The Carlyle Group

by JASON | 9:47 AM in |

Carlyle has more than 480 investment professionals working in offices in 20 countries. These individuals collaborate across geography, sharing industry knowledge and insight to source, research and consummate investments in Carlyle's focus industries.

... the Carlyle Group is a story of dealings inside "Iron Triangle," the place where the world's mightiest military intersects with high-powered politics and big business. It is a company whose history includes ties to CIA cover-ups and secret arms deals, and an astounding trail of corporate cronyism. By making defense buyouts the cornerstone of its business strategy, Carlyle now finds itself the beneficiary of the largest increase in defense spending in history. Indeed the stars seem to have aligned perfectly for Carlyle, in just 15 short years. With the ascension of George W. Bush to the presidency, the White House is now full of ex-Carlyle employees, friends, and business partners. And with the newly fattened defense budget, Carlyle has been able to extract massive profits from its defense holdings, like United Defense, in the wake of the terrorist attacks on September 11, 2001. It may be tough times for America, but as Bette Midler might say, everything's coming up Carlyle.

While the company flew well under the radar screen for the first decade of its life, lately success has not come without scrutiny for the Carlyle Group. After all, it's hard to remain anonymous when your employee roster includes names like George Herbert Walker Bush, James Baker III, John Major, and Arthur Levitt.

Concentrating on heavily regulated industries like defense, telecommunications, energy, and health care, Carlyle is betting that it can predict future trends in government spending and policy, or influence them outright. And by hiring former secretaries of defense, ex-presidents, the former head of the Securities and Exchange Commission, and the former chairman of the Federal Communication Commission, they are in a position to do either.

Link to the book on Google books...,M1

Comment by Wes Penre, This is a very informative video! It shows without any doubts that our government has NO INTENTION WHATSOEVER to create peace in the world, whatever they say. How could they, when they profit from war?

This is the story of the giant 'Think Tank", the "Carlyle Group", in which George HW Bush is one of the prominent members. The Carlyle group made a fortune in investments and became unbelievably wealthy. So what did they do with all this wealth? THEY BOUGHT UP THE DEFENSE INDUSTRY!

What does this mean? Well, it means that if George Bush Jr, the President of the United States, can prolong the war in Iraq as long as possible, and maybe even start a couple of new ones (perhaps with Iran?), George Bush Sr (Daddy Bush) and his partners in crime will make trillions of dollars in profit on whatever war the US is fighting by selling weapons and war equipment via their Think Tank, the Carlyle Group!

Can anybody smell a conflict of interest here? "War is where the rich man gets richer and the poor man dies". This, my friends, is what government is all about, and we as a nation just sit back and let it happen. That makes us co-responsible for the deaths of all those young American soldiers, who die in useless wars almost every day. Time to wake up, the alarm clock went off a long time ago! Wes Penre.

Translation of the first one minute forty seven seconds of this program.

"The war in Iraq does not seem to be over al all, but in the meantime the rebuilding has already started. This has unleashed fiercecompetition for contracts, which are mainly awarded to American (ed: U.S.) companies.

What is remarkable about these companies, is that they have people on their payroll from American politics and the military. Is this a conflict of interest, or is this the new global way of doing business?

It was bad enough when the Carlyle Group bought Dunkin' Donuts last year, forcing millions of conscientious caffeine addicts to look elsewhere for their daily fix. Now, it appears Carlyle has added 1600 Pennsylvania Avenue to its formidable portfolio of acquisitions.

The Carlyle Group achieved national attention in the early days of the Iraq occupation, especially after Michael Moore's "Fahrenheit 9/11" exposed the firm's umbilical ties to the Bush family and the House of Saud. For the uninitiated, Carlyle is a privately-owned equity firm organized and run by former members of the Reagan and Bush Sr. administrations.

Currently, Carlyle manages more than $44 billion in 42 different investment funds, which is an interesting fact in and of itself: Carlyle could lay claim to only a meager $12 billion in funds in December of 2001. Thanks to their ownership of United Defense Industries, a major military contractor that sells a whole galaxy of weapons systems to the Pentagon, Carlyle's profits skyrocketed after the invasion and occupation of Iraq.

Some notable present and former employees of Carlyle include former president George H.W. Bush, who resigned in 2003; James Baker III, Bush Sr.'s secretary of state and king fixer; and George W. Bush, who served on Carlyle's board of directors until his run for the Texas governorship. One notable former client of Carlyle was the Saudi BinLaden Group, which sold its investment back to the firm a month after the September 11 attacks. Until the October 2001 sellout, Osama bin Laden himself had a financial interest in the same firm that employed the two presidents Bush.

The private global investment firm Carlyle Group is part of the Mallabraca consortium seeking to buy a majority stake in Bank of Ireland, the country's oldest bank.

With the Government concerned with the influence of US defence contractor Declan Ganley, the potential presence of the Carlyle Group, also a US defence contractor, is giving some pause for this multibillion euro deal.

Labour TD Sean Sherlock stressed in the Dáil this week that the Government should be 'very careful' about who it does business with.

He cited the Carlyle Group's past relationship with the bin Laden family which invested in the firm until September 2001 when they had to liquidate their assets following Osama bin Laden's attack on the US (right).

Carlyle is also connected with both George Bushes.

Shortly after his presidency, George HW Bush became a Senior Advisor for Carlyle's Asia Advisory Board. In 2002, the Washington Post reported: 'Saudis close to Prince Sultan, the Saudi defence minister... ...were encouraged to put money into Carlyle as a favor to the elder Bush.'

Current US President George W Bush served on the board of CaterAir, which was owned by the Carlyle Group. According to a 1991 New York Times article, the director of the 1988 Republican Convention and Senior Advisor to Carlyle, suggested to the firm that the president's eldest son would 'be a positive addition to Caterair's board.'

Earlier this year, Carlyle purchased the US defence contractor Booz Allen Hamilton, taking control of a good share of US intelligence operations.

Booz Allen was investigated by a European Union panel in 2006 for its role in SWIFT, a surveillance programme the panel concluded may violate European law.

Tim Shorrock, author of the new book Spies for Hire: The Secret World of Intelligence Outsourcing, estimates that of the $50bn US intelligence budget, 70% goes to private contractors like Carlyle and Booz Allen Hamilton.

Directors of one of the world’s largest armament companies are planning on meeting in Lisbon in three weeks time. The American based Carlyle Group is heavily involved in supplying arms to the Coalition forces fighting in the Iraqi war.

It also holds a majority of shares in the Seven Up company and Federal Data Corporation, supplier of air traffic control surveillance systems to the US Federal Aviation Authority. The 12 billion dollar company has recently signed contracts with United Defense Industries to equip the Turkish and Saudi Arabian armies with aviation Defense systems.

Top of the meeting’s agenda is expected to be the company’s involvement in the rebuilding of Baghdad’s infrastructure after the cessation of current hostilities. Along with several other US companies, the Carlyle Group is expected to be awarded a billion dollar contract by the US Government to help in the redevelopment of airfields and urban areas destroyed by Coalition aerial bombardments.

The Group is managed by a team of former US Government personnel including its president Frank Carlucci, former deputy director of the CIA before becoming Defense Secretary. His deputy is James Baker II, who was Secretary of State under George Bush senior. Several high profile former politicians are employed to represent the company overseas, among them John Major, former British Prime Minister, along with George Bush senior, one time CIA director before becoming US President.

The financial assets of the Saudi Binladen Corporation (SBC) are also managed by the Carlyle Group. The SBC is headed up by members of Osama bin Laden’s family, who played a principle role in helping George W. Bush win petroleum concessions from Bahrain when he was head of the Texan oil company, Harken Energy Corporation - a deal that was to make the Bush family millions of dollars. Salem, Osama bin Laden’s brother, was represented on Harken’s board of directors by his American agent, James R. Bath.

The connection between the Bush and bin Laden families can also be traced to the collapse of the Bank of Credit and Commerce International (BCCI) in the 1990s. Members of the Anglo Pakistani bank’s board of directors included Richard Helms and William Casey, business partners of George Bush senior and former CIA agents. During their time at BCCI both Helms and Casey worked alongside fellow director, Adnan Khasshoggi, who also represented the bin Laden family’s interests in the US.

The Portugal News has been told by a reliable source that the Carlyle Group meeting in Lisbon will discuss the relationship between the Saudi Binladen Corporation (SBC) and Osama bin Laden. Many US officials claim that the SBC continues to finance his political activities, and has done so for many years. If true, this would place George Bush senior and his colleagues at the Carlyle Group in an embarrassing position. As managers of SBC’s financial investments they might well be accused of indirectly aiding and abetting the United States’ number one enemy.

ON the day Osama bin Laden's men attacked America, Shafiq bin Laden, described as an estranged brother of the terrorist, was at an investment conference in Washington, DC, along with two people who are close to President George Bush: his father, the first President Bush, and James Baker, the former secretary of state who masterminded the legal campaign that secured Dubya's move to the White House. The conference was hosted by the Carlyle Group, a private equity firm that manages billions of dollars, including, at the time, some bin Laden family wealth. It also employs Messrs Bush and Baker.

The Carlyle Group does not provide investment or other services to the general public. Carlyle has ownership stakes in 164 companies which employed more than 70,000 people and generated $16 billion in revenues in the year 2000. Formed in 1987, The Carlyle Group has invested over $5.8 billion of equity in 217 corporate and real estate transactions with an aggregate acquisition value of over $17 billion.

On 14 May 2001 The Carlyle Group announced that John Major, the former Prime Minister of Great Britain, had agreed to join the firm as Chairman of Carlyle Europe. In that capacity, Mr. Major serves as Chairman of Carlyle's European private equity funds and their advisory boards.

For more than a decade, Carlyle has been the leading private equity investor in the aerospace and defense industries completing 23 transactions representing a combined purchase price of more than $7.4 billion. In 1997 the group made a 650% profit by selling BDM International to Litton. And in December 2001, Carlyle sold off the majority of its holdings in United Defense, earning a $1 billion profit from the investment.

FBI and military intelligence officials in Washington say they were prevented for political reasons from carrying out full investigations into members of the Bin Laden family in the US before the terrorist attacks of September 11.

US intelligence agencies have come under criticism for their wholesale failure to predict the catastrophe at the World Trade Centre. But some are complaining that their hands were tied.

FBI documents shown on BBC Newsnight last night and obtained by the Guardian show that they had earlier sought to investigate two of Osama bin Laden's relatives in Washington and a Muslim organisation, the World Assembly of Muslim Youth (WAMY), with which they were linked.

The FBI file, marked Secret and coded 199, which means a case involving national security, records that Abdullah bin Laden, who lived in Washington, had originally had a file opened on him "because of his relationship with the World Assembly of Muslim Youth - a suspected terrorist organisation".

But the FBI files were closed in 1996 apparently before any conclusions could be reached on either the Bin Laden brothers or the organisation itself. High-placed intelligence sources in Washington told the Guardian this week: "There were always constraints on investigating the Saudis".

They said the restrictions became worse after the Bush administration took over this year. The intelligence agencies had been told to "back off" from investigations involving other members of the Bin Laden family, the Saudi royals, and possible Saudi links to the acquisition of nuclear weapons by Pakistan.

"There were particular investigations that were effectively killed.",4273,4293682,00.html

CHRONOLOGY: The Bushes And The Carlyle Group

FAULKNER: On September 29, The San Francisco Chronicle reported that investors had yet to collect more than $2.5 million in profits they made in trading options in the stock of United Airlines before the Sept 11 terrorist attacks. The uncollected money raises suspicions that the unidentified investors had advance knowledge of the attacks.

The Securities and Exchange Commission is investigating high levels of short sales and purchases of "put" options, on the stocks of United Airlines and American Airlines in the three business days before the attacks. Short sales and put options are bets that a stock will fall in price.

Meanwhile, the Interdisciplinary Center, a counter-terrorism think tank headed by former Israeli intelligence officers, has issued a report on Osama bin Laden's finances, saying insiders profited by nearly $16 million dollars on transactions involving the two airlines and the investment banking firm Morgan Stanley, which occupied 22 floors of the World Trade Center. And that report excluded other unusual trading activity involving insurance companies with significant exposure to damage claims resulting from the attacks.

