Thursday February 22, 2018
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Allegations regarding "Butch" Merritt, Watergate, Intelligence Agencies and "Crimson Rose," Vol. XI

By Kris Millegan

Nixon the crook

I want to say this to the television audience. I made my mistakes, but in all of my years of public life, I have never profited, never profited from public service. I have earned every cent. And in all of my years of public life, I have never obstructed justice. And I think, too, that I can say that in my years of public life, that I welcome this kind of examination because people have got to know whether or not their President is a crook. Well, I'm not a crook. I've earned everything I've got.
                                                                                – Richard M. Nixon, November 17, 1973, Walt Disney World, Florida



Starting to get a picture of pregame? Nixon, the blackmailer, was making a play to corner intelligence, especially drug intelligence. What would he do with information? Simply a strategic diplomatic move, so he doesn’t step on the toes of his own foreign policy or were there other reasons? And there were other things going on.

Nixon didn’t simply walk into office, several big things had to happen. Lyndon Johnson didn’t run, Robert Kennedy died, and George Wallace took 13,5% of the vote. Nixon won, on a platform of law and order with only 43.4% of the popular vote.

Some background on Nixon’s mob friends from the 1956 magazine, Behind the Scenes, the politics and information given in the following article is obviously scandal slanted and makes many assertions without much substance. As always, caveat lector!

Dick Nixon’s Secret Link To The Underworld!

by Marvin Higgins

In his swift rise to the top of the' political heap, young Richard has picked up some strange companions! But none stranger than a certain Influential gentleman who pulls the strings backstage for "Tricky Dick" Nixon . . .

Sometime during the early morn­ing of December 11th, 1950, a lawyer named Samuel Rummel was blasted into eternity by a 12-gauge shotgun in the driveway of his swank Hollywood home.

The day after lawyer Rummel was wafted to the Supreme Bench, the police got a clue.

It was a strong clue. It might have cleared up a lot of mysteries. But the cops never' got the chance to follow It up.

An attorney named Murray Chotiner made a few phone calls, talked to a few influential people and, when he was finished, the clue became a dead end.

Rummel's death and a whole story of gangland violence, illegal gambling syndicates, police corruption and vice in California ended in a blank wall.

The Man Behind Nixon

Murray Chotiner, who was instrumental in building that wall, is the right‑hand man of Richard M. Nixon, Vice-President of the United. States!

And if, through the sudden death of the President, Nixon should take over the White House, the same Murray Chotiner will probably be the chief adviser to the nation's Chief Executive!

What kind of secrets did Sam Rummel take to his grave—secrets which Murray Chotiner apparently did not want revealed?

Between 1945 and 1950, seven important figures in the West Coast underworld died violent deaths. With the exception of Bugsy Siegel, their names were not well known to the public.

They included such picturesque characters as Benny "Meatball" Gamson, Harry Hooky" Rothman and “Needle” Herbert.

All had one thing in common. In one way or another, all were involved with Mickey Cohen, Rummel's client. And Mickey Cohen, In turn, was involved with the West Coast gambling syndicate, which masqueraded under the name of the Guarantee Finance Co.

At the time of Rummel's death, however, three separate agencies were investigating the operations of Guarantee Finance.

A special‑grand jury, for instance, was scheduled to open its sessions on the very morning Sam Rummel was killed. One of the questions it wanted answered was:

"What cop or cops got a $108,000 payoff from Guarantee Finance, the bookie syndicate?"

To help answer this question, the grand jury had subpoenaed Sheriff's Capt. Carl H. Pearson. But before Pearson could testify, Rummel—who knew where all the bodies were buried—was killed.

Meeting Ends In Death

Then came the clue the police had been waiting for.

Pearson admitted that he and Sheriff's Deputy Lawrence C. Schaffer were probably the last persons to see Sam Rummel alive!

Pearson confessed that he, Schaf­fer and Rummel had, held a conference, at the lawyer's request. Pearson said that he had brought with him, to the meeting, the complete police files on the Guarantee Finance Co.!

The meeting ended at 10:40 p.m., December 10th. And the following morning, some time around 1:30 a.m., Rummel was dead.

Pearson and Schaffer knew what had been discussed at that meeting with the gamblers' lawyer. And when they appeared before the grand jury, many things about the syndicate's op­erations were bound to come to light.

The Big Fix

Schaffer, realizing the spot he was in, picked up a phone and called Murray Chotiner. What he said will probably never be known. But Chotiner—who packs a lot of weight in California—fixed it, so that Schaffer got off the hook.

That doused any light that might have been shed on gangland violence, ­ the $108,000 payoff and the compli­cated operations of California's book­ies.

And the man who engineered the blackout—Murray Chotiner—is a key figure In California's Republican hierarchy. He is the “man to see" if you want any favors from the Vice President of the United States!

Why should Murray Chotiner—who pulls the strings for Nixon—be interested in helping to cover up the workings of a giant bookie syndicate?

One clue was recently unearthed by a West Coast reporter from the files of the Superior Court of Los Angeles County.

Between 1949 and June 1952, a single law firm represented defendants in 220 bookmaking cases in that court.

The Bookies' Friend

The name of the firm—the bookies' friend, for a price—was, of course, Chotiner & Chotiner!

The same reporter could not find a single criminal case of any other type in which Murray Chotiner's firm acted during the same period!

In other words, the professional career of a man who may one day be a White House advisor depends largely on defending illegal bookmakers!

How did this singular circumstance come to be?

Young Dick Nixon first came to Chotiner's attention in 1946, when the future Vice President first decided to throw his hat in the political arena.

Chotiner was already well established in California politics. In 1942, he had been campaign manager for Gov. Earl Warren. Two years later, he got himself elected president of the state's Republican assembly.

And in 1946, at the very time Nixon came to see him, Chotiner was, directing the campaign of another rising California Republican—Sen. William S. Knowland, now GOP leader in the Senate.

A Campaign Gimmick

Chotiner is a shrewd lawyer and a shrewder politician. He looked Nixon over and weighed the odds. The election of this political newcomer was not going to be easy.

Nixon had picked himself a whopper for his first battle. He was running for Congress against a veteran campaigner, the Democratic incumbent, Jerry Voorhis.

Also, Chotiner decided, Nixon had other odds against him. He lacked campaign funds, an organization and an issue. Most of all, he needed a smart handler.

And, in the estimation of Murray Chotiner and of less-interested observers, Chotiner is among the smartest.

The lawyer had already worked out what looked like a perfect campaign gimmick for Knowland. There was no reason, he decided, why it wouldn't work for Nixon as well.

Smear Target

So, with Murray Chotiner doing the tailoring and, fitting, Richard Nixon donned the shining white armor of an anti‑Communist crusader. And with slight alterations by the master, as occasion demanded, the armor carried him through Congress and the Senate all the way to the nation's second‑highest job.


… press uncovered that nasty business about a $16,000 private slush fund, raised by certain real estate and business Interests to cover Nixon's senatorial "campaign expenses."

TV Soap Opera

Nixon's opponents dug up his Senate voting record. Many of his; votes on important domestic bills could be viewed as benefiting the interests of the contributors to his secret campaign fund.

There was an understandable public demand that Nixon tell what had been done with the money, since it had not been listed among regular campaign contributions as required by law.

Murray Chotiner outdid himself. Faced with a tidal wave of questions, which the GOP, couldn't afford to ignore, the bookies' lawyer became a dramatic impresario.

"We'll give 'em a soap opera," he decided. And that was just what he did.

It was Chotiner who was instrumental in dreaming up the script for the famous television appearance of "Poor Richard" Nixon, in which the clean‑cut boy wonder confessed that his wife Pat didn't even have a mink cost.

It was Chotiner who saw the dramatic possibilities in the Nixon dog, Checkers, and made the poor beast the most famous pooch in the country. (Although nobody could ever figure out what Checkers had to do with the $16,000).

In short, it was the sophisticated Chotiner who cast the Vice Presidential candidate in the role of Rube, the barefoot farm boy—pulling a TV rabbit out of a hat and Nixon out of a hole.

And if anyone can squeeze Nixon in the Presidential race, that man is Murray Chotiner.

From there on in, it's tip to the people. And if the vote should go to Richard Nixon, you can be sure that Murray Chotiner—mouthpiece for gamblers—will be around the White House, running things for the Chief.

Murray Chotiner moving into his office right above CREEP headquarters


To add some more perspective to the times of Nixon presidency, here is an excerpt from, On The Take, where William Chambliss, a Doctor of Sociology, presents a different view of organized crime. To gather the information, he worked at a local bar in Seattle, and the follows the paper-bag of pay-off money all the way to the top:

Higher Circles

The satchel the state congressman carried out of Seattle every month flew with him to an expensive bar, to a lawyer who represented illegal interests in that city. The lawyer took the satchel with him to his office, where he added its contents to an even larger amount gathered from his own city's illegal businesses. The entire amount was then flown to Las Vegas, where a representative took the money. A few days later the currency was converted to larger bills, added to the "skim" from Las Vegas casinos, and flown to Florida. Meyer Lansky took his share of the profits and sent the remainder off to investors and associates in other cities – New Orleans, Cleveland, Detroit, and New York‑whose investments entitled them to a certain share of the profits from Seattle, San Francisco, Las Vegas, and Miami.

Crime networks flourished in the cities of America during prohibition. Many of the leading personalities in these associations had begun their upwardly mobile ascent out of poverty earlier, when they were employed by businesses as strikebreakers. Some were later employed by or actively engaged as members of labor unions to combat the violence of businesses that tried to break union inroads.

But prohibition was the impetus for the emergence of organized efforts to provide the illegal commodities that people wanted, namely alcoholic beverages, and the services they were willing to pay for: gambling, prostitution, high‑interest loans, and so forth.

Following World War II the growth in wealth and power of crime networks was unmatched by the growth rate of any other industry. The nation's economy, which was thriving on the discovery of credit buying, on the wealth to be had from the expropriation of resources of less‑developed nations, and on the markets won by dividing the world up with the Soviet Union, created an affluence that seemed boundless. Commodities and services that were illegal were in heavy demand. Profits were incredible. Restrictions were minimal..

The associations shared similar problems of existence. They had incredibly high profits from gambling, drugs, and usury, which they wanted to invest. But where? How? The economy and criminal operations were expanding everywhere, and the investment of excess capital was critical. Furthermore, with their expanded operations, they were also in need of federal influence. The growth of the bureaucracy in Washington posed an ever‑increasing threat to criminal operations. Payoffs and cooperation of local and state governments were sufficient to ensure relatively trouble‑free operations locally, but federal agencies, controlling drugs and federal crimes as well as federal legislation that could either facilitate or impede operations, became increasingly important. Crime networks benefited from the same economic and political climate that benefited other businesses from 1945 on.

The situation was replete with opportunities for someone who could provide investment opportunities and federal political clout. As is always the case in situations such as this, someone came along for the job. That person was a man long associated with criminal operations in New York and a close associate of most of the leading crime figures of the thirties, Meyer Lansky.

Meyer Lansky had a shrewd businessman's eye for discovering new territories and creating impressively high profits for his associates, namely people who ran or profited from network operations in cities like Cleveland, New York, Cincinnati, and Kansas City.

Lansky's empire began with a fairly modest investment in Broward County, Florida. The Colonial Inn was south Florida's first major gambling and entertainment establishment outside of Miami Beach. Investors in the club included the major figure in Detroit's crime network, Mert Wertheimer, who owned one‑third of the Colonial Inn, and Joe Adonis, leading racketeer in one of New York's networks, who owned 15 percent. Lansky kept 16 percent for himself and distributed the remainder among his close friends and relatives. The profits were staggering, even by syndicate standards where profits less than 20 percent are considered losses. From Florida, Lansky moved into Cuba, where profits were even more impressive and where he also purchased the goodwill, friendship, and protection of Fulgencio Batista, the Cuban president before the socialist revolution. To top off these investments, Lansky invested heavily in the heroin traffic from Turkey and France and opened a hotel gambling casino in Las Vegas. By so doing, Lansky assured himself of the undying loyalty and admiration of even the most anti,‑Semitic members of crime networks across the nation. Mark it, however, that he was no 1, godfather." He was simply a well‑respected, trustworthy investor with excellent political connections‑connections, which were able to get even Lucky Luciano out of prison on a pardon.

Lansky also had an almost unerring eye for the political payoff system. He chose his candidates well, but he also covered himself (and those who depended on him for help) by financing candidates who competed with each other. Thus, he paid handsomely into the campaigns of both Thomas E. Dewey and Franklin Roosevelt. He contributed to the political campaigns of Lyndon Johnson, as well as Hubert Humphrey, George Smathers, Russell Long (and Huey Long before him), John Connolly, Richard Daley' Albert Rosellini, and Edmund Brown, to mention only a few.[10] But he paid more here than there, a fact that was ultimately to be his undoing. Those who play the political payoff game take the chance of financing the loser. When that happens, their fortunes fall as surely as they rose when they financed the winner.

Like his brothers and sisters in private industry, a syndicate leader is measured by the profits he produces. The stockholders are the profiteers from crime operations in New York, Trenton, New Orleans, Las Vegas, Seattle, Portland, and cities across the country. Also, like his brothers and sisters in private industry, a successful syndicate operator must manage political payoffs to ensure the protection of crime network interests. Meyer Lansky probably has done both jobs better than anyone in the history of organized crime.

The years from 1932 until 1964 were Democratic years almost everywhere. Naturally Lansky placed his money, at least a disproportionate amount of it, in the hands of Democrats. In Seattle as elsewhere he worked diligently for Democrats. It paid off. judges were appointed, legislation passed, and protection provided. Lansky's investments in the Democratic Party were often coordinated with, or given through, trade unions, especially the Teamsters.[11] Whether given directly or indirectly, the money funneled to politicians in the form of "campaign contributions" or bribes was designed to purchase influence. As newscaster David Brinkley observed:

George Meany of the AFL‑CIO is fawned over in Washington but not entirely for his intellectual brilliance. And not because he can deliver labor's votes. He can't. What he can deliver and does deliver is political money.

The present U.S. Ambassador to Great Britain was not appointed for his contributions to creative foreign policy and diplomacy but for his contribution of political money. This is not new. Back in the fifties, the President appointed one of his big contributors ambassador to a country, then it was found he didn't even know where the country was.

So, jobs like that, and Washington influence, are in effect for sale. All it takes is money, political contributions in election years. If you give enough, Washington's favors can be yours—influence, flattery, social success, invitations to swell affairs, and even ambassadorships to countries with nice climates and cheap servants. Perhaps more important, influence on domestic policy, such as taxes, affecting your own business and income.

Running for office has become incredibly expensive, and candidates have to get money somewhere. The Democrats get a lot of it from the unions, and the Republicans get a lot of it from rich individuals and corporations.

No doubt, there are some rich unions and people charitable soul, who will give money expecting nothing return, but they are scarce. A big political contribution usually is seen as an investment. It's a scandal everyone admits. But it's worse now, because running for office costs more. Public cynicism about politics and politicians already runs high. If this is not cleaned up, the political system will come apart‑with influence, dominance, and even control put up for sale to the highest bidder.[12]

It has been commonly accepted by those who play the political game seriously that a major source of Democratic Party revenue for the past fifty years has been a labor-union‑crime network coalition.

The most important source of political money for the Democrats and Republicans alike is, of course, the contributions that flow from "legitimate" business, that is, from those businesses whose principal product is a legal one, although the means by which the business is conducted may be highly illegal. The means of conducting the business and the business itself may, in fact, be far more harmful to more people than the business of organized crime. Nonetheless, it makes sense to differentiate businesses, whose main product or service is illegal, since this difference in legality does create important differences in the way the businesses are managed and how they function.

Despite the fact that both Democratic and Republican parties receive their major share of financing from legal businesses, the sad fact (from the Democratic Party's point of view) is that the Republicans receive the greater share of that political money. However, the labor‑union‑crime network funds that oil the Democratic Party's machinery help to equalize the disproportionate share of political money that legitimate business and industry give to the Republican Party.

From the 1930s and into the 1960s, there emerged an unspoken detente between Republican and Democratic leaders with respect to some of the major sources of campaign contributions. The Democratic and Republican parties came to control different sources of the available political money. Obviously, if either party could undermine a major source of the other party's political money, the balance of power so crucial to any workable detente would be severely threatened as the money shifted into the coffers of one party.

Shortly after his election to the Presidency in 1968, Richard Nixon began a campaign which, had it been successful, would have shifted much of the labor‑union‑crime‑network political money from the Democratic to the Republican Party. Whether this was a knowledgeable plan on the part of Nixon and his political advisers is something we do not know. judging from the now available insights into how this group of men planned numerous political forays to increase their position of power, one suspects that the attempt to corner funds for their political interests may have been quite rationally made. In any case, whether by design or simply as a by‑product of other decisions, the consequence for the balance of power between the Republican and Democratic parties would have been the same.

Nixon had long‑standing and very close ties to a number of people whose business profits derived at least in part from illegal businesses. Regardless of how heavily involved in crime enterprises these associates and partners of Nixon were, it is tempting to speculate that they were involved enough in such places as Dade County, Florida; the Bahamas; Costa Rica; and Las Vegas, and in such enterprises as drug trafficking, stock frauds, bank swindles, and gambling casinos to have the wherewithal to run illegal businesses profitably.

The Nixon administration's campaign against "organized crime" was in fact a campaign against those crime networks that were most closely connected with Nixon's political foes, Republicans and Democrats. This campaign had the effect of eliminating the entrenched owners and managers of crime cartels, thus affording Nixon's associates and partners an opportunity to increase their share of criminal enterprises. To bring this about, the Nixon administration systematically exposed networks in Democratic Party strongholds, while ignoring networks that supported Nixon's wing of the Republican Party.[13] At the same time, the campaign against organized crime attempted to purge Meyer Lansky from his position as a major link between different organized crime interests and the Democratic Party.

Lansky's empire was vast. The Republicans' first attack was on his Las Vegas holdings. For this attack Howard Hughes was available to invest in the casinos and hotels, which Lansky was being forced to sell by state political pressure that threatened to end the skimming of profits which made the casinos so profitable, by subpoenas and indictments brought by Republican‑appointed U.S. attorneys where Democrats had reigned heretofore, by Internal Revenue agents under Republican control, and by FBI agents under Republican control. So he sold out of Las Vegas, and Howard Hughes came in. Immediately the profits that were for political payoffs began moving into the Nixon campaign fund and out of the Democrats'.

In south Florida Lansky was indicted by a Republican-controlled grand jury for perjury. In Las Vegas he was indicted for tax evasion.

Control of a Miami‑based bank shifted from Lansky to Nixon associate Bebe Rebozo. Union funds that had gone to Lansky for investment and into Lansky's banks were transferred. Law firms that had had lucrative union contracts lost them to Republican firms; the Teamsters hired Nixon's own law firm. For all of this, the Republicans paid off. Nixon granted Jimmy Hoffa executive clemency, and Hoffa was released from prison. Frank Fitzsimmons, who was the replacement for Hoffa as head of the Teamsters, was publicly acknowledged by Nixon as being "welcome in my office any time; the door is always open to Frank Fitzsimmons." [emphasis added]

It was not only the door to his office that was open; so too was the door to his airplane. In January 1973 the Los Angeles office of the Federal Bureau of Investigation learned that a syndicate leader from the Midwest was coming to Los Angeles to work with Teamsters officials to arrange a billion‑dollar health insurance contract for Teamsters' members. Frank Fitzsimmons came to attend the final meeting. The FBI bugged the offices for seventy-two hours preceding the major meeting, but when they requested permission to continue the bug (which by federal law they had to do), the attorney general's office turned down the request. The meeting between Fitzsimmons, a Midwest associate, and insurance company officials took place, and the contract was signed. Fitzsimmons left immediately to meet Richard Nixon in Palm Springs, and they flew back to Washington, D.C., together. The International Herald‑Tribune reported these events in the April 30, 1973, edition as follows:

Two ranking officials to the Department of justice eight weeks ago turned down a request by the Federal Bureau of Investigation to continue electronic surveillance that had begun to penetrate Teamsters’ union connections with the Mafia, according to reliable governmental sources. Attorney General Richard G. Kleindienst and Assistant Attorney General Henry E. Petersen were said to have made the decision after 40 days of FBI wiretapping had begun to help strip the cover from the Mafia plan to reap millions of dollars in payoffs from the welfare funds of the International Brotherhood of Teamsters. The officials acted on the grounds that investigation had failed to show "probable cause" to continue eavesdropping, the sources said.

They reportedly acted after having received a memorandum, prepared at the direction of L. Patrick Gray III, who was then the bureau's acting director. The memorandum, which made no recommendations, indicated the sensitivity of the investigation, which was reportedly producing disclosures potentially damaging and certainly embarrassing to the Teamsters' president, Frank E. Fitzsimmons, the Nixon administration's staunchest ally within the labor movement.


The administration's cultivation of the two‑million‑member union culminated last year in a Teamster endorsement of the President's reelection, and Mr. Nixon has made it clear that the door to his office is always open to Mr. Fitzsimmons.

The Kleindienst‑ Petersen decision came less than a month before Charles W. Colson, special counsel to the President, left the White House to join a Washington law firm to which Mr. Fitzsimmons had transferred the union's legal business.

Before leaving the White House, Mr. Colson had been instrumental in formulating administration political strategy regarding organized labor.

The electronic surveillance began on January 26, under an order of the Federal District Court in Los Angeles authorizing the FBI to tap 11 telephone numbers in the offices of People's Industrial Consultant, 9777 Wilshire Blvd., Los Angeles, justice Department sources said.

The consulting firm is a Mafia front set up to channel Teamster welfare money to underworld figures, the sources said.

On February 14, the court authorized an extension of the tap until March 6. The taps were requested and installed under the omnibus Crime Control and Safe Streets Act of 1968.

