie-making companies:

The biggest war in motion picture history is on, and movie theatre-goers everywhere are affected. "Independent" movie exhibitors, led by the Theatre Owners' Chamber of Commerce, are taking the initiative in the hostilities, seeking to overthrow what they openly term monopolistic combines of production and distribution of photoplays.

Producers control directly more than 2,000 of the 17,000 motion picture theatres in the United States. These are, for the most part, the key theatres, the largest theatres in the most important cities and towns. In addition, through booking arrangements, financial affiliations, partial stock ownership and managerial "understandings," they virtually control thousands of other theatres.

The principal producers—Paramount, Metro-Goldwyn-Mayer, United Artists, Fox, Universal—are in the theatre business. First National Pictures was organized originally by a group of theatre owners. So that "independents" are compelled to deal "with interests that are their competitors in theatre operation buisness, and to take what they can get. Naturally, producers are inclined to favor the theatres they own themselves....

Paramount, through its theatre department, known as Publix, owns 370 theatres; Universal is estimated to have 300: Loew, 150, and Pathe-deMille-FBO-Keith, about 600. The Keith-Albee vaudeville interests, controlling Pathe-DeMille, recently took over operation of FBO (Film. Booking Offices) with such financial giants as the Radio Corporation of America, Westinghouse Electric and General Electric interested financially. The DuPonts also have been putting some of their surplus funds into the film companies.

What can the "Independents" do against the powerful line-up? Well, they can close their theatres, greatly reducing the revenue of the producers, and probably bankrupting themselves. Or they can promote legislation for their relief. (This they are trying to do.) Or they can, by subtle means, enlist public sympathy in their behalf. Or they can produce their own films. This last seems to be the obvious remedy, but it is the most difficult one.

One step taken by "Independents" which may affect the whole situation to their advantage, is the organization of a co-operative group of independent exhibitors with a centralized purchasing power. At present this movement is confined to greater New York. Aaron Sapiro, the California co-operative marketing expert, has been called in to direct the organization work.

A hope of the independents is that foreign restrictions on releases of American film will cut into the revenue of the big producers to such an extent that they will be forced to rely upon the independents to a greater extent for the margin between loss and profit.

Outstanding figures in the battle are Adolph Zukor, president of Paramount; William Fox, Nicholas Schenck, successor of the late Marcus Loew as head of the Loew-Metro-Goldwyn, and brother of the head of United Artists; Carl Laemmle, president of Universal, who could, if he would, tell the independents something about licking the giant, for he had to battle it himself.

The year 1928 was the year of talkies in the picture business. Donald Crafton in his book The Talkies: American Cinema's Transition to Sound, 1926-1931 refers to the period as "merger mania," and the "tentacular structure" of the studio system.

***

For the first six months of 1942, Grombach was on part-time loan to the Coordinator of Information.

Brig. Gen. Hayes Kroner, the head of the War Department's Military Intelligence Service, was given "official approval and direction," almost certainly by his immediate superior, Gen. George Strong, to establish a secret intelligence organization. By October the OSS had a new lease on life and was around for the long haul. That month, Kroner's guidance was expanded: he was now to establish "a perpetual, a far-seeing, a far-distant, continuing secret intelligence service."

In other words, Kroner was to establish a long-term, albeit secret rival to Donovan's agency.

Kroner selected Grombach to head this new organization "particularly because [he] could take such instructions, that all of this should be done under the terms of the highest secrecy."

From the very beginning, Grombach split his time between Washington and the Pond's offices in New York City. After the war Grombach would establish the Universal Service Corporation in New York, but it is not clear if the Pond's wartime offices there were under commercial or official cover. In any event, the various security measures worked well in the United States. Gen. Kroner testified after the war that "when I left the direction of that office at the beginning of 1944, only those in the War Department and the State and the President's office, the President himself, who had to know by virtue of approving certain operations, knew it existed."

In Washington, the Pond's day-to-day connection with the war department was through the Division of Foreign Activity Correlation (FC), which, during the war, fell under the authority of Assistant Secretary Adolf Berle, the department's intelligence coordinator. The director of naval intelligence later said that the Army never told the Navy about the Pond either.