Joining us by phone from Southern California is Michael C. Ruppert.

Ruppert is a former Los Angeles Police Department field officer and narcotics investigator whom the CIA twice tried to recruit.

In the course of investigations in the mid 1970s, he came across information the CIA was trading drugs in order to fund covert operations. He was forced out of the LAPD in November 1978 after being shot at and threatened for speaking out about CIA drug activity.

At a Town Hall meeting on November 15, 1996, Ruppert publicly confronted then-CIA director John Deutsch with information about three specific CIA drug operations. The confrontation led to an invitation to appear before the Senate Select Committee on Intelligence, where he spoke and presented written evidence concerning the CIA's infiltration of and illegal relationships with a number of police departments throughout the country.

Michael Ruppert publishes "From The Wilderness," a magazine which deals with the effects of illegal covert operations on our society.

FAULKNER: Good to have you. Do you think the CIA had advance knowledge of the attacks? Did they know a specific attack was coming?

RUPPERT: I am absolutely convinced that the Central Intelligence Agency had complete and perfect foreknowledge of the attacks, down to date, time place and location, yes.

FAULKNER: Tell us how the CIA monitors the stock market.

RUPPERT: Well, I have written several stories about this over the years. One of the primary functions of the Central Intelligence Agency by virtue of its long and very close history of relationships with Wall Street, I mean to the point where the current executive vice president of the New York Stock Exchange is a retired CIA general counsel, has had a mandate to track, monitor, all financial markets worldwide, to look for anomalous trades, indicative of either economic warfare, or insider currency trading or speculation which might affect the US Treasury, or , as in the case of the September 11 attacks, to look for trades which indicated foreknowledge of attacks like we saw.

One of the vehicles that they use to do this is a software called Promis software, which was developed in the 1980s, actually 1979, by Bill Hamilton and a firm called INSLAW, in [the] Washington D.C. area. And Promis is very unique for two reasons: first of all, it had the ability to integrate a wide range of databases using different computer languages and to make them all into one readable format. And secondly, in the years since, Promis has been mated with artificial intelligence to even predict moves in markets and to detect trades that are anomalous, as a result of those projections.

So, as recently as last year, I met with members of the RCMP [Royal Canadian Mounted Police] national security staff, who came down to Los Angeles where I am, who are investigating stolen applications of Promis software and its applications, and we reconfirmed at that time that, not only the US, but Israel, Canada, and many other countries use Promis-like software to track real-time trades in the stock markets to warn them of these events.

RAMARES: Kellia Ramares here. Mike, is it possible that the terrorists could have gotten hold of this software?

RUPPERT: Uh, no, it's, well, it is and it isn't. The key piece of evidence around September 11 is not that the software would have had any impact. The key evidence, as I heard you describing, was the trades themselves, the so-called put options and the short selling of American Airlines, United Airlines, Merrill Lynch, Morgan Stanley, and a couple of reinsurance companies in Europe, which are just really off the maps. You wouldn't need software to look at these trades and say, "Oh my God, this is directly connected to World Trade Center."

RAMARES: OK, but hindsight is 20/20. United Airlines had a lot of trouble last year: labor disputes, lots of cancellations. We were on a verge of a recession going into the attacks and Morgan Stanley's an investment banking firm. Some day traders could have seen some activity and joined the party entirely innocently. How can you make a prediction of an attack?

RUPPERT: Herzliyah, International Policy Institute in Israel which tracks counter-terrorism, also tracks financial trading. That's a clear cut sign about how closely the two are related. And their reports are very clear that between September 6 and 7 the Chicago Board Options Exchange, CBOE, saw purchases of 4,744 put options on UAL, but only 396 call options. On September 10, the day before the attacks, 4,516 put options were placed on American Airlines, against only 748 calls, calls being bets that the stock will go up, puts being that the stock will go down. No similar trading in any other airlines occurred on the Chicago Exchange in the days immediately preceding Black Tuesday. That means that someone had advance knowledge that only the stocks of these two airlines would be adversely impacted. Had it just been an industry-wide slump, then you would have seen the same kind of activity on every airline, not just these two. But what is also very anomalous, very out of whack here, is the fact that the number of put options placed, that the level of these trades was up by 1,200 percent in the three days prior to the World Trade Center attacks.

RAMARES: Give us a brief overview, really, of the connections between the CIA and the banking and investment community. Your article suggests there is a revolving door between Wall Street and the CIA.

RUPPERT: Oh, indeed there is. First of all, it's very important to note right up front that European investigators, who are tracking trades in the insurance companies, as well as the Israeli institute, have disclosed that the UAL put options were primarily held by Deutsche Bank-A.B. Brown. And its very important to note that the current Number Three at CIA, the Executive Director, a man by the name of A.B. "Buzzy" Krongard, was, until 1998, the chairman of A.B. Brown. The company went from being owned by Banker's Trust to being owned by Deutsche Bank. But this is a man effectively running CIA, who came from the bank that handled the trades.

Historically speaking, we go back to 1947, we look at Clark Clifford, who wrote the National Security Act, in 1947. He was a Wall Street banker, and a lawyer from Wall Street. He was the chairman of First American Bancshares that brought BCCI onto US shores in the late 1980s. He was given the design for the CIA by John Foster and Allen Dulles, two brothers: John Foster becoming Secretary of State, Allen becoming director of Central Intelligence, who was fired by John Kennedy. They were partners in what is until this day the most powerful law firm on Wall Street: Sullivan Cromwell. Bill Casey, the legendary CIA director from the Reagan/Iran Contra years, had been chairman of the Securities and Exchange commission under Ronald Reagan. He, in fact, was a Wall Street lawyer and a stockbroker.

I've already mentioned Dave Doherty, the Vice President of NYSE [New York Stock Exchange] who is the retired CIA general counsel.

George Herbert Walker Bush is now a paid consultant to the Carlyle Group, the 11'th largest defense contractor in the nation, very influential on Wall Street. "Buzzy" Krongard is there. John Deutsch, the former CIA director, who retired a couple of years ago, a few years ago, is now on the board of Citibanc or Citigroup. And his number three, Nora Slatkin, the Executive Director at CIA is also at Citigroup. And Maurice "Hank" Greenburg, who is the chairman of AIG insurance, which is the third largest investment pool of capital in the world, was up to be the CIA director in 1995 and Bill Clinton declined to nominate him. So there is an inextricable and unavoidable relationship between CIA and Wall Street.

FAULKNER: Michael Ruppert, this is Bonnie Faulkner. Does the CIA itself invest in the stock market?

RUPPERT: That's unknown. What is known, and what was disclosed by hearings chaired by Senator Frank Church in 1976, is that the CIA was known and proven in the Congressional Record to operate proprietary companies, some of which do trade their stock on Wall Street. One of these, Southern Air Transport, excuse me, was at it during the Iran Contra years. There are others: Evergreen Air, which may or may not be a proprietary, but has strong CIA connections; there are tons of these companies out there. It's not known if CIA manipulates markets, although I really believe that they do.

FAULKNER: Is the CIA's budget public knowledge?

RUPPERT: No. By law. Under the National Security Act of 1947 the CIA's budget is hidden in the budgets of all the other departments of government. We've never been able to pin down, because it's a secret, exactly how much money CIA gets. But the best estimates available, and these are from very good sources, are that it's around 30 billion dollars a year.

FAULKNER: So I'm assuming then that no one knows where they keep their budget. I mean, do they keep it in the bank drawing interest?

I guess we don't know.

The feeding frenzy began the morning of 9/11. As my neighbors and coworkers were choking on the debris of the World Trade Center, a windfall awaited a powerful group gathered at the Ritz Carlton hotel in Washington, D.C. The secretive Carlyle Group was holding its annual investors' conference. The private investment company, named for the swank Manhattan hotel where the group was formed in 1987, has tentacles in both the Washington power elite and the Saudi ruling class. In town for the meetings was former President George H. W. Bush, then a senior adviser to Carlyle. He was joined by a cast of characters who have been fixtures in Bush regimes over the years.
There was Reagan's former secretary of defense Frank Carlucci, then head of the Carlyle Group. James Baker III, secretary of state under Bush Sr. - better known as the choreographer of Bush Jr.'s theft of the 2000 election - was also there in his capacity as Carlyle's senior counsel. But it wasn't just Bush's inner circle gathering that day. They were joined by a man by the name of Shafiq bin Laden, brother of Osama bin Laden. It wasn't the first time a bin Laden had worked with Washington's power elite, and this particular bin Laden was a longtime friend and benefactor of the Bush clan. Bush Sr. left the meetings early, but the rest of the men were just finishing breakfast when Shafiq's brother's plot culminated in airplanes slamming into the World Trade Center and the Pentagon.

A bizarre coincidence? No, the meeting was just business as usual for the Bushes, whose family fortunes have been greased by Saudi oil money for decades. That helps explain why, when the United States grounded all aircraft on that terrible day, one exception was made: Top White House officials authorized planes to pick up 140 Saudis, including two dozen members of the bin Laden family, from ten cities and spirit them back to Saudi Arabia. Dale Watson, the former head of counterterrorism at the FBI, conceded in Vanity Fair that the departing Saudis "were not subject to serious interviews or interrogations. "

Tom Kinton, director of aviation at Boston's Logan Airport, was incredulous, according to Vanity Fair. With the airport still closed and reeling from the 9/11 attacks, Kinton received the order to allow the bin Ladens to fly. "We were in the midst of the worst terrorist act in history and here we were seeing an evacuation of the bin Ladens!" he exclaimed...

A month after the terror attacks, the Carlyle Group took its subsidiary, United Defense, public. It noted in its financial filings that "the Bush administration's recently published Quadrennial Defense Review calls for ... increasing investment ... to enable U.S. military forces to more effectively counter emerging threats."
Translation: We just got check-writing privileges at the U.S. Treasury.

Carlyle netted profits of $237 million in that one day, making three times as much on paper. The old adage has never been truer: It pays to have friends in high places.

It is hard to imagine an address closer to the heart of American power. The offices of the Carlyle Group are on Pennsylvania Avenue in Washington DC, midway between the White House and the Capitol building, and within a stone's throw of the headquarters of the FBI and numerous government departments. The address reflects Carlyle's position at the very centre of the Washington establishment, but amid the frenetic politicking that has occupied the higher reaches of that world in recent weeks, few have paid it much attention. Elsewhere, few have even heard of it.

This is exactly the way Carlyle likes it. For 14 years now, with almost no publicity, the company has been signing up an impressive list of former politicians - including the first President Bush and his secretary of state, James Baker; John Major; one-time World Bank treasurer Afsaneh Masheyekhi and several south-east Asian powerbrokers - and using their contacts and influence to promote the group. Among the companies Carlyle owns are those which make equipment, vehicles and munitions for the US military, and its celebrity employees have long served an ingenious dual purpose, helping encourage investments from the very wealthy while also smoothing the path for Carlyle's defence firms.

But since the start of the "war on terrorism", the firm - unofficially valued at $3.5bn - has taken on an added significance. Carlyle has become the thread which indirectly links American military policy in Afghanistan to the personal financial fortunes of its celebrity employees, not least the current president's father. And, until earlier this month, Carlyle provided another curious link to the Afghan crisis: among the firm's multi-million-dollar investors were members of the family of Osama bin Laden.

But what sets Carlyle apart is the way it has exploited its political contacts. When Carlucci arrived there in 1989, he brought with him a phalanx of former subordinates from the CIA and the Pentagon, and an awareness of the scale of business a company like Carlyle could do in the corridors and steak-houses of Washington. In a decade and a half, the firm has been able to realise a 34% rate of return on its investments, and now claims to be the largest private equity firm in the world. Success brought more investors, including the international financier George Soros and, in 1995, the wealthy Saudi Binladin family, who insist they long ago severed all links with their notorious relative. The first president Bush is understood to have visited the Binladins in Saudi Arabia twice on the firm's behalf.