FBI Affidavit

What was learned from the taps was described in an FBI affidavit submitted to justice Department lawyers. The affidavit asked for continuance of the existing surveillance for 20 days and installation of new taps on a public telephone and the office telephone of an alleged mobster implicated in the plot to siphon money from the Teamsters.

The affidavit said that investigation up to then, including the use of electronic listening devices, had indicated "a pattern of racketeering activity‑that is, a series of payments of commissions or kickbacks" flowing from corporations controlled by a doctor in league with the mob through People's Industrial Consultants "to the officers and agents of the employee‑welfare benefit plan," in violation of federal statutes.

Mr. Petersen and Mr. Kleindienst, however, would not allow an application for renewal of the court order.

A request Friday to the justice Department for comment from the two government officials went unanswered.

The FBI affidavit cited information reportedly given to the bureau by an informant in contact with an associate of Allen Dorfman, consultant to the Teamsters' billion‑dollar Central States, Southeast and Southwest Areas Pension Fund, who began a federal prison term a month ago for conspiring to receive a kickback in connection with a loan application made to the pension fund.

"Source No. 3"

The informant, identified in the affidavit as "source No. 3," said that on February 8, at the Mission Hills Country Club in Palm Springs, California, Dorfman’s associate introduced Mr. Fitzsimmons to Peter Milano, Sam Sciortino and Joe Lamandri, identified, by the FBI as southern California members of the Mafia. The Teamster leader was in Palm Springs participating in the Bob Hope Desert Classic golf tournament.

Justice Department sources reported that, according to the informant, the three men presented to Mr. Fitzsimmons a proposal for a prepaid health plan, under which members of the union covered by its welfare program would be provided with medical care by Dr. Bruce Frome, a Los Angeles physician. Monthly medical fees for each union member would be paid by the central states fund from the millions of dollars contributed to it by employers under Teamster contracts.

In a 15‑minute conference with the three, the informant added, Mr. Fitzsimmons gave his tentative approval and sent the group to a Palm Springs residence for definitive discussions with Dorfman.

The FBI were said to have learned that the next day Mr. Fitzsimmons met with Lou Rosanova, identified by justice Department sources as an envoy for a Chicago crime syndicate, which sought a percentage of the Los Angeles mob's take on the health plan.

Justice Department investigators say that they have evidence that the Chicago branch of the Mafia is determined to retain the access it had to the pension fund through Dorfman during James R. Hoffa's Teamster presidency. Hoffa was imprisoned after being convicted of tampering with a federal jury and pension fund fraud.

As a result, according to the federal agents, the Chicago Mafia members have kept a sharp eye on Dorfman and Mr. Fitzsimmons since Mr. Fitzsimmons gained clear control of the union.

In 1971, President Nixon commuted Hoffa's eight‑year prison sentence, with a provision that precludes his holding union office until 1980.

Nixon's Plane

Rosanova and Mr. Fitzsimmons had talks again on February 12 at La Costa, a plush resort and health spa in San Diego County, according to the Orange County and San Diego County authorities. The same authorities reported that a few hours after that meeting Mr. Fitzsimmons boarded President Nixon's plane and flew to Washington with the President. Both Rosanova‑Fitzsimmons meetings were reportedly observed by informants of the Orange County District Attorney's Office. On February 27, at La Costa, the same informants say that they heard Rosanova boast of a future payoff split between him and Mr. Fitzsimmons.

In its affidavit seeking an extension and a broadening of electronic surveillance, the FBI cited as a basis for its request Title 18, Section 1954, of the U.S. code, which prohibits commissions and kickbacks to union and welfare plan officials in return for the placement of union business.


During the 40 days the devices were in operation, the sources said, recorded conversations greatly supplemented and tended to corroborate information gathered in other phases of the investigation being carried on by the bureau and authorities in Los Angeles, Riverside, San Diego, and Orange Counties.

On February 9, the day after Milano, Sciortino and Lamandri allegedly met with Mr. Fitzsimmons and Dorfman in Palm Springs, the taps at People's Industrial Consultants were said to have picked up a conversation between Dr. Frome and Raymond de Derosa, identified by the California authorities as a muscle man for Milano, who operates out of the consulting company's offices.

The FBI affidavit said that de Derosa had told the doctor that "the deal with the Teamsters is all set." De Derosa indicated to Dr. Frome, according to the affidavit, that People's Industrial was in the line for a 7 percent commission, and they talked about a possible $1 billion‑a‑year business.

In other tapped conversations, de Derosa reportedly said the PIC would get a 10 percent cut of the medical payments. He reportedly complained that the concern had to "give away three points (3 percent) to get the deal."

This is apparently a reference to that part of the deal surrendered by the Los Angeles Mafia figures to pacify the Chicago representatives.

Meyer Lansky was left out of the Teamsters‑Republican Party coalition. Several years later it was reported that Nixon could get $1 million from the Teamsters Union. He told John Dean that this fund could be used for hush money. The Washington Star reported on Sept. 29, 1977:

. . . the $1 million may have been what Nixon referred to in the March 21, 1973, White House meeting with Dean concerning the Watergate burglars, demands for huge sums [of] money in return for keeping quiet.

According to a transcript of a tape of that conversation, Nixon said to Dean: "What I mean is you could get a million dollars ... And you could get it in cash. I know where it could be gotten.... We could get the money. There is no problem in that."

But Lansky's empire was much more than a link with the Teamsters. His investments in Las Vegas were supplemented by major holdings of casinos and hotels in the Bahamas, which he helped open up after Cuba was brutally thrust outside the gambling circuit for American tourists. Businessmen who supported the Republican Party attempted to wrest control from Lansky in the Bahamas by manipulating political leadership. Bebe Rebozo made extensive investments in hotels and casinos and tried to buy up and compete with Lansky's enterprises. Someone attempted to murder a leading politician who was favoring Rebozo in the struggle. [emphasis added]

The final attack on Lansky was probably the most successful and the most serious. The Republicans attempted to close off his sources of heroin. They did this by pressuring the Turkish government to enforce the law prohibiting the growing of opium, the plant from which all heroin is refined. At that time (late 1960s) Turkey accounted for probably go percent of the opium processed into heroin and shipped to the United States. By 1972 Turkey was accounting for less than 40 percent, and Lansky had lost control over a major source of his financial empire.[14] The Republican administration also pressured the Latin American governments whose countries were layover points in the heroin route to America, and Lansky's principal Latin American coordinator of heroin traffic, Auguste Ricord, was forced out of Argentina, where he had been managing the traffic for years. He was eventually arrested in Paraguay.[15]

Meanwhile, the heroin traffic from Southeast Asia, especially from the Golden Triangle of northern Thailand, Burma, and Laos, expanded production and a new source of heroin for the incredibly lucrative American market opened up. It is unknown whether this new heroin source was linked to Republican politicians, but the fact that the CIA and the South Vietnamese governments under generals Ky and Thieu actively aided the development of this heroin source suggests that such a link is not beyond the realm of possibility.[16]

Lansky must have known he was fighting for his life. Always a heavy contributor to the Presidential election, in 1968 he outdid himself by a good margin. Through his agent, Sam Levinson, Lansky contributed at least $240,000 to Hubert Humphrey's campaign against Nixon. Lansky also contributed heavily in support of the Democratic governor of Washington. In fact, so heavily did he contribute that according to political observers there the Democratic candidate was able to ignore altogether the usually time-consuming task of raising campaign contributions.

The format of the attack against Democrat‑controlled crime networks was much the same everywhere. Newly appointed Republican U.S. attorneys called grand juries to investigate corruption and racketeering. In Chicago one of Illinois's leading Democratic politicians, Otto Kerner, who had formerly been the governor of Illinois and was at the time of his exposure a U.S. judge, was indicted, tried, found guilty, and sentenced to prison for accepting a payoff while he was governor. As we have seen, in Seattle the bulk of the political, law‑enforcement network members and even a few of the racketeers were indicted.

In the state the Democrats lost the governorship despite Lansky's heavy financing. Moreover, the state attorney general's office was also won by a Republican, and to make matters totally unlivable for the existing network, a Nixon‑affiliated Republican won the county prosecutor's office. These shifts in state and local political fortunes would mean considerably less money for Democrats in the state, because the new network would be formed around a moderate Republican‑oriented group. It would thus mean considerably more money for the Republicans.


Nixon knew a lot of secrets; Secrets get you favors and are used for blackmail. The M-fund represents a part of a netherworld of financing used by the “black” network, which affects the “real” world. An excerpt from, Gold Warriors, by Peggy and Sterling Seagrave:


America lost control of the M-Fund in 1960 when it was given away by Vice President Nixon, in exchange for Tokyo's secret financial support of his bid for the U.S. presidency. For more than forty years since then, the M-Fund has remained the illicit toy of seven LDP politicians who have used it to keep themselves in power. Nixon effectively gave them the ultimate secret weapon, a bottomless black bag.

President Eisenhower was going to Tokyo to conclude revisions to the Mutual Security Treaty, but his trip was canceled after violent protests in Japan. Instead, Prime Minister Kishi Nobosuke flew to Washington, where the Security Treaty negotiations were conducted by the vice president. Nixon was obsessed by his craving to become president, and was willing to tum over control of the M-Fund, and to promise the return of Okinawa, in return for kickbacks to his campaign fund. Kishi, an indicted war criminal, a key figure in the wartime regime and in hard drugs, munitions and slave labor, thereby gained personal control of the M-Fund. According to Takano Hajime and other well-informed sources, Nixon justified the deal with the dubious excuse that Tokyo needed an emergency covert source of money in the event that war broke out in Northeast Asia. In theory, Japan's postwar constitution prevented it from creating a new army, so Tokyo could not allocate a huge defense budget - at least not publicly. Nixon argued that full LDP control of the M-Fund would accomplish the same thing covertly. In 1960, the MFund was said to have an asset base worth ?12.3-trillion ($35-billion). How much of this Kishi agreed to kick back to Nixon is not known. It is important to note that Nixon did not tum the M-Fund over to the government of Japan, but to Prime Minister Kishi personally, putting the lie to his grandiose justifications. So a few months later, when Kishi ceased to be prime minister, he and his clique continued to control the M-Fund. It goes without saying that they never used it for the designated purpose, instead turning it into a private source of personal enrichment.

That Nixon made such Faustian bargains was widely rumored. Publication of The Arrogance of Power: The Secret World if Richard Nixon, by Anthony Summers, shows that to advance his political career, Nixon even made financial deals with Meyer Lansky and other underworld figures . This is further supported by evidence first presented by Christopher Hitchens in "The Case Against Henry Kissinger" in Harper's Magazine, arguing that Nixon and Kissinger secretly manipulated American policy for their own personal ends in violation of the U.S. Constitution.

Nixon's M-Fund giveaway was not the end of the story - far from it. Under LOP control, the M-Fund spawned a number of exotic financial instruments that propagated through global financial markets like Ebola virus. Investors or their attorneys have been snared in amazing international sting operations, charged with negotiating fraudulent instruments, ending in wrongful convictions and prison sentences. It is now painfully obvious that some of these victims were holding authentic paper, and only were stung to shield Japan's government from its own folly - although more crafty political and financial motives also may be discerned.

How did Nixon's dirty deal lead to such a scandalous impasse decades later? To know that, we must see what happened when the M-Fund changed hands.


Until Nixon interfered, the M-Fund was controlled and administered by a small group of Americans in Tokyo close to MacArthur. In 1950, when the Korean War started, most U.S. forces in Japan were rushed to Korea, creating a security vacuum. Because the postwar constitution prohibited setting up a new army, the M-Fund secretly provided over $50-million to create what was characterized as a self-defense force. When the occupation ended in 1952 and Washington and Tokyo concluded their joint security treaty, administration of the M-Fund shifted to dual control, staffed by U.S. Embassy CIA personnel and their Japanese counterparts, weighted in favor of the Americans. The Yotsuya Fund and Keenan Fund were folded into it. The M-Fund's asset base was being invested in Japanese industry and finance, and the returns were used for political inducements. The M-Fund council interfered vigorously to keep Japan's government, industry, and society under the tight control of conservatives friendly toward America. This meant blocking or undermining Japanese individuals or groups who wished to liberalize Japanese politics, or unbuckle what Dr. Miyamato Masao called Japan's 'straight-jacket society'.

In 1956, for example, the Eisenhower Administration labored long and hard to install Kishi as head of the newly merged Liberal-Democratic Party and as Japan's new prime minister. This was the same Kishi who had been a member of the hardcore ruling clique in Manchuria with General Tojo Hideki and Hoshino Naoki, head of the narcotics monopoly. Kishi had also signed Japan's Declaration of War against America in December 1941. During World War II, he was vice minister of munitions and minister of commerce and industry, actively involved in slave labor. Along the way, he made a personal fortune in side-deals with the zaibatsu. Following Japan's surrender, he was one of the most prominent indicted war criminals at Sugamo, where he was a cellmate of Kodama. In 1948, when his release from prison was purchased by Kodama, Kishi began organizing the financial base of the LOP, using Kodama's black gold and injections of M-Fund cash. For ten years, Kishi was groomed as America's Boy by Harry Kern, Eugene Dooman, Compton Packenham and other members of Averell Harriman's group at the American Council for Japan (ACJ). They worked tirelessly to improve Kishi's mousy image, tutored him in English, and taught him to like Scotch. To them, Kishi was America's 'only bet left in Japan'. All this was done covertly, for if the Japanese public learned that Washington was using the M-Fund to replace one prime minister with another, the democracy fiction would collapse.

Despite all this manipulation, when the 1956 election results were in, Kishi was trumped by rival LDP faction leader Ishibashi Tanzan, regarded as 'the least pro-American among the major LDP leaders'. Ishibashi had won because Washington had paid off Kishi supporters, but had not given enough to his opponents. Annoyed, President Eisenhower personally authorized the CIA to destroy Ishibashi, and put Kishi at the head of the LDP. This meant paying very large bribes to all factions of the LDP, to shift their support to Kishi. In February 1957, after an extraordinary amount of grunting and snorting behind the folding screen, Kishi at last replaced Ishibashi as leader of the LDP, and was named prime minister. According to historian Michael Schaller, Kishi then took over from Kodama as 'America's favorite war criminal'.

"Washington heaved an audible sigh of relief," Schaller said. "Kishi reasserted his loyalty to America's Cold War strategy, pledging to limit contact with [Communist] China and, instead, to focus Japanese economic attention on exports to the United States and mutual development of Southeast Asia."

During Kishi's term as prime minister (1957-1960) the LDP received $10-million each year directly from the CIA, chiefly from the M-Fund. Alfred C. Ulmer, Jr., the CIA officer who controlled the M-Fund and many other operations in Japan from 1955 to 1958, said: 'We financed them," because the CIA "depended on the LDP for information." When the party's coffers were depleted by the monumental effort to get Kishi named prime minister, Finance Minister Sato Eisaku (Kishi's brother) appealed to Ambassador Douglas MacArthur II (the general's nephew) for additional secret funds. In July 1958, Ambassador MacArthur wrote to the Department of State, providing details of this request: "Sato asked if it would not be possible for the United States to supply financial funds to aid the conservative forces in this constant struggle against Communism .... This did not come as a surprise to us, since he suggested the same general idea last year."

The ball then was lobbed into Nixon's court.

A few months later, when Nixon renegotiated the Mutual Security Treaty in 1959-1960, he not only gave Kishi the M-Fund, he also promised that when he became president he would give Okinawa back to Japan, while retaining military base rights there. According to sources close to former Prime Minister Tanaka, "Nixon told Kishi that if Japan would assist him in becoming president, he would see to it that the U.S. withdrew from its role in managing the M-Fund, and upon his being elected Nixon would return Okinawa to Japan." Accordingly, when Nixon and Kishi concluded the revision of the security treaty in 1960, the M-Fund was turned over to Kishi. And in 1973, when Nixon at last was elected president, he returned Okinawa to Japan.

White House national security advisor Richard Allen later remarked that the Okinawa transfer had puzzled him. "In 1973, when Nixon gave Okinawa back to Japan, I was following very closely. I was in touch with the White House and I was always puzzled by that, not that it was really a strange thing to do, but there was no agitation for that. He just up and did it. I never quite understood why he did that. Now [in light of Nixon's M-Fund deal] this makes sense to me."

In Japan, the revised Joint Security Treaty was so unpopular that Kishi immediately lost control of his cabinet and had to resign as prime minister. So, only a matter of months after giving him control of the M-Fund, America lost much of the leverage gained by the huge bribe. Nixon may not have got all the kickbacks he expected. Years later, when the chance came to take America off the gold standard, weakening the dollar and strengthening the yen, making Japanese exports more expensive, Nixon chortled that he was "sticking it to the Japanese".

Nevertheless, Kishi remained an LDP kingmaker behind the scenes. Virtually every prime minister of Japan since then was picked by the clique controlling the M-Fund, because they had the most inducements to pass around. Sarcastically called The Magnificent Seven, the clique included prime ministers Kishi, Tanaka Kakuei, Takeshita Noboru, Nakasone Yasuhiro, Miyazawa Kiichi, deputy prime minister Gotoda Masaharu, and LDP vice president Kanemaru Shin. Compared to Japan's great dynastic families and financial shoguns, these were only politicians greasing the wheels. But as politicians go, they were in an unrivaled position to steer Japan's economy, politics and government at every level, without being accountable to the Japanese people. War loot provided the asset base, generating huge profits hidden in creative ways, or offshore. They were all clever men, but Tanaka was the cleverest. How he acquired personal control of the M-Fund from Kishi provides a rare keyhole view of money-politics in Japan.


to be continued:


Written by Kris Millegan   

Allegations regarding "Butch" Merritt, Watergate, Intelligence Agencies and "Crimson Rose, " Vol. X

By Kris Millegan

Nixon on Drugs – Part Three

What I meant is, you could get a million dollars. And you could get it in cash. I know where it could be gotten.
                                                                   — Richard M. Nixon, March 21, 1973, Oval Office


Where does one get $1,000,000? In cash? And in secret?

Again, the evidence is in, Nixon was very comfortable with blackmail. It was his modus operandi, his mileu.

Watergate, got rid of a blackmailer, but not before the blackmailed got their money’s worth. Nixon had things to do, before he could be “let go” … leaving the Presidency in disgrace. “They” knew they could always embroil “Tricky Dicky,” with a scandal. The Townhouse affair wasn’t quite sexy enough. But along came a very controlled scandal, Watergate, and Nixon was in the bag.

Nixon and his favorite bagman, Bebe Rebozo


Again, some detail (notice the players and the assassination squads) from the 1980 out-of-print book, The Great Heroin Coup – Drugs, Intelligence, & International Fascism by Henrik Kruger:



Richard Nixon's connections to the Syndicate and its stooges are a matter of record. The only question is when they began. Some say it was 1946, when Nixon ran for Congress in California and Murray Chotiner, a top Syndicate defense attorney, ran his campaign with support from the gangster Mickey Cohen.[1]

Others place the Nixon‑underworld wedding as early as 1943, when Nixon was working in the Office of Price Administration, at a desk responsible for controlling the market in rubber goods. There he allegedly met his future pals George "The Senator from Cuba" Smathers and the Cuban‑American Bebe Rebozo who later struck it rich in real estate. The two were then small time: Smathers a lawyer for a Syndicate front smuggling auto tires from Cuba, Rebozo the owner of a gas station that sold the tires.[2]

The Florida clique was a happy family. Nixon liked to take fishing jaunts with the likes of Rebozo, Meyer Lansky's associate Tatum "Chubby" Wofford,[3] and Richard Danner, who would later manage the Sands casino in Las Vegas for Howard Hughes.[4] He also got to know people even closer to the Syndicate, who had extensive interests in Cuba. In 1952, one short month after the dictator Batista's comeback, Nixon and Danner joined throngs of tourists who unloaded their savings at one of the Syndicate's Cuban casinos.[5] Nixon would return frequently. He, Rebozo, and Smathers allegedly invested in the island during the fifties,[6] and in 1955, as vice president of the United States, Nixon would pin an award on Batista, with whom he was photographed in the dictator's palace.

Nixon also helped plan the Bay of Pigs invasion in 1959. Chairing the 54/12 Group, a National Security Council subcommittee in charge of covert actions, the vice president pushed for the plan's approval before his 1960 presidential race against John F. Kennedy.[7] According to Howard Hunt, Nixon was the invasion's "secret action officer" in the White House.[8] President Eisenhower, who would later plead ignorance of the plan's extent, assumed it was limited to support for anti‑Castro guerillas in the mountains.[9] When JFK took over the oval office, he was presented with a fait accompli.

If Eisenhower was really left out in the cold on the plan's magnitude, then William Pawley must have been among Nixon's co‑conspirators. As mentioned earlier, Pawley talked Eisenhower into arming the anti‑Communist Cubans.[10] Pawley was and would remain one of Nixon's most ardent supporters.[11]

When the invasion proved a bust, Nixon's voice was among the loudest accusing Kennedy of undermining it by refusing reinforcements. In the years that followed he continued to cultivate support among the Cuban exiles and other right wing constituencies. Cubans for Nixon and Asians for Nixon touted him as a man who would not forsake the cause of anticommunism. The Nixon of near‑hysterical anticommunism would win additional allies in the Syndicate and in powerful business circles tied in with the military and espionge.[sic]

Fortunately for Nixon, forces behind the above lobbies were also influential in organized labor, especially the Teamsters Union. Teamster boss Jimmy Hoffa became a pawn of the Lansky syndicate, which borrowed millions from the union's pension fund. However, Hoffa's obsequiousness towards the Mob was dampened by Attorney General Robert Kennedy's aggressive investigation of Teamster policies. In 1967, prior to Nixon's decisive electoral campaign, Hoffa landed in jail with a thirteen‑year sentence for misuse of union funds. The new Teamster strongmen, Frank Fitzsimmons and Anthony "Tony Pro" Provenzano, were friends of Nixon and in the hands of the Syndicate.[12] When Nixon pardoned Hoffa just prior to Christmas 1971, Hoffa had to promise to stay out of organized labor.