------




Wild Bill Donovan: The Spymaster Who Created the OSS and Modern American Espionage,
by Douglas Waller. (New York: Free Press, 2011), 466 pp., endnotes, bibliography, photos,
index.

Donovan of OSS was the first of four biographies of ‘Wild Bill’ Donovan.18 It claimed to be the full story, and few in the public knew otherwise. The second and third made similar assertions, adding new details about OSS operations and bureaucratic battles.19 Was there anything new left to say? The existence of a fourth biography suggests an affirmative answer, and author Douglas Waller calmly  and carefully documents this position. The principal difference, however, is one of focus.

Waller is concerned more with Donovan the man than with OSS operations. The result depicts an ambitious, brave, hard-charging Donovan, who almost by accident created America’s first foreign intelligence service. It was only after completing two fact-finding trips to Europe for President Roosevelt that the idea occurred to him. With the encouragement of the British, Waller writes, Donovan convinced the president to establish the Office of the Coordinator of Information (COI), which became the OSS after the United States entered WW II.

The book concentrates on five aspects of Donovan’s life. The first concerns his military career, his success as a Wall Street lawyer, and his political ambitions prior to serving Roosevelt. The second deals with the bureaucratic battles he fought and the egos he ruffled as he struggled to establish COI (later, OSS), and then to maintain its existence in the face of vigorous opposition from elements in the War Department and the FBI. 

Here we learn that the Army never accepted the OSS role and formed its own foreign intelligence service—nicknamed “The Pond”—under the control of Major John ‘Frenchy’ Grombach, a man Donovan had once fired. Donovan’s other biographers do not mention the Grombach episode, which was treated in this journal in 2004. 20 Donovan’s battles with Hoover and the FBI are also described in detail.

On the operational side, Waller mentions Operation Kangaroo, a collection effort that defied an agreement with Hoover not to operate in Latin America, a topic covered in this book for the first time.

The third aspect of Donovan’s life treated in this book, and for the first time, dealt with his many dalliances with women, something Waller did not try to hide. Their impact on Donovan’s marriage did not do him credit.

The fourth part of the Donovan story concerns his frustrated attempts to create and head a postwar intelligence service after President Truman abolished the controversial OSS. Here, Hoover again enters the picture, and Waller leaves little doubt that it was Hoover who spread the rumor to the press that such a service would result in a domestic Gestapo, a charge that applied more to Hoover’s own ambitions to direct an all-encompassing, postwar intelligence operation. Donovan’s hopes were
dashed forever when neither Truman nor his successor appointed him to head the new CIA.

The final phase of Donovan’s career that Waller covers is his service as ambassador to Thailand. Although in his late 60s, Donovan was still difficult to control. The concluding chapter covers Donovan’s debilitating sickness that led to his death in 1959.

Wild Bill Donovan is absorbing reading. It is documented with primary sources, though the
format used makes it impossible to tell what fact a particular document supports. In all other respects, it is a major contribution to the intelligence literature.

John V. Grombach

The War Department had tapped Grombach to create the secret intelligence branch in 1942...

Ruth Fischer, code-named "Alice Miller," was considered a key Pond agent for eight years, working under her cover as a correspondent, including for the North American Newspaper Alliance. She had been a leader of Germany's prewar Communist Party and was valuable to the Pond in the early years of the Cold War, pooling intelligence from Stalinists, Marxists and socialists in Europe, Africa and China, according to the newly released documents.

--------------------

The Great Liquidator

(ISBN 10: 0385132719 / ISBN 13: 9780385132718 )

John V. Grombach

This is a chilling, painstakingly researched story of Dr. Marcel Petiot, a psychotic genius who succeeded in confounding both the Gestapo and the Resistance in France during WWII by killing over 150 people in Paris and taking $15 million in spoils from his victims, many of them Jews. John Grombach was head of the Secret Intelligence Branch of the War and State Departments in France during this time. The book's condition is As New with no signs of wear. The binding is very tight. The black DJ has a few small tears and some fading on both front and back. Bookseller Inventory # 000600
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http://hosted.ap.org/specials/interactives/_national/spy_agency/content.swf?SITE=[CAVAN]
AP reporter Cristian Salazar explains the documents