But if the Binladins' connection to the Carlyle Group lasted no more than six years, the current President Bush's own links to the firm go far deeper. In 1990, he was appointed to the board of one of Carlyle's first purchases, an airline food business called Caterair, which they eventually sold at a loss. He left the board in 1992, later to become Governor of Texas. Shortly thereafter, he was responsible for appointing several members of the board which controlled the investment of Texas teachers' pension funds. A few years later, the board decided to invest $100m of public money in the Carlyle Group. The firm's magic touch was already bringing results. Today, it is proving as fruitful as ever.

AMY GOODMAN: The Carlyle Group is one of the world's largest and most secretive investment funds. Nicknamed the Ex-President's Club, Carlyle's employees have included both President Bush, H.W. and George W. Bush, former British Prime Minister John Major, former Secretary of State James Baker, and former Defense Secretary Frank Carlucci. Amidst growing public scrutiny over its dealings, the company has recently scaled back its holdings in military contractors and its links to controversial political figures.

But that appears to be changing. On Friday, the intelligence firm Booz Allen Hamilton said it would sell its government-oriented unit to Carlyle Group for $2.5 billion. Booz Allen has been a major figure in the privatization of government intelligence. Current National Intelligence Director Mike McConnell was Booz Allen's director of defense programs before his appointment last year. Booz Allen has been deeply involved in some of the Bush administration's most controversial counterterror programs, including the infamous Total Information Awareness data-mining scheme. The Carlyle-Booz Allen deal awaits shareholder and regulator approval.

Tim Shorrock is the author of Spies for Hire: The Secret World of Intelligence Outsourcing. In a new article for CorpWatch, Shorrock says Carlyle's purchase of Booz Allen would lead to its "re-[emergence] as the owner of one of America's largest private intelligence armies." Tim Shorrock joins us now from Washington, D.C. Welcome to Democracy Now!, Tim.

AMY GOODMAN: It's good to have you with us. Well, start off by talking about the significance of Carlyle buying, if it's approved, Booz Allen's government unit.

TIM SHORROCK: Well, as you said before, as you said earlier, Carlyle has kind of scaled down its defense investments in recent years, but this is a major plunge back into it. Booz Allen Hamilton is one of the largest intelligence contractors in America and also plays a very strategic role, I would say, in US intelligence as an adviser to agencies such as the National Security Agency. And it also advises all the key combat commands of the United States military and other key agencies such as the Central Intelligence Agency and the National Geospatial-Intelligence Agency. And they don't just provide technology. They provide, you know, all kinds of expertise and all kinds of management, consulting to these agencies, you know, help them decide how to spend their money down the road. And they have many, many people on staff who have played very senior roles in intelligence.

AMY GOODMAN: Can you talk about Michael McConnell and his journey from Booz Allen to National Intelligence?

TIM SHORROCK: Well, McConnell began as an intelligence officer in the US Navy. He became well known to Americans when he was the intelligence adviser to Colin Powell during the first Gulf War. And then after that, he was appointed to be director of the National Security Agency at the very tail end of the first Bush administration. He ran the National Security Agency, which of course does eavesdropping and surveillance on telephone calls and emails all over the world, including in the United States. He ran the NSA for a few years, and then he went directly to Booz Allen, where he became the director-he was a vice president of Booz Allen, he was a director of their military intelligence programs.

The important thing for readers-for listeners to know about the military intelligence is that the Pentagon controls about 85 percent of the entire intelligence budget. And so, when we're talking about military intelligence, we're talking about a huge swathe of intelligence. And so, in that position, he advised the NSA, he advised many of the other agencies. And so, he played a very important role in intelligence. And I would say that people like McConnell, when they're in the private sector playing this kind of consulting role to the agencies, they might as well be called an intelligence official with a proviso that they are working for the private sector. So then, as you also mentioned, during his time at Booz Allen, they played an important advisory role in many important Bush's administration programs, such as Admiral Poindexter's program, which was designed to, you know, collect all kinds of information on American citizens to root out-to allegedly root out terrorism here.

AMY GOODMAN: Tim Shorrock, can you lay out what you call the intelligence-industrial complex?

TIM SHORROCK: Well, in my book Spies for Hire, I describe this intelligence-industrial complex as a $50 billion industry, and I base that on what our intelligence budget is now and figures I've gotten on the percentage of money that's actually spent on contracts. It's about 70 percent of our entire intelligence budget goes to private contracts.

So this complex is about-I would say about a hundred companies. There's many more, but, you know, a hundred companies that really play important roles have major contracts. And they range in size from Lockheed Martin and companies like Northrop Grumman, big defense contractors that we usually associate with, you know, building planes or big ships are very involved in intelligence at all levels, to small companies like Spectel, which is a little company in Virginia that employs about 200 or 300 people with high-level security clearances who go and work for the CIA and other agencies and missions in places like Iraq and Afghanistan.

You also have companies like Booz Allen, which are more like consulting companies that have millions of dollars, hundreds of millions of dollars in contracts with the agencies. Booz Allen, I might add, also not only has contracts with the various agencies, but as well as with the Office of the Director of National Intelligence. So they're advising our intelligence leaders on, you know, what kind of technology to buy, all aspects of intelligence.

AMY GOODMAN: As you say, Mike McConnell, the Director of National Intelligence, is the first contractor in US history to take the leading role in the US intelligence community.

TIM SHORROCK: That's right. And that's a pretty important fact for people to know. I mean, in the past, leaders of the intelligence-there's only been, you know, two directors of National Intelligence under the intelligence, so-called, reform bill that passed in 2004. The first one was an ambassador, Negroponte, and then McConnell took over. But never in the past has there been someone gone straight from the private sector to running US intelligence. They always come out of the-in the past, it was always the Director of Central Intelligence was the director of all intelligence, was the President's primary adviser on intelligence. So here, you have somebody who spent, you know, over a decade as a very high-level private consultant running intelligence operations for profit being the President's primary adviser on intelligence.

AMY GOODMAN: Tim Shorrock, start naming names. Talk about the US corporations, the multinational companies that are involved in the intelligence-industrial complex.

TIM SHORROCK: Well, like I said, there's a lot of companies that people recognize, because they're big defense contractors, and they've grown-like Lockheed Martin, Northrop Grumman, Raytheon, BEA Systems of Britain, for example-they've grown in intelligence by-often by buying smaller companies and putting together intelligence units of their own.

There's also companies like-at sort of the middle level, I call them, companies like CACI International (CACI), which as listeners know is-was one of the contractors involved in the prisoner abuse scandal at Abu Ghraib. They're a very, very important intelligence contractor, and they operate at all levels of all the agencies, from the CIA to the NSA to many military intelligence agencies.

There's other companies here in Washington. There's one called Mantec International, for example, that does a lot of work for the National Security Agency, particularly in places like Iraq and Afghanistan, where they're out actually on the frontlines, you know, tracking enemy weapons systems and listening in on conversations between insurgent groups and helping the US military track people down.

So, it covers a very wide range of companies. And probably most of these companies, very few people know about them.

We talked at the top of the hour about Carlyle buying Booz Allen. Carlyle, in 2003, bought a company called QinetiQ, which is spelled with a Q. It's a British company. And QinetiQ used to be the defense intelligence research group or research unit of the British military, and it was privatized in the early part of the Bush administration. The Carlysle Group bought it, pumped hundreds of millions of dollars of investment capital into it, and it was-already had contracts-QinetiQ already had contracts with the Pentagon, various defense agencies here. But with Carlyle's money, they really advanced into the intelligence market. And with that capital, QinetiQ bought five or six medium- sized intelligence companies and really expanded into the intelligence-industrial complex.

And that's sort of typical of the way companies expand. They buy companies primarily for the contracts they hold with intelligence agencies. So Carlyle did it with QinetiQ. Then they sold their holdings, made about a half-a-billion-dollar profit off of it. And then, they've obviously been looking around and decided Booz Allen would make a very profitable investment. And I'm sure over the next few years we will see a fair amount of expansion from Booz Allen, as Carlyle pumps in more capital and they buy other companies and grow even larger.

The implosion of the Carlyle Capitol Corporation just weeks before the Bear Stearns debacle last March is little more than a distant memory in the minds of most people. Yet the facts surrounding Carlyle Capitol, like those surrounding the J.P. Morgan/Bear Stearns/WaMu deals - not to mention the JP Morgan/Enron scandal - certainly deserve further scrutiny.

To be sure, derivatives, along with "innovative" accounting techniques, are a unifying theme of these and similar eye-brow raising, but effectively submerged, stories. Chief among these submerged stories are those which surround Carlyle Capitol and its parent company the Carlyle Group. Here's what can be said about each.
The derivatives-heavy Carlyle Capitol had been the first of 55 funds the Carlyle Group took public between July 2007 and March 2008. It went belly up as its mortgage-backed assets began to implode and a group of the world's biggest banks, including JP Morgan, refused to hold off on margin calls and liquidation of assets - moving instead to seize and sell what was left of the fund's assets. While the losses to the Carlyle Group were "minimal from a financial standpoint", it nevertheless represented a major embarrassment for the giant private equities firm - which, it must be mentioned, had $76 billion tied up in exactly the same kinds of "derivative investment tools" as its "separate legal and business entity" aka the Carlyle Capitol Corporation.

Perhaps it is mere coincidence that the Carlyle Group is registered in Britain (but based in Washington, D.C.) while Carlyle Capitol was based on Guernsey Island off the British coast. Nevertheless the question persists as to whether Carlyle Capitol was functioning as an offshore entity created as a means of misstating, or perhaps burying, certain material financial statements. You know, the kind of activity that subjected JP Morgan to Congressional Investigation in 2002, proof of which activity the Congressional Investigating Committee was given audiotapes and copies of incriminating emails.

The Carlyle Group itself has what can only be described as a controversial history with trails leading to 9-11, the current war on terror, the first Gulf War, Afghanistan and elsewhere. It also has had extensive "counter party links" to Enron, Arthur Andersen, Global Crossing, the Saudi Royal Family, and yes, even the Bin Ladens.

Despite its lack of notoriety, one can find Carlyle connections turning up everywhere. For example and in addition to the "counter party web" of the Texas teachers pension fund mentioned above, an August 10, 2005 NewsMax article revealed that the Carlyle Group had caught the attention of federal prosecutors after Illinois Teachers Retirement System officials raised concerns about the $4.5 million in fees offered by Carlyle to one Robert Kjellander (a lobbyist, Bush campaigner and newly appointed treasurer of the Republican National Committee) for helping land business with the Illinois teachers pension fund.

Bear Stearns, J.P. Morgan, Carlyle Capitol, the Carlyle Group and a VERY long list of other rarefied corporations are (or were, as the case may be) all heavily involved in derivatives instruments that are still in the process of unwinding themselves from their myriad counter party entanglements across the globe. Many, if not all, of these firms have long used their financial clout to influence government officials, not to mention the media and educational institutions - and many are either directly or indirectly heavily invested in the defense industry among other industries. But when all is said and done, there is no other private business which has so successfully navigated the heady waters of what is known as the Iron Triangle - a place where industry, government and the military converge - than the Carlyle Group.

A most striking example can be found in Iraq, where we find two former Secretaries of State heading up a secret investment deal involving a "complex transfer of ownership of as much as $57 billion in unpaid Iraqi debts." Seems that former Secretary of State James Baker (and senior counsel for the Carlyle Group) just happened to be appointed by Bush II as the special envoy to negotiate Iraqi "debt relief". The objective of this envoy was to see to it that "[t]he debts, now owed to the government of Kuwait, would be assigned to a foundation created and controlled by a consortium in which the key players are the Carlyle Group and the Albright Group, which is headed by another former Secretary of State, Madeleine Albright."

We also have Frank Carlucci, who not only served as Chairman of the Carlyle Group at the time of the September 11 attack, but had served as a former Secretary of Defense in the Reagan Administration and a Deputy Director of the CIA during the Carter Administration. Perhaps even more curiously - and again at the time of the September 11 attacks - Carlucci was serving on the RAND Corporation Board of Trustees and was also the co-chair of the Rand Center for Middle East Public Policy Advisory Board. The Rand Corporation, it can be said, is one of many nonprofit (non-taxpaying) "think tanks" where people get paid to think, and Frank Carlucci was among those who were being paid to think about the situation in the Middle East.