In the sixties Nixon grew even closer to his friends in Miami, who by then had made millions in land speculation. Dade County north of Miami became known as "Lanskyville," as a string of seemingly legitimate real estate firms handled the Lansky Mob's enormous holdings. Among the more prominent firms were:[13]

1) The Cape Florida Development Co., run by Donald Berg and Nixon's pal Rebozo. The two worked closely with Al Polizzi, the former head of the Syndicate's Mayfield Road Gang in Cleveland, then in charge of the Syndicate's Florida contractors. An investigation into the placement of stolen securities at Rebozo's bank was nipped in the bud.

2) The Mary Carter Paint Co., which in 1967 became Resorts International, that now runs the world's most profitable casino in Atlantic City, New Jersey, and was purportedly the brainchild of Mr. Lansky. Resorts' Paradise Island casino in the Bahamas was managed by Ed Cellini, a longtime Lansky casino operator.

3) The General Development Corp., run by two Lansky strawmen, Wallace Groves and Lou Chesler. Its board of directors included Lansky broker Max Orovitz and the gangster Trigger Mike Coppola. Groves bought up half of Grand Bahama Island for the Syndicate and contracted with Nixon's law client, National Bulk Carriers, to construct a harbor there.

4) The Major Realty Co., whose controlling shareholders were Senator Smathers and Lansky's men Orovitz and Ben Siegelbaum.

Through his friends, Nixon acquired land on Key Biscayne and Fisher's Island, off the Florida coast. In return he readily made himself available for personal appearances. When Mary Carter in 1967 opened the Nassau Bay Club casino on Grand Bahama Island, Nixon was the guest of honor. One year later he was there when Resorts International opened its casino on Paradise Island.

Nixon also expressed his friendship in other ways. Hoffa was not the only one who did not have to pay his full debt to society. Neither did Leonard Bursten, Carl Kovens, or Morris Shenker, all Syndicate associates, the last two solid Nixon campaign supporters.[14] Robert Morgenthau, the federal attorney for the southern district of New York, became interested in some of Nixon's friends in 1968. He proved Max Orovitz guilty of willful violation of stock registration laws, and was investigating Syndicate money transfers to Switzerland. The latter threatened to lead to an indictment of Nixon's friend John M. King of Investor's Overseas Service (IOS).[15] Morgenthau, however, was removed from office.

Glancing at major contributors to Nixon's 1968 and 1972 campaign chests, one finds the names of Miami straw men Lou Chesler and Richard Pistell, Resorts' president James Crosby and John M. King, the Texas billionaire Howard Hughes, master swindler Robert Vesco, and the California millionaire C. Arnholdt Smith, a close associate of the gangster John Alessio and later convicted of misuse of bank funds.

The list of Nixon's major personal and political supporters starts with Rebozo, Smathers, Dewey, Hoffa, and Frank Fitzsimmons, all with their Syndicate associations; and goes on to include William Pawley and the China Lobby's Madame Anna Chan Chennault.

Nearly all of Nixon's major supporters in Florida were involved in one way or another in the Bay of Pigs operation. The same can be said of the top Syndicate figures, four of whom escorted the invasion force in a yacht for part of the voyage, while Trafficante's lieutenants in Miami and the Dominican Republic stood ready to seize the casinos.

Moreover, one cannot overlook Nixon's particular connection to IOS‑multimillionaire Vesco, who until recently was in exile in Costa Rica, where he allegedly financed the smuggling of narcotics.[16] Vesco provided covert financial aid to Nixon's reelection campaign, and was closely associated with Nixon's brother Edward and nephew Donald, Jr. Richard Nixon himself is alleged to have met secretly with Vesco in Salzburg, Austria.[17] The White House, finally, came to Vesco's aid in a case brought against him by the Securities and Exchange Commission,[18] just as an investigation of his narcotics activities was similarly choked off.[19]

pps. 153-157


1. H. Kohn: "Strange Bedfellows," Rolling Stone, 20 May 1976.

2. C. Oglesby: "Presidential Assassinations and the Closing of the Frontier," in Government by Gunplay, S. Blumenthal and H. Yazijian, eds. (New American Library, 1976).

3. The 1950 Kefauver investigation discovered that one of Lansky's largest back room casinos in Miami was set up in the Wofford Hotel run by Tatum "Chubby" Wofford.

4. Howard Hughes helped Nixon out as early as 1956 with a secret $100,000 donation, as well as a $205,000 loan to his brother Donald.

5. J. Gerth: "Richard Nixon and Organized Crime," in Government by Gunplay, op. cit.

6. Kohn, op. cit.

7. H.G. Klein in the San Diego Union, 25 March 1962.

8. Kohn, op. cit.

9. Oglesby, op. cit.

10. M. Acoca and R.K. Brown: "The Bayo‑Pawley Affair," Soldier of Fortune, Vol. 1, No. 2,1976.

11. J. Hougan: Spooks (William Morrow, 1978).

12. Time, 18 August 1975. Six months after an 88‑count indictment, Frank Fitzsimmons' son Richard, a Teamsters organizer, was recently sentenced to thirty months and a $10,000 fine for accepting bribes from trucking company officials (Boston Globe, 16 February 1980).

13. Information on the four firms is from the October 1972 NACLA Report.

14. Bursten, a friend of Hoffa's who was at one time a director of the Miami National Bank, saw his fifteen‑year sentence, in connection with the bankruptcy of a Beverly Hills housing development that had received a $12 million Teamster pension fund loan, reduced to probation after the intervention of Murray Chotiner. Kovens, another leading Florida Teamster official, was convicted in the same pension fraud case as Hoffa, but released from federal prison with the help of Senator Smathers. and then went on to collect $50,000 for Nixon's 1972 reelection campaign. Shenker, whom Life magazine in 1971 called the "foremost mob attorney," saw the Justice Department's multi‑year investigation of his tax violations turned down by Nixon's Attorney General Richard Kleindienst on the basis of "insufficient evidence," after which the files on Shenker at the offices of the U.S. Attorney at St. Louis disappeared; see Gerth, op. cit.

15. NACLA Report, op. cit.

16. Hougan, op. cit.

17. Ibid.

18. Time, 6 May 1974.

19. L.H. Whittemore: Peroff (Ballantine, 1975). As of November 1979, a federal grand jury in New York City was investigating Vesco's masterminding an alleged scheme whereby Libyan government officials were to pay off members of the Carter administration to facilitate Libya's purchase of American C‑130 transport planes; see the New York Times, 4 November 1979. Five months later, in the midst of Jimmy Carter's reelection campaign, an assistant U.S. attorney announced that a second federal grand jury in Washington had returned no indictments following its investigation of allegations that Vesco had attempted to bribe Carter administration officials to fix his long‑standing legal problems. The grand jury's foreman, Ralph Ulmer, immediately criticized the incompleteness of the announcement, charging that "the statement is incomplete and thus misleading, which is about par for the course for the Justice Department." (New York Times, 2 April 1980).

Ulmer had earlier charged that "cover‑up activities are being orchestrated within the Justice Department under the concept that the Administration must be protected at a costs... Among other things information was withheld from the grand jury... a witness was encouraged to be less than candid with the FBI." (Boston Globe, 30 August 1979.)



Never had Richard Nixon's White House staff been so preoccupied with narcotics matters as in the summer of 1971. They were obsessed with two projects: a new White House intelligence and enforcement unit as envisioned by the Huston Plan, and a comprehensive narcotics control apparatus, similarly under direct presidential control. The two idees fixes converged in a conspiratorial and political‑criminal network of hitherto unimagined dimensions.

That summer the White House set up the Special Action Office for Drug Abuse Prevention alongside the Special Investigation Unit, otherwise known as the Plumbers. Several of the Plumbers also worked on narcotics affairs. The groups' key figures included:

Egil Krogh (chief Plumber)—who followed John Erlichman (for whose law firm he had worked part time) to the White House in 1968 within months of his graduation from the University of Washington Law School. He was named deputy assistant to the president for law enforcement, and within three years found himself in charge both of Nixon's narcotics and law enforcement campaign, and of the "Plumbers squad. His single‑minded ambition surfaced in a declaration to the noted psychiatrist and narcotics expert, Dr. Daniel S. Freedman, when the latter refused to support one of Krogh's programs: "Well, don't worry. Anyone who opposes us we'll destroy. As a matter of fact, anyone who doesn't support us, well destroy."[1] Krogh would wind up in jail for the break‑in at the office of Daniel Ellsberg's psychiatrist, Dr. Lewis Fielding.

Walter Minnick (temporary Plumber)—a young graduate of Harvard Business School and former agent of the CIA, who joined Krogh's narcotics staff in spring 1971 and later helped draft the reorganization plan that created the DEA.

John Caulfield (Plumber)—a former agent of the New York City Police Department's Bureau of Special Services (BOSS), which specialized in narcotics and "monitoring the activities of terrorist organizations." In the 1960 presidential campaign he had been assigned to protect candidate Nixon in New York City. That and his close relationship with Nixon's personal secretary, Rose Mary Woods (of eighteen and one‑half minute tape gap fame), gained him a foot in the door of the White House.[2]

Myles Ambrose—the former Customs Commissioner, who was named head of the narcotics campaign's domestic strike force. He would later leave government service in disgrace.

G. Gordon Liddy (Plumber) ‑a former FBI agent whose narcotics intelligence job at the Treasury Department had been terminated, only weeks prior to his recruitment by the White House, for his outspoken lobbying against gun‑control legislation. Eventually, he would get six‑to‑twenty for his role in the break‑in at the Watergate complex and one‑to‑three for the job at Fielding's office.

Howard Hunt (Plumber)—a former CIA agent closely connected to the agency‑trained Cuban exiles, many of whom had emerged from Santo Trafficante's Cuban narcotics Mafia. Hunt was employed as a special advisor on narcotics problems in Southeast Asia. In November 1973 Judge John Sirica would sentence him to two‑and‑a‑half to eight years — reduced from an initial thirty‑five — for the Watergate break-in.

Lucien Conein—a CIA agent, Ed Lansdale's right‑hand man in Vietnam, and an expert on Southeast Asian narcotics centers and the Corsican Mafia. He was brought into the White House by his old buddy Hunt.

David Young—a young lawyer who put up a sign outside his office, "Mr. Young, Plumber," when apprised that he would be plugging leaks and that the trade had run in his family. He came to Krogh's staff from Henry Kissinger's National Security Council.

It was a strange mix of novices and experienced agents with the most intriguing pasts.

Hunt and Liddy were located in Room 16 of the Executive Office Building, headquarters for the Plumbers group's secret narcotics missions and other, crooked operations on behalf of the Committee to Re‑Elect the President (CREEP). The Plumbers' first assignment was the break‑in at the office of Daniel Ellsberg's psychiatrist.[3] For the break‑in dirty work, Hunt enlisted Bernard Barker, Eugenio Rolando Martinez and Felipe de Diego, three of his Cuban friends who had been involved in the Bay of Pigs invasion. Martinez and de Diego also took part in the CIA's follow‑up Operation 40, and the ubiquitous Martinez was in on Trafficante‑masterminded boat raids on Cuba.[4]

By the summer of 1971 the White House Death Squad was well on its way. Hunt sought out Barker in Miami for what Hunt called "a new national security organization above the CIA and FBI." Barker would assemble a force of 120 CIA‑trained exiles for Operation Diamond, which, under cover of narcotics enforcement, would kidnap or assassinate political enemies. Barker signed up.[5]

In the fall of 1971 Hunt asked another of his Cuban friends, Bay of Pigs veteran Manuel Artime, to set up "hit teams" for the liquidation of narcotics dealers. As later revealed, Artime's primary target was to have been the Panamanian strongman, General Omar Torrijos.[6]

Krogh and his staff, meanwhile, tightened their grip on narcotics control. After the BNDD takeover of customs' international jurisdiction, Krogh pushed Bureau chief John Ingersoll for results to feed Congress and the press. In September 1971 Krogh was named to direct the newly formed Cabinet Committee on International Narcotics Control. In collaboration with the State Department, BNDD, CIA and Henry Kissinger's office, the committee coordinated the international struggle against narcotics. State Department narcotics advisor Nelson Gross, chosen to supervise the joint actions, was later sentenced to two years for attempted bribery and income tax evasion.[7]

Egil Krogh was less than satisfied with existing narcotics efforts, especially those of the CIA, whose intelligence reports, according to Ingersoll, were decisive for the work of the BNDD. Krogh wanted the White House instead to handle the BNDD's intelligence work. Nixon's staff would then decide which drug traffickers to pursue. Krogh's dissatisfaction was expressed to Hunt, who immediately proposed an Office of National Narcotics Intelligence (ONNI) where all narcotics intelligence reports would be analyzed and follow‑up actions decided.[8]

Hunt told Krogh he could enlist for the office experienced CIA figures, starting with Lucien Conein at its head.[9] Nixon, however, chose William C. Sullivan instead. Once second to J. Edgar Hoover in the FBI, Sullivan had managed Division Five, which investigated espionage, sabotage, and subversion.[10] He also directed Operation Cointelpro, the bureau's vendetta against dissident political and cultural groups (such as the Black Panthers), and had been Nixon's choice to direct the Huston Plan's elaborate surveillance of U.S. citizens.[11]

Hunt, nevertheless, found a niche for his friend. Conein was assigned to the BNDD as a "strategic intelligence officer," and came to control overseas narcotics intelligence, originally the domain of ONNI,[12] while Sullivan concentrated on domestic affairs.[13]

The White House now controlled narcotics intelligence at home and abroad. But that still wasn't enough. Nixon's staff also sought to control enforcement itself, and that required effective strike forces. In January 1972 the White House set up the Office for Drug Abuse Law Enforcement (ODALE) according to a plan conceived by Gordon Liddy. It became the domestic strike force under Myles Ambrose — whose government career ended with news of his pleasure trip to the ranch of a Texan indicted for narcotics and gun‑running.[14] ODALE soon became notorious for its record of illegal raids, no‑knock entries into private homes, and beatings of innocent people.[15] Some called it the American Gestapo.

Overseas, as well, the White House was dissatisfied with the BNDD's enforcement powers. Dr. J. Thomas Ungerleider, a member of the National Commission on Marijuana and Drug Abuse, noted in a record of his conversations with BNDD officials: "There was some talk about establishing hit squads (assassination teams), as they are said to have in a South American country. It was stated that with 150 key assassinations, the entire heroin refining operation can be thrown into chaos. 'Officials' say it is known exactly who is involved in these operations but can't prove it."

Hunt, Liddy and others in Room 16 did not confine themselves to narcotics campaigns and political assassinations. On behalf of CREEP they raised campaign funds from more or less shady sources and sabotaged the campaigns of George Wallace, Hubert Humphrey, Edmund Muskie, and George McGovern. Hunt's CIA colleagues are among those who suspect he spiked Muskie's lemonade with an LSDlike substance prior to the candidate's famous tearful speech.[16]

Besides Hunt's Cubans, the familiar Frank Sturgis, who had earlier taken orders from Santo Trafficante, took on narcotics work and special assignments for CREEP.[17] According to a 1972 FBI report, sources in Miami had claimed Sturgis was then associated with organized crime activities. He later told an interviewer that he had aided Hunt in a 1971 investigation of the drug traffic reaching the U.S. from Paraguay via Panama.[18] He was in on several actions connected with the investigation, which focussed exclusively on Auguste Ricord's Grupo Frances.[19]

Sturgis was everywhere in the hectic spring of 1972. In May he was among the men who assaulted Daniel Ellsberg on the steps of the Capitol. Later that month he and Cubans including Bernard Barker arranged a Miami demonstration in support of Nixon's decision to mine Haiphong harbor. Sturgis himself was at the wheel of the truck leading the procession. He helped recruit agitators to disrupt the Democratic national convention, and in the June 17 Watergate break‑ in Sturgis joined CIA/ Trafficante Cubans and White House narcotics conspirators.[20]

As the noted Berkeley researcher Peter Dale Scott put it in 1973: "In my opinion it is no coincidence that the key figures in Watergate — Liddy, Hunt, Sturgis, Krogh, Caulfield ‑had been drawn from the conspiratorial world of government narcotics enforcement, a shady realm in which operations of organized crime, counter‑revolution and government intelligence have traditionally overlapped."[21]

In July 1973 Nixon's narcotics forces were essentially consolidated according to Reorganization Plan Number Two worked out by former CIA agent Walter Minnick and Egil Krogh. The Drug Enforcement Administration (DEA) was formed out of the BNDD, ODALE, ONNI and Customs Intelligence. Four thousand operatives, including fifty CIA agents (many of them Cubans from the ODALE hard core), five hundred customs agents and most of the BNDD staff made the DEA a powerful new agency.

Ingersoll of the BNDD, Ambrose of ODALE and Sullivan of ONNI all resigned as John R. Bartels became the DEA's first director. His was no small task. Earlier rivalries persisted. The strange brew of agents with widely varying backgrounds and assignments made the DEA difficult if not impossible to steer. U.S. narcotics enforcement has a history of corruption, scandal and exposure of agent collaboration with the criminals it has been assigned to police.

Still, no bureau has been as plagued by scandal as the DEA has in seven years of existence. The exposes and charges run the gamut from trafficking in drugs, teamwork with the Mob and protection of major traffickers, to thievery, gunrunning, torture, and assassination of drug traffickers.[22]

When Lucien Conein became the head of the DEA's Special Operations Branch he allegedly carried out an assassination program after setting up the DEA's Special Operations Group (DEASOG), under cover of the B.R. Fox Company and housed on Connecticut Avenue in Washington.[23] DEASOG's twelve members—the Dirty Dozen —were hard‑nosed and experienced Latino CIA agents transferred over to the drug agency for the occasion. Prior to DEASOG, Conein had set up another DEA "intelligence" operation, Deacon I, employing Cuban exile veterans of CIA training camps, who were supervised by thirty other Cubans, all formerly of the CIA's Clandestine Services.[24]

In response to the claim that DEASOG was a "hit team," Conein told journalist George Crile: "That is a big ‑‑‑‑‑‑‑ lie. That is bull ‑‑‑‑‑However, a DEA official had told Crile: "When you get down to it, Conein was organizing an assassination program. He was frustrated by the big‑time operators who were just too insulated to get to." DEA officials also told Crile that "meetings were held to decide whom to target and what method of assassination to employ. Conein then assigned the task to three of the former CIA operatives assigned to the Connecticut Avenue safe house."[25]

DEASOG shared its Washington office with an old friend and colleague of Hunt and Conein's from OSS China, the weapons dealing soldier of fortune and specialist in assassination, Mitch WerBell III.26 WerBell told Crile he had been a business partner of Conein's as late as 1974, and that he and Conein had worked together on providing the DEA with assassination devices.[27] Among WerBell's other associates were Frank Sturgis, Cuban exile leaders, and Robert Vesco, who, like WerBell himself, has been charged with bankrolling narcotics smuggling.[28] Carlos Hernandez Rumbaut, the bodyguard of Vesco's close friend and business partner, former Costa Rican President Pepe Figueres, is a former Conein agent who fled the country to avoid imprisonment on a drug conviction.[29] He has reportedly reentered the U.S. twice with a U.S. diplomatic passport.[30]

Assassination, it can be argued, became a modus operandi under Richard Nixon. The CIA carried out assassination and extermination campaigns in Vietnam, Guatemala, Argentina, and Brazil[31]—aided in Latin America by the local Death Squads. The White House appears to have‑sponsored a secret assassination program under cover of drug enforcement. It was continued by the DEA, which seemingly overlapped with the CIA in political rather than drug enforcement.

Until 1974 the training of torturers and members of Latin American death squads came under the auspices of the CIA and USAID's Office of Public Safety. Some 100,000 Brazilian policemen, for example, were trained and 523 of them were chosen for courses in the U.S.A.[32] They were trained at the International Police Academy in Georgetown, Washington, D.C. and at a secret CIA center in the same city on R Street, under cover of International Police Services, Inc. When school was out the prize pupils returned home to work, beside CIA advisors, as functionaries or torturers in such effective repression apparatuses as Sao Paulo's Operacao Bandeirantes.[33] Many would moonlight with the Death Squads.

After Tupamaros guerillas kidnapped and killed U.S. police advisor Dan Mitrione in Uruguay, Washington's schools for foreign police came into the limelight and Congress cut off their funding.[34] Nonetheless, the training program and direct assistance and supervision continued. A 1976 investigation authorized by Senator James Abourezk revealed that the U.S. torture academies had not in fact been completely closed down. According to Jack Anderson, Abourezk found such a school had been in operation since 1974 in Los Fresnos, Texas at the site of a former "bomb school." Another journalist, William Hoffman, later confirmed the existence of a school for torture in Los Fresnos, which had since moved to Georgia, where it was known as the Law Enforcement Training Center.[35] Interestingly, Conein's friend WerBell runs his own large training center in Georgia, The Farm. It's used for, among other things, the training of law enforcement officers.[36]

Much of the old police support apparatus was simply transferred to AID's International Narcotics Control program (INC), which really spelled DEA. In 1974 the DEA had some 400 agents in Latin America, or roughly the number of advisors recalled from the OPS program. INC's budget for technical equipment abroad, meanwhile, jumped from $2.2 million in 1973 to $12.5 million in 1974.

The politics of the new drug effort were exposed when, in 1974, the man behind Argentina's death squad (the Argentine Anticommunist Alliance), Social Minister Lopez Rega, appeared on TV with U.S. Ambassador Robert C. Hill to publicize the two nations' antinarcotics collaboration with the words: "Guerillas are the main users of drugs in Argentina. Therefore, the anti‑drug campaign will automatically be an anti‑guerilla campaign as well.”[31]

It's striking how close the various extermination and repression campaigns have been to the narcotics traffic. The Meo Army deployed by the CIA in Laos smuggled large quantities of opium. Lopez Rega and his Argentine AAA henchmen were eventually exposed as keys to a cocaine ring.[38] One of the chief AAA hatchet men, Francois Chiappe, was a lieutenant in the Ricord/David heroin network.[39] Paraguay's most ruthless high‑ranking officers were exposed as heroin profiteers. Christian David took part in extermination campaigns in Argentina, Brazil, and Uruguay. Operacao Bandeirantes' chief, Sergio Fleury, and several of his colleagues pocketed large protection payoffs.[40] Fleury's number two man in the Sao Paulo Death Squad, Ademar Augusto, de Oliveira, alias Fininho, fled to Paraguay after he was charged with murder. There, under the name Irineu. Bruno da Silva, he worked for the Ricord gang.[41] When David's successor, the Brazilian narcotics dealer Milton Concalves Thiago, alias Cabecao (The Brain), was arrested in 1975, it was learned that he had been paying off the entire Rio de Janeiro Death Squad, which included four narcotics police lieutenants .42 And finally as we go to press we learn that the dictator, Pinochet, assumed control of Chile's cocaine trade, then turned it over to his secret police, DINA, which shared the profits with its Cuban exile henchmen.[43]

The political violence set in motion by the White House narcotics offices ran smoothly. But what of actual drug enforcement? From its inception it focussed on dismantling the French narcotics network. When that was done, America would be free of the heroin plague, or so said Nixon and his staff. Reports of increasing amounts of heroin from Southeast Asia and Mexico were obscured by the great public relations campaign on the struggle against the Corsicans.

The Turkey/ Marseilles/ U.S. heroin pipeline was indeed shut down, and the French Corsican Mafia was almost totally decimated. But major new suppliers in Southeast Asia and South America were left untouched — despite warnings and reports — and despite the many CIA "experts" on the Latin American drug scene. Not only were most major heroin suppliers in the two regions left alone, they were protected. And they were aided by the arrest of small‑time competitors.

At home the story was nearly the same. ODALE and DEA nabbed only minor distributors and sidewalk pushers.

pps. 159-169


1. L. Lurie: The Impeachment of Richard Nixon (Berkeley, 1973).

2. J.A. Lukas: Nightmare (Viking, 1976).

3. It is interesting to speculate whether Ellsberg's knowledge of top‑secret operations in Vietnam touched on narcotics. His supervisors in Southeast Asia had been General Lansdale and Lieutenant Colonel Conein. Ellsberg and Conein were apparently quite close in Vietnam. Conein reportedly saved Ellsberg's life when the latter got romantically involved with the mistress of an Corsican Mafia capo. The gangster threatened to kill Ellsberg. Conein, in turn, told the gangster it would lead to his own funeral and war between the CIA and the Corsicans ‑see J. Hougan: Spooks (William Morrow, 1978).

4. See chapter fifteen.

5.1977 CBS interview of Bernard Barker; see also G. Crile III in the Washington Post, 13 June 1976.

6. J. Marshall: "The White House Death Squad," Inquiry, 5 March 1979.

7. E.J. Epstein: Agency of Fear (Putnam, 1977).

8. Ibid.

9. Ibid.

10. D. Wise and T.B. Ross: The Invisible Government (Random House, 1964).

11. S. Blumenthal: "How the FBI Tried to Destroy the Black Panthers," in Government by Gunplay, S. Blumenthal and H. Yazijian, eds. (New American Library, 1976).

12. H. Messick: ‑Of Grass and Snow (Prentice‑Hall, 1979).

13. A 1971 New York investigation revealed that 47 percent of the city's 300,000 addicts were Black, 27 percent Hispanic and only 15 percent White‑see C. Lamour and M.R. Lamberti: Les Grandes Maneuvres de l'0pium (Editions du Seuil, 1972); i.e., there were some 150,000 Black addicts in New York City alone. Still, Nixon named as director of ONNI, William C. Sullivan. The man who had planned and executed Operation Cointelpro would now battle the forces doping the potentially troublesome elements of the Ghetto. Ironically, Malcolm X and the Panthers, prime Cointelpro targets, had been the only ones to make significant headway against ghetto drug addiction.

14. T. Meldal‑Johnsen and V. Young: The Interpol Connection (Dial, 1979).

15. Epstein, op. cit.

16. M. Copeland: Beyond Cloak and Dagger (Pinnacle Books, 1974).

17. H. Kohn: "Strange Bedfellows," Rolling Stone, 20 May 1976.

18. True, August 1974.

19. In his book Cygne (Grasset, 1976), intelligence agent Luis Gonzales‑Mata describes being assigned a special task by CIA agent "Robert Berg." He was to convince the Paraguayan dictator Stroessner that Ricord was behind a planned coup attempt against him financed with heroin from Red China. Stroessner was in a bind, since he very well knew that the source of the heroin was not Red China but his bosom buddies in Taiwan.

20. C. Bernstein and B. Woodward: All the President's Men (Warner Books, 1975).

21. P.D. Scott: "From Dallas to Watergate," Ramparts, November 1973.

22. U.S. Justice Department DeFeo Report, 1975; the list of DEA abuses has recently been expanded to include a computerized information system covering 570,000 names (a number which may be compared with the 8000 federal drug arrests each year)‑see E. Rasen: "High‑Tech Fascism," Penthouse, March 1980.

23. Hougan, op. cit.

24. Ibid.

25. Crile, op. cit.

26. Another OSS China hand, Clark McGregor, replaced John Mitchell as the

head of CREEP.

27. Crile, op. cit.

28. T. Dunkin: "The Great Pot Plot," Soldier of Fortune, Vol. 2, No. 1, 1977;

L.H. Whittemore: Peroff (Ballantine, 1975).

29. Hougan, op. cit.

30. Crile, op. cit.

31. Cuban exiles took part in an extermination campaign in Guatemala between 1968 and 1971. According to Amnesty International, 30,000 people were murdered there between 1962 and 1971, most of them in the last three years. Similarly, anti‑Castro Cubans had their hand in the Argentine AAA's murder campaign believed to have claimed 10,000 lives. In Brazil the Sao Paulo Death Squad alone is estimated to have assassinated 2000 between 1968 and 1972, while many others perished in the torture chambers.

32. Skeptic, January/ February 1977.

33. A.J. Langguth: Hidden Terrors (Pantheon, 1978). 34. Ibid.

35. Gallery, May 1978.

36. Dunkin, op. cit. Among other antiterrorism trainees at WerBell's camp in Powder Springs have been several members of U.S. presidential candidate Lyndon Larouche's U.S. Labor Party. The Marxist turned extreme rightist and anti‑Semitic U.S. Labor Party has voluntarily sent the FBI and local police forces "intelligence" reports on left wing movements, and regularly exchanges information with one Roy Frankhouser, the self‑proclaimed Grand Dragon of the Ku Klux Klan in Pennsylvania and active member of the American Nazi Party — see the New York Times, 7 October 1979.

37. P.Lernoux: "Corrupting Colombia," Inquiry, 30 September 1979. In July 1978, DEA chief Peter Bensinger strongly recommended that Colombian authorities militarize the Guajira Peninsula, home of the marijuana/cocaine traffic. Two months later, newly elected (and current) President Julio Cesar Turbay issued a security statute empowering the military to arrest any Colombian deemed subversive, without recourse to habeas corpus or other constitutional guarantees. In April 1980, the Colombian Army was about to abandon its U.S.‑financed multi‑million dollar drug war, its failure connected, no doubt, to an estimated $110 million in protection money distributed annually by the smugglers (New York Times, 3 April 1980). Meanwhile, the military has assumed the dominant position in what was one of Latin America's few remaining democracies. U.S. military aid to Colombia — where, according to Amnesty International's April 1980 report, military personnel torture political prisoners in thirty‑three locations throughout the country, resorting to fifty identifiable techniques ‑totalled $155 million between 1946 and 1975; 6200 Colombian military personnel were trained by the U.S. in the same period (N. Chomsky and E.S. Herman: The Washington Connection and Third World Fascism, South End Press, 1979). U.S. military aid for 1979 was $12.7 million, the highest amount in Latin America.

38. Latin America, 19 December 1975.

39. L'Aurore, 31 May 1976; Liberation, 19 July 1976.

40. Le Nouvel Observateur, 21 May 1973; A. Lopez: L'Escadron de la Mort (Casterman, 1973); H. Bicudo: Meu Depoimento sobre o Esquadrao da Morte (1976).

41. Le Nouvel Observateur, 21 May 1973. 42. Diario, de Noticias, 7 May 1975. 43. See the foreword, footnote 52.



Written by Kris Millegan   

Allegations regarding "Butch" Merritt, Watergate, Intelligence Agencies and "Crimson Rose, " Vol. IX

By Kris Millegan

Nixon on Drugs – Part Two

Look, the problem is that this will open the whole, the whole Bay of Pigs thing …
                                                                            — Richard M. Nixon, June 23, 1972, Oval Office


The conventional wisdom is that Nixon used the “Bay of Pigs,” as a code word for the Kennedy Assassination, but it could just as well be code for “drug smuggling.” It’s an interesting crew.

The OSS gradually took over the activities that Corcoran had helped set up in China. In 1943 OSS agents based in China included Paul Helliwell, E. Howard Hunt, Mitch Werbell, Lucien Conein, John Singlaub and Ray Cline. According to an article in the Wall Street Journal, some OSS members in China were paid for their work with five-pound sacks of opium.


Again, some detail from the 1980 out-of-print book, The Great Heroin Coup – Drugs, Intelligence, & International Fascism by Henrik Kruger:



The place was Kunming in the South China province of Yunnan. The time was the end of World War II. Amid the chaos of war, opium and gold became the primary media of exchange, and cult‑like bonds were forged among a small staff of Americans and high‑ranking Chinese. Yunnan was a center of Chinese opium cultivation and Kunming was the hotbed of military operations, among them Claire Chennault's 14th Air Force and Detachment 202 of the Office of Strategic Services (OSS).

Among Detachment 202's notorious collection of special agents, one in particular – E. Howard Hunt – has needed no introduction since the Watergate break‑in. In Kunming, the spy novelist who later became a comrade of Cuban exiles and China Lobbyists befriended an equally intriguing character, the French Foreign Legionnaire turned OSS agent, Captain Lucien Conein.[1] Although not part of Detachment 202 proper, Conein frequented Kunming while awaiting parachuting over Indochina.[2]

Indochina remained Conein's base of operation after World War II, when, like Hunt, he slid over from the OSS to its successor, the CIA. He then operated throughout South and North Vietnam, Cambodia, and Burma, and became the top U.S. expert on the area‑as well as on the opium‑smuggling Corsican Mafia. He was Ambassador Henry Cabot Lodge's middle-man in the 1963 plot to overthrow South Vietnam's President Ngo Dinh Diem (who was assassinated along with his brother Ngo Dinh Nhu, the Corsicans' partner in the drug traffic). A decade later, Conein and Hunt, working for the Nixon White House Plumbers, would attempt to make it appear that the plot had been ordered by JFK. Both Conein and William Colby, mastermind of the CIA's Phoenix assassination program, were recalled to the U.S. at the start of the seventies.

After Mao Tse‑tung's rise to power in China, OSS veterans formed a number of firms that would be linked both to the CIA and to its reactionary client regimes in the Far East. With financial assistance from his friends in Asia, OSS China hand C.V. Starr gained control of several U.S. insurance companies. As brought to light during the McClellan hearings, Jimmy Hoffa awarded one of them, U.S. Life, and a smaller company, Union Casualty‑whose agents Paul and Allen Dorfman were among Hoffa's links to the underworld[3]—a Teamsters Union contract despite a lower bid from a larger, more reputable insurance firm.[4]

Starr's attorney was the powerful Washington‑based Tommy "The Cork" Corcoran. Corcoran's law partner, William Youngman, was a director of U.S. Life. Corcoran's other clients included the United Fruit Company, Chiang Kai‑shek's influential brother‑in‑law T.V. Soong, and the mysterious airline, Civil Air Transport (CAT), of which 60 percent was owned by the Taiwan regime and 40 percent by the CIA.[5] On behalf of United Fruit, Corcoran triggered a CIA plot — in which E. Howard Hunt was the agency's chief political action officer — to overthrow Guatemala's President Jacobo Arbenz in 1954.[6]

OSS China hand Willis Bird settled in Bangkok, Thailand to head an office of Sea Supply, Inc., a CIA proprietary headquartered in Miami, which furnished weapons to opium‑smuggling Nationalist Chinese (KMT) troops in Burma. One William Bird, representing CAT in Bangkok, coordinated CAT airdrops to KMT troops and ran an engineering firm that constructed short airstrips used for the collection of Laotian opimu.[7] 

Sea Supply also provided arms and aid to Phao Sriyanonda, the head of Thailand's 45,000‑man paramilitary police force and reputedly one of the most corrupt men in the history of that corruption‑ridden nation. For years his troops protected KMT opium smugglers and directed the drug trade from Thailand.[8]

When President John F. Kennedy in 1962 attempted a crackdown on the most hawkish CIA elements in Indochina, he sought the prosecution of Willis Bird, who had been charged with the bribery of an aid official in Vientiane. But Bird never returned to the U.S. to stand trial.

Upon returning to Miami, the OSS Chief of Special Intelligence and head of Detachment 202 in Kunming, Colonel Paul Helliwell, was a busy man. In Miami offices of the American Bankers Insurance Co.he functioned simultaneously as the Thai consul, an the counsel for Sea Supply as well as for insurance companies run by his former subordinate C.V. Starr.[9] American Bankers Insurance was itself a most unusual firm; one of its directors, James L. King, was also a director of the Miami National Bank through which the Lansky syndicate reportedly passed millions en route to Geneva's Swiss Exchange and Investment Bank. One of the Swiss bank's directors, Lou Poller, also sat on the board of King's Miami National Bank.[10]

Moreover, in the fifties and sixties, Thai and Nationalist Chinese capital was invested in Florida's explosive development, much of it by way of the General Development Corporation controlled by associates of Meyer Lansky.[11] It's important to note the dubious alliance of Southeast Asian power groups with those concerned with Florida and Cuba. This early mutuality of business interests is the key to all that follows, and Miami is the nerve center to which we will continually return.

The alliance was comprised of the China Lobby, OSS China hands, Cuban exiles, the Lansky syndicate, and CIA hawks pushing for all‑out involvement in Indochina and against Castro's Cuba. It coalesced between 1961 and 1963, and its members had three things in common: a right wing political outlook, an interest in Asian opium, and a thirst for political might. The last factor led to another common denominator in which the alliance invested heavily: Richard M. Nixon.

Some people effectively overlap the entire spectrum of the alliance. Among them are Howard Hunt and Tommy Corcoran, the man behind United Fruit's dirty work. United Fruit was a client of the Miami‑based Double‑Chek Corp., a CIA front that supplied planes for the Bay of Pigs invasion.[12] Corcoran was the Washington escort of General Chennault's widow Anna Chen Chennault, erstwhile head of the China Lobby, the key to Southeast Asian opium.[13]

Another key figure in the China Lobby was weapons dealer/financier William Pawley, the American cofounder of Chennault's Flying Tigers.[14] Pawley's name was the password to intrigue: OSS China, Tommy Corcoran,[15] CIA cover firms,[16] and arms shipments to KMT Chinese on Taiwan in defiance of a State Department refusal of authorization." All were either directly or indirectly connected to Pawley. He also rubbed elbows with the U.S. heroin Mafia when, in 1963, he, Santo Trafficante, Jr. and Cuban exiles took part in one of the countless boat raids on Cuba.[18]

The China Lobby's Southeast Asian connection naturally went via the Taiwan regime, which controlled the opium‑growing Chinese in the Golden Triangle and, with the CIA, owned the opium‑running CAT airlines. As Ross Y. Koen wrote in 1964:

"There is considerable evidence that a number of Nationalist Chinese officials are engaged in the illegal smuggling of narcotics into the United States with the full knowledge and connivance of the Nationalist Chinese government. The evidence indicates that several prominent Americans have participated in and profited from these transactions. It indicates further that the narcotics business has been an important factor in the activities and permutations of the China Lobby." [19]

British writer Frank Robertson went one step further in 1977:

"Taiwan is a major link in the Far East narcotics route, and a heroin producer. Much of the acetic anhydride ‑the chemical necessary for the transformation of morphine into heroin ‑smuggled into Hong Kong and Thailand, comes from this island, a dictatorship under the iron rule of the late Chiang Kai‑shek's son, Chiang Chingkuo."[20]

When the Communists routed Chiang Kai‑shek's forces in 1949, some 10,000 KMT troops fled to Southeast Asia and settled in a remote part of Burma. Heavily armed, they soon assumed control of the area and intermarried with the local population. Under General Li Mi they continued to infiltrate China proper, but each time they were repulsed. While awaiting Chiang's signal for a final, two‑front onslaught, Burma's KMT army needed a source of income. Many had grown opium in Yunnan and so the poppies, which flourished on the hillsides, became the force's cash crop.

Around 1950 the CIA became interested in the KMT troops. With General Douglas MacArthur pushing to arm them for an attack on Red China, the agency secretly flew them weapons in CAT airplanes. But when the KMT instead used the weapons against the Burmese army, Burma protested before the UN, where it was decided that 2000 KMT troops would be flown by CAT to Taiwan by 1954. Those who eventually made the trip, however, were only farmers and mountain people in KMT uniforms, and the weapons they took out were obsolete.[21] Nonetheless, with help from the Red Chinese army, Burma drove most of the KMT forces into Thailand and Laos, though many later returned. The Kuomintang and their kin now number over 50,000. Though only a fraction are soldiers, the KMT still controls hundreds of thousands of Chinese occupying the region, especially in Thailand.

The junction of Burma, Thailand, and Laos, the Golden Triangle, is the site of the bulk of the world's opium production and thereby the source of enormous fortunes for the French and later the Americans. The French held effective control over the Southeast Asian opium traffic until 1965. Between 1946 and 1955 the Mixed Airborne Commando Group (MACG) and the French Air Force managed the shipment of opium from Burma to Laos. A guerilla corps comprised mostly of Laotian Meo tribesmen and led by Colonel Roger Trinquier, MACG remained unusually independent despite its direct connections to the SDECE and Deuxieme (Second) Bureau. To finance their secret Indochina operations, these organizations turned to the smuggling of gold and opium, with MACG in charge of the latter. Large quantities of opium were shipped to French Saigon headquarters and passed on to the Corsican Mafia, who in turn smuggled the drug to Marseilles.

When the French withdrew from Indochina in 1955 after their defeat by the Vietminh, and after the CIA pushed aside the SDECE, MACG leaders communicating through CIA agent Lucien Conein offered the Americans their entire guerilla force. Against Conein's advice they refused.[22] History would cast doubt on the wisdom of that decision.

In 1955 CIA agent General Edward Lansdale began a war to liquidate the Corsican supply network. While Lansdale was cracking down on the French infrastructure, his employer the CIA was running proprietaries, like Sea Supply and CAT, that worked hand‑in‑hand with the opium‑smuggling Nationalist Chinese of the Golden Triangle, and with the corrupt Thai border police.[23]

The Lansdale/ Corsican vendetta lasted several years, during which many attempts were made on Lansdale's life. Oddly enough, his principal informant on Corsican drug routes and connections was the former French Foreign Legionnaire, Lucien Conein, then of the CIA. Conein knew just about every opium field, smuggler, trail, airstrip, and Corsican in Southeast Asia. He spent his free time with the Corsicans, who considered him one of their own. Apparently they never realized it was he who was turning them in.[24]

When Lansdale returned from Vietnam in the late fifties, the Corsicans recouped some of their losses, chartering aging aircraft to establish Air Opium, which functioned until around 1965. That year, the Corsicans' nemesis Lansdale returned to Vietnam as an advisor to Amabassador[sic] Lodge. There was also an upheaval in the narcotics traffic, and perhaps the two were connected. CIA‑backed South Vietnamese and Laotian generals began taking over the opium traffic — and as they did so, increasing amounts of morphine and low‑quality heroin began showing up on the Saigon market.

The first heroin refineries sprang up in Laos under the control of General Ouane Rattikone. President Ky in Saigon was initially in charge of smuggling from the Laotian refineries to the South Vietnamese; and Lansdale's office, it is to be remembered, was working closely with Ky. Lansdale himself was one of Ky's heartiest supporters, and Conein went along with whatever Lansdale said.[25]

One result of the smuggling takeover by the generals was the end of the Corsicans' Air Opium. The KMT Chinese and Meo tribesmen who cultivated raw opium either transported it themselves to the refineries or had it flown there by the CIA via CAT and its successor, Air America, another agency proprietary. Though the Corsicans still sent drugs to Marseilles, the price was becoming prohibitive, since they were forced to buy opium and morphine in Saigon and Vientiane rather than pick up the opium for peanuts in the mountains.

In 1967 a three‑sided opium war broke out in Laos between a Burmese Shan State warlord, KMT Chinese and General Rattikone's Laotian army. Rattikone emerged victorious, capturing the opium shipment with the help of U.S.‑supplied aircraft. The KMT, for its part, managed to reassert its dominance over the warlord. The smuggling picture was becoming simplified, with Southeast Asian opium divided among fewer hands, and most of the Corsicans out of the way.