Fortuitously for the Carlyle Group, it "cashed out many of its investments when the stock of defense companies rose dramatically in the aftermath of September 11 and the buildups to the Afghanistan and Iraq wars."

In the aftermath of the September 11 attack, the Carlyle Group, together with Halliburton, has made millions of dollars off the Iraq War. In addition Carlyle has "reaped millions of dollars from government contracts on things such as cleaning up anthrax-infected buildings - including the Hart Senate Office Building - making X-ray scanners, providing logistics support to the U.S. military, making metal-bond structures in fighter jets and missiles, and providing employee background checks for the government."

Although Carlyle's counter party webs are seemingly endless, its growing involvement in public/private partnership ventures is also exceedingly troublesome, and strangely under-reported. In addition to the already established afore-mentioned partnering activities, the announcement of a newly formed team whose sole objective was to engage in public/private ventures came after a public furor had been created over the fact that DP World, a company owned by the United Arab Emirates, had acquired a British company that manages operations at six U.S. Ports. Soon after this news became public, the House Appropriation Committee voted on March 8, 2006 to prevent DP World from taking control of six U.S. Ports, and that story quickly faded into oblivion.

Perhaps by happenstance and the very next day after the House vote - the Carlyle Group announced that it had established an eight-person team co-headed by Robert Dove, former executive vice-president at Bechtel and Barry Gold, former managing director and co-head of the structured finance group at Citigroup/Salomon Smith Barney. According to the Media Room section of its own website, the team's objective is to invest "in the [public] infrastructure sector, including investments in transportation and water facilities, airports, bridges, ports, stadiums and other public infrastructure primarily in transactions ranging from $100 million to more than $1 billion. The team will engage in public-private partnerships (PPP) with governments at all levels as well as purchase projects outright or through long term concessions."

Increasingly, cash strapped local governmental entities are looking to these public-private partnerships for relief for their liquidity problems. To be sure, the argument for such projects carries a certain appeal because, as the logic goes, what other options do state, county and municipal governments have, after they downsize and increase taxes, besides holding what amount to giant fire sales in which public assets are sold to the highest bidder or public-private partnership deals are struck? What all too often is not clearly and completely understood by the average citizen - or even for that matter, his elected officials - is that "[i]n this arrangement, government and business "co-own" the former government asset and their purpose is to make a profit."

Moreover, and given the allure of very handsome profits that stand to be generated by this "new asset class" it is no surprise that "banks and private investment firms have fallen in love with public infrastructure. They're smitten by the rich cash flows that roads, bridges, airports, parking garages, and shipping ports generate-and the monopolistic advantages that keep those cash flows as steady as a beating heart. But are investors getting an even better deal [than the public]? It's a question with major policy implications as governments relinquish control of major public assets for years to come. The aggressive toll hikes embedded in deals all but guarantee pain for lower-income citizens-and enormous profits for the buyers. What's more, some public interest groups complain that the revenue from the higher tolls inflicted on all citizens will benefit only a handful of private investors, not the commonweal."

What should likewise come as no surprise in all this is the fact that "[i]nvestment firms including Goldman Sachs, Morgan Stanley, and the Carlyle Group are approaching state politicians with advice to sell off public highway and transportation infrastructure. When advising state officials on the future of this vital public asset, these investment firms fail to mention that their sole purpose is to pick up infrastructure at the lowest price possible in order to maximize returns for their investors. Investors, most often foreign companies, are charging tolls and insisting on "noncompete" clauses that limit governments from expanding or improving nearby roads."

With respect to the Carlyle story in particular, what is most unfortunate is that "[o]utside of the conservative Judicial Watch and the muckraking Center for Public Integrity, there has been little public interest in the Carlyle system of capitalism and where it is going. Congress, meanwhile, is too busy seeking Carlyle's advice even to ask the question. The people who run Carlyle may hate the word secrecy, but their words and actions make it impossible to know where the policy-making ends and the money-making begins."

Meet The Carlyle Group - Former World Leaders and Washington Insiders Making Billions in the War on Terrorism

"On September 24, President George W. Bush appeared at a press conference in the White House Rose Garden to announce a crackdown on the financial networks of terrorists and those who support them. U.S. banks that have assets of these groups or individuals must freeze their accounts, Bush declared. And U.S. citizens or businesses are prohibited from doing business with them.

"But the president, who is now enjoying an astounding 92 percent approval rating, hasn't always practiced what he is now preaching: Bush's own businesses were once tied to financial figures in Saudi Arabia who currently support bin Laden.

"In 1979, Bush's first business, Arbusto Energy, obtained financing from James Bath, a Houstonian and close family friend. One of many investors, Bath gave Bush $50,000 for a 5 percent stake in Arbusto. At the time, Bath was the sole U.S. business representative for Salem bin Laden, head of the wealthy Saudi Arabian family and a brother (one of 17) to Osama bin Laden. It has long been suspected, but never proven, that the Arbusto money came directly from Salem bin Laden. In a statement issued shortly after the September 11 attacks, the White House vehemently denied the connection, insisting that Bath invested his own money, not Salem bin Laden's, in Arbusto.

"In conflicting statements, Bush at first denied ever knowing Bath, then acknowledged his stake in Arbusto and that he was aware Bath represented Saudi interests. In fact, Bath has extensive ties, both to the bin Laden family and major players in the scandal-ridden Bank of Commerce and Credit International (BCCI) who have gone on to fund Osama bin Laden. BCCI defrauded depositors of $10 billion in the '80s in what has been called the 'largest bank fraud in world financial history' by former Manhattan District Attorney Robert Morgenthau. During the '80s, BCCI also acted as a main conduit for laundering money intended for clandestine CIA activities, ranging from financial support to the Afghan mujahedin to paying intermediaries in the Iran-Contra affair.

"When Salem bin Laden died in 1988, powerful Saudi Arabian banker and BCCI principal Khalid bin Mahfouz inherited his interests in Houston. Bath ran a business for bin Mahfouz in Houston and joined a partnership with bin Mahfouz and Gaith Pharaon, BCCI's frontman in Houston's Main Bank.

"The Arbusto deal wasn't the last time Bush looked to highly questionable sources to invest in his oil dealings. After several incarnations, Arbusto emerged in 1986 as Harken Energy Corporation. When Harken ran into trouble a year later, Saudi Sheik Abdullah Taha Bakhsh purchased a 17.6 percent stake in the company. Bakhsh was a business partner with Pharaon in Saudi Arabia; his banker there just happened to be bin Mahfouz.

"Though Bush told the Wall Street Journal he had 'no idea' BCCI was involved in Harken's financial dealings, the network of connections between Bush and BCCI is so extensive that the Journal concluded their investigation of the matter in 1991 by stating: 'The number of BCCI-connected people who had dealings with Harken 'all since George W. Bush came on board' raises the question of whether they mask an effort to cozy up to a presidential son.' Or even the president: Bath finally came under investigation by the FBI in 1992 for his Saudi business relationships, accused of funneling Saudi money through Houston in order to influence the foreign policies of the Reagan and first Bush administrations.

"Worst of all, bin Mahfouz allegedly has been financing the bin Laden terrorist network making Bush a U.S. citizen who has done business with those who finance and support terrorists. According to USA Today, bin Mahfouz and other Saudis attempted to transfer $3 million to various bin Laden front operations in Saudi Arabia in 1999. ABC News reported the same year that Saudi officials stopped bin Mahfouz from contributing money directly to bin Laden. (Bin Mahfouz's sister is also a wife of Osama bin Laden, a fact that former CIA Director James Woolsey revealed in 1998 Senate testimony.)

"When President Bush announced he is hot on the trail of the money used over the years to finance terrorism, he must realize that trail ultimately leads not only to Saudi Arabia, but to some of the same financiers who originally helped propel him into the oil business and later the White House. The ties between bin Laden and the White House may be much closer than he is willing to acknowledge." --Wayne Madsen, 10/22/01


AIG’s former CEO, Maurice “Hank” Greenberg, remains a pivotal figure connected to the institution, which he has fought against, sued, and publicly lambasts the officials in charge of his former company, his “baby.”

Greenberg is a member of world planning groups (Council on Foreign Relations, the Bilderberg Group, the Trilateral Commission) and the Heritage Foundation, a former candidate for CIA director (1995). He is longtime friend of the Bush family. David Boies (of Bush v. Gore fame) is his attorney. So well-connected is Greenberg that he was considered as a nominee for CIA director by Bill Clinton in 1995. The profile of Greenberg in the June 20, 2005, edition of Time magazine, “Down But Not Out”, details Greenberg’s career as a government asset, foreign policy guru, and strongman.

In 2005, while still heading AIG, Greenberg was the target of multiple investigations into the orchestration of sham transactions, the inflation of reserves, illegal stock trades, deception, and book-cooking in an investigation by Eliot Spitzer, who declared that AIG was “a black box run with an iron fist by a CEO who did not tell the public the truth.” Spitzer’s probes of AIG, and other Wall Street malfeasance, was subsequently and conveniently stopped in its tracks, when Spitzer became entangled in a prostitution scandal.

Although Greenberg was forced to resign as CEO and chairman of the AIG board, he remains,to this day, the CEO of Starr International (SICO) and C.V. Starr, the private holding companies that control billions in AIG stock. It is the Starr companies that constitute the conglomerate’s original roots as an intelligence-related proprietary. In other words, Greenberg remains in charge of the heart of AIG.

For the past few weeks, the US stock market has enjoyed a robust rally, despite otherwise nightmarish economic news. One of the factors that sparked this rally was the news that major banks such as Citigroup, JP Morgan Chase and Bank of America -- banks that were reportedly on the verge of collapse, and subsequently major recipients of TARP bailout funds -- posted profits in January and February 2009.

How was this possible?

A report by Tyler Durden, citing an anonymous insider trader involved with AIG trades, reveals that manipulation fraudulently transferred US taxpayer money to AIG’s counter-parties -- the top banks and financial institutions -- with AIG as the “pass-through.” The profit report sparked a market rally that comes at the expense of US taxpayers.

The complete report (thanks to Jenna and the Mike Ruppert Blogspot for this find) is damning and startling:

Exclusive: Big Banks’ Recent Profitability Due to AIG Scam?


“AIG, knowing it would need to ask for more capital from Treasury imminently, decided to throw in the towel, and gifted major bank counter-parties with trades which were egregiously profitable to the banks, and even more egregiously money-losing to the U.S. taxpayers, who had to dump more and more cash into AIG, without having the U.S. Treasury Secretary Tim Geithner disclose the real extent of this -- for lack of a better word -- fraudulent scam.

“ . . . What this all means is that the statements by major banks, i.e., JP Morgan Chase, Citi, and BofA, regarding abnormal profitability in January and February were true, however these profits were a) one-time in nature due to wholesale unwinds of AIG portfolios, b) entirely at the expense of AIG, and thus taxpayers, c) executed with Tim Geithner’s (and thus the administration’s) full knowledge and intent, d) were basically a transfer of money from taxpayers to banks (in yet another form) using AIG as an intermediary [my emphasis-LC].

“For banks to proclaim their profitability in January and February is about as close to criminal hypocrisy as is possible. And again, the taxpayers fund this “one time profit,” which causes a market rally, thus allowing the banks to promptly turn around and start selling more expensive equity . . . also funded by taxpayers’ money flows into the market. If the administration is truly aware of these events (and if Zero Hedge [the name of the author-LC] knows about it, it is safe to say Tim Geithner also got the memo), then the potential fallout would be staggering once this information makes the light of day . . .

“This wholesale manipulation of markets, investors and taxpayers has gone on long enough.”

Bush/Cheney’s war is also Obama’s war

On March 27, 2009, Obama launched his “new strategy for Afghanistan.” This new strategy is a continuation and expansion of the Bush/Cheney war plan, hatched in the wake of the false flag operation of 9/11, utilizing the identical “war on terrorism” and 9/11 lies as justification.

As articulated by Obama:

“I want the American people to understand that we have a clear and focused goal: to disrupt, dismantle and defeat Al-Qaeda in Pakistan and Afghanistan and to prevent their return to either country in the future. That is a cause that could not be more just.