General Lansdale returned to the U.S. in 1967, leaving Conein in Vietnam. The next year Conein greeted a new boss, William Colby. Since 1962 Colby had run the agency's special division for covert operations in Southeast Asia, where his responsibilities included the " secret" CIA war in Laos with its 30,000‑man Meo army. He shared that responsibility with the U.S. amabassador[sic] in Laos, William H. Sullivan, who would later preside over the Tehran embassy during the fall of the Shah.

Many of the agents who ran the CIA's war in Laos had earlier trained Cuban exiles for the Bay of Pigs invasion, and afterward had taken part in the agency's continued secret operations against Cuba.[26] Since exiles were furnished by the Trafficante mob,[27] intelligence agents had intermingled with representatives of America's number one narcotics organization. The same agents would now become involved with the extensive opium smuggling from Meo tribesmen camps to Vientiane.[28]

In 1967 Colby devised a plan of terror for the "pacification" of Vietnam. Operation Phoenix organized the torture and murder of any Vietnamese suspected of the slightest association with Vietcong. Just as Lansdale was travelling home, Colby was sent to South Vietnam to put his brainchild to work. According to Colby's own testimony before a Senate committee, 20,857 Vietcong were murdered in Phoenix's first two years. The figure of the South Vietnamese government for the same period was over 40, 000.[29[

It was during Colby's tour in Vietnam that the heroin turned out by General Ouane Rattikone's labs appeared in quantity, and with unusually high quality. The great heroin wave brought on a GI addiction epidemic in 1970; Congressional reports indicated that some 22 percent of all U.S. soldiers sampled the drugs and 15 percent became hooked.[30]

Former Air Marshal, then Vice President, Nguyen Cao Ky (now alive and well in the United States) and his underlings still controlled most of the traffic. President Nguyen Van Thieu and his faction, comprised mostly of army and navy officers, were also in it up to their necks. According to NBC's Saigon correspondent, Thieu's closest advisor, General Dang Van Quang, was the man most responsible for the monkey on the U.S. Army's back. But the U.S. Saigon embassy, where Colby was second in command, found no substance to the accusations, Ky's record notwithstanding: Ky had been removed from U.S. Operation Haylift, which flew commando units into Laos, for loading his aircraft with opium on the return trips.

In the face of skyrocketing GI heroin abuse, the Army Criminal Investigation Division (CID) looked into General Ngo Dzu's complicity in the heroin traffic and filed a lengthy report at the U.S. embassy.[31] The embassy ignored the report and chose not to forward it to Washington.[32] The BNDD also investigated the roots of the heroin epidemic, but was impeded in its work by the CIA and U.S. embassy. In 1971, however, a string of heroin labs were uncovered in Thailand, and a number were closed down.

In 1971, furthermore, Colby and Conein were recalled to the United States. Colby became the Deputy Director of Operations, the man in charge of the CIA's covert operations. More remarkable, though, was Conein's homecoming after twenty‑four years of periodic service to the CIA in Indochina, raising the question of why the U.S.'s foremost expert on Indochina had been brought back to Washington just as the crucial phase of Vietnamization was about to begin.[33] Ironically, Corsican friends still around for Conein's departure presented him with a farewell gold medallion bearing the seal of the Corsican Union.

At the war's cataclysmic end, the CIA admitted that "certain elements in the organization" had been involved in opium smuggling and that the illegal activities of U.S. allies had been overlooked to retain their loyalties. In reality, the agency had been forced to confess because of its inability to refute the tales of returning GIs, among them that of Green Beret Paul Withers, a recipient of nine Purple Hearts, the Distinguished Service Cross and Silver and Bronze Stars:

"After completing basic training at Fort Dix in the fall of 1965 [Withers] was sent to Nha Trang, South Vietnam. Although he was ostensibly stationed there, he was placed on 'loan' to the CIA in January 1966 and sent to Pak Seng, Laos. Before going there he and his companions were stripped of their uniforms and all American credentials. They were issued Czechoslovakian guns and Korean uniforms. Paul even signed blank sheets of paper at the bottom and the CIA later typed out letters and sent them to his parents and wife. All this was done to hide the fact that there were American troops operating in Laos.

"The mission in Laos was to make friends with the Meo people and organize and train them to fight the Pathet Lao. One of the main tasks was to buy up the entire local crop of opium. About twice a week an Air America plane would arrive with supplies and kilo bags of opium which were loaded on the plane. Each bag was marked with the symbol of the tribe."[34]

The CIA, reportedly, did not support any form of smuggling after 1968. Del Rosario, a former CIA operative, had something to say about that:

"In 19711 was an operations assistant for Continental Air Service, which flew for the CIA in Laos. The company's transport planes shipped large quantities of rice. However, when the freight invoice was marked 'Diverse' I knew it was opium. As a rule an office telephone with a special number would ring and a voice would say 'The customer here'‑that was the code designation for the CIA agents who had hired us. 'Keep an eye on the planes from Ban Houai Sai. We're sending some goods and someone's going to take care of it. Nobody's allowed to touch anything, and nothing can be unloaded,' was a typical message. These shipments were always top priority. Sometimes the opium was unloaded in Vientiane and stored in Air America depots. At other times it went on to Bangkok or Saigon.[35]

Even while the CIA trafficked in opium, President Nixon ranted on TV against drug abuse and lauded the crackdown against French smuggling networks.

pps. 129-139


1. E.H. Hunt: Undercover (Berkeley‑Putnam, 1974).

2. Another of Conein's OSS sidekicks, Mitchell WerBell III, was years later indicted in a major drug conspiracy case (T. Dunkin: "The Great Pot Plot," Soldier of Fortune, Vol. 2, No. 1, 1977), and now runs an antiterrorist training school in Georgia (T. Dunkin: "WerBell's Cobray School," Soldier of Fortune, Vol. 5, No. 1, 1980).

3. D. Moldea: The Hoffa Wars (Charter Books, 1978).

4. U.S. Congress, Senate, Select Committee on Improper Activities in the Labor or Management Field, Hearings, 85th Cong., 2nd Sess. (cited in P.D. Scott: The War Conspiracy, Bobbs‑Merrill, 1972).

5. CAT, which became Air America, was also identical with the "CATCL" that emerged from Claire Chennault's Flying Tigers.

6. D. Wise and T.B. Ross: The Invisible Government (Random House, 1964); Hunt, op. cit.

7. Scott, op. cit.

8. F. Robertson: Triangle of Death (Routledge and Keagen Paul, 1977); A. McCoy: The Politics of Heroin in Southeast Asia (Harper & Row, 1972).

9. Scott, op. cit.

10. New York Times, 1 December 1969; H. Messick: Lansky (Berkeley, 1971). 11. Carl 0. Hoffmann, the former OSS agent and general counsel of the Thai king in New York in 1945‑50, later became the chairman of Lansky associates' First Florida Resource Corp.

12. L. Gonzalez‑Mata: Cygne (Grasset, 1976).

13. R.Y.Koen: The China Lobby in American Politics (Harper& Row, 1974). 14. Pawley, the ultraconservative former Pan Am executive and Assistant Secretary of both State and Defense, set up the Flying Tigers under a secret order of President Franklin D. Roosevelt exempting him from U.S. neutrality provisions; see A. Chan Chennault: Chennault's Flying Tigers (Eriksson, 1963).

15. Corcoran assisted in the establishment of the Flying Tigers and later Civil Air Transport; see Scott, op. cit.

16. Lindsey Hopkins, Jr., whose sizable investments included Miami Beach hotels, was an officer of the CIA proprietary, Zenith Technical Enterprises of Bay of Pigs note. He was also an officer of the Sperry Corp., through whose subsidiary, the Intercontinental Corp., Pawley helped found the Flying Tigers in 1941. Pawley was Intercontinental's president. See Scott, op. cit.

17. U.S. Congress, Senate, Committee on Judiciary, Communist Threat to the United States through the Caribbean, Hearings, 86th Cong., 2nd Sess. (cited in Scott, op. cit.).

18. See chapter fifteen; it has also been revealed that a prominent Chinese American, Dr. Margaret Chung of San Francisco, who was a major supporter of the Flying Tigers, trafficked in narcotics together with the Syndicate; see P.D. Scott: "Opium and Empire," Bulletin of Concerned Asian Scholars, September 1973.

19. Koen, op. cit. 20. Robertson, op. cit.. After a one‑year suspension, the U.S. State Department recently approved the sale of $280 million in military weaponry to the repressive Taiwan regime (New York Times, 20 January 1980), the same regime whose disdain for human rights was most recently expressed by the preparation of cases of sedition against sixty‑five opposition demonstrators (New York Times, 24 January 1980). The CIA's Taiwan station chief in the late fifties and early sixties, when the unholy alliances were forged, was Ray S. Cline. Closely associated with the China Lobby, Cline became famous for his drunken binges with Chiang Ching‑kuo, currently the president of Taiwan (see V. Marchetti and J.D. Marks: CIA and Cult of Intelligence, Jonathan Cape, 1974). A CIA hawk, Cline also helped a gigantic Bay of Pigs‑style invasion of the Chinese mainland which was rejected by President Kennedy. Cline is currently the "director of world power studies" at Georgetown's Center for Strategic and International Studies (CSIS), which, according to writer Fred Landis ("Georgetown's Ivory Tower for Spooks," Inquiry, 30 September 1979), "is rapidly becoming the New Right's most sophisticated propaganda mill." In testimony before the House Select Committee on Intelligence, Cline defended CIA manipulation of the press, saying "You know that first amendment is only an amendment."

21. McCoy, op. cit.

22. D. Warner: The Last Confucian (Angus & Robertson, 1964). 23. McCoy, op. cit.

24. Conein told writer McCoy: "The Corsicans are smarter, tougher and better organized than the Sicilians. They are absolutely ruthless and are the equal of anything we know about the Sicilians, but they hide their internal fighting better." (McCoy, op. cit.).

25. McCoy, op. cit.

26. T. Branch and G. Crile III: "The Kennedy Vendetta," Harper's, August 1975.

27. U.S. Congress, Senate, Select Committee to Study Governmental Operations with respect to Intelligence Activities, Alleged Assassination Plots Involving Foreign Leaders, Interim Report, 94th Cong., 1st Sess. Senate Report No. 94‑463, 1975.

28. C. Lamour and M.R. Lamberti: Les Grandes Maneuvres de l'0pium (Editions du Seuil, 1972); McCoy, op. cit.; Committee of Concerned Asian Scholars: The Opium Rail (New England Free Press, 1971).

29. Marchetti and Marks, op. cit.

30. Congressman M.F. Murphy and R.H. Steele: The World Heroin Problem (U.S. Govt. Printing Office, 1971).

31. Like Nguyen Cao Ky, Ngo Dzu came to the U.S. as a refugee after the final debacle in South Vietnam. Though accused by Rep. Steele of responsibility for the addiction of thousands of GIs to heroin, Dzu went about as a free man until his 13 February 1977 death in Sacramento of apparent heart failure.

32. McCoy, op. cit.

33. Conein's summons home coincided with Howard Hunt's recruitment by the White House and the creation of the special narcotics and Plumbers groups. 34. Committee of Concerned Asian Scholars, op. cit. 35. Lamour and Lamberti, op. cit. (quote retranslated from the French).




Meyer Lansky, the Syndicate's financial wizard and its chairman from around 1947, began building his Cuban empire in the early forties. When free elections chased his close friend and dictator Fulgencio Batista from office in 1944, Lansky also left the island, entrusting his empire to the Trafficante family headed by Santo, Sr. Lansky and Batista settled in Hollywood, Florida, just north of Miami. Before long, Lansky was running an illegal casino empire on the coast, and in 1947 he eliminated Bugsy Siegel and moved into Las Vegas.

All the while Lansky expanded the narcotics trade founded by Lucky Luciano. The older Mafia dons deemed the trade taboo, so Lansky's wing of the Syndicate cornered the market, with Trafficante's eldest son, Santo, Jr., overseeing the heroin traffic.[1]

When Florida's illegal casinos were shut down in 1950, Lansky promoted Batista's return to power in Cuba. The drive bore fruit in 1952. With Trafficante, Sr.'s death in 1954, Santo, Jr. became Lansky's right‑hand man and manager of his Cuban interests. Until then, he had managed the Sans Souci Casino, a base for running Havana's tourist trade and keeping tabs on heroin shipments from Marseilles to New York via Florida and Cuba.[2]

Trafficante, Jr. has proven more talented than his father. Extraordinarily intelligent and energetic, he has handled the most acute crises with detached calm. Luciano characterized him as ". . a guy who always managed to hug the background, but he is rough and reliable. In fact, he's one of the few guys in the whole country that Meyer Lansky would never tangle with."[3]

In no time, Trafficante, Jr. ingratiated himself with dictator Batista, while remaining loyal to Lansky, who appointed him manager of his own Florida interests in addition to those in Cuba. Lansky needed to spend increasing amounts of time in New York, between travels to Las Vegas, Rome, Marseilles, Beirut, and Geneva.

Many envied Lansky's ever‑increasing power and wealth, among them Murder, Inc. chairman of the board Albert Anastasia. In 1957 the latter tried enlisting Trafficante's aid in removing Lansky from the Havana scene. It was one of Anastasia's last moves. Trafficante arranged a "friendly" meeting in New York's Sheraton Hotel. An hour after Trafficante had checked out, Anastasia was murdered in the hotel's barber shop, shaving cream still on his face.[4]

According to Peter Dale Scott, "certain U.S. business interests collaborated with the narcotics‑linked American Mafia in Cuba‑as they did with similar networks in China and later in Vietnam ‑for the Mafia supplied the necessary local intelligence, cash and muscle against the threat of communist takeover.[5] As Scott wrote those words in 1973, Cuban‑Americans recruited by the CIA were suspected by federal and city authorities to be "involved in everything from narcotics to extortion rackets and bombings."[6] The Church committee and other Senate and law enforcement reports would confirm these allegations.

Again we observe the Cuba/ Southeast Asia/ CIA triangle, and it's no secret who managed the Cuban side. There Trafficante, Jr. hired the fast‑learning natives, while dictator Batista's men made the empire safe for organized crime, often appearing more loyal to Trafficante than to Batista himself. In return the Cubans learned the business.

With Fidel Castro's 1 January 1959 ouster of Batista, Lansky and Trafficante were in trouble. Though they were expelled from their Cuban kingdom, nearly a year elapsed before the Syndicate departed and the casinos were closed. Along with 'Trafficante and Lansky, half a million Cubans left the island in the years following Castro's takeover. Some 100,000 settled in the New York City area, especially Manhattan's Washington Heights and New Jersey's Hudson County. Another 100,000 headed to Spain, others to Latin America, and a quarter of a million made their new home in Florida, the site of Trafficante's new headquarters.

Out of the Trafficante‑trained corps of Cuban officers, security staffers and politicians, a Cuban Mafia emerged under the mobster's control. It specialized in narcotics, first Latin American cocaine, then Marseilles heroin. With his Cubans Trafficante also grabbed control of La Bolita, the numbers game that took Florida by storm and became a Syndicate gold mine.[7]

Besides the Cubans, who comprised the main wing of his organization, Trafficante also worked closely with the non‑Italian Harlan Blackburn mob, a break with Mafia tradition.[8] But the core of the Trafficante family remained Italian, and the Italians also dealt in drugs. In 1960 his man Benedetto "Beni the Cringe" Indiviglio negotiated the opening of a narcotics route with Jacques I'Americain, the representative of Corsican boss Joseph Orsini.[9] Benedetto and his brothers Romano, Arnold, Charles and Frederick eventually ran Trafficante's Montreal‑bound smuggling network, and were later joined by the notorious New York wholesaler Louis Cirillo.[10]

Trafficante settled in Tampa, but continued to run some of his activities from Jimmy Hoffa's Teamster Local 320 in Miami. Traffiicante and David Yaras of Sam Giancana's Chicago mob were instrumental in founding Local 320, which, according to the McClellan hearings, was a front for Syndicate narcotics activities.[11]

After losing his Havana paradise, far‑sighted Meyer Lansky used straw men to buy up much of Grand Bahama Island and erected a new gambling center around the city of Nassau. But though Lansky and Trafficante each survived in style, neither they nor the Cuban exiles relinquished hope of a return to Cuba. Moreover, they were not alone in dreaming of overthrowing Castro. The CIA in particular let its imagination run wild to this end. Its covert operations expert, General Edward Lansdale, seriously planned to send a submarine to the shore outside Havana, where it would create an inferno of light. At the same time, Cuba‑based agents would warn the religious natives of the second coming of Christ and the Savior's distaste for Fidel Castro. However, "Elimination by Illumination" was shelved in favor of less fantastic suggestions for Castro's assassination. The latter brought together the CIA, Cuban exiles, and the Syndicate in the person of Santo Trafficante.

In 1960 the CIA asked its contract agent Robert Maheu to contact the mobster John Roselli. Roselli introduced Maheu to Trafficante and Sam Giancana, the Chicago capo, and the strange bedfellows arranged an attempt on the life of Castro.[12] The agency had previously stationed an agent on Cuba who was to flash the green light when assassination opportunities arose. He was Frank Angelo Fiorini, a one‑time smuggler of weapons to Castro's revolutionary army, to whom Castro had entrusted the liquidation of the gambling casinos.[13]

Through the latter assignment Fiorini had made the acquaintance of Trafficante.

In February 1961 Maheu, `Trafficante and Roselli met at Miami's Fountainebleu Hotel. There Maheu gave the hoods untraceable poison capsules for delivery to a Cuban exile connected with the Trafficante mob.[14] 0ther Cubans were to smuggle them to the island and poison Castro; but the attempt failed. Trafficante engineered more attempts, including one in September 1962,[15] and his organization also provided Cubans for the Bay of Pigs invasion.[16]

Never before had there existed a more remarkable, fanatical group of conspirators than that assembled to create, finance, and train the Bay of Pigs invasion force. The top CIA figures were Lansdale protege Napoleon Valeriano, the mysterious Frank Bender, and E. Howard Hunt, who was himself involved in at least one of the attempts on Fidel Castro's life. They were supported by a small army of CIA operatives from four of its Miami cover firms.[17]

Runner‑up to Hunt for the Most Intriguing CIA Conspirator award is Bender, a German refugee whose true identity remains a matter of speculation. Some contend that he had been an agent of the West German Gehlen espionage network under the name Drecher; others contend it was Droller.[18] The former security chief for Dominican Republic dictator Rafael Trujillo claims that Bender was in fact one Fritz Swend, a Gehlen collaborator and leader of ex‑Nazis in Peru. Prior to the Bay of Pigs invasion Swend was allegedly the CIA's man in the Dominican Republic as Don Frederico. There he purportedly planned the invasion along with mobster Frank Costello and exCuban dictator Batista.[19]

The invasion's moral and financial supporters included many leading China Lobbyists. Most important was the multi‑millionaire behind Claire Chennault's Flying Tigers, William Pawley.[20] Pawley had been involved in the CIA's 1954 overthrow of Guatemala's democratically elected Arbenz regime. Like Lansky and Trafficante, Pawley had had a big stake in Cuba. Prior to Castro's takeover he had owned the Havana bus system and sugar refineries. He met with President Eisenhower several times in 1959 to persuade the president to assist Cuban exiles in overthrowing Castro. Pawley then helped the CIA recruit anti‑Castro Cubans.[21]

The key Cuban exile conspirators in the Bay of Pigs operation and the ensuing attacks on Cuba and Castro included Manuel Artime, Orlando Bosch, Felipe de Diego, and Rolando Martinez ‑the first a close ‑friend of Howard Hunt's, the last two future Watergate burglars. The name of Bosch was to become synonymous with terrorism.

Distinguishing the noncriminal element among the Bay of Pigs' anti‑Castro Cubans is no easy matter, since so many emerged from Trafficante's Cuban Mafia. According to agents of the BNDD, nearly 10 percent of the 1500‑man force had been or eventually were arrested for narcotics violations.[22] Its recruiters included Syndicate gangsters like Richard Cain, the former Chicago policeman who became a lieutenant for Sam Giancana.

The Dominican Republic, a focal point in the invasion scheme, also became a transit point for Trafficante's narcotics traffic. Furthermore, the CIA, according to agents of the BNDD, helped organize the drug route by providing IDs and speedboats to former Batista officers in the Dominican Republic in charge of narcotics shipments to Florida.[23]

It is of paramount importance to note the close CIA cooperation with Trafficante's Cuban Mafia, whose overriding source of income was the smuggling of drugs.

One of Trafficante's personal CIA contacts for the Bay of Pigs was Frank Fiorini, Castro's liquidator of Mob casinos, who now preferred the name Frank Sturgis.[24] In late 1960 Sturgis ran the Miami‑based International Anti‑Communist Brigade (IACB), said to be financed by the Syndicate.[25] According to Richard Whattley, a brigade member hired for the invasion, "Trafficante would order Sturgis to move his men and he'd do it. Our ultimate conclusion was that Trafficante was our backer. He was our money man."[26]

Another detail from Sturgis's past is especially interesting in light of Frank Bender's alleged ties to the Gehlen organization. For a period in the early fifties Sturgis was involved in espionage activities in Berlin, serving as a courier between various nations' intelligence agencies, and was thereby inevitably in contact with the Gehlen network.[27]

The Bay of Pigs invasion was, of course, a fiasco. But that hardly stopped the CIA, the Syndicate, or their Cuban exile troops. Wheels were soon turning on new assassination attempts under CIA agent William Harvey, who again collaborated with the underworld. Within months, the Miami CIA station JM/Wave was again in full swing. It sponsored a series of hit‑and‑run attacks on strategic Cuban targets that spanned three years and involved greater manpower and expenditures than the Bay of Pigs invasion itself.