“I remind everybody, the United States did not choose to fight a war in Afghanistan. Nearly 3,000 of our people were killed on Sept. 11, 2001, for doing nothing more than going about their daily lives.”

The consensus “Al-Qaeda” deception is not only alive and well under Obama, it is now the justification for a surge of 21,000 US troops into Afghanistan, massive covert operations throughout Central Asia and the Middle East, and an even more aggressive “war on terrorism.” This is the conquest of the “Grand Chessboard” that the Anglo-American elites wanted to execute after 9/11, but “squandered” due to the Bush/Cheney administration’s “fumble” in Iraq.

Obama, who made the rounds with the G-20 leadership, will not fumble with a war that is consistent with the “war on terrorism” goals that he has articulated for years, and promised to deliver (to his New World Order “bosses”) throughout his campaign.

As detailed by Michel Chossudovsky in “The Democrats endorse the “Global War on Terrorism”: Obama “goes after Osama,” the Obama promise is more perpetual war:

“9/11 constitutes for Obama the main justification for waging a humanitarian war in the Middle East and Central Asia. In this regard, his position does not differ from that of the Bush administration.

“Withdraw from Iraq, but remain in Afghanistan. Confront Iran, challenge Russia . . . Apart from the rhetoric of ‘bringing the troops home’ from war torn Iraq, which may or may not be carried out, what distinguishes the Democrats from the Republicans?

“A more articulate, knowledgeable and charismatic President?

“A more dignified and diplomatic approach to US foreign policy?

As a pacifying and unifying icon, Obama was positioned to perpetuate the cover-up of the American Empire’s crimes, and retrieve the “squandered opportunity” presented by the false-flag operation of 9/11: a world united behind imperial war.

“An opportunity to the US ruling elite to ‘present a different face to the world that could revive illusions to its democratic pretensions, not only internationally but within the United States as well.’ . . .

“A spurious and counterfeit ‘humanitarian’ approach to Empire, which serves to mask the truth and gain popular support.

“A less reckless Commander in Chief, who has an understanding of geopolitics and is capable of taking foreign policy decisions. A more carefully thought out military agenda than that experienced during the Bush administration? But no substantive shift in direction.

“A means to quelling mounting dissent and opposition to the ruling corporate establishment by providing the illusion that the Democrats constitute a Real Alternative.

“A means to sustaining the illusion that African-Americans can move up the social ladder in America and that their fundamental rights are being upheld.

“A means to undermining real progressive movements by further embedding civil society organizations, trade unions and grass roots organizations, not to mention “Leftist” intellectuals into the realm of the Democratic Party.

“A distraction from the extensive war crimes committed under successive US administrations.

“A ‘human face’ to war and globalization?”

The Obama administration’s most telling criminal hand was revealed in its handling of American International Group (AIG), one of the largest beneficiaries of the “bailout” frenzy. The Obama-AIG conspiracy, which continues to unfold, is also the least well understood.

While popular “outrage” has been channeled (by the corporate media, Obama, and Congress) to focus on the least important symptoms of the problem -- bonuses paid to AIG executives -- the greater crime that is AIG itself has gone unnoticed. As was the case with Enron, and with every action of Bush/Cheney, the AIG “outrage” is another “limited hangout” and cover-up.

AIG is not “too big to fail.” It is simply too important a repository of dirty money and dirty secrets to be exposed. Barack Obama and his administration know this.

AIG, one of the largest pools of investment capital on earth, is also one of the largest launderers of drug money and illegal funds for covert operations. Mike Ruppert’s investigation “AIG” (From The Wilderness, August 14, 2001) exhaustively deconstructed Greenberg and AIG, exposing continuing connections to covert operations, narco trafficking, money laundering, and AIG’s central role in the Wall Street/Washington power nexus.

AIG’s involvement in US covert operations stretches back to World War II, in its roots as C.V. Starr, the intelligence-related proprietary founded by OSS agent Cornelius Vander Starr. The Starr proprietary was connected to CIA/OSS figures Paul Helliwell and Tommy Corcoran. The notorious CIA fronts connected to C.V. Starr, including Civil Air Transport, Sea Supply, and Air America/Pacific Corp were exposed by Peter Dale Scott in his book Drugs, Oil, and War: The United States in Afghanistan, Colombia, and Indochina.

It is also a huge financial “pass-through,” whose counter-parties include Goldman Sachs and (not surprisingly) the same major financial institutions that are the top recipients of the US government’s TARP bailout.

It is no surprise that Barack Obama is the top recipient of AIG funds. AIG’s money also lines the pockets of other members of the Obama administration, and prominent members of Congress, including Senator Christopher Dodd, who has been accused of a sweetheart deal aiding AIG.

Ramos' former foreign secretary Roberto Romulo is the Philippines' "senior international advisor on international competitiveness" under Arroyo. Romulo, a vociferous corporate globalization advocate, heads the Pacific Economic Cooperation Council (PECC), an executive lobbying body that promotes "free trade."

Former President Fidel V. Ramos is Arroyo's "special envoy for international opportunities." Despite his denials about the importance of his role, Ramos functions essentially as the country's co-president.

He is also a direct agent of the Bush oligarchy.

Ramos is a senior advisor of the Carlyle Group and the head of Carlyle's Asian advisory board. Its directors include former US president George Herbert Walker Bush, former US secretary of state James Baker, current US secretary of state Colin Powell, former SEC chairman Arthur Levitt, former UK Prime Minister John Major, and former South Korean Prime Minister Park Tae-Joon.

Carlyle's client list has included the likes of the bin Laden family and George Soros (a major player involved in the so-called Asian economic crisis of the late 1990s). Saudi prince Alwaleed Bin Talal has been one of Carlyle's major investors. Its chairman is former Reagan administration defense secretary Frank Carlucci. Carlyle has major stakes in Taiwan, Singapore, South Korea, Japan and China, which was recently admitted into the World Trade Organization.

During his presidency, Ramos was Washington's best friend. As Daniel Shirmer described in Fidel Ramos: In the Footsteps of Marcos": "Ramos follows the lead of Ferdinand Marcos in willingness to open the Philippines to foreign capital, with minimal restraint. He follows the lead of Marcos in solicitous attention to the claims of the U.S. military, covered over when politically expedient by gestures of nationalist intent."

Much of Philippine economic policy is shaped, or at least influenced, by foreigners and multinational corporate oligarchs. As revealed by Tuazon in, President Arroyo's highly influential 13-member "International Board of Advisers" is headed by a virtual who's who of elite world finance.

Heading the group is Maurice "Hank" Greenberg, chairman of American International Group (AIG), the world's third largest capital investment pool and a leading member of the World Trade Organization:.

US Army, World War II President of AIG in 1962, CEO in 1967 and Chairman in 1989 Vice chairman, Council on Foreign Relations Member of both Bilderberger Group and Trilateral Commission Member, Heritage Foundation Vice chairman, Center for Strategic and International Studies Chairman, Maurice R. Greenberg Center for Geoeconomic Studies (Council on Foreign Relations) Member, board of directors of New York Stock Exchange Former director of the Federal Reserve Bank Nominated for CIA director in 1995

Greenberg's direct involvement in US-Far East policy is telling. As revealed in a two-part investigation of American International Group by Michael C. Ruppert (A.I.G., From The Wilderness, August 14, 2001), AIG's insurance operations, including the entire period under Greenberg's leadership, have been connected to CIA covert operations.

AIG's predecessor, Asia Life/C.V. Starr Insurance Companies, operated out of the Office of Strategic Services (OSS) spy agency during World War II. (AIG was formed in the 1960s as a holding company for Starr. Greenberg was C.V. Starr's handpicked successor.) C.V.Starr enjoyed long and profitable drug/covert operations relationships with the likes of CIA legend Paul Helliwell (head of OSS World War II intelligence in China), and CIA-connected lawyer Tommy Corcoran, and CIA proprietary fronts such as the infamous opium-smuggling airlines Civil Air Transport (which later became Air America) and Sea Supply Inc., and Pacific Corporation. Today, approximately a third of AIG's profits come from its Far East operations.

Directly relevant to the post-9/11 events, current members of AIG's board of directors include former US ambassador and CFR member Richard Holbrooke, a major post-9/11 war advisor to the Bush administration and business partner of George Soros. Also on the board is Frank Wisner, Jr., a director of Enron, and son of one of the prime CIA operatives, Frank Wisner Sr. When Wisner, Jr., was the US Ambassador to the Philippines (1991–92), he helped Enron win contracts to run two Subic Bay power plants (that were the subject of fierce local opposition).

Not coincidentally, the board chairmen of AIG's Philippine affiliate, Phil-Am Life Insurance, is Roberto Romulo himself (see above).

Paul Helliwell, OPC, and the CIA

In areas where Communist forces have appeared strong, the United States, at least since 1945, has resorted repeatedly to supportive counterviolence from mobsters involved in the drug traffic. At first, as in post-war Italy, these arrangements were temporary and ad hoc, as when Vito Genovese, a New York mafia leader, was installed as interpreter in the Allied Military Government office of Col. Charles Poletti, a former New York Tammany politician.2 Then in 1947 William Donovan, now a corporate lawyer and no longer the head of the Office of Strategic Services (OSS), reportedly financed a May Day massacre of leftists in Sicily, organized by the recently deported Detroit mafia figure Frank Coppola.3

Such arrangements became more centralized in 1948, after the newly created National Security Council created an Office of Policy Coordination (OPC) to carry out "subversion against hostile states" -- i.e., conduct law-breaking as national policy. Thanks to OPC, the U.S. began giving significant covert support to organized drug-traffickers around the world, in the Far East, Europe, and eventually the Middle East and Latin America.

These world-wide activities became more and more inter-related. Since at least 1950 there has been a global CIA-drug connection operating more or less continuously. Especially with the passage of time, this connection has contributed to unexplained deep events and the consolidation of the global dominance mentality, at home as well as abroad. More specifically, the global drug connection is a factor underlying such unexplained deep events as the JFK assassination, the second Tonkin Gulf incident of 1964, and Iran-Contra.

The global drug connection is not just a lateral connection between CIA field operatives and their drug-trafficking contacts. It is more significantly a global financial complex of hot money uniting prominent business, financial and government as well as underworld figures. It maintains its own political influence by the systematic supply of illicit finances, favors and even sex to politicians around the world, including leaders of both parties in the United States. The result is a system that might be called indirect empire, one that, in its search for foreign markets and resources, is satisfied to subvert existing governance without imposing a progressive alternative.

One significant organizer of the post-war global drug connection -- between CIA, organized crime, and their mutual interest in drug-trafficking -- was former OSS officer Paul L.E. Helliwell. Helliwell, who was head of the Special Intelligence branch of OSS in Kunming, and later an officer of OPC and the CIA, was simultaneously the owner of the Bank of Perrine in Key West, Florida, "a two-time laundromat for the Lansky mob and the CIA," and its sister Bank of Cutler Ridge.4 Here we shall see a number of interrelated mob-CIA money-laundering banks in the global drug connection, of which the greatest was undoubtedly the Bank of Credit and Commerce International (BCCI).

Most people have never heard of Paul Helliwell. Mainstream books about CIA wrongdoings, like Tim Weiner's Legacy of Ashes, make no mention of him, of his important CIA-related bank, Castle Bank in the Bahamas, or for that matter of an even more important successor bank to Castle, BCCI. In the flood of CIA documents released since 1992, one does not find the name of Helliwell in the archival indices of the National Archive, the National Security Archive, or the Federation of American Scientists. In the million declassified pages stored and indexed on the website of the Mary Ferrell Foundation, Helliwell's name appears exactly once -- and that is on a list of documents that were withheld from review during the CIA's search in 1974 for records concerning, of all things, Watergate!5 This silence, even in internal CIA files, about the principal architect of the post-war CIA-drug connection, is eloquent.

Most of what we know about Helliwell derives from the press reaction to the successful CIA effort to block an IRS investigation in the 1970s, known as Operation Tradewinds, of his money-laundering banks. This struggle with Helliwell and the CIA began in 1972, when IRS investigator Richard Jaffe, tracing the funds of arrested marijuana and LSD dealer Allan George Palmer, learned that Palmer "had personally brought some of his money south to the Perrine-Cutler Ridge Bank for deposit."6

Jaffe learned also that the funds had been deposited in the account of a Bahamian entity called Castle Bank. According to Jim Drinkhall in the Wall Street Journal, this bank was "set up and principally controlled" by Helliwell, who "was instrumental in helping to direct a network of CIA undercover operations and ‘proprietaries.'"7 Drinkhall wrote that the CIA shut down Jaffe's investigation of the Castle Bank because Castle

was the conduit for millions of dollars earmarked by the CIA for the funding of clandestine operations against Cuba and for other covert intelligence operations directed at countries in Latin America and the Far East.8

Drinkhall further noted what Helliwell is probably most famous for (and what I have written about in The War Conspiracy):

In 1951, Mr. Helliwell helped set up and run Sea Supply Corp., a concern controlled by the CIA as a front. For almost 10 years, Sea Supply was used to supply huge amounts of weapons and equipment to 10,000 Nationalist Chinese [KMT] troops in Burma as well as to Thailand's police.9

But Drinkhall did not point out what is now not disputed, that both the KMT troops in Burma and the Thai Police were the two main arms of the CIA-KMT-Burma-Thai drug connection, and were involved together in the growth and trafficking of opium for the world market, including the United States.10

Helliwell's favors for the CIA were not restricted to the Far East. Along with two old associates from the KMT-Burma drug connection, Frank Wisner of the CIA and General Claire Chennault of the CIA's airline CAT, Helliwell "also worked CIA operations in Central America as early as 1953-54. In those days, the target was Guatemala and its government."11

Like Chennault and his old associates from his days in China, Whiting Willauer and William Pawley, Helliwell then assisted the CIA in operations against Guatemala in 1954, and after 1960 against Castro. According to Drinkhall,

One former federal official who helped scrutinize Castle says, "Castle was one of the CIA's finance channels for operations against Cuba." Mr. Helliwell reputedly was one of the paymasters for the ill-fated Bay of Pigs invasion in 1961, as well as for other "extensive" CIA operations throughout Latin America.12

As for ex-convict Wallace Groves' connection to the CIA, a number of CIA documents have since been released that confirm this relationship. According to one of them,

The Wallace GROVES, mentioned in the attachments as being connected with Meyer LANSKY and the Mary Carter Paint Co./Resorts International, Inc., is identical with the Wallace GROVES who is the subject of OS file #473 865. This file reflects that from April 1966 to April 1972, GROVES was of interest to the [CIA] Office of General Counsel for the utilization of GROVES as an advisor or possible officer of one of the Project ???? entities. Additional information in this file would suggest that GROVES was connected with Meyer LANSKY.13

I suspect that these "Project ???? entities" involved the use of off-the-books funds not included in the authorized CIA budget.
Helliwell's Connection to Off-the-Books Operations

Since the publication of Drinkhall's article, almost every reference to Helliwell has described him as a paymaster for the Bay of Pigs, a claim which I am about to question. But a sense of the scale of Helliwell's financial involvement with the CIA can be gathered from the CIA's sequestering of almost $5 million from another Helliwell-related entity, Intercontinental Diversified (I.D.C.). Drinkhall again:

Although there is no reference to the CIA in the SEC proceeding concerning Intercontinental, a former CIA official in a recent interview made an astonishing statement. He said that between 1970 and 1976, almost $5 million of Intercontinental funds was siphoned out for the agency's use "because we had friends there." Indeed the CIA apparently had a better arrangement than mere friendship. CIA documents show that Wallace Groves, the founder of Intercontinental and holder of 46% of its shares until he sold his interest for $33.1 million in 1978, was secretly working for the CIA from 1965 to 1972.

Assuredly bankers do not transfer millions of dollars out of friendship. A more credible speculation is that Helliwell was the paymaster, not for officially authorized operations such as the Bay of Pigs, but for dispensing some of the funds from off-the-books operations such as the KMT drug traffic out of Burma supported by his own creations, the CIA proprietaries Sea Supply and Cat Inc. (later Air America).

Jonathan Marshall once wrote categorically that "Helliwell laundered CIA funds through the Bahamas-based Castle Bank."14 But this claim may require clarification. I.D.C. was a spinoff from an Asian company, Benguet Mining, that was represented by Helliwell's firm and partly owned by the Philippine dictator Ferdinand Marcos.15 Thus payments from Asia reached I.D.C., and it is my speculation that it was these off-the-books funds, rather than funds from the congressionally authorized CIA budget, that were used by Helliwell to finance off-the-books operations.16

One of these may have been political payoffs, starting in the Bahamas itself.

In the early 1970s, IRS agents reported evidence, gleaned from taped conversations, that Intercontinental, operating through Castle Bank, had paid Bahamas Prime Minister Lyndon O. Pindling $100,000 to grant the holding company a two-year extension of its [Grand Bahama] casino gambling license.17

But the CIA as well as the casino had a penchant for corruption, and Castle was only one part of a network of banks and agents corrupting governments worldwide. Thus Castle

also did mysterious transactions with a Cayman Islands firm, ID Corp. ID's sole owner, the American Shig Katayama, became know as one of the key facilitators of Lockheed Corp.'s huge payoffs to Japanese politicians in return for airplane contracts. Of Katayama one Japanese journalist charged, "his real job (in the early 1950s) was to handle narcotics for the U.S. intelligence work."18

By the 1960s if not earlier, the CIA was using its global connection to distribute non-governmental funds through agents of influence like Adnan Khashoggi and Yoshio Kodama, in the form, for example, of payoffs added into international Lockheed sales contracts.19 In May 1965, five months before the anti-Sukarno coup of September 1965, Lockheed payoffs in Indonesia were redirected from a supporter of President Sukarno to a new middleman who was backing the anti-Sukarno General Suharto.20

This was at a time when "Congress had agreed to treat U.S. funding of the Indonesian military (unlike aid to any other country) as a covert matter, restricting congressional review of the president's determinations on Indonesian aid to two Senate committees, and the House Speaker, who were concurrently involved in oversight of the CIA." Thus, Lockheed payments passed through middlemen were used to frustrate the expressed will of the U.S. Senate, which passed a resolution to cut off military aid to Indonesia altogether.21
Helliwell's Connections to the Mob

But if Helliwell's CIA connections were big-time, his connections to the mob, and particularly Meyer Lansky, were no less so. The Bank of Perrine was the preferred depository of Lansky funds reaching America from the Bank of World Commerce in the Bahamas, established by Lansky's point man John Pullman in 1961.22 One of the bank's directors was Alvin Malnik, Lansky's heir in Miami Beach, and a stockholder was Ed Levinson, a business partner of Lyndon Johnson's Senate aide Bobby Baker, whose title, before he was arrested and convicted for tax evasion, was the Secretary of the Democratic Majority in the U.S. Senate.23 Helliwell had a second Lansky connection as legal counsel for the small Miami National Bank, used by Meyer Lansky to launder his foreign profits and skim from the Las Vegas casinos.24

Though usually described as a mob bank controlled by Lansky, the Bank of World Commerce opened on to an international scene in which the CIA had an interest. Funds reached it from the International Credit Bank in Switzerland, which had been founded by the Israeli gunrunner Tibor Rosenbaum, and acted

as banker to joint business ventures of European Jews and the state of Israel. But it also financed the acquisition and movement of weapons to Israel and its allies, particularly in Africa and central America, and reputedly acted as paymaster for Mossad, the Israeli secret service, in Europe.25

According to Alan Block, Pullman's bank had another subsidiary in the Bahamas, "united in some shadowy way with Intra Bank in Beirut, Lebanon." Intra owned the Casino de Liban, "whose gambling concession was controlled by Marcel Paul Francisi, France's top heroin dealer. Some investigators were convinced that Lansky and Francisi were partners in heroin racketeering, and that Lansky and his associates had a piece of the casino as well."26 Francisi in turn teamed with a local Lebanese exporter of morphine base, Sami El Khoury, who in turn had "a long-term business relationship" with Lucky Luciano in Sicily, Lansky's pre-war ally in New York City and now a major European trafficker.27

Sami El Khoury had protection from the Lebanese police, and possibly the CIA as well. Alfred McCoy saw official correspondence of the Federal Bureau of Narcotics (FBN) discussing, in August 1963, "whether to use Sami El Khoury as an informant now that he had been released from prison."28 One of the two FBN correspondents, Dennis Dayle, later told James Mills that El Khoury, "among the top international traffickers of all time," did become an informant.29 And in the 1990s Dennis Dayle, having retired as a top DEA investigator in the Middle East, told an anti-drug conference that "in my 30-year history in the Drug Enforcement Administration and related agencies, the major targets of my investigations almost invariably turned out to be working for the CIA."30

The Castle Bank was yet another "dual purpose laundromat" serving both the CIA and the mob. The mob's interest in Castle was seriously understated in Jim Drinkhall's Wall Street Journal article, which mentioned only that among a lengthy list of account holders at Castle were "three men -- Morris Dalitz, Morris Kleinman, and Samuel A. Tucker -- who have been described in Justice Department documents as organized crime figures."31 (Kleinman and Helliwell had numerous real estate investments in common with Burton Kanter, the Chicago lawyer who with Helliwell organized Castle Bank.)32

Alan Block suggests that in fact Castle became an active bank when it was necessary rapidly to transfer funds from Mercantile Bank and Trust in the Bahamas, another Helliwell bank that, "like Castle…was a conduit for CIA money,"33 and was about to go under. The funds were moved "at the vigorous urging" of Kanter,

because among the accounts in peril was one held by Morris Kleinman, a notorious organized crime figure since the days of Prohibition. On this matter, Castle's president, Sam Pierson…stated it had to be done or "Kanter will end up face down in the Chicago River."34

Kanter seems to have specialized in handling the tax aspects of legitimating mob wealth. In addition to founding Castle Bank with Helliwell, he was "energetically at work in California" on the La Costa real estate development, which also involved former Cleveland syndicate member Moe Dalitz, "a part owner of several gambling casinos, including the Desert Inn and the Stardust Hotel."35 Block links Kanter to La Costa's ability to receive major funding from the corrupt Teamsters Central States Pension Fund: "Kanter's access to the Pension Fund likely came from Allen Dorfman, a friend and business associate. Murdered in 1985 to prevent him from talking about mob investments, Dorfman was an important Fund official and racketeer."36
The CIA, the Mob, and Off-the-Books Operations

Helliwell was not the only CIA connection to the mafia, nor the most highly placed. Plots to assassinate Castro in 1960 were initiated from the CIA's Office of Security through a go-between, Robert Maheu, whose independent business had been launched with the help of an Office of Security retainer. It was Maheu who transmitted the CIA assassination proposal to John Roselli.37

A more on-going relationship to the mob was maintained by the CIA's Counterintelligence (CI) Staff Chief, James Angleton. He too used a go-between--the New York lawyer Mario Brod--who, according to a CIA memo, was a CI Staff agent in New York City from 1952 to 1971.38 One of the sensitive CI Staff agents handled by Brod in New York was Jay Lovestone, the AFL-CIO International Affairs Chief who transmitted funds to strong-arm gangs in Marseille allied with Corsican drug traffickers who were part of the Lansky-Luciano global drug connection.39

According to Doug Valentine, Lovestone's assistant Irving Brown was implicated in drug smuggling activities in Europe, at the same time that he used CIA money to establish

a "compatible left" labor union in Marseilles with Pierre Ferri-Pisani. On behalf of Brown and the CIA, Ferri-Pisani (a drug smuggler connected with Marseilles crime lord Antoine Guerini), hired goons to shellack striking Communist dock workers.40

Lovestone, a former Communist turned militant anti-Communist, together with his mentor David Dubinsky of the International Ladies' Garment Workers' Union, had also fought the creation of the more militant CIO union movement in the 1930s, and the United Auto Workers of Walter and Victor Reuther in particular.41 The rival UAW-AFL, which Lovestone favored, turned to mobsters for muscle, and hired as its New York regional director John Dioguardi, a member of the Lucchese mafia family.42 Dioguardi was later blamed by U.S. Attorney Paul Williams for the blinding of labor journalist Victor Riesel and the subsequent murder of the man who threw acid in Riesel's face.43

Another sensitive agent handled by CI Staff agent Brod, Angleton's go-between with the mob, was the Russian defector Anatoliy Golitsyn, whom Angleton segregated from the regular CIA bureaucracy in his unending search for a high-level mole inside the CIA. Angleton (according to his biographer Tom Mangold) was "quietly building an alternative CIA," with its own communication system, archive, and vault, using very dubious information from Lovestone and Golitsyn. The heart of this alternative CIA was CI's "inner sanctum: the super-secret Special Investigation Group" (CI/SIG), where were assembled files to show that Henry Kissinger and Averell Harriman were possible KGB moles.44

A third sensitive agent handled by Brod was Herbert Itkin, a controversial double agent working with the mob on the one hand, and CIA and FBI on the other. But like Itkin, Brod himself "had contacts with the Mafia."45 A CIA flap occurred in 1970 when Itkin was being used by the Justice Department and FBI to prosecute a number of mob figures with one-time connections to Havana, such as James Plumeri, Ed Lanzieri, and Sam Mannarino, for illegal kickback arrangements with the Teamsters. The U.S. Attorney telephoned the CIA's Legal Counsel to advise that Mario Brod had entered the courtroom in order to work with the defense.46

According to Court records, "The defense sought to call Mario Brod, who was described as Itkin's contact with the Central Intelligence Agency. It was stated that Brod would testify that he would not believe Itkin under oath and that Itkin's reputation for truthfulness was bad."47 The CIA's Legal Counsel concurred with the U.S. Attorney's steps to block Brod from testifying. His office noted Brod's explanation of his behavior for the record: "One of the defendants by the name of Lenzieri [(sic), i.e., Edward the Buff Lanzieri] was Brod's only contact inside the Mafia who would alert Brod if he was in personal danger."48

But Brod may have been acting out of more than self-interest, for it has been suggested that some of the mafia defendants in the kickback trials also had a deeper CIA connection, even if off the books. According to Dan Moldea, two of the defendants, John La Rocca and Gabriel Mannarino, had been involved in Cuban gunrunning operations with Hoffa; and he suggests that Hoffa persuaded La Rocca and Mannarino, along with two other kickback defendants (Salvatore Granello and James "Jimmy Doyle" Plumeri), "to cooperate with the agency."49 Moreover, all of the defendants in the kickback trials where Itkin testified, and Brod tried to intervene for the defense, were members of so-called "paper locals" in the Teamsters (and earlier the UAW-AFL), controlled by Plumeri's nephew, John Dioguardi.

In June 1975, six months after the leak about Angleton and Operation CHAOS that led to Angleton's ouster, Time magazine alleged that the CIA had used Brod's mafia contacts, Plumeri and Granello, "to do some spying in Cuba in preparation for the 1961 Bay of Pigs invasion."50 (I have found no corroboration for Time's claim in released CIA documents.)

Like Brod, Angleton himself allegedly had mafia contacts, and on at least one occasion intervened to prevent another part of the CIA from investigating the banking of illegal Lansky skim from Las Vegas. A senior official in Robert Kennedy's Justice Department asked John Whitten, the CIA's one time chief of the Mexico/Panama desk in Western Hemisphere Division, to investigate numbered bank accounts in Panama because Las Vegas gamblers were using them to smuggle cash, "which they skimmed off the top of their daily take." Using his CIA pseudonym "John Scelso," Whitten testified to the Church Committee about Angleton's actions.

At that time we were in an excellent position to do this…. I thought it was a great idea. And promptly this came to Mr. Angleton's attention, and we had to brief him on it, and he said, well, we're not going to have anything to do with this. This is the Bureau's [FBI's] business. And whammo, end of conversation. We were called off. I went to Colonel J.C. King, who was at that time the Chief of the WH Division, and told him this, and J.C. King said….well, you know, Angleton has these ties to the Mafia, and he is not going to do anything to jeopardize them. And then I said, I didn't know that. And he said, yeah, it had to do with Cuba.51

Angleton's defense of Lansky's skim cannot be separated from his second function in the CIA, as handler of the Israel desk. Angleton's connections with Mossad dated back to World War II, when he had coordinated OSS operations in Italy with the Jewish underground headed locally by Teddy Kollek (later Israel's Mayor of Jerusalem).52
Angleton's "Alternative CIA" and Its Legacy

Moreover CI/SIG, the "inner sanctum" of Angleton's "alternative CIA," affected U.S. history significantly in 1963. Its so-called 201 or "personality" file on "Lee Henry Oswald" (the man known to the world as Lee Harvey Oswald), had been filled with false and falsified information since it was opened in December 1960. And two messages in the 201 file were falsified again in October 1963, in such a way as to allow Oswald to be a credible "designated suspect" in the assassination of John F. Kennedy one month later.53

The falsification of Oswald's 201 file may have originated as a legitimate counterintelligence operation. I have argued that the uniquely falsified messages were part of a so-called "marked card" or "barium meal" test to determine if and where leaks of sensitive information were occurring. This was a familiar technique, and was the responsibility of the CI/SIG, which was responsible for the 201 file.54

But by October 1963 we see signs that CIA cables on Oswald were also being manipulated, in order to enable him to become a designated suspect in the November 22 assassination of President Kennedy. A CIA teletype to the FBI in October 1963 (drafted by a CI/SIG officer) withheld the obviously significant information that Oswald had reportedly met in Mexico City with a Soviet Vice-Consul, Valeriy Kostikov, believed by CIA officers to be an officer of the KGB.55 This withholding helped ensure that Oswald would not be subjected to surveillance by the FBI after the alleged encounter, surveillance which presumably could have limited his ability to become a designated suspect by his presence at a particularly sensitive corner in Kennedy's Dallas parade route. I have argued that similar CIA withholding from the FBI of information about two alleged 9/11 hijackers, Nawaz al-Hamzi and Khalid al-Mihdar, likewise made it possible for them to play the role of designated suspects by preventing FBI surveillance, as well.56

CIA Director William Colby forced Angleton to resign from the CIA in the post-Watergate climate of December 1974, following public revelations about Angleton's involvement in the CIA's possibly illegal Operation CHAOS (the surveillance of Americans in the United States). This spelled the end of Angleton's "alternative CIA" in the Counterintelligence Staff. For about another year leaks like the one we saw about CIA links to Brod's mobsters continued to expose (and in this way help terminate) the morass of CIA links to Cuban exile terrorists and other members of the global drug connection.

But in 1976 the climate changed dramatically, after Donald Rumsfeld and Dick Cheney in the so-called "Halloween massacre" (managed from President Ford's White House) replaced CIA Director Colby with George H.W. Bush, and sent Rumsfeld from the White House to be Secretary of Defense. If 1975 was the post-Watergate year of dramatic disclosures about CIA involvement with Cuban exiles and mobsters in assassination efforts, 1976 was the year in which mob-connected Cuban exiles and the Chilean intelligence agency DINA, both involved in drug trafficking, indulged in a wave of terrorist killings. These included the blowing up of a civilian Air Cubana airliner and the assassination in Washington of former Chilean foreign minister Orlando Letelier.57

However, the CIA was now no longer the sole or perhaps even the chief point of U.S. contact with the DINA-sponsored international Operation CONDOR, which carried out multiple killings. U.S. Ambassador to Paraguay Robert White, a career State Department official whose antipathy to these murders cost him his job after Reagan was elected, heard from the Paraguayan Armed Forces Commander that "intelligence chiefs from Brazil, Argentina, Chile, Bolivia, Paraguay, and Uruguay used 'an encrypted system within the U.S. [military] telecommunications net[work],' which covered all of Latin America, to ‘coordinate intelligence information.'"58

Henry Kissinger, who in 1976 was in his last year as Secretary of State, played at best an equivocal role vis-à-vis this wave of right-wing violence. Before lecturing Chile publicly in Santiago for its human rights violations ("The condition of human rights…has impaired our relationship with Chile and will continue to do so."), Kissinger privately assured Pinochet that he was compelled by U.S. politics to say this, and that in fact his main concern was the move in the U.S. Congress to cut off aid to Chile.59

U.S. protection and even support for the terrorists of 1976 has continued to the present day. Luis Posada Carriles, the principal architect of the Air Cubana bombing, "served prison time in Venezuela for the Cubana bombing;" and "later, in the 1980s, he worked again on behalf of the CIA in Central America, helping to coordinate the Contra supply network."60 Posada was arrested and convicted again in Panama in 2000 for an assassination attempt on Fidel Castro, this time with Guillermo Novo, one of Letelier's murderers. Both men were promptly pardoned by Panama's outgoing president.61 In May 2008, Posada was honored by 500 fellow Cuban Americans at a sold-out gala in Miami, after charges against him for illegal entry into the United States were thrown out by a federal judge in Texas.62

CIA Director Bush also promoted Theodore Shackley, who for years had handled the CIA's maverick Cuban exiles in Miami. According to Kevin Phillips,

In late 1976, Bush had also protected wayward or hot-triggered Agency operatives -- veterans of everything from Chilean assassinations to Vietnam's Phoenix Program and improper domestic surveillance -- from indictment by President Ford's Justice Department.63

But the spirit of post-Watergate restraint returned to the CIA under President Carter and his CIA Director, Admiral Stansfield Turner. Thanks largely to a series of leaks about his friend, Edwin Wilson, Shackley's standing in the CIA diminished until he left in 1978.64

However, it is the argument of William Corson and Joseph Trento that the spirit of an alternative and more activist CIA survived under Shackley in exile. Trento writes that Shackley was supported by the Shah of Iran's Safari Club (see below), and by Richard Helms, U.S. Ambassador to Iran. The regular CIA Station Chief in Iran "repeatedly complained that Helms seemed to be running his own intelligence operations out of the embassy," and that CIA veterans who had worked under CIA officer Theodore Shackley, "formed the cadre of a private, shadow spy organization within America's official intelligence service."65
Helliwell, Castle, and the Overworld

We have not yet dealt with the overworld connections of Castle Bank. The most affluent depositors there "were members of the fabulously rich Pritzker family from Chicago, clients of the Kanter firm."66 Block observes that the Pritzkers, whose vast holdings include the Hyatt hotel chain, also obtained a loan from the Teamsters Pension Fund for a hotel-casino investment in Nevada, and that "Jimmy Hoffa and Allen Dorfman worked personally on Pritzker loans."67

Kanter and Castle Bank also planned developments with other members of the overworld, such as Henry Ford II and his wife, Christina.68 Mercantile, the predecessor bank to Castle, represented investments from two shipping magnates: the billionaire Daniel K. Ludwig, and the extremely wealthy Norwegian shipbuilder Inge Gordon Mosvold, who was perhaps fronting for Ludwig.69

Mercantile and Castle interlocked closely with another Helliwell Bahamas bank, eventually called Underwriters Bank, Limited. Here the majority holder with 95 percent was the American insurance conglomerate American International Underwriters Corp. [AIUC], which began as part of the insurance empire headed by former OSS agent C.V. Starr, and is today part of the giant multinational AIG. Block correctly reports that AIUC "was an insurance conglomerate with suspected ties to the C.I.A. in Southeast Asia."70

I have written elsewhere how the C.V. Starr group was represented in Washington by Thomas ("Tommy the Cork") Corcoran, and headed after World War II by Corcoran's former law partner, William S. Youngman. It thus interlocked with the so-called Chennault circle (or Chennault's "Washington squadron"), the powerful cabal put together with Roosevelt's blessing in 1940 to enable the equipment, staffing, and financial support of General Claire Chennault's Flying Tigers in China.71

Corcoran had been a key figure in Washington since the 1930s, when he headed "FDR's informal intelligence service and international spy operations long before there was an OSS."72 By the 1950s, when he was said by Fortune to maintain "the finest intelligence service in Washington," his lobbying activities had become intimately involved with influencing CIA covert operations:

Most of [his clients] are companies with international interests and he has a choice clientele in this field. It includes United Fruit Co., American International Underwriters Corp. (part of the C. V. Starr interests in Asia and elsewhere) and General Claire Chennault's Civil Air Transport, Inc. In late 1951 Corcoran, for one example, was working his intelligence service overtime keeping up with American policy on Iran—what the State Department did in this affair would be a guide to what it might or might not do to keep his client, United Fruit, from being thrown out of Guatemala.73

Helliwell and Corcoran played a crucial role together in the prolongation of Chennault's Asian influence, when the two men persuaded Frank Wisner of OPC to purchase and refinance Chennault's post-war airline CAT (later the CIA proprietary Air America). Also figuring in this important decision was William Pawley, a key figure in Chennault's so-called "Washington squadron" during World War II.74 Together with Sea Supply Inc., Helliwell's other creation, CAT became the chief logistic infrastructure for the KMT drug-trafficking troops in Burma.75
Helliwell and the Politics of Influence

Helliwell and Corcoran's law firm, Corcoran and Rowe, also cooperated with William Donovan in using Thai money to influence Congress. Helliwell himself was a key organizer for the Republican Party in Florida, helping to win the state for Eisenhower in 1952 and thus launching the Republican ascendancy in the South. (Helliwell later became close to Nixon's companion, Bebe Rebozo.)76

Corcoran and Rowe, meanwhile, were Democrats, the latter close to the upcoming Texas senator Lyndon Baines Johnson. Corcoran in the 1940s had managed the accounts and political business of Chiang Kai-shek's brother-in-law, T.V. Soong, who by diverting millions in Chinese gold to his California accounts had become one of the richest men in the world.