To head the JM/Wave station, the CIA chose one of its up‑and‑coming agents, the thirty‑four year old Theodore Shackley, who came direct from Berlin. His closest Cuban exile associates were Joaquin Sangenis and Rolando (Watergate burglary) Martinez.[28] Some 300 agents and 4‑6000 Cuban exile operatives took part in the actions of JM/Wave. As later revealed, one of its last operations was closed down because one of its aircraft was caught smuggling narcotics into the United States.[29]

Shackley is another contender for the Most Intriguing CIA Conspirator award. After years of collaboration with Trafficante organization Cubans, he and part of his Miami staff were transferred to Laos,[30] where he joined Lucien Conein.[31] There they helped organize the CIA's secret Meo tribesmen army, the second such army drummed up by Shackley that was up to its ears in the drug traffic.

Vientiane, where Shackley was the station chief, became the new center of the heroin trade. Later he ran the station in Saigon, where the traffic flowed under the profiteering administration of Premier Nguyen Cao Ky. When the agency prepared its coup against the Chilean President Salvador Allende, Shackley was its chief of covert operations in the Western Hemisphere. When William Colby became the director of the CIA in 1973, Shackley took over his job as chief of covert operations in the Far East. Eventually he was booted out of the agency as part of the shakeup ordered by its current director Stansfield Turner.[32]

In the JM/Wave period a great expansion in China Lobby‑Traffiicante‑Cuban exile‑CIA connections occurred. William Pawley financed a mysterious summer 1963 boat raid against Cuba in his own yacht, the Flying Tiger II. Besides Pawley himself, the crew included mafioso John Martino, who had operated roulette wheels in one of Trafficante's Havana casinos; CIA agents code‑named Rip, Mike, and Ken; the ubiquitous Rolando Martinez; and a dozen other Cuban exiles led by Eddie Bayo and Eduardo Perez, many of whom eventually disappeared mysteriously.[33] Loren Hall, another former Trafficante casino employee, claimed that both his boss and Sam Giancana had helped plan the raid.[34] CIaire Boothe Luce, a queenpin of the China Lobby, testified during Senate hearings on the CIA that she had financed an exile gunboat raid on Cuba after JFK had ordered the agency to halt such raids.

I will not wander deeply into the quagmire of circumstances surrounding the murder of President John F. Kennedy. However, it is worth repeating a few lines from the final report of the House Select Committee on Assassinations: "The Committee's extensive investigation led to the conclusion that the most likely family bosses of organized crime to have participated in such a unilateral assassination plan were Carlos Marcello and Santo Trafficante."[35]

Of the many connections between Trafficante and Dallas the most important are his association with Jack Ruby, who visited him in a Havana prison in 1959; his statement to Cuban exile financier Jose Aleman that Kennedy "is going to be hit"; and his close association with fellow Mafia capo Carlos Marcello. The Cuban exiles, drug racketeers, and the CIA had no shortage of anti‑Kennedy motives, which were all the more intensified as the three forces gradually welded together.

The anti‑Cuba actions continued well into 1965, at which time a crucial three‑year turnabout for the Lansky Syndicate began. Its money had been invested in the unsuccessful attempts at toppling Castro and in its new casino complex in Nassau, which was threatened by local antigambling forces. So when Southeast Asia began emerging as a new heroin export center, Lansky sent his financial expert John Pullman to check out the opportunities for investment. Close on his heels went Frank Furci, the son of a Trafficante lieutenant.[36]

From 1968 on, Trafficante's Cubans were in effective control of the traffic in heroin and cocaine throughout the United States.[37] The Florida capo's only gangland partner of significance was the Cotroni family in Montreal.

Trafficante carried out his business in a cool and collected manner. Never out of line with the national Syndicate, he enjoyed relative anonymity while other, less prominent gangsters wrote their names in history with blood. His organization was so airtight that when narcotics investigators finally realized how big a fish he was, they had to admit he was untouchable. The BNDD tried nabbing him in its 1969‑70 Operation Eagle, then the most extensive action ever directed against a single narcotics network. The Bureau arrested over 120 traffickers, wholesalers, and pushers, but made no real dent. Within days, well‑trained Cubans moved into the vacated slots.[38]

To the BNDD's surprise, a very large number of those arrested in Operation Eagle were CIA‑trained veterans of the Bay of Pigs and Operation 40. Among them were Juan Cesar Restoy, a former Cuban senator under Batista, Allen Eric Rudd‑Marrero, a pilot, and Mario Escandar.[39] Their fates were most unusual. Escandar and Restoy, alleged leaders of the narcotics network, were arrested in June 1970 but fled from Miami City Jail in August. Escandar turned himself in, but was released soon afterward when it was established that Attorney General John Mitchell had neglected to sign the authorization for the wiretap that incriminated Escandar. He returned to narcotics and was arrested in 1978 for kidnapping, a crime punishable by life, but for which he got only six months.[40] As this book went to press the FBI was investigating Escandar's relationship with the Dade County (Miami) police force.

Juan Restoy, on the other hand, turned to blackmail. He threatened to expose a close friend of President Nixon's as a narcotics trafficker, if not given his freedom and $350,000.[41] Restoy was shot and killed by narcotics agents, as was Rudd‑Marrero.

In late 1970, in the wake of Operation Eagle, Bay of Pigs veteran Guillermo Hernandez‑Cartaya set up the World Finance Corporation (WFC), a large company alleged to be a conduit for Traffiicante investments and for the income from his narcotics activities.[42] Duney PerezAlamo, a CIA‑trained explosives expert involved with several Cuban exile terrorist groups, was a building manager for the WFC. Juan Romanach, a close Trafficante associate, was a WFC bank director.[43] As Hank Messick put it:

"Escandar, of course, was a friend of Hernandez‑Cartaya, who was a friend of Dick Fincher, who was a friend of Bebe Rebozo, who was a friend of Richard Nixon, who once told John Dean he could get a million dollars in cash.[44]

In 1968 Trafficante himself went on an extended business trip to the Far East, beginning in Hong Kong, where he had located his emissary Frank Furci .[45] After a slow 1965‑66 start, Furci had made great headway. Through his own Maradem, Ltd. he had cornered the market on Saigon's night spots catering to GIs.[46] He even ran officer and soldier mess halls, and he had set up a chain of heroin labs in Hong Kong to serve the GI market.

From Hong Kong, Trafficante journeyed to Saigon, registering at the Continental Palace hotel owned by the Corsican Franchini family. His last stop was in Singapore, where he contacted a branch of the splintered Chinese Mafia.

Several doors had to be opened to gain access to the opium treasure. The first led to the CIA‑controlled&iwan regime, the second to the Golden Triangle's KMT Chinese and Laotian Meo tribesmen. The latter door had already been opened by the CIA. Still another led to the Triads (Chinese gangster organizations) in Hong Kong. Traffiicante opened that door with the help of Furci, who gave him access to Southeast Asia's overseas Chinese. There was no way around the Nationalist Chinese suppliers and middle men. The world had long been told that the narcotics came from Red China, but the facts belied that propaganda claim.[47]

Trafficante liked what he saw in his Southeast Asian tour. With enough trained chemists, his Mob could be supplied with heroin at a fraction of what it was then paying out to the Corsicans. But first the smuggling networks had to be worked out and the Corsicans had to be eliminated.

So Santo Traffiicante began his war against the Corsicans.[48] His major foe, Auguste Ricord in Paraguay, wasn't about to roll over and die. Ricord got hold of his own Hong Kong connection, Ng Sik‑ho,[49] also known as "Limpy Ho," a major Nationalist Chinese heroin smuggler well‑connected to the Taiwan regime.[50] After Ricord's emissaries had travelled twice in 1970 to Japan, where they met with Mr. Ho,[51] heroin shipments began going to Paraguay via, among other transit points, Chile. 62 When in 1972 Ricord was extradited to the U.S., Limpy Ho tried establishing his own smuggling route to the U.S. via Vancouver. But that failed when two of his lieutenants, Sammy Cho and Chang Yu Ching, were arrested in the U.S. with fifty pounds of pure heroin.

By early 1970, Southeast Asian‑produced heroin was ready to be tested on GI guinea pigs. Meyer Lansky, facing charges of business illegalities, turned over control to Trafficante and fled to Israel. On July 4 Lansky narcotics associates reportedly made their investment plans for Southeast Asia at a twelve‑day meeting with representatives of several Mafia families at the Hotel Sole in Palermo, Sicily.[53]

Weeks later the Corsican Mafia contemplated counter‑moves in a meeting at Philippe Franchini's suite in Saigon's Continental Palace Hotel. Turkish opium production was already waning and could no longer be relied upon. Unrest in the Middle East was destabilizing the production of morphine base. The Corsicans had to do something to regain control over their longtime Southeast Asian domain, a task made all but impossible by the U.S. presence. But the Corsicans still had large stocks of morphine, their Marseilles labs, and a smoothly functioning smuggling network. Trafficante and company could agree that if the Corsicans were to be neutralized, it had to be done totally and effectively. That was a job for President Nixon and his White House staff, the BNDD/White House Death Squad, and the Central Intelligence Agency.

pps. 141-152


1. Santo Trafficante, Jr.'s first important appearance in his role as overseer of the heroin traffic might have been at a 1947 summit in Havana reportedly attended by Auguste Ricord, alias Lucien Dargelles, the French Nazi collaborator who became Latin America's narcotics czar; see V. Alexandrov: La Mafia des SS (Stock, 1978).

2. A.McCoy: The Politics of Heroin in Southeast Asia (Harper& Row, 1972).

3. M. Gosch and R. Hammer: The Last Testament of Lucky Luciano (Little, Brown & Co., 1974).

4. Lansky was not then entirely sure of T~afficante's loyalty. He had the latter swear a "holy" oath, witnessed by Vincent Alo: "With an ancient Spanish dagger — none from Sicily was available — Trafficante cut his left wrist, allowed the blood to flow, and wet his right hand in the crimson stream. Then he held up the bloody hand: 'So long as the blood flows in my body,' he intoned solemnly, 'do 1, Santo Trafficante, swear allegiance to the will of Meyer Lansky and the organization he represents. If I violate this oath, may I burn in Hell forever.'" — H. Messick: Lansky (Berkeley, 1971).

5. P.D. Scott: "From Dallas to Watergate," Ramparts, November 1973.

6. New York Times, 3 June 1973.

7. E. Reid: The Grim Reapers (Bantam, 1970).

8. Ibid.

9. P. Galante and L. Sapin: The Marseilles Mafia (W.H. Allen, 1979).

10. The Newsday Staff: The Heroin Trail (Souvenir Press, 1974).

11. D. Moldea: The Hoffa Wars (Charter Books, 1978).

12. U.S. Congress, Senate, Select Committee to Study Governmental Operations with respect to Intelligence Activities, Alleged Assassination Plots Involving Foreign Leaders, Interim Report, 94th Cong., 1st Sess., Senate Report No. 94‑463, 1975. (Henceforth referred to as Assassination Report).

13. P. Meskill: "Mannen som Ville Myrde Fidel Castro," Vi Menn, 1976.

14. Assassination Report, op. cit.

15. Ibid.

16. Ibid.

17. D. Wise and T.B. Ross: The Invisible Government (Random House, 1964);

P.D. Scott: The War Conspiracy (Bobbs‑Merrill, 1972).

18. The name Drecher appears in T. Szulc: Compulsive Spy (Viking, 1974); Droller is used in P. Wyden: The Bay of Pigs (Simon & Schuster, 1979).

19. L. Gonzalez‑Mata: Cygne (Grasset, 1976). According to this source (the author was the chief of security for the Dominican Republic's dictator, Rafael Trujillo), Howard Hunt went to the Dominican Republic with the mobster John Roselli in March 1961.

20. Pawley eventually built five large airplane factories around the world. It is also likely that he was involved in the CIA's Double Chek Corp. in Miami, as he had similarly been in the Flying Tigers. The CIA's air proprietaries are said to stick together. When in 1958, CIA pilot Allen Pope was shot down and taken prisoner in Indonesia, he was flying for CAT. When he was released in 1962 he began flying for Southern Air Transport, another agency proprietary, which operated as late as 1973 out of offices in Miami and Taiwan. Southern's attorney in 1962 was Alex E. Carlson, who a year before had represented Double Chek when it furnished pilots for the Bay of Pigs invasion; see V. Marchetti and J.D. Marks: CIA and the Cult of Intelligence (Jonathan Cape, 1974). On 23 March 1980, just as Iran's revolutionary government was about to request that Panama extradite Shah Reza Palevi, the ex‑dictator who had been installed on his throne in 1953 by a CIA coup, he was flown off to Cairo on an Evergreen International Airlines charter. As reported by Ben Bradlee of the Boston Globe, (20 April 1980), in 1975 Evergreen had assumed control over Intermountain Aviation, Inc., a CIA proprietary. George Deele, Jr., a paid consultant for Evergreen, controlled the CIA's worldwide network of secret airlines for nearly two decades.

21. M. Acoca and R.K. Brown: "The Bayo‑Pawley Affair," Soldier of Fortune, Vol. 1, No. 2, 1976.

22. The Newsday Staff, op. cit.

23. H. Kohn: "Strange Bedfellows," Rolling Stone, 20 May 1976.

24. The main character in Howard Hunt's 1949 spy novel, Bimini Run, was "Hank Sturgis."

25 . H. Tanner: Counter‑Revolutionary Agent (G.T. Foules, 1972).

26. Kohn, op. cit.

27. Meskill, op. cit.

28. Shackley was also indirectly responsible for Martinez's participation in the 17 June 1972 Watergate breakin; see T. Branch and G. Crile III: The Kennedy Vendetta," Harper's, August 1975.

29. New York Times, 4 January 1975.

30. Branch and Crile, op. cit.

31. J. Hougan: Spooks (William Morrow, 1978).

32. Shackley might also have been responsible for the CIA's tapping of all telephone converstions to and from Latin America in the first half of 1973 "in connection with narcotics operations" (see Newsweek, 23 June 1975). According to Branch and Crile, op. cit., Shackley, as chief of the CIA's Western Hemisphere Division of Clandestine Services, "had overall responsibility for the agency's efforts to overthrow the Allende regime in Chile."

In a recent article in which he refers to Shackley as one of "the CIA's most esteemed officers," journalist Michael Ledeen claims that Shackley left the agency voluntarily when "forced to choose between retirement and accepting a post that would have represented a de facto demotion." (New York, 3 March 1980). Ledeen, incidentally, is a colleague of Ray S. Cline at Georgetown's rightwing propaganda mill, the Center for Strategic and International Studies (see chapter 14, footnote 20).

33. Acoca and Brown, op. cit.

34. D. Russell: "Loren Hall and the Politics of Assassination," Village Voice, 3 October 1977.

35. The New York Times, ed.: The Final Assassinations Report (Bantam, 1979). In early 1980 the Justice Department was investigating allegations that Marcello had offered Mario T. Noto, the Deputy Commissioner of Immigration, a guaranteed "plush job" after retirement, in return for Noto's help in lifting Marcello's travel restrictions. Noto's attorney, ironically, is Myles Ambrose, who stepped down from his job at the head of the BNDD in the wake of corruption allegations. (New York Times, 11 February 1980).

36. McCoy, op. cit.

37. H. Messick: The Mobs and the Mafia (Spring Books, 1972). 38. The Newsday Staff, op. cit.

39. H. Messick: Of Grass and Snow (Prentice‑Hall, 1979); The Newsday Staff, op. cit.

40. Miami Herald, 30 March 1978.

41. Messick: Of Grass and Snow, op. ‑cit.

42. Ibid.

43. Ibid.

44. Ibid.

45. McCoy, op. cit.

46. Ibid.

47. In the early seventies the opium bankrollers in Taiwan sent out, through their international lobby, the WACL, propaganda charging Red China with "the drugging of the world." The propaganda was directed at Nixon's rapprochement with mainland China. A 1972 BNDD report stated, however, that "not one investigation into heroin traffic in the area in the past two years indicates Chinese Communist involvement."

48. The existence of such a drug war is also mentioned in A. Jaubert: Dossier D ... comme Drogue (Alain Moreau, 1974).

49. S. O'Callaghan: The Triads (W.H. Allen, 1978).

50. F. Robertson: Triangle of Death (Routledge and Keagen Paul, 1977). 51. O'Callaghan, op. cit.

52. McCoy, op. cit.

53. F. Wulff in the Danish Rapport, 14 April 1975. A BNDD agent on the scene was reportedly discovered and liquidated. Apparently he hadn't known that the code words were "baccio la mano" — I kiss your hand. Subject number one of the meeting was Southeast Asia, which the conferees decided would replace Turkey and Marseilles as the main source of opium and heroin. Mexico, to which Sam Giancana was sent, would be a safety valve. On one thing they were uananimous: the Corsicans had to be eliminated. To begin with, $300 million was to be invested in the bribery of politicians, as well as of military and police officers in Thailand, Burma, Laos, South Vietnam, and Hong Kong. Another nine‑figure sum was set aside to maximize opium production in the Golden Triangle.



to be continued…

Written by Kris Millegan   

Allegations regarding "Butch" Merritt, Watergate, Intelligence Agencies and "Crimson Rose, " Vol. VIII

By Kris Millegan

Nixon on Drugs – Part One

Now I'm against legalizing marijuana because, I know all the arguments about, well, marijuana is no worse than whiskey, or etc. etc. etc. But the point is, once you cross that line, from the straight society to the drug society – marijuana, then speed, then it's LSD, then it's heroin, etc. then you're done.
                                                                                                  — Richard M. Nixon, May 13, 1971, Oval Office


Nixon at Lincoln Memorial, May 9, 1970


We all get played, at least, one time or another – if not simply, over and over again. It’s amazing what a person will overlook to get ahead, to get by, to get along.

Nixon is dead. We may never know the depths of the duplicity he played or those played against him, but we can examine the history that has been recorded.

The pregame to Watergate was drugs, yes there were earlier warm-up exercises with Nazis, Cold War intrigue, and … blackmail.

According to John Loftus, Nixon blackmailed the Dulles brothers concerning their Nazi activities, especially the illegal importation of thousands of Nazi, against direct written orders of President Truman. The pay-off for Nixon’s silence was his rising political star. He got the money, publicity and connections needed – paying back his benefactors with favors.

At the end of the day, he attempted to be his own man. Make his mark in history. Call his own tune. Playing both ends against the middle. To do this he needed “control.” His attempts to do that sealed his doom. Nixon became a liability, and was easily disposed.

Stage-managed out the door, the demise of the venal Nixon was played to the hilt, consolidating the power of those running the show, while undermining our republic, demoralizing our political arena and bastardizing our journalism.

From the book Elite Deviance:

The Watergate scandal, and its aftermath, 1972‑1974, brought down the Nixon administration. Watergate was also a most significant contributor to low public confidence in government in the past quarter century. The litany of illegal acts by governmental officials and/or their agents in Watergate included securing illegal campaign contributions, dirty tricks to discredit political opponents, burglary, bribery, perjury, wiretapping, harassment of administration opponents with tax audits, and the like. By 1975, when the above revelations became public and just after the end of the Watergate scandal, public confidence in government was understandably low. One poll revealed that 68 percent of Americans believed that the government regularly lies to them.


Here are some reports about the Post WWII drug trade, especially, the 1960s and ’70s, and how they concern Nixon:

An excerpt from the 1972 out-of-print book by Frank Browning, Smack:

With gross returns from the Indochinese traffic running anywhere from $250 million to $500 million per year, opium is one of the kingpins of Southeast Asian commerce. Indochina has not always had such an enviable position. Historically most of the world's supply of opium and heroin came through well‑established routes from Turkey, Iran, and China. Then it was refined in chemical kitchens and warehouse factories in Marseilles. The Mediterranean trade was controlled by the Corsican Mafia (which itself has long been related to such American crime lords as Lucky Luciano, who funneled a certain amount of dope into the black ghettos). But high officials in the narcotics control division of the Canadian government, and in Interpol, the International Police Agency, confirm that since World War II – and paralleling the U.S. expansion in the Pacific – there has been a major redirection in the sources and routing of the world‑wide opium traffic.

According to the United Nations Commission on Drugs and Narcotics, since at least 1966, 80 percent of the world's 1,200 tons of illicit opium has come from Southeast Asia‑directly contradicting most official U.S. claims that the primary sources are Middle Eastern. In 1966 Interpol's former secretary general Jean Nepote told investigators from Arthur D. Little Research Institute (then under contract to the U.S. Government Crime Commission) that the Fertile Triangle was a principal production center of opium. And last year an Iranian government official told a United Nations seminar on narcotics control that 83 percent of the world's illegal supply originated in the Fertile Triangle – the area where opium is controlled by the U.S.‑supplied troops of Laos and Nationalist China.

It is odd that the U.S. government with the most massive Intelligence apparatus in history could miss this innovation. But though it may seem to be an amazing oversight, what has happened is that Richard Nixon and the makers of America's Asian policy have completely blanked Indochina out of the world narcotics trade. Not even Joe Stalin's removal of Trotsky from the Russian history books parallels this historical reconstruction. In his recent State of the World address, Richard Nixon dealt directly with the international narcotics traffic. "Narcotics addiction has been spreading with pandemic virulence," he said, adding that "this affliction is spreading rapidly and without the slightest respect for national boundaries." What is needed is "an integrated attack on the demand for [narcotics], the supply of them, and their movement across international borders…. We have," he says, "worked closely with a large number of governments, particularly Turkey, France, and Mexico, to try to stop the illicit production and smuggling of narcotics" (italics‑added).

It is no 'accident that Nixon has ignored the real sources of narcotics trade abroad and by so doing has effectively precluded any possibility of being able to deal with heroin at home. It is he more than anyone else who has underwritten that trade through the policies he has formulated, the alliances he has forged, and most recently the political appointments he has made. For Richard Nixon's rise to power has been intricately interwoven with the rise of proponents of America's aggressive strategy in Asia, a group of people loosely called the China Lobby who have been in or near political power off and on since 1950.

Among the most notable members of the China Lobby are Madame Anna Chennault, whose husband, General Claire Chennault, founded Air America; columnist Joe Alsop; FBI Director J. Edgar Hoover, former California Senator William Knowland, and Ray Cline, currently Chief of Intelligence for the State Department. They and such compatriots as the late Time magazine publisher Henry Luce and his widow, Congresswoman Claire Boothe Luce, have been some of the country's strongest proponents of the Nationalist Chinese cause.

In 1954 Chiang Kai‑shek formed the Asian People's Anti‑Communist League (APACL), which was to become one of the vital links between the China Lobby and the Taiwan government. (It was also *in that year that Nixon urged that U.S. troops be sent into Indochina following the French defeat in Dien Bien Phu—a. proposal which failed because of the lack of public support for such policy following the Korean War.) As soon as the APACL was formed, Chiang announced that it had established "close contact" with three American politicians – the most important of whom was Vice President Richard Nixon.

Over the years the China Lobby has continued to spring to Nixon's support. It was Madame Chennault, co‑chairman in 1968 of Women for Nixon-Agnew Advisory Committee, who helped raise a quarter of a million dollars for the campaign; it was she who just before the election entered into an elaborate set of arrangements to sabotage a White House peace plan. Within 30 hours of the announced plan, South Vietnam President Thieu rejected the new negotiations it proposed—a rejection Madame Chennault had helped arrange as a last‑minute blow at Hubert Humphrey and the Democrats.

It is not only his debts, associations, and sympathies to the China Lobby which have linked Nixon with Kuomintang machinations in Indochina and helped plunge the U.S. deeper into the morass there. One of his most important foreign policy appointments since taking office has been the reassignment of Ray Cline as State Department director of intelligence and research. Cline, the controversial CIA station chief in Taiwan who helped organize KMT forays into Communist China, in 1962 promoted Nixon's old project of a Bay of Pigs invasion of China. Within a month of Clines recent appointment, the resumption of pilotless Intelligence flights over mainland China was approved.

The entire cast of the China Lobby has relied on one magic corporation, the same corporation established just after World War II by General Claire Chennault as Civil Air Transport and renamed in the 1950's Air America. Carrier not only of men and personnel for all of Southeast Asia, but also of the policies that have turned Indochina into the third bloodiest battlefield in American history, Air America's chief contract is with the American Central Intelligence Agency.

Air America brings Brahmin Bostonians and wealthy Wall Streeters who are the China Lobby together with some of the most powerful men in Nationalist China's financial history. One of its principal services has been to fly in support for the "remnant" 93d Division of the KMT, the "opium army" in Burma; another has been as a major carrier of opium itself. Air America flies through all of the Laotian and Vietnamese opium pickup points, for aside from the private "butterfly fleet!' and various military transports, Air America is the "official" Indochina airline. A twenty‑five‑year‑old black man recently returned from Indochina told Ramparts of going to Vietnam in late 1968 as an adventurer, hoping to get in on the dope business. But he found that the business was all controlled by a "group like the Mafia. It was tight and there wasn't room for me." The only way he could make it in the dope trade, he says, was to go to work for Air America as a mechanic. He found there "was plenty of dope in Laos—lots of crystals [heroin] all over the place." Air America was the only way to get in on it.

What has taken place in Indochina is more than a flurry of corruption among select dramatis personae in America's great Asian Drama. The fact that Meo tribesmen have been nearly wiped out, that the Corsican Mafia's Air Opium has been supplanted by the CIA's Air America, that Nationalist Chinese soldiers operate as narcotics bandits, that such architects of U.S. democracy for the East as the Nhus and Vice President Ky have been dope runners – these are only the bizarre cameo roles in a larger tragedy that involves nothing less than the uprooting of what bad been the opium trade for decades – through the traditional lotus land of the Middle East into Western Europe – and the substitution of another network, whose shape is parallel to that of the U.S. presence in Southeast Asia. The ecology of narcotics has been disrupted and remade to coincide with the structure of America's Asia strategy‑the stealthy conquest of a continent to serve the interests of the likes of the China Lobby.

The shift in the international opium traffic is also a metaphor for what has happened in Southeast Asia itself. As the U.S. has settled in there, its presence radiating a nimbus of genocide and corruption, armadas of airplanes have come to smash the land and lives of a helpless people; mercenary armies have been trained by the U.S.; and boundaries reflecting the U.S. desires have been established, along with house of 'commerce and petty criminality created in the American image. One of the upshots has been that the opium trade has been systematized, given U.S. technological expertise and a shipping and transportation network as pervasive as the U.S. presence itself. The piratical Corsican transporters have been replaced by pragmatic technocrats carrying out their jobs with deadly accuracy. Unimpeded by boundaries' scruples, or customs agents, and nurtured by the free flow of military personnel through the capitals of the Orient, the United States has—as a reflex of its warfare in Indochina—built up a support system for the trade in narcotics that is unparalleled in modem history.

The U.S. went on a holy war to stamp out Communism and to protect its Asian markets, and it brought home heroin. It is a fitting trade‑off, one that characterizes the moral quality of the U.S. involvement. This ugly war keeps coming home, each manifestation more terrifying than the last; home to the streets of the teeming urban ghettos and the lonely suburban isthmus where in the last year the number of teen‑age heroin addicts has taken a quantum leap forward. Heroin has now become the newest affliction of affluent America—of mothers in Westport, Connecticut, who only wanted to die when they traced track marks on their daughters' elegant arms; or of fathers in Cicero, Illinois, speechless in outrage when their conscripted sons came back from the war bringing home a blood‑stained needle as their only lasting souvenir.


Some greater detail from the 1980 out-of-print book, The Great Heroin Coup - Drugs, Intelligence, & International Fascism by Henrik Kruger:


The story of Christian David, an international narcotics trafficker used by the intelligence services of at least three nations, is fascinating in itself. It is even more important for what it tells us of a larger, less documented history ‑the secret collaboration of government intelligence services and parallel police throughout the world, and their use of criminals, particularly from drug networks, for political counter-subversion. Above all it is an important book for Americans to read, since the shadow of the CIA can be seen behind Christian David's political intrigues in countries like France and Uruguay. America's role in Christian David's strange career has never before, to my knowledge, been revealed in this country. And Henrik Kruger is able to expand the story into larger perspectives on the CIA, Watergate, and current U.S. counterinsurgency tactics.

The heavy censorship of David's story in the United States, or what may be called the media resistance to it, is perhaps the clearest symptom of America's involvement. For example, it was surely newsworthy that in June 1973 Le Monde, France's most respected newspaper, charged that the break‑up of the Ricord French drug network in Latin America (which had included David's arrest and extradition to the United States), was the result of a "close Mafia‑police‑Narcotics Bureau collaboration" in the U.S. The result of this collaboration, according to Le Monde, was to shatter Corsican influence in the worldwide narcotics traffic, and create a virtual monopoly for the U.S.‑Italian Mafia connection (whose key figures were Santo Trafficante in America and Luciano Liggio in Europe).[1]

Le Monde's charges, many details of which have since been corroborated, were passed over in silence by the U.S. press. This studied disinterest in the politics of narcotics (other than the propaganda, including flagrant lies, from official press releases) is a recurring, predictable phenomenon of our press; and it has visibly had a deleterious impact on U.S. politics. If the Washington Post and the New York Times, then supposed exposers of Watergate, had picked up on stories like the one in Le Monde, then the history of Watergate might have been altered. For the history of Nixon's involvement in Watergate is intertwined with that of his personal involvement in drug enforcement. Nixon's public declaration in June 1971 of his war on heroin promptly led to his assemblage of White House Plumbers, Cubans, and even "hit squads" with the avowed purpose of combatting the international narcotics traffic. (Among those with a White House narcotics mission, or cover, were Krogh, Liddy, Hunt, Caulfield, Sturgis, and Bernard Barker.)[2]

Many writers have since suggested that Nixon's war on heroin was part of his "grand design" to develop a new drug superagency, under direct White House control, into "the strong investigative arm for domestic surveillance that President Nixon had long quested after."[3] Yet the establishment press failed to look critically at Nixon's war on heroin. Instead it blandly reported Nixon's decision in June 1971 to provide $100 million in aid to end opium production in Turkey, a country which (according to CIA estimates) produced only 3 to 8 percent of the illicit opium available throughout the world.[4]

At the time perhaps 80 percent of the world's illicit opium was grown, much of it by CIA‑supported tribesmen, in the "golden triangle" of Laos, Burma, and Thailand, while the Shah of Iran, who became one of Nixon's closest foreign allies, had just announced resumption of Iranian opium production of over 20,000 hectares (an area 50 percent greater than the total cultivation in Turkey). As the New Republic noted only one month later, Nixon's decision to shut down the supply of Turkish opium was "likely to do no more than drive the industry further east."[5] [emphasis added]

Another, and even more cynical view of Nixon’s action is to see it as a direct attack on the French Corsican networks which relied almost exclusively on Turkey as their source of supply, and which, according to Le Monde, were being deliberately forced out of the international drug trade as the result of a “close Mafia‑police‑Narcotics Bureau collaboration.” Le Monde stated explicitly that it was the U.S.‑Sicilian Mafia which closed down the sluice‑gates of Turkish opium production. Was Nixon personally playing a role, as Henrik Kruger suggests, in this seamy international drug war between rival networks? Such a possibility seems less remote when we recall the rivalry which had grown up in the 1960s between deGaulle’s intelligence services and the CIA, and the respective reliance of these services upon the rival Corsican and U.S.‑Italian crime syndicates.

Le Monde had no difficulty in spelling out the American side of the intelligence‑Mafia connection, even though the CIA activities of Santo Trafficante, the alleged heir to the Luciano network, were not known to it at the time:

Instructed by his own experience of collaboration with the American intelligence services, Lucky Luciano used to recommend to his honorable correspondents scattered from Beirut to Tangiers, via Ankara and Marseilles, to operate as he had done. It was in this way that drug dealers and couriers served as informants to [the British] MI5, to [the American] CIA, to [the French] SDECE, to the [West German] Gehlen organization, even to the Italian SIFFAR.[6]

On the French side, LeMonde was predictably more reticent; but from other sources we learn that at least two members of the competing Ricord network, Christian David and Michel Nicoli, were former members of the Gaullist Service d’Action Civique (SAC), the parallel police or barbouzes who had been used to assassinate members of the right wing Organisation de I’Armee Secrete (OAS), in revolt against de Gaulle’s accommodation with Algeria. Through SAC, David and Nicoli had come into contact with SDECE operations as well.[7]

One of the major theses of Henrik Kruger’s fascinating book is that “the great heroin coup” –the “remarkable shift” from Marseilles (Corsican) to Southeast Asian and Mexican (Mafia) heroin in the United States, was a deliberate move to reconstruct and redirect the heroin trade, rather than to eliminate it, and that Cuban exiles, Santo Trafficante, the CIA, and the Nixon White House were all involved [emphasis added]:

It was, needless to say, not a willful conspiracy of all the above. But we can assert with reasonable certainty that the CIA, Trafficante and other mafiosi, certain Southeast Asians, and some people in the White House must have been in the know. (Kruger, p. 122)

As Kruger tells the story, the motivations for the alleged heroin coup were primarily political: to break the power of the old Gaullist SAC connection, which by 1970 was as distasteful to de Gaulle's pro-American successor Pompidou as it was to Nixon, and (on the American side) to replace it by an alternative power base. In Kruger's analysis it was not so much a struggle between the French and American intelligence services, SDECE and CIA, as it was a struggle between old and new leaderships. The coming to power of Pompidou in France, and of Nixon in America, had created unprecedented tensions and suspicions between these two presidents and their old-line intelligence services: hence Nixon's desire to use the war on heroin as a pretext for a new superagency under White House control. Hence also the successive agreements between Nixon, Pompidou, and their cabinet officers to crack down on the old Corsican connection.

Once again, the U.S. press resistance to the subject matter of Kruger's book suggests that there is something to his thesis. At least two books published in America, both obviously based on U.S. government sources, discussed the arrest of David at length, without mentioning either that he had worked for SAC/SDECE…

Again, it is part of Kruger's thesis that the CIA, even after it had decided to eliminate the Ricord network of which David formed part, was unwilling to destroy the international drug connection which allowed its agents to gather intelligence about insurrectionary movements through the tactic of selling arms to them; and which at the same time financed the organization of counter‑revolutionary death squads and "parallel police" such as the Argentine AAA (Alianza Anticomunista Argentina). Undoubtedly, in Latin America, the stories of drugs and of death squads, such as that which arranged for the assassination of Orlando Letelier in Washington, have been closely interwoven.

As support for his argument that the traffic once dominated by Ricord was simply redirected to Cuban exiles in touch with the CIA and with Santo Trafficante, Kruger points to the extraordinary story of Alberto Sicilia Falcon. Somehow Sicilia, a twenty‑nine‑year‑old Cuban exile from Miami, was able to emerge as the ringleader of the so‑called "Mexican connection" which promptly filled the vacuum created by the destruction of the Ricord network in 1972. Lucien Sarti, a top Ricord lieutenant, was shot and killed by authorities in Mexico on 27 April 1972, after being located there by U.S. agents.[18] The new Sicilia network, according to DEA Chief Peter Bensinger, was operating by May 1972, and had "revenues reliably established in the hundreds of millions of dollars" by the time of Sicilia's own arrest in July 1975.[19]

Once again, it is virtually impossible to find any extensive treatment in the U.S. press of the mysterious Alberto Sicilia Falcon, even though his arrest led to no less than 104 indictments, 73 of them in the United States.[20] From the noted German magazine Der Spiegel, however, one learns that Sicilia told the Mexican authorities who arrested him that he was a CIA agent, and had been trained at Fort Jackson (as had at least one of Nixon's Watergate Cubans) for possible guerilla activity against Cuba. Allegedly he had also worked in Chile against the socialist government of Salvador Allende until he returned to the U.S. in early 1973. He also, according to Mexican police, spoke of a special deal with the CIA; the U.S. government had turned a blind eye to his heroin shipments, while his organization supplied CIA weapons to terrorist groups in Central America, thereby forcing the host governments to accept U.S. conditions for security assistance.[21]

DEA Chief Bensinger was quite circumspect in his testimony about Alberto Sicilia Falcon, merely calling him "a Cuban national" and alluding to his possible "revolutionary activity in Central and South America." From this it was easier to deduce that Sicilia was a Castro agent than the reverse.[22] In fact, Sicilia was a Cuban exile who had come to Mexico from Miami, where he had links to the Cuban exile community, and had personally negotiated for manufacturing rights to the celebrated 9mm Parabellum machine pistol, better known as the Ingram M‑10.[23]

Parabellum was a Miami‑based arms sales firm set up by soldier-of‑fortune Gerry Patrick Hemming, and headed by Cuban exile Anselmo Alliegro IV, whose father had been close to Batista.[24] Parabellum in turn was sales representative for Hemming's friend Mitch WerBell III, a mysterious White Russian, OSS‑China veteran, small arms manufacturer, and occasional U.S. intelligence operative, with unexplained relations to the CIA, DEA, and the major drugs‑for‑arms deal for which he was indicted but acquitted.[25] (The government's case failed after the chief government witness, arms and dope smuggler Kenneth Burnstine, was killed in the crash of his private plane.)[26] As we shall see, another client interested in producing the Ingram M‑10 machine pistol in Latin America, under license from WerBell, was the international

Kruger's invaluable contribution is to have spelled out the pervasive role of narcotics in supplying finances, organization, and sanctions to this parafascist network, from the Argentine AAA to the World Anti‑Communist League (WACL) founded by KMT intelligence personnel on Taiwan. Before World War II the KMT regime in China was perhaps the best example of political manipulation of the narcotics traffic, under the guise of an "opium suppression campaign," to finance both a political and an intelligence apparatus (under General Tai Li).[48] This practice spread after World War II to a number of other WACL member countries and groups. Today there is cause to fear that Nixon's superagency, the Drug Enforcement Administration, has, like other narcotics enforcement agencies before it, come to use corrupt personnel who are actually part of the traffic, as part of a covert war against revolution.

The U.S. government's narcotics Mafia connection goes back, as is well known, to World War II. Two controversial joint operations between OSS (Office of Strategic Services) and ONI (U.S. naval intelligence) established contacts (via Lucky Luciano) with the Sicilian Mafia;[53] and (via Tai Li) with the dope‑dealing Green Gang of Tu Yueh‑Sheng in Shanghai.[54] Both connections were extended into the post‑war period as the Luciano and KMT networks slowly resumed their pre‑war contacts. In Washington, in 1947, State Department official Walter Dowling noted with concern the efforts of an ex‑OSS officer to reactivate the wartime OSS‑mafia connection. Future CIA officer James Angleton (then in an interim agency, SSU) appears to have shared Dowling's repugnance; but one of the principal ex‑OSS agents concerned, Max Corvo, now enjoyed influential private backing as a consultant to Italian‑American industries in Sicily.[55]

The deportation of Lucky Luciano to Sicily in 1946 was followed by that of more than sixty other American mafiosi, some of whom, like Frank Coppola, became not only key figures in the postwar Luciano‑Trafficante narcotics connection, but also political bosses whose Mafia muscle ensured the election of Christian Democrat M.P.s.[56] Coppola's name has been linked, together with that of Interior Minister Mario Scelba, to a May Day 1947 massacre at Portella delle Ginestre, in which eight people were killed by machinegun fire, and thirty‑three were wounded. In all 498 Sicilians, mostly left wingers, were murdered in 1948 alone, a revealing footnote to former CIA operative Miles Copeland's benign assurance that "had it not been for the Mafia the Communists would by now be in control of Italy."[57]

Meanwhile, in the United States, KMT agents helped establish a powerful China Lobby, and collaborated with friends in U.S. agencies to target, and in some cases drive from government, old foes of the former U.S.‑KMT‑Tai Li alliance including those inside the OSS. A scholarly book in 1960 noted that "the narcotics business has been a factor in some activities and permutations of the China Lobby," thus challenging the official Narcotics Bureau myth that KMT dope in this country was "Communist Chinese".[58]

The Luciano and KMT networks had been in contact for U.S. dope distribution in the 1930s. Although there is no evidence of substantial collaboration between them in the 1950s, there are symptoms of increasing convergence, partly through agents who dealt with both. There is the example of George White, an FBN official and former OSS agent who testified to the Kefauver Committee that he had been approached on behalf of Luciano in 1943 by an old China trafficker, August del Grazio.[59] White worked closely with the CIA in the postwar years and (under FBN cover) ran one of their LSD experiments in Project MK/ULTRA.[60] In 1948 White was back in Europe, intending to check up personally on Luciano and his narcotics associate Nick Gentile, another former U.S. gangster who (like Vito Genovese) had worked for the Allied Military Government in Sicily.[61] Soon afterwards Mafia traffickers in the United States began to be arrested, but not men like Luciano, Gentile, or Coppola.

By the time of White's visit to Marseilles, the CIA and AFL organizer Irving Brown were already subsidizing the use of Corsican and Italian gangsters to oust Communist unions from the Marseilles port. Brown's CIA case officer, Paul Sakwa, has confirmed that by the time CIA subsidies were terminated in 1953, Brown's chief contact with the Marseilles underworld, Pierre Ferri‑Pisani, no longer needed U.S. support, because of the profits his newly‑gained control of the port supplied from the heroin traffic.[62] Under the oversight of Ferri‑Pisani and the Guerini gang, Corsican traffickers worked with the Luciano network and in the 1950s were its chief source of refined heroin. This alone might help explain the apparent immunity of Luciano's network, to which Le Monde alluded, along with that of its Corsican suppliers, about which Le Monde was silent.

Although White worked on the Luciano and Corsican cases, his FBN reputation had been made in 1937 by smashing a major distribution network headed by the pro‑KMT Chinese tong (gang) in San Francisco, the Hip Sings.[63] But by 1951 the CIA was closely allied with KMT drug operations in Burma and Yunnan, through a Miami-based proprietary, Sea Supply, Inc., organized by OSS veteran Paul Helliwell.[64] In 1959 the FBN and White again arrested a new generation of Hip Sing officials, but only after the ringleader (Chung Wing Fong, a former Hip Sing president and official of the San Francisco Chinese Anti‑Communist League, a KMT front) had yielded his passport to the U.S. consul in Hong Kong and then travelled as ordered to Taiwan.[65] In this way Fong became no more than an unindicted conspirator and the KMT disappeared from view; White, meanwhile, turned around and told the U.S. press the heroin came from Communist China ("most of it from a vast poppy field near Chungking").[66] In China, if not in Italy, White's concern about dope seems to have centered on networks within U.S. borders, not on the international suppliers.

In 1953‑54 the CIA drew on old China hands with exposure to KMT traffic (Chennault, Willauer, William Pawley, Howard Hunt) to set up the overthrow of the Arbenz government in Guatemala, an operation which at least contemplated the use of "Puerto Rican and Cuban gangsters."[67] As part of this operation, we see CIA officer Howard Hunt, a veteran with his friend Lucien Conein and Conein's friend WerBell of OSS operations in China under Helliwell, helping in 1954 to set up what would eventually become the Latin American branch of the KMT‑backed World Anti‑Communist League. (Four years later the chairman of this group was the Guatemalan attorney of New Orleans Mafia leader Carlos Marcello.[68]) Nevertheless, in the late 1950s it seemed unlikely that the heroin connection, outside of countries directly involved, like Laos, would either have a major impact on U.S. policy or become a significant alternative to it. With the decline of cold war paranoia, events seemed to be moving towards normalization.