Together with Soong, Corcoran lobbied successfully for a lend-lease program to Nationalist (KMT) China, and to a private American Volunteer Group recruiting pilots from the armed forces for a private company headed by Corcoran's friend, William Pawley. In fact, the pilots were being recruited to fight in China as part of Chennault's irregular Air Force, for Chiang Kai-shek and the KMT:77

In effect, Corcoran was running an off-the-books private war in which a private company, China Defense Supplies, was diverting some of the war materiel destined for China to a private army, the American Volunteer Group.78

After the war, Soong, Corcoran, and Pawley became strong backers of the pro-KMT China Lobby.79 The State Department officers unfortunate enough to be entered in T.V. Soong's "black book" became targets of the purges conducted by J. Edgar Hoover and later Joseph McCarthy.80

The Soong-backed China Lobby's fortunes declined dramatically with those of McCarthy in 1954. At this point Corcoran and Donovan, who had previously collaborated on Chennault's preemptive purchase via CAT of China's commercial air fleet in 1949, collaborated again to maintain the flow of funds from Asia to influence Congress. The new source was the Thai dictator, Phao Sriyanon, a major beneficiary of the KMT drug network established by Helliwell, Sea Supply, and CAT. (At the time of his death as an exile in Switzerland, Phao was said to be "one of the richest men in the world.")81

After scandals and exposés had forced the revamping of the China Lobby in Washington,

the private arm of the Thai Lobby had mustered its own resources…. Through Donovan, [OSS veteran Willis] Bird [Sea Supply's purchasing agent in Bangkok], or his other CIA connections, Phao had, by that time, hired lawyer Paul Helliwell…as a lobbyist in addition to Donovan. Donovan [who received a reported $100,000 from the Thai government] and Helliwell divided the Congress between them, with Donovan assuming responsibility for the Republicans and Helliwell taking the Democrats.82

How did Helliwell, an influential Republican lawyer working full-time in Miami, "take" the Democrats? By acting in his role as Thai Consul in Miami: his annual reports as a foreign lobbyist reveal that he passed tens of thousands of dollars a year to James Rowe, of Corcoran and Rowe.
Helliwell, Resorts International, and the Politics of Corruption

Helliwell and his banks also handled real investments for the Lansky crowd:

Among the Florida real estate companies that benefited from Helliwell's sleight of hand was General Development Corporation, controlled by Louis Chesler, a Florida real estate developer and associate of Lansky, and "trigger Mike" Coppola, a Lansky crony. Chesler was the partner of Wallace Groves….Chesler and Groves were partners in a gambling venture with Resorts International, through a Grand Bahamian company whose counsel was the law firm of Helliwell, Melrose, and DeWolf.83

Resorts International, formerly the Mary Carter Paint Company controlled by James Crosby, was the majority owner of a Bahamas resort, Paradise Island, which was unable to obtain a license until Wallace Groves was brought in as a partner in 1966. The well-known reaction of a U.S. Justice Department official to this change of ownership was, "The atmosphere seems right for a Lansky skim." Years later, "lawyers for New Jersey's Gaming Enforcement Division would oppose the granting of a gambling license to Crosby and his company [Resorts International], citing ‘links with disreputable persons and organizations,' and specifically their record on Paradise Island."84

Like Helliwell and Groves, so Resorts International was part of the global CIA-mob connection. According to a 1976 CIA memorandum included in its Meyer Lansky Security file,

Resorts International, Inc., is the Subject of OS [Office of Security] file #591 722. This file reflects that Resorts International, Inc. was of interest to Cover and Commercial Staff, DDO [Operations Directorate], in 1972 and 1973.85

As the same CIA memo makes clear, this was after a 1969 book, The Grim Reapers by Ed Reid, had exposed the company's connections to Wallace Groves and, through its casino manager Eddie Cellini, to what the CIA memo called "the gambling activities of the organized crime boss Meyer LANSKY."86 Resorts International, in other words, occupied a "cut-out" intermediary role between the CIA and Eddie Cellini, just as (we shall see in a moment) a similar cut-out role was performed in 1960 by the CIA's Bay of Pigs leader, Tony Varona.

1972, the year in which Resorts became "of interest" to the CIA, was also the year in which Meyer Lansky was indicted in Miami, along with Dino Cellini (Eddie's brother). One of the charges in the indictment was that "in 1968 Lansky maintained at least some control over running junkets (a profitable part of a casino operation) to the Paradise Island Casino."87 I shall argue later that both Resorts and the Lansky indictment may have been "of interest" to the CIA in these two years because of the showdown at that time between Nixon and the CIA in the wake of the Watergate break-in.

The CIA may have been aware of the allegations, which surfaced in 1972, that funds from the Paradise Island casino were being secretly carried to Nixon and his friend Bebe Rebozo, by a casino employee. This was Seymour (Sy) Alter, an associate on the one hand of Lansky and his man Eddie Cellini, and on the other hand "a friend of Nixon and Rebozo since 1962."88 The funds came from the Paradise Island Bridge Company, a company partly owned by an officer of Benguet International, a firm represented by Paul Helliwell.89 It is likely that Nixon himself had a hidden interest in the Bridge Company, which might explain the revelation through Operation Tradewinds that a "Richard M. Nixon" (not otherwise identified) had an account at Helliwell's Castle Bank.90
The CIA, Eddie Cellini, Edward K. Moss, and the CIA-Mafia Plots

But there was more to the CIA-Resorts connection. Back in 1967 Resorts casino (at that time, Paradise Island) had hired as its casino manager Eddie Cellini, who had formerly managed Lansky's casino in Havana's Hotel Internacional.91 1967 was the year that the CIA's Inspector-General, in his Report on CIA Plots to Assassinate Fidel Castro, had written that Eddie Cellini and his more famous brother Dino

were believed to be in touch with [Tony] Varona [member of the CIA's front group for the Bay of Pigs Operation]… and were reported to have offered Varona large sums of money for his operations against Castro, with the understanding that they would receive privileged treatment 'in the Cuba of the future.'92

The Inspector-General's Report was written to deal with the political flap raised by Jack Anderson's spectacular charge in 1967 that John F. Kennedy might have possibly been killed as the result of an assassination plot against Castro "which then possibly backfired" against Kennedy himself.93 Jack Anderson's ultimate source for the story was John Roselli, a mob member disgruntled that his cooperation with the CIA on the assassination plots had not protected him from conviction and possible deportation.

Researcher Alan A. Block notes that it was strangely imprudent of Paradise Island to have hired Eddie Cellini in 1967, when it had just weathered an organized crime scandal of its own.94 But the CIA was facing the even bigger organized crime scandal raised by Jack Anderson's column, and the I-G Report had just told CIA Director Helms that Cellini was possibly a go-between in the assassination plots between the two plot principals Varona and Santos Trafficante.95 One possibility is that Resorts hired Cellini to ensure that he would not join Roselli in going public.

There is an important FBI report reproduced without demurrer in a CIA document contained in its Lansky Security file, which is almost devoid of references to Lansky but could very well be called a file on the CIA-mafia plots.96 According to this FBI report, the contact between Varona and the Cellini brothers, representing the mob, was through a Washington public relations agent named Edward K. Moss:

Verona [sic] has taken on Edward K. Moss as his assistant for raising funds to finance operations against Castro….Julia Cellini is alleged to be Moss' mistress and operates a secretarial service [that] is really a front for Edward K. Moss' activities….Julia Cellini's brother, Dino Cellini and his brother (first name unknown), are active fronts for two of the largest casinos that operated in Cuba until the Batista regime….It is alleged that the Cellini brothers are in close contact with Tony Verona [sic] through Edward K. Moss and have offered to contribute considerable sums of money (reported as high as two million dollars) through Edward K. Moss to Tony Verona to finance operations against the Castro regime with an understanding that they would have the major slice "in the Cuba of the future."97

According to the same CIA memo, Moss was a past president of the Public Relations Society of America. At the same time, according to a verbal report from Dun and Bradstreet to then-CIA agent Edwin P. Wilson, "Moss' operation seems to be government contracts for the underworld and possibly surfaces Mafia money in legitimate business activities."98

All this supplies some context to the decision of the CIA Office of Security, on November 7, 1962, to secure a Covert Security Approval (CSAS) for the use of Moss by the Political Action Group of the CIA's Covert Action (CA) staff.99 This of course was more than a year after the FBI had advised the CIA that reportedly "the Cellini brothers are in contact with Varona through Moss and have offered to contribute as high as two million dollars to finance anti-Castro operations."100 Furthermore, FBI information sent to the CIA indicated that Moss's mistress Julia Cellini and her brother Dino Cellini were alleged to be procurers, while "the Cellini brothers have long been associated with the narcotics and white slavery rackets in Cuba."101 The CIA itself had notified the FBI on December 16, 1960, that Julia "Cellino" had advised that her brothers "have long been associated in the narcotics and white slavery rackets in Cuba."102

Still further FBI information indicated that Dino Cellini "was formerly associated with Joseph Francis Nesline WFO [i.e., Washington] top hoodlum, in a gambling operation."103 I have written elsewhere how Meyer Lansky and Joe Nesline "systematically used sexual blackmail [i.e., through white slavery] to compromise a number of people in Washington who were politically influential."104

The CIA remembered that Moss was a questionable character; a memo of November 28, 1962 referred to his "‘unscrupulous and unethical' business practices."105 According to the I-G Report and other memos, "A memorandum prepared by CA [Covert Action] staff in 1965 states that records do not show any use made of Moss;"106 but this carefully worded language would not of course rule out use made of Moss off the books. In fact, the Moss folder's documents confirm the CIA's interest in him, and many documents concern Julia, Eddie, Dino, and Goffredo Cellini.

The documents concerning Moss, the Cellinis, and Varona are very revealing. The FBI alerted the CIA to their relationship and the offer of two million dollars to Varona, "in view of the serious implications of [mob] infiltration of this CIA-supported activity [against Castro]."107 On January 23, 1961, the FBI communicated their concerns to the new Attorney General, Robert Kennedy, then in office for less than a week.108

The response of the CIA was the opposite of what decorum might expect: instead of distancing itself from Moss and his associates, the CIA warmed to them. The CIA arranged for poison pills to be supplied via the mafia to Varona, who in February 1961 became the point man in the CIA-mafia plot to kill Castro.109 In 1962 Varona was selected again to participate, as ZRRIFLE-2, in William Harvey's renewed assassination plots against Castro.110 And in the same year, as we have seen, the CIA took steps to use Moss himself.

Enough crap for one day....

sorry...couple last turds...