All this changed with the 1960s, when the CIA reassembled for the Bay of Pigs the old Guatemala team (including Hunt, Willauer, and Pawley, who oversaw Cuban recruitment). With the failure of the Bay of Pigs Cuba became to America what Algeria had been to France. The explosive political controversy meant that thousands of Cuban exiles, many of them with backgrounds in the Havana milieu, were trained by the U.S. as guerrillas and/or terrorists, then left in political limbo. Many of them soon turned to smuggling to augment their finances, and in some cases supplant their original political objectives. At least one CIA project growing out of Operation 40 (the control, element in the Bay of Pigs invasion force), had to be terminated, when the drug activities of its members became too embarrassing.[69] In 1973 Newsday reported that "at least eight percent of the 1500‑man [Bay of Pigs] invasion force has subsequently been investigated or arrested for drug‑dealing."[70]

By this time many Bay of Pigs veterans were working for either Vesco or Trafficante.[71] Both the lucrative drug traffic and its anti-Communist politics began increasingly to get out of U.S. control. This was particularly true when, after the death of President Kennedy, the U.S. lent a hand to military coups in Brazil, the Dominican Republic, and Greece, nations which in turn became bases for further right wing activities in other countries. America's lack of enthusiasm for the Fascist clients it had helped to procreate, only had the effect of encouraging them to plot more energetically with each other, and to lobby lavishly for more right wing policies in Washington. It was in this period that mercenary terrorism, illicit arms traffic, and drug traffic, consolidated into one increasingly global milieu. The long-delayed founding of the World Anti‑Communist League in Taiwan in 1967 may be a less significant symptom of this trend than the Greek coup of the same year, after which the KYP (the Greek CIA) became an active fomenter of para-fascist terror tactics in the rest of Europe.[72]

The official termination of the CIA MONGOOSE [headed by Ed Lansdale] project against Cuba in the same year left a colossal disposal problem: what to do with the estimated 7000 trained Cubans? Here America seems to have followed the example set by de Gaulle. Some of these Cuban exiles were absorbed into other CIA and Pentagon operations, some went to work as did David for intelligence services in Latin America, some were retained by the CIA to report on their former colleagues and even to eliminate the more troublesome of them. But each of these solutions ran the risk of giving more power to the very elements whom the CIA wished to disperse. This was the situation faced by Richard Nixon on his election.

Several studies of Richard Nixon have focused on his contacts since 1946 with elements from organized crime, mostly through his early political adviser Murray Chotiner, and his close friend and business associate Bebe Rebozo. Kirkpatrick Sale has suggested that "It is possible that Richard Nixon was one more of the large number of politicians in this country who have been bought or cajoled into the service of the ends of organized crime."[73]

Yet this dark hypothesis is, I think, as oversimplified as its opposite. Like every one of his predecessors since at least World War II, Nixon, to become elected, had made accommodations to all of the prominent political forces in the coalition he represented, including the inevitable connection to organized crime. It may well be that in his early career these connections were more prominent than in the case of Lyndon Johnson, who started as FDR's protege, or John F. Kennedy, who was born wealthy (and could leave dirty business connections to his father). But it was also apparent, even before he was elected in 1968, that Nixon sought to pursue a foreign policy that would be independent of the early KMT, and other money which had first helped him to become a national political figure.

Faced with the growing and closely related problems of right wing terrorism and of the international narcotics traffic, Nixon's approach seems to have been that of a self‑perceived political realist: to gain control of, redirect, and manipulate the problem forces, rather than to somehow make them magically disappear. It is unlikely that these objectives were unrelated to his foreign policy efforts to establish links to main-land China, for this policy challenged the powerful China lobby which had supported him in the past. It may be no coincidence that the proclamation of the war on drugs, Kissinger's secret trip to Peking, and the establishment in the White House of what the president called "a non‑legal team" (the Plumbers), including Hunt and Conein, all took place within a month of each other in mid‑1971. [emphasis added]

Thus in Miami Nixon appointed an energetic U.S. attorney, Robert Rust, who in June 1970 rounded up ex‑CIA Cubans like Juan Restoy in Operation Eagle: this unusual zeal, according to Hank Messick, made Rust an exception to the South Florida "don't‑rock‑the‑boat" tradition.[74] But Nixon's appointments to the Federal Court in the Miami area (one of whom was close to Paul Helliwell and had served as director of a bank accused of laundering money for Meyer Lansky) were not so gung‑ho; and eventually most of Rust's indictments in Operation Eagle were overturned in court. Meanwhile the "non‑legal team" at the White House, thanks to Howard Hunt, began to recruit men like Frank Sturgis, whose FBI file linked him to possible "organized crime activities," and Felipe de Diego, a colleague of Restoy in the CIA's Operation 40 project which had to be closed down because of its narcotics involvement.

Nixon, following de Gaulle's example, seems to have taken steps to restore control by the White House over a milieu which the U.S. government itself had helped to create. Like the French, he seems to have turned to elements of the milieu to work against it; but he seems to have had worse luck in those whom he picked. In his memoirs Nixon tells how, less than two weeks after the Watergate break‑in Haldeman said that the whole thing was so ludicrous that Dean had not discounted the possibility that we were dealing with a double agent who purposely blew the operation. Otherwise it was just too hard to figureout.[75]

Eight years of journalistic books on Watergate, most of which barely mention the narcotics responsibilities of the so‑called Plumbers, have not come up with any better explanation.

Edward J. Epstein's book on Nixon's drug policies, which ipso facto is a book about Watergate, analyzes this shortcoming of the journalists:

The White House timetable for consolidating its power over the investigative agencies of the government was rudely interrupted on June 17, 1972, when Washington, D.C., police arrested five men in the national headquarters of the Democratic Party in the Watergate apartment and office complex.... With Nixon's impending reelection threatening the very independence of the power base of the investigative agencies, there were strong forces within the executive branch of the government which would not only refuse to help cover up the embarrassing connection but would actively work to disclose it.... Richard Helms... had been told that Nixon planned to replace him immediately after the election, and he feared, as he told me subsequently, that Nixon also planned "to destroy [his] agency." … The "battle of the leaks," as Colson called it... began to sink the Nixon Administration.…

Consider, for example, the problem of Woodward and Bernstein, of the Washington Post. Woodward was receiving information from Robert Foster Bennett, of Robert R. Mullen and Company, that focused the blame for Watergate on Charles Colson. If he had assumed that Bennett was providing him with this information for anything more than a disinterested purpose, he would have had to ask whom Bennett worked for, what the true business of Mullen and Company was, and why Bennett wanted him to steer his investigation away from the CIA and toward Charles Colson. He then would have found that Mullen and Company was a CIA front organization and was aware that Bennett was giving information to Woodward; and that the CIA was trying to divert attention from itself (and succeeding, in the Washington Post) because a number of the conspirators involved in the Watergate burglary had also been involved in operations that the CIA had directly supported, such as the Plumbers. Moreover, the very fact that a CIA front group was providing information that was undermining the Nixon administration pointed to a conflict between Nixon and the CIA. Woodward and Bernstein, however, could not have reported these implications and thus could not have depicted the power struggle between the president and the CIA without revealing one of their prime sources. For the same reason, the reporters who received Nixon's tax returns from officials of the Internal Revenue Service could not have revealed this as evidence of a struggle between disgruntled members of the Treasury Department and the president without also revealing that they were no more than messengers for insurgents struggling against the president. By not revealing their sources, they received the Pulitzer Prize... [76]

Epstein views Watergate as optimistically as Edmund Burke saw the Whig Revolution of 1688 —as a restoration of decorum after tyrannous encroachment, a revolution not so much made as prevented: "The revolt of the bureaucrats thus succeeded in blocking Nixon's plan to gain control over the investigative agencies of the government in his second term."[77] This optimism assumes that Nixon himself was the problem, not the monster DEA agency which outlasted him or the CIA Cubans it recruited. It is true that the Watergate exposures put an end to Hunt's little known "recruitment of a secret army of Cuban exiles [no fewer than 120, according to CBS], answerable only to the White House, and equipped to assassinate foreign leaders."[78]

But some of the old China hands with network connections began moving to the new DEA. As we have seen, Hunt secured a post for his old OSS‑Kunming friend Lucien Conein in what eventually became DEA, and Conein in turn recruited his own band of CIA Cubans in Deacon I, at least one of whom, according to CIA reports, has already taken part in a death squad operation.[79]

Nor did Watergate have a good effect on narcotics enforcement. On the contrary, the Watergate disclosures were followed by a marked drop‑off in high‑level drug conspiracy arrests. Senate investigator Philip R. Manuel reported in 1975 that "from 1917 through early 1973 Federal narcotics enforcement had its period of greatest success," but failed to hold its gains thereafter.[80] The new DEA soon came under both Senate and Justice Department scrutiny for a series of irregularities, including what one Senate staff report called "unprofessional conduct" in failing to pursue a Vesco narcotics lead.[81]


"We have turned the corner on heroin," declared a proud Richard Nixon after the massacre of the Corsican Mafia. But shutting off the pipeline of heroin from Marseilles did not produce the shortage he predicted. Except for a brief period in 1973, the supply increased, tremendously. By 1975 the heroin glut far surpassed even that of the Corsican heyday of the late sixties. According to a 1977 report of the House Select Committee on Narcotics Abuse, heroin addiction had doubled in four years. One year later New York's special narcotics prosecutor, Sterling Johnson, Jr. stated: "There is more dope on the streets now than at any time since the late sixties and early seventies, when we had an epidemic going. We've got another epidemic, and more critical."[1]

When the heroin flow from Marseilles was shut off in 1972‑73, two new sources of supply immediately filled the vacuum. Southeast Asia ‑Laos, Burma and Thailand ‑suddenly produced vast amounts of white no. 4 heroin, the type that supposedly could only be produced by Marseilles chemists. The high quality heroin went primarily to the 40 percent of all U.S. heroin addicts who were living in New York, and who were accustomed to Marseilles heroin. The other new source was Mexico. But its product, the less pure "brown sugar," served mainly to regulate the market and to generate new customers.

The remarkable switch from Turkey‑Marseilles‑U.S.A. to Southeast Asia‑Mexico‑U.S.A. shifted billions of dollars and the power that comes with it. Such a market revolution could not have happened without astute planning and direction, which demanded political savvy and political cooperation. The plans for this tremendous heroin coup were on somebody's drawing board before Nixon and Georges Pompidou met in early 1970. They were made long before Attorney General John Mitchell and French Justice Minister Raymond Marcellin met in Paris on 26 February 1971, when they signed the antinarcotics agreement that led to the eradication of the Corsican drug Mafia. Most probably they were in place by 1968.

The occurrence of such a conspiratorial heroin coup is, of course, a hypothesis. In the following chapters I will trace the logic and the likelihood of its having transpired.

Involved in one way or another in the planning, the execution, or both, were: President Nixon and part of the White House staff; Meyer Lansky's corporate gangster syndicate‑in particular its Cuban exile wing run by Florida capo Santo Trafficante, Jr.; the Cuba/China lobby; ultrareactionary forces in Southeast Asia, primarily the Kuomintang Chinese on Taiwan and in the Golden Triangle; and intelligence and law enforcement factions of the CIA and BNDD/DEA.

It was, needless to say, not a willful conspiracy of all the above. But we can assert with reasonable certainty that the CIA, Trafficante, and other mafiosi, certain Southeast Asians, and some people in the White House must have been in the know.

The plan took three years to execute. Though the major maneuvers began in 1970, one could detect the opening skirmishes soon after Nixon's election victory in 1968:

* Henry Kissinger put pressure on Paraguay to extradite Auguste Ricord, the main Corsican supplier of narcotics to the U.S. market.[2] Paraguay's President Alfredo Stroessner at first chose to ignore that pressure.[3]

* In 1968 the Mafia's premier heroin importer, Santo Trafficante, Jr., travelled to Southeast Asia to check out possibilities for a new supply network involving Chinese opium merchants.[4] When he made the trip, the Corsican Mafia was supplying Trafficante with all the no. 4 heroin he could sell.

* Nixon and Pompidou met in January 1970 to restore close Franco‑American partnership. It was a crucial step in the destruction of the French narcotics apparatus that controlled 80 percent of the heroin trade.

* At the start of July 1970, White House staffer Egil Krogh proposed Operation Heroin, a major action against the narcotics smugglers. His idea was approved.

* U.S. Mafia capos held a summit July 4‑16 at the Hotel Sole in Palermo, Sicily. There they decided to pour money into Southeast Asia and transform it into the main source of heroin.[5]

* On 23 July 1970 Richard Nixon approved the Huston Plan to establish an espionage group that would supercede existing intelligence and enforcement agencies. The super‑group was to be steered from the White House, thus giving the president effective control over all intelligence ‑including domestic spying on U.S. citizens. The plan fell through, mostly due to the opposition of J. Edgar Hoover. However, the White House continued to develop the plan under cover of its fast‑growing, media‑hyped narcotics campaign.

* In August 1970 the Corsicans, apparently informed of the outcome of the Palermo meeting weeks earlier, called their Southeast Asian connections to an emergency meeting at Saigon's Continental Hotel. Thereafter two loads of morphine base would be sent to Marseilles each month.[6] However, the shipments were continually sabotaged, and rarely arrived at their destination.

*Another major development in 1970 was the implementation of Nixon's Vietnamization program, through which the controls in Vietnam were returned to the CIA. The program pumped a fortune into South Vietnam, much of it pocketed by officials. Investigations of endemic corruption among non‑coms and senior U.S. Army personnel led to a Hong Kong office run by a lieutenant of drug czar Trafficante.[7]

* Pure no. 4 heroin appeared in Saigon in 1970, creating an epidemic of addiction among GIs. All previously available heroin had been of the coarse form that could only be smoked. The new heroin wave was hushed up.

* There were two other significant developments in 1970: (1) to end persistent rivalry among customs, the Internal Revenue Service (IRS) and the Bureau of Narcotics and Dangerous Drugs (BNDD), Nixon named the BNDD the sole U.S. representative on drug matters; and (2) the Mafia dispatched the notorious Tomasso Buscetta to Brazil to prepare a takeover of narcotics smuggling upon Auguste Ricord's extradition to the U.S.

* On 26 February 1971 France and the United States signed the definitive agreement for a combined assault on heroin. Within days Ricord was sentenced in absentia. On April 6 Roger Delouette was picked up in New York. As detailed in chapter ten, after that the Corsican network collapsed quickly.

* On 27 May 1971 Congressmen Morgan Murphy and Robert Steele issued their report, The World Heroin Problem. Among their sensational findings was that some 15 percent of the GIs in Vietnam were addicted to heroin. The causes were easy to identify. Most obvious was the sudden appearance of enormous quantities of no. 4 heroin. Fourteen‑year old girls sold 90 percent pure heroin for peanuts. Pushers stuffed it into soldiers' pockets free of charge. Add to that the crackdown that effectively eliminated marijuana and hash from the barracks.

* On the day the Murphy‑Steele report was issued, Nixon, John Erlichman, and Krogh agreed to secretly budget $100 million for a covert BNDD kidnaping and assassination program. Before that the White House had asked BNDD director John Ingersoll to draft a plan for "clandestine law enforcement" that would include assassination of major traffickers.[8]

* Days later Nixon set up a special narcotics action and intelligence group right in the White House. In the same period the Special Investigation Unit (the infamous Plumbers) set up shop in Room 16 of the Executive Office Building. The two groups overlapped, and several of their members were associates of Mafia kingpin Trafficante.

* On 17 June 1971 Nixon, on television, declared war on narcotics: "If we cannot destroy the drug menace in America, then it will destroy us. I am not prepared to accept this alternative."

* On 30 June 1971 the United States and Turkey signed an agreement that would halt Turkish opium cultivation. In return the U.S. handed the Turkish government $30 million.

* On 1 July 1971 Nixon advisor Charles Colson recruited former CIA agent Howard Hunt as a White House consultant.[9] Hunt and Gordon Liddy would work out of Room 16 on narcotics intelligence, one of Hunt's specialties.

* On 25 July 1971 the Asian Peoples Anti‑Communist League (APACL) and World Anti‑Communist League (WACL) met in Manila. The two international lobbies for the Nationalist Chinese, prime bankrollers of international opium and heroin smuggling, angrily attacked Nixon for his approaching trip to Peking. [10]

* In August 1971 the BNDD announced the location in Southeast Asia of twenty‑nine drug refineries, fifteen of them allegedly producing heroin. Among the largest was one in Vientiane, Laos, which was camouflaged as a Pepsi Cola plant. Nixon, representing Pepsi's interests in 1965, had promoted its construction. Though the plant never capped a bottle, it continued to be subsidized by U.S.A.I.D.[11]

* In October 1971 top BNDD analyst John Warner told an interviewer that the continued flooding of the U.S. heroin market, despite the shutdown of French supply routes, indicated that more than the previously assumed 5 percent of U.S. heroin was originating in Southeast Asia.

* On 1 November 1971 BNDD agents arrested a diplomat attached to the Philippine embassy in Laos, and a Chinese journalist from Thailand, attempting to smuggle forty kilos of heroin into the U.S.A. That same year BNDD agents at JFK airport arrested the son of Panama's ambassador to Taiwan with fifty kilos of heroin. Finally, and most dramatically, Parisian police nabbed the Laotian Prince Chao Sopsaisana attempting to smuggle in sixty kilos. Sopsaisana, the head Laotian delegate to the APACL, was about to become Laos' emissary in Paris.[12]

The focus nevertheless remained on the French narcotics traffickers. Nixon could also produce results in the newly arisen Southeast Asian danger zone, but those amounted to the smashing of the remnants of the Corsican Mafia and their Southeast Asian supply network.

Through it all the U.S. supported Marshall Nguyen Cao Ky and other South Vietnamese politicians known to be making immense profits from the heroin traffic. When U.S. reporters exposed Ky's narcotics airlift, the CIA station and U.S. embassy in Saigon issued blanket denials. [13]

* In late 1971 BNDD director Ingersoll issued the following statement: "The CIA has for some time been this Bureau's strongest partner in identifying foreign sources and routes of illegal trade in narcotics. Liaison between our two agencies is close and constant in matters of mutual interest. Much of the progress we are now making in identifying overseas narcotics traffic can, in fact, be attributed to CIA cooperation." [14]

The catch was that BNDD "progress" and CIA "cooperation" went only as far as the French Mafia. CIA cooperation on Southeast Asia was another matter. The agency hindered BNDD agents and kept the press in the dark, while itself smuggling large quantities of opium via Air America.[15] A notable discrepancy arose in 1972 between CIA and BNDD estimates of the heroin traffic. CIA reports had 25 percent of the heroin coming from Mexico, the rest from Marseilles. The BNDD estimated that Southeast Asia already supplied 30 percent of the heroin on the U.S. market.[16]

* In January 1972 Nixon created, again by decree, the Office for Drug Abuse Law Enforcement (ODALE) to flush out pushers in thirty‑eight cities. Simultaneously, New York's police narcotics squad was reorganized following revelations of blatant corruption. ODALE ceased to exist on 1 July 1973 when it, the BNDD and the narcotics intelligence branches of the Justice Department and Customs Bureau were merged to become the Drug Enforcement Administration (DEA), which now operates in the U.S. and worldwide.

* On 17 July 1972 James McCord, Frank Sturgis, Bernard Barker, Eugenio Rolando Martinez, and Virgilio Gonzalez, led by Hunt and Liddy, broke into the Democrats' Watergate offices in Washington. Of these seven men, four were from Miami, four were active or former agents of the CIA, four had been involved in the Bay of Pigs invasion, and three were closely linked to the Cuban narcotics Mafia.

* The same day Nixon telegrammed Pompidou his congratulations. Two days earlier, France had closed out a series of raids against the Marseilles heroin labs. The great heroin coup was well on its way to completion.

On 9 August 1972 Nixon made William C. Sullivan the director of the Office of National Narcotics Intelligence (ONNI), which would coordinate domestic drug intelligence. Sullivan had been the president's choice to head the Huston Plan's aborted super‑intelligence agency.[17]

With Egil Krogh executive director of the Cabinet Committee on International Narcotics Control, covering foreign narcotics intelligence,[18] complete control over narcotics management was in the president's hands.

* In August 1972 U.S. troops were withdrawn from South Vietnam. The country was turned over to the CIA and a narcotics trafficking South Vietnamese government.

• In late August, in the midst of Nixon's reelection campaign, the BNDD announced the first noticeable heroin shortage on the streets of America. Nixon's battle with the French Mafia had borne fruit. Soon he would rid the U.S.A. entirely of the White Death. However, someone had forgotten to mention that returning GIs had helped triple the U.S. addict population from the 1969 figure of 250,000. In reality, then, the total heroin supply was appreciably greater than that prevailing prior to Nixon's campaign against the French. Americans, however, would reelect Nixon, who cited apparent gains in foreign affairs and the struggle against the drug plague.

* On 12 August 1972 New York crime families decided at a Staten Island summit to resume the drug traffic they had supposedly abandoned in the fifties.[19] Citing "social responsibility," they decried the Cuban and Black Mafias' sale of heroin in the suburbs to children of "decent people," and vowed that the drugs would thereafter remain in the ghetto. But the importance of the families had waned. Others, especially Trafficante's Cuban organization, had become too strong.

The heroin coup was complete by 1973. The French were out, and new labs, routes, and buyer networks were in place, with Southeast Asia the main supplier. That year the U.S. heroin supply did fall noticeably, largely because part of the plan was about to fall through. South Vietnam, Laos, and Cambodia were slipping out of U.S. hands, Forcing traffickers and bankrollers to regroup in safer surroundings, above all in Thailand. [20]

A final item of interest in 1973 was the appearance before a Senate committee of the international speculator and smuggler Frank Peroff, who had served as an undercover agent for the DEA against the Cotroni brothers of Montreal. He testified that the renegade international businessman, Robert Vesco — a major supporter of Richard Nixon — and his associate Norman Leblanc, were bankrollers of international heroin trafficking.[21]



to be continued …

Written by Kris Millegan   